Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. L-33762 December 29, 1977

POTENCIANA DUQUE, AMADEO DUQUE and ARSENIO DUQUE, petitioners, vs.PAZ DOMINGO, represented by her guardian ad litem, MARCOSA DUQUE- VALENZUELA, Intestate Estate of JULIA DUQUE, in substitution of Julia Duque, and the COURT OF APPEALS, respondents.

Antonio K. Aranda & Virgilio B. Jara for petitioners.

Arturo Agustines for respondents.

FERNANDEZ, J.:

This is a petition for certiorari to review the decision of the Court of Appeals in CA-G.R. No. 43557-R entitled "JULIA DUQUE, for herself and as natural guardian of her daughter of unsound mind, PAZ DOMINGO, versus POTENCIANA DUQUE, AMADEO DUQUE and ARSENIO DUQUE", the dispositive part of which reads:

WHEREFORE, the decision appealed from is hereby reversed and another one entered instead, declaring Julia Duque the absolute owner of lot 1083 currently covered by TCT No. T-25195 in the name of defendants; declaring said TCT No. T-25195 null and void; and ordering that a new certificate of title be issued in the name of Julia Duque. Without pronouncement as to costs.

SO ORDERED. 1

On September 5. 1966, Julia Duque, for herself and as, natural guardian of her daughter of unsound mind, Paz Domingo, instituted against Potenciana Duque, Amadeo Duque and Arsenio Duque Civil Case No. 266-V in the Court of First Instance of Bulacan for reconveyance of Lot 1083 of Malinta Estate located in Polo, Bulacan and in the alternative, to declare Transfer Certificate of Title No. 25195 in the name of the defendants void and to declare the plaintiffs as the absolute owners of said Lot 1083.

The complaint alleged that plaintiff, Julia Duque, is a niece of Juana Duque who died in 1928; that the defendants are the children of Mariano Duque, a deceased nephew of Juana Duque and natural brother of the plaintiff, Julia Duque; that sometime in 1908, Juana Duque, through her other nephew, Faustino Duque, whom she had employed as her agent, purchased from the government Lot 1083 of the Malinta Estate at Polo, Bulacan under Tax Declaration No. 8724 at P 1,600.00, more particularly described in Original Certificate of Title No. 374; that Lot 1083 was then a part of the Friar Estate of the government disposable by the Director of

Lands on installment pursuant to the Friar Land Act; that Faustino Duque, the agent, caused the document of purchase, Sale Certificate No. 1138, to be issued by the government in his name with the consent of his principal, Juana Duque; that under the terms of Sale Certificate No. 1138, the price of Lot 1083 was P 503.00 payable in 20 annual installments of P 25.00 each; that the original of the sale certificate was lost in the files of the Bureau all of Lands during the war and plaintiffs could not secure a copy for attachment to the complaint; that on June 22, 1915, Faustino Duque transferred his Sale Certificate No. 1138 with the permission of Juana Duque to his brother, Mariano Duque, who later received in 1931 Transfer Certificate No. 7501 for Lot 1083 from the government; that since [he issuance of the sale certificate in 1909, Juana Duque had been in the exclusive possession of Lot 1083 as owner paying the installments stipulated in the contract to the government through Faustino Duque and Mariano Duque or reimbursing their advances therefor; that in 1927, Juana Duque verbally donated and delivered Lot 1083 to plaintiff Julia Duque, her niece; that from then on up to the present, the plaintiff Julia Duque has been in the exclusive ion of Lot 1083 as beneficial owner thereof; that Mariano Duque, the title holder, died and in 1957, his children, Emilio Duque, Potenciana Duque, Amadeo Duque and Arsenic Duque registered Lot 1083 in their names under Transfer Certificate of Title No. T-19924 of the Registry of Deeds of Bulacan; that subsequently Emilio Duque died without issue and the defendants had Lot 1083 recorded in their names under Transfer Certificate of Title No. T- 25195 in 1959; that plaintiff, Julia Duque, requested the defendants to reconvey to her the title of Lot 1083 but they refused and still refuse to comply with her request; that Juana Duque, the owner of Lot 1083 died single, without issue and intestate in 1928 survived by her nephews, as legal heirs, Mariano Duque, Domingo Duque, Faustino Duque and Apolonio Duque; that the foregoing legal heirs the donation of Lot 1083 made by Juana Duque to plaintiff, Julia Duque, in or about 1927 and repudiated and abandoned all rights to contest it, as in fact they caused Lot 1083 to be declared for tax purposes in the name of Paz Domingo, the only child of Julia Duque, in or about 1933; and that the defendants had plaintiffs, beneficial ownership of Lot 1083 after the death of their father, Mariano Duque. 2

In their answer filed on October 5, 1966, the defendants averred as affirmative and special defenses that Lot 1083 of the Malinta Estate is owned in fee simple by defendants, Potenciana, Amadeo and Arsenio, all surnamed Duque, as evidenced by T.C.T. No. T25195 of the Registry of Deeds of Bulacan; that said property was y purchased in 1915 by defendants' father and predecessor-in-interest, Mariano Duque, from the government of the Philippine Islands; that the purchase price of the land being payable in installment, it was only in 1931, after full payment of said price, when Mariano Duque acquired ownership in fee simple over Lot 1083 by the issuance in his favor of T.C.T. No. 7501 of the Registry of Deeds of Bulacan by the government of the Philippine Islands; that from

1915 up to the present, over a period of 51 years, Mariano Duque, his heirs and successor in interest which include defendants herein have continuously treated, held and possessed Lot 1083 as their sole and exclusive property and that no one among them has recognize that the beneficial ownership thereof was in Julia Duque, Juana Duque, Paz or any third that the vanity of the grant in 1931 by the Government of the Philippine Islands of T.C.T. No. T-7501 in favor of Duque was never questioned by the plaintiffs in inspite of their knowledge about it, that in fact the plaintiffs were aware that from the issuance of said title in 1931 will in exercise of the rights of over the land, at least three conveyances involving Lot 1083 had been in the Office of the Registry of Deeds of Bulacan which in the grant of new certificates of title in the of the name of the parties; that notwithstanding their knowledge about these conveyances the plaintiffs kept silent and never raised any objections thereto; that although the plaintiffs and defendants belong to the same family, no allegation that earnest efforts towards a compromise have been made by the former is contained in the complaint; that under the circumstances, plaintiffs have no cause of action against the defendants; that even assuming that they have a cause of action, the same has been barred by the statute of stations and/or by laches or it is enforceable under the Statute of Frauds; and that in any event, the plaintiffs are in estoppel from claiming any rights of interest over Lot 1083. 3

The parties filed on June 22, 1968 the following:

PARTIAL STIPULATION OF FACTS

The parties hereto hereby submit the following partial stipulation of facts, in compliance with the verbal permission of the Court at the hearing on June 25, 1968:

1. Plaintiff Julia Duque is the natural sister of the late Mariano Duque, who died on June 20, 1947;

2. Defendants Potenciana, Arsenio and Amadeo, all surnamed, Duque, are the legitimate children of said Mariano Duque;

3. The property in question, which was formerly a part of the Friar Land Estate of the Government (Lot 1083 of the Malinta Estate), was disposed of by the Government of the Philippine Islands on January 1, 1909 by virtue of Sales Certificate No. 1138 for a consideration of P 503.00 payable in 20 annual installments of P 25.00 per year, effective January 1, 1909;

4. As per Sales Certificate No. 1138, the grantee thereof was one Faustino Duque;

5. On September 15, 1931. Transfer Certificate of Title No. 7501, covering said parcel of land, was issued in favor of the late Mariano Duque;

6. As of this date, the property in question is covered by Transfer

Certificate of Title No. 25195 of the Registry of Deeds for the Province of Bulacan issued in the names of defendants Potenciana Arsenio and Amadeo, all surnamed, Duque;

7. The present value of said property is more than P 300,000.00. WHEREFORE, it is respectfully prayed that the foregoing partial Stipulation of Facts be approved and made a part of the records of this case.

AVIADO & ARANDA

By:

(Sgd.) ILLEGIBLE

Counsel for the defendants

214 Bank of P.I. Bldg.

Plaza Moraga, Manila

(Sgd.) ARTURO AGUSTINES

Counsel for the Plaintiffs

Polo, Bulacan 4

The trial court rendered the decision dated February 1969 dismissing the complaint without cost.

Meanwhile, the plaintiff Julia Duque died on January 31, 1969. She was ordered substituted by her daughter and co-plaintiff, Paz Domingo for whom Marcosa Duque-Valenzuela was appointed as guardian ad litem in an order of the trial court dated March 31, 1969. 5

The plaintiffs appealed to the Court of Appeals where the appeal was docketed as CA-G.R. No. 43557-R.

The Court of Appeals declared Julia Duque the absolute owner of Lot 1083 because "Although the plaintiff's theory is that the property in question was acquired by Julia Duque through an oral donation made by her aunt Juana Duque in her favor, the case should be considered from the point of view of a verbal partition among heirs made by the decedent and consented to by them." The Court of Appeals said that "In 1927 one year before her death Juana Duque gathered her nephews and nieces in her house and made a verbal partition of her properties: to each of them she gave something and to Julia she gave the property in question, all of the heirs including Mariano Duque, consented to each other's largesse." 6

The petitioners assign the following errors:

I

THE COURT A QUO ERRED IN NOT HOLDING THAT THE CLAIM OF PRIVATE RESPONDENTS TO ENFORCE AN IMPLIED TRUST OVER REAL PROPERTY

HAD PRESCRIBED OR HAD BEEN BARRED BY LACHES.

II

THE COURT A QUO ERRED IN NOT HOLDING THAT THE ORAL DONATION MADE IN 19927 OF LOT 1083, ASSUMING THE TRUTH THEREOF, WAS NULL AND VOID.

III

THE COURT A QUO ERRED IN PRESUMING, EVEN WITHOUT ANY SHRED OF EVIDENCE PRESENTED IN SUPPORT THEREOF, AND IN UTTER DISREGARD OF THE SALES CERTIFICATE ISSUED BY THE GOVERNMENT AND ITS CORRESPONDING ASSIGNMENT, THAT FAUSTINO DUQUE AND MARIANO DUQUE ACTED AS AGENTS OF JUANA DUQUE.

IV

THE COURT A QUO ERRED IN NOT HOLDING THAT AN IMPLIED TRUST OVER A REAL PROPERTY COVERED BY TORRENS TITLE CANNOT BE ESTABLISHED BY A MERE TAX DECLARATION.

V

THE COURT A QUO ERRED IN PROMULGATING THE DECISION, WHICH IS PREMISED ON FACTS AND INVOLVING ISSUES NOT COVERED BY THE EVIDENCE AND RAISED IN THE PLEADINGS. 7

The partial stipulation of facts and the evidence established that the land in question, Lot 1083 of the Malinta Estate was formerly a part of the Friar Land Estate of the Government that on January 1, 1909 the Government of the Philippine Islands sold to Faustino Duque Lot 1083 by virtue of Sale Certificate No. 1138 for a consideration of P 503.00 payable in 20 annual installments of P 25.00 per year, effective on January 1, 1909; that in 1915 Faustino Duque assigned his right on Lot 1083 in favor of Mariano Duque, the legitimate father of the petitioners Potenciana Duque, Amadeo Duque and Arsenio Duque; that on September 15, 1931, Transfer Certificate of Title No. 7501 was issued in the name of Mariano Duque; that upon the death of Mariano Duque, his widow, Dorotea Vda. de Duque and children, Potenciana, Amadeo, Arsenio and Emilio, all surnamed Duque, as heirs, instituted in the Court of First Instance of Manila a proceeding for the settlement of the estate of said Mariano Duque; that in the estate proceeding Lot 1083 was adjudicated pro-indiviso to the widow and children of Mariano Duque; that Transfer Certificate of Title No. 19924 was issued to the said heirs; that when Dorotea Vda. de Duque and Emilio Duque died in 1954 and 1956, respectively, their shares in Lot 1083 were inherited by the petitioners to whom Transfer Certificate of Title No. 25195 was issued; that in 1933 the land in question was declared for taxation in the name of the respondent, Paz Domingo; that beginning with the year 1949 the tax declaration embracing the land in question was in the name of Mariano Duque and that Tax Declaration No. 15214 is in the names of

the petitioners. 8

The private respondents adduced oral evidence that sometime in 1908 Juana Duque, through her nephew whom she had employed as her agent, purchased from the Government Lot 1083 of the Malinta Estate in Polo, now Valenzuela, Bulacan; that Faustino Duque, the agent, caused the document of purchase, Sale Certificate No. 1138, to be issued by the government in his name with the consent of his principal, Juana Duque; and that in or about 1927 Juana Duque verbally donated and delivered Lot 1083 to her niece, Julia Duque. 9

The theory of the private respondents that the land in question was purchased by Juana Duque through her agent Faustino Duque and that in 1927 she verbally donated said land to Julia Duque is supported only by testimonial evidence which cannot prevail over the petitioners' documentary evidence consisting of Sale Certificate No. 1138 issued in 1909 whereby the Director of Lands sold Lot 1083 to Faustino Duque on a 20-year installment of P 25.00 per year for a total price of P 503.00 and the transfer certificates of title in the name of Mariano Duque and his heirs. If Juana Duque was the real purchaser, it is odd that Faustino Duque appeared as the purchaser of Lot 1083 in Sale Certificate No. 1138. From 1909 until her death in 1928 Juana Duque had never taken any step to have the land in question transferred in her name despite the fact that in 1915 Faustino Duque transferred his right to the land under Sale Certificate No. 1138 to Mariano Duque. There is no sufficient evidence to show that Juana Duque consented to the transfer by Faustino Duque of his right to the land in question in favor of Mariano Duque. Moreover, if Juana Duque was the real owner of Lot 1083 she would not have consented to the aforementioned transfer by Faustino Duque to Mariano Duque.

The complaint 10 admitted that in 1931 Mariano Duque received Transfer Certificate of Title No. 7501 for Lot 1083 from the government; that Mariano Duque, the holder, died and in 1957 his children registered Lot 1083 in their names under Transfer Certificate of Title No. T-19924-, and that upon the death of Emilio Duque without issue, the defendants, petitioners herein, had said Lot 1083 recorded in their names under Transfer Certificate of Title No. T-25195 in 1959.

From 1931 the title to the land in question, Lot 1083, had always been in the name of Mariano Duque and after his death, in those of his children, the herein petitioners. The complaint was filed by Julia Duque only in September 1966 after the lapse of thirty-five (35) years from the issuance of Transfer Certificate of Title No. 7501 to Mariano Duque.

The alleged possession by the private respondents of the land in question did not divest the petitioners, as registered owners, of their rights to Lot 1083. Adverse possession under claim of ownership for the period fixed by law is ineffective against a Torrens title.11

The alleged oral donation by Juana Duque in favor of Julia Duque did not

transfer any right over Lot 1083 to the donee. Both under the Spanish Civil Code and the Civil Code of the Philippines, a donation of an immovable, to be valid must be made in a public document, specifying therein the property donated and the value of the charges which the donee must satisfy. 12

The Court of Appeals must have realized the fatal infirmity of the alleged verbal donation because it considered the case "from the point of view of a verbal partition among heirs made by the decedent and consented to by them. 13

There is no adequate showing that Mariano Duque consented in 1927 to a verbal partition made by Juana Duque wherein she gave the property in question, Lot 1083, to Julia Duque. On the contrary, in 1931, after full payment of the purchase price, Mariano Duque obtained in his name Transfer Certificate of Title No. 7501 for Lot 1083 from the government. 14

The improbability of the alleged oral partition becomes more evident when it is considered that Lot 1083 is registered land and any transaction affecting registered land should be evidenced by a registerable deed. 15

No implied trust between Juana Duque and either Faustino Duque or Mariano Duque has been established by sufficient evidence.

At any rate, granting, arguendo, that such an implied or constructive trust existed, the right of action upon the same has prescribed. From 1931 when Transfer Certificate of Title No. 7501 covering the land in question was issued to Mariano Duque until 1966 when the present case was commenced a period of 35 years had passed. The registration of an instrument in the Office of the Register of Deeds constitutes constructive notice to the whole world, and, therefore, discovery of the fraud is deemed to have taken place at the time of registration. 16 Such registration is deemed to be a constructive notice that the alleged fiduciary or trust relationship has been repudiated. It is now settled that an action on an implied or constructive trust prescribes in ten (10) years from the date the right of action accrued. 17 The issuance of Transfer Certificate of Title No. 7501 in 1931 to Mariano Duque commenced the effective assertion of adverse title for the purpose of the statute of limitations.

WHEREFORE, the decision of the Court of Appeals appealed from is hereby set aside and Civil Case No. 266-V of the Court of First Instance of Bulacan is dismissed, without pronouncement as to costs.

SO ORDERED.

Makasiar, Munoz Palma and Guerrero, JJ., concur.

Teehankee (Chairman), J., concur in the result.

Martin, J., took no part.

 

Footnotes

1 Rollo, p. 44. The decision was written by Justice Lourdes P. San Diego and concurred in by Justice Ruperto G. Martin and Justice Eulogio S. Serrano. justice Edilberto Soriano dissented in a separate opinion concurred in by Presiding Justice Salvador V. Esquerra.

2 Record on Appeal, pp. 5-11, Rollo, p. 69.

3 Ibid., pp. 15-20, Rollo, p. 69.

4 Ibid pp. 49-51, Rollo, p. 69.

5 Ibid., p. 75, Rollo, p. 69.

6 Rollo, p. 33.

7 Brief for Petitioners, pp. 1-2, Rollo, p. 12-D .

8 Record on Appeal, pp. 49-51, Rollo, p. 68; and Brief for Petitioners, pp. 3-6, Rollo, p. 125.

9 Rollo, pp. 48-54.

10 Record on Appeal, pp. 8-9, Rollo, p. 69.

11 Valiente vs. Court of First Instance of Tarlac, et al., 80 Phil. 415; Bolanos vs. J.M. Tuason &, Co., Inc. 37 SCRA 223, 228.

12 Art. 633, Spanish Civil Code; Art. 749 Civil Code of the Philippines.

13 Rollo, p. 35.

14 Paragraph 8, Complaint, Record on Appeal, p. 8, Rollo, p. 69.

15 Salao vs. Salao, 70 SCRA 65, 83.

16 Carantes vs, Court of Appeals, 76 SCRA 514, 523.

17 De la Cerna vs. De la Cerna, 72 SCRA 514, 518.

Republic of the PhilippinesSUPREME COURT

Manila

THIRD DIVISION 

G.R. No. 110115 October 8, 1997

RODOLFO TIGNO AND SPOUSES EDUALINO and EVELYN CASIPIT, petitioners, vs.COURT OF APPEALS AND EDUARDO TIGNO, respondents.

 

PANGANIBAN, J.:

In denying this petition, the Court takes this occasion to apply the principles of implied trust. As an exception to the general rule barring factual reviews in petitions under Rule 45, the Court wades into the transcript of stenographic notes only to find that the Court of Appeals, indeed, correctly overturned the trial court's findings of facts.

The Case

Petitioners challenge the Decision 1 of Respondent Court of Appeals 2 in CA-G.R. CV No. 29781 promulgated on October 15, 1992 and its Resolution 3 promulgated on May 5, 1993. The dispositive portion of the assailed Decision reads: 4

WHEREFORE, in view of the foregoing, the decision appealed from is hereby REVERSED and another one ENTERED as follows:

1. Declaring plaintiff-appellant Eduardo M. Tigno as the true and lawful owner of the lands described in the complaint;

2. Declaring the Deed of Sale executed by defendant-appellee Rodolfo M. Tigno in favor of defendant-appellee spouses Edualino Casipit and Avelina Estrada as null and void and of no effect; and

3. Ordering defendant-appellee Rodolfo M. Tigno to vacate the parcels of land described in the complaint and surrender possession thereof to plaintiff-appellant Eduardo M. Tigno.

With costs against defendants-appellees.

Petitioners' subsequent motion for reconsideration was "denied for lack of merit" in the assailed Resolution. 5

The Facts

Respondent Court adequately recited the facts of the case as follows: 6

The facts from the standpoint of plaintiff-appellant's (herein private respondent's) evidence are summarized in his brief, to wit:

Sometime in January, 1980, Bienvenido Sison, Remedios Sison and the heirs of Isaac Sison, namely: Manuel Sison, Gerardo Sison and Adelaida Sison appointed Dominador Cruz as agent to sell three (3) parcels of land adjoining each other located at Padilla St., Lingayen, Pangasinan (TSN, Sept. 5, 1989, pp. 6-8). These parcels of land belonging to the abovenamed persons are more particularly described as follows:

Bienvenido Sison:

A parcel of fishpond situated at Padilla Street, Lingayen, Pangasinan, with an area of 3006.67 square meters, more or less, bounded on the North by Padilla Street, on the South by Lots 1105, 1106, 1107, 1108, etc., on the East by alley, and on the West by Alejandro Vinluan and

Thomas Caldito: (Exh. B)

Heirs of Isaac Sison (i.e. Manuel, Gerardo and Adelaida Sison)

A parcel of fishpond, situated at Padilla Street, Lingayen, Pangasinan, with an area of 3006.66 square meters, more or less, bounded on the North by Padilla Street; On the South by Bienvenido Sison, on the East by Alley, and on the West by Mariano Sison; (Exh. A)

Remedios Sison

A parcel of unirrigated riceland (now fishpond) situated in Poblacion, Lingayen, Pangasinan, containing an area of 3006.66 square meters, more or less, bounded on the North by Padilla Street; on the East by Path; on the South by Dionisio and Domingo Sison; and on the West by Path; (Exh. C)

Sometime in April 1980, Rodolfo Tigno learned that the abovedescribed properties were for sale. Accordingly, he approached Cruz and told the latter to offer these parcels of land to his brother, Eduardo Tigno, herein appellant (TSN, Sept. 5, 1989, p. 9).

Pursuant thereto, Cruz and Rodolfo Tigno went to appellant's Makati office to convince the latter to buy the properties earlier described. At first, appellant was reluctant, but upon Rodolfo Tigno's prodding, appellant was finally convinced to buy them (TSN, Sept. 5, 1989, pp. 9-11). In that meeting between Cruz and appellant at the latter's office, it was agreed that each parcel of land would cost Ten Thousand Pesos (P10,000.00) [TSN, Oct. 16, 1989, p. 9].

Having reached an agreement of sale, appellant then instructed Cruz to bring the owners of these parcels of land to his ancestral house at Guilig Street, Lingayen, Pangasinan on May 2, 1980, as he will be there to attend the town fiesta (TSN, Sept. 5, 1989, p. 13).

After leaving appellant's office, Cruz and Rodolfo Tigno went to Manila City Hall to visit the latter's uncle, Epifanio Tigno, who works there. At the Manila City Hall, Cruz and Rodolfo Tigno intimated to Epifanio Tigno that appellant has agreed to buy the 3 parcels of land abovedescribed (TSN, Sept. 5, 1989, p. 19; TSN, Sept. 29, 1989, pp. 8-10).

After leaving Manila City Hall, Cruz and Rodolfo Tigno left for Lingayen, Pangasinan (TSN, Sept. 5, 1989, p. 15).

On May 2, 1980, Cruz, together with Bienvenido Sison, Manuel Sison, Adelaida Sison and Remedios Sison went to appellant's house at Guilig Street, Lingayen, Pangasinan. At around 5:00 o'clock in the afternoon, the abovenamed persons and appellant went to Atty. Modesto Manuel's house at Defensores West Street, Lingayen, Pangasinan for the preparation of the appropriate deeds of sale (TSN, Sept. 5, 1989, pp. 15-17).

At Atty. Manuel's house, it was learned that Bienvenido Sison failed to bring the tax declarations relating to his property. Also, Remedios Sison had mortgaged her property to a certain Mr. Tuliao, which mortgage was then existent. Further, Manuel Sison did not have a Special Power of Attorney from his sister in the United States of America to evidence her consent to the sale. In view thereof, no deed of sale was prepared on that day (TSN, Sept. 5, 1989, pp. 17-19).

However, despite the fact that no deed of sale was prepared by Atty. Manuel, Remedios Sison, Bienvenido Sison and Manuel Sison asked appellant to pay a fifty percent (50%) downpayment for the properties. The latter acceded to the request and gave Five Thousand Pesos (P5,000.00) each to the 3 abovenamed persons for a total of Fifteen Thousand Pesos (P15,000.00) (TSN, Sept. 5, 1989, pp. 19-20). This was witnessed by Cruz and Atty. Manuel. After giving the downpayment, appellant instructed Cruz and Atty. Manuel to place the name of Rodolfo Tigno as "vendee" in the deeds of sale to be subsequently prepared. This instruction was given to enable Rodolfo Tigno to mortgage these properties at the Philippine National Bank (PNB), Lingayen Branch, for appropriate funds needed for the development of these parcels of land as "fishponds" (TSN, Sept. 27, 1989, pp. 16-23).

On May 6, 1980, May 12, 1980 and June 12, 1980, the appropriate deeds of sale (Exhs. A, B, C) were finally prepared by Atty. Manuel and signed by Bienvenido Sison, the heirs of Isaac Sison (Manuel, Gerardo and Adelaida Sison), and Remedios Sison, respectively. In all these deeds of sale, Rodolfo Tigno was named as "vendee" pursuant to the verbal instruction of herein appellant. Cruz, the agent in the sale, signed in these three (3) deeds of sale as a witness (Exhs. A-2, B-l and C-l).

Sometime in the second week of July 1980, Cruz brought and showed these deeds of sale to appellant in his Makati office. After seeing these documents, appellant gave Cruz a Pacific Bank check in the amount of Twenty Six Thousand Pesos (P26,000.00) representing the following:

a) P15,000.00 as the balance for the three (3) parcels of land;

b) P6,000.00 representing Cruz's commission as agent; and

c) P5,000.00 for capital gains tax, registration and other incidental expense. (TSN, Sept. 5, 1989, pp. 39-41).

Upon encashment of this check at PNB, Lingayen Branch, Cruz paid Remedios Sison, Manuel Sison and Bienvenido Sison, through Adelaida Sison, the balance due them from appellant (TSN, Sept. 5, 1989, pp. 42-43).

On April 29, 1989, Rodolfo Tigno, without the knowledge and consent of appellant, sold to Spouses Edualino Casipit and Avelina Casipit 508.56 square meters of the land previously owned by Bienvenido Sison (Exh. E). At the time of sale, the Casipits were aware that the portion of the

land they bought was owned by appellant, not Rodolfo Tigno (TSN, Oct. 16, 1989, pp. 30-31; TSN, Nov. 6, 1989, p. 10).

On May 16, 1989, appellant learned that Rodolfo Tigno is "negotiating" a portion of his land to the Casipits. Accordingly, appellant sent a letter (Exh. D) to the Casipits advising them to desist from the intended sale, not knowing that the sale was already consummated as early as April 29, 1989.

A few days thereafter, upon learning that the sale was already consummated, appellant confronted the Casipits and Rodolfo Tigno and asked them to annul the sale, but his request was not heeded (TSN, Oct. 16, 1989, pp. 29-32). (pp. 12-B to 12-j, rollo)

On May 24, 1989, the plaintiff filed Civil Case No. 16673 for "Reconveyance, Annulment of Document, Recovery of Possession and Damages" against Rodolfo M. Tigno and defendant spouses Edualino Casipit and Avelina Estrada. The complaint alleged, among others, that plaintiff purchased the three (3) parcels of land in question so that his brother Rodolfo Tigno, who was then jobless, could have a source of income as a caretaker of the fishponds; that plaintiff and Rodolfo agreed that the latter would secure a loan from the Philippine National Bank at Lingayen using said lands as collateral; that considering the busy schedule of plaintiff, then as executive vice-president of an American firm based in Makati, Metro Manila, it was made to appear in the deeds of sale that Rodolfo M. Tigno was the vendee so that the latter could, as he actually did, secure a loan from the PNB without need of plaintiff's signature and personal presence, the loan proceeds to be used as seed capital for the fishponds; that there being trust and confidence as brothers between plaintiff and defendant, the former instructed the Notary Public, who prepared the Deeds of Sale, to put in said Deeds the name of Rodolfo M. Tigno as vendee.

The plaintiff further averred in said Complaint that some time on May 16, 1989, when he was in Lingayen, Pangasinan, he came to know from friends that Rodolfo was negotiating the sale to defendant spouses of a portion of one of the parcels of land; that after requesting in writing the defendant-spouses to desist from buying the land, and after confronting Rodolfo himself, plaintiff found out upon verification with the Register of Deeds of Lingayen, that Rodolfo had already sold on April 29, 1989 said portion of 508.56 square meters to his co-defendant spouses who had previous knowledge that plaintiff, and not Rodolfo Tigno, is the real owner of said lands; that there being a violation of trust and confidence by defendant Rodolfo, plaintiff demanded from said defendants the reconveyance of said lands, the surrender of the possession thereof to him and the cancellation of the Deed of Sale of said portion of 508.56 square meters, but all the demands were unjustifiably refused.

In their Answer (pp. 8-11, records), defendants denied the material allegations of the complaint and alleged, by way of special and

affirmative defense, that Rodolfo M. Tigno became the absolute and exclusive owner of the parcels of land having purchased the same after complying with all legal requirements for a valid transfer and that in selling a portion thereof to his co-defendants, he was merely exercising his right to dispose as owner; and that defendant spouses Casipit acquired the portion of 508.56 square meters in good faith and for value, relying upon the validity of the vendor's ownership.

After trial on the merits, the trial court 7 dismissed the complaint and disposed as follows: 8

Wherefore, in the light of the facts and circumstances discussed above, the court hereby renders judgment against the plaintiff and in favor of the defendants.

1. Ordering the dismissal of the plaintiffs complaint for lack of basis in fact and in law;

2. Ordering the plaintiff to pay the defendants the sum of three thousand (P3,000.00) pesos as atty's fees and further to pay the costs of the proceedings.

As earlier stated, Respondent Court reversed the trial court. Hence, this petition for review.

The Issues

Petitioners raise the following issues: 9

I Evidence of record definitely show that the receipts of payments of Petitioner Rodolfo Tigno for the fishponds in question are authenticated, contrary to the decision of the Court of Appeals

II Documents and circumstances substantiate ownership of petitioner Rodolfo Tigno

III No fiduciary relationship existed between Petitioner Rodolfo Tigno and Private Respondent Eduardo Tigno

The main issue is whether the evidence on record proves the existence of an implied trust between Petitioner Rodolfo Tigno and Private Respondent Eduardo Tigno. In petitions for review under Rule 45, this Court ordinarily passes upon questions of law only. However, in the present case, there is a conflict between the factual findings of the trial court and those of the Respondent Court. Hence, this Court decided to take up and rule on such factual issue, as an exception to the general rule. A corollary question is whether Petitioners Edualino and Evelyn Casipit are purchasers in good faith and for value of a portion of the lots allegedly held in trust and whether they may thus acquire ownership over the said property.

The Court's Ruling

The petition has no merit.

First Issue: Was an Implied Trust Created?

Implied trusts are those which are deducible by operation of law from the nature of the transaction as matters of equity, independently of the particular intention of the parties. 10 An implied trust arises where a person purchases land with his own money and takes conveyance thereof in the name of another. In such a case, the property is held on resulting trust in favor of the one furnishing the consideration for the transfer, unless a different intention or understanding appears. The trust which results under such circumstances does not arise from a contract or an agreement of the parties, but from the facts and circumstances; that is to say, the trust results because of equity and it arises by implication or operation of law. 11 The species of implied trust raised by private respondent was extensively discussed by the Court, through the learned Mr. Justice Hilario G. Davide, Jr., in Morales, et al. vs. Court of Appeals, et al.: 12

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. 13 The characteristics of a trust are:

1. It is a relationship;

2. it is a relationship of fiduciary character;

3. it is a relationship with respect to property, not one involving merely personal duties;

4. 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

5. it arises as a result of a manifestation of intention to create the relationship. 14

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, 15 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. 16

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 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. 20

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, 22 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 Chiao Liong Tan vs. Court of Appeals, we ruled: 24

A certificate of registration of a motor vehicle in one's name indeed creates a strong presumption of ownership. For all practical purposes, the person in whose favor it has been issued is virtually the owner thereof unless proved otherwise. In other words, such presumption is

rebuttable by competent proof.

The New Civil Code recognizes cases of implied trust other than those enumerated therein. (fn: Art. 1447, New Civil Code) Thus, although no specific provision could be cited to apply to the parties herein, it is undeniable that an implied trust was created when the certificate of registration of the motor vehicle was placed in the name of petitioner although the price thereof was not paid by him but by private respondent. The principle that a trustee who puts a certificate of registration in his name cannot repudiate the trust by relying on the registration is one of the well-known limitations upon a title. A trust, which derives its strength from the confidence one reposes on another especially between brothers, does not lose that character simply because of what appears in a legal document.

Even under the Torrens System of land registration, this Court in some instances did away with the irrevocability or indefeasibility of a certificate of title to prevent injustice against the rightful owner of the property. (fn: Bornales v. IAC, G.R. No. 75336, 166 SCRA 524 [1988]; Amerol v. Bagumbayan, G.R. No. L-33261, 154 SCRA 403 [1987]; Cardiente v. IAC, G.R. No. 73651, 155 SCRA 689 [1987].)

In this petition, petitioners deny that an implied trust was constituted between the brothers Rodolfo and Eduardo. They contend that, contrary to the findings of Respondent Court, their Exhibit 16 25 and Exhibit 17 26

were fully authenticated by Dominador Cruz, an "instrumental witness." Hence, he should not be allowed to vary the plain content of the two documents indicating that Rodolfo Tigno was the vendee.

We not persuaded. Witness Dominador Cruz did not authenticate the genuineness of Exhibit 16: 27

ATTY. BERMUDEZ:

As Exhibit "16" dated June 12, 1980 signed by Remedios Sison, is that the document executed Remedios Sison?

ATTY. VIRAY:

That is only a xerox copy, we object, Your Honor.

ATTY. BERMUDEZ:

At any rate there was a receipt, is this the receipt?

A Maybe this or maybe not, sir.

ATTY. BERMUDEZ:

Q I am showing to you another document, which we respectfully request that the same be marked as Exhibit "17".

In any event, these two exhibits are proof merely of the receipt of money by the seller; they do not show that Rodolfo paid the balance of the

purchase price. 28 On the other hand, Witness Dominador Cruz was unshakable in testifying that Private Respondent Eduardo, though not named in the receipts or in the deeds of sale, was definitely the real buyer: 29

COURT: (The Court will ask few questions.)

Q Do you know if there [is] a document executed between the brothers to show the real vendee in these three deeds of absolute sale is Eduardo Tigno?

A I don't know of any document because according to Eduardo Tigno it will be placed in the name of his brother, Rodolfo Tigno so that it can be used as collateral.

COURT:

Q Being the agent of this transaction did you not try to advice Eduardo Tigno to be safe for him a document will have to be executed showing that he is really the vendee?

A I also explained that matter to him I know that matter to happen in the long run they will have dispute but Eduardo Tigno said he is his brother, he have [sic] trust and confidence in his brother, sir.

COURT:

Q When did you give that advice?

A Before the preparation of the documents, sir.

Q Do you know already that it will be in the name of Rofolfo [sic] Tigno before the execution?

A Yes, sir. During the time we have conversation on May 2, 1980, he instructed me to place the name of Rodolfo Tigno in the document, Atty. Manuel was present when he gave that advice, sir.

COURT:

Q What did Atty. Manuel advised [sic]?

A The reason for [sic] Eduardo Tigno have trust and confidence on his elder brother, Rodolfo Tigno.

COURT: (Propounding questions)

Q So there is nothing written that will show that the money or purchase price came from Eduardo Tigno, is that correct?

A None, sir. It's by trust and confidence,

Q Considering that you know that the money came from Eduardo Tigno, why did you consent that the deed of absolute sale in the name of Rodolfo Tigno and not Eduardo Tigno?

A Because Atty. Manuel called for Rodolfo Tigno because the document was in the name of Rodolfo Tigno, sir.

Q The document is already defective, why did you not ask the preparation of the document to be executed by Rodolfo Tigno accordingly that the real owner who sold to you is the brother, Eduardo Tigno?

A I did not think of it, what I know is that the real owner is Eduardo Tigno, sir, and has the power to disposed.

COURT:

Q Eduardo Tigno is the real owner, why did you agree that Rodolfo Tigno to execute the document?

A Yes, sir. Atty. Manuel called for Rodolfo Tigno so I consented.

Aside from the "trust and confidence" reposed in him by his brother, Petitioner Rodolfo was named as vendee in the deeds of sale to facilitate the loan and mortgage the brothers were applying for to rehabilitate the fishponds. Be it remembered that private respondent was a Makati-based business executive who had no time to follow up the loan application at the PNB branch in Lingayen, Pangasinan and, at the same time, to tend the fish farm on a daily basis. Atty. Modesto Manuel, who prepared and notarized the deeds of sale, unhesitatingly affirmed the unwritten agreement between the two brothers: 30

ATTY. VIRAY:

Will you please tell the Court what is the reason, if ever there was, why the plaintiff, Eduardo Tigno, instructed you to put the name of Rodolfo Tigno as vendee in the papers?

ATTY. BERMUDEZ:

We object, Your Honor. The best witness to that is the plaintiff, Your Honor.

COURT:

Q Do you know the reason why Eduardo Tigno requested you to place the name of his brother as vendee?

WITNESS:

A Eduardo Tigno requested me to place the name of his brother as vendee so that the brother can use the lands as collateral for possible loan at the PNB (Philippine National Bank), sir.

COURT:

Go ahead.

ATTY. VIRAY:

Q When was that when the plaintiff instructed you to place the name of his brother, the defendant, Rodolfo Tigno as vendee in the documents so that the defendant, Rodolfo Tigno, could use the properties as collateral for possible loan to the PNB?

WITNESS:

A It was sometimes during a fiesta in Guilig when Eduardo Tigno and Dominador Cruz, I think that was May 2, 1980, when Eduardo Tigno and Dominador Cruz and some of the vendors went to my house and they requested me to prepare the deeds of sale, sir.

In his direct examination, Atty. Manuel convincingly explained why Petitioner Rodolfo was named as vendee: 31

ATTY. VIRAY:

Q When the plaintiff Eduardo Tigno instructed you to place the name of his brother as the vendee in the deeds of sale you were to prepare, what did you tell him or did you give any advice?

A Yes, sir. I certainly did, sir.

Q What advice?

A Why will I put the name of your brother as vendee when you were here as real buyer who will give the money to the vendors? Why not you, I told him, sir.

Q What else did you tell him?

A I remember he is to make Special Power of Attorney in order his brother (sic) will execute the loan to the PNB, sir.

Q What did the plaintiff, Eduardo Tigno, tell you when you said it would be best to execute the Special Power of Attorney instead of placing the name directly in the deeds of sale, what is his answer?

A He acceded to my advised [sic], sir. All right, make the deeds of sale, he said, agreeable to the deed of sale to my advised but when I told him that It would take the document probably by the middle of June, he back [sic] out, sir, because he told me he is going abroad and he may not be around and then he instructed me to place the name of his brother as the vendee not the plaintiff anymore, sir.

Q In other words, Mr. Witness, at first he was agreeable and that he would execute Special Power of Attorney?

A Yes, sir.

Q Since he was going to the United States and he could not wait the preparation of the documents he just instructed you to go ahead with the first instruction, is that what you mean, Mr. Witness?

A Yes, sir. (Emphasis supplied.)

This testimony of Atty. Manuel was corroborated by Dominador Cruz who was the real estate agent cum witness in all three deeds of sale. As a witness, he pointed out that Petitioner Rodolfo was named as the vendee in the deeds of sale upon the order of private respondent: 32

ATTY. VIRAY:

Q When you said Atty. Manuel was not able to prepare the deed of sale on May 2, 1980, what then happened in the house of Atty. Manuel?

A When Atty. Manuel was not able to prepare the document, my cousins wanted to get advance payment, one half of ten thousand pesos, sir, each.

ATTY. VIRAY:

Q Did Eduardo Tigno agreed [sic] to the request of your cousins to get one half of the price of their land?

A He agreed to give five thousand pesos each but he prepared temporary receipt fpr [sic] five thousand pesos, sir.

Q Who prepared the receipt?

A Atty. Manuel, sir.

Q By the way, how much all in all did Eduardo Tigno give on May 2, 1980 as advanced consideration?

A P15,000.00, sir.

Q You mean to say five thousand pesos for each parcel of land?

A Yes, sir.

Q After the plaintiff, Eduardo Tigno paid the advanced payment for five thousand pesos for each parcel of land, what else happened?

A When the three of us, I, Atty. Manuel and Eduardo Tigno were talking, I heard Eduardo Tigno said to Attyl. [sic] Manuel that the deed of sale will be placed in the name of my brother, Rodolfo because we will mortgage the land with the P.N.B., the proceeds will be used in the development of the fishpond. He requested that the buyer of the fishpond will be placed in the name of the brother of Eduardo Tigno.

Q Who is that brother of Eduardo Tigno?

A Rodolfo Tigno.

xxx xxx xxx

Q How about the balance of the purchase price of the property, is there any instruction made by Eduardo Tigno with respect to the payment thereof?

A With respect to the balance after the preparation of the document they

will bring it to Eduardo Tigno for him to pay the balance, sir.

Q By the way, was the deed of sale to these parcels of land finally executed?

A Yes, sir.

From the foregoing, it is clear that the name of Rodolfo Tigno appeared in the deeds of sale not for the purpose of transferring ownership to him but only to enable him to hold the property in trust for his brother, herein private respondent.

In the face of the credible and straightforward testimony of the two witnesses, Cruz and Manuel, the probative value, if any, of the tax declarations being in the name of Petitioner Rodolfo is utterly minimal to show ownership. Suffice it to say that these documents, by themselves, are not conclusive evidence of ownership. 33

Contrary to petitioners' insistence, no delay may be imputed to private respondent. When private respondent went to Pangasinan to pay the taxes on his property in Bugallon, he learned from his relatives that his brother was negotiating the sale of a portion of the fishponds to Spouses Casipit. Failing to find his brother, he immediately wrote a letter dated May 16, 1989 addressed to the Casipits advising them to desist from buying the property because he was the real owner. On May 18, 1989, he confronted Petitioner Edualino Casipit about the impending sale, only to learn that the sale had already been consummated as early as April 29, 1989. 34 Failing to convince petitioners to annul the sale, private respondent instituted this case on May 24, 1989 35 or five (5) days after learning from Edualino of the consummation of the sale. 36 Before the institution of this case, private respondent had no reason to sue. Indeed, he filed this case after only five days from learning of the infidelity of his brother. Clearly, no delay may be attributed to private respondent.

We agree with the detailed disquisitions of the Court of Appeals on this point: 37

The trial court's conclusion that defendant-appellee is the true buyer and owner of the lands in question, mainly relying on the Deeds of Sale where defendant Rodolfo's name appears as vendee, and on the Tax Declarations and Tax payment receipts in his name, must inevitably yield to the clear and positive evidence of plaintiff. Firstly, as has thus been fully established, the only reason why defendant Rodolfo was made to appear as the buyer in the Deeds of Sale was to facilitate their mortgage with the PNB Branch at Lingayen to generate seed capital for the fishponds, out of which Rodolfo could derive income. With Rodolfo's name as vendee, there would be no need anymore for the personal presence of plaintiff-appellant who was very busy with his work in Manila. Moreover, aside from the fact that plaintiff was to travel abroad for thirty (30) days sometime in June, 1980, he could not have executed a Special Power of Attorney in favor of Rodolfo, as the Deeds of Sale

were not yet prepared on May 2, 1980. Thus, to enable Rodolfo to mortgage the lands, his name was put as vendee in view of the mutural [sic] trust and confidence existing between said parties who are brothers. Secondly, it is well-settled that the tax declarations or the payments of real estate taxes on the land are not conclusive evidence of ownership of the declarant or payor (De Guzman v. CA, et al., L-47378, Feb. 27, 1987, and cases cited therein; Cited in II Regalado REMEDIAL LAW COMPENDIUM, p. 563 [1988]). Since defendant Rodolfo is named as vendee in the Deeds of Sale, it is only natural that Tax Declarations and the corresponding tax payment receipts be in his name so as to effect payment thereof.

Petitioners contend that there was no "fiduciary relationship" created between the brothers Tigno. Petitioners argue that Rodolfo Tigno "had exercised all the acts of dominion and ownership over the fishponds in question," as nobody "shared in the produce of the fishponds for the past nine (9) years." Therefore, Petitioner Rodolfo, "being the real purchaser" of the parcels of land, "could validly transfer the ownership of a portion" to Spouses Casipit. 38

We firmly reject these contentions and need only to cite Respondent Court's incisive findings:

After a careful examination of the evidence on record, we hold that an implied trust was created in favor of the plaintiff [private respondent herein] within the meaning of Article 1448 of the Civil Code, which provides:

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. . . . .

An implied trust arises where a person purchases land with his own money and takes conveyance thereof in the name of another. In such case, the property is held on a resulting trust in favor of the one furnishing the consideration for the transfer, unless a different intention or understanding appears. (Lim vs. Court of Appeals, 65 SCRA 160)

In the earlier case of Heirs of Candelaria, et al. v. Romero, at al., 109 Phil. 500, the Supreme Court elucidated on implied trust:

The trust alleged to have been created in our opinion, is an implied trust. As held, in effect, by this Court in the case of Martinez v. Griño (42 Phil. 35), where property is taken by a person under an agreement to hold it for or convey it to another or the grantor, a resulting or implied trust arises in favor of the person for whose benefit the property was intended.

xxx xxx xxx

It is also the rule that an implied trust arises where a person purchases

land with his own money and takes a conveyance thereof in the name of another. In such a case, the property is held on a resulting trust in favor of the one furnishing the consideration for the transfer, unless a different intention or understanding appears. The trust which results under such circumstances does not arise from contract or agreement on the parties, but from the facts and circumstances, that is to say, it results because of equity and arises by implication or operation of law.

We disagree with the trial court's ruling that if, indeed, a trust has been established, it is an express trust which cannot be proved by parol evidence. It must be noted that Article 1441 of the Civil Code defines both express trust and implied trust in general terms, thus:

Art. 1441. Trusts are either express or implied. Express trust are created by the intention of the trustor or of the parties. Implied trust come into being by operation of law.

Specific instances or examples of implied trusts are given in the Civil Code, one of which is described under Article 1448 quoted heretofore. Since Article 1448 is a specific provision, it prevails over and qualifies Article 1441, which is a general provision, under the rule generalia specialibus non derogant (Alcantara, Statutes, 1990 Ed., p. 101).

Therefore, since this case involves an implied trust falling under Article 1448, parol evidence is allowed to prove its existence pursuant to Article 1457, Civil Code, which states:

Art. 1457. An implied trust may be proved by oral evidence.

xxx xxx xxx

On the other hand, the record is replete with clear and convincing evidence to show that (1) plaintiff Eduardo Tigno is the real buyer and true owner of the lands in question and (2) defendant Rodolfo M. Tigno is merely a trustee constituted over said lands on behalf of plaintiff.

It was established thru plaintiff's testimony that plaintiff paid P5,000.00 each, as first installment, to the three vendors for a total of P15,000.00 (TSN, Sept. 5, 1989, pp. 19-20), which was witnessed by Dominador Cruz and Atty. Manuel. Later, he gave a check to Dominador Cruz, the agent, in the amount of P26,000.00, representing the following:

a) P15,000.00 as the balance for the three (3) parcels of land;

b) P6,000.00 representing Cruz's commission as agent;

c) P5,000.00 for capital gains tax, registration and other incidental expenses. (TSN, Sept. 5, 1989, pp. 39-41).

When this check was encashed, Cruz paid the three vendors the balance due them (TSN, Sept. 5, 1989, pp. 42-43). That plaintiff was able to pay these amounts is believable, because plaintiff had the financial means to pay said amounts. At the time of the sale in 1980, plaintiff was an

executive of Meryll Lynch, Pierce, Fennon S. Smith Phil., Inc., where he received P311,700.79 in 1980 alone, as shown by his Certificate of Income Tax Withheld on Wages for said year (Exhibit G for plaintiff).

Indeed, by express provision of the Civil Code, 39 oral evidence is admissible to establish a trust relation between the Tigno brothers. Private respondent explained how this trust was created: 40

ATTY. VIRAY

Q When you said Dominador Cruz was able to bring the vendors at Guilig street, Lingayen, what happened there?

A They came to our family home at Guilig street and we went to the house of Atty. Modesto Manuel, sir.

Q Why did you go to the house of Atty. Manuel?

A For the executionof [sic] the deed of sale of the property I am going to buy, sir.

Q Was the deed of sale finished on that day?

A No, sir.

Q What was the reason?

A The vendors did not bring the tax declarations, secondly, the other heirs failed to get the power of attorney from their sister in United States.

Q When the deed of sale were not executed on that day, what transpired?

A The vendors requested for advance payment of P5,000.00 each for the three parcels of land.

Q Did you agree to the request of the vendors for the advance payment of P5,000.00 each for the three parcels of land?

A Yes, sir.

Q Did you comply?

A Yes, sir.

Q How much all in all?

A P15,000.00 in cash, sir.

Q Was there any receipt signed evidencing receipt for that?

A There was receipt for the P15,000.00

Q Where is that receipt now?

A I gave all the papers to him in my brown envelope, I trust [sic] him.

Q Do you remember in whose name the vendors allegedly to have received the P15,000.00?

A In my name, received from Eduardo Tigno.

Q After giving the P15,000.00 advance payment which you said the deed of sale were not executed because of some requirement were not available, what happened next?

A I talked to Atty. Manuel separately from the vendors, and I told him to prepare the deed of sale at that time and I told him to place my older brother, Rodolfo Tigno as vendee because I have plan to mortgage the property in PNB, Lingayen, sir.

xxx xxx xxx

Q Aside from instructing Atty. Manuel to place the name of your brother, Rodolfo Tigno, did you also instruct Dominador Cruz for the payment of the balance?

A Yes, sir.

Q What was your instruction to Dominador Cruz?

A I told Dominador Cruz, I am leaving for United States, I will be back first week of July, after the completion of the papers, see me on the second week of July and I will give the whole payment of the property.

Q And was the deed of sale covering the three parcels of land completed?

A Yes, sir.

Q Did Dominador Cruz bring the documents to you in your office in Makati?

A Yes, sir.

Q When was that?

A First week of July 1980, sir.

Q Did you give the payment of the balance?

A Yes, sir. After going over the documents, I issued to him a check payable in the sum of P26,000.00.

The previously quoted testimonies of Modesto Manuel and Dominador Cruz substantially corroborate private respondent's testimony.

On the other hand, Petitioner Rodolfo, although in possession of the deeds of sale in his name, failed to present a single witness to corroborate his claim that he bought the property partly with his own money and partly with the money he allegedly borrowed from a certain Jose Manaoat. His failure to present Manaoat gives rise to a presumption that the latter's testimony, if given, would have been unfavorable to the

former. 41 Respondent Court did not give credence to the financial capacity of Petitioner Rodolfo Tigno: 42

Defendant Rodolfo's denial of plaintiff's evidence, and his bare testimony that he was the real buyer, without corroboration by other witnesses, cannot be given credence and do not deserve belief. It was unlikely that he had the financial means to pay for the lands in the total amount of P53,000.00. As testified to by Arnulfo Peralta (TSN, Sept. 29, 1988, pp. 36-37), Rodolfo was jobless then, and at one time or another was even supported financially by plaintiff, as testified to by plaintiff (TSN, Oct. 16, 1989, pp. 11-12), which in fact was confirmed by Rodolfo during his cross-examination (TSN, Oct. 18, 1989, pp. 6-7). If indeed he was engaged in some piggery, as he claimed, his financial capability is rendered doubtful by the fact that no evidence, other than his bare testimony, was presented to show his income, like an income tax return. His bare testimony that he borrowed P20,000.00 from Jose Manaoat to raise partly the amount of P53,000.00 lacks credibility. Manaoat, who was in the best position to testify that Rodolfo borrowed money from him, was never presented, which would gives rise to the presumption that his testimony would be adverse to defendant, if presented. (Sec. 3[e], Rule 131, Rules of Court).

From the foregoing, it is ineludible that Article 1448 of the Civil Code finds application in this case. Although the deeds of sale were in the name of Petitioner Rodolfo, the purchase price was paid by private respondent who was the real owner of the property. Petitioner Rodolfo is the trustee, and private respondent is the beneficiary.

Second Issue: Are Petitioners Casipit Purchasers in Good Faith?

Spouses Edualino and Evelyn Casipit contend that they "are purchasers in good faith" and for valuable consideration; thus, they cannot be deprived of the land they bought from Rodolfo Tigno. 43

This posturing is unacceptable. First, unrebutted is the emphatic testimony of private respondent that Edualino was invited on May 2, 1980 to a picnic in the fishpond. At the picnic, private respondent informed Petitioner Edualino Casipit that he was the owner of the property. On this point, private respondent testified: 44

ATTY. VIRAY:

Q You said Edualino Casipit very well knew that the property is owned by you, what made you say that the defendant Edualino Casipit very well knew that you are the owner of the property he bought?

A Way back in 1980 when I gave the advance payment to the vendors, I invited my friends and right there in the fishpond, we had small picnic and that my father, and Boy Casipit were there.

ATTY. VIRAY:

Q What if you invited them, sign that from that time you were the one who bought the parcels of land?

A Yes, sir.

Second, also uncontested is the testimony of Dominador Cruz that he met Edualino on April 24, 1989, or five (5) days before the consummation of the sale between Rodolfo and Spouses Casipit. During that meeting, Cruz told Edualino that he bought from private respondent a portion of the subject property for the purpose of building a dike. Thereafter, Edualino asked Cruz to buy a portion of the property from private respondent. 45

Third, and in any event, Spouses Casipit did not acquire absolute ownership over the property since the apparent vendor, Petitioner Rodolfo, did not have the right to transfer ownership thereof. Be it remembered that the fishponds were not registered under the Torrens system. Again, we cite public respondent's ruling, which we find totally persuasive: 46

It is our well-considered opinion, however, that whether or not defendant-appellee spouses are in good faith is entirely immaterial, because no valid sale in the first place was made between defendant-appellees covering the portion of land in question. The fact is, as established by the evidence on record, that defendant Rodolfo M. Tigno is not the owner of the lands in question, but a mere trustee thereof, and could not have transferred ownership of said lands, by way of sale, to his co-defendant-appellee spouses. As a matter of basic principle in the law on sales, a person cannot transfer ownership, by way of sale, of something over which he has no right to transfer. Thus, Article 1459 of the Civil Code provides:

Art. 1459. The thing must be licit and the vendor must have a right to transfer the ownership thereof at the time it is delivered. (Emphasis supplied)

Since defendant-appellee is not the owner of the lands in question, which are not registered under the Torrens system, he could not by way of sale have transferred, as he has no right to transfer, ownership of a portion thereof, at the time of delivery.

WHEREFORE, premises considered, the petition is hereby DENIED and the assailed Decision and Resolution are AFFIRMED in toto. Costs against petitioners.

SO ORDERED.

Narvasa, C.J., Romero, Melo and Francisco, JJ., concur.

Footnotes

1 Rollo, pp. 42-60.

2 Second Division composed of Acting Presiding Justice Santiago M. Kapunan (now Associate Justice of this Court), ponente, and JJ. Oscar M. Herrera and Serafin V.C. Guingona, concurring.

3 Rollo, p. 71.

4 Ibid., p. 59.

5 Ibid., pp. 71.

6 Ibid., pp. 43-48.

7 Regional Trial Court, Branch 38 of Lingayen, Pangasinan, presided by Judge Antonio M. Belen.

8 Rollo, p. 29.

9 Ibid., pp. 8, 10 & 12-13; petition pp. 7, 9 & 11-12; original text in upper case.

10 Meynardo Policarpio vs. Court of Appeals, et al. G.R. 116211, p. 12, March 7, 1997, per Panganiban, J. citing Cuaycong vs. Cuaycong, 21 SCRA 1192, 1196-1197, December 11, 1967 in turn citing 89 C.J.S. 722, 724.

11 Lim vs. Court of Appeals, 65 SCRA 161, 165-166, July 18, 1975.

12 G.R. No. 117228, pp. 10-12, June 19, 1997.

13 4 Arturo Tolentino, Commentaries And Jurisprudence On The Civil Code Of the Philippines 669 [1991] (hereafter "4 Tolentino").

14 Ibid.

15 Article 1441, Civil Code of the Philippines.

16 Huang vs. Court of Appeals, 236 420, 428 [1994]; Vda. de Esconde vs. Court of Appeals, 253 SCRA 66, 73-74 [1996].

17 76 Am. Jur. 2d Trusts § 179 [1992].

18 Ibid.

19 76 Am. Jur. 2d Trusts § 180.

20 4 Tolentino, 679-680.

21 76 A.m. Jur. 2d Trusts § 688 [1992].

22 Article 1457, Civil Code.

23 Salao vs. Salao, 70 SCRA 65, 84 [1976]; O'laco vs. Co Cho Chit, 220 SCRA 656, 664-665 [1993]; Ong Ching Po vs. Court of Appeals, 239 SCRA 341, 347 [1994].

24 228 SCRA 75, 80-81, November 19, 1993, per Nocon, J.

25 The receipt for P15,000.00 as partial payment issued by Vendor

Remedios Sison for her lot.

26 This is the receipt for P13,333.35 as full payment issued by Vendor Manuel Sison as one of the heirs of Isaac Sison for their lot. See also Exhibits for the Defendants in Civil Case No. 16673.

27 TSN, September 5, 1989, p. 57.

28 TSN, September 5, 1989, p. 59.

29 TSN, September 5, 1989, pp. 64-67.

30 TSN, September 27, 1989, pp. 16-17.

31 TSN, September 27, 1989, pp. 23-26.

32 TSN, September 5, 1989, pp. 19-22.

33 Rivera vs. Court of Appeals, 244 SCRA 218, 222, May 22, 1995, citing Republic vs. Intermediate Appellate Court, G.R. No. 74830, July 5, 1993, 224 SCRA 285; Director of Lands vs. Intermediate Appellate Court, G.R. No. 73246, March 2, 1993, 219 SCRA 339; De Jesus vs. Court of Appeals, G.R. No. 57092, January 21, 1993, 217 SCRA 307; Director of Lands vs. Buyo, G.R. No. 91189, November 27, 1992, 216 SCRA 78.

34 Exhibit E for the Plaintiff.

35 Original records of Civil Case No. 16673, p. 1.

36 TSN, October 16, 1989, pp. 25-30.

37 Ibid., pp. 56-57.

38 Rollo, pp. 14-15.

39 "Art. 1457. An implied trust may be proved by oral evidence."

40 TSN, October 16, 1989, pp. 12-17.

41 Rule 131 of the Rules of Court, Section 3, paragraph (e).

42 Rollo, p. 56, Decision, p. 15.

43 Rollo, p. 15.

44 TSN, October 16, 1989, pp. 30-31.

45 TSN, November 6, 1989, p. 10.

46 Ibid, p. 59; Decision, p. 18.

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

 

G.R. No. 108547 February 3, 1997

FELICIDAD VDA. DE CABRERA, MARYJANE CABRERA and FELICIDAD TEOKEMIAN, petitioners, vs.COURT OF APPEALS and VIRGILIA ORAIS DE FELICIO, represented by her Attorney-in-Fact, ERNESTO M. ORAIS, respondents.

 

TORRES, JR., J.:

Assailed in this Petition for Review on Certiorari is the Decision 1 of the respondent Court of Appeals dated January 7, 1993 in CA-G.R. No. 22407-CV, the dispositive portion of which reads:

WHEREFORE, the decision of the lower court is hereby REVERSED and judgment is hereby entered ordering defendants Felicidad Vda. de Cabrera and Marykane Cabrera to vacate the portion of Lot 2238 occupied by them and surrender possession thereof to plaintiff.

SO ORDERED.

Reversed by the foregoing pronouncements was the decision 2 of the Regional Trial Court, Branch 7, Baganga, Davao Oriental in Civil Case No. 379, an action for "Quieting of Title to Real Property, Damages with Preliminary Injunction." The trial court's disposition reads:

WHEREFORE, the plaintiff is hereby ordered:

(a) to execute a reconveyance within thirty (30) days after this decision shall have become final and executory in favor of defendant Felicidad Vda. De Cabrera corresponding only to that portion of Lot No. 2239 actually and physically possessed and occupied by the defendant as seen from the sketch plan of Engr. Enecio Magno (Exh. "2") and pinpointed and identified during the ocular investigation as to its extent and boundaries of the said portion bought by defendants Felicidad Vda. De Cabrera from Felicidad Teokemian;

(b) To reimburse defendants for litigation expenses and attorney's fees in the amount of P7,000.00; and

(c) To pay the cost.

SO ORDERED.

We are restating the facts as determined by the appellate court, viz:

On January 16, 1950, a Deed of Sale (Exh. B) was executed by Daniel Teokemian and Albertana Teokemian in favor of Andres Orais over a parcel of unregistered land situated at Abejod, Cateel, Davao Oriental with an area described as 7.3720 hectares. The property was owned in common by Daniel and Albertana and their sister Felicidad Teokemian, having inherited the same from their late father, Domingo Teokemian. However, the Deed of Sale was not signed by Felicidad, although her name was printed therein as one of the vendors. On January 26, 1950, the parcel of land was surveyed in the name of Virgilia Orais, daughter of the vendee Andres Orais, and denominated as Lot No. 2239, PLS-287, Cateel Cadastre. As surveyed, the property had an area of 11.1000 hectares.

On June 24, 1957, Virgilia Orais was issued Free Patent No. V-79089. Original Certificate of Title No. P-10908 was issued in her name (Exh. A).

On July 27, 1972, Alberto (sic Albertana) Teokemian executed a Deed of Absolute Sale conveying to Elano Cabrera, husband of Felicidad Cabrera, "ONE HALF PORTION OF LOT NO. 2239. Cad-287, eastern portion, containing an area of FIFTY FIVE THOUSAND FIVE HUNDRED TEN (55,510) SQUARE METERS, more or less" (Exh. 3), which portion supposedly corresponded to the one-third share in Lot 2239 of Felicidad Teokemian who was not a party to the Deed of Sale earlier executed by her brother and sister in favor of Andres Orais, Virgilia Orais' predecessor-in-interest. It was explained by Felicidad Cabrera that the Deed of Sale was signed by Albertana Teokemian, not by Felicidad Teokemian, because the whole of Lot 2239 was adjudicated to Albertana in a decision of a cadastral court dated June 8, 1965 as evidenced by a Certification of an officer-in-charge of the Office of the Clerk of Court, RTC, Br. 7, Baganga, Davao Oriental (Exh. 4). Felicidad Cabrera and her husband immediately took possession of the western portion of Lot 2239.

In 1974 and 1978, Virgilia Orais' brothers, Rodolfo and Jimmy Orais went to Cateel, Davao Oriental and confronted the Cabreras of the latter's alleged encroachment and illegal occupation of their sister's land, but no concrete action on the matter was pursued by Virgilia Orais until February 11, 1988 when she filed Civil Case No. 379 against Felicidad Cabrera, now a widow, and her daughter Marykane Cabrera for "Quieting of Title to Real Property, Damages with Preliminary Mandatory Injunction."

The complaint, which was amended on June 22, 1988 by including Felicidad Teokemian as party defendant (pp. 42-47, Records), alleged that sometime in 1972 and 1973 the late Elano Cabrera and defendant Felicidad Cabrera, knowing that Lot 2239 was already registered in the

name of the plaintiff, prepared a document of sale and had Felicidad Teokemian sign it conveying a portion of said lot to them as described in the Sketch Map (Annex D of the Complaint), after which they entered and possessed said portion and enjoyed the fruits thereon. Plaintiff further averred that by reason of the document of sale and the declaration of the property involved in the name of defendant Felicidad Vda. De Cabrera, there created a cloud of doubt on the former's title on said property.

Plaintiff prayed as follows:

WHEREFORE premises considered, plaintiff through the undersigned counsel respectfully prays this Honorable Court that:

a) After due notice and hearing, a Writ of Preliminary Mandatory Injunction be issued restraining the defendants from further dispossessing the plaintiff of the land in question;

b) Ordering the defendants to pay jointly the plaintiff the amount of not less than Sixteen Thousand Two Hundred (P16,200) as total value of the rice produced from the riceland in question, and the amount of Twenty One Thousand Six Hundred (P21,600.00) Pesos as the total proceeds of the nuts of the coconut land in question;

c) The Defendants be ordered to pay the plaintiff the amount of Twenty Thousand (P20,000.00) Pesos and Ten Thousand (P10,000.00) Pesos as litigation expenses;

d) The defendants be ordered to pay Six Thousand (P6,000.00) Pesos for attorney's fees; Four Hundred (P400.00) Pesos as expenses for every appearance in Court;

e) The document of sale executed by Felicidad Teokemian and the Tax Declarations issued to the late Elano Cabrera and Felicidad Vda. De Cabrera and the subsequent Tax Declaration creating a cloud of doubt on the title, possession, rights and interest be declared null and void for being fraudulent and without any legal basis and inexistent; and

f) Such other reliefs and remedies which this Honorable Court may deem just, proper, and equitable in the premises.'

In their answer with counterclaim (pp. 10-18, Records), defendants alleged that they acquired a portion of Lot 2239 in good faith and for value; that said portion was owned by Felicidad Teokemian who was not a party to the Deed of Sale executed by Daniel and Albertana Teokemian on January 16, 1950 in favor of Andres Orais over Lot 2239; that not having signed the Deed of Sale, Felicidad Teokemian's one-third share in Lot 2239 could not have been legally conveyed to Andres Orais; that Virgilia Orais (successor-in-interest of Andres Orais) committed fraud in including the portion owned by Felicidad Teokemian in her applying for free patent over Lot 2239 is concerned pursuant to Art. 1456 of the Civil Code; and that plaintiff is guilty of laches for not initiating an action

against defendants to recover the western portion of Lot 2239 despite plaintiff's knowledge of defendant's acquisition thereof in 1972, as in fact it was only in 1988 when the complaint for quieting of title was filed in court.

Defendants prayed, thus:

"WHEREFORE, this Honorable Court, after due notice and hearing on the merits of this case; to issue order or orders;

1. Finding the defendants as the rightful, lawful, and legal owner of that portion which was sold to them by Felicidad Teokemian and which was included in the title of plaintiff;

2. To find that the plaintiff did not own the said portion and that they have personal knowledge of the same when the plaintiff filed and secured the title under the Administrative Proceeding;

3. Finding that the plaintiff is only holding the title to that portion only in an implied trust in favor of the real owner;

4. Finding the plaintiff legally obligated to cause the segregation of the portion at their expense and deliver formally the said portion to the real owners, the defendants.

5. To order the plaintiff to execute, prepare and or make any instrument or document to finally vest in the Defendants absolute, clear and flawless title or ownership over the portion which the plaintiff holds title in trust in defendant's favor.

6. To Order the Plaintiff to pay actual damages in the sum of P2,000.00 as litigation expense and Attorney's fees in the sum of P5,000.00 in favor of defendants;

7. To direct the plaintiff to account for the share of the real owner of the portion of land illegally cultivated and planted by plaintiff to rice in favor of FELICIDAD TEOKEMIAN to be paid thru the Defendants who are the owners, which consisted in ONE THIRD OF THE RICE HARVEST every year since the year 1950 to 1972 when the portion was sold and cultivated by defendant based on the computation of income by the plaintiff in Paragraph 16, a paragraph in the Second Cause of Action of the complaint;

and to grant the defendants such other reliefs and remedies proper and equitable in the premises. 3

On April 27, 1989, the lower court rendered judgment in favor of defendants and against the plaintiff, ruling that the latter can no longer recover the western portion of Lot 2239 conveyed in 1972 by Felicidad Teokemian in favor of the late Elano Cabrera and Felicidad Cabrera due to laches. In support of its findings, the trial court referred to the Court's pronouncements in Lola vs. Court of Appeals 4, where it was held that although the defense of prescription is unavailing to the petitioners,

because, admittedly, the title to the subject lot was still registered in the name of the respondent, still the petitioners have acquired title to it by virtue of the equitable principle of laches due to the respondent's failure to assert her claim and ownership for thirty-two years; and in Republic vs. Court of Appeals 5 that, while it is true that by themselves tax receipts and declaration of ownership for taxation purposes are not incontrovertible evidence of ownership, they become strong evidence of ownership acquired by prescription when accompanied by proof of actual possession of the property; and in Miguel vs. Catalino, 6 that even granting appellant's proposition that no prescription lies against their fathers' recorded title, their passivity and inaction for more than thirty four years justifies the defendant appellee in setting up the equitable defense of laches in his own behalf.

The respondent Court of Appeals reversed such findings upon appeal.

Even as the appellate court observed that the registration made by the plaintiff was fraudulent insofar as it involved the one-third interest of Felicidad Teokemian, which was not included in the sale executed by Albertana and Daniel Teokemian, it nevertheless upheld its effects, on the justification that the defendants' action for reconveyance based on an implied trust had already been barred by prescription. Furthermore, the action of the plaintiff is not barred by laches as was held by the lower court.

Said the appellate court:

We disagree with the lower court's ruling that plaintiff is barred from bringing an action for recovery of ownership. Parenthetically, while the complaint filed by plaintiff is designated as one for quieting of title, the allegations therein show that it is actually for recovery of ownership/possession.

First. The Deed of Absolute Sale dated May 27, 1972 (Exh. 3) executed by Albertana Teokemian in favor of Elcano Cabrera over the portion of 55,510 square meters of Lot 2238 which allegedly pertained to the one-third interest of Felicidad Teokemian did not convey any title to Elcano Cabrera, assuming that Felicidad Teokemian still owned a one-third portion of Lot 2238 which was already registered in plaintiffs name, considering that Albertana did not have any authority from Felicidad Teokemian to effect such conveyance. Consequently, defendants Felicidad vda. De Cabrera and Marykane Cabrera had acquired no title upon which to anchor their claim of ownership over the one-third portion. Such being the case, plaintiffs cannot be barred by laches from instituting the action to quiet title against defendants

xxx xxx xxx

Second. There was no allegation, much less proof, that Lot 2239 had been partitioned among the co-owners Daniel, Albertana, and Felicidad, all surnamed Teokemian, before the land was sold to Andres Orais in

1950 when the same was still unregistered. This being the case, and assuming that Felicidad Teokemian had retained ownership over an undivided one-third portion of Lot 2239 despite its being titled in plaintiffs name in 1958, Felicidad Teokemian could only dispose her undivided interest, not a definite portion described in the Deed of Sale executed on July 27, 1972 (Exh. 3) as "eastern part". Worse, the supposed vendee, Elcano Cabrera, and her successors-in-interest, defendants Felicidad vda. de Cabrera and Marykane Cabrera, occupied the western portion of Lot 2239, not the eastern portion which was the subject of the sale. Their occupation of a definite portion of an undivided property, without any color of title, could not have ripened into ownership on the principle of laches.

Third. As testified to by Jimmy Orais, plaintiff's brother, it was only in 1974 when plaintiff came to know that her property was occupied by Elcano Cabrera. According to Jimmy, he and his elder brother Dr. Rodolfo Orais went to the house of Elcano Cabrera three times in 1974 and in 1979 complaining of the latter's occupancy of their sister's property. Jimmy further declared that after Elcano Cabrera was shown plaintiffs title to the property, Elcano Cabrera proposed a relocation survey of the area to determine whether the premises occupied by him were included in the plaintiff's title (T.S.N. pp. 39-44, January 3, 1989). It appears, however, that nothing came out of the proposal to conduct a relocation survey. From the time plaintiff became aware of Cabrera's possession of the western portion of Lot 2239, which was in 1974, up to the time she instituted the action for quieting of title in 1988, only fourteen (14) years had elapsed. This case, therefore, has no congruency with those cases where the Supreme Court ruled that the registered owner is barred by laches from recovering his property. Thus, in Lola vs. Court of Appeals (145 SCRA 439), the petitioners acquired title to the land owned by respondent by virtue of the equitable principles of laches due, according to the Supreme Court, to respondent's failure to assert her claims and ownership for thirty-two (32) years.' In Miguel vs. Catalino (26 SCRA 234), the Supreme Court said that appellants 'passivity and inaction for more than 34 years (1928-1962) justifies the defendant-appellee in setting up the equitable defense of laches in his behalf.' In Mejia vs. Gampomana (100 Phil 277), it was held that "the original owner's right to recover back the possession of the property and title thereto from the defendant has by the long period of 37 years and by the patentee's inaction and neglect been converted into a stale demand."

Laches, in a general sense, is failure or neglect, for an unreasonable and unexplained length of time, to do that which, by the exercise of due diligence, could or should have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it (Tijam vs. Sibonghanoy, 32 SCRA 29). Since imprescriptibility is one of the basic features of a Torrens title, it is not an ordinary delay in asserting one's right that will give rise to the application of the principle of laches, otherwise,

registered title can easily be defeated by prescription. This is precisely the reason why, in the cases cited, the delay or inaction by the registered owners in asserting their rights was considered unreasonable and unexplained because it took them from 32 to 37 years to do so. In contrast, the delay in the case at bar was only fourteen years.

While possession of defendants Felicidad vda. De Cabrera and Marykane Cabrera could not have ripened into ownership as already discussed, they are possessors in good faith of the portion occupied by them and, therefore, entitled to the benefits accorded by the Civil Code as such. 7

Sisters Felicidad Vda. de Cabrera and Marykane Cabrera, together with Felicidad Teokemian are now before the Court as Petitioners in this Petition for Review on Certiorari, seeking relief from the respondent court's decision, assigning as errors the following:

RESPONDENT COURT OF APPEALS ERRED IN RULING THAT PRIVATE RESPONDENT'S COMPLAINT FILED IN 1988 FOR QUIETING OF TITLE WHICH ACTUALLY IS ONE FOR RECOVERY OF OWNERSHIP AND POSSESSION AS FOUND BY RESPONDENT COURT IS NOT BARRED BY LACHES BECAUSE:

1. A PERIOD OF 30 YEARS HAD ELAPSED FROM 1958 WHEN TORRENS TITLE WAS ISSUED TO PRIVATE RESPONDENT TO 1988 WHEN HER COMPLAINT BELOW WAS FILED DURING WHICH PERIOD OF TIME THE PROPERTY HAS BEEN IN OPEN, CONTINUOUS AND ADVERSE POSSESSION OF THE ORIGINAL OWNER, FELICIDAD TEOKEMIAN, FROM 1958, OR EVEN EARLIER IN 1941 WHEN SHE INHERITED THE PROPERTY, TO 1972 WHEN SHE SOLD IT TO THE CABRERAS WHO CONTINUED THE PRIOR POSSESSION UNTIL 1988 WHEN PRIVATE RESPONDENT'S COMPLAINT WAS FILED.

2. ASSUMING ARGUENDO RESPONDENT COURT'S HOLDING THAT ONLY 14 YEARS HAD ELAPSED COUNTED FROM 1974 WHEN CABRERAS' POSSESSION WAS QUESTIONED BY PRIVATE RESPONDENT'S BROTHERS, STILL THAT PERIOD CONSTITUTES LACHES.

B

RESPONDENT COURT OF APPEALS ERRED IN HOLDlNG THAT LACHES DOES NOT APPLY BECAUSE WHAT WAS SOLD TO THE CABRERAS WAS A DEFINITE PORTION OF THE COMMUNITY PROPERTY BEFORE PARTITION, HENCE, VOID AND THAT ALBERTANA TEOKEMIAN WHO SIGNED THE DOCUMENT OF SALE IN FAVOR OF THE CABRERAS HAD NO AUTHORITY FROM HER SISTER-CO-OWNER FELICIDAD TEOKEMIAN TO EXECUTE THE DEED OF CONVEYANCE. 8

The bone of the petitioners' contention rests on the alleged waiver of the plaintiff to recover any interest she had in the one-third portion of the property inherited by Daniel, Albertana and Felicidad Teokemian from their late father, Domingo, due to the long period of time which lapsed

from the time the plaintiff's title was registered until the action for quieting of title was instituted.

We find merit in the petition.

At the outset, it must be observed that the Certificate of Title of the plaintiff, which was derived from Free Patent No. V-79089, issued in the name of Virgilia Orais, leaves much to be desired in propriety, considering that the Deed of Sale executed by Daniel and Albertana Teokemian, on one hand and Andres Orais on the other, did not bear the signature of Felicidad Teokemian and therefore did not cover the latter's share.

It was the respondent appellate court which observed that "the registration of the plaintiff's title over the subject property was fraudulent insofar as it involved the one-third interest of Felicidad Teokemian who did not sign the Deed of Sale in favor of plaintiff's predecessor-in-interest and, therefore, the latter held that portion as a trustee of an implied trust for the benefit of Felicidad, pursuant to Art. 1456 of the Civil Code." 9 Needless to state, these conclusions, being matters of fact, are entitled to our full affirmation, since they are congruent with the findings of trial court, thus:

It would seem from the facts of the case that the basis of the right of plaintiff over the land in litigation specifically Lot No. 2239 now titled in the name of the plaintiff, located at Buayahon, Abejod, Cateel, Davao Oriental, proceeded from the Deed of Sale executed by Daniel Teokemian and Albertana Teokemian on January 16, 1950 acknowledged before Judge Proserador Danao as Notary Ex Oficio. Taking a hard look over the aforesaid deed of sale (Exh. "B") the said document apparently included the third heir of Domingo Teokemian Felicidad Teokemian because her name was typewritten together with her sister Albertana and brother Daniel all surnamed Teokemian in the said document. Again this fact will come to mind that the vendee Andres Orais was anticipating at the time Felicidad Teokemian will also sell her share in this portion of land (Lot No. 2239) which at the time of the sale it was still unregistered land. The non-signing of Felicidad Teokemian over her typewritten name in this deed of sale (Exh. "B") will attest to the fact that she did not sell her share in the lot in question. Alter this sale the vendee Andres Orais through his encargado Melecio Capilitan and later Servillano Abarca immediately took possession of the two third portion of said parcel of land respecting the third portion owned by Felicidad Teokemian." 10

However, the appellate court stated further that nonetheless, the plaintiff's attempt to recover the property is justified because defendant Felicidad Teokemian's own action for reconveyance has already been barred by prescription, 11 which is the same as stating that the very tardiness of the plaintiff in pursuing the present action for reconveyance of the subject property has rendered the defendants' defense nugatory, and has made the fortress of the plaintiff's case impregnable.

This conclusion is incorrect. As can be discerned from the established facts, the Certificates of Title of the vendees Orais are, to say the least, irregular, and were issued in a calculated move to deprive Felicidad Teokemian of her dominical rights over the property reserved to her by descent. Plaintiff could not have registered the part reserved to Felicidad Teokemian, as this was not among those ceded in the Deed of Sale between Daniel/Albertana Teokemian and Andres Orais. It must be remembered that registration does not vest title, it is merely evidence of such title over a particular property. (Embrado vs. Court of Appeals) 12

The defense of indefeasibility of the Torrens Title does not extend to a transferee who takes the certificate of title with notice of a flaw in his title.

(Anonuevo vs. Court of Appeals) 13 The principle of indefeasibility of title is unavailing where there was fraud that attended the issuance of the free patents and titles.(Meneses vs. Court of Appeals) 14

Be that as it may, that the right of the defendants for reconveyance of the subject property arising from an implied trust under Article 1456 of the Civil Code is material to the instant case, such remedy has not yet lapsed, as erroneously submitted by the plaintiff, and, is thus, a bar to the plaintiff's action. In the case of Heirs of Jose Olviga vs. Court of Appeals, 15 we observed that an action for reconveyance of a parcel of land based on implied or constructive trust prescribes in ten years, the point of reference being the date of registration of the deed or the date of the issuance of the certificate of title over the property, but this rule applies only when the plaintiff or the person enforcing the trust is not in possession of the property, since if a person claiming to be the owner thereof is in actual possession of the property, as the defendants are in the instant case, the right to seek reconveyance, which in effect seeks to quiet title to the property, does not prescribe. The reason for this is that one who is in actual possession of a piece of land claiming to be the owner thereof may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right, the reason for the rule being, that his undisturbed possession gives him a continuing right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on his own title, which right can be claimed only by one who is in possession.

As it is, before the period of prescription may start, it must be shown that (a) the trustee has performed unequivocal acts of repudiation amounting to an ouster of the cestui que trust, (b) such positive acts of repudiation have been made known to the cestui que trust, and, (c) the evidence thereon is clear and positive. 16

In the case at bar, the defendant Felicidad Teokemian, and thereafter, the Cabreras, were in actual possession of the property since it was left to Felicidad Teokemian by her father in 1941, which possession had not been interrupted, despite the sale of the two-third portion thereof to the

plaintiff in 1950, and the latter's procurement of a Certificate of Title over the subject property in 1957. Until the institution of the present action in 1988, plaintiff, likewise, had not displayed any unequivocal act of repudiation, which could be considered as an assertion of adverse interest from the defendants, which satisfies the above-quoted requisites. Thus, it cannot be argued that the right of reconveyance on the part of the defendants, and its use as defense in the present suit, has been lost by prescription.

On the other hand, the action for reconveyance (quieting of title) of the plaintiff was instituted only in 1988, that is, thirty years from the time the plaintiff's husband was able to acquire Certificate of Title covering the properties inherited by the Teokemians, and apparently including that portion belonging to Felicidad Teokemian. In the meantime, defendant Felicidad vda. De Cabrera and her late husband have been actively in possession of the same, tilling it, and constructing an irrigation system thereon. This must surely constitute such tardiness on the part of the plaintiff constituting the basis for laches.

Laches has been defined as the failure or neglect, for an unreasonable and unexplained length of time, to do that which by exercising due diligence could or should have been done earlier, it is negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it. 17 The defense of laches is an equitable one and does not concern itself with the character of the defendants title, but only with whether or not by reason of plaintiffs long inaction or inexcusable neglect, he should be barred from asserting his claim at all, because to allow him to do so would be inequitable and unjust to defendant. Laches is not concerned merely with lapse of time, unlike prescription. While the latter deals with the fact of delay, laches deals with the effect of unreasonable delay. 18

This Court emphasized in Mejia de Lucas vs. Gampona, 19 the reason upon which the rule is based is not alone the lapse of time during which the neglect to enforce the right has existed, but the changes of condition which may have arisen during the period in which there has been neglect. In other words, where a court finds that the position of the parties has to change, that equitable relief cannot be afforded without doing injustice, or that the intervening rights of third persons may be destroyed or seriously impaired, it will not exert its equitable powers in order to save one from the consequences of his own neglect.

In our jurisdiction, it is an enshrined rule that even a registered owner of property may be barred from recovering possession of property by virtue of laches. Under the Land Registration Act (now the Property Registration Decree), no title to registered land in derogation to that of the registered owner shall be acquired by prescription or adverse possession. The same is not true with regard to Laches. 20 As we have stated earlier in Mejia de Lucas vs. Gamponia, while the defendant may not be considered as

having acquired title by virtue of his and his predecessor's long continued possession (37 years) the original owner's right to recover back the possession of the property and the title thereto from the defendant has, by the latter's long period of possession and by patentee's inaction and neglect, been converted into a stale demand.

The argument that laches does not apply because what was sold to the Cabreras was a definite portion of the community property, and, therefore, void, is likewise untenable.

Under Article 493 of the Civil Code:

Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and even he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership.

In Go Ong vs. Court of Appeals, 21 this Court ruled that the heirs, as co-owners, shall each have the full ownership of his part and the fruits and benefits pertaining to it. An heir may, therefore, alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when the personal rights are involved. But the effect of the alienation or mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership.

Undisputed is the fact that since the sale of the two-third portion of the subject property to the plaintiff, the latter had allowed Felicidad Teokemian to occupy that one-third portion allotted to her. There has, therefore, been a partial partition, where the transferees of an undivided portion of the land allowed a co-owner of the property to occupy a definite portion thereof and has not disturbed the same, for a period too long to be ignored--the possessor is in a better condition or right (Potior est conditio possidentis).

Clearly, the plaintiff in this instance is barred from asserting her alleged right over the portion subject matter in the instant case on the ground that their right has been lost by laches. In Bailon-Casilao vs. Court of Appeals, we ruled that:

As early as 1923, this Court has ruled that even if a co-owner sells the whole property as his, the sale will affect only his own share but not those of the other co-owners who did not consent to the sale (Punzalan vs. Boon Liat, 44 Phil 320 [1923]). This is because under the aforementioned codal provision, the sale or other disposition affects only his undivided share and the transferee gets only what would correspond to his grantor in the partition of the things owned in common (Ramirez vs. Bautista, 14 Phil 528 [1909]). . . . For Article 494 of the Civil Code

explicitly declares: "No prescription shall lie in favor of a co-owner or co-heir so long as he expressly or impliedly recognizes the co-ownership. 22

IN VIEW WHEREOF, the petition is hereby GRANTED. The decision of the Court of Appeals dated January 7, 1993 is hereby SET ASIDE. The decision of the trial court dated April 27, 1989 is hereby REINSTATED in toto.

SO ORDERED.

Regalado, Puno and Mendoza, JJ., concur.

Romero, J., took no part.

Footnotes

1 Annex "A", Petition, p. 35, Rollo.

2 Annex "B", Petition, p. 49, Rollo.

3 Court of Appeals Decision, pp. 36-40, Rollo.

4 G.R. No. L-46573, November 13, 1986, 145 SCRA 439.

5 G.R. Nos. L-43105 and L-43190, August 31, 1984,131 SCRA 532.

6 G.R. No. L-23072, November 29, 1968, 26 SCRA 234.

7 Court of Appeals Decision, supra.

8 Petition, pp. 16-17, Rollo.

9 Court of Appeals Decision, p. 45, Rollo.

10 RTC Decision, pp. 60-61.

11 Court of Appeals Decision, p. 45, Rollo.

12 G.R No. 51457, June 27, 1994, 233 SCRA 335.

13 G.R. No. 113739, May 2, 1995, 244 SCRA 28.

14 G.R. No. 82220, July 4, 1995, 246 SCRA 162.

15 G.R. No. 104813, October 21, 1993, 227 SCRA 330.

16 Huang vs. Court of Appeals, G.R. No. 108525, September 13, 1994, 236 SCRA 420.

17 Olizon vs. Court of Appeals, G.R. No. 107075, September 1, 1994, 236 SCRA 148.

18 Palmera vs. Civil Service Commission, G.R. No. 110168, August 4,

1994, 235 SCRA 87.

19 G.R. No. L-9335, October 31, 1956, 100 Phil 277

20 Claverias vs. Quingco, G.R. No. 77744, March 6, 1992, 207 SCRA 66; De la Calzada-Cierras vs. CA, G.R. No. 95431, August 7, 1992, 212 SCRA 390.

21 G.R. No. 75884, September 24, 1987, 154 SCRA 270.

22 G.R. No. L-78178, April 15, 1988, 160 SCRA 738.

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 159666             December 4, 2007

EULOGIO M. PEDRANO, petitioner, vs.HEIRS OF BENEDICTO PEDRANO, namely: ROMANA PEDRANO, ANTONIO PEDRANO, ROSENDA PEDRANO RAAGAS, LEONIDA PEDRANO VILLAMOR, and ZENAIDA P. DAGOHOY; and HEIRS OF NORBERTO M. PEDRANO, namely: NORBERTO C. PEDRANO, JR., MARILYN C. PEDRANO, and BENEDICTO C. PEDRANO, represented by NORMIE P. ALCORIN, respondents.

D E C I S I O N

VELASCO, JR., J.:

While blood is indeed thicker than water, conflicts involving real

properties are no respecter of even the most immediate of blood relations. Lot No. 6416, Ts-222, with an area of 525 square meters located on Lapu-lapu St., Molave, Zamboanga del Sur is the subject of a long standing dispute between a son against his mother and his siblings.

Lot No. 6416 was previously owned by Dr. Isidro Hynson who sold it on March 15, 1965 to Romana Monteal Pedrano, for PhP 315.02. Romana was married to Benedicto Pedrano who passed away on August 19, 1967.

Fourteen years later, petitioner Eulogio M. Pedrano, a son of Romana, alleged that he had bought the land himself for PhP 30,000 from Romana, payable on or before December 31, 1982 as shown in the Deed of Sale dated December 22, 1981.

Since Lot No. 6416 and another lot, Lot No. 6409, were yet untitled, these became subject of Cadastral Case No. N-4, LRC Cad. Rec. No. N-64, for titling.

On June 14, 1984, in Cadastral Case No. N-4, petitioner filed a Motion to Lift Order of General Default and to Admit Cadastral Answer.1

Subsequently, on June 2, 1989, the Regional Trial Court (RTC) acting as Cadastral Court rendered a Decision adjudicating Lot No. 6409-A, Ts-2222

to Romana and Lot No. 6416, Ts-222 to petitioner. Although on July 3, 1989, the cadastral court issued an Order for the Issuance of Decree in Cadastral Case No. N-4,3 to date, no Original Certificate of Title (OCT) has been issued to Lot No. 6416.

Alleging that petitioner had not paid the PhP 30,000 consideration for Lot No. 6416 until the December 31, 1982 deadline, as stipulated in the December 22, 1981 Deed of Sale, respondents filed before the Municipal Trial Court of Molave, Zamboanga del Sur, a Complaint4 docketed as Civil Case No. 570 entitled Heirs of Benedicto Pedrano, namely, Romana Pedrano, Antonio Pedrano, Rosenda Pedrano Raagas, et al. v. Eulogio Pedrano. Respondents asked for the annulment of the December 22, 1981 Deed of Sale, and the recovery of the possession and ownership of Lot No. 6416, with prayer for a writ of preliminary injunction and restraining order and damages.

According to respondents, Romana informed petitioner that the former was canceling the sale and petitioner should have Dr. Hynson’s name in the title replaced with her name. Respondents added that despite the cancellation of the deed of sale, Romana allowed petitioner to occupy the house on Lot No. 6416. Further, respondents averred they were unaware that petitioner instituted a cadastral case to have the land titled to himself. They discovered his machinations only in 1994. Thus, respondents instituted the instant case to have the December 22, 1981 Deed of Sale voided for want of consideration and for fraud.

Petitioner denied all allegations. He claimed that his father, Benedicto, died without any property. Besides, he averred, respondents’ action was barred by the decision of the RTC in Cadastral Case No. N-4, which

adjudicated Lot No. 6416 to him and which decision had long become final and executory. He also insisted that he had paid respondents for the land.

The Trial Court ruled prescription had set in

Subsequently, on July 4, 2000, the Molave, Zamboanga del Sur RTC rendered a Decision, the dispositive portion of which reads:

WHEREFORE, for the reason that prescription of the cause of action to annul the questioned Deed of Absolute Sale has already set in, the complaint in the above-entitled case is ordered dismissed.

To bring peace to the family, the counterclaim of defendant in his answer is also ordered dismissed.

IT IS SO ORDERED.5

The RTC said that it could no longer annul the sale reasoning that Article 11446 of the Civil Code provided for 10 years within which to bring action from the time the right of action accrues upon a written contract. Hence, it concluded that since the deed of sale was executed on December 22, 1981, and the instant action was filed only on September 5, 1996, after more than 14 years, prescription had set in.

The Court of Appeals reversed the trial court

Aggrieved, respondents appealed to the Court of Appeals (CA). The appeal was docketed as CA-G.R. CV No. 68159. Respondents raised the sole issue of whether their action had already prescribed.

In the meantime, pending appeal before the CA, Romana died on September 25, 2001.

On February 14, 2003, the appellate court rendered the assailed Decision which granted respondents’ appeal, and reversed and set aside the July 4, 2000 RTC Decision. The decretal portion reads:

WHEREFORE, the instant appeal is hereby GRANTED. Accordingly, the assailed decision is hereby REVERSED and SET ASIDE and a new one rendered ordering defendant-appellee to transfer ownership and possession of the subject property in favor of plaintiffs-appellants.

SO ORDERED.7

The CA ratiocinated that Art. 1144 of the Civil Code was erroneously applied by the RTC. The CA explained that the instant case involves an implied trust, and that Art. 1456 of the Civil Code was the applicable law.

The CA also found untenable petitioner’s assertion that he was the one who paid Dr. Hynson the purchase price of PhP 315.02 although the agreement shows Romana was the transferee. Moreover, he presented no proof to support his claim that he paid PhP 30,000 for Lot No. 6416 to Romana based on the December 22, 1981 Deed of Sale. According to the

CA, the March 15, 1965 Deed of Absolute Sale categorically showed that it was Romana who purchased the property from Dr. Hynson. Why, posed the CA, would petitioner still pay respondents the PhP 30,000 purchase price if he had already earlier paid PhP 315.02 for the same property? Consequently, the CA concluded, based on the December 22, 1981 Deed of Sale, respondents had no obligation to transfer ownership of Lot No. 6416 to petitioner since the latter had not paid for it. In sum, according to the CA, the sale was never perfected and all along, petitioner merely held the land in trust for respondents.

On the issue of prescription, the CA applied Villanueva-Mijares v. Court of Appeals,8 where we held that an action for reconveyance of a parcel of land based on implied or constructive trust prescribes in ten (10) years, reckoned from the date of registration of the deed or the date of the issuance of the certificate of title of the property. The CA pointed out that in this case, the prescriptive period has not started to run since no certificate of title had yet been issued.

Finally, the CA held that since respondents demanded that petitioner return the property, the implied trust had ceased and petitioner was under obligation to return the property to respondents. In its July 28, 2003 Resolution, the appellate court likewise denied petitioner’s Ex-Parte Motion for Reconsideration.

The Issues

This petition under Rule 45 raises the following issues:

1. Whether or not there was a PRESCRIPTION under Art. 1144 of the Civil Code that the document sought to be ANNULLED was executed on December 22, 1981 and the case was filed on September 5, 1996 which has a gap of 14 years, 8 months and 23 days.

2. Whether or not there was an IMPLIED TRUST and therefore the property was acquired through mistake or fraud and the person obtaining it is a TRUSTEE under Art. 1456 of the Civil Code.

3. Whether or not there was an EXPRESS TRUST as provided in Art. 1444, 1445 and 1446 of the Civil Code where the TRUSTEE should accept the trust or his/her acceptance may be presumed.

4. Whether or not that the property under trust by one spouse be considered as a conjugal property of both husband and wife.

5. Whether or not that the document DEED OF SALE is the right document for partition to be executed by the heirs.9

In gist, the instant petition proffers the twin issues: Is the possession of the land by petitioner an implied or express trust? Has the action of respondents prescribed?

The petition is devoid of merit.

Petitioner occupied Lot No. 6416 as implied trustee

Petitioner argues that he is the rightful owner of Lot No. 6416. He claims he paid for it with a treasury warrant representing his salary as a public school teacher. He explains that at the time the lot was bought from Dr. Hynson, he was the only one earning enough. His father was only a caminero, his mother, jobless except for occasional fish vending, and his other siblings, all school drop-outs. He contends that he was the only one who could afford to pay for the lot, but in the March 15, 1965 Deed of Absolute Sale, he made it appear that Romana was the vendee and she was therefore his express trustee. He avers that Romana was not even around when the said deed was executed. He explains that the two-centavo difference in the purchase price of the lot and the actual payment of PhP 315.02 was due to his use of the treasury warrant amounting to PhP 315.02 that he received as public school teacher to pay for the lot. He said he had been occupying the lot since his purchase in 1965.

We are not persuaded by petitioner.

The facts and the documents presented in the instant case belie petitioner’s claims

First, petitioner showed no proof that he indeed bought the land from and paid the purchase price of PhP 315.02 to Dr. Hynson. He who alleges a fact has the burden of proof and mere allegation is not evidence.10

Besides, the March 15, 1965 Deed of Sale, duly notarized, explicitly shows it was Romana who paid Dr. Hynson PhP 315.02 for the land. We quote the Deed of Sale:

I, DR. ISIDRO HYNSON, Filipino, of legal age, married, with residence and postal address at Ozamis City, Misamis Occidental, Philippines, for and in consideration of the sum of THREE HUNDRED FIFTEEN PESOS and TWO CENTAVOS (P315.02), Philippine Currency, to me in hand paid by MRS. ROMANA MONTEALTO, likewise Filipino, of legal age, married to Benedicto Pedrano, with residence and postal address at Poblacion, Molave, Zamboanga del Sur, Philippines, receipt of which in full is hereby acknowledged to my entire satisfaction, hereby do by these presents, CEDE, SELL, CONVEY and TRANSFER absolutely unto said MRS. ROMANA MONTEALTO[.]

Between petitioner’s bare allegations and the notarized deed of absolute sale, a public document, the latter prevails for being prima facie evidence, under Sec. 23, Rule 132 of the Revised Rules on Evidence, of the facts giving rise to its execution and the date of its execution.

Second, as aptly pointed out by the CA, if petitioner indeed paid PhP 315.02 for the subject lot, there was no need for him to pay for the lot again.

Third, petitioner had not adduced evidence that he indeed paid the PhP

30,000 consideration for Lot No. 6416. We quote the December 22, 1981 Deed of Sale:

THAT I, ROMANA M. PEDRANO, Filipino, of legal age, widow, resident of Molave, Zamboanga del Sur, for and in consideration of the sum of THIRTY THOUSAND (P30,000.00) PESOS, Philippine Currency, to be paid by EULOGIO M. PEDRANO, Filipino, of legal age, married to Virginia O. Pedrano, resident of Molave, Zamboanga del Sur, on or before December 31, 1982, DO hereby SELL, CEDE AND CONVEY absolutely and forever unto the said Eulogio M. Pedrano[.]

What is clear in the aforecited deed of sale is that the late Romana was the buyer of Lot No. 6416 from Dr. Hynson; that petitioner was to pay Romana PhP 30,000 for it; and that he had until December 31, 1982 to do so. Petitioner claims he did but offers no proof of payment although he occupied the land. While it is incumbent for petitioner to present proof that he indeed paid it, he had not presented any. Under these facts and even if we concede that the sale was perfected, still petitioner failed to perform his obligation to pay the consideration of PhP 30,000 to Romana. Since petitioner failed to comply with what is incumbent upon him, the injured parties (respondents as heirs of Romana) may choose between fulfillment and rescission of the sale under Art. 1191 of the Civil Code. Respondents chose rescission. Thus, the juridical tie between the parties is invalidated and it leaves the parties with their respective property rights relating to Lot No. 6416 before the celebration of the December 22, 1981 Deed of Sale.

What remains therefore is the undisputed March 15, 1965 Deed of Sale with Romana as the buyer. Petitioner’s possession of Lot No. 6416, owned by his parents, was an implied trust constituted upon petitioner. The CA is correct in applying Art. 1456 on implied trust to this case.

Art. 1456 provides, "If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes."

Working for judicial confirmation of an imperfect title when one is not the owner constitutes fraud

On the issue of fraud, petitioner contends that there was nothing fraudulent when he instituted the cadastral proceedings before the Molave, Zamboanga del Sur RTC. Petitioner attests that the said RTC awarded him ownership of Lot No. 6416 upon his satisfactorily presenting both oral and documentary evidence of his and his predecessors-in-interest’s 30-year continuous, adverse, open, public, and notorious possession of Lot No. 6416.

Petitioner’s posturing is disingenuous, to say the least.

As earlier discussed, petitioner has failed to convince this Court that he paid for Lot No. 6416 before the lapse of the December 31, 1982

deadline; therefore, he did not acquire ownership of it. Rosenda Pedrano Raagas testified that: (1) petitioner was the only sibling who finished school; (2) he lived in Lot No. 6416 because his mother let him; (3) Romana asked him to take care of titling Lot Nos. 6409-A and 6416; and (4) he was the only one financially better off among his siblings. In our view, all these show that petitioner not only enjoyed immense favor from his mother, she also had only him to count on to make decisions and work on the titling of her land.

We also find petitioner’s contention that his mother testified on his behalf regarding his continuous, adverse, open, public, and notorious possession of Lot No. 6416 self-serving, as he has shown no proof of his mother’s statements. Neither has he presented any witness to attest to this. In fact, a cursory perusal of the Joint Motion to Lift Order of General Default and to Admit Cadastral Answer filed by petitioner on June 14, 1984 in Cadastral Case No. N-4 shows that Romana’s name was only inserted in the motion as an afterthought. To our mind, in an attempt to defraud his siblings, petitioner deliberately did not inform them of his move to put the title of Lot No. 6416 in his name. Petitioner presented the December 22, 1981 Deed of Sale before the cadastral court to mislead the courts to erroneously adjudicate Lot No. 6416 to him.

Prescription has not set in

Petitioner insists that the RTC was correct in declaring that respondents’ action had prescribed since more than 14 years have lapsed from the date of the execution of the Deed of Sale on December 22, 1981 to the date of the instant action for annulment. Petitioner posits that in the intervening time, respondents were aware of the cadastral proceedings he initiated; that in fact, he had filed a Joint Motion to Lift Order of General Default and to Admit Cadastral Answer under Cadastral Case No. N-4 on May 2, 1984, and for five years, the cadastral court conducted hearings; that the cadastral court heard the testimonies of his continuous, adverse, open, and public possession of the lots; that since the execution of the deed of sale, respondents neither claimed that they were not paid, nor did they demand payment from 1981 to 1993; and that the letter of Romana purportedly canceling the sale for non-payment was written only in 1996 when she was already 83 years old and this was not sent to him.

Again, petitioner fails to persuade us.

An action for the reconveyance of a parcel of land based on implied or constructive trust, as we have already explained in this case, prescribes in 10 years, the point of reference being the date of registration of the deed or the date of the issuance of the certificate of title of the property.11 In the instant case, no OCT has yet been issued to Lot No. 6416 despite an order on July 3, 1989 to title Lot Nos. 6409-A and 6416. Without an OCT, the date from whence the prescriptive period could be reckoned is unknown and it could not be determined if indeed the period

had already lapsed or not. Thus, we agree with the CA that prescription has not yet set in when the instant case was filed on September 5, 1996.

With our above disquisition, we find no need to go over the other issues raised by petitioner.

Petitioner has equal share with other siblings over subject property

From the foregoing discussion, we rule that Lot No. 6416 is part of the estate of the spouses Benedicto and Romana and is held by petitioner as an implied trust. Petitioner is co-heir among six (6) compulsory heirs of Romana and Benedicto. Therefore, he is only entitled to a one-sixth (1/6) share in Lot No. 6416.

Even if the June 2, 1989 Decision and July 3, 1989 Order for the issuance of decree in Cadastral Case No. N-4, LRC Cad. Rec. No. N-64 have become final, this Court can still modify them pursuant to its inherent power to suspend its own rules or to except a particular case from its operations wherever demands of justice so require.12 We order the amendment or modification of said decision and order for the issuance of decree to reflect the equal one-sixth (1/6) share for each of the heirs of Romana and Benedicto with respect to Lot No. 6416, Ts-222 to avoid further delay and additional legal expenses to the parties.

WHEREFORE, the petition is DENIED for lack of merit. The February 14, 2003 Decision and July 28, 2003 Resolution in CA-G.R. CV No. 68159 are hereby AFFIRMED with MODIFICATION that the six (6) compulsory heirs of the late spouses Benedicto and Romana Pedrano, namely: petitioner Eulogio M. Pedrano, Antonio M. Pedrano, Rosenda P. Raagas, Leonida P. Villamor, Zenaida P. Dagohoy, and Norberto M. Pedrano (deceased), represented by Normie P. Alcorin, Norberto C. Pedrano, Jr., Marilyn C. Pedrano, and Benedicto C. Pedrano, are each entitled to one-sixth (1/6) share in Lot No. 6416, Ts-222. The June 2, 1989 Decision and July 3, 1989 Order for the Issuance of Decree of the RTC acting as a cadastral court in Cadastral Case No. N-4, Cad. Rec. No. N-64 respectively adjudicating and decreeing Lot No. 6416, Ts-222 to petitioner Eulogio M. Pedrano are MODIFIED that said lot is adjudicated and decreed to the aforelisted six (6) heirs of Benedicto and Romana Pedrano each with one-sixth (1/6) share in said lot. The Land Registration Authority and the Register of Deeds of Zamboanga del Sur are ordered to issue an OCT in the names of said heirs. Costs against petitioner.

SO ORDERED.

Quisumbing,Chairperson Carpio, Carpio-Morales, Tinga, JJ., concur.

Footnotes1 Rollo, p. 65.2 Id. at 66.3 Id. at 67.4 Id. at 36-42, dated April 9, 1996.5 Id. at 44. Decided by Presiding Judge Camilo E. Tamin.6 Art. 1144. The following actions must be brought within ten years from the time the right of action accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law;

(3) Upon a judgment.7 Rollo, p. 29. Penned by Associate Justice Mariano C. del Castillo and concurred in by Associate Justices Buenaventura J. Guerrero (Chairperson) and Teodoro P. Regino.8 G.R. No. 108921, April 12, 2000, 330 SCRA 349.9 Rollo, pp. 188-189.10 Heirs of Cipriano Reyes v. Calumpang, G.R. No. 138463, October 30, 2006, 506 SCRA 56, 72; citing Luxuria Homes, Inc. v. Court of Appeals, G.R. No. 125986, January 28, 1999, 302 SCRA 315, 325.11 Vda. de Delgado v. Court of Appeals, G.R. No. 125728, August 28, 2001, 363 SCRA 758, 766; see also Villanueva-Mijares v. Court of Appeals, supra note 8; citing Vda. de Cabrera v. Court of Appeals, February 3, 1997, 267 SCRA 339, 353, and Sta. Ana, Jr. v. Court of Appeals, November 13, 1997, 281 SCRA 624, 629.11 Ginete v. Court of Appeals, G.R. No. 127596, September 24, 1998, 296 SCRA 38; citations omitted.

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 159810             October 9, 2006

ESTATE OF EDWARD MILLER GRIMM, represented by RAMON J. QUISUMBING and RANDY GLEAVE LAWYER, as Judicial Administrators, petitioners, vs.ESTATE OF CHARLES PARSONS and PATRICK C. PARSONS, G-P AND COMPANY and MANILA GOLF & COUNTRY CLUB, INC., respondents.

D E C I S I O N

GARCIA, J.:

Because legal and situational ambiguities often lead to disagreements even between or amongst the most agreeable of persons, it behooves all concerned to put their financial affairs and proprietary interests in order before they depart for the great beyond. Leaving legal loose ends hanging or allowing clouds to remain on property titles when one can do something about them before the proverbial thief in the night suddenly comes calling only opens the door to bruising legal fights and similar distracting inconveniences. So it was here.

In this petition for review under Rule 45 of the Rules of Court, the Estate of Edward Miller Grimm, represented by its judicial administrators, assails and seeks to set aside the Decision1 dated September 8, 2003 of the Court of Appeals (CA) in CA-G.R. CV No. 69990, reversing an earlier decision of the Regional Trial Court (RTC) of Makati City in its Civil Case No. 92-2452.

At the core of the controversy is a stock certificate of the Manila Golf & Country Club, Inc. ("MGCC" or the "Club", for short) covered by Membership Certificate (MC) No. 1088 for 100 units, the playing rights over which the Rizal Commercial Banking Corporation (RCBC), the

court-appointed receiver, had, in the meantime, leased out. The Club issued MC No. 1088 to replace MC No. 590. Asserting clashing ownership claims over MC No.1088, albeit recorded in the name of Charles Parsons ("Parsons", hereinafter) are petitioner Estate of Edward Miller Grimm and respondent G-P and Company ("G-P & Co.", hereinafter).

Parsons and Edward Miller Grimm (Grimm), together with Conrado Y. Simon (Simon), formed in 1952 a partnership for the stated purpose of engaging in the import/export and real estate business. Per SEC Certificate #3305,2 the partnership was registered under the name G - P and Company.

Before September 1964, Parsons and Grimm each owned proprietary membership share in MGCC,3 as evidenced by MC No. 374 for 100 units in the name of Parsons, and MC No. 590, also for 100 units, in the name of Grimm. Per records, the Club issued MC No. 590 to Grimm on May 25, 1960.4

After Grimm's demise on November 27, 1977, Parsons and Simon continued with the partnership under the same name, G – P and Company, as reflected in Articles of Partnership dated December 14, 1977.5 The articles of the partnership would later undergo another amendment to admit Parsons' son, Patrick, in the partnership.6 After Parsons died on May 12, 1988, Amended Articles of Partnership of G-P and Company was executed on September 23, 1988 by and among Parsons' heirs, namely, Patrick, Michael, Peter and Jose, all surnamed Parsons, albeit the amendment appeared to have been registered with the SEC only on March 18, 1993. 7

The herein legal dispute started when brothers Patrick and Jose, both surnamed Parsons, responding to a letter8 from the Estate of Grimm, rejected the existence of a trust arrangement between their father and Grimm involving MC No. 1088. Thus spurned, the Estate of Grimm filed on August 31, 1992 before the RTC of Makati City, a suit for recovery of MC No. 1088 with damages against the Estate of Parsons, Patrick Parsons and MGCC. In its complaint,9 docketed as Civil Case No. 92-2452 and eventually raffled to Branch 135 of the court, the Estate of Grimm, represented by its judicial administrator, Ramon J. Quisumbing, alleged, among other things, the following:

1. That on September 7, 1964, Grimm transferred MC No. 590 in trust to Parsons; on the same day, MGCC cancelled MC No. 590 and issued MC No. 1088 in the name of Parsons;

2. That in separate letters dated February 28, 1968 addressed to MGCC, both Grimm and Parsons stated that the transfer of MC No. 590 was temporary. Enclosed in that Parsons' letter was MC No. 1088 which he was turning over for safekeeping to the Club, thru E.C. Von Kauffmann and Romeo Alhambra, then MGCC honorary secretary and assistant manager, respectively;

3. That on June 9, 1978, or after Mr. Kauffman' death and Mr. Alhambra's resignation, MGCC turned over the possession of MC No. 1088 to Parsons;

4. That in 1977, Grimm died; after a protracted proceedings, his estate was finally settled in 1988, the year Parsons also died;

5. That Patrick and Jose Parsons had, when reminded of the trust arrangement between their late father and Grimm, denied the existence of a trust over the Club share and refused to return the same; and

6. That MGCC had refused, despite demands, to cancel MC No. 1088 and issue a new certificate in the name of the Estate of Grimm.

Attached to the complaint were the demand letters and other communications which, to the Estate of Grimm, document the Grimm-Parsons trust arrangement.

In his Answer with counterclaim,10 Patrick Parsons averred that his father was, with respect to MC No. 1088, a mere trustee of the true owner thereof, G-P & Co., and alleged, by way of affirmative defense, that the claim set forth in the complaint is unenforceable, barred inter alia by the dead man's statute, prescription or had been waived or abandoned.

Herein respondent G-P & Co., echoing Patrick Parsons' allegation respecting the ownership of MC No. 1088, moved to intervene and to implead Far East Bank & Trust Co. (FEBTC), as transfer agent of MGCC, as defendant-in-intervention. Attached to its motion was its COMPLAINT In Intervention11 therein alleging (a) that on September 1, 1964, Parsons executed a Letter of Trust, infra, in which he acknowledged the beneficial ownership of G-P & Co. over MC No. 374 and MC No.1088; (b) that Parsons, as required by the partnership, endorsed both certificates in blank; and (c) that G-P & Co. carried said certificates amongst its assets in its books of accounts and financial statements and paid the monthly dues of both certificates to the Club when its membership privileges were not temporarily assigned to others. In the same complaint-in-intervention, G-P & Co. cited certain tax incidents as reasons why the transfer of MC No. 374 and MC No. 1088 from Parsons to the intervenor-partnership cannot as yet be accomplished.

After the usual reply and answer to counterclaims had been filed, the Estate of Grimm filed an amended complaint to include Randy Gleave Lawyer, the other judicial co-administrator, as representative of the Estate. On April 28, 1993, the trial court admitted the amended complaint.

After a lengthy trial, the trial court rendered its May 29, 2000 judgment12

finding for the Estate of Grimm, as plaintiff a quo, disposing as follows:

1. Ordering defendants ESTATE OF CHARLES PARSONS and PATRICK C. PARSONS:

1.1 to turn over [MC] No. 1088 to plaintiff ESTATE OF EDWARD MILLER GRIMM;

1.2 jointly and severally to pay damages to plaintiff ESTATE …in the amount of P400,000.00 per annum from September 8, 1989 to November 12, 1998, with legal interest thereon from the date of this Decision until fully paid;

1.3 Jointly and severally, to pay plaintiff ESTATE … attorney's fees in the amount of P1,000,000.00 and the costs;

2. Ordering defendant [MGCC] and defendant-in-intervention [FEBTC] to cancel [MC] No. 1088 and to issue a new Membership Certificate in lieu thereof in the name of plaintiff ESTATE ….

3. Ordering Receiver RIZAL COMMERCIAL BANKING CORPORATION to turn over to plaintiff ESTATE … all income derived from the lease of the playing rights of [MC] No. 1088, less Receiver's fees and charges.

4. Ordering the dismissal of the counterclaim of the defendants … [Parsons]; and

5. Ordering the dismissal of the complaint-in-intervention and the supplemental counterclaim of intervenor G - P AND COMPANY.

SO ORDERED. (Words in bracket added.)

In gist, the trial court predicated its ruling on the postulate that the temporary transfer of Grimm's original share in MGCC - covered by MC No. 590 whence MC No. 1088 descended – to Parsons, created a trust relationship between the two.

Therefrom, only herein respondents G-P & Co., Patrick Parsons and the Parsons Estate appealed to the CA, albeit MGCC would, in its brief, reiterate its readiness to issue the corresponding replacement certificate to whosoever is finally adjudged owner of MC No. 1088.

On September 8, 2003, in CA-G.R.CV No. 69990, the appellate court rendered its herein assailed Decision,13 disposing as follows:

WHEREFORE, the Decision of the lower court dated May 29, 2000 is hereby REVERSED and SET ASIDE, and another one rendered:

1. Dismissing the complaint filed by … Estate of Edward Miller Grimm for lack of merit;

2. Ordering … Manila Golf and Country Club, Inc., and defendant-in-intervention Far East Bank & Trust Company, as transfer agent, to immediately effect the reconveyance of [MC] No. 1088 to Intervenor-appellant G-P and Company;

3. Ordering Rizal Commercial Banking Corporation, as receiver, to immediately turn over to intervenor-appellant G-P and Company all income derived from the lease of the playing rights of said Membership

Certificate, less receiver's fees;

4. Ordering [the] … Estate of Edward Miller Grimm to pay appellants the amount of P800,000.00 as attorney's fees;

5. Ordering … Estate of Edward Miller Grimm to pay appellants the costs of suit.

SO ORDERED. (Words in bracket added.)

Hence, this petition for review on the lone submission that the CA erred in finding that respondent G-P & Co. is the beneficial owner of MC No. 1088.

In their comment to the petition, the respondents urge the outright dismissal thereof on the ground that it raises only purely factual and evidentiary issues which are beyond the office of an appeal by certiorari. As argued further, the factual findings of the CA are conclusive on the parties.

It should be made clear right off that respondent Patrick Parsons, in his individual capacity, and the Estate of Parsons (collectively, the Parsons) are not claiming beneficial ownership over MC No. 1088. The same goes for respondent MGCC which went to state on record that "[T]he ownership of [MC] No. 1088 (previously No. 590) does not belong to the Club and it does not stand to gain … from the determination of its real owner."14

We GRANT the petition.

The respondents' formulation of the grounds for the dismissal of the instant petition is a statement of the general rule. A resolution of the petition would doubtless entail a review of the facts and evidentiary matters against which the appealed decision is cast, a procedure which is ordinarily outside the province of the Court and the office of a certiorari review under Rule 45 of the Rules of Court. For, the rule of long standing is that the Court will not set aside the factual determinations of the CA lightly nor will it embark in the evaluation of evidence adduced during trial. This rule, however, admits of several exceptions. Among these are when the factual conclusions of the CA are manifestly erroneous; are contrary to those of the trial court; when the judgment of the CA is based on misapprehension of facts or overlooked certain relevant facts not disputed by the parties which, if properly considered, would justify a different conclusion.15 Decidedly, this case falls within the recognized exceptions to the rule on the finality of factual findings or conclusions of the CA.

The principal issue tendered in this case turns on who between petitioner Estate of Grimm and respondent G.P. & Co. beneficially owns MC No. 1088. Corollary thereto - owing to the presentation by respondents of a LETTER OF TRUST that Parsons allegedly executed in favor of G-P and Company with respect to MC No. 1088 - is the question of whether or not

the transfer of MC No. 590 effected on September 7, 1964 by Grimm in favor of Parsons resulted, as the petitioner would have it, in the formation of a trust relation between the two. Thus formed, the trust relationship would preclude the trustee from disposing of the trust property, save when repudiation of the trust had effectively supervened.

The trial court found the September 7, 1964 Grimm- to- Parsons certificate transfer to be only temporary and without valuable consideration to accommodate a third person and thus adjudged Grimm to be the real owner of MC No. 590, as later replaced by MC No. 1088. According to the trial court, such transfer created a trust, with Parsons, as trustee, and Grimm, as the beneficial owner of the share thus transferred, adding that Parsons, as mere trustee, is without right to transfer the replacement certificate to G-P & Co.

On the other hand, the CA, while eschewing the alternative affirmative defenses interposed below by respondents, nonetheless ruled for respondent G–P & Co. Citing Article 1448 of the Civil Code,16 the appellate court held that respondent G–P & Co. pertains the beneficial ownership of MC No. 1088, an implied trust in its favor having been created when MC No. 590 and MC No. 374 were acquired for and placed in the names of Grimm and Parsons, respectively, albeit the partnership paid for the price therefor. To the appellate court, the fact that these certificates were carried, as of December 31, 1974, November 27, 1977 and December 31, 1978 in the books17 of G-P & Co. as investment assets only proves one thing: the company paid the acquisition costs for the membership certificates. If Grimm was the real owner of said share, he should have, according to the appellate court, objected to its inclusion in the partnership assets during his lifetime. Completing its ratiocination, the CA wrote:

xxx. A trust, which derives its strength from the confidence one reposes on another especially between the partners and the company, does not lose that character simply because of what appears in a legal document. The transfer therefore of Grimm's [MC] No. 590 on September 7, 1964 in favor of Charles Parsons resulted merely in the change of the person of trustee but not of the beneficial owner, the G-P and Company.

The CA's ruling does not commend itself for acceptance. As it were, the assailed decision started on the wrong foot and thus had to limp all along to arrive at a strained and erroneous conclusion. We shall explain.

A party in whose favor a legal presumption exists may rely on and invoke such legal presumption to establish a fact in issue. He need not introduce evidence to prove that fact. For, a presumption is prima facie proof of the fact presumed and to the party against whom it operates rests the burden of overthrowing by substantial and credible evidence the presumption.18 Under the law on evidence, it is presumed that "there was sufficient consideration for a contract."19

Inasmuch as Grimm's name appeared on MC No. 590 as registered

owner thereof, he is deemed to have paid sufficient consideration for it. The onus of proving otherwise would fall on respondents G-P & Co. and/or the Parsons. Without so much of an explanation, however, the CA minimized the value of MC No. 590 as arguably the best evidence of ownership. Corollarily, the appellate court devalued the rule on legal presumption and faulted petitioner Estate of Grimm for not presenting evidence to prove that Grimm paid for his original acquisition of MC No. 590. Wrote the CA:

Contrary to the findings of the lower court, [petitioner] failed to establish [its] right over the said shares. xxx Not a single evidence of proof of payment for the said shares was ever presented by the [petitioner] to establish ownership. (Words in bracket added.)20

Ironically, while the CA held it against the petitioner for failing to adduce proof of payment by Grimm for his MC No. 590, it nonetheless proceeded to declare respondent G-P & Co. to be the beneficial owner of said certificate even if it, too, had not presented proof for such payment. Respondent G-P & Co., in its complaint-in-intervention (should have been answer-in-intervention), did not allege paying for MC No. 590. Surely, payment cannot be validly deduced, as the CA did, from the bare fact of such membership certificate being listed in the books of respondent G -P & Co. as partnership investment assets. For one, the self-serving book entries in question are, as correctly dismissed by the trial court, not evidentiary of ownership. Else, anyone can lay a claim, or worse, acquire ownership over a share of stock by the simple expedience of listing, without more, the same in the partnership or corporate books. The sheer absurdity of the notion need no belaboring.

For another, what appears or what respondent company uniformly entered as investments are: "Manila Golf & Country Club, Inc. 2 shares." No reference was made whatsoever in the books or financial statements about MC No. 590, (MC. No. 1088) and MC. No. 374. In the absence of the number reference or other similar identifying details, the CA's categorical conclusion that one of the "2 shares" referred to is MC No. 1088 is at best speculative. This observation becomes all the more valid given that Michael Parsons had in his name two (2) Club share certificates. Exhibit "X-4," a September 21, 1964 letter from Parsons to Mr. Kaufmann made specific reference to Michael's shares:

Under the circumstance, please disregard … the previous letter which Michael wrote in connection with the shares in his name ….

In the case of the two shares in the name of Michael, please leave the two in his name . . . .

As matter now stands, in summary, I shall retain my shares in my name and continue playing under such shares; Michael will retain two shares … assigning one to Mr. Stoner; and Pete Grimm will assign his playing rights to Mr. Daikichi Yoshida.21

And for a significant third, respondent G-P & Co. is not the same G-P & Co. that Parsons, Grimm and Simon organized in 1952, the former being an entity that came into existence only on September 23, 1988. It is thus well-nigh impossible for respondent company to have participated in a transaction that occurred years before it acquired juridical personality. In the concrete, it is not physically possible for respondent G-P & Co. to have paid the price for the purchase of Grimm's MC No. 590, the same having been acquired in 1960 or some 28 years before the respondent company was established by the execution of the Articles of Partnership on September 23, 1988. The trial court depicted the incongruity of the situation in the following fashion:

Intervenor [respondent G-P & Co.] is not the same partnership originally formed by Grimm, Parsons and Simon. When Grimm died on November 27, 1977, the original partnership was dissolved. The death of a partner causes dissolution of a partnership [Article 1829, Civil Code]. A new partnership was formed with Parsons and Simon as partners. Besides this new partnership formed after the death of Grimm, there were five (5) others formed [Exhibit DD, EE, FF, GG, HH and II] carrying the name, G-P and Company. 22 (Words in bracket in the original)

Independent of the cited Article 1829 of the Civil Code on the matter of partnership dissolution, however, it bears to state that Parsons and Simon executed on December 13, 1977 a joint affidavit23 wherein they declared the dissolution of the original 3-man G-P & Co., owing to the death of Grimm. The registration on December 14, 1977 of a new Articles of Partnership of G-P & Co. followed the execution by Parsons and Simon of said affidavit. 24

It may be, as respondents rationalize, that the succeeding G-P & Co. partnerships merely continued with the business started by the original G-P & Co.25 This element of continuity, assuming to be true, does not, however, detract from the fact that the partnerships of the same name formed after Grimm's demise are entities altogether different and with personalities distinct from the original partnership.

This brings us to the next issue of whether or not the transfer to Parsons of MC No. 590, as replaced by MC No. 1088, partook of the nature of a trust transaction.

Trust is the legal relationship between one 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.26 Trust relations between parties may be express, as when the trust is created by the intention of the trustor.27 An express trust is created by the direct and positive acts of the parties, by some writing or deed or by words evidencing an intention to create a trust; the use of the word trust is not required or essential to its constitution, it being sufficient that a trust is clearly intended.28 Implied trust comes into

existence 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.29

Judging from their documented acts immediately before and subsequent to the actual transfer on September 7, 1964 of MC No. 590, Parsons, as transferee, and Grimm, as transferor, indubitably contemplated a trust arrangement. Consider:

There can be no quibbling, owing to the letter exchanges between the Club, in particular its Honorary Secretary E. C. Von Kauffman, and Parsons, that the reason Grimm transferred his MC No. 590 to Parsons was because of the latter's wish to accommodate one Daikichi Yoshida. Earlier, Parsons recommended to Club management the approval of Mr. Yoshida's "Application For Waiting List Eligible To [Club] Proprietary Membership."30 In a letter of August 10, 196431 to the MGCC's Board of Directors, Parsons endorsed the application of Yoshida as Club member. While the Club's response does not appear in its files, it is quite apparent that Parsons addressed a letter to Kauffman requesting that Yoshida be taken in as a Company assignee. In his reply-letter32 of August 29, 1964, Kauffman explained why he cannot, under Club rules, favorably act on Parsons' specific request, but suggested a viable solution, as follows:

Reference to your letter dated August 25th, there is a hitch … of assigning the playing rights to Mr. Daikichi Yoshida, as a company assignee.

xxx xxx xxx

The only solution that I see is that you transfer Pete Grimm's 100 units to your name and leave the other 100 units in your name, then you may assign the playing rights of one of the certificates for 100 units to Mr. Yoshida. Mr. Yoshida was approved by the Board but not as a Company assignee. (Emphasis added.)

Parsons' response to Kauffman's August 29, 1964 letter partly reads as follows:

Thank you for your letter of the 29th ….

Under the circumstances, please disregard the previous letter which I wrote with reference to Pete Grimm's and my shares ….

xxx xxx xxx

As matter now stands, in summary, I shall retain in my name and continue playing under such shares …. And Pete Grimm will assign his playing rights to Mr. Daikichi Yoshida.

The conclusion easily deductible from the foregoing exchanges is that, given existing Club restrictions, the simplest way to accommodate and qualify Yoshida for Club membership was for Grimm to transfer his 100-unit share to Parsons who will then assign the playing rights of that share to Yoshida.33 The RTC aptly described the relevant factual situation, viz.:

With these exchanges between Parsons and Kauffman …, it is apparent that since the shares held by Parsons and Grimm are individual shares and not company shares, their shares may not be assigned …. The proposal of Parsons that "Pete Grimm will assign his playing rights to … Yoshida" was rejected by Kauffman in his letter dated September 5, 1964 [Exhibit X-5 / 27] that "Pete Grimm's assignment to him (Yoshida) cannot be made as the rules are that only members who holds (sic) 200 units may assign 100 units to an individual." A letter of the same date … [Exhibit X-6 / 28] was sent by Kauffman to Mr. Yoshida informing him of his election to the Club apologizing for the delay …. Kauffman wrote further " … Mr. Charles Parsons has made arrangement for to play (sic) as assignee of extra membership which he now holds."

The election of Yoshida as assignee of a proprietary member and the resignation of Grimm were approved by the Club's Board… on August 27, 1964. Kauffman and Parsons were still discussing the ways … Mr Yoshida can be accommodated … as of September 5, 1964, but the resignation of Grimm and election of Yoshida was already approved … more than a week before. 34 (Words in bracket in the original; Underscoring added.)

Even on the above factual perspective alone, it is not difficult to characterize, as did the trial court, the certificate transfer from Grimm to Parsons, as temporary, there being no evidence whatsoever that the transfer was for value. Such transfer was doubtless meant only to accommodate Yoshida whose stay in the country was obviously temporary. As it were, Yoshida's application35 for Club membership juxtaposed with the August 10, 1964 endorsement- letter36 of Parsons, yielded the information that he (Yoshida) is the manager of the Manila Liaison Office of Mitsubishi Shoji Kaisha desiring to acquire Company membership in the name of his employer Mitsubishi to enable future representatives to avail themselves of Club facilities. Since Club membership did not seem possible at the time, Yoshida had to come in as an assignee of a proprietary member.

Other compelling evidence attest to the temporary nature of the transfer in question. The trial court cited two in its Decision. Wrote that court:

Even a witness for the (respondents) intervenor and the Parsons, Celso Jamias, Chief Accountant of G-P and Company, confirmed that the transfer of the share to Parsons was temporary. In a letter [Exhibit 7-GG] dated 10 August 1991 addressed to Atty. Patricia Cecilia B. Bisda, counsel for G-P and Company, Jamais wrote:

". . . please be informed that the accommodation for Mr. Yoshida to have playing rights has not bearing on the ownership of the share. The share of …Grimm (EMG) was transferred to Mr. Charles Parsons (CP) to accommodate Mr. Yoshida due to Manila Golf club requirements.

Atty. Patricia Cecilia B. Bisda …echoed the view of Jamias, in a letter [Exhibit Y] dated 30 August 1991 addressed to … (the) then General Manager of the Club: She wrote:

"Also, we would like to clarify …. That the accommodation of Mr. Yoshida to enjoy the playing rights has no bearing to the ownership of the shares. The share of Edward Grimm was transferred to Charles Parsons to accommodate D. Yoshida due to club requirements."37

Any lingering doubt, however, as to the temporary nature of the Grimm-to-Parsons transfer should, in our view, be put to rest by what MGCC records-file contained and the testimony of its former records custodian, Romeo Alhambra. In his affidavit of May 12, 1989,38 Alhambra stated that "[A]ccording to Club records, the transfer of [MC] # 580 was only temporary, and that Mr. Grimm was and, according to club records, is in fact the owner of [MC] # 1088" and that after the transfer, "Mr. Charles Parsons endorsed the share certificate and turned it over to … Kauffmann … for safekeeping." Forming parts of the same records were letters both dated February 28, 1968 – the day the share certificate transfer was effected – separately submitted by Grimm and Parsons, to inform MGCC of the temporary nature of the transfer. In his letter, Grimm stated that MC No. 1088 "is still my property and I wish it recorded as such in the Club's file."39 Parsons' letter40 was just as simple as it was revealing, thus:

Reference to the transfer of [MC] #590 in the name of Mr. E.M. Grimm to my name, for which I now have the new Certification No. 1088 …, please be advised that this transfer was made on a temporary basis and that said new certificate is still the property of Mr. E.M. Grimm and I enclose the certificate duly endorsed by me for safekeeping.

At bottom then, documented events immediately before and after the February 28, 1968 share certificate conveyance in question veritably confirm the trust arrangement Parsons had or intended to have with Grimm and vice versa, vis-à-vis MC No. 1088. If, as herein respondent G-P & Co. posits at every turn, Parsons was its trustee, then the latter's act of endorsing MC No. 1088 in blank and then delivering the same to the Club for safekeeping instead of directly to the G-P & Co. was without sense.

The trial court correctly described the relationship that was formed between Grimm and Parsons, and the consequence of such relationship, as follows:

Since the transfer of Grimm's share to Parsons was temporary, a trust was created with Parsons as the trustee, and Grimm, the beneficial owner of the share. The duties of trustees have been said, in general terms, to be: "to protect and preserve the trust property, and to see to it that it is employed solely for the benefit of the cestui que trust." xxx Parsons as a mere trustee, it is not within his rights to transfer the share to G-P and Company (sic).

The Court has, to be sure, considered the Letter of Trust41 dated September 1, 1964 largely because, in respondents' own words, it "provides the answer to the question of who the real owner of MC #1088

is."42 In the Letter he purportedly signed, Parsons declared holding MC No. 374 and MC No. 1088 as "NOMINEE IN TRUST for and in behalf of G-P AND COMPANY … or its nominee." This piece of document is not, however, a winning card for the respondents. The trial court mentioned two compelling reasons why not, both reasons bearing on the due execution and genuineness of the document. Wrote the court:

This "LETTER OF TRUST" was purportedly signed by Parsons on September 1, 1964. But the transfer of [MC] No. 590 was recorded (and MC No. 1088 issued) only on September 7, 1964 in the Club's Proprietary Membership Card No. 144 [Exhibit 8]. With the testimony of Celso B. Jamias, a long time employee of G-P and Company, the doubt as to the genuineness of the signature of Parsons on the "LETTER OF TRUST" was brought to light. Jamias was cross-examined on the signatures of Parsons on several documents including the signature of the LETTER OF TRUST":

Q:         How about the signature appearing on Exhibit CC-1 …?

A:         This is Charles Parsons, sir.

Q:     -     You are familiar with the signature?

A:         Yes, sir.

Q:     -     I'm showing you Exhibit I which is a letter of trust dated September 1, 1964, comparing those signatures which you identified above the printed name C. Parsons there are, two signatures, the signatures you identified earlier and the one appearing on the letter of trust are similar in the sense that the "s" of Parsons is elevated and it slopes down, is that correct?

xxx xxx xxx

A:     -     Based on how I see, this doesn't seem to be the signature of Parsons, it looks like but it is not, sir. [TSN, May 4, 1999, pp 5-6]. (Words in parenthesis added.)

And lest it be overlooked, Parsons had previously acknowledged Grimm to be the owner of MC No. 1088, after his earlier repeated declarations that the transfer of the replaced MC No. 580 was temporary. Parsons was thus in contextually in estoppel to deny, thru the Letter of Trust aforementioned, hypothetically assuming its authenticity, Grimm's ownership of the replacement certificate.

Summing up, the Court finds the evidence adduced and admitted by the trial court more than adequately supporting a conclusion that MC No. 1088 was issued to and held by Parsons as the trustee thereof of Grimm or his estate. The fact that respondent G-P & Co. may have paid, starting 1992, as evidence discloses, the membership fees due on MC No. 1088 does not make Grimm less of a beneficial owner. Such payment, needless to stress, is not a mode of acquiring ownership.

Parenthetically, the CA is observed to have said that in the settlement of the estate of Parsons, MC No. 1088 was not included in the list of stocks owned by him. And from this inconsequential event, the appellate court would conclude that the estate administrator recognized Parsons to be a mere trustee of such certificate. While the decision does quite say so, the implication is that Parsons was the trustee of G -P & Co.

We cannot agree with this non-sequitur approach which, at bottom, clearly tends to lower the evidentiary bar for respondents. Needless to stress, it is not for the CA and all courts for that matter to compensate for a burden of proof not discharged or a quantum of evidence not met.

The Court cannot, for two reasons, also lend cogency to the CA's observation that the heirs of Grimm may have had waived, abandoned or denounced their rights to the trust property when, for P100,000.00, they executed a Deed of Acknowledgment of Satisfaction of Partnership Interests.43 Firstly, the deed, as a quitclaim instrument, did not mention any share certificate at all, which is only logical since MC No. 1088 was not a partnership asset in the first place. Secondly, the intention to waive a known right must be clear and unequivocal. In this case, the intent to renounce beneficial ownership of MC No. 1088 cannot reasonably be drawn from the tenor of the quitclaim document. For perspective, what the heirs of Grimm stated in the Deed of Acknowledgment is that the amount of P100,000.00 they received "represents the total liquidation and complete settlement … of the entire partnership interests pertaining to the late Edward Miller Grimm as partner in G-P AND COMPANY." If, to borrow from Thompson v. Court of Appeals,44 we apply the standard norm on how a waiver must be formulated, then clearly the general terms of the aforementioned deed merely indicate a clearance from general accountability, not specifically an abandonment of ownership of the disputed share. For:

xxx. Settled is the rule that a waiver to be valid and effective must, in the first place, be couched in clear and unequivocal terms which leave no doubt as to the intention of a party to give up a right or benefit which legally pertains to him. xxx A waiver may not be attributed to a person when the terms thereof do not explicitly and clearly evidence an intent to abandon a right vested in such person. If we apply the standard rule that waiver must be cast in clear and unequivocal terms, then clearly the general terms of the cited release and quitclaim indicates merely a clearance from general accountability, not specifically a waiver of Amcham's beneficial ownership of the disputed shares.45

In all, the facts and circumstances attendant militate against the CA's finding pointing to G-P & Co. as the beneficial owner of MC No. 1088. What the evidence adduced instead proved beyond cavil is that Grimm or his estate is such owner. We therefore reverse.

WHEREFORE, the herein assailed decision of the Court of Appeals is REVERSED and SET ASIDE, and the Decision of the Regional Trial Court

of Makati City in Civil Case No. 92-2452 is REINSTATED.

Costs against the respondents.

SO ORDERED.

Puno, J., Chairperson, Sandoval-Gutierrez, Corona, and Azcuna, JJ., concur.

Footnotes1 Per Associate Justice Eubulo G. Verzola, (ret.) concurred in by Associate Justices Remedios Salazar-Fernando and Edgardo F. Sundiam; Annex "A", Petition, Rollo, pp. 7 et seq.2 Original Records, p. 2086.3 Sec. 6 of the Club's By- Laws (Exh. "U") provides: Membership in the Club shall consist of only the Proprietary Members. A Proprietary Member is one owning one (1) full [MC] and who has been elected …. A full [MC] shall consist of one hundred (100) units. No [MC] will be issued for more than one hundred (100) units, but may be issued for less.

Subject to approval of the Board …., full Proprietary [MCs] may also be acquired by Companies …. A Company Proprietary [MC] may only … be utilized by a bona fide official of the Company ….4 Per the Club's index card #144; Exh. "7-I", Original Records, p. 2571.5 Id. at 2102.6 Id. at. 2106.7 Id. at 2110.8 Exh. "C," Id. at 2232.9 Annex "B," Petition; Rollo, pp. 114 et seq.10 Annex "D," Petition; Id. at 142 et seq.11 Id. at 128 et seq.12 Penned by Judge Francisco B. Ibay; Annex "R," Petition; Id. at 797 et seq.13 Supra note 1.14 MGCCI's Comment on Petitioner's Petition for Review, Rollo, pp. 252 et seq.15 Sampayan v. Court of Appeals, G.R. No. 156360, Jan. 14, 2005, 448 SCRA 220, citing cases. Reyes v. Court of Appeals, G.R. No. 110207, July 11, 1996, 258 SCRA 651.

16 Art. 1448. There is 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. xxx.17 Exh. "13" and submarkings; Original Records, pp. 2610 -12.18 Tison v. Court of Appeals, G.R. No. 121027, July 31, 1997, 276 SCRA 582; Angeles v. Maglaya, G.R. No. 153798, September 2, 2005, 469 SCRA 363.19 Rule 131, Sec. 3[r], Rules of Court.20 CA Decision, p. 9; Rollo, p. 16.21 Original Records, p. 2427.22 RTC Decision, p. 10; Rollo, p. 2975.23 Id. at 2094.24 Id. at 2103 et seq.25 Comment to Petition for Review, p. 51; Id. at 140.26 Tolentino, Commentaries & Jurisprudence on the Civil Code of the Philippines, Vol. IV, 1991 ed., p. 669, citing 54 Am Jur. 21.27 Art. 1441, Civil Code; Vda. De Esconde v. Courts of Appeals, G.R. No. 103635, February 1, 1996, 253 SCRA 66.28 Art. 1444, Civil Code.29 Valdez vs. Olarga, G.R. No. L-22571, May 25, 1973, 51 SCRA 71.30 Exh. "X-2"/ "24-a."31 Exh. "X-1"/ "24," Original Records, p. 2643.32 Exh. "X-3"/"25."33 Sec. 31 of the Club's 1968 By- Laws provides: "A member may own more than one (1) full Membership Certificate …. The owner of more than one (1) full Membership Certificate shall be entitled to transfer such certificate, permanently or temporarily, to any person who has been duly elected to membership ….34 RTC Decision, pp. 5-6; Rollo, pp. 801-802.35 Supra note 30.36 Supra note 31.37 ----Pages 6-7; Rollo, pp. 802-803.38 Exh. "J," Original Records, pp. 2244-2245.39 Exh. "L," Id. at 2247.

40 Exh. "M," Id. at 224841 Exh. "7-mm."42 Comment to Petition for Review, p. 41; Rollo, p. 130.43 Exh. "3-F," Original Records, pp. 2552 et seq.44 G.R. No. 116631, October 28, 1998, 298 SCRA 280.45 Ibid. at 293-294.