G.R. No.

L-26699 March 16, 1976

BENITA SALAO, assisted by her husband, GREGORIO MARCELO; ALMARIO ALCURIZA, ARTURO ALCURIZA, OSCAR
ALCURIZA and ANITA ALCURIZA, the latter two being minors are represented by guardian ad litem, ARTURO
ALCURIZA, plaintiffs-appellants,
vs.
JUAN S. SALAO, later substituted by PABLO P. SALAO, Administrator of the Intestate of JUAN S. SALAO; now MERCEDES P.
VDA. DE SALAO, ROBERTO P. SALAO, MARIA SALAO VDA. DE SANTOS, LUCIANA P. SALAO, ISABEL SALAO DE SANTOS,
and PABLO P. SALAO, as successors-in-interest of the late JUAN S. SALAO, together with PABLO P. SALAO,
Administrator, defendants-appellants.

Eusebio V. Navarro for plaintiffs-appellants.

Nicolas Belmonte & Benjamin T. de Peralta for defendants-appellants.

AQUINO, J.:

This litigation regarding a forty-seven-hectare fishpond located at Sitio Calunuran, Hermosa, Bataan involves the law of trusts and
prescription. The facts are as follows:

The spouses Manuel Salao and Valentina Ignacio of Barrio Dampalit, Malabon, Rizal begot four children named Patricio, Alejandra,
Juan (Banli) and Ambrosia. Manuel Salao died in 1885. His eldest son, Patricio, died in 1886 survived by his only child. Valentin Salao.

There is no documentary evidence as to what, properties formed part of Manuel Salao's estate, if any. His widow died on May 28, 1914.
After her death, her estate was administered by her daughter Ambrosia.

It was partitioned extrajudicially in a deed dated December 29, 1918 but notarized on May 22, 1919 (Exh. 21). The deed was signed by
her four legal heirs, namely, her three children, Alejandra, Juan and Ambrosia, and her grandson, Valentin Salao, in representation of
his deceased father, Patricio.

The lands left by Valentina Ignacio, all located at Barrio Dampalit were as follows:

Nature of Land

(1) One-half interest in a fishpond which she had inherited from her parents, Feliciano Ignacio and Damiana Mendoza, and the other
half of which was owned by her co-owner, Josefa Sta. Ana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,700

(2) Fishpond inherited from her parents . . . . . . . . . . . . 7,418

(3) Fishpond inherited from her parents . . . . . . . . . . . . . 6,989

(4) Fishpond with a bodega for salt . . . . . . . . . . . . . . . . 50,469

(5) Fishpond with an area of one hectare, 12 ares and 5 centares purchased from Bernabe and Honorata Ignacio by Valentina Ignacio
on November 9, 1895 with a bodega for salt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,205

(6) Fishpond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000

(7) One-half interest in a fishpond with a total area of 10,424 square meters, the other half was owned by A. Aguinaldo . . . . . . . . . . . . .
. . . . . . . . . . 5,217

(8) Riceland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,454

(9) Riceland purchased by Valentina Ignacio from Eduardo Salao on January 27, 1890 with a house and two camarins thereon . . . . . . .
. . . . . . . . . . . 8,065

(10) Riceland in the name of Ambrosia Salao, with an area of 11,678 square meters, of which 2,173 square meters were sold to Justa
Yongco . . . . . . . . . .9,505

TOTAL . . . . . . . . . . . . .. 179,022 square

To each of the legal heirs of Valentina Ignacio was adjudicated a distributive share valued at P8,135.25. In satisfaction of his distributive
share, Valentin Salao (who was then already forty-eight years old) was given the biggest fishpond with an area of 50,469 square
meters, a smaller fishpond with an area of 6,989 square meters and the riceland with a net area of 9,905 square meters. Those parcels
of land had an aggregate appraised value of P13,501 which exceeded Valentin's distributive share. So in the deed of partition he was
directed to pay to his co-heirs the sum of P5,365.75. That arrangement, which was obviously intended to avoid the fragmentation of the
lands, was beneficial to Valentin.

In that deed of partition (Exh. 21) it was noted that "desde la muerte de Valentina Ignacio y Mendoza, ha venido administrando sus
bienes la referida Ambrosia Salao" "cuya administracion lo ha sido a satisfaccion de todos los herederos y por designacion los
mismos". It was expressly stipulated that Ambrosia Salao was not obligated to render any accounting of her administration "en
consideracion al resultado satisfactorio de sus gestiones, mejoradas los bienes y pagodas por ella las contribusiones (pages 2 and 11,
Exh. 21).

By virtue of the partition the heirs became "dueos absolutos de sus respectivas propiedadas, y podran inmediatamente tomar
posesion de sus bienes, en la forma como se han distribuido y llevado a cabo las adjudicaciones" (page 20, Exh. 21).

The documentary evidence proves that in 1911 or prior to the death of Valentina Ignacio her two children, Juan Y. Salao, Sr. and
Ambrosia Salao, secured a Torrens title, OCT No. 185 of the Registry of Deeds of Pampanga, in their names for a forty-seven-hectare
fishpond located at Sitio Calunuran, Lubao, Pampanga (Exh. 14). It is also known as Lot No. 540 of the Hermosa cadastre because that
part of Lubao later became a part of Bataan.

The Calunuran fishpond is the bone of contention in this case.

Plaintiffs' theory is that Juan Y. Salao, Sr. and his sister Ambrosia had engaged in the fishpond business. Where they obtained the
capital is not shown in any documentary evidence. Plaintiffs' version is that Valentin Salao and Alejandra Salao were included in that
joint venture, that the funds used were the earnings of the properties supposedly inherited from Manuel Salao, and that those earnings
were used in the acquisition of the Calunuran fishpond. There is no documentary evidence to support that theory.

On the other hand, the defendants contend that the Calunuran fishpond consisted of lands purchased by Juan Y. Salao, Sr. and
Ambrosia Salao in 1905, 1906, 1907 and 1908 as, shown in their Exhibits 8, 9, 10 and 13. But this point is disputed by the plaintiffs.

However, there can be no controversy as to the fact that after Juan Y. Salao, Sr. and Ambrosia Salao secured a Torrens title for the
Calunuran fishpond in 1911 they exercised dominical rights over it to the exclusion of their nephew, Valentin Salao.
Thus, on December 1, 1911 Ambrosia Salao sold under pacto de retro for P800 the Calunuran fishpond to Vicente Villongco. The
period of redemption was one year. In the deed of sale (Exh19) Ambrosia confirmed that she and her brother Juan were the dueos
proindivisos of the said pesqueria. On December 7, 1911 Villongco, the vendee a retro, conveyed the same fishpond to Ambrosia by
way of lease for an anual canon of P128 (Exh. 19-a).

After the fishpond was redeemed from Villongco or on June 8, 1914 Ambrosia and Juan sold it under pacto de retro to Eligio Naval for
the sum of P3,360. The period of redemption was also one year (Exh. 20). The fishpond was later redeemed and Naval reconveyed it
to the vendors a retro in a document dated October 5, 1916 (Exh. 20-a).

The 1930 survey shown in the computation sheets of the Bureau of Lands reveals that the Calunuran fishpond has an area of 479,205
square meters and that it was claimed by Juan Salao and Ambrosia Salao, while the Pinanganacan fishpond (subsequently acquired by
Juan and Ambrosia) has an area of 975,952 square meters (Exh. 22).

Likewise, there is no controversy as to the fact that on May 27, 1911 Ambrosia Salao bought for four thousand pesos from the heirs of
Engracio Santiago a parcel of swampland planted to bacawan and nipa with an area of 96 hectares, 57 ares and 73 centares located at
Sitio Lewa, Barrio Pinanganacan, Lubao, Pampanga (Exh. 17-d).

The record of Civil Case No. 136, General Land Registration Office Record No. 12144, Court of First Instance of Pampanga shows that
Ambrosia Salao and Juan Salao filed an application for the registration of that land in their names on January 15, 1916. They alleged in
their petition that "han adquirido dicho terreno por partes iguales y por la compra a los herederos del finado, Don Engracio Santiago"
(Exh. 17-a).

At the hearing on October 26, 1916 before Judge Percy M. Moir, Ambrosia testified for the applicants. On that same day Judge Moir
rendered a decision, stating, inter alia, that the heirs of Engracio Santiago had sold the land to Ambrosia Salao and Juan Salao. Judge
Moir "ordena la adjudicacion y registro del terreno solicitado a nombre de Juan Salao, mayor de edad y de estado casado y de su
esposa Diega Santiago y Ambrosia Salao, de estado soltera y mayor de edad, en participaciones iguales" (Exh. 17-e).

On November 28, 1916 Judge Moir ordered the issuance of a decree for the said land. The decree was issued on February 21, 1917.
On March 12, 1917 Original Certificate of Title No. 472 of the Registry of Deeds of Pampanga was issued in the names of Juan Salao
and Ambrosia Salao.

That Pinanganacan or Lewa fishpond later became Cadastral Lot No. 544 of the Hermosa cadastre (Exh. 23). It adjoins the Calunuran
fishpond (See sketch, Exh. 1).

Juan Y. Salao, Sr. died on November 3, 1931 at the age of eighty years (Exh. C). His nephew, Valentin Salao, died on February 9,
1933 at the age of sixty years according to the death certificate (Exh. A. However, if according to Exhibit 21, he was forty-eight years
old in 1918, he would be sixty-three years old in 1933).

The intestate estate of Valentin Salao was partitioned extrajudicially on December 28, 1934 between his two daughters, Benita Salao-
Marcelo and Victorina Salao-Alcuriza (Exh. 32). His estate consisted of the two fishponds which he had inherited in 1918 from his
grandmother, Valentina Ignacio.

If it were true that he had a one-third interest in the Calunuran and Lewa fishponds with a total area of 145 hectares registered in 1911
and 1917 in the names of his aunt and uncle, Ambrosia Salao and Juan Y. Salao, Sr., respectively, it is strange that no mention of such
interest was made in the extrajudicial partition of his estate in 1934.

It is relevant to mention that on April 8, 1940 Ambrosia Salao donated to her grandniece, plaintiff Benita Salao, three lots located at
Barrio Dampalit with a total area of 5,832 square meters (Exit. L). As donee Benita Salao signed the deed of donation.

On that occasion she could have asked Ambrosia Salao to deliver to her and to the children of her sister, Victorina, the Calunuran
fishpond if it were true that it was held in trust by Ambrosia as the share of Benita's father in the alleged joint venture.

But she did not make any such demand. It was only after Ambrosia Salao's death that she thought of filing an action for the
reconveyance of the Calunuran fishpond which was allegedly held in trust and which had become the sole property of Juan Salao y
Santiago (Juani).

On September 30, 1944 or during the Japanese occupation and about a year before Ambrosia Salao's death on September 14, 1945
due to senility (she was allegedly eighty-five years old when she died), she donated her one-half proindiviso share in the two fishponds
in question to her nephew, Juan S. Salao, Jr. (Juani) At that time she was living with Juani's family. He was already the owner of the the
other half of the said fishponds, having inherited it from his father, Juan Y. Salao, Sr. (Banli) The deed of denotion included other pieces
of real property owned by Ambrosia. She reserved for herself the usufruct over the said properties during her lifetime (Exh. 2 or M).

The said deed of donation was registered only on April 5, 1950 (page 39, Defendants' Record on Appeal).
The lawyer of Benita Salao and the Children of Victorina Salao in a letter dated January 26, 1951 informed Juan S. Salao, Jr. that his
clients had a one-third share in the two fishponds and that when Juani took possession thereof in 1945, he refused to give Benita and
Victorina's children their one-third share of the net fruits which allegedly amounted to P200,000 (Exh. K).

Juan S. Salao, Jr. in his answer dated February 6, 1951 categorically stated that Valentin Salao did not have any interest in the two
fishponds and that the sole owners thereof his father Banli and his aunt Ambrosia, as shown in the Torrens titles issued in 1911 and
1917, and that he Juani was the donee of Ambrosia's one-half share (Exh. K-1).

Benita Salao and her nephews and niece filed their original complaint against Juan S. Salao, Jr. on January 9, 1952 in the Court of First
Instance of Bataan (Exh. 36). They amended their complaint on January 28, 1955. They asked for the annulment of the donation to
Juan S. Salao, Jr. and for the reconveyance to them of the Calunuran fishpond as Valentin Salao's supposed one-third share in the 145
hectares of fishpond registered in the names of Juan Y. Salao, Sr. and Ambrosia Salao.

Juan S. Salao, Jr. in his answer pleaded as a defense the indefeasibility of the Torrens title secured by his father and aunt. He also
invoked the Statute of Frauds, prescription and laches. As counter-claims, he asked for moral damages amounting to P200,000,
attorney's fees and litigation expenses of not less than P22,000 and reimbursement of the premiums which he has been paying on his
bond for the lifting of the receivership Juan S. Salao, Jr. died in 1958 at the age of seventy-one. He was substituted by his widow,
Mercedes Pascual and his six children and by the administrator of his estate.

In the intestate proceedings for the settlement of his estate the two fishponds in question were adjudicated to his seven legal heirs in
equal shares with the condition that the properties would remain under administration during the pendency of this case (page 181,
Defendants' Record on Appeal).

After trial the trial court in its decision consisting of one hundred ten printed pages dismissed the amended complaint and the counter-
claim. In sixty-seven printed pages it made a laborious recital of the testimonies of plaintiffs' fourteen witnesses, Gregorio Marcelo,
Norberto Crisostomo, Leonardo Mangali Fidel de la Cruz, Dionisio Manalili, Ambrosio Manalili, Policarpio Sapno, Elias Manies Basilio
Atienza, Benita Salao, Emilio Cagui Damaso de la Pea, Arturo Alcuriza and Francisco Buensuceso, and the testimonies of
defendants' six witnesses, Marcos Galicia, Juan Galicia, Tiburcio Lingad, Doctor Wenceslao Pascual, Ciriaco Ramirez and Pablo P.
Salao. (Plaintiffs presented Regino Nicodemus as a fifteenth witness, a rebuttal witness).

The trial court found that there was no community of property among Juan Y. Salao, Sr., Ambrosia Salao and Valentin Salao when the
Calunuran and Pinanganacan (Lewa) lands were acquired; that a co-ownership over the real properties of Valentina Ignacio existed
among her heirr after her death in 1914; that the co-ownership was administered by Ambrosia Salao and that it subsisted up to 1918
when her estate was partitioned among her three children and her grandson, Valentin Salao.

The trial court surmised that the co-ownership which existed from 1914 to 1918 misled the plaintiffs and their witnesses and caused
them to believe erroneously that there was a co-ownership in 1905 or thereabouts. The trial court speculated that if valentin had a hand
in the conversion into fishponds of the Calunuran and Lewa lands, he must have done so on a salary or profit- sharing basis. It
conjectured that Valentin's children and grandchildren were given by Ambrosia Salao a portion of the earnings of the fishponds as a
reward for his services or because of Ambrosia's affection for her grandnieces.

The trial court rationalized that Valentin's omission during his lifetime to assail the Torrens titles of Juan and Ambrosia signified that "he
was not a co-owner" of the fishponds. It did not give credence to the testimonies of plaintiffs' witnesses because their memories could
not be trusted and because no strong documentary evidence supported the declarations. Moreover, the parties involved in the alleged
trust were already dead.

It also held that the donation was validly executed and that even if it were void Juan S. Salao, Jr., the donee, would nevertheless be the
sole legal heir of the donor, Ambrosia Salao, and would inherit the properties donated to him.

Both parties appealed. The plaintiffs appealed because their action for reconveyance was dismissed. The defendants appealed
because their counterclaim for damages was dismissed.

The appeals, which deal with factual and legal issues, were made to the Court of Appeals. However, as the amounts involved exceed
two hundred thousand pesos, the Court of Appeals elevated the case to this Court in its resolution of Octoter 3, 1966 (CA-G.R. No.
30014-R).

Plaintiffs' appeal. An appellant's brief should contain "a subject index index of the matter in the brief with a digest of the argument
and page references" to the contents of the brief (Sec. 16 [a], Rule 46, 1964 Rules of Court; Sec. 17, Rule 48, 1940 Rules of Court).

The plaintiffs in their appellants' brief consisting of 302 pages did not comply with that requirement. Their statements of the case and
the facts do not contain "page references to the record" as required in section 16[c] and [d] of Rule 46, formerly section 17, Rule 48 of
the 1940 Rules of Court.
Lawyers for appellants, when they prepare their briefs, would do well to read and re-read section 16 of Rule 46. If they comply strictly
with the formal requirements prescribed in section 16, they might make a competent and luminous presentation of their clients' case
and lighten the burden of the Court.

What Justice Fisher said in 1918 is still true now: "The pressure of work upon this Court is so great that we cannot, in justice to other
litigants, undertake to make an examination of the voluminous transcript of the testimony (1,553 pages in this case, twenty-one
witnesses having testified), unless the attorneys who desire us to make such examination have themselves taken the trouble to read
the record and brief it in accordance with our rules" (Palara vs. Baguisi 38 Phil. 177, 181). As noted in an old case, this Court decides
hundreds of cases every year and in addition resolves in minute orders an exceptionally considerable number of petitions, motions and
interlocutory matters (Alzua and Arnalot vs. Johnson, 21 Phil. 308, 395; See In re Almacen, L-27654, February 18, 1970, 31 SCRA 562,
573).

Plaintiffs' first assignment of error raised a procedural issue. In paragraphs 1 to 14 of their first cause of action they made certain
averments to establish their theory that Valentin Salao had a one-third interest in the two fishponds which were registrered in the names
of Juan Y. Salao, Sr. (Banli) and Ambrosia Salao.

Juan S. Salao, Jr. (Juani) in his answer "specifically" denied each and all the allegations" in paragraphs I to 10 and 12 of the first cause
of action with the qualification that Original certificates of Title Nos. 185 and 472 were issued "more than 37 years ago" in the names of
Juan (Banli) and Ambrosia under the circumstances set forth in Juan S. Salao, Jr.'s "positive defenses" and "not under the
circumstances stated in the in the amended complaint".

The plaintiffs contend that the answer of Juan S. Salao, Jr. was in effect tin admission of the allegations in their first cause of action that
there was a co-ownership among Ambrosia, Juan, AIejandra and Valentin, all surnamed Salao, regarding the Dampalit property as
early as 1904 or 1905; that the common funds were invested the acquisition of the two fishponds; that the 47-hectare Calunuran
fishpond was verbally adjudicated to Valentin Salao in the l919 partition and that there was a verbal stipulation to to register "said lands
in the name only of Juan Y. Salao".

That contention is unfounded. Under section 6, Rule 9 of the 1940 of Rules of Court the answer should "contain either a specific dinial a
statement of matters in accordance of the cause or causes of action asserted in the complaint". Section 7 of the same rule requires the
defendant to "deal specificaly with each material allegation of fact the truth of wihich he does not admit and, whenever practicable shall
set forth the substance of the matters which he will rely upon to support his denial". "Material averments in the complaint, other than
those as to the amount damage, shall be deemed admitted when specifically denied" (Sec. 8). "The defendant may set forth set forth by
answer as many affirmative defenses as he may have. All grounds of defenses as would raise issues of fact not arising upon the
preceding pleading must be specifically pleaded" (Sec. 9).

What defendant Juan S. Salao, Jr. did in his answer was to set forth in his "positive defenses" the matters in avoidance of plaintiffs' first
cause of action which which supported his denials of paragraphs 4 to 10 and 12 of the first cause of action. Obviously, he did so
because he found it impracticable to state pierceneal his own version as to the acquisition of the two fishponds or to make a tedious
and repetitious recital of the ultimate facts contradicting allegations of the first cause of action.

We hold that in doing so he substantially complied with Rule 9 of the 1940 Rules of Court. It may be noted that under the present Rules
of Court a "negative defense is the specific denial of t the material fact or facts alleged in the complaint essential to plaintiff's cause of
causes of action". On the other hand, "an affirmative defense is an allegation of new matter which, while admitting the material
allegations of the complaint, expressly or impliedly, would nevertheless prevent or bar recovery by the plaintiff." Affirmative defenses
include all matters set up "by of confession and avoidance". (Sec. 5, Rule 6, Rules of Court).

The case of El Hogar Filipino vs. Santos Investments, 74 Phil. 79 and similar cases are distinguishable from the instant case. In the El
Hogar case the defendant filed a laconic answer containing the statement that it denied "generally ans specifically each and every
allegation contained in each and every paragraph of the complaint". It did not set forth in its answer any matters by way of confession
and avoidance. It did not interpose any matters by way of confession and avoidance. It did not interpose any affirmative defenses.

Under those circumstances, it was held that defendant's specific denial was really a general denial which was tantamount to an
admission of the allegations of the complaint and which justified judgment on the pleadings. That is not the situation in this case.

The other nine assignments of error of the plaintiffs may be reduced to the decisive issue of whether the Calunuran fishpond was held
in trust for Valentin Salao by Juan Y. Salao, Sr. and Ambrosia Salao. That issue is tied up with the question of whether plaintiffs' action
for reconveyance had already prescribed.

The plaintiffs contend that their action is "to enforce a trust which defendant" Juan S. Salao, Jr. allegedly violated. The existence of a
trust was not definitely alleged in plaintiffs' complaint. They mentioned trust for the first time on page 2 of their appelants' brief.

To determine if the plaintiffs have a cause of action for the enforcement of a trust, it is necessary to maek some exegesis on the nature
of trusts (fideicomosis). Trusts in Anglo-American jurisprudence were derived from the fideicommissa of the Roman law (Government of
the Philippine Islands vs. Abadilla, 46 Phil. 642, 646).
"In its technical legal sense, a trust is defined as the right, enforceable solely in equity, to the beneficial enjoyment of property, the legal
title to which is vested in another, but the word 'trust' is frequently employed to indicate duties, relations, and responsibilities which are
not strictly technical trusts" (89 C.J.S. 712).

A person who establishes a trust is called the trustor; one in whom confidence is reposed as regards property for the benefit of another
person is known as the trustee; and the person for whose benefit the trust has been created is referred to as the beneficiary" (Art. 1440,
Civil Code). There is a fiduciary relation between the trustee and the cestui que trust as regards certain property, real, personal, money
or choses in action (Pacheco vs. Arro, 85 Phil. 505).

"Trusts are either express or implied. Express trusts are created by the intention of the trustor or of the parties. Implied trusts come into
being by operation of law" (Art. 1441, Civil Code). "No express trusts concerning an immovable or any interest therein may be proven
by parol evidence. An implied trust may be proven by oral evidence" (Ibid, Arts. 1443 and 1457).

"No particular words are required for the creation of an express trust, it being sufficient that a trust is clearly intended" (Ibid, Art. 1444;
Tuason de Perez vs. Caluag, 96 Phil. 981; Julio vs. Dalandan, L-19012, October 30, 1967, 21 SCRA 543, 546). "Express trusts are
those which are created by the direct and positive acts of the parties, by some writing or deed, or will, or by words either expressly or
impliedly evincing an intention to create a trust" (89 C.J.S. 72).

"Implied trusts are those which, without being expressed, are deducible from the nature of the transaction as matters of intent, or which
are superinduced on the transaction by operation of law as matter of equity, independently of the particular intention of the parties" (89
C.J.S. 724). They are ordinarily subdivided into resulting and constructive trusts (89 C.J.S. 722).

"A resulting trust. is broadly defined as a trust which is raised or created by the act or construction of law, but in its more restricted
sense it is a trust raised by implication of law and presumed to have been contemplated by the parties, the intention as to which is to be
found in the nature of their transaction, but not expressed in the deed or instrument of conveyance (89 C.J.S. 725). Examples of
resulting trusts are found in articles 1448 to 1455 of the Civil Code. (See Padilla vs. Court of Appeals, L-31569, September 28, 1973, 53
SCRA 168, 179; Martinez vs. Grao 42 Phil. 35).

On the other hand, a constructive trust is -a trust "raised by construction of law, or arising by operation of law". In a more restricted
sense and as contra-distinguished from a resulting trust, a constructive trust is "a trust not created by any words, either expressly or
impliedly evincing a direct intension to create a trust, but by the construction of equity in order to satisfy the demands of justice." It does
not arise "by agreement or intention, but by operation of law." (89 C.J.S. 726-727).

Thus, "if property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust
for the benefit of the person from whom the property comes" (Art. 1456, Civil Code).

Or "if a person obtains legal title to property by fraud or concealment, courts of equity will impress upon the title a so-called constructive
trust in favor of the defrauded party". Such a constructive trust is not a trust in the technical sense. (Gayondato vs. Treasurer of the P.
I., 49 Phil. 244).

Not a scintilla of documentary evidence was presented by the plaintiffs to prove that there was an express trust over the Calunuran
fishpond in favor of Valentin Salao. Purely parol evidence was offered by them to prove the alleged trust. Their claim that in the oral
partition in 1919 of the two fishponds the Calunuran fishpond was assigned to Valentin Salao is legally untenable.

It is legally indefensible because the terms of article 1443 of the Civil Code (already in force when the action herein was instituted) are
peremptory and unmistakable: parol evidence cannot be used to prove an express trust concerning realty.

Is plaintiffs' massive oral evidence sufficient to prove an implied trust, resulting or constructive, regarding the two fishponds?

Plaintiffs' pleadings and evidence cannot be relied upon to prove an implied trust. The trial court's firm conclusion that there was no
community of property during the lifetime of Valentina; Ignacio or before 1914 is substantiated by defendants' documentary evidence.
The existence of the alleged co-ownership over the lands supposedly inherited from Manuel Salao in 1885 is the basis of plaintiffs'
contention that the Calunuran fishpond was held in trust for Valentin Salao.

But that co-ownership was not proven by any competent evidence. It is quite improbable because the alleged estate of Manuel Salao
was likewise not satisfactorily proven. The plaintiffs alleged in their original complaint that there was a co-ownership over two hectares
of land left by Manuel Salao. In their amended complaint, they alleged that the co-ownership was over seven hectares of fishponds
located in Barrio Dampalit, Malabon, Rizal. In their brief they alleged that the fishponds, ricelands and saltbeds owned in common in
Barrio Dampalit had an area of twenty-eight hectares, of which sixteen hectares pertained to Valentina Ignacio and eleven hectares
represented Manuel Salao's estate.

They theorized that the eleven hectares "were, and necessarily, the nucleus, nay the very root, of the property now in litigation (page 6,
plaintiffs-appellants' brief). But the eleven hectares were not proven by any trustworthy evidence. Benita Salao's testimony that in 1918
or 1919 Juan, Ambrosia, Alejandra and Valentin partitioned twenty-eight hectares of lands located in Barrio Dampalit is not credible. As
noted by the defendants, Manuel Salao was not even mentioned in plaintiffs' complaints.

The 1919 partition of Valentina Ignacio's estate covered about seventeen hectares of fishponds and ricelands (Exh. 21). If at the time
that partition was made there were eleven hectares of land in Barrio Dampalit belonging to Manuel Salao, who died in 1885, those
eleven hectares would have been partitioned in writing as in the case of the seventeen hectares belonging to Valentina Ignacio's estate.

It is incredible that the forty-seven-hectare Calunuran fishpond would be adjudicated to Valentin Salao mere by by word of mouth.
Incredible because for the partition of the seventeen hectares of land left by Valentina Ignacio an elaborate "Escritura de Particion"
consisting of twenty-two pages had to be executed by the four Salao heirs. Surely, for the partition of one hundred forty-five hectares of
fishponds among three of the same Salao heirs an oral adjudication would not have sufficed.

The improbability of the alleged oral partition becomes more evident when it is borne in mind that the two fishponds were registered
land and "the act of registration" is "the operative act" that conveys and affects the land (Sec. 50, Act No. 496). That means that any
transaction affecting the registered land should be evidenced by a registerable deed. The fact that Valentin Salao and his successors-
in-interest, the plaintiffs, never bothered for a period of nearly forty years to procure any documentary evidence to establish his
supposed interest ox participation in the two fishponds is very suggestive of the absence of such interest.

The matter may be viewed from another angle. As already stated, the deed of partition for Valentina Ignacio's estate wag notarized in
1919 (Exh. 21). The plaintiffs assert that the two fishponds were verbally partitioned also in 1919 and that the Calunuran fishpond was
assigned to Valentin Salao as his share.

Now in the partition of Valentina Ignacio's estate, Valentin was obligated to pay P3,355.25 to Ambrosia Salao. If, according to the
plaintiffs, Ambrosia administered the two fishponds and was the custodian of its earnings, then it could have been easily stipulated in
the deed partitioning Valentina Ignacio's estate that the amount due from Valentin would just be deducted by Ambrosia from his share
of the earnings of the two fishponds. There was no such stipulation. Not a shred of documentary evidence shows Valentin's
participation in the two fishponds.

The plaintiffs utterly failed to measure up to the yardstick that a trust must be proven by clear, satisfactory and convincing evidence. It
cannot rest on vague and uncertain evidence or on loose, equivocal or indefinite declarations (De Leon vs. Molo-Peckson, 116 Phil.
1267, 1273).

Trust and trustee; establishment of trust by parol evidence; certainty of proof. Where a trust is to be established by
oral proof, the testimony supporting it must be sufficiently strong to prove the right of the alleged beneficiary with as
much certainty as if a document proving the trust were shown. A trust cannot be established, contrary to the recitals
of a Torrens title, upon vague and inconclusive proof. (Syllabus, Suarez vs. Tirambulo, 59 Phil. 303).

Trusts; evidence needed to establish trust on parol testimony. In order to establish a trust in real property by parol
evidence, the proof should be as fully convincing as if the act giving rise to the trust obligation were proven by an
authentic document. Such a trust cannot be established upon testimony consisting in large part of insecure surmises
based on ancient hearsay. (Syllabus, Santa Juana vs. Del Rosario 50 Phil. 110).

The foregoing rulings are good under article 1457 of the Civil Code which, as already noted, allows an implied trust to be proven by oral
evidence. Trustworthy oral evidence is required to prove an implied trust because, oral evidence can be easily fabricated.

On the other hand, a Torrens title is generally a conclusive of the ownership of the land referred to therein (Sec. 47, Act 496). A strong
presumption exists. that Torrens titles were regularly issued and that they are valid. In order to maintain an action for reconveyance,
proof as to the fiduciary relation of the parties must be clear and convincing (Yumul vs. Rivera and Dizon, 64 Phil. 13, 17-18).

The real purpose of the Torrens system is, to quiet title to land. "Once a title is registered, the owner may rest secure, without the
necessity of waiting in the portals of the court, or sitting in the mirador de su casa, to avoid the possibility of losing his land" (Legarda
and Prieto vs. Saleeby, 31 Phil. 590, 593).

There was no resulting trust in this case because there never was any intention on the part of Juan Y. Salao, Sr., Ambrosia Salao and
Valentin Salao to create any trust. There was no constructive trust because the registration of the two fishponds in the names of Juan
and Ambrosia was not vitiated by fraud or mistake. This is not a case where to satisfy the demands of justice it is necessary to consider
the Calunuran fishpond " being held in trust by the heirs of Juan Y. Salao, Sr. for the heirs of Valentin Salao.

And even assuming that there was an implied trust, plaintiffs' action is clearly barred by prescription or laches (Ramos vs. Ramos, L-
19872, December 3, 1974, 61 SCRA 284; Quiniano vs. Court of Appeals, L-23024, May 31, 1971, 39 SCRA 221; Varsity Hills, Inc. vs.
Navarro, 9, February 29, 1972, 43 SCRA 503; Alzona vs. Capunitan and Reyes, 114 Phil. 377).

Under Act No. 190, whose statute of limitation would apply if there were an implied trust in this case, the longest period of extinctive
prescription was only ten year (Sec. 40; Diaz vs. Gorricho and Aguado, 103 Phil. 261, 266).
The Calunuran fishpond was registered in 1911. The written extrajudicial demand for its reconveyance was made by the plaintiffs in
1951. Their action was filed in 1952 or after the lapse of more than forty years from the date of registration. The plaintiffs and their
predecessor-in-interest, Valentin Salao, slept on their rights if they had any rights at all. Vigilanti prospiciunt jura or the law protects him
who is watchful of his rights (92 C.J.S. 1011, citing Esguerra vs. Tecson, 21 Phil. 518, 521).

"Undue delay in the enforcement of a right is strongly persuasive of a lack of merit in the claim, since it is human nature for a person to
assert his rights most strongly when they are threatened or invaded". "Laches or unreasonable delay on the part of a plaintiff in seeking
to enforce a right is not only persuasive of a want of merit but may, according to the circumstances, be destructive of the right itself."
(Buenaventura vs. David, 37 Phil. 435, 440-441).

Having reached the conclusion that the plaintiffs are not entitled to the reconveyance of the Calunuran fishpond, it is no longer n to
Pass upon the validity of the donation made by Ambrosia Salao to Juan S. Salao, Jr. of her one-half share in the two fishponds The
plaintiffs have no right and personality to assil that donation.

Even if the donation were declared void, the plaintiffs would not have any successional rights to Ambrosia's share. The sole legal heir of
Ambrosia was her nephew, Juan, Jr., her nearest relative within the third degree. Valentin Salao, if living in 1945 when Ambrosia died,
would have been also her legal heir, together with his first cousin, Juan, Jr. (Juani). Benita Salao, the daughter of Valentin, could not
represent him in the succession to the estate of Ambrosia since in the collateral line, representation takes place only in favor of the
children of brothers or sisters whether they be of the full or half blood is (Art 972, Civil Code). The nephew excludes a grandniece like
Benita Salao or great-gandnephews like the plaintiffs Alcuriza (Pavia vs. Iturralde 5 Phil. 176).

The trial court did not err in dismissing plaintiffs' complaint.

Defendants' appeal. The defendants dispute the lower court's finding that the plaintiffs filed their action in good faith. The defendants
contend that they are entitled to damages because the plaintiffs acted maliciously or in bad faith in suing them. They ask for P25,000
attorneys fees and litigation expenses and, in addition, moral damages.

We hold that defemdamts' appeal is not meritorious. The record shows that the plaintiffs presented fifteen witnesses during the
protracted trial of this case which lasted from 1954 to 1959. They fought tenaciously. They obviously incurred considerable expenses in
prosecuting their case. Although their causes of action turned out to be unfounded, yet the pertinacity and vigor with which they pressed
their claim indicate their sincerity and good faith.

There is the further consideration that the parties were descendants of common ancestors, the spouses Manuel Salao and Valentina
Ignacio, and that plaintiffs' action was based on their honest supposition that the funds used in the acquisition of the lands in litigation
were earnings of the properties allegedly inherited from Manuel Salao.

Considering those circumstances, it cannot be concluded with certitude that plaintiffs' action was manifestly frivolous or was primarily
intended to harass the defendants. An award for damages to the defendants does not appear to be just and proper.

The worries and anxiety of a defendant in a litigation that was not maliciously instituted are not the moral damages contemplated in the
law (Solis & Yarisantos vs. Salvador, L-17022, August 14, 1965, 14 SCRA 887; Ramos vs. Ramos, supra). The instant case is not
among the cases mentioned in articles 2219 and 2220 of the Civil Code wherein moral damages may be recovered. Nor can it be
regarded as analogous to any of the cases mentioned in those articles.

The adverse result of an action does not per se make the act wrongful and subject the actor to the payment of moral
damages. The law could not have meant to impose a penalty on the right to litigate; such right is so precious that
moral damages may not be charged on those who may exercise it erroneously. (Barreto vs. Arevalo, 99 Phil. 771.
779).

The defendants invoke article 2208 (4) (11) of the Civil Code which provides that attorney's fees may be recovered "in case of a clearly
unfounded civil action or proceeding against the plaintiff" (defendant is a plaintiff in his counterclaim) or "in any other case where the
court deems it just and equitable" that attorney's fees should he awarded.

But once it is conceded that the plaintiffs acted in good faith in filing their action there would be no basis for adjudging them liable to the
defendants for attorney's fees and litigation expenses (See Rizal Surety & Insurance Co., Inc. vs. Court of Appeals, L-23729, May 16,
1967, 20 SCRA 61).

It is not sound public policy to set a premium on the right to litigate. An adverse decision does not ipso facto justify the award of
attorney's fees to the winning party (Herrera vs. Luy Kim Guan, 110 Phil. 1020, 1028; Heirs of Justiva vs. Gustilo, 61 O. G. 6959).

The trial court's judgment is affirmed. No pronouncement as to costs.

SO ORDERED.
G.R. No. L-27294 June 28, 1983

ALFREDO ROA, JR., LETICIA ROA DE BORJA, RUBEN ROA, CORNELIO ROA and ELSIE ROA-CACNIO (as heirs of the late
Alfredo Roa, Sr.). petitioners,
vs.
HON. COURT OF APPEALS and the spouses JOAQUIN CASIO and CUSTODIA VALDEHUESA, respondents.

Alberto Cacnio for petitioners.

Melecio Virgilio Law Office for respondents.

GUERRERO, J.:

Appeal by way of certiorari from the Decision of the Court of Appeals 1 in CA-G.R. No. 34746-R entitled "Alfredo Roa, Plaintiff-
Appellant, versus Joaquin Casio et al., Defendants-Appellees," and from the Resolution of the said Court 2denying plaintiff-appellant's
motion for reconsideration of the said Decision.

On September 1, 1955, an action for recovery of possession of a parcel of land was filed before the Court of First Instance of Misamis
Oriental by Alfredo Roa, Sr. (now deceased and subsequently substituted by his heirs, the herein petitioners) against respondent
spouses, Joaquin Casio and Custodia Valdehuesa (real name appears to be Teodosia Valdehuesa), successors-in- interest of one
Pablo Valdehuesa, now deceased.

In his complaint, Alfredo Roa, Sr. alleged that the said land is agricultural; that it is situated in Bugo, formerly within the municipality of
Tagoloan, Misamis Oriental, now comprised within the limits of the City of Cagayan de Oro; that it is registered in his name under
Original Certificate of Title No. T-21D; that he found the private respondents occupying said land. He prayed that possession of the
same be returned to him and that he be awarded actual and moral damages in the sum of P10,000.00.

In answer to the complaint, respondent spouses alleged that the land in question formerly belonged to one Pablo Valdehuesa, father of
respondent Custodia (Teodosia) Valdehuesa and now deceased; that it was however titled in the name of Alfredo Roa, Sr., Trinidad
Reyes Roa, Esperanza Roa de Ongpin, Concepcion Roa and her husband Zosimo Roa in Land Registration Case No. 12, G.R.L.O.
Record No. 10003 of the Court of First Instance of Misamis Oriental by virtue of an agreement entered into between the Roas and said
Pablo Valdehuesa; that the conditions of the said compromise agreement were never complied with by the Roas notwithstanding the
death of Pablo Valdehuesa in 1928 and despite repeated demands for compliance thereof; that the heirs of said Pablo Valdehuesa sold
the land in question to them on April 30, 1930, after rescinding the aforementioned compromise agreement; and that they now enjoy the
privileges of absolute ownership over said land by reason of their continuous and adverse possession thereof since time immemorial.
By way of counterclaim, the respondents prayed for the reconveyance of the said parcel of land contending that the compromise
agreement created an implied trust between the parties to it, and for damages in the amount of P10,000.00.

In answer to private respondent's counterclaim, Alfredo Roa, Sr. maintained that the heirs of Pablo Valdehuesa cannot rescind the
compromise agreement by their own act alone or without going to court; and that the alleged sale of the said heirs to private
respondents was null and void, in view of the fact that respondent spouses knew that the land was then titled in the name of the Roas
under Act 496.

On December 22, 1959, the parties submitted to the Court a quo an agreed Stipulation of Facts, to wit:

STIPULATION OF FACTS

That parties herein, assisted by their respective attorneys, have agreed on the following facts:

1. That the plaintiff and the defendants are all of age and with capacity to sue and be sued.

2. That the plaintiff and his brothers and sisters Trinidad Reyes Roa, Esperanza Roa de Ongpin, Concepcion Roa
and Zosimo Roa, husband of the latter, were the owners pro-indiviso of a parcel of land located in Tagoloan, Misamis
Oriental, containing an area of several hundred hectares, and sometime in 1925, and for the purpose of registering
their title to said parcel of land, the said co- owners filed an application with the Court of First Instance of Misamis
Oriental, and said application was docketed in said Court as Expediente No. 12, G.L.R.O. Record No. 10003.

3. That in the application as well as in the plans accompanying said application in Expediente No. 12, G.L.R.O. No.
10003, was included a parcel of land which is now the portion in litigation in this case.
 4. That one Pablo Valdehuesa filed an opposition in said Expediente No. 12, G.L.R.O. Record No. 10003. claiming
absolute and exclusive ownership over a portion which is now the property under litigation.

5. That sometime during the year 1925, the co-owners, said Concepcion Roa, Esperanza Roa de Ongpin and
Trinidad Reyes Roa and Zosimo Roa entered into an agreement with the said Pablo Valdehuesa, and the terms of
their agreement are contained in the document hereto attached, made a part hereof, and marked as Exhibit "1".

6. That in compliance with his obligation under and by virtue of said Exhibit " 1" the said Pablo Valdehuesa withdrew
the opposition filed by him in said case Expediente No. 12, G.L.R.O. Record No. 10003, and as the result of said
withdrawal, the plaintiff and his co-owners succeeded in registering their title to their property, including the portion
owned by Pablo Valdehuesa as claimed in his opposition.

7. That the said Pablo Valdehuesa died in May of 1928, and upon his death his estate passed to the ownership of his
widow and legitimate children including all his rights under said Exhibit " 1 " to the property in question.

8. That since then the property in question has been in the possession of the defendants, and their possession
together with the possession of their predecessors in said property has been open, continuous and uninterrupted to
this date.

9. That sometime after the issuance of title in favor of the plaintiff (Transfer Certificate of Title No. 21-A) and his
aforementioned brothers and sisters covering the parcel of land subject matter of the application filed by them in
Expediente No. 12, G.L.R.O. Record No. 10003, the said plaintiff and his brothers and sisters partitioned among
themselves said property, and plaintiff was adjudicated a share in said property, of which the parcel of land covered
by the opposition of Pablo Valdehuesa withdrawn under the terms of Exhibit " 1" is a part or portion of said charge,
and covered by T-21-D (copy attached as Exh. "A").

10. That the portion in litigation as correctly described in paragraph 3 of the complaint is covered by the certificate of
title referred to above.

11. That in 1955 the plaintiff had a surveyor relocate the corners and boundaries of his land as described in his title
and that the portion of about 2 hectares on the eastern end of the land is in the possession and is actually occupied
by the defendant. This is the portion in litigation described in par. 3 of the complaint .

12. That Expediente No. 12, G.L.R.O. Record No. 10003 have been totally destroyed during the last World War, and
the parties reserve the right to present additional evidence during the hearing of this case.

Cagayan de Oro City, December 22, 1959.

(Sgd.)
ALFRED
O ROA
Plaintiff

(Sgd.) HERNANDO
PINEDA
(Attorney for Plaintiff)

(Sgd.) JOAQUIN CASIO

(Sgd.) CUSTODIA
VALDEHUESA
(Defendants)

(Sgd.) MANUEL C. FERNANDEZ

(Sgd.) CONCORDIO C.
DIEL
(Attorney for defendants")

The aforesaid compromise agreement mentioned in paragraph 5 of the agreed Stipulation of Facts was thereafter ratified on May 11,
1927 as shown in Exhibit " 1" as follows:

SEPAN TODOS LOS QUE LA PRESENTE VIEREN :

 Que nosotros, los abajo firmantes, mayores de edad hacemos constar:

1. Que somos los dueos mancomunados de la propiedad conocida por Terrenos de Bugu, en el municipio de
Tagoloan, provincia de Misamis.

2. Que en la tramitacion del Exp. No.12,G.L.R.O.,Record No. 10003, para el registro de dicha propiedad, el Sr. Pablo
Valdehuesa del municipio de Tagoloan, que era uno de los opositores, consintio en retirar su oposicion contra
nuestra citada solicitud de registro a condicion de que le reconozcamos su dominio y propiedad sobre una parcela de
terreno dentro de la comprension de Bugu que el ocupaba, o se le compre, y de otro modo se le compense al
reintegrarnos dicha parcela en tiempo oportuno. La descripcion del terreno referido cuya extension es de una
hectares, cuarenta y nueve areas y cincuenta y nueve centiareas, aparece en el escrito de oposicion que obra en el
referido Exp. 12, y que luego fue retirado por convenio de partes.

3. Por tanto, en complimiento de dicho convenio y como consecuencia del mismo, ratificamos lo que tenemos
prometido, para lo cual autorizamos al Sr. Zosimo Roa a que busque y adquiera otro pedazo de terreno fuera de la
comprension de Bugu, de una hectarea, cuarenta y nueve areas y cincuenta y nueve centiareas, poco mas o menos,
y que sea acceptable para el Sr. Pablo Valdehuesa, como canje or permuta con la parcela que el ocupa; en la
inteligencia de que el valor de compra no exceda de P400.00 en su defecto, si no se encuentra un terreno que sea
satisfactorio para el Sr. Pablo Valdehuesa, se le compensara el reintegro arriba citado en la mencionada cantidad de
P400.00.

4. Por su parte, el Sr. Pablo Valdehuesa, acepta todo lo establecido en este documento, obligandose a respetarlo y
acatarlo.

En testimonio de todo lo cual, firmamos el presente documento en Cagayan de Misamis, hoy, 11 de Mayo de 1927.

(Sgd.) Trinidad Roa de Reyes (Sgd.) Esperanza Roa de Ongpin

(Sgd.) Concepcion Roa (Sgd.) Zosimo Roa

__________________________

Alfredo Roa

___________________________

Pablo Valdehuesa

Pursuant to said Exhibit "1", Concepcion, Esperanza, Trinidad and Zosimo, all surnamed Roa, agreed to replace the land of Pablo
Valdehuesa with another parcel of land with an area of 1.4959 hectares to be given to Pablo Valdehuesa in exchange for the land
occupied by him, or if said land was not acceptable to him, to pay him the amount of P400.00. Neither of these undertakings was
complied with by the Roas and Pablo Valdehuesa continued in possession of the land occupied by him until the same was sold by the
heirs of Pablo Valdehuesa to the respondent spouses on April 30, 1930.

On March 6, 1964, the lower court rendered the decision ordering the plaintiff Alfredo Roa to reconvey the land in dispute to the
defendants, now the respondent spouses, on the ground that same could not have been registered in the name of the plaintiff and his
brother and sisters if not for the compromise agreement aforestated and further to pay said defendants the amount of P1,000.00 as
attorney's fees plus costs.

On appeal taken by Alfredo Roa, the appellate court affirmed the decision of the lower court and declared that (a) the compromise
agreement created an express trust between the Roa brothers and sisters, including Alfredo, Sr., (b) that the respondent spouses'
action for reconveyance was imprescriptible on the authority of Mirabiles, et al. v. Quito, et al., L- 14008, October 18, 1956; and (c) that
Alfredo Roa cannot invoke the indefeasibility and imprescriptibility of the Torrens title issued in his name for the land in dispute since
the said title was secured by him in breach of an express trust, and thus, the Court ordered the reconveyance of the property within
fifteen (15) days from the finality of the decision.

Alfredo Roa, now substituted by his heirs, the herein petitioners Alfredo Roa, Jr., Leticia Roa de Borja, Ruben Roa, Cornelio Roa and
Elsie Roa-Cacnio, moved to reconsider the adverse decision. Acting on this motion for reconsideration, the Court of Appeals in a
majority resolution denied the said motion, and while conceding that "the creation of an express trust leaves room for doubt," the said
Court ruled that the compromise agreement, at the least gave rise to an implied trust under Art. 1456 of the New Civil Code. Hence,
petitioners filed this present petition on the following assignment of errors:
 I. The respondent Court of Appeals erred when it ruled that Alfredo Roa, the petitioners' predecessor-in-interest, was
bound by the compromise agreement (Exh. "I") in the execution of which, according to the Stipulation of Facts, said
Alfredo Roa neither participated nor signed.

II. On the assumption that the aforementioned compromise agreement was binding upon Alfredo Roa, the respondent
Court of Appeals erred when it held the said agreement, which stipulated the conveyance of the property in dispute
for a consideration, as having established a trust relationship between the parties to it.

III. The respondent Court of Appeals erred when it held that the ruling in the case of Gerona, et al. va. De Guzman,
G.R. No. L-19060, May 29, 1964, is inapplicable to the case at bar.

On the first assigned error, We reject the contention of the petitioners that Alfredo Roa, Sr. was not bound by the compromise
agreement for not being a participant or signatory thereto. It may be true that Alfredo Roa, Sr. did not sign the compromise agreement,
Exh. " 1 ", for he was then in Manila working as a newspaperman but he certainly benefited from the effects of the compromise
agreement which obliged Pablo Valdehuesa to withdraw, as he did withdraw his opposition to the registration of the Roa property under
the Torrens system. The Roa property was subsequently registered without opposition and title was issued thereto in the name of
Alfredo Roa, his brother Zosimo and his sisters Trinidad, Esperanza and Concepcion, all surnamed Roa as co-owners thereof.
Certainly, the Roas may not escape compliance from their obligation under the compromise agreement by partitioning the property and
assigning the property in dispute as part of the share of the petitioners. Moreover, it will be a pure and simple case of unjust enrichment
for petitioners to acquire and own the property of Pablo Valdehuesa, without paying the value thereof or exchanging the land with
another with an equal area as originally agreed.

With respect to the second assignment of error, We do not agree with the holding of the respondent appellate court that an express
trust was created between the parties by reason of the compromise agreement entered into between them. Express trusts are created
by the intention of the trustor or one of the parties (Article 1441, New Civil Code). While no particular words are required for the creation
of an express trust, it being sufficient that a trust is clearly intended (Article 1444, New Civil Code), in the case at bar, We find no direct
and positive intent to create a trust relationship between the parties to the compromise agreement under which Pablo Valdehuesa
agreed to withdraw his opposition to the application for registration upon the commitment of the Roas to give Valdehuesa another piece
of land of equal area or pay its price of P 400.00. It seems clear to Us that the Roas under the compromise agreement did not commit
themselves to hold the lot claimed by Pablo Valdehuesa for Pablo Valdehuesa and in Pablo Valdehuesa's name.

If the compromise agreement did not result to an express trust relationship, did it, however, give rise to an implied trust? Private
respondents claim that under the terms of the compromise agreement, the land claimed by Pablo Valdehuesa should be deemed held
in trust by the Roas when the latter failed to relocate him or pay the price therefor. The respondent appellate court took private
respondents' position, and opined, 3 thus

It could thus be gleaned that had it not been for the promise of the Roas contained in Exhibit 1, Valdehuesa would not
have been induced to withdraw his opposition in the land registration case. When, therefore, the Roas turned their
back to a solemn agreement entered in a court proceedings, they were guilty of fraud.

Fraud is every kind of deception, whether in the form of insidious machinations, manipulations,
concealments or misrepresentations, for the purpose of leading another party into error and then
execute a particular act. It must have a determining influence on the consent of the victim." (4
Tolentino, Civil Code, p. 462)

It results from the foregoing that although the creation of an express trust leaves room for doubt, by operation of law,
an implied trust is created,

Art. 1456. If property is acquired through mistake or fraud, the person obtaining it is, by force of
law, considered a trustee of an implied trust for the benefit of the person from whom the property
comes. (N.C.C)".

We cannot sustain the holding of the respondent appellate court in its Resolution denying petitioners' motion for reconsideration that by
operation of law an implied trust was created under the terms of the compromise agreement in the light of Article 1456 of the New Civil
Code cited above. We rule that Art. 1456 is not applicable because it is quite clear that the property of Pablo Valdehuesa was acquired
by the Roas not through mistake or fraud but by reason of the voluntary agreement of Valdehuesa to withdraw his opposition to the
registration of the land under the Torrens system.

There is incontrovertible evidence that the Roas intended to abide by the compromise agreement at the time of the execution of the
same. The private respondents themselves introduced additional evidence which showed that on May 11, 1927, Trinidad Roa,
Esperanza Roa de Ongpin, Concepcion Roa and Zosimo Roa confirmed in writing the terms and conditions of the agreement they had
entered into with Pablo Valdehuesa in the land registration proceedings. Even the respondent appellate court expressly determined the
aforesaid failure of the Roas to comply with the terms of the compromise agreement to be an afterthought; thus,

The change of mind of the plaintiff-appellant later is of no moment in the case at bar. 4
While it is Our ruling that the compromise agreement between the parties did not create an express trust nor an implied trust under Art.
1456 of the New Civil Code, We may, however, make recourse to the principles of the general law of trusts, insofar as they are not in
conflict with the New Civil Code, Code of Commerce, the Rules of Court and special laws which under Art. 1442 of the New Civil Code
are adopted. While Articles 1448 to 1456 of the New Civil Code enumerates cases of implied trust, Art. 1447 specifically stipulates that
the enumeration of the cases of implied trust does not exclude others established by the general law of trusts, but the limitations laid
down in Art 1442 shag be applicable.

In American law and jurisprudence, We find the following general principles:

A constructive trust, otherwise known as a trust ex maleficio, a trust ex delicto, a trust de son tort, an involuntary trust,
or an implied trust, is a trust by operation of law which arises contrary to intention and in invitum, against one who, by
fraud, actual or constructive, by duress or abuse of confidence, by commission of wrong, or by any form of
unconscionable conduct, artifice, concealment, or questionable means, or who in any way against equity and good
conscience, either has obtained or holds the legal right to property which he ought not, in equity and good
conscience, hold and enjoy. It is raised by equity to satisfy the demands of justice. However, a constructive trust does
not arise on every moral wrong in acquiring or holding property or on every abuse of confidence in business or other
affairs; ordinarily such a trust arises and will be declared only on wrongful acquisitions or retentions of property of
which equity, in accordance with its fundamental principles and the traditional exercise of its jurisdiction or in
accordance with statutory provision, takes cognizance. It has been broadly ruled that a breach of confidence,
although in business or social relations, rendering an acquisition or retention of property by one person
unconscionable against another, raises a constructive trust. (76 Am. Jur. 2d, Sec. 221, pp. 446-447).

And specifically applicable to the case at bar is the doctrine that "A constructive trust is substantially an appropriate remedy against
unjust enrichment. It is raised by equity in respect of property, which has been acquired by fraud, or where, although acquired originally
without fraud, it is against equity that it should be retained by the person holding it." (76 Am. Jur. 2d, Sec. 222, p. 447).

The above principle is not in conflict with the New Civil Code, Code of Commerce, Rules of Court and special laws. And since We are a
court of law and of equity, the case at bar must be resolved on the general principles of law on constructive trust which basically rest on
equitable considerations in order to satisfy the demands of justice, morality, conscience and fair dealing and thus protect the innocent
against fraud. As the respondent court said, "It behooves upon the courts to shield fiduciary relations against every manner of
chickanery or detestable design cloaked by legal technicalities."

The next point to resolve is whether the counterclaim of private respondents for the reconveyance of the property in dispute has already
prescribed in the light of established jurisprudence that the right to enforce an implied trust prescribes in ten years.

Admittedly, Pablo Valdehuesa and his heirs remained in possession of the property in question in 1925 when by reason of the
compromise agreement Valdehuesa withdrew his opposition to the registration applied for by the Roas for which reason the latter were
able to obtain a Torrens title to the property in their name. However, Valdehuesa and his heirs continued their possession of the land
until he sold the property in question to private respondents herein on April 30, 1930 and the latter remained in possession and were
never disturbed in their occupancy until the filing of the original complaint for recovery of possession on Sept. 1, 1955 after demand was
made upon them when a relocation survey initiated by petitioners established that private respondents were actually occupying about 2
hectares on the eastern end of the property. Upon these facts, the prescriptive period may only be counted from the time petitioners
repudiated the trust relation in 1955 upon the filing of the complaint for recovery of possession against private respondents so that the
counterclaim of the private respondents contained in their amended answer of June 12, 1956 wherein they asserted absolute
ownership of the disputed realty by reason of their continuous and adverse possession of the same is well within the ten-year
prescriptive period.

Finally, the case at bar is quite similar to the case of Dolores Pacheco vs. Santiago Arro, 85 Phil. 505, wherein the claim to the lots in
the cadastral case was withdrawn by the respondents relying upon the assurance and promise made in open court by Dr. M. Y. in
behalf of J. Y. y R., the predecessor-in-interest of the petitioners and the Court held that a trust or a fiduciary relation between them
arose, or resulted therefrom, or was created thereby and the trustee cannot invoke the statute of limitations to bar the action and defeat
the right of the cestuis que trustent. (Cited in Tolentino, Civil Code of the Philippines, Vol. IV, p. 627).

WHEREFORE, IN VIEW OF THE FOREGOING, the judgment appealed from is hereby AFFIRMED.

SO ORDERED

G.R. No. L-21616 December 11, 1967

GERTRUDES F. CUAYCONG, ET AL., plaintiffs-appellants,

vs.
LUIS D. CUAYCONG, ET AL., defendants-appellees.

Benito C. Jalandoni and M. S. Gomez for plaintiffs-appellants.

Hilado and Hilado for defendants-appellees.
BENGZON, J.P., J.:

Eduardo Cuaycong, married to Clotilde de Leon, died on June 21, 1936 without issue but with three brothers and a sister surviving him:
Lino, Justo, Meliton and Basilisa. Upon his death, his properties were distributed to his heirs as he willed except two haciendas in
Victorias, Negros Occidental, devoted to sugar and other crops the Haciendas Sta. Cruz and Pusod both known as Hacienda
Bacayan. Hacienda Bacayan is comprised of eight (8) lots No. 28, covered by T.C.T. No. T-22130; Nos. 8, 17, 18 & 135, covered by
T.C.T. No. T-22131; Nos. 21, 22, 23, covered by T.C.T. No. 22132 all of which are titled in the name of Luis D. Cuaycong, son of
Justo Cuaycong.

Lino Cuaycong died on May 4, 1937 and was survived by his children Paz, Carolina, Gertrudes, Carmen, Virgilio, Benjamin, Praxedes
and Anastacio. Praxedes Cuaycong, married to Jose Betia, is already deceased and is survived by her children Jose Jr., Jesus,
Mildred, Nenita and Nilo, all surnamed Betia. Anastacio Cuaycong, also deceased, is survived by his children Ester, Armando, Lourdes,
Luis T., Eva and Aida, all surnamed Cuaycong.

Meliton and Basilisa died without any issue.

On October 3, 1961, the surviving children of Lino Cuaycong: Gertrudes, Carmen, Paz, Carolina, Virgilio; the surviving children of
Anastacio: Ester, Armando, Lourdes, Luis T., Eva and Aida; as well as Jose, Jr., Jesus, Mildred, Nenita, Nilo, all surnamed Betia,
children of deceased Praxedes Cuaycong Betia, filed as pauper litigants, a suit against Justo, Luis and Benjamin Cuaycong 1 for
conveyance of inheritance and accounting, before the Court of First Instance of Negros Occidental (Civil Case No. 6314), alleging
among others that:

1. Eduardo Cuaycong had on several occasions, made known to his brothers and sisters that he and his wife Clotilde de Leon (died in
1940) had an understanding and made arrangements with Luis Cuaycong and his father Justo Cuaycong, that it was their desire to
divide Haciendas Sta. Cruz and Pusod among his brothers and sister and his wife Clotilde.

2. With the consent of his wife, Eduardo had asked his brothers and sister to pay his wife P75,000 (the haciendas were worth
P150,000) and then divide equally the remaining one-half share of Eduardo.

3. The brothers and sister failed to pay the 1/2 share of Clotilde over the two haciendas which were later acquired by Luis Cuaycong
thru clever strategy, fraud, misrepresentation and in disregard of Eduardo's wishes by causing the issuance in his name of certificates
of title covering said properties.

4. As the two haciendas were the subject of transactions between the spouses and Justo and Luis Cuaycong, Eduardo told Justo and
Luis, and the two agreed, to hold in trust what might belong to his brothers and sister as a result of the arrangements and deliver to
them their share when the proper time comes.

5. That as far back as 1936 Lino demanded from Justo and Luis his share and especially after Eduardo's and Clotilde's death, the
plaintiffs demanded their shares.

6. That their demands had been refused and in 1960 during the estate proceedings of Praxedes Escalon, deceased wife of Luis D.
Cuaycong, the latter fraudulently made it appear that the plaintiffs had nothing to do with the land; that Luis Cuaycong had possessed
the lands since June 21, 1936 from which time he should be made to account for the plaintiffs' share; and that P1,500 attorney's fees
should be paid in their favor.

Luis D. Cuaycong on October 20, 1961 moved to dismiss the complaint on the grounds of unenforceability of the claim under the
statute of frauds, no cause of action (Rule 8, Sec. 1 [f] of the Rules of Court), and bar of causes of action by the statute of limitations
(Rule 8, Sec. 1[e]). Subsequently, opposition thereto, answer and reply were filed; the plaintiffs also sought to have Benjamin Cuaycong
declared in default for his failure to answer.

On December 16, 1961, the Court of First Instance ruled that the trust alleged, particularly in paragraph 8 of the complaint, refers to an
immovable which under Article 1443 of the Civil Code may not be proved by parole evidence. Plaintiffs were given 10 days to file an
amended complaint mentioning or alleging therein the written evidence of the alleged trust, otherwise the case would be dismissed.

Later, on December 23, 1961, the court decreed that since there was no amended complaint filed, thus, no enforceable claim, it was
useless to declare Benjamin Cuaycong in default.

Plaintiff thereafter manifested that the claim is based on an implied trust as shown by paragraph 8 of the complaint. They added that
there being no written instrument of trust, they could not amend the complaint to include such instrument.

On January 13, 1962, the court dismissed the case for failure to amend the complaint; it further refused to reconsider its order denying
the motion to declare Benjamin Cuaycong in default, stating that such a default declaration would be of no purpose.
Failing in their efforts to have the dismissal reconsidered, plaintiffs appealed to Us. The resolution of the appeal hinges o n whether the
trust is express or implied.

Paragraph 8 of the complaint state:

That as the said two haciendas were then the subject of certain transactions between the spouses Eduardo Cuaycong and
Clotilde de Leon on one hand, and Justo and Luis D. Cuaycong on the other, Eduardo Cuaycong told his brother Justo and his
nephew, defendant Luis D. Cuaycong, to hold in trust what might belong to his brothers and sister as a result of the
arrangements and to deliver to them their shares when the proper time comes, to which Justo and Luis D. Cuaycong agreed.

The plaintiffs claim that an inplied trust is referred to in the complaint which, under Article 1457 of the Civil Code, may be proved by
parole evidence.

Our Civil Code defines an express trust as one created by the intention of the trustor or of the parties, and an implied trust as one that
comes into being by operation of law.2 Express trusts are those created by the direct and positive acts of the parties, by some writing or
deed or will or by words evidencing an intention to create a trust. On the other hand, implied trusts are those which, without being
expressed, are deducible from the nature of the transaction by operation of law as matters of equity, in dependently of the particular
intention of the parties.3Thus, if the intention to establish a trust is clear, the trust is express; if the intent to establish a trust is to be
taken from circumstances or other matters indicative of such intent, then the trust is implied. From these and from the provisions of
paragraph 8 of the complaint itself, We find it clear that the plaintiffs alleged an express trust over an immovable, especially since it is
alleged that the trustor expressly told the defendants of his intention to establish the trust.lawphil Such a situation definitely falls under
Article 1443 of the Civil Code.

Appellants point out that not only paragraph 8 should be considered but the whole complaint, in which case they argue that an implied
trust should be construed to exist. Article 1453, one of the cases of implied trust, is also cited: "When property is conveyed to a person
in reliance upon his declared intentions to hold it for or transfer it to another or the grantor, there is an implied trust in favor of the
person whose benefit is contemplated." Said arguments are untenable, even considering the whole complaint. The intention of the
trustor to establish the alleged trust may be seen in paragraphs 5 and 6. 4 Article 1453 would apply if the person conveying the property
did not expressly state that he was establishing the trust, unlike the case at bar where he was alleged to have expressed such intent.
Consequently, the lower court did not err in dismissing the complaint.

Besides, even assuming the alleged trust to be an implied one, the right alleged by plaintiffs Would have already prescribed since
starting in 1936 When the trustor died, plaintiffs had already been allegedly refused by the aforesaid defendants in their demands over
the land, and the complaint was filed only in 1961 more than the 10-year period of prescription for the enforcement of such rights
under the trust.lawphil It is settled that the right to enforce an implied trust in one's favor prescribes in ten (10) years.5 And even under
the Code of Civil Procedure, action to recover real property such as lands prescribes in ten years (Sec. 40, Act 190).

And for the above reasons, We agree that it was pointless to declare Benjamin Cuaycong in default, considering that without a written
instrument as evidence of the alleged trust, the case for the plaintiffs must be dismissed.

WHEREFORE, the order of dismissal of the lower court appealed from is hereby affirmed, without costs. So ordered.

Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Angeles and Fernando, JJ., concur.

G.R. No. L-59879 May 13, 1985

PATRICIO SINAON and MARIA, FRANCISCA and JOSE, all surnamed SINAON, petitioners,
vs.
ANDRES SOROGON, ANASTACIA PARREO, SOLEDAD PARREO, ANA PARREO, MARCELINA, CLARITA, RUFINO and
MANUEL, all surnamed ARELLANO, SIMPLICIO SOMBLINGO and BRIGIDA SOMBLINGO and COURT OF
APPEALS, respondents.

Neil D. Hechanova for petitioners.

Benjamin P. Sorongon for respondents.

AQUINO, J.:

The issue in this case is whether an action for reconveyance of a registered five-hectare land, based on implied trust, would lie after the
supposed trustees had held the land for more than forty years.
According to the documentary evidence consisting of public documents and tax records, Judge (later Justice) Carlos A. Imperial in a
decree dated March 4, 1916 adjudicated to Canuta Soblingo (Somblingo), a widow, Lot No. 4781 of the Sta. Barbara, Iloilo cadastre
with an area of 5.5 hectares. OCT No. 6178-A was issued in 1917 to Canuta (Exh. 6 and 7 or B).

In 1923 Canuta sold the lot to the spouses Patricio Sinaon and Julia Sualibio for P2,000 (Exh. 8). TCT No. 2542 was issued to the
Sinaon spouses (Exh. 9 or C). It is still existing and uncancelled up to this time, Julia was the granddaughter of Canuta.

The lot was declared for tax purposes in Sinaon's name (Exh. 3). The Sinaon spouses and their children paid the realty taxes due
thereon (Exh. 1 to 5-C). They have possessed the land as owners from 1923 up to this time or for more than half a century.

Canuta was one of the five children of Domingo Somblingo, the alleged original owner of the lot when it was not yet registered. His
other four children were Felipe, Juan, Esteban and Santiago. The theory of respondents Sorogon, et al.,

which they adopted in their 1968 second amended complaint (they filed the action in 1964) is that Canuta and the Sinaons were
trustees of the lot and that the heirs of Domingo's four children are entitled to a 4/5 share thereof.

That theory was sustained by the trial court and the Appellate Court. The trial court ordered the Sinaons to convey 4/5 of Lot No. 4781
to respondents Sorogon, et al. It decreed partition of the lot in five equal parts. The Sinaons appealed to this Court. The respondents
did not file any brief.

We hold that after the Sinaons had appeared to be the registered owners of the lot for more than forty years and had possessed it
during that period, their title had become indefeasible and their possession could not be disturbed. Any pretension as to the existence
of an implied trust should not be countenanced.

The trustors. who created the alleged trust, died a long time ago. An attempt to prove the trust was made by unreliable oral evidence.
The title and possession of the Sinaons cannot be defeated by oral evidence which can be easily fabricated and contradicted. The
contradictory oral evidence leaves the court sometimes bothered and bewildered.

There was no express trust in this case. Express trusts concerning real property cannot be proven by parol evidence (Art. 1443, Civil
Code). An implied trust "cannot be established, contrary to the recitals of a Torrens title, upon vague and inconclusive proof" (Suarez
vs. Tirambulo, 59 Phil. 303; Salao vs. Salao, L-26699, March 16,1976, 70 SCRA 65, 83).

Even assuming that there was an implied trust, plaintiffs' action was clearly barred by prescription (Salao vs. Salao, supra, p. 84).

Prescription is rightly regarded as a statute of repose whose object is to suppress fraudulent and stale claims from springing up at great
distances of time and surprising the parties or their representatives when the facts have become obscure from the lapse of time or the
defective memory or death or removal of witnesses (53 C.J.S. 903). See Teves Vda. de Bacong vs. Teves and CA, G.R. No. 50143,
October 24, 1983, 125 SCRA 137; Ramos vs. Ramos, L-19872, December 3, 1974, 61 SCRA 284; Gallanosa vs. Arcangel, L-29300,
June 21, 1978, 83 SCRA 676 and Sinco vs. Longa 51 Phil. 507.

It was not necessary for the Sinaons to plead prescription as a defense because there is no dispute as to the dates. There was no
factual issue as to prescription (Chua Lamko vs. Dioso, 97 Phil. 821, 824; Ferrer vs. Ericta, L-41767, August 23, 1978, 84 SCRA 705).

At any rate, the Sinaons invoked in the lower court the ruling laid down in Gerona vs. De Guzman, 120 Phil. 149, 153 that an action for
reconveyance of realty, based upon a constructive or implied trust resulting from fraud, may be barred by prescription. The prescriptive
period is reckoned from the issuance of the title which operates as a constructive notice (Diaz vs. Gorricho and Aguado, 103 Phil. 261,
266-267; J.M. Tuason & Co., Inc. vs. Magdangal, 114 Phil. 42, 46-47; Lopez vs. Gonzaga, 119 Phil. 424, 437).

The supposed trust in this case, which is neither an express nor a resulting trust, is a constructive trust arising by operation of law (Art.
1456, Civil Code). It is not a trust in the technical sense (Gayondato vs. Treasurer of the P.I., 49 Phil. 244). *

WHEREFORE, the judgment of the Court of Appeals is reversed and the complaint is dismissed. The receivership is terminated. The
receiver is directed to wind up his accounts. No costs.

SO ORDERED.

Makasiar (Chairman), Abad Santos, Escolin and Cuevas, JJ., concur.

Justice Concepcion, Jr., took no part.

G.R. No. 106251 November 19, 1993

CHIAO LIONG TAN, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, HON MANUEL T. MURO, Presiding Judge, RTC of Manila, Branch 54 and TAN BAN
YONG, respondents.

Joaquin M. Arao for petitioner.

Macavinta & Sta. Ana Law Offices for private respondent.

NOCON, J.:

Petitioner seeks in this petition the reversal of the Court of Appeals' decision dated May 15, 1992 in CA-G.R. CV No. 29982 affirming
the unfavorable decision of the trial court 1 in his suit for replevin and damages.

Petitioner Chiao Liong Tan claims to be the owner of a motor vehicle, particularly described as Isuzu Elf van, 1976 Model with Motor
No. 44999-2 and Chassis No. 9646780 which he purchased in March, 1987. As owner thereof, petitioner says he has been in
possession, enjoyment and utilization of the said motor vehicle until it was taken from him by his older brother, Tan Ban Yong, the
private respondent herein.

Petitioner relies principally on the fact that the Isuzu Elf van is registered in his name under Certificate of Registration No. 1501909. He
claims in his testimony before the trial court that the said vehicle was purchased from Balintawak Isuzu Motor Center for a price of over
P100,000.00; that he sent his brother to pay for the van and the receipt for payment was placed in his (petitioner's) name because it
was his money that was used to pay for the vehicle; that he allowed his brother to use the van because the latter was working for his
company, the CLT Industries; and that his brother later refused to return the van to him and appropriated the same for himself.

On the other hand, private respondent testified that CLT Industries is a family business that was placed in petitioner's name because at
that time he was then leaving for the United States and petitioner is the remaining Filipino in the family residing in the Philippines. When
the family business needed a vehicle in 1987 for use in the delivery of machinery to its customers, he asked petitioner to look for a
vehicle and gave him the amount of P5,000.00 to be deposited as down payment for an Isuzu Elf Van which would be available in
about a month. After a month, he himself paid the whole price out of a loan of P140,000.00 which he obtained from his friend Tan Pit
Sin. Inasmuch as the receipt for the downpayment was placed in the name of petitioner and since he was still on good terms with him,
private respondent allowed the registration of the vehicle in petitioner's name. It was also their understanding that he would keep the
van for himself because CLT Industries was not in a position to pay him. Hence, from the time of the purchase, he had been in
possession of the vehicle including the original registration papers thereof, but allowing petitioner from time to time to use the van for
deliveries of machinery.

Tan Pit Sin who had known private respondent since 1968, not only because they were classmates but also because of their business
dealings with each other, confirmed that private respondent borrowed from him P140,000.00 in March, 1987 to buy an Isuzu Elf van. In
fact, he had borrowed said vehicle for a few times.

Gina Lu, an employee of the Balintawak Isuzu Motors, testified that private respondent paid the balance of the purchase price of the
Isuzu Elf van in the amount of P133,000.00 but the receipt was issued in the name of Chiao Liong Tan to make the records consistent
because it was the latter who made the deposit of P5,000.00. Thereafter, the Isuzu Elf van was released to him.

After hearing, the trial court found for private respondent. The dispositive portion of the decision reads as follows:

WHEREFORE, judgment is hereby rendered declaring defendant Tan Ban Yong to be the owner of and entitled to
the possession of the vehicle described in par. 2 of the Complaint, and the plaintiff is hereby ordered to deliver
possession thereof to the said defendant or in the alternative if such delivery cannot be made, to the sum of
P138,000.00 as the value of the vehicle taking into account the depreciation of the vehicle but offset by the inflation
rate; in either alternative, plaintiff is also ordered to pay to said defendant consequential damages of P20,000.00 for
the latter having been deprived of the possession and use of the vehicle and to pay the costs. All amounts adjudged
herein, except costs, shall bear interest at the legal rate from the date of this decision, until delivery of the vehicle or
the alternative payment of the value thereof as well as payment of consequential damages is paid; the interest
applies to the value of the vehicle if return thereof is delayed. No cost. 2

Finding no merit in the appeal, the respondent Court of Appeals affirmed the decision of the trial court. Undaunted by his successive
failures, petitioner comes to us and raised the following error allegedly committed by the respondent Court of Appeals, to wit:

1. . . . in finding the testimonies of private respondent's witnesses credible;

 2. . . . in disregarding the Certificate of Registration of the subject motor vehicle as proof of ownership by the
petitioner-appellant. 3

Since the Court of Appeals merely affirmed the trial court's assessment of the credibility of the witnesses that testified before it,
petitioner is in effect questioning the factual findings of said court and its appraisal of their testimony which this Court cannot review, its
jurisdiction being limited to questions of law. The considerable weight given to the findings of the trial court is not without any reason. It
had the opportunity to observe the demeanor of witnesses which is usually not reflected in the transcript of records. The profundity of
the conclusions thus reached is just the result of such observance. When the Court of Appeals affirmed said findings, it goes to show
that no misapprehension of facts was committed as said Court has the power to scrutinize said factual findings under existing rules of
procedure.

In concluding that the testimonies of Tan Ban Yong, Tan Pit Sin and Gina Lu cast doubt on the petitioner's ownership of the motor
vehicle in question, both the trial court and the Court of Appeals attached significance to their respective interlocking accounts on how
the motor vehicle was acquired, complete with the financing source and mode of repayment. Respondent Tan Ban Yong's declaration
that he borrowed P140,000.00 from Tan Pit Sin and paid the balance of the purchase price of the motor vehicle himself to Gina Lu of
the Balintawak Isuzu Motors, is corroborated by the above-mentioned persons themselves. Tan Pit Sin not only confirmed the loan but
also stated that the same was paid in three (3) months; P50,000.00 on the first payment; another P50,000.00 on the second payment
and P40,000.00 on the last payment. 4 Gina Lu, who testified at the instance of petitioner, declared that the downpayment of P5,000.00
was paid by petitioner and so the receipt for the same was issued in his name but the balance of P133,000.00 was paid by private
respondent and to make the record consistent, she issued the receipt in the name of petitioner again.

In contrast to the clear and categorical averments of private respondent and the witnesses in this case negating petitioner's ownership
of the motor vehicle in question, petitioner's averments before the trial court and this Court are not only disparate but conflicting. In his
testimony below, petitioner averred that he used his own money to purchase the motor vehicle by paying the sum of
P100,000.00, 5 which testimony is negated by his admission on page 5 of his petition 6 before this Court that private respondent
borrowed money from Tan Pit Sin with which to purchase the subject motor vehicle. Then, in his pleading before the court below,
particularly in his reply to the answer of private respondent, petitioner alleged that the motor vehicle was intended for his exclusive use
and not to service the family business. 7 And yet , in his petition before this Court, he claimed that the subject motor vehicle was
purchased for CLT Industries, which he solely owned and accordingly, registered in the latter's name. 8 On top of these entangled
averments, petitioner did not have in his possession the Certificate of Registration of the motor vehicle and the official receipt of
payment for the same, thereby lending credence to the claim of private respondent who has possession thereof, that he owns the
subject motor vehicle.

A certificate of registration of a motor vehicle in one's name indeed creates a strong presumption of ownership. For all practical
purposes, the person in whose favor it has been issued is virtually the owner thereof unless proved otherwise. In other words, such
presumption is rebuttable by competent proof.

The New Civil Code recognizes cases of implied trust other than those enumerated therein. 9 Thus, although no specific provision could
be cited to apply to the parties herein, it is undeniable that an implied trust was created when the certificate of registration of the motor
vehicle was placed in the name of the petitioner although the price thereof was not paid by him but by private respondent. The principle
that a trustee who puts a certificate of registration in his name cannot repudiate the trust by relying on the registration is one of the well-
known limitations upon a title. A trust, which derives its strength from the confidence one reposes on another especially between
brothers, does not lose that character simply because of what appears in a legal document.

Even under the Torrens System of land registration, this Court in some instances did away with the irrevocability or indefeasibility of a
certificate of title to prevent injustice against the rightful owner of the property. 10

It is true that the judgment 11 in a replevin suit must only resolve in whom is the right of possession. Primarily, the action of replevin is
possessory in character and determined nothing more than the right of possession. However, when the title to the property is distinctly
put in issue by the defendant's plea and by reason of the policy to settle in one action all the conflicting claims of the parties to the
possession of the property in controversy, the question of ownership may be resolved in the same proceeding.

Procedure-wise, the Court observes that the action by petitioner as plaintiff in the trial court was only one for Replevin and Damages.
Since replevin is only a provisional remedy where the replevin plaintiff claims immediate delivery of personal property pending the
judgment of the trial court in a principal case, 12 the petitioner should have filed in the trial court as a main case an action to recover
possession of the Isuzu Elf van which was in the possession of the private respondent. Logically, the basis of petitioner's cause of
action should have been his ownership of said van.In the State of California, from whose Code of Procedure 13 we copied our rule on
replevin, their old replevin rule which allowed the immediate delivery of the chattel at the commencement of the action upon application
with bond by the replevin plaintiff had already been struck down as early as July 1, 1971 in the case of Blair v. Pitchess. 14 As in fact, on
June 12, 1972 when the United States Supreme Court struck down as unconstitutional the Florida and Pennsylvania replevin statutes
in Fuentes v. Shevin, 15 most of the states, on their own, changed their replevin statutes to include a mandatory preliminary hearing
before the writ could be issued, similar to our mandatory preliminary hearing before the writ of preliminary injunction can be issued. 16

If that had been the case in this jurisdiction, then the trial judge would have discovered right away at the preliminary hearing that private
respondent should have immediately staked his claim of ownership and that would have created serious doubts about petitioner's claim
of ownership. Most likely, the writ would not have been issued and the complaint would have been dismissed motu proprio by the trial
court upon the discovery that the petitioner did not have a principal case therein. As it is, the complaint proceeded its course to the
detriment of private respondent.

Finally, although a "replevin" action is primarily one for the possession of personality, yet it is sufficiently flexible to authorize a
settlement of all equities between the parties, arising from or growing out of the main controversy. 17Thus, in an action for replevin
where the defendant is adjudged entitled to possession, he need not go to another forum to procure relief for the return of the replevied
property or secure a judgment for the value of the property in case the adjudged return thereof could not be had. Appropriately, the trial
court rendered an alternative judgment.

WHEREFORE, the questioned decision being in accordance with the law, the instant petition for review is hereby DENIED for lack of
merit.

SO ORDERED.

Narvasa, C.J., Padilla and Regalado, JJ., concur.

Puno, J., took no part.

G.R. No. L-12149 September 30, 1960

HEIRS OF EMILIO CANDELARIA, ETC., plaintiff-appellant,

vs.
LUISA ROMERO, ET AL., defendants-appellees.

Vicente P. Fernando for appellants.

P.L. Meer for appellees.

GUTIERREZ DAVID, J.:

This is an appeal from an order dismissing plaintiff's complaint for reconveyance of real property with damages. The dismissal was
ordered on a mere motion to dismiss before answer was filed.

The complaint, which was filed on December 20, 1956 by Ester Candelaria in her own behalf and in representation of the other alleged
heirs of Emilio Candelaria, alleges in substance that sometime prior to 1917 the latter and his brother Lucas Candelaria bought each a
lot in the Solokan Subdivision on the installment basis; that Lucas paid the first two installments corresponding to his lot, but faced with
the inability of meeting the subsequent installments because of sickness which caused him to be bedridden, he sold his interest therein
to his brother Emilio, who then reimbursed him the amount he had already paid, and thereafter continued payment of the remaining
installments until the whole purchase price had been fully satisfied; "that although Lucas Candelaria had no more interest over the lot,
the subsequent payments made by Emilio Candelaria until fully paid were made in the name of Lucas Candelaria, with the
understanding that the necessary documents of transfer will be made later, the reason that the transaction being from brother to
brother"; that in 1918 a transfer certificate of title for said lot was issued by the register of deeds of Manila in the name of "Lucas
Candelaria married to Luisa Romero"; that Lucas held the title to said lot merely in trust for Emilio and that this fact was acknowledged
not only by him but also by the defendants (his heirs) on several occasions; that Lucas' possession of the lot was merely tolerated by
Emilio and his heirs; that from the time Emilio bought the lot from his brother, Lucas had been collecting all its rents for his own use as
financial aid to him as a brother in view of the fact that he was bedridden without any means of livelihood and with several children to
support, although from 1926, when Emilio was confined at the Culion Leper Colony up to his death on February 5, 1936, Lucas had
been giving part of the rents to Fortunata Bautista, the second wife of Emilio, in accordance with the latter's wishes; that Lucas died in
August, 1942, survived by the present defendants, who are his spouse Luisa Romero and several children; and that said defendants
are still in possession of the lot, having refused to reconvey it to plaintiff despite repeated demands.

Instead of answering the complaint, the defendants filed a motion to dismiss, alleging, among other things, that plaintiff's cause of
action is unenforceable under the new Civil Code and that the action has already prescribed. And the court having upheld the motion,
plaintiff took this appeal.1awphl.nt

In the order granting the motion to dismiss, the lower court held that an express and not an implied trust was created as may be
gleaned from the facts alleged in the complaint, which is unenforceable without any writing, and that since Transfer Certificate of Title
No. 9584 covering the land in question had been issued to Lucas Candelaria way-back in 1918 or 38 years before the filing of the
complaint, the action has already prescribed.

The trust alleged to have been created, in our opinion, is an implied trust. As held, in effect, by this Court in the case of Martinez vs.
Grao (42 Phil., 35), where property is taken by a person under an agreement to hold it for, or convey it to another or the grantor, a
resulting or implied trust arises in favor of the person for whose benefit the property was intended. This rule, which has been
incorporated in the new Civil Code in Art. 1453 thereof, is founded upon equity. The rule is the same in the United States, particularly
where, on the faith of the agreement or the understanding, the grantee is enabled to gain an advantage in the purchase of the property
or where the consideration or part thereof has been furnished by or for such other. Thus, it has been held that where the grantee takes
the property under an agreement to convey another on certain conditions, a trust results for the benefit of such other or his heirs, which
equity will enforce according to the agreement. (89 C.J.S. 960.) It is also the rule there 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 of 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. (See 89 C.J.S. 964-968.)

In the present case, the complaint expressly alleges that "although Lucas Candelaria had no more interest over the lot, the subsequent
payments made by Emilio Candelaria until fully paid were made in the name of Lucas Candelaria, with the understanding that the
necessary documents of transfer will be made later, the reason that the transaction being brother to brother." From this allegation, it is
apparent that Emilio Candelaria who furnished the consideration intended to obtain a beneficial interest in the property in question.
Having supplied the purchase money, it may naturally be presumed that he intended the purchase for his own benefit. Indeed, it is
evident from the above-quoted allegation in the complaint that the property in question was acquired by Lucas Candelaria under
circumstances which show it was conveyed to him on the faith of his intention to hold it for, or convey it to the grantor, the plaintiff's
predecessor in interest.

Constructive or implied trusts may, of course, be barred by lapse of time. The rule in such trusts is that laches constitutes a bar to
actions to enforce the trust, and repudiation is not required, unless there is a concealment of the facts giving rise to the trust. (Diaz, et
al. vs. Gorricho, et al., 103 Phil., 261; 54 Off. Gaz. [37] 8429.) Continuous recognition of a resulting trust, however, precludes any
defense of laches in a suit to declare and enforce the trust. (See 581, 54 Am Jur. pp. 448-450.) The beneficiary of a resulting trust may,
therefore, without prejudice to his right to enforce the trust, prefer the trust to persist and demand no conveyance from the trustee. It
being alleged in the complaint that Lucas held the title to the lot in question merely in trust for Emilio and that this fact was
acknowledged not only by him but also by his heirs, herein defendants which allegation is hypothetically admitted we are not
prepared to rule that plaintiff's action is already barred by lapse of time. On the contrary, we think the interest of justice would be better
served if she and her alleged co-heirs were to be given an opportunity to be heard and allowed to present proof in support of their
claim.

Wherefore, the order of dismissal appealed from is hereby reversed and the case remanded to the court a quo for further proceedings.
So ordered without costs.

Paras, C.J., Bengzon, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Barrera, Paredes and Dizon, JJ., concur.