Villagonzalo v.

IAC (1988) Ponente: Regalado Facts: 1961: Juan Villagonzalo (predecessor-in-interest of the parties) purchased a lot of the Ormoc Cadastre at Barrio Dolores, Ormoc, covered by TCT 24611, from the heirs of Matuguina for P1500 It was made to appear that the sale was in the name of his daughter Cecilia since he borrowed from her P500 to complete the full payment of the price. TCT 4259 was issued in the name of Cecilia as the registered owner in 1962. 1975: (13 yrs after the issuance of TCT 4259 in the name of Cecilia) complaint was filed. CA: right of action of the petitioners had prescribed. o Cecilia excluded the petitioners from the estate of Juan Villagonzalo when she obtained TCT 4259 in her name. Consequently, she set up a title to the land adverse to them. o Registration of the deed of sale was constructive notice to the whole world of Cecilias adverse claim to the property. o Action for reconveyance based on an implied or constructive trust prescribes in 10 yrs from the date when adverse title is asserted by the possessor of the property. o Because of the neglect and inaction of petitioners, Cecilia was made to feel secure in her belief that she had rightly acquired the land and that no legal action would be filed against her. (laches) Issue: WON CA erred in holding that the right of action of the petitioners had prescribed? No Ratio: An action for reconveyance of real property to enforce an implied trust shall prescribe after 10 yrs, since it is an action based upon an obligation created by law, and there can be no doubt to its prescriptibility. Period of 10 yrs is counted from the date adverse title to the property is asserted by the possessor. The assertion of adverse title, which consequently was a repudiation of the implied trust for the purpose of the statute of limitations, took place when TCT 4259 was issued in the name of Cecilia in 1962. Since 1961, Cecilia refused to give any share in the produce of the land to petitioners. In 1963, she mortgaged the property in her own name. In 1969, she leased the same to Valera without the petitioners taking preventive or retaliatory legal action. An action to enforce an implied trust may be barred not only by prescription but also by laches, in which case repudiation is not required. Whether the trust is resulting or constructive, its enforcement may be barred by laches. De Cabrera v. CA (1997) Ponente: Torres Facts: 1950: Deed of Sale was executed by Daniel and Albertana Teokemian in favor of Andres Orais over an unregistered land at Abejod, Cateel, Davao Oriental. Property was owned by Daniel, Albertana and their sister Felicidad Teokemian, having inherited the same from their father. Deed of Sale was not signed by Felicidad although her name was printed as one of the vendors. 1950: land was surveyed in the name of Virgilia Orais, daughter of Andres Orais. 1957: Virgilia Orais was issed Free Patent V-79089. OCT P-10908 was issued in her name. 1972: Albertana Teokemian executed a Deed of Absolute Sale to Elano Cabrera (husband of Felicidad Cabrera) of lot No.2239 which portion supposedly corresponded to 1/3 share in Lot 2239 of Felicidad Teokemina who was not a party to the Deed of Sale executed in favor of Orais. o Deed of Sale was signed by Albertana not by Felicidad because the whole lot was adjudicated to Albertana in a decision of a cadastral court. Spouses Cabrera immediately took possession of the western portion of Lot 2239. 1974 and 1978: Virgilias brothers Rodolfo and Jimmy Orais confronted the Cabreras of their alleged encroachment and illegal occupation of their sisters land. 1988: Virgilia filed a civil case against Felicidad Cabrera and her daughter Marykane for Quieting of Title to Property, Damages with Preliminary Mandatory Injunction. Consequently. Felicidad Teokemina was included as party defendant. Cabrera alleged that they acquired a portion of Lot 2239 in good faith for value. That Felicidad Teokemina did not sign the Deed of Sale in favor of Orais, 1/3 of the lot could not have been legally conveyed to Orais. o Also alleged that Virgilia Orais fraudulently included the portion owned by Felicidad Teokemian in her application for free patent over the land. o Virgilia is guilty of laches for her inaction to recover the western portion of the land despite knowledge of Cabreras acquisition in 1972. It was only in 1988 when the complaint for quieting of title was filed. Issue: WON there is plaintiff made a waiver to recover any interest she had in the 1/3 portion of the property inherited by Daniel, Albertana and Felicidad Teokemian due to the long period of time which lapsed from the time the plaintiffs title was registered until the action for quieting of title was instituted? Ratio: The registration of the plaintiffs title over the subject property was fraudulent insofar as it involved 1/3 interest of Felicidad Teokemian who did not sign the Deed of Sale in favor of plaintiffs predecessor-in-interest, the latter held that portion as a trustee of an implied trust for the benefit of Felicidad, pursuant to Art. 1456 CC

The title of Orais is irregular, issued in a calculated move to deprive Felicidad Teokemian of her dominical rights over the property reserved to her by descent. Registration does not vest title, it is merely evidence of such title over a particular property. The indefeasibility of the Torrens Title does not extend to a transferee who takes the certificate of title with notice of a flaw in his title. It is unavailing where there was fraud in the issuance of the free patents and titles. The right of the defendants for reconveyance of the property arising from an implied trust under Art. 1456, CC has not yet lapsed, and, is thus, a bar to the plaintiffs action. An action for reconveyance of a parcel of land based on implied or constructive trust prescribes in 10 yrs. Point of reference is the date of registration of the deed or the date of the issuance of the certificate of title over the property. This rule applies only when the plaintiff or the person enforcing the trust is not in possession of the property, since if a person claiming to be the owner is in actual possession, the right to seek reconveyance, which in effect seeks to quiet title, does not prescribe. o Reason: one who is in actual possession claiming to be the owner thereof 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 3rd party and its effect on his own title, which right can be claimed only by one who is in possession. Before the period of prescription may start, requisites: 1. Trustee has performed unequivocal acts of repudiation amounting to an ouster of the cestui que trust 2. Such positive acts of repudiation have been made known to the cestui que trust 3. Evidence is clear and positive Defendant Felicidad Teokemian, and thereafter, the Cabreras, were in actual possession of the property since it was left to Felicidad Teokemian by her father in 1941, which possession had not been interrupted despite the sale of the 2/3 postion to Orais in 1950 and her procurement of title in 1957. Until 1988, plaintiffs have not displayed unequivocal act of repudiation, which could be considered as an assertion of adverse interest from the Cabreras. Thus, the right of reconveyance on the part of the defendants has not been lost by prescription. The action of reconveyance (quieting of title) of the plaintiff was only in 1988, 30 yrs from the time the plaintiffs husband was able to acquire title covering the properties inherited by the Tokemians, including Felicidads share. In the meantime, the Cabreras have been actively in possession of the same. This constitute tardiness on the part of the plaintiff = laches. Laches- failure or neglect, for an unreasonable and unexplained length of time, to do that which by exercising due diligence could or should have been done earlier; negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it. o It is not concerned merely with lapse of time, unlike prescription. Prescription deals with the fact of delay, laches deals with the effect of unreasonable delay. Even a registered owner may be barred from recovering possession by virtue of laches. Under the LRA, no title to registered land in derogation to that of the registered owner shall be acquired by prescription or adverse possession, but this is not true with regard to laches. Since the sale of the 2/3 portion of the property to the plaintiff, the latter had allowed Felicidad Teokemian to occupy that 1/3 portion allotted to her. There has been a partial partition, where the transferees of an undivided portion of the land allowed a co-owner of the property to occupy a definite portion thereof and has not disturbed the same, for a period too long to be ignored- the possessor is in a better condition or right (potior est condition possidentis) Plaintiff is barred from asserting her alleged right on the ground that it has been lost by laches.