IMPLIED TRUST- Action to Recover Based on Implied Trust

Category: Obligations and Contracts

IMPLIED TRUST- Action to Recover Based on Implied Trust

Action to recover based on implied trust; prescribes after 10 years; except if plaintiff is in possession.

Once again, the Supreme Court ruled in Consuelo Vda. de Gualberto, et al. vs. Francisco Go, et al., G.R. No. 139843, July 21, 2005 that an action for reconveyance of real property based on implied or constructive trust is not barred by the 10-year period of prescription only if the plaintiff is in actual, continuous and peaceful possession of the property involved. In DBP vs. CA, 331 SCRA 267 (2000) it was said that generally an action for reconveyance based on an implied or constructive trust prescribes in 10-years from the date of issuance of the decree of registration. However, this rule does not apply when the plaintiff is in actual possession of the land.

If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes. (Art. 1456, NCC). Thus, the law thereby creates the obligation of the trustee to reconvey the property and the title thereto in favor of the true owner. The prescriptive period for the reconveyance for fraudulently registered real property is ten (10) years reckoned from the date of the issuance of the certificate of title. (Consuelo Vda. de Alberto, et al. vs. Francis Go, et al., G.R. No. 139843, July 21, 2005).