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10 year prescriptive period pay Peter the difference between the amount

paid by the Spouses Po as consideration for the


CASE 1 : ABOITIZ VS PO entire property and the value of the land the
Facts: DOUBLE SALE CASE Spouses Po were left with after the quitclaim.

1.This case involves a parcel of land located in 11.However, also in 1990, Lot No. 2835 was
Cabancalan, Mandaue City, initially registered also sold to Roberto.
under the name of Roberto Aboitiz.
12.The Mariano Heirs, including Ciriaco,
2.This parcel of land originally belonged to the executed separate deeds of absolute sale in
late Mariano Seno. favor of Roberto.

3. On July 31, 1973, Mariano executed a Deed 13.Thereafter, Roberto immediately developed
of Absolute Sale in favor of his son, Ciriaco the lot as part of a subdivision called North
Seno. Town Homes.

4. On May 5, 1978, Ciriaco sold the two (2) lots 14. On April 19, 1993, Roberto filed an
to Victoria Po (Victoria). application for original registration of Lot No.
2835, the trial court granted the issuance of
Original Certificate of Title No. 0-887 in the
5.The parties executed a Deed of Absolute name of Roberto.
Sale.

15.The lot was immediately subdivided with


6.On July 15, 1982, Mariano died and was portions sold to Ernesto and Jose.
survived by his five (5) children.

16.On November 19, 1996, the Spouses Po


7.In 1990, Peter Po discovered that Ciriaco filed a complaint to recover the land and to
“had executed a quitclaim dated August 7, 1989 declare nullity of title with damages
renouncing his interest in favor of Roberto.

17.The Spouses Aboitiz appealed to the Court


8. In the quitclaim, Ciriaco stated that he was of Appeals.
“the declared owner of Lot Nos. 2835 and 2807.

18.The Court of Appeals, in its Decision dated


9.The Spouses Po confronted Ciriaco. October 31, 2012, partially affirmed the trial
court decision, declaring the Spouses Po as the
10.By way of remedy, Ciriaco and the Spouses rightful owner of the land.
Po executed a Memorandum of Agreement
dated June 28, 1990 in which Ciriaco agreed to
19. However, it ruled that the titles issued to was no showing that Ciriaco merely held
respondents Jose, Ernesto, and Isabel the property in trust for the
should be respected. Mariano Heirs.

20. The Court of Appeals discussed the 26. It held that the action of the Spouses Po
inapplicability of the rules on double had not yet prescribed because their
sale and the doctrine of buyer in good complaint in 1996 was within the 10-
faith since the land was not yet year prescriptive period as the title in
registered when it was sold to the favor of the Spouses Aboitiz was issued
Spouses Po. in 1994.

21. However, it ruled in favor of the 27. However, the Court of Appeals ruled
Spouses Po on the premise that that the certificates of title of Jose,
registered property may be reconveyed Ernesto, and Isabel were valid as they
to the “rightful or legal owner or to the were innocent buyers in good faith
one with a better right if the title was
wrongfully or erroneously registered in
another person’s name.”
ISSUES/ RULING :

22. The Court of Appeals held that the 1. Whether or not the action of Spouses Po
Mariano Heirs were no longer the is barred by prescription even with the
owners of the lot at the time they sold it existence of fraud.
to Roberto in 1990 because Mariano,
during his lifetime, already sold this to
Ciriaco in 1973. - The Spouses Po’s action has not
prescribed. In all cases of registration
procured by fraud, the owner may pursue
23. It found that the Deed of Absolute Sale all his legal and equitable remedies against
between Ciriaco and the Spouses Po the parties to such fraud without prejudice
was duly notarized and was thus however, to the rights of any innocent
presumed regular on its face. holder for value of a certificate of title

24. Their Memorandum of Agreement did


- Article 1456 of the Civil Code provides that
not cancel or rescind the Deed of
Absolute Sale but rather strengthened a person acquiring a property through
their claim that they “entered into a fraud becomes an implied trustee of the
contract of sale. property’s true and lawful owner

25. “It likewise ruled that, contrary to the - An implied trust is based on equity and is
assertion of the Spouses Aboitiz, there either (i) a constructive trust, or (ii) a
resulting trust. A resulting trust is created - The action for reconveyance of the title to
by implication of law and is presumed as the rightful owner prescribes in 10 years
intended by the parties. A constructive trust from the issuance of the title.
is created by force of law such as when a
title is registered in favor of a person other
than the true owner. The implied trustee - Thus, the law creates a trust in favor of the
only acquires the right “to the beneficial property’s true owner.
enjoyment of the property.” legal title
remains with the true owner.
- The prescriptive period to enforce this trust
is 10 years from the time the right of action
Art. 1456 of the Civil Code
accrues.
provides:

Art. 1456. If property is acquired - It is now well-settled that the prescriptive


through mistake or fraud, the period to recover property obtained by
person obtaining it is, by force of fraud or mistake, giving rise to an implied
law, considered a trustee of an trust under Art. 1456 of the Civil Code, is
implied trust for the benefit of the 10 years pursuant to Art. 1144.
person from whom the property
comes.
- This ten year prescriptive period begins to
run from the date the adverse party
- Thus, it was held that when a party uses repudiates the implied trust, which
fraud or concealment to obtain a certificate repudiation takes place when the adverse
of title of property, a constructive trust is party registers the land.
created in favor of the defrauded party.
- Considering that the Spouses Po’s
- Constructive trusts are “created by the complaint was filed on November 19,
construction of equity in order to satisfy the 1996, less than three (3) years from the
demands of justice and prevent unjust issuance of the Torrens title over the
enrichment. They arise contrary to property on April 6, 1994, it is well
intention against one who, by fraud, duress within the 10-year prescriptive period
or abuse of confidence, obtains or holds imposed on an action for reconveyance.
the legal right to property which he ought
not, in equity and good conscience, to
hold.”

- When property is registered in another’s


name, an implied or constructive trust is
created by law in favor of the true owner.