G.R. No. L-31858 August 31, 1977
FAUSTINO JARAMIL AND FILOMENA CABINAR, petitioners, vs. COURT OF APPEALS, and SOTERA MEDRANA, REGINA DE LA CRUZ, VALERIANA C. PRUDENCIO ET AL., respondents.

FACTS

The respondents, heirs of Isidro dela Cruz and Sotera Medrana, filed an action for recovery of possession and damages against petitioners Faustino Jaramil and Filomena Cabinar over Lot 1422 in Umingan, Pangasinan. The respondents claimed ownership by virtue of Original Certificate of Title No. 49228 issued in 1932, adjudicating the lot to Isidro and Sotera from a 1926 cadastral decree. They alleged that in 1935, they merely permitted the petitioners to reside on the land, with the understanding they would vacate upon demand. After a demand in 1958 was refused, the suit was initiated.
The petitioners countered that they were the true owners, asserting possession since 1924 when the lot was given to them as a marriage donation from Filomena’s predecessor, Agustin Cabinar. They claimed Isidro dela Cruz perpetrated fraud by registering the lot in his name. Specifically, Faustino Jaramil testified that during the cadastral survey, Isidro offered to handle the proceedings for their adjoining lots, took P50.00 for expenses, and promised to secure Jaramil’s title but instead registered the land under his own name. The petitioners sought reconveyance of the title and damages.

ISSUE

The core issues were: (1) Whether the respondents are the true owners of Lot 1422; and (2) Whether the petitioners’ action for reconveyance of title based on alleged fraud is barred by the statute of limitations.

RULING

The Supreme Court affirmed the Court of Appeals’ decision, ruling for the respondents. On the first issue, the Court found the evidence of fraud unsubstantiated. The petitioners’ claim relied heavily on Faustino Jaramil’s testimony about the P50.00 payment and a broken promise from the 1920s. The Court noted the inherent improbability of such an arrangement, emphasizing that Jaramil never inquired about the money or the title status during Isidro’s lifetime or for decades after, despite the issuance of the title in 1932 constituting constructive notice. The preponderance of evidence established that Isidro and Sotera were in possession as early as 1911, no other claimants appeared during the cadastral proceedings, and the title was regularly issued. Thus, the respondents’ ownership was upheld.
On the second issue, the Court held that even assuming arguendo that fraud occurred creating an implied trust, the action for reconveyance had prescribed. An action for reconveyance based on an implied or constructive trust prescribes in ten years. The petitioners’ cause of action accrued on March 15, 1932, upon the issuance of the original certificate of title, which served as constructive notice. The counterclaim for reconveyance was only interposed in the 1960s, well beyond the ten-year prescriptive period. The Court cited Gerona vs. De Guzman, stating that the effective assertion of adverse title for limitation purposes is counted from the date of title issuance. Therefore, the right to seek reconveyance was extinguished by prescription.