EN BANC

[G.R. No. L-20954. May 29, 1967.]

ELIAS GALLAR, plaintiff-appellee, vs. HERMENEGILDA HUSAIN, ET AL., defendants. BONIFACIO HUSAIN, defendant-appellant.

D. E. Esmeralda for defendant-appellant.

E. B. Treñas for plaintiff-appellee.

SYLLABUS

1. SALE WITH PLIGHT TO REPURCHASE; REDEMPTION; REDEMPTIONER NOT ACTING IN BEHALF OF THE OWNER; EFFECT. — While it is indeed true that the first note written on the reverse side of the deed of sale speaks of the "redemption" of the land, there is no evidence to show that the vendee, Graciana Husain, was acting in behalf of her brother Teodoro Husain, in the exercise of the latter's right of redemption. How, unlike a debt which a third person may satisfy even against the debtor's will the right of repurchase may be exercised only by the vendor in whom the right is recognized by contract or by any person to whom the right may have been transferred. Graciana Husain must, therefore, be deemed to have acquired the land in her own right, subject only to Teodoro Husain's right of redemption. As the new owner she had a perfect right to dispose of the land as she in fact did when she exchanged it for a cattle with the appellee.

2. ID.; FAILURE TO REDEEM; EFFECT. — When Teodoro Husain failed to redeem the land within the stipulated period, i.e., January 9, 1925, its ownership became consolidated in the appellee. True the successive sales are in a private instrument, but they are valid just the same. By the delivery of possession of the land on April 2, 1919 the sale was consummated and title was transferred to the appellee.

3. ID.; ID.; ACTION TO QUIET TITLE. — Indeed, this action is not for specific performance; all it seeks is to quiet title, to remove the cloud cast on appellee's ownership as a result of appellant's refusal to recognize the sale made by their predecessor, lower court's order commanding appellants to execute a deed of conveyance of the land in favor of the appellee on the authority of Sapto vs. Fabiana, 103 Phil., 683; is, therefore, affirmed.

4. PRESCRIPTION OF ACTION; LAND IN POSSESSION OF APPELLEE; EFFECT. — As plaintiff and appellee is in possession of the land, the action is imprescriptible (Sapto vs. Fabiana, supra). Appellant's argument that the action has prescribed would be correct if they were in possession as the action to quiet title would then be an action for recovery of real property which must be brought within the statutory period of limitation governing such action.

D E C I S I O N

REGALA, J p:

This is an appeal directly from the Court of First Instance.

A hectare of rice land in Cabatuan, Iloilo, is the subject of this controversy. On January 9, 1919, Teodoro Husain, the owner, sold this land to Serapio Chichirita for P30, reserving for himself the right to repurchase it within six years. The deed of sale, written in the Ilongo dialect, is contained in a private instrument, the English translation of which reads:

"I, Teodoro Husain, single, of legal age, native and resident of the Municipality of Cabatuan, Province of Iloilo, Philippine Islands, because of the amount of Thirty Pesos (P30.00), Philippine currency, that was paid to me by

Serapio Chichirita, married to Florentina Muyuela, of legal age, native and resident of this Municipality of Cabatuan, Province of Iloilo, Philippine Islands, hereby declare that I am selling to the aforementioned vendee Serapio Chichirita, his heirs, and the heirs of the latter, my one parcel of rice land at Barrio Salacay of this Municipality of Cabatuan, and its descriptions are as follows:

One parcel of rice land that has a seedling of one cavan of palay, legal measure, bounded on the North, land of Juan Alcayaga, on the East, land of Agapito Suero, on the South, land of Elias Gallar and on the West, land of Juan Mina. The said land was inherited by me from my father who is now dead, Clemente Husain.

"I also declare that we have agreed that if the vendor shall have repaid to the vendee the aforementioned amount of P30.00 within six years from this date, the vendee or his heirs shall execute a document of repurchase in my favor, but if after the said term that he cannot return the aforementioned amount, this document shall be considered absolute and irrevocably consummated and in the meantime the vendee shall be the one to make use of the aforementioned land in accordance with the Ley Hipotecaria.

"In truth whereof, I have signed this document at Cabatuan, 9th day of January, 1919.

(Sgd.) TEODORO HUSAIN

"Signed in the presence of:

"(Sgd.) TOMAS JILOCA (Sgd.) EUSEBIO JOCANO"

Teodoro Husain did not redeem the land, although shortly after the execution of the deed of sale, that is, on January 28, 1919, the vendee a retro, Chichirita, transferred his right to Graciana Husain, sister of the vendor a retro, in what purports to be a resale of the land. The following annotation appears on the reverse side of the deed of pacto de retro sale:

"NOTA: The amount stated above was received by me from Graciana Husain and on my own voluntary will as redemption (gawad) of the same land, and because of this, I am transferring my rights as stated above to Graciana Husain in the presence of her husband Manuel Catalan, and in truth whereof I have signed at Cabatuan, 28 January, 1919.

Thumb markedSerapio Chichirita"

(English translation)

Graciana Husain subsequently transferred her rights to the land to appellee Elias Gallar in exchange for one cow. The transaction is recorded in a second note added on the reverse side of the deed of sale. The note reads:

"OTRA NOTA:

"The undersigned Graciana Husain, with the consent end knowledge of her husband Manuel Catalan, has agreed with Elias Gallar that all the rights that belongs to her, or she, Graciana Husain, is transferring to the said Elias Gallar in accordance with that stated in the original with the difference that this transfer is definite because it is their agreement in exchange of one head of cow described in the Certificate of Large Cattle existing in the Office or the Municipal Treasurer of this town. And in truth whereof, Graciana Husain signed hereunder together with her husband Manuel Catalan.

Cabatuan, April 2, 1919.

"(Sgd.) MANUEL CATALAN (Sgd.) GRACIANA HUSAIN"(English translation)

Possession of the land, together with the owner's duplicate of the certificate of title of Teodoro Husain, was delivered on the same occasion to appellee who since then has been in possession of the land.

In an affidavit dated March 6, 1928, Chichirita confirmed the "redemption" of the land by Graciana Husain. In another affidavit of the same date, Graciana Husain for her part confirmed having subsequently sold the land to the appellee.

In 1960, appellee asked the Cadastral Court for the issuance to him of a transfer certificate of title but the court dismissed his petition for lack of jurisdiction. (The court, however, granted appellee's request for the amendment of the certificate of title by changing the surname of "Osaen" to Husain.") He, therefore, filed this suit in the Court of First Instance of Iloilo on October 10, 1960 to compel Hermenegilda and Bonifacio Husain, as heirs of Teodoro Husain, to execute a deed of conveyance in his favor so that he could get a transfer certificate of title. He also asked for damages.

In their answer, Hermenegilda and Bonifacio Husain denied the sale and contended that the agreement between their father and Serapio Chichirita was that of a mortgage to secure a loan of P30. They claimed that the mortgage had been discharged on January 28, 1919 when Graciana Husain paid Teodoro Husain's debt to Chichirita. Hermenegilda and Bonifacio Husain likewise invoked prescription to bar appellee's action and asked for damages for the value of palay which they claimed they failed to receive on account of appellee's refusal to return possession of the land to them.

The trial court found that after acquiring the land from Teodoro Husain, Serapio Chichirita sold it to Graciana Husain who in turn sold it to the appellee. Accordingly, it ordered the appellants to execute a deed of conveyance of the land in favor of the appellee on the authority of our ruling in Sapto vs. Fabiana, 103 Phil., 683.

From this judgment, Bonifacio Husain brought this appeal to this Court. He contends that the land in question, which is identified as Lot No. 766 of the Cadastral Survey of Cabatuan, Iloilo and covered by Original Certificate of Title No. 4521 of the Register of Deeds of Iloilo, is not the same land which Teodoro Husain sold to Serapio Chichirita on January 9, 1919. According to appellant he raised this question at the trial but the lower court passed it up in its decision. The records on appeal do not disclose that appellant made such a claim. About the only hint that he was questioning the identity of the land sold by means of the deed of sale of January 9, 1919 was an objection to a question during the direct examination of the appellee. Thus the following appears on pages 20-21 of the transcript of notes taken on July 5, 1961:

"Q. According to this Exhibit C, you bought the lot referred to in Exhibit A which is Lot 766 in question, was bought by you for one cow. Do you know how much the worth of your cow during that time?

Atty. ESMERALDA [for defendants]

Objection, Your honor. The question is premised on Lot 766 but the document does not mention Lot 766.

xxx xxx xxx

"COURT

So your objection is that it lacks basis

"ATTY. ESMERALDA

It lacks basis, your Honor."

Otherwise, the records do not show any allegation made, much less evidence presented, by appellant of the supposed difference in the identity of the land sold in the deed of pacto de retro sale and the land now in question. Indeed, the only defense put up by appellant was that the pacto de retro sale was in reality a mortgage and that, at any rate, appellee's action was barred by the statute of limitations. In so doing, appellant joined issues with the appellee and he will not now be permitted to bring up new matters on appeal as this would constitute changing of theory — so utterly unfair to the adverse party. 1 that the lower court deliberately, perhaps, ignored the point. It may be added that an admission that the land described in the deed of sale and Lot No. 766 are one and the same is implicit in appellant's defense that the deed of sale did not express the true intention of the parties.

Still it is argued that no action can be brought on the basis of the deed of sale with a right of repurchase because the land in question was redeemed a few days after it had been sold. While it is indeed true that the first note written on the reverse side of the deed of sale speaks of the "redemption" of the land, there is no evidence to show that the vendee, Graciana Husain, was acting in behalf of her brother Teodoro Husain, in the exercise of the latter's right of redemption. Now, unlike a debt which a third party may satisfy even against the debtor's will 2 the right of repurchase may be exercised only by the vendor in whom the right is recognized by contract 3 or by any person to whom the right may have been transferred. 4 Graciano Husain must, therefore, be deemed to have acquired the land in her own right, subject only to Teodoro Husain's right of redemption. As the new owner she had a perfect right to dispose of the land as she in fact did when she exchanged it for a cattle with the appellee.

Now, when Teodoro Husain failed to redeem the land within the stipulated period, i.e., January 9, 1925, its ownership became consolidated in the appellee. True the successive sales are in a private instrument, but they are valid just the same. 5 By the delivery of possession of the land on April 2, 1919 the sale was consummated and title was transferred to the appellee. Indeed, this action is not for specific performance; all it seeks is to quiet title, 6 to remove the cloud cast on appellee's ownership as a result of appellant's refusal to recognize the sale made by the predecessor. And, as plaintiff-appellee is in possession of the land, the action is imprescriptible. 7 Appellant's argument that the action has prescribed would be correct if they were in possession as the action to quiet title would then be an action for recovery of real property which must be brought within the statutory period of limitation governing such actions. 8

Wherefore, the decision appealed from is affirmed, with costs against appellant.

THIRD DIVISION

[G.R. No. 70191. October 29, 1987.]

RODOLFO L. CORONEL, petitioner, vs. HONORABLE INTERMEDIATE APPELLATE COURT and ELIAS MERLAN, BRIGIDO MERLAN, JOSE MERLAN, TEODORICO NOSTRATIS, SEVERO JECIEL, SANTIAGO FERNAN and FORTUNATO OCAMPO, respondents.

D E C I S I O N

GUTIERREZ, JR., J p:

This is a petition to review the decision of the then Intermediate Appellate Court, now the Court of Appeals, which affirmed the decision and order of the then Court of First Instance of Cavite in Civil Case No. 651. The dispositive portion of the trial court's decision reads: llcd

"WHEREFORE, in the interest of moral justice, judgment is hereby rendered in favor of all the defendants and intervenor; hereby DISMISSING the complaint; however, the Court hereby orders instead the immediate partition of the land, subject-matter of this case, without prejudice to the plaintiff, and in accordance with the express but undivided apportionments corresponding to the original co-ownership, and pursuant to Transfer Certificate of Title No. T-1444 (EXHIBIT 4-b) of the Registry of Deeds for the Province of Cavite, as entered on May 19, 1960;

"Hereby declaring null and void, Transfer Certificate of Title No. T-75543 of the same registry.

"Without pronouncements as to costs." (At p. 71, Record on Appeal).

The dispositive portion of the questioned order of the trial court reads:

"WHEREFORE, under our present alternatives, as prayed for by defendants and Intervenor, through Lawyer Eleuterio A. Beltran, in their present incident recorded on January 10, 1980; the Decision subject matter hereof is amended in the following significance:

"Plaintiff Rodolfo Coronel is further ordered to submit a complete Inventory and Accounting of all the harvests of palay produced from the parcel of land (Lot 1950-A) subject matter of the present litigation, and to deliver the corresponding shares to the defendants and intervenors correlated with all the harvests of palay done by the plaintiffs; considering the unrebutted finality of the testimony of defendant Brigido Merlan in congruence with his supplication for the Inventory and Accounting of all the palay gathered by plaintiff Rodolfo Coronel who is likewise ordered, finally, to pay Lawyer Eleuterio Beltran as counsel for defendants and intervenors, Four Thousand (P4,000.00) Pesos for his professional services.

"Naic, Cavite, February 13, 1980." (pp. 88-89, Record on Appeal).

Petitioner Rodolfo Coronel filed a complaint for recovery of possession of a parcel of land registered under his name (Transfer Certificate of Title No. T-75543 in the Registry of Deeds for the Province of Cavite) and more particularly described as follows: LLphil

"A parcel of land (Lot 1950-A of the subdivision plan (LRC) Psd-104544, being a portion of Lot 1950, Naic, Estate, LRC Rec. No. 8340), situated in the Municipality of Naic, Province of Cavite, Island of Luzon. Bounded on the NE., pts. 12 to 14 by Irrigation Ditch; on the SE., and SW., pts. 14 to 15 and 15 to 1 by Lot 1950-D of the subdivision plan; on the SW., pts. 1 to 2 by Lot 2304, and pts. 2 to 11 by Lot 1951, both of Naic, Estate; and on the NW., pts. 11 to 12 by Road. . . .; containing an area of TWELVE THOUSAND ONE HUNDRED EIGHTY NINE (12,189) SQUARE METERS, more or less. . . ." (p. 10, Record on Appeal).

The complaint docketed as Civil Case No. 661 was filed against the private respondents Elias Merlan, Brigido Merlan, Jose Merlan, Teodorico Nostrates, Severo Jeciel, Santiago Fernan and Fortunato Ocampo before the then Court of First Instance of Cavite.

Coronel alleged in his complaint that at the time he purchased the subject parcel of land, the defendants (private respondents herein) were already occupying a portion thereof as "tenants at will" and that despite demands to vacate the premises, the defendants failed and refused to move out from the land.

In their Answer with Counterclaim and With Third-Party Complaint, the defendants denied that Coronel was the owner of the whole parcel of land and alleged that the lots occupied by them form part of a 1/3 undivided share of brothers Brigido Merlan and Jose Merlan which they inherited from their deceased father Gabriel Merlan, one of the three heirs of Bernabela Lontoc, the original owner of Lot No. 1950-A of the Naic Estate; that the Merlan brothers together with their two brothers and a sister never sold their undivided 1/3 share of the lot to anybody; that it was actually their other co-heirs who sold their undivided portions and that the plaintiff's claim of ownership of the whole parcel of land, if ever it has basis, is fraudulent, void, and without effect; that the Merlans have always been in open and peaceful possession of their undivided share of the lot throughout the years from the first sale by their co-heirs of Lot No. 1950-A in 1950; and that the other defendants were legitimate tenants. They prayed that the plaintiff respect their rights over 1/3 (4,063 square meters) of Lot No. 1950-A of the Naic Estate.

In their Third-Party Complaint, the defendants charged that the third-party defendants, owners of the remaining portion of Lot No. 1950-A, defrauded them when they sold the entire parcel.

Third-Party Defendants Marcelo Novelo, Paz Anuat, Daniel Anuat and Rosario Cailao, the defendants' co-owners of Lot No. 1950-A denied that they had something to do with the fraudulent acts or illegal machinations which deprived the defendants of their share in the subject parcel of land, and that what they sold was only their 2/3 undivided shares in said parcel. They also filed a cross-claim against their co-defendant Mariano Manalo whom they charged might have connived with others including the plaintiff to deprive the defendants and their co-heirs of their share in the subject parcel of land.

As stated earlier, the lower court ruled in favor of the defendants and on appeal, the lower court's decision was affirmed with the following modification by the then Intermediate Appellate Court, to wit: cdrep

"WHEREFORE, PREMISES CONSIDERED, there being no reversible error in the main decision appealed from dated December 7, 1979, and the Order of the Court dated February 13, 1980, the same are hereby AFFIRMED with the modification that after the word 'intervenor' in the main decision, the following shall be inserted:

"1) Declaring them as the absolute owners of the remaining 1/3 of the 2/8 portion pertaining to the late Bernabela Lontoc, namely, Lot 1950-A of the Naic Estate pursuant to Art. 845 of the New Civil Code." (At p. 29.).

The petitioner states that the appellate court erred as follows:

I

"THAT THE HONORABLE INTERMEDIATE APPELLATE COURT HAS ERRED IN NOT CONSIDERING THAT THE CLAIM OF PRIVATE RESPONDENTS TO THE LAND IN QUESTION HAS BEEN BARRED BY THE STATUTE OF LIMITATION OR BY ESTOPPEL BY LACHES.

II

"THAT THE HONORABLE INTERMEDIATE APPELLATE COURT HAS ERRED IN NOT CONSIDERING PETITIONER AS A PURCHASER IN GOOD FAITH AND FOR VALUABLE CONSIDERATION OF THE LAND IN QUESTION.

III

"THAT THE HONORABLE INTERMEDIATE APPELLATE COURT HAS ERRED IN DECLARING AS NULL AND VOID TRANSFER CERTIFICATE OF TITLE NO. T-75543 OF THE REGISTRY OF DEEDS OF CAVITE WHICH IS ALREADY PLACED IN THE NAME OF PETITIONER." (at pp. 1-2, Brief for the Petitioner).

The records show that the 12,189 square meter lot was part of a 48,755 square meter lot covered by Transfer Certificate of Title No. 3116 (RT-5010) of the Naic Estate located at Muzon, Naic, Cavite in the names of the spouses Valentin Gutierrez and Eligia Mangahas with a calculated portion of 2/8; spouses Jose Perea and Celestia Naces with a calculated portion of 3/8; Josefa Nazareno with a calculated portion of 1/8 and Bernabela Lontoc with a calculated portion of 2/8. In dispute in the instant case is the 2/8 share of Bernabela Lontoc which is equivalent to 12,189 square meters.

When Lontoc died in 1945, she was survived by three sets of heirs: 1) Bernardino Merlan, a grandson by her son Enrique Merlan who died in 1918; 2) Jose Merlan and Brigido Merlan, defendants in the case below and private respondents herein, Graciano Merlan, Agapito Merlan and Corazon Merlan, children of her son Gabriel who died in 1937; and 3) Daniel Anuat and Paz Anuat, children of her daughter Francisca Merlan.

In 1950, Bernardino Merlan, Daniel Anuat and Paz Anuat sold their 2/3 undivided portion of the lot to spouses Ignacio Manalo and Marcela Nobelo.

In 1960, Transfer Certificate of Title No. (T-3116) RT-5010 was cancelled by Transfer Certificate of Title No. T-1444 but carried the same afore-specified registered co-owners with an annotation carried from the former Transfer Certificate of Title, to wit: LLphil

" 'Entry No. 4953-SALE in favor of IGNACIO MANALO, married to Marcela Nobelo — covering the rights, interest and participation of Bernardino Merlan, married to Rosario Cailao, DANIEL ANUAT, married to Dionisia Loyola, and PAZ ANUAT, widow, on the share of BERNABELA LONTOC, consisting of twenty (20) gantas of seedling, on the land described in this Certificate of Title, for the sum of THREE THOUSAND PESOS (P3,000.00) by virtue of the deed of sale, executed before the Notary Public for the City of Cavite Mr. Primo D. Anuat (Doc. No. 652; page No. 77; Book No. VII; Series of 1950) on file in this Registry.

" 'Date of Instrument — March 11, 1950.

" 'Date of Inscription — March 13, 1950 at 2:35 p.m.'" (At pp. 2-3, Court of Appeals Decision; pp. 18-19, Rollo)

In 1968, Lot No. 1950 of the Naic Estate was subdivided according to a Sketch Plan (Exh. A). The sketch plan was approved by the Commission on Land Registration on August 15, 1969. Bernabela Lontoc's 2/8 portion of Lot No. 1950 became Lot No. 1950-A with an area of 12,189 square meters.

Sometime in 1970, Ignacio Manalo sold his interest in Lot 1950-A to Mariano Manalo. The pertinent portions of the deed of sale executed by spouses Ignacio Manalo and Marcela Nobelo in favor of spouses Mariano Manalo and Jorga Manalo states:

" 'Ang pagkamayari namin ng bahaging binabanggit sa itaas nito ay natatalikod ng titulo blg. T-3116 na gaya ng sumusunod:

" '(Entry No. 4953-SALE — In favor of IGNACIO MANALO, married to MARCELA NOVELO covering the rights, interests and participations of BERNADINO MERLAN married to ROSARIO CAILAO, DANIEL ANUAT married to DIONISIA LOYOLA, and PAZ ANUAT, widow, on the share of BERNABELA LONTOC, consisting of twenty (20) gantas of seedling, on the land described in this certificate of title of the sum of THREE THOUSAND PESOS (P3,000.00), by virtue of the deed of sale executed before the Notary Public for the City and Prov. of Cavite Mr. Primo D. Anuat (Doc. No. 652; Page No. 77; Book No. VII, Series of 1950) on file in this Registry. Date of instrument — March 13, 1950 — at 2:35 p.m. (sgd) ESCOLASTICO CUEVAS, Register of Deeds.

" 'Na alang-alang sa halagang ISANG LIBONG (P1,000.00) PISO salaping (blurred), na sa amin ay ibinayad ni G. MARIANO MANALO kasal kay JORGA MANALO may sapat na gulang, Filipino at ang tirahan at pahatirang sulat ay (blurred) Cavite, ay aming ipinagbili ng tuluyan (Venta Real y Absoluta) ang nabanggit na DALAWANG PUNG (20) salop na binhi, bahagi ng Lote blg. 1950 (blurred) tiyak sa lote na unahan nito sa naturang G. Mariano Manalo, sa kanyang tagamana o kahalili sa matuwid magpakailan man. Dito'y sinasaysay rin namin ang nasabing lupang tubigan ay walang sinasagutang pagkakautang kanino mang tao.' " (pp. 25-26, Rollo)

The deed of sale was registered in the Registry of Deeds in Cavite. Thereafter, Transfer Certificate of Title No. T-1444 was cancelled and Transfer Certificate of Title No. T-41175 was issued for Lot No. 1950-A of the Naic Estate in the name of Mariano Manalo, married to Jorga Lagos of Naic, Cavite. The certificate of title issued in the name of spouses Mariano Manalo and Jorga Lagos covered the whole Lot No. 1950-A without any mention of the 1/3 share of the private respondents in the parcel of land which was not sold to them.

Relying on the transfer certificate of title of the spouses Mariano Manalo and Jorga Lagos and the Sketch Plan (Exhibit "A"), petitioner Rodolfo Coronel then bought Lot No. 1950-A of the Naic Estate from the former for the consideration of P27,000.00 as per Doc. No. 341; Page No. 70; Book No. V; Series of 1974 in the Notarial Register of Notary Public Nonilo A. Quitangon of the City of Manila. The deed of sale was registered on December 19, 1974 causing the cancellation of Transfer Certificate of Title No. T-41175 and the issuance of Transfer Certificate of Title No. T-75543 in the name of petitioner Rodolfo Coronel.

Considering these facts, it is evident that the private respondents never sold their 1/3 share over Lot No. 1950-A of the Naic Estate; that what their co-owners sold to Ignacio Manalo was their 2/3 share of the same lot; and that Ignacio Manalo sold only the 2/3 share to third-party defendant Mariano Manalo, the predecessor-in-interest of petitioner Rodolfo Coronel. Consequently, there was a mistake when Transfer Certificate of Title No. 41175 was issued to Mariano Manalo covering the whole area of Lot No. 1950-A. Unfortunately, Mariano Manalo who was included as third-party defendant as well as the subject of a cross-claim filed by the other third-party defendants, and who could have shed light on this controversy was at the time residing abroad and was not served with the third-party complaint.

Moreover, private respondents Brigido Merlan and Jose Merlan were in open, peaceful and adverse possession of their 1/3 share over the lot even after 1950 when the first sale of the lot took place. The first time they knew about Coronel's claim over the whole lot was when they were served a copy of his complaint in 1975. LLjur

Under these circumstances, the first assignment of error is not well taken.

The petitioner contends that the claim of the private respondents over their 1/3 undivided portion of Lot No. 1950-A, 25 years after the registration of the deed of sale in favor of Ignacio Manalo in 1950 and more than five (5) years after the registration of the deed of sale in favor of Mariano Manalo is barred by prescription or laches. According to him, there was undue delay on the part of the private respondents to claim their 1/3 portion of Lot No. 1950-A of the Naic Estate and that the action for annulment should have been brought within four (4) years (Art. 1391, New Civil Code) counted from the date of the registration of the instrument.

The counterclaim of the private respondents which was in effect a reconveyance to them of their 1/3 undivided share over Lot No. 1950-A has not prescribed. As lawful possessors and owners of the lot in question their cause of action falls within the settled jurisprudence that an action to quiet title to property in one's possession is imprescriptible. Their undisturbed possession over a period of more than 25 years gave them a continuing right to seek the aid of a court of equity to determine the nature of the adverse claim of a third party and the effect of his own title. If at all, the private respondents' right to quiet title, to seek reconveyance and to annul Transfer Certificate of Title No. T-75543 accrued only in 1975 when they were made aware of a claim adverse to their own. It was only at that time that the statutory period of prescription may be said to have commenced to run against them. (Sapto, et al. v. Fabiana, 103 Phil. 683, Faja v. Court of Appeals, 75 SCRA 441; Caragay-Layno v. Court of Appeals, 133 SCRA 718).

In the same manner, there is no bar based on laches to assert their right over 1/3 of the disputed property. "Laches has been defined as the failure or neglect, for an unreasonable and unexplained length of time, to do that which by exercising due diligence could or should have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it." (Tejido v. Zamacoma, 138 SCRA 78, citing Tijam, et al. v. Sibonghanoy, et al., 23 SCRA 29, Sotto v. Teves, 86 SCRA 154) The facts of the case show that the private respondents have always been in peaceful possession of the 1/3 portion of the subject lot, exercising ownership thereto for more than 25 years disrupted only in 1975, when the petitioner tried to remove them by virtue of his torrens title covering the entire Lot 1950-A of the Naic Estate. It was only at this point that private respondents knew about the supposed sale of their 1/3 portion of Lot 1950-A of the Naic Estate and they immediately resisted. LLpr

The petitioner, however, insists that he is a purchaser in good faith. Thus, he argues that Transfer Certificate of Title No. T-41175 in the name of his successor-in-interest Mariano Manalo was very clear to the effect that there is no lien or encumbrance stated therein which could have been seen by his parents who represented him in the sale as he was then in the United States and by the lawyer contracted by him to execute or prepare the corresponding deed of sale.

This notwithstanding, we cannot close our eyes to the fact that neither the private respondents nor their co-owners of the subject parcel of land sold the former's share of the lot. Furthermore, even Ignacio Manalo to whom the third-party defendants sold their share resold only the 2/3 shares to Mariano Manalo, the successor-in-interest of the petitioner. Whether or not there was fraud or just a mistake or oversight of an employee of the Register of Deeds of Cavite is not clear from the records. The point is that the 1/3 undivided portion of the private respondents over Lot No. 1950-A was mistakenly included in the transfer certificate of title of Mariano Manalo.

We apply equitable considerations:

"Nor does the mere fact that respondent-appellee Marcelo Coral could show a certificate of Torrens Title in his favor conclude the matter, the question of fraud having been seasonably raised and the remedy of reconveyance sought. Only recently, in Philippine Commercial and Industrial Bank v. Villalva, (L-28194, November 24, 1972, 48 SCRA 31) this Court had occasion to state: 'There is, however, a countervailing doctrine, certainly not of lesser weight, that mitigates the harshness of the iron-clad application of the principle attaching full faith and credit to a Torrens certificate. It is inspired by the highest concept of what is fair and what is equitable. It would be a sad day for the law if it were to be oblivious to the demands of justice. The acceptance accorded the Torrens system of registration would certainly be impaired if it could be utilized to perpetrate fraud and chicanery. If it were thus, then no stigma would attach to a claim based solely on a narrow and literal reading of a statutory prescription, devoid of any shadow of moral right. That is not the juridical norm as recognized by this Court. Deceit is not to be countenanced; duplicity is not to be rewarded. Witness the favor with which jurisprudence has looked on the action for reconveyance as well as the recognition of the constructive trust. There is thus the stress of rectitude.' (Ibid, p. 39)." (Monticines v. Court of Appeals, 53 SCRA 14, 21; Emphasis supplied).

Moreover, we ruled in an earlier case that:

xxx xxx xxx

". . . The simple possession of a certificate of title, under the Torrens System, does not necessarily make the possessor a true owner of all the property described therein. If a person obtains a title, under the Torrens system, which includes by mistake or oversight land which cannot be registered under the Torrens systems, he does not, by virtue of said certificate alone, become the owner of the lands illegally included. (Ledesma v. Municipality of Iloilo, 49 Phil. 769, 773, citing Legarda and Prieto v. Saleeby, 31 Phil., 590; see also Caragay-Layno v. Court of Appeals, supra)."

We find no reversible error on the part of the lower courts in recognizing the ownership of the private respondents over 1/3 of Lot No. 1950-A of the Naic Estate. The petitioner is bound to recognize the lien in favor of the private respondents which was mistakenly excluded and therefore not inscribed in the torrens title of the land of his predecessors-in-interest. LLphil

WHEREFORE, the instant petition is hereby DISMISSED. The questioned decision is AFFIRMED but with a modification to the effect that the statement "Hereby declaring null and void, Transfer Certificate of Title No. T-75543 of the same registry" is deleted. Instead,

the Registrar of Deeds of Cavite is ordered to segregate the 1/3 portion of Lot No. 1950-A of the Naic Estate (4,063 square meters) from the entire portion embraced in Transfer Certificate of Title No. T-75543 and issue a new certificate of title in favor of the heirs of Gabriel Merlan over the disputed one-third portion and another new certificate of title over the remaining two-thirds portion of the land in favor of petitioner Rodolfo Coronel after cancelling Transfer Certificate of Title No. T-75543. The questioned order is also AFFIRMED.

No costs.

FIRST DIVISION

[G.R. No. 52064. December 26, 1984.]

JULIANA CARAGAY-LAYNO, Assisted by Her Husband, BENITO LAYNO, petitioner, vs. HONORABLE COURT OF APPEALS and SALVADOR ESTRADA as Administrator of the Estate of the Deceased, MARIANO DE VERA, respondents.

Pedro G. Peralta for petitioner.

Andres T. Gutierrez for private respondent.

SYLLABUS

1. CIVIL LAW; LAND REGISTRATION; TORRENS TITLE; MERE POSSESSION THEREOF NOT CONCLUSIVE AS TO HOLDER'S TRUE OWNERSHIP OF ALL PROPERTY DESCRIBED THEREIN. — The foregoing conclusion does not necessarily wreak havoc on the indefensibility of a Torrens title. For, mere possession of a certificate of title under the Torrens System is not conclusive as to the holder s true ownership of all the property described therein for he does not by virtue of said certificate alone become the owner of the land illegally included. A Land Registration Court has no jurisdiction to decree a lot to persons who have never asserted any right of ownership over lt.

2. ID.; PRESCRIPTION; AN ACTION TO QUIET TITLE TO PROPERTY IN ONE'S POSSESSION IS IMPRESCRIPTIBLE. — Prescription cannot be invoked against JULIANA for the reason that as lawful possessor and owner of the Disputed Portion, her cause of action for reconveyance which, in effect seeks to quiet title to the property, falls within settled jurisprudence that an action to quiet title to property in one's possession is imprescriptible (Sapto, et al. vs. Fabiana, 103 Phil. 683, 687 [1958]). Her undisturbed possession over a period of fifty-two (52) years gave her a continuing right to seek the aid of a Court of equity to determine the nature of the adverse claim of a third party and the effect on her own title.

D E C I S I O N

MELENCIO-HERRERA, J p:

Respondent Appellate Court, then the Court of Appeals, affirmed in toto the judgment of the former Court of First Instance of Pangasinan, Branch III, at Dagupan adjudging private respondent entitled to recover possession of a parcel of land and ordering petitioners, as defendants below, to vacate the premises. Petitioners, as paupers, now seek a reversal of that judgment.

It was established by a relocation survey that the Disputed Portion is a 3,732 square-meter-area of a bigger parcel of sugar and coconut land (Lot No. 1, Psu-24206 [Case No. 44, GLRO Rec. No. 117]), with a total area of 8,752 square meters, situated at Calasiao, Pangasinan. The entire parcel is covered by Original Certificate of Title No. 63, and includes the adjoining Lots 2 and 3, issued on 11 September 1947 in the name of Mariano M. DE VERA, who died in 1951 without issue. His intestate estate was administered first by his widow as later by her nephew, respondent Salvador Estrada.

Petitioner, JULIANA Caragay, and the decedent, Mariano DE VERA, were first cousins, "both orphans, who lived together under one roof in the care of a common aunt."

As Administratrix, DE VERA's widow filed in Special Proceedings No. 4058 of the former Court of First Instance of Pangasinan, Branch III, an Inventory of all properties of the deceased, which included "a parcel of land in the poblacion of Calasiao, Pangasinan, containing an area of 5,417 square meters, more or less, and covered by Tax Declaration No. 12664."

Because of the discrepancy in area mentioned in the Inventory as 5,147 square meters (as filed by the widow), and that in the title as 8,752 square meters, ESTRADA repaired to the Disputed Property and found that the northwestern portion, subsequently surveyed to be 3,732 square meters, was occupied by petitioner-spouses Juliana Caragay Layno and Benito Layno. ESTRADA demanded that they vacate the Disputed Portion since it was titled in the name of the deceased DE VERA, but petitioners refused claiming that the land belonged to them and, before them, to JULIANA's father Juan Caragay.

ESTRADA then instituted suit against JULIANA for the recovery of the Disputed Portion (Civil Case No. D-2007) which she resisted, mainly on the ground that the Disputed Portion had been fraudulently or mistakenly included in OCT No. 63, so that an implied or constructive trust existed in her favor. She then counterclaimed for reconveyance of property in the sense that title be issued in her favor. LLphil

After hearing, the Trial Court rendered judgment ordering JULIANA to vacate the Disputed Portion.

On appeal, respondent Appellate Court affirmed the Decision in toto.

Before us, JULIANA takes issue with the following finding of respondent Court:

"Although Section 102 of Act 496 allows a Petition to compel a trustee to reconvey a registered land to the cestui que trust (Severino vs. Severino, 44 Phil. 343; Escobar vs. Locsin, 74 Phil. 86) this remedy is no longer available to Juliana Caragay. Mariano de Vera's land, Lot 1, Psu-24206, was registered on September 11, 1947 (Exhibit 'C') and it was only on March 28, 1967 when the defendants filed their original answer that Caragay sought the reconveyance to her of the 3,732 square meters. Thus, her claim for reconveyance base on implied or constructive trust has prescribed after 10 years (Bananga vs. Soler, L-15717, June 30, 1961; J.M. Tuason & Co. vs. Magdangal, L-15539, Jan. 30, 1962; Alzona vs. Capunitan, 4 SCRA 450). In other words, Mariano de Vera's Original Certificate of Title No. 63 (Exhibit 'C') has become indefeasible." 1

We are constrained to reverse.

The evidence discloses that the Disputed Portion was originally possessed openly, continuously and uninterruptedly in the concept of an owner by Juan Caragay, the deceased rather of JULIANA, and had been declared in his name under Tax Declaration No. 28694 beginning with the year 1921 (Exhibit "2-C"), later revised by Tax Declaration No. 2298 in 1951 (Exhibit "2-B"). Upon the demise of her father in 1914, JULIANA adjudicated the property to herself as his sole heir in 1968 (Exhibit "4") and declared it in her name under Tax Declaration No. 22522 beginning with the year 1959 (Exhibit "2-A"), later cancelled by TD No. 3539 in 1966 (Exhibit "2"). Realty taxes were also religiously paid from 1938 to 1972 (Exhibits "3-A" to "3-H"). Tacking the previous possession of her father to her own, they had been in actual, open, continuous and uninterrupted possession in the concept of owner for about forty five (45) years, until said possession was disturbed in 1966 when ESTRADA informed JULIANA that the Disputed Portion was registered in Mariano DE VERA's name.

To substantiate her claim of fraud in the inclusion of the Disputed Portion in OCT No. 68, JULIANA, an unlettered woman, declared that during his lifetime, DE VERA, her first cousin, and whom she regarded as a father as he was much older, borrowed from her the Tax Declaration of her land purportedly to be used as collateral for his loan and sugar quota application; that relying on her cousin's assurances, she acceded to his request and was made to sign some documents the contents of which she did not ever know because of her ignorance; that she discovered the fraudulent inclusion of the Disputed Portion in OCT No. 63 only in 1966 when ESTRADA so informed her and sought to eject them.

Of significance is the fact, as disclosed by the evidence, that for twenty (20) years from the date of registration of title in 1947 up to 1967 when this suit for recovery of possession was instituted, neither the deceased DE VERA up to the time of his death in 1951, nor his successors-in-interest, had taken steps to possess or lay adverse claim to the Disputed Portion. They may, therefore be said to be guilty of laches as would effectively derail their cause of action. Administrator ESTRADA tools interest in recovering the said portion only when he noticed the discrepancy in areas in the Inventory of Property and in the title.

Inasmuch as DE VERA had failed to assert any rights over the Disputed Portion during his lifetime, nor did he nor his successors-in-interest possess it for a single moment; but that, JULIANA had been in actual, continuous and open possession thereof to the exclusion of all and sundry, the inescapable inference is, fraud having been unsubstantiated, that it had been erroneously included in OCT No. 63. The mistake is confirmed by the fact that deducting 3,732 sq. ms., the area of the Disputed Portion from 8,752 sq. ms., the area of Lot 1 in OCT No. 63, the difference is 5,020 sq. ms., which closely approximates the area of 5,147 sq. ms., indicated in the Inventory of Property of DE VERA. In fact, the widow by limiting the area in said Inventory to only 5,147 sq. ms., in effect, recognized and admitted that the Disputed Portion of 3,132 sq. ms. did not form part of the decedent's estate.

The foregoing conclusion does not necessarily wreak havoc on the indefeasibility of a Torrens title. For, mere possession of a certificate of title under the Torrens System is not conclusive as to the holder's true ownership of all the property described therein for he does not by virtue of said certificate alone become the owner of the land illegally included. 2 A Land Registration Court has no jurisdiction to decree a lot to persons who have never asserted any right of ownership over it. cdrep

" . . . Obviously then, the inclusion of said area in the title of Lot No. 8151 is void and of no effect for a land registration Court has no jurisdiction to decree a lot to persons who have put no claim in it and who have never asserted any right of ownership over it. The Land Registration Act as well as the Cadastral Act protects only the holders of a title in good faith and does not permit its provisions to be used as a shield for the commission of fraud, or that one should enrich himself at the expense of another." 3

JULIANA, whose property had been wrongfully registered in the name of another, but which had not yet passed into the hands of third parties, can properly seek its reconveyance.

"The remedy of the landowner whose property has been wrongfully or erroneously registered in another's name is, after one year from the date of the decree, not to set aside the decree, but, respecting the decree as incontrovertible and no longer open to review, to bring an ordinary action in the ordinary court of justice for reconveyance or, if the property has passed into the hands of an innocent purchaser for value, for damages." 4

Prescription cannot be invoked against JULIANA for the reason that as lawful possessor and owner of the Disputed Portion, her cause of action for reconveyance which, in effect, seeks to quiet title to the property, falls within settled jurisprudence that an action to quiet title to property in one's possession is imprescriptible. 5 Her undisturbed possession over a period of fifty two (52) years gave her a continuing right to seek the aid of a Court of equity to determine the nature of the adverse claim of a third party and the effect on her own title. 6

Besides, under the circumstances, JULIANA's right to quiet title, to seek reconveyance, and to annul OCT. No. 63 accused only in 1966 when she was made aware of a claim adverse to her own. It was only then that the statutory period of prescription may be said to have commenced to run against her, following the pronouncement in Faja vs. Court of Appeals, supra, a case almost identical to this one.

" . . . Inasmuch as it is alleged in paragraph 3 of Frial's complaint, that Felipa Faja has been in possession of the property since 1945 up to the present for a period of 30 years, her cause of action for reconveyance, which in effect seeks to quiet her title to the property, falls within that rule. If at all, the period of prescription began to run against Felipa Faja only from the time she was served with copy of the complaint in 1975 giving her notice that the property she was occupying was titled in the name of Indelecio Frial. There is settled jurisprudence that one who is in actual possession of a piece of land claiming to be 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 third party and its effect on his own title, which right can be claimed only by one who is in possession. No better situation can be conceived at the moment for Us to apply this rule on equity than that of herein petitioners whose mother, Felipa Faja, as in possession of the litigated property for no less than 30 years and was suddenly confronted with a claim that the land she had been occupying and cultivating all these years, was titled in the name of a third person. We hold that in such a situation the right to quiet title to the property, to seek its reconveyance and annul any certificate of title covering it, accrued only from the time the one in possession was made aware of a claim adverse to his own, and it is only then that the statutory period of prescription commences to run against such possessor."

WHEREFORE, the judgment under review is hereby REVERSED and SET ASIDE, and another one entered ordering private respondent Salvador Estrada, as Administrator of the Estate of the Deceased, Mariano de Vera, to cause the segregation of the disputed portion of 3,732 square meters forming part of Lot No. 1, Psu-24206, Case No. 44, GLRO Rec. No. 117, presently occupied by petitioner Juliana Caragay-Layno, and to reconvey the same to said petitioner. After the segregation shall have been accomplished, the Register of Deeds of Pangasinan is hereby ordered to issue a new certificate of title covering said 3,732 sq. m. portion in favor of petitioner, and another certificate of title in favor of the Estate of the deceased, Mariano de Vera covering the remaining portion of 5,0520 square meters. No costs. cdll

SO ORDERED.

THIRD DIVISION

[G.R. No. 95748. November 21, 1996.]

ANASTACIA VDA. DE AVILES, ET AL., petitioners, vs. COURT OF APPEALS and CAMILO AVILES, respondents.

Ulysses T. Sevilla for petitioners.

Teodoro C. Fernandez and Manuel Y. Fernandez for private respondent.

SYLLABUS

1. REMEDIAL LAW; SPECIAL CIVIL ACTIONS; QUIETING OF TITLE; A BOUNDARY DISPUTE IS NOT COGNIZABLE IN A SPECIAL CIVIL ACTION TO QUIET TITLE. — The facts presented unmistakably constitute a clear case of boundary dispute, which is not cognizable in a special civil action to quiet title. Quieting of title is a common law remedy for the removal of any cloud upon or doubt or uncertainty with respect to title to real property. The Civil Code authorizes the said remedy in the following language: "Art. 476. Whenever there is a cloud on title to real property or any interest therein, by reason of any instrument, record, claim, encumbrance or proceeding which is apparently valid or effective but is, in truth and in fact, invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title, an action may be brought to remove such cloud or to quiet the title. An action may also be brought to prevent a cloud from being cast upon a title to real property or any interest therein." In fine, to avail of the remedy of quieting of title, a plaintiff must show that there is an instrument, record, claim, encumbrance or proceeding which constitutes or casts a cloud, doubt, question or shadow upon the owner's title to or interest in real property. Thus, petitioners have wholly misapprehended the import of the foregoing rule by claiming that respondent Court erred in holding that there was "no . . . evidence of any muniment of title, proceeding, written contract, . . .," and that there were, as a matter of fact, two such contracts, viz., (i) the Agreement of Partition executed by private respondent and his brothers (including the petitioners' father and predecessor-in-interest), in which their respective shares in the inherited property were agreed upon, and (ii) the Deed of Sale evidencing the redemption by petitioner Anastacia Vda. de Aviles of the subject property in a foreclosure sale. However, these documents in no way constitute a cloud or cast a doubt upon the title of petitioners. Rather, the uncertainty arises from the parties' failure to situate and fix the boundary between their respective properties. An action to quiet title or to remove cloud may not be brought for the purpose of settling a boundary dispute. CaATDE

2. ID.; ID.; DECLARATORY RELIEF; A BOUNDARY DISPUTE IS LIKEWISE NOT COGNIZABLE IN AN ACTION FOR DECLARATORY RELIEF UNDER RULE 64 OF THE RULES OF COURT. — Rule 64 of the Rules of Court, dealing with actions for declaratory relief, specifies in Section 1 thereof the grounds, conditions precedent or requisites for bringing such petitions. This Court has previously held that — "Under this rule, only a person who is interested 'under a deed, will, contract or other written instrument, and whose rights are affected by a statute or ordinance, may bring an action to determine any question of construction or validity arising under the instrument or statute and for a declaration of his rights or duties thereunder.' This means that the subject matter must refer to a deed, will, contract or other written instrument, or to a statute or ordinance, to warrant declaratory relief. Any other matter not mentioned therein is deemed excluded This is under the principle of expressio unius est exclusio alterius." Inasmuch as the enumeration of the causes, grounds or conditions precedent in the first paragraph of said Sec. 1 is exclusive, by parity of reasoning, it follows that similar remedies provided for in the second paragraph of the same section would also be marked with the same exclusivity as to bar any other cause possibly clouding one's title as a ground for such petitions. Thus, even assuming arguendo that the action to quiet title had been brought under Rule 64, the same would still not have prospered, the subject matter thereof not

referring to "a deed, will, contract or other written instrument, or to a statute or ordinance," but to a boundary dispute, and therefore not warranting the grant of declaratory relief.

3. ID.; ID.; THE PROPER ACTION TO SETTLE A BOUNDARY DISPUTE IS EITHER AN ACTION FOR FORCIBLE ENTRY UNDER RULE 70, OR AN ACTION FOR RECOVERY OF POSSESSION DE FACTO. — From another perspective, we hold that the trial court (and likewise the respondent Court) cannot, in an action for quieting of title, order the determination of the boundaries of the claimed property, as that would be tantamount to awarding to one or some of the parties the disputed property in an action where the sole issue is limited to whether the instrument, record, claim, encumbrance or proceeding involved constitutes a cloud upon the petitioners' interest or title in and to said property. Such determination of boundaries is appropriate in adversarial proceedings where possession or ownership may properly be considered and where evidence aliunde, other than the "instrument, record, claim, encumbrance or proceeding" itself, may be introduced. An action for forcible entry, whenever warranted by the period prescribed in Rule 70, or for recovery of possession de facto, also within the prescribed period, may be availed of by the petitioners, in which proceeding the boundary dispute may be fully threshed out. ISDCHA

D E C I S I O N

PANGANIBAN, J p:

Is the special civil action of Quieting of Title under Rule 64 the proper remedy for settling a boundary dispute? Did the respondent Court 1 commit a reversible error when it did not declare the respective rights of the parties over the disputed property in said action?

These are the key issues raised in this petition to review on certiorari the Decision 2 of the respondent Court promulgated on September 28, 1990 in CA-G.R. CV No. 18155, which affirmed the decision dated December 29, 1987 of the Regional Trial Court, Branch 38, 3 Lingayen, Pangasinan, dismissing a complaint for quieting of title.

The Facts

In an action for quieting of title commenced before the aforementioned trial court, the following facts, "stripped of unnecessary verbiage" were established by the respondent Court: 4

"PLAINTIFFS aver that they are the actual possessors of a parcel of land situated in Malawa, Lingayen, Pangasinan, more particularly described as fishpond, cogonal, unirrigated rice and residential land, bounded on the N by Camilo Aviles; on the E by Malawa River, on the S by Anastacio Aviles and on the W by Juana and Apolonio Joaquin, with an area of 18,900 square meters and declared under Tax Declaration No. 31446. This property is the share of their father, Eduardo Aviles and brother of the defendant, in the estate of their deceased parents, Ireneo Aviles and Anastacia Salazar.

SINCE 1957, Eduardo Aviles was in actual possession of the afore-described property. In fact, the latter mortgaged the same with the Rural Bank and Philippine National Bank branch in Lingayen. When the property was inspected by a bank representative, Eduardo Aviles, in the presence of the boundary owners, namely, defendant Camilo Aviles, Anastacio Aviles and Juana and Apolonio Joaquin(,) pointed to the inspector the existing earthen dikes as the boundary limits of the property and nobody objected. When the real estate mortgage was foreclosed, the property was sold at public auction but this was redeemed by plaintiffs' mother and the land was subsequently transferred and declared in her name.

ON March 23, 1983, defendant Camilo Aviles asserted a color of title over the northern portion of the property with an area of approximately 1,200 square meters by constructing a bamboo fence (thereon) and moving the earthen dikes, thereby molesting and disturbing the peaceful possession of the plaintiffs over said portion.

UPON the other hand, defendant Camilo Aviles admitted the agreement of partition (Exh. '1') executed by him and his brothers, Anastacio and Eduardo. In accordance therewith, the total area of the property of their parents which they divided is 46,795 square meters and the area alloted (sic) to Eduardo Aviles is 16,111 square meters more or less, to Anastacio Aviles is 16,214 square meters more or less, while the area alloted to defendant

Camilo Aviles is 14,470 square meters more or less. The respective area(s) alloted to them was agreed and measured before the execution of the agreement but he was not present when the measurement was made. Defendant agreed to have a smaller area because his brother Eduardo asked him that he wanted a bigger share because he has several children to support. The portion in litigation however is part of the share given to him in the agreement of partition. At present, he is only occupying an area of 12,686 square meters which is smaller than his actual share of 14,470 square meters. Tax Declarations Nos. 23575, 481 and 379 covering his property from 1958 (Exhs. '7', '8' and '9') show that the area of his property is 14,470 square meters. The riceland portion of his land is 13,290 square meters, the fishpond portion is 500 square meters and the residential portion is 680 square meters, or a total of 14,470 square meters. That the topography of his land is not the same, hence, the height of his pilapils are likewise not the same."

In its decision dated December 29, 1987, the trial court disposed of the case thus: 5

"WHEREFORE, premises considered, judgment is hereby rendered as follows:

1. Ordering the parties to employ the services of a Land Surveyor of the Bureau of Lands, Region I, San Fernando, La Union, to relocate and determine the extent and the boundary limit of the land of the defendant on its southern side in order that the fourteen thousand four hundred seventy (14,470) square meters which is the actual area given to the defendant be determined;

2. Ordering the complaint dismissed for lack of basis and merits;

3. Ordering the plaintiffs to pay the defendant the sum of two thousand (P2,000.00) pesos as attorney's fees and to further pay the costs of the proceedings;

4. All other claims are denied for lack of basis."

Dissatisfied with the trial court's decision, petitioners appealed to the respondent appellate Court. In its now-assailed Decision, the Court of Appeals affirmed in part the decision of the trial court, reasoning that a special civil action for quieting of title is not the proper remedy for settling a boundary dispute, and that petitioners should have instituted an ejectment suit instead. The dispositive portion of the impugned Decision reads as follows:

"WHEREFORE, in view of the foregoing, the decision dated December 29, 1987 dismissing the complaint is hereby AFFIRMED but without necessarily agreeing with the ration d'etre (sic) proferred by the Court a quo. The portion thereof ordering the parties to employ the service of a land surveyor to relocate and determine the extent and boundary limit of the land of the defendant on its southern portion in order that the fourteen thousand four hundred seventy (14,470) square meters which is the actual area given to the defendant be determined is hereby REVERSED and SET ASIDE. Costs against plaintiffs-appellants.

The Issues

Disagreeing with the respondent Court, petitioners now raise the following issues: 6

"a. Whether or not the Hon. Court of Appeals is correct when it opined that the . . . complaint for quieting of title instituted by the petitioners against private respondent before the court a quo is not the proper remedy but rather, it should be a case for ejectment (sic).

b. Whether or not the Hon. Court of Appeals is correct in rendering a decision, now subject of the instant petition, without fully determining the respective rights of the herein parties."

Petitioners deem to be "without basis" the respondent Court's holding that quieting of title is not the proper remedy in the case a quo. They assert that private respondent is occupying the disputed lot because he claimed it to be part of his share in the partitioned property of his parents, whereas petitioners are claiming the said lot as part and parcel of the land allotted to Eduardo Aviles, petitioners' predecessor-in-interest. They contend that they have been occupying the aforesaid land as heirs of Eduardo Aviles in

"open, actual, continuous, peaceful, public and adversed (sic) (possession) against the whole world." Further, they argue that, if indeed the disputed lot belonged to private respondent, why then did it take him "almost 26 long years from June 27, 1957 or until March 27, 1983" to assert his ownership; why did he not "assert his ownership" over the property when Eduardo Aviles was still alive; and why did he not take any "action" when the mortgage over the disputed property was foreclosed? 7

Private respondent corrects the petitioners' claim in regard to the date when he had the bamboo fence constructed. He alleges that the petitioners maliciously concocted the story that private respondent had purportedly encroached some 1,200 meters on their property when, in fact, "he was merely repairing the old bamboo fence existing where it had always been since 1957." 8

The Court 's Ruling

First Issue: Quieting of Title Not Proper Remedy For Settling Boundary Dispute

We agree with respondent Court. The facts presented unmistakably constitute a clear case of boundary dispute, which is not cognizable in a special civil action to quiet title.

Quieting of title is a common law remedy for the removal of any cloud upon or doubt or uncertainty with respect to title to real property. 9

The Civil Code authorizes the said remedy in the following language:

"Art. 476. Whenever there is a cloud on title to real property or any interest therein, by reason of any instrument, record, claim, encumbrance or proceeding which is apparently valid or effective but is, in truth and in fact, invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said title, an action may be brought to remove such cloud or to quiet the title.

An action may also be brought to prevent a cloud from being cast upon a title to real property or any interest therein."

In fine, to avail of the remedy of quieting of title, a plaintiff must show that there is an instrument, record, claim, encumbrance or proceeding which constitutes or casts a cloud, doubt, question or shadow upon the owner's title to or interest in real property. Thus, petitioners have wholly misapprehended the import of the foregoing rule by claiming that respondent Court erred in holding that there was "no . . . evidence of any muniment of title, proceeding, written contract, . . .", and that there were, as a matter of fact, two such contracts, viz., (i) the Agreement of Partition executed by private respondent and his brothers (including the petitioners' father and predecessor-in-interest), in which their respective shares in the inherited property were agreed upon, and (ii) the Deed of Sale evidencing the redemption by petitioner Anastacia Vda. de Aviles of the subject property in a foreclosure sale. However, these documents in no way constitute a cloud or cast a doubt upon the title of petitioners. Rather, the uncertainty arises from the parties' failure to situate and fix the boundary between their respective properties.

As correctly held by the respondent Court," (i)n fact, both plaintiffs and defendant admitted the existence of the agreement of partition dated June 8, 1957 and in accordance therewith, a fixed area was alloted (sic) to them and that the only controversy is whether these lands were properly measured. There is no adverse claim by the defendant "which is apparently valid, but is, in truth and in fact, invalid, ineffective, voidable, or unenforceable" and which constitutes a cloud thereon.

Corollarily, and equally as clear, the construction of the bamboo fence enclosing the disputed property and the moving of earthen dikes are not the "clouds" or "doubts" which can be removed in an action for quieting of title.

An action to quiet title or to remove cloud may not be brought for the purpose of settling a boundary dispute. The precedent on this matter cited by the respondent Court in its Decision is herewith reproduced in full: 10

"In Ashurst v. McKenzie (1890) 92 Ala. 484, 9 So. 262, where the complainants' predecessor in title and the defendant had, during their occupancy, destroyed and obliterated the boundary line between their adjoining tracts of land, and there was now a dispute as to its location, it was held that a bill did not lie to remove a cloud on the complainants' title. The court said: 'There is no allegation or evidence of any muniment of title, proceeding, written contract, or paper showing any color of title in the defendant, which could cast a shadow on the title of complainants to any part of the land; there is no overlapping of description in the muniments held by

either. The land of complainants and defendant join. The line which separates them is in dispute and is to be determined by evidence aliunde. Each admits that the other has title up to his line wherever it may be, and the title papers of neither fix its precise location. So that there is no paper the existence of which clouds the title of either party, and nothing could be delivered up and cancelled under the decree of the court undertaking to remove a cloud. "

Another similarly instructive precedent reported in the same reference is also quoted below:

"In Kilgannon v. Jenkinson (1883) 51 Mich. 240, 16 N.W. 390, the court, dismissing a bill to quiet title, said: "The fundamental dispute is about the correct position of the line between lots 3 and 7. The case is not one where a complainant in possession of a specific piece of land, and a defendant out of possession, but claiming some right or title, are contending as to which one has the better right to that same parcel; but it is a case where the titles are not opposed, and the basis and existence of all right and claim depend simply upon where the original line runs. When that is once settled, there can remain no semblance of claim or cloud to be passed on , and the issue on that particular question is one regularly triable at law . . . " 11

Second Issue: Should Parties' Rights Have Been Declared?

Petitioners also chide the respondent Court (and the trial court) for not declaring the respective rights of the parties with respect to the land in question, arguing that "when one is disturbed in any form in his rights of property over an immovable by the unfounded claims of others, he has the right to ask from the competent courts: . . . that their respective rights be determined . . .". As support for their thesis, petitioners cite the ancient case of Bautista vs. Exconde. 12

Rule 64 of the Rules of Court, dealing with actions for declaratory relief, specifies in Section 1 thereof the grounds, conditions precedent or requisites for bringing such petitions. 13 This Court has previously held that —

"Under this rule, only a person who is interested 'under a deed, will, contract or other written instrument, and whose rights are affected by a statute or ordinance, may bring an action to determine any question of construction or validity arising under the instrument or statute and for a declaration of his rights or duties thereunder.' This means that the subject matter must refer to a deed, will, contract or other written instrument, or to a statute or ordinance, to warrant declaratory relief. Any other matter not mentioned therein is deemed excluded. This is under the principle of expressio unius est exclusio alterius." 14

Inasmuch as the enumeration of the causes, grounds or conditions precedent in the first paragraph of said Sec. 1 is exclusive, by parity of reasoning, it follows that similar remedies provided for in the second paragraph of the same section would also be marked with the same exclusivity as to bar any other cause possibly clouding one's title as a ground for such petitions. Thus, even assuming arguendo that the action to quiet title had been brought under Rule 64, the same would still not have prospered, the subject matter thereof not referring to "a deed, will, contract or other written instrument, or to a statute or ordinance," but to a boundary dispute, and therefore not warranting the grant of declaratory relief.

From another perspective, we hold that the trial court (and likewise the respondent Court) cannot, in an action for quieting of title, order the determination of the boundaries of the claimed property, as that would be tantamount to awarding to one or some of the parties the disputed property in an action where the sole issue is limited to whether the instrument, record, claim, encumbrance or proceeding involved constitutes a cloud upon the petitioners' interest or title in and to said property. Such determination of boundaries is appropriate in adversarial proceedings where possession or ownership may properly be considered and where evidence aliunde, other than the "instrument, record, claim, encumbrance or proceeding" itself, may be introduced. An action for forcible entry, whenever warranted by the period prescribed in Rule 70, or for recovery of possession de facto, also within the prescribed period, may be availed of by the petitioners, in which proceeding the boundary dispute may be fully threshed out.

WHEREFORE, in view of the foregoing considerations, the instant petition is hereby DENIED and the Decision appealed from is AFFIRMED. Costs against petitioners.

SO ORDERED.

SECOND DIVISION

[G.R. No. 144773. May 16, 2005.]

AZNAR BROTHERS REALTY COMPANY, petitioner, vs. LAURENCIO AYING, IN HIS OWN BEHALF AND IN BEHALF OF THE OTHER HEIRS OF EMILIANO AYING, PAULINO AYING, IN HIS OWN BEHALF AND IN BEHALF OF THE OTHER HEIRS OF SIMEON AYING, AND WENCESLAO SUMALINOG, IN HIS OWN BEHALF AND IN BEHALF OF THE OTHER HEIRS OF ROBERTA AYING, respondents.

D E C I S I O N

AUSTRIA-MARTINEZ, J p:

This resolves the petition for review on certiorari seeking the modification of the Decision 1 of the Court of Appeals (CA) dated March 7, 2000 which affirmed with modification the Decision of the Regional Trial Court (RTC) of Lapu-Lapu City, Branch 27 in Civil Case No. 2930-L; and the Resolution dated August 2, 2000 denying petitioner's motion for reconsideration of the aforementioned decision.

The antecedent facts are as follows:

The disputed property is Lot No. 4399 with an area of 34,325 square meters located at Dapdap, Lapu-Lapu City. Crisanta Maloloy-on petitioned for the issuance of a cadastral decree in her favor over said parcel of land. After her death in 1930, the Cadastral Court issued a Decision directing the issuance of a decree in the name of Crisanta Maloloy-on's eight children, namely: Juan, Celedonio, Emiliano, Francisco, Simeon, Bernabe, Roberta and Fausta, all surnamed Aying. The certificate of title was, however, lost during the war.

Subsequently, all the heirs of the Aying siblings executed an Extra-Judicial Partition of Real Estate with Deed of Absolute Sale dated March 3, 1964, conveying the subject parcel of land to herein petitioner Aznar Brothers Realty Company. Said deed was registered with the Register of Deeds of Lapu-Lapu City on March 6, 1964 under Act No. 3344 (the law governing registration for unregistered land), and since then, petitioner had been religiously paying real property taxes on said property.

In 1988, herein petitioner filed a Petition for Reconstitution of the Original Title as the original title over the subject property had been lost during the war. On April 12, 1988, the court granted said petition, thereby directing the Register of Deeds of Lapu-Lapu City to issue a reconstituted title in the name of the abovementioned Aying siblings. Thus, Original Certificate of Title (OCT) No. RO-2856 was issued.

In 1991, petitioner, claiming to be the rightful owner of the subject property, sent out notices to vacate, addressed to persons occupying the property. Unheeded, petitioner then filed a complaint for ejectment against the occupants before the Metropolitan Trial Court (MTC), Lapu-Lapu City. DIETHS

On February 1, 1994, the MTC ordered the occupants to vacate the property. The case eventually reached this Court, docketed as G.R. No. 128102, entitled Aznar Brothers Realty Company vs. Court of Appeals, Luis Aying, Demetrio Sida, Felomino Augusto, Federico Abing, and Romeo Augusto. 2 On March 7, 2000, a Decision was promulgated in favor of herein petitioner, declaring it as the rightful possessor of the parcel of land in question.

Meanwhile, herein respondents, along with other persons claiming to be descendants of the eight Aying siblings, all in all numbering around 220 persons, had filed a complaint for cancellation of the Extra-Judicial Partition with Absolute Sale, recovery of ownership, injunction and damages with the RTC of Lapu-Lapu City. The complaint was dismissed twice without prejudice. Said complaint was re-filed on August 19, 1993, docketed as Civil Case No. 2930-L.

In their amended complaint, herein respondents (plaintiffs before the RTC) alleged that: they are co-owners of subject property, being descendants of the registered owners thereof under OCT No. RO-2856; they had been in actual, peaceful, physical, open, adverse, continuous and uninterrupted possession in concept of owner of subject parcel of land since time immemorial; their

possession was disturbed only in the last quarter of 1991 when some of them received notices to vacate from petitioner and several weeks thereafter, earthmoving equipment entered the disputed land, bulldozing the same and destroying plants, trees and concrete monuments ("mohon"); respondents discovered that such activities were being undertaken by petitioner together with Sta. Lucia Realty and Development, Inc.; petitioner claimed to be the owner of subject property by virtue of an extra-judicial partition of real estate with deed of absolute sale executed in petitioner's favor by the alleged heirs of Crisanta Maloloy-on; the aforementioned extra-judicial partition of real estate with deed of absolute sale is a fraud and is null and void ab initio because not all the co-owners of subject property affixed their signature on said document and some of the co-owners who supposedly signed said document had been dead at the time of the execution thereof; petitioner entered subject land in bad faith, knowing fully well that it did not have any right to the land and used force, threat and intimidation against respondents; and they suffered moral damages. 3

Petitioner (defendant before the RTC) filed its Answer, denying that respondents are the lawful owners of subject parcel of land by virtue of their being descendants or heirs of the registered owners of subject property. Instead, petitioner alleged that it had been in actual possession of subject land as owner thereof by virtue of the extra-judicial partition of real property and deed of absolute sale executed in its favor; that in fact, it had been paying taxes thereon religiously; that it tolerated about 6 persons to live on said land but said persons were eventually ejected by court order. Petitioner then raised the affirmative defenses of failure to state cause of action and prescription, as it took respondents 27 years, 10 months and 27 days to file the action to recover subject property, when an action to recover property based on an implied trust should be instituted within 4 years from discovery of the fraud. 4

In the Pre-Trial Order dated January 30, 1995 of the RTC, the issues were narrowed down to the following:

1. Whether or not the plaintiffs [herein respondents] are the heirs of the registered owners of Lot No. 4399.

2. Whether or not plaintiffs are the owners of Lot No. 4399.

3. Whether or not the defendant Aznar [herein petitioner] is estopped to make any claim on Lot No. 4399.

4. Whether or not the defendant Aznar is a builder in bad faith.

5. Whether or not the defendants are liable for damages and attorney's fees in favor of the plaintiffs.

6. Whether or not the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale is valid and had, in effect, validly conveyed to defendant Aznar Lot No. 4399.

7. Whether or not the plaintiffs' action has prescribed. 5

After trial, the RTC rendered a Decision dated July 4, 1997, ruling that respondents' evidence failed to prove that the extra-judicial partition with deed of absolute sale was a totally simulated or fictitious contract and concluded that said document is valid, thus, effectively conveying to petitioner the property in question. It further held that respondents' action had prescribed in that the action is considered as one for reconveyance based on implied or constructive trust, it prescribed in 10 years from the registration of the deed on March 6, 1964; and if the action is considered as one for annulment of contract on the ground of fraud, it should have been filed within 4 years from discovery of the fraud. The trial court also ruled that respondents failed to present any admissible proof of filiation, hence, they were not able to prove that they are indeed heirs of the eight Aying siblings who appear as the registered owners under OCT No. RO-2856. TaDSHC

The dispositive portion of the RTC Decision reads as follows:

WHEREFORE, judgment is hereby rendered dismissing the amended complaint on the ground of prescription, and declaring the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale dated March 3, 1964 as valid and binding, adjudging that Lot 4399 with an area of 34,325 square meters located at Dapdap, Mactan, Lapu-Lapu City had been validly conveyed to and in favor of Aznar Brothers Realty Company, and directing the Register of Deeds of Lapu-Lapu City to register the above-mentioned deed in accordance with law and to cancel Original Certificate of Title No. RO-2856, and to issue a transfer certificate of title in the name of Aznar Brothers Realty Company upon payment of the necessary registration fees pursuant thereto.

The Writ of Preliminary Injunction issued in this case is hereby ordered dissolved.

The Motion for Contempt filed by the plaintiffs against defendants is dismissed for want of factual and legal basis.

Costs against the plaintiffs.

SO ORDERED. 6

Herein respondents appealed the foregoing decision to the CA and on March 7, 2000, said court promulgated its Decision, the dispositive portion of which is reproduced hereunder:

THE FOREGOING CONSIDERED, the contested Decision while AFFIRMED is hereby MODIFIED. The heirs of Emiliano Aying, Simeon Aying and Roberta Aying are hereby declared as the lawful owners of the contested property but equivalent only to 3/8.

SO ORDERED.

In modifying the RTC judgment, the CA ratiocinated that "an action for recovery of possession of registered land never prescribes in view of the provision of Section 44, Act No. 496 (now Sec. 47, PD 1520), to the effect that no title to registered land in derogation to that of a registered owner shall be acquired by prescription." The CA further ruled that even if the action is deemed to be based on implied trust, prescription did not begin to run since there is no evidence that positive acts of repudiation were made known to the heirs who did not participate in the execution of the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale. Thus, striking down the RTC's ruling that the respondents' complaint is dismissible on the ground of prescription, the CA held instead that herein respondents' action had not prescribed but upheld the validity of the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale, except as to the shares of the heirs of Emiliano, Simeon and Roberta, who did not participate in the execution of said document.

Herein petitioner's motion for reconsideration of the CA decision was denied per Resolution dated August 2, 2000.

Hence, the present petition for review on certiorari assailing the CA decision on the following grounds:

I

THE COURT OF APPEALS ERRED IN FAILING TO APPLY THE RULE THAT AN HEIR OF THE ORIGINAL REGISTERED OWNER MAY LOSE HIS RIGHT TO RECOVER A TITLED PROPERTY BY REASON OF LACHES;

II

THE COURT OF APPEALS ERRED IN FAILING TO APPLY THE RULE THAT THE ACT OF REGISTRATION OF THE DEED OF PARTITION WITH SALE MAY BE CONSIDERED AN UNEQUIVOCAL REPUDIATION OF THE TRUST GIVING RISE TO PRESCRIPTION; SaICcT

III

THE COURT OF APPEALS ERRED IN FAILING TO APPLY THE PROVISIONS OF ARTICLE 1104 OF THE CIVIL CODE TO THE EFFECT THAT IN THE ABSENCE OF BAD FAITH OR FRAUD, THE PARTITION WITH PRETERITION OF ANY COMPULSORY HEIR SHALL NOT BE RESCINDED. 7

In their Comment, respondents argue that this case is an action to declare as null and void the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale, hence, under Article 1410 of the Civil Code, an action for declaration of an inexistent contract does not prescribe. Respondents further posit that the principle of laches should be applied against petitioner and not against them, as they (respondents) had been in actual possession of the subject property, while petitioner merely brought action to eject them more than 29 years after the alleged execution of the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale. They also refuted petitioner's arguments regarding the application of the principles of implied and constructive trusts in this case.

At the outset, it should be stressed that not all the plaintiffs who filed the amended complaint before the trial court had been impleaded as respondents in the present petition. The only parties impleaded are the heirs of Emiliano, Simeon and Roberta Aying, whom the CA adjudged as owners of a 3/8 portion of the land in dispute for not having participated in the execution of the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale.

It is significant to note that herein petitioner does not question the CA conclusion that respondents are heirs of the aforementioned three Aying siblings. Hence, the trial court and appellate court's findings that the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale was not forged nor simulated and that the heirs of Emiliano, Simeon and Roberta Aying did not participate in the execution thereof, are now beyond cavil.

The issues raised by petitioner for the Court's resolution are (1) whether or not respondents' cause of action is imprescriptible; and (2) if their right to bring action is indeed imprescriptible, may the principle of laches apply.

Respondents alleged in their amended complaint that not all the co-owners of the land in question signed or executed the document conveying ownership thereof to petitioner and made the conclusion that said document is null and void. We agree with the ruling of the RTC and the CA that the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale is valid and binding only as to the heirs who participated in the execution thereof, hence, the heirs of Emiliano, Simeon and Roberta Aying, who undisputedly did not participate therein, cannot be bound by said document.

However, the facts on record show that petitioner acquired the entire parcel of land with the mistaken belief that all the heirs have executed the subject document. Thus, the trial court is correct that the provision of law applicable to this case is Article 1456 of the Civil Code which states:

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.

In Vda. De Esconde vs. Court of Appeals, 8 the Court expounded thus:

Construing this provision of the Civil Code, in Philippine National Bank v. Court of Appeals, the Court stated:

A deeper analysis of Article 1456 reveals that it is not a trust in the technical sense for in a typical trust, confidence is reposed in one person who is named a trustee for the benefit of another who is called the cestui que trust, respecting property which is held by the trustee for the benefit of the cestui que trust. A constructive trust, unlike an express trust, does not emanate from, or generate a fiduciary relation. While in an express trust, a beneficiary and a trustee are linked by confidential or fiduciary relations, in a constructive trust, there is neither a promise nor any fiduciary relation to speak of and the so-called trustee neither accepts any trust nor intends holding the property for the beneficiary. 9

The concept of constructive trusts was further elucidated in the same case, as follows:

. . . implied trusts are those which, without being expressed, are deducible from the nature of the transaction as matters of intent or which are superinduced on the transaction by operation of law as matters of equity, independently of the particular intention of the parties. In turn, implied trusts are either resulting or constructive trusts. These two are differentiated from each other as follows:

Resulting trusts are based on the equitable doctrine that valuable consideration and not legal title determines the equitable title or interest and are presumed always to have been contemplated by the parties. They arise from the nature of circumstances of the consideration involved in a transaction whereby one person thereby becomes invested with legal title but is obligated in equity to hold his legal title for the benefit of another. On the other hand, 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. 10 (Emphasis supplied) DTAHSI

Based on such concept of constructive trusts, the Court ruled in said case that:

The rule that a trustee cannot acquire by prescription ownership over property entrusted to him until and unless he repudiates the trust, applies to express trusts and resulting implied trusts. However, in constructive implied trusts, prescription may supervene even if the trustee does not repudiate the relationship. Necessarily, repudiation of said trust is not a condition precedent to the running of the prescriptive period. 11

The next question is, what is the applicable prescriptive period?

In Amerol vs. Bagumbaran, 12 the Court expounded on the prescriptive period within which to bring an action for reconveyance of property based on implied or constructive trust, to wit:

. . . under the present Civil Code, we find that just as an implied or constructive trust is an offspring of the law (Art. 1456, 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.

xxx xxx xxx

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. 13

It has also been ruled that the ten-year prescriptive period begins to run from the date of registration of the deed or the date of the issuance of the certificate of title over the property, but if the person claiming to be the owner thereof is in actual possession of the property, the right to seek reconveyance, which in effect seeks to quiet title to the property, does not prescribe. 14

In the present case, respondents Wenceslao Sumalinog, an heir of Roberta Aying; Laurencio Aying, an heir of Emiliano Aying; and Paulino Aying, an heir of Simeon Aying, all testified that they had never occupied or been in possession of the land in dispute. 15 Hence, the prescriptive period of ten years would apply to herein respondents.

The question then arises as to the date from which the ten-year period should be reckoned, considering that the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale was registered under Act No. 3344 and not under Act No. 496 (Land Registration Act), despite the fact the land in dispute was already titled under Act No. 496 in the names of the Aying siblings at the time the subject document was executed.

In Spouses Abrigo vs. De Vera, 16 it was held that registration of instruments must be done in the proper registry, in order to affect and bind the land and, thus, operate as constructive notice to the world. 17 Therein, the Court ruled:

. . . If the land is registered under the Land Registration Act (and has therefore a Torrens Title), and it is sold but the subsequent sale is registered not under the Land Registration Act but under Act 3344, as amended, such sale is not considered REGISTERED . . . 18

In this case, since the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale was registered under Act No. 3344 and not under Act No. 496, said document is deemed not registered. Accordingly, the ten-year prescriptive period cannot be reckoned from March 6, 1964, the date of registration of the subject document under Act No. 3344. The prescriptive period only began to run from the time respondents had actual notice of the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale. IaAHCE

The only evidence on record as to when such prescriptive period commenced as to each of the respondents are Wenceslao Sumalinog's (heir of Roberta Aying) testimony that about three years after 1964, they already learned of the existence of the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale; 19 and Laurencio Aying's (heir of Emiliano Aying) admission that he found out about the sale of the land in dispute a long time ago and can only estimate that it must be after martial law. 20 Paulino Aying (heir of Simeon Aying) gave no testimony whatsoever as to when the children of Simeon Aying actually learned of the existence of the document of sale. On the other hand, petitioner did not present any other evidence to prove the date when respondents were notified of the execution of the subject document.

In view of the lack of unambiguous evidence of when the heirs of Emiliano Aying and Simeon Aying discovered the existence of the document of sale, it must be determined which party had the burden of proof to establish such fact.

The test for determining where the burden of proof lies is to ask which party to an action or suit will fail if he offers no evidence competent to show the facts averred as the basis for the relief he seeks to obtain. 21 Moreover, one alleging a fact that is denied has the burden of proving it and unless the party asserting the affirmative of an issue sustains the burden of proof of that issue by a preponderance of the evidence, his cause will not succeed. 22 Thus, the defendant bears the burden of proof as to all affirmative defenses which he sets up in answer to the plaintiff's claim or cause of action; he being the party who asserts the truth of the matter he has alleged, the burden is upon him to establish the facts on which that matter is predicated and if he fails to do so, the plaintiff is entitled to a verdict or decision in his favor. 23

In the case at bar, it was petitioner, as the defendant before the RTC, which set up in its Answer the affirmative defense of prescription. It was, therefore, incumbent upon petitioner to prove the date from which the prescriptive period began to run. Evidence as to the date when the ten-year prescriptive period began exists only as to the heirs of Roberta Aying, as Wenceslao Sumalinog admitted that they learned of the existence of the document of sale in the year 1967. As to the heirs of Emiliano Aying and Simeon Aying, there is no clear evidence of the date when they discovered the document conveying the subject land to petitioner. Petitioner miserably failed to adduce proof of when the heirs of Emiliano Aying and Simeon Aying were notified of the subject document. Hence, with regard to said heirs, the Court may consider the admission in the amended complaint that they learned of the conveyance of the disputed land only in 1991 when petitioner sent notices to vacate to the occupants of the subject land, as the date from which the ten-year prescriptive period should be reckoned.

Respondents filed their Amended Complaint on December 6, 1993. 24 Thus, with regard to respondent heirs of Roberta Aying who had knowledge of the conveyance as far back as 1967, their cause of action is already barred by prescription when said amended complaint was filed as they only had until 1977 within which to bring action. As to the respondent heirs of Emiliano and Simeon Aying, they were able to initiate their action for reconveyance of property based on implied or constructive trust well within the ten-year prescriptive period reckoned from 1991 when they were sent by petitioner a notice to vacate the subject property.

Evidently, laches cannot be applied against respondent heirs of Emiliano and Simeon Aying, as they took action to protect their interest well within the period accorded them by law.

With regard to petitioner's argument that the provision of Article 1104 of the Civil Code, stating that a partition made with preterition of any of the compulsory heirs shall not be rescinded, should be applied, suffice it to say that the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale is not being rescinded. In fact, its validity had been upheld but only as to the parties who participated in the execution of the same. As discussed above, what was conveyed to petitioner was ownership over the shares of the heirs who executed the subject document. Thus, the law, particularly, Article 1456 of the Civil Code, imposed the obligation upon petitioner to act as a trustee for the benefit of respondent heirs of Emiliano and Simeon Aying who, having brought their action within the prescriptive period, are now entitled to the reconveyance of their share in the land in dispute.

IN VIEW OF THE FOREGOING, the petition is PARTIALLY GRANTED and the Decision of the Court of Appeals dated March 7, 2000 is MODIFIED, as follows: The amended complaint of the heirs of Roberta Aying is DISMISSED on the ground of prescription. However, the heirs of Emiliano Aying and Simeon Aying, having instituted the action for reconveyance within the prescriptive period, are hereby DECLARED as the LAWFUL OWNERS of a 2/8 portion of the parcel of land covered by Original Certificate of Title No. RO-2856. caCTHI

SO ORDERED.