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Morales vs. CA (1997) (Beauty shop)

Doctrine:
1. A trust is the legal relationship between one person having an equitable ownership in property and another person
owning the legal title to such property, the equitable ownership of the former entitling him to the performance of
certain duties and the exercise of certain powers by the latter. The characteristics of a trust are:
a. It is a relationship;
b. It is a relationship of fiduciary character;
c. It is a relationship with respect to property, not one involving merely personal duties;
d. It involves the existence of equitable duties imposed upon the holder of the title to the property to deal
with it for the benefit of another; and
e. It arises as a result of a manifestation of intention to create the relationship.
2. 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.
Facts:
Cast of Characters:
Celso Avelino Owner of the premises in question
Priscilla Morales Sister of Celso Avelino, claims ownership of the land
Rodolfo Morales Son of Priscilla, built beauty shop on premises in question
Ranulfo and Erlinda Ortiz Purchased premises in question from Celso Avelino
Aurea Avelino Sister of Celso, caretaker of the premises in question
Rosendo Avelino and Juana Ricaforte Parents of Celso, Aurea and Priscilla
Ranulfo and Erlinda Ortiz claim that they are the absolute and exclusive owners of the premises in question (318
sq.m. land located at corner Umbria St. and Rosales Blvd. Brgy. Central, Calbayog City) through their purchase of the
said property from Celso Avelino and stated the following:
The property was purchased by Celso Avelino (the Ortiz's predecessor in interest) when he was still a bachelor and
a city fiscal of Calbayog city from Alejandra Mendiola and Celita Bartolome through an "Escritura de Venta." After the
purchase, he caused the transfer of the title as well as the tax declarations in his name. He faithfully paid the taxes and
kept the receipts thereof. He also caused a survey of the premises in question with the Bureau of Lands and built a
residential house thereon. He took his parents Rosendo Avelino and Juana Ricaforte and his sister Aurea to live in his
property until their death. Celso Avelino then became an Immigration Officer and later a Judge of the Court of First
Instance in Cebu so he left his property under the care of his sister, Aurea. Without his knowledge, his nephew Rodolfo
Morales (a son of his other sister, Priscilla) constructed a beauty shop on the premises in question. Celso thereafter sold
the property to Ranulfo and Erlinda Ortiz (Celso's neighbors), they paid the purchase price and a deed of absolute sale was
executed. Rodolfo Morales, however, refused to vacate the premises unless he is reimbursed P35,000. He also occupied
the residential building on the property, took in paying boarders and even claimed ownership of the premises in question.
Rodolfo Morales contends that his grandparents Rosendo Avelino and Juana Ricaforte originally owned the
premises in question. The property was allegedly bought by Celso Avelino who was entrusted by Rosendo with the
money to buy it. They caused the name of the property to be under Celso Avelino being the only son. When Rosendo
Avelino and Juana Ricaforte died, their children: Celso Avelino, Trinidad Cruz, Concepcion Peralta, Priscilla Morales and
Aurea Avelino succeeded as owners thereof.
Issues:
1. W/N Celso Avelino acquired the property as a mere trustee.
2. W/N Rodolfo Morales a builder in good faith that would entitle him to reimbursement.

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Held:
1. NO.
Trusts are either express or implied. Express trusts are created by the intention of the trustor or of the parties.
Implied trusts come into being by operation of law, 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. Implied trusts are either resulting or constructive trusts. Constructive trusts are created by the
construction of equity in order to satisfy the demands of justice and prevent unjust enrichment. 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 of
circumstances of the consideration involved in a transaction whereby one person becomes invested with legal title
but is obligated in equity to hold his legal title for the benefit of another.
A resulting trust in exemplified by Article 1448 of the Civil Code: "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 having the beneficial interest of
the property. The former is the trustee, while the latter is the beneficiary. However, if the person to whom 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 disputable presumed that there is gift in favor of a child.
The last sentence of Article 1448 gives one of the recognized exceptions to the establishment of an implied
resulting trust. (The other two would be: when actual contrary intention is proved and when purchase is made in
violation of an existing statute and in evasion of its express provision.)
As a rule the burden of proving the existence of trust is on the party asserting its existence, and such proof
must be clear and satisfactorily show the existence of trust. While implied trusts may be proved by oral
evidence, evidence must be trustworthy and received by the courts wth extreme caution.
On this basis alone, Rodolfo and Priscilla Morales' claim must fail. Rodolfo and Priscilla relied merely on
testimonial evidences which are self-serving. Proof of Ranulfo and Erlinda Ortiz's lawful acquisition of the
property through Celso Avelinos ownership on the other hand was supported by documentary evidences such as
the deed of absolute sale and tax declarations. Even testimonies of Celso's other sisters prove that they believe that
he is the true owner of the property. The fact that the other siblings did not intervene in this case to protect their
right and that upon the death of their parents no extra-judicial partition occurred further strengthens Celso's
ownership. Moreover, assuming that their claim that Celso was a mere trustee is true, it still falls under the
exemption under the last sentence of Article 1448 which states that if the person to whom the title conveyed
is a child, there is a presumption that it is a gift in favor of the child.
2. NO.
Article 448 (This is on builders in good faith, look it up nalang if you want) only applies when a builder thinks he
owns the land or believes himself to have a claim of title. From the evidences adduced, Rodolfo Morales knew
from the beginning that he was not the owner of the land. Rodolfo is not entitled to reimbursement.

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Lina Pealber v. Quirino Ramos, Leticia Pealber, Bartex, Inc. (2009) (Express Trust + Hardware
Management)
Doctrine:
1. In its technical legal sense, a trust is defined as the right, enforceable solely in equity, to the beneficial
enjoyment of property, the legal title to which is vested in another; but the word trust is frequently
employed to indicate duties, relations, responsibilities which are not strictly technical trusts.
Facts:
(Note: The First Cause of Action is not Trust related. Im including it just so you know what happened in case mag-ask
siya.)
Cast:
Lina Pealber Petitioner, owner of a parcel of land and a hardware.
Leticia Pealber - daughter of Lina, wife of Quirino Ramos
Bartex third party corporation who bought the lands in question in the first cause of action.
First cause of action: Lina owned a parcel of land with a warehouse and a residential house in Ugac, Tugegarao (Ugac
Properties). She alleges that in 1986, she discovered that her TCT for the land was cancelled and a new one was issued in
favor of spouses Ramos. She learned that the reason for the cancellation was a deed of donation purporting to be signed
by her in favor of the spouses. When she confronted the spouses they said that they would just pay 1M for the property.
They did not. Petitioner also learned that the spouses were planning to sell the properties to Bartex. Through her son,
Johnson, she notified Bartex that the Ramoses were not the lawful owners of the properties. Nevertheless, the sale ensued
and a new TCT was issued in favor of Bartex. Petitioner prayed for the nullification of the new TCTs.
As regards this matter, the Trial Court said that Pealber failed to prove her ownership over the properties in question.
Moreover, Spouses Ramos showed as evidence the deed of donation which Pealber purportedly executed. The RTC said
that because it was notarized, it is entitled to full credit and a high degree of proof is needed to overthrow the
presumption of its regularity. Pealber failed to overthrow the presumption. The decision regarding this matter was not
appealed.
SECOND CAUSE OF ACTION:
Petitioner operated a hardware store in a building which she owned in Tugegarao. However, the commercial lot where the
property is situated is owned by a certain Mendoza which leased the property to her. Petitioner allowed the spouses
Ramos to manage the hardware. In 1984, Mendoza decided to sell the lot. As petitioner did not have the money to buy the
property, she allegedly entered into a verbal agreement with the respondents::
1. The lot would be bought by the spouses Ramos for and in behalf of petitioner.
2. The consideration of P80,000.00 for said lot would be paid by Ramos from the accumulated earnings of
the store;
3. Since Ramos have the better credit standing, they would be made to appear in the Deed of Sale as the
vendees so that the title to be issued in their names could be used by them to secure a loan with which to build a
bigger building and expand the business of petitioner.
The spouses Ramos then entered into a contract of sale with Mendoza. A TCT was then issued in favor of the Ramoses.
When the spouses returned the management of the hardware to Penalber, Penalber asked for reconveyance of title over the
lots. She insisted that the spouses were merely trustees of the properties and therefore they are under the legal
obligation to return the same to her. The Ramoses contended that Penalber not only ceded management of the hardware
to them but also the ownership thereof on the condition that they would use the profits from the business to pay for
Penalbers outstanding obligations. They said that after they paid Penalbers outstanding obligations they bought the
property out of their own funds. RTC decided in favor of Penalber stating that the evidence presented (inventory of
stocks when the management was transferred to Sps. Ramos) proved that there is a difference of 116, 946 Php from the

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present value of the stocks. The RTC said that this difference was due Penalber and that the same was applied as part of
the payment for the lot. Respondents Ramos filed a motion for reconsideration stating that oral evidence should not be
admitted to prove express trusts. RTC denied the motion.
CA ruled in favor of the Respondent spouses. According to them, the claim of the RTC that the difference was applied as
part of the purchase price has no basis. Petitioner alleges that there was an express trust between her and the respondents.
She maintains that it was clearly intended from their verbal agreement that she is a trustor when she entrusted the lot to
the trustees (spouses) for her benefit.
Issues:
1. W/N There is a trust agreement between the respondent and petitioner.
Held:
1. NO. In its technical legal sense, a trust is defined as the right, enforceable solely in equity, to the beneficial
enjoyment of property, the legal title to which is vested in another, but the word "trust" is frequently employed to
indicate duties, relations, and responsibilities which are not strictly technical trusts.
Trusts are either express or implied. Express trusts are created by the intention of the trustor or of the
parties. Implied trusts come into being by operation of law. Express trusts are those which are created by the
direct and positive acts of the parties, by some writing or deed, or will, or by words either expressly or
impliedly evincing an intention to create a trust. No particular words are required for the creation of an express
trust, it being sufficient that a trust is clearly intended. However, in accordance with Article 1443 of the Civil
Code, when an express trust concerns an immovable property or any interest therein, the same may not be
proved by parol or oral evidence.
The case at bar concerns an immovable property and therefore, trusts regarding the matter cannot be proven by
parol evidence from which the trial court based their ruling. However, the trial court was also correct when it
dismissed the motion for reconsideration based on the objection on parol evidence. Because respondents
objections were brought up late the same amounted to a waiver.
Nevertheless, even if the parol evidence was admitted, the same was insufficient to prove a trust agreement
between the parties. Petitioner failed to prove the existence of trust. The difference between the inventories is not
conclusive proof that the same was applied to the purchase price of the property.
Lot remains with the spouses.

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Julio v. Dalandan (1967) (4-hectare farm, document, express trust)

Doctrines:

Technical or particular forms of words or phrases are not essential to the manifestation of intention to create a
trust or to the establishment thereof. Nor would the use of some such words as trust or trustee be essential to
the constitution of a trust.
Conversely, the mere fact that the word trust or trustee was employed would not necessarily prove an
intention to create a trust. What is important is whether the trustor manifested an intention to create the kind of
relationship which in law is known as a trust. It is important that the trustor should know that the relationship
which intents to create is called a trust, and whether or not he knows the precise characteristics of the
relationship which is called a trust.

Facts:
Victoriana Dalandan owned a four-hectare piece of riceland which was used by Clemente Dalandan, as a security
for his loan. The latter failed to fulfill his obligation thus the land was foreclosed. A document was subsequently created
which acknowledged such security. In the said document, it was noted that Clemente Dalandan holds himself liable to
Victoria Julio (the sole heir of Victoriana Dalandan) and within which he promised to replace the said land with another
farm of more than 4-hectares. The document also states that Clementes children may not be forced to give up the harvest
of the abovementioned farm, and that the land may not be demanded immediately. The said document was also sworn to
by Victoria Julio.
Clemente died. Victoria Julio then subsequently tried to claim such land from the heirs of Clemente Dalandan.
The heirs claimed that because of the document neither the delivery of the land nor the fruits may be immediately
demanded. Julio acceded and asked that the heirs fix a specific time period wherein the land would be delivered to her.
The heirs refused to do so.
Julio filed a complaint saying that she was the owner and that the heirs should fix the time period wherein said
land would be delivered. The heirs filed a motion to dismiss stating that the action of Julio has prescribed. Trial court
ruled in favor the heirs holding that the action has indeed prescribed because the 10 year period from the date of the
document has elapsed.
The SC held that the heirs were usufructuaries of the land of Julio. They were only holding the land as mere
trustees of Victoria Julio. SC held that the pertinent parts of the agreed upon document states that Clemente promised to
replace the land with another farm, and that the land and its fruits may not immediately demanded from his heirs. Because
of this, by the deed, Clemente Dalandan divested himself of the ownership qualified solely by withholding enjoyment
of the fruits and physical possession. In consequence, Clemente Dalandan cannot transmit to his heirs, the present
defendants, such ownership.
But, defendants aver that recognition of the trust may not be proved by evidence aliunde (from some other
source). They argue that by the express terms of Article 1443 of the Civil Code, "no express trusts concerning an
immovable or any interest therein may be proved by parol evidence."
Issues:
1. W/N there was an express trust.
Held/Ratio:

YES, SC held that the express trust imposed upon defendants by their predecessor appears in the document itself.
For, while it is true that said deed did not in definitive words institute defendants as trustees, a duty is therein
imposed upon them when the proper time comes to turn over both the fruits and the possession of the
property to Victoria Julio. They held that technical or particular forms of words or phrases are not essential to the
manifestation of intention to create a trust or to the establishment thereof. Nor would the use of some such words
as trust or trustee essential to the constitution of a trust.

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Canezo v. Rojas (2011) (evil stepmom, laches)

Doctrines:

Although no particular words are required for the creation of an express trust, a clear intention to create a trust
must be shown and proof of fiduciary relationship must be clear and convincing. The creation of an express trust
must be manifested with reasonably certainty and cannot be inferred from loose and vague declarations.

Facts:
Soledad Canezo is suing for recovery of real property from her stepmom Rojas. She claims that she bought the
land in 1939 and entrusted it to her father when she and her husband left for Mindanao in 1948. In 1980, she found out
that her stepmom was occupying said land after her father's death. She instituted the action for recovery only in 1997.
On the other hand, stepmom Rojas contends that i t was her husband Rojas who bought the land. And that
petitioner Canezo's action was barred by laches, having been instituted 17 years after knowledge that respondent was in
possession of said land.
MTC ruled in favor of Canezo, RTC reversed saying acquisitive prescription had set in. CA affirmed. Appropriate
decision (if prescribed or barred by laches) depends on whether there was or there wasn't a trust relationship between
father and daughter over the land.
Petitioner proffered as parol evidence her arrangement with her father. It was to the effect that she will be given a
share in the produce of the property. She claims that there was an express trust and that actions for express trusts don't
prescribe.
Issues:
1. W/N there was a trust (express of implied) over the property between father and daughter.
Held/Ratio:

1. NO. Stepmom was declared the owner. The burden of proving a trust is on the party asserting its existence. An
express trust may not be established by parol evidence (see doctrine).
Even assuming that a trust existed, it would have terminated upon death of the trustee. In this case, her father died
in 1978 and she instituted the action only in 1997. She was therefore barred by laches.

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Heirs of Tranquilino Labiste v. Heirs of Jose Labiste (WW2, prescription and laches)
Doctrine:

A trust is the right to a beneficial enjoyment of property, the legal title to which is vested in another
o it is a fiduciary relationship that obliges the trustee to deal with the property for the benefit of the
beneficiary.
Express trusts are created by direct and positive acts of the parties, by some writing or deed, or will, or by words
either expressly or impliedly evincing an intention to create a trust.

Facts:
Epifanio Labiste (Epifanio), on his own and on behalf of his brothers and sisters who were the heirs of Jose
Labiste (Jose), purchased from the Bureau of Lands (BoL) Lot No. 1054 of the Banilad Friar Lands Estate, with an area of
13,308 sqm., located at Guadalupe, Cebu City for P36. After full payment of the purchase price but prior to the issuance
of the deed of conveyance, Epifanio executed an Affidavit in Spanish affirming that he, as one of the heirs of Jose, and his
uncle and petitioners predecessor-in-interest, Tranquilino Labiste (Tranquilino), then co-owned the lot because the money
that was paid to the government came from the two of them. Tranquilino and the heirs of Jose continued to hold the
property jointly.
On 2 May 1928, the Deputy Public Land Surveyor, subdivided Lot No. 1054 into two lots: Lot No. 1054-A with
an area of 6,664 sqm. for Tranquilino and Lot No. 1054-B with an area of 6,664 sqm. for Epifanio. The subdivision
plan prepared by Engr. Bunagan subsequently approved. Subsequently, the heirs of Tranquilino purchased the onehalf (1/2) interest of the heirs of Jose over the lot for P300.00. The parties executed a Calig-onan sa Panagpalit in
Visayan. The heirs of Tranquilino immediately took possession of the entire lot.
When WW2 broke out, the heirs of Tranquilino fled but upon return they found their homes and possessions
destroyed. Public records in the government offices were also destroyed during the war. Squatters have also overrun the
entire property, such that party possesses it.
Petitioners learned that one of the respondents, Asuncion Labiste, had filed a petition for reconstitution of title
over the lot. At first, they opposed the petition but both parties eventually reached a compromise agreement. Under the
agreement, petitioners were to be given time to file a complaint so that the issues could be litigated in an ordinary action
and the reconstituted title was to be deposited with the Clerk of Court to allow petitioners to file an action for
reconveyance and to annotate a notice of lis pendens. The Register of Deeds issued the reconstituted title in the name of
Epifanio Labiste, his brothers and sisters, heirs of Jose Labiste on 14 December 1994. However, respondents did not
honor the compromise agreement.
Petitioners filed a complaint for annulment of title seeking the reconveyance of property and damages.
Respondents claimed that the Affidavit of Epifanio and the Calig-onan sa Panagpalit were forgeries and that petitioners
action had long prescribed or barred by laches. The RTC found that they are genuine and authentic as ancient documents
and that they are valid and enforceable. Moreover, it held that the action had not prescribed as the complaint was filed
about a year after the reconstitution of the title by respondents. The period of prescription that applies is actually 10
years. The RTC further held that the reconstituted title did not give any more right to respondents than what their
predecessors-in-interest actually had as it is limited to the reconstitution of the certificate as it stood at the time of its loss
or destruction.
Issue:
1. W/N petitioners cause of action has prescribed
Ratio:
1. NO. What is involved in the present case is an express trust. Petitioners are declared as the absolute owners of
the lot. The genuineness and authenticity of the Affidavit of Epifanio and the Calig-onan sa Panagpalit are beyond
cavil. Express trusts are created by direct and positive acts of the parties, by some writing or deed, or will, or by
words either expressly or impliedly evincing an intention to create a trust.

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The Affidavit of Epifanio is in the nature of a trust agreement. Epifanio affirmed that the lot brought in his name
was co-owned by him, as one of the heirs of Jose, and his uncle Tranquilino. and by agreement, each of them has
been in possession of half of the property. Their arrangement was corroborated by the subdivision plan prepared
by Engr. Bunagan and approved by Acting Director of Lands.
Prescription and laches will run only from the time the express trust is repudiated. The rule requires a clear
repudiation of the trust duly communicated to the beneficiary. The only act that can be construed as repudiation
was when respondents filed the petition for reconstitution in October 1993. And since petitioners filed their
complaint in January 1995, their cause of action has not yet prescribed, laches cannot be attributed to them.

Pacheco v. Arro (1950) (Yulo, open court)

(Half of the case is in Spanish, so baka lang pag-Spanish niya tayo haha)

Doctrine:

The juridical concept of a trust, which in a broad sense involves, arises from, or is the result of, a fiduciary
relation between the trustee and the cestui que trust (beneficiary who is entitled to all the benefits of the trust) as
regards certain property real, personal, funds or money, or choses in action
o must not be confused with an action for specific performance.
A trustee cannot invoke the statute of limitations to bar the action and defeat the rights of the cestui que trust.

Facts:
Dolores Pacheco is the guardian of minors Concepcion, Alicia and Herminia Yulo, the daughters of Jose Yulo.
The Court of Appeals affirmed the earlier judgment of the CFI, ordering Jose Yulo to execute deeds of assignment in
favor of the Arro for each and every lot claimed claimed by them.
There was a cadastral case filed in the CFI of Occidental Negros. Arro, asserting title, filed answers in the
cadastral case, claiming lots as their property and began to present evidence before a referee appointed by the court in
support of their respective claims. Subsequently, Dr. Mariano Yulo, representing Jose Yulo, assured and promised in
open court that Jose would convey and assign the lots to the the Arros once the names of two streets found in Occidental
Negros be changed to the names of Joses parents. Because of such promise, Arro then withdrew his claims.
Afterwards, the cadastral court confirmed title to the lots and decreed their registration in the name of Jose Yulo. Pacheco
et al, claim that they will not issue the deed of assignment since there was no trust created. Pacheco asserts that a trustee
does not have title to the property which is the subject of the trust, because title to such is vested in the cestui que trust.
Issue:
1. W/N there was a trust created between Jose Yulo and Arro?
Held:
1. YES
The juridical concept of a trust, which in a broad sense involves, arises from, or is the result of fiduciary
relation between the trustee and the cetui que trust as regards certain property real, personal, funds or
money, or choses in action must not be confused with an action for specific performance. When the claim to
the lots in the cadastral case was withdrawn by Arro, relying upon the assurance and promise made in open court
by Mariano Yulo, in behalf of Jose, a trust or a fiduciary relation between them arose, or resulted therefrom, or
was created thereby. The trustee cannot invoke the statute of limitations to bar the action and defeat the
right of the cestui que trust. If the pretense of Pacheco that the promise made in open court cannot prevail over
the final decree of the cadastral court holding Jose to be the owner of the lots claimed by Arro were to be
substantiated and upheld, then actions to compel a party to assign or convey the undivided share in a parcel of
land registered in his name to his co-owner of co-heir could no longer be brought and could no longer suceed and
prosper.

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Petrona Gamboa, et al. v. Modesta Gamboa, et al. (1928) (failed to redeem lot, 10 parcels of land)
Doctrines:

A person who has held legal title to land, coupled with possession and beneficial use of the property for more
than ten years, will not be declared to have been holding such title as trustee for himself and his brothers and
sisters upon doubtful oral proof tending to show a recognition by such owner of the alleged rights of his brother
and sisters to share in the produce of the land. [Ergo: The requirement that express trust over immovable must be
in writing should be added as being governed by the Statute of Frauds.]
Express trust over real property cannot be constituted when nothing in writing was presented to prove it. (From
Ty v. Ty)

Facts:
(To fully understand the case, here is a brief history of the ownership of the lands in dispute)
History:
The ten (10) parcels of land all belonged to the spouses Juan Gamboa and Ana Manago, parents of the
plaintiffs and defendants. On August 27, 1907, the spouses sold 9 out 10 parcels of land under a contract of sale with
pacto de retro for two years to Felipe Javier. The spouses failed to redeem the property within the period (because
they died), which made Javier the absolute owner of the 9 parcels of land.
On June 18, 1910, Javier sold the land to defendant Modesta Gamboa and Feliciana Gamboa for Php1,700.
Php600 was paid in cash, while the remaining Php1,100 was to be paid in four annual installments. The payment was
secured by a mortgage on the said lands. On May 21, 1913, Regino P. Gamboa, brother of the sisters, paid the Php1,100
to Javier. In effect, under a document transferring interest in the mortgage to him, Regino became the owner of the
Php1,100 debt of his two sisters.
Modesta and Feliciana satisfied the debt, but Regino kept the document until his death in 1920. The widow of
Regino kept such document, which was used as evidence in this case. Modesta nevertheless produced a receipt confirming
her payment of the Php1,100 to Regino. In 1922, the sisters partitioned the land, evidenced by a written partition
document, with Modesta owning a particularly larger share because she paid a larger amount (Php1,400 of the Php1,700
price).
From the time Javier sold the lots to the sisters until the institution of this case, Modesta has been in possession,
use and ownership of the 9 parcels of land since 1910.
The Case:
This action was instituted in CFI Pampanga, by the plaintiffs Gamboa, for the purpose of enforcing partition of
some ten parcels of real property in Sta. Ana, Pampanga. The plaintiffs claim that they are co-owners with the
defendants Modesta, Pedro and Rafael Gamboa.
Defendant Modesta denied the allegations, claiming that although one (1) parcel of land belongs to the common
property of plaintiffs and defendants, 9 of the 10 parcels belong to her and have been in adverse possession for more than
ten years. This is affirmed by co-defendants Pedro and Rafael.
The trial court sided with the plaintiffs, and ordered the partition of the lands in this manner:

1/9 each to Petitioner Petrona, Feliciana, Serapion, Balbina and Mercedes de Jesus (widow of Marcelo Gamboa)
1/9 conjointly owned by heirs of Regino Gamboa: Andres, Francisco, Juan, Africa and Regino
3/9 to Modesta, in view of the fact that Pedro and Rafael had admitted her right

Modesta appealed the trial judge's decision, hence this case.

Issues:
1. Whether Modesta's purchase from Javier was under the pacto de retro contract executed by their parents, and
whether this purchase was in a trust character.

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Held/Ratio:
1. NO and NO.
The period for redemption was only two (2) years, and such period was already expired by the time
Javier sold the lands to Modesta and Feliciana. The sale was under a different contract of sale, executed between
Javier and the sisters, and the purchase was not for the benefit of the entire Gamboa clan.
Modesta and Feliciana were not mere trustees to the plaintiffs. The sale by Felipe Javier to the sisters was
an unconditional transfer of title to them. There was no agreement that their purchase of the property was in a
trust character, and plaintiffs have not presented any evidence proving such claim.
If there was an agreement that the sisters were purchasing the land as trustees, with their siblings as the beneficiaries,
then such agreement could be enforced. But the lack of such an agreement disprove the plaintiffs claim.

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Ty vs. Ty (2008) (No implied trust with child)

Doctrines:

If the person to whom the title is conveyed is the child of the one paying the price of the sale, no trust is implied
by law.

Facts:
Alexander Ty, son of Alejandro Ty and husband of Sylvia Ty, dies of cancer at the age of 34. Sylvia, as
Administratrix, files petition for the settlement of Alexanders intestate estate in the Quezon City RTC. She also asks
court to sell or mortgage properties in order to pay the estate tax amounting to P4,714,560.02 as assessed by the BIR. The
properties include a parcel of land in EDSA Greenhills, a residential land in Wack Wack, and the Meridien condo unit in
Annapolis, Greenhills.
Alejandro Ty opposed the move and filed for recovery of the property with prayer for preliminary injunction
and/or temporary restraining order. Plaintiff Alejandro claims that he owns the EDSA, Wack Wack and Meridien condo
unit because he paid for them. The property was supposedly registered in trust for Alexanders brothers and sisters in case
plaintiff dies. Plaintiff added that defendant acted in bad faith in including the subject properties in the inventory of
Alexander Tys estate, for she was well aware that Alexander was simply holding the said properties in trust for his
siblings. Plaintiff also claimed that Alexander had no financial capacity to purchase the disputed property, as the latter
was only dependent on the former.
Sylvia countered that Alexander had purchased the property with his money. Alexander was financially capable
of purchasing it because he had been managing the family corporations since he was 18 years old and was also engage
in other profitable businesses along with his car care business.
The RTC granted the application for preliminary injunction and decides in favor of plaintiff regarding the
recovery of the property. CA reversed the RTC stating that the implication created by law under Art. 1448 does not apply
if the property was in the name of the purchasers child. They agreed that plaintiff partly paid for the EDSA property.
Plaintiff appealed.
Issues:
1. W/N there was an implied trust under Art. 1448 of the Civil Code?
Held/Ratio:
1. NO, there was no implied trust created in relation to the EDSA property. If the person to whom the title is
conveyed is the child of the one paying the price of the sale, no trust is implied by law under Art. 1448, the socalled purchase money resulting trust. The said article provides an exception: 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 disputable presumed that there is a gift in favor of the child. The Court also noted that plaintiff
failed to prove that he did not intend a donation.
Regarding the Meridien Condo and Wack Wack property, the court said that plaintiff failed to prove that purchase
money came from him. They also said that Alexander was capable of purchasing the property as he had been
working for nine years, had a car care business, and was actively engaged in the business dealings of several
family corporations from which he received emoluments and other benefits. Hence, no implied trust created
because there was no proof that plaintiff had paid for said properties.

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Tan Sen Guan and Co. v. Philippine Trust Company (1933)

Doctrines:

There is an implication by the SC that when a trustee enters into a contract that gives rise to liability, but there is
no clear indication that he enters into the contract as trustee, then the trustee would be held individually liable on
the liability arising from the contract
But even if the contract had been authorized by the trust indenture, the Phil Trust Company in its individual
capacity would still be responsible for the contract as there was no express stipulation that the trust estate and not
the trustee should be held liable on the contract in question. In other words, when the transaction at hand could
have been entered into by a trustee either as such or in its individual capacity, then it must be clearly indicated that
the liabilities arising therefrom shall be chargeable to the trust estate, otherwise they are due from the trustee in
his personal capacity.

Facts:
Plaintiff Tan Sen Guan and Co. (TSG) secured a judgment for the sum of P21,426 against Mindoro Sugar Co., of
which the Philippine Trust Company (PTC) is the trustee. TSG and PTC entered into an agreement where TSG
assigned, conveyed, transferred and sold to PTC the full amount of the said judgment and all its rights thereto.
The agreement further stated that:
(1) PTC shall pay TSG 5,000 as satisfactory consideration,
(2) PTC agrees that should Mindoro Sugar Co., be sold, assigned or its ownership transferred in any manner
whatsoever to any person or entity including the PTC itself, it shall pay TSG an additional P10,000,
(3) In case any other creditor of the Mindoro Sugar Co. obtains in the payment of his credit, a greater proportion than
the price paid to TSG (which is P15,000 for a dept of P21,426), the PTC shall pay TSG whatever sum necessary
in order that the amount received by TSG be equal, the proportion to its claim, to that received by the said other
creditor, in proportion to his claim, and
(4) In case the Mindoro Sugar Co. is sold any person or entity which pays nothing to the creditor or pay to them in
satisfaction of the credits an amount equal or less than 70% of their respective claims, or should said creditors
from whatever source obtain in payment of their credits an amount equal or less than 70% of their respective
claims, then the PTC will only pay to TSG the additional P10,000 sum upon sale or transfer of transfer of
Mindoro Sugar Co as stated in (2)
All the properties of Mindoro Sugar Co. was subsequently sold to Roman Catholic Archbishop of Manila in a
public auction. As per TSG and PTCs agreement, TSG sought to collect the additional P10,000 from PTC. PTC didnt
want to pay. Hence, TSG filed a suit in the CFI. The CFI absolved PTC from liability, claiming that not all the properties
of Mindoro Sugar Co. were sold and that PTC is not personally liable for the P10,000 claim since it only signed the
agreement in its capacity as a trustee and not as an individual.
Issues:
1. W/N PTC is personally liable, having executed the agreement in its capacity as trustee of the properties of the
Mindoro Sugar Co.
2. W/N all the properties of Mindoro Sugar Co. were sold at the auction to Roman Catholic Archbishop
Held:
1. YES. The deed of trust between PTC and Mindoro authorizes the trustee to enter into contracts such as the one
executed with TSG. The PTC had legal title to the properties of Mindoro to protect the bond holders. So far as
PTC was concerned, it was not authorized to manage affairs of Mindoro or to enter contracts in its behalf. But
even if the contract had been authorized by the deed of trust, the PTC, in its individual capacity, would still be
liable for the contract as there was no express stipulation that the true estate and not the trustee should be
held liable on the contract in question. Not only is there no express stipulation that the trustee should not be held
responsible but in the wherefore clause of the agreement between TSG and PTC, the sum was expressly
assigned in favor of the PTC, not the PTC, trustee.

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2. YES. The sale apparently included all the real and personal properties which the sugar company held, as even the
accounts receivable by the sugar company were included. The only thing reserved from the sale was the standing
crops and it is reasonable to presume that they had already been sold between the date of the sale and the
institution of the suit.

Government v. Abadilla (1924) (Beneficiary, ayuntamiento, Palad)

Doctrines:

For trust to be effective, there must be a trustee and a cestui que trust.

The existence of an equivalent designated position in the testamentary trust to act as trustee complies with the
requirement of a trustee.

Facts:
Luis Palad, a school teacher, owns three parcels of land (coconut land). He obtained titles to the land by
composicion gratuita in 1894. In 1892, he executed a holographic will (partly written in Spanish and partly in Tagalog).
Pertinent portions of his will read:
that the cocoanut land in Colongcolong, which I have put under cultivation, be used by my wife after my death
during her life or until she marriesand if the times aforementioned should arrive, I prepare and donate it to
secondary college to be erected in the capital of Tayabas; so this will be delivered by my wife and the executors to
the Ayuntamiento of this town, should there be any, and if not, to the civil governor of this province in order to
cause the manager thereof to comply with my wishes for the good of many and the welfare of the town.
Luis Palad died in 1896. After his death, his widow Dorotea Lopez remained in possession of the land. In 1900,
she married Calixto Dolendo. In 1903, the heirs of Luis Palad brought an action against Dorotea Lopez for the partition of
the lands. They claimed that she lost her right to the exclusive use and possession of the lot when she contracted her
second marriage.
During the pendency of the action, the parties agreed to turn 2 lots over to the municipality of Tayabas. The 3rd
lot was left in the possession of Dorotea Lopez. In 1904, the action was dismissed. The municipality of Tayabas has been
in possession of the 2 lots ever since and Dorotea Lopez has likewise held uninterrupted possession of the 3rd lot.
Both the municipality of Tayabas and the heirs of Palad are claiming the lots. Dorotea Lopez is also claiming the
3rd lot. The lower court ordered the registration of the three lots in the name of the governor of the Province of Tayabas in
trust for a secondary school to be established in the municipality of Tayabas. The claimants Palad and Dorotea Lopez
appealed.
Issues:
1. W/N the clause quoted from the will of Luis Palad is valid.
Held/Ratio:
1. YES. Though unskillfully drawn and grammatically incorrect, the clause reveals the purpose of the testator.
Under the law, if provisions do not contravene some established rule or public policy, they must be respected and
given effect. Testamentary dispositions must be liberally construed. The testator proposed to create a trust for the
benefit of a secondary school to be established in the town of Tayabas, naming as trustee the ayuntamiento of the
town or if there be no ayuntamiento, then the civil governor of the Province of Tayabas.
For trust to be effective, there must be a trustee and a cestui que trust. In regard to private trust it is not always
necessary that the cestui que trust should be named, or even be in esse at the time the trust is created in his favor.
Though, there is no ayuntamiento or secondary school, the governor of the Province, may act as trustee in the
case.
Judgment is affirmed with regard to the 2 lots. Dorotea acquired the 3rd lot though possession.
* ayuntamiento: a municipal corporation.

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Cristobal v. Gomez (1927) (siblings to the rescue)

Doctrines:

Acceptance by the beneficiary of gratuitous trust is not subject to the rules for the formalities of donations.

Facts:
Epifanio Gomez owned 3 lots located in Cavite. He sold the property under Pacto de Retro to Luis Yangco,
redeemable in 5 years, with Epifanio Gomez remaining in possession in the character of a lessee. The period to redeem
expired but Yangco extended it. Gomez approached Bibiano Banas, a relative, to secure a loan. Banas only agreed if
Gomezs brother Marcelino and sister Telesfora would make themselves responsible for the loan.
Marcelino and Telesfora entered into a private partnership in participation for the purpose of redeeming the
property from Yangco. Epifanio was present when said agreement was discussed and assented to. The agreement stated
the following:

The capital of this partnership should consist of P7,000, of which Marcelino Gomez was to supply the amount of
P1,500, and Telesfora Gomez the sum of P5,550
All the property to redeemed should be placed in the name of the two and that Marcelino Gomez should be its
manager
That all the income, rent, and produce of the aforesaid property of Epifanio Gomez shall be applied exclusively to
the amortization of the capital employed by the two parties (including interest and incidental expenses)
As soon as the capital employed shall have been covered, said properties shall be returned to our brother
Epifanio Gomez or to his legitimate children
In order that the property of Epifanio Gomez may be returned, it is made essential that he shall manifest good
behavior in the opinion of Don Marcelino Gomez and Doa Telesfora Gomez jointly

More than a year later, Epifanio Gomez dies leaving Paulina Cristobal and their 4 children. Meanwhile,
Marcelino Gomez continued to possess the property and improved it. The value quintupled in value (now P50,000).
[Marcelino acquired exclusive rights over it when Telesfora conveyed her interest to him. He sold the property with pacto
de retro to Banas, redeemable within 5 years. On April 1, 1918, he redeemed the property from Banas.]
Subsequently, Paulina and children filed action to recover property from Marcelino. They claimed that the
capital had been covered by the propertys income, hence, the same should be returned to them. The TC held that
Marcelino Gomez must surrender the property. Marcelino appealed, claiming (a) the agreement was kept secret from
Epifanio and therefore he could not have accepted it before the stipulation was revoked, and that (b) Epifanio did not
accept the donation in a public instrument therefore it is unenforceable
Issues:
1. W/N a trust existed
2. W/N there was acceptance by Epifanio of the trust agreement
3. W/N acceptance in a public instrument is required for enforceability, as is the case in the law on donations.
Held/Ratio:
1. YES.
TC did not err in holding that the defendant Marcelino Gomez must surrender the property. The so-called
partnership agreement between Marcelino Gomez and his sister created a trust for the purpose of rescuing the
property of Epifanio Gomez; and now that the purpose has been accomplished, the property should be returned
to his legitimate children, as provided in the agreement.
Martinez vs. Grao applies: a person who, before consolidation of property in the purchaser under a contract of
sale with pacto de retro, agrees with the vendors to buy the property and administer it till all debts constituting an
encumbrance thereon shall be paid, after which the property shall be turned back to the original owner, is bound
by such agreement; and upon buying in the property under these circumstances such person becomes in effect a
trustee and is bound to administer the property in this character.

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2. YES. Bibiano Baas testimony contradicts the defendants claim that the trust agreement (Exhibit A) was kept
secret from Epifanio Gomez (so he could no have accepted it) Baas says that Epifanio Gomez was present
when the arrangement for the repurchase of the property from Yangco was discussed and that he assented
thereto. He even told Epifanio Gomez in the presence of his brother and sister that he should be pleased that he
was able to recover the property.
Even supposing that Epifanio Gomez may never have seen the Exhibit A, he understood the nature of the
arrangement and his assent thereto was a sufficient acceptance.
3. NO. With regard to Marcelinos claim that if Epifanio Gomez had any right in the property, such right could only
be derived from a donation, and that, inasmuch as the donation was never accepted by Epifanio Gomez in a
public instrument, his supposed interest therein is unenforceable - The Court says the partnership agreement
should not be viewed in the light of an intended donation, but as an express trust. Acceptance by the beneficiary
of gratuitous trust is not subject to the rules for the formalities of donations.

DBP v. COA (2004) Retirement Plan

Doctrine:

Where the DBP establishes a pension trust for its officers and employees and appoints trustees for the fund
whereby the trust agreement transferred legal title over the income and properties of the fund, then the principal
and the income of the fund together constitute the res or the subject matter of the trust. Since the trust agreement
established the fund precisely so that it would eventually be sufficient to pay for the retirement benefits of DBP
officers and employees then the income and profits thereof cannot be booked by DBP as its own, and DBP cannot
be directed by COA to treat such income as its own.

Trust:
Trustor: DBP
Trustees: Board of Trustees of the Gratuity Plan Fund
Beneficiary: Employee / Retirees
Facts:
The Development Bank of the Philippines (DBP) Board of Governors adopted Resolution No. 794 creating the
DBP Gratuity Plan and authorizing the setting up of a retirement fund to cover the benefits due to DBP retiring officials
and employees under Commonwealth Act No. 186, as amended. A Trust Indenture was entered into by and between the
DBP and the Board of Trustees of the Gratuity Plan Fund, vesting in the latter the control and administration of the Fund.
The trustee appointed the DBP Trust Services Department (DBP-TSD) as the investment manager, thru an Investment
Management Agreement with the end in view of making the income and principal of the Fund sufficient to meet the
liabilities of DBP under the Gratuity Plan.
In 1983, the Bank established a Special Loan Program (SLP) availed thru the facilities of the DBP Provident
Fund and funded by placements from the Gratuity Plan Fund. Under the SLP, a prospective retiree is allowed the option
to utilize in the form of a loan a portion of his "outstanding equity" in the gratuity fund and to invest it in a
profitable investment or undertaking. The earnings of the investment shall then be applied to pay for the interest due
on the gratuity loan. The excess or balance of the interest earnings shall then be distributed to the investormembers.
Pursuant to the investment scheme, DBP paid to the investor-members a total of P11,626,414.25 representing the
net earnings of the investments for the years 1991 and 1992. The payments were disallowed under AOM No. 93-2 dated
March 1, 1993 on the ground that the distribution of income of the Gratuity Plan Fund (GPF) to future retirees of
DBP is irregular and constituted the use of public funds for a private purpose. The Auditor, aside from requiring the
recipients to refund their dividends, recommended that the DBP record in its books as miscellaneous income the
income of the Gratuity Plan Fund, on the ground that the Fund is still owned by the Bank, the Board of Trustees
being a mere administrator of the Fund.

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Former DBP Chairman Antonio requested COA to reconsider AOM 93-2 arguing that the express trust created for the
benefit of qualified DBP employees under the Trust Agreement gave the Fund a separate legal personality as it
transferred legal title over the Fund to the Board of Trustees and all earnings of the Fund accrue only to the Fund.
Moreover, the income of the fund is not the income of DBP. He also asked COA to lift the disallowance of the
P11,626,414.25 distributed as dividends under the SLP on the ground that the latter was simply a normal loan transaction.
However, the COA en banc affirmed AOM 93-2 and denied the Motion for Reconsideration. Hence, the petition.Issues:
1.
2.

W/N the income of the Fund is income of DBP

W/N the distribution of dividends under the SLP is valid.

Held:
1. No.
The income of the Fund is not the income of the DBP. The DBP Board Resolution No. 794 shows that DBP intended
to establish a trust fund to cover the retirement benefits of certain employees under RA 1616. The principal
and income of the Fund would be separate and distinct from the funds of DBP, as provided in the salient portions
of said Resolution, and must be used to satisfy all of the liabilities to the beneficiary officials and employees under the
Gratuity Plan.
COA correctly observed that the right of the employees to claim their gratuities from the Fund is still immature. RA
1616 does not allow employees to receive their gratuities until they retire. However, this does not invalidate the trust
created by DBP or the concomitant transfer of legal title to the trustees.
The Agreement indisputably transferred legal title over the income and properties of the Fund to the Funds
trustees. Thus, COAs directive to record the income of the Fund in DBPs books of account as the
miscellaneous income of DBP constitutes grave abuse of discretion. The income of the Fund does not form part
of the revenues or profits of DBP, and DBP may not use such income for its own benefit. As such, it should not
be recorded in the books of account of DBP as its income.
2. No.
The High Court upheld the disallowed dividends distributed under the SLP. As the SLP enabled certain DBP
employees to utilize and even earn from their retirement gratuities even before they retired, this constitutes a
partial release of their retirement benefits, which is contrary to RA 1616 and the Gratuity Plan.
There was thus no basis for the loans granted to DBP employees under the SLP. The rights of the recipient DBP
employees to their retirement gratuities were still immature, if not a mere expectancy, when they availed of the SLP.
No portion of their retirement benefits could be considered as actually earned or outstanding before retirement.
The Supreme Court also held that since most of the DBP employees were eligible to retire within a few years when
they availed of the SLP, the refunds may be deducted from their retirement benefits.

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Ramos v. Ramos (1974) (legitimate, natural, partition, hacienda, imprescriptibility, 43 years)

Doctrines (all from outline):

Implied trusts are those which, without being expressed, are deducible from the nature of the transactions as
matters of intent, or which are superinduced on the transaction by operation of law as matters of equity,
independently of the particular intention of the parties They are ordinarily subdivided into resulting and
constructive trusts
Resulting Trusts: The rule of imprescriptibility of an action to recover property held in trust may possibly apply
to a resulting trust as long as the trustee has not repudiated the trust. A resulting trust is broadly defined as a
trust which is raised or created by the act or construction of law, but in its more restricted sense it is a trust raised
by implication of law and presumed always to have been contemplated by parties, the intention as to which is to
be found in the nature of their transaction, but not expressed in the deed or instrument of conveyance. Examples
of resulting trusts are found in articles 1448 to 1445 of the Civil Code.
Constructive Trusts: On the other hand, a constructive trust is a trust Raised by construction of law, or arising
by operation of law. In a more restricted sense and as contradistinguished from a resulting trust, a constructive
trust is A trust not created by any words, either expressly or implied evincing a direct intention to create a trust,
but by the construction of equity in order to satisfy the demands of justice. It does not arise by agreement or
intention but by operation of law If a person obtains legal title to property by fraud or concealment, courts of
equity will impress upon the title a so-called constructive trust in favor of the defrauded party A constructive
trust is not a trust in the technical sense.

Facts:
*The case has so many facts and a bit confusing because everyone are surnamed Ramos. Martin Ramos has a total of 10
Children. It is like a family drama. I placed (N) for natural and (L) for legitimate for easy reference.
Plaintiff: Emiliano Ramos - Natural (Illegitimate) - The case used "natural" rather than illegitimate
Defendant: Gregoria Ramos - Widow of Jose Ramos (Jose Ramos is a Legitimate child)
Administrator1: Rafael Ramos Younger brother of Martin Ramos (So the uncle of the children) Administrator2:
Timoteo Zayco Uncle but a brother-in-law also of Gregoria Ramos
When spouses Martin Ramos (Father) and Candida Tanate died, they were survived by their three (3)
LEGITIMATE children: Jose, Agustin and Granada. Martin Ramos, however, has seven (7) NATURAL children:
Atanacia, Timoteo, Modesto, Manuel, Emiliano, Maria and Federico. Their father left considerable real estate, the most
valuable of which were the Hacienda Calaza and Hacienda Ylaya, both located in Himamaylay, Negros Occidental.
Hacienda Calaza consists of sugar land, palay etc.
ALL (legit or acknowledged natural) of the children of Martin Ramos lived together in Hacienda Ylaya during his
lifetime and were under his care. All said children continued to live in said house of their father for years even after his
death.
Upon their father's death, his properties were left under the administration of Rafael Ramos, the younger brother of
their father and their uncle. Rafael continued to administer those properties, giving plaintiffs money as their shares of the
produce of said properties but plaintiffs not receiving any property or piece of land however, until 1913 when Rafael
gathered all the heirs, including plaintiffs, in the house of their father, saying he would return the administration of the
properties. He turned over Hacienda Ylaya to Agustin Ramos (L) and Hacienda Calaza to Jose Ramos (L).
The estate was administered for more than 6 years. The Father died 1906.There was a project of partition on
April 25, 1913 (Please refer to the case so that you could have idea on how the estate was partitioned). It was agreed in
the project of partition that: (The legitimate children will pay cash adjudication to the natural children because the 2nd
paragraph of Article 840 Family Code gives the legitimate children the right to satisfy in cash the hereditary portions of
the natural children.). This is Persons stuff already.
Jose Ramos (L) would pay the cash adjudications to Atanacia (N), Timoteo (N) and Manuel (N)

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While Agustin Ramos (L) would pay the cash adjudications to Modesto (N), Federico (N), Emiliano (N)
and Maria (N)
It was further agreed that Jose Ramos and Agustin Ramos would pay their sister, Granada, the sums of
P3,302.36 and P14,273.78, respectively (Exh. 3).
Judge Richard Campbell, in his "decision" dated April 28,1913, approved the project of partition as well as the
intervention of Timoteo Zayco as guardian of the five heirs, who were minors. Plaintiffs continuously received money
pertaining to their shares from Agustin (N) and Jose (N). They are of varied amounts.
Upon Jose Ramos death his widow GREGORIA Ramos continued to give plaintiffs money pertaining to their
shares in the products of Hacienda Calaza. She however stopped doing so in 1951, telling them that the lessee Estanislao
Lacson was not able to pay the lease rental. There was never any accounting made to plaintiffs by Jose Ramos, plaintiffs
reposing confidence in their elder brother, Nor was any accounting made by his widow, defendant Gregoria Ramos, upon
his death, plaintiff Manuel Ramos moreover having confidence in her.
THE DISCOVERIES:
Plaintiffs did not know that intestate proceedings were instituted for the distribution of the estate of their
father. Neither did plaintiffs Modesto, Manuel, Emiliano and Maria know that Timoteo Zayco, their uncle and brotherin-law of defendant widow Gregoria was appointed their guardian. There was an express admission by defendant
Gregoria Ramos that Timoteo Zayco was her brother-in-law (Small world). They never received any sum of money in
cash the alleged insignificant sum of P1,785.35 each from said alleged guardian as their supposed share in the
estate of their father under any alleged project of partition. As a matter of fact, plaintiffs Modesto and Manuel were in
1913 no longer minors at the time of the alleged project of partition of the estate being approved, both being of age at that
time. No guardian could in law act on their behalf.
Plaintiffs only discovered later on that the property administered by their elder brother Jose had a Torrens Title
in the name of his widow, Gregoria, and daughter, Candida, when plaintiff Modesto's children insisted and inquired
from the Register of Deeds sometime in 1956 or 1957. Plaintiffs did not intervene in the intestate proceedings for
(the) settlement of the estate of their brother Jose as they did not know of it.
Thus, seeking for Reconveyance.
Issues:
1. W/N the prescription and laches are available to bar the action for reconveyance of property allegedly held in
trust.
2. W/N there is fraud
3. There is also a Persons Issue about natural children
Held/Ratio:
1. YES. (Please please double check the case is really confusing )
NOT an Express Trust - The plaintiffs did not prove any express trust in this case. The expediente of the
intestate proceeding, particularly the project of partition, the decision and the manifestation as to the receipt of
shares negatives the existence of an express trust. Those public documents prove that the estate of Martin Ramos
was settled in that proceeding and that adjudications were made to his seven natural children. In Express trust, a
trustee cannot acquire by prescription the ownership of property entrusted to him or that an action to compel a
trustee to convey property registered in his name in trust for the benefit of the cestui qui trust does not, or that the
defense of prescription cannot be set up in an action to recover property held by a person in trust for the benefit of
another or that property held in trust can be recovered by the beneficiary regardless of the lapse of time.
NOT an Implied Trust - Neither have the plaintiffs specified the kind of implied trust contemplated in their
action.
We have stated that whether it is a resulting or constructive trust, its enforcement may be barred by laches
(Refer to the Doctrine above)

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In the cadastral proceedings, which supervened after the closure of the intestate proceeding, the eight lots
involved herein were claimed by the spouses Jose Ramos and Gregoria T. Ramos to the exclusion of the
plaintiffs. After the death of Jose Ramos, the said lots were adjudicated to his widow and daughter. In 1932
Gregoria T. Ramos and Candida Ramos leased the said lots to Felix Yulo. Yulo in 1934 transferred his lease
rights over Hacienda Calazato Juan S. Bonin and Nestor Olmedo, the husband of plaintiff Atanacia Ramos (N).
Bonin and Olmedo in 1935 sold their lease rights over Hacienda Calaza to Jesus S. Consing.
The rule of imprescriptibility of the action to recover property held in trust may possibly apply to resulting trusts
as long as the trustee has not repudiated the trust. The transactions prove that the heirs of Jose Ramos had
repudiated any trust which was supposedly constituted over Hacienda Calaza in favor of the plaintiffs. Under Act
190, whose statute of limitations applies to this case (Art. 116, Civil Code), the longest period of extinctive
prescription was only ten years.
Atanacia, Modesto and Manuel, all surnamed Ramos, were already of age in 1914. From that year, they could
have brought the action to annul the partition. Maria Ramos and Emiliano Ramos were both born in 1896.
They reached the age of twenty-one years in 1917. They could have brought the action from that year. The instant
action was filed only in 1957. As to Atanacia, Modesto and Manuel, the action was filed forty-three years after
it accrued and, as to Maria and Emiliano, the action was filed forty years after it accrued. The delay was
inexcusable. The instant action is unquestionably barred by prescription and res judicata.
2. Cannot be determined. Parenthetically, it may be noted that the filing of the instant case long after the death of
Jose Ramos and other persons involved in the intestate proceeding renders it difficult to determine with certitude
whether the plaintiffs had really been defrauded. The plaintiffs contend that the partition was not binding on them
(Note that their brother, Timoteo, considered himself bound by that partition). The plaintiffs have only themselves
to blame if the courts at this late hour can no longer afford them relief against the inequities allegedly vitiating the
partition of their father's estate.
3. Defendants Agustin Ramos and Granada Ramos and the late Jose Ramos accorded successional rights to the
plaintiffs because martin Ramos and members of his family had treated them as his children. Under the
circumstances, Agustin Ramos and Granada Ramos and the heirs of Jose Ramos are estopped from attacking
plaintiffs' status as acknowledged natural children
Please browse through the case. The case is long because of the discussion of how the Legitimate children gave money to
the Natural children (all their family drama as well) and there was a discussion also about different kinds of Trust.

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Diaz v. Gorricho and Agguado (1958)

Doctrine

A constructive trust is a trust raised by constitution of law, or arising by operation of law.

In constructive trusts, there is neither promise nor fiduciary relations; the so called trustee does not recognize
any trust and has no intent to hold the property for the beneficiary. Therefore, the trustor may acquire the property
by acquisitive prescription and the action of the beneficiary may be barred by laches.

Facts
The spouses Francisco Diaz and Maria Sevilla were the registered owners of 2 lots in Cabanatuan City. They held
these lots as conjugal partnership properties. Francisco died in 1919 and was survived by his widow, Maria Sevilla, and
their 3 children, Manuel, Lolita and Constancia.
Sometime in 1935, Carmen Gorricho filed an action against Maria Sevilla (case did not indicate what action) and
a writ of attachment was issued upon the shares of Maria Sevilla in the 2 lots. Carmen Gorricho acquired the
properties in public auction. After 1 year, a deed of absolute sale was executed in her favor because Maria Sevilla was
not able to redeem the property within this period. The issue lies in the mistake of the sheriff who gave the whole of the
2 lots to Carmen Gorricho, not merely the portion of the lots which she was in fact entitled to. The other
portion properly belonged to the 3 children.
Maria died and her children filed an action to compel Gorricho and her spouse Aguado to reconvey of the property to
them. The children allege that the portion was being held in trust by Gorricho and Aguada for them. They say that
Gorricho acquired the whole of the property through the mistake of the sheriff and that Article 1456 of the Civil
code states that properties acquired through error are subject to an implied trust. Also that prescription does not run
against titled properties.
In her defense, Gorricho avers that there is no trust and that the action has prescribed.
Issues
1. Whether there exists an implied trust between Carmen Gorricho and the children of Maria Sevilla
2. Whether prescription runs against a trustor in a constructive trust. In relation, whether the action for
reconveyance by the beneficiaries is barred by laches
Held
1. There is an implied trust between Carmen Gorricho and the children of Maria Sevilla.
According to Article 1456 of the Civil Code of the Philippines, 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. It was the mistake of the sheriff in giving the entire
property to Carmen Gorricho after the public auction when she was entitled only to the portion pertaining to
Maria Sevilla. This mistake of the sheriff caused an implied trust to be created by operation of law between
Carmen Gorricho and the children of Maria Sevilla.
2. The action for reconveyance of the beneficiaries is barred by laches
With regard to laches and prescription, there is a difference between express trusts and implied
trusts. Remember that express trusts are created by intention of the parties, therefore, there is a fiduciary
relationship. This fiduciary relationship disables the trustee from acquiring for his own benefit the property
in his custody, at least while he does not openly repudiate the trust, and makes such repudiation known to the
beneficiary. Therefore, a trustor in an express trust cannot adversely posses property in his custody and no
acquisitive prescription can take place. In the case of an express trust, a beneficiary is entitled to rely upon the
fidelity of the trustee. No laches exists until a reasonable time after a beneficiary is notified of a breach or
other cause of suit against the trustee. Laches does exist, however, where suit is not commenced within such
reasonable time.

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As for constructive trusts, the relationship is created by operation of law. The relationship is not
fiduciary in nature. Therefore, the trustor may acquire by prescription the property which is under his
custody. Prescription runs from the time the trust is created by law. (However, this is principle is applicable under
only when the beneficiary or the trustor is aware that a constructive trust was in fact created by operation of law.)
The so-called trustee does not recognize any trust and has no intent to hold for the beneficiary; therefore, the
beneficiary is not justified in delaying action to recover his property. It is his fault if he delays; hence, he
may be estopped by his own laches.
The instant case involves a constructive trust, hence, Carmen Gorricho may acquire the property by
prescription. Also, the Supreme Court held that the action for reconveyance instituted by the children of
Maria Sevilla is barred by laches. It took them 15 years to assert their right. The action for reconveyance is
dismissed.

Ouano vs. Republic of the Philippines (2011) (expropriation, Lahug airport, constructive trust)
Doctrines:

Constructive trusts are fictions of equity that courts use as devices to remedy any situation in which the holder of
the legal title, MCIAA in this case, may not, in good conscience, retain the beneficial interest.

Facts:
Case is a consolidation of two petitions.
In 1949, the National Airport Corporation (NAC) pursued a program to expand the Lahug Airport in Cebu. NAC
negotiated with the owners of the properties around the airport. The landowners claimed that the government negotiating
team, as a sweetener, ASSURED them that they could repurchase their respective lands should the Lahug airport
expansion project do no push through or once the Lahug airport closes or its operations transferred to Mactan-Cebu
Airport.
Some of the landowners accepted the assurance and executed deeds of sale with right of repurchase. Others
refused to sell because the purchase price was way below market value forcing the government to file a complaint for
expropriation. RTC ruled for the government. The former owners did not appeal the decision of the trial court in view of
the BUY-BACK assurance made by the government. New TCTs were issued in the name of the Republic which,
pursuant to R.A. 6958, was subsequently transferred to MCIAA.
Soon after the transfer of the lots to MCIAA (end of 1991), Lahug airport completely ceased operations, Mactan
airport having opened to accommodate incoming and outgoing commercial flights. On the ground, the expropriated lots
were NEVER UTILIZED for the purpose they were taken as no expansion of Lahug Airport was undertaken. The former
lot owners formally demanded from the government that they be allowed to exercise their promised right to repurchase.
Ouano Petition:
Soon after the MCIAA abandoned the Lahug Airport expansion project, informal settlers entered and occupied
Lot 763-A which, before its expropriation, belonged to the Ouanos. They are asking the court for the repurchase of the lot
because MCIAA ignored the demand.
MCIAA Petition:
Inocian and 4 others (children of Limbaga who originally owned 6 of the lots expropriated) and Magat (and 7
others) filed before the RTC for reconveyance of real properties and damages against MCIAA.
During trial, Inocians presented the testimony of Inocians and Uy. Uy, an employee of the CAA, testified that he
was a member of the team which negotiated for the acquisition of certain lots for the expansion of the Lahug airport. He
said that their team assured the landowners that their landholdings would be reconveyed to them in the event that the
Lahug Airport would be abandoned or if its operations were transferred to the Mactan airport.

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Inocian testified that he and his mom, attended a meeting called by the NAC team where they were also given the
same assurance. They no longer appealed in the expropriation case due to the repurchase assurance.
Issues:
1. W/N the petitioners are entitled to recover their property simply on the basis of an alleged verbal promise or
assurance?
Held/Ratio:
1. YES.
There exists an undeniable historical narrative that the predecessors of MCIAA had suggested to the landowners
of the properties covered by the Lahug Airport expansion scheme that they could repurchase their properties at the
termination of the airports venue.
MCIAAs invocation of the Statute of Frauds is misplaced primarily because the statue applies only to executory
contracts and not partially consummated contracts.
In effect, the government merely held the properties condemned in trust until the proposed public use or purpose
for which the lots were condemned was actually consummated by the government.
Since the government failed to perform the obligation that is the basis of the transfer of the property, then the lot
owners Ouanos and Inocians can demand reconveyance of their old properties after payment of condemnation
price.
Constructive trust are fictions of equity that courts use as devices to remedy any situation in which the holder of
the legal title, MCIAA in this case, may not, retain the beneficial interest. The landowners, in establishing the
trust must himself do equity in a manner as the court may deem just and reasonable.
A condemnor should commit to use the property pursuant to the purpose stated in the petition for expropriation,
failing which it should file another petition for the new purpose. If not, the condemnor should return the said
property to its private owner, if the latter so desires.

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Lopez v. Court of Appeals (2008) (be mindful of the dates, prescription ang kailangan dito).
Doctrine

1. The difference between resulting, and constructive implied trust. (Please see For the Topic of the Class Aznar
Brothers v. Aying)

2. Article 1456 (please see the footnotes)

3. The right to seek reconveyance based on an implied or constructive trust is not absolute. It is subject to
extinctive prescription. An action for reconveyance based on implied or constructive trust prescribes in 10
years. This period is reckoned from the date of the issuance of the original certificate of title or transfer certificate
of title. Since such issuance operates as a constructive notice to the whole world, the discovery of the fraud is
deemed to have taken place at that time.
Facts
The instant petition stemmed from an action for reconveyance instituted by petitioner Richard B. Lopez in his
capacity as trustee of the estate of the late Juliana Lopez Manzano (Juliana) to recover from respondents several large
tracts of lands allegedly belonging to the trust estate of Juliana.
The decedent, Juliana, was married to Jose Lopez Manzano (Jose). Their union did not bear any children. Juliana
was the owner of several properties, among them, the properties subject of this dispute. The disputed properties totaling
more than 1,500 hectares consist of six parcels of land. They were the exclusive paraphernal properties of Juliana.
On 23 March 1968, Juliana executed a notarial will, whereby she expressed that she wished to constitute a trust
fund for her paraphernal properties, to be known as Fideicomiso, to be administered by her husband. If her husband were
to die or renounce the obligation, her nephew, Enrique Lopez, was to become administrator and executor of
the Fideicomiso. As to her conjugal properties, Juliana bequeathed the portion that she could legally dispose to her
husband, and after his death, said properties were to pass to her great grandchildren.
Juliana died on 12 August 1968. The petition was pursued instead in Special Proceeding (SP 706) by her husband,
Jose, who was the designated executor in the will. On 7 October 1968, the probate court, admitted the will to probate and
issued the letters testamentary to Jose. Jose then submitted an inventory of Juliana's real and personal properties with their
appraised values, which was approved by the probate court.
Thereafter, Jose filed a Report dated 16 August 1969, which included a proposed project of partition. In the
report, Jose explained that as the only compulsory heir of Juliana, he was entitled by operation of law to one-half
(1/2) of Juliana's paraphernal properties as his legitime, while the other one-half (1/2) was to be constituted into the
Fideicomiso. At the same time, Jose alleged that he and Juliana had outstanding debts totaling P816,000.00 excluding
interests, and that these debts were secured by real estate mortgages. He noted that if these debts were liquidated, the
"residuary estate available for distribution would, value-wise, be very small."
On 25 August 1969, the probate court issued an order approving the project of partition. As to the
properties to be constituted into the Fideicomiso, the probate court ordered that the certificates of title thereto be
cancelled, and, in lieu thereof, new certificates be issued in favor of Jose as trustee of the Fideicomiso covering one-half
(1/2) of the properties listed on the project of partition; and regarding the other half, to be registered in the name of Jose as
heir of Juliana. The properties which Jose had alleged as registered in his and Juliana's names, including the disputed lots,
were adjudicated to Jose as heir, subject to the condition that Jose would settle the obligations charged on these properties.
The probate court, thus, directed that new certificates of title be issued in favor of Jose as the registered owner thereof in
its Order dated 15 September 1969. On even date, the certificates of title of the disputed properties were issued in the
name of Jose.
The Fideicomiso was constituted in S.P No. 706 encompassing one-half (1/2) of the Abra de Ilog lot on Mindoro,
the 1/6 portion of the lot in Antorcha St. in Balayan, Batangas and all other properties inherited ab intestato by Juliana
from her sister, Clemencia, in accordance with the order of the probate court in S.P. No. 706. The disputed lands were
excluded from the trust.

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Jose died on 22 July 1980. Pursuant to Jose's will, the RTC ordered on 20 December 1983 the transfer of the
disputed properties to the respondents as the heirs of Jose. Consequently, the certificates of title of the disputed properties
were cancelled and new ones issued in the names of respondents.
Petitioner's father, Enrique Lopez, assumed the trusteeship of Juliana's estate. On 30 August 1984, the RTC of
Batangas appointed the petitioner as trustee of Juliana's estate. On 11 December 1984, petitioner instituted an action for
reconveyance of parcels of land with sum of money before the RTC of Balayan, Batangas against respondents. The
complaint alleged that Jose was able to register in his name the disputed properties, which were the paraphernal
properties of Juliana, either during their conjugal union or in the course of the performance of his duties as
executor of the testate estate of Juliana and that upon the death of Jose, the disputed properties were included in
the inventory as if they formed part of Jose's estate when in fact Jose was holding them only in trust for the trust
estate of Juliana.
On 10 September 1990, the RTC rendered a summary judgment, dismissing the action on the ground of
prescription of action. Hence, this petition.
Issue

1. W/N the action for reconveyance has prescribed?

Held & Ratio

1. Yes. The resolution of this issue calls for a determination of whether or not that there was an implied trust
constituted over the disputed properties when Jose, the trustee, registered them in his name. If there was
an implied trust, then it will be subject to extinctive prescription of 10 years. The Court found that there
was indeed an implied, constructive trust when the court, by an apparent mistake, excluded the disputed
properties in the Fideicomiso and subsequently adjudicated the same to be registered under Joses name as
heir. The reckoning point of the prescription was 15 September 1969, when the disputed properties, by court
order, were registered under Joses name.1
Petitioner insists that an express trust was constituted over the disputed properties; thus the registration of
the disputed properties in the name of Jose as trustee cannot give rise to prescription of action to prevent the
recovery of the disputed properties by the beneficiary against the trustee. Juliana did indeed intend to constitute
an express trust, but the disputed properties were expressly excluded from the Fideicomiso. The probate
court adjudicated the disputed properties to Jose as the sole heir of Juliana. If a mistake was made in
excluding the disputed properties from the Fideicomiso and adjudicating the same to Jose as sole heir, the
mistake was not rectified as no party appeared to oppose or appeal the exclusion of the disputed properties
from the Fideicomiso. Moreover, the exclusion of the disputed properties from the Fideicomiso bore the
approval of the probate court. The issuance of the probate court's order adjudicating the disputed properties to
Jose as the sole heir of Juliana enjoys the presumption of regularity.
On the premise that the disputed properties were the paraphernal properties of Juliana which should have
been included in the Fideicomiso, their registration in the name of Jose would be erroneous and Jose's
possession would be that of a trustee in an implied trust. Implied trusts are those which, without being
expressed, are deducible from the nature of the transaction as matters of intent or which are superinduced
on the transaction by operation of law as matters of equity, independently of the particular intention of the
parties. The facts of the case are governed by Article 14562.

1 This period is reckoned from the date of the issuance of the original certificate of title or transfer certificate of title. Since

such issuance operates as a constructive notice to the whole world, the discovery of the fraud (or mistake as is in the case) is
deemed to have taken place at that time.

2 Article 1456 of The Civil Code of the Philippines. This article provides:

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For the Topic of the Class

In further, the Court differentiated two kinds of implied trusts in Aznar Brothers Realty Company v. Aying, to wit:
x x x In turn, implied trusts are either resulting or constructive trusts. These two are differentiated from each other
as follows:
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 of circumstances of the consideration involved in a transaction whereby one person thereby becomes
invested with legal title but is obligated in equity to hold his legal title for the benefit of another. On the other
hand, constructive trusts are created by the construction of equity in order to satisfy the demands of justice and
prevent unjust enrichment. They arise contrary to intention against one who, by fraud, duress or abuse of
confidence, obtains or holds the legal right to property which he ought not, in equity and good conscience, to
hold.
A resulting trust is presumed to have been contemplated by the parties, the intention as to which is to be found in
the nature of their transaction but not expressed in the deed itself. Specific examples of resulting trusts may be found
in the Civil Code, particularly Arts. 1448, 1449, 1451, 1452 and 1453.
A constructive trust is created, not by any word evincing a direct intention to create a trust, but by operation of
law in order to satisfy the demands of justice and to prevent unjust enrichment. It is raised by equity in respect of
property, which has been acquired by fraud, or where although acquired originally without fraud, it is against equity that it
should be retained by the person holding it. Constructive trusts are illustrated in Arts. 1450, 1454, 1455 and 1456.

ART. 1456. 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.

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Salao v Salao (1976) (fishpond inheritance)

Doctrine:

An implied trust, to be recognized, must measure up to the yardstick that a trust must be proven by clear,
satisfactory evidence, and cannot rest on vague and uncertain evidence or on loose, equivocal or indefinite
declarations

Facts:
The Spouses Manuel Salao and Valentina Salao had 4 children (Patricio, Alejandra, Juan Sr, and Ambrosia).
Patricio died and was represented by his son Valentin in the portioning of Valentinas estate. Valentins share consisted
of the biggest fishpond and another smaller fishpond, the aggregate value of which is P13,501. This exceeded the shares
of the other heirs- as the distributive share of each was only P8135.25- so Valentin paid the differential.
Ambrosia and Juan Sr. (aunt and uncle of Valentin; grandund and granduncle of petitioners) registered the
Calunuran fishpond under their names in 1911. Juan Sr. died in 1931. Valentin died in 1933 and his estate consisted of the
2 fishponds he inherited from Valentina and in the extrajudicial partition of his estate, there was no mention of any
interest he had in the Calunuran fishponds.
Ambrosia died in 1944 and donated her share in the Calunuran fishponds to her nephew Juan Jr (son of Juan Sr.).
It was after then that herein petitioners (the heirs of Valentin) demanded for reconveyance only in 1951 and filed the
action in 1952 (more than 40 yrs had passed). They claim that Ambrosia held the Calunuran fishponds intrust for their
father Valentin.
Issue:
1. W/N the Calunuran fishpond was held in trust for Valentin Salao by siblings Juan Sr. and Ambrosia
Held:
1. NO. the heirs of Valentin Salao adduced only oral evidence that was not supported by any documentary evidence
to the effect that their father Valentin had indeed a trust arrangement with their grandaunt Ambrosia and
grandaunt Juan Sr.
Where a trust is to be established by oral proof, the testimony supporting it must be sufficiently strong to prove
the right of the alleged beneficiary with as much certainty as if a document proving the trust were shown. A trust
cannot be established, contrary to the recitals of a Torrens Title, upon vague and inconclusive proof.
The Court opined that it was highly unlikely that there was a trust since Valentinas estate (great grandmother to
petitioners, mother to Juan and Ambrosia) was very lengthily partitioned and yet there was no mention of the
Calunuran ponds belonging to Valentin with Ambrosia as administratrix and custodian

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Municipality of Victorias v. Court of Appeals (1987)

Doctrines:

The existence of public records other than the Torrens title indicating a proper description of the land, and not the
technical description thereof, and clearly indicating the intention to create a trust, was considered sufficient proof
to support a claim of the cestui que trust (beneficiary).

Facts:
Norma Leuenberger, married to Francisco Soliva, inherited a certain lot in Negros Occidental from her
grandmother, Simeona Ditching. In 1963, she discovered that the questioned parcel of land used by the Municipality
of Victorias as a cemetery is within her property. Thereafter, she wrote the Mayor of Victorias regarding her discovery,
demanding payment of past rentals and requesting delivery of the area allegedly illegally occupied by the petitioner.
When the Mayor replied that municipality bought the land, she asked to be shown the papers concerning the sale but
was referred by the Mayor to the municipal treasurer who refused to show the same. Ultimately, it was established that the
deed could never be found.
In light of this, Norma sued for recovery of possession of the parcel of land occupied by the municipal cemetery.
In its answer, the Municipality, by way of special defense, alleged ownership of the lot having bought it from Simeona
Ditching sometime in 1934. However, the Municipality could not present the Deed of Sale. Nonetheless, the lower court
decided in favor of the Municipality, but the CA reversed, hence, this petition for review on certiorari.
Issue:
1. Whether or not the secondary evidence presented by the petitioner municipality is sufficient to substantiate its
claim that it acquired the disputed land by means of a Deed of Sale.
2. (TRUSTS ISSUE) Whether or not Norma was the owner of the land or just a mere trustee.
Held/Ratio:
1. YES. The secondary evidence was sufficient to establish the existence of the sale. Under the Rules of Court,
when the original writing has been lost or destroyed, or cannot be produced in court, upon proof of its execution
and loss or destruction or unavailability, its contents may be proved by a copy, or by a recital of its contents in
some authentic document, or by the recollection of witnesses. In this case, the Municipality was able to present
an authentic document containing pertinent information regarding the sale (subject land, parties, consideration,
names of witnesses, date, etc. Further, the tax declarations proved to show the boundaries of the lot in question.
Moreover, the law provides that the thing sold shall be understood as delivered, when it is placed in the control
and possession of the vendee. Where there is no express provision that title shall not pass until payment of
the price, and the thing sold has been delivered, title passes from the moment the thing sold is placed in the
possession and control of the buyer.
Similarly, when the sale is made through a public instrument, the execution thereof shall be equivalent to the
delivery of the thing which is the object of the contract, if from the deed; the contrary does not appear or cannot
be clearly inferred. The execution of the public instrument operates as a formal or symbolic delivery of the
property sold and authorizes the buyer to use the document as proof of ownership.
Still more, in the case at bar, it is undisputed that petitioner had been in open, public, adverse and continuous
possession of the land for a period of more than thirty years.
Therefore, in view of the foregoing, even if the original Deed of Sale cannot be presented, the Municipality
was able to prove that the sale between it and Simeona, from whom Norma acquired the alleged ownership,
indeed happened.
2. NO. Norma was a mere trustee. As a consequence to the above ratio, Norma, admittedly inheriting the land
from her grandmother, who had already sold the land to the petitioner in 1934, merely stepped into the shoes of
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of the disputed land, she had no legal right to do so as she had no ownership of the land since land registration is
not a mode of acquiring ownership but only of confirming ownership of the land (note that Norma became the
registered owner only in 1963, whereas the sale actually happened in 1934).
Thus, where the land is decreed in the name of a person through fraud or mistake, such person is by
operation of law considered a trustee of an implied trust for the benefit of the persons from whom the
property comes. The beneficiary shall have the right to enforce the trust, notwithstanding the irrevocability of the
Torrens title and the trustee and his successors-in-interest are bound to execute the deed of reconveyance.
As the land in dispute is held by Norma in trust for the Municipality, it is logical to conclude that the latter, herein
proved as the beneficiary of a trust, can neither be deprived of its possession nor be made to pay rentals thereof.
Norma is in equity bound to reconvey the subject land to the cestui que trust, the Municipality of Victorias.

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PNB v. CA (1993) (payment of two checks: $1,400 and $14,000 / solutio indebiti v. constructive trust)
Doctrines:

Syllabus: implied trusts, including constructive trusts, together with quasi-contracts both embodying he principle
of equity over strict legalism have been incorporated in our Civil Code
Art: 1456 (Constructive Trust) If a 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
There is no showing that Art. 1456 does not allow for mutual mistake, or mistake in either the grantors or
grantees part.

Facts:
Private respondent B. P. Mata & Co (Mata) is engaged in providing goods and services to shipping companies,
one of which is Star Kist, for whom Mata made advances for the crews medical expenses and others. Then Star Kist pays
Mata back for these advances. On February 21, 1975, Star Kists bank, Security Pacific National Bank of LA (SEPAC),
effected payment by order its agent in the Philippines, PNB, to pay Mata the amount of $14,000, to be deposited with
Matas account in Insular Bank of Asia and America. However, PNB noticed an error and sent a service message to
SEPAC. As it turns out, PNB should only pay $1,400 and not $14,000.
So on Feb. 24, PNB issued a cashiers check to Mata, payable to the amount of $1,400. However, merely 14
days later, on March 11, PNB issued another cashiers check to Mata, for the amount of $14,000. Six years after, in
1981, PNB discovered their mistake and demanded that Mata return the amount of the 2nd check. In 1982, PNB
instituted an action for the collection or refund of the $14,000 arguing that a constructive trust was instituted based on Art.
1456.
Mata argued that it wasnt a constructive trust but a quasi-contract of solutio indebiti, where if one party receives
something which he has no right to demand it, or it has been delivered by mistake, then the obligation to return it arises
(Art. 2154). Mata says that under Art. 1456, it is the recipient who must have acted in fraud or committed a
mistake in order that a constructive trust will arise, while in Art. 2154, it is only the one who delivers who commits
a mistake. And under solutio indebiti, the action has already prescribed because the case was instituted 7 years after the
right accruedbeyond the 6-year prescription period of quasi-contracts. The RTC and CA agreed with Mata and
dismissed the complaint.
Issues:
1. W/N PNBs cause of action properly fell within the ambit of constructive trusts and not solutio indebiti
Held/Ratio:

1. It does not matter because PNB cannot recover either way because his cause of action has been barred by
laches. Its quite amazing that it took PNB almost 7 years to discover the mistake, and its reasoning (that the
volume of international transactions handled by its Cable and Remittance Division) is unpersuasive and specious.
However, the court still decided to discuss the differences between a constructive trust and solutio indebiti. The
court said that there is no showing that under Art. 1456, the mistake or fraud must have been on the part of the
recipient or grantee. So in effect, really, PNB could have made a claim under either solutio indebiti or
constructive trust. However, since the action for solutio indebiti has already prescribed, then he is left to argue
under a constructive trust. And while the case was within the prescriptive period for that, its still barred by
laches.
The court said that under American jurisprudence, there is no fiduciary duty arising from a constructive trust, and
that under implied trusts, the only duty is to surrender and not manage the property. Both constructive trusts and
quasi-contracts are misnomers, because they are far removed from the definition of trusts and contracts.
However, in the interest of preventing unjust enrichment, the law provides for certain obligations which are
named as such. Under American jurisprudence, quasi-contracts give rise to personal liability ordinarily
enforceable by an action at law while constructive trusts are enforceable by a proceeding in equity to compel
the defendant to surrender specific property. The distinction is more procedural than substantive. Both are

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grounded upon Civil Law principles as expressed in the Latin maxim, Nemo cum alterius detrimento
locupletari potest.

Paringit v. Bajit (2010) (Implied trust in favor of 5 siblings, brother who paid is being selfish wanting to claim the
property for himself)
Doctrine:

Implied trust under Article 1450 presupposes a situation where a person, using his own funds, buys property on
behalf of another, who in the meantime may not have the funds to purchase it. Title to the property is for the time
being placed in the name of the trustee, the person who pays for it, until he is reimbursed by the beneficiary, the
person for whom the trustee bought the land. It is only after the beneficiary reimburses the trustee of the purchase
price that the former can compel conveyance of the property from the latter.

Facts:
Spouses Julian and Aurelia Paringit were the lessees of a lot in Sampaloc, Manila. They built a home on the lot
and lived there with their 5 children: Florencio, Felipe, Marciana, Adolio, and Rosario.
Terocel Realty, the lessor, offered to sell the lot to Julian Paringit. Julian wanted to buy the property but he did
not have enough money. Only his son Felipe had the financial capacity to pay the purchase price. Therefore, Felipe and
his wife Josefa purchased the property from Terocel for Php55,500. A Deed of Absolute Sale was executed in their favor
and title was turned over to them.
In 1985, Julian executed an affidavit to clarify the issue of the ownership of the property. Julian claimed that it
was bought for the benefit of all his children. The affidavit stated:
Terocel Realty, Inc., owners of the lots in Sampaloc, gave a limited period to occupants like us within which to
purchase the lands occupied and as I had no funds at that time, I asked all my children and their respective
spouses to contribute money with which to purchase the lot and thereafter to divide the lot among themselves but
only my son Felipe Paringit and his wife Josefa answered my plea and so, in order that they could purchase the
land, I assigned to my son and his wife my right to the whole property and with this assignment, the couple
purchased the parcel of land from the Terocel Realty, Inc. for the sum of Fifty Five Thousand Five Hundred Pesos
(P55,500.00) Philippine currency.
...
The (property) must be divided equally among my five children at 15 sq. m. each; but each of them should
reimburse their brother Felipe and his wife, Josefa the proportional amount advanced by them
The siblings Marciana, Rosario and Adolio signed their concurrence to the affidavit. Josefa, Felipes wife signed the affidavit
for Felipe who was in Saudi Arabia. Only Florencio did not sign.
Although the lot was registered under the name of Felipe and his wife, they moved into a different house on the same street
where the subject property is situated. While the three other siblings occupied the house. After Julian died, Felipe sent demand letters
for rentals to his siblings who were occupying the lot. Marciana and the other siblings refused to pay rent contending that they all
inherited the land from their father. Felipe succeeded in securing an ejectment against his siblings and thereafter moved into the house
with his wife.
Marciana and the other siblings filed the present action for annulment of title and reconveyance of the property. In his
answer, Felipe denied knowledge of any agreement that the property would be purchased for all of them. Josefa, Felipes wife who
signed the affidavit said she only signed because if she did not, everyone would be mad at her. She further says she merely signed to
admit having received such affidavit.

Issues:
1. W/N Felipe and his wife purchased the subject lot under an implied trust for the benefit of all the children of
Julian
2. W/N Marciana and the other siblings right of action was barred by prescription or laches

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Held:
1. YES, there was indeed an implied trust over the subject property under Article 1450 of the Civil Code in favor of
Marciana and the other siblings. They must reimburse Felipe of their corresponding share in the purchase price.
Article 1450 presupposes a situation where a person, using his own funds (Felipe in this case), buys
property on behalf of another, who in the meantime may not have the funds to purchase it (his father Julian for the
benefit of the 5 siblings). Title to the property is for the time being placed in the name of the trustee, the person
who pays for it (Felipe), until he is reimbursed by the beneficiary, the person for whom the trustee bought the land
(the other siblings).
Julian said in his affidavit that Felipe and his wife bought the lot from Terocel Realty on his behalf and on
behalf of his other children. Felipe and his wife advanced the payment because Julian and his other children did
not then have the money needed to meet the realty company's deadline for the purchase. Julian added that his
other children were to reimburse Felipe for the money he advanced for them.
The circumstances of this case are exactly what implied trust is about. Although no express agreement
covered Felipe and his wife's purchase of the lot for the siblings and their father, it came about by operation of
law and is protected by it. The nature of the transaction established the implied trust.
Furthermore, Felipe and his wife demanded rent from Marciana and the others only a year after Julian's
death in 1994. This shows that from 1984 when they bought the lot to 1995, when they made their demand on the
occupants to leave, or for over 10 years, Felipe and his wife respected the right of the siblings to reside on the
property. This is incompatible with their claim that they bought the house and lot for themselves back in 1984.
2. NO. The action of Marciana and the other siblings is not barred by prescription nor by laches.
An implied trust prescribes within 10 years from the time the right of action accrues. The beneficiary's
cause of action arises when the trustee repudiates the trust, and not when the trust was created as Felipe and his
wife contend. The spouses registered the lot in their names in January 1987 but they could not be said to have
repudiated the implied trust by that registration. Their purchase of the land and registration of its title in their
names are not incompatible with implied trust. It was understood that they did this for the benefit of Julian and all
the children.
Felipe and his wife also claim that Marciana and the others action was barred by laches. There is no basis
for such claim. They had no reason to file an earlier suit against Felipe and his wife since the latter had not
bothered them in their possession for so long. There was repudiation only when Felipe sent demand letters after
which Marciana and the other siblings immediately took legal action.

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Heirs of Emilio Candelaria v. Romero (1960)

Doctrines:

Where the original buyer of an immovable property had sold all his interest thereto to a third person who
reimbursed him all amounts previously, but continued to pay the balance of the installments in the name of the
original buyer with understanding that upon full payment the title would be transferred to the original buyer, an
implied trust had been constituted (original buyer is the trustee; third person is the trustor).

Constructive or implied trusts may be barred by the lapse of time. Laches constitutes a bar to actions to enforce
the trust, and repudiation is not required, unless there is concealment of the facts giving rise to the trust.

Continuous recognition of a resulting trust precludes any defense of laches in a suit to declare and enforce the
trust. The beneficiary of a resulting trust may, therefore, without prejudice to his right to enforce the trust, prefer
the trust to persist and demand no conveyance from the trustee.

Facts:
Sometime prior to 1917, Emilio and his brother Lucas Candelaria bought each a lot in a certain Solokan
Subdivision on installment basis. Lucas paid the first two installments corresponding to his lot, but later on, facing
inability to meet the subsequent installments because of his sickness, sold his interest therein to his brother Emilio. Emilio
then reimbursed Lucas the amount the latter had already paid, and thereafter continued payment of the remaining
installments until the whole purchase price had been fully satisfied. Emilio knew that such subsequent installments he was
paying were still under the name of his brother, and that upon full payment the title to the property would be transferred in
Lucas name. Emilio, moreover, had the understanding that the necessary documents of transfer will be made later, the
reason that the transaction being brother to brother.
In 1918, upon full payment, a TCT for the subject lot was issued in the name of Lucas Candelaria. From the time
Emilio bought the lot from his brother, Lucas had been collecting all its rents for his own use as financial aid to him as a
brother in view of the fact that he was bedridden without any means of livelihood and with several children to support,
although from 1926, when Emilio was confined up to his death on February 1936, Lucas had been giving part of the rents
to a certain Bautista, the second wife of Emilio, in accordance with the latter's wishes. Lucas died in August 1942,
survived by his spouse Luisa Romero and several children. Romero and the children retained possession of the lot, having
refused to reconvey it to Ester (representative of the heirs of Emilio) despite repeated demands.
One of the main allegations in Emilios heirs complaint was that Lucas held the title to the lot merely in trust for
Emilio and that this fact was acknowledged not only by him but also by the defendants (his heirs) on several occasions.
This was not challenged by Lucas heirs.
The trial court held that an express trust, as opposed to an implied one, had been created, and such was
unenforceable because it was not in writing. The trial court furthered that the title having been issued 38 years prior to the
present action, such action has already prescribed.
Issues:
1. W/N there was an implied trust, as opposed to an express trust.
2. W/N Emilios heirs action for reconveyance must prosper.
Held:
1. YES. There was an implied trust. 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. This is founded on equity. It is also the rule there 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. From the facts of this case, it is apparent that Emilio Candelaria who
furnished the consideration intended to obtain a beneficial interest in the property in question; the property in

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question was acquired by Lucas Candelaria under circumstances which show it was conveyed to him on the faith
of his intention to hold it for, or convey it to the grantor, Emilio.
2. NOT DECIDED. Constructive or implied trusts, as one created in this case, may be barred by lapse of time.
Continuous recognition of a resulting trust, however, precludes any defense of laches in a suit to declare and
enforce the trust. The fact that Lucas held the title to the lot in question merely in trust for Emilio and that this fact
was acknowledged not only by him but also by his heirs was merely alleged in the complaint. Therefore, the
Court cannot make any conclusive holding that Emilios heirs action had already prescribed. The case was
remanded to the trial court to allow Emilios heirs to show proof of their claim that there was continuous
recognition of the resulting trust.
Sidenote:

If Emilios heirs are able to convincingly prove that Lucas indeed held the property in trust for Emilio, and that
Lucas, Emilio and their respective heirs had continued acknowledgement thereof, then laches cannot lie and their
action for reconveyance must be granted.

Horacio Adaza v. Court of Appeals and Violet G. Adaza (1989)

Doctrines:

Art. 1449 deals with donation of property of a donee who shall have no beneficial title Art. 1449 states that:
There is also an implied trust when a donation is made to a person but it appears that although the legal estate is
transmitted to the donee, he nevertheless is either to have no beneficial interest or only a part thereof.
The doctrine of laches is not to be applied mechanically as between near relatives (or close relationships) which
would tend to excuse what otherwise may be considered a long delay in taking action. Moreover, continued
recognition of the existence of the trust recognizing the trust relationship precludes the defense of laches.

Facts:
Victor Adaza, Sr. and Rosario Gonzales had six kids: Horacio (petitioner), Homero, Demosthenes, Victor Jr.,
Teresita and Violeta (respondent).
Victor Sr. died in 1956. In 1953, Victor Sr. executed a Deed of Donation covering a 13.3618 hectare parcel of
land in Zamboanga del Norte in favor of Violeta. Such donation was accepted in the same instrument. It is important to
note that there was a paragraph in the Deed of Donation crossed out. The crossed-out portion states that the donee
shall share of the entire property with one of her brothers or sisters after the death of the donor. The next succeeding
paragraph states that the donee do hereby receive and accept this gift and donation made in her favor by the donor, not
subject to any condition, and do hereby express her appreciation and gratefulness for the kindness and generosity of the
donor. At the time, the land was part of the public domain. Since Victor Sr. was in possession and able to cultivate the
land for many years, Violet, with the aid of her brother Horacio, filed a homestead application covering the land. A free
patent was subsequently issued to them. Later on, an OCT was issued in Violetas name. Horacio said that it was the
intention of their father to donate the land to him and to Violeta. He also said that he crossed-out the mentioned
provision, with the consent of his father, in order to facilitate the issuance of the title.
In 1971, Horacio asked Violeta to sign a Deed of Waiver regarding the land donated by their father. The Waiver
stated that the land was owned in common by Violeta and Horacio, even though the OCT was issued in Violetas
name only. It also provided for the waiver, transfer and conveyance by Violeta in favor of Horacio of the land together
with all its existing improvements. Violeta signed the waiver.
A few months later, Violeta filed a complaint for annulment of the Deed of Waiver claiming that she was the
absolute owner of the land in question by virtue of the unconditional donation executed by their father, that she was the
registered owner, and that she signed the Waiver because of Horacios fraud, misrepresentation and undue influence. The
TC declared the Deed of Waiver as valid and binding upon Violeta. The CA reversed the decision of the TC, saying that
the Deed of Waiver was without cause or consideration because the land had been unconditionally donated to Violeta
alone.

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Issues:
1. W/N Violeta held of the land in trust for Horacio and that this fact of co-ownership was sufficient consideration
to sustain the validity of the Deed of Waiver
2. W/N Horacio still had a claim over of the land considering that 12 years had already passed from the issuance
of the OCT and 19 years from the execution of the Deed of Donation
Held/Ratio:
1. YES
The SC said that w/n there was a trust should be determined by the intent ascribed to Victor Sr. If such intent is
sufficiently shown, it must be respected and implemented through whatever medium is available. Evidence
clearly shows that the land was donated by Victor Sr. to both Violeta and Horacio on an equal sharing basis. Such
intent is evidenced by the Deed of Waiver executed by Violeta. Such waiver acknowledged that Violeta and
Horacio owned the land in common although the OCT was only in Violetas name. Violeta had signed the Deed
of Waiver voluntarily. The other Adaza children also testified that it was indeed their fathers intent to have
Violeta and Horacio share the land. In fact, a similar Deed of Waiver was executed by the other Adaza siblings.
Apparently, it became the practice of Victor Sr. to have lands acquired by them titled in the name of one or
another of their children. Victor Sr. had intended for his kids to share the properties.
The execution of the Deed of Donation by Victor Sr. created an implied trust in favor of Horacio, with respect to
half of the property donated. Article 1449 states that there is also an implied trust when a donation is made to a
person but it appears that although the legal estate is transmitted to the donee, he nevertheless is either to have no
beneficial interest or only a part thereof.
2. YES
Horacios claim is not barred by prescription nor laches. The doctrine of laches is not to be applied mechanically
as between near relatives. The fact that the parties are brother and sister tends to explained and excuse what would
otherwise appear a long delay. Besides, there was continued recognition of the existence of the trust as evidenced
by letters between Horacio and Violeta acknowledging the trust. Such continued recognition precludes the
defense of laches.

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Sing Juco & Sing Bengco v. Sunyatong & Llorente (1922) (sale of land, employee)
Doctrines:

"Equitable trust" by virtue of which the things acquired by an employee is deemed not to have been acquired for
his own benefit or that of any other person but for his principal, and held in trust for the latter

Facts:
On May 20, 1919, the plaintiffs obtained from Maria Gay a written option to purchase an estate known as "San
Antonio Estate." The term of the option expired, but the plaintiffs had it extended verbally until 12 o 'clock noon of June
17, 1919.
Antonio Sunyantong was at the time an employee of the plaintiffs and that they reposed confidence in him
and did not mind disclosing their plans to him, concerning the purchase of the aforesaid estate and the progress of their
negotiations with Maria Gay.
On a conference where Sing Juco, Sing Bengco and Antonio Sunyantong was present, the latter suggested that it
would be better if they would wait for a few days elapse before accepting the terms of the transfer proposed by
Maria Gay as not to give the impression that they are coveting the property.
In the morning of June 17, 1919, on the midday of which the term of plaintiff's option to purchase was to expire,
said defendant Antonio Sunyantong called at the house of Mari Gay when she was having breakfast, and offered to
buy the estate on the same terms proposed by her not yet accepted by the plaintiffs, making the offer to buy not for
the benefit of the plaintiff's, but for own wife, his codefendant Vicenta Llorente de Sunyatong.
In view of the opportunity that offered itself, but respecting the option granted the plaintiffs, Maria Gay
communicated by telephone with Manuel Sotelo, who was acting as broker for the plaintiffs in these transactions, and told
him that another buyer of the estate had presented himself who would accept the terms proposed by her and that she
would like to know immediately what decision had been reached by the plaintiffs on the matter.
For their reply, Sing Bengco instructed Sotelo to inform her at the time that if she did not care to wait until 12
o'clock, "ella cuidado" (equivalent to bahala siya/ ambut sa iya; may have different interpretations).
Interpreting the phrase to mean that the plaintiffs waived their option to buy, Maria Gay closed the sale of the
estate in favor of the defendant Antonio Sunyantong.
Issues:
1. Does the plaintiff-petitioners have a remedy to acquire the property?
Held/Ratio:
1. YES, the plaintiff-petitioners may acquire the property by virtue of an equitable trust.
The fact cannot be denied that he was the cause of the option having precipitously come to such an end. His
disloyalty to his employers was responsible for Maria Gay not accepting the terms proposed by the plaintiffs,
because of being certain of another less exigent buyer. Such an act of infidelity committed by a trusted employee
calculated to redound to his own benefit and to the detriment of his employers cannot pass without legal sanction.
In the North American law such sanction is expressly recognized, and the transaction of this nature might be
regarded as an "equitable trust" by virtue of which the things acquired by an employee is deemed not to
have been acquired for his own benefit or that of any other person but for his principal, and held in trust
for the latter. (There is no assignment of errors in this case.)

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Rogelio Pasino, et.al vs. Dr. Teofilo Eduardo F. Monterroyo, et.al. (2008) (unregistered homestead patent)
Doctrine:

Under the principle of constructive trust, registration of property by one person in his name, whether by mistake
or fraud, the real owner being another person, impresses upon the title so acquired the character of constructive
trust for the real owner, which would justify an action for reconveyance.

In the action for reconveyance, the decree of registration is respected as incontrovertible but what is sought
instead is the transfer of property wrongfully or erroneously registered in anothers name to its rightful owner or
to one with a better right.

Facts:
The case involves an action for reconveyance filed by the petitioners against the defendants involving Lot 2139 of
Iligan Cadastre, part of a 24-hectare land cleared by Laureano Pasino, petitioners predecessor-in-interest. Laureano
applied for a homestead patent over the subject land I n 1933, but did not receive the order, and consequently, the land
was not registered in Laureanos name. Laureano died in 1950. Thereafter a survey was conducted, and it was found
that a small creek divided the lot into two portions, identified as Lot 2138 and Lot 2139.
Petitioners had acquired OCTs in their names for the two parcels of land, until allegedly on January 1993, their
possession was interrupted by defendants.
For their part, respondents allege that they have been in open and continuous possession of Lot 2139. They allege
that they acquired the land by their predecessor-in-interest: Rufo Larumbe sold Lot 2139 to Petra Teves, who
subsequently transferred to Vicente Teves, and then to Arturo Teves, and finally to Dr. Monterroyo, respondents father,
by virtue of an oral contract.
The trial court ruled for the respondents, finding evidence that the order for Laureanos homestead patent became
functus officio when it was not registered with the Director of Deeds. The court also found that while Laureano
originally claimed the entire 24-hectares, he ceded possession over Lot 2139 to Rufo Larumbe. Gavino, one of
Laureanos tenants, thereafter started delivering to Larumbe his corresponding share in the harvests. When Lot 2139 was
sold, Gavinos successors also delivered the share of harvests to the corresponding transferors of the land Petra, Vicente,
Arturo and finally to the Monterroyos. The other tenants also never gave share of harvests to petitioners. Also, the court
found that petitioners misrepresented in their application for free patent. Petitioners appealed, but the CA affirmed.
Issue:
1. W/N The Court of appeals erred in affirming the trial courts decision.
Held/Ratio:
1. NO.
While the homestead patent was issued in Laureanos favor, it was not registered and became functus officio. In
this case, the trial court found that the preponderance of evidence favors respondents as the possessors of Lot No.
2139 for over 30 years, by themselves and through their predecessors-in-interest. Respondents were able to
present the original Deed of Absolute Sale, dated 10 July 1949, executed by Larumbe in favor of
Petra. Respondents also presented the succeeding Deeds of Sale showing the transfer of Lot No. 2139 from Petra
to Vicente and from Vicente to Arturo and the Deed of Confirmation of Absolute Sale of Unregistered Real
Property executed by Arturo in favor of respondents. Considering that petitioners application for free patent titles
was filed only on 8 January 1994, when Lot No. 2139 had already become private land ipso jure, the Land
Management Bureau had no jurisdiction to entertain petitioners application.
Under the principle of constructive trust, registration of property by one person in his name, whether by
mistake or fraud, the real owner being another person, impresses upon the title so acquired the character
of a constructive trust for the real owner, which would justify an action for reconveyance. In the action for
reconveyance, the decree of registration is respected as incontrovertible but what is sought instead is the transfer
of the property wrongfully or erroneously registered in anothers name to its rightful owner or to one with a better

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right. If the registration of the land is fraudulent, the person in whose name the land is registered holds it as a
mere trustee, and the real owner is entitled to file an action for reconveyance of the property.
In the case before us, respondents were able to establish that they have a better right to Lot No. 2139 since they
had long been in possession of the property in the concept of owners, by themselves and through their
predecessors-in-interest. Hence, despite the irrevocability of the Torrens titles issued in their names and even if
they are already the registered owners under the Torrens system, petitioners may still be compelled under the law
to reconvey the property to respondents.

Gayondato v Treasurer of the Philippine Islands (1926) (assurance fund, minor, technical trust)
Doctrines:

If a person obtains legal title to property by fraud or concealment, courts of equity will impress upon the title, a
condition which is generally in a broad sense termed constructive trust in favor of the defrauded party, but the
use of the word trust in this sense is not technically accurate and is not in the kind of trust referred to in section
106 of the Land Registration Act and which must be taken in its technical and more restricted sense.

Facts:
Domingo Gayondato owned three parcels of land, which he inherited from his mother, Ramona Granada in
1896. In 1899, Domingo married Adela Gasataya and had a child, herein petitioner Rosario Gayondato. Upon
Domingos death in 1902, Gabino Gasataya (Adelas father) took charge of the lands in question, and eventually turned
them over in 1908 when Adela married Domingo Cuachon.
Said lands were included in a cadastral case. In a hearing, Domingo Cuachon appeared on behalf of his wife and
stepdaughter and filed claims for the lots by way of answers in which he stated that the lots were the property of his wife
Adela Gasayata and of her daughter, fifteen years old of age. Notwithstanding said statement, the CFI erroneously
decreed the registration of the lots in the name of Adela alone. Subsequently, Adela, with consent of her husband,
mortgaged the property to National Bank, which Francisco Rodriguez eventually purchased (assumed liability of
mortgage and other debts).
Plaintiff brought an action to recover damages for the erroneous registration against Adela Gasataya, Domingo
Cuachon, Francisco Rodriguez and the Insular Treasurer as defendants. TC ruled in favor of the plaintiff ordering
Gasataya and Cauchon for indemnity. However, the Insular Treasurer and Francisco Rodriguez were absolved from the
complaint. Plaintiff appeals.
Issues:
1. W/N the court erred in absolving the Insular Treasurer.
2. W/N the plaintiff can recover damages by virtue of a trust. (Agency related)
Held/Ratio:
1. YES.
Sections 102-103 of the Land Registration Act provides that the liability of the land registration assurance fund is
not confined to cases where the erroneous registration is due to omission, mistake or malfeasance on the part of
the employees of the registration court, but extends to all cases in which a person is wrongfully deprived of any
kind or any interest therein, without negligence on his part, through the bringing of the land under provisions of
said Act.
In all such actions where there are defendants other than the Treasurer and damages shall have been recovered,
no final judgment shall be entered against the Treasurer until execution against the other defendants shall be
returned unsatisfied in whole or in part, and the officer returning the execution shall certify that the amount still
due upon the execution cannot be collected except by application to the assurance fund. Thereupon the court
having jurisdiction of the action being satisfied as to the truth of such return, may, upon proper showing, order the
amount of the execution and costs, or so much thereof as remains unpaid, to be paid by the Treasurer out of the
assurance fund.

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As the plaintiff appellant was a minor at the time of the registration of the land and consequently no negligence
can be imputed to her in failing to appear in court and assert her right, it is clear from the sections that in the
absence of special circumstances to the contrary the assurance fund is secondarily liable for the damages suffered
by her through the wrongful registration.
2. YES. The Attorney-General raises the point that Domingo Cuachon and Adela Gastaya prior to the registration of
the land must be considered to have held the property in trust and for the benefit of the plaintiff; and therefore it
falls under section 106 of the Land Registration Act which provides that the assurance fund shall not be liable
to pay for any loss or damage or deprivation occasioned by a breach of trust, whether express, implied, or
constructive, by any registered owner who is a trustee, or by the improper exercise of any sale in mortgageforeclosure proceedings
If a person obtains legal title to property by fraud or concealment, court of equity will impress upon the title a socalled constructive trust in favor of the defrauded party. The use of the word trust in this sense is not technically
accurate. If this is the kind of constructive trust referred to in section 106, clearly, the plaintiff cannot recover
damages from the assurance fund. But that is not the case. The term trust in section 106 must be taken in its
technical and more restricted sense, which as defined by Bouvier pertains to a right of property, real or
personal, held by one party for the benefit of another.
In this case, plaintiff was a minor at the time of the land registration. She could not have created a technical trust
of any kind. The mother was only a natural guardian as to her daughters person. She had no right of property or
administration in her daughters estate and was nothing but a mere trespasser.

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Escobar v. Locsin (1943) (trustee takes advantage of illiterate beneficiary)

Doctrines:

A trust such as that which was created between the plaintiff and Domingo Sumangil is sacred and
inviolable. The Courts have therefore shielded fiduciary relations against every manner of chicanery or detestable
design cloaked by legal technicalities.

Facts:
[This is a very short case; approximately just 1 (one) page. Its also a good case for Land Titles.]
Important Cast:

Eusebia Escobar - Illiterate landowner of a land in Nueva Ecija, the plaintiff-appelant.

Domingo Sumangil person asked by Escobar, because she was illiterate, to claim the land for her in the
course of the cadastral land proceedings which included her land

Unimportant Cast [mga extra at di importante]:

Pablo Ringor person who donated the land to Escobar propter nuptias in 1914

Juana Rigor - person to whom the parcel of land in question was assigned by partition in the intestate estate of
Domingo Sumangil and Honorata Duque [most likely wife, not stated in case]

Ramon Locsin - special administrator of the estate of Juana Ringor, the defendant.

Escobar, being illiterate, asked Sumangil to claim the land for her in the course of the cadastral land proceedings
which included her land.
The CFI of Nueva Ecija found that (1) the Escobar is the real owner of the lot which she had acquired in 1914 by
donation propter nuptias from Pablo Ringor; (2) that Escobar had since that year been in possession of the land; and that
(3) the land had been decreed in the cadastral proceedings in favor of Domingo Sumangil.
Facts show that Sumangil committed a breach of trust by claiming the lot for himself, so it was adjudicated in
favor of Sumangil.
The case is a prayer for reconveyance of land. Trial court ruled in favor of Sumangil because the one year
provided for in section 38 of the Land Registration Act (No. 496) for the review of a decree had elapsed.
Issues:
1. W/N the the prayer for reconveyance should be granted.
Held/Ratio:
1. Yes. The trial court plainly erred. The complaint did not seek the review of the decree or the reopening of
the cadastral case, but the enforcement of a trust. Hence, section 38 of Act No. 496 does not apply. The
estate of Juana Ringor as the successor in interest of the trustee, Domingo Sumangil, is in equity bound to
execute a deed of conveyance of this lot to the cestui que trust, the plaintiff-appellant. The remedy herein
prayed for has been upheld by this Court in previous cases.
A trust such as that which was created between the plaintiff and Domingo Sumangil is sacred and
inviolable. The Courts have therefore shielded fiduciary relations against every manner of chicanery or
detestable design cloaked by legal technicalities. The Torrens system was never calculated to foment
betrayal in the performance of a trust.
The court orders reconveyance and transfer of title to Escobar.

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Cavile v. Litania-Hong (2009) (Land Titles, Extrajudicial Partition vs. OCT, Preponderance of Evidence in Civil Cases)
Doctrines:

When the registered owner, be he the patentee or his successor-in-interest to whom the free patent was
transferred, knew that the land belonged to another who had been in possession thereof, and if the patentee were
never in possession of such land, the true owner may bring action to have the ownership of or the title to the land
judicially settled. Such aggrieved party may still file an action for reconveyance based on implied or constructive
trust, which prescribes in 10 years from the date of the issuance of the certificate of title over the property,
provided that an innocent purchaser for value has not yet acquired the property.

Facts:
In 1937, the heirs of the Spouses Cavile entered into a Deed of Partition. 3 of which are the legitimate children of
the spouses and the other 3 are children by Bernardo Cavile from a previous marriage. The subject of the partition were
several parcels of land situated in Negros Oriental which were covered by Tax Declarations all named under Bernardo.
Also in the Deed of Partition, Castor a legitimate son of the spouses acquired the lands with Tax Declarations No.
7143, 7421, and 7956.
In 1960, Castor recognized Susana (his sister) to be in possession of the lands covered by Tax Declarations No.
2039 and 2040 (these lands are the same as the Tax Declaration Nos. 7421 and 7956 as stated above) thru a Confirmation
of Extrajudicial Partition they executed.
In 1974, the herein Respondents (heirs of Susana) now filed a Complaint for Reconveyance of the lands. They
allege that the Petitioner Spouses (heirs of Castor) unlawfully entered the land that was acquired by them due to the
Confirmation of Extrajudicial Partition that was executed in 1960 by Castor and Susana.
The Petitioner Spouses presented an OCT in their name that was issued on 1962 for their answer. They also claim
that the Extrajudicial Partition that Castor and Susana executed was a nullity because Susana only used the said lands that
was conveyed to her by Castor as security for a loan she wanted to acquire from the Rural Bank of Dumaguete. They
added that the only reason why Susana paid taxes for the land is in order convince the bank to extend her loan.
The RTC ruled in favor of the petitioner spouses.
The CA reversed.
Issues:
1. W/N reconveyance is due for the respondents?
Held/Ratio:

1. NO. In civil cases, decisions are based on the preponderance of evidences. This being the case, the respondents
only has a Confirmation of Extrajudicial Partition executed by Castor and Susana in 1960 and Tax
Declarations as evidence. As compared to the evidence presented by the Petitioner Spouses which held an OCT
issued in 1962 in their name and Deed of Partition that was executed in 1937 which made Castor the owner of
the said lots which he bought from his co-heirs. Castor also did not waste time in enjoying and possessing the
property shortly after it was conveyed to him.
Verily, the respondents may file for reconveyance based on implied and constructive trust, which prescribes in
10 years after the issuance of the Certificate of Title, provided that there are no innocent buyers for value. They
also should be in possession of the said lands once the owner claims the land for an action for reconveyance to
prosper.
In the instant case, reconveyance was filed only in 2004 while the issuance was in 1962.
And even if the respondents filed the reconveyance case on time, it would still fail because the respondents did
not prove that they were in possession of the subject lots prior to the issuance of the title.

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Brito v Dianala (2010) (imprescriptible right, not guilty of laches)

Doctrines:

Art. 1456 of the Civil Code: 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 whom the property comes.
Generally an action for reconveyance based on an implied trust prescribes in 10 years from date of registration of
deed or date of issuance of the certificate of title over the property. However, if the action is instituted by a party
in actual possession of the property, it is imprescriptible.
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. His undisturbed possession provides
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 the one who is in
possession
Filing an action for reconveyance when the plaintiff is in possession of the property partakes of a suit for quieting
of title which is imprescriptible.

Facts:
1st Marriage
Esteban Dichimo + Francisca Dumalagan 5 children Dianalas (Defendants)
2ndMarriage

Esteban Dichimo + Eufemia Dianala Vicente (Margarita, Francisco&Bienvenido Dichimo)

Brito (Plaintiffs)

Eusebio (Edito,Maria,Hermina,Leonora,Felicito,&Merlinda Dichimo)

A parcel of land in Negros Occidental originally owned by the Spouses Esteban Dichimo and Eufemia Dianala
are in dispute. This case involves two actions for reconveyance.
First: On September 27, 1976 a civil case was filed by Plaintiff Ramon Brito, husband of Margarita Dichimo, in
behalf of the other heirs of Esteban and Eufemia Dichimo against Jose Maria Golez for recovery of possession. On the
other hand, the defendants Dianala are the heirs of the children of Esteban Dichimo and Francisca Dumalagan (first
marriage of Esteban), filed an Answer-in Intervention claiming that they have been in open, actual, public and
uninterrupted possession of the subject land for more than 30 years and that Brito and his co-heirs have disposed their
shares in the property years ago. The civil case proceeded to trial however; the Dianalas Answer-in-Intervention was
dismissed for their failure to secure the services of counsel despite ample time. Thereafter, the parties entered into a
compromise agreement approved by the RTC of Bacolod wherein the land was divided between Jose Maria Golez (whose
mother bought the portion of Eusebio Dichimos heirs) and the heirs of Vicente Dichimo. A Transfer Certificate of Title
was then issued in the name of Margarita, Bienvenido and Francisco Dichimo on September 28, 1990.
Second: On January 18, 1999 Brito and the heirs of Vicente filed another Complaint for Recovery of Possession
and Damages while the Dianalas instituted a Complaint for Reconveyance and Damages on August 18, 1999. The
Dianalas claim that Brito and the heirs of Vicente acquired property through fraud. While Brito and Dichimos claim
that the Dianalas are barred by prescription because complaint for reconveyance was filed only 8 years after the discovery
of fraud. The cases were consolidated and were dismissed by both the RTC and CA
Issues:
1. W/N Dianalas are guilty of laches and estopped questioning the RTC of Cadizs decision
2. W/N the RTC of Cadiz acquired jurisdiction
Held/Ratio:
1. NO. The Dianalas are not guilty of laches. They had no legal standing to appeal from the RTC of Bacolods
decision given that their Answer-in-Intervention which would have resulted to their voluntary submission to the

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courts jurisdiction was dismissed. They were not given the opportunity to present their claims or participate in
the compromise agreement entered into by Brito and Jose Maria Golez therefore they cannot be bound by the
judgment in the first case.
Second, Article 1456 of the Civil Code provides that a person acquiring property through fraud becomes, by
operation of law, a trustee of an implied trust for the benefit of the real owner of the property. An action for
reconveyance based on an implied trust prescribes in ten years, the reckoning point of which is the date of
registration of the deed or the date of issuance of the certificate of title over the property.
The Dianalas are not barred by prescription. As proven by the separate action for reconveyance filed by Brito, the
Dianalas are in actual possession of the property. The prescriptive period of 10 years for an action for
reconveyance does not apply to those in actual possession of the property. Filing an action for reconveyance
when the plaintiff is in possession of the property partakes of a suit for quieting of title which is
imprescriptible therefore the Dianalas cannot be guilty of laches. Furthermore, 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. His undisturbed possession provides 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 the one who is in possession
Additional: Even if the 10 year period would still be made to apply, the Dianalas would still not be barred because
the 10 year period has not expired. Their complaint for reconveyance was filed on August 18, 1999 while the
Brito only obtained title on September 28, 1990.
2. YES. The Dianalas Answer-in-Intervention was dismissed by RTC of Bacolod (first case) without prejudice
therefore a separate action to prove their possession was necessary. To deprive them thereof would be tantamount
to deprivation of property without due process of law.

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Heirs of Domingo Valientes vs. Ramas (2010) (quieting of title only after 28 years)
Doctrine:

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. However, when the plaintiff in such
action is not in possession of the subject property, the action prescribes in ten years from the date of registration
of the deed or the date of the issuance of the certificate of title over the property. When the plaintiff is in
possession of the subject property, the action, being in effect that of quieting of title to the property, does not
prescribe.

Facts:
Petitioners claim that they are the heirs of Domingo Valientes who, before his death, was the owner of a parcel of land
in Gabay, Margosatubig, Zamboanga del Sur. In 1939, Valientes mortgaged it to spouses Belen. In 1950s the Valientes
tried to retrieve the property, but failed. Spouses Belen were able to register the land in their name through a allegedly
forged VENTA DEFINITIVA. In 1970, the legitimate children of Valientes had their Affidavit of Adverse Claim duly
entered in the Memorandum of Encumbrances at the back of the property's TCT. Upon the death of Spouses Belen, their
surviving heirs executed an extra-judicial settlement with partition and sale in favor of private respondent ValenciaMinor, the present possessor of the subject property.
In 1979, Minor filed a Petition for Cancellation of Memorandum of Encumbrance, which was thereafter granted,
allowing the Register of Deeds to have the title to the subject property transferred to her name. In 1998, the petitioners
filed a Complaint for the cancellation of Minor's TCT and reconveyance of the property. This was dismissed on the
ground of forum shopping so they appealed with the CA. CA agreed with the petitioners that there was no forum
shopping but held that the petition should be dismissed on the ground of prescription and laches.
Issue:
1. W/N the quieting of title is imprescriptible
Held:
1. The action for reconveyance is a legal remedy granted to a landowner whose property has been wrongfully or
erroneously registered in anothers name, which must be filed within ten years from the issuance of the title since
such issuance operates as a constructive notice.
Petitioners contend that though the caption of their complaint was cancellation of TCT and reconveyance of
property, it is substantially in the nature of an action to quiet title which does not prescribe. However, the Court
ruled according to jurisprudence, 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 is not in
possession of the property, since if a person claiming to be the owner thereof is in actual possession of the
property, the right to seek reconveyance, which in effect seeks to quiet title to the property, does not prescribe.
The cause of action of petitioners, wherein they claim that Minors predecessor-in-interest acquired the subject
property by forgery, can indeed be considered as that of enforcing an implied trust. However, the Court made a
clear distinction in Olviga: when the plaintiff in such action is not in possession of the subject property, the action
prescribes in ten years from the date of registration of the deed or the date of the issuance of the certificate of title
over the property. When the plaintiff is in possession of the subject property, the action, being in effect that of
quieting of title to the property, does not prescribe. In the case at bar, petitioners are not in possession of the
subject property. If it were to be considered as that of enforcing an implied trust, the action should have therefore
been filed within ten years from the issuance of the TCT on December 22, 1969. However, the case was filed only
in August 20, 1998, which was way beyond the prescriptive period.
As an alternative argument, petitioners claim that the prescriptive period for filing their complaint is thirty years,
pursuant to Article 1141 of the Civil Code, in connection with Articles 1134 and 1137 thereof.

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Articles 1141, 1134 and 1137 of the Civil Code, however, are general rules on prescription which should give
way to the special statute on registered lands (PD 1529). Under the Torrens System as enshrined in P.D. No.
1529, the decree of registration and the certificate of title issued become incontrovertible upon the expiration of
one year from the date of entry of the decree of registration, without prejudice to an action for damages against
the applicant or any person responsible for the fraud.
As previously discussed, however, the Court have allowed actions for reconveyance based on implied trusts even
beyond such one-year period, for such actions respect the decree of registration as incontrovertible.
The Court have ruled before in Amerol vs. Bagumbaran that notwithstanding the irrevocability of the Torrens title
already issued in the name of another person, he can still be compelled under the law to reconvey the subject
property to the rightful owner. The property registered is deemed to be held in trust for the real owner by the
person in whose name it is registered. After all, the Torrens system was not designed to shield and protect one
who had committed fraud or misrepresentation and thus holds title in bad faith.
In an action for reconveyance, the decree of registration is respected as incontrovertible. What is sought instead is
the transfer of the property, in this case the title thereof, which has been wrongfully or erroneously registered in
another person's name, to its rightful and legal owner, or to one with a better right.
Yet, the right to seek reconveyance based on an implied or constructive trust is not absolute nor is it
imprescriptible. An action for reconveyance based on an implied or constructive trust must perforce prescribe in
ten years from the issuance of the Torrens title over the property.
As discussed above, was filed more than 28 years from the issuance of the TCT. This period is unreasonably long
for a party seeking to enforce its right to file the appropriate case. Thus, petitioners claim that they had not slept
on their rights is patently unconvincing.

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Macababbad vs. Masirag (2009)

Doctrine:

When the facts show that the signatures in the extrajudicial settlement were forgeries, even though the property
has been registered in the name of another person, the action to declare the document void ab initio does not
prescribe. Article 1410 of the Civil Code governs and not the rules on Trust.

Facts:
Pedro Masirag and Pantaleona Tulauan were the original registered owners of the land (lot no.4144 in Tugegarao)
under dispute. They had 8 children namely: Valeriano, Domingo, Pablo, Victoria, Vicenta, Inicio, Maxima and Maria.
The respondents are their children; Fernando, Faustina, Corazon, and Leonor are children of Valeriano, whicle Leoncio is
the son of Vicenta.
The respondents claim that they only discovered the death of their parents when Pilar Quinto informed Fernando
on March 1999. Upon findings of their lawyers, it was found that Petitioners falsified an Extra- judicial Settlement with
Simultaneous Sale of Portion of Registered Land with respondents signature making it appear that the respondents
participated. The supposed sale was made to Macababbad and after he registered the land under his name and sold it to
third parties. As a result, Chua was able to obtain the land and register it under his name.
Issue:
1. W/N the extrajudicial settlement and sale be declared null and void, and that Chua be ordered to reconvey the land
and pay damages to the respondent?
Held:
1. Yes. Since the nullity of the extrajudicial settlement and sale is the primary issue, then the action does not
prescribe according to art. 1410 of the civil code. More so, even though settled jurisprudence says that issuance of
titles converts the action to one of reconveyance, which prescribes in 10 years, the SC holds otherwise. The action
still does not prescribe because under the Injug ruling, reconveyance, based on the fact that a previous conveyance
was null and void ab initio, does not prescribe.
In addition, laches cannot apply in this case as well. Laches are evidentiary and cannot be established by
allegations and pleadings.

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Geronimo v. Nava (1959) (4 Lots + Express Trusts + Constructive)

Doctrine:

When a trial court decision, which had become final and executory, states that a party has the right to redeem
property from another, a constructive trust is created. Although the possessor has naked title, he holds the
property in trust for the other party to redeem subject to the payment of the redemption price.

Prescription may apply only when the trustee asserts a right adverse to that of the cestui que trust, such as
asserting acts of ownership over the property being held in trust.

Facts:
Spouses Nava owned four lots in Cabanatuan forming a single mass of 3,549 sqm, with a house erected
thereon. They mortgaged the lots to La Urbana, a building and loan association, as security for a loan. The lots were
foreclosed and bought by La Urbana. After the purchase, La Urbana immediately took possession of the property and
started to collect rentals thereon. La Urbana afterwards assigned all its rights over the property to Agatona
Geronimo, subject to the right of redemption in favor of Spouses Nava. Agatona paid Php600 as down payment for
the sale, and mortgaged the lands to La Urbana to secure the payment of the remaining 5,400. Agatona took possession of
the property and collected the rentals.
Within the 1-year period of redemption, the spouses Nava tried to redeem the property with La Urbana but the
latter refused informing Nava of the assignment to Agatona. Nava then went to Agatona to redeem the property. He
offered to meet her in the office of the Clerk of Court and waited there all day, to no avail. Nava instead bought a
cashiers check worth 3,470 and deposited it in Agatonas PNB account.
Nava filed a case in the CFI of Cabanatuan to compel Agatona and her spouse to permit him to redeem his
property after liquidation of rentals received by them and to pay for damages. Nava also filed with the Register of Deeds
a notice of lis pendens which was annotated in each of the titles. In 1942, the CFI ruled in favor of the spouses Nava
saying that they made a valid tender of payment. Moreover, because of Agatonas refusal to let Nava redeem the property,
she was considered a possessor in bad faith therefore, any rentals she received from the time of refusal until the time
reconveyance is effected should accrue in favor of Nava.
In 1956, Agatona and his husband filed another case in the lower court seeking to cancel the notice of lis pendens
annotated in their titles because according to them, no action may arise from the notice because of prescription. She was
saying that the judgment (in favor of Nava) was not executed and that the same is barred by prescription. Nava contends
that the judgment was partially executed as they (Navas) are receiving rentals from the tenants of the said property.
Moreover, the Navas already took possession of the property, the only thing missing is the actual transfer of title. The
lower court dismissed Agatonas complaint for res judicata. This case is a direct appeal to the SC.
Issues:
1. W/N the action is barred by res judicata.
2. W/N ownership of the property is still with Agatona.
Held:
1. (Sub-issue only) YES. The four requisites for the attachment of res judicata is present. But the court decided
that for reasons of equity, technicalities should be set aside and the case should be heard on the merits.
2. NO. She is only holding the property in trust for the Navas. It can be seen from the evidence that after court
judgment, Agatona personally introduced Nava to the tenants and directed them to pay rents to him.
This should be considered as a manifestation of the fact that although she held the title over the property, she
acknowledges that she merely holds the same in trust for Nava until the repurchase is effected. Such is an
express trust and it cannot be barred by prescription.
It can be contended however that the court decision adjudicating the resale of the property to the Navas
constituted merely a constructive trust which is subject to prescription. However, even so, there could be no
prescription in this case as Agatona acquiesced in the decision against her, she even let the Navas take

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possession of the property. She only asserted her alleged ownership in 1956, which evidently falls short of
the prescription period required by law.

Caladiao, et al. v. Vda. de Blas/Maxima Santos (1964) (fishpond)

Doctrines:

Where the owner of an unregistered land had sold the property to another under a sale with a right of repurchase
but was never able to exercise the right of repurchase, the registration by the seller of the property in his
name under the Torrens system was done in bad faith, and he is deemed to have constituted himself as trustee
for the buyer of the property to whom ownership was consolidated and who had been in possession thereof for
many years. the action of the buyer or his successors-in-interest to have a reconveyance of the title even when
filed more than twenty years after the seller had obtained title thereto was imprescriptible. Under Act 190 (the old
Code of Civil Procedure), section 38, which is the governing statute, prescription does not apply to
"continuing and subsisting trusts"; so that actions against a trustee to recover trust property held by him are
imprescriptible. Actions for the reconveyance of property wrongfully registered are of this category.

Facts:
September 1932, Prudencio Limpin sold to Simeon Blas, husband of respondent Maxima Santos Vda. de Blas,
an unregistered fishpond found in Pampanga with the right to repurchase property for one (1) year from date. It was also
explicitly stipulated that failure to repurchase would mean that "the sale is absolute and irrevocable." Blas eventually
took possession until 1937, when he died. His widow, respondent Maxima Vda. de Blas, took over the possession. In
1940, Simeon's estate proceedings awarded the fishpond and other properties to Maxima.
Despite the conveyance to Maxima, Limpin and his wife, petitioner Juliana Caladiao, was able to register
the fishpond in their name on 1934. When Limpin died, a TCT was issued in favor of Caladiao.
Unaware of the actions of Limpin, respondent Maxima applied for registration of the fishpond in 1952. Her
application was opposed by the petitioners, but the court decided in favor of Maxima and deemed Blas as absolute
owner, because of Limpin's failure to repurchase.
On August 1954, the court ordered the LRA to issue a decree in favor of Vda. de Blas, but the
Commissioner refused on the ground that a previous title has already been issued to petitioner. Maxima's
application was denied, and she filed a case against Caladiao. The trial court sided with Vda. de Blas, and the CA
affirmed the trial court's decision. Hence this case.
NOTE: Maxima Santos Vda. de Blas died pending the trial, and she was replaced as respondent by her administratix
Rosalinda Santos.
Issues:
1. W/N Blas and his wife are the absolute owners of the lot, and that Limpin and Caladiao's registration of the
property made them mere trustees of respondent Vda. de Blas.
Held/Ratio:
1. YES and YES. It is undeniable that Limpin sold the fishpond to Blas under pacto de retro, and that Limpin failed
to repurchase the property within one (1) year from date of sale. Since Limpin knew these terms, his subsequent
registration was done fraudulently and in bad faith. Thus Caladiao may be compelled to respect such sale and
reconvey the property to its rightful owner, Vda. de Blas.
The existence of a decree in Caladiao's favor is not a bar to an action to compel reconveyance. Their
registration did not annul the conveyance in favor of Vda. de Blas. The Limpins held the property in trust for
the true owners.
Appellants also argue that action for reconveyance has prescribed, because it has been 20 years since Limpin
obtained a certificate of title in their name. This contention has no merit, because the law states that no
prescription applies in continuing and subsisting trusts. Therefore the true owners, Vda. de Blas and family,
can file actions against their trustee, Caladiao, at anytime because such action is imprescriptible.

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Gerona v. Carmen de Guzman (1964) (reconveyance of a parcel of land by other legitimate heirs)
Doctrines:

Facts:

An action for reconveyance of real property based upon a constructive or implied trust, resulting from fraud, may
be barred by the statute of limitations (Candelaria v. Romero, L-12149, September 30, 1960; Alzona v. Capunita,
L-10220, February 28, 1962).
Registration in the Register of Deeds constitute as a constructive notice to the world.

The case involves a parcel of land of the deceased Marcelo de Guzman. Marcelo de Guzman was married twice.
In his first marriage he had a daughter, Placida de Guzman-Gerona, deceased mother of petitioners. Respondent Carmen
de Guzman et al. are Marcelos children in his second marriage. All parties are legitimate heirs of Marcelo.
After Marcelos death, respondents fraudulently divided among themselves the parcel of land. Through an extrajudicial settlement, respondents applied in court for the subdivision of Marcelos estate to the exclusion of herein
petitioners. Respondents successfully obtained from the Register of Deeds a TCT of the property in their respective names
on June 25, 1948.
Petitioners filed an action in court on September 4, 1958 seeking to nullify the extra-judicial settlement of the
property and reconveyance of their respective share to the land. The CFI as affirmed by the Appellate court ruled in favor
of respondents finding that petitioners cause of action has already prescribed.
Petitioners maintain that since they and respondents are co-heirs of the deceased Marcelo de Guzman, the present
action for partition of the latter's estate is not subject to the statute of limitations of action; that, if affected by said statute,
the period of four (4) years therein prescribed did not begin to run until actual discovery of the fraud perpetrated by
respondents, which, it is claimed, took place in 1956 or 1957; and that accordingly, said period had not expired when the
present action was commenced on November 4, 1958.
Issues:
1. W/N the Statute of Limitations apply to the case
2. W/N the action of petitioners have prescribed
Held/Ratio:
1. YES. Although, as a general rule, an action for partition among co-heirs does not prescribe, this is true only as
long as the defendants do not hold the property in question under an adverse title (Cordova vs. Cordova, L-9936,
January 14, 1948). The statute of limitations operates as in other cases, from the moment such adverse title is
asserted by the possessor of the property (Ramos vs. Ramos, 45 Phil. 362; Bargayo v. Camumot, 40 Phil. 857;
Castro v. Echarri, 20 Phil. 23). When respondents executed the aforementioned deed of extra-judicial settlement
stating therein that they are the sole heirs of the late Marcelo de Guzman, and secured new transfer certificates of
title in their own name, they thereby excluded the petitioners from the estate of the deceased, and, consequently,
set up a title adverse to them. And this is why petitioners have brought this action for the annulment of said deed
upon the ground that the same is tainted with fraud. It is already settled in this jurisdiction that an action for
reconveyance of real property based upon a constructive or implied trust, resulting from fraud, may be barred by
the statute of limitations (Candelaria v. Romero, L-12149, September 30, 1960; Alzona v. Capunita, L-10220,
February 28, 1962).
2. YES, although the action may be filed within four (4) years from the discovery of the fraud, such discovery is
deemed to have taken place, in the case at bar, on June 25, 1948, when said instrument was filed with the Register
of Deeds and new certificates of title were issued in the name of respondents exclusively, for the registration of
the deed of extra-judicial settlement constitute constructive notice to the whole world (Diaz v. Gorricho, L11229, March 29, 1958; Avecilla v. Yatco, L-11578, May 14, 1958; J.M. Tuason & Co., Inc. v. Magdangal, L15539, January 30, 1962; Lopez v. Gonzaga, L-18788, January 31, 1964).

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Carantes vs. CA (1977) (Lot 44-A, Loakan Airport, assignment of inheritance, prescribed)
Doctrines:

Constructive notice is applicable in cases of constructive trusts, as borne out by the decisions in Lopez and
Gerona, In any event, it is now settled that an action for reconveyance based on implied or constructive trust
is prescriptible; it prescribes in 10 years.
There is a clear repudiation of a trust where on who is an apparent administrator of property causes the
cancellation of the title thereto in the name of the apparent beneficiaries and gets a new certificate of title in
his own name

Facts:
Mateo Carantes was the original owner of Lot No. 44 in Loakan, Baguio City. This is evidenced by OCT issued in
his name by virtue of a Free Patent. In 1913, Carantes died and was survived by his widow and 6 children (Bilad, Lauro,
Crispino, Maximino, Apung, and Sianang).
In 1930, construction of the Loakan Airport was commenced by the Government. A portion of Lot No. 44 was
needed for the landing field, the Government instituted proceedings for its expropriation. Lot No. 44 was subdivided into
five. Lots Nos. 44-A to 44-E.
In 1933, Special Proceedings were filed for the settlement of the estate of the late Mateo Cerantes. One of his
sons, Maximino (the petitioner), was appointed as judicial administrator of the estate. He filed a project of partition for
himself and his siblings or the latters surviving children. Negotiations were under way for the purchase by the
Government of Lots Nos. 44-B and 44-C for the purpose of widening the Loakan Airport, the only property listed by
Maximino in the project for partition was the remaining portion of Lot No. 44.
In 1939, a deed denominated Assignment of Right to Inheritance was executed by 4 of Mateo Carantes children
(Bilad, Sianang, Lauro, and Crispino, and the heirs of Apung) assigning to Maximino their rights to inheritance in Lot No.
44. The stated monetary consideration for the assignment was 1 peso. However, the document states that by agreement of
all the direct heirs of Mateo Carantes, as expressed and conveyed verbally by him during his lifetime, rightly and
exclusively belong to particular heir, Maximino, now and in the past in the exclusive, continuous, peaceful, and notorious
possession for more than 10 years. Maximino sold Lots Nos. 44-B and 44-C and divided the proceeds among himself and
other heirs.
OCT of Mateo was cancelled and replaced by TCT in the joint names of the 5 children and children of Apung
(representing their deceased father) as co-owners pro indiviso, 1/6 share per child.
Subsequently in 1940, Maximino registered the deed of Assignment of Right to Inheritance. So, the TCT in the
joint names of the siblings WAS CANCELLED and a NEW TCT was issued in the name of Maximino ALONE. Acting
as exclusive owner of the land, he executed a formal deed of sale in favor of the Government over Lots Nos. 44-B and 44C. (CLEAR REPUDIATION OF TRUST)
In 1947, pursuant to the deed of sale executed by Maximino in favor of the Government, T.C.T. of Maximino was
cancelled, and in lieu thereof a new TCT, covering Lots Nos. 44-A, 44-B arid 44-C, was issued in the name of the
Government, while another TCT, covering the remaining Lots Nos. 44-D and 44-E was issued in the name of Maximino,
who has up to the present remained the registered owner of said lots.
In 1958, his siblings filed a complaint. They contend that they only executed the deed of Assignment of Right to
Inheritance in 1939 only because they were made to believe that it merely authorized the defendant Maximino to convey
portions of Lot No. 44 to the Government in their behalf to minimize expenses and facilitate the transaction.
Issues:
1. W/N a trust was established? What kind of trust?

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Held/Ratio:
1. YES. Definitely, no express trust was created in favor of the respondents. If there was trust, it could only be a
constructive trust which is imposed by law. In constructive trusts, there is neither promise nor fiduciary relations;
the so-called trustee DOES NOT recognize any trust and has no intent to hold the property for the beneficiary.
COURT related to two cases:
a. Lopez vs. Gonzaga: The recording of the judicial orders sufficed as notice to the other heirs, for the rule
is that knowledge of what might have been revealed by proper inquiry is imputable to the inquirer.
b. Gerona vs. de Guzman: petitioners and the private respondents were co-heirs, and the petitioners'
action for partition and reconveyance was based upon a constructive trust resulting from fraud. This Court
held that the discovery of the fraud "is deemed to have taken place, in the case at bar, on June 25, 1948,
when said instrument was filed with the Register of Deeds and new certificates of title were issued in the
name of respondents exclusively, for the registration of the deed of extra-judicial settlement constituted
constructive notice to the whole world."
It is now settled that an action for reconveyance based on implied or constructive trust is prescriptable - it
prescribes in ten years. In this case the ten-year prescriptive period began on March 16, 1940, when the petitioner
registered the deed of "Assignment of Right to Inheritance" and secured the cancellation of the certificate of title
in the joint names of the heirs of Mateo Carantes, and, in lieu thereof, the issuance of a new title exclusively in his
name.
Since the present action was commenced only on September 4, 1958, it is clear that the same is barred by
extinctive prescription. No continuing and subsisting trust.

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Armamento vs. Guerrero (1980) (Land Dispute, Implied trust, Remanded)

Doctrines:

If a person obtains legal title to property by fraud or concealment, courts of equity will impress upon the title a socalled constructive trust in favor of the defrauded party.
A court of equity which has taken jurisdiction and cognizance of a cause for any purpose will ordinarily retain
jurisdiction for all purposes.

Facts:
Armamento initiated a court action in the CFI of Cotabato seeking for the reconveyance of a certain land which is
covered by an O.C.T. issued by the RD pursuant to a Free Patent granted in July 1961. Armamento claims that this was
acquired through fraud and misrepresentation. The court sustained the defense of Guerrero that the plaintiff has no cause
of action against defendant; that if the action is to be based on fraud, the action has prescribed; and that if the action is for
cancellation of title, plaintiff has no personality to bring the action, the proper party to institute the same being the
Republic of the Philippines.
Thus this appeal to SC. Armamento then prayed that the Court order the defendant to reconvey the disputed
lot to him, or if reconveyance is improper that the lot be declared in trust for the benefit of the Republic of the
Philippines, and for him, who is clearly entitled thereto.
It was seen that the disputed land was the subject of two Patent Applications. Defendant filed his Free
Patent Application on August 1958. Plaintiff filed his Homestead Patent Application approximately one year later or on
July 1959. Defendant was issued Free Patent July 1961 and Original Certificate of Title on February 1962. Plaintiff's
Homestead Application was approved on January 1964. The present suit was instituted on January 27, 1967.
Notwithstanding all the facts above, Armamento claimed that under Art. 1456 of the NCC: 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.
Issues:
1. W/N should the court grant reconveyance of the property to Armamento
Held/Ratio:
1. NO DECISION. The court remanded the case back to the CFI. The court decided that to satisfy the demands of
justice, the doctrine of implied trust may be made to operate in plaintiff's favor, assuming that he can
prove his allegation that defendant had acquired legal title by fraud. Therefore, the plaintiff's action for
reconveyance may not be said to have prescribed, for, basing the present action on implied trust, the
prescriptive period is ten years. The title was obtained by defendant on February 1962. Plaintiff commenced this
suit for reconveyance on January 1967. And if plaintiff's cause of action is based on fraud, which should
ordinarily be brought within four years from the discovery of the fraud, deemed to have taken place when
the certificate of title was issued, it need only be recalled that the conflicting rights of the parties were already
pending investigation before District Land Office of General Santos, Cotabato, even before plaintiff instituted
the present suit for reconveyance.

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