VDA. DE RETUERTO vs. BARZ, G.R. No.

148180 December 19, 2001

FACTS: Petitioners are the heirs of Panfilo Retuerto, while respondents are the heirs of Pedro Barz who is the sole heir of Juana Perez Barz. Juana Perez Barz was the original owner of Lot No. 896 having an area of 13,160 square meters. Before her death on April 16, 1929, Juana Perez executed a Deed of Absolute Sale in favor of Panfilo Retuerto over a parcel of land, identified as Lot No. 896-A, a subdivision of Lot No. 896, with an approximate area of 2,505 square meters. On July 22, 1940, the Court issued an Order directing the Land Registration Commission for the issuance of the appropriate Decree in favor of Panfilo Retuerto over the said parcel of land. However, no such Decree was issued as directed by the Court because, by December 8, 1941, the Second World War ensued in the Pacific. However, Panfilo failed to secure the appropriate decree after the war. Sometime in 1966, Pedro Barz, as the sole heir of Juana Perez, filed and application, with the then CFI of Cebu for the confirmation of his title over Lot 896 which included the Lot sold to Panfilo Retuerto. The Court ruled in his favor declaring him the lawful owner of the said property, and thus Original Certificate of Title No. 521 was issued. Lot No. 896-A however was continuously occupied by the petitioners. Thus, a confrontation arose and as a result respondents filed an action on September 5, 1989 for Quieting of Title, Damages and Attorneys Fees. In their answer, petitioners claimed that they were the owners of a portion of the lot which was registered under the name of Pedro Barz and therefore the issuance of the Original Certificate of Title in Pedro Barzs name did not vest ownership but rather it merely constituted him as a trustee under a constructive trust. They further contend that Pedro Barz misrepresented with the land registration court that he inherited the whole lot thereby constituting fraud on his part. ISSUE: The creation of constructive trust and whether Pedro Barz committed fraud by misrepresenting in the land registration court that he inherited the whole lot. DECISION: Constructive trusts are created in equity to prevent unjust enrichment, arising against one who, by fraud, duress or abuse of confidence, obtains or holds the legal right to property which he ought not, in equity and good conscience, to hold. Petitioners failed to substantiate their allegation that their predecessor-in-interest had acquired any legal right to the property subject of the present controversy. Nor had they adduced evidence to show that the certificate of title of Pedro Barz was obtained through fraud. Even assuming arguendo that Pedro Barz acquired title to the property through mistake or fraud, petitioners are nonetheless barred from filing their claim of ownership. An action for reconveyance based on an implied or constructive trust prescribes within ten years from the time of its creation or upon the alleged fraudulent registration of the property. Since registration of real property is considered a constructive notice to all persons, then the ten-year prescriptive period is reckoned from the time of such registering, filing or entering. Thus, petitioners should have filed an action for reconveyance within ten years from the issuance of OCT No. 521 in November 16, 1968. This, they failed to do so.

Sharmilah G. Suarez

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