G.R. No. 223624 July 17, 2019
HEIRS OF LEONARDA NADELA TOMAKIN, ET AL., Petitioners vs. HEIRS OF CELESTINO NAVARES, ET AL., Respondents

FACTS

The dispute involves Lot No. 8467, originally owned by Jose Badana. Upon his death, his sisters Quirina and Severina Badana inherited the property. In 1955, Quirina sold one-half of the lot (Lot 8467-B) to the spouses Remigio Navares and Cesaria Gaviola, predecessors of the respondents, through a “Sale with Condition” reserving to Quirina the fruits of the land during her lifetime. In 1957, Severina sold the other half (Lot 8467-A) to spouses Aaron Nadela and Felipa Jaca, predecessors of the petitioners. The respondents and their predecessors allegedly possessed Lot 8467-B and paid taxes thereon.
In 1991, petitioners sold a portion of their lot to spouses Alfredo Dacua, Jr. and Clarita Bacalso. Subsequently, based on an Extrajudicial Settlement executed by a purported heir, Mauricia Bacus, the entire Lot No. 8467, including the respondents’ portion, was titled under the petitioners’ names via TCT No. 131499. The respondents filed a complaint for reconveyance and damages, claiming the petitioners’ title over Lot 8467-B was fraudulently obtained.

ISSUE

Whether the respondents’ action for reconveyance based on an implied trust is barred by prescription.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals’ ruling that the action for reconveyance had not prescribed. The Court clarified that an action for reconveyance based on a constructive trust prescribes in ten years from the issuance of the title, which is deemed constructive notice to the whole world. However, this prescriptive period applies only when the plaintiff is not in possession of the property.
The Court emphasized the critical distinction established in jurisprudence: if the claimant is in possession of the contested land, the action for reconveyance is imprescriptible. This is because the claimant’s possession serves as a continuing repudiation of the trustee’s title, rendering the defense of prescription unavailable. In this case, the petitioners themselves admitted in their pleadings that most of the respondents were “living in the said Lot and leasing portions thereof to tenants.” This judicial admission conclusively established the respondents’ possession of Lot 8467-B.
Consequently, since the respondents were in actual possession, their right to seek reconveyance of the title, which was wrongfully registered in the petitioners’ names, does not prescribe. The action remains viable regardless of the lapse of time from the registration of the fraudulent title. The Court found no reversible error in the CA’s application of this imprescriptibility rule, thereby upholding the grant of reconveyance in favor of the respondents.