G.R. No. L-39478 November 29, 1977
FAUSTINA CABABARROS VDA. DE NACALABAN, ET AL., petitioners, vs. THE HONORABLE COURT OF APPEALS, AND CATALINA CABABARROS, ET AL., respondents.

FACTS

The respondents, claiming to be heirs of the spouses Narciso Cababarros and Narcisa Edmilao, filed an action for partition and reconveyance against the petitioners over a parcel of land. They alleged that the land was originally acquired by the said spouses and, upon their death, was transmitted to their heirs. They further claimed that the property, while owned in common, was merely held in trust by petitioner Faustina Vda. de Nacalaban and her late husband, Dioniciano Nacalaban, who later fraudulently secured a Torrens title in their own names.
The petitioners countered that the spouses Narciso Cababarros and Narcisa Edmilao had long ceased to be owners of the land before their deaths. The property had been mortgaged by them to Casimiro Tamparong to secure a debt, and upon foreclosure, Tamparong acquired it. Petitioners’ predecessors, the spouses Dioniciano Nacalaban and Faustina Cababarros, subsequently purchased the land from Tamparong. By virtue of this sale, they claimed the land in cadastral proceedings, resulting in the issuance of Original Certificate of Title No. 6929 in their names on January 8, 1938. They asserted open, continuous, and exclusive possession since the purchase, paying taxes and even mortgaging the property, and denied the existence of any trust relationship.

ISSUE

The primary issues were: (1) whether an implied trust existed over the land in favor of the respondents, and (2) whether the action for partition and reconveyance was barred by prior judgment or prescription.

RULING

The Supreme Court reversed the Court of Appeals and dismissed the complaint. On the first issue, the Court found no factual or legal basis for an implied trust. The evidence established a clear chain of title: the original owners lost the land through a valid foreclosure sale to Tamparong, who then sold it to the petitioners’ predecessors. The issuance of OCT No. 6929 in 1938 was a result of a judicial cadastral proceeding based on this lawful acquisition, not fraud. The respondents inherited no rights to the property as their predecessors had already alienated it.
On the second issue, the Court ruled that even assuming an implied trust existed, the action had long prescribed. The cause of action accrued, at the latest, on January 8, 1938, upon the issuance of the Torrens title, which served as constructive notice to the whole world. The respondents’ own evidence indicated they had demanded partition as early as 1945, which was refused. Yet, they filed the suit only on February 11, 1964, more than ten years after the title issued and the repudiation of any trust. Applying settled doctrine, an action for reconveyance based on an implied or constructive trust prescribes in ten years from the accrual of the cause of action. The respondents’ inaction for over a quarter-century constituted laches. Consequently, the complaint was dismissed.