Morales vs.

CA, Ortiz spouses

Facts: Celso Avelino, the defendants’ predecessor-in-interest, acquired a land consisting of
two adjoining parcels in Calbayog City, Samar where he built a two-story residential house.
While he was staying and working in Cebu as an CFI Judge, his nephew Rodolfo Morales
constructed a small beauty shop in the premises in question.
The defendant spouses, as the purchasers of other Celso’s real properties, purchased the
properties in question with Rodolfo’s knowledge who promised to vacate said premises as
soon as his uncle will notify him. However, Rodolfo refused to do so despite due notice
from his uncle unless he is reimbursed for it. Moreover, he occupied the dilapidated
residential building taking in paying boarders and claiming already ownership of the same.
Defendant spouses assert their claim of absolute ownership of the disputed properties
duly supported by documentary evidence. Petitioners, however, contend the following:
that Celso purchased the house and lot in question as a mere trustee, under an implied
trust, for the benefit of the trustor, his father Rosendo Avelino and his heirs; they are the
rightful co-owners and possessors of the house and lot in their capacities as heirs of
Rosendo Avelino, the true owner of those properties.
Issue: Whether or not the property Celso acquired is a trust property
Ruling: No. A trust is the legal relationship between one person having an equitable
ownership in property and another person owning the legal title to such property, the
equitable ownership of the former entitling him to the performance of certain duties and
the exercise of certain powers by the latter.
The characteristics of a trust are:
1.  It is a relationship;
2.  it is a relationship of fiduciary character;
3.  it is a relationship with respect to property, not one involving merely personal duties;
4.  it involves the existence of equitable duties imposed upon the holder of the title to the
property to deal with it for the benefit of another; and
5.  it arises as a result of a manifestation of intention to create the relationship.
Trusts are either express or implied. Express trusts are created by the intention of the
trustor or of the parties, while implied trusts come into being by operation of law, either
through implication of an intention to create a trust as a matter of law or through the
imposition of the trust irrespective of, and even contrary to, any such intention. In turn,
implied trusts are either resulting or constructive trusts. Resulting trusts are 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, 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.
A resulting trust is exemplified by Article 1448 of the Civil Code, which reads:
Art. 1448.      There is an implied trust when property is sold, and the legal estate is granted
to one party but the price is paid by another for the purpose of having the beneficial
interest of the property. The former is the trustee, while the latter is the beneficiary.
However, if the person to whom the title is conveyed is a child, legitimate or illegitimate,
of the one paying the price of the sale, no trust is implied by law, it being disputably
presumed that there is a gift in favor of the child.
In the instant case, petitioners’ theory is that Rosendo Avelino owned the money for the
purchase of the property and he requested Celso, his son, to buy the property allegedly in
trust for the former. The fact remains, however, that title to the property was conveyed to
Celso. Accordingly, the situation is governed by or falls within the exception under the
third sentence of Article 1448, which for convenience we quote:
  ... However, if the person to whom the title is conveyed is a child, legitimate or
illegitimate, of the one paying the price of the sale, no trust is implied by law, it being
disputably presumed that there is a gift in favor of the child.
On this basis alone, the case for petitioners must fall. The preponderance of evidence, as
found by the trial court and affirmed by the Court of Appeals, established positive acts of
Celso Avelino indicating, without doubt, that he considered the property he purchased
from the Mendiolas as his exclusive property. He had its tax declaration transferred in his
name, caused the property surveyed for him by the Bureau of Lands, and faithfully paid
the realty taxes. Finally, he sold the property to private respondents.
Viloria vs.CA, Aquino
Facts: Siblings Nicolasa, Rosaida and Ruperto were co-owners of a commercial lot which is
the property in question.
Nicolasa and Rosaida died single and were survived by Ruperto, the petitioner, along with
their other siblings, and their heirs, the defendants herein. The heirs demanded from
Ruperto, who was in possession of the said property, to partition the same among them.
He refused claiming that during their lifetime, Nicolasa and Rosaida sold to him all their
shares, interests and participation over the property in question. He claimed that Nicolasa
and Rosaida sold the commercial lot to him by virtue of a deed of sale executed in 1965
and duly registered in the Office of Registry of Deeds.
The heirs maintained that the transfer of title of the commercial lot in the name of
Ruperto Viloria was only for loan purposes and not to convey and relinquish ownership
over the property, and that Ruperto assured Nicolasa and Rosaida that they would remain
as co-owners and the deed of sale returned to them. As proof of this arrangement, the
heirs asserted that Nicolasa and Rosaida exercised acts of administration and dominion
over the property and collected rentals from the buildings standing thereon for 25 years or
until they died.
Issue: WON the 1965 DoS of the commercial lot was an express trust and not a true
conveyance of real property
Ruling: Yes. Said lot was not in reality transferred to the petitioner because the parties to
the Deed of Sale merely intended to create an express trust. Thus, petitioner became only
a trustee to an express trust which incapacitated him from acquiring for his own benefit
the property committed to his custody. Nicolasa and Rosaida remained as co-owners of
the commercial lot, which upon their death passed on to their heirs.
The parties in the instant case freely gave their consent to the 1965 deed of sale but
intended it to be merely a trust agreement and not a relinquishment of rights. It is
therefore the nature of the contract that is in issue and not the character of the consent
given.
The Court finds that the 1965 deed of sale was in fact an express trust and hence no actual
conveyance took place. The owners Nicolasa and Rosaida did not relinquish their claim of
ownership over the commercial lot but continued to exercise acts of administration and
dominion over it, hence, it continued to form part of their estate and devolved upon their
death on their heirs.
De Esconde v. CA
Facts: Petitioner Catalina Buan vda. de Esconde, as mother and legal guardian of her
children, appears to have favored her elder son, private respondent, in allowing that he be
given Lot No. 1700 in its entirety in the extrajudicial partition of the Esconde estate to the
prejudice of her other children. Although it does not appear on record whether Catalina
intentionally granted private respondent that privileged bestowal, the fact is that, said lot
was registered in private respondent’s name. After the TCT No. 394 was handed to him by
his mother, private respondent exercised exclusive rights of ownership therein to the
extent of even mortgaging the lot when he needed money. If, as petitioners insist, a
mistake was committed in allotting Lot No. 1700 to private respondent, then a trust
relationship was created between them and private respondent. However, private
respondent never considered himself a trustee. If he allowed his brother Benjamin to
construct or make improvements thereon, it appears to have been out of tolerance to a
brother. Consequently, if indeed, by mistake, private respondent was given the entirety of
Lot No. 1700, the trust relationship between him and petitioners was a constructive, not
resulting, implied trust. Petitioners, therefore, correctly questioned private respondents
exercise of absolute ownership over the property. Unfortunately, however, petitioners
assailed it long after their right to do so had prescribed.
Issue:
Ruling: The rule that a trustee cannot acquire by prescription ownership over property
entrusted to him until and unless he repudiates the trust, applies to express trusts and
resulting implied trusts. However, in constructive implied trusts, prescription may
supervene even if the trustee does not repudiate the relationship. Necessarily, repudiation
of the said trust is not a condition precedent to the running of the prescriptive period.
Since the action for the annulment of private respondent’s title to Lot No. 1700 accrued
during the effectivity of Act No. 190, Section 40 of Chapter III thereof applies. x x x Thus, in
Heirs of Jose Olviga v. Court of Appeals, (G.R. No. 104813, October 21, 1993, 227 SCRA
330, 334-335) the Court ruled that the ten-year prescriptive period for an action for
reconveyance of real property based on implied or constructive trust which is counted
from the date of registration of the property, applies when the plaintiff is not in possession
of the contested property. In this case, private respondent, not petitioners who instituted
the action, is in actual possession of Lot No. 1700. Having filed their action only on June 29,
1987, petitioners’ action has been barred by prescription.
Cuenco v. Manguera
Facts: While actively practicing law in Manila, Mariano Cuenco entrusted his lot to his
brother Miguel, the petitioner herein. In 1938, petitioner was able to obtain in his own
name a title therefor. He obligated himself to hold the title in trust for Mariano’s six
children, among them was Concepcion, the youngest and respondent herein.
In 1947, the Cuenco family was anticipating Mariano’s second marriage and so they
partitioned the said lot into 6 sub-lots for the six children, to which Miguel did not object.
He executed 5 Deeds of Donations in favor of the first 5 children, leaving out the sub-lot
903-A-6, the property in question, for Concepcion. Petitioner occupied and fenced a
portion of said lot for taxation purposes. Respondent also paid taxes thereon.
In 1964, Mariano died. Later in 1966, Miguel petitioned the Register of Deeds to transfer
the subject lot to his name on the ground that the same is a portion of Lot 903-A. In 1967,
respondent requested the Register of Deeds to annotate an affidavit of adverse claim
against petitioner. Register of Deeds issued a TCT covering the disputed lot in the name of
the petitioner but carrying the earlier annotation of adverse claim. In 1969, petitioner tore
down the wire fence which the respondent constructed on the disputed lot which
compelled the latter to institute complaint in 1970.
Petitioner asserted that he was the absolute owner of 903-A and that he donated 5 of the
6 portions of said lot to the first 5 children of his brother out of gratitude and care they
exhibited to him during the time of his long sickness as Concepcion did not show care to
him and his family in their long period of sorrow.
Issue: WON a constructive or implied trust exists between the parties
Ruling: Yes. A trust is a legal relationship between one having an equitable ownership in a
property and another having legal title to it.
Trust relations between parties may either be express or implied. Implied trusts are those
that, “without being express, are deducible from the nature of the transaction as matters
of intent or which are superinduced on the transaction by operation of law as a matter of
equity, independently of the particular intention of the parties. Implied trusts may either
be resulting or constructive trusts, both coming into being by operation of law.
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.”
Although Lot 903-A was titled in Miguel’s name, the circumstances surrounding the
acquisition and the subsequent partial dispositions of this property eloquently speak of the
intent that the equitable or beneficial ownership of the property should belong to Mariano
and his heirs.
Lot 903-A was one half of the one-hectare portion of Lot 903 given as attorney’s fees by a
client of the law firm of Partners Miguel and Mariano Cuenco. It constituted the latter’s
share in the attorney’s fees and thus equitably belonged to him, as correctly found by the
CA. That Lot 903-A had been titled in the name of Miguel gave rise to an implied trust
between him and Mariano, specifically, the former holds the property in trust for the
latter. In the present case, it is of no moment that the implied trust arose from the
circumstance -- a share in the attorney’s fees -- that does not categorically fall under
Articles 1448 to 1456 of the Civil Code. The cases of implied trust enumerated therein
“does not exclude others established by the general law of trust.”
Tellingly, Miguel started paying real property taxes on Lot 903-A-6 only on April 4, 1964,
after the death of Mariano. This fact shows that it was only in that year that he was
emboldened to claim the property as his own and to stop recognizing Mariano’s, and
subsequently Concepcion’s, ownership rights over it. It was only by then that the one who
could have easily refuted his claim had already been silenced by death.