502 Phil. 250
The pertinent factual antecedents as found by the two (2) courts below may be briefly summarized, as follows:
1) Decision dated May 21, 1999, affirming, with modification, an earlier decision of the Regional Trial Court at Siniloan, Laguna in an action for conveyance, accion publiciana, and quieting of title with damages, thereat commenced by the petitioners against the herein respondents; and 2) Resolution dated August 25, 1999, denying petitioners' motion for reconsideration.
WHEREFORE, premises considered, judgment is hereby rendered ordering the dismissal of the complaint. Plaintiffs are hereby ordered to pay defendants the amount of P10,000.00 for and as Attorney's fees. To pay the cost.On appeal to the Court of Appeals in CA-G.R. CV No. 57690, the appellate court, in the herein assailed decision dated May 21, 1999, affirmed that of the trial court, minus the award of attorney's fees, to wit:
WHEREFORE, subject to the modification as above indicated, the decision appealed from is hereby AFFIRMED. Without pronouncement as costs.With their motion for reconsideration having been denied by the same court in its resolution of August 25, 1999, petitioners are now with us, commending for our resolution the following issues:
- WHETHER OR NOT A TITLED PROPERTY CAN BE THE SUBJECT OF A FREE PATENT TITLE.
- WHETHER OR NOT THE RIGHT OF A REGISTERED OWNER TO DEMAND THE RETURN OF HIS PROPERTY CAN BE LOST BY PRESCRIPTION OR LACHES.
- WHETHER AN ACTION FOR RECONVEYANCE OF PROPERTY BASED ON A NULLITY OF TITLE PRESCRIBES.
The said property is covered by TCT No. 102167 of the Registry of Deeds of Quezon City. Under the Land Registration Act, title to the property covered by a Torrens certificate becomes indefeasible after the expiration of one year from the entry of the decree of registration. Such decree of registration is incontrovertible and is binding on all persons whether or not they were notified of or participated in the registration proceedings.To stress, the action filed by petitioners is one for "Conveyance, Accion Publiciana, and Quieting of Title With Damages", and not an action for annulment of OCT No. 1388 issued to Rosa Javier Go. We, therefore, cannot entertain the issue in the present petition for review on certiorari.
If such title is to be challenged, it may not be done collaterally, as in the present case, because the judicial action required is a direct attack. Section 48 of the Property Registration Decree expressly provides that a certificate of title cannot be subject to collateral attack and can be altered, modified or cancelled only in a direct proceeding in accordance with law. This was the same rule under Act 496.
At this juncture, we find the need to remind the court a quo as well as other trial courts to keep abreast with the latest jurisprudence so as not to cause possible miscarriages of justice in the disposition of the cases before them. In the relatively recent case of Caro v. CA, 180 SCRA 401, the Supreme Court clarified the seemingly confusing precedents on the matter of prescription of actions for reconveyance of real property, as follows:The assailed decision of the Court of Appeals, which affirmed that of the trial court, faithfully adhered to the above-stated doctrine. We simply find no cogent reason to disturb the same, much less to review the factual basis of both courts' holding that the 10-year prescriptive period had expired.`We disagree. The case of Liwalug Amerold, et al. v. Molok Bagumbaran, G.R. L-33261, September 30, 1987, 154 SCRA 396 illuminated what used to be a gray area on the prescriptive period for an action to reconvey the title to real property and corrolarilly, its point of reference:`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 as mentioned earlier. 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.
`x x x. It must be remembered that before August 30, 1950, the date of the effectivity of the new Civil Code, the Old Code of Civil Procedure (Act No. 190) governed prescription. It provided:
`SEC. 43. Other civil actions; how limited. - Civil actions other than for the recovery of real property can only be brought within the following periods after the right of action accrues:
`3. Within four years: x x x An action for relief on the ground of fraud, but the right of action in such case shall not be deemed to have accrued until the discovery of the fraud:
x x x x x x x x x
`In contract (sic) under the present Civil Code, we find that just as an implied or constructive trust in (sic) an offspring of the law (Art. 1465, Civil Code), so is the corresponding obligation to reconvey the property and the title thereto in favor of the true owner. In this context, and vis-à-vis prescription, Article 1144 of the Civil Code is applicable.
`Article 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;
x x x x x x x x x
"An action for reconveyance has its basis in Section 53, paragraph 3 of Presidential Decree No. 1529, which provides:`In all cases of registration procured by fraud, the owner may pursue all his legal and equitable remedies against the parties to such fraud without prejudice, however, to the rights of any innocent holder of the decree of registration on the original petition or application, x x x.'"This provision should be read in conjunction with Article 1456 of the Civil Code, which provides:
`Article 1456. If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes.'
"The law thereby creates the obligation of the trustee to reconvey the property and the title thereto in favor of the true owner. Correlating Section 53, paragraph 3 of Presidential Decree No. 1529 and Article 1456 of the Civil Code with Article 1144 (2) of the Civil Code, supra, the prescriptive period for the reconveyance of fraudulently registered real property is ten (10) years reckoned from the date of the issuance of the certificate of title. In the present case, therefore, inasmuch as Civil Case No. 10235 was filed on June 4, 1975, it was well-within the prescriptive period of ten (10) years from the date of the issuance of "Original Certificate of Title No. 0-6836 on September 17, 1970."
xxx. Generally, an action for reconveyance based on an implied or constructive trust, such as the instant case, prescribes in 10 years from the date of issuance of decree of registration. However, this rule does not apply when the plaintiff is in actual possession of the land. Thus, it has been held:Here, it was never established that petitioners remained in actual possession of the property after their father's sale thereof to Go S. Kiang in 1965 and up to the filing of their complaint in this case on August 10, 1995. On the contrary, the trial court's factual conclusion is that respondents had actual possession of the subject property ever since. The action for reconveyance in the instant case is, therefore, not in the nature of an action for quieting of title, and is not imprescriptible.". . . [A]n 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, but 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 thereof is in actual possession of the property, as the defendants are in the instant case, the right to seek reconveyance, which in effect seeks to quiet title to the property, does not prescribe. The reason for this is that one who is in actual possession of a piece of land 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, 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."