Alzona vs. Capunitan

An action for reconveyance of registered land founded on an implied or constructive trust prescribes in ten years from the time the trustee repudiates the trust. The shield of imprescriptibility under Section 46 of the Land Registration Act is available solely to the registered owner and cannot be invoked by a claimant who is not the registered owner.

Lot 2968 (residential) and Lot 2524 (rice land) were part of the friar lands. Spouses Arcadio Alomia and Ildefonsa Almeda acquired them during their marriage. Arcadio purchased Lot 2968 in 1915 and obtained a patent title. He began purchasing Lot 2524 by installment but died in 1924 before completing payment. Ildefonsa, claiming in an affidavit that she was Arcadio’s sole heir, had the contract assigned to her; upon final payment in 1925, she obtained a conveyance and certificate of title in her name alone. Arcadio was survived by siblings whose children — plaintiffs Cornelio Alzona and Gregorio Alomia — were therefore his nephews and entitled to inherit one‑half of the conjugal property. Ildefonsa died in 1929, and the disputed lots had already been sold by her in 1928 to defendant Gregoria Capunitan, her niece, and Gregoria’s husband Manuel Reyes, who knew the lots were conjugal. Plaintiffs sought to recover their hereditary share and cancel the certificates of title in defendants’ names.

• The Properties and the Trust: Lots 2968 and 2524 were conjugal assets of spouses Arcadio Alomia and Ildefonsa Almeda. Upon Arcadio’s death in 1924, one‑half passed to Ildefonsa as her share, while the other half devolved to Arcadio’s nephews and nieces — plaintiffs Cornelio Alzona and Gregorio Alomia, children of Arcadio’s predeceased siblings. Ildefonsa, by falsely declaring herself Arcadio’s sole heir, obtained the transfer of the contract for Lot 2524 to her name and a certificate of title. She thus acquired full legal title over the entire parcel, but the Court of Appeals declared she held the plaintiffs’ undivided one‑half share in trust.

• The 1928 Sale and Issuance of New Titles: In 1928, Ildefonsa sold the two lots to her niece, defendant Gregoria Capunitan, and the latter’s husband, defendant Manuel Reyes. The purchasers were aware that the properties were conjugal. New certificates of title were issued in defendants’ names in the same year. Ildefonsa died in 1929.

• Prior Litigation: Plaintiffs filed a first suit for recovery (Civil Case No. 5340) on July 24, 1929. That case was dismissed on December 16, 1930, after the court denied a sixth postponement and the parties and counsel failed to appear. A second action (Civil Case No. 5657) was commenced on January 15, 1931, seeking recovery of the two lots plus damages. The case was repeatedly postponed, and the court eventually ordered the commencement of proceedings to settle the estate of Marciana Almeda so that an administrator could be substituted. On August 31, 1936, the case was dismissed for failure to comply with that order.

• Findings on Remand: On the new trial ordered by the Court of Appeals, the trial court found that the dismissals of the two prior cases were not due to an amicable settlement or any recognition by defendants of plaintiffs’ rights. There was no evidence that defendants promised to reconvey one‑half of the property. The alleged filing of a third suit in 1938 was not proven — no action was commenced in that year. The trial court concluded the cause of action had prescribed.

• Imprescriptibility Under the Torrens System: Plaintiffs argued that the property was registered under the Torrens system and that the Court of Appeals had already found they inherited an undivided one‑half share. Therefore, their right and interest were imprescriptible under Section 46 of the Land Registration Act, and the trial court gravely erred in dismissing the complaint on the ground of prescription.

• Implied Trust and Non‑Prescription: Plaintiffs maintained that because Ildefonsa held their half‑share in trust and defendants purchased with full knowledge of the property’s conjugal nature, the defendants were mere trustees. As beneficiaries under an implied trust, their action did not prescribe.

• Prescription of Action: Defendants contended that the action for reconveyance had prescribed. The cause of action accrued in 1928 when they purchased and took possession of the lots, and the ten‑year period under the Code of Civil Procedure had long expired by the time the complaint was filed in 1949 or 1950. The prior suits showed consistent repudiation of any trust.

• Inapplicability of Imprescriptibility to Plaintiffs: Defendants argued that the imprescriptibility of registered land under Section 46 protects only the registered owner. Since the titles stood in their names since 1928, plaintiffs — who were not registered owners — could not invoke that protection.

• Imprescriptibility under Torrens System: Whether the action for recovery of registered land based on an implied trust is imprescriptible under Section 46 of the Land Registration Act.

• Prescription of Action for Recoverance: Whether an action for reconveyance grounded on an implied or constructive trust prescribes, and if so, whether the action filed in 1949/1950 was already barred.

• Imprescriptibility under Torrens System: The protection of Section 46 of the Land Registration Act — “no title to registered land in derogation to that of the registered owner shall be acquired by prescription or adverse possession” — is available only to the registered owner. Plaintiffs were not the registered owners; the certificates of title had been in defendants’ names since 1928. Consequently, plaintiffs could not invoke imprescriptibility to support their claim. The facts of Eugenio vs. Perdido and Guinoo vs. Court of Appeals, where plaintiffs were the children of deceased registered owners and were treated as a continuation of the decedents’ personality, were distinguished because the lots here were never registered in the names of plaintiffs’ parents but in the names of Arcadio and Ildefonsa, and later defendants.

• Prescription of Action for Recoverance: An action for reconveyance based on an implied or constructive trust is settled to prescribe in ten years, as held in Bonaga vs. Soler and J.M. Tuason & Co., Inc. vs. Magdangal. The cause of action accrued in 1928 when defendants purchased the lots and took possession, effectively repudiating the trust. The filing of suits in 1929 and 1931 further demonstrated repudiation. The sale was not a void or inexistent contract; it was at most voidable and subject to the ordinary prescriptive period. The present action, filed on either November 28, 1949, or January 28, 1950, fell more than ten years after 1928 — and even after the dismissal of the second case in 1936. Moreover, defendants, as third persons who had repudiated the trust and asserted ownership since 1928, could also have acquired the property by prescription. The trial court’s findings on remand — that there was no acknowledgment of plaintiffs’ title or promise of reconveyance and that no third suit was filed in 1938 — bound the parties on those factual questions. Accordingly, the action had prescribed.

• Prescription of Action for Recoverance Based on Implied Trust — An action to enforce a constructive or implied trust and recover property held in trust prescribes in ten years from the time the trustee repudiates the trust. Repudiation may be shown by the trustee’s acquisition of title and possession under claim of ownership, or by the beneficiaries’ prior suits seeking recovery. Once the ten‑year period lapses, the equitable remedy of reconveyance is barred.

• Beneficiary of Imprescriptibility Under Section 46, Land Registration Act — The rule that no title to registered land in derogation of the registered owner shall be acquired by prescription or adverse possession redounds solely to the benefit of the registered owner. A claimant who is not the registered owner cannot invoke the provision to defeat a defense of prescription; the claimant’s action for reconveyance remains subject to extinctive prescription.

• “It is true ‘that no title to registered land in derogation to that of the registered owner shall be acquired by prescription or adverse possession’ (Sec. 46 of the Land Registration Act), but … the protection given by the law is in favor only of registered owners and consequently, the plaintiffs cannot invoke it in support of their cause of action as they are not the registered owners of the property in litigation.” — Clarifies that imprescriptibility under the Torrens system is a shield for the title holder, not a sword for a claimant.

• “The prescriptibility of an action for reconveyance based on implied or constructive trust, is now a settled question in this jurisdiction. It prescribes in ten (10) years.” — Articulates the controlling rule and explains why the remedy was time‑barred.

• “The cause of action of the plaintiffs against the defendants accrued in 1928 when the latter purchased and took possession of the two lots from Ildefonsa Almeda.” — Fixes the moment of accrual and the commencement of the prescriptive period.

• Bonaga vs. Soler, G.R. No. L‑15717, June 30, 1961, and J.M. Tuason & Co., Inc. vs. Magdangal, G.R. No. L‑15539, January 30, 1962 — Cited as controlling authority that an action for reconveyance premised on an implied trust prescribes in ten years.

• Eugenio, et al. vs. Perdido, et al., G.R. L‑7083, May 19, 1955, and Guinoo vs. CA, et al., G.R. No. L‑5541, June 25, 1955 — Distinguished; in those cases the plaintiffs were the children of deceased registered owners, treated as a continuation of the decedent’s personality, unlike here where the titles were never in plaintiffs’ parents’ names.

• Tolentino vs. Vitug, 39 Phil. 126, and Government of the Philippines vs. Abadilla, 46 Phil. 642 — Cited for the proposition that third persons who repudiated the trust and asserted ownership over the litigated property also acquired it by prescription.

• Section 46, Land Registration Act (Act No. 496) — “No title to registered land in derogation to that of the registered owner shall be acquired by prescription or adverse possession.” Applied to limit its protection to the registered owners (defendants), not to plaintiffs.

• Section 40, Act No. 190 (Code of Civil Procedure) — Ten‑year prescriptive period for actions to recover title to and possession of real property. Used to measure the extinctive period that barred plaintiffs’ complaint.

• Article 1450, New Civil Code — Mentioned in distinguishing between void/inexistent contracts (action imprescriptible) and voidable contracts (valid until revoked within the prescriptive period); the sale was deemed at most voidable.

Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Barrera, Dizon, and De Leon, JJ., concurred.