An action for reconveyance based on an implied or constructive trust, arising from property acquired through fraud (such as a forged deed leading to the issuance of a Torrens title), prescribes in ten (10) years from the date of the issuance of the certificate of title, if the plaintiff is not in possession of the property.

The dispute originated from a parcel of land initially owned by Domingo Valientes under an Original Certificate of Title (OCT). In 1939, Valientes mortgaged the land to the spouses Belen. Later, the Belens allegedly used a forged "VENTA DEFINITIVA" to obtain a Transfer Certificate of Title (TCT No. T-5,427) in their names in 1969. Valientes' heirs attempted but failed to retrieve the property in the 1950s and filed an adverse claim in 1970. Upon the Belens' death, their heirs sold the property to respondent Vilma Minor, who currently possesses it. This led to conflicting legal actions initiated by both Minor (to cancel the adverse claim) and the Valientes heirs (to cancel the TCT and recover the property).

• Petitioners are heirs of Domingo Valientes, original owner of land in Zamboanga del Sur covered by OCT No. P-18,208.
• In 1939, Domingo Valientes mortgaged the property to spouses Leon Belen and Brigida Sescon.
• The Valientes family allegedly failed to redeem the property in the 1950s.
• The spouses Belen obtained TCT No. T-5,427 on December 22, 1969, allegedly through a forged document titled "VENTA DEFINITIVA."
• On February 28, 1970, Maria Valientes Bucoy and Vicente Valientes (children of Domingo) registered an Affidavit of Adverse Claim on TCT No. T-5,427.
• After the Belens died, their heirs executed an extra-judicial settlement and sold the property to respondent Vilma Valencia-Minor.
• On June 20, 1979, Minor filed SPL Case No. 1861 seeking cancellation of the adverse claim annotated on TCT No. T-5,427; the RTC granted this in 2000.
• On August 20, 1998, petitioners filed Civil Case No. 98-021 for Cancellation of TCT No. T-5,427, Reconveyance, Accounting, Receivership, and Damages against Minor and the RTC Judge.
• Petitioners are not in actual possession of the subject property; respondent Minor is the present possessor.

• The Court of Appeals committed grave abuse of discretion by dismissing the complaint based on prescription and laches because respondent Minor did not appeal the RTC's dismissal order (which was based solely on forum shopping) and therefore waived the defense of prescription.
• The petitioners' action, although captioned as cancellation of title and reconveyance, is substantially an action for quieting of title, which is imprescriptible.
• The applicable prescriptive period should be thirty (30) years under Article 1141 of the Civil Code (real actions), as the acquisition by Minor's predecessors involved bad faith (forgery), and the complaint was filed within this period (28 years and 8 months after TCT issuance).
• The cases relied upon by the Court of Appeals (Declaro, Tenio-Obsequio) are inapplicable as they did not involve forgery or fraud.
• The Court of Appeals prioritized technical rules (prescription) over rendering substantial justice to the parties who were allegedly victims of forgery.

• Respondent Minor initially moved to dismiss the complaint (Civil Case No. 98-021) before the RTC on grounds of forum shopping and litis pendentia, referencing SPL Case No. 1861.
• Although the RTC initially denied dismissal, it later granted reconsideration and dismissed the case based on forum shopping.
• Respondent Minor argued before the Court of Appeals (and implicitly before the Supreme Court) that the action was barred by prescription and laches, even if forum shopping was not the correct ground.

• Whether the Court of Appeals erred or committed grave abuse of discretion in dismissing the complaint motu proprio on the grounds of prescription and laches, despite these grounds not being the basis for the RTC's dismissal and respondent's failure to appeal said dismissal order.
• Whether petitioners' action for reconveyance is barred by prescription.
• Whether petitioners' action can be considered an imprescriptible action for quieting of title.

• The Court of Appeals did not commit grave abuse of discretion; courts are permitted under Section 1, Rule 9 of the Rules of Court to dismiss cases motu proprio based on prescription when apparent from the pleadings or evidence, even if not pleaded or assigned as error on appeal. Laches may also be considered by the court on its own initiative. Respondent Minor was not required to appeal the RTC's dismissal order which was already in her favor.
• The petitioners' action is barred by prescription. The action stems from an alleged fraudulent acquisition of title via a forged deed, creating an implied trust under Article 1456 of the Civil Code. An action for reconveyance based on such an implied trust prescribes ten (10) years from the issuance of the Torrens title (TCT No. T-5,427 issued on December 22, 1969). Filing the case on August 20, 1998, over 28 years later, is well beyond the prescriptive period.
• The action is not an imprescriptible action for quieting of title. The rule established in Heirs of Jose Olviga v. Court of Appeals—that an action for reconveyance, effectively an action to quiet title, does not prescribe if the plaintiff is in actual possession of the property—does not apply because the petitioners are admittedly not in possession of the subject property.
• The general 30-year prescriptive period for real actions under Article 1141 of the Civil Code does not apply; the specific rules under the Property Registration Decree (P.D. 1529) and jurisprudence on actions for reconveyance based on implied trust under the Torrens system prevail, establishing the 10-year period.
• Petitioners failed to demonstrate grave abuse of discretion amounting to lack or excess of jurisdiction by the Court of Appeals, which is required for a certiorari petition to succeed. Any potential error by the CA would be an error of judgment, not reviewable by certiorari. The petition was dismissed, and the CA decision was affirmed.

• Motu Proprio Dismissal based on Prescription (Rules of Court, Rule 9, Section 1): This rule allows courts to dismiss a claim motu proprio (on its own initiative) if it appears from the pleadings or evidence that the action is barred by prescription, even if this defense was not raised in a motion to dismiss or answer. The Court applied this to affirm the CA's authority to dismiss the case based on prescription, even though respondent did not appeal the RTC decision and prescription wasn't the RTC's dismissal ground.
• Laches: Defined as the failure or neglect, for an unreasonable and unexplained length of time, to do that which, by exercising due diligence, could or should have been done earlier, warranting a presumption that the party entitled to assert it either has abandoned it or acquiesced in the result. The Court held that laches, like prescription in this context, can be considered by the court motu proprio and found petitioners guilty of laches due to their inaction for over 28 years.
• Implied Trust (Civil Code, Article 1456): This principle states that if property is acquired through mistake or fraud, the person obtaining it is considered a trustee of an implied trust for the benefit of the person from whom the property comes. The Court categorized the petitioners' action, based on the alleged forged "VENTA DEFINITIVA," as one for enforcing an implied trust, leading to the application of the specific prescriptive period for such actions.
• Prescription of Action for Reconveyance Based on Implied Trust: An action for reconveyance based on an implied trust prescribes in ten (10) years from the issuance of the Torrens title over the property if the plaintiff is not in possession. The Court applied this 10-year period, starting from the 1969 TCT issuance, to find the 1998 complaint time-barred.
• Imprescriptibility of Action to Quiet Title/Reconveyance (Plaintiff in Possession): An action for reconveyance, when it effectively seeks to quiet title, is imprescriptible only if the plaintiff is in actual possession of the property. The Court explicitly distinguished the present case, stating this doctrine does not apply because petitioners were not in possession.
• Incontrovertibility of Torrens Title (P.D. 1529): While a decree of registration becomes incontrovertible after one year, this does not preclude an action for reconveyance based on implied trust filed beyond the one-year period, as such action respects the decree's finality but seeks the transfer of title to the rightful owner. However, this action for reconveyance itself is subject to prescription (10 years).
• Grave Abuse of Discretion (Rule 65, Certiorari): Defined as such capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction, or where the power is exercised in an arbitrary or despotic manner by reason of passion or hostility. The Court found that petitioners failed to show the CA acted with grave abuse of discretion, noting certiorari does not correct mere errors of fact or law.

• "Defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived. However, when it appears from the pleadings or the evidence on record that the court has no jurisdiction over the subject matter, that there is another action pending between the same parties for the same cause, or that the action is barred by a prior judgment or by statute of limitations, the court shall dismiss the claim." (Quoting Rule 9, Section 1, Rules of Court on motu proprio dismissal)
• "...an action for reconveyance of a parcel of land based on implied or constructive trust prescribes in ten years, the point of reference being the date of registration of the deed or the date of the issuance of the certificate of title over the property (...) But this rule applies only when the plaintiff is not in possession of the property, since if a person claiming to be the owner thereof is in actual possession of the property, the right to seek reconveyance, which in effect seeks to quiet title to the property, does not prescribe." (Citing Heirs of Jose Olviga v. Court of Appeals)
• "Art. 1456. 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." (Quoting Civil Code Art. 1456)
• "An action for reconveyance based on an implied or constructive trust must perforce prescribe in ten years from the issuance of the Torrens title over the property." (Citing Walstrom v. Mapa, Jr.)
• "...certiorari will not be issued to cure errors in proceedings or correct erroneous conclusions of law or fact. As long as a court acts within its jurisdiction, any alleged errors committed in the exercise of its jurisdiction will amount to nothing more than errors of judgment which are reviewable by timely appeal and not by a special civil action of certiorari."

• Heirs of Jose Olviga v. Court of Appeals (227 SCRA 330, 1993): Cited for the doctrine that an action for reconveyance based on implied trust prescribes in 10 years, unless the plaintiff is in possession, in which case the action (akin to quieting of title) is imprescriptible. Used here to establish the 10-year period as petitioners were not in possession.
• Declaro v. Court of Appeals (346 SCRA 57, 2000): Cited by the CA (and referenced by the SC) for the principle that an action for reconveyance based on wrongful registration prescribes in 10 years from title issuance, operating as constructive notice.
• Tenio-Obsequio v. Court of Appeals (230 SCRA 550, 1994): Cited by the CA (referenced by the SC) alongside Declaro, likely for the same 10-year prescriptive period for reconveyance. Petitioners argued it was inapplicable due to absence of fraud/forgery in that case.
• Walstrom v. Mapa, Jr. (181 SCRA 431, 1990): Cited to explain that an action for reconveyance respects the incontrovertibility of the Torrens title but seeks transfer to the rightful owner, and importantly, reiterates that such action based on implied trust prescribes in 10 years.
• Amerol v. Bagumbaran (154 SCRA 396, 1987): Cited within the Walstrom quote to support the principle that even with an irrevocable Torrens title, the registered owner can be compelled via reconveyance to transfer property held in trust for the real owner.
• Logronio v. Taleseo (370 Phil. 907, 1999) & Rumarate v. Hernandez (487 SCRA 317, 2006): Cited to support the ruling that laches need not be specifically pleaded and may be considered by the court on its own initiative.
• Heirs of Ramon Durano, Sr. v. Uy (344 SCRA 238, 2000): Cited by the CA to justify its review of matters (prescription/laches) not assigned as errors, if necessary for a just resolution.
• Po Lam v. Court of Appeals (347 SCRA 86, 2000): Cited by the CA to support the application of laches due to long inaction in asserting rights over disputed property.
• Commissioner of Internal Revenue v. Court of Appeals (327 Phil. 1, 1996): Cited for the definition of grave abuse of discretion and the principle that certiorari is not a remedy for errors of judgment.

• Rules of Court, Rule 9, Section 1: Cited regarding waiver of defenses and the court's authority to dismiss motu proprio on grounds like lack of jurisdiction, litis pendentia, res judicata, or prescription.
• Civil Code, Article 1456: Cited as the basis for the implied trust created when property is acquired through fraud (alleged forgery).
• Civil Code, Article 1141: Cited by petitioners (but rejected by the Court) as providing a 30-year prescriptive period for real actions over immovables.
• Civil Code, Article 1134: Cited by petitioners regarding ordinary prescription (10 years) for ownership through possession. Relevant context for Art. 1141.
• Civil Code, Article 1137: Cited by petitioners regarding extraordinary prescription (30 years) for ownership through uninterrupted adverse possession without need of title or good faith. Relevant context for Art. 1141.
• Presidential Decree No. 1529 (Property Registration Decree), Section 31: Referenced concerning the binding effect and quieting nature of a decree of registration.
• Presidential Decree No. 1529 (Property Registration Decree), Section 32: Referenced regarding the one-year period for review of the decree of registration due to fraud and the status of innocent purchasers for value, establishing the concept of incontrovertibility after one year but allowing actions for damages or reconveyance subject to prescription.