Académique Documents
Professionnel Documents
Culture Documents
L-22825
Before the delivery to the purchasers of the hacienda thus sold, Eusebio R.
de Luzuriaga renounced all his rights under the contract of January 29,
1920, in favor of Messrs. Venancio Concepcion and Phil. C. Whitaker. This
gave rise to the fact that on July 17, 1920, Venancio Concepcion and Phil.
C. Whitaker and the herein defendant executed before Mr. Antonio Sanz, a
notary public in and for the City of Manila, another deed of absolute sale of
the said "Palma" Estate for the amount of P1,695,961.90, of which the
vendor received at the time of executing the deed the amount of
P945,861.90, and the balance was payable by installments in the form and
manner stipulated in the contract. The purchasers guaranteed the unpaid
balance of the purchase price by a first and special mortgage in favor of
the vendor upon the hacienda and the central with all the improvements,
buildings, machineries, and appurtenances then existing on the
said hacienda.
Clause 6 of the deed of July 17, 1920, contains the following stipulations:
6. Messrs. Phil. C. Whitaker and Venancio Concepcion hereby state
that they are aware of the contract that Mr. Salvador Serra has with
the proprietors of the "San Isidro" Central for the operation and
exploitation of a railroad line about 10 kilometers long from the
"Palma" and "San Isidro" centrals to the place known as
"Nandong;" and hereby obligate themselves to respect the said
contract and subrogate themselves into the rights and obligations
thereunder. They also bind themselves to comply with all the
contracts heretofore entered by the vendor with the customers,
coparceners on shares and employees.
Afterwards, on January 8, 1921, Venancio Concepcion and Phil. C. Whitaker
bought from the plaintiffs the one-half of the railroad line pertaining to the
latter, executing therefor the document Exhibit 5. The price of this sale was
P237,722.15, excluding any amount which the defendant might be owing
to the plaintiffs. Of the purchase price, Venancio Concepcion and Phil. C.
Whitaker paid the sum of P47,544.43 only. In the deed Exhibit 5, the
plaintiffs and Concepcion and Whitaker agreed, among other things, that
the partnership "Palma" and "San Isidro," formed by the agreement of
February 1, 1919, between Serra, Lazaro Mota, now deceased, and Juan J.
Vidaurrazaga for himself and in behalf of his brother, Felix and Dionisio
Vidaurrazaga, should be dissolved upon the execution of this contract, and
that the said partnership agreement should be totally cancelled and of no
force and effect whatever.
So it results that the "Hacienda Palma," with the entire railroad, the
subject-matter of the contract of partnership between plaintiffs and
defendant, became the property of Whitaker and Concepcion. Phil. C.
Whitaker and Venancio Concepcion having failed to pay to the defendant a
part of the purchase price, that is, P750,000, the vendor, the herein
defendant, foreclosed the mortgage upon the said hacienda, which was
adjudicated to him at the public sale held by the sheriff for the amount of
P500,000, and the defendant put in possession thereof, including what was
planted at the time, together with all the improvements made by Messrs.
Phil. C. Whitaker and Venancio Concepcion.
Since the defendant Salvador Serra failed to pay one-half of the amount
expended by the plaintiffs upon the construction of the railroad line, that
is, P113,046.46, as well as Phil. C. Whitaker and Venancio Concepcion, the
plaintiffs instituted the present action praying: (1) That the deed of
February 1, 1919, be declared valid and binding; (2) that after the
execution of the said document the defendant improved economically so
as to be able to pay the plaintiffs the amount owed, but that he refused to
pay either in part or in whole the said amount notwithstanding the several
demands made on him for the purpose; and (3) that the defendant be
sentenced to pay plaintiffs the aforesaid sum of P113,046.46, with the
stipulated interest at 10 per cent per annum beginning June 4, 1920, until
full payment thereof, with the costs of the present action.
Defendant set up three special defenses: (1) The novation of the contract
by the substitution of the debtor with the conformity of the creditors; (2)
the confusion of the rights of the creditor and debtor; and (3) the
extinguishment of the contract, Exhibit A.
The court a quo in its decision held that there was a novation of the
contract by the substitution of the debtor, and therefore absolved the
defendant from the complaint with costs against the plaintiffs. With regard
to the prayer that the said contract be declared valid and binding, the
court held that there was no way of reviving the contract which the parties
themselves in interest had spontaneously and voluntarily extinguished.
(Exhibit 5.)
Plaintiffs have appealed from this judgment and as causes for the review,
they allege that the trial court erred: (a) In holding that Messrs. Whitaker
and Concepcion, upon purchasing the "Palma" Central, were subrogated in
the place of the defendant in all his rights and obligations under the
contract relating to the railroad line existing between the "Palma" and the
"San Isidro" centrals and that the plaintiffs agreed to this subrogation; (b)
in holding that the deed Exhibit A of February 1, 1919, had been
extinguished in its entirety and made null and void by the agreement
Exhibit 5 dated December 16, 1920; (c) in absolving the defendant from
the complaint and in sentencing the plaintiffs to pay the costs; and (d) in
not sentencing the defendant to pay the plaintiffs the sum of P113,046.46,
with legal interest at 10 per cent per annum from June 4, 1920, until full
payment, with costs against the defendant.
Taking for granted that the defendant was under obligation to pay the
plaintiffs one-half of the cost of the construction of the railroad line in
question, by virtue of the contract of partnership Exhibit A, the decisive
point here to determine is whether there was a novation of the contract by
the substitution of the debtor with the consent of the creditor, as required
by article 1205 of the Civil Code. If so, it is clear that the obligation of the
defendant was, in accordance with article 1156 of the same code,
extinguished.
It should be noted that in order to give novation its legal effect, the law
requires that the creditor should consent to the substitution of a new
debtor. This consent must be given expressly for the reason that, since
novation extinguishes the personality of the first debtor who is to be
substituted by new one, it implies on the part of the creditor a waiver of
the right that he had before the novation which waiver must be express
under the principle thatrenuntiatio non praesumitur, recognized by the law
in declaring that a waiver of right may not be performed unless the will to
waive is indisputably shown by him who holds the right.
The fact that Phil. C. Whitaker and Venancio Concepcion were willing to
assume the defendant's obligation to the plaintiffs is of no avail, if the
latter have not expressly consented to the substitution of the first debtor.
Neither can the letter, Exhibit 6, on page 87 of the record be considered as
proof of the consent of the plaintiffs to the substitution of the debtor,
because that exhibit is a letter written by plaintiffs to Phil. C. Whitaker and
Venancio Concepcion for the very reason that the defendant had told them
(plaintiffs) that after the sale of the "Hacienda Palma" to Messrs. Phil. C.
Whitaker and Venancio Concepcion, the latter from then on would bear the
cost of the repairs and maintenance of the railroad line and of the
construction of whatever addition thereto might be necessary. So the
plaintiffs by their letter of August 14th, submitted a statement of account
to Phil. C. Whitaker and Venancio Concepcion containing the accounts of
the "San Isidro" Central, as stated June 30, 1920, saying that they had
already explained previously the reason for the increase in the expenses
and since the retiring partner, Mr. Serra, had already given conformity with
the accounts, as stated May 15, 1920, it remained only to hear the
conformity of the new purchasers for the accounts covering the period
from May 15 to June 30, 1920, and their authority for future investments,
or their objection, if any, to the amounts previously expended. Neither can
the testimony of Julio Infante in connection with Exhibit 7 be taken as
evidence of the consent of the plaintiffs to the change of the person of the
debtor for that of Messrs. Phil. C. Whitaker and Venancio Concepcion. This
witness testified, in substance, that he is acquainted with the partnership
formed by the owners of the "Hacienda Palma" and Hacienda San Isidro"
for the construction of the railroad line; that the cost of the construction
thereof was originally estimated at P150,000; that the owner of the
"Hacienda Palma" would pay one-half of this amount; that when the
"Hacienda Palma" was sold to Messrs. Phil. C. Whitaker and Venancio
Concepcion, the latter agreed to pay one-half of the cost of P150,000; that
as the cost of construction exceeded P200,000, he, as an employee of
Messrs. Phil. C. Whitaker and Venancio Concepcion, could not O.K. the
accounts as presented by the plaintiffs, and suggested that they take up in
writing their points of view directly with Messrs. Phil. C. Whitaker and
Venancio Concepcion. Then the plaintiffs did as suggested, and wrote the
letter Exhibit 7 in which they asked the new owners of the "Hacienda
Palma" their decision upon the following three questions: 1. Will the
"Palma" Central accept the statement of account as presented by the "San
Isidro" Central regarding the actual cost of the railroad line "Palma-San
Isidro-Nandong?" 2. Is the "Palma" Central willing to continue as coproprietor of the railroad line for the exploitation of the sugar-cane
business of "Nandong" and neighboring barrios, and therefore to pay 50
per cent of the expenses that may be incurred in completing the line?
It was but natural that the plaintiffs should have done this. Defendant
transferred his hacienda to Messrs. Phil. C. Whitaker and Venancio
Concepcion and made it known to the plaintiffs that the new owners would
hold themselves liable for the cost of constructing the said railroad line.
Plaintiffs could not prevent the defendant from selling to Phil. C. Whitaker
and Venancio Concepcion his "Hacienda Palma" with the rights that he had
over the railroad in question. The defendant ceased to be a partner in said
line and, therefore, the plaintiffs had to take the vendees as their new
partners. Plaintiffs had to come to an understanding with the new owners
of the "Hacienda Palma" in connection with the railroad line "Palma-San
Isidro-Nandong." But in all of this, there was nothing to show the express
consent, the manifest and deliberate intention of the plaintiffs to exempt
the defendant from his obligation and to transfer it to his successors in
interest, Messrs. Phil. C. Whitaker and Venancio Concepcion.
The plaintiffs were not a party to the document Exhibit 1. Neither in this
document, nor in others in the record, do we find any stipulation whereby
the obligation of the defendant was novated with the consent of the
creditor, and as it has been held in the case of Martinez vs. Cavives (25
Phil., 581), the oral evidence tending to prove such a fact as this is not in
law sufficient.
As has been said, in all contracts of novation consisting in the change of
the debtor, the consent of the creditor is indispensable, pursuant to article
1205 of the Civil Code which reads as follows:
Novation which consists in the substitution of a new debtor in the
place of the original one may be made without the knowledge of
the latter, but not without the consent of the creditor.
Mr. Manresa in his commentaries on articles 1205 and 1206 of the Civil
Code (vol. 8, 1907 ed., pp. 424-426) says as follows:
Article 1205 clearly says in what this kind of novation must consist,
because in stating that another person must be substituted in lieu
of the debtor, it means that it is not enough to extend the juridical
relation to that other person, but that it is necessary to place the
latter in the same position occupied by the original debtor.
Consequently, the obligation contracted by a third person to
answer for the debtor, as in the case of suretyship, in the last
analysis, does not work as a true novation, because the third
person is not put in the same position as the debtor the latter
continues in his same place and with the same obligation which is
guaranteed by the former.
Since it is necessary that the third person should become a debtor
in the same position as the debtor whom he substitutes, this
change and the resulting novation may be respected as to the
whole debt, thus untying the debtor from his obligation, except the
eventual responsibilities of which we shall speak later, or he may
continue with the character of such debtor and also allow the third
person to participate in the obligation. In the first case, there is a
complete and perfect novation; in the second, there is a change
that does not free the debtor nor authorize the extinguishment of
the accessory obligations of the latter. In this last hypothesis, if
there has been no agreement as to solidarity, the first and the new
debtor should be considered as obligated severally.
The provisions of article 1205 which require the consent of the
creditor as an indispensable requisite in this kind of novation and
not always that of the debtor, while not making it impossible to
express the same, imply the distinction between these two forms
of novation and it is based on the simple consideration of justice
that since the consequences of the substitution may be prejudicial
to the creditor, but not to the debtor, the consent of the creditor
alone is necessary.
The two forms of this novation, also impliedly recognized by article
1206 which employs the word "delegate," as applied to the debt,
are the expromission and the delegation. Between these, there is a
marked difference of meaning and, as a consequence, a logical
difference of requisite and another clear difference as to their
effects, of which we shall speak later.
In the expromission, the initiative of the change does not emanate
from the debtor and may be made even without his consent, since
it consists in a third person assuming his obligation; it logically
requires the consent of this third man and of the creditor and in
this last requisite lies the difference between novation and
in place of the primitive, only when the creditor gives his consent
to the substitution. (Decision of November 15, 1899.)
Novation can in no case be presumed in contracts, but it is
necessary that it should result from the will of the parties, or that
the old and the new one be altogether incompatible. (Decision of
December 31, 1904.)
An obligation cannot be deemed novated by means of
modifications which do not substantially change the essence
thereof, nor when it is not extinguished by another obligation, nor
when the debtor is not substituted. (Decision of March 14, 1908.)
The consent of the creditor required in a novation consisting of the
change of debtors (art. 1205, Civil Code) must appear in an
express and positive manner and must be given with the deliberate
intention of exonerating the primitive debtor of his obligations and
transfer them wholly upon the new debtor. (Decision of June 22,
1911.)
In the decision in the case of Martinez vs. Cavives, supra, the following
decisions of the several courts of the United States are cited, wherein this
question was decided in the same manner:
In Latiolais, admrx. vs. Citizens' Bank of Louisiana (33 La. Ann.,
1444), one Duclozel mortgaged property to the defendant bank for
the triple purpose of obtaining shares in the capital stock of the
bank, bonds which the bank was authorized to issue, and loans to
him as a stockholder. Duclozel subsequently sold this mortgaged
property to one Sproule, who, as one of the terms of the sale,
assumed the liabilities of his vendor to the bank. Sproule sold part
of the property to Graff and Chalfant. The debt becoming due, the
bank brought suit against the last two named and Sproule as
owners. Duclozel was not made a party. The bank discontinued
these proceedings and subsequently brought suit against Latiolais,
administratrix of Duclozel, who had died.
The court said: "But the plaintiff insists that in its petition in the
proceeding first brought the bank ratified the sale made by
Duclozel to Sproule, and by the latter to other parties, in treating
them as owners. Be that so, but it does not follow in the absence of
either a formal and express or of an implied consent to novate,
which
should
be
irresistibly
inferred
from
surrounding
circumstances, that it has discharged Duclozel unconditionally, and
has accepted those parties as new delegated debtors in his
place. Nemo presumitur donare.
any time as long as the agreement among the debtors holds good. And
defendant insists that the acts performed by the plaintiffs after the
"Hacienda Palma" was sold to Messrs. Phil. C. Whitaker and Venancio
Concepcion constitute evidence of the consent of the creditor. First of all,
we should have an idea of the facts upon which that decision was rendered
by the supreme court of Spain.
A partnership known as "La Azucarera de Pravia" obtained a fire insurance
policy from the company "La Union y Fenix Espanol," by virtue of which,
said company insured in consideration of an annual premium of
3,000 pesetas, the buildings, machinery and other apparatuses pertaining
to the "Pravia Factory" for ten years and for half their value, and another
insurance from another insurance company insuring the same property
and effects for the other half of their value.
Later, "La Azucarera de Pravia," with other sugar companies, ceded all its
property to another company known as "Sociedad General Azucarera de
Espaa," in which in consideration of certain amount of stock that the said
"Sociedad General Azucarera de Espaa" issued to the "La Azucarera de
Pravia," the latter was merged with the former. After the cession, "La Union
y Fenix Expaol" sued the "Sociedad General Azucarera de Espaa"
demanding the payment of the premium that should have been paid by the
"La Azucarera de Pravia," which payment the "Sociedad General Azucarera
de Espaa" refused to make on the ground that the "La Azucarera de
Pravia" was not merged with the "Sociedad General Azucarera de Espaa,"
but merely transferred its properties to the latter in consideration of the
stock that was issued to the "La Azucarera de Pravia." It was further
contended by the "Sociedad General Azucarera de Espaa" that even if it
were true that in the contract of cession it appeared that the "La Azucarera
de Pravia" was merged with the "Sociedad General Azucarera de Espaa,"
nevertheless, there was no such merger in law, for in truth and in fact, the
"La Azucarera de Pravia" had ceded only its property, but not its rights and
obligations; that the existence of the partnership known as "La Azucarera
de Pravia" was proven by its registration in the mercantile register, which
was not cancelled, did it contain any statement to the effect that the "La
Azucarera de Pravia" had been extinguished or had ceased to do business
even after the cession of properties to the "Sociedad General Azucarera de
Espaa." Another argument advanced by the "Sociedad General" was that
at the time the "Azucarera de Pravia" ceded its properties to the "Sociedad
General Azucarera de Espaa," the insurance company "La Union y Fenix
Espanol" did not assent to the subrogation of the "Sociedad General
Azucarera" into the rights and obligations of the "Azucarera de Pravia,"
assuming that there had been such a subrogation or substitution of a
debtor by another.
By comparing the facts of that case with the defenses of the case at bar, it
will be seen that, whereas in the former case the creditor sued the new
debtor, in the instant case the creditor sues the original debtor. The
supreme court of Spain in that case held that the fact that the creditor
sued the new debtor was proof incontrovertible of his assent to the
substitution of the debtor. This would seem evident because the judicial
demand made on the new debtor to comply with the obligation of the first
debtor is the best proof that the creditor accepts the change of the debtor.
His complaint is an authentic document where his consent is given to the
change of the debtor. We are not holding that the creditor's consent must
necessarily be given in the same instrument between the first and the new
debtor. The consent of the creditor may be given subsequently, but in
either case it must be expressly manifested. In the present case, however,
the creditor makes judicial demand upon the first debtor for the fulfillment
of his obligation, evidently showing by this act that he does not give his
consent to the substitution of the new debtor. We are of the opinion that
the decision of the supreme court of Spain of June 16, 1908, cannot be
successfully invoked in support of defendant's contention. Wherefore, we
hold that in accordance with article 1205 of the Civil Code, in the instant
case, there was no novation of the contract, by the change of the person of
the debtor.
The supreme court of Spain gave judgment in favor of the "La Union y
Fenix Espaol" insurance company for the following reasons:
premature since, from the execution of the contract until October 25, 1922,
the date of the complaint, the five years, within which the defendant could
pay his part of the cost of the construction of the line, had not yet elapsed.
Suffice it to say that the plaintiff and the successors in interest of the
defendant, by mutual consent, dissolved the partnership on June 16, 1920,
cancelling the contract Exhibit A to all of which the defendant consented as
evidence by his allegations in his answer. If this is so, there is no reason for
waiting for the expiration of the five years which the parties themselves
had seen fit to stipulate and therefore the provisions of article 113,
regarding the fulfillment of pure obligations, must be applied in this case.
For all of the foregoing, the judgment appealed from is reversed, and we
hold that the defendant Salvador Serra is indebted to the plaintiffs, the
Testate Estate of Lazaro Mota, et al., in the amount of P113,046.46, and
said defendant is hereby sentenced to pay the plaintiffs the said amount,
together with the agreed interest at the rate of 10 per cent per annum
from the date of the filing of the complaint.
Without special pronouncement as to costs, it is so ordered.
Johnson, Street, Malcolm, Ostrand, Johns, and Romualdez, JJ., concur.
CRISTOBAL
BONNEVIE,
ET
vs.
JAIME HERNANDEZ, defendant-appellee.
Ojeda
and
Vilgera
Cea and Zurbano for appellee.
AL., plaintiffs-appellants,
for
appellants.
REYES, J.:
This is an action for the recovery of the sum of P115,312.50, with interests,
as plaintiffs' alleged share in the profits of a partnership.
It appears that prior to January, 1947, plaintiffs with other associates
formed a syndicate or secret partnership for the purpose of acquiring the
plants, franchises and other properties of the Manila Electric Co.
hereinafter called the Meralco in the provinces of Camarines Sur, Albay,
and Sorsogon, with the idea of continuing that company's business in that
region. No formal articles were drawn for it was the purpose of the
members to incorporate once the deal had been consummated. But in the
meantime they elected Pedro Serranzana and David Serrano general
manager and secretary-treasurer, respectively, of the partnership.
Negotiation for the purchase was commenced, but as it made no headway,
defendant was taken in as a member of the partnership so that he could
push the deal through, and to that end he was given the necessary power
of attorney. Using partnership funds, defendant was able to buy the
Meralco properties for P122,000, paying P40,000 upon the signing of the
deed of sale and agreeing to pay the balance in two equal installments,
that is, P41,000 on or before July 31, 1947, and another P41,000 on or
before January 31, 1948, with interest at 6 per cent per annum and with a
penalty clause which reads:
(6) That in case the VENDEE fails to make the payment or
payments of the balance due or any part thereof as herein
provided, this contract shall, at the option of the VENDOR, be
annuled and, in such an event, all payments made by the VENDEE
to the VENDOR by virtue of this contract shall be forfeited and
retained by the VENDOR in full satisfaction as the liquidated
damages sustained by said VENDOR; and the said VENDOR shall
have the right to forthwith reenter and take possession of the
premises, properties and rights which are the subject-matter of this
contract.
Although defendant was the one named vendee in the deed of sale, there
is no question that the transaction was in penalty made for the partnership
so that the latter assumed control of the business the day following the
sale.
About the latter half of the following month the members of the
partnership proceeded with the formation of the proposed corporation,
apportioning among themselves its shares of stock in proportion to their
respective contributions to the capital of the partnership and their
individual efforts in bringing about the acquisition of the Meralco
properties. But before the incorporation papers could be perfected, several
partners, not satisfied with the way matters were being run and fearful that
the venture might prove a failure because the business was not going well
and there was a possibility of their being assessed more than their original
investments when the time came to meet the two installments of the
unpaid purchase price due the Meralco, expressed their desire to withdraw
from the partnership and get back the money they had invested therein. In
accordance with this wish, one of them, Judge Jaime Reyes, in a meeting
held on April 10, 1947, to consider various matters connected with the
business, presented a resolution to the effect that those partners who did
not want to remain in the association should be allowed to withdraw and
get back their contributions. The resolution was approved, with the herein
plaintiffs voting affirmatively, and on that same day plaintiffs and Judge
Reyes withdrew from the partnership, and, as admitted by both parties, the
partnership was then dissolved. In accordance with the terms of the
resolution, the withdrawing partners were, on the following day,
reimbursed their respective contributions to the partnership fund.
Following the dissolution of the partnership, the members who preferred to
remain in the business went ahead with the formation of the corporation,
taking in new associates as stockholders. And defendant, on his part, in
fulfillment of his trust, made a formal assignment of the Meralco properties
to the treasurer of the corporation, giving them a book value of P365,000,
in return for which the corporation issued, to the various subscribers to its
capital stock, shares of stock of the total face value of P225,000 and
assumed the obligation of paying what was still due the Meralco on the
purchase price. The new corporation was named "Bicol Electric Company."
Though business was losing during the first year, that is, in 1947, the
corporation, thanks to a loan obtained from the RFC later prospered and
made money. Then trouble began for one of its big stockholders, the
defendant herein.
Two years from their withdrawal from the partnership, when the corporate
business was already in a prosperous condition, plaintiffs brought the
present suit against Jaime Hernandez, claiming a share in the profit the
latter is supposed to have made from the assignment of the Meralco
properties to the corporation, estimated by plaintiffs to be P225,000 and
their share of it to be P115,312.50.
Defendant's answer denies that he has made any profit out of the
assignment in question and alleges that in any event plaintiffs, after their
withdrawal from the partnership, ceased to have any further interest in the
subsequent transactions of the remaining members.
After trial the lower court found that the partnership had not realized any
profit out of the assignment of the Meralco properties to the corporation
and that, even supposing that profit had really been made, defendant
would not be the one to answer to plaintiffs for their share thereof,
because he did not receive the consideration for the assignment, which
As a general rule, when a partner retires from the firm, he is entitled to the
payment of what may be due him after a liquidation. But certainly no
liquidation is necessary where there is already a settlement or an
agreement as to what the retiring partner shall receive. In the instant case,
it appears that a settlement was agreed upon on the very day the
partnership was dissolved. For when plaintiffs and Judge Jaime Reyes
withdrew from the partnership on that day they did so as agreed to by all
the partners, subject to the only condition that they were to be repaid their
contributions or investments within three days from said date. And this
condition was fulfilled when on the following day they were reimbursed the
respective amounts due them pursuant to the agreement.
There is evidence that the partnership was at that time operating its
business at a loss and that the partnership did not have necessary funds to
meet its obligation to Meralco for the balance of the purchase price. And in
that connection it should be recalled that nonpayment of that obligation
would result in the partnership losing its entire investment because of the
penalty clause in the deed of sale. Because of these circumstances there is
every reason to believe that plaintiffs together with Judge Jaime Reyes,
withdrew from the partnership for fear that they might lose their entire
investment should they choose to remain in the partnership which then
faced the danger of losing its entire assets. As testified to by Judge Reyes,
one of the withdrawing partners, it was clearly understood that upon their
withdrawal and return to them of their investment they would have nothing
more to do with the association. It must, therefore, have been the intention
or understanding of the parties that the withdrawing partners were
relinquishing all their rights and interest in the partnership upon the return
to them of their investment. That Judge Reyes did not join the plaintiffs in
this action is a clear indication that such was really the understanding.
Judge Reyes has testified that when he was invited to join in the present
claim he refused because he did not want to be a "sin verguenza." And,
indeed, if the agreement was that the withdrawing partners were still to
have participation in the subsequent transactions of the partnership so
that they would have a share not only in the profits but also in the losses, it
is not likely that their investment would have been returned to them.
It is, therefore, our conclusion that the acceptance by the withdrawing
partners, including the plaintiffs, of their investment in the instant case
was understood and intended by all the parties as a final settlement of
whatever rights or claim the withdrawing partners might have in the
dissolved partnership. Such being the case they are now precluded from
claiming any share in the alleged profits, should there be any, at the time
of the dissolution.
In view of the foregoing, we find plaintiffs' claim against defendant to be
without legal basis so that the judgment of dismissal rendered by the court
10
On
THIRD DIVISION
SOLEDAD CAEZO, substituted
CAEZO and VICTORIANO CAEZO
Petitioners,
- versus -
CONCEPCION ROJAS,
Respondent.
by
WILLIAM
January
29,
1997,
petitioner
Soledad
Caezo
filed
Complaint[2] for the recovery of real property plus damages with the
Municipal Trial Court (MTC) of Naval, Biliran, against her fathers 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. Caezo attached to the complaint a Joint Affidavit [3] executed on May
10, 1979 by Isidro Catandijan and Maximina Caezo attesting to her
acquisition of theproperty.
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, Crispulo [4] 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
x-----------------------------------------------------------------------------------------x
cultivating the same. She also discovered that the tax declaration over the
property was already in the name of Crispulo Rojas. [5]
DECISION
In her Answer, the respondent asserted that, contrary to the petitioners
NACHURA, J.:
claim, it was her husband, Crispulo Rojas, who bought the property from
Crisogono Limpiado in 1948, which accounts for the tax declaration being
11
in Crispulos name. From then on, until his death in 1978, Crispulo
from Crisogono Limpiado in 1948. It held that the 1948 tax declaration in
possessed and cultivated the property. Upon his death, the property was
that in 1948, the country was then rehabilitating itself from the ravages of
Bienvenido Ricafort. The petitioner, as heir, even received her share in the
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]
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
The respondent appealed the case to the Regional Trial Court (RTC) of
that she had already abandoned her right over the property.
Naval, Biliran. On October 12, 1998, the RTC reversed the MTC decision on
[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
Caezo 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 P34,000.00 actual
damages, P10,000.00 for attorneys
fees
and litigation expenses; and
c)
To pay the costs.
SO ORDERED.[7]
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]
Despite the respondents objection that the verbal sale cannot be proven
only from the time the trustee repudiates the trust. The RTC found no
without infringing the Statute of Frauds, the MTC gave credence to the
evidence on record showing that Crispulo Rojas ever ousted the petitioner
from the property. The dispositive portion of the amended decision reads
Crisogono Limpiado sold the property to the petitioner in 1939. The MTC
as follows:
also found no evidence to show that Crispulo Rojas bought the property
12
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 Caezo 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 Assessors 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
Caezo, Ordering the defendant-appellant Concepcion Rojas
to pay the plaintiff-appellee the sum of P34,000.00 in
actual damages, and to pay for the loss of her share in
money value of the products of the coconuts of said land
from 1979 to 1997 and to pay further until the case is
terminated at the rate ofP200.00 per quarter based on the
regular remittances of the late Crispolo Rojas to the
plaintiff-appellee, and to pay the costs.
SO ORDERED.[11]
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 Caezobefore 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 petitioners 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]
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
13
property in 1948.[15]
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
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 respondents counsel in Cebu City in time for the filing of the petition.
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
petitioner 49 years from 1948 before she filed the complaint for recovery
most compelling reason. She contends that the fact that respondents
of the property in 1997. Granting that it was only in 1980 that she found
counsel needed additional time to secure the certified copy of his annexes
out that the respondent adversely possessed the property, still petitioner
allowed 17 years to elapse before she asserted her alleged right over the
additional period of
property.
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.
14
Thus,
The petition has no merit.
the
resolution
of
the
second
issue
hinges
on
our
of time to file the respondents petition. The grant or denial of a motion for
equitable ownership of property and another person owning the legal title
to such property, the equitable ownership of the former entitling him to the
latter.[21] Trusts are either express or implied.[22] Express trusts are those
respondents counsel and the trial court as a compelling reason for the
which are created by the direct and positive acts of the parties, by some
request. In the absence of any showing that the CA granted the motion for
[23]
this Court.
Implied trusts are those which, without being expressed, are deducible
15
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.
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
express trust, a clear intention to create a trust must be shown; and the
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
16
trustee would necessarily have the right to transfer the tax declaration in
inferred from the petitioners testimony and the attendant facts and
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
agreement with her father was that she will be given a share in the
adverse possession.[34]
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
the petitioner and her father from which it can be inferred that a resulting
trust was intended.
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
17
in
the
absence
of
trust
relation,
we
can
only
conclude
that
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
but one which arises in order to satisfy the demands of justice. It does not
receipts are not conclusive evidence of ownership and do not prove title to
obtains or holds the legal right to property which he ought not, in equity
As
previously
stated,
the
rule
that
trustee
cannot,
by
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
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
any fiduciary relation to speak of and the so-called trustee neither accepts
other person to administer it. [41] If Crispulo was indeed appointed as trustee
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
18
Finally, the respondent asserts that the court a quo ought to have
dismissed the complaint for failure to implead the other heirs who are
over the subject property by her failure to protest its inclusion in the estate
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.[46] Such a situation obtains in the instant case.
resolution of this issue is now purely academic in light of our finding that
the complaint is already barred by prescription, estoppel and laches.
However, it was only in 1997 that she filed the action to recover the
19
PANGANIBAN, J.:
The Court finds occasion to apply the general principles of constructive
trust as authorized by the Civil Code in granting this petition and in
compelling private respondent to implement his trust relationship with
petitioner.
This is a petition under Rule 45 of the Rules of Court to reverse the
Decision 1 of public respondent 2 in CA-G.R. CV No. 32821 promulgated on
March 21, 1994, and the Resolution 3 promulgated on July 5, 1994, denying
petitioner's motion for reconsideration.
The dispositive portion of the assailed Decision reads: 4
WHEREFORE, in view of the foregoing, judgment is hereby
rendered:
1. REVERSING and SETTING ASIDE the appealed decision
dated 10 September 1990;
2. DISMISSING the Complaint; and
3. Without pronouncement as to costs.
The Facts
The facts of the case, as culled from the challenged Decision, are simple.
Petitioner (along with his co-plaintiffs in the antecedent cases, namely,
Rodolfo Gayatin, Jose Villacin and Jocelyn Montinola 5) and private
respondent were former tenants of the 30-door Barretto Apartments
formerly owned by Serapia Realty, Inc.. Sometime in April 1984, private
20
days.
c. Plan indicating the areas and boundaries of each unit.
This offer is on a "FIRST COME FIRST SERVED BASIS" and
our price is good only within 60 days or until September
30, 1985 only.
Thank You.
In addition, Serapia Realty, Inc., sent to spouses Gayatin a mimeographed
letter stating: 9
November 15, 1985
Mr./Mrs. Gayatin
SIR/MADAM:
Please be informed that we are intending to sell the unit
you are now occupying.
We are therefore giving you the first priority to purchase
the same, if you desire.
We are giving you a period of ten (10) days from receipt
hereof to see us(,) otherwise, we will consider your inaction
a waiver in (sic) your part to purchase the same.
Very truly yours,
SERAFIA REALTY INC.
By: S/ Mrs. Rosa B. Ochoa
T/
Mrs.
Rosa
B.
Ochoa
Kalentong
Mandaluyong,
Metro
Manila
(Authorize (sic) representative)
21
The Issue
The sole issue raised by petitioner in this appeal is:
15
22
As a rule, the jurisdiction of this Court in cases brought before it from the
Court of Appeals is limited to the review and revision of errors of law
allegedly committed by the appellate court. However, when there is
conflict between the factual findings of the Court of Appeals and the trial
court, 23 the Court may review such findings and conclusions, as we now
do.
23
A I did not.
Q As President of the association who got
the trust and confidence of the members
including the 4 plaintiffs, did you not
consider it in keeping with trust and
confidence to officially inform them that
these apartments is (sic) being sold at that
(sic) prices and if you could buy this (sic),
you pay this (sic) amount. You did not
inform them, is it not?
ATTY. BALLELOS
respondent):
(counsel
for
private
24
25
We only regret that we cannot grant the same opportunity to the other
beneficiaries or cestuis que trust for their failure to perfect their petitions
for review of the respondent Court's Decision.
WHEREFORE, the petition is hereby GRANTED. The assailed Decision and
Resolution are hereby REVERSED and SET ASIDE. Consistent with the trial
court's decision, Private Respondent Rosito Puechi S. Uy is ORDERED to
EXECUTE a deed of conveyance covering Door 8, Lot 14, in favor of
Petitioner Meynardo Policarpio upon the latter's payment of P35,200.00
without any interest.
No costs.
SO ORDERED.
Narvasa, C.J., Davide, Jr., Melo and Francisco, JJ., concur.
LINA PEALBER,
Petitioner,
Present:
- versus -
AUSTRIA-MARTINEZ, J.,
26
Acting Chairperson,
TINGA,*
CHICO-NAZARIO,
QUIRINO RAMOS, LETICIA PEALBER,
and BARTEX INC.,
NACHURA, and
PERALTA, JJ.
Respondents.
Petitioner is the mother of respondent Leticia and the mother-inlaw of respondent Quirino, husband of Leticia. Respondent Bartex, Inc., on
the other hand, is a domestic corporation which bought from respondent
spouses Ramos one of the two properties involved in this case.
On 18 February 1987, petitioner filed before the RTC a Complaint
for Declaration of Nullity of Deeds and Titles, Reconveyance, Damages,
[with] Application for a Writ of Preliminary Prohibitory Injunction against the
respondents.[3] It was docketed as Civil Case No. 3672.
First Cause of Action
Promulgated:
Firstly, petitioner alleged in her Complaint that she was the owner
of a parcel of land situated in Ugac Norte, Tuguegarao, Cagayan, with an
DECISION
CHICO-NAZARIO, J.:
she
discovered
that
TCT
No.
[5]
T-43373
was
cancelled
on 13
May
the Rules of Court is the Decision [1] dated 15 December 2006 of the Court
of Appeals in CA-G.R. CV No. 69731. Said Decision reversed and set aside
a Registered Land,
the Decision
1983. Petitioner insisted that her signature on the said Deed of Donation
petitioner Lina Pealber the owner of the Bonifacio property subject of this
was a forgery as she did not donate any property to respondent spouses
case and ordered respondent spouses Quirino Ramos and Leticia Pealber to
the false donation, the latter pleaded that they would just pay for the Ugac
[2]
Residential
House
petitioner
27
respondent Bartex, Inc. Petitioner then sent her son, Johnson Paredes
Secondly, petitioner claimed that for many years prior to 1984, she
Ramos were not the lawful owners of the said properties. Johnson was
upon which the building stood is owned by and registered in the name of
not to sell the Ugac properties anymore, otherwise, she would file the
necessary action against them. The respondent spouses Ramos then
assured her that they would do no such thing. As a precaution, petitioner
executed an Affidavit of Adverse Claim over the Ugac Properties on 19
January 1987 and caused the same to be annotated on TCT No. T-58043 on
the same day.Despite petitioners warnings, respondent spouses Ramos still
executed in favor of respondent Bartex, Inc. a Deed of Absolute Sale [9] over
the Ugac properties on 12 January 1987 for a total price of P150,000.00. As
a result, TCT No. T-58043 in the name of respondent spouses Ramos was
cancelled and TCT No. T-68825[10] in the name of respondent Bartex, Inc.
was issued on 20 January 1987.
Petitioner contended that the Deed of Absolute Sale executed by
respondent spouses Ramos in favor of respondent Bartex, Inc. did not
convey any valid title, not only because respondent Bartex, Inc. was a
buyer in bad faith, but also because respondent spouses Ramos did not
own the Ugac properties. Thus, petitioner prayed for the declaration of
allegedly entered into a contract of sale [11] with Mendoza over the Bonifacio
spouses Ramos; (2) TCT No. T-58043, issued in the name of respondent
spouses Ramos; (3) the Deed of Absolute Sale executed by the respondent
spouses Ramos in favor of respondent Bartex, Inc.; and (4) TCT No. T68825, issued in the name of respondent Bartex, Inc. Should petitioners
properties, which was about P1.5 Million. Petitioner further prayed that TCT
fully paid out of the funds of the store and if respondent spouses Ramos
had given any amount for the purchase price of the said property, they had
already sufficiently reimbursed themselves
from
the funds
of
the
28
the reconveyance of the title to the Bonifacio property to her but the latter
unjustifiably refused.
Petitioner insisted that respondent spouses Ramos were, in reality,
mere trustees of the Bonifacio property, thus, they were under a moral and
legal obligation to reconvey title over the said property to her. Petitioner,
therefore, prayed that she be declared the owner of the Bonifacio property;
TCT No. T-62769, in the name of respondent spouses, be declared null and
void; and the Register of Deeds for the Province of Cagayan be directed to
issue another title in her name.
On 2 March 1987, respondent spouses Ramos accordingly filed
before the RTC their Answer[14] to petitioners Complaint. As regards the first
cause of action, respondent spouses Ramos alleged that petitioner,
together with her son, Johnson, and the latters wife, Maria Teresa Paredes,
mortgaged the Ugac properties to the Development Bank of the Philippines
(DBP) on 19 August 1990 for the amount of P150,000.00. When the
On 27 April 1987, respondent Bartex, Inc. filed before the RTC its
TCT No. T-58043, together with the tax declarations covering the parcel of
land and the buildings thereon. Respondent Bartex, Inc. even verified the
title and tax declarations covering the Ugac properties with the Register of
dated 27 April 1983. After accepting the donation and having the Deed of
Ramos and they then took actual and physical possession of the Ugac
spouses Ramos were then actually occupying the Ugac properties and they
only vacated the same after the consummation of the sale to respondent
been aware of their intention to sell the Ugac properties as they posted
Bartex, Inc. Respondent Bartex, Inc. claimed that the sale of the Ugac
placards thereon stating that the said properties were for sale. Respondent
spouses Ramos further averred that petitioner also knew that they finally
sold the Ugac properties to respondent Bartex, Inc. for P150,000.00. Thus,
caused the annotation of an adverse claim at the back of TCT No. T-58043
29
30
of P116,000.00 plus
[16]
(Emphasis ours.)
which
was
due
to
her.
evidence
clearly
established
her
second
cause
of
action. Additionally, the RTC held that the requirement that the parties
exert earnest efforts towards an amicable settlement of the dispute had
likewise been waived by the respondents as they filed no motion regarding
the same before the trial.
2.
On the second cause of action, in
favor of the [petitioner] and against the [herein respondent
spouses Ramos];
2.1
Declaring the [petitioner] the
owner of Lot 2-B of subdivision plan PST-2-01019316 (sic) with an area of 195 square meters
situated
along
Bonifacio
Street,
Tuguegarao,
Cagayan; and
2.2
Ordering the [respondent spouses
Ramos] to reconvey to the [petitioner] the said
property (Bonifacio property).
under Article 150[21] of the Family Code. Therefore, Article 151[22] of the
Family
Code,
requiring
the
exertion
of
earnest
efforts
toward
compromise, did not apply as the impediment arising from the said
provision was limited only to suits between members of the same family or
With costs de oficio.[17] (Emphasis ours.)
On 22 February 2000, respondent spouses Ramos filed with the
RTC a Motion for Reconsideration [18] of the afore-mentioned decision,
assailing the ruling of the RTC on petitioners second cause of action on the
ground that the alleged express trust created between them and petitioner
involving the Bonifacio property could not be proven by parol evidence. In
an Order[19] dated 17 July 2000, the RTC denied respondent spouses Ramos
Motion for Reconsideration for lack of merit, ratiocinating that respondent
31
The rule that only questions of law may be raised in a petition for review
under Rule 45, however, admits of certain exceptions, [29] among which is
when the findings of the trial court are grounded entirely on speculation,
surmise and conjecture. As will be discussed further, we find the aforementioned exception to be applicable in the present Petition, thus,
warranting a departure from the general rule.
32
created and that the same is valid and enforceable. Petitioner claims that
the person for whose benefit the trust has been created is referred to as
she is the trustor for it was she who entrusted the Bonifacio property to
the beneficiary.
respondent spouses Ramos as the trustees, with the condition that the
[31]
[32]
that a trust agreement was clearly intended by the parties when petitioner
left the management of the hardware store to respondent spouses Ramos,
with the agreement that the proceeds from the sales from said store be
used to buy the lot upon which the store stands. The respondent spouses
Ramos assumption of the management of the hardware store and their
eventual purchase of the Bonifacio property indubitably shows that
respondent spouses Ramos honored their obligation under the verbal
agreement. Such being the case, it behooved for the respondent spouses
Ramos to hold the Bonifacio property for petitioners benefit.
Petitioners arguments fail to persuade.
It bears stressing that petitioner has the burden of proving her
In the instant case, petitioner maintains that she was able to prove
the existence of a trust agreement between her and respondent spouses
Ramos. She calls attention to the fact that respondent spouses Ramos
could not account for the P116,946.15 difference in the beginning
inventory and the second inventory of the stocks of the hardware store,
and they failed to present proof to support their allegation that the amount
was used to pay the other obligations of petitioner. As respondent spouses
Ramos
never
denied
the
existence
of
the P116,946.15
difference,
petitioner contends that they have the burden of proving where this
amount had gone, if indeed they did not use the same to buy the Bonifacio
property. Petitioner asserts that given the respondent spouses Ramos
failure to discharge such burden, the only conclusion would be that they
did use the amount to purchase the Bonifacio property.
cause of action in the instant case and she may not rely on the weakness
of the defense of respondent spouses Ramos. Burden of proof is the duty of
any party to present evidence to establish his claim or defense by the
amount of evidence required by law, which is preponderance of evidence
in civil cases. Preponderance of evidence[37] is the weight, credit, and value
of the aggregate evidence on either side and is usually considered to be
synonymous with the term "greater weight of the evidence" or "greater
weight of the credible evidence. It is evidence which is more convincing to
the court as worthy of belief than that which is offered in opposition
thereto.[38] Therefore, the party, whether plaintiff or defendant, who asserts
the affirmative of the issue has the burden of proof to obtain a favorable
judgment. For the plaintiff, the burden of proof never parts. [39] For the
defendant, an affirmative defense is one which is not a denial of an
33
paid
for
the
Bonifacio
property. On 20
September
1984,
the
respondent
spouses
Ramos
returned
the
objection. But if the parties to the action, during the trial, make no
spouses Ramos did indeed fail to interpose their objections regarding the
offered to prove the alleged verbal trust agreement between them and
orally, it will be just as binding upon the parties as if it had been reduced to
writing.
[42]
34
admissibility of the said testimonies, the Court holds that the same carried
little weight in proving the alleged verbal trust agreement between
SO ORDERED.
35
INSURANCE
and
COMPANY, petitioner,
TRANSOCEAN
TRANSPORT
PANGANIBAN, J.:p
Was a trust relationship established between an insurer and the two
insureds over the balance of the insurance proceeds being held by the
insurer for the account of the two insureds, pending a final settlement by
and between the two insureds of their respective claims to said proceeds?
Can the insurer whether or not considered a trustee be held liable for
interest on the said insurance proceeds, which proceeds the said insurer
failed or neglected to deposit in an interest-bearing account, contrary to
the specific written instructions of the two insureds? And should attorney's
fees be awarded in this case?
These questions confronted the Court in resolving the instant petition for
review on certiorari, which assailed the Decision 1 of the Court of
Appeals 2 promulgated October 25, 1990 affirming and modifying the
decision 3 dated September 19, 1986 of the Regional Trial Court of Manila,
Branch 33, 4 in Civil Case No. 125886.
The Facts
As culled from the stipulations between the parties and the assailed
Decision, the factual background of this case is as follows:
On December 5, 1961, the Reparations Commission (hereinafter referred to
as REPACOM) sold to private respondent Transocean Transport Corporation
the vessel 'M/V TRANSOCEAN SHIPPER' payable in twenty (20) annual
installments. On June 22, 1974, the said vessel was insured with petitioner
Rizal Surety & Insurance Company for US$3,500,000.00, with stipulated
value in Philippine Currency of P23,763,000.00 under Marine Hull Policy
MH-1322 and MH-1331. 5 The said policies named REPACOM and herein
private respondent as the insured. Subsequently, petitioner reinsured the
vessel with a foreign insurance firm.
Sometime in February, 1975, during the effectivity of the aforementioned
marine insurance policies, the vessel 'M/V TRANSOCEAN SHIPPER' was lost
in the Mediterranean Sea. The insured filed claims against herein petitioner
for the insurance proceeds. Shortly thereafter, a partial compromise
agreement was entered into between the REPACOM and respondent
Transocean regarding the insurance proceeds.
36
37
defendant Prudential Bank from liability and when it ruled that the interest
on the balance of the dollar deposit, for which petitioner was held liable,
should be computed only until January 31, 1977 (when the Loss and
Subrogation Receipt was signed) instead of January 10, 1978 (when the
actual transfer of the dollar deposit was made to the bank chosen by
private respondent). 20 On the other hand, petitioner charged that the trial
court had seriously erred in finding that a trust relationship, existed and
that petitioner was liable for the interest on the dollar balance despite the
execution of the Loss and Subrogation Receipt wherein petitioner was
unconditionally and absolutely released from all its liabilities under the
marine hull policies. 21
On October 25, 1990, the Court of Appeals upheld the judgment of the trial
court, and confirmed that a trust had in fact been established and that
petitioner became liable for interest on the dollar account in its capacity as
trustee, not as insurer. As for the Loss and Subrogation document, the
appellate Court ruled that petitioner gave undue importance thereto, and
that the execution thereof did not bar the claims for accrued interest. By
virtue of that document, petitioner was released only from its liabilities
arising from the insurance policies, i.e., in respect of the principal amount
representing the insurance proceeds, but not insofar as its liability for
accrued interest was concerned, which arose from the violation of its duty
as trustee i.e., its refusal to deposit the dollar balance in an interestbearing account, under terms most advantageous to the beneficiaries. The
respondent Court modified the trial court's judgment by ordering petitioner
to pay said interest computed from April 21, 1976 up to January 10, 1978.
38
39
28
40
Significance
Of
The
Liability
Of
Petitioner
For
41
Insurance
Company,
42
43
Petitioners seek the review of the Decision1 dated November 27, 2000 of
the Court of Appeals in CA-G.R. CV No. 48581 and its Resolution,2 dated
April 24, 2001, denying the subsequent motion for reconsideration. The
Court of Appeals affirmed the decision of the Regional Trial Court (formerly
the Court of First Instance) of Dagupan City, Branch 43, in favor of herein
respondents, for partition and reconveyance of land with damages.
The controversy involves lands in San Fabian, Pangasinan, owned by the
late Jacobo Ringor. By his first wife, Gavina Laranang, he had two children,
Juan and Catalina. He did not have offsprings by his second and third
wives. Catalina predeceased her father Jacobo who died sometime in 1935,
leaving Juan his lone heir.
Juan married Gavina Marcella. They had seven (7) children, namely: Jose
(the father and predecessor-in-interest of herein petitioners), Genoveva,
Felipa, Concordia, Agapito, Emeteria and Espirita. Genoveva and Agapito
are represented in this case by Teofilo Abalos and Marcelina Ringor, their
respective children. Espirita is represented by her children, Avelina,
Cresencia and Felimon Almasen.
Jacobo applied for the registration of his lands under the Torrens system.
He filed three land registration cases alone, with his son Juan, or his
grandson Jose, applying jointly with him.
The first application, docketed as Expediente 241, G.L.R.O. Record No.
13152 was applied for alone by Jacobo. While Jacobo was the only
applicant in Expediente 241, on November 22, 1921, in Decree No.
119561, Parcels 1 and 2 of the lands in Expediente 241 were adjudicated
to Jacobo and his son, Juan, in equal shares as pro-indivisoco-owners.3 On
March 6, 1922, OCT No. 23689 was issued in the names of Jacobo and
Juan.4 With Jacobo's thumbmark, in a Compraventa dated November 6,
1928, the one-half () undivided interest of Jacobo in the said Parcels 1
and 2 was sold and transferred to Jose. The OCT was eventually cancelled
and replaced by TCT No. 15918, dated November 6, 1928. The sale to Jose
was registered only on February 15, 1940.5
Decree No. 119562awarded full ownership ofParcel 3 to Jacobo. 6 Thus, OCT
No. 23690 pertaining to Parcel 3, was issued in Jacobo's name. 7 By
another Compraventa also dated November 6, 1928, and with the same
circumstances as the Compraventa in Parcels 1 and 2, the entire interest of
Jacobo in Parcel 3 was likewise sold and transferred to Jose. Thereafter, TCT
No. 5090 was issued in the name of Jose.8 All the lands declared to Jacobo
in Expediente 241 were allegedly sold to Jose for P6,000.9
In the second application, Expediente 244, G.L.R.O. Record No. 13168,
Jacobo named Jose as the applicant. In Decree No. 65500,the five (5)
44
Jose died on April 30, 1971. Respondents demanded from Jose's children,
herein petitioners, the partition and delivery of their share in the estate left
by Jacobo and under Jose's administration. The petitioners refused and
attempts at amicable settlement failed. 25 On March 27, 1973, respondents
filed a Complaint for partition and reconveyance with damages, docketed
as Civil Case No. D-3037. An Amended Complaint was admitted by the
lower court in its Order of August 6, 1973.26
In their Complaint, herein respondents claimed that (1) they are all
grandchildren and/or great grandchildren of Jacobo, who left intestate the
disputed lands with a total area of 322,775 sq. m., all located in San
Fabian, Pangasinan, and declared for tax purposes in the name of Jose
Ringor; (2) that the late Jose Ringor had always been the administrator and
trustee of Jacobo;27 (3) that after Jacobo's death, they asked for their
shares of the intestate properties but was refused; and (4) that Jose as
trustee and overseer of all these properties was answerable to the
respondents for their just shares in the intestate properties of
Jacobo.28 They asked for (a) the partition of their corresponding shares, the
cancellation of OCT No. 18797 issued in the name of Jose Ringor
underExpediente 244 and that these be subdivided among the seven
children of Jose Ringor, and the six children and grandchildren of Juan
Ringor; (b) the payment to plaintiffs of whatever maybe found as
chargeable to the late Jose Ringor as trustee, as well as liability for
administering these properties from the time of Jose's death up to the time
the case is terminated; and (c) the payment of attorney's fees, surveyor's
expenses and cost of the suit.29
In their Answer, herein petitioners insisted that they rightfully own and
possess the disputed lands. They alleged that their father acquired
legitimate title to and remained in continuous, uninterrupted and exclusive
possession and enjoyment of the said parcels of land in the concept of an
owner at varying times since 1917, 1923, and 1928, as evidenced by the
certificates of title issued more than thirty (30) years ago and in some
cases more than fifty (50) years ago, before the present suit was instituted
by respondents. They claimed that Jacobo sold the parcels of land
under Expediente Nos. 4449 and 241 to Jose for valuable consideration on
November 3 and 6, 1928, respectively, evidenced by notarial deeds of sale
duly registered in the Registry of Deeds of Pangasinan. The other disputed
lands sought to be divided, petitioners assured, were held by Jose as
exclusive owner.
In their Amended Answer, petitioners averred that the parcels of land in
the exclusive name of Jose are his exclusive properties acquired by him
either by inheritance, homestead patent, or purchase. They claimed that
Jose had long acquired indefeasible and incontrovertible title to the said
properties in accordance with the provisions of the Land Registration Act.
These are evidenced by OCT No. 18797 issued March 6, 1919 for Lots Nos.
1, 2, 3, 4, 5, Plan Psu-6099; OCT No. 23797 on May 6, 1922 for Plan Psu15467; TCT No. 5090 issued December 12, 1929 for Lot No. 3, Plan Psu6095; TCT No. 15918 issued February 15, 1940 for Lots Nos. 1 & 2, Plan
Psu-6095 Amd; TCT No. 15917 on February 15, 1940 for Lots Nos. 1 & 2,
Plan Psu-35491; and TCT No. 15916 issued February 15, 1940 for Plan Psu31271, now TCT No. 93019 issued November 22, 1971. Further, according
to petitioners, whatever cause or right of action, if any, the respondents
had with respect to the properties owned and possessed by them and their
late father, including those based on constructive trust, it had long been
barred by prescription and laches and/or prior judgments since it is an
incontrovertible fact that Jose had been, for more than thirty (30) years
and in some cases for more than fifty (50) years, the exclusive registered
owner of the registered properties. 30Lastly, petitioners asserted that
respondents' claim of express trust concerning the properties in question
could not be proved by parol evidence.
While trial of the case was in progress, Julio Monsis, alleging he was the
only child of Macaria Discipulo and Jacobo, filed a Complaint in
Intervention. So did Leocadia Ringor, alleging she was the only child of
Jacobo with Marcelina Gimeno. When Julio died on February 3, 1977, he
was survived by his wife Felipa and their legitimate children Maria,
Federico, Eusebio, Paciencia, Panfilo and Fermin, all surnamed Monsis. On
July 8, 1982, herein respondents filed an Amendment to their Amended
Complaint impleading as additional party-defendants, the Heirs of Jose M.
Ringor, Inc.31
On February 10, 1995, the RTC decided in favor of respondents. The
dispositive portion of the Decision set forth its judgment:
(a) Declaring the 7 children of Juan L. Ringor who are the
grandchildren of Jacobo Ringor, namely: Jose, Genoveva, Felipa,
Concordia, Agapito, Emeteria and Espirita, all surnamed Ringor, as
pro-indiviso co-owners of all the lands covered by Expediente Nos.
241, 244 and 4449 described in pages 2, 3, 4 and 5 of this decision
brought under the Land Registration Act and now covered by TCT
No. 15918 (Lots 1 and 2) and TCT 5090 (Lot No. 3) in the name of
Jose Ringor (Expediente 241); TCT No. 15916 in the name of
defendant Heirs of Jose M. Ringor, Inc. (Lot 1, Expediente 2449);
TCT No. 15917 (Lots 2 and 3, Expediente 4449); and TCT No. 18797
(Lots 1, 2, 3, 4 and 5, Expediente 244), in the name of Jose Ringor;
(b) Ordering the partition of the said parcels of land covered by TCT
Nos. 15918, 5090, 15916, 15917 and 18797, all of the Register of
Deeds of Pangasinan, among Jose, Genoveva, Felipa, Concordia,
Agapito, Emeteria and Espirita, all surnamed Ringor into 7 equal
parts;
45
46
Briefly stated, the issues to be resolved in this petition are: (1) Were the
factual findings of the lower and appellate courts supported by evidence
on record? (2) Was there a valid express trust established by Jacobo
Ringor? (3) May parol evidence be used as proof of the establishment of
the express trust? (4) Did the court in effect nullify the Torrens titles over
the disputed parcels of land? (5) Were respondents' action barred by
prescription and laches?
47
From all these premises and the fact that Jose did not repudiate the claim
of his co-heirs, it can be concluded that as far as the lands covered
by Expediente Nos. 241 and 4449 are concerned, when Jacobo transferred
these lands to Jose, in what the lower court said were simulated or falsified
sales, Jacobo's intention impressed upon the titles of Jose a trust in favor of
the true party-beneficiaries, including herein respondents.
Under the doctrine of partial performance recognized in this jurisdiction,
the objection to the oral character of a trust may be overcome or removed
where there has been partial performance of the terms of the trust as to
raise an equity in the promisee. 52 A trustee may perform the provisions of
the trust, and if he does, the beneficiary is protected in benefits that he
has received from such performance.53 Thus, when a verbal contract has
been completed, executed or partially consummated, its enforceability will
not be barred by the Statute of Frauds, which applies only to an executory
agreement.54 Noteworthy, despite the compraventas transferring the lands
in his name, Jose unfailingly gave his siblings their share of the produce of
the lands. Furthermore, not only did he fail to repudiate the trust, he also
assured his co-heirs that it was the inconvenience of partitioning that kept
him from transferring the shares of his siblings to them. Accordingly, with
respect to the lands covered by Expediente Nos. 241 and 4449, an express
trust exists with Jose Ringor as trustee in favor of all the heirs of Jacobo
Ringor. As far as prescription or laches are concerned, they pose no
hindrance or limitation to the enforcement of an express trust. 55
Finally, on the lands covered in Expediente 244, we note that as a
"donacion de su abuelo," the donation impaired the hereditary rights of
succession of Jose's co-heirs. Nevertheless, these were transferred to Jose
by final judgment of the land registration court. Despite the registration in
Jose's name, Jose did not take possession over them from the date of
registration to the time of Jacobo's death. Instead, while alive, Jacobo
retained possession, and continued the administration of the lands.
Considering then these circumstances, Article 1449 of the New Civil Code
on implied trusts is the pertinent law. It provides that, "[t]here is also an
implied trust when a donation is made to a person but it appears that
although the legal estate is transmitted to the donee, he nevertheless is
either to have no beneficial interest or only a part thereof." Article 1449
creates a resulting trust where the donee becomes the trustee of the real
beneficiary.56 Generally, resulting trusts do not prescribe except when the
trustee repudiates the trust.57 Further, the action to reconvey does not
prescribe so long as the property stands in the name of the trustee. 58 To
allow prescription would be tantamount to allowing a trustee to acquire
title against his principal and true owner. 59 Here, Jose did not repudiate the
trust, and the titles of the disputed lands are still registered in Jose's name
or in the name of the Heirs of Jose M. Ringor, Inc.
48
Petitioners contend, however, that the court a quo virtually nullified all the
land titles in Jose's name when it declared that the disputed lands belong
to the intestate estate of Jacobo and Jose and his siblings were co-owners
thereof. This, petitioners aver, violates the principle of res judicata and the
indefeasibility of the Torrens title.
Nothing is farther from the truth than this contention. A trustee who
obtains a Torrens title over a property held in trust for him by another
cannot repudiate the trust by relying on the registration. 60 A Torrens
Certificate of Title in Jose's name did not vest ownership of the land upon
him. The Torrens system does not create or vest title. It only confirms and
records title already existing and vested. It does not protect a usurper from
the true owner.61 The Torrens system was not intended to foment betrayal
in the performance of a trust. 62 It does not permit one to enrich himself at
the expense of another. Where one does not have a rightful claim to the
property, the Torrens system of registration can confirm or record
nothing.63 Petitioners cannot rely on the registration of the lands in Jose's
name nor in the name of the Heirs of Jose M. Ringor, Inc., for the wrong
result they seek. For Jose could not repudiate a trust by relying on a Torrens
title he held in trust for his co-heirs.64 The beneficiaries are entitled to
enforce the trust, notwithstanding the irrevocability of the Torrens title. The
intended trust must be sustained.
lands for himself until his death, and it was to be understood that Jose was
merely a trustee. We are not inclined to disturb these findings and
conclusions of the trial court, sustained by the Court of Appeals, which
persuasively convince us that the transfers of the lands in Expedientes 241
and 4449 were simulated sales, and in Expediente 244 the transfers were
invalid donations.
WHEREFORE, the petition is DENIED for lack of merit. The Decision dated
November 27, 2000 of the Court of Appeals, affirming the Decision of the
Regional Trial Court, formerly the Court of First Instance of Dagupan City,
Branch 43, is hereby AFFIRMED. Costs against petitioners.
SO ORDERED.
Davide, Jr.,
JJ., concur.
C.J.,
(Chairman),
Ynares-Santiago,
Carpio,
and
Azcuna,
49
FIRST DIVISION
Present:
AUSTRIA-MARTINEZ,
CALLEJO, SR. and
CHICO-NAZARIO, JJ.
Promulgated:
Helen P. Cayetano,
Respondents.
x------------------------------------------------x
DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the
1997 Rules of Civil Procedure assailing the Decision [1] dated August 22,
2001 of the Court of Appeals (CA) in CA-G.R. CV No. 57719 which set aside
the Decision dated July 22, 1997 of the Regional Trial Court, Branch 1,
Balanga, Bataan (RTC) in Civil Case No. 6223 and ordered Alberto Herbon,
Margarito Herbon and Gabino Herbon (petitioners) to vacate the subject
premises in favor of Leopoldo T. Palad and Helen P. Cayetano
(respondents).
The factual background of the case is as follows:
50
claiming that they have a right to possess and occupy a portion of Lot 421
as Lot 421, with an area of 32,944 square meters and covered by Transfer
as heirs of Remedios.[10]
Certificate of Title (TCT) No. 4408 of the Register of Deeds of Bataan. [2] The
extent of his co-ownership in Lot 421 is and 1/14.The other co-owners
of Lot 421 and their respective shares were: Jacinto Palad (Jacinto), and
1/14; Spouses Juan Banzon and Elena Gutierrez, 1/14; Francisco Palad,
1/14;
Lorenzo
Palad,
1/14;
Ramon
Nojadera,
1/28;
and,
1/28;
Ana
Nojadera,
Concordia
Nojadera
Ignacio,
respondents
father,
expressed
his
intentions
regarding
the
disposition
of
his
properties, which included his share in Lot 421 and a 173-square meter lot
in Pag-asa, Bagac, Bataan (Pag-asa property); that Gonzalo intended that
the Pag-asa property would be given to Remedios and the same would be
left to her granddaughter, Merlita Herbon Espiritu (Merlita), [11] eldest
daughter of petitioner Gabino Herbon; that Gonzalos share in Lot 421
should be left to Ignacio; that the Pag-asa property has already been
transferred to Merlita in accordance with the wishes of Gonzalo; that it was
the Palad tradition that land inherited by members of the clan shall be
during
the
Japanese
Occupation,
Alejandra
51
Jornal, also a rebuttal witness, testified that she is the Concordia Nojedera
registered owner.
mentioned in the TCT but disowned the Deed of Absolute Sale dated
December 16, 1957 and her purported signature therein.
On July 22, 1997, the RTC rendered its Decision dismissing the
complaint and ordering respondents to pay petitioners P3,000.00 as
attorneys fees and the cost of suit. [14] The RTC held that the action for
recovery of possession cannot prosper since petitioners proved that they
are co-owners of the subject property based on the two deeds of absolute
sale; that Remedios inherited a portion of Gonzalos share in Lot 421; that
when Remedios died in 1992, her shares in Lot 421 were inherited by her
three sons, herein petitioners; that being co-owners, petitioners cannot be
ejected since no definite portion of Lot 421 was allotted to petitioners and
respondents.
Dissatisfied, respondents filed an appeal with the CA, docketed as
CA-G.R. CV No. 57719. On August 22, 2001, the CA set aside the Decision
of the RTC and ordered petitioners to vacate the subject premises in favor
of the respondents.
favor of Benjamin when he paid the price for Jacintos shares in Lot 421 in
the Deed of Absolute Sale dated December 9, 1957; that the Deed of
credence since she did not give details of the transaction which she
witnessed.
[15]
Concordia is void since Concordia vehemently denied that she signed said
document and the striking similarity of the signatures of Modesta and
Concordia points to forgery; that respondents have a better title than
petitioners,
considering
the
absence
of
any
relationship
between
52
findings of facts are conflicting; (6) when in making its findings the CA
without the benefit of the two deeds of sale, they cannot be ousted
went beyond the issues of the case, or its findings are contrary to the
admissions of both the appellant and the appellee; (7) when the findings
are contrary to the trial court; (8) when the findings are conclusions
without citation of specific evidence on which they are based; (9) when the
facts set forth in the petition as well as in the petitioners main and reply
briefs are not disputed by the respondent; (10) when the findings of fact
are premised on the supposed absence of evidence and contradicted by
the evidence on record; (11) when the CA manifestly overlooked certain
relevant facts not disputed by the parties, which, if properly considered,
would justify a different conclusion.[22] The Court finds that exceptions (2),
(4), (5), and (7) apply to the present petition.
On the matter of implied trust, Article 1448 of the Civil Code
provides:
Art. 1448. There is an implied trust when property
is sold, and the legal estate is granted to one party
but the price is paid by another for the purpose of
having the beneficial interest of the property. The
former is the trustee, while the latter is the
beneficiary. However, 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. (Emphasis supplied)
impossible; (3) when there is grave abuse of discretion; (4) when the
53
party asserting its existence, and such proof must be clear and
satisfactorily show the existence of the trust and its elements. [24] While
implied trusts may be proved by oral evidence, [25] the evidence must be
aids are required and no further extraneous sources are necessary in order
trustworthy and received by the courts with extreme caution, and should
not
indefinite
itself.[31] The Court is thus convinced that the deed expresses truly the
parties' intent as against the oral testimony that Benjamin paid the
be
made
to
rest
on
loose,
equivocal
or
existence of an implied trust is lean, frail and far from convincing. The
testimonies of Bayani and Maria that Benjamin, instead of Gonzalo, paid for
Jacintos shares in Lot 421 are vague and contain no specificities. [29] Their
testimonies do not show that the payment was intended to establish a
trust relationship. Said witnesses are complete strangers in so far as the
intent of the parties to the contract is concerned.
by Modesta and
Concordia,
the
rule
is
settled
that
the
renders it admissible in court without further proof of its authenticity [35] and
the intention of the parties, which is the law among them. Ultimately, their
is entitled to full faith and credit upon its face. [36] A notarized document
carries the evidentiary weight conferred upon it with respect to its due
from the unilateral post facto assertions of one of the parties, or even third
parties who are strangers to the contract. And when the terms of the
force and effect so long as he who impugns it does not present strong,
understood literally, just as they appear on the face of the contract. [30]
54
in question should belong only to the Palad clan cannot supersede the law
on intestate succession.
Mere denial by Concordia that she signed the deed [40] cannot
prevail
over
the
positive
presumption
enjoyed
by
The and 1/14 shares in Lot 421 Gonzalo acquired during his
notarial
marriage to his first wife, Alejandra, are conjugal shares, [44] such that upon
upon her death to her legitimate children and surviving spouse Gonzalo.
[46]
Under the Old Civil Code which was then in force, Gonzalo was entitled
share
in
the
conjugal
partnership
and
his
usufructory right were brought into his second marriage with Remedios.
during the marriage of Gonzalo and Remedios, they are also conjugal
shares,[49] such that upon the death of Gonzalo, one-half of the subject
her share in the conjugal partnership. [50] Gonzalos rights to the other half,
including his conjugal share from his first marriage, were transmitted upon
his death to his widow Remedios and his children with his first wife
Alejandra.[51] Upon the death of Remedios, the shares in Lot 421 which she
inherited from Gonzalo, are inherited in turn by her three sons, herein
petitioners, being her compulsory heirs.[52]
Thus, petitioners, as co-owners, have the right to posses and
occupy Lot 421. Until there is partition, the New Civil Code provisions on
co-ownership shall govern the rights of the parties. The specific shares of
55
the parties cannot be resolved in this case since it is not clear from the
records whether all of Gonzalos children from his first marriage were alive
at the time of his death. An action for partition is the proper forum to
determine the particular portions properly pertaining to petitioners and
PANGANIBAN, J.:
In denying this petition, the Court takes this occasion to apply the
principles of implied trust. As an exception to the general rule barring
factual reviews in petitions under Rule 45, the Court wades into the
transcript of stenographic notes only to find that the Court of Appeals,
indeed, correctly overturned the trial courts findings of facts.
The Case
56
After leaving Manila City Hall, Cruz and Rodolfo Tigno left for Lingayen,
Pangasinan (TSN, Sept. 5, 1989, p. 15).
On May 2, 1980, Cruz, together with Bienvenido Sison, Manuel Sison,
Adelaida Sison and Remedios Sison went to appellants house at Guilig
Street, Lingayen, Pangasinan. At around 5:00 o clock in the afternoon, the
abovenamed persons and appellant went to Atty. Modesto Manuels house
at Defensores West Street, Lingayen, Pangasinan for the preparation of the
appropriate deeds of sale (TSN, Sept. 5, 1989, pp. 15-17).
At Atty. Manuels house, it was learned that Bienvenido Sison failed to bring
the tax declarations relating to his property. Also, Remedios Sison had
mortgaged her property to a certain Mr. Tuliao, which mortgage was then
existent. Further, Manuel Sison did not have a Special Power of Attorney
from his sister in the United States of America to evidence her consent to
the sale. In view thereof, no deed of sale was prepared on that day (TSN,
Sept. 5, 1989, pp. 17-19).
However, despite the fact that no deed of sale was prepared by Atty.
Manuel, Remedios Sison, Bienvenido Sison and Manuel Sison asked
appellant to pay a fifty percent (50%) downpayment for the properties. The
latter acceded to the request and gave Five Thousand Pesos (P5,000.00)
each to the 3 abovenamed persons for a total of Fifteen Thousand Pesos
(P15,000.00) (TSN, Sept. 5, 1989, pp. 19-20).This was witnessed by Cruz
and Atty. Manuel. After giving the downpayment, appellant instructed Cruz
and Atty. Manuel to place the name of Rodolfo Tigno as vendee in the
deeds of sale to be subsequently prepared. This instruction was given to
enable Rodolfo Tigno to mortgage these properties at the Philippine
National Bank (PNB), Lingayen Branch, for appropriate funds needed for
the development of these parcels of land as fishponds (TSN, Sept. 27,
1989, pp. 16-23).
On May 6, 1980, May 12, 1980 and June 12, 1980, the appropriate deeds of
sale (Exhs. A, B, C) were finally prepared by Atty. Manuel and signed by
Bienvenido Sison, the heirs of Isaac Sison (Manuel, Gerardo and Adelaida
Sison), and Remedios Sison, respectively. In all these deeds of sale, Rodolfo
Tigno was named as vendee pursuant to the verbal instruction of herein
appellant. Cruz, the agent in the sale, signed in these three (3) deeds of
sale as a witness (Exhs. A-2, B-1 and C-1).
Sometime in the second week of July 1980, Cruz brought and showed these
deeds of sale to appellant in his Makati office. After seeing these
documents, appellant gave Cruz a Pacific Bank check in the amount of
Twenty Six Thousand Pesos (P26,000.00) representing the following:
a) P15,000.00 as the balance for the three (3) parcels of land;
57
The plaintiff further averred in said Complaint that some time on May 16,
1989, when he was in Lingayen, Pangasinan, he came to know from friends
that Rodolfo was negotiating the sale to defendant spouses of a portion of
one of the parcels of land; that after requesting in writing the defendantspouses to desist from buying the land, and after confronting Rodolfo
himself, plaintiff found out upon verification with the Register of Deeds of
Lingayen, that Rodolfo had already sold on April 29, 1989 said portion of
508.56 square meters to his co-defendant spouses who had previous
knowledge that plaintiff, and not Rodolfo Tigno, is the real owner of said
lands; that there being a violation of trust and confidence by defendant
Rodolfo, plaintiff demanded from said defendants the reconveyance of said
lands, the surrender of the possession thereof to him and the cancellation
of the Deed of Sale of said portion of 508.56 square meters, but all the
demands were unjustifiably refused.
In their Answer (pp. 8-11, records), defendants denied the material
allegations of the complaint and alleged, by way of special and affirmative
defense, that Rodolfo M. Tigno became the absolute and exclusive owner
of the parcels of land having purchased the same after complying with all
legal requirements for a valid transfer and that in selling a portion thereof
to his co-defendants, he was merely exercising his right to dispose as
owner; and that defendant spouses Casipit acquired the portion of 508.56
square meters in good faith and for value, relying upon the validity of the
vendors ownership.
After trial on the merits, the trial court [7] dismissed the complaint and
disposed as follows:[8]
Wherefore, in the light of the facts and circumstances discussed above, the
court hereby renders judgment against the plaintiff and in favor of the
defendants.
1. Ordering the dismissal of the plaintiffs complaint for lack of basis in fact
and in law;
2. Ordering the plaintiff to pay the defendants the sum of three thousand
(P3,000.00) pesos as attys fees and further to pay the costs of the
proceedings.
As earlier stated, Respondent Court reversed the trial court. Hence,
this petition for review.
The Issues
58
[9]
1. It is a relationship;
59
created in order to effectuate what the law presumes to have been the
intention of the parties in the circumstances that the person to whom the
land was conveyed holds it as trustee for the person who supplied the
purchase money.[18]
To give rise to a purchase money resulting trust, it is essential that there
be:
1. an actual payment of money, property or services, or an equivalent,
constituting valuable consideration;
2. and such consideration must be furnished by the alleged beneficiary of a
resulting trust.[19]
There are recognized exceptions to the establishment of an implied
resulting trust. The first is stated in the last part of Article 1448 itself. Thus,
where A pays the purchase money and title is conveyed by absolute deed
to As child or to a person to whom A stands in loco parentis and who
makes no express promise, a trust does not result, the presumption being
that a gift was intended. Another exception is, of course, that in which an
actual contrary intention is proved. Also where the purchase is made in
violation of an existing statute and in evasion of its express provision, no
trust can result in favor of the party who is guilty of the fraud. [20]
ATTY. BERMUDEZ
Q I am showing to you another document, which we respectfully
request that the same be marked as Exhibit 17.
In any event, these two exhibits are proof merely of the receipt of
money by the seller; they do not show that Rodolfo paid the balance of the
purchase price.[28] On the other hand, Witness Dominador Cruz was
unshakable in testifying that Private Respondent Eduardo, though not
named in the receipts or in the deeds of sale, was definitely the real buyer:
[29]
60
Q The document is already defective, why did you not ask the
preparation of the document to be executed by Rodolfo
Tigno accordingly that the real owner who sold to you is the
brother, Eduardo Tigno?
A I did not think of it, what I know is that the real owner is
Eduardo Tigno, sir, and has the power to disposed.
COURT:
COURT:
Q Being the agent of this transaction did you not try to advice
Eduardo Tigno to be safe for him a document will have to be
executed showing that he is really the vendee?
Q Eduardo Tigno is the real owner, why did you agree that
Rodolfo Tigno to execute the document?
ATTY. VIRAY:
COURT
Will you please tell the Court what is the reason, if ever there
was, why the plaintiff, Eduardo Tigno, instructed you to put
the name of Rodolfo Tigno as vendee in the papers?
ATTY. BERMUDEZ:
A The reason for [sic] Eduardo Tigno have trust and confidence
on his elder brother, Rodolfo Tigno.
COURT:
WITNESS:
Q Considering that you know that the money came from Eduardo
Tigno, why did you consent that the deed of absolute sale in
the name of Rodolfo Tigno and not Eduardo Tigno?
COURT:
Go ahead.
61
ATTY. VIRAY:
A Yes, sir.
Q When was that when the plaintiff instructed you to place the
name of his brother, the defendant, Rodolfo Tigno as vendee
in the documents so that the defendant, Rodolfo Tigno, could
use the properties as collateral for possible loan to the PNB?
Q Since he was going to the United States and he could not wait
the preparation of the documents he just instructed you to
go ahead with the first instruction, is that what you mean,
Mr. Witness?
WITNESS:
62
The trial courts conclusion that defendant-appellee is the true buyer and
owner of the lands in question, mainly relying on the Deeds of Sale where
defendant Rodolfos name appears as vendee, and on the Tax Declarations
and Tax payment receipts in his name, must inevitably yield to the clear
and positive evidence of plaintiff. Firstly, as has thus been fully established,
the only reason why defendant Rodolfo was made to appear as the buyer
in the Deeds of Sale was to facilitate their mortgage with the PNB Branch
at Lingayen to generate seed capital for the fishponds, out of which
Rodolfo could derive income. With Rodolfos name as vendee, there would
be no need anymore for the personal presence of plaintiff-appellant who
was very busy with his work in Manila. Moreover, aside from the fact that
plaintiff was to travel abroad for thirty (30) days sometime in June, 1980,
he could not have executed a Special Power of Attorney in favor of Rodolfo,
as the Deeds of Sale were not yet prepared on May 2, 1980. Thus, to
enable Rodolfo to mortgage the lands, his name was put as vendee in view
of the mutural [sic] trust and confidence existing between said parties who
are brothers. Secondly, it is well-settled that the tax declarations or the
payments of real estate taxes on the land are not conclusive evidence of
ownership of the declarant or payor (De Guzman v. CA, et al., L-47378,
Feb. 27, 1987, and cases cited therein; Cited in II Regalado REMEDIAL LAW
COMPENDIUM, p. 563 [1988]). Since defendant Rodolfo is named as
vendee in the Deeds of Sale, it is only natural that Tax Declarations and the
corresponding tax payment receipts be in his name so as to effect
payment thereof.
Petitioners contend that there was no fiduciary relationship created
between the brothers Tigno. Petitioners argue that Rodolfo Tigno had
exercised all the acts of dominion and ownership over the fishponds in
question, as nobody shared in the produce of the fishponds for the past
nine (9) years. Therefore, Petitioner Rodolfo, being the real purchaser of
the parcels of land, could validly transfer the ownership of a portion to
Spouses Casipit.[38]
We firmly reject these contentions and need only to cite Respondent
Courts incisive findings:
After a careful examination of the evidence on record, we hold that an
implied trust was created in favor of the plaintiff [private respondent
herein] within the meaning of Article 1448 of the Civil Code, which
provides:
Art. 1448. There is an implied trust when property is sold, and the legal
estate is granted to one party but the price is paid by another for the
purpose of having the beneficial interest of the property. The former is the
trustee, while the latter is the beneficiary. x x x.
63
An implied trust arises where a person purchases land with his own money
and takes conveyance thereof in the name of another. In such case, the
property is held on a resulting trust in favor of the one furnishing the
consideration for the transfer, unless a different intention or understanding
appears. (Lim vs. Court of Appeals, 65 SCRA 160)
In the earlier case of Heirs of Candelaria, et al. v. Romero, et al., 109 Phil.
500, the Supreme Court elucidated on implied trust:
On the other hand, the record is replete with clear and convincing evidence
to show that (1) plaintiff Eduardo Tigno is the real buyer and true owner of
the lands in question and (2) defendant Rodolfo M. Tigno is merely a
trustee constituted over said lands on behalf of plaintiff.
It is also the rule that an implied trust arises where a person purchases
land with his own money and takes a conveyance thereof in the name of
another. In such a case, the property is held on a resulting trust in favor of
the one furnishing the consideration for the transfer, unless a different
intention or understanding appears. The trust which results under such
circumstances does not arise from contract or agreement on the parties,
but from the facts and circumstances, that is to say, it results because of
equity and arises by implication or operation of law.
We disagree with the trial courts ruling that if, indeed, a trust has been
established, it is an express trust which cannot be proved by parol
evidence. It must be noted that Article 1441 of the Civil Code defines both
express trust and implied trust in general terms, thus:
When this check was encashed, Cruz paid the three vendors the balance
due them (TSN, Sept. 5, 1989, pp. 42-43). That plaintiff was able to pay
these amounts is believable, because plaintiff had the financial means to
pay said amounts. At the time of the sale in 1980, plaintiff was an
executive of Meryll Lynch, Pierce, Fennon S. Smith Phil., Inc., where he
received P311,700.79 in 1980 alone, as shown by his Certificate of Income
Tax Withheld on Wages for said year (Exhibit G for plaintiff).
Art. 1441. Trusts are either express or implied. Express trust are created by
the intention of the trustor or of the parties. Implied trust come into being
by operation of law.
Specific instances or examples of implied trusts are given in the Civil Code,
one of which is described under Article 1448 quoted heretofore. Since
Article 1448 is a specific provision, it prevails over and qualifies Article
1441, which is a general provision, under the rule generalia specialibus
non derogant. (Alcantara, Statutes, 1990 Ed., p. 101).
Therefore, since this case involves an implied trust falling under Article
1448, parol evidence is allowed to prove its existence pursuant to Article
1457, Civil Code, which states:
ATTY. VIRAY
Q When you said Dominador Cruz was able to bring the vendors
at Guilig street, Lingayen, what happened there?
A They came to our family home at Guilig street and we went to
the house of Atty. Modesto Manuel, sir.
Q Why did you go to the house of Atty. Manuel?
A For the executionof [sic] the deed of sale of the property I am
going to buy, sir.
Q Was the deed of sale finished on that day?
64
A No, sir.
A Yes, sir.
A The vendors did not bring the tax declarations, secondly, the
other heirs failed to get the power of attorney from their
sister in United States.
Q When the deed of sale were not executed on that day, what
transpired?
A The vendors requested for advance payment of P5,000.00 each
for the three parcels of land.
Q And was the deed of sale covering the three parcels of land
completed?
A Yes, sir.
Q Did you agree to the request of the vendors for the advance
payment of P5,000.00 each for the three parcels of land?
A Yes, sir.
A Yes, sir.
A Yes, sir.
A Yes, sir. After going over the documents, I issued to him a check
payable in the sum of P26,000.00.
65
ATTY. VIRAY:
Q You said Edualino Casipit very well knew that the property is
owned by you, what made you say that the defendant
Edualino Casipit very well knew that you are the owner of
the property he bought?
WHEREFORE,
premises
considered,
the
petition
is
hereby DENIED and the assailed Decision and Resolution are AFFIRMED in
toto. Costs against petitioners.
SO ORDERED.
Narvasa,
JJ., concur.
C.J.,
(Chairman),
C.J.,
Romero,
ATTY. VIRAY:
Q What if you invited them, sign that from that time you were the
one who bought the parcels of land?
A Yes, sir.
Second, also uncontested is the testimony of Dominador Cruz that he
met Edualino on April 24, 1989, or five (5) days before the consummation
of the sale between Rodolfo and Spouses Casipit. During that meeting,
Cruz told Edualino that he bought from private respondent a portion of the
66
1. Declaring the Plaintiffs the absolute and rightful owners of the premises
in question;
2. Ordering the Defendants-Intervenor to:
a. vacate from the premises in question;
b. remove the beauty shop thereat;
DECISION
DAVIDE, JR., J.:
In this petition for review on certiorari under Rule 45 of the Rules of
Court, petitioners urge this Court to reverse the 20 April 1994 decision of
the Court of Appeals (Seventeenth Division) in CA-G.R. CV No. 34936,
[1]
which affirmed in toto the 26 August 1991 decision of the Regional Trial
Court of Calbayog City in Civil Case No. 265.
Civil Case No. 265 was an action for recovery of possession of land
and damages with a prayer for a writ of preliminary mandatory injunction
filed by private respondents herein, spouses Ranulfo Ortiz, Jr. and Erlinda
Ortiz, against Rodolfo Morales. The complaint prayed that private
respondents be declared the lawful owners of a parcel of land and the twostorey residential building standing thereon, and that Morales be ordered
to remove whatever improvements he constructed thereon, vacate the
premises, and pay actual and moral damages, litigation expenses,
attorney's fees and costs of the suit.
On 2 February 1988, Priscila Morales, one of the daughters of late
Rosendo Avelino and Juana Ricaforte, filed a motion to intervene in Case
No. 265. No opposition thereto having been filed, the motion was granted
on 4 March 1988.[2]
On 30 November 1988 Rodolfo Morales passed away. In its order of 9
February 1989[3] the trial court allowed his substitution by his heirs, Roda,
Rosalia, Cesar and Priscila, all surnamed Morales. Thereafter, pre-trial and
trial on the merits were had and the case was submitted for decision on 16
November 1990.
On 26 August 1991 the Trial Court rendered its decision [4] in favor of
plaintiffs, private respondents herein, the dispositive portion of which reads
as follows:
SO ORDERED.[5]
The following is trial courts summary of the evidence for the plaintiffs:
The evidence adduced by the Plaintiffs discloses that the Plaintiffs are the
absolute and exclusive owners of the premises in question having
purchased the same from Celso Avelino, evidenced by a Deed of Absolute
Sale (Exh. C), a public instrument. They later caused the transfer of its tax
declaration in the name of the female plaintiff (Exh. I) and paid the realty
taxes thereon (Exh. K & series).
Celso Avelino (Plaintiffs predecessor in interest) purchased the land in
question consisting of two adjoining parcels while he was still a bachelor
and the City Fiscal of Calbayog City from Alejandra Mendiola and Celita
Bartolome, through a Escritura de Venta (Exh. B). After the purchase, he
caused the transfer of the tax declarations of the two parcels in his name
(Exhs. D & E to G & H) as well as consolidated into one the two tax
declarations in his name (Exh. F). With the knowledge of the Intervenor
and the defendant, (Cross-examination of Morales, t.s.n. pp. 13-14) Celso
Avelino caused the survey of the premises in question, in his name, by the
Bureau of Lands (Exh. J). He also built his residential house therein with
Marcial Aragon (now dead) as his master carpenter who was even scolded
by him for constructing the ceiling too low.
67
When the two-storey residential house was finished, he took his parents,
Rosendo Avelino and Juana Ricaforte, and his sister, Aurea, who took care
of the couple, to live there until their deaths. He also declared this
residential house in his tax declaration to the premises in question (Exh. F)
and paid the corresponding realty taxes, keeping intact the receipts which
he comes to get or Aurea would go to Cebu to give it to him (t.s.n. Morales,
pp. 4-6).
Due to the damages they sustained as a result of the filing of this case, the
plaintiffs are claiming P50,000.00 for mental anguish; monthly rental of the
premises in question of P1,500.00 starting from March 1987; litigation
expenses of P5,000.00 and P10,000.00 for Attorney's fees.[6]
Inasmuch as the Plaintiffs are the purchasers of the other real properties of
Celso Avelino, one of which is at Acedillo (now Sen. J.D. Avelino) street,
after they were offered by Celso Avelino to buy the premises in question,
they examined the premises in question and talked with the defendant
about that fact, the latter encouraged them to purchase the premises in
question rather than the property going to somebody else they do not
know and that he will vacate the premises as soon as his uncle will notify
him to do so. Thus, they paid the purchase price and Exh. C was executed
in their favor.
However, despite due notice from his uncle to vacate the premises in
question (Exh. N), the defendant refused to vacate or demolish the beauty
shop unless he is reimbursed P35,000.00 for it although it was valued at
less than P5,000.00. So, the Plaintiffs demanded, orally and in writing
(Exhs. L & M) to vacate the premises. The defendant refused.
As the plaintiffs were about to undertake urgent repairs on the dilapidated
residential building, the defendant had already occupied the same, taking
in paying boarders and claiming already ownership of the premises in
question, thus they filed this case.
Plaintiffs, being the neighbors of Celso Avelino, of their own knowledge are
certain that the premises in question is indeed owned by their predecessorin-interest because the male plaintiff used to play in the premises when he
was still in his teens while the female plaintiff resided with the late Judge
Avelino. Besides, their inquiries and documentary evidence shown to them
by Celso Avelino confirm this fact.Likewise, the defendant and Intervenor
did not reside in the premises in question because they reside respectively
in Brgy. Tarobucan and Brgy. Trinidad (Sabang), both of Calbayog City with
their own residential houses there.
The trial courts summary of the evidence for the defendants and
intervenor is as follows:
The premises in question was acquired by Celso Avelino who was entrusted
by Rosendo with the money to buy it. Rosendo let Celso buy it being the
only son. The property is in the name of Celso Avelino and Rosendo told his
children about it (TSN, Morales, p. 21). In 1950 Rosendo secured gratuitous
license (Exh. 1) and constructed the two-storey house, having retired as
Operator of the Bureau of Telecommunications, buying lumber from the
father of Simplicia Darotel and paying the wages of Antonio Nartea as a
laborer.
In 1979, defendant Rodolfo Morales constructed beside the two-storey
house and beauty shop for his wife with the consent of Celso and the
latters sisters.
Priscila Morales was aware that the premises in question was surveyed in
the name of Celso but she did not make any attempt, not even her
father, to change the muniment of title to Rosendo Avelino. Despite the
fact that Intervenor has two sons who are lawyers, no extra-judicial
settlement was filed over the premises in question since the death of
Rosendo Avelino up to the present.
Celso Avelino kept the receipts for the realty tax payments of the premises.
Sometimes Aurea would go to Cebu to deliver these receipts to Celso or
the latter will come to get them. Rodolfo also gave some of the receipts to
Celso.
68
69
70
71
72
3. Was there basis for the award of damages, attorneys fees and
litigation expenses to the private respondents?
Art. 1448. There is an implied trust when property is sold, and the legal
estate is granted to one party but the price is paid by another for the
purpose of having the beneficial interest of the property. The former is the
trustee, while the latter is the beneficiary. However, 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.
I
A trust is the legal relationship between one person having an
equitable ownership in property and another person owning the legal title
to such property, the equitable ownership of the former entitling him to the
performance of certain duties and the exercise of certain powers by the
latter.[12] The characteristics of a trust are:
The trust created under the first sentence of Article 1448 is sometimes
referred to as a purchase money resulting trust.[17] The trust is created in
order to effectuate what the law presumes to have been the intention of
the parties in the circumstances that the person to whom the land was
conveyed holds it as trustee for the person who supplied the purchase
money.[18]
1. It is a relationship;
73
74
showing that it was reached arbitrarily. [33] In this case, petitioners failed to
assail, much less overcome, the following observation of the trial court:
Six. On the witness chair, Intervenors demeanor and manner of testifying
show that she was evasive and shifty and not direct in her answers to
simple questions that she was admonished by the Court not to be evasive
and direct and categorical in her answers; and which rendered her
testimony unworthy of full faith and credit.[34]
Likewise fatal to petitioners cause is that Concepcion Peraltas sworn
Confirmation dated 14 May 1987 cannot be considered hearsay evidence
due to Concepcions failure to testify. On the contrary, it is an exception to
the hearsay rule under Section 38 of Rule 130 of the Rules of Court, it
having been offered as evidence of an act or declaration against
interest. As declarant Concepcion was a daughter of Rosendo Avelino and
Juana Ricaforte, and a sister of Celso Avelino and intervenor Priscila
Morales, Concepcion was thus a co-heir of her siblings, and would have
had a share, equal to that of each of her co-heirs, in the estate of Rosendo
and Juana. However, Concepcion explicitly declared therein thus:
That my aforenamed brother [Celso Avelino], during the time when he was
City Fiscal of Calbayog City and still a bachelor, out of his own money,
bought the parcels of land located at corner Umbria Street and Rosales
Blvd., Brgy. Central, Calbayog City, from Culets Mendiola de Bartolome and
Alejandra Fua Mendiola by virtue of a Deed of Sale entered as Doc. No. 37;
Page No. 20; Book No. XI; Series of 1948 in the Notarial Book of Atty.
Celedonio Alcazar, Notary Public of Calbayog, Samar; Likewise, out of his
own money, he constructed a residential building on the lot which building
is made of strong materials.
If indeed the property was merely held in trust by Celso for his parents,
Concepcion would have been entitled to a proportionate part thereof as coheir. However, by her Confirmation, Concepcion made a solemn declaration
against interest. Petitioners, realizing that the Confirmation was
admissible, attempted to cushion its impact by offering in evidence as
Exhibit 4[35]Concepcions affidavit, dated 16 June 1987, wherein Concepcion
stated:
3. The property in question (particularly the house), however forms part of
the state of our deceased parents, and, therefore, full and complete
conveyance of the right, title and interest in and to such property can only
be effected with the agreement of the other heirs, namely, my sisters
Trinidad A. Cruz and Priscila A. Morales, and myself.
Note that Concepcion seemed to be certain that only the house formed
part of the estate of her deceased parents. In light of the equivocal nature
of Concepcions later affidavit, the trial court and the Court of Appeals did
not then err in giving more weight to Concepcions earlier Confirmation.
At bottom, the crux of the matter is whether petitioners discharged
their burden to prove the existence of an implied trust. We rule in the
negative. Priscilas justification for her and her sisters failure to assert coownership of the property based on the theory of implied trust is, to say
the least, flimsy. In light of their assertion that Celso Avelino did not have
actual possession of the property because he was away from Calbayog
continuously for more than 30 years until he died on October 31, 1987,
[36]
and the established fact that the tax declarations of the property were
in Celsos name and the latter paid the realty taxes thereon, there existed
no valid and cogent reason why Priscila and her sisters did not do anything
to have their respective shares in the property conveyed to them after the
death of Rosendo Avelino in 1980. Neither is there any evidence that
during his lifetime Rosendo demanded from Celso that the latter convey
the land to the former, which Rosendo could have done after Juanas death
on 31 May 1965. This omission was mute and eloquent proof of Rosendos
recognition that Celso was the real buyer of the property in 1948 and the
absolute and exclusive owner thereof.
II
Was Rodolfo Morales a builder in good faith? Petitioners urge us to so
rule and apply Article 448 of the Civil Code, which provides:
The owner of the land on which anything has been built, sown or planted in
good faith, shall have the right to appropriate as his own the works, sowing
or planting, after payment of the indemnity provided for in articles 546 and
548, or to oblige the one who built or planted to pay the price of the land,
and the one who sowed, the proper rent. However, the builder or planter
cannot be obliged to buy the land if its value is considerably more than
that of the building or trees. In such case, he shall pay reasonable rent, if
the owner of the land does not choose to appropriate the building or trees
after proper indemnity. The parties shall agree upon the terms of the lease
and in case of disagreement, the court shall fix the terms thereof.
Clearly, Article 448 applies only when the builder, planter or sower
believes he has the right to so build, plant or sow because he thinks he
owns the land or believes himself to have a claim of title. [37] In the instant
case Rodolfo Morales knew from the very beginning that he was not the
owner of the land. He alleged in his answer that the land was acquired by
his grandparents Rosendo Avelino and Juana Ricaforte and he constructed
the shop building in 1979 upon due permission and financial assistance
from his mother, Priscila A. Morales and from his aunts Trinidad A. Cruz and
75
Concepcion A. Peralta ..., with the knowledge and consent of his uncle
Celso Avelino.[38]
Petitioners, however, contend that:
Even assuming the argument that Rodolfo Morales was a builder in bad
faith because he was aware of Celso Avelinos supposed exclusive
ownership of the land, still, however, the unrebutted evidence shows that
Celso Avelino consented to Rodolfo Morales construction of the beauty
shop on the land. TSN, April 4, 1988, p. 40; TSN, April 4, 1988, p. 40; TSN,
October 19, 1990, p. 21. Under Article 453 of the Civil Code, such consent
is considered bad faith on the part of the landowner. In such a case, the
rights of the landowner and the builder shall be considered as though both
acted in good faith.[39]
This so-called unrebutted testimony was rejected by the courts below,
and with good reason. First, it was clearly self-serving and inconsistent with
petitioners vigorous insistence that Celso Avelino was away from Calbayog
City continuously for more than 30 years until he died on October 31,
1987.[40] The circumstances of when and where allegedly the consent was
given are unclear. Second, only Celso Avelino could have rebutted it; but
the testimony was given after Avelinos death, thus forever sealing his
lips. Reason and fairness demand that the attribution of an act to a dead
man must be viewed with utmost caution. Finally, having insisted with all
vigor that the land was acquired by Rosendo Avelino and Juanita Ricaforte,
it would be most unlikely that Rodolfo would have taken the trouble of
securing Celsos consent, who had been continuously away from Calbayog
City for more than 30 years, for the construction of the shop building.
III
We cannot however give our affirmance to the awards of moral
damages, attorneys fees and litigation expenses.
Pursuant to Article 2217 of the Civil Code, moral damages, which
include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation,
and similar injury may be recovered in the cases enumerated in Article
2219 and 2220 of the same Code.[41] For moral damages to be recovered, it
must be shown that they are the proximate result of the defendant's
wrongful act or omission in the cases provided for in Articles 2219
and 2220, i.e., it must be shown that an injury was suffered by the
claimant and that such injury sprang from any of the cases stated in
Articles 2219 and 2220.[42] Moral damages are emphatically not intended to
enrich a plaintiff at the expense of the defendant. They are awarded only
to enable the injured party to obtain means, diversion, or amusements that
76
SECOND DIVISION
MARCELITO D. QUEVADA, G.R. No. 140798
Petitioner,
Present:
PUNO, J., Chairperson,
SANDOVAL-GUTIERREZ,
versus - CORONA,
AZCUNA, and
GARCIA, JJ.
COURT OF APPEALS and Promulgated:
JUANITO N. VILLAVERDE,
Respondents. September 19, 2006
x --------------------------------------------------------------------------------------- x
DECISION
AZCUNA, J.:
11,
1999,
respectively,
in
CA-G.R.
77
Before
the [Metropolitan
Trial
Court
(MeTC)], the plaintiff/respondent said that he is the lessor
of a parcel of land with a residential house in
Sampaloc, Manila. Sometime in 1994, he (as a lessor) and
defendant/petitioner entered into a Contract of Lease of a
portion of the residential house (consisting of 96 square
meters) which is located on the subject property for the
period from August 15, 1994 to August 15, 1995, at a
monthly rental of P2,500.
After expiration of the lease, they entered into another
Contract of Lease, which was an extension of the previous
date, commencing from August 15, 1995 to April 15, 1996.
On
his
(petitioner)
part,
he
assured
the [private] respondent that if he would not be able to
purchase the lot after a reasonable period of time, then, he
was willing to deliver possession of the house
to the [private] respondent after payment of the cost, or
the sum of P500,000.
[Private
respondent] made
several
demands to
the petitioner to vacate the premises but was refused; as a
matter of fact, the petitioner refused to vacate without
justifiable reason. Because of the [petitioners] refusal to
vacate the premises, [private respondent] referred the
matter to the barangay court for conciliation, only for the
former to repudiate the agreement to vacate as
ofDecember 31, 1997.
Because
of [private respondents
refusal] to
accept
the rental payments, [petitioner] opened an account in
trust for the [private respondent] where the monthly
rentals could be deposited.
On
January
20,
1998, [private respondent] served
upon the petitioner a notice to vacate the leased property
within a period of fifteen (15) days supposedly counted
from receipt thereof, to payP5,000 rental starting May,
1996, and every month thereafter until the premises shall
have been vacated.
It was, on the other hand, the answer of the petitioner that
as early as November, [1985], [3] he already started building
the house on the lot which was finished in [1986],[4] at
which time he occupied the house as his residence.
Sometime in 1994, the [private] respondent negotiated for
the
purchase
of
the
lot
from
the
previous
owner; [petitioner] similarly offered to buy the lot but was
In
its
Decision
dated October
27,
1998,
the Metropolitan
Trial
78
Petitioner appealed, but the Regional Trial Court (RTC) of Manila, Branch VII,
affirmed the MeTCs Decision in the following manner:
WHEREFORE and finding no reversible error in the decision
of the lower court, the same is hereby affirmed in toto.
SO ORDERED.[6]
Petitioner then went on appeal again asking for reversal of the RTC
Decision. The CA rendered its assailed Decision, the dispositive portion of
which reads:
Simply restated, the issues to be resolved are: 1) whether the action for
79
Under Section 2, Rule 70, such action by the lessor shall be commenced
after demand to pay or comply with the conditions of the lease and to
The lease contract was not extended again after its expiration on April 15,
1996. Petitioners continued use and occupancy of the premises without
the
action
performed by one who holds by mere tolerance of the owner [or lessor as
in this case] are clearly not en concepto de dueo, and such possessory
acts, no matter how long so continued, do not start the running of the
requirements of the
above-cited
provision in
filing
an
period of prescription.[11]
As a lessor, private respondent was unlawfully deprived possession of
the residential house after petitioners right to its possession as lessee had
vacate
the
agreement
premises, the
to
vacate,
which
was entered
even
into
repudiated
the
the owner. A person who occupies the land of another at the latters
on December
31,
80
Aside from the fact that the lease contract had expired, petitioner also did
not
honor
the agreement
to
vacate as
of December
31,
Necessarily, the prescriptive period was suspended while the case was
pending before the barangay authorities. The 60-day period under the
serve upon him on January 20, 1998 a written notice to vacate the leased
above provision shall be deducted from the one-year period within which to
[14]
complied with. Thus, the action for ejectment filed on March 9, 1998 was
properly commenced in the MeTC, following its referral for conciliation.
had
after April 15, 1996,[18] the implied renewal of the expired lease contract
unlawful
was still for a definite period. [19] A month-to-month lease under Article 1687
x x x expires after the last day of any given thirty-day period, upon proper
lease contract expired, but from the date the written notice to vacate was
demand and notice by the lessor to vacate. [20] Since there was proper
served.[16]
notice given after the thirty-day lease periods ended December 15,
[15]
Its
been unlawfully
deprived
or
respondent
1997 (prior to the agreement to vacate made before the barangay court)
Besides, while the dispute is under conciliation, the prescriptive period for
the cause of action was interrupted upon filing of the complaint with
the punong
barangay andresumed to
run upon
receipt
by
private
[17]
in
unlawful
provides:
upon
his
refusal
to
comply
with
the
demand
to
[22]
Second, private respondent may bring the action for unlawful detainer,
even though he is not the titled owner of the leased property.
Such action has for its object the recovery of the physical possession[23] or
determination of who is entitled to possession de facto[24] of the leased
premises (the house)[,] not the ownership of the lot [25] and not its legal
81
possession, in the sense contemplated in civil law. [26] In fact, any finding of
the court regarding the issue of ownership is merely provisional and not
conclusive.[27] The judgment rendered shall not bar an action between the
prevent breach of peace and criminal disorder and to compel [37] parties out
conclusive as to the facts therein found in a case between the same parties
what they
claim
are
theirs. Petitioner is
necessarily
in
prior
lawful
unlawful upon termination or expiration of his right to possess. [38] His prior
unlawful
material
him to continue in its possession and does not give him a better right to
the property.[39]
detainer
or desahucio is the
actual physical
or
Third,
[29]
petitioner should
be
paid
for
the
value
of
the portion
of
to the use of the same may maintain an action for ejectment against a
wrongful possessor.[30] Thus, a mere lessor may file such action.
Petitioner should not trifle with the summary nature of an ejectment suit by
the
ownership over
82
have a claim of title thereto. It does not apply when the interest is x x x
not refuted,
owner.[41]
petitioner is
willing
to
receive reimbursement
for
its
unjust
the house, its value should be offset[49] against the reasonable rent due for
presented showing that petitioners construction of the house was with the
its continued use and occupancy until the former vacates and surrenders it
consent of the lands previous owner, but good faith should be presumed,
[43]
particularly since the lease relationship was open and in plain view.
enrichment
enriched
is
the
transfer
of value
without
cum
just
alterius
cause
or
detrimento
locupletari potest.[51]
Neither is there a showing of bad faith in petitioners refusal to vacate the
land.[44] On the other hand, there is no indication that private respondent
will oblige petitioner to pay the price of the land. In fact, the former refuses
that such has been created in his favor and that the purchase of the land
reasonable rent for the continued use and occupancy ofthe leased
premises from the time the lease contract expired until he finally vacates
involves the existence of equitable duties imposed upon the holder of the
title to the property to deal with it for the benefit of another. A person who
It would not be fair for private respondent to receive both the rent and the
portion of the house covered by the lease. As to its valuation, there is only
as regards property for the benefit of another is known as the trustee; and
the person for whose benefit the trust has been created is referred to as
that compensation of its value against the rentals due can take effect.
83
While an implied trust may be proved orally (Civil Code of the Philippines,
Art. 1457), the evidence must be trustworthy and received by the courts
The conveyance of the property was not from petitioner, but rather from its
September
16,
1999
and
hereby AFFIRMED
house against which the reasonable rent due for its continued use and
BUT
November
WITH
THE
11,
1999,
respectively,
are
case
be offset.
have obtained or held the legal right thereto by fraud, duress, or abuse of
confidence. Again, in the absence of proof showing that private respondent
No costs.
has fraudulently registered the land in his name, petitioner has no right to
recover it under Article 1456 of the Civil Code, which states:
SO ORDERED.
84
HEIRS
DECISION
BELLOSILLO, J.:
THE HEIRS OF TIMOTEO MORENO AND MARIA ROTEA, petitioners
herein, are the successors-in-interest of the former registered owners of
two (2) parcels of land situated inLahug, Cebu City, designated as Lot No.
916 with an area of 2,355 square meters under TCT No. RT-7543 (106) T13694, and Lot No. 920 consisting of 3,097 square meters under TCT No.
RT-7544 (107) T-13695.[1]
In 1949 the National Airport Corporation as the predecessor agency of
respondent Mactan-Cebu International Airport Authority (MCIAA) wanted to
acquire Lots Nos. 916 and 920 above described among other parcels of
land for the proposed expansion of Lahug Airport.[2] To entice the
landowners to cede their properties, the government assured them that
they could repurchase their lands once Lahug Airport was closed or its
operations transferred to Mactan Airport.[3] Some of the landowners
executed deeds of sale with right of repurchase in favor of the government
but many others, including the owners of Lots Nos. 916 and 920 herein
mentioned, refused the offer because the payment was perceived to be
way below the market price.[4]
On 16 April 1952, as the negotiations for the purchase of the lots
necessary for the expansion and improvement of Lahug Airport
irredeemably broke down, the Civil Aeronautics Administration as the
successor agency of the National Airport Corporation filed a complaint with
the Court of First Instance of Cebu, for the expropriation of Lots Nos. 916
and 920 and other subject realties, docketed as Civil Case No. R-1881.
85
domain was exercised does not justify the reversion of the property to its
former owners, and Mactan-Cebu International Airport Authority v. Court of
Appeals[19] which is allegedly stare decisis to the instant case to prevent
the exercise of the right of repurchase as the former dealt with a parcel of
land similarly expropriated under Civil Case No. R-1881. [20]
At the end of 1991, or soon after the transfer of Lots Nos. 916 and 920
to MCIAA, Lahug Airport ceased operations as the Mactan Airport was
opened for incoming and outgoing flights. [8] Lots Nos. 916 and 920 which
had been expropriated for the extension of Lahug Airport were not utilized.
[9]
In fact, no expansion of Lahug Airport was undertaken by MCIAA and its
predecessors-in-interest.[10] Hence, petitioners wrote then President Fidel V.
Ramos and the airport manager begging them for the exercise of their
alleged right to repurchase Lots Nos. 916 and 920. [11] Their pleas were not
heeded.[12]
On 28
November
2002 reconsideration
denied. [21] Hence, this petition for review.
of
This is a difficult case calling for a difficult but just solution. To begin
with, there exists an undeniable historical narrative that the predecessors
of respondent MCIAA had suggested to the landowners of the properties
covered by the Lahug Airport expansion scheme that they could
repurchase their properties at the termination of the airports venture.
[23]
Some acted on this assurance and sold their properties;[24] other
landowners held out and waited for the exercise of eminent domain to take
its course until finally coming to terms with respondents predecessors that
they would not appeal nor block further the judgment of condemnation if
the same right of repurchase was extended to them. [25] A handful failed to
prove that they acted on such assurance when they parted with the
ownership of their lands.[26]
In resolving this dispute, we must reckon with the rulings of this Court
in Fery v. Municpality of Cabanatuan and Mactan-Cebu International Airport
Authority v. Court of Appeals, which define the rights and obligations of
landowners whose properties were expropriated when the public purpose
for which eminent domain was exercised no longer subsists. In Fery, which
was cited in the recent case of Reyes v. Court of Appeals,[27] we declared
On 12 April 1999 the trial court found merit in the claims of petitioners
and granted them the right to repurchase the properties at the amount
pegged as just compensation in Civil Case No. R-1881 but subject to the
alleged property rights of Richard E. Enchuan and the leasehold of DPWH.
[15]
The trial court opined that the expropriation became illegal
or functus officiowhen the purpose for which it was intended was no longer
there.[16]
86
acknowledging her right to repurchase Lot No. 941 through parol evidence,
the Court of Appeals erred in holding that the evidence presented by
CHIONGBIAN was admissible x x x x Aside from being inadmissible under
the provisions of the Statute of Frauds, [the] testimonies are also
inadmissible for being hearsay in nature x x x x[29]
We adhere to the principles enunciated in Fery and in MactanCebu International
Airport
Authority,
and
do
not
overrule
them. Nonetheless the weight of their import, particularly our ruling as
regards
the
properties
of
respondent Chiongbian in MactanCebu International Airport Authority, must be commensurate to the facts
that were established therein as distinguished from those extant in the
case at bar. Chiongbian put forth inadmissible and inconclusive evidence,
while in the instant case we have preponderant proof as found by the trial
court of the existence of the right of repurchase in favor of petitioners.
Moreover, respondent MCIAA has brought to our attention a significant
and telling portion in the Decision in Civil Case No. R-1881 validating our
discernment that the expropriation by the predecessors of respondent was
ordered under the running impression that Lahug Airport would continue in
operation As for the public purpose of the expropriation proceeding, it cannot now be
doubted. Although Mactan Airport is being constructed, it does not take
away the actual usefulness and importance of the LahugAirport: it is
handling the air traffic both civilian and military. From it aircrafts fly
to Mindanao and Visayas and pass thru it on their flights to the North
and Manila. Then, no evidence was adduced to show how soon is
the Mactan Airport to be placed in operation and whether
the Lahug Airport will be closed immediately thereafter. It is up to
the other departments of the Government to determine said matters. The
Court cannot substitute its judgment for those of the said departments or
agencies. In the absence of such showing, the Court will presume
that the Lahug Airport will continue to be in operation (emphasis
supplied).[30]
While the trial court in Civil Case No. R-1881 could have simply
acknowledged the presence of public purpose for the exercise of eminent
domain regardless of the survival of LahugAirport, the trial court in
its Decision chose not to do so but instead prefixed its finding of public
purpose upon its understanding that Lahug Airport will continue to be in
operation. Verily, these meaningful statements in the body of
the Decision warrant the conclusion that the expropriated properties would
remain to be so until it was confirmed that Lahug Airport was no longer in
operation. This inference further implies two (2) things: (a) after
the Lahug Airport ceased its undertaking as such and the expropriated lots
were not being used for any airport expansion project, the rights vis--vis
the expropriated Lots Nos. 916 and 920 as between the State and their
87
former owners, petitioners herein, must be equitably adjusted; and, (b) the
foregoing unmistakable declarations in the body of the Decision should
merge with and become an intrinsic part of the fallo thereof which under
the premises is clearly inadequate since thedispositive portion is not in
accord with the findings as contained in the body thereof.[31]
Significantly, in light of the discussion above, the admission of
petitioners during the pre-trial of Civil Case No. CEB-20015
for reconveyance and damages that respondent MCIAA was the absolute
owner of Lots Nos. 916 and 920 does not prejudice petitioners
interests. This is as it should be not only because the admission concerns a
legal conclusion fiercely debated by the parties[32] but more so since
respondent was truly the absolute owner of the realties until it was
apparent that Lahug Airport had stopped doing business.
To sum up what we have said so far, the attendance in the case at bar
of standing admissible evidence validating the claim of petitioners as well
as the portions above-quoted of theDecision in the expropriation case
volunteered no less than by respondent itself, takes this case away from
the ambit of Mactan-Cebu International Airport Authority v. Court of
Appeals[33]but within the principles enunciated in Fery as mentioned
earlier. In addition, there should be no doubt that our present reading of
the fallo of the Decision in Civil Case No. R-1881 so as to include the
statements in the body thereof afore-quoted is sanctioned by the rule that
a final and executory judgment may nonetheless be clarified by reference
to other portions of the decision of which it forms a part. In Republic v. De
Los Angeles[34] we ruled This Court has promulgated many cases x x x wherein it was held that a
judgment must not be read separately but in connection with the other
portions of the decision of which it forms a part. Hence x x x the decision of
the court below should be taken as a whole and considered in its entirety
to get the true meaning and intent of any particular portion thereof
x x x x Neither is this Court inclined to confine itself to a reading of the
said fallo literally. On the contrary, the judgment portion of a decision
should
be
interpreted
and
construed
in
harmony
with
the ratio decidendi thereof x x x x As stated in the case ofPolicarpio vs.
Philippine Veterans Board, et al., supra, to get the true intent and meaning
of a decision, no specific portion thereof should be resorted to but the
same must be considered in its entirety. Hence, a resolution or ruling may
and does appear in other parts of the decision and not merely in
the fallo thereof x x x x The foregoing pronouncements find support in the
case of Locsin, et al. vs. Paredes, et al., 63 Phil., 87, 91-92, wherein this
Court allowed a judgment that had become final and executory to be
clarified by supplying a word which had been inadvertently omitted and
which, when supplied, in effect changed the literal import of the original
phraseology x x x x This is so because, in the first place, if an already final
judgment can still be amended to supply an omission committed through
oversight, this simply means that in the construction or interpretation of an
88
Under Art. 1189 of the Civil Code, If the thing is improved by its
nature, or by time, the improvement shall inure to the benefit of the
creditor x x x, the creditor being the person who stands to receive
something as a result of the process of restitution. Consequently,
petitioners as creditors do not have to settle as part of the process of
restitution the appreciation in value of Lots Nos. 916 and 920 which is the
natural consequence of nature and time.
Petitioners need not also pay for improvements introduced by third
parties, i.e., DPWH, as the disposition of these properties is governed by
existing contracts and relevant provisions of law. As for the improvements
that respondent MCIAA may have made on Lots Nos. 916 and 920, if any,
petitioners must pay respondent their prevailing free market price in case
petitioners opt to buy them and respondent decides to sell. In other words,
if petitioners do not want to appropriate such improvements or respondent
does not choose to sell them, the improvements would have to be removed
without any obligation on the part of petitioners to pay any compensation
to respondent MCIAA for whatever it may have tangibly introduced therein.
[45]
89
under
workmen's
compensation
and
(9) In a separate civil action to recover civil liability arising from a crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable that
attorney's fees and expenses of litigation should be recovered.
In all cases, the attorney's fees and expenses of litigation must be
reasonable.
As noted in Mirasol v. De la Cruz,[47] Art. 2208 intends to retain the award of
attorneys fees as the exception in our law and the general rule remains
that attorneys fees are not recoverable in the absence of a stipulation
thereto.
In the case at bar, considering the established absence of any
stipulation regarding attorneys fees, the trial court cannot base its award
on any of the exceptions enumerated in Art. 2208. The records of the
instant case do not disclose any proof presented by petitioners to
substantiate that the actuations of respondent MCIAA were clearly
unfounded or purely for the purpose of harassment; neither does the trial
court make any finding to that effect in its appealed Decision.
While Art. 2208, par. (4), allows attorneys fees in cases of clearly
unfounded civil actions, this exception must be understood to mean those
where the defenses are so untenable as to amount to gross and evident
bad faith. Evidence must be presented to the court as to the facts and
circumstances constituting the alleged bad faith, otherwise, the award of
attorneys fees is not justified where there is no proof other than the bare
statement of harassment that a party to be so adjudged had acted in bad
90
91
This is a petition for review [1] under Rule 45 of the Rules of Court of the
Court of Appeals Decision dated 22 March 2005[2] and Resolution dated 9
February 2006[3] in CA-G.R. CV No. 67462. The Court of Appeals reversed
the 12
November
1999 Order
of
the
Regional
Trial
Court
(RTC)
of Olongapo City, Branch 73[4] which granted the motion to dismiss filed by
Guaranteed Homes, Inc. (petitioner). The appellate court denied petitioners
motion for reconsideration.
92
having elapsed from the issuance of TCT No. T-10863 up to the filing of the
sometime in June 1945 and was survived by his four children, one of whom
innocent purchaser for value, it having relied on the clean title of the
spouses Rodolfo.
the latter, during his lifetime, did not execute any document transferring
ownership of the property.[24]
without OCT No. 404 having been cancelled. [17] However, TCT No. T-8241
was not signed by the Register of Deeds. On the same day, TCT No. T-8242
was issued in the name of the spouses Rodolfo and TCT No. T-8241 was
thereby cancelled.[18] Subsequently, on 31 October 1969, the spouses
Rodolfo sold the disputed property to petitioner by virtue of a Deed of Sale
with Mortgage. Consequently, on 5 November 1969, TCT No. T-8242 was
cancelled and TCT No. T-10863[19] was issued in the name of petitioner.[20]
The Register of Deeds and the National Treasurer filed, through the
Office of the Solicitor General, an answer averring that the six (6)-year
period fixed in Section 102 of Presidential Decree (P.D.) No. 1529 for the
filing of an action against the Assurance Fund had long prescribed since
the transfer of ownership over the property was registered through the
issuance of TCT No. T-10863 in favor of petitioner as early as 1969. They
also claimed that respondents have no cause of action against the
It was further averred in the complaint that Jorge Pascua, Sr., son of
Cipriano, filed on 24 January 1997 a petition before the RTC of Olongapo
City, Branch 75, for the issuance of a new owners duplicate of OCT No.
Assurance Fund since they were not actually deprived of ownership over
the property, as they could have recovered the property had it not been for
their inaction for over 28 years.[25]
404, docketed as Other Case No. 04-0-97. [21] The RTC denied the petition.
[22]
The trial court held that petitioner was already the owner of the land,
noting that the failure to annotate the subsequent transfer of the property
to it at the back of OCT No. 404 did not affect its title to the property.
The RTC granted petitioners motion to dismiss. [26] Noting that respondents
had never claimed nor established that they have been in possession of the
property and that they did not present any evidence to show that petitioner
has not been in possession of the property either, the RTC applied the
doctrine that an action to quiet title prescribes where the plaintiff is not in
possession of the property.
93
The Court of Appeals reversed the RTCs order. [28] In ordering the
The trial court found that the complaint per its allegations
averments in respondents complaint before the RTC make out a case for
who had inaccurately claimed to be the sole heir of Pablo in the deed of
quieting of title which has not prescribed. Respondents did not have to
fraudulently registered real property is ten (10) years reckoned from the
the complaint. The appellate court found that possession over the property
date of the issuance of the title, the trial court held that the action for
reconveyance had already prescribed with the lapse of more than 28 years
petitioner nor the Rodolfo spouses ever had possession of the disputed
from the issuance of TCT No. T-10863 on 5 November 1969 as of the filing
property as a number of the Pascua heirs either had been (still are) in
The RTC added that it is an enshrined rule that even a registered owner of
The appellate court further held that the ruling of the RTC that petitioner is
an innocent purchaser for value is contrary to the allegations in
The RTC further held that petitioner had the right to rely on TCT No. T- 8242
respondents complaint.
granting of the motion to dismiss and conversely the tenability of the Court
long prescribed since Section 102 of P.D. No. 1529 provides for a six-year
period within which a plaintiff may file an action against the fund and in this
case the period should be counted from the time of the issuance of the
94
Among the documents marked and offered in evidence are the annexes of
the complaint.[35]
must appear on the face of the complaint, and the test of the sufficiency of
the facts alleged in the complaint to constitute a cause of action is whether
or not, admitting the facts alleged, the court could render a valid judgment
upon
the
same
in
accordance
with
the
prayer of the complaint. For the purpose, the motion to dismiss must
hypothetically admit the truth of the facts alleged in the complaint. [30] The
against petitioner.
admission, however, is limited only to all material and relevant facts which
Firstly, the complaint does not allege any defect with TCT No. T-
predecessors-in-interest,
or
any
circumstance
from
which
it
could
and
conclusiveness
of
the
certificate
of
title
which
the Torrens system seeks to insure would entirely be futile and nugatory.
The public shall then be denied of its foremost motivation for respecting
In the case at bar, the trial court conducted a hearing on the motion to
95
may become the root of a valid title. [39] And one such instance is where the
Register of Deeds Soliman Achacoso, , does not affect the validity of TCT
certificate of title was already transferred from the name of the true owner
No. T-8241 since he signed TCT No. T- 8242 and issued both titles on the
to the forger, and while it remained that way, the land was subsequently
sold to an innocent purchaser. For then, the vendee had the right to rely
official duty. The presumption is further bolstered by the fact that TCT No.
T-8241 was certified to be on file with the Registry of Deeds and registered
in the name of Cipriano. It is enough that petitioner had examined the
latest certificate of title which in this case was issued in the name of the
registered and that OCT No. 404 was not cancelled by the Register of
the original certificate but only by the certificate of title of the person from
settlement was recorded on 14 February 1967, per Entry No. 18590. This is
in compliance with Section 56 of Act No. 496, [41] the applicable law at the
entered in the Office of the Register of Deeds of the province or city where
forgery, the Court still has to uphold the title of petitioner. The case law is
96
the land to which it relates lies, be constructive notice to all persons from
to anchor their complaint on. [43] Title to real property refers to that upon
title will lie against it. [49] The RTC was correct in granting petitioners motion
the extent of his interest, by which means he can maintain control and, as
to dismiss.
[44]
Fund shall not be liable for any loss, damage or deprivation of any right or
Moreover, there is nothing in the complaint which specified that
interest in land which may have been caused by a breach of trust, whether
entitled to claim against the Assurance Fund, the respondents claim has
possession of a number of the Pascua heirs [46] who could either be the
Assurance Fund must be brought within a period of six (6) years from the
time the right to bring such action first occurred, which in this case was in
and relevant facts well pleaded does not extend to render a demurrer an
1967.
pleading;
nor
mere
inferences
or
matters
conclusions
of
evidence;
from
nor
THIRD DIVISION
97
Present:
YNARES-SANTIAGO, J.,
Chairperson,
- versus-
AUSTRIA-MARTINEZ,*
CALLEJO, SR., and
CHICO-NAZARIO, JJ.
HEIRS
OF
MAXIMINO
R.
BRIONES,
namely: SILVERIO S. BRIONES, PETRA
BRIONES, BONIFACIO CABAHUG, JR.,
ANITA TRASMONTE, CIRILITA FORTUNA,
CRESENCIA
BRIONES,
FUGURACION
MEDALLE and MERCEDES LAGBAS,
Promulgated:
Respondents.
February 5, 2007
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
RESOLUTION
xxxx
CHICO-NAZARIO, J.:
On 10 March 2006, this Court promulgated its Decision [1] in the
above-entitled
case,
ruling
in
favor
of
the
98
99
in its previous Decision in this case, it does not find any new evidence or
argument that would adequately justify a change in its previous position.
securing the Court of First Instance Order, dated 2 October 1952, which
declared her as the sole heir of her deceased husband Maximino and
authorized her to have Maximinos properties registered exclusively in
As this Court declared in its Decision, the existence of any trust relations
properties
moment
Article 1456 of the New Civil Code, which provides that, [i]f property is
that Donata merely possessed and held the properties in trust for her
co-heirs/owners;
ruling
law, considered a trustee of an implied trust for the benefit of the person
Angeles,
answered is still whether an implied trust under Article 1456 of the New
was
transmitted
and
in Quion v. Claridad
[13]
[12]
that,
or
by
and Sevilla,
vested
virtue
et
al.
from
of
this
v.
De
the
Courts
Los
by
petitioners
as
the
latters
successors-in-interest,
In the Decision, this Court ruled in the negative, since there was
insufficient evidence to establish that Donata committed fraud. It should be
100
(the
proceedings
she
instituted
to
estate), which declared her as Maximinos sole heir. In the absence of proof
to the contrary, the Court accorded to Special Proceedings No. 928-R the
xxxx
SEC.
3. Disputable
presumptions. The following presumptions
are satisfactory if uncontradicted, but may
be contradicted and overcome by other
evidence:
xxxx
(m) That official duty has been
regularly performed;
(n) That a court, or judge acting as
such,
whether
in
the Philippines or
elsewhere, was acting in the lawful
exercise of jurisdiction.
By reason of the foregoing provisions, this Court
must presume, in the absence of any clear and convincing
proof to the contrary, that the CFI in Special Proceedings
No. 928-R had jurisdiction of the subject matter and the
parties, and to have rendered a judgment valid in every
respect; and it could not give credence to the following
statements made by the Court of Appeals in its Decision.
xxxx
101
xxxx
102
deduce that the CFI Order was in fact issued on 15 January 1960 and not 2
October 1952, as earlier stated in the Decision. It was the inventory of
properties, submitted by Donata as administratrix of Maximinos intestate
estate, which was dated 2 October 1952.[18] Other than such observation,
this Court finds nothing in the CFI Order which could change its original
position in the Decision under consideration.
it
is
true
that
since
the
While
This Court cannot stress enough that the CFI Order was the result
CFI
was
not
informed
that Maximino still had surviving siblings and so the court was not able to
order that these siblings be given personal notices of the intestate
proceedings, it should be borne in mind that the settlement of estate,
whether testate or intestate, is a proceeding in rem,[19] and that the
publication in the newspapers of the filing of the application and of the
date set for the hearing of the same, in the manner prescribed by law, is a
notice to the whole world of the existence of the proceedings and of the
hearing on the date and time indicated in the publication. The publication
requirement of the notice in newspapers is precisely for the purpose of
informing all interested parties in the estate of the deceased of the
existence of the settlement proceedings, most especially those who were
not named as heirs or creditors in the petition, regardless of whether such
omission was voluntarily or involuntarily made.
103
Thus, compliance with the procedural rules is the general rule, and
are
disputable
presumptions,
which
are
satisfactory,
unless
of
Administration
Moreover,
of Maximinos estate
even
if Donatas allegation
that
she
were issued in favor of Donata as early as 8 July 1952, and the CFI
[22]
considering
the
nature
the
disputable
of
intestate
presumptions
proceedings
of
the
as
regular
104
for
the
sake
of
argument,
105
the
last
paragraph
of
Article
494,
Civil
Code; Casaas vs. Rosello, 50 Phil. 97; Gerona vs. De
Guzman, L-19060, May 29, 1964, 11 SCRA 153, 157).
established
in
the
afore-quoted
case. Thus,
while
principles
time
of Maximinos death,
their
enforcement
of
said
right
by
of
the
action
for reconveyance of
the
disputed
106
ten years from registration and/or issuance of the title to the property,
[26]
of title over the disputed properties in her name on 27 June 1960. The
respondents filed with the RTC their Complaint for partition, annulment,
and recovery of possession of the disputed real properties, docketed as
Civil Case No. CEB-5794, only on 3 March 1987, almost 27 years after the
registration of the said properties in the name of Donata. Therefore,
respondents action for recovery of possession of the disputed properties
Laches is
defined
as
the
failure
to assert
a right
for an
107
basis for barring respondents action for recovery of the disputed properties
Considering the circumstances in the afore-quoted paragraphs,
that
the
CFI
Order,
dated 15
January
1960,
in
Special
Proceedings No. 928-R is void and, thus, it cannot have any legal
effect. Consequently, the registration of the disputed properties in the
name ofDonata pursuant to such Order was likewise void.
This Court is unconvinced.
108
Order,
dated 15
January
1960, voidable,
but
not
void
on
its
face. Hence, the said Order, which already became final and executory,
can only be set aside by direct action to annul and enjoin its enforcement.
[35]
case. Note that respondents Complaint before the RTC in Civil Case No.
CEB-5794 was one for partition, annulment, and recovery of possession of
the disputed properties. The annulment sought in the Complaint was not
that of the CFI Order, dated 15 January 1960, but of the certificates of title
over
the
properties
issued
in Donatas name. So
until
and
unless
respondents bring a direct action to nullify the CFI Order, dated 15 January
109
then their right to file an action to annul the CFI Order, dated 15 January
1960, in Special Proceedings No. 928-R (earlier instituted by Donata for the
SO ORDERED.
110