Republic vs. Solano

A claim to recover escheated property must be filed within five (5) years from the date of the escheat judgment under Section 4, Rule 91 of the Rules of Court, and the belated discovery of deeds of donation does not constitute extrinsic fraud or lack of jurisdiction to warrant the annulment of a final escheat judgment.

Amada Solano served as the domestic helper and constant companion of Elizabeth Hankins, a French widow, for over three decades. Hankins purportedly executed two deeds of donation in 1983 and 1984 conveying two parcels of land to Solano, who subsequently misplaced the documents. Upon Hankins's death without known heirs, the Republic initiated escheat proceedings. During the pendency of the escheat case, a motion for intervention filed by Solano's spouse and another individual was denied for failure to demonstrate a valid claim. The certificates of title covering the subject properties remained in the name of the decedent.

• Employment and Alleged Donation: Amada Solano was the domestic helper and constant companion of Elizabeth Hankins, a French widow, from 1952 to 1985. In recognition of her service, Hankins purportedly executed two deeds of donation in 1983 and 1984, conveying two parcels of land covered by TCT Nos. 7807 and 7808 to Solano. Solano misplaced these deeds.
• Escheat Proceedings: Following Hankins's death on 20 September 1985 without known heirs, the Republic filed a petition for escheat before the RTC of Pasay City. Romeo Solano (Amada's spouse) and Gaudencio Regosa filed a motion for intervention, which the RTC denied on 24 June 1987 for failure to show a valid claim or right to the properties.
• Escheat Judgment: The RTC escheated the estate in favor of Pasay City on 27 June 1989. Pursuant to this judgment, the Register of Deeds cancelled TCT Nos. 7807 and 7808 and issued new titles (TCT Nos. 129551 and 129552) in the name of Pasay City on 7 August 1990.
• Petition for Annulment: Solano claimed to have accidentally found the misplaced deeds of donation and filed a petition for annulment of judgment before the Court of Appeals on 28 January 1997, more than seven years after the RTC judgment.

• Grave Abuse of Discretion: Petitioner argued that the Court of Appeals committed grave abuse of discretion in denying its affirmative defenses and giving due course to the annulment petition.
• Grounds for Annulment: Petitioner maintained that the discovery of the deeds of donation seven years after the escheat judgment does not constitute extrinsic fraud or lack of jurisdiction—the only grounds for annulment under Rule 47 of the 1997 Rules of Civil Procedure—and thus cannot divest the trial court of its jurisdiction over the escheat.
• Prescription: Petitioner insisted that the 5-year statute of limitations under Rule 91 of the Revised Rules of Court and Article 1014 of the Civil Code had already set in, barring private respondent's claim.

• Exclusion from Estate: Respondent countered that the properties had been donated to her prior to Hankins's death and therefore did not form part of the estate subject to escheat.
• Improper Recipient of Escheat: Respondent argued that even if the properties were subject to escheat, the trial court erred in escheating them to the Pasay City Government instead of the Republic of the Philippines under Rule 91, Section 1.
• Applicable Prescriptive Period: Respondent asserted that the action was filed within the 10-year prescriptive period for reconveyance based on an implied trust under Articles 1144 and 1456 of the Civil Code, not the 5-year period for claims against an escheated estate.

• Annulment of Judgment: Whether the Court of Appeals erred in giving due course to the petition for annulment of the escheat judgment based on the belated discovery of deeds of donation.
• Prescription: Whether private respondent's claim over the escheated properties is barred by the 5-year reglementary period under Section 4, Rule 91 of the Revised Rules of Court.

• Annulment of Judgment: The annulment of the escheat judgment cannot be sustained. The trial court possessed jurisdiction over the escheat proceedings because the certificates of title covering the subject properties remained in the decedent's name, indicating no transfer of ownership was effected during her lifetime. The belated allegation of prior donation, without clear and convincing proof, cannot divest the trial court of jurisdiction or justify annulling a final judgment, as such discovery does not fall under the recognized grounds of extrinsic fraud or lack of jurisdiction under Rule 47.
• Prescription: The claim is barred by prescription. Under Section 4, Rule 91 of the Revised Rules of Court, a claimant to an escheated property must file a claim within five (5) years from the date of the escheat judgment; otherwise, the claim is barred forever. Private respondent filed her petition more than seven years after the RTC judgment, well beyond the 5-year reglementary period. The 10-year prescriptive period for reconveyance under Articles 1144 and 1456 of the Civil Code does not apply to circumvent the specific procedural rule governing escheat claims.

• Escheat — A proceeding whereby the state, by virtue of its sovereignty, claims the real or personal property of a person who dies intestate leaving no heir, to forestall an invitation to self-service by the first comers. As an incident of sovereignty, the state prescribes the conditions and time limits within which claims to such property may be made.
• Prescriptive Period for Claims in Escheat — Under Section 4, Rule 91 of the Revised Rules of Court, a person entitled to an escheated property must file a claim within five (5) years from the date of the escheat judgment to regain title and possession, or the proceeds if sold; failure to do so bars the claim forever. This 5-year period is mandatory and encourages claimants to be punctilious in asserting their rights.
• Burden of Proof in Escheat Intervention — Where a person enters an escheat proceeding as a claimant or intervenor, the burden rests upon such person to establish their title to the property and their right to intervene.

• "Escheat is a proceeding, unlike that of succession or assignment, whereby the state, by virtue of its sovereignty, steps in and claims the real or personal property of a person who dies intestate leaving no heir."
• "The 5-year period is not a device capriciously conjured by the state to defraud any claimant; on the contrary, it is decidedly prescribed to encourage would-be claimants to be punctilious in asserting their claims, otherwise they may lose them forever in a final judgment."
• "Where a person comes into an escheat proceeding as a claimant, the burden is on such intervenor to establish his title to the property and his right to intervene."

• Municipal Council of San Pedro, Laguna v. Colegio de San Jose, Inc., No. L-45460 (25 February 1938) — Followed. Cited to establish that any person alleging a direct right or interest in property sought to be escheated is an interested party who may appear and oppose the petition, clarifying that a donee has the personality to be a claimant in escheat proceedings.
• Hamilton v. Brown, 161 US 256 — Followed. Cited for the principle that a judgment in escheat is conclusive against all persons with actual or constructive notice, provided proper notice was observed.
• Re Thompson’s Estate, 192 F2d 451 — Cited for the definition of escheat as a proceeding to prevent property from being an open invitation to self-service by the first comers.

• Section 4, Rule 91, Revised Rules of Court — Provides that a claimant to escheated property must file a claim within five (5) years from the date of the escheat judgment to recover title and possession, or the proceeds; otherwise, the claim is barred forever. Applied to bar private respondent's claim filed seven years after the judgment.
• Rule 47, 1997 Rules of Civil Procedure — Enumerates extrinsic fraud and lack of jurisdiction as the only grounds for annulment of judgments. Applied to deny annulment, as the belated discovery of deeds of donation constitutes neither extrinsic fraud nor lack of jurisdiction.
• Articles 1144 and 1456, Civil Code — Art. 1144 prescribes a 10-year period for actions upon a written contract, obligation created by law, or judgment. Art. 1456 creates an implied trust when property is acquired through mistake or fraud. The Court of Appeals relied on these provisions, but the Supreme Court held that the specific 5-year period under Rule 91 governs escheat claims, not the general 10-year prescriptive period for implied trusts.

Mendoza, Quisumbing, and De Leon, Jr.