Sevilla v. Angeles
REITERATIONFacts
The Antecedents: Plaintiffs are the legitimate children of spouses Felix Sevilla and Ciriaca Ramos. During their marriage, the spouses applied for a homestead. Ciriaca Ramos died before the patent issuance. Felix Sevilla continued the prosecution, and the patent was granted on April 27, 1934, with Original Certificate of Title No. 1056 issued in the name of the "heirs of Felix Sevilla." Before the patent issuance, Felix Sevilla married the defendant, Concordia de los Angeles. After Felix Sevilla's death, the defendant, through alleged fraudulent representation and by pretending to be the sole heir, succeeded in having Original Certificate of Title No. 1056 cancelled and Transfer Certificate of Title No. 577 issued in her name. She has possessed the land and appropriated its produce since 1936. Procedural History: Plaintiffs instituted an action to recover the land and cancel the defendant's title, alleging fraudulent procurement. The defendant filed an answer and later two motions to dismiss, arguing the complaint stated no cause of action and that the action had prescribed. The trial court initially denied the first motion but reconsidered and dismissed the case on the ground of prescription in an order dated October 20, 1953. The Petition: Plaintiffs appealed the order of dismissal.
Issue(s)
Whether an action for the reconveyance of property based on a constructive trust created through fraud is barred by prescription due to the constructive notice provided by the registration of the title.
Ruling
The order of dismissal is set aside, and the case is remanded to the lower court for further proceedings.
Ratio Decidendi
On Issue 1: The Court ruled that the defense of prescription cannot be set up in an action whose purpose is to recover property held by a person in trust for the benefit of another. While the trial court's ruling on constructive notice is generally correct for ordinary actions involving Torrens titles, it does not apply when the purpose of the action is to compel a trustee to convey property registered in trust for the benefit of the cestui que trust. Citing Feliciano Manalang v. Garcia Canlas, the Court emphasized that an action to compel a trustee to convey registered property held in trust does not prescribe. The Court further noted, per Cristobal v. Gomez, that prescription is not effective against a beneficiary in favor of a trustee of a continuing and subsisting trust. In this case, the defendant's act of acquiring title through fraud created a 'constructive trust' as defined in Gayondato v. Treasurer of the Philippine Islands. Because the title was acquired tortiously, the wrongdoer is styled a 'trustee' for the true owner to provide an equitable remedy. Therefore, the lapse of time since the issuance of the fraudulent title in 1936 does not bar the plaintiffs' right to vindicate the property, and the case must be remanded to determine the facts of the fiduciary relation.
Main Doctrine
The defense of prescription cannot be set up in an action to recover property held by a person in trust for the benefit of another, as such action does not prescribe. A constructive trust arises when legal title to property is obtained by fraud or concealment, granting the defrauded party the right to vindicate the property regardless of the lapse of time.