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148788, November
2, 2!!7 "
The subject property is an unregistered land with an area of 4,169 square meters
situated at Naval, iliran! "n a complaint on 199#, petitioner $oledad %a&e'o alleged that
she bought such parcel of land in 19(9 from %risogono )impiado, although the sale was
not reduced into writing! Thereafter, she immediately too* possession of the property! "n
194+, she and her husband left for ,indanao and entrusted the said land to her father,
%rispulo -ojas, who too* possession of, and cultivated the property! "n 19+., she found
out that the respondent,%oncepcion -ojas, her stepmother, was in possession of the
property and was cultivating the same! $he also discovered that the ta/ declaration over
the property was already in the name of his father!
-espondent asserted that it was her husband who bought the property from
)impiado,which accounts for the ta/ declaration being in %rispulo0s name!1fter the
hearing, ,T% rendered a decision in favor of the petitioner, ma*ing her the real and
lawful owner of the land! -espondent appealed to the -T% of Naval, iliran, which
reversed the ,T% decision on the ground that the action had already prescribed and
acquisitive prescription had set in! 2owever, acting on petitioner0s motion for
reconsideration, the -T% amended its original decision and held that the action had not
yet prescribed considering that the petitioner merely entrusted the property to her father!
The ten3year 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 -T% found no
evidence on record showing that %rispulo -ojas ever ousted the petitioner from the
4etitioner filed a petition for review with the %1, which reversed the amended
decision of the -T%! The %1 held that, assuming that there was a 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 %rispulo adversely
possessed the contested property in 194+!2ence, this petition for review!
ISS&E%5hether or not there is an e/istence of trust over the property 6 e/press or
implied 6 between the petitioner and her father
'ELD% N7N8! 1 trust is the legal relationship between one person having an
equitableownership of property and another person owning the legal title to such
property, the equitableownership of the former entitling him to the performance of certain
duties and the e/ercise of certain powers by the latter! Trusts are either e/press or
implied! 8/press trusts are those whichare created by the direct and positive acts of the
parties, by some writing or deed, or will, or bywords evincing an intention to create a
trust! "mplied trusts are those which, without beinge/pressed, 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!
1s a rule, the burden of proving the e/istence of a trust is on the party asserting its
e/istence, and such proof must be clear and satisfactorily show the e/istence of the trust
and its elements! The presence of the following elements must be proved9 :1; a trustor or
settlor who e/ecutes the instrument creating the trust< :=; a trustee, who is the person
e/pressly designated tocarry out the trust< :(; the trust res, consisting of duly identified
and definite real properties< and:4; the cestui que trust, or beneficiaries whose identity
must be clear!
1ccordingly, it was incumbent upon petitioner to prove the e/istence of the trust
relationship! 1nd petitioner sadly failed to discharge that burden!The e/istence of e/press
trusts concerning real property may not be established by parol evidence! "t must be
proven by some writing or deed! "n this case, the only evidence to support the claim that
an e/press trust e/isted between the petitioner and her father was the self3serving
testimony of the petitioner!1lthough no particular words are required for the creation of
an e/press 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 e/press trust must
be manifested with reasonable certainty and cannot be inferred from loose and vague
declarations or from ambiguous circumstances susceptible of other interpretations!"n the
case at bench, an intention to create a trust cannot be inferred from the petitioner0s
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! This allegation, standing alone as
it does, is inadequate to establish the e/istence of a trust because profit3sharing per se,
does not necessarily translate to a trust relation!"n light of the disquisitions, we hold that
there was no e/press trust or resulting trust established between the petitioner and her
father! Thus, in the absence of a trust relation, we can only conclude that %rispulo0s
uninterrupted possession of the subject property for 49 years,coupled with the
performance of acts of ownership, such as payment of real estate ta/es, ripened into
ownership!4etition denied! >ecision of the %1 affirmed
2. PN( vs CA G.R. No. )882 *+, 17, 1))
Two parcels of land under the common names of the respondent 8pifanio dela %ru', his
brother and sister were mortgaged to the 4etitioner 4hilippine National an*! The lots
were mortgaged to guarantee the by three promissory notes! The first two were not paid
by the respondent! The third is disputed by the respondent who claims that the correct
date is ?une (., 1961<however, in the ban* records, the note was really e/ecuted on ?une
(., 19@+!4N presented under 1ct No! (1(@ a foreclosure petition of the mortgaged lots!
The lots were sold or auctioned off with 4N as the highest bidder! 1 Ainal >eed of $ale
and a %ertificate of $ale was e/ecuted in favor of the petitioner! The final >eed of $ale
was registered in -egistry of 4roperty! "nasmuch as the respondent did not buy bac* the
lots from 4N, 4N sold on the same in a B>eed of %onditional $aleB! The Notices of
$ale of foreclosed properties were published on ,arch =+, 1pril 11 and 1pril 1=, 1969 in
a newspaper!-espondent brought a complaint for the reconveyance of the lands, which
the petitioner allegedly unlawfully foreclosed! The petitioner states on the other hand that
the e/trajudicial foreclosure, consolidation of ownership, and subsequent sale were all
The %A" rendered its >ecision< the complaint against the petitioner was
dismissed!Cnsatisfied with the judgment, respondent interposed an appeal that the lower
court erred in holding that there was a valid compliance in regard to the required
publication under $ec! ( of 1ct! (1(@!-espondent court reversed the judgment appealed
from by declaring void, inter alia, the auction sale of the foreclosed pieces of realty, the
final deed of sale, and the consolidation of ownership! 2ence, the petition with$% for
certiorari and intervention!
ISS&E% 57N the required publication of The Notices of $ale on the foreclosed
properties under $ec! ( of 1ct (1(@ was complied!
'ELD% No! The first date falls on a Ariday while the second and third dates are on a
Ariday and $aturday, respectively!$ection ( of 1ct No! (1(@ requires that the notice of
auction sale shall be Bpublished once a wee* for at least three consecutive wee*sB!
8vidently, petitioner ban* failed to comply with this legal requirement! The $upreme
%ourt held that9 The rule is that statutory provisions governing publication of notice of
mortgage foreclosure sales must be strictly complied with, and those even slight
deviations therefrom will invalidate the notice and render the sale at least voidable
528-8A7-8, the petitions for certiorari andintervention are hereby dismissed and the
decision of the %ourt of 1ppeals is hereby affirmed in toto
. /DA. DE RE$&ER$O /S. (ARZ 72 SCRA 712
#AC$S%4etitioners are the heirs of 4anfilo -etuerto, while respondents are the heirs of
4edro ar' who is the sole heir of ?uana 4ere' ar'! ?uana 4ere' ar' was the original
owner of )ot No! +96 having an area of 1(,16. square meters! efore her death on 1pril
16, 19=9, ?uana 4ere' e/ecuted a >eed of 1bsolute $ale in favor of 4anfilo -etuerto over
a parcel of land, identified as )ot No! +9631, a subdivision of )ot No! +96, with an
appro/imate area of =,@.@ square meters! 7n ?uly ==, 194., the %ourt issued an 7rder
directing the )and -egistration %ommission for the issuance of the appropriate >ecree in
favor of 4anfilo -etuerto over the said parcel of land! 2owever, no such >ecree was
issued as directed by the %ourt because, by >ecember +, 1941, the $econd 5orld 5ar
ensued in the 4acific! 2owever, 4anfilo failed to secure the appropriate decree after the
$ometime in 1966, 4edro ar', as the sole heir of ?uana 4ere', filed and application, with
the then %A" of %ebu for the confirmation of his title over )ot +96 which included the )ot
sold to 4anfilo -etuerto! The %ourt ruled in his favor declaring him the lawful owner of
the said property, and thus 7riginal %ertificate of Title No! @=1 was issued! )ot No! +963
1 however was continuously occupied by the petitioners! Thus, a confrontation arose and
as a result respondents filed an action on $eptember @, 19+9 for DEuieting of Title,
>amages and 1ttorney0s Aees!F "n their answer, petitioners claimed that they were the
owners of a portion of the lot which was registered under the name of 4edro ar' and
therefore the issuance of the 7riginal %ertificate of Title in 4edro ar'0s name did not
vest ownership but rather it merely constituted him as a trustee under a constructive trust!
4etitioners further contend that 4edro ar' misrepresented with the land registration court
that he inherited the whole lot thereby constituting fraud on his part!
ISS&E% 5hether or not petitioners0 defense is tenable!
R&LING% N7, the contention is bereft of merit! %onstructive trusts are created in equity
to prevent unjust enrichment, arising 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! 4etitioners failed to substantiate their allegation that their
predecessor3in3interest had acquired any legal right to the property subject of the present
controversy! Nor had they adduced evidence to show that the certificate of title of 4edro
ar' was obtained through fraud!
8ven assuming arguendo that 4edro ar' acquired title to the property through mista*e or
fraud, petitioners are nonetheless barred from filing their claim of ownership! 1n action
for reconveyance based on an implied or constructive trust prescribes within ten years
from the time of its creation or upon the alleged fraudulent registration of the property!
$ince registration of real property is considered a constructive notice to all persons, then
the ten3year prescriptive period is rec*oned from the time of such registering, filing or
entering! Thus, petitioners should have filed an action for reconveyance within ten years
from the issuance of 7%T No! @=1 in November 16, 196+! This, they failed to do so!
%hiao )ong Tan claims to be the owner of a 19#6 "su'u 8lf van! 1s owner thereof,
petitioner says he has been in possession, enjoyment, and utili'ation of the van until
his older brother, Tan an Gong, unlawfully too* it away from him!
Pe.1.1o2er re31es o2 .4e 5+-.%
1! That the van is registered under his name!
=! 2e claims to have bought the vehicle from isu'u balintawa*<
(! That he sent his brother to pay for the van and the receipt was issued in his
name because it was his money that was used to pay for the vehicle<
4! That he allowed his brother to use the vehicle because the latter was wor*ing for the
@! 1nd that his brother later refused to return the vehicle and appropriated the
same for himself!
Pr1v+.e res6o27e2. o2 .4e o.4er 4+27 .es.151es%
1! %)T "ndustries is the family business and it was under the name of petitioner since
at the that time, he was leaving for the C$ and petitioner is the only Ailipino left in
the 4hilippines
=! 5hen the family business needed a vehicle, he as*ed petitioner to loo* for a
vehicle and gave him money as downpayment for an "su'u 8lf van
(! 1fter a month, he paid for the van by getting a loan from a friend
4! 1s much as the receipt was placed in the name of petitioner, private
respondent allowed the registration under the name of petitioner
@! There was also agreement that he would use the vehicle as he paid for the

1ll the abovementioned allegations of private respondent has been corroborated by
witnesses! The trial court hence ruled in favor of the private respondent and the
%1 affirmed this decision!
"t is true that the judgment in a replevin suit must only resolve in whom is the right of
possession! 4rimarily, the action of replevin is possessory in character and determines
nothing more than the right of possession! 2owever, when the title to the property
is distinctly put in issue by the defendant0s plea and by reason of this policy to settle
in one action all the
conflicting claims of the parties to the possession of the property in controversy,
the question of ownership may be resolved in the same proceeding!

Aurthermore, a replevin action is primarily one for the possession of personalty,
yet it is sufficiently fle/ible to authori'e a settlement of all equities between the
parties, arising or growing out of the main
controversy! Thus, in an action for replevin where the defendant is adjudged to
possession, he need not go to another forum to procure relief for the return of the
replevied property or secure judgment for the value of the property in case the adjudged
return thereof could not be had!
0. S831. vs CA
9. Po31-+r61o vs CA
7. Se-8,+ vs. /7+. De Se3m+
>octrine9 1lthough there is no form required for a sale to be valid, a sale pertaining to
land must be registered in the -egistry of 4roperty! "f it was not, and that it was only a
private document, then the sale is valid as to only the contracting parties, but not to (

Aacts9 ,a/ima partitioned her land and sold it! $ecuya eventually held possession of the
land and cultivated it! 5hen he died, his siblings inherited it! 1 certain $elma came a long
and bought a partition of the ,a/ima0s land! "n $elma0s title, the land in the possession of
the $ecuyas was within the boundary bought by $elma! $elma now asserts ownership
over the land and files a case of quieting of title! $% says in this case, $elma is the owner
because of the strength of his title!
,a/ima %aballero owned a land! $he partitioned the land and e/ecuted a deed selling 1H(
of the land to 4acencia $abellona!
o4acencia too* possession of the parted 1H( portion!
>almacio $ecuya bought the land from 4acenciaby means of a private document which
was lost!
7 $uch sale was confirmed by -amon $abellona, the only heir of 4acienca!
o 4ursuant to 4acencia0s will, -amos inherited all 4acencia0s properties!
1nyway, after $ecuya bought the land, $ecuya too* possession of the land and cultivated
1 certain 8dilberto $uperales married $ecuya0s neice!
7 5ith $ecuya0s tolerance, $uperales was able to build his house on the land and
continuously lived there!
8ventually, $ecuya died! eing single, his brothers and sisters too* physical possession of
the land!
Then, a certain $elma bought a portion of )ot @6#9! The land in the $ecuyas0 possession
was a portion of )ot @6#9 and is included within the boundary of what $elma acquired!
$elma is now asserting ownership over the land on the strength of his title! -T%3%ebu
decided in favor of $elma! %1 affirmed!
Iss8e% >oes the land belong to $elmaI
'e37% Ges!
There is strength in his title! $ince this is an action for quieting of title, it must first be
established if the $ecuyas have the requisite title that would enable them to avail of the
remedy of quieting of title!
The $ecuyas contest their claim on the basis of = documents9
7 the 1greement of 4artition e/ecuted by ,a/ima %aballero and 4aciencia $abellona,
7 The >eed of %onfirmation of $ale e/ecuted by -amon $abellona
-e9 4artition
Cpon closer loo*, the $% says this 1greement is not one of partition, because there was
no property to partition, and theparties in the contract are not co3owners!
This is one in the nature of a trust agreement!
7 Trust is the right to the beneficial enjoyment of property, while the legal title to land is
vested in another!
7 %aballero merely entrusted the portion specified to $abellona!
7 "t therefore does not constitute a title!
$ince this is a trust agreement, it can be repudiated! This :right to; repudiation does not
e/pire, and was therefore e/ercised by the heirs of %aballeros, when they sold theland to
a (
party buyer :$elma;!
-e9 $ale
$ecuyas contest that there was a sale, but allege that the contract had been lost!
$% says that although there is no form required for a sale to be valid, a sale such as this
:one pertaining to land; must be registered in the -egistry of 4roperty!
"f it was not, and that it was only a private document, then the sale is valid as to only the
contracting parties, but not to (
parties, li*e $elma in this case!>ecision affirmed
+! A:2+r (ro.4ers Re+3., vs A,12; ,1G 16, =..@
J "f property is acquired through mista*e or fraud, the person obtaining it is, by force of
law, considered a trustee of an implied trust for the benefit of the person from whom the
property comes
J "mplied trusts are those which, without being e/pressed, are deducible from the nature
of the transaction as matters of intent or which are superinduced on the transaction by
operation of law as matters of equity, independently of the particular intention of the
J "mplied trusts may be resulting or constructive
-8$C)T"NK T-C$T$ %7N$T-C%T"L8 T-C$T$
ased on the equitable doctrine that
valuable consideration and not legal
title determines the equitable title
or interest and is presumed always
to have been contemplated by the
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 in favor of another!
%reated 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
). DELI*A /. CA 2!1 SCRA 941
#AC$S% )ino bought a lot from the friar lands! 2e died and was survived by his brothers
and sisters! Kalileo was the careta*er of the property! 2e was able to e/ecute an affidavit
adjudicating to himself the parcel of land and was able to secure the issuance of a T%T in
his name! This prompted the heirs of his siblings to file for reconveyance!
'ELD% 5hen the co3owner of the property e/ecuted a deed of partition and on the
strength thereof, obtained a cancellation of the title in the name of their predecessor and
the issuance of a new title in his name as owner, the statute of limitations started to run
for the purposes of the action instituted by the latter see*ing a declaration of the e/istence
of the co3ownership and their rights thereafter! The issuance of a new title constituted a
clear act of repudiation of the trust and co3ownership!
DELI*A /. CA< Re6871+.1o2 o5 Co<o=2ers416
%ancellation of old title and issuance of new one constituted an open and clear
repudiation of the trust or co3ownership which would start the running of prescription!
#AC$S% This case is another story of sibling war over a Ariar )and 8state inherited from
their parent who had acquired said land from the Kovernment! 5hen the parents died,
-espondent Kalileo allegedly paid the remaining balance of the purchase price, and the
estate ta/! )ater on, he e/ecuted an affidavit declaring himself as sole owner and acquired
T%T over it! 1. years after the T%T was issued, the other heirs instituted this action for
reconveyance claiming their part as co3owners!
ISS&E% 5hether or not the other heirs are still entitled to the land or are they barred by
R&LING% The other heirs are barred by prescription! 2ow did this happenI Kalileo was
able to prove the 4 requirements9 :1; clear and convincing evidence of repudiation :=;
made *nown to the other owners :(; adverse possession and open repudiation :4; for over
1. years!
5hat is important in this case is that the %ourt ruled that registration of the land would be
sufficient compliance with the notice requirement above!
1!. 4angan vs! %1
11. Le,so2 vs. (o2.8,+2 GR No. 10907 #eb 18, 2!!0
%ali/to Kabud was the owner of a parcel of land located in rgy! 1dlawon, ,abolo %ity!
The said property was divided into two parcels of land because of a construction of a
provincial road! 2e later on e/ecuted a >eed of 1bsolute $ale in favor of spouses
4rotacio Tabal and Livencia ontuyan, the spouses then sold the two lots to )ourdes L!
)eyson as evidenced by a >eed of 1bsolute $ale!
>espite the *nowledge of Kregorio ontuyan that said property has been sold to his son3
in3law and daughter, spouses Noval, he filed an application with the ureau of )ands
over )ot no 1#,1@. alleging that the property was public land and was neither claimed
nor occupied by any person and that he first entered upon and began cultivating the same
in his favor! Thus, he has obtained a Aree 4atent on the said lot and another parcel of land,
lot no 1(,=#=, was also registered under his name!
,eanwhile, Kregorio again e/ecuted a >eed of 1bsolute $ale over the two lots in favor
of Naciansino ontuyan! 2e then e/ecuted a -eal 8state ,ortgage over lot no 1#,1@. in
favor of >evelopment an* of the 4hilippines :>4; as a security for a loan! $hortly
thereafter, Naciansino and spouse has left the 4hilippines and resided in the C$!
5hen the spouses arrived in the 4hilippines to redeem their property from >4, they later
on discovered that it was tenanted by 8ngr! )eyson, on of the late )ourdes )eyson0s
Iss8e% 5hether or not Kregorio ontuyan acted in bad faith when he applied for free
patent for the same parcels of land!
Ges, record show that at the time when Kregorio applied for free patent, he was
living with his daughter, Livencia! Thus, Kregorio must have *nown that at the time
when he applied, the subject lots were already sold by his daughter! Aurthermore, records
also show that he sold twice the lot no 1#,1@. to plaintiff appellants! The first was in
19#6 and the other was in 19+.! 4laintiff3appellants offered no reasonable e/planation
why Kregorio have to sell it twice! These are badges of bad faith which affect the validity
of the title of Kregorio over the subject lots!
%onsidering that )ourdes )eyson was in actual possession of the property, the
respondents cannot claim that they were in good faith when Kregorio allegedly sold the
property to them!
12. K$"$ v! $1NT"1K7 K!-! No! 1@@=.6, 7ctober =+, =..(
>eceased spouses ?ose %! Mulueta and $oledad -amos obtained various loans from
defendant K$"$ for the period $eptember, 19@6 to 7ctober, 19@# in the total amount of
4(,11#,...!.. secured by real estate mortgages over parcels of land covered by T%T
Nos! =61.@, (#1## and @.(6@!
The Muluetas failed to pay their loans to defendant K$"$ and the latter foreclosed the
real estate mortgages dated $eptember =@, 19@6, ,arch 6, 19@#, 1pril 4, 19@# and
7ctober 1@, 19@#! 7n 1ugust14, 19#4, the mortgaged properties were sold at public
auction by defendant K$"$ submitting a bid price of 4@, ==9,9=#!+4! Not all lots covered
by the mortgaged titles,however, were sold! Ninety3one :91; lots were e/pressly e/cluded
from the auction since the lots were sufficient to pay for all the mortgage debts! 1
%ertificate of $ale was issued by then 4rovincial $heriff Nicanor >! $alaysay!
7n November =@,19#@, an 1ffidavit of %onsolidation of 7wnership was e/ecuted by
defendant K$"$ over Mulueta0s lots, including the lots, which as earlier stated, were
already e/cluded from the foreclosure! 7n ,arch 6, 19+., defendant K$"$ sold the
foreclosed properties to Gor*stown >evelopment %orporation which sale was
disapproved by the 7ffice of the 4resident of the 4hilippines! The sold properties were
returned to defendant K$"$! The -egister of >eeds of -i'al canceled the land titles issued
to Gor*stown >evelopment %orporation! 7n ?uly =, 19+., T%T No! =(@@= was issued
cancelling T%T No! =19=6< T%T No! =(@@( cancelled T%T No! =19=@< and T%T
No!=(@@4 cancelling T%T No! =19=4, all in the name of defendant K$"$!
1fter defendant K$"$ had re3acquired the properties sold to Gor*stown >evelopment
%orporation, it began disposing the foreclosed lots including the e/cluded ones! 7n 1pril
#, 199.,-epresentative 8duardo $antiago and then plaintiff 1ntonio Lic Mulueta e/ecuted
an agreement whereby Mulueta transferred all his rights and interests over the e/cluded
lots! 4laintiff 8duardo $antiago0s lawyer, 1tty! 5enceslao ! Trinidad, wrote a demand
letter dated ,ay 11, 19+9 to defendant K$"$ as*ing for the return of the eighty3one :+1;
e/cluded lots! 7n ,ay #, 199., 1ntonio Lic Mulueta, represented by 8duardo ,!
$antiago, filed with the -egional Trial %ourt :-T%; of 4asig %ity, ranch#1, and a
complaint for reconveyance of real estate against the K$"$!
$pouses 1lfeoand Nenita 8scasa, ,anuel """ and $ylvia K! Crbano, and ,arciana 4!
Kon'ales and the heirs of ,amerto Kon'ales moved to be included as intervenors and
filed their respective answers in intervention! $ubsequently, the petitioner, as defendant
therein, filed its answer alleging inter alia that the action was barred by the statute of
limitations andHor laches and that the complaint stated no cause of action! $ubsequently,
Mulueta was substituted by $antiago as the plaintiff in the complaint a quo! Cpon the
death of $antiago on ,arch 6, 1996, he was substituted by his widow, -osario 8nrique'
Lda! >e $antiago, as the plaintiff! 1fter due trial, the -T% rendered judgment against the
petitioner ordering it to reconvey to the respondent, -osario 8nrique' Lda! >e $antiago,
in substitution of her deceased husband 8duardo, the seventy3eight lots e/cluded from the
foreclosure sale!
:1; 5hether or not the petitioner acted in bad faith in consolidating ownership and
causing the issuance of titles in its name over the subject lots, notwithstanding that these
were e/pressly e/cluded from the foreclosure sale!
:=; 5hether or not 4etitioner0s NK$"$O defend on prescription is tenable!
#1rs. Iss8e%
Pe.1.1o2er A-.e7 12 (+7 #+1.4 >ES.
The acts of defendant3appellant K$"$ in concealing from the Muluetas Nthe
respondent0s predecessors3in3interestO the e/istence of these lots, in failing to notify or
apprise the spouses Mulueta about the e/cluded lots from the time it consolidated its titles
on their foreclosed properties in 19#@, in failing to inform them when it entered into a
contract of sale of the foreclosed properties to Gor*stown >evelopment %orporation in
19+. as well as when the said sale was revo*ed by then 4resident Aerdinand 8! ,arcos
during the same year demonstrated a clear effort on its part to defraud the spouses
Mulueta and appropriate for itself the subject properties! 8ven if titles over the lots had
been issued in the name of the defendant3appellant, still it could not legally claim
ownership and absolute dominion over them because indefeasibility of title under the
Torrens system does not attach to titles secured by fraud or misrepresentation! The fraud
committed by defendant3appellant in the form of concealment of the e/istence of said lots
and failure to return the same to the real owners after their e/clusion from the foreclosure
sale made defendant3appellant holders in bad faith! "t is well3settled that a holder in bad
faith of a certificate of title is not entitled to the protection of the law for the law cannot
be used as a shield for fraud!
The %ourt agrees with the findings and conclusion of the trial court and the %1! The
petitioner is not an ordinary mortgagee! "t is a government financial institution and,li*e
ban*s, is e/pected to e/ercise greater care and prudence in its dealings,including those
involving registered lands!
Se-o27 Iss8e%
N7! 7n the issue of prescription, generally, an action for reconveyance of real property
based on fraud prescribes in four years from the discovery of fraud< such discovery is
deemed to have ta*en place upon the issuance of the certificate of title over the property!
-egistration of real property is a constructive notice to all persons and, thus, the four3year
period shall be counted therefrom! 7n the other hand, 1rticle14@6 of the %ivil %ode
1rt! 14@6! "f property is acquired through mista*e 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!
1n action for reconveyance based on implied or constructive trust prescribes in ten
years from the alleged fraudulent registration or date of issuance of the certificate of title
over the property! The petitioner0s defense of prescription is untenable! 1s held by the
%1, the general rule that the discovery of fraud is deemed to have ta*en place upon the
registration of real property because it is Dconsidered a constructive notice to all personsF
doesnot apply in this case!
The %1 correctly cited the cases of 1dille v! %ourt of 1ppeals and $amonte v! %ourt
of 1ppeals, where this %ourt rec*oned the prescriptive period for the filing of the action
for reconveyance based on implied trust from the actual discovery of fraud!
%ontrary to its claim, the petitioner unarguably had the legal duty to return the
subject lots to the Muluetas! The petitioner0s attempts to justify its omission by insisting
that it had no such duty under the mortgage contract is obviously clutching at straw!
1rticle == of the %ivil %ode e/plicitly provides that Devery person who,through an act of
performance by another, or any other means, acquires or comes into possession of
something at the e/pense of the latter without just or legal ground,shall return the same to
528-8A7-8, the petition is >8N"8> for lac* of merit! The assailed >ecision
dated Aebruary ==, =..= and -esolution dated $eptember @, =..= of the %ourt of 1ppeals
in %13K!-! %L No! 6=(.9 are 1AA"-,8>"N T7T7! %osts against the petitioner
1. ?4em+21 vs 'e1rs o5 $r1217+7
%ynthia Phemani here is the registered owner of )ot 1.# which was purchased from ?ose
4ena! 2owever, heirs of 1nastacio Trinidad herein are claiming ownership and allege that
their predecessors in interest have openly, publicly, peacefully and adversely possessed
said subject land in the concept of an owner since 19@.
efore all of these controversies arose, it must be noted that the land in dispute has
already been decided upon in a previous case which involved ?ose 4ena! )ot No!
1.#constituted a part of )ot (@@ before! $uch land :)ot (@@ inclusive of )ot No! 1.#;
was sold to ?ose 4ena! 4ena requested the o) :ureauof )ands; to adjust the area of the
lot awarded to him but the o) denied such request since it stated that it belonged to the
7 The 7ffice of the 4resident however decided and held that theentire area of )ot (@@
belonged to 4ena and not to the government!

7 ,endo'a :another third party; filed a special action for certiorati claiming that he was
denied due process when the 7ffice of the 4resident decided to award the lot to 4ena! 2e
asserted ownership over them on the strength of a ,iscellaneous $ales 1pplication!

7 This case was elevated to the $upreme %ourt which was decided upon in favor of 4ena!
1t present, despite the decision over )ot 1.# in the past wereproclaimed, the heirs of
Trinidad are now claimingownership over said lot and state that the have beenpossessing
it since 19@.
They further claim that they applied for a ,iscellaneous $ales 1pplication over
the land which was approved by the o)!
The heirs of 4ena motioned to dismiss the case alleging that thepredecessors in interest
were mere Binformal settlersB who had been allowed by ,endo'a :the former adverse
claimant to the land; to occupy it and that since there was already a decision in the
previous case, that this was res judicata!
"n their answer, respondents claim that they are not barred since they were not parties to
the case and there is no identity of causes of action! The -T% denied the motion to
dismiss! They filed a petition for certiorari to the %1 which held that certiorariis not the
proper remedy and that there is no re judicata!
:1; 5hether or not a petition for certiorari under -ule 6@ was the proper remedy in
assailing the order of the -T% in denying the motion to dismiss!
:=; 5hether or not there is res judicata
The filing of petition for certiorari is proper! "t has been settled that an order denying a
motion to dismiss is an interlocutory order which neither terminates nor disposes a case!
1s such, the general rule is that an order denying a motion to dismiss cannot be
questioned in a certiorari case!
7 ut there are e/ceptions to this general rule! "t is allowed when the ground is
improper venue, lac* of jurisdiction or res judicata as in the case at bar
There is no res judicata in this case since there is no identity of parties and causes of
action! -es ?udicata literally means a thing judicially acted upon or decided< a thing
settled by judgment! "t is said that there is res judicata when the ff! requisites concur9

7 Aormer judgment is final

7 "t is rendered by a court having jurisdiction over the subject matter and the parties
7 "t is a judgment or an order on the merits
7 There is between the first and the second actions
6identity of parties, subject matter and causes of action!
The cause of action in the first case was the alleged grave abuse of discretion of the
7ffice of the 4resident in awarding the lands to 4ena and in the second, the basis is on
their adverse possession of the land in the concept of an owner for over 4. years and the
alleged fraudulent issuance of a patent and certificate of title to 4ena!
7 The parties in the two cases have their own rights and interests in relation to the subject
matter in litigation!
1ccording to 4>1@=9, a person deprived of his land through actual fraud may institute
an action to reopen or review a decree of registration within one year from entry of such
"n this case, the patent was issued in favor of 4ena on $ept=., 199( and the filing for
review of decree was instituted on ?anuary =#, 1994 or well within the prescribed one
year period!
7 1lso, under the petitioners name in the title, a Notice of )is 4endens, it cannot be said
that petitioner is an innocent purchaser for value as well aware of respondents claim over
the property!
7 8ven if they filed it after = year, they may still file an action based on an implied trust
which prescribes in ten years from the date of the issuance of the certificate of title over
the property!

Cnder the circumstances, it would be more in *eeping with the standard of fairness to
have a full blown trial where the evidentiary matters are thrashed out
14. Ros+r1o vs CA