Emiliano Ramos vs Gregoria Ramos


Facts
The Sps. Martin Ramos died and was survived by their 3

legitimate and 7 natural children, which includes Emiliano. Later, a
special proceeding was instituted to settle the intestate estate of the
Sps. Ramos. A project of partition was submitted which the court
approved. Martin had plenty of real property but the most valuable
were 2 Hacienda, one called Hacienda Calaza which is the subject
of this case. Administration over the Hacienda Calaza was given to
Jose.
Later, a cadastral court ordered the lands covering Hacienda
Calaza be surveyed. Emiliano didn’t file any claim anymore in the
cadastral case, relying instead on Jose who promised to have Titles
issued in his and the other co-heirs name.
Afterwards, Emiliano discovered that Jose in fact had the Title
issued in his wife’s name instead, Gregoria. Further, Emiliano
discovered there was in fact an earlier partition of her father’s
estate and the fact she didn’t receive her rightful share. Emiliano
then filed suit to recover Hacienda Calaza and their share in the
partition.
Issue
Can Emiliano still recover her share in the partition and
Hacienda Calaza?
Held No.
Here, there was no express trust created. The partition of Martin
Ramos’ estate negates the existence of an express trust considering
adjudication were made to his children. A trust must be proven by
clear, satisfactory, and convincing evidence. It can’t rest on vague
and uncertain evidence.
There’s also no implied trust. In the cadastral proceedings which
supervened after the intestate proceeding, the eight lots herein
involved were claimed by Jose and Gregoria Ramos to the
exclusion of Emiliano Ramos and the other heirs. When Jose Died,
Gregoria leased the lots to Yulo who in turn transferred his lease
rights to 3rd persons. These transactions prove the Heirs of Jose
Ramos repudiated any trust which was supposedly constituted over
Hacienda Calaza in Emiliano’s favor.
Consequently, because any alleged trust was already repudiated,
the statute of limitations applies to this case. The instant case was
brought only 40 years after the right accrued. The delay is
inexcusable and such action is barred both by prescription and
laches.

Emiliano Ramos vs Gregoria Ramos
Facts
The Sps. Martin

Ramos died and was survived by their 3 legitimate and 7 natural
children, which includes Emiliano. Later, a special proceeding was
instituted to settle the intestate estate of the Sps. Ramos. A project
of partition was submitted which the court approved. Martin had
plenty of real property but the most valuable were 2 Hacienda, one
called Hacienda Calaza which is the subject of this case.
Administration over the Hacienda Calaza was given to Jose.
Later, a cadastral court ordered the lands covering Hacienda
Calaza be surveyed. Emiliano didn’t file any claim anymore in the
cadastral case, relying instead on Jose who promised to have Titles
issued in his and the other co-heirs name.
Afterwards, Emiliano discovered that Jose in fact had the Title
issued in his wife’s name instead, Gregoria. Further, Emiliano
discovered there was in fact an earlier partition of her father’s
estate and the fact she didn’t receive her rightful share. Emiliano
then filed suit to recover Hacienda Calaza and their share in the
partition.
Issue
Can Emiliano still recover her share in the partition and
Hacienda Calaza?
Held No.
Here, there was no express trust created. The partition of Martin
Ramos’ estate negates the existence of an express trust considering
adjudication were made to his children. A trust must be proven by
clear, satisfactory, and convincing evidence. It can’t rest on vague
and uncertain evidence.
There’s also no implied trust. In the cadastral proceedings which
supervened after the intestate proceeding, the eight lots herein
involved were claimed by Jose and Gregoria Ramos to the
exclusion of Emiliano Ramos and the other heirs. When Jose Died,
Gregoria leased the lots to Yulo who in turn transferred his lease
rights to 3rd persons. These transactions prove the Heirs of Jose
Ramos repudiated any trust which was supposedly constituted over
Hacienda Calaza in Emiliano’s favor.
Consequently, because any alleged trust was already repudiated,
the statute of limitations applies to this case. The instant case was
brought only 40 years after the right accrued. The delay is
inexcusable and such action is barred both by prescription and
laches.

Diaz v. Gorricho and Agguado (1958) Doctrine

 A constructive trust is a trust raised by constitution of law, or
arising by operation of law.

 In constructive trusts, there is neither promise nor fiduciary

relations; the so called trustee does not recognize any trust and
has no intent to hold the property for the beneficiary. Therefore,
the trustor may acquire the propertyby acquisitive prescription
and the action of the beneficiary may be barred by laches.
FactsThe spouses Francisco Diaz and Maria Sevilla were the
registered owners of 2 lots in Cabanatuan City. They held these
lots as conjugal partnership properties. Francisco died in 1919
and was survived by his widow, Maria Sevilla, and their 3
 children, Manuel, Lolita and Constancia.Sometime in 1935,
Carmen Gorricho filed an action against Maria Sevilla (case did
not indicate what action) and a writ of attachment was issued
upon the shares of Maria Sevilla in the 2 lots. Carmen Gorricho
acquired the properties in public auction. After 1 year, a deed
of absolute sale was executed in her favor because Maria Sevilla
was not able to redeem the property within this period. The issue
lies in the mistake of the sheriff who gave the whole of the 2
lots to Carmen Gorricho, not merely the 1⁄2 portion of the
lots which she was in fact entitled to. The other 1⁄2 portion
properly belonged to the 3 children.Maria died and her
children filed an action to compel Gorricho and her spouse
Aguado to reconvey 1⁄2 of the property to them. The children
allege that the 1⁄2 portion was being held in trust by Gorricho and
Aguada for them. They say that Gorricho acquired the whole of
the property through the mistake of the sheriff and that
Article 1456 of the Civil code states that properties acquired
through error are subject to an implied trust. Also that
prescription does not run against titled properties.In her defense,
Gorricho avers that there is no trust and that the action has
prescribed.Issues

1. Whether there exists an implied trust between Carmen

Gorricho and the children of Maria Sevilla

2. Whether prescription runs against a trustor in a constructive

trust. In relation, whether the action for 
reconveyance by
the beneficiaries is barred by laches

Held
1. There is an implied trust between Carmen Gorricho and the
children of Maria Sevilla.
According to Article 1456 of the
Civil Code of the Philippines, 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. It was the mistake of
the sheriff in giving the entire property to Carmen Gorricho after
 the public auction when she was entitled only to the 1⁄2 portion
pertaining to Maria Sevilla. This mistake of the sheriff caused an
implied trust to be created by operation of law between Carmen
Gorricho and the children of Maria Sevilla.

2. The action for reconveyance of the beneficiaries is barred by

laches
With regard to laches and prescription, there is a
difference between express trusts and implied trusts.
Remember that express trusts are created by intention of the
parties, therefore, there is a fiduciary relationship. This
fiduciary relationship disables the trustee from acquiring for
his own benefit the property in his custody, at least while he
does not openly repudiate the trust, and makes such
repudiation known to the beneficiary. Therefore, a trustor in
an express trust cannot adversely posses property in his
custody and no acquisitive prescription can take place. In the
case of an express trust, a beneficiary is entitled to rely upon
the fidelity of the trustee. No laches exists until a reasonable
time after a beneficiary is notified of a breach or other cause
of suit against the trustee. Laches does exist, however, where
suit is not commenced within such reasonable time.


3. 
As for constructive trusts, the relationship is created by

operation of law. The relationship is not fiduciary in nature.
Therefore, the trustor may acquire by prescription the
property which is under his custody. Prescription runs from
the time the trust is created by law. (However, this is
principle is applicable under only when the beneficiary or the
trustor is aware that a constructive trust was in fact created
by operation of law.) The so-called trustee does not recognize
any trust and has no intent to hold for the beneficiary;
therefore, the beneficiary is not justified in delaying action to
recover his property. It is his fault if he delays; hence, he may
be estopped by his own laches.

The instant case involves a
constructive trust, hence, Carmen Gorricho may acquire the
property by prescription. Also, the Supreme Court held that
the action for reconveyance instituted by the children of
 Maria Sevilla is barred by laches. It took them 15 years to
assert their right. The action for reconveyance is dismissed.

4. 
Ouano vs. Republic of the Philippines (2011)
(expropriation, Lahug airport, constructive trust)
Doctrines:
Constructive trusts are fictions of equity that
courts use as devices to remedy any situation in which the
holder of the legal title, MCIAA in this case, may not, in good
conscience, retain the beneficial interest.
Facts:
Case is a
consolidation of two petitions.
In 1949, the National Airport
Corporation (NAC) pursued a program to expand the Lahug
Airport in Cebu. NAC negotiated with the owners of the
properties around the airport. The landowners claimed that
the government negotiating team, as a sweetener, ASSURED
them that they could repurchase their respective lands should
the Lahug airport expansion project do no push through or
once the Lahug airport closes or its operations transferred to
Mactan-Cebu Airport.
Some of the landowners accepted
the assurance and executed deeds of sale with right of
repurchase. Others refused to sell because the purchase price
was way below market value forcing the government to file a
complaint for expropriation. RTC ruled for the government.
The former owners did not appeal the decision of the trial
court in view of the BUY-BACK assurance made by the
government. New TCT’s were issued in the name of the
Republic which, pursuant to R.A. 6958, was subsequently
transferred to MCIAA.
Soon after the transfer of the lots to
MCIAA (end of 1991), Lahug airport completely ceased
operations, Mactan airport having opened to accommodate
incoming and outgoing commercial flights. On the ground,
the expropriated lots were NEVER UTILIZED for the
purpose they were taken as no expansion of Lahug Airport
was undertaken. The former lot owners formally demanded
from the government that they be allowed to exercise their
promised right to repurchase.
Ouano Petition:
Soon after
the MCIAA abandoned the Lahug Airport expansion project,
informal settlers entered and occupied Lot 763-A which,
before its expropriation, belonged to the Ouanos. They are
 asking the court for the repurchase of the lot because MCIAA
ignored the demand.
MCIAA Petition:
Inocian and 4
others (children of Limbaga who originally owned 6 of the
lots expropriated) and Magat (and 7 others) filed before the
RTC for reconveyance of real properties and damages
against MCIAA.

During trial, Inocians presented the
testimony of Inocians and Uy. Uy, an employee of the CAA,
testified that he was a member of the team which negotiated
for the acquisition of certain lots for the expansion of the
Lahug airport. He said that their team assured the
landowners that their landholdings would be reconveyed to
them in the event that the Lahug Airport would be
abandoned or if its operations were transferred to the
Mactan airport.
5. 

6. 
Inocian testified that he and his mom, attended a meeting
called by the NAC team where they were also given the same
assurance. They no longer appealed in the expropriation case
due to the repurchase assurance.
Issues:
1. W/N the
petitioners are entitled to recover their property simply on
the basis of an alleged verbal promise or
assurance?
Held/Ratio:
1. YES.
There exists an
undeniable historical narrative that the predecessors of
MCIAA had suggested to the landowners of the properties
covered by the Lahug Airport expansion scheme that they
could repurchase their properties at the termination of the
airport’s venue.
MCIAA’s invocation of the Statute of
Frauds is misplaced primarily because the statue applies only
to executory contracts and not partially consummated
contracts.
In effect, the government merely held the
properties condemned in trust until the proposed public use
or purpose for which the lots were condemned was actually
consummated by the government.
Since the government
failed to perform the obligation that is the basis of the
transfer of the property, then the lot owners Ouanos and
Inocians can demand reconveyance of their old properties
after payment of condemnation price.
Constructive trust
 are fictions of equity that courts use as devices to remedy any
situation in which the holder of the legal title, MCIAA in this
case, may not, retain the beneficial interest. The landowners,
in establishing the trust – must himself do equity in a manner
as the court may deem just and reasonable.


A
condemnor should commit to use the property pursuant to
the purpose stated in the petition for expropriation, failing
which it should file another petition for the new purpose. If
not, the condemnor should return the said property to its
private owner, if the latter so desires.

Diaz vs Gorricho
Facts
Francisco and Maria are married and part of their conjugal
properties are Lots 1 and 2. Later, Francisco died and was survived
by Maria and Diaz. Gorricho then filed suit against Maria causing
a writ of attachment be issued upon Maria’s shares in Lots 1 and 2.
Both lots were sold at public auction with Gorricho emerging as
the winning bidder. Maria failed to redeem within the redemption
period causing the sheriff to execute a Final Deed of Sale in
Gorricho’s name. However, the sheriff mistakenly conveyed the
entire Lots 1 and 2, instead of just Maria’s 1/2 interest in each.
Gorricho obtained TCTs for both Lots 1 and 2 as a result.
Later, Maria died and her child, Diaz, filed suit to recover the 1/2
interest in Lots 1 and 2 on the basis of an implied constructive
trust. The suit was instituted 15 years after both Lots were
conveyed to Gorricho.
Issue
Assuming a constructive trust exists, can Diaz still recover
the Lots?
Held No.
Unlike an Express trust, Constructive trust is subject to both
prescription & laches.
The reason for the difference is as follows:
3. Express trust - the beneficiary’s delay is directly attributable
to the trustee who holds the res for 
the beneficiary. The
trust is fiduciary and the trustee’s possession isn’t adverse. It
becomes adverse only when the trustee repudiates the same
and the beneficiary becomes aware of such repudiation.

4. Constructive trust- there’s no fiduciary relationship. The

trustee neither recognizes any trust nor intends to hold the res
for the beneficiary. The trustee’s possession is adverse.

Consequently, Diaz is barred from recovering both Lots because

his action has already prescribed.
Lopez vs CA
Facts
Juliana and Jose are married with no children. Juliana
exclusively owned the disputed properties in this case as her
paraphernal properties. Later, Juliana executed a will expressing
her wish to constitute a trust fund over her paraphernal properties
with Jose as administrator. Once Jose dies or renounces the
obligation, then Lopez, nephew, would become the administrator.
As to Juliana’s share in the conjugal properties, she bequeath the
same to Jose.
Juliana initiated the probate of her will but before the probate court
can hear the petition, she died. Instead, Jose pursued the petition
and submitted to the probate court a proposed project of partition
of the properties. In said partition, Jose made it appear that some of
Juliana’s paraphernal properties were registered in both their
names. The probate court approved the partition.
In 1969, the probate court ordered that the Titles for properties
under the Trust be cancelled and new ones issued to Jose as
trustee. The rest of the properties not under the Trust were
adjudicated to Jose as Juliana’s heir. Some of Juliana’s paraphernal
properties weren’t made part of the trust. Afterwards, Jose died
disposing his properties to his Heirs.
In 1984, Lopez then assumed the trusteeship of Juliana’s estate and
later filed suit in his capacity as trustee to recover Juliana’s
paraphernal properties included in Jose’s estate.
Issue
Has Lopez’s action to recover Juliana’s paraphernal
properties prescribed?
Held Yes.
Here, there was no express trust created because the disputed
properties were expressly excluded from the trust. Instead, these
properties were adjudicated to Jose as his exclusive share. Further,
such partition bore the probate court’s approval. There was a
presumption of regularity.
However, an implied constructive trust was created because the
disputed properties were mistakenly excluded from the trust and
adjudicated to Jose. The provision on implied trust governing this
case is CC Art. 1456. This is the opposite of what Lopez claims
that the disputed properties were intended for the trust.
Now that a constructive trust has been established, can prescription
apply?
A constructive trust is subject to extinctive prescription which is 10
years. In this case, the prescriptive period must begin in 1969,
when the disputed properties were registered in Jose’s name. At
that point there was already constructive notice of the mistake to
Lopez or any other interested party. Considering the instant case
was filed in 1984, obviously the same is beyond the 10-year
prescriptive period.

Lopez v. Court of Appeals (2008) (be mindful of the dates,

prescription ang kailangan dito). Doctrine

1.
2. 3.
Facts
The difference between resulting, and constructive implied trust.
(Please see For the Topic of the Class –Aznar
Brothers v. Aying)
Article 1456 (please see the footnotes)
The right to seek reconveyance based on an implied or constructive
trust is not absolute. It is subject to extinctive prescription. An action
for reconveyance based on implied or constructive trust prescribes
in 10 years. This period is reckoned from the date of the issuance of
the original certificate of title or transfer certificate of title. Since such
issuance operates as a constructive notice to the whole world, the
discovery of the fraud is
deemed to have taken place at that time.

The instant petition stemmed from an action for reconveyance

instituted by petitioner Richard B. Lopez in his

capacity as trustee of the estate of the late Juliana Lopez Manzano

(Juliana) to recover from respondents several large

tracts of lands allegedly belonging to the trust estate of Juliana.

The decedent, Juliana, was married to Jose Lopez Manzano (Jose).
Their union did not bear any children. Juliana
was the owner of several properties, among them, the properties subject
of this dispute. The disputed properties totaling
more than 1,500 hectares consist of six parcels of land. They were
the exclusive paraphernal properties of Juliana.
On 23 March 1968, Juliana executed a notarial will, whereby she
expressed that she wished to constitute a trust
fund for her paraphernal properties, to be known as Fideicomiso, to be
administered by her husband. If her husband were to die or renounce
the obligation, her nephew, Enrique Lopez, was to become
administrator and executor of the Fideicomiso. As to her conjugal
properties, Juliana bequeathed the portion that she could legally dispose
to her
husband, and after his death, said properties were to pass to her great
grandchildren.
Juliana died on 12 August 1968. The petition was pursued instead in
Special Proceeding (SP 706) by her husband,
Jose, who was the designated executor in the will. On 7 October 1968,
the probate court, admitted the will to probate and issued the letters
testamentary to Jose. Jose then submitted an inventory of Juliana's real
and personal properties with their
appraised values, which was approved by the probate court.
Thereafter, Jose filed a Report dated 16 August 1969, which included a
proposed project of partition. In the
report, Jose explained that as the only compulsory heir of Juliana, he
was entitled by operation of law to one-half (1/2) of Juliana's
paraphernal properties as his legitime, while the other one-half
(1/2) was to be constituted into the Fideicomiso. At the same time,
Jose alleged that he and Juliana had outstanding debts totaling
P816,000.00 excluding interests, and that these debts were secured by
real estate mortgages. He noted that if these debts were liquidated, the

"residuary estate available for distribution would, value-wise, be very

small."
On 25 August 1969, the probate court issued an order approving
the project of partition. As to the
properties to be constituted into the Fideicomiso, the probate court
ordered that the certificates of title thereto be cancelled, and, in lieu
thereof, new certificates be issued in favor of Jose as trustee of the
Fideicomiso covering one-half (1/2) of the properties listed on the
project of partition; and regarding the other half, to be registered in the
name of Jose as heir of Juliana. The properties which Jose had alleged
as registered in his and Juliana's names, including the disputed lots,
were adjudicated to Jose as heir, subject to the condition that Jose
would settle the obligations charged on these properties. The probate
court, thus, directed that new certificates of title be issued in favor of
Jose as the registered owner thereof in its Order dated 15 September
1969. On even date, the certificates of title of the disputed properties
were issued in the
name of Jose.
The Fideicomiso was constituted in S.P No. 706 encompassing one-
half (1/2) of the Abra de Ilog lot on Mindoro,
the 1/6 portion of the lot in Antorcha St. in Balayan, Batangas and all
other properties inherited ab intestato by Juliana from her sister,
Clemencia, in accordance with the order of the probate court in S.P.
No. 706. The disputed lands were
excluded from the trust.
Petitioner's father, Enrique Lopez, assumed the trusteeship of Juliana's
estate. On 30 August 1984, the RTC of
Batangas appointed the petitioner as trustee of Juliana's estate. On 11
December 1984, petitioner instituted an action for reconveyance of
parcels of land with sum of money before the RTC of Balayan,
Batangas against respondents. The complaint alleged that Jose was able
to register in his name the disputed properties, which were the
paraphernal properties of Juliana, either during their conjugal
union or in the course of the performance of his duties as executor
of the testate estate of Juliana and that upon the death of Jose, the
disputed properties were included in the inventory as if they
formed part of Jose's estate when in fact Jose was holding them
only in trust for the trust
estate of Juliana.

On 10 September 1990, the RTC rendered a sum

mary judgment, dismissing the action on the ground of

prescription of action. Hence, this petition.

Issue
1. W/N the action for reconveyance has prescribed?

Held & Ratio

1.
Yes. The resolution of this issue calls for a determination of
whether or not that there was an implied trust constituted over the
disputed properties when Jose, the trustee, registered them in his
name. If there was an implied trust, then it will be subject to
extinctive prescription of 10 years. The Court found that there was
indeed an implied, constructive trust when the court, by an
apparent mistake, excluded the disputed properties in the
Fideicomiso and subsequently adjudicated the same to be
registered under Jose’s name as heir. The reckoning point of the
prescription was 15 September 1969, when the disputed properties,
by court
order, were registered under Jose’s name.1
Petitioner insists that an express trust was constituted over the
disputed properties; thus the registration of the disputed properties in
the name of Jose as trustee cannot give rise to prescription of action to
prevent the recovery of the disputed properties by the beneficiary
against the trustee. Juliana did indeed intend to constitute an
express trust, but the disputed properties were expressly excluded
from the Fideicomiso. The probate court adjudicated the disputed
properties to Jose as the sole heir of Juliana. If a mistake was made
in excluding the disputed properties from the Fideicomiso and
adjudicating the same to Jose as sole heir, the mistake was not
rectified as no party appeared to oppose or appeal the exclusion of
the disputed properties from the Fideicomiso. Moreover, the
exclusion of the disputed properties from the Fideicomiso bore the
approval of the probate court. The issuance of the probate court's
order adjudicating the disputed properties to
Jose as the sole heir of Juliana enjoys the presumption of regularity.
On the premise that the disputed properties were the paraphernal
properties of Juliana which should have been included in the
Fideicomiso, their registration in the name of Jose would be
erroneous and Jose's possession would be that of a trustee in an
implied trust. 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. The facts of the case are governed by Article 14562.
For the Topic of the Class
In further, the Court differentiated two
kinds of implied trusts in Aznar Brothers Realty Company v. Aying, to
wit:

x x x In turn, implied trusts are either resulting or constructive trusts.

These two are differentiated from each other

as follows:
Resulting trusts are based on the equitable doctrine that valuable
consideration and not legal title determines the equitable title or interest
and are presumed always to have been contemplated by the parties.
They arise from the nature of circumstances of the consideration
involved in a transaction whereby one person thereby becomes invested
with legal title but is obligated in equity to hold his legal title for the
benefit of another. On the other hand, constructive trusts are created by
the construction of equity in order to satisfy the demands of justice and
prevent unjust enrichment. They arise contrary to intention against one
who, by fraud, duress or abuse of confidence, obtains or holds the legal
right to property which he ought not, in equity and good conscience, to
hold.

A resulting trust is presumed to have been contemplated by the

parties, the intention as to which is to be found in the nature of
their transaction but not expressed in the deed itself. Specific
examples of resulting trusts may be found

in the Civil Code, particularly Arts. 1448, 1449, 1451, 1452 and 1453.
A constructive trust is created, not by any word evincing a direct
intention to create a trust, but by operation of law in order to
satisfy the demands of justice and to prevent unjust enrichment. It
is raised by equity in respect of property, which has been acquired by
fraud, or where although acquired originally without fraud, it is against
equity that it
should be retained by the person holding it. Constructive trusts are
illustrated in Arts. 1450, 1454, 1455 and 1456.

Salao v. Salao
Facts:

This litigation is about a 47 hectare fishpond (Calunuran fishpond).

Manuel Salao and Valentina Ignacio had 4 children (Patricio, Alejandra,
Juan(Banli), and Ambrosia). Manuel Salao died first, followed by the
eldest son, Patricio. After some time, Valenti na also died and her
estate was administered by Ambrosia. There were 4 legal heirs
(Alejandra, Juan(Banli), Ambrosia and, the son of Patricio, Valentin).
Basically, the lands that were adjudicated were mostly fishponds and
ricelands. After the partition of the estate, it was shown that Banli and
Ambrosia were able to obtain new fishponds which were both
registered under the Torrens System. One of those fishponds is the
Calunuran fishpond. Take note that the person bringing this suit is the
daughter of Valentin, named Benita. This was after Valentin had died.
His estate was partitioned between his two daughters, Benita and
Victorina. Benita is claiming that in obtaining the Calunuran fishpond,
funds from the estate of Manuel Salao were used and as such,
Valentin Salao and Alejandra Salao were also included in that
venture/acquisition of the Calunuran fishpond. There was no
documentary evidence to support this claim by Benita. Also, there
were no mention of such interest made in the extrajudicial partition of
Valentin’s estate. Another thing to take into account is that, Ambrosia
donated the fishpond in contention to Banli’s son Juan Salao Jr. So to
recap, the parties in this case is Benita (daughter of Valentin) against
Juan Jr. (Son of Banli and Nephew of Ambrosia). Benita is claiming a
share in the Calunuran fishpond because it claims that her father had a
share in acquiring the said Calunuran fishpond. Juan Jr, disagrees and
contends that the sole owner is his father and aunt, Ambrosia as
clearly indicated in the certificate of title. There was an action for the
annulment of the donation to Juan Jr and for the reconveyance of
their share in the Calunuran fishpond. Juan Jr subsequently died and
was substituted by his widow and six children.
BLOCK B 2016
Trial Court dismissed the complaint. It found that there were no
community of property among Juan Salao Sr., Ambrosia, and Valentin
when the Calunuran fishpond was acquired. It said that Valentin’s
omission during his lifetime to assail the Torrent titles of Juan and
Ambrosia signified that he was not a co-owner of the fishponds. No
strong evidence supported the contentions of Benita.

Both appealed. Benita, because the reconveyance was denied. Juan

Jr., because the claim for damages was denied.

Issue:
Salao by Juan Salao Sr. and Ambrosia.

W/N the Calunuran fishpond was held in trust for Valentin

Held:

NO. sTrusts are either express or implied. Express trusts are created
by the intention of the trustor or of the parties. Implied trusts come
into being by operation of law. Express trusts – cannot prove using
parol evidence. Implied trusts may be proven by oral evidence. In this
case, plaintiff’s pleadings and evidence cannot be relied upon to prove
an implied trust. The trial court’s firm conclusion that there was no
community of property between the parties is substantiated by
documentary evidence. The fact that Valentin Salao and his
successors-in-interest never bothered for a period of nearly forty years
to procure any documentary evidence to establish his supposed
interest of participation in the two fishponds is very suggestive of the
absence of such interest. There was also no evidence that shows
Valentin’s participation in the Calunuran fishpond. All in all, the
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. A trust cannot be established, contrary to the recitals of a
Torrens title, upon vague and inconclusive proof. There was no
resulting trust because there was never any intention on the part of
Juan Sr., Ambrosia and Valentin to create any trust. There was no
constructive trust because the registration of the fishpond 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 as being held in trust by the heirs of
Juan Y Salao, Sr. for the heirs of Valentin Salao. And EVEN IF there was
an implied trust, it was clearly barred by prescription or laches.

Benita Salao vs Juan Salao

Facts
Manuel and Valentina are married and they have 4 children
namely: Patricio, Alejandra, Juan, and Ambrosia. Manuel died
followed by Patricio, survived by his only child, Valentin.
Afterwards, Valentina also died leaving Ambrosia to administer
her estate, which included a fishpond. Valentina’s estate was then
extrajudicially partitioned.
The evidence shows that prior to Valentina’s death, Juan and
Ambrosia secured a TCT over the Calunuran fishpond and
exercised dominical rights over the same...
Note: the Facts are so messed up and mix in intermittent Spanish
sentences, the story’s unreadable.
What’s clear is Benita Salao is Valentin’s heir and he alleges the
Calunuran fishpond was assigned to Valentin through an oral
partition. Juan opposes on the ground he and Ambrosia exclusively
own the same.
Issue
Did Juan and Ambrosia hold in trust the Calunuran
fishpond for Valentin?
Held No.
Here, there’s no evidence to provide there was an express trust
over the Calunuran fishpond in Valentin’s favor. Only parol
evidence was presented to prove the alleged trust claiming there
was an oral partition assigning the Calunuran fishpond to Valentin.
An express trust concerning an immovable can’t be proved by
parol evidence.
But is the parol evidence presented sufficient to prove an implied
trust?
On this point, the evidence also fails. It’s incredible to believe the
47 hectare Calunuran fishpond would be assigned to Valentin by
mere word of mouth. In contrast, for a mere 17 hectare of land
Valentina left, the Heirs had to execute an elaborate 22 page
document. Further, the Calunuran fishpond is registered land but
Benita Salao failed to present the registrable deed over the same,
despite the lapse of 40 years.
Consequently, Benita failed to prove the existence of a trust by
clear, satisfactory, and convincing evidence. A trust can’t rest on
vague and uncertain evidence or loose, equivocal, or indefinite
declarations. If the trust is to be proven by parol evidence, such
parol evidence must be trustworthy.
There was no resulting trust in this case because there was never
any intention on the part of the parties to create a trust. Further,
there’s no constructive trust because the registration of the
Calunuran fishpond in the names of Juan and Ambrosia wasn’t
vitiated by fraud or mistake.
Lastly, even assuming there was a constructive trust, the action
would still be barred by prescription or laches. The reason being
the Calunuran fishpond was registered in 1911 but the action for
reconveyance was file din 1952, way after the 10-year prescriptive
period.
Municipality of Victorias vs CA
Facts
Gonzalo Ditching owns Land X. Gonzalo died and was
survived by his widow, Simeona, and daughter, Isabel. Later,
Isabel likewise dead leaving her child, respondent Norma. When
Simeona died, Norma inherited Land X from her.
Norma then donated a portion of Land X to the Municipality to be
used for a certain high school and had the remaining portion be
surveyed. In the survey, she discovered that a portion of Land the
Municipality uses as a cemetery formed part of Land X. She then
demanded from the Municipality payment for past rentals and
delivery of the portion allegedly illegally occupied. The
Municipality refused causing Norma to file suit. The Municipality
alleges it bought the disputed Land from Simeona.
Issue
Can Norma recover the disputed portion from the
Municipality?
Held No.
Here, the evidence shows the Municipality actually bought the
disputed Land from Simeona. However, the Municipality failed to
registered the Deed of Sale and when Simeona died, Norma
claimed to have inherited the whole of Land X, including the
disputed Land, and successfully registered the same under the
Torrens system.
Further, Norma herself admitted she inherited Land X from
Simeona, who already sold the disputed portion to the Municipality
beforehand. Consequently, Norma had no legal right to register the
disputed portion in her name because Simeona, and therefore her
as well, never owned it.
When Land is decreed in a person’s name through fraud or
mistake, such person is by operation of law considered a trustee of
an implied trust for the benefit of the property’s true owner. The
beneficiary has the right to enforce the trust and recover the res
even if the trustee has a Torrens title in his name.
Consequently, Norma merely held the disputed portion in trust for
the Municipality and the latter can neither be deprived of
possession nor made to pay rentals simply because Norma
possessed a Torrens title in her name.
In fact, the Municipality can demand Norma to convey the
disputed portion in its name pursuant to the Implied Trust.
Municipality of Victorias v. Court of Appeals (1987)
Doctrines:

The existence of public records other than the Torrens title indicating
a proper description of the land, and not the technical description
thereof, and clearly indicating the intention to create a trust, was
considered sufficient proof to support a claim of the cestui que trust
(beneficiary).
Facts:
Norma Leuenberger, married to Francisco Soliva, inherited a certain lot
in Negros Occidental from her grandmother, Simeona Ditching. In
1963, she discovered that the questioned parcel of land used by the
Municipality of Victorias as a cemetery is within her property.
Thereafter, she wrote the Mayor of Victorias regarding her discovery,
demanding payment of past rentals and requesting delivery of the area
allegedly illegally occupied by the petitioner. When the Mayor replied
that municipality bought the land, she asked to be shown the papers
concerning the sale but was referred by the Mayor to the municipal
treasurer who refused to show the same. Ultimately, it was established
that the deed could never be found.
In light of this, Norma sued for recovery of possession of the parcel of
land occupied by the municipal cemetery. In its answer, the
Municipality, by way of special defense, alleged ownership of the lot
having bought it from Simeona Ditching sometime in 1934. However,
the Municipality could not present the Deed of Sale. Nonetheless, the
lower court decided in favor of the Municipality, but the CA reversed,
hence, this petition for review on certiorari.
Issue:
5. Whether or not the secondary evidence presented by the
petitioner municipality is sufficient to substantiate its claim that it
acquired the disputed land by means of a Deed of Sale.

6. (TRUSTS ISSUE) Whether or not Norma was the owner of the

 land or just a mere trustee.

Held/Ratio:
3. YES. The secondary evidence was sufficient to establish the
existence of the sale. Under the Rules of Court, when the
original writing has been lost or destroyed, or cannot be produced
in court, upon proof of its execution and loss or destruction or
unavailability, its contents may be proved by a copy, or by a
recital of its contents in some authentic document, or by the
recollection of witnesses. In this case, the Municipality was able
to present an authentic document containing pertinent
information regarding the sale (subject land, parties,
consideration, names of witnesses, date, etc. Further, the tax
declarations proved to show the boundaries of the lot in question.

Moreover, the law provides that the thing sold shall be
understood as delivered, when it is placed in the control and
possession of the vendee. Where there is no express provision
that title shall not pass until payment of the price, and the
thing sold has been delivered, title passes from the moment
the thing sold is placed in the possession and control of the
buyer. 
Similarly, when the sale is made through a public
instrument, the execution thereof shall be equivalent to the
delivery of the thing which is the object of the contract, if from
the deed; the contrary does not appear or cannot be clearly
inferred. The execution of the public instrument operates as a
formal or symbolic delivery of the property sold and authorizes
the buyer to use the document as proof of ownership. 
Still
more, in the case at bar, it is undisputed that petitioner had been
in open, public, adverse and continuous possession of the land for
a period of more than thirty years. 
Therefore, in view of the
foregoing, even if the original Deed of Sale cannot be
presented, the Municipality was able to prove that the sale
between it and Simeona, from whom Norma acquired the
alleged ownership, indeed happened.

4. NO. Norma was a mere trustee. As a consequence to the above

ratio, Norma, admittedly inheriting the land from her
 grandmother, who had already sold the land to the petitioner in
1934, merely stepped into the shoes of her grandmother and
cannot claim a better right than her predecessor-in-interest. When
she applied for registration

of the disputed land, she had no legal right to do so as she had no

ownership of the land since land registration is not a mode of acquiring
ownership but only of confirming ownership of the land (note that
Norma became the registered owner only in 1963, whereas the sale
actually happened in 1934).
Thus, where the land is decreed in the name of a person through
fraud or mistake, such person is by operation of law considered a
trustee of an implied trust for the benefit of the persons from
whom the property comes. The beneficiary shall have the right to
enforce the trust, notwithstanding the irrevocability of the Torrens title
and the trustee and his successors-in-interest are bound to execute the
deed of reconveyance.
As the land in dispute is held by Norma in trust for the Municipality, it
is logical to conclude that the latter, herein proved as the beneficiary of
a trust, can neither be deprived of its possession nor be made to pay
rentals thereof. Norma is in equity bound to reconvey the subject land
to the cestui que trust, the Municipality of Victorias.

Municipality of Victorias v. CA
GR. L-31189 // March 31, 1987 // Paras, J. Summary/ Memory
Aid:
Facts:

Gonzalo Ditching owned a 27.246 hectare sugar land which is part of

Cadastral Lot 140 in Mandaniog Victorias, Negros Occidental. Gonzalo
died and was survived by his spouse Simeona and a daughter named
Isabel, who (both?) died in 1928 leaving a six-month old daughter
named Norma Leuenberger. (Note: Norma is Isabel’s child)

Norma married Francisco Soliva and inherited from Simeona the

whole of Lot 140 and subsequently donated a portion (~3 hectares) of
it to petitioner Municipality in 1952 for the construction of a certain
high school. She intended to convert a portion (~4 hectares) of the lot
into a subdivision.

In 1963, Norma discovered that petitioner Municipality was using the

land she donated as a cemetery and was encroaching upon her
property, identified as Lot 76. When Norma inquired upon the matter
with the mayor of the municipality, the latter told Norma that the
municipality already bought the land. Norma then demanded that she
be shown the papers evidencing the sale, however, the mayor asked
Norma to ask the municipal treasurer, who refused to do the same.

Norma then filed a complaint with the CFI of Negros Occidental for
recovery of possession of the disputed parcel of land occupied by the
municipality. The latter interposed the defense of ownership over the
lot having bought it from Norma’s grandmother Simeona. The CFI
decided in favor of petitioner Municipality which the CA subsequently
reversed. Hence, this petition for review by way of certiorari.

Issue(s):
W/N Norma is the lawful owner of the disputed lot.

Ratio/Held:
The SC held that Norma held the disputed property in trust for the
Municipality of Victorias since Art. 1456 provides that if a property is
acquired through mistake or fraud the person who obtained it is
considered by the law a trustee of an implied trust for the benefit of the
person from who the property comes.
Although petitioner Municipality could not present the original Deed
of Sale covering the said lot, they produced however a notarial report
which showed the following:

7.   Nature of the instrument – a deed of sale

8.   Subject of the sale – two parcels of land (Lot 140-A and

140- 
B)
9.   Parties of the contract – Simeona and the Mayor of the

Municpality

10.   Consideration - P750 
Under the best evidence

rule, if the original writing is lost or destroyed, the concerned
party may present either a copy, an authentic copy reciting its
contents or by recollection of a witness. Hence, the notarial
report of Notary Aragorn was sufficient to substantiate the
Municipalities claim that it acquired the land through a sale.

Unfortunately, the Municipality failed to register the original
Deed of Sale and when Simeona died, Norma mistakenly claimed
to have inherited the disputed land and had it titled under her
name although the lot had already been sold to petitioner
Municipality. The SC cited Article 1456 and decreed that Norma
was a trustee of an implied trust for the benefit of the
Municipality and is duty bound to execute a deed of
reconveyance to the latter.

Neither can Norma deprive the Municipality of possession over

the disputed lot nor be made to pay rentals thereof.

PNB vs CA
Facts
Mata & Co. Inc. (Mata) is a private corporation engaged in
providing goods and services to shipping companies. One of
Mata’s customers is Star Krist Foods, Inc. (StarKrist). As part of
an agreement, Mata would advance StarKrist’s shipping expenses
and StarKrist would later reimburse Mata by sending a telegraphic
transfer through banks for credit to Mata’s account.
This is the set-up when Security Pacific National Bank (SEPAC),
PNB’s agent, transmitted a cable to PNB to pay $14k to Mata by
crediting Mata’s account with the Insular bank of Asia and
America (IBAA) per StarKirst’s order. However, PNB noticed an
error and found out the amount should only be $1.4k and not $14k.
Afterwards, PNB issued a check worth $1.4k.
14 days later, PNB issued another check worth $14k in Mata’s
favor purporting to be another transmittal of reimbursement from
StarKrist. PNB discovered the error 7 years later and requested
Mata return the $14k after discovering the error but the latter
refused. PNB then filed suit.
Issue
Is Mata’s obligation to return the 14k governed by implied
constructive trust or solutio indebiti?
Held
Both || But barred by Laches
Here, Mata received the $14k with no intention of holding the
same in trust for PNB as the beneficiary. Consequently, an implied
constructive trust was created.
However, the instant case also fulfills the requirements of solutio
indebiti, so which is which? Undoubtedly, the $14k was paid by
mistake and Mata had no right to receive the same.
The instant case is both a constructive trust and solutio indebiti.
PNB had the choice of the 2 initially but the remedy of solutio
indebiti is already barred by prescription. However, it can’t seek
remedy through implied trust because the same is already barred
by laches.
Note:
It’s important to distinguish between the 2 because the
prescriptive periods are different for each. Trust: 10 years || Solutio
Indebiti = 6 years.

PNB v. CA (1993) (payment of two checks: $1,400 and $14,000 / solutio

indebiti v. constructive trust) Doctrines:

 Syllabus: implied trusts, including constructive trusts, together

with quasi-contracts both embodying he principle of equity over
strict legalism have been incorporated in our Civil Code 
 Art: 1456 (Constructive Trust) – If a 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 

 There is no showing that Art. 1456 does not allow for mutual
mistake, or mistake in either the grantor’s or grantee’s part.
Facts: Private respondent B. P. Mata & Co (Mata) is engaged in
providing goods and services to shipping companies, one of
which is Star Kist, for whom Mata made advances for the crew’s
medical expenses and others. Then Star Kist pays Mata back for
these advances. On February 21, 1975, Star Kist’s bank, Security
Pacific National Bank of LA (SEPAC), effected payment by
order its agent in the Philippines, PNB, to pay Mata the amount
of $14,000, to be deposited with Mata’s account in Insular Bank
of Asia and America. However, PNB noticed an error and sent a
service message to SEPAC. As it turns out, PNB should only pay
$1,400 and not $14,000. So on Feb. 24, PNB issued a cashier’s
check to Mata, payable to the amount of $1,400. However,
merely 14 days later, on March 11, PNB issued another
cashier’s check to Mata, for the amount of $14,000. Six years
after, in 1981, PNB discovered their mistake and demanded
that Mata return the amount of the 2nd check. In 1982, PNB
instituted an action for the collection or refund of the $14,000
arguing that a constructive trust was instituted based on Art.
1456. Mata argued that it wasn’t a constructive trust but a quasi-
contract of solutio indebiti, where if one party receives something
which he has no right to demand it, or it has been delivered by
mistake, then the obligation to return it arises (Art. 2154). Mata
says that under Art. 1456, it is the recipient who must have
acted in fraud or committed a mistake in order that a
constructive trust will arise, while in Art. 2154, it is only the
one who delivers who commits a mistake. And under solutio
indebiti, the action has already prescribed because the case was
instituted 7 years after the right accrued—beyond the 6-year
prescription period of quasi-contracts. The RTC and CA agreed
with Mata and dismissed the complaint. Issues: 
1. W/N PNB’s cause of action properly fell within the ambit of
constructive trusts and not solutio indebiti
Held/Ratio:

1. It does not matter because PNB cannot recover either way because
his cause of action has been barred by laches. It’s quite “amazing”
that it took PNB almost 7 years to discover the mistake, and its
reasoning (that the volume of international transactions handled by its
Cable and Remittance Division) is unpersuasive and specious.
However, the court still decided to discuss the differences between a
constructive trust and solutio indebiti. The court said that there is no
showing that under Art. 1456, the mistake or fraud must have been on
the part of the recipient or grantee. So in effect, really, PNB could have
made a claim under either solutio indebiti or constructive trust.
However, since the action for solutio indebiti has already prescribed,
then he is left to argue under a constructive trust. And while the case
was within the prescriptive period for that, it’s still barred by laches.
The court said that under American jurisprudence, there is no fiduciary
duty arising from a constructive trust, and that under implied trusts, the
only duty is to surrender and not manage the property. Both
constructive trusts and quasi-contracts are misnomers, because they are
far removed from the definition of trusts and contracts. However, in the
interest of preventing unjust enrichment, the law provides for certain
obligations which are named as such. Under American jurisprudence,
quasi-contracts give rise to 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. The distinction is more procedural than substantive. Both
are grounded upon Civil Law principles as expressed in the Latin
maxim, “Nemo cum alterius detrimento locupletari potest”.

Sps. Felipe and Josefa Paringit vs Bajit

Facts
Julian Paringit and Aurelia Paringit are married and they
have 5 children, including Felipe and Marciana. The couple leased
Lot X from Terocel Realty and lived there. Aurelia died and
afterwards Terocel decided to sell Lot X and offered it to Julian.
However, Julian didn’t have enough money to purchase Lot X and
turned to his children for help. Among his children, only Felipe
had enough money to purchase Lot X. Julian then assigned his
leasehold right to Felipe and the latter bought Lot X.
Afterwards, there was a dispute among the children as to Lot X’s
true nature causing Julian to execute an affidavit stating Lot X was
to be inherited by his children after the latter have reimbursed
Felipe for the purchase price. The children, including Felipe
through his wife, signed the affidavit. Later, Felipe registered Lot
X but it was who Marciano lived in Lot X. Years later, Felipe
demanded Marciana pay rent for living in Lot X but the latter
refused, believing she had the right to occupy Lot X. Felipe then
filed an ejectment suit and successfully managed to eject Marciana.
Marciana then filed suit to annul Felipe’s tile and reconveyance.
Issue
Did Felipe purchase Lot X under an implied trust with
Julian’s children as beneficiary?
Held Yes.
The instant case is an implied resulting trust falling under the CC
Art. 1450.
Here, the circumstances clearly show an implied trust. True, there
was no express agreement that Felipe bought Lot X for his siblings
and father. However, such agreement came about by operation of
law.
These circumstances are:
14. At the time Tercol offered to sell Lot X, Julian and his
children co-owned the leasehold right. 
Any sale of the
 leasehold right should’ve been agreed to by all the co-
owners. However, only Julian agreed to the sale. If the
intention was really for Felipe to solely own Lot X, the
conformity of the co-owners should’ve been secured.

15. Julian’s affidavit stipulates Felipe merely advanced payment

because none of the other co-owners had sufficient money to
purchase Lot X. Further, the co-owners were to later
reimburse Felipe. Notable, Felipe, acting through his wife,
signed the affidavit.

16. After buying Lot X, Felipe moved out of the same and
allowed Marciano to live there. Such act doesn’t make sense
if Felipe truly believes he’s the absolute owner.

17. Felipe demanded rent from Marciano only 10 years after he

bought Lot X. During those 10 years, Felipe respected
Marciano’s right to occupy Lot X.

Lastly, the instant case is neither barred by prescription nor laches.

Even assuming Felipe’s registration of title over Lot X in 1987 is a
repudiation of the trust, which in reality isn’t, the instant action is
still within the 10 year prescriptive period, being filed in 1996.

Paringit v. Bajit (2010) (Implied trust in favor of 5 siblings, brother

who paid is being selfish wanting to claim the property for himself)
Doctrine:

Implied trust under Article 1450 presupposes a situation where a

person, using his own funds, buys property on behalf of another, who
in the meantime may not have the funds to purchase it. Title to the
property is for the time being placed in the name of the trustee, the
person who pays for it, until he is reimbursed by the beneficiary, the
person for whom the trustee bought the land. It is only after the
beneficiary reimburses the trustee of the purchase price that the former
can compel conveyance of the property from the latter.
Facts:
Spouses Julian and Aurelia Paringit were the lessees of a lot in
Sampaloc, Manila. They built a home on the lot and lived there with
their 5 children: Florencio, Felipe, Marciana, Adolio, and Rosario.
Terocel Realty, the lessor, offered to sell the lot to Julian Paringit.
Julian wanted to buy the property but he did not have enough money.
Only his son Felipe had the financial capacity to pay the purchase price.
Therefore, Felipe and his wife Josefa purchased the property from
Terocel for Php55,500. A Deed of Absolute Sale was executed in their
favor and title was turned over to them.
In 1985, Julian executed an affidavit to clarify the issue of the
ownership of the property. Julian claimed that it was bought for the
benefit of all his children. The affidavit stated:
Terocel Realty, Inc., owners of the lots in Sampaloc, gave a limited
period to occupants like us within which to purchase the lands
occupied and as I had no funds at that time, I asked all my children and
their respective spouses to contribute money with which to purchase
the lot and thereafter to divide the lot among themselves but only my
son Felipe Paringit and his wife Josefa answered my plea and so, in
order that they could purchase the land, I assigned to my son and his
wife my right to the whole property and with this assignment, the
couple purchased the parcel of land from the Terocel Realty, Inc. for
the sum of Fifty Five Thousand Five Hundred Pesos (P55,500.00)
Philippine currency.
...
The (property) must be divided equally among my five children at 15
sq. m. each; but each of them should reimburse their brother Felipe
and his wife, Josefa the proportional amount advanced by them...
The siblings Marciana, Rosario and Adolio signed their concurrence to the
affidavit. Josefa, Felipe’s wife signed the affidavit for Felipe who was in Saudi
Arabia. Only Florencio did not sign.
Although the lot was registered under the name of Felipe and his wife, they moved
into a different house on the same street where the subject property is situated.
While the three other siblings occupied the house. After Julian died, Felipe sent
demand letters for rentals to his siblings who were occupying the lot. Marciana
and the other siblings refused to pay rent contending that they all inherited the land
from their father. Felipe succeeded in securing an ejectment against his siblings
and thereafter moved into the house with his wife.

Marciana and the other siblings filed the present action for annulment of title and
reconveyance of the property. In his answer, Felipe denied knowledge of any
agreement that the property would be purchased for all of them. Josefa, Felipe’s
wife who signed the affidavit said she only signed because if she did not, everyone
would be mad at her. She further says she merely signed to admit having received
such affidavit.

1. W/N Felipe and his wife purchased the subject lot under an implied
trust for the benefit of all the children of Julian
2. W/N Marciana and the other siblings’ right of action was barred by
prescription or laches
Held:
18. YES, there was indeed an implied trust over the subject property
under Article 1450 of the Civil Code in favor of Marciana and the
other siblings. They must reimburse Felipe of their corresponding
share in the purchase price. 
Article 1450 presupposes a
situation where a person, using his own funds (Felipe in this
case), buys property on behalf of another, who in the meantime
may not have the funds to purchase it (his father Julian for the
benefit of the 5 siblings). Title to the property is for the time
being placed in the name of the trustee, the person who pays for it
(Felipe), until he is reimbursed by the beneficiary, the person for
whom the trustee bought the land (the other siblings). 
Julian
said in his affidavit that Felipe and his wife bought the lot from
Terocel Realty on his behalf and on behalf of his other children.
Felipe and his wife advanced the payment because Julian and his
other children did not then have the money needed to meet the
realty company's deadline for the purchase. Julian added that his
other children were to reimburse Felipe for the money he
 advanced for them. 
The circumstances of this case are exactly
what implied trust is about. Although no express agreement
covered Felipe and his wife's purchase of the lot for the siblings
and their father, it came about by operation of law and is
protected by it. The nature of the transaction established the
implied trust. 
Furthermore, Felipe and his wife demanded rent
from Marciana and the others only a year after Julian's death in
1994. This shows that from 1984 when they bought the lot to
1995, when they made their demand on the occupants to leave, or
for over 10 years, Felipe and his wife respected the right of the
siblings to reside on the property. This is incompatible with their
claim that they bought the house and lot for themselves back in
1984.

19. NO. The action of Marciana and the other siblings is not barred
by prescription nor by laches. 
An implied trust prescribes
within 10 years from the time the right of action accrues. The
beneficiary's cause of action arises when the trustee repudiates
the trust, and not when the trust was created as Felipe and his
wife contend. The spouses registered the lot in their names in
January 1987 but they could not be said to have repudiated the
implied trust by that registration. Their purchase of the land and
registration of its title in their names are not incompatible with
implied trust. It was understood that they did this for the benefit
of Julian and all the children. 
Felipe and his wife also claim
that Marciana and the others’ action was barred by laches. There
is no basis for such claim. They had no reason to file an earlier
suit against Felipe and his wife since the latter had not bothered
them in their possession for so long. There was repudiation only
when Felipe sent demand letters after which Marciana and the
other siblings immediately took legal action.

Heirs of Emilio Candelaria vs Romero

Facts
Lucas Candelaria bought Lot X on installment basis. He
paid the 1st two installment but was financially unable to pay the
subsequent installments. Unable to pay, Lucas sold his interest to
Lot X to his brother, Emilio Candelaria. Emilio reimbursed Lucas
for the 1st two installments and continued paying the subsequent
installments. However, payments were still made in Lucas’ name
with the understanding that the necessary transfer documents
would be made later. A TCT was issued over Lot X in Lucas’
name. Lucas held Lot X in trust for Emilio with the former and his
Heirs acknowledging the same. Later both Emilio and Lucas died
with the latter survived by Romero.
Afterwards, the Heirs of Emilio demanded Romero convey the
property to them but the latter refused, hence this case.
Issue
Was there an implied trust between the Heirs of Emilio and
Romero?
Held Yes.
This is a case of implied resultingtrust falling under Art. 1453 with
Emilio as beneficiary and Lucas as trustee. A trust where property
is taken by a person under an agreement to hold it for another.
Here, it’s undisputed Emilio paid for Lot X but Lucas held Title
over the same.
The Petitioners allegation itself shows there was an understanding
between Emilio and Lucas that the necessary transfer documents
would be later executed. Clear, Emilio intended to obtain a
beneficial interest in Lot X, having paid for the same.
Next, an implied resulting trust isn’t subject to prescription unless
the trust was expressly repudiated and the same was made known
to the beneficiary. Consequently, the beneficiary isn’t prejudiced
by the trustee’s continued possession of the res no matter how
long.

Heirs of Emilio Candelaria vs Romero

20. Facts
Lucas Candelaria bought Lot X on installment basis.
He paid the 1st two installment but was financially unable to
pay the subsequent installments. Unable to pay, Lucas sold
his interest to Lot X to his brother, Emilio Candelaria. Emilio
reimbursed Lucas for the 1st two installments and continued
paying the subsequent installments. However, payments were
still made in Lucas’ name with the understanding that the
necessary transfer documents would be made later. A TCT
was issued over Lot X in Lucas’ name. Lucas held Lot X in
trust for Emilio with the former and his Heirs acknowledging
the same. Later both Emilio and Lucas died with the latter
survived by Romero.
21. Afterwards, the Heirs of Emilio demanded Romero convey
the property to them but the latter refused, hence this case.
22. Issue
Was there an implied trust between the Heirs of
Emilio and Romero?
23. Held Yes.
24. This is a case of implied resultingtrust falling under Art. 1453
with Emilio as beneficiary and Lucas as trustee. A trust
where property is taken by a person under an agreement to
hold it for another. Here, it’s undisputed Emilio paid for Lot
X but Lucas held Title over the same.
25. The Petitioners allegation itself shows there was an
understanding between Emilio and Lucas that the necessary
transfer documents would be later executed. Clear, Emilio
intended to obtain a beneficial interest in Lot X, having paid
for the same.
26. Next, an implied resulting trust isn’t subject to prescription
unless the trust was expressly repudiated and the same was
made known to the beneficiary. Consequently, the
beneficiary isn’t prejudiced by the trustee’s continued
possession of the res no matter how long.
Heirs of Emilio Candelaria v. Romero (1960)
Doctrines:

 Where the original buyer of an immovable property had sold all
his interest thereto to a third person who reimbursed him all
amounts previously, but continued to pay the balance of the
installments in the name of the original buyer with understanding
that upon full payment the title would be transferred to the
original buyer, an implied trust had been constituted (original
buyer is the trustee; third person is the trustor). 

 Constructive or implied trusts may be barred by the lapse of time.

Laches constitutes a bar to actions to enforce the trust, and
repudiation is not required, unless there is concealment of the
facts giving rise to the trust. 

 Continuous recognition of a resulting trust precludes any defense

of laches in a suit to declare and enforce the trust. The
beneficiary of a resulting trust may, therefore, without prejudice
to his right to enforce the trust, prefer the trust to persist and
demand no conveyance from the trustee. Facts: Sometime prior
to 1917, Emilio and his brother Lucas Candelaria bought each a
lot in a certain Solokan Subdivision on installment basis. Lucas
paid the first two installments corresponding to his lot, but later
on, facing inability to meet the subsequent installments because
of his sickness, sold his interest therein to his brother Emilio.
Emilio then reimbursed Lucas the amount the latter had already
paid, and thereafter continued payment of the remaining
installments until the whole purchase price had been fully
satisfied. Emilio knew that such subsequent installments he was
paying were still under the name of his brother, and that upon full
payment the title to the property would be transferred in Lucas’
name. Emilio, moreover, had the understanding “that the
necessary documents of transfer will be made later, the reason
that the transaction being brother to brother.” In 1918, upon full
payment, a TCT for the subject lot was issued in the name of
Lucas Candelaria. From the time Emilio bought the lot from his
 brother, Lucas had been collecting all its rents for his own use as
financial aid to him as a brother in view of the fact that he was
bedridden without any means of livelihood and with several
children to support, although from 1926, when Emilio was
confined up to his death on February 1936, Lucas had been
giving part of the rents to a certain Bautista, the second wife of
Emilio, in accordance with the latter's wishes. Lucas died in
August 1942, survived by his spouse Luisa Romero and several
children. Romero and the children retained possession of the lot,
having refused to reconvey it to Ester (representative of the heirs
of Emilio) despite repeated demands. One of the main
allegations in Emilio’s heirs’ complaint was that Lucas held the
title to the lot merely in trust for Emilio and that this fact was
acknowledged not only by him but also by the defendants (his
heirs) on several occasions. This was not challenged by Lucas’
heirs. The trial court held that an express trust, as opposed to an
implied one, had been created, and such was unenforceable
because it was not in writing. The trial court furthered that the
title having been issued 38 years prior to the present action, such
action has already prescribed. Issues: 

5. W/N there was an implied trust, as opposed to an express trust.

6. W/N Emilio’s heirs’ action for reconveyance must prosper.

Held:
1. YES. There was an implied trust. Where property is taken by a
person under an agreement to hold it for, or convey it to another or the
grantor, a resulting or implied trust arises in favor of the person for
whose benefit the property was intended. This is founded on equity. It
is also the rule there that an implied trust arises where a person
purchases land with his own money and takes a conveyance thereof in
the name of another. In such a case, the property is held on a resulting
trust in favor of the one furnishing the consideration for the transfer,
unless a different intention or understanding appears. From the facts of
this case, it is apparent that Emilio Candelaria who furnished the
consideration intended to obtain a beneficial interest in the property in
question; the property in question was acquired by Lucas Candelaria
under circumstances which show it was conveyed to him on the faith of
his intention to hold it for, or convey it to the grantor, Emilio.
2. NOT DECIDED. Constructive or implied trusts, as one created in
this case, may be barred by lapse of time. Continuous recognition of a
resulting trust, however, precludes any defense of laches in a suit to
declare and enforce the trust. The fact that Lucas held the title to the lot
in question merely in trust for Emilio and that this fact was
acknowledged not only by him but also by his heirs was merely alleged
in the complaint. Therefore, the Court cannot make any conclusive
holding that Emilio’s heirs’ action had already prescribed. The case
was remanded to the trial court to allow Emilio’s heirs to show proof of
their claim that there was continuous recognition of the resulting trust.
Sidenote:

If Emilio’s heirs are able to convincingly prove that Lucas indeed
held the property in trust for Emilio, and that Lucas, Emilio and their
respective heirs had continued acknowledgement thereof, then laches
cannot lie and their action for reconveyance must be granted.
Generally: Constructive or implied trusts can be affected by laches.

Exception: Continuous recognition of the trust, however, will prevent

laches from setting in.

In this case, the continuing recognition by the heirs of Emilio of the

trust relationship (it was hypothetically admitted in court) prevented
laches from taking effect. Thus, the Supreme Court remanded the case
back to lower courts to receive more evidence.

Horacio Adaza vs CA
Facts
Victor and Rosario are married with 6 children, including
Horacio, Homero, and Violeta. Later Victor donated Land X to
Violeta which the latter accepted. Land X was originally alienable
disposable land and Violate filed a homestead application over the
same. The application was approved and an OCT issued in
Violeta’s name. Later, Violeta took out a loan from PNB secured
by Land X. Currently, Homero administers Land X.
Later, Horacio invited the Family, including Violeta, for a
gathering. At said gather, Horacio asked Violeta sign a Deed of
Waiver concerning Land X. The Deed stipulates Land X was co-
owned by Horacio and Violate even through the OCT was only in
Violeta’s name. The Deed also provides for Violeta’s transfer of
1/2 interest in Land X and improvements existing thereon on
Horacio’s favor. Violata signed the Deed.
Later, Violata filed suit to annul the Deed.
Issue
Does Horacio have any interest in Land X?
Held Yes.
Here, the Deed of Donation contains a provision which was
crossed out stipulating that: The donee shall share 1/2 of Land X
with one of her siblings after the donor’s death
The next succeeding provision reads:
The donee receives Land
X, not subject to any condition...
Horacio’s testimony shows Victor’s intention was to donate Land
X to him and Violeta as shown by the crossed-out provision. The
provision was crossed out in order to facilitate the issuance of title,
Land X at the time being alienable disposable public land.
However, Horacio was still to have 1/2 interest in Land X despite
the provision being crossed out.
Is Horacio telling the truth? There are circumstances which
indicate so The Deed of Waiver which Violeta voluntarily signed
in full view of her siblings and other family 
members It’s the
parents practice to Title Lands they acquire in the name of only 1
child. Violeta sent Horacio 2 letters acknowledging the latter’s 1/2
interest in Land X. The letter 
contained a request for Horacio to
not be hasty in dividing Land X to get his share. Horacio was
relaxed in the fact Violeta solely had Title to Land X, and it was
only when Violeta’s 
husband started showing undue interest in
Land X that he filed suit.
Consequently, the Deed of Donation created an implied trust in
Horacio’s favor with respect to half of Land X. Such Trust falls
under the CC Art. 1449.
Lastly, an implied resulting trust isn’t subject to prescription.
Further, the same isn’t barred by laches because of the existence of
a confidential relationship , namely, consanguinity, in this case.
The parties in the instant case are brother and sister and the same
excuses the long delay.

ADAZA VS COURT OF APPEALS

G.R. No. 47354; March 21, 1989
Ponente: Feliciano, J.
Petitioner:
Horacio G. Adaza and Felicidad Murandan
Respondent: The
Honorable Court of Appeals and Violeta G. Adaza Memory Aid:

Land donated in favour of Violeta alone but the Father intended to

donate it to both Violeta and Horacio. Implied trust. Defense of laches
is precluded by recognition of existence of Trust in the 2 letters.

Facts:

Victor Adaza has 6 children: petitioner Horacio, Homero,

Demosthenes, respondent Violeta, Teresita and Victor, Jr. Before
Victor died, he executed a deed of donation of a parcel of land in
Sinonok, Zamboanga Del Norte in favour of Violeta, when she was still
single. The donation was accepted in the same instrument and
notarized. Since the land was still part of the public domain, Violeta
with aid of Horacio filed a homestead application. The Original
Certificate of Title was issued in Violeta’s name alone and she declared
it under her name for tax declaration. Violeta and her husband
obtained a loan from PNB and secured it with a mortgage of the land.
After many years, Horacio asked Violeta to sign a Deed of Waiver
which stated that the Sinonok property was owned in common by
Violeta and Horacio, even though the certificate of title had been
issued in her name only. It also provided for the waiver, transfer and
conveyance by Violeta in favor of Horacio of 1/2 of the Sinonok
property, together with all improvements existing in that 1/2 portion.
Violeta signed this Deed of Waiver: the Deed was also signed by
Horacio and Homero Adaza as witnesses. However, few months later,
Violeta with her husband filed a complaint for annulment of the Deed
of Waiver claiming that Violeta is the sole owner as evidenced by the
OCT and that she signed it because of Horacio’s fraud,
misrepresentation and undue influence. Moreover, Violeta claim that
Horacio's alleged 1 / 2 share was barred by laches, if not by
prescription because of his long delay and inaction in taking any steps
for reconveyance of the 1/2 share. 12 years had passed since OCT was
issued in Violata’s name and more than 19 years since the Deed of
Donation was executed.

On the other hand, Horacio claims that Violeta had executed the Deed
of Waiver freely and voluntarily. He contend that Violeta's ownership
was subject to Horacio's rights as co-owner and to the obligation to
keep or use the property for the benefit of their parents while either
of them was still alive. The Deed includes a crossed-out provision
which stated that the done shall share 1⁄2 of the entire property to
one of her brother or sister after the donor’s death. Horacio himself
crossed it out with his father’s consent in order to have the land titled
to Violeta alone, although they are co- owners. Allegedly, their father’s
real intent was to donate it to both of them.

RTC ruled that the Deed of Waiver is valid and binding to Violeta. So
1⁄2 of the land should go to Horacio.

CA agreed that the Waiver was signed voluntarily, if reluctantly but

the lot belongs solely to Violeta because it has been unconditionally
donated to Violeta, while the waiver has no cause or consideration. CA
thinks that if there was indeed an informal agreement during the
donor’s lifetime to donate the land to both Violeta and Horacio, it has
been rendered useless by the donation solely in favour to Violeta
which superseded.

Issues:
(1) WONthedonatedparceloflandisownedincommonby

Violeta and Horacio?

(2) WON the defense of laches could bar Horacio’s claim for
reconveyance?

Held:

(1) Yes!TheirfatherVictorexecutionoftheDeedofDonation of 10 June

1953 by respondent Violeta's father created an implied trust in favor
of Horacio in respect of half of the property donated. According to Art.
1449. There is also an implied trust when a donation is made to a
person but it appears that although the legal estate is transmitted to
the donee, he nevertheless is either to have no beneficial interest or
only a part thereof.

The critical question is the real intent of the donor which must be
respected and implemented in whatever medium available in our civil
law. Their parents for some reason made it a practice to put the land
in the name of only one child but intended to be shared with another
.The intent was evidenced by (1) the Deed of Waiver which was found
by the RTC and CA to have been signed voluntarily and ion the
presence of her other brothers and sister ; (2) on the same occasion
when the Waiver was signed another brother Victor Adaza, Jr. had also
executed a similar Deed of Waiver covering 1⁄2 share of another piece
of property at, Dapitan City, titled solely in Victor, Jr.'s name, in favor
of his sister Teresita and (3) the property was administered by Homero
but the proceeds of the land were used for the expenses of their
bedridden mother and Violeta when she was studying. Horacio also
waived his share of the income in favour of Violeta and husband since
at that time they were having a financial difficulty since their child
suffers from brain ailment and to finance the expenses of his
bedridden mother.

These circumstances show that the land was held by Violeta in trust
for Horacio.

(2) No!thecontinuedrecognitionoftheexistenceofthetrust precludes

the defense of laches. The 2 letters sent by Violeta to Horacio show
that Violeta as late as 1971 had recognized the trust imposed on her
by law. Also, the doctrine of laches is not to be applied mechanically as
between near relatives; the fact that the parties in the instant case are
brother and sister tends to explain and excuse what would otherwise
appears as long delay. Horacio relied upon his blood relationship with
his sister and the trust and confidence normally connoted in our
culture by that relationship.

((Sing Juco & Sing Bengco v. Sunyatong & Llorente (1922)

Sing Juco v. Sunyatong

Facts:

Juco and Bengco (petitioners) obtained an option contract to from Maria Gay
offering a certain Estate. The option will expire at 12nn on a certain date.

Sunyatong was an employee of the petitioners. On an early morning on the day of

expiry, Sunyatong went to Maria and offered to buy the land according to the terms
offered to the petitioners. Respecting its option contract with petitioners, Maria
contacted petitioners asking for a categorical answer to the offer, but the petitioners
remarked that if she did care to wait until 12nn then "bahala siya" or ambut sa iya.

Interpreting the remark that they have waived their option to buy, the land was sold
to Sunyatong hence the suit by petitioners.

Issue:
W/N there was an implied trust between Sunyatong and petitioners over the
property - Yes

Held:
Yes. Sunyatong obtained the property through disloyalty as evidenced by the
following:
 1. In one of petitioners' meetings regarding the purchase of the land, Sunyatong
advised to let some days lapse before accepting the offer so that Maria won't
think that they were coveting the property.
2. Sunyatong told Alipio, the person sent by petitioners to inspect the land and
who found it favorable, not report that it was valuable and a good buy
because if it proved a failure, he might be blamed
3. He offered to buy the land knowing that the option has not yet expired

His disloyalty to his principals ultimately resulted to an end in the negotiations over
the land. Without such intervention, it may be reasonably presumed that the sale
would have been consummated.

Applying the provisions on code of commerce and principles of equitable trusts, by

virtue of which the property acquired by an employee is deemed to have been
acquired not for his own benefit but for his principal and held in trust for the latter.

Sing Juco and Sing Bengco vs Sunyantong and Llorante

Facts
Sing Juco and Sing Bengco (Sings) obtained from Maria
Gay a written option to purchase the ‘San Antonio Estate (Estate).’
The option expired but the Sings had it verbally extended. Around
this time, Sunyantong was the Sings’ employee and the latter
reposed confidence in him and didn’t mind disclosing their plans to
him concerning the Estate and negotiations with Maria.
Sunyantong advised the Sings to let some days pass before
accepting Maria’s terms of purchase to give the image the Sings
aren’t coveting the Estate. Later, the Sings ordered Alipio Santos
to examine the Estate and Sunyantong accompanied Alipio. The
Estate impressed Alipio but Sunyantong told Alipio not to report
his finding to the Sings. Allegedly because if the Estate failed the
Sings would blame Alipio.
On the option’s last day, Sunyantong called Maria and offered to
buy the Estate on the same terms offered to the Sings. Maria called
Manuel Sotelo, the Sings broker, to know the Sings decision on the
matter. The Sings however just replied ‘siya ang bahala’ which
Maria took to mean the Sings have waived their option to buy.
Maria then sold the Estate to Sunyantong’s wife, Llorante.
Issue
Did Sunyantong violate the trust the Sings reposed in him
by buying the Estate?
Held Yes.
Here, the evidence clearly shows Sunyantong is guilty of infidelity
considering Sunyantong is a trusted employee and the Sings
revealed sensitive information to him concerning the Estate.
Sunyantong’s disloyalty was the reason Maria didn’t accept the
terms the Sings proposed knowing Sunyantong was willing to buy
on her terms. If Sunyantong hadn’t intervened and events took
their ordinary course, the Estate would have been sold to the Sings
and on terms favorable to them.
Consequently, Sunyantong’s infidelity which redounded to his own
benefit and to the Sings’ detriment can’t pass without legal
sanction. Sunyantong must sell the Estate to the Sings on the same
terms when he purchased the same from Maria.
Figuracion v. Figuracion-Gerilla

Facts:

Eulalio owned a certain parcel of land. He had 2 daughters, 1 with Marcela named
Agripina, and the other with Faustina named Carolina.

Later, Agripina executed a Deed of Quitclaim over the eastern portion of said land in
favor of Carolina's daughter, Emilia.

Later, Carolina executed an Affidavit of Self-Adjudication adjudicating unto herself

the entire land as the sole heir of Eulalio and Faustina. She later sold the said land to
her daughters Hilaria and Felipa.

Eventually, relying on the DQ, Emila built a house on the eastern half of the said
land. However, when Hilaria and Felipa found out, they threatened to demolish her
house claiming they were the owners. Hence this case filed by Emilia for the
annulment of the Affidavit of Self Adjudication and Deed of Sale executed by
Carolina, and/or the partition of the lot

Issue:
W/N Emilia has a right to the land and can compel partition - Yes
Held:
Yes.

OWNERSHIP. First, Emilia is the owner of the eastern portion of Lot 707 by virtue of
the quitclaim. It can’t be rendered ineffective by the TCT in the name of Felipa and
Hilaria. Mere issuance of certificate of title in the name of any person does not
foreclose the possibility that the real property may be under co-ownership with
person not named in the certificate or that the registrant may only be a trustee or
that other parties may have acquired interest over the property subsequent to the
issuance of the certificate of title. Co-ownership was successfully established by
Emilia.

The Affidavit of Self Adjudication did not prejudice the share of Agripina because it
not legally possible for one to adjudicate unto himself an entire property he was not
the sole owner of. Each of them only had the right to alienate the lot but only in so
far as the extent of her portion was affected. Being the successor in interest of
Agripina’s share in Lot 707, Emilia took the former’s place in the co-ownership and
as such, has the right to compel partition anytime.

PRESCRIPTION. Second, Co-heirs and co-owners can’t acquire by acquisitive

prescription the share of the other co-heirs or co-owners absent a clear repudiation
of the co-ownership. The act of repudiation, as a mode of terminating co-ownership
is subject to certain conditions: 1.) co-owner repudiates the co-ownership; 2.) such
an act of repudiation is clearly made known to the other co-owners; 3.) the
evidence thereon is clear and conclusive; and 4.) he has been in possession
through open, continuous, exclusive and notorious possession of the property
required by law. In this case this was not proven.

IMPLIED TRUST. Third, Implied trust by force of law was created when Hilaria and
Felipa registered the lot in their names to the exclusion of Emilia and the two of
them were considered a trustee of Emilia’s undivided share. As trustees they can’t
be permitted to repudiate the trust by merely relying on the registration.
Prescription can only produce all of its effects when acts of ownership, or in this
case, possession, do not evince any doubts as to ouster of the rights of the other co-
owners. The express disavowal of co-ownership did not happen during the
issuance of the TCT but happened in 1994 when the sisters attempted to
demolish Emilia’s house. On the same year, Emilia instituted the action for
partition thus the period required by law for acquisitive period to set in was
not met.

OWNERSHIP OF LOT 707. Under the Old Civil Code (when Eulalio and Marcela
married), the lot was their conjugal property. When Marcela died, ½ of the lot was
reserved to Eulalio and the other half to Agripina and Eulalio. Eulalio was entitled
only to the usufruct while the naked ownership belonged to Agripina. When he
remarried, his half portion of the lot and his usufructuary right over the other half
were brought into his second marriage with Faustina.
When Eulalio died ¼ of the lot was reserved for Faustina. The remaining ¼ were
transmitted equally to Faustina, Carolina and Agripina. The usufructuary of Eulaiio
was then merged with Agripina’s naked ownership. Upon death of Faustina, her
conjugal share and usufructuary rights were merged with Carolina’s naked
ownership. Hence Agripina is entitled to 5/8 portion of the lot while the remaining
3/8 pertains to Carolina. Thus when Carolina sold Lot 707 to Hilaria and Felipa, the
sale only affected only that portion. Since the quitclaim only bequeathed only half of
the eastern portion of the lot in favour of Emilia, the remaining 1/8 of the lot shall
be inherited by Carolina, her closest collateral relative.

FIGURACION VS FIGURACION-GERILLA
GR NO. 151334 FEBRUARY 13, 2013
Petitioners: Carolina VDA. Figuracion, heirs of Elena - Leoncio, heirs of
Hilaria – Felipa, Mary, Emilia and heirs of quintin – Linda, Leandro,
Allan Respondent: Emilia Figuracion-Gerilla
Memory Aid:
Lot 707 was inherited by Carolina and Agripina; the latter executed an
Affidavit of Quitclaim in favour of Emilia over eastern half of the land.
Carolina in turn, sold the whole lot to Hilaria and Felipa who had it
transferred to their names. The court held that an implied trust is
created by fore of aw and Hilaria and Felipa were considered a trustee
of Emilia’s undivided share.
Facts

30. The main focus of the case is Lot 707 because the partition of
Lot 2299 and Lot 705 was deemed premature because pending
estate settlement proceeding. Lot 707, originally owned by
EULALIO whom begot AGRIPINA with his first wife Marcela and
CAROLINA with his second wife Faustina. In 1961, Agripina
executed a Deed of Quitclaim over the eastern half of Lot 707 in
favor of Emilia (One of Leandro and Carolina’s daughter).

31. In 1962, Carolina executed an Affidavit of Self Adjudication

 which names her as the sole and exclusive heir of her parents
and the owner of Lot 707. She then executed a Deed of Absolute
Sale in favour of Hilaria and Felipa (also L and C’s daughters) who
in turn had the property registered in their names.

32. In 1971, Emilia and her family went to the US and returned only
in 1981. Relying on the Deed of Quitclaim, she built a house on
the eastern half of Lot 707. The problem started when Hilaria
threatened to demolish the house of Emilia who petitioned the
partition of the three subject lots.

33. RTC decision: dismissed the petition of Emilia for partition,

reconveyance, quieting of title and damages. Further, the
affidavit of self adjudication, deed of sale and TCT involving Lot
707 were declared void. On appeal to the CA, it ruled that the
RTC erred in refusing to partition Lot 707, as when Carolina sold
the entire lot, in effect she only sold her share.

Issue: WON Emilia has the right to the land and can compel partition?
Yes
Held:
Issue of invalidity raised first time on appeal and the validity of the
quitclaim is a question of fact.

OWNERSHIP. Emilia is the owner of the eastern portion of Lot 707 by

virtue of the quitclaim. It can’t be rendered ineffective by the TCT in
the name of Felipa and Hilaria. Mere issuance of certificate of title in
the name of any person does not foreclose the possibility that the real
property may be under co-ownership with person not named in the
certificate or that the registrant may only be a trustee or that other
parties may have acquired interest over the property subsequent to
the issuance of the certificate of title. Co-ownership was successfully
established by Emilia. The Affidavit of Self Adjudication did not
prejudice the share of Agripina because it not legally possible for one
to adjudicate unto himself an entire property he was not the sole
owner of. Each of them only had the right to alienate the lot but only
in so far as the extent of her portion was affected. Being the successor
in interest of Agripina’s share in Lot 707, Emilia took the former’s
place in the co-ownership and as such, has the right to compel
partition anytime.

PRESCRIPTION. Co-heirs and co-owners can’t acquire by acquisitive

prescription the share of the other co-heirs or co-owners absent a
clear repudiation of the co-ownership. The act of repudiation, as a
mode of terminating co-ownership is subject to certain conditions: 1.)
co-owner repudiates the co-ownership; 2.) such an act of repudiation
is clearly made known to the other co-owners; 3.) the evidence
thereon is clear and conclusive; and 4.) he has been in possession
through open, continuous, exclusive and notorious possession of the
property required by law. In this case this was not proven.

IMPLIED TRUST. Implied trust by force of law was created when

Hilaria and Felipa registered the lot in their names to the exclusion of
Emilia and the two of them were considered a trustee of Emilia’s
undivided share. As trustees they can’t be permitted to repudiate the
trust by merely relying on the registration. Prescription can only
produce all of its effects when acts of ownership, or in this case,
possession, do not evince any doubts as to ouster of the rights of the
other co-owners. The express disavowal of co-ownership did not
happen during the issuance of the TCT but happened in 1994 when
the sisters attempted to demolish Emilia’s house. On the same year,
Emilia instituted the action for partition thus the period required by
law for acquisitive period to set in was not met.

OWNERSHIP OF LOT 707. Under the Old Civil Code (when Eulalio
and Marcela married), the lot was their conjugal property. When
Marcela died, 1⁄2 of the lot was reserved to Eulalio and the other half
to Agripina and Eulalio. Eulalio was entitled only to the usufruct while
the naked ownership belonged to Agripina. When he remarried, his
half portion of the lot and his usufructuary right over the other half
were brought into his second marriage with Faustina.
When Eulalio died 1⁄4 of the lot was reserved for Faustina. The
remaining 1⁄4 were transmitted equally to Faustina, Carolina and
Agripina. The usufructuary of Eulaiio was then merged with Agripina’s
naked ownership. Upon death of Faustina, her conjugal share and
usufructuary rights were merged with Carolina’s naked ownership.
Hence Agripina is entitled to 5/8 portion of the lot while the remaining
3/8 pertains to Carolina. Thus when Carolina sold Lot 707 to Hilaria
and Felipa, the sale only affected only that portion. Since the quitclaim
only bequeathed only half of the eastern portion of the lot in favour of
Emilia, the remaining 1/8 of the lot shall be inherited by Carolina, her
closest collateral relative.

Rogelio Pasino, et.al vs. Dr. Teofilo Eduardo F. Monterroyo,

et.al. (2008) (unregistered homestead patent) Doctrine:
 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 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 property wrongfully or erroneously registered in
another’s name to its rightful owner or to one with a better right.
Facts: The case involves an action for reconveyance filed by the
petitioners against the defendants involving Lot 2139 of Iligan
Cadastre, part of a 24-hectare land cleared by Laureano Pasino,
petitioners’ predecessor-in-interest. Laureano applied for a
homestead patent over the subject land I n 1933, but did not
receive the order, and consequently, the land was not
registered in Laureano’s name. Laureano died in 1950.
Thereafter a survey was conducted, and it was found that a small
creek divided the lot into two portions, identified as Lot 2138 and
Lot 2139. Petitioners had acquired OCTs in their names for the
two parcels of land, until allegedly on January 1993, their
possession was interrupted by defendants. For their part,
 respondents allege that they have been in open and continuous
possession of Lot 2139. They allege that they acquired the land
by their predecessor-in-interest: Rufo Larumbe sold Lot 2139 to
Petra Teves, who subsequently transferred to Vicente Teves, and
then to Arturo Teves, and finally to Dr. Monterroyo, respondent’s
father, by virtue of an oral contract. The trial court ruled for the
respondents, finding evidence that the order for Laureano’s
homestead patent became functus officio when it was not
registered with the Director of Deeds. The court also found that
while Laureano originally claimed the entire 24-hectares, he
ceded possession over Lot 2139 to Rufo Larumbe. Gavino, one
of Laureano’s tenants, thereafter started delivering to Larumbe
his corresponding share in the harvests. When Lot 2139 was sold,
Gavino’s successors also delivered the share of harvests to the
corresponding transferors of the land – Petra, Vicente, Arturo and
finally to the Monterroyos. The other tenants also never gave
share of harvests to petitioners. Also, the court found that
petitioners misrepresented in their application for free patent.
Petitioners appealed, but the CA affirmed. Issue: 

1. W/N The Court of appeals erred in affirming the trial court’s

decision.
Held/Ratio: 1. NO.
While the homestead patent was issued in Laureano’s favor, it was not
registered and became functus officio.

this case, the trial court found that the preponderance of evidence
favors respondents as the possessors of Lot No. 2139 for over 30 years,
by themselves and through their predecessors-in-interest. Respondents
were able to present the original Deed of Absolute Sale, dated 10 July
1949, executed by Larumbe in favor of Petra. Respondents also
presented the succeeding Deeds of Sale showing the transfer of Lot No.
2139 from Petra to Vicente and from Vicente to Arturo and the Deed of
Confirmation of Absolute Sale of Unregistered Real Property executed
by Arturo in favor of respondents. Considering that petitioners’
application for free patent titles was filed only on 8 January 1994, when
Lot No. 2139 had already become private land ipso jure, the Land
In
Management Bureau had no jurisdiction to entertain petitioners’
application.
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.

Gayondato v Treasurer of the Philippine Islands (1926)

(assurance fund, minor, technical trust)
Doctrines:

If a person obtains legal title to property by fraud or concealment,

courts of equity will impress upon the title, a condition which is
generally in a broad sense termed “constructive trust” in favor of the
defrauded party, but the use of the word “trust” in this sense is not
technically accurate and is not in the kind of trust referred to in section
106 of the Land Registration Act and which must be taken in its
technical and more restricted sense.
Facts:
Domingo Gayondato owned three parcels of land, which he inherited
from his mother, Ramona Granada in 1896. In 1899, Domingo
married Adela Gasataya and had a child, herein petitioner Rosario
Gayondato. Upon Domingo’s death in 1902, Gabino Gasataya
(Adela’s father) took charge of the lands in question, and eventually
turned them over in 1908 when Adela married Domingo Cuachon.
Said lands were included in a cadastral case. In a hearing, Domingo
Cuachon appeared on behalf of his wife and stepdaughter and filed
claims for the lots by way of answers in which he stated that the lots
were the property of “his wife Adela Gasayata and of her daughter,
fifteen years old of age”. Notwithstanding said statement, the CFI
erroneously decreed the registration of the lots in the name of
Adela alone. Subsequently, Adela, with consent of her husband,
mortgaged the property to National Bank, which Francisco
Rodriguez eventually purchased (assumed liability of mortgage and
other debts).
Plaintiff brought an action to recover damages for the erroneous
registration against Adela Gasataya, Domingo Cuachon, Francisco
Rodriguez and the Insular Treasurer as defendants. TC ruled in favor of
the plaintiff ordering Gasataya and Cauchon for indemnity. However,
the Insular Treasurer and Francisco Rodriguez were absolved from the
complaint. Plaintiff appeals.
Issues:
36. W/N the court erred in absolving the Insular Treasurer.

37. W/N the plaintiff can recover damages by virtue of a trust.

(Agency related)
Held/Ratio:
1. YES.
Sections 102-103 of the Land Registration Act provides that
the liability of the land registration assurance fund is not confined to
cases where the erroneous registration is due to omission, mistake or
malfeasance on the part of the employees of the registration court, but
extends to all cases in which a person is wrongfully deprived of any
kind or any interest therein, without negligence on his part, through the
bringing of the land under provisions of said Act.
“In all such actions where there are defendants other than the Treasurer and
damages shall have been recovered, no final judgment shall be entered against the
Treasurer until execution against the other defendants shall be returned
unsatisfied in whole or in part, and the officer returning the execution shall certify
that the amount still due upon the execution cannot be collected except by
application to the assurance fund. Thereupon the court having jurisdiction of the
action being satisfied as to the truth of such return, may, upon proper showing,
order the amount of the execution and costs, or so much thereof as remains
unpaid, to be paid by the Treasurer out of the assurance fund.”

As the plaintiff appellant was a minor at the time of the registration of

the land and consequently no negligence can be imputed to her in
failing to appear in court and assert her right, it is clear from the
sections that in the absence of special circumstances to the contrary the
assurance fund is secondarily liable for the damages suffered by her
through the wrongful registration.
2. YES. The Attorney-General raises the point that Domingo Cuachon
and Adela Gastaya prior to the registration of the land must be
considered to have held the property in trust and for the benefit of the
plaintiff; and therefore it falls under section 106 of the Land
Registration Act which provides that “the assurance fund shall not be
liable to pay for any loss or damage or deprivation occasioned by a
breach of trust, whether express, implied, or constructive, by any
registered owner who is a trustee, or by the improper exercise of any
sale in mortgage- foreclosure proceedings”
If a person obtains legal title to property by fraud or concealment, court
of equity will impress upon the title a so- called constructive trust in
favor of the defrauded party. The use of the word “trust” in this sense is
not technically accurate. If this is the kind of constructive trust referred
to in section 106, clearly, the plaintiff cannot recover damages from the
assurance fund. But that is not the case. The term trust in section 106
must be taken in its technical and more restricted sense, which as
defined by Bouvier pertains to “a right of property, real or personal,
held by one party for the benefit of another.”
In this case, plaintiff was a minor at the time of the land registration.
She could not have created a technical trust of any kind. The mother
was only a natural guardian as to her daughter’s person. She had no
right of property or administration in her daughter’s estate and was
nothing but a mere trespasser.
15. ESCOBAR v LOCSIN
G.R. No. L-48309 January 30, 1943

EUSEBIA ESCOBAR, plaintiff-appellant,
RAMON LOCSIN, in his capacity as

special administrator of the intestate estate of Juana Ringor,defendant-appellee.

FACTS

The complaint alleges that the plaintiff is the owner of the subject lot; and
that in the course of the cadastral proceedings, plaintiff being illiterate, asked
Sumangil to claim the same for her (plaintiff) but Sumangil committed a
breach of trust by claiming the lot for himself, so it was adjudicated in favor of
Sumangil. The defendant is the special administrator of the estate of Juana
Ringor, to whom the parcel of land in question was assigned by partition in
the intestate estate of Sumangil and Duque.

The CFI found that the plaintiff is the real owner of the lot which she had
acquired in 1914 by donation propter nuptias from Pablo Ringor; that plaintiff
had since that year been in possession of the land; and that the same had
been decreed in the cadastral proceedings in favor of Domingo Sumangil. The
trial court, while recognizing that the plaintiff had the equitable title and the
defendant the legal title, nevertheless dismissed the complaint because the
period of one year provided for in section 38 of the Land Registration Act for
the review of a decree had elapsed, and the plaintiff had not availed herself of
this remedy.

ISSUE
Does the possession of legal title preclude the operation of a trust agreement?

HELD
No

RATIO

The trial court plainly erred. The complaint did not seek the review of the
decree or the reopening of the cadastral case, but the enforcement of a trust.
Hence, section 38 of Act No. 496 does not apply. The estate of Juana Ringor as
the successor in interest of the trustee, Domingo Sumangil, is in equity bound
to execute a deed of conveyance of this lot to the plaintiff-appellant. The
remedy herein prayed for has been upheld by this Court in previous cases,
one of which is Severino vs. Severino (44 Phil., 343, year 1923).

There is no indication there of an intention to cut off, through the issuance of

a decree of registration, equitable rights or remedies such as those here in
question. On the contrary, section 70 of the Act provides:

Registered lands and ownership therein, shall in all respects be subject to the
same burdens and incidents attached by law to unregistered land. Nothing

contained in this Act shall in any way be construed to relieve registered land or
the owners thereof from any rights incident to the relation of husband and wife,
or from liability to attachment on mesne process or levy on execution, or from
liability to any lien of any description established by law on land and the
buildings thereon, or the interest of the owner in such land or buildings, or to
change the laws of descent, or the rights of partition between coparceners, joint
tenants and other cotenants, or the right to take the same by eminent domain,
or to relieve such land from liability to be appropriated in any lawful manner
for the payment of debts, or to change or affect in any other way any other
rights or liabilities created by law and applicable to unregistered land, except as
otherwise expressly provided in this Act or in the amendments hereof.

A trust such as that which was created between the plaintiff and Domingo
Sumangil is sacred and inviolable. The Courts have therefore shielded
fiduciary relations against every manner of chicanery or detestable design
cloaked by legal technicalities. The Torrens system was never calculated to
foment betrayal in the performance of a trust.

The judgment appealed from is hereby reverse, and the defendant is ordered
to convey that lot in question to the plaintiff within fifteen days from the
entry of final judgment herein; and upon his failure or refusal to do so, this
judgment shall constitute sufficient authorization for the Register of Deeds of
Nueva Ecija, in lieu of a deed of conveyance, to transfer the certificate of title
for said lot No. 692 to the plaintiff Eusebia Escobar. The defendant shall pay
the costs of both instances.

Cavile v. Litania-Hong (2009) (Land Titles, Extrajudicial Partition vs.

OCT, Preponderance of Evidence in Civil Cases) Doctrines:

When the registered owner, be he the patentee or his successor-in-

interest to whom the free patent was transferred, knew that the land
belonged to another who had been in possession thereof, and if the
patentee were never in possession of such land, the true owner may
bring action to have the ownership of or the title to the land judicially
settled. Such aggrieved party may still file an action for reconveyance
based on implied or constructive trust, which prescribes in 10 years
from the date of the issuance of the certificate of title over the property,
provided that an innocent purchaser for value has not yet acquired the
property.
Facts:
In 1937, the heirs of the Spouses Cavile entered into a Deed of
Partition. 3 of which are the legitimate children of the spouses and the
other 3 are children by Bernardo Cavile from a previous marriage. The
subject of the partition were several parcels of land situated in Negros
Oriental which were covered by Tax Declarations all named under
Bernardo.
Also in the Deed of Partition, Castor a legitimate son of the spouses
acquired the lands with Tax Declarations No. 7143, 7421, and 7956.
In 1960, Castor recognized Susana (his sister) to be in possession of the
lands covered by Tax Declarations No. 2039 and 2040 (these lands are
the same as the Tax Declaration Nos. 7421 and 7956 as stated above)
thru a Confirmation of Extrajudicial Partition they executed.
In 1974, the herein Respondents (heirs of Susana) now filed a
Complaint for Reconveyance of the lands. They allege that the
Petitioner Spouses (heirs of Castor) unlawfully entered the land that
was acquired by them due to the Confirmation of Extrajudicial Partition
that was executed in 1960 by Castor and Susana.
The Petitioner Spouses presented an OCT in their name that was issued
on 1962 for their answer. They also claim that the Extrajudicial
Partition that Castor and Susana executed was a nullity because Susana
only used the said lands that was conveyed to her by Castor as security
for a loan she wanted to acquire from the Rural Bank of Dumaguete.
They added that the only reason why Susana paid taxes for the land is
in order convince the bank to extend her loan.
The RTC ruled in favor of the petitioner spouses.
The CA reversed. Issues:
1. W/N reconveyance is due for the respondents? Held/Ratio:

1. NO. In civil cases, decisions are based on the preponderance of

evidences. This being the case, the respondents only has a
Confirmation of Extrajudicial Partition executed by Castor and
Susana in 1960 and Tax Declarations as evidence. As compared to the
evidence presented by the Petitioner Spouses which held an OCT
issued in 1962 in their name and Deed of Partition that was executed
in 1937 which made Castor the owner of the said lots which he bought
from his co-heirs. Castor also did not waste time in enjoying and
possessing the property shortly after it was conveyed to him.
Verily, the respondents may file for reconveyance based on implied
and constructive trust, which prescribes in 10 years after the
issuance of the Certificate of Title, provided that there are no
innocent buyers for value. They also should be in possession of the said
lands once the owner claims the land for an action for reconveyance to
prosper.
In the instant case, reconveyance was filed only in 2004 while the
issuance was in 1962.
And even if the respondents filed the
reconveyance case on time, it would still fail because the respondents
did not prove that they were in possession of the subject lots prior to
the issuance of the title.

Estrella Tiongco Yared v. Jose Tiongco October 19, 2011

Summary / Memory Aid:

Although 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, there
is one an exception to this rule: when the plaintiff is in possession of the land to be
reconveyed.

In this case, petitioner never lost possession of the said properties, and as such, she is in a
position to file the complaint with the court a quo to protect her rights and clear whatever
doubts has been cast on her title by the issuance of TCTs in respondent Jose’s name.

Facts:

The case involves three parcels of land located in Iloilo City, covered by titles in the
names of four siblings (Matilde, Jose, Vicente, and Felipe). The siblings are the heirs of
Maria Luis de Tiongco; they inherited the land from the latter, their deceased mother.
When all of the siblings died, they were survived by their children and descendants.
Among the legitimate children of one of the deceased siblings were petitioner and the
father of respondent Jose B. Tiongco.

Sometime in 1965, petitioner built her house and stayed on one of the lots, sustaining
herself by collecting rentals. In 1983, respondent Jose prohibited petitioner from
collecting rentals from tenants and filed a suit for recovery of possession with
preliminary injunction. Respondent’s legal attempts were all unsuccessful and petitoner
conitnued to remain in possession of the subject land.

However, in 1988, petitioner discovered that respondent Jose had executed an Affidavit
of Adjudication declaring that he is the only surviving heir of the registered owners and
adjudicating unto himself the subject land. Because of this affidavit, the OCTs of the
subject lots were cancelled, and in place thereof, the Register of Deeds of Iloilo City
issued TCTs in favor of respondent Jose. Based on the records with the Register of
Deeds, it also appears that respondent Jose sold the said lots to a buyer (Torre) who in
turn sold it to another person (Doronila).

When petitioner discovered this, she filed a complaint before the court a quo against her
nephew respondent Jose arguing 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 also posited that
respondent Jose became a trustee by constructive trust of the property for the benefit of
the petitioner.

The lower courts ruled 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. According to the lower courts,
an action for reconveyance based on an implied or constructive trust prescribes in ten
(10) years from the date of issuance of the original certificate of title or transfer
certificate of title.

Issue: WON prescription has set in, barring the petitioner to assert that
respondent has become a trustee by way of constructive trust because of
the latter’s fraudulent acts

Held / Ratio: NO, the action has not prescribed.

Although 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, there
is an exception to this rule: when the plaintiff is in possession of the land to be
reconveyed.

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.

In this case, petitioner never lost possession of the said properties, and as such, she is in a
position to file the complaint with the court a quo to protect her rights and clear whatever
doubts has been cast on her title by the issuance of TCTs in respondent Jose’s name.

G.R. No. 169901 August 3, 2011

PHILIPPINE NATIONAL BANK, Petitioner,

vs.
CIRIACO JUMAMOY and HEIRS OF ANTONIO GO PACE, represented by ROSALIA
PACE, Respondents.

Facts:
 RTC of Davao rendered a decision ordering that a part be excluded from the
land registered to Pace under an Original Certificate of Title. The RTC found out that
such part actually pertains to Ciriaco and his predecessor in interest, Jumamoy.
Pace’s application for an OCT erroneously included such lot. The RTC then ordered
Pace to reconvey the land to Ciriaco.
Such decision became final and executor but the deed for reconveyance
cannot be annotated on the title since the title was found out to be cancelled already.
The reason for this is that PNB foreclosed the land after Pace mortgaged the lot in
return for a series of loans which they later on failed to pay. Title was eventually
transferred to PNB. Ciriaco filed a complaint against PNB
Ciriaco claims that Pace cannot validly mortgage the lot as it belongs to him
pursuant to the RTC decision. He also claims that PNB is not a mortgagee/purchaser
for value as the land as it already had notice of the litigation over the said lot. RTC
ruled in favor of Ciriaco. CA affirmed.
In the Supreme Court, PNB claims that Ciriaco’s complaint is barred by
prescription. PNB claims that an action for reconveyance prescribes in four years if based on
fraud, or, 10 years if based on an implied trust, both to be counted from the issuance of the
Original Cerificate of title to Pace.
Issue: W/N Ciriaco’s complaint is barred by Prescription
Held: No
- A property acquired through mistake or fraud creates implied Trust
- The person acquiring becomes a Trustee
- The person from whom the property comes is the beneficiary
- An action for reconveyance based on implied trust, therefore prescribes in 10 years as it
is an obligation created by law to be counted from the date of issuance of the Torrens title over the
property.
- This rule, however, applies only when the person enforcing the trust is not in possession
of the property.
- there is no prescription when in an action for reconveyance, the claimant is in actual
possession of the property because this in effect is an action for quieting of title
- The reason for this is that one who is in actual possession of a piece of land claiming to
be the owner thereof may wait until his possession is disturbed or his title is attacked
before taking steps to vindicate his right,
- Ciriaco’s complaint is an action for quieting of title and hence cannot prescribe.