Lopez v. Court of Appeals
REITERATIONFacts
The Antecedents: Juliana Lopez Manzano executed a notarial will establishing a trust fund (Fideicomiso) over her paraphernal properties, to be administered by her husband, Jose Lopez Manzano. Juliana died before the will's probate. Jose, as executor, pursued the probate and was issued letters testamentary. He submitted an inventory and a project of partition, wherein he claimed one-half of Juliana's paraphernal properties as his legitime and the other half to be constituted into the Fideicomiso. He also listed properties registered in both their names, including the disputed properties, which he claimed as conjugal and adjudicated to himself as heir, subject to obligations. The probate court approved the project of partition, ordering new certificates of title to be issued in Jose's name for the disputed properties as heir. The Fideicomiso was constituted over other properties, expressly excluding the disputed lands. Jose later died, leaving a holographic will disposing of the disputed properties to respondents. The RTC ordered the transfer of these properties to respondents, and new titles were issued in their names. Procedural History: Petitioner, as trustee of Juliana's estate, filed an action for reconveyance of the disputed properties, alleging Jose held them in trust for the estate. Respondents filed an answer and a motion to dismiss. The RTC rendered a summary judgment dismissing the action on the ground of prescription. Both parties appealed to the Court of Appeals, which affirmed the RTC's decision. The Court of Appeals also denied petitioner's motion for reconsideration. The Petition: Petitioner filed a petition for review on certiorari, assailing the Court of Appeals' decision that the action for reconveyance had prescribed, and its conclusion that an implied trust, not an express trust, was constituted.
Issue(s)
Whether the action for reconveyance has prescribed. Whether an implied trust, instead of an express trust, was constituted over the disputed properties.
Ruling
The petition is denied, and the decision and resolution of the Court of Appeals are affirmed. The action for reconveyance has prescribed.
Ratio Decidendi
On the issue of prescription of the action for reconveyance: The Court held that an action for reconveyance based on an implied or constructive trust prescribes in 10 years. This period is reckoned from the date of the issuance of the original certificate of title or transfer certificate of title, as such issuance operates as a constructive notice to the whole world. In this case, the ten-year prescriptive period must be counted from the registration of the disputed properties in Jose's name on September 15, 1969. This date served as constructive notice that Jose adjudicated the properties to himself as the sole heir, not as trustee of the Fideicomiso. The Court further clarified that for constructive implied trusts, repudiation of the trust is not a condition precedent to the running of the prescriptive period. Therefore, the action filed on December 11, 1984, was filed beyond the ten-year prescriptive period. On the issue of the nature of the trust constituted: The Court found that while Juliana's intent was to constitute an express trust (Fideicomiso), the disputed properties were expressly excluded from this trust by the probate court's order. The adjudication of these properties to Jose as the sole heir, even if erroneous, was approved by the court. If a mistake occurred, it was not rectified by any party. The registration of the disputed properties in Jose's name, partly as his conjugal share and partly as inheritance, contrary to the petitioner's claim that they were intended for the Fideicomiso beneficiaries, created a mere implied trust of the constructive variety. This constructive trust arose by operation of law to satisfy the demands of justice and prevent unjust enrichment, as per Article 1456 of the Civil Code, which deals with property acquired through mistake or fraud.
Main Doctrine
An action for reconveyance based on an implied or constructive trust prescribes in 10 years, reckoned from the date of the issuance of the original certificate of title or transfer certificate of title, as such issuance operates as constructive notice to the whole world.