entering into such contract.
JEFFERSON LIM v. QUEENSLAND TOKYO COMMODITIES Inc.
Topic: Natural obliga ons; estoppel; laches
January 4, 2002 | Quisumbing, J.
DOCTRINE: A party who has already benefited from such agreement is estopped to question its validity  July 18, 2002 | Carpio, J.
FACTS:  Benjamin Shia is a market analyst and trader of Queensland Tokyo Commodi es Inc. Shia
was later on introduced to Jefferson Lim by Marissa Bon a since Marissa’s father was a former
employee of Lim’s father. Shia was trying to persuade Lim to invest in the Foreign Exchange
Market by trading US dollars against Japanese yen, Bri sh pound, Deutsche Mark and Swiss
Franc. However, before agreeing to such investment, Lim requested Shia to conduct a simulated
trade without any real money involved.
The mock trading generated beneficial results which prompted Lim to invest in $5000.00 which
was paid through a manager’s check (This check was made in order to answer for any trading
account against which the deposit was made, for any loss of whatever nature, and for all
obliga ons, which the investor would incur with the broker or in short POT MONEY).
Lim was later on allowed to trade with Queensland and that Shia obligated himself to furnish a
regular market report and statement of transac ons concerning the status of Lim’s investment.
The 1st day of trading yielded significant success since Lim was able to have a profit of P6,845.57.
Unfortunately on the 2nd day of trading, Lim loss around P44,465.
Shia later on returned the manager’s check since it would take 17 days to clear such check which
thereby made Lim replace the manger’s check with a traveller’s check. Such traveller’s check
wasn’t indorsed and that out of ignorance of Shia, Shia s ll accepted it since Shia knew that Lim
had a good credit ra ng. Ci bank didn’t accept the check since it wasn’t indorsed and that despite
the numerous demand for Lim to sign such traveller’s check, Lim s ll chose not to and that he
even demanded a liquida on of his account for such will be able to cut his losses
RTC dismissed the pe on of Queensland. CA reversed it on the basis that it was found that Lim
really benefited from the agreement.
ISSUE: Whether or not Mr. Lim is already estopped from assailing whether such agreement is
invalid
HELD: YES.  almost four years later.
Mr. Lim is estopped and the judgement of the Court of Appeal is hereby affirmed. The Supreme
Court held that since Lim was able to benefit from the agreement between him and Queensland,
he is now estopped to claim the validity of the agreement. The essen al elements of estoppel are:
1. Conduct of a party amoun ng to false representa on or concealment of material facts
or at least calculated to convey the impression that the facts are otherwise than, and
inconsistent with, those which the party subsequently a empts to assert
2. Intent, or at least expecta on, that this conduct shall be acted upon by, or at least
influence, the other party;
3. Knowledge, actual or construc ve of the real facts
It was uncontested that Lim really signed the Customer’s Agreement and that he fully knew the
nature of the contract he was entering into. Furthermore, the subsequent acts of Lim really
wanted the Customer’s Agreement to be a valid contract thus making it valid and binding. Lastly,
the Supreme Court also ra ocinated that they can’t save a person from a contract especially
when such contract is valid just because the person didn’t exercise the necessary prudence in
 
CONSTANTE & CORAZON AMOR DE CASTRO v. COURT OF APPEALS and Francisco Ar go
Topic: Natural obliga ons; estoppel; laches
RECIT-READY: Ar go alleged that he had been shortchanged in his commission as real estate
broker. Pe oners argue that Ar go’s ac on is barred by laches because of his inac on and
failure to protest. Court held that Ar go is en tled to his ac on because it was made well-within
the ten- year prescrip ve period.
DOCTRINE:  An  action  is  not  barred by estoppel by laches when it is filed within the time allowed by law. 
Laches  are  the  failure  or  neglect  for  an  unreasonable  and  unexplained length of time to do that which by 
exercising  due  diligence. The  right  of  action  accrues  from  the  moment  the  breach of right or duty occurs. 
Contract of Agency must be brought within 10 years from the time the right of action accrues 
FACTS:  Private respondent Artigo  was authorized by the pe oners to act as real estate broker 
in the sale of the four parcel of lands owned by pe oners. The proper es amoun ng
P23,000,000. It was agreed  upon  that  five  percent of the sale price will be given to the Ar go as
commission. 

Two  lots  were  sold  and Ar go received from pe oners the amount of P48,893.76  as
commission. 
Pe oner felt  shortchanged  because according to him, his total commission should 
be  P352,500 which is five percent of the agreed price of P7.05M for the two lots. 
He sued for the
balance of P303,606.24. 

Pe oners argue that Ar go is selfishly asking for more than what he truly deserved 
as
commission to the prejudice of other agents who were more instrumental in the consumma on of
the sale. Trial court held pe oners liable for P303,606.24 (plus other costs of course). CA
affirmed. 

The De  Castros  contend  that Artigo's  inaction  as  well  as  failure  to  protest  estops  him from
recovering more than what was actually paid him. They also cited Art 1235 which provides that
“when  the  obligee  accepts  the  performance,  knowing  its  incompleteness  and  irregularity,  and  without 
expressing  any  protest  or  objection,  the  obligation  is  deemed fully complied with.” They also contended
that laches should apply because Ar go did not file his complaint in court un l May 29, 1989, or
 
ISSUE: Whether Ar go’s ac on is barred by estoppel and thus, cannot prosper
HELD: NO. 
DUN SA UNANG CONTENTION: SA PAG CITE NG ART 1235
The De Castros' reliance on Ar cle 1235 of the Civil Code is misplaced. Ar go's acceptance of
par al payment of his commission neither amounts to a waiver of the balance nor puts him in
estoppel. This is the import of Ar cle 1235 which was explained in this wise:
"The  word  accept,  as  used  in  Article  1235  of  the  Civil  Code,  means  to  take  as satisfactory or 
sufficient,  or  agree  to  an  incomplete  or  irregular  performance.  Hence,  the  mere  receipt  of  a 
partial  payment  is  not  equivalent  to  the  required  acceptance  of  performance  as  would 
extinguish the whole obligation." 
Obligations and Contracts | Week 14 Cases | Page 1 
A clear dis nc on between acceptance and mere receipt. In this case, it is evident that Artigo  HELD: NO (BOTH ISSUES)
merely  received  the  partial  payment  without  waiving  the  balance.  Thus, there is no estoppel to First, as a rule, one who pleads payment has the burden of proving it. The debtor has the burden
speak of. of showing with legal certainty that the obliga on has been discharged by the payment. In this
  case, cer ficates of deposit were clearly marked payable to bearer which means to the person in
DUN SA SECOND CONTENTION: LACHES SHOULD APPLY possession of an instrument. The bank should not have paid the husband without requiring the
Ar go did not neglect to assert his right. He was appointed as agent on January 24, 1984 – Lots surrender of the cer ficates.
were sold in June 1985. He demanded in April and July 1985 payment of commission. When the
demand for payment was not paid. Ar go decided to sue on May 29,1989. Bank’s defense was because he was one of the bank’s senior managers. However, despite that
  fact, FEBTC never required him to deliver the cer ficates, viola ng the banks policies and
Laches  does  not  apply  because  only four years had lapsed from the time of the sale in June 1985  procedures. The bank therefore failed to exercise diligence required by nature of its business.
it is within the ten-year prescrip ve period. This does not cons tute an unreasonable delay in  
asser ng one's right. The Court has ruled, "a delay within the prescriptive period is sanctioned by law  Second,  laches is the failure or neglect, for an unreasonable length of me, to do that which, by
and is not considered to be a delay that would bar relief.” Petition denied. Artigo ( Respondent ) won.  exercising due diligence, could or should have been done earlier. There is no absolute rule as to
  what cons tutes laches or staleness of demand; each case is to be determined according to its
par cular circumstances.
FAR EAST BANK & TRUST COMPANY v. ESTRELLA QUERIMIT
Topic: Natural obliga ons; estoppel; laches In this case, it would be unjust to allow the doctrine of laches to defeat the right of respondent to
January 16, 2002 | Mendoza, J. recover her savings which she deposited with the pe oner. She did not withdraw her deposit
DOCTRINE:  Courts  will  not  be  guided  or  bound  strictly  by  the  statute  of  limitations  or  the  doctrine  of  even a er the maturity date of the cer ficates of deposit precisely because she wanted to set it
laches when to do so, manifest wrong or injustice would result  aside for her re rement.
   
FACTS:  Estrella O. Queremit worked as an internal auditor for Philippine Savings Bank from LEONOR BIALA v. COURT OF APPEALS (4th Division) and Maria Lee
1962-1982. On Nov 24, 1986, she opened a dollar savings account in Far East Bank and Trust Topic: Natural obliga ons; estoppel; laches
Company. 4 Cer ficates of Deposit were issued each in the amount of $15k totaling $60k. The October 31, 1990 | Medialdea, J.
cer ficates were to mature in 60 days on Jan 23, 1987 and were payable to bearer at 4.5%
interest per annum. RECIT-READY/SUMMARY:  Pe oner Biala is the debtor and respondent Lee is her creditor. Lee
filed an ac on for the collec on of Biala's debt. Biala invoked the defense of prescrip on. The TC
Cer ficates bore the word “accrued”, which meant if they were not presented for encashment or dismissed the case on the ground of prescrip on. CA reversed the decision so Biala appealed to
pre-terminated prior to maturity, the money with accrued interest would be rolled over by the the SC arguing that the ac on filed by Lee is barred by laches, having been filed nine years a er.
bank and annual interest would accumulate automa cally. In 1989, respondent’s spouse required The SC ruled in favor of Lee. Only one of the elements of laches is present in this case.
medical treatment in the United States.
DOCTRINES: 
Respondent used her savings from BPI. In January of 1993, her husband died and she returned to ● For an action to be barred by laches, all the elements of laches must be present. 
the Philippines. She went to FEBTC to withdraw her deposit but she was told her husband had ● The  doctrine  of  laches,  being  an  equitable  principle,  should  not be applied to supplant what is 
withdrawn the money. FEBTC refused to give her the money claiming it had given respondent’s clearly stated in the law, especially if it would defeat and not promote justice. 
late husband tan accommoda on to allow him to withdraw her deposit They presented evidence ● The  doctrine  of  laches  cannot  be  taken  against  respondent  where  petitioner is shown to have 
showing payment to wit: promised from time to time the relief sought for. 
● Laches, being an equitable defense, he who invokes it must come to court with clean hands. 
● 4 FEBTC Dollar demand dra s in $15,100.96 each issued to husband Dominador   
Querimit FACTS:  Respondent Lee filed an ac on for collec on of sum of money against pe oner Biala, in
● Debit cket dated Jan 23, 1987 show debit of $60,443.84 the amount of P31,338.76, based on several causes of ac on, evidenced by documents of three
● Interbatch transac on cket register or credit cket dated Jan 23, 1987 showing that real estate mortgages (REM) and 12 promissory notes (PN) executed by Biala in favor of Lee.
the amount was credited to pe oners Interna onal Opera on Division
Biala denied all the allega ons and contended that (1) although she signed for the amount of
They also claim that she is guilty of laches because the cer ficates of deposit were issued in P12,000 as stated in the first document of REM, the real amount she actually received from Lee
1986, and she only tried to withdraw them in 1996. Trial court rendered judgement in favor of was only P2,000, (2) the other claims of Lee had already been se led, and even if not se led, the
Estrella ordering the bank to pay her the amount of $60k, moral damages, exemplary damages, ac on has already prescribed; and (3) the amounts stated under the other causes of ac on were
and a orney fees. Upon appeal, CA affirmed the decision of the Trial Court with modifica on that never received by her.
FEBTC was solely liable for the amounts. FEBTC failed to prove cer ficates of deposit had been
paid out of its funds The TC dismissed the complaint on the ground of prescrip on of all claims. Lee appealed to the
   CA. The CA reversed the decision of the TC. Hence, this pe on. Biala argued that the ac on
ISSUES:  brought by Lee is barred by laches on the ground of unreasonable delay of nine years before the
1. Whether the subject cer ficates of deposit have already been paid filing of the ac on.
2. Whether she is guilty of laches
Obligations and Contracts | Week 14 Cases | Page 2 
ISSUE: Whether the ac on brought by respondent Lee is barred by laches Lotho was opera ng a 10-ton ice-producing unit. It obtained gross revenue of P13.5k, while it
   suffered P200 loss from opera ng expenses. It also suffered another loss in the following year
HELD: NO.  worth P4.7k. Three years a er, Lotho suffered the heaviest loss amoun ng to 17k and it
Only  one  element  of  laches  is  present  in  this  case.  Laches is the failure or neglect, for an discon nued its opera ons.
unreasonable length of me to do that which, by exercising due diligence could or should have
been done earlier; it is negligence or omission to assert a right within a reasonable me Due to its discon nuance, Lotho’s cer ficate of public convenience was cancelled. It was revived
warran ng a presump on that the party en tled to assert it either has abandoned it or declined eventually when it resumed opera on and only a 5-ton ice-producing unit was used since the old
to assert it. The four basic elements of laches are: 10-ton unit was sold to Sps. Gomez to meet company obliga ons. From February to June of that
year, un l it closed business, Lotho would buy ice from the Farola Ice Plant of the ICS whenever
1. Conduct on the part of the defendant, or of one under whom he claims, giving rise to its machine broke down for resale to its customers.
the situa on of which complaint is made and for which the complainant seeks a
remedy; Lotho’s cer ficate of public convenience was then definitely cancelled by the Public Service
  Commission. ICS is also a corpora on engaged in the same manner of business and it operates in
This is the only element present in this case. (wasn't elaborated)  Manila, Pasay, Quezon, Cavite, and Bulacan. The other defendants in this case are also ice dealers
  of the municipali es of Laguna, which are covered by Lotho’s franchise.
2. Delay in asser ng the complainant's rights, the complainant having had knowledge or
no ce of the defendant's conduct and having been afforded an opportunity to ins tute These franchises depended on Lotho before. However, they eventually shi ed to buy ice from
suit; ICS since it was way more profitable. Lotho tried to win the franchises back but was unsuccessful.
  Lotho alleged that ICS cons tuted to indirect sales within the former’s territory, hence, an
The  lapse  of  nine years within which Lee had not instituted her suit cannot be considered as unreasonable  agreement was reached. However, the agreement was never signed so each party blamed each
delay  to  warrant  the  application  of  laches.  In  the  first  place,  the  action  filed  by  respondent  has  not  yet  other for non-consumma on.
prescribed,  since  it  was  instituted  well  within  the  period  of  10  years  from  the  time  the  cause  of  action 
accrued as provided by law.  TC dismissed Lotho’s ac on to impute ICS of unfair compe on and payment for damages. CA
  denied Lotho’s claim based on the grounds of laches and consent.
3. Lack of knowledge or no ce on the part of the defendant that the complainant would   
assert the right on which he bases his suit; ISSUE: Whether Lotho’s complaint is barred by laches (unreasonable delay)?
 
Biala  has  not  sufficiently  shown  that  she  has  no  knowledge  that  Lee  would  assert  her  right  for  the  HELD: YES. 
collection  of  the  obligations which the former owes the latter. She even admitted the existence of the REM  Essen al elements of the defense of laches:
and the PNs.  1. Conduct of the defendant giving rise to the situa on of which complaint is made for
  which the complaint seeks a remedy;
4. Injury or prejudice to the defendant in the event relief is accorded to the complainant, 2. Delay in asser ng the complainant’s rights, the complainant having had knowledge or
or the suit is not held to be barred. no ce of the defendant’s conduct and having been afforded an opportunity to ins tute
a suit
There  is  no  showing  that  the  Biala  would  be  the  party  injured  or  prejudiced  if  the  suit  is  not  held  to  be  3. Lack of knowledge or no ce on the part of the defendant that the complainant would
barred.  If  the  suit  is  allowed  to  prosper  against  her  and  the  latter  adjudged  liable,  her  liability  would  be  assert the right on which he bases his suit; and
confined  merely  to  the  settlement  of  her  due  and  demandable  obligations  and  the  payment  of  proper  4. Injury or prejudice to the defendant in the event relief is accorded to the complainant
interest to Lee for the default incurred.  or the suit is not held to be barred.
 
In this case, the elements are illustrated in the following manner:
Z.E. LOTHO Inc. v. ICE & COLD STORAGE INDUSTRIES OF THE PHILIPPINES Inc. et. al. 1. Conceded by Lotho when it claimed that there was an invasion by the ICS of its rights
Topic: Natural obliga ons; estoppel; laches under the cer ficate of public convenience;
December 28, 1961 | Reyes JBL, J. 2. Evidence shows that Lotho already knew for nine years that ICS was selling ice to its
RECIT-READY/SUMMARY:  Lotho took a long me to ins tute an ac on against ICS for viola on co-defendants and he tried to win them back but ul mately failed, which means that
of unfair compe on. Therefore, he is barred by laches. such delay is unreasonable;
3. Lotho was aware that IICS was selling ice to its co-defendants, yet it made no genuine
DOCTRINE:  Inaction  within  a  reasonable  time  to  enforce  a  right  underlies  a  valid  defense  of  laches and  effort to stop that prac ce, which is also evidenced by their “unconsummated”
reveals implied consent to the violation of a right.  agreement since it s ll allowed ICS to sell in Lotho’s area;
   4. Inequity is apparent in this case since it is admi ed that some of Lotho’s records were
FACTS:  Lotho was established in 1947 with a capital stock of P100k for the purpose of opera ng lost because of the long delay in bringing this case, and therefore, could not be
an ice plant and selling the ice at wholesale or retail. It served the towns of San Pedro, Binan, Sta. produced when ICS asked to have recourse to said records – in other words, Lotho has
Rosa, Cabuyao, and Calamba, which are all in the province of Laguna. a stale claim since he cannot verify the damages he is claiming. It would be unjust to
allow Lotho to reap benefit from having slept on its rights. WHEREFORE, the decision
appealed from is affirmed. Costs against Lotho.  
Obligations and Contracts | Week 14 Cases | Page 3 
 GALICANO GOLLOY v. COURT OF APPEALS, Jose, Consolacion, Lourdes, and
Soledad Valdez, and Benny Madriaga
Topic: Natural obliga ons; estoppel; laches
May 4, 1989 | Paras, J.
RECIT-READY:  Case is a pe on from the decision of CA on the disputed land of the pe oner
which ruled against it. Pe oner here, is the owner of a land for more than 20 years. While the
Southwest por on of the land, was bounded by the land of the private respondent. The priv.
respondent decided to subdivide the land, however, in the course of subdivision, the PR placed 2
monuments inside the southwest por on of pe oner’s land. Thus, pe oner filed an ac on to
quiet tle. The PR, alleged that they never encroached the said land. In the pre-trial, they agreed
that the disputed land will be resolved through surveying the respec ve lots. However, on the
surveyors’ report, it was said that the PR’s land prevails over pe oner’s land. CFI, ruled in favor
of the PR in accordance to the surveyors’ report. CA affirmed it. SC reversed the decision. The
Court said, if ever, they have any right on the disputed land, they will be guilty of laches.
DOCTRINE:  Failure  to  assert  claims  and  ownership  for  32  years,  by  virtue  of  the  equitable  principle  of  the property was registered, up to February, 1966, when the private respondents caused the
laches will apply.  placement of two (2) monuments inside his land), the la er if they have any right at all to the
  
FACTS:  The case is a pe on for review on cer orari on the decision of CA affirming the
judgment of CFI. Pe oner for more than 20 yrs, has been registered owner and in possession of
a 41,545 sqm parcel of land. (Covered by TCT No. 45764). Southwest por on of the above land,
is bounded by the land of the private respondent.
Priv. respondent subdivided their land. In the course of the subdivision, private respondents
caused to be placed 2 monuments inside the Southwest por on of pe oner’s land. Pe oner
now filed with the CFI, an ac on to quiet tle. Priv. respondent, filed a mo on to dismiss with
counterclaim.
They alleged that they never encroached upon the landholding of pe oner, that nothing has
been placed on his land which could create any cloud, that the truth of the ma er was that they
merely subdivided their own land according to their tle, and therefore, there was nothing for
pe oner to quiet or remove cloud on his tle.
In the pre-trial, the par es had an agreement, that the disputed land will be resolved through
surveying the respec ve lots and, hence, to relocate the disputed area with the end in view of
determining the true and correct boundaries of their parcels. Then, CFI ordered the Director of
Lands to appoint an impar al public surveyor.
In the submi ed report, it was stated that there were overlappings on the boundaries of the two
lands and that overlappings are due to the defect in the survey on pe oner’s land since it did not
duly conform with the previously approved survey. Hence, the private respondents’ land, prevails
over pe oner’s land, since the former was surveyed and tled ahead.
CFI:  the court renders judgment in accordance with the surveyor’s report, thus, favoring to the
private respondent. CA affirmed the decision of the CFI.
  
ISSUE: Who between the two tle holders is en tled to the land in dispute?
  
HELD: 
The pe oner is en tled to the disputed land. The Court reversed and set aside the decision of
CA. Private respondents to cause the segrega on of the disputed por on presently occupied by
the pe oner and reconvey the same to the la er and a er segrega on to order the RoD to issue
a new cer ficate of tle covering said por on in favor of the pe oner.
The said lands, having been surveyed and therea er registered, it follows that monuments were
placed therein to indicate their respec ve boundaries. It is hardly persuasive that private
respondents' predecessor, Dominga Balanga, believing that she has a righ ul claim to the
overlapped por ons, did not make any move to ques on the placement of the monuments.
She could have easily objected to the placement and pointed out that the placement of the
monuments excluded the overlapped por ons from her property. However, no such objec on
was made. These facts could only be construed to mean that private respondents' predecessor,
Dominga Balanga, never believed that she has a right and legal claim to the overlapped por on.
There appears to be no evidence to support claims of repeated demands against pe oner to
refrain from cul va ng the contested por on, much less an ac on filed in court to enforce such
demands.
Besides, considering that pe oner and his predecessor or predecessors have been in con nuous
possession in the concept of an owner, for almost fi y (50) years (from August 15, 1919, when
overlapped por on, are guilty of laches.
In the case of Caragay-Layno  v  CA, it was held that "Of significance is the fact, as disclosed by the
evidence, that for twenty (20) years from the date of registra on of tle in 1947 up to 1967
when this suit for recovery of possession was ins tuted, neither the deceased DE VERA up to the
me of his death in 1951, nor his successors-in-interest, had taken steps to possess or lay
adverse claim to the disputed por on. They may, therefore be said to be guilty of laches as would
effec vely derail their cause of ac on. Administrator ESTRADA took interest in recovering the
said por on only when he no ced the discrepancy in areas in the Inventory of Property and in
the tle."
DIVINA VICTORIANO v. COURT OF APPEALS and Heirs of Crispin Arcilla,
represented Ladislawa Masigla
Topic: Natural obliga ons; estoppel; laches
February 11, 1991 | Medialdea, J.
DOCTRINE:  An  original  registered  owner  may  lose  his  right  to  recover  back  the  title  and  possession  of 
property by reason of LACHES. 
  
FACTS:  Private Respondent Masigla was in possession of a parcel of land (Lot 897). In 1987, her
son, Domingo, entered the adjoining property (Lot 898) owned by Pe oner Victoriano. Domingo
prohibited Pe oner and her tenants from cul va ng the land.
Pe oner filed a criminal case for the , malicious mischief, usurpa on, and squa ng against
Domingo. During the case, Pe oner discovered that Lot 897 was registered in the name of her
grandfather (Cirilo Tamio). Pe oner then secured a tle of Lot 897.
Masigla then filed for reconveyance of Lot 897 claiming that her father, Crispin, bought the land
from Cirilo and that they have been in possession of the said land since 1927.
TC ruled in favor of Pe oner. CA reversed.
ISSUE: Whether Pe oner’s ac on to recover Lot 897 is barred by Laches?
Obligations and Contracts | Week 14 Cases | Page 4 
HELD: YES. 
The principle of laches, is defined as "such  neglect  or  omission  to assert a right taken in conjunction  Sps. FRANCISCO SIERRA & ANTONIA SANTOS et. al.
with  the  lapse  of  time  and other circumstances causing prejudice to an adverse party, as will operate as  v. PAIC SAVINGS AND MORTGAGE BANK
a bar in equity."  Topic: Natural obliga ons; estoppel; laches
September 10, 2014 | Perlas-Bernabe, J.
The Court of Appeals had correctly observed that defendant-appellee disregards the fact that SUMMARY: Yung Goldstar Conglomerates, Inc (GCI), represented by Zaldaga, obtained a loan
plaintiffs-appellants  have  been  in  continuous  possession  of  the  land  Since  1927  and  they  were  from Summa Bank for an amount of 1.5M. Si Summa Bank later on became resp “Paic Savings and
not  ousted  therefrom  by  the  grandfather  of  defendant-appellee who sold the property to them,  Mortgage Bank” (PSMB). To secure the loan , nag issue ng PNs si GCI and to further secure the
nor  by  the  immediate  successors  of  the  seller. Defendant-appellee's  inaction  for  more  than  50  loan, nag execute ng REM sila pet spouses (madami silang spouses dito) over their respec ve
years now bars her from acquiring possession of the land on the ground of laches.  parcels of land in An polo. A er signing the REM with resp bank, binigyan ni Zaldaga ng 200,000
worth of checks sila pet Sps which were later on successfully encashed. Later on, hindi na
GUILLERMO MARCELINO and his minor grandchildren Conrado Jr. & Connie Antonio   nakabayad ng loan si GCI, so nag send ng le er of foreclosure si resp bank nung 1984 kanila pet
v. COURT OF APPEALS etc, sps, pero no response. So napunta na kanial resp bank yung proper es. In 1991 (7 years a er the
Topic: Natural obliga ons; estoppel; laches foreclosure) nag file ngayon sila pet sps ng annulment nung foreclosure saying na (1) there was a
June 26, 1992 | Griño-Aquino, J. mistake daw on ge ng their consent kasi akala nila “Principal Mortgagors” daw sila, peo yun pala
“Accommoda on Mortgagors” lang sila’ nila GCI and (2) di daw sila informed sa foreclosure. Nag
DOCTRINE: Long inaction in asserting a right also bars from recovery of the same.  rule yun RTC in favor kanila pet Sps saying na there was indeed a mistake, pero nireverse ni CA
  saying na barred by laches na sila pet Sps kasi since the ground of annulment was mistake, 4 years
FACTS:  Silvestre Marcelino and Genoveva Patricio (spouses) are the registered owner of 3 parcels lang yung prescrip ve period. Hence the issue of WON PET SPS ARE ALREADY BARRED BY
of land in Tarlac. Guillermo and late Luciana Marcelino are the only heirs. Even before WWII, LACHES. Sabi ng SC YES kasi Laches operates to avoid recognizing a right when to do so would result in 
private respondents has the possession of these parcels of land. a  clearly  inequitable  situation.  In the case, since prescribed na yung ac on nila pet Sps, to allow
their ac on to prosper would be unfair kanila resp bank since prescribed na nga yung period. So
Guillermo and Luciana (when s ll alive), demanded res tu on of physical possession and torrens talo sila pet Sps.
tles but the respondents refused. Respondents conten on:
● that they are the lawful occupants DOCTRINE: Laches  operates  not  really  to  penalize  neglect  or sleeping on one's rights, but rather to avoid 
● ac on of pe oners already prescribed recognizing a right when to do so would result in a clearly inequitable situation. 
● they inherited it from their parents who bought them from Pedro Marcelino and had
purchased it from Genoveva Patricio (all evidenced by absolute sale and notarized FACTS:  Goldstar Conglomerates, Inc. (GCI), represented by Zaldaga, obtained from First Summa
documents) Savings and Mortgage Bank (Summa Bank), now respondent Paic Savings and Mortgage Bank, Inc.
(PSMB), a loan in the amount of PhP1,500,000.00
RTC dismissed, on the ground of laches. CA upheld. Hence, this pe on alleging that the CA
erred in finding them guilty of laches for failure to assert their rights to the property for over 50 As security therefor, GCI executed in favor of PSMB six (6) promissory notes as well as a Deed of
years. Real Estate Mortgage over a parcel of land. As addi onal security, pe oners Francisco Sierra and
   3 other Sps (co-pe oners in this case) mortgaged four (4) parcels of land in An polo City
ISSUE: Whether or not the pe oners be allowed to recover the land respec vely registered in their names (subject proper es).
  
HELD: NO  Records show that a er the signing of the mortgage deed, Zaldaga gave pe oner Francisco
Laches  –  the failure or neglect, for an unreasonable and unexplained length of me, to do that Sierra four (4) manager's checks with an aggregate amount of PhP200,000.00, which were later
which, by exercising due diligence, could or should have been done earlier. Negligence or successfully encashed Eventually, GCI defaulted in the payment of its loan to resp PSMB, thereby
omission to assert a right within a reasonable me, warran ng the presump on that the party promp ng the la er (PSMB) to extrajudicially foreclose the mortgaged proper es with due notice 
en tled to assert it either has abandoned or declined to assert it to petitioners. 

In case at bar, pe oners admi ed that private respondents had been occupying in said land even
before WWII. For almost 50 years, no ac on had been taken by the pe oners to recover
possession of the land. Long inac on in asser ng their right to the lots bars them from recovering
the same.
“The  law  serves  those  who  are  vigilant  and  diligent  and  not  those  who  sleep  when  the  law 
requires them to act”. Pe on DENIED, CA decision AFFIRMED.
On 1984, Since pe oners failed to redeem the subject proper es within the redemp on period,
their cer ficates of tle were cancelled and new ones were issued in PSMB's name. On 1991, or 7 
years  after  the  foreclosure,  Pe oners filed a complaint for the declara on of nullity of the real
estate mortgage and its extrajudicial foreclosure, and damages against PSMB and Summa Bank
before the RTC. Pe oners averred:
a. that under pressing need of money, with very limited educa on and lacking proper
instruc ons, they fell prey to a group who misrepresented to have connec ons with
Summa Bank and, thus, could help them secure a loan.
b. Despite lack of special authority from them, foreclosure proceedings over the subject
proper es were ini ated by PSMB and not Summa Bank in whose favor the mortgage
was executed;
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 c. They further claimed that they were not furnished a copy of the pe on for
foreclosure prior to the precipitate extrajudicial foreclosure and auc on sale which
failed to comply with the pos ng and no ce requirements.

RESPONDENT’S CONTENTION: PSMB prayed for the dismissal of the complaint, claiming that
pe oners have no cause of ac on against it because it never extended any loan to them. PSMB
maintained that:

a. PSMB and Summa Bank are one and the same en ty.
b. the subject proper es were mortgaged to secure an obliga on covered by the loan
agreement with GCI;
c. the mortgage was valid, having been duly signed by pe oners before a notary public;
d. the foreclosure proceedings were regular, having complied with the formali es required
by law; and
e. petitioners  allowed time to pass without pursuing their purported right against Summa Bank 
and/or PSMB. 
 
RTC:  Ruled in favor of the petitioners. It held that pe oners cannot be faulted for failing to heed
the no ce of extrajudicial foreclosure sale by PSMB considering their lack of no ce that Summa
Bank had changed its name to PSMB.

Aggrieved, PSMB filed an appeal. The  CA  reversed  the  RTC  and  further  held  that  petitioners  were 
barred  by  laches from asser ng any claim on the subject proper es considering that despite
receipt of the le er dated June 11, 1984 informing them of the scheduled auc on sale, they
failed to a end the sale or file an adverse claim, or to therea er redeem the subject proper es.

ISSUE: Whether pe oners are already barred by laches?

HELD: YES. 
Laches  operates  not  really  to  penalize neglect or sleeping on one's rights, but rather to avoid recognizing a 
right  when  to  do  so  would  result  in  a  clearly  inequitable situation. In the case, Since the complaint for
annulment was anchored on a claim of mistake, i.e., that pe oners are the borrowers under the
loan secured by the mortgage, the ac on should have been brought within four (4) years from its
discovery.as the records disclose, despite no ce on June 19, 1984 of the scheduled foreclosure
sale, pe oners, for unexplained reasons, failed to impugn the real estate mortgage and oppose
the public auc on sale for a period of more than seven (7) years from said no ce.

Verily, to allow pe oners to assert their right to the subject proper es now a er their
unjus fied failure to act within a reasonable me would be grossly unfair to PSMB, and perforce
should not be sanc oned. WHEREFORE, the pe on is DENIED. The Decision dated June 27,
2011 of the Court of Appeals (CA) in CA-G.R. CV No. 91999 is hereby AFFIRMED.

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