Appeal from the judgment of the Court of First Instance of Nueva Vizcaya, Honorable Jose de Venecia, presiding, and appealed directly to this court as judgment was rendered on a stipulation of facts and only questions of law are raised in the appeal.

By the stipulation of the parties it appears that on March 13, 1916, free patent No. 3699 was issued over the land subject of the action in the name of Domingo Mejia. This patent was transcribed in the Office of the Register of Deeds of Nueva Vizcaya on July 26, 1916 and certificate of title No. 380 issued in the name of Domingo Mejia. On March 24, 1916, after the issuance of the patent but before the registration of the same, patentee Domingo Mejia deeded the land to Zacarias Ciscar, who immediately took possession thereof and enjoyed its fruits. Upon his death the property was included in the distribution of his estate and adjudicated to Roque Sanchez. Roque Sanchez in turn sold the land on January 21, 1940 to Andres Gamponia, defendant herein. Sanchez was in possession and enjoyment of the land from the time he acquired it by inheritance from Ciscar up to the time he sold it to defendant Andres Gamponia, the latter has also possessed and enjoyed the property from the time he bought it to date.

Domingo Mejia, upon his death, left no descendants or ascendants and his only surviving kin was his brother Pedro Mejia. Pedro Mejia is now also dead and is survived by his daughter Concordia Mejia de Lucas, plaintiff herein. Upon the above facts the court a quo held that the sale by the patentee to Zacarias Ciscar is null and void, as the sale was made only 11 days after the issuance of a patent in violation of the provisions of section 35 of Act No. 926. The Court further held that since the land is registered land no title in derogation to that of the registered owner could have been acquired either by Zacarias Ciscar or his successors in interest, namely, Roque Sanchez and defendant Andres Gamponia.

The main defense presented in the answer, is that plaintiff’s right of action has already prescribed by virtue of the possession of the land by the defendant and his predecessors in interest for a period of 37 years. This defense was overruled by the court a quo on the ground that as the land is registered, with a certificate of title in the name of patentee Domingo Mejia, title thereto may not be acquired by the defendant and his predecessors in interest against said registered owner. This ruling is evidently based on Section 46 of the Land Registration Act, which provides that "no title to registered land in derogation to that of the registered owner shall be acquired by prescription or adverse possession.

Upon a careful consideration of the facts and circumstances, we are constrained to find, however, that while no legal defense to the action lies, an equitable one lies in favor of the defendant and that is, the equitable defense of laches. No hold that the defense of prescription or adverse possession in derogation of the title of the registered owner Domingo Mejia does not lie, but that of the equitable defense of laches. Otherwise, stated, we hold that while defendant may not be considered as having acquired title by virtue of his and his predecessors’ long continued possession for 37 years, the original owner’s right to recover back the possession of the property and the title thereto from the defendant has, by the long period of 37 years and by patentee’s inaction and neglect, been converted into a stale demand.

In Go Chi Gun, et al., v. Co Cho, et al., (96 Phil., 622) we held that the equitable defense of laches requires four elements: (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 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.

All the four elements mentioned above are present in the case at bar. The first element is present because on March 24, 1916 Domingo Mejia sold the land which was covered by a free patent title dated March 13, 1916 and said sale or conveyance was made in violation of Section 35 of the Public Land Act. The second element is also present because from the date of the sale on March 24, 1916 the patentee and vendor Domingo Mejia could have instituted the action to annul the conveyance and obtain back the possession and ownership of the land, but notwithstanding the apparent invalidity of the sale, neither patentee nor his successors in interest, his brother, or the latter’s daughter, plaintiff herein, who should have known of the invalidity of the sale because it is a matter of law and had all the opportunity to institute an action for the annulment of the sale, instituted no suit to annul the sale or to recover the land for a period of 37 years. Again the defendant and his predecessors in interest, the original vendee and purchaser Zacarias Ciscar, as well as vendee’s successors in interest, Roque Sanchez, and later, Andres Gamponia, never expected or believed that the original patentee or his successors in interest would bring an action to annul the sale. These circumstances constitute the third element of laches. The fourth element is also present, not only because Zacarias Ciscar paid for the land but this same land was divided among the heirs of Zacarias Ciscar in the proceedings for the settlement of his estate (Civil Case No. 301 of the Court of First Instance of Nueva Vizcaya) and Roque Sanchez, to whom the land was adjudicated, sold the property for P800 to the present defendant Andres Gamponia. All of these transfer from Zacarias Ciscar to his heirs, to Roque Sanchez and to defendant Andres Gamponia, acts which covered a period of 37 years, would all have to be undone and the respective rights and obligations of the parties affected adjusted, unless the defense is sustained.

It is to be noted that all the above complications would never had been occasioned had the original patentee and his successors in interest not slept on their rights for more than a generation. Add to this the fact that the original conveyance made by the patentee is not absolutely null and void. The prohibition against the sale of free patents is for a period of seven years (Section 35, Act No. 926); after that period of time a patentee would be free to dispose of the land. Within seven years from the conveyance the original patentee could have brought an action to recover back his property. Since nothing of this sort was done by him, it was certainly natural for the purchase to have assumed that the original patentee gave up his right to recover back the property and acquiesced in vendee’s right and title. The successor in interest of the original purchaser must also have believed in good faith that the patentee and his successors in interest were reconciled to the idea of allowing the property to stay in the hands of the successors in interest. By this inaction for a period of 37 years to the consequent prejudice that annulment of the original sale would entail upon so many successive owners, the equitable principle now stands up as a bar.

"The reason upon which the rule is based is not alone the lapse of time during which the neglect to enforce the right has existed, but the changes of condition which may have arisen during the period in which there has been neglect. In other words, where a court of equity finds that the position of the parties has to change that equitable relief cannot be afforded without doing injustice, or that the intervening rights of third persons may be destroyed or seriously impaired, it will not exert its equitable powers in order to save one from the consequences of his own neglect." (Penn Mutual Life Inc. Co., et al., v. City of Austin et al., U. S. 962.)

In effect, the principle is one of estoppel because it prevents people who have slept on their rights from prejudicing the rights of third parties who have placed reliance on the inaction of the original patentee and his successors in interest.

The equitable defense of laches has been held to exist in this jurisdiction for periods less than the period in the case at bar. Thus in the case of Gonzales v. Director of Lands, 52 Phil. 895, it was held in a cadastral case that the owner of a lot who failed to appear in the proceedings, as a result of which his land was declared public property, who brings an action 10 years later, is guilty of laches and inexcusable negligence and his action under Section 513 of the Code of Civil Procedure can no longer be maintained. In another case where the plaintiff loaned money to a couple and when the wife died and the conjugal properties divided between her heirs and her husband, the vendor did not present his claim against the estate and only did so four years later against the widower, it was held that the lender was guilty of laches in so far as the estate of the deceased spouse is concerned because it would be inequitable and unjust to permit him to revive any claims which he may have had, which claims he did not present during the distribution of the estate of the deceased wife. (Yaptico v. Marina Yulo, et al., 57 Phil., 818). In a third case (Kambal v. Director of Lands, 62 Phil., 293), cadastral proceedings for compulsory registration of certain parcels of land in Cotabato were instituted. These proceedings included two lands belonging to the petitioner. Petitioner failed to claim said lands in said proceedings and in 1917 the titles to the lands of the petitioner were cancelled. Petitioner alleges that he came to know by accident of the cancellation of his titles in the year 1933 or 1935. It was held that because of the lapse of 16 years from the date the decision was rendered in the said registration case to the filing of the petition, no relief can be granted the petitioner as he has been guilty of laches. In the three cases decided previously by this Court, the periods of inaction were from 10 to 16 years. In the case at bar it was a full period of 37 years.

The judgment appealed from is hereby reversed and one is hereby entered absolving the defendant from the action. Without costs.

Paras, C.J., Padilla, Montemayor, Bautista Angelo, Concepcion, Reyes, J. B. L., Endencia and Felix, JJ., concur.