GR 79328; (May, 1990) (Digest)
G.R. No. 79328 May 21, 1990
ELENA J. TOMAS, CAMILO ADINA, RICARDO J. TOMAS and JOSE J. TOMAS, petitioners, vs. THE COURT OF APPEALS, MAXIMA CARREON and AMADO D. NOLASCO, and SECOND BULACAN DEVELOPMENT BANK, respondents.
FACTS
Private respondents Maxima Carreon and Amado Nolasco purchased a 105-square-meter parcel of land in 1963, having been in possession since 1961. They constructed a three-door apartment on the land, declared it for taxation, and paid taxes. In 1978, they discovered that petitioners, the Tomas siblings, had obtained Original Certificate of Title No. O-6337 for a cadastral lot that included a 65-square-meter portion of the respondents’ land. Petitioners had included this portion, adjacent to their own property, in their land registration application. Respondents demanded reconveyance, but petitioners refused, prompting the filing of an action for reconveyance in 1979. The Regional Trial Court dismissed the complaint, but the Court of Appeals reversed this decision, ordering the segregation and reconveyance of the disputed 65 square meters to the respondents.
ISSUE
The main issues are: (1) whether the Court of Appeals erred in reversing the trial court’s factual findings; and (2) whether the complaint for reconveyance should be dismissed on grounds of absence of fraud allegation, res judicata, or prescription/laches.
RULING
The Supreme Court affirmed the Court of Appeals’ decision. On the first issue, while appellate courts generally respect the trial court’s factual findings, the Court of Appeals correctly re-examined the evidence as the trial court overlooked substantive facts. These included respondents’ open, continuous possession since 1961, their construction of valuable improvements, and their payment of taxes—all supporting their claim of ownership. Petitioners’ long inaction and their own construction of a party wall indicating a boundary further bolstered respondents’ claim.
On the second issue, the complaint sufficiently alleged fraud by stating petitioners registered the land while recognizing respondents’ rights. An action for reconveyance based on an implied trust, arising from fraud or mistake under Article 1456 of the Civil Code, is an action in personam and is not barred by the prior land registration decree. The prescriptive period for such an action is ten years from the issuance of the title. Respondents filed their suit in 1979, within one year of discovering the wrongful registration in 1978; thus, prescription did not bar the claim. The Court upheld the remedy of reconveyance to transfer the property to its rightful owner without challenging the Torrens title’s incontrovertibility.