G.R. No. 115925 ; August 15, 2003
SPOUSES RICARDO PASCUAL and CONSOLACION SIOSON, petitioners, vs. COURT OF APPEALS and REMEDIOS S. EUGENIO-GINO, respondents.

FACTS

Petitioner Consolacion Sioson and respondent Remedios Eugenio-Gino are the niece and granddaughter, respectively, of the late Canuto Sioson. Canuto was a co-owner of a parcel of land. On September 26, 1956, Canuto executed a “Kasulatan ng Bilihang Tuluyan” selling his 10/70 undivided share in the property to Consolacion. The deed did not specify a particular subdivided lot. Consolacion took possession of, declared for taxation, and paid taxes on Lots 2-A and 2-E, which were identified in a 1952 subdivision plan as Canuto’s portions. In 1968, Canuto’s surviving children executed a joint affidavit confirming the sale and specifically identifying the sold property as Lots 2-A and 2-E. Based on this affidavit and the deed, Consolacion obtained a Transfer Certificate of Title for these lots in 1968.
In 1988, Remedios filed a complaint for annulment of title and damages against the spouses Pascual. She claimed ownership of the same Lots 2-A and 2-E by virtue of a 1964 will from her grandmother, Catalina Sioson (Canuto’s sister). Remedios alleged that Consolacion’s title was fraudulently obtained because the total area of the titled lots exceeded Canuto’s original 10/70 share. The petitioners moved to dismiss the complaint on the ground of prescription.

ISSUE

Whether the action for annulment of title filed by respondent Remedios Eugenio-Gino had already prescribed.

RULING

Yes, the action had prescribed. The Supreme Court reversed the Court of Appeals and dismissed the complaint. The Court ruled that the respondent’s cause of action, as pleaded in her complaint, was one for annulment of a voidable contract based on fraud under Article 1390 of the Civil Code. An action based on fraud must be filed within four years from its discovery, as prescribed by Article 1391. The title was registered in Consolacion’s name on October 28, 1968. The fraud, if any, was deemed discovered at that time, as registration constitutes constructive notice to the whole world. Remedios filed her complaint only on February 4, 1988, nearly twenty years later, far beyond the four-year prescriptive period.
The Court rejected the argument that the action was imprescriptible as one for reconveyance based on an implied trust under Article 1456. For such an implied trust to arise, the property must be acquired through mistake or fraud. The complaint itself alleged fraud as the core of the cause of action, thereby placing it under the four-year prescriptive rule for annulment. The Court emphasized that a party cannot circumvent prescription by re-characterizing an action that is essentially for annulment due to fraud as one for reconveyance. Since the action was clearly barred by prescription, the Court found no need to delve into the merits of the conflicting claims of ownership.