Case Title:

G.R. 214315, August 14, 2019

Heirs of Benigno Sumagang v. Aznar Enterprises

Topic:
Indefeasibility of Torrens Title
Laches

Ponente:
Reyes, J.

Doctrine:
(1) Property covered by a Torrens Title becomes indefeasible after the lapse of a period of
one year from the entry of its decree of registration. After such period, the title becomes
indefeasible.

(2) When a property is registered in another’s name, an implied or constructive trust is

created by law in favor of the true owner, at which point the party has ten years from the
time the adverse party repudiates the implied trust.

Facts:
Respondent Aznar Brothers Realty Company (ABRC) is the owner of a parcel of land in Cebu
City which is part of a tract of land developed by the Sta. Lucia Realty Development
Corporation. In 1998, the heirs of Perfecta Labaya instituted an action to recover property against
ABR under the claim that the parcel of land belonging to the company formed part of the estate
of the decedent, Gregorio Labaya. They claim that they were the ones who were in open,
notorious, actual, continuous, and adverse possession of the land until Sta. Lucia came in and
developed it, at which point they came to know that ABRC had title to the land.

In defense of their claim, ABRC stated that it had title over the land since 1971 while the
claimants only filed their case in 1998, which thus makes their claim extinguished by
prescription. This, in turn, was countered by the defendants claiming that ABRC had forcefully
occupied the lots irrespective of their own rights. In the end, the RTC declared Aznar the proper
owners of the parcel of land, with the CA concurring with the decision of the RTC.

Issue:
Did the CA err in sustaining the trial court?

Held:
No. Under Sec. 32 of PD 1529, the title to the property covered by a Torrens Title becomes
indefeasible after the lapse of a period of one year from the entry of its decree of registration.
ABRC’s title, having been issued in 1971, is no longer subject to review since ABRC’s right to
the same had become permanent. In addition, even an action for reconveyance based on implied
or constructive trust is already barred since it only has a lifetime of 10 years from the date of
fraudulent registration. This is so because when a property is registered in another’s name, an
implied or constructive trust is created by law in favor of the true owner, at which point the party
has ten years from the time the adverse party repudiates the implied trust.