PHILIPPINE ECONOMIC ZONE AUTHORITY (PEZA) V. FERNANDEZ

Category: Property, Ownership and Its Modifications

PHILIPPINE ECONOMIC ZONE AUTHORITY (PEZA) V. FERNANDEZ

FACTS:

Lot 4673 was registered in the names of Florentina Rapaya, Victorino Cuizon among others covered by an OCT. Sometime thereafter, Jorgea Igot-Soro ño et al executed an Extra-judicial Partition claiming to be the only surviving heirs of the registered owners, through which they were issued a TCT.

Said lot was among the object of an expropriation proceeding before the RTC. Said RTC approved the compromise Agreement b/w the Export Processing Zone Authority (EPZA) and Igot-Soroño et al wherein EPZA would pay a certain amount in exchange for the subject property.

EPZA acquired title to said land by virtue of the RTC decision and was issued a corresponding TCT.
The Heirs of the Florentina Rapaya and Juan Cuizon filed a complaint to nullify several documents including the TCT issued to EPZA for they were excluded from the extrajudicial settlement of the estate.

EPZA filed a motion to dismiss on the ground of prescription and was denied thus elevated the case to the CA wherein the CA ruled that the heirs of Igot-Soroño defrauded the other heirs by falsely representing that they were the only heirs enabling them to appropriate the land in favor of EPZA. This method of acquiring property created a constructive trust in favor of the defrauded party and grants them the right to vindicate regardless of the lapse of time. Thus, the case at bar.

ISSUE/S:

1) Whether or not private respondent’s claim over the expropriated land has prescribed
2) Whether or not reconveyance lies against expropriated property

HELD:

1) YES. As provided in the Rules of Court, persons unduly deprived of their lawful participation in a settlement may assert their claim only w/in the 2-year period after the settlement and distribution of the estate. However, this prescriptive period will not apply to those who had not been notified of the settlement.

The Private respondents are deemed to have been notified of the extrajudicial settlement since it was registered and annotated on the certificate of title over the lot.

The only exception to this rule is when the title still remains in the hands of the heirs who have fraudulently caused the partition of the said property. In the case at bar, the title has already passed to an innocent purchaser for value, the gov’t through EPZA.

Their remedies of action for reconveyance resulting from fraud, and action for reconveyance based on an implied constructive trust has already prescribed as well the former having prescribed 4 years from the discovery and the latter prescribing 10 years from the alleged fraudulent registration.

2) NO. Reconveyance is a remedy for those whose property has been wrongfully or erroneously registered in another’s name. However, this cannot be availed once the property has passed to an innocent purchaser for value. Since the property has already passed to the gov’t in an expropriation proceeding, EPZA is entitled to enjoy the security afforded innocent 3rd persons and their title to the property must be preserved.

However, the private respondents are not w/o remedy. They can sue for damages their co-heirs.