G.R. No. L-28838 - De la Cerna vs. De la Cerna

The property in dispute is a residential land parcel located at San Roque Street, City of Davao, with an area of 5,006 square meters.
Originally acquired during the marital life of Narciso de la Cerna and Eladia Bustamante, it was evidenced by Transfer Certificate of Title No. 2582.
Upon the death of Narciso de la Cerna on October 20, 1945, the surviving spouse and their two children, Lourdes and Melecio de la Cerna, executed an extra-judicial partition and settlement on August 26, 1946, dividing the property into undivided shares—one-half to the wife Eladia Bustamante and one-half to the children.

The extra-judicial partition was registered in the Office of the Register of Deeds of Davao on September 4, 1946, upon which a new title (Transfer Certificate of Title No. 2583) was issued.
Subsequently, in 1949, Melecio de la Cerna ceded his share to his sister Lourdes de la Cerna, with the cession recorded by the issuance of a new title under Transfer Certificate of Title No. T-1995.

On February 27, 1967, Aquilina and Apolinario de la Cerna, claiming to be children of Narciso de la Cerna by his alleged first wife, Eulalia Quesada, filed an action for partition and reconveyance against Lourdes de la Cerna before the Court of First Instance of Davao.
Their suit also involved a counterclaim for damages and joined their brother Antonio de la Cerna as a defendant due to his alleged unwilling acquiescence.

On June 1, 1967, the defendants, Lourdes de la Cerna and Miguel de la Cerna, filed separate answers, each containing identical affirmative defenses:

The property was the paraphernal property of Eladia Bustamante, acquired solely with her own capital.
The action was barred by prescription, as more than 21 years had elapsed since the issuance of the title to the property.
The complaint failed to state a valid cause of action.

During pre-trial proceedings on July 24, 1967, the defendants reiterated their defense of prescription by emphasizing that the period from the registration of the deed (September 4, 1946) to the filing of the complaint (February 27, 1967) far exceeded the prescribed period of four years.

After considering the defenses during a preliminary hearing, the trial court dismissed the case on July 28, 1967, solely on the ground that the action had prescribed.
The dismissal was premised on the fact that the adverse title was effectively established when the partition deed was registered and the new title was issued, thus constituting a constructive notice to all potential claimants.

The plaintiffs, Aquilina and Apolinario de la Cerna, moved for a reconsideration of the dismissal, arguing that the complaint should have proceeded to trial on its merits.
They contended that the dismissal on the basis of prescription, without adjudicating the substantive merits (particularly the alleged fraud in the execution of the partition), was an error.
Ultimately, the dispute centered on whether issues of fraudulent execution could override the clear effect of the registration and the consequent prescriptive bar.

Whether the dismissal of the complaint by the lower court, based on the defense of prescription, was correct and proper.

Specifically, whether the registration of the extra-judicial partition, and the issuance of subsequent titles, constituted a valid constructive notice that barred the action.
Whether the doctrine of prescription applies irrespective of allegations of fraud in the execution of the partition deed.

Whether the alleged fraud, if proven, would have tolled the running of the prescriptive period or revived the claim for partition and reconveyance.

Consideration of whether the fraud should be evaluated within the four-year period (for fraud) or ten-year period (for actions based on implications of constructive or implied trust).