Heirs of Jose Olviga vs. Court of Appeals

An action for reconveyance of land filed by a party in actual possession of the property is in the nature of an action to quiet title and does not prescribe; where the plaintiff is not in possession, the action based on implied or constructive trust prescribes in ten years counted from the date of registration or issuance of the certificate of title, but where the plaintiff is in possession, the prescriptive period runs only from the time the possessor becomes aware of the adverse claim.

The dispute involves Lot 13, Pls-84 of the Guinayangan Public Land Subdivision in Quezon, a parcel of land measuring approximately 54,406 square meters that was forest land until 1950. Eutiquio Pureza and his father first cleared and cultivated the land, and Pureza later transferred his rights therein to Cornelio Glor, Sr., whose heirs (private respondents) filed the action for reconveyance against the heirs of Jose Olviga (petitioners), who had obtained a registered title over the same lot through cadastral proceedings. The case concerns the interplay between the Torrens system of registration, the prescriptive periods governing actions for reconveyance based on implied or constructive trust, and the doctrine that actions to quiet title by a possessor in actual possession are imprescriptible.

In 1950, the land in question — Lot 13, Pls-84 of the Guinayangan Public Land Subdivision, measuring approximately 54,406 square meters — was still forest land when Eutiquio Pureza, then only twelve years old, and his father cleared and cultivated it. By 1954, they had introduced improvements including coconut trees, jackfruit, mangoes, avocado, and bananas. When the area was released for disposition, the Bureau of Lands surveyed it in 1956 in the name of Eutiquio Pureza, and the property came to be known as Lot 13. Godofredo Olviga, a son of Jose Olviga then living with his father, protested the survey but only with respect to a one-half-hectare portion described as "sa dakong panuluran ng Amihanan-Silanganan." In his protest, which was of public record in the Bureau of Lands, Godofredo expressly admitted that the lot belonged to Eutiquio Pureza, except for the half-hectare portion he himself claimed.

In 1960, Eutiquio Pureza filed a homestead application over Lot 13. Before the application could be acted upon, he transferred his rights in the lot to Cornelio Glor in 1961. Neither the homestead application nor the proposed transfer was acted upon by the Director of Lands for reasons the records do not disclose. Meanwhile, Cornelio Glor, Sr. and his family — including his wife Angelita Glor — became the real and actual occupants of the land.

In 1967, Jose Olviga obtained a registered title over Lot 13 through cadastral proceedings, in fraud of the rights of Pureza and his transferee, Cornelio Glor and his family. As the Court of Appeals found, Cornelio Glor, Sr. was sickly and his wife Angelita was unschooled, and they failed to follow up Pureza's homestead application in the cadastral proceedings held in the Municipal Court of Guinayangan. They were not aware of the proceedings. Angelita Glor testified that no notice was ever posted on Lot 13 about the proceedings, nor did the barangay captain inform her, and she received no notice from the court sheriff or any court employee. Petitioner Virgilio Olviga himself confirmed the non-posting, testifying that he did not notice any papers posted on the property. Jose Olviga, for his part, claimed both adjoining Lots 12 and 13 in the same cadastral proceedings and falsely omitted in his answer any mention that other persons were in possession of, and claiming an adverse interest in, Lot 13, or that the land had been surveyed for Eutiquio Pureza, who had sold his interests to Cornelio Glor in 1961. As a result, both lots were declared uncontested in the name of Jose Olviga, and Original Certificate of Title No. 0-12713 was issued to him in 1967.

In 1971, Olviga requested that the OCT be split into two Transfer Certificates of Title — TCT No. T-103823 for Lot 12 and TCT No. T-103824 for Lot 13. Jose Olviga later transferred Lot 13 to his son-in-law Jaime Olila and daughter Lolita Olviga, resulting in the issuance of TCT No. 241314 in the spouses' names. The spouses Olila, however, were found not to be innocent purchasers for value and had never been in possession of the land. The Glors and their predecessors-in-interest remained the ones in actual possession. It was only sometime in 1988 that the Glors learned of the title issued in the name of Jose Olviga. On April 10, 1989, Angelita Glor and her children filed Civil Case No. C-883 for reconveyance in the Regional Trial Court of Calauag, Quezon. The trial court ruled in favor of the Glors, and the Court of Appeals affirmed in toto, finding that the action had not prescribed because the cause of action accrued in 1988, not 1967.

• Prescription: Petitioners alleged that the present action had already prescribed.
• Accrual of Cause of Action: Petitioners argued that the Court of Appeals erred when it ruled that the private respondents' cause of action accrued not in 1967 but in 1988.
• Capacity to Sue as Homestead Transferees: Petitioners contended that the Court of Appeals erred when it failed to consider that private respondents, as mere homestead transferees, cannot maintain an action for reconveyance.
• Applicability of Precedents: Petitioners asserted that the Faja and Caragay-Layno cases have no bearing and direct application to the case at bar.
• Insufficient Evidence: Petitioners maintained that private respondents had not proven by preponderance of evidence their ownership and possession of the disputed land.

• Prescription of Reconveyance Action: Whether the action for reconveyance filed on April 10, 1989 has already prescribed.
• Accrual of Cause of Action: Whether the cause of action accrued in 1967, when Jose Olviga's title was registered, or in 1988, when the respondents learned of such title.
• Capacity of Homestead Transferees: Whether private respondents, as homestead transferees, can maintain an action for reconveyance.
• Ownership and Possession: Whether private respondents have proven by preponderance of evidence their ownership and possession of the disputed land.

• Prescription of Reconveyance Action: No. The action has not prescribed. Where the plaintiff is in actual possession of the property, the action for reconveyance is in effect an action to quiet title, which is imprescriptible. Alternatively, even under the ten-year prescriptive period for implied trust, the action filed on April 10, 1989 was timely.
• Accrual of Cause of Action: The cause of action accrued in 1988, when respondents learned of the title fraudulently obtained by Jose Olviga. Because respondents were in actual possession since 1950, their undisturbed possession gave them a continuing right to vindicate their title, and the prescriptive period commenced only when their possession was disturbed or they became aware of the adverse claim in 1988.
• Capacity of Homestead Transferees: This issue was not separately resolved, as it was treated as factual in nature and subsumed under the Court's finding that the lower courts' factual findings were supported by substantial evidence.
• Ownership and Possession: Yes. The trial court and Court of Appeals correctly found, based on the testimonies of the parties and their witnesses, that respondents and their predecessors-in-interest had been in actual possession since 1950 and that petitioners' title was fraudulently obtained. These findings are supported by substantial evidence and are beyond review in a petition confined to questions of law.

• Prescription of Reconveyance Action: The Court reaffirmed the established rule that an action for reconveyance based on implied or constructive trust prescribes in ten years, reckoned from the date of registration or issuance of the certificate of title. However, this rule applies only when the plaintiff is not in possession of the property. When the person claiming ownership is in actual possession, the right to seek reconveyance — which in effect seeks to quiet title — does not prescribe. Citing Sapto vs. Fabiana and Faja vs. Court of Appeals, the Court explained that one in actual possession claiming ownership may wait until his possession is disturbed or his title is attacked before vindicating his right, because undisturbed possession gives a continuing right to seek the aid of a court of equity. In the case at bar, private respondents and their predecessors-in-interest had been in actual possession since 1950, and their possession was disturbed only in 1988 when they became aware of the adverse title. The action filed on April 10, 1989 was therefore well within any applicable prescriptive period.

• Accrual of Cause of Action: The Court of Appeals correctly held that the cause of action accrued not in 1967, when Jose Olviga's title was registered, but in 1988, when respondents learned of the title. The rationale is rooted in equity: a possessor in actual occupation who is unaware of a fraudulent registration cannot be expected to sue to vindicate a right he does not yet know is threatened. The prescriptive period begins to run only from the moment the possessor is made aware of a claim adverse to his own. Since respondents discovered the title in 1988 and filed suit less than a year later, the action was timely under either theory — imprescriptibility as a quieting-of-title action or the ten-year period for implied trust counted from discovery.

• Capacity of Homestead Transferees: The Court did not separately address this issue on the merits, noting that the other issues raised in the petition were factual. The Court confined its jurisdiction to questions of law, finding no exception warranting re-examination of the factual findings.

• Ownership and Possession: The Court declined to disturb the factual findings of the trial court as affirmed by the Court of Appeals, holding that those conclusions were based on substantial evidence drawn from the testimonies of the parties and their witnesses. Reiterating established doctrine, the Court noted that in petitions for review of Court of Appeals decisions, its jurisdiction is confined to questions of law, except where factual findings are unsupported by the records or are so glaringly erroneous as to constitute grave abuse of discretion. The case at bar did not fall under those exceptions.

• Imprescriptibility of Action to Quiet Title by a Possessor in Actual Possession — An action for reconveyance filed by one who is in actual possession of the property claiming ownership is in the nature of an action to quiet title and does not prescribe. The possessor's undisturbed possession gives him a continuing right to seek the aid of a court of equity to determine the nature of an adverse claim and its effect on his title. The right to quiet title, seek reconveyance, and annul any certificate of title accrues only from the time the possessor is made aware of a claim adverse to his own, and only then does the statutory period of prescription commence to run. This doctrine was applied through Sapto vs. Fabiana and Faja vs. Court of Appeals.

• Ten-Year Prescriptive Period for Reconveyance Based on Implied or Constructive Trust — An action for reconveyance 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 issuance of the certificate of title over the property. This rule, however, applies only when the plaintiff is not in possession of the property. Where the plaintiff is in actual possession, the action is imprescriptible as it is in effect an action to quiet title. The Court applied this rule from Vda. de Portugal vs. IAC.

• Limitation of Supreme Court Jurisdiction in Petitions for Review — In petitions for review of decisions of the Court of Appeals, the Supreme Court's jurisdiction is confined to questions of law, except when the findings of fact are not supported by the records or are so glaringly erroneous as to constitute serious abuse of discretion. Factual findings of the trial court, as affirmed by the Court of Appeals and supported by substantial evidence, are binding and will not be disturbed.

• "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." — This passage articulates the controlling distinction between prescriptible and imprescriptible reconveyance actions, turning on whether the plaintiff is in actual possession.

• "No better situation can be conceived at the moment for Us to apply this rule on equity than that of herein petitioners whose mother, Felipa Faja, was in possession of the litigated property for no less than 30 years and was suddenly confronted with a claim that the land she had been occupying and cultivating all these years, was titled in the name of a third person." — Quoted from Faja vs. Court of Appeals, this passage illustrates the equitable rationale for the imprescriptibility rule and was relied upon to support the ruling that the Glors' action was timely.

• "In petitions for review of decisions of the Court of Appeals, the jurisdiction of this Court is confined to a review of questions of law, except when the findings of fact are not supported by the records or are so glaringly erroneous as to constitute a serious abuse of discretion." — This defines the scope of the Supreme Court's appellate jurisdiction in petitions for review from the Court of Appeals and explains why the factual issues raised by petitioners were not entertained.

• Vda. de Portugal vs. IAC, 159 SCRA 178 — Cited for the rule that an action for reconveyance based on implied or constructive trust prescribes in ten years, reckoned from the date of registration or issuance of the certificate of title. The Court applied this rule but limited its applicability to situations where the plaintiff is not in possession.
• Sapto vs. Fabiana, 103 Phil. 683 — Cited for the doctrine that actions to quiet title to property in the possession of the plaintiff are imprescriptible, and that delivery of possession consummates the sale and transfers title as between the parties, registration not being indispensable. The Court relied on this case to support the imprescriptibility of the Glors' action.
• Faja vs. Court of Appeals, 75 SCRA 441 — Cited for the principle that one in actual possession claiming ownership may wait until possession is disturbed or title is attacked before vindicating his right, and that the prescriptive period commences only from the time the possessor becomes aware of an adverse claim. The Court found this directly applicable to the Glors' situation.
• Vda. de Cailles vs. Mayuga, 170 SCRA 347; New Owners/Management of TML Garments, Inc. vs. Zaragosa, 170 SCRA 563; Lim vs. Court of Appeals, 158 SCRA 307; Samson vs. CA, 141 SCRA 194; Republic vs. IAC, 144 SCRA 705 — Cited collectively for the proposition that the Supreme Court's jurisdiction in petitions for review is confined to questions of law and that factual findings of the trial court as affirmed by the Court of Appeals, when supported by substantial evidence, are binding.

• Article 480, Civil Code of the Philippines — Made applicable by reference through Sapto vs. Fabiana, which cited it as the domestic incorporation of the American jurisprudential rule that actions to quiet title to property in the possession of the plaintiff are imprescriptible. The provision undergirds the equitable doctrine that a possessor's undisturbed possession gives a continuing right to vindicate title.

Cruz, Davide, Jr., Bellosillo, and Quiason, JJ., concurred.