Morales v.
CA and Ranulfo and Erlinda Ortiz of his other sister, Priscila) constructed a beauty shop on the
G.R. No. 117228
June 19, 1997
Art. 1440: Definition and Essential Characteristic of Trust
Aira Marie M. Andal
FACTS:
The land (318 square meters, located at corner Umbria St. and
Rosales Blvd. Brgy. Central, Calbayog City) and the two-storey
building in question are originally owned by spouses Rosendo
Avelino and Juana Ricaforte. Through their son, Celso Avelino, and
through an Escritura de Venta, the spouses bought the premises from
the Mendiolas on July 8, 1948 and occupied it as owners until they
died. There is now a dispute on who rightfully owns the premises, as
Morales and Ortiz each gave their own version of what occurred.
Ranulfo and Erlinda Ortiz claim that they are the absolute and
exclusive owners of the premises in question 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
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.
On the other hand, Rodolfo Morales contends that his
grandparents Rosendo Avelino and Juana Ricaforte originally owned
the premises in question. Rosendo owned the money for the purchase
of the property and he requested Celso to buy the property allegedly
in trust for Rosendo. The land was bought and named under Celso
because he is the only son. Rosendo supposedly informed his other
children about this arrangement. Thus, Celso is a mere trustee under
an implied trust. When Rosendo and Juana died, their children:
Trinidad A. Cruz, Concepcion A. Peralta, Priscila A. Morales, and
Aurea Avelino (who died single) succeeded as owners thereof;
except Celso Avelino who did not reside in the premises because he
was out of Calbayog for more than 30 years until his death in Cebu
City. Thus, the heirs of Rosende’s other children are the rightful co-
owners of the land.
Ortiz filed an action for recovery of possession of land and
damages with a prayer for a writ of preliminary mandatory
injunction against Morales. Ortiz prayed that he be declared the
rightful owner, that Morales be ordered to remove all improvements
he constructed thereon and vacate the premises, and that Morales pay
actual and
moral damages, litigation expenses, attorney’s fees, and costs of the
suit. The RTC ruled in favor of Ortiz. It held that: (1) Celso’s
ownership was not contested by the other heirs; (2) Priscila’s claim
that Celso is a mere trustee is untenable because for implied trust to
exist there must be evidence of an equitable obligation of the trustee
to convey, which circumstance or requisite is absent in this case; (3)
What is clear from the evidence is Celso Avelino’s absolute
ownership of the disputed property, both as to the land and the
residential house which was sold to the Ortiz spouses; and (4)
Morales’s self-serving and unconvincing testimony of co- ownership
is not supported by any piece of credible documentary evidence.
The CA affirmed the RTC’s decision. Thus, this petition.
ISSUES:
1. W/N Celso Avelino acquired the property as a mere trustee
HELD/RATIO:
1. NO, Celso Avelino is the absolute and exclusive owner of
the land.
(Sorry, so many doctrines. This case is CLV’s favorite I think
because he mentioned this multiple times in the book. In my
considered opinion, this is one of the most important cases we have
to read because it lays down the general characteristics of trusts!!!)
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: (1) it is a
relationship; (2) it is a relationship of fiduciary character; (3) it is a
relationship with respect to property, not one involving merely
personal duties; (4) it involves the existence of equitable duties
imposed upon the holder of the title to the property to deal with it for
the benefit of another; and (5) it arises as a result of a manifestation
of intention to create the relationship.
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 is 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.) 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 with extreme caution.
In the present case, Morales’s theory is that Rosendo Avelino
owned the money for the purchase of the property and he requested
Celso, his only son, to buy the property allegedly in trust for
Rosendo. The fact remains, however, that title to the property was
conveyed to Celso. Accordingly, the situation is governed or falls
within the exception under the third sentence of Art. 1448. On this
basis alone, Rodolfo and Priscila Morales' claim must fail. Rodolfo
and Priscila relied merely on testimonial evidences which are self-
serving. The theory of implied trust with Celso Avelino as the trustor
and his parents Rosendo Avelino and Juan Ricaforte as trustees is not
even alleged, expressly or impliedly, in the verified Answer of
Rodolfo Morales, nor in the Answer in Intervention of Priscila A.
Morales.
On the other hand, proof of Ranulfo and Erlinda Ortiz's lawful
acquisition of the property through Celso Avelino’s ownership 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. Neither is
there any evidence that during his lifetime Rosendo demanded from
Celso that the latter convey the land to the former, which Rosendo
could have done after Juana’s death. This omission was mute and
eloquent proof of Rosendo’s recognition that Celso was the real
buyer of the property in 1948 and the absolute and exclusive owner
thereof.
Moreover, assuming 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.
WHEREFORE, except as to the award of moral damages, attorney’s
fees and litigation expenses which are DELETED, the judgment of
the respondent Court of Appeals is AFFIRMED.
03. RAMOS V. RAMOS
61 SCRA 284 (1974)
(K Manipon)
FACTS: Spouses Martin Ramos and Candida Tanate died in
October 4, 1906 and October 26, 1880, respectively. They were
survived by their 3 children. Moreover, Martin was survived by his 7
natural children. In December 1906, a special proceeding for the
settlement of the intestate estate of said spouses was conducted.
Eventually, a partition project was submitted which was signed by
the 3 legitimate children and 2 of the 7 natural children. A certain
Timoteo Zayco signed in representation of the other 5 natural
children who were minors.
The conjugal hereditary estate was appraised at P74,984.93,
consisting of 18 parcels of land, some head of cattle and the
advances to the legitimate children. 1⁄2 thereof represented the estate
of Martin. 1/3 thereof was the free portion or P12,497.98. The shares
of the 7 natural children were to be taken from that 1/3 free portion
in accordance with the Old Civil code. Judge Richard Campbell, in
his “decision” dated April 28, 1913, approved the project of
partition.
However, the manifestation was not in strict conformity with the
terms of the judge’s order and with the partition project itself. 8 lots
of the Himamaylan Cadastre were registered in equal shares in the
names of Gregoria (widow of Jose Ramos) and her daughter, when
infact the administrator was supposed to pay the cash adjudications
to each of them as enshrined in the partition project. Plaintiffs were
then constrained to bring the suit before the court seeking for the
reconveyance in their favor their corresponding participations in said
parcels of land in accordance with Article 840 of the old Civil Code.
Note that 1/6 of the subject lots represents the 1/3 free portion of
martin’s shares which will eventually redound to the shares of his 7
legally acknowledged natural children. The petitioners’ action was
predicated on the theory that their shares were merely held in trust by
defendants. Nonetheless, no Deed of Trust was alleged and proven.
Ultimately, the lower court dismissed the complaint on the grounds
of res judicata, prescription and laches.
ISSUE: Whether or not the plaintiffs’ action was barred by
prescription, laches and res judicata. YES.
RULING:
The court made a brief digression on the nature of trusts which will
determine the availability of prescription and laches to bar the action
for reconveyance of property allegedly held in trust.
It is said that trust is the right, enforceable solely in equity to the
beneficial enjoyment of property, the legal title to which is vested in
another. It may either be express or implied. It is further subdivided
into resulting and constructive trusts. The main difference is that in a
constructive trust, there is no fiduciary relation. There is really no
intention to place the title in someone else’s name. It just happens by
mistake, fraud that there becomes an implied trust recognized by
law.
There is a rule that a trustee cannot acquire by prescription the
ownership of property entrusted to him which applies squarely to
express trusts. The basis of the rule is that the possession of a trustee
is not adverse. This rule may possibly apply to resulting trusts as
long as the trustee has not repudiated the trust. But when there is no
need to repudiate such as in the case of a constructive trust where
there is no fiduciary relation, prescription may supervene.
Applying it now to the case at bar, the plaintiffs did not prove any
express trust. Neither did they specify the kind of implied trust
contemplated in their action. However, whether the trust is resulting
or constructive, its enforcement may be barred by laches.
The action was filed forty years after it accrued. The delay was
inexcusable. In connection with the res judicata aspect of the case, it
may be clarified that in the settlement of a decedent’s estate it is not
required for the heirs to sign a partition agreement. It is the judicial
decree of distribution, once final, that vests title in the distributees
(which in this case was Judge Campbell’s decision) which bars
litigation regarding the same estate.