Case Digest (G.R. No. 35223)
Facts:
The case revolves around a dispute concerning a parcel of land identified as Lot No. 4399 located in Dapdap, Lapu-Lapu City. The petitioner, Aznar Brothers Realty Company, acquired this property through an Extra-Judicial Partition of Real Estate with Deed of Absolute Sale executed on March 3, 1964, by the heirs of Crisanta Maloloy-on, whose original petition led to a cadastral decree issued by the Cadastral Court. Following Crisanta’s death in 1930, the land was directed to be decreed to her eight children: Juan, Celedonio, Emiliano, Francisco, Simeon, Bernabe, Roberta, and Fausta, all surnamed Aying. The original title, however, was lost during World War II.
Upon acquiring the land, Aznar Brothers Realty consistently paid real property taxes, and in 1988 sought a reconstitution of the original title, which was granted, leading to the issuance of Original Certificate of Title No. RO-2856. In 1991, asserting its ownership, the company issued notices to vacate to those occupying
Case Digest (G.R. No. 35223)
Facts:
- Background and Property History
- Disputed Property
- Lot No. 4399, with an area of 34,325 square meters located at Dapdap, Lapu-Lapu City.
- Initially subject to a petition for issuance of a cadastral decree in favor of Crisanta Maloloy-on.
- Heir Determination and Early Documents
- Upon Crisanta’s death in 1930, the Cadastral Court issued a decision directing that the cadastral decree be issued in the name of her eight children (Juan, Celedonio, Emiliano, Francisco, Simeon, Bernabe, Roberta, and Fausta—all surnamed Aying).
- The original certificate of title was lost during the war.
- Extra-Judicial Partition and Conveyance
- All the heirs executed an Extra-Judicial Partition of Real Estate with a Deed of Absolute Sale dated March 3, 1964, which conveyed the subject property to Aznar Brothers Realty Company (petitioner).
- The deed was subsequently registered with the Register of Deeds of Lapu-Lapu City on March 6, 1964 under Act No. 3344 (the law governing registration for unregistered land).
- Petitioner demonstrated continued interest by paying real property taxes regularly on the property.
- Reconstitution of Title
- In 1988, petitioner filed a Petition for Reconstitution of the Original Title due to the loss of the original certificate during the war.
- The court granted the petition on April 12, 1988, directing that the Register of Deeds issue a reconstituted title in the names of the original Aying siblings.
- Original Certificate of Title No. RO-2856 was thus issued.
- Possession, Occupancy, and Initial Litigation
- In 1991, petitioner, asserting its ownership, issued notices to vacate directed to persons occupying the property, based on its claim derived from the extra-judicial partition and sale.
- After the occupants failed to vacate, petitioner filed a complaint for ejectment with the Metropolitan Trial Court (MTC) in Lapu-Lapu City.
- On February 1, 1994, the MTC ordered the occupants to vacate the property.
- The case evolved into further litigation, including G.R. No. 128102, where petitioner’s right of possession was reaffirmed.
- Respondents’ Challenge and Parallel Action
- Respondents, consisting of various descendants (numbering around 220) of the eight Aying siblings, filed a separate amended complaint (Civil Case No. 2930-L) before the RTC.
- Allegations by respondents included:
- They are the true co-owners of the subject property as descendants of the registered owners under OCT No. RO-2856.
- They had in fact enjoyed actual, peaceful, and continuous possession since time immemorial, only disturbed in 1991 by petitioner’s actions.
- The Extra-Judicial Partition with Deed of Absolute Sale was fraudulently executed or simulated, notably due to the absence of signatures by all co-owners and the execution of some signatures posthumously.
- Petitioner’s actions involved bad faith, force, threat, and intimidation against them, giving rise to claims for cancellation of the partition deed, recovery of their ownership, injunction, and damages.
- Petitioner, in its Answer before the RTC, denied the respondents’ claim to ownership and asserted its peaceful possession and valid conveyance of property through the extra-judicial partition and sale.
- Petitioner further raised affirmative defenses of prescription and failure to state a cause of action, asserting that respondents delayed filing their action for around 27 years, which should bar recovery.
- Trial Court (RTC) Proceedings and Decision
- The RTC, in a Pre-Trial Order dated January 30, 1995, narrowed the issues to:
- Whether respondents are the heirs of the original owners.
- Whether the property is owned by the respondents.
- Whether petitioner is estopped from asserting its claim.
- The validity of the Extra-Judicial Partition with Deed of Absolute Sale.
- Application of prescription.
- In its Decision dated July 4, 1997, the RTC:
- Declared that the evidence failed to prove that the partition deed was totally simulated or fictitious, thereby upholding its validity and effective conveyance of the property to petitioner.
- Ruled that respondents’ action was time-barred (prescribed):
- As an action for reconveyance based on implied trust, it prescribed in 10 years from the date of registration (March 6, 1964).
- Alternatively, as an annulment of contract based on fraud, it should have been filed within 4 years from the discovery of the alleged fraudulent act.
- Concluded that respondents failed to present admissible proof of filiation to establish their status as heirs.
- Court of Appeals (CA) Decision
- On March 7, 2000, the CA modified the RTC decision:
- It upheld the overall validity of the Extra-Judicial Partition with Deed of Absolute Sale, except with respect to the shares of the heirs of Emiliano, Simeon, and Roberta Aying who did not participate in its execution.
- The CA held that an action for recovery of possession of registered land never prescribes under Section 44, Act No. 496 (now Sec. 47, PD 1520).
- Even for actions based on implied trust, prescription could not run absent clear evidence of positive acts of repudiation by respondents regarding their non-participation.
- Petitioner’s subsequent motion for reconsideration of the CA decision was denied by Resolution dated August 2, 2000.
- Petition for Review on Certiorari and Raised Arguments
- Petitioner assailed the CA decision on three main grounds:
- That an heir may lose the right to recover a titled property by reason of laches.
- That the registration of the partition deed should be interpreted as an unequivocal repudiation of the trust, thereby triggering prescription.
- That Article 1104 of the Civil Code, which protects partitions made with preterition of any compulsory heir, should render the partition irrevocable in the absence of bad faith or fraud.
- Respondents countered by arguing:
- Their cause of action, being for a declaration of nullity under Article 1410, does not prescribe.
- The principle of laches should be applied against petitioner, not against heirs who maintained actual possession over the years.
- The partition deed was valid and binding for those who executed it, leaving unaffected the rights of heirs who did not participate.
- Evidentiary Determinations and Prescription Analysis
- Testimonies revealed differing dates on which the heirs discovered the partition:
- Wenceslao Sumalinog (heir of Roberta Aying) testified that he learned of the sale in 1967.
- Laurencio Aying (heir of Emiliano Aying) indicated discovering the sale after martial law.
- No clear evidence was provided regarding when Paulino Aying (heir of Simeon Aying) learned of the sale.
- The burden of proof for the commencement of the ten-year prescriptive period rested on petitioner, which it failed to establish unambiguously for the heirs of Emiliano and Simeon Aying.
- Consequently, while the cause of action for the heirs of Roberta Aying was barred by prescription, those for the heirs of Emiliano and Simeon Aying were found to be timely.
Issues:
- Prescription and Timeliness
- Whether respondents’ cause of action for reconveyance, based on an implied or constructive trust, is imprescriptible or barred by prescription.
- When exactly did the ten-year prescriptive period commence for each set of heirs, given the variations in their knowledge of the conveyance?
- Whether the doctrine of laches can be applied against the heirs who did not participate in the execution of the partition deed.
- Validity of the Extra-Judicial Partition with Deed of Absolute Sale
- Whether the extra-judicial partition and deed of absolute sale is valid and binding, especially in light of allegations of fraud or simulation due to non-participation by certain heirs.
- The impact of missing signatures and the alleged failure of some co-owners to approve the document on its validity.
- Application of Registration Law
- Whether the registration of the partition deed under Act No. 3344 (instead of Act No. 496) affected the computation of the prescriptive period.
- The implications of constructive notice and registration for the parties’ rights.
- Constructive Trust and Fiduciary Obligations
- Whether petitioner, having acquired the property under mistaken belief, is obliged by Article 1456 of the Civil Code to act as a trustee for the heirs who did not execute the partition deed.
- The extent to which principles of constructive trust and implied trust govern the reconveyance of the property.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)