Case Summary (A.M. No. RTJ-99-1439)
Background of the Case
On June 11, 1956, Victorino Alfonso, Ciriaca Alfonso, and Paciencia Alfonso initiated an action in the Court of First Instance of Rizal against Agueda Santos and Santiago Cruz to annul an extrajudicial settlement and a deed of sale linked to a parcel of land. The complaint was later amended to include Susana Realty, Inc., the entity to which the property was sold. Agueda Santos and Santiago Cruz submitted their answers, while Susana Realty, Inc. moved to dismiss the complaint based on several arguments, including the plaintiffs' lack of cause of action.
Court Proceedings and Amended Complaint
The trial court permitted the substitution of Geronimo Avecilla for the original plaintiffs on September 1, 1956, following his appointment as judicial administrator on June 8, 1956. The amended complaint alleged that the land in question was conjugal property owned by Placido Alfonso and Agueda Santos. It claimed fraud by Agueda Santos, who purportedly executed an extrajudicial deed of settlement without the rightful heirs' knowledge.
Findings of the Trial Court
The trial court dismissed the complaint against Susana Realty, Inc., determining that the plaintiffs failed to demonstrate a cause of action against the entity. The court noted that the complaint did not indicate any bad faith or knowledge of fraud on the part of Susana Realty, Inc., which had purchased the land in good faith. The court cited Section 55 of Act 496, which protects innocent purchasers for value against claims concerning the original owner's title.
Legal Framework and Article of Law
The trial court referenced the principles of land registration which assert that registration serves as notice to the entire world. Consequently, the alleged fraudulent transfer's effect on the title operates against all claims unless the purchaser had knowledge of the fraud. Thus, the action against Susana Realty, Inc. could not prosper based on the claims presented in the amended complaint.
Prescription of Action
The second basis for dismissal hinged on the prescription of the action. The trial court held that the prescriptive period to contest a fraudulent sale began upon the discovery of the fraud, which, in this case, was the registration date of the fraudulent document in 1947. The plaintiffs' failure to act within the four-year period stipulated under Section 43 of Act No. 190 resulted in the loss of their right to bring forth the action.
Discussion on Constructive Trust
Petitioner argued that a constructive trust was established in favor of the heirs due to Agueda Santos' fraudulent actions, allowing them to claim the property regardless of time elapsed. However, the court clarified that such claims could only be directed against those responsible for the fraud and could not be asserted against an innocent purchaser for value, such as Susana Realty, Inc.
Denial of Motion for Amendment
Following the dismissal motion by Susana Realty, Inc., the plaintiffs sou
...continue readingCase Syllabus (A.M. No. RTJ-99-1439)
Case Background
- The action originated on June 11, 1956, when Victorino Alfonso, Ciriaca Alfonso, and Paciencia Alfonso filed a lawsuit in the Court of First Instance of Rizal against Agueda Santos and Santiago Cruz.
- The objective was to annul an extrajudicial settlement and a deed of sale concerning a parcel of land allegedly owned by Placido Alfonso, the deceased husband of Agueda Santos.
- The complaint was later amended to include Susana Realty, Inc. as a defendant due to its subsequent acquisition of the property.
Proceedings and Initial Defenses
- Agueda Santos and Santiago Cruz submitted their answers on August 1, 1956, while Susana Realty, Inc. filed a motion to dismiss the case.
- The grounds for dismissal included:
- Lack of cause of action.
- Prescription of the cause of action.
- Lack of legal capacity of the plaintiffs to sue.
- On September 1, 1956, Geronimo Avecilla was substituted as the petitioner after being appointed as the judicial administrator of the estate of Placido Alfonso.
Court's Dismissal of Complaint
- On September 14, 1956, the court granted Susana Realty, Inc.'s motion to dismiss the complaint, citing:
- The absence of a cause of action against Susana Realty, Inc. since there were no allegations of knowledge of fraud in their acquisition of the property.
- The court's finding that the land was covered by a Torrens title, which indicated no encumbrances.
Allegations of Fraud
- The amended complaint alleged that:
- Agueda Santos fraudulently claimed sole heirs