Title
Pascua vs. Florendo
Case
G.R. No. L-39047
Decision Date
Apr 30, 1985
Siblings contested a fraudulent 1951 land sale by their brother, discovered in 1973; court dismissed their 1973 reconveyance claim due to prescription and indefeasible title.
reconveyance of land
statute of limitations
indefeasible title

Case Summary (G.R. No. 7317)

Factual Background

Petitioners claimed that during the lifetime of Jordan Pascua and Magdalena Dumadag, they begot five children: Alberto, Alejandra, Crispina, Martin, and Sotera. Their parents were already dead, as were Alejandra. Petitioners alleged that Jordan and Magdalena acquired the subject parcel, described in paragraph 3 of the complaint, and that their brother Martin Pascua later sold the property to Clemente Castro.

Petitioners asserted that fraud attended the sale: they alleged that the signature of Alberto Pascua appearing in the deed of sale was not genuine and that the genuine signature appeared in a separate exhibit. They similarly claimed that the signature of Sotera Pascua appearing in the deed was not theirs, and that neither they nor their co-plaintiffs gave consent. They also alleged that they did not appear before the notary public. They further alleged that they were deprived of the land’s fruits for more than twenty years and that their land had yielded palay valued at P30.00 per sack.

The trial court found, based on the record and the petitioners’ ex-parte evidence, that the deed of sale was executed on May 8, 1951, in favor of Clemente Castro, married to Juliana Orteza, with the sale attributed to Martin Pascua. The court also found that petitioners and respondents had been neighbors for a long period, that respondents had possessed the land for more than twenty years, and that petitioners had admitted dispossession and damages for more than twenty years.

Trial Court Proceedings

After respondents filed a motion to dismiss in lieu of an answer, the CFI denied the motion after finding that the grounds relied upon did not appear on the face of the complaint. Respondents were then declared in default for failure to file an answer within the reglementary period. Petitioners thereafter proceeded to present evidence ex-parte.

Upon receiving petitioners’ evidence, the trial court ruled that there was fraud committed by Martin Pascua in selling the entire property to respondents, excluding petitioners’ shares. The trial court nevertheless held that the action based on fraud was subject to a limitations period. It relied on the rule that an action for relief grounded on fraud “may be brought only within four years from the discovery of the fraud” under Article 1391 of the New Civil Code and Section 43(c) of Act 190.

The trial court concluded that because the deed of sale was executed on May 8, 1951, and the complaint was filed on May 31, 1973, it was “hard to believe” that petitioners did not know about the deed for that long. It thus held that the action was filed twenty-two years after the execution of the deed and had therefore long prescribed.

The Petitioners’ Contentions

Petitioners argued that the CFI committed grave abuse of discretion when it dismissed the action on prescription after it had earlier denied respondents’ motion to dismiss on the same ground. They invoked an estoppel theory, contending that because the trial court had denied dismissal previously, it could no longer pass upon prescription.

On the substantive issue, petitioners contended that the trial court’s finding of their alleged knowledge of the sale “about twenty years ago” was based only on surmise and conjecture. They maintained that they only learned in 1973 about the deed executed in 1951 because Clemente Castro showed them the deed at the Agrarian Office in that year. From this, they argued that prescription should be counted from their knowledge in 1973, not from the date of execution of the deed.

Petitioners also insisted that the CFI had no alternative but to grant the relief prayed for in the complaint because respondents had been declared in default, relying on the tenor of the summons and on Rule 18, Section 1 of the Rules of Court on judgment by default.

The Court’s Ruling on the Estoppel and Prescription Issues

The Supreme Court rejected the estoppel theory. It observed that the CFI denied the initial motion to dismiss because the grounds did not appear on the face of the complaint. The Supreme Court emphasized that the trial court had made no finding that the allegation of prescription had no merit. Hence, the trial court was not estopped from later passing upon the issue of prescription. The Court further ruled that the issue had not been adjudicated on the merits and that res judicata had not yet attached.

On the factual and limitations issue, the Supreme Court found petitioners’ claim that they learned of the sale only in 1973 to be highly improbable. It agreed with the trial court’s reasoning that it was inconceivable petitioners did not know of the purchase given their long-standing neighbor relationship with respondents and their acknowledgment that respondents deprived them of the fruits of the land for more than twenty years. It also noted petitioners’ admission that their parents had died more than twenty-five years earlier, yet the children never exerted any effort to partition or act on ownership in a manner consistent with an absence of knowledge of the transaction.

More importantly, the Court relied on the fact that after respondents acquired the land, respondents worked to secure an Original Certificate of Title through a free patent application in 1958, which was fifteen years before petitioners filed suit. The Court deemed it clear that prescription had already set in.

The Supreme Court then applied doctrine on the indefeasibility and irrevocability of certificates of title issued under government grants. It quoted from Iglesia ni Cristo v. Hon. Judge, Court of First Instance of Nueva Ecija, Br. I and referenced Labora v. Dayang-hirang for the rule that once a patent is issued and recorded and the certificate of title is issued to the grantee, the land is brought within the operation of the Land Registration Act and, after the lapse of one year from issuance, the title becomes irrevocable and indefeasible.

Accordingly, the Court held that respondents’ title became indefeasible after the one-year period, which had expired in 1959. It further held that even assuming fraud on the part of Martin Pascua, petitioners were still time-barred because an action for reconveyance based on fraud must be filed within four years from discovery, and such discovery is deemed to have taken place at the latest when the petitioners received original certificates of title because registration constitutes constructive notice.

The Court invoked Balbin v. Medalla and reiterated that discovery of fraud is deemed to occur when original certificates of title issue through homestead or free patent grants. It tied the latest patent date to the record: the Court noted that the latest patent was issued on October 14, 1959, and thus any action for reconveyance should have been filed on or before October 14, 1963. Since petitioners’ complaint for reconveyance and annulment of titles with damages was filed only on August 30, 1973, the Court held that more than fourteen years had elapsed from issuance of the respective titles of defendants. The action, as to reconveyance of land titled in defendants’ names, was therefore prescribed.

The Court’s Ruling on Default and the Right to Relief

On petitioners’ second issue, the Supreme Court ruled that the default did not automatically entitle petitioners to judgment in the exact terms of their prayer. It cited Rule 18, Section 1 on judgment by default, noting that while the rule requires the court to proceed to receive the plaintiff’s evidence and render judgment granting relief as the complaint and facts proven may warrant, nothing in the rule or in the summons stated that the plaintiff was automatically entitled to the relief prayed for.

The Supreme Court reasoned that the trial court still must ascertain whether the evidence presented and the facts proven by the non-defaulting party justify the grant of relief. It held that a contrary approach would render the requirement of evidence meaningless and would contradict due process considerations.

The Court strengthened its position through Lint Tanhu v. Ramolete, emphasizing that default does not equate to an admission of the plaintiff’s cause of action. It underscored that a defaulted defendant is not thrown out of court and that judgments must remain in accordance with law, with only competent legal evidence considered. It further stated that if the evidence presented is not sufficient to justify judgment for the plaintiff, the complaint must be dismissed, and that judgments must not exceed what is prayed for.

Applying this framework to the record, the Supreme Court held that based on the ex-parte evidence and petitioners’ own allegations, the only judgment warranted was the dismissal of the complaint because it was barred by the statute of limitations.

Legal Basis and Reasoning

The Court’s reasoning combined (a) procedural propriety on the non-attachment of estoppel and res jud

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