Retzelyn Mae G.

Quintana

Heirs of Maximo Sanjorjo v. Heirs of Manuel Quijano (449 SCRA 15) Facts: On August 29, 1988, Free Patent No. VII-4-2974 was issued to Alan P. Quijano over a parcel of land identified as Lot 374, Cadastre 374-D wherein Original Certificate of Title (OCT) No. OP-38221 was issued in his name. Meanwhile, on November 11, 1988, Free Patent No. VII-4-3088 was issued in favor of Gwendolyn Q. Enriquez for Lot 379, Cadastre 374-D in which OCT No. OP-39847 was also issued in her name. Alan Quijano and Gwendolyn Enriquez are among the heirs of Manuel Quijnao who are the private respondents in this case. Enriquez filed an application for a free patent over Lot 376 of Cadastre 374-D with the Department of Environment and Natural Resources (DENR). She also filed an application for a free patent over Lot 378. However, the heirs of Guillermo Sanjorjo, filed a protest/complaint with the DENR praying for the cancellation of Free Patent Nos. VII-4-2974 and VII-4-3088, and for the dismissal of the free patent applications over Lots 376 and 378. The protestants/claimants alleged that the said parcels of land were originally owned by Ananias Ursal but were exchanged for a parcel of land, owned by their predecessor, Guillermo Sanjorjo, and from whom they inherited the property. However, the protestants/claimants withdrew their protest/complaint. Thus, on April 14, 1992, the Regional Executive Director rendered a decision giving due course to the applications. However, he ruled that the free patents over Lots 374 and 379 could no longer be disturbed since the complaint for the cancellation was filed more than one year from their issuance. On September 13, 1993, petitioners Vicente Sanjorjo, the heirs of Maximo Sanjorjo, and Spouses Inot, filed a complaint for cancellation of titles under tax declarations and reconveyance of possession of real property covering the Lots 374, 376, 378 and 379, against the private respondents, the heirs of Manuel Quijano and Vicente Gulbe. Petitioners allege that they are the owners of several parcels of land covering Lots 374, 376, 378 and 379 which they inherited from their grandfather the late Maximo Sanjorjo. According to the petitioners, sometime in 1983, the parcels of land in question were leased to Manuel Quijano for a two (2) year period. However, the lease was never paid for nor was possession of the said properties ever returned to the petitioners, despite repeated demands on Quijano to return the same. When Manuel Quijano died, his heirs divided among themselves the land belonging to the petitioners. Plaintiffs averred that they nor their ascendants have never sold, donated, or mortgaged any of these lots in question to the defendants or their ascendants. On the other hand, private respondents filed a motion to dismiss the complaint on the ground of res judicata based on the decision of the Regional Executive Director on April 14, 1992. They maintained that the decision of the Regional Executive Director had become final and executory and, as such, barred the petitioners action. They also invoked that the petitioners action was barred by the issuance of OCT No. OP-38221 covering Lot 374, and OCT No. OP-39847 covering Lot 379. The Regional Trial Court dismissed the complaint on the ground of res judicata. On appeal, petitioners limited the issue to Lots 374 and 379 only. The appellate court affirmed the order of the trial court although for a different reason, i.e., prescription.

Issue: WON petitioners action for the reconveyance of Lots 374 and 379, covered by OCT No. OP-38221 and OCT No. OP-39847 respectively is barred by prescription.

Held: No, the action for reconveyance of the lots in question has not yet prescribed. A Torrens title issued on the basis of the free patents became as indefeasible as one which was judicially secured upon the expiration of one year from date of issuance of the patent. However, an aggrieved party may still file an action for reconveyance based on implied or constructive trust, which prescribes in ten years from the date of the issuance of the Certificate of Title over the property provided that the property has not been acquired by an innocent purchaser for value. The presence of fraud or mistake creates an implied trust for the benefit of the rightful and legal owner giving him the right to seek reconveyance of the property. All that must be alleged in the complaint are two acts: (1) that the plaintiff was the owner of the land and, (2) that the defendant had illegally dispossessed him of the same. In their complaint, the petitioners clearly asserted that their predecessors-in-interest have long been the absolute and exclusive owners of the lots in question and that they were fraudulently deprived of ownership thereof when the private respondents obtained free patents and certificates of title in their names. Article 1456 of the New Civil Code provides that a person acquiring property through fraud becomes by operation of law a trustee of an implied trust for the benefit of the real owner of the property. The presence of fraud in this case created an implied trust in favor of the petitioners, giving them the right to seek reconveyance of the property from the private respondents. However, because of the trial courts dismissal order, the petitioners have been unable to prove their charges of fraud and misrepresentation. The petitioners action for reconveyance may not be said to have prescribed, for, basing the present action on implied trust, the prescriptive period is ten years. The questioned titles were obtained on August 29, 1988 and November 11, 1988, in OCT Nos. OP-38221 and OP-39847, respectively. The petitioners commenced their action for reconveyance on September 13, 1993. Since the petitioners cause of action is based on fraud, deemed to have taken place when the certificates of title were issued, the complaint filed on September 13, 1993 is, therefore, well within the prescriptive period.