G.R. No.

184109               February 1, 2012

CELERINO E. MERCADO, Petitioner, 
vs.
BELEN* ESPINOCILLA** AND FERDINAND ESPINOCILLA, Respondents.

Facts:
Salvacion, Aspren, Isabel, Macario, and Dionisia divided Lot No. 552, with an area of 570 sq. m., equally among themselves when their
father Doroteo died. Macario took possession of Dionisia’s share when the latter died without issue ahead of her four siblings claiming
that Dionisia donated her share to him. Thereafter, Macario and his daughters sold 225 sq. m. to his son Roger Espinocilla, husband of
Belen Espinocilla and father of Ferdinand Espinocilla. Roger then sold the 114 sq. m. to Caridad Atienza.

Celerino sued Belen and Ferdinand for an alleged encroachment of 39 sq. m. Celerino avers that he is entitled to own and possess 171
sq. m. of Lot No. 552, having inherited 142.5 sq. m. from his mother and bought 28.5 sq. m. from his aunt Aspren. According to him,
his mother’s inheritance is 142.5 sq. m., that is, 114 sq. m. from Doroteo plus 28.5 sq. m. from Dionisia. Since the area he occupies is
only 132 sq. m., he claims that Belen and Ferdinand encroach on his share by 39 sq. m. Belen and Ferdinand agree that Doroteo’s five
children each inherited 114 sq. m.. However, Macario’s share increased when he received Dionisia’s share which the former then sold
to his son Roger. Belen and Ferdinand claim that they rightfully possess the land they occupy by virtue of acquisitive prescription and
that there is no basis for Celerino’s claim of encroachment. The RTC ruled in favor of Celerino there being no public document to prove
Dionisia’s donation. On appeal, the CA reversed the RTC decision and dismissed Celerino’s complaint on the ground that extraordinary
acquisitive prescription has already set in in favor of Belen and Ferdinand. Before the SC, Celerino concludes that if a person obtains
legal title to property by fraud or concealment, courts of equity will impress upon the title a so-called constructive trust in favor of the
defrauded party.

Issue:
WON the action to recover the subject portion is barred by prescription.

Held:
Yes. The Court held that Celerino admits the adverse nature of Belen and Ferdinand’s possession with his assertion that Macario’s
fraudulent acquisition of Dionisia’s share created a constructive trust. In a constructive trust, there is neither a promise nor any
fiduciary relation to speak of and the so-called trustee (Macario) neither accepts any trust nor intends holding the property for the
beneficiary (Salvacion, Aspren, Isabel). The relation of trustee and cestui que trust does not in fact exist, and the holding of a
constructive trust is for the trustee himself, and therefore, at all times adverse. Prescription may supervene even if the trustee does not
repudiate the relationship.

The CA correctly dismissed Celerino’s complaint as an action for reconveyance based on an implied or constructive trust prescribes in
10 years from the time the right of action accrues. This is the other kind of prescription under the Civil Code, called extinctive
prescription, where rights and actions are lost by the lapse of time. Celerino’s action for recovery of possession having been filed 55
years after Macario occupied Dionisia’s share, it is also barred by extinctive prescription.
G.R. No. 159494               July 31, 2008
ROGELIO, GEORGE, LOLITA, ROSALINDA, and JOSEPHINE, all surnamed PASIÑO, represented by their father and
attorney-in-fact JOSE PASIÑO Petitioners, 
vs.
DR. TEOFILO EDUARDO F. MONTERROYO, ROMUALDO MONTERROYO, MARIA TERESA MONTERROYO, and STEPHEN
MONTERROYO, Respondents.

Facts:
Rogelio, George, Lolita, Rosalinda and Josephine, all surnamed Pasiño, represented by their father and attorney-in-fact Jose Pasiño
(petitioners) filed an an action for recovery of possession and damages, with prayer for the issuance of a temporary restraining order
or writ of preliminary mandatory injunction against Dr. Teofilo Eduardo F. Monterroyo (Dr. Monterroyo), later substituted by his heirs
Romualdo, Maria Teresa and Stephen, all surnamed Monterroyo (respondents). Petitioners claimed that Laureano’s heirs, headed by his
son Jose, continuously possessed and cultivated both lots and alleged that their possession of Lot No. 2139 was interrupted on 3
January 1993 when respondents forcibly took possession of the property. Respondents alleged that they had been in open, continuous,
exclusive and notorious possession of Lot No. 2139, by themselves and through their predecessors-in-interest, since 10 July 1949
through a deed of sale.

Issue:
WON Dr. Monterroyo, et al. have a better right over Rogelio Pasiño, et al.

Held:
Yes. The Court held that under the principle of constructive trust, registration of property by one person in his name, whether by
mistake or fraud, the real owner being another person, impresses upon the title so acquired the character of a constructive trust for the
real owner, which would justify an action for reconveyance. In the action for reconveyance, the decree of registration is respected as
incontrovertible but what is sought instead is the transfer of the property wrongfully or erroneously registered in another’s name to its
rightful owner or to one with a better right. If the registration of the land is fraudulent, the person in whose name the land is
registered holds it as a mere trustee, and the real owner is entitled to file an action for reconveyance of the property.

In the case before us, respondents were able to establish that they have a better right to Lot No. 2139 since they had long been in
possession of the property in the concept of owners, by themselves and through their predecessors-in-interest. Hence, despite the
irrevocability of the Torrens titles issued in their names and even if they are already the registered owners under the Torrens system,
petitioners may still be compelled under the law to reconvey the property to respondents.
G.R. No. 173533               December 14, 2009
VICENTE N. LUNA, JR., Petitioner, 
vs.
NARIO CABALES, OSCAR PABALAN, JEREMIAS JUARBAL AND REMEDIOS ROSIL, Respondents.

Facts:
After the death of the Spouses Pablo Martinez and Gregoria Acevedo, owners of a three-hectare parcel of land, their two heirs-
daughters Eustaquia Martinez and Martina Martinez partitioned the property. Eustaquia got married and bore three children, namely
Ciriaco, Damaso and Valentina. Ciriaco filed an application for a free patent over his mother’s share of the property as well as that of
Martina’s which was granted. It appears that in 1971, Ciriaco started gathering the coconuts planted on Martina’s share of the
property, drawing Martina’s granddaughter Remedios to file a complaint for recovery of possession against Ciriaco but was dismissed.
Upon Ciriaco’s death, his heirs subdivided the entire property into eight lots. Ciriaco’s heirs sold to Vicente Luna, Jr. one of the lots.

Vicente N. Luna, Jr., through his administrator and attorney-in-fact Antonio Martinez, filed a complaint for recovery of possession
against Pedro Belano and respondents Nario Cabales, Oscar Pabalan and Jeremias Juarbal before the RTC. More than two months later
he amended the complaint to also implead as Remedios, Martina’s granddaughter. Only Remedios filed an answer to the complaint. In
her Answer to Amended Complaint with Counterclaim, Remedios asserted that she inherited the subject lot from her predecessors-in-
interest on which she and her children were born and raised; and that Belano is her son-in-law while Cabales, Pabalan, and Juarbal are
mere tenants.

Issue:
WON Vicente N. Luna, Jr. has a better right over Remedios Rosil.

Held:
Yes. The Court held that the registration of a property in one’s name, whether by mistake or fraud, the real owner being another,
impresses upon the title so acquired the character of a constructive trust for the real owner. The person in whose name the land is
registered holds it as a mere trustee, and the real owner is entitled to file an action for reconveyance of the property. The Torrens
system does not protect a usurper from the true owner.

Respondent Remedios having established that she has a better right to subject lot, petitioner must, by virtue of constructive trust,
reconvey it to her.
G.R. No. 162033               May 8, 2009
HEIRS OF TRANQUILINO LABISTE (also known as Tranquilino Laviste) represented by: 
(1) GERARDO LABISTE, representing the Heirs of Gregorio Labiste; 
(2) OBDULLIA LABISTE GABUAN, representing the heirs of Juan Labiste; 
(3) VICTORIA G. CHIONG, representing the Heirs of Eulalia Labiste; 
(4) APOLINARIA LABISTE YLAYA, representing the Heirs of Nicolasa Labiste; 
(5) DEMOSTHENES LABISTE, representing the Heirs of Gervacio Labiste; 
(6) ALEJANDRA LABISTE; representing the Heirs of SINFROCIO LABISTE, and 
(7) CLOTILDE LABISTE CARTA, representing the Heirs of Andres Labiste, Petitioners, 
vs.
HEIRS OF JOSE LABISTE, survived by his children, 
(1) ZACARIAS LABISTE, deceased and survived by his children, namely: CRESENCIA LABISTE and EUFRONIO LABISTE; 
(2) BERNARDINO LABISTE, deceased and survived by his children, namely: POLICARPIO LABISTE, BONIFACIO
LABISTE, FELIX LABISTE, GABINA LABISTE, CAYETANA LABISTE and ISABEL LABISTE; 
(3) LUCIA LABISTE, deceased and survived by her children, namely: ISAAC LABISTE, GENARO LABISTE, BRAULIA
LABISTE, BRAULIO LABISTE, ASUNCION LABISTE, ALFONSO LABISTE and CLAUDIA LABISTE; 
(4) EPIFANIO LABISTE and CLAUDIA LABISTE; deceased and survived by his children, namely SILVESTRE LABISTE,
PAULA LABISTE and GERARDA LABISTE; 
(5) ANA LABISTE, deceased and survived by her children, namely: MAXIMO LABISTE, MOISES LABISTE, GERVACIO
LABISTE, SATURNINA LABISTE and QUIRINO LABISTE; 
(6) SEVERO LABISTE, deceased and survived by his children, Namely: FELIX LABISTE, RUFINA LABISTE, SIMPLICIO
LABISTE, VICENTE LABISTE and PATRICIO LABISTE, Respondents.

Facts:
Epifanio Labiste, on his own and on behalf of his brothers and sisters who were the heirs of Jose Labiste, purchased from the Bureau of
Lands Lot No. 1054 of the Banilad Friar Lands Estate. 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. The records in the Office of the Register of Deeds, Office of the
City Assessor and other government offices were also destroyed during the war. Squatters have practically overrun the entire property,
such that neither petitioners nor respondents possess it. In October 1993, the Heirs of Tranquilino Labiste learned that one of the
respondents, Asuncion Labiste, had filed a petition for reconstitution of title over Lot No. 1054. The Heirs of Tranquilino Labiste
opposed the petition at first but by a compromise agreement between the parties, they withdrew their opposition to expedite the
reconstitution process. Under the compromise agreement, the Heirs of Tranquilino Labiste were to be given time to file a complaint so
that the issues could be litigated in an ordinary action and the reconstituted title was to be deposited with the Clerk of Court for a
period of sixty (60) days to allow the Heirs of Tranquilino Labiste to file an action for reconveyance and to annotate a notice of lis
pendens. The Register of Deeds of Cebu City issued the reconstituted title in the name of "Epifanio Labiste, married to Tomasa
Mabitad, his brothers and sisters, heirs of Jose Labiste". However, the Heirs of Jose Labiste did not honor the compromise agreement.
The Heirs of Tranquilino Labiste filed a complaint for annulment of title seeking the reconveyance of property and damages with the
RTC of Cebu City. The Heirs of Jose Labiste claimed that the Affidavit of Epifanio and the Calig-onan sa Panagpalit were forgeries and
that Heirs of Tranquilino Labiste’s action had long prescribed or barred by laches. The RTC ruled in favor of the Heirs of Tranquilino
Labiste. However, the CA, while affirming Heirs of Tranquilino Labiste’s right to the property, nevertheless reversed the RTC’s decision
on the ground of prescription and laches.

Issue:
WON the rules on prescription and the principle of laches is not applicable because what is involved in the present case is an express
trust.

Held:
Yes. Express trusts are created by direct and positive acts of the parties, by some writing or deed, or will, or by words either expressly
or impliedly evincing an intention to create a trust. Under Article 1444 of the Civil Code, "[n]o particular words are required for the
creation of an express trust, it being sufficient that a trust is clearly intended." 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 action of the beneficiary against the
trustee in an express trust for the recovery of the property held in trust it must be shown that: (a) the trustee has performed
unequivocal acts of repudiation amounting to an ouster of the cestui que trust; (b) such positive acts of repudiation have been made
known to the cestui que trust, and (c) the evidence thereon is clear and conclusive.

Respondents cannot rely on the fact that the Torrens title was issued in the name of Epifanio and the other heirs of Jose. It has been
held 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. The rule requires a clear repudiation of the trust duly communicated to the beneficiary. The only act that can be
construed as repudiation was when respondents filed the petition for reconstitution in October 1993. And since petitioners filed their
complaint in January 1995, their cause of action has not yet prescribed, laches cannot be attributed to them.
G.R. No. 151334               February 13, 2013
CAROLINA (CARLINA) VDA. DE FIGURACION, HEIRS OF ELENA FIGURACION-ANCHETA, namely: LEONCIO ANCHETA,
JR., and ROMULO ANCHETA, HEIRS OF HILARIA A. FIGURACION, namely: FELIPA FIGURACION-MANUEL, MARY
FIGURACION-GINEZ, and EMILIA FIGURACION-GERILLA, AND HEIRS OF QUINTIN FIGURACION, namely: LINDA M.
FIGURACION, LEANDRO M. FIGURACION, II, and ALLAN M. FIGURACION, Petitioners, 
vs.
EMILIA FIGURACION-GERILLA, Respondent.

Facts:
Subject of the dispute are two parcels of land both situated in Urdaneta, Pangasinan, which were acquired by Leandro during his
lifetime. These properties were: (1) Lot No. 2299 with a land area of 7,547 square meters; and (2) Lot No. 705 measuring 2,900
square meters. Both lands were registered in the name of "Leandro Figuracion married to Carolina Adviento". Leandro executed a Deed
of Quitclaim over the above real properties in favor of his six (6) children. Their shares, however, were not delineated with particularity
because spouses Leandro and Carolina reserved the lots and its fruits for their expenses. Also involved in the controversy is Lot No.
707 with an area of 3,164 square meters originally owned by Eulalio. Eulalio begot Agripina Adviento with his first wife Marcela Estioko,
whom Eulalio survived. When he remarried, Eulalio had another daughter, herein petitioner Carolina, with his second wife, Faustina
Escabesa. Agripina executed a Deed of Quitclaim over the eastern half of Lot No. 707 in favor of her niece, herein respondent Emilia.
Carolina executed an Affidavit of Self-Adjudication adjudicating unto herself the entire Lot No. 707 as the sole and exclusive heir of her
deceased parents, Eulalio and Faustina. She also executed a Deed of Absolute Sale over Lot No. 707 in favor of petitioners Hilaria and
Felipa, who in turn immediately caused the cancellation of OCT No. 15867 and the issuance of TCT No. 42244 in their names. Emilia
and her family went to the United States and returned to the Philippines and built a house on the eastern half of Lot No. 707 relying on
the Deed of Quitclaim. Hilaria and her agents threatened to demolish the house of Emilia who, in retaliation, was prompted to seek the
partition of Lot No. 707 as well as Lot Nos. 2299 and 705. In opposition, Carolina Vda. De Figuracion, et al. averred that an action for
partition is no longer tenable because Felipa and Hilaria have already acquired rights adverse to that claimed by respondent Emilia and
the same amount to a repudiation of the alleged co-ownership.

Issue:
WON there exist an implied trust.

Held:
Yes. The Court held that when Hilaria and Felipa registered the lot in their names to the exclusion of Emilia, an implied trust was
created by force of law and the two of them were considered a trustee of the respondent’s undivided share. As trustees, they cannot
be permitted to repudiate the trust by relying on the registration. In Ringor v. Ringor, the Court had the occasion to explain the reason
for this rule:

A trustee who obtains a Torrens title over a property held in trust for him by another cannot repudiate the trust by relying on the
registration. A Torrens Certificate of Title in Jose’s name did not vest ownership of the land upon him. The Torrens system does not
create or vest title. It only confirms and records title already existing and vested. It does not protect a usurper from the true owner.
The Torrens system was not intended to foment betrayal in the performance of a trust. It does not permit one to enrich himself at the
expense of another. Where one does not have a rightful claim to the property, the Torrens system of registration can confirm or record
nothing. Petitioners cannot rely on the registration of the lands in Jose’s name nor in the name of the Heirs of Jose M. Ringor, Inc., for
the wrong result they seek. For Jose could not repudiate a trust by relying on a Torrens title he held in trust for his co-heirs.1âwphi1
The beneficiaries are entitled to enforce the trust, notwithstanding the irrevocability of the Torrens title. The intended trust must be
sustained.