Trusts

Nakpil v. IAC - G.R. No. 74449. August 20, 1993

Facts

Petitioner Nakpil, wife of deceased Pinggoy filed an action for reconveyance with damages for breach of
trust against Valdes and Caval Realty Corp. She alleged that prior to the death of her husband, he had
requested Valdes to purchase Pulong Maulap, a real property and thereafter register the sale and hold
the title thereto in trust for him. However, Valdes concealed the information regarding the trust
agreement and instead transferred the property in the name of Caval Realy, a corporation principally
owned by him.

Issue

W/N the real property was subject to a trust agreement, a constructive trust between respondent and
deceased Pinggoy

Held

YES.

Implied trusts, which may either be resulting or constructive, are those which, without being express,
are deducible from the nature of the transaction as matters of intent, or which are superinduced on the
transaction by operation of law as matters of equity, independently of the particular intention of the
parties.

Constructive trust, under Article 1450 presupposes a situation where a person, using his own funds,
purchases a certain piece of land in behalf of another who, in the meantime, may not have sufficient
funds to purchase the land. The property is then transferred in the name of the trustee, the person who
paid for the land, until he is reimbursed by the beneficiary, the person for whom the land is purchased.
It is only after the beneficiary reimburses the trustee of the purchase price that the former can compel
conveyance of the purchased property from the latter.

Based on the letters to petitioner of Valdes, he categorically admitted that "[b]oth of these loans, while
in his name were obtained by Pinggoy (the late Nakpil) for his person. It was shown in these letters that
the loan obtained from FUB were actually secured by Pinggoy. And, while the downpayment of
P50,000.00 and the partial payment of P25,000.00 to PNB came from the personal funds of Valdes, he
considered them as advances to the late Nakpil. Otherwise, Valdes would never have deemed the
amount as "unpaid" in his letter to petitioner.

The letter of Valdes to the City Treasurer of Baguio made while remitting payment of real estate taxes is
also enlightening. It provided therein that the payment being tendered was " [o]n behalf" of the Nakpils,
which is an express recognition of the implied trust.

However, petitioner cannot as yet redeem and compel conveyance of the property. For, Valdes must still
be reimbursed for the advances he made on the disputed property.
The period within which to compel conveyance of Pulong Maulap is not imprescriptible. The rule is well-
settled that an action for reconveyance based on an implied or constructive trust prescribes in ten (10)
years.

The prescriptive period therefore did not begin to run until after he repudiated the trust. And such
repudiation came when Valdes excluded Pulong Maulap from the list of properties of the late Jose
Nakpil submitted to the intestate court 15 in 1973. Even then, the present action for conveyance was
filed in 1979 or well within the ten-year period.

Yared v. Tiongco - G.R. No. 161360. October 19, 2011

Facts

This case involves three parcels of land all located in Iloilo City. The lots were registered in the names of
Matilde, Jose, Vicente, and Felipe, and in the name of “Heirs of Maria Luis de Tiongco.”

While all of the Heirs of Maria Luis de Tiongco have died, they were survived by their children and
descendants. Among the legitimate children of Jose were petitioner and Carmelo Tiongco, the father of
respondent Jose B. Tiongco.

Sometime in 1965, petitioner built her house on one lot and sustained herself by collecting rentals from
the tenants of the other lots.

In 1983, respondent Jose prohibited petitioner from collecting rentals from the tenants. In December
1983, respondent Jose filed a suit for recovery of possession with preliminary injunction against several
tenants wherein he obtained a judgment in his favor. Respondent Jose also filed a case for unlawful
detainer with damages against petitioner as she was staying on the first lot, in which case, petitioner
prevailed. As such, respondent Jose never took possession of the properties. However, Jose averred that
he has been paying real property taxes on the said properties for more than ten (10) years and that
petitioner collected rentals only because he allowed her.

In 1988, when petitioner inquired at the Office of the Register of Deeds of Iloilo City, she discovered that
respondent Jose had already executed an Affidavit of Adjudication dated April17, 1974, declaring that he
is the only surviving heir of the registered owners and adjudicating unto himself all three lots.
Consequently, the Register of Deeds of Iloilo City issued transfer certificate of titles all in the name of
respondent Jose. It also appears that on May 10, 1974, respondent Jose sold the said lots to Catalino
Torre. The former then sold the properties to Antonio Doronila, Jr., and back again to Jose.

ISSUE:

Whether or not the petitioner’s action had been barred by prescription.

HELD:

NO. The Court agrees with the CA’s disquisition that an action for reconveyance can indeed be barred by
prescription. In a long line of cases decided by this Court, we ruled that an action for reconveyance
based on implied or constructive trust must perforce prescribe in ten (10) years from the issuance of the
Torrens title over the property.
In Alfredo v. Borras, 404 SCRA 145 (2003), the Court ruled that prescription does not run against the
plaintiff in actual possession of the disputed land because such plaintiff has a right to wait until his
possession is disturbed or his title is questioned before initiating an action to vindicate his right. His
undisturbed possession gives him the continuing right to seek the aid of a court of equity to determine
the nature of the adverse claim of a third party and its effect on his title. The Court held that where the
plaintiff in an action for reconveyance remains in possession of the subject land, the action for
reconveyance becomes in effect an action to quiet title to property, which is not subject to prescription.

Double Sale

Radiowealth Finance Co. v. Palileo - G.R. No. 83 defendant spouses Enrique Castro and Herminia R.

In 1970, Castro sold to plaintiff-appellee Manuelito Palileo (private respondent herein), a parcel of
unregistered coconut land situated in Surigao del Norte. The sale is evidenced by a notarized Deed of
Absolute Sale. The deed was not registered in the Registry of Property for unregistered lands in the
province of Surigao del Norte. Since the execution of the deed of sale, appellee Manuelito Palileo who
was then employed at Lianga, Surigao del Sur acts of ownership over the land through his mother
Rafaela Palileo, as administratrix or overseer. Appellee has continuously paid the real estate taxes on
said land from 1971 until the present.

In 1976, a judgment was rendered against defendant Castro in a Civil Case which resulted to the levying
of the subject land by the sheriff, and thereafter, its sale in a public auction in favor of Radiowealth. Both
the certificate of sale and the deed of final sale were registered with the Registry of Deeds.

Learning of what happened to the land, private respondent Manuelito Palileo filed an action for quieting
of title over the same.

Issue

Who has the better title over the subject land?

Held

The respondent. Article 1544 of the Civil Code cannot be invoked to benefit the purchaser at the
execution sale though the latter was a buyer in good faith and even if this second sale was registered. It
was explained that this is because the purchaser of unregistered land at a sheriff's execution sale only
steps into the shoes of the judgment debtor, and merely acquires the latter's interest in the property
sold as of the time the property was levied upon. Applying this principle, the Court of Appeals correctly
held that the execution sale of the unregistered land in favor of petitioner is of no effect because the
land no longer belonged to the judgment debtor as of the time of the said execution sale.

Note:

Article 1544 of the Civil Code provides that in case of double sale of an immovable property, ownership
shall be transferred: (1) to the person acquiring it who in good faith first recorded it in the Registry of
Property; (2) in default thereof, to the person who in good faith was first in possession; and (3) in
default thereof, to the person who presents the oldest title, provided there is good faith.

Balatbat v. CA - G.R. No. 109410. August 28, 1996

Aurelio A. Roque filed a complaint for partition against her children Corazon Roque, Alberto de los
Santos, Feliciano Roque, Severa Roque and Osmundo Roque, which was held in his favor. Thus, the
Register of Deeds of Manila issued a Transfer Certificate of Title in their names, Aurelio with 6/10 share
while the rest is divided among his children.

Aurelio sold his share to Sps. Repuyan, who later on caused the annotation of their adverse claim on the
title. Later, Aurelio filed a complaint for rescission of the sale for failure of the spouses to pay the
balance.

In the meantime, Aurelio and his children sold the same property to Balatbat. Upon motion, Balatbat
was granted possession of said property, subject to interest of third persons.

Going back to the rescission case, the trial court dismissed the complaint. Balatbat thus filed a notice of
lis pendens on the title of the property. She also filed a complaint for delivery of owner’s TCT against
Sps. Repuyan.

Issue

W/N there was a double sale.

Held

The sale to Sps Repuyan is deemed consummated. Examining the terms and conditions of the "Deed of
Sale", the balance is payable only "after the property has been partitioned and subdivided, and title
issued in the name of the BUYER" hence, vendor Roque cannot demand payment of the balance unless
and until the property has been subdivided and titled in the name of the private respondents. Absent a
stipulation that "ownership in the thing shall not pass to the purchaser until he has fully paid the price",
ownership in the thing shall pass from the vendor to the vendee upon actual or constructive delivery of
the thing sold even if the purchase price has not yet been fully paid. Non-payment only creates a right to
demand the fulfillment of the obligation or to rescind the contract.

When the sale is made through a public instrument, the execution thereof shall be equivalent to the
delivery of the thing which is the object of the contract, if from the deed the contrary does not appear
or cannot be inferred.

In the instant case, vendor Roque delivered the owner's certificate of title to herein private respondent.
It is not necessary that vendee be physically present at every square inch of the land bought by him,
possession of the public instrument of the land is sufficient to accord him the rights of ownership.

This is an instance of a double sale of an immovable property hence, the ownership shall vests in the
person acquiring it who in good faith first recorded it in the Registry of Property. Evidently, private
respondents Repuyan's caused the annotation of an adverse claim on the title of the subject property .
The annotation of the adverse claim on TCT in the Registry of Property is sufficient compliance as
mandated by law and serves notice to the whole world.

The petitioner cannot be regarded as a purchaser in good faith. If petitioner did investigate before
buying the land, she should have known that there was a pending case and an annotation of adverse
claim was made in the title of the property before the Register of Deeds and she could have discovered
that the subject property was already sold to the private respondents.