G.R. No. L-71110 November 22, 1988
PAZ VILLAGONZALO, ESTELA VILLAGONZALO, AIDA VILLAGONZALO, HERMINIA VILLAGONZALO, GWENDOLYN VILLAGONZALO, JENSINE VILLAGONZALO and LEONILA VILLAGONZALO, petitioners, vs. INTERMEDIATE APPELLATE COURT and CECILIA A. VILLAGONZALO, respondents.

FACTS

Juan C. Villagonzalo purchased a parcel of land in 1961. To complete the payment, he borrowed P500.00 from his daughter, the private respondent Cecilia A. Villagonzalo. The deed of sale was, however, made to appear in Cecilia’s name. Consequently, Transfer Certificate of Title (TCT) No. 4259 was issued in her name on July 18, 1962. Juan Villagonzalo and his wife Felicisima later died, survived by their children, including the petitioners (his other daughters) and the private respondent.
The petitioners, as co-heirs, filed an action for reconveyance against Cecilia on April 2, 1975, claiming the land was conjugal property held by her only under an implied trust. The trial court ruled in favor of the petitioners, ordering cancellation of Cecilia’s title and reconveyance for partition among the heirs. On appeal, the Intermediate Appellate Court reversed the decision, dismissing the complaint on the grounds of prescription and laches.

ISSUE

Whether the petitioners’ action for reconveyance based on an implied trust had prescribed or was barred by laches.

RULING

The Supreme Court affirmed the decision of the Intermediate Appellate Court, holding that the action had prescribed and was barred by laches. The legal logic is clearly delineated. An action for reconveyance based on an implied or constructive trust prescribes in ten years, pursuant to Article 1144(2) of the Civil Code, as it is an obligation created by law. This ten-year period commences from the date the adverse title is asserted by the possessor, which constitutes a repudiation of the trust.
In this case, the repudiation and assertion of adverse title occurred on July 18, 1962, when TCT No. 4259 was issued exclusively in Cecilia’s name. The registration of the title constituted constructive notice to the whole world of her adverse claim. The petitioners filed their complaint only on April 2, 1975, which was over twelve years later, well beyond the prescriptive period. The Court cited the doctrine in Vda. de Pama vs. Pama, where a similar registration act was deemed the start of the prescriptive period.
Furthermore, the Court upheld the finding of laches. The petitioners’ prolonged inaction for over a decade, during which Cecilia exercised acts of ownership like mortgaging the land in 1963 and leasing it in 1969, and refusing to share its produce, induced her to believe her title was secure and to spend resources on the property. Laches, distinct from prescription, bars a claim due to unreasonable delay in asserting a right, prejudicing the adverse party. Thus, whether by prescription or laches, the petitioners’ claim was correctly dismissed.