ROSA GICANO AND NENITA GEOLLEGUE, PETITIONERS, VS. ROSA GEGATO, RESURRECCION GEGATO AND CATALINA GEGATO, RESPONDENTS.

Gicano versus Gegato

The Case

This is a petition brought by Rosa Gicano and Nenita Geollegue against Rosa Gegato, Resurreccion Gegato, and Catalina Gegato, arising from an action to reconvey a large tract of land in Hinigaran, Negros Occidental, known as Lot 818, and to recover damages. The plaintiffs below claimed that a deed of sale executed in 1952 had been procured through fraud, and that the defendants held the land under a constructive trust. The case matters because it fixes the prescriptive period for an action to recover an immovable held under a constructive trust: ten years, counted from the issuance of title to the defendant. It also teaches when a trial court may dismiss a complaint on the ground of prescription without a full trial on the merits.

Procedural History

Rosa Gegato and her daughters filed their action for reconveyance and damages in the Court of First Instance of Negros Occidental. The defendants moved to dismiss on grounds of lack of cause of action, laches, estoppel, and prescription. The trial court denied the motion as to lack of cause of action but deferred the other grounds until trial. Later, after considering the pre-trial briefs and memoranda, and without scheduling a trial on the merits, the trial court issued an order dismissing the complaint on the ground of prescription and laches. It held that the action, being one for reconveyance based on an implied trust, prescribed in ten years from the registration of the deed and issuance of title, and that twenty-three years had already elapsed.

The Court of Appeals reversed the trial court on appeal, holding that the outright dismissal was premature and violative of due process, and remanded the case for a full trial on the merits. It also reasoned that the action was not time-barred, treating the deed as void in part under the Civil Code and the action as imprescriptible. The case then reached the Supreme Court, which reversed the Court of Appeals and reinstated the trial court's order of dismissal.

Facts

Lot 818 was originally owned in equal shares by two co-owners: Maximo Juanico, married to Rosa Gegato, and Matilde Geolingo, married to Dionisio Mongcal. Maximo Juanico died in May 1942, survived by his wife Rosa Gegato and three minor children: Presentacion, Resurreccion, and Catalina. Matilde Geolingo and her husband also died, and their only child, Loreto Mongcal, adjudicated to herself her mother's one-half share and sold it in December 1951 to Rosa Gicano. A new title was then issued in the names of Maximo Juanico, married to Rosa Gegato, for one-half, and Rosa Gicano, married to Gorgonio Geollegue, for the other half.

In August 1952, a document was executed purporting to be a deed of sale, more properly a dacion en pago de deuda, intended to satisfy a debt of the late Maximo Juanico to Rosa Gicano by conveying his one-half share in Lot 818. It was signed by Rosa Gegato and her second husband, Raymundo Pundon, who took part as judicial guardian of the two surviving minor children, Resurreccion and Catalina. It was acknowledged before a notary public. The sale was registered, the old title was cancelled, and a new title covering the entirety of Lot 818 was issued solely in the name of Rosa Gicano.

Twenty-three years later, in February 1976, Rosa Gegato and her daughters sued to compel reconveyance and to recover damages. They alleged that they never intended to transfer the entire one-half share, but only one-third of the minors' share; that they were deceived, being unable to read and write English; and that they discovered the fraud only in 1975 when a surveyor informed them that title had long since issued solely in the name of Nenita Geollegue, who had purchased the land from her mother and obtained her own title in 1964, and who had later mortgaged the lot to a bank.

Issues

• Whether or not the action to recover the land, predicated on a constructive trust arising from fraud, prescribes in ten years counted from the issuance of title to the defendant.
• Whether or not the action, filed twenty-three years after the issuance of title, was already barred by prescription.
• Whether or not the trial court may dismiss the action on the ground of prescription without first conducting a trial on the merits.

Applicable Provisions

The decision refers to the Civil Code provisions on void contracts invoked by the Court of Appeals. Article 1409 of the Civil Code provides:

Those which are expressly prohibited or declared void by law are inexistent and void from the beginning.

This bears on the case because the Court of Appeals treated the deed as void in part under this provision, making the action imprescriptible.

Article 1410 of the Civil Code provides:

The action or defense for the declaration of the inexistence of a contract does not prescribe.

This bears on the case because the Court held that the plaintiffs' action was not one to declare the deed void from the beginning, but one to annul it on account of fraud under a constructive trust, which does prescribe.

Ruling

On the first issue, the Court held that an action to recover an immovable from a defendant allegedly holding it under a constructive trust prescribes in ten years, counted from the issuance of title to that defendant. The Court applied this rule consistently with its prior decisions.

On the second issue, the Court held that the action was already barred. The plaintiffs had executed and acknowledged before a notary public a deed that on its face transferred the entirety of Maximo Juanico's share to Rosa Gicano. If they were truly deceived into believing that the deed conveyed only one-third of the children's share, they had the right to sue and recover so much of the property as they never intended to transfer, but they had to do so within ten years from the issuance of title to Rosa Gicano on the strength of the supposedly fraudulent deed. They filed only after twenty-three years. The Court held that their action had been extinguished by prescription, and that they had slept on their rights.

On the third issue, the Court held that trial courts have the authority and discretion to dismiss an action on the ground of prescription when the parties' pleadings or other facts on record show it to be time-barred. The Court held that what is essential is that the facts demonstrating the lapse of the prescriptive period be sufficiently and satisfactorily apparent on the record, either in the averments of the complaint or otherwise established by the evidence. The Court found that this requirement was satisfied, so the dismissal without a trial on the merits was proper.

Doctrine

An action to recover an immovable from a defendant holding it under a constructive trust prescribes in ten years, counted from the issuance of title to the defendant. The action is one to annul the deed on account of fraud, not one to declare the contract inexistent under Article 1409 of the Civil Code, so the imprescriptibility rule of Article 1410 does not apply. A trial court may dismiss an action on the ground of prescription without a trial on the merits, provided the facts showing the lapse of the prescriptive period are sufficiently and satisfactorily apparent on the record.

Disposition

The Court reversed the decision of the Court of Appeals and reinstated and affirmed the trial court's order dismissing the action for reconveyance and damages on the ground of prescription, with costs against the respondents.

Remember This

Memorize this line: an action to recover an immovable held under a constructive trust prescribes in ten years from the issuance of title to the defendant. Examiners use this case to test the distinction between an action to annul a deed for fraud, which prescribes, and an action to declare a contract inexistent under Article 1409, which does not, and to test when prescription may be resolved without a full trial.