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SUPREMECOURT

THIRDDIVISION

G.R.No.159571.July15,2005

DELFINAVda.deRIGONANandSpousesVALERIOLAUDEandVISMINDALAUDE,Petitioners,
vs.
ZOROASTER DERECHO Representing the Heirs of RUBEN DERECHO, ABEL DERECHO, HILARION
DERECHO, NUNELA D. PASAOL, EFRAIM DERECHO, NOEL DERECHO, CORAZON D. OCARIZA
RepresentingtheHeirsofMarcialDerecho,LANDILINOD.PRIETORepresentingtheHeirsofPilarD.Prieto,
JUSTAD.BUENO,ADAD.MAPA,EMMANUELDERECHO,POMPOSODERECHORepresentingtheHeirsof
Apolinar Derecho, VICENTE D. RIGONAN, RUFA D. JAYME Representing the Heirs of Gerardo Derecho,
MARDONIOD.HERMOSILLARepresentingtheHeirsofOlivaD.Hermosilla,Respondents.

DECISION

PANGANIBAN,J.:

Ownerswho,foralongperiodoftime,failtoasserttheirrightstounregisteredrealpropertymaybedeprivedofit
through prescription. Although the present respondents initially owned part of the subject property by virtue of
succession,theirinactionforseveraldecadesbarsthemfromrecoveringitfrompetitionerswhohavepossessedit
asownerssince1928.Thepurposeofprescriptionistoprotectthediligentandvigilant,notthosewhosleepontheir
rights.

TheCase

BeforeusisaPetitionforReview1underRule45oftheRulesofCourt,challengingtheJuly28,2003Decision2of
theCourtofAppeals(CA)inCAGRCVNo.62535.TheassailedDecisiondisposedasfollows:

"WHEREFORE, premises considered, the instant appeal is hereby DISMISSED for lack of merit. The assailed
decisionofthecourtaquodatedOctober26,1998isAFFIRMEDWITHTHEMODIFICATIONthatitsdeclarationof
the[petitioners]aslawfulheirsofDoloresDerechoRigonan,andindicatingtheirlawfulshareequivalenttotheshare
ofonechildofthedeceasedHilarionDerechoisDELETED.

"Costsagainstthe[petitioners]."3

ThetrialcourtsDecision,modifiedbytheCA,haddisposedasfollows:

"WHEREFORE,premisesconsidered,judgmentisherebyrenderedinfavorof[respondents],declaringtheAffidavit
ofAdjudicationexecutedbyLeandroRigonanonApril24,1980andtheDeedofSaleexecutedbyTeodoroRigonan
in favor of Valerio Laude null and void ordering the cancellation of Tax Dec. No. 00667 in the name of Valerio
Laude ordering the [petitioners] to pay [respondents], jointly and severally, moral damages in the sum of
P10,000.00andlitigationexpensesinthesumofP5,000.00.

"[Petitioners] are hereby ordered to giveup and deliver the possession and ownership of the parcel of land in
questionto[respondents].[Petitioners]beingtheheirsofthelateDoloresDerechoareentitledtotherightfulshare
equivalenttotheshareofonechildofdeceasedHilarionDerecho."4

TheFacts

TheinstantcontroversyrevolvesaroundaparceloflandlocatedatTuburanSur,DanaoCity,originallyownedby
Hilarion Derecho. When Hilarion died long before World War II, his eight children Leonardo, Apolinar, Andres,
Honorata,Dolores,Gerardo,Agaton,andOlivabecameproindivisocoownersofthesubjectpropertybyintestate
succession.Subsequently,TaxDeclarationNo.002675wasissuedunderthename"HeirsofHilarion."

OnJuly16,1921,fiveofthecoownersLeonardo,Apolinar,Andres,Honorata,andDoloressoldtheinherited
propertytoFranciscoLacambra,subjecttoafiveyearredemptionclause.6Notably,thethreeotherDerechoheirs
Gerardo,Agaton,andOlivawerenotpartiestothepactoderetrosale.

Sometimein1928,twoyearsaftertheperiodforredemptionexpired,Dolorestogetherwithherhusband,Leandro
Rigonanpurchased7thelandfromLacambraandimmediatelyoccupiedit.8

Morethanfivedecadespassedwithoutanycontroversy.OnApril24,1980,LeandroRigonanexecutedtheassailed
AffidavitofAdjudicationinfavorofhisson,TeodoroRigonan(thedeceasedhusbandofPetitionerDelfinavda.de
Rigonan).9Underthisinstrument,LeandrodeclaredhimselftobethesoleheirofHilarion,10whileTeodoroobtained
thecancellationofTaxDeclarationNo.00267,11andacquiredTaxDeclarationNo.00667inhisownname.12

Duringthesameyear,TeodoromortgagedthesubjectpropertytotheRuralBankofCompostelaofCebu.Dreading
foreclosure,hesettledhisobligationswiththebank13bysecuringtheaidofSpousesValerioandVismindaLaude.
On April 5, 1984, Teodoro executed the assailed Deed of Absolute Sale of Unregistered Land in favor of Valerio
Laude,14whothenobtainedTaxDeclarationNo.00726underthelattersnameonMay10,1984.15

OnNovember10,1993,respondentsastheallegedheirsofHilarionandproindivisoownersofthesubjectrealty
broughtanactionbeforetheRegionalTrialCourt(RTC)ofDanaoCity(Branch25),first,torecovertheproperty
and,second, to annul the Deed of Sale in favor of Laude16 and the Affidavit of Adjudication, whose validity and
authenticitytheyassailedonthegroundoffraud.Theylikewisemaintainedthatthesubjectpropertyhadnotbeen
partitionedamongtheheirsthus,itwasstillcoownedatthetimeitwasconveyedtoPetitionerLaude.17

PetitionersdidnotdenytheimputedfraudintheexecutionoftheAffidavitofAdjudication.They,however,averred
thatthedocumenthadnobearingontheirclaimofownership,whichhadlongpertainedtotheRigonanspouses
following the 1928 conveyance from the absolute owner, Lacambra.18 They theorized that the coownership over
the property ended when the period for redemption lapsed without any action on the part of the coowners.19
Therefore,theRigonanspousesboughtthepropertyaslegitimatevendeesforvalueandingoodfaith, notinthe
capacityofredeemingcoowners.20

Petitionerslikewisearguedthattheyandtheirpredecessorsininteresthadcontinuouslyownedandpossessedthe
subjectpropertyfor72years.Accordingly,acquisitiveprescriptionhadallegedlysetin,intheirfavor,whenthecase
wasfiledin1993.21

Lastly, petitioners maintained that they were entitled to the equitable defense of laches. Respondents and their
forebearswererebukedfornotassertingtheirrightsoverthepropertyforthepast72years.Theysupposedlydidso
onlyafterfindingthatthelandhadbeendeveloped,andthatithadappreciatedinvalue.22

RulingoftheCourtofAppeals

Onappeal,theCAheldthattheAffidavitofAdjudicationandtheDeedofAbsoluteSalewerebothvoid.TheAffidavit
wasdeemedfraudulentbecauseoftheundisputedfactualfindingthatsomeoftheheirsofHilarionwerestillaliveat
thetimeofitsexecutionhence,thestatementthatLeandrowasthesoleheirwasindubitablyfalse.23TheDeedof
SaleinfavorofLaudewasheldvoidbecausethevendor,Teodoro,hadnolegalrighttodisposeoftheentireco
owned property. Moreover, the appellate court found that the evident purpose of the Contract was to deprive the
otherlawfulheirsoftheirclaimsovertherealty.UnderArticle1409(pars.1&2),oftheCivilCode,theContractwas
consideredvoidabinitio.24

AstheContractswerevoid,thedefenseofprescriptionwasinapplicable.Article1410oftheCivilCodestatesthat
actionsforthedeclarationoftheinexistenceofacontractdonotprescribe.25

As for the defense that the coownership ended when the period to redeem expired, the CA ruled that the
redemptionorrepurchasebytheRigonanspousesdidnotendthestateofcoownership.Atmost,therepurchase
gaverisetoanimpliedtrustinfavoroftheothercoowners.26

TheCAaddedthatprescriptionwasinapplicable,becauseitdidnotruninfavorofacoowneraslongasthelatter
recognizedthecoownership.Inthepresentcase,petitionersfailedtoshowthatthecoheirs,exceptDolores,had
repudiatedtheirrightsovertheinheritedproperty.27

TheappellatecourtfurtherruledthatValerioLaudewasnotabuyeringoodfaithfortworeasonsone,hehadbeen
forewarned by Respondent Ruben Derecho that the property was still coowned and, two, Valerio had admitted
seeing the cancelled Tax Declaration under the name of the heirs of Hilarion. These matters should have alerted
Valerio,whoshouldhavethenexercisedprudenceasabuyer.28

Finally, the appellate court held that the action for recovery prescribed within ten years from the issuance of the
Certificate of Title, which operated as a constructive notice. Considering, however, that the subject property was
unregistered,theCAruledthattheprescriptiveperiodshouldbereckonedfromtheissuanceoftheTaxDeclaration
onMay10,1984.Itconcludedthattheactionwasfiledwellwithintheperiodallowedbylawforitsrecovery.29

Hence,thisPetition.30

Issues

Petitionersraisethefollowingissuesforourconsideration:

"1.RespondentCourtofAppealserredinholdingthatthelandsubjectmatterhereofispropertyheldincommonby
theHeirsofHilarionDerechoandan[i]mplied[t]rustwascreatedbytheactofrepurchase.

"2.RespondentCourtofAppealserredinholdingthattheactionfortherecoveryofpossessionandownershipisnot
timebarredbyprescriptionand/orlaches.

"3.RespondentCourtofAppealserredinholdingthatrespondentsactionforannulmentoftheDeedofSaleand
AffidavitofAdjudicationisnottimebarredbyprescriptionand/orlaches.

"4. Respondent Court of Appeals erred in holding that Petitioner Valerio Laude is not a buyer in good faith and
cannotbeconsideredaslegitimateandlawfulownerofthesubjectproperty.

"5. Respondent Court of Appeals erred in resolving the case with an award of litigation expenses and attorneys
fees.

"6.RespondentCourtofAppealsactedwithgraveabuseofdiscretionwhenitruledontheissueof[h]eirship."31

Simplystated,theissuesareasfollows:

1.Whetheratthetimeofthepurchasein1928,coownershipstillsubsistedamongtheheirsofHilarionDerecho

2.Whetheranimpliedtrustwascreated

3.WhethertheactionintheRTCwasbarredbyprescriptionandlaches

TheCourtsRuling

ThePetitionhasmerit.

FirstIssue:

CoOwnership

Petitionersarguethatthecoownershipendedwhentheheirsenteredintoasalewiththerighttorepurchaseand
subsequentlyfailedtoredeemthepropertywithinthestipulatedperiod.Consequently,whentheRigonanspouses
boughtthesubjectlandfromLacambra,itwasaconveyancetothespousesintheirpersonalcapacities,notasco
owners.32

Ontheotherhand,respondentsmerelyadopted33theCAsdisquisitionsdiscussedearlier.

Since the Spanish Civil Code was still in effect when Hilarion died long before the outbreak of the Second World
War34 and when the sale was executed on July 16, 1921, it is evident that the said law governed both the co
ownershipandthepactoderetrosale.

PactodeRetroand

FailuretoRedeem

Underapactoderetrosale,titletoandownershipofpropertyareimmediatelyvestedinthevendeearetro,subject
onlytotheresolutoryconditionthatthevendorrepurchasesitwithinthestipulatedperiod.Pendingtheredemption,
thevendorlosesallownershiprightsovertheproperty,savefortherighttorepurchaseituponcompliancewiththe
requirementsprovidedinArticle1518oftheSpanishCivilCode.35

In a number of cases, this Court has held that once the vendor fails to redeem the property within the stipulated
period,irrevocabletitleshallbevestedinthevendeebyoperationoflaw.36

Intheinstantcase,thepartiestothecontractstipulatedafiveyearredemptionperiod,whichexpiredonJuly16,
1926.Thefailureofthesellerstoredeemthepropertywithinthestipulatedperiodindubitablyvestedabsolute title
andownershipinthevendee,Lacambra.Consequently,barringanyirregularitiesinthesale,thevendorsdefinitively
lostalltitle,rightsandclaimsoverthethingsold.Toallintentsandpurposes,therefore,thevendorsaretroceased
tobecoownersonJuly16,1926.

Clearly then, the parties to the sale Leonardo, Apolinar, Andres, and Honorata (but not Dolores, as will be
explainedlater),aswellasalltheirsuccessorsininterestnolongerhadanylegalinterestinthedisputedproperty,
nonethattheycouldhaveassertedinthisaction.

PurchaseBeyondthe

RedemptionPeriod

AsforDolores,shereacquiredlegalinterestinthepropertybyvirtueofthepurchasein1928,twoyearsafterthe
periodtoredeemhadalreadyexpired.37

Thispurchasecannotbeconsideredasaredemptionintheconceptofapactoderetrosale,whichwouldimplythat
the period to redeem was extended long after it had already expired. Such automatic extension is not possible
because,assuccinctlystatedbyManresa,"iftheextensionismadeaftertheexpirationoftheperiod,thenitisvoid
andofnoeffectbecausethereisnothingtoextend."38

Adiarte v. Tumaneng39illustrates the legal effect of the expiration of the stipulated period for redemption. In that
case, Amanda Madamba sold two parcels of land to Spouses Cirilo Agudong and Emiliana Tumaneng. However,
she reserved for herself the right to repurchase the lots within ten years. Five years after the period expired,
AgudongexecutedaContractpromisingtoresellthelandtoMadamba.Whentheformerdiedwithoutfulfillinghis
promise, the latter filed a suit to compel the widow to execute a deed of sale in the plaintiffs favor. The widow
arguedthatMadambacouldnolongerredeemtheproperty,becausetheperiodforredemptionhadalreadyexpired.

Indebunkingthewidowsdefense,thisCourtruledthattheContractdidnotconstituteapromisetoresell,because
therighttorepurchasehadbeenlostaftertheexpirationofthestipulatedperiod.TheoriginalContractofSalewitha
rightofrepurchasenolongerexistedatthetimeAgudongmadethepromisetosell.Therefore,thepartiesentered
intoanentirelynewandindependentagreementtosell,whichwasbindingonthewidow.

InUmalev.Fernandez,40theCourtruledthatthevendorswereentitledtoredeemthepropertydespitethelapseof
theperiodforredemption,inasmuchasthevendeeshadrenouncedtheirright.OnApril13,1905,aparcelofland
wassoldaretrobyEmigdioUmaleandhiswifetoSpousesFernandez,withoutfixinganyperiodforredemption.On
June12,1909,FernandezexecutedaContractallowingtheUmalespousestoredeemthelanddespitethelapseof
thefouryearperiodofredemption.ThisperiodwasmandatedbyArticle150841oftheSpanishCivilCodeforcases
inwhichnoperiodhadbeenstipulated.In1911,EmigdioUmaleredeemedthelandandtookpossessionofit.

HethensuedtocompeltheFernandezcoupletoexecutetheinstrumentofredemption.Thedefendantscountered
that the land belonged to them, because the vendors had failed to redeem it within the term allowed by law. The
Courtruled:

"Intheabsenceofanexpressstipulationwithregardtotheperiodofredemption,thepurchaser,intheexerciseof
thefreedomtomakecontractsthatispossessedbyall,hasthepowertoextendtheperiodallowedbylaw,provided
thatthenewperiodstipulateddoesnotexceedthetenyearsfixedbyarticle1508ofthecode.Fornothinginthis
articleprohibitsanextension,byagreement,ofthefouryears,whichistheperiodprescribedbylawincaseswhere,
insaleswithrightofrepurchase,noperiodforredemptionhasbeenfixedbytheparties."42[Emphasissupplied]

InhisConcurringOpinion,43JusticeTorresarrivedatthesameconclusion,butonadifferentground.Heexplained
thatthecontractingpartieshadnorighttoextendthelegalperiodforredemptionafterithadalreadylapsedand
that,whenthevendeesalienatedandreturnedthepropertyafterwards,theydidsobyvirtueofanewContractof
Sale,independentofanddistinctfromthepreviousonealreadyterminated.

ItisclearfromAdiarteandUmalethataftertheexpirationoftheperiodforredemption,thepartiescouldeither(1)
enterintoanentirelynewcontractinvolvingthesamepropertyor(2)iftheydidnotexpresslystipulatetheperiod,
extendthetimeforredemption,providedtheextensiondidnotexceedthemaximumperiodoftenyearsallowedby
Article1508.44

Inthepresentcase,Lacambraandtheheirsstipulatedafiveyearredemptionperiod.Whenitlapsed,thevendee
acquiredabsolutetitle,whilethefivecoownerssellerswerestrippedoftheircoownershipoftheproperty.

Therefore,whenDoloresrepurchasedthepropertyin1928,shedidsoinherpersonalcapacity,nolongerasaco
ownerseller. Following the ruling in Adiarte, she is deemed to have entered into an entirely new contract,
independentofthe1921pactoderetrosale.
SecondIssue:

ImpliedTrust

Petitioners contend that the appellate court erred in holding that an implied trust had arisen from the 1928
repurchase by the Rigonan spouses. They argue that the sale was a conveyance of the absolute ownership of
Lacambra over the land, which he had acquired by virtue of a failure to redeem. Therefore, when he sold it, the
spouseslikewiseacquiredabsoluteownership.45

Weclarify.

SatisfyDemandsof

JusticeandEquity

Animpliedtrustarises,notfromanypresumedintentionoftheparties,butbyoperationoflawinordertosatisfythe
demandsofjusticeandequityandtoprotectagainstunfairdealingordownrightfraud.46UnderArticle1456ofthe
new Civil Code, "if property is acquired through mistake or fraud, the person obtaining it is, by force of law,
consideredatrusteeofanimpliedtrustforthebenefitofthepersonfromwhomthepropertycomes."Althoughthis
provision is not retroactive in character, and thus inapplicable to the 1928 purchase, it merely expresses a rule
alreadyrecognizedbyourcourtspriortotheeffectivityoftheCode.47

In the present case, the implied trust arose in 1921, when five of the eight coowners assumed ownership of the
wholeinheritedpropertyandsolditinitsentiretytoLacambra.Thesaleclearlydefraudedthethreeothercoheirs
who were not parties to the transaction Gerardo, Agaton, and Oliva and unlawfully deprived them of their
undividedsharesintheinheritance.Thus,totheextentoftheirparticipation,thepropertyisdeemedtohavebeen
acquired through fraud and the person who acquired it, a trustee for the benefit of the person from whom it was
acquired.48

Inthepresentcase,Lacambrawasthetrusteewhoheldthepropertypartlyforthebenefitofthethreementioned
heirs(cestuisquetrustent).

TheCA,however,erredinfindingthattheimpliedtrusthadarisenin1928,whentheRigonanspousesrepurchased
thepropertyfromLacambra.49Bythen,PetitionersRigonanweremerelysteppingintotheshoesofLacambraas
trustee.

ThirdIssue:

PrescriptionorLaches

Petitioners argue that even if an implied trust existed, acquisitive prescription is still applicable. They rely on the
pronouncementinMedinav.CourtofAppeals50thatacquisitiveprescriptionappliestoimpliedtrusts,providedthere
iscontinuousadversepossessionofpropertyintheconceptofowner.51

Petitionersmaintainthattheyobtainedabsoluteownershipofthesubjectlandthroughacquisitiveprescription.They
pointoutthattheheirsdidnotimpugnthevalidityofthedocumentsofsaleuntilafterseventytwoyears,in1993
whenthecasewasfiledbeforethetrialcourt.52

Petitionersarecorrect.

It is settled in this jurisdiction that prescription,53 as well as laches,54 supervenes in the enforcement of implied
trusts.

PrescriptionofAction

Possessionofthepropertybypetitionerscommencedwaybackin1928,55whentheprescriptiveperiodsapplicable
werethoseprovidedinAct190(CodeofCivilProcedure).TheirargumentfindsbasisinArticle1116ofthenewCivil
Code,whichstatesthat"prescriptionalreadyrunningbeforetheeffectivityofthisCodeshallbegovernedbylaws
previouslyinforcexxx."

UnderSection40oftheCodeofCivilProcedure,anactionforrecoveryofrealproperty,orofaninteresttherein,
canbebroughtonlywithintenyearsafterthecauseofactionaccrues.56

Thecauseofactionofrespondentsaccruedin1928,whentheylostpossessionofthepropertytotheforebearsof
petitioners.Thesepredecessorsininteresttookpossessionfrom192857until1980whenLaude,theirsuccessorin
interest, continued possession up to the present. During this entire time, respondents inexcusably failed to take
actiontorecovertheproperty.In1993,theyfinallyrosefromtheirseemingslumberwhentheyfiledthepresentsuit.
Unfortunately, 65 years had already lapsed and, by that time, their right of action had clearly been barred by
extinctiveprescription.

AcquisitivePrescription

Moreover, petitioners acquired title to the subject property by prescription. Section 41 of Act 190 (Code of Civil
Procedure)provides:

"Titletolandbyprescription.Tenyearsactualadversepossessionbyanypersonclaimingtobetheownerforthat
time of any land or interest in land, uninterruptedly continued for ten years by occupancy, descent, grants, or
otherwise,inwhateverwaysuchoccupancymayhavecommencedorcontinued,shallvestineveryactualoccupant
orpossessorofsuchlandafullandcompletetitle,savingtothepersonunderdisabilitiestherightssecuredbythe
nextsection.Inordertoconstitutesuchtitlebyprescriptionoradversepossession,thepossessionbytheclaimant
orbythepersonunderorthroughwhomheclaimsmustbeactual,open,public,continuous,underaclaimoftitle
exclusiveofanyotherrightandadversetoallclaimantsxxx."

This provision, as authoritatively and consistently interpreted by this Court, allows adverse possession in any
charactertoripenintoownershipafterthelapseoftenyears.58"Prescriptionliesunderthesaidsectioneveninthe
absenceofgoodfaithandjusttitle."59

Intheinstantcase,theRigonanspousespossessedthepropertyintheconceptofownersaftertheirpurchasein
1928.Theypeacefullyoccupiedit,wereneveroustedfromit,andneverpreventedfromenjoyingitsfruits.

Furthermore,possessionbytheRigonanspouseswasadversetotheotherheirs,asshownbythefollowing:one,
the former obtained the cancellation of the Tax Declaration in the latters name two, the spouses executed the
Affidavit of Adjudication, claiming that Leandro Rigonan was the sole heir three, petitioners did not share with
respondents the enjoyment of the property for a halfcentury and four, Teodoro sold the property to Laude.
Respondentswereawareofthesefactsandoftheirrightfulshareintheland.Therefore,theyknewthatpetitioners
wereholdingthepropertyadversetotheirinterests.

Aspetitionershavebeenincontinuouspossessionandenjoymentofthedisputedlandsince1928,alengthoftime
thathasneverbeenquestioned,therecanbenodoubtthattheyobtainedtitletoitbyacquisitiveprescription.

Tostressthefollyofrespondentsprotractedinaction,mayweaddthatthepresentactionwouldstillbebarred,even
iftheCourtweretoapplythethirtyyearperiodfixedbythepresentCivilCodefortheacquisitionofownershipby
extraordinaryprescription60orfortheextinctionoftherightofactionoverimmovables.61

ActiontoAnnulContracts

Imprescriptible,butRecovery

ofRealtyBarredbyAcquisitive

Prescription

TheCAdismissedpetitionersdefenseofprescriptiononthegroundthattheactionforannulmentofcontractswas
imprescriptible,asmandatedbyArticle1410oftheCivilCode.62

Thereisnoquestionthatthesaidactiondoesnotprescribe,buttheprincipalquestioninthiscaseistherecoveryof
thesubjectproperty,whichistheultimategoalofrespondents.TheyseekthenullificationoftheContracts,merely
asameansorpreludetotherecoveryoftheproperty.Unfortunatelyforthem,acquisitiveprescriptionhasalready
setintobartherecovery.

As stated in Bargayo v. Camumot,63 "the prescription of an action and the acquisitive prescription of ownership
cannot and should not be confounded. They are two different and distinct things, although equally transcendent,
beingofidenticalresultandeffect."

In that case, the Complaint filed by the heirs was one for partition, which did not prescribe, while the defendant
raisedthedefenseofacquisitiveprescription.ThisCourttookamomenttoexplainthatthelawspokeonlyofthe
imprescriptibilityoftheaction,notofownership.Itexplainedthus:"xxx[I]tisevidentthattodenytheprescriptionof
the ownership of an inheritance, because Article 1965 of the Civil Code declares the action for its partition
imprescriptible,istoconfoundtheprescriptionofownershipandthatofanactionxxx."64ButtheCourtoverruled
the defense, because the defendant had failed to prove adverse possession, an essential element of acquisitive
prescription.
Similarly, the imprescriptibility of an action to annul a contract does not mean that the present respondents are
perpetuallyallowedtorecovertheproperty,thesubjectofthevoidcontract.Theymayfiletheactiontoannul,but
theirrighttorecoverbasedonownershipiscontingentonthepremisethattheystillowntheproperty.Ownership
may have been lost in the interval during which they remained inactive. For this reason, the Court constantly
remindspartiestoremainvigilantovertheirrights.

ThismatterislikewiseilluminatedbyHeirsofManingdingv.CA.65Inthatcase,Ramonownedtwoparcelsoflandin
Pangasinan. When he died intestate, his four children Roque, Segunda, Juan, and Maria inherited the
contestedproperties.WhileJuanandMariarenouncedtheirrightstotheinheritance,Roqueclaimedthelandashis
ownbyvirtueofadonationpropternuptias,previouslyexecutedinhisfavorbytheirfather.Havingbeenexcluded
fromtheenjoymentoftheproperty,theheirsofSegundafiledanactionforpartitionagainstRoque,aswellasfor
theannulmentoftheconveyancedocuments.

TheCourtruledthattheparcelsoflandhaddevolvedtothechildrenofRamonbyrightofsuccession.Roquedidnot
acquire exclusive ownership of those properties by virtue of the Deed of Donation, which was null and void.
Nevertheless,theCourtheldthathisthirtysixyearsofexclusivepossessionandenjoymentofthepropertysufficed
toconferownershipthroughacquisitiveprescription.TheheirsofSegundawerethusbarredfromrecoveringtheir
sharesintheinheritance.

ItwillbenotedthatManingdingsustainedthedefenseofacquisitiveprescriptiondespitetheimprescriptibilityofthe
actions for annulment of contracts and partition. Simply put, the imprescriptibility of an action is distinct from the
prescriptionofownershipandrights.

Inthepresentcase,weholdthatrespondentscannolongerrecoverthepropertydespitethenullityoftheassailed
contracts,becausetheyhavelosttheirownershipbyreasonofprescription.

Laches

Assumingarguendothattheactiondoesnotprescribe,lacheswouldstillbarrespondentsfrombelatedlyasserting
their claim. The defense of laches, which is a question of inequity in permitting a claim to be enforced, applies
independentlyofprescription,whichisaquestionoftime.66Prescriptionisstatutorylachesisequitable.67

InMiguelv.Catalino,68BacaquiosoldaparceloflandtoCatalinoin1928.Thelatterpossesseditandenjoyedits
fruitsfromthenuntil1962,whentheheirsofBacaquiofiledacomplaintforrecoveryofpossessionoftheproperty.
Theheirsassertedthatthesalewasvoidforlackingtherequisiteexecutiveapproval.TheCourtheldthat,despite
thenullityofthesaleandthefactthatnoprescriptionhadrunagainstthetitleoftheheirs,theactionwasalready
barredbylachesduetotheirpassivityandinactionformorethanthirtyfouryears.

AgaininMejiadeLucasv.Gamponia,69theCourtheldthatwhilethelegaldefenseofprescriptiondidnotlie,the
equitabledefenseoflachesdid.

In that case, Domingo sold a parcel of registered land to Zacarias, who immediately took possession of it and
enjoyeditsfruits.WhentheheirsofDomingofiledanactionfortheannulmentofthesale,GamponiaZacarias
successorininterestprofferedthedefenseofprescription.Thelowercourtoverruledthedefenseontheground
thatregisteredlandscouldnotbeacquiredbyprescription.

The lower court was reversed by this Court. Although Gamponia could not be deemed to have acquired title by
virtueofthefactthatheandhispredecessorshadlongandcontinuedpossessionofthepropertyforthirtyseven
years,theownersrighttorecoveritaswellasthetitletoitwasheldtohavebeenconvertedintoastaledemandby
theirinactionandnegligence.

Lachesisdefinedasthefailuretoassertarightforanunreasonableandunexplainedlengthoftime,warrantinga
presumptionthatthepartyentitledtoassertithaseitherabandonedordeclinedtoassertit.Thisequitabledefense
isbasedupongroundsofpublicpolicy,whichrequiresthediscouragementofstaleclaimsforthepeaceofsociety.
70

As previously mentioned, an action to enforce an implied trust may be circumscribed by laches. Under this
circumstance, repudiation is not even required,71 unless the facts that give rise to the trust are concealed. This
principle holds because of the nature of an implied trust, which involves a certain antagonism between the cestui
quetrustandthetrustee.72Thereisneitherpromisenorfiduciaryrelationthetrusteedoesnotrecognizeanytrust
andhasnointentionofholdingthepropertyforthebeneficiarytherefore,thelatterisnotjustifiedindelayingaction
torecovertheproperty.Havingincurredunreasonabledelay,thebeneficiaryisestoppedbylaches.73

Coming to the present case, the record does not reveal, and respondents do not even assert, that there was a
concealmentofthe1921saleofthepropertytoLacambra.Althoughthreeofthecoheirswerenotpartiestothat
transaction, there is no showing whatsoever that they interjected any objection to the conveyance. There is no
allegation,either,thatrespondentswereunawareofthesaleinfavorofDoloresorofherfamilyspossessionofthe
propertysince1928.Onthecontrary,RespondentRubenDerechowarnedLaudenottobuythelandbecauseithad
notbeenpartitioned.74ThisfactshowsthatrespondentswereawarethatTeodorointendedtoselltheland,amove
thatwasclearlyanactofdominionovertheentireproperty.Theircognizanceofthesefactseliminatestheneedfor
arepudiationonthepartofpetitioners.

ItwasheldinGoChiGunv.CoCho75thatfourelementshadtobeshowninordertouselachesasadefense:(1)
conductonthepartofthedefendant,orofoneunderwhomaclaimismade,givingrisetoasituationforwhicha
complaintisfiledandaremedysought(2)delayinassertingtherightsofthecomplainant,whohasknowledgeor
noticeofthedefendantsconductandhasbeenaffordedanopportunitytoinstituteasuit(3)lackofknowledgeor
noticeonthepartofthedefendantthatthecomplainantwillasserttherightonwhichthelatterhasbasedthesuit
and (4) injury or prejudice to the defendant in the event that the complainant is granted a relief or the suit is not
deemedbarred.

The four requisites are present in the instant case. First, the five coowners act of selling the entire property
deprivedrespondentspredecessorsoftheenjoymentoftheirrightfulsharesintheinheritance.Thisdeprivationwas
thebasisoftheComplaintfiledbyrespondents.

Second,respondentswaitedmorethansixdecadestofileasuitwithoutofferinganyexcuseforthelongdelayinthe
assertionoftheirrights.Theydonotatallclaimthattheywereunawareoftheircoheirsactions.Theycouldhave
institutedanactiontoannulin1921ortorecoverthepropertyin1928,sincetheywerelegallypresumedtoknowof
theinvalidityofthesaleastotheirsharestheydidnothavetowaitforsixtyfiveyearstoinstitutethissuit.

Third,afterbeingallowedmorethansixdecadesofpeacefulpossessionoftheproperty,petitionerswerecertainly
notexpectingrespondentstoreclaimit.AlthoughRubenDerechowarnedLaudenottobuythelandbecauseitwas
stillcoowned,theformerstilltooknoimmediateactiontopreventTeodorofromsellingtheentirepropertyorto
recoverit.Respondentsevenallowedninemoreyearstopassbeforerisingfromtheirstuportoinstitutethe
Complaint.

Fourth,thereisnodoubtthatpetitionerswillsufferifrespondentsareallowedtorecovertheproperty.Theformer
havealreadydeveloped,investedin,andreligiouslypaidthetaxesforitforatleastahalfcentury.Ontheother
hand,respondentsnonchalantlyallowedpetitionerstocontinuewiththeirpossessionandenjoymentoftheproperty,
andthenpounceduponthemwhenthelatterleastexpectedit.

Although we condemn the fraudulent acts of Leandro and the five coowners in their scheme to deprive their
relatives of the latters rightful shares in the inheritance, the fact remains that respondents and their forebears
wasted their opportunity through a lifetime of indifference and apathy. They cannot now be permitted to recover
propertythatothershavepossessed,developed,andinvestedinforsixtyfiveyears.Itwouldbesheerinjusticeto
allow the latter to reap benefits after generations of predecessors passively slept on their rights. The Court aptly
statedinMiguelv.Catalino:

"xxx.Courtscannotlookwithfavoratpartieswho,bytheirsilence,delay,andinaction,knowinglyinduceanotherto
spendtime,effort,andexpenseincultivatingtheland,payingtaxesandmakingimprovementsthereonxxxonlyto
springfromambushandclaimtitlewhenthepossessorseffortsandtheriseoflandvaluesofferanopportunityto
makeeasyprofitathisexpense."76

Tograntrespondentsreliefwhentheyhavenotevenofferedanyjustifiableexcusefortheirinactionwouldbeunjust.
Itiscertainlybeyondourcomprehensionhowtheycouldhaveremainedsilentformorethan50years.Theyhave
onlythemselvestoblameiftheCourtatthislatehourcannolongeraffordthemreliefagainsttheinequitiesthey
allegedlysuffered.

Considering the undisputed facts, not only had laches set in when respondents instituted their action for
reconveyancein1993,buttheirrighttoenforcetheconstructivetrusthadalreadyprescribedaswell.

WHEREFORE,thePetitionisGRANTED.TheassailedJuly28,2003DecisionoftheCourtofAppealsishereby
REVERSEDandSETASIDE.TheComplaintbeforetheRegionalTrialCourtofDanaoCityisherebyDISMISSED.
Nocosts.

SOORDERED.

SandovalGutierrez,Corona,CarpioMorales,andGarcia,JJ.,concur.

Footnotes
1Rollo,pp.1029.