JUANITO GONZALES AND CORONACION GONZALES, PETITIONERS, VS. THE INTERMEDIATE APPELLATE COURT, ROSITA LOPEZ, GAVINO CAYABYAB, AGUEDA UBANDO, FELIPA UBANDO, PEDRO SORIANO, TEODISIA…

This is a petition for review on certiorari of the
decision of the then Intermediate Appellate Court dated July 29, 1983 reversing
the decision of the then Court of First Instance dated September 30, 1977 in
Civil Case No. D-1724 and reinstating said lower court’s judgment of March 22, 1974.

The facts of the case are as follows:

On April 14, 1965,
private respondents, as plaintiffs, instituted a complaint for partition
against Fausto Soy. 
They alleged that they had a pro-indiviso
share (to the extent of three-fourths) in a parcel of residential land
identified as Lot No. 6870-B, located in Dagupan City,
with an area of 480 square meters and covered by Torrens Certificate of Title
No. 9144.  Their claim was anchored on
the fact that Fausto Soy was the brother of Emilia Soy, the deceased mother of Rosita Lopez; of
Cornelia Soy, the deceased mother of Agueda Ubando, Amado Ubando
and Felipe Ubando; and of Anastacia
Soy, the deceased mother of Teodosia Lopez.^[1]

As a consequence of the filing of the complaint, a notice of lis pendens was
annotated on the same day on TCT No. 9144.^[2]

In his answer, Fausto Soy contested the
claims of the plaintiffs and asserted exclusive title in his name.  He countered that the land in question was
never registered in the names of his parents Eugenio
Soy and Ambrosia Marcella, that he had been the registered owner of the
premises since 1932 in consequence of which Original Certificate of Title No.
49661 of the Register of Deeds of Pangasinan was
issued in his favor, and that spouses Eugenio Soy and
Ambrosia Marcella from whom the property allegedly came died more than 24 years
ago.^[3]

During the pendency of the action for
partition, Fausto Soy died and was substituted by his
children named Jose, Antonio, Teofilo, Amparo and Walter, all surnamed Soy.  Walter later died and was substituted by his wife Susing Cornel
and minor children Myrna, Linda and Linly, all
surnamed Soy.^[4]

On March
22, 1974, the trial
court rendered its decision holding that private respondents and Fausto Soy were co-owners of Lot No. 6870-B and ordering
the partition thereof.  Significantly,
the parties were enjoined to make the project of partition among themselves and to submit the same to the lower court for
confirmation.  If they could not agree,
then the court would appoint commissioners who would undertake the partition on
behalf of the co-owners.^[5]

On execution, the sheriff
was unable to effect the apportionment of the property due to the filing by
petitioners Juanito and Coronacion
Gonzales of their third party claim stating that they were the registered
owners of 480 square meters of Lot No. 6870-B. 
In his report submitted to the trial court on October
10, 1974, the
sheriff likewise noted the various improvements petitioners had introduced on
the residential land, specifically a 2-door apartment, a residential house and
a piggery.^[6]

Petitioners Juanito and Coronacion Gonzales
subsequently filed their motion for intervention on April 11, 1975, stating, inter alia:

“1.   That at the time the instant case was
commenced, they were already the registered owners of 480 square meters as
shown by Transfer Certificate of Title No. 16922, dated January 29, 1960,
pursuant to deeds of sale executed at an earlier date by the late Fausto Soy;

“2.   That at the time this suit was instituted,
the said Fausto Soy was no longer the owner in fee
simple, which fact plaintiffs already knew being residents of Bonuan where the property in question is situated and where
herein spouses likewise reside;

“3.  That inspite of the
foregoing, plaintiffs deliberately concealed this suit from the herein-named
spouses by not including them as indispensable parties-defendants pursuant to
Sections 2 and 7 of Rule 3 of the New Rules of Court, and likewise failed and
omitted to inform the Honorable Court pursuant to Section 9, Rule 3 of the
Rules of Court, of such fact which, had
it been conveyed would have been a compulsory basis for the Honorable Court to
summon their appearance, for without their presence, no valid judgment could
ever be rendered.

“x x x                                     x x x                                         x x
x .“^[7]

Petitioners then prayed that the decision of March 22, 1974 be set aside or reconsidered; that
Civil Case No. D-1724 be re-opened, and that they be
allowed to intervene and present their evidence.

On July 23, 1975, there being no opposition, the trial court
allowed the Gonzaleses to intervene as indispensable
parties in the case, vacated the judgment of March 22, 1974 and granted a new
trial.  The lower court reasoned that the
intervention even at that stage was proper since the judgment was not complete
for want of a final project of partition supposed to be submitted to the court
for confirmation.  Being incomplete, the
judgment had not become final and executory.  Moreover, without the Gonzales spouses as
indispensable parties, no valid decision could ever be rendered.^[8]

The parties then agreed to submit the case for adjudication on a
stipulation of facts which states as follows:

“A.
Stipulation of Facts as proposed by the Intervenors
(Gonzales spouses) and admitted by the plaintiffs, to wit:

“1.   That the land is originally covered by
Original Certificate of Title No. 49661 (now Transfer Certificate of Title No.
3904, Dagupan City), Record No. 916, Case No.35 in the
name of Fausto Soy;

“2.   That on January 22, 1941, Fausto
Soy sold 253 square meters of the land to Francisco Landingin,
x x x .

“3.  That on July 22, 1954, Antonio Soy and Gregoria Miranda sold 240 square meters of the said land to
Juanito Gonzales and Coronacion
Ganaden as intervenors
herein x x x.  The basis of the
vendors’ right was pursuant to a deed of donation executed by Fausto Soy in their favor, described as Doc. No. 201, Page
No. 4, Bk. III, Series of 1952, notarial register of Maximo Landingin;

“4.   That on September 22, 1954, TCT No. 9141 was issued.  Therein was indicated the following as
registered owners:  Fausto
Soy with an area of 480 sq. meters, Pio Siapno, 253 sq. m. and Juanito
Gonzales and Coronacion Ganaden,
240 sq. m.;

“5.   That on March 3, 1958 said co-owners subdivided the land pursuant
to a deed of confirmation and subdivision, registered March 4, 1958;

“6.   That on January 27, 1960, Fausto Soy
sold 240 sq. m. of the land to Juanito Gonzales and Coronacion Ganaden by means of
Doc. No. 15, Page 23, Bk. VII, Series of 1960, notarial
register of Maximino Landingin,
registered on January 29, 1960;

“7.   That on January 29, 1960, Transfer Certificate of Title No. 16922
was issued to Juanito Gonzales, wherein was indicated
his share as co-owner of 480 square
meters; and Fausto Soy, 240 square meters;

“8.   That on March 11, 1965, Fausto
Soy sold 140 square meters of the
land to intervenors herein by means of Doc. No. 112,
Page 53, Bk. XI, Series of 1965 of the Notarial
Register of Maximino Landingin
registered on October 31, 1967;

“9.   That
on April 14, 1965,
plaintiffs filed the instant complaint for partition against Fausto Soy;

“10.   That on April 14, 1965, plaintiffs filed a notice of lis pendens annotated in the
certificate of title of the said land;

“11.   That
on May 15, 1965,
Fausto Soy filed his Answer;

“12.   That
on December 8, 1967, the
case was dismissed for failure of the parties to appear;

“13.  That on December 15, 1967 the Court issued an
order in Cadastral Case No. 35, Record No. 916, cancelling
the annotation of lis pendens
(upon petition of the intervenors);

“14.   That on November 28, 1967, plaintiff filed a motion to reconsider
order dismissing the complaint;

“15.   That on January 18, 1968, plaintiffs filed a notice of death of
defendant Fausto Soy;

“16.   That on March 18, 1968, the Court reopened the case;

“17.   That on October 31, 1968 plaintiffs filed an amended complaint;

“18.   That on November 16, 1973, the case was again dismissed for
non-appearance of the parties;

“19.   That on November 16, the order of dismissal
was set aside;

“20.   That on January 9, 1974 defendants did not appear and plaintiffs
were allowed to present their evidence ex-parte;

“21.   That on March 22, 1974, the case was decided on the basis of the
evidence adduced ex-parte;

“22.   That a writ of execution was issued for
execution but could not be enforced because of the third party claim of the
herein intervenors;

“23.   That herein intervenors
filed a motion for intervention on April
15, 1975 which was granted pursuant to the order of the Court dated
July 23, 1975;

“24.   That intervenors
filed an Answer in Intervention on September
17, 1975;

“25.  That on May 24, 1976, plaintiffs filed a
re-amended complaint, and on June 14,
1976, intervenors filed an amended answer
in intervention;

“26.  That
intervenors had been in possession of the area of 620
sq. meters on the various dates of acquisition stated in the foregoing up to
the present;

“27.   That intervenors
had been paying the real estate taxes and had declared the same for taxation
purposes in their names as owner;

“28.   That the possession of the foregoing
properties including the land in question is open and public.

“B.  Stipulation of
Facts proposed by plaintiffs and admitted by intervenors
as follows:

“1.   That the original complaint was filed on April 14, 1965 by plaintiffs Rosita
Lopez, x x x against Fausto Soy;

“2.   That upon the death of Fausto
Soy, the complaint was re-amended to implead his
heirs x x x ;

“3.   That the original plaintiffs and original
defendant are brother and sisters;

“4.   That the disputed property is Cadastral Lot
No. 6870, TCT No. 9144 and particularly described in paragraph 3 of the
original complaint;

“5.   That due to the failure of the defendants to
appear in the hearing, the plaintiffs were allowed to adduce their evidence and
on March 22, 1974, the
Honorable Court rendered a decision in favor of plaintiffs;

“6.   That when the said decision became final and executory, the same cannot be implemented in view of the
third party claim on the intervention;

“7.   That the intervenors
intervened and filed their Answer to the complaint;

“8.   That on April 14, 1965, the plaintiffs filed with the Register of
Deeds a Notice of Lis Pendens
which is duly annotated as Entry No. 30414 in TCT No. 9144;

“9.   That on January 27, 1960, the spouses intervenors bought a portion of 240 sq. meters for the sum
of P900.00 from Fausto Soy, as per Entry 19356 of TCT
No. 9144;

“10.   That as a consequence of such purchase x x x; TCT No. 9144 was cancelled
by TCT Nos. 9178 and 16922, the latter in the name of intervenors
and Fausto Soy, in the portion of 480 sq. meters for Fausto Soy;

“11.   That said intervenors
purchased their remaining portion of 140 sq. meters in the name of Fausto Soy, all of which
purchase were subsequently to the
annotation of the lis pendens;

“12.  That the intervenors were able to obtain new title TCT NO. 19848 in
their names over the entire property, by filing a petition for cancellation of lis
pendens, when the case was dismissed (but was
reconsidered) and which cancellation was entered as Entry No. 39511.”^[9]

Accordingly, the trial
court rendered its decision on September
30, 1977 and ruled thus:

“In this instant case, the Court finds out that there is no
iota of proof to show that the plaintiffs are co-owners of the property in
question.  The case has no leg to stand
on because the land has long been covered by O. C. T. as far back as 1932 in
the name of their predecessor in interest Fausto Soy.

“WHEREFORE, judgment is hereby rendered as follows:

“(a)    Ordering the case filed by the herein
plaintiffs dismissed;

“(b)    Declaring and sustaining the ownership of
the INTERVENORS over the portions of the property purchased by them from Fausto Soy;

“(c)    Ordering the cancellation of the notice of lis pendens
annotated at the back of their title.

“(d)    Ordering the plaintiffs jointly and
severally to pay attorney’s fees to the Intervenors
in the amount of P2,000.00 and to pay the costs. x x
x .“^[10]

On appeal to the Appellate Court, private respondents argued that
the trial court erred in finding that the appellants (private respondents) had
not established co-ownership of the property in question; in not declaring as
invalid the sale of 140 square meters of the disputed realty even after the
annotation of lis pendens
in the title thereof; and in not ordering the appellees
(petitioners) to reconvey to appellants the 140
square meters covered by the lis pendens.

On the bases of the above-assigned errors and on the alleged
failure of the appellees to file their appellees‘ brief, the Appellate Court resolved the appeal
in favor of the appellants, declaring that the sale to the intervenors-appellees
(petitioners) by Fausto Soy did not terminate the
trust relationship between the appellants and the appellees.  The decision of the Appellate Court dated July 29, 1983, now under review,
states:

“WHEREFORE, We reverse and set aside the appealed judgment and
render another one reviving and reinstating the lower court’s decision of March
22, 1974 with the modification that the sales deeds executed by Fausto Soy in favor of intervenors-appellees
shall be enforced against the one-fourth (1/4) share of defendants, as heirs of
said Fausto Soy.  x x
x.”^[11]

The crucial issue to be resolved in the instant case is whether Lot
6870-B was held in trust by Fausto Soy for his
sisters Emilia, Cornelia and Anastacia.

According to the Appellate Court:

“From the time the subject property (Lot
6870) was brought under the operation of the Land Registration Act in the name
alone of Fausto Soy, who had recognized the proprietary
rights of plaintiffs-appellants as co-owners, the land was impressed with a trust relationship in favor
of Fausto’s sisters or their children.  When Fausto sold a
portion of 140 square meters to intervenors, the
relationship of trust included said intervenors.  Upon the death of Fausto
Soy, the trust relationship subsisted between Fausto’s
heirs and his living sisters or the latters’
children, as well as the intervenors-appellees.  x x x .

“In other words, the sales in favor of intervenors-appellees
did not terminate the trust relationship between plaintiffs-appellants and intervenors-appellees.”^[12]

We hold that after Fausto Soy, the predecessor-in-interest of herein
petitioners, had appeared to be the registered owner of the lot for more than
thirty years, his title had become inde­feasible and his dominical rights over
it could no longer be challenged.  Any
insinuation as to the existence of an implied or constructive trust should not
be allowed.

Private respondents have
invoked Article 1456 of the Civil Code which states that “if property is
acquired through mistake or fraud, the person obtaining it is, by force of law,
considered a trustee of an implied trust for the benefit of the person from
whom the property comes.”

The trust alluded to in
this case is a constructive trust arising by operation of law.  It is not a trust in the technical sense.^[13]

Even assuming that there
was an implied trust, private respondents’ attempt at reconveyance
(functionally, an action for partition is both an action for declaration of
co-ownership, and for segregation and conveyance of a determinate portion of
the subject property.  See Roque vs. IAC, G. R. No. 75886, August 30, 1988, 165 SCRA 118) was clearly barred by
prescription.

Prescription is rightly regarded as a statute of repose whose
object is to suppress fraudulent and stale claims from springing up at great
distances of time and surprising the par­ties or their representatives when the
facts have become obscure from the lapse of time or the defective memory or
death or removal of witnesses.^[14]

It is well-settled that an action for reconveyance
of real property to enforce an implied trust prescribes in ten years, the
period reckoned from the issuance of the adverse title to the property which
operates as a constructive notice.^[15]

In the case at bar, that assertion of adverse title, which was an
explicit indication of repudiation of the trust for the purpose of the statute of limitations, took
place when OCT No. 49661 was issued in the name of Fausto
Soy in 1932, to the exclu­sion of his three sisters.^[16]

But even if there were no repudiation — as private re­spondent
Rosita Lopez would have us believe when she testified in court that while Fausto Soy might have succeeded in securing title in his
sole name, he nonetheless recognized the co-ownership between him and his
sisters — the rule in this juris­diction is that an action to enforce an
implied trust may be circumscribed not only by prescription but also by laches, in which case repudiation is not even required.

From 1932 to 1965, or a period of thirty-three years, private
respondents had literally slept on their rights, presuming they had any.  They can no longer dispute the conclusive and
incontrovertible character of Fausto Soy’s title as
they are deemed, by their unreasonably long inaction, to have acquiesced
therein.  Moreover, the law protects
those who are vigilant of their rights. 
Undue delay in the enforcement of a right is strongly indicative of a
lack of merit in the claim, since it is human nature for persons to assert
their rights most vigorously when threatened or invaded.^[17]

WHEREFORE, the judgment of the Appellate Court dated July 29, 1983 is REVERSED and the complaint for
partition is hereby ordered DISMISSED. 
No costs.

SO ORDERED.

 Davide,
Jr., and Romero, JJ.,
concur.

Gutierrez, Jr., J., in the
result.

Bidin, J., no part.

^[1]
Amended Record on Appeal, p. 2

^[2]
Ibid, p. 48

^[3]
Ibid, p. 5

^[4]
Ibid, pp. 8-9

^[5]
Ibid, pp. 13-14

^[6]
Ibid, pp. 17-18.

^[7]
Ibid, pp. 18-19.

^[8]
Supra, pp. 27-28.

^[9]
Supra, pp. 40-43; Emphasis supplied.

^[10]
Supra, p. 46.

^[11]
Rollo, p. 28.

^[12]
Rollo, pp. 27-28.

^[13]
Gayondato vs. Treasurer of the P.I., 49 Phil.
244.

^[14]
53 C.J.S. 903 cited in Sinaon vs. Sorogon, G.R. No.
59879, May 13, 1985, 136 SCRA 407, 410.

^[15]
Amerol vs. Bagumbaran, No. L-33261, September
30, 1967, 154 SCRA 396; Lebrilla vs. IAC, G.R.
No. 72633, December 18, 1989 180 SCRA 188.

^[16]
Paz Villagonzalo,
et al., vs. IAC, G.R. No. 71110, November 22, 1988, 167 SCRA 535.

^[17]
Salao vs. Salao, No. L-26699, March 16,
1976, 70 SCRA 65, 85.