RULE 92 (SEC 7-9)

SECTION 7: APPRAISAL. COMPENSATION OF TRUSTEE.

When an inventory is required to be returned by a trustee, the estate and
effects belonging to the trust shall be appraised and the court may order one
or more inheritance tax appraisers to assist in the appraisement. The
compensation of the trustee shall be fixed by the court, if it be not
determined in the instrument creating the trust.

NOTE:
The compensation of the trustee is that which is provided by the instrument
creating the trust. Otherwise, it shall be fixed by the court.

SECTION 8: REMOVAL OR RESIGNATION OF TRUSTEE.

The proper Court of First Instance may, upon petition of the parties,
beneficially interested and after due notice to the trustee and hearing,
remove a trustee if such removal appears essential in the interests of the
petitioners.
The Court may also, after due notice to all persons interested, remove a
trustee who is insane or otherwise incapable of discharging his trust or
evidently unsuitable therefor.

A trustee, whether appointed by the court or under a written instrument,

may resign his trust if it appears to the court proper to allow such
resignation.

NOTE:

REQUISITES FOR REMOVAL OR RESIGNATION OF TRUSTEE:

1. Petition filed by parties beneficially interested;

2. Notice to trustee; and
3. Hearing.

Who may petition: Parties beneficially interested.

 
Grounds:
1) Removal appears essential in the interest of petitioners;
2) Insanity;
3) Incapability of discharging trust;
4) Unsuitability
NOTE:
A trustee is at liberty to tender his resignation and apply for his release on
the sole ground of unwillingness to act further in the trust. But the
acceptance of the resignation of a trustee is not a matter of course; due
regard must be had for the interest of the parties to be affected and there
must ordinarily be some ground for discharge other than the mere wish of
the trustee to be relieved.

The TRUSTEE is prohibited from acquiring the property whether by purchase,

even in a public or judicial action, either in person or through the mediation
of another. (Art. 1491, NCC)

SECTION 9: PROCEEDINGS FOR SALE OR ENCUMBRANCE OF TRUST

ESTATE.
When the sale or encumbrance of any rel or personal estate held in trust is
necessary or expedient, the court having jurisdiction of the trust may, on
petition and after due notice and hearing, order such sale or encumbrance to
be made, and the reinvestment and application of the proceeds thereof in
such manner as will best effect the objects of the trust.

The petition, notice, hearing, order of sale or encumbrance, and record or

proceedings, shall conform as nearly as may be to the provisions concerning
the sale or encumbrance by guardians of of the property of minors or other
wards.

Note:
The Rules on Sale and Encumbrance of Trust Estate shall conform as nearly
as may be to the provisions on Sale and Encumbrance by Guardians.

FULL TEXT OF THE CASE:

[G.R. No. 46345. January 30, 1990.]

RESTITUTO CENIZA and JESUS CENIZA, petitioners, vs. THE

HON. COURT OF APPEALS, MAGNO DABON, VICENTA DABON,
 TERESITA DABON, EUGENIA DABON, and TOMAS
DABON, respondents.

Vicente P. Valera and Pedro Rosito & Jesus F. Balicanta for petitioners.

Victorino U. Montecillo for respondents.

SYLLABUS

1.CIVIL LAW; CO-OWNERSHIP; AS A GENERAL RULE; PRESCRIPTION SHALL

NOT RUN IN FAVOR OF A CO-OWNER; EXCEPTION. — Since a trust relation and
co-ownership were proven to exist between the predecessors-in-interest of both
petitioners and private respondents, prescription did not run in favor of Dabon's
heirs except from the time that they repudiated the co-ownership and made the
repudiation known to the other co-owners, Restituto and Jesus Ceniza
(Cortes vs. Oliva, 33 Phil. 480). Paragraph 5 of Article 494 of the Civil Code
provides — "No prescription shall run in favor of a co-owner or co-heir against
his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-
ownership." In Custodio v. Casiano, 9 SCRA 841, we ruled that: "Where title to
land was issued in the name of a co-heir merely with the understanding that he
would act as a trustee of his sisters, and there is no evidence that this trust
relation had ever been repudiated by said trustee , it is held that a relation of co-
ownership existed between such trustee and his sisters and the right of the
successors-in-interest of said sisters to bring the present action for recovery of
their shares therein against the successors-in-interest of said trustee cannot be
barred by prescription, despite the lapse of 25 years from the date of registration
of the land in the trustee's name."

2.ID.; IMPLIED TRUST; ESTABLISHED IN THE CASE AT BAR. — The registration

of Lot No. 627 in the name of Vicente Dabon created a trust in favor of his co-
owner Jose Ceniza, and the latter's heirs. Article 1452 of the Civil Code states: "If
two or more persons agree to purchase property and by common consent the
legal title is taken in the name of one of them for the benefit of all, a trust is
created by force of law in favor of the others in proportion to the interest of
each."

3.ID.; ID.; AS A GENERAL RULE, TRUSTEE'S POSSESSION IS NOT ADVERSE AND

CANNOT RIPEN INTO TITLE BY PRESCRIPTION; ELEMENTS FOR TRUSTEE'S
ADVERSE POSSESSION. — This Court has ruled in numerous cases involving
fiduciary relations that, as a general rule, the trustee's possession is not adverse
and therefore cannot ripen into a title by prescription. Adverse possession
requires the concurrence of the following circumstances: a) that the trustee has
performed unequivocal acts of repudiation amounting to the ouster of the cestui
que trust; b) that such positive acts of repudiation have been made known to
the cestui que trust; and c) that the evidence thereon should be clear and
conclusive.

DECISION

GRIÑO-AQUINO, J  : p

This is a petition for review of the order dated October 29, 1976, of the Court of
Appeals in CA-G.R. No. 48546 entitled, "Restituto Ceniza, et al. vs. Magno
Dabon, et al.," dismissing the petitioners' complaint for reconveyance of their
shares in co-ownership property and reversing the decision of the trial court in
their favor.

On June 14, 1967, the petitioners filed against private respondents, an action in
the Court of First Instance of Cebu for recovery of their title to Lots Nos. 627-B
and 627-C (being portions of Lot No. 627 with an area of approximately 5,306
square meters) situated in Casuntingan, Mandaue, Cebu (now Mandaue City),
which originally formed part of "Hacienda de Mandaue" of the Seminario de San
Carlos de Cebu. The property is covered by reconstituted Original Certificate of
Title No. RO-10996 issued on February 8, 1939 (formerly Decree No. 694438
issued on February 27, 1934) in the name of "Vicente Dabon married to Marcela
[or Marcelina] Ceniza." (pp. 7 and 19, Record on Appeal).

Petitioners are the descendants of Manuel Ceniza while the private respondents
are the descendants of his sister, Sofia Ceniza. Sofia Ceniza was childless but she
had an adopted daughter named Flaviana Ceniza, who begot a daughter named
Marced Ceniza and who in turn had a daughter named Marcelina (or Marcela)
Ceniza who married Vicente Dabon. Private respondents are the children of this
marriage and they are the great-great-grandchildren of Sofia Ceniza. prcd

On the other hand, Manuel Ceniza had an only son, Pablo, who had two sons,
Santiago and Jose Ceniza. Petitioners Restituto and Jesus Ceniza and a certain
Nemesia Ceniza-Albina are their children and the great-grandchildren of Manuel
Ceniza.
The records disclose that when Hacienda de Mandaue was subdivided for resale
to the occupants in 1929, Jose Ceniza and Vicente Dabon, who were residing in
the hacienda, jointly purchased Lot 627 on installment basis and they agreed, for
convenience, to have the land registered in the name of Dabon. Since then, Jose
Ceniza, Vicente Dabon, and their heirs have possessed their respective portions
of the land, declared the same for taxation, paid real estate taxes on their
respective shares, and made their respective installment payments to the
Seminario de San Carlos de Cebu.

After Dabon died in 1954, his seven (7) children, named Magno, Jacinta, Tomas,
Flaviana, Soledad, Teresita and Eugenia, succeeded to his possession of a
portion of the land.

On November 4, 1961, a private land surveyor, Espiritu Bunagan, on the request

of Jacinta Dabon and Restituto Ceniza who jointly defrayed the cost, divided Lot
627 into three parts, namely:

(1)Lot No. 627-A with 3,538 square meters for Marcela Ceniza;

(2)Lot No. 627-B with 884 square meters for Restituto Ceniza; and

(3)Lot No. 627-C with 834 square meters for Nemesia Ceniza-Albina, who later
bequeathed her share to her brother, Jesus Ceniza. (p. 19, Record on Appeal).

The present controversy arose because the private respondents refused to

convey Lots Nos. 627-B and 627-C to the petitioners. They claimed that their
predecessor-in-interest, Vicente Dabon, was the sole and exclusive owner of Lot
627, by purchase from the Seminario de San Carlos de Cebu. In their answer to
the petitioners' complaint for reconveyance in June 1967, they alleged that the
petitioners' right of action had already prescribed.

Petitioners replied that Vicente Dabon held the land in trust for them, as co-
owners, hence, their action for reconveyance was imprescriptible.

On August 31, 1970, the trial court rendered judgment for the petitioners.
Finding that there existed a co-ownership among the parties, it ordered the
private respondents to execute deeds of conveyance of Lots Nos. 627-B and 627-
C in favor of the plaintiffs, Restituto and Jesus Ceniza, respectively (p. 35,
Record on Appeal).  llcd

On appeal by the defendants (now private respondents) the Court of Appeals on

October 29, 1976, reversed that decision of the trial court. It ruled that the
petitioners' right of action had prescribed after the lapse of 20 years from the
date of registration of the land on February 8, 1939 in Vicente Dabon's name (p.
32, Rollo).

The petitioners have appealed to this Court by a petition for review under Rule
45 of the Rules of Court.

The legal issue presented by the petition is whether the registration of the title of
the land in the name of one of the co-owners constituted a repudiation of the co-
ownership for purposes of acquisitive prescription.

We find merit in the petition for review.

The trial court correctly ruled that since a trust relation and co-ownership were
proven to exist between the predecessors-in-interest of both petitioners and
private respondents, prescription did not run in favor of Dabon's heirs except
from the time that they repudiated the co-ownership and made the repudiation
known to the other co-owners, Restituto and Jesus Ceniza (Cortes vs. Oliva, 33
Phil. 480).

Paragraph 5 of Article 494 of the Civil Code provides —

"No prescription shall run in favor of a co-owner or co-heir against his

co-owners or co-heirs so long as he expressly or impliedly recognizes the
co-ownership."

The registration of Lot No. 627 in the name of Vicente Dabon created a trust in
favor of his co-owner Jose Ceniza, and the latter's heirs. Article 1452 of the Civil
Code states:

"If two or more persons agree to purchase property and by common

consent the legal title is taken in the name of one of them for the
benefit of all, a trust is created by force of law in favor of the others in
proportion to the interest of each."

This Court has ruled in numerous cases involving fiduciary relations that, as a
general rule, the trustee's possession is not adverse and therefore cannot ripen
into a title by prescription. Adverse possession requires the concurrence of the
following circumstances:

a)that the trustee has performed unequivocal acts of repudiation amounting to

the ouster of the cestui que trust;
b)that such positive acts of repudiation have been made known to the cestui que
trust; and

c)that the evidence thereon should be clear and conclusive.  LexLib

The above elements are not present here for the petitioners co-owners have not
been ousted from the land. They continue to possess their respective shares of
Lot 627 and they have been paying the realty taxes thereon. Restituto's house
stands on his portion of the Land. Assuming that the private respondents'
rejection of the subdivision plan for the partition of the land was an act of
repudiation of the co-ownership, prescription had not yet set in when the
petitioners instituted the present action for reconveyance. These circumstances
were overlooked by the Court of Appeals.

In Custodio v. Casiano, 9 SCRA 841, we ruled that:

"Where title to land was issued in the name of a co-heir merely with the
understanding that he would act as a trustee of his sisters, and there
is no evidence that this trust relation had ever been repudiated by said
trustee, it is held that a relation of co-ownership existed between such
trustee and his sisters and the right of the successors-in-interest of said
sisters to bring the present action for recovery of their shares therein
against the successors-in-interest of said trustee cannot be barred by
prescription, despite the lapse of 25 years from the date of registration
of the land in the trustee's name." (Emphasis supplied.)

In Escobar v. Locsin, 74 Phil. 86, we affirmed the duty of the courts to shield
fiduciary relations "against every manner of chicanery or detestable design
cloaked by legal technicalities" and to guard against misuse of the Torrens
system "to foment betrayal in the performance of a trust."

In this case, since the statutory period of limitation within which to file an action
for reconveyance, after the defendants had repudiated the co-ownership in 1961,
had not yet run its course when the petitioners filed said action in 1967, the
action was not barred by prescription.

WHEREFORE, the decision of the Court of Appeals is hereby REVERSED AND SET
ASIDE and the decision dated August 31, 1970 of the then Court of First
Instance of Cebu, Branch VI, in Civil Case No. R-10030 is reinstated. Costs
against the private respondents.  cdrep
SO ORDERED.

Narvasa, Cruz, Gancayco and Medialdea, JJ.,  concur.

CASE DIGEST

RESTITUTO CENIZA and JESUS CENIZA vs. THE HON. COURT OF APPEALS
G.R. No. 46345. January 30, 1990

FACTS:

Jose Ceniza and Vicente Dabon jointly purchased Lot 627 on installment basis and
they agreed, for convenience, to have the land registered in the name of Dabon.
Since then, Jose Ceniza, Vicente Dabon, and their heirs have possessed their
respective portions of the land and made their respective installment payments to
the Seminario de San Carlos de Cebu.

Thereafter, Jacinta Dabon and Restituto Ceniza, one of the children of the co-
owners Jose and Vicente, subdivided the property in question into Lot 627 A, B & C.
However, private respondents Magno, Vicenta, Teresita, Eugenia and Tomas all
surnamed Dabon, children of co-owner Vicente refused to convey Lots Nos. 627-B
and 627-C to the petitioners, children of co-owner Jose Ceniza. They claimed that
their predecessor-in-interest, Vicente Dabon, was the sole and exclusive owner of
Lot 627, by purchase from the Seminario de San Carlos de Cebu and that
petitioners' right of action had already prescribed. Therefore, case was then filed at
the Court of First Instance (now, RTC) where the trial court rendered judgment for
the petitioners on the ground of the existence of co-ownership among the parties.
However, said decision was reversed by the Court of Appeals. Hence, this petition
for review under Rule 45 of the Rules of Court.

ISSUES:

1. Whether there exists an implied trust between Vicente Dabon and Jose Ceniza.

2. Whether the registration of the title of the land in the name of one of the co-
owners constituted a repudiation of the co-ownership for purposes of acquisitive
prescription.

RULING:
1. Yes. The registration of Lot No. 627 in the name of Vicente Dabon created a trust
in favor of his co-owner Jose Ceniza, and the latter's heirs. Article 1452 of the Civil
Code states: "If two or more persons agree to purchase property and by common
consent the legal title is taken in the name of one of them for the benefit of all, a
trust is created by force of law in favor of the others in proportion to the interest of
each."

2. No. In Custodio v. Casiano, 9 SCRA 841, it has been ruled that: "Where title to
land was issued in the name of a co-heir merely with the understanding that he
would act as a trustee of his sisters, and there is no evidence that this trust relation
had ever been repudiated by said trustee, it is held that a relation of co-ownership
existed between such trustee and his sisters and the right of the successors-in-
interest of said sisters to bring the present action for recovery of their shares
therein against the successors-in-interest of said trustee cannot be barred by
prescription, despite the lapse of 25 years from the date of registration of the land
in the trustee's name."

Further, the Court has ruled in numerous cases involving fiduciary relations that, as
a general rule, the trustee's possession is not adverse and therefore cannot ripen
into a title by prescription. Adverse possession requires the concurrence of the
following circumstances: a) that the trustee has performed unequivocal acts of
repudiation amounting to the ouster of the cestui que trust; b) that such positive
acts of repudiation have been made known to the cestui que trust; and c) that the
evidence thereon should be clear and conclusive.

Apparently, the foregoing is not present in this case. Hence, respondents cannot
claim title to such property on account of acquisitive prescription.