Contracts Republic of the Philippines Supreme Court Manila

THIRD DIVISION

ESTATE OF MARGARITA D. CABACUNGAN, represented by LUZ LAIGO ALI, Petitioner,

G.R. N%. &'()'*

!resent:

CARPIO,* J., - versus VELASCO, R!, J!, Chairperson, "RIO#,** MARILOU LAIGO, !EDRO RO" LAIGO, STELLA BALAGOT #nd S!OUSES MARIO B. CAM!OS AND $ULIA S. CAM!OS, PERAL$A, an% SERE#O,*** JJ!

* &esi'nate% as an a%%itional member in lieu of Associate ustice Roberto A! Aba%, per Special Or%er #o! ()*+ %ate% Au'ust (, ,)((! ** &esi'nate% as an a%%itional member in lieu of Associate ustice ose Catral Men%o-a, per Special Or%er #o! ()*. %ate% ul/ ,0, ,)((! *** &esi'nate% as an a%%itional member, per Special Or%er #o! (),1 %ate% une ,(, ,)((!

Respon%ents! !r%+,-.#ted:

Au'ust (*, ,)(( 2333333333333333333333333333333333333333333333333332

DECISION

!ERALTA, J./

$his Petition for Re4ie5 un%er Rule 6* of the Rules of Court assails the October (7, ,)). &ecision(8(9 of the Court of Appeals in CA3:!R! CV #o! 0,70(! $he assaile% %ecision affirme% the ul/ ,, ,))( ;u%'ment ,8,9 ren%ere% b/ the Re'ional $rial Court of La <nion, "ranch 77 in Ci4il Case #o! ()7(3": = a complaint for annulment of sale of real propert/, reco4er/ of o5nership an% possession, cancellation of ta2 %eclarations an% %ama'es file% b/ Mar'arita

(8(9 Penne% b/ Associate ustice apar "! &imaampao, 5ith Associate ustices Marina L! "u-on an% Re'ala%o E! Maambon', concurrin'> rollo, pp! 673*6! ,8,9 Si'ne% b/ u%'e Rose Mar/ R! Molina Alim> id! at (073(1(!

Cabacun'an,7879 represente% b/ her %au'hter, Lu- Lai'o3Ali a'ainst Marilou Lai'o an% Pe%ro Ro/ Lai'o, respon%ents herein, an% a'ainst Estella "ala'ot, 6869 an% the spouses Mario an% ulia Campos!

$he facts follo5!

Mar'arita Cabacun'an ?Mar'arita@ o5ne% three parcels of unre'istere% lan% in Parin'ao an% in "accuit, "auan', La <nion, each measurin' 6,*(, sAuare meters, (,+1. sAuare meters an% 7,6*6 sAuare meters! $he properties 5ere in%i4i%uall/ co4ere% b/ ta2 %eclaration all in her name! *8*9 Sometime in (+.1, Mar'aritaBs son, Roberto Lai'o, r! ?Roberto@, applie% for a non3immi'rant 4isa to the <nite% States, an% to support his application, he alle'e%l/ asCe% Mar'arita to transfer the ta2 %eclarations of the properties in his name! .8.9 Dor sai% purpose, Mar'arita, unCno5n to her other chil%ren, e2ecute% an Affi%a4it of $ransfer of Real Propert/ 5hereb/ the sub;ect properties 5ere transferre% b/ %onation to Roberto!0809 #ot lon' after, RobertoBs 4isa 5as issue% an% he 5as able to tra4el to the <!S! as a tourist an% returne% in %ue time! In (+0+, he a%opte% respon%ents
7879 Petitioner 5as later on substitute% b/ the Estate of Mar'arita &! Cabacun'an, represente% b/ Lu- Lai'o3Ali! 6869 Estella "ala'otBs name 5as %roppe% from the subseAuent plea%in's file% 5ith the trial court! *8*9 $a2 &eclaration #os! (,,76 series of (+*7, 76..1 series of (+.0 an% (*)*, series of (+*7, recor%s, pp! ,(.3,(1! .8.9 0809 Recor%s, p! ,! Id! at ,37, 1 an% ,(*!

Pe%ro Lai'o ?Pe%ro@ an% Marilou Lai'o ?Marilou@, 1819 an% then he marrie% respon%ent Estella "ala'ot!

In ul/ (++), Roberto sol% the 6,*(, sA m propert/ in "accuit to the spouses Mario an% ulia Campos for P,7,)))!))!+8+9 $hen in Au'ust (++,, he sol% the (,+1. sA m an% 7,6*6 sA m lots in Parin'ao, respecti4el/, to Marilou for P()),)))!)) an% to Pe%ro for P6),)))!))!()8()9 Alle'e%l/, these sales 5ere not Cno5n to Mar'arita an% her other chil%ren!((8((9 It 5as onl/ in Au'ust (++*, at RobertoBs 5aCe, that Mar'arita came to Cno5 of the sales as tol% b/ Pe%ro himself! (,8(,9 In Debruar/ (++., Mar'arita, represente% b/ her %au'hter, Lu-, institute% the instant complaint for the annulment of sai% sales an% for the reco4er/ of o5nership an% possession of the sub;ect properties as 5ell as for the cancellation of Ricar%oBs ta2 %eclarations! Mar'arita a%mitte% ha4in' accommo%ate% RobertoBs reAuest for the transfer of the properties to his name, but pointe% out that the arran'ement 5as onl/ for the specific purpose of supportin' his <!S! 4isa application! She emphasi-e% that she ne4er inten%e% to %i4est herself of o5nership o4er the sub;ect lan%s an%, hence, Roberto ha% no ri'ht to sell them to respon%ents an% the Spouses Campos! She liCe5ise alle'e% that the sales, 5hich 5ere fictitious an% simulate% consi%erin' the 'ross ina%eAuac/ of the
1819 +8+9 Id! at ,(+3,,(! See &ee% of Absolute Sale, id! at +!

()8()9 See &ee% of Sale of a Resi%ential Lan%, an% &ee% of Sale of Portions of Lan%, id! at ()3 ((! ((8((9 Recor%s, pp! 736! (,8(,9 Id! at *> $S#, Debruar/ +, ,))), pp! 13+!

stipulate% price, 5ere frau%ulentl/ entere% into b/ Roberto! She impute% ba% faith to Pe%ro, Marilou an% the Spouses Campos as bu/ers of the lots, as the/ suppose%l/ Cne5 all alon' that Roberto 5as not the ri'htful o5ner of the properties!(78(79 Eence, she principall/ pra/e% that the sales be annulle%> that RobertoBs ta2 %eclarations be cancelle%> an% that the sub;ect properties be recon4e/e% to her!(68(69

$he Spouses Campos a%4ance% that the/ 5ere innocent purchasers for 4alue an% in 'oo% faith, an% ha% merel/ relie% on RobertoBs representation that he ha% the ri'ht to sell the propert/> an% that, hence, the/ 5ere not boun% b/ 5hate4er a'reement entere% b/ Mar'arita 5ith her son! $he/ posite% that the alle'e% 'ross ina%eAuac/ of the price 5oul% not in4ali%ate the sale absent a 4itiation of consent or proof of an/ other a'reement! Durther, the/ note% that Mar'aritaBs claim 5as alrea%/ barre% b/ prescription an% laches o5in' to her lon' inaction in reco4erin' the sub;ect properties! Dinall/, the/ belie4e% that inasmuch as Roberto ha% alrea%/ passe% a5a/, Mar'arita must ha4e, instea%, %irecte% her claim a'ainst his estate! (* 8(*9

(78(79 See Compliant, recor%s, pp! ,3*! (68(69 Recor%s, p! .! (*8(*9 Recor%s, p! 77!

In much the same 5a/, Marilou an% Pe%ro,(.8(.9 5ho liCe5ise professe% themsel4es to be bu/ers in 'oo% faith an% for 4alue, belie4e% that Mar'aritaBs cause of action ha% alrea%/ been barre% b/ laches, an% that e4en assumin' the contrar/, the cause of action 5as ne4ertheless barre% b/ prescription as the same ha% accrue% 5a/ bacC in (+.1 upon the e2ecution of the affi%a4it of transfer b/ 4irtue of 5hich an implie% trust ha% been create%! In this re'ar%, the/ emphasi-e% that the la5 allo5e% onl/ a perio% of ten ?()@ /ears 5ithin 5hich an action to reco4er o5nership of real propert/ or to enforce an implie% trust thereon ma/ be brou'ht, but Mar'arita merel/ let it pass!(08(09

On Debruar/ 7, (+++, prior to pre3trial, Mar'arita an% the Spouses Campos amicabl/ entere% into a settlement 5hereb/ the/ 5ai4e% their respecti4e claims a'ainst each other!(18(19 Mar'arita %ie% t5o %a/s later an% 5as forth5ith substitute% b/ her estate!(+8(+9 On Debruar/ 1, (+++, the trial court ren%ere% a Partial &ecision,)8,)9 appro4in' the compromise a'reement an% %ismissin' the complaint a'ainst the Spouses Campos! Dorth5ith, trial on the merits ensue% 5ith respect to Pe%ro an% Marilou!

(.8(.9 $hese respon%ents initiall/ submitte% a Motion to &ismiss, but the trial court %enie% the same in its March (), (++1 Or%er! See recor%s, pp! +(3+1, ((.3((+! (08(09 See Ans5er, recor%s, pp! (,,3(,0! (18(19 Recor%s, p! (07! (+8(+9 Id! at (0+3(1,! ,)8,)9 Id! at (003(01!

On ul/ ,, ,))(, the trial court ren%ere% ;u%'ment %ismissin' the complaint as follo5s:

FEEREDORE, in 4ie5 of the fore'oin' consi%erations, the complaint is &ISMISSE&!,(8,(9

$he trial court rule% that the (+.1 Affi%a4it of $ransfer operate% as a simple transfer of the sub;ect properties from Mar'arita to Roberto! It foun% no e2press trust create% bet5een Roberto an% Mar'arita b/ 4irtue merel/ of the sai% %ocument as there 5as no e4i%ence of another %ocument sho5in' RobertoBs un%ertaCin' to return the sub;ect properties! Interestin'l/, it conclu%e% that, instea%, an Gimplie% or constructi4e trustH 5as create% bet5een the parties, as if affirmin' that there 5as in%ee% an a'reement = albeit un5ritten = to ha4e the properties returne% to Mar'arita in %ue time! ,,8,,9

Moreo4er, the trial court surmise% ho5 Mar'arita coul% ha4e faile% to reco4er the sub;ect properties from Roberto at an/ time bet5een (+.1, follo5in' the e2ecution of the Affi%a4it of $ransfer, an% RobertoBs return from the <nite% States shortl/ thereafter! Din%in' Mar'arita 'uilt/ of laches b/ such inaction, the trial court barre% reco4er/ from respon%ents 5ho 5ere foun% to ha4e acAuire% the properties suppose%l/ in 'oo% faith an% for 4alue! ,78,79 It also pointe% out that
,(8,(9 Id! at ,11! ,,8,,9 Rollo, p! (01! ,78,79 Id! at (01!

reco4er/ coul% no lon'er be pursue% in this case because Mar'arita ha% liCe5ise e2hauste% the ten3/ear prescripti4e perio% for recon4e/ance base% on an implie% trust 5hich ha% commence% to run in (+.1 upon the e2ecution of the Affi%a4it of $ransfer!,68,69 Dinall/, it emphasi-e% that mere ina%eAuac/ of the price as alle'e% 5oul% not be a sufficient 'roun% to annul the sales in fa4or of Pe%ro an% Marilou absent an/ %efect in consent!,*8,*9

A''rie4e%, petitioner appeale% to the Court of Appeals 5hich, on October (7, ,))., affirme% the trial courtBs %isposition! $he appellate court %ismisse% petitionerBs claim that Roberto 5as merel/ a trustee of the sub;ect properties as there 5as no e4i%ence on recor% supporti4e of the alle'ation that Roberto merel/ borro5e% the properties from Mar'arita upon his promise to return the same on his arri4al from the <nite% States! Durther, it h/pothesi-e% that 'rantin' the e2istence of an implie% trust, still Mar'aritaBs action thereun%er ha% alrea%/ been circumscribe% b/ laches! ,.8,.9

Curiousl/, 5hile the appellate court ha% foun% no implie% trust relation in the transaction bet5een Mar'arita an% Roberto, ne4ertheless, it hel% that the ten3 /ear prescripti4e perio% un%er Article ((66 of the Ci4il Co%e, in relation to an implie% trust create% un%er Article (6*., ha% alrea%/ been e2hauste% b/ Mar'arita because her cause of action ha% accrue% 5a/ bacC in (+.1> an% that 5hile laches
,68,69 Id! at (0+! ,*8,*9 Id! at (1(! ,.8,.9 CA rollo, p! ,,7!

an% prescription as %efenses coul% ha4e a4aile% a'ainst Roberto, the same 5oul% be una4ailin' a'ainst Pe%ro an% Marilou because the latter 5ere suppose%l/ bu/ers in 'oo% faith an% for 4alue!,08,09 It %ispose% of the appeal, thus:

FEEREDORE, the Appeal is hereb/ &E#IE&! $he assaile% Decision %ate% , ul/ ,))( of the Re'ional $rial Court of "auan', La <nion, "ranch 77 is ADDIRME&! SO OR&ERE&!,18,19

Eence, the instant recourse imputin' error to the Court of Appeals in hol%in': ?a@ that the complaint is barre% b/ laches an% prescription> ?b@ that the rule on innocent purchaser for 4alue applies in this case of sale of unre'istere% lan%> an% ?c@ that there is no e4i%ence to support the fin%in' that there is an implie% trust create% bet5een Mar'arita an% her son Roberto!,+8,+9

Petitioner posits that the Court of Appeals shoul% not ha4e hapha-ar%l/ applie% the %octrine of laches an% faile% to see that the parties in this case are boun% b/ familial ties! $he/ assert that laches must not be applie% 5hen an in;ustice 5oul% result from it! Petitioner belie4es that the e2istence of such confi%ential relationship preclu%es a fin%in' of unreasonable %ela/ on Mar'aritaBs part in enforcin' her claim, especiall/ in the face of Lu-Bs testimon/ that she an%
,08,09 Id! at ,,63,,*! ,18,19 Id! at ,,.! ,+8,+9 Id! at ,1!

Mar'arita ha% place% trust an% confi%ence in Roberto! Petitioner also refutes the Court of AppealsB fin%in' that there 5as a %onation of the properties to Roberto 5hen the truth is that the sub;ect properties 5ere all that Mar'arita possesse% an% that she coul% not ha4e faile% to pro4i%e for her other chil%ren nor for means b/ 5hich to support herself! It reiterates that the transfer to Roberto 5as onl/ an accommo%ation so that he coul% submit proof to support his <!S! 4isa application!

On the issue of prescription, petitioner a%4ances that it runs from the time Roberto, as trustee, has repu%iate% the trust b/ sellin' the properties to respon%ents in Au'ust (*, (++,> that hence, the filin' of the instant complaint in (++. 5as 5ell 5ithin the prescripti4e perio%! Dinall/, petitioner states that 5hether a bu/er is in 'oo% or ba% faith is a matter that attains rele4ance in sales of re'istere% lan%, as corollar/ to the rule that a purchaser of unre'istere% lan% uninforme% of the sellerBs %efecti4e title acAuires no better ri'ht than such seller!

Respon%ents stan% b/ the rulin' of the Court of Appeals! In their Comment, the/ theori-e that if in%ee% Mar'arita an% Roberto ha% a'ree% to ha4e the sub;ect properties returne% follo5in' the e2ecution of the Affi%a4it of $ransfer, then there shoul% ha4e been a 5ritten a'reement e4incin' such intention of the parties! $he/ note that petitionerBs reliance on the Affi%a4it of $ransfer as 5ell as on the alle'e% un5ritten a'reement for the return of the properties must fail, simpl/ because the/ are not e4en parties to it! "e that as it ma/, the sai% %ocument ha% effecti4el/ transferre% the properties to Roberto 5ho, in turn, ha% acAuire% the full capacit/ to sell them, especiall/ since these properties coul% 5ell be consi%ere% as RobertoBs

inheritance from Mar'arita 5ho, on the contrar/, %i% ha4e other e2istin' properties in her name! Moreo4er, the/ belie4e that the liberal application of the rule on laches bet5een famil/ members %oes not appl/ in the instant case because there is no fi%uciar/ relationship an% pri4it/ bet5een them an% Mar'arita!

$here is merit in the petition!

$o be'in 5ith, the rule is that the latitu%e of ;u%icial re4ie5 un%er Rule 6* 'enerall/ e2clu%es factual an% e4i%entiar/ ree4aluation, an% the Court or%inaril/ abi%es b/ the uniform conclusions of the trial court an% the appellate court! Iet, in the case at bar, 5hile the courts belo5 ha4e both arri4e% at the %ismissal of petitionerBs complaint, there still remains unsettle% the ostensible incon'ruence in their respecti4e factual fin%in's! It thus behoo4es us to be thorou'h both in re4ie5in' the recor%s an% in appraisin' the e4i%ence, especiall/ since an opposite conclusion is 5arrante% an%, as 5ill be sho5n, ;ustifie%!

A trust is the le'al relationship bet5een one person ha4in' an eAuitable o5nership of propert/ an% another person o5nin' the le'al title to such propert/, the eAuitable o5nership of the former entitlin' him to the performance of certain %uties an% the e2ercise of certain po5ers b/ the latter! 7)87)9 $rusts are either

7)87)9 Caezo v. Rojas, :!R! #o! (61011, #o4ember ,7, ,))0, *71 SCRA ,6,, ,*(> Tigno v. Court of Appeals, :!R! #o! (()((*, October 1, (++0, ,1) SCRA ,.,, ,0(3,0,, citin' Morales v. Court of Appeals, ,06 SCRA ,1, ?(++0@!

e2press or implie%!7(87(9 E2press or %irect trusts are create% b/ the %irect an% positi4e acts of the parties, b/ some 5ritin' or %ee%, or 5ill, or b/ oral %eclaration in 5or%s e4incin' an intention to create a trust! 7,87,9 Implie% trusts = also calle% Gtrusts b/ operation of la5,H Gin%irect trustsH an% Gin4oluntar/ trustsH = arise b/ le'al implication base% on the presume% intention of the parties or on eAuitable principles in%epen%ent of the particular intention of the parties! 778779 $he/ are those 5hich, 5ithout bein' e2presse%, are %e%ucible from the nature of the transaction as matters of intent or, in%epen%entl/ of the particular intention of the parties, as bein' inferre% from the transaction b/ operation of la5 basicall/ b/ reason of eAuit/!768769

Implie% trusts are further classifie% into constructi4e trusts an% resultin' trusts! Constructi4e trusts, on the one han%, come about in the main b/ operation of la5 an% not b/ a'reement or intention! $he/ arise not b/ an/ 5or% or phrase, either e2pressl/ or implie%l/, e4incin' a %irect intention to create a trust, but one 5hich arises in or%er to satisf/ the %eman%s of ;ustice! 7*87*9 Also Cno5n as trusts e !aleficio" trusts e delicto an% trusts de son tort" the/ are construe% a'ainst one
7(87(9 Article (66(, Ci4il Co%e of the Philippines states: AR$! (66(! $rusts are either e2press or implie%! E2press trusts are create% b/ the intention of the trustor or of the parties! Implie% trusts come into bein' b/ operation of la5! 7,87,9 Caezo v. Rojas, supra note 7), at ,*(3,*,, citin' #uan $da. de %sconde v. Court of Appeals, 7,7 Phil! 1(, 1+ ?(++.@> Ringor v. Ringor, :!R! #o! (601.7, Au'ust (7, ,))6, 67. SCRA 616, 6+0! 778779 Tigno v. Court of Appeals, supra note 7), at ,0(> 0. Am ur ,%, J(*+, p! (+(, citin' &ifford v. Dennis, 77* SE,% 70(> 'orrels v. Mc(all), ()* So ().> an% %!*err) Co!!unit) Church v. #loo!ington Dist. Missionar) + Church % tension 'oc., 61, #E,% ,11! 768769 See #uan $da. de %sconde, supra note 7,, at 1+, citin' ,hilippine (ational #an- v. Court of Appeals, ,(0 SCRA 760 ?(++7@> Caezo v. Rojas, supra note 7), at ,*,>

5ho b/ actual or constructi4e frau%, %uress, abuse of confi%ence, commission of a 5ron' or an/ form of unconscionable con%uct, artifice, concealment of Auestionable means, or 5ho in an/ 5a/ a'ainst eAuit/ an% 'oo% conscience has obtaine% or hol%s the le'al ri'ht to propert/ 5hich he ou'ht not, in eAuit/ an% 'oo% conscience, hol% an% en;o/!7.87.9 $he/ are aptl/ characteri-e% as Gfrau%3rectif/in' trust,H708709 impose% b/ eAuit/ to satisf/ the %eman%s of ;ustice 718719 an% to %efeat or pre4ent the 5ron'ful act of one of the parties! 7+87+9 Constructi4e trusts are illustrate% in Articles (6*), (6*6, (6** an% (6*.!6)86)9

On the other han%, resultin' trusts arise from the nature or circumstances of the consi%eration in4ol4e% in a transaction 5hereb/ one person becomes in4este% 5ith le'al title but is obli'ate% in eAuit/ to hol% his title for the benefit of another! $his is base% on the eAuitable %octrine that 4aluable consi%eration an% not le'al title is %eterminati4e of eAuitable title or interest an% is al5a/s presume% to ha4e been contemplate% b/ the parties!6(86(9 Such intent is presume% as it is not e2presse% in the instrument or %ee% of con4e/ance an% is to be foun% in the nature

7*87*9 Caezo v. Ro as, supra note 7), at ,*1> citin' .eirs of /ap v. Court of Appeals, 70( Phil! *,7, *7( ?(+++@! 7.87.9 Roa" Jr. v. Court of Appeals, :!R! #o! L3,0,+6, une ,7, (+17, (,7 SCRA 7, (*3(.! 708709 0. Am ur ,%, J(.7, citin' Martin v. 0ehl ?,n% &ist!@, (6* Cal App 7% ,,1! 718719 Roa" Jr. v. Court of Appeals, supra note 7., at (.! 7+87+9 0. Am ur ,%, J(.7, citin' Martin v. 0ehl ?,n% &ist!@, (6* Cal App 7% ,,1! 6)86)9 1opez v. Court of Appeals, :!R! #o! (*0016, &ecember (., ,))1, *06 SCRA ,.! 6(86(9 #uan $da. de %sconde, supra note 7,, at 1+3+)!

of their transaction!6,86,9 Implie% trusts of this nature are hence %escribable as Gintention3enforcin' trusts!H678679 Specific e2amples of resultin' trusts ma/ be foun% in the Ci4il Co%e, particularl/ Articles (661, (66+, (6*(, (6*, an% (6*7! 66 8669 Articles (661 to (6*. of the Ci4il Co%e enumerate cases of implie% trust, but the list accor%in' to Article (660 is not e2clusi4e of others 5hich ma/ be establishe% b/ the 'eneral la5 on trusts so lon' as the limitations lai% %o5n in Article (66, are obser4e%,6*86*9 that is, that the/ be not in conflict 5ith the #e5 Ci4il Co%e, the Co%e of Commerce, the Rules of Court an% special la5s!6.86.9

Fhile resultin' trusts 'enerall/ arise on failure of an e2press trust or of the purpose thereof, or on a con4e/ance to one person upon a consi%eration from another ?sometimes referre% to as a Gpurchase3mone/ resultin' trustH@, the/ ma/ also be impose% in other circumstances such that the court, shapin' ;u%'ment in its most efficient form an% pre4entin' a failure of ;ustice, must %ecree the e2istence of such a trust!608609 A resultin' trust, for instance, arises 5here, there bein' no frau% or 4iolation of the trust, the circumstances in%icate intent of the parties that le'al
6,86,9 'alao v. 'alao, :!R! #o! L3,..++, March (., (+0., 0) SCRA .*, 1(! 678679 0. Am ur ,%, J(.7, citin' Martin v. 0ehl ?,n% &ist!@, (6* Cal App 7% ,,1! 668669 1opez v. Court of Appeals, supra note 6)! 6*86*9 Roa" Jr. v. Court of Appeals, supra note 7., at (*! 6.86.9 Article (66, incorporates an% a%opts a lar'e part of the American la5 on trusts an% thereb/ the Philippine le'al s/stem 5ill be amplifie% an% 5ill be ren%ere% more suite% to a ;ust an% eAuitable solution of man/ Auestions! See $he Report of the Co%e Commission, p! .)! 608609 0. Am ur ,%, J(.., citin' McClure v. Moore, *.* So ,% 1> 2estern 3nion Te. Co. v. 'hepard, (.+ #I (0)!

title in one be hel% for the benefit of another! 618619 It also arises in some instances 5here the un%erl/in' transaction is 5ithout consi%eration, such as that contemplate% in Article (66+6+86+9 of the Ci4il Co%e! Fhere propert/, for e2ample, is 'ratuitousl/ con4e/e% for a particular purpose an% that purpose is either fulfille% or frustrate%, the court ma/ affirm the resultin' trust in fa4or of the 'rantor or transferor,*)8*)9 5here the beneficial interest in propert/ 5as not inten%e% to 4est in the 'rantee!*(8*(9

Intention = althou'h onl/ presume%, implie% or suppose% b/ la5 from the nature of the transaction or from the facts an% circumstances accompan/in' the transaction, particularl/ the source of the consi%eration = is al5a/s an element of a resultin' trust*,8*,9 an% ma/ be inferre% from the acts or con%uct of the parties rather than from %irect e2pression of con%uct!*78*79 Certainl/, intent as an in%ispensable element, is a matter that necessaril/ lies in the e4i%ence, that is, b/ e4i%ence, e4en circumstantial, of statements ma%e b/ the parties at or before the time title passes!*68*69 "ecause an implie% trust is neither %epen%ent upon an
618619 See 0. Am ur ,%, J(.., note *) 5hich cites Jones v. Jones" 6*+ P,% .)7 an% Re 2ilder" 6, "R .! 6+86+9 Art! (66+! $here is also an implie% trust 5hen a %onation is ma%e to a person but it appears that althou'h the le'al estate is transmitte% to the %onee, he ne4ertheless is either to ha4e no beneficial interest or onl/ a part thereof! *)8*)9 Re*illard v. .agedorn, . Conn App 7**, *)* A,% 07(! *(8*(9 4ra!e v. 2right, + #F,% 7.6, (60 ALR ((*6! *,8*,9 0. Am ur ,%, J(.+, p! ,)(, citin' '!ith v. '!ith, (+. So 6)+ an% '5on v. .uddleston, ,1, SF,% (1! *78*79 A!erican .otel Manage!ent Associates" Inc. v. Jones, 0.1 D,% *.,!

e2press a'reement nor reAuire% to be e4i%ence% b/ 5ritin',**8**9 Article (6*0*.8*.9 of our Ci4il Co%e authori-es the a%mission of parole e4i%ence to pro4e their e2istence! Parole e4i%ence that is reAuire% to establish the e2istence of an implie% trust necessaril/ has to be trust5orth/ an% it cannot rest on loose, eAui4ocal or in%efinite %eclarations!*08*09

$hus, contrar/ to the Court of AppealsB fin%in' that there 5as no e4i%ence on recor% sho5in' that an implie% trust relation arose bet5een Mar'arita an% Roberto, 5e fin% that petitioner before the trial court, ha% actuall/ a%%uce% e4i%ence to pro4e the intention of Mar'arita to transfer to Roberto onl/ the le'al title to the properties in Auestion, 5ith atten%ant e2pectation that Roberto 5oul% return the same to her on accomplishment of that specific purpose for 5hich the transaction 5as entere% into! $he e4i%ence of course is not %ocumentar/, but rather testimonial!

Fe recall that the complaint before the trial court alle'e% that the (+.1 Affi%a4it of $ransfer 5as e2ecute% merel/ to accommo%ate RobertoBs reAuest to ha4e the properties in his name an% thereb/ pro%uce proof of o5nership of certain real properties in the Philippines to support his <!S! 4isa application!
*68*69 See 0. Am ur ,%, J(0), p! ,)7! **8**9 See 0. Am ur ,%, J(.., p! (+0! *.8*.9 Art! (6*0! An implie% trust ma/ be pro4e% b/ oral e4i%ence! *08*09 Tigno v. Court of Appeals, supra note 7), at ,06> Morales v. Court of Appeals, ,06 SCRA ,1, ?(++0@> 6ng Ching ,o v. Court of Appeals, ,7+ SCRA 76( ?(++6@> 'alao v. 'alao, supra note 6,, at 17, citin' De 1eon v. Molo-,ec-son, ((. Phil! (,.0 ?(+.,@!

$he

a'reement, the complaint further state%, 5as for Mar'arita to transfer the ta2 %eclarations of the sub;ect properties to Roberto for the sai% purpose an% 5ithout the intention to %i4est her of the ri'hts of o5nership an% %ominion! *18*19 Mar'arita, ho5e4er, %ie% before trial on the merits ensue%> *+8*+9 /et the alle'ation 5as substantiate% b/ the open3court statements of her %au'hter, Lu-, an% of her niece, Eilaria Costales ?Eilaria@, a %isintereste% 5itness!

In her testimon/, Lu-, 5ho affirme% un%er oath her o5n presence at the e2ecution of the Affi%a4it of $ransfer, %escribe% the circumstances un%er 5hich Mar'arita an% Roberto entere% into the a'reement! She narrate% that Roberto ha% 5ante% to tra4el to the <!S an% to sho5 the embass/ proof of his financial capacit/, he asCe% to Gborro5H from Mar'arita the properties in4ol4e% but upon the con%ition that he 5oul% 'i4e them bacC to her upon his arri4al from the <nite% States! She a%mitte% that RobertoBs commitment to return the properties 5as not put in 5ritin' because the/ place% trust an% confi%ence in him, an% that 5hile she ha% spent most of her time in Min%anao since she marrie% in (+*., she 5oul% sometimes come to La <nion to see her mother but she ne4er reall/ Cne5 5hether at one point or another her mother ha% %eman%e% the return of the properties from Roberto!.)8.)9 She further asserte% that e4en after RobertoBs arri4al from the
*18*19 Recor%s, pp! ,37! *+8*+9 Id! at (0+3(1)! .)8.)9 $S#, Debruar/ +, ,))), pp! 0, 1, (., (0! A$$I! LI"A$IK<E:
Q: Madam witness, why do you know this transferors affidavit? WITNESS:

<nite% States, it 5as Mar'arita 5ho pai% off the ta2es on the sub;ect properties an% that it 5as onl/ 5hen her health starte% to %eteriorate that Roberto ha% taCen up those obli'ations!.(8.(9 EilariaBs testimon/ ran alon' the same line! LiCe Lu-, she 5as a%mitte%l/ present at the e2ecution of the Affi%a4it of $ransfer 5hich tooC place at the house she share% 5ith acinto Costales, the notari-in' officer 5ho 5as
A: I was resent when they si!ned, sir" Q: Who si!ned this? A: My mother, sir" Q: And whom? A: And #o$erto %ai!o, &r", sir" Q: 'ou said you were resent, whose si!nature a %ai!o? A: #o$erto %ai!o, sir" Q: 'our $rother? A: My $rother" Q: ( ( ( and the si!nature Mar!arita %ai!o, whose si!nature is that? A: My mother" (((( Q: Madam witness, tell the court under what circumstances was that transferors affidavit executed. A: What do you mean? Q: Under what circumstances? A: He ust !orrowed it !ecause he was "oin" to the United #tates, he is "oin" to show and he wants to use that as evidence that he owns land in the $hili%%ines. Q: What was the condition of that transfer, since you said you were %resent? A: He will return it as soon as he will arrive &sic', and that was a"reed u%on, sir. Q: Was (o!erto a!le to "o to America? A: )es, sir. ears under the name, #o$erto

her o5n brother! She tol% that Roberto at the time ha% 5ante% to tra4el to the <!S! but %i% not ha4e properties in the Philippines 5hich he coul% use to bacC up his 4isa application> as accommo%ation, Mar'arita GlentH him the ta2 %eclarations co4erin' the properties but 5ith the un%erstan%in' that upon his return he 5oul%

Q: And one of the eviden)e that was used ( ( ( to se)ure a visa were these * ta( de)+arations of ro erties? A: 'es, sir" Q: 'ou said that ,#o$erto %ai!o- romised to return these ro erties in the name of Mar!arita %ai!o" .ow +on! did #o$erto %ai!o stay in Ameri)a? A: .e did not stay +on!, sir" Q: .ow +on!? A: May$e ,*- to ,/- months" Q: And after he has returned from Ameri)a, did he return the tit+es of these ro erties in the name of your mother? A: We did not know a$out it $e)ause when we )ame to know ,of- it, it was a+ready so+d and my mother was sur rised to know that it was a+ready so+d" Q: When did you )ome to know ,of- it? A: In 0112 when my $rother died" (((( Q: *arlier you said that you were aware of this transferees affidavit x x x A: )es, sir. Q: +id you act as witness in the transferees affidavit? A: ,o, - was there only, sir. Q: #o that is the reason why you have no si"nature x x x as witness? A: )es, sir. (((( Q: Also, you said that the reason why this transferees affidavit and the transferors affidavit were executed was !ecause your !rother was "oin" to the United #tates and he will return this transferees affidavit when he comes !ac..

'i4e them bacC to Mar'arita!

She professe% familiarit/ 5ith the properties

in4ol4e% because one of them 5as actuall/ sittin' close to her o5n propert/!.,8.,9 Fhile in%ee% at one point at the stan% both of Lu-Ls an% EilariaBs presence at the e2ecution of the affi%a4it ha% been put to test in subtle inter;ections b/ respon%entsB counsel to the effect that their names an% si'natures %i% not appear in the Affi%a4it of $ransfer as 5itnesses, this, to our min%, is of no moment inasmuch
A: )es, sir. Q/ Was that a"reement %ut in writin"? A: ,o, sir. Q: Why was it not %ut in writin"? A: He was my !rother and we trusted him so much. Q: Why did you not as. that your !rother %ut it in writin" so that he will not for"et it? A: 0ecause of the trust we had with &sic' him, he was my !rother and we trusted him. Q: #o you admit that there is no document in writin" to show that that a"reement was the actual a"reement? A: ,one, sir. ,Em hasis su +ied"-

.(8.(9 $S#, Debruar/ +, ,))), pp! (,3(0! .,8.,9 $S#, March ,7, ,))), pp! 730!
Q: 3o you know Mar!arita %ai!o 4a$a)un!an? A: 'es, sir" I know her" She is the sister of my mother, 4+ara" Q: 3o you know how many )hi+dren does she have ,si)-? A: There are three )hi+dren name+y: %u5 %ai!o, #o$erto %ai!o, and 6au+ina %ai!o" Q: 3o you know the ro erties that are su$7e)ts of this )ase? A: 'es, I know" Q: Where are these ro erties +o)ated? A: At 6arin!ao and 8a))uit"

as the/ ha% not been calle% to testif/ on the fact of, or on the contents of, the Affi%a4it of $ransfer or its %ue e2ecution! Rather, their testimon/ 5as offere% to pro4e the circumstances surroun%in' its e2ecution = the circumstances from 5hich coul% be %eri4e% the un5ritten un%erstan%in' bet5een Roberto an% Mar'arita that b/ their act, no absolute transfer of o5nership 5oul% be effecte%! "esi%es, it 5oul% be hi'hl/ unliCel/ for Mar'arita to institute the instant complaint if it 5ere
Q: These ro erties in 6arin!ao, where are these ro erties in re+ation to the 4resta 9+a and the Mark Theresa A artments? Are these ro erties near those sites? A: 'es sir, they are very near ea)h other" Q: Now, do you know the su$7e)t ro erties, one of whi)h is west of the nationa+ road and )orner art of 4resta 3e+ Mar? A: 'es, I know it" Q: Why do you know it? A: 8e)ause the 4resta 3e+ Mar and ours is the 4resta 9+a, they are very near ea)h other" Q: What a$out the ro erty east of the nationa+ road near the Mark Theresa A artment, ( ( ( where is this ro erty? A: It is east of the road ( ( ( South of the Mark Theresa A artment" (((( Q: 'ou said that these ro erties were owned $y Mar!arita %ai!o 4a$a)un!an" 3o you know how these ro erties were transferred to #o$erto %ai!o, &r"? A: I know it" Q: Why do you know? A: 8e)ause the a ers were made $y my $rother, &a)into 4osta+es, in our house" Q: When you say &a)into 4osta+es, is this the same erson who was on)e a 7ud!e of 8a!u+in Tria+ 4ourt? A: 9h, yes: Q: Where is he now? A: .e is a+ready dead" ((((

in%ee% her intention to 4est in Roberto, b/ 4irtue of the Affi%a4it of $ransfer, absolute o5nership o4er the co4ere% properties!

It is %e%ucible from the fore'oin' that the inscription of RobertoBs name in the Affi%a4it of $ransfer as Mar'aritaBs transferee is not for the purpose of
Q: ,ow, will you tell the court why was this document &sic' executed !y Mar"arita 1ai"o and (o!erto 1ai"o. A: When (o!erto 1ai"o wanted to "o to America, he has no %ro%erties in his name. 2hat is why his mother lent him that document to show that he has %ro%erties in the $hili%%ines, !ut after he "oes to America those %ro%erties will "o !ac. to his mother. (((( Q: .ow far is your house to that of Mar!arita 4a$a)un!an? Atty" %i$ati;ue: 'our .onor, for the re)ord, that is a$out from the town ha++ to that +a)e four ,/- ki+ometers ( ( ( I think that wou+d $e the a ro(imate distan)e" (((( Q: At the time &3acinto 4ostales' was a ud"e and he executed this affidavit sometime in 5678, where were you if you still remem!er? A: - was in the house of my !rother &3acinto'. Q: )ou 9were: stayin" in ust one house? A: )es, sir. Q: And you said you were a witness to the execution of this transferees affidavit? A: )es, sir. Q: -f you were a witness, do you remem!er if you si"ned a document which will show that you were a witness? A: ,o, sir. Q:)ou did not si"n? A: ,o. sir. ((((

transferrin' o5nership to him but onl/ to enable him to hol% the propert/ in trust for Mar'arita! In%ee%, in the face of the cre%ible an% strai'htfor5ar% testimon/ of the t5o 5itnesses, Lu- an% Eilaria, the probati4e 4alue of the o5nership recor% forms in the names of respon%ents, to'ether 5ith the testimon/ of their 5itness from the municipal assessorBs office 5ho authenticate% sai% forms, are utterl/ minimal to sho5 RobertoBs o5nership! It suffices to sa/ that respon%ents %i% not bother to offer e4i%ence that 5oul% %irectl/ refute the statements ma%e b/ Lu- an%
Q: *arlier you said that you .now for a fact that there was an a"reement that Mar"arita 1ai"o si"ned this in favor of (o!erto 1ai"o !ecause (o!erto 1ai"o at that time &was' "oin" to the United #tates, and (o!erto 1ai"o will !e usin" this 2ransferees Affidavit? A: )es, sir. Q: +o you .now, madam witness, if that was reduced into writin"? (((( A: 2hat is a ver!al a"reement. Q: .ow did you )ome to know that? A: I was in the house" Q: In the house of Mar!arita %ai!o? A: 'es, sir, $e)ause she is my auntie Q: Are you sti++ stayin! there fu++ time in the house of Mar!arita %ai!o? A: Sometimes on+y" (((( Q: So that means that sometimes, you were not there" It )ou+d $e that Mrs" %ai!o to+d #o$erto %ai!o that that was ,his- ro erty a+ready" A: No, it )annot $e $e)ause Mar!arita %ai!o has two dau!hters, %u5 %ai!o and 6au+ina %ai!o" Q: So that is your o inion? A: 'es, sir" ,Em hasis su +ied"-

Eilaria in open court on the circumstances un%erl/in' the (+.1 Affi%a4it of $ransfer!

As a trustee of a resultin' trust, therefore, Roberto, liCe the trustee of an e2press passi4e trust, is merel/ a %epositar/ of le'al title ha4in' no %uties as to the mana'ement, control or %isposition of the propert/ e2cept to maCe a con4e/ance 5hen calle% upon b/ the cestui 7ue trust..78.79 Eence, the sales he entere% into 5ith respon%ents are a 5ron'ful con4ersion of the trust propert/ an% a breach of the trust! $he Auestion is: Ma/ respon%ents no5 be compelle% to recon4e/ the sub;ect properties to petitionerM Fe rule in the affirmati4e!

Respon%ents posit that petitionerBs claim ma/ ne4er be enforce% a'ainst them as the/ ha% purchase% the properties from Roberto for 4alue an% in 'oo% faith! $he/ also claim that, at an/ rate, petitionerBs cause of action has accrue% 5a/ bacC in (+.1 upon the e2ecution of the Affi%a4it of $ransfer an%, hence, 5ith the ,1 lon' /ears that since passe%, petitionerBs claim ha% lon' become stale not onl/ on account of laches, but also un%er the rules on e2tincti4e prescription 'o4ernin' a resultin' trust! Fe %o not a'ree!

4irst" fun%amental is the rule in lan% re'istration la5 that the issue of 5hether the bu/er of realt/ is in 'oo% or ba% faith is rele4ant onl/ 5here the sub;ect of the sale is re'istere% lan% an% the purchase 5as ma%e from the re'istere%
.78.79 0. Am ur ,%, J(.,, citin' .oc-ing v. .oc-ing, 616 #E,% 6).!

o5ner 5hose title to the lan% is clean, in 5hich case the purchaser 5ho relies on the clean title of the re'istere% o5ner is protecte% if he is a purchaser in 'oo% faith an% for 4alue!.68.69 Since the properties in Auestion are unre'istere% lan%s, respon%ents purchase% the same at their o5n peril! $heir claim of ha4in' bou'ht the properties in 'oo% faith, i.e." 5ithout notice that there is some other person 5ith a ri'ht to or interest therein, 5oul% not protect them shoul% it turn out, as it in fact %i% in this case, that their seller, Roberto, ha% no ri'ht to sell them!

'econd" the in4ocation of the rules on limitation of actions relati4e to a resultin' trust is not on point because the resultin' trust relation bet5een Mar'arita an% Roberto ha% been e2tin'uishe% b/ the latterBs %eath! him!.*8.*9 A trust, it is sai%, terminates upon the %eath of the trustee, particularl/ 5here the trust is personal to "esi%es, prescription an% laches, in respect of this resultin' trust relation, har%l/ can impair petitionerBs cause of action! On the one han%, in accor%ance 5ith Article ((66..8..9 of the Ci4il Co%e, an action for recon4e/ance to enforce an implie% trust in oneBs fa4or prescribes in ten ?()@ /ears from the time

.68.69 'pouses Ra)os v. Re)es" 66. Phil 7,, *) ?,))7@, citin' 'ales v. Court of Appeals, ,(( SCRA 1*1 ?(++,@> David v. #andin" :!R! #os! L3617,,, L36+0(,, L36+0(. an% 6+.10, April 1, (+10, (6+ SCRA (6), (*)! .*8.*9 Canezo v. Rojas, supra note 7), at ,*0! ..8..9 Art! ((66! $he follo5in' actions must be brou'ht 5ithin ten /ears from the time the ri'ht of action accrues: ?(@ ?,@ ?7@ <pon a 5ritten contract> <pon an obli'ation create% b/ la5> <pon a ;u%'ment!

the ri'ht of action accrues, as it is base% upon an obli'ation create% b/ la5! .08.09 It sets in from the time the trustee performs uneAui4ocal acts of repu%iation amountin' to an ouster of the cestui 7ue trust 5hich are ma%e Cno5n to the latter..1 8.19 In this case, it 5as the (++, sale of the properties to respon%ents that comprise% the act of repu%iation 5hich, ho5e4er, 5as ma%e Cno5n to Mar'arita onl/ in (++* but ne4ertheless impelle% her to institute the action in (++. = still 5ell 5ithin the prescripti4e perio%! Ear%l/ can be consi%ere% as act of repu%iation RobertoBs open court %eclaration 5hich he ma%e in the (+0+ a%option procee%in's in4ol4in' respon%ents to the effect that he o5ne% the sub;ect properties, .+8.+9 nor e4en the fact that he in (+00 ha% entere% into a lease contract on one of the %ispute% properties 5hich contract ha% been sub;ect of a (++. %ecision of the Court of Appeals!0)80)9 $hese %o not suffice to constitute uneAui4ocal acts in repu%iation of the trust!

On the other han%, laches, bein' roote% in eAuit/, is not al5a/s to be applie% strictl/ in a 5a/ that 5oul% obliterate an other5ise 4ali% claim especiall/ bet5een bloo% relati4es! $he e2istence of a confi%ential relationship base% upon consan'uinit/ is an important circumstance for consi%eration> hence, the %octrine

.08.09 .eirs of Maria $da. de $ega v. Court of Appeals , :!R! #o! +7*)0, ul/ (,, (++(, (++ SCRA (.1, (00> Tale v. Court of Appeals, :!R! #o! ()(),1, April ,7, (++,, ,)1 SCRA ,..! .18.19 ,ilapil v. #riones, :!R! #o! (*)(0* ?Resolution on the Motion for Reconsi%eration@, Debruar/ *, ,))0, *(6 SCRA (+0> Canezo v. Rojas, supra note 7), at ,*,3,*7> Ra!os v. Ra!os, (*1 Phil! +7* ?(+06@! .+8.+9 &ecision of the Municipal $rial Court of San Dernan%o, La <nion, "ranch I in SP! PROC! #o! (+7, CA rollo, pp! 7.737.*! 0)80)9 &ecision of the Court of Appeals in CA3:!R! SP #o! 7.,,), id! at 70(3701!

is not to be applie% mechanicall/ as bet5een near relati4es! 0(80(9 Adaza v. Court of Appeals0,80,9 hel% that the relationship bet5een the parties therein, 5ho 5ere siblin's, 5as sufficient to e2plain an% e2cuse 5hat 5oul% other5ise ha4e been a lon' %ela/ in enforcin' the claim an% the %ela/ in such situation shoul% not be as strictl/ construe% as 5here the parties are complete stran'ers vis-a-vis each other> thus, reliance b/ one part/ upon his bloo% relationship 5ith the other an% the trust an% confi%ence normall/ connote% in our culture b/ that relationship shoul% not be taCen a'ainst him! $oo, 'otto v. Teves078079 rule% that the %octrine of laches is not strictl/ applie% bet5een near relati4es, an% the fact that the parties are connecte% b/ ties of bloo% or marria'e ten%s to e2cuse an other5ise unreasonable %ela/!

Third" there is a fun%amental principle in a'enc/ that 5here certain propert/ entruste% to an a'ent an% impresse% b/ la5 5ith a trust in fa4or of the principal is 5ron'full/ %i4erte%, such trust follo5s the propert/ in the han%s of a thir% person an% the principal is or%inaril/ entitle% to pursue an% reco4er it so lon' as the propert/ can be trace% an% i%entifie%, an% no superior eAuities ha4e inter4ene%! $his principle is actuall/ one of trusts, since the 5ron'ful con4ersion 'i4es rise to a constructi4e trust 5hich pursues the propert/, its pro%uct or procee%s, an% permits the beneficiar/ to reco4er the propert/ or obtain %ama'es for the 5ron'ful con4ersion of the propert/! Aptl/ calle% the Gtrust pursuit rule,H it applies 5hen a

0(80(9 See Adaza v. Court of Appeals, ,*7 Phil! 7.6, 70. ?(+1+@! 0,80,9 Id! 078079 (0* Phil! 767 ?(+01@!

constructi4e or resultin' trust has once affi2e% itself to propert/ in a certain state or form!068069

Eence, a trust 5ill follo5 the propert/ = throu'h all chan'es in its state an% form as lon' as such propert/, its pro%ucts or its procee%s, are capable of i%entification, e4en into the han%s of a transferee other than a *ona fide purchaser for 4alue, or restitution 5ill be enforce% at the election of the beneficiar/ throu'h recourse a'ainst the trustee or the transferee personall/! $his is 'roun%e% on the principle in propert/ la5 that o5nership continues an% can be asserte% b/ the true o5ner a'ainst an/ 5ithhol%in' of the ob;ect to 5hich the o5nership pertains, 5hether such ob;ect of the o5nership is foun% in the han%s of an ori'inal o5ner or a transferee, or in a %ifferent form, as lon' as it can be i%entifie%! 0*80*9 Accor%in'l/, the person to 5hom is ma%e a transfer of trust propert/ constitutin' a 5ron'ful con4ersion of the trust propert/ an% a breach of the trust, 5hen not protecte% as a *ona fide purchaser for 4alue, is himself liable an% accountable as a constructi4e trustee! $he liabilit/ attaches at the moment of the transfer of trust propert/ an% continues until there is full restoration to the beneficiar/! $hus, the transferee is char'e% 5ith, an% can be hel% to the performance of the trust, eAuall/ 5ith the ori'inal trustee, an% he can be compelle% to e2ecute a recon4e/ance!0.80.9

068069 See 0. Am ur J,+,, p! 7). 0*80*9 See 0. Am ur J,+,, pp! 7).37)0 0.80.9 See 0. Am ur J,+0, pp! 7((37(,!

$his scenario is characteristic of a constructi4e trust impose% b/ Article (6*.008009 of the Ci4il Co%e, 5hich impresses upon a person obtainin' propert/ throu'h mistaCe or frau% the status of an implie% trustee for the benefit of the person from 5hom the propert/ comes! Petitioner, in la/in' claim a'ainst respon%ents 5ho are conce%e%l/ transferees 5ho professe% ha4in' 4ali%l/ %eri4e% their o5nership from Roberto, is in effect enforcin' a'ainst respon%ents a constructi4e trust relation that arose b/ 4irtue of the 5ron'ful an% frau%ulent transfer to them of the sub;ect properties b/ Roberto!

Aznar #rother Realt) Co. v. A)ing"018019 citin' #uan $da. de %sconde v. Court of Appeals"0+80+9 e2plaine% this form of implie% trust as follo5s:

A %eeper anal/sis of Article (6*. re4eals that it is not a trust in the technical sense for in a t/pical trust, confi%ence is repose% in one person 5ho is name% a trustee for the benefit of another 5ho is calle% the cestui 7ue trust, respectin' propert/ 5hich is hel% b/ the trustee for the benefit of the cestui 7ue trust! A constructi4e trust, unliCe an e2press trust, %oes not emanate from, or 'enerate a fi%uciar/ relation! Fhile in an e2press trust, a beneficiar/ an% a trustee are linCe% b/ confi%ential or fi%uciar/ relations, in a constructi4e trust, there is neither a promise nor an/ fi%uciar/ relation to speaC of an% the so3calle% trustee neither accepts an/ trust nor inten%s hol%in' the propert/ for the beneficiar/! 2222 2 2 2 8C9onstructi4e trusts are create% b/ the construction of eAuit/ in or%er to satisf/ the %eman%s of ;ustice an% pre4ent un;ust enrichment! $he/ arise contrar/ to intention a'ainst one 5ho, b/ frau%, %uress or abuse of confi%ence, obtains or 008009 Art! (6*.! If propert/ is acAuire% throu'h mistaCe or frau%, the person obtainin' it is, b/ force of la5, consi%ere% a trustee of an implie% trust for the benefit of the person from 5hom the propert/ comes! 018019 6+0 Phil! 011, 0++ ?,))*@! 0+80+9 'upra note 7,!

hol%s the le'al ri'ht to propert/ 5hich he ou'ht not, in eAuit/ an% 'oo% conscience, to hol%!1)81)9

It is settle% that an action for recon4e/ance base% on a constructi4e implie% trust prescribes in () /ears liCe5ise in accor%ance 5ith Article ((66 of the Ci4il Co%e! Iet not liCe in the case of a resultin' implie% trust an% an e2press trust, prescription super4enes in a constructi4e implie% trust e4en if the trustee %oes not repu%iate the relationship! In other 5or%s, repu%iation of sai% trust is not a con%ition prece%ent to the runnin' of the prescripti4e perio%!1(81(9

As to 5hen the prescripti4e perio% commences to run, Crisosto!o v. &arcia1,81,9 eluci%ate% as follo5s:

Fhen propert/ is re'istere% in anotherNs name, an implie% or constructi4e trust is create% b/ la5 in fa4or of the true o5ner! $he action for recon4e/ance of the title to the ri'htful o5ner prescribes in () /ears from the issuance of the title! An action for recon4e/ance base% on implie% or constructi4e trust prescribes in ten /ears from the alle'e% frau%ulent re'istration or %ate of issuance of the certificate of title o4er the propert/! It is no5 5ell settle% that the prescripti4e perio% to reco4er propert/ obtaine% b/ frau% or mistaCe, 'i4in' rise to an implie% trust un%er Art! (6*. of the Ci4il Co%e, is () /ears pursuant to Art! ((66! T01s ten ye#r pres2r1pt13e per1%d be.1ns t% r,n 4r%+ t0e d#te t0e #d3erse p#rty rep,d1#tes t0e 1+p-1ed tr,st,

1)81)9 Aznar #rothers Realt) Co. v. A)ing, supra note 01, at 0++31))! 1(81(9 #uan $da. de %sconde v. Court of Appeals , supra note 7,> Aznar #rothers Realt) Co. v. A)ing, id.
<=><=? 20@ 6hi+" A/* ,=BB@- "

50120 rep,d1#t1%n t#6es p-#2e 50en t0e #d3erse p#rty re.1sters t0e -#nd. 17 8179

Drom the fore'oin', it is clear that an action for recon4e/ance un%er a constructi4e implie% trust in accor%ance 5ith Article (6*. %oes not prescribe unless an% until the lan% is re'istere% or the instrument affectin' the same is inscribe% in accor%ance 5ith la5, inasmuch as it is 5hat bin%s the lan% an% operates constructi4e notice to the 5orl%!168169 In the present case, ho5e4er, the lan%s in4ol4e% are conce%e%l/ unre'istere% lan%s> hence, there is no 5a/ b/ 5hich Mar'arita, %urin' her lifetime, coul% be notifie% of the furti4e an% frau%ulent sales ma%e in (++, b/ Roberto in fa4or of respon%ents, e2cept b/ actual notice from Pe%ro himself in Au'ust (++*! Eence, it is from that %ate that prescription be'an to toll! $he filin' of the complaint in Debruar/ (++. is 5ell 5ithin the prescripti4e perio%! Dinall/, such %ela/ of onl/ si2 ?.@ months in institutin' the present action har%l/ suffices to ;ustif/ a fin%in' of ine2cusable %ela/ or to create an inference that Mar'arita has allo5e% her claim to stale b/ laches!

7HEREFORE, the Petition is GRANTED!

$he October (7, ,)).

&ecision of the Court of Appeals in CA3:!R! CV #o! 0,70(, affirmin' the ul/ ,, ,))( ;u%'ment of the Re'ional $rial Court of La <nion, "ranch 77 in Ci4il Case #o! ()7(3":, is REVERSED #nd SET ASIDE, an% a ne5 one is entere% ?a@
178179 Id. at 0*7, citin' Austria-Magat v. Court of Appeals" 6,. Phil! ,.7, ,01 ?,)),@ ?Emphasis supplie%!@> ,ascual v. Court of Appeals" :!R! #o! ((*+,*, Au'ust (*, ,))7, 6)+ SCRA ()*, ((7> 'pouses Alfredo v. 'pouses #orras" 6*, Phil! (01, ,)6 ?,))7@ > $da. de Delgado v. Court of Appeals" 6(. Phil! ,.7, ,06 ?,))(@> $illanueva-Mijares v. Court of Appeals" 71. Phil! ***, *.. ?,)))@! 168169 'pouses A*rigo v. De $era, 60. Phil! .6(, .*7 ?,))6@!

%irectin' the cancellation of the ta2 %eclarations co4erin' the sub;ect properties in the name of Roberto &! Lai'o an% his transferees> ?b@ nullif/in' the %ee%s of sale e2ecute% b/ Roberto &! Lai'o in fa4or of respon%ents Pe%ro Ro/ Lai'o an% Marilou Lai'o> an% ?c@ %irectin' sai% respon%ents to e2ecute recon4e/ance in fa4or of petitioner!

SO ORDERED.

DIOSDADO M. !ERALTA Associate ustice

7E CONCUR:

ANTONIO T. CAR!IO Associate ustice

!RESBITERO $. VELASCO, $R. Associate ustice Chairperson

ARTURO D. BRION Associate ustice

MARIA LOURDES !. A. SERENO Associate ustice

ATTESTATION

I attest that the conclusions in the abo4e &ecision ha% been reache% in consultation before the case 5as assi'ne% to the 5riter of the opinion of the CourtBs &i4ision!

!RESBITERO $. VELASCO, $R. Associate ustice $hir% &i4ision, Chairperson

CERTIFICATION

Pursuant to Section (7, Article VIII of the Constitution an% the &i4ision ChairpersonBs Attestation, I certif/ that the conclusions in the abo4e &ecision ha% been reache% in consultation before the case 5as assi'ne% to the 5riter of the opinion of the CourtBs &i4ision!

RENATO C. CORONA Chief ustice