Salao vs.

Salao
[G.R. No. L-26699. March 16, 1976.]
Facts: This litigation regarding a 47-hectare fishpond located at Sitio Calunuran, Hermosa, Bataan
involves the law of trusts and prescription. 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. There is no documentary evidence as to what properties formed part of Manuel Salao's estate, if
any. His widow died on May 28, 1914.
After her death, her estate was administered by her daughter Ambrosia. It was partitioned extrajudicially
in a deed dated December 29, 1918 but notarized on May 22, 1919. The deed was signed by her four legal
heirs, namely, her three children, Alejandra, Juan and Ambrosia, and her grandson, Valentin Salao, in
representation of his deceased father, Patricio. The lands left by Valentina Ignacio, all located at Barrio
Dampalit. To each of the legal heirs of Valentina Ignacio was adjudicated a distributive share valued at
P8,135.25. In satisfaction of his distributive share, Valentin Salao was given the biggest fishpond with an
area of 50,469 square meters, a smaller fishpond with an area of 6,989 square meters and the riceland
with a net area of 9,905 square meters. Those parcels of land had an aggregate appraised value of P13,501
which exceeded Valentin's distributive share. In the deed of partition, he was directed to pay to his co-
heirs the sum of P5,365.75. That arrangement, which was obviously intended to avoid the fragmentation
of the lands was beneficial to Valentin. It was expressly stipulated that Ambrosia Salao was not obligated
to render any accounting of her administration.
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 in Registry of Deeds of Pampanga, in their
names for a 47 hectare fishpond located at Sitio Calunuran, Lubao, Pampanga. The Calunuran fishpond is
the bone of contention in this case. Plaintiffs' theory is that Juan Y. Salao, Sr. and his sister Ambrosia had
engaged in the fishpond business. Where they obtained the capital is not shown in any documentary
evidence.
Plaintiffs' version is 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. On the other hand, the defendants contend that the Calunuran fishpond consisted of
lands purchased by Juan Y. Salao, Sr. and Ambrosia Salao in 1905, 1906, 1907 and 1908. But this point is
disputed by the plaintiffs. However, there can be no controversy as to the fact that after Juan Y. Salao, Sr.
and Ambrosia Salao secured a Torrens title for the Calunuran fishpond in 1911 they exercised dominical
rights over it to the exclusion of their nephew, Valentin Salao. Thus, on December 1, 1911 Ambrosia
Salao sold under pacto de retro for P800 the Calunuran fishpond to Vicente Villongco. The period of
redemption was one year. In the deed of sale Ambrosia confirmed that she and her brother Juan were the
owners of the said fishery.
Issues: Whether the same was held in trust for Valentin Salao by Juan Y. Salao, Sr. and Ambrosia Salao.
Ruling:
No. In its technical legal sense, a trust is defined as the right, enforceable solely in equity, to the
beneficial enjoyment of property, the legal title to which is vested in another. A person who establishes a
trust is called the trustor; one in whom confidence is reposed as regards the property for the benifit of the
another person is know as the trustee; and the person for whose benefit the trust has been created is
referred to as the beneficiary. There is a fiduciary relation between the trustee and the cestui que trust as
regards certain property, real, personal, money or chooses in action. "Trusts are either express or implied.
Express trusts are created by the intention of the trust or or of the parties. Implied trusts come into being
by operation of law." (Art. 1441, Civil Code). "No express trust concerning an immovable or any interest
therein may be proven by parol evidence. An implied trust may be proven by oral evidence" (Arts. 1443
and 1457). "No particular words are required for the creation of an express trust, it being sufficient that a
trust is clearly intended" (Art. 1444). Not a scintilla of documentary evidence was presented by the
plaintiffs to prove that there was an express trust over the Calunuran fishpond in favor of Valentin Salao.
Purely parol evidence was offered by them to prove the alleged trust. Their claim that in the oral partition
in 1919 of the two fishponds the Calunuran fishpond was assigned to Valentin Salao is legally untenable.
It is legally indefensible because the terms of Art. 1443 of the Civil Code are peremptory and
unmistakable; parol evidence cannot be used to prove an express trust concerning realty. Plaintiffs utterly
failed to measure up to the yardstick that a trust must be proven by clear, satisfactory, and convincing
evidence. It cannot rest on vague and uncertain evidence or on loose, equivocal, or indefinite declarations.
Article 1457 of the Civil Code 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. 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 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 as being held in trust by the heirs of Juan Y. Salao, Sr. for the heirs of Valentin Salao. Under Act
No. 190, whose statute of limitation would apply if there were an implied trust in this case, the longest
period of extinctive prescription was only ten years. 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 bears from the date of registration. The plaintiffs and
their predessor-in-interest, Valentin Salao slept on their rights, if they had any rigths at all. Where the
Court has reached the conclusion that the plaintiffs are not entitled to the reconveyance of the Calunuran
fishpond, it is no longer necessary to pass upon the validity of the donation made by Ambrosia Salao to
Juan S. Salao, Jr. of her half-share in the two fishponds. Plaintiffs have no right and personality to assail
that donation.
Fabian vs. Fabian
[G.R. No. L-20449. January 29, 1968.]
Facts: This case traces its origin way back to January 1, 1909 when Pablo Fabian bought from the
Philippine Government lot 164 of the Friar Lands Estate in Muntinlupa, Rizal, of an area 1 hectare, 42
ares and 80 centares, for the sum of P112 payable in installments. By virtue of this purchase, he was
issued sale certi:cate 547. He died on August 2, 1928, survived by four children, namely Esperanza,
Benita I, Benita II, 1 and Silbina. On October 5, 1928 Silbina Fabian and Teodora Fabian, niece of the
deceased, executed an affidavit.
On the strength of this affidavit, a sale certificate was assigned to them. On November 1928 the acting
Director of Lands, on behalf of the Government, sold the lot, under a deed, to Silbina Fabian, married to
Feliciano Landrito, and to Teodora Fabian, married to Francisco del Monte, for the sum of P120. The
vendee’s spouses took physical in 1929 possession thereof, cultivated it, and appropriated the produce
therefrom. In that same year, they declared the lot in their names for taxation purposes. The plaintiffs
filed the present action for reconveyance against the defendant’s spouses, averring that Silbina and
Teodora, through fraud perpetrated in their affidavit aforesaid. That by virtue of this affidavit, the said
defendants succeeded in having the sale certificate assigned to them and thereafter in having lot 164
covered by said certificate transferred in their names; and that by virtue also of these assignment and
transfer, the defendants succeeded fraudulently in having lot 164 registered in their names. They further
allege that the land has not been transferred to an innocent purchaser for value. A reconveyance thereof is
prayed for.
In their answer, the defendants spouses claim that Pablo Fabian was not the owner of lot at the time of
his death on August 2, 1928 because he had not paid in full the amortizations on the lot; that they are the
absolute owners thereof, having purchased it from the Government, and from that year having exercised
all the attributes of ownership thereof up to the present; and that the present action for reconveyance has
already prescribed. The dismissal of the complaint is prayed for. The lower court rendered judgment
declaring that the defendant’s spouses had acquired a valid and complete title to the property by
acquisitive prescription, and accordingly dismissed the complaint. The latter’s motion for reconsideration
was thereafter denied. Hence, the present recourse
Issues: (1) May laches constitute a bar to an action to enforce a constructive trust? (2) Has title to the land
vested in the appellees through the mode of acquisitive prescription?
Ruling:
1.Yes. The Court declared in no uncertain terms that laches may bar an action brought to enforce a
constructive trust such as the one in the case at bar. According to the Court, Article 1456 of the new Civil
Code, while not retroactive in character, merely expresses a rule already recognized by our courts prior to
the Code's promulgation. Appellants are, however, in error in believing that like express trust, such
constructive trusts may not be barred by lapse of time. The American law on trusts has always maintained
a distinction between express trusts created by the intention of the parties, and the implied or constructive
trusts that are exclusively created by law, the latter not being trusts in their technical sense. The express
trusts disable the trustee from acquiring for his own benefit the property committed to his management or
custody, at least while he does not openly repudiate the trust, and makes such repudiation known to the
beneficiary or cestui que trust. For this reason, the old Code of Civil Procedure (Act 190) declared that
the rules on adverse possession does not apply to 'continuing and subsisting' trusts. "But in constructive
trusts, . . . the rule is that laches constitutes a bar to actions to enforce the trust, and repudiation is not
required, unless there is a concealment of the facts giving rise to the trust." The assignment of sale
certificate was effected on October 5, 1928, and the actual transfer of lot was made on the following
November 14. It was only on July 8, 1960, 32 big years later, that the appellants for the first time came
forward with their claim to the land. The record does not reveal, and it is not seriously asserted, that the
appellees concealed the facts giving rise to the trust. Upon the contrary, the stipulation of facts of the
parties states with striking clarity "that defendants herein have been in possession of the land in question
since 1928 up to the present publicly and continuously under claim of ownership; they have cultivated it,
harvested and appropriated the fruits for themselves."
2.Yes, the Court states that “an action for reconveyance of real property based upon a constructive or
implied trust. resulting from fraud, may be barred by the statute of limitations," and further that "the
action therefore may be filed within four years from the discovery of the fraud," the discovery in that case
being deemed to have taken place when new certificates of title were issued exclusively in the names of
the respondents therein. Upon the undisputed facts in the case at bar, not only had laches set in when the
appellants instituted their action for reconveyance in 1960, but as well their right to enforce the
constructive trust had already prescribed. It logically follows from the provisions of section 41 of Act 190
that "the possession by the claimant or by the person under or through whom he claims must have been
actual, open, public, continuous, under a claim of title exclusive of any other right and adverse to all other
claimants," was adjudged by the lower court as having been fulfilled in the case at hand. And we agree.
Although paragraph 13 of the stipulation of facts hereinbefore adverted to does not explicitly employ the
word "adverse" to characterize the possession of the defendants from 1928 up to the filing of the
complaint in 1960, the words, "defendants have been in possession of the land since 1928 up to the
present [1960] publicly and continuously under claim of ownership; they have cultivated it, harvested and
appropriated the fruits for themselves," clearly delineate, and can have no other logical meaning than, the
adverse character of the possession exercised by the appellees over the land. If the import of the
stipulation of facts is at all doubted, such doubt is dispelled completely by additional cumulative facts in
the record which are uncontroverted. Thus, the appellees declared the lot for taxation purposes in their
names, and the resulting tax declaration was later cancelled and two tax declarations were issued in favor
of Silbina Fabian and Teodora Fabian, respectively. They have been paying the real estate taxes thereon
from 1929 to the present. And in 1945 they subdivided the lot into two equal parts, and two transfer
certificates of title were issued separately in their names.
Bueno vs. Reyes
[G.R. No. L-22587. April 28, 1969.]
Facts: On January 7, 1936 Francisco H. Reyes filed an answer in Cadastral Case No. 47 of Ilocos Norte,
claiming lot No. 2357 of the Laoag Cadastre as property belonging to himself and to his two brothers,
Juan and Mateo. The case was heard without opposition, and the lot was adjudicated in favor of the
claimants on March 27, 1939, in whose names Original Certificate of Title was issued on the following
July 7. 23 years thereafter, or on December 12, 1962 to be exact, the plaintiffs filed the action below for
reconveyance of lot. They allege in their complaint that the said lot originally belonged to Jorge Bueno,
who died leaving three children, namely, Brigida Bueno, Eugenia Bueno and Rufino Bueno, to whom the
property descended by intestate succession; that subsequently Brigida and Eugenia died, leaving their
respective children, who are now the plaintiffs-appellants together with Rufino Bueno; that Francisco H.
Reyes was Eugenia's husband and the father of the plaintiffs surnamed Reyes, "who by agreement among
the heirs of Jorge Bueno was entrusted in filing the answer in the cadastral proceedings and in obtaining
the title thereto for and in behalf of all the heirs of Jorge Bueno, including his wife Eugenia Bueno."
The defendants filed their answer, in which they raised several defenses, including laches,
imprescriptibility of title, and prescription of action. This last defense was reiterated in a subsequent
motion to dismiss, which was upheld by the court a quo in the order already referred to and now subject
of this appeal.
Issues: Whether the lower court erred in the dismissal of the complaint on the ground of prescription.
Ruling: Yes. Both the appellees and the court below proceeded on the theory that the action for
reconveyance was predicated on the existence of an implied trust and that such an action prescribes in 10
years. The appellants counter that the trust was not implied but express, and that in any case even an
implied trust, according to some decisions of this Court, is imprescriptible. Where what was apparently
designed to be an express trust as alleged in complaint was for the late Francisco H. Reyes to file an
answer in the cadastral proceeding and to obtain title to the land for and in behalf of all the heirs of Jorge
Bueno, but such express trust failed to materialize and in the next paragraph of the complaint, Reyes is
charged with "either bad faith or mistake" in filing the cadastral answer and obtaining title to the property
in his own name and in the names of his two brothers, Juan and Mateo, "who connived and consented to
the (said) malicious or erroneous acts," the trust, if any can be deduced at all from the foregoing facts,
was an implied one arising by operation of law not from any presumed intention of the parties but to
satisfy the demands of justice and equity and as a protection against unfair dealing or downright fraud.
While there are some decisions which hold that an action upon a trust is imprescriptible, without
distinguishing between express and implied trusts, the better rule, as laid down by this Court in other
decisions, is that prescription does supervene where the trust is merely an implied one. An action for
reconveyance based on an implied trust such as the present, is subject to prescription in ten years. The
cause of action upon a constructive trust which arose by reason of the "bad faith or mistake" of the trustee
must be deemed to have accrued only upon the discovery of such bad faith or mistake" of the trustee must
be deemed to have accrued only upon the discovery of such bad faith or mistake.