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Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 170318            January 15, 2009

JOSEPH REMENTIZO, Complainant,
vs.
HEIRS OF PELAGIA VDA. DE MADARIETA, Respondent.

D E C I S I O N

CARPIO, J.:

The Case

This petition for review¹ assails the 4 July 2005 Amended Decision² and 3 October 2005 Resolution ³ of the Court of Appeals in CA-G.R. SP No. 65286. The Court of Appeals set aside its 26 May 2004 Decision⁴ and by declaring void Emancipation Patent (EP) No. A-028390-H issued to petitioner Joseph Rementizo (Rementizo).

The Facts

The instant controversy stemmed from a Complaint for Annulment and Cancellation of Original Certificate of Title (OCT) No. EP-195 and EP No. A-028390-H filed by the late Pelagia Vda. De Madarieta (Madarieta) against Rementizo before the Department of Agrarian Reform Adjudication Board (DARAB) in Camiguin.

In her complaint, Madarieta claimed that she is the owner of a parcel of land declared in the name of her late husband Angel Madarieta (Angel), Lot No. 153-F with an area of 436 square meters situated in Tabulig, Poblacion, Mambajao, Camiguin. Madarieta alleged that Rementizo was a tenant of Roque Luspo (Luspo) and, as such, Rementizo was issued OCT No. EP-185 and OCT No. 174. Madarieta also alleged that the Department of Agrarian Reform (DAR) mistakenly included Lot No. 153-F as part of Luspo’s property covered by Operation Land Transfer. As a result, EP No. A-028390-H was issued to Rementizo. By virtue of such emancipation patent, OCT No. EP-195 was registered in Rementizo’s name. Madarieta further claimed that she had been deprived of her property without due process since she had not received any notice or information from the DAR relating to the transfer of ownership over the subject land to Rementizo.

In his answer, Rementizo claimed that he had been in possession of the subject land in the concept of an owner since 1987 and even constructed a house on the subject lot after the registration of the title. Rementizo denied that Lot No. 153-F is owned by Angel. Instead, the subject land was allegedly adjoining Lot No. 153 which is owned by Luspo. Rementizo further claimed that assuming Madarieta’s allegations were true, Angel did not object to his possession of the subject land during the latter’s lifetime considering that the subject land is just a few meters away from the Madarietas’ house. Further, Rementizo asserted that, in instituting the case, Madarieta was guilty of laches and that the action had already prescribed.

On 22 December 1998, the Provincial Adjudicator⁵ issued an Order declaring OCT No. EP-195 and EP No. A-028390-H null and void, and directing Rementizo or anyone in possession to vacate the subject property. The dispositive portion of this Order reads:

WHEREFORE, the Original Certificate of Title No. 195, EP No. A-028390-H issued in the name of the respondent is hereby ordered cancelled and/or revoked for being null and void ab initio, and the respondent or anybody in possession or occupation of subject land is hereby ordered to turn over subject land to the plaintiff and vacate the premises.

SO ORDERED.⁶

Rementizo appealed the Provincial Adjudicator’s order to the DARAB-Central Office. On 7 February 2001, the DARAB-Central Office reversed the Provincial Adjudicator’s order by ruling in favor of Rementizo, thus:

x x x After careful considerations, we find the appeal impressed with merit.

The records show that the subject land was placed under Operation Land Transfer, pursuant to P.D. No. 27. It must be pointed out that the coverage was made during the lifetime of Angel Madarieta who is the alleged declared owner of the land in question. There is no showing that the late Angel objected to the coverage. Consequently, OCT No. 195 was generated in favor of Respondent-Appellant who took possession thereof and even built his house thereon. All this while there was no objection to said occupation. Considering that the occupation is manifest, that the landholding of said Angel is proximate thereto, there can be no question that the occupancy of Respondent was known to the late Angel Madarieta, under whose alleged rights over said landholding, herein Petitioner-Appellee anchors her claim. Angel Madarieta failed to object to Respondent-Appellant’s possession and occupation of the subject premises for a period of eleven (11) years; said inaction of alleged declared owner of the subject land only shows that Respondent’s occupancy thereof was legitimate, and that the late Angel had no rights or claims thereon. Under the circumstances, the surviving wife’s claim now of rights over said land on alleged non-notice of DAR coverage is untenable.

Moreover, an action to invalidate a Certificate of Title on the ground of fraud prescribes after one (1) year from the entry of the decree of registration. (Bishop vs. Court of Appeals, 208 SCRA 637). In this case, Petitioners (sic) inaction for more than eleven (11) years is inexcusable (Comero vs. Court of Appeals, 247 SCRA 291).

WHEREFORE, premises considered, the appealed decision is SET ASIDE. A new judgment is rendered.

1. Upholding the validity of Original Certificate of Title (CTC) No. 195, E.P. No. A-028390-H issued in favor of Respondent-Appellant Joseph Rementizo;

2. Nullifying the Order dated February 15, 1999, and Ordering the Plaintiff and all persons acting in her behalf to respect and maintain Respondent Rementizo's peaceful occupation of the land in question; and

3. Reinstating Respondent-Appellant over the subject land, if already ejected.

SO ORDERED.⁷

Madarieta filed a petition for review with the Court of Appeals under Rule 43 of the Rules of Court assailing the decision of the DARAB. Madarieta raised the following errors in the Court of Appeals:

1. The DARAB erred in holding that she had already learned of Rementizo’s occupation and possession of the subject property for the last 11 years prior to the filing of the case, when EP No. A-028390-H was registered and the OCT was issued in 1987; and

2. The DARAB erred in holding that she committed “negligence” for failing to file the instant case within the prescriptive period.

Madarieta argued that she never knew that the subject land was part of her husband’s estate. Madarieta averred that it was only on 21 November 1997, through a relocation survey, that she discovered that the land where Rementizo constructed his house was part of her husband’s property. This discovery prompted Madarieta to file a complaint with the DARAB on 5 November 1998, or within 11 months and 14 days reckoned from such knowledge.

The Court of Appeals' Ruling

In its Decision of 26 May 2004, the Court of Appeals held that when Madarieta filed an action on 5 November 1998, for the annulment and cancellation of Rementizo’s title, more than 10 years had passed after the issuance of Rementizo’s title rendering the title incontrovertible.

Madarieta sought reconsideration of the 26 May 2004 Decision, which the Court of Appeals partially granted in its Amended Decision of 4 July 2005. The Court of Appeals set aside its earlier decision of 26 May 2004.

In its Amended Decision, the appellate court applied the exception to the rule that an action for reconveyance of a fraudulently registered real property prescribes in 10 years. Citing Bustarga v. Navo II,⁸ the appellate court held that Lot No. 153-F was erroneously awarded to Rementizo. The entire Lot No. 153 was indeed covered by the Operation Land Transfer. Hence, Lot No. 153 was subdivided into: (1) Lot No. 153-B, declared in the name of Alberto Estanilla; (2) Lot No. 153-C, declared in the name of Eusebio Arce; (3) Lot No. 153-D, declared in the name of Feliciano Tadlip; and (4) Lot Nos. 153-E and F, retained and declared in the name of Angel. Nowhere in the records is it shown that Rementizo was a beneficiary or tenant of Lot No. 153-F.

The Court of Appeals granted the petition insofar as the cancellation of EP No. A-028390-H was concerned. The appellate court opined that Madarieta still has to file the appropriate action in the Regional Trial Court, which has original jurisdiction in actions after original registration, to have the subject OCT reconveyed by virtue of the issuance of a void emancipation patent.

The Court of Appeals disposed of the instant case, as follows:

WHEREFORE, the instant motion for reconsideration is PARTIALLY GRANTED. The Decision of this Court promulgated on May 26,2004 is SET ASIDE. In lieu thereof, the herein discussion is adopted and a new judgment is entered, as follows

WHEREFORE, the petition for review is GRANTED. The decision of the DARAB dated February 7, 2001 is REVERSED and SET ASIDE. Further, Emancipation Patent (EP) No. A-028390-H, covering Lot No. 153-F, issued to the private respondent, is declared NULL and VOID.

SO ORDERED.⁹

The Issue

The crucial issue in this case is whether the action for the annulment of the emancipation patent, which ultimately seeks the reconveyance of the title issued to Rementizo, has already prescribed.

The Ruling of the Court

The petition is meritorious.

In the present case, the DAR, which is presumed to have regularly performed its official function, awarded EP No. A-028390-H to Rementizo in 1987. Aside from this emancipation patent, two other emancipation patents and certificates of title (OCT Nos. 183 and 174) were issued to Rementizo covering two different parcels of land. This means that Rementizo was a qualified beneficiary of various parcels of agricultural land placed under the government’s Operation Land Transfer.

The Court notes that Madarieta was claiming the subject property as the surviving spouse of Angel. While Madarieta presented evidence pointing out that Lot No. 153-F was historically owned and declared in the name of her deceased husband, Angel, there is nothing in the records showing that Angel during his lifetime opposed Rementizo’s occupation and possession of the subject land. Madarieta and respondents started claiming the property after the death of Angel. Considering that the subject property was proximate to the Madarietas’ residence, Angel could have questioned the legality of Rementizo’s occupation over the land.

There is no dispute that Rementizo possessed the subject land in the concept of an owner since the issuance of EP No. A-028390-H and the registration of OCT No. EP-195 in 1987, when Angel was still alive. Rementizo even constructed a house on the subject property immediately thereafter. No objection was interposed by Angel against Rementizo’s possession of the subject land. With Angel’s unexplained silence or acquiescence, it may be concluded that Angel recognized the legitimacy of Rementizo’s rights over the land. Otherwise, Angel could have challenged Rementizo’s occupation of the subject property.

There is no allegation or proof that there was fraud in the issuance of EP No. A-028390-H and OCT No. EP-195. Madarieta did not adduce any evidence showing the existence of fraud in the issuance of the subject emancipation patent and title. In fact, Madarieta faulted the DAR in including the subject land in the Operation Land Transfer and termed DAR’s alleged unlawful taking of the subject property as “landgrabbing.” In her Memorandum before the DARAB, Madarieta stated that:

Unfortunately for petitioner (Madarieta), sometime about 1988, DAR people of Camiguin Province identified respondent as tenant of Roque Luspo and Lourdes Luspo Neri and made him qualified beneficiary of the said landowner in the implementation of P.D. 27, and awarded to respondent not only the farm of the said landowner but also the subject land exclusively belonging to petitioner x x x.

That by virtue thereof, said respondent was issued OCT No. EP 195.

x x x

Respondent cannot be considered possessor in good faith. He has no hand in the acquisition of the property. He was merely a recipient being a qualified beneficiary. It was the government thru the instrumentality of a law P.D. 27 that acquired the land thru the Ministry of Agrarian Reform.¹⁰ (Emphasis supplied)

Thus, Madarieta miserably failed to show that Rementizo employed fraud in the awarding of EP No. A-028390-H in his favor. Fraud is a question of fact which must be alleged and proved. Fraud cannot be presumed and must be proven by clear and convincing evidence.¹¹ In this case, there was no such evidence showing actual fraud on the part of Rementizo.

Madarieta’s evidence at the most tends to show that the DAR committed a mistake in issuing EP No. A-028390-H in favor of Rementizo, who was admittedly a tenant of Luspo and not of Angel. While the entire Lot No. 153 was indeed covered by the Operation Land Transfer, Madarieta presented the Real Property Historical Ownership which was issued by the Office of the Provincial Assessor,[¹² stating that Lot Nos. 153-E and F were retained and declared in the name of Angel.

Considering that there appears to be a mistake in the issuance of the subject emancipation patent, then the registration of the title to the subject property in Rementizo’s name is likewise erroneous. In such a case, the law prescribes a specific remedy reserved to the rightful owner of the erroneously registered property, that is, an action for reconveyance.

In an action for reconveyance, the decree of registration is respected as incontrovertible but what is sought instead is the transfer of the property wrongfully or erroneously registered in another’s name to its rightful owner or to one with a better right. The person in whose name the land is registered holds it as a mere trustee.¹³

Nevertheless, the right to seek reconveyance of registered property is not absolute because it is subject to extinctive prescription.¹⁴ In Caro v. Court of Appeals,¹⁵the prescriptive period of an action for reconveyance was explained:

[U]nder the present Civil Code, we find that just as an implied or constructive trust is an offspring of the law (Art. 1456, Civil Code), so is the corresponding obligation to reconvey the property and the title thereto in favor of the true owner. In this context, and vis-à-vis prescription, Article 1144 of the Civil Code is applicable.

Article 1144. The following actions must be brought within ten years from the time the right of action accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law;

(3) Upon a judgment. (Emphasis supplied)

The 10-year prescriptive period is reckoned from the date of issuance of the certificate of title.

There is but one instance when prescription cannot be invoked in an action for reconveyance, that is, when the plaintiff or complainant (Madarieta or respondents in this case) is in possession of the land to be reconveyed,¹⁶ and the registered owner was never in possession of the disputed property. In such a case, the Court has allowed the action for reconveyance to prosper despite the lapse of more than 10 years from the issuance of the title to the land.¹⁷

In the instant case, however, it is the rule rather than the exception which should apply.

To repeat, an action for reconveyance based on an implied or constructive trust prescribes in 10 years from the issuance of the Torrens title over the property, which operates as a constructive notice to the whole world.¹⁸ The title over the subject land was registered in Rementizo’s name in 1987 while Madarieta filed the complaint to recover the subject lot only in 1998. More than 11 years had lapsed before Madarieta instituted the action for annulment of EP No. A-028390-H, which in essence is an action for reconveyance. Therefore, the complaint was clearly barred by prescription.

Madarieta’s discovery in 1997, through a relocation survey, of the ownership of the subject land can not be considered as the reckoning point for the computation of the prescriptive period. EP No. A-028390-H, by virtue of which OCT No. EP-195 was registered, was issued in 1987, when Angel who is the declared landowner was still alive.

In GSIS v. Santiago,¹⁹ Samonte v. Court of Appeals,²⁰ and Adille v. Court of Appeals,²¹ this Court used as starting point the date of the actual discovery of the fraud, instead of the date of the issuance of the certificate of title. In those cases, however, there were evident bad faith, misrepresentations, and fraudulent machinations employed by the registered owners in securing titles over the disputed lots.

In this case, there is no evidence adduced by Madarieta or respondents that Rementizo employed fraud in the issuance of EP No. A-028390-H and OCT No. EP-195. Madarieta did not even present any evidence that her late husband objected to Rementizo’s occupation over the subject land after the issuance of EP No. A-028390-H and OCT No. EP-195. The absence of fraud in the present case distinguishes it from the cases of GSIS,²² Samonte,²³ and Adille.²⁴ The reckoning point, therefore, for the computation of the 10-year prescriptive period is the date of the issuance of EP No. A-028390-H and registration of OCT No. EP-195 in the name of Rementizo.

WHEREFORE, we GRANT the petition. We SET ASIDE the 4 July 2005 Amended Decision and 3 October 2005 Resolution of the Court of Appeals in CA-G.R. SP No. 65286. We DISMISS the Complaint for Annulment and Cancellation of Original Certificate of Title No. EP-195 and Emancipation Patent No. A-028390-H on the ground of prescription. Costs against respondents.

SO ORDERED.

ANTONIO T. CARPIO
Associate Justice

WE CONCUR:.

REYNATO S. PUNO
Chief Justice
Chairperson

RENATO C. CORONA Associate Justice

ADOLFO S. AZCUNA Associate Justice

TERESITA J. LEONARDO-DE CASTRO
Associate Justice

C E R T I F I C A T I O N

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.

REYNATO S. PUNO
Chief Justice

Footnotes

¹ Under Rule 45 of the Rules of Court.

² Rollo, pp. 47-56. Penned by Associate Justice Hakim S. Abdulwahid with Associate Justices            Eugenio S. Labitoria and Jose L. Sabio, Jr. concurring.

³ Id. at 36. Penned by Associate Justice Hakim S. Abdulwahid with Associate Justices Eugenio           S. Labitoria and Jose L. Sabio, Jr. concurring.

⁴ Id. at 83-87.

⁵ Atty. Fidel H. Borres, Jr.

⁶ DARAB Records, p. 25.

⁷ Rollo, pp. 140-143. Penned by Assistant Secretary Lorenzo R. Reyes with Undersecretary Federico A. Poblete, Assistant Secretaries Augusto P. Quijano, Edwin C. Sales, and Wilfredo M. Penaflor concurring. Secretary Horacio R. Morales, Jr. and Undersecretary Conrado S. Navarro did not take part.

⁸ 214 Phil. 86 (1984). This case quoted this Court’s ruling in Vital v. Anore, 90 Phil. 855 (1952).

⁹ Rollo, p. 56.

¹⁰ DARAB Records, pp. 81, 83.

¹¹ Quitoriano v. Department of Agrarian Reform Adjudication Board, G.R. No. 171184, 4 March 2008, 547 SCRA 617.

¹² Annex C of the Complaint, DARAB Records.

¹³ Pasiño v. Monterroyo, G.R. No. 159494, 31 July 2008, citing Mendizabel v. Apao, G.R. No. 143185, 20 February 2006, 482 SCRA 587.

¹⁴ Article 1106 of the Civil Code expressly provides that by prescription, one acquires ownership and other real rights through the lapse of time in the manner and under the conditions laid down by law. In the same way, rights and actions are lost by prescription. (Emphasis supplied)

¹⁵ G.R. No. 76148, 20 December 1989, 180 SCRA 401, 406-407, citing Amerol v. Bagumbaran, No. L-33261, 30 September 1987, 154 SCRA 396.

¹⁶ Heirs of Pomposa Saludares v. Court of Appeals, 464 Phil. 958, 966-968 (2004).

¹⁷ Id., citing Rodriguez v. Director of Lands, 31 Phil. 272 (1915); Zarate v. Director of Lands, 34 Phil. 416 (1916); Amerol v. Bagumbaran, No. L-33261, 30 September 1987, 154 SCRA 396; Caro v. Court of Appeals, G.R. No. 76148, 20 December 1989, 180 SCRA 401.

¹⁸ Vagilidad v. Vagilidad, Jr., G.R. No. 161136, 16 November 2006, 507 SCRA 94; Rodrigo v. Ancilla, G.R. No. 139897, 26 June 2006, 492 SCRA 514.

¹⁹ 460 Phil. 763 (2003).

²⁰ 413 Phil. 487 (2001).

²¹ 241 Phil. 487 (1988).

²² Supra.

²³ Supra.

²⁴ Supra.

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