Republic of the Philippines

Supreme Court
Manila


THIRD DIVISION

SOLEDD C!E"O# substitute$ b% &ILLIM
C!E"O an$ VICTORINO C!E"O
Petitioners#




' (ersus '




CONCEPCION RO)S#
Respon$ent*
+*R* No* ,-./..

Present0

1NRES'SNTI+O# )*#
Chairperson#
2STRI'MRTINE"#
CHICO'N"RIO#
NCH2R# an$
RE1ES# ))*


Promul3ate$0

No(ember 45# 466/
7'''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''''7

D E C I S I O N

NCH2R# )*0


This is a petition for re(ie8 on certiorari from the Decision9,: of the Court of
ppeals# $ate$ September /# 4666# in C'+*R* SP No* ;545<# an$ Resolution $ate$ Ma%
=# 466,*



On )anuar% 4=# ,==/# petitioner Sole$a$ Ca>e?o file$ a Complaint94: for the
reco(er% of real propert% plus $ama3es 8ith the Municipal Trial Court @MTCA of Na(al#
Biliran# a3ainst her fatherCs secon$ 8ife# respon$ent Concepcion RoDas* The subDect
propert% is an unre3istere$ lan$ 8ith an area of -#,<= sEuare meters# situate$ at
Hi3atan3an# Na(al# Biliran* Ca>e?o attache$ to the complaint a )oint ffi$a(it95:
e7ecute$ on Ma% ,6# ,=/= b% Isi$ro Catan$iDan an$ Ma7imina Ca>e?o attestin3 to her
acEuisition of the propert%*

In her complaint# the petitioner alle3e$ that she bou3ht the parcel of lan$ in ,=5=
from Criso3ono Limpia$o# althou3h the transaction 8as not re$uce$ into 8ritin3*
Thereafter# she imme$iatel% tooF possession of the propert%* &hen she an$ her husban$
left for Min$anao in ,=-.# she entruste$ the sai$ lan$ to her father# Crispulo9-: RoDas#
8ho tooF possession of# an$ culti(ate$# the propert%* In ,=.6# she foun$ out that the
respon$ent# her stepmother# 8as in possession of the propert% an$ 8as culti(atin3 the
same* She also $isco(ere$ that the ta7 $eclaration o(er the propert% 8as alrea$% in the
name of Crispulo RoDas*9;:


In her ns8er# the respon$ent asserte$ that# contrar% to the petitionerCs claim# it
8as her husban$# Crispulo RoDas# 8ho bou3ht the propert% from Criso3ono Limpia$o in
,=-.# 8hich accounts for the ta7 $eclaration bein3 in CrispuloCs name* Grom then on#
until his $eath in ,=/.# Crispulo possesse$ an$ culti(ate$ the propert%* 2pon his $eath#
the propert% 8as inclu$e$ in his estate# 8hich 8as a$ministere$ b% a special
a$ministrator# Bien(eni$o Ricafort* The petitioner# as heir# e(en recei(e$ her share in the
pro$uce of the estate* The respon$ent further conten$e$ that the petitioner ou3ht to ha(e
implea$e$ all of the heirs as $efen$ants* She also ar3ue$ that the fact that petitioner file$
the complaint onl% in ,==/ means that she ha$ alrea$% aban$one$ her ri3ht o(er the
propert%*9<:


On )ul% 5# ,==.# after hearin3# the MTC ren$ere$ a Decision in fa(or of the
petitioner# thus0


&HEREGORE# premises consi$ere$# the Court fin$s a
prepon$erance of e(i$ence in fa(or of plaintiff Sole$a$ Ca>e?o an$
a3ainst $efen$ant Concepcion RoDas b% $eclarin3 plaintiff the true an$
la8ful o8ner of the lan$ more particularl% $escribe$ un$er para3raph ; of
the complaint an$ hereb% or$ers $efen$ant Concepcion RoDas0

aA To (acate an$ surren$er possession of the lan$
to
plaintiffH
bA To pa% plaintiff the sum of P5-#666*66 actual
$ama3es# P,6#666*66 for attorne%Cs fees
an$ liti3ation e7pensesH an$
cA To pa% the costs*

SO ORDERED*9/:


Despite the respon$entCs obDection that the (erbal sale cannot be pro(en 8ithout
infrin3in3 the Statute of Grau$s# the MTC 3a(e cre$ence to the testimon% of the
petitionersC t8o 8itnesses attestin3 to the fact that Criso3ono Limpia$o sol$ the propert%
to the petitioner in ,=5=* The MTC also foun$ no e(i$ence to sho8 that Crispulo RoDas
bou3ht the propert% from Criso3ono Limpia$o in ,=-.* It hel$ that the ,=-. ta7
$eclaration in CrispuloCs name ha$ little si3nificance on respon$entCs claim# consi$erin3
that in ,=-.# the Icountr% 8as then rehabilitatin3 itself from the ra(a3es of the Secon$
&orl$ &arJ an$ Ithe 3o(ernment 8as more intereste$ in the increase in ta7 collection
than the obser(ance of the niceties of la8*J9.:


The respon$ent appeale$ the case to the Re3ional Trial Court @RTCA of Na(al#
Biliran* On October ,4# ,==.# the RTC re(erse$ the MTC $ecision on the 3roun$ that the
action ha$ alrea$% prescribe$ an$ acEuisiti(e prescription ha$ set in* The $ispositi(e
portion of the Decision rea$s0

&HEREGORE# premises consi$ere$# the $ecision of the Municipal
Trial Court of Na(al# Biliran a8ar$in3 o8nership of the $ispute$ lan$ to
the plaintiff an$ further allo8in3 reco(er% of $ama3es is hereb%
REVERSED in toto* There is no a8ar$ of $ama3es*

The sai$ propert% remains as the le3itime of the $efen$ant
Concepcion RoDas an$ her chil$ren*

SO ORDERED*9=:


Ho8e(er# actin3 on petitionerCs motion for reconsi$eration# the RTC amen$e$ its
ori3inal $ecision on December ,-# ,==.*9,6: This time# it hel$ that the action ha$ not
%et prescribe$ consi$erin3 that the petitioner merel% entruste$ the propert% to her father*
The ten'%ear prescripti(e perio$ for the reco(er% of a propert% hel$ in trust 8oul$
commence to run onl% from the time the trustee repu$iates the trust* The RTC foun$ no
e(i$ence on recor$ sho8in3 that Crispulo RoDas e(er ouste$ the petitioner from the
propert%* The $ispositi(e portion of the amen$e$ $ecision rea$s as follo8s0


&HEREGORE# in (ie8 of the fore3oin3 consi$erations# the
$ecision of this Court $ate$ October ,4# ,==. is hereb% set asi$e an$
another is hereb% entere$ mo$if%in3 the $ecision of the Court a Euo an$
$eclarin3 Sole$a$ RoDas V$a* De Ca>e?o as the true an$ la8ful o8ner of a
parcel of lan$# more particularl% $escribe$ an$ boun$e$ as follo8s0

parcel of lan$ situate$ at Hi3atan3an# Na(al#
Biliran# boun$e$ on the North b% Policarpio Limpia$oH on
the South b% Gi$el Limpia$oH on the East b% SeashoreH an$
on the &est b% Crispolo @sicA Limpia$o 8ith an
appro7imate area of -#,<= sEuare meters per Ta7
Declaration No* 44;.# later un$er Ta7 Declaration No*
-6/5 in the name of Crispolo RoDas an$ later in the name of
the Heirs of Crispolo RoDas*

Gurther# or$erin3 $efen$ant'appellant Concepcion RoDas an$ all
persons claimin3 ri3hts or interest un$er her to (acate an$ surren$er
possession of the lan$ aforecite$ to the plaintiff or an% of her authori?e$
representati(es# Or$erin3 the Pro(incial an$Kor Municipal ssessorCs
Office to cancel the present e7istin3 Ta7 Declaration in the name of Heirs
of Crispolo RoDas referrin3 to the abo(e'$escribe$ propert% in fa(or of the
name of Sole$a$ RoDas V$a* De Ca>e?o# Or$erin3 the $efen$ant'appellant
Concepcion RoDas to pa% the plaintiff'appellee the sum of P5-#666*66 in
actual $ama3es# an$ to pa% for the loss of her share in mone% (alue of the
pro$ucts of the coconuts of sai$ lan$ from ,=/= to ,==/ an$ to pa% further
until the case is terminate$ at the rate ofP466*66 per Euarter base$ on the
re3ular remittances of the late Crispolo RoDas to the plaintiff'appellee# an$
to pa% the costs*

SO ORDERED*9,,:


The respon$ent file$ a motion to reconsi$er the men$e$ Decision but the RTC
$enie$ the same in an Or$er $ate$ pril 4;# ,===*


She then file$ a petition for re(ie8 8ith the Court of ppeals @CA# 8hich
re(erse$ the men$e$ Decision of the RTC on September /# 4666# thus0

&HEREGORE# the amen$e$ $ecision $ate$ December ,-# ,==.
ren$ere$ in Ci(il Case No* B',6-, is hereb% REVERSED an$ SET
SIDE* The complaint file$ b% Sole$a$ Ca>e?obefore the Municipal Trial
Court of Na(al# Biliran is hereb% DISMISSED on 3roun$s of laches an$
prescription an$ for lacF of merit*

SO ORDERED*9,4:


The C hel$ that the petitionerCs inaction for se(eral %ears casts a serious $oubt
on her claim of o8nership o(er the parcel of lan$* It note$ that ,/ %ears lapse$ since she
$isco(ere$ that respon$ent 8as in a$(erse possession of the propert% before she institute$
an action to reco(er the same* n$ $urin3 the probate procee$in3s# the petitioner $i$ not
e(en contest the inclusion of the propert% in the estate of Crispulo RoDas* 9,5:

The C 8as con(ince$ that Crispulo RoDas o8ne$ the propert%# ha(in3 bou3ht the
same from Criso3ono Limpia$o in ,=-.* Supportin3 this conclusion# the appellate court
cite$ the follo8in3 circumstances0 @,A the propert% 8as $eclare$ for ta7ation purposes in
CrispuloCs name an$ he ha$ been pa%in3 the ta7es thereon from ,=-. until his $eath in
,=/.H @4A Crispulo a$(ersel% possesse$ the same propert% from ,=-. until his $eath in
,=/.H an$ @5A upon his $eath in ,=/.# the propert% 8as inclu$e$ in his estate# the
procee$s of 8hich 8ere $istribute$ amon3 his heirs*9,-:


The C further hel$ that# assumin3 that there 8as an implie$ trust bet8een the
petitioner an$ her father o(er the propert%# her ri3ht of action to reco(er the same 8oul$
still be barre$ b% prescription since -= %ears ha$ alrea$% lapse$ since Crispulo a$(ersel%
possesse$ the conteste$ propert% in ,=-.*9,;:

On Ma% =# 466,# the C $enie$ the petitionerCs motion for reconsi$eration for
lacF of merit*9,<:

In this petition for re(ie8# the petitioner# substitute$ b% her heirs# assi3ns the
follo8in3 errors0


That the Court of ppeals committe$ 3ra(e abuse of $iscretion in
settin3 asi$e petitionerCs contention that the Petition for Re(ie8 file$ b%
respon$ent CONCEPCION RO)S before the Court of ppeals 8as
GILED O2T OG TIMEH

That the Court of ppeals erre$ an$ committe$ 3ra(e abuse of
$iscretion amountin3 to lacF or e7cess of Duris$iction 8hen it $eci$e$ that
the filin3 of the case b% SOLEDD C!E"O for Reco(er% of Real
Propert% 8as alrea$% barre$ b% PRESCRIPTION ND LCHES*9,/:


The petitioner insists that the respon$entCs petition for re(ie8 before the C 8as
file$ out of time* The petitioner posits that the C ma% not 3rant an a$$itional e7tension
of time to file the petition e7cept for the most compellin3 reason* She conten$s that the
fact that respon$entCs counsel nee$e$ a$$itional time to secure the certifie$ cop% of his
anne7es cannot be consi$ere$ as a compellin3 reason that 8oul$ Dustif% an a$$itional
perio$ of
e7tension* She a$mits# thou3h# that this issue 8as raise$ for the first time in their motion
for reconsi$eration# but insists that it can be raise$ at an% time since it concerns the
Duris$iction of the C o(er the petition*

The petitioner further posits that prescription an$ laches are una(ailin3 because
there 8as an e7press trust relationship bet8een the petitioner an$ Crispulo RoDas an$ his
heirs# an$ e7press trusts $o not prescribe* E(en assumin3 that it 8as not an e7press trust#
there 8as a resultin3 trust 8hich 3enerall% $oes not prescribe unless there is repu$iation
b% the trustee*

Gor her part# the respon$ent ar3ues that the petitioners are no8 estoppe$ from
Euestionin3 the C Resolution 3rantin3 her secon$ motion for e7tension to file the
petition for re(ie8* She notes that the petitioner $i$ not raise this issue in the comment
that she file$ in the C* In an% case# the 3rant of the secon$ e7tension of time 8as
8arrante$ consi$erin3 that the certifie$ true cop% of the assaile$ RTC or$ers $i$ not
arri(e at the office of respon$entCs counsel in Cebu Cit% in time for the filin3 of the
petition*


On the merits# the respon$ent asserts that the complaint is barre$ b% prescription#
laches an$ estoppel* Grom ,=-. until his $eath in ,=/.# Crispulo culti(ate$ the propert%
an$ 8as in a$(erse# peaceful an$ continuous possession thereof in the concept of o8ner*
It tooF the petitioner -= %ears from ,=-. before she file$ the complaint for reco(er% of
the propert% in ,==/* +rantin3 that it 8as onl% in ,=.6 that she foun$ out that the
respon$ent a$(ersel% possesse$ the propert%# still petitioner allo8e$ ,/ %ears to elapse
before she asserte$ her alle3e$ ri3ht o(er the propert%*

Ginall%# the respon$ent maintains that the other co'o8ners are in$ispensable
parties to the caseH an$ because the% 8ere not implea$e$# the case shoul$ be $ismisse$*

The petition has no merit*

On the proce$ural issue raise$ b% the petitioner# 8e fin$ no re(ersible error in the
3rant b% the C of the secon$ motion for e7tension of time to file the respon$entCs
petition* The 3rant or $enial of a motion for e7tension of time is a$$resse$ to the soun$
$iscretion of the court*9,.: The C ob(iousl% consi$ere$ the $ifficult% in securin3 a
certifie$ true cop% of the assaile$ $ecision because of the $istance bet8een the office of
respon$entCs counsel an$ the trial court as a compellin3 reason for the reEuest* In the
absence of an% sho8in3 that the C 3rante$ the motion for e7tension capriciousl%# such
e7ercise of $iscretion 8ill not be $isturbe$ b% this Court*

On the secon$ issue# the petitioner insists that her ri3ht of action to reco(er the
propert% cannot be barre$ b% prescription or laches e(en 8ith the respon$entCs
uninterrupte$ possession of the propert% for -= %ears because there e7iste$ bet8een her
an$ her father an e7press trust or a resultin3 trust* In$ee$# if no trust relations e7iste$# the
possession of the propert% b% the respon$ent# throu3h her pre$ecessor# 8hich $ates bacF
to ,=-.# 8oul$ alrea$% ha(e 3i(en rise to acEuisiti(e prescription in accor$ance 8ith ct
No* ,=6 @Co$e of Ci(il Proce$ureA*9,=: 2n$er Section -6 of ct No* ,=6# an action for
reco(er% of real propert%# or of an interest therein# can be brou3ht onl% 8ithin ten %ears
after the cause of action accrues* This perio$ coinci$es 8ith the ten'%ear perio$ for
acEuisiti(e prescription pro(i$e$ un$er Section -,946: of the same ct*
Thus# the resolution of the secon$ issue hin3es on our $etermination of the
e7istence of a trust o(er the propert% ''' e7press or implie$ ''' bet8een the petitioner an$
her father*

trust is the le3al relationship bet8een one person ha(in3 an eEuitable o8nership
of propert% an$ another person o8nin3 the le3al title to such propert%# the eEuitable
o8nership of the former entitlin3 him to the performance of certain $uties an$ the
e7ercise of certain po8ers b% the latter*94,: Trusts are either e7press or implie$*944:
E7press trusts are those 8hich are create$ b% the $irect an$ positi(e acts of the parties# b%
some 8ritin3 or $ee$# or 8ill# or b% 8or$s e(incin3 an intention to create a trust* 945:
Implie$ trusts are those 8hich# 8ithout bein3 e7presse$# 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 bein3 superin$uce$ on the transaction b% operation of la8 basicall% b% reason
of eEuit%*94-: n implie$ trust ma% either be a resultin3 trust or a constructi(e trust*

It is true that in e7press trusts an$ resultin3 trusts# a trustee cannot acEuire b%
prescription a propert% entruste$ to him unless he repu$iates the trust*94;: The follo8in3
$iscussion is instructi(e0


There is a rule that a trustee cannot acEuire b% prescription the
o8nership of propert% entruste$ to him# or that an action to compel a
trustee to con(e% propert% re3istere$ in his name in trust for the benefit of
the cestui Eue trust $oes not prescribe# or that the $efense of prescription
cannot be set up in an action to reco(er propert% hel$ b% a person in trust
for the benefit of another# or that propert% hel$ in trust can be reco(ere$ b%
the beneficiar% re3ar$less of the lapse of time*

That rule applies sEuarel% to e7press trusts* The basis of the rule is
that the possession of a trustee is not a$(erse* Not bein3 a$(erse# he $oes
not acEuire b% prescription the propert% hel$ in trust* Thus# Section 5. of
ct ,=6 pro(i$es that the la8 of prescription $oes not appl% Lin the case of
a continuin3 an$ subsistin3 trust*L

The rule of imprescriptibilit% of the action to reco(er propert% hel$
in trust ma% possibl% appl% to resultin3 trusts as lon3 as the trustee has not
repu$iate$ the trust*

7 7 7 7

cEuisiti(e prescription ma% bar the action of the beneficiar%
a3ainst the trustee in an e7press trust for the reco(er% of the propert% hel$
in trust 8here @aA the trustee has performe$ uneEui(ocal acts of
repu$iation amountin3 to an ouster of the cestui Eue trustH @bA such
positi(e acts of repu$iation ha(e been ma$e Fno8n to the cestui Eue trust#
an$ @cA the e(i$ence thereon is clear an$ conclusi(e*94<:


s a rule# ho8e(er# the bur$en of pro(in3 the e7istence of a trust is on the part%
assertin3 its e7istence# an$ such proof must be clear an$ satisfactoril% sho8 the e7istence
of the trust an$ its elements*94/: The presence of the follo8in3 elements must be
pro(e$0 @,A a trustor or settlor 8ho e7ecutes the instrument creatin3 the trustH @4A a
trustee# 8ho is the person e7pressl% $esi3nate$ to carr% out the trustH @5A the trust res#
consistin3 of $ul% i$entifie$ an$ $efinite real propertiesH an$ @-A the cestui Eue trust# or
beneficiaries 8hose i$entit% must be clear*94.: ccor$in3l%# it 8as incumbent upon
petitioner to pro(e the e7istence of the trust relationship* n$ petitioner sa$l% faile$ to
$ischar3e that bur$en*

The e7istence of e7press trusts concernin3 real propert% ma% not be establishe$ b%
parol e(i$ence*94=: It must be pro(en b% some 8ritin3 or $ee$* In this case# the onl%
e(i$ence to support the claim that an e7press trust e7iste$ bet8een the petitioner an$ her
father 8as the self'ser(in3 testimon% of the petitioner* Bare alle3ations $o not constitute
e(i$ence a$eEuate to support a conclusion* The% are not eEui(alent to proof un$er the
Rules of Court*956:

In one case# the Court allo8e$ oral testimon% to pro(e the e7istence of a trust#
8hich ha$ been partiall% performe$* It 8as stresse$ therein that 8hat is important is that
there shoul$ be an intention to create a trust# thus0


&hat is crucial is the intention to create a trust* &hile oftentimes the
intention is manifeste$ b% the trustor in e7press or e7plicit lan3ua3e# such
intention ma% be manifeste$ b% inference from 8hat the trustor has sai$ or
$one# from the nature of the transaction# or from the circumstances
surroun$in3 the creation of the purporte$ trust*

Ho8e(er# an inference of the intention to create a trust# ma$e from
lan3ua3e# con$uct or circumstances# must be ma$e 8ith reasonable
certaint%* It cannot rest on (a3ue# uncertain or in$efinite $eclarations* n
inference of intention to create a trust# pre$icate$ onl% on circumstances#
can be ma$e onl% 8here the% a$mit of no other interpretation*95,:



lthou3h no particular 8or$s are reEuire$ for the creation of an e7press trust# a
clear intention to create a trust must be sho8nH an$ the proof of fi$uciar% relationship
must be clear an$ con(incin3* The creation of an e7press trust must be manifeste$ 8ith
reasonable certaint% an$ cannot be inferre$ from loose an$ (a3ue $eclarations or from
ambi3uous circumstances susceptible of other interpretations*954:

In the case at bench# an intention to create a trust cannot be inferre$ from the
petitionerCs testimon% an$ the atten$ant facts an$ circumstances* The petitioner testifie$
onl% to the effect that her a3reement 8ith her father 8as that she 8ill be 3i(en a share in
the pro$uce of the propert%# thus0


M0 &hat 8as %our a3reement 8ith %our father Crispulo RoDas
8hen %ou left this propert% to himN
0 E(er% time that the% 8ill maFe copra# the% 8ill 3i(e a share*

M0 In 8hat particular part in Min$anao 9$i$: %ou sta% 8ith %our
husban$N
0 Bansalan# Da(ao $el Sur*

M0 n$ 8hile %ou 8ere in Bansalan# Da(ao $el Sur# $i$ Crispolo
RoDas compl% 8ith his obli3ation of 3i(in3 %our share the procee$s of the
lan$N
0 &hen he 8as still ali(e# he 3a(e us e(er% three months
sometimes P466*66 an$ sometimes P566*66*955:

This alle3ation# stan$in3 alone as it $oes# is ina$eEuate to establish the e7istence of a trust
because profit'sharin3 per se# $oes not necessaril% translate to a trust relation* It coul$
also be present in other relations# such as in $eposit*

&hat $istin3uishes a trust from other relations is the separation of the le3al title
an$ eEuitable o8nership of the propert%* In a trust relation# le3al title is (este$ in the
fi$uciar% 8hile eEuitable o8nership is (este$ in a cestui Eue trust* Such is not true in this
case* The petitioner alle3e$ in her complaint that the ta7 $eclaration of the lan$ 8as
transferre$ to the name of Crispulo 8ithout her consent* Ha$ it been her intention to
create a trust an$ maFe Crispulo her trustee# she 8oul$ not ha(e ma$e an issue out of this
because in a trust a3reement# le3al title is (este$ in the trustee* The trustee 8oul$
necessaril% ha(e the ri3ht to transfer the ta7 $eclaration in his name an$ to pa% the ta7es
on the propert%* These acts 8oul$ be treate$ as beneficial to the cestui Eue trust an$
8oul$ not amount to an a$(erse possession*95-:

Neither can it be $e$uce$ from the circumstances of the case that a resultin3 trust
8as create$* resultin3 trust is a species of implie$ trust that is presume$ al8a%s to ha(e
been contemplate$ b% the parties# the intention as to 8hich can be foun$ in the nature of
their transaction althou3h not e7presse$ in a $ee$ or instrument of con(e%ance*
resultin3 trust is base$ on the eEuitable $octrine that it is the more (aluable consi$eration
than the le3al title that $etermines the eEuitable interest in propert%*95;:

&hile implie$ trusts ma% be pro(e$ b% oral e(i$ence# the e(i$ence must be
trust8orth% an$ recei(e$ b% the courts 8ith e7treme caution# an$ shoul$ not be ma$e to
rest on loose# eEui(ocal or in$efinite $eclarations* Trust8orth% e(i$ence is reEuire$
because oral e(i$ence can easil% be fabricate$*95<: In or$er to establish an implie$ trust
in real propert% b% parol e(i$ence# the proof shoul$ be as full% con(incin3 as if the acts
3i(in3 rise to the trust obli3ation are pro(en b% an authentic $ocument* n implie$ trust#
in fine# cannot be establishe$ upon (a3ue an$ inconclusi(e proof*95/: In the present
case# there 8as no e(i$ence of an% transaction bet8een the petitioner an$ her father from
8hich it can be inferre$ that a resultin3 trust 8as inten$e$*

In li3ht of the $isEuisitions# 8e hol$ that there 8as no e7press trust or resultin3
trust establishe$ bet8een the petitioner an$ her father* Thus# in the absence of a trust
relation# 8e can onl% conclu$e that CrispuloCs uninterrupte$ possession of the subDect
propert% for -= %ears# couple$ 8ith the performance of acts of o8nership# such as
pa%ment of real estate ta7es# ripene$ into o8nership* The statutor% perio$ of prescription
commences 8hen a person 8ho has neither title nor 3oo$ faith# secures a ta7 $eclaration
in his name an$ ma%# therefore# be sai$ to ha(e a$(ersel% claime$ o8nership of the lot*
95.: &hile ta7 $eclarations an$ receipts are not conclusi(e e(i$ence of o8nership an$
$o not pro(e title to the lan$# ne(ertheless# 8hen couple$ 8ith actual possession# the%
constitute e(i$ence of 3reat 8ei3ht an$ can be the basis of a claim of o8nership throu3h
prescription*95=: Moreo(er# Section -, of ct No* ,=6 allo8s a$(erse possession in an%
character to ripen into o8nership after the lapse of ten %ears* There coul$ be prescription
un$er the sai$ section e(en in the absence of 3oo$ faith an$ Dust title*9-6:

ll the fore3oin3 not8ithstan$in3# e(en if 8e sustain petitionerCs claim that she
8as the o8ner of the propert% an$ that she constitute$ a trust o(er the propert% 8ith her
father as the trustee# such a fin$in3 still 8oul$ not a$(ance her case*

ssumin3 that such a relation e7iste$# it terminate$ upon CrispuloCs $eath in
,=/.* trust terminates upon the $eath of the trustee 8here the trust is personal to the
trustee in the sense that the trustor inten$e$ no other person to a$minister it*9-,: If
Crispulo 8as in$ee$ appointe$ as trustee of the propert%# it cannot be sai$ that such
appointment 8as inten$e$ to be con(e%e$ to the respon$ent or an% of CrispuloCs other
heirs* Hence# after CrispuloCs $eath# the respon$ent ha$ no ri3ht to retain possession of
the propert%* t such point# a constructi(e trust 8oul$ be create$ o(er the propert% b%
operation of la8* &here one mistaFenl% retains propert% 8hich ri3htfull% belon3s to
another# a constructi(e trust is the proper reme$ial $e(ice to correct the situation*9-4:

constructi(e trust is one create$ not b% an% 8or$ or phrase# either e7pressl% or
implie$l%# e(incin3 a $irect intention to create a trust# but one 8hich arises in or$er to
satisf% the $eman$s of Dustice* It $oes not come about b% a3reement or intention but in the
main b% operation of la8# construe$ a3ainst one 8ho# b% frau$# $uress or abuse of
confi$ence# obtains or hol$s the le3al ri3ht to propert% 8hich he ou3ht not# in eEuit% an$
3oo$ conscience# to hol$*9-5:

s pre(iousl% state$# the rule that a trustee cannot# b% prescription# acEuire
o8nership o(er propert% entruste$ to him until an$ unless he repu$iates the trust# applies
to e7press trusts an$ resultin3 implie$ trusts* Ho8e(er# in constructi(e implie$ trusts#
prescription ma% super(ene e(en if the trustee $oes not repu$iate the relationship*
Necessaril%# repu$iation of the sai$ trust is not a con$ition prece$ent to the runnin3 of the
prescripti(e perio$*9--: constructi(e trust# unliFe an e7press trust# $oes not emanate
from# or 3enerate a fi$uciar% relation* &hile in an e7press trust# a beneficiar% an$ a
trustee are linFe$ b% confi$ential or fi$uciar% relations# in a constructi(e trust# there is
neither a promise nor an% fi$uciar% relation to speaF of an$ the so'calle$ trustee neither
accepts an% trust nor inten$s hol$in3 the propert% for the beneficiar%*9-;: The relation of
trustee an$ cestui Eue trust $oes not in fact e7ist# an$ the hol$in3 of a constructi(e trust is
for the trustee himself# an$ therefore# at all times a$(erse*

In a$$ition# a number of other factors militate a3ainst the petitionerCs case* Girst#
the petitioner is estoppe$ from assertin3 o8nership o(er the subDect propert% b% her
failure to protest its inclusion in the estate of Crispulo* The C# thus# correctl% obser(e$
that0

E(en in the probate procee$in3s institute$ b% the heirs of Crispulo
RoDas# 8hich inclu$e$ her as a $au3hter of the first marria3e# Ca>e?o
ne(er conteste$ the inclusion of the conteste$ propert% in the estate of her
father* She e(en participate$ in the proDect of partition of her fatherCs
estate 8hich 8as appro(e$ b% the probate court in ,=.-* fter personall%
recei(in3 her share in the procee$s of the estate for ,4 %ears# she su$$enl%
claims o8nership of part of her fatherCs estate in ,==/*

The principle of estoppel in pais applies 8hen '' b% oneCs acts# representations#
a$missions# or silence 8hen there is a nee$ to speaF out '' one# intentionall% or throu3h
culpable ne3li3ence# in$uces another to belie(e certain facts to e7istH an$ the latter
ri3htfull% relies an$ acts on such belief# so as to be preDu$ice$ if the former is permitte$
to $en% the e7istence of those facts*9-<: Such a situation obtains in the instant case*

Secon$# the action is barre$ b% laches* The petitioner alle3e$l% $isco(ere$ that the
propert% 8as bein3 possesse$ b% the respon$ent in ,=.6*9-/: Ho8e(er# it 8as onl% in
,==/ that she file$ the action to reco(er the propert%* Laches is ne3li3ence or omission to
assert a ri3ht 8ithin a reasonable time# 8arrantin3 a presumption that the part% entitle$ to
it has either aban$one$ or $ecline$ to assert it*9-.:

Ginall%# the respon$ent asserts that the court a Euo ou3ht to ha(e $ismisse$ the
complaint for failure to implea$ the other heirs 8ho are in$ispensable parties* &e a3ree*
&e note that the complaint file$ b% the petitioner sou3ht to reco(er o8nership# not Dust
possession of the propert%H thus# the suit is in the nature of an action for recon(e%ance* It
is a7iomatic that o8ners of propert% o(er 8hich recon(e%ance is asserte$ are
in$ispensable parties* &ithout them bein3 implea$e$# no relief is a(ailable# for the court
cannot ren$er (ali$ Du$3ment* Bein3 in$ispensable parties# their absence in the suit
ren$ers all subseEuent actions of the trial court null an$ (oi$ for 8ant of authorit% to act#
not onl% as to the absent parties but e(en as to those present* Thus# 8hen in$ispensable
parties are not before the court# the action shoul$ be $ismisse$*9-=: t an% rate# a
resolution of this issue is no8 purel% aca$emic in li3ht of our fin$in3 that the complaint
is alrea$% barre$ b% prescription# estoppel an$ laches*

&HEREGORE# premises consi$ere$# the petition is DENIED* The Decision of the
Court of ppeals# $ate$ September /# 4666# an$ Resolution $ate$ Ma% =# 466,#
areGGIRMED*

SO ORDERED*



+*R* No* =/==; )anuar% 4,# ,==5
PHILIPPINE NTIONL BNO# petitioner#
(s*
CO2RT OG PPELS ND B*P* MT ND CO*# INC*# respon$ents*
Rolan$ * Nie$o for petitioner*
BenDamin C* Santos La8 Office for respon$ent*

ROMERO# )*0
Rarel% is this Court confronte$ 8ith a case callin3 for the $elineation in broa$ stroFes of
the $istinctions bet8een such closel% allie$ concepts as the Euasi'contract calle$ Lsolutio
in$ebitiL un$er the (enerable Spanish Ci(il Co$e an$ the species of implie$ trust
$enominate$ Lconstructi(e trusts#L commonl% re3ar$e$ as of n3lo'merican ori3in*
Such a case is the one presente$ to us no8 8hich has hi3hli3hte$ more of the affinit% an$
less of the $issimilarit% bet8een the t8o concepts as to lea$ the le3al scholar into the
error of interchan3in3 the t8o* Presente$ belo8 are the factual circumstances that brou3ht
into Du7taposition the t8in institutions of the Ci(il La8 Euasi'contract an$ the n3lo'
merican trust*
Pri(ate Respon$ent B*P* Mata P Co* Inc* @MataA# is a pri(ate corporation en3a3e$ in
pro(i$in3 3oo$s an$ ser(ices to shippin3 companies* Since ,=<<# it has acte$ as a
mannin3 or cre8in3 a3ent for se(eral forei3n firms# one of 8hich is Star Oist Goo$s# Inc*#
2S @Star OistA* s part of their a3reement# Mata maFes a$(ances for the cre8Qs me$ical
e7penses# National SeamanQs Boar$ fees# SeamanQs &elfare fun$# an$ stan$b% fees an$
for the cre8Qs basic personal nee$s* SubseEuentl%# Mata sen$s monthl% billin3s to its
forei3n principal Star Oist# 8hich in turn reimburses Mata b% sen$in3 a tele3raphic
transfer throu3h banFs for cre$it to the latterQs account*
3ainst this bacF3roun$# on Gebruar% 4,# ,=/;# Securit% Pacific National BanF @SEPCA
of Los n3eles 8hich ha$ an a3enc% arran3ement 8ith Philippine National BanF @PNBA#
transmitte$ a cable messa3e to the International Department of PNB to pa% the amount of
2SR,-#666 to Mata b% cre$itin3 the latterQs account 8ith the Insular BanF of sia an$
merica @IBA# per or$er of Star Oist* 2pon receipt of this cable$ messa3e on Gebruar%
4-# ,=/;# PNBQs International Department notice$ an error an$ sent a ser(ice messa3e to
SEPC BanF* The latter replie$ 8ith instructions that the amount of 2SR,-#666 shoul$
onl% be for 2SR,#-66*
On the basis of the cable messa3e $ate$ Gebruar% 4-# ,=/; CashierQs ChecF No* 4<=;44
in the amount of 2SR,#-66 @P=#//4*=;A representin3 reimbursement from Star Oist# 8as
issue$ b% the Star Oist for the account of Mata on Gebruar% 4;# ,=/; throu3h the Insular
BanF of sia an$ merica @IBA*
Ho8e(er# fourteen $a%s after or on March ,,# ,=/;# PNB effecte$ another pa%ment
throu3h CashierQs ChecF No* 4/64/, in the amount of 2SR,-#666 @P=/#./.*<6A
purportin3 to be another transmittal of reimbursement from Star Oist# pri(ate respon$entQs
forei3n principal*
Si7 %ears later# or more specificall%# on Ma% ,5# ,=.,# PNB reEueste$ Mata for refun$ of
2SR,-#666 @P=/#./.*<6A after it $isco(ere$ its error in effectin3 the secon$ pa%ment*
On Gebruar% -# ,=.4# PNB file$ a ci(il case for collection an$ refun$ of 2SR,-#666
a3ainst Mata ar3uin3 that base$ on a constructi(e trust un$er rticle ,-;< of the Ci(il
Co$e# it has a ri3ht to reco(er the sai$ amount it erroneousl% cre$ite$ to respon$ent Mata*
,
fter trial# the Re3ional Trial Court of Manila ren$ere$ Du$3ment $ismissin3 the
complaint rulin3 that the instant case falls sEuarel% un$er rticle 4,;- on solutio in$ebiti
an$ not un$er rticle ,-;< on constructi(e trust* The lo8er court rule$ out constructi(e
trust# appl%in3 strictl% the technical $efinition of a trust as La ri3ht of propert%# real or
personal# hel$ b% one part% for the benefit of anotherH that there is a fi$uciar% relation
bet8een a trustee an$ a cestui Eue trustas re3ar$s certain propert%# real# personal# mone%
or choses in action*L 4
In affirmin3 the lo8er court# the appellate court a$$e$ in its opinion that un$er rticle
4,;- on solutio in$ebiti# the person 8ho maFes the pa%ment is the one 8ho commits the
mistaFe (is'a'(is the recipient 8ho is una8are of such a mistaFe* 5 ConseEuentl%#
recipient is $ut% boun$ to return the amount pai$ b% mistaFe* But the appellate court
conclu$e$ that petitionerQs $eman$ for the return of 2SR,-#666 cannot prosper because
its cause of action ha$ alrea$% prescribe$ un$er rticle ,,-;# para3raph 4 of the Ci(il
Co$e 8hich states0
The follo8in3 actions must be commence$ 8ithin si7 %ears0
777 777 777
@4A 2pon a Euasi'contract*
This is because petitionerQs complaint 8as file$ onl% on Gebruar% -# ,=.4# almost
se(en %ears after March ,,# ,=/; 8hen petitioner mistaFenl% ma$e pa%ment to
pri(ate respon$ent*
Hence# the instant petition for certiorari procee$in3 seeFin3 to annul the $ecision of the
appellate court on the basis that MataQs obli3ation to return 2SR,-#666 is 3o(erne$# in the
alternati(e# b% either rticle ,-;< on constructi(e trust or rticle 4,;- of the Ci(il Co$e
on Euasi'contract* -
rticle ,-;< of the Ci(il Co$e pro(i$es0
If propert% is acEuire$ throu3h mistaFe or frau$# the person obtainin3 it is# b%
force of la8# consi$ere$ a trustee of an implie$ trust for the benefit of the person
from 8hom the propert% comes*
On the other han$# rticle 4,;- states0
If somethin3 is recei(e$ 8hen there is no ri3ht to $eman$ it# an$ it 8as un$ul%
$eli(ere$ throu3h mistaFe# the obli3ation to return it arises*
Petitioner naturall% opts for an interpretation un$er constructi(e trust as its action file$ on
Gebruar% -# ,=.4 can still prosper# as it is 8ell 8ithin the prescripti(e perio$ of ten @,6A
%ears as pro(i$e$ b% rticle ,,--# para3raph 4 of the Ci(il Co$e* ;
If it is to be construe$ as a case of pa%ment b% mistaFe or solutio in$ebiti# then the
prescripti(e perio$ for Euasi'contracts of si7 %ears applies# as pro(i$e$ b% rticle ,,-;*
s pointe$ out b% the appellate court# petitionerQs cause of action thereun$er shall ha(e
prescribe$# ha(in3 been brou3ht almost se(en %ears after the cause of action accrue$*
Ho8e(er# e(en assumin3 that the instant case constitutes a constructi(e trust an$
prescription has not set in# the present action has alrea$% been barre$ b% laches*
To recall# trusts are either e7press or implie$* &hile e7press trusts are create$ b% the
intention of the trustor or of the parties# implie$ trusts come into bein3 b% operation of
la8* < Implie$ trusts are those 8hich# 8ithout bein3 e7presse$# are $e$ucible from the
nature of the transaction as matters of intent or 8hich are superin$uce$ on the transaction
b% operation of la8 as matters of eEuit%# in$epen$entl% of the particular intention of the
parties* /
In turn# implie$ trusts are sub$i(i$e$ into resultin3 an$ constructi(e trusts* . resultin3
trust is a trust raise$ b% implication of la8 an$ presume$ al8a%s to ha(e been
contemplate$ b% the parties# the intention of 8hich is foun$ in the nature of the
transaction# but not e7presse$ in the $ee$ or instrument of con(e%ance* = E7amples of
resultin3 trusts are foun$ in rticles ,--. to ,-;; of the Ci(il Co$e* ,6 On the other
han$# a constructi(e trust is one not create$ b% 8or$s either e7pressl% or implie$l%# but b%
construction of eEuit% in or$er to satisf% the $eman$s of Dustice* n e7ample of a
constructi(e trust is rticle ,-;< Euote$ abo(e* ,,
$eeper anal%sis of rticle ,-;< re(eals that it is not a trust in the technical sense ,4 for
in a t%pical trust# confi$ence is repose$ in one person 8ho is name$ a trustee for the
benefit of another 8ho is calle$ the cestui Eue trust# respectin3 propert% 8hich is hel$ b%
the trustee for the benefit of the cestui Eue trust* ,5 constructi(e trust# unliFe an e7press
trust# $oes not emanate from# or 3enerate a fi$uciar% relation* &hile in an e7press trust# a
beneficiar% an$ a trustee are linFe$ b% confi$ential or fi$uciar% relations# in a
constructi(e trust# there is neither a promise nor an% fi$uciar% relation to speaF of an$ the
so'calle$ trustee neither accepts an% trust nor inten$s hol$in3 the propert% for the
beneficiar%* ,-
In the case at bar# Mata# in recei(in3 the 2SR,-#666 in its account throu3h IB# ha$ no
intent of hol$in3 the same for a suppose$ beneficiar% or cestui Eue trust# namel% PNB*
But un$er rticle ,-;<# the la8 construes a trust# namel% a constructi(e trust# for the
benefit of the person from 8hom the propert% comes# in this case PNB# for reasons of
Dustice an$ eEuit%*
t this Duncture# a historical note on the co$al pro(isions on trust an$ Euasi'contracts is in
or$er*
Ori3inall%# un$er the Spanish Ci(il Co$e# there 8ere onl% t8o Fin$s of Euasi contracts0
ne3otiorum 3estio an$ solutio in$ebiti* But the Co$e Commission# min$ful of the position
of the eminent Spanish Durist# Manresa# that Lthe number of Euasi contracts ma% be
in$efinite#L a$$e$ Section 5 entitle$ LOther Muasi'Contracts*L ,;
Moreo(er# e(en as rticle 4,-4 of the Ci(il Co$e $efines a Euasi'contract# the succee$in3
article pro(i$es that0 LThe pro(isions for Euasi'contracts in this Chapter $o not e7clu$e
other Euasi'contracts 8hich ma% come 8ithin the pur(ie8 of the prece$in3 article*L ,<
In$ubitabl%# the Ci(il Co$e $oes not confine itself e7clusi(el% to the Euasi'contracts
enumerate$ from rticles 4,-- to 4,/; but is open to the possibilit% that# absent a pre'
e7istin3 relationship# there bein3 neither crime nor Euasi'$elict# a Euasi'contractual
relation ma% be force$ upon the parties to a(oi$ a case of unDust enrichment* ,/ There
bein3 no e7press consent# in the sense of a meetin3 of min$s bet8een the parties# there is
no contract to speaF of* Ho8e(er# in (ie8 of the peculiar circumstances or factual
en(ironment# consent is presume$ to the en$ that a recipient of benefits or fa(ors
resultin3 from la8ful# (oluntar% an$ unilateral acts of another ma% not be unDustl%
enriche$ at the e7pense of another*
2n$oubte$l%# the instant case fulfills the in$ispensable reEuisites of solutio in$ebiti as
$efine$ in rticle 4,;- that somethin3 @in this case mone%A has been recei(e$ 8hen there
8as no ri3ht to $eman$ it an$ @4A the same 8as un$ul% $eli(ere$ throu3h mistaFe* There
is a presumption that there 8as a mistaFe in the pa%ment Lif somethin3 8hich ha$ ne(er
been $ue or ha$ alrea$% been pai$ 8as $eli(ere$H but he from 8hom the return is claime$
ma% pro(e that the $eli(er% 8as ma$e out of liberalit% or for an% other Dust cause*L ,.
In the case at bar# a pa%ment in the correcte$ amount of 2SR,#-66 throu3h CashierQs
ChecF No* 4<=;44 ha$ alrea$% been ma$e b% PNB for the account of Mata on Gebruar%
4;# ,=/;* Stran3el%# ho8e(er# fourteen $a%s later# PNB effecte$ another pa%ment throu3h
CashierQs ChecF No* 4/64/, in the amount of 2SR,-#666# this time purportin3 to be
another transmittal of reimbursement from Star Oist# pri(ate respon$entQs forei3n
principal*
&hile the principle of un$ue enrichment or solutio in$ebiti# is not ne8# ha(in3 been
incorporate$ in the subDect on Euasi'contracts in Title SVI of BooF IV of the Spanish
Ci(il Co$e entitle$ LObli3ations incurre$ 8ithout contract#L ,=the chapter on Trusts is
fairl% recent# ha(in3 been intro$uce$ b% the Co$e Commission in ,=-=* lthou3h the
concept of trusts is no8here to be foun$ in the Spanish Ci(il Co$e# the framers of our
present Ci(il Co$e incorporate$ implie$ trusts# 8hich inclu$es constructi(e trusts# on top
of Euasi'contracts# both of 8hich embo$% the principle of eEuit% abo(e strict le3alism* 46
In anal%?in3 the la8 on trusts# it 8oul$ be instructi(e to refer to n3lo'merican
Durispru$ence on the subDect* 2n$er merican La8# a court of eEuit% $oes not consi$er a
constructi(e trustee for all purposes as thou3h he 8ere in realit% a trusteeH althou3h it 8ill
force him to return the propert%# it 8ill not impose upon him the numerous fi$uciar%
obli3ations or$inaril% $eman$e$ from a trustee of an e7press trust* 4, It must be borne in
min$ that in an e7press trust# the trustee has acti(e $uties of mana3ement 8hile in a
constructi(e trust# the $ut% is merel% to surren$er the propert%*
Still appl%in3 merican case la8# Euasi'contractual obli3ations 3i(e rise to a personal
liabilit% or$inaril% enforceable b% an action at la8# 8hile constructi(e trusts are
enforceable b% a procee$in3 in eEuit% to compel the $efen$ant to surren$er specific
propert%* To be sure# the $istinction is more proce$ural than substanti(e* 44
Gurther reflection on these concepts re(eals that a constructi(e LtrustL is as much a
misnomer as a LEuasi'contract#L so far remo(e$ are the% from trusts an$ contracts proper#
respecti(el%* In the case of a constructi(e trust# as in the case of Euasi'contract# a
relationship is Lforce$L b% operation of la8 upon the parties# not because of an% intention
on their part but in or$er to pre(ent unDust enrichment# thus 3i(in3 rise to certain
obli3ations not 8ithin the contemplation of the parties* 45
lthou3h 8e are not Euite in accor$ 8ith the opinion that Lthe trusts Fno8n to merican
an$ En3lish eEuit% Durispru$ence are $eri(e$ from the fi$ei commissa of the Roman
La8#L 4- it is safe to state that their roots are firml% 3roun$e$ on such Ci(il La8
principles are e7presse$ in the Latin ma7im# LNemo cum alterius $etrimento locupletari
potest#L4; particularl% the concept of constructi(e trust*
Returnin3 to the instant case# 8hile petitioner ma% in$ee$ opt to a(ail of an action to
enforce a constructi(e trust or the Euasi'contract of solutio in$ebiti# it has been $epri(e$
of a choice# for prescription has effecti(el% blocFe$ Euasi'contract as an alternati(e#
lea(in3 onl% constructi(e trust as the feasible option*
Petitioner ar3ues that the lo8er an$ appellate courts cannot in$ul3e in semantics b%
hol$in3 that in rticle ,-;< the recipient commits the mistaFe 8hile in rticle 4,;-# the
recipient commits no mistaFe* 4< On the other han$# pri(ate respon$ent# in(oFin3 the
appellate courtQs reasonin3# 8oul$ impress upon us that un$er rticle ,-;<# there can be
no mutual mistaFe* ConseEuentl%# pri(ate respon$ent conten$s that the case at bar is one
of solutio in$ebiti an$ not a constructi(e trust*
&e a3ree 8ith petitionerQs stan$ that un$er rticle ,-;<# the la8 $oes not maFe an%
$istinction since mutual mistaFe is a possibilit% on either si$e T on the si$e of either the
3rantor or the 3rantee* 4/ Thus# it 8as error to conclu$e that in a constructi(e trust# onl%
the person obtainin3 the propert% commits a mistaFe* This is because it is also possible
that a 3rantor# liFe PNB in the case at han$# ma% commit the mistaFe*
Procee$in3 no8 to the issue of 8hether or not petitioner ma% still claim the 2SR,-#666 it
erroneousl% pai$ pri(ate respon$ent un$er a constructi(e trust# 8e rule in the ne3ati(e*
lthou3h 8e are a8are that onl% se(en @/A %ears lapse$ after petitioner erroneousl%
cre$ite$ pri(ate respon$ent 8ith the sai$ amount an$ that un$er rticle ,,--# petitioner is
8ell 8ithin the prescripti(e perio$ for the enforcement of a constructi(e or implie$ trust#
8e rule that petitionerQs claim cannot prosper since it is alrea$% barre$ b% laches* It is a
8ell'settle$ rule no8 that an action to enforce an implie$ trust# 8hether resultin3 or
constructi(e# ma% be barre$ not onl% b% prescription but also b% laches* 4.
&hile prescription is concerne$ 8ith the fact of $ela%# laches $eals 8ith the effect of
unreasonable $ela%* 4= It is ama?in3 that it tooF petitioner almost se(en %ears before it
$isco(ere$ that it ha$ erroneousl% pai$ pri(ate respon$ent* Petitioner 8oul$ attribute its
mistaFe to the hea(% (olume of international transactions han$le$ b% the Cable an$
Remittance Di(ision of the International Department of PNB* Such specious reasonin3 is
not persuasi(e* It is unbelie(able for a banF# an$ a 3o(ernment banF at that# 8hich
re3ularl% publishes its balance$ financial statements annuall% or more freEuentl%# b% the
Euarter# to notice its error onl% se(en %ears later* s a uni(ersal banF 8ith 8orl$8i$e
operations# PNB cannot affor$ to commit such costl% mistaFes* Moreo(er# as bet8een
parties 8here ne3li3ence is imputable to one an$ not to the other# the former must
perforce bear the conseEuences of its ne3lect* Hence# petitioner shoul$ bear the cost of its
o8n ne3li3ence*
&HEREGORE# the $ecision of the Court of ppeals $ismissin3 petitionerQs claim a3ainst
pri(ate respon$ent is GGIRMED*
Costs a3ainst petitioner*
SO ORDERED*
GIRST DIVISION
9+*R* No* ,-.,.6* December ,=# 466,:
CTLIN VD* DE RET2ERTO as sur(i(in3 8i$o8 of the late PNGILO
RET2ERTOH LORETO RET2ERTO# represente$ b% his sur(i(in3 heirs namel%0
ROMEO RET2ERTOH NTONI RET2ERTO# NRCIS RET2ERTO#
COR"ON RET2ERTO# an$ PTROCINIO RET2ERTOH +2DENCIO#
GRNCISC# CR2"# GRNCISCO# EGI+ENI an$ +2ILLERMO# all
surname$ RET2ERTOH an$ Spouses )OSE an$ ROS +ESLEM# petitioners#
(s*N+ELO P* BR" an$ MERLIND BR"# respon$ents*
D E C I S I O N
OP2NN# )*0
This is a petition for re(ie8 on certiorari of the $ecision of the Court of ppeals#
$ate$ December 4=# 4666 in C'+R CV No* ;==/;# affirmin3 the $ecision of the
Re3ional Trial Court# Branch ;;# of Man$aue Cit% in a case for Euietin3 of title 8ith
$ama3es file$ b% herein respon$ents n3elo an$ Melin$a Bar? a3ainst petitioners# as
sur(i(in3 heirs of the late Panfilo Retuerto* The RTCCs $ecision $eclare$ respon$ents as
the absolute o8ners of the lot subDect of the liti3ation*
The facts as foun$ b% the Court of ppeals an$ a$mitte$ b% herein petitioners are as
follo8s0
Durin3 the perio$ from September to October# ,=,,# a sur(e% 8as ma$e of a parcel of
lan$# locate$ in Man$aue# Cebu# i$entifie$ as ILot No* .=<J of Plan No* II';,4,# a part
of the IHacien$a $e Man$aueJ occupie$ b% the Spouses Esteban Pere? an$ Loren?a
Sanche?* The sur(e% 8as amen$e$ $urin3 the perio$ from No(ember# ,=4< to March 4,#
,=4/# i$entifie$ as men$ment No* 4# p'<4-5# 8ith an area of 46#-.< sEuare meters#
bearin3 the follo8in3 boun$aries0
INorth8est ' Lots ,4;, an$ ,4;4 @Remi3io )u$illa an$ Manuel )u$illaAH
Southeast ' Lot .=- @+re3orio Pere?AH
South8est ' Lot .=;H
North8est ' Lots .=/ an$ .=. @)uan Pere?AJ
&hen the Spouses Esteban Pere? an$ Loren?a Sanche? $ie$ intestate# their ri3hts o(er the
propert% 8ere inherite$ b% their $au3hter# )uana Pere?# marrie$ to Numeriano Bar?# 8ho
then $eclare$ the propert%# for ta7ation purposes# un$er her name# un$er Ta7 Declaration
No* 4,=<=# but 8ith an area of onl% ,5#,<6 sEuare meters# more or less# boun$e$ on the
north# b% a piece of lan$# un$er the name of Pampila @sicA Retuerto# as follo8s0
North ' Pampila Retuerto
South ' Vi$al )u$illa an$ Catalina Ceni?a
East ' Paula Pere?
&est ' Gelipe Ber$iDo
On pril ,<# ,=4=# )uana Pere?# 8i$o8 of Numeriano Bar?# e7ecute$ a $ee$ confirmin3
her e7ecution of a IDee$ of bsolute Sale#J in fa(or of Panfilo Retuerto# marrie$ to
Catalina Ceni?a# o(er a parcel of lan$# locate$ in Barrio Pa3sabun3an# Man$aue# Cebu#
i$entifie$ as Lot No* .=<'# a portion of the IHacien$a $e Man$aue#J Cebu# 8ith an
appro7imate area of 4#;6; sEuare meters# $escribe$ as follo8s0
On the North ' Reme3io )u$illa# measurin3 4=*/4 sE*m*
On the East ' Paula Pere?# measurin3 .;*5; sE*m*
On the South' )uana Pere?# measurin3 4=*/4 sE*m*
On the &est ' Teofista Pere?# measurin3 .-*54 sE*m*
Ho8e(er# on pril 4<# ,=5;# Panfilo Retuerto purchase$ the aforementione$ parcel of
lan$# this time# from the rchbishop of Cebu# un$er a IDee$ of bsolute Sale#J for the
price of P,;6*66 @E7hibit I-JA an$ $eclare$ the same for ta7ation purposes un$er Ta7
Declaration No* 5-<;4# effecti(e ,=5/ @E7hibit I4JA*
In the meantime# the San Carlos Seminar% in Cebu file$ a Petition 8ith the then )u?3a$o
$e Primera Instancia in Cebu @no8 the Re3ional Trial CourtA entitle$ an$ $ocFete$ IEl
Seminario $e San Carlos $e Cebu#J Solicitante# E7pe$iente No* 5# +*L*R*O* Recor$ -656
for the issuance of titles o(er se(eral parcels of lan$ in IHacien$a $e Man$aue#J
inclu$in3 Lot No* .=<'# earlier purchase$ b% Panfilo Retuerto from )uana Pere? an$
from the rchbishop of Cebu* In u3ust# ,=5/# the Court promul3ate$ a Decision
fin$in3 an$ $eclarin3 Panfilo Retuerto the o8ner of the sai$ lot @E7hibit I=JA* On )ul%
44# ,=-6# the Court issue$ an Or$er $irectin3 the +eneral $el Re3istro $e Terrenos @later
the Lan$ Re3istration CommissionA for the issuance of the appropriate Decree in fa(or of
Panfilo Retuerto o(er the sai$ parcel of lan$* Ho8e(er# no such Decree 8as issue$ as
$irecte$ b% the Court because# b% December .# ,=-,# the Secon$ &orl$ &ar ensue$ in
the Pacific* Ho8e(er# Panfilo Retuerto faile$ to secure the appropriate $ecree after the
8ar*
T8o @4A $eca$es elapse$* In the meantime# )uana Pere? Bar? $ie$ intestate an$ 8as
sur(i(e$ b% her son# Pe$ro Bar?# 8ho file$ an application# 8ith the then Court of Girst
Instance of Cebu# sometime in ,=<<# for the confirmation of his title o(er Lot .=< of Plan
No* II';,4,# entitle$ an$ $ocFete$ as IIN THE MTTER OG THE RE+ISTRTION OG
TITLE# Pe$ro Bar?# pplicant#J Lan$ Re3istration Case No* N';4=# LRC Recor$ No*
N4-/5<* The Spouses Panfilo Retuerto $i$ not file an% opposition to the application*
fter appropriate procee$in3s# the Court promul3ate$ a $ecision in fa(or of Pe$ro Bar?
$eclarin3 him the la8ful o8ner of the sai$ propert%* On u3ust ,.# ,=<<# Decree No* N'
,,64./ 8as issue$ o(er the propert%# in fa(or of Pe$ro Bar?# on the basis of 8hich
Ori3inal Certificate of Title No* ;4, 8as issue$# on No(ember ,5# ,=<.# b% the Re3ister
of Dee$s o(er the propert% @E7hibit IJA* The propert% 8as then sub$i(i$e$ into four @-A
lots namel%# Lot .=<'# 8ith an area of ;6/ sEuare meters @E7hibit IB';JA# Lot .=<'B#
8ith an area of 4#,-4 sEuare meters @E7hibit IB'<JA# Lot .=<'C# 8ith an area of ;#;.6
sEuare meters @E7hibit IB'/JA# an$ Lot .=<'D# 8ith an area of ,4#4;5 sEuare meters
@E7hibit B'.JA* On October ,.# ,=</# Pe$ro Bar? e7ecute$ a IDee$ of bsolute SaleJ
o(er sub$i(ision Lot .=<'C in fa(or of )ose +esalem for P/#666*66* On the basis of the
sai$ $ee$# Ori3inal Certificate of Title 8as partiall% cancelle$ an$# in lieu thereof#
Transfer Certificate of Title No* /;6= 8as issue$ o(er sai$ lot in fa(or of the (en$ee*
In the interim# Panfilo Retuerto $eclare$ the propert%# co(ere$ b% Ta7 Declaration No*
5-<;4# un$er his name# un$er Ta7 Declaration No* ;-=<6# effecti(e ,=/- @E7hibit I5JA*
SubseEuentl%# Panfilo Retuerto $ie$ intestate# on December 4=# ,=/;# an$ 8as sur(i(e$
b% his 8i$o8# Catalina Retuerto an$ their chil$ren# namel% +au$encio Retuerto# Loreto
Retuerto# Grancisca Retuerto# Grancisco Retuerto# Efi3enia Retuerto an$ +uillerma
Retuerto* The sai$ heirs e7ecute$# on )anuar% -# ,=/<# IE7traDu$icial Settlement an$ Sale
of the Estate of Panfilo RetuertoJ a$Du$icatin3 unto themsel(es# as o8ners# the sai$
propert% an$ $ee$in3 the same unto Loreto Retuerto a portion thereof# 8ith an area of
,#/65 sEuare meters# an$ the rest of the propert%# 8ith an area of --6 sEuare meters# to
Efi3enia Retuerto# as follo8s0
IGOR OR TO LORETO RET2ERTO0 Ua portion of the abo(e $escribe$ parcel of lan$
containin3 an area of ONE THO2SND SEVEN H2NDRED T&O @,#/64A SM2RE
METERS an$ boun$e$ b% the follo8in30 on the Northeast b% Pa3sabun3an Roa$H on the
Southeast b% Lot .=<H on the North8est b% Lot .=/H an$ on the South8est b% the portion
sol$ to Efi3enia RetuertoH
GOR OR TO EGI+ENI RET2ERTO0 Ua portion of the parcel of lan$ $escribe$ in
para3raph no* / hereof containin3 an area of GO2R H2NDRED GORT1 @--6A SM2RE
METERS an$ boun$e$ as follo8s0 on the Northeast b% the portion sol$ to Loreto
RetuertoH on the Southeast b% Lot .=<H on the North8est b% Lot .=/ an$ on the
South8est b% Lot .=<*J @at pa3e 5.# Recor$sA
Loreto Retuerto an$ Efi3enia Retuerto then $eclare$ the propert%# for ta7ation purposes#
un$er their names# un$er Ta7 Declaration No* <=6.-# effecti(e ,=/< @E7hibit I/JA* The
propert% co(ere$ b% Ta7 Declaration No* <=6.- 8as sub$i(i$e$ into t8o @4A lots# one
8ith an area of --6 sEuare meters# an$ the other# 8ith an area of ,#/64 sEuare meters*
Efi3enia Retuerto $eclare$ the propert%# 8ith an area of --6 sEuare meters# un$er her
name# un$er Ta7 Declaration No* <=6.5# effecti(e ,=/< @E7hibit I/'JA 8hile Loreto
Retuerto $eclare$ the propert%# 8ith an area of ,#/64 sEuare meters# for ta7ation
purposes# un$er his name# un$er Ta7 Declaration No* 6,4=. effecti(e ,=/<* @E7hibit I/'
BJA*
In the meantime# Pe$ro Bar? $ie$ intestate an$ 8as sur(i(e$ b% his heirs# n3elo P* Bar?
an$ Merlin$a Bar?* Loreto Retuerto liFe8ise# $ie$ intestate an$ 8as sur(i(e$ b% his
heirs# namel%# Romeo Retuerto# ntonia Retuerto# Narcisa Retuerto# Cora?on Retuerto
an$ Patrocinia Retuerto*
Ominousl%# the heirs of Panfilo Retuerto claime$ o8nership o(er sub$i(ision Lot .=<'B
an$ a part of sub$i(ision Lot .=<'# co(ere$ b% Ori3inal Certificate of Title No* ;4,
un$er the name of Teofilo Bar?* s it 8as# sub$i(ision Lot .=<'B 8as sub$i(i$e$ b% the
heirs of Panfilo Retuerto# one of 8hich sub$i(ision lots# 8ith an area of --6 sEuare
meters# 8as forth8ith sol$ to the Spouses )ose +esalem an$ Rosa +esalem* &hen
apprise$ of the aforementione$ e(ents# n3elo Bar? an$ Merlin$a Bar?# the heirs of
Teofilo Bar?# an$ the heirs of Panfilo Retuerto# inclu$in3 the Spouses )ose +esalem ha$ a
confrontation $urin3 8hich the Spouses )ose +esalem a$mitte$ ha(in3 purchase$ a
portion of sub$i(ision Lot .=<'B 8ith an area of --6 sEuare meters*
On September ;# ,=.=# n3elo P* Bar? an$ Merlin$a Bar? file$ a complaint a3ainst
Catalina Retuerto an$ the other heirs of Panfilo Retuerto# inclu$in3 Loreto# 8ho the
Plaintiffs belie(e$# 8as still ali(e# an$ the Spouses )ose +esalem# 8ith the Re3ional Trial
Court of Man$aue for IMuietin3 of Title# Dama3es an$ ttorne%Cs Gees*J The Plaintiffs
alle3e$# inter alia# that sub$i(ision Lots .=<' an$ .=<'B 8ere portions of Lot .=<
subDect of LRC ;4= an$ co(ere$ b% Ori3inal Certificate of Title No* ;4, un$er the name
of Teofilo Bar? after 8hose $eath# the Plaintiffs inherite$ the propert%# $espite 8hich the
Defen$ants claime$ o8nership o(er Lots .=<' an$ .=<'B co(ere$ b% Ori3inal
Certificate of Title No* ;4,* 777
Romeo Retuerto# ntonia Retuerto# Narcisa Retuerto# Cora?on Retuerto# Patrocinia
Retuerto# the heirs of Loreto Retuerto# file$ an ns8er to the complaint alle3in3# inter
alia# b% 8a% of affirmati(e $efense# that their father# Loreto Retuerto# 8as alrea$% $ea$
an$ 8as sur(i(e$# b% them as his heirsH 8hat 8as sol$ to the Defen$ants Spouses )ose
+esalem 8as a portion of Lot .=<# 8ith an area of --6 sEuare meters# 8hich 8as
con(e%e$ to Efi3enia Retuerto an$ not that portion of Lot .=<'B $ee$e$ to Loreto
Retuerto un$er the IE7traDu$icial Settlement of Real Propert% of Panfilo Retuerto# 8ho
8as the la8ful o8ner of the sai$ propert%# Ithat the% 8ere not a8are of LRC Case No*
;4= an$Kor that the propert%# sol$ b% )uana Pere? to Panfilo Retuerto# ha$ been inclu$e$
in Ori3inal Certificate of Title No* ;4, un$er the name of Teofilo Bar?* 777
In their ns8er to the complaint# the Defen$ants Spouses )ose +esalem a(erre$# inter
alia# b% 8a% of affirmati(e $efense# that the% purchase$ a portion of sub$i(ision Lot .=<'
B# 8ith an area of --6 sEuare meters# more or lessH Lot .=<'B @formerl% Lot .=<'A
8hich ha$ been sol$ b% )uana Pere? Bar? to Panfilo Retuerto ha$ been the subDect of
LRC Case No* 5 8herein Panfilo Retuerto 8as $eclare$ the la8ful o8ner of the propert%H
that the inclusion of the subDect propert% in Ori3inal Certificate of Title No* ;4, issue$ to
an$ un$er the name of Teofilo Bar? $i$ not (est o8nership o(er the title in fa(or of Pe$ro
Bar? but constitute$ the latter merel% as a trustee un$er a constructi(e trust 8ith the
concomitant obli3ation to con(e% the sai$ propert% to the Defen$ants Heirs of Panfilo
Retuerto an$ to the Defen$ants Spouses# as (en$ees of the sai$ propert%H PlaintiffsC action
8as barre$ b% laches* 777
On pril 5# ,==/# the Re3ional Trial Court of Man$aue Cit% promul3ate$ its $ecision
$eclarin3 herein respon$ents as the absolute o8ners in fee simple of Lots .=<' an$ Lot
.=<'BH $eclarin3 the $ocuments a$$uce$ b% herein petitioners unenorceable an$
ineffecti(e a3ainst OCT No* ;4,H nullif%in3 the $ee$ of sale bet8een herein petitioners
an$ the spouses +esalemH an$ or$erin3 herein petitioners to (acate the premises of Lots
.=<' an$ .=<'B*9,: The Court of ppeals# on December 4=# 4666# affirme$ the
$ecision of the trial court e7cept as to the a8ar$ of attorne%Cs fees 8hich 8as $elete$*94:
Hence# this appeal b% the heirs of Panfilo Retuerto an$ the spouses +esalem#
assi3nin3 the follo8in3 errors0
I
The Court of ppeals 3ra(el% erre$ in conclu$in3 that petitioners ha$ onl% ten %ears from
the $ate of issuance of OCT No* ;4,# 8hich erroneousl% inclu$e$ their Lot No* .=<'#
8ithin 8hich to asF for its recon(e%ance# in the li3ht of their Du$iciall% $eclare$ an$
reco3ni?e$ possession thereof since time immemorial*
II
The Court of ppeals erre$ in not fin$in3 that it 8as respon$entsC ri3ht to Euestion
petitionersC o8nership an$ possession o(er the subDect propert% that has been lost thru
laches*
III
The Court of ppeals erre$ in conclu$in3 that petitioners coul$ not (entilate their claim
of title o(er the subDect propert% b% 8a% of affirmati(e $efense as this 8oul$ constitute
collateral attacF on respon$entsC ori3inal certificate of title*
&e $o not fin$ merit in the petition* Both the Court of ppeals an$ the Re3ional
Trial Court correctl% applie$ the principles of the Torrens s%stem of lan$ re3istration to
the present case*
It is a fun$amental principle in lan$ re3istration that a certificate of title ser(es as
e(i$ence of an in$efeasible an$ incontro(ertible title to the propert% in fa(or of the
person 8hose name appears therein*95: Such in$efeasibilit% commences after the lapse
or e7piration of one %ear from the $ate of entr% of the $ecree of re3istration* 9-: The act
of re3istration is consi$ere$ a constructi(e notice to all persons9;: respectin3 title to
propert%H hence# after the lapse of one %ear# title to the propert% can no lon3er be
conteste$* This s%stem 8as so effecte$ in or$er to Euiet title to lan$*
Recor$s sho8 that in ,=<<# an application for confirmation of title o(er Lot .=< 8as
file$ b% Pe$ro Bar?# herein respon$entsC pre$ecessor'in'interest# 8ith the Court of Girst
Instance of Cebu $ocFete$ as LRC Case No* N';4=* Thereafter# a $ecision $eclarin3
Pe$ro Bar? as the la8ful o8ner of the sai$ propert% 8as ren$ere$ b% the court an$
conseEuentl%# an ori3inal certificate of title# OCT No* ;4,# 8as issue$ in his name on
No(ember ,5# ,=<.* Thus# after the lapse of one %ear# 8hich 8as No(ember ,5# ,=<=#
pri(ate respon$entCs title to the propert% alrea$% became in$efeasible an$ can no lon3er
be contro(erte$*
Petitioners contest such title an$ claim that as earl% as ,=4=# their pre$ecessor'in'
interest# Panfilo Retuerto# bou3ht the propert% from )uana Pere? Bar? an$ that in ,=5/#
the then )u?3a$o $e Primera Instancia $e Cebu a$Du$icate$ sai$ propert% to Panfilo
Retuerto in +LRO Recor$ No* -656* Ho8e(er# no8here has it been sho8n that a $ecree
of re3istration 8as e(er issue$ affectin3 the propert%*
The alle3e$ earlier sale of the subDect propert% b% petitionersC pre$ecessor'in'interest
to respon$entsC pre$ecessor'in'interest 8as not re3istere$* lso# $espite the alle3e$
$ecision in ,=5/ b% the )u?3a$o $e Primero )ustancia in fa(or of Panfilo Retuerto# the
latter faile$ to inter(ene an$ intro$uce the sai$ $ecision in the petition for confirmation of
title file$ b% Pe$ro Bar? in ,=<<* lso# since the issuance of OCT No* ;4, in the name of
Pe$ro Bar? in ,=<.# no action ha$ been taFen b% petitioners $irectl% attacFin3 sai$ title
an$ seeFin3 recon(e%ance of the propert%* It 8as onl% sometime in ,=.= or t8ent%'one
@4,A %ears later# 8hen the% 8ere finall% implea$e$ b% pri(ate respon$ents in an action for
Euietin3 of title that petitioners acti(el% asserte$ o8nership of the subDect propert% in
their ans8er to the complaint*
Petitioners insist that $espite the in$efeasibilit% of pri(ate respon$entsC title# the% can
still maintain an action for recon(e%ance of the sai$ propert% on the 3roun$ of frau$
pursuant to Section 54 of Presi$ential Decree No* ,;4=* It is alle3e$ that respon$entsC
pre$ecessor'in'interest# Pe$ro Bar? misrepresente$ 8ith the lan$ re3istration court that he
inherite$ the 8hole of Lot .=< 8hen in truth an$ in fact a portion thereof $esi3nate$ as
Lot .=<' ha$ alrea$% been $ispose$ of to Panfilo RetuertoH hence# a constructi(e trust
8as create$ o(er the propert% for an$ in behalf of Panfilo Retuerto an$ his heirs*
The contention is bereft of merit* Constructi(e trusts are create$ in eEuit% to pre(ent
unDust enrichment# arisin3 a3ainst one 8ho# b% frau$# $uress or abuse of confi$ence#
obtains or hol$s the le3al ri3ht to propert% 8hich he ou3ht not# in eEuit% an$ 3oo$
conscience# to hol$*9<: Petitioners faile$ to substantiate their alle3ation that their
pre$ecessor'in'interest ha$ acEuire$ an% le3al ri3ht to the propert% subDect of the present
contro(ers%* Nor ha$ the% a$$uce$ an% e(i$ence to sho8 that the certificate of title of
Pe$ro Bar? 8as obtaine$ throu3h frau$*
E(en assumin3 ar3uen$o that Pe$ro Bar? acEuire$ title to the propert% throu3h
mistaFe or frau$# petitioners are nonetheless barre$ from filin3 their claim of o8nership*
n action for recon(e%ance base$ on an implie$ or constructi(e trust prescribes 8ithin
ten %ears from the time of its creation or upon the alle3e$ frau$ulent re3istration of the
propert%*9/: Since re3istration of real propert% is consi$ere$ a constructi(e notice to all
persons# then the ten'%ear prescripti(e perio$ is recFone$ from the time of such
re3isterin3# filin3 or enterin3*9.: Thus# petitioners shoul$ ha(e file$ an action for
recon(e%ance 8ithin ten %ears from the issuance of OCT No* ;4, in No(ember ,<# ,=<.*
This# the% faile$ to $o so*
Rel%in3 on the case of Heirs of )ose Ol(i3a (s* Court of ppeals#9=: petitioners
ar3ue that the ten'%ear perio$ for filin3 an action for recon(e%ance of propert% arisin3
from an implie$ or constructi(e trust applies onl% 8hen the person enforcin3 the trust is
not in possession of the propert%# since if a person claimin3 to be the o8ner is in actual
possession of the propert%# the action to seeF recon(e%ance or to Euiet title $oes not
prescribe* Petitioners claim that the% an$ their pre$ecessors'in'interest 8ere the ones in
actual possession of the subDect propert% alle3in3 that in the sur(e% ma$e b% +eo$etic
En3ineer Leopol$o Tuastumban# it 8as reporte$ that there 8ere Inine houses an$ one
rattan shop o8ne$ b% the heirs of Loreto Retuerto constructe$ thereon*J9,6:
3ain# the contention $oes not persua$e us* In the ,=<< $ecision of the Lan$
Re3istration Court in LRC No* ;4=# it 8as foun$ that Pe$ro Bar?# pri(ate respon$entsC
pre$ecessor'in'interest# 8as the la8ful o8ner of the subDect propert% as he an$ his
pre$ecessors'in'interest ha$ been in peaceful# continuous an$ open possession thereof in
the concept of o8ner since ,=,;* Sai$ court $eclare$ that0
Lot .=<0 This lot is co(ere$ b% Ta7 Declaration No* 4,=<= in the name of )uana Pere?#
E7h* IO'Pe$ro Bar?#J containin3 an area of 46#-.< sE* meters* It ori3inall% belon3e$ to
the spouses Esteban Pere? an$ Loren?a Sanche?* fter their $eath# the same 8as
inherite$ b% )uana Pere? 8ho $ie$ in ,=-4 an$ 8as succee$e$ b% her lone heir son Pe$ro
Bar?# Gilipino citi?en# marrie$ to Teofila Pe$ro?a an$ resi$ent of Man$aue# Cebu* )uana
Pere? o8ne$ an$ possesse$ this lot since ,=,; up to her $eath in ,=-4 8hen Pe$ro Bar?
reache$ the a3e of consciousness or 8hen he 8as aroun$ . %ears ol$H that her possession
ha$ been peaceful# continuous# open an$ in concept of o8ner* Grom ,=-4 up to the
present# the possession of Pe$ro Bar? o(er this propert% ha$ been liFe8ise peaceful#
continuous an$ in concept of o8ner as he 8as reli3ious in the pa%ment of real estate
ta7es# as sho8n in E7h* IN'4 Pe$ro Bar?*J9,,:
s pre(iousl% state$# no action for recon(e%ance has been file$ b% herein petitioners*
The% interpose$ their claim of o8nership for the first time in their ns8er an$ b% 8a% of
ffirmati(e Defenses to the complaint for Euietin3 of title file$ b% herein respon$ents in
,=.=* This cannot be allo8e$* 2n$er Section -. of PD ,;4= or the Propert%
Re3istration Decree# Ia certificate of title cannot be subDect to collateral attacFH it cannot
be altere$# mo$ifie$ or cancelle$ e7cept in a $irect procee$in3*J9,4: The issue of the
(ali$it% of title# i*e*# 8hether or not it 8as frau$ulentl% issue$# can onl% be raise$ in an
action e7pressl% institute$ for that purpose*9,5:
&HEREGORE# the Decision of the Court of ppeals $ate$ December 4=# 4666 in
C'+R CV No* ;==/; is hereb% GGIRMED*
SO ORDERED
+*R* No* ,6<4;, No(ember ,=# ,==5
CHIO LION+ TN# petitioner#
(s*
THE HONORBLE CO2RT OG PPELS# HON MN2EL T* M2RO# Presi$in3
)u$3e# RTC of Manila# Branch ;- an$ TN BN 1ON+# respon$ents*
)oaEuin M* rao for petitioner*
Maca(inta P Sta* na La8 Offices for pri(ate respon$ent*

NOCON# )*0
Petitioner seeFs in this petition the re(ersal of the Court of ppealsQ $ecision $ate$ Ma%
,;# ,==4 in C'+*R* CV No* 4==.4 affirmin3 the unfa(orable $ecision of the trial court
, in his suit for reple(in an$ $ama3es*
Petitioner Chiao Lion3 Tan claims to be the o8ner of a motor (ehicle# particularl%
$escribe$ as Isu?u Elf (an# ,=/< Mo$el 8ith Motor No* --==='4 an$ Chassis No*
=<-</.6 8hich he purchase$ in March# ,=./* s o8ner thereof# petitioner sa%s he has
been in possession# enDo%ment an$ utili?ation of the sai$ motor (ehicle until it 8as taFen
from him b% his ol$er brother# Tan Ban 1on3# the pri(ate respon$ent herein*
Petitioner relies principall% on the fact that the Isu?u Elf (an is re3istere$ in his name
un$er Certificate of Re3istration No* ,;6,=6=* He claims in his testimon% before the trial
court that the sai$ (ehicle 8as purchase$ from Balinta8aF Isu?u Motor Center for a price
of o(er P,66#666*66H that he sent his brother to pa% for the (an an$ the receipt for
pa%ment 8as place$ in his @petitionerQsA name because it 8as his mone% that 8as use$ to
pa% for the (ehicleH that he allo8e$ his brother to use the (an because the latter 8as
8orFin3 for his compan%# the CLT In$ustriesH an$ that his brother later refuse$ to return
the (an to him an$ appropriate$ the same for himself*
On the other han$# pri(ate respon$ent testifie$ that CLT In$ustries is a famil% business
that 8as place$ in petitionerQs name because at that time he 8as then lea(in3 for the
2nite$ States an$ petitioner is the remainin3 Gilipino in the famil% resi$in3 in the
Philippines* &hen the famil% business nee$e$ a (ehicle in ,=./ for use in the $eli(er% of
machiner% to its customers# he asFe$ petitioner to looF for a (ehicle an$ 3a(e him the
amount of P;#666*66 to be $eposite$ as $o8n pa%ment for an Isu?u Elf Van 8hich 8oul$
be a(ailable in about a month* fter a month# he himself pai$ the 8hole price out of a
loan of P,-6#666*66 8hich he obtaine$ from his frien$ Tan Pit Sin* Inasmuch as the
receipt for the $o8npa%ment 8as place$ in the name of petitioner an$ since he 8as still
on 3oo$ terms 8ith him# pri(ate respon$ent allo8e$ the re3istration of the (ehicle in
petitionerQs name* It 8as also their un$erstan$in3 that he 8oul$ Feep the (an for himself
because CLT In$ustries 8as not in a position to pa% him* Hence# from the time of the
purchase# he ha$ been in possession of the (ehicle inclu$in3 the ori3inal re3istration
papers thereof# but allo8in3 petitioner from time to time to use the (an for $eli(eries of
machiner%*
Tan Pit Sin 8ho ha$ Fno8n pri(ate respon$ent since ,=<.# not onl% because the% 8ere
classmates but also because of their business $ealin3s 8ith each other# confirme$ that
pri(ate respon$ent borro8e$ from him P,-6#666*66 in March# ,=./ to bu% an Isu?u Elf
(an* In fact# he ha$ borro8e$ sai$ (ehicle for a fe8 times*
+ina Lu# an emplo%ee of the Balinta8aF Isu?u Motors# testifie$ that pri(ate respon$ent
pai$ the balance of the purchase price of the Isu?u Elf (an in the amount of P,55#666*66
but the receipt 8as issue$ in the name of Chiao Lion3 Tan to maFe the recor$s consistent
because it 8as the latter 8ho ma$e the $eposit of P;#666*66* Thereafter# the Isu?u Elf (an
8as release$ to him*
fter hearin3# the trial court foun$ for pri(ate respon$ent* The $ispositi(e portion of the
$ecision rea$s as follo8s0
&HEREGORE# Du$3ment is hereb% ren$ere$ $eclarin3 $efen$ant Tan Ban 1on3
to be the o8ner of an$ entitle$ to the possession of the (ehicle $escribe$ in par* 4
of the Complaint# an$ the plaintiff is hereb% or$ere$ to $eli(er possession thereof
to the sai$ $efen$ant or in the alternati(e if such $eli(er% cannot be ma$e# to the
sum of P,5.#666*66 as the (alue of the (ehicle taFin3 into account the
$epreciation of the (ehicle but offset b% the inflation rateH in either alternati(e#
plaintiff is also or$ere$ to pa% to sai$ $efen$ant conseEuential $ama3es of
P46#666*66 for the latter ha(in3 been $epri(e$ of the possession an$ use of the
(ehicle an$ to pa% the costs* ll amounts a$Du$3e$ herein# e7cept costs# shall
bear interest at the le3al rate from the $ate of this $ecision# until $eli(er% of the
(ehicle or the alternati(e pa%ment of the (alue thereof as 8ell as pa%ment of
conseEuential $ama3es is pai$H the interest applies to the (alue of the (ehicle if
return thereof is $ela%e$* No cost* 4
Gin$in3 no merit in the appeal# the respon$ent Court of ppeals affirme$ the $ecision of
the trial court* 2n$aunte$ b% his successi(e failures# petitioner comes to us an$ raise$ the
follo8in3 error alle3e$l% committe$ b% the respon$ent Court of ppeals# to 8it0
,* * * * in fin$in3 the testimonies of pri(ate respon$entQs 8itnesses cre$ibleH
4* * * * in $isre3ar$in3 the Certificate of Re3istration of the subDect motor (ehicle
as proof of o8nership b% the petitioner'appellant* 5
Since the Court of ppeals merel% affirme$ the trial courtQs assessment of the cre$ibilit%
of the 8itnesses that testifie$ before it# petitioner is in effect Euestionin3 the factual
fin$in3s of sai$ court an$ its appraisal of their testimon% 8hich this Court cannot re(ie8#
its Duris$iction bein3 limite$ to Euestions of la8* The consi$erable 8ei3ht 3i(en to the
fin$in3s of the trial court is not 8ithout an% reason* It ha$ the opportunit% to obser(e the
$emeanor of 8itnesses 8hich is usuall% not reflecte$ in the transcript of recor$s* The
profun$it% of the conclusions thus reache$ is Dust the result of such obser(ance* &hen the
Court of ppeals affirme$ sai$ fin$in3s# it 3oes to sho8 that no misapprehension of facts
8as committe$ as sai$ Court has the po8er to scrutini?e sai$ factual fin$in3s un$er
e7istin3 rules of proce$ure*
In conclu$in3 that the testimonies of Tan Ban 1on3# Tan Pit Sin an$ +ina Lu cast $oubt
on the petitionerQs o8nership of the motor (ehicle in Euestion# both the trial court an$ the
Court of ppeals attache$ si3nificance to their respecti(e interlocFin3 accounts on ho8
the motor (ehicle 8as acEuire$# complete 8ith the financin3 source an$ mo$e of
repa%ment* Respon$ent Tan Ban 1on3Qs $eclaration that he borro8e$ P,-6#666*66 from
Tan Pit Sin an$ pai$ the balance of the purchase price of the motor (ehicle himself to
+ina Lu of the Balinta8aF Isu?u Motors# is corroborate$ b% the abo(e'mentione$ persons
themsel(es* Tan Pit Sin not onl% confirme$ the loan but also state$ that the same 8as pai$
in three @5A monthsH P;6#666*66 on the first pa%mentH another P;6#666*66 on the secon$
pa%ment an$ P-6#666*66 on the last pa%ment* - +ina Lu# 8ho testifie$ at the instance of
petitioner# $eclare$ that the $o8npa%ment of P;#666*66 8as pai$ b% petitioner an$ so the
receipt for the same 8as issue$ in his name but the balance of P,55#666*66 8as pai$ b%
pri(ate respon$ent an$ to maFe the recor$ consistent# she issue$ the receipt in the name
of petitioner a3ain*
In contrast to the clear an$ cate3orical a(erments of pri(ate respon$ent an$ the 8itnesses
in this case ne3atin3 petitionerQs o8nership of the motor (ehicle in Euestion# petitionerQs
a(erments before the trial court an$ this Court are not onl% $isparate but conflictin3* In
his testimon% belo8# petitioner a(erre$ that he use$ his o8n mone% to purchase the motor
(ehicle b% pa%in3 the sum of P,66#666*66# ; 8hich testimon% is ne3ate$ b% his a$mission
on pa3e ; of his petition < before this Court that pri(ate respon$ent borro8e$ mone%
from Tan Pit Sin 8ith 8hich to purchase the subDect motor (ehicle* Then# in his plea$in3
before the court belo8# particularl% in his repl% to the ans8er of pri(ate respon$ent#
petitioner alle3e$ that the motor (ehicle 8as inten$e$ for his e7clusi(e use an$ not to
ser(ice the famil% business* / n$ %et # in his petition before this Court# he claime$ that
the subDect motor (ehicle 8as purchase$ for CLT In$ustries# 8hich he solel% o8ne$ an$
accor$in3l%# re3istere$ in the latterQs name* . On top of these entan3le$ a(erments#
petitioner $i$ not ha(e in his possession the Certificate of Re3istration of the motor
(ehicle an$ the official receipt of pa%ment for the same# thereb% len$in3 cre$ence to the
claim of pri(ate respon$ent 8ho has possession thereof# that he o8ns the subDect motor
(ehicle*
certificate of re3istration of a motor (ehicle in oneQs name in$ee$ creates a stron3
presumption of o8nership* Gor all practical purposes# the person in 8hose fa(or it has
been issue$ is (irtuall% the o8ner thereof unless pro(e$ other8ise* In other 8or$s# such
presumption is rebuttable b% competent proof*
The Ne8 Ci(il Co$e reco3ni?es cases of implie$ trust other than those enumerate$
therein* = Thus# althou3h no specific pro(ision coul$ be cite$ to appl% to the parties
herein# it is un$eniable that an implie$ trust 8as create$ 8hen the certificate of
re3istration of the motor (ehicle 8as place$ in the name of the petitioner althou3h the
price thereof 8as not pai$ b% him but b% pri(ate respon$ent* The principle that a trustee
8ho puts a certificate of re3istration in his name cannot repu$iate the trust b% rel%in3 on
the re3istration is one of the 8ell'Fno8n limitations upon a title* trust# 8hich $eri(es its
stren3th from the confi$ence one reposes on another especiall% bet8een brothers# $oes
not lose that character simpl% because of 8hat appears in a le3al $ocument*
E(en un$er the Torrens S%stem of lan$ re3istration# this Court in some instances $i$
a8a% 8ith the irre(ocabilit% or in$efeasibilit% of a certificate of title to pre(ent inDustice
a3ainst the ri3htful o8ner of the propert%* ,6
It is true that the Du$3ment ,, in a reple(in suit must onl% resol(e in 8hom is the ri3ht of
possession* Primaril%# the action of reple(in is possessor% in character an$ $etermine$
nothin3 more than the ri3ht of possession* Ho8e(er# 8hen the title to the propert% is
$istinctl% put in issue b% the $efen$antQs plea an$ b% reason of the polic% to settle in one
action all the conflictin3 claims of the parties to the possession of the propert% in
contro(ers%# the Euestion of o8nership ma% be resol(e$ in the same procee$in3*
Proce$ure'8ise# the Court obser(es that the action b% petitioner as plaintiff in the trial
court 8as onl% one for Reple(in an$ Dama3es* Since reple(in is onl% a pro(isional
reme$% 8here the reple(in plaintiff claims imme$iate $eli(er% of personal propert%
pen$in3 the Du$3ment of the trial court in a principal case# ,4 the petitioner shoul$ ha(e
file$ in the trial court as a main case an action to reco(er possession of the Isu?u Elf (an
8hich 8as in the possession of the pri(ate respon$ent* Lo3icall%# the basis of petitionerQs
cause of action shoul$ ha(e been his o8nership of sai$ (an*In the State of California#
from 8hose Co$e of Proce$ure ,5 8e copie$ our rule on reple(in# their ol$ reple(in rule
8hich allo8e$ the imme$iate $eli(er% of the chattel at the commencement of the action
upon application 8ith bon$ b% the reple(in plaintiff ha$ alrea$% been strucF $o8n as
earl% as )ul% ,# ,=/, in the case of Blair (* Pitchess* ,- s in fact# on )une ,4# ,=/4 8hen
the 2nite$ States Supreme Court strucF $o8n as unconstitutional the Glori$a an$
Penns%l(ania reple(in statutes in Guentes (* She(in# ,; most of the states# on their o8n#
chan3e$ their reple(in statutes to inclu$e a man$ator% preliminar% hearin3 before the 8rit
coul$ be issue$# similar to our man$ator% preliminar% hearin3 before the 8rit of
preliminar% inDunction can be issue$*,<
If that ha$ been the case in this Duris$iction# then the trial Du$3e 8oul$ ha(e $isco(ere$
ri3ht a8a% at the preliminar% hearin3 that pri(ate respon$ent shoul$ ha(e imme$iatel%
staFe$ his claim of o8nership an$ that 8oul$ ha(e create$ serious $oubts about
petitionerQs claim of o8nership* Most liFel%# the 8rit 8oul$ not ha(e been issue$ an$ the
complaint 8oul$ ha(e been $ismisse$ motu proprio b% the trial court upon the $isco(er%
that the petitioner $i$ not ha(e a principal case therein* s it is# the complaint procee$e$
its course to the $etriment of pri(ate respon$ent*
Ginall%# althou3h a Lreple(inL action is primaril% one for the possession of personalit%# %et
it is sufficientl% fle7ible to authori?e a settlement of all eEuities bet8een the parties#
arisin3 from or 3ro8in3 out of the main contro(ers%* ,/Thus# in an action for reple(in
8here the $efen$ant is a$Du$3e$ entitle$ to possession# he nee$ not 3o to another forum
to procure relief for the return of the reple(ie$ propert% or secure a Du$3ment for the
(alue of the propert% in case the a$Du$3e$ return thereof coul$ not be ha$* ppropriatel%#
the trial court ren$ere$ an alternati(e Du$3ment*
&HEREGORE# the Euestione$ $ecision bein3 in accor$ance 8ith the la8# the instant
petition for re(ie8 is hereb% DENIED for lacF of merit*
SO ORDERED*
SECOND DIVISION
9+*R* No* ,,=4-/* Gebruar% ,/# ,==/:
CESR S2LIT# petitioner# (s* CO2RT OG PPELS an$ IL2MIND C1CO#
respon$ents*
D E C I S I O N
RE+LDO# )*0
The primar% issue pose$ before the Court# in this appeal b% certiorari from a
$ecision9,: of the Court of ppeals# is 8hether or not the mort3a3ee or purchaser in an
e7traDu$icial foreclosure sale is entitle$ to the issuance of a 8rit of possession o(er the
mort3a3e$ propert% $espite his failure to pa% the surplus procee$s of the sale to the
mort3a3or or the person entitle$ thereto* Secon$aril%# it calls for a resolution of the
further conseEuences of such non'pa%ment of the full amount for 8hich the propert% 8as
sol$ to him pursuant to his bi$*
The material facts# as foun$ b% respon$ent court# are not $ispute$0
IIt appears from the recor$ that on = )une ,==4 petitioner @herein pri(ate respon$entA
Ilumina$a Ca%co e7ecute$ a Real Estate Mort3a3e @REMA o(er Lot 4<56 8hich is locate$
in Caloocan Cit% an$ co(ere$ b% TCT No* @454,,A ,,;=, in fa(or of pri(ate respon$ent
@herein petitionerA Cesar Sulit# to secure a loan of P- Million* 2pon petitionerCs failure to
pa% sai$ loan 8ithin the stipulate$ perio$# pri(ate respon$ent resorte$ to e7traDu$icial
foreclosure of the mort3a3e as authori?e$ in the contract* Hence# in a public auction
con$ucte$ b% Notar% Public Geli?ar$o M* Merca$o on 4. September ,==5 the lot 8as
sol$ to the mort3a3ee# herein pri(ate respon$ent# 8ho submitte$ a 8innin3 bi$ of P/
Million* s state$ in the Certificate of Sale e7ecute$ b% the notar% public @nne7 B#
petitionA# the mort3a3e$ propert% 8as sol$ at public auction to satisf% the mort3a3e
in$ebte$ness of P- Million* The Certificate further states as follo8s0
IT IS G2RTHER CERTIGIED# that the aforementione$ hi3hest bi$$erKbu%er# CESR
S2LIT# bein3 the petitionerKmort3a3ee thereupon $i$ not pa% to the un$ersi3ne$ Notar%
Public of OalooFan Cit% the sai$ sum of SEVEN MILLION PESOS @P/#666#666*66A#
Philippine Currenc%# the sale price of the abo(e'$escribe$ real estate propert% to3ether
8ith all impro(ements e7istin3 thereon# 8hich amount 8as properl% cre$ite$ to the
PRTIL satisfaction of the mort3a3e $ebt mentione$ in the sai$ real estate mort3a3e#
plus interests# attorne%Cs fees an$ all other inci$ental e7penses of foreclosure an$ sale
@par* 4# nne7 B# petitionA*
On ,5 December ,==5 pri(ate respon$ent petitione$ the Re3ional Trial Court of
OalooFan Cit% for the issuance of a 8rit of possession in his fa(or* The petition 8as
$ocFete$ as LRC Case No* C'5-<4 an$ assi3ne$ to Branch ,5,# presi$e$ o(er b% public
respon$ent*
On ,/ )anuar% ,==- respon$ent )u$3e issue$ a $ecision @shoul$ ha(e been $enominate$
as or$erA# the $ispositi(e part of 8hich rea$s0
&HEREGORE# fin$in3 the subDect petition to be meritorious# the same is hereb%
+RNTED* s pra%e$ for# let a &rit of Possession be issue$ in fa(or of herein
petitioner# Cesar Sulit# upon his postin3 of an in$emnit% bon$ in the amount of One
Hun$re$ T8ent% Thousan$ @P,46#666*66A Pesos @nne7 C# petitionA*
On 4. March ,==- petitioner file$ a Motion to ha(e the auction sale of the mort3a3e$
propert% set asi$e an$ to $efer the issuance of the 8rit of possession* She in(ite$ the
attention of the court a Euo to some proce$ural infirmities in the sai$ procee$in3 an$
further Euestione$ the sufficienc% of the amount of bon$* In the same Motion petitioner
pra%e$ as an alternati(e relief that pri(ate respon$ent be $irecte$ to pa% the sum of P5
Million 8hich represents the balance of his 8innin3 bi$ of P/ Million less the mort3a3e
in$ebte$ness of P- Million @nne7 D# petitionA* This Motion 8as oppose$ b% pri(ate
respon$ent 8ho conten$e$ that the issuance of a 8rit of possession upon his filin3 of a
bon$ 8as a ministerial $ut% on the part of respon$ent )u$3e @nne7 EA# to 8hich
Opposition petitioner submitte$ a Repl% @nne7 G# petitionA*
On ,, Ma% ,==- respon$ent )u$3e $enie$ petitionerCs Motion an$ $irecte$ the issuance
of a 8rit of possession an$ its imme$iate enforcement b% $eput% sheriff Danilo
Norberte @nne7 +# petitionA*J94:@Italici?e$ 8or$s supplie$ for clarit%A*
Grom the aforesai$ or$ers of the court a Euo# herein pri(ate respon$ent Ilumina$a
Ca%co file$ on Ma% 4<# ,==- a petition for certiorari 8ith preliminar% inDunction an$Kor
temporar% restrainin3 or$er before respon$ent Court of ppeals# 8hich imme$iatel%
issue$ a status Euo or$er restrainin3 the respon$ent Du$3e therein from implementin3 his
or$er of )anuar% ,/# ,==- an$ the 8rit of possession issue$ pursuant thereto*
SubseEuentl%# respon$ent court ren$ere$ Du$3ment on No(ember ,,# ,==-# as follo8s0
IIN )2D+MENT# &e 3rant the 8rit of certiorari an$ the $ispute$ or$er of ,/ )anuar%
,==- 8hich precipitatel% $irecte$ the issuance of a 8rit of possession in fa(or of pri(ate
respon$ent an$ the subseEuent or$er of ,, Ma% ,==- 8hich $enie$ petitionerCs Motion
for Reconsi$eration are hereb% SET SIDE*
ccor$in3l%# pri(ate respon$ent is or$ere$ to pa% unto petitioner# throu3h the notar%
public# the balance or e7cess of his bi$ of P/ Million after $e$uctin3 therefrom the sum
of P-#5<;#4.6 8hich represents the mort3a3e $ebt an$ interest up to the $ate of the
auction sale @September 45# ,==5A# as 8ell as e7penses of foreclosure base$ on receipts
8hich must be presente$ to the notar% public*
In the e(ent that pri(ate respon$ent fails or refuses to pa% such e7cess or balance# then the
auction sale of 4. September ,==5 is $eeme$ CNCELLED an$ pri(ate respon$ent ma%
foreclose the mort3a3e ane8 either in a Du$icial or e7traDu$icial procee$in3 as stipulate$
in the mort3a3e contract*J
Corollar% to the principal issue earlier state$# petitioner asserts that respon$ent Court
of ppeals 3ra(el% erre$ 8hen it faile$ to appreciate an$ consi$er the suppose$ le3al
si3nificance of the bouncin3 checFs 8hich pri(ate respon$ent issue$ an$ $eli(ere$ to
petitioner as pa%ment for the a3ree$ or stipulate$ interest on the mort3a3e obli3ation* He
liFe8ise a(ers that a motion for reconsi$eration or an appeal# an$ not certiorari# is the
proper reme$% a(ailable to herein pri(ate respon$ent from an or$er $en%in3 her motion to
$efer issuance of the 8rit of possession* Moreo(er# it is claime$ that an% Euestion
re3ar$in3 the propriet% of the sale an$ the issuance of the 8rit of possession must be
threshe$ out in a summar% procee$in3 pro(i$e$ for in Section . of ct 5,5;*
There is no merit in petitionerCs contention that the $ishonore$ checFs amountin3 to
a total of P,#4;6#666*66# alle3e$l% representin3 interest of ;V per month from )une =#
,==4 to December =# ,==4# 8ere correctl% consi$ere$ b% the trial court as the 8ritten
a3reement bet8een the parties* Instea$# 8e fin$ the e7planation of respon$ent court in
reDectin3 such postulate# on the basis of rticle ,=;< of the Ci(il Co$e#95: to be more
lo3ical an$ plausible# to 8it0
IIt is note8orth% that the Dee$ of Real Estate Mort3a3e e7ecute$ b% the parties on = )une
,==4 @nne7 # PetitionA $oes not contain an% stipulation for pa%ment of interest*
Pri(ate respon$ent 8ho maintains that he ha$ an a3reement 8ith petitioner for the
pa%ment of ;V monthl% interest $i$ not pro$uce an% other 8ritin3 or instrument
embo$%in3 such a stipulation on interest* It appears then that if an% such a3reement 8as
reache$ b% the parties# it 8as merel% a (erbal one 8hich $oes not conform to the
aforeEuote$ statutor% pro(ision* Certainl%# the $ishonore$ checFs claime$ to ha(e been
issue$ b% petitioner in pa%ment of interest coul$ not ha(e been the 8ritten stipulation
contemplate$ in rticle ,=;< of the Co$e* ConseEuentl%# in the absence of a 8ritten
stipulation for the imposition of interest on the loan obtaine$ b% petitioner# pri(ate
respon$entCs assessment thereof has no le3al basis*J9-:
It is elementar% that in the absence of a stipulation as to interest# the loan $ue 8ill
no8 earn interest at the le3al rate of ,4V per annum9;: 8hich# accor$in3 to respon$ent
court# is eEui(alent to P5<;#4.6*66 compute$ from December ,6# ,==4# after pri(ate
respon$entCs obli3ation became $ue# until September 45# ,==5# the $ate of the auction
sale* It is this amount 8hich shoul$ further be $e$ucte$ from the purchase price of
P/#666#666*66# to3ether 8ith an% other e7penses incurre$ in connection 8ith the sale#
such as the postin3 an$ publication of notices# notarial an$ $ocumentar% fees# an$
assessments or ta7es $ue on the $ispute$ propert%*
It baffles this Court# therefore# 8h% petitioner has continuall% faile$ up to the present
to submit $ocumentar% e(i$ence of the alle3e$ e7penses of the foreclosure sale# an$ this
in spite of the e7press reEuirement therefor in the certificate of sale9<: issue$ b% the
notar% public for the purpose of computin3 the actual amount pa%able b% the mort3a3or
or re$emptioner in the e(ent of re$emption* It ma% thus be safel% presume$ that such
e(i$ence ha(in3 been 8illfull% suppresse$# it 8oul$ be a$(erse if pro$uce$*9/:
Comin3 no8 to the main issue in this case# petitioner ar3ues that it is ministerial
upon the court to issue a 8rit of possession after the foreclosure sale an$ $urin3 the
perio$ of re$emption# in(oFin3 in support thereof Sections / an$ . of ct 5,5; 8hich
conDointl% pro(i$e0
ISec* /* In an% sale ma$e un$er the pro(isions of this ct# the purchaser ma% petition the
Court of Girst Instance of the pro(ince or place 8here the propert% or an% part thereof is
situate$# to 3i(e him possession thereof $urin3 the re$emption perio$# furnishin3 bon$ in
an amount eEui(alent to the use of the propert% for a perio$ of t8el(e months# to
in$emnif% the $ebtor in case it be sho8n that the sale 8as ma$e 8ithout (iolatin3 the
mort3a3e or 8ithout compl%in3 8ith the reEuirements of this ct* Such petition shall be
ma$e un$er oath an$ file$ in form of an e7 parte motion in the re3istration or ca$astral
procee$in3s if the propert% is re3istere$# or in special procee$in3s in the case of propert%
re3istere$ un$er the Mort3a3e La8 or un$er section one hun$re$ an$ ninet%'four of the
$ministrati(e Co$e# or of an% other real propert% encumbere$ 8ith a mort3a3e $ul%
re3istere$ in the office of an% re3ister of $ee$s in accor$ance 8ith an% e7istin3 la8# an$
in each case the clerF of the court shall# upon the filin3 of such petition# collect the fees
specifie$ in para3raph ele(en of section one hun$re$ an$ fourteen of ct Numbere$
T8ent%'ei3ht hun$re$ an$ si7t%'si7# an$ the court shall# upon appro(al of the bon$# or$er
that a 8rit of possession issue# a$$resse$ to the sheriff of the pro(ince in 8hich the
propert% is situate$# 8ho shall e7ecute sai$ or$er imme$iatel%*
ISec* .* The $ebtor ma%# in the procee$in3s in 8hich possession 8as reEueste$# but not
later than thirt% $a%s after the purchaser 8as 3i(en possession# petition that the sale be set
asi$e an$ the 8rit of possession cancelle$# specif%in3 the $ama3es suffere$ b% him#
because the mort3a3e 8as not (iolate$ or the sale 8as not ma$e in accor$ance 8ith the
pro(isions hereof# an$ the court shall taFe co3ni?ance of this petition in accor$ance 8ith
the summar% proce$ure pro(i$e$ for in section one hun$re$ an$ t8el(e of ct Number
Gour hun$re$ an$ ninet%'si7H an$ if it fin$s the complaint of the $ebtor Dustifie$# it shall
$ispose in his fa(or of all or part of the bon$ furnishe$ b% the person 8ho obtaine$
possession* Either of the parties ma% appeal from the or$er of the Du$3e in accor$ance
8ith section fourteen of ct Numbere$ Gour hun$re$ an$ ninet%'si7H but the or$er of
possession shall continue in effect $urin3 the pen$enc% of the appeal*J
The 3o(ernin3 la8 thus e7plicitl% authori?es the purchaser in a foreclosure sale to
appl% for a 8rit of possession $urin3 the re$emption perio$ b% filin3 an e7 parte motion
un$er oath for that purpose in the correspon$in3 re3istration or ca$astral procee$in3 in
the case of propert% 8ith Torrens title* 2pon the filin3 of such motion an$ the appro(al
of the correspon$in3 bon$# the la8 also in e7press terms $irects the court to issue the
or$er for a 8rit of possession*
No $iscretion appears to be left to the court* n% Euestion re3ar$in3 the re3ularit%
an$ (ali$it% of the sale# as 8ell as the conseEuent cancellation of the 8rit# is to be
$etermine$ in a subseEuent procee$in3 as outline$ in Section .# an$ it cannot be raise$ as
a Dustification for opposin3 the issuance of the 8rit of possession since# un$er the ct# the
procee$in3 for this ise7 parte*9.: Such recourse is a(ailable to a mort3a3ee# 8ho effects
the e7traDu$icial foreclosure of the mort3a3e# e(en before the e7piration of the perio$ of
re$emption pro(i$e$ b% la8 an$ the Rules of Court*9=:
The rule is# ho8e(er# not 8ithout e7ception* 2n$er Section 5;# Rule 5= of the Rules
of Court# 8hich is ma$e applicable to the e7traDu$icial foreclosure of real estate
mort3a3es b% Section < of ct 5,5;# the possession of the mort3a3e$ propert% ma% be
a8ar$e$ to a purchaser in the e7traDu$icial foreclosure Iunless a thir$ part% is actuall%
hol$in3 the propert% a$(ersel% to the Du$3ment $ebtor*J9,6:
Thus# in the case of Barican# et al* (s* Interme$iate ppellate Court# et al*#9,,: this
Court tooF into account the circumstances that lon3 before the mort3a3ee banF ha$ sol$
the $ispute$ propert% to the respon$ent therein# it 8as no lon3er the Du$3ment $ebtor 8ho
8as in possession but the petitioner spouses 8ho ha$ assume$ the mort3a3e# an$ that
there 8as a pen$in3 ci(il case in(ol(in3 the ri3hts of thir$ parties* Hence# it 8as rule$
therein that un$er the circumstances# the obli3ation of a court to issue a 8rit of possession
in fa(or of the purchaser in a foreclosure of mort3a3e case ceases to be ministerial*
No8# in force$ sales lo8 prices are 3enerall% offere$ an$ the mere ina$eEuac% of the
price obtaine$ at the sheriffCs sale# unless shocFin3 to the conscience# has been hel$
insufficient to set asi$e a sale* This is because no $isa$(anta3e is cause$ to the
mort3a3or* On the contrar%# a mort3a3or stan$s to 3ain 8ith a re$uce$ price because he
possesses the ri3ht of re$emption* &hen there is the ri3ht to re$eem# ina$eEuac% of price
becomes immaterial since the Du$3ment $ebtor ma% reacEuire the propert% or sell his ri3ht
to re$eem# an$ thus reco(er the loss he claims to ha(e suffere$ b% reason of the price
obtaine$ at the auction sale*9,4:
Ho8e(er# also b% 8a% of an e7ception# in Cometa# et al* (s* Interme$iate ppellate
Court# et al*9,5: 8here the properties in Euestion 8ere foun$ to ha(e been sol$ at an
unusuall% lo8er price than their true (alue# that is# properties 8orth at least P;66#666*66
8ere sol$ for onl% P;/#5=<*.;# this Court# taFin3 into consi$eration the factual milieu
obtainin3 therein as 8ell as the peculiar circumstances atten$ant thereto# $eci$e$ to
8ithhol$ the issuance of the 8rit of possession on the 3roun$ that it coul$ 8orF inDustice
because the petitioner mi3ht not be entitle$ to the same*
The case at bar is Euite the re(erse# in the sense that instea$ of an ina$eEuac% in
price# there is $ue in fa(or of pri(ate respon$ent# as mort3a3or# a surplus from the
procee$s of the sale eEui(alent to appro7imatel% -6V of the total mort3a3e $ebt# 8hich
e7cess is in$isputabl% a substantial amount* Ne(ertheless# it is our consi$ere$ opinion#
an$ 8e so hol$# that eEuitable consi$erations $eman$ that a 8rit of possession shoul$
also not issue in this case*
Rule <. of the Rules of Court pro(i$es0
Sec* -* Disposition of procee$s of sale* ' The mone% reali?e$ from the sale of mort3a3e$
propert% un$er the re3ulations hereinbefore prescribe$ shall# after $e$uctin3 the costs of
the sale# be pai$ to the person foreclosin3 the mort3a3e# an$ 8hen there shall be an%
balance or resi$ue# after pa%in3 off such mort3a3e or other incumbrances# the same shall
be pai$ to the Dunior incumbrancers in the or$er of their priorit%# to be ascertaine$ b% the
court# or if there be no such incumbrancers or there be a balance or resi$ue after pa%ment
of such incumbrancers# then to the mort3a3or or his a3ent# or to the person entitle$ to it*J
The application of the procee$s from the sale of the mort3a3e$ propert% to the
mort3a3orCs obli3ation is an act of pa%ment# not pa%ment b% $ationH hence# it is the
mort3a3eeCs $ut% to return an% surplus in the sellin3 price to the mort3a3or*9,-:
Perforce# a mort3a3ee 8ho e7ercises the po8er of sale containe$ in a mort3a3e is
consi$ere$ a custo$ian of the fun$# an$# bein3 boun$ to appl% it properl%# is liable to the
persons entitle$ thereto if he fails to $o so* n$ e(en thou3h the mort3a3ee is not strictl%
consi$ere$ a trustee in a purel% eEuitable sense# but as far as concerns the unconsume$
balance# the mort3a3ee is $eeme$ a trustee for the mort3a3or or o8ner of the eEuit% of
re$emption*9,;:
Commentin3 on the theor% that a mort3a3ee# 8hen he sells un$er a po8er# cannot be
consi$ere$ other8ise than as a trustee# the (ice'chancellor in Robertson (s* Norris @,
+iff* -4,Aobser(e$0 IThat e7pression is to be un$erstoo$ in this sense0 that 8ith the
po8er bein3 3i(en to enable him to reco(er the mort3a3e mone%# the court reEuires that
he shall e7ercise the po8er of sale in a pro(i$ent 8a%# 8ith a $ue re3ar$ to the ri3hts an$
interests of the mort3a3or in the surplus mone% to be pro$uce$ b% the sale*J9,<:
The 3eneral rule that mere ina$eEuac% of price is not sufficient to set asi$e a
foreclosure sale is base$ on the theor% that the lesser the price the easier it 8ill be for the
o8ner to effect the re$emption*9,/: The same thin3 cannot be sai$ 8here the amount of
the bi$ is in e7cess of the total mort3a3e $ebt* The reason is that in case the mort3a3or
$eci$es to e7ercise his ri3ht of re$emption# Section 56 of Rule 5= pro(i$es that the
re$emption price shoul$ be eEui(alent to the amount of the purchase price# plus one per
cent monthl% interest up to the time of the re$emption#9,.: to3ether 8ith the amount of
an% assessments or ta7es 8hich the purchaser ma% ha(e pai$ thereon after purchase# an$
interest on such last'name$ amount at the same rate*9,=:
ppl%in3 this pro(ision to the present case 8oul$ be hi3hl% iniEuitous if the amount
reEuire$ for re$emption is base$ on P/#666*666*66# because that 8oul$ mean e7actin3
pa%ment at a price unDustifiabl% hi3her than the real amount of the mort3a3e obli3ation*
&e nee$ not eluci$ate on the ob(ious* Simpl% put# such a construction 8ill un$eniabl%
be preDu$icial to the substanti(e ri3hts of pri(ate respon$ent an$ it coul$ e(en effecti(el%
pre(ent her from e7ercisin3 the ri3ht of re$emption*
&here the re$emptioner chooses to e7ercise his ri3ht of re$emption# it is the polic%
of the la8 to ai$ rather than to $efeat his ri3ht* It stan$s to reason# therefore# that
re$emption shoul$ be looFe$ upon 8ith fa(or an$ 8here no inDur% 8ill follo8# a liberal
construction 8ill be 3i(en to our re$emption la8s# specificall% on the e7ercise of the ri3ht
to re$eem* Conformabl% hereto# an$ taFin3 into consi$eration the facts obtainin3 in this
case# it is more in Feepin3 8ith the spirit of the rules# particularl% Section 56 of Rule 5=#
that 8e a$opt such interpretation as ma% be fa(orable to the pri(ate respon$ent*
$mitte$l%# no pa%ment 8as ma$e b% herein petitioner# as the hi3hest bi$$er# to the
notar% public 8ho con$ucte$ the e7traDu$icial foreclosure sale* &e are not unmin$ful of
the rule that it is not necessar% for the mort3a3ee to pa% cash to the sheriff or# in this case#
the notar% public 8ho con$ucte$ the sale* It 8oul$ ob(iousl% ser(e no purpose for the
sheriff or the notar% public to 3o throu3h the i$le ceremon% of recei(in3 the mone% an$
pa%in3 it bacF to the cre$itor# un$er the truism that the la8maFin3 bo$% $i$ not
contemplate such a pointless application of the la8 in reEuirin3 that the cre$itor must bi$
un$er the same con$itions as an% other bi$$er*946: It bears stressin3 that the rule hol$s
true onl% 8here the amount of the bi$ represents the total amount of the mort3a3e $ebt*
In case of a surplus in the purchase price# ho8e(er# there is Durispru$ence to the
effect that 8hile the mort3a3ee or$inaril% is liable onl% for such surplus as actuall% comes
into his han$s# but he sells on cre$it instea$ of for cash# he must still account for the
procee$s as if the price 8ere pai$ in cash# an$ in an action a3ainst the mort3a3ee to
reco(er the surplus# the latter cannot raise the $efense that no actual cash 8as recei(e$*
94,:
&e cannot simpl% i3nore the importance of surplus procee$s because b% their (er%
nature# surplus mone% arisin3 from a sale of lan$ un$er a $ecree of foreclosure stan$s in
the place of the lan$ itself 8ith respect to liens thereon or (este$ ri3hts therein* The% are
constructi(el%# at least# real propert% an$ belon3 to the mort3a3or or his assi3ns*944:
Ine(itabl%# the ri3ht of a mort3a3or to the surplus procee$s is a substantial ri3ht 8hich
must pre(ail o(er rules of technicalit%*
Surplus mone%# in case of a foreclosure sale# 3ains much si3nificance 8here there are
Dunior encumbrancers on the mort3a3e$ propert%* )urispru$ence has it that 8hen there
are se(eral liens upon the premises# the surplus mone% must be applie$ to their $ischar3e
in the or$er of their priorit%*945: Dunior mort3a3ee ma% ha(e his ri3hts protecte$ b% an
appropriate $ecree as to the application of the surplus# if there be an%# after satisf%in3 the
prior mort3a3e* His lien on the lan$ is transferre$ to the surplus fun$*94-: n$ a senior
mort3a3ee# reali?in3 more than the amount of his $ebt on a foreclosure sale# is re3ar$e$
as a trustee for the benefit of Dunior encumbrancers*94;:
2pon the stren3th of the fore3oin3 consi$erations# 8e cannot countenance the
apparent paltriness that petitioner persistentl% accor$s the ri3ht of pri(ate respon$ent o(er
the surplus procee$s* It must be emphasi?e$ that petitioner faile$ to present the receipts
or an% other proof of the alle3e$ costs or e7penses incurre$ b% him in the foreclosure
sale* E(en the trial court faile$ or refuse$ to resol(e this issue# not8ithstan$in3 the fact
that this 8as one of the 3roun$s raise$ in the motion file$ b% pri(ate respon$ent before it
to set asi$e the sale* Since it has ne(er been $enie$ that the bi$ price 3reatl% e7cee$e$
the mort3a3e $ebt# petitioner cannot be allo8e$ to unDustl% enrich himself at the e7pense
of pri(ate respon$ent*
s re3ar$s the issue concernin3 the alle3e$ $efect in the publication of the notice of
the sale# suffice it to state for purposes of this $iscussion that a Euestion of non'
compliance 8ith the notice an$ publication reEuirements of an e7traDu$icial foreclosure
sale is a factual issue an$ the resolution thereof b% the lo8er courts is bin$in3 an$
conclusi(e upon this Court#94<: absent an% sho8in3 of 3ra(e abuse of $iscretion* In the
case at bar# both the trial court an$ respon$ent Court of ppeals ha(e foun$ that the sale
8as con$ucte$ in accor$ance 8ith la8* No compellin3 reason e7ists in this case to Dustif%
a reDection of their fin$in3s or a re(ersal of their conclusions*
There is liFe8ise no merit in the ar3ument that if pri(ate respon$ent ha$ 8ante$ to
Euestion the (ali$it% of the sale# she shoul$ ha(e file$ a petition to set the same asi$e an$
to cancel the 8rit of possession* These# it is ar3ue$# shoul$ ha(e been $ispose$ of in
accor$ance 8ith the summar% proce$ure lai$ $o8n in Section ,,4 of the Lan$
Re3istration ct# pro(i$e$ the petition is file$ not later than thirt% $a%s after the
purchaser 8as 3i(en possession of the lan$* Consi$erin3# ho8e(er# that pri(ate
respon$ent has file$ a motion to set asi$e the sale an$ to $efer the issuance of a 8rit of
possession before the court 8here the e7 parte petition for issuance of such 8rit 8as then
pen$in3# 8e $eem the same to be substantial compliance 8ith the statutor% prescription*
&e# ho8e(er# taFe e7ception to an$ reDect the last para3raph in the $ispositi(e
portion of the Euestione$ $ecision of respon$ent court# 8hich 8e repeat0
IIn the e(ent that pri(ate respon$ent fails or refuses to pa% such e7cess or balance# then
the auction sale of 4. September ,==5 is $eeme$ CNCELLED an$ pri(ate respon$ent
@petitioner hereinA ma% foreclose the mort3a3e ane8 either in a Du$icial or e7traDu$icial
procee$in3 as stipulate$ in the mort3a3e contract*J
for lacF of statutor% an$ Durispru$ential bases* The Euote$ phrase Ias stipulate$ in the
mort3a3e contractJ $oes not# of course# en(ision such contin3enc% or 8arrant the
su33este$ alternati(e proce$ure*
Section - of Rule <-# hereinbefore Euote$# merel% pro(i$es that 8here there is a
balance or resi$ue after pa%ment of the mort3a3e# the same shall be pai$ to the
mort3a3or* &hile the e7pe$ient course $esire$ b% respon$ent court is commen$able#
there is nothin3 in the cite$ pro(ision from 8hich it can be inferre$ that a (iolation
thereof 8ill ha(e the effect of nullif%in3 the sale* The better rule is that if the mort3a3ee
is retainin3 more of the procee$s of the sale than he is entitle$ to# this fact alone 8ill not
affect the (ali$it% of the sale but simpl% 3i(es the mort3a3or a cause of action to reco(er
such surplus*94/: This is liFe8ise in harmon% 8ith the $ecisional rule that in suin3 for
the return of the surplus procee$s# the mort3a3or is $eeme$ to ha(e affirme$ the (ali$it%
of the sale since nothin3 is $ue if no (ali$ sale has been ma$e*94.:
In the earl% case of Caparas (s* 1atco# etc*# et al*#94=: it 8as also hel$ that 8here the
mort3a3ee has been or$ere$ b% the court to return the surplus to the mort3a3or or the
person entitle$ thereto# an$ the former fails to $o so an$ fla3rantl% $isobe%s the or$er# the
court can cite the mort3a3ee for contempt an$ mete out the correspon$in3 penalt% un$er
Section 5@bA of the former Rule <- @no8 Rule /,A of the Rules of Court*
&HEREGORE# the Euestione$ $ecision of the Court of ppeals is MODIGIED b%
$eletin3 the last para3raph of its fallo# but its $isposition of this case in all other respects
is hereb% GGIRMED*
SO ORDERED*
THIRD DIVISION
9+*R* No* ,,<4,,* March /# ,==/:
ME1NRDO POLICRPIO# petitioner# (s* CO2RT OG PPELS an$ ROSITO
P2ECHI S* 21# respon$ents*
D E C I S I O N
PN+NIBN# )*0
The Court fin$s occasion to appl% the 3eneral principles of constructi(e trust as
authori?e$ b% the Ci(il Co$e in 3rantin3 this petition an$ in compellin3 pri(ate
respon$ent to implement his trust relationship 8ith petitioner*
This is a petition un$er Rule -; of the Rules of Court to re(erse the Decision9,: of
public respon$ent94: in C'+*R* CV No* 54.4, promul3ate$ on March 4,# ,==-# an$
the Resolution95: promul3ate$ on )ul% ;# ,==-# $en%in3 petitionerQs motion for
reconsi$eration*
The $ispositi(e portion of the assaile$ Decision rea$s09-:
L&HEREGORE# in (ie8 of the fore3oin3# Du$3ment is hereb% ren$ere$0
,* REVERSIN+ an$ SETTIN+ SIDE the appeale$ $ecision $ate$ ,6 September
,==6H
4* DISMISSIN+ the ComplaintH an$
5* &ithout pronouncement as to costs*L
The Gacts
The facts of the case# as culle$ from the challen3e$ Decision# are simple* Petitioner
@alon3 8ith his co'plaintiffs in the antece$ent cases# namel%# Ro$olfo +a%atin# )ose
Villacin an$ )ocel%n MontinolaA9;: an$ pri(ate respon$ent 8ere former tenants of the
56'$oor Barretto partments formerl% o8ne$ b% Serapia Realt%# Inc** Sometime in pril
,=.-# pri(ate respon$ent 8as electe$ Presi$ent of the Barretto Tenants ssociation
@hereafter referre$ to as the LssociationLA 8hich 8as forme$# amon3 others# Lto
promote# safe3uar$ an$ protect the 3eneral interest an$ 8elfare of its members*L9<:
In a letter $ate$ )ul% 56# ,=.-# pri(ate respon$ent as presi$ent of the ssociation
sou3ht the assistance of the then Minister of Human Settlements to cause the
e7propriation of the subDect propert% un$er the 2rban Lan$ Reform Pro3ram for
subseEuent resale to its tenants* The matter 8as en$orse$ to the Human Settlements
Re3ulator% Commission# 8hich in a letter $ate$ No(ember ;# ,=.-# si3ne$ b%
Commissioner an$ Chief E7ecuti(e Officer Ernesto C* Men$iola# reDecte$ the tenantQs
reEuest for e7propriation* The letter state$ in part09/:
Lt the moment# the effects of the pro(isions of PD ,;,/# other8ise Fno8n as
the 2rban Lan$ Reform Decree# are limite$ onl% to the proclaime$ 4-; PDQs
an$Kor 2LR"Qs* Be informe$ further that# pursuant to Rule VIII P IS of the
Rules an$ Re3ulations of the abo(ementione$ Decree# e7propriation 8ill be
a(aile$ of onl% as a last resort as there are (arious mo$es of Lan$
cEuisitionKDisposition techniEues 8hich the Ministr% can a(ail of to help
bonafi$e @sicA tenantsKresi$ents of a certain area*L
Gailin3 to 3et the assistance of the 3o(ernment# the tenants un$ertooF to ne3otiate
$irectl% 8ith the o8ners of the Barretto partments* Initiall%# Pri(ate Respon$ent Rosito
2% orall% e7presse$ to Mrs* Rosita Barretto Ochoa the tenantsQ $esire to purchase their
respecti(e units* Later# in a letter $ate$ Ma% 4=# ,=.;# si3ne$ b% thirt% @56A tenants of the
commercial an$ resi$ential units# the tenants formall% e7presse$ to Mrs* Ochoa their
intent to purchase*
On )ul% 4/# ,=.;# Serapia Real Estate# Inc*# sent to Rosito 2%# in his capacit% as
presi$ent of the ssociation# the follo8in3 letter09.:
LSir0
This is in response to %our letter re3ar$in3 %our intent to bu% our propert%
to3ether 8ith its impro(ements locate$ at corners Hai3 an$ Romual$e? Streets
an$ alon3 +en* Oalenton3 Street# Man$alu%on3# Metro Manila* &e 8oul$ liFe
to inform %ou that 8e are offerin3 to sell the sai$ propert% at a price of GO2R
MILLION GIVE H2NDRED THO2SND @P-#;66#666*66A PESOS ONL1#
un$er the follo8in3 Terms an$ Con$itions0
RE0 4#45/ sEuare meters
Manner of Pa%ment0 n earnest mone% of P,66#66*66 8ithin 56 $a%s*
Gull pa%ment pa%able 8ithin <6 $a%s*
This offer is on a QGIRST COME GIRST SERVED BSISQ an$ our price is 3oo$
onl% 8ithin <6 $a%s or until September 56# ,=.; onl%*
ThanF 1ou*L
In a$$ition# Serapia Realt%# Inc*# sent to spouses +a%atin a mimeo3raphe$ letter
statin309=:
LNo(ember ,;# ,=.;
Mr*KMrs* +a%atin
SIRKMDM0
Please be informe$ that 8e are inten$in3 to sell the unit %ou are no8 occup%in3*
&e are therefore 3i(in3 %ou the first priorit% to purchase the same# if %ou $esire*
&e are 3i(in3 %ou a perio$ of ten @,6A $a%s from receipt hereof to see us@#A
other8ise# 8e 8ill consi$er %our inaction a 8ai(er in @sicA %our part to purchase
the same*
Ver% trul% %ours#
SERGI RELT1 INC*
B%0 SK Mrs* Rosa B* Ochoa
TK Mrs* Rosa B* Ochoa
Oalenton3 Man$alu%on3#
Metro Manila
@uthori?e @sicA
representati(eAL
On No(ember 46# ,=.;# Ro$olfo +a%atin acFno8le$3e$ receipt of the sai$ letter
8ith a reEuest that he be furnishe$ 8ith the follo8in3 information09,6:
Ia* Consi$eration of the saleH
b* Terms an$ con$itions of the saleH an$
c* Plan in$icatin3 the areas an$ boun$aries of each unit*L
Letters acFno8le$3in3 receipt of Mrs* OchoaQs letter of intent to sell the apartment
unit occupie$ b% the tenants 8ere sent b% Dionisio EnriEue? an$ Elena )* Ba>ares* The
tenants $esi3nate$ an$ appointe$ pri(ate respon$ent as their presi$ent to ne3otiate 8ith
Serapia Realt%# Inc** But the ne3otiations apparentl% $i$ not ripen into a perfecte$ sale*
One an$ a half %ears later# on March ,4# ,=./# petitioner an$ his co'plaintiffs 8ere
notifie$ that pri(ate respon$ent 8as the ne8 o8ner of the apartment units occupie$ b%
them* Belie(in3 that the% ha$ been betra%e$ b% their ssociation presi$ent# petitioner
sue$ for LRe$emption an$ Dama3es 8ith Pra%er Gor Preliminar% InDunction*L
Pri(ate respon$ent counter'sue$ for Dama3es an$ ccion Publiciana 8ith
Preliminar% ttachment* )oint trial of the t8o cases ensue$* The trial court foun$ that
pri(ate respon$ent ha$ been $esi3nate$ an$ entruste$ b% plaintiffs to ne3otiate 8ith the
Barretto famil% for the sale of the units* It also foun$ that a constructi(e trust 8as create$
bet8een the pri(ate respon$ent as Lthe cestui Eue trust 9shoul$ be trustee: an$ plaintiffs
as beneficiaries 9or cestuis Eue trust: (is'W'(is the subDect units*L9,,: The $ispositi(e
portion of the trial court $ecision rea$s09,4:
L&HEREGORE# Du$3ment is hereb% ren$ere$ in the abo(e'entitle$ cases in
fa(or of plaintiffs Ro$olfo +a%atin# )ose Villacin# )ocel%n Montinola an$
Me%nar$o Policarpio# an$ a3ainst $efen$ant# Rosito Puechi S* 2%# '
,* Or$erin3 sai$ $efen$ant to e7ecute the correspon$in3 $ee$s of con(e%ance in
fa(or of plaintiffs Me%nar$o Policarpio# )ocel%n Montinola# )ose Villacin an$ Ro$olfo
+a%atin co(erin3 Door .# Lot ,-H Door 5# Lot =H Door 4# Lot =H an$ Door ,# Lot =# upon
refun$ b% the plaintiffs to the $efen$ant of the sums of P5;#466*66H P5;#;46*66H
P5;#<66*66 an$ P-/#466*66 respecti(el%# 8ithout an% interest*
Shoul$ $efen$ant 2% fail to so e7ecute the $ee$s of con(e%ance herein or$ere$ 8ithin
fifteen @,;A $a%s from finalit% of Du$3ment# the ClerF of this Court 8ill e7ecute the same
an$ the Re3ister of Dee$s 8ill be or$ere$ to nullif% the certificates of title in the name of
sai$ $efen$ant an$ to issue other certificates of title in fa(or of the four abo(e'name$
plaintiffs# respecti(el%H an$ to pa% to the plaintiffs the follo8in3 sums0
aA P,;#666*66 as attorne%Qs feesH
bA P-6#666*66 as moral $ama3esH an$
cA P46#666*66 as e7emplar% $ama3es#
all 8ith interest at ,4V per annum from $ate of this $ecisionH
4* Dismissin3 the Complaint in Ci(il Case No* ;---- as far as $efen$ant Serapia
Real Estate Inc* is concerne$H
5* Dismissin3 $efen$antsQ counterclaims in Ci(il Case No* ;----H an$
-* Dismissin3 Rosito Puechi 2%Qs complaint in Ci(il Case No* ;;/5=*
Costs a3ainst $efen$ant 2%*L
Pri(ate respon$ent appeale$ the $ecision to public respon$ent 8hich as earlier state$
re(erse$ the $ecision an$ $enie$ the subseEuent motion for reconsi$eration* Hence# this
petition onl% b% Me%nar$o Policarpio* His co'plaintiff in the antece$ent case# )ose
Villacin# file$ a Petition for Inter(ention9,5: on March 4.# ,==;# 8hich the Girst
Di(ision of this Court in a Resolution $ate$ )une 4<# ,==;# $enie$ for lacF of merit#
because VillacinQs earlier petition $ocFete$ as +*R* No* ,,<,5/ @)ose Villacin (s* Court of
ppeals# et al*A ha$ alrea$% been $ismisse$ for failure to attach an affi$a(it of ser(ice*
9,-:
The Issue
The sole issue raise$ b% petitioner in this appeal is09,;:
LThe respon$ent Court erre$ in re(ersin3 the fin$in3 of the trial court that a
constructi(e trust e7iste$ bet8een the plaintiffs an$ the $efen$ant*L
Public respon$ent# in fin$in3 that a constructi(e trust ha$ not been create$# rule$09,<:

LThe contemporar% an$ subseEuent acts of the parties herein fail to con(ince 2s
that a constructi(e trust e7ists for the benefit of the appellees @tenantsA*
rea$in3 of the rticles of Incorporation of Barretto partment Tenants
ssociation# Inc* @E7h* Q)QA sho8s that the purpose for its formation is couche$ in
3eneral terms 8ithout specificall% stipulatin3 the propose$ purchase an$ sale of
the apartment units* &hile it ma% be conce$e$ that the sale to the tenants 8as a
3eneral concern that 8oul$ ha(e re$oun$e$ to their benefit# still it cannot be
$enie$ that the transaction coul$ not ha(e been effecte$ unless the tenants an$
the o8ners came to terms re3ar$in3 the sale* The recor$ re(eals that appellant
@herein pri(ate respon$entA $i$ in fact sen$ se(eral communications# first to the
Ministr% of Human Settlements an$ 8hen this a(enue $i$ not prosper# to the
Barretto famil% in an effort to pursue their common $esire to o8n their
respecti(e unit@sA* The letter to the Minister of Human Settlements is $ate$ )ul%
56# ,=.- @E7h* Q)QA about a %ear before the e7ecution of the rticles of
Incorporation on 6< u3ust ,=.;* Inci$entall%# no e(i$ence appears on recor$ to
sho8 that the ssociation file$ the reEuisite $ocuments for incorporation 8ith
the Securities an$ E7chan3e Commission*
The Dee$s of bsolute Sale in fa(or of appellant o(er appelleesQ unit appear to
ha(e been e7ecute$ on 6; u3ust ,=.< @E7hs* QBQ to QGQA or about t8o @4A %ears
after appellant 8as $esi3nate$ Presi$ent of the ssociation an$ appro7imatel%
one @,A %ear after the rticles of Incorporation 8ere $ra8n up an$ si3ne$ b% the
parties* @E7hibit QSQAL
Public respon$ent conten$e$ that plaintiffs 8ere informe$ of the ne3otiations for the
purchase an$ sale of propert%* Gurther# public respon$ent sai$0
Lit appears incumbent upon the tenants to (erif% from time to time on @sicA the
pro3ress of the ne3otiations not onl% from Mrs* Ochoa but also from appellant
8ho li(e @sicA in the same apartment comple7* Their inaction lea$s to the
impression that the% lacFe$ interest to pursue their ori3inal plan to purchase the
propert% or the% coul$ not a3ree on the terms an$ con$itions for the sale*L9,/:
Before us# petitioner ar3ues that public respon$ent erre$ in statin3 that Lthere 8as no
common interest on the part of the members of the association to purchase units the%
8ere occup%in3*L9,.: He also maintains that it is immaterial 8hether the intent to bu%
the units 8as specificall% state$ in the purposes of the ssociation* &hat is important is
that the Icontemporar% an$ subseEuent acts of parties in$icate$ such a purpose*L
Petitioner insists that the tenants ha$ authori?e$ an$ pri(ate respon$ent ha$ a3ree$ to
ne3otiate 8ith the o8ners re3ar$in3 the terms of the sale# precisel% to conform to the
$esire of the o8ners to $eal 8ith onl% one person* Petitioner (ehementl% $enies that the
co'tenants of pri(ate respon$ent Lha$ re(oFe$ or 8ith$ra8n the authorit% an$ trust
repose$ on the pri(ate respon$ent to act as ne3otiator in their behalf*L9,=:
Pri(ate respon$ent rebuts b% sa%in3 that the entire propert% consistin3 of thirt% @56A
$oors 8as not sol$ on one particular $ate* Rather# there 8ere actuall% t8o batches of
sale* He asserts that petitioner# in fei3nin3 i3norance of the t8o batches of sale an$ suin3
pri(ate respon$ent# ha$ create$ an alibi to suspen$ pa%ment of rental for %ears*946:
It shoul$ also be consi$ere$# states pri(ate respon$ent# that upon $enial of the
tenantsQ reEuest for e7propriation b% the Ministr% of Human Settlements# an$ the
re(elation that BarrettoQs apartments 8ere hea(il% encumbere$# tenants Lcompletel%
aban$one$ the plan to or3ani?e a formal association*L ssumin3 for the saFe of ar3ument#
a$$s pri(ate respon$ent# that the informal ssociation create$ a relationship amon3 the
parties# Lthe same cease$ an$ e7pire$ b% (irtue of the act of the o8ners of the apartment
8ho $irectl% $eal 8ith the tenantsL un$er rticle ,=4-94,: of the Ci(il Co$e*944:
The CourtQs Rulin3
&e fin$ for petitioner*
s a rule# the Duris$iction of this Court in cases brou3ht before it from the Court of
ppeals is limite$ to the re(ie8 an$ re(ision of errors of la8 alle3e$l% committe$ b% the
appellate court* Ho8e(er# 8hen there is conflict bet8een the factual fin$in3s of the Court
of ppeals an$ the trial court#945: the Court ma% re(ie8 such fin$in3s an$ conclusions#
as 8e no8 $o*
&e hol$ that an implie$ trust 8as create$ b% the a3reement bet8een petitioner @an$
the other tenantsA an$ pri(ate respon$ent* Implie$ trusts are those 8hich# 8ithout bein3
e7presse$# are $e$ucible from the nature of the transaction b% operation of la8 as matters
of eEuit%# in$epen$entl% of the particular intention of the parties*94-: Constructi(e trusts
are create$ in or$er to satisf% the $eman$s of Dustice an$ pre(ent unDust enrichment* The%
arise a3ainst one 8ho# b% frau$# $uress or abuse of confi$ence# obtains or hol$s the le3al
ri3ht to propert% 8hich he ou3ht not# in eEuit% an$ 3oo$ conscience# to hol$*94;: It is
not necessar% that the intention of the tenants to purchase their apartments units be
cate3oricall% state$ in the purposes of their ssociation* constructi(e trust as in(oFe$
b% petitioner can be implie$ from the nature of the transaction as a matter of eEuit%#
re3ar$less of the absence of such intention in the purposes of their ssociation* Durin3
his ne3otiations 8ith Serapia Realt%# Inc*# pri(ate respon$ent a$mitte$ that he 8as not
onl% representin3 himself but also the other tenants as presi$ent of the ssociation* This
a$mission reco3ni?e$ the confi$ence repose$ in him b% his co'tenants* He testifie$094<:
LM part from the Re3ulator% Commission# an$ from the Girst La$% Imel$a
Marcos# %ou $i$ not maFe an% communication to an% person or bo$% in
%our capacit% as Presi$ent of the ssociation an%moreN
&e also trie$ to ne3otiate 8ith Mr* Ochoa*
M &hat 8as %our purpose of attemptin3 to communicate 8ith Mr* OchoaN
So that those 8ho cannot affor$ to pa% in cash can be allo8e$ to pa% in
installment*
M 1ou use$ the 8or$ Q8eQ# to 8hom are %ou referrin3 toN
M% co'tenants in the apartment*
M n$ 8hen %ou ma$e representations 8ith the o8ner of the apartment# %ou
8ere $oin3 this in %our capacit% as Presi$entN
Both as in$i(i$ual member an$ as Presi$ent*
M In %our capacit% as both in$i(i$ual member an$ Presi$entN
1es# sir*L
lfonso Barretto# presi$ent of Serapia Realt% Estate Corporation# testifie$ that the
o8ners 8ante$ to $eal 8ith one LspoFesman*L94/: Hence# the tenants authori?e$ pri(ate
respon$ent to ne3otiate on their behalf* 2nfortunatel%# pri(ate respon$ent ne3otiate$ for
himself onl%# an$ successfull% purchase$ ei3ht @.A apartment units an$ secure$ an
authorit% to sell the remainin3 t8ent%'t8o @44A units*
Pri(ate respon$ent alle3es that# after bein3 informe$ b% the o8ner# petitioner#
to3ether 8ith the latterQs co'plaintiffs in the action for re$emption# $i$ not 8ant to
contribute fun$s to re$eem the encumbere$ apartment* @Such re$emption 8as reEuire$
before the units coul$ be sol$*A The trial court $ebunFe$ this alle3ation thus094.:
L 7 7 7* It ta7es the min$ no en$ to accept $efen$antQs claim that 8hen the units
8hich the tenants ha(e for %ears been $reamin3 of o8nin3 one $a% 8ere rea$%
to be sol$ to them# all of them 8oul$ su$$enl% become Xreluctant#Q to Euote his
8or$# to bu% them* Consi$erin3 the (irtuall% @sicA 3i(e'a8a% consi$erations
@P-4#466*66# P5;#<66*66# P5;#;46*66 an$ P5;#466*66A for the subDect units all of
8hich 8ere uniforml% t8o'store% apartments 8ith Q4 be$rooms# li(in3 an$
$inin3 rooms an$ FitchenQ @citin3 TSN# )anuar% ,4# ,==6# p* /A situate$ in a
strate3ic an$ prime area# it is unbelie(able an$ inconsistent 8ith the or$inar%
imperati(es of human e7perience for the plaintiffs to su$$enl% sho8 reluctance
to8ar$s the opportunit% the% ha(e been e7pectin3 an$ preparin3 for all alon3*L
If onl% the tenants ha$ been informe$ b% pri(ate respon$ent of this pre$icament of
the o8ners# surel% the% 8oul$ ha(e raise$ the reEuire$ amount to re$eem the propert%
an$# in turn# acEuire$ the units bein3 rente$ b% them* The incriminatin3 a$mission of
pri(ate respon$ent that he ha$ not informe$ the plaintiffs in the re$emption case of the
prices at 8hich the apartment units 8ere sol$ $emonstrate$ be%on$ ca(il his betra%al of
their trust094=:
LM Di$ %ou inform (er3all% @sicA these - plaintiffs that their apartments 8ere
bein3 bou3ht at P-/#466*66# P5;#<66# P5;#;46 an$ P5;#466N
I $i$ not*
M s Presi$ent of the association 8ho 3ot the trust an$ confi$ence of the
members inclu$in3 the - plaintiffs# $i$ %ou not consi$er it in Feepin3 8ith
trust an$ confi$ence to officiall% inform them that these apartments is @sicA
bein3 sol$ at that @sicA prices an$ if %ou coul$ bu% this @sicA# %ou pa% this
@sicA amount* 1ou $i$ not inform them# is it notN
TT1* BLLELOS @counsel for pri(ate respon$entA0
lrea$% ans8ere$* He $i$ not inform them but as far as the amount is
concerne$ as a matter of $iscretion*L
The abilit% of the tenants to pa% the purchase price for their units 8as clearl% foun$
b% trial court to be sufficientH an$ this fin$in3 8as not conteste$ b% pri(ate respon$ent# to
8it0956:
LThe abilit% of the plaintiffs to pa% for their respecti(e apartment units in
Euestion is $emonstrate$ 8hen the% promptl% complie$ 8ith the CourtQs Or$er
of March ,;# ,==6 Xto pa% to the Branch ClerF of this Court all the rentals $ue
on their respecti(e units from the time the% stoppe$ pa%in3 up to this month of
March# 8hich amounts 8ere or$ere$ to be $eposite$ X8ith the Philippine
National BanF# Pasi3 Branch# Sha8 Bl($*# Pasi3# in self'rene8in3 ,46'$a% time
$eposits#Q 8hich no8 stan$s at P,4<#-5-*.- @inclu$in3 Xthe monthl% rentals in
the same amount that the% 8ere last pa%in3 to $efen$ant Serapia Real Estate#
Inc*#Q from the month of pril ,==6 to )ul% ,==6A per PNB Certificates of Time
Deposit Nos* /,5<5/'C# /,5<5.'C# /,5<5='C# /,5<-6'C an$ </,5<-,'C# all
$ate$ u3ust 56# ,==6# no8 in the possession of the Branch ClerF of this Court*L
The tenants coul$ not be faulte$ for not inEuirin3 into the status of pri(ate
respon$entQs ne3otiation 8ith the o8ners of the apartments* The% ha$ a ri3ht to e7pect
pri(ate respon$ent to be true to his $ut% as their representati(e an$ to taFe the initiati(e of
informin3 them of the pro3ress of his ne3otiations*
The sale of the apartments in fa(or of pri(ate respon$ent 8as on u3ust <# ,=.<*
1et# it 8as onl% on March 4/# ,=./# that he informe$ the tenants of such sale* If he 8as
in 3oo$ faith# 8h% the $ela%N Ob(iousl%# he hi$ the perfection of the sale from them*
&h% $i$ he not inform the tenants that he 8as the o8ner as soon as the sale 8as
consummate$ if# accor$in3 to him# his co'tenants 8ere un8illin3 to share the e7penses of
re$emptionN His co'tenants coul$ not ha(e blame$ him for acEuirin3 the entire propert%H
after all# the% suppose$l% $i$ not ha(e the mone% to contribute* Trul%# the actuations of
pri(ate respon$ent sho8 nothin3 but 3ree$ on his partH he purchase$ the units for himself
at bar3ain prices so he coul$ resell them at a profit at the e7pense of the tenants* This
(iolation of the trust repose$ in him 8arrants the sanction pro(i$e$ b% the eEuitable rule
on 8hich constructi(e trust is foun$e$* 2nfortunatel%# ho8e(er# not all the plaintiffs in
the ori3inal re$emption case 8ill be able to a(ail of this a8ar$ because a part% 8ho has
not appeale$ from the $ecision ma% not obtain an% affirmati(e relief from the appellate
court other than 8hat he ha$ obtaine$ from the lo8er court# if an%# 8hose $ecision is
brou3ht up on appeal*95,:
The conclusion 8e thus reach in this case# fin$in3 constructi(e trust un$er rticle
,--/954: of the Ne8 Ci(il Co$e# rests on the 3eneral principles on trust 8hich# b%
rticle ,--4# ha(e been a$opte$ or incorporate$ into our ci(il la8# to the e7tent that such
principles are not inconsistent 8ith the Ci(il Co$e# other statutes an$ the Rules of Court*
This Court has rule$ in the case of Sumaoan3 (s* )u$3e# RTC# Br* SSSI# +uimba#
Nue(a EciDa955: that0
L constructi(e trust# other8ise Fno8n as a trust e7 maleficio# a trust e7 $elicto#
a trust $e son tort# an in(oluntar% trust# or an implie$ trust# is a trust b% operation
of la8 8hich arises contrar% to intention an$ in in(itum# a3ainst one 8ho# b%
frau$# actual or constructi(e# b% $uress or abuse of confi$ence# b% commission
of 8ron3# or b% an% form of unconscionable con$uct# artifice# concealment# or
Euestionable means# or 8ho in an% 8a% a3ainst eEuit% an$ 3oo$ conscience#
either has obtaine$ or hol$s the le3al ri3ht to propert% 8hich he ou3ht not# in
eEuit% an$ 3oo$ conscience# hol$ an$ enDo%* It is raise$ b% eEuit% to satisf% the
$eman$s of Dustice* Ho8e(er# a constructi(e trust $oes not arise on e(er% moral
8ron3 in acEuirin3 or hol$in3 propert% or on e(er% abuse of confi$ence in
business or other affairsH or$inaril% such a trust arises an$ 8ill be $eclare$ onl%
on 8ron3ful acEuisitions or retentions of propert% of 8hich eEuit%# in accor$ance
8ith its fun$amental principles an$ the tra$itional e7ercise of its Duris$iction or
in accor$ance 8ith statutor% pro(ision# taFes co3ni?ance* It has been broa$l%
rule$ that a breach of confi$ence# althou3h in business or social relations#
ren$erin3 an acEuisition or retention of propert% b% one person unconscionable
a3ainst another# raises a constructi(e trust*
n$ specificall% applicable to the case at bar is the $octrine that Q constructi(e
trust is substantiall% an appropriate reme$% a3ainst unDust enrichment* It is
raise$ b% eEuit% in respect of propert%# 8hich has been acEuire$ b% frau$# or
8here althou3h acEuire$ ori3inall% 8ithout frau$# it is a3ainst eEuit% that it
shoul$ be retaine$ b% the person hol$in3 it*Q
The abo(e principle is not in conflict 8ith the Ne8 Ci(il Co$e# Co$es of
Commerce# Rules of Court an$ special la8s* n$ since &e are a court of la8
an$ of eEuit%# the case at bar must be resol(e$ on the 3eneral principles of la8
on constructi(e trust 8hich basicall% rest on eEuitable consi$erations in or$er to
satisf% the $eman$s of Dustice# moralit%# conscience an$ fair $ealin3 an$ thus
protect the innocent a3ainst frau$* s the respon$ent court sai$# QIt behoo(es
upon the courts to shiel$ fi$uciar% relations a3ainst e(er% manner of chicaner%
or $etestable $esi3n cloaFe$ b% le3al technicalities*QL
lthou3h the citations in the sai$ case ori3inate$ from merican Durispru$ence# the%
ma% 8ell be applie$ in our Duris$iction* L@SAince the la8 of trust has been more
freEuentl% applie$ in En3lan$ an$ in the 2nite$ States than it has been in Spain# 8e ma%
$ra8 freel% upon merican prece$ents in $eterminin3 the effects of trusts# especiall% so
because the trusts Fno8n to merican an$ En3lish eEuit% Durispru$ence are $eri(e$ from
the fi$ei commissa of the Roman La8 an$ are base$ entirel% upon ci(il la8
principles*L95-:
Ha(in3 conclu$e$ that pri(ate respon$ent 8illfull% (iolate$ the trust repose$ in him
b% his co'tenants# 8e consi$er it a serious matter of LDustice# moralit%# conscience an$ fair
$ealin3L that he shoul$ not be allo8e$ to profit from his breach of trust* LE(er% person
8ho throu3h an act of performance b% another# or an% other means# acEuires or comes
into possession of somethin3 at the e7pense of the latter 8ithout Dust or le3al 3roun$#
shall return the same to him*L95;: Thus# petitioner is 3rante$ the opportunit% to purchase
the propert% 8hich shoul$ ha(e been his lon3 a3o ha$ pri(ate respon$ent been faithful to
his trust*
&e onl% re3ret that 8e cannot 3rant the same opportunit% to the other beneficiaries
or cestuis Eue trust for their failure to perfect their petitions for re(ie8 of the respon$ent
CourtQs Decision*
&HEREGORE# the petition is hereb% +RNTED* The assaile$ Decision an$
Resolution are hereb% REVERSED an$ SET SIDE* Consistent 8ith the trial courtQs
$ecision# Pri(ate Respon$ent Rosito Puechi S* 2% is ORDERED to ESEC2TE a $ee$ of
con(e%ance co(erin3 Door .# Lot ,-# in fa(or of Petitioner Me%nar$o Policarpio upon the
latterQs pa%ment ofP5;#466*66 8ithout an% interest*
No costs*
SO ORDERED*
+*R* No* ,5<64, Gebruar% 44# 4666
BENI+N SEC21# MI+2EL SEC21# MRCELINO SEC21# COR"ON
SEC21# R2GIN SEC21# BERNRDINO SEC21# NTIVIDD SEC21#
+LICERI SEC21 an$ P2RIT SEC21# petitioners#
(s*
+ERRD M* VD* DE SELM# respon$ent*
PN+NIBN# )*0
In action for Euietin3 of title# the plaintiff must sho8 not onl% that there is a clou$ or
contrar% interest o(er the subDect real propert%# but that the ha(e a (ali$ title to it* In the
present case# the action must fail# because petitioners faile$ to sho8 the reEuisite title*
The Case
Before us is a Petition for Re(ie8 seeFin3 to set asi$e the )ul% 56# ,==. Decision of the
Court of ppeals @CA in C'+*R* CV No* 5.;.6#, 8hich affirme$ the Du$3ment4 of the
Re3ional Trial Court @RTCA of Cebu Cit%* The C rule$0
&HEREGORE# 9there bein3: no error in the appeale$ $ecision# the same is hereb%
GGIRMED in toto*5
The $ecretal portion of the trial court Decision rea$s as follo8s0
&HEREGORE# in (ie8 of all the fore3oin3 9e(i$ence: an$ consi$erations# this court
hereb% fin$s the prepon$erance of e(i$ence to be in fa(or of the $efen$ant +erar$a
Selma as Du$3ment is ren$ere$0
,* Dismissin3 this Complaint for Muietin3 of title# Cancellation of Certificate of Title
of +erar$a ($a* $e Selma an$ $ama3es#
4* Or$erin3 the plaintiffs to (acate the premises in Euestion an$ turn o(er the
possession of the same to the $efen$ant +erar$a SelmaH
5* ReEuirin3 the plaintiffs to pa% $efen$ant the sum of P46#666 as moral $ama3es#
accor$in3 to rt* 44,/# attorne%Qs fees of P,;#666*66# liti3ation e7penses of
P;#666*66 pursuant to rt* 446. No* ,, an$ to pa% the costs of this suit*,Y8phi,*nZt
SO ORDERED*-
LiFe8ise challen3e$ is the October ,-# ,==. C Resolution 8hich $enie$ petitionersQ
Motion for Reconsi$eration*;
The Gacts
The present Petition is roote$ in an action for Euietin3 of title file$ before the RTC b%
Beni3na# Mi3uel# Marcelino# Cora?on# Rufina# Bernar$ino# Nati(i$a$# +liceria an$ Purita
T all surname$ Secu%a T a3ainst +erar$a M* ($a* $e Selma* Petitioners asserte$
o8nership o(er the $ispute$ parcel of lan$# alle3in3 the follo8in3 facts0
7 7 7 7 7 7 7 7 7
.* The parcel of lan$ subDect of this case is a PORTION of Lot ;</= of the Talisa%'
Min3lanilla Griar Lan$s Estate# referre$ to an$ co(ere$ 9o:n Pa3e 4/=# Griar Lan$s
Sale Certificate Re3ister of the Bureau of Lan$s @E7h* LOLA* The propert% 8as
ori3inall% sol$# an$ the co(erin3 patent issue$# to Ma7ima Caballero V$a* $e Cari>o
@E7hs* LO',LH LO'4A* Lot ;</= has an area of ,4#/;6 sEuare meters# more or lessH
=* Durin3 the lifetime of Ma7ima Caballero# (en$ee an$ patentee of Lot ;</=# she
entere$ into that +REEMENT OG PRTITION $ate$ )anuar% ;# ,=5. 8ith
Paciencia Sabellona# 8hereb% the former boun$ herself an$ parte$ 98ith: one'thir$
@,K5A portion of Lot ;</= in fa(or of the latter @E7h* LDLA* mon3 others it 8as
stipulate$ in sai$ a3reement of partition that the sai$ portion of one'thir$ so ce$e$
8ill be locate$ a$Doinin3 the municipal roa$ @par* ;* E7h LDLAH
,6* Paciencia Sabellona tooF possession an$ occupation of that one'thir$ portion of
Lot ;</= a$Du$icate$ to her* Later# she sol$ the three thousan$ sEuare meter portion
thereof to Dalmacio Secu%a on October 46# ,=;5# for a consi$eration of ONE
THO2SND EI+HT H2NDRED GIGT1 PESOS @P,#.;6*66A# b% means of a pri(ate
$ocument 8hich 8as lost @p* .# tsn*# .K.K.='Cal?a$aA* Such sale 8as a$mitte$ an$
confirme$ b% Ramon Sabellona# onl% heir of Paciencia Sabellona# per that instrument
$enominate$ CONGIRMTION OG SLE OG 2NDIVIDED SHRES# $ate$
September 4.# ,=/<@E7h* LBLAH
,,* Ramon Sabellona 8as the onl% 9or: sole (oluntar% heir of Paciencia Sabellona#
per that OTP2SN N+ OB2T'ON 2+ PN2+ON NI PCIENCI
SBELLON @Last &ill an$ Testament of Paciencia SabellonaA# $ate$ )ul% =# ,=;-#
e7ecute$ an$ acFno8le$3e$ before Notar% Public Teo$oro P* Villarmina @E7h* LCLA*
Pursuant to such 8ill# Ramon Sabellona inherite$ all the properties left b% Paciencia
SabellonaH
,4* fter the purchase 9b%: Dalmacio Secu%a# pre$ecessor'in interest of plaintiffs of
the propert% in liti3ation on October 46# ,=;5# Dalmacio# to3ether 8ith his brothers
an$ sisters T he bein3 sin3le T tooF ph%sical possession of the lan$ an$ culti(ate$
the same* In ,=</# E$ilberto Superales marrie$ Rufina Secu%a# niece of Dalmacio
Secu%a* &ith the permission an$ tolerance of the Secu%as# E$ilberto Superales
constructe$ his house on the lot in Euestion in )anuar% ,=/- an$ li(e$ thereon
continuousl% up to the present @p* .*# tsn /K4;K.. T DaclanA* Sai$ house is insi$e Lot
;</='C',4'B# alon3 lines ,.',='46 of sai$ lot# per Certification $ate$ u3ust ,6#
,=.;# b% +eo$etic En3ineer Celestino R* Oro?co @E7h* LGLAH
,5* Dalmacio Secu%a $ie$ on No(ember 46# ,=<,* Thus his heirs T brothers# sisters#
nephe8s an$ nieces T are the plaintiffs in Ci(il Case No* CEB'-4-/ an$ no8 the
petitionersH
,-* In ,=/4# $efen$ant'respon$ent +erar$a Selma bou3ht a ,#666 sEuare'meter
portion of Lot ;</=# e(i$ence$ b% E7hibit LPL* Then on Gebruar% ,=# ,=/;# she
bou3ht the bi33er bulF of Lot ;</=# consistin3 of =#564 sEuare meters# e(i$ence$ b%
that $ee$ of absolute sale# marFe$ as E7hibit L;L* The lan$ in Euestion# a 5#666'
sEuare meter portion of Lot ;</=# is embrace$ an$ inclu$e$ 8ithin the boun$ar% of
the later acEuisition b% respon$ent SelmaH
,;* Defen$ant'respon$ent +erar$a Selma lo$3e$ a complaint# an$ ha$ the plaintiffs'
petitioners summone$# before the Baran3a% Captain of the place# an$ in the
confrontation an$ conciliation procee$in3s at the Lupon3 Ta3apa%apa# $efen$ant'
respon$ent Selma 8as assertin3 o8nership o(er the lan$ inherite$ b% plaintiffs'
petitioners from Dalmacio Secu%a of 8hich the% ha$ lon3 been in possession * * * in
concept of o8ner* Such claim of $efen$ant'respon$ent Selma is a clou$ on the title
of plaintiffs'petitioners# hence# their complaint @nne7 LCLA*<
Respon$ent SelmaQs (ersion of the facts# on the other han$# 8as summari?e$ b% the
appellate court as follo8s0
She is the re3istere$ o8ner of Lot ;</='C',46 consistin3 of =#564 sEuare meters as
e(i$ence$ b% TCT No* T'5;</. @E7hibit L<L# Recor$# p* 54-A# ha(in3 bou3ht the
same sometime in Gebruar% ,=/; from Cesaria Caballero as e(i$ence$ b% a notari?e$
Dee$ of Sale @E7hibit L;L# Recor$# p* 545A an$ ha9(e: been in possession of the same
since then* Cesaria Caballero 8as the 8i$o8 of Sil(estre ro# re3istere$ o8ner of the
mother lot# Lot* No* ;</= 8ith an area of ,4#/;6 sEuare meters of the Talisa%'
Min3lanilla Griar Lan$s Estate# as sho8n b% Transfer Certificate of Title No* -/;4
@E7hibit L,6L# Recor$# p* 5-6A* 2pon Sil(estre roQs $emise# his heirs e7ecute$ an
LE7traDu$icial Partition an$ Dee$ of bsolute SaleL @E7hibit L,,L# Recor$# p* 5-,A
8herein one'half plus one'fifth of Lot No* ;</= 8as a$Du$icate$ to the 8i$o8#
Cesaria Caballero# from 8hom $efen$ant'appellee $eri(es her title*/
The C Rulin3
In affirmin3 the trial courtQs rulin3# the appellate court $ebunFe$ petitionersQ claim of
o8nership of the lan$ an$ uphel$ Respon$ent SelmaQs title thereto* It hel$ that
respon$entQs title can be trace$ to a (ali$ TCT* On the other han$# it rule$ that petitioners
anchor their claim on an L3reement of PartitionL 8hich is (oi$ for bein3 (iolati(e of the
Public Lan$ ct* The C note$ that the sai$ la8 prohibite$ the alienation or
encumbrance of lan$ acEuire$ un$er a free patent or homestea$ patent# for a perio$ of
fi(e %ears from the issuance of the sai$ patent*
Hence# this Petition*.
The Issues
In their Memoran$um# petitioners ur3e the Court to resol(e the follo8in3 Euestions0
,* &hether or not there 8as a (ali$ transfer or con(e%ance of one'thir$ @,K5A portion
of Lot ;</= b% Ma7ima Caballero in fa(or of Paciencia Sabellona# b% (irtue of 9the:
3reement of Partition $ate$ )anuar% ;# ,=5.9H: an$
4* &hether or not the trial court# as 8ell as the court# committe$ 3ra(e abuse of
$iscretion amountin3 to lacF of Duris$iction in not maFin3 a fin$in3 that respon$ent
+erar$a M* ($a* $e Selma 98as: a bu%er in ba$ faith 8ith respect to the lan$# 8hich
is a portion of Lot ;</=*=
Gor a clearer un$erstan$in3 of the abo(e matters# 8e 8ill $i(i$e the issues into three0
first# the implications of the 3reement of PartitionH secon$# the (ali$it% of the Dee$ of
Confirmation of Sale e7ecute$ in fa(or of the petitionersH an$ thir$# the (ali$it% of pri(ate
respon$entQs title*
The CourtQs Rulin3
The Petition fails to sho8 an% re(ersible error in the assaile$ Decision*
Preliminar% Matter0
The ction for Muietin3 of Title
In an action to Euiet title# the plaintiffs or complainants must $emonstrate a le3al or an
eEuitable title to# or an interest in# the subDect real propert%*,6 LiFe8ise# the% must sho8
that the $ee$# claim# encumbrance or procee$in3 that purporte$l% casts a clou$ on their
title is in fact in(ali$ or inoperati(e $espite its prima facie appearance of (ali$it% or le3al
efficac%*,, This point is clear from rticle -/< of the Ci(il Co$e# 8hich rea$s0
&hene(er there is clou$ on title to real propert% or an% interest therein# b% reason of
an% instrument# recor$# claim# encumbrance or procee$in3 8hich is apparentl% (ali$
or effecti(e but is in truth an$ in fact in(ali$# ineffecti(e# (oi$able or unenforceable#
an$ ma% be preDu$icial to sai$ title# an action ma% be brou3ht to remo(e such clou$
or to Euiet title*
n action ma% also be brou3ht to pre(ent a clou$ from bein3 cast upon title to real
propert% or an% interest therein*
In the case at bar# petitioners alle3e that TCT No* ;</='C',46# issue$ in the name of
Pri(ate Respon$ent Selma# is a clou$ on their title as o8ners an$ possessors of the
subDect propert%# 8hich is a 5#666 TsEuare'meter portion of Lot No* ;</='C',46 co(ere$
b% the TCT* But the un$erl%in3 Euestion is# $o petitioners ha(e the reEuisite title that
8oul$ enable them to a(ail themsel(es of the reme$% of Euietin3 of titleN
Petitioners anchor their claim of o8nership on t8o $ocuments0 the 3reement of
Partition e7ecute$ b% Ma7ima Caballero an$ Paciencia Sabellona an$ the Dee$ of
Confirmation of Sale e7ecute$ b% Ramon Sabellona* &e 8ill no8 e7amine these t8o
$ocuments*
Girst Issue0
The Real Nature of the L3reement of PartitionL
The $ul% notari?e$ 3reement of Partition $ate$ )anuar% ;# ,=5.H is 8or$e$ as follo8s0
+REEMENT OG PRTITION
I# MSIM CBLLERO# Gilipina# of le3al a3e# marrie$ to Rafael Cari>o# no8
resi$in3 an$ 8ith postal a$$ress in the Municipalit% of Duma3uete# Oriental Ne3ros#
$epose the follo8in3 an$ sa%0
,* That I am the applicant of (acant lot No* ;</= of the Talisa%'Min3lanilla Estate
an$ the sai$ application has alrea$% been in$orse$ b% the District Lan$ Officer#
Talisa%# Cebu# for pri(ate sale in m% fa(orH
4* That the sai$ Lot ;</= 8as formerl% re3istere$ in the name of Geli7 ba$ %
Caballero an$ the sale certificate of 8hich has alrea$% been cancelle$ b% the Hon*
Secretar% of 3riculture an$ CommerceH
5* That for an$ in representation of m% brother# Luis Caballero# 8ho is no8 the actual
occupant of sai$ lot I $eem it 8ise to ha(e the sai$ lot pai$ b% me# as Luis Caballero
has no means o9r: an% 8a% to pa% the 3o(ernmentH
-* That as soon as the application is appro(e$ b% the Director of Lan$s# Manila# in
m% fa(or# I hereb% bin$ m%self to transfer the one'thir$ @lK5A portion of the abo(e
mentione$ lot in fa(or of m% aunt# Paciencia Sabellana % Caballero# of le3al a3e#
sin3le# resi$in3 an$ 8ith postal a$$ress in Tun3Fop# Min3lanilla# Cebu* Sai$ portion
of one'thir$ @,K5A 8ill be sub$i(i$e$ after the appro(al of sai$ application an$ the
same 8ill be pai$ b% her to the 3o(ernment 9for: the correspon$in3 portion*
;* That the sai$ portion of one'thir$ @,K5A 8ill be locate$ a$Doinin3 the municipal
roa$H
<* I# Paciencia Sabellana % Caballero# hereb% accept an$ taFe the portion herein
a$Du$icate$ to me b% Mrs* Ma7ima Caballero of Lot No* ;</= Talisa%'Min3lanilla
Estate an$ 8ill pa% the correspon$in3 portion to the 3o(ernment after the sub$i(ision
of the sameH
IN &ITNESS &HEREOG# 8e ha(e hereunto set our han$s this ;th $a% of )anuar%#
,=..# at Talisa%# Cebu*L,4
The 3reement0 n E7press Trust# Not a Partition
Not8ithstan$in3 its purporte$ nomenclature# this 3reement is not one of partition#
because there 8as no propert% to partition an$ the parties 8ere not co'o8ners* Rather# it
is in the nature of a trust a3reement*
Trust is the ri3ht to the beneficial enDo%ment of propert%# the le3al title to 8hich is (este$
in another* It is a fi$uciar% relationship that obli3es the trustee to $eal 8ith the propert%
for the benefit of the beneficiar%*,5 Trust relations bet8een parties ma% either be e7press
or implie$* n e7press trust is create$ b% the intention of the trustor or of the parties* n
implie$ trust comes into bein3 b% operation of la8*,-
The present 3reement of Partition in(ol(es an e7press trust* 2n$er rticle ,--- of the
Ci(il Co$e# L9n:o particular 8or$s are reEuire$ for the creation of an e7press trust# it
bein3 sufficient that a trust is clearl% inten$e$*L That Ma7ima Caballero boun$ herself to
3i(e one thir$ of Lot No* ;<4= to Paciencia Sabellona upon the appro(al of the formerQs
application is clear from the terms of the 3reement* LiFe8ise# it is e(i$ent that
Paciencia acEuiesce$ to the co(enant an$ is thus boun$ to fulfill her obli3ation therein*
s a result of the 3reement# Ma7ima Caballero hel$ the portion specifie$ therein as
belon3in3 to Paciencia Sabellona 8hen the application 8as e(entuall% appro(e$ an$ a
sale certificate 8as issue$ in her name*,; Thus# she shoul$ ha(e transferre$ the same to
the latter# but she ne(er $i$ so $urin3 her lifetime* Instea$# her heirs sol$ the entire Lot
No* ;</= to Sil(estre ro in ,=;;*
Grom ,=;- 8hen the sale certificate 8as issue$ until ,=.; 8hen petitioners file$ their
Complaint# Paciencia an$ her successors'in'interest $i$ not $o an%thin3 to enforce their
proprietar% ri3hts o(er the $ispute$ propert% or to consoli$ate their o8nership o(er the
same* In fact# the% $i$ not e(en re3ister the sai$ 3reement 8ith the Re3istr% of Propert%
or pa% the reEuisite lan$ ta7es* &hile petitioners ha$ been $oin3 nothin3# the $ispute$
propert%# as part of Lot No* ;</=# ha$ been the subDect of se(eral sales transactions,< an$
co(ere$ b% se(eral transfer certificates of title*
The Repu$iation of the E7press Trust
&hile no time limit is impose$ for the enforcement of ri3hts un$er e7press trusts#,/
prescription ma%# ho8e(er# bar a beneficiar%Qs action for reco(er%# if a repu$iation of the
trust is pro(en b% clear an$ con(incin3 e(i$ence an$ ma$e Fno8n to the beneficiar%*,.
There 8as a repu$iation of the e7press trust 8hen the heirs of Ma7ima Caballero faile$ to
$eli(er or transfer the propert% to Paciencia Sabellona# an$ instea$ sol$ the same to a
thir$ person not pri(% to the 3reement* In the memoran$um of incumbrances of TCT
No* 56./,= issue$ in the name of Ma7ima# there 8as no notation of the 3reement
bet8een her an$ Paciencia* EEuall% important# the 3reement 8as not re3istere$H thus# it
coul$ not bin$ thir$ persons* Neither 8as there an% alle3ation that Sil(estre ro# 8ho
purchase$ the propert% from Ma7imaQs heirs# Fne8 of it* ConseEuentl%# the subseEuent
sales transactions in(ol(in3 the lan$ in $ispute an$ the titles co(erin3 it must be uphel$#
in the absence of proof that the sai$ transactions 8ere frau$ulent an$ irre3ular*
Secon$ Issue0
The Purporte$ Sale to Dalmacio Secu%a
E(en 3rantin3 that the e7press trust subsists# petitioners ha(e not pro(en that the% are the
ri3htful successors'in'interest of Paciencia Sabellona*
The bsence of the Purporte$ Dee$ of Sale
Petitioners insist that Paciencia sol$ the $ispute$ propert% to Dalmacio Secu%a on
October 46# ,=;5# an$ that the sale 8as embo$ie$ in a pri(ate $ocument* Ho8e(er# such
$ocument# 8hich 8oul$ ha(e been the best e(i$ence of the transaction# 8as ne(er
presente$ in court# alle3e$l% because it ha$ been lost* &hile a sale of a piece of lan$
appearin3 in a pri(ate $ee$ is bin$in3 bet8een the parties# it cannot be consi$ere$
bin$in3 on thir$ persons# if it is not embo$ie$ in a public instrument an$ recor$e$ in the
Re3istr% of Propert%*46
Moreo(er# 8hile petitioners coul$ not present the purporte$ $ee$ e(i$encin3 the
transaction bet8een Paciencia Sabellona an$ Dalmacio Secu%a# petitionersQ imme$iate
pre$ecessor'in'interest# pri(ate respon$ent in contrast has the necessar% $ocuments to
support her claim to the $ispute$ propert%*
The Muestionable Value of the Dee$
E7ecute$ b% Ramon Sabellona
To pro(e the alle3e$ sale of the $ispute$ propert% to Dalmacio# petitioners instea$
presente$ the testimon% of Mi3uel Secu%a# one of the petitionersH an$ a Dee$4,
confirmin3 the sale e7ecute$ b% Ramon Sabellona# PacienciaQs alle3e$ heir* The
testimon% of Mi3uel 8as a bare assertion that the sale ha$ in$ee$ taFen place an$ that the
$ocument e(i$encin3 it ha$ been $estro%e$* &hile the Dee$ e7ecute$ b% Ramon ratifie$
the transaction# its probati(e (alue is $oubtful* His status as heir of Paciencia 8as not
affirmati(el% establishe$* Moreo(er# he 8as not presente$ in court an$ 8as thus not
Eui??e$ on his Fno8le$3e T or lacF thereof T of the ,=;5 transaction*
PetitionersQ Gailure to E7ercise O8nersQ
Ri3hts to the Propert%
Petitioners insist that the% ha$ been occup%in3 the $ispute$ propert% for fort%'se(en %ears
before the% file$ their Complaint for Euietin3 of title* Ho8e(er# there is no proof that the%
ha$ e7ercise$ their ri3hts an$ $uties as o8ners of the same* The% ar3ue that the% ha$
been 3atherin3 the fruits of such propert%H %et# it 8oul$ seem that the% ha$ been remiss in
their $ut% to pa% the lan$ ta7es* If petitioners reall% belie(e$ that the% o8ne$ the
propert%# the% ha(e shoul$ ha(e been more (i3ilant in protectin3 their ri3hts thereto* s
note$ earlier# the% $i$ nothin3 to enforce 8hate(er proprietar% ri3hts the% ha$ o(er the
$ispute$ parcel of lan$*
Thir$ Issue0
The Vali$it% of Pri(ate Respon$entQs Title
Petitioners $ebunF Pri(ate Respon$ent SelmaQs title to the $ispute$ propert%# alle3in3 that
she 8as a8are of their possession of the $ispute$ properties* Thus# the% insist that she
coul$ not be re3ar$e$ as a purchaser in 3oo$ faith 8ho is entitle$ to the protection of the
Torrens s%stem*
In$ee$# a part% 8ho has actual Fno8le$3e of facts an$ circumstances that 8oul$ mo(e a
reasonabl% cautious man to maFe an inEuir% 8ill not be protecte$ b% the Torrens s%stem*
In San$o(al (* Court of ppeals#44 8e hel$0
It is settle$ $octrine that one 8ho $eals 8ith propert% re3istere$ un$er the Torrens
s%stem nee$ not 3o be%on$ the same# but onl% has to rel% on the title* He is char3e$
8ith notice onl% of such bur$ens an$ claims as are annotate$ on the title*
The aforesai$ principle a$mits of an unchallen3e$ e7ception0 that a person $ealin3
8ith re3istere$ lan$ has a ri3ht to rel% on the Torrens certificate of title an$ to
$ispense 8ithout the nee$ of inEuirin3 further e7cept 8hen the part% has actual
Fno8le$3e of facts an$ circumstances that 8oul$ impel a reasonabl% cautious man to
maFe such inEuir%# or 8hen the purchaser has Fno8le$3e of a $efect or the lacF of
title in his (en$or or of sufficient facts to in$uce a reasonabl% pru$ent man to inEuire
into the status of title of the propert% in liti3ation* The presence of an%thin3 8hich
e7cites or arouses suspicion shoul$ then prompt the (en$ee to looF be%on$ the
certificate an$ in(esti3ate the title of the (en$or appearin3 on the face of the
certificate* One 8ho falls 8ithin the e7ception can neither be $enominate$ an
innocent purchaser for (alue purchaser in 3oo$ faithH an$ hence $oes not merit the
protection of the la8*
+rantin3 ar3uen$o that pri(ate respon$ent Fne8 that petitioners# throu3h Superales an$
his famil%# 8ere actuall% occup%in3 the $ispute$ lot# 8e must stress that the (en$or#
Cesaria Caballero# assure$ her that petitioners 8ere Dust tenants on the sai$ lot* Pri(ate
respon$ent cannot be faulte$ for belie(in3 this representation# consi$erin3 that
petitionersQ claim 8as not note$ in the certificate of the title co(erin3 Lot No* ;</=*
Moreo(er# the lot# inclu$in3 the $ispute$ portion# ha$ been the subDect of se(eral sales
transactions* The title thereto ha$ been transferre$ se(eral times# 8ithout an% protestation
or complaint from the petitioners* In an% case# pri(ate respon$entQs title is ampl%
supporte$ b% clear e(i$ence# 8hile petitionersQ claim is barren of proof*
Clearl%# petitioners $o not ha(e the reEuisite title to pursue an action for Euietin3 of
title*,Y8phi,*nZt
&HEREGORE# the Petition is hereb% DENIED an$ the assaile$ Decision GGIRMED*
Costs a3ainst petitioners*
SO ORDERED*
SECOND DIVISION
9+*R* No* ,--//5* Ma% ,<# 466;:
"NR BROTHERS RELT1 COMPN1# petitioner# (s* L2RENCIO 1IN+# IN
HIS O&N BEHLG ND IN BEHLG OG THE OTHER HEIRS OG
EMILINO 1IN+# P2LINO 1IN+# IN HIS O&N BEHLG ND IN
BEHLG OG THE OTHER HEIRS OG SIMEON 1IN+# ND &ENCESLO
S2MLINO+# IN HIS O&N BEHLG ND IN BEHLG OG THE OTHER
HEIRS OG ROBERT 1IN+# respon$ents*
D E C I S I O N
2STRI'MRTINE"# )*0
This resol(es the petition for re(ie8 on certiorari seeFin3 the mo$ification of the
Decision9,: of the Court of ppeals @CA $ate$ March /# 4666 8hich affirme$ 8ith
mo$ification the Decision of the Re3ional Trial Court @RTCA of Lapu'Lapu Cit%# Branch
4/ in Ci(il Case No* 4=56'LH an$ the Resolution $ate$ u3ust 4# 4666 $en%in3
petitionerCs motion for reconsi$eration of the aforementione$ $ecision*
The antece$ent facts are as follo8s0
The $ispute$ propert% is Lot No* -5== 8ith an area of 5-#54; sEuare meters locate$
at Dap$ap# Lapu'Lapu Cit%* Crisanta Malolo%'on petitione$ for the issuance of a
ca$astral $ecree in her fa(or o(er sai$ parcel of lan$* fter her $eath in ,=56# the
Ca$astral Court issue$ a Decision $irectin3 the issuance of a $ecree in the name of
Crisanta Malolo%'onCs ei3ht chil$ren# namel%0 )uan# Cele$onio# Emiliano# Grancisco#
Simeon# Bernabe# Roberta an$ Gausta# all surname$ %in3* The certificate of title 8as#
ho8e(er# lost $urin3 the 8ar*
SubseEuentl%# all the heirs of the %in3 siblin3s e7ecute$ an E7tra')u$icial Partition
of Real Estate 8ith Dee$ of bsolute Sale $ate$ March 5# ,=<-# con(e%in3 the subDect
parcel of lan$ to herein petitioner ?nar Brothers Realt% Compan%* Sai$ $ee$ 8as
re3istere$ 8ith the Re3ister of Dee$s of Lapu'Lapu Cit% on March <# ,=<- un$er ct No*
55-- @the la8 3o(ernin3 re3istration for unre3istere$ lan$A# an$ since then# petitioner ha$
been reli3iousl% pa%in3 real propert% ta7es on sai$ propert%*
In ,=..# herein petitioner file$ a Petition for Reconstitution of the Ori3inal Title as
the ori3inal title o(er the subDect propert% ha$ been lost $urin3 the 8ar* On pril ,4#
,=..# the court 3rante$ sai$ petition# thereb% $irectin3 the Re3ister of Dee$s of Lapu'
Lapu Cit% to issue a reconstitute$ title in the name of the abo(ementione$ %in3 siblin3s*
Thus# Ori3inal Certificate of Title @OCTA No* RO'4.;< 8as issue$*
In ,==,# petitioner# claimin3 to be the ri3htful o8ner of the subDect propert%# sent out
notices to (acate# a$$resse$ to persons occup%in3 the propert%* 2nhee$e$# petitioner
then file$ a complaint for eDectment a3ainst the occupants before the Metropolitan Trial
Court @MTCA# Lapu'Lapu Cit%*
On Gebruar% ,# ,==-# the MTC or$ere$ the occupants to (acate the propert%* The
case e(entuall% reache$ this Court# $ocFete$ as +*R* No* ,4.,64# entitle$ ?nar Brothers
Realt% Compan% (s* Court of ppeals# Luis %in3# Demetrio Si$a# Gelomino u3usto#
Ge$erico bin3# an$ Romeo u3usto *94: On March /# 4666# a Decision 8as
promul3ate$ in fa(or of herein petitioner# $eclarin3 it as the ri3htful possessor of the
parcel of lan$ in Euestion*
Mean8hile# herein respon$ents# alon3 8ith other persons claimin3 to be $escen$ants
of the ei3ht %in3 siblin3s# all in all numberin3 aroun$ 446 persons# ha$ file$ a complaint
for cancellation of the E7tra')u$icial Partition 8ith bsolute Sale# reco(er% of o8nership#
inDunction an$ $ama3es 8ith the RTC of Lapu'Lapu Cit%* The complaint 8as $ismisse$
t8ice 8ithout preDu$ice* Sai$ complaint 8as re'file$ on u3ust ,=# ,==5# $ocFete$ as
Ci(il Case No* 4=56'L*
In their amen$e$ complaint# herein respon$ents @plaintiffs before the RTCA alle3e$
that0 the% are co'o8ners of subDect propert%# bein3 $escen$ants of the re3istere$ o8ners
thereof un$er OCT No* RO'4.;<H the% ha$ been in actual# peaceful# ph%sical# open#
a$(erse# continuous an$ uninterrupte$ possession in concept of o8ner of subDect parcel of
lan$ since time immemorialH their possession 8as $isturbe$ onl% in the last Euarter of
,==, 8hen some of them recei(e$ notices to (acate from petitioner an$ se(eral 8eeFs
thereafter# earthmo(in3 eEuipment entere$ the $ispute$ lan$# bull$o?in3 the same an$
$estro%in3 plants# trees an$ concrete monuments @ImohonJAH respon$ents $isco(ere$ that
such acti(ities 8ere bein3 un$ertaFen b% petitioner to3ether 8ith Sta* Lucia Realt% an$
De(elopment# Inc*H petitioner claime$ to be the o8ner of subDect propert% b% (irtue of an
e7tra'Du$icial partition of real estate 8ith $ee$ of absolute sale e7ecute$ in petitionerCs
fa(or b% the alle3e$ heirs of Crisanta Malolo%'onH the aforementione$ e7tra'Du$icial
partition of real estate 8ith $ee$ of absolute sale is a frau$ an$ is null an$ (oi$ ab initio
because not all the co'o8ners of subDect propert% affi7e$ their si3nature on sai$ $ocument
an$ some of the co'o8ners 8ho suppose$l% si3ne$ sai$ $ocument ha$ been $ea$ at the
time of the e7ecution thereofH petitioner entere$ subDect lan$ in ba$ faith# Fno8in3 full%
8ell that it $i$ not ha(e an% ri3ht to the lan$ an$ use$ force# threat an$ intimi$ation
a3ainst respon$entsH an$ the% suffere$ moral $ama3es*95:
Petitioner @$efen$ant before the RTCA file$ its ns8er# $en%in3 that respon$ents are
the la8ful o8ners of subDect parcel of lan$ b% (irtue of their bein3 $escen$ants or heirs of
the re3istere$ o8ners of subDect propert%* Instea$# petitioner alle3e$ that it ha$ been in
actual possession of subDect lan$ as o8ner thereof b% (irtue of the e7tra'Du$icial partition
of real propert% an$ $ee$ of absolute sale e7ecute$ in its fa(orH that in fact# it ha$ been
pa%in3 ta7es thereon reli3iousl%H that it tolerate$ about < persons to li(e on sai$ lan$ but
sai$ persons 8ere e(entuall% eDecte$ b% court or$er* Petitioner then raise$ the affirmati(e
$efenses of failure to state cause of action an$ prescription# as it tooF respon$ents 4/
%ears# ,6 months an$ 4/ $a%s to file the action to reco(er subDect propert%# 8hen an
action to reco(er propert% base$ on an implie$ trust shoul$ be institute$ 8ithin - %ears
from $isco(er% of the frau$*9-:
In the Pre'Trial Or$er $ate$ )anuar% 56# ,==; of the RTC# the issues 8ere narro8e$
$o8n to the follo8in30
,* &hether or not the plaintiffs 9herein respon$ents: are the heirs of the re3istere$
o8ners of Lot No* -5==*
4* &hether or not plaintiffs are the o8ners of Lot No* -5==*
5* &hether or not the $efen$ant ?nar 9herein petitioner: is estoppe$ to maFe an%
claim on Lot No* -5==*
-* &hether or not the $efen$ant ?nar is a buil$er in ba$ faith*
;* &hether or not the $efen$ants are liable for $ama3es an$ attorne%Cs fees in
fa(or of the plaintiffs*
<* &hether or not the E7tra')u$icial Partition of Real Estate 8ith Dee$ of
bsolute Sale is (ali$ an$ ha$# in effect# (ali$l% con(e%e$ to $efen$ant ?nar Lot No*
-5==*
/* &hether or not the plaintiffsC action has prescribe$*9;:
fter trial# the RTC ren$ere$ a Decision $ate$ )ul% -# ,==/# rulin3 that respon$entsC
e(i$ence faile$ to pro(e that the e7tra'Du$icial partition 8ith $ee$ of absolute sale 8as a
totall% simulate$ or fictitious contract an$ conclu$e$ that sai$ $ocument is (ali$# thus#
effecti(el% con(e%in3 to petitioner the propert% in Euestion* It further hel$ that
respon$entsC action ha$ prescribe$ in that the action is consi$ere$ as one for
recon(e%ance base$ on implie$ or constructi(e trust# it prescribe$ in ,6 %ears from the
re3istration of the $ee$ on March <# ,=<-H an$ if the action is consi$ere$ as one for
annulment of contract on the 3roun$ of frau$# it shoul$ ha(e been file$ 8ithin - %ears
from $isco(er% of the frau$* The trial court also rule$ that respon$ents faile$ to present
an% a$missible proof of filiation# hence# the% 8ere not able to pro(e that the% are in$ee$
heirs of the ei3ht %in3 siblin3s 8ho appear as the re3istere$ o8ners un$er OCT No* RO'
4.;<*
The $ispositi(e portion of the RTC Decision rea$s as follo8s0
&HEREGORE# Du$3ment is hereb% ren$ere$ $ismissin3 the amen$e$ complaint on the
3roun$ of prescription# an$ $eclarin3 the E7tra')u$icial Partition of Real Estate 8ith
Dee$ of bsolute Sale $ate$ March 5# ,=<- as (ali$ an$ bin$in3# a$Du$3in3 that Lot -5==
8ith an area of 5-#54; sEuare meters locate$ at Dap$ap# Mactan# Lapu'Lapu Cit% ha$
been (ali$l% con(e%e$ to an$ in fa(or of ?nar Brothers Realt% Compan%# an$ $irectin3
the Re3ister of Dee$s of Lapu'Lapu Cit% to re3ister the abo(e'mentione$ $ee$ in
accor$ance 8ith la8 an$ to cancel Ori3inal Certificate of Title No* RO'4.;<# an$ to issue
a transfer certificate of title in the name of ?nar Brothers Realt% Compan% upon
pa%ment of the necessar% re3istration fees pursuant thereto*
The &rit of Preliminar% InDunction issue$ in this case is hereb% or$ere$ $issol(e$*
The Motion for Contempt file$ b% the plaintiffs a3ainst $efen$ants is $ismisse$ for 8ant
of factual an$ le3al basis*
Costs a3ainst the plaintiffs*
SO ORDERED*9<:
Herein respon$ents appeale$ the fore3oin3 $ecision to the C an$ on March /# 4666#
sai$ court promul3ate$ its Decision# the $ispositi(e portion of 8hich is repro$uce$
hereun$er0
THE GORE+OIN+ CONSIDERED# the conteste$ Decision 8hile GGIRMED is hereb%
MODIGIED* The heirs of Emiliano %in3# Simeon %in3 an$ Roberta %in3 are hereb%
$eclare$ as the la8ful o8ners of the conteste$ propert% but eEui(alent onl% to 5K.*
SO ORDERED*
In mo$if%in3 the RTC Du$3ment# the C ratiocinate$ that Ian action for reco(er% of
possession of re3istere$ lan$ ne(er prescribes in (ie8 of the pro(ision of Section --# ct
No* -=< @no8 Sec* -/# PD ,;46A# to the effect that no title to re3istere$ lan$ in $ero3ation
to that of a re3istere$ o8ner shall be acEuire$ b% prescription*J The C further rule$ that
e(en if the action is $eeme$ to be base$ on implie$ trust# prescription $i$ not be3in to run
since there is no e(i$ence that positi(e acts of repu$iation 8ere ma$e Fno8n to the heirs
8ho $i$ not participate in the e7ecution of the E7tra')u$icial Partition of Real Estate 8ith
Dee$ of bsolute Sale* Thus# striFin3 $o8n the RTCCs rulin3 that the respon$entsC
complaint is $ismissible on the 3roun$ of prescription# the C hel$ instea$ that herein
respon$entsC action ha$ not prescribe$ but uphel$ the (ali$it% of the E7tra')u$icial
Partition of Real Estate 8ith Dee$ of bsolute Sale# e7cept as to the shares of the heirs of
Emiliano# Simeon an$ Roberta# 8ho $i$ not participate in the e7ecution of sai$
$ocument*
Herein petitionerCs motion for reconsi$eration of the C $ecision 8as $enie$ per
Resolution $ate$ u3ust 4# 4666*
Hence# the present petition for re(ie8 on certiorari assailin3 the C $ecision on the
follo8in3 3roun$s0
I
THE CO2RT OG PPELS ERRED IN GILIN+ TO PPL1 THE R2LE THT N
HEIR OG THE ORI+INL RE+ISTERED O&NER M1 LOSE HIS RI+HT TO
RECOVER TITLED PROPERT1 B1 RESON OG LCHESH
II
THE CO2RT OG PPELS ERRED IN GILIN+ TO PPL1 THE R2LE THT THE
CT OG RE+ISTRTION OG THE DEED OG PRTITION &ITH SLE M1 BE
CONSIDERED N 2NEM2IVOCL REP2DITION OG THE TR2ST +IVIN+ RISE
TO PRESCRIPTIONH
III
THE CO2RT OG PPELS ERRED IN GILIN+ TO PPL1 THE PROVISIONS OG
RTICLE ,,6- OG THE CIVIL CODE TO THE EGGECT THT IN THE BSENCE OG
BD GITH OR GR2D# THE PRTITION &ITH PRETERITION OG N1
COMP2LSOR1 HEIR SHLL NOT BE RESCINDED*9/:
In their Comment# respon$ents ar3ue that this case is an action to $eclare as null an$
(oi$ the E7tra')u$icial Partition of Real Estate 8ith Dee$ of bsolute Sale# hence# un$er
rticle ,-,6 of the Ci(il Co$e# an action for $eclaration of an ine7istent contract $oes not
prescribe* Respon$ents further posit that the principle of laches shoul$ be applie$ a3ainst
petitioner an$ not a3ainst them# as the% @respon$entsA ha$ been in actual possession of the
subDect propert%# 8hile petitioner merel% brou3ht action to eDect them more than 4= %ears
after the alle3e$ e7ecution of the E7tra')u$icial Partition of Real Estate 8ith Dee$ of
bsolute Sale* The% also refute$ petitionerCs ar3uments re3ar$in3 the application of the
principles of implie$ an$ constructi(e trusts in this case*
t the outset# it shoul$ be stresse$ that not all the plaintiffs 8ho file$ the amen$e$
complaint before the trial court ha$ been implea$e$ as respon$ents in the present petition*
The onl% parties implea$e$ are the heirs of Emiliano# Simeon an$ Roberta %in3# 8hom
the C a$Du$3e$ as o8ners of a 5K. portion of the lan$ in $ispute for not ha(in3
participate$ in the e7ecution of the E7tra')u$icial Partition of Real Estate 8ith Dee$ of
bsolute Sale*
It is si3nificant to note that herein petitioner $oes not Euestion the C conclusion that
respon$ents are heirs of the aforementione$ three %in3 siblin3s* Hence# the trial court
an$ appellate courtCs fin$in3s that the E7tra' )u$icial Partition of Real Estate 8ith Dee$
of bsolute Sale 8as not for3e$ nor simulate$ an$ that the heirs of Emiliano# Simeon an$
Roberta %in3 $i$ not participate in the e7ecution thereof# are no8 be%on$ ca(il*
The issues raise$ b% petitioner for the CourtCs resolution are @,A 8hether or not
respon$entsC cause of action is imprescriptibleH an$ @4A if their ri3ht to brin3 action is
in$ee$ imprescriptible# ma% the principle of laches appl%*
Respon$ents alle3e$ in their amen$e$ complaint that not all the co'o8ners of the
lan$ in Euestion si3ne$ or e7ecute$ the $ocument con(e%in3 o8nership thereof to
petitioner an$ ma$e the conclusion that sai$ $ocument is null an$ (oi$* &e a3ree 8ith
the rulin3 of the RTC an$ the C that the E7tra')u$icial Partition of Real Estate 8ith
Dee$ of bsolute Sale is (ali$ an$ bin$in3 onl% as to the heirs 8ho participate$ in the
e7ecution thereof# hence# the heirs of Emiliano# Simeon an$ Roberta %in3# 8ho
un$ispute$l% $i$ not participate therein# cannot be boun$ b% sai$ $ocument*
Ho8e(er# the facts on recor$ sho8 that petitioner acEuire$ the entire parcel of lan$
8ith the mistaFen belief that all the heirs ha(e e7ecute$ the subDect $ocument* Thus# the
trial court is correct that the pro(ision of la8 applicable to this case is rticle ,-;< of the
Ci(il Co$e 8hich states0
RT* ,-;<* If propert% is acEuire$ throu3h mistaFe or frau$# the person obtainin3 it is#
b% force of la8# consi$ere$ a trustee of an implie$ trust for the benefit of the person from
8hom the propert% comes*
In V$a* De Escon$e (s* Court of ppeals #9.: the Court e7poun$e$ thus0
Construin3 this pro(ision of the Ci(il Co$e# in Philippine National BanF (* Court of
ppeals# the Court state$0
$eeper anal%sis of rticle ,-;< re(eals that it is not a trust in the technical sense for in
a t%pical trust# confi$ence is repose$ in one person 8ho is name$ a trustee for the benefit
of another 8ho is calle$ the cestui Eue trust# respectin3 propert% 8hich is hel$ b% the
trustee for the benefit of the cestui Eue trust* constructi(e trust# unliFe an e7press trust#
$oes not emanate from# or 3enerate a fi$uciar% relation* &hile in an e7press trust# a
beneficiar% an$ a trustee are linFe$ b% confi$ential or fi$uciar% relations# in a
constructi(e trust# there is neither a promise nor an% fi$uciar% relation to speaF of an$ the
so'calle$ trustee neither accepts an% trust nor inten$s hol$in3 the propert% for the
beneficiar%*9=:
The concept of constructi(e trusts 8as further eluci$ate$ in the same case# as
follo8s0
* * * implie$ trusts are those 8hich# 8ithout bein3 e7presse$# are $e$ucible from the
nature of the transaction as matters of intent or 8hich are superin$uce$ on the transaction
b% operation of la8 as matters of eEuit%# in$epen$entl% of the particular intention of the
parties* In turn# implie$ trusts are either resultin3 or constructi(e trusts* These t8o are
$ifferentiate$ from each other as follo8s0
Resultin3 trusts are base$ on the eEuitable $octrine that (aluable consi$eration an$ not
le3al title $etermines the eEuitable title or interest an$ are presume$ al8a%s to ha(e been
contemplate$ b% the parties* The% arise from the nature of circumstances of the
consi$eration in(ol(e$ in a transaction 8hereb% one person thereb% becomes in(este$
8ith le3al title but is obli3ate$ in eEuit% to hol$ his le3al title for the benefit of another*
On the other han$# constructi(e trusts are create$ b% the construction of eEuit% in or$er to
satisf% the $eman$s of Dustice an$ pre(ent unDust enrichment* The% arise contrar% to
intention a3ainst one 8ho# b% frau$# $uress or abuse of confi$ence# obtains or hol$s the
le3al ri3ht to propert% 8hich he ou3ht not# in eEuit% an$ 3oo$ conscience# to hol$*9,6:
@Emphasis supplie$A
Base$ on such concept of constructi(e trusts# the Court rule$ in sai$ case that0
The rule that a trustee cannot acEuire b% prescription o8nership o(er propert% entruste$
to him until an$ unless he repu$iates the trust# applies to e7press trusts an$ resultin3
implie$ trusts* Ho8e(er# in constructi(e implie$ trusts# prescription ma% super(ene e(en
if the trustee $oes not repu$iate the relationship* Necessaril%# repu$iation of sai$ trust is
not a con$ition prece$ent to the runnin3 of the prescripti(e perio$*9,,:
The ne7t Euestion is# 8hat is the applicable prescripti(e perio$N
In merol (s* Ba3umbaran#9,4: the Court e7poun$e$ on the prescripti(e perio$
8ithin 8hich to brin3 an action for recon(e%ance of propert% base$ on implie$ or
constructi(e trust# to 8it0
* * * un$er the present Ci(il Co$e# 8e fin$ that Dust as an implie$ or constructi(e trust is
an offsprin3 of the la8 @rt* ,-;<# Ci(il Co$eA# so is the correspon$in3 obli3ation to
recon(e% the propert% an$ the title thereto in fa(or of the true o8ner* In this conte7t# an$
(is'W'(is prescription# rticle ,,-- of the Ci(il Co$e is applicable*
rticle ,,--* The follo8in3 actions must be brou3ht 8ithin ten %ears from the time the
ri3ht of action accrues0
@,A 2pon a 8ritten contractH
@4A 2pon an obli3ation create$ b% la8H
@5A 2pon a Du$3ment*
777 777 777
n action for recon(e%ance base$ on an implie$ or constructi(e trust must perforce
prescribe in ten %ears an$ not other8ise* lon3 line of $ecisions of this Court# an$ of
(er% recent (inta3e at that# illustrates this rule* 2n$oubte$l%# it is no8 8ell'settle$ that an
action for recon(e%ance base$ on an implie$ or constructi(e trust prescribes in ten %ears
from the issuance of the Torrens title o(er the propert%*9,5:
It has also been rule$ that the ten'%ear prescripti(e perio$ be3ins to run from the $ate
of re3istration of the $ee$ or the $ate of the issuance of the certificate of title o(er the
propert%# but if the person claimin3 to be the o8ner thereof is in actual possession of the
propert%# the ri3ht to seeF recon(e%ance# 8hich in effect seeFs to Euiet title to the
propert%# $oes not prescribe*9,-:
In the present case# respon$ents &enceslao Sumalino3# an heir of Roberta %in3H
Laurencio %in3# an heir of Emiliano %in3H an$ Paulino %in3# an heir of Simeon %in3#
all testifie$ that the% ha$ ne(er occupie$ or been in possession of the lan$ in $ispute* 9,;:
Hence# the prescripti(e perio$ of ten %ears 8oul$ appl% to herein respon$ents*
The Euestion then arises as to the $ate from 8hich the ten'%ear perio$ shoul$ be
recFone$# consi$erin3 that the E7tra')u$icial Partition of Real Estate 8ith Dee$ of
bsolute Sale 8as re3istere$ un$er ct No* 55-- an$ not un$er ct No* -=< @Lan$
Re3istration ctA# $espite the fact the lan$ in $ispute 8as alrea$% title$ un$er ct No* -=<
in the names of the %in3 siblin3s at the time the subDect $ocument 8as e7ecute$*
In Spouses bri3o (s* De Vera #9,<: it 8as hel$ that re3istration of instruments
must be $one in the proper re3istr%# in or$er to affect an$ bin$ the lan$ an$# thus# operate
as constructi(e notice to the 8orl$*9,/: Therein# the Court rule$0
7 7 7 If the lan$ is re3istere$ un$er the Lan$ Re3istration ct @an$ has therefore a Torrens
TitleA# an$ it is sol$ but the subseEuent sale is re3istere$ not un$er the Lan$ Re3istration
ct but un$er ct 55--# as amen$e$# such sale is not consi$ere$ RE+ISTERED 7 7 7 *
9,.:
In this case# since the E7tra')u$icial Partition of Real Estate 8ith Dee$ of bsolute
Sale 8as re3istere$ un$er ct No* 55-- an$ not un$er ct No* -=<# sai$ $ocument is
$eeme$ not re3istere$* ccor$in3l%# the ten'%ear prescripti(e perio$ cannot be recFone$
from March <# ,=<-# the $ate of re3istration of the subDect $ocument un$er ct No* 55--*
The prescripti(e perio$ onl% be3an to run from the time respon$ents ha$ actual notice of
the E7tra')u$icial Partition of Real Estate 8ith Dee$ of bsolute Sale*
The onl% e(i$ence on recor$ as to 8hen such prescripti(e perio$ commence$ as to
each of the respon$ents are &enceslao Sumalino3Cs @heir of Roberta %in3A testimon%
that about three %ears after ,=<-# the% alrea$% learne$ of the e7istence of the E7tra'
)u$icial Partition of Real Estate 8ith Dee$ of bsolute SaleH9,=: an$ Laurencio %in3Cs
@heir of Emiliano %in3A a$mission that he foun$ out about the sale of the lan$ in $ispute
a lon3 time a3o an$ can onl% estimate that it must be after martial la8*946: Paulino
%in3 @heir of Simeon %in3A 3a(e no testimon% 8hatsoe(er as to 8hen the chil$ren of
Simeon %in3 actuall% learne$ of the e7istence of the $ocument of sale* On the other
han$# petitioner $i$ not present an% other e(i$ence to pro(e the $ate 8hen respon$ents
8ere notifie$ of the e7ecution of the subDect $ocument*
In (ie8 of the lacF of unambi3uous e(i$ence of 8hen the heirs of Emiliano %in3
an$ Simeon %in3 $isco(ere$ the e7istence of the $ocument of sale# it must be
$etermine$ 8hich part% ha$ the bur$en of proof to establish such fact*
The test for $eterminin3 8here the bur$en of proof lies is to asF 8hich part% to an
action or suit 8ill fail if he offers no e(i$ence competent to sho8 the facts a(erre$ as the
basis for the relief he seeFs to obtain*94,: Moreo(er# one alle3in3 a fact that is $enie$
has the bur$en of pro(in3 it an$ unless the part% assertin3 the affirmati(e of an issue
sustains the bur$en of proof of that issue b% a prepon$erance of the e(i$ence# his cause
8ill not succee$*944: Thus# the $efen$ant bears the bur$en of proof as to all affirmati(e
$efenses 8hich he sets up in ans8er to the plaintiffCs claim or cause of actionH he bein3
the part% 8ho asserts the truth of the matter he has alle3e$# the bur$en is upon him to
establish the facts on 8hich that matter is pre$icate$ an$ if he fails to $o so# the plaintiff
is entitle$ to a (er$ict or $ecision in his fa(or*945:
In the case at bar# it 8as petitioner# as the $efen$ant before the RTC# 8hich set up in
its ns8er the affirmati(e $efense of prescription* It 8as# therefore# incumbent upon
petitioner to pro(e the $ate from 8hich the prescripti(e perio$ be3an to run* E(i$ence as
to the $ate 8hen the ten'%ear prescripti(e perio$ be3an e7ists onl% as to the heirs of
Roberta %in3# as &enceslao Sumalino3 a$mitte$ that the% learne$ of the e7istence of the
$ocument of sale in the %ear ,=</* s to the heirs of Emiliano %in3 an$ Simeon %in3#
there is no clear e(i$ence of the $ate 8hen the% $isco(ere$ the $ocument con(e%in3 the
subDect lan$ to petitioner* Petitioner miserabl% faile$ to a$$uce proof of 8hen the heirs of
Emiliano %in3 an$ Simeon %in3 8ere notifie$ of the subDect $ocument* Hence# 8ith
re3ar$ to sai$ heirs# the Court ma% consi$er the a$mission in the amen$e$ complaint that
the% learne$ of the con(e%ance of the $ispute$ lan$ onl% in ,==, 8hen petitioner sent
notices to (acate to the occupants of the subDect lan$# as the $ate from 8hich the ten'%ear
prescripti(e perio$ shoul$ be recFone$*
Respon$ents file$ their men$e$ Complaint on December <# ,==5*94-: Thus# 8ith
re3ar$ to respon$ent heirs of Roberta %in3 8ho ha$ Fno8le$3e of the con(e%ance as far
bacF as ,=</# their cause of action is alrea$% barre$ b% prescription 8hen sai$ amen$e$
complaint 8as file$ as the% onl% ha$ until ,=// 8ithin 8hich to brin3 action* s to the
respon$ent heirs of Emiliano an$ Simeon %in3# the% 8ere able to initiate their action for
recon(e%ance of propert% base$ on implie$ or constructi(e trust 8ell 8ithin the ten'%ear
prescripti(e perio$ recFone$ from ,==, 8hen the% 8ere sent b% petitioner a notice to
(acate the subDect propert%*
E(i$entl%# laches cannot be applie$ a3ainst respon$ent heirs of Emiliano an$ Simeon
%in3# as the% tooF action to protect their interest 8ell 8ithin the perio$ accor$e$ them
b% la8*
&ith re3ar$ to petitionerCs ar3ument that the pro(ision of rticle ,,6- of the Ci(il
Co$e# statin3 that a partition ma$e 8ith preterition of an% of the compulsor% heirs shall
not be rescin$e$# shoul$ be applie$# suffice it to sa% that the E7tra')u$icial Partition of
Real Estate 8ith Dee$ of bsolute Sale is not bein3 rescin$e$* In fact# its (ali$it% ha$
been uphel$ but onl% as to the parties 8ho participate$ in the e7ecution of the same* s
$iscusse$ abo(e# 8hat 8as con(e%e$ to petitioner 8as o8nership o(er the shares of the
heirs 8ho e7ecute$ the subDect $ocument* Thus# the la8# particularl%# rticle ,-;< of the
Ci(il Co$e# impose$ the obli3ation upon petitioner to act as a trustee for the benefit of
respon$ent heirs of Emiliano an$ Simeon %in3 8ho# ha(in3 brou3ht their action 8ithin
the prescripti(e perio$# are no8 entitle$ to the recon(e%ance of their share in the lan$ in
$ispute*
IN VIE& OG THE GORE+OIN+# the petition is PRTILL1 +RNTED an$ the
Decision of the Court of ppeals $ate$ March /# 4666 is MODIGIED# as follo8s0 The
amen$e$ complaint of the heirs of Roberta %in3 is DISMISSED on the 3roun$ of
prescription* Ho8e(er# the heirs of Emiliano %in3 an$ Simeon %in3# ha(in3 institute$
the action for recon(e%ance 8ithin the prescripti(e perio$# are hereb% DECLRED as the
L&G2L O&NERS of a 4K. portion of the parcel of lan$ co(ere$ b% Ori3inal Certificate
of Title No* RO'4.;<*
SO ORDERED*
Puno# @ChairmanA# CalleDo# Sr*# Tin3a# an$ Chico'Na?ario# ))*# concur*
+*R* No* L'-<4=< September 4-# ,==,
EPITCIO DELIM# PCLNO DELIM# GIDEL DELIM# VIR+ILIO DELIM#
+LILEO DELIM# )R*# BIBINO BC2S# OLIMPIO BC2S an$ P2RIGICCION
BC2S# petitioners#
(s*
HON* CO2RT OG PPELS# +LILEO DELIM @$ecease$A# substitute$ b% his le3al
heirs# namel%0 GLVIN VD* DE DELIM# LIL1 D* RIS# HELEN NIDS#
NTONIO DELIM# DIONISIO DELIM# IRENE DELIM# ESTER DELIM ND
GEL1 DELIM# respon$ents*
+abriel )* Canete for petitioners*
Emilio Lumonta$# )r* for pri(ate respon$ents*

MEDILDE# )*0p
This is a petition for re(ie8 on certiorari of the $ecision of the Court of ppeals re(ersin3
the trial courtQs Du$3ment 8hich $eclare$ as null an$ (oi$ the certificate of title in the
name of respon$entsQ pre$ecessor an$ 8hich or$ere$ the partition of the $ispute$ lot
amon3 the parties as co'o8ners*
The antece$ent facts of the case as foun$ both b% the respon$ent appellate court an$ b%
the trial court are as follo8s0
Durin3 his lifetime# Lino Delima acEuire$ Lot No* //;. of the Talisa%'Min3lanilla Griar
Lan$s Estate in Cebu b% sale on installments from the 3o(ernment* Lino Delima later
$ie$ in ,=4, lea(in3 as his onl% heirs three brothers an$ a sister namel%0 Eulalio Delima#
)uanita Delima# +alileo Delima an$ Vicente Delima* fter his $eath# TCT No* 4/-- of
the propert% in Euestion 8as issue$ on u3ust 5# ,=;5 in the name of the Le3al Heirs of
Lino Delima# $ecease$# represente$ b% +alileo Delima*
On September 44# ,=;5# +alileo Delima# no8 substitute$ b% respon$ents# e7ecute$ an
affi$a(it of LE7tra'Du$icial Declaration of Heirs*L Base$ on this affi$a(it# TCT No* 4/--
8as cancelle$ an$ TCT No* 566= 8as issue$ on Gebruar% -#,=;- in the name of +alileo
Delima alone to the e7clusion of the other heirs*
+alileo Delima $eclare$ the lot in his name for ta7ation purposes an$ pai$ the ta7es
thereon from ,=;- to ,=<;*
On Gebruar% 4=# ,=<.# petitioners# 8ho are the sur(i(in3 heirs of Eulalio an$ )uanita
Delima# file$ 8ith the Court of Girst Instance of Cebu @no8 Re3ional Trial CourtA an
action for recon(e%ance an$Kor partition of propert% an$ for the annulment of TCT No*
566= 8ith $ama3es a3ainst their uncles +alileo Delima an$ Vicente Delima#* Vicente
Delima 8as Doine$ as part% $efen$ant b% the petitioners for his refusal to Doin the latter in
their action*
On )anuar% ,<# ,=/6# the trial court ren$ere$ a $ecision in fa(or of petitioners# the
$ispositi(e portion of 8hich states0
IN VIE& OG THE GORE+OIN+ CONSIDERTIONS# the follo8in3 are the
$eclare$ o8ners of Lot No* //;. of the Talisa%'Min3lanilla Griar Lan$s Estate
presentl% co(ere$ b% transfer Certificate of Title No* 566=# each sharin3 a pro'
in$i(iso share of one'fourthH
,A Vicente Delima @one'fourthA
4A Heirs of )uanita Delima# namel%0 Bibiano Bacus# Olimpio Bacus an$
Purificacion Bacus @on'fourthAH
5A Heirs of Eulalio Delima# namel% Epitacio# Pa3ano# Gi$el# Vir3ilio an$ +alileo
)r*# all surname$ Delima @one'fourthAH an$
-A The Heirs of +alileo Delima# namel% Gla(iana V$a* $e Delima# Lil% D* rias#
Helen Nia$as an$ Dionisio# ntonio# Eotu Irenea# an$ Gel%# all surname$ Delima
@one'fourthA*
Transfer Certificate of Title No* 566= is $eclare$ null an$ (oi$ an$ the Re3ister
of Dee$s of Cebu is or$ere$ to cancel the same an$ issue in lieu thereof another
title 8ith the abo(e heirs as pro'in$i(iso o8ners*
fter the pa%ment of ta7es pai$ b% +alileo Delima since ,=;.# the heirs of
+alileo Delima are or$ere$ to turn a o(er to the other heirs their respecti(e
shares of the fruits of the lot in Euestion compute$ at P,/6*66 per %ear up to the
present time 8ith le3al @interestA*
&ithin si7t% @<6A $a%s from receipt of this $ecision the parties are or$ere$ to
petition the lot in Euestion an$ the $efen$ants are $irecte$ to imme$iatel% turn
o(er possession of the shares here a8ar$e$ to the respecti(e heirs*
Defen$ants are con$emne$ to pa% the costs of the suit*
The counterclaim is $ismisse$*
SO ORDERED* @pp* ;-';;# RolloA
Not satisfie$ 8ith the $ecision# respon$ents appeale$ to the Court of ppeals* On Ma%
,=# ,=//# respon$ent appellate court re(erse$ the trial courtQs $ecision an$ uphel$ the
claim of +alileo Delima that all the other brothers an$ sister of Lino Delima# namel%
Eulalio# )uanita an$ Vicente# ha$ alrea$% relinEuishe$ an$ 8ai(e$ their ri3hts to the
propert% in his fa(or# consi$erin3 that he @+alileo DelimaA alone pai$ the remainin3
balance of the purchase price of the lot an$ the realt% ta7es thereon @p* 4<# RolloA*
Hence# this petition 8as file$ 8ith the petitioners alle3in3 that the Court of ppeals erre$0
,A In not hol$in3 that the ri3ht of a co'heir to $eman$ partition of inheritance is
imprescriptible* If it $oes# the $efenses of prescription an$ laches ha(e alrea$%
been 8ai(e$*
4A In $isre3ar$in3 the e(i$ence of the petitioners*@p*,5# RolloA
The issue to be resol(e$ in the instant case is 8hether or not petitionersQ action for
partition is alrea$% barre$ b% the statutor% perio$ pro(i$e$ b% la8 8hich shall enable
+alileo Delima to perfect his claim of o8nership b% acEuisiti(e prescription to the
e7clusion of petitioners from their shares in the $ispute$ propert%* rticle -=- of the Ci(il
Co$e e7pressl% pro(i$es0
rt* -=-* No co'o8ner shall be obli3e$ to remain in the co'o8nership* Each co'
o8ner ma% $eman$ at an% time the partition of the thin3 o8ne$ in common#
insofar as his share is concerne$*
Ne(ertheless# an a3reement to Feep the thin3 un$i(i$e$ for a certain perio$ of
time# not e7cee$in3 ten %ears# shall be (ali$* This term ma% be e7ten$e$ b% a
ne8 a3reement*
$onor or testator ma% prohibit partition for a perio$ 8hich shall not e7cee$
t8ent% %ears*
Neither shall there be an% partition 8hen it is prohibite$ b% la8*
No prescription shall run in fa(or of a co'o8ner or co'heir a3ainst his co'o8ners
or co'heirs so lon3 as he e7pressl% or implie$l% reco3ni?es the co'o8nership*
s a rule# possession b% a co'o8ner 8ill not be presume$ to be a$(erse to the others# but
8ill be hel$ to benefit all* It is un$erstoo$ that the co'o8ner or co'heir 8ho is in
possession of an inheritance pro'in$i(iso for himself an$ in representation of his co'
o8ners or co'heirs# if# as such o8ner# he a$ministers or taFes care of the rest thereof 8ith
the obli3ation of $eli(erin3 it to his co'o8ners or co'heirs# is un$er the same situation as
a $epositor%# a lessee or a trustee @Bar3a%o (* Camumot# -6 Phil# .;/H Se3ura (* Se3ura#
No* L'4=546# September ,=# ,=..# ,<; SCR 5<.A* Thus# an action to compel partition
ma% be file$ at an% time b% an% of the co'o8ners a3ainst the actual possessor* In other
8or$s# no prescription shall run in fa(or of a co'o8ner a3ainst his co'o8ners or co'heirs
so lon3 as he e7pressl% or implie$l% reco3ni?es the co'o8nership @Del Blanco (*
Interme$iate ppellate Court# No* /4<=-# December ,# ,=./# ,;< SCR ;;A*
Ho8e(er# from the moment one of the co'o8ners claims that he is the absolute an$
e7clusi(e o8ner of the properties an$ $enies the others an% share therein# the Euestion
in(ol(e$ is no lon3er one of partition but of o8nership @De Castro (* Echarri# 46 Phil* 45H
Bar3a%o (* Camumot# supraH De los Santos (* Santa Teresa# -- Phil* .,,A* In such case#
the imprescriptibilit% of the action for partition can no lon3er be in(oFe$ or applie$ 8hen
one of the co'o8ners has a$(ersel% possesse$ the propert% as e7clusi(e o8ner for a
perio$ sufficient to (est o8nership b% prescription*
It is settle$ that possession b% a co'o8ner or co'heir is that of a trustee* In or$er that such
possession is consi$ere$ a$(erse to the cestui Eue trust amountin3 to a repu$iation of the
co'o8nership# the follo8in3 elements must concur0 ,A that the trustee has performe$
uneEui(ocal acts amountin3 to an ouster of the cestui Eue trustH 4A that such positi(e acts
of repu$iation ha$ been ma$e Fno8n to the cestui Eue trustH an$ 5A that the e(i$ence
thereon shoul$ be clear an$ conclusi(e @Val$e? (* Olor3a# No* L'44;/,# Ma% 4;# ,=/5# ;,
SCR /,H Pan3an (* Court of ppeals# No* L'5=4==# October ,.# ,=..# ,<< SCR 5/;A*
&e ha(e hel$ that 8hen a co'o8ner of the propert% in Euestion e7ecute$ a $ee$ of
partition an$ on the stren3th thereof obtaine$ the cancellation of the title in the name of
their pre$ecessor an$ the issuance of a ne8 one 8herein he appears as the ne8 o8ner of
the propert%# thereb% in effect $en%in3 or repu$iatin3 the o8nership of the other co'
o8ners o(er their shares# the statute of limitations starte$ to run for the purposes of the
action institute$ b% the latter seeFin3 a $eclaration of the e7istence of the co'o8nership
an$ of their ri3hts thereun$er @Castillo (* Court of ppeals# No* L',.6-<# March 5,#
,=<-# ,6 SCR ;-=A* Since an action for recon(e%ance of lan$ base$ on implie$ or
constructi(e trust prescribes after ten @,6A %ears# it is from the $ate of the issuance of such
title that the effecti(e assertion of a$(erse title for purposes of the statute of limitations is
counte$ @)aramil (* Court of ppeals# No* L'5,.;.# u3ust 5,# ,=//# /. SCR -46A*
E(i$ence sho8s that TCT No* 4/-- in the name of the le3al heirs of Lino Delima#
represente$ b% +alileo Delima# 8as cancelle$ b% (irtue of an affi$a(it e7ecute$ b%
+alileo Delima an$ that on Gebruar% -# ,=;-# +alileo Delima obtaine$ the issuance of a
ne8 title in Ms name numbere$ TCT No* 566= to the e7clusion of his co'heirs* The
issuance of this ne8 title constitute$ an open an$ clear repu$iation of the trust or co'
o8nership# an$ the lapse of ten @,6A %ears of a$(erse possession b% +alileo Delima from
Gebruar% -# ,=;- 8as sufficient to (est title in him b% prescription* s the certificate of
title 8as notice to the 8hole 8orl$ of his e7clusi(e title to the lan$# such reDection 8as
bin$in3 on the other heirs an$ starte$ as a3ainst them the perio$ of prescription* Hence#
8hen petitioners file$ their action for recon(e%ance an$Kor to compel partition on
Gebruar% 4=# ,=<.# such action 8as alrea$% barre$ b% prescription* &hate(er claims the
other co'heirs coul$ ha(e (ali$l% asserte$ before can no lon3er be in(oFe$ b% them at this
time*
CCORDIN+L1# the petition is hereb% DENIED an$ the assaile$ $ecision of the Court
of ppeals $ate$ Ma% ,=# ,=// is GGIRMED*
SO ORDERED*
+*R* No* L'5=4== October ,.# ,=..
ISC# SEVERINO# MRI# TELESGOR# GELIS# SERPIO# SIMEON an$
MCRI all surname$ PN+N#petitioners#
(s*
CO2RT OG PPELS an$ TEODOR +RCI# respon$ents*
Ma3tan33ol C* +uni3un$o for petitioners*
Da(i$ C* Canta for pri(ate respon$ent*

CR2"# )*0
The propert% in Euestion is a parcel of lan$ 8ith an area of <5; sEuare meters an$ situate$
in San Pascual# Oban$o# Bulacan* , It 8as ori3inall% o8ne$ b% Leon Hilario an$ is no8
bein3 $ispute$ bet8een the herein petitioners# 8ho are his 3reat 3ran$chil$ren b% his
$au3hter Sil(estra# an$ the pri(ate respon$ent# Teo$ora +arcia# 8ho is his 3ran$$au3hter
b% his $au3hter Catalina* 4
In ,=<-# the petitioners file$ an application for the re3istration of the lan$ in their names
b% (irtue of their continuous an$ e7clusi(e possession thereof since ,.=;# b% themsel(es
an$ their father an$ 3ran$father before them* fter proper notices b% publication an$
postin3 as reEuire$# the trial court issue$ an or$er of 3eneral $efault# there bein3 no
opposition to the application# an$ procee$e$ to hear the e(i$ence of the applicants e7'
parte* On the basis thereof# the application 8as appro(e$ on March 5,# ,=<<*
On )une .# ,=<<# the herein pri(ate respon$ent file$ a petition to set asi$e the sai$
$ecision# 8hich the trial Court 3rante$# 5 a$mittin3 at the same time her opposition to the
application an$ settin3 the case for reception of her e(i$ence* This e(i$ence sou3ht to
sho8 that the lan$ 8as inherite$ b% Leon HilarioQs three chil$ren# but the son# Gelicisimo#
8ai(e$ his ri3ht thereto an$ thereb% ma$e his t8o sisters# Sil(estra an$ Catalina# its
e7clusi(e co'o8ners* s CatalinaQs $au3hter# she 8as entitle$ to one'half of the propert%#
the other half 3oin3 to Sil(estraQs heirs# the petitioners herein an$ the latterQs
3ran$chil$ren* -
On September ,5# ,=<.# the trial Du$3e issue$ an or$er $ismissin3 the opposition an$
reinstatin3 his ori3inal or$er of March 5,#,=<<* ; His reason 8as that 8hate(er ri3hts
Teo$ora mi3ht ha(e ha$ o(er the propert% ha$ been forfeite$ b% e7tincti(e prescription
because she ha$ left the lan$ in ,=-4 an$ ha$ not since then asserte$ an% claim thereto
until ,=<<*
On appeal to the respon$ent court# < this $ecision 8as re(erse$ on the 3roun$ that the
appellees ha$ not clearl% pro(e$ that the% ha$ acEuire$ the propert% b% prescription*
Hence# the appellant 8as entitle$ to one'half of the propert% as heir# conformabl% to her
opposition in the court a Euo* Their motion for reconsi$eration ha(in3 been $enie$# the%
ha(e no8 come to this Court in a petition for re(ie8 b% certiorari un$er Rule -; of the
Rules of Court*
The petitionersQ position is that the respon$ent court erre$ in hol$in3 that the pri(ate
respon$ent 8as entitle$ to one'half of the lan$# 8hich she ha$ not lost b% e7tincti(e
prescription because it 8as hel$ b% them in trust for her* The% also insist that the appeale$
$ecision completel% $isre3ar$e$ the factual fin$in3s of the trial court that the% ha$
acEuire$ the 8hole lan$ b% (irtue of their lon3# continue$ an$ a$(erse possession thereof#
8hich shoul$ bar an% claim b% Teo$ora to her suppose$ part o8nership*
It is stresse$ at the outset that the appellate court is not necessaril% boun$ b% the factual
fin$in3s of the trial court simpl% because the latter ha$ the opportunit% to obser(e the
8itnesses $irectl% an$ assess their cre$ibilit% b% their $eportment* &hile this ma% be a
conce$e$ a$(anta3e of the trial Du$3e# the appellate court ma% still re(erse his fin$in3s of
fact if the% are not base$ on the e(i$ence submitte$ or ha(e been reache$ 8ithout
consi$erin3 the other matters of recor$ that mi3ht ha(e $ictate$ a $ifferent conclusion*
The Court of ppeals precisel% is (este$ 8ith Duris$iction to re(ie8 Euestions of fact as
$eci$e$ b% the lo8er court* It 8oul$ be e(a$in3 this responsibilit% if it shoul$ merel%
a$opt the fin$in3s in the $ecision un$er re(ie8 on the con(enient Dustification that the
trial Du$3e ha$ the opportunit%# 8hich it $i$ not ha(e# of 3au3in3 the reliabilit% of the
8itnesses first'han$*
&hen# therefore# the respon$ent court accepte$ the pri(ate respon$entQs alle3ation that the
lan$ 8as inherite$ b% the parties from their common ancestor# Leon Hilario# such a
fin$in3# base$ on the recor$ an$ not reDecte$ but e(en assume$ b% the trial court# $i$ not#
in our (ie8# constitute 3ra(e abuse of $iscretion* n$ 8hen# on the stren3th of this
fin$in3# it then hel$ that an implie$ trust 8as create$ bet8een the petitioners 8ho 8ere in
possession of the lan$# an$ Teo$ora +arcia# their aunt an$ co'heir# that too# as 8e see it# is
not an arbitrar% assumption*
In fact# the Court feels this is the more plausible relationship bet8een the parties#
compare$ to the (ersion offere$ b% the petitioners# 8ho claim the% acEuire$ the propert%
from their 3ran$father throu3h their father# 8ho apparentl% acEuire$ it from his mother#
Leon HilarioQs $au3hter* It $oes not appear that the% ha(e pre'empte$ the other heirs to
the propert% throu3h an% other mo$e of acEuisition# liFe sale or some similar e7clusi(e
transaction* The% ha(e not submitte$ an% e(i$ence of ho8 the% acEuire$ the lan$ from
their 3reat 3ran$father# confinin3 themsel(es to the assertion that the% ha(e continue$ his
ori3inal possession# presumabl% as heirs of their father# 8ho inherite$ from his mother
Sil(estra# 8ho 8as the $au3hter of Hilario* If this be their theor%# then the% una(oi$abl%
must reco3ni?e Teo$ora +arciaQs o8n claim to the subDect propert% as she too 8as an heir#
bein3 the $au3hter of Catalina# 8ho 8as also a $au3hter of Hilario*
The trial court sai$# ho8e(er# that assumin3 Teo$ora ha$ the ri3ht to the $ispute$
propert%# the same 8as forfeite$ b% her throu3h e7tincti(e prescription b% failure to assert
it in time* In its ori3inal $ecision# it affirme$ the petitionersQ claim that the% ha$ acEuire$
o8nership o(er the 8hole propert% b% their a$(erse possession thereof for more than
thirt% %ears in concept of o8ner* Teo$ora +arcia apparentl% $i$ not challen3e such
o8nership an$ so b% her inaction fore(er lost the ri3ht to $o so*
The respon$ent court# reDectin3 this contention# hel$ that the petitionersQ possession 8as
not for their benefit alone but also in fa(or of Teo$ora# 8ho 8as a co'heir 8ith them an$
therefore also a co'o8ner of the propert%* In other 8or$s# their possession# 8hile a$(erse
to the rest of the 8orl$# 8as not a3ainst Teo$ora herself# 8hose share the% hel$ in implie$
trust for her as a co'o8ner of the lan$# an$ 8hose fruits their father share$ 8ith her
occasionall%# or at least promise$ her she 8oul$ 3et e(entuall%* The Court belie(es that
this# too# is not an arbitrar% conclusion*
To support their claim of e7clusi(e o8nership of the entire lan$# the petitioners stress that
the propert% 8as $eclare$ for ta7ation purposes in the name of Tomas Pan3an# their
father# in ,=-. an$ another ta7 $eclaration 8as issue$# also in his name# in ,=<;*
Moreo(er# real estate ta7es 8ere pai$ b% them from ,=6. to ,=,-# ,=56 to ,=54# ,=;< to
,=;/# an$ ,=<6 to ,=<;# 8hereas Teo$ora +arcia# b% her o8n a$mission# ne(er pai$ an%
ta7 at all on the $ispute$ lan$* /
Ta7 $eclarations are in$icia but not conclusi(e proof of o8nership* . If the propert% 8as
$eclare$ in the name of To as Pan3an onl%# it coul$ be that this 8as $one onl% for reasons
of con(enience# more so if it 8as un$erstoo$# as the pri(ate respon$ent $i$# that he 8as
$eclarin3 the propert% not onl% for himself but for herself also as the other co'o8ner* s
for the a$mitte$ fact that Teo$ora +arcia ne(er actuall% pai$ the real estate ta7es# the
e7planation she 3a(e 8as that she assume$ her share of such ta7es 8as bein3 pai$ from
her share in the fruits of her portion of the lan$# 8hich she sai$ she 8as not 3ettin3
re3ularl%# much less in full* &e hol$ that this e7planation is also plausible enou3h*
But for all this# there is still the Euestion of 8hether or not Teo$ora +arcia# b% her failure
to assert her ri3ht# allo8e$ the statutor% perio$ to lapse# thus enablin3 the petitioners to
perfect their claim of o8nership b% acEuisiti(e prescription an$ so e7clu$e her from her
share in the subDect propert%*
It is a settle$ rule that possession b% one co'o8ner 8ill not be re3ar$e$ as a$(erse to the
other co'o8ners but in fact as beneficial to all of them* = Hence# as lon3 as his co'
o8nership is reco3ni?e$# an action to compel partition 8ill not prescribe an$ ma% be file$
at an% time a3ainst the actual possessor b% an% of the other co'o8ners* ,6 Ho8e(er# if the
co'o8ner actuall% hol$in3 the propert% asserts e7clusi(e $ominion o(er it a3ainst the
other co'o8ners# the corollar% of the rule is that he can acEuire sole title to it after the
lapse of the prescribe$ prescripti(e perio$* Grom that moment# the Euestion in(ol(e$ 8ill
be one of o8nership an$ no lon3er mere partition* ,,
ccor$in3 to the petitioners# there 8as such repu$iation 8hich 8as a$mitte$ b% the
pri(ate respon$ent herself Testif%in3 for herself at the hearin3 on her opposition in the
re3istration procee$in3s# she $eclare$0
TT1* CNLS0
M0 fter the $eath of Tomas Pan3an# $i$ %ou asF the heirs of Tomas
Pan3an of %our alle3e$ share in the propert% in EuestionN
0 1es# sir*
M0 &hat $i$ the% tell %ouN
0 The% sai$ that I ha(e no ri3ht to a share an$ the% 8onQt 3i(e me m% share*
M0 Ho8 man% %ears a3o $i$ %ou asF from themN
0 Imme$iatel% after the $eath of their father*
M0 That 8as some 46 %ears a3oN
0 I $o not Fno8 ho8 man% %ears a3o*
M0 n$ $urin3 all that span of more than 46 %ears a3o %ou $i$ not file
an% action to reco(er %our share on the lan$ in EuestionN
0 No sir# it 8as onl% this time * ,4
Gor title to prescribe in fa(or of the co'o8ner# ho8e(er# there must be a clear sho8in3
that he has repu$iate$ the claims of the other co'o8ners an$ that the% ha(e been
cate3oricall% a$(ise$ of the e7clusi(e claim he is maFin3 to the propert% in Euestion* It is
onl% 8hen such uneEui(ocal notice has been 3i(en that the perio$ of prescription 8ill
be3in to run a3ainst the other co'o8ners an$ ultimatel% $i(est them of their o8n title if
the% $o not seasonabl% $efen$ it* ,5
$(erse possession reEuires the concurrence of the follo8in3 circumstances0
,* That the trustee has performe$ uneEui(ocal acts amountin3 to an ouster of the cestui
Eue trustH
4* That such positi(e acts of repu$iation ha$ been ma$e Fno8n to the cestui Eue trustH an$
5* That the e(i$ence thereon shoul$ be clear an$ conclusi(e* ,-
On the basis of the e(i$ence presente$ b% the parties# the Court is not con(ince$ that the
abo(e reEuirements ha(e been satisfie$* lthou3h there are a$mitte$l% some prece$ents
to the contrar%# it 8oul$ appear that the 8ei3ht of authorit% reEuires a cate3orical an$
final reDection of the co'o8nersQ claim# usuall% manifeste$ b% a formal le3al action# to
maFe the prescripti(e perio$ start to run a3ainst the claimant* ThusT
Gilin3 b% a trustee of an action in court a3ainst the trustor to Euiet title to
propert%# or for reco(er% of o8nership thereof# hel$ in possession b% the former#
ma% constitute an act of repu$iation of the trust repose$ on him b% the latter* ,;
The issuance of the certificate of title 8oul$ constitute an open an$ clear
repu$iation of an% trust# an$ the lapse of more than 46 %ears# open an$ a$(erse
possession as o8ner 8oul$ certainl% suffice to (est title b% prescription* ,<
n action for the recon(e%ance of lan$ base$ on implie$ or constructi(e trust
prescribes 8ithin ,6 %ears* n$ it is from the $ate of the issuance of such title
that the effecti(e assertion of a$(erse title for purposes of the statute of
limitation is counte$* ,/
The prescripti(e perio$ ma% onl% be counte$ from the time petitioners
repu$iate$ the trust relation in ,=;< upon the filin3 of the complaint for reco(er%
of possession a3ainst pri(ate respon$ents so that the counterclaim of the pri(ate
respon$ents containe$ in their amen$e$ ans8er 8herein the% asserte$ absolute
o8nership of the $ispute$ realt% b% reason of the continuous an$ a$(erse
possession of the same is 8ell 8ithin the ,6'%ear prescripti(e perio$* ,.
There is clear repu$iation of a trust 8hen one 8ho is an apparent a$ministrator
of propert% causes thecancellation of the title thereto in the name of the apparent
beneficiaries an$ 3ets a ne8 certificate of title in his o8n name* ,=
It is onl% 8hen the $efen$ants# alle3e$ co'o8ners of the propert% in Euestion#
e7ecute$ a $ee$ of partition an$ on the stren3th thereof obtaine$ the cancellation
of the title in the name of their pre$ecessor an$ the issuance of a ne8 one
8herein the% appear as the ne8 o8ners of a $efinite area each# thereb% in effect
$en%in3 or repu$iatin3 the o8nership of one of the plaintiffs o(er his alle3e$
share in the entire lot# that the statute of limitations starte$ to run for the
purposes of the action institute$ b% the latter seeFin3 a $eclaration of the
e7istence of the co'o8nership an$ of their ri3hts thereun$er* 46
The establishe$ e(i$ence clearl% sho8s that the subDect lan$ 8as inherite$ b% the
petitioners an$ the pri(ate respon$ent as co'heirs of their common ancestor# Leon Hilario#
8hose possession the% continue$ to acEuire prescripti(e title o(er the propert%* That
possession 8as ori3inall% in the name of all the heirs# inclu$in3 Teo$ora +arcia# 8ho in
fact ha$ been assure$ b% Tomas Pan3an# the petitionersQ father# that she 8oul$ 3et the
share to 8hich she 8as entitle$* The petitioners ha(e not pro(e$ that their possession
e7clu$e$ their co'o8ner an$ aunt or that the% $eri(e$ their title from a separate
con(e%ance to them of the propert% b% Leon Hilario* Parentheticall%# such a con(e%ance#
if it e7iste$# 8oul$ be Euestionable as it mi3ht ha(e $epri(e$ LeonQs other chil$ren of
their le3itime* In an% case# the petitioners appear to ha(e arro3ate$ the entire propert% to
themsel(es upon their fatherQs $eath sometime in ,=-4 or at the latest in ,=<; 8hen the%
sou3ht to re3ister the lan$ in their names to the e7clusion of Teo$ora +arcia* The
Euestion is# Di$ such an act be3in the perio$ of e7tincti(e prescription a3ainst the pri(ate
respon$entN
Manifestl%# the petitioners ha(e acte$ in ba$ faith in $en%in3 their aunt an$ co'heir her
le3al share to the propert% the% ha$ all inherite$ from Leon Hilario throu3h their
respecti(e parents* This is re3rettable as Teo$ora +arcia is their fatherQs first cousin 8ho
apparentl% truste$ him an$# in$ee$# relie$ on his promise that her share 8oul$ be
protecte$* Tomas Pan3an presumabl% 8as sincere in this assurance# but it 8as
unfortunatel% not honore$ b% his chil$ren upon his $eath for the% soon $ismisse$ out of
han$ Teo$ora +arciaQs claim to the subDect propert%*
In cases 8here there is a clear sho8in3 of imposition an$ improper moti(es# the courts
must be (i3ilant in the protection of the ri3hts of the e7ploite$* 4, So sai$ the respon$ent
court# an$ 8e a3ree# &e note that the pri(ate respon$ent Lis a poor an$ i3norant <4'%ear
ol$ 8i$o8L [ 8hose misplace$ trust in her nephe8s an$ nieces is bein3 use$ no8
precisel% to $efeat her claim to the share that she belie(es is ri3htfull% hers* It is a sorr%
spectacle# in$ee$# to see her o8n close Fin lon3in3 up on her# so to speaF# to $epri(e her
of her small herita3e# an$ in her ol$ a3e at that*
&ith all this in min$# 8e affirm the fin$in3 of the respon$ent court that there 8as no
a$eEuate notice b% the petitioners to the pri(ate respon$ent of the reDection of her claim to
her share in the subDect propert%* Noticeabl% absent here is a cate3orical assertion b% the
petitioners of their e7clusi(e ri3ht to the entire propert% that barre$ her o8n claim of
o8nership of one'half thereof nor is there an% e7planation as to 8h% the% sai$ she ha$ no
ri3ht to a share* If this trustin3 8oman $i$ not imme$iatel% taFe le3al action to protect her
ri3hts# it 8as simpl% because of forbearance to8ar$ her nephe8s an$ nieces# let alone the
fact that there 8as reall% no cases belli as %et that reEuire$ her to act $ecisi(el%* That
le3al pro(ocation arose onl% 8hen the petitioners commence$ the re3istration
procee$in3s in ,=<;# an$ it 8as from that time she 8as reEuire$ to act# as she $i$# to
protect her interests*
In an earlier case 44 8e stresse$ that this Court is not onl% a court of la8 but also of
Dustice* Gace$ 8ith a choice bet8een a $ecision that 8ill ser(e Dustice an$ another that
8ill $en% it because of a too strict interpretation of the la8# 8e must resol(e in fa(or of
the former# for the ultimate en$ of the la8 is Dustice* Bonus Du$e7 secun$um aeEuum at
bonum Du$icat stricto Duri praefert* 45 This is a 8ise ma7im 8e 8ill follo8 here in rulin3
for the $epri(e$ an$ i3norant ol$ 8i$o8*
&HEREGORE# the petition is DENIED an$ the challen3e$ $ecision GGIRMED in full#
8ith costs a3ainst the petitioners* It is so or$ere$*
SECOND DIVISION
9+*R* No* ,;<5;/* Gebruar% ,.# 466;:
EN+R* +BRIEL V* LE1SON# DR* )OSEGIN L* POBLETE# GE LE1SON M2#
CRIDD V* LE1SON an$ ESPERN" V* LE1SON# petitioners# (s*
NCINSINO BONT21N an$ M2RECI B* BONT21N# respon$ents*
D E C I S I O N
CLLE)O# SR*# )*0
This is a petition for re(ie8 on certiorari of the Decision9,: of the Court of ppeals
@CA# as 8ell as its Resolution in C'+*R* CV No* <--/, $en%in3 the motion for
reconsi$eration of the sai$ $ecision*
The ntece$ents
Cali7to +abu$ 8as the o8ner of a parcel of lan$ locate$ in Baran3a% $la8on#
Mabolo# Cebu Cit%# 8hich 8as $eclare$ for ta7ation purposes un$er Ta7 Declaration
@T*D*A No* 654/<'R in ,=-;94: 8ith the follo8in3 boun$aries0
North Cali7to +abu$ East Marcelo Cosi$o
South Pe$ro Bontu%an &est suncion $ulfo*95:
Because of the construction of a pro(incial roa$# the propert% 8as $i(i$e$ into t8o
parcels of lan$ co(ere$ b% T*D* No* 654/<'R an$ T*D* No* 6,=/='R* On Gebruar% ,-#
,=-.# +abu$ e7ecute$ a Dee$ of bsolute Sale9-: o(er the propert% co(ere$ b% T*D*
No* 654/<'R# as 8ell as the other lot co(ere$ b% T*D* No* 6,=/='R# in fa(or of Protacio
Tabal# marrie$ to Leo$e3aria Bontu%an* On the basis of the sai$ $ee$# T*D* No* 654/<'R
8as cancelle$ b% T*D* No* ,5<,;'R in the name of Protacio Tabal effecti(e ,=-=*9;: On
)anuar% ;# ,=;=# Tabal e7ecute$ a Dee$ of Sale9<: o(er the propert% co(ere$ b% T*D*
No* ,5<,;'R in fa(or of Simeon No(al# marrie$ to Vi(encia Bontu%an# $au3hter of
+re3orio Bontu%an# for P.66*66* T*D* No* ,5<,;'R 8as cancelle$ b% T*D* No* ,665;< in
the names of the spouses No(al*9/: +re3orio Bontu%an recei(e$ a cop% of the sai$ ta7
$eclaration in behalf of the spouses No(al*9.: The latter ta7 $eclaration 8as then
cancelle$ b% T*D* No* 66../< un$er the same names effecti(e ,=</*9=:
SubseEuentl%# the propert% 8as sur(e%e$ b% Ca$astral Lan$ Sur(e%or Mauro 2*
+abriel on )anuar% 44# ,=<-* The plan sur(e% 8as appro(e$ on September 56# ,=<<* 9,6:
The propert% co(ere$ b% T*D* No* 66../< 8as i$entifie$ as Lot No* ,/,;6 of Cebu
Ca$astre No* ,4# 8hile the propert% co(ere$ b% T*D* No* 6,=/='R 8as i$entifie$ as Lot
No* ,54/4* On Ma% 44# ,=<.# the spouses No(al e7ecute$ a Dee$ of bsolute Sale9,,:
o(er the t8o lots co(ere$ b% T*D* No* 66../< in fa(or of Lour$es V* Le%son for
P-#666*66* Lour$es Le%son tooF possession of the propert% an$ ha$ it fence$* Despite
the sai$ sale# T*D* No* 66../< 8as cancelle$ b% T*D* No* 4,4</ effecti(e ,=/-*9,4:
Thereafter# T*D* No* 4,4</ 8as cancelle$ b% T*D* No* 45.4,9,5: 8hich# in turn# 8as
cancelle$ b% T*D* No* 6,',/-;; effecti(e ,=.6*9,-: In ,=.=# the latter 8as cancelle$ b%
a ne8 ta7 $eclaration# T*D* No* 6,'66,'66<-<* ll these ta7 $eclarations 8ere in the
names of the spouses No(al*9,;:
Mean8hile# Lour$es Le%son pai$ for the realt% ta7es o(er the propert%* Ho8e(er#
the ta7 $eclaration issue$ thereon continue$ to be un$er the names of the spouses No(al*
9,<:
Despite his Fno8le$3e that the propert% ha$ been purchase$ b% his son'in'la8 an$
$au3hter# the spouses No(al# +re3orio Bontu%an# 8ho 8as then =, %ears ol$# file$ an
application 8ith the Bureau of Lan$s for a free patent o(er Lot No* ,/,;6 on December
-# ,=<.* He alle3e$ therein that the propert% 8as public lan$ an$ 8as neither claime$ nor
occupie$ b% an% person#9,/: an$ that he first entere$ upon an$ be3an culti(atin3 the
same in ,=,.* Thus# on No(ember ,=# ,=/,# Gree Patent No* ;,6-<5 8as issue$ o(er Lot
No* ,/,;6 in his fa(or# on the basis of 8hich Ori3inal Certificate of Title @OCTA No* 6'
,<,= 8as issue$ to an$ un$er his name on March 4,# ,=/-*9,.: nother parcel of lan$#
Lot No* ,54/4# 8as also re3istere$ un$er the name of +re3orio Bontu%an un$er OCT No*
6',<,.* He then $eclare$ Lot No* ,/,;6 for ta7ation purposes un$er T*D* No* ,5;=<
effecti(e ,=/-*9,=: On Gebruar% 46# ,=/<# +re3orio Bontu%an e7ecute$ a Dee$ of
bsolute Sale946: o(er Lot No* ,/,;6 in fa(or of his son# Naciansino Bontu%an*
On pril 4.# ,=.6# +re3orio Bontu%an# then ,65 %ears ol$# e7ecute$ another Dee$ of
bsolute Sale94,: o(er Lot Nos* ,54/4 an$ ,/,;6# co(ere$ b% OCT No* 6',<,. an$
OCT No* 6',<,=# respecti(el%# in fa(or of Naciansino Bontu%an for P5#666*66* On the
basis of the sai$ $ee$# OCT No* 6',<,= 8as cancelle$ b% TCT No* ,5=4 in the name of
Naciansino Bontu%an on December 4# ,=.6*944: +re3orio Bontu%an $ie$ intestate on
pril ,4# ,=.,*945:
On March 56# ,=.,# the spouses Bontu%an e7ecute$ a Real Estate Mort3a3e o(er Lot
No* ,/,;6 co(ere$ b% OCT No* 6',<,= in fa(or of the De(elopment BanF of the
Philippines @DBPA as securit% for a loan of P,,#466*66*94-: Naciansino Bontu%an ha$
earlier e7ecute$ an affi$a(it that the propert% 8as not tenante$* Shortl% thereafter# the
spouses Bontu%an left the Philippines an$ resi$e$ in the 2nite$ States* Mean8hile#
Lour$es Le%son $ie$ intestate*
The spouses Bontu%an returne$ to the Philippines in ,=.. to re$eem the propert%
from DBP onl% to $isco(er that there 8ere tenants li(in3 on the propert% installe$ b%
En3ineer +abriel Le%son# one of the late Lour$es Le%sonCs chil$ren* Despite bein3
informe$ that the sai$ spouses o8ne$ the propert%# the tenants refuse$ to (acate the same*
The tenants also refuse$ to $eli(er to the spouses the pro$uce from the propert%* The
spouses Bontu%an re$eeme$ the propert% from DBP on September 44# ,=.=*
On Gebruar% ,4# ,==5# )ose Bontu%an# Nie(es tilano# Pacifico Bontu%an# Vi(encia
No(al an$ Naciansino Bontu%an# the sur(i(in3 heirs of +re3orio Bontu%an# e7ecute$ an
E7traDu$icial Settlement94;: of the latterCs estate an$ a$Du$icate$ Lot No* ,54/4 in fa(or
of Naciansino* Base$ on the sai$ $ee$# T*D* No* 6,'66,'66.// 8as issue$ to an$ un$er
the name of Naciansino o(er the sai$ propert% startin3 ,==-*
On )une 4-# ,==5# Naciansino Bontu%an# throu3h counsel# 8rote En3r* +abriel
Le%son# $eman$in3 that he be furnishe$ 8ith all the $ocuments e(i$encin3 his o8nership
o(er the t8o lots# Lots Nos* ,/,;6 an$ ,54/4*94<: En3r* Le%son i3nore$ the letter*
The spouses Bontu%an# thereafter# file$ a complaint a3ainst En3r* Le%son in the
Re3ional Trial Court @RTCA of Cebu Cit% for Euietin3 of title an$ $ama3es* The% alle3e$
that the% 8ere the la8ful o8ners of the t8o lots an$ 8hen the% $isco(ere$# upon their
return from the 2nite$ States# that the propert% 8as occupie$ an$ culti(ate$ b% the
tenants of En3r* Le%son# the% $eman$e$ the pro$uction of $ocuments e(i$encin3 the
latterCs o8nership of the propert%# 8hich 8as i3nore$*
The spouses Bontu%an pra%e$ that# after $ue procee$in3s# Du$3ment be ren$ere$ in
their fa(or# thus0
&HEREGORE# premises consi$ere$# it is most respectfull% pra%e$ of this Honorable
Court to ren$er Du$3ment a3ainst the $efen$ant an$ in fa(or of the plaintiffs# to 8it0
@aA Confirmin3 the o8nership of the plaintiffs on the lots in EuestionH
@bA Or$erin3 $efen$ant to pa% the plaintiffs the amount of T8ent% Thousan$ Pesos
@P46#666*66A as the share of the plaintiffs of the pro$uce of the lots in EuestionH
@cA Or$erin3 $efen$ant to pa% plaintiffs the sum of P;6#666*66 as reimbursement of
attorne%Cs fees an$ the further sum of P;66*66 as appearance fee e(er% time the case is
calle$ for trialH
@$A Or$erin3 the $efen$ant to pa% plaintiffs the sum of P;6#666*66 as moral $ama3es
an$ e7emplar% $ama3es ma% be fi7e$ b% the courtH
@eA Or$erin3 $efen$ant to pa% plaintiffs the sum of P;#666*66 as actual e7penses for the
preparation an$ filin3 of the complaintH
@fA Or$erin3 $efen$ant to pa% the costsH an$
@3A +rantin3 to plaintiffs such other reliefs an$ reme$ies Dust an$ eEuitable in the
premises*94/:
In his ans8er to the complaint# En3r* Le%son a(erre$# b% 8a% of affirmati(e
$efenses# that the t8o lots 8ere but portions of a parcel of lan$ o8ne$ b% Cali7to +abu$#
co(ere$ b% T*D* No* 654/<'R# an$ 8as sub$i(i$e$ into t8o parcels of lan$ because of the
construction of a pro(incial roa$ on the propert%H +abu$ later sol$ the t8o lots to
Protacio Tabal# 8ho sol$ the same to Simeon No(al# marrie$ to Vi(encia Bontu%an# one
of the chil$ren of +re3orio Bontu%anH Simeon No(al later sol$ the propert% to Lour$es
Le%son on Ma% 44# ,=<. 8ho# forth8ith# tooF possession thereof as o8nerH an$ +re3orio
Bontu%an 8as issue$ a free patent o(er the propert% throu3h frau$* En3r* Le%son
conclu$e$ that the sai$ patent# as 8ell as OCT No* 6',<,= an$ TCT No* ,5=4# 8ere null
an$ (oi$ an$ that the plaintiffs acEuire$ no title o(er the propert%*
En3r* Le%son interpose$ a counterclaim a3ainst the spouses Bontu%an an$ replea$e$
as an inte3ral part thereof all the material alle3ations in his affirmati(e $efense* He
pra%e$ that# after $ue procee$in3s# Du$3ment be ren$ere$ in his fa(or# thus0
aA Dismissin3 PlaintiffsC complaint for failure to inclu$e in$ispensable partiesH
bA Declarin3 the Defen$ant an$ his four @-A sisters# namel%# Dr* )osefina L* Poblete#
Mrs* Ge L* Mua# Esperan?a Le%son an$ Cari$a$ Le%son as the true an$ le3al o8ners an$
possessors of the parcels of lan$ in issueH
cA Declarin3 OCT No* 6',<,= in the name of +re3orio Bontu%an an$ TCT No* ,5=4
in the name of Naciansino Bontu%an null an$ (oi$ an$ to or$er the Re3ister of Dee$s to
cancel the same an$ issue ne8 ones in fa(or of the Defen$ant +abriel V* Le%son an$ his
four @-A sisters# namel%0 Dr* )osefina L* Poblete# Mrs* Ge L* Mua# Esperan?a V* Le%son
an$ Cari$a$ V* Le%sonH
$A n$ on the Counterclaim# to or$er Plaintiffs to pa% the Defen$ant the follo8in3
sums0
$',A P;6#666*66 as attorne%Cs fees an$ appearance fee of P,#666*66 per
hearin3H
$'4A P;66#666*66 as moral $ama3esH
$'5A P46#666*66 as e7emplar% $ama3esH
$'-A P,6#666*66 as e7penses of liti3ation*
Defen$ant further pra%s for such other reliefs Dust an$ eEuitable in the premises*94.:
In $ue course# the other chil$ren of Lour$es Le%son# namel%# Dr* )osefina L* Poblete#
Ge Le%son Mua# Cari$a$ V* Le%son an$ Esperan?a V* Le%son# 8ere allo8e$ to inter(ene
as $efen$ants* The% file$ their ans8er'in'inter(ention 8herein the% a$opte$# in their
counterclaim# para3raphs / to 4< of the ans8er of their brother# En3r* Le%son# the ori3inal
$efen$ant* The% pra%e$ that# after $ue hearin3# Du$3ment be ren$ere$ in their fa(or as
follo8s0
&herefore# this Honorable Court is pra%e$ to ren$er Du$3ment in fa(or of the Defen$ant
an$ the Defen$ants'in'Inter(ention an$ a3ainst the Plaintiffs as follo8s0
aA Promissor% PlaintiffsC complaint for failure to inclu$e in$ispensable parties an$ for
lacF of cause of actionH
bA Declarin3 the Defen$ant an$ his four @-A sisters# namel%0 Dr* )osefina L* PobleteH
Mrs* Ge L* Mua# Esperan?a Le%son an$ Cari$a$ Le%son as the true an$ le3al o8ners an$
possessors of the parcels of lan$ in issueH
cA Declarin3 OCT No* 6',<,= in the name of +re3orio Bontu%an an$ TCT No* ,5=4
in the name of Naciansino Bontu%an null an$ (oi$ an$ to or$er the Re3ister of Dee$s to
cancel the same an$ issue ne8 ones in fa(or of the Defen$ant +abriel V* Le%son an$ his
four @-A sisters# namel%0 Dr* )osefina L* Poblete# Mrs* Ge L* Mua# Esperan?a V* Le%son
an$ Cari$a$ V* Le%sonH
$A On the Counterclaim# Plaintiffs shoul$ pa% the Defen$ants the follo8in3 sums0
$',A P;6#666*66 as attorne%Cs fees an$ appearance fee of P,#666*66 per
hearin3H
$'4A P;66#666*66 as moral $ama3es to each Inter(enorH
$'5A P;6#666*66 as e7emplar% $ama3esH
$'-A P,;#666*66 as e7penses of liti3ation*
Defen$ant further pra%s for such other reliefs Dust an$ eEuitable in the premises*94=:
In their repl%# the spouses Bontu%an a(erre$ that the counterclaim of the $efen$ants
for the nullit% of TCT No* ,5=4 an$ the recon(e%ance of the propert% 8as barre$ b%
laches an$ prescription*
On )anuar% 4,# ,===# the trial court ren$ere$ Du$3ment in fa(or of the Le%son heirs
an$ a3ainst the spouses Bontu%an* The fallo of the $ecision rea$s0
&HEREGORE# fore3oin3 consi$ere$ Du$3ment is hereb% ren$ere$ $ismissin3 plaintiffCs
complaint for $earth of e(i$ence $eclarin3 the $efen$ant an$ the inter(enors as the true
an$ le3al o8ners an$ possessors of the subDect parcels of lan$H $eclarin3 OCT No* 6',<,=
in the name of +re3orio Bontu%an an$ TCT No* ,5=4 in the name of Naciansino
Bontu%an null an$ (oi$H or$erin3 the Re3ister of Dee$s to cancel OCT No* 6',<,= an$
TCT No* ,5=4 an$ issue ne8 ones in fa(or of $efen$ant +abriel Le%son an$ inter(enors
)osefina Poblete# Ge Mua# Esperan?a Le%son an$ Cari$a$ Le%sonH or$erin3 plaintiff to
pa% $efen$ant an$ inter(enors the follo8in30
aA P;6#666*66 attorne%Cs feesH
bA ,#666*66 per appearanceH
cA ,66#666*66 moral $ama3es for $efen$ant an$
inter(enorsH
$A ,6#666*66 e7emplar% $ama3esH an$
eA ,6#666*66 liti3ation e7penses*
SO ORDERED*956:
The trial court hel$ that Simeon No(al ha$ sol$ the lots to Lour$es Le%son on Ma%
44# ,=<.# 8ho thus acEuire$ title o(er the propert%*
The spouses Bontu%an appeale$ the $ecision to the C 8hich affirme$# 8ith
mo$ification# the $ecision of the RTC* The appellate court hel$ that the Le%son heirs
8ere the o8ners of Lot No* ,54/5# 8hile the spouses Bontu%an 8ere the o8ners of Lot
No* ,/,;6* The C rule$ that the ans8er of the Le%son heirs to the complaint
constitute$ a collateral attacF of OCT No* 6',<,= 8hich 8as proscribe$ b% la8* The
Le%son heirs file$ a motion for reconsi$eration of the $ecision insofar as Lot No* ,/,;6
8as concerne$# conten$in3 that their counterclaim for the nullification of OCT No* 6'
,<,= containe$ in their ans8er constitute$ a $irect attacF on the sai$ title* The C $enie$
the motion*
The Le%son heirs then file$ a petition for re(ie8 8ith this Court an$ ma$e the
follo8in3 assi3nments of error0
Girst ssi3nment of Error
THE HONORBLE CO2RT OG PPELS COMMITTED ERROR &HEN IT R2LED
THT THE N2LLIT1 OR THE VLIDIT1 OG OCT NO* 6',<,= CNNOT BE
R2LED 2PON IN THESE PROCEEDIN+S BRO2+HT B1 THE RESPONDENTS
GOR THE M2IETIN+ OG THEIR TITLE*
Secon$ ssi3nment of Error
THE HONORBLE CO2RT OG PPELS +RVEL1 ERRED &HEN IT R2LED
THT PETITIONERSC NS&ER &ITH CO2NTERCLIM# PR1IN+ GOR THE
CNCELLTION OG PLINTIGGSC TORRENS CERTIGICTE IS MERE
COLLTERL TTCO ON THE TITLE*95,:
Thir$ ssi3nment of Error
THE PPELLTE CO2RT +RVEL1 ERRED &HEN IT MODIGIED THE
DECISION OG THE RE+IONL TRIL CO2RT DTED )N2R1 4,# ,=== B1
R2LIN+ THT PETITIONERS RE DECLRED THE O&NERS OG LOT ,54/5
B2T RESPONDENTS RE DECLRED THE O&NERS OG LOT ,/,;6 2NDER
OCT NO* 6',<,= ND PRESENTL1 COVERED B1 TCT NO* ,5=4 IN THE NME
OG NCINSINO BONT21N# DESPITE THE PPELLTE CO2RTCS
GGIRMIN+ THE GINDIN+S OG THE TRIL CO2RT THT GR2D &S
COMMITTED B1 +RE+ORIO BONT21N @RESPONDENTSC PREDECESSOR'IN'
INTERESTA IN CM2IRIN+ TITLE OVER THE S2B)ECT PROPERTIES*954:
Gourth ssi3nment of Error
THE HONORBLE CO2RT OG PPELS +RVEL1 ERRED &HEN IT R2LED
THT RECONVE1NCE OG TITLE OG LOT ,/,;6 COVERED B1 OCT NO* 6',<,=
ND PRESENTL1 COVERED B1 TCT NO* ,5=4# IN GVOR OG PETITIONERS
HD PRESCRIBED*955:
Gifth ssi3nment of Error
THE PPELLTE CO2RT +RVEL1 ERRED IN NOT +RNTIN+ TTORNE1CS
GEES ND PPERNCE GEES DESPITE RESPONDENTSC GR2D IN
CM2IRIN+ TITLE OVER THE S2B)ECT PROPERTIES*95-:
On the first t8o assi3nments of errors# the petitioners a(er that the counterclaim in
their ans8er to the complaint constitute$ a $irect attacF of the (ali$it% of OCT No* 6'
,<,=* The% maintain that the appellate courtCs reliance on the rulin3 of this Court in
Cimafrancia (* Interme$iate ppellate Court95;: 8as misplace$* The% assert that 8hat
is controllin3 is the rulin3 inPro Line Sports Center# Inc* (* Court of ppeals95<:
8herein this Court hel$ that the counterclaim of the petitioners therein constitute$ a $irect
attacF on a certificate of title* The petitioners# liFe8ise# cite$ Section ;; of ct No* -=<#
as amen$e$# to buttress their stance* The% plea$ that their ans8er to the complaint shoul$
be liberall% construe$ so as to affor$ them substantial Dustice*
On the other han$# the respon$ents assert that the $ecision of the C is correct* The%
claim that Lot No* ,/,;6 8as still public lan$ 8hen Lour$es Le%son purchase$ the same
from Simeon No(al# an$ that the propert% became pri(ate lan$ onl% 8hen Gree Patent No*
;,6-<5 8as issue$ to an$ un$er the name of +re3orio Bontu%an*
&e a3ree 8ith the contention of the petitioners that the C erre$ in not nullif%in3
OCT No* 6',<,= an$ TCT No* ,5=4 an$ or$erin3 the respon$ents to recon(e% the
propert% co(ere$ b% the sai$ title to the petitioners*
The respon$ents# as plaintiffs in the court a Euo# 8ere bur$ene$ to pro(e their claim
in their complaint that +re3orio Bontu%an 8as the o8ner of Lot No* ,/,;6 an$ that the%
acEuire$ the propert% in 3oo$ faith an$ for (aluable consi$eration from him*95/:
Ho8e(er# the respon$ents faile$ to $ischar3e this bur$en* The e(i$ence on recor$ sho8s
that Cali7to +abu$ sol$ the propert% to Protacio Tabal on Gebruar% ,-# ,=-.#95.: an$
that the latter sol$ the propert% to Simeon No(al on )anuar% ;# ,=;=*95=: Simeon No(al
then sol$ the propert% to Lour$es Le%son on Ma% 44# ,=<.*9-6: The respon$ents faile$
to a$$uce an% e(i$ence to pro(e that Lour$es Le%son# or e(en Simeon No(al# sol$ the
propert% to +re3orio Bontu%an# or to an% of the respon$ents for that matter* Since
+re3orio Bontu%an 8as not the o8ner of the propert%# he coul$ not ha(e sol$ the same to
his son Naciansino Bontu%an an$ the latterCs 8ife# the respon$ents herein* s the Latin
a$a3e 3oes0 NEMO DT M2OD NON HBET* +re3orio Bontu%an coul$ not fei3n
i3norance of Simeon No(alCs o8nership of the propert%# consi$erin3 that the latter 8as
his son'in'la8# an$ that he @+re3orio Bontu%anA 8as the one 8ho recei(e$ the o8nerCs
cop% of T*D* No* ,665;< co(erin3 the propert% un$er the name of Simeon No(al*9-,: t
the $orsal portion of the sai$ ta7 $eclaration# there 8as e(en an annotation that the
propert% 8as transferre$ to Simeon No(al as sho8n b% the $ee$ of sale e7ecute$ before
Notar% Public +re3orio * 2riarte 8ho notari?e$ the $ee$ of sale o(er the propert%
e7ecute$ b% Protacio Tabal in fa(or of Simeon No(al on )anuar% ;# ,=;=* 9-4: &e note
that the respon$ents faile$ to a$$uce in e(i$ence an% receipts of real propert% ta7
pa%ments ma$e on the propert% un$er their names# 8hich 8oul$ ha(e fortifie$ their claim
that the% 8ere the o8ners of the propert%* &e a3ree 8ith the fin$in3s of the C# thus0
This case in(ol(es t8o parcels of lan$ \ Lot ,/,;6 an$ Lot ,54/5* Lot ,/,;6 is
re3istere$ un$er the Torrens S%stem un$er the names of plaintiffs'appellants# 8hile Lot
,54/5 remaine$ to be unre3istere$*
In this case# recor$s sho8 that $efen$ant'appellee an$ inter(enors'appellees are the true
o8ners of the subDect lots* The% ha(e in their fa(or ta7 receipts co(erin3 the subDect lots
issue$ since ,=-;*
&hile# in$ee$# ta7 receipts an$ $eclarations are not incontro(ertible e(i$ence of
o8nership# such# ho8e(er# if accompanie$ 8ith open# a$(erse# continuous possession in
the concept of an o8ner# as in this case# constitute e(i$ence of 3reat 8ei3ht that person
un$er 8hose name the real ta7es 8ere $eclare$ has a claim of ri3ht o(er the lan$*
Gurther# $efen$ant'appellee an$ inter(enors'appellees presente$ before the trial court the
Dee$ of bsolute Sale $ate$ Gebruar% ,-# ,=-.# e7ecute$ b% Cali7to +abu$# con(e%in3
the subDect lots in fa(or of Protacio Tabal* The $ee$ is a notarial $ocument*
LiFe8ise presente$ is the Dee$ of bsolute Sale of the subDect lots $ate$ )anuar% ;# ,=;=#
e7ecute$ b% Protacio Tabal in fa(or of spouses Simeon No(al an$ Vi(encia Bontu%an*
The $ocument is# liFe8ise# a notarial $ocument*
Defen$ant'appellee an$ inter(enors'appellees also presente$ the Dee$ of bsolute Sale
of the subDect lots $ate$ Ma% 44# ,=<.# e7ecute$ b% spouses Simeon No(al an$ Vi(encia
Bontu%an in fa(or of Lour$es Le%son* The $ee$ is a notarial $ocument*
notarial $ocument is e(i$ence of the facts in clear# uneEui(ocal manner therein
e7presse$* It has in its fa(or the presumption of re3ularit%* It is a$missible in e(i$ence
8ithout necessit% of preliminar% proof as to its authenticit% an$ $ue e7ecution*
There e7ist @sicA no trace of irre3ularit% in the transfers of o8nership from the ori3inal
o8ner# Cali7to +abu$# to $efen$ant'appellee an$ inter(enors'appellees*
Plaintiffs'appellants# on the other han$# offere$ no con(incin3 e(i$ence as to ho8 their
pre$ecessor'in'interest# +re3orio Bontu%an# acEuire$ the subDect lots* Plaintiffs'
appellants presente$ onl% the Gree Patent an$ OCT No* 6',<,=# co(erin3 Lot No* ,/,;6#
issue$ in the name of +re3orio Bontu%an*
s to Lot No* ,54/5# &e fin$ no sufficient reason 8h% $efen$ant'appellee an$
inter(enors'appellees shoul$ be $isturbe$ in their o8nership an$ possession of the same*
9-5:
s copiousl% sho8n b% the recor$# +re3orio Bontu%an file$ his application for a free
patent 8ith the Bureau of Lan$s on December -# ,=<. in 3ross ba$ faith# thereb%
$efrau$in3 Lour$es Le%son of the sai$ propert% throu3h $eceit* +re3orio Bontu%an
falsel% $eclare$ in the sai$ application0 @aA that he entere$ upon an$ culti(ate$ the
propert% since ,=,. an$ that the propert% 8as not claime$ or occupie$ b% an% personH an$
@bA that Lot No* ,/,;6 8as locate$ in Sirao# Cebu Cit%# 8hen# in fact# the propert% 8as
locate$ in $la8on# Cebu Cit%* Lour$es Le%son 8as not notifie$ of the sai$ application
an$ faile$ to file an% opposition thereto* +re3orio Bontu%an 8as then able to secure Gree
Patent No* ;,6-<5 on No(ember ,=# ,=/, an$ OCT No* 6',<,= on March 4,# ,=/-* It
appears in the sai$ title that the propert%Cs location 8as in$icate$ as ISirao# Cebu
Cit%*J9--: In$ee$# the C $eclare$ that +re3orio Bontu%an ha$ acEuire$ title to the
propert% throu3h frau$0
Ho8e(er# as to Lot No* ,/,;6# &e fin$ that $espite the frau$ committe$ b% +re3orio
Bontu%an @plaintiffs'appellantsC pre$ecessor'in'interestA in acEuirin3 his title o(er the sai$
lot# o8nership o(er the sai$ lot shoul$ be a$Du$3e$ in fa(or of plaintiffs'appellants*
Recor$s# in$ee$# sho8 that# at the time 8hen +re3orio Bontu%an applie$ for Gree Patent#
+re3orio Bontu%an 8as li(in3 8ith his $au3hter# Vi(encia Bontu%an @$efen$ant'
appelleeCs pre$ecessor'in'interestA* Thus# +re3orio Bontu%an must ha(e Fno8n that at
the time 8hen he applie$ for free patent on December ,=<.# the subDect lots 8ere alrea$%
sol$ on Ma% ,=<. b% his $au3hter Vi(encia Bontu%an in fa(or of Lour$es Le%son#
pre$ecessor'in'interest of $efen$ants'appellees*
Moreo(er# recor$s further sho8 that +re3orio Bontu%an sol$ t8ice Lot 9No*: ,/,;6 to
plaintiffs'appellants* The first 8as in ,=/< an$ the other 8as in ,=.6* Plaintiffs'
appellants offere$ no reasonable e7planation 8h% +re3orio Bontu%an ha(e @sicA to sell
t8ice Lot No* ,/,;6 in fa(or of plaintiffs'appellants*
s foun$ b% the trial court# these are ba$3es of ba$ faith 8hich affect the (ali$it% of the
title of +re3orio Bontu%an o(er the subDect lots*
&e are a8are that the torrens s%stem $oes not create or (est title* It onl% confirms an$
recor$s title alrea$% e7istin3 an$ (este$* It $oes not protect a usurper from the true
o8ner* It cannot be a shiel$ for the commission of frau$* It $oes not permit one to enrich
himself at the e7pense of another* &here one $oes not ha(e an% ri3htful claim o(er a real
propert%# the torrens s%stem of re3istration can confirm or recor$ nothin3*9-;:
The fin$in3s of the C affirme$ the fin$in3s of the trial court in its $ecision# thus0
fter ha(in3 thorou3hl% anal%?e$ the recor$s an$ the e(i$ences a$$uce$ $urin3 the trial
of this case# this Court is con(ince$ an$ sincerel% belie(es that the lots in Euestion 8ere
ori3inall% o8ne$ b% Cali7to +abu$ as e(i$ence$ b% T*D* 9No*: 654/<R marFe$ as E7h*
I,*J In ,=-;# this consiste$ of onl% one lot in $la8on# Cebu Cit%# as there 8as no
pro(incial roa$ %et* Ho8e(er in ,=-.# the sai$ parcel of lan$ 8as $i(i$e$ into t8o
because a pro(incial roa$ 8as constructe$ passin3 throu3h it* Hence# T*D* 9No*: 654/<R
an$ T*D* 9No*: 6,=/='R 8ere issue$ to Cali7to +abu$* On Gebruar% ,<# ,=-.# Cali7to
+abu$ sol$ the sai$ parcels of lan$ to spouses Protacio Tabal an$ Lu$e3aria @sicA
Bontu%an as e(i$ence$ b% an bsolute Dee$ of Sale# E7h* I4*J On )anuar% ;# ,=;=#
spouses Protacio Tabal an$ Lu$e3aria @sicA Bontu%an# in turn# sol$ the same parcels of
lan$ to spouses Simeon No(al an$ Vi(encia Bontu%an as e(i$ence$ b% a Dee$ of Sale#
E7h* I-*J It is note8orth% to mention at this point in time that Vi(encia Bontu%an is one
of the $au3hters of +re3orio Bontu%an# the father of herein plaintiff Naciansino
Bontu%an* In Ma% ,=<.# spouses Simeon No(al an$ Vi(encia Bontu%an sol$ the subDect
parcels of lan$ to Lour$es (s* @sicA Le%son# the mother of herein $efen$ant as e(i$ence$
b% a Dee$ of Sale marFe$ as E7h* I<*J It is Euite perple7in3 for the court to ima3ine that
+re3orio Bontu%an# father of herein plaintiff# 8ho 8as then resi$in3 8ith spouses
Simeon No(al an$ Vi(encia Bontu%an at ,/= C San )ose $ela Monta>a# Mabolo# Cebu
Cit%# as reflecte$ in his application for Gree Patent @E7hs* I.J P I4<JA $ate$ December -#
,=<. 8as una8are of the sale of the subDect parcels of lan$ ma$e b% his $au3hter
Vi(encia Bontu%an an$ spouse Simeon No(al to Lour$es Le%son* It is e(i$ent that# after
the sale from spouses No(al to Lour$es Le%son in Ma% ,=<.# +re3orio Bontu%an applie$
for Gree Patent for the same parcels of lan$ in December ,=<. claimin3 to ha(e culti(ate$
the lan$ since ,=,.# statin3 therein the location as Sirao an$ not $la8on 8hich is the
true an$ correct location* Sirao an$ $la8on are t8o $ifferent baran3a%s 8hich are not
e(en a$Dacent to each other* In fact# as borne out b% E7h* I4;#J it is separate$ b%
Baran3a% +uba* In ,=/-# Gree Patent No* ;,6-<5 an$ OCT] 6',<,= 8as issue$ to
+re3orio Bontu%an co(erin3 subDect propert%# the location of 8hich is in Baran3a% Sirao
in consonance to his application* +re3orio Bontu%anCs application for Gree Patent o(er
subDect parcels of lan$ ha$ raise$ in the min$ of this Court reasonable ba$3es of ba$ faith
on his part as the subDect parcels of lan$ 8ere alrea$% sol$ b% his $au3hter Vi(encia
Bontu%an an$ spouse Simeon No(al to Lour$es Le%son* nother ba$3e of ba$ faith is
raise$ in the min$ of this Court 8hen he @+re3orioA sol$ the subDect parcels of lan$ t8ice
to his son Naciansino Bontu%an in ,=/< an$ ,=.6# respecti(el%# 8herein both Dee$s of
Sale 8ere notari?e$ b% $ifferent Notar% Publics# @E7hs* I,6J P I,<JA*9-<:
Consi$erin3 that Lour$es Le%son 8as in actual possession of the propert%# the
respon$ents cannot# liFe8ise# claim that the% 8ere in 3oo$ faith 8hen +re3orio Bontu%an
alle3e$l% sol$ the propert% to them on pril 4.# ,=.6*
nent the thir$ an$ fourth assi3nments of error# 8e $o not a3ree 8ith the rulin3 of
the C that the petitioners faile$ to $irectl% attacF the (ali$it% of OCT No* 6',<,=* The
C faile$ to consi$er the fact that# in their respecti(e ans8ers to the complaint# the
petitioners inserte$ therein a counterclaim 8herein the% replea$e$ all the material
alle3ations in their affirmati(e $efenses# that +re3orio Bontu%an secure$ OCT No* 6'
,<,= throu3h frau$ an$ $eceit an$ pra%e$ for the nullification thereof*
&hile Section -/ of ct No* -=< pro(i$es that a certificate of title shall not be
subDect to collateral attacF# the rule is that an action is an attacF on a title if its obDect is to
nullif% the same# an$ thus challen3e the procee$in3 pursuant to 8hich the title 8as
$ecree$* The attacF is consi$ere$ $irect 8hen the obDect of an action is to annul or set
asi$e such procee$in3# or enDoin its enforcement* On the other han$# an attacF is in$irect
or collateral 8hen# in an action to obtain a $ifferent relief# an attacF on the procee$in3 is
ne(ertheless ma$e as an inci$ent thereof*9-/: Such action to attacF a certificate of title
ma% be an ori3inal action or a counterclaim in 8hich a certificate of title is assaile$ as
(oi$* counterclaim is consi$ere$ a ne8 suit in 8hich the $efen$ant is the plaintiff an$
the plaintiff in the complaint becomes the $efen$ant* It stan$s on the same footin3 an$ is
to be teste$ b% the same rules as if it 8ere an in$epen$ent action*9-.: Gurthermore# since
all the essential facts of the case for the $etermination of the titleCs (ali$it% are no8
before the Court# to reEuire the part% to institute cancellation procee$in3s 8oul$ be
pointlessl% circuitous an$ a3ainst the best interest of Dustice*9-=:
The C# liFe8ise# erre$ in hol$in3 that the action of the petitioners to assail OCT
No* 6',<,= an$ TCT No* ,5=4 an$ for the recon(e%ance of the propert% co(ere$ b% the
sai$ title ha$ alrea$% prescribe$ 8hen the% file$ their ans8er to the complaint*
Case la8 has it that an action for recon(e%ance prescribes in ten %ears# the point of
reference bein3 the $ate of re3istration of the $ee$ or the $ate of issuance of the
certificate of title o(er the propert%* In an action for recon(e%ance# the $ecree of
re3istration is hi3hl% re3ar$e$ as incontro(ertible* &hat is sou3ht instea$ is the transfer
of the propert% or its title# 8hich has been 8ron3full% or erroneousl% re3istere$ in another
personCs name# to its ri3htful or le3al o8ner# or to one 8ho has a better ri3ht*9;6:
Ho8e(er# in a series of cases# this Court $eclare$ that an action for recon(e%ance
base$ on frau$ is imprescriptible 8here the plaintiff is in possession of the propert%
subDect of the acts* In V$a* $e Cabrera (* Court of ppeals #9;,: the Court hel$0
*** 9:n action for recon(e%ance of a parcel of lan$ base$ on implie$ or constructi(e trust
prescribes in ten %ears# the point of reference bein3 the $ate of re3istration of the $ee$ or
the $ate of the issuance of the certificate of title o(er the propert%# but this rule applies
onl% 8hen the plaintiff or the person enforcin3 the trust is not in possession of the
propert%# since if a person claimin3 to be the o8ner thereof is in actual possession of the
propert%# as the $efen$ants are in the instant case# the ri3ht to seeF recon(e%ance# 8hich
in effect seeFs to Euiet title to the propert%# $oes not prescribe* The reason for this is that
one 8ho is in actual possession of a piece of lan$ claimin3 to be the o8ner thereof ma%
8ait until his possession is $isturbe$ or his title is attacFe$ before taFin3 steps to
(in$icate his ri3ht# the reason for the rule bein3# that his un$isturbe$ possession 3i(es
him a continuin3 ri3ht to seeF the ai$ of a court of eEuit% to ascertain an$ $etermine the
nature of the a$(erse claim of a thir$ part% an$ its effect on his o8n title# 8hich ri3ht can
be claime$ onl% b% one 8ho is in possession*
Similarl%# in the case of Da(i$ (* Mala% #9;4: the same pronouncement 8as
reiterate$ b% the Court0
*** There is settle$ Durispru$ence that one 8ho is in actual possession of a piece of lan$
claimin3 to be o8ner thereof ma% 8ait until his possession is $isturbe$ or his title is
attacFe$ before taFin3 steps to (in$icate his ri3ht# the reason for the rule bein3# that his
un$isturbe$ possession 3i(es him a continuin3 ri3ht to seeF the ai$ of the court of eEuit%
to ascertain an$ $etermine the nature of the a$(erse claim of a thir$ part% an$ its effect on
his o8n title# 8hich ri3ht can be claime$ onl% b% one 8ho is in possession* No better
situation can be concei(e$ at the moment for 2s to appl% this rule on eEuit% than that of
herein petitioners 8hose *** possession of the liti3ate$ propert% for no less than 56 %ears
an$ 8as su$$enl% confronte$ 8ith a claim that the lan$ she ha$ been occup%in3 an$
culti(atin3 all these %ears# 8as title$ in the name of a thir$ person* &e hol$ that in such a
situation the ri3ht to Euiet title to the propert%# to seeF its recon(e%ance an$ annul an%
certificate of title co(erin3 it# accrue$ onl% from the time the one in possession 8as ma$e
a8are of a claim a$(erse to his o8n# an$ it is onl% then that the statutor% perio$ of
prescription commences to run a3ainst such possessor*
The paramount reason for this e7ception is base$ on the theor% that re3istration
procee$in3s coul$ not be use$ as a shiel$ for frau$*9;5: Moreo(er# to hol$ other8ise
8oul$ be to put premium on lan$'3rabbin3 an$ trans3ressin3 the broa$er principle in
human relations that no person shall unDustl% enrich himself at the e7pense of another*
9;-:
In the present case# Lour$es Le%son an$# after her $eath# the petitioners# ha$ been in
actual possession of the propert%* The petitioners 8ere still in possession of the propert%
8hen the% file$ their ans8ers to the complaint 8hich containe$ their counterclaims for
the nullification of OCT No* 6',<,= an$ TCT No* ,5=4# an$ for the conseEuent
recon(e%ance of the propert% to them* The recon(e%ance is Dust an$ proper in or$er to
put a stop to the unen$urable anomal% that the patentees shoul$ ha(e a Torrens title for
the lan$ 8hich the% an$ their pre$ecessors ne(er possesse$ an$ 8hich has been possesse$
b% another in the concept of an o8ner*9;;:
On the fifth assi3nment of error# 8e rule for the petitioners* The a8ar$ of attorne%Cs
an$ appearance fees is better left to the soun$ $iscretion of the trial court# an$ if such
$iscretion is 8ell e7ercise$# as in this case# it 8ill not be $isturbe$ on appeal*9;<: &ith
the trial an$ the appellate courtsC fin$in3s that the respon$ents 8ere in ba$ faith# there is
sufficient basis to a8ar$ attorne%Cs an$ appearance fees to the petitioners* Ha$ it not
been for the filin3 of a baseless suit b% the respon$ents a3ainst the petitioners# the latter
8oul$ not ha(e sou3ht the ser(ices of counsel to $efen$ their interests an$ represent them
in this case*
IN LI+HT OG LL THE GORE+OIN+# the petition is +RNTED* The Decision
of the Court of ppeals $eclarin3 the respon$ents the o8ners of Lot No* ,/,;6 co(ere$
b% OCT No* 6',<,= an$ TCT No* ,5=4H an$ settin3 asi$e the a8ar$ of attorne%Cs fees in
fa(or of the petitioners b% the Re3ional Trial Court are REVERSED ND SET SIDE*
The Court hereb% GGIRMS the o8nership of the petitioners of Lot No* ,/,;6*
OCT No* 6',<,= an$ TCT No* ,5=4 co(erin3 the sai$ lot are hereb% nullifie$* The
Re3ister of Dee$s is ORDERED to cancel TCT No* ,5=4 an$ to issue another title o(er
the propert% in fa(or of the petitioners as co'o8ners thereof* The trial courtCs a8ar$ of
P;6#666*66 for attorne%Cs fees to the petitioners is GGIRMED* No pronouncement as to
costs*
SO ORDERED*
SECOND DIVISION
9+*R* No* ,;;46<* October 4.# 4665:
+OVERNMENT SERVICE INS2RNCE S1STEM# petitioner# (s* ED2RDO M*
SNTI+O# substitute$ b% his 8i$o8 ROSRIO ENRIM2E" VD* DE
SNTI+O# respon$ent*
D E C I S I O N
CLLE)O# SR*# )*0
Before the Court is the petition for re(ie8 on certiorari file$ b% the +o(ernment
Ser(ice Insurance S%stem @+SISA# seeFin3 to re(erse an$ set asi$e the Decision9,: $ate$
Gebruar% 44# 4664 of the Court of ppeals @CA in C'+*R* CV No* <456= an$ its
Resolution $ate$ September ;# 4664 $en%in3 its motion for reconsi$eration*
The antece$ent facts of the case# as culle$ from the assaile$ C $ecision an$ that of
the trial court# are as follo8s0
Decease$ spouses )ose C* "ulueta an$ Sole$a$ Ramos obtaine$ (arious loans from
$efen$ant +SIS for @theA perio$ September# ,=;< to October# ,=;/ in the total amount of
P5#,,/#666*66 secure$ b% real estate mort3a3es o(er parcels of lan$ co(ere$ b% TCT
Nos* 4<,6;# 5/,// an$ ;65<;* The "uluetas faile$ to pa% their loans to $efen$ant +SIS
an$ the latter foreclose$ the real estate mort3a3es $ate$ September 4;# ,=;<# March <#
,=;/# pril -# ,=;/ an$ October ,;# ,=;/*
On u3ust ,-# ,=/-# the mort3a3e$ properties 8ere sol$ at public auction b% $efen$ant
+SIS submittin3 a bi$ price of P;#44=#=4/*.-* Not all lots co(ere$ b% the mort3a3e$
titles# ho8e(er# 8ere sol$* Ninet%'one @=,A lots 8ere e7pressl% e7clu$e$ from the auction
since the lots 8ere sufficient to pa% for all the mort3a3e $ebts* Certificate of Sale
@nne7 IG#J Recor$s# Vol* I# pp* 45'4.A 8as issue$ b% then Pro(incial Sheriff Nicanor D*
Sala%sa%*
The Certificate of Sale $ate$ u3ust ,-# ,=/- ha$ been annotate$ an$ inscribe$ in TCT
Nos* 4<,6;# 5/,// an$ ;65;<# 8ith the follo8in3 notations0 I@TAhe follo8in3 lots 8hich
form part of this title @TCT No* 4<,6;A are not co(ere$ b% the mort3a3e contract $ue to
sale to thir$ parties an$ $onation to the 3o(ernment0 ;6'H';'C'=')'<;'H'.# ;6'H';'C'=)'
M'/H ;6'H';'C'=')'<;'H';H , lots Nos* , to ,5# BlocF No* , \'<#,5. sE*m* 4* Lots Nos*
, to ,,# BlocF No* 4 \-#<<6 sE*m* 5* Lot No* ,;# BlocF No* 5 \-./ sE*m* -* Lot No* ,/#
BlocF No* - \4<5 sE*m* ;* Lot No* ,# BlocF No* / \ -64 sE*m* <* Roa$ Lots Nos* ,# 4# 5#
P - \ 4#/-/ sE*m*J
In another INOTE0 The follo8in3 lots in the ntonio Sub$i(ision 8ere alrea$% release$
b% the +SIS an$ therefore are not inclu$e$ in this sale# namel%0 LOT NO* ,# <# /# .# =# ,6#
an$ ,5 @Ol$ PlanA BlocF IH ,# 5# -# ;# /# . an$ ,6 @Ol$ PlanA BlocF IIH 5# ,6# ,4 an$ ,5
@Ne8 PlanA BlocF I @Ol$ PlanA BlocF IIIH /# ,- an$ 46 @Ne8 PlanA BlocF III @Ol$ PlanA
BlocF VH ,5 an$ 46 @Ne8 PlanA BlocF IV @Ol$ PlanA BlocF VIH ,# 4# 5 an$ ,6 @Ne8 PlanA
BlocF V @Ol$ PlanA BlocF VIIH ,# ;# .# ,;# 4< an$ 4/ @Ne8 PlanA BlocF VI @Ol$ PlanA
BlocF VIIIH /# ,4 an$ 46 @Ne8 PlanA BlocF VII @Ol$ PlanA BlocF IIH ,# - an$ < @Ne8
PlanA BlocF VIII @Ol$ PlanA BlocF SH ; @Ne8 PlanA BlocF S @Ol$ PlanA BlocF "SIIH <
@Ne8 PlanA BlocF SI @Ol$ PlanA BlocF SIIH ,# BlocF =H ,4 BlocF ,H ,, BlocF 4H ,= BlocF
,H ,6 BlocF <H 45 BlocF 5*J
n$ the lots on IDDITIONL ESCL2SION GROM P2BLIC SLEJ are ILOTS NO*
< BlocF -H 4 BlocF 4H ; BlocF ;H ,# 4 an$ 5 BlocF ,,# ,# 4# 5 an$ - BlocF ,6H ; BlocF ,,
@Ne8AH , BlocF 5H ; BlocF ,H ,; BlocF /H ,, BlocF =H ,5 BlocF ;H ,4 BlocF ;H 5 BlocF
,6H <*J
On No(ember 4;# ,=/;# an ffi$a(it of Consoli$ation of O8nership @nne7 I+#J
Recor$s# Vol* I# pp* 4='5,A 8as e7ecute$ b% $efen$ant +SIS o(er "uluetaCs lots#
inclu$in3 the lots# 8hich as earlier state$# 8ere alrea$% e7clu$e$ from the foreclosure*
On March <# ,=.6# $efen$ant +SIS sol$ the foreclose$ properties to 1orFsto8n
De(elopment Corporation 8hich sale 8as $isappro(e$ b% the Office of the Presi$ent of
the Philippines* The sol$ properties 8ere returne$ to $efen$ant +SIS*
The Re3ister of Dee$s of Ri?al cancelle$ the lan$ titles issue$ to 1orFsto8n
De(elopment Corporation* On )ul% 4# ,=.6# TCT No* 45;;4 8as issue$ cancellin3 TCT
No* 4,=4<H TCT No* 45;;5 cancelle$ TCT No* 4,=4;H an$ TCT No* 45;;- cancellin3
TCT No* 4,=4-# all in the name of $efen$ant +SIS*
fter $efen$ant +SIS ha$ re'acEuire$ the properties sol$ to 1orFsto8n De(elopment
Corporation# it be3an $isposin3 the foreclose$ lots inclu$in3 the e7clu$e$ ones*
On pril /# ,==6# representati(e E$uar$o Santia3o an$ then plaintiff ntonio Vic "ulueta
e7ecute$ an a3reement 8hereb% "ulueta transferre$ all his ri3hts an$ interests o(er the
e7clu$e$ lots* Plaintiff E$uar$o Santia3oCs la8%er# tt%* &enceslao B* Trini$a$# 8rote a
$eman$ letter $ate$ Ma% ,,# ,=.= @nne7 IH#J Recor$s# Vol* I# pp* 54'55A to $efen$ant
+SIS asFin3 for the return of the ei3ht%'one @.,A e7clu$e$ lots*94:
On Ma% /# ,==6# ntonio Vic "ulueta# represente$ b% E$uar$o M* Santia3o# file$
8ith the Re3ional Trial Court @RTCA of Pasi3 Cit%# Branch /,# a complaint for
recon(e%ance of real estate a3ainst the +SIS* Spouses lfeo an$ Nenita Escasa# Manuel
III an$ S%l(ia +* 2rbano# an$ Marciana P* +on?ales an$ the heirs of Mamerto +on?ales
mo(e$ to be inclu$e$ as inter(enors an$ file$ their respecti(e ans8ers in inter(ention*
SubseEuentl%# the petitioner# as $efen$ant therein# file$ its ans8er alle3in3 inter alia that
the action 8as barre$ b% the statute of limitations an$Kor laches an$ that the complaint
state$ no cause of action* SubseEuentl%# "ulueta 8as substitute$ b% Santia3o as the
plaintiff in the complaint a Euo* 2pon the $eath ofSantia3o on March <# ,==<# he 8as
substitute$ b% his 8i$o8# Rosario EnriEue? V$a* $e Santia3o# as the plaintiff*
fter $ue trial# the RTC ren$ere$ Du$3ment a3ainst the petitioner or$erin3 it to
recon(e% to the respon$ent# Rosario EnriEue? V$a* $e Santia3o# in substitution of her
$ecease$ husban$ E$uar$o# the se(ent%'ei3ht lots e7clu$e$ from the foreclosure sale*
The $ispositi(e portion of the RTC $ecision rea$s0
&HEREGORE# Du$3ment is hereb% ren$ere$ in fa(or of plaintiff an$ a3ainst the
$efen$ant0
,* Or$erin3 $efen$ant to recon(e% to plaintiff the se(ent%'ei3ht @/.A lots release$ an$
e7clu$e$ from the foreclosure sale inclu$in3 the a$$itional e7clusion from the public
sale# namel%0
a* Lot Nos* ,# <# /# .# 6# ,6# ,5# BlocF I @Ol$ PlanA*
b* Lot Nos* ,# 5# -# ;# /# . an$ ,6# BlocF II @Ol$ PlanA*
c* Lot Nos* 5# ,6# ,4# an$ ,5# BlocF I @Ne8 PlanA# BlocF III
@Ol$ PlanA#
$* Lot Nos* /# ,- an$ 46# BlocF III @Ne8 PlanA# BlocF V
@Ol$ PlanA*
e* Lot Nos* ,5 an$ 46# BlocF IV @Ne8 PlanA# BlocF VI @Ol$
PlanA*
f* Lot Nos* ,# 4# 5 an$ ,6# BlocF V @Ne8 PlanA# BlocF VII
@Ol$ PlanA*
3* Lot Nos* ,# ;# .# ,;# 4< an$ 4/# BlocF VI @Ne8 PlanA#
BlocF VIII @Ol$ PlanA*
h* Lot Nos* / an$ ,4# BlocF VII @Ne8 PlanA# BlocF II @Ol$
PlanA*
i* Lot Nos* ,# - an$ <# BlocF VIII @Ne8 PlanA# BlocF S
@Ol$ PlanA*
D* Lot ;# BlocF S @Ne8 PlanA# BlocF SII @Ol$ PlanA*
F* Lot <# BlocF SI @Ne8 PlanA# BlocF SII @Ol$ PlanA*
l* Lots 4# ;# ,4 an$ ,;# BlocF I*
m* Lots <# = an$ ,,# BlocF 4*
n* Lots ,# ;# <# /# ,< an$ 45# BlocF 5*
o* Lot <# BlocF -*
p* Lots ;# ,4# ,5 an$ 4-# BlocF ;*
E* Lots ,6 an$ ,<# BlocF <*
r* Lots < an$ ,;# BlocF /*
s* Lots ,5# 4-# 4. an$ 4=# BlocF .*
t* Lots ,# ,,# ,/ an$ 44# BlocF =*
u* Lots ,# 4# 5 an$ -# BlocF ,6*
(* Lots ,# 4# 5 an$ ; @Ne8A# BlocF ,,*
4* Or$erin3 $efen$ant to pa% plaintiff# if the se(ent%'ei3ht @/.A e7clu$e$ lots coul$
not be recon(e%e$# the fair marFet (alue of each of sai$ lots*
5* Or$erin3 the Re3istr% of Dee$s of Pasi3 Cit% to cancel the lan$ titles co(erin3 the
e7clu$e$ lots in the name of $efen$ant or an% of its successors'in'interest inclu$in3 all
$eri(ati(e titles therefrom an$ to issue ne8 lan$ titles in plaintiffCs name*
-* Or$erin3 the Re3istr% of Dee$s of Pasi3 Cit% to cancel the Notices of Lis Pen$ens
inscribe$ in TCT No* PT'.65-4 un$er Entr% No* PT',44</KT'45;;-H TCT No* .,.,4
un$er Entr% No* PT',44</KT'45;;-H an$ TCT No* PT'.-=,5 un$er Entr% No* PT'
,44</KT'45;;-*
;* Costs of suit*95:
The petitioner ele(ate$ the case to the C 8hich ren$ere$ the assaile$ $ecision
affirmin3 that of the RTC* The $ispositi(e portion of the assaile$ $ecision rea$s0
&HEREGORE# premises consi$ere$# the herein appeal is DISMISSED for lacF of merit*
The Decision of December ,/# ,==/ of Branch /, of the Re3ional Trial Court of Pasi3
Cit% is hereb% GGIRMED*9-:
The petitioner mo(e$ for a reconsi$eration of the aforesai$ $ecision but the same
8as $enie$ in the assaile$ C Resolution of September ;# 4664*
The petitioner no8 comes to this Court alle3in3 that0
THE CO2RT OG PPELS COMMITTED REVERSIBLE ERROR IN R2LIN+
THT A PETITIONER &S +2ILT1 OG BD GITH &HEN IN TR2TH ND IN
GCT# THERE &S NO S2GGICIENT +RO2ND TO S2PPORT S2CH
CONCL2SIONH ND BA THERE &S NO PRESCRIPTION IN THIS CSE*9;:
In its petition# the petitioner maintains that it $i$ not act in ba$ faith 8hen it
erroneousl% inclu$e$ in its certificate of sale# an$ subseEuentl% consoli$ate$ the titles in
its name o(er the se(ent%'ei3ht lots @IsubDect lotsJA that 8ere e7clu$e$ from the
foreclosure sale* There 8as no proof of ba$ faith nor coul$ frau$ or malice be attribute$
to the petitioner 8hen it erroneousl% cause$ the issuance of certificates of title o(er the
subDect lots $espite the fact that these 8ere e7pressl% e7clu$e$ from the foreclosure sale*
The petitioner asserts that the action for recon(e%ance institute$ b% the respon$ent
ha$ alrea$% prescribe$ after the lapse of ten %ears from No(ember 4;# ,=/; 8hen the
petitioner consoli$ate$ its o8nership o(er the subDect lots* ccor$in3 to the petitioner# an
action for recon(e%ance base$ on implie$ or constructi(e trust prescribes in ten %ears
from the time of its creation or upon the alle3e$ frau$ulent re3istration of the propert%* In
this case# 8hen the action 8as institute$ on Ma% /# ,==6# more than fourteen %ears ha$
alrea$% lapse$* Thus# the petitioner conten$s that the same 8as alrea$% barre$ b%
prescription as 8ell as laches*
The petitioner liFe8ise taFes e7ception to the hol$in3 of the trial court an$ the C
that it @the petitionerA faile$ to apprise or return to the "uluetas# the respon$entCs
pre$ecessors'in'interest# the se(ent%'ei3ht lots e7clu$e$ from the foreclosure sale
because the petitioner ha$ no such obli3ation un$er the pertinent loan an$ mort3a3e
a3reement*
The petitionerCs ar3uments fail to persua$e*
t the outset# it bears emphasis that the Duris$iction of this Court in a petition for
re(ie8 on certiorari un$er Rule -; of the Rules of Court# as amen$e$# is limite$ to
re(ie8in3 onl% errors of la8* This Court is not a trier of facts* Case la8 has it that the
fin$in3s of the trial court especiall% 8hen affirme$ b% the C are bin$in3 an$ conclusi(e
upon this Court* lthou3h there are e7ceptions to the sai$ rule# 8e fin$ no reason to
$e(iate therefrom*9<: B% assailin3 the fin$in3s of facts of the trial court as affirme$ b%
the C# that it acte$ in ba$ faith# the petitioner thereb% raise$ Euestions of facts in its
petition*
Nonetheless# e(en if 8e in$ul3e$ the petition an$ $el(e$ into the factual issues# 8e
fin$ the petition barren of merit*
That the petitioner acte$ in ba$ faith in consoli$atin3 o8nership an$ causin3 the
issuance of titles in its name o(er the subDect lots# not8ithstan$in3 that these 8ere
e7pressl% e7clu$e$ from the foreclosure sale 8as the uniform rulin3 of the trial court an$
appellate court* s $eclare$ b% the C0
The acts of $efen$ant'appellant +SIS in concealin3 from the "uluetas 9the respon$entCs
pre$ecessors'in'interest: the e7istence of these lots# in failin3 to notif% or apprise the
spouses "ulueta about the e7clu$e$ lots from the time it consoli$ate$ its titles on their
foreclose$ properties in ,=/;# in failin3 to inform them 8hen it entere$ into a contract of
sale of the foreclose$ properties to 1orFsto8n De(elopment Corporation in ,=.6 as 8ell
as 8hen the sai$ sale 8as re(oFe$ b% then Presi$ent Ger$inan$ E* Marcos $urin3 the
same %ear $emonstrate$ a clear effort on its part to $efrau$ the spouses "ulueta an$
appropriate for itself the subDect properties* E(en if titles o(er the lots ha$ been issue$ in
the name of the $efen$ant'appellant# still it coul$ not le3all% claim o8nership an$
absolute $ominion o(er them because in$efeasibilit% of title un$er the Torrens s%stem
$oes not attach to titles secure$ b% frau$ or misrepresentation* The frau$ committe$ b%
$efen$ant'appellant in the form of concealment of the e7istence of sai$ lots an$ failure to
return the same to the real o8ners after their e7clusion from the foreclosure sale ma$e
$efen$ant'appellant hol$ers in ba$ faith* It is 8ell'settle$ that a hol$er in ba$ faith of a
certificate of title is not entitle$ to the protection of the la8 for the la8 cannot be use$ as
a shiel$ for frau$*9/:
The Court a3rees 8ith the fin$in3s an$ conclusion of the trial court an$ the C* The
petitioner is not an or$inar% mort3a3ee* It is a 3o(ernment financial institution an$# liFe
banFs# is e7pecte$ to e7ercise 3reater care an$ pru$ence in its $ealin3s# inclu$in3 those
in(ol(in3 re3istere$ lan$s*9.: The CourtCs rulin3 in Rural BanF of Compostela (* C9=:
is apropos0
BanFs# in$ee$# shoul$ e7ercise more care an$ pru$ence in $ealin3 e(en 8ith re3istere$
lan$s# than pri(ate in$i(i$uals# for their business is one affecte$ 8ith public interest#
Feepin3 in trust mone% belon3in3 to their $epositors# 8hich the% shoul$ 3uar$ a3ainst
loss b% not committin3 an% act of ne3li3ence 8hich amounts to lacF of 3oo$ faith b%
8hich the% 8oul$ be $enie$ the protecti(e mantle of lan$ re3istration statute# ct 9No*:
-=<# e7ten$e$ onl% to purchasers for (alue an$ in 3oo$ faith# as 8ell as to mort3a3ees of
the same character an$ $escription*9,6:
Due $ili3ence reEuire$ of banFs e7ten$ e(en to persons# or institutions liFe the
petitioner# re3ularl% en3a3e$ in the business of len$in3 mone% secure$ b% real estate
mort3a3es*9,,:
In this case# the petitioner e7ecute$ an affi$a(it in consoli$atin3 its o8nership an$
causin3 the issuance of titles in its name o(er the subDect lots $espite the fact that these
8ere e7pressl% e7clu$e$ from the foreclosure sale* B% so $oin3# the petitioner acte$ in
3ross an$ e(i$ent ba$ faith* It cannot fei3n i3norance of the fact that the subDect lots
8ere e7clu$e$ from the sale at public auction* t the least# its act constitute$ 3ross
ne3li3ence amountin3 to ba$ faith* Gurther# as foun$ b% the C# the petitionerCs acts of
concealin3 the e7istence of these lots# its failure to return them to the "uluetas an$ e(en
its attempt to sell them to a thir$ part% is proof of the petitionerCs intent to $efrau$ the
"uluetas an$ appropriate for itself the subDect lots*
On the issue of prescription# 3enerall%# an action for recon(e%ance of real propert%
base$ on frau$ prescribes in four %ears from the $isco(er% of frau$H such $isco(er% is
$eeme$ to ha(e taFen place upon the issuance of the certificate of title o(er the propert%*
Re3istration of real propert% is a constructi(e notice to all persons an$# thus# the four'%ear
perio$ shall be counte$ therefrom*9,4: On the other han$# rticle ,-;< of the Ci(il Co$e
pro(i$es0
rt* ,-;<* If propert% is acEuire$ throu3h mistaFe or frau$# the person obtainin3 it is# b%
force of la8# consi$ere$ a trustee of an implie$ trust for the benefit of the person from
8hom the propert% comes*
n action for recon(e%ance base$ on implie$ or constructi(e trust prescribes in ten
%ears from the alle3e$ frau$ulent re3istration or $ate of issuance of the certificate of title
o(er the propert%*9,5:
The petitionerCs $efense of prescription is untenable* s hel$ b% the C# the 3eneral
rule that the $isco(er% of frau$ is $eeme$ to ha(e taFen place upon the re3istration of real
propert% because it is Iconsi$ere$ a constructi(e notice to all personsJ $oes not appl% in
this case* The C correctl% cite$ the cases of $ille (* Court of ppeals9,-: an$
Samonte (* Court of ppeals #9,;: 8here this Court recFone$ the prescripti(e perio$
for the filin3 of the action for recon(e%ance base$ on implie$ trust from the actual
$isco(er% of frau$*
In rulin3 that the action ha$ not %et prescribe$ $espite the fact that more than ten
%ears ha$ lapse$ bet8een the $ate of re3istration an$ the institution of the action for
recon(e%ance# the Court in $ille ratiocinate$0
It is true that re3istration un$er the Torrens s%stem is constructi(e notice of title# but it has
liFe8ise been our hol$in3 that the Torrens title $oes not furnish a shiel$ for frau$* It is
therefore no ar3ument to sa% that the act of re3istration is eEui(alent to notice of
repu$iation# assumin3 there 8as one# not8ithstan$in3 the lon3'stan$in3 rule that
re3istration operates as a uni(ersal notice of title*
Gor the same reason# 8e cannot $ismiss pri(ate respon$entsC claims commence$ in ,=/-
o(er the estate re3istere$ in ,=;;* &hile actions to enforce a constructi(e trust prescribes
in ten %ears# recFone$ from the $ate of the re3istration of the propert%# 8e# as 8e sai$# are
not prepare$ to count the perio$ from such a $ate in this case* &e note the petitionerCs
sub rosa efforts to 3et hol$ of the propert% e7clusi(el% for himself be3innin3 8ith his
frau$ulent misrepresentation in his unilateral affi$a(it of e7traDu$icial settlement that he
is Ithe onl% heir an$ chil$ of his mother Geli?a 8ith the conseEuence that he 8as able to
secure title in his name 9alone:*J ccor$in3l%# 8e hol$ that the ri3ht of the pri(ate
respon$ents commence$ from the time the% actuall% $isco(ere$ the petitionerCs act of
$efrau$ation* ccor$in3 to the respon$ent Court of ppeals# the% Icame to Fno8 9of it:
apparentl% onl% $urin3 the pro3ress of the liti3ation*J Hence# prescription is not a bar*
9,<:
The abo(e rulin3 8as reiterate$ in the more recent case of Samonte* In this case# as
establishe$ b% the C# the respon$ent actuall% $isco(ere$ the frau$ulent act of the
petitioner onl% in ,=.=0
*** 9T:he prescripti(e perio$ of the action is to be recFone$ from the time plaintiff'
appellee @then E$uar$o M* Santia3oA ha$ actuall% $isco(ere$ the frau$ulent act of
$efen$ant'appellant 8hich 8as# as borne out b% the recor$s# onl% in ,=.=* Plaintiff'
appellee E$uar$o M* Santia3o cate3oricall% testifie$ @TSN of )ul% ,,# ,==;# pp* ,-',;A
that he came to Fno8 that there 8ere =, e7clu$e$ lots in ntonio Villa3e 8hich 8ere
foreclose$ b% the +SIS an$ inclu$e$ in its consoli$ation of o8nership in ,=/; 8hen# in
,=.=# he an$ ntonio Vic "ulueta $iscusse$ it an$ he 8as 3i(en b% "ulueta a special
po8er of attorne% to represent him to reco(er the subDect properties from +SIS* The
complaint for recon(e%ance 8as file$ barel% a %ear from the $isco(er% of the frau$*9,/:
Gollo8in3 the CourtCs pronouncements in $ille an$ Samonte# the institution of the
action for recon(e%ance in the court a Euo in ,==6 8as thus 8ell 8ithin the prescripti(e
perio$* Ha(in3 acte$ in ba$ faith in securin3 titles o(er the subDect lots# the petitioner is a
hol$er in ba$ faith of certificates of title o(er the subDect lots* The petitioner is not
entitle$ to the protection of the la8 for the la8 cannot be use$ as a shiel$ for frau$s*9,.:
Contrar% to its claim# the petitioner unar3uabl% ha$ the le3al $ut% to return the
subDect lots to the "uluetas* The petitionerCs attempts to Dustif% its omission b% insistin3
that it ha$ no such $ut% un$er the mort3a3e contract is ob(iousl% clutchin3 at stra8*
rticle 44 of the Ci(il Co$e e7plicitl% pro(i$es that Ie(er% person 8ho# throu3h an act of
performance b% another# or an% other means# acEuires or comes into possession of
somethin3 at the e7pense of the latter 8ithout Dust or le3al 3roun$# shall return the same
to him*J
&HEREGORE# the petition is DENIED for lacF of merit* The assaile$ Decision
$ate$ Gebruar% 44# 4664 an$ Resolution $ate$ September ;# 4664 of the Court of ppeals
in C'+*R* CV No* <456= are GGIRMED IN TOTO* Costs a3ainst the petitioner*
SO ORDERED*
Bellosillo# @ChairmanA# Muisumbin3# ustria'Martine?# an$ Tin3a# ))*# concur*
+*R* No* ,-/5-6 December ,5# 466/
C1NTHI CR2" OHEMNI an$ SHNOER N* OHEMNI# petitioners#
(s*
THE HEIRS OG NSTCIO TRINIDD# represente$ b% NPOLEON an$
ROLNDO TRINIDD# respon$ents*
D E C I S I O N
1NRES'SNTI+O# )*0
This petition for re(ie8 on certiorari, assails the )ul% 5,# 4666 Decision4 of the Court of
ppeals in C'+*R* SP No* ;;;.,# 8hich affirme$ the Ma% 4-# ,=== Or$er5 of the
Re3ional Trial Court# Branch 4-# Oorona$al# South Cotabato in Ci(il Case No* ,,44#
entitle$ LHeirs of nastacio an$ Grancisca Trini$a$# et al* (* Heirs of )ose Pe>a# et al*L
lso assaile$ is the )anuar% .# 466, Resolution- $en%in3 the motion for reconsi$eration*
The factual antece$ents are as follo8s0
Petitioner C%nthia Cru? Ohemani is the re3istere$ o8ner of Lot No* ,6/# Ts',654 @Lot
No* ,6/A# 8hich is co(ere$ b% Transfer Certificate of Title @TCTA No* ;.=/< issue$ on
March ,6# ,==-*; Ohemani purchase$ the lot from the heirs of )ose B* Pe>a @the Pe>a
HeirsA on Gebruar% ,/# ,==-* ShanFer N* Ohemani is her brother'in'la8 an$ $ul%
authori?e$ representati(e*
SubDect of the instant case is a 5-6 sEuare meter portion @the Dispute$ Propert%A of Lot
No* ,6/ o(er 8hich respon$ents Heirs of nastacio Trini$a$# represente$ b% Napoleon
an$ Rolan$o Trini$a$# are claimin3 o8nership* Respon$ents alle3e that the% an$ their
pre$ecessors'in'interest# Spouses nastacio an$ Grancisca Trini$a$# ha(e openl%#
peacefull%# publicl% an$ a$(ersel% possesse$ the Dispute$ Propert% in the concept of
o8ner since ,=;6*
Lot No* ,6/ an$ Lot Nos* ,6. an$ ,6=# constitute Lot No* 5;; 8hich 8as part of the
public $omain* On )ul% ,6# ,=;6# Lot No* 5;; 8ith an ori3inal area of ,#;66 sEuare
meters 8as a8ar$e$ to )esus M* Larrabaster b% the National Lan$ Settlement
$ministration @NLSA 8ho subseEuentl% sol$ his ri3hts an$ interests o(er the sai$
propert% to )ose B* Pe>a @Pe>aA on )une 4=# ,=;<*
Thereafter# the ori3inal area of Lot No* 5;; 8hich 8as ,#;66 sEuare meters increase$ to
5#<,<*=5 sEuare meters $ue to accretion* Pe>a then reEueste$ the Bureau of Lan$s @BOLA
to a$Dust the area of the lot a8ar$e$ to him but the BOL $enie$ the reEuest on the 3roun$
that the accretion belon3e$ to the 3o(ernment*
33rie(e$# Pe>a appeale$ to the Office of the Presi$ent* The BOL recommen$e$ that Lot
No* 5;; be sub$i(i$e$ into three parts# to 8it# Lot Nos* ,6/# ,6. an$ ,6=# an$ that Lot
No* ,6. 8ith an area of ,#;66 sEuare meters# be a8ar$e$ to Pe>a# instea$ of the 8hole of
Lot No* 5;;* Mean8hile# Lot Nos* ,6/ an$ ,6= 8oul$ be allocate$ to Basilio Men$o?a
@Men$o?aA an$ rturo Ro7as# respecti(el%*
The Office of the Presi$ent initiall% a$opte$ the recommen$ation of the BOL* 2pon
reconsi$eration# ho8e(er# it mo$ifie$ its $ecision an$ hel$ that the entire area of Lot No*
5;;# inclu$in3 the accretion# belon3e$ to Pe>a an$ not to the 3o(ernment* Thus# Lot Nos*
,6/# ,6.# an$ ,6= 8ere a8ar$e$ to him*
On )anuar% 4/# ,=/6# Men$o?a file$ a special ci(il action for certiorari a3ainst the
ssistant E7ecuti(e Secretar% for Le3al ffairs of the Office of the Presi$ent# the BOL#
the Director of Lan$s# an$ Pe>a before Branch 4- of the Court of Girst Instance of South
Cotabato# 8hich 8as $ocFete$ as Ci(il Case No* =.* Claimin3 that he 8as $enie$ $ue
process# Men$o?a assaile$ the $ecision of the Office of the Presi$ent a8ar$in3 the entire
area of Lot No* 5;; to Pe>a* He asserte$ o8nership o(er Lot No* ,6/ on the stren3th of a
Miscellaneous Sales pplication he alle3e$l% file$ 8ith the BOL on No(ember <# ,=<4*
On Ma% ,6# ,=.;# the trial court ren$ere$ a $ecision $ismissin3 Men$o?aCs petition for
certiorari but the same 8as re(erse$ b% the Court of ppeals on appeal* Hence# Men$o?a
file$ a petition for re(ie8 on certiorari before the Supreme Court*
In the case of ssistant E7ecuti(e Secretar% for Le3al ffairs of the Office of the
Presi$ent (* Court of ppeals<8hich 8as $eci$e$ on )anuar% =# ,=.=# the Supreme Court
reDecte$ Men$o?aCs claim o(er Lot No* ,6/ an$ foun$ the Miscellaneous Sales
pplication 8ithout le3al force an$ effect since the obDect thereof 8as no lon3er public
lan$* Thus# Pe>aCs ri3ht of o8nership o(er the entire area of Lot No* 5;;# 8hich consists
of Lot Nos* ,6/# ,6. an$ ,6=# 8as affirme$*
On September 46# ,==5# the Pe>a Heirs 8ere a8ar$e$ a patent b% the Department of
En(ironment an$ Natural Resources @DENRA# an$ on September 4,# ,==5# Ori3inal
Certificate of Title No* P'55<;./ co(erin3 Lot No* ,6/ 8as issue$ in their name*
On )anuar% 4/# ,==-# respon$ents file$ 8ith the Re3ional Trial Court# Branch 4-#
Oorona$al# South Cotabato a (erifie$ complaint. a3ainst the Pe>a Heirs#= the DENR
Re3ion IS Office# an$ the BOL for LRe(ie8 of Decree of Re3istration an$Kor
Recon(e%ance 8ith Pra%er for Issuance of &rit of Preliminar% Prohibitor% InDunction an$
Temporar% Restrainin3 Or$er#L 8hich 8as $ocFete$ as Ci(il Case No* ,,44* Respon$ents
file$ the complaint on the stren3th of their o8n an$ their pre$ecessorsC open# peaceful#
public an$ a$(erse possession of the Dispute$ Propert% in the concept of o8ner since
,=;6*
Respon$ents also claime$ that on )ul% ,<# ,=/<# their pre$ecessor'in'interest# nastacio#
applie$ for a Miscellaneous Sales pplication o(er the Dispute$ Propert% 8hich 8as
$esi3nate$ as a portion of Lot No* ,6/# Ts',654*,6 On March 4# ,=/=# the BOL alle3e$l%
issue$ Certification No* 5--; certif%in3 that the Dispute$ Propert% 8as a8ar$e$ to
nastacio an$ that the transfer ha$ been $ul% in(esti3ate$ an$ appro(e$ per Boar$
Resolution No* ,55# Series of ,=/=*
Instea$ of an ans8er# the Pe>a Heirs file$ a Motion to Dismiss,, alle3in3 that the
Re3ional Trial Court lacFs Duris$iction o(er the nature of the action or the suitH that
respon$ents ha(e no le3al capacit% to sue as onl% the 3o(ernment ma% seeF nullification
of the lan$ 3rant in their fa(orH an$ that the cause of action is barre$ b% prior Du$3ment or
the statute of limitations* The% asserte$ that the issue of o8nership o(er the Dispute$
Propert% has lon3 been settle$ in the ssistant E7ecuti(e Secretar% case* Gurther# the%
ar3ue$ that respon$entsC pre$ecessor'in'interest# nastacio# 8as a mere sEuatter 8ho ha$
been allo8e$ b% Men$o?a to occup% a portion of Lot No* ,6/ sometime in ,=<6*
In respon$entsC CommentKOpposition#,4 the% claime$ that the Dispute$ Propert% ha$
lon3 cease$ to be public lan$ b% (irtue of their open# public# continuous# a$(erse an$
e7clusi(e possession in the concept of o8ner for more than -6 %ears# an$ that the% 8ere
ne(er parties in the ssistant E7ecuti(e Secretar% case in(ol(in3 Men$o?a*
On September 5# ,==/# )u$3e Ro$olfo C* Sole$a$ @)u$3e Sole$a$A 3rante$ petitionerCs
motion to $ismiss an$ hel$ that respon$ents are boun$ b% the rulin3 of this Court in the
ssistant E7ecuti(e Secretar% case*,5
Respon$ents file$ a motion for reconsi$eration,- alle3in3 that res Du$icata $oes not appl%
an$ that their action is not barre$ b% the ssistant E7ecuti(e Secretar% case* The% ar3ue$
that neither the%# nor nastacio# 8ere parties in the sai$ case an$ that there is no i$entit%
of causes of action*
In ,==.# )u$3e Sole$a$ $ie$ 8ithout resol(in3 the motion for reconsi$eration file$ b%
respon$ents* )u$3e Grancisco S* mpi3 @)u$3e mpi3A 8as $esi3nate$ ctin3 )u$3e* On
Ma% 4-# ,===# )u$3e mpi3 3rante$ the motion for reconsi$eration# reinstate$ Ci(il Case
No* ,,44# an$ $irecte$ the Pe>a Heirs to file an ans8er*
The Pe>a Heirs# to3ether 8ith herein petitioner as the ne8 o8ner of Lot No* ,6/# file$ a
petition for certiorari,;before the Court of ppeals 8hich 8as $ocFete$ as C'+*R* SP
No* ;;;.,*
On )ul% 5,# 4666# the Court of ppeals ren$ere$ the assaile$ $ecision $ismissin3 the
petition* It rule$ that a petition for certiorari is not the proper reme$% a3ainst an or$er
$en%in3 a motion to $ismiss* Gurther# it hel$ that there is nores Du$icata* Thus0
Moreo(er# petitioners ha(e plain# spee$% an$ a$eEuate reme$% in the or$inar% course
of la8* The reme$% a3ainst an a$(erse interlocutor% or$er# such as the assaile$
or$ers# is not certiorari but to continue 8ith the case in $ue course an$# 8hen an
unfa(orable (er$ict is han$e$ $o8n# to taFe an appeal in the manner authori?e$ b%
la8* 7 7 7
&ith the $enial of the motion to $ismiss an$ reinstatement of the case# petitioners
8ill still ans8er the complaint* 2pon Doin$er of issues# the parties 8ill enter into trial#
after 8hich# the lo8er court 8ill ren$er a (er$ict* n$ if a$(erse to them# petitioners
ma% appeal the $ecision to3ether 8ith the assaile$ or$ers* The case at bench $oes not
fall un$er an% of the e7ceptional circumstances 8here the e7traor$inar% 8rit of
certiorari ma% be resorte$ to $espite a(ailabilit% of appeal*
7 7 7 7
Pri(ate respon$ents are not parties in the first action* Neither are the% the successors'
in'interest of an% of the parties therein* The first action is in personam* The final
Du$3ment in sai$ action is onl% bin$in3 an$ conclusi(e upon the parties therein an$
their successors'in'interest*
7 7 7 7
Men$o?a# the petitioner in the first action# lai$ claim in Lot ,6/ on the basis of his
possession thereof an$ Miscellaneous Sales pplication* On the other han$# pri(ate
respon$entsC interest in the conteste$ propert% is anchore$ on their o8n possession
an$ Miscellaneous Sales pplication* In other 8or$s# pri(ate respon$ents are not
assertin3 ri3hts un$er Men$o?a* ConseEuentl%# the% ha(e no communit% of interests
in the conteste$ propert%H in fact# their interests are anta3onistic to each other*
On the other han$# Lthe test often use$ in $eterminin3 8hether causes of action are
i$entical is to ascertain 8hether the same e(i$ence 8hich is necessar% to sustain the
secon$ action 8oul$ ha(e been sufficient to authori?e reco(er% in the first# e(en if
the forms or nature of the t8o actions be $ifferentL @Carlet (s* Court of ppeals# 4/;
SCR =/A* Consi$erin3 that the foun$ation of pri(ate respon$entsC action is $ifferent
from that of Men$o?a# the e(i$ence necessar% to sustain the latterCs claim in the first
action 8oul$ be separate an$ $istinct from that reEuire$ to establish pri(ate
respon$entsC cause of action*
Since not all reEuisites of res Du$icata are present# respon$ent Du$3e acte$ ri3htl% in
issuin3 the assaile$ or$ers* In short# he committe$ no abuse of $iscretion*
&HEREGORE# the petition is DISMISSED for lacF of merit*
SO ORDERED*,<
The motion for reconsi$eration of the fore3oin3 $ecision 8as $enie$ hence# this petition*
Petitioner claims that the case of ssistant E7ecuti(e Secretar% bars the filin3 of Ci(il
Case No* ,,44# an$ that a petition for certiorari un$er Rule <; of the Rules of Court is the
proper reme$% in assailin3 the or$er of the Re3ional Trial Court $en%in3 the motion to
$ismiss*
Respon$ents ar3ue that the% ha(e been in open# peaceful# public an$ a$(erse possession
of the Dispute$ Propert% in the concept of o8ner since ,=;6H that the patent an$ ori3inal
certificate of title 8ere frau$ulentl% issue$ in fa(or of the Pe>a HeirsH an$ that their action
for re(ie8 of $ecree of re3istration an$Kor recon(e%ance is not barre$ b% the CourtCs
rulin3 in ssistant E7ecuti(e Secretar%*
The issues for resolution are as follo8s0 ,A 8hether a petition for certiorari un$er Rule <;
is the proper reme$% in assailin3 an or$er $en%in3 a motion to $ismissH an$ 4A 8hether
)u$3e mpi3 committe$ 3ra(e abuse of $iscretion in $en%in3 petitionerCs motion to
$ismiss an$ reinstatin3 Ci(il Case No* ,,44*
The petition lacFs merit*
It has lon3 been settle$ that an or$er $en%in3 a motion to $ismiss is an interlocutor%
or$er* It neither terminates nor finall% $isposes of a case# as it lea(es somethin3 to be
$one b% the court before the case is finall% $eci$e$ on the merits* s such# the 3eneral
rule is that the $enial of a motion to $ismiss cannot be Euestione$ in a special ci(il action
for certiorari*,/ Ho8e(er# there are e7ceptions to the 3eneral rule* In Velar$e (* Lope?#
)r*#,. the Court hel$ that resort to a special ci(il action for certiorari is allo8e$ 8hen the
3roun$ for the motion to $ismiss is improper (enue# lacF of Duris$iction# or res Du$icata as
in the case at bar*,= Thus# petitioner $i$ not commit a proce$ural error in filin3 a petition
forcertiorari before the Court of ppeals*
Ne(ertheless# as to the substanti(e issue raise$ herein# the petition must fail* &e fin$ that
)u$3e mpi3 $i$ not commit 3ra(e abuse of $iscretion in $en%in3 petitionerCs motion to
$ismiss an$ reinstatin3 Ci(il Case No* ,,44*
In Orope?a MarFetin3 Corp* (* llie$ BanFin3 Corp*#46 8e hel$ that res Du$icata literall%
means La matter a$Du$3e$H a thin3 Du$iciall% acte$ upon or $eci$e$H a thin3 or matter
settle$ b% Du$3ment*L It la%s the rule that an e7istin3 final Du$3ment or $ecree ren$ere$ on
the merits# an$ 8ithout frau$ or collusion# b% a court of competent Duris$iction# upon an%
matter 8ithin its Duris$iction# is conclusi(e of the ri3hts of the parties or their pri(ies# in
all other actions or suits in the same or an% other Du$icial tribunal of concurrent
Duris$iction on the points an$ matters in issue in the first suit*4,
case is barre$ b% prior Du$3ment or res Du$icata 8hen the follo8in3 reEuisites concur0
@,A the former Du$3ment is finalH @4A it is ren$ere$ b% a court ha(in3 Duris$iction o(er the
subDect matter an$ the partiesH @5A it is a Du$3ment or an or$er on the meritsH an$ @-A there
is \ bet8een the first an$ the secon$ actions \ i$entit% of parties# subDect matter# an$
causes of action*44
In this case# it is not $ispute$ that the first three elements are present* LiFe8ise# there is
no contro(ers% re3ar$in3 the i$entit% of the subDect matter* The Euestion# therefore# is
8hether there is i$entit% of parties an$ causes of action* &e fin$ that there is none*
Ci(il Case No* =. 8as a special ci(il action for certiorari file$ b% Men$o?a a3ainst the
ssistant E7ecuti(e Secretar% for Le3al ffairs of the Office of the Presi$ent# the BOL#
the Director of Lan$s# an$ Pe>a* On the other han$# Ci(il Case No* ,,44 is an action for
re(ie8 of $ecree of re3istration an$Kor recon(e%ance* The parties are respon$ents
Trini$a$# the Pe>a Heirs# the DENR Re3ion IS Office# an$ the BOL*
Men$o?aCs action in Ci(il Case No* =. 8as base$ on alle3e$ 3ra(e abuse of $iscretion of
the Office of the Presi$ent in a8ar$in3 the entire area of Lot No* 5;; to Pe>a* He claime$
o8nership o(er Lot No* / an$ in support thereof# presente$ the Miscellaneous Sales
pplication he file$ 8ith the BOL on No(ember <# ,=<4* Mean8hile# respon$entsC action
in Ci(il Case No* ,,44 8as base$ on their continue$ possession of the Dispute$ Propert%
in the concept of o8ner for o(er -6 %ears# an$ the alle3e$ frau$ulent issuance of a patent
an$ certificate of title to the Pe>a Heirs*
True# res Du$icata $oes not reEuire absolute but onl% substantial i$entit% of parties*
Ho8e(er# there is substantial i$entit% onl% 8hen the La$$itionalL part% acts in the same
capacit% or is in pri(it% 8ith the parties in the former action*45 This is not so in the
present case* It must be emphasi?e$ that respon$ents are not assertin3 ri3hts un$er
Men$o?a* In$ee$# the recor$s 8ill sho8 that the parties in the t8o cases ha(e their o8n
ri3hts an$ interests in relation to the subDect matter in liti3ation*
Moreo(er# as correctl% foun$ b% the Court of ppeals# the basis of respon$entsC action
8as $ifferent from that of Men$o?aH the e(i$ence necessar% to sustain the latterCs claim is
separate an$ $istinct from that reEuire$ to establish respon$entsC cause of action*4- &hile
Men$o?a relie$ on the Miscellaneous Sales pplication as e(i$ence to support his claim#
herein respon$ents 8oul$ ha(e to present proof of their alle3e$ continuous possession of
the Dispute$ Propert% as 8ell as frau$ in the issuance of the patent an$ title in fa(or of
the Pe>a Heirs* In Morato (* Court of ppeals#4; 8e hel$ that the test of i$entit% of
causes of action lies not in the form of action but in 8hether the same facts or e(i$ence
8oul$ support an$ establish the former an$ present causes of action*4<
Thus# res Du$icata $oes not appl% in the instant case there bein3 no i$entit% of parties an$
causes of action* Ne(ertheless# the public polic% un$erl%in3 the principle of res Du$icata
must be consi$ere$ to3ether 8ith the polic% that a part% shall not be $epri(e$ of a fair
a$(ersar% procee$in3 8herein to present his case*4/ It bears stressin3 that respon$entsC
action for re(ie8 of $ecree of re3istration is sanctione$ un$er Section 54 of Presi$ential
Decree No* ,;4=#4. 8hich pro(i$es that a person $epri(e$ of his lan$ throu3h actual
frau$ ma% institute an action to reopen or re(ie8 a $ecree of re3istration 8ithin one %ear
from entr% of such $ecree* It states0
Section 54* Re(ie8 of $ecree of re3istrationH Innocent purchaser for (alue* The
$ecree of re3istration shall not be reopene$ or re(ise$ b% reason of absence# minorit%#
or other $isabilit% of an% person a$(ersel% affecte$ thereb%# nor b% an% procee$in3 in
an% court for re(ersin3 Du$3ments# subDect# ho8e(er# to the ri3ht of an% person#
inclu$in3 the 3o(ernment an$ the branches thereof# $epri(e$ of lan$ or of an% estate
or interest therein b% such a$Du$ication or confirmation of title obtaine$ b% actual
frau$# to file in the proper Court of Girst Instance a petition for reopenin3 an$ re(ie8
of the $ecree of re3istration not later than one %ear from an$ after the $ate of the
entr% of such $ecree of re3istration# but in no case shall such petition be entertaine$
b% the court 8here an innocent purchaser for (alue has acEuire$ the lan$ or an
interest therein# 8hose ri3hts ma% be preDu$ice$* &hene(er the phrase Linnocent
purchaser for (alueL or an eEui(alent phrase occurs in this Decree# it shall be $eeme$
to inclu$e an innocent lessee# mort3a3ee# or other encumbrancer for (alue*
The Court has repeate$l% applie$ the fore3oin3 pro(ision of la8 to a patent issue$ b% the
Director of Lan$s# appro(e$ b% the Secretar% of Natural Resources# un$er the si3nature of
the Presi$ent of the Philippines* The $ate of the issuance of the patent correspon$s to the
$ate of the issuance of the $ecree in or$inar% cases*4=
In this case# the patent 8as issue$ in fa(or of the Pe>a Heirs on September 46# ,==5*
Respon$ents file$ Ci(il Case No* ,,44 for LRe(ie8 of Decree of Re3istration an$Kor
Recon(e%ance 8ith Pra%er for Issuance of &rit of Preliminar% Prohibitor% InDunction an$
Temporar% Restrainin3 Or$erL on )anuar% 4/# ,==-# or 8ell 8ithin the prescribe$ one'
%ear perio$* LiFe8ise# recor$s sho8 that TCT No* ;.=/< un$er petitionerCs name bears a
Notice of Lis Pen$ens*56Thus# it cannot be sai$ that petitioner is an innocent purchaser
for (alue as she 8as 8ell a8are of respon$entsC claim o(er the Dispute$ Propert%*
Gurther# e(en assumin3 ar3uen$o that respon$ents file$ their action after one %ear# the%
ma% still be entitle$ to relief* n a33rie(e$ part% ma% file an action for recon(e%ance
base$ on implie$ or constructi(e trust# 8hich prescribes in ten %ears from the $ate of the
issuance of the certificate of title o(er the propert% pro(i$e$ that the propert% has not
been acEuire$ b% an innocent purchaser for (alue*5,
Respon$ents clearl% asserte$ in their complaint that the% an$ their pre$ecessors'in'
interest ha(e lon3 been the o8ners of the Dispute$ Propert% an$ that the% 8ere
frau$ulentl% $epri(e$ of o8nership thereof 8hen the Pe>a Heirs obtaine$ a patent an$
certificate of title in their fa(or* These alle3ations certainl% measure up to the reEuisite
statement of facts to constitute an action for recon(e%ance*54
final note* It appears from the recor$s that after our rulin3 in the ssistant E7ecuti(e
Secretar% case in ,=.=# the BOL issue$ a Patent on September 46# ,==5 in fa(or of the
Pe>a Heirs 8hich became the basis for the issuance of OCT No* P'55<;. co(erin3 Lot
No* ,6/* Ho8e(er# as hel$ in the ssistant E7ecuti(e Secretar% case# Lot No* ,6/ \ as
accretions to the ori3inal lot @Lot No* 5;;A a8ar$e$ to Larrabaster on )ul% ,6# ,=;6 \ Lno
lon3er belon3e$ to the +o(ernment9#: the sub$i(ision thereof b% the Bureau of Lan$s into
three lots @Lot No* ,6/# Lot No* ,6. an$ Lot No* ,6=A# as 8ell as the allocation of sai$
lots to t8o other in$i(i$uals# 8as be%on$ the scope of its authorit%*L55 s a result# 8hile
Lot No* ,6/ ma% no lon3er be acEuire$ un$er the pro(isions of the Public Lan$ ct# it
$oes not absolutel% foreclose the possibilit% that# as a pri(ate propert%# a portion thereof
@the Dispute$ Propert%A ma% ha(e been acEuire$ b% respon$ents throu3h acEuisiti(e
prescription un$er the Ci(il Co$e* These matters# ho8e(er# are the proper subDect of a
separate action shoul$ one be file$ subDect# of course# to such claims an$ $efenses that
either part% ma% ha(e un$er rele(ant la8s*
ll tol$# it 8oul$ be premature to or$er the $ismissal of respon$entsC complaint as the%
ha(e %et to be 3i(en an opportunit% to substantiate their claims* &e note that respon$ents
are in actual ph%sical possession of the Dispute$ Propert% up to this $ate# an$ the fact of
their ph%sical possession o(er man% %ears is not $ispute$ b% petitioner* 5-2n$er the
circumstances# it 8oul$ be more in Feepin3 8ith the stan$ar$s of fairness to ha(e a full'
blo8n trial 8here the e(i$entiar% matters are threshe$ out*
&HEREGORE# the petition is DENIED* The )ul% 5,# 4666 Decision# an$ the )anuar% .#
466, Resolution of the Court of ppeals in C'+*R* SP No* ;;;., are GGIRMED* The
trial court is ORDERED to resume trial in Ci(il Case No* ,,44 an$ to resol(e the same
8ith $ispatch* SO ORDERED*