PEZA vs 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