merely entrusted the property to her father.
The
SOLEDAD CAÑEZO vs. CONCEPCION
ROJAS
G.R. No. 148788, November 23, 2007
NACHURA, J.
The subject property is an unregistered land
situated at Naval, Biliran. Petitioner Soledad
Cañezo is the step daughter of respondent
Concepcion Rojas.
Petitioner Soledad – filed a complaint in 1997 for
the recovery of the subject real property. She
alleged that she bought such parcel of land in 1939
from Crisogono Limpiado, although the sale was
not reduced into writing. Thereafter, she
immediately took possession of the property.
In 1948, she and her husband left for Mindanao and
entrusted the said land to her father, Crispulo
Rojas, who took possession of, and cultivated the
property. In 1980, she found out that the
respondent, Concepcion Rojas, her stepmother,
was in possession of the property and was
cultivating the same. She also discovered that the
tax declaration over the property was already in the
name of his father.
Respondent Concepcion - claimed that it was
her husband who bought the property from
Limpiado, which accounts for the tax declaration
being in Crispulo’s name.
MTC - rendered a decision in favor of the
petitioner Soledad, making her the real and lawful
owner of the land.
RTC - reversed the MTC decision on the ground
that the action had already prescribed and
acquisitive prescription had set in.
Motion for reconsideration: the RTC amended
its original decision and held that the action had
not yet prescribed considering that the petitioner
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
from the property.
CA - reversed the amended decision of the RTC.
Hence, this petition for review.
The petitioner insists that her right of action to
recover the property cannot be barred by
prescription or laches even with the respondent’s
uninterrupted possession of the property for 49
years because there existed between her and her
father an express trust or a resulting trust.
ISSUE:
Whether or not there is an existence of trust over
the property – express or implied – between the
petitioner and her father.
RULING:
NONE.
In ruling the case, the Supreme Court discussed
the different kinds of trust since it is a rule that in
express trusts and resulting trusts, a trustee cannot
acquire by prescription a property entrusted to
him unless he repudiates the trust. Further, it is a
rule that if no trust relations 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 accordance with Act No. 190
(Code of Civil Procedure). Under Section 40 of
Act No. 190, an action for recovery of real
property, or of an interest therein, can be brought
only within ten years after the cause of action
accrues.
A trust is the legal relationship between one
person having an equitable ownership of property
and another person owning the legal title to such
property, the equitable ownership of the former
entitling him to the performance of certain duties
and the exercise of certain powers by the latter.
1
Either express or implied.
(a) 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 create a trust.
- As a rule, however, the burden of proving the
existence of a trust is on the party asserting its
existence.
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) the trust res, consisting of duly identified and
definite real properties; and
(4) the cestui que trust, or beneficiaries whose
identity must be clear.
Accordingly, it was incumbent upon petitioner to
prove the existence of the trust relationship. It
must be proven by some writing or deed. And
petitioner sadly failed to discharge that burden.
The petitioner testified only to the effect that her
agreement with her father was that she will be
given a share in the produce of the property
(b) Implied trusts are those which, without being
expressed, are deducible from the nature of the
transaction as matters of intent or, independently,
of the particular intention of the parties, as being
superinduced on the transaction by operation of
law basically by reason of equity.
(1) 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 found in the
nature of their transaction although not expressed
in a deed or instrument of conveyance.
- 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 trust
was intended.
(2) Constructive trust
- is one created not by any word or phrase, either
expressly or impliedly, evincing a direct intention
to create a trust, but one 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. 

- Assuming that there is
constructive trust in this case, prescription
may supervene even if 
 the trustee does
not repudiate the relationship.
Necessarily, repudiation of the said trust
is not a condition precedent to the
running of the prescriptive period.
Thus, the Supreme Court ruled that there was no
express trust or implied trust established between
the petitioner and her father. In the absence of a
trust relation, the court can only conclude that
Crispulo’s uninterrupted possession of the subject
property for 49 years, coupled with the
performance of acts of ownership, such as
payment of real estate taxes, ripened into
ownership.
[G.R. No. 116211. March 7,
1997]
 MEYNARDO POLICARPIO,
petitioner,
 vs.
 COURT OF APPEALS and
ROSITO PUECHI S. UY, respondents.
DOCTRINE:
Implied trusts are those which, without being
expressed, are deducible from the nature of the
transaction by operation of law as matters of
equity, independently of the particular intention of
the parties.
FACTS:
The Petitioner, Meynardo Policarpio (with co-
plaintiffs in antecedent cases: Rodolfo Gayatin,
Jose Villacin and Jocelyn Montinola) and private
2
respondent, Rosito Uy were former tenants of the
30-door Barretto Apartments formerly owned by
Serapia Realty, Inc. Sometime in April 1984,
private respondent was elected President of the
Barretto Tenants Association which was formed
"to promote, safeguard and protect the general
interest and welfare of its members." In a letter
dated July 30, 1984, private respondent as
president sought the assistance of the then
Minister of Human Settlements to cause the
expropriation of the subject property under the
Urban Land Reform Program for resale to its
tenants.
Failing to get the assistance of the government,
the tenants undertook to negotiate directly with
the owners of the Barretto Apartments. On July
27, 1985, Serapia Real Estate, Inc., sent a letter to
respondent to inform that they are offering to sell
the said property at a price of P4,500,000.00.
While, Serapia Realty, Inc. sent to spouses Gayatin
a letter for the first priority to purchase the same.
Thereafter, petitioner and his co-plaintiffs were
notified that private respondent was the new
owner of the apartment units. Believing that they
had been betrayed by their Association president,
petitioner sued for "Redemption and Damages
with Prayer For Preliminary Injunction." The trial
court favored plaintiffs. The CA reversed the
decision and denied the subsequent motion for
reconsideration. Hence, this petition.
ISSUE:
 WON implied trust was created by the
agreement between the petitioner and the
respondent. HELD:
Yes, the court hold that implied trust existed.
Implied trusts are those which, without being
expressed, are deducible from the nature of the
transaction by operation of law as matters of
equity, independently of the particular intention of
the parties. Constructive trusts are created in order
to satisfy the demands of justice and prevent
unjust enrichment. They arise against one who, by
fraud, duress or abuse of confidence, obtains or
holds the legal right to property which he ought
not, in equity and good conscience, to hold.
It is not necessary that the intention of the tenants
to purchase their apartments units be categorically
stated in the purposes of their Association.
A constructive trust as invoked by
petitioner can be implied from the nature of the
transaction as a matter of equity, regardless of the
absence of such intention in the purposes of their
Association.
During his negotiations with Serapia Realty, Inc.,
private respondent admitted that he was not only
representing himself but also the other tenants as
president of the Association. This admission
recognized the confidence reposed in him by his
co-tenants and private respondent violated the
same.
Alfonso Barretto, president of Serapia Real Estate
Corporation, testified that the owners wanted to
deal with one "spokesman." Hence, the tenants
authorized private respondent to negotiate on
their behalf. Unfortunately, private respondent
negotiated for himself only, and successfully
purchased eight (8) apartment units and secured
an authority to sell the remaining twenty-two (22)
units.
Private respondent alleges that, after being
informed by the owner, petitioner, together with
the latter's co-plaintiffs in the action for
redemption, did not want to contribute funds to
redeem the encumbered apartment. (Such
redemption was required before the units could be
sold.)
If only the tenants had been informed by private
respondent of this predicament of the owners,
surely they would have raised the required amount
to redeem the property and, in turn, acquired the
units being rented by them. The incriminating
admission of private respondent that he had not
informed the plaintiffs in the redemption case of
the prices at which the apartment units were sold
demonstrated beyond cavil his betrayal of their
trust
The tenants could not be faulted for not inquiring
into the status of private respondent's negotiation
with the owners of the apartments. They had a
right to expect private respondent to be true to his
duty as their representative and to take the
initiative of informing them of the progress of his
negotiations.
3
Having concluded that private respondent willfully
violated the trust reposed in him by his co-tenants,
we consider it a serious matter of "justice,
morality, conscience and fair dealing" that he
should not be allowed to profit from his breach of
trust. "Every person who through an act of
performance by another, or any other means,
acquires or comes into possession of something at
the expense of the latter without just or legal
ground, shall return the same to him." 35 Thus,
petitioner is granted the opportunity to purchase
the property which should have been his long ago
had private respondent been faithful to his trust.
We only regret that we cannot grant the same
opportunity to the other beneficiaries or cestuis que
trust for their failure to perfect their petitions for
review of the respondent Court's Decision.
WHEREFORE, the petition is hereby
GRANTED.
LINA PEÑALBER, Petitioner,
vs.
QUIRINO RAMOS, LETICIA PEÑALBER,
and BARTEX INC., Respondents.
Facts:
Petitioner Lina Peaber is the mother of
respondent Leticia and the mother-in-law of
respondent Quirino, husband of Leticia.
Respondent Bartex, Inc., on the other hand, is a
domestic corporation which bought from
respondent spouses Ramos one of the two
properties involved in this case.
Firstly, petitioner alleged in her Complaint that
she was the owner of a parcel of land situated in
Ugac Norte, Tuguegarao, Cagayan, registered in
petitioners name. A residential house and a
warehouse were constructed on the said parcel of
land which petitioner also claimed to own.
Petitioner averred that in the middle part of 1986,
she discovered that her title to the properties was
cancelled and a new one was issued under the
name of the spouses. Allegedly it was because of a
fictitious deed of donation that she executed in
favor of the spouses. According to her, she
confronted the spouses Ramos. The spouses being
guilty, offered 1 million in as payment, which
petitioner agreed. However, petitioner suddently
discovered that the said property was sold to
Baxter Inc. despite her warnings and
disagreements thereto.
As to her Second cause of action, petitioner
claimed that she owned and operated a hardware
store, situated in a building owned by her,
however, the land on which such building is
situated was rented out from Maria Mendoza.
Petitioner argues that sometime, she offered the
management of the hardware store to the spouses
on the agreement that, the spouses shall facilitate
the purchase of the lot being rented, which funds
shall come from the earnings of the hardware.
She also agreed that title to the property shall be
placed in the name of the spouses in order for
them to secure a loan for the expansion of the
hardware. There was no contract or written
agreement between petitioner and the spouses.
Petitioner prays that the title to the said properties
be issued in her favor, being the true owner
thereof. Trial of the case thereafter ensued. The
RTC ruled that petitioner, on her argument that
her signature in the deed of donation was forged,
failed to overcome the presumption of its due
execution, the deed being notarized.
As to the second cause of action, the RTC ruled in
her favor and declared that the property and
hardware is indeed her own.
On 24 July 2000, respondent spouses Ramos
elevated their case to the Court of Appeals, insofar
as the ruling of the RTC on petitioners second
cause of action was concerned. The appeal was
docketed as CA-G.R. CV No. 69731.
On 15 December 2006, the Court of Appeals
rendered the assailed Decision in favor of
respondent spouses Ramos.
Issue:
(1) whether the existence of a trust agreement
between her and respondent spouses Ramos was
clearly established, and (2) whether such trust
4
agreement was valid and enforceable.
Held:
In its technical legal sense, a trust is defined as the
right, enforceable solely in equity, to the beneficial
enjoyment of property, the legal title to which is
vested in another, but the word trust is frequently
employed to indicate duties, relations, and
responsibilities which are not strictly technical
trusts. A person who establishes a trust is called
the trustor; one in whom confidence is reposed is
known as the trustee; and the person for whose
benefit the trust has been created is referred to as
the beneficiary.There is a fiduciary relation
between the trustee and the beneficiary (cestui que
trust) as regards certain property, real, personal,
money or choses in action.
Trusts are either express or implied. Express trusts
are created by the intention of the trustor or of
the parties. Implied trusts come into being by
operation of law.Express trusts are those which
are created by the direct and positive acts of the
parties, by some writing or deed, or will, or by
words either expressly or impliedly evincing an
intention to create a trust. No particular words are
required for the creation of an
The petition, is denied.
express trust, it being sufficient that a trust is
clearly intended. However, in accordance with
Article 1443 of the Civil Code, when an express
trust concerns an immovable property or any
interest therein, the same may not be proved by
parol or oral evidence.
From the allegations of the petitioners Complaint
in Civil Case No. 3672, the alleged verbal trust
agreement between petitioner and respondent
spouses Ramos is in the nature of an express trust
as petitioner explicitly agreed therein to allow the
respondent spouses Ramos to acquire title to the
Bonifacio property in their names, but to hold the
same property for petitioners benefit. Given that
the alleged trust concerns an immovable property,
however, respondent spouses Ramos counter that
the same is unenforceable since the agreement was
made verbally and no parol evidence may be
admitted to prove the existence of an express trust
concerning an immovable property or any interest
therein.
On this score, we subscribe to the ruling of the
RTC in its Order dated 17 July 2000 that said
spouses were deemed to have waived their
objection to the parol evidence as they failed to
timely object when petitioner testified on the said
verbal agreement. The requirement in Article 1443
that the express trust concerning an immovable or
an interest therein be in writing is merely for
purposes of proof, not for the validity of the trust
agreement.
Therefore, the said article is in the nature of a
statute of frauds. The term statute of frauds is
descriptive of statutes which require certain classes
of contracts to be in writing. The statute does not
deprive the parties of the right to contract with
respect to the matters therein involved, but merely
regulates the formalities of the contract necessary
to render it enforceable.
The effect of non-compliance is simply that no
action can be proved unless the requirement is
complied with. Oral evidence of the contract will
be excluded upon timely objection. But if the
parties to the action, during the trial, make no
objection to the admissibility of the oral evidence
to support the contract covered by the statute, and
thereby permit such contract to be proved orally,
it will be just as binding upon the parties as if it
had been reduced to writing.
A careful perusal of the records of the case reveals
that respondent spouses Ramos did indeed fail to
interpose their objections regarding the
admissibility of the afore-mentioned testimonies
when the same were offered to prove the alleged
verbal trust agreement between them and
petitioner. Consequently, these testimonies were
rendered admissible in evidence. Nevertheless,
while admissibility of evidence is an affair of
logic and law, determined as it is by its
relevance and competence, the weight to be
given to such evidence, once admitted, still
[47]
depends on judicial evaluation. Thus,
despite the admissibility of the said testimonies,
the Court holds that the same carried little weight
in proving the alleged verbal trust agreement
5
between petitioner and respondent spouses. CASE: Rizal Surety vs CA Citation: G.R. No.
96727 August 28, 1996
Petitioners allegations as to the existence of an
express trust agreement with respondent spouses RIZAL SURETY & INSURANCE
Ramos, supported only by her own and her son COMPANY, petitioner, vs. COURT OF
Johnsons testimonies, do not hold water. APPEALS and TRANSOCEAN
TRANSPORT CORPORATION,
As correctly ruled by the Court of Appeals, a respondents.
resulting difference of P116,946.15 in the
beginning inventory of the stocks of the hardware FACTS:
store (before management was transferred to
respondent spouses Ramos) and the second The Reparations Commission
inventory thereof (after management was returned (REPACOM) sold to Transocean
to petitioner), by itself, is not conclusive proof 
 Transport Corporation the vessel 'M/V
that the said amount was used to pay the purchase
price of the Bonifacio property, such as would TRANSOCEAN 
 SHIPPER'. 

make it the property of petitioner held merely in
trust by respondent spouses Ramos.Such a The vessel was insured with
conclusion adopted by the RTC is purely Rizal Surety & Insurance 
 Company for
speculative and non sequitur.
US$3,500,000.00, with stipulated value in
The resulting difference in the two inventories 
 Philippine Currency of P23,763,000.00.
might have been caused by other factors and the


same is capable of other interpretations (e. g., that
the amount thereof may have been written off as
business losses due to a bad economic condition, The policies named
or that the stocks of the store might have been REPACOM and Transocean the insured.
damaged or otherwise their purchase prices have 

increased dramatically, etc.), the exclusion of
which rested upon the shoulders of petitioner Subsequently, Rizal Surety
alone who has the burden of proof in the instant reinsured the vessel with a foreign
case. This petitioner miserably failed to do.

 insurance firm. 

The fact that respondent spouses Ramos never
denied the P116,946.15 difference, or that they Sometime in Feb 1975, during
failed to present proof that they indeed used the the effectivity of the marine 
 insurance
said amount to pay the other obligations and policies, the vessel 'M/V
liabilities of petitioner is not sufficient to discharge
petitioners burden to prove the existence of the TRANSOCEAN SHIPPER' 
 was lost in
alleged express trust agreement. the Mediterranean Sea. 


WHEREFORE, premises considered, the instant The insured filed claims

Petition for Review on Certiorari under Rule 45 of against Rizal Surety for the insurance
the Rules of Court is hereby DENIED. The
assailed Decision of the Court of Appeals in CA- 
 proceeds. 

G.R. CV No. 69731 dated 15 December 2006 is
hereby AFFIRMED. Costs against petitioner. On November 18, 1975,
Transocean and REPACOM requested

 Rizal Surety to pay the insurance
proceeds in their joint names, despite
problems regarding the amount of their

6
 respective claims. 
 Art. 1441. Trusts are either express or implied.
On January 1976, Rizal Surety
informed Transocean and REPACOM
that the entire insurance proceeds for the
loss of the vessel (both from local
insurance companies and reinsurers and
from the foreign insurer) had been
deposited with Prudential Bank. 

Transocean and REPACOM
entered into a partial compromise
agreement and agreed to divide and
distribute the insurance proceeds in such
a manner that each would receive as its
initial share thereof that portion not
disputed by the other party (thus,
REPACOM — US$434,618.00, and
private respondent — US$1,931,153.00).
The balance in dispute would
continue to be kept in the same bank
account in trust for Transocean and
REPACOM unless the parties otherwise
agree to transfer said balance to another
bank account.
ISSUE: WON a trust relationship exists
between Transocean and Rizal Surety.
YES (an express trust, in particular) 
 Rizal Surety continued holding on to the deposit
HELD:
 What is a trust?
 It is basic in law
that a trust is the right, enforceable solely
in equity, to the beneficial enjoyment of
property, the legal title to 

which is vested in another. It is a fiduciary
relationship concerning property which obliges a
person holding it (i.e., the trustee) to deal with the
property for the benefit of another (i.e. the
beneficiary).
Express trusts are created by direct and positive
acts of the parties, by some writing or deed, or
will, or by words either expressly or impliedly
evincing an intention to create a trust.
Express trusts are created by the intention of the
trustor or of the parties. . . .
Art. 1444. No particular words are required for
the creation of an express trust, it being sufficient
that a trust is clearly intended.
Indicia that trust exists in this case
The evidence on record is clear that Rizal Surety
held on to the dollar balance of the insurance
proceeds because (1) Transocean and REPACOM
requested it to do so as they had not yet agreed on
the amount of their respective claims, and the
Final Compromise Agreement was yet to be
executed, and (2) they had not, prior to
January 31, 1977, signed the Loss and Subrogation
Receipt (I don’t know unsa ni) in favor of Rizal
Surety.
Rizal Surety never claimed ownership over the
funds in said deposit. In fact, it made several
tenders of payment to Transocean and
REPACOM, albeit the latter declined to accept
since the dispute as to their respective claims
could not yet be resolved at that time.
By its own allegation, Rizal Surety held on to the
dollar balance of the insurance proceeds to protect
its interest, as it was not yet granted the right of
subrogation over the total loss of the vessel. As
for the benefit of Transocean and REPACOM,
Rizal Surety obviously recognized its fiduciary
relationship with said parties. This is the essence
of the trust flowing from the communications of
petitioner.
Elements of an express trust
1) Competent trustor; 

2) Competent trustee; 

3) An ascertainable trust res; and 

4) Sufficient certain beneficiaries. 

7

A declaration of terms is essential, and these must
be stated with reasonable certainty in order that
the trustee may administer, and that the court, if
called upon so to do, may enforce, the trust. There
must also be some power of administration other
than a mere duty to perform a contract although
the contract is for a third-party beneficiary.
All elements are present in this case
Undeniably, all the elements are present in the
instant case.
As to Rizal Surety’s argument that it was never a
party to the Partial Compromise Agreement:
 It
is unavailing, since, upon being furnished a copy
of the same, it undoubtedly became aware that the
parties to said agreement considered it as their
trustee in respect of said dollar balance. Yet, no
manifest objection was made, but it instead
proceeded to accept its role and responsibility as
such trustee by implementing the compromise
agreement. Equally as significant, it never
committed any act amounting to an unequivocal
repudiation of its role as trustee.
Petitioner's desperate attempt to establish a viable
defense by way of its allegation that no fiduciary
relationship could have existed because of the
joint insured's adversary positions with respect to
the insurance proceeds deserves scant
consideration. The so-called adversary positions of
the parties had no effect on the trust as it never
changed the position of the parties in relation to
each other and to the dollar proceeds, i.e.,
petitioner held it for private respondent and
REPACOM, which were the real owners of the
money.
G.R. No. 117228 June 19, 1997 RODOLFO
MORALES, represented by his heirs, and
PRISCILA MORALES, petitioners, vs.
COURT OF APPEALS (Former Seventeenth
Division), RANULFO ORTIZ, JR., and
ERLINDA ORTIZ, respondents.
FACTS:
The evidence adduced by the Plaintiffs discloses
that the Plaintiffs are the absolute and exclusive
owners of the premises in question having
purchased the same from Celso Avelino. They later
caused the transfer of its tax declaration in the
name of the female plaintiff and paid the realty
taxes thereon. Celso Avelino (Plaintiffs'
predecessor in interest) purchased the land in
question consisting of two adjoining parcels while
he was still a bachelor and the City Fiscal of
Calbayog City from Alejandra Mendiola and Celita
Bartolome, through a "Escritura de Venta".
After the purchase, he caused the transfer of the tax
declarations of the two parcels in his name as well
as consolidated into one the two tax declarations in
his name. With the knowledge of the Intervenor
and the defendant, Celso Avelino caused the survey
of the premises in question, in his name, by the
Bureau of Lands. He also built his residential house
therein with Marcial Aragon (now dead) as his
master carpenter who was even scolded by him for
constructing the ceiling too low. When the two-
storey residential house was finished, he took his
parents, Rosendo Avelino and Juana Ricaforte, and
his sister, Aurea, who took care of the couple, to
live there until their deaths.
He also declared this residential house in his tax
declaration to the premises in question and paid the
corresponding realty taxes, keeping intact the
receipts which he comes to get or Aurea would go
to Cebu to give it to him. After being the City Fiscal
of Calbayog, Celso Avelino became an Immigration
Officer and later as Judge of the Court of First
Instance in Cebu with his sister, Aurea, taking care
of the premises in question.
While he was already in Cebu, the defendant,
without the knowledge and consent of the former,
constructed a small beauty shop in the premises in
question. Inasmuch as the Plaintiffs are the
purchasers of the other real properties of Celso
Avelino, one of which is at Acedillo (now Sen. J.D.
Avelino) street, after they were offered by Celso
Avelino to buy the premises in question, they
examined the premises in question and talked with
the defendant about that fact, the latter encouraged
them to purchase the premises in question rather
than the property going to somebody else they do
not know and that he will vacate the premises as
soon as his uncle will notify him to do so. Thus,
8
they paid the purchase price and Exh. "C" was
executed in their favor. However, despite due
notice from his uncle to vacate the premises in
question, the defendant refused to vacate or
demolish the beauty shop unless he is reimbursed
P35,000.00 for it although it was valued at less than
P5,000.00. So, the Plaintiffs demanded, orally and
in writing to vacate the premises. The defendant
refused. As the plaintiffs were about to undertake
urgent repairs on the dilapidated residential
building, the defendant had already occupied the
same, taking in paying boarders and claiming
already ownership of the premises in question, thus
they filed this case.
Plaintiffs, being the neighbors of Celso Avelino, of
their own knowledge are certain that the premises
in question is indeed owned by their predecessor-
in-interest because the male plaintiff used to play in
the premises when he was still in his teens while the
female plaintiff resided with the late Judge Avelino.
Besides, their inquiries and documentary evidence
shown to them by Celso Avelino confirm this fact.
Likewise, the defendant and Intervenor did not
reside in the premises in question because they
reside respectively in Brgy. Tarobucan and Brgy.
Trinidad (Sabang), both of Calbayog City with their
own residential houses there. Due to the damages
they sustained as a result of the filing of this case,
the plaintiffs are claiming P50,000.00 for mental
anguish; monthly rental of the premises in question
of P1,500.00 starting from March 1987; litigation
expenses of P5,000.00 and P10,000.00 for
Attorney's fees.
ISSUE: Whether or not the property acquired is a
trust property?
RULING:
NO. A trust is the legal relationship between one
person having an equitable ownership in property
and another person owning the legal title to such
property, the equitable ownership of the former
entitling him to the performance of certain duties
and the exercise of certain powers by the latter.
The characteristics of a trust are: It is a relationship;
it is a relationship of fiduciary character; it is a
relationship with respect to property, not one
involving merely personal duties; it involves the
existence of equitable duties imposed upon the
holder of the title to the property to deal with it for
the benefit of another; and it arises as a result of a
manifestation of intention to create the
relationship.
Trusts are either express or implied. Express trusts
are created by the intention of the trustor or of the
parties, while implied trusts come into being by
operation of law, either through implication of an
intention to create a trust as a matter of law or
through the imposition of the trust irrespective of,
and even contrary to, any such intention. In turn,
implied trusts are either resulting or constructive
trusts.
Resulting trusts are based on the equitable doctrine
that valuable consideration and not legal title
determines the equitable title or interest and are
presumed always to have been contemplated by the
parties. They arise from the nature or
circumstances of the consideration involved in a
transaction whereby one person thereby becomes
invested with legal title but is obligated in equity to
hold his legal title for the benefit of another. On the
other hand, constructive trusts are created by the
construction of equity in order to satisfy the
demands of justice and prevent unjust enrichment.
They arise contrary to intention against one who,
by fraud, duress or abuse of confidence, obtains or
holds the legal right to property which he ought
not, in equity and good conscience, to hold.
A resulting trust is exemplified by Article 1448 of
the Civil Code, which reads:
Art. 1448. There is an implied trust when property
is sold, and the legal estate is granted to one party
but the price is paid by another for the purpose of
having the beneficial interest of the property. The
former is the trustee, while the latter is the
beneficiary. However, if the person to whom the
title is conveyed is a child, legitimate or
illegitimate, of the one paying the price of the sale,
no trust is implied by law, it being disputably
presumed that there is a gift in favor of the child.
The trust created under the first sentence
of Article 1448 is sometimes referred to
9
 as a purchase money resulting trust. 17 The
trust is created in order to effectuate what
the law presumes to have been the
intention of the parties in the
circumstances that the person to whom
the land was conveyed holds it as trustee
for the person who supplied the purchase
money. 18
To give rise to a purchase money resulting trust, it
is essential that there be:
1. an actual payment of money, property or
services, or an equivalent, constituting valuable
consideration;
2. and such consideration must be furnished by
the alleged beneficiary of a resulting trust. 19
There are recognized exceptions to the
establishment of an implied resulting trust. The
first is stated in the last part of Article 1448 itself.
Thus, where A pays the purchase money and title
is conveyed by absolute deed to A's child or to a
person to whom A stands in loco parentis and who
makes no express promise, a trust does not result,
the presumption being that a gift was intended.
Another exception is, of course, that in which an
actual contrary intention is proved. Also where the
purchase is made in violation of an existing statute
and in evasion of its express provision, no trust
can result in favor of the party who is guilty of the
fraud.
As a rule, the burden of proving the existence of a
trust is on the party asserting its existence, and
such proof must be clear and satisfactorily show
the existence of the trust and its elements. 21 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 made to rest on loose, equivocal or
indefinite declarations. Trustworthy evidence is
required because oral evidence can easily be
fabricated. 23
In the instant case, petitioners' theory is that
Rosendo Avelino owned the money for the
purchase of the property and he requested Celso,
his son, to buy the property allegedly in trust for
the former. The fact remains, however, that title to
the property was conveyed to Celso. Accordingly,
the situation is governed by or falls within the
exception under the third sentence of Article
1448, which for convenience we quote:
. . . However, if the person to whom the title is
conveyed is a child, legitimate or illegitimate, of
the one paying the price of the sale, no trust is
implied by law, it being disputably presumed that
there is a gift in favor of the child. (Emphasis
supplied).
On this basis alone, the case for petitioners must
fall. The preponderance of evidence, as found by
the trial court and affirmed by the Court of
Appeals, established positive acts of Celso Avelino
indicating, without doubt, that he considered the
property he purchased from the Mendiolas as his
exclusive property. He had its tax declaration
transferred in his name, caused the property
surveyed for him by the Bureau of Lands, and
faithfully paid the realty taxes. Finally, he sold the
property to private respondents.
The theory of implied trust with Celso Avelino as
the truster and his parents Rosendo Avelino and
Juan Ricaforte as trustees is not even alleged,
expressly or impliedly, in the verified Answer of
Rodolfo Morales nor in the Answer in
Intervention of Priscila A. Morales. 25 In the
former, Rodolfo alleged that:
A. [T]he lot and the two-storey building in
question . . . which are actually possessed by
Rodolfo Morales, defendant herein, and by his
parents — Priscila A. Morales and Cesar Morales
— and consequently, the ones now in litigation in
the above-entitled case, were originally and
exclusively owned and possessed by his
grandparents-Rosendo Avelino and Juana
Ricaforte;
B. [S]laid lot, together with an old house then
thereon, were (sic) acquired by said couple —
Rosendo Avelino and Juana Ricaforte — on July
8, 1948, which they right away possessed
exclusively in the concept of owner; 26
Priscila, on her part, merely reiterated the
foregoing allegations in subparagraphs A
10
 and B of paragraph 2 of her Answer in
Intervention. 27
Rodolfo and Priscila likewise even failed to
suggest in their respective Special and Affirmative
Defenses that Celso Avelino held the property in
trust despite Rodolfo's claim that:
4. [T]he alleged sale by Celso Avelino alone of the
properties in question in favor of plaintiff Erlinda
Ortiz and the alleged TD-47606 in the name of
Erlinda Ortiz, were clandestine, fraudulent, null
and void because, first, said documents cover the
entire properties in question of the late Rosendo
Avelino and Juana Ricaforte; second, only Celso
Avelino sold the entire properties, without the
knowledge and consent of said Priscila A.
Morales, Trinidad A. Cruz and Concepcion E.
Peralta — children and heirs of said Rosendo
Avelino and Juana Ricaforte; and, third, said
documents were also made without the knowledge
and consent of defendant Rodolfo Morales who
has prior and legal possession over the properties
in question and who is a builder in good faith of
the shop building thereon.
Not surprisingly, Priscila merely restated
these allegations in paragraph 2 of her
Special and Affirmative Defenses. If truly
they were convinced that Celso Avelino
acquired the property in trust for his
parents, it would have been far easier for
them to explicitly state such fact. 29
The separate Answers of Rodolfo and Priscila do
not likewise allege that Celso Avelino committed
any breach of the trust by having the property
declared in his name and paying the realty taxes
thereon and by having the lot surveyed by the
Bureau of Lands which gave it a lot number: Lot
1949. 30 Even more telling is that in the Pre-Trial
Order 31 of the trial court, petitioners did not
claim the existence of an implied trust; the parties
merely agreed that the main issues were:
a. Who is the owner of the
premises in question?
b. Who is entitled to the
possession thereof?
Yet, petitioners now want us to reverse the rulings
of the courts below that Celso Avelino was the
absolute and exclusive owner of the property in
question, on strength of, primarily, their "implied
trust" theory. The problem with petitioners is that
they entirely forgot that the trial court and the
Court of Appeals did not base their rulings on this
alone. As shown earlier, the trial court pointed out
numerous other flaws in petitioners' theory, such
as laches. Then, too, the rule is settled that the
burden of proving the existence of a trust is on
the party asserting its existence and that such
proof must be clear and satisfactory. 32 As to that,
petitioners relied principally on testimonial
evidence. It is, of course, doctrinally entrenched
that the evaluation of the testimony of witnesses
by the trial court is received on appeal with the
highest respect, because it is the trial court that has
the direct opportunity to observe them on the
stand and detect if they are telling the truth or
lying through their teeth. The assessment is
accepted as correct by the appellate court and
binds it, absent a clear showing that it was reached
arbitrarily. 33 In this case, petitioners failed to
assail, much less overcome, the following
observation of the trial court:
Six. On the witness chair,
Intervenor's demeanor and
manner of testifying show that
she was evasive and shifty and
not direct in her answers to
simple questions that she was
admonished by the Court not to
be evasive and direct and
categorical in her answers; and
which rendered her testimony
unworthy of full faith and
credit. 34
Likewise fatal to petitioners' cause is that
Concepcion Peralta's sworn Confirmation dated
14 May 1987 cannot be considered hearsay
evidence due to Concepcion's failure to testify. On
the contrary, it is an exception to the hearsay rule
under Section 38 of Rule 130 of the Rules of
Court, it having been offered as evidence of an act
or declaration against interest. As declarant
Concepcion was a daughter of Rosendo Avelino
and Juana Ricaforte, and a sister of Celso Avelino
and intervenor Priscila Morales, Concepcion was
thus a co-heir of her siblings, and would have had
11
a share, equal to that of each of her co-heirs, in
the estate of Rosendo and Juana. However,
Concepcion explicitly declared therein thus:
That my aforenamed brother [Celso Avelino],
during the time when he was City Fiscal of
Calbayog City and still a bachelor, out of his own
money, bought the parcels of land located at
corner Umbria Street and Rosales Blvd., Brgy.
Central, Calbayog City, from Culets Mendiola de
Bartolome and Alejandra Fua Mendiola by virtue
of a Deed of Sale entered as Doc. No. 37; Page
No. 20; Book No. XI; Series of 1948 in the
Notarial Book of Atty. Celedonio Alcazar, Notary
Public of Calbayog, Samar; Likewise, out of his
own money, he constructed a residential building
on the lot which building is made of strong
materials.
If indeed the property was merely held in trust by
Celso for his parents, Concepcion would have
been entitled to a proportionate part thereof as
co-heir. However, by her Confirmation,
Concepcion made a solemn declaration against
interest. Petitioners, realizing that the
Confirmation was admissible, attempted to
cushion its impact by offering in evidence as
Exhibit "4" 35 Concepcion's affidavit, dated 16
June 1987, wherein Concepcion stated:
3. The property in question (particularly the
house), however forms part of the state of our
deceased parents, and, therefore, full and complete
conveyance of the right, title and interest in and to
such property can only be effected with the
agreement of the other heirs, namely, my sisters
Trinidad A. Cruz and Priscila A. Morales, and
myself.
Note that Concepcion seemed to be certain that
only the house formed part of the estate of her
deceased parents. In light of the equivocal nature
of Concepcion's later affidavit, the trial court and
the Court of Appeals did not then err in giving
more weight to Concepcion's earlier
Confirmation.
At bottom, the crux of the matter is whether
petitioners discharged their burden to prove the
existence of an implied trust. We rule in the
negative. Priscila's justification for her and her
sisters' failure to assert co-ownership of the
property based on the theory of implied trust is, to
say the least, flimsy. In light of their assertion that
Celso Avelino did not have actual possession of
the property because he "was away from Calbayog
continuously for more than 30 years until he died
on October 31, 1987, 36 and the established fact
that the tax declarations of the property were in
Celso's name and the latter paid the realty taxes
thereon, there existed no valid and cogent reason
why Priscila and her sisters did not do anything to
have their respective shares in the property
conveyed to them after the death of Rosendo
Avelino in 1980. Neither is there any evidence that
during his lifetime Rosendo demanded from Celso
that the latter convey the land to the former,
which Rosendo could have done after Juana's
death on 31 May 1965. This omission was mute
and eloquent proof of Rosendo's recognition that
Celso was the real buyer of the property in 1948
and the absolute and exclusive owner thereof.
1. MORALES v CA
Seller owns two adjoining parcels of land on which
he constructed a house where he let his parents and
sister lived while he worked as City Fiscal of
Calbayog, then Immigration Officer, and, later on,
as Judge of CFI Cebu.
While in Cebu, without the Seller’s knowledge, his
Nephew built a beauty shop on his property. When
he was offering to sell the property to prospective
buyer Spouses, the latter did an ocular inspection
and was able to talk with the Nephew, who
encouraged them to buy the property and assured
them that he will vacate the premises if notified by
the seller to do so.
The sale was consummated and the Spouses paid
the purchase price. Unfortunately, despite due
notice from the Seller, the Nephew refused to
vacate or demolish the beauty shop unless he is
reimbursed for P35k. The Spouses also
subsequently found out that the Nephew also then
occupied the dilapidated residential building, which
the former had sought to repair. The Spouses then
filed a case to recover the property against the
Nephew (later substituted by his heirs).
According to the Nephew’s mother, sister of the
Seller, (aside from the one who live in the house
12
constructed) who also intervened in the case, the
property was inherited by her together with their
other siblings, except for the Seller who was away
for 30 years because of his job.
The Seller, being the only son, was allowed by their
father to acquire the property with money coming
from the father. She further alleged that the
constructed house was built by their parents and
that the built beauty shop was with the knowledge
and consent of the Seller. She intervened arguing
that the sale was fraudulent for including her share
and the beauty shop of her son.
The Trial Court ruled in favor of the Spouses and
ordered the Nephew to vacate and remove the
beauty shop. The court noted that the seller’s
siblings and their descendants had not disputed the
Seller’s ownership of the property nor the extra
judicial-partition effected on the property, even
though two of the Sister-Intervenor’s children were
lawyers. It further noted that the claim of
ownership by the buyer Spouses were based on
documentary evidence (Deed of Conveyance, tax
declarations transferred to the wife-buyer, etc.), as
against the evidence presented by the Seller’s Sister
and Nephew which were only testimonial.
Furthermore, the other sisters did not join them
and intervened in
the case. The court further ruled that their claim of
implied trust is untenable, because in order for
implied trust to exist there must be evidence of an
equitable obligation of the trustee to convey, which
was absent in this case. The CA affirmed the
decision of the trial court.
ISSUE WON the Seller was a mere trustee for his
parents and siblings
RATIO

NO. As a rule, the burden of proving the existence
of a trust is on the party asserting its existence, and
such proof must be clear and satisfactorily show the
existence of the trust and its elements. 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
made to rest on loose, equivocal or indefinite
declarations.
 parents, Concepcion would have been entitled to a
A trust is the legal relationship between one person
having an equitable ownership in property and
another person owning the legal title to such
property, the equitable ownership of the former
entitling him to the performance of certain duties
and the exercise of certain powers by the latter. The
characteristics of a trust are: (a) it is a relationship;
(b) it is a relationship of fiduciary character; (c) It is
a relationship with respect to property, not one
involving merely personal duties; (d) it involves the
existence of equitable duties imposed upon the
holder of the title to the property to deal with it for
the benefit of another; and (e) it arises as a result of
a manifestation of intention to create the
relationship.
A resulting trust, also sometimes referred to as a
PURCHASE MONEY
RESULTING TRUST, is exemplified by Article
1448 of the Civil Code, which Art. 1448. There is
an implied trust when property is sold, and the legal
estate is granted to one party but the price is paid
by another for the purpose of having the beneficial
interest of the property. The former is the trustee,
while the latter is the beneficiary. However, if the
person to whom the title is conveyed is a child,
legitimate or illegitimate, of the one paying the price
of the sale, no trust is implied by law, it being
disputably presumed that there is a gift in favor of
the child.
To give rise to a purchase money resulting trust, it
is essential that there be (1) actual payment of
money, property or services or an equivalent,
constituting valuable consideration
(2) and such consideration must be furnished by the
alleged beneficiary of a resulting trust
The CA agreed with the lower courts that the
current situation falls within the exception under ht
third sentence of Article 1448.
Also, fatal to the case of Sister and Nephew is the
declaration of their other sister, Concepcion, who
disclaimed any interest on the property and
executed a Confirmation that their brother bought
the property using his own funds. If indeed the
property was merely held in trust by Celso for his
13
proportionate part thereof as co-heir.
However, by her Confirmation, Concepcion made
a solemn declaration against interest. Furthermore,
the Seller’s sisters did not do anything to have their
respective shares in the property conveyed to them
after the death of their father. Neither is there any
evidence that during his lifetime, their father
demanded from the Seller that the latter convey the
land, which was mute and eloquent proof of the
father’s recognition that the Seller was the to be the
absolute owner of the property.
GR 156273 Aug 9, 2005
Heirs of Moreno vs. Mactan
FACTS:
In 1949, the NAC sought to acquire Lot
No. 916 and Lot No. 920 for the proposed
expansion of the Lahug Airport. The two parcels of
land located in Lahug, Cebu City were owned by
the spouses Timoteo Moreno and Maria Rotea. The
spouses refused to sell their properties because the
proposed price was unacceptably way below the
market value of the lands at that time. As an
incentive for the other owners to cede their lots
adjoining the then existing Lahug Airport, NAC
guaranteed them or their successors-in-interest the
right to repurchase their properties for the same
price paid by the government in the event that these
properties were no longer used for purposes of the
airport. Some landowners executed deeds of
conveyance while others who refused to cede their
properties became defendants in an action for
expropriation filed by the Republic of the
Philippines before the CFI of Cebu. Lot Nos. 916
and 920 were among those included in the
expropriation case.
In a Decision rendered by the trial court,
the properties of Moreno and Rotea were
condemned for public use after payment of just
compensation.
Subsequently, the Lahug Airport was
abandoned and all its functions and operations
were transferred to the Mactan Airport. The
petitioners herein, wrote then President Fidel V.
Ramos and the MCIAA General Manager,
requesting for the exercise of their supposed right
to repurchase the lots in question considering that
the said lots intended for the expansion of the
Lahug Airport were not utilized.
Petitioners filed a complaint for
reconveyance and damages with the RTC of Cebu
City against the respondent asserting their right to
reacquire the subject properties. The trial court
rendered judgment in favor of the petitioners,
granting them the right to repurchase the properties
at the amount originally paid by the respondent,
including consequential damages.
The CA reversed the trial court’s decision
on the premise that the judgment affirming the
state’s right to exercise its power of eminent
domain was unconditional. The petitioners filed a
motion for reconsideration but was denied.
Petitioners filed before the SC for review
of the decision of the CA. SC reversed the CA
decision. Respondents now filed a motion for
reconsideration.
ISSUE:
Whether or not petitioners are entitled to
reconveyance or repurchase of the lots in question
when the public purpose for which the eminent
domain was exercised no longer subsists.
HELD:
The motion for reconsideration filed by
respondents was denied.
Nothing in the Fery case bespeaks that
there should foremost be an express condition in
the dispositive portion of the decision before the
condemned property can be returned to its former
owner after the purpose for its taking has been
abandoned or ended.
SC also discovered a significant portion of
the subject properties had been purchased by the
Cebu Property Ventures, Inc. for the development
of a commercial complex. The respondent, in its
answer, did not deny this allegation in the
petitioners’ complaint.
The predominant precept is that upon
abandonment of real property condemned for
public purpose, the party who originally
condemned the property recovers control of the
land if the condemning party continues to use the
property for public purpose; however, if the
14
condemning authority ceases to use the property
for a public purpose, property reverts to the owner
in fee simple. The government’s taking of private
property, and then transferring it to private persons
under the guise of public use or purpose is the
despotism found in the immense power of eminent
domain. Moreover, the direct and unconstitutional
state’s power to oblige a landowner to renounce his
productive and invaluable possession to another
citizen, who will use it predominantly for his own
private gain, is offensive to our laws.
When the State reconveys land, it should
not profit from sudden appreciations in land values.
Any increase or decrease in market value due to the
proposed improvement may not be considered in
determining the market value. Thus, reconveyance
to the original owner shall be for whatever amount
he was paid by the government, plus legal interest,
whether or not the consideration was based on the
land’s highest and best use when the sale to the
State occurred.
G.R. No. 171531 January 30, 2009
GUARANTEED HOMES, INC., Petitioner,
vs.
HEIRS OF MARIA P. VALDEZ, (EMILIA V.
YUMUL and VICTORIA V. MOLINO),
HEIRS OF SEVERINA P. TUGADE
(ILUMINADA and LEONORA P. TUGADE,
HEIRS OF ETANG P. GATMIN
(LUDIVINA G. DELA CRUZ (by and
through ALFONSO G. DELA CRUZ),
HILARIA G. COBERO and ALFREDO G.
COBERO) and SIONY G. TEPOL (by and
through ELENA T. RIVAS and ELESIO
TEPOL, JR.), AS HEIRS OF DECEDENT
PABLO PASCUA, Respondents.
Facts:
The descendants of Pablo Pascua filed a
complaint (in their complaint respondents alleged
that Pablo died intestate sometime in June 1945
and was survived by his four children, one of
whom was the deceased Cipriano) seeking
reconveyance of a parcel of land with an area of
23.7229 hectares situated in Cabitaugan, Subic,
Zambales with Original Certificate of Title (OCT)
No. 404 in the name of Pablo. In the alternative,
the heirs of Valdez prayed that damages be
awarded in their favor.
OCT No. 404 was attached as one of the annexes
of respondents’ complaint. It contained several
annotations in the memorandum of encumbrances
which showed that the property had already been
sold by Pablo during his lifetime to Alejandria
Marquinez and Restituto Morales.
It was further averred in the complaint that Jorge
Pascua, Sr., son of Cipriano, filed a petition before
the RTC of Olongapo City for the issuance of a
new owner’s duplicate of OCT No. 404. However,
the RTC denied the petition and held that
petitioner was already the owner of the land,
noting that the failure to annotate the subsequent
transfer of the property to it at the back of OCT
No. 404 did not affect its title to the property.
Petitioner filed a motion to dismiss the complaint
on the grounds that the action is barred by the
Statute of Limitations, more than 28 years having
elapsed from the issuance of TCT No. T-10863
up to the filing of the complaint, and that the
complaint states no cause of action as it is an
innocent purchaser for value, it having relied on
the clean title of the spouses Rodolfo.
The RTC granted petitioner’s motion to dismiss.
The appellate court further held that the ruling of
the RTC that petitioner is an innocent purchaser
for value is contrary to the allegations in
respondents’ complaint.
Hence, the present petition for review.
Issue:
The sole issue before this Court revolves around
the propriety of the RTC’s granting of the motion
to dismiss and conversely the tenability of the
Court of Appeals’ reversal of the RTC’s ruling.
Held:
The petition is meritorious.
It is well-settled that to sustain a dismissal on the
ground that the complaint states no cause of
action, the insufficiency of the cause of action
15
must appear on the face of the complaint, and the
test of the sufficiency of the facts alleged in the
complaint to constitute a cause of action is
whether or not, admitting the facts alleged, the
court could render a valid judgment upon the
same in accordance with the prayer of the
complaint.
Firstly, the complaint does not allege any defect
with TCT No. T-8242 in the name of the spouses
Rodolfo, who were petitioner’s predecessors-in-
interest, or any circumstance from which it could
reasonably be inferred that petitioner had any
actual knowledge of facts that would impel it to
make further inquiry into the title of the spouses
Rodolfo.
Secondly, while the Extrajudicial Settlement of a
Sole Heir and Confirmation of Sales executed by
Cipriano alone despite the existence of the other
heirs of Pablo, is not binding on such other heirs,
nevertheless, it has operative effect under Section
44 of the Property Registration Decree (SEC. 44.
Statutory Liens Affecting Title).
Lastly, respondents’ claim against the Assurance
Fund also cannot prosper. Section 101 of P.D.
No. 1529 clearly provides that the Assurance
Fund shall not be liable for any loss, damage or
deprivation of any right or interest in land which
may have been caused by a breach of trust,
whether express, implied or constructive. Even
assuming arguendo that they are entitled to claim
against the Assurance Fund, the respondents’
claim has already prescribed since any action for
compensation against the Assurance Fund must
be brought within a period of six (6) years from
the time the right to bring such action first
occurred, which in this case was in 1967.
The petition is GRANTED.
ERLINDA PILAPIL v. HEIRS OF MAXIMINO
R. BRIONES, GR No. 150175, 2007-02-05
Facts:
Petitioners are the heirs of the late Donata Ortiz-
Briones (Donata), consisting of her surviving
sister, Rizalina Ortiz-Aguila (Rizalina); Rizalina's
daughter, Erlinda Pilapil (Erlinda); and the other
nephews and nieces of Donata, in representation
of her two other... sisters who had also passed
away. Respondents, on the other hand, are the
heirs of the late Maximino Briones (Maximino),
composed of his nephews and nieces, and
grandnephews and grandnieces, in representation
of the deceased siblings of Maximino.
Maximino was married to Donata but their union
did not produce any children. When Maximino
died on 1 May 1952, Donata instituted intestate
proceedings to settle her husband's estate
On 8 July 1952, the CFI issued Letters of
Administration appointing Donata as the
administratrix of Maximino's estate. She submitted
an Inventory of Maximino's properties, which
included, among other things... parcels of land
The CFI would subsequently issue an Order,
dated 2 October 1952, awarding ownership of the
aforementioned real properties to Donata. On 27
June 1960, Donata had the said CFI Order
recorded in the Primary Entry Book of the
Register of Deeds, and by virtue thereof, received
new
TCTs, covering the said properties, now in her
name.
Donata died on 1 November 1977. Erlinda, one
of Donata's nieces, instituted with the RTC a
petition for the administration of the intestate
estate of Donata. Erlinda and her husband,
Gregorio, were appointed by the RTC as
administrators of Donata's intestate estate.
Controversy... arose among Donata's heirs when
Erlinda claimed exclusive ownership of three
parcels of land... based on two Deeds of
Donation, both dated 15 September 1977,
allegedly executed in her favor by her aunt
Donata. The other heirs of Donata... opposed
Erlinda's claim. This Court, however, was no
longer informed of the subsequent development
in the intestate proceedings of the estate of
Donata; and as far as this Petition is concerned, all
the heirs of Donata, including Erlinda, appear to
be on the same side.
16
On 21 January 1985, Silverio Briones (Silverio), a
nephew of Maximino, filed a Petition with the
RTC for Letters of Administration for the
intestate estate of Maximino, which was initially
granted by the RTC. The RTC also issued an
Order, dated 5 December 1985, allowing Silverio...
to collect rentals from Maximino's properties. But
then, Gregorio filed with the RTC a Motion to Set
Aside the Order, dated 5 December 1985,
claiming that the said properties were already
under his and his wife's administration as part of
the intestate estate of Donata.
Silverio's Letters of Administration for the
intestate estate of Maximino was subsequently set
aside by the RTC.
On 3 March 1987, the heirs of Maximino filed a
Complaint with the RTC against the heirs of
Donata for the partition, annulment, and recovery
of possession of real property
They... alleged that Donata, as administratrix of
the estate of Maximino, through fraud and
misrepresentation, in breach of trust, and without
the knowledge of the other heirs, succeeded in
registering in her name the real properties
belonging to the intestate estate of Maximino.
After trial in due course, the RTC rendered its
Decision, dated 8 April 1986, in favor of the heirs
of Maximino
[T]he RTC declared that the heirs of Maximino
were entitled to ½ of the real properties covered
by TCTs No. 21542, 21543, 21544, 21545, 21546,
and 58684. It also ordered Erlinda to reconvey to
the heirs of Maximino the said properties and to
render an accounting of the... fruits thereof.
The Court of Appeals, in its Decision,
promulgated on 31 August 2001, affirmed the
RTC Decision
In its Decision, dated 10 March 2006, this Court
found the Petition meritorious and, reversing the
Decisions of the Court of Appeals and the
Regional Trial Court (RTC), dismissed the
Complaint for partition, annulment, and recovery
of possession of real property filed by the... heirs
of Maximino
This Court summed up its findings,[11] thus -
In summary, the heirs of Maximino failed to prove
by clear and convincing evidence that Donata
managed, through fraud, to have the real
properties, belonging to the intestate estate of
Maximino, registered in her name. In the absence
of fraud, no implied trust was... established
between Donata and the heirs of Maximino under
Article 1456 of the New Civil Code. Donata was
able to register the real properties in her name, not
through fraud or mistake, but pursuant to an
Order, dated 2 October 1952, issued by the CFI
The CFI Order, presumed to be fairly and
regularly issued, declared Donata as the sole,
absolute, and exclusive heir of Maximino; hence,
making Donata the singular owner of the entire
estate of Maximino, including the real properties,
and not merely a co-owner with the... other heirs
of her deceased husband.
Issues:
Respondents move for the reconsideration of the
Decision of this Court raising still the arguments
that Donata committed fraud in securing the
Court of First Instance Order, dated 2 October
1952, which declared her as the sole heir of her
deceased husband Maximino and authorized... her
to have Maximino's properties registered
exclusively in her name
Ruling:
While this Court is persuaded to reexamine and
clarify some points in its previous Decision in this
case, it does not find any new evidence or
argument that would adequately justify a change in
its previous position.
On the finding of fraud
In the Decision, this Court ruled in the negative,
since there was insufficient evidence to establish
that Donata committed fraud. It should be
remembered that Donata was able to secure
certificates of title to the disputed properties by
virtue of the CFI Order... which declared her as
Maximino's sole heir. In the absence of proof to
the contrary, the Court accorded to Special
Proceedings No. 928-R the presumptions of
regularity and validity.
It is worth noting that, in its foregoing
ratiocination, the Court was proceeding from an
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evaluation of the evidence on record, which did
not include an actual copy of the CFI Order
Respondents only submitted a certified true copy
thereof on 15
June 2006, annexed to their Supplemental Reply to
petitioners' opposition to their motion for
reconsideration of this Court's Decision.
Respondents did not offer any explanation as to
why they belatedly produced a copy of the said
Order, but merely claimed to have been
"fortunate enough to obtain a copy" thereof from
the Register of Deeds
Respondents should be taken to task for springing
new evidence so late into the proceedings of this
case. Parties should present all their available
evidence at the courts below so as to give the
opposing party the opportunity to scrutinize and
challenge such evidence during the... course of the
trial. However, given that the existence of the CFI
Order in Special Proceedings No. 928-R was
never in issue and was, in fact, admitted by the
petitioners; that the copy submitted is a certified
true copy of the said Order; and that the said
Order may provide new... information vital to a
just resolution of the present case, this Court is
compelled to consider the same as part of the
evidence on record.
The CFI Order[17] in question reads in full as -
This is with reference to the Motion of the
Administratrix, dated January 5, 1960, that she be
declared the sole heir of her deceased husband,
Maximino Suico Briones, the latter having died
without any legitimate ascendant nor descendant,
nor any legitimate brother or sister,... nephews or
nieces.
At the hearing of this incident today, nobody
appeared to resist the motion, and based on the
uncontradicted testimony of Donata G. Ortiz that
she was the nearest surviving relative of the
deceased Maximino Suico Briones at the time of
the latter's death, and pursuant to the... pertinent
provisions of the new Civil Code of the
Philippines, the Court hereby declares the
aforesaid Donata G. Ortiz the sole, absolute and
exclusive heir of the estate of the deceased
Maximino Suico Briones, and she is hereby
entitled to inherit all the residue of this estate...
after paying all the obligations thereof
From the contents of the afore-quoted Order, this
Court is able to deduce that the CFI Order was in
fact issued on 15 January 1960 and not 2 October
1952, as earlier stated in the Decision. It was the
inventory of properties, submitted by Donata as
administratrix of Maximino's... intestate estate,
which was dated 2 October 1952.[18] Other than
such observation, this Court finds nothing in the
CFI Order which could change its original
position in the Decision under consideration.
While it is true that since the CFI was not
informed that Maximino still had surviving
siblings and so the court was not able to order that
these siblings be given personal notices of the
intestate proceedings, it should be borne in mind
that the settlement of estate, whether... testate or
intestate, is a proceeding in rem,[19] and that the
publication in the newspapers of the filing of the
application and of the date set for the hearing of
the same, in the manner prescribed by law, is a
notice to the whole world of the... existence of the
proceedings and of the hearing on the date and
time indicated in the publication. The publication
requirement of the notice in newspapers is
precisely for the purpose of informing all
interested parties in the estate of the deceased of
the existence of the... settlement proceedings,
most especially those who were not named as
heirs or creditors in the petition, regardless of
whether such omission was voluntarily or
involuntarily made.
This Court cannot stress enough that the CFI
Order was the result of the intestate proceedings
instituted by Donata before the trial court. As this
Court pointed out in its earlier Decision, the
manner by which the CFI judge conducted the
proceedings enjoys the presumption of...
regularity, and encompassed in such presumption
is the order of publication of the notice of the
intestate proceedings. A review of the records fails
to show any allegation or concrete proof that the
CFI also failed to order the publication in
newspapers of the notice of the... intestate
proceedings and to require proof from Donata of
compliance therewith. Neither can this Court find
any reason or explanation as to why Maximino's
siblings could have missed the published notice of
the intestate proceedings of their brother.
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Although Donata may have alleged before the CFI jurisdiction by the CFI in rendering the questioned
that she was her husband's sole heir, it was not Order, dated 15 January 1960, in Special
established that she did so knowingly, maliciously Proceedings No. 928-R.
and in bad faith, so as for this Court to conclude
that she indeed committed fraud. This Court again
brings to the fore the delay... by which
respondents filed the present case, when the
principal actors involved, particularly, Donata and
Maximino's siblings, have already passed away and
their lips forever sealed as to what truly transpired
between them. On the other hand, Special
Proceedings No. 928-R took... place when all
these principal actors were still alive and each
would have been capable to act to protect his or
her own right to Maximino's estate. Letters of
Administration of Maximino's estate were issued
in favor of Donata as early as 8 July 1952, and the
CFI Order in... question was issued only on 15
January 1960. The intestate proceedings for the
settlement of Maximino's estate were thus pending
for almost eight years, and it is the burden of the
respondents to establish that their parents or
grandparents, Maximino's surviving siblings, had...
absolutely no knowledge of the said proceedings
all these years. As established in Ramos v.
Ramos,[21] the degree of proof to establish fraud
in a case where the principal actors to the
transaction have already passed away is proof
beyond reasonable... doubt, to wit -
"x x x But length of time necessarily obscures all
human evidence; and as it thus removes from the
parties all the immediate means to verify the
nature of the original transactions, it operates by
way of presumption, in favor of innocence, and
against... imputation of fraud.
Fraud, or breach of trust, ought not lightly to be
imputed to the living; for, the legal presumption is
the other way; as to... the dead, who are not here
to answer for themselves, it would be the height
of injustice and cruelty, to disturb their ashes, and
violate the sanctity of the grave, unless the
evidence of fraud be clear, beyond a reasonable
doubt
Moreover, even if Donata's allegation that she was
Maximino's sole heir does constitute fraud, it is
insufficient to justify abandonment of the CFI
Order, dated 15 January 1960,[22] considering the
nature of intestate proceedings as being in rem
and the... disputable presumptions of the regular
performance of official duty and lawful exercise of

19