Eugenio Feliciano vs Pedro Canoza

February 1, 2013
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Remedial Law – Special Proceedings – Prescriptive Period – Fraud in Extrajudicial Settlement 

In May 1930, Antonio Feliciano died leaving behind a parcel of land. In 1972, an extrajudicial settlement was executed by Leona Feliciano, Maria Feliciano, Pedro Feliciano, and Salina Feliciano. The four declared that they are the only heirs of Antonio; they did not include the heirs of their dead siblings Esteban and Doroteo Feliciano. Thereafter, Pedro sold his share to Jacinto Feliciano; Salina sold her share to Felisa Feliciano; and Leona and Maria sold their share to Pedro Canoza.

Subsequently, Jacinto and Canoza applied for their respective titles covering the lands they purchased. In November 1977, a free patent was issued to Jacinto. In February 1979, a free patent was likewise issued to Pedro Canoza.

In October 1993, Eugenio Feliciano and Angelina De Leon (surviving heirs of Esteban) as well as Trinidad Valiente and Basilia Trinidad (Surviving heirs of Doroteo) filed a complaint for the declaration of nullity of the deed of extrajudicial settlement on the ground of fraud by reason of the exclusion of the other compulsory heirs (Esteban and Doroteo).

The trial court ruled in favor of Eugenio et al but on appeal, the Court of Appeals reversed the trial court on the ground that Eugenio et al’s action has prescribed.

ISSUE: Whether or not the action filed by Eugenio et al is barred by prescription.

HELD: Yes. It is undeniable that the extrajudicial settlement executed by Leona Feliciano, Maria Feliciano, Pedro Feliciano, and Salina Feliciano in 1972 to the exclusion of Esteban and Doroteo’s heirs is attended by fraud. As such, the deed of extrajudicial settlement can be attacked in action for annulment in court. However, such action should be filed within 4 years from the discovery of the fraud. In this case, the fraud was actually committed in 1972 but it was only deemed discovered in 1977 and 1979. In 1977, because this was the time when a free patent was issued to Jacinto and in 1979, when a free patent was issued to Canoza. These years are the reckoning point because the free patents released to Jacinto and Canoza served as constructive notices to Eugenio et al and to the whole world. And so, when Eugenio et al filed their complaint in 1993, the complaint was already filed out of time (16 years late in case of Jacinto; and 14 years in case of Canoza).

 

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