Anthony Orduna, Dennis Orduna, and Antonita Orduna, petitioners vs. Eduardo J. Fuentebella, Marcos S.

Cid,
Benjamin F. Cid, Bernard G. Banta, and Armando Gabriel, Jr., respondents.
Facts:

Sometime in 1996, Gabriel Sr. sold the subject residential lot with an area of 74 square meters located at
Fairview Subdivision, Baguio City, to petitioner Antonita Orduna BUT no formal deed was executed to document
the sale.

The contract price was apparently payable in installments as Antonita remitted from time to time and Gabriel Sr.
accepted PARTIAL PAYMENTS.

One of the Ordunas would later testify that Gabriel Sr. agreed to execute a final deed of sale upon full payment of
the purchase price.

As early as 1979, however, Antonita and her sons, Dennis and Anthony Orduna, were already occupying the
subject lot on the basis of some arrangement undisclosed in the records and even constructed their house
thereon.

They also paid real property taxes for the house and declared it for tax purposes, as evidenced by a Tax
Declaration.

Despite all those payments made for the subject lot, Gabriel, Jr. would later SELL it to BERNARD BANTA
obviously WITHOUT the knowledge of petitioners, as later developments would show.

Regional Trial Court

The Regional Trial Court DISMISSED the instant complaint for lack of merit claiming that Eduardo was a
purchaser in good faith.

Court of Appeals

The Court of Appeals affirmed the RTC decision.

ISSUE: Whether or not

HELD:
Statute of Frauds inapplicable to partially executed contracts

It merely regulates the formalities of the contract necessary to render it enforceable.

The Statute of Frauds in Article 1403, par. 2, [29] of the Civil Code applies only to executory contracts, i.e., those
where no performance has yet been made.

The legal consequence of non-compliance with the Statute does not come into play where the contract in
question is completed, executed, or partially consummated.

The issue of Prescription and the Bona Fides of the Respondents as Purchasers

Having possession of the subject lot, petitioners right to the reconveyance thereof, and the annulment of the
covering title, HAS NOT PRESCRIBED OR IS NOT TIME- BARRED.

This is so for an action for annulment of title or reconveyance based on fraud is IMPRESCRIPTIBLE where the
suitor is in possession of the property subject of the acts, the action partaking as it does of a suit for quieting of
title which is imprescriptible.

Whether or not the respondent-purchasers, i.e. Bernard, Marcos and Benjamin, and Eduardom, have the
status of innocent purchasers for value, as was the thrust of the trial courts disquisition and disposition.
The Supreme Court ruled in the negative. The respondent-purchasers are not innocent purchasers of value.

For each knew or was at least expected to know that somebody else other than Gabriel, Jr. has a right or interest
over the lot.

This is borne by the fact that the initial seller, Gabriel, Jr., was not in possession of the subject property.

With respect to Marcos and Benjamin, they knew as buyers that Bernard, the seller, was not also in possession
of the same property. The same goes with Eduardo, as buyer, with respect to Marcos and Benjamin.

Upon the facts obtaining in this case, the act of registration by any of the three respondent-purchasers was not
coupled with good faith.

At the minimum, each was aware or is at least presumed to be aware of facts which should put him upon such
inquiry and investigation as might be necessary to acquaint him with the defects in the title of his vendor.

The petition is hereby GRANTED. Petitioner Antonita Orduna is hereby recognized to have the right of
Ownership over subject lot covered by TCT No. T-3276 of the Baguio Registry registered in the name of Eduardo
J. Fuentebella.

The Register of Deeds of Baguio City is hereby ORDERED to cancel said TCT No. T-3276 and to issue a new
one in the name of Armando Gabriel, Jr. with proper annotation of the conditional sale of the lot covered by said
title in favor of Antonita Orduna subject to the payment of the Php 50,000 outstanding balance.

Upon full payment of the purchase price by Antonita Orduna, Armando Gabriel, Jr. is ORDERED to execute a
Deed of Absolute Sale for the transfer of title of subject lot to the name of Antonita Orduna, within three (3) days
from receipt of said payment.
DOCTRINE OF LACHES
Insurance of the Philippine Islands Corporation, petitioner, vs. Vidal Gregorio and Julita Gregorio,
respondents.
Facts:

The Spouses Gregorio, herein respondents, obtained three loans from the Insurance of the Philippine
Islands Corporation, petitioner (formerly known as Pyramid Insurance Co., Inc.), with the interest at rate of
12% per annum each.

By way of security for said loan, respondents executed a Real Estate Mortgage in favor of petitioner over the
parcels of land, each covered by a Tax Declaration.

Thereafter, respondents failed to pay their loans, as a result of which the [mortgaged] properties were
EXTRAJUDICIALLY FORECLOSED.

The extrajudicial foreclosure sale was conducted and the petitioner was the highest bidder.

Since respondent failed to redeem the property, petitioner consolidated its ownership over the properties
and the corresponding Tax Declarations were thereafter issued in the name of the petitioner.

Petitioner filed a Complaint for damages because they discovered that the said lots were already registered
in the names of third persons and transfer certificates of title (TCT) were issued to them.
Regional Trial Court

The Regional Trial Court ruled in favor of the petitioner.

COURT OF APPEALS

The Court of Appeals reversed and set aside the decision of the Regional Trial Court dismissing the
complaint of petitioner.

It ruled that petitioners action for damages is barred by prescription and laches.

ISSUE: Whether or not petitioners action for damages is barred by prescription and laches
HELD: NO. The petitioners action for damages is not barred by prescription and laches.

Under the provisions of Article 1146 of the Civil Code, actions upon an injury to the rights of the plaintiff or upon a
quasi-delict must be instituted within FOUR YEARS from the time the cause of action accrued.

As such, the Court agrees with petitioner that the reckoning period for prescription of petitioners action should
be from the time of actual discovery of the fraud in 1995.

Hence, petitioners suit for damages, filed on February 20, 1996, is well within the four-year prescriptive period.

How about the principle of laches? It does not apply in the present case.

The essence of laches or stale demands is the failure or neglect for unreasonable and unexplained length of
time to do that which, by exercising due diligence, could or should have been done earlier, thus giving rise to a
presumption that the party entitled to assert it either has abandoned or declined to assert it.

It is not concerned with mere lapse of time; the fact of delay, standing alone, being insufficient to constitute
laches.

It cannot be used to defeat justice or perpetrate fraud or injustice.

The decision of RTC reinstated.