Paz Galvez Et.al. v. CA & Porferio Glavez

PAZ GALVEZ, CARLOS TAM & TYCOON PROPERTIES INC. v. CA & PORFIRIO GALVEZ  Timotea Galvez died leaving behind her children Ulpiano and Paz. Ulpiano predeceased her mother and was survived by his son Porfirio.  Timotea left a parcel of unirrigated land. This property was passed on through succession to Paz and Porfirio (as heir of his father Ulpiano).  Porfirio was surpirsed when he discovered that on May 4, 1970, Paz executed an affidavit of adjudication stating that she is the true and lawful owner of the unirrigated land. Tax declarations were issued in Paz’s name.  On June 22, 1992, without knowledge and consent of Porfirio, Paz sold the land to Carlos Tam in the amount of P10,000 by way of a Deed of Absolute Sale. Carlos Tam thereafter registered the land and was issued by an OCT in his name. Subsequently on Sept. 27, 1994, he sold the land to Tycoon Propertie Inc. through a Deed of Absolute Sale. As a result, the title previously issued to Carlos Tam was cancelled and a new TCT was issued in favor of Tycoon Properties Inc.  On May 12, 1994, Porfirio Galvez filed an action for Legal Redemption with damages and cancellation of documents against Paz Galvez, Carlos Tam, and Tycoon Properties Inc.  The RTC rendered a decision in favor of Porfirio Galvez, declaring null and void the affidavit of adjudication executed by Paz and the deed of absolute sale between Paz and Carlos Tam, cancelling the OCT in the name of Carlos Tam, declaring null and void the deed of absolute sale between Tam and Tycoon Properties Inc, cancelling the TCT in the name of Tycoon Properties Inc., and the land be reconveyed to Porfirio Galvez, plus damages and attorney’s fees.  Petitioners appealed before the CA. The CA affirmed the decision of the RTC. The petitioners filed a motion for reconsideration but the same was denied. They filed a petition for review on certiorari before the SC assailing that a. the CA erred in not holding Porfirio’s claim over the property which is based on implied trust has already precribed bec. the action was filed 24 yrs. after Paz repudiated the trust b. the CA erred when it failed to recognze that Porfirio’s claim is already barred by laches bec. he falied to assert his right for almost 24 yrs. c. the CA erred in failing to recognize that Tam and Tycoon Properties are buyers in good faith  The petitioners cited art. 145 of the Civil Code and claim that an implied or constructive trust prescribed in 10 yrs. and that Paz repudiated the trust when she executed the affidavit of Self-Adjudiction in 1970, and only in 1994 when Porfirio filed an action for legal redemption. So, 24 years have passed, hence the action for legal redemption must be barred both by prescription and laches.  The SC find the petition of no merit. The case is governed by co-ownership since the disputed land is inherited from a common ancestor (Timotea Galvez).  The SC explained that under Art. 494 of the Civil Code, prescription shall not run in favor of a co-owner or a coheir against the other co-owners/co-heirs as long as he expressly or impliedly recognizes the co-ownership. The co-owner cannot acquire prescription the share of the other co-owners absent any clear repudiation of ownership. The rule requires a clear repudiation of the co-ownership duly communicated to the other co-owners. It is only when such unequivocal notice has been given that the period of prescription will set in.  In this case, the SC ruled that Paz effected no clear and evident repudation of co-ownership. The execution of the affidavit of self-adjudication does not constitute such sufficient act of repudiation as contemplated by law to effectively exclude Porfirio of the property.  On the issue of prescription, Tam obtained his title to the property in January 1994 and Porfirio filed an action in May 1994, so the same was well within the 10 yr-period to file an action.  On the issue of laches, the Court ruled that it should not be invoked to prevent the rightful owner of a property from recovering what has been fraudulently registered in the name of another.  As to the petitioners’ claim that they are buyers in good faith, the Court did not agree. Tam did not exert effort to determine the previous ownership of the land in question and simply relied on the tax declaration. He received summons and the complaint on September 1994 and yet sold the land to Tycoon Properties Inc. in the same period. Inspite that a notice of lis pendens is filed in the Registry of Deeds, yet Tycoon Properties Inc. mortgaged the land. These circumstances negate their claim that they are buyers in good faith.  The SC affirmed the decision of the CA.