57.30 TEC BI &CO. vs CIR (actually more of a tax case toh..nothing much bwt ltd. Partnership.

nakuha ko pa sa beda na
reviewer pano connect nya sa ltd. Partnership)

Facts: Tec Bi and Company filed a complaint to recover the income taxes paid by Yu Yiong & Co., their predecessor. Yu Yiong and
Co. as a registered general partnership is exempted from paying the income tax. However, the collector of internal revenue alleges
that Yu Yiong ceased to be a registered general co partnership when it failed to register the transfers made; thus, Yu Yiong and Co.
is no longer exempt. It was only recognized when Yu Yiong and Co. admitted the assignees as new partners, by notarial document.
ISSUE: Whether failure to rgister in the Mercantile Register the transfer made converted Yu Yiong and Company into an unregistered
association
HELD:The failure to recognize the transfer did not convert Yu Yiong and Cp. Into an unregistered association. The Court ruled that
having regard the requirements of the articles of association and the provisions of Article 143, the transfers made had no effect as
regards the partnership. The admission of additional partners in the firm under the circumstances mention mentioned did not have the
eddect of dissolving the duly registed general partnership of Yu Yiong and co. and of creating a new unregistered co partnership

TRUST
- A fiduciary relationship between 1 person having an equitable ownership in a property and another owning the legal title to
such property, the equitable ownership of the former entitling him of the performance of certain duties and the exercise of
certain powers by the latter for the benefit of the former.
Kinds:
1. As to effectivity- from the viewpoint of whether they beome effective after death of the trustor or during his life, it may be
either:
a. Testamentary Trust
b. Trust Inter vivos(sometimes called living trust)
2. As to creation- from the viewpoint of the creative force bringing them into existence, it may be either:

a. Express trust- Created by the intention of the trustor or of the parties [Art. 1441]

Elements:

1. Competent trustor or trustee

2. Ascertainable trust res / Trust property

3. Sufficiently certain beneficiaries

b. Implied Trust –Come into being by operation of law (Art. 1441)

This may either be:

i. Resulting trust- one in which the intention to create a trust is presumed by law to exist from the

transaction and facts of th case; or

ii. Constructive trust- one imposed by law irrespective of and even contrary to the intention of the

parties. It is designed to promote justice , frustrate fraud and prevent just enrichment.

3.As to Revocability- from the viewpoint of whether they may be revoked by trustor, they may be either:

a. Revocable trust- one which can be revoked or cancelled by the trustor or another individual given the power; or

b. Irrevocable trust – one which may not be terminated during the specified term of the trust.

 58. VDA. DE ESCONDE vs. CA, G.R. No. 103635 February 1, 1996

FACTS: Petitioners Constancia, Benjamin and Elenita, and private respondent Pedro, are the children of the late Eulogio Esconde
and petitioner Catalina Buan. Eulogio Esconde was one of the children and heirs of Andres Esconde. Andres is the brother of
Estanislao Esconde, the original owner of the disputed lot who died without issue on April 1942. Survived by his only brother, Andres,
Estanislao left an estate consisting of four (4) parcels of land in Samal, Bataan. Eulogio died in April, 1944 survived by petitioners and
private respondent. At that time, Lazara and Ciriaca, Eulogio's sisters, had already died without having partitioned the estate of the
late Estanislao Esconde. On December 5, 1946, the heirs of Lazara, Ciriaca and Eulogio executed a deed of extrajudicial partition.
Since the children of Eulogio, with the exception of Constancia, were then all minors, they were represented by their mother and
judicial guardian, petitioner Catalina Buan vda. de Esconde who renounced and waived her usufructuary rights over the parcels of
land in favor of her children in the same deed.

Sometime in December of 1982, Benjamin discovered that Lot No. 1700 was registered in the name of his brother, private respondent.
Believing that the lot was co-owned by all the children of Eulogio Esconde, Benjamin demanded his share of the lot from private
respondent. However, private respondent asserted exclusive ownership thereof pursuant to the deed of extrajudicial partition. Hence,
on June 29, 1987, petitioners herein filed a complaint before the RTC of Bataan against private respondent for the annulment of TCT
No. 394. In its decision of July 31, 1989, the lower court ruled that the action had been barred by both prescription and laches. Hence,
petitioners elevated the case to the CA which affirmed the lower court's decision.

ISSUE: W/ laches doctrine is applicable to implied trust?

Held: YES. Petitioner-Catalina Buan vda. de Esconde, as mother and legal guardian of her children, appears to have favored her
elder son, private respondent, in allowing that he be given Lot No. 1700 in its entirety in the extrajudicial partition of the Esconde
estate to the prejudice of her other children. After the TCT No. 394 was handed to him by his mother, private respondent exercised
exclusive rights of ownership therein to the extent of even mortgaging the lot when he needed money. If, as petitioners insist, a
mistake was committed in allotting Lot No. 1700 to private respondent, then a trust relationship was created between them and private
respondent. However, private respondent never considered himself a trustee. If he allowed his brother Benjamin to construct or make
improvements thereon, it appears to have been out of tolerance to a brother. Consequently, if indeed, by mistake, private respondent
was given the entirety of Lot No. 1700, the trust relationship between him and petitioners was a constructive, not resulting, implied
trust. Petitioners, therefore, correctly questioned private respondent’s exercise of absolute ownership over the property.
Unfortunately, however, petitioners assailed it long after their right to do so have prescribed.

The rule that a trustee cannot acquire by prescription ownership over property entrusted to him until and unless he repudiates the
trust, applies to express trusts and resulting implied trusts. However, in constructive implied trusts, prescription may supervene
even if the trustee does not repudiate the relationship. Necessarily, repudiation of the said trust is not a condition precedent
to the running of the prescriptive period. Since the action for the annulment of private respondent’s title to Lot No. 1700
accrued during the effectivity of Act No. 190, Section 40 of Chapter III thereof applies. Thus, in Heirs of Jose Olviga v. Court
of Appeals, the Court ruled that the ten-year prescriptive period for an action for reconveyance of real property based on
implied or constructive trust which is counted from the date of registration of the property, applies when the plaintiff is not
in possession of the contested property. In this case, private respondent, not petitioners who instituted the action, is in
actual possession of Lot No. 1700. Having filed their action only on June 29, 1987, petitioners’ action has been barred by
prescription. Not only that. Laches has also circumscribed the action for, whether the implied trust is constructive or
resulting, this doctrine applies.

59.Salao vs Salao L-26699, March 16, 1976

Facts:The spouses Manuel Salao and Valentina Ignacio of Barrio Dampalit, Malabon, Rizal begot four children named Patricio,
Alejandra, Juan (Banli) and Ambrosia. Manuel Salao died in 1885. His eldest son, Patricio, died in 1886 survived by his only child.
Valentin Salao.After Valentina’s death, her estate was administered by her daughter Ambrosia.The documentary evidence proves
that in 1911 or prior to the death of Valentina Ignacio her two children, Juan Y. Salao, Sr. and Ambrosia Salao, secured a Torrens
title, OCT No. 185 of the Registry of Deeds of Pampanga, in their names .The property in question is the forty-seven-hectare fishpond
located at Sitio Calunuran, Lubao, Pampanga, wherein Benita Salao-Marcelo daughter of Valentin Salao claimed 1/3 interest on the
said fishpond.

The defendant Juan Y. Salao Jr. inherited from his father Juan Y. Salao, Sr. ½ of the fishpond and the other half from the donation of
his auntie Ambrosia Salao. It was alleged in the said case that Juan Y. Salao, Sr and Ambrosia Salao had engaged in the fishpond
business. Where they obtained the capital and that Valentin Salao and Alejandra Salao were included in that joint venture, that the
funds used were the earnings of the properties supposedly inherited from Manuel Salao, and that those earnings were used in the
acquisition of the Calunuran fishpond. There is no documentary evidence to support that theory.The lawyer of Benita Salao and the
Children of Victorina Salao in a letter dated January 26, 1951 informed Juan S. Salao, Jr. that his clients had a one-third share in the
two fishponds and that when Juani took possession thereof in 1945, in which he refused to give Benita and Victorina’s children their
one-third share of the net fruits which allegedly amounted to P200,000. However, there was no mention on the deeds as to the share
of Valentin and Alejandra.

Juan S. Salao, Jr. in his answer dated February 6, 1951 categorically stated that Valentin Salao did not have any interest in the two
fishponds and that the sole owners thereof his father Banli and his aunt Ambrosia, as shown in the Torrens titles issued in 1911 and
1917, and that he Juani was the donee of Ambrosia’s one-half share. Benita Salao and her nephews and niece asked for the
annulment of the donation to Juan S. Salao, Jr. and for the reconveyance to them of the Calunuran fishpond as Valentin Salao’s
supposed one-third share in the 145 hectares of fishpond registered in the names of Juan Y. Salao, Sr. and Ambrosia Salao.

Issue:
1 Whether or not the Calunuran fishpond was held in trust for Valentin Salao by Juan Y. Salao, Sr. and Ambrosia Salao.
2 Whether or not plaintiffs’ action for reconveyance had already prescribed.

Held:

1. No. There was no resulting trust in this case because there never was any intention on the part of Juan Y. Salao,
Sr., Ambrosia Salao and Valentin Salao to create any trust. There was no constructive trust because the registration
of the two fishponds in the names of Juan and Ambrosia was not vitiated by fraud or mistake. This is not a case
where to satisfy the demands of justice it is necessary to consider the Calunuran fishpond ” being held in trust by
the heirs of Juan Y. Salao, Sr. for the heirs of Valentin Salao.

Ratio:
A Torrens Title is generally a conclusive evidence of the ownership of the land referred to therein. (Sec. 47, Act 496). A strong
presumption exists that Torrens titles were regularly issued and that they are valid. In order to maintain an action for reconveyance,
proof as to the fiduciary relation of the parties must be clear and convincing.
The plaintiffs utterly failed to prove by clear, satisfactory and convincing evidence. It cannot rest on vague and uncertain evidence or
on loose, equivocal or indefinite declarations.
Trust and trustee; establishment of trust by parol evidence; certainty of proof. — Where a trust is to be established by oral proof, the
testimony supporting it must be sufficiently strong to prove the right of the alleged beneficiary with as much certainty as if a document
proving the trust were shown. A trust cannot be established, contrary to the recitals of a Torrens title, upon vague and inconclusive
proof.
Trusts; evidence needed to establish trust on parol testimony. — In order to establish a trust in real property by parol evidence, the
proof should be as fully convincing as if the act giving rise to the trust obligation were proven by an authentic document. Such a trust
cannot be established upon testimony consisting in large part of insecure surmises based on ancient hearsay. (Syllabus, Santa Juana
vs. Del Rosario 50 Phil. 110).
The foregoing rulings are good under article 1457 of the Civil Code which, as already noted, allows an implied trust to be proven by
oral evidence. Trustworthy oral evidence is required to prove an implied trust because, oral evidence can be easily fabricated.
On the other hand, a Torrens title is generally a conclusive of the ownership of the land referred to therein (Sec. 47, Act 496). A strong
presumption exists. that Torrens titles were regularly issued and that they are valid. In order to maintain an action for reconveyance,
proof as to the fiduciary relation of the parties must be clear and convincing.
The real purpose of the Torrens system is, to quiet title to land. “Once a title is registered, the owner may rest secure, without the
necessity of waiting in the portals of the court, or sitting in the mirador de su casa, to avoid the possibility of losing his land”.

2. Reconveyance had already prescribed. Plaintiffs’ action is clearly barred by prescription or laches.The
Calunuran fishpond was registered in 1911. The written extrajudicial demand for its reconveyance was made by the plaintiffs in 1951.
Their action was filed in 1952 or after the lapse of more than forty years from the date of registration. The plaintiffs and their
predecessor-in-interest, Valentin Salao, slept on their rights if they had any rights at all. Vigilanti prospiciunt jura or the law protects
him who is watchful of his rights (92 C.J.S. 1011, citing Esguerra vs. Tecson, 21 Phil. 518, 521).
“Undue delay in the enforcement of a right is strongly persuasive of a lack of merit in the claim, since it is human nature for a person
to assert his rights most strongly when they are threatened or invaded”. “Laches or unreasonable delay on the part of a plaintiff in
seeking to enforce a right is not only persuasive of a want of merit but may, according to the circumstances, be destructive of the right
itself.”Having reached the conclusion that the plaintiffs are not entitled to the reconveyance of the Calunuran fishpond, it is no longer
to Pass upon the validity of the donation made by Ambrosia Salao to Juan S. Salao, Jr. of her one-half share in the two fishponds The
plaintiffs have no right and personality to assil that donation.

60. Ong Ching PO vs CA

FACTS:On July 1947, Joi Jong sold a parcel of land to private respondent Soledad Parian, the wife of Ong Yee, who died in January
1983. The said sale was evidenced by a notarized Deed of Sale written in English. Subsequently, the document was registered with
the RD of Manila, which issued a TCT dated September 2, 1947 in the name of private respondent Parian.
According to private respondent, she entrusted the administration of the lot and building to the brother of her husband, petitioner Ong
Ching Po when the spouses settled in Iloilo. When her husband died, she demanded that the lot be vacated because she was going
to sell it. Unfortunately, petitioners refused to vacate the said premises.On March 19, 1984, Parian filed a case for unlawful detainer
against petitioner Ong Ching Po before the MTC of Manila. The inferior court dismissed her case, and so did the RTC, Manila and the
CA, the CA decision final and executory.
Petitioners, on the other hand, claimed that on July 23, 1946, petitioner Ong Ching Po bought the said parcel of land from Joi Jong.
The sale was evidenced by a photo copy of a Deed of Sale written in Chinese

On Dec. 6, 1983, petitioner Ong Ching Po executed a Deed of Absolute Sale conveying to his children, petitioners Jimmy and David
Ong, the same property sold by Joi Jong to private respondent Parian in 1947. On Dec. 12 1985, petitioners Ong Ching Po, Jimmy
and David filed an action for reconveyance and damages against private respondent in the RTC, Manila.On July 26, 1986, private
respondent Parian filed an action for quieting of title against petitioners Ong Ching Po and his wife, petitioner Yu Siok Lian, in the
RTC, Manila. Upon her motion, the case was consolidated with the earlier civil case. (petitioner Ong Ching Po died in October 1986.)
On May 30 1990, the trial court rendered a decision in favor of private respondent.On appeal by petitioners to the CA, the said
court affirmed the decision of the RTC.Hence, this petition.

ISSUE: w/ ca erred when it ruled that no express nor implied trust existed between petitioners and private respondent (as stated in
Exh. B)

RULING:
The petition is dismissed. We cannot go along with the claim that petitioner Ong Ching Po merely used private respondent as a dummy
to have the title over the parcel of land registered in her name because being an alien he was disqualified to own real property in the
Philippines. To sustain such an outrageous contention would be giving a high premium to a violation of our nationalization laws.
Assuming that Exhibit “B” is in existence and that it was duly executed, still petitioners cannot claim ownership of the disputed lot by
virtue thereof.

The 1935 Constitution reserved the right to participate in the “disposition, exploitation, development and utilization” of all “lands of the
public domain and other natural resources of the Philippines” for Filipino citizens or corporations at least sixty percent of the capital of
which was owned by Filipinos. Aliens, whether individuals or corporations, have been disqualified from acquiring public lands;
hence, they have also been disqualified from acquiring private lands.

Petitioner Ong Ching Po was a Chinese citizen; therefore, he was disqualified from acquiring and owning real property. Assuming that
the genuineness and due execution of Exhibit “B” has been established, the same is null and void, it being contrary to law.

On expressed trust:
There is no document showing the establishment of an express trust by petitioner Ong Ching Po as trustor and private respondent
Parian as trustee. Not even Exhibit “B” can be considered as such a document because private respondent, the registered owner of
the property subject of said “deed of sale,” was not a party thereto. The oral testimony to prove the existence of the express trust
will not suffice.
Under Article 1443 of the Civil Code of the Philippines, “No express trust concerning an immovable or any interest therein may be
proved by parole evidence.”

On implied trust:
Undaunted, petitioners argue that if they cannot prove an express trust in writing, they can prove an implied trust orally. While an
implied trust may be proved orally (Civil Code of the Philippines, Art. 1457), the evidence must be trustworthy and received by the
courts with extreme caution, because such kind of evidence may be easily fabricated. It cannot be made to rest on vague and uncertain
evidence or on loose, equivocal or indefinite declarations.
Petitioners do not claim that Ong Yee was not in a financial position to acquire the land and to introduce the improvements thereon.
On the other hand, Yu Siok Lian, the wife of petitioner Ong Ching Po, admitted in her testimony in court that Ong Yee was a stockholder
of Lam Sing Corporation and was engaged in business.
1. It is not correct to say that private respondent never took possession of the property. Under the law, possession is transferred to
the vendee by virtue of the notarized deed of conveyance. Under Article 1498 of the Civil Code of the Philippines, “when the sale is
made through a public instrument, the execution thereof shall be equivalent to the delivery of the object of the contract, if from the
deed the contrary does not appear or cannot clearly be inferred.” If what petitioners meant was that private respondent never lived in
the building constructed on said land, it was because her family had settled in Iloilo.

61. Pangan vs CA nG.R. No. L-39299 October 18, 1988

Facts: An application for registration of a parcel of land of 635 square meters was made by petitioners for being in possession of the
same since 1895. This was approved by the court, since there was no opposition, on March 31, 1966.However, on June 8, respondent
Teodora filed a petition to set aside the decision, alleging that the land was inherited by Leon Hilario's three children, but the son,
Felicisimo, waived his right thereto and thereby made his two sisters, Silvestra and Catalina, its exclusive co-owners. As Catalina's
daughter, she was entitled to one-half of the property, the other half going to Silvestra's heirs, the petitioners herein and the latter's
grandchildren. The trial judge however dismissed her petition on the ground that whatever rights Teodora had had been forfeited
under extinctive prescription because she had left the land since 1942 and had not since asserted any claim thereto.

Issue: Did petitioners hold the land in trust for Teodora that would negate their assertion that she had lost her right though extinctive
prescription?
Did Teodora’s failure to assert her claim of ownership allow the statutory period to lapse which enabled petitioners to acquire
ownership through acquisitive possession?

Held: 1-Yes, they did. Petitioners' possession was not for their benefit alone but also in favor of Teodora, who was a co-heir with them
and therefore also a co-owner of the property. In other words, their possession, while adverse to the rest of the world, was not against
Teodora herself, whose share they held in implied trust for her as a co-owner of the land, and whose fruits their father shared
with her occasionally, or at least promised her she would get eventually. The Court believes that this, too, is not an arbitrary conclusion.

2- if the co-owner actually holding the property asserts exclusive dominion over it against the other co-owners, the corollary of the rule
is that he can acquire sole title to it after the lapse of the prescribed prescriptive period.

For title to prescribe in favor of the co-owner, however, there must be a clear showing that he has repudiated the claims of the other
co-owners and that they have been categorically advised of the exclusive claim he is making to the property in question. It is only
when such unequivocal notice has been given that the period of prescription will begin to run against the other co-owners and
ultimately divest them of their own title if they do not seasonably defend it. There is clear repudiation of a trust when one who is an
apparent administrator of property causes the cancellation of the title thereto in the name of the apparent beneficiaries and gets a
new certificate of title in his own name. Such as in this case.

HOWEVER, Manifestly, the petitioners have acted in bad faith in denying their aunt and co-heir her legal share to the property they
had all inherited from Leon Hilario through their respective parents. In cases where there is a clear showing of imposition and
improper motives, the courts must be vigilant in the protection of the rights of the exploited.

There was no adequate notice by the petitioners to the private respondent of the rejection of her claim to her share in the
subject property. Noticeably absent here is a categorical assertion by the petitioners of their exclusive right to the entire property
that barred her own claim of ownership of one-half thereof nor is there any explanation as to why they said she had no right to a
share. If this trusting woman did not immediately take legal action to protect her rights, it was simply because of forbearance toward
her nephews and nieces, let alone the fact that there was really no cases belli as yet that required her to act decisively. That legal
provocation arose only when the petitioners commenced the registration proceedings in 1965, and it was from that time she was
required to act, as she did, to protect her interests.

62. Ancog vs ca

FACTS: Gregorio Yap died, leaving his wife, private Respondent Rosario Diez, and children, petitioners Jovita Yap Ancogand
Gregorio Yap, Jr., and private respondent Caridad Yap as his heirs. In 1954 and again 1958, Rosario Diez obtained loans from the
Bank of Calape, secured by a mortgage on the disputed land.
When Rosario Diez applied again for a loan to the bank, offering the land in question as security, the bank’s lawyer, Atty. Narciso de
la Serna, suggested that she submit an extrajudicial settlement covering the disputed land as a means of facilitating the approval of
her application.Atty. de la Serna prepared an extrajudicial settlement, which the heirs, with the exception of petitioner Gregorio Yap,
Jr., then only 15 years old, signed.

Rosario Diez exercised rights of ownership over the land. In 1985, she brought an ejectment suit against petitioner Jovita Yap Ancog’s
husband and son to evict them from the ground floor of the house built on the land for failure to pay rent. Shortly thereafter, petitioner
Jovita Ancog learned that private respondent Rosario Diez had offered the land for sale.

Ancog immediately informed her younger brother, Gregorio Yap, Jr., who was living in Davao, of their mother’s plan to sell the land.
On June 6,1985, they filed this action for partition in the Regional Trial Court of Bohol where it was docketed as Civil Case No. 3094.
Petitioners alleged that the extrajudicial instrument was simulated and therefore void. They claimed that in signing the instrument they
did not really intend to convey their interests in the property to their mother, but only to enable her to obtain a loan on the security of
the land to cover expenses for Caridad’s school fees and for household repairs. The trial court rendered judgment dismissing
petitioners’ action. CA upheld the validity of the extrajudicial settlement and sustained the trial court’s dismissal of the case.

ISSUE: W/ appellate court erred in ruling that petitioner Gregorio Yap, Jr., one of the co-owners of the litigated property, had lost his
rights to the property through prescription or laches.

HELD: YES. The Supreme Court held that the Court of Appeals erred in ruling that the claim of petitioner Gregorio Yap, Jr. was barred
by laches. In accordance with Rule 74, §1of the Rules of Court, as he did not take part in the partition, he is not bound by the settlement.
It is uncontroverted that, at the time the extrajudicial settlement was executed, Gregorio Yap, Jr. was a minor. For this reason, he was
not included or even informed of the partition. Instead, the registration of the land in Rosario Diez’s name created an implied trust in
his favor by analogy to Art. 1451 of the Civil Code, which provides: “When land passes by succession to any person and he causes
the legal title to be put in the name of another, a trust is established by implication of law for the benefit of the true owner.” In the case
of O’Laco v. Co Cho Chit

,Art. 1451 was held as creating a resulting trust, which is founded on the presumed intention of the parties. As a general rule, it arises
where such may be reasonably presumed to be the intention of the parties, as determined from the facts and circumstances existing
at the time of the transaction out of which it is sought to be established. In this case, the records disclose that the intention of the
parties to the extrajudicial settlement was to establish a trust in favor of petitioner Yap, Jr. to the extent of his share. Rosario Diez
testified that she did not claim the entire property, while Atty. de la Serna added that the partition only involved the shares of the three
participants.A cestui que trust may make a claim under a resulting trust within 10 years from the time the trust is repudiated. Although
the registration of the land in private respondent Diez’s name operated as a constructive notice of her claim of ownership, it cannot
be taken as an act of repudiation adverse to petitioner Gregorio Yap, Jr.’s claim, whose share in theproperty was precisely not included
by the parties in the partition. Indeed, it has not been shown whether he had beeninformed of her exclusive claim over the entire
property before 1985 when he was notified by petitioner Jovita Yap Ancog of their mother’s plan to sell the property.This Court has
ruled that for prescription to run in favor of the trustee, the trust must berepudiated by unequi vocal acts m ade known to the
cestui que trust and pro ved by clear a nd conclusive evidence. Furthermore, the rule that the prescriptive period should be
counted from the date of issuance of the Torrens certificate of titleapplies only to the remedy of reconveyance under the Property
Registration Decree. Since the action brought by petitioner Yapto claim his share was brought shortly after he was informed by Jovita
Ancog of their mother’s effort to sell the property,Gregorio Yap, Jr.’s claim cannot be considered barred either by prescription or by
laches.

63. Laguna vs Levantino

Facts: A month after the death of Bonifacio, his surviving spouse, Ambrosia Levantino, and the heirs of the deceased Justo — Vivencia
and Esteban Laguna Fabie — agreed to divide extrajudicially the respective properties of the two deceased, and to this effect executed
two deeds of partition, the first, Exhibit A, by Vivencia and Esteban Laguna Fabie, purporting to divide the properties left by the
deceased Justo; and, the second, Exhibit B, by Ambrosia Levantino and Vivencia Laguna, purporting to divide the properties left by
the deceased Bonifacio. The two parcels of land aforecited and which constitute the sole subject of the present litigation, were
erroneously included in the second deed of partition, Vivencia Laguna then of the belief that said parcels were conjugal property of
the deceased Bonifacio and his spouse.

Six years thereafter, Vivencia Laguna, discovering the error, instituted an action in the CFI of Pangasinan for the recovery of the
portion erroneously assigned to Ambrosia Levantino. Judgment was rendered declaring, inter alia, the partition null and void and
adjudging the two parcels of land to be the exclusive properties of the petitioner Vivencia Laguna. Respondent Ambrosia Levantino
appealed to the CA which reversed the judgment of the trial court, holding that the deceased Bonifacio Laguna, who had declared the
two parcels of land in question for tax purposes since 1914, had acquired a perfect title thereto by prescription; that petitioner’s action
for the rescission of the partition has prescribed; and that petitioner is in estoppel she having signed the deed of partition.

Issue: W/ CA erred in declaring Bonifacio as the owner by prescription?

Held: YES, from the undisputed facts of the case, Bonifacio Laguna’s possession of the two parcels in question during the
lifetime of his father Justo, appears no more than in the character of trustee. And it is a well-settled rule that possession of
a trustee is, in law, possession of the cestui que trust and, therefore, it cannot be a good ground for title by prescription.
The only instance in which the possession of a trustee may be deemed adverse to the cestui que trust is when the former
makes an open repudiation of the trust by unequivocal acts made known to the latter. It has been held that the trustee may
claim title by prescription founded on adverse possession, where it appears (a) that he has performed unequivocal acts of
repudiation amounting to an ouster of the cestui que trust; (b) that such positive acts of repudiation have been made known
to the cestui que trust; and (c) that the evidence thereon should be clear and conclusive. Acts which may be adverse to
strangers may not be sufficiently adverse to the cestui que trust. A mere silent possession of the trustee unaccompanied
with acts amounting to an ouster of the cestui que trust cannot be construed as an adverse possession. Mere perception of
rents and profits by the trustee, and erecting fences and building adapted for the cultivation of the land held in trust, are not
equivalent to unequivocal acts of ouster of the cestui que trust.

In the instant case, the sole fact of Bonifacio’s having declared the lands in his name for tax purposes, constitutes no such unequivocal
act of repudiation amounting to an ouster of his father, Justo Laguna, and cannot thus constitute adverse possession as basic for title
by prescription.

The Court of Appeals held, however, that, as six years had already elapsed from the date of the execution of the deed of
partition, the action instituted by the petitioner for the rescission of the partition on the ground of lesion had prescribed,
under article 1076 of the Civil Code. But, as correctly ruled by the trial court, the action is not really one of rescission, which
presupposes a valid partition, but, one of reivindicacion, ignoring a void partition, and as such, prescribes in ten years. Such
partition as respect Ambrosia Levantino who has no right to inherit from Justo Laguna is legally non-existing and may be
completely ignored.

The Court of Appeals also ruled that the petitioner, in having signed the deed of partition, is now estopped in impugning its
validity. Suffice it to say that, as a general rule, acquiescence through innocent mistake cannot constitute a basis for
estoppel.