Title
Spouses Pascual vs. Court of Appeals
Case
G.R. No. 115925
Decision Date
Aug 15, 2003
Dispute over land ownership between niece and granddaughter; action barred by prescription due to 19-year delay; unprobated will invalidates claim.
spouses pascual
court of appeals
prescriptive period

Case Summary (G.R. No. 115925)

Factual Background

Consolacion Sioson acquired from her uncle Canuto Sioson by a written sale the latter’s ten-seventieth share in a parcel designated Lot 2 of Plan Psu 13245. Subdivision Plan Psd 34713 subdivided Lot 2 and, as certified by the Assistant Director of Lands, showed Lot Nos. 2-A and 2-E totaling 2,670 square meters in Canuto’s name. Under the KASULATAN dated September 26, 1956, Consolacion paid P2,250 for Canuto’s ten-seventieth share. Consolacion took possession, declared the land for taxation, and paid real estate taxes. On October 23, 1968, Felicidad and Beatriz, surviving children of Canuto, executed a JOINT AFFIDAVIT affirming the sale and identifying the sold lots as Lots 2-A and 2-E. The Register of Deeds of Rizal issued TCT No. (232252) 1321 to Consolacion on October 28, 1968 covering Lot Nos. 2-A and 2-E.

The Claim of Respondent

Remedios S. Eugenio-Gino claimed that Lot Nos. 2-A and 2-E were devised to her by her grandaunt Catalina Sioson in a LAST WILL dated May 29, 1964. Respondent maintained that the transfer to Consolacion was fraudulent because the area in TCT No. (232252) 1321 was twice the area that Canuto could have sold. On February 4, 1988, Remedios filed in the Regional Trial Court an action captioned “Annulment or Cancellation of Transfer Certificate [of Title] and Damages,” praying for cancellation of Consolacion’s title, issuance of title in her name, and damages.

Trial Court Proceedings

Petitioners moved to dismiss on prescription grounds, asserting that the action was grounded in fraud and therefore subject to the four-year prescriptive period for annulment actions based on mistake or fraud under Article 1391. The trial court initially denied the motion to dismiss on April 28, 1988, treating prescription as an evidentiary matter to be resolved at trial. At pre-trial Remedios clarified that she sought only Catalina’s ten-seventieth share, equal to one-half of the area covered by the issued title. The case was tried and evidence was received.

Ruling of the Trial Court

On November 26, 1990, the trial court dismissed Remedios’ complaint and awarded petitioners P10,000 as attorney’s fees and costs. The trial court held that Remedios’ action was an action for annulment based on fraud and thus subject to the four-year prescriptive period under Article 1391, which began to run from her actual discovery of the adverse title. The court found that Remedios had knowledge of the adverse title by November 19, 1982, when she testified in an ejectment suit brought by petitioners, and thus her complaint filed on February 4, 1988 was belated. The trial court also held that Remedios had no right of action under Catalina’s LAST WILL because the will had not been admitted to probate, invoking Article 838 of the Civil Code.

Ruling of the Court of Appeals

The Court of Appeals reversed on January 31, 1994. The appellate court characterized Remedios’ action as one to enforce an implied trust allegedly created when Consolacion registered the title. Applying a ten-year prescriptive period, the Court of Appeals counted the ten years from November 19, 1982, which it treated as Remedios’ actual notice of the adverse title, and concluded that the complaint filed on February 4, 1988 was timely. The appellate court also held that Catalina’s unprobated will did not preclude Remedios from seeking reconveyance because the will might later be admitted to probate, and it ordered the Register of Deeds to place TCT No. (232252) 1321 in Remedios’ name as executrix of Catalina’s will. The Court of Appeals awarded P50,000 moral damages, P20,000 exemplary damages, and P20,000 attorney’s fees.

Issues Presented on Review

Petitioners urged that the Court of Appeals erred by holding that Remedios’ cause of action was not barred by prescription, by finding that Remedios had title or proved title, by ordering the entire property covered by TCT No. (232252) 1321 to be placed in Remedios’ name despite her claim to only one-half, and by awarding moral and exemplary damages and attorney’s fees. The pivotal questions addressed by the Supreme Court were whether prescription bars Remedios’ action and whether Remedios is a real party-in-interest.

The Supreme Court’s Ruling

The Supreme Court granted the petition. The Court held that Remedios’ action is barred by prescription and that she is not a real party-in-interest. The Court set aside the Court of Appeals Decision and Resolution and dismissed Remedios’ complaint dated February 2, 1988.

Legal Basis and Reasoning on Prescription

The Court analyzed the nature of Remedios’ action and the applicable prescriptive period. It noted that when a claim is to annul a voidable contract for mistake or fraud under Article 1390, the four-year prescriptive period of Article 1391 applies and begins to run from discovery of the mistake or fraud. However, Remedios did not seek annulment of the KASULATAN or attempt to void the sale of the ten-seventieth share. Rather, she contested the inclusion of an extra 1,335 square meters in the registered title and sought reconveyance of that excess. The Court determined that her claim sounded in an implied trust under Article 1456, because property allegedly obtained through fraud or mistake renders the obtainer a trustee for the benefit of the person from whom the property comes. The Court therefore applied the ten-year prescriptive period of Article 1144, consistent with settled jurisprudence that actions to recover property obtained by fraud or mistake giving rise to an implied trust prescribe in ten years.

The Court held that the ten-year period runs from the repudiation of the implied trust, which occurs upon registration of the deed or issuance of the title. Because Consolacion registered TCT No. (232252) 1321 on October 28, 1968, Remedios’ complaint filed on February 4, 1988 was plainly beyond the ten-year period. The Court rejected the Court of Appeals’ reliance on Adille v. Court of Appeals to count the prescriptive period from actual notice rather than from registration. The Court recited that Adille involved particular fraudulent conduct that warranted deviation from the general rule. The Court found no comparable proof of specific fraudulent acts in this case. The Court further observed that even if the ten-year period were counted from actual notice, Remedios had actual notice by November 8, 1977, when Consolacion sought and obtained exclusion of the disputed lots from Catalina’s inventory in the probate proceedings, and Remedios failed to appeal that order; accordingly, her complaint filed on February 4, 1988 was also late on that reckoning.

Legal Basis and Reasoning on Real Party-in-Interest

The Court held that Remedios was not the real party-in-interest because her asserted title derived from Catalina’s LAST WILL, and that will had not been admitted to probate. Pursuant to Article 838, no will passes property unless it is proved and allowed in accordance with the Rules of Court. The Court noted that the probate court had not admitted Catalina’s will and that Remedios admitted at trial that Special Proceedings Case No. C-208 remained pending. Consequently, Remedios had acquired no right under the will and lacked capacity to press

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