Heirs of Leonarda Nadela Tomakin vs. Heirs of Celestino Navares

An action for reconveyance based on an implied or constructive trust does not prescribe while the plaintiff remains in actual possession of the disputed property, as such possession converts the action into one to quiet title which is imprescriptible; moreover, reconveyance is the proper remedy to recover property wrongfully registered in another's name and does not constitute a collateral attack on the certificate of title.

Jose Badana died without issue, leaving Lot No. 8467 in Inayawan, Cebu City, covered by Original Certificate of Title No. RO-2230 (O-7281). He was survived by sisters Quirina Badana and Severina Badana. On February 23, 1955, Quirina executed a Deed of Sale with Condition conveying one-half of the property (Lot No. 8467-B) to spouses Remigio Navares and Cesaria Gaviola, reserving to herself the right to the fruits during her lifetime. On December 6, 1957, Severina sold the other half (Lot No. 8467-A) to spouses Aaron Nadela and Felipa Jaca. The successors of the Navares spouses occupied and paid taxes on Lot No. 8467-B, while the Nadela heirs similarly exercised ownership over their portion. In 1991, Lucas Nadela and Leonarda Tomakin sold a portion of the property to Alfredo Dacua, Jr., who subsequently caused Lot No. 8467-A to be titled in his name. In 1994, petitioners executed an Extra Judicial Settlement of the Estate of Jose Badana with Confirmation of Sale, falsely representing that a stranger, Mauricia Bacus, was the sole heir of Jose Badana, and on the basis of this document, caused Lot No. 8467-B to be titled in the names of Leonarda Nadela Tomakin and Lucas J. Nadela under Transfer Certificate of Title No. 131499.

• The 1955 Sale: Quirina Badana sold one-half of Lot No. 8467 (designated as Lot No. 8467-B) to spouses Remigio Navares and Cesaria Gaviola via a Deed of Sale with Condition dated February 23, 1955. The deed reserved to the vendor the right to the fruits or products of the land during her lifetime, with the vendees obligated to acknowledge this right.
• The 1957 Sale: Severina Badana sold the other half of Lot No. 8467 (Lot No. 8467-A) to spouses Aaron Nadela and Felipa Jaca via a Deed of Absolute Sale dated December 6, 1957.
• Subsequent Transactions: On October 30, 1991, Lucas Nadela and Leonarda Tomakin sold 1,860 square meters of the property to spouses Alfredo Dacua, Jr. and Clarita Bacalso. Based on this sale, Dacua caused Lot No. 8467-A to be titled in his name.
• The Extrajudicial Settlement: On January 10, 1994, petitioners executed an Extra Judicial Settlement of the Estate of Jose Badana with Confirmation of Sale, falsely declaring that Mauricia Bacus was the sole heir of Jose Badana and adjudicating the estate to her. On the basis of this document, Lot No. 8467-B was titled in the names of Leonarda Nadela Tomakin and Lucas J. Nadela under Transfer Certificate of Title No. 131499.
• Possession and Tax Payments: Respondents Navares and their predecessors had been in possession of Lot No. 8467-B since 1955, exercising acts of ownership, residing thereon, leasing portions to tenants, and paying realty taxes continuously.
• Commencement of Action: On May 18, 2004, respondents Navares filed a Complaint for Reconveyance and Damages against petitioners Tomakin after oral demands to reconvey the title were unheeded.

• Nature of Possession: Petitioners argued that respondents' possession of Lot No. 8467-B was not in the concept of an owner, thereby rendering the action for reconveyance subject to prescription.
• Indefeasibility of Title: Petitioners maintained that the complaint for reconveyance constituted a collateral attack on TCT No. 131499, violating Section 48 of Presidential Decree No. 1529 which states that a certificate of title shall not be subject to collateral attack.
• Lack of Cause of Action: Petitioners contended that respondents had no cause of action because they failed to file a prior petition for declaration of heirship as heirs of spouses Remigio Navares and Cesaria Gaviola.
• Laches: Petitioners asserted that respondents were guilty of laches, having delayed the filing of the action for 49 years since the 1955 sale.

• Actual Possession: Respondents countered that they and their predecessors had been in actual, adverse, and open possession of Lot No. 8467-B in the concept of an owner since 1955, continuously paying taxes and exercising acts of dominion.
• Validity of the 1955 Sale: Respondents argued that the 1955 Deed of Sale with Condition was valid and that the reservation of fruits did not constitute a suspensive condition that would prevent the transfer of ownership.
• Fraudulent Registration: Respondents maintained that petitioners acquired title to Lot No. 8467-B through fraud by executing the extrajudicial settlement involving a false heir, warranting reconveyance.

• Prescription and Character of Possession: Whether the Court of Appeals erred in holding that respondents' action for reconveyance was not barred by prescription despite their admission that respondents were living on the property and leasing portions thereof.
• Collateral Attack on Title: Whether the complaint for reconveyance constituted an impermissible collateral attack on the certificate of title under Section 48 of Presidential Decree No. 1529.
• Cause of Action: Whether respondents had a cause of action against petitioners notwithstanding their failure to file a prior petition for declaration of heirship.
• Laches: Whether respondents were guilty of laches for delaying the filing of the action.

• Prescription and Character of Possession: The action was not barred by prescription. Because respondents remained in actual possession of Lot No. 8467-B, the action for reconveyance became in effect an action to quiet title, which is imprescriptible. Undisturbed possession gives the plaintiff the continuing right to seek equitable relief to determine the nature of adverse claims.
• Collateral Attack on Title: The remedy of reconveyance is not a collateral attack on the certificate of title. Pursuant to settled jurisprudence, the sole remedy of a landowner whose property has been wrongfully registered in another's name is to bring an ordinary action for reconveyance, respecting the decree as incontrovertible but seeking to recover the property.
• Cause of Action: The issue was barred by estoppel and the prohibition against changing theories on appeal. Petitioners raised this defense for the first time in their Motion for Reconsideration before the Court of Appeals, not in their Answer or Pre-Trial Brief before the Regional Trial Court. Section 15, Rule 44 of the Rules of Court prohibits raising questions on appeal that were not raised in the court below.
• Laches: Respondents were not guilty of laches. Having been in possession and exercising acts of dominion over the subject property, they cannot be deemed to have omitted or neglected to assert their rights as owners. Their undisturbed possession gave them the continuing right to seek judicial relief.

• Reconveyance as Remedy for Fraudulent Registration — Where property is wrongfully or erroneously registered in another's name, the sole remedy after one year from the date of the decree is not to set aside the decree but to bring an ordinary action for reconveyance, respecting the decree as incontrovertible but seeking recovery of the property or damages if it has passed into the hands of an innocent purchaser for value.
• Prescription and Possession in Reconveyance — Prescription does not run against a plaintiff in actual possession of disputed land because such plaintiff has the right to wait until possession is disturbed or title is questioned before initiating an action to vindicate the right. Where the plaintiff in an action for reconveyance remains in possession, the action becomes in effect an action to quiet title, which is not subject to prescription.
• Theory of the Case on Appeal — A party may not change his theory of the case on appeal. Section 15, Rule 44 of the Rules of Court provides that only questions of law or fact raised in the court below and within the issues framed by the parties may be raised on appeal. Defenses not pleaded in the answer may not be raised for the first time on appeal.

• "Prescription does not run against the plaintiff in actual possession of the disputed land because such plaintiff has a right to wait until his possession is disturbed or his title is questioned before initiating an action to vindicate his right. His undisturbed possession gives him the continuing right to seek the aid of a court of equity to determine the nature of the adverse claim of a third party and its effect on his title." — Articulating the principle that possession converts a reconveyance action into an imprescriptible action to quiet title.
• "The sole remedy of the land owner whose property has been wrongfully or erroneously registered in another's name is, after one year from the date of the decree, not to set aside the decree x x x, but, respecting the decree as incontrovertible and no longer open to review, to bring an ordinary action in the ordinary court of justice for reconveyance or, if the property has passed into the hands of an innocent purchaser for value, for damages." — Establishing that reconveyance is the proper remedy and not a collateral attack on the certificate of title.

• Sps. Alfredo v. Sps. Borras, 452 Phil. 178 (2003) — Controlling precedent establishing that prescription does not run against plaintiffs in actual possession and that undisturbed possession gives a continuing right to seek equitable relief; followed by the Court in affirming the CA's ruling on prescription and laches.
• Director of Lands v. Register of Deeds for the Province of Rizal, 92 Phil. 826 (1953) — Controlling precedent defining the remedy of reconveyance as the proper recourse for landowners whose property was wrongfully registered in another's name; cited to establish that reconveyance is not a collateral attack on the title.
• Commissioner of Internal Revenue v. Mirant Pagbilao Corporation, 535 Phil. 481 (2006) — Cited for the principle that a party cannot fundamentally change the nature of the issue in the case on appeal and that courts have no jurisdiction to decide questions not in issue.

• Section 48, Presidential Decree No. 1529 (Property Registration Decree) — Provides that a certificate of title shall not be subject to collateral attack and cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law; interpreted by the Court to exclude reconveyance actions which are ordinary civil actions to recover property wrongfully registered.
• Section 15, Rule 44 of the Rules of Court — Provides that only questions of law or fact raised in the court below and within the issues framed by the parties may be raised on appeal; applied to bar petitioners from raising the defense of lack of cause of action for the first time on appeal.

Carpio (Chairperson), J. Reyes, Jr., and Lazaro-Javier, JJ. Perlas-Bernabe, J., on official leave.