G.R. No. L-9701; July 31, 1957
CRESENCIA BLANCA ROSARIO, ET AL., plaintiffs-appellants, vs. AMADOR ROSARIO, ET AL., defendants-appellees.

FACTS

The plaintiffs-appellants, children of the deceased Hipolito Rosario, filed a complaint for reconveyance, accounting of fruits since 1915, and costs. They alleged that the parcel of land (Lot 101, Urdaneta Cadastre) belonged to their father, Hipolito Rosario, who in 1915 entrusted its management to Partenio Rosario, the deceased father of the defendants-appellees. They claimed Partenio Rosario, taking advantage of this trust, fraudulently registered the land in his own name on August 28, 1917. The land was subsequently mortgaged to the Philippine National Bank (1919), sold under a pacto de retro to Librada Villarin (1923), then sold to Geminiano Villarin (1925/1926), and finally sold to the defendants-appellees, Amador Rosario and Florentino J. Rosario (1949), who obtained a transfer certificate of title in their names. The defendants moved to dismiss the complaint on the ground that the action was barred by the statute of limitations. The lower court granted the motion to dismiss, finding that the land had passed through several transactions to innocent purchasers for value, making reconveyance impossible, and that the action had prescribed. The plaintiffs appealed.

ISSUE

Whether the lower court correctly dismissed the complaint for reconveyance on the grounds of prescription and because the land had passed to innocent purchasers for value.

RULING

Yes, the lower court’s dismissal is affirmed. The Supreme Court held that the action for reconveyance is an equitable remedy available only when the property wrongfully registered under the Torrens system has not passed into the hands of an innocent purchaser for value. The records, which the court could consider, showed a series of transactions from 1917 to 1949, culminating in the defendants’ acquisition of title. The defendants, as purchasers from Geminiano Villarin (who was not a relative of the original registered owner), were innocent purchasers for value. Reconveyance could no longer be granted as it would undo these transactions. Furthermore, the allegations in the complaint itself—that the fraudulent registration occurred in 1917 and an accounting of fruits was sought since 1915—justified the dismissal on the ground of prescription. The plaintiffs’ denial of the genuineness of the documents showing these transactions in a related case for recovery of possession did not preclude the court from considering them for the motion to dismiss in the reconveyance case.