In 1991, petitioner, claiming to be the rightful owner of the subject property,

sent out notices to vacate, addressed to persons occupying the property. Unheeded,
petitioner then filed a complaint for ejectment against the occupants before the
[G.R. No. 144773. May 16, 2005 Metropolitan Trial Court (MTC), Lapu-Lapu City.
On February 1, 1994, the MTC ordered the occupants to vacate the property.
The case eventually reached this Court, docketed as G.R. No. 128102, entitled Aznar
]AZNAR BROTHERS REALTY COMPANY, petitioner, vs. LAURENCIO AYING, IN HIS Brothers Realty Company vs. Court of Appeals, Luis Aying, Demetrio Sida, Felomino
OWN BEHALF AND IN BEHALF OF THE OTHER HEIRS OF EMILIANO AYING, PAULINO Augusto, Federico Abing, and Romeo Augusto.[2] On March 7, 2000, a Decision was
AYING, IN HIS OWN BEHALF AND IN BEHALF OF THE OTHER HEIRS OF SIMEON promulgated in favor of herein petitioner, declaring it as the rightful possessor of the
AYING, AND WENCESLAO SUMALINOG, IN HIS OWN BEHALF AND IN BEHALF OF THE parcel of land in question.
OTHER HEIRS OF ROBERTA AYING, respondents. Meanwhile, herein respondents, along with other persons claiming to be
descendants of the eight Aying siblings, all in all numbering around 220 persons, had
filed a complaint for cancellation of the Extra-Judicial Partition with Absolute Sale,
recovery of ownership, injunction and damages with the RTC of Lapu-Lapu City. The
DECISION complaint was dismissed twice without prejudice. Said complaint was re-filed on
AUSTRIA-MARTINEZ, J.: August 19, 1993, docketed as Civil Case No. 2930-L.
In their amended complaint, herein respondents (plaintiffs before the RTC)
This resolves the petition for review on certiorari seeking the modification of the alleged that: they are co-owners of subject property, being descendants of the
Decision[1] of the Court of Appeals (CA) dated March 7, 2000 which affirmed with registered owners thereof under OCT No. RO-2856; they had been in actual, peaceful,
modification the Decision of the Regional Trial Court (RTC) of Lapu-Lapu City, Branch physical, open, adverse, continuous and uninterrupted possession in concept of
27 in Civil Case No. 2930-L; and the Resolution dated August 2, 2000 denying owner of subject parcel of land since time immemorial; their possession was
petitioners motion for reconsideration of the aforementioned decision. disturbed only in the last quarter of 1991 when some of them received notices to
vacate from petitioner and several weeks thereafter, earthmoving equipment entered
The antecedent facts are as follows:
the disputed land, bulldozing the same and destroying plants, trees and concrete
The disputed property is Lot No. 4399 with an area of 34,325 square meters monuments (mohon); respondents discovered that such activities were being
located at Dapdap, Lapu-Lapu City. Crisanta Maloloy-on petitioned for the issuance of undertaken by petitioner together with Sta. Lucia Realty and Development, Inc.;
a cadastral decree in her favor over said parcel of land. After her death in 1930, the petitioner claimed to be the owner of subject property by virtue of an extra-judicial
Cadastral Court issued a Decision directing the issuance of a decree in the name of partition of real estate with deed of absolute sale executed in petitioners favor by the
Crisanta Maloloy-ons eight children, namely: Juan, Celedonio, Emiliano, Francisco, alleged heirs of Crisanta Maloloy-on; the aforementioned extra-judicial partition of
Simeon, Bernabe, Roberta and Fausta, all surnamed Aying. The certificate of title was, real estate with deed of absolute sale is a fraud and is null and void ab initio because
however, lost during the war. not all the co-owners of subject property affixed their signature on said document and
some of the co-owners who supposedly signed said document had been dead at the
Subsequently, all the heirs of the Aying siblings executed an Extra-Judicial time of the execution thereof; petitioner entered subject land in bad faith, knowing
Partition of Real Estate with Deed of Absolute Sale dated March 3, 1964, conveying fully well that it did not have any right to the land and used force, threat and
the subject parcel of land to herein petitioner Aznar Brothers Realty Company. Said intimidation against respondents; and they suffered moral damages. [3]
deed was registered with the Register of Deeds of Lapu-Lapu City on March 6, 1964
under Act No. 3344 (the law governing registration for unregistered land), and since Petitioner (defendant before the RTC) filed its Answer, denying that respondents
then, petitioner had been religiously paying real property taxes on said property. are the lawful owners of subject parcel of land by virtue of their being descendants or
heirs of the registered owners of subject property. Instead, petitioner alleged that it
In 1988, herein petitioner filed a Petition for Reconstitution of the Original Title had been in actual possession of subject land as owner thereof by virtue of the extra-
as the original title over the subject property had been lost during the war. On April judicial partition of real property and deed of absolute sale executed in its favor; that
12, 1988, the court granted said petition, thereby directing the Register of Deeds of in fact, it had been paying taxes thereon religiously; that it tolerated about 6 persons
Lapu-Lapu City to issue a reconstituted title in the name of the abovementioned Aying to live on said land but said persons were eventually ejected by court order. Petitioner
siblings. Thus, Original Certificate of Title (OCT) No. RO-2856 was issued. then raised the affirmative defenses of failure to state cause of action and
prescription, as it took respondents 27 years, 10 months and 27 days to file the action
to recover subject property, when an action to recover property based on an implied and to issue a transfer certificate of title in the name of Aznar Brothers Realty
trust should be instituted within 4 years from discovery of the fraud. [4] Company upon payment of the necessary registration fees pursuant thereto.
In the Pre-Trial Order dated January 30, 1995 of the RTC, the issues were
The Writ of Preliminary Injunction issued in this case is hereby ordered dissolved.
narrowed down to the following:

The Motion for Contempt filed by the plaintiffs against defendants is dismissed for
1. Whether or not the plaintiffs [herein respondents] are the heirs of the registered
want of factual and legal basis.
owners of Lot No. 4399.

Costs against the plaintiffs.

2. Whether or not plaintiffs are the owners of Lot No. 4399.

SO ORDERED.[6]
3. Whether or not the defendant Aznar [herein petitioner] is estopped to make any
claim on Lot No. 4399.
Herein respondents appealed the foregoing decision to the CA and on March 7,
2000, said court promulgated its Decision, the dispositive portion of which is
4. Whether or not the defendant Aznar is a builder in bad faith.
reproduced hereunder:
5. Whether or not the defendants are liable for damages and attorneys fees in favor
THE FOREGOING CONSIDERED, the contested Decision while AFFIRMED is hereby
of the plaintiffs.
MODIFIED. The heirs of Emiliano Aying, Simeon Aying and Roberta Aying are hereby
declared as the lawful owners of the contested property but equivalent only to 3/8.
6. Whether or not the Extra-Judicial Partition of Real Estate with Deed of Absolute
Sale is valid and had, in effect, validly conveyed to defendant Aznar Lot No. 4399.
SO ORDERED.
7. Whether or not the plaintiffs action has prescribed.[5]
In modifying the RTC judgment, the CA ratiocinated that an action for recovery
of possession of registered land never prescribes in view of the provision of Section
After trial, the RTC rendered a Decision dated July 4, 1997, ruling that
44, Act No. 496 (now Sec. 47, PD 1520), to the effect that no title to registered land in
respondents evidence failed to prove that the extra-judicial partition with deed of
derogation to that of a registered owner shall be acquired by prescription. The CA
absolute sale was a totally simulated or fictitious contract and concluded that said further ruled that even if the action is deemed to be based on implied trust,
document is valid, thus, effectively conveying to petitioner the property in question. It
prescription did not begin to run since there is no evidence that positive acts of
further held that respondents action had prescribed in that the action is considered as
repudiation were made known to the heirs who did not participate in the execution of
one for reconveyance based on implied or constructive trust, it prescribed in 10 years
the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale. Thus, striking
from the registration of the deed on March 6, 1964; and if the action is considered as down the RTCs ruling that the respondents complaint is dismissible on the ground of
one for annulment of contract on the ground of fraud, it should have been filed within
prescription, the CA held instead that herein respondents action had not prescribed
4 years from discovery of the fraud. The trial court also ruled that respondents failed
but upheld the validity of the Extra-Judicial Partition of Real Estate with Deed of
to present any admissible proof of filiation, hence, they were not able to prove that Absolute Sale, except as to the shares of the heirs of Emiliano, Simeon and Roberta,
they are indeed heirs of the eight Aying siblings who appear as the registered owners
who did not participate in the execution of said document.
under OCT No. RO-2856.
Herein petitioners motion for reconsideration of the CA decision was denied per
The dispositive portion of the RTC Decision reads as follows:
Resolution dated August 2, 2000.

WHEREFORE, judgment is hereby rendered dismissing the amended complaint on the Hence, the present petition for review on certiorari assailing the CA decision on
ground of prescription, and declaring the Extra-Judicial Partition of Real Estate with the following grounds:
Deed of Absolute Sale dated March 3, 1964 as valid and binding, adjudging that Lot
I
4399 with an area of 34,325 square meters located at Dapdap, Mactan, Lapu-Lapu
City had been validly conveyed to and in favor of Aznar Brothers Realty Company, and
directing the Register of Deeds of Lapu-Lapu City to register the above-mentioned
deed in accordance with law and to cancel Original Certificate of Title No. RO-2856,
THE COURT OF APPEALS ERRED IN FAILING TO APPLY THE RULE THAT AN HEIR OF THE Respondents alleged in their amended complaint that not all the co-owners of
ORIGINAL REGISTERED OWNER MAY LOSE HIS RIGHT TO RECOVER A TITLED PROPERTY the land in question signed or executed the document conveying ownership thereof
BY REASON OF LACHES; to petitioner and made the conclusion that said document is null and void. We agree
with the ruling of the RTC and the CA that the Extra-Judicial Partition of Real Estate
II with Deed of Absolute Sale is valid and binding only as to the heirs who participated in
the execution thereof, hence, the heirs of Emiliano, Simeon and Roberta Aying, who
THE COURT OF APPEALS ERRED IN FAILING TO APPLY THE RULE THAT THE ACT OF undisputedly did not participate therein, cannot be bound by said document.
REGISTRATION OF THE DEED OF PARTITION WITH SALE MAY BE CONSIDERED AN However, the facts on record show that petitioner acquired the entire parcel of
UNEQUIVOCAL REPUDIATION OF THE TRUST GIVING RISE TO PRESCRIPTION; land with the mistaken belief that all the heirs have executed the subject document.
Thus, the trial court is correct that the provision of law applicable to this case is Article
III 1456 of the Civil Code which states:

THE COURT OF APPEALS ERRED IN FAILING TO APPLY THE PROVISIONS OF ARTICLE ART. 1456. If property is acquired through mistake or fraud, the person obtaining it is,
1104 OF THE CIVIL CODE TO THE EFFECT THAT IN THE ABSENCE OF BAD FAITH OR by force of law, considered a trustee of an implied trust for the benefit of the person
FRAUD, THE PARTITION WITH PRETERITION OF ANY COMPULSORY HEIR SHALL NOT BE from whom the property comes.
RESCINDED.[7]
In Vda. De Esconde vs. Court of Appeals,[8] the Court expounded thus:
In their Comment, respondents argue that this case is an action to declare as null
and void the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale, hence, Construing this provision of the Civil Code, in Philippine National Bank v. Court of
under Article 1410 of the Civil Code, an action for declaration of an inexistent contract Appeals, the Court stated:
does not prescribe. Respondents further posit that the principle of laches should be
applied against petitioner and not against them, as they (respondents) had been in
A deeper analysis of Article 1456 reveals that it is not a trust in the technical sense for
actual possession of the subject property, while petitioner merely brought action to
in a typical trust, confidence is reposed in one person who is named a trustee for the
eject them more than 29 years after the alleged execution of the Extra-Judicial
benefit of another who is called the cestui que trust, respecting property which is held
Partition of Real Estate with Deed of Absolute Sale. They also refuted petitioners
by the trustee for the benefit of the cestui que trust. A constructive trust, unlike an
arguments regarding the application of the principles of implied and constructive
express trust, does not emanate from, or generate a fiduciary relation. While in an
trusts in this case.
express trust, a beneficiary and a trustee are linked by confidential or fiduciary
At the outset, it should be stressed that not all the plaintiffs who filed the relations, in a constructive trust, there is neither a promise nor any fiduciary relation
amended complaint before the trial court had been impleaded as respondents in the to speak of and the so-called trustee neither accepts any trust nor intends holding the
present petition. The only parties impleaded are the heirs of Emiliano, Simeon and property for the beneficiary.[9]
Roberta Aying, whom the CA adjudged as owners of a 3/8 portion of the land in
dispute for not having participated in the execution of the Extra-Judicial Partition of The concept of constructive trusts was further elucidated in the same case, as
Real Estate with Deed of Absolute Sale. follows:
It is significant to note that herein petitioner does not question the CA
. . . implied trusts are those which, without being expressed, are deducible from the
conclusion that respondents are heirs of the aforementioned three Aying siblings.
nature of the transaction as matters of intent or which are superinduced on the
Hence, the trial court and appellate courts findings that the Extra- Judicial Partition of
transaction by operation of law as matters of equity, independently of the particular
Real Estate with Deed of Absolute Sale was not forged nor simulated and that the
intention of the parties. In turn, implied trusts are either resulting or constructive
heirs of Emiliano, Simeon and Roberta Aying did not participate in the execution
trusts. These two are differentiated from each other as follows:
thereof, are now beyond cavil.
The issues raised by petitioner for the Courts resolution are (1) whether or not Resulting trusts are based on the equitable doctrine that valuable consideration and
respondents cause of action is imprescriptible; and (2) if their right to bring action is not legal title determines the equitable title or interest and are presumed always to
indeed imprescriptible, may the principle of laches apply. 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 possession of the property, the right to seek reconveyance, which in effect seeks to
equity in order to satisfy the demands of justice and prevent unjust enrichment. They quiet title to the property, does not prescribe.[14]
arise contrary to intention against one who, by fraud, duress or abuse of confidence,
In the present case, respondents Wenceslao Sumalinog, an heir of Roberta
obtains or holds the legal right to property which he ought not, in equity and good
Aying; Laurencio Aying, an heir of Emiliano Aying; and Paulino Aying, an heir of
conscience, to hold.[10] (Emphasis supplied)
Simeon Aying, all testified that they had never occupied or been in possession of the
land in dispute.[15] Hence, the prescriptive period of ten years would apply to herein
Based on such concept of constructive trusts, the Court ruled in said case that:
respondents.

The rule that a trustee cannot acquire by prescription ownership over property The question then arises as to the date from which the ten-year period should
entrusted to him until and unless he repudiates the trust, applies to express trusts and be reckoned, considering that the Extra-Judicial Partition of Real Estate with Deed of
resulting implied trusts. However, in constructive implied trusts, prescription may Absolute Sale was registered under Act No. 3344 and not under Act No. 496 (Land
supervene even if the trustee does not repudiate the relationship. Necessarily, Registration Act), despite the fact the land in dispute was already titled under Act No.
repudiation of said trust is not a condition precedent to the running of the 496 in the names of the Aying siblings at the time the subject document was
prescriptive period.[11] executed.
In Spouses Abrigo vs. De Vera,[16] it was held that registration of instruments
The next question is, what is the applicable prescriptive period? must be done in the proper registry, in order to affect and bind the land and, thus,
In Amerol vs. Bagumbaran,[12] the Court expounded on the prescriptive period operate as constructive notice to the world.[17] Therein, the Court ruled:
within which to bring an action for reconveyance of property based on implied or
constructive trust, to wit: x x x If the land is registered under the Land Registration Act (and has therefore a
Torrens Title), and it is sold but the subsequent sale is registered not under the Land
. . . under the present Civil Code, we find that just as an implied or constructive trust is Registration Act but under Act 3344, as amended, such sale is not considered
an offspring of the law (Art. 1456, Civil Code), so is the corresponding obligation to REGISTERED x x x .[18]
reconvey the property and the title thereto in favor of the true owner. In this context,
and vis--vis prescription, Article 1144 of the Civil Code is applicable. In this case, since the Extra-Judicial Partition of Real Estate with Deed of
Absolute Sale was registered under Act No. 3344 and not under Act No. 496, said
Article 1144. The following actions must be brought within ten years from the time document is deemed not registered. Accordingly, the ten-year prescriptive period
the right of action accrues: cannot be reckoned from March 6, 1964, the date of registration of the subject
document under Act No. 3344. The prescriptive period only began to run from the
time respondents had actual notice of the Extra-Judicial Partition of Real Estate with
(1) Upon a written contract;
Deed of Absolute Sale.
(2) Upon an obligation created by law;
(3) Upon a judgment. The only evidence on record as to when such prescriptive period commenced as
to each of the respondents are Wenceslao Sumalinogs (heir of Roberta Aying)
xxx xxx xxx testimony that about three years after 1964, they already learned of the existence of
the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale;[19] and Laurencio
An action for reconveyance based on an implied or constructive trust must perforce Ayings (heir of Emiliano Aying) admission that he found out about the sale of the land
prescribe in ten years and not otherwise. A long line of decisions of this Court, and of in dispute a long time ago and can only estimate that it must be after martial
very recent vintage at that, illustrates this rule. Undoubtedly, it is now well-settled law.[20] Paulino Aying (heir of Simeon Aying) gave no testimony whatsoever as to when
that an action for reconveyance based on an implied or constructive trust prescribes the children of Simeon Aying actually learned of the existence of the document of
in ten years from the issuance of the Torrens title over the property. [13] sale. On the other hand, petitioner did not present any other evidence to prove the
date when respondents were notified of the execution of the subject document.
It has also been ruled that the ten-year prescriptive period begins to run from In view of the lack of unambiguous evidence of when the heirs of Emiliano Aying
the date of registration of the deed or the date of the issuance of the certificate of and Simeon Aying discovered the existence of the document of sale, it must be
title over the property, but if the person claiming to be the owner thereof is in actual determined which party had the burden of proof to establish such fact.
 The test for determining where the burden of proof lies is to ask which party to having brought their action within the prescriptive period, are now entitled to the
an action or suit will fail if he offers no evidence competent to show the facts averred reconveyance of their share in the land in dispute.
as the basis for the relief he seeks to obtain.[21] Moreover, one alleging a fact that is
IN VIEW OF THE FOREGOING, the petition is PARTIALLY GRANTED and the
denied has the burden of proving it and unless the party asserting the affirmative of
Decision of the Court of Appeals dated March 7, 2000 is MODIFIED, as follows: The
an issue sustains the burden of proof of that issue by a preponderance of the
amended complaint of the heirs of Roberta Aying is DISMISSED on the ground of
evidence, his cause will not succeed.[22] Thus, the defendant bears the burden of proof
as to all affirmative defenses which he sets up in answer to the plaintiffs claim or prescription. However, the heirs of Emiliano Aying and Simeon Aying, having
instituted the action for reconveyance within the prescriptive period, are hereby
cause of action; he being the party who asserts the truth of the matter he has alleged,
DECLARED as the LAWFUL OWNERS of a 2/8 portion of the parcel of land covered by
the burden is upon him to establish the facts on which that matter is predicated and if
Original Certificate of Title No. RO-2856.
he fails to do so, the plaintiff is entitled to a verdict or decision in his favor. [23]
In the case at bar, it was petitioner, as the defendant before the RTC, which set SO ORDERED.
up in its Answer the affirmative defense of prescription. It was, therefore, incumbent Puno, (Chairman), Callejo, Sr., Tinga, and Chico-Nazario, JJ., concur.
upon petitioner to prove the date from which the prescriptive period began to run.
Evidence as to the date when the ten-year prescriptive period began exists only as to
the heirs of Roberta Aying, as Wenceslao Sumalinog admitted that they learned of the
existence of the document of sale in the year 1967. As to the heirs of Emiliano Aying
and Simeon Aying, there is no clear evidence of the date when they discovered the
document conveying the subject land to petitioner. Petitioner miserably failed to SECOND DIVISION
adduce proof of when the heirs of Emiliano Aying and Simeon Aying were notified of
the subject document. Hence, with regard to said heirs, the Court may consider the RICHARD B. LOPEZ, in his G.R. No. 157784
admission in the amended complaint that they learned of the conveyance of the Capacity as Trustee of the Trust
disputed land only in 1991 when petitioner sent notices to vacate to the occupants of Estate of the late Juliana Lopez-
the subject land, as the date from which the ten-year prescriptive period should be Manzano, Present:
reckoned. Petitioner,

Respondents filed their Amended Complaint on December 6, 1993. [24] Thus, with QUISUMBING, J.,
regard to respondent heirs of Roberta Aying who had knowledge of the conveyance as Chairperson,
far back as 1967, their cause of action is already barred by prescription when said CARPIO MORALES,
amended complaint was filed as they only had until 1977 within which to bring action. - versus - TINGA,
As to the respondent heirs of Emiliano and Simeon Aying, they were able to initiate VELASCO, JR., and
their action for reconveyance of property based on implied or constructive trust well COURT OF APPEALS, BRION, JJ.
within the ten-year prescriptive period reckoned from 1991 when they were sent by CORAZON LOPEZ, FERNANDO
petitioner a notice to vacate the subject property. LOPEZ, ROBERTO LOPEZ, represented
Evidently, laches cannot be applied against respondent heirs of Emiliano and by LUZVIMINDA LOPEZ, MARIA Promulgated:
Simeon Aying, as they took action to protect their interest well within the period ROLINDA MANZANO, MARIA
accorded them by law. ROSARIO MANZANO SANTOS,
JOSE MANZANO, JR., NARCISO
With regard to petitioners argument that the provision of Article 1104 of the MANZANO (all represented by December 16, 2008
Civil Code, stating that a partition made with preterition of any of the compulsory Attorney-in-fact, MODESTO RUBIO),
heirs shall not be rescinded, should be applied, suffice it to say that the Extra-Judicial MARIA CRISTINA MANZANO RUBIO,
Partition of Real Estate with Deed of Absolute Sale is not being rescinded. In fact, its IRENE MONZON and ELENA MANZANO,
validity had been upheld but only as to the parties who participated in the execution Respondents.
of the same. As discussed above, what was conveyed to petitioner was ownership x--------------------------------------------------------------------------------x
over the shares of the heirs who executed the subject document. Thus, the law,
particularly, Article 1456 of the Civil Code, imposed the obligation upon petitioner to DECISION
act as a trustee for the benefit of respondent heirs of Emiliano and Simeon Aying who, TINGA, J.:
 were secured by real estate mortgages. He noted that if these debts were liquidated,
This is a petition for review on certiorari [1]under Rule 45 of the 1997 Rules of Civil the residuary estate available for distribution would, value-wise, be very small.
Procedure, assailing the Decision[2] and Resolution[3] of the Court of Appeals in CA-G.R.
CV No. 34086. The Court of Appeals decision affirmed the summary judgment of the From these premises, Jose proceeded to offer a project of partition. The relevant
Regional Trial Court (RTC), Branch 10, Balayan, Batangas, dismissing petitioners action portion pertaining to the Fideicomiso stated, thus:
for reconveyance on the ground of prescription.
PROJECT OF PARTITION
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 14. Pursuant to the terms of the Will, one-half (1/2) of the following
Lopez Manzano (Juliana) to recover from respondents several large tracts of lands properties, which are not burdened with any obligation, shall be
allegedly belonging to the trust estate of Juliana. constituted into the Fidei-comiso de Juliana Lopez Manzano and
delivered to Jose Lopez Manzano as trustee thereof:
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 Location Title No. Area (Sq. M.) Improvements
them, the properties subject of this dispute. The disputed properties totaling more
than 1,500 hectares consist of six parcels of land, which are all located in Batangas. Abra de Ilog, TCT - 540 2,940,000 pasture, etc.
They were the exclusive paraphernal properties of Juliana together with a parcel of Mindoro
land situated in Mindoro known as Abra de Ilog and a fractional interest in a
residential land on Antorcha St., Balayan, Batangas. Antorcha St. TCT 1217-A 13,040 residential
Balayan, Batangas (1/6 thereof)
On 23 March 1968, Juliana executed a notarial will,[4] whereby she expressed that she
wished to constitute a trust fund for her paraphernal properties, denominated and all those properties to be inherited by the decedent, by
as Fideicomiso de Juliana Lopez Manzano (Fideicomiso), to be administered by her intestacy, from her sister, Clemencia Lopez y Castelo.
husband. If her husband were to die or renounce the obligation, her nephew, Enrique
Lopez, was to become administrator and executor of the Fideicomiso. Two-thirds (2/3) 15. The other half (1/2) of the aforesaid properties is adjudicated to
of the income from rentals over these properties were to answer for the education of Jose Lopez Manzano as heir.
deserving but needy honor students, while one-third 1/3 was to shoulder the
expenses and fees of the administrator. As to her conjugal properties, Juliana Then, Jose listed those properties which he alleged were registered in both his and
bequeathed the portion that she could legally dispose to her husband, and after his Julianas names, totaling 13 parcels in all. The disputed properties consisting of six (6)
death, said properties were to pass to her biznietos or great grandchildren. parcels, all located in Balayan, Batangas, were included in said list. These properties,
as described in the project of partition, are as follows:
Juliana initiated the probate of her will five (5) days after its execution, but she died Location Title No. Area (Sq. M.) Improvements
on 12 August 1968, before the petition for probate could be heard. The petition was
pursued instead in Special Proceedings (S.P.) No. 706 by her husband, Jose, who was Pantay, Calaca, 91,283 coconuts
the designated executor in the will. On 7 October 1968, the Court of First Instance, Batangas
Branch 3, Balayan, Batangas, acting as probate court, admitted the will to probate and
issued the letters testamentary to Jose. Jose then submitted an inventory of Julianas Mataywanak, OCT-29[6]94 485,486 sugar
real and personal properties with their appraised values, which was approved by the Tuy, Batangas
probate court.
Patugo, Balayan, OCT-2807 16,757,615 coconut,
Thereafter, Jose filed a Report dated 16 August 1969, which included a proposed Batangas sugar, citrus,
project of partition. In the report, Jose explained that as the only compulsory heir of pasteur
Juliana, he was entitled by operation of law to one-half (1/2) of
Julianas paraphernal properties as his legitime, while the other one-half (1/2) was to Cagayan, Balayan, TCT-1220 411,331 sugar
be constituted into the Fideicomiso. At the same time, Jose alleged that he and Juliana Batangas
had outstanding debts totaling P816,000.00 excluding interests, and that these debts
 Pook, Baayan TCT-1281 135,922 sugar sister, Clemencia, in accordance with the order of the probate court in S.P. No. 706.
Batangas The disputed lands were excluded from the trust.

Bolbok, Balayan, TCT-18845 444,998 sugar Jose died on 22 July 1980, leaving a holographic will disposing of the disputed
Batangas properties to respondents. The will was allowed probate on 20 December 1983 in S.P.
Calzada, Balayan, TCT 1978 2,312 sugar No. 2675 before the RTC of Pasay City. Pursuant to Joses will, the RTC ordered on 20
Batangas December 1983 the transfer of the disputed properties to the respondents as the
Gumamela, Balayan, TCT-2575 829 heirs of Jose. Consequently, the certificates of title of the disputed properties were
Batangas cancelled and new ones issued in the names of respondents.
Bombon, Balayan, 4,532
Batangas Petitioners father, Enrique Lopez, also assumed the trusteeship of Julianas
Paraaque, Rizal TCT-282340 800 residential estate. On 30 August 1984, the RTC of Batangas, Branch 9 appointed petitioner as
Paraaque, Rizal TCT-11577 800 residential trustee of Julianas estate in S.P. No. 706. On 11 December 1984, petitioner instituted
Modesto St., Manila TCT-52212 137.8 residential an action for reconveyance of parcels of land with sum of money before the RTC
of Balayan, Batangasagainst respondents. The complaint[5] essentially alleged that
and the existing sugar quota in the name of the deceased with the Jose was able to register in his name the disputed properties, which were
Central Azucarera Don Pedro at Nasugbo. 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
16. The remaining shall likewise go to Jose Lopez Manzano, with the and that upon the death of Jose, the disputed properties were included in the
condition to be annotated on the titles thereof, that upon his death, inventory as if they formed part of Joses estate when in fact Jose was holding them
the same shall pass on to Corazon Lopez, Ferdinand Lopez, and only in trust for the trust estate of Juliana.
Roberto Lopez:
Respondents Maria Rolinda Manzano, Maria Rosario Santos, Jose Manzano,
Location Title No. Area (Sq. M.) Improvements Jr., Narciso Manzano, Maria Cristina Manzano Rubio and Irene Monzon filed a joint
answer[6] with counterclaim for damages. Respondents Corazon, Fernando and
Dalig, Balayan, TCT-10080 482,872 sugar Roberto, all surnamed Lopez, who were minors at that time and represented by their
Batangas mother, filed a motion to dismiss,[7] the resolution of which was deferred until trial on
San Juan, Rizal TCT-53690 523 residential the merits. The RTC scheduled several pre-trial conferences and ordered the parties to
submit pre-trial briefs and copies of the exhibits.
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 On 10 September 1990, the RTC rendered a summary judgment, [8] dismissing the
court ordered that the certificates of title thereto be cancelled, and, in lieu thereof, action on the ground of prescription of action. The RTC also denied respondents
new certificates be issued in favor of Jose as trustee of the Fideicomiso covering one- motion to set date of hearing on the counterclaim.
half (1/2) of the properties listed under paragraph 14 of the project of partition; and
regarding the other half, to be registered in the name of Jose as heir of Juliana. The Both petitioner and respondents elevated the matter to the Court of Appeals. On 18
properties which Jose had alleged as registered in his and Julianas names, including October 2002, the Court of Appeals rendered the assailed decision denying the
the disputed lots, were adjudicated to Jose as heir, subject to the condition that Jose appeals filed by both petitioner and respondents. The Court of Appeals also denied
would settle the obligations charged on these properties. The probate court, thus, petitioners motion for reconsideration for lack of merit in its Resolution dated 3 April
directed that new certificates of title be issued in favor of Jose as the registered 2003.
owner thereof in its Order dated 15 September 1969. On even date, the certificates of Hence, the instant petition attributing the following errors to the Court of Appeals:
title of the disputed properties were issued in the name of Jose.
I. THE COURT OF APPEALS CONCLUSION THAT PETITIONERS
The Fideicomiso was constituted in S.P No. 706 encompassing one-half (1/2) of ACTION FOR [RECONVEYANCE] HAS PRESCRIBED TAKING AS
the Abra de Ilog lot on Mindoro, the 1/6 portion of the lot in Antorcha St. BASIS SEPTEMBER 15, 1969 WHEN THE PROPERTIES IN DISPUTE
in Balayan, Batangasand all other properties inherited ab intestato by Juliana from her WERE TRANSFERRED TO THE NAME OF THE LATE JOSE LOPEZ
 MANZANO IN RELATION TO DECEMBER 12, 1984 WHEN THE ACTION are superinduced on the transaction by operation of law as matters of equity,
FOR RECONVEYANCE WAS FILED IS ERRONEOUS. independently of the particular intention of the parties. [14]

II. THE RESPONDENT COURT OF APPEALS CONCLUSION IN The provision on implied trust governing the factual milieu of this case is
FINDING THAT THE FIDUCIARY RELATION ASSUMED BY THE LATE provided in Article 1456 of the Civil Code, which states:
JOSE LOPEZ MANZANO, AS TRUSTEE, PURSUANT TO THE LAST WILL
AND TESTAMENT OF JULIANA LOPEZ MANZANO WAS IMPLIED ART. 1456. If property is acquired through mistake or fraud, the
TRUST, INSTEAD OF EXPRESS TRUST IS EQUALLY ERRONEOUS. 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
None of the respondents filed a comment on the petition. The counsel for comes.
respondents Corazon, Fernando and Roberto, all surnamed Lopez, explained that he
learned that respondents had migrated to the United States only when the case was In Aznar Brothers Realty Company v. Aying,[15] the Court differentiated two
pending before the Court of Appeals.[9] Counsel for the rest of the respondents kinds of implied trusts, to wit:
likewise manifested that the failure by said respondents to contact or communicate
with him possibly signified their lack of interest in the case. [10] In a Resolution dated 19 x x x In turn, implied trusts are either resulting or
September 2005, the Court dispensed with the filing of a comment and considered constructive trusts. These two are differentiated from each other as
the case submitted for decision.[11] follows:

Resulting trusts are based on the equitable doctrine that

The core issue of the instant petition hinges on whether petitioners action valuable consideration and not legal title determines the equitable
for reconveyance has prescribed. The resolution of this issue calls for a determination title or interest and are presumed always to have been
of whether an implied trust was constituted over the disputed properties when Jose, contemplated by the parties. They arise from the nature of
the trustee, registered them in his name. circumstances of the consideration involved in a transaction
Petitioner insists that an express trust was constituted over the disputed whereby one person thereby becomes invested with legal title but is
properties; thus the registration of the disputed properties in the name of Jose as obligated in equity to hold his legal title for the benefit of another.
trustee cannot give rise to prescription of action to prevent the recovery of the On the other hand, constructive trusts are created by the
disputed properties by the beneficiary against the trustee. construction of equity in order to satisfy the demands of justice and
prevent unjust enrichment. They arise contrary to intention against
Evidently, Julianas testamentary intent was to constitute an express trust one who, by fraud, duress or abuse of confidence, obtains or holds
over her paraphernal properties which was carried out when the Fideicomiso was the legal right to property which he ought not, in equity and good
established in S.P. No. 706.[12] However, the disputed properties were expressly conscience, to hold.[16]
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 A resulting trust is presumed to have been contemplated by the parties, the
properties from the Fideicomiso and adjudicating the same to Jose as sole heir, the intention as to which is to be found in the nature of their transaction but not
mistake was not rectified as no party appeared to oppose or appeal the exclusion of expressed in the deed itself.[17] Specific examples of resulting trusts may be found in
the disputed properties from the Fideicomiso. Moreover, the exclusion of the the Civil Code, particularly Arts. 1448,[18] 1449,[19] 1451,[20] 1452[21] and 1453.[22]
disputed properties from the Fideicomiso bore the approval of the probate court. The
issuance of the probate courts order adjudicating the disputed properties to Jose as A constructive trust is created, not by any word evincing a direct intention to
the sole heir of Juliana enjoys the presumption of regularity.[13] create a trust, but by operation of law in order to satisfy the demands of justice and to
prevent unjust enrichment.[23] It is raised by equity in respect of property, which has
On the premise that the disputed properties were the paraphernal properties been acquired by fraud, or where although acquired originally without fraud, it is
of Juliana which should have been included in the Fideicomiso, their registration in the against equity that it should be retained by the person holding it. [24] Constructive
name of Jose would be erroneous and Joses possession would be that of a trustee in trusts are illustrated in Arts. 1450,[25] 1454,[26] 1455[27] and 1456.[28]
an implied trust. Implied trusts are those which, without being expressed, are The disputed properties were excluded from the Fideicomiso at the outset.
deducible from the nature of the transaction as matters of intent or which Jose registered the disputed properties in his name partly as his conjugal share and
partly as his inheritance from his wife Juliana, which is the complete reverse of the
claim of the petitioner, as the new trustee, that the properties are intended for the In any case, the rule that a trustee cannot acquire by prescription ownership
beneficiaries of the Fideicomiso. Furthermore, the exclusion of the disputed over property entrusted to him until and unless he repudiates the trust applies only to
properties from the Fideicomiso was approved by the probate court and, express trusts and resulting implied trusts. However, in constructive implied trusts,
subsequently, by the trial court having jurisdiction over the Fideicomiso. The prescription may supervene even if the trustee does not repudiate the relationship.
registration of the disputed properties in the name of Jose was actually pursuant to a Necessarily, repudiation of said trust is not a condition precedent to the running of
court order. The apparent mistake in the adjudication of the disputed properties to the prescriptive period.[31] Thus, for the purpose of counting the ten-year prescriptive
Jose created a mere implied trust of the constructive variety in favor of the period for the action to enforce the constructive trust, the reckoning point is deemed
beneficiaries of the Fideicomiso. to be on 15 September 1969 when Jose registered the disputed properties in his
name.
Now that it is established that only a constructive trust was constituted over
the disputed properties, may prescription for the recovery of the properties WHEREFORE, the instant petition for review on certiorari is DENIED and the
supervene? decision and resolution of the Court of Appeals in CA-G.R. CV No. 34086 are
AFFIRMED. Costs against petitioner.
Petitioner asserts that, if at all, prescription should be reckoned only when
respondents caused the registration of the disputed properties in their names on 13 SO ORDERED.
April 1984and not on 15 September 1969, when Jose registered the same in his name
pursuant to the probate courts order adjudicating the disputed properties to him as
the sole heir of Juliana. Petitioner adds, proceeding on the premise that the
prescriptive period should be counted from the repudiation of the trust, Jose had not
performed any act indicative of his repudiation of the trust or otherwise declared an THIRD DIVISION
adverse claim over the disputed properties.
SOLEDAD CAEZO, substituted by WILLIAM CAEZO and G.R. No. 148788
The argument is tenuous. VICTORIANO CAEZO
Petitioners, Present:
The right to seek reconveyance based on an implied or constructive trust is
not absolute. It is subject to extinctive prescription.[29] An action YNARES-SANTIAGO, J.,
for reconveyance based on implied or constructive trust prescribes in 10 years. This Chairperson,
period is reckoned from the date of the issuance of the original certificate of title or AUSTRIA-MARTINEZ,
transfer certificate of title. Since such issuance operates as a constructive notice to - versus - CHICO-NAZARIO,
the whole world, the discovery of the fraud is deemed to have taken place at that NACHURA, and
time.[30] REYES, JJ.

In the instant case, the ten-year prescriptive period to recover the disputed
property must be counted from its registration in the name of Jose on 15 September CONCEPCION ROJAS, Promulgated:
1969, when petitioner was charged with constructive notice that Jose adjudicated the Respondent.
disputed properties to himself as the sole heir of Juana and not as trustee of November 23, 2007
the Fideicomiso.

It should be pointed out also that Jose had already indicated at the outset
that the disputed properties did not form part of the Fideicomiso contrary to
petitioners claim that no overt acts of repudiation may be attributed to Jose. It may
not be amiss to state that in the project of partition submitted to the probate court,
Jose had indicated that the disputed properties were conjugal in nature and, thus, x-----------------------------------------------------------------------------------------x
excluded from Julianas Fideicomiso. This act is clearly tantamount to repudiating the
trust, at which point the period for prescription is reckoned. DECISION

NACHURA, J.:
 paragraph 5 of the complaint and hereby orders defendant
Concepcion Rojas:
This is a petition for review on certiorari from the Decision[1] of the Court of
Appeals, dated September 7, 2000, in CA-G.R. SP No. 53236, and Resolution a) To vacate and surrender possession of
dated May 9, 2001. the land to
plaintiff;
b) To pay plaintiff the sum of P34,000.00
actual
On January 29, 1997, petitioner Soledad Caezo filed a Complaint[2] for the damages, P10,000.00 for attorneys fees
recovery of real property plus damages with the Municipal Trial Court (MTC) of Naval, and litigation expenses; and
Biliran, against her fathers second wife, respondent Concepcion Rojas. The subject c) To pay the costs.
property is an unregistered land with an area of 4,169 square meters, situated at
Higatangan, Naval, Biliran. Caezo attached to the complaint a Joint SO ORDERED.[7]
Affidavit[3] executed on May 10, 1979 by Isidro Catandijan and Maximina Caezo
attesting to her acquisition of theproperty.
Despite the respondents objection that the verbal sale cannot be proven without
In her complaint, the petitioner alleged that she bought the parcel of land in infringing the Statute of Frauds, the MTC gave credence to the testimony of the
1939 from Crisogono Limpiado, although the transaction was not reduced into petitioners two witnesses attesting to the fact that Crisogono Limpiado sold the
writing. Thereafter, she immediately took possession of the property. When she and property to the petitioner in 1939. The MTC also found no evidence to show that
her husband left for Mindanao in 1948, she entrusted the said land to her father, Crispulo Rojas bought the property from Crisogono Limpiado in 1948. It held that the
Crispulo[4] Rojas, who took possession of, and cultivated, the property. In 1980, she 1948 tax declaration in Crispulos name had little significance on respondents claim,
found out that the respondent, her stepmother, was in possession of the property considering that in 1948, the country was then rehabilitating itself from the ravages of
and was cultivating the same. She also discovered that the tax declaration over the the Second World War and the government was more interested in the increase in tax
property was already in the name of Crispulo Rojas.[5] collection than the observance of the niceties of law.[8]

In her Answer, the respondent asserted that, contrary to the petitioners claim, it was The respondent appealed the case to the Regional Trial Court (RTC) of Naval,
her husband, Crispulo Rojas, who bought the property from Crisogono Limpiado in Biliran. On October 12, 1998, the RTC reversed the MTC decision on the ground that
1948, which accounts for the tax declaration being in Crispulos name. From then on, the action had already prescribed and acquisitive prescription had set in. The
until his death in 1978, Crispulo possessed and cultivated the property. Upon his dispositive portion of the Decision reads:
death, the property was included in his estate, which was administered by a special
administrator, Bienvenido Ricafort. The petitioner, as heir, even received her share in WHEREFORE, premises considered, the decision of the Municipal
the produce of the estate. The respondent further contended that the petitioner Trial Court of Naval, Biliran awarding ownership of the disputed land
ought to have impleaded all of the heirs as defendants. She also argued that the fact to the plaintiff and further allowing recovery of damages is hereby
that petitioner filed the complaint only in 1997 means that she had already REVERSED in toto. There is no award of damages.
abandoned her right over the property.[6]
The said property remains as the legitime of the defendant
On July 3, 1998, after hearing, the MTC rendered a Decision in favor of the petitioner, Concepcion Rojas and her children.
thus:
SO ORDERED.[9]

WHEREFORE, premises considered, the Court finds a preponderance

of evidence in favor of plaintiff Soledad Caezo and against However, acting on petitioners motion for reconsideration, the RTC amended
defendant Concepcion Rojas by declaring plaintiff the true and its original decision on December 14, 1998.[10] This time, it held that the action had
lawful owner of the land more particularly described under not yet prescribed considering that the petitioner merely entrusted the property to
her father. The ten-year prescriptive period for the recovery of a property held in trust
would commence to run only from the time the trustee repudiates the trust. The RTC
found no evidence on record showing that Crispulo Rojas ever ousted the petitioner WHEREFORE, the amended decision dated December 14,
from the property. The dispositive portion of the amended decision reads as follows: 1998 rendered in Civil Case No. B-1041 is hereby REVERSED and SET
ASIDE. The complaint filed by Soledad Caezobefore the Municipal
Trial Court of Naval, Biliran is hereby DISMISSED on grounds of
WHEREFORE, in view of the foregoing considerations, the laches and prescription and for lack of merit.
decision of this Court dated October 12, 1998 is hereby set aside
and another is hereby entered modifying the decision of the Court a SO ORDERED.[12]
quo and declaring Soledad Rojas Vda. De Caezo as the true and
lawful owner of a parcel of land, more particularly described and
bounded as follows: The CA held that the petitioners inaction for several years casts a serious
doubt on her claim of ownership over the parcel of land. It noted that 17 years lapsed
A parcel of land situated at Higatangan, since she discovered that respondent was in adverse possession of the property
Naval, Biliran, bounded on the North by Policarpio before she instituted an action to recover the same. And during the probate
Limpiado; on the South by Fidel Limpiado; on the proceedings, the petitioner did not even contest the inclusion of the property in the
East by Seashore; and on the West by Crispolo (sic) estate of Crispulo Rojas. [13]
Limpiado with an approximate area of 4,169
square meters per Tax Declaration No. 2258, later The CA was convinced that Crispulo Rojas owned the property, having
under Tax Declaration No. 4073 in the name of bought the same from Crisogono Limpiado in 1948. Supporting this conclusion, the
Crispolo Rojas and later in the name of the Heirs of appellate court cited the following circumstances: (1) the property was declared for
Crispolo Rojas. taxation purposes in Crispulos name and he had been paying the taxes thereon from
1948 until his death in 1978; (2) Crispulo adversely possessed the same property from
Further, ordering defendant-appellant Concepcion Rojas 1948 until his death in 1978; and (3) upon his death in 1978, the property was
and all persons claiming rights or interest under her to vacate and included in his estate, the proceeds of which were distributed among his heirs. [14]
surrender possession of the land aforecited to the plaintiff or any of
her authorized representatives, Ordering the Provincial and/or
Municipal Assessors Office to cancel the present existing Tax The CA further held that, assuming that there was an implied trust between
Declaration in the name of Heirs of Crispolo Rojas referring to the the petitioner and her father over the property, her right of action to recover the
above-described property in favor of the name of Soledad Rojas same would still be barred by prescription since 49 years had already lapsed since
Vda. De Caezo, Ordering the defendant-appellant Concepcion Rojas Crispulo adversely possessed the contested property in 1948.[15]
to pay the plaintiff-appellee the sum of P34,000.00 in actual
damages, and to pay for the loss of her share in money value of the On May 9, 2001, the CA denied the petitioners motion for reconsideration for
products of the coconuts of said land from 1979 to 1997 and to pay lack of merit.[16]
further until the case is terminated at the rate of P200.00 per
quarter based on the regular remittances of the late Crispolo Rojas In this petition for review, the petitioner, substituted by her heirs, assigns the
to the plaintiff-appellee, and to pay the costs. following errors:

SO ORDERED.[11]
That the Court of Appeals committed grave abuse of
discretion in setting aside petitioners contention that the Petition
The respondent filed a motion to reconsider the Amended Decision but the for Review filed by respondent CONCEPCION ROJAS before the
RTC denied the same in an Order dated April 25, 1999. Court of Appeals was FILED OUT OF TIME;

That the Court of Appeals erred and committed grave

She then filed a petition for review with the Court of Appeals (CA), which abuse of discretion amounting to lack or excess of jurisdiction when
reversed the Amended Decision of the RTC on September 7, 2000, thus: it decided that the filing of the case by SOLEDAD CAEZO for
 Recovery of Real Property was already barred by PRESCRIPTION respondents petition. The grant or denial of a motion for extension of time is
AND LACHES.[17] addressed to the sound discretion of the court.[18] The CA obviously considered the
difficulty in securing a certified true copy of the assailed decision because of the
distance between the office of respondents counsel and the trial court as a compelling
The petitioner insists that the respondents petition for review before the CA reason for the request. In the absence of any showing that the CA granted the motion
was filed out of time. The petitioner posits that the CA may not grant an additional for extension capriciously, such exercise of discretion will not be disturbed by this
extension of time to file the petition except for the most compelling reason. She Court.
contends that the fact that respondents counsel needed additional time to secure the
certified copy of his annexes cannot be considered as a compelling reason that would On the second issue, the petitioner insists that her right of action to recover
justify an additional period of the property cannot be barred by prescription or laches even with the respondents
extension. She admits, though, that this issue was raised for the first time in their uninterrupted possession of the property for 49 years because there existed between
motion for reconsideration, but insists that it can be raised at any time since it her and her father an express trust or a resulting trust. Indeed, if no trust relations
concerns the jurisdiction of the CA over the petition. existed, the possession of the property by the respondent, through her predecessor,
which dates back to 1948, would already have given rise to acquisitive prescription in
The petitioner further posits that prescription and laches are unavailing accordance with Act No. 190 (Code of Civil Procedure). [19] Under Section 40 of Act No.
because there was an express trust relationship between the petitioner and Crispulo 190, an action for recovery of real property, or of an interest therein, can be brought
Rojas and his heirs, and express trusts do not prescribe. Even assuming that it was not only within ten years after the cause of action accrues. This period coincides with the
an express trust, there was a resulting trust which generally does not prescribe unless ten-year period for acquisitive prescription provided under Section 41[20] of the same
there is repudiation by the trustee. Act.
Thus, the resolution of the second issue hinges on our determination of the
For her part, the respondent argues that the petitioners are now estopped existence of a trust over the property --- express or implied --- between the petitioner
from questioning the CA Resolution granting her second motion for extension to file and her father.
the petition for review. She notes that the petitioner did not raise this issue in the
comment that she filed in the CA. In any case, the grant of the second extension of A trust is the legal relationship between one person having an equitable
time was warranted considering that the certified true copy of the assailed RTC orders ownership of property and another person owning the legal title to such property, the
did not arrive at the office of respondents counsel in Cebu City in time for the filing of equitable ownership of the former entitling him to the performance of certain duties
the petition. and the exercise of certain powers by the latter.[21] Trusts are either express or
implied.[22] Express trusts are those which are created by the direct and positive acts
of the parties, by some writing or deed, or will, or by words evincing an intention to
On the merits, the respondent asserts that the complaint is barred by create a trust.[23] Implied trusts are those which, without being expressed, are
prescription, laches and estoppel. From 1948 until his death in 1978, Crispulo deducible from the nature of the transaction as matters of intent or, independently,
cultivated the property and was in adverse, peaceful and continuous possession of the particular intention of the parties, as being superinduced on the transaction by
thereof in the concept of owner. It took the petitioner 49 years from 1948 before she operation of law basically by reason of equity.[24] An implied trust may either be a
filed the complaint for recovery of the property in 1997. Granting that it was only in resulting trust or a constructive trust.
1980 that she found out that the respondent adversely possessed the property, still
petitioner allowed 17 years to elapse before she asserted her alleged right over the It is true that in express trusts and resulting trusts, a trustee cannot acquire
property. by prescription a property entrusted to him unless he repudiates the trust. [25] The
following discussion is instructive:
Finally, the respondent maintains that the other co-owners are indispensable
parties to the case; and because they were not impleaded, the case should be
dismissed. There is a rule that a trustee cannot acquire by
prescription the ownership of property entrusted to him, or that an
The petition has no merit. action to compel a trustee to convey property registered in his name
in trust for the benefit of the cestui que trust does not prescribe, or
On the procedural issue raised by the petitioner, we find no reversible error that the defense of prescription cannot be set up in an action to
in the grant by the CA of the second motion for extension of time to file the recover property held by a person in trust for the benefit of another,
 or that property held in trust can be recovered by the beneficiary
regardless of the lapse of time. What is crucial is the intention to create a trust. While oftentimes
the intention is manifested by the trustor in express or explicit
That rule applies squarely to express trusts. The basis of the language, such intention may be manifested by inference from what
rule is that the possession of a trustee is not adverse. Not being the trustor has said or done, from the nature of the transaction, or
adverse, he does not acquire by prescription the property held in from the circumstances surrounding the creation of the purported
trust. Thus, Section 38 of Act 190 provides that the law of trust.
prescription does not apply "in the case of a continuing and
subsisting trust." However, an inference of the intention to create a trust,
made from language, conduct or circumstances, must be made with
The rule of imprescriptibility of the action to recover reasonable certainty. It cannot rest on vague, uncertain or indefinite
property held in trust may possibly apply to resulting trusts as long declarations. An inference of intention to create a trust, predicated
as the trustee has not repudiated the trust. only on circumstances, can be made only where they admit of no
other interpretation.[31]
xxxx

Acquisitive prescription may bar the action of the

beneficiary against the trustee in an express trust for the recovery of Although no particular words are required for the creation of an express
the property held in trust where (a) the trustee has performed trust, a clear intention to create a trust must be shown; and the proof of fiduciary
unequivocal acts of repudiation amounting to an ouster of the cestui relationship must be clear and convincing. The creation of an express trust must be
que trust; (b) such positive acts of repudiation have been made manifested with reasonable certainty and cannot be inferred from loose and vague
known to the cestui que trust, and (c) the evidence thereon is clear declarations or from ambiguous circumstances susceptible of other interpretations.[32]
and conclusive.[26]
In the case at bench, an intention to create a trust cannot be inferred from
the petitioners testimony and the attendant facts and circumstances. The petitioner
As a rule, however, the burden of proving the existence of a trust is on the testified only to the effect that her agreement with her father was that she will be
party asserting its existence, and such proof must be clear and satisfactorily show the given a share in the produce of the property, thus:
existence of the trust and its elements.[27] The presence of the following elements
must be proved: (1) a trustor or settlor who executes the instrument creating the
trust; (2) a trustee, who is the person expressly designated to carry out the trust; (3) Q: What was your agreement with your father Crispulo
the trust res, consisting of duly identified and definite real properties; and (4) Rojas when you left this property to him?
the cestui que trust, or beneficiaries whose identity must be clear.[28] Accordingly, it A: Every time that they will make copra, they will give a
was incumbent upon petitioner to prove the existence of the trust relationship. And share.
petitioner sadly failed to discharge that burden.
Q: In what particular part in Mindanao [did] you stay with
The existence of express trusts concerning real property may not be your husband?
established by parol evidence.[29] It must be proven by some writing or deed. In this A: Bansalan, Davao del Sur.
case, the only evidence to support the claim that an express trust existed between the
petitioner and her father was the self-serving testimony of the petitioner. Bare Q: And while you were in Bansalan, Davao del Sur, did
allegations do not constitute evidence adequate to support a conclusion. They are not Crispolo Rojas comply with his obligation of giving your share the
equivalent to proof under the Rules of Court.[30] proceeds of the land?
A: When he was still alive, he gave us every three months
In one case, the Court allowed oral testimony to prove the existence of a sometimes P200.00 and sometimes P300.00.[33]
trust, which had been partially performed. It was stressed therein that what is
important is that there should be an intention to create a trust, thus:
This allegation, standing alone as it does, is inadequate to establish the existence of a ten years. There could be prescriptionunder the said section even in the absence of
trust because profit-sharing per se, does not necessarily translate to a trust relation. It good faith and just title.[40]
could also be present in other relations, such as in deposit.
All the foregoing notwithstanding, even if we sustain petitioners claim that
What distinguishes a trust from other relations is the separation of the legal
she was the owner of the property and that she constituted a trust over the property
title and equitable ownership of the property. In a trust relation, legal title is vested in
the fiduciary while equitable ownership is vested in a cestui que trust. Such is not true with her father as the trustee, such a finding still would not advance her case.
in this case. The petitioner alleged in her complaint that the tax declaration of the
Assuming that such a relation existed, it terminated upon Crispulos death in
land was transferred to the name of Crispulo without her consent. Had it been her
1978. A trust terminates upon the death of the trustee where the trust is personal to
intention to create a trust and make Crispulo her trustee, she would not have made
an issue out of this because in a trust agreement, legal title is vested in the trustee. the trustee in the sense that the trustor intended no other person to administer
it.[41] If Crispulo was indeed appointed as trustee of the property, it cannot be said
The trustee would necessarily have the right to transfer the tax declaration in his
that such appointment was intended to be conveyed to the respondent or any of
name and to pay the taxes on the property. These acts would be treated as beneficial
to the cestui que trust and would not amount to an adverse possession.[34] Crispulos other heirs. Hence, after Crispulos death, the respondent had no right to
retain possession of the property. At such point, a constructive trust would be created
over the property by operation of law. Where one mistakenly retains property which
Neither can it be deduced from the circumstances of the case that a resulting
rightfully belongs to another, a constructive trust is the proper remedial device to
trust was created. A resulting trust is a species of implied trust that is presumed
always to have been contemplated by the parties, the intention as to which can be correct the situation.[42]
found in the nature of their transaction although not expressed in a deed or
A constructive trust is one created not by any word or phrase, either
instrument of conveyance. A resulting trust is based on the equitable doctrine that it
expressly or impliedly, evincing a direct intention to create a trust, but one
is the more valuable consideration than the legal title that determines the equitable
interest in property.[35] which arises in order to satisfy the demands of justice. It does not come about by
agreement or intention but in the main by operation of law, construed against one
who, by fraud, duress or abuse of confidence, obtains or holds the legal right to
While implied trusts may be proved by oral evidence, the evidence must be
trustworthy and received by the courts with extreme caution, and should not be property which he ought not, in equity and good conscience, to hold. [43]
made to rest on loose, equivocal or indefinite declarations. Trustworthy evidence is
As previously stated, the rule that a trustee cannot, by prescription, acquire
required because oral evidence can easily be fabricated.[36] In order to establish an
ownership over property entrusted to him until and unless he repudiates the trust,
implied trust in real property by parol evidence, the proof should be as fully
convincing as if the acts giving rise to the trust obligation are proven by an authentic applies to express trusts and resulting implied trusts. However, in constructive implied
trusts, prescription may supervene even if the trustee does not repudiate the
document. An implied trust, in fine, cannot be established upon vague and
relationship. Necessarily, repudiation of the said trust is not a condition precedent to
inconclusive proof.[37] In the present case, there was no evidence of any transaction
between the petitioner and her father from which it can be inferred that a resulting the running of the prescriptive period.[44] A constructive trust, unlike an express trust,
does not emanate from, or generate a fiduciary relation. While in an express trust, a
trust was intended.
beneficiary and a trustee are linked by confidential or fiduciary relations, in a
constructive trust, there is neither a promise nor any fiduciary relation to speak of and
In light of the disquisitions, we hold that there was no express trust or the so-called trustee neither accepts any trust nor intends holding the property for
resulting trust established between the petitioner and her father. Thus, in the absence the beneficiary.[45] The relation of trustee and cestui que trust does not in fact exist,
of a trust relation, we can only conclude that Crispulos uninterrupted possession of and the holding of a constructive trust is for the trustee himself, and therefore, at all
the subject property for 49 years, coupled with the performance of acts of ownership, times adverse.
such as payment of real estate taxes, ripened into ownership. The statutory period of
prescription commences when a person who has neither title nor good faith, secures In addition, a number of other factors militate against the petitioners
case. First, the petitioner is estopped from asserting ownership over the subject
a tax declaration in his name and may, therefore, be said to have adversely
property by her failure to protest its inclusion in the estate of Crispulo. The CA, thus,
claimed ownership of the lot.[38] While tax declarations and receipts are not conclusive
evidence of ownership and do not prove title to the land, nevertheless, when coupled correctly observed that:
with actual possession, they constitute evidence of great weight and can be the basis
of a claim of ownership through prescription.[39] Moreover, Section 41 of Act No. 190
allows adverse possession in any character to ripen into ownership after the lapse of
 Even in the probate proceedings instituted by the heirs of (2) OBDULLIA LABISTE GABUAN,
Crispulo Rojas, which included her as a daughter of the first representing the heirs of Juan Labiste; QUISUMBING, J.,
marriage, Caezo never contested the inclusion of the contested (3) VICTORIA G. CHIONG, representing Chairperson,
property in the estate of her father. She even participated in the the Heirs of Eulalia Labiste; (4) APOLINARIA CARPIO MORALES,
project of partition of her fathers estate which was approved by the LABISTE YLAYA, representing the TINGA,
probate court in 1984. After personally receiving her share in the Heirs of Nicolasa Labiste; (5) DEMOSTHENES VELASCO, JR., and
proceeds of the estate for 12 years, she suddenly claims ownership LABISTE, representing the Heirs of Gervacio BRION, JJ.
of part of her fathers estate in 1997. Labiste; (6) ALEJANDRA LABISTE;
representing the Heirs of SINFROCIO
The principle of estoppel in pais applies when -- by ones acts, representations,
LABISTE, and (7) CLOTILDE LABISTE CARTA,
admissions, or silence when there is a need to speak out -- one, intentionally or representing the Heirs of Andres Labiste,
through culpable negligence, induces another to believe certain facts to exist; and the
Petitioners,
latter rightfully relies and acts on such belief, so as to be prejudiced if the former is
permitted to deny the existence of those facts.[46] Such a situation obtains in the - versus
instant case.
Second, the action is barred by laches. The petitioner allegedly discovered that the HEIRS OF JOSE LABISTE, survived by his Promulgated:
property was being possessed by the respondent in 1980.[47] However, it was only in children, (1) ZACARIAS LABISTE, deceased
1997 that she filed the action to recover the property. Laches is negligence or and survived by his children, namely: CRESENCIA
omission to assert a right within a reasonable time, warranting a presumption that the LABISTE and EUFRONIO LABISTE; (2) May 8, 2009
party entitled to it has either abandoned or declined to assert it.[48] BERNARDINO LABISTE, deceased and survived
by his children, namely: POLICARPIO LABISTE,
Finally, the respondent asserts that the court a quo ought to have dismissed BONIFACIO LABISTE, FELIX LABISTE,
the complaint for failure to implead the other heirs who are indispensable parties. We GABINA LABISTE, CAYETANA LABISTE and
agree. We note that the complaint filed by the petitioner sought to recover ISABEL LABISTE; (3) LUCIA LABISTE,
ownership, not just possession of the property; thus, the suit is in the nature of an deceased and survived by her children, namely:
action for reconveyance. It is axiomatic that owners of property over which ISAAC LABISTE, GENARO LABISTE,
reconveyance is asserted are indispensable parties. Without them being impleaded, BRAULIA LABISTE, BRAULIO LABISTE,
no relief is available, for the court cannot render valid judgment. Being indispensable ASUNCION LABISTE, ALFONSO LABISTE
parties, their absence in the suit renders all subsequent actions of the trial court null and CLAUDIA LABISTE; (4) EPIFANIO
and void for want of authority to act, not only as to the absent parties but even as to LABISTE and CLAUDIA LABISTE;
those present. Thus, when indispensable parties are not before the court, the action deceased and survived by his children,
should be dismissed.[49] At any rate, a resolution of this issue is now purely academic namely SILVESTRE LABISTE,
in light of our finding that the complaint is already barred by prescription, estoppel PAULA LABISTE and GERARDA LABISTE;
and laches. (5) ANA LABISTE, deceased and survived by her
children, namely: MAXIMO LABISTE, MOISES
WHEREFORE, premises considered, the petition is DENIED. The Decision of the Court LABISTE, GERVACIO LABISTE, SATURNINA
of Appeals, dated September 7, 2000, and Resolution dated May 9, 2001, LABISTE and QUIRINO LABISTE; (6) SEVERO
areAFFIRMED. LABISTE, deceased and survived by his children,
SO ORDERED. Namely: FELIX LABISTE, RUFINA
LABISTE, SIMPLICIO LABISTE,
SECOND DIVISION VICENTE LABISTE and PATRICIO
LABISTE,
HEIRS OF TRANQUILINO LABISTE G.R. No. 162033 Respondents.
(also known as Tranquilino Laviste)
represented by: (1) GERARDO LABISTE, x-------------------------------------------------------------------------------------x
representing the Heirs of Gregorio Labiste; Present:
 DECISION government offices were also destroyed during the war. Squatters have practically
overrun the entire property, such that neither petitioners nor respondents possess it.
TINGA, J.:
In October 1993, petitioners learned that one of the
This is a petition for review[1] under Rule 45 of the Rules of Court of the Court of respondents,[11] Asuncion Labiste, had filed on 17 September 1993 a petition for
Appeals Decision dated 30 June 2003[2] in CA-G.R. CV No. 65829. reversing the reconstitution of title over Lot No. 1054. Petitioners opposed the petition at first but
decision of the Regional Trial Court (RTC) of Cebu City, Branch 9. The appellate court by a compromise agreement between the parties dated 25 March 1994, petitioners
denied petitioners[3] motion for reconsideration in a Resolution dated 15 January withdrew their opposition to expedite the reconstitution process. Under the
2004. compromise agreement, petitioners were to be given time to file a complaint so that
the issues could be litigated in an ordinary action and the reconstituted title was to be
The factual antecedents are as follows: deposited with the Clerk of Court for a period of sixty (60) days to allow petitioners to
file an action for reconveyance and to annotate a notice of lis pendens. The Register of
Deeds of Cebu City issued the reconstituted title, TCT No. RT-7853,[12] in the name of
Epifanio Labiste, married to Tomasa Mabitad, his brothers and sisters, heirs of Jose
On 29 September 1919, the late Epifanio Labiste (Epifanio), on his own and Labiste on 14 December 1994. However, respondents did not honor the compromise
on behalf of his brothers and sisters who were the heirs of Jose Labiste (Jose), agreement.
purchased from the Bureau of Lands Lot No. 1054 of the Banilad Friar Lands Estate,
with an area of 13,308 square meters, located at Guadalupe, Cebu City Petitioners filed a complaint[13] for annulment of title seeking the
for P36.00.[4] Subsequently, on 9 June 1924, then Bureau of Lands Director Jorge B. reconveyance of property and damages on 13 January 1995, docketed as Civil Case
Vargas executed Deed of Conveyance No. 12536 selling and ceding Lot No. 1054 to No. CEB-16943, with the RTC of Cebu City. Respondents claimed that the Affidavit of
Epifanio and his brothers and sisters who were the heirs of Jose.[5] Epifanio and the Calig-onan sa Panagpalit were forgeries and that petitioners action
had long prescribed or barred by laches.[14]
After full payment of the purchase price but prior to the issuance of the deed
of conveyance, Epifanio executed an Affidavit[6] (Affidavit of Epifanio) in Spanish on 10 The RTC in a Decision dated 23 August 1999[15] ruled in favor of petitioners.
July 1923 affirming that he, as one of the heirs of Jose, and his uncle and petitioners After evaluating the documents presented by petitioners, the RTC found that they are
predecessor-in-interest, Tranquilino Labiste (Tranquilino), then co-owned Lot No. genuine and authentic as ancient documents and that they are valid and
1054 because the money that was paid to the government came from the two of enforceable.[16] Moreover, it held that the action had not prescribed as the complaint
them. Tranquilino and the heirs of Jose continued to hold the property jointly. was filed about a year after the reconstitution of the title by respondents. The judicial
Sometime in 1928, the Register of Deeds of Cebu City issued Original reconstitution was even opposed by petitioners until a compromise agreement was
Certificate of Title No. 3878 for Lot No. 1054. On 2 May 1928, Engineer Espiritu reached by the parties and approved by the RTC which ordered the reconstitution.
Bunagan (Engr. Bunagan), Deputy Public Land Surveyor, subdivided Lot No. 1054 into The RTC further held that the reconstituted title did not give any more right to
two lots: Lot No. 1054-A with an area of 6,664 square meters for Tranquilino and Lot respondents than what their predecessors-in-interest actually had as it is limited to
No. 1054-B with an area of 6,664 square meters for Epifanio. The subdivision plan the reconstitution of the certificate as it stood at the time of its loss or destruction. [17]
prepared by Engr. Bunagan was approved by Jose P. Dans, Acting Director of Lands
on 28 October 1928.[7] On appeal, the Court of Appeals, while affirming petitioners right to the
property, nevertheless reversed the RTCs decision on the ground of prescription and
Subsequently, on 18 October 1939, the heirs of Tranquilino [8] purchased the laches. It affirmed the RTCs findings that the Affidavit and the Calig-onan sa
one-half (1/2) interest of the heirs of Jose[9] over Lot No. 1054 for P300.00, as Panagpalit are genuine and authentic, and that the same are valid and enforceable
evidenced by the Calig-onan sa Panagpalit[10] executed by the parties in documents.[18] Citing Article 1144 of the Civil Code, it held that petitioners cause of
the Visayan dialect. The heirs of Tranquilino immediately took possession of the entire action had prescribed for the action must be brought within ten (10) years from the
lot. time the right of action accrues upon the written contract which in this case was when
petitioners predecessors-in-interest lost possession over the property after World
When World War II broke out, the heirs of Tranquilino fled Cebu City and War II. Also, the lapse of time to file the action constitutes neglect on petitioners part
when they came back they found their homes and possessions destroyed. The records so the principle of laches is applicable.[19]
in the Office of the Register of Deeds, Office of the City Assessor and other
Hence, the present petition.
 only act that can be construed as repudiation was when respondents filed the petition
The genuineness and authenticity of the Affidavit of Epifanio and the Calig- for reconstitution in October 1993. And since petitioners filed their complaint in
onan sa Panagpalit are beyond cavil. As we have ruled in a litany of cases, resort to January 1995, their cause of action has not yet prescribed, laches cannot be attributed
judicial review of the decisions of the Court of Appeals under Rule 45 is confined only to them.
to errors of law.[20] The findings of fact by the lower court are conclusive absent any
palpable error or arbitrariness.[21] The Court finds no reason to depart from this It is hornbook doctrine that laches is a creation of equity and its application is
principle. Moreover, it is a long settled doctrine that findings of fact of the trial court, controlled by equitable considerations. Laches cannot be used to defeat justice or
when affirmed by the Court of Appeals, are binding upon the Court. It is not the perpetrate fraud and injustice.[28] Neither should its application be used to prevent
function of the Supreme Court to weigh anew the evidence already passed upon by the rightful owners of a property from
the Court of Appeals for these are deemed final and conclusive and may not be
reviewed on appeal.[22]

The sole issue that the Court has to resolve is whether or not petitioners recovering what has been fraudulently registered in the name of another. [29] The
cause of action has prescribed. equitable remedy of laches is, therefore, unavailing in this case.

The Court of Appeals erred in applying the rules on prescription and the However, to recover the other half of the property covered by the
principle of laches because what is involved in the present case is an express trust. private Calig-onan sa Panagpalit and to have it registered on the title of the property,
petitioners should have filed an action to compel[30] respondents, as heirs of the
Trust is the right to the beneficial enjoyment of property, the legal title to sellers in the contract,[31] to execute a public deed of sale. A conveyance of land made
which is vested in another. It is a fiduciary relationship that obliges the trustee to deal in a private document does not affect its validity. Article 1358,like its forerunner
with the property for the benefit of the beneficiary.[23] Trust relations between parties Article 1280 of the Civil Code of Spain, does not require the accomplishment of the
may either be express or implied. An express trust is created by the intention of the acts or
trustor or of the parties. An implied trust comes into being by operation of law.[24] contracts in a public instrument in order to validate the act or contract but only to
insure its efficacy,[32] so that after the existence of said contract has been admitted,
Express trusts are created by direct and positive acts of the parties, by some the party bound may be compelled to execute the proper document. [33] But even
writing or deed, or will, or by words either expressly or impliedly evincing an intention assuming that such action was filed by petitioners, the same had already prescribed.
to create a trust.[25] Under Article 1444 of the Civil Code, "[n]o particular words are
required for the creation of an express trust, it being sufficient that a trust is clearly It is settled that only laws existing at the time of the execution of a contract
intended." The Affidavit of Epifanio is in the nature of a trust agreement. Epifanio are applicable thereto and not later statutes, unless the latter are specifically
affirmed that the lot brought in his name was co-owned by him, as one of the heirs of intended to have retroactive effect.[34] Consequently, it is the Old Code of Civil
Jose, and his uncle Tranquilino. And by agreement, each of them has been in Procedure (Act No. 190) which applies in this case since the Calig-onan sa
possession of half of the property. Their arrangement was corroborated by the Panagpalit was executed on 18 October 1939 while the New Civil Code took effect
subdivision plan prepared by Engr. Bunagan and approved by Jose P. Dans, Acting only on 30 August 1950. And section 43 of Act No. 190, like its counterpart Article
Director of Lands. 1144 of the New Civil Code, provides that action upon a written contract must be filed
within ten years.[35]
As such, prescription and laches will run only from the time the express trust
is repudiated. The Court has held that for acquisitive prescription to bar the action of
WHEREFORE, the petition is PARTIALLY GRANTED. The Decision of the Court of
the beneficiary against the trustee in an express trust for the recovery of the property
Appeals dated 30 June 2003 in CA-G.R. CV No. 65829 is REVERSED and SET ASIDE and
held in trust it must be shown that: (a) the trustee has performed unequivocal acts of
repudiation amounting to an ouster of the cestui que trust; (b) such positive acts of the Decision of the Regional Trial Court of Cebu City, Branch 9 dated 23 August 1999 is
repudiation have been made known to the cestui que trust, and (c) the evidence REINSTATED with MODIFICATION in petitioners are hereby DECLARED the absolute
thereon is clear and conclusive.[26] Respondents cannot rely on the fact that owners of one-half of Lot No. 1054 or Lot No. 1054-A under TCT No. RT-7853.The
the Torrens title was issued in the name of Epifanio and the other heirs of Jose. It has Register of Deeds of Cebu City is hereby ORDERED to CANCEL TCT No. RT-7853 in part
been held that a trustee who obtains a Torrens title over property held in trust by him and issue a new Transfer Certificate of Title to petitioners, heirs of Tranquilino Labiste,
for another cannot repudiate the trust by relying on the registration. [27] The rule covering Lot No. 1054-A. No costs.
requires a clear repudiation of the trust duly communicated to the beneficiary. The
SO ORDERED.