Est of Margarita vs. Laigo

8/13/2019 Est of Margarita vs. Laigo

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Contracts

Republic of the Philippines

Supreme Court

Manila

THIRD DIVISION

ESTATE OF MARGARITA D.

CABACUNGAN, represented by LUZ

LAIGOALI,

Petitioner,

- versus -

MARILOU LAIGO, !EDRO RO"

LAIGO, STELLA BALAGOT #nd

S!OUSES MARIO B. CAM!OS AND

$ULIA S. CAM!OS,

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

!resent:

CARPIO,* J.,

VELASCO, R!, J !,

Chairperson,

"RIO#,**

PERAL$A, an%

SERE#O,*** JJ !

* &esi'nate% as an a%%itional member in lieu of Associate ustice Roberto A! Aba%, perSpecial Or%er #o! ()+ %ate% Au'ust (, )((!

** &esi'nate% as an a%%itional member in lieu of Associate ustice ose Catral Men%o-a, per

Special Or%er #o! (). %ate% ul/ 0, )((!

*** &esi'nate% as an a%%itional member, per Special Or%er #o! ()1 %ate% une (, )((!



Respon%ents!

!r%+-#ted:

Au'ust (, )((

2 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 2

D E C I S I O N

!ERALTA, J./

$his Petition for Re4ie5 un%er Rule 6 of the Rules of Court assails the

October (7, )). &ecision(8(9 of the Court of Appeals in CA3!R! CV #o! 070(!

$he assaile% %ecision affirme% the ul/ , ))( ;u%'ment89 ren%ere% b/ the

Re'ional $rial Court of La <nion, "ranch 77 in Ci4il Case #o! ()7(3" = a

complaint for annulment of sale of real propert/, reco4er/ of o5nership an%

possession, cancellation of ta2 %eclarations an% %ama'es file% b/ Mar'arita

(8(9 Penne% b/ Associate ustice apar "! &imaampao, 5ith Associate ustices Marina L!

"u-on an% Re'ala%o E! Maambon', concurrin'> rollo, pp! 6736!

89 Si'ne% b/ u%'e Rose Mar/ R! Molina Alim> id ! at (073(1(!



Cabacun'an,7879 represente% b/ her %au'hter, Lu- Lai'o3Ali a'ainst Marilou Lai'o

an% Pe%ro Ro/ Lai'o, respon%ents herein, an% a'ainst Estella "ala'ot,6869 an% the

spouses Mario an% ulia Campos!

$he facts follo5!

Mar'arita Cabacun'an ?Mar'arita@ o5ne% three parcels of unre'istere% lan%

in Parin'ao an% in "accuit, "auan', La <nion, each measurin' 6,( suare

meters, (,+1. suare meters an% 7,66 suare meters! $he properties 5ere

in%i4i%uall/ co4ere% b/ ta2 %eclaration all in her name! 89 Sometime in (+.1,

Mar'aritaBs son, Roberto Lai'o, r! ?Roberto@, applie% for a non3immi'rant 4isa to

the <nite% States, an% to support his application, he alle'e%l/ ase% Mar'arita to

transfer the ta2 %eclarations of the properties in his name!.8.9 Dor sai% purpose,

Mar'arita, unno5n to her other chil%ren, e2ecute% an Affi%a4it of $ransfer of

Real Propert/ 5hereb/ the sub;ect properties 5ere transferre% b/ %onation to

Roberto!0809 #ot lon' after, RobertoBs 4isa 5as issue% an% he 5as able to tra4el to

the <!S! as a tourist an% returne% in %ue time! In (+0+, he a%opte% respon%ents

7879 Petitioner 5as later on substitute% b/ the Estate of Mar'arita &! Cabacun'an, represente%

b/ Lu- Lai'o3Ali!

6869 Estella "ala'otBs name 5as %roppe% from the subseuent plea%in's file% 5ith the trialcourt!

89 $a2 &eclaration #os! (76 series of (+7, 76..1 series of (+.0 an% () series of

(+7, r ecor%s, pp! (.3(1!

.8.9 Recor%s, p! !

0809 Id ! at 37, 1 an% (!



Pe%ro Lai'o ?Pe%ro@ an% Marilou Lai'o ?Marilou@,1819 an% then he marrie%

respon%ent Estella "ala'ot!

In ul/ (++), Roberto sol% the 6,( s m propert/ in "accuit to the spouses

Mario an% ulia Campos for P7,)))!))!+8+9 $hen in Au'ust (++, he sol% the

(,+1. s m an% 7,66 s m lots in Parin'ao, respecti4el/, to Marilou for

P()),)))!)) an% to Pe%ro for P6),)))!))!()8()9 Alle'e%l/, these sales 5ere not

no5n to Mar'arita an% her other chil%ren!((8((9

It 5as onl/ in Au'ust (++, at RobertoBs 5ae, that Mar'arita came to no5

of the sales as tol% b/ Pe%ro himself!(8(9 In Debruar/ (++., Mar'arita,

represente% b/ her %au'hter, Lu-, institute% the instant complaint for the annulment

of sai% sales an% for the reco4er/ of o5nership an% possession of the sub;ect

properties as 5ell as for the cancellation of Ricar%oBs ta2 %eclarations! Mar'arita

a%mitte% ha4in' accommo%ate% RobertoBs reuest for the transfer of the properties

to his name, but pointe% out that the arran'ement 5as onl/ for the specific purposeof supportin' his <!S! 4isa application! She emphasi-e% that she ne4er inten%e% to

%i4est herself of o5nership o4er the sub;ect lan%s an%, hence, Roberto ha% no ri'ht

to sell them to respon%ents an% the Spouses Campos! She lie5ise alle'e% that the

sales, 5hich 5ere fictitious an% simulate% consi%erin' the 'ross ina%euac/ of the

1819 Id ! at (+3(!

+8+9 See &ee% of Absolute Sale, id ! at +!

()8()9 See &ee% of Sale of a Resi%ential Lan%, an% &ee% of Sale of Portions of Lan%, id ! at ()3

((!

((8((9 Recor%s, pp! 736!

(8(9 Id ! at > $S#, Debruar/ +, ))), pp! 13+!



stipulate% price, 5ere frau%ulentl/ entere% into b/ Roberto! She impute% ba% faith

to Pe%ro, Marilou an% the Spouses Campos as bu/ers of the lots, as the/

suppose%l/ ne5 all alon' that Roberto 5as not the ri'htful o5ner of the

properties!(78(79 ence, she principall/ pra/e% that the sales be annulle%> that

RobertoBs ta2 %eclarations be cancelle%> an% that the sub;ect properties be

recon4e/e% to her!(68(69

$he Spouses Campos a%4ance% that the/ 5ere innocent purchasers for 4alue

an% in 'oo% faith, an% ha% merel/ relie% on RobertoBs representation that he ha%the ri'ht to sell the propert/> an% that, hence, the/ 5ere not boun% b/ 5hate4er

a'reement entere% b/ Mar'arita 5ith her son! $he/ posite% that the alle'e% 'ross

ina%euac/ of the price 5oul% not in4ali%ate the sale absent a 4itiation of consent

or proof of an/ other a'reement! Durther, the/ note% that Mar'aritaBs claim 5as

alrea%/ barre% b/ prescription an% laches o5in' to her lon' inaction in reco4erin'

the sub;ect properties! Dinall/, the/ belie4e% that inasmuch as Roberto ha% alrea%/

passe% a5a/, Mar'arita must ha4e, instea%, %irecte% her claim a'ainst his estate!(

8(9

(78(79 See Compliant, recor%s, pp! 3!

(68(69 Recor%s, p! .!

(8(9 Recor%s, p! 77!



In much the same 5a/, Marilou an% Pe%ro,(.8(.9 5ho lie5ise professe%

themsel4es to be bu/ers in 'oo% faith an% for 4alue, belie4e% that Mar'aritaBs

cause of action ha% alrea%/ been barre% b/ laches, an% that e4en assumin' the

contrar/, the cause of action 5as ne4ertheless barre% b/ prescription as the same

ha% accrue% 5a/ bac in (+.1 upon the e2ecution of the affi%a4it of transfer b/

4irtue of 5hich an implie% trust ha% been create%! In this re'ar%, the/ emphasi-e%

that the la5 allo5e% onl/ a perio% of ten ?()@ /ears 5ithin 5hich an action to

reco4er o5nership of real propert/ or to enforce an implie% trust thereon ma/ be

brou'ht, but Mar'arita merel/ let it pass!(08(09

On Debruar/ 7, (+++, prior to pre3trial, Mar'arita an% the Spouses Campos

amicabl/ entere% into a settlement 5hereb/ the/ 5ai4e% their respecti4e claims

a'ainst each other!(18(19 Mar'arita %ie% t5o %a/s later an% 5as forth5ith

substitute% b/ her estate!(+8(+9 On Debruar/ 1, (+++, the trial court ren%ere% a

Partial &ecision)8)9 appro4in' the compromise a'reement an% %ismissin' the

complaint a'ainst the Spouses Campos! Dorth5ith, trial on the merits ensue% 5ith

respect to Pe%ro an% Marilou!

(.8(.9 $hese respon%ents initiall/ submitte% a Motion to &ismiss, but the trial court %enie% thesame in its March (), (++1 Or%er! See recor%s, pp! +(3+1, ((.3((+!

(08(09 See Ans5er, recor%s, pp! (3(0!

(18(19 Recor%s, p! (07!

(+8(+9 Id ! at (0+3(1!

)8)9 Id ! at (003(01!



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

as follo5s:

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

$he trial court rule% that the (+.1 Affi%a4it of $ransfer operate% as a simple

transfer of the sub;ect properties from Mar'arita to Roberto! It foun% no e2press

trust create% bet5een Roberto an% Mar'arita b/ 4irtue merel/ of the sai% %ocument

as there 5as no e4i%ence of another %ocument sho5in' RobertoBs un%ertain' to

return the sub;ect properties! Interestin'l/, it conclu%e% that, instea%, an Gimplie%

or constructi4e trustH 5as create% bet5een the parties, as if affirmin' that there 5as

in%ee% an a'reement = albeit un5ritten = to ha4e the properties returne% to

Mar'arita in %ue time! 89

Moreo4er, the trial court surmise% ho5 Mar'arita coul% ha4e faile% to

reco4er the sub;ect properties from Roberto at an/ time bet5een (+.1, follo5in'

the e2ecution of the Affi%a4it of $ransfer, an% RobertoBs return from the <nite%

States shortl/ thereafter! Din%in' Mar'arita 'uilt/ of laches b/ such inaction, the

trial court barre% reco4er/ from respon%ents 5ho 5ere foun% to ha4e acuire% the

properties suppose%l/ in 'oo% faith an% for 4alue!7879 It also pointe% out that

(8(9 Id ! at 11!

89 Rollo, p! (01!

7879 Id ! at (01!



reco4er/ coul% no lon'er be pursue% in this case because Mar'arita ha% lie5ise

e2hauste% the ten3/ear prescripti4e perio% for recon4e/ance base% on an implie%

trust 5hich ha% commence% to run in (+.1 upon the e2ecution of the Affi%a4it of

$ransfer!6869 Dinall/, it emphasi-e% that mere ina%euac/ of the price as alle'e%

5oul% not be a sufficient 'roun% to annul the sales in fa4or of Pe%ro an% Marilou

absent an/ %efect in consent!89

A''rie4e%, petitioner appeale% to the Court of Appeals 5hich, on October

(7, ))., affirme% the trial courtBs %isposition! $he appellate court %ismisse% petitionerBs claim that Roberto 5as merel/ a trustee of the sub;ect properties as

there 5as no e4i%ence on recor% supporti4e of the alle'ation that Roberto merel/

borro5e% the properties from Mar'arita upon his promise to return the same on his

arri4al from the <nite% States! Durther, it h/pothesi-e% that 'rantin' the e2istence

of an implie% trust, still Mar'aritaBs action thereun%er ha% alrea%/ been

circumscribe% b/ laches! .8.9

Curiousl/, 5hile the appellate court ha% foun% no implie% trust relation in

the transaction bet5een Mar'arita an% Roberto, ne4ertheless, it hel% that the ten3

/ear prescripti4e perio% un%er Article ((66 of the Ci4il Co%e, in relation to an

implie% trust create% un%er Article (6., ha% alrea%/ been e2hauste% b/ Mar'arita

because her cause of action ha% accrue% 5a/ bac in (+.1> an% that 5hile laches

6869 Id ! at (0+!

89 Id ! at (1(!

.8.9 CA rollo, p! 7!



an% prescription as %efenses coul% ha4e a4aile% a'ainst Roberto, the same 5oul%

be una4ailin' a'ainst Pe%ro an% Marilou because the latter 5ere suppose%l/ bu/ers

in 'oo% faith an% for 4alue!0809 It %ispose% of the appeal, thus:

FEREDORE, the Appeal is hereb/ &E#IE&! $he assaile% Decision

%ate% ul/ ))( of the Re'ional $rial Court of "auan', La <nion, "ranch 77 is

ADDIRME&!

SO OR&ERE&!1819

ence, the instant recourse imputin' error to the Court of Appeals in

hol%in': ?a@ that the complaint is barre% b/ laches an% prescription> ?b@ that the rule

on innocent purchaser for 4alue applies in this case of sale of unre'istere% lan%>

an% ?c@ that there is no e4i%ence to support the fin%in' that there is an implie% trust

create% bet5een Mar'arita an% her son Roberto!+8+9

Petitioner posits that the Court of Appeals shoul% not ha4e hapha-ar%l/

applie% the %octrine of laches an% faile% to see that the parties in this case are

boun% b/ familial ties! $he/ assert that laches must not be applie% 5hen an

in;ustice 5oul% result from it! Petitioner belie4es that the e2istence of such

confi%ential relationship preclu%es a fin%in' of unreasonable %ela/ on Mar'aritaBs

part in enforcin' her claim, especiall/ in the face of Lu-Bs testimon/ that she an%

0809 Id ! at 63!

1819 Id ! at .!

+8+9 Id ! at 1!



Mar'arita ha% place% trust an% confi%ence in Roberto! Petitioner also refutes the

Court of AppealsB fin%in' that there 5as a %onation of the properties to Roberto

5hen the truth is that the sub;ect properties 5ere all that Mar'arita possesse% an%

that she coul% not ha4e faile% to pro4i%e for her other chil%ren nor for means b/

5hich to support herself! It reiterates that the transfer to Roberto 5as onl/ an

accommo%ation so that he coul% submit proof to support his <!S! 4isa application!

On the issue of prescription, petitioner a%4ances that it runs from the time

Roberto, as trustee, has repu%iate% the trust b/ sellin' the properties to respon%entsin Au'ust (, (++> that hence, the filin' of the instant complaint in (++. 5as 5ell

5ithin the prescripti4e perio%! Dinall/, petitioner states that 5hether a bu/er is in

'oo% or ba% faith is a matter that attains rele4ance in sales of re'istere% lan%, as

corollar/ to the rule that a purchaser of unre'istere% lan% uninforme% of the sellerBs

%efecti4e title acuires no better ri'ht than such seller!

Respon%ents stan% b/ the rulin' of the Court of Appeals! In their Comment,

the/ theori-e that if in%ee% Mar'arita an% Roberto ha% a'ree% to ha4e the sub;ect

properties returne% follo5in' the e2ecution of the Affi%a4it of $ransfer, then there

shoul% ha4e been a 5ritten a'reement e4incin' such intention of the parties! $he/

note that petitionerBs reliance on the Affi%a4it of $ransfer as 5ell as on the alle'e%

un5ritten a'reement for the return of the properties must fail, simpl/ because the/

are not e4en parties to it! "e that as it ma/, the sai% %ocument ha% effecti4el/

transferre% the properties to Roberto 5ho, in turn, ha% acuire% the full capacit/ to

sell them, especiall/ since these properties coul% 5ell be consi%ere% as RobertoBs



inheritance from Mar'arita 5ho, on the contrar/, %i% ha4e other e2istin' properties

in her name! Moreo4er, the/ belie4e that the liberal application of the rule on

laches bet5een famil/ members %oes not appl/ in the instant case because there is

no fi%uciar/ relationship an% pri4it/ bet5een them an% Mar'arita!

$here is merit in the petition!

$o be'in 5ith, the rule is that the latitu%e of ;u%icial re4ie5 un%er Rule 6

'enerall/ e2clu%es factual an% e4i%entiar/ ree4aluation, an% the Court or%inaril/

abi%es b/ the uniform conclusions of the trial court an% the appellate court! et, in

the case at bar, 5hile the courts belo5 ha4e both arri4e% at the %ismissal of

petitionerBs complaint, there still remains unsettle% the ostensible incon'ruence in

their respecti4e factual fin%in's! It thus behoo4es us to be thorou'h both in

re4ie5in' the recor%s an% in appraisin' the e4i%ence, especiall/ since an opposite

conclusion is 5arrante% an%, as 5ill be sho5n, ;ustifie%!

A trust is the le'al relationship bet5een one person ha4in' an euitable

o5nership of propert/ an% another person o5nin' the le'al title to such propert/,

the euitable o5nership of the former entitlin' him to the performance of certain

%uties an% the e2ercise of certain po5ers b/ the latter! 7)87)9 $rusts are either

7)87)9 Cañezo v. Rojas, !R! #o! (61011, #o4ember 7, ))0, 71 SCRA 6, (> Tigno v.

Court of Appeals, !R! #o! (()((, October 1, (++0, 1) SCRA ., 0(30, citin' Morales

v. Court of Appeals, 06 SCRA 1 ?(++0@!



e2press or implie%!7(87(9 E2press or %irect trusts are create% b/ the %irect an%

positi4e acts of the parties, b/ some 5ritin' or %ee%, or 5ill, or b/ oral %eclaration

in 5or%s e4incin' an intention to create a trust! 7879 Implie% trusts = also calle%

Gtrusts b/ operation of la5,H Gin%irect trustsH an% Gin4oluntar/ trustsH = arise b/

le'al implication base% on the presume% intention of the parties or on euitable

principles in%epen%ent of the particular intention of the parties!778779 $he/ are

those 5hich, 5ithout bein' e2presse%, are %e%ucible from the nature of the

transaction as matters of intent or, in%epen%entl/ of the particular intention of the

parties, as bein' inferre% from the transaction b/ operation of la5 basicall/ b/

reason of euit/!768769

Implie% trusts are further classifie% into constructi4e trusts an% resultin'

trusts! Constructi4e trusts, on the one han%, come about in the main b/ operation

of la5 an% not b/ a'reement or intention! $he/ arise not b/ an/ 5or% or phrase,

either e2pressl/ or implie%l/, e4incin' a %irect intention to create a trust, but one

5hich arises in or%er to satisf/ the %eman%s of ;ustice!7879 Also no5n as trusts

e !aleficio" trusts e delicto an% trusts de son tort" the/ are construe% a'ainst one

7(87(9 Article (66(, Ci4il Co%e of the Philippines states:

AR$! (66(! $rusts are either e2press or implie%! E2press trusts are create% b/ the

intention of the trustor or of the parties! Implie% trusts come into bein' b/ operation of la5!

7879 Cañezo v. Rojas, supra note 7), at (3, citin' #uan $da. de %sconde v. Court of Appeals, 77 Phil! 1(, 1+ ?(++.@> Ringor v. Ringor , !R! #o! (601.7, Au'ust (7, ))6, 67.

SCRA 616, 6+0!

778779 Tigno v. Court of Appeals, supra note 7), at 0(> 0. Am ur %, J(+, p! (+(, citin'

&ifford v. Dennis, 77 SE% 70(> 'orrels v. Mc(all), () So ().> an% %!*err) Co!!unit)Church v. #loo!ington Dist. Missionar) + Church %tension 'oc., 61 #E% 11!

768769 See #uan $da. de %sconde, supra note 7, at 1+, citin' ,hilippine (ational #an v.

Court of Appeals, (0 SCRA 760 ?(++7@> Cañezo v. Rojas, supra note 7), at >



5ho b/ actual or constructi4e frau%, %uress, abuse of confi%ence, commission of a

5ron' or an/ form of unconscionable con%uct, artifice, concealment of

uestionable means, or 5ho in an/ 5a/ a'ainst euit/ an% 'oo% conscience has

obtaine% or hol%s the le'al ri'ht to propert/ 5hich he ou'ht not, in euit/ an% 'oo%

conscience, hol% an% en;o/!7.87.9 $he/ are aptl/ characteri-e% as Gfrau%3rectif/in'

trust,H708709 impose% b/ euit/ to satisf/ the %eman%s of ;ustice718719 an% to %efeat

or pre4ent the 5ron'ful act of one of the parties! 7+87+9 Constructi4e trusts are

illustrate% in Articles (6), (66, (6 an% (6.!6)86)9

On the other han%, resultin' trusts arise from the nature or circumstances of

the consi%eration in4ol4e% in a transaction 5hereb/ one person becomes in4este%

5ith le'al title but is obli'ate% in euit/ to hol% his title for the benefit of another!

$his is base% on the euitable %octrine that 4aluable consi%eration an% not le'al

title is %eterminati4e of euitable title or interest an% is al5a/s presume% to ha4e

been contemplate% b/ the parties!6(86(9 Such intent is presume% as it is not

e2presse% in the instrument or %ee% of con4e/ance an% is to be foun% in the nature

7879 Cañezo v. Roas, supra note 7), at 1> citin' eirs of /ap v. Court of Appeals, 70( Phil!

7, 7( ?(+++@!

7.87.9 Roa" Jr. v. Court of Appeals, !R! #o! L30+6, une 7, (+17, (7 SCRA 7, (3(.!

708709 0. Am ur %, J(.7, citin' Martin v. 0ehl ?n% &ist!@, (6 Cal App 7% 1!

718719 Roa" Jr. v. Court of Appeals, supra note 7., at (.!

7+87+9 0. Am ur %, J(.7, citin' Martin v. 0ehl ?n% &ist!@, (6 Cal App 7% 1!

6)86)9 1opez v. Court of Appeals, !R! #o! (0016, &ecember (., ))1, 06 SCRA .!

6(86(9 #uan $da. de %sconde, supra note 7, at 1+3+)!



of their transaction!6869 Implie% trusts of this nature are hence %escribable as

Gintention3enforcin' trusts!H678679 Specific e2amples of resultin' trusts ma/ be

foun% in the Ci4il Co%e, particularl/ Articles (661, (66+, (6(, (6 an% (67! 66

8669

Articles (661 to (6. of the Ci4il Co%e enumerate cases of implie% trust, but

the list accor%in' to Article (660 is not e2clusi4e of others 5hich ma/ be

establishe% b/ the 'eneral la5 on trusts so lon' as the limitations lai% %o5n in

Article (66 are obser4e%,6869 that is, that the/ be not in conflict 5ith the #e5

Ci4il Co%e, the Co%e of Commerce, the Rules of Court an% special la5s!6.86.9

Fhile resultin' trusts 'enerall/ arise on failure of an e2press trust or of the

purpose thereof, or on a con4e/ance to one person upon a consi%eration from

another ?sometimes referre% to as a Gpurchase3mone/ resultin' trustH@, the/ ma/

also be impose% in other circumstances such that the court, shapin' ;u%'ment in its

most efficient form an% pre4entin' a failure of ;ustice, must %ecree the e2istence of

such a trust!608609 A resultin' trust, for instance, arises 5here, there bein' no frau%

or 4iolation of the trust, the circumstances in%icate intent of the parties that le'al

6869 'alao v. 'alao, !R! #o! L3..++, March (., (+0., 0) SCRA ., 1(!

678679 0. Am ur %, J(.7, citin' Martin v. 0ehl ?n% &ist!@, (6 Cal App 7% 1!

668669 1opez v. Court of Appeals, supra note 6)!

6869 Roa" Jr. v. Court of Appeals, supra note 7., at (!

6.86.9 Article (66 incorporates an% a%opts a lar'e part of the American la5 on trusts an%

thereb/ the Philippine le'al s/stem 5ill be amplifie% an% 5ill be ren%ere% more suite% to a ;ustan% euitable solution of man/ uestions! See $he Report of the Co%e Commission, p! .)!

608609 0. Am ur %, J(.., citin' McClure v. Moore, . So % 1> 2estern 3nion Te. Co. v.

'hepard , (.+ # (0)!



title in one be hel% for the benefit of another! 618619 It also arises in some instances

5here the un%erl/in' transaction is 5ithout consi%eration, such as that

contemplate% in Article (66+6+86+9 of the Ci4il Co%e! Fhere propert/, for

e2ample, is 'ratuitousl/ con4e/e% for a particular purpose an% that purpose is

either fulfille% or frustrate%, the court ma/ affirm the resultin' trust in fa4or of the

'rantor or transferor,)8)9 5here the beneficial interest in propert/ 5as not

inten%e% to 4est in the 'rantee!(8(9

Intention = althou'h onl/ presume%, implie% or suppose% b/ la5 from thenature of the transaction or from the facts an% circumstances accompan/in' the

transaction, particularl/ the source of the consi%eration = is al5a/s an element of a

resultin' trust89 an% ma/ be inferre% from the acts or con%uct of the parties

rather than from %irect e2pression of con%uct!7879 Certainl/, intent as an

in%ispensable element, is a matter that necessaril/ lies in the e4i%ence, that is, b/

e4i%ence, e4en circumstantial, of statements ma%e b/ the parties at or before the

time title passes!6869 "ecause an implie% trust is neither %epen%ent upon an

618619 See 0. Am ur %, J(.., note ) 5hich cites Jones v. Jones" 6+ P% .)7 an% Re 2ilder"6 "R .!

6+86+9 Art! (66+! $here is also an implie% trust 5hen a %onation is ma%e to a person but it

appears that althou'h the le'al estate is transmitte% to the %onee, he ne4ertheless is either to ha4e

no beneficial interest or onl/ a part thereof!

)8)9 Re*illard v. agedorn, . Conn App 7, ) A% 07(!

(8(9 4ra!e v. 2right , + #F% 7.6, (60 ALR ((6!

89 0. Am ur %, J(.+, p! )(, citin' '!ith v. '!ith, (+. So 6)+ an% '5on v. uddleston,

1 SF% (1!

7879 A!erican otel Manage!ent Associates" Inc. v. Jones, 0.1 D% .!



e2press a'reement nor reuire% to be e4i%ence% b/ 5ritin',89 Article

(60.8.9 of our Ci4il Co%e authori-es the a%mission of parole e4i%ence to pro4e

their e2istence! Parole e4i%ence that is reuire% to establish the e2istence of an

implie% trust necessaril/ has to be trust5orth/ an% it cannot rest on loose,

eui4ocal or in%efinite %eclarations!0809

$hus, contrar/ to the Court of AppealsB fin%in' that there 5as no e4i%ence

on recor% sho5in' that an implie% trust relation arose bet5een Mar'arita an%

Roberto, 5e fin% that petitioner before the trial court, ha% actuall/ a%%uce%e4i%ence to pro4e the intention of Mar'arita to transfer to Roberto onl/ the le'al

title to the properties in uestion, 5ith atten%ant e2pectation that Roberto 5oul%

return the same to her on accomplishment of that specific purpose for 5hich the

transaction 5as entere% into! $he e4i%ence of course is not %ocumentar/, but

rather testimonial!

Fe recall that the complaint before the trial court alle'e% that the (+.1

Affi%a4it of $ransfer 5as e2ecute% merel/ to accommo%ate RobertoBs reuest to

ha4e the properties in his name an% thereb/ pro%uce proof of o5nership of certain

real properties in the Philippines to support his <!S! 4isa application! $he

6869 See 0. Am ur %, J(0), p! )7!

89 See 0. Am ur %, J(.., p! (+0!

.8.9 Art! (60! An implie% trust ma/ be pro4e% b/ oral e4i%ence!

0809 Tigno v. Court of Appeals, supra note 7), at 06> Morales v. Court of Appeals, 06

SCRA 1 ?(++0@> 6ng Ching ,o v. Court of Appeals, 7+ SCRA 76( ?(++6@> 'alao v. 'alao,

supra note 6, at 17, citin' De 1eon v. Molo-,ecson, ((. Phil! (.0 ?(+.@!



a'reement, the complaint further state%, 5as for Mar'arita to transfer the ta2

%eclarations of the sub;ect properties to Roberto for the sai% purpose an% 5ithout

the intention to %i4est her of the ri'hts of o5nership an% %ominion!1819

Mar'arita, ho5e4er, %ie% before trial on the merits ensue%> +8+9 /et the alle'ation

5as substantiate% b/ the open3court statements of her %au'hter, Lu-, an% of her

niece, ilaria Costales ?ilaria@, a %isintereste% 5itness!

In her testimon/, Lu-, 5ho affirme% un%er oath her o5n presence at the

e2ecution of the Affi%a4it of $ransfer, %escribe% the circumstances un%er 5hichMar'arita an% Roberto entere% into the a'reement! She narrate% that Roberto ha%

5ante% to tra4el to the <!S an% to sho5 the embass/ proof of his financial

capacit/, he ase% to Gborro5H from Mar'arita the properties in4ol4e% but upon

the con%ition that he 5oul% 'i4e them bac to her upon his arri4al from the <nite%

States! She a%mitte% that RobertoBs commitment to return the properties 5as not

put in 5ritin' because the/ place% trust an% confi%ence in him, an% that 5hile she

ha% spent most of her time in Min%anao since she marrie% in (+., she 5oul%

sometimes come to La <nion to see her mother but she ne4er reall/ ne5 5hether

at one point or another her mother ha% %eman%e% the return of the properties from

Roberto!.)8.)9 She further asserte% that e4en after RobertoBs arri4al from the

1819 Recor%s, pp! 37!

+8+9 Id ! at (0+3(1)!

.)8.)9 $S#, Debruar/ +, ))), pp! 0, 1, (., (0!

A$$! LI"A$IK<E:

Q: Madam witness, why do you know this transferor’s affidavit?

WITNESS:



<nite% States, it 5as Mar'arita 5ho pai% off the ta2es on the sub;ect properties an%

that it 5as onl/ 5hen her health starte% to %eteriorate that Roberto ha% taen up

those obli'ations!.(8.(9 ilariaBs testimon/ ran alon' the same line! Lie Lu-, she

5as a%mitte%l/ present at the e2ecution of the Affi%a4it of $ransfer 5hich too

place at the house she share% 5ith acinto Costales, the notari-in' officer 5ho 5as

A: I was resent when they si!ned, sir"

Q: Who si!ned this?

A: My mother, sir"

Q: And whom?

A: And #o$erto %ai!o, &r", sir"

Q: 'ou said you were resent, whose si!nature aears under the name, #o$erto

%ai!o?

A: #o$erto %ai!o, sir"

Q: 'our $rother?

A: My $rother"

Q: ( ( ( and the si!nature Mar!arita %ai!o, whose si!nature is that?

A: My mother"

( ( ( (

Q: Madam witness, tell the court under what circumstances was that

transferor’s affidavit executed.

A: What do you mean?

Q: Under what circumstances?

A: He ust !orrowed it !ecause he was "oin" to the United #tates, he is "oin"

to show and he wants to use that as evidence that he owns land in the $hili%%ines.

Q: What was the condition of that transfer, since you said you were %resent?

A: He will return it as soon as he will arrive &sic', and that was a"reed u%on,

sir.

Q: Was (o!erto a!le to "o to America?

A: )es, sir.



her o5n brother! She tol% that Roberto at the time ha% 5ante% to tra4el to the <!S!

but %i% not ha4e properties in the Philippines 5hich he coul% use to bac up his

4isa application> as accommo%ation, Mar'arita GlentH him the ta2 %eclarations

co4erin' the properties but 5ith the un%erstan%in' that upon his return he 5oul%

Q: And one of the eviden)e that was used ( ( ( to se)ure a visa were these * ta(

de)+arations of roerties?

A: 'es, sir"

Q: 'ou said that #o$erto %ai!o- romised to return these roerties in the name of

Mar!arita %ai!o" .ow +on! did #o$erto %ai!o stay in Ameri)a?

A: .e did not stay +on!, sir"

Q: .ow +on!?

A: May$e *- to /- months"

Q: And after he has returned from Ameri)a, did he return the tit+es of these

roerties in the name of your mother?

A: We did not know a$out it $e)ause when we )ame to know of- it, it was a+ready

so+d and my mother was surrised to know that it was a+ready so+d"

Q: When did you )ome to know of- it?

A: In 0112 when my $rother died"

( ( ( (

Q: *arlier you said that you were aware of this transferee’s affidavit x x x

A: )es, sir.

Q: +id you act as witness in the transferee’s affidavit?

A: o, - was there only, sir.

Q: #o that is the reason why you have no si"nature x x x as witness?

A: )es, sir.

( ( ( (

Q: Also, you said that the reason why this transferee’s affidavit and the

transferor’s affidavit were executed was !ecause your !rother was "oin" to the

United #tates and he will return this transferee’s affidavit when he comes !ac.



'i4e them bac to Mar'arita! She professe% familiarit/ 5ith the properties

in4ol4e% because one of them 5as actuall/ sittin' close to her o5n propert/!.8.9

Fhile in%ee% at one point at the stan% both of Lu-s an% ilariaBs presence

at the e2ecution of the affi%a4it ha% been put to test in subtle inter;ections b/

respon%entsB counsel to the effect that their names an% si'natures %i% not appear in

the Affi%a4it of $ransfer as 5itnesses, this, to our min%, is of no moment inasmuch

A: )es, sir.

Q/ Was that a"reement %ut in writin"?

A: o, sir.

Q: Why was it not %ut in writin"?

A: He was my !rother and we trusted him so much.

Q: Why did you not as that your !rother %ut it in writin" so that he will not

for"et it?

A: 0ecause of the trust we had with &sic' him, he was my !rother and we

trusted him.

Q: #o you admit that there is no document in writin" to show that that

a"reement was the actual a"reement?

A: one, sir. Emhasis su+ied"-

.(8.(9 $S#, Debruar/ +, ))), pp! (3(0!

.8.9 $S#, March 7, ))), pp! 730!

Q: 3o you know Mar!arita %ai!o 4a$a)un!an?

A: 'es, sir" I know her" She is the sister of my mother, 4+ara"

Q: 3o you know how many )hi+dren does she have si)-?

A: There are three )hi+dren name+y: %u5 %ai!o, #o$erto %ai!o, and 6au+ina %ai!o"

Q: 3o you know the roerties that are su$7e)ts of this )ase?

A: 'es, I know"

Q: Where are these roerties +o)ated?

A: At 6arin!ao and 8a))uit"



as the/ ha% not been calle% to testif/ on the fact of, or on the contents of, the

Affi%a4it of $ransfer or its %ue e2ecution! Rather, their testimon/ 5as offere% to

pro4e the circumstances surroun%in' its e2ecution = the circumstances from 5hich

coul% be %eri4e% the un5ritten un%erstan%in' bet5een Roberto an% Mar'arita that

b/ their act, no absolute transfer of o5nership 5oul% be effecte%! "esi%es, it

5oul% be hi'hl/ unliel/ for Mar'arita to institute the instant complaint if it 5ere

Q: These roerties in 6arin!ao, where are these roerties in re+ation to the 4resta

9+a and the Mark Theresa Aartments? Are these roerties near those sites?

A: 'es sir, they are very near ea)h other"

Q: Now, do you know the su$7e)t roerties, one of whi)h is west of the nationa+road and )orner art of 4resta 3e+ Mar?

A: 'es, I know it"

Q: Why do you know it?

A: 8e)ause the 4resta 3e+ Mar and ours is the 4resta 9+a, they are very near ea)h

other"

Q: What a$out the roerty east of the nationa+ road near the Mark Theresa

Aartment, ( ( ( where is this roerty?

A: It is east of the road ( ( ( South of the Mark Theresa Aartment"

( ( ( (

Q: 'ou said that these roerties were owned $y Mar!arita %ai!o 4a$a)un!an" 3o

you know how these roerties were transferred to #o$erto %ai!o, &r"?

A: I know it"

Q: Why do you know?

A: 8e)ause the aers were made $y my $rother, &a)into 4osta+es, in our house"

Q: When you say &a)into 4osta+es, is this the same erson who was on)e a 7ud!e of8a!u+in Tria+ 4ourt?

A: 9h, yes

Q: Where is he now?

A: .e is a+ready dead"

( ( ( (



in%ee% her intention to 4est in Roberto, b/ 4irtue of the Affi%a4it of $ransfer,

absolute o5nership o4er the co4ere% properties!

It is %e%ucible from the fore'oin' that the inscription of RobertoBs name in

the Affi%a4it of $ransfer as Mar'aritaBs transferee is not for the purpose of

Q: ow, will you tell the court why was this document &sic' executed !y

Mar"arita 1ai"o and (o!erto 1ai"o.

A: When (o!erto 1ai"o wanted to "o to America, he has no %ro%erties in his

name. 2hat is why his mother lent him that document to show that he has %ro%erties

in the $hili%%ines, !ut after he "oes to America those %ro%erties will "o !ac to hismother.

( ( ( (

Q: .ow far is your house to that of Mar!arita 4a$a)un!an?

Atty" %i$ati;ue: 'our .onor, for the re)ord, that is a$out from the town ha++ to that

+a)e four /- ki+ometers ( ( ( I think that wou+d $e the aro(imate distan)e"

( ( ( (

Q: At the time &3acinto 4ostales' was a ud"e and he executed this affidavit

sometime in 5678, where were you if you still remem!er?

A: - was in the house of my !rother &3acinto'.

Q: )ou 9were stayin" in ust one house?

A: )es, sir.

Q: And you said you were a witness to the execution of this transferee’s

affidavit?

A: )es, sir.

Q: -f you were a witness, do you remem!er if you si"ned a document which will show that you were a witness?

A: o, sir.

Q:)ou did not si"n?

A: o. sir.

( ( ( (



transferrin' o5nership to him but onl/ to enable him to hol% the propert/ in trust

for Mar'arita! In%ee%, in the face of the cre%ible an% strai'htfor5ar% testimon/ of

the t5o 5itnesses, Lu- an% ilaria, the probati4e 4alue of the o5nership recor%

forms in the names of respon%ents, to'ether 5ith the testimon/ of their 5itness

from the municipal assessorBs office 5ho authenticate% sai% forms, are utterl/

minimal to sho5 RobertoBs o5nership! It suffices to sa/ that respon%ents %i% not

bother to offer e4i%ence that 5oul% %irectl/ refute the statements ma%e b/ Lu- an%

Q: *arlier you said that you now for a fact that there was an a"reement that

Mar"arita 1ai"o si"ned this in favor of (o!erto 1ai"o !ecause (o!erto 1ai"o at that

time &was' "oin" to the United #tates, and (o!erto 1ai"o will !e usin" this

2ransferee’s Affidavit?

A: )es, sir.

Q: +o you now, madam witness, if that was reduced into writin"?

( ( ( (

A: 2hat is a ver!al a"reement.

Q: .ow did you )ome to know that?

A: I was in the house"

Q: In the house of Mar!arita %ai!o?

A: 'es, sir, $e)ause she is my auntie

Q: Are you sti++ stayin! there fu++ time in the house of Mar!arita %ai!o?

A: Sometimes on+y"

( ( ( (

Q: So that means that sometimes, you were not there" It )ou+d $e that Mrs" %ai!o

to+d #o$erto %ai!o that that was his- roerty a+ready"

A: No, it )annot $e $e)ause Mar!arita %ai!o has two dau!hters, %u5 %ai!o and

6au+ina %ai!o"

Q: So that is your oinion?

A: 'es, sir" Emhasis su+ied"-



ilaria in open court on the circumstances un%erl/in' the (+.1 Affi%a4it of

$ransfer!

As a trustee of a resultin' trust, therefore, Roberto, lie the trustee of an

e2press passi4e trust, is merel/ a %epositar/ of le'al title ha4in' no %uties as to the

mana'ement, control or %isposition of the propert/ e2cept to mae a con4e/ance

5hen calle% upon b/ the cestui 7ue trust..78.79 ence, the sales he entere% into

5ith respon%ents are a 5ron'ful con4ersion of the trust propert/ an% a breach of

the trust! $he uestion is: Ma/ respon%ents no5 be compelle% to recon4e/ thesub;ect properties to petitioner Fe rule in the affirmati4e!

Respon%ents posit that petitionerBs claim ma/ ne4er be enforce% a'ainst

them as the/ ha% purchase% the properties from Roberto for 4alue an% in 'oo%

faith! $he/ also claim that, at an/ rate, petitionerBs cause of action has accrue%

5a/ bac in (+.1 upon the e2ecution of the Affi%a4it of $ransfer an%, hence, 5ith

the 1 lon' /ears that since passe%, petitionerBs claim ha% lon' become stale not

onl/ on account of laches, but also un%er the rules on e2tincti4e prescription

'o4ernin' a resultin' trust! Fe %o not a'ree!

4irst" fun%amental is the rule in lan% re'istration la5 that the issue of

5hether the bu/er of realt/ is in 'oo% or ba% faith is rele4ant onl/ 5here the

sub;ect of the sale is re'istere% lan% an% the purchase 5as ma%e from the re'istere%

.78.79 0. Am ur %, J(., citin' ocing v. ocing , 616 #E% 6).!



o5ner 5hose title to the lan% is clean, in 5hich case the purchaser 5ho relies on

the clean title of the re'istere% o5ner is protecte% if he is a purchaser in 'oo% faith

an% for 4alue!.68.69 Since the properties in uestion are unre'istere% lan%s,

respon%ents purchase% the same at their o5n peril! $heir claim of ha4in' bou'ht

the properties in 'oo% faith, i.e." 5ithout notice that there is some other person 5ith

a ri'ht to or interest therein, 5oul% not protect them shoul% it turn out, as it in fact

%i% in this case, that their seller, Roberto, ha% no ri'ht to sell them!

'econd" the in4ocation of the rules on limitation of actions relati4e to aresultin' trust is not on point because the resultin' trust relation bet5een Mar'arita

an% Roberto ha% been e2tin'uishe% b/ the latterBs %eath! A trust, it is sai%,

terminates upon the %eath of the trustee, particularl/ 5here the trust is personal to

him!.8.9 "esi%es, prescription an% laches, in respect of this resultin' trust

relation, har%l/ can impair petitionerBs cause of action! On the one han%, in

accor%ance 5ith Article ((66..8..9 of the Ci4il Co%e, an action for recon4e/ance

to enforce an implie% trust in oneBs fa4or prescribes in ten ?()@ /ears from the time

.68.69 'pouses Ra)os v. Re)es" 66. Phil 7, ) ?))7@, citin' 'ales v. Court of Appeals, ((

SCRA 11 ?(++@> David v. #andin" !R! #os! L3617, L36+0(, L36+0(. an% 6+.10, April 1,

(+10, (6+ SCRA (6), ()!

.8.9 Canezo v. Rojas, supra note 7), at 0!

..8..9 Art! ((66! $he follo5in' actions must be brou'ht 5ithin ten /ears from the time the ri'ht

of action accrues:

?(@ <pon a 5ritten contract>

?@ <pon an obli'ation create% b/ la5>

?7@ <pon a ;u%'ment!



the ri'ht of action accrues, as it is base% upon an obli'ation create% b/ la5!.08.09 It

sets in from the time the trustee performs uneui4ocal acts of repu%iation

amountin' to an ouster of the cestui 7ue trust 5hich are ma%e no5n to the latter ..1

8.19 In this case, it 5as the (++ sale of the properties to respon%ents that

comprise% the act of repu%iation 5hich, ho5e4er, 5as ma%e no5n to Mar'arita

onl/ in (++ but ne4ertheless impelle% her to institute the action in (++. = still

5ell 5ithin the prescripti4e perio%! ar%l/ can be consi%ere% as act of repu%iation

RobertoBs open court %eclaration 5hich he ma%e in the (+0+ a%option procee%in's

in4ol4in' respon%ents to the effect that he o5ne% the sub;ect properties,.+8.+9 nor

e4en the fact that he in (+00 ha% entere% into a lease contract on one of the

%ispute% properties 5hich contract ha% been sub;ect of a (++. %ecision of the Court

of Appeals!0)80)9 $hese %o not suffice to constitute uneui4ocal acts in

repu%iation of the trust!

On the other han%, laches, bein' roote% in euit/, is not al5a/s to be applie%

strictl/ in a 5a/ that 5oul% obliterate an other5ise 4ali% claim especiall/ bet5een

bloo% relati4es! $he e2istence of a confi%ential relationship base% upon

consan'uinit/ is an important circumstance for consi%eration> hence, the %octrine

.08.09 eirs of Maria $da. de $ega v. Court of Appeals, !R! #o! +7)0, ul/ (, (++(, (++

SCRA (.1, (00> Tale v. Court of Appeals, !R! #o! ()()1, April 7, (++, )1 SCRA ..!

.18.19 ,ilapil v. #riones, !R! #o! ()(0 ?Resolution on the Motion for Reconsi%eration@,

Debruar/ , ))0, (6 SCRA (+0> Canezo v. Rojas, supra note 7), at 37> Ra!os v. Ra!os,(1 Phil! +7 ?(+06@!

.+8.+9 &ecision of the Municipal $rial Court of San Dernan%o, La <nion, "ranch I in SP!

PROC! #o! (+7, CA rollo, pp! 7.737.!

0)80)9 &ecision of the Court of Appeals in CA3!R! SP #o! 7.), id ! at 70(3701!



is not to be applie% mechanicall/ as bet5een near relati4es! 0(80(9 Adaza v. Court

of Appeals0809 hel% that the relationship bet5een the parties therein, 5ho 5ere

siblin's, 5as sufficient to e2plain an% e2cuse 5hat 5oul% other5ise ha4e been a

lon' %ela/ in enforcin' the claim an% the %ela/ in such situation shoul% not be as

strictl/ construe% as 5here the parties are complete stran'ers vis-a-vis each other>

thus, reliance b/ one part/ upon his bloo% relationship 5ith the other an% the trust

an% confi%ence normall/ connote% in our culture b/ that relationship shoul% not be

taen a'ainst him! $oo, 'otto v. Teves078079 rule% that the %octrine of laches is not

strictl/ applie% bet5een near relati4es, an% the fact that the parties are connecte%

b/ ties of bloo% or marria'e ten%s to e2cuse an other5ise unreasonable %ela/!

Third" there is a fun%amental principle in a'enc/ that 5here certain propert/

entruste% to an a'ent an% impresse% b/ la5 5ith a trust in fa4or of the principal is

5ron'full/ %i4erte%, such trust follo5s the propert/ in the han%s of a thir% person

an% the principal is or%inaril/ entitle% to pursue an% reco4er it so lon' as the

propert/ can be trace% an% i%entifie%, an% no superior euities ha4e inter4ene%!

$his principle is actuall/ one of trusts, since the 5ron'ful con4ersion 'i4es rise to

a constructi4e trust 5hich pursues the propert/, its pro%uct or procee%s, an%

permits the beneficiar/ to reco4er the propert/ or obtain %ama'es for the 5ron'ful

con4ersion of the propert/! Aptl/ calle% the Gtrust pursuit rule,H it applies 5hen a

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

0809 Id !

078079 (0 Phil! 767 ?(+01@!



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

form!068069

ence, a trust 5ill follo5 the propert/ = throu'h all chan'es in its state an%

form as lon' as such propert/, its pro%ucts or its procee%s, are capable of

i%entification, e4en into the han%s of a transferee other than a *ona fide purchaser

for 4alue, or restitution 5ill be enforce% at the election of the beneficiar/ throu'h

recourse a'ainst the trustee or the transferee personall/! $his is 'roun%e% on the

principle in propert/ la5 that o5nership continues an% can be asserte% b/ the trueo5ner a'ainst an/ 5ithhol%in' of the ob;ect to 5hich the o5nership pertains,

5hether such ob;ect of the o5nership is foun% in the han%s of an ori'inal o5ner or

a transferee, or in a %ifferent form, as lon' as it can be i%entifie%!0809

Accor%in'l/, the person to 5hom is ma%e a transfer of trust propert/ constitutin' a

5ron'ful con4ersion of the trust propert/ an% a breach of the trust, 5hen not

protecte% as a *ona fide purchaser for 4alue, is himself liable an% accountable as a

constructi4e trustee! $he liabilit/ attaches at the moment of the transfer of trust

propert/ an% continues until there is full restoration to the beneficiar/! $hus, the

transferee is char'e% 5ith, an% can be hel% to the performance of the trust, euall/

5ith the ori'inal trustee, an% he can be compelle% to e2ecute a recon4e/ance!0.80.9

068069 See 0. Am ur J+, p! 7).

0809 See 0. Am ur J+, pp! 7).37)0

0.80.9 See 0. Am ur J+0, pp! 7((37(!



$his scenario is characteristic of a constructi4e trust impose% b/ Article

(6.008009 of the Ci4il Co%e, 5hich impresses upon a person obtainin' propert/

throu'h mistae or frau% the status of an implie% trustee for the benefit of the

person from 5hom the propert/ comes! Petitioner, in la/in' claim a'ainst

respon%ents 5ho are conce%e%l/ transferees 5ho professe% ha4in' 4ali%l/ %eri4e%

their o5nership from Roberto, is in effect enforcin' a'ainst respon%ents a

constructi4e trust relation that arose b/ 4irtue of the 5ron'ful an% frau%ulent

transfer to them of the sub;ect properties b/ Roberto!

Aznar #rother Realt) Co. v. A)ing"018019 citin' #uan $da. de %sconde v.

Court of Appeals"0+80+9 e2plaine% this form of implie% trust as follo5s:

A %eeper anal/sis of Article (6. re4eals that it is not a trust in the

technical sense for in a t/pical trust, confi%ence is repose% in one person 5ho is

name% a trustee for the benefit of another 5ho is calle% the cestui 7ue trust,respectin' propert/ 5hich is hel% b/ the trustee for the benefit of the cestui 7ue

trust! A constructi4e trust, unlie an e2press trust, %oes not emanate from, or'enerate a fi%uciar/ relation! Fhile in an e2press trust, a beneficiar/ an% a trustee

are line% b/ confi%ential or fi%uciar/ relations, in a constructi4e trust, there isneither a promise nor an/ fi%uciar/ relation to spea of an% the so3calle% trustee

neither accepts an/ trust nor inten%s hol%in' the propert/ for the beneficiar/!

2 2 2 2

2 2 2 8C9onstructi4e trusts are create% b/ the construction of euit/ in or%er tosatisf/ the %eman%s of ;ustice an% pre4ent un;ust enrichment! $he/ arise contrar/

to intention a'ainst one 5ho, b/ frau%, %uress or abuse of confi%ence, obtains or

008009 Art! (6.! If propert/ is acuire% throu'h mistae or frau%, the person obtainin' it is, b/force of la5, consi%ere% a trustee of an implie% trust for the benefit of the person from 5hom the

propert/ comes!

018019 6+0 Phil! 011, 0++ ?))@!

0+80+9 'upra note 7!



hol%s the le'al ri'ht to propert/ 5hich he ou'ht not, in euit/ an% 'oo% conscience,

to hol%!1)81)9

It is settle% that an action for recon4e/ance base% on a constructi4e implie%trust prescribes in () /ears lie5ise in accor%ance 5ith Article ((66 of the Ci4il

Co%e! et not lie in the case of a resultin' implie% trust an% an e2press trust,

prescription super4enes in a constructi4e implie% trust e4en if the trustee %oes not

repu%iate the relationship! In other 5or%s, repu%iation of sai% trust is not a

con%ition prece%ent to the runnin' of the prescripti4e perio%!1(81(9

As to 5hen the prescripti4e perio% commences to run, Crisosto!o v.

&arcia1819 eluci%ate% as follo5s:

Fhen propert/ is re'istere% in anotherNs name, an implie% or constructi4e

trust is create% b/ la5 in fa4or of the true o5ner! $he action for recon4e/ance of

the title to the ri'htful o5ner prescribes in () /ears from the issuance of the title!

An action for recon4e/ance base% on implie% or constructi4e trust prescribes inten /ears from the alle'e% frau%ulent re'istration or %ate of issuance of thecertificate of title o4er the propert/!

It is no5 5ell settle% that the prescripti4e perio% to reco4er propert/obtaine% b/ frau% or mistae, 'i4in' rise to an implie% trust un%er Art! (6. of the

Ci4il Co%e, is () /ears pursuant to Art! ((66! T01s tenye#r pres2r1pt13e per1%d

be1ns t% rn 4r%+ t0e d#te t0e #d3erse p#rty repd1#tes t0e 1+p-1ed trst,

1)81)9 Aznar #rothers Realt) Co. v. A)ing , supra note 01, at 0++31))!

1(81(9 #uan $da. de %sconde v. Court of Appeals, supra note 7> Aznar #rothers Realt) Co. v.

A)ing , id.

<=><= 20@ 6hi+" /* =BB@- "



50120 repd1#t1%n t#6es p-#2e 50en t0e #d3erse p#rty re1sters t0e -#nd.17

8179

Drom the fore'oin', it is clear that an action for recon4e/ance un%er a

constructi4e implie% trust in accor%ance 5ith Article (6. %oes not prescribe

unless an% until the lan% is re'istere% or the instrument affectin' the same is

inscribe% in accor%ance 5ith la5, inasmuch as it is 5hat bin%s the lan% an%

operates constructi4e notice to the 5orl%!168169 In the present case, ho5e4er, the

lan%s in4ol4e% are conce%e%l/ unre'istere% lan%s> hence, there is no 5a/ b/ 5hich

Mar'arita, %urin' her lifetime, coul% be notifie% of the furti4e an% frau%ulent salesma%e in (++ b/ Roberto in fa4or of respon%ents, e2cept b/ actual notice from

Pe%ro himself in Au'ust (++! ence, it is from that %ate that prescription be'an

to toll! $he filin' of the complaint in Debruar/ (++. is 5ell 5ithin the prescripti4e

perio%! Dinall/, such %ela/ of onl/ si2 ?.@ months in institutin' the present action

har%l/ suffices to ;ustif/ a fin%in' of ine2cusable %ela/ or to create an inference

that Mar'arita has allo5e% her claim to stale b/ laches!

7HEREFORE, the Petition is GRANTED! $he October (7, )).

&ecision of the Court of Appeals in CA3!R! CV #o! 070(, affirmin' the ul/ ,

))( ;u%'ment of the Re'ional $rial Court of La <nion, "ranch 77 in Ci4il Case

#o! ()7(3", is REVERSED #nd SET ASIDE, an% a ne5 one is entere% ?a@

178179 Id. at 07, citin' Austria-Magat v. Court of Appeals" 6. Phil! .7, 01 ?))@

?Emphasis supplie%!@> ,ascual v. Court of Appeals" !R! #o! ((+, Au'ust (, ))7, 6)+

SCRA (), ((7> 'pouses Alfredo v. 'pouses #orras" 6 Phil! (01, )6 ?))7@ > $da. de Delgado v. Court of Appeals" 6(. Phil! .7, 06 ?))(@> $illanueva-Mijares v. Court of Appeals"

71. Phil! , .. ?)))@!

168169 'pouses A*rigo v. De $era, 60. Phil! .6(, .7 ?))6@!



%irectin' the cancellation of the ta2 %eclarations co4erin' the sub;ect properties in

the name of Roberto &! Lai'o an% his transferees> ?b@ nullif/in' the %ee%s of sale

e2ecute% b/ Roberto &! Lai'o in fa4or of respon%ents Pe%ro Ro/ Lai'o an%

Marilou Lai'o> an% ?c@ %irectin' sai% respon%ents to e2ecute recon4e/ance in fa4or

of petitioner!

SO ORDERED.

DIOSDADO M. !ERALTA

Associate ustice

7E CONCUR :

ANTONIO T. CAR!IO

Associate ustice



!RESBITERO $. VELASCO, $R. ARTURO D. BRION

Associate ustice Associate ustice

Chairperson

MARIA LOURDES !. A. SERENO

Associate ustice

ATTESTATION

I attest that the conclusions in the abo4e &ecision ha% been reache% in

consultation before the case 5as assi'ne% to the 5riter of the opinion of the

CourtBs &i4ision!



!RESBITERO $. VELASCO, $R.

Associate ustice

$hir% &i4ision, Chairperson

CERTIFICATION

Pursuant to Section (7, Article VIII of the Constitution an% the &i4ision

ChairpersonBs Attestation, I certif/ that the conclusions in the abo4e &ecision ha%

been reache% in consultation before the case 5as assi'ne% to the 5riter of the

opinion of the CourtBs &i4ision!

RENATO C. CORONA

Chief ustice

Est of Margarita vs. Laigo

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