G.R. No.
144773 May 16, 2005 Meanwhile, herein respondents, along with other persons claiming to be descendants of the eight
AZNAR BROTHERS REALTY COMPANY, petitioner, vs.
LAURENCIO AYING, IN HIS OWN BEHALF AND IN BEHALF OF THE OTHER HEIRS OF
EMILIANO AYING, PAULINO AYING, IN HIS OWN BEHALF AND IN BEHALF OF THE OTHER
HEIRS OF SIMEON AYING, AND WENCESLAO SUMALINOG, IN HIS OWN BEHALF AND IN
BEHALF OF THE OTHER HEIRS OF ROBERTA AYING, respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
This resolves the petition for review on certiorari seeking the modification of the Decision1 of the
Court of Appeals (CA) dated March 7, 2000 which affirmed with modification the Decision of the
Regional Trial Court (RTC) of Lapu-Lapu City, Branch 27 in Civil Case No. 2930-L; and the
Resolution dated August 2, 2000 denying petitioner’s motion for reconsideration of the
aforementioned decision.
The antecedent facts are as follows:
The disputed property is Lot No. 4399 with an area of 34,325 square meters located at Dapdap,
Lapu-Lapu City. Crisanta Maloloy-on petitioned for the issuance of a cadastral decree in her favor
over said parcel of land. After her death in 1930, the Cadastral Court issued a Decision directing
the issuance of a decree in the name of Crisanta Maloloy-on’s eight children, namely: Juan,
Celedonio, Emiliano, Francisco, Simeon, Bernabe, Roberta and Fausta, all surnamed Aying. The
certificate of title was, however, lost during the war.
Subsequently, all the heirs of the Aying siblings executed an Extra-Judicial Partition of Real Estate
with Deed of Absolute Sale dated March 3, 1964, conveying the subject parcel of land to herein
petitioner Aznar Brothers Realty Company. Said deed was registered with the Register of Deeds
of Lapu-Lapu City on March 6, 1964 under Act No. 3344 (the law governing registration for
unregistered land), and since then, petitioner had been religiously paying real property taxes on
said property.
In 1988, herein petitioner filed a Petition for Reconstitution of the Original Title as the original title
over the subject property had been lost during the war. On April 12, 1988, the court granted said
petition, thereby directing the Register of Deeds of Lapu-Lapu City to issue a reconstituted title in
the name of the abovementioned Aying siblings. Thus, Original Certificate of Title (OCT) No. RO-
2856 was issued.
In 1991, petitioner, claiming to be the rightful owner of the subject property, sent out notices to
vacate, addressed to persons occupying the property. Unheeded, petitioner then filed a complaint
for ejectment against the occupants before the Metropolitan Trial Court (MTC), Lapu-Lapu City.
On February 1, 1994, the MTC ordered the occupants to vacate the property. The case eventually
reached this Court, docketed as G.R. No. 128102, entitled Aznar Brothers Realty Company vs.
Court of Appeals, Luis Aying, Demetrio Sida, Felomino Augusto, Federico Abing, and Romeo
Augusto.2 On March 7, 2000, a Decision was promulgated in favor of herein petitioner, declaring it
as the rightful possessor of the parcel of land in question.
Aying siblings, all in all numbering around 220 persons, had filed a complaint for cancellation of
the Extra-Judicial Partition with Absolute Sale, recovery of ownership, injunction and damages
with the RTC of Lapu-Lapu City. The complaint was dismissed twice without prejudice. Said
complaint was re-filed on August 19, 1993, docketed as Civil Case No. 2930-L.
In their amended complaint, herein respondents (plaintiffs before the RTC) alleged that: they are
co-owners of subject property, being descendants of the registered owners thereof under OCT No.
RO-2856; they had been in actual, peaceful, physical, open, adverse, continuous and
uninterrupted possession in concept of owner of subject parcel of land since time immemorial;
their possession was disturbed only in the last quarter of 1991 when some of them received
notices to vacate from petitioner and several weeks thereafter, earthmoving equipment entered
the disputed land, bulldozing the same and destroying plants, trees and concrete monuments
("mohon"); respondents discovered that such activities were being undertaken by petitioner
together with Sta. Lucia Realty and Development, Inc.; petitioner claimed to be the owner of
subject property by virtue of an extra-judicial partition of real estate with deed of absolute sale
executed in petitioner’s favor by the alleged heirs of Crisanta Maloloy-on; the aforementioned
extra-judicial partition of real estate with deed of absolute sale is a fraud and is null and void ab
initio because not all the co-owners of subject property affixed their signature on said document
and some of the co-owners who supposedly signed said document had been dead at the time of
the execution thereof; petitioner entered subject land in bad faith, knowing fully well that it did not
have any right to the land and used force, threat and intimidation against respondents; and they
suffered moral damages.3
Petitioner (defendant before the RTC) filed its Answer, denying that respondents are the lawful
owners of subject parcel of land by virtue of their being descendants or heirs of the registered
owners of subject property. Instead, petitioner alleged that it had been in actual possession of
subject land as owner thereof by virtue of the extra-judicial partition of real property and deed of
absolute sale executed in its favor; that in fact, it had been paying taxes thereon religiously; that it
tolerated about 6 persons to live on said land but said persons were eventually ejected by court
order. Petitioner then raised the affirmative defenses of failure to state cause of action and
prescription, as it took respondents 27 years, 10 months and 27 days to file the action to recover
subject property, when an action to recover property based on an implied trust should be instituted
within 4 years from discovery of the fraud.4
In the Pre-Trial Order dated January 30, 1995 of the RTC, the issues were narrowed down to the
following:
1. Whether or not the plaintiffs [herein respondents] are the heirs of the registered owners
of Lot No. 4399.
2. Whether or not plaintiffs are the owners of Lot No. 4399.
3. Whether or not the defendant Aznar [herein petitioner] is estopped to make any claim
on Lot No. 4399.
4. Whether or not the defendant Aznar is a builder in bad faith.
5. Whether or not the defendants are liable for damages and attorney’s fees in favor of
the plaintiffs.
6. Whether or not the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale is
valid and had, in effect, validly conveyed to defendant Aznar Lot No. 4399.
7. Whether or not the plaintiffs’ action has prescribed.5
1
After trial, the RTC rendered a Decision dated July 4, 1997, ruling that respondents’ evidence
failed to prove that the extra-judicial partition with deed of absolute sale was a totally simulated or
fictitious contract and concluded that said document is valid, thus, effectively conveying to
petitioner the property in question. It further held that respondents’ action had prescribed in that
the action is considered as one for reconveyance based on implied or constructive trust, it
prescribed in 10 years from the registration of the deed on March 6, 1964; and if the action is
considered as one for annulment of contract on the ground of fraud, it should have been filed
within 4 years from discovery of the fraud. The trial court also ruled that respondents failed to
present any admissible proof of filiation, hence, they were not able to prove that they are indeed
heirs of the eight Aying siblings who appear as the registered owners under OCT No. RO-2856.
The dispositive portion of the RTC Decision reads as follows:
WHEREFORE, judgment is hereby rendered dismissing the amended complaint on the
ground of prescription, and declaring the Extra-Judicial Partition of Real Estate with Deed
of Absolute Sale dated March 3, 1964 as valid and binding, adjudging that Lot 4399 with
an area of 34,325 square meters located at Dapdap, Mactan, Lapu-Lapu City had been
validly conveyed to and in favor of Aznar Brothers Realty Company, and directing the
Register of Deeds of Lapu-Lapu City to register the above-mentioned deed in accordance
with law and to cancel Original Certificate of Title No. RO-2856, and to issue a transfer
certificate of title in the name of Aznar Brothers Realty Company upon payment of the
necessary registration fees pursuant thereto.
The Writ of Preliminary Injunction issued in this case is hereby ordered dissolved.
The Motion for Contempt filed by the plaintiffs against defendants is dismissed for want of
factual and legal basis.
Costs against the plaintiffs.
SO ORDERED.6
Herein respondents appealed the foregoing decision to the CA and on March 7, 2000, said court
promulgated its Decision, the dispositive portion of which is reproduced hereunder:
THE FOREGOING CONSIDERED, the contested Decision while AFFIRMED is hereby
MODIFIED. The heirs of Emiliano Aying, Simeon Aying and Roberta Aying are hereby
declared as the lawful owners of the contested property but equivalent only to 3/8.
SO ORDERED.
In modifying the RTC judgment, the CA ratiocinated that "an action for recovery of possession of
registered land never prescribes in view of the provision of Section 44, Act No. 496 (now Sec. 47,
PD 1520), to the effect that no title to registered land in derogation to that of a registered owner
shall be acquired by prescription." The CA further ruled that even if the action is deemed to be
based on implied trust, prescription did not begin to run since there is no evidence that positive
acts of repudiation were made known to the heirs who did not participate in the execution of the
Extra-Judicial Partition of Real Estate with Deed of Absolute Sale. Thus, striking down the RTC’s
ruling that the respondents’ complaint is dismissible on the ground of prescription, the CA held
instead that herein respondents’ action had not prescribed but upheld the validity of the Extra-
Judicial Partition of Real Estate with Deed of Absolute Sale, except as to the shares of the heirs of
Emiliano, Simeon and Roberta, who did not participate in the execution of said document.
Herein petitioner’s motion for reconsideration of the CA decision was denied per Resolution dated
August 2, 2000.
Hence, the present petition for review on certiorari assailing the CA decision on the following
grounds:
I
THE COURT OF APPEALS ERRED IN FAILING TO APPLY THE RULE THAT AN HEIR
OF THE ORIGINAL REGISTERED OWNER MAY LOSE HIS RIGHT TO RECOVER A
TITLED PROPERTY BY REASON OF LACHES;
II
THE COURT OF APPEALS ERRED IN FAILING TO APPLY THE RULE THAT THE ACT
OF REGISTRATION OF THE DEED OF PARTITION WITH SALE MAY BE
CONSIDERED AN UNEQUIVOCAL REPUDIATION OF THE TRUST GIVING RISE TO
PRESCRIPTION;
III
THE COURT OF APPEALS ERRED IN FAILING TO APPLY THE PROVISIONS OF
ARTICLE 1104 OF THE CIVIL CODE TO THE EFFECT THAT IN THE ABSENCE OF
BAD FAITH OR FRAUD, THE PARTITION WITH PRETERITION OF ANY
COMPULSORY HEIR SHALL NOT BE RESCINDED.7
In their Comment, respondents argue that this case is an action to declare as null and void the
Extra-Judicial Partition of Real Estate with Deed of Absolute Sale, hence, under Article 1410 of the
Civil Code, an action for declaration of an inexistent contract does not prescribe. Respondents
further posit that the principle of laches should be applied against petitioner and not against them,
as they (respondents) had been in actual possession of the subject property, while petitioner
merely brought action to eject them more than 29 years after the alleged execution of the Extra-
Judicial Partition of Real Estate with Deed of Absolute Sale. They also refuted petitioner’s
arguments regarding the application of the principles of implied and constructive trusts in this
case.
At the outset, it should be stressed that not all the plaintiffs who filed the amended complaint
before the trial court had been impleaded as respondents in the present petition. The only parties
impleaded are the heirs of Emiliano, Simeon and Roberta Aying, whom the CA adjudged as
owners of a 3/8 portion of the land in dispute for not having participated in the execution of the
Extra-Judicial Partition of Real Estate with Deed of Absolute Sale.
It is significant to note that herein petitioner does not question the CA conclusion that respondents
are heirs of the aforementioned three Aying siblings. Hence, the trial court and appellate court’s
findings that the Extra- Judicial Partition of Real Estate with Deed of Absolute Sale was not forged
nor simulated and that the heirs of Emiliano, Simeon and Roberta Aying did not participate in the
execution thereof, are now beyond cavil.
2
The issues raised by petitioner for the Court’s resolution are (1) whether or not respondents’ cause
of action is imprescriptible; and (2) if their right to bring action is indeed imprescriptible, may the
principle of laches apply.
Respondents alleged in their amended complaint that not all the co-owners of the land in question
signed or executed the document conveying ownership thereof to petitioner and made the
conclusion that said document is null and void. We agree with the ruling of the RTC and the CA
that the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale is valid and binding only
as to the heirs who participated in the execution thereof, hence, the heirs of Emiliano, Simeon and
Roberta Aying, who undisputedly did not participate therein, cannot be bound by said document.
However, the facts on record show that petitioner acquired the entire parcel of land with the
mistaken belief that all the heirs have executed the subject document. Thus, the trial court is
correct that the provision of law applicable to this case is Article 1456 of the Civil Code which
states:
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.
In Vda. De Esconde vs. Court of Appeals,8 the Court expounded thus:
Construing this provision of the Civil Code, in Philippine National Bank v. Court of
Appeals, the Court stated:
A deeper analysis of Article 1456 reveals that it is not a trust in the technical
sense for in a typical trust, confidence is reposed in one person who is named a
trustee for the benefit of another who is called the cestui que trust, respecting
property which is held by the trustee for the benefit of the cestui que trust. A
constructive trust, unlike an express trust, does not emanate from, or generate a
fiduciary relation. While in an express trust, a beneficiary and a trustee are linked
by confidential or fiduciary relations, in a constructive trust, there is neither a
promise nor any fiduciary relation to speak of and the so-called trustee neither
accepts any trust nor intends holding the property for the beneficiary.9
The concept of constructive trusts was further elucidated in the same case, as follows:
. . . 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. 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.10 (Emphasis supplied)
Based on such concept of constructive trusts, the Court ruled in said case that:
The rule that a trustee cannot acquire by prescription ownership over property entrusted
to him until and unless he repudiates the trust, applies to express trusts and resulting
implied trusts. However, in constructive implied trusts, prescription may supervene even if
the trustee does not repudiate the relationship. Necessarily, repudiation of said trust is not
a condition precedent to the running of the prescriptive period.11
The next question is, what is the applicable prescriptive period?
In Amerol vs. Bagumbaran,12 the Court expounded on the prescriptive period within which to bring
an action for reconveyance of property based on implied or constructive trust, to wit:
. . . under the present Civil Code, we find that just as an implied or constructive trust is an
offspring of the law (Art. 1456, Civil Code), so is the corresponding obligation to reconvey
the property and the title thereto in favor of the true owner. In this context, and vis-à-vis
prescription, Article 1144 of the Civil Code is applicable.
Article 1144. The following actions must be brought within ten years from the
time the right of action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.
xxx xxx xxx
An action for reconveyance based on an implied or constructive trust must perforce
prescribe in ten years and not otherwise. A long line of decisions of this Court, and of very
recent vintage at that, illustrates this rule. Undoubtedly, it is now well-settled that an
action for reconveyance based on an implied or constructive trust prescribes in ten years
from the issuance of the Torrens title over the property.13
It has also been ruled that the ten-year prescriptive period begins to run from the date of
registration of the deed or the date of the issuance of the certificate of title over the property, but if
the 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. 14
3
In the present case, respondents Wenceslao Sumalinog, an heir of Roberta Aying; Laurencio
Aying, an heir of Emiliano Aying; and Paulino Aying, an heir of Simeon Aying, all testified that they
had never occupied or been in possession of the land in dispute.15 Hence, the prescriptive period
of ten years would apply to herein respondents.
The question then arises as to the date from which the ten-year period should be reckoned,
considering that the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale was
registered under Act No. 3344 and not under Act No. 496 (Land Registration Act), despite the fact
the land in dispute was already titled under Act No. 496 in the names of the Aying siblings at the
time the subject document was executed.
In Spouses Abrigo vs. De Vera,16 it was held that registration of instruments must be done in the
proper registry, in order to affect and bind the land and, thus, operate as constructive notice to the
world.17 Therein, the Court ruled:
x x x If the land is registered under the Land Registration Act (and has therefore a
Torrens Title), and it is sold but the subsequent sale is registered not under the Land
Registration Act but under Act 3344, as amended, such sale is not considered
REGISTERED x x x .18
In this case, since the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale was
registered under Act No. 3344 and not under Act No. 496, said document is deemed not
registered. Accordingly, the ten-year prescriptive period cannot be reckoned from March 6, 1964,
the date of registration of the subject document under Act No. 3344. The prescriptive period only
began to run from the time respondents had actual notice of the Extra-Judicial Partition of Real
Estate with Deed of Absolute Sale.
The only evidence on record as to when such prescriptive period commenced as to each of the
respondents are Wenceslao Sumalinog’s (heir of Roberta Aying) testimony that about three years
after 1964, they already learned of the existence of the Extra-Judicial Partition of Real Estate with
Deed of Absolute Sale;19 and Laurencio Aying’s (heir of Emiliano Aying) admission that he found
out about the sale of the land in dispute a long time ago and can only estimate that it must be after
martial law.20 Paulino Aying (heir of Simeon Aying) gave no testimony whatsoever as to when the
children of Simeon Aying actually learned of the existence of the document of sale. On the other
hand, petitioner did not present any other evidence to prove the date when respondents were
notified of the execution of the subject document.
In view of the lack of unambiguous evidence of when the heirs of Emiliano Aying and Simeon
Aying discovered the existence of the document of sale, it must be determined which party had
the burden of proof to establish such fact.
The test for determining where the burden of proof lies is to ask which party to an action or suit will
fail if he offers no evidence competent to show the facts averred as the basis for the relief he
seeks to obtain.21 Moreover, one alleging a fact that is denied has the burden of proving it and
unless the party asserting the affirmative of an issue sustains the burden of proof of that issue by
a preponderance of the evidence, his cause will not succeed.22 Thus, the defendant bears the
burden of proof as to all affirmative defenses which he sets up in answer to the plaintiff’s claim or
cause of action; he being the party who asserts the truth of the matter he has alleged, the burden
is upon him to establish the facts on which that matter is predicated and if he fails to do so, the
plaintiff is entitled to a verdict or decision in his favor.23
In the case at bar, it was petitioner, as the defendant before the RTC, which set up in its Answer
the affirmative defense of prescription. It was, therefore, incumbent upon petitioner to prove the
date from which the prescriptive period began to run. Evidence as to the date when the ten-year
prescriptive period began exists only as to the heirs of Roberta Aying, as Wenceslao Sumalinog
admitted that they learned of the existence of the document of sale in the year 1967. As to the
heirs of Emiliano Aying and Simeon Aying, there is no clear evidence of the date when they
discovered the document conveying the subject land to petitioner. Petitioner miserably failed to
adduce proof of when the heirs of Emiliano Aying and Simeon Aying were notified of the subject
document. Hence, with regard to said heirs, the Court may consider the admission in the amended
complaint that they learned of the conveyance of the disputed land only in 1991 when petitioner
sent notices to vacate to the occupants of the subject land, as the date from which the ten-year
prescriptive period should be reckoned.
Respondents filed their Amended Complaint on December 6, 1993.24 Thus, with regard to
respondent heirs of Roberta Aying who had knowledge of the conveyance as far back as 1967,
their cause of action is already barred by prescription when said amended complaint was filed as
they only had until 1977 within which to bring action. As to the respondent heirs of Emiliano and
Simeon Aying, they were able to initiate their action for reconveyance of property based on implied
or constructive trust well within the ten-year prescriptive period reckoned from 1991 when they
were sent by petitioner a notice to vacate the subject property.
Evidently, laches cannot be applied against respondent heirs of Emiliano and Simeon Aying, as
they took action to protect their interest well within the period accorded them by law.
With regard to petitioner’s argument that the provision of Article 1104 of the Civil Code, stating that
a partition made with preterition of any of the compulsory heirs shall not be rescinded, should be
applied, suffice it to say that the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale
is not being rescinded. In fact, its validity had been upheld but only as to the parties who
participated in the execution of the same. As discussed above, what was conveyed to petitioner
was ownership over the shares of the heirs who executed the subject document. Thus, the law,
particularly, Article 1456 of the Civil Code, imposed the obligation upon petitioner to act as a
trustee for the benefit of respondent heirs of Emiliano and Simeon Aying who, having brought their
action within the prescriptive period, are now entitled to the reconveyance of their share in the land
in dispute.
IN VIEW OF THE FOREGOING, the petition is PARTIALLY GRANTED and the Decision of the
Court of Appeals dated March 7, 2000 is MODIFIED, as follows: The amended complaint of the
heirs of Roberta Aying is DISMISSED on the ground of prescription. However, the heirs of
Emiliano Aying and Simeon Aying, having instituted the action for reconveyance within the
prescriptive period, are hereby DECLARED as the LAWFUL OWNERS of a 2/8 portion of the
parcel of land covered by Original Certificate of Title No. RO-2856.
SO ORDERED.
4
 G.R. No. 148788 November 23, 2007
SOLEDAD CAÑEZO, substituted by WILLIAM CAÑEZO and VICTORIANO
CAÑEZO Petitioners, vs. CONCEPCION ROJAS, Respondent.
DECISION
NACHURA, J.:
This is a petition for review on certiorari from the Decision 1 of the Court of Appeals, dated
September 7, 2000, in CA-G.R. SP No. 53236, and Resolution dated May 9, 2001.
On January 29, 1997, petitioner Soledad Cañezo filed a Complaint2 for the recovery of real
property plus damages with the Municipal Trial Court (MTC) of Naval, Biliran, against her father’s
second wife, respondent Concepcion Rojas. The subject property is an unregistered land with an
area of 4,169 square meters, situated at Higatangan, Naval, Biliran. Cañezo attached to the
complaint a Joint Affidavit3 executed on May 10, 1979 by Isidro Catandijan and Maximina Cañezo
attesting to her acquisition of the property.
In her complaint, the petitioner alleged that she bought the parcel of land in 1939 from Crisogono
Limpiado, although the transaction was not reduced into writing. Thereafter, she immediately took
possession of the property. When she and her husband left for Mindanao in 1948, she entrusted
the said land to her father, Crispulo4 Rojas, who took possession of, and cultivated, the property.
In 1980, she found out that the respondent, her stepmother, was in possession of the property and
was cultivating the same. She also discovered that the tax declaration over the property was
already in the name of Crispulo Rojas.5
In her Answer, the respondent asserted that, contrary to the petitioner’s claim, it was her husband,
Crispulo Rojas, who bought the property from Crisogono Limpiado in 1948, which accounts for the
tax declaration being in Crispulo’s name. From then on, until his death in 1978, Crispulo
possessed and cultivated the property. Upon his death, the property was included in his estate,
which was administered by a special administrator, Bienvenido Ricafort. The petitioner, as heir,
even received her share in the produce of the estate. The respondent further contended that the
petitioner ought to have impleaded all of the heirs as defendants. She also argued that the fact
that petitioner filed the complaint only in 1997 means that she had already abandoned her right
over the property.6
On July 3, 1998, after hearing, the MTC rendered a Decision in favor of the petitioner, thus:
WHEREFORE, premises considered, the Court finds a preponderance of evidence in favor of
plaintiff Soledad Cañezo and against defendant Concepcion Rojas by declaring plaintiff the true
and lawful owner of the land more particularly described under paragraph 5 of the complaint and
hereby orders defendant Concepcion Rojas:
a) To vacate and surrender possession of the land to plaintiff;
b) To pay plaintiff the sum of ₱34,000.00 actual damages, ₱10,000.00 for attorney’s fees
and litigation expenses; and
c) To pay the costs.
SO ORDERED.7
Despite the respondent’s objection that the verbal sale cannot be proven without infringing the
Statute of Frauds, the MTC gave credence to the testimony of the petitioners’ two witnesses
attesting to the fact that Crisogono Limpiado sold the property to the petitioner in 1939. The MTC
also found no evidence to show that Crispulo Rojas bought the property from Crisogono Limpiado
in 1948. It held that the 1948 tax declaration in Crispulo’s name had little significance on
respondent’s claim, considering that in 1948, the "country was then rehabilitating itself from the
ravages of the Second World War" and "the government was more interested in the increase in
tax collection than the observance of the niceties of law."8
The respondent appealed the case to the Regional Trial Court (RTC) of Naval, Biliran. On October
12, 1998, the RTC reversed the MTC decision on the ground that the action had already
prescribed and acquisitive prescription had set in. The dispositive portion of the Decision reads:
WHEREFORE, premises considered, the decision of the Municipal Trial Court of Naval, Biliran
awarding ownership of the disputed land to the plaintiff and further allowing recovery of damages
is hereby REVERSED in toto. There is no award of damages.
The said property remains as the legitime of the defendant Concepcion Rojas and her children.
SO ORDERED.9
However, acting on petitioner’s motion for reconsideration, the RTC amended its original decision
on December 14, 1998.10 This time, it held that the action had not yet prescribed considering that
the petitioner merely entrusted the property to her father. The ten-year prescriptive period for the
recovery of a property held in trust would commence to run only from the time the trustee
repudiates the trust. The RTC found no evidence on record showing that Crispulo Rojas ever
ousted the petitioner from the property. The dispositive portion of the amended decision reads as
follows:
WHEREFORE, in view of the foregoing considerations, the decision of this Court dated October
12, 1998 is hereby set aside and another is hereby entered modifying the decision of the Court a
quo and declaring Soledad Rojas Vda. De Cañezo as the true and lawful owner of a parcel of
land, more particularly described and bounded as follows:
A parcel of land situated at Higatangan, Naval, Biliran, bounded on the North by Policarpio
Limpiado; on the South by Fidel Limpiado; on the East by Seashore; and on the West by Crispolo
(sic) Limpiado with an approximate area of 4,169 square meters per Tax Declaration No. 2258,
later under Tax Declaration No. 4073 in the name of Crispolo Rojas and later in the name of the
Heirs of Crispolo Rojas.
Further, ordering defendant-appellant Concepcion Rojas and all persons claiming rights or interest
under her to vacate and surrender possession of the land aforecited to the plaintiff or any of her
authorized representatives, Ordering the Provincial and/or Municipal Assessor’s Office to cancel
the present existing Tax Declaration in the name of Heirs of Crispolo Rojas referring to the above-
described property in favor of the name of Soledad Rojas Vda. De Cañezo, Ordering the
defendant-appellant Concepcion Rojas to pay the plaintiff-appellee the sum of ₱34,000.00 in
actual damages, and to pay for the loss of her share in money value of the products of the
5
coconuts of said land from 1979 to 1997 and to pay further until the case is terminated at the rate
of ₱200.00 per quarter based on the regular remittances of the late Crispolo Rojas to the plaintiff-
appellee, and to pay the costs.
SO ORDERED.11
The respondent filed a motion to reconsider the Amended Decision but the RTC denied the same
in an Order dated April 25, 1999.
She then filed a petition for review with the Court of Appeals (CA), which reversed the Amended
Decision of the RTC on September 7, 2000, thus:
WHEREFORE, the amended decision dated December 14, 1998 rendered in Civil Case No. B-
1041 is hereby REVERSED and SET ASIDE. The complaint filed by Soledad Cañezo before the
Municipal Trial Court of Naval, Biliran is hereby DISMISSED on grounds of laches and prescription
and for lack of merit.
SO ORDERED.12
The CA held that the petitioner’s inaction for several years casts a serious doubt on her claim of
ownership over the parcel of land. It noted that 17 years lapsed since she discovered that
respondent was in adverse possession of the property before she instituted an action to recover
the same. And during the probate proceedings, the petitioner did not even contest the inclusion of
the property in the estate of Crispulo Rojas. 13
The CA was convinced that Crispulo Rojas owned the property, having bought the same from
Crisogono Limpiado in 1948. Supporting this conclusion, the appellate court cited the following
circumstances: (1) the property was declared for taxation purposes in Crispulo’s name and he had
been paying the taxes thereon from 1948 until his death in 1978; (2) Crispulo adversely
possessed the same property from 1948 until his death in 1978; and (3) upon his death in 1978,
the property was included in his estate, the proceeds of which were distributed among his heirs. 14
The CA further held that, assuming that there was an implied trust between the petitioner and her
father over the property, her right of action to recover the same would still be barred by
prescription since 49 years had already lapsed since Crispulo adversely possessed the contested
property in 1948.15
On May 9, 2001, the CA denied the petitioner’s motion for reconsideration for lack of merit. 16
In this petition for review, the petitioner, substituted by her heirs, assigns the following errors:
That the Court of Appeals committed grave abuse of discretion in setting aside petitioner’s
contention that the Petition for Review filed by respondent CONCEPCION ROJAS before the
Court of Appeals was FILED OUT OF TIME;
That the Court of Appeals erred and committed grave abuse of discretion amounting to lack or
excess of jurisdiction when it decided that the filing of the case by SOLEDAD CAÑEZO for
Recovery of Real Property was already barred by PRESCRIPTION AND LACHES.17
The petitioner insists that the respondent’s petition for review before the CA was filed out of time.
The petitioner posits that the CA may not grant an additional extension of time to file the petition
except for the most compelling reason. She contends that the fact that respondent’s counsel
needed additional time to secure the certified copy of his annexes cannot be considered as a
compelling reason that would justify an additional period of
extension. She admits, though, that this issue was raised for the first time in their motion for
reconsideration, but insists that it can be raised at any time since it concerns the jurisdiction of the
CA over the petition.
The petitioner further posits that prescription and laches are unavailing because there was an
express trust relationship between the petitioner and Crispulo Rojas and his heirs, and express
trusts do not prescribe. Even assuming that it was not an express trust, there was a resulting trust
which generally does not prescribe unless there is repudiation by the trustee.
For her part, the respondent argues that the petitioners are now estopped from questioning the CA
Resolution granting her second motion for extension to file the petition for review. She notes that
the petitioner did not raise this issue in the comment that she filed in the CA. In any case, the
grant of the second extension of time was warranted considering that the certified true copy of the
assailed RTC orders did not arrive at the office of respondent’s counsel in Cebu City in time for the
filing of the petition.
On the merits, the respondent asserts that the complaint is barred by prescription, laches and
estoppel. From 1948 until his death in 1978, Crispulo cultivated the property and was in adverse,
peaceful and continuous possession thereof in the concept of owner. It took the petitioner 49
years from 1948 before she filed the complaint for recovery of the property in 1997. Granting that it
was only in 1980 that she found out that the respondent adversely possessed the property, still
petitioner allowed 17 years to elapse before she asserted her alleged right over the property.
Finally, the respondent maintains that the other co-owners are indispensable parties to the case;
and because they were not impleaded, the case should be dismissed.
The petition has no merit.
On the procedural issue raised by the petitioner, we find no reversible error in the grant by the CA
of the second motion for extension of time to file the respondent’s petition. The grant or denial of a
motion for extension of time is addressed to the sound discretion of the court. 18 The CA obviously
considered the difficulty in securing a certified true copy of the assailed decision because of the
distance between the office of respondent’s counsel and the trial court as a compelling reason for
the request. In the absence of any showing that the CA granted the motion for extension
capriciously, such exercise of discretion will not be disturbed by this Court.
6
On the second issue, the petitioner insists that her right of action to recover the property cannot be
barred by prescription or laches even with the respondent’s uninterrupted possession of the
property for 49 years because there existed between her and her father an express trust or a
resulting trust. Indeed, if no trust relations existed, the possession of the property by the
respondent, through her predecessor, which dates back to 1948, would already have given rise to
acquisitive prescription in accordance with Act No. 190 (Code of Civil Procedure). 19 Under Section
40 of Act No. 190, an action for recovery of real property, or of an interest therein, can be brought
only within ten years after the cause of action accrues. This period coincides with the ten-year
period for acquisitive prescription provided under Section 4120 of the same Act.
Thus, the resolution of the second issue hinges on our determination of the existence of a trust
over the property --- express or implied --- between the petitioner and her father.
A trust is the legal relationship between one person having an equitable ownership of 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.21 Trusts are either express or implied.22 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 evincing an
intention to create a trust.23 Implied trusts are those which, without being expressed, are deducible
from the nature of the transaction as matters of intent or, independently, of the particular intention
of the parties, as being superinduced on the transaction by operation of law basically by reason of
equity.24 An implied trust may either be a resulting trust or a constructive trust.
It is true that in express trusts and resulting trusts, a trustee cannot acquire by prescription a
property entrusted to him unless he repudiates the trust.25 The following discussion is instructive:
There is a rule that 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 que trust does not prescribe, 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.
That rule applies squarely to express trusts. The basis of the rule is that the possession of a
trustee is not adverse. Not being adverse, he does not acquire by prescription the property held in
trust. Thus, Section 38 of Act 190 provides that the law of prescription does not apply "in the case
of a continuing and subsisting trust."
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.
xxxx
Acquisitive prescription may bar the action of the beneficiary against the trustee in an express trust
for the recovery of the property held in trust where (a) the trustee has performed unequivocal acts
of repudiation amounting to an ouster of the cestui que trust; (b) such positive acts of repudiation
have been made known to the cestui que trust, and (c) the evidence thereon is clear and
conclusive.26
As a rule, however, the burden of proving the existence of a trust is on the party asserting its
existence, and such proof must be clear and satisfactorily show the existence of the trust and its
elements.27 The presence of the following elements must be proved: (1) a trustor or settlor who
executes the instrument creating the trust; (2) a trustee, who is the person expressly designated to
carry out the trust; (3) the trust res, consisting of duly identified and definite real properties; and (4)
the cestui que trust, or beneficiaries whose identity must be clear.28 Accordingly, it was incumbent
upon petitioner to prove the existence of the trust relationship. And petitioner sadly failed to
discharge that burden.
The existence of express trusts concerning real property may not be established by parol
evidence.29 It must be proven by some writing or deed. In this case, the only evidence to support
the claim that an express trust existed between the petitioner and her father was the self-serving
testimony of the petitioner. Bare allegations do not constitute evidence adequate to support a
conclusion. They are not equivalent to proof under the Rules of Court.30
In one case, the Court allowed oral testimony to prove the existence of a trust, which had been
partially performed. It was stressed therein that what is important is that there should be an
intention to create a trust, thus:
What is crucial is the intention to create a trust. While oftentimes the intention is manifested by the
trustor in express or explicit language, such intention may be manifested by inference from what
the trustor has said or done, from the nature of the transaction, or from the circumstances
surrounding the creation of the purported trust.
However, an inference of the intention to create a trust, made from language, conduct or
circumstances, must be made with reasonable certainty. It cannot rest on vague, uncertain or
indefinite declarations. An inference of intention to create a trust, predicated only on
circumstances, can be made only where they admit of no other interpretation.31
Although no particular words are required for the creation of an express trust, a clear intention to
create a trust must be shown; and the proof of fiduciary relationship must be clear and convincing.
The creation of an express trust must be manifested with reasonable certainty and cannot be
inferred from loose and vague declarations or from ambiguous circumstances susceptible of other
interpretations.32
In the case at bench, an intention to create a trust cannot be inferred from the petitioner’s
testimony and the attendant facts and circumstances. The petitioner testified only to the effect that
her agreement with her father was that she will be given a share in the produce of the property,
thus:
Q: What was your agreement with your father Crispulo Rojas when you left this property
to him?
A: Every time that they will make copra, they will give a share.
Q: In what particular part in Mindanao [did] you stay with your husband?
A: Bansalan, Davao del Sur.
Q: And while you were in Bansalan, Davao del Sur, did Crispolo Rojas comply with his
obligation of giving your share the proceeds of the land?
7
 A: When he was still alive, he gave us every three months sometimes ₱200.00 and
sometimes ₱300.00.33
This allegation, standing alone as it does, is inadequate to establish the existence of a trust
because profit-sharing per se, does not necessarily translate to a trust relation. It could also be
present in other relations, such as in deposit.
What distinguishes a trust from other relations is the separation of the legal title and equitable
ownership of the property. In a trust relation, legal title is vested in the fiduciary while equitable
ownership is vested in a cestui que trust. Such is not true in this case. The petitioner alleged in her
complaint that the tax declaration of the land was transferred to the name of Crispulo without her
consent. Had it been her intention to create a trust and make Crispulo her trustee, she would not
have made an issue out of this because in a trust agreement, legal title is vested in the trustee.
The trustee would necessarily have the right to transfer the tax declaration in his name and to pay
the taxes on the property. These acts would be treated as beneficial to the cestui que trust and
would not amount to an adverse possession.34
Neither can it be deduced from the circumstances of the case that a resulting trust was
created.1âwphi1 A resulting trust is a species of implied trust that is presumed always to have
been contemplated by the parties, the intention as to which can be found in the nature of their
transaction although not expressed in a deed or instrument of conveyance. A resulting trust is
based on the equitable doctrine that it is the more valuable consideration than the legal title that
determines the equitable interest in property.35
While implied trusts may be proved by oral evidence, the evidence must be trustworthy and
received by the courts with extreme caution, and should not be made to rest on loose, equivocal
or indefinite declarations. Trustworthy evidence is required because oral evidence can easily be
fabricated.36 In order to establish an implied trust in real property by parol evidence, the proof
should be as fully convincing as if the acts giving rise to the trust obligation are proven by an
authentic document. An implied trust, in fine, cannot be established upon vague and inconclusive
proof.37 In the present case, there was no evidence of any transaction between the petitioner and
her father from which it can be inferred that a resulting trust was intended.
In light of the disquisitions, we hold that there was no express trust or resulting trust established
between the petitioner and her father. Thus, in the absence of a trust relation, we can only
conclude that Crispulo’s uninterrupted possession of the subject property for 49 years, coupled
with the performance of acts of ownership, such as payment of real estate taxes, ripened into
ownership. The statutory period of prescription commences when a person who has neither title
nor good faith, secures a tax declaration in his name and may, therefore, be said to have
adversely claimed ownership of the lot.38 While tax declarations and receipts are not conclusive
evidence of ownership and do not prove title to the land, nevertheless, when coupled with actual
possession, they constitute evidence of great weight and can be the basis of a claim of ownership
through prescription.39 Moreover, Section 41 of Act No. 190 allows adverse possession
in any character to ripen into ownership after the lapse of ten years. There could be prescription
under the said section even in the absence of good faith and just title.40
All the foregoing notwithstanding, even if we sustain petitioner’s claim that she was the owner of
the property and that she constituted a trust over the property with her father as the trustee, such
a finding still would not advance her case.
Assuming that such a relation existed, it terminated upon Crispulo’s death in 1978. A trust
terminates upon the death of the trustee where the trust is personal to the trustee in the sense that
the trustor intended no other person to administer it.41 If Crispulo was indeed appointed as trustee
of the property, it cannot be said that such appointment was intended to be conveyed to the
respondent or any of Crispulo’s other heirs. Hence, after Crispulo’s death, the respondent had no
right to retain possession of the property. At such point, a constructive trust would be created over
the property by operation of law. Where one mistakenly retains property which rightfully belongs to
another, a constructive trust is the proper remedial device to correct the situation.42
A constructive trust is one created not by any word or phrase, either expressly or impliedly,
evincing a direct intention to create a trust, but one which arises in order to satisfy the demands of
justice. It does not come about by agreement or intention but in the main by operation of law,
construed 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.43
As previously stated, the rule that a trustee cannot, by prescription, acquire ownership over
property entrusted to him until and unless he repudiates the trust, applies to express trusts and
resulting implied trusts. However, in constructive implied trusts, prescription may supervene even
if the trustee does not repudiate the relationship. Necessarily, repudiation of the said trust is not a
condition precedent to the running of the prescriptive period.44 A constructive trust, unlike an
express trust, does not emanate from, or generate a fiduciary relation. While in an express trust, a
beneficiary and a trustee are linked by confidential or fiduciary relations, in a constructive trust,
there is neither a promise nor any fiduciary relation to speak of and the so-called trustee neither
accepts any trust nor intends holding the property for the beneficiary.45 The relation of trustee
and cestui que trust does not in fact exist, and the holding of a constructive trust is for the trustee
himself, and therefore, at all times adverse.
In addition, a number of other factors militate against the petitioner’s case. First, the petitioner is
estopped from asserting ownership over the subject property by her failure to protest its inclusion
in the estate of Crispulo. The CA, thus, correctly observed that:
Even in the probate proceedings instituted by the heirs of Crispulo Rojas, which included her as a
daughter of the first marriage, Cañezo never contested the inclusion of the contested property in
the estate of her father. She even participated in the project of partition of her father’s estate which
was approved by the probate court in 1984. After personally receiving her share in the proceeds of
the estate for 12 years, she suddenly claims ownership of part of her father’s estate in 1997.
The principle of estoppel in pais applies when -- by one’s acts, representations, admissions, or
silence when there is a need to speak out -- one, intentionally or through culpable negligence,
induces another to believe certain facts to exist; and the latter rightfully relies and acts on such
belief, so as to be prejudiced if the former is permitted to deny the existence of those facts. 46 Such
a situation obtains in the instant case.
8
Second, the action is barred by laches. The petitioner allegedly discovered that the property was
being possessed by the respondent in 1980.47 However, it was only in 1997 that she filed the
action to recover the property. Laches is negligence or omission to assert a right within a
reasonable time, warranting a presumption that the party entitled to it has either abandoned or
declined to assert it.48

Finally, the respondent asserts that the court a quo ought to have dismissed the complaint for
failure to implead the other heirs who are indispensable parties. We agree. We note that the
complaint filed by the petitioner sought to recover ownership, not just possession of the property;
thus, the suit is in the nature of an action for reconveyance. It is axiomatic that owners of property
over which reconveyance is asserted are indispensable parties. Without them being impleaded, no
relief is available, for the court cannot render valid judgment. Being indispensable parties, their
absence in the suit renders all subsequent actions of the trial court null and void for want of
authority to act, not only as to the absent parties but even as to those present. Thus, when
indispensable parties are not before the court, the action should be dismissed.49 At any rate, a
resolution of this issue is now purely academic in light of our finding that the complaint is already
barred by prescription, estoppel and laches.

WHEREFORE, premises considered, the petition is DENIED. The Decision of the Court of
Appeals, dated September 7, 2000, and Resolution dated May 9, 2001, are AFFIRMED.

SO ORDERED.

9
 G.R. No. 196023 April 21, 2014
JOSE JUAN TONG, ET AL., Petitioners, vs. GO TIAT KUN, ET AL., Respondents.
DECISION
REYES, J.:
This appeal by petition for review seeks to annul and set aside the Decision 1 dated October 28,
2010 and the Resolution2 dated March 3, 2011 of the Court of Appeals (CA) in CA-G.R. CV No.
03078, which reversed the Decision3 dated May 21, 2009 of the Regional Trial Court of Iloilo City,
Branch 37, in Civil Case No. 05-28626.
The Facts
The instant petition stemmed from an action for Nullification of Titles and Deeds of Extra-Judicial
Settlement and Sale and Damages instituted by the petitioners against the respondents over a
parcel of land known as Lot 998-A of the Cadastral Survey of Iloilo, having an area of 2,525
square meters and now covered by Transfer Certificate of Title (TCT) No. 134082.
The petitioners are nine of the ten children of Spouses Juan Tong (Juan Tong) and Sy Un
(Spouses Juan Tong), namely: Jose Juan Tong, Lucio Juan Tong, Simeon Juan Tong, Felisa
Juan Tong Cheng, Luisa Juan Tong Tan, Julia Juan Tong Dihiansan, Ana Juan Tong Dy, Elena
Juan Tong Yng Choan, and Vicente Juan Tong, who being already deceased, is survived by his
widow, Rosita So and their children, Chanto Juan Tong and Alfonso So-Chanto Juan Tong.
Completing the ten children of Spouses Juan Tong is the deceased Luis Juan Tong, Sr. (Luis, Sr.)
whose surviving heirs are: his spouse Go Tiat Kun, and their children, Leon, Mary, Lilia, Tomas,
Luis, Jr., and Jaime, who being already dead, is survived by his wife, Roma Cokee Juan Tong
(respondents).
Sometime in 1957, Juan Tong had a meeting with all his children to inform them of his intention to
purchase Lot 998 to be used for the family’s lumber business called "Juan Tong Lumber".
However, since he was a Chinese citizen and was disqualified from acquiring the said lot, the title
to the property will be registered in the name of his eldest son, Luis, Sr., who at that time was
already of age and was the only Filipino citizen among his children. On May 11, 1957, Juan Tong
bought Lot 998 from the heirs of Jose Ascencio. Accordingly, on May 16, 1957, TCT No. 10346
was issued by the Register of Deeds in the name of Luis, Sr.
On December 8, 1978, the single proprietorship of Juan Tong Lumber was incorporated into a
corporation known as the Juan Tong Lumber, Inc.4 However, Sy Un and Juan Tong both died
intestate on October 31, 1984, and November 13, 1990, respectively.
Meanwhile, on May 30, 1981, Luis, Sr. died and the respondents, being his surviving heirs,
claimed ownership over Lot 998 by succession, alleging that no trust agreement exists and it was
Luis, Sr. who bought Lot 998. On July 2, 1982, the respondents executed a Deed of Extra-Judicial
Settlement of Estate of Luis, Sr., adjudicating unto themselves Lot 998 and claiming that the said
lot is the conjugal property of Luis, Sr., and his wife, which the Juvenile and Domestic Relations
Court of Iloilo City approved on June 28, 1982. On July 19, 1982, the said deed was registered
causing the cancellation of TCT No. 10346 and the issuance of TCT No. T-60231 in the name of
the respondents.
Subsequently, the respondents agreed to subdivide Lot 998, thus, on October 12, 1992, two new
titles were issued: (1) TCT No. 97068 over Lot 998-A in the name of Go Tiat Kun and her children;
and (2) TCT No. T-96216 over Lot 998-B in the name of Luis, Jr.
After Lot 998 was subdivided, Luis, Jr. sold Lot 998-B to Fine Rock Development Corporation
(FRDC), which in turn sold the same to Visayas Goodwill Credit Corporation (VGCC). It was only
after the petitioners received a letter from VGCC, on August 31, 1995, that they discovered about
the breach of the trust agreement committed by the respondents.
To protect their rights, the petitioners filed an action for Annulment of Sales, Titles, Reconveyance
and Damages of Lot 998-B docketed as Civil Case No. 22730 against Luis, Jr., FRDC and VGCC.
On March 6, 1997, the trial court ruled5 in favor of the petitioners which were later affirmed by the
CA6 and this Court7 on appeal. Consequently, Lot 998-B was reconveyed to the petitioners and
TCT No. T-14839 was issued under their names including the late Luis, Sr.
Then, on February 24, 2001, Go Tiat Kun executed a Deed of Sale of Undivided Interest over Lot
998-A in favor of her children, Leon, Mary, Lilia, Tomas, and the late Jaime, resulting in the
issuance of TCT No. T-134082 over Lot 998-A.
Hence, on August 2, 2005, the petitioners filed the instant case for Nullification of Titles, and
Deeds of Extra-judicial Settlement and Sale and Damages claiming as owners of Lot 998-A.8
After trial, the court a quo rendered its judgment in favor of the petitioners, ruling that there was an
implied resulting trust between Juan Tong, Luis, Sr., the petitioners and the respondents, over Lot
998. The trial court found that Luis Sr. was a mere trustee, and not the owner of Lot 998, and the
beneficial interest over said property remained in Juan Tong and subsequently in the Juan Tong
Lumber, Inc. The trust is further established by the fact that Luis Sr., during his lifetime: (1) did not
build a house or any structure thereon or make use of the property in any manner; (2) resided with
his family together with his parents, brothers and sisters in Juan Tong building in front of the said
lot; (3) have acquired a residential property at Ledesco Village, La Paz, Iloilo City and other
places, where his heirs now reside; and (4) did not exercised any other act of ownership over the
said lot.
The trial court further claimed that any right that the respondents may have over Lot 998-A would
have been merely derived from that of their predecessor-in-interest, Luis Sr. Since the
respondents were not the owners of Lot 998-A, they could not appropriate the property unto
themselves, much less convey the same unto third persons. Thus, any document executed by
them adjudicating unto themselves or conveying in favor of each other Lot 998-A, as well as the
titles issued in their favor as a consequence of those documents, are invalid. Since the petitioners
were deprived of Lot 998-A through the surreptitious and fraudulent acts of the respondents, the
petitioners are entitled to the reconveyance of the properties, and the validity of TCT No. T-
134082 which covers Lot 998-A as well as the previous titles and documents of conveyance
covering the said lot were null and void. Thus:
10
WHEREFORE, in view of the foregoing considerations, judgment is hereby rendered in favor of
the plaintiffs and against the defendants:
1. Declaring null and void the following:
a. Deed of Extrajudicial Settlement of Estate of Deceased Person executed by
the Defendants on July 2, 1982 executed by defendants Go Tiat Kun, Leon Juan
Tong, Mary Juan Tong, Lilia Juan Tong, and Tomas Juan Tong, and the late
Jaime Juan Tong;
b. Transfer Certificate of Title No. T-60231 in the name of defendants Go Tiat
Kun, Leon Juan Tong, Mary Juan Tong, Lilia Juan Tong, and Tomas Juan Tong
and the late Jaime Juan Tong;
c. Transfer Certificate of Title No. T-97068 in the name of defendants Go Tiat
Kun, Leon Juan Tong, Mary Juan Tong, Lilia Juan Tong, and Tomas Juan Tong
and the late Jaime Juan Tong;
d. Deed of Sale of Undivided Interest over Real Property executed by defendant
Go Tiat Kun on February 24, 2001 in favor of defendants Leon Juan Tong, Mary
Juan Tong, Lilia Juan Tong, and Tomas Juan Tong and the late Jaime Juan
Tong; [and]
e. Transfer Certificate of Title No. T-134082, and all titles issued subsequent
thereto, covering Lot 998-A, in the names of defendants Leon Juan Tong, Mary
Juan Tong, Lilia Juan Tong, and Tomas Juan Tong and the late Jaime Juan
Tong[.]
2. Ordering defendants to jointly and severally pay Jose Juan Tong Moral Damages of
Php200,000.00, and the plaintiffs Litigation Expenses of Php100,000.00 and Attorney’s
Fees of Php200,000.00.
3. Ordering the Register of Deeds of the City of Iloilo to issue a new transfer certificate of
title covering Lot 998-A in the name of the plaintiffs and Luis Juan Tong, in equal shares.
4. The Counterclaim is hereby ordered dismissed for lack of merit.
SO ORDERED.9
On appeal, the CA rendered the herein assailed decision, which reversed and set aside the trial
court’s decision, and dismissed the complaint for lack of merit.
The appellate court, more particularly ruled that an express trust was created because there was a
direct and positive act from Juan Tong to create a trust. And when an express trust concerns an
immovable property or any interest therein, it may not be proved by parol or oral evidence, but
must be proven by some writing or deed.10 The CA also ruled that even granting that an implied
resulting trust was created; the petitioners are still barred by prescription because the said
resulting trust was terminated upon the death of Luis, Sr. and was then converted into a
constructive trust.11 Since in an action for reconveyance based on a constructive trust prescribes
in ten years from the issuance of the Torrens title over the property, counting from the death of
Luis, Sr. in 1981, the action has already prescribed.
The CA went on to rule that there is a presumption of donation in this case pursuant to Article
1448 of the Civil Code that 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. Thus, even though the respondents did not
present evidence to prove a donation, the petitioners likewise did not also try to dispute it. The CA
also held that the petitioners were already barred by estoppel and laches.
Aggrieved by the foregoing disquisition, the petitioners moved for reconsideration but it was
denied by the appellate court,12 hence, they filed this petition for review.
The Issue
Briefly stated, the issues to be resolved in this petition are: (1) Was there an implied resulting trust
constituted over Lot 998 when Juan Tong purchased the property and registered it in the name of
Luis, Sr.? (2) May parol evidence be used as proof of the establishment of the trust? (3) Were the
petitioners’ action barred by prescription, estoppel and laches?
The Court’s Ruling
The petition is impressed with merit.
As a general rule, in petitions for review under Rule 45 of the Rules of Court, the jurisdiction of this
Court in cases brought before it from the CA is limited to the review and revision of errors of law
allegedly committed by the appellate court. The question of the existence of an implied trust is
factual, hence, ordinarily outside the purview of Rule 45. Nevertheless, the Court’s review is
justified by the need to make a definitive finding on this factual issue in light of the conflicting
rulings rendered by the courts below.13
At the outset, it is worthy to note that the issues posited in this case are not novel because in Civil
Case No. 22730 involving Lot 998-B which forms part of Lot 998, the trial court already found that
said lot was held in trust by Luis Sr. in favor of his siblings by virtue of an implied resulting trust.
The trial court’s decision was then affirmed by the CA in CA-G.R. CV No. 56602, and this Court in
G.R. No. 156068. Thus, Lot 998-A, the subject of this instant case, and Lot 998-B, are similarly
situated as they comprise the subdivided Lot 998, the property which in its entirety was held in
trust by Luis Sr. in favor of his siblings.
A review of the records shows an intention to create a trust between the parties. Although Lot 998
was titled in the name of Luis, Sr., the circumstances surrounding the acquisition of the subject
property eloquently speak of the intent that the equitable or beneficial ownership of the property
should belong to the Juan Tong family.
First, Juan Tong had the financial means to purchase the property for ₱55,000.00. On the other
hand, respondents failed to present a single witness to corroborate their claim that Luis, Sr.
bought the property with his own money since at that time, Luis Sr., was merely working for his
father where he received a monthly salary of ₱200.00 with free board and lodging.
Second, the possession of Lot 998 had always been with the petitioners. The property was
physically possessed by Juan Tong and was used as stockyard for their lumber business before it
11
was acquired, and even after it was acquired. In fact, the lot remains to be the stockyard of the
family lumber business until this very day.
Third, from the time it was registered in the name of Luis, Sr. in 1957, Lot 998 remained undivided
and untouched by the respondents. It was only after the death of Luis, Sr. that the respondents
claimed ownership over Lot 998 and subdivided it into two lots, Lot 998-A and Lot 998-B.
Fourth, respondent Leon admitted that up to the time of his father’s death, (1) Lot 998 is in the
possession of the petitioners, (2) they resided in the tenement in the front part of Juan Tong’s
compound, (3) Luis Sr. never sent any letter or communication to the petitioners claiming
ownership of Lot 998, and (4) he and his mother have a residence at Ledesco Village, La Paz,
Iloilo City while his brother and sisters also have their own residences.
Fifth, the real property taxes on Lot 998 were paid not by Luis Sr. but by his father Juan Tong and
the Juan Tong Lumber, Inc., from 1966 up to early 2008 as evidenced by the following: a) the
letter of assessment sent by the City Treasurer of Iloilo, naming Juan Tong as the owner of Lot
998; and b) the receipts of real property taxes paid by Juan Tong Lumber, and later by Juan Tong
Lumber, Inc., from 1997 to 2008. While some of the tax receipts were in the name of Luis Sr., the
fact that the petitioners were in possession of the originals thereof established that the petitioners,
the Juan Tong Lumber, Inc., or the late Juan Tong paid for the taxes. The respondents did not try
to explain the petitioners’ possession of the realty property tax receipts in the name of Luis Sr.
The appellate court’s conclusion that an express trust was created because there was a direct and
positive act by Juan Tong to create a trust must inevitably yield to the clear and positive evidence
on record which showed that what was truly created was an implied resulting trust. As what has
been fully established, in view of the mutual trust and confidence existing between said parties
who are family members, the only reason why Lot 998 was registered in the name of Luis, Sr. was
to facilitate the purchase of the said property to be used in the family’s lumber business since Luis,
Sr. is the only Filipino Citizen in the Juan Tong family at that time. As the registered owner of Lot
998, it is only natural that tax declarations and the corresponding tax payment receipts be in the
name of Luis, Sr. so as to effect payment thereof.
The principle of a resulting trust is based on the equitable doctrine that valuable consideration and
not legal title determines the equitable title or interest and are presumed always to have been
contemplated by the parties. They arise from the nature or circumstances of the consideration
involved in a transaction whereby one person thereby becomes invested with legal title but is
obligated in equity to hold his legal title for the benefit of another. On the other hand, a
constructive trust, unlike an express trust, does not emanate from, or generate a fiduciary relation.
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.14
Guided by the foregoing definitions, the Court is in conformity with the finding of the trial court that
an implied resulting trust was created as provided under the first sentence of Article 1448 15 which
is sometimes referred to as a purchase money resulting trust, the elements of which are: (a) an
actual payment of money, property or services, or an equivalent, constituting valuable
consideration; and (b) such consideration must be furnished by the alleged beneficiary of a
resulting trust.16 Here, the petitioners have shown that the two elements are present in the instant
case. Luis, Sr. was merely a trustee of Juan Tong and the petitioners in relation to the subject
property, and it was Juan Tong who provided the money for the purchase of Lot 998 but the
corresponding transfer certificate of title was placed in the name of Luis, Sr.
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 families, does
not lose that character simply because of what appears in a legal document.17
Contrary to the claim of the respondents, it is not error for the trial court to rely on parol evidence,
i.e., the oral testimonies of witnesses Simeon Juan Tong and Jose Juan Tong, to arrive at the
conclusion that an implied resulting trust exists. What is crucial is the intention to create a trust.
"Intention—although only presumed, implied or supposed by law from the nature of the transaction
or from the facts and circumstances accompanying the transaction, particularly the source of the
consideration—is always an element of a resulting trust and may be inferred from the acts or
conduct of the parties rather than from direct expression of conduct. Certainly, intent as an
indispensable element is a matter that necessarily lies in the evidence, that is, by evidence, even
circumstantial, of statements made by the parties at or before the time title passes. Because an
implied trust is neither dependent upon an express agreement nor required to be evidenced by
writing, Article 1457 of our Civil Code authorizes the admission of parol evidence to prove their
existence. Parol evidence that is required to establish the existence of an implied trust necessarily
has to be trustworthy and it cannot rest on loose, equivocal or indefinite declarations."18
Lastly, the respondents’ assertion that the petitioners’ action is barred by prescription, laches and
estoppel is erroneous.
As a rule, implied resulting trusts do not prescribe except when the trustee repudiates the
trust.1âwphi1 Further, the action to reconvey does not prescribe so long as the property stands in
the name of the trustee.19 To allow prescription would be tantamount to allowing a trustee to
acquire title against his principal and true owner. It should be noted that the title of Lot 998 was
still registered in the name of Luis Sr. even when he predeceased Juan Tong. Considering that the
implied trust has been repudiated through such death, Lot 998 cannot be included in his estate
except only insofar as his undivided share thereof is concerned. It is well-settled that title to
property does not vest ownership but it is a mere proof that such property has been registered.
And, the fact that the petitioners are in possession of all the tax receipts and tax declarations of
Lot 998 all the more amplify their claim of ownership over Lot 998-A. Although these tax
declarations or realty tax payments of property are not conclusive evidence of ownership,
nevertheless, they are good indicia of possession in the concept of owner, for no one in his right
mind would be paying taxes for a property that is not in his actual or at least constructive
possession. Such realty tax payments constitute proof that the holder has a claim of title over the
property.20 Therefore, the action for reconveyance of Lot 998-A, which forms part of Lot 998, is
imprescriptible and the petitioners are not estopped from claiming ownership thereof.
12
Moreso, when the petitioners received a letter from VGCC, and discovered about the breach of
the trust agreement committed by the heirs of Luis, Sr., they immediately instituted an action to
protect their rights, as well as upon learning that respondent Go Tiat Kun executed a Deed of Sale
of Undivided Interest over Lot 998-A in favor of her children. Clearly, no delay may be attributed to
them. The doctrine of laches is not strictly applied between near relatives, and the fact that the
parties are connected by ties of blood or marriage tends to excuse an otherwise unreasonable
delay.

On the question of whether or not Juan Tong intended a donation to Luis, Sr., this is merely a
disputable presumption which in this case was clearly disputed by the petitioners and supported
by the pieces of evidence on record.

Thus, contrary to the CA' s finding that there was no evidence on record showing that an implied
resulting trust relation arose between Juan Tong and Luis, Sr., the Court finds that the petitioners
before the trial court, had actually adduced sufficient evidence to prove the intention of Juan Tong
to transfer to Luis, Sr. only the legal title of Lot 998, with attendant expectation that Luis, Sr. would
hold the property in trust for the family. The evidence of course is not documentary, but rather
testimonial. Furthermore, the respondents never proffered any proof that could tend to establish
that they were the ones who have been paying taxes from the time of its purchase up to the
present, that they have been in possession of the subject property or that they had it surveyed and
subdivided openly with notice to all concerned.

WHEREFORE, in consideration of the foregoing premises, the instant petition is hereby

GRANTED. The Decision dated October 28, 2010 and Resolution dated March 3, 2011 of the
Court of Appeals in CA-G.R. CV No. 03078 are REVERSED and SET ASIDE. The Decision dated
May 21, 2009 of the Regional Trial Court of Iloilo City, Branch 37 in Civil Case No. 05-28626 is
REINSTATED.

SO ORDERED.

13
 G.R. No. 162033 May 8, 2009 Sometime in 1928, the Register of Deeds of Cebu City issued Original Certificate of Title No. 3878
HEIRS OF TRANQUILINO LABISTE (also known as Tranquilino Laviste) represented by: for Lot No. 1054. On 2 May 1928, Engineer Espiritu Bunagan (Engr. Bunagan), Deputy Public
(1) GERARDO LABISTE, representing the Heirs of Gregorio Labiste; Land Surveyor, subdivided Lot No. 1054 into two lots: Lot No. 1054-A with an area of 6,664
(2) OBDULLIA LABISTE GABUAN, representing the heirs of Juan Labiste; square meters for Tranquilino and Lot No. 1054-B with an area of 6,664 square meters for
(3) VICTORIA G. CHIONG, representing the Heirs of Eulalia Labiste; Epifanio. The subdivision plan prepared by Engr. Bunagan was approved by Jose P. Dans, Acting
(4) APOLINARIA LABISTE YLAYA, representing the Heirs of Nicolasa Labiste; Director of Lands on 28 October 1928.7
(5) DEMOSTHENES LABISTE, representing the Heirs of Gervacio Labiste;
(6) ALEJANDRA LABISTE; representing the Heirs of SINFROCIO LABISTE, and Subsequently, on 18 October 1939, the heirs of Tranquilino8 purchased the one-half (1/2) interest
(7) CLOTILDE LABISTE CARTA, representing the Heirs of Andres Labiste, Petitioners, of the heirs of Jose9 over Lot No. 1054 for ₱300.00, as evidenced by the Calig-onan sa
vs. Panagpalit10 executed by the parties in the Visayan dialect. The heirs of Tranquilino immediately
HEIRS OF JOSE LABISTE, survived by his children, took possession of the entire lot.
(1) ZACARIAS LABISTE, deceased and survived by his children, namely: CRESENCIA
LABISTE and EUFRONIO LABISTE;
(2) BERNARDINO LABISTE, deceased and survived by his children, namely: POLICARPIO When World War II broke out, the heirs of Tranquilino fled Cebu City and when they came back
LABISTE, BONIFACIO LABISTE, FELIX LABISTE, GABINA LABISTE, CAYETANA LABISTE they found their homes and possessions destroyed. The records in the Office of the Register of
and ISABEL LABISTE; Deeds, Office of the City Assessor and other government offices were also destroyed during the
(3) LUCIA LABISTE, deceased and survived by her children, namely: ISAAC LABISTE, war. Squatters have practically overrun the entire property, such that neither petitioners nor
respondents possess it.
GENARO LABISTE, BRAULIA LABISTE, BRAULIO LABISTE, ASUNCION LABISTE,
ALFONSO LABISTE and CLAUDIA LABISTE;
(4) EPIFANIO LABISTE and CLAUDIA LABISTE; deceased and survived by his children, In October 1993, petitioners learned that one of the respondents,11 Asuncion Labiste, had filed on
namely SILVESTRE LABISTE, PAULA LABISTE and GERARDA LABISTE; 17 September 1993 a petition for reconstitution of title over Lot No. 1054. Petitioners opposed the
(5) ANA LABISTE, deceased and survived by her children, namely: MAXIMO LABISTE, petition at first but by a compromise agreement between the parties dated 25 March 1994,
MOISES LABISTE, GERVACIO LABISTE, SATURNINA LABISTE and QUIRINO LABISTE; petitioners withdrew their opposition to expedite the reconstitution process. Under the compromise
(6) SEVERO LABISTE, deceased and survived by his children, Namely: FELIX LABISTE, agreement, petitioners were to be given time to file a complaint so that the issues could be
RUFINA LABISTE, SIMPLICIO LABISTE, VICENTE LABISTE and PATRICIO litigated in an ordinary action and the reconstituted title was to be deposited with the Clerk of Court
LABISTE, Respondents. for a period of sixty (60) days to allow petitioners to file an action for reconveyance and to
annotate a notice of lis pendens. The Register of Deeds of Cebu City issued the reconstituted title,
DECISION TCT No. RT-7853,12 in the name of "Epifanio Labiste, married to Tomasa Mabitad, his brothers
and sisters, heirs of Jose Labiste" on 14 December 1994. However, respondents did not honor the
TINGA, J.: compromise agreement.
This is a petition for review1 under Rule 45 of the Rules of Court of the Court of Appeals’ Decision
dated 30 June 20032 in CA-G.R. CV No. 65829. reversing the decision of the Regional Trial Court Petitioners filed a complaint13 for annulment of title seeking the reconveyance of property and
(RTC) of Cebu City, Branch 9. The appellate court denied petitioners’ 3 motion for reconsideration damages on 13 January 1995, docketed as Civil Case No. CEB-16943, with the RTC of Cebu
in a Resolution dated 15 January 2004. City. 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.14
The factual antecedents are as follows:
On 29 September 1919, the late Epifanio Labiste (Epifanio), on his own and on behalf of his The RTC in a Decision dated 23 August 199915 ruled in favor of petitioners. After evaluating the
brothers and sisters who were the heirs of Jose Labiste (Jose), purchased from the Bureau of documents presented by petitioners, the RTC found that they are genuine and authentic as
Lands Lot No. 1054 of the Banilad Friar Lands Estate, with an area of 13,308 square meters, ancient documents and that they are valid and enforceable.16 Moreover, it held that the action had
located at Guadalupe, Cebu City for ₱36.00.4 Subsequently, on 9 June 1924, then Bureau of not prescribed as the complaint was filed about a year after the reconstitution of the title by
Lands Director Jorge B. Vargas executed Deed of Conveyance No. 12536 selling and ceding Lot respondents. The judicial reconstitution was even opposed by petitioners until a compromise
No. 1054 to Epifanio and his brothers and sisters who were the heirs of Jose.5 agreement was reached by the parties and approved by the RTC which ordered the reconstitution.
The RTC further held that the reconstituted title did not give any more right to respondents than
After full payment of the purchase price but prior to the issuance of the deed of conveyance, what their predecessors-in-interest actually had as it is limited to the reconstitution of the certificate
Epifanio executed an Affidavit6 (Affidavit of Epifanio) in Spanish on 10 July 1923 affirming that he, as it stood at the time of its loss or destruction.17
as one of the heirs of Jose, and his uncle and petitioners’ predecessor-in-interest, Tranquilino
Labiste (Tranquilino), then co-owned Lot No. 1054 because the money that was paid to the On appeal, the Court of Appeals, while affirming petitioners’ right to the property, nevertheless
government came from the two of them. Tranquilino and the heirs of Jose continued to hold the reversed the RTC’s decision on the ground of prescription and laches. It affirmed the RTC’s
property jointly.

14
findings that the Affidavit and the Calig-onan sa Panagpalit are genuine and authentic, and that
the same are valid and enforceable documents.18 Citing Article 1144 of the Civil Code, it held that
petitioners’ cause of action had prescribed for the action must be brought within ten (10) years
from the time the right of action accrues upon the written contract which in this case was when
petitioners’ predecessors-in-interest lost possession over the property after World War II. Also, the
lapse of time to file the action constitutes neglect on petitioners’ part so the principle of laches is
applicable.19
Hence, the present petition.
The genuineness and authenticity of the Affidavit of Epifanio and the Calig-onan sa Panagpalit are
beyond cavil. As we have ruled in a litany of cases, resort to judicial review of the decisions of the
Court of Appeals under Rule 45 is confined only to errors of law. 20 The findings of fact by the lower
court are conclusive absent any palpable error or arbitrariness.21 The Court finds no reason to
depart from this principle. Moreover, it is a long settled doctrine that findings of fact of the trial
court, when affirmed by the Court of Appeals, are binding upon the Court. It is not the function of
the Supreme Court to weigh anew the evidence already passed upon by the Court of Appeals for
these are deemed final and conclusive and may not be reviewed on appeal.22
The sole issue that the Court has to resolve is whether or not petitioners’ cause of action has
prescribed.
The Court of Appeals erred in applying the rules on prescription and the principle of laches
because what is involved in the present case is an express trust.
Trust is the right to the beneficial enjoyment of property, the legal title to which is vested in
another. It is a fiduciary relationship that obliges the trustee to deal with the property for the benefit
of the beneficiary.23 Trust relations between parties may either be express or implied. An express
trust is created by the intention of the trustor or of the parties. An implied trust comes into being by
operation of law.24
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.25 Under Article
1444 of the Civil Code, "[n]o particular words are required for the creation of an express trust, it
being sufficient that a trust is clearly intended." 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 Jose P. Dans, Acting Director of Lands.
As such, prescription and laches will run only from the time the express trust is repudiated. The
Court has held that for acquisitive prescription to bar the action of the beneficiary against the
trustee in an express trust for the recovery of the property held in trust it must be shown that: (a)
the trustee has performed unequivocal acts of repudiation amounting to an ouster of the cestui
que trust; (b) such positive acts of repudiation have been made known to the cestui que trust, and
(c) the evidence thereon is clear and
conclusive.26 http://sc.judiciary.gov.ph/jurisprudence/2007/november2007/148788.htm -
_ftn Respondents cannot rely on the fact that the Torrens title was issued in the name of Epifanio
and the other heirs of Jose. It has been held that a trustee who obtains a Torrens title over
property held in trust by him for another cannot repudiate the trust by relying on the
registration.27 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.
It is hornbook doctrine that laches is a creation of equity and its application is controlled by
equitable considerations. Laches cannot be used to defeat justice or perpetrate fraud and
injustice.28 Neither should its application be used to prevent the rightful owners of a property from
recovering what has been fraudulently registered in the name of another. The equitable remedy of
laches is, therefore, unavailing in this case.
However, to recover the other half of the property covered by the private Calig-onan sa Panagpalit
and to have it registered on the title of the property, petitioners should have filed an action to
compel30 respondents, as heirs of the sellers in the contract,31 to execute a public deed of sale. A
conveyance of land made in a private document does not affect its validity. Article 1358,like its
forerunner Article 1280 of the Civil Code of Spain, does not require the accomplishment of the
acts or contracts in a public instrument in order to validate the act or contract but only to insure its
efficacy,32 so that after the existence of said contract has been admitted, the party bound may be
compelled to execute the proper document.33 But even assuming that such action was filed by
petitioners, the same had already prescribed.1avvphi1
It is settled that only laws existing at the time of the execution of a contract are applicable thereto
and not later statutes, unless the latter are specifically intended to have retroactive
effect.34 Consequently, it is the Old Code of Civil Procedure (Act No. 190) which applies in this
case since the Calig-onan sa Panagpalit was executed on 18 October 1939 while the New Civil
Code took effect only on 30 August 1950. And section 43 of Act No. 190, like its counterpart
Article 1144 of the New Civil Code, provides that action upon a written contract must be filed within
ten years.35
WHEREFORE, the petition is PARTIALLY GRANTED. The Decision of the Court of Appeals dated
30 June 2003 in CA-G.R. CV No. 65829 is REVERSED and SET ASIDE and the Decision of the
Regional Trial Court of Cebu City, Branch 9 dated 23 August 1999 is
REINSTATED with MODIFICATION in petitioners are hereby DECLARED the absolute owners of
one-half of Lot No. 1054 or Lot No. 1054-A under TCT No. RT-7853. The Register of Deeds of
Cebu City is hereby ORDERED to CANCEL TCT No. RT-7853 in part and issue a new Transfer
Certificate of Title to petitioners, heirs of Tranquilino Labiste, covering Lot No. 1054-A. No costs.
SO ORDERED.
15