Viloria vs.

Court of Appeals
Case Ponente: BELLOSILLO, J
Decision Date: Jun 30, 1999
G.R. No. 119974

Summary:
In Viloria vs. Court of Appeals, the Supreme Court affirmed the lower court's
ruling that a Deed of Sale executed in 1965 was an express trust, not a true
conveyance of real property. Consequently, the defendant was deemed a trustee,
and a partition of the properties was ordered.

Facts:
The dispute involved a commercial lot and an orchard in Balaoan, La Union, co-
owned by Ruperto L. Viloria and the heirs of Nicolasa and Rosaida Viloria. After
the deaths of Nicolasa and Rosaida, their heirs demanded partition, which
Ruperto resisted, claiming ownership through a 1965 Deed of Sale. However, the
heirs argued that the sale was for loan purposes only, and Nicolasa and Rosaida
continued to exercise ownership until their deaths. The trial court ruled the
Deed of Sale was an express trust, ordering partition. The Court of Appeals
affirmed with modifications, declaring the parties co-owners of 2/3 of the
commercial lot and 1/3 of the orchard.

Issue:
1. Was the 1965 Deed of Sale an express trust or a true conveyance?
2. Did the prescriptive period run against the private respondents?

Ruling:
1. The Supreme Court upheld the Court of Appeals' decision, affirming the Deed
of Sale as an express trust.
2. The prescriptive period did not commence against the private respondents.

Ratio:
The Court concurred with the lower courts, stating the Deed of Sale was meant
to establish an express trust, evidenced by Nicolasa and Rosaida's continued
exercise of ownership. Ruperto's failure to openly repudiate their claims further
supported this interpretation. Despite notarization, the Deed lacked the
intention to convey legal ownership. The Court rejected claims of jurisdictional
overreach by the appellate court, emphasizing the necessity to settle ownership
before partition. Consequently, the properties were to be divided into four equal
parts, with Ruperto receiving 1/4 and the private respondents 3/4.