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[G.R. No. 144773. May 16, 2005] property.

Unheeded, petitioner then filed a complaint for ejectment against


AZNAR BROTHERS REALTY COMPANY, petitioner, vs. LAURENCIO AYING, the occupants before the Metropolitan Trial Court (MTC), Lapu-Lapu City.
IN HIS OWN BEHALF AND IN BEHALF OF THE OTHER HEIRS OF EMILIANO On February 1, 1994, the MTC ordered the occupants to vacate the
AYING, PAULINO AYING, IN HIS OWN BEHALF AND IN BEHALF OF THE property. The case eventually reached this Court, docketed as G.R. No.
OTHER HEIRS OF SIMEON AYING, AND WENCESLAO SUMALINOG, IN HIS 128102, entitled Aznar Brothers Realty Company vs. Court of Appeals, Luis Aying,
OWN BEHALF AND IN BEHALF OF THE OTHER HEIRS OF ROBERTA Demetrio Sida, Felomino Augusto, Federico Abing, and Romeo Augusto.[2] On March 7,
AYING, respondents. 2000, a Decision was promulgated in favor of herein petitioner, declaring it
DECISION as the rightful possessor of the parcel of land in question.
Meanwhile, herein respondents, along with other persons claiming to be
AUSTRIA-MARTINEZ, J.: descendants of the eight Aying siblings, all in all numbering around 220
This resolves the petition for review on certiorari seeking the modification persons, had filed a complaint for cancellation of the Extra-Judicial Partition
of the Decision[1] of the Court of Appeals (CA) dated March 7, 2000 which with Absolute Sale, recovery of ownership, injunction and damages with the
affirmed with modification the Decision of the Regional Trial Court (RTC) of RTC of Lapu-Lapu City. The complaint was dismissed twice without
Lapu-Lapu City, Branch 27 in Civil Case No. 2930-L; and the Resolution dated prejudice. Said complaint was re-filed on August 19, 1993, docketed as Civil
August 2, 2000 denying petitioners motion for reconsideration of the Case No. 2930-L.
aforementioned decision. In their amended complaint, herein respondents (plaintiffs before the RTC)
The antecedent facts are as follows: alleged that: they are co-owners of subject property, being descendants of
The disputed property is Lot No. 4399 with an area of 34,325 square meters the registered owners thereof under OCT No. RO-2856; they had been in
located at Dapdap, Lapu-Lapu City. CrisantaMaloloy-on petitioned for the actual, peaceful, physical, open, adverse, continuous and uninterrupted
issuance of a cadastral decree in her favor over said parcel of land. After her possession in concept of owner of subject parcel of land since time
death in 1930, the Cadastral Court issued a Decision directing the issuance immemorial; their possession was disturbed only in the last quarter of 1991
of a decree in the name of CrisantaMaloloy-ons eight children, namely: when some of them received notices to vacate from petitioner and several
Juan, Celedonio, Emiliano, Francisco, Simeon, Bernabe, Roberta and Fausta, weeks thereafter, earthmoving equipment entered the disputed land,
all surnamed Aying. The certificate of title was, however, lost during the bulldozing the same and destroying plants, trees and concrete monuments
war. (mohon); respondents discovered that such activities were being
Subsequently, all the heirs of the Aying siblings executed an Extra-Judicial undertaken by petitioner together with Sta. Lucia Realty and Development,
Partition of Real Estate with Deed of Absolute Sale dated March 3, 1964, Inc.; petitioner claimed to be the owner of subject property by virtue of an
conveying the subject parcel of land to herein petitioner Aznar Brothers extra-judicial partition of real estate with deed of absolute sale executed in
Realty Company. Said deed was registered with the Register of Deeds of petitioners favor by the alleged heirs of CrisantaMaloloy-on; the
Lapu-Lapu City on March 6, 1964 under Act No. 3344 (the law governing aforementioned extra-judicial partition of real estate with deed of absolute
registration for unregistered land), and since then, petitioner had been sale is a fraud and is null and void ab initio because not all the co-owners of
religiously paying real property taxes on said property. subject property affixed their signature on said document and some of the
In 1988, herein petitioner filed a Petition for Reconstitution of the Original co-owners who supposedly signed said document had been dead at the
Title as the original title over the subject property had been lost during the time of the execution thereof; petitioner entered subject land in bad faith,
war. On April 12, 1988, the court granted said petition, thereby directing the knowing fully well that it did not have any right to the land and used force,
Register of Deeds of Lapu-Lapu City to issue a reconstituted title in the name threat and intimidation against respondents; and they suffered moral
of the abovementioned Aying siblings. Thus, Original Certificate of Title damages.[3]
(OCT) No. RO-2856 was issued. Petitioner (defendant before the RTC) filed its Answer, denying that
In 1991, petitioner, claiming to be the rightful owner of the subject respondents are the lawful owners of subject parcel of land by virtue of
property, sent out notices to vacate, addressed to persons occupying the their being descendants or heirs of the registered owners of subject
property. Instead, petitioner alleged that it had been in actual possession of Partition of Real Estate with Deed of Absolute Sale dated March 3, 1964 as
subject land as owner thereof by virtue of the extra-judicial partition of real valid and binding, adjudging that Lot 4399 with an area of 34,325 square
property and deed of absolute sale executed in its favor; that in fact, it had meters located at Dapdap, Mactan, Lapu-Lapu City had been validly
been paying taxes thereon religiously; that it tolerated about 6 persons to conveyed to and in favor of Aznar Brothers Realty Company, and directing
live on said land but said persons were eventually ejected by court order. the Register of Deeds of Lapu-Lapu City to register the above-mentioned
Petitioner then raised the affirmative defenses of failure to state cause of deed in accordance with law and to cancel Original Certificate of Title No.
action and prescription, as it took respondents 27 years, 10 months and 27 RO-2856, and to issue a transfer certificate of title in the name of Aznar
days to file the action to recover subject property, when an action to Brothers Realty Company upon payment of the necessary registration fees
recover property based on an implied trust should be instituted within 4 pursuant thereto.
years from discovery of the fraud.[4] The Writ of Preliminary Injunction issued in this case is hereby ordered
In the Pre-Trial Order dated January 30, 1995 of the RTC, the issues were dissolved.
narrowed down to the following: The Motion for Contempt filed by the plaintiffs against defendants is
1. Whether or not the plaintiffs [herein respondents] are the heirs of the dismissed for want of factual and legal basis.
registered owners of Lot No. 4399. Costs against the plaintiffs.
2. Whether or not plaintiffs are the owners of Lot No. 4399. SO ORDERED.[6]
3. Whether or not the defendant Aznar [herein petitioner] is estopped to Herein respondents appealed the foregoing decision to the CA and on
make any claim on Lot No. 4399. March 7, 2000, said court promulgated its Decision, the dispositive portion
4. Whether or not the defendant Aznar is a builder in bad faith. of which is reproduced hereunder:
5. Whether or not the defendants are liable for damages and attorneys fees THE FOREGOING CONSIDERED, the contested Decision while AFFIRMED is
in favor of the plaintiffs. hereby MODIFIED. The heirs of EmilianoAying, Simeon Aying and Roberta
6. Whether or not the Extra-Judicial Partition of Real Estate with Deed of Aying are hereby declared as the lawful owners of the contested property
Absolute Sale is valid and had, in effect, validly conveyed to defendant Aznar but equivalent only to 3/8.
Lot No. 4399. SO ORDERED.
7. Whether or not the plaintiffs action has prescribed.[5] In modifying the RTC judgment, the CA ratiocinated that an action for
After trial, the RTC rendered a Decision dated July 4, 1997, ruling that recovery of possession of registered land never prescribes in view of the
respondents evidence failed to prove that the extra-judicial partition with provision of Section 44, Act No. 496 (now Sec. 47, PD 1520), to the effect
deed of absolute sale was a totally simulated or fictitious contract and that no title to registered land in derogation to that of a registered owner
concluded that said document is valid, thus, effectively conveying to shall be acquired by prescription. The CA further ruled that even if the
petitioner the property in question. It further held that respondents action action is deemed to be based on implied trust, prescription did not begin to
had prescribed in that the action is considered as one for reconveyance run since there is no evidence that positive acts of repudiation were made
based on implied or constructive trust, it prescribed in 10 years from the known to the heirs who did not participate in the execution of the Extra-
registration of the deed on March 6, 1964; and if the action is considered as Judicial Partition of Real Estate with Deed of Absolute Sale. Thus, striking
one for annulment of contract on the ground of fraud, it should have been down the RTCs ruling that the respondents complaint is dismissible on the
filed within 4 years from discovery of the fraud. The trial court also ruled ground of prescription, the CA held instead that herein respondents action
that respondents failed to present any admissible proof of filiation, hence, had not prescribed but upheld the validity of the Extra-Judicial Partition of
they were not able to prove that they are indeed heirs of the eight Aying Real Estate with Deed of Absolute Sale, except as to the shares of the heirs
siblings who appear as the registered owners under OCT No. RO-2856. of Emiliano, Simeon and Roberta, who did not participate in the execution
The dispositive portion of the RTC Decision reads as follows: of said document.
WHEREFORE, judgment is hereby rendered dismissing the amended Herein petitioners motion for reconsideration of the CA decision was denied
complaint on the ground of prescription, and declaring the Extra-Judicial per Resolution dated August 2, 2000.
Hence, the present petition for review on certiorari assailing the CA decision The issues raised by petitioner for the Courts resolution are (1) whether or
on the following grounds: not respondents cause of action is imprescriptible; and (2) if their right to
I bring action is indeed imprescriptible, may the principle of laches apply.
THE COURT OF APPEALS ERRED IN FAILING TO APPLY THE RULE THAT AN Respondents alleged in their amended complaint that not all the co-owners
HEIR OF THE ORIGINAL REGISTERED OWNER MAY LOSE HIS RIGHT TO of the land in question signed or executed the document conveying
RECOVER A TITLED PROPERTY BY REASON OF LACHES; ownership thereof to petitioner and made the conclusion that said
II document is null and void. We agree with the ruling of the RTC and the CA
THE COURT OF APPEALS ERRED IN FAILING TO APPLY THE RULE THAT THE that the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale is
ACT OF REGISTRATION OF THE DEED OF PARTITION WITH SALE MAY BE valid and binding only as to the heirs who participated in the execution
CONSIDERED AN UNEQUIVOCAL REPUDIATION OF THE TRUST GIVING RISE thereof, hence, the heirs of Emiliano, Simeon and Roberta Aying, who
TO PRESCRIPTION; undisputedly did not participate therein, cannot be bound by said
III document.
THE COURT OF APPEALS ERRED IN FAILING TO APPLY THE PROVISIONS OF However, the facts on record show that petitioner acquired the entire
ARTICLE 1104 OF THE CIVIL CODE TO THE EFFECT THAT IN THE ABSENCE OF parcel of land with the mistaken belief that all the heirs have executed the
BAD FAITH OR FRAUD, THE PARTITION WITH PRETERITION OF ANY subject document. Thus, the trial court is correct that the provision of law
COMPULSORY HEIR SHALL NOT BE RESCINDED.[7] applicable to this case is Article 1456 of the Civil Code which states:
In their Comment, respondents argue that this case is an action to declare ART. 1456. If property is acquired through mistake or fraud, the person
as null and void the Extra-Judicial Partition of Real Estate with Deed of obtaining it is, by force of law, considered a trustee of an implied trust for
Absolute Sale, hence, under Article 1410 of the Civil Code, an action for the benefit of the person from whom the property comes.
declaration of an inexistent contract does not prescribe. Respondents In Vda. De Esconde vs. Court of Appeals,[8] the Court expounded thus:
further posit that the principle of laches should be applied against petitioner Construing this provision of the Civil Code, in Philippine National Bank v.
and not against them, as they (respondents) had been in actual possession Court of Appeals, the Court stated:
of the subject property, while petitioner merely brought action to eject A deeper analysis of Article 1456 reveals that it is not a trust in the technical
them more than 29 years after the alleged execution of the Extra-Judicial sense for in a typical trust, confidence is reposed in one person who is
Partition of Real Estate with Deed of Absolute Sale. They also refuted named a trustee for the benefit of another who is called the cestuique trust,
petitioners arguments regarding the application of the principles of implied respecting property which is held by the trustee for the benefit of the
and constructive trusts in this case. cestuique trust. A constructive trust, unlike an express trust, does not
At the outset, it should be stressed that not all the plaintiffs who filed the emanate from, or generate a fiduciary relation. While in an express trust, a
amended complaint before the trial court had been impleaded as beneficiary and a trustee are linked by confidential or fiduciary relations, in
respondents in the present petition. The only parties impleaded are the a constructive trust, there is neither a promise nor any fiduciary relation to
heirs of Emiliano, Simeon and Roberta Aying, whom the CA adjudged as speak of and the so-called trustee neither accepts any trust nor intends
owners of a 3/8 portion of the land in dispute for not having participated in holding the property for the beneficiary.[9]
the execution of the Extra-Judicial Partition of Real Estate with Deed of The concept of constructive trusts was further elucidated in the same case,
Absolute Sale. as follows:
It is significant to note that herein petitioner does not question the CA . . . implied trusts are those which, without being expressed, are deducible
conclusion that respondents are heirs of the aforementioned three Aying from the nature of the transaction as matters of intent or which are
siblings. Hence, the trial court and appellate courts findings that the Extra- superinduced on the transaction by operation of law as matters of equity,
Judicial Partition of Real Estate with Deed of Absolute Sale was not forged independently of the particular intention of the parties. In turn, implied
nor simulated and that the heirs of Emiliano, Simeon and Roberta Aying did trusts are either resulting or constructive trusts. These two are
not participate in the execution thereof, are now beyond cavil. differentiated from each other as follows:
Resulting trusts are based on the equitable doctrine that valuable on an implied or constructive trust prescribes in ten years from the issuance
consideration and not legal title determines the equitable title or interest of the Torrens title over the property.[13]
and are presumed always to have been contemplated by the parties. They It has also been ruled that the ten-year prescriptive period begins to run
arise from the nature of circumstances of the consideration involved in a from the date of registration of the deed or the date of the issuance of the
transaction whereby one person thereby becomes invested with legal title certificate of title over the property, but if the person claiming to be the
but is obligated in equity to hold his legal title for the benefit of another. On owner thereof is in actual possession of the property, the right to seek
the other hand, constructive trusts are created by the construction of equity reconveyance, which in effect seeks to quiet title to the property, does not
in order to satisfy the demands of justice and prevent unjust enrichment. prescribe.[14]
They arise contrary to intention against one who, by fraud, duress or abuse In the present case, respondents WenceslaoSumalinog, an heir of Roberta
of confidence, obtains or holds the legal right to property which he ought Aying; LaurencioAying, an heir of EmilianoAying; and PaulinoAying, an heir
not, in equity and good conscience, to hold.[10] (Emphasis supplied) of Simeon Aying, all testified that they had never occupied or been in
Based on such concept of constructive trusts, the Court ruled in said case possession of the land in dispute.[15] Hence, the prescriptive period of ten
that: years would apply to herein respondents.
The rule that a trustee cannot acquire by prescription ownership over The question then arises as to the date from which the ten-year period
property entrusted to him until and unless he repudiates the trust, applies should be reckoned, considering that the Extra-Judicial Partition of Real
to express trusts and resulting implied trusts. However, Estate with Deed of Absolute Sale was registered under Act No. 3344 and
in constructive implied trusts, prescription may supervene even if the not under Act No. 496 (Land Registration Act), despite the fact the land in
trustee does not repudiate the relationship. Necessarily, repudiation of said dispute was already titled under Act No. 496 in the names of the Aying
trust is not a condition precedent to the running of the prescriptive siblings at the time the subject document was executed.
period.[11] In Spouses Abrigo vs. De Vera,[16] it was held that registration of instruments must
The next question is, what is the applicable prescriptive period? be done in the proper registry, in order to affect and bind the land and,
In Amerol vs. Bagumbaran,[12] the Court expounded on the prescriptive thus, operate as constructive notice to the world.[17] Therein, the Court
period within which to bring an action for reconveyance of property based ruled:
on implied or constructive trust, to wit: x xx If the land is registered under the Land Registration Act (and has
. . . under the present Civil Code, we find that just as an implied or therefore a Torrens Title), and it is sold but the subsequent sale is registered
constructive trust is an offspring of the law (Art. 1456, Civil Code), so is the not under the Land Registration Act but under Act 3344, as amended, such
corresponding obligation to reconvey the property and the title thereto in sale is not considered REGISTERED x xx .[18]
favor of the true owner. In this context, and vis--vis prescription, Article In this case, since the Extra-Judicial Partition of Real Estate with Deed of
1144 of the Civil Code is applicable. Absolute Sale was registered under Act No. 3344 and not under Act No. 496,
Article 1144. The following actions must be brought within ten years from said document is deemed not registered. Accordingly, the ten-year
the time the right of action accrues: prescriptive period cannot be reckoned from March 6, 1964, the date of
(1) Upon a written contract; registration of the subject document under Act No. 3344. The prescriptive
(2) Upon an obligation created by law; period only began to run from the time respondents had actual notice of the
(3) Upon a judgment. Extra-Judicial Partition of Real Estate with Deed of Absolute Sale.
xxx xxxxxx The only evidence on record as to when such prescriptive period
An action for reconveyance based on an implied or constructive trust must commenced as to each of the respondents are WenceslaoSumalinogs (heir
perforce prescribe in ten years and not otherwise. A long line of decisions of of Roberta Aying) testimony that about three years after 1964, they already
this Court, and of very recent vintage at that, illustrates this rule. learned of the existence of the Extra-Judicial Partition of Real Estate with
Undoubtedly, it is now well-settled that an action for reconveyance based Deed of Absolute Sale;[19] and LaurencioAyings (heir of EmilianoAying)
admission that he found out about the sale of the land in dispute a long
time ago and can only estimate that it must be after martial prescription when said amended complaint was filed as they only had until
law.[20] PaulinoAying (heir of Simeon Aying) gave no testimony whatsoever 1977 within which to bring action. As to the respondent heirs of Emiliano
as to when the children of Simeon Aying actually learned of the existence of and Simeon Aying, they were able to initiate their action for reconveyance
the document of sale. On the other hand, petitioner did not present any of property based on implied or constructive trust well within the ten-year
other evidence to prove the date when respondents were notified of the prescriptive period reckoned from 1991 when they were sent by petitioner
execution of the subject document. a notice to vacate the subject property.
In view of the lack of unambiguous evidence of when the heirs of Evidently, laches cannot be applied against respondent heirs of Emiliano and
EmilianoAying and Simeon Aying discovered the existence of the document Simeon Aying, as they took action to protect their interest well within the
of sale, it must be determined which party had the burden of proof to period accorded them by law.
establish such fact. With regard to petitioners argument that the provision of Article 1104 of
The test for determining where the burden of proof lies is to ask which party the Civil Code, stating that a partition made with preterition of any of the
to an action or suit will fail if he offers no evidence competent to show the compulsory heirs shall not be rescinded, should be applied, suffice it to say
facts averred as the basis for the relief he seeks to obtain.[21] Moreover, one that the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale is
alleging a fact that is denied has the burden of proving it and unless the not being rescinded. In fact, its validity had been upheld but only as to the
party asserting the affirmative of an issue sustains the burden of proof of parties who participated in the execution of the same. As discussed above,
that issue by a preponderance of the evidence, his cause will not what was conveyed to petitioner was ownership over the shares of the heirs
succeed.[22] Thus, the defendant bears the burden of proof as to all who executed the subject document. Thus, the law, particularly, Article
affirmative defenses which he sets up in answer to the plaintiffs claim or 1456 of the Civil Code, imposed the obligation upon petitioner to act as a
cause of action; he being the party who asserts the truth of the matter he trustee for the benefit of respondent heirs of Emiliano and Simeon Aying
has alleged, the burden is upon him to establish the facts on which that who, having brought their action within the prescriptive period, are now
matter is predicated and if he fails to do so, the plaintiff is entitled to a entitled to the reconveyance of their share in the land in dispute.
verdict or decision in his favor.[23] IN VIEW OF THE FOREGOING, the petition is PARTIALLY GRANTED and the
In the case at bar, it was petitioner, as the defendant before the RTC, which Decision of the Court of Appeals dated March 7, 2000 is MODIFIED, as
set up in its Answer the affirmative defense of prescription. It was, follows: The amended complaint of the heirs of Roberta Aying is DISMISSED
therefore, incumbent upon petitioner to prove the date from which the on the ground of prescription. However, the heirs of EmilianoAying and
prescriptive period began to run. Evidence as to the date when the ten-year Simeon Aying, having instituted the action for reconveyance within the
prescriptive period began exists only as to the heirs of Roberta Aying, as prescriptive period, are hereby DECLARED as the LAWFUL OWNERS of a 2/8
WenceslaoSumalinog admitted that they learned of the existence of the portion of the parcel of land covered by Original Certificate of Title No. RO-
document of sale in the year 1967. As to the heirs of EmilianoAying and 2856.
Simeon Aying, there is no clear evidence of the date when they discovered SO ORDERED.
the document conveying the subject land to petitioner. Petitioner miserably Puno, (Chairman), Callejo, Sr., Tinga, and Chico-Nazario, JJ., concur.
failed to adduce proof of when the heirs of EmilianoAying and Simeon Aying
were notified of the subject document. Hence, with regard to said heirs, the
Court may consider the admission in the amended complaint that they
learned of the conveyance of the disputed land only in 1991 when
petitioner sent notices to vacate to the occupants of the subject land, as the
date from which the ten-year prescriptive period should be reckoned.
Respondents filed their Amended Complaint on December 6, 1993.[24] Thus,
with regard to respondent heirs of Roberta Aying who had knowledge of the
conveyance as far back as 1967, their cause of action is already barred by
SECOND DIVISION Juliana Lopez Manzano (Juliana) to recover from respondents several large
tracts of lands allegedly belonging to the trust estate of Juliana.
RICHARD B. LOPEZ, in his G.R. No. 157784
Capacity as Trustee of the Trust The decedent, Juliana, was married to Jose Lopez Manzano (Jose). Their
Estate of the late Juliana Lopez- union did not bear any children. Juliana was the owner of several
Manzano, Present: properties, among them, the properties subject of this dispute. The
Petitioner, disputed properties totaling more than 1,500 hectares consist of six parcels
of land, which are all located in Batangas. They were the
QUISUMBING, J., exclusive paraphernal properties of Juliana together with a parcel of land
Chairperson, situated in Mindoro known as Abra de Ilog and a fractional interest in a
CARPIO MORALES, residential land on Antorcha St., Balayan, Batangas.
- versus - TINGA,
VELASCO, JR., and On 23 March 1968, Juliana executed a notarial will,[4] whereby she
COURT OF APPEALS, BRION, JJ. expressed that she wished to constitute a trust fund for
CORAZON LOPEZ, FERNANDO her paraphernal properties, denominated as Fideicomiso de Juliana
LOPEZ, ROBERTO LOPEZ, represented Lopez Manzano (Fideicomiso), to be administered by her husband. If her
by LUZVIMINDA LOPEZ, MARIA Promulgated: husband were to die or renounce the obligation, her nephew, Enrique
ROLINDA MANZANO, MARIA Lopez, was to become administrator and executor of the Fideicomiso. Two-
ROSARIO MANZANO SANTOS, thirds (2/3) of the income from rentals over these properties were to
JOSE MANZANO, JR., NARCISO answer for the education of deserving but needy honor students, while one-
MANZANO (all represented by December 16, 2008 third 1/3 was to shoulder the expenses and fees of the administrator. As to
Attorney-in-fact, MODESTO RUBIO), her conjugal properties, Juliana bequeathed the portion that she could
MARIA CRISTINA MANZANO RUBIO, legally dispose to her husband, and after his death, said properties were to
IRENE MONZON and ELENA MANZANO, pass to her biznietos or great grandchildren.
Respondents.
x--------------------------------------------------------------------------------x Juliana initiated the probate of her will five (5) days after its execution, but
she died on 12 August 1968, before the petition for probate could be heard.
DECISION The petition was pursued instead in Special Proceedings (S.P.) No. 706 by
TINGA, J.: her husband, Jose, who was the designated executor in the will. On 7
October 1968, the Court of First Instance, Branch 3, Balayan, Batangas,
This is a petition for review on certiorari [1]under Rule 45 of the 1997 Rules acting as probate court, admitted the will to probate and issued the letters
of Civil Procedure, assailing the Decision[2] and Resolution[3] of the Court of testamentary to Jose. Jose then submitted an inventory of Julianas real and
Appeals in CA-G.R. CV No. 34086. The Court of Appeals decision affirmed personal properties with their appraised values, which was approved by the
the summary judgment of the Regional Trial Court (RTC), Branch probate court.
10, Balayan, Batangas, dismissing petitioners action for reconveyance on the
ground of prescription. Thereafter, Jose filed a Report dated 16 August 1969, which included a
proposed project of partition. In the report, Jose explained that as the only
The instant petition stemmed from an action for reconveyance instituted by compulsory heir of Juliana, he was entitled by operation of law to one-half
petitioner Richard B. Lopez in his capacity as trustee of the estate of the late (1/2) of Julianas paraphernal properties as his legitime, while the other one-
half (1/2) was to be constituted into the Fideicomiso. At the same time, Jose
alleged that he and Juliana had outstanding debts totaling P816,000.00 Tuy, Batangas
excluding interests, and that these debts were secured by real estate
mortgages. He noted that if these debts were liquidated, the residuary Patugo, Balayan, OCT-2807 16,757,615 coconut,
estate available for distribution would, value-wise, be very small. Batangas sugar, citrus,
pasteur
From these premises, Jose proceeded to offer a project of partition. The
relevant portion pertaining to the Fideicomiso stated, thus: Cagayan, Balayan, TCT-1220 411,331 sugar
Batangas
PROJECT OF PARTITION
Pook, Baayan TCT-1281 135,922 sugar
14. Pursuant to the terms of the Will, one-half (1/2) of the following Batangas
properties, which are not burdened with any obligation, shall be constituted
into the Fidei-comiso de Juliana Lopez Manzano and delivered to Jose Bolbok, Balayan, TCT-18845 444,998 sugar
Lopez Manzano as trustee thereof: Batangas
Calzada, Balayan, TCT 1978 2,312 sugar
Location Title No. Area (Sq. M.) Improvements Batangas
Gumamela, Balayan, TCT-2575 829
Abra de Ilog, TCT - 540 2,940,000 pasture, etc. Batangas
Mindoro Bombon, Balayan, 4,532
Batangas
Antorcha St. TCT 1217-A 13,040 residential Paraaque, Rizal TCT-282340 800 residential
Balayan, Batangas (1/6 thereof) Paraaque, Rizal TCT-11577 800 residential
Modesto St., Manila TCT-52212 137.8 residential
and all those properties to be inherited by the decedent, by intestacy, from
her sister, Clemencia Lopez y Castelo. and the existing sugar quota in the name of the deceased with the
Central Azucarera Don Pedro at Nasugbo.
15. The other half (1/2) of the aforesaid properties is adjudicated to Jose
Lopez Manzano as heir. 16. The remaining shall likewise go to Jose Lopez Manzano, with the
condition to be annotated on the titles thereof, that upon his death, the
Then, Jose listed those properties which he alleged were registered in both same shall pass on to Corazon Lopez, Ferdinand Lopez, and Roberto Lopez:
his and Julianas names, totaling 13 parcels in all. The disputed properties
consisting of six (6) parcels, all located in Balayan, Batangas, were included Location Title No. Area (Sq. M.) Improvements
in said list. These properties, as described in the project of partition, are as
follows: Dalig, Balayan, TCT-10080 482,872 sugar
Location Title No. Area (Sq. M.) Improvements Batangas
San Juan, Rizal TCT-53690 523 residential
Pantay, Calaca, 91,283 coconuts
Batangas On 25 August 1969, the probate court issued an order approving the project
of partition. As to the properties to be constituted into the Fideicomiso, the
Mataywanak, OCT-29[6]94 485,486 sugar probate court ordered that the certificates of title thereto be cancelled, and,
in lieu thereof, new certificates be issued in favor of Jose as trustee of Respondents Maria Rolinda Manzano, Maria Rosario Santos, Jose Manzano,
the Fideicomiso covering one-half (1/2) of the properties listed under Jr., Narciso Manzano, Maria Cristina Manzano Rubio and Irene Monzon filed
paragraph 14 of the project of partition; and regarding the other half, to be a joint answer[6] with counterclaim for damages. Respondents Corazon,
registered in the name of Jose as heir of Juliana. The properties which Jose Fernando and Roberto, all surnamed Lopez, who were minors at that time
had alleged as registered in his and Julianas names, including the disputed and represented by their mother, filed a motion to dismiss,[7] the resolution
lots, were adjudicated to Jose as heir, subject to the condition that Jose of which was deferred until trial on the merits. The RTC scheduled several
would settle the obligations charged on these properties. The probate court, pre-trial conferences and ordered the parties to submit pre-trial briefs and
thus, directed that new certificates of title be issued in favor of Jose as the copies of the exhibits.
registered owner thereof in its Order dated 15 September 1969. On even
date, the certificates of title of the disputed properties were issued in the On 10 September 1990, the RTC rendered a summary
[8]
name of Jose. judgment, dismissing the action on the ground of prescription of action.
The RTC also denied respondents motion to set date of hearing on the
The Fideicomiso was constituted in S.P No. 706 encompassing one-half (1/2) counterclaim.
of the Abra de Ilog lot on Mindoro, the 1/6 portion of the lot in Antorcha St.
in Balayan, Batangasand all other properties inherited ab intestato by Both petitioner and respondents elevated the matter to the Court of
Juliana from her sister, Clemencia, in accordance with the order of the Appeals. On 18 October 2002, the Court of Appeals rendered the assailed
probate court in S.P. No. 706. The disputed lands were excluded from the decision denying the appeals filed by both petitioner and respondents. The
trust. Court of Appeals also denied petitioners motion for reconsideration for lack
of merit in its Resolution dated 3 April 2003.
Jose died on 22 July 1980, leaving a holographic will disposing of the Hence, the instant petition attributing the following errors to the Court of
disputed properties to respondents. The will was allowed probate on 20 Appeals:
December 1983 in S.P. No. 2675 before the RTC of Pasay City. Pursuant to
Joses will, the RTC ordered on 20 December 1983 the transfer of the I. THE COURT OF APPEALS CONCLUSION THAT PETITIONERS ACTION FOR
disputed properties to the respondents as the heirs of Jose. Consequently, [RECONVEYANCE] HAS PRESCRIBED TAKING AS BASIS SEPTEMBER 15,
the certificates of title of the disputed properties were cancelled and new 1969 WHEN THE PROPERTIES IN DISPUTE WERE TRANSFERRED TO THE
ones issued in the names of respondents. NAME OF THE LATE JOSE LOPEZ MANZANO IN RELATION TO DECEMBER 12,
1984 WHEN THE ACTION FOR RECONVEYANCE WAS FILED IS ERRONEOUS.
Petitioners father, Enrique Lopez, also assumed the trusteeship of Julianas
estate. On 30 August 1984, the RTC of Batangas, Branch 9 appointed II. THE RESPONDENT COURT OF APPEALS CONCLUSION IN FINDING THAT
petitioner as trustee of Julianas estate in S.P. No. 706. On 11 December THE FIDUCIARY RELATION ASSUMED BY THE LATE JOSE LOPEZ MANZANO,
1984, petitioner instituted an action for reconveyance of parcels of land AS TRUSTEE, PURSUANT TO THE LAST WILL AND TESTAMENT OF JULIANA
with sum of money before the RTC of Balayan, Batangasagainst LOPEZ MANZANO WAS IMPLIED TRUST, INSTEAD OF EXPRESS TRUST IS
respondents. The complaint[5] essentially alleged that Jose was able to EQUALLY ERRONEOUS.
register in his name the disputed properties, which were
the paraphernal properties of Juliana, either during their conjugal union or None of the respondents filed a comment on the petition. The counsel for
in the course of the performance of his duties as executor of the testate respondents Corazon, Fernando and Roberto, all surnamed Lopez, explained
estate of Juliana and that upon the death of Jose, the disputed properties that he learned that respondents had migrated to the United States only
were included in the inventory as if they formed part of Joses estate when when the case was pending before the Court of Appeals.[9] Counsel for the
in fact Jose was holding them only in trust for the trust estate of Juliana. rest of the respondents likewise manifested that the failure by said
respondents to contact or communicate with him possibly signified their
lack of interest in the case.[10] In a Resolution dated 19 September 2005, the ART. 1456. If property is acquired through mistake or fraud, the person
Court dispensed with the filing of a comment and considered the case obtaining it is, by force of law, considered a trustee of an implied trust for
submitted for decision.[11] the benefit of the person from whom the property comes.

The core issue of the instant petition hinges on whether petitioners action In Aznar Brothers Realty Company v. Aying,[15] the Court differentiated two
for reconveyance has prescribed. The resolution of this issue calls for a kinds of implied trusts, to wit:
determination of whether an implied trust was constituted over the
disputed properties when Jose, the trustee, registered them in his name. x x x In turn, implied trusts are either resulting or constructive trusts. These
Petitioner insists that an express trust was constituted over the disputed two are differentiated from each other as follows:
properties; thus the registration of the disputed properties in the name of
Jose as trustee cannot give rise to prescription of action to prevent the Resulting trusts are based on the equitable doctrine that valuable
recovery of the disputed properties by the beneficiary against the trustee. consideration and not legal title determines the equitable title or interest
and are presumed always to have been contemplated by the parties. They
Evidently, Julianas testamentary intent was to constitute an express trust arise from the nature of circumstances of the consideration involved in a
over her paraphernal properties which was carried out when transaction whereby one person thereby becomes invested with legal title
the Fideicomiso was established in S.P. No. 706.[12] However, the disputed but is obligated in equity to hold his legal title for the benefit of another. On
properties were expressly excluded from the Fideicomiso. The probate court the other hand, constructive trusts are created by the construction of equity
adjudicated the disputed properties to Jose as the sole heir of Juliana. If a in order to satisfy the demands of justice and prevent unjust enrichment.
mistake was made in excluding the disputed properties from They arise contrary to intention against one who, by fraud, duress or abuse
the Fideicomiso and adjudicating the same to Jose as sole heir, the mistake of confidence, obtains or holds the legal right to property which he ought
was not rectified as no party appeared to oppose or appeal the exclusion of not, in equity and good conscience, to hold.[16]
the disputed properties from the Fideicomiso. Moreover, the exclusion of
the disputed properties from the Fideicomiso bore the approval of the A resulting trust is presumed to have been contemplated by the parties, the
probate court. The issuance of the probate courts order adjudicating the intention as to which is to be found in the nature of their transaction but
disputed properties to Jose as the sole heir of Juliana enjoys the not expressed in the deed itself.[17] Specific examples of resulting trusts may
presumption of regularity.[13] be found in the Civil Code, particularly Arts.
1448,[18] 1449,[19] 1451,[20] 1452[21] and 1453.[22]
On the premise that the disputed properties were
the paraphernal properties of Juliana which should have been included in A constructive trust is created, not by any word evincing a direct intention
the Fideicomiso, their registration in the name of Jose would be erroneous to create a trust, but by operation of law in order to satisfy the demands of
and Joses possession would be that of a trustee in an implied trust. Implied justice and to prevent unjust enrichment.[23] It is raised by equity in respect
trusts are those which, without being expressed, are deducible from the of property, which has been acquired by fraud, or where although acquired
nature of the transaction as matters of intent or which are superinduced on originally without fraud, it is against equity that it should be retained by the
the transaction by operation of law as matters of equity, independently of person holding it.[24] Constructive trusts are illustrated in Arts.
the particular intention of the parties.[14] 1450,[25] 1454,[26] 1455[27] and 1456.[28]
The disputed properties were excluded from the Fideicomiso at the outset.
The provision on implied trust governing the factual milieu of this case is Jose registered the disputed properties in his name partly as his conjugal
provided in Article 1456 of the Civil Code, which states: share and partly as his inheritance from his wife Juliana, which is the
complete reverse of the claim of the petitioner, as the new trustee, that the
properties are intended for the beneficiaries of the Fideicomiso.
Furthermore, the exclusion of the disputed properties from petitioners claim that no overt acts of repudiation may be attributed to
the Fideicomiso was approved by the probate court and, subsequently, by Jose. It may not be amiss to state that in the project of partition submitted
the trial court having jurisdiction over the Fideicomiso. The registration of to the probate court, Jose had indicated that the disputed properties were
the disputed properties in the name of Jose was actually pursuant to a court conjugal in nature and, thus, excluded from Julianas Fideicomiso. This act is
order. The apparent mistake in the adjudication of the disputed properties clearly tantamount to repudiating the trust, at which point the period for
to Jose created a mere implied trust of the constructive variety in favor of prescription is reckoned.
the beneficiaries of the Fideicomiso. In any case, the rule that a trustee cannot acquire by prescription ownership
over property entrusted to him until and unless he repudiates the trust
Now that it is established that only a constructive trust was constituted over applies only to express trusts and resulting implied trusts. However, in
the disputed properties, may prescription for the recovery of the properties constructive implied trusts, prescription may supervene even if the trustee
supervene? does not repudiate the relationship. Necessarily, repudiation of said trust is
not a condition precedent to the running of the prescriptive period.[31] Thus,
Petitioner asserts that, if at all, prescription should be reckoned only when for the purpose of counting the ten-year prescriptive period for the action
respondents caused the registration of the disputed properties in their to enforce the constructive trust, the reckoning point is deemed to be on 15
names on 13 April 1984and not on 15 September 1969, when Jose September 1969 when Jose registered the disputed properties in his name.
registered the same in his name pursuant to the probate courts order
adjudicating the disputed properties to him as the sole heir of Juliana. WHEREFORE, the instant petition for review on certiorari is DENIED and the
Petitioner adds, proceeding on the premise that the prescriptive period decision and resolution of the Court of Appeals in CA-G.R. CV No. 34086 are
should be counted from the repudiation of the trust, Jose had not AFFIRMED. Costs against petitioner.
performed any act indicative of his repudiation of the trust or otherwise
declared an adverse claim over the disputed properties. SO ORDERED.

The argument is tenuous.

The right to seek reconveyance based on an implied or constructive trust is


not absolute. It is subject to extinctive prescription.[29] An action
for reconveyance based on implied or constructive trust prescribes in 10
years. This period is reckoned from the date of the issuance of the original
certificate of title or transfer certificate of title. Since such issuance
operates as a constructive notice to the whole world, the discovery of the
fraud is deemed to have taken place at that time.[30]

In the instant case, the ten-year prescriptive period to recover the disputed
property must be counted from its registration in the name of Jose on 15
September 1969, when petitioner was charged with constructive notice that
Jose adjudicated the disputed properties to himself as the sole heir of Juana
and not as trustee of the Fideicomiso.

It should be pointed out also that Jose had already indicated at the outset
that the disputed properties did not form part of the Fideicomiso contrary to
THIRD DIVISION complaint a Joint Affidavit[3] executed on May 10, 1979 by Isidro Catandijan
and MaximinaCaezo attesting to her acquisition of theproperty.
SOLEDAD CAEZO, substituted by WILLIAM CAEZO G.R. No. 148788
and VICTORIANO CAEZO In her complaint, the petitioner alleged that she bought the parcel of land in
Petitioners, Present: 1939 from CrisogonoLimpiado, although the transaction was not reduced
into writing. Thereafter, she immediately took possession of the property.
YNARES-SANTIAGO, J., When she and her husband left for Mindanao in 1948, she entrusted the
Chairperson, said land to her father, Crispulo[4] Rojas, who took possession of, and
AUSTRIA-MARTINEZ, cultivated, the property. In 1980, she found out that the respondent, her
- versus - CHICO-NAZARIO, stepmother, was in possession of the property and was cultivating the
NACHURA, and same. She also discovered that the tax declaration over the property was
REYES, JJ. already in the name of Crispulo Rojas.[5]

CONCEPCION ROJAS, Promulgated: In her Answer, the respondent asserted that, contrary to the petitioners
Respondent. claim, it was her husband, Crispulo Rojas, who bought the property from
November 23, 2007 CrisogonoLimpiado in 1948, which accounts for the tax declaration being in
Crispulos name. From then on, until his death in 1978, Crispulo possessed
and cultivated the property. Upon his death, the property was included in
his estate, which was administered by a special administrator,
BienvenidoRicafort. The petitioner, as heir, even received her share in the
x-----------------------------------------------------------------------------------------x produce of the estate. The respondent further contended that the
petitioner ought to have impleaded all of the heirs as defendants. She also
DECISION argued that the fact that petitioner filed the complaint only in 1997 means
that she had already abandoned her right over the property.[6]
NACHURA, J.:
On July 3, 1998, after hearing, the MTC rendered a Decision in favor of the
petitioner, thus:
This is a petition for review on certiorari from the Decision[1] of the Court of
Appeals, dated September 7, 2000, in CA-G.R. SP No. 53236, and Resolution
dated May 9, 2001. WHEREFORE, premises considered, the Court finds a preponderance of
evidence in favor of plaintiff Soledad Caezo and against defendant
Concepcion Rojas by declaring plaintiff the true and lawful owner of the
land more particularly described under paragraph 5 of the complaint and
On January 29, 1997, petitioner Soledad Caezo filed a Complaint[2] for the hereby orders defendant Concepcion Rojas:
recovery of real property plus damages with the Municipal Trial Court (MTC)
of Naval, Biliran, against her fathers second wife, respondent Concepcion a) To vacate and surrender possession of the land to
Rojas. The subject property is an unregistered land with an area of 4,169 plaintiff;
square meters, situated at Higatangan, Naval, Biliran. Caezo attached to the b) To pay plaintiff the sum of P34,000.00 actual
damages, P10,000.00 for attorneys fees
and litigation expenses; and evidence on record showing that Crispulo Rojas ever ousted the petitioner
c) To pay the costs. from the property. The dispositive portion of the amended decision reads as
follows:
SO ORDERED.[7]

WHEREFORE, in view of the foregoing considerations, the decision of this


Despite the respondents objection that the verbal sale cannot be proven Court dated October 12, 1998 is hereby set aside and another is hereby
without infringing the Statute of Frauds, the MTC gave credence to the entered modifying the decision of the Court a quo and declaring Soledad
testimony of the petitioners two witnesses attesting to the fact that Rojas Vda. De Caezo as the true and lawful owner of a parcel of land, more
CrisogonoLimpiado sold the property to the petitioner in 1939. The MTC particularly described and bounded as follows:
also found no evidence to show that Crispulo Rojas bought the property
from CrisogonoLimpiado in 1948. It held that the 1948 tax declaration in A parcel of land situated at Higatangan, Naval, Biliran, bounded on the
Crispulos name had little significance on respondents claim, considering that North by PolicarpioLimpiado; on the South by Fidel Limpiado; on the East by
in 1948, the country was then rehabilitating itself from the ravages of the Seashore; and on the West by Crispolo (sic) Limpiado with an approximate
Second World War and the government was more interested in the increase area of 4,169 square meters per Tax Declaration No. 2258, later under Tax
in tax collection than the observance of the niceties of law.[8] Declaration No. 4073 in the name of Crispolo Rojas and later in the name of
the Heirs of Crispolo Rojas.

The respondent appealed the case to the Regional Trial Court (RTC) of Further, ordering defendant-appellant Concepcion Rojas and all persons
Naval, Biliran. On October 12, 1998, the RTC reversed the MTC decision on claiming rights or interest under her to vacate and surrender possession of
the ground that the action had already prescribed and acquisitive the land aforecited to the plaintiff or any of her authorized representatives,
prescription had set in. The dispositive portion of the Decision reads: Ordering the Provincial and/or Municipal Assessors Office to cancel the
present existing Tax Declaration in the name of Heirs of Crispolo Rojas
WHEREFORE, premises considered, the decision of the Municipal Trial Court referring to the above-described property in favor of the name of Soledad
of Naval, Biliran awarding ownership of the disputed land to the plaintiff Rojas Vda. De Caezo, Ordering the defendant-appellant Concepcion Rojas to
and further allowing recovery of damages is hereby REVERSED in toto. There pay the plaintiff-appellee the sum of P34,000.00 in actual damages, and to
is no award of damages. pay for the loss of her share in money value of the products of the coconuts
of said land from 1979 to 1997 and to pay further until the case is
The said property remains as the legitime of the defendant Concepcion terminated at the rate of P200.00 per quarter based on the regular
Rojas and her children. remittances of the late Crispolo Rojas to the plaintiff-appellee, and to pay
the costs.
SO ORDERED.[9]
SO ORDERED.[11]

However, acting on petitioners motion for reconsideration, the RTC


amended its original decision on December 14, 1998.[10] This time, it held The respondent filed a motion to reconsider the Amended Decision but the
that the action had not yet prescribed considering that the petitioner RTC denied the same in an Order dated April 25, 1999.
merely entrusted the property to her father. The ten-year prescriptive
period for the recovery of a property held in trust would commence to run
only from the time the trustee repudiates the trust. The RTC found no
She then filed a petition for review with the Court of Appeals (CA), which
reversed the Amended Decision of the RTC on September 7, 2000, thus:
That the Court of Appeals committed grave abuse of discretion in setting
WHEREFORE, the amended decision dated December 14, 1998 rendered in aside petitioners contention that the Petition for Review filed by respondent
Civil Case No. B-1041 is hereby REVERSED and SET ASIDE. The complaint CONCEPCION ROJAS before the Court of Appeals was FILED OUT OF TIME;
filed by Soledad Caezobefore the Municipal Trial Court of Naval, Biliran is
hereby DISMISSED on grounds of laches and prescription and for lack of That the Court of Appeals erred and committed grave abuse of discretion
merit. amounting to lack or excess of jurisdiction when it decided that the filing of
the case by SOLEDAD CAEZO for Recovery of Real Property was already
SO ORDERED.[12] barred by PRESCRIPTION AND LACHES.[17]

The CA held that the petitioners inaction for several years casts a serious The petitioner insists that the respondents petition for review before the CA
doubt on her claim of ownership over the parcel of land. It noted that 17 was filed out of time. The petitioner posits that the CA may not grant an
years lapsed since she discovered that respondent was in adverse additional extension of time to file the petition except for the most
possession of the property before she instituted an action to recover the compelling reason. She contends that the fact that respondents counsel
same. And during the probate proceedings, the petitioner did not even needed additional time to secure the certified copy of his annexes cannot be
contest the inclusion of the property in the estate of Crispulo Rojas. [13] considered as a compelling reason that would justify an additional period of
extension. She admits, though, that this issue was raised for the first time in
The CA was convinced that Crispulo Rojas owned the property, having their motion for reconsideration, but insists that it can be raised at any time
bought the same from CrisogonoLimpiado in 1948. Supporting this since it concerns the jurisdiction of the CA over the petition.
conclusion, the appellate court cited the following circumstances: (1) the
property was declared for taxation purposes in Crispulos name and he had The petitioner further posits that prescription and laches are unavailing
been paying the taxes thereon from 1948 until his death in 1978; (2) because there was an express trust relationship between the petitioner and
Crispulo adversely possessed the same property from 1948 until his death in Crispulo Rojas and his heirs, and express trusts do not prescribe. Even
1978; and (3) upon his death in 1978, the property was included in his assuming that it was not an express trust, there was a resulting trust which
estate, the proceeds of which were distributed among his heirs.[14] generally does not prescribe unless there is repudiation by the trustee.

For her part, the respondent argues that the petitioners are now estopped
The CA further held that, assuming that there was an implied trust between from questioning the CA Resolution granting her second motion for
the petitioner and her father over the property, her right of action to extension to file the petition for review. She notes that the petitioner did
recover the same would still be barred by prescription since 49 years had not raise this issue in the comment that she filed in the CA. In any case, the
already lapsed since Crispulo adversely possessed the contested property in grant of the second extension of time was warranted considering that the
1948.[15] certified true copy of the assailed RTC orders did not arrive at the office of
respondents counsel in Cebu City in time for the filing of the petition.
On May 9, 2001, the CA denied the petitioners motion for reconsideration
for lack of merit.[16]
On the merits, the respondent asserts that the complaint is barred by
In this petition for review, the petitioner, substituted by her heirs, assigns prescription, laches and estoppel. From 1948 until his death in 1978,
the following errors: Crispulo cultivated the property and was in adverse, peaceful and
continuous possession thereof in the concept of owner. It took the A trust is the legal relationship between one person having an equitable
petitioner 49 years from 1948 before she filed the complaint for recovery of ownership of property and another person owning the legal title to such
the property in 1997. Granting that it was only in 1980 that she found out property, the equitable ownership of the former entitling him to the
that the respondent adversely possessed the property, still petitioner performance of certain duties and the exercise of certain powers by the
allowed 17 years to elapse before she asserted her alleged right over the latter.[21] Trusts are either express or implied.[22] Express trusts are those
property. which are created by the direct and positive acts of the parties, by some
writing or deed, or will, or by words evincing an intention to create a
Finally, the respondent maintains that the other co-owners are trust.[23] Implied trusts are those which, without being expressed, are
indispensable parties to the case; and because they were not impleaded, deducible from the nature of the transaction as matters of intent or,
the case should be dismissed. independently, of the particular intention of the parties, as being
superinduced on the transaction by operation of law basically by reason of
The petition has no merit. equity.[24] An implied trust may either be a resulting trust or a constructive
trust.
On the procedural issue raised by the petitioner, we find no reversible error
in the grant by the CA of the second motion for extension of time to file the It is true that in express trusts and resulting trusts, a trustee cannot acquire
respondents petition. The grant or denial of a motion for extension of by prescription a property entrusted to him unless he repudiates the
time is addressed to the sound discretion of the court.[18] The CA obviously trust.[25] The following discussion is instructive:
considered the difficulty in securing a certified true copy of the assailed
decision because of the distance between the office of respondents counsel
and the trial court as a compelling reason for the request. In the absence of There is a rule that a trustee cannot acquire by prescription the ownership
any showing that the CA granted the motion for extension capriciously, such of property entrusted to him, or that an action to compel a trustee to
exercise of discretion will not be disturbed by this Court. convey property registered in his name in trust for the benefit of
the cestuique trust does not prescribe, or that the defense of
On the second issue, the petitioner insists that her right of action to recover prescription cannot be set up in an action to recover property held by a
the property cannot be barred by prescription or laches even with the person in trust for the benefit of another, or that property held in trust can
respondents uninterrupted possession of the property for 49 years because be recovered by the beneficiary regardless of the lapse of time.
there existed between her and her father an express trust or a resulting
trust. Indeed, if no trust relations existed, the possession of the property by That rule applies squarely to express trusts. The basis of the rule is that the
the respondent, through her predecessor, which dates back to 1948, would possession of a trustee is not adverse. Not being adverse, he does not
already have given rise to acquisitive prescription in accordance with Act acquire by prescription the property held in trust. Thus, Section 38 of Act
No. 190 (Code of Civil Procedure).[19] Under Section 40 of Act No. 190, an 190 provides that the law of prescription does not apply "in the case of a
action for recovery of real property, or of an interest therein, can be continuing and subsisting trust."
brought only within ten years after the cause of action accrues. This period
coincides with the ten-year period for acquisitive prescription provided The rule of imprescriptibility of the action to recover property held in
under Section 41[20] of the same Act. trust may possibly apply to resulting trusts as long as the trustee has not
Thus, the resolution of the second issue hinges on our determination of the repudiated the trust.
existence of a trust over the property --- express or implied --- between the
petitioner and her father. x xxx
Acquisitive prescription may bar the action of the beneficiary against the certainty. It cannot rest on vague, uncertain or indefinite declarations. An
trustee in an express trust for the recovery of the property held in trust inference of intention to create a trust, predicated only on circumstances,
where (a) the trustee has performed unequivocal acts of repudiation can be made only where they admit of no other interpretation.[31]
amounting to an ouster of the cestuique trust; (b) such positive acts of
repudiation have been made known to the cestuique trust, and (c) the
evidence thereon is clear and conclusive.[26]
Although no particular words are required for the creation of an express
trust, a clear intention to create a trust must be shown; and the proof of
As a rule, however, the burden of proving the existence of a trust is on the fiduciary relationship must be clear and convincing. The creation of an
party asserting its existence, and such proof must be clear and satisfactorily express trust must be manifested with reasonable certainty and cannot be
show the existence of the trust and its elements.[27] The presence of the inferred from loose and vague declarations or from ambiguous
following elements must be proved: (1) a trustor or settlor who executes circumstances susceptible of other interpretations.[32]
the instrument creating the trust; (2) a trustee, who is the person expressly
designated to carry out the trust; (3) the trust res, consisting of duly In the case at bench, an intention to create a trust cannot be inferred from
identified and definite real properties; and (4) the cestuique trust, or the petitioners testimony and the attendant facts and circumstances. The
beneficiaries whose identity must be clear.[28] Accordingly, it was incumbent petitioner testified only to the effect that her agreement with her father
upon petitioner to prove the existence of the trust relationship. And was that she will be given a share in the produce of the property, thus:
petitioner sadly failed to discharge that burden.

The existence of express trusts concerning real property may not be Q: What was your agreement with your father Crispulo Rojas when you left
established by parol evidence.[29] It must be proven by some writing or this property to him?
deed. In this case, the only evidence to support the claim that an express A: Every time that they will make copra, they will give a share.
trust existed between the petitioner and her father was the self-serving
testimony of the petitioner. Bare allegations do not constitute evidence Q: In what particular part in Mindanao [did] you stay with your husband?
adequate to support a conclusion. They are not equivalent to proof under A: Bansalan, Davao del Sur.
the Rules of Court.[30]
Q: And while you were in Bansalan, Davao del Sur, did Crispolo Rojas comply
In one case, the Court allowed oral testimony to prove the existence of a with his obligation of giving your share the proceeds of the land?
trust, which had been partially performed. It was stressed therein that what A: When he was still alive, he gave us every three months
is important is that there should be an intention to create a trust, thus: sometimes P200.00 and sometimes P300.00.[33]

This allegation, standing alone as it does, is inadequate to establish the


What is crucial is the intention to create a trust. While oftentimes the existence of a trust because profit-sharing per se, does not necessarily
intention is manifested by the trustor in express or explicit language, such translate to a trust relation. It could also be present in other relations, such
intention may be manifested by inference from what the trustor has said or as in deposit.
done, from the nature of the transaction, or from the circumstances
surrounding the creation of the purported trust. What distinguishes a trust from other relations is the separation of the legal
title and equitable ownership of the property. In a trust relation, legal title is
However, an inference of the intention to create a trust, made from vested in the fiduciary while equitable ownership is vested in a cestuique
language, conduct or circumstances, must be made with reasonable trust. Such is not true in this case. The petitioner alleged in her complaint
that the tax declaration of the land was transferred to the name of Crispulo through prescription.[39] Moreover, Section 41 of Act No. 190 allows adverse
without her consent. Had it been her intention to create a trust and make possession in any character to ripen into ownership after the lapse of ten
Crispulo her trustee, she would not have made an issue out of this because years. There could be prescriptionunder the said section even in the
in a trust agreement, legal title is vested in the trustee. The trustee would absence of good faith and just title.[40]
necessarily have the right to transfer the tax declaration in his name and to
pay the taxes on the property. These acts would be treated as beneficial to All the foregoing notwithstanding, even if we sustain petitioners claim that
the cestuique trust and would not amount to an adverse possession.[34] she was the owner of the property and that she constituted a trust over the
property with her father as the trustee, such a finding still would not
Neither can it be deduced from the circumstances of the case that a advance her case.
resulting trust was created. A resulting trust is a species of implied trust that
is presumed always to have been contemplated by the parties, the intention Assuming that such a relation existed, it terminated upon Crispulos death in
as to which can be found in the nature of their transaction although not 1978. A trust terminates upon the death of the trustee where the trust is
expressed in a deed or instrument of conveyance. A resulting trust is based personal to the trustee in the sense that the trustor intended no other
on the equitable doctrine that it is the more valuable consideration than the person to administer it.[41] If Crispulo was indeed appointed as trustee of the
legal title that determines the equitable interest in property.[35] property, it cannot be said that such appointment was intended to be
conveyed to the respondent or any of Crispulos other heirs. Hence, after
While implied trusts may be proved by oral evidence, the evidence must be Crispulos death, the respondent had no right to retain possession of the
trustworthy and received by the courts with extreme caution, and should property. At such point, a constructive trust would be created over the
not be made to rest on loose, equivocal or indefinite declarations. property by operation of law. Where one mistakenly retains property which
Trustworthy evidence is required because oral evidence can easily be rightfully belongs to another, a constructive trust is the proper remedial
fabricated.[36] In order to establish an implied trust in real property by parol device to correct the situation.[42]
evidence, the proof should be as fully convincing as if the acts giving rise to
the trust obligation are proven by an authentic document. An implied trust, A constructive trust is one created not by any word or phrase, either
in fine, cannot be established upon vague and inconclusive proof.[37] In the expressly or impliedly, evincing a direct intention to create a trust, but one
present case, there was no evidence of any transaction between the which arises in order to satisfy the demands of justice. It does not come
petitioner and her father from which it can be inferred that a resulting trust about by agreement or intention but in the main by operation of law,
was intended. construed against one who, by fraud, duress or abuse of confidence, obtains
or holds the legal right to property which he ought not, in equity and good
In light of the disquisitions, we hold that there was no express trust or conscience, to hold.[43]
resulting trust established between the petitioner and her father. Thus, in
the absence of a trust relation, we can only conclude that As previously stated, the rule that a trustee cannot, by prescription, acquire
Crispulos uninterrupted possession of the subject property for 49 years, ownership over property entrusted to him until and unless he repudiates
coupled with the performance of acts of ownership, such as payment of real the trust, applies to express trusts and resulting implied trusts. However, in
estate taxes, ripened into ownership. The statutory period of prescription constructive implied trusts, prescription may supervene even if the trustee
commences when a person who has neither title nor good faith, secures a does not repudiate the relationship. Necessarily, repudiation of the said
tax declaration in his name and may, therefore, be said to have adversely trust is not a condition precedent to the running of the prescriptive
claimed ownership of the lot.[38] While tax declarations and receipts are not period.[44] A constructive trust, unlike an express trust, does not emanate
conclusive evidence of ownership and do not prove title to the land, from, or generate a fiduciary relation. While in an express trust, a
nevertheless, when coupled with actual possession, they constitute beneficiary and a trustee are linked by confidential or fiduciary relations, in
evidence of great weight and can be the basis of a claim of ownership a constructive trust, there is neither a promise nor any fiduciary relation to
speak of and the so-called trustee neither accepts any trust nor intends want of authority to act, not only as to the absent parties but even as to
holding the property for the beneficiary.[45] The relation of trustee those present. Thus, when indispensable parties are not before the court,
and cestuique trust does not in fact exist, and the holding of a constructive the action should be dismissed.[49] At any rate, a resolution of this issue is
trust is for the trustee himself, and therefore, at all times adverse. now purely academic in light of our finding that the complaint is already
In addition, a number of other factors militate against the petitioners barred by prescription, estoppel and laches.
case. First, the petitioner is estopped from asserting ownership over the
subject property by her failure to protest its inclusion in the estate of WHEREFORE, premises considered, the petition is DENIED. The Decision of
Crispulo. The CA, thus, correctly observed that: the Court of Appeals, dated September 7, 2000, and Resolution dated May
9, 2001, areAFFIRMED.
Even in the probate proceedings instituted by the heirs of Crispulo Rojas, SO ORDERED.
which included her as a daughter of the first marriage, Caezo never
contested the inclusion of the contested property in the estate of her
father. She even participated in the project of partition of her fathers estate
which was approved by the probate court in 1984. After personally receiving
her share in the proceeds of the estate for 12 years, she suddenly claims
ownership of part of her fathers estate in 1997.

The principle of estoppel in pais applies when -- by ones acts,


representations, admissions, or silence when there is a need to speak out --
one, intentionally or through culpable negligence, induces another to
believe certain facts to exist; and the latter rightfully relies and acts on such
belief, so as to be prejudiced if the former is permitted to deny the
existence of those facts.[46] Such a situation obtains in the instant case.

Second, the action is barred by laches. The petitioner allegedly discovered


that the property was being possessed by the respondent in
1980.[47] However, it was only in 1997 that she filed the action to recover
the property. Laches is negligence or omission to assert a right within a
reasonable time, warranting a presumption that the party entitled to it has
either abandoned or declined to assert it.[48]

Finally, the respondent asserts that the court a quo ought to have dismissed
the complaint for failure to implead the other heirs who are indispensable
parties. We agree. We note that the complaint filed by the petitioner sought
to recover ownership, not just possession of the property; thus, the suit is in
the nature of an action for reconveyance. It is axiomatic that owners of
property over which reconveyance is asserted are indispensable
parties. Without them being impleaded, no relief is available, for the court
cannot render valid judgment. Being indispensable parties, their absence in
the suit renders all subsequent actions of the trial court null and void for
SECOND DIVISION children, namely: MAXIMO LABISTE, MOISES
LABISTE, GERVACIO LABISTE, SATURNINA
HEIRS OF TRANQUILINO LABISTE G.R. No. 162033 LABISTE and QUIRINO LABISTE; (6) SEVERO
(also known as TranquilinoLaviste) LABISTE, deceased and survived by his children,
represented by: (1) GERARDO LABISTE, Namely: FELIX LABISTE, RUFINA
representing the Heirs of Gregorio Labiste; Present: LABISTE, SIMPLICIO LABISTE,
(2) OBDULLIA LABISTE GABUAN, VICENTE LABISTE and PATRICIO
representing the heirs of Juan Labiste; QUISUMBING, J., LABISTE,
(3) VICTORIA G. CHIONG, representing Chairperson, Respondents.
the Heirs of EulaliaLabiste; (4) APOLINARIA CARPIO MORALES,
LABISTE YLAYA, representing the TINGA, x-------------------------------------------------------------------------------------x
Heirs of NicolasaLabiste; (5) DEMOSTHENES VELASCO, JR., and
LABISTE, representing the Heirs of Gervacio BRION, JJ. DECISION
Labiste; (6) ALEJANDRA LABISTE;
representing the Heirs of SINFROCIO TINGA, J.:
LABISTE, and (7) CLOTILDE LABISTE CARTA,
representing the Heirs of Andres Labiste, This is a petition for review[1] under Rule 45 of the Rules of Court of the
Petitioners, Court of Appeals Decision dated 30 June 2003[2] in CA-G.R. CV No. 65829.
reversing the decision of the Regional Trial Court (RTC) of Cebu City, Branch
- versus 9. The appellate court denied petitioners[3] motion for reconsideration in a
Resolution dated 15 January 2004.
HEIRS OF JOSE LABISTE, survived by his Promulgated:
children, (1) ZACARIAS LABISTE, deceased The factual antecedents are as follows:
and survived by his children, namely: CRESENCIA
LABISTE and EUFRONIO LABISTE; (2) May 8, 2009
BERNARDINO LABISTE, deceased and survived
by his children, namely: POLICARPIO LABISTE, On 29 September 1919, the late EpifanioLabiste (Epifanio), on his own and
BONIFACIO LABISTE, FELIX LABISTE, on behalf of his brothers and sisters who were the heirs of Jose Labiste
GABINA LABISTE, CAYETANA LABISTE and (Jose), purchased from the Bureau of Lands Lot No. 1054 of the Banilad Friar
ISABEL LABISTE; (3) LUCIA LABISTE, Lands Estate, with an area of 13,308 square meters, located at Guadalupe,
deceased and survived by her children, namely: Cebu City for P36.00.[4] Subsequently, on 9 June 1924, then Bureau of Lands
ISAAC LABISTE, GENARO LABISTE, Director Jorge B. Vargas executed Deed of Conveyance No. 12536 selling
BRAULIA LABISTE, BRAULIO LABISTE, and ceding Lot No. 1054 to Epifanio and his brothers and sisters who were
ASUNCION LABISTE, ALFONSO LABISTE the heirs of Jose.[5]
and CLAUDIA LABISTE; (4) EPIFANIO
LABISTE and CLAUDIA LABISTE; After full payment of the purchase price but prior to the issuance of the
deceased and survived by his children, deed of conveyance, Epifanio executed an Affidavit[6] (Affidavit of Epifanio)
namely SILVESTRE LABISTE, in Spanish on 10 July 1923 affirming that he, as one of the heirs of Jose, and
PAULA LABISTE and GERARDA LABISTE; his uncle and petitioners predecessor-in-interest, TranquilinoLabiste
(5) ANA LABISTE, deceased and survived by her (Tranquilino), then co-owned Lot No. 1054 because the money that was
paid to the government came from the two of them. Tranquilino and the Civil Case No. CEB-16943, with the RTC of Cebu City. Respondents claimed
heirs of Jose continued to hold the property jointly. that the Affidavit of Epifanio and the Calig-onansaPanagpalit were forgeries
Sometime in 1928, the Register of Deeds of Cebu City issued Original and that petitioners action had long prescribed or barred by laches.[14]
Certificate of Title No. 3878 for Lot No. 1054. On 2 May 1928, Engineer
Espiritu Bunagan (Engr. Bunagan), Deputy Public Land Surveyor, subdivided The RTC in a Decision dated 23 August 1999[15] ruled in favor of petitioners.
Lot No. 1054 into two lots: Lot No. 1054-A with an area of 6,664 square After evaluating the documents presented by petitioners, the RTC found
meters for Tranquilino and Lot No. 1054-B with an area of 6,664 square that they are genuine and authentic as ancient documents and that they are
meters for Epifanio. The subdivision plan prepared by Engr. Bunagan was valid and enforceable.[16] Moreover, it held that the action had not
approved by Jose P. Dans, Acting Director of Lands on 28 October 1928.[7] prescribed as the complaint was filed about a year after the reconstitution
of the title by respondents. The judicial reconstitution was even opposed by
Subsequently, on 18 October 1939, the heirs of Tranquilino[8] purchased the petitioners until a compromise agreement was reached by the parties and
one-half (1/2) interest of the heirs of Jose[9] over Lot No. 1054 for P300.00, approved by the RTC which ordered the reconstitution. The RTC further held
as evidenced by the Calig-onansaPanagpalit[10] executed by the parties in that the reconstituted title did not give any more right to respondents than
the Visayan dialect. The heirs of Tranquilino immediately took possession of what their predecessors-in-interest actually had as it is limited to the
the entire lot. reconstitution of the certificate as it stood at the time of its loss or
destruction.[17]
When World War II broke out, the heirs of Tranquilino fled Cebu City and
when they came back they found their homes and possessions destroyed. On appeal, the Court of Appeals, while affirming petitioners right to the
The records in the Office of the Register of Deeds, Office of the City Assessor property, nevertheless reversed the RTCs decision on the ground of
and other government offices were also destroyed during the war. prescription and laches. It affirmed the RTCs findings that the Affidavit and
Squatters have practically overrun the entire property, such that neither the Calig-onansaPanagpalit are genuine and authentic, and that the same
petitioners nor respondents possess it. are valid and enforceable documents.[18] Citing Article 1144 of the Civil
Code, it held that petitioners cause of action had prescribed for the action
In October 1993, petitioners learned that one of the must be brought within ten (10) years from the time the right of action
respondents,[11] Asuncion Labiste, had filed on 17 September 1993 a petition accrues upon the written contract which in this case was when petitioners
for reconstitution of title over Lot No. 1054. Petitioners opposed the predecessors-in-interest lost possession over the property after World War
petition at first but by a compromise agreement between the parties II. Also, the lapse of time to file the action constitutes neglect on petitioners
dated 25 March 1994, petitioners withdrew their opposition to expedite the part so the principle of laches is applicable.[19]
reconstitution process. Under the compromise agreement, petitioners were
to be given time to file a complaint so that the issues could be litigated in an Hence, the present petition.
ordinary action and the reconstituted title was to be deposited with the
Clerk of Court for a period of sixty (60) days to allow petitioners to file an The genuineness and authenticity of the Affidavit of Epifanio and the Calig-
action for reconveyance and to annotate a notice of lispendens. The Register onansaPanagpalit are beyond cavil. As we have ruled in a litany of cases,
of Deeds of Cebu City issued the reconstituted title, TCT No. RT-7853,[12] in resort to judicial review of the decisions of the Court of Appeals under Rule
the name of EpifanioLabiste, married to TomasaMabitad, his brothers and 45 is confined only to errors of law.[20] The findings of fact by the lower court
sisters, heirs of Jose Labiste on 14 December 1994. However, respondents are conclusive absent any palpable error or arbitrariness.[21] The Court finds
did not honor the compromise agreement. no reason to depart from this principle. Moreover, it is a long settled
doctrine that findings of fact of the trial court, when affirmed by the Court
Petitioners filed a complaint[13] for annulment of title seeking the of Appeals, are binding upon the Court. It is not the function of the Supreme
reconveyance of property and damages on 13 January 1995, docketed as Court to weigh anew the evidence already passed upon by the Court of
Appeals for these are deemed final and conclusive and may not be reviewed rule requires a clear repudiation of the trust duly communicated to the
on appeal.[22] beneficiary. The only act that can be construed as repudiation was when
respondents filed the petition for reconstitution in October 1993. And since
The sole issue that the Court has to resolve is whether or not petitioners petitioners filed their complaint in January 1995, their cause of action has
cause of action has prescribed. not yet prescribed, laches cannot be attributed to them.

The Court of Appeals erred in applying the rules on prescription and the It is hornbook doctrine that laches is a creation of equity and its application
principle of laches because what is involved in the present case is an express is controlled by equitable considerations. Laches cannot be used to defeat
trust. justice or perpetrate fraud and injustice.[28] Neither should its application be
used to prevent the rightful owners of a property from
Trust is the right to the beneficial enjoyment of property, the legal title to
which is vested in another. It is a fiduciary relationship that obliges the
trustee to deal with the property for the benefit of the beneficiary.[23] Trust
relations between parties may either be express or implied. An express trust recovering what has been fraudulently registered in the name of
is created by the intention of the trustor or of the parties. An implied trust another.[29] The equitable remedy of laches is, therefore, unavailing in this
comes into being by operation of law.[24] case.

Express trusts are created by direct and positive acts of the parties, by some However, to recover the other half of the property covered by the
writing or deed, or will, or by words either expressly or impliedly evincing an private Calig-onansaPanagpalit and to have it registered on the title of the
intention to create a trust.[25] Under Article 1444 of the Civil Code, "[n]o property, petitioners should have filed an action to compel[30] respondents,
particular words are required for the creation of an express trust, it being as heirs of the sellers in the contract,[31] to execute a public deed of sale. A
sufficient that a trust is clearly intended." The Affidavit of Epifanio is in the conveyance of land made in a private document does not affect its validity.
nature of a trust agreement. Epifanio affirmed that the lot brought in his Article 1358,like its forerunner Article 1280 of the Civil Code of Spain, does
name was co-owned by him, as one of the heirs of Jose, and his uncle not require the accomplishment of the acts or
Tranquilino. And by agreement, each of them has been in possession of half contracts in a public instrument in order to validate the act or contract but
of the property. Their arrangement was corroborated by the subdivision only to insure its efficacy,[32] so that after the existence of said contract has
plan prepared by Engr. Bunagan and approved by Jose P. Dans, Acting been admitted, the party bound may be compelled to execute the proper
Director of Lands. document.[33] But even assuming that such action was filed by petitioners,
the same had already prescribed.
As such, prescription and laches will run only from the time the express trust
is repudiated. The Court has held that for acquisitive prescription to bar the It is settled that only laws existing at the time of the execution of a contract
action of the beneficiary against the trustee in an express trust for the are applicable thereto and not later statutes, unless the latter are
recovery of the property held in trust it must be shown that: (a) the trustee specifically intended to have retroactive effect.[34] Consequently, it is the Old
has performed unequivocal acts of repudiation amounting to an ouster of Code of Civil Procedure (Act No. 190) which applies in this case since
the cestuique trust; (b) such positive acts of repudiation have been made the Calig-onansaPanagpalit was executed on 18 October 1939 while the
known to the cestuique trust, and (c) the evidence thereon is clear and New Civil Code took effect only on 30 August 1950. And section 43 of Act
conclusive.[26] Respondents cannot rely on the fact that the Torrens title was No. 190, like its counterpart Article 1144 of the New Civil Code, provides
issued in the name of Epifanio and the other heirs of Jose. It has been held that action upon a written contract must be filed within ten years.[35]
that a trustee who obtains a Torrens title over property held in trust by him
for another cannot repudiate the trust by relying on the registration.[27] The
WHEREFORE, the petition is PARTIALLY GRANTED. The Decision of the Court
of Appeals dated 30 June 2003 in CA-G.R. CV No.
65829 is REVERSED and SET ASIDE and the Decision of
the Regional Trial Court of Cebu City, Branch 9 dated 23 August 1999 is
REINSTATED with MODIFICATION in petitioners are
hereby DECLARED the absolute owners of one-half of Lot No. 1054 or Lot
No. 1054-A under TCT No. RT-7853.The Register of Deeds of Cebu City is
hereby ORDERED to CANCEL TCT No. RT-7853 in part and issue a new
Transfer Certificate of Title to petitioners, heirs of TranquilinoLabiste,
covering Lot No. 1054-A. No costs.
SO ORDERED.