ANTONIA TORRES, assisted by her husband, ANGELO TORRES; and EMETERIA

BARING, petitioners, vs. COURT OF APPEALS and MANUEL TORRES,respondents.

DECISION
PANGANIBAN, J.:
Courts may not extricate parties from the necessary consequences of their acts. That the terms of a
contract turn out to be financially disadvantageous to them will not relieve them of their obligations
therein. The lack of an inventory of real property will not ipso facto release the contracting partners from
their respective obligations to each other arising from acts executed in accordance with their agreement.
The Case

The Petition for Review on Certiorari before us assails the March 5, 1998 Decision [1] Second
Division of the Court of Appeals [2] (CA) in CA-GR CV No. 42378 and its June 25, 1998 Resolution denying
reconsideration. The assailed Decision affirmed the ruling of the Regional Trial Court (RTC) of Cebu City
in Civil Case No. R-21208, which disposed as follows:
WHEREFORE, for all the foregoing considerations, the Court, finding for the defendant and against the
plaintiffs, orders the dismissal of the plaintiffs complaint. The counterclaims of the defendant are likewise
ordered dismissed. No pronouncement as to costs.[3]
The Facts

Sisters Antonia Torres and Emeteria Baring, herein petitioners, entered into a "joint venture
agreement" with Respondent Manuel Torres for the development of a parcel of land into a
subdivision.Pursuant to the contract, they executed a Deed of Sale covering the said parcel of land in
favor of respondent, who then had it registered in his name. By mortgaging the property, respondent
obtained from Equitable Bank a loan of P40,000 which, under the Joint Venture Agreement, was to be
used for the development of the subdivision. [4] All three of them also agreed to share the proceeds from
the sale of the subdivided lots.
The project did not push through, and the land was subsequently foreclosed by the bank.
According to petitioners, the project failed because of respondents lack of funds or means and skills.
They add that respondent used the loan not for the development of the subdivision, but in furtherance of
his own company, Universal Umbrella Company.
On the other hand, respondent alleged that he used the loan to implement the Agreement. With the
said amount, he was able to effect the survey and the subdivision of the lots. He secured the Lapu Lapu
City Councils approval of the subdivision project which he advertised in a local newspaper. He also
caused the construction of roads, curbs and gutters. Likewise, he entered into a contract with an
engineering firm for the building of sixty low-cost housing units and actually even set up a model house on
one of the subdivision lots. He did all of these for a total expense of P85,000.
Respondent claimed that the subdivision project failed, however, because petitioners and their
relatives had separately caused the annotations of adverse claims on the title to the land, which
eventually scared away prospective buyers. Despite his requests, petitioners refused to cause the
clearing of the claims, thereby forcing him to give up on the project. [5]

Subsequently, petitioners filed a criminal case for estafa against respondent and his wife, who were
however acquitted. Thereafter, they filed the present civil case which, upon respondent's motion, was
later dismissed by the trial court in an Order dated September 6, 1982. On appeal, however, the appellate
court remanded the case for further proceedings. Thereafter, the RTC issued its assailed Decision, which,
as earlier stated, was affirmed by the CA.
Hence, this Petition.[6]
Ruling of the Court of Appeals

In affirming the trial court, the Court of Appeals held that petitioners and respondent had formed a
partnership for the development of the subdivision. Thus, they must bear the loss suffered by the
partnership in the same proportion as their share in the profits stipulated in the contract. Disagreeing with
the trial courts pronouncement that losses as well as profits in a joint venture should be distributed
equally,[7] the CA invoked Article 1797 of the Civil Code which provides:
Article 1797 - The losses and profits shall be distributed in conformity with the agreement. If only the
share of each partner in the profits has been agreed upon, the share of each in the losses shall be in the
same proportion.
The CA elucidated further:
In the absence of stipulation, the share of each partner in the profits and losses shall be in proportion to
what he may have contributed, but the industrial partner shall not be liable for the losses. As for the
profits, the industrial partner shall receive such share as may be just and equitable under the
circumstances. If besides his services he has contributed capital, he shall also receive a share in the
profits in proportion to his capital.
The Issue

Petitioners impute to the Court of Appeals the following error:

x x x [The] Court of Appeals erred in concluding that the transaction x x x between the petitioners and
respondent was that of a joint venture/partnership, ignoring outright the provision of Article 1769, and
other related provisions of the Civil Code of the Philippines. [8]
The Courts Ruling

The Petition is bereft of merit.

Main Issue: Existence of a Partnership

Petitioners deny having formed a partnership with respondent. They contend that the Joint Venture
Agreement and the earlier Deed of Sale, both of which were the bases of the appellate courts finding of a
partnership, were void.
In the same breath, however, they assert that under those very same contracts, respondent is liable
for his failure to implement the project. Because the agreement entitled them to receive 60 percent of the
proceeds from the sale of the subdivision lots, they pray that respondent pay them damages equivalent to
60 percent of the value of the property.[9]
The pertinent portions of the Joint Venture Agreement read as follows:

KNOW ALL MEN BY THESE PRESENTS:

This AGREEMENT, is made and entered into at Cebu City, Philippines, this 5th day of March, 1969, by
and between MR. MANUEL R. TORRES, x x x the FIRST PARTY, likewise, MRS. ANTONIA B. TORRES,
and MISS EMETERIA BARING, x x x the SECOND PARTY:
W I T N E S S E T H:
That, whereas, the SECOND PARTY, voluntarily offered the FIRST PARTY, this property located at LapuLapu City, Island of Mactan, under Lot No. 1368 covering TCT No. T-0184 with a total area of 17,009
square meters, to be sub-divided by the FIRST PARTY;
Whereas, the FIRST PARTY had given the SECOND PARTY, the sum of: TWENTY THOUSAND
(P20,000.00) Pesos, Philippine Currency, upon the execution of this contract for the property entrusted by
the SECOND PARTY, for sub-division projects and development purposes;
NOW THEREFORE, for and in consideration of the above covenants and promises herein contained the
respective parties hereto do hereby stipulate and agree as follows:
ONE: That the SECOND PARTY signed an absolute Deed of Sale x x x dated March 5, 1969, in the
amount of TWENTY FIVE THOUSAND FIVE HUNDRED THIRTEEN & FIFTY CTVS. (P25,513.50)
Philippine Currency, for 1,700 square meters at ONE [PESO] & FIFTY CTVS. (P1.50) Philippine
Currency, in favor of the FIRST PARTY, but the SECOND PARTY did not actually receive the payment.
SECOND: That the SECOND PARTY, had received from the FIRST PARTY, the necessary amount of
TWENTY THOUSAND (P20,000.00) pesos, Philippine currency, for their personal obligations and this
particular amount will serve as an advance payment from the FIRST PARTY for the property mentioned to
be sub-divided and to be deducted from the sales.
THIRD: That the FIRST PARTY, will not collect from the SECOND PARTY, the interest and the principal
amount involving the amount of TWENTY THOUSAND (P20,000.00) Pesos, Philippine Currency, until the
sub-division project is terminated and ready for sale to any interested parties, and the amount of
TWENTY THOUSAND (P20,000.00) pesos, Philippine currency, will be deducted accordingly.
FOURTH: That all general expense[s] and all cost[s] involved in the sub-division project should be paid by
the FIRST PARTY, exclusively and all the expenses will not be deducted from the sales after the
development of the sub-division project.
FIFTH: That the sales of the sub-divided lots will be divided into SIXTY PERCENTUM 60% for the
SECOND PARTY and FORTY PERCENTUM 40% for the FIRST PARTY, and additional profits or
whatever income deriving from the sales will be divided equally according to the x x x percentage [agreed
upon] by both parties.
SIXTH: That the intended sub-division project of the property involved will start the work and all
improvements upon the adjacent lots will be negotiated in both parties['] favor and all sales shall [be]
decided by both parties.
SEVENTH: That the SECOND PARTIES, should be given an option to get back the property mentioned
provided the amount of TWENTY THOUSAND (P20,000.00) Pesos, Philippine Currency, borrowed by the
SECOND PARTY, will be paid in full to the FIRST PARTY, including all necessary improvements spent by
the FIRST PARTY, and the FIRST PARTY will be given a grace period to turnover the property mentioned
above.

That this AGREEMENT shall be binding and obligatory to the parties who executed same freely and
voluntarily for the uses and purposes therein stated. [10]
A reading of the terms embodied in the Agreement indubitably shows the existence of a partnership
pursuant to Article 1767 of the Civil Code, which provides:
ART. 1767. By the contract of partnership two or more persons bind themselves to contribute money,
property, or industry to a common fund, with the intention of dividing the profits among themselves.
Under the above-quoted Agreement, petitioners would contribute property to the partnership in the
form of land which was to be developed into a subdivision; while respondent would give, in addition to his
industry, the amount needed for general expenses and other costs. Furthermore, the income from the
said project would be divided according to the stipulated percentage. Clearly, the contract manifested the
intention of the parties to form a partnership.[11]
It should be stressed that the parties implemented the contract. Thus, petitioners transferred the title
to the land to facilitate its use in the name of the respondent. On the other hand, respondent caused the
subject land to be mortgaged, the proceeds of which were used for the survey and the subdivision of the
land. As noted earlier, he developed the roads, the curbs and the gutters of the subdivision and entered
into a contract to construct low-cost housing units on the property.
Respondents actions clearly belie petitioners contention that he made no contribution to the
partnership. Under Article 1767 of the Civil Code, a partner may contribute not only money or property,
but also industry.
Petitioners Bound by Terms of Contract

Under Article 1315 of the Civil Code, contracts bind the parties not only to what has been expressly
stipulated, but also to all necessary consequences thereof, as follows:
ART. 1315. Contracts are perfected by mere consent, and from that moment the parties are bound not
only to the fulfillment of what has been expressly stipulated but also to all the consequences which,
according to their nature, may be in keeping with good faith, usage and law.
It is undisputed that petitioners are educated and are thus presumed to have understood the terms of
the contract they voluntarily signed. If it was not in consonance with their expectations, they should have
objected to it and insisted on the provisions they wanted.
Courts are not authorized to extricate parties from the necessary consequences of their acts, and the
fact that the contractual stipulations may turn out to be financially disadvantageous will not relieve parties
thereto of their obligations. They cannot now disavow the relationship formed from such agreement due to
their supposed misunderstanding of its terms.
Alleged Nullity of the Partnership Agreement

Petitioners argue that the Joint Venture Agreement is void under Article 1773 of the Civil Code, which
provides:
ART. 1773. A contract of partnership is void, whenever immovable property is contributed thereto, if an
inventory of said property is not made, signed by the parties, and attached to the public instrument.
They contend that since the parties did not make, sign or attach to the public instrument an inventory
of the real property contributed, the partnership is void.

We clarify. First, Article 1773 was intended primarily to protect third persons. Thus, the eminent
Arturo M. Tolentino states that under the aforecited provision which is a complement of Article 1771, [12]the
execution of a public instrument would be useless if there is no inventory of the property contributed,
because without its designation and description, they cannot be subject to inscription in the Registry of
Property, and their contribution cannot prejudice third persons. This will result in fraud to those who
contract with the partnership in the belief [in] the efficacy of the guaranty in which the immovables may
consist. Thus, the contract is declared void by the law when no such inventory is made. The case at bar
does not involve third parties who may be prejudiced.
Second, petitioners themselves invoke the allegedly void contract as basis for their claim that
respondent should pay them 60 percent of the value of the property. [13] They cannot in one breath deny
the contract and in another recognize it, depending on what momentarily suits their purpose. Parties
cannot adopt inconsistent positions in regard to a contract and courts will not tolerate, much less approve,
such practice.
In short, the alleged nullity of the partnership will not prevent courts from considering the Joint
Venture Agreement an ordinary contract from which the parties rights and obligations to each other may
be inferred and enforced.
Partnership Agreement Not the Result of an Earlier Illegal Contract

Petitioners also contend that the Joint Venture Agreement is void under Article 1422 [14] of the Civil
Code, because it is the direct result of an earlier illegal contract, which was for the sale of the land without
valid consideration.
This argument is puerile. The Joint Venture Agreement clearly states that the consideration for the
sale was the expectation of profits from the subdivision project. Its first stipulation states that petitioners
did not actually receive payment for the parcel of land sold to respondent. Consideration, more properly
denominated as cause, can take different forms, such as the prestation or promise of a thing or service by
another.[15]
In this case, the cause of the contract of sale consisted not in the stated peso value of the land, but
in the expectation of profits from the subdivision project, for which the land was intended to be used. As
explained by the trial court, the land was in effect given to the partnership as [petitioners] participation
therein. x x x There was therefore a consideration for the sale, the [petitioners] acting in the expectation
that, should the venture come into fruition, they [would] get sixty percent of the net profits.
Liability of the Parties

Claiming that respondent was solely responsible for the failure of the subdivision project, petitioners
maintain that he should be made to pay damages equivalent to 60 percent of the value of the property,
which was their share in the profits under the Joint Venture Agreement.
We are not persuaded. True, the Court of Appeals held that petitioners acts were not the cause of
the failure of the project.[16] But it also ruled that neither was respondent responsible therefor.[17] In
imputing the blame solely to him, petitioners failed to give any reason why we should disregard the factual
findings of the appellate court relieving him of fault. Verily, factual issues cannot be resolved in a petition
for review under Rule 45, as in this case. Petitioners have not alleged, not to say shown, that their Petition
constitutes one of the exceptions to this doctrine. [18] Accordingly, we find no reversible error in the CA's
ruling that petitioners are not entitled to damages.
WHEREFORE, the Petition is hereby DENIED and the challenged Decision AFFIRMED. Costs
against petitioners.

SO ORDERED.

MIGUEL CUENCO, Substituted by MARIETTA C. CUYEGKENG, petitioner, vs. CONCEPCION

CUENCO Vda. DE MANGUERRA, respondent.
DECISION
PANGANIBAN, J.:
Inasmuch as the facts indubitably and eloquently show an implied trust in favor of respondent, the
Court of Appeals did not err in affirming the Decision of the Regional Trial Court ordering petitioner to
convey the subject property to her. That Decision satisfied the demands of justice and prevented unjust
enrichment.
The Case
Before us is a Petition for Review [1] under Rule 45 of the Rules of Court, challenging the August 22,
2001 Decision[2] of the Court of Appeals (CA) in CA-GR CV No. 54852. The assailed Decision disposed
as follows:
WHEREFORE, the decision appealed from is AFFIRMED.[3]
On the other hand, the Regional Trial Court (RTC) Decision affirmed by the CA disposed as follows:
WHEREFORE, considering that this action is essentially one for reconveyance or enforcement of a trust,
judgment is hereby rendered ordering the substituted defendant Marietta Cuenco Cuyegkeng to reconvey
or transfer, in a duly registrable public instrument, Lot No 903-A-6 under TCT No. 113781 of the Registry
of Deeds of Cebu City, of the Banilad Estate with an area of 834 square meters, in favor of plaintiff
Concepcion Cuenco Vda. De Manguerra; or should the substituted defendant, for one reason or another,
fail to execute the necessary instrument once the decision becomes final, the Clerk of Court of this Court
(RTC) is hereby instructed, in accordance with the Rules of Court, to prepare and execute the appropriate
and requisite conveyance and instrument in favor of herein plaintiff which, in either case, shall be
registered with the Office of the Register of Deeds of Cebu City.
Without costs in this instance.[4]
The Facts
The facts were summarized by the appellate court as follows:
On September 19, 1970, the [respondent] filed the initiatory complaint herein for specific performance
against her uncle [Petitioner] Miguel Cuenco which averred, inter alia that her father, the late Don Mariano
Jesus Cuenco (who became Senator) and said [petitioner] formed the Cuenco and Cuenco Law Offices;
that on or around August 4, 1931, the Cuenco and Cuenco Law Offices served as lawyers in two (2)
cases entitled Valeriano Solon versus Zoilo Solon (Civil Case 9037) and Valeriano Solon versus Apolonia
Solon (Civil Case 9040) involving a dispute among relatives over ownership of lot 903 of the Banilad
Estate which is near the Cebu Provincial Capitol; that records of said cases indicate the name of zthe
[petitioner] alone as counsel of record, but in truth and in fact, the real lawyer behind the success of said
cases was the influential Don Mariano Jesus Cuenco; that after winning said cases, the awardees of Lot
903 subdivided said lot into three (3) parts as follows:

Lot 903-A: 5,000 [square meters]: Mariano Cuencos attorneys fees

Lot 903-B: 5,000 [square meters]: Miguel Cuencos attorneys fees
Lot 903-C: 54,000 [square meters]: Solons retention
That at the time of distribution of said three (3) lots in Cebu, Mariano Jesus Cuenco was actively
practicing law in Manila, and so he entrusted his share (Lot 903-A) to his brother law partner (the
[petitioner]); that on September 10, 1938, the [petitioner] was able to obtain in his own name a title for Lot
903-A (Transfer Certificate of Title [TCT] RT-6999 [T-21108]); that he was under the obligation to hold the
title in trust for his brother Marianos children by first marriage; that sometime in 1947, the Cuenco family
was anticipating Marianos second marriage, and so on February 1, 1947, they partitioned Lot 903-A into
six (6) sub-lots (Lots 903-A-1 to 903-A-6) to correspond to the six (6) children of Marianos first marriage
(Teresita, Manuel, Lourdes, Carmen, Consuelo, and Concepcion); that the [petitioner] did not object nor
oppose the partition plan; that on June 4, 1947, the [petitioner] executed four (4) deeds of donation in
favor of Marianos four (4) children: Teresita, Manuel, Lourdes, and Carmen, pursuant to the partition plan
(per notary documents 183, 184, 185, 186, Book III, Series 1947 of Cebu City Notary Public Candido
Vasquez); that on June 24, 1947, the [petitioner] executed the fifth deed of donation in favor of Marianos
fifth child Consuelo (per notary document 214, Book III, Series 1947 of Cebu City Notary Public Candido
Vasquez) (Exhibits 2 to 5); that said five (5) deeds of donation left out Marianos sixth child Concepcion
who later became the [respondent] in this case; that in 1949, [respondent] occupied and fenced a portion
of Lot 903-A-6 for taxation purposes (Exhibit F, Exhibit 6); that she also paid the taxes thereon (Exhibit G);
that her father died on February 25, 1964 with a Last Will and Testament; that the pertinent portion of her
fathers Last Will and Testament bequeaths the lot.
near the Cebu provincial capitol, which were my attorneys fees from my clients, Victoria Rallos and Zoilo
Solon, respectively have already long been disposed of, and distributed by me, through my brother,
Miguel, to all my said children in the first marriage;
That on June 3, 1966, the [petitioner] wrote a letter petitioning the Register of Deeds of Cebu to transfer
Lot 903-A-6 to his name on the ground that Lot 903-A-6 is a portion of Lot 903-A; that on April 6, 1967,
the [respondent] requested the Register of Deeds to annotate an affidavit of adverse claim against the
[petitioners] TCT RT-6999 (T-21108) which covers Lot 903-A; that on June 3, 1967, the Register of Deeds
issued TCT 35275 covering Lot 903-A-6 in the name of the [petitioner] but carrying the earlier annotation
of adverse claim; that in 1969, the [petitioner] tore down the wire fence which the [respondent]
constructed on Lot 903-A-6 which compelled the latter to institute the instant complaint dated August 20,
1970 on September 19, 1970.
On December 5, 1970, the answer with counterclaim dated December 3, 1970 of [petitioner] Miguel
Cuenco was filed where he alleged that he was the absolute owner of Lot 903-A-6; that this lot was a
portion of Lot 903-A which in turn was part of Lot 903 which was the subject matter of litigation; that he
was alone in defending the cases involving Lot 903 without the participation of his brother Mariano
Cuenco; that he donated five (5) of the six (6) portions of Lot 903-A to the five (5) children of his brother
Mariano out of gratitude for the love and care they exhibited to him (Miguel) during the time of his long
sickness; that he did not give or donate any portion of the lot to the [respondent] because she never
visited him nor took care of him during his long sickness; that he became critically ill on February 11, 1946
and was confined at the Singians Clinic in Manila and then transferred to Cebu where he nearly died in
1946; that his wife Fara Remia Ledesma Cuenco had an operation on January 1951 and was confined at
the University of Santo Tomas Hospital and John Hopkins Hospital in the United States; that two of his
children died at the University of Santo Tomas Hospital in 1951 and 1952; and that his wife was blind for
many months due to malignant hypertension but [respondent] never remembered her nor did she
commiserate with him and his wife in their long period of sorrow.

[Petitioner] Miguel Cuenco took the witness stand as early as September 13, 1974. His self-conducted
direct examination lasted until 1985, the last one on November 22, 1985. Unfortunately, he died [5] before
he was able to submit himself for cross-examination and so his testimony had to be stricken off the
record. His only surviving daughter, Marietta Cuyegkeng, stood as the substitute [petitioner] in this case.
She testified that she purchased Lot 903-A-6 (the property subject matter of this case) from her late father
sometime in 1990 and constructed a house thereon in the same year; that she became aware of this case
because her late father used to commute to Cebu City to attend to this case; and that Lot 903-A-6 is in
her name per Transfer Certificate of Title #113781 of the Registry of Deeds for Cebu. [6]
Ruling of the Court of Appeals
The CA found respondents action not barred by res judicata, because there was no identity of
causes of action between the Petition for cancellation of adverse claim in L.R.C. Records 5988 and the
Complaint for specific performance to resolve the issue of ownership in Civil Case No. R-11891.
The appellate court further found no reason to disturb the findings of the trial court that respondent
has the legal right of ownership over lot 903-A-6. The CA ruled that the subject land is part of the
attorneys fees of Don Mariano Cuenco, predecessor-in-interest of [Respondent] Concepcion Cuenco vda.
de Manguerra and [petitioner] merely holds such property in trust for [her], his title there[to]
notwithstanding.
Finally, the CA held that the right of action of respondent has not yet prescribed as she was in
possession of the lot in dispute and the prescriptive period to file the case commences to run only from
the time she acquired knowledge of an adverse claim over [her] possession.
Hence, this Petition.[7]
The Issues
In her Memorandum, petitioner raises the following issues for our consideration:
I.
On question of law, the Court of Appeals failed to consider facts of substance and significance which,
if considered, will show that the preponderance of evidence is in favor of the petitioner.
II.
On question of law, the Court of Appeals failed to appreciate the proposition that, contrary to the
position taken by the trial court, no constructive or implied trust exists between the parties, and
neither is the action one for reconveyance based upon a constructive or implied trust.
III.
On question of law, the Court of Appeals erred in not finding that even where implied trust is admitted
to exist the respondents action for relief is barred by laches and prescription.
IV.
On question of law, the trial court and the appellate court erred in expunging from the records the
testimony of Miguel Cuenco.[8]

This Courts Ruling

The Petition has no merit.
First Issue:
Evaluation of Evidence
Petitioner asks us to appreciate and weigh the evidence offered in support of the finding that Lot
903-A-6 constituted a part of Mariano Cuencos share in the attorneys fees. In other words, she seeks to
involve us in a reevaluation of the veracity and probative value of the evidence submitted to the lower
court. What she wants us to do is contrary to the dictates of Rule 45 that only questions of law may be
raised and resolved in a petition for review. Absent any whimsical or capricious exercise of judgment, and
unless the lack of any basis for the conclusions made by the lower courts be amply demonstrated, the
Supreme Court will not disturb such factual findings. [9]
As a rule, findings of fact of the Court of Appeals affirming those of the trial court are binding and
conclusive. Normally, such factual findings are not disturbed by this Court, to which only questions of law
may be raised in an appeal by certiorari. [10] This Court has consistently ruled that these questions must
involve no examination of the probative value of the evidence presented by the litigants or any of them.
[11]
Emphasizing the difference between the two types of question, it has explained that there is a question
of law in a given case when the doubt or difference arises as to what the law is pertaining to a certain
state of facts, and there is a question of fact when the doubt arises as the truth or the falsity of alleged
facts.[12]
Indeed, after going over the records of the present case, we are not inclined to disturb the factual
findings of the trial and the appellate courts, just because of the insistent claim of petitioner. His witnesses
allegedly testified that Civil Case No. 9040 involving Lot 903 had not been handled by Mariano for
defendants therein -- Apolonia Solon, Zoilo Solon, et al. It has sufficiently been proven, however, that
these defendants were represented by the Cuenco and Cuenco Law Office, composed of Partners
Mariano Cuenco and Miguel Cuenco.
Given as attorneys fees was one hectare of Lot 903, of which two five-thousand square meter
portions were identified as Lot 903-A and Lot 903-B. That only Miguel handled Civil Case No. 9040 does
not mean that he alone is entitled to the attorneys fees in the said cases. When a client employs the
services of a law firm, he does not employ the services of the lawyer who is assigned to personally handle
the case. Rather, he employs the entire law firm. [13] Being a partner in the law firm, Mariano -- like Miguel
-- was likewise entitled[14] to a share in the attorneys fees from the firms clients. Hence, the lower courts
finding that Lot 903-A was a part of Mariano Cuencos attorneys fees has ample support.
Second Issue:
Implied Trust
Petitioner then contends that no constructive or implied trust exists between the parties.
A trust is a legal relationship between one having an equitable ownership in a property and another
having legal title to it.[15]
Trust relations between parties may either be express or implied. [16] Express trusts are created by the
direct and positive acts of the parties, indicated through some writing, deed, will, or words evidencing an
intention to create a trust.[17] On the other hand, implied trusts are those that, without being express, are
deducible from the nature of the transaction as matters of intent[;] or which are superinduced on the

transaction by operation of law as a matter of equity, independently of the particular intention of the
parties. Implied trusts may either be resulting or constructive trusts, both coming into being by operation
of law.[18]
Resulting trusts are presumed to have been contemplated by the parties and are based on the
equitable doctrine that valuable consideration, not legal title, determines the equitable title or interest.
[19]
These trusts arise from the nature of or the circumstances involved in a transaction, [20] whereby legal
title becomes vested in one person, who is obligated in equity to hold that title for the benefit of another.
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.[21]
A review of the records shows that indeed there is an implied trust between the parties.
Although Lot 903-A was titled in Miguels name, the circumstances surrounding the acquisition and
the subsequent partial dispositions of this property eloquently speak of the intent that the equitable or
beneficial ownership of the property should belong to Mariano and his heirs.
First, Lot 903-A was one half of the one-hectare portion of Lot 903 given as attorneys fees by a client
of the law firm of Partners Miguel and Mariano Cuenco. It constituted the latters share in the attorneys
fees and thus equitably belonged to him, as correctly found by the CA. That Lot 903-A had been titled in
the name of Miguel gave rise to an implied trust between him and Mariano, specifically, the former holds
the property in trust for the latter. In the present case, it is of no moment that the implied trust arose from
the circumstance -- a share in the attorneys fees -- that does not categorically fall under Articles 1448 to
1456 of the Civil Code. The cases of implied trust enumerated therein does not exclude others
established by the general law of trust.[22]
Second, from the time it was titled in his name in 1938, [23] Lot 903-A remained undivided and
untouched[24] by Miguel. Only on February 3, 1947, did Lourdes Cuenco, [25] upon the instruction of
Mariano, have it surveyed and subdivided into six almost equal portions -- 903-A-1 to 903-A-6. Each
portion was specifically allocated to each of the six children of Mariano with his first wife. [26]
Third, Miguel readily surrendered his Certificate of Title [27] and interposed no objection[28] to the
subdivision and the allocation of the property to Marianos six children, including Concepcion.
Fourth, Marianos children, including Concepcion, [29] were the ones who shouldered the expenses
incurred for the subdivision of the property.
Fifth, after the subdivision of the property, Marianos children -- including Concepcion [30] -- took
possession of their respective portions thereof.
Sixth, the legal titles to five portions of the property were transferred via a gratuitous deed of
conveyance to Marianos five children, following the allocations specified in the subdivision plan prepared
for Lourdes Cuenco.[31]
With respect to Lot 903-A-6 in particular, the existence of Concepcions equitable ownership thereof
is bolstered, not just by the above circumstances, but also by the fact that respondent fenced the portion
allocated to her and planted trees thereon.[32]
More significantly, she also paid real property taxes on Lot 903-A-6 yearly, from 1956 until 1969 [33] -the year when she was dispossessed of the property. Although 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. [34] Such realty tax payments constitute proof that the holder has
a claim of title over the property.
Tellingly, Miguel started paying real property taxes on Lot 903-A-6 only on April 4, 1964, [35] after the
death of Mariano.[36] This fact shows that it was only in that year that he was emboldened to claim the
property as his own and to stop recognizing Marianos, and subsequently Concepcions, ownership rights
over it. It was only by then that the one who could have easily refuted his claim had already been silenced
by death. Such a situation cannot be permitted to arise, as will be explained below.
Estoppel
From the time Lot 903-A was subdivided and Marianos six children -- including Concepcion -- took
possession as owners of their respective portions, no whimper of protest from petitioner was heard until
1963. By his acts as well as by his omissions, Miguel led Mariano and the latters heirs, including
Concepcion, to believe that Petitioner Cuenco respected the ownership rights of respondent over Lot 903A-6. That Mariano acted and relied on Miguels tacit recognition of his ownership thereof is evident from
his will, executed in 1963, which states:
I hereby make it known and declare that x x x all properties which my first wife and I had brought to, or
acquired during our marriage, or which I had acquired during the years I was a widower including jewelry,
war damage compensation, and two other lots also located at Cebu City, one near the South-Western
University and the other near the Cebu provincial capitol, which were my attorneys fees from my
clients, Victoria Rallos and Zoilo Solon, respectively have already long been disposed of, and
distributed by me, through my brother, Miguel, to all my said six children in the first marriage.[37]
(emphasis supplied)
Indeed, as early as 1947, long before Mariano made his will in 1963, Lot 903-A -- situated along
Juana Osmea Extension, Kamputhaw, Cebu City,[38] near the Cebu Provincial Capitol -- had been
subdivided and distributed to his six children in his first marriage. Having induced him and his heirs to
believe that Lot 903-A-6 had already been distributed to Concepcion as her own, petitioner is estopped
from asserting the contrary and claiming ownership thereof.
The principle of estoppel in pais applies when -- by ones 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. [39]
Third Issue:
Laches
Petitioner claims that respondents action is already barred by laches.
We are not persuaded. 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. [40] In
the present case, respondent has persistently asserted her right to Lot 903-A-6 against petitioner.
Concepcion was in possession as owner of the property from 1949 to 1969. [41] When Miguel took
steps to have it separately titled in his name, despite the fact that she had the owners duplicate copy of
TCT No. RT-6999 -- the title covering the entire Lot 903-A -- she had her adverse claim annotated on the
title in 1967. When petitioner ousted her from her possession of the lot by tearing down her wire fence in

1969,[42] she commenced the present action on September 19, 1970, [43] to protect and assert her rights to
the property. We find that she cannot be held guilty of laches, as she did not sleep on her rights.
Fourth Issue:
Expunging of Testimony
Petitioner Cuyegkeng questions the expunging of the direct testimony of Miguel Cuenco.
Respondent points out that this issue was not raised before the CA. Neither had petitioner asked the trial
court to reconsider its Order expunging the testimony. Hence, this issue cannot for the first time be raised
at this point of the appeal. Issues, arguments and errors not adequately and seriously brought below
cannot be raised for the first time on appeal.[44] Basic considerations of due process impel this rule.[45]
WHEREFORE, the Petition is DENIED, and the assailed Decision AFFIRMED. Costs against
petitioner.
SO ORDERED.

Uy vs. Puzon
Case Digest
FACTS:
Puzon entered into a contract with the Republic of the Philippines for the construction of a road and 5
bridges. However,Puzon found difficulty in accomplishing both projects, so he established a partnership
with Uy as sub-contractor of the projectsfor f
inancial assistance and the profits shall be divided equally between them; the resulting partnership is UP
ConstructionCompany.
The partners agreed to contribute P50, 000 each as capital. However, Puzon failed to pay but promised to
contribute hisshare as soon as his application of loan with the PNB shall be approved. Uy gave Puzon
advance contribution of his share inpartnership for Puzon top pay his obligations with PNB.Uy was
entrusted with the management of the project since Puzon is busy with his other projects; whatever
expense Uy
may incur shall be considered part of his contribution. Upon approval of Puzons loan with t
he PNB, he gave Uy P60, 000 for
reimbursement of Uys contribution and Puzons contribution to the partnership capital.
To guarantee the payment of the loan,Puzon assigned to PNB all payments to be received on account of
the contracts with the Bureau of Public Highways for theconstruction; this was done without the
knowledge and consent of Uy.Financial demands of the project increased, thus, Uy called on Puzon to
place his capital contribution; Puzon failed to do
so. Uy thereafter sent letters of demand to which Puzon replied that hes not capable of putting additional
capital.
Puzon wroteUP Construction Company terminating their subcontract agreement.Uy was then not allowed
in the office of UP Construction Company and his authority to deal with BPH was revoked. Hence,he
instituted an action against Puzon seeking the dissolution of the partnership and payment of damages for
the violation ofthe latter of the terms of their partnership agreement.RTC found that Puzon failed to
contribute his share in the capital of the partnership and caused the failure of partnershipto realize
expected profits. The court ordered the dissolution of the partnership and Puzon to pay Uy a certain
sum. FrancoPuzon substituted Bartolome Puzon on the appeal of the case before the Supreme Court.
ISSUE/S:
W/N the amount of money ordered by the trial court for the failure to contribute his share in the capital of
thepartnership is proper.
RULING:

The award of P200,000.00 as his share in the unrealized profits of the partnership is proper. Under Article
2200 of the CivilCode, indemnification for damages shall comprehend not only the value of the loss
suffered, but also that of the profits whichthe obligee failed to obtain. In other words lucrum cessans is
also a basis for indemnification. There is no doubt Uy failed tomake profits because of Puzon's breach of
contract. The partnership showed some profits even though the profit and lossstatement showed net loss;
it may be due to error in accounting.Had the appellant not been remiss in his obligations as partner and
as prime contractor of the construction projects inquestion as he was bound to perform pursuant to the
partnership and subcontract agreements, and considering the fact thatthe total contract amount of these
two projects is P2,327,335.76, it is reasonable to expect that the partnership would haveearned much
more than the P334,255.61 We have hereinabove indicated. The award, therefore, made by the trial court
of theamount of P200,000.00, as compensatory damages, is not speculative, but based on reasonable
estimate.
As cited in
Moran vs. CA
:
The rule is, when a partner who has undertaken to contribute a sum of money fails to do so, he becomes
a debtor of the partnershipfor whatever he may have promised to contribute (Art. 1786, Civil Code) and for interests
and damages from the time he should havecomplied with his obligation (Art. 1788, Civil Code). Thus in
Uy v. Puzo
n (79 SCRA 598), which interpreted Art. 2200 of the Civil Code of thePhilippines, we allowed a total of P200,000.00
compensatory damages in favor of the appellee because the appellant therein was remiss inhis
obligations as a partner and as prime contractor of the construction projects in question. This case was
decided on a particular set offacts. We awarded compensatory damages in the
Uy
case because there was a finding that the constructing business is a profitable oneand that the UP construction
company derived some profits from its contractors in the construction of roads and bridges despite its
deficient capital. Besides, there was evidence to show that the partnership made some profits during the
periods from July 2
, 1956 toDecember 31, 1957 and from January 1, 1958 up to September 30, 1959. The profits on two government
contracts worth P2,327,335.76were not speculative. In the instant case, there is no evidence whatsoever that
the partnership between the petitioner and the privaterespondent would have been a profitable venture. In
fact, it was a failure doomed from the start. There is therefore no basis for the awardof speculative
damages in favor of the private respondent.Furthermore, in the
Uy
case, only Puzon failed to give his full contribution while Uy
contributed much more than what was expectedof him.