Myline Cordial

Iglesia Filipina Independiente vs. Heirs of Bernardino Taeza
G.R. No. 179597, February 03, 2014
715 SCRA 138
725 Phil. 577

FACTS:
Iglesia Filipina Independiente (IFI), a religious corporation owned a parcel of land which was transferred by Rev. Macario Ga in his capacity as the Supreme Bishop of IFI to Bernardino Taeza under a deed of sale with mortgage on February 5, 1976. The officers of the Laymen’s Committee of the Parish Council filed a complaint for annulment of said deed of sale but the complaint was dismissed by the trial court.

Rev. Ga’s term as Supreme Bishop of the IFI terminated on May 8, 1981. Meanwhile Bernardino Taeza registered the subject parcels of land and Transfer Certificate of Sale was issued to him.

On January 1990, a complaint for annulment of sale was again filed by IFI through the newly-appointed Supreme Bishop. The trial court rendered a decision in favor of petitioner declaring that the deed of sale was null and void. On appeal, the appellate court reversed the RTC’s decision ruling that IFI, being a corporation sole validly transferred ownership over the land through it Supreme Bishop who was the administrator of all properties and the official representative of the church.

ISSUE:
Is then Supreme Bishop Rev. Ga authorized to enter into a contract disposing a property in behalf of IFI?

RULING:
No. Section 113 (now Section 111) provides that in cases where the rules, regulations, and discipline of the religious denomination, sect or church, religious society, or order concerned represented by such corporation sole regulate the method of acquiring, holding, selling, and mortgaging real estate and personal property, such rules, regulations and discipline shall govern. Article IV (a) of their Canons provides that “All real properties of the Church located or situated in such parish can be disposed of only with the approval and conformity of the laymen’s committee, the parish priest, the Diocesan Bishop, with sanction of the Supreme Council, and finally with the approval of the Supreme Bishop, as administrator of all the temporalities of the Church.”

The Laymen’s Committee made its objection to the sale known to the Supreme Bishop. Since the Canons require that all the church entities listed in Article IV (a) of the Canons should give its approval to the transaction, in executing the sale, Supreme Bishop Rev. Ga had acted beyond his powers making the contract of sale with mortgage unenforceable.

NOTES:

Unenforceable Contracts

This case clearly falls under the category of unenforceable contracts mentioned in Article 1403, paragraph (1) of the Civil Code, which provides, thus:

Art. 1403. The following contracts are unenforceable, unless they are ratified:
(1) Those entered into in the name of another person by one who has been given no authority or legal representation, or who has acted beyond his powers;

In Mercado v. Allied Banking Corporation, the Court explained that:
x x x Unenforceable contracts are those which cannot be enforced by a proper action in court, unless they are ratified, because either they are entered into without or in excess of authority or they do not comply with the statute of frauds or both of the contracting parties do not possess the required legal capacity.  x x x.

Closely analogous cases of unenforceable contracts are those where a person signs a deed of extrajudicial partition in behalf of co-heirs without the latter’s authority; where a mother as judicial guardian of her minor children, executes a deed of extrajudicial partition wherein she favors one child by giving him more than his share of the estate to the prejudice of her other children; and where a person, holding a special power of attorney, sells a property of his principal that is not included in said special power of attorney.
In the present case, however, respondents’ predecessor-in-interest, Bernardino Taeza, had already obtained a transfer certificate of title in his name over the property in question. Since the person supposedly transferring ownership was not authorized to do so, the property had evidently been acquired by mistake. In Vda. de Esconde v. Court of Appeals, the Court affirmed the trial court’s ruling that the applicable provision of law in such cases is Article 1456 of the Civil Code which states that “[i]f 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.”

Trusts

A constructive trust having been constituted by law between respondents as trustees and petitioner as beneficiary of the subject property, may respondents acquire ownership over the said property? The Court held in the same case of Aznar, that unlike in express trusts and resulting implied trusts where a trustee cannot acquire by prescription any property entrusted to him unless he repudiates the trust, in constructive implied trusts, the trustee may acquire the property through prescription even if he does not repudiate the relationship. It is then incumbent upon the beneficiary to bring an action for reconveyance before prescription bars the same.

Prescription; Reconveyance

In Aznar, the Court explained the basis for the prescriptive period, to wit:
x x x under the present Civil Code, we find that just as an implied or constructive trust is an offspring of the law (Art. 1456, Civil Code), so is the corresponding obligation to reconvey the property and the title thereto in favor of the true owner. In this context, and vis-á-vis prescription, Article 1144 of the Civil Code is applicable.

Article 1144. The following actions must be brought within ten years from the time the right of action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.
x x x      x x x      x x x

An action for reconveyance based on an implied or constructive trust must perforce prescribe in ten years and not otherwise. A long line of decisions of this Court, and of very recent vintage at that, illustrates this rule. Undoubtedly, it is now well-settled that an action for reconveyance based on an implied or constructive trust prescribes in ten years from the issuance of the Torrens title over the property.

It has also been ruled that the ten-year prescriptive period begins to run from the date of registration of the deed or the date of the issuance of the certificate of title over the property,  x x x.

Full Text: Iglesia Filipina Independiente vs. Heirs of Bernardino Taeza G.R. No. 179597, February 03, 2014