G.R. No. L-14662; January 30, 1962
GENOVEVA BELTRAN, ET AL., plaintiffs-appellees, vs. CORAZON AYSON and FABIAN JEMINEZ, defendants-appellants.

FACTS

This case involves an action to annul a deed of extrajudicial partition and the resulting Torrens title. Macario Beltran died, survived by his widow, defendant Corazon Ayson, and collateral relatives (nephews, nieces, and a sister), the plaintiffs-appellees. In 1943, Ayson and a half-brother, Jose de la Cruz, executed a deed of extrajudicial partition, declaring themselves as the sole heirs, which led to the issuance of Transfer Certificate of Title No. 23235 in their favor. The plaintiffs, who were not participants in this partition, stipulated that they only became aware of it shortly before filing their complaint in 1955. The defendants asserted possession since 1943 and raised the defense of prescription.
The trial court ruled in favor of the plaintiffs, declaring them co-owners subject to the widow’s usufruct and ordering reconveyance. The defendants appealed directly to the Supreme Court, arguing the action was barred under Section 4, Rule 74 of the Rules of Court, which provides a two-year period for an aggrieved heir to challenge a settlement, and by the general statute of limitations.

ISSUE

The primary issue is whether the plaintiffs’ action to annul the extrajudicial partition is barred by prescription.

RULING

The Supreme Court affirmed the trial court’s decision, holding the action was not prescribed. The Court clarified that the two-year limitation period under Section 4, Rule 74 applies only to (1) persons who participated in, took part in, or had notice of the extrajudicial partition, and (2) when the settlement strictly complied with Section 1 of Rule 74, meaning all heirs participated or were represented. Here, neither condition was met. The plaintiffs, as collateral heirs, did not participate and were unaware of the partition until shortly before filing suit. Therefore, the two-year bar did not apply to them.
The Court also rejected the defense of the general statute of limitations. Even assuming fraud in the execution of the deed, the stipulated fact that plaintiffs discovered the partition only shortly before filing the 1955 complaint meant the four-year prescriptive period for annulment (then under Article 1146 of the New Civil Code) had not lapsed. The prescriptive period commenced from their discovery, not from the 1943 execution date. The Court further ruled that Article 1076 of the Old Civil Code (action for rescission on account of lesion) was inapplicable, as the plaintiffs were not parties to the partition they sought to annul. Consequently, the action was timely filed, and the decree for reconveyance was upheld.