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TY v TY these realties in trust for his siblings in case of his demise, Alejandro is charged
ALEJANDRO B. TY, petitioner, vs. SYLVIA S. TY, in her capacity as with the burden of establishing the existence of an implied trust by evidence
Administratrix of described or categorized as "sufficiently strong," "clear and satisfactory," or
the Intestate Estate of Alexander Ty, respondent. "trustworthy." He has miserably failed to discharge that burden.
G.R. No. 165696 April 30, 2008 If only to emphasize and reiterate what the Supreme Court has in the
FACTS: past declared about implied trusts, these case law rulings are worth mentioning
Alexander Ty died and was succeeded by his wife Sylvia and his – As a rule, the burden of proving the existence of a trust is on the party
daughter Krizia. A few months after his death, a petition for the settlement of his asserting its existence, and such proof must be clear and satisfactorily show the
intestate estate was filed. Sylvia, as administratrix, was ordered by the existence of the trust and its elements. While implied trusts may be proved by
California court to distribute his property in the United States. In the oral evidence, the evidence must be trustworthy and received by the courts
Philippines, Sylvia submitted to the intestate Court in Quezon City an inventory with extreme caution and should not be made to rest on loose, equivocal or
of the assets of Alexander’s estate, consisting of shares of stocks and various indefinite declarations. Trustworthy evidence is required because oral evidence
properties (EDSA Property, Meridien, and Wack-Wack). She asked the court to can easily be fabricated.
permit her to sell/mortgage the properties of the estate in order to pay The EDSA Property
additional estate tax as assessed by the BIR. Article 1448 of the Civil Code is clear. If the person to whom the title is
Apparently, this action did not sit well with her father-in-law, conveyed is the child of the one paying the price of the sale, and in this case this
Alejandro, who later filed a complaint for recovery of properties with prayer for is undisputed, NO TRUST IS IMPLIED BY LAW. The law, instead, disputably
preliminary injunction and/or temporary restraining order. In her opposition, presumes a donation in favor of the child.
Sylvia claimed that plaintiff Alejandro had no actual or existing right, which On the question of whether or not petitioner intended a donation, the
entitles him to the writ of preliminary injunction, for the reason that no express CA found that petitioner failed to prove the contrary. This is a factual finding
trust concerning an immovable maybe proved by parole evidence under the which this Court sees no reason the record to reverse. The net effect of all the
law. In addition, Sylvia Ty argued that the claim is barred by laches, and more foregoing is that Sylvia is obliged to collate into the mass of the estate of
than that, that irreparable injury will be suffered by the estate of Alexander Ty Alejandro, in the event of his death, the EDSA property as an advance of
should the injunction be issued. Alexander’s share in the estate of his father, to the extent that petitioner
As to the complaint for recovery of properties, it is asserted by provided a part of its purchase price.
Alejandro that he owns the three properties mentioned above. He said he The Meridien Condominium and the Wack-Wack property.
bought all three properties at different times, and registered them under his Among the facts cited by the CA are the sources of income of Alexander
son’s name with the understanding that they will be held in trust for his Ty who had been working for nine years when he purchased these two
brothers and sisters in the event of his sudden demise. Plaintiff further alleged properties, who had a car care business, and was actively engaged in the
that at the time the properties were purchased, his son was financially business dealings of several family corporations, from which he received
incapable of purchasing said properties. He presented Alexander’s and Sylvia’s emoluments and other benefits.
income tax returns to bolster his claim. Alejandro added that defendant acted in There was no implied trust created because there was no showing that
bad faith in including the subject properties in the inventory of Alexander Ty’s part of the purchase price was paid by petitioner and, on the contrary,
estate, for she was well aware that Alexander was simply holding the said
properties in trust for his siblings. 2. PENALBER v CA
ISSUE: FACTS:
Whether or not a trust, express or implied, was established by Lina Penalber is the mother of Leticia and the mother-in-law of Quirino
Alejandro in favor of his late son and name-sake Alexander Ramos, husband of Leticia. The mother claimed that for many years, she
RULING/RATIO: operated a hardware store in a building she owned. However, the lot upon
No, there was neither express nor implied trust created concerning the which the building stood is owned by Maria Mendoza.
subject properties. An express trust over real property cannot be constituted The mother allowed the spouses to manage the hardware store. When
when nothing in writing was presented to prove it. As for implied trust, since Mendoza put the property up for sale, the mother did not have cash to buy the
Alejandro has erected his case upon Art. 1448 of the Civil Code, a prime example property. She allegedly entered into a verbal agreement with the spouses
of an implied trust, viz.: that it was he who allegedly paid for the purchase price wherein the lot would be bought by the spouses for and in behalf of the mother,
of some of the realties subject of this case, legal title or estate over which he and since the spouses have the better credit standing, they would be made to
allegedly granted or conveyed unto his son, Alexander, for the latter to hold
appear as the buyers so that the title to be issued in their names could be used but the word "trust" is frequently employed to indicate duties, relations, and
by the spouses to secure a loan with which to build a bigger building and responsibilities which are not strictly technical trusts. A person who establishes
expand the business of the mother. a trust is called the trustor; one in whom confidence is reposed is known as the
Pursuant to agreement, the spouses Ramos allegedly entered into a trustee; and the person for whose benefit the trust has been created is referred
contract of sale with Mendoza. Later, the spouses returned the management of to as the beneficiary. There is a fiduciary relation between the trustee and the
the hardware. On the bases of receipts and disbursements, the mother asserted beneficiary (cestui que trust) as regards certain property, real, personal, money
that the land was fully paid out of the funds of the store and if the spouses had or choses in action.
given any amount for the purchase price of the said land, they had already Trusts are either express or implied. Express trusts are created by the
sufficiently reimbursed themselves from the funds of the store. The mother intention of the trustor or of the parties. Implied trusts come into being by
demanded from the spouses the reconveyance of the title to the land but the operation of law. Express trusts are those which are created by the direct and
spouses refused. positive acts of the parties, by some writing or deed, or will, or by words either
The Mother’s Arguments: expressly or impliedly evincing an intention to create a trust. No particular
The spouses were, in reality, mere trustees of the land, thus, they were words are required for the creation of an express trust, it being sufficient that a
under a moral and legal obligation to reconvey title over the said property to trust is clearly intended. However, in accordance with Article 1443 of the Civil
her. Code, when an express trust concerns an immovable property or any interest
She calls attention to the fact that the spouses could not account for the therein, the same may not be proved by parol or oral evidence.
P116,946.15 difference in the beginning inventory and the second inventory of From the allegations of the the mother, the alleged verbal trust
the stocks of the hardware store. As the spouses never denied the existence of agreement is in the nature of an express trust as the mother explicitly agreed to
the said amount, the mother contends that they have the burden of proving allow the spouses to acquire title to the property in their names, but to hold the
where this amount had gone, and their failure to discharge such burden, the same property for the mother’s benefit. The mother’s allegations as to the
only conclusion would be that they did use the amount to purchase the property existence of an express trust agreement with the spouses, supported only by her
– making such property held merely in trust by the spouses for the mother. testimonies, do not hold water.
The mother also alleges that based on the verbal agreement between The resulting difference of P116,946.15 in the beginning inventory of
her and the spouses, a valid and enforceable trust agreement was created, and the stocks of the hardware store (before management was transferred to the
such was clearly intended by the parties. spouses) and the second inventory (after management was returned to the
The Spouses’Arguments mother), by itself, is not conclusive proof that the said amount was used to pay
The spouses contended that they were given not only the management, the purchase price of the property, such as would make it the property of the
but also the full ownership of the hardware store by the the mother, on the mother held merely in trust by respondent spouses Ramos. The fact that the
condition that the stocks and merchandise of the store will be inventoried, and spouses never denied the P116,946.15 difference, or that they failed to present
out of the proceeds of the sales, the spouses shall pay the mother’s outstanding proof that they indeed used the said amount to pay the other obligations of the
liabilities. According to the spouses, they bought the property from Mendoza mother is not sufficient to discharge the mother’s burden to prove the existence
out of their own funds. of the alleged express trust agreement
The spouses also said that given that the alleged trust concerns an
immovable property, it is unenforceable since the agreement was made verbally 13. DBP v COA
and no parol evidence may be admitted to prove the existence of an express FACTS:
trust concerning an immovable property or any interest therein. DBP adopted Resolution No. 794 creating the DBP Gratuity Plan and
ISSUE: authorizing the setting up of a retirement fund to cover the benefits due to DBP
(1) whether the existence of a trust agreement between her and respondent retiring officials and employees under Commonwealth Act No. 186, as amended.
spouses Ramos was clearly established. A Trust Indenture was entered into by and between the DBP and the Board of
(2) whether such trust agreement was valid and enforceable. Trustees of the Gratuity Plan Fund, vesting in the latter the control and
HELD: administration of the Fund.
(1) No. The Bank established a Special Loan Program availed thru the facilities
(2) No. of the DBP Provident Fund and funded by placements from the Gratuity Plan
RATIO: Fund as “part of the benefit program of the Bank to provide financial assistance
A trust is defined as the right, enforceable solely in equity, to the to qualified members to enhance and protect the value of their gratuity
beneficial enjoyment of property, the legal title to which is vested in another,
benefits”. exclusive benefit of the employees.
Under it, a prospective retiree is allowed the option to utilize in the Resolution No. 794 shows that DBP intended to establish a trust fund to
form of a loan a portion of his “outstanding equity” in the gratuity fund and to cover the retirement benefits of certain employees under Republic Act No.
invest it in a profitable investment or undertaking. The earnings of the 1616. The principal and income of the Fund would be separate and distinct
investment shall then be applied to pay for the interest due on the gratuity loan. from the funds of DBP.
The excess or balance of the interest earnings shall then be distributed to the In a trust, one person has an equitable ownership in the property while
investor-members. another person owns the legal title to such property, the equitable ownership of
The payments were disallowed by the Auditor under Audit Observation the former entitling him to the performance of certain duties and the exercise of
Memorandum No. 93-2 on the ground that the distribution of income of the certain powers by the latter. A person who establishes a trust is the trustor. One
Gratuity Plan Fund (GPF) to future retirees of DBP is irregular and constituted in whom confidence is reposed as regards property for the benefit of another is
the use of public funds for private purposes which is specifically proscribed the trustee. The person for whose benefit the trust is created is the beneficiary.
under Section 4 of P.D. 1445. In the present case, DBP, as the trustor, vested in the trustees of the
Apart from requiring the recipients to refund their dividends, the Fund legal title over the Fund as well as control over the investment of the
Auditor recommended that the DBP record in its books as miscellaneous money and assets of the Fund. The powers and duties granted to the trustees of
income the income of the Gratuity Plan Fund (“Fund”). The Auditor reasoned the Fund under the Agreement were plainly more than just administrative
that “the Fund is still owned by the Bank, the Board of Trustees is a mere Clearly, the trustees received and collected any income and profit
administrator of the Fund in the same way that the Trust Services Department derived from the Fund, and they maintained separate books of account for this
where the fund was invested was a mere investor and neither can the purpose. The principal and income of the Fund will not revert to DBP even if the
employees, who have still an inchoate interest [i]n the Fund be considered as trust is subsequently modified or terminated. The Agreement states that the
rightful owner of the Fund. principal and income must be used to satisfy all of the liabilities to the
Former DBP Chairman Alfredo C. Antonio requested then COA beneficiary officials and employees under the Gratuity Plan.
Chairman Celso D. Gangan to reconsider AOM No. 93-2. It was denied by the Also as COA correctly observed, the right of the employees to claim
COA. their gratuities from the Fund is still inchoate. RA 1616, does not allow
Hence, this petition. employees to receive their gratuities until they retire. However, this does not
ISSUE: invalidate the trust created by DBP or the concomitant transfer of legal title to
Whether or not the trustees of the Fund are merely the trustees.
administrators./Whether or not the fund is the subject of a trust.
HELD:
The DBP counters that the Fund is the subject of a trust, and that the
Agreement transferred legal title over the Fund to the trustees. The income of
the Fund does not accrue to DBP. Thus, such income should not be recorded in
DBP’s books of account.
A trust is a “fiduciary relationship with respect to property which
involves the existence of equitable duties imposed upon the holder of the title to
the property to deal with it for the benefit of another.” A trust is either express
or implied. Express trusts are those which the direct and positive acts of the
parties create, by some writing or deed, or will, or by words evincing an
intention to create a trust.
In the present case, the DBP Board of Governors’ (now Board of
Directors) Resolution No. 794 and the Agreement executed by former DBP
Chairman Rafael Sison and the trustees of the Plan created an express trust,
specifically, an employees’ trust. An employees’ trust is a trust maintained by an
employer to provide retirement, pension or other benefits to its employees. It is
a separate taxable entity.
Employees’ trusts are also exempted from certain taxes under Section
60 (B) of the National Internal Revenue Code, as amended. established for the
6. CANEZO v ROJAS interest in property. Trustworthy evidence is required in here.
FACTS Express trust and resulting trust – trustee cannot acquire by
Soledad Canezo filed a complaint for the recovery of real property plus prescription a property entrusted to him unless he repudiates a trust. This is
damages against Conception Rojas (2nd wife of her father). Canezo alleged that because, in an express trust, the possession of a trustee is not adverse,
she bought the said land from Crisogono Limpiado although the transaction was therefore, he does not acquire by prescription the property. The burden of
not in writing. Then she entrusted it to her father when she and her husband proving the existence of trust is on the party asserting it.
had to go mindanao. The father took possession of the said land and then one In this case, canezo failed to provide clear and satisfactorily proof of its
day canezo found out that Rojas was in possession of the said land and the tax existence. Elements: (1) trustor who executes the instrument creating the trust;
declarations were under his father’s name. (2) a trustee who is the person expressly designated to carry out the trust; (3)
Rojas contends that her husband (father of canezo) bought the land the trust res consisting of duly identified and definite real property; and (4)
from the same seller. The father took possession and cultivated it. Canezo has beneficiaries whose identity must be clear.
knowledge of it because it was included in the estate of the father (father died) Canezo’s only evidence was her self-serving testimony of the
and canezo did not protest meaning she abandoned her right assuming canezo’s petitioner. Express trust may not be established by parol evidence. One
contentions were true. Canezo is barred by laches and estoppel. exception – when there was a clear intention of such. However, it cannot be
MTC was in favor of canezo. Rojas appealed to RTC, decision was inferred from canezo’s testimoney and the attendant facts and circumstances.
reversed because action has not yet prescribed because it is a trust. Canezo filed What they agreed is to give canezo a share of the copra in land. What
a motion for reconsideration, RTC reversed again the decision (in favor of distinguishes a trust from other relations is the separation of
canezo). Rojas filed a motion to reconsider the decision but denied by RTC. legal title and equitable ownership of the property. Legal title is vested in the
Rojas then filed a petition for review with CA – reversed the decision of RTC fiduciary and equitable ownership to cestui que trust and this is not true in the
(ground is laches and prescription). Hence, this petition. case.
ISSUE In addition, the father’s uninterrupted possession for 49 years coupled
W/N there was a trust with the acts of ownership, such payment of real estate taxes, ripened
HELD ownership. Tax declarations are not conclusive evidence but if coupled with
No trust! actual possession, then it will have great weight.
RATIO On the other hand, Constructive trust is one created not by any word,
Procedural issue: Canezo contends that the court should not have either expressly or impliedly, evincing a direct intention to create trust, but one
granted the motion for extension of time to file. The court said, the grant or which arises in order to satisfy the demands of justice. There is neither a
denial of a motion fro extension of time is addressed to the sound discretion of promise nor any fiduciary relation to speak of, no one accepts any trust nor
the court and there was a reasonable basis for the said extension. tends holding the property for a beneficiary. In here, after the death of the
Second issue: W/N there was a trust. Trust is a legal relationship father, rojas has no right to retain possession of the property. At such point, a
between one person having an equitable ownership of property and another constructive trust would be created over the property by operation of law.
person owning the legal title to such property, the equitable ownership of the Constructive trust may be supervened by prescription if the trustee
former entitling him to the performance of certain duties and exercise of certain does
powers by the latter. Trusts are either express or implied. not repudiate the relationship.
Express trust are those which are created by the direct and positive In addition, canezo is estopped because of her failure to protest its
acts of the parties by some writing or deed, or will, or by words evidencing and inclusion in the estate of the father. She was also barred by laches
intention to create a trust. because
Implied trusts are those which, without being expressed, are deducible when she discovered it, it took her 17 years to file an action about it. Finally, the
from the nature of the transaction as matters of intent or, independently, of the complaint must be dismissed because the indispensable parties (other
particular intention of the parties, as being superinduced ont eh transaction by heirs)
operation of law basically by reason of equity. It can be either resulting trust or were not included. It is to recover ownership thus it was in the nature of an
constructive trust. action for reconveyance, therefore, owners of property over which
Resulting trust is presumed always to have been contemplated. The reconveyance is asserted are indispensable parties.
intention as to which can be found in the nature of their transaction altough not
expressed in a deed or instrument. Based on the equitable doctrine that it is the
more valuable consideration than the legal title that determines the equitable
587 SCRA 417 (2009) title to which is vested in another. It may either be express or implied. An
DOCTRINE express trust is created by direct and positive acts of the parties, by some
If a trust relationship has been created between the parties whether writing or deed or will. No particular words are required for the creation of an
expressly or express trust it being sufficient that a trust is clearly intended (Article 144, Civil
impliedly, prescription does not run until the said trust is repudiated. Code). An implied trust comes into being by operation of law.
FACTS The Affidavit of Emilio which is genuine and authentic beyond cavil is
The case involved a parcel of Friar Land with an area of 13,308 square in the nature of an express trust. In said affidavit, Emilio confirmed that Lot
meters known at Cebu City which was purchased from the Bureau of Lands way 1054 bought in his name was co-owned by him as one of the heirs of Jose, and
back on 1919 by Emilio in his own behalf and on behalf of his brothers and his uncle Lino. And by agreement, each of them has been in possession of half of
sisters who were the heirs of Jose. (Collectively known as Heirs of Jose) the property as corroborated by the subdivision plan prepared by Engineer
The money that was used to purchase the land came from both Emilio Bunag and approved by the Bureau of Lands. As such prescription and laches
and their Uncle Lino so after full payment of the purchase price but prior to the will run only if it is shown that: (a) the trustee has performed unequivocal acts
issuance of the deed of conveyance by the Bureau of Lands, Emilio executed an of repudiation amounting to an ouster of the beneficiary; (b) such positive acts
Affidavit in Spanish dated on 1923 affirming that he, as one of the heirs of Jose of repudiation have been made known to the beneficiary, and (c) the evidence
and his Uncle Lino then co-owned the lot. Thereafter or on 1924 the Bureau of thereon is clear and conclusive.
Lands executed the Deed of Conveyance in favor of Emilio and his siblings, or Jose’s heirs cannot rely on the fact that the Torrens title was issued in
the heirs of Jose by virtue of which a TCT was issued by the Register of Deeds. their names. Trustees who obtain a Torrens title over a property held in trust by
On 1928, the lot was subdivided by Deputy Land Surveyor, Engineer them for another cannot repudiate the trust by relying on the registration. The
Bunag into two (2) equal parts with an area of 6,664 square meters for Lino and only act that can be construed as repudiation was when one of Jose’s heirs filed
an area of 6,664 square meters for Emilio and the other heirs of Jose. This was the petition for reconstitution in October 1993. And since Lino’s heirs filed their
approved by the Director of Lands on 1928. complaint in January 1995 their cause of action has not yet prescribed.
On 1939, the heirs of Lino purchased the share of the lot of the heirs of
Jose as evidenced by the Calig-onan sa Panagpalit executed by the parties in Neither can laches be attributed to them. Laches cannot be used to
Visayan dialect. So the heirs of Lino immediately took possession of the entire defeat justice or perpetuate fraud and injustice. Neither should it be applied to
13,308 sqm lot. prevent rightful owners of a property from recovering what has been
When World War II broke out however, Lino’s heirs fled the city. When fraudulently registered in the name of another.
they came back after the war, they found their homes and possessions and the However with respect to the other half covered by the private Caligonan
records in the government offices burned and destroyed with squatters sa Pagpapalit, the heirs of Lino should have filed an action to compel Jose’s
occupying their entire property. heirs to execute a public deed of sale. Since this document was executed on
Lino’s heirs subsequently learned that one of the heirs of Jose filed a October 18, 1939, such action has already prescribed because actions upon
petition for reconstitution of title over the Lot on September 17, 1993. So in written contract must be filed within 10 years only. So only one-half can be
October 1993 they opposed the said petition but later on withdrew the same on recovered by Lino’s heirs or 6,664 sqm shall be retained by Jose’s heirs.
the basis of a compromise agreement they entered with the heirs of Jose to
expedite the reconstitution of title. So on December 14, 1994, the Register of
Deed issued the reconstituted Title in the names of the heirs of Jose.
The heirs of Jose however did not honor the compromise agreement. So
on January 13, 1995, the heirs of Lino filed a complaint for annulment of title,
re-conveyance of property with damages. Jose’s heirs however said that the
action of Lino’s heirs had long prescribed or barred by laches.
ISSUE
a) WON Lino’s heirs had long prescribed or barred by laches.
b) How Express Trusts are created.
HELD / RATIO
a)No. The rules on prescription and the principle of laches cannot be
applied here because of the existence of a trust relationship.
b) Trust is the right to the beneficial enjoyment of property, the legal
1. RAMOS v RAMOS Jose to inform him that there was a card issued to them regarding the survey
FACTS: and gave him 'a free hand to do something as an administrator'. They therefore
Spouses Martin Ramos and Candida Tanate died and were survived by did not intervene in the said cadastral proceedings because they were promised
their three legitimate children named Jose, Agustin and Granada. Martin Ramos that they (defendants Jose and Agustin) would 'be the ones responsible to have
was also survived by his seven natural children named Atanacia, Timoteo, it registered in the names of the heirs'. Plaintiffs did not file and cadastral
Modesto, Manuel, Emiliano, Maria and Federico. answer because defendants Jose and Agustin told them 'not to worry about it as
Martin Ramos left considerable real estate, the most valuable of which they have to answer for all the heirs'. Plaintiffs were 'assured' by defendants
were the Hacienda Calaza and Hacienda Ylaya, both located in Himamaylay, brothers.
Negros Occidental. Hacienda Calaza consists of sugar land, palay land and nipa Plaintiffs did not know that intestate proceedings were instituted for
groves with an area of 400 hectares and with a sugar quota allotment of 10,000 the distribution of the estate of their father. Neither did plaintiffs Modesto,
piculs, more or less, and having as its present actual value P500,000 more or Manuel, Emiliano and Maria know that Timoteo Zayco, their uncle and
less. brotherin-
All the children of Martin Ramos, whether legitimate or acknowledged law of defendant widow Gregoria was appointed their guardian. They never
natural, lived together in Hacienda Ylaya during his lifetime and were under his received any sum of money in cash — the alleged insignificant sum of P1,785.35
care. All said children continued to live in said house of their father for years each — from said alleged guardian as their supposed share in the estate of their
even after his death. father under any alleged project of partition.
Upon their father's death, his properties were left under the Neither did Atanacia Ramos nor her husband, Nestor Olmedo, sign any
administration of Rafael Ramos, the younger brother of their father and their project of partition or any receipt of share inthe inheritance of Martin Ramos in
uncle, Rafael Ramos continued to administer those properties of their father, cash. Nestor Olmedo did not sign any receipt allegedly containing the signatures
giving plaintiffs money as their shares of the produce of said properties but of Atanacia assisted by himself as husband, Timoteo Ramos, and Timoteo Zayco
plaintiffs not receiving any property or piece of land however, until 1913 when as guardian ad-litem of the minors Modesto, Manual, Federico, Emiliano and
Rafael Ramos gathered all the heirs, including plaintiffs, in the house of their Maria. As a matter of fact, plaintiffs Modesto and Manuel were in 1913 no longer
father, saying he would return the administration of the properties. He turned minors at the time of the alleged project of partition of the estate being
over Hacienda Ylaya to Agustin Ramos and Hacienda Calaza to Jose Ramos. approved, both being of age at that time. No guardian could in law act on their
All said children, defendants and plaintiffs alike, continued to live in the behalf.
same house of their father in Hacienda Ylaya, now under the support of Agustin Plaintiffs only discovered later on that the property administered by
Ramos. Agustin Ramos supported plaintiffs, getting the money from the produce their elder brother Jose had a Torrens Title in the name of his widow, Gregoria,
of Hacienda Ylaya, the only source of income of Agustin coming from said and daughter, Candida, when plaintiff Modesto's children insisted and inquired
hacienda. Plaintiffs asked money from Agustin pertaining to their share in the from the Register of Deeds sometime in 1956 or 1957. Plaintiffs did not
produce of Hacienda Ylaya and received varied amounts, sometimes around intervene in the intestate proceedings for the settlement of the estate of their
P50 at a time, getting more when needed, and receiving P90 or P100 more or brother Jose as they did not know of it.
less a year. Plaintiffs were thus constrained to bring the present suit before the
Jose Ramos gave plaintiffs also money as their shares from the products Court of First Instance of Negros Occidental seeking for the reconveyance in
of Hacienda Calaza. their favor by defendants Gregoria and daughter Candida and husband Jose
Upon the death of Jose Ramos his widow Gregoria Ramos, herself, his Bayot of their corresponding participations in said parcels of land in accordance
first cousin, their father and mother, respectively being brother and sister, with article 840 of the old Civil Code.
continued to give plaintiffs money pertaining to their shares in the products of ISSUE:
Hacienda Calaza. She however stopped doing so in 1951, telling them that the W/N plaintiffs' shares were held in trust by the defendants.
lessee Estanislao Lacson was not able to pay the lease rental. HELD:
There was never any accounting made to plaintiffs by Jose Ramos, NO. The plaintiffs did not prove any express trust in this case. The
plaintiffs reposing confidence in their elder brother, nor was any accounting expediente of the intestate proceeding, particularly the project of partition, the
made by his widow, defendant Gregoria Ramos, upon his death, plaintiff Manuel decision and the manifestation as to the receipt of negatives the existence of an
Ramos moreover having confidence in her. express trust. Those public documents prove that the estate of Martin Ramos
Before the survey of these properties by the Cadastral Court, plaintiff was settled in that proceeding and that adjudications were made to his seven
Modesto Ramos was informed by the Surveying Department that they were natural children. A trust must be proven by clear, satisfactory, and convincing
going to survey these properties. Plaintiffs then went to see their elder brother evidence. It cannot rest on vague and uncertain evidence or on loose, equivocal
or indefinite declarations (De Leon vs. Peckson, 62 O. G. 994). As already noted, "A resulting trust is broadly defined as a trust which is raised or
an express trust cannot be proven by parol evidence(Pascual vs. Meneses, L- created by the act or construction of law, but in its more restricted sense it is a
18838, May 25, 1967, 20 SCRA 219, 228; Cuaycong vs. Cuaycong, L-21616, trust raised by implication of law and presumed always to have been
December 11, 1967, 21 SCRA 1192). contemplated by the parties, the intention as to which is to be found in the
Neither have the plaintiffs specified the kind of implied trust nature of their transaction, but not expressed in the deed or instrument of
contemplated in their action. We have stated that whether it is a resulting or conveyance" (89 C.J.S. 725). Examples of resulting trusts are found in article
constructive trust, its enforcement may be barred by laches. 1448 to 1455 of the Civil Code. See Padilla vs. Court of Appeals, L-31569,
In the cadastral proceedings, which supervened after the closure of the September 28, 1973, 53 SCRA 168,179).
intestate proceeding, the eight lots involved herein were claimed by the spouses On the other hand, a constructive trust is a trust "raised by construction
Jose Ramos and Gregoria T. Ramos to the exclusion of the plaintiffs. After the of law, or arising by operation of law". In a more restricted sense and as contra
death of Jose Ramos, the said lots were adjudicated to his widow and daughter. distinguished from a resulting trust, a constructive trust is "a trust not created
In 1932 Gregoria T. Ramos and Candida Ramos leased the said lots to Felix Yulo. by any words, either expressly or impliedly evincing a direct intention to create
Yulo in 1934 transferred his lease rights over Hacienda Calazato Juan S. Bonin a trust, but by the construction of equity in order to satisfy the demands of
and Nestor Olmedo, the husband of plaintiff Atanacia Ramos. Bonin and Olmedo justice. It does not arise by agreement or intention but by operation of law." (89
in 1935 sold their lease rights over Hacienda Calaza to Jesus S. Consing. Those C.J.S. 7260727). "If a person obtains legal title to property by fraud or
transactions prove that the heirs of Jose Ramos had repudiated concealment, courts of equity will impress upon the title a so-called
any trust which was supposedly constituted over Hacienda Calaza in favor of constructive trust in favor of the defrauded party." A constructive trust is not a
the plaintiffs. trust in the technical sense(Gayondato vs. Treasurer of the P.I., 49 Phil. 244; See
*DOCTRINES CITED Art. 1456, Civil Code).
"In its technical legal sense, a trust is defined as the right, enforceable There is a rule that a trustee cannot acquire by prescription the
solely in equity, to the beneficial enjoyment of property, the legal title to which ownership of property entrusted to him (Palma vs. Cristobal, 77 Phil. 712), or
is vested in another, but the words 'trust' is frequently employed to indicate that an action to compel a trustee to convey property registered in his name in
duties, relations, and responsibilities which are not strictly technical trusts." (89 trust for the benefit of the cestui qui trust does not prescribed (Manalang vs.
C.J.S. 712). Canlas, 94 Phil. 776; Cristobal vs. Gomez, 50 Phil. 810), or that the defense of
"A person who establishes a trust is called the trust or; one in whom prescription cannot be set up in an action to recover property held by a person
confidence is reposed is known as the trustee; and the person for whose benefit in trust for the benefit of another(Sevilla vs. De los Angeles, 97 Phil. 875), or that
the trust has been created is referred to as the beneficiary" (Art. 1440, Civil property held in trust can be recovered by the beneficiary regardless of the
Code). There is a fiduciary relation between the trustee and the cestui que trust lapse of time (Marabilles vs. Quito, 100 Phil. 64; Bancairen vs. Diones, 98 Phil.
as regards certain property, real, personal, money or choses inaction (Pacheco 122, 126 Juan vs. Zuniga, 62 O.g. 1351; 4 SCRA 1221; Jacinto, L-17957, May 31,
vs. Arro, 85 Phil. 505). 1962. See Tamayo vs. Callejo, 147 Phil. 31, 37).
"Trusts are either express or implied. Express trusts are created by the That rule applies squarely to express trusts. The basis of the rule is that
intention of the trust or of the parties. Implied trusts come into being by the possession of a trustee is not adverse. Not being adverse, he does not
operation of law." (Art. 1144, Civil Code). "No express trusts concerning an acquire by prescription the property held in trust. Thus, section 38 of Act 190
immovable or any interest therein may be proven by oral evidence. An implied provides that the law of prescription does not apply "in the case of a continuing
trust may be proven by oral evidence" (Ibid, Arts. 1443 and 1457). and subsisting trust" (Diaz vs. Gorricho and Aguado, 103 Phil. 261,266; Laguna
"No particular words are required for the creation of an express trust, it vs. Levantino, 71 Phil. 566; Sumira vs. Vistan, 74 Phil. 138; Golfeo vs. Court of
being sufficient that a trust is clearly intended" (Ibid, Art. 1444; Tuason de Appeals, 63 O.G. 4895, 12 SCRA 199; Caladiao vs. Santos, 63 O.G. 1956, 10 SCRA
Perez vs. Caluag, 96 Phil. 981; Julio vs. Dalandan, L-19012, October 30, 1967, 21 691).
SCRA 543, 546). "Express trusts are those which are created by the direct and The rule of imprescriptibility of the action to recover property held in
positive acts of the parties, by some writing or deed, or will, or by words either trust may possibly apply to resulting trusts as long as the trustee has not
expressly or impliedly evincing an intention to create a trust" (89 C.J.S. 722). repudiated the trust (Heirs of Candelaria vs. Romero, 109 Phil. 500, 502-3;
"Implied trust are those which, without being expressed, are deducible Martinez vs. Grano, 42 Phil. 35; Buencamino vs. Matias, 63 O. G. 11033, 16 SCRA
from the nature of the transaction as matters of intent, or which are super 849).
induced on the transaction by operation of law as matters of equity, The rule of imprescriptibility was misapplied to constructive trusts
independently of the particular intention of the parties" (89 C.J.S. 724). They are (Geronimo and Isidoro vs. Nava and Aquino, 105 Phil. 145, 153. Compare with
ordinarily subdivided into resulting and constructive trusts (89 C.J.S. 722). Cuison vs. Fernandez and Bengzon, 105 Phil. 135, 139; De Pasion vs. De Pasion,
112 Phil. 403, 407). Acquisitive prescription may bar the action of the disputed properties were cancelled and new ones issued in the names of
beneficiary against respondents.
the trustee in an express trust for the recovery of the property held in trust Enrique Lopez, also assumed the trusteeship of Juliana’s estate. On
where (a) the trustee has performed unequivocal acts of repudiation amounting 1984, the RTC appointed petitioner Richard Lopez as trustee of Juliana’s estate.
to an ouster of the cestui qui trust; (b) such positive acts of repudiation have Thereafter, petitioner instituted an action for reconveyance of parcels of land
been made known to the cestui qui trust and(c) the evidence thereon is clear with sum of money before the RTC against respondents. The complaint
and conclusive (Laguna vs. Levantino, supra; Salinas vs. Tuason, 55 Phil. 729. essentially alleged that Jose (the husband) was able to register in his name the
Compare with the rule regarding co-owners found in the last paragraph of disputed properties, which were the paraphernal properties of Juliana, either
article 494, Civil Code; Casanas vs. Rosello, 50 Phil. 97; Gerona vs. De Guzman, L- during their conjugal union or in the course of the performance of his duties as
19060, May 29, 1964, 11 SCRA 153,157). executor of the testate estate of Juliana and that upon the death of Jose, the
With respect to constructive trusts, the rule is different. The disputed properties were included in the inventory as if they formed part of
prescriptibility of an action for reconveyance based on constructive trust is now Jose’s estate when in fact Jose was holding them only in trust for the trust estate
settled (Alzona vs. Capunitan, L-10228, February 28, 1962, 4 SCRA 450; Gerona of Juliana.
vs. De Guzman, supra; Claridad vs. Henares, 97 Phil. 973; Gonzales vs. Jimenez, The RTC rendered a summary judgment, dismissing the action on the
L-19073, January 30, 1965, 13 SCRA 80; Bonaga vs. Soler, 112 Phil. 651; J. M. ground of prescription of action. The Court of Appeals rendered the assailed
Tuason & Co., vs. Magdangal, L-15539, January 30, 1962, 4 SCRA 84). decision denying the appeals filed by both petitioner and respondents. In
Prescription may supervene in an implied trust (Bueno vs. Reyes, L-22587, addition, the CA held that the petitioner's action for reconveyance has
April 28, 1969, 27 SCRA 1179; Fabian vs. Fabian, L-20449, January 29, 1968; prescribed and that the fiduciary relation assumed by the late Jose was an
Jacinto vs. Jacinto, L-17957, May 31, 1962, 5 SCRA 371). Implied Trust.
And whether the trust is resulting or constructive, its enforcement may ISSUE
be barred by laches (90 C.J.S. 887-889; 54 Am Jur. 449-450; Diaz vs. Gorricho a) WON an implied trust was constituted over the disputed properties
and Aguado, supra. Compare with Mejia vs. Gampona, 100 Phil. 277). when Jose, the trustee, registered them in his name.
b) WON petitioner’s action for reconveyance has prescribed.
HELD
The disputed properties were the paraphernal properties of Juliana
LOPEZ v CA which should have been included in the Fideicomiso, their registration in the
574 SCRA 26 (2008) name of Jose was erroneous and Jose’s possession is that of a trustee in an
FACTS implied trust. trusts are those which, without being expressed, are deducible
The decedent, Juliana, was married to Jose (Jose). Their union did not from the nature of the transaction as matters of intent or which are
bear any children. Juliana was the owner of several properties, which are the superinduced on the transaction by operation of law as matters of equity,
subject of this dispute. independently of the particular intention of the parties.
On 1968, Juliana executed a notarial will, whereby she expressed that The Court differentiated two kinds of implied trusts. Implied trusts are
she wished to constitute a trust fund for her paraphernal properties, either resulting or constructive trusts. These two are differentiated from each
denominated as Fideicomiso de Juliana Lopez Manzano (Fideicomiso), to be other as follows:
administered by her husband Jose. If her husband were to die or renounce the DOCTRINE: Resulting trusts are based on the equitable doctrine that
obligation, her nephew, Enrique Lopez (Petioner's father), was to become valuable consideration and not legal title determines the equitable title or
administrator and executor of the Fideicomiso. interest
Note: Fideicomiso- Arrangement by which the testator left his estate or part and are presumed always to have been contemplated by the parties. They
of it arise
to the good faith of someone so that, in certain case and time, transmit it to from the nature of circumstances of the consideration involved in a
another person or invest it in the way that was pointed out by the testator. transaction
Paraphernal properties- Exclusive properties of the wife. whereby one person thereby becomes invested with legal title but is
Jose died on 1980, leaving a holographic will disposing of the disputed obligated in
properties to respondents. The will was allowed probate on 1983. Pursuant to equity to hold his legal title for the benefit of another. On the other hand,
Jose’s will, the RTC ordered the transfer of the disputed properties to the Constructive trusts are created by the construction of equity in order to
respondents as the heirs of Jose. Consequently, the certificates of title of the satisfy
the demands of justice and prevent unjust enrichment. They arise contrary to registered it under their names, it became cadastral lot no. 544 of Hermosa
intention against one who, by fraud, duress or abuse of confidence, obtains Cadastre – it adjoins the Calunuran fishpond. Juan and valentin died. Valentin
or has two daughters – Benita and Victorina. Valentin’s estate consisted of 2
holds the legal right to property which he ought not, in equity and good fishponds inherited from Valentina.
conscience, to hold. Ambrosia donated to Benita 3 lots and a deed of donation was signed. It
The apparent mistake in the adjudication of the disputed was only after Abrosia’s death benita filed an action for reconveyance of the
properties to Jose created a mere implied trust of the constructive caluran fishpond which was allegedly held in trust and which had become the
variety sole property of Juani (son of juan).
in favor of the beneficiaries of the Fideicomiso. Before ambrosia’s death, she donated ½ share of the fishpond to Juani.
However, the right to seek reconveyance based on an implied or Benita and children of victorina contends that they had a 1/3 share in the 2
constructive trust is not absolute. It is subject to extinctive prescription. An fishponds that Juani took possession. Juani refused to give Benita and children
action for reconveyance based on implied or constructive trust prescribes in 10 their respective shares. Juani then contends that the fishponds were only
years. This period is reckoned from the date of the issuance of the original owned by Juan and ambrosia - Valentin has no interest on the said fishpond.
certificate of title or transfer certificate of title. Since such issuance operates as Benita and children filed for an annulment of the donation to Juani and
a constructive notice to the whole world, the discovery of the fraud is deemed to reconveyance to them. But as a defense of juani, he pleaded the indefeasibility of
have taken place at that time. the Torrens title secured by Juan and ambrosia and prescription and laches.
The ten-year prescriptive period to recover the disputed property must Juani died and substituted by his wife (pascual) and children. The court ruled
be counted from its registration in the name of Jose on 15 September 1969, that there was no co-ownership and the said fishpond was properly donated to
when petitioner was charged with constructive notice that Jose adjudicated the Juani. In addition, the parties involved in the alleged trust were dead.
disputed properties to himself as the sole heir of Juana and not as trustee of the ISSUE:
Fideicomiso. Jose had indicated that the disputed properties were conjugal in W/N the fishfpond was held in trust for Valentin by Juan and Ambrosia
nature and, thus, excluded from Juliana’s Fideicomiso. This act is clearly and W/N their action for reconveyance had already prescribed.
tantamount to repudiating the trust, at which point the period for prescription HELD:
is reckoned. No! And if ever there was a trust, action has already prescribed.
b) The petitioner's action for reconveyance has clearly already RATIO:
prescribed when he filed said actions on 1984 or fifteen (15) years later. Trust is the right enforceable solely in equity, to the beneficial
Petition denied. enjoymnet of the property – indicate duties, relations, and responsibilities. It
can be either express or implied. No express trust concerning an immovable or
5. SALAO v SALAO any interest therin may be proven by parol evidence. It is created by writing or
FACTS: deed or will. Resulting trust is created by the act or construction of law.
Manuel Salao and Valentina Ignacio has four children – Patricio, Constructive trust arise by operation of law. Trust must be proven by clear,
Alejandra, Juan and Ambrosia. Manuel Salao and Patricio died. No documentary satisfactory and convincing evidence.
evidence as to what properties formed part of Manuel Salao’s estate. Valentina No documentary evidence was presented by benita and children to
also died and her estate was administered by Ambrosia. Patricio died and being prove that there was an express trust over the calunuran fishpond in favor of
represented by Valentin (his son). Therefore, the estate will be divided to valentin. Purely parol evidence was offered. There was also no resulting trust
Valentin, Alejandra, Juan and Ambrosia. Valentina left a lot of properties and because there were never was any intention on the part of Juan, ambrosia and
the distributive share of each was P8,135 but Valentin got more than the said valentin to create any trust. No constructive trust because the consent of juan
amount so he was forced to pay his coheirs the difference. and ambrosia wan not vitiated by fraud or mistake.
Before Valentina died, Juan and Ambrosia secured a torrens title in And assuming there is implied trust, it was already barred by
their name 47ha of fishpond in Calunaran, Pampanga which is also known as prescription (10 yrs supposedly but filed after 40 yrs from the date of
Lot 540 of Hermosa cadastre and exercised dominical rights over it to the registration) and laches. The court said that there was no community of
exclusion of Valentin. It was contended that Juan and Ambrosia used the property during the lifetime of valentina (great grandmother) is substantiated
commond fund to buy the said fishpond but was denied by the other party. The by benita and children’s documentary evidence.
said fishpond was sold under pacto de retro sale to two persons but was The fact that Valentin never bothered for 40 years to procure any
redeemed in due time. documentary evidence to establish his supposed interest in the 2 fishponds is
Juan and Ambrosia also bought a swampland in Lewa, Pampanga and very suggestive of the absence of such interest. Torrens title is generally a
conclusive evidence of the ownership of the land and in order to maintain an Article 1450 presupposes a situation where a person, using his own funds, buys
action for reconveyance, proof as to the fiduciary relation of the parties must be property on behalf of another, who in the meantime may not have the funds to
clear and convincing. purchase it. Title to the property is for the time being placed in the name of the
In addition, benita cannot represent valentin because in the collateral trustee, the person who pays for it, until he is reimbursed by the beneficiary, the
line, representation takes place only in favor of the children of brothers and person for whom the trustee bought the land. It is only after the beneficiary
sisters whether full or half blood and this excludes grand niece like benita. reimburses the trustee of the purchase price that the former can compel
conveyance of the property from the latter.
8. PARUNGIT v BAJIT The circumstances of this case are actually what implied trust is about.
SPS. FELIPE and JOSEFA PARINGIT, Petitioner, vs. MARCIANA Although no express agreement covered Felipe and his wife’s purchase of the lot
PARINGIT BAJIT, for the siblings and their father, it came about by operation of law and is
ADOLIO PARINGIT and ROSARIO PARINGIT ORDOÑO, Respondents. protected by it. The nature of the transaction established the implied trust and
G.R. No. 181844 September 29, 2010 this in turn gave rise to the rights and obligations provided by law. Implied trust
FACTS: is a rule of equity, independent of the particular intention of the parties.
During their lifetime, spouses Paringit leased a lot in Sampaloc, Manila Here, the evidence shows that Felipe and his wife bought the lot for the
from Terocel Realty. They built their home there and raised five children. For benefit of Julian and his children, rather than for themselves. There is no
having occupied the lot for years, Terocel Realty offered to sell it to Julian but he question that the house originally belonged to Julian and Aurelia who built it.
did not have enough money at that time to meet the payment deadline. Julian First, if Julian really intended to sell the entire house and assign the right to
sought the help of his children so he can buy the property but only his son acquire the lot to Felipe and his wife, he would have arranged for Felipe’s other
Felipe and wife Josefa had the financial resources he needed at that time. To siblings to give their conformity as co-owners to such sale. Second, Julian said in
bring about the purchase, Julian executed a deed of assignment of leasehold his affidavit that Felipe and his wife bought the lot from Terocel Realty on his
right in favor of Felipe and his wife that would enable them to acquire the lot. behalf and on behalf of his other children. Felipe and his wife advanced the
The latter then bought the same from Terocel Realty and a TCT was payment because Julian and his other children did not then have the money
subsequently issued in favor of spouses Felipe and Josefa. needed to meet the realty company’s deadline for the purchase. Notably, Felipe,
Later on, due to issues among Julian’s children regarding the ownership acting through his wife, countersigned Julian’s affidavit the way his siblings did.
of the lot, Julian executed an affidavit clarifying the nature of Felipe and his Third, if Felipe and his wife really believed that they were the absolute owners
wife’s purchase of the lot. He claimed that it was bought for the benefit of all his of the lot, then their moving out of the house in 1988 and letting Marciana, et al
children. continue to occupy the house did not make sense. Fourth, Felipe and his wife
Despite the title being under their name, the spouses moved to another demanded rent from Marciana, et al only a year following Julian’s death. This
house on the same street in 1988. Marciana, et al, on the other hand, continued shows that for over 10 years, Felipe and his wife respected the right of the
to occupy the lot with their families without paying rent. This was the situation siblings to reside on the property. This is incompatible with their claim that
when their father died in 1994. A year later, Felipe and his wife sent a demand they bought the house and lot for themselves back in 1984. Until they filed the
letter to his siblings who occupy the lot, asking them to pay rental arrearages suit, they did nothing to assert their supposed ownership of the house and lot.
for occupying the property. They refused to pay or reply to the letter, believing
that they had the right to occupy the house and lot, it being their inheritance 11. SING JUCO AND SING BENGCO v SUNYANTONG
from their parents. Because of this, Felipe and his wife filed an ejectment suit FACTS:
against them. The suit prospered, resulting in the ejectment of Marciana, et al Sing Juco and Sing Bengco obtained from Maria Gay a written option to
and their families from the property. To vindicate what they regarded as their purchase an estate known as "San Antonio Estate". The term of the option
right to the lot and the house, expired, but Sing Juco and Sing Bengco had it extended verbally.
the other children filed the present action against Felipe and his wife for Sunyantong was an employee of Sing Juco and Sing Bengco, and the
annulment of title and reconveyance of property. evidence shows that they reposed confidence in him and did not mind
ISSUE: disclosing to him their plans of purchasing the San Antonio estate and the status
Whether or not Felipe and his wife purchased the subject lot under an of their negotiations with Gay.
implied trust for the benefit of all the children of Julian; In one of the meetings held by Sing Juco and Sing Bengco, Sunyantong
RULING/RATIO: was present. At that time, Sunyantong remarked that it would be advisable to let
Yes, the Court ruled that the case at bar falls under the rubric of the some days elapse before accepting the terms of the transfer as proposed by
implied trust provided in Article 1450 of the Civil Code.Implied trust under
Maria Gay, in order that the Gay might not think that they were desperate for that it has, and indeed no damage could have been caused to the Sing Bengco.
the said property. There is also no proof of Sunyantong having acquired the land in
On the day that Sing Juco and Sing Bengco’s option to purchase was to question in the name or in behalf of Sing Bengco and Sing Juco, or at the request
expire, Sunyantong called at the house of Gay and offered to buy the estate on of the latter, or with funds furnished by them. Said defendants had legal
the terms she proposed, which were not yet accepted by Sing Juco and Sing capacity to buy (art. 1457, Civil Code) and are not within any of the cases
Bengco. Sunyantong offered to buy not for the benefit of Sing Juco and Sing prohibited by article 1459 of the same Code.
Bengco, but for the benefit of his own wife.
Maria Gay informed the broker of Sing Juco and Sing Bengco that there 15. ESCOBAR v LOCSIN
was another interested buyer and that she would like to know immediately Sing G.R. No. L-48309 January 30, 1943
Juco and Sing Bengco’s decision. EUSEBIA ESCOBAR, plaintiff-appellant,
Sing Bengco instructed Sotelo to inform her, "siya ang bahala". RAMON LOCSIN, in his capacity as special administrator of the intestate
Interpreting the phrase to mean that Sing Juco and Sing Bengco waived their estate of
option to buy, Maria Gay closed the sale of the estate in favor of Sunyantong. Juana Ringor,defendant-appellee
Sing Bengco and Sing Juco then filed a case against Sunyantong. The
lower court ordering the Sunyantong to execute a deed of conveyance to Sing FACTS
Bengco and Sing Juco of the San Antonio Estate for the same price and with the The complaint alleges that the plaintiff is the owner of the subject lot;
same conditions as those of the purchase thereof from Maria Gay and that in the course of the cadastral proceedings, plaintiff being illiterate,
ISSUE asked Sumangil to claim the same for her (plaintiff) but Sumangil committed a
W/N Sunyantong must be held liable breach of trust by claiming the lot for himself, so it was adjudicated in favor of
HELD Sumangil. The defendant is the special administrator of the estate of Juana
Yes. Even supposing that Sing Bengco intended to waive all claims to Ringor, to whom the parcel of land in question was assigned by partition in the
the option when he said “bahala ka”, the action of the Sunyantong in intervening intestate estate of Sumangil and Duque.
in the negotiations does not make him innocent of infidelity in view of the fact The CFI found that the plaintiff is the real owner of the lot which she
that he was an employee of the plaintiffs to whom he owed loyalty and had acquired in 1914 by donation propter nuptias from Pablo Ringor; that
faithfulnes. plaintiff had since that year been in possession of the land; and that the same
Despite the fact that when Sunyantong closed the contract of sale with had been decreed in the cadastral proceedings in favor of Domingo Sumangil.
Maria Gay, Sing Juco and Sing Bengco option had expired, it can’t be denied that The trial court, while recognizing that the plaintiff had the equitable title and
he was the cause of the option having precipitously come to such an end. His the defendant the legal title, nevertheless dismissed the complaint because the
disloyalty to his employers was responsible for Maria Gay not accepting the period of one year provided for in section 38 of the Land Registration Act for the
terms proposed by Sing Juco and Sing Bengco, because of being certain of review of a decree had elapsed, and the plaintiff had not availed herself of this
another less exigent buyer. Without such intervention on the part of the remedy.
Sunyantong it is presumed, taking into account all the circumstances of the case, ISSUE
that the sale of the estate in question would have been consummated between Does the possession of legal title preclude the operation of a trust
Maria Gay and Sing Juco and Sing Bengco, perhaps with such advantages to Sing agreement?
Juco and Sing Bengco, as they expected to obtain by prolonging negotiations. HELD
Such an act of infidelity committed by a trusted employee calculated to No
redound to his own benefit and to the detriment of his employers cannot pass RATIO
without legal sanction. He shall be liable for the damage caused The trial court plainly erred. The complaint did not seek the review of
DISSENTING OPINION BY VILLAMOR, J: the decree or the reopening of the cadastral case, but the enforcement of a trust.
Sunyantong is held civilly liable for having purchased the land in Hence, section 38 of Act No. 496 does not apply. The estate of Juana Ringor as
question in behalf of his wife, Vicenta Llorente, with knowledge of the fact that the successor in interest of the trustee, Domingo Sumangil, is in equity bound to
Sing Bengco and Sing Juco, by whom he was employed, were negotiating with execute a deed of conveyance of this lot to the plaintiff-appellant. The remedy
the owner of the land for the purchase of the same. herein prayed for has been upheld by this Court in previous cases, one of which
The liability of Sunyantong should consist in the reparation of the is Severino vs. Severino (44 Phil., 343, year 1923).
damage caused to the Sing Bengco and Sing Juco. Has any damage been proven There is no indication there of an intention to cut off, through the issuance of a
to have arisen from the culpable act of the defendant Sunyantong? I do not think decree of registration, equitable rights or remedies such as those here in
question. On the contrary, section 70 of the Act provides: The RTC found that said 2.5002-hectare lot was erroneously included
Registered lands and ownership therein, shall in all respects be subject to in Antonio’s free patent application which became the basis for the issuance of
the same burdens and incidents attached by law to unregistered land. his OCT. It then ordered the heirs of Antonio (the Paces [represented by Rosalia
Nothing Pace (Rosalia)]) to reconvey said portion to Ciriaco. In so ruling, the RTC
contained in this Act shall in any way be construed to relieve registered land acknowledged Ciriaco’s actual and exclusive possession, cultivation, and claim
or of ownership over the subject lot which he acquired from his father Sesinando,
the owners thereof from any rights incident to the relation of husband and who occupied and improved the lot way back in the early 1950s.7
wife, or The December 27, 1989 ruling then became final but could not be
from liability to attachment on mesne process or levy on execution, or from annotated since the OCT was already cancelld. Apparently, Antonio and his wife
liability to any lien of any description established by law on land and the Rosalia mortgaged Lot 13521 to PNB as security for a series of loans which
buildings Antonio defaulted and PNB foreclosed the mortgage on July 14, 198610 and the
thereon, or the interest of the owner in such land or buildings, or to change title was transferred to PNB.
the Thus, in February 1996, Ciriaco filed the instant complaint against PNB
laws of descent, or the rights of partition between coparceners, joint tenants and the Paces for Declaration of Nullity of Mortgage, Foreclosure Sale,
and Reconveyance and Damages,11 docketed as Civil Case No. 3313 and raffled to
other cotenants, or the right to take the same by eminent domain, or to Branch 18 of RTC, Digos City, Davao del Sur.
relieve In his complaint, Ciriaco averred that Antonio could not validly
such land from liability to be appropriated in any lawful manner for the mortgage the entire Lot 13521 to PNB as a portion thereof consisting of 2.5002
payment hectares belongs to him (Ciriaco), as already held in Civil Case No. 2514. He
of debts, or to change or affect in any other way any other rights or liabilities claimed that PNB is not an innocent mortgagee/purchaser for value because
created by law and applicable to unregistered land, except as otherwise prior to the execution and registration of PNB’s deed of sale with the Register of
expressly Deeds, the bank had prior notice that the disputed lot is subject of a litigation. It
provided in this Act or in the amendments hereof.
would appear that during the pendency of Civil Case No. 2514, a notice of lis
A trust — such as that which was created between the plaintiff and pendens was annotated at the back of OCT No. P-4952 as Entry No. 16554712
Domingo Sumangil — is sacred and inviolable. The Courts have therefore on November 28, 1988.
shielded fiduciary relations against every manner of chicanery or detestable The RTC and CA ruled that Ciriaco is correct and that PNB must
design cloaked by legal technicalities. The Torrens system was never calculated reconvey the land to Ciriaco. Thus PNB filed this case to question the ruling of
to foment betrayal in the performance of a trust. the RTC and CA.
The judgment appealed from is hereby reverse, and the defendant is ISSUE
ordered to convey that lot in question to the plaintiff within fifteen days from Whether or not PNB must reconvey the land to Ciriaco?
the entry of final judgment herein; and upon his failure or refusal to do so, this HELD
judgment shall constitute sufficient authorization for the Register of Deeds of Yes. PNB is not an innocent purchaser/ mortgagee for value. PNB In
Nueva Ecija, in lieu of a deed of conveyance, to transfer the certificate of title for this case is considered a trustee in a constructive trust holding the land in trust
said lot No. 692 to the plaintiff Eusebia Escobar. The defendant shall pay the for Ciriaco. Also, since Ciriaco is in possession of the land, the action based on
costs of both instances. constructive trust is imprecriptible.
Undoubtedly, our land registration statute extends its protection to an
19. PNB v JUMANOY innocent purchaser for value, defined as "one who buys the property of another,
FACTS: without notice that some other person has a right or interest in such property
On December 27, 1989, the RTC, Branch 19, of Digos City, Davao del and pays the full price for the same, at the time of such purchase or before he
Sur, rendered a Decision5 in Civil Case No. 2514 (a case for Reconveyance and has notice of the claims or interest of some other person in the property."25 An
Damages), ordering the exclusion of 2.5002 hectares from Lot 13521. The trial "innocent purchaser for value" includes an innocent lessee, mortgagee, or other
court found that said 2.5002 hectares which is part of Lot 13521, a 13,752- encumbrancer for value .26
square meter parcel of land covered by Original Certificate of Title (OCT) No. P- Here, we agree with the disposition of the RTC and the CA that PNB is
49526 registered in the name of Antonio Go Pace (Antonio) on July 19, 1971 not an innocent purchaser for value. As we have already declared:
actually pertains to Sesinando Jumamoy (Sesinando), Ciriaco’s predecessor- A banking institution is expected to exercise due diligence before
ininterest. entering into a mortgage contract. The ascertainment of the status or condition
of a property offered to it as security for a loan must be a standard and Margarita's son, Roberto Laigo, Jr., applied for a non-immigrant visa to the
indispensable part of its operations.27 (Emphasis ours.) United States, and to support his application, he allegedly asked Margarita to
PNB’s contention that Ciriaco failed to allege in his complaint that PNB transfer the tax declarations of the properties in his name.
failed to take the necessary precautions before accepting the mortgage is of no Margarita, unknown to her other children, executed an Affidavit of
moment. It is undisputed that the 2.5002-hectare portion of the mortgaged Transfer of Real Property whereby the subject properties were transferred by
property has been adjudged in favor of Ciriaco’s predecessor-in-interest in Civil donation to Roberto and his visa was issued and able to travel to the U.S. as a
Case No. 2514. Hence, PNB has the burden of evidence that it acted in good faith tourist and returned in due time. Roberto adopted respondents Pedro Laigo and
from the time the land was offered as collateral. However, PNB miserably failed Marilou Laigo and married respondent Estella Balagot. Roberto sold one of the
to overcome this burden. There was no showing at all that it conducted an property to spouses Mario and Julia Campos,
investigation; that it observed due diligence and prudence by checking for flaws then he sold the other one to Marilou and to Pedro not known to Margarita and
in the title; that it verified the identity of the true owner and possessor of the her other children.
land; and, that it visited subject premises to determine its actual condition It was only in Roberto's wake, that Margarita came to know of the sales
before accepting the same as collateral. as told by Pedro himself. In 1996, Margarita, represented by her daughter, Luz,
Both the CA and the trial court correctly observed that PNB could not instituted the complaint for the annulment of said sales and for the recovery of
validly raise the defense that it relied on Antonio’s clean title. The land, when it ownership and possession of the subject properties as well as for the
was first mortgaged, was then unregistered under our Torrens system. The first cancellation of Ricardo's tax declarations. The Spouses Campos, Marilou and
mortgage was on February 25, 197128 while OCT No. P-4952 was issued on July Pedro advanced that they were innocent purchasers for value and in good faith,
19, 1971. Since the Paces offered as collateral an unregistered land, with more the cause of action was nevertheless barred by prescription.
reason PNB should have proven before the RTC that it had verified the status of Margarita and the Spouses Campos entered into a settlement whereby
the property by conducting an ocular inspection before granting Antonio his they waived their respective claims against each other. Margarita died two days
first loan. Good faith which is a question of fact could have been proven in the later and was forthwith substituted by her estate, the trial court rendered a
proceedings before the RTC, but PNB dispensed with the trial proper and let its decision approving the compromise agreement and dismissing the complaint
opportunity to dispute factual allegations pass. Had PNB really taken the against the Spouses Campos.
necessary precautions, it would have discovered that a large portion of Lot Forthwith, trial on the merits ensued with respect to Pedro and
13521 is occupied by Ciriaco. Marilou. The trial court dismissed. Appeal was made. The Court of Appeals
Ciriaco’s action for reconveyance is inprescriptible. If a person claiming dismissed petitioner's claim that Roberto was merely a trustee of the subject
to be the owner thereof is in actual possession of the property, as the properties as there was no evidence on record supportive of the allegation that
defendants are in the instant case, the right to seek reconveyance, which in Roberto merely borrowed the properties from Margarita upon his promise to
effect seeks to quiet title to the property, does not prescribe. The reason for this return the same on his arrival from the United States. Further, it hypothesized
is that one who is in actual possession of a piece of land claiming to be the that granting the existence of an implied trust, still Margarita's action
owner thereof may wait until his possession is disturbed or his title is attacked thereunder had already been circumscribed by laches.
before taking steps to vindicate his right, the reason for the rule being, that his ISSUE
undisturbed possession gives him a continuing right to seek the aid of a court of a) Whether the complaint is barred by laches and/or prescription.
equity to ascertain and determine the nature of the adverse claim of a third b) WON Roberto held the property in trust only for Margarita.
party and its effect on his own title, which right can be claimed only by one who HELD
is in possession.34 a) NO. Laches, being rooted in equity, is not always to be applied strictly
In Ciriaco’s case, as it has been judicially established that he is in actual in a way that would obliterate an otherwise valid claim especially between
possession of the property he claims as his and that he has a better right to the blood relatives. The existence of a confidential relationship based upon
disputed portion, his suit for reconveyance is in effect an action for quieting of consanguinity is an important circumstance for consideration; hence, the
title. Hence, petitioner’s defense of prescription against Ciriaco does. doctrine is not to be applied mechanically as between near relatives. The
relationship between the parties therein, who were a family, was sufficient to
16. ESTATE OF MARGARITA v LAIGO explain and excuse what would otherwise have been a long delay in enforcing
FACTS: the claim and the delay in such situation should not be as strictly construed as
Margarita Cabacungan owned three parcels of unregistered land where the parties are complete strangers to another.
covered by tax declaration all in her name in Bauang, La Union. In 1968, It is clear that an action for reconveyance under a constructive implied
trust in accordance with Article 1456 does not prescribe unless and until the
land is registered or the instrument affecting the same is inscribed in rule that a purchaser of unregistered land uninformed of the seller's defective
accordance with law, inasmuch as it is what binds the land and operates title acquires no better right than such seller. Wherefore, the Petition is granted
constructive notice to the world. In the present case, however, the lands and judgment of the Regional Trial Court, is reversed and set aside and a new
involved are concededly unregistered lands; hence, there is no way by one is entered (a) directing the cancellation of the tax declarations covering the
which subject properties in the name of Roberto D. Laigo and his transferees; (b)
Margarita, during her lifetime, could be notified of the furtive and fraudulent nullifying the deeds of sale executed by Roberto D. Laigo in favor of respondents
sales made in 1992 by Roberto in favor of respondents, except by actual notice Pedro Roy Laigo and Marilou Laigo; and (c) directing said respondents to
from Pedro himself in August 1995. Hence, it is from that date that prescription execute reconveyance in favor of petitioner.
began to toll. The filing of the complaint in February 1996 is well within the
prescriptive period. Finally, such delay of only six (6) months in instituting the
present action hardly suffices to justify a finding of inexcusable delay or to
create an inference that Margarita has allowed her claim to stale by laches.
Prescription and laches, in respect of this resulting trust relation,
hardly can impair petitioner's cause of action. In this case, it was the 1992
sale of the properties to respondents that comprised the act of
repudiation which, however, was made known to Margarita only in 1995
but nevertheless impelled her to institute the action in 1996 - still well
within the prescriptive period. It is settled that an action for
reconveyance
based on a constructive implied trust prescribes in 10 years likewise in
accordance with Article 1144 of the Civil Code. Yet not like in the case
of a
resulting implied trust and an express trust, prescription supervenes in
a
constructive implied trust even if the trustee does not repudiate the
relationship. In other words, repudiation of said trust is not a condition
precedent to the running of the prescriptive period.
b) Petitioners before the trial court, had actually adduced evidence to
prove the intention of Margarita to transfer to Roberto only the legal title to the
properties in question, with attendant expectation that Roberto would return
the same to her on accomplishment of that specific purpose for which the
transaction was entered into. The evidence of course is not documentary,
but rather testimonial. It is deducible from the foregoing that the
inscription of Roberto's name in the Affidavit of Transfer as Margarita's
transferee is not for the purpose of transferring ownership to him but
only
to enable him to hold the property in trust for Margarita. The
circumstances
from which could be derived the unwritten understanding between Roberto
and Margarita that by their act, no absolute transfer of ownership would be
effected. Besides, it would be highly unlikely for Margarita to institute the
instant complaint if it were indeed her intention to vest in Roberto, by virtue of
the Affidavit of Transfer, absolute ownership over the covered properties.
Finally, petitioner states that whether a buyer is in good or bad faith is
a matter that attains relevance in sales of registered land, as corollary to the

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