[G.R. NO. 164787 - January 31, 2006]
MARLENE CRISOSTOMO & JOSE G. CRISOSTOMO, Petitioners, v. FLORITO M. GARCIA, JR., Respondent.
D E C I S I O N
On 20 June 2002, respondent Florito M. Garcia, Jr. filed Civil Case No. C-20128 for cancellation of Transfer Certificate of Title (TCT) No. 273165 of the Registry of Deeds of Caloocan City against petitioners-spouses Marlene and Jose Crisostomo raffled to Branch 121 of the Regional Trial Court of Caloocan City.1
In his Complaint,2 dated 16 June 2002, respondent alleged that on 24 September 1986, Victoria Garcia Vda. de Crisostomo, mother of petitioner Jose G. Crisostomo, sold to him, by way of a Deed of Absolute Sale,3 the property, described in the aforesaid TCT including the improvements and rights thereon, particularly described as TAG No. 84-205-1097 (Urban Bliss Level I [ZIP] located at 163 Libis Talisay, Caloocan City). In the Deed of Sale, petitioner Jose Crisostomo and his sister Cristina Crisostomo signed as witnesses in the execution of the instrument. Since they were distant relatives, respondent allowed Victoria and her children, petitioner Jose and Cristina, to stay in the subject property as lessees under a Contract of Lease.4 By virtue of the said deed of sale, respondent effected the transfer of the tax declaration covering the property, under his name from the City Assessor's Office of Caloocan City.
However, before the transfer of title to respondent could be completed, petitioners-spouses Jose and Marlene Crisostomo were able to secure a loan from the National Home Mortgage Finance Corporation using the subject property as security through bad faith and machinations. Worse, petitioners were able to transfer the subject property under their names, obtaining TCT No. 273165, from the Registry of Deeds of Caloocan City, without the knowledge and consent of the respondent.
Instead of an Answer, petitioners filed an "Urgent Motion to Dismiss Action,"5 alleging that since respondent's cause of action is based on an alleged deed of sale executed on 24 September 1986, the cause of action of the respondent to enforce and to implement the instrument arose on 24 September 1986 and pursuant to Article 11446 of the Civil Code, the action must be brought within 10 years from the time the right of action accrues. Thus, from 24 September 1986, respondent had only up to 24 September 1996 within which to file the action. Since the complaint was filed only on 20 June 2002, or after the lapse of more than 16 years, the cause of action is clearly barred by prescription.
Respondent, in his Comment7 to the Motion to Dismiss, countered that the cause of action has not yet prescribed. He contends that Article 1144 of the Civil Code does not apply to the case because the complaint is for cancellation of title registered in the names of the petitioners and for reconveyance. Respondent further points out that he did not file an action for specific performance based on the deed of sale. The complaint, he said, is for reconveyance based on an implied or constructive trust which expires in 10 years counted from the date the adverse title to the property is asserted by the possessor.
Resolving the motion,10 the trial court issued an Order dated 12 August 2003, dismissing the same for lack of merit, in this wise:
It appears from the pleadings submitted by the parties that the mother of defendant Jose Crisostomo had sold the property subject matter of this case to the plaintiff as evidenced by a Deed of Absolute Sale. However, before the property could have been registered with the Register of Deeds and a transfer certificate of title could have been issued, the defendants had obtained a loan from the National Home Mortgage Finance Corporation using the subject property as collateral. The defendants were able to transfer the subject property in their names now covered by Transfer Certificate of Title No. 273165 before the Register of Deeds of Caloocan City.
By way of an opposition, the plaintiff alleged that the action is for the cancellation of title based on fraud which was discovered upon the registration of the property in 1993. The case was filed on June 20, 2003,(sic) hence, the action has not yet prescribed.
While it is true that in action based on a written contract prescribes in 10 years, the same however does not find application in the case at bar. The plaintiff is trying to cancel the transfer certificate of title issued in favor of the private defendants based on the alleged fraud which was discovered in 1993.
WHEREFORE, in view of the foregoing, the instant motion is hereby DENIED for utter lack of merit.
The defendants are directed to file their Answer within ten (10) days from receipt of a copy of this order.11
Petitioners filed a Motion for Reconsideration,12 dated 11 September 200313 which the respondent opposed.14 The trial court denied the Motion for Reconsideration in an Order dated 21 October 2003.15 Undaunted, petitioners filed a Petition for Certiorari16 before the Court of Appeals.17
In a resolution18 dated 20 February 2004, the Court of Appeals resolved to dismiss the petition outright stating that the defense of prescription being a question of fact, the same is not proper in a petition for certiorari .19
Hence, this petition grounded on the following:
On the issue of whether the defense of prescription is a question of fact or law, the distinction is settled that there is a question of fact when the doubt or difference arises as to the truth or falsehood of the alleged facts. On the other hand, a question of law exists when there is a doubt or controversy as to what the law is on a certain state of facts.23 For a question to be one of law, the same must not involve an examination of the probative value of the evidence presented by the litigants or any of them.24 The resolution of the issue must rest solely on what the law provides on the given set of circumstances. Once it is clear that the issue invites a review of the evidence presented, the question posed is one of fact.25
The test of whether a question is one of law or of fact is not the appellation given to such question by the party raising the same; rather, it is whether the appellate court can determine the issue raised without reviewing or evaluating the evidence, in which case, it is a question of law; otherwise it is a question of fact.26
In the case of Santos, et al. v. Aranzanso,27 this Court has held that the question of prescription of the action involves the ascertainment of factual matters such as the date when the period to bring the action commenced to run. In Lim v. Chan,28 this Court has again decreed that prescription is a factual matter when it held that without conducting trial on the merits, the trial court cannot peremptorily find the existence of estoppel, laches, fraud or prescription of actions as these matters require presentation of evidence and determination of facts.
At first glance, applying these jurisprudence as bases, it may seem that the Court of Appeals acted correctly in denying the petition. However, while we agree with the Court of Appeals that the issue of prescription is a factual matter, we deem it erroneous on its part to have dismissed the petition on this ground. The Court of Appeals could have squarely ruled if the trial court committed grave abuse of discretion in denying the motion to dismiss the Complaint filed by the petitioners considering that the facts from which the issue of prescription can be adduced are available to the appellate court, they being extant from the records.
The records disclose that the date of registration of the subject property in the name of the petitioners was 16 November 1993 while the Deed of Sale executed in favor of the respondent was dated 24 September 1986. The complaint for the reconveyance and cancellation of TCT was filed by the respondent on 20 June 2002.
Moreover, a motion to dismiss based on prescription hypothetically admits the truth of the facts alleged in the complaint.29 Such hypothetical admission is limited to the facts alleged in the complaint which relate to, and are necessary for, the resolution of the grounds stated in the motion to dismiss as preliminary matters involving substantive or procedural laws, but not to the other facts of the case. As applied herein, the hypothetical admission extends to the date of execution of the Deed of Sale in favor of the respondent and to the date of registration of title in favor of the petitioners.
The foregoing considered, the Court of Appeals was properly equipped with the tools to determine if the trial court abused its discretion in ruling that respondent's cause of action had not prescribed. Nevertheless, instead of remanding this case to the Court of Appeals which is concededly a costly endeavor in terms of the parties' resources and time, we shall rule on the issue of prescription.30
Petitioners' allegation that an action for the reconveyance of real property on the ground of fraud must be filed within four years from the discovery of the fraud31 is without basis.
The four-year prescriptive period relied upon by the petitioners apply only if the complaint seeks to annul a voidable contract under Article 139032 of the Civil Code. In such case, the four-year prescriptive period under Article 139133 begins to run from the time of discovery of the mistake, violence, intimidation, undue influence or fraud.34
Generally, an action for reconveyance of real property based on fraud prescribes in four years from the discovery of fraud; such discovery is deemed to have taken place upon the issuance of the certificate of title over the property. Registration of real property is a constructive notice to all persons and, thus, the four-year period shall be counted therefrom.35
In the case at bar, respondent's action which is for Reconveyance and Cancellation of Title is based on an implied trust under Art. 1456 of the Civil Code since he averred in his complaint that through fraud petitioners were able to obtain a Certificate of Title over the property. He does not seek the annulment of a voidable contract whereby Articles 1390 and 1391 of the Civil Code would find application such that the cause of action would prescribe in four years.
Art. 1456 of the Civil Code provides:
Art. 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.
Thus, it was held that when a party uses fraud or concealment to obtain a certificate of title of property, a constructive trust is created in favor of the defrauded party.36
Constructive trusts are "created by the construction of equity in order to satisfy the demands of justice and prevent unjust enrichment. They arise contrary to intention against one who, by fraud, duress or abuse of confidence, obtains or holds the legal right to property which he ought not, in equity and good conscience, to hold."37
When property is registered in another's name, an implied or constructive trust is created by law in favor of the true owner.38 The action for reconveyance of the title to the rightful owner prescribes in 10 years from the issuance of the title.39
An action for reconveyance based on implied or constructive trust prescribes in ten years from the alleged fraudulent registration or date of issuance of the certificate of title over the property.40
It is now well-settled that the prescriptive period to recover property obtained by fraud or mistake, giving rise to an implied trust under Art. 1456 of the Civil Code, is 10 years pursuant to Art. 1144. This ten-year prescriptive period begins to run from the date the adverse party repudiates the implied trust, which repudiation takes place when the adverse party registers the land.41
Clearly, the applicable prescriptive period is ten years under Art. 1144 and not four years under Arts. 1389 and 1391.42
Applying the law and jurisprudential declaration above-cited to the allegations of fact in the complaint, it can clearly be seen that respondent has a period of 10 years from the registration of the title within which to file the action. Since the title was registered in the name of the petitioners on 16 November 1993, respondent had a period of 10 years from the time of the registration within which to file the complaint. Since the complaint was filed on 20 June 2002, the action clearly has not prescribed and was timely-filed.
WHEREFORE, premises considered, the instant petition is:
The case is ordered remanded to the trial court which is directed to continue with the hearing and proceed with Civil Case No. C-20128 with deliberate dispatch. No costs.
On the second issue, petitioners fervently insist that the Court of Appeals should have settled the issue of prescription.
Under certain situations, recourse to certiorari or mandamus is considered appropriate, that is, (a) when the trial court issued the order without or in excess of jurisdiction; (b) where there is patent grave abuse of discretion by the trial court; or, (c) appeal would not promptly relieve a defendant from the injurious effects of the patently mistaken order maintaining the plaintiffs baseless action and compelling the defendant needlessly to go through a protracted trial and clogging the court dockets by another futile case.43
Indeed, a writ of Certiorari is not intended to correct every controversial interlocutory ruling; it is resorted to only to correct a grave abuse of discretion or a whimsical exercise of judgment equivalent to lack or excess of jurisdiction. The function of a petition for Certiorari is limited to keeping an inferior court within the bounds of its jurisdiction and to relieve persons from arbitrary acts which courts or judges have no power or authority in law to perform. Certiorari is not designed to correct erroneous findings and conclusions made by the court.44 Even if, in the greater interest of substantial justice, certiorari may be availed of, it must be shown that the trial court acted with grave abuse of discretion amounting to lack or excess of jurisdiction, that is, that the trial court exercised its powers in an arbitrary or despotic manner by reason of passion or personal hostilities, so patent and gross as to amount to an evasion or virtual refusal to perform the duty enjoined or to act in contemplation of law.
Finally, on the third issue of whether or not prescription has set in, the resolution of this issue requires that we closely scrutinize the facts of the case, relating to the sufficiency of the evidence. Having established that the issue is factual and that it entails an examination of the records, the same is not proper for resolution in the present petition. Petitioners have not shown that a departure from this rule is warranted under the circumstances. Be that as it may, to put the issue to rest, we deem it necessary to determine the presence or absence of prescription. It must be noted that the title to the property was registered in the name of the petitioners on 16 November 1993.45 The rule is that it is the act of registration that operates to convey registered land or affect title - registration in a public registry creates constructive notice to the whole world.46 The Complaint was filed on 20 June 2002.
Search for www.chanrobles.com
|Copyright © ChanRoblesPublishing Company| Disclaimer | E-mailRestrictions|
ChanRobles™Virtual Law Library ™ | chanrobles.com™