G.R. No. 161746 ; September 1, 2010
EUGENIO FELICIANO, substituted by his wife CEFERINA DE PALMA-FELICIANO, et al., Petitioners, vs. PEDRO CANOZA, DELIA FELICIANO, ROSAURO FELICIANO, ELSA FELICIANO AND PONCIANO FELICIANO, Respondents.

FACTS

Antonio Feliciano died in 1930, leaving a parcel of land in Bustos, Bulacan. In 1972, some of his heirs—Leona, Maria, Pedro, and Salina Feliciano—executed an extrajudicial settlement of his estate, excluding the heirs of Antonio’s deceased children, Esteban and Doroteo Feliciano. They then sold the property to Pedro Canoza, Jacinto Feliciano, and Felisa Feliciano. Canoza and Jacinto subsequently applied for and were granted free patents over their respective portions, with Canoza obtaining Original Certificate of Title (OCT) No. P-364 in 1979.
In 1993, the excluded heirs—Eugenio, Angelina, Trinidad, and Basilia (petitioners)—filed a complaint for declaration of nullity of documents and title, recovery of real property, and damages. They alleged the extrajudicial settlement and subsequent sales were fraudulent for preteriting their rightful shares as heirs of Esteban and Doroteo. The Regional Trial Court (RTC) ruled in their favor, declaring the settlement, sales, and titles null and void and ordering reconveyance.

ISSUE

Whether the petitioners’ action to annul the extrajudicial settlement and titles, and to recover their hereditary shares, had already prescribed.

RULING

Yes, the action had prescribed. The Supreme Court affirmed the Court of Appeals’ dismissal of the complaint. The Court clarified that while an action for the declaration of the inexistence of a void contract does not prescribe, the petitioners’ action was not merely to declare the extrajudicial settlement void ab initio. Their ultimate objective was to recover their alleged hereditary shares in the property, which had already been registered under the Torrens system in the names of the respondents.
The pivotal legal principle applied is that an action for reconveyance of fraudulently registered property prescribes in ten (10) years from the date of the issuance of the certificate of title. The Court held that the petitioners’ cause of action accrued in 1979 when OCT No. P-364 was issued to Canoza, as registration served as constructive notice to the whole world of the alleged fraud. By filing their complaint only in 1993, or fourteen years later, the action was clearly barred by prescription. The Court further noted that even if the action were treated as one to annul the free patents and titles, it would likewise be barred, as such an action prescribes after one year from the issuance of the patent. Consequently, the petitioners could no longer assail the indefeasibility of the respondents’ titles.