Assailed in the instant petition for review on certiorari is the July 31, 1996 decision^[1] of the Court of Appeals reversing the August 27, 1992 decision^[2] of the Regional Trial Court of Lucena City, Branch 56, which in turn dismissed private respondents' petition for reconveyance on the ground of prescription of action.

At the core of the present controversy is a parcel of land, known as Lot 5793, measuring 8,916 square meters, located at Mahabang Parang, Lucban, Quezon.  The land formed part of the conjugal properties of spouses Juan Dator and Pomposa Saludares, known as the Tanza estate.

Pomposa died on May 1, 1923, leaving herein petitioners, Enrica, Petra, Restituto, Amado, Delfina, Beata, Vicenta and Isabel, all surnamed Dator, as her compulsory heirs (hereinafter referred to as Heirs).

On February 28, 1940, the Heirs and their father Juan executed a deed of extra-judicial partition of the share of Pomposa in the Tanza estate.  The settlement conferred the eastern half of the Tanza estate to Juan and the western half to the Heirs.

Before the aforementioned partition, Juan was in possession of the entire Tanza estate.  After the partition, the Heirs took possession of their share and had the same tenanted by a certain Miguel Dahilig, husband of Petra, one of the Heirs, who in turn managed the land in behalf of the other siblings.  Juan, the father, remained in possession of his half of the land until his death on April 6, 1940.

On December 13, 1976, Isabel Dator applied for a free patent over the entire Tanza estate, including Lot 5793, in behalf of the Heirs.  On May 26, 1977, after all the requirements were complied with, the Register of Deeds of Quezon awarded Free Patent No. 4A-2-8976 and issued Original Certificate of Title (OCT) No. 0-23617 in the names of the Heirs.

Sometime in 1988, the Heirs were informed by their tenant that private respondents cut some 50 coconut trees located within the subject lot.  Thus, the Heirs sent a letter,^[3] dated July 26, 1988, to private respondents demanding an explanation for their intrusion into their property and unauthorized felling of trees.

On August 25, 1988, private respondents retaliated by filing an action for reconveyance against petitioners, docketed as civil case no. 88-121, in the Regional Trial Court of Lucena City.  Private respondents alleged in their complaint that: (a) they were the owners in fee simple and possessors of Lot No. 5793; (b) they bought the land from the successors-in-interest of Petra Dator, one of the heirs; (c) they were in possession of the subject land from 1966 to the present and (d) petitioner Isabel Dator obtained free patent OCT P-23617 over Lot 5793 in favor of the Heirs by means of fraud and misrepresentation.  Thus, private respondents prayed for the cancellation of OCT P-23617 and the issuance of a new title in their names.

In their answer, the Heirs denied having sold any portion of the Tanza estate to anyone.  They alleged that: (a) they and their predecessors-in-interest had been and were still in actual, continuous, adverse and public possession of the subject land in the concept of an owner since time immemorial and (b) title to Lot 5793 was issued in their favor after faithful compliance with all the requirements necessary for the issuance of a free patent.

After trial, the lower court rendered a decision dismissing the action primarily on the ground of prescription of action:

More telling is plaintiff Jose Dator's admission that the adjacent lot which is 5794 is his and he was a cadastral claimant, in fact, filed (sic) an application for free patent.   By and large, if Jose Dator was personally claiming rights on the property now denominated as Lot 5793, the Court is intrigued and cannot see its way clear why Jose Dator did not file any protest in the application of the heirs of Pomposa Saludares, neither had Jose Dator filed any petition for review within the time frame, instead it took them eleven (11) long years to question the validity.

The doctrine of "stale demands" or laches is even applicable in the case at bar.  "Laches means the failure or neglect for an unreasonable length of time, to do that which by exercising diligence could or should have been done earlier."  (Marcelino versus Court of Appeals, G.R. No. 94422, June 26, 1992)

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The issues with respect to ownership have already been amply discussed which brings us to the issue as to whether or not the action has prescribed and whether the original certificate of title in the name of the heirs of Pomposa Saludares is already indefeasible.

The action for reconveyance at bar was filed on August 28, 1988 or more than eleven (11) years from the issuance of the title, a fact plaintiffs cannot deny.  They cannot claim ignorance that the defendants-heirs of Pomposa Saludares are applying for a free patent of Lot No. 5793 because notices were sent.

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In the absence of competent and positive evidence that the title of the defendants has been secured thru fraud which in the case at bar is wanting and which would necessarily invalidate it, the presumption is it has been issued regularly in the absence of actual fraud.

There being no positive evidence presented which would establish actual fraud in the issuance of Free Patent Title No. P-23617 in the defendants' name, their title deserves recognition.

In like manner, in an action for reconveyance after the lapse of one year from the date of the registration, actual fraud in securing the title must be proved (J.N. Tuazon Co., Inc. versus Macalindog, G.R. No. L-15398, December 29, 1962, 6 SCRA 938).

The plaintiffs' claim for reconveyance therefore cannot prosper.

WHEREFORE, judgment is hereby rendered in favor of the defendants and against the plaintiffs ordering the dismissal of the case with costs against plaintiffs and declaring defendants, heirs of Pomposa Saludares, as the rightful owners of the land.

The claim of defendants in the matter of attorney's fees and litigation expenses not having been proven by concrete evidence, the Court opts not to award the same.

SO ORDERED.^[4]

On appeal, the appellate court reversed the trial court decision:

It is true that the Torrens title issued upon a free patent may not be cancelled after the lapse of ten years from the date of its registration because the statute of limitations bars such cancellation.  But this doctrine has long been qualified thusly:

If the registered owner, be he the patentee or his successor-in-interest to whom the Free patent was transferred or conveyed, knew that the parcel of land described in the patent and in the Torrens belonged to another who together with his predecessors-in-interest were never in possession thereof, then the statute barring an action to cancel a Torrens title issued upon a free patent does not apply and the true owner may bring an action to have the ownership or title to the land judicially settled and the Court in the exercise of its equity jurisdiction, without ordering the cancellation of the Torrens title issued upon the patent, may direct the defendant, the registered owner, to reconvey the parcel of land to the plaintiff who has been found to be the true owner thereof.  (Vital vs. Anore, et al., 90 Phil. 855, Underscoring ours.)

In this case, there is clear evidence to show that appellee Isabel had full knowledge that Lot 5793 had been sold to her brother-in-law Miguel Dahilig and her sister Petra, that Lot 5793 no longer belonged to her and to the heirs she claimed to represent.  She was signatory to the deed of sale dated April 16, 1940 in favor of appellant. (Exh. I) With this knowledge, there is reason to conclude that appellant Isabel misrepresented herself and the rest of the heirs as owners entitled to the free patent.

WHEREFORE, all the above considered, judgment is hereby rendered:

1. Reversing the August 27, 1992 decision of the court below;
   
   
2. Ordering the Register of Deeds of Quezon Province to cancel OCT No. P-23617 in the name of the Heirs of Pomposa Saludares and to issue another for the same property in the name of plaintiffs Jose Dator and Carmen Calimutan;
   
   
3. Ordering appellees to pay appellants ten thousand (P10,000.00) pesos for attorney's fees, and to pay the costs.
   

SO ORDERED.^[5]

Aggrieved by the appellate court ruling, the Heirs filed the instant petition, assigning the following errors:

The Court of Appeals erred in tracing the history of the transactions involving the property way back to the year 1923 and render judgment based on its findings, considering that petitioners are the registered owners of the property under a torrens certificate of title which is conclusive, incontrovertible and indefeasible.

The Court of Appeals erred when it did not consider that the complaint filed by the private respondents for reconveyance and cancellation of title before the trial court eleven (11) years after a torrens title over the property was issued in the name of the petitioners (had) prescribed.^[6]

Notwithstanding the indefeasibility of the Torrens title, the registered owner may still be compelled to reconvey the registered property to its true owner.  The rationale for the rule is that reconveyance does not set aside or re-subject to review the findings of fact of the Bureau of Lands.  In an action for reconveyance, the decree of registration is respected as incontrovertible.  What is sought instead is the transfer of the property or its title which has been wrongfully or erroneously registered in another person's name, to its rightful or legal owner, or to the one with a better right.^[7]

Nevertheless, the right to seek reconveyance of registered property is not absolute because it is subject to extinctive prescription.  In Caro vs. Court of Appeals,^[8] the prescriptive period of an action for reconveyance was explained:

Under the present Civil Code, we find that just as an implied or constructive trust is an offspring of the law (Art. 1456, Civil Code), so is the corresponding obligation to reconvey the property and the title thereto in favor of the true owner.  In this context, and vis-à-vis prescription, Article 1144 of the Civil Code is applicable.

Article 1144.  The following actions must be brought within ten years from the time the right of action accrues:

(1)  Upon a written contract;
(2)  Upon an obligation created by law;
(3)  Upon a judgment.

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An action for reconveyance has its basis in Section 53, paragraph 3 of Presidential Decree No. 1529, which provides:

In all cases of registration procured by fraud, the owner may pursue all his legal and equitable remedies against the parties to such fraud without prejudice, however, to the rights of any innocent holder of the decree of registration on the original petition or application, x x x.

This provision should be read in conjunction with Article 1456 of the Civil Code, which provides:

Article 1456.  If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes.

The law thereby creates the obligation of the trustee to reconvey the property and the title thereto in favor of the true owner.  Correlating Section 53, paragraph 3 of Presidential Decree No. 1529 and Article 1456 of the Civil Code with Article 1144(2) of the Civil Code, supra, the prescriptive period for the reconveyance of fraudulently registered real property is ten (10) years reckoned from the date of the issuance of the certificate of title.

There is but one instance when prescription cannot be invoked in an action for reconveyance, that is, when the plaintiff is in possession of the land to be reconveyed.^[9]

In a series of cases,^[10] this Court permitted the filing of an action for reconveyance despite the lapse of ten years and declared that said action, when based on fraud, is imprescriptible as long as the land has not passed to an innocent purchaser for value.  But in all those cases including Vital vs. Anore^[11] on which the appellate court based its assailed decision, the common factual backdrop was that the registered owners were never in possession of the disputed property.  Instead, it was the persons with the better right or the legal owners of the land who had always been in possession of the same.  Thus, the Court allowed the action for reconveyance to prosper in those cases despite the lapse of more than ten years from the issuance of title to the land.  The exception was based on the theory that registration proceedings could not be used as a shield for fraud or for enriching a person at the expense of another.^[12]

In the case at bar, however, it is the rule rather than the exception which should apply.

This Court does not normally review the factual findings of the Court of Appeals in a petition for review under Rule 45 of the Rules of Court.  But when the findings of fact of the appellate court differ from those of the trial court, the Court in the exercise of its power of review may inquire into the facts of a case.

The trial court declared the Heirs as having been in actual, open and continuous possession of the disputed lot.  On the other hand, the appellate court ruled that it was private respondents.

Private respondents presented documents purportedly showing a series of transactions which led to the alleged transfer of ownership of Lot 5793 from the Heirs to them, namely: (1) a Kasulatan Ng Pagbibilihang Lampasan, dated April 16, 1940, wherein the disputed lot was allegedly sold by the Heirs to their sibling Petra Dator and her husband Miguel Dahilig; (2) an extra-judicial partition showing that, upon the death of Miguel, his heirs Petra, Angel, Anatalia, Catalina, Felimon and Jacinto, inherited Lot 5793 and (3) two deeds of sale dated December 30, 1978 and March 15,1970 wherein Felimon and Jacinto, and later Catalina, sold their undivided shares in Lot 5793 to private respondents.

Other than the presentation of these documents, however, private respondents failed to prove that they were in actual, open and continuous possession of Lot 5793.

On the other hand, Isabel Dator, who testified for the Heirs, vehemently denied having signed the Kasulatan Ng Pagbibilihang Lampasan and pointed out the absence of the signatures of her other siblings Vicenta, Barcelisa and Adoracion.

The Heirs likewise presented proof of payment of realty taxes from 1956 to 1974 in the names of their deceased parents, and from 1975 to 1988 in their names.

More importantly, the Heirs convincingly established their open and continuous occupation of the entire Tanza estate, including Lot 5793, through their tenant Miguel Dahilig.  After Miguel's death, he was succeeded by Marcelo Saludares who testified during the trial that: (a) the farm was under the administration of Beata and Isabel Dator who took over its management after Petra Dator died; (b) he had been consistently tending the land since 1947; (c) he was the one who planted the various crops and trees thereon, except for some 100 coconut trees which he explained were planted by other people in response to the Green Revolution project of then President Marcos.

Saludares identified each and every landmark and boundary of the subject lot.  He also enumerated all the trees planted on the subject lot and, when asked about the fruits of the land, he told the court that he shared the harvest with the surviving Heirs.

In stark contrast, private respondents' witness, farm worker Perpetuo Daya could not identify the boundaries of the disputed property, its adjoining owners or recall the dates he worked and tilled the subject lot.

Specially noteworthy was the fact that the recorded cadastral claimant of Lot 5793, Angel Dahilig, testified that he executed a waiver in favor of the Heirs because they were the true owners of the subject parcel of land.^[13]

Furthermore, we note private respondent Jose Dator's declaration that he was the cadastral claimant of and free patent applicant for Lot 5794 which was adjacent to Lot 5793.  This being the case, we find private respondents' inaction difficult to understand, considering that they were among those who received notices of petitioners' free patent application dated January 2, 1979 from the Bureau of Lands.^[14]

If private respondents indeed owned Lot 5793, they should have filed an application for free patent for it just as they did for Lot 5794, or at least opposed the Heirs' application for free patent over Lot 5793, to protect their interests.  As a matter of fact, they were aware that the Heirs' tenant, Marcelo Saludares, repeatedly harvested the fruits of Lot 5793.

But even assuming that private respondents indeed validly acquired Lot 5793 in 1966 as they claimed, they nevertheless slept on their right to secure title thereto.  Their unexplained inaction for more than 11 years rendered their demand for reconveyance stale.  Vigilantibus sed non dormientibus jura subverniunt.  The law aids the vigilant, not those who sleep on their rights.  This legal precept finds perfect application in the case at bar.

Accordingly, we find that the Court of Appeals committed reversible error in disregarding the ten-year prescriptive period for the reconveyance of registered real property and in giving due course to said action despite the lapse of more than 11 years from the issuance of title thereto, which was clearly barred by prescription.

WHEREFORE, the petition is hereby granted.  The decision of the Court of Appeals, dated July 31, 1996, is REVERSED and SET ASIDE and the decision of the Regional Trial Court, dated August 27, 1992, is REINSTATED.

SO ORDERED.

Vitug, (Chairman), Sandoval-Gutierrez, and Carpio-Morales, JJ., concur.

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^[1] Penned by Associate Justice Alfredo L. Benipayo and concurred in by Associate Justices Buenaventura J. Guerrero and Romeo A. Brawner of the Tenth Division.

^[2] Penned by Judge Ricardo O. Rosales, Jr.

^[3] Exhibit "5," exhibit for petitioners, Record.

^[4] Rollo, pp. 52-53, 55-56.

^[5] Rollo, pp. 36-37.

^[6] Rollo, p. 8.

^[7] Liwalug Amerol, et al. vs. Molok Bagumbaran,154 SCRA 396 [1987].

^[8] 180 SCRA 401 [1989].

^[9] Millena vs. Court of Appeals, 324 SCRA 126 [2000] citing Almarza vs. Argulles, 156 SCRA 718 [1987].

^[10] Rodriguez vs. Director of Lands, et al., 31 Phil. 272; Zarate vs. Director of Lands, 34 Phil. 416; Amerol vs. Bagumbaran, 154 SCRA 396 [1987]; Caro vs. Court of Appeals, 180 SCRA 401 [1989].

^[11] 90 Phil. 855 [1952].

^[12] Millena supra.

^[13] Rollo, p. 28.

^[14] Exhibit "9," exhibit for defendants.