Digests on Express and Implied Trusts (Focusing on Laches+Prescription)

Zyra Cuevas
That In All Things, God May Be Glorified! Gerona vs. De Guzman In 1958, petitioners all surnamed Gerona, alleged that Petitioners' contention is untenable. Although, as a they are the legitimate children of Domingo Gerona and general rule, an action for partition among co-heirs does Placida de Guzman; that the latter, who already passed not prescribe, this is true only as long as the defendants away, was a daughter of Marcelo de Guzman and his first do not hold the property in question under an adverse wife. Marcelo remarried and fathered the respondents. title. The statute of limitations operates as in other cases, from the moment such adverse title is asserted by the After Marcelo died in 1945, respondents allegedly possessor of the property executed a deed of "extra-judicial settlement of his estate, fraudulently misrepresenting therein that they An action for reconveyance of real property based upon a were the only surviving heirs of Marcelo although they constructive or implied trust, resulting from fraud, may be well knew that petitioners were, also, his forced heirs. barred by the statute of limitations. Inasmuch as Respondents then caused to be issued in their name the petitioners seek to annul the aforementioned deed of TCTs to seven parcels of land owned by their father. "extra-judicial settlement" upon the ground of fraud in the execution thereof, the action therefor may be filed within Petitioners only discovered this fact only the year before four (4) years from the discovery of the fraud. the institution of the case (1958). They then demanded their share in the properties but the respondents refused Such discovery is deemed to have taken place, in the to heed this. Petitioners demanded the nullification of the case at bar, on June 25, 1948, when said instrument was deed insofar as it deprived them of their shares, as well filed with the Register of Deeds and new certificates of as the reconveyance of their share. title were issued in the name of respondents exclusively, for the registration of the deed of extra-judicial settlement Respondents maintained among others that the constitute constructive notice to the whole world petitioners' action is barred by the statute of limitations. The court held that the petitioners action has already Thus, the petitioners only had four years from June 25, prescribed, and dismissed the complaint. 1948 to commence the action for reconveyance. Since the action was commenced only on Noveember 4, 1958, or 10 Petitioners maintain that the present action for partition years thereafter, their right to bring action already of the latter's estate is not subject to the statute of prescribed. limitations of action; that, if affected by said statute, the period of four years therein prescribed did not begin to It is noted that the petitioners were not of age yet in run until actual discovery of the fraud perpetrated by 1948, their right to commence the action arises after the respondents, which, it is claimed, took place in 1956 or removal of their legal disability. Still, they were not able to 1957; and that accordingly, said period had not expired file the action within the four years after they reached the when the present action was commenced in 1958. legal age. Ramos et al vs. Ramos et al There is a rule that a trustee cannot acquire by prescription the ownership of property entrusted to him, or that an action to compel a trustee to convey property registered in his name in trust for the benefit of the cestui qui trust does not prescribe, or that the defense of prescription cannot be set up in an action to recover property held by a person in trust for the benefit of another, or that property held in trust A a special proceeding was instituted in 1914 can be recovered by the beneficiary regardless of the lapse of time. for the settlement of the intestate estate of the said spouses. A brother of Martin, was That rule applies squarely to express trusts. The basis of the rule is appointed administrator. The natural children that the possession of a trustee is not adverse. Not being adverse, he were assumed to have received their shares does not acquire by prescription the property held in trust. from the administrator although according to the object of partition, the legitimate children The rule of imprescriptibility of the action to recover property held in were supposed to pay the cash adjudications trust may possibly apply to resulting trusts as long as the trustee has to each of them. not repudiated the trust The spouses Martin Ramos and Candida Tanate were survived by their three legitimate children named Jose, Agustin and Granada. Martin Ramos was also survived by his seven natural children, the plaintiffs. The estate was administered by Martin for more than six years, after which this was turned over to Jose (Hacienda Calaza) and Augustin (Hacienda Ylaya). One of the plaintiffs was informed by the Cadastral Court before the survey of these properties. Jose was informed of this, giving him free hand to do something as an administrator'. They Acquisitive prescription may bar the action of the beneficiary against the trustee in an express trust for the recovery of the property held in trust where (a) the trustee has performed unequivocal acts of repudiation amounting to an ouster of the cestui qui trust; (b) such positive acts of repudiation have been made known to the cestui qui trust and(c) the evidence thereon is clear and conclusive. With respect to constructive trusts, the rule is different. Prescription may supervene in an implied trust. And whether the trust is resulting or constructive, its enforcement may be barred by laches.

Digests on Express and Implied Trusts (Focusing on Laches+Prescription)

Zyra Cuevas
therefore did not intervene in the said cadastral proceedings because they were promised that Jose would be the one responsible to have it registered in the names of the heirs'. Plaintiffs were assured by Jose. Plaintiffs did not know that intestate proceedings were instituted for the distribution of the estate of their father, so they were not able to intervene. They only discovered later on that the property administered by Jose had a Torrens Title in the name of his widow, in 1957. Plaintiffs then sought for reconveyance of the said parcels of land. Their action is predicated on the theory that plaintiffs' shares were held in trust by the defendants. No deed of trust was alleged and proven. The defendants denied the existence of a trust. They pleaded that the action had already prescribed. The complaint was dismissed. In 1909, Pablo Fabian bought from the Philippine Government lot 164 of the Friar Lands Estate. He was survived by four children, namely, Esperanza, Benita I, Benita II, and Silbina. In 1928 Silbina and Teodora, niece of the deceased executed an affidavit which assigned the sale certificate of the lot to them. The vendees forthwith in 1929 took physical possession thereof, and in the same year, declared the lot in their names for taxation purposes under tax declaration. In 1960 the plaintiffs filed the present action for reconveyance against the Silbina and Teodora averring that the affidavit was fraudulent, knowing that there were other heirs, Silbinas sisters. Defendants claimed that Pablo was not the owner of the lot at the time of his death because he had not paid in full the amortizations on the lot. They contended likewise that the action has already prescribed. The court held that defendants had acquired a valid and complete title to the property by acquisitive prescription, and accordingly dismissed the complaint. The plaintiffs did not prove any express trust in this case. The expediente of the intestate proceeding, negatives the existence of an express trust. Those public documents prove that the estate of Martin Ramos was settled in that proceeding and that adjudications were made to his seven natural children. 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. An express trust cannot be proven by parol evidence. Neither have the plaintiffs specified the kind of implied trust contemplated in their action. We have stated that whether it is a resulting or constructive trust, its enforcement may be barred by laches. In the cadastral proceedings, which supervened after the closure of the intestate proceeding, the lots were claimed by Jose and his wife to the exclusion of the plaintiffs. These lots were then leased by Joses widow. This shows that Joses heirs had repudiated any trust which was supposedly constituted over Hacienda Calaza in favor of the plaintiffs. The Statute of Limitations applies in the case at bar. The instan action was filed only in 1957, or more than forty years after it accrued. The delay is inexcusable.

Fabian vs. Fabian The rule in constructive 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. The appellees did not conceal the facts giving rise to the trust, since they had been in open possession of the land since 1928. Granting that there was concealment, the actual transfer of the lot was effected in 1928. It was only in, 1960, or 32 big years later, that the appellants for the first time came forward with their claim to the land. Therefore, laches have already set in. Also a general rule, an action for partition among co-heirs does not prescribe if the defendants do not hold the property under an adverse title. An action for reconveyance of real property based upon a constructive or implied trust, resulting from fraud, may be barred by the statute of limitations. This may be filed within four years from the discovery of the fraud. The discovery is deemed to have taken place when new certificates of title were issued exclusively in the names of the respondents therein. Such discovery is deemed to have taken place, in the case at bar, in 1948 when said instrument was filed with the Register of Deeds and new certificates of title in the name of the respondents exclusively, for the registration of the deed of extra-judicial settlement constitutes constructive notice to the whole world. In the case at bar, not only had laches set in when the appellants instituted their action for, reconveyance in 1960, but as well their right to enforce the constructive trust had already prescribed. It logically follows from the above disquisition that acquisitive prescription has likewise operated to vest absolute title in the appellees. Gonzalez vs. IAC When Fausto Soy, recognized the proprietary rights of plaintiffsappellants as co-owners, the land was impressed with a trust relationship in favor of his sisters. When he sold a portion to

In 1965, private respondents, instituted a complaint for partition against their brother, Fausto Soy. They allow that they had a pro-

Digests on Express and Implied Trusts (Focusing on Laches+Prescription)

Zyra Cuevas
indiviso share in a parcel of residential land. As a consequence of the filing of the complaint, a notice of lis pendens was annotated on the same day on the TCT. Fausto Soy countered that the land in question was never registered in the names of his parents, that he had been the registered owner of the premises since 1932 in consequence of which an OCT was issued in his favor. The court held that both parties were coowners of the lot. The parties were enjoined to make the project of partition among themselves and to submit the same to the lower court for confirmation. If they could not agree, then the court would appoint commissioners who would undertake the partition on behalf of the co-owners. On execution, the sheriff was unable to effect the apportionment of the property due to the filing by petitioners Gonzalez of their third party claim stating that they were the registered owners of a portion of the lot. They alleged that at the time the instant case was commenced, they were already the registered owners of the said portion, pursuant to deeds of sale executed at an earlier date by the late Fausto Soy. They added that despite of this, the plaintiffs deliberately concealed the suit from them by not including them as indispensable parties. intervenors, the relationship of trust included said intervenors. Upon his death, the trust relationship subsisted between Fausto's heirs and his living sisters or the latters' children, as well as the Intervenorsappellees. . . .In other words, the sales in favor of Gonzalez did not terminate the trust relationship between appellants and appellees. Fausto, the predecessor-in-interest of petitioners, had appeared to be the registered owner of the lot for more than thirty years, his title had become indefeasible and his dominical rights over it could no longer be challenged. Any insinuation as to the existence of an implied constructive trust should not be allowed. The trust alluded to in this case is a constructive trust arising by operation of law. It is not a trust in the technical sense. Even assuming that there was an implied trust, private respondents' attempt at reconveyance was clearly barred by prescription. It is well-settled that an action for reconveyance of real property to enforce an implied trust prescribes in ten years, the period reckoned from the issuance of the adverse title to the property which operates as a constructive notice. In the case at bar, that assertion of adverse title, which was an explicit indication of repudiation of the trust for the purpose of the statute of limitations, took place when OCT was issued in the name of Fausto Soy in 1932, to the exclusion of his three sisters. But even if there were no repudiation, he nonetheless recognized the co-ownership between him and his sisters the rule in this jurisdiction is that an action to enforce an implied trust may be circumscribed not only by prescription but also by laches, in which case repudiation is not even required. From 1932 to 1965, or a period of thirty-three years, private respondents had literally slept on their rights, presuming they had any. They can no longer dispute the conclusive and incontrovertible character of Fausto Soy's title as they are deemed, by their unreasonably long inaction, to have acquiesced therein. Moreover, the law protects those who are vigilant of their rights.

The court dismissed the case. The private respondents appealed, in which the IAC ruled in their favor, stating that the sale to Gonzalez by by Fausto Soy did not terminate the trust relationship between the appellants and the appellees. Salao vs. Salao (Malabo. Haha! Inaantok na ako, ano ba. Huhu!) The spouses Manuel and Valentina Salao had four Now in the partition of Valentina Ignacio's estate, Valentin children named Patricio, Alejandra, Juan and was obligated to pay P3,355.25 to Ambrosia Salao. If, Ambrosia. Ambrosia administered the two fishponds and was the custodian of its earnings, then it could have been easily Manuels death preceded Valentinas, whose estate stipulated in the deed partitioning Valentina Ignacio's estate was partitioned extrajudicially in a deed dated that the amount due from Valentin would just be deducted December 29, 1918 . All of the heirs were adjudicated by Ambrosia from his share of the earnings of the two a distributive share. One of the heirs, Valentin was fishponds. There was no such stipulation. given a fishpond. Since this exceeded the value of his distributive share, he was required to give a specific The plaintiffs utterly failed to measure up to the yardstick sum to his co-heirs. that a trust must be proven by clear, satisfactory and convincing evidence. It cannot rest on vague and uncertain However, it was found out that prior to Valentinas evidence or on loose, equivocal or indefinite declarations. death, Juan and Ambrosia had secured a Torrens title in their names over the fishpond. They excercised There was no resulting trust in this case because there never dominical rights over it to the exclusion of their was any intention on the part of Juan Y. Salao, Sr., nephew, Valentin. Ambrosia Salao and Valentin Salao to create any trust. There ..... was no constructive trust because the registration of the two The trial court surmised that the co-ownership which fishponds in the names of Juan and Ambrosia was not existed from 1914 to 1918 misled the plaintiffs and vitiated by fraud or mistake. This is not a case where to their witnesses and caused them to believe satisfy the demands of justice it is necessary to consider the erroneously that there was a co-ownership in 1905 or Calunuran fishpond " being held in trust by the heirs of Juan

Digests on Express and Implied Trusts (Focusing on Laches+Prescription)

Zyra Cuevas
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. 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. 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.