GR 103635; (February, 1996) (Digest)
G.R. No. 103635 ; February 1, 1996
CATALINA BUAN VDA. DE ESCONDE, CONSTANCIA ESCONDE VDA. DE PERALTA, ELENITA ESCONDE and BENJAMIN ESCONDE, petitioners, vs. HONORABLE COURT OF APPEALS and PEDRO ESCONDE, respondents.
FACTS
The petitioners and private respondent Pedro Esconde are the children of the late Eulogio Esconde. Eulogio was an heir of Andres Esconde, the brother of the original owner, Estanislao Esconde. Upon Estanislao’s death, his estate, including Lot No. 1700, was partitioned among his heirs. In a 1946 Extrajudicial Partition, the minor children of Eulogio, including petitioners Benjamin and Elenita, were represented by their mother and judicial guardian, petitioner Catalina. The deed adjudicated Lot No. 1700 exclusively to Pedro Esconde. Transfer Certificate of Title No. 394 was issued in Pedro’s name in February 1947. Benjamin later built improvements encroaching on a portion of Lot No. 1700. In December 1982, Benjamin discovered the lot was registered solely in Pedro’s name. Demands for partition were rejected, leading petitioners to file a complaint in 1987 for annulment of title and reconveyance.
ISSUE
Whether the petitioners’ action for reconveyance based on an implied trust has prescribed.
RULING
Yes, the action has prescribed. The lower courts correctly found that an implied trust was created under Article 1456 of the Civil Code, as Pedro acquired the shares of his minor siblings Benjamin and Elenita through a mistake—their guardian Catalina’s act of waiving their rights in the partition deed. However, an action for reconveyance based on such an implied trust prescribes in ten years from the issuance of the title. The Torrens title was issued to Pedro on February 11, 1947. The ten-year prescriptive period began to run from that date, making the right to bring an action for reconveyance expire on February 11, 1957. The filing of the complaint in 1987, over thirty years later, was indisputably beyond the prescriptive period. The defense of laches also applies, as petitioners slept on their rights for an unreasonable length of time, allowing Pedro to believe the matter was settled. The Court affirmed the dismissal of the complaint but modified the decision to order private respondent to indemnify petitioner Benjamin Esconde for the value of the improvements he built on the lot.