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BAR REVIEWER ON LABOR LAW 2014 (2nd) Edition - By Prof. Joselito Guianan Chan

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[G.R. No. 146965.June 18, 2001]

CHACON, et al. vs. FRANCO-ESPITAL, et al.



Quoted hereunder, for your information, is a resolution of this Court dated JUN 18 2001.

G.R. No. 146965(Virgilio, Oscar, Cesar, all surnamed Chacon, et al. vs. Trinidad Franco-Espital, et al.)

The spouses Juan Cuevas and Alejandra Tolentino had three children, namely, Juliana, Diego, and Flora. The spouses claimed ownership of two lots in Hagonoy, Taguig, Rizal, with a total area of 12,417 square meters, which Juan Cuevas had allegedly occupied even before 1894.

In 1953, after Juan and Alejandra had died, respondent Trinidad Franco-Espital, daughter of Juliana, and her husband Inocentes Espital applied for the issuance of an Original Certificate of Title (OCT) over the aforementioned lots before the then Court of First Instance, Pasig, Rizal. They claimed that Trinidad had purchased one lot from her brother and inherited the other from her mother Juliana. On September 30, 1953, the trial court granted the application and ordered the issuance of the title in favor of the applicants. Accordingly, on January 28, 1954, the Registrar of Deeds of Rizal issued to respondent Trinidad and her husband, Inocentes Espital, OCT No. 720 covering the lots in question.

On November 29, 1996, more than 42 years after the issuance of the aforementioned title to respondent Trinidad Espital and her husband, petitioners, who are descendants of Juan Cuevas' two other children, Diego and Flora, sued Trinidad and her three children before the Regional Trial Court, Branch 154, Pasig City, for annulment of title, partition, and damages on the ground that respondent Trinidad fraudulently procured the issuance of the title over the disputed properties to the alleged prejudice of petitioners' hereditary rights. Their action was dismissed, however, on the ground of prescription and laches. Petitioners appealed to the Court of Appeals which affirmed the trial court's decision. Their motion for reconsideration was likewise denied. Hence this petition.

Petitioners contend that as co-owners of the lots in question, their action for partition is imprescriptible. In addition, they contend that by virtue of such co-ownership, a constructive trust exists between the parties such that respondents are merely holding the disputed properties on behalf of the other co-owners not to mention that respondent Trinidad Franco-Espital and her husband procured title over the lots through fraud.

These contentions have no merit. Petitioners' reliance on Art. 494 of the Civil Code, which provides that prescription shall not run in favor of a co-owner, is misplaced. By the judgment of the then Court of First Instance of Pasig, Rizal, acting as a land registration court, decreeing the issuance of title over the properties in favor of respondent Trinidad Franco-Espital and her husband, the disputed lots became their exclusive property (See Gabas de Velayo v. Court of Appeals (99 SCRA 110 (1980)). Land registration proceedings are proceedings in rem and the judgment thereon, excepting only those who have appeared and filed their pleading, is binding on the whole world (Cachero v. Martin, 196 SCRA 601 (1991); Gestosani v. Insular Development Co., Inc., 21 SCRA 114 (1967)).

Even assuming that by reason of fraud, a constructive trust was created in favor of petitioners, the rule is that in such cases and so long as the land has not yet passed to an innocent purchaser for value, the aggrieved party may file an action for reconveyance on the ground of breach of constructive trust within ten years from the issuance of the original certificate of title over the property (Civil Code, Arts. 1144(2) and Art. 1456; Amerol v. Bagumbaran, 154 SCRA 396 (1987); Tale v. Court of Appeals, 208 SCRA 266 (1992)).

Since petitioners brought suit against respondents only in 1996, more than 42 years after the Torrens title over the disputed lots was issued in favor of respondent Trinidad Franco-Espital and her husband on January 28, 1954, their action, even if considered as one also for reconveyance and not merely for partition, is clearly barred by prescription.

Furthermore, laches, as found by the trial court and the Court of Appeals, has indeed set in against petitioners. Petitioners give no explanation why it took them more than four decades to question the title issued to respondent Trinidad Franco-Espital and her husband. They alleged in their brief before the Court of Appeals that they became aware of the title only "immediately prior to the filing of their complaint" but failed to substantiate such claim. In any event, considering that the 1953 proceedings before the Court of First Instance, Pasig, Rizal was in rem, petitioners are deemed to have been notified through the publication of the notices of the filing of the application and are deemed included in the order of general default issued by the court.

Petitioners' reliance on Sotto v. Teves, 86 SCRA 154 (1978), to support their contention that their Suit can prosper, is unavailing. In that case, the counsel for the three co-owners, who had prepared the instrument by which his clients expressly acknowledged the existence of their co-ownership, fraudulently caused the parcels of land commonly owned by the latter to be transferred in the name of one of the co-owners, who, in turn, subsequently bequeathed the parcels of land to him (counsel). For this reason, the Court ruled that such co-owner cannot deprive the others of their share in the properties and that the co-owners' counsel received the properties impressed with the subsisting trust not for himself but for the benefit of the cestui que trust, such that neither prescription nor laches will lie to bar recovery of the properties. These circumstances are absent in the case at bar and thus militate against the application of the aforementioned ruling.

For the foregoing reasons, the Court RESOLVED to DENY the petition for lack of showing that the Court of Appeals committed a reversible error.

Very truly yours,

Clerk of Court

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