G.R. No. L-4136 February 29, 1952
MONTANO VITAL, plaintiff-appellant, vs. FRANCISCO ANORE, PETRA DE LOS SANTOS and THE DIRECTOR OF LANDS, defendants-appellees.

FACTS

On December 13, 1945, Montano Vital filed a complaint against Francisco Anore, Petra de los Santos (widow of Ambrosio Arabit), and the Director of Lands. Vital sought to be declared the owner of a parcel of land (1 hectare, 36 ares, 44 centares) and alleged that he and his predecessors-in-interest had been in open, continuous, notorious, exclusive, and adverse possession under a bona fide claim of ownership since time immemorial. He discovered that the same land had been granted as a free patent to Ambrosio Arabit (who died in 1929) and that a Transfer Certificate of Title (TCT No. 46833) was issued in the name of Francisco Anore on October 28, 1944. Vital averred that Arabit was never in possession of the land during his lifetime and knew of Vital’s possession, and that Anore also knew the land never belonged to Arabit or his heirs and was in Vital’s possession. Petra de los Santos, in her answer, admitted these allegations regarding possession. Francisco Anore filed a motion to dismiss on the ground that the action was barred by the statute of limitations, as more than ten years had elapsed from January 20, 1934 (the date the original certificate of title was issued to Arabit) to the filing of the complaint. The Court of First Instance of Rizal dismissed the complaint based on the statute of limitations and on the ground that Petra de los Santos would be incompetent to testify against her deceased husband. Vital appealed.

ISSUE

Whether the action is barred by the statute of limitations, and whether the plaintiff’s complaint states a cause of action for reconveyance based on implied trust.

RULING

The Supreme Court reversed the order of dismissal and remanded the case for further proceedings. The Court held that while a Torrens title issued upon a free patent generally becomes indefeasible after one year from issuance, and an action for cancellation after ten years is barred by the statute of limitations, this rule does not apply if the registered owner (or his predecessor-in-interest) knew that the land belonged to another and was never in possession. In such a case, the true owner may bring an action for reconveyance based on an implied trust. The plaintiff’s allegations—that he and his predecessors were in possession since time immemorial, that the patentee (Arabit) was never in possession, and that the defendant (Anore) knew these facts—if proven, constitute a cause of action for reconveyance in equity. The defendant’s motion to dismiss admitted these material allegations for the purpose of the motion. The statute of limitations cannot be invoked at this stage because the motion admits the plaintiff’s possession and the defendant’s lack of possession and knowledge. The Court also clarified that the issue of Petra de los Santos’s competency to testify was premature, as the facts she admitted in her answer could be proved by other competent witnesses. The case was remanded for trial.