TONG V GO LTD: Chapter XI

37
G.R. No. 196023 April 21, 2014 J. Reyes Ben
Petitioners: Respondents:
Jose Juan Tong, Et Al. Go Tiat Kun, Et Al.
Recit Ready Summary

Juan Tong met with all his children to inform them of his intention to purchase a lot to be used for the
family's lumber business called "Juan Tong Lumber". Since Juan Tong, a Chinese citizen, was
disqualified from acquiring the said lot, the title to the property will be registered in the name of his eldest
son, Luis, Sr., the only Filipino citizen among his children. Luis, Sr., Juan Tong and his wife died. Luis,
Sr. also died and the respondents, being his surviving heirs, claimed that the lot was a conjugal property
of their parents which they acquired through succession.

Respondents subdivided the lot covered by 2 TCT’s (Lot A and Lot B) in the name of Luis, Jr. Lot A was
sold to his children while Lot B was sold to Fine Rock Development Corp and then sold to Visayas
Goodwill Credit Corp. When petitioners knew about the sales, they filed a case for Nullification of Titles
and Deeds of Extrajudicial Settlement and Sale and Damages. Lot B issue was already resolved by the
SC and was reconveyed to petitioners. Lot A is now at issue.

Issue is WN Lot A also belongs to the petitioners. SC ruled yes as there was an implied trust constituted
on the whole lot. An implied resulting trust, which is sometimes referred to as a purchase money resulting
trust, was created. According to Article 1448, the elements of which are: (a) an actual payment of money,
property or services, or an equivalent, constituting valuable consideration; and (b) such consideration
must be furnished by the alleged beneficiary of a resulting trust.

Here, the petitioners have shown that the two elements are present in the instant case. Luis, Sr. was
merely a trustee of Juan Tong and the petitioners in relation to the subject property. It was also Juan
Tong who provided the money for the purchase of the lot but the corresponding TCT was placed in the
name of Luis, Sr.

Parole evidence may be shown to prove a trust as what is crucial is the intention of the parties.

Resulting trusts do not prescribe except when the trustee repudiates the trust. Action to reconvey does
not prescribe so long as the property stands in the name of the trustee. When the petitioners discovered
about the breach of the trust agreement, they immediately instituted an action to protect their rights.
Clearly, no delay may be attributed to them.

Facts
1. Petitioners are nine of the ten children of Juan Tong, a Chinese citizen.
2. Juan Tong met with all his children to inform them of his intention to purchase a lot to be used for
the family's lumber business called "Juan Tong Lumber".
3. Since Juan Tong, a Chinese citizen, was disqualified from acquiring the said lot, the title to the
property will be registered in the name of his eldest son, Luis, Sr., the only Filipino citizen among
his children
4. Luis, Sr., Juan Tong and his wife died. Luis, Sr. also died and the respondents, being his surviving
heirs, claimed that the lot was a conjugal property of their parents and subdivided the lot into two.
5. The two lots were then sold to different parties. Petitioners are now filing for an action for Nullification
of Titles and Deeds of Extrajudicial Settlemetn and Sale and Damages.
Point/s of Contention
Petitioners: Property is held as an implied trust.
Respondents: Lot A is a conjugal property given to us by our parents.
Issue Ruling
1. WN lot A belonged to the petitioners 1. Yes

1
Rationale
1. Yes, the lot (both Lots A and B) belonged to the petitioners by virtue of an implied trust

There was an implied trust constituted

There was an intention to create a trust between the parties. Although the lot was titled in the name of
Luis, Sr., the circumstances surrounding the acquisition of the subject property provides for a clear intent
that the equitable or beneficial ownership of the property should belong to the Juan Tong family.
a. Juan Tong had the FINANCIAL MEANS to purchase the property. Respondents failed to present
a single witness to corroborate their claim that Luis, Sr. bought the property with his own money
since at that time, Luis Sr., was merely working for his father where he received a monthly salary
of P200.00 with free board and lodging.
b. POSSESSION of the lot had always been with the petitioners
c. From the time it was registered in the name of Luis, Sr. in 1957, the lot remained UNDIVIDED
and UNTOUCHED by the respondents. It was only after the death of Luis, Sr. that the
respondents claimed ownership over the lot and subdivided it into Lot A and Lot B.
d. Respondent Leon admitted that up to the time of his father's death,
- They resided in the tenement in the front part of Juan Tong's compound
- Luis Sr. never sent any letter or communication to the petitioners claiming ownership of the lot
- He and his mother have a residence at Ledesco Village, La Paz, Iloilo City while his brother
and sisters also have their own residences.

Parole evidence can be used to establish trust

The oral testimonies of witnesses Simeon Juan Tong and Jose Juan Tong, were correctly used to arrive
at the conclusion that an implied resulting trust exists. Intention, even if presumed or implied, is always
an element part in a resulting trust.

Petitioners are not barred from prescription, laches, or estoppel

Resulting trusts do not prescribe except when the trustee repudiates the trust. Action to reconvey does
not prescribe so long as the property stands in the name of the trustee.

To allow prescription would be tantamount to allowing a trustee to acquire title against his principal and
true owner. Title of the lot was still registered in the name of Luis Sr. even when he predeceased Juan
Tong. Title to property does not vest ownership but it is a mere proof that such property has been
registered. Considering that the implied trust has been repudiated through such death, the lot cannot be
included in Luis Sr.’s estate except only insofar as his undivided share thereof is concerned.

When the petitioners discovered about the breach of the trust agreement committed by the heirs of Luis,
Sr., they immediately instituted an action to protect their rights, as well as upon learning that respondent
Go Tiat Kun executed a Deed of Sale of Undivided Interest over Lot A in favor of her children. Clearly,
no delay may be attributed to them.

Disposition
Petition granted.