Heirs of Narvasa vs. Imbornal

An action for reconveyance based on an implied trust prescribes in ten years from the date of registration of the title if the plaintiff is not in possession, but is imprescriptible if the plaintiff remains in possession. The existence of an implied trust must be proven by clear and trustworthy evidence, and oral testimony alone is insufficient to overcome the presumption of regularity attending the issuance of a homestead patent under Commonwealth Act No. 141.

Basilia Imbornal owned the Sabangan property in San Fabian, Pangasinan, which she conveyed to her three daughters Alejandra, Balbina, and Catalina (the Imbornal sisters) in 1920. Catalina's husband, Ciriaco Abrio, applied for and was granted a homestead patent over a 31,367-square-meter riparian land (Motherland) adjacent to the Cayanga River, for which Original Certificate of Title (OCT) No. 1462 was issued in his name on December 5, 1933. Francisco I. Narvasa, Sr. and Pedro Ferrer were children of Alejandra, while Petra Imbornal was the daughter of Balbina; the respondents were descendants of Pablo, the fourth Imbornal sibling. In 1949, a First Accretion of approximately 59,772 square meters formed adjacent to the Motherland, for which OCT No. P-318 was issued to respondent Victoriano on August 15, 1952. In 1971, a Second Accretion of 32,307 square meters formed abutting the First Accretion, and on November 10, 1978, OCT No. 21481 was issued to all respondents covering this second accretion.

• The Imbornal Family and the Sabangan Property: Basilia Imbornal had four children: Alejandra, Balbina, Catalina, and Pablo. Basilia owned a 4,144-square-meter parcel of land in Sabangan, Barangay Nibaliw West, San Fabian, Pangasinan (Sabangan property), which she conveyed to her three daughters Alejandra, Balbina, and Catalina in 1920. Francisco I. Narvasa, Sr. and Pedro Ferrer were the children of Alejandra (from different marriages), while Petra Imbornal was the daughter of Balbina. The respondents were descendants of Pablo.
• The Motherland and Homestead Patent: Catalina's husband, Ciriaco Abrio, applied for a homestead patent over a 31,367-square-meter riparian land (Motherland) adjacent to the Cayanga River. He was awarded Homestead Patent No. 24991, and on December 5, 1933, OCT No. 1462 was issued in his name. On May 10, 1973, OCT No. 1462 was cancelled and TCT No. 101495 was issued in the names of Ciriaco's heirs. Ciriaco and his heirs occupied the northern portion of the Motherland, while respondents occupied the southern portion.
• The First and Second Accretions: In 1949, the First Accretion (approximately 59,772 square meters) formed adjacent to the southern portion of the Motherland. On August 15, 1952, OCT No. P-318 was issued in the name of respondent Victoriano covering this accretion. In 1971, the Second Accretion (32,307 square meters) formed abutting the First Accretion, and on November 10, 1978, OCT No. 21481 was issued in the names of all respondents covering this second accretion.
• The Amended Complaint: On February 27, 1984, Francisco, et al. filed an Amended Complaint for reconveyance, partition, and/or damages. They alleged that Ciriaco, with Catalina's help, urged Balbina and Alejandra to sell the Sabangan property to fund his homestead patent application, agreeing to hold the Motherland in trust for the Imbornal sisters. They also alleged that respondents acquired the accretions through fraud and deceit, despite not being the riparian owners.
• Respondents' Defense: Respondents filed an Amended Answer contending that the complaint stated no cause of action, the action was barred by prescription, and the properties were covered by Torrens certificates of title free from encumbrance.
• Trial Court Findings: The RTC found that an implied trust existed between Ciriaco and the Imbornal sisters regarding the Motherland, based on the alleged use of Sabangan property proceeds to fund the homestead application. It ruled that the Imbornal sisters and their heirs were entitled to proportionate shares of the Motherland and the accretions.

• Existence of Implied Trust: Petitioner maintained that an implied trust was created when Ciriaco used the proceeds from the sale of the Sabangan property—owned by the Imbornal sisters—to fund his homestead patent application over the Motherland, agreeing to hold the land in trust for them once the patent was approved.
• Fraudulent Registration of Accretions: Petitioner argued that respondents illegally registered the First and Second Accretions through deceit, fraud, falsehood, and misrepresentation, despite not being the riparian owners, and that the true owners were the heirs of the Imbornal sisters who owned the Motherland.
• Imprescriptibility of Action: Petitioner contended that the action for reconveyance was imprescriptible because they remained in possession of the properties, or alternatively, that prescription had not yet accrued because they only discovered in 1983 that respondents had repudiated their shares.

• Prescription: Respondent countered that the action for reconveyance was barred by prescription, having been filed beyond the reglementary period from the dates of registration of the titles covering the Motherland (1933) and the First Accretion (1952).
• Failure to State Cause of Action: Respondent argued that the Amended Complaint failed to clearly describe the disputed properties or specify the transgressions committed.
• Indefeasibility of Title: Respondent maintained that Ciriaco alone satisfied the stringent requirements under Commonwealth Act No. 141 for the homestead patent, rendering his title indefeasible and not subject to collateral attack by his wife's relatives.
• Acquisition by Prescription: Respondent argued that they acquired the accretions by acquisitive prescription, having been in continuous possession and enjoyment of the First Accretion since 1949 in the concept of an owner, which ripened into title evidenced by OCT No. P-318, thereby also making them riparian owners entitled to the Second Accretion.

• Prescription of Reconveyance Action: Whether the action for reconveyance of the Motherland and the First Accretion was barred by the 10-year prescriptive period.
• Existence of Implied Trust: Whether an implied trust existed between the Imbornal sisters and Ciriaco Abrio with respect to the Motherland.
• Ownership of Accretions: Whether petitioners acquired rights over the First and Second Accretions.

• Prescription of Reconveyance Action: The action for reconveyance with respect to the Motherland and the First Accretion was barred by prescription. An action for reconveyance based on an implied trust prescribes in ten years from the date of registration of the deed or issuance of the certificate of title if the plaintiff is not in possession. Because petitioners' predecessors were never in possession of the properties, the 10-year period applied, commencing from the issuance of OCT No. 1462 on December 5, 1933 (for the Motherland) and OCT No. P-318 on August 15, 1952 (for the First Accretion). The Amended Complaint filed on February 27, 1984 was filed way beyond these periods.
• Existence of Implied Trust: No implied trust was established. The burden of proving a trust rests on the party asserting its existence, requiring clear and trustworthy evidence; oral evidence must be received with extreme caution and cannot rest on loose or indefinite declarations. The alleged oral agreement in the 1920s was insufficient to overcome the presumption of regularity attending the homestead patent proceedings under Commonwealth Act No. 141, which requires actual possession, cultivation, and improvement by the applicant. The lack of evidence showing that the Imbornal sisters entered possession or asserted rights over the Motherland further undermined the claim.
• Ownership of Accretions: Petitioners acquired no rights over the accretions. Under Article 457 of the Civil Code, accretions belong to the riparian owner, but if not registered under the Torrens system, they are subject to acquisition through prescription by third persons. Because petitioners failed to prove ownership of the Motherland, they were not the riparian owners entitled to the accretions. Respondents, holding certificates of title and possessing the accretions, had superior claims.

• Prescription of Actions for Reconveyance Based on Implied Trust — An action for reconveyance based on an implied or constructive trust prescribes in ten years from the date of registration of the deed or the date of issuance of the certificate of title over the property if the plaintiff is not in possession. However, if the plaintiff is in possession of the property, the action is imprescriptible as it is in the nature of a suit for quieting of title. The Court applied this rule to bar the claims regarding the Motherland and First Accretion because petitioners were never in possession, calculating the period from the dates the titles were issued.
• Burden of Proof for Implied Trusts — The burden of proving the existence of a trust is on the party asserting its existence, and such proof must be clear and satisfactorily show the existence of the trust and its elements. While implied trusts may be proven by oral evidence, the evidence must be trustworthy and received by the courts with extreme caution, and should not be made to rest on loose, equivocal or indefinite declarations because oral evidence can easily be fabricated. The Court found that petitioners' oral testimony regarding the alleged agreement in the 1920s failed to meet this standard.
• Accretion and Riparian Rights — Under Article 457 of the Civil Code, accretions belong to the owners of lands adjoining the banks of rivers. Alluvial deposits along the banks of a creek or river do not form part of the public domain and automatically belong to the owner of the estate to which they are added, provided the owner registers the same under the Torrens system; otherwise, the alluvial property may be subject to acquisition through prescription by third persons. The Court held that because petitioners failed to establish ownership of the Motherland, they could not claim the accretions as riparian owners, while respondents had acquired title through prescription and registration.
• Presumption of Regularity in Homestead Patents — Proceedings for land registration that lead to the issuance of a homestead patent are presumptively regular and proper, a presumption that requires clear evidence to overcome. The Court invoked this presumption to reject the claim that the Motherland was acquired and registered by mistake or fraud.

• "An action for reconveyance based on an implied trust prescribes in 10 years. The reference point of the 10-year prescriptive period is the date of registration of the deed or the issuance of the title. The prescriptive period applies only if there is an actual need to reconvey the property as when the plaintiff is not in possession of the property. However, if the plaintiff, as the real owner of the property also remains in possession of the property, the prescriptive period to recover title and possession of the property does not run against him. In such a case, an action for reconveyance, if nonetheless filed, would be in the nature of a suit for quieting of title, an action that is imprescriptible." — Articulating the distinction between prescriptive and imprescriptible actions for reconveyance based on possession.
• "An implied trust arises, not from any presumed intention of the parties, but by operation of law in order to satisfy the demands of justice and equity and to protect against unfair dealing or downright fraud." — Defining the nature of implied trusts under Article 1456 of the Civil Code.
• "The burden of proving the existence of a trust is on the party asserting its existence, and such proof must be clear and satisfactorily show the existence of the trust and its elements. While implied trusts may be proven by oral evidence, the evidence must be trustworthy and received by the courts with extreme caution, and should not be made to rest on loose, equivocal or indefinite declarations. Trustworthy evidence is required because oral evidence can easily be fabricated." — Establishing the standard of proof for implied trusts.
• "To the owners of lands adjoining the banks of rivers belong the accretion which they gradually receive from the effects of the current of the waters." — Stating Article 457 of the Civil Code on accretion.
• "The only restriction provided for by law is that the owner of the adjoining property must register the same under the Torrens system; otherwise, the alluvial property may be subject to acquisition through prescription by third persons." — Clarifying the limitation on automatic ownership of accretions.

• Lasquite v. Victory Hills, Inc., 608 Phil. 418 (2009) — Controlling precedent on the 10-year prescriptive period for actions for reconveyance based on implied trusts and the exception for imprescriptibility when the plaintiff is in possession.
• Cantoja v. Lim, G.R. No. 168386, March 29, 2010, 617 SCRA 44 — Cited for the principle that accretions belong to the riparian owner and the preferential right of such owner under the Spanish Law of Waters of 1866 and Lands Administrative Order No. 7-1.
• Crisostomo v. Garcia, Jr., G.R. No. 164787, January 31, 2006, 481 SCRA 402 — Cited for the rule that when property is registered in another's name, an implied or constructive trust is created by law in favor of the true owner.
• Vda. De Rigonan v. Derecho, G.R. No. 159571, July 15, 2005, 463 SCRA 627 — Cited for the definition of implied trusts arising by operation of law to satisfy demands of justice and equity.
• Herbon v. Palad, 528 Phil. 130 (2006) — Cited for the burden of proof in establishing trusts.
• Tigno v. CA, 345 Phil. 486 (1997) — Cited for the requirement that oral evidence of trusts must be trustworthy and not rest on loose declarations.

• Article 1456, Civil Code — Provides that a person acquiring property through mistake or fraud becomes, by operation of law, a trustee of an implied trust for the benefit of the real owner; cited as the basis for the trust alleged by petitioners.
• Article 457, Civil Code — States that to the owners of lands adjoining the banks of rivers belong the accretion which they gradually receive from the effects of the current of the waters; cited as the basis for riparian ownership of accretions.
• Commonwealth Act No. 141 (Public Land Act), Sections 12-14 — Prescribes the stringent conditions for the grant of homestead patents, including requirements as to age, ownership of land, payment of fees, residence, cultivation, and improvement; cited to support the presumption of regularity in Ciriaco Abrio's homestead patent.

Antonio T. Carpio (Chairperson), Arturo D. Brion, Mariano C. Del Castillo, and Jose Portugal Perez.