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BERNARDINO RAMOS v. CA

FACTS:

The spouses Bernardino Ramos and Rosalia Oli filed an action for reconveyance with damages against the spouses Rodolfo Bautista and Felisa Lopez. The dispute revolves around two parcels of land allegedly sold to the plaintiffs by Pedro Tolentino in 1939. The plaintiffs claim that they have been in possession of the subject lots for over 50 years and were surprised to discover the registration of the lots in favor of Lucia Bautista in 1940. The plaintiffs argue that they have acquired ownership and possession through acquisitive prescription and demand the return of the lots. The defendants assert their absolute ownership over the lots covered by Transfer Certificates of Title (TCT) and argue that the action for reconveyance should be dismissed due to the operation of the Torrens System, which bars acquisitive prescription. The trial court and the Court of Appeals dismissed the plaintiffs' complaint, citing the indefeasibility and incontrovertibility of titles after the expiration of one year from the final decree of registration. The plaintiffs filed a petition for review on certiorari before the Supreme Court, alleging errors in the findings of possession and prescription.

ISSUES:

  1. May the heir of the original registrant of parcels of land under the Torrens System be deprived of ownership by alleged claimants thereof through acquisitive prescription?

  2. Did the Court of Appeals err in finding that the heirs of the late Bernardino Ramos' action for reconveyance had already prescribed?

  3. Is reconveyance precluded when the lands in question have already been transferred to a third party acting in good faith and for value, despite the third party inheriting the property?

RULING:

  1. No. Under the Torrens system, property registered in the name of the original registrant, here Lucia Bautista, cannot be acquired by prescription or adverse possession. Likewise, reconveyance can only be sought against the party who wrongfully registered the land, not against an innocent third party purchaser for value.

  2. Yes. The action for reconveyance is barred due to the lapse of the prescribed period—petitioners failed to file within the one-year period from the issuance of the decree of registration and subsequent statutory periods.

  3. Yes. Reconveyance will not prosper if the property has already been transferred to an innocent third party acting in good faith and for value. However, this does not apply to heirs who are not considered third parties. Despite this finding, petitioners' claims were still barred by prescription and laches.

PRINCIPLES:

  1. Indefeasibility of Title After one year from the entry of the final decree of registration, the title becomes indefeasible and incontrovertible.

  2. Acquisitive Prescription and Torrens System No title to registered land can be acquired by prescription or adverse possession against a registered owner.

  3. Prescription of Actions for Reconveyance Actions for reconveyance based on fraud prescribe in four years from the discovery of the fraud. Actions based on implied or constructive trust prescribe in ten years from the creation of the trust.

  4. Relativity of Contracts Contracts bind only the parties who entered into them and do not affect third parties.

  5. Requirement for Authentic Documentation For a private document to be considered as evidence, its due execution and authenticity must be established as per the Rules of Court.

  6. Constructive Notice Registration of real property imparts constructive notice to all persons, impacting the date of discovery of potential fraud.

  7. Imprescriptibility of Registered Title After one year from the issuance of a decree of registration, such decree becomes imprescriptible.

  8. Implications for Heirs and Innocent Purchasers An action for reconveyance can only prosper if the property is still registered in the name of the person who wrongfully procured registration, not against third parties who acquired it in good faith and for value.