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SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; ACTIONS; CONDITION
PRECEDENT TO FILING OF SUIT BETWEEN MEMBERS OF THE SAME
FAMILY; EFFECT OF FAILURE TO COMPLY WITH CONDITION.
Admittedly, the present action is between members of the same
family since petitioner Emilia O'Laco and respondent O Lay Kia are
half-sisters. Consequently, there should be an averment in the
compliant that earnest efforts toward a compromise have been
made, pursuant to Art. 222 of the New Civil Code, or a motion to
dismiss could have been filed under Sec. 1, par. (j), Rule 16 of the
Rules of Court. For, it is well-settled that the attempt to
compromise as well as the inability to succeed is a condition
precedent to the filing of a suit between members of the same
family. Hence, the defect in the complaint is assailable at any stage
of the proceedings, even on appeal, for lack of cause of action.
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.
DECISION
BELLOSILLO, J p:
History is replete with cases of erstwhile close family relations put
asunder by property disputes. This is one of them. It involves halfsisters each claiming ownership over a parcel of land. While
petitioner Emilia O'Laco asserts that she merely left the certificate
of title covering the property with private respondent O Lay Kia for
safekeeping, the latter who is the former's older sister insists that
the title was in her possession because she and her husband
bought the property from their conjugal funds. To be resolved
therefore is the issue of whether a resulting trust was intended by
them in the acquisition of the property. The trial court declared that
there was no trust relation of any sort between the sisters. 1 The
Court of Appeals ruled otherwise. 2 Hence, the instant petition for
review on certiorari of the decision of the appellate court together
with its resolution denying reconsideration. 3
It appears that on 31 May 1943, the Philippine Sugar Estate
Development Company, Ltd., sold a parcel of land, Lot No. 5, Block
No. 10, Plan Psu-10038, situated at Oroquieta St., Sta. Cruz, Manila,
with the Deed of Absolute Sale naming Emilia O'Laco as vendee;
thereafter, Transfer Certificate of Title No. 66456 was issued in her
name.
On 17 May 1960, private respondent-spouses Valentin Co Cho Chit
and O Lay Wa learned from the newspapers that Emilia O'Laco sold
the same property to the Roman Catholic Archbishop of Manila for
P230,000.00, with assumption of the real estate mortgage
constituted thereon. 4
corresponding
title
with
respondent-spouses
merely
for
safekeeping; that when she asked for the return of the documents
evidencing her ownership, respondent-spouses told her that these
were misplaced or lost; and, that in view of the loss, she filed a
petition for issuance of a new title, and on 18 August 1944 the then
Court of First Instance of Manila granted her petition.
On 20 September 1976, finding no trust relation between the
parties, the trial court dismissed the complaint together with the
counterclaim. Petitioners and respondents appealed.
On 9 April 1981, the Court of Appeals set aside the decision of the
trial court thus
". . . We set aside the decision of the lower court dated September
20, 1976 and the order of January 5, 1977 and another one is
hereby entered ordering the defendants-appellees to pay plaintiffsappellants jointly and severally the sum of P230,000.00
representing the value of the property subject of the sale with
assumption of mortgage to the Roman Catholic Archbishop of
Manila with legal interest from the filing of the complaint until fully
paid, the sum of P10,000.00 as attorney's fees, plus costs."
learned that Emilia was getting married to Hugo, O Lay Kia asked
her to have the title to the property already transferred to her and
her husband Valentin, and Emilia assured her that "would be
arranged (maaayos na)" after her wedding. 36 Her answer was an
express recognition of the trust, otherwise, she would have refused
the request outright. Petitioners never objected to this evidence;
nor did they attempt to controvert it.
Fifth. The trial court itself determined that "Valentin Co Cho Chit
and O Lay Kia had some money with which they could buy the
property." 37 In fact, Valentin was the Chief Mechanic of the
Paniqui Sugar Mills, was engaged in the buy and sell business,
operated a gasoline station, and owned an auto supply store as
well as a ten-door apartment in Caloocan City. 38 In contrast,
Emilia O'Laco failed to convince the Court that she was financially
capable of purchasing the Oroquieta property. In fact, she opened a
bank account only in 1946 and likewise began filing income tax
returns that same year, 39 while the property in question was
bought in 1943. Respondent-spouses even helped Emilia and her
brothers in their expenses and livelihood. Emilia could only give a
vague account on how she raised the money for the purchase of
the property. Her narration of the transaction of sale abounds with
"I don't know" and "I don't remember." 40
After all, so long as the trustee recognizes the trust, the beneficiary
may rely upon the recognition, and ordinarily will not be in fault for
omitting to bring an action to enforce his rights. 44 There is no
running of the prescriptive period if the trustee expressly
recognizes the resulting trust. 45 Since the complaint for breach of
trust was filed by respondent-spouses two (2) months after
acquiring knowledge of the sale, the action therefore has not yet
prescribed.
WHEREFORE, the Petition for Review on Certiorari is DENIED. The
Decision of the Court of Appeals of 9 April 1981, which reversed
the trial court, is AFFIRMED. Costs against petitioners.
SO ORDERED.
NOCON, J.:
Petitioner seeks in this petition the reversal of the Court of Appeals'
decision dated May 15, 1992 in CA-G.R. CV No. 29982 affirming the
unfavorable decision of the trial court 1 in his suit for replevin and
damages.
Petitioner relies principally on the fact that the Isuzu Elf van is
registered in his name under Certificate of Registration No.
1501909. He claims in his testimony before the trial court that the
said vehicle was purchased from Balintawak Isuzu Motor Center for
a price of over P100,000.00; that he sent his brother to pay for the
van and the receipt for payment was placed in his (petitioner's)
name because it was his money that was used to pay for the
vehicle; that he allowed his brother to use the van because the
latter was working for his company, the CLT Industries; and that his
brother later refused to return the van to him and appropriated the
same for himself.
Tan Pit Sin who had known private respondent since 1968, not only
because they were classmates but also because of their business
dealings with each other, confirmed that private respondent
borrowed from him P140,000.00 in March, 1987 to buy an Isuzu Elf
van. In fact, he had borrowed said vehicle for a few times.
After hearing, the trial court found for private respondent. The
dispositive portion of the decision reads as follows:
On the other hand, private respondent testified that CLT Industries
is a family business that was placed in petitioner's name because
at that time he was then leaving for the United States and
petitioner is the remaining Filipino in the family residing in the
Philippines. When the family business needed a vehicle in 1987 for
use in the delivery of machinery to its customers, he asked
In concluding that the testimonies of Tan Ban Yong, Tan Pit Sin and
Gina Lu cast doubt on the petitioner's ownership of the motor
vehicle in question, both the trial court and the Court of Appeals
attached significance to their respective interlocking accounts on
how the motor vehicle was acquired, complete with the financing
source and mode of repayment. Respondent Tan Ban Yong's
declaration that he borrowed P140,000.00 from Tan Pit Sin and paid
the balance of the purchase price of the motor vehicle himself to
Gina Lu of the Balintawak Isuzu Motors, is corroborated by the
above-mentioned persons themselves. Tan Pit Sin not only
confirmed the loan but also stated that the same was paid in three
(3) months; P50,000.00 on the first payment; another P50,000.00
on the second payment and P40,000.00 on the last payment. 4
Gina Lu, who testified at the instance of petitioner, declared that
the downpayment of P5,000.00 was paid by petitioner and so the
receipt for the same was issued in his name but the balance of
P133,000.00 was paid by private respondent and to make the
record consistent, she issued the receipt in the name of petitioner
again.
The New Civil Code recognizes cases of implied trust other than
those enumerated therein. 9 Thus, although no specific provision
could be cited to apply to the parties herein, it is undeniable that
an implied trust was created when the certificate of registration of
the motor vehicle was placed in the name of the petitioner
although the price thereof was not paid by him but by private
respondent. The principle that a trustee who puts a certificate of
registration in his name cannot repudiate the trust by relying on
the registration is one of the well-known limitations upon a title. A
trust, which derives its strength from the confidence one reposes
on another especially between brothers, does not lose that
character simply because of what appears in a legal document.
If that had been the case in this jurisdiction, then the trial judge
would have discovered right away at the preliminary hearing that
private respondent should have immediately staked his claim of
ownership and that would have created serious doubts about
petitioner's claim of ownership. Most likely, the writ would not have
been issued and the complaint would have been dismissed motu
proprio by the trial court upon the discovery that the petitioner did
not have a principal case therein. As it is, the complaint proceeded
its course to the detriment of private respondent.
Maximo Juanico died on May 21, 1942, survived by his wife, the
aforenamed Rosa Gegato, and three (3) minor children:
Presentacion, Resurreccion, and Catalina. 3
The other co-owner, Matilde Geolingo, and her husband, Dionisio
Mongcal, also died; and their only child, Loreto Mongcal, executed
an affidavit adjudicating to herself, as sole heir, her mother's onehalf (1/2) share in Lot 818. 4 That share she sold on December 14,
1951 to Rosa Gicano. In virtue thereof, TCT No. 30009 of the
original co-owners was cancelled and a new one, TCT No. 8878,
was issued in the names of (1) Maximo Juanico, married to Rosa
Gegato (1/2 share) and (2) Rosa Gicano, married to Gorgonio
Geollegue (1/2 share). 5
NARVASA, J.:
An action to recover an immovable from a defendant allegedly
holding it under a constructive trust prescribes in ten (10) years,
counted from the issuance of title to said defendant: so we have
ruled in a number of cases; 1 and so We rule in this case.
But the action instituted by the plaintiffs Rosa Gegato, et al. was
not one to declare the deed of sale of August 23, 1952 void ab
initio, for lack of cause or object in accordance with Article 1409 of
the Civil Code, which is really imprescriptible, but to annul it on
account of fraud, on the theory of constructive trust, which
prescribes in ten (10) years. In the case at bar, Rosa Gegato and
her minor children by her deceased husband, Maximo Juanico (said
children being represented by their judicial guardian, Ramundo
Pundon) had executed a deed of sale and acknowledged it before a
notary public which, upon its face, transferred the entirety of
Feb. 28, 1958; 32 SCRA 529; Sinaon v. Sorongan, 136 SCRA 408);
and it may do so on the basis of a motion to dismiss, 15 or an
answer which sets up such ground as an affirmative defense; 16 or
even if the ground is alleged after judgment on the merits, as in a
motion for reconsideration; 17 or even if the defense has not been
asserted at all, as where no statement thereof is found in the
pleadings, 18 or where a defendant has been declared in default. 19
What is essential only, to repeat, is that the facts demonstrating
the lapse of the prescriptive period, be otherwise sufficiently and
satisfactorily apparent on the record: either in the averments of the
plaintiffs complaint, or otherwise established by the evidence.
WHEREFORE, the Decision of the Court of Appeals promulgated on
May 26, 1982 is REVERSED, and the Order of the Trial Court dated
October 29, 1976 dismissing the action for reconveyance and
damages instituted by respondents Rosa Gegato, et al. on the
ground of prescription is REINSTATED and AFFIRMED as being in
accord with the relevant facts and the law. Costs against
respondents.