Panlilio vs. Citibank, N.A.

(G.R. No. 156335 November 28, 2007)

Facts:
Spouses Raul and Amalia Panlilio's initial intention was to invest money in a Citibank
product which had a high interest but since it was not available, they put their
PhP1,000,000.00 in a savings account instead. More than a month later, petitioners
placed another amount of PhP2,134,635.8
7 in the Citibanks Long-Term Commercial Paper (LTCP), a debt instrument that paid
a high interest, issued by the corporation Camella and Palmera Homes (C&PHomes).
Months after signing with the debt instrument and after receiving interests,
petitioners contested the investment contract and demanded that the respondent
bank to return their investment money. This happened when newspaper reports
came out that C&P Homes' stock had plunged in value.
Issues:
1.Whether the investment contract creates a trusteeship or agency.
2.Whether the respondent is under the obligation to return the investment money
of the petitioners.
Held:
Having bound themselves under the contract of agency, petitioners as principals in
an agency relationship are solely obliged to observe the solemnity of the
transaction entered into by the agent on their behalf, absent any proof that the
latter acted beyond its authority. Concomitant to this obligation is that the principal
also assumes the risks that may arise from the transaction. Indeed, as in the instant
case, bank regulations prohibit banks from guaranteeing profits or the principal in
an investment management account.
PNB v. Aznar, et al.
G.R. 171805 May 30, 2011
Facts
This case is consolidated with G.R. 172021, Merelo and Matias Aznar v. PNB
1958: Rural Insurance and Surety Company, Inc. (RISCO) ceased operation due
to business reverses
-In plaintiffs (Anzar et al.) desire to rehabilitate RISCO, they contributed a total
amount ofP212,720.00
-This was used to purchase 3 parcels of land in Cebu
-2 in the Minicipality of Talisay and 1 in the District of Lahug, Cebu City
-Marami yung nag-contribute for the P212k, lahat sila kasama ni Aznar as
defendants

After the purchase of the lots, titles were issued in the name of RISCO
The amount contributed by plaintiffs constituted as liens and encumbrances on the
properties as annotated in the titles of said lotsSuch annotation was made pursuant to the Minutes of the Special Meeting of
the Board of Directors of RISCO on March 14, 1961, and a part of it says:-And that
the respective contributions above-mentioned (Aznar et al.) shall constitute as their
lien or interest on the property described above, if and when said property are titled
in the name of RISCO, subject to registration as their adverse claim in pursuance of
the Provision of Land Registration Act, until such time their respective contributions
are refunded to them completely
Thereafter, various subsequent annotations were made on the same titles,
including the
Notice of Attachment and Writ of Execution both dated August 3,1962 in
favour of Philippine National Bank(PNB)
As a result, a Certificate of Sale was issued in favor of PNB, being the lone and
highest bidder of the 3 parcels of land
-This prompted Aznar et al. to file the instant case seeking the quieting of their
supposed title to the subject properties. Trial court ruled against PNB on the basis
that there was an express trust created over the subject properties whereby RISCO
was the trustee and the stockholders, Aznar, et al., were the beneficiaries
Court of Appeals opined that the monetary contributions made by Aznar, et al.
to RISCO can only be characterised as a loan secured by a lien on the subjected
lots, rather than an expressed trust
Issue: Whether or not there was a trust contract between RISCO and Aznar, et al.
Held: NO, at the outset, the Court agrees with the Court of Appeals that the
agreement contained in the Minutes of the Special Meeting of the RISCO Board of
Directors held on March 14, 1961 was a loan by the therein named stockholders to
RISCO. Careful perusal of the Minutes relied upon by plaintiffs-appellees in their
claim, showed that their contributions shall constitute as lien or interest on the
property. The term lien as used in the Minutes is defined as "a discharge on
property usually for the payment of some debt or obligation. Hence, from the use of
the word "lien" in the Minutes, We find that the money contributed by plaintiffsappellees was in the nature of a loan, secured by their liens and interests duly
annotated on the titles. The annotation of their lien serves only as collateral and
does not in any way vest ownership of property to plaintiffs. We are not persuaded
by the contention of Aznar, et al., that the language of the subject Minutes created
an express trust.

Torbela vs. Spouses Rosario GR 140528 Dec. 07, 2011

FACTS: The issue is over a parcel of land inherited by the Torbela siblings from their
parents. They executed a deed of absolute quitclaim over the property in favor of
Dr. Rosario. Four days after, a TCT was issued in Dr. Rosarios name covering the
property Another deed of absolute quitclaim was subsequently executed twelve
days after by Dr. Rosario acknowledging that he only borrowed the lot from the
Torbela siblings and was already returning the same. This deed was notarized but
not immediately annotated. Dr. Rosario used the land as mortgage for a loan he
obtain through DBP for P70,000.00. He used the proceeds of the loan to build a 4
storey building which was initially used as a hospital but later converted into a
commercial space. Part was leased to PT&T and the rest to Rosario s sister who
operated the Rose Inn Hotel and Restaurant. Dr. Rosario fully paid the loan from DBP
and the mortgage was cancelled and ratified by a notary public. However, Dr.
Rosario took another loan from PNB. He later acquired a third loan from Banco
Filipino and bought out the loan from PNB cancelling the mortgage with PNB.
Rosario failed to pay their loan in Banco Filipino and the property was extrajudicially
foreclosed. Meanwhile, back in 1965, the Torbela siblings sought to register their
ownership over the lot and to perfect their title but couldnt because the title was
still with DBP. They showed as proof the deed of absolute quitclaim presented
executed by Rosario himself. In 1986, they filed a civil case for recovery of
ownership and possession and damages. They tried to redeem the lot from Banco
Filipino but failed. TCTwas issued to Banco FIilipino.
The Torbelas claim they have right over the rents of the building through accession
because they are the land owners.
ISSUE: Who has right over the improvements made on the lot and the rents thereof.
RULING: According to Art. 440, the accessory follows the principal. Ownership of
property gives the right by accession to everything which is produced thereby, or
which is incorporated or attached thereto, either naturally or artificially. However, in
the case at bar, both Torbela siblings and Rosario are deemed in bad faith. The
Torbelas knew Rosario built on the land and even allowed him to use the land to
obtain a loan from DBP. Rosario on the other hand consciously built on land he knew
was not his. They both had knowledge and did not oppose. Art. 453 states that
when both parties are in bad faith, the case shall be treated as though both were in
good faith thus the application of Art. 448.448 allows the Land Owner 2 options in
the case at bar. Either indemnify Rosario and appropriate the lotto himself or ask
Rosario to buy the lot or the rent rate. This case was remanded to the RTC for the
Torbelas to make such decision. Still following the rules of accession, civil fruits such
as rent belong to the owner of the building. Rosario has rights over the rent and
improvements and shall continue until the Torbela siblings have chosen an option
from 448.

ON EXPRESS TRUST"x x x.
There was an express trust between the Torbela siblings and Dr. Rosario.There is no
dispute that the Torbela sibling inherited the title to Lot No. 356-A from their
parents, the Torbela spouses, who, in turn, acquired the same from the first
registered owner of Lot No. 356-A, Valeriano. Indeed, the Torbela siblings executed a
Deed of Absolute Quitclaim on December 12,1964 in which they transferred and
conveyed Lot No. 356-A to Dr. Rosario for the consideration of P9.00. However, the
Torbela siblings explained that they only executed the Deed as an accommodation
so that Dr. Rosario could have Lot No. 356-A registered in his name and use said
property to secure a loan from DBP, the proceeds of which would be used for
building a hospital on Lot No. 356-Aa claim supported by testimonial and
documentary evidence, and borne out by the sequence of events immediately
following the execution by the Torbela siblings of said Deed. On December 16, 1964,
TCT No.52751, covering Lot No. 356-A, was already issued in Dr. Rosarios name. On
December 28, 1964, Dr. Rosario executed his own Deed of Absolute Quitclaim, in
which he expressly acknowledged that he only borrowed Lot No. 356-A and was
transferring and conveying the same back to the Torbela siblings for the
consideration of P1.00. On February 21, 1965, Dr. Rosarios loan in the amount of
P70,200.00, secured by a mortgage on Lot No. 356-A, was approved by DBP. Soon
thereafter, construction of a hospital building started on Lot No. 356-A.Among the
notable evidence presented by the Torbela siblings is the testimony of Atty. Lorenza
Alcantara (Atty. Alcantara), who had no apparent personal interest in the present
case. Atty. Alcantara, when she was still a boarder at the house of Eufrosina Torbela
Rosario (Dr. Rosarios mother), was consulted by the Torbela siblings as regards the
extrajudicial partition of Lot No. 356-A. She also witnessed the execution of the two
Deeds of Absolute Quitclaim by the Torbela siblings and Dr. Rosario. In contrast, Dr.
Rosario presented TCT No. 52751, issued in his name, to prove his purported title to
Lot No. 356-A. In Lee Tek Sheng v. Court of Appeals,[53] the Court made a clear
distinction between title and the certificate of title: The certificate referred to is that
document issued by the Register of Deeds known as the Transfer Certificate of Title
(TCT). By title, the law refers to ownership which is represented by that document.
Petitioner apparently confuses certificate with title. Placing a parcel of land under
the mantle of the Torrens system does not mean that ownership thereof can no
longer be disputed. Ownership is different from a certificate of title. The TCT is only
the best proof of ownership of a piece of land. Besides, the certificate cannot always
be considered as conclusive evidence of ownership. Mere issuance of the certificate
of title in the name of any person does not foreclose the possibility that the real
property may be under co-ownership with persons not named in the certificate or
that the registrant may only be a trustee or that other parties may have acquired
interest subsequent to the issuance of the certificate of title. To repeat, registration
is not the equivalent of title, but is only the best evidence thereof. Title as a concept
of ownership should not be confused with the certificate of title as evidence of such
ownership although both are interchangeably used.

Registration does not vest title; it is merely the evidence of such title. Land
registration laws do not give the holder any better title than what he actually has.
[55] Consequently, Dr. Rosario must still prove herein his acquisition of title to Lot
No. 356-A, apart from his submission of TCT No. 52751 in his name. Dr. Rosario
testified that he obtained Lot No. 356-A after paying the Torbela siblingsP25,000.00,
pursuant to a verbal agreement with the latter. The Court though observes that Dr.
Rosarios testimony on the execution and existence of the verbal agreement with
the Torbela siblings lacks significant details (such as the names of the parties
present, dates, places, etc.) and is not corroborated by independent evidence. In
addition, Dr. Rosario acknowledged the execution of the two Deeds of Absolute
Quitclaim dated December 12, 1964 and December 28, 1964, even affirming his
own signature on the latter Deed. The Parol Evidence Rule provides that when the
terms of the agreement have been reduced into writing, it is considered as
containing all the terms agreed upon and there can be, between the parties and
their successors in interest, no evidence of such terms other than the contents of
the written agreement.[56] Dr. Rosario may not modify, explain, or add to the terms
in the two written Deeds of Absolute Quitclaim since he did not put in issue in his
pleadings (1) an intrinsic ambiguity, mistake, or imperfection in the Deeds; (2)
failure of the Deeds to express the true intent and the agreement of the parties
thereto; (3) the validity of the Deeds; or (4) the existence of other terms agreed to
by the Torbela siblings and Dr. Rosario after the execution of the Deeds.[57]
Even if the Court considers Dr. Rosarios testimony on his alleged verbal agreement
with the Torbela siblings, the Court finds the same unsatisfactory. Dr. Rosario
averred that the two Deeds were executed only because he was planning to secure
loan from the Development Bank of the Philippines and Philippine National Bank and
the bank needed absolute quitclaim[.][58]

While Dr. Rosarios explanation makes sense for the first Deed of Absolute Quitclaim
dated December 12, 1964 executed by the Torbela siblings (whichtransferred Lot
No. 356-A to Dr. Rosario for P9.00.00), the same could not be said for the second
Deed of Absolute Quitclaim dated December 28, 1964 executed by Dr. Rosario. In
fact, Dr. Rosarios Deed of Absolute Quitclaim (in which he admitted that he only
borrowed Lot No. 356-A and was transferring the same to the Torbela siblings
forP1.00.00) would actually work against the approval of Dr. Rosarios loan by the
banks. Since Dr. Rosarios Deed of Absolute Quitclaim dated December 28, 1964 is a
declaration against his self-interest, it must be taken as favoring the truthfulness of
the contents of said Deed.[59]It can also be said that Dr. Rosario is estopped from
claiming or asserting ownership over Lot No. 356-A based on his Deed of Absolute
Quitclaim dated December 28, 1964. Dr.Rosario's admission in the said Deed that
he merely borrowed Lot No. 356-A is deemed conclusive upon him. Under Article
1431 of the Civil Code, [t]hrough estoppel an admission or representation is
rendered conclusive upon the person making it, and cannot be denied or disproved

as against the person relying thereon.[60] That admission cannot now be denied
by Dr. Rosario as against the Torbela siblings, the latter having relied upon his
representation. Considering the foregoing, the Court agrees with the RTC and the
Court of Appeals that Dr. Rosario only holds Lot No. 356-A in trust for the Torbela
siblings. Trust is the right to the beneficial enjoyment of property, the legal title to
which is vested in another. It is a fiduciary relationship that obliges the trustee to
deal with the property for the benefit of the beneficiary. Trust relations between
parties may either be express or implied. An express trust is created by the
intention of the trustor or of the parties, while an implied trust comes into being by
operation of law.[61]Express trusts are created by direct and positive acts of the
parties, by some writing or deed, or will, or by words either expressly or impliedly
evincing an intention to create a trust. Under Article 1444 of the Civil Code, [n]o
particular words are required for the creation of an express trust, it being sufficient
that a trust is clearly intended.[62] It is possible to create a trust without using the
word trust or trustee. Conversely, the mere fact that these words are used does
not necessarily indicate an intention to create a trust. The question in each case is
whether the trustor manifested an intention to create the kind of relationship which
to lawyers is known as trust. It is immaterial whether or not he knows that the
relationship which he intends to create is called a trust, and whether or not he
knows the precise characteristics of the relationship which is called a trust. In
Tamayo v. Callejo,[64] the Court recognized that a trust may have a constructive or
implied nature in the beginning, but the registered owners subsequent express
acknowledgement in a public document of a previous sale of the property to
another party, had the effect of imparting to the aforementioned trust the nature of
an express trust. The same situation exists in this case. When Dr. Rosario was able
to register Lot No.356-A in his name under TCT No. 52751 on December 16, 1964,
an implied trust was initially established between him and the Torbela siblings under
Article 1451 of the Civil Code, which provides: ART. 1451. When land passes by
succession to any person and he causes the legal title to be put in the name of
another, a trust is established by implication of law for the benefit of the true owner.
Dr. Rosarios execution of the Deed of Absolute Quitclaim on December 28, 1964,
containing his express admission that he only borrowed Lot No. 356-A from the
Torbela siblings, eventually transformed the nature of the trust to an express one.
The express trust continued despite Dr. Rosario stating in his Deed of Absolute
Quitclaim that he was already returning Lot No. 356-A to the Torbela siblings as Lot
No. 356-A remained registered in Dr. Rosarios name under TCT No. 52751 and Dr.
Rosario kept possession of said property, together with the improvements thereon.

Rizal Surety and Insurance company v CA

Facts:

On December 5, 1961, the Reparations Commission (hereinafter referred to as

REPACOM) sold to private respondent Transocean Transport Corporation the vessel
'M/V TRANSOCEAN SHIPPER' payable in twenty (20) annual installments. On June 22,
1974, the said vessel was insured with petitioner Rizal Surety & Insurance Company
for US$3,500,000.00, with stipulated value in Philippine Currency of
P23,763,000.00.
Sometime in February, 1975, the vessel 'M/V TRANSOCEAN SHIPPER' was lost in the
Mediterranean Sea. The insured filed claims for the insurance proceeds. A partial
compromise agreement was entered into between the REPACOM and respondent
Transocean regarding the insurance proceeds.
April 18, 1975, anticipating payment of the insurance proceeds in dollars, private
respondent requested the Central Bank (CB) to allow it to retain the expected dollar
insurance proceeds for a period of three (3) months, to enable it to complete its
study and decide on how to utilize the said amount 6. The CB granted the request
subject to conditions, one of which was that the proceeds be deposited with a local
commercial bank in a special dollar account up to and until July 31, 1975.
November 18, 1975, private respondent and REPACOM requested petitioner to pay
the insurance proceeds in their joint names, 8 despite problems regarding the
amount of their respective claims.
CB authorized it to receive and deposit the dollar insurance proceeds in a noninterest bearing account in the name of petitioner and for the joint account of
REPACOM and private respondent. 11
Petitioner indicated that it would effect the requested remittance when both
REPACOM and private respondent shall have unconditionally and absolutely
released petitioner from all liabilities under its policies by executing and delivering
the Loss and Subrogation Receipt prepared by petitioner
the parties proposed certain amendments and corrections to the Loss and
Subrogation Receipt, a revised version thereof was finally presented to the Office of
the Solicitor General, and on May 25, 1977, then Acting Solicitor General Vicente V.
Mendoza wrote petitioner demanding that it pay interest on the dollar balance per
the CB letter-authority it was your duty as trustee of the said funds to see to it that
the same earned the interest authorized by the Central Bank. As trustee, you were
morally and legally bound to deposit the funds under terms most advantageous to
the beneficiaries. If you did not wish to transfer the deposit from the Prudential
Bank and Trust Company, which we understand is your sister company, to another
bank where it could earn interest, it was your obligation to require the Prudential
Bank and Trust Company, at least, to place the deposit to an interest-bearing
account.

petitioner through counsel rejected the Acting Solicitor General's demand, asserting
that (i) there was no trust relationship, express or implied, involved in the
transaction; (ii) there was no obligation on the part of petitioner to transfer the
dollar deposit into an interest-bearing account because the CB authorization was
given to REPACOM and not to petitioner, (iii) REPACOM did not ask petitioner to
place the dollars in an interest-bearing account, and, (iv) no Loss and Subrogation
Receipt was executed.
A demand letter for interest on the said dollar balance was sent by private
respondent's counsel to petitioner and Prudential Bank, which neither replied
thereto nor complied therewith.
the trial court issued its decision holding that (i) a trust relationship existed between
petitioner as trustee and private respondent and REPACOM as beneficiaries, (ii) from
April 21, 1976, petitioner should have deposited the remaining dollar deposit in an
interest-bearing account either by remitting the same to the PNB in compliance with
the request of REPACOM and private respondent, or by transferring the same into an
interest-bearing account with Prudential Bank, and (iii) this duty to deposit the funds
in an interest-bearing account ended when private respondent signed the Loss and
Subrogation Receipt on January 31, 1977.
The Court of Appeals upheld the judgment of the trial court, and confirmed that a
trust had in fact been established and that petitioner became liable for interest on
the dollar account in its capacity as trustee, not as insurer.
Issue: WON a trust relationship existed between Rizal and Transocean?
Held/Ratio: The facts sufficiently manifest the intention between REPACOM and
TRANSOCEAN on one hand and RIZAL, on the other, to create a trust.
The disputed portion or the balance of the insurance proceeds remaining after
deducting the undisputed portions as agreed above shall be kept in the same bank
deposit in trust for and in the joint name of REPACOM and TRANSOCEAN until such
time as there is a court decision or a compromise agreement on the full amount or
portion thereof, or until such time as REPACOM and TRANSOCEAN shall agree jointly
to transfer such balance to another bank account.
It appears clearly that even from the start of the communications among
themselves, especially between defendant RIZAL on one hand and REPACOM and
the plaintiff corporation, on the other hand, it shows that the parties intended that
the dollar insurance proceeds be held in the name of defendant RIZAL for the joint
benefit of REPACOM and plaintiff corporation. No repudiation was ever made or any
one of the parties for that matter questioned said agreement. There was, therefore,
created a trust relationship between RIZAL on one hand and the REPACOM and
plaintiff corporation on the other, over the dollar insurance proceeds of the lost
vessel.

It is fundamental in the law of trusts that certain requirements must exist before an
express trust will be recognized. Basically, these elements include a competent
trustor and trustee, an ascertainable trust res, and sufficiently certain beneficiaries.
Stilted formalities are unnecessary, but nevertheless each of the above elements is
required to be established, and, if any one of them is missing, it is fatal to the trusts
(sic). Furthermore, there must be a present and complete disposition of the trust
property, notwithstanding that the enjoyment in the beneficiary will take place in
the future. It is essential, too, that the purpose be an active one to prevent trust
from being executed into a legal estate or interest, and one that is not in
contravention of some prohibition of statute or rule of public policy. There must also
be some power of administration other than a mere duty to perform a contract
although the contract is for a third-party beneficiary. A declaration of terms is
essential, and these must be stated with reasonable certainty in order that the
trustee may administer, and that the court, if called upon so to do, may enforce, the
trust.

Chu Jr. vs Caparas

Facts:
At the root of the case is a parcel of land with an area of 26,151 square meters
(subject property) located at Maguyam, Silang, Cavite, originally owned and
registered in the name of Miguela Reyes and covered by Tax Declaration (TD) No.
9529
Petitioners filed a complaint to recover possession of the subject property against
the respondents, with a prayer to annul the sale of the subject property executed
between the respondents. In the complaint, the petitioners alleged that they are the
successors-in-interest of Miguela over the subject property, which Caparas held in
trust for Miguela. The petitioners also averred that the subject property was
erroneously included in the sale of land between the respondents.
The subject property was previously part of the 51,151-square meter tract of land
owned by Miguela at Maguyam, Silang, Cavite. On July 5, 1975, Miguela sold to
Caparas 25,000 square meters of the eastern portion of the 51,151-square meter
tract of land. Miguela retained for herself the balance.
Under the Caparas survey plan, the parcel of land supposedly retained by Miguela
was erroneously transferred to the eastern portion of the original 51,151-square
meter tract of land. As a result of the error, the subject property was included in the
consolidated parcels of land owned by Caparas. The petitioners asserted that
Caparas admitted the wrongful inclusion of the subject property owned by Miguela
in the consolidated parcels of land through Caparas "Sinumpaang Salaysay ng
Pagpapatotoo"9 dated August 27, 1990. The trial court and the CA ruled in favor of

the buyers due to the fact that it was proven in court that the lot sold to them was
different from what was being alleged by the petitioners and that petitioners knew
of the registration that the buyers conducted.
Issue: WON there was encroachment made by the spouses Perez in the petitioners
property?
Held/Ratio: The petitioners assert that the CA disregarded the evidence of Caparas
"Sinumpaang Salaysay ng Pagpapatotoo"23 on Miguelas ownership of the subject
property and Caparas admission that she was merely a trustee thereof. The
petitioners also assert that the CA should have also considered that the spouses
Perez, as Caparas successors-in-interest, are also trustees in the subject property.
A review of the records from the RTC and the CA reveals that both arrived at the
same factual consideration there was no encroachment. We agree with this factual
finding for the following reasons: First, the records undoubtedly established that the
subject property was not the parcel of land that the petitioners purchased from
Miguela. We note that the Caparas survey plan was used in identifying the property
purchased by the petitioners from Miguela. The deed of sale between them showed
what the petitioners purchased from Miguela referred to another parcel of land
designated as Lot No. 3 in the Caparas survey plan, while the subject property was
designated as Lot No. 1 of the same plan. Significantly, Chu also admitted that the
parcel of land they purchased from Miguela was different from the subject property.
Caparas sold to the spouses Perez the consolidated parcels of land in a deed
entitled "Kasulatan ng Bilihang Tuluyan." The petitioners claimed that included in
the aforesaid sale was a parcel of land with boundary description similar to the
25,000-square meter parcel of land sold by Miguela to Caparas.
The petitioners action against Caparas and the spouses Perez for reconveyance,
based on trust, must fail for lack of basis. An action for reconveyance is a legal and
equitable remedy that seeks to transfer or reconvey property, wrongfully registered
in another persons name, to its rightful owner.34 To warrant reconveyance of the
land, the plaintiff must allege and prove, among others,35 ownership of the land in
dispute and the defendants erroneous, fraudulent or wrongful registration of the
property.

In the present petition, the petitioners failed to prove that the parcel of land they
owned was the subject property. Logically, there is nothing to reconvey as what the
spouses Perez registered in their names did not include the parcel of land which the
petitioners, by their evidence, own.

We also see no trust, express or implied, created between the petitioners and the
spouses Perez over the subject property. A trust by operation of law is the right to
the beneficial enjoyment of a property whose legal title is vested in another.37 A
trust presumes the existence of a conflict involving one and the same property
between two parties, one having the rightful ownership and the other holding the
legal title. There is no trust created when the property owned by one party is
separate and distinct from that which has been registered in anothers name.

Alejandro Ty vs. Sylvia Ty 553 SCRA 306

Facts: Alexander Ty, son of Alejandro Ty and husband of Sylvia Ty, died of cancer at
the age of 34. Sylvia files petition for the settlement of Alexanders intestate estate.
She also asks court to sell or mortgage properties in order to pay the estate tax
amounting toP4,714,560.02 assessed by the BIR. The properties include a parcel of
land in EDSA Greenhills, a residential land in Wack Wack, and the Meridien condo
unit in Annapolis, Greenhills. Alejandro Ty opposed the move and filed for recovery
of the property with prayer for preliminary injunction and/or temporary restraining
order. Plaintiff Alejandro claims that he owns the EDSA, Wack Wack and Meridien
condo unit because he paid for them.
The property was supposedly registered in trust for Alexanders brothers and sisters
incase plaintiff dies. Plaintiff also claimed that Alex had no financial capacity to
purchase the disputed property, as the latter was only dependent on the former.
Sylvia countered that Alexander had purchased the property with his money.
Alexander was financially capable of purchasing it because he had been managing
the family corporations since he was 18 years old and was also engage in other
profitable businesses. The RTC granted the application for preliminary injunction and
decides in favor of plaintiff regarding the recovery of the property. CA reversed the
RTC stating that the implication created by law under Art. 1448 does not apply if the
property was in the name of the purchasers child. They agreed that plaintiff partly
paid for the EDSA property. Plaintiff appealed.
Issue: whether there was an implied trust under Art. 1448 of the Civil Code?
Held: No, there was no implied trust created in relation to the EDSA property. If the
person to whom the title is conveyed is the child of the one paying the price of the
sale, no trust is implied by law under Art. 1448, the so-called purchase money
resulting trust. The said article provides an exception: if the person to whom the
title is conveyed is a child, legitimate or illegitimate, of the one paying the price of
the sale, NO TRUST is IMPLIED by LAW, it being disputable presumed that there is a
gift in favor of the child. The Court also noted that plaintiff failed to prove that he
did not intend a donation. Regarding the Meridien Condo and Wack Wack property,

the court said that plaintiff failed to prove that purchase money came from him.
They also said that Alexander was capable of purchasing the property as he had
been working for nine years, had a car care business, and was actively engaged in
the business dealings of several family corporations from which he received
emoluments and other benefits. Hence, no implied trust created because there was
no proof that plaintiff had paid for said properties.

Padilla v. CA
Facts:
Land owned by Padilla, was mortgaged to GSIS. Padilla was not able to pay the loan
so GSIS forclosed the property but gave padilla the right to repurchase the property
within one year. Padilla defaulted but made a contract with Nadera to pay the
necessary balance and to transfer the property to him. Nadera discovered that
Padilla lost his right of redemption but through a deal with GSIS, the padillas using
funds from Nadera, bought the property from GSIS although their names were still
in the deed of sale. A subsequent deed of sale was issued between nadera and
padilla which was used to create a TCT in favor of Nadera. The TCT was annotated
with an adverse claim from padillas heir citing insidious words and machinations in
obtaining the deed of sale from Padilla. The court ruled in favor of Nadera and
ordered the padillas to turn over the property
Issue: WON the sale was valid and whether a trust relationship was existing
between padilla and nadera
Held/Ratio: The validity of this agreement is not questioned. If the resale by the
Government Service Insurance System upon payment of the price of redemption by
Nadera was made in favor of the Padilla spouses, it was purely a matter of form
since they were the mortgage debtors, and the least that can be said under the
circumstances is that they should be considered as trustees under an implied or
resulting trust for the benefit of the real owner, namely, respondent Nadera. Article
1448 of the Civil Code says that "there is an implied trust when property is sold, and
the legal estate is granted to one party but the price is paid by another for the
purpose of having the beneficial interest of the property ..." The concept of implied
trusts is that from the facts and circumstances of a given case the existence of a
trust relationship is inferred in order to effect the presumed (in this case it is even
expressed) intention of the parties or to satisfy the demands of justice or to protect
against fraud.

Heirs of Narvasa Sr. vs Imbornal

Facts: Basilia Imbornal+ (Basilia) had four (4) children, namely, Alejandra, Balbina,
Catalina, and Pablo.Francisco I. Narvasa, Sr. 9 (Francisco) and Pedro Ferrer (Pedro)
were the children10 of Alejandra, while petitioner Petra Imbornal (Petra) was the
daughter of Balbina.11 Petitionersare the heirs and successors-in-interest of
Francisco, Pedro, and Petra (Francisco, et al.). On the other hand,
respondentsEmiliana, Victoriano, Felipe, Mateo, Raymundo, Maria, and Eduardo, all
surnamed Imbornal, are the descendants of Pablo. 12
During her lifetime, Basilia owned a parcel of land situated at Sabangan, Barangay
Nibaliw West, San Fabian, Pangasinan with an area of 4,144 square meters (sq. m.),
more or less (Sabangan property), which she conveyed to her three (3) daughters
Balbina, Alejandra, and Catalina (Imbornal sisters) sometime in 1920. 13
Meanwhile, Catalinas husband, Ciriaco Abrio (Ciriaco), applied for and was granted
a homestead patent over a 31,367-sq. m. riparian land (Motherland) adjacent to the
Cayanga River in San Fabian, Pangasinan. 14 He was eventually awarded Homestead
Patent No. 2499115 therefor, and, on December 5, 1933, OCT No. 1462 was issued in
his name. Later, or on May 10, 1973, OCT No. 1462 was cancelled, and Transfer
Certificate of Title (TCT) No. 101495 16 was issued in the name of Ciriacos heirs,
namely: Margarita Mejia; Rodrigo Abrio, marriedto Rosita Corpuz; Antonio Abrio,
married to Crisenta Corpuz; Remedios Abrio, married to Leopoldo Corpuz; Pepito
Abrio; Dominador Abrio; Francisca Abrio; Violeta Abrio; and Perla Abrio (Heirs of
Ciriaco).
Issue: The issue to be resolved by the Court is whether or not the CA erred in
declaring that: (a) the descendants of Ciriaco are the exclusive owners of the
Motherland; (b) the descendants of respondent Victoriano are the exclusive owners
of the First Accretion; and (c) the descendants of Pablo (respondents collectively)
are the exclusive owners of the Second Accretion on the basis of the following
grounds: (a) prescription of the reconveyance action, which was duly raised as
anaffirmative defense in the Amended Answer, and (b) the existence of an implied
trust between the Imbornal sisters and Ciriaco.
Held/Ratio:
The petition is bereft of merit.
When property is registered in anothers name, an implied or constructive trust is
created by law in favor of the true owner.38 Article 1456 of the Civil Code provides
that a person acquiring property through fraud becomes, by operation of law, a
trustee ofan implied trust for the benefit of the real owner of the property. An action
for reconveyance based on an implied trust prescribes in ten (10) years, reckoned
from the date of registration of the deed or the date ofissuance of the certificate of
title over the property,39 if the plaintiff is not in possession. However, if the plaintiff
is in possession of the property, the action is imprescriptible. As held in the case of
Lasquite v. Victory Hills, Inc.:40

it was filed way beyond the 10-year reglementary period within which to seek the
reconveyance of two (2) of these properties, namely, the Motherland and the First
Accretion, with only the reconveyance action with respect to the Second Accretion
having been seasonably filed. Thus, considering thatrespondents raised prescription
as a defense in their Amended Answer,43 the Amended Complaint with respect to
the Motherland and the First Accretion ought to have beendismissed based on the
said ground, with only the cause of action pertaining to the Second Accretion
surviving. As will be, however, discussed below, the entirety of the Amended
Complaint, including the aforesaid surviving cause of action, would falter on its
substantive merits since the existence of the implied trust asserted in this case had
not been established. In effect, the said complaint is completely dismissible.
The main thrust of Francisco, et al.s Amended Complaint is that an implied trust
had arisen between the Imbornal sisters, on the one hand, and Ciriaco, on the other,
with respect to the Motherland. This implied trust is anchored on their allegation
that the proceeds from the sale of the Sabangan property an inheritance of their
predecessors, the Imbornal sisters were used for the then-pending homestead
application filed by Ciriaco over the Motherland. As such, Francisco, et al. claim that
they are, effectively, coowners of the Motherland together with Ciriacos heirs.
An implied trust arises, not from any presumed intention of the parties, but by
operation of law in order to satisfy the demands of justice and equity and to protect
against unfair dealing or downright fraud. 44 To reiterate, Article 1456 of the Civil
Code states that "[i]f 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."
The burden of proving the existence ofa trust is on the party asserting its existence,
and such proof must be clear and satisfactorily show the existence of the trust and
its elements.45 While implied trusts may be proven by oral evidence, the evidence
must be trustworthy and received by the courts with extreme caution, and should
not be made to rest on loose, equivocal or indefinite declarations. Trustworthy
evidence is required because oral evidence can easily be fabricated. 46
In this case, it cannot be said, merely on the basis of the oral evidence offered by
Francisco, et al., that the Motherland had been either mistakenly or fraudulently
registered in favor of Ciriaco. Accordingly, it cannot be said either that he was
merely a trustee of an implied trust holding the Motherland for the benefit of the
Imbornal sisters or their heirs.
Sime Darby Pilipinas Inc vs Mendoza
Facts: Petitioner Sime Darby Pilipinas, Inc. (Sime Darby) employed Jesus B. Mendoza
(Mendoza) as sales manager to handle sales, marketing, and distribution of the
company's tires and rubber products. On 3 July 1987, Sime Darby bought a Class
"A" club share4 in Alabang Country Club (ACC) from Margarita de Araneta as

evidenced by a Deed of Absolute Sale.5 The share, however, was placed under the
name of Mendoza in trust for Sime Darby since the By-Laws6 of ACC state that only
natural persons may own a club share.7 As part of the arrangement, Mendoza
endorsed the Club Share Certificate8 in blank and executed a Deed of Assignment,9
also in blank, and handed over the documents to Sime Darby. From the time of
purchase in 1987, Sime Darby paid for the monthly dues and other assessments on
the club share. When Mendoza retired in April 1995, Sime Darby fully paid Mendoza
his separation pay amounting to more than P3,000,000. Nine years later, or
sometime in July 2004, Sime Darby found an interested buyer of the club share for
P1,101,363.64. Before the sale could push through, the broker required Sime Darby
to secure an authorization to sell from Mendoza since the club share was still
registered in Mendozas name. However, Mendoza refused to sign the required
authority to sell or special power of attorney unless Sime Darby paid him the
amount of P300,000, claiming that this represented his unpaid separation benefits.
As a result, the sale did not push through and Sime Darby was compelled to return
the payment to the prospective buyer. On 13 September 2005, Sime Darby filed a
complaint10 for damages with writ of preliminary injunction against Mendoza with
the Regional Trial Court (RTC) of Makati City, Branch 132. The Trial court ruled in
favor of Darby while the CA reversed
Issues: The issues for our resolution are: (1) whether Sime Darby is entitled to
damages and injunctive relief against Mendoza, its former employee; and (2)
whether the appellate court erred in declaring that Mendoza is the owner of the club
share.
Held/Ratio:
In the present case, petitioner Sime Darby has sufficiently established its right over
the subject club share. Sime Darby presented evidence that it acquired the Class
"A" club share of ACC in 1987 through a Deed of Sale. Being a corporation which is
expressly disallowed by ACCs By-Laws to acquire and register the club share under
its name, Sime Darby had the share registered under the name of respondent
Mendoza, Sime Darbys former sales manager, under a trust arrangement. Mendoza
admitted signing the club share certificate and the assignment of rights, both in
blank, and turning it over to Sime Darby. Clearly, these circumstances show that
there existed a trust relationship between the parties. While the share was bought
by Sime Darby and placed under the name of Mendoza, his title is only limited to
the usufruct, or the use and enjoyment of the clubs facilities and privileges while
employed with the company. In Thomson v. Court of Appeals,20 we held that a trust
arises in favor of one who pays the purchase price of a property in the name of
another, because of the presumption that he who pays for a thing intends a
beneficial interest for himself. While Sime Darby paid for the purchase price of the
club share, Mendoza was given the legal title. Thus, a resulting trust is presumed as
a matter of law. The burden then shifts to the transferee to show otherwise. Plaintiff
bought the subject share in 1987. As the purchaser of the share, it has interest and

right over it. There is a presumption that the share was bought for the use of the
defendant while the latter is still connected with the plaintiff. This is because when
the share was registered under the name of defendant, the latter signed the stock
certificate in blank as well as the deed of assignment and placed the certificate
under the possession of the plaintiff. Hence, plaintiff did not intend to relinquish its
interest and right over the subject, rather it intended to have the share held in trust
by defendant, until a new grantee is named. This can be inferred from plaintiffs
witness testimony that plaintiff required the defendant to sign the said documents
so that the plaintiff can be assured that its ownership of the property is properly
documented. Thirdly, plaintiffs payments of monthly billings of the subject share
bolster defendant possession in trust rather than his ownership over the share. With
this, the right of plaintiff over the share is clear and unmistakable. With defendants
continued use of the subject share despite that he is not anymore connected with
plaintiff, and with plaintiffs demand upon the defendant to desist from making use
of the club facilities having been ignored, clearly defendant violated plaintiffs right
over the use and enjoyment thereof. Hence, plaintiff is entitled to its prayer for
injunction.

HEIRS OF CANDELARIA VS. ROMERO

Facts:
Parties to this case are the heirs of Emilio Candelaria as plaintiff and Luisa Romero,
and the heirs of Lucas as defendants. Emilio and Lucas Candelaria bought a lot on
an installment basis. Lucas paid the first two installments but because of sickness
which caused him to be bedridden, he sold his share to his brother Emilio who
continued to pay the purchase price until the obligation to pay had been fully
satisfied. The TCT was however issued under the name of Lucas. Nevertheless,
Lucas acknowledges that he merely held the title in trust for his brother with the
understanding that the necessary documents of transfer will be made later and
this fact was known not only to him but also to the defendants. However upon his
death, his heirs refused to reconvey the lot to plaintiff despite repeated demands.
Plaintiff brought an action in the CFI for a complaint for reconveyance of real
property. The lower court however dismissed the case on the ground that an
express trust, and not an implied trust, was created and that the action had already
prescribed
Issue: What kind of trust was created? Express or implied trust? Implied trust.

Held:

Where the grantee takes the property under an agreement to convey to another on
certain conditions, a trust results for the benefit of such other or his heirs. It is also
the rule that there is an implied trust when a person purchases land with his own
money and takes 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. This kind of trust is from equity and arises by implication or
operation of law. In the present case, it is apparent that Emilio furnished the
consideration intending to obtain a beneficial interest in the property in question.
Having supplied the money, it is presumed that he intended to purchase the lot for
his own benefit. Moreover, by entering into an agreement with Emilio that the
necessary documents of transfer will be made later, Lucas acknowledged the he
merely held the property in trust for his brother with the understanding that it will
eventually be conveyed to the plaintiffs predecessor in interest. Lastly, by
acknowledging the presence of trust, the plaintiffs action cannot be said to have
been barred by lapse of time. The case is therefore remanded for further
proceedings

ADAZA V. CA
Facts:
In 1953, Victor Adaza Sr. executed a Deed of Donation, covering the disputed land in
this case, located in Sinonok, Zamboanga del Norte in favor of Respondent Violeta.
The land being disposable public land had been held and cultivated by Victor, Sr.
With the help of her brother, Horacio, Violeta filed a homestead application over the
land and a free patent was issued in 1956. An OCT was issued in1960. In 1962,
Violeta and husband, Lino obtained a loan from PNB by executing a mortgage on the
land, while Homero Adaza, brother of Violeta remained administrator of the same
In 1971, Horacio invited his brothers and sisters for afamily gathering where he
asked Violeta to sign aDeed of Waiver with respect to the property inSinonok. The
Deed stated that the land was owned incommon by Violeta and Horacio even
though theOCT was in her name only. The Deed also providedfor the waiver,
transfer and conveyance of Violeta toHoracio of of the property and its
improvements.Violeta and Horacio signed the Deed with Homero asa witness.A few
months later, Violeta and husband Lino filed acomplaint for annulment of the Deed
of waiver andfor damages against Horacio and wife Felisa. Thecomplaint alleged
that (1) she was absolute owner of the land by virtue of an unconditional
donationexecuted by her father in her favor; (2) she wasregistered owner; (3) she
signed the Deed of waiverbecause of fraud, misrepresentation and undueinfluence;
and (4) because of such malicious acts,she is entitled to damages from Horacio.
Trial Court

: Declared Deed of Waiver as valid andbinding upon Violeta, that Horacio was coowner of of the land, and odering Violeta to pay Horacionthe proceeds of his
share.
CA: Reversed Trial court decision, declaring that though the deed was signed
voluntarily, such Deed was without consideration or cause because the land had
been unconditionally donated to Violeta alone.
Issue: Who owns the disputed parcel of land?
Ruling:
Petition granted. Deed of donation had a crossed-out provision: That the donee shall
share of the entire property with one of her brothers and sisters after the death of
the donor. The record is bereft of any indication of any evil intent or malice on the
part of Homero, Victor, Jr. and Teresita (siblings of Violeta) that would suggest
deliberate collusion against Violeta. Their father had executed the Deed of Donation
with the understanding that the same would be divided between Horacio and
Violeta and that Violeta had signed the Deed of Waiver freely and voluntarily. Victor
Adaza, Sr. left 4 parcels of land divided among the 6 children through the practice of
having the lands acquired by him titled to the name of one of his children. The
property involved in the instant case is owned in common by Violeta and brother,
Horacio even though the OCT was only in her name. She held half of the land in
trust for petitioner Horacioimplied trust based on Article 1449 of the Civil Code:
There is also an implied trust when a donation is made to person but It appears that
although the legal estate is transmitted to the donee, he nevertheless is either to
have no beneficial interest of only a part thereof. The doctrine of laces is not to be
applied mechanically as between near relatives.

DIAZ, ET.AL. VS. GORRICHO AND AGUADO

Facts:
Spouses Francisco Diaz and Maria Sevilla owned two parcels of lots (Lots Nos. 1941
and 3073)in Cabanatuan. Sometime later, Francisco died, and the properties were
left in the hands of her wife and three children. Sometime in 1935, the appellee
Carmen Gorricho filed an action against Maria Sevilla and in connection therewith, a
writ of attachment was issued upon the shares of the latter in the two parcels of
land. Since Maria Sevilla failed to redeem it within one year, a final deed of sale in
favor of Carmen Gorricho was issued. In the said deed, however, the sheriff
conveyed to Gorricho the whole of the two parcels instead of only the half-interest
of Maria Sevilla therein. Pursuant to the said deed, Carmen Gorricho obtained the
titles of the two parcels of land in her name in the year 1937, and has been
possessing the said lands as owner ever since. In 1952, the children of Maria Sevilla

(who died a year before) filed an action against the respondents to compel the
latter to execute in their favor a deed of reconveyance over an undivided one-half
interest of the lots in question, which the respondents were allegedly holding in
trust for them. The respondents raised the defense that the petitioners action has
long prescribed.
Issue: Do implied trust prescribe or may they be defeated by laches?

Ruling of the CFI of Nueva Ecija:

While a constructive trust in plaintiffs favor arose when Gorricho took advantage of
the error of the provincial yep question and obtained title in her, the action of the
plaintiff was, however, barred by laches and prescription.
Petitioners:
The disputed property was acquired by Gorricho through an error of the provincial
sheriff; that having been acquired through error, it was subject to an implied trust,
as provided by Article1456 of the New Civil Code; and therefore, since the trust is
continuing and subsisting, the appellants may compel reconveyance of the property
despite the lapse of time, specially because prescription does not run against titles
registered under Article 496.
Held:
The petitioners are in error in believing that like express trusts, such constructive
trusts may notbe barred by lapse of time. The American law on trusts has always
maintained a distinction between express trusts created by intention of parties, and
the implied/constructive trusts that are exclusively created by law, the later not
being trusts in their technical sense.
The express trusts disable the trustee from acquiring for his own benefit the
property committed to his management or custody, at least while he does not
openly repudiate the trust, and makes such repudiation known to the beneficiary or
cestui que trust. Also, in express trusts, the delay of the beneficiary is directly
attributable to the trustee who undertakes to hold the property for the former, or
who is linked to the beneficiary by confidential or fiduciary relations. The trustees
possession is, therefore, not adverse to the beneficiary, until and unless the latter is
made aware that the trust has been repudiated. But in constructive trusts, there is
neither promise nor fiduciary relation. The so-called trustee does not recognize any
trust and has no intent to hold for the beneficiary; therefore, the latter is not
justified in delaying action to recover his property. It is his fault if he delays; hence,
he may be estopped by his own laches. Thus, the judgment of dismissal (of the CFI)
should be upheld, because the petitioners cause of action to attack the deed and
cancel the transfer certificates of title issued to the respondents accrued from the

year of issuance and recording, 1937, and the petitioners have allowed 15 years to
elapse before taking remedial action in 1952. Under the old Code of Civil Procedure,
in force at the time, the longest period of extinctive prescription was only 10years.

Tong v Go Tiat Kun

The Facts:

Sometime in 1957, Juan (Tong) had a meeting with his children to inform them that
he intend to purchase Lot 998 from the heirs of Jose Asencio, to be used in the
familys lumber business. Since he and the other children were Chinese citizens,
and only Luis Sr. is the Filipino citizen among his sons, the title to the property will
be registered in the name of Luis Sr. Juan eventually bought the property in May,
1957, and TCT No. 10346 was issued in the name of Luis Sr. In 1978, Juan Tong
Lumber was incorporated and became known as Juan Tong Lumber, Inc. The
spouses Juan Tong and Sy Un both died intestate in 1984 and 1990, respectively. In
the meantime, Luis Sr., died in 1981, hence his surviving heirs, the respondents
herein, executed a Deed of Extra-Judicial Settlement of Estate of Luis Sr., alleging
that it was him who bought Lot 998. The court approved the same, thus TCT No.
10346 was cancelled and TCT No. T-60231 issued in the name of respondents. They
then subdivided Lot 998 in 1992, and two new TCTs were issued, TCT No. T-96216
for Lot 998-B in the name of Luis Jr., and TCT No. 97068 over Lot 998-A in the name
of Go Tiat Kun and her children. Lot 998-B was sold to Fine Rock Development
Corporation (FRDC) which then sold it to Visayas Goodwill Credit Corporation
(VGCC). It was only when they received a letter from VGCC that the petitioners in
this case, the nine other surviving children of the spouses Juan Tong and Sy UN,
became aware of the transfers, hence they filed a civil case for annulment of titles,
reconveyance and damages against Luis Jr., FRDC and VGCC, which reached the
Supreme Court, ruling in favour of the heirs. TCT No. T-14839 was thus issued in
favour of the heirs and Luis Sr.

As regards Lot 998-A, Go Tiat Kun executed a Sale of Undivided Interest over the
same in favour of her children, Leon, Mary, Lilia, Tomas and the late Jaime. TCT No.
T-134082 was issued over Lot 998-A. The other heirs of the spouses then filed a
case for Nullification of Titles, Deeds of Extra-Judicial Settlement and Damages
against Go Tiat Kun and her children, claiming ownership of Lot 998-A. Ruling that
an implied resulting trust was created in favour of Juan Tong, Luis Sr., the heirs and
the respondents over Lot 998, and Luis Sr was a mere trustee, not the owner
thereof. Thus beneficial ownership was retained by Juan Tong, and subsequently
Juan Tong Lumber, Inc. As such Luis Sr. and his predecessors in interest cannot

appropriate unto themselves much less convey to third persons the property, hence
any documents executed by them adjudicating unto themselves or conveying to
third persons ownership of Lot 998-A are invalid. Since the petitioners were
deprived of their ownership surreptitiously, the are entitled to reconveyance.

On appeal to the CA, however, the latter reversed the RTC decision. It ruled that an
express trust was created in favour of Luis Sr., because there was a direct and
positive act by Juan Tong Sr., to create the trust. The trust being an immovable
property, it may not be proved by oral or parol evidence, but must be proved in
some writing or deed. Even assuming that an implied resulting trust was created,
the petitioners are barred by prescription since it was dissolved upon Luis Sr.s
death, which then became converted into a constructive trust, an action for
reconveyance of which prescribe in ten years. Further, the CA ruled that there is a
presumption of donation in this case pursuant to Article 1448 of the Civil Code that
if the person to whom the title is conveyed is a child, legitimate or illegitimate, of
the one paying the price of the sale, no trust is implied by law, it being disputably
presumed that there is a gift in favor of the child.

Aggrieved, the petitioners elevated the case to the Supreme Court.

The Issues:

1) Was there an implied resulting trust constituted over Lot 998 when Juan Tong
purchased the property and registered it in the name of Luis, Sr.?

(2) May parol evidence be used as proof of the establishment of the trust?

(3) Were the petitioners action barred by prescription, estoppel and laches?

The Courts ruling:

The petition is impressed with merit.

As a general rule, in petitions for review under Rule 45 of the Rules of Court, the
jurisdiction of this Court in cases brought before it from the CA is limited to the
review and revision of errors of law allegedly committed by the appellate court. The
question of the existence of an implied trust is factual, hence, ordinarily outside the
purview of Rule 45. Nevertheless, the Courts review is justified by the need to make
a definitive finding on this factual issue in light of the conflicting rulings rendered by
the courts below.1

At the outset, it is worthy to note that the issues posited in this case are not novel
because in Civil Case No. 22730 involving Lot 998-B which forms part of Lot 998, the
trial court already found that said lot was held in trust by Luis Sr. in favor of his
siblings by virtue of an implied resulting trust. The trial courts decision was then
affirmed by the CA in CA-G.R. CV No. 56602, and this Court in G.R. No. 156068.
Thus, Lot 998-A, the subject of this instant case, and Lot 998-B, are similarly
situated as they comprise the subdivided Lot 998, the property which in its entirety
was held in trust by Luis Sr. in favor of his siblings.

A review of the records shows an intention to create a trust between the parties.
Although Lot 998 was titled in the name of Luis, Sr., the circumstances surrounding
the acquisition of the subject property eloquently speak of the intent that the
equitable or beneficial ownership of the property should belong to the Juan Tong
family.

First, Juan Tong had the financial means to purchase the property for P55,000.00. On
the other hand, respondents failed to present a single witness to corroborate their
claim that Luis, Sr. bought the property with his own money since at that time, Luis
Sr., was merely working for his father where he received a monthly salary of
P200.00 with free board and lodging.

Second, the possession of Lot 998 had always been with the petitioners. The
property was physically possessed by Juan Tong and was used as stockyard for their
lumber business before it was acquired, and even after it was acquired. In fact, the
lot remains to be the stockyard of the family lumber business until this very day.

Third, from the time it was registered in the name of Luis, Sr. in 1957, Lot 998
remained undivided and untouched by the respondents. It was only after the death
of Luis, Sr. that the respondents claimed ownership over Lot 998 and subdivided it
into two lots, Lot 998-A and Lot 998-B.

Fourth, respondent Leon admitted that up to the time of his fathers death, (1) Lot
998 is in the possession of the petitioners, (2) they resided in the tenement in the
front part of Juan Tongs compound, (3) Luis Sr. never sent any letter or
communication to the petitioners claiming ownership of Lot 998, and (4) he and his
mother have a residence at Ledesco Village, La Paz, Iloilo City while his brother and
sisters also have their own residences.

Fifth, the real property taxes on Lot 998 were paid not by Luis Sr. but by his father
Juan Tong and the Juan Tong Lumber, Inc., from 1966 up to early 2008 as evidenced
by the following: a) the letter of assessment sent by the City Treasurer of Iloilo,
naming Juan Tong as the owner of Lot 998; and b) the receipts of real property taxes
paid by Juan Tong Lumber, and later by Juan Tong Lumber, Inc., from 1997 to 2008.
While some of the tax receipts were in the name of Luis Sr., the fact that the
petitioners were in possession of the originals thereof established that the
petitioners, the Juan Tong Lumber, Inc., or the late Juan Tong paid for the taxes. The
respondents did not try to explain the petitioners possession of the realty property
tax receipts in the name of Luis Sr.

The appellate courts conclusion that an express trust was created because there
was a direct and positive act by Juan Tong to create a trust must inevitably yield to
the clear and positive evidence on record which showed that what was truly created
was an implied resulting trust. As what has been fully established, in view of the
mutual trust and confidence existing between said parties who are family members,
the only reason why Lot 998 was registered in the name of Luis, Sr. was to facilitate
the purchase of the said property to be used in the familys lumber business since
Luis, Sr. is the only Filipino Citizen in the Juan Tong family at that time. As the
registered owner of Lot 998, it is only natural that tax declarations and the
corresponding tax payment receipts be in the name of Luis, Sr. so as to effect
payment thereof.

The principle of a resulting trust is based on the equitable doctrine that valuable
consideration and not legal title determines the equitable title or interest and are
presumed always to have been contemplated by the parties. They arise from the

nature or circumstances of the consideration involved in a transaction whereby one

person thereby becomes invested with legal title but is obligated in equity to hold
his legal title for the benefit of another. On the other hand, a constructive trust,
unlike an express trust, does not emanate from, or generate a fiduciary relation.
Constructive trusts are created by the construction of equity in order to satisfy the
demands of justice and prevent unjust enrichment. They arise contrary to intention
against one who, by fraud, duress or abuse of confidence, obtains or holds the legal
right to property which he ought not, in equity and good conscience, to hold.2

Guided by the foregoing definitions, the Court is in conformity with the finding of the
trial court that an implied resulting trust was created as provided under the first
sentence of Article 14483 which is sometimes referred to as a purchase money
resulting trust, the elements of which are: (a) an actual payment of money, property
or services, or an equivalent, constituting valuable consideration; and (b) such
consideration must be furnished by the alleged beneficiary of a resulting trust.4
Here, the petitioners have shown that the two elements are present in the instant
case. Luis, Sr. was merely a trustee of Juan Tong and the petitioners in relation to
the subject property, and it was Juan Tong who provided the money for the purchase
of Lot 998 but the corresponding transfer certificate of title was placed in the name
of Luis, Sr.

The principle that a trustee who puts a certificate of registration in his name cannot
repudiate the trust by relying on the registration is one of the well-known limitations
upon a title. A trust, which derives its strength from the confidence one reposes on
another especially between families, does not lose that character simply because of
what appears in a legal document.5

Contrary to the claim of the respondents, it is not error for the trial court to rely on
parol evidence, i.e., the oral testimonies of witnesses Simeon Juan Tong and Jose
Juan Tong, to arrive at the conclusion that an implied resulting trust exists. What is
crucial is the intention to create a trust. Intentionalthough only presumed,
implied or supposed by law from the nature of the transaction or from the facts and
circumstances accompanying the transaction, particularly the source of the
considerationis always an element of a resulting trust and may be inferred from
the acts or conduct of the parties rather than from direct expression of conduct.
Certainly, intent as an indispensable element is a matter that necessarily lies in the
evidence, that is, by evidence, even circumstantial, of statements made by the
parties at or before the time title passes. Because an implied trust is neither
dependent upon an express agreement nor required to be evidenced by writing,
Article 1457 of our Civil Code authorizes the admission of parol evidence to prove

their existence. Parol evidence that is required to establish the existence of an

implied trust necessarily has to be trustworthy and it cannot rest on loose,
equivocal or indefinite declarations.6

Lastly, the respondents assertion that the petitioners action is barred by

prescription, laches and estoppel is erroneous.

As a rule, implied resulting trusts do not prescribe except when the trustee
repudiates the trust. Further, the action to reconvey does not prescribe so long as
the property stands in the name of the trustee7. To allow prescription would be
tantamount to allowing a trustee to acquire title against his principal and true
owner. It should be noted that the title of Lot 998 was still registered in the name of
Luis Sr. even when he predeceased Juan Tong. Considering that the implied trust has
been repudiated through such death, Lot 998 cannot be included in his estate
except only insofar as his undivided share thereof is concerned. It is well-settled
that title to property does not vest ownership but it is a mere proof that such
property has been registered. And, the fact that the petitioners are in possession of
all the tax receipts and tax declarations of Lot 998 all the more amplify their claim
of ownership over Lot 998-A. Although these tax declarations or realty tax payments
of property are not conclusive evidence of ownership, nevertheless, they are good
indicia of possession in the concept of owner, for no one in his right mind would be
paying taxes for a property that is not in his actual or at least constructive
possession. Such realty tax payments constitute proof that the holder has a claim of
title over the property8. Therefore, the action for reconveyance of Lot 998-A, which
forms part of Lot 998, is imprescriptible and the petitioners are not estopped from
claiming ownership thereof.

Moreso, when the petitioners received a letter from VGCC, and discovered about the
breach of the trust agreement committed by the heirs of Luis, Sr., they immediately
instituted an action to protect their rights, as well as upon learning that respondent
Go Tiat Kun executed a Deed of Sale of Undivided Interest over Lot 998-A in favor of
her children. Clearly, no delay may be attributed to them. The doctrine of laches is
not strictly applied between near relatives, and the fact that the parties are
connected by ties of blood or marriage tends to excuse an otherwise unreasonable
delay.

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

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

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

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

SO ORDERED.