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As regards petitioners claim that the complaint in Civil Case No.

98-021 is
really one of quieting of title which does not prescribe, it appears that petitioners
are referring to the doctrine laid down in the often-cited case of Heirs of Jose
Olviga v. Court of Appeals,[19] wherein we held:

With regard to the issue of prescription, this Court has ruled a


number of times before that an action for reconveyance of a parcel of
land based on implied or constructive trust prescribes in ten years, the
point of reference being the date of registration of the deed or the date of
the issuance of the certificate of title over the property (Vda. de Portugal
vs. IAC, 159 SCRA 178). But this rule applies only when the plaintiff is
not in possession of the property, since if a person claiming to be the
owner thereof is in actual possession of the property, the right to seek
reconveyance, which in effect seeks to quiet title to the property, does not
prescribe.[20]

However, the Court made a clear distinction in Olviga: when the plaintiff in
such action is not in possession of the subject property, the action prescribes
in ten years from the date of registration of the deed or the date of the
issuance of the certificate of title over the property. When the plaintiff is in
possession of the subject property, the action, being in effect that of quieting
of title to the property, does not prescribe.

We have ruled before in Amerol vs. Bagumbaran that notwithstanding


the irrevocability of the Torrens title already issued in the name of
another person, he can still be compelled under the law to reconvey the
subject property to the rightful owner. The property registered is deemed
to be held in trust for the real owner by the person in whose name it is
registered. After all, the Torrens system was not designed to shield and
protect one who had committed fraud or misrepresentation and thus
holds title in bad faith.

In an action for reconveyance, the decree of registration is


respected as incontrovertible. What is sought instead is the transfer of the
property, in this case the title thereof, which has been wrongfully or
erroneously registered in another person's name, to its rightful and legal
owner, or to one with a better right. This is what reconveyance is all
about.

Yet, the right to seek reconveyance based on an implied or


constructive trust is not absolute nor is it imprescriptible. An action for
reconveyance based on an implied or constructive trust must perforce
prescribe in ten years from the issuance of the Torrens title over the
property.[23]

However, there is an exception to this rule. In the case of Heirs of Pomposa


Saludares v. Court of Appeals,[27] the Court reiterating the ruling in Millena v.
Court of Appeals,[28] held that there is but one instance when prescription
cannot be invoked in an action for reconveyance, that is, when the plaintiff is
in possession of the land to be reconveyed. In Heirs of Pomposa
Saludares,[29] this Court explained that the Court in a series of cases,[30] has
permitted the filing of an action for reconveyance despite the lapse of more
than ten (10) years from the issuance of title to the land and declared that said
action, when based on fraud, is imprescriptible as long as the land has not
passed to an innocent buyer for value.But in all those cases, the common
factual backdrop was that the registered owners were never in possession of
the disputed property. The exception was based on the theory that registration
proceedings could not be used as a shield for fraud or for enriching a person at
the expense of another.

Alfredo v. Borras,[31] the Court ruled that prescription does not run against the
plaintiff in actual possession of the disputed land because such plaintiff has a right
to wait until his possession is disturbed or his title is questioned before initiating
an action to vindicate his right. His undisturbed possession gives him the
continuing right to seek the aid of a court of equity to determine the nature of the
adverse claim of a third party and its effect on his title. The Court held that where
the plaintiff in an action for reconveyance remains in possession of the subject
land, the action for reconveyance becomes in effect an action to quiet title to
property, which is not subject to prescription.
imilarly, in the case of David v. Malay[33] the Court held that there was no
doubt about the fact that an action for reconveyance based on an implied trust
ordinarily prescribes in ten (10) years. This rule assumes, however, that there is an
actual need to initiate that action, for when the right of the true and real owner is
recognized, expressly or implicitly such as when he remains undisturbed in his
possession, the statute of limitation would yet be irrelevant. An action for
reconveyance, if nonetheless brought, would be in the nature of a suit for quieting
of title, or its equivalent, an action that is imprescriptible. In that case, the Court
reiterated the ruling in Faja v. Court of Appeals[34] which we quote:
x x x There is settled jurisprudence that one who is in actual possession of a piece
of land claiming to be owner thereof may wait until his possession is disturbed or
his title is attacked before taking steps to vindicate his right, the reason for the
rule being, that his undisturbed possession gives him a continuing right to seek the
aid of a court of equity to ascertain and determine the nature of the adverse claim
of a third party and its effect on his own title, which right can be claimed only by
one who is in possession. No better situation can be conceived at the moment for
Us to apply this rule on equity than that of herein petitioners whose mother,
Felipa Faja, was in possession of the litigated property for no less than 30 years
and was suddenly confronted with a claim that the land she had been occupying
and cultivating all these years, was titled in the name of a third person. We hold
that in such a situation the right to quiet title to the property, to seek
its reconveyance and annul any certificate of title covering it, accrued only from
the time the one in possession was made aware of a claim adverse to his own, and
it is only then that the statutory period of prescription commences to run against
such possessor.
Petitioners filed a Motion for Reconsideration of the aforementioned RTC
Order dismissing their Complaint. They argued that their principal cause of
action was for quieting of title; the accion reivindicacion was included merely
to enable them to seek complete relief from respondents. Petitioners
Complaint should not have been dismissed, since Section 1, Rule 63 of the
Rules of Court[13] states that an action to quiet title falls under the jurisdiction
of the RTC.[14]
In turn, Article 477 of the same Code identifies the party who may bring an
action to quiet title, thus:

Article 477. The plaintiff must have legal or equitable title to, or interest in the real
property which is the subject-matter of the action. He need not be in possession of
said property.
It can thus be seen that for an action for quieting of title to prosper, the
plaintiff must first have a legal, or, at least, an equitable title on the real
property subject of the action and that the alleged cloud on his title must be
shown to be in fact invalid. So it is that in Robles, et al. vs. CA, we ruled:
[10]

It is essential for the plaintiff or complainant to have a legal title or an equitable title
to or interest in the real property which is the subject matter of the action. Also, the
deed, claim, encumbrance or proceeding that is being alleged as a cloud on plaintiffs
title must be shown to be in fact invalid or inoperative despite its prima facie
appearance of validity or legal efficacy.

Verily, for an action to quiet title to prosper, two (2) indispensable


requisites must concur, namely: (1) the plaintiff or complainant has a legal or
an equitable title to or interest in the real property subject of the action; and (2)
the deed, claim, encumbrance or proceeding claimed to be casting cloud on
his title must be shown to be in fact invalid or inoperative despite its prima
facie appearance of validity or legal efficacy.
An action for reconveyance is one that seeks to transfer property, wrongfully
registered by another, to its rightful and legal owner. [11] Indeed, reconveyance is an
action distinct from an action for quieting of title, which is filed whenever there is
a cloud on title to real property or any interest therein, by reason of any instrument,
record, claim, encumbrance or proceeding which is apparently valid or effective
but is in truth and in fact, invalid, ineffective, voidable, or unenforceable, and may
be prejudicial to said title for purposes of removing such cloud or to quiet
title. [12] However, we find nothing erroneous in the CAs ruling treating
respondents action for reconveyance as an action to quiet title.

In Mendizabel v. Apao,[13] we treated a similar action for reconveyance as an


action to quiet title, explaining, thus:

The Court has ruled that the 10-year prescriptive period applies
only when the person enforcing the trust is not in possession of the
property. If a person claiming to be its owner is in actual possession of
the property, the right to seek reconveyance, which in effect seeks to
quiet title to the property, does not prescribe. The reason is that the one
who is in actual possession of the land claiming to be its owner may wait
until his possession is disturbed or his title is attacked before taking steps
to vindicate his right. His undisturbed possession gives him a continuing
right to seek the aid of a court of equity to ascertain and determine the
nature of the adverse claim of a third party and its effect on his own title,
which right can be claimed only by one who is in possession.

The ruling was reiterated in Lasquite v. Victory Hills, Inc.,[14] viz.:

An action for reconveyance based on an implied trust prescribes in 10 years. The


reference point of the 10-year prescriptive period is the date of registration of the deed or
the issuance of the title. The prescriptive period applies only if there is an actual need to
reconvey the property as when the plaintiff is not in possession of the property. However,
if the plaintiff, as the real owner of the property also remains in possession of the
property, the prescriptive period to recover title and possession of the property does not
run against him. In such a case, an action for reconveyance, if nonetheless filed, would be
in the nature of a suit for quieting of title, an action that is imprescriptible.

Indubitably, the characterization by the CA of respondents action as in the


nature of an action for quieting of title cannot be considered a reversible error.
Petitioners next fault the CA for sustaining respondents claim of co-
ownership. They denied that Celso Quijano is a co-owner of the property.
Unfortunately for petitioners, the records speak otherwise.

The Deed of Reconveyance[15] executed by Manuel and Romulo explicitly


states that:

n action for reconveyance of property respects the decree of registration as


incontrovertible and merely seeks the transfer of the property wrongfully or
erroneously registered in anothers name to its rightful owner or to one who claims
to have a better right.[10]

An action for reconveyance of property based on an implied or constructive trust is


the proper remedy of an aggrieved party whose property had been erroneously
registered in anothers name.[11] The prescriptive period for the reconveyance of
registered property is ten years, reckoned from the date of the issuance of the
certificate of title. However, the ten-year prescriptive period for an action for
reconveyance is not applicable where the complainant is in possession of the land
to be reconveyed and the registered owner was never in possession of the disputed
property.[12] In such a case, the action for reconveyance filed by the complainant
who is in possession of the disputed property would be in the nature of an action to
quiet title which is imprescriptible.[13]

This case is similar to the case of Caragay-Layno v. CA,[14] which involves a


counterclaim for reconveyance of property which was filed by petitioner Juliana
Caragay-Layno on the ground that a portion of her property had been fraudulently
or mistakenly included in the certificate of title issued for the adjoining lot of the
respondent. The Court held:

Prescription cannot be invoked against JULIANA for the reason that


as lawful possessor and owner of the Disputed Portion, her cause of
action for reconveyance which, in effect, seeks to quiet title to the
property, falls within settled jurisprudence that an action to quiet title
to property in ones possession is imprescriptible. Her undisturbed
possession over a period of fifty-two (52) years gave her a continuing
right to seek the aid of a Court of equity to determine the nature of the
adverse claim of a third party and the effect on her own title.
Besides, under the circumstances, JULIANAs right to quiet title, to seek
reconveyance, and to annul OCT No. 63 accrued only in 1966 when she was made
aware of a claim adverse to her own. It was only then that the statutory period of
prescription may be said to have commenced to run against her x x x.[15]

The distinction between the two actions was elucidated in the case of Heirs of Kionisala v. Heirs
of Dacut, 16 where it was written: An ordinary civil action for declaration of nullity of free patents and
certificates of title is not the same as an action for reversion. The difference between them lies in the
allegations as to the character of ownership of the realty whose title is sought to be nullified. In an
action for reversion, the pertinent allegations in the complaint would admit State ownership of the
disputed land. Hence in Gabila v. Barriga where the plaintiff in his complaint admits that he has no right
to demand the cancellation or amendment of the defendants title because even if the title were
cancelled or amended the ownership of the land embraced therein or of the portion affected by the
amendment would revert to the public domain, we ruled that the action was for reversion and that the
only person or entity entitled to relief would be the Director of Lands. On the other hand, a cause of
action for declaration of nullity of free patent and certificate of title would require allegations of the
plaintiffs ownership of the contested lot prior to the issuance of such free patent and certificate of title
as well as the defendants fraud or mistake; as the case may be, in successfully obtaining these
documents of title over the parcel of land claimed by plaintiff. In such a case, the nullity arises strictly
not from the fraud or deceit but from the fact that the land is beyond the jurisdiction of the Bureau of
Lands to bestow and whatever patent or certificate of title obtained therefor is consequently void ab
initio. The real party in interest is not the State but the plaintiff who alleges a pre-existing right of
ownership 15 Id. at 12. 16 428 Phil. 249 (2002). DECISION G.R. No.
184746 8 over the parcel of land in question even before the grant of title to the defendant. In Heirs of
Marciano Nagano v. Court of Appeals we ruled x x x x from the allegations in the complaint x x x
private respondents claim ownership of the 2,250 square meter portion for having possessed it in the
concept of an owner, openly, peacefully, publicly, continuously and adversely since 1920. This claim is an
assertion that the lot is private land x x x x Consequently, merely on the basis of the allegations in the
complaint, the lot in question is apparently beyond the jurisdiction of the Director of the Bureau of
Lands and could not be the subject of a Free Patent. Hence, the dismissal of private respondents
complaint was premature and trial on the merits should have been conducted to thresh out evidentiary
matters. It would have been entirely different if the action were clearly for reversion, in which case, it
would have to be instituted by the Solicitor General pursuant to Section 101 of C.A. No. 141 x x x x It is
obvious that private respondents allege in their complaint all the facts necessary to seek the nullification
of the free patents as well as the certificates of title covering Lot 1015 and Lot 1017. Clearly, they are
the real parties in interest in light of their allegations that they have always been the owners and
possessors of the two (2) parcels of land even prior to the issuance of the documents of title in
petitioners favor, hence the latter could only have committed fraud in securing them x x x x That
plaintiffs are absolute and exclusive owners and in actual possession and cultivation of two parcels of
agricultural lands herein particularly described as follows [technical description of Lot 1017 and Lot
1015] x x x x 3. That plaintiffs became absolute and exclusive owners of the abovesaid parcels of land by
virtue of inheritance from their late father, Honorio Dacut, who in turn acquired the same from a certain
Blasito Yacapin and from then on was in possession thereof exclusively, adversely and in the concept of
owner for more than thirty (30) years x x x x 4. That recently, plaintiff discovered that defendants,
without the knowledge and consent of the former, fraudulently applied for patent the said parcels of
land and as a result thereof certificates of titles had been issued to them as evidenced by certificate of
title No. P-19819 in the name of the Hrs. of Ambrocio Kionisala, and No. P- 20229 in the name of Isabel
Kionisala x x x x 5. That the patents issued to defendants are null and void, the same having been issued
fraudulently, defendants not having been and/or in actual possession of the DECISION G.R. No. 184746 9
litigated properties and the statement they may have made in their application are false and without
basis in fact, and, the Department of Environment and Natural Resources not having any jurisdiction on
the properties the same not being anymore public but already private property x x x x It is not essential
for private respondents to specifically state in the complaint the actual date when they became owners
and possessors of Lot 1015 and Lot 1017. The allegations to the effect that they were so preceding the
issuance of the free patents and the certificates of title, i.e., the Department of Environment and
Natural Resources not having any jurisdiction on the properties the same not being anymore public but
already private property, are unquestionably adequate as a matter of pleading to oust the State of
jurisdiction to grant the lots in question to petitioners. If at all, the oversight in not alleging the actual
date when private respondents ownership thereof accrued reflects a mere deficiency in details which
does not amount to a failure to state a cause of action. The remedy for such deficiency would not be a
motion to dismiss but a motion for bill of particulars so as to enable the filing of appropriate responsive
pleadings. With respect to the purported cause of action for reconveyance, it is settled that in this kind
of action the free patent and the certificate of title are respected as incontrovertible. What is sought
instead is the transfer of the property, in this case the title thereof, which has been wrongfully or
erroneously registered in the defendants name. All that must be alleged in the complaint are two (2)
facts which admitting them to be true would entitle the plaintiff to recover title to the disputed land,
namely, (1) that the plaintiff was the owner of the land and, (2) that the defendant had illegally
dispossessed him of the same. We rule that private respondents have sufficiently pleaded (in addition to
the cause of action for declaration of free patents and certificates of title) an action for reconveyance,
more specifically, one which is based on implied trust. An implied trust arises where the defendant (or in
this case petitioners) allegedly acquires the disputed property through mistake or fraud so that he (or
they) would be bound to hold and reconvey the property for the benefit of the person who is truly
entitled to it. In the complaint, private respondents clearly assert that they have long been the absolute
and exclusive owners and in actual possession and cultivation of Lot 1015 and Lot 1017 and that they
were fraudulently deprived of ownership thereof when petitioners obtained free patents and
certificates of title in their names. These allegations certainly measure up to the requisite statement of
facts to constitute an action for reconveyance.17 [Emphases supplied]
17 Id. at 260-263, cited in Banguilan v. Court of Appeals, G.R. No. 165815, April 27, 2007, 522 SCRA 644,
653-655. DECISION G.R. No. 184746 10 In this case, the complaint instituted by the Reyeses before the
RTC was for the annulment of the title issued to the Galangs, and not for reversion. Thus, the real party
in interest here is not the State but the Reyeses who claim a right of ownership over the property in
question even before the issuance of a title in favor of the Galangs. Although the Reyeses have the right
to file an action for reconveyance, they have failed to prove their case. Thus, on the second issue, the
Court agrees with the RTC that the Reyeses failed to adduce substantial evidence to establish their
allegation that the Galangs had fraudulently registered the subject property in their names.

A Free Patent may be issued where the applicant is a natural-born citizen of


the Philippines; is not the owner of more than twelve (12) hectares of land; has
continuously occupied and cultivated, either by himself or through his
predecessors-in-interest, a tract or tracts of agricultural public land subject to
disposition, for at least 30 years prior to the effectivity of Republic Act No. 6940;
and has paid the real taxes thereon while the same has not been occupied by any
person.[19]
Once a patent is registered and the corresponding certificate of title is issued,
the land covered thereby ceases to be part of public domain and becomes private
property, and the Torrens Title issued pursuant to the patent becomes indefeasible
upon the expiration of one year from the date of such issuance.[20] However, a title
emanating from a free patent which was secured through fraud does not become
indefeasible, precisely because the patent from whence the title sprung is itself
void and of no effect whatsoever.[21]
On this point, our ruling in Republic v. Heirs of Felipe Alejaga, Sr.[22] is
instructive:
True, once a patent is registered and the corresponding certificate of title [is]
issued, the land covered by them ceases to be part of the public domain and
becomes private property. Further, the Torrens Title issued pursuant to the patent
becomes indefeasible a year after the issuance of the latter. However, this
indefeasibility of a title does not attach to titles secured by fraud and
misrepresentation. Well-settled is the doctrine that the registration of a patent
under the Torrens System does not by itself vest title; it merely confirms the
registrants already existing one. Verily, registration under the Torrens System is
not a mode of acquiring ownership.[23] (citations omitted)
x x x."