G.R. No.

74449 August 20, 1993

IMELDA A. NAKPIL, petitioner vs. INTERMEDIATE APPELLATE COURT, CARLOS J.

VALDES and CAVAL REALTY CORPORATION, respondents.

FACTS:

The property subject of dispute in the case is Pulong Maulap, a summer residence in Baguio
City. Ownership is in question as to who between the Nakpils and Valdeses own the said
property.

Pinggoy Nakpil and Charlie Valdes were best friends. In 1973, Pinggoy died. In 1979,
petitioner Imelda instituted an action for reconveyance with damages for breach of trust
before the RTC Baguio City against respondents Carlos "Charlie" Valdes and Caval Realty
Corporation.

She alleged in her complaint that her husband Pinggoy prior to his death had requested
Valdes to purchase Pulong Maulap and thereafter register the sale and hold the title thereto
in trust for him (Pinggoy), which respondent Valdes did.

But after Pinggoy’s death, Valdes concealed and suppressed all information regarding the
trust agreement; instead, he transferred Pulong Maulap in the name of respondent Caval
Realty Corporation, which is 99.7% owned by him, in exchange for 1,500 shares of stock.

Respondent Valdes denied the existence of any trust agreement over Pulong Maulap. He
averred that he bought the summer residence for himself with his own funds and without any
participation of the late Nakpil; neither was it bought in trust for the latter.

From the records, it appears that the Valdeses bought Pulong Maulap for P150,000.00 with
respondent Valdes giving a downpayment of P50,000.00 and assuming the vendors'
mortgage obligation of P100,000.00 with the Philippine National Bank (PNB). In 1965, a
deed of sale was executed and TCT was issued in the name of Valdes. As agreed, in the
early part of May 1965, even before the execution of the deed of sale in favor of the
Valdeses, the Nakpils moved in and stayed at Pulong Maulap even until after Pinggoy's
death.

Petitioner Imelda submits that respondent Valdes had recognized her late husband
Pinggoy's ownership of Pulong Maulap on the basis of a letter sent by Carlos J. Valdes &
Co., an accounting firm owned by respondent Valdes, to the City Treasurer of Baguio
remitting to the latter, "[o]n behalf of (our) their clients, Mr. Jose Nakpil . . . the following FUB
checks for the payment of their 1969 real estate taxes" on Pulong Maulap and a letter of
Valdes to petitioner with the latter's handwritten conforme, date and signature.

The RTC ruled that there existed a trust, but the reconveyance of the property cannot be
done because Imelda had waived her right over the property. The CA ruled that there was
no trust.

ISSUE: Whether trust under Article 1450 of the Civil Code exists in the foregoing facts

RULING:

YES. Implied trusts, which may either be resulting or constructive, are those which, without
being express, are deducible from the nature of the transaction as matters of intent, or which
are superinduced on the transaction by operation of law as matter of equity, independently of
the particular intention of the parties. 8 Article 1450, which petitioner invokes in the case at
bar, is an illustration of an implied trust which is constructive.

Article 1450 presupposes a situation where a person, using his own funds, purchases a
certain piece of land in behalf of another who, in the meantime, may not have sufficient
funds to purchase the land. The property is then transferred in the name of the trustee, the
person who paid for the land, until he is reimbursed by the beneficiary, the person for whom
the land is purchased. It is only after the beneficiary reimburses the trustee of the purchase
price that the former can compel conveyance of the purchased property from the latter.

From the evidence adduced, it may be concluded that respondent Valdes, using his own
funds, purchased Pulong Maulap in behalf of the late Nakpil. This is based on the letters to
petitioner of Valdes where he categorically admitted that "[b]oth of these loans, while in my
(respondent Valdes) name, were obtained by Pinggoy (the late Nakpil) for his person, 10
and that the "P75,000.00 initially advanced for the Moran property still remains unpaid.

It is evident from these letters that while the balance of P75,000.00 on the mortgage of the
vendors with PNB was liquidated from the proceeds of a loan respondent obtained from
FUB, such loan was actually secured by the late Nakpil by merely using Valdes' name. Such
is also the case with respect to another FUB loan amounting to P65,000.00, the proceeds of
which were used to finance the repair and renovation of Pulong Maulap. And, while the
downpayment of P50,000.00 and the partial payment of P25,000.00 to PNB came from the
personal funds of Valdes, he considered them as advances to the late Nakpil. Otherwise,
Valdes would never have deemed the amount as "unpaid" in his letter to petitioner of 17
September 1974.

The letter of Valdes to the City Treasurer of Baguio made while remitting payment of real
estate taxes is also enlightening. It provided therein that the payment being tendered was
"[o]n behalf" of the Nakpil's, 12 which is an express recognition of the implied trust.

However, petitioner cannot as yet redeem and compel conveyance of the property. For,
Valdes must still be reimbursed for the advances he made on the disputed property, such
reimbursement being a conditio sine qua non for compelling conveyance under Art. 1450.

The period within which to compel conveyance of Pulong Maulap is not imprescriptible. The
rule is well-settled that an action for reconveyance based on an implied or constructive trust
prescibes in ten (10) years.
G.R. No. 161360 October 19, 2011

ESTRELLA TIONGCO YARED (Deceased) substituted by CARMEN M. TIONGCO a.k.a.

CARMEN MATILDE B. TIONGCO, Petitioner, vs. JOSE B. TIONGCO and ANTONIO G.
DORONILA, JR., Respondents.

FACTS:

The three lots that are in dispute in this case are properties that were inherited by Matilde,
Jose, Vicente, and Felipe Tiongco from their deceased mother. However, all of the four heirs
died already, leaving petitioner Estrella Tiongco Yared, her nephew and defendant Atty.
Jose B. Tiongco and other descendants of the four siblings as the surviving heirs.

Petitioner Estrella built a house on one of the lots and collected rentals from the other two
parcels of land. In 1968, petitioner, as one of the heirs of the deceased Jose (her father),
filed an adverse claim affecting all the rights, interest and participation of her deceased
father on the disputed lots.

In 1983, respondent Atty. Jose prohibited his aunt petitioner Estrella from collecting rentals.
He also filed a suit for recovery of possession with preliminary injunction in which he won
and a case for unlawful detainer with damages against petitioner Estrella as she was staying
one lot where her house was built.

In 1988, petitioner Estrella discovered from the Register of Deeds that respondent Atty. Jose
had already executed an Affidavit of Adjudication dated 1974. He declared that he was the
only surviving heir of the registered owners and adjudicated unto himself the disputed lots.

Atty. Jose sold two lots to Catalino Torre. Another lot was sold to respondent Antonio
Doronila. Thereafter, Catalino Torre sold the lots which he bought from Atty. Jose to
respondent Doronila, and then a few days after, Doronila sold the lots back to Atty. Jose.

In 1990, the petitioner Estrella filed a complaint against her nephew respondent Atty. Jose
and respondent Antonio G. Doronila, Jr. Petitioner argued that respondent Jose knowingly
and wilfully made untruthful statements in the Affidavit of Adjudication because he knew that
there were still other living heirs entitled to the said properties.

Petitioner claimed that the affidavit was null and void ab initio and as such, it did not transmit
or convey any right of the original owners of the properties. Any transfer whatsoever is
perforce likewise null and void.

Moreover, the petitioner averred that since respondent Jose executed said documents
through fraud, bad faith, illegal manipulation and misrepresentation, the lots in dispute
should be reconveyed to its original registered owners.

Petitioner also posited that the affidavit of adjudication was simply voidable, making
respondent Jose a trustee by constructive trust of the property for the benefit of the
petitioner.

The RTC-Iloilo ruled in favor of respondent Jose, stating that prescription has set in since the
complaint was filed only on October 2, 1990 or some sixteen (16) years after respondent
Jose caused to be registered the affidavit of adjudication on May 10, 1974. The CA agreed
with the RTC ruling.
ISSUE: Who has a better right over the properties

RULING:

Petitioner Estrella has a better right over the properties in dispute.

The Court agrees with the CA’s disquisition that an action for reconveyance can indeed be
barred by prescription. In a long line of cases decided by this Court, we ruled that an action
for reconveyance based on implied or constructive trust must perforce prescribe in ten (10)
years from the issuance of the Torrens title over the property.

However, there is an exception to this rule. In the case of Heirs of Pomposa Saludares v.
Court of Appeals, the Court reiterating the ruling in Millena v. Court of Appeals, held that
there is but one instance when prescription cannot be invoked in an action for reconveyance,
that is, when the plaintiff is in possession of the land to be reconveyed. In Heirs of Pomposa
Saludares, this Court explained that the Court in a series of cases,30 has permitted the filing
of an action for reconveyance despite the lapse of more than ten (10) years from the
issuance of title to the land and declared that said action, when based on fraud, is
imprescriptible as long as the land has not passed to an innocent buyer for value. But in all
those cases, the common factual backdrop was that the registered owners were never in
possession of the disputed property. The exception was based on the theory that registration
proceedings could not be used as a shield for fraud or for enriching a person at the expense
of another.

In Alfredo v. Borras, the Court ruled that prescription does not run against the plaintiff in
actual possession of the disputed land because such plaintiff has a right to wait until his
possession is disturbed or his title is questioned before initiating an action to vindicate his
right. His undisturbed possession gives him the continuing right to seek the aid of a court of
equity to determine the nature of the adverse claim of a third party and its effect on his title.
The Court held that where the plaintiff in an action for reconveyance remains in possession
of the subject land, the action for reconveyance becomes in effect an action to quiet title to
property, which is not subject to prescription.

The Court reiterated such rule in the case of Vda. de Cabrera v. Court of Appeals, wherein
we ruled that the imprescriptibility of an action for reconveyance based on implied or
constructive trust applies only when the plaintiff or the person enforcing the trust is not in
possession of the property. In effect, the action for reconveyance is an action to quiet the
property title, which does not prescribe.

Similarly, in the case of David v. Malay the Court held that there was no doubt about the fact
that an action for reconveyance based on an implied trust ordinarily prescribes in ten (10)
years. This rule assumes, however, that there is an actual need to initiate that action, for
when the right of the true and real owner is recognized, expressly or implicitly such as when
he remains undisturbed in his possession, the statute of limitation would yet be irrelevant. An
action for reconveyance, if nonetheless brought, would be in the nature of a suit for quieting
of title, or its equivalent, an action that is imprescriptible.
G.R. No. 83432 May 20, 1991

RADIOWEALTH FINANCE COMPANY, petitioner, vs. MANUELITO S. PALILEO,

respondent.

FACTS:

In 1970, defendant spouses Enrique Castro and Herminia R. Castro sold to plaintiff-appellee
Manuelito Palileo, a parcel of unregistered coconut land. The sale is evidenced by a
notarized Deed of Absolute Sale. The deed was not registered in the Registry of Property for
unregistered lands in the province of Surigao del Norte. Since the execution of the deed of
sale, appellee Manuelito Palileo exercised acts of ownership over the land through his
mother Rafaela Palileo, as administratrix or overseer. Appellee has continuously paid the
real estate taxes on said land from 1971 until the present.

In 1976, a judgment was rendered against defendant Enrique T. Castro to pay herein
defendant-appellant Radiowealth Finance Company (petitioner). Upon the finality of the
judgment, a writ of execution was issued. Pursuant to said writ, defendant provincial Sheriff
Marietta E. Eviota, through defendant Deputy Provincial Sheriff Leopoldo Risma, levied upon
and finally sold at public auction the subject land that defendant Enrique Castro had sold to
appellee Manuelito Palileo in 1970. A certificate of sale was executed by the Provincial
Sheriff in favor of defendant- appellant Radiowealth Finance Company, being the only
bidder. After the period of redemption expired, a deed of final sale was also executed by the
same Provincial Sheriff. Both the certificate of sale and the deed of final sale were registered
with the Registry of Deeds.

Learning of what happened to the land, private respondent Manuelito Palileo filed an action
for quieting of title over the same. After a trial on the merits, the court rendered a decision in
his favor. On appeal, the decision of the trial court was affirmed. Hence, this petition for
review on certiorari.

ISSUE: Whether there was a double sale

RULING: NO. There was no double sale. However, it must be stressed that this case deals
with a parcel of unregistered land and a different set of rules applies. We affirm the decision
of the Court of Appeals.

Under Act No. 3344, registration of instruments affecting unregistered lands is "without
prejudice to a third party with a better right". The aforequoted phrase has been held by this
Court to mean that the mere registration of a sale in one's favor does not give him any right
over the land if the vendor was not anymore the owner of the land having previously sold the
same to somebody else even if the earlier sale was unrecorded.

The case of Carumba vs. Court of Appeals6 is a case in point. It was held therein that Article
1544 of the Civil Code has no application to land not registered under Act No. 496. Like in
the case at bar, Carumba dealt with a double sale of the same unregistered land. The first
sale was made by the original owners and was unrecorded while the second was an
execution sale that resulted from a complaint for a sum of money filed against the said
original owners. Applying Section 35, Rule 39 of the Revised Rules of Court,7 this Court held
that Article 1544 of the Civil Code cannot be invoked to benefit the purchaser at the
execution sale though the latter was a buyer in good faith and even if this second sale was
registered. It was explained that this is because the purchaser of unregistered land at a
sheriff’s execution sale only steps into the shoes of the judgment debtor, and merely
acquires the latter's interest in the property sold as of the time the property was levied upon.

Applying this principle, the Court of Appeals correctly held that the execution sale of the
unregistered land in favor of petitioner is of no effect because the land no longer belonged to
the judgment debtor as of the time of the said execution sale.
G.R. No. 109410 August 28, 1996

CLARA M. BALATBAT, petitioner, vs. COURT OF APPEALS and Spouses JOSE

REPUYAN and AURORA REPUYAN, respondents.

FACTS:

A parcel of land was acquired by plaintiff Aurelio Roque and Maria Mesina during their
conjugal union. Maria died on August 28, 1966. On June 15, 1977, Aurelio filed a case for
partition. The trial court held that Aurelio is entitled to the ½ portion at his share in the
conjugal property, and 1/5 of the other half which formed part of Maria’s estate, divided
equally among him at his 4 children. The decision having become final and executory, the
Register of Deeds of Manila issued a transfer certificate of title on October 5, 1979 according
to the ruling of the court. On April 1, 1980, Aurelio sold his 6/10 share to spouses Aurora
Tuazon-Repuyan and Jose Repuyan, as evidenced by a deed of absolute sale. On June 21,
1980, Aurora caused the annotation of her affidavit of adverse claim. On August 20, 1980,
Aurelio filed a complaint for rescission of contract grounded on the buyers’ failure to pay the
balance of the purchase price. On February 4, 1982, another deed of absolute sale was
executed between Aurelio and his children, and herein petitioner Clara Balatbat, involving
the entire lot. Balatbat filed a motion for the issuance of writ of possession, which was
granted by the court on September 20, 1982, subject to valid rights and interests of third
persons. Balatbat filed a motion to intervene in the rescission case, but did not file her
complaint in intervention. The court ruled that the sale between Aurelio and Aurora is valid.

ISSUE: Whether there was a double sale as contemplated under Article 1544 of the Civil
Code

RULING:

No. Article 1544 of the Civil Code provides that in case of double sale of an immovable
property, ownership shall be transferred (1) to the person acquiring it who in good faith first
recorded it in the Registry of Property; (2) in default thereof, to the person who in good faith
was first in possession; and (3) in default thereof, to the person who presents the oldest title,
provided there is good faith. 34

In the case at bar, vendor Aurelio Roque sold 6/10 portion of his share in TCT No. 135671 to
private respondents Repuyan on April 1, 1980. Subsequently, the same lot was sold again
by vendor Aurelio Roque (6/10) and his children (4/10), represented by the Clerk of Court
pursuant to Section 10, Rule 39 of the Rules of Court, on February 4, 1982. Undoubtedly,
this is a case of double sale contemplated under Article 1544 of the New Civil Code.

This is an instance of a double sale of an immovable property hence, the ownership shall
vests in the person acquiring it who in good faith first recorded it in the Registry of Property.
Evidently, private respondents Repuyan's caused the annotation of an adverse claim on the
title of the subject property denominated as Entry No. 5627/T-135671 on July 21, 1980. 35
The annotation of the adverse claim on TCT No. 135671 in the Registry of Property is
sufficient compliance as mandated by law and serves notice to the whole world.
G.R. No. 194846 June 19, 2013

HOSPICIO D. ROSAROSO, ANTONIO D. ROSAROSO, MANUEL D. ROSAROSO,

ALGERICA D. ROSAROSO, and CLEOFE R. LABINDAO, Petitioners, vs. LUCILA
LABORTE SORIA, SPOUSES HAM SOLUTAN and **LAILA SOLUTAN, and MERIDIAN
REALTY CORPORATION, Respondents.

FACTS:

Sps. Luis and Honorata acquired several real properties in Daan Banatayan, Cebu City,
including the subject properties. The couple had nine (9) children namely: Hospicio, Arturo,
Florita, Lucila, Eduardo, Manuel, Cleofe, Antonio, and Angelica. On April 25, 1952, Honorata
died. Later on, Luis married Lourdes Pastor Rosaroso (Lourdes).

On January 16, 1995, a complaint for Declaration of Nullity of Documents with Damages was
filed by Luis, as one of the plaintiffs, against his daughter, Lucila; Lucila’s daughter, Laila;
and Meridian Realty Corporation (Meridian). Due to Luis’ untimely death, however, an
amended complaint was filed on January 6, 1996, with the spouse of Laila, Ham Solutan
(Ham); and Luis’ second wife, Lourdes, included as defendants.

In the amended complaint, it was alleged by petitioners that a Deed of Absolute Sale was
executed with the full knowledge and consent of the second wife covering the properties
located at Daanbantayan, Cebu, in their favor.

Petitioners also alleged that the second sale took place when the respondents made Luis
sign the Deed of Absolute Sale conveying to Meridian three (3) parcels of residential land;
that Meridian was in bad faith when it did not make any inquiry as to who were the
occupants and owners of said lots; and that if Meridian had only investigated, it would have
been informed as to the true status of the subject properties and would have desisted in
pursuing their acquisition.

Lourdes posited that her signature as well as that of Luis appearing on the deed of sale in
favor of petitioners was obtained through fraud, deceit and trickery. She explained that tey
signed the prepared deed out of pity because petitioners told them that it was necessary for
a loan application. In fact, there was no consideration involved in the First Sale. With respect
to the Second sale, she never encouraged the same and neither did she participate in it. It
was purely her husband’s own volition that the second sale materialized. She, however,
affirmed that she received Meridian’s payment on behalf of her husband who was then
bedridden.

ISSUE: Whether Meridian is a buyer in good faith?

RULING:

Meridian is not a buyer in good faith. The fact that Meridian had them first registered will not
help its cause. In case of double sale, Article 1544 of the Civil Code provides:

ART. 1544. If the same thing should have been sold to different vendees, the ownership
shall be transferred to the person who may have first possession thereof in good faith, if it
should be movable property.

Should it be immovable property, the ownership shall belong to the person acquiring it who
in good faith first recorded it in the Registry of Property. Should there be no inscription, the
ownership shall pertain to the person who in good faith was first in possession; and, in the
absence thereof; to the person who presents the oldest title, provided there is good faith.
Otherwise stated, ownership of an immovable property which is the subject of a double sale
shall be transferred:

(1) to the person acquiring it who in good faith first recorded it in the Registry of Property;
(2) in default thereof, to the person who in good faith was first in possession; and
(3) in default thereof, to the person who presents the oldest title, provided there is good faith.

The requirement of the law then is two-fold: acquisition in good faith and registration in good
faith.

Good faith must concur with the registration. If it would be shown that a buyer was in bad
faith, the alleged registration they have made amounted to no registration at all.

The principle of primus tempore, potior jure (first in time, stronger in right) gains greater
significance in case of a double sale of immovable property. When the thing sold twice is an
immovable, the one who acquires it and first records it in the Registry of Property, both made
in good faith, shall be deemed the owner. Verily, the act of registration must be coupled with
good faith— that is, the registrant must have no knowledge of the defect or lack of title of his
vendor or must not have been aware of facts which should have put him upon such inquiry
and investigation as might be necessary to acquaint him with the defects in the title of his
vendor.

When a piece of land is in the actual possession of persons other than the seller, the buyer
must be wary and should investigate the rights of those in possession. Without making such
inquiry, one cannot claim that he is a buyer in good faith. When a man proposes to buy or
deal with realty, his duty is to read the public manuscript, that is, to look and see who is there
upon it and what his rights are. A want of caution and diligence, which an honest man of
ordinary prudence is accustomed to exercise in making purchases, is in contemplation of
law, a want of good faith. The buyer who has failed to know or discover that the land sold to
him is in adverse possession of another is a buyer in bad faith.
G.R. No. 211175

ATTY. REYES G. GEROMO, FLORENCIO BUENTIPO, JR., ERNALDO YAMBOT and

LYDIA BUSTAMANTE, Petitioners, vs. LA PAZ HOUSING AND DEVELOPMENT
CORPORATION and GOVERNMENT SERVICE INSURANCE SYSTEM, Respondents.

FACTS:

Petitioners Geromo, Buentipo, Yambot, and Bustamante acquired individual housing units of
Adelina Subdivision from LaPaz, the owner/developer, through GSIS financing. The houses
were situated along an old creek. After two years of occupation, cracks started to appear on
the units. As a remedy, the developer constructed a riprap/retaining wall along the creek.
Despite the construction of the wall, the conditions of the houses worsened, which prompted
them to leave.

Later on, through the inspection of the subject properties, the DENR found that there was
“differential settlement of the area where the affected units were constructed.” Due to this
basis, Geromo file a complaint against La Paz and GSIS.

ISSUE: Whether La Paz should be held liable for the structural defects on its implied
warranty against hidden defects.

RULING: Yes, La Paz is liable for the structural defects on its implied warranty against
hidden defects. Under Civil Code Article 1561, The vendor shall be responsible for warranty
against the hidden defects which the thing sold may have, should they render it unfit for the
use for which it is intended, or should they diminish its fitness for such use to such an extent
that, had the vendee been aware thereof, he would not have acquired it or would have given
a lower price for it; but said vendor shall not be answerable for patent defects or those which
may be visible, or for those which are not visible if the vendee is an expert who, by reason of
this trade or profession, should have known them. And under Article 1566 of the Civil Code,
the vendor is responsible to the vendee for any hidden faults or defects in the thing sold,
even though he was not aware thereof. This provision shall not apply if the contrary has
been stipulated and the vendor was not aware of the hidden faults or defects in the thing
sold.
G.R. No. 174240 March 20, 2013

SPOUSES LEHNER and LUDY MARTIRES, Petitioners, vs. MENELIA CHUA,

Respondent.

FACTS:

ISSUE:

RULING:
G.R. No. 165287 September 14, 2011

ARMANDO BARCELLANO, Petitioner, vs. DOLORES BAÑAS, represented by her son

and Attorney-in-fact CRISPINO BERMILLO, Respondent

FACTS:

Respondent Dolores Banās, an heir of Bartolome Banās owned a lot in Bacacay, Albay.
Adjoining the said lot is a property owned by Vicente Medina. In 1997, Medina offered his lot
for sale to the owners of the adjoining lots. The property was eventually sold to Armando
Barcellano. The heirs of Banās contested the sale, and conveyed their intention to redeem
the property. However, according to Medina, the deed of sale has been executed. There was
also mention that the Banās heirs failed to give the amount required by Medina for them to
redeem the lot. Action to redeem the property was filed before the RTC. It denied the petition
on the ground that the Banās heirs failed to exercise their right to redemption within the
period provided in article 1623 of NCC. On appeal, such ruling was reversed.

ISSUE: W/N the RTC decision to deny the Banās heirs of their right of legal redemption is
valid

HELD: The court denied the petition, and affirmed the appellate court decision granting the
Banās heirs the right to redeem the subject property. The decision was based on the
provisions of article 1623 NCC.

We need only to discuss the requirement of notice under Art. 1623 of the New Civil Code,
which provides that: The right of legal pre-emption or redemption shall not be exercised
except within thirty days from the notice in writing by the prospective vendor, or by the
vendor, as the case may be. The deed of sale shall not be recorded in the Registry of
Property, unless accompanied by an affidavit of the vendor that he has given written notice
thereof to all possible redemptioners. A written notice must be issued by the prospective
vendor. Nothing in the record and pleadings submitted by the parties showed that there was
a written notice sent to the respondents. Without a written notice, the period of 30 days
within which the right of legal redemption may be exercised does not exist. In this case, the
law was clear. A written notice by the vendor is mandatory.