*

G.R. No. 150654. December 13, 2007.

HEIRS OF ANACLETO B. NIETO, namely, SIXTA P. NIETO, EULALIO P. NIETO,

GAUDENCIO P. NIETO, and CORAZON P. NIETO-IGNACIO, represented by EULALIO P.
NIETO, petitioners,  vs.  MUNICIPALITY OF MEYCAUAYAN, BULACAN, represented by
MAYOR EDUARDO ALARILLA, respondent.

Land Titles and Deeds;  Reconveyance;  Prescription;  An action to recover possession of a registered
land never prescribes.—An action to recover possession of a registered land never prescribes in view of
the provision of Section 44 of Act No. 496 to the effect that no title to registered land in derogation of that
of a registered owner shall be acquired by prescription or adverse possession. It follows that an action by
the registered owner to recover a real property registered under the Torrens System does not prescribe.

Same;  Same;  Same;  The rule on imprescriptibility of registered lands not only applies to the
registered owners but extends to the heirs of the registered owners as well.—It is well-settled that the rule
on imprescriptibility of registered lands not only applies to the registered owner but extends to the heirs
of the registered owner as well. Recently in  Mateo v. Diaz, 374 SCRA 33 (2002), the Court held that
prescription is unavailing not only against the registered owner, but also against his hereditary
successors because the latter step into the shoes of the decedent by operation of law and are the
continuation of the personality of their predecessor-in-interest. Hence, petitioners, as heirs of Anacleto
Nieto, the registered owner, cannot be barred by prescription from claiming the property.

Same; Same; Laches; Words and Phrases; “Laches,” Defined.—Laches has been defined as the failure

or neglect, for an unreasonable and unexplained length of time, 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 time, warranting

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* THIRD DIVISION.

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the presumption that the party entitled to assert his right has either abandoned or declined to assert
it.

Same;  Same;  Same;  Same;  Laches cannot be set up to resist the enforcement of an imprescriptible
legal right.—In a number of cases, the Court has held that an action to recover registered land covered
by the Torrens System may not be barred by laches. Laches cannot be set up to resist the enforcement of
an imprescriptible legal right. Laches, which is a principle based on equity, may not prevail against a
specific provision of law, because equity, which has been defined as “justice outside legality,” is applied in
the absence of and not against statutory law or rules of procedure. In recent cases, however, the Court
held that while it is true that a Torrens title is indefeasible and imprescriptible, the registered
landowner may lose his right to recover possession of his registered property by reason of laches.

Same; Same; Laches; Elements.—Even if we apply the doctrine of laches to registered lands, it would

still not bar petitioners’ claim. It should be stressed that laches is not concerned only with the mere lapse
of time. The following elements must be present in order to constitute laches: (1) conduct on the part of
the defendant, or of one under whom he claims, giving rise to the situation of which complaint is made
for which the complaint seeks a remedy; (2) delay in asserting the complainant’s rights, the complainant
having had knowledge or notice, of the defendant’s conduct and having been afforded an opportunity to
institute a suit; (3) lack of knowledge or notice on the part of the defendant that the complainant would
assert the right on which he bases his suit; and (4) injury or prejudice to the defendant in the event relief
is accorded to the complainant, or the suit is not held to be barred.

Same; Same; Ejectment; Those who occupy the land of another at the latter’s tolerance or permission,
without any contract between them, are necessarily bound by an implied promise that the occupants will
vacate the property upon demand; Upon the refusal to vacate the property, the owner’s cause of action
accrues, the unlawful deprivation or withholding of possession being counted from the date of the demand
to vacate.—This Court has consistently held that those who occupy the land of another at the latter’s
tolerance or permission, without any contract between them, are necessarily bound by an implied
promise that the occupants will vacate the property upon

102

102 SUPREME COURT REPORTS

ANNOTATED

Heirs of Anacleto B. Nieto vs. Municipality of

Meycauayan, Bulacan

demand. The status of the possessor is analogous to that of a lessee or tenant whose term of lease
has expired but whose occupancy continues by tolerance of the owner. In such case, the unlawful
deprivation or withholding of possession is to be counted from the date of the demand to vacate. Upon the
refusal to vacate the property, the owner’s cause of action accrues. In this case, the first element of laches
occurred the moment respondent refused to vacate the property, upon petitioners demand, on February
23, 1994. The filing of the complaint on December 28, 1994, after the lapse of a period of only ten months,
cannot be considered as unreasonable delay amounting to laches.

Same; Same; Same; Prescription; Laches; If the claimant’s possession of the land is merely tolerated

by its lawful owner, the latter’s right to recover possession is never barred by laches.—Case law teaches
that if the claimant’s possession of the land is merely tolerated by its lawful owner, the latter’s right to
recover possession is never barred by laches. Even if it be supposed that petitioners were aware of
respondent’s occupation of the property, and regardless of the length of that possession, the lawful
owners have a right to demand the return of their property at any time as long as the possession was
unauthorized or merely tolerated, if at all.

Same; Laches; Equity; The doctrine of laches cannot be invoked to defeat justice or to perpetrate fraud

and injustice.—The doctrine of laches cannot be invoked to defeat justice or to perpetrate fraud and
injustice. It is the better rule that courts, under the principle of equity, will not be guided or bound
strictly by the statute of limitations or the doctrine of laches when by doing so, manifest wrong or
injustice would result. Finally, we find that the rentals being prayed for by petitioners are reasonable
considering the size and location of the subject property. Accordingly, the award of rentals is warranted.

PETITION for review on certiorari of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

     Esmeraldo M. Gatchalian for petitioners.
     Pablo C. Cruz for respondent.
103
 VOL. 540, DECEMBER 13, 2007 103
Heirs of Anacleto B. Nieto vs. Municipality of
Meycauayan, Bulacan

NACHURA, J.:
1
This is a petition for review on  certiorari  of the Decision   of the Court of Appeals, dated
October 30, 2001, which dismissed the petition for review of the Decision of the Regional Trial
Court (RTC) of Malolos, Bulacan. The latter dismissed a complaint to recover possession of a
registered land on the ground of prescription and laches.
The antecedents are as follows:
Anacleto Nieto was the registered owner of a parcel of land, consisting of 3,882 square
meters, situated at Poblacion, Meycauayan, Bulacan and covered by TCT No. T-24.055 (M).
The property is being used by respondent, Municipality of Meycauayan, Bulacan, which
constructed an extension of the public market therein.
Upon Anacleto’s death on July 26, 1993, his wife, Sixta P. Nieto, and their three children,
namely, Eulalio P. Nieto, Gaudencio Nieto and Corazon Nieto-Ignacio, herein petitioners,
collated all the documents pertaining to his estate. When petitioners failed to locate the
owner’s duplicate copy of TCT No. T-24.055 (M), they filed a petition for the issuance of a
second owner’s copy with the RTC, Malolos, Bulacan. In that case, petitioners discovered that
the missing copy of the title was in the possession of the respondent. Consequently, petitioners
withdrew the petition and demanded from respondent the return of property and the
certificate of title.
On February 23, 1994, petitioners formally demanded from respondent the return of the
possession and full control of the property, and payment of a monthly 2
rent with interest from
January 1964. Respondent did not comply with petitioners’ demand.

_______________
1 Penned by Associate Justice Marina L. Buzon, with Associate Justices Buenaventura J. Guerrero and Alicia L.
Santos, concurring; Rollo, pp. 30-39.
2 Records, pp. 70-71.

104

104 SUPREME COURT REPORTS ANNOTATED

Heirs of Anacleto B. Nieto vs. Municipality of
Meycauayan, Bulacan
3
On December 28, 1994, petitioners filed a complaint  for recovery of possession and damages
against respondent alleging that the latter was in possession of the owner’s copy of TCT No. T-
24.055 (M). They averred that, in 1966, respondent occupied the subject property by making it
appear that it would expropriate the same. Respondent then used the land as a public market
site and leased the stalls therein to several persons without paying Anacleto Nieto the value of
the land or rent therefor. Petitioners prayed that respondent be ordered to surrender to them
the owner’s copy of TCT No. T-24.055 (M), vacate the property, and pay them the rents
thereon from 1966 until the date of the filing of the complaint for the total of P1,716,000.00,
and P10,000.00 a month thereafter, as well as P300,000.00 as moral damages, and
P100,000.00 as attorney’s
4
fees.
In its Answer,  respondent alleged that the property was donated to it and that the action
was already time-barred because 32 years had elapsed since it possessed the property. 5
Respondent and counsel failed to appear during the scheduled pre-trial conference.   Upon
petitioners’ motion, respondent was declared as in default and petitioners were allowed to
present evidence  ex parte. Respondent filed a motion for reconsideration which the RTC
granted. Respondent was then allowed to cross-examine petitioners’ lone witness and present
its own evidence. However, despite notice, respondent failed again to appear during the
scheduled hearing. Hence, the RTC considered respondent to have waived its right to cross-
examine petitioners’ witness and present its own evidence. The case was then submitted for
decision.
On August 1, 1995, the RTC rendered a Decision dismissing the complaint as well as
respondent’s counterclaims for damages. For lack of proof, the RTC disregarded respondent’s

_______________
3 Id.,at pp. 1-4.
4 Records, pp. 32-33.
5 Rollo, p. 24.

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Heirs of Anacleto B. Nieto vs. Municipality of
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claim that Anacleto Nieto donated the property to it in light of the fact that the title remained
in the name of Anacleto. Nonetheless, the RTC did not rule in favor of petitioners because of
its finding that the case was already barred by prescription. It held that the imprescriptibility
of actions to recover land covered by the Torrens System could only be invoked by the
registered owner, Anacleto Nieto, and that the action was also barred by laches.
Petitioners appealed the case to the Court of Appeals (CA). On October 30, 2001, the CA
rendered a Decision dismissing the case for lack of jurisdiction. According to the CA, the
petition involved6 a pure question of law; hence, petitioners should have filed a petition directly
with this Court.
Accordingly, petitioners elevated the case to this Court through a petition for review
on certiorari, raising the follow-ing issues:

A. Are lands covered by the Torrens System subject to prescription?

B. May the defense of [l]aches be invoked in this specific case?
C. May the defense of imprescriptibility
7
only be invoked by the registered owner to the
exclusion of his legitimate heirs?

The petition is meritorious.

Respondent argues that the action of petitioner to recover possession of the property is
already barred by prescription.
We do not agree.
An action to recover possession of a registered land never prescribes in view of the provision
of Section 44 of Act No. 496 to the effect that no title to registered land in derogation of that of
a registered owner shall be acquired by prescription or

_______________
6 Id., at pp. 37-38.
7 Id., at p. 11.

106

106 SUPREME COURT REPORTS ANNOTATED

 Heirs of Anacleto B. Nieto vs. Municipality of
Meycauayan, Bulacan
8
adverse possession.  It follows that an action by the registered owner to recover a real property
registered under the Torrens System does not prescribe.
Despite knowledge of this avowed doctrine, the trial court ruled that petitioners’ cause of
action had already prescribed on the ground that the imprescriptibility to recover lands
registered under the Torrens System can only be invoked by the person under whose name the
land is registered.
Again, we do not agree. It is well-settled that the rule on imprescriptibility of registered
lands not9
only applies to the registered
10
owner but extends to the heirs of the registered owner
as well.  Recently in  Mateo v. Diaz,   the Court held that prescription is unavailing not only
against the registered owner, but also against his hereditary successors because the latter step
into the shoes of the decedent by operation of law and are the continuation of the personality
of their predecessor-in-interest. Hence, petitioners, as heirs of Anacleto Nieto, the registered
owner, cannot be barred by prescription from claiming the property.
Aside from finding that petitioners’ cause of action was barred by prescription, the trial
court reinforced its dismissal of the case by holding that the action was likewise barred by
laches.
Laches has been defined as the failure or neglect, for an unreasonable and unexplained
length of time, 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 time, warranting the
presumption11
that the party entitled to assert his right has either abandoned or declined to
assert it.

_______________
8 Mateo v. Diaz, 424 Phil. 772, 781; 374 SCRA 33, 40 (2002).
9 Mateo v. Diaz, supra, at p. 782; p. 41; Bailon-Casilao v. Court of Appeals, No. L-78178, April 15, 1988, 160 SCRA
738, 747.
10 Supra.
11 Isabela Colleges, Inc. v. Heirs of Nieves Tolentino-Rivera, 397 Phil. 955, 969; 344 SCRA 95, 107 (2000).

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Heirs of Anacleto B. Nieto vs. Municipality of
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In a number of cases, the Court has held that an action 12

to recover registered land covered by
the Torrens System may not be barred by laches. 13
  Laches cannot be set up to resist the
enforcement of an imprescriptible legal right.  Laches, which is a principle based on equity,
may not prevail against a specific provision of law, because equity, which has been defined as
“justice outside
14
legality,” is applied in the absence of and not against statutory law or rules of
procedure. 15
In recent cases,    however, the Court held that while it is true that a Torrens title is
indefeasible and imprescriptible, the registered landowner may lose his right to recover
possession of his registered property by reason of laches.
Yet, even if we apply the doctrine of laches to registered lands, it would still not bar
petitioners’
16
claim. It should be stressed that laches is not concerned only with the mere lapse
of time.  The following elements must be present in order to constitute laches:

_______________
 12  Mateo v. Diaz, supra  note 8, at p. 781; p. 40;  Quevada v. Glorioso,  356 Phil. 105, 119;  294 SCRA
608 (1998); Dablo v. Court of Appeals, G.R. No. 93365, September 21, 1993, 226 SCRA 618, 628; Bishop v. Court of
Appeals, G.R. No. 86787, May 8, 1992, 208 SCRA 636, 641; Jimenez v. Fernandez, G.R. No. 46364, April 6, 1990, 184
SCRA 190, 198;  Umbay v. Alecha,  220 Phil. 103, 106;  135 SCRA 427, 429 (1985);  J.M. Tuason & Co., Inc. v.
Macalindong, No. L-15398, December 29, 1962, 6 SCRA 938.
13 Heirs of Romana Ingjug-Tiro v. Casals, 415 Phil. 665, 674; 363 SCRA 435, 442 (2001).
14 Mateo v. Diaz, supra note 8, at p. 781; pp. 40-41.
15  De Vera-Cruz v. Miguel,  G.R. No. 144103, August 31, 2005,  468 SCRA 506, 518;  Heirs of Juan and Ines

Panganiban v. Dayrit,  G.R. No. 151235, July 28, 2005,  464 SCRA 370, 379-380;  Vda. de Cabrera v. Court of
Appeals, 335 Phil. 19, 34; 267 SCRA 339, 356 (1997).
16 Pineda v. Heirs of Eliseo Guevara, G.R. No. 143188, February 14, 2007, 515 SCRA 627, 635.

108

108 SUPREME COURT REPORTS ANNOTATED

Heirs of Anacleto B. Nieto vs. Municipality of
Meycauayan, Bulacan

“(1) conduct on the part of the defendant, or of one under whom he claims, giving rise to the
situation of which complaint is made for which the complaint seeks a remedy;
(2) delay in asserting the complainant’s rights, the complainant having had knowledge or
notice, of the defendant’s conduct and having been afforded an opportunity to institute
a suit;
(3) lack of knowledge or notice on the part of the defendant that the complainant would
assert the right on which he bases his suit; and
(4) injury or prejudice to the defendant17 in the event relief is accorded to the complainant,
or the suit is not held to be barred.”

We note that the certificate of title in the name of Anacleto Nieto was found in respondent’s
possession but there was no evidence that ownership of the property was transferred to the
municipality either through a donation or by expropriation, or that any compensation was
paid by respondent for the use of the property. Anacleto allegedly surrendered the certificate
of title to respondent upon the belief that the property would be expropriated. Absent any
showing that this certificate of title was fraudulently obtained by respondent, it can be
presumed that Anacleto voluntarily delivered the same to respondent. Anacleto’s delivery of
the certificate of title to respondent could, therefore, be taken to mean acquiescence to
respondent’s plan to expropriate the property, or a tacit consent to the use of the property
pending its expropriation.
This Court has consistently held that those who occupy the land of another at the latter’s
tolerance or permission, without any contract between them, are necessarily 18
bound by an
implied promise that the occupants will vacate the property upon demand.  The status of the
possessor is analogous to that of a lessee or tenant whose term of lease has expired but

_______________
17 Heirs of Juan and Ines Panganiban v. Dayrit, supra note 15, at p. 382.
18 Macasaet v. Macasaet, G.R. Nos. 154391-92, September 30, 2004, 439 SCRA 625, 635.

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Heirs of Anacleto B. Nieto vs. Municipality of
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whose occupancy continues by tolerance of the owner. In such case, the unlawful deprivation
19
or withholding of possession is to be counted from the date of the demand to vacate.  Upon the
refusal to vacate the property, the owner’s cause of action accrues.
In this case, the first element of laches occurred the moment respondent refused to vacate
the property, upon petitioners demand, on February 23, 1994. The filing of the complaint on
December 28, 1994, after the lapse of a period of only ten months, cannot be considered as
unreasonable delay amounting to laches.
Moreover, case law teaches that if the claimant’s possession of the land is merely tolerated
by its lawful owner, the latter’s right to recover possession is never barred by laches. Even if it
be supposed that petitioners were aware of respondent’s occupation of the property, and
regardless of the length of that possession, the lawful owners have a right to demand the
return of their property
20
at any time as long as the possession was unauthorized or merely
tolerated, if at all.
Furthermore, the doctrine of laches cannot be invoked to defeat justice or to perpetrate
fraud and injustice. It is the better rule that courts, under the principle of equity, will not be
guided or bound strictly by the statute of limitations
21
or the doctrine of laches when by doing
so, manifest wrong or injustice would result.
Finally, we find that the rentals being prayed for by petitioners are reasonable considering
the size and location of the subject property. Accordingly, the award of rentals is warranted.

_______________
19 Arcal v. Court of Appeals, 348 Phil. 813, 825; 285 SCRA 34, 43 (1998).
20 Feliciano v. Zaldivar, G.R. No. 162593, September 26, 2006, 503 SCRA 182, 201.
21 Heirs of Dumaliang v. Serban, G.R. No. 155133, February 21, 2007, 516 SCRA 343, 356.

110

110 SUPREME COURT REPORTS ANNOTATED

Heirs of Anacleto B. Nieto vs. Municipality of
Meycauayan, Bulacan

WHEREFORE, premises considered, the petition is GRANTED. The Decision of the Regional
Trial Court of Malolos, Bulacan, dated August 1, 1995, is REVERSED and SET ASIDE.
Respondent is ORDERED (a) to vacate and surrender peaceful possession of the property to
petitioners, or pay the reasonable value of the property; (b) to pay P1,716,000.00 as reasonable
compensation for the use of the property from 1966 until the filing of the complaint and
P10,000.00 monthly rental thereafter until it vacates the property, with 12% interest from the
filing of the complaint until fully paid; and (c) to return to petitioners the duplicate copy of
TCT No. T-24.055 (M).
SO ORDERED.

          Ynares-Santiago  (Chairperson),  Austria-Martinez,  Chico-Nazario  and  Reyes, JJ.,

concur.

Petition granted.

Notes.—A party’s failure or neglect for an unreasonable and unexplained length of time to
assert his right over a property warrants a presumption that he has abandoned his right or
declined to assert it. (Cleofas vs. St. Peter Memorial Park, Inc., 324 SCRA 223 [2000])
It is settled that any person who occupies a land of another at the latter’s tolerance or
permission, without any contract between them, is necessarily bound by an implied promise
that he will vacate upon demand, failing which, a summary action for ejectment is proper
remedy against him. (Pengson vs. Ocampo, Jr., 360 SCRA 420 [2001])
 In an action for unlawful detainer the plaintiff need not have been in prior physical
possession. (Rodil Enterprises, Inc. vs. Court of Appeals, 371 SCRA 79 [2001])