G.R. No. 145849. July 22, 2005
SPOUSES JOSE BEJOC and JOVITA CAPUTOL BEJOC, Petitioners, vs. PRIMA CALDERON CABREROS and COURT OF APPEALS, Respondents.

FACTS

The disputed agricultural lands were originally owned by Maura Caputol, who donated them to her son, Domingo Cabreros, in 1975. Domingo and his wife, respondent Prima Cabreros, took possession, had the tax declarations transferred to their names, and later migrated to Hawaii, leaving the properties under the administration of petitioner spouses, who were relatives and former overseers. Upon Domingo’s death in 1979, his estate passed to Prima and their daughter. In 1989, Prima discovered petitioners were claiming ownership, had stopped delivering harvest shares since 1984, and had manipulated tax records. Petitioners had caused the cancellation of tax declarations in Domingo’s name, reinstated Maura’s name based on a dubious 1971 quitclaim, and later secured tax declarations in their own names via a 1984 deed of confirmation of sale. They ultimately obtained an Original Certificate of Title via free patent in 1984.
Petitioners claimed absolute ownership since 1978 by virtue of a purported 1978 sale from Maura, later confirmed in 1984. They argued that even if a donation existed, Prima’s action for reconveyance, filed in 1990, was barred by prescription. The trial court ruled for Prima, declaring her the lawful owner and ordering reconveyance, a decision affirmed by the Court of Appeals.

ISSUE

Whether or not respondent Prima Cabreros’s action for reconveyance had already prescribed.

RULING

The Supreme Court denied the petition, affirming the appellate court’s ruling that the action had not prescribed. Petitioners erroneously contended the action was based on fraud with a four-year prescriptive period, reckoning from their 1978 repudiation or the 1984 title issuance. The Court clarified that the relationship between the parties, as caretakers/administrators of the property for the true owners, gave rise to an implied trust under Article 1456 of the Civil Code. One who obtains property through mistake or fraud is considered a trustee of an implied trust for the benefit of the true owner. An action for reconveyance based on such an implied trust prescribes in ten years, reckoned from the date of issuance of the certificate of title, as such issuance constitutes constructive notice to the world. Here, the title was issued on October 17, 1984, and the action was filed on February 1, 1990—well within the ten-year prescriptive period. Thus, prescription had not attached.