G.R. No. 76590 February 26, 1990 reconveyance, docketed therein as Civil Case No. 2148.
reconveyance, docketed therein as Civil Case No. 2148. The same was amended on
HEIRS OF MARIA DE LA CRUZ Y GUTIERREZ, petitioners,
vs.
COURT OF APPEALS and HEIRS OF MARIA DE LA CRUZ Y GUEVARRA,
respondents.
PARAS, J.:
This is a petition for review on certiorari of the June 17, 1986 decision * of the then
Intermediate Appellate Court in AC-G.R. CV No. 05785 reversing the appealed decision
of the Regional Trial Court of Angeles City, and the November 12, 1986 resolution of the
same court denying the motion for reconsideration.
Herein petitioners are the heirs (children) of the late Maria de la Cruz y Gutierrez,
married to Mateo del Rosario Lansang, while herein private respondents are the heirs of
Maria de la Cruz y Guevarra, married to Calixto Dimalanta, and Fermin de la Cruz. The
controversy involves a 1,980 square meters portion of Lot 1488.
From 1921 until her death in 1951, Maria de la Cruz y Gutierrez resided in the
questioned lot in the concept of an owner. She declared the lot for tax purposes in her
name. Later, she entrusted the administration of the said lot to her niece Maria de la
Cruz y Guevarra. When cadastral proceedings were held in Porac, in Cadastral Case
No. 18, on March 17, 1926, Maria de la Cruz y Gutierrez filed an answer to the
questioned lot. In the said filed answer, over the handwritten name "Maria de la Cruz y
Gutierrez" is a thumbmark presumably affixed by her, Exhibit "2-C"; that in paragraph 7,
a person named therein as Fermin de la Cruz y Gutierrez is stated to have an interest or
participation on the said lot. However, in the space provided in paragraph 8 to be filled
up with the personal circumstances of claimant Maria de la Cruz y Gutierrez, what
appears therein is the name Maria de la Cruz, married to Calixto Dimalanta, instead of
Maria de la Cruz y Gutierrez, Exhibit "2-A"; and in the space provided in paragraph 9,
intended for the personal circumstances of other person or persons who may have an
interest on the said lot, the name Fermin de la Cruz, single, appears, Exhibit "2-B".
Accordingly, the trial court rendered a decision adjudicating Lot No. 1488 in favor of
Maria de la Cruz, 26 years old, married to Calixto Dimalanta and Fermin de la Cruz,
Single. Finally, Original Certificate of Title No. 16684 of the Register of Deeds of
Pampanga was issued in their names.
Petitioners, claiming to have learned of the same only on July 1, 1974, on October 1,
1974 (allegedly barely three months after discovery of the registration, and two years
after the death of Maria de la Cruz y Guevarra who, before she died in 1974, revealed to
petitioners Daniel Lansang and Isidro Lansang that the lot of their mother Maria de la
Cruz y Gutierrez had been included in her title), filed with the then Court of First Instance
of Pampanga, Branch IV, presided over by Hon. Cesar V. Alejandria, a complaint for
June 16, 1975.
The main thrust of the complaint is that the claimant of Lot 1488 in Cadastral Case
No. 18 was Maria de la Cruz y Gutierrez and not Maria de la Cruz y Guevarra who by
not using her maternal surname "Guevarra" succeeded in registering Lot 1488 in her
name and that of her brother Fermin de la Cruz. Under the circumstances, it is
claimed that Maria de la Cruz married to Calixto Dimalanta and Fermin de la Cruz
hold the property in trust for the petitioners.
In their answer (Rollo, pp. 62-65), private respondents claimed that the land in questin
is their exclusive property, having inherited the same from their parents and the OCT
No. 16684 was issued in their names. Moreover, they asserted that petitioners have
lost their cause of action by prescription.
During the pre-trial, the parties stipulated the following facts:
1. That Lot No. 1488 is the lot in question as stated in
Paragraph 3 of the Complaint;
2. That on March 17, 1926, Maria de la Cruz y Gutierrez
filed her Answer over the cadastral lot in question;
3. That Maria de la Cruz y Gutierrez affixed her
thumbmark in the Answer dated March 17, 1926;
4. That by virtue of the Answer over Cadastral lot in
question filed by Maria de la Cruz y Gutierrez on March
17, 1926, OCT No. 16684 was issued covering the lot in
question;
5. That the maternal surname of Maria de la Cruz and
Fermin de la Cruz is Guevarra and not Gutierrez; and
6. That Maria de la Cruz y Guevarra and Fermin de la
Cruz y Guevarra did not file their answer over the lot in
question. (p. 3, Intermediate Appellate Court Decision; p.
46, Rollo)
The issues stated are as follows:
1. Whether or not the handwritings in the Answer of
Maria de la Cruz y Gutierrez were her handwritings;
2. Whether or not the heirs of Maria de la Cruz y
Gutierrez are paying the land taxes of the lot in question
proportionately to their respective shares;
3. Whether or not Lot 1488, the lot in question, is
 declared in the name of Maria de la Cruz y Gutierrez;
4. Whether or not during the lifetime of Maria de la Cruz y
Gutierrez up to the time of her death, she was in actual
possession of the lot in question; and
5. If there was fraud in securing OCT No. 16684 in the
name of Maria de la Cruz, married to Calixto Dimalanta,
and Fermin de la Cruz, single. (pp. 3-4, Intermediate
Appellate Court Decision; pp. 4647, Rollo)
After trial, the trial court, in a decision dated November 17, 1983 (ibid., pp. 34-42), ruled
in favor of the petitioners. The decretal portion of the said decision, reads:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs;
(a) ordering the above-named defendants to reconvey to
the plaintiffs a portion of 1,980 square meters of Lot No.
1488 covered by Original Certificate of Title No. 16684 of
the Register of Deeds of Pampanga, by executing a deed
of reconveyance and registering the same with the said
Office at their own expense;
(b) ordering the parties to cause the survey and division of
Lot No. 1844 into two equal parts in order that two separate
titles, one for the plaintiffs and the other for the defendants
can be issued by the Register of Deeds of Pampanga in
their favor and one-half of the expenses therefore to be
shouldered by the plaintiffs, and the other half by the
defendant;
(c) ordering that the land to be adjudicated to the plaintiffs
should include the portion where the existing house of the
late Maria de la Cruz y Gutierrez is situated;
(d) ordering the plaintiffs and the defendants to pay the
corresponding estate and inheritance taxes if the parcels of
land inherited by them are subject to the payment of the
same;
(e) ordering the defendants to pay the costs of suit.
On appeal, considering the action as based on an implied trust, the then Intermediate
Appellate Court in its decision promulgated on June 17, 1986 (Ibid., pp. 44-53) reversed
the decision of the trial court. The dispositive portion reads:
WHEREFORE, the Court is constrained to REVERSE the decision
appealed from. A new one is hereby entered dismissing the complaint.
A Motion for Reconsideration was filed, but the same was denied in a resolution
dated November 12, 1986 (Ibid., p. 66). Hence, the instant petition.
Petitioners raised three (3) reasons warranting review, to wit:
I
RESPONDENT COURT ERRED WHEN IT RULED THAT THE
ACTION FOR RECONVEYANCE FILED BY HEREIN PETITIONERS
WITH THE LOWER COURT HAD ALREADY PRESCRIBED;
II
RESPONDENT COURT ERRED IN RULING THAT PETITIONERS
WERE GUILTY OF LACHES; and
III
RESPONDENT COURT ERRED IN RULING THAT THERE WAS NO
EVIDENCE OF FRAUD COMMITTED BY THE PREDECESSOR-IN-
INTEREST OF PRIVATE RESPONDENTS IN SECURING TITLE TO
THE LOT IN QUESTION.
(pp. 13, 20 and 22, Petition for Review pp. 21, 28, and 30 Rollo)
The instant petition is impressed with merit.
The main issue in this case is whether or not petitioners' action for reconveyance has
already prescribed.
The answer is in the negative.
As aptly argued by petitioners, the Court of Appeals erred when it ruled that their
action has already prescribed; obviously on the wrong premise that the action is one
based on implied or constructive trust. As maintained by petitioners, their action is
one based on express trust and not on implied or constructive trust. Petitioners'
predecessor-in-interest, Maria de la Cruz y Gutierrez, was an unlettered woman, a
fact borne out by her affixing her thumbmark in her answer in Cadastral Case No. 18,
Exhibit "2-C". Because of her mental weakness, in a prepared document for her,
Exhibit "B-3", she consented and authorized her niece Maria de la Cruz y Guevarra to
administer the lot in question. Such fact is corroborated by the testimony of Daniel
Lansay, the son of Maria de la Cruz y Gutierrez that Maria de la Cruz y Guevarra was
the one entrusted with the paying of land taxes.
Private respondents argue that said Exhibit "B-3" is a portion of the tax declaration
(Exhibit "B") which was prepared by the Office of the Municipal Assessor/Treasurer
where the lot in question is located, and clearly not the written instrument constituting
an express trust required under Article 1443 of the Civil Code. This argument of
private respondents, is untenable. It has been held that under the law on Trusts, it is
not necessary that the document expressly state and provide for the express trust, for it
may even be created orally, no particular words are required for its creation (Article
1444, Civil Code). An express trust is created by the direct and positive acts of the
parties, by some writing or deed or will or by words evidencing an intention to create a
trust (Sotto v. Teves, 86 SCRA 154 [1978]). No particular words are required for the
creation of an express trust, it being sufficient that a trust is clearly intended (Vda. de
Mapa v. Court of Appeals, 154 SCRA 294 [1987]). Hence, petitioner's action, being one
based on express trust, has not yet prescribed. Be it noted that Article 1443 of the Civil
Code which states "No express trusts concerning an immovable or any interest therein
may be proved by parol evidence," refers merely to enforceability, not validity of a
contract between the parties. Otherwise stated, for purposes of validity between the
parties, an express trust concerning an immovable does not have to be in writing. Thus,
Article 1443 may be said to be an extension of the Statute of Frauds. The action to
compel the trustee to convey the property registered in his name for the benefit of the
cestui for trust does not prescribe. If at all, it is only when the trustee repudiates the trust
that the period of prescription may run (Enriquez v. Court of Appeals, 104 SCRA 656
[1981]).
PREMISES CONSIDERED, the June 17, 1986 decision of the Intermediate Appellate
Court is hereby REVERSED and the November 17, 1983 decision of the trial court is
hereby REINSTATED, excpt as to the latter court's finding that this case deals with an
implied trust.
SO ORDERED.
Cuenco v. De Manguerra
G.R. No. 149844, 13 October 2004
FACTS:
Respondent filed the initiatory complaint for specific performance against her uncle Petitioner,
which averred, inter alia that her late father and petitioner formed the ‘Cuenco and Cuenco
Law Offices’; that the Law Offices served as lawyers in two (2) cases involving a dispute
among relatives over ownership of lot; that records of said cases indicate the name of the
petitioner alone as counsel of record, but in truth and in fact, the real lawyer behind the
success of said cases was Respondent’s father; that after winning said cases, both lawyers
received as attorney’s fees a 5,000 sqms. Lot.
However, at the time of distribution, Respondent’s father was actively practicing law in
Manila, and so he entrusted his share to the petitioner. Petitioner was able to obtain in his own
name a title for said Lot; that he was under the obligation to hold the title in trust for his
brother children by first marriage.
Subsequently, Petitioner alleged that he was the absolute owner of Lot 903-A-6; that this lot
was a portion of Lot 903-A which in turn was part of Lot 903 which was the subject matter of
litigation; that he was alone in defending the cases involving Lot 903 without the participation
of respondent’s father; that he donated five (5) of the six (6) portions of Lot 903-A to the five
(5) children of respondent’s father out of gratitude for the love and care they exhibited to him
during the time of his long sickness; that he did not give or donate any portion of the lot to the
respondent because she never visited him nor took care of him during his long sickness.
Judgment was rendered in favor of the respondent as the owner of the disputed lot. The trial
court ruled that the subject land is part of the attorney’s fees of Respondent’s father and
petitioner merely holds such property in trust for [her], his title there [to] notwithstanding.
Hence, this petition.
ISSUE:
Whether the subject lot constitutes a part of Respondent’s Father share in the Attorney’s Fees.
RULING:
YES, the subject lot constitutes a share on the profits.
It has sufficiently been proven, however, that these defendants were represented by the
Cuenco and Cuenco Law Office, composed of Partners Mariano Cuenco and Miguel Cuenco.
Given as attorney’s fees was one hectare of Lot 903, of which two five-thousand square meter
portions were identified as Lot 903-A and Lot 903-B. That only Miguel handled Civil Case No.
9040 does not mean that he alone is entitled to the attorney’s fees in the said cases. “When a
client employs the services of a law firm, he does not employ the services of the lawyer who is
assigned to personally handle the case. Rather, he employs the entire law firm.” Being a partner
in the law firm, Mariano – – like Miguel – – was likewise entitled to a share in the attorney’s fees
from the firm’s clients. Hence, the lower courts’ finding that Lot 903-A was a part of Mariano
Cuenco’s attorney’s fees has ample support.
G.R. No. 97995 January 21, 1993
Philippine National Bank vs.Court of Appeals and B.P. Mata and Co., Inc
Facts:
B.P. Mata & Co is a private corporation engaged in providing goods and services to shipping
companies. It has acted as manning or crewing agent for several firms, one of which is Star Kist
Foods Inc. As part of their agreement, Mata makes advances for the crew’s several expenses.
Security Pacific National Bank transmitted a cable message to PNB to pay the amount of
US$14,000 to Mata by crediting PNB’s account with the Insular Bank of Asia and America, as
per order of Star Kist. However, the former bank promptly sent another message to PNB with the
instructions that only the amount of US$1,400 should be given to Mata. With it, Star Kist sent a
check to Mata for the amount of US$1,400 through the Insular Bank of Asia and America.
However, 14 days afer, PNB effected another payment in the amount of US$14,000, purporting to
be another transmittal of reimbursement from Star Kist.
More than six years later, PNB requested Mata for refund of US$14,000 after it discovered its
error.
PNB filed a case for collection and refund of $14,000 against Mata, arguing that based on a
constructive trust under Article 1456 of Civil Code, it has a right to recover the said amount it
erroneously credited to Mata.
RTC dismissed the complaint, ruling that the case falls squarely under Article 2154 on solutio
indebiti and not under Article 1456 on constructive trust.
Appellate court affirmed such decision, adding that while Mata is duty bound to return the
amount paid by mistake, PNB’s demand for the return of US$14,000 cannot prosper because of
prescription under Article 1145, stating that actions upon a quasi-contract must be commenced
within 6 years.
Issue:
Whether or not PNB was correct in arguing that based on constructive trust, it can still collect
the amount from Mata even after more than 6 years have already lapsed.
Held:
PNB was correct in stating that based on constructive trust, he may claim the $14,000 it
erroneously sent to Mata. In fact, he can opt to invoke solution indebiti or constructive trust to
claim it. However, the action to enforce an implied trust is already barred by laches.
Article 1456 of the Civil Code provides: If property is acquired through mistake or fraud, the
person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit
of the person from whom the property comes.
On the other hand, Article 2154 states: If something is received when there is no right to
demand it, and it was unduly delivered through mistake, the obligation to return it arises.
If it is to be construed as a case of payment by mistake or solutio indebiti, then the prescriptive
period for quasi-contracts of six years applies, as provided by Article 1145. As pointed out by
the appellate court, petitioner’s cause of action thereunder shall have prescribed, having been
brought almost seven years after the cause of action accrued. However, even assuming that the
instant case constitutes a constructive trust and prescription has not set in, the present action
has already been barred by laches.
To recall, trusts are either express or implied. While express trusts are created by the intention
of the trustor or of the parties, implied trusts come into being by operation of law. Implied
trusts are those which, without being expressed, are deducible from the nature of the
transaction as matters of intent or which are superinduced on the transaction by operation of
law as matters of equity, independently of the particular intention of the parties.
In turn, implied trusts are subdivided into resulting and constructive trusts. A resulting trust is
a trust raised by implication of law and presumed always to have been contemplated by the
parties, the intention of which is found in the nature of the transaction, but not expressed in the
deed or instrument of conveyance. Examples of resulting trusts are found in Articles 1448 to
1455 of the Civil Code. On the other hand, a constructive trust is one not created by
words either expressly or impliedly, but by construction of equity in order to satisfy the
demands of justice. An example of a constructive trust is Article 1456 quoted above.
A deeper analysis of Article 1456 reveals that it is not a trust in the technical sense for in a
typical trust, confidence is reposed in one person who is named a trustee for the benefit of another
who is called the cestui que trust, respecting property which is held by the trustee for the benefit
of the cestui que trust. A constructive trust, unlike an express trust, does not emanate from, or
generate a fiduciary relation. While in an express trust, a beneficiary and a trustee are linked by
confidential or fiduciary relations, in a constructive trust, there is neither a promise nor any
fiduciary relation to speak of and the so-called trustee neither accepts any trust nor intends
holding the property for the beneficiary.
Mata, in receiving the US$14,000 in its account through IBAA, had no intent of holding the same
for a supposed beneficiary or cestui que trust, namely PNB. But under Article 1456, the law
construes a trust, namely a constructive trust, for the benefit of the person from whom the
property comes, in this case PNB, for reasons of justice and equity.
It must be borne in mind that in an express trust, the trustee has active duties of management
while in a constructive trust, the duty is merely to surrender the property.
unreasonable delay. It is amazing that it took petitioner almost seven years before it
discovered that it had erroneously paid private respondent. Petitioner would attribute its
mistake to the heavy volume of international transactions handled by the Cable and
Remittance Division of the International Department of PNB. Such specious reasoning is not
persuasive. It is unbelievable for a bank, and a government bank at that, which regularly
publishes its balanced financial statements annually or more frequently, by the quarter, to
notice its error only seven years later. As a universal bank with worldwide operations, PNB
cannot afford to commit such costly mistakes. Moreover, as between parties where negligence
is imputable to one and not to the other, the former must perforce bear the consequences of its
neglect. Hence, petitioner should bear the cost of its own negligence.

Still applying American case law, quasi-contractual obligations give rise to a personal liability
ordinarily enforceable by an action at law, while constructive trusts are enforceable by a
proceeding in equity to compel the defendant to surrender specific property. To be sure, the
distinction is more procedural than substantive.
Further reflection on these concepts reveals that a constructive “trust” is as much a misnomer as a
“quasi-contract,” so far removed are they from trusts and contracts proper, respectively. In the
case of a constructive trust, as in the case of quasi-contract, a relationship is “forced” by operation
of law upon the parties, not because of any intention on their part but in order to prevent unjust
enrichment, thus giving rise to certain obligations not within the contemplation of the parties.
Returning to the instant case, while petitioner may indeed opt to avail of an action to enforce a
constructive trust or the quasi-contract of solutio indebiti, it has been deprived of a choice, for
prescription has effectively blocked quasi-contract as an alternative, leaving only constructive
trust as the feasible option.
It is wrong to conclude that in a constructive trust, only the person obtaining the property
commits a mistake. This is because it is also possible that a grantor, like PNB in the case at hand,
may commit the mistake.
PNB cannot claim the US$14,000 it erroneously paid private respondent under a constructive
trust. Although only seven (7) years lapsed after petitioner erroneously credited private
respondent with the said amount and that under Article 1144, petitioner is well within the
prescriptive period for the enforcement of a constructive or implied trust, petitioner’s claim
cannot prosper since it is already barred by laches. It is a well-settled rule now that an action to
enforce an implied trust, whether resulting or constructive, may be barred not only by prescription
but also by laches.
While prescription is concerned with the fact of delay, laches deals with the effect of