Case Num: 8. Vda de Rigonan v.

Derecho, GR 159571, July 15, 2005

NATURE OF ACTION:
Before us is a Petition for Review under Rule 45 of the Rules of Court, challenging the July 28,
2003 Decision of the Court of Appeals (CA) in CA-GR CV No. 62535.
FACTS:
The case revolves around the parcel of land located in Danao City, owned by Hilarion Derecho,
wherein after his death, his eight (8) children become pro indiviso owners of the subject
property through intestate succession.
July 16, 1921. Five (5) of the co owners, without consulting the other three heirs, sold the
inherited property subject to a five (5) year redemption clause, the other three heirs namely
Gerardo, Olivia and Agaton were not parties to the pacto de retro sale. Two years after the
redemption period expired, Dolores, one of the heirs, and her husband Leandro, repurchased the
land from Francisco Lacambra. Five decades passed without any controversy, Leandro executed
an affidavit of adjucation in favour to his son, Teodoro Rigonan, Leandro declared himself as the
sole heir of Hilarion, while his son, cancelled the previous tax declaration of the subject property
and acquired a new one under his name. On the same year, Teodoro mortgaged the property to
the Rural Bank of Compostela, Cebu. Afraid that the land might be foreclosed, he sold the land
to spouses Valerio and Visminda Laude, where Teodoro obtained a new tax declaration no. under
the spouses name.
November 10, 1993, respondents assailed the validity of the deed of sale and affidavit of
adjucation on the grounds of fraud, where the subject property was not partitioned equally
among the heirs. The petitioners did not deny the imputed fraudulence, averring that the
document had no bearing on their claim of ownership which had long pertained to the Rigonan
spouses following the 1928 conveyance from the absolute owner, Lacambra. The petitioners
theorized that the co-ownership over the property ended when the period for redemption has
already lapsed. Petitioners also argued that their predecessors in interest continuously owned and
possessed the subject property for over seventy-two (72) years.
The Court of Appeals ruled that the Affidavit of Adjucation and Deed of absolute sale was null
and void due to fraudulence, where heirs of Hilarion was still alive during the time of the
execution of the affidavit of Adjucation, where saying that Leandro as the sole heir is indubitably
false. Also declaring the Deed of Sale by Teodoro Rigonan to the spouses Laude null and void
where the former has no right to dispose the property in question. Both contracts being void, the
defense of prescription and laches was inapplicable. As for the defense that the co ownership
ended when the period to redeem has lapsed, the CA ruled also that the repurchase made by the
Rigonan spouses did not end the state of co-ownership, prescription inapplicable, where the
petitioner failed to show that the co heirs repudiated their rights over the property. Also Valerio

Laude was a not a buyer of good faith. Finally, the CA held that the action for recovery, has not
yet prescribed.
ISSUE/S:
1. Whether at the time of the purchase in 1928, co-ownership still subsisted among the heirs of
Hilarion Derecho.
2. Whether an implied trust was created.
3. Whether the action in the RTC was barred by prescription and laches
RULING:
WHEREFORE, the Petition is GRANTED. The assailed July 28, 2003 Decision of the Court of
Appeals is hereby REVERSED and SET ASIDE. The Complaint before the Regional Trial Court
of Danao City is hereby DISMISSED. No costs.
RATIO DECIDENDI:
1. Failure to redeem property within the redemption period gives the vendee irrevocable title by
operation of law. The failure of the sellers to redeem the property within the stipulated period
indubitably vested absolute title and ownership in the vendee, Lacambra. Consequently, barring
any irregularities in the sale, the vendors definitively lost all title, rights and claims over the thing
sold. To all intents and purposes, therefore, the vendors a retro ceased to be co-owners on July
16, 1926.
2. Implied Trust: If a property is acquired through mistake or fraud, the person obtaining it, by
force of law, is considered a trustee of an implied trust for the benefit of the person from whom
the property comes. In the present case, Lacambra was the trustee who held the property partly
for the benefit of the three mentioned heirs (cestuis que trustent).
3. Prescription: Seventy two (72) years after when respondents took action. Prescription and
laches supervenes in the enforcements of implied trusts.
To grant respondents relief when they have not even offered any justifiable excuse for their
inaction would be unjust. It is certainly beyond our comprehension how they could have
remained silent for more than 50 years. They have only themselves to blame if the Court at this
late hour can no longer afford them relief against the inequities they allegedly suffered.
Considering the undisputed facts, not only had laches set in when respondents instituted their
action for reconveyance in 1993, but their right to enforce the constructive trust had already
prescribed as well.