Case Summary (G.R. No. L-19060)
Factual Background
Petitioners alleged that they were the legitimate children of Domingo Gerona and Placida de Guzman, and that Placida was a legitimate daughter of Marcelo de Guzman by his first wife, Teodora de la Cruz. After Teodora's death, Marcelo married Camila Ramos and fathered several children, who are the respondents. Marcelo died on September 11, 1945. On May 6, 1948, respondents executed an instrument styled an “extra-judicial settlement of the estate of the deceased Marcelo de Guzman,” representing themselves as the sole heirs and causing the cancellation of original transfer certificates of title and the issuance of new transfer certificates of title in the respondents’ names, each shown as owning a one-seventh interest in seven parcels. Petitioners averred that respondents thereby deprived them of an undivided one-eighth share in the properties, that the alleged fraud was discovered only shortly before institution of the action, and that respondents refused demands for reconveyance.
Trial Court Proceedings
Petitioners filed a complaint in the Court of First Instance of Bulacan seeking annulment of the extrajudicial settlement insofar as it excluded them, reconveyance of their one-eighth share, cancellation of respondents’ transfer certificates of title and issuance of new certificates reflecting petitioners’ shares, accounting of income, damages and attorney’s fees. Respondents answered by denying petitioners’ right as heirs on the ground that Placida was a spurious child and by pleading the bar of the statute of limitations. The trial court found that Placida was a legitimate child of Marcelo by his first marriage, that the disputed properties belonged to the conjugal partnership of Marcelo and his second wife Camila, and that petitioners’ action had prescribed; accordingly, the trial court dismissed the complaint without costs.
Court of Appeals Ruling
On appeal by petitioners, the Court of Appeals affirmed the judgment of the trial court and imposed costs against petitioners.
Issues Presented
The principal issues included whether an action for partition or reconveyance among co-heirs is barred by the statute of limitations when the defendants hold under an allegedly adverse title; whether the four-year prescriptive period applicable to actions seeking annulment of instruments for fraud begins to run only upon actual discovery of the fraud; and whether petitioners’ cause of action was timely given the dates of majority and minority of the individual petitioners.
Parties’ Contentions
Petitioners contended that as co-heirs they were not subject to prescription in a partition action, or, alternatively, that if the action were subject to prescription the four-year period began to run only from the date of actual discovery of respondents’ alleged fraud in 1956 or 1957, so that their suit filed in 1958 remained timely. Respondents maintained that Placida was a spurious child and denied petitioners’ heirship, and asserted that petitioners’ action was barred by the statute of limitations.
Supreme Court Ruling
The Supreme Court affirmed the judgment of the Court of Appeals, thus upholding dismissal of the complaint on prescription grounds, and directed that costs be taxed against petitioners.
Legal Basis and Reasoning
The Court observed that while, as a general rule, an action for partition among co-heirs does not prescribe, that rule applies only when defendants do not hold the property under an adverse title. The statute of limitations begins to run when the possessor asserts an adverse title. The respondents’ execution and registration of the extrajudicial settlement and their acquisition of new transfer certificates of title in their own names constituted an assertion of adverse title that excluded the petitioners from the estate. In effect, respondents set up a title hostile to petitioners and thereby started the running of the prescriptive period. The Court relied on prior authorities to the same effect, including Cordova vs. Cordova, L-9936, January 14, 1948, and the principle that registration of an instrument in the Registry of Deeds imparts constructive notice to the world.
Application of the Statute of Limitations to Fraud and Constructive Trust Remedies
The Court recognized that an action for reconveyance grounded on a constructive trust or fraud may be barred by prescription and that actions to annul instruments for fraud must be brought within four years from discovery of the fraud. The Court deemed that petitioners had constructive discovery of the alleged fraud on June 25, 1948, the date when the extrajudicial settlement was registered and the new transfer certificates of title were issued; registration constituted constructive notice. The Court noted contrary decisions but adopted the view that actions based on constructive or implied trusts may prescribe (citing Candelaria vs. Romero, L-12149, September 30, 1960, and Alzona vs. Capunita, L-10220, February 28, 1962), and that discovery for prescriptive purposes may be imputed by registration (citing Diaz v
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Case Syllabus (G.R. No. L-19060)
Parties and Procedural Posture
- Petitioners are Ignacio Gerona, Maria Concepcion Gerona, Francisco Gerona and Delfin Gerona, who sued as alleged forced heirs of Marcelo de Guzman through their mother, Placida de Guzman.
- Respondents are Carmen de Guzman, Jose de Guzman, Clemente de Guzman, Francisco de Guzman, Rustica de Guzman, Pacita de Guzman and Victoria de Guzman, who executed an extrajudicial settlement of the estate of Marcelo de Guzman.
- The action was filed in the Court of First Instance of Bulacan and the judgment of dismissal was affirmed by the Court of Appeals.
- The present appeal to the Supreme Court is by certiorari from the decision of the Court of Appeals affirming the trial court.
Key Factual Allegations
- Petitioners alleged that their mother, Placida de Guzman, died on August 9, 1941 and was a legitimate daughter of Marcelo de Guzman by his first wife, Teodora de la Cruz.
- Marcelo de Guzman allegedly died on September 11, 1945 and had subsequently married Camila Ramos, by whom respondents were begotten.
- Respondents executed a deed of "extrajudicial settlement of the estate of the deceased Marcelo de Guzman" on May 6, 1948 purporting that they were the sole surviving heirs.
- New transfer certificates of title to seven parcels originally in the name of the deceased were allegedly issued in the exclusive names of respondents in equal seventh shares following the extrajudicial settlement.
- Petitioners alleged discovery of the alleged fraud only in the year prior to instituting suit, and they demanded their share equal to one-eighth of the properties.
Relief Sought
- Petitioners prayed for annulment of the extrajudicial settlement insofar as it deprived them of a one-eighth share in the properties.
- Petitioners sought reconveyance of their share, cancellation of the transfer certificates issued to respondents and issuance of new certificates reflecting a 1/8th interest for petitioners and 7/8ths for respondents.
- Petitioners also demanded accounting for income, delivery of their lawful share, damages and attorney's fees.
Procedural History and Trial Findings
- The trial court found that Placida de Guzman was a legitimate daughter of Marcelo de Guzman by his first marriage.
- The trial court found that the properties in litigation belonged to the conjugal partnership of Marcelo de Guzman and his second wife, Camila Ramos.
- The trial court held that the action of petitioners was barred by the statute of limitations and dismissed the complaint without costs.
- The Court of Appeals affirmed the trial court's decision and assessed costs against petitioners.
Issues Presented
- Whether an action for partition or reconveyance among co-heirs is barred by the statute of limitations when co-heirs are excluded by an extrajudicial settlement and registration of title.
- Whether the statute of limitations, if applicable, began to run from the date of registration of the extrajudicial settlement or from the date of actual discovery of alleged fraud.
- How minority and attainment of majority affect the computation of the prescriptive period under the applicable provisions.
Contentions of the Parties
- Petitioners contended that actions for partition among co-heirs do not prescribe while the parties remain co-heirs and that the four-year prescriptive period did not run until actual discovery of the alleged fraud in 1956 or 1957.
- Respondents contended that Placida de Guzman was a spurious child and that the action was barred by