Sie sind auf Seite 1von 11

THIRD DIVISION

[G.R. No. 138971. June 6, 2001]

PHILIPPINE ECONOMIC ZONE AUTHORITY (PEZA), petitioner, vs. HON. RUMOLDO R. FERNANDEZ, Regional Trial
Court of Lapu-Lapu City (Branch 54); and the Heirs of the Deceased Spouses JUAN CUIZON and
FLORENTINA RAPAYA, respondents.

DECISION

PANGANIBAN, J.:

An action for reconveyance of land, an equitable remedy recognized under our land registration laws, is subject to the
applicable rules on prescription. Moreover, the right to pursue such reivindicatory action may be defeated when the property
sought to be recovered has been conveyed to an innocent purchaser for value.

The Case

Before this Court is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, seeking to set aside the June
8, 1999 Decision[1] of the Court of Appeals (CA) in CA-GR SP No. 47575. In the said Decision, the CA sustained the January
12, 1998[2] and the March 31, 1998[3] Orders of the Regional Trial Court of Lapu-Lapu City (Branch 54) in Civil Case No.
4534-L, which denied petitioners Motion to Dismiss and Motion for Reconsideration, respectively. The dispositive portion of
the CA Decision reads as follows:

WHEREFORE, [there being] no abuse of discretion committed by respondent court, the instant petition is hereby
DISMISSED.

The Facts

The subject of the present controversy is Lot No. 4673 of the Opon Cadastre situated in Lapu-Lapu City, covered by
Original Certificate of Title (OCT) No. RO-2537 (May 19, 1982) and registered in the names of Florentina Rapaya, Victorino
Cuizon, Isidro Cuizon, Ursula Cuizon, Benito Lozano, Isabel Lozano, Pelagia Lozano, Augusto Lozano, Valeriano
Ybaez, Jesus Ybaez, Numeriano Ybaez, Martino Ybaez, Eutiquio Patalinghug, Celedonio Patalinghug, Santiago
Patalinghug and Silvino Patalinghug. The lot has an area of 11,345 square meters, more or less.
On May 15, 1982, Jorgea Igot-Soroo, Frisca Booc and Felix Cuizon executed an Extrajudicial Partition, in which they
declared themselves as the only surviving heirs of the registered owners of the aforesaid lot. Consequently, they were
issued TCT No. 12467 on July 8, 1982.
Considering that the said lot was among the objects of expropriation proceedings docketed as Civil Case No 510-L
and pending before it, Branch XVI of the Regional Trial Court (RTC) of Lapu-Lapu City rendered a partial Decision on August
11, 1982.
In that Decision, the RTC approved the Compromise Agreement entered into between the Export Processing
Zone Authority (EPZA) and the new registered owners of Lot No. 4673; namely, Jorgea Igot-Soroo, Frisca Booc and
Felix Cuizon.

In accordance with the approved Compromise Agreement, EPZA would pay P68,070 as just compensation for the
expropriation of the subject property, which was to be used for an export processing zone to be established in
Lapu-Lapu City.
As a consequence of the RTC Decision, PEZA acquired title over Lot No. 4673 and the corresponding Transfer
Certificate of Title (TCT) No. 12788 issued by the Register of Deeds of Lapu-Lapu City on October 13, 1982.

On July 29, 1996, private respondents filed with the RTC of Lapu-Lapu City a Complaint for Nullity of Documents,
Redemption and Damages against petitioner and Jorgea-Igot Soroo et al. Docketed as Civil Case No. 4534-L, the Complaint
alleged that herein private respondents had been excluded from the extrajudicial settlement of the estate.
It likewise sought the nullification of several documents, including TCT No. 12788 dated October 13, 1992, issued in the
name of herein petitioner.
On February 17, 1997, petitioner filed a Motion to Dismiss the Complaint on the ground of prescription. This
Motion was denied by respondent judge in the Order dated January 12, 1998. A Motion for Reconsideration thereof was
likewise denied in the Order dated March 31, 1998.
On April 30, 1998, petitioner elevated the matter to the Court of Appeals through a Petition for Certiorari. As earlier noted,
the CA dismissed the Petition.

Hence, this recourse.[4]

The CA Ruling

In denying the Petition, the CA ratiocinated as follows:

Civil Case No. 4534-L although instituted in the guise of a complaint for Nullity of Documents, Redemption and Damages is in
effect an action for reconveyance of the property to plaintiffs of a portion which rightfully belong to them.

It would be against good reason and conscience not to hold that defendants, Francisca Frisca Booc, heirs of
deceased Jorg[e]a Igot-Soronio and heirs of Felix Cuizon committed a breach of trust which enabled them to
execute a Deed of Extrajudicial Partition[,] Special Power of Attorney and Deed of Absolute Sale in favor of EPZA to
the prejudice of the plaintiffs as their co-heirs.

Therefore, in an action like this case, the private respondents may be ordered to make reconveyance of the property
to the person rightfully entitled to it.

It is undeniable that defendants defrauded plaintiffs by falsely representing that they were the only heirs of deceased
Juan Cuizon and Florentina Rapaya, succeeded in having the original title cancelled and enabling them to
appropriate the land in favor of EPZA and a new one issued in the name of the latter (EPZA).

This way of acquiring title create[s] what is called constructive trust in favor of the defrauded party and grants the
latter the right to vindicate [itself] x x x regardless of the lapse of time.

Thus, it has been held that if a person obtain(s) a legal title to the property by fraud or concealment, courts of equity
will impress upon the title a so called trust in favor of the defrauded party. In fact, it has long been held that a co-heir
who through fraud, succeeds in obtaining a certificate of title in his name to the prejudice of his co-heirs, is deemed
to hold the land in trust for the latter. The excluded heirs action is imprescriptible.

And if the action involve(s) the declaration of the nullity or inexistence of a void or inexistent contract which became the basis
for the fraudulent registration of the subject property, then the action is imprescriptible. This finds codal support in Article 1410
of the Civil Code, which declares that the action or defense for the declaration of the inexistence of a void contract does not
prescribe.

As to the constructive notice rule alleged by the petitioner, (the) Supreme Court in the case of Juan vs. Zuniga, citing Sevilla
vs. Angeles, has this to say:

'While this ruling is correct as applied to ordinary actions by recovery of real property which is covered by a torrens
title upon the theory that its registration under our registration system has the effect of constructive notice to the
whole world, the same cannot be applied x x x when the purpose of the action is to compel a trustee to convey the
property registered in his name for the benefit of the cestui que trust. In other words, the defense of prescription
cannot be set up in an action whose purpose is to recover property held by a person for the benefit of another.

The Issues

Petitioner interposes the following issues for the consideration of this Court:
I
Whether or not the appellate court erred in not holding that private respondents claim against expropriated property had
prescribed.

II

Whether or not the appellate court erred in not holding that reconveyance does not lie against the expropriated property. [5]

The Courts Ruling

The Petition is meritorious.

First Issue: Prescription

Petitioner avers that private respondents claim against the subject property has already prescribed, because the
two-year period within which an unduly excluded heir may seek a new settlement of the estate had already lapsed by the time
private respondents filed their action with the trial court.

Petitioner further argues that private respondents received constructive notice in view of the registration of the
extrajudicial partition with the Registry of Deeds. According to petitioner, the two-year period commenced from July 8, 1982,
the date of inscription of the extrajudicial settlement on OCT No. 2537.
The pertinent provisions of Section 4, Rule 74 of the Rules of Court, are reproduced for easy reference, as follows:

Section 4. Liability of distributees and estate. - If it shall appear at any time within two (2) years after the settlement and
distribution of an estate in accordance with the provisions of either of the first two sections of this rule, that an heir or other
person has been unduly deprived of his lawful participation in the estate, such heir or such other person may
compel the settlement of the estate in the courts in the manner hereinafter provided for the purpose of satisfying
such lawful participation.

And if within the same time of two (2) years, it shall appear that there are debts outstanding against the estate which have not
been paid, or that an heir or other person has been unduly deprived of his lawful participation payable in money, the court
having jurisdiction of the estate may, by order for that purpose, after hearing, settle the amount of such debts or lawful
participation and order how much and in what manner each distributee shall contribute in the payment thereof, and may issue
execution, if circumstances require, against the bond provided in the preceding section or against the real estate belonging to
the deceased, or both. Such bond and such real estate shall remain charged with a liability to creditors, heirs, or other
persons for the full period of two (2) years after such distribution, notwithstanding any transfers of real estate that may have
been made. (Emphasis supplied)

A perusal of the foregoing provision will show that persons unduly deprived of their lawful participation in a settlement
may assert their claim only within the two-year period after the settlement and distribution of the estate. This prescription
period does not apply, however, to those who had no part in or had no notice of the settlement.

Section 4, Rule 74 of the Rules of Court, is not meant to be a statute of limitations. Moreover, by no reason or logic can
one contend that an extrajudicial partition, being merely an ex parte proceeding, would affect third persons who had no
knowledge thereof.[6] Be that as it may, it cannot be denied, either, that by its registration in the manner provided by law, a
transaction may be known actually or constructively.
In the present case, private respondents are deemed to have been constructively notified of the extrajudicial
settlement by reason of its registration and annotation in the certificate of title over the subject lot. From the time of
registration, private respondents had two (2) years or until July 8, 1984, within which to file their objections or to
demand the appropriate settlement of the estate.

On the matter of constructive notice vis--vis prescription of an action to contest an extrajudicial partition, a leading
authority on land registration elucidates as follows:

While it may be true that an extrajudicial partition is an ex parte proceeding, yet after its registration under the
Torrens system and the annotation on the new certificate of title of the contingent liability of the estate for a period of two
years as prescribed in Rule 74, Section 4, of the Rules of Court, by operation of law a constructive notice is deemed
made to all the world, so that upon the expiration of said period all third persons should be barred [from going] after
the particular property, except where title thereto still remains in the names of the alleged heirs who executed the partition
tainted with fraud, or their transferees who may not qualify as innocent purchasers for value. If the liability of the registered
property should extend indefinitely beyond that period, then such constructive notice which binds the whole world by virtue of
registration would be meaningless and illusory. x x x.[7] (Emphasis supplied)

The only exception to the above-mentioned prescription is when the title remains in the hands of the heirs who have
fraudulently caused the partition of the subject property or in those of their transferees who cannot be considered innocent
purchasers for value.
In this regard, title to the property in the present case was no longer in the name of the allegedly fraudulent heirs,
but already in that of an innocent purchaser for value the government. Moreover, the government is presumed to
have acted in good faith in the acquisition of the lot, considering that title thereto was obtained through a
Compromise Agreement judicially approved in proper expropriation proceedings.

Even assuming that there was in fact fraud on the part of the other heirs, private respondents may proceed only against
the defrauding heirs, not against petitioner which had no participation in or knowledge of the alleged fraud. The fact that the
co-heirs title to the property was fraudulently secured cannot prejudice the rights of petitioner which, absent any showing that
it had knowledge or participation in the irregularity, is considered a purchaser in good faith and for value.[8]

The remedy of an owner alleged to have been prejudiced or fraudulently deprived of property that was subsequently
sold to an innocent purchaser for value is an action for damages against the person or persons who perpetrated the fraud.[9]

Second Issue: Limitations on Reconveyance

The law recognizes the right of a person, who, by adjudication or confirmation of title obtained by actual fraud, is
deprived of an estate or an interest therein.[10] Although a review of the decree of registration is no longer possible after the
one-year period from its entry expires, still available is an equitable remedy to compel the reconveyance of property to those
who may have been wrongfully deprived of it.[11] This equitable remedy afforded by law is not without limitations, however.
An action for reconveyance resulting from fraud prescribes four years from the discovery of the fraud; such
discovery is deemed to have taken place upon the issuance of the certificate of title over the property. Registration
of real property is considered a constructive notice to all persons and, thus, the four-year period shall be counted
therefrom.[12]
Clearly then, private respondents action for reconveyance based on fraud has already prescribed, considering
that title to said property had been issued way back on August 11, 1982, while the reivindicatory suit was instituted
only on July 29, 1996.

Even an action for reconveyance based on an implied or a constructive trust would have already prescribed
just the same, because such action prescribes ten (10) years from the alleged fraudulent registration or date of
issuance of the certificate of title over the property.[13]
The imprescriptibility of an action for reconveyance based on implied or constructive trust applies only when
the plaintiff or the person enforcing the trust is in possession of the property. In effect, the action for reconveyance
is an action to quiet the property title, which does not prescribe.[14] Undisputedly, private respondents are not in
possession of the disputed property. In fact, they do not even claim to be in possession of it, even if to do so would
enable them to justify the imprescriptibility of their action.

Accordingly, the CA Decisions reliance on Juan v. Zuiga,[15] as regards the imprescriptibility of an action for
reconveyance based on implied or constructive trust, is utterly misplaced in the light of the foregoing rulings of the Court
declaring a ten-year period of prescription for such action.
Moreover, the principle enunciated therein has no application to the instant case, considering that the supposed
trustee herein has effectively repudiated the so-called trust by directly performing an act of ownership; that is, by
conveying the property to the government through expropriation.

An action to compel, for the benefit of the cestui que trust, the conveyance of property registered in the trustees name
does not prescribe unless the trustee repudiates the trust.[16] Thus, private respondents cannot invoke the imprescriptibility of
their action for reconveyance, irrespective of their basis for it.
Finally, it must be remembered that reconveyance is a remedy of those whose property has been wrongfully or
erroneously registered in the name of another. Such recourse, however, cannot be availed of once the property has
passed to an innocent purchaser for value. For an action for reconveyance to prosper, the property should not have
passed into the hands of an innocent purchaser for value.[17]

Indubitably, we find that the property has already been conveyed to the government in appropriate expropriation
proceedings, the regularity or validity of which has not been questioned. Petitioner should, therefore, enjoy the
security afforded to innocent third persons under our registration laws. Equally important, its title to the property must
be rightfully preserved.
Hence, private respondents action to recover the subject property from the government cannot be maintained, not only
because of the prescription of the action, but on account of the protection given to innocent purchasers for value granted
under our land registration laws. Indeed, the inevitable consequences of the Torrens system of land registration must be
upheld in order to give stability to it and provide finality to land disputes.

This ruling notwithstanding, private respondents are not without recourse. They may sue for damages their co-heirs who
have allegedly perpetrated fraud in Civil Case No. 4534-L pending before the RTC. The right and the extent of damages to be
awarded to private respondents shall be determined by the trial court, subject to the evidence duly established during the
proceedings.
WHEREFORE, the Petition is hereby GRANTED and the assailed Decision of the Court of Appeals REVERSED. The
Orders of the Regional Trial Court of Lapu-Lapu City (Branch 54) in Civil Case No. 4534-L, dated January 12, 1998 and
March 31, 1998, are SET ASIDE and the said Civil Case, as against petitioner, is DISMISSED. No costs.

SO ORDERED.

Melo, (Chairman), Vitug, Gonzaga-Reyes, and Sandoval-Gutierrez, JJ., concur.

[1]
Rollo, pp. 28-31. This was penned by Justice Eugenio S. Labitoria (Division chairman) with the concurrence of Justices
Marina L. Buzon and Renato C. Dacudao, members.
[2]
Rollo, pp. 23-24.
[3]
Rollo, pp. 25-27.
[4]
The case was deemed submitted for resolution on March 27, 2000, upon receipt by the Court of petitioners Memorandum
signed by Solicitor General Ricardo P. Galvez, Assistant Solicitor General Nestor J. Ballacillo and Associate Solicitor Tomas
M. Navarro. Respondents Memorandum, signed by Atty. Demosthenes S. Tecson, was received by this Court on February 29,
2000.
[5]
Petitioners Memorandum, p.5; rollo, p.120.
[6]
Sampilo & Salacup v. CA, 103 Phil 70, February 28, 1958; Villaluz v. Neme, 7 SCRA 27, January 31, 1963.
[7]
Pea, Registration of Land Titles and Deeds, 1988 revised ed., p. 409.
[8]
Eduarte v. CA, 253 SCRA 391, February 9, 1996.
[9]
Ibid.
[10]
Serna v. CA, 308 SCRA 527, June 18, 1999.
[11]
Esquivias v. CA, 272 SCRA 803, May 29, 1997.
[12]
Ramos v. CA, 302 SCRA 589, February 3, 1999; Serna v. CA, 308 SCRA 527, June 18, 1999 .
[13]
Salvatierra v. CA, 261 SCRA 45, August 26, 1996; Olviga v. CA, 227 SCRA 330, October 21, 1993; Sta. Ana Jr. v. CA,
281 SCRA 624, November 13, 1997.
[14]
Vda. de Cabrera v. CA, 267 SCRA 339, February 3, 1997.
[15]
4 SCRA 1221, April 28, 1962.
[16]
Viloria v. CA, 309 SCRA 529, June 30, 1999.
[17]
Lucena v. CA, 313 SCRA 47, August 25, 1999.

Republic of the Philippines


SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 171717 December 15, 2010


RAMON B. BRITO, SR., Petitioner,
vs.
SEVERINO D. DIANALA, VIOLETA DIANALA SALES, JOVITA DIANALA DEQUINTO, ROSITA DIANALA, CONCHITA
DIANALA and JOEL DEQUINTO, Respondents.

DECISION

PERALTA, J.:

Before the Court is a petition for review on certiorari seeking to annul and set aside the Decision1 dated January 12, 2005 and
Resolution2 dated February 13, 2006 of the Court of Appeals (CA) in CA-G.R. CV No. 70009. The assailed Decision set aside
the Joint Orders3 dated June 29, 2000 of the Regional Trial Court (RTC) of Negros Occidental, Branch 60, Cadiz City, while
the questioned Resolution denied petitioner's Motion for Reconsideration.

The factual and procedural antecedents of the case are as follows:

Subject of the present petition is a parcel of land located at Barrio Sicaba, Cadiz City, Negros Occidental. The said tract of
land is a portion of Lot No. 1536-B, formerly known as Lot No. 591-B, originally owned by a certain Esteban Dichimo and
his wife, Eufemia Dianala, both of whom are already deceased.

On September 27, 1976, Margarita Dichimo, assisted by her husband, Ramon Brito, Sr., together with Bienvenido Dichimo,
Francisco Dichimo, Edito Dichimo, Maria Dichimo, Herminia Dichimo, assisted by her husband, Angelino Mission, Leonora
Dechimo, assisted by her husband, Igmedio Mission, Felicito, and Merlinda Dechimo, assisted by her husband, Fausto
Dolleno, filed a Complaint for Recovery of Possession and Damages with the then Court of First Instance (now
Regional Trial Court) of Negros Occidental, against a certain Jose Maria Golez. The case was docketed as Civil Case
No. 12887.

Petitioner's wife, Margarita, together with Bienvenido and Francisco, alleged that they are the heirs of a certain Vicente
Dichimo, while Edito, Maria, Herminia, Leonora, Felicito and Merlinda claimed to be the heirs of one Eusebio Dichimo; that
Vicente and Eusebio are the only heirs of Esteban and Eufemia; that Esteban and Eufemia died intestate and upon their
death Vicente and Eusebio, as compulsory heirs, inherited Lot No. 1536-B; that, in turn, Vicente and Eusebio, and their
respective spouses, also died intestate leaving their pro indiviso shares of Lot No. 1536-B as part of the inheritance of the
complainants in Civil Case No. 12887.

On July 29, 1983, herein respondents filed an Answer-in-Intervention claiming that prior to his marriage to Eufemia,
Esteban was married to a certain Francisca Dumalagan; that Esteban and Francisca bore five children, all of whom are
already deceased; that herein respondents are the heirs of Esteban and Francisca's children; that they are in open, actual,
public and uninterrupted possession of a portion of Lot No. 1536-B for more than 30 years; that their legal interests over the
subject lot prevails over those of petitioner and his co-heirs; that, in fact, petitioner and his co-heirs have already disposed of
their shares in the said property a long time ago.

On November 26, 1986, the trial court issued an Order dismissing without prejudice respondents' Answer-in-Intervention for
their failure to secure the services of a counsel despite ample opportunity given them.

Civil Case No. 12887 then went to trial.

Subsequently, the parties in Civil Case No. 12887 agreed to enter into a Compromise Agreement wherein Lot No. 1536-B
was divided between Jose Maria Golez, on one hand, and the heirs of Vicente, namely: Margarita, Bienvenido, and Francisco,
on the other. It was stated in the said agreement that the heirs of Eusebio had sold their share in the said lot to the mother of
Golez.

Thus, on September 9, 1998, the Regional Trial Court (RTC) of Bacolod City, Branch 45 rendered a decision approving the
said Compromise Agreement.

Thereafter, TCT No. T-12561 was issued by the Register of Deeds of Cadiz City in the name of Margarita, Bienvenido and
Francisco.

On January 18, 1999, herein petitioner and his co-heirs filed another Complaint for Recovery of Possession and Damages,
this time against herein respondents. The case, filed with the RTC of Cadiz City, Branch 60, was docketed as Civil Case No.
548-C. Herein respondents, on the other hand, filed with the same court, on August 18, 1999, a Complaint for Reconveyance
and Damages against petitioner and his co-heirs. The case was docketed as Civil Case No. 588-C.
The parties filed their respective Motions to Dismiss. Thereafter, the cases were consolidated.

On June 29, 2000, the RTC issued Joint Orders, disposing as follows:

WHEREFORE, in view of the foregoing, this Court hereby orders the following:

1. The Motion to Dismiss Civil Case No. 548-C is hereby GRANTED and Civil Case No. 548[-C] is hereby ordered
DISMISSED for violation of the rule on forum shopping;

2. The Motion to Dismiss Civil Case No. 588-C is likewise hereby GRANTED and the Complaint dated August 13, 1999 is
hereby DISMISSED for want of jurisdiction.

3. All counterclaims in both cases, Civil Case No. 548-C and 588-C are likewise ordered DISMISSED.

SO ORDERED.4

The parties filed their respective motions for reconsideration, but both were denied by the RTC in an Order dated October 5,
2000.

Herein respondents then appealed the case to the CA praying that the portion of the RTC Joint Orders dismissing Civil Case
No. 588-C be declared null and void and that the case be decided on the merits.

On January 12, 2005, the CA rendered judgment disposing as follows:

WHEREFORE, in view of the foregoing premises, judgment is hereby rendered by us GRANTING the appeal filed in this
case and SETTING ASIDE, as we hereby set aside, the Joint Order[s] dated June 29, 2000 of the RTC of Cadiz City, Branch
60, dismissing Civil Case No. 588-C. Further, let the entire records of this case be remanded to the court a quo for the trial
and hearing on the merits of Civil Case No. 588-C.

SO ORDERED.5

Petitioner filed a Motion for Reconsideration, but the CA denied it in a Resolution dated February 13, 2006.

Hence, the instant petition with the following assigned errors:

I. THE HONORABLE COURT OF APPEALS ERRED WHEN IT RULED THAT THE LOWER COURT HAS THE
JURISDICTION TO HEAR THE RECONVEYANCE CASE OF THE HEREIN PLAINTIFFS-APPELLANTS BEFORE THE
REGIONAL TRIAL COURT OF NEGROS OCCIDENTAL, BRANCH 60, CADIZ CITY.

II. THE HONORABLE COURT OF APPEALS ERRED IN FINDING THAT THE AMENDMENT OF THE DECISION IN CIVIL
CASE NO. 12887 IS NOT TANTAMOUNT TO ANNULMENT OF THE SAID DECISION. THE HONORABLE COURT IS
WITHOUT JURISDICTION TO TAKE COGNIZANCE OF THIS CASE.6

In his first assigned error, petitioner claims that the CA erred in holding that respondents are not parties in Civil Case No.
12887 contending that, since their Answer-in-Intervention was admitted, respondents should be considered parties in the said
case. Petitioner also avers that, being parties in Civil Case No. 12887, respondents are bound by the judgment rendered
therein.

The Court is not persuaded.

It is true that the filing of motions seeking affirmative relief, such as, to admit answer, for additional time to file answer, for
reconsideration of a default judgment, and to lift order of default with motion for reconsideration, are considered voluntary
submission to the jurisdiction of the court.7

In the present case, when respondents filed their Answer-in-Intervention they submitted themselves to the jurisdiction of the
court and the court, in turn, acquired jurisdiction over their persons. Respondents, thus, became parties to the action.

Subsequently, however, respondents' Answer-in-Intervention was dismissed without prejudice. From then on, they ceased to
be parties in the case so much so that they did not have the opportunity to present evidence to support their claims, much
less participate in the compromise agreement entered into by and between herein petitioner and his co-heirs on one hand
and the defendant in Civil Case No. 12887 on the other. Stated differently, when their Answer-in-Intervention was
dismissed, herein respondents lost their standing in court and, consequently, became strangers to Civil Case No.
12887. It is basic that no man shall be affected by any proceeding to which he is a stranger, and strangers to a case
are not bound by judgment rendered by the court.8 Thus, being strangers to Civil Case No. 12887, respondents are
not bound by the judgment rendered therein.

Neither does the Court concur with petitioner's argument that respondents are barred by prescription for having filed their
complaint for reconveyance only after more than eight years from the discovery of the fraud allegedly committed by petitioner
and his co-heirs, arguing that under the law an action for reconveyance of real property resulting from fraud prescribes in four
years, which period is reckoned from the discovery of the fraud.

In their complaint for reconveyance and damages, respondents alleged that petitioner and his co-heirs acquired the subject
property by means of fraud.

Article 1456 of the Civil Code provides that a person acquiring property through fraud becomes, by operation of law,
a trustee of an implied trust for the benefit of the real owner of the property. An action for reconveyance based on an
implied trust prescribes in ten years, the reckoning point of which is the date of registration of the deed or the date
of issuance of the certificate of title over the property.9 Thus, in Caro v. Court of Appeals,10 this Court held as follows:

x x x The case of Liwalug Amerol, et al. v. Molok Bagumbaran, G.R. No. L-33261, September 30, 1987,154 SCRA 396,
illuminated what used to be a gray area on the prescriptive period for an action to reconvey the title to real property and,
corollarily, its point of reference:

x x x It must be remembered that before August 30, 1950, the date of the effectivity of the new Civil Code, the old Code of
Civil Procedure (Act No. 190) governed prescription. It provided:

SEC. 43. Other civil actions; how limited.- Civil actions other than for the recovery of real property can only be brought within
the following periods after the right of action accrues:

xxx xxx xxx

3. Within four years: xxx An action for relief on the ground of fraud, but the right of action in such case shall not be deemed to
have accrued until the discovery of the fraud;

xxx xxx xxx

In contrast, 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-a-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.

xxx xxx x x x (Italics supplied.)

An action for reconveyance based on an implied or constructive trust must perforce prescribe in ten years and not
otherwise. A long line of decisions of this Court, and of very recent vintage at that, illustrates this rule. Undoubtedly,
it is now well settled that an action for reconveyance based on an implied or constructive trust prescribes in ten
years from the issuance of the Torrens title over the property.

The only discordant note, it seems, is Balbin vs. Medalla, which states that the prescriptive period for a reconveyance action
is four years. However, this variance can be explained by the erroneous reliance on Gerona vs. de Guzman. But in Gerona,
the fraud was discovered on June 25, 1948, hence Section 43(3) of Act No. 190, was applied, the new Civil Code not coming
into effect until August 30, 1950 as mentioned earlier. It must be stressed, at this juncture, that article 1144 and article 1456,
are new provisions. They have no counterparts in the old Civil Code or in the old Code of Civil Procedure, the latter being then
resorted to as legal basis of the four-year prescriptive period for an action for reconveyance of title of real property acquired
under false pretenses.
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, x x x

xxxx

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. x x x11

In the instant case, TCT No. T-12561 was obtained by petitioner and his co-heirs on September 28, 1990, while
respondents filed their complaint for reconveyance on August 18, 1999. Hence, it is clear that the ten-year
prescriptive period has not yet expired.

The Court, likewise, does not agree with petitioner's contention that respondents are guilty of laches and are already
estopped from questioning the decision of the RTC in Civil Case No. 12887 on the ground that they slept on their rights and
allowed the said decision to become final.

In the first place, respondents cannot be faulted for not appealing the decision of the RTC in Civil Case No. 12887
simply because they are no longer parties to the case and, as such, have no personality to assail the said judgment.

Secondly, respondents' act of filing their action for reconveyance within the ten-year prescriptive period does not
constitute an unreasonable delay in asserting their right. The Court has ruled that, unless reasons of inequitable
proportions are adduced, a delay within the prescriptive period is sanctioned by law and is not considered to be a
delay that would bar relief.12 Laches is recourse in equity.13 Equity, however, is applied only in the absence, never in
contravention, of statutory law.14

Moreover, the prescriptive period applies only if there is an actual need to reconvey the property as when the plaintiff
is not in possession thereof.15 Otherwise, if the plaintiff is in possession of the property, prescription does not
commence to run against him.16

Thus, when an action for reconveyance is nonetheless filed, it would be in the nature of a suit for quieting of title, an action
that is imprescriptible.17 The reason for this is that one who is in actual possession of a piece of land claiming to be the owner
thereof may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right, the rationale
for the rule being, that his undisturbed possession provides him a continuing right to seek the aid of a court of equity to
ascertain and determine the nature of the adverse claim of a third party and its effect on his own title, which right can be
claimed only by the one who is in possession.18

In the present case, there is no dispute that respondents are in possession of the subject property as evidenced by the
fact that petitioner and his co-heirs filed a separate action against respondents for recovery of possession thereof.
Thus, owing to respondents' possession of the disputed property, it follows that their complaint for reconveyance is,
in fact, imprescriptible. As such, with more reason should respondents not be held guilty of laches as the said doctrine,
which is one in equity, cannot be set up to resist the enforcement of an imprescriptible legal right.

In his second assignment of error, petitioner argues that the objective of respondents in filing Civil Case No. 588-C with the
RTC of Cadiz City was to have the decision of the RTC of Bacolod City in Civil Case No. 12887 amended, which is
tantamount to having the same annulled. Petitioner avers that the RTC of Cadiz City has no jurisdiction to act on Civil Case
No. 588-C, because it cannot annul the decision of the RTC of Bacolod City which is a co-equal court.

The Court does not agree.

The action filed by respondents with the RTC of Cadiz City is for reconveyance and damages.1awphi1 They are not seeking
the amendment nor the annulment of the Decision of the RTC of Bacolod City in Civil Case No. 12887. They are
simply after the recovery of what they claim as their rightful share in the subject lot as heirs of Esteban Dichimo.

As earlier discussed, respondents' Answer-in-Intervention was dismissed by the RTC of Bacolod City without prejudice. This
leaves them with no other option but to institute a separate action for the protection and enforcement of their rights and
interests. It will be the height of inequity to declare herein petitioner and his co-heirs as exclusive owners of the
disputed lot without giving respondents the opportunity to prove their claims that they have legal interest over the
subject parcel of land, that it forms part of the estate of their deceased predecessor and that they are in open, and
uninterrupted possession of the same for more than 30 years. Much more, it would be tantamount to a violation of
the constitutional guarantee that no person shall be deprived of property without due process of law.19

WHEREFORE, the instant petition is DENIED. The assailed Decision dated January 12, 2005 and Resolution dated February
13, 2006 of the Court of Appeals in CA-G.R. CV No. 70009 are AFFIRMED.

SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson

ANTONIO EDUARDO B. NACHURA ROBERTO A. ABAD


Associate Justice Associate Justice

JOSE CATRAL MENDOZA


Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Court’s Division.

ANTONIO T. CARPIO
Associate Justice
Second Division, Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I certify that the conclusions
in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the
Court’s Division.

RENATO C. CORONA
Chief Justice

Footnotes

1
Annex "I" to Petition, rollo, pp. 67-75.

2
Annex "O" to Petition, id. at 135-136.

3
Annex "H" to Petition, id. at 61-65.

4
CA rollo, pp. 164-165.

5
Rollo, p. 74.

6
Id. at 14-15.
7
Leah Palma v. Hon. Danilo P. Galvez, etc., et al., G.R. No. 165273, March 10, 2010; Dole Philippines, Inc. (Tropifresh
Division) v. Quilala, G.R. No. 168723, July 9, 2008, 557 SCRA 433, 437; Hongkong and Shanghai Banking Corp. Ltd. v.
Catalan, 483 Phil. 525, 542 (2004).

8
Heirs of Marcelino Doronio v. Heirs of Fortunato Doronio, G.R. No. 169454, December 27, 2007, 541 SCRA 479, 501;
Manotok Realty, Inc. v. CLT Realty Development Corporation, G.R. Nos. 123346 and 134385, December 14, 2007, 540
SCRA 304, 339; National Housing Authority v. Evangelista, 497 Phil. 762, 770 (2005).

9
Manuel P. Ney and Romulo P. Ney v. Spouses Celso Quijano and Mina N. Quijano, G.R. No. 178609, August 4, 2010.

10
259 Phil. 891 (1989).

11
Id. at 897-899. (Underscoring supplied.)

12
LICOMCEN, Incorporated v. Foundation Specialists, Inc., G.R. Nos. 167022 &169678, August 31, 2007, 531 SCRA 705,
724; De Castro v. Court of Appeals, 434 Phil 53, 68 (2002).

13
Bank of the Philippine Islands v. Royeca, G.R. No. 176664, July 21, 2008, 559 SCRA 207, 219; De Castro v. Court of
Appeals, supra.

14
Id.

15
Ney v. Spouses Quijano, supra note 9, citing Lasquite v. Victory Hills, Inc., 590 SCRA 616, 631 (2009).

16
Id.

17
Id.

18
D.B.T. Mar-Bay Construction, Incorporated v. Panes, G.R. No. 167232, July 31, 2009, 594 SCRA 578, 591, citing Vda. de
Gualberto v. Go, 463 SCRA 671, 681 (2005).

19
Galicia v. Manliquez Vda. de Mindo, G.R. No. 155785, April 13, 2007, 521 SCRA 85, 95.

Das könnte Ihnen auch gefallen