Bailon-Casilao VS Court of Appeals

FACTS:

Petitioners herein filed a case for recovery of property and damages with notice of lis pendens on
March 13, 1981 against the defendant and herein private respondent.

The parcel of land involved in this case with an area of 48, 849 square meters is covered by OCT No.
1771 issued on June 12, 1931 in the names of ROSALIA, GAUDENCIO, SABINA, BERNABE,
NENITA and DELIA all surnamed BAILON, as co-owners each of 1/6 share.

- Gaudencio and Nenita (now represented by her children: Luz, Emma and Nilda) are now
dead
- Bernabe went to China and had not been heard since then

1948 – Rosalia and Gaudencio Bailon sold a portion of the said land consisting of 16, 283 square
meters to DONATO DELGADO.

1949 –Rosalia Bailon alone sold the remainder of the land consisting of 32, 566 square meters to
Ponciana V. Aresgado de Lanuza. Also, Lanuza acquired from Delgado the 16, 283 square meters of
land which Delgado acquired from Rosalia and Gaudencio.

1975 – John Lanuza acting under a SPA given by his wife Ponciana, sold the 2 parcels of land to
Celestino Afable.

It was stated in the deed of sale that the land was not registered under the provisions of Act No. 496
when in fact it was. The land has been declared for taxation, first under Ciriaca Dellamas (mother of
the registered co-owners and then in the name of the ff:
- Rosalia Bailon in 1924.
- Donato Delgado in 1936
- Ponciana Lanuza in 1962
- Celestino Afable in 1983

Afable claimed that he had acquired the land through prescription and contended that the
petitioners were guilty of laches. He filed a 3 rd party complaint against Rosalia Bailon for damages
allegedly suffered as a result of the sale to him of the land.

ISSUE

Whether or not the said petitioners are chargeable with such laches as may effectively bar their
present action.

Lower Court: Afable was a co-owner of the land, having validly bought 2/6 respective undivided
shares of Rosalia Bailon and Gaudencio Bailon. Ordered the segregation of the undivided interest to
terminate co-ownership on the declared pro indiviso owners (Sabina, Bernabe, heirs of Nenita-Paulino
and Delia Casilao) and was ordered to pay damages and attorney’s fees.

Court of Appeals: Affirmed the LC, that prescription does not lie against plaintiff because they are
co-owners of the original vendors. The court declared that although registered property cannot be lost
by prescription, an action to recover it may be barred from laches. It held that petitioners are guilty of
laches and dismissed their complaint.
SC RULING

The rights of a co-owner of a certain property are clearly specified in Article 493: Each co-owner
shall have the full ownership of his part and of the acts and benefits pertaining thereto, and he
may therefore alienate assign or mortgage it and even substitute another person in its enjoyment,
except when personal rights are involved. But the effect of the alienation or mortgage, with respect
to the co-owners, shall be limited to the portion which may be allotted to him in the division upon
the termination of the co-ownership.

The sales made by Rosalia and Gaudencio Bailon which are valid with respect to their proportionate
shares, and the subsequent transfers which culminated in the sale to private respondent Celestino
Afable, the said Afable thereby became a co-owner of the disputed parcel of land as correctly held by
the lower court since the sales produced the effect of substituting the buyers in the enjoyment thereof.

Action for Partition

The proper action in cases like this is not for the nullification of the sale or for the recovery of
possession of the thing owned in common from the third person who substituted the co-owner or
co-owners who alienated their shares, but the DIVISION of the common property as if it continued
to remain in the possession of the co-owners who possessed and administered it [Mainit v.
Bandoy, supra.]

Thus, it is now settled that the appropriate recourse of co-owners in cases where their consent were
not secured in a sale of the entire property as well as in a sale merely of the undivided shares of some
of the co-owners is an action for PARTITION under Rule 69 of the Revised Rules of Court.

As to the action for petition, neither prescription nor laches can be invoked

Prescription is a vain proposition. Pursuant to Article 494 of the Civil Code, 'no co-owner shall be
obliged to remain in the co-ownership. Such co-owner may demand at anytime the partition of the
thing owned in common, insofar as his share is concerned.' 

In Budiong v. Bondoc, this Court has interpreted said provision of law to mean that the action for
partition is imprescriptible or cannot be barred by prescription. For Article 494 of the Civil Code
explicitly declares: "No prescription shall lie in favor of a co-owner or co- heir so long as he
expressly or impliedly recognizes the co-ownership."

Laches is likewise unavailing as a shield against the action of herein petitioners

Well-stated in this jurisdiction are the four basic elements of laches, namely: (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 and for which the complainant seeks a remedy; (2) delay in asserting the corporations
complainant's rights, the complainant having had knowledge or notice of the defendant's conduct and
having been afforded an opportunity to institute 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.

While the first and last elements are present in this case, the second and third elements are missing.

The second element speaks of delay in asserting the complainant's rights. However, the mere fact of
delay is insufficient to constitute, laches. It is required that (1) complainant must have had knowledge
of the conduct of defendant or of one under whom he claims and (2) he must have been afforded
an opportunity to institute suit. It must be noted that while there was delay in asserting petitioners' rights,
such delay was not attended with any knowledge of the sale nor with any opportunity to bring suit. In the
first place, petitioners had no notice of the sale made by their eldest sister. It is undisputed that the
petitioner co-owners had entrusted the care and management of the parcel of land to Rosalia Bailon who
was the oldest among them.

The third element of laches is likewise absent. There was no lack of knowledge or notice on the part
of the defendant that the complainants would assert the right on which they base the suit. On the
contrary, private respondent is guilty of bad faith in purchasing the property as he knew that the
property was co-owned by six persons and yet, there were only two signatories to the deeds of sale
and no special authorization to self was granted to the two sellers by the other co-owners.