VDA. DE RETERTO v.

BARZ
PRESCRIPTIVE PERIODS OF ACTION TO ENFORCE IMPLIED TRUSTS

G.R. No. 148180. December 19, 2001

FACTS: Petitioners are the heirs of Panfilo Retuerto, while respondents are the heirs of Pedro Barz who is the
sole heir of Juana Perez Barz. Juana Perez Barz was the original owner of Lot No. 896 having an area of 13,160
square meters. Before her death, Juana Perez executed a Deed of Absolute Sale in favor of Panfilo Retuerto over
a parcel of land, identified as Lot No. 896-A, a subdivision of Lot No. 896, with an approximate area of 2,505
square meters. On July 22, 1940, the Court Issued an Order directing the Land Registration Commission for the
issuance of the appropriate Decree in favor of Panfilo Retuerto over the said parcel of land. However, no such
Decree was issued as directed by the Court because, by December 8, 1941, the Second World War ensued in
the Pacific. However, Panfilo failed to secure the appropriate decree after the war.

Sometime in 1966, Pedro Barz, as the sole heir of Juana Perez, filed and application, with the then CFI of Cebu
for the confirmation of his title over Lot 896 which included the Lot sold to Panfilo Retuerto. The Court ruled
in his favor declaring him the lawful owner of the said property, and thus Original Certificate of Title No. 521
was issued. Lot No. 896-A however was continuously occupied by the petitioners. Thus, a confrontation arose
and as a result respondents filed an action on September 5, 1989 for “Quieting of Title, Damages and Attorney’s
Fees.” In their answer, petitioners claimed that they were the owners of a portion of the lot which was
registered under the name of Pedro Barz and therefore the issuance of the Original Certificate of Title in Pedro
Barz’s name did not vest ownership but rather it merely constituted him as a trustee under a constructive trust.
Petitioners further contend that Pedro Barz misrepresented with the land registration court that he inherited
the whole lot thereby constituting fraud on his part.

ISSUE: Whether or not petitioners are the rightful owner of the lot.

RULING: The contention is bereft of merit. Constructive trusts are created in equity to prevent unjust
enrichment, arising 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. Petitioners failed to substantiate their
allegation that their predecessor-in-interest had acquired any legal right to the property subject of the present
controversy. Nor had they adduced evidence to show that the certificate of title of Pedro Barz was obtained
through fraud.

Even assuming arguendo that Pedro Barz acquired title to the property through mistake or fraud, petitioners
are nonetheless barred from filing their claim of ownership. An action for reconveyance based on an implied
or constructive trust prescribes within ten years from the time of its creation or upon the alleged fraudulent
registration of the property. Since registration of real property is considered a constructive notice to all
persons, then the ten-year prescriptive period is reckoned from the time of such registering, filing or entering.
Thus, petitioners should have filed an action for reconveyance within ten years from the issuance of OCT No.
521 in November 16, 1968. This, they failed to do so.