SPOUSES CELSO DICO, SR. AND ANGELES DICO, PETITIONERS, VS. VIZCAYA MANAGEMENT CORPORATION, RESPONDENT.

Dico versus Vizcaya Management Corporation

The Case

This is a petition for review on certiorari brought by the spouses Celso Dico and Angeles Dico against Vizcaya Management Corporation. The Dicos sued to annul and cancel the corporation's Torrens titles, claiming that the corporation had land-grabbed a portion of their own titled land, Lot 486 of the Cadiz Cadastre, when it consolidated and subdivided its neighboring lots into the Don Eusebio and Cristina Village subdivisions. The case matters because it fixes the prescriptive period for an action to reconvey real property based on an implied or constructive trust at ten years, and because it shows how the Supreme Court treats findings of fact that the trial court drew from a mistaken premise.

Procedural History

The Dicos filed their complaint for annulment and cancellation of titles in the Regional Trial Court of Negros Occidental, later amending it to include a prayer for the restoration of possession. The trial court ruled in their favor, declaring them absolute owners of a portion of Lot 486, ordering the corporation to vacate and to pay rentals and damages, declaring the corporation's mother title spurious and cancelling it and all titles derived from it, and directing the Solicitor General to look into a possible reversion and escheat.

Vizcaya Management Corporation appealed to the Court of Appeals, which reversed and set aside the trial court's decision, dismissed the complaint for lack of merit, declared the corporation the absolute owner of its lots, declared its titles valid and genuine, declared the Dicos the absolute owners of Lot 486, and upheld the earlier decision of the City Court of Cadiz in the unlawful detainer case. The Court of Appeals denied the Dicos' motion for reconsideration. The Dicos then came to the Supreme Court by petition for review on certiorari.

Facts

Celso Dico was the registered owner of Lot 486 of the Cadiz Cadastre, with an area of 67,300 square meters, and he and his wife Angeles had resided there since 1958. Vizcaya Management Corporation, on the other hand, held registered titles over Lot 29-B, with an area of 369,606 square meters, and over Lot 1412, formerly Lot 1118-B, with an area of 85,239 square meters. Two other lots, Lot 1426-B and Lot 1426-C, were registered in the names of Eduardo and Cesar Lopez, who had formed the corporation.

In 1967 the corporation caused the consolidation and subdivision of these four lots under a plan approved by the Land Registration Commission and assigned the number PCS-6611. The consolidation produced four new lots, which the corporation then used to develop the Don Eusebio Subdivision and the Cristina Village Subdivision, selling lots there from 1971 onward. In 1981 the corporation won an unlawful detainer case against the Dicos in the City Court of Cadiz, and that decision became final.

In 1986 the Dicos sued to annul the corporation's titles, alleging that the corporation had land-grabbed a portion of Lot 486. The trial court found that the corporation's consolidation had produced a total area larger than the sum of its original lots, and concluded that the excess had been taken from Lot 486. The Court of Appeals, however, recomputed the areas and found that the four consolidated lots totaled only 467,587 square meters, against the 481,583 square meters reflected in the approved plan, an excess of only 13,996 square meters, which the plan itself noted in a handwritten entry. It also found that the Dicos' free patent application for Lot 1412 was a forged document, and that the complaint had been filed some twenty-nine years after the corporation's title was issued.

Issues

• Whether or not the Dicos' action for reconveyance based on implied or constructive trust was already barred by prescription.
• Whether or not the Court of Appeals erred in accepting the corporation's claim that the designation of Lots 1246-B and 1246-C was a mere typographical error for Lots 1426-B and 1426-C.
• Whether or not the Court of Appeals erred in reversing the trial court despite its finding of land grabbing.

Applicable Provisions

The decision rests on the law on implied or constructive trust and the prescription of actions, which the Court states in its opening line:

The prescription of actions for the reconveyance of real property based on implied trust is 10 years.

This rule is decisive because it fixes the period within which the Dicos had to sue to recover land held by another under an implied trust.

Ruling

On the first issue, the Court held that the action for reconveyance was properly dismissed because prescription had set in. The Court adopted the reasoning of the Court of Appeals, which held that even granting that fraud attended the issuance of the corporation's titles, and that the Dicos had the personality to seek reconveyance on the basis of an implied or constructive trust, their complaint filed in 1986 came too late, since they were deemed to have discovered the fraud when the earlier titles were recorded in 1934 and 1956. Their right to seek reconveyance, if it existed at all, had already prescribed.

On the second issue, the Court agreed with the corporation that the designation of Lots 1246-B and 1246-C was a typographical error for Lots 1426-B and 1426-C. It accepted that consolidation of non-contiguous lots is not possible, but found that this case did not fall under that scenario, because the lots actually consolidated were the contiguous ones.

On the third issue, the Court held that the trial court's finding of land grabbing had no support in the evidence. The trial court had computed the excess by comparing the consolidated area only against Lot 29-B, ignoring the three other lots included in the consolidation. The Court of Appeals found the excess to be only 13,996 square meters, and the Court upheld this, noting that the trial court's figure would have enlarged Lot 486 from 67,300 square meters to 179,259 square meters, which is beyond what its own title states.

Doctrine

An action for the reconveyance of real property based on an implied or constructive trust prescribes in ten years. The period is counted from the registration of the title, because registration is constructive notice to the whole world, and the registered owner is deemed to have discovered the fraud from that moment. A party who sleeps on his right for twenty-nine years cannot invoke the equity of a trust to defeat a Torrens title. A Torrens title is indefeasible and conclusive, and the remedy of reconveyance is a narrow exception available only within the prescriptive period.

Disposition

The Supreme Court denied the petition and affirmed the decision of the Court of Appeals, which had dismissed the Dicos' complaint and declared Vizcaya Management Corporation the absolute owner of its lots.

Remember This

Memorize the line: the prescription of actions for the reconveyance of real property based on implied trust is ten years, counted from the registration of the title. Examiners use this case to test whether a candidate knows that a constructive trust does not suspend the running of prescription, and that registration is constructive notice that starts the clock.