AYALA INC VS.

RAY BURTON CORP

GR No. 163075
January 23, 2006
FACTS: On December 22, 1995, Ayala Inc. and Ray Burton Corp. entered into a contract denominated
as a Contract to Sell, with a Side Agreement of even date. In these contracts, petitioner agreed to sell
to respondent a parcel of land situated at Muntinlupa City. The purchase price of the land is payable as
follows:
On contract date: 26%, inclusive of option money
Not later than 1-6-96: 4%
In consecutive quarterly installments for a period of 5 years: 70%
Respondent paid thirty (30%) down payment and the quarterly amortization. However in 1998,
respondent notified petitioner in writing that it will no longer continue to pay due to the adverse effects of
the economic crisis to its business. Respondent then asked for the immediate cancellation of the contract
and for a refund of its previous payments as provided in the contract.
Petitioner refused to cancel the contract to sell. Instead, it filed with the RTC Makati City, a complaint for
specific performance against respondent, demanding from the latter the payment of the remaining unpaid
quarterly installments inclusive of interest and penalties.
Respondent, in its answer, denied any further obligation to petitioner, asserting that it (respondent)
notified the latter of its inability to pay the remaining installments. Respondent invoked the provisions of
paragraphs 3 and 3.1 of the contract to sell providing for the refund to it of the amounts paid, less interest
and the sum of 25% of all sums paid as liquidated damages.
The trial court rendered a Decision in favor of Ayala and holding that respondent transgressed the law in
obvious bad faith. It ordered the defendant ordered to pay Ayala the unpaid balance, interest agreed
upon, and penalties. Defendant is further ordered to pay plaintiff for attorneys fees and the costs of suit.
Upon full payment of the aforementioned amounts by defendant, plaintiff shall, as it is hereby ordered,
execute the appropriate deed of absolute sale conveying and transferring full title and ownership of the
parcel of land subject of the sale to and in favor of defendant.
On appeal, the CA rendered a Decision reversing the trial courts Decision. Hence, the instant petition for
review on certiorari.
ISSUE:
1. WON respondents non-payment of the balance of the purchase price gave rise to a cause of action on
the part of petitioner to demand full payment of the purchase price; and
2. WON Ayala should refund respondent the amount the latter paid under the contract to sell.
HELD: The petition is denied. The CA decision is affirmed.
At the outset, it is significant to note that petitioner does not dispute that its December 22, 1995
transaction with respondent is a contract to sell. Also, the questioned agreement clearly indicates that it
is a contract to sell, not a contract of sale. Paragraph 4 of the contract provides:
4. TITLE AND OWNERSHIP OF THE PROPERTY. The title to the property shall transfer to the
PURCHASER upon payment of the balance of the Purchase Price and all expenses, penalties and other
costs which shall be due and payable hereunder or which may have accrued thereto. Thereupon, the
SELLER shall execute a Deed of Absolute Sale in favor of the PURCHASER conveying all the SELLERS
rights, title and interest in and to the Property to the PURCHASER
1. NO. Considering that the parties transaction is a contract to sell, can petitioner, as seller, demand
specific performance from respondent, as buyer?
Blacks Law Dictionary defined specific performance as (t)he remedy of requiring exact performance of a
contract in the specific form in which it was made, or according to the precise terms agreed upon. The
actual accomplishment of a contract by a party bound to fulfill it.
Evidently, before the remedy of specific performance may be availed of, there must be a breach of the
contract.
Under a contract to sell, the title of the thing to be sold is retained by the seller until the purchaser
makes full payment of the agreed purchase price. The non-fulfillment by the respondent of his obligation
to pay, which is a suspensive condition to the obligation of the petitioners to sell and deliver the title to the
property, rendered the contract to sell ineffective and without force and effect; failure of which is not really
a breach, serious or otherwise, but an event that prevents the obligation of the petitioners to convey title
from arising, in accordance with Article 1184 of the Civil Code .
The parties stand as if the conditional obligation had never existed. Article 1191 of the New Civil Code will
not apply because it presupposes an obligation already extant. There can be no rescission of an
obligation that is still non-existing, the suspensive condition not having happened Thus, a cause of action
for specific performance does not arise.
Here, the provisions of the contract to sell categorically indicate that respondents default in the payment
of the purchase price is considered merely as an event, the happening of which gives rise to the
respective obligations of the parties mentioned therein, thus:
3. EVENT OF DEFAULT. The following event shall constitute an Event of Default under this contract: the
PURCHASER fails to pay any installment on the balance, for any reason not attributable to the SELLER,
on the date it is due, provided, however, that the SELLER shall have the right to charge the PURCHASER
a late penalty interest on the said unpaid interest at the rate of 2% per month computed from the date the
amount became due and payable until full payment thereof.

3.1. If the Event of Default shall have occurred, then at any time thereafter, if any such event shall then be
continuing for a period of six (6) months, the SELLER shall have the right to cancel this Contract without
need of court declaration to that effect by giving the PURCHASER a written notice of cancellation sent to
the address of the PURCHASER as specified herein by registered mail or personal delivery. Thereafter,
the SELLER shall return to the PURCHASER the aggregate amount that the SELLER shall have
received as of the cancellation of this Contract, less: (i) penalties accrued as of the date of such
cancellation, (ii) an amount equivalent to twenty five percent (25%) of the total amount paid as liquidated
damages, and (iii) any unpaid charges and dues on the Property. Any amount to be refunded to the
PURCHASER shall be collected by the PURCHASER at the office of the SELLER. Upon notice to the
PURCHASER of such cancellation, the SELLER shall be free to dispose of the Property covered hereby
as if this Contract had not been executed. Notice to the PURCHASER sent by registered mail or by
personal delivery to its address stated in this Contract shall be considered as sufficient compliance with
all requirements of notice for purposes of this Contract.14
Therefore, in the event of respondents default in payment, petitioner, under the above provisions of the
contract, has the right to retain an amount equivalent to 25% of the total payments. As stated by the CA,
petitioner having been informed in writing by respondent of its intention not to proceed with the contract
prior to incurring delay in payment of succeeding installments, the provisions in the contract relative to
penalties and interest find no application.
2. YES. The CA is correct that with respect to the award of interest, petitioner is liable to pay interest of
12% per annum upon the net refundable amount due from the time respondent made the extrajudicial
demand upon it to refund payment under the Contract to Sell, pursuant to our ruling in Eastern Shipping
Lines, Inc. v. Court of Appeals.
NOTES:
1. The real nature of a contract may be determined from the express terms of the written agreement and
from the contemporaneous and subsequent acts of the contracting parties. In the construction or
interpretation of an instrument, the intention of the parties is primordial and is to be pursued. 5 If the terms
of the contract are clear and leave no doubt upon the intention of the contracting parties, the literal
meaning of its stipulations shall control. 6 If the words appear to be contrary to the evident intention of the
parties, the latter shall prevail over the former. 7 The denomination or title given by the parties in their
contract is not conclusive of the nature of its contents.
2. Lim v. Court of Appeals (182 SCRA 564 [1990]) is most illuminating. In the said case, a contract to sell
and a contract of sale were clearly and thoroughly distinguished from each other.
CONTRACT TO SELL
the ownership is reserved in the seller and is not to pass until the full payment of the purchase price
is made
full payment is a positive suspensive condition.
the title remains in the vendor if the vendee does not comply with the condition precedent of making
payment at the time specified in the contract
CONTRACT OF SALE
the title passes to the buyer upon the delivery of the thing sold
non-payment of the price is a negative resolutory condition
vendor has lost and cannot recover the ownership of the property until and unless the contract of sale is
itself resolved and set aside

Eliseo Fajardo Jr., vs Freedom to Build Inc.

G. R. No. 134692 August 1, 2000
Facts: Freedom to Build Inc., an owner-developer and seller of low-cost housing sold to petitionerspouses a house and lot in the De La Costa Homes, in Barangka, Marikina, Metro Manila. The Contract
to sell executed between the parties, contained a Restrictive Covenant providing certain prohibitions, to
wit:
Easements. For the good of the entire community, the homeowner must observe a two-meter easement
in front. No structure of any kind (store, garage, bodega, etc.) may be built on the front easement.
Upward expansion. A second storey is not prohibited. But the second storey expansion must be placed
above the back portion of the house and should not extend forward beyond the apex of the original
building.
Front expansion: 2nd Storey: No unit may be extended in the front beyond the line as designed and
implemented by the developer in the 60 sq. m. unit. In other words, the 2nd floor expansion, in front, is 6
meters back from the front property line and 4 meters back from the front wall of the house, just as
provided in the 60 sq. m. units.
The above restrictions were also contained in Transfer Certificate of Title No. N-115384 covering the lot
issued in the name of petitioner-spouses.
The controversy arose when the petitioners despite repeated demand from the respondent, extended the
roof of their house to the property line and expanded the second floor of their house to a point directly
above the original front wall. Respondent filed before the RTC an action to demolish the unauthorized
structures.
The RTC rendered a judgment against the petitioner ordering them to immediately demolish and remove
the extension of their expanded housing unit that exceeds the limitations imposed by the Restrictive
Covenant, otherwise the Branch Sheriff of this Court will execute the this decision at the expense of the
defendants.
On appeal, the CA affirmed the decision of the RTC. Hence, this petition for review.
Issue: Whether or not the for the lack of a specific provision, prescribing the penalty of the demolition in
the Restrictive Covenant in the event of the breach thereof, the prayer of the respondent to demolish the
structure should fail.
Ruling:
The Court held that the argument of the petitioner-spouses has no merit; Article 1168 of the New Civil
Code states that: When the obligation consists in not doing and the obligor does what has been
forbidden him, it shall be undone at his expense.
This Court is not unaware of its ruling in Ayala Corporation vs. Ray Burton Development Corporation,
which has merely adjudged the payment of damages in lieu of demolition. In the aforementioned case,
however, the elaborate mathematical formula for the determination of compensatory damages which
takes into account the current construction cost index during the immediately preceding 5 years based on
the weighted average of wholesale price and wage indices of the National Census and Statistics Office
and the Bureau of Labor Statistics is explicitly provided for in the Deed of Restrictions entered into by the
parties. This unique and peculiar circumstance, among other strong justifications therein mentioned, is not
extant in the case at bar.
In sum, the Court holds that since the extension constructed exceeds the floor area limits of the
Restrictive Covenant, petitioner spouses can be required to demolish the structure to the extent that it
exceeds the prescribed floor area limits.

Wherefore, the assailed decision of the Court of Appeals is AFFIRMED. No costs.

SO ORDERED.
FROM ATTY DOBLADA^^

Download Vda. de Bacaling vs. Laguna

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Vda. de Bacaling vs. Laguna 54 SCRA 243 Facts: Private respondent Hector Laguda is the
registered owner of a residential land where petitioner and her late husband, Dr. Ramon Bacaling,
constructed a residential house Unable to pay the lease rental an action for ejectment. The filing of
said case spawned various court suits such as petition for certiorari, which further prolong the
litigation process. Issue: Should the petitioners counsel deserved condemnation before SC.
Held: Yes. The present petition smacks of a dilatory tactic and a frivolous attempt resorted to by
petitioner to frustrate the prompt termination of the ejectment case and to prolong litigation
unnecessarily. Such conduct on the part of petitioner and her counsel deserves the vigorous
condemnation of this Court, because it evinces a flagrant misuse of the remedy of certiorari which
should only be resorted to in case of lack of jurisdiction or grave abuse of discretion by a inferior
court. A recourse of this kind unduly taxes the energy and patience of courts and simply wastes the
precious time that they could well devote to really meritorious cases.

(Sulo

sa

Nayon,

Inc.

vs.

Nayong

Filipino

Foundation)

The choice belongs to the owner of the land, a rule that accords with the principle of
accession, i.e., that the accessory follows the principal and not the other way
around. However, even as the option lies with the landowner, the grant to him,
nevertheless, is preclusive. He must choose one.
FLOREZA v EVANGELISTA
[96 SCRA 130 (February 21, 1980)]Nature: Petition for review on certiorari of the decision of the
CA.Ponente: J. Melencio-HerreraFacts:

The Evangelistas were the owner of a residential lot in Rizal with an area of 204.08 sq. m.
assessed at P410.

May 1945: Evangelistas borrowed P100 from Floreza.

November 1945: Floreza occupied the residential lot and built a house of lightmaterial (barongbarong) with the consent of the Evangelistas.

Additional Loans made by the Evangelistas: Sept. 1946 P100, August 1947 P200, January
1949 P200, April 1949 P140. TOTAL = P740 (including firstloan)

January 1949: Floreza demolished the house of light material and constructedone of strong
material assessed at P1400. Floreza has not been paying any rentals since the beginning of
their transactions.

August 1949: Evangelistas sold, with a right to repurchase within 6 years, their land
to Floreza for P1000.

Seven months before the expiry of the repurchase period, the Evangelistas were able
to pay in full.

Floreza refused to vacate the lot unless he was first reimbursed for the valueof the house he
built.

Evangelistas filed a complaint. CFI ruled based on Art, 448 of the Civil Codesaying that
Evangelistas have the choice between purchasing the house or selling the land to
Floreza.

CA ruled that Art. 448 was inapplicable and that Floreza was not entiled to t h e
reimbursement of his house and could remove the same at his
o w n expense.Issue:
1.WON Floreza was entitled to reimbursement of the cost of his house.
NO.2.WON he (his heirs who replaced him) should pay rental of the land.
YES.Held/Ratio:1 . I s s u e o f r e i m b u r s e m e n t i s n o t m o o t b e c a u s e i f
F l o r e z a h a s n o r i g h t o f retention, then he must pay damages in the form of
rentals.Agree with CA that Art. 448 is inapplicable because it applies only when thebuilder is in
good faith (he believed he had a right to build).Art. 453 is also n o t a p p l i c a b l e
b e c a u s e i t r e q u i r e s b o t h o f t h e p a r t i e s t o b e i n b a d f a i t h . Neither is Art. 1616
applicable because Floreza is not a vendee a retro
. The h o u s e w a s a l r e a d y c o n s t r u c t e d i n 1 9 4 5 ( l i g h t m a t e r i a l s ) e v e n b e f o r e
t h e pacto de retro was entered into in 1949.Floreza cannot be classified as a builder in
good faith nor a vendee a retro,who made useful improvements during the pacto de retro ,
he has no right to reimbursement of the value of the house, much less to the retention
of the premises until he is paid.
His rights are more akin to a usufructury under Art. 579, who may make onthe
property useful improvements but with no right to be indemnified thereof,He may, however,
remove such improvements should it be possible to do sowithout damage to the
property.2 . F r o m t h e t i m e t h e r e d e m p t i o n p r i c e w a s p a i d i n J a n u a r y 3 , 1 9 5 5 ,
F l o r e z a s right to use the residential lot without rent ceased. He should be held liablefor
damages in the form of rentals for the continued use of the lot for P10 monthly from
January 3, 1955 until the house was removed and the propertyvacated by Floreza or
his heirs. Judgment affirmed with modification

Bailon-Casilao v. CA (1988)Petitioners: Delia Bailon-Casilao, Luz Paulino-Ang, Emma PaulinoYbanez, Nilda Paulino-Tolentino, and Sabina BailonRespondents: CA and Celestino
AfablePonente: Cortes, J.

The fate of petitioners' claim over a parcel of land rests ultimately on a determination of whether
or not said petitioners arechargeable with such laches as may effectively bar their present
action.

There is a parcel of land in the names of the Bailons (Rosalia, Gaudencio, Sabina Bernabe,
Nenita and Delia) as co-owners, each with a 1/6 share.
o
Gaudencio and Nenita are now dead, (Nenita being represented in this case by her children)
o
Bernabe went to China and had not been heard from since

It appears that Rosalia and Gaudencio sold a portion of the land to Donato Delgado.

Rosalia alone, then sold the remainder of the land to Ponciana Aresgado de Lanuza.
o
On the same date, Lanuza acquired from Delgado land which the Delgado had earlier acquired
from Rosaliaand Gaudencio.

Husband John Lanuza, acting under a special power of attorney given by his wife, Ponciana,
sold the two parcels of landto Celestino Afable, Sr.

In all these transfers, it was stated in the deeds of sale that the land was not registered under
the provisions of Act No.496 when the fact is that it is.
o

It appears that the land had been successively declared for taxation first, in the name of Ciriaca
Dellamas,mother of the co-owners, then in the name of Rosalia Bailon, then in that of Donato
Delgado, then in Poncianade Lanuza's name, and finally in the name of Celestino Afable, Sr.

The petitioners in this case, the Bailons, filed a case for recovery of property against Celestino
Afable.

In his answer, Afable claimed that he had acquired the land in question through prescription and
said that the Bailons areguilty of laches.

LC declared Afable co-owner because he validly bought 2/6 of the land (the shares of Rosalia
and Gaudencio)

CA affirmed. Prescription does not apply against the Bailons because they are co-owners of the
original sellers. But, anaction to recover may be barred by laches.
o
CA held the Bailons guilty of laches and dismissed their complaintIssue: Applicability of the
doctrine of lachesRatio:

Initially, a determination of the effect of a sale by one or more co-owners of the entire property
held in common without theconsent of all the co-owners and of the appropriate remedy of the
aggrieved co-owners is required.

The rights of a co-owner of a certain property are clearly specified in NCC 493:

Art. 493. Each co-owner shall have

the full ownership of his part
and of the acts and benefits pertaining thereto, and hemay therefore
alienate assign or mortgage
it and even substitute another person in its enjoyment, except when personalrights are involved.
But the effect of the alienation or mortgage, with respect to the co-owners, shall be limited to
the portion which may be allotted to him in the division upon the termination of the coownership

SC has already ruled in other cases that even if a co-owner sells the whole property as his, the
sale will affect only hisown share but not those of the other co-owners who did not consent to
the sale
o
By virtue of the sales made by Rosalia and Gaudencio, which are valid with respect to their
proportionateshares, and the subsequent transfers which culminated in the sale to private
respondent Celestino Afable, Afable thereby became a co-owner of the disputed parcel of land

Since a co-owner is entitled to sell his undivided share, a sale of the entire property by one coowner without the consentof the other co-owners is not null and void.
o
However, only the rights of the co-owner-seller are transferred, thereby making the buyer a coowner of theproperty.Re: Proper action

The proper action in cases like this is not for the nullification of the sale or for the recovery of
possession but the divisionof the common property

Neither recovery of possession nor restitution can be granted since the buyers are legitimate
possessors in jointownership of the common property claimedRe: Prescription

Here, prescription cannot be invoked.

Pursuant to NCC 494, no co-owner shall be obliged to remain in the co-ownership. Such coowner
may demand at anytime the partition of the thing owned in common
, insofar as his share is concerned.

In Budiong v. Bondoc
, SC has interpreted that provision to mean that the action for partition is imprescriptible or
cannotbe barred by prescription. For NCC 494 explicitly declares: No prescription shall lie in
favor of a co-owner or co- heir solong as he expressly or impliedly recognizes the co-ownership.

Also, the disputed parcel of land being registered under the Torrens System, the express pr
ovision of Act No. 496 that n
otitle to registered land in derogation to that of the registered owner shall be acquired by
prescription or adverse
possession
is applicable.

Prescription will not lie in favor of Afable as against the Bailons who remain the registered
owners of the parcel of land.
Re: Argument of Bailons that as to the children who represent their deceased mother, Nenita,
prescription lies

It is argued, that as to the children who are not the registered co-owners but merely represent
their deceased mother,prescription lies. (citing Pasion v. Pasion: "the imprescriptibility of a
Torrens title can only be invoked
by the person in whose name the title is registered"
and that
'one who is not the registered owner of a parcel of land cannot invoke imprescriptibility of action
to claim.'

Reliance on the previous case is wrong.

o
The ruling there applies only against transferees
other than
direct issues or heirs or to complete strangers. Thereason for that is: if prescription is unavailing
against the registered owner, it must be equally unavailing againstthe
owners
hereditary successors, because they merely step into the shoes of the decedentRe: Laches

Laches is also unavailing as a shield against the action of petitioners Bailon.

o
There are 4 basic elements of laches1) Conduct on the part of the defendant or of one under
whom he claims, giving rise to the situation of whichcomplaint is made and for which the
complainant seeks a remedy;2) Delay in asserting the corporations complainant's
rights, the complainant having had knowledge or noticeof the defendant's conduct and having
been afforded an opportunity to institute suit;3) Lack of knowledge or notice on the part of the
defendant that the complainant would assert the right onwhich he bases his suit; and,4) Injury or
prejudice to the defendant in the event relief is accorded to the complainant, or the suit is not
heldto be barred
o
First and last elements are present.
o
Second and third elements are missing.

The second element speaks of delay in asserting the complainant's rights.

o
However, the mere fact of delay is insufficient to constitute, laches.
o
It is required that (1) complainant must have had
knowledge of the conduct of defendant or of one under whom he claims
and (2) he must have been afforded an
opportunity to institute suit
.
o
This court has pointed out that laches is not concerned with the mere lapse of time.


Laches is defined as the failure or neglect, for an unreasonable length of time to do that which
by exercising due diligencecould or should have been done earlier; it is negligence or omission
to assert a right within a reasonable time warranting apresumption that the party entitled to
assert it either has abandoned it or declined to assert it.
o
The doctrine of "laches" or of "stale demands" is based upon grounds of public policy which
requires for thepeace of society, the discouragement of stale claims and unlike the statute of
limitations, is
not a mere question of time but is principally a question of inequity or unfairness
of permitting a right or claim to be enforced or asserted.

While there was delay in asserting

the Bailons
rights, such delay was not attended with any knowledge of the sale nor with any opportunity to
bring a suit.
o
In the first place, the Bailons had no notice of the sale made by their eldest sister.
o
In the second place, they were not afforded an opportunity to bring suit because they were kept
in the darkabout the transactions entered into by their sister. It was only when Delia returned
that she found out about thesales and immediately, she and her siblings filed the present action
for recovery of property.

The third element of laches is absent.

o
There was no lack of knowledge
o
It is actually Afable who is guilty of bad faith in purchasing the property as he knew that the
property was co-owned by six persons and yet, there were only two signatories to the deeds of
sale and no special authorizationto self was granted to the two sellers by the other co-owners.

A person dealing with a registered land has a right to rely upon the face of the Torrens certificate
of title and to dispensewith the need of inquiring further, except when the party concerned has
actual knowledge of facts and circumstances thatwould impel a reasonably cautions man to
make such inquiry.

Also, petitioners Bailon are relatives of his wife. As a gesture of good faith, he should have
contacted the Bailons whowere still listed as co-owners in the certificate of title which was
already in his possession even before the sale.
o
In failing to exercise even a minimum degree of ordinary prudence, he is deemed to have
bought the lot at hisown risk.
o
Hence any prejudice or injury that may be occasioned to him by such sale must be borne by
him.Decision set aside

Implied Trust (Art . 1456)

Vagilidad vs. Vagalidad
G.R. No. 161136
Facts:
A parcel of land was bought by Gabino and later on without the consent of the wife of Gabino
was transferred to Wilfredo without any payment in conformity that Wilfredo can use the lot to as
a collateral to obtain loan. And when the loan was paid and the mortgaged was cancelled.
Spouses GABINO and Ma. Dorothy Vagilidad (hereafter DOROTHY), as plaintiffs, filed a
Complaint for Annulment of Document, Reconveyance and Damages. But Wilfredo claimed that
they are the owner the land because they already bought it to from the former owner who sold
the same to Gabino. Then Gabino claimed that Wilfredo resort to fraud to obtain ownership of
the said property.
Issue: Who is the rightful owner of the property?
Ruling:
The contract of sale between LORETO and GABINO, JR. on May 12, 1986 could be legally
recognized. At the time of sale, LORETO had an aliquot share of one-third of the 4,280-square
meter property or some 1,426 square meters but sold some 1,604 square meters to GABINO,
JR. We have ruled that if a co-owner sells more than his aliquot share in the property, the sale
will affect only his share but not those of the other co-owners who did not consent to the sale.Be
that as it may, the co-heirs of LORETO waived all their rights and interests over Lot No. 1253 in
favor of LORETO in an Extrajudicial Settlement of Estate dated January 20, 1987. They
declared that they have previously received their respective shares from the other estate of their
parents ZOILO and PURIFICACION. The rights of GABINO, JR. as owner over Lot No. 1253-B
are thus preserved. These rights were not effectively transferred by LORETO to WILFREDO in
the Deed of Absolute Sale of Portion of Land. Nor were these rights alienated from GABINO,
JR. upon the issuance of the title to the subject property in the name of WILFREDO.
Registration of property is not a means of acquiring ownership. Its alleged incontrovertibility
cannot be successfully invoked by WILFREDO because certificates of title cannot be used to
protect a usurper from the true owner or be used as a shield for the commission of fraud.
On the issue of prescription, petitioners contend that the appellate court failed to apply the rule
that an action for reconveyance based on fraud prescribes after the lapse of four years. They
cite Article 1391 of the Civil Code and the case of Gerona v. De Guzman.
We disagree. This Court explained in Salvatierra v. Court of Appeals, viz.:
An action for reconveyance based on an implied or constructive trust must perforce prescribe
in ten years and not otherwise. A long line of decisions of this Court, and of very recent vintage
at that, illustrates this rule. Undoubtedly, it is now well-settled that an action for reconveyance
based on an implied or constructive trust prescribes in ten years from the issuance of the
Torrens title over the property. The only discordant note, it seems, is Balbin v. Medalla, which
states that the prescriptive period for a reconveyance action is four years. However, this
variance can be explained by the erroneous reliance on Gerona v. de Guzman. But in Gerona,
the fraud was discovered on June 25, 1948, hence Section 43(3) of Act No. 190 was applied,
the New Civil Code not coming into effect until August 30, 1950 xxx. It must be stressed, at this
juncture, that Article 1144 and Article 1456 are new provisions. They have no counterparts in the
old Civil Code or in the old Code of Civil Procedure, the latter being then resorted to as legal
basis of the four-year prescriptive period for an action for reconveyance of title of real property
acquired under false pretenses.
[Thus,] under the present Civil Code, xxx just as an implied or constructive trust is an offspring
of xxx Art. 1456, xxx so is the corresponding obligation to reconvey the property and the title
thereto in favor of the true owner. In this context, and vis--vis prescription, Article 1144 of the
Civil Code is applicable[, viz.:]

Art. 1144.

The following actions must be brought within ten years from the time

the right of action accrues:

1)

Upon a written contract;

2)

Upon an obligation created by law;

3)

Upon a judgment.