[G.R. No. 144773.

May 16, 2005]

AZNAR BROTHERS REALTY COMPANY, petitioner, vs. LAURENCIO AYING, IN HIS OWN BEHALF AND IN BEHALF OF THE
OTHER HEIRS OF EMILIANO AYING, PAULINO AYING, IN HIS OWN BEHALF AND IN BEHALF OF THE OTHER HEIRS OF
SIMEON AYING, AND WENCESLAO SUMALINOG, IN HIS OWN BEHALF AND IN BEHALF OF THE OTHER HEIRS OF
ROBERTA AYING, respondents.

DECISION
AUSTRIA-MARTINEZ, J.:

This resolves the petition for review on certiorari seeking the modification of the Decision[1] of the Court of Appeals (CA) dated
March 7, 2000 which affirmed with modification the Decision of the Regional Trial Court (RTC) of Lapu-Lapu City, Branch 27 in Civil
Case No. 2930-L; and the Resolution dated August 2, 2000 denying petitioners motion for reconsideration of the aforementioned
decision.
The antecedent facts are as follows:
The disputed property is Lot No. 4399 with an area of 34,325 square meters located at Dapdap, Lapu-Lapu City. Crisanta Maloloy-
on petitioned for the issuance of a cadastral decree in her favor over said parcel of land. After her death in 1930, the Cadastral Court
issued a Decision directing the issuance of a decree in the name of Crisanta Maloloy-ons eight children, namely: Juan, Celedonio,
Emiliano, Francisco, Simeon, Bernabe, Roberta and Fausta, all surnamed Aying. The certificate of title was, however, lost during the
war.
Subsequently, all the heirs of the Aying siblings executed an Extra-Judicial Partition of Real Estate with Deed of Absolute Sale
dated March 3, 1964, conveying the subject parcel of land to herein petitioner Aznar Brothers Realty Company. Said deed was
registered with the Register of Deeds of Lapu-Lapu City on March 6, 1964 under Act No. 3344 (the law governing registration for
unregistered land), and since then, petitioner had been religiously paying real property taxes on said property.
In 1988, herein petitioner filed a Petition for Reconstitution of the Original Title as the original title over the subject property had
been lost during the war. On April 12, 1988, the court granted said petition, thereby directing the Register of Deeds of Lapu-Lapu City to
issue a reconstituted title in the name of the abovementioned Aying siblings. Thus, Original Certificate of Title (OCT) No. RO-2856 was
issued.
In 1991, petitioner, claiming to be the rightful owner of the subject property, sent out notices to vacate, addressed to persons
occupying the property. Unheeded, petitioner then filed a complaint for ejectment against the occupants before the Metropolitan Trial
Court (MTC), Lapu-Lapu City.
 On February 1, 1994, the MTC ordered the occupants to vacate the property. The case eventually reached this Court, docketed as
G.R. No. 128102, entitled Aznar Brothers Realty Company vs. Court of Appeals, Luis Aying, Demetrio Sida, Felomino Augusto,
Federico Abing, and Romeo Augusto.[2] On March 7, 2000, a Decision was promulgated in favor of herein petitioner, declaring it as the
rightful possessor of the parcel of land in question.
Meanwhile, herein respondents, along with other persons claiming to be descendants of the eight Aying siblings, all in all
numbering around 220 persons, had filed a complaint for cancellation of the Extra-Judicial Partition with Absolute Sale, recovery of
ownership, injunction and damages with the RTC of Lapu-Lapu City. The complaint was dismissed twice without prejudice. Said
complaint was re-filed on August 19, 1993, docketed as Civil Case No. 2930-L.
In their amended complaint, herein respondents (plaintiffs before the RTC) alleged that: they are co-owners of subject property,
being descendants of the registered owners thereof under OCT No. RO-2856; they had been in actual, peaceful, physical, open,
adverse, continuous and uninterrupted possession in concept of owner of subject parcel of land since time immemorial; their
possession was disturbed only in the last quarter of 1991 when some of them received notices to vacate from petitioner and several
weeks thereafter, earthmoving equipment entered the disputed land, bulldozing the same and destroying plants, trees and concrete
monuments (mohon); respondents discovered that such activities were being undertaken by petitioner together with Sta. Lucia Realty
and Development, Inc.; petitioner claimed to be the owner of subject property by virtue of an extra-judicial partition of real estate with
deed of absolute sale executed in petitioners favor by the alleged heirs of Crisanta Maloloy-on; the aforementioned extra-judicial
partition of real estate with deed of absolute sale is a fraud and is null and void ab initio because not all the co-owners of subject
property affixed their signature on said document and some of the co-owners who supposedly signed said document had been dead at
the time of the execution thereof; petitioner entered subject land in bad faith, knowing fully well that it did not have any right to the land
and used force, threat and intimidation against respondents; and they suffered moral damages. [3]
Petitioner (defendant before the RTC) filed its Answer, denying that respondents are the lawful owners of subject parcel of land by
virtue of their being descendants or heirs of the registered owners of subject property. Instead, petitioner alleged that it had been in
actual possession of subject land as owner thereof by virtue of the extra-judicial partition of real property and deed of absolute sale
executed in its favor; that in fact, it had been paying taxes thereon religiously; that it tolerated about 6 persons to live on said land but
said persons were eventually ejected by court order. Petitioner then raised the affirmative defenses of failure to state cause of action
and prescription, as it took respondents 27 years, 10 months and 27 days to file the action to recover subject property, when an action
to recover property based on an implied trust should be instituted within 4 years from discovery of the fraud. [4]
In the Pre-Trial Order dated January 30, 1995 of the RTC, the issues were narrowed down to the following:

1. Whether or not the plaintiffs [herein respondents] are the heirs of the registered owners of Lot No. 4399.

2. Whether or not plaintiffs are the owners of Lot No. 4399.

3. Whether or not the defendant Aznar [herein petitioner] is estopped to make any claim on Lot No. 4399.

4. Whether or not the defendant Aznar is a builder in bad faith.

 5. Whether or not the defendants are liable for damages and attorneys fees in favor of the plaintiffs.

6. Whether or not the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale is valid and had, in effect, validly conveyed to
defendant Aznar Lot No. 4399.

7. Whether or not the plaintiffs action has prescribed.[5]

After trial, the RTC rendered a Decision dated July 4, 1997, ruling that respondents evidence failed to prove that the extra-judicial
partition with deed of absolute sale was a totally simulated or fictitious contract and concluded that said document is valid, thus,
effectively conveying to petitioner the property in question. It further held that respondents action had prescribed in that the action is
considered as one for reconveyance based on implied or constructive trust, it prescribed in 10 years from the registration of the deed on
March 6, 1964; and if the action is considered as one for annulment of contract on the ground of fraud, it should have been filed within 4
years from discovery of the fraud. The trial court also ruled that respondents failed to present any admissible proof of filiation, hence,
they were not able to prove that they are indeed heirs of the eight Aying siblings who appear as the registered owners under OCT No.
RO-2856.
The dispositive portion of the RTC Decision reads as follows:

WHEREFORE, judgment is hereby rendered dismissing the amended complaint on the ground of prescription, and declaring the Extra-
Judicial Partition of Real Estate with Deed of Absolute Sale dated March 3, 1964 as valid and binding, adjudging that Lot 4399 with an
area of 34,325 square meters located at Dapdap, Mactan, Lapu-Lapu City had been validly conveyed to and in favor of Aznar Brothers
Realty Company, and directing the Register of Deeds of Lapu-Lapu City to register the above-mentioned deed in accordance with law
and to cancel Original Certificate of Title No. RO-2856, and to issue a transfer certificate of title in the name of Aznar Brothers Realty
Company upon payment of the necessary registration fees pursuant thereto.

The Writ of Preliminary Injunction issued in this case is hereby ordered dissolved.

The Motion for Contempt filed by the plaintiffs against defendants is dismissed for want of factual and legal basis.

Costs against the plaintiffs.

SO ORDERED.[6]

Herein respondents appealed the foregoing decision to the CA and on March 7, 2000, said court promulgated its Decision, the
dispositive portion of which is reproduced hereunder:

THE FOREGOING CONSIDERED, the contested Decision while AFFIRMED is hereby MODIFIED. The heirs of Emiliano Aying,
Simeon Aying and Roberta Aying are hereby declared as the lawful owners of the contested property but equivalent only to 3/8.
SO ORDERED.

In modifying the RTC judgment, the CA ratiocinated that an action for recovery of possession of registered land never prescribes in
view of the provision of Section 44, Act No. 496 (now Sec. 47, PD 1520), to the effect that no title to registered land in derogation to that
of a registered owner shall be acquired by prescription. The CA further ruled that even if the action is deemed to be based on implied
trust, prescription did not begin to run since there is no evidence that positive acts of repudiation were made known to the heirs who did
not participate in the execution of the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale. Thus, striking down the RTCs
ruling that the respondents complaint is dismissible on the ground of prescription, the CA held instead that herein respondents action
had not prescribed but upheld the validity of the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale, except as to the
shares of the heirs of Emiliano, Simeon and Roberta, who did not participate in the execution of said document.
Herein petitioners motion for reconsideration of the CA decision was denied per Resolution dated August 2, 2000.
Hence, the present petition for review on certiorari assailing the CA decision on the following grounds:
I

THE COURT OF APPEALS ERRED IN FAILING TO APPLY THE RULE THAT AN HEIR OF THE ORIGINAL REGISTERED OWNER
MAY LOSE HIS RIGHT TO RECOVER A TITLED PROPERTY BY REASON OF LACHES;

II

THE COURT OF APPEALS ERRED IN FAILING TO APPLY THE RULE THAT THE ACT OF REGISTRATION OF THE DEED OF
PARTITION WITH SALE MAY BE CONSIDERED AN UNEQUIVOCAL REPUDIATION OF THE TRUST GIVING RISE TO
PRESCRIPTION;

III

THE COURT OF APPEALS ERRED IN FAILING TO APPLY THE PROVISIONS OF ARTICLE 1104 OF THE CIVIL CODE TO THE
EFFECT THAT IN THE ABSENCE OF BAD FAITH OR FRAUD, THE PARTITION WITH PRETERITION OF ANY COMPULSORY
HEIR SHALL NOT BE RESCINDED.[7]

In their Comment, respondents argue that this case is an action to declare as null and void the Extra-Judicial Partition of Real
Estate with Deed of Absolute Sale, hence, under Article 1410 of the Civil Code, an action for declaration of an inexistent contract does
not prescribe. Respondents further posit that the principle of laches should be applied against petitioner and not against them, as they
(respondents) had been in actual possession of the subject property, while petitioner merely brought action to eject them more than 29
years after the alleged execution of the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale. They also refuted petitioners
arguments regarding the application of the principles of implied and constructive trusts in this case.
 At the outset, it should be stressed that not all the plaintiffs who filed the amended complaint before the trial court had been
impleaded as respondents in the present petition. The only parties impleaded are the heirs of Emiliano, Simeon and Roberta Aying,
whom the CA adjudged as owners of a 3/8 portion of the land in dispute for not having participated in the execution of the Extra-Judicial
Partition of Real Estate with Deed of Absolute Sale.
It is significant to note that herein petitioner does not question the CA conclusion that respondents are heirs of the aforementioned
three Aying siblings. Hence, the trial court and appellate courts findings that the Extra- Judicial Partition of Real Estate with Deed of
Absolute Sale was not forged nor simulated and that the heirs of Emiliano, Simeon and Roberta Aying did not participate in the
execution thereof, are now beyond cavil.
The issues raised by petitioner for the Courts resolution are (1) whether or not respondents cause of action is imprescriptible; and
(2) if their right to bring action is indeed imprescriptible, may the principle of laches apply.
Respondents alleged in their amended complaint that not all the co-owners of the land in question signed or executed the
document conveying ownership thereof to petitioner and made the conclusion that said document is null and void. We agree with the
ruling of the RTC and the CA that the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale is valid and binding only as to
the heirs who participated in the execution thereof, hence, the heirs of Emiliano, Simeon and Roberta Aying, who undisputedly did not
participate therein, cannot be bound by said document.
However, the facts on record show that petitioner acquired the entire parcel of land with the mistaken belief that all the heirs have
executed the subject document. Thus, the trial court is correct that the provision of law applicable to this case is Article 1456 of the Civil
Code which states:

ART. 1456. If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an
implied trust for the benefit of the person from whom the property comes.

In Vda. De Esconde vs. Court of Appeals,[8] the Court expounded thus:

Construing this provision of the Civil Code, in Philippine National Bank v. Court of Appeals, the Court stated:

A deeper analysis of Article 1456 reveals that it is not a trust in the technical sense for in a typical trust, confidence is reposed in one
person who is named a trustee for the benefit of another who is called the cestui que trust, respecting property which is held by the
trustee for the benefit of the cestui que trust. A constructive trust, unlike an express trust, does not emanate from, or generate a
fiduciary relation. While in an express trust, a beneficiary and a trustee are linked by confidential or fiduciary relations, in a constructive
trust, there is neither a promise nor any fiduciary relation to speak of and the so-called trustee neither accepts any trust nor intends
holding the property for the beneficiary.[9]

The concept of constructive trusts was further elucidated in the same case, as follows:
. . . implied trusts are those which, without being expressed, are deducible from the nature of the transaction as matters of intent or
which are superinduced on the transaction by operation of law as matters of equity, independently of the particular intention of the
parties. In turn, implied trusts are either resulting or constructive trusts. These two are differentiated from each other as follows:

Resulting trusts are based on the equitable doctrine that valuable consideration and not legal title determines the equitable title or
interest and are presumed always to have been contemplated by the parties. They arise from the nature of circumstances of the
consideration involved in a transaction whereby one person thereby becomes invested with legal title but is obligated in equity to hold
his legal title for the benefit of another. On the other hand, constructive trusts are created by the construction of equity in order to satisfy
the demands of justice and prevent unjust enrichment. They arise contrary to intention against one who, by fraud, duress or abuse of
confidence, obtains or holds the legal right to property which he ought not, in equity and good conscience, to hold. [10] (Emphasis
supplied)

Based on such concept of constructive trusts, the Court ruled in said case that:

The rule that a trustee cannot acquire by prescription ownership over property entrusted to him until and unless he repudiates the trust,
applies to express trusts and resulting implied trusts. However, in constructive implied trusts, prescription may supervene even if the
trustee does not repudiate the relationship. Necessarily, repudiation of said trust is not a condition precedent to the running of the
prescriptive period.[11]

The next question is, what is the applicable prescriptive period?

In Amerol vs. Bagumbaran,[12] the Court expounded on the prescriptive period within which to bring an action for reconveyance of
property based on implied or constructive trust, to wit:

. . . under the present Civil Code, we find that just as an implied or constructive trust is an offspring of the law (Art. 1456, Civil Code), so
is the corresponding obligation to reconvey the property and the title thereto in favor of the true owner. In this context, and vis--vis
prescription, Article 1144 of the Civil Code is applicable.

Article 1144. The following actions must be brought within ten years from the time the right of action accrues:

(1) Upon a written contract;

(2) Upon an obligation created by law;
(3) Upon a judgment.

xxx xxx xxx

An action for reconveyance based on an implied or constructive trust must perforce prescribe in ten years and not otherwise. A long line
of decisions of this Court, and of very recent vintage at that, illustrates this rule. Undoubtedly, it is now well-settled that an action for
reconveyance based on an implied or constructive trust prescribes in ten years from the issuance of the Torrens title over the
property.[13]

It has also been ruled that the ten-year prescriptive period begins to run from the date of registration of the deed or the date of the
issuance of the certificate of title over the property, but if the person claiming to be the owner thereof is in actual possession of the
property, the right to seek reconveyance, which in effect seeks to quiet title to the property, does not prescribe. [14]
In the present case, respondents Wenceslao Sumalinog, an heir of Roberta Aying; Laurencio Aying, an heir of Emiliano Aying; and
Paulino Aying, an heir of Simeon Aying, all testified that they had never occupied or been in possession of the land in
dispute.[15] Hence, the prescriptive period of ten years would apply to herein respondents.
The question then arises as to the date from which the ten-year period should be reckoned, considering that the Extra-Judicial
Partition of Real Estate with Deed of Absolute Sale was registered under Act No. 3344 and not under Act No. 496 (Land Registration
Act), despite the fact the land in dispute was already titled under Act No. 496 in the names of the Aying siblings at the time the subject
document was executed.
In Spouses Abrigo vs. De Vera,[16] it was held that registration of instruments must be done in the proper registry, in order to affect
and bind the land and, thus, operate as constructive notice to the world.[17] Therein, the Court ruled:

x x x If the land is registered under the Land Registration Act (and has therefore a Torrens Title), and it is sold but the subsequent sale
is registered not under the Land Registration Act but under Act 3344, as amended, such sale is not considered REGISTERED x x x .[18]

In this case, since the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale was registered under Act No. 3344 and not
under Act No. 496, said document is deemed not registered. Accordingly, the ten-year prescriptive period cannot be reckoned from
March 6, 1964, the date of registration of the subject document under Act No. 3344. The prescriptive period only began to run from the
time respondents had actual notice of the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale.
The only evidence on record as to when such prescriptive period commenced as to each of the respondents are Wenceslao
Sumalinogs (heir of Roberta Aying) testimony that about three years after 1964, they already learned of the existence of the Extra-
Judicial Partition of Real Estate with Deed of Absolute Sale;[19] and Laurencio Ayings (heir of Emiliano Aying) admission that he found
out about the sale of the land in dispute a long time ago and can only estimate that it must be after martial law. [20] Paulino Aying (heir of
Simeon Aying) gave no testimony whatsoever as to when the children of Simeon Aying actually learned of the existence of the
document of sale. On the other hand, petitioner did not present any other evidence to prove the date when respondents were notified of
the execution of the subject document.
In view of the lack of unambiguous evidence of when the heirs of Emiliano Aying and Simeon Aying discovered the existence of the
document of sale, it must be determined which party had the burden of proof to establish such fact.
The test for determining where the burden of proof lies is to ask which party to an action or suit will fail if he offers no evidence
competent to show the facts averred as the basis for the relief he seeks to obtain. [21] Moreover, one alleging a fact that is denied has
the burden of proving it and unless the party asserting the affirmative of an issue sustains the burden of proof of that issue by a
preponderance of the evidence, his cause will not succeed. [22] Thus, the defendant bears the burden of proof as to all affirmative
defenses which he sets up in answer to the plaintiffs claim or cause of action; he being the party who asserts the truth of the matter he
has alleged, the burden is upon him to establish the facts on which that matter is predicated and if he fails to do so, the plaintiff is
entitled to a verdict or decision in his favor.[23]
In the case at bar, it was petitioner, as the defendant before the RTC, which set up in its Answer the affirmative defense of
prescription. It was, therefore, incumbent upon petitioner to prove the date from which the prescriptive period began to run. Evidence as
to the date when the ten-year prescriptive period began exists only as to the heirs of Roberta Aying, as Wenceslao Sumalinog admitted
that they learned of the existence of the document of sale in the year 1967. As to the heirs of Emiliano Aying and Simeon Aying, there
is no clear evidence of the date when they discovered the document conveying the subject land to petitioner. Petitioner miserably failed
to adduce proof of when the heirs of Emiliano Aying and Simeon Aying were notified of the subject document. Hence, with regard to
said heirs, the Court may consider the admission in the amended complaint that they learned of the conveyance of the disputed land
only in 1991 when petitioner sent notices to vacate to the occupants of the subject land, as the date from which the ten-year
prescriptive period should be reckoned.
Respondents filed their Amended Complaint on December 6, 1993.[24] Thus, with regard to respondent heirs of Roberta Aying who
had knowledge of the conveyance as far back as 1967, their cause of action is already barred by prescription when said amended
complaint was filed as they only had until 1977 within which to bring action. As to the respondent heirs of Emiliano and Simeon Aying,
they were able to initiate their action for reconveyance of property based on implied or constructive trust well within the ten-year
prescriptive period reckoned from 1991 when they were sent by petitioner a notice to vacate the subject property.
Evidently, laches cannot be applied against respondent heirs of Emiliano and Simeon Aying, as they took action to protect their
interest well within the period accorded them by law.
With regard to petitioners argument that the provision of Article 1104 of the Civil Code, stating that a partition made with preterition
of any of the compulsory heirs shall not be rescinded, should be applied, suffice it to say that the Extra-Judicial Partition of Real Estate
with Deed of Absolute Sale is not being rescinded. In fact, its validity had been upheld but only as to the parties who participated in the
execution of the same. As discussed above, what was conveyed to petitioner was ownership over the shares of the heirs who executed
the subject document. Thus, the law, particularly, Article 1456 of the Civil Code, imposed the obligation upon petitioner to act as a
trustee for the benefit of respondent heirs of Emiliano and Simeon Aying who, having brought their action within the prescriptive period,
are now entitled to the reconveyance of their share in the land in dispute.
IN VIEW OF THE FOREGOING, the petition is PARTIALLY GRANTED and the Decision of the Court of Appeals dated March 7,
2000 is MODIFIED, as follows: The amended complaint of the heirs of Roberta Aying is DISMISSED on the ground of prescription.
However, the heirs of Emiliano Aying and Simeon Aying, having instituted the action for reconveyance within the prescriptive period,
are hereby DECLARED as the LAWFUL OWNERS of a 2/8 portion of the parcel of land covered by Original Certificate of Title No. RO-
2856.
SO ORDERED.
Puno, (Chairman), Callejo, Sr., Tinga, and Chico-Nazario, JJ., concur.
 SECOND DIVISION

RICHARD B. LOPEZ, in his G.R. No. 157784

Capacity as Trustee of the Trust
Estate of the late Juliana Lopez-
Manzano, Present:
Petitioner,

QUISUMBING, J.,
Chairperson,
CARPIO MORALES,
- versus - TINGA,
VELASCO, JR., and
COURT OF APPEALS, BRION, JJ.
CORAZON LOPEZ, FERNANDO
LOPEZ, ROBERTO LOPEZ, represented
by LUZVIMINDA LOPEZ, MARIA Promulgated:
ROLINDA MANZANO, MARIA
ROSARIO MANZANO SANTOS,
JOSE MANZANO, JR., NARCISO
MANZANO (all represented by December 16, 2008
Attorney-in-fact, MODESTO RUBIO),
MARIA CRISTINA MANZANO RUBIO,
IRENE MONZON and ELENA MANZANO,
Respondents.
x--------------------------------------------------------------------------------x

DECISION
TINGA, J.:
This is a petition for review on certiorari [1]under Rule 45 of the 1997 Rules of Civil Procedure, assailing the Decision[2] and Resolution[3] of the
Court of Appeals in CA-G.R. CV No. 34086. The Court of Appeals decision affirmed the summary judgment of the Regional Trial Court (RTC),
Branch 10, Balayan, Batangas, dismissing petitioners action for reconveyance on the ground of prescription.

The instant petition stemmed from an action for reconveyance instituted by petitioner Richard B. Lopez in his capacity as trustee of the estate
of the late Juliana Lopez Manzano (Juliana) to recover from respondents several large tracts of lands allegedly belonging to the trust estate of Juliana.

The decedent, Juliana, was married to Jose Lopez Manzano (Jose). Their union did not bear any children. Juliana was the owner of several
properties, among them, the properties subject of this dispute. The disputed properties totaling more than 1,500 hectares consist of six parcels of land,
which are all located in Batangas. They were the exclusive paraphernal properties of Juliana together with a parcel of land situated in Mindoro known
as Abra de Ilog and a fractional interest in a residential land on Antorcha St., Balayan, Batangas.

On 23 March 1968, Juliana executed a notarial will,[4] whereby she expressed that she wished to constitute a trust fund for her paraphernal properties,
denominated as Fideicomiso de Juliana Lopez Manzano (Fideicomiso), to be administered by her husband. If her husband were to die or renounce
the obligation, her nephew, Enrique Lopez, was to become administrator and executor of the Fideicomiso. Two-thirds (2/3) of the income from
rentals over these properties were to answer for the education of deserving but needy honor students, while one-third 1/3 was to shoulder the
expenses and fees of the administrator. As to her conjugal properties, Juliana bequeathed the portion that she could legally dispose to her husband,
and after his death, said properties were to pass to her biznietos or great grandchildren.

Juliana initiated the probate of her will five (5) days after its execution, but she died on 12 August 1968, before the petition for probate could be
heard. The petition was pursued instead in Special Proceedings (S.P.) No. 706 by her husband, Jose, who was the designated executor in the will. On
7 October 1968, the Court of First Instance, Branch 3, Balayan, Batangas, acting as probate court, admitted the will to probate and issued the letters
testamentary to Jose. Jose then submitted an inventory of Julianas real and personal properties with their appraised values, which was approved by
the probate court.

Thereafter, Jose filed a Report dated 16 August 1969, which included a proposed project of partition. In the report, Jose explained that as the only
compulsory heir of Juliana, he was entitled by operation of law to one-half (1/2) of Julianas paraphernal properties as his legitime, while the other
one-half (1/2) was to be constituted into the Fideicomiso. At the same time, Jose alleged that he and Juliana had outstanding debts
totaling P816,000.00 excluding interests, and that these debts were secured by real estate mortgages. He noted that if these debts were liquidated, the
residuary estate available for distribution would, value-wise, be very small.

From these premises, Jose proceeded to offer a project of partition. The relevant portion pertaining to the Fideicomiso stated, thus:

PROJECT OF PARTITION

14. Pursuant to the terms of the Will, one-half (1/2) of the following properties, which are not burdened with any obligation, shall be
constituted into the Fidei-comiso de Juliana Lopez Manzano and delivered to Jose Lopez Manzano as trustee thereof:

Location Title No. Area (Sq. M.) Improvements

Abra de Ilog, TCT - 540 2,940,000 pasture, etc.

Mindoro

Antorcha St. TCT 1217-A 13,040 residential

Balayan, Batangas (1/6 thereof)

and all those properties to be inherited by the decedent, by intestacy, from her sister, Clemencia Lopez y Castelo.

15. The other half (1/2) of the aforesaid properties is adjudicated to Jose Lopez Manzano as heir.

Then, Jose listed those properties which he alleged were registered in both his and Julianas names, totaling 13 parcels in all. The disputed properties
consisting of six (6) parcels, all located in Balayan, Batangas, were included in said list. These properties, as described in the project of partition, are
as follows:
Location Title No. Area (Sq. M.) Improvements

Pantay, Calaca, 91,283 coconuts

Batangas

Mataywanak, OCT-29[6]94 485,486 sugar

Tuy, Batangas

Patugo, Balayan, OCT-2807 16,757,615 coconut,

Batangas sugar, citrus,
 pasteur

Cagayan, Balayan, TCT-1220 411,331 sugar

Batangas

Pook, Baayan TCT-1281 135,922 sugar

Batangas

Bolbok, Balayan, TCT-18845 444,998 sugar

Batangas
Calzada, Balayan, TCT 1978 2,312 sugar
Batangas
Gumamela, Balayan, TCT-2575 829
Batangas
Bombon, Balayan, 4,532
Batangas
Paraaque, Rizal TCT-282340 800 residential
Paraaque, Rizal TCT-11577 800 residential
Modesto St., Manila TCT-52212 137.8 residential

and the existing sugar quota in the name of the deceased with the Central Azucarera Don Pedro at Nasugbo.

16. The remaining shall likewise go to Jose Lopez Manzano, with the condition to be annotated on the titles thereof, that upon his
death, the same shall pass on to Corazon Lopez, Ferdinand Lopez, and Roberto Lopez:

Location Title No. Area (Sq. M.) Improvements

Dalig, Balayan, TCT-10080 482,872 sugar

Batangas
San Juan, Rizal TCT-53690 523 residential

On 25 August 1969, the probate court issued an order approving the project of partition. As to the properties to be constituted into the Fideicomiso,
the probate court ordered that the certificates of title thereto be cancelled, and, in lieu thereof, new certificates be issued in favor of Jose as trustee of
the Fideicomiso covering one-half (1/2) of the properties listed under paragraph 14 of the project of partition; and regarding the other half, to be
registered in the name of Jose as heir of Juliana. The properties which Jose had alleged as registered in his and Julianas names, including the disputed
lots, were adjudicated to Jose as heir, subject to the condition that Jose would settle the obligations charged on these properties. The probate court,
thus, directed that new certificates of title be issued in favor of Jose as the registered owner thereof in its Order dated 15 September 1969. On even
date, the certificates of title of the disputed properties were issued in the name of Jose.

The Fideicomiso was constituted in S.P No. 706 encompassing one-half (1/2) of the Abra de Ilog lot on Mindoro, the 1/6 portion of the lot
in Antorcha St. in Balayan, Batangasand all other properties inherited ab intestato by Juliana from her sister, Clemencia, in accordance with the order
of the probate court in S.P. No. 706. The disputed lands were excluded from the trust.

Jose died on 22 July 1980, leaving a holographic will disposing of the disputed properties to respondents. The will was allowed probate on 20
December 1983 in S.P. No. 2675 before the RTC of Pasay City. Pursuant to Joses will, the RTC ordered on 20 December 1983 the transfer of the
disputed properties to the respondents as the heirs of Jose. Consequently, the certificates of title of the disputed properties were cancelled and new
ones issued in the names of respondents.

Petitioners father, Enrique Lopez, also assumed the trusteeship of Julianas estate. On 30 August 1984, the RTC of Batangas, Branch 9
appointed petitioner as trustee of Julianas estate in S.P. No. 706. On 11 December 1984, petitioner instituted an action for reconveyance of parcels of
land with sum of money before the RTC of Balayan, Batangasagainst respondents. The complaint[5] essentially alleged that Jose was able to register
in his name the disputed properties, which were the paraphernal properties of Juliana, either during their conjugal union or in the course of the
performance of his duties as executor of the testate estate of Juliana and that upon the death of Jose, the disputed properties were included in the
inventory as if they formed part of Joses estate when in fact Jose was holding them only in trust for the trust estate of Juliana.

Respondents Maria Rolinda Manzano, Maria Rosario Santos, Jose Manzano, Jr., Narciso Manzano, Maria Cristina Manzano Rubio and
Irene Monzon filed a joint answer[6] with counterclaim for damages. Respondents Corazon, Fernando and Roberto, all surnamed Lopez, who were
minors at that time and represented by their mother, filed a motion to dismiss,[7] the resolution of which was deferred until trial on the merits. The
RTC scheduled several pre-trial conferences and ordered the parties to submit pre-trial briefs and copies of the exhibits.

On 10 September 1990, the RTC rendered a summary judgment,[8] dismissing the action on the ground of prescription of action. The RTC also
denied respondents motion to set date of hearing on the counterclaim.
Both petitioner and respondents elevated the matter to the Court of Appeals. On 18 October 2002, the Court of Appeals rendered the assailed
decision denying the appeals filed by both petitioner and respondents. The Court of Appeals also denied petitioners motion for reconsideration for
lack of merit in its Resolution dated 3 April 2003.
Hence, the instant petition attributing the following errors to the Court of Appeals:

I. THE COURT OF APPEALS CONCLUSION THAT PETITIONERS ACTION FOR [RECONVEYANCE] HAS
PRESCRIBED TAKING AS BASIS SEPTEMBER 15, 1969 WHEN THE PROPERTIES IN DISPUTE WERE TRANSFERRED TO
THE NAME OF THE LATE JOSE LOPEZ MANZANO IN RELATION TO DECEMBER 12, 1984 WHEN THE ACTION FOR
RECONVEYANCE WAS FILED IS ERRONEOUS.

II. THE RESPONDENT COURT OF APPEALS CONCLUSION IN FINDING THAT THE FIDUCIARY RELATION
ASSUMED BY THE LATE JOSE LOPEZ MANZANO, AS TRUSTEE, PURSUANT TO THE LAST WILL AND TESTAMENT
OF JULIANA LOPEZ MANZANO WAS IMPLIED TRUST, INSTEAD OF EXPRESS TRUST IS EQUALLY ERRONEOUS.

None of the respondents filed a comment on the petition. The counsel for respondents Corazon, Fernando and Roberto, all surnamed Lopez,
explained that he learned that respondents had migrated to the United States only when the case was pending before the Court of Appeals.[9] Counsel
for the rest of the respondents likewise manifested that the failure by said respondents to contact or communicate with him possibly signified their
lack of interest in the case.[10] In a Resolution dated 19 September 2005, the Court dispensed with the filing of a comment and considered the case
submitted for decision.[11]

The core issue of the instant petition hinges on whether petitioners action for reconveyance has prescribed. The resolution of this issue calls for a
determination of whether an implied trust was constituted over the disputed properties when Jose, the trustee, registered them in his name.
Petitioner insists that an express trust was constituted over the disputed properties; thus the registration of the disputed properties in the name
of Jose as trustee cannot give rise to prescription of action to prevent the recovery of the disputed properties by the beneficiary against the trustee.

Evidently, Julianas testamentary intent was to constitute an express trust over her paraphernal properties which was carried out when
the Fideicomiso was established in S.P. No. 706.[12] However, the disputed properties were expressly excluded from the Fideicomiso. The probate
court adjudicated the disputed properties to Jose as the sole heir of Juliana. If a mistake was made in excluding the disputed properties from
the Fideicomiso and adjudicating the same to Jose as sole heir, the mistake was not rectified as no party appeared to oppose or appeal the exclusion
of the disputed properties from the Fideicomiso. Moreover, the exclusion of the disputed properties from the Fideicomiso bore the approval of the
probate court. The issuance of the probate courts order adjudicating the disputed properties to Jose as the sole heir of Juliana enjoys the presumption
of regularity.[13]

On the premise that the disputed properties were the paraphernal properties of Juliana which should have been included in the Fideicomiso,
their registration in the name of Jose would be erroneous and Joses possession would be that of a trustee in an implied trust. Implied trusts are those
which, without being expressed, are deducible from the nature of the transaction as matters of intent or which are superinduced on the transaction by
operation of law as matters of equity, independently of the particular intention of the parties.[14]

The provision on implied trust governing the factual milieu of this case is provided in Article 1456 of the Civil Code, which states:

ART. 1456. If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an
implied trust for the benefit of the person from whom the property comes.

In Aznar Brothers Realty Company v. Aying,[15] the Court differentiated two kinds of implied trusts, to wit:

x x x In turn, implied trusts are either resulting or constructive trusts. These two are differentiated from each other as follows:

Resulting trusts are based on the equitable doctrine that valuable consideration and not legal title determines the equitable title
or interest and are presumed always to have been contemplated by the parties. They arise from the nature of circumstances of the
consideration involved in a transaction whereby one person thereby becomes invested with legal title but is obligated in equity to hold
his legal title for the benefit of another. On the other hand, constructive trusts are created by the construction of equity in order to
satisfy the demands of justice and prevent unjust enrichment. They arise contrary to intention against one who, by fraud, duress or
abuse of confidence, obtains or holds the legal right to property which he ought not, in equity and good conscience, to hold.[16]

A resulting trust is presumed to have been contemplated by the parties, the intention as to which is to be found in the nature of their
transaction but not expressed in the deed itself.[17] Specific examples of resulting trusts may be found in the Civil Code, particularly Arts.
1448,[18] 1449,[19] 1451,[20] 1452[21] and 1453.[22]
 A constructive trust is created, not by any word evincing a direct intention to create a trust, but by operation of law in order to satisfy the
demands of justice and to prevent unjust enrichment.[23] It is raised by equity in respect of property, which has been acquired by fraud, or where
although acquired originally without fraud, it is against equity that it should be retained by the person holding it. [24] Constructive trusts are illustrated
in Arts. 1450,[25] 1454,[26] 1455[27] and 1456.[28]
The disputed properties were excluded from the Fideicomiso at the outset. Jose registered the disputed properties in his name partly as his
conjugal share and partly as his inheritance from his wife Juliana, which is the complete reverse of the claim of the petitioner, as the new trustee, that
the properties are intended for the beneficiaries of the Fideicomiso. Furthermore, the exclusion of the disputed properties from the Fideicomiso was
approved by the probate court and, subsequently, by the trial court having jurisdiction over the Fideicomiso. The registration of the disputed
properties in the name of Jose was actually pursuant to a court order. The apparent mistake in the adjudication of the disputed properties to Jose
created a mere implied trust of the constructive variety in favor of the beneficiaries of the Fideicomiso.

Now that it is established that only a constructive trust was constituted over the disputed properties, may prescription for the recovery of the
properties supervene?

Petitioner asserts that, if at all, prescription should be reckoned only when respondents caused the registration of the disputed properties in
their names on 13 April 1984and not on 15 September 1969, when Jose registered the same in his name pursuant to the probate courts order
adjudicating the disputed properties to him as the sole heir of Juliana. Petitioner adds, proceeding on the premise that the prescriptive period should
be counted from the repudiation of the trust, Jose had not performed any act indicative of his repudiation of the trust or otherwise declared an adverse
claim over the disputed properties.

The argument is tenuous.

The right to seek reconveyance based on an implied or constructive trust is not absolute. It is subject to extinctive prescription.[29] An action
for reconveyance based on implied or constructive trust prescribes in 10 years. This period is reckoned from the date of the issuance of the original
certificate of title or transfer certificate of title. Since such issuance operates as a constructive notice to the whole world, the discovery of the fraud is
deemed to have taken place at that time.[30]
 In the instant case, the ten-year prescriptive period to recover the disputed property must be counted from its registration in the name of Jose
on 15 September 1969, when petitioner was charged with constructive notice that Jose adjudicated the disputed properties to himself as the sole heir
of Juana and not as trustee of the Fideicomiso.

It should be pointed out also that Jose had already indicated at the outset that the disputed properties did not form part of
the Fideicomiso contrary to petitioners claim that no overt acts of repudiation may be attributed to Jose. It may not be amiss to state that in the project
of partition submitted to the probate court, Jose had indicated that the disputed properties were conjugal in nature and, thus, excluded from
Julianas Fideicomiso. This act is clearly tantamount to repudiating the trust, at which point the period for prescription is reckoned.
In any case, the rule that a trustee cannot acquire by prescription ownership over property entrusted to him until and unless he repudiates the
trust applies only to express trusts and resulting implied trusts. However, in constructive implied trusts, prescription may supervene even if the trustee
does not repudiate the relationship. Necessarily, repudiation of said trust is not a condition precedent to the running of the prescriptive
period.[31] Thus, for the purpose of counting the ten-year prescriptive period for the action to enforce the constructive trust, the reckoning point is
deemed to be on 15 September 1969 when Jose registered the disputed properties in his name.

WHEREFORE, the instant petition for review on certiorari is DENIED and the decision and resolution of the Court of Appeals in CA-G.R.
CV No. 34086 are AFFIRMED. Costs against petitioner.

SO ORDERED.

THIRD DIVISION
SOLEDAD CAEZO, substituted by WILLIAM G.R. No. 148788
CAEZO and VICTORIANO CAEZO
Petitioners, Present:

YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
- versus - CHICO-NAZARIO,
NACHURA, and
REYES, JJ.

CONCEPCION ROJAS, Promulgated:

Respondent.
November 23, 2007

x-----------------------------------------------------------------------------------------x

DECISION

NACHURA, J.:

This is a petition for review on certiorari from the Decision[1] of the Court of Appeals, dated September 7, 2000, in CA-G.R. SP No. 53236,
and Resolution dated May 9, 2001.

On January 29, 1997, petitioner Soledad Caezo filed a Complaint[2] for the recovery of real property plus damages with the Municipal Trial
Court (MTC) of Naval, Biliran, against her fathers second wife, respondent Concepcion Rojas. The subject property is an unregistered land with an
area of 4,169 square meters, situated at Higatangan, Naval, Biliran. Caezo attached to the complaint a Joint Affidavit [3] executed on May 10, 1979 by
Isidro Catandijan and Maximina Caezo attesting to her acquisition of theproperty.
 In her complaint, the petitioner alleged that she bought the parcel of land in 1939 from Crisogono Limpiado, although the transaction was not
reduced into writing. Thereafter, she immediately took possession of the property. When she and her husband left for Mindanao in 1948, she
entrusted the said land to her father, Crispulo[4] Rojas, who took possession of, and cultivated, the property. In 1980, she found out that the
respondent, her stepmother, was in possession of the property and was cultivating the same. She also discovered that the tax declaration over the
property was already in the name of Crispulo Rojas.[5]

In her Answer, the respondent asserted that, contrary to the petitioners claim, it was her husband, Crispulo Rojas, who bought the property from
Crisogono Limpiado in 1948, which accounts for the tax declaration being in Crispulos name. From then on, until his death in 1978, Crispulo
possessed and cultivated the property. Upon his death, the property was included in his estate, which was administered by a special administrator,
Bienvenido Ricafort. The petitioner, as heir, even received her share in the produce of the estate. The respondent further contended that the petitioner
ought to have impleaded all of the heirs as defendants. She also argued that the fact that petitioner filed the complaint only in 1997 means that she
had already abandoned her right over the property.[6]

On July 3, 1998, after hearing, the MTC rendered a Decision in favor of the petitioner, thus:

WHEREFORE, premises considered, the Court finds a preponderance of evidence in favor of plaintiff Soledad Caezo and against
defendant Concepcion Rojas by declaring plaintiff the true and lawful owner of the land more particularly described under paragraph
5 of the complaint and hereby orders defendant Concepcion Rojas:

a) To vacate and surrender possession of the land to

plaintiff;
b) To pay plaintiff the sum of P34,000.00 actual
damages, P10,000.00 for attorneys fees
and litigation expenses; and
c) To pay the costs.

SO ORDERED.[7]

Despite the respondents objection that the verbal sale cannot be proven without infringing the Statute of Frauds, the MTC gave credence to the
testimony of the petitioners two witnesses attesting to the fact that Crisogono Limpiado sold the property to the petitioner in 1939. The MTC also
found no evidence to show that Crispulo Rojas bought the property from Crisogono Limpiado in 1948. It held that the 1948 tax declaration in
Crispulos name had little significance on respondents claim, considering that in 1948, the country was then rehabilitating itself from the ravages of
the Second World War and the government was more interested in the increase in tax collection than the observance of the niceties of law.[8]

The respondent appealed the case to the Regional Trial Court (RTC) of Naval, Biliran. On October 12, 1998, the RTC reversed the MTC decision on
the ground that the action had already prescribed and acquisitive prescription had set in. The dispositive portion of the Decision reads:

WHEREFORE, premises considered, the decision of the Municipal Trial Court of Naval, Biliran awarding ownership of the disputed
land to the plaintiff and further allowing recovery of damages is hereby REVERSED in toto. There is no award of damages.

The said property remains as the legitime of the defendant Concepcion Rojas and her children.

SO ORDERED.[9]

However, acting on petitioners motion for reconsideration, the RTC amended its original decision on December 14, 1998.[10] This time, it held
that the action had not yet prescribed considering that the petitioner merely entrusted the property to her father. The ten-year prescriptive period for
the recovery of a property held in trust would commence to run only from the time the trustee repudiates the trust. The RTC found no evidence on
record showing that Crispulo Rojas ever ousted the petitioner from the property. The dispositive portion of the amended decision reads as follows:

WHEREFORE, in view of the foregoing considerations, the decision of this Court dated October 12, 1998 is hereby set aside
and another is hereby entered modifying the decision of the Court a quo and declaring Soledad Rojas Vda. De Caezo as the true and
lawful owner of a parcel of land, more particularly described and bounded as follows:

A parcel of land situated at Higatangan, Naval, Biliran, bounded on the North by Policarpio Limpiado; on the
South by Fidel Limpiado; on the East by Seashore; and on the West by Crispolo (sic) Limpiado with an approximate
area of 4,169 square meters per Tax Declaration No. 2258, later under Tax Declaration No. 4073 in the name of
Crispolo Rojas and later in the name of the Heirs of Crispolo Rojas.

Further, ordering defendant-appellant Concepcion Rojas and all persons claiming rights or interest under her to vacate and
surrender possession of the land aforecited to the plaintiff or any of her authorized representatives, Ordering the Provincial and/or
Municipal Assessors Office to cancel the present existing Tax Declaration in the name of Heirs of Crispolo Rojas referring to the
above-described property in favor of the name of Soledad Rojas Vda. De Caezo, Ordering the defendant-appellant Concepcion Rojas
to pay the plaintiff-appellee the sum of P34,000.00 in actual damages, and to pay for the loss of her share in money value of the
 products of the coconuts of said land from 1979 to 1997 and to pay further until the case is terminated at the rate of P200.00 per
quarter based on the regular remittances of the late Crispolo Rojas to the plaintiff-appellee, and to pay the costs.

SO ORDERED.[11]

The respondent filed a motion to reconsider the Amended Decision but the RTC denied the same in an Order dated April 25, 1999.

She then filed a petition for review with the Court of Appeals (CA), which reversed the Amended Decision of the RTC on September 7, 2000,
thus:

WHEREFORE, the amended decision dated December 14, 1998 rendered in Civil Case No. B-1041 is hereby REVERSED and
SET ASIDE. The complaint filed by Soledad Caezobefore the Municipal Trial Court of Naval, Biliran is hereby DISMISSED on
grounds of laches and prescription and for lack of merit.

SO ORDERED.[12]

The CA held that the petitioners inaction for several years casts a serious doubt on her claim of ownership over the parcel of land. It noted
that 17 years lapsed since she discovered that respondent was in adverse possession of the property before she instituted an action to recover the
same. And during the probate proceedings, the petitioner did not even contest the inclusion of the property in the estate of Crispulo Rojas. [13]

The CA was convinced that Crispulo Rojas owned the property, having bought the same from Crisogono Limpiado in 1948. Supporting this
conclusion, the appellate court cited the following circumstances: (1) the property was declared for taxation purposes in Crispulos name and he had
been paying the taxes thereon from 1948 until his death in 1978; (2) Crispulo adversely possessed the same property from 1948 until his death in
1978; and (3) upon his death in 1978, the property was included in his estate, the proceeds of which were distributed among his heirs.[14]

The CA further held that, assuming that there was an implied trust between the petitioner and her father over the property, her right of action
to recover the same would still be barred by prescription since 49 years had already lapsed since Crispulo adversely possessed the contested property
in 1948.[15]
 On May 9, 2001, the CA denied the petitioners motion for reconsideration for lack of merit.[16]

In this petition for review, the petitioner, substituted by her heirs, assigns the following errors:

That the Court of Appeals committed grave abuse of discretion in setting aside petitioners contention that the Petition for
Review filed by respondent CONCEPCION ROJAS before the Court of Appeals was FILED OUT OF TIME;

That the Court of Appeals erred and committed grave abuse of discretion amounting to lack or excess of jurisdiction when it
decided that the filing of the case by SOLEDAD CAEZO for Recovery of Real Property was already barred by PRESCRIPTION
AND LACHES.[17]

The petitioner insists that the respondents petition for review before the CA was filed out of time. The petitioner posits that the CA may not
grant an additional extension of time to file the petition except for the most compelling reason. She contends that the fact that respondents counsel
needed additional time to secure the certified copy of his annexes cannot be considered as a compelling reason that would justify an additional period
of
extension. She admits, though, that this issue was raised for the first time in their motion for reconsideration, but insists that it can be raised at any
time since it concerns the jurisdiction of the CA over the petition.

The petitioner further posits that prescription and laches are unavailing because there was an express trust relationship between the petitioner
and Crispulo Rojas and his heirs, and express trusts do not prescribe. Even assuming that it was not an express trust, there was a resulting trust which
generally does not prescribe unless there is repudiation by the trustee.

For her part, the respondent argues that the petitioners are now estopped from questioning the CA Resolution granting her second motion for
extension to file the petition for review. She notes that the petitioner did not raise this issue in the comment that she filed in the CA. In any case, the
grant of the second extension of time was warranted considering that the certified true copy of the assailed RTC orders did not arrive at the office of
respondents counsel in Cebu City in time for the filing of the petition.

On the merits, the respondent asserts that the complaint is barred by prescription, laches and estoppel. From 1948 until his death in 1978,
Crispulo cultivated the property and was in adverse, peaceful and continuous possession thereof in the concept of owner. It took the petitioner 49
years from 1948 before she filed the complaint for recovery of the property in 1997. Granting that it was only in 1980 that she found out that the
respondent adversely possessed the property, still petitioner allowed 17 years to elapse before she asserted her alleged right over the property.

Finally, the respondent maintains that the other co-owners are indispensable parties to the case; and because they were not impleaded, the
case should be dismissed.

The petition has no merit.

On the procedural issue raised by the petitioner, we find no reversible error in the grant by the CA of the second motion for extension of time
to file the respondents petition. The grant or denial of a motion for extension of time is addressed to the sound discretion of the court.[18] The CA
obviously considered the difficulty in securing a certified true copy of the assailed decision because of the distance between the office of respondents
counsel and the trial court as a compelling reason for the request. In the absence of any showing that the CA granted the motion for extension
capriciously, such exercise of discretion will not be disturbed by this Court.

On the second issue, the petitioner insists that her right of action to recover the property cannot be barred by prescription or laches even with
the respondents uninterrupted possession of the property for 49 years because there existed between her and her father an express trust or a resulting
trust. Indeed, if no trust relations existed, the possession of the property by the respondent, through her predecessor, which dates back to 1948, would
already have given rise to acquisitive prescription in accordance with Act No. 190 (Code of Civil Procedure).[19] Under Section 40 of Act No. 190, an
action for recovery of real property, or of an interest therein, can be brought only within ten years after the cause of action accrues. This period
coincides with the ten-year period for acquisitive prescription provided under Section 41[20] of the same Act.
Thus, the resolution of the second issue hinges on our determination of the existence of a trust over the property --- express or implied ---
between the petitioner and her father.

A trust is the legal relationship between one person having an equitable ownership of property and another person owning the legal title to
such property, the equitable ownership of the former entitling him to the performance of certain duties and the exercise of certain powers by the
latter.[21] Trusts are either express or implied.[22] Express trusts are those which are created by the direct and positive acts of the parties, by some
writing or deed, or will, or by words evincing an intention to create a trust.[23] Implied trusts are those which, without being expressed, are deducible
from the nature of the transaction as matters of intent or, independently, of the particular intention of the parties, as being superinduced on the
transaction by operation of law basically by reason of equity.[24] An implied trust may either be a resulting trust or a constructive trust.
 It is true that in express trusts and resulting trusts, a trustee cannot acquire by prescription a property entrusted to him unless he repudiates the
trust.[25] The following discussion is instructive:

There is a rule that a trustee cannot acquire by prescription the ownership of property entrusted to him, or that an action to
compel a trustee to convey property registered in his name in trust for the benefit of the cestui que trust does not prescribe, or that the
defense of prescription cannot be set up in an action to recover property held by a person in trust for the benefit of another, or that
property held in trust can be recovered by the beneficiary regardless of the lapse of time.

That rule applies squarely to express trusts. The basis of the rule is that the possession of a trustee is not adverse. Not being
adverse, he does not acquire by prescription the property held in trust. Thus, Section 38 of Act 190 provides that the law of
prescription does not apply "in the case of a continuing and subsisting trust."

The rule of imprescriptibility of the action to recover property held in trust may possibly apply to resulting trusts as long as the
trustee has not repudiated the trust.

xxxx

Acquisitive prescription may bar the action of the beneficiary against the trustee in an express trust for the recovery of the
property held in trust where (a) the trustee has performed unequivocal acts of repudiation amounting to an ouster of the cestui que
trust; (b) such positive acts of repudiation have been made known to the cestui que trust, and (c) the evidence thereon is clear and
conclusive.[26]

As a rule, however, the burden of proving the existence of a trust is on the party asserting its existence, and such proof must be clear and
satisfactorily show the existence of the trust and its elements.[27] The presence of the following elements must be proved: (1) a trustor or settlor who
executes the instrument creating the trust; (2) a trustee, who is the person expressly designated to carry out the trust; (3) the trust res, consisting of
duly identified and definite real properties; and (4) the cestui que trust, or beneficiaries whose identity must be clear.[28] Accordingly, it was
incumbent upon petitioner to prove the existence of the trust relationship. And petitioner sadly failed to discharge that burden.

The existence of express trusts concerning real property may not be established by parol evidence. [29] It must be proven by some writing or
deed. In this case, the only evidence to support the claim that an express trust existed between the petitioner and her father was the self-serving
testimony of the petitioner. Bare allegations do not constitute evidence adequate to support a conclusion. They are not equivalent to proof under the
Rules of Court.[30]
 In one case, the Court allowed oral testimony to prove the existence of a trust, which had been partially performed. It was stressed therein that
what is important is that there should be an intention to create a trust, thus:

What is crucial is the intention to create a trust. While oftentimes the intention is manifested by the trustor in express or explicit
language, such intention may be manifested by inference from what the trustor has said or done, from the nature of the transaction, or
from the circumstances surrounding the creation of the purported trust.

However, an inference of the intention to create a trust, made from language, conduct or circumstances, must be made with
reasonable certainty. It cannot rest on vague, uncertain or indefinite declarations. An inference of intention to create a trust, predicated
only on circumstances, can be made only where they admit of no other interpretation.[31]

Although no particular words are required for the creation of an express trust, a clear intention to create a trust must be shown; and the proof
of fiduciary relationship must be clear and convincing. The creation of an express trust must be manifested with reasonable certainty and cannot be
inferred from loose and vague declarations or from ambiguous circumstances susceptible of other interpretations.[32]

In the case at bench, an intention to create a trust cannot be inferred from the petitioners testimony and the attendant facts and circumstances.
The petitioner testified only to the effect that her agreement with her father was that she will be given a share in the produce of the property, thus:

Q: What was your agreement with your father Crispulo Rojas when you left this property to him?
A: Every time that they will make copra, they will give a share.

Q: In what particular part in Mindanao [did] you stay with your husband?
A: Bansalan, Davao del Sur.

Q: And while you were in Bansalan, Davao del Sur, did Crispolo Rojas comply with his obligation of giving your share the
proceeds of the land?
A: When he was still alive, he gave us every three months sometimes P200.00 and sometimes P300.00.[33]

This allegation, standing alone as it does, is inadequate to establish the existence of a trust because profit-sharing per se, does not necessarily
translate to a trust relation. It could also be present in other relations, such as in deposit.
 What distinguishes a trust from other relations is the separation of the legal title and equitable ownership of the property. In a trust relation,
legal title is vested in the fiduciary while equitable ownership is vested in a cestui que trust. Such is not true in this case. The petitioner alleged in her
complaint that the tax declaration of the land was transferred to the name of Crispulo without her consent. Had it been her intention to create a trust
and make Crispulo her trustee, she would not have made an issue out of this because in a trust agreement, legal title is vested in the trustee. The
trustee would necessarily have the right to transfer the tax declaration in his name and to pay the taxes on the property. These acts would be treated as
beneficial to the cestui que trust and would not amount to an adverse possession.[34]

Neither can it be deduced from the circumstances of the case that a resulting trust was created. A resulting trust is a species of implied trust
that is presumed always to have been contemplated by the parties, the intention as to which can be found in the nature of their transaction although
not expressed in a deed or instrument of conveyance. A resulting trust is based on the equitable doctrine that it is the more valuable consideration
than the legal title that determines the equitable interest in property.[35]

While implied trusts may be proved by oral evidence, the evidence must be trustworthy and received by the courts with extreme caution, and
should not be made to rest on loose, equivocal or indefinite declarations. Trustworthy evidence is required because oral evidence can easily be
fabricated.[36] In order to establish an implied trust in real property by parol evidence, the proof should be as fully convincing as if the acts giving rise
to the trust obligation are proven by an authentic document. An implied trust, in fine, cannot be established upon vague and inconclusive proof.[37] In
the present case, there was no evidence of any transaction between the petitioner and her father from which it can be inferred that a resulting trust
was intended.

In light of the disquisitions, we hold that there was no express trust or resulting trust established between the petitioner and her father. Thus,
in the absence of a trust relation, we can only conclude that Crispulos uninterrupted possession of the subject property for 49 years, coupled with the
performance of acts of ownership, such as payment of real estate taxes, ripened into ownership. The statutory period of prescription commences
when a person who has neither title nor good faith, secures a tax declaration in his name and may, therefore, be said to have adversely
claimed ownership of the lot.[38] While tax declarations and receipts are not conclusive evidence of ownership and do not prove title to the land,
nevertheless, when coupled with actual possession, they constitute evidence of great weight and can be the basis of a claim of ownership through
prescription.[39] Moreover, Section 41 of Act No. 190 allows adverse possession in any character to ripen into ownership after the lapse of ten
years. There could be prescriptionunder the said section even in the absence of good faith and just title.[40]
 All the foregoing notwithstanding, even if we sustain petitioners claim that she was the owner of the property and that she constituted a trust
over the property with her father as the trustee, such a finding still would not advance her case.

Assuming that such a relation existed, it terminated upon Crispulos death in 1978. A trust terminates upon the death of the trustee where the
trust is personal to the trustee in the sense that the trustor intended no other person to administer it. [41] If Crispulo was indeed appointed as trustee of
the property, it cannot be said that such appointment was intended to be conveyed to the respondent or any of Crispulos other heirs. Hence, after
Crispulos death, the respondent had no right to retain possession of the property. At such point, a constructive trust would be created over the
property by operation of law. Where one mistakenly retains property which rightfully belongs to another, a constructive trust is the proper remedial
device to correct the situation.[42]

A constructive trust is one created not by any word or phrase, either expressly or impliedly, evincing a direct intention to create a trust, but
one which arises in order to satisfy the demands of justice. It does not come about by agreement or intention but in the main by operation of law,
construed against one who, by fraud, duress or abuse of confidence, obtains or holds the legal right to property which he ought not, in equity and
good conscience, to hold.[43]

As previously stated, the rule that a trustee cannot, by prescription, acquire ownership over property entrusted to him until and unless he
repudiates the trust, applies to express trusts and resulting implied trusts. However, in constructive implied trusts, prescription may supervene even if
the trustee does not repudiate the relationship. Necessarily, repudiation of the said trust is not a condition precedent to the running of the prescriptive
period.[44] A constructive trust, unlike an express trust, does not emanate from, or generate a fiduciary relation. While in an express trust, a
beneficiary and a trustee are linked by confidential or fiduciary relations, in a constructive trust, there is neither a promise nor any fiduciary relation
to speak of and the so-called trustee neither accepts any trust nor intends holding the property for the beneficiary. [45] The relation of trustee and cestui
que trust does not in fact exist, and the holding of a constructive trust is for the trustee himself, and therefore, at all times adverse.

In addition, a number of other factors militate against the petitioners case. First, the petitioner is estopped from asserting ownership over the
subject property by her failure to protest its inclusion in the estate of Crispulo. The CA, thus, correctly observed that:

Even in the probate proceedings instituted by the heirs of Crispulo Rojas, which included her as a daughter of the first
marriage, Caezo never contested the inclusion of the contested property in the estate of her father. She even participated in the project
of partition of her fathers estate which was approved by the probate court in 1984. After personally receiving her share in the proceeds
of the estate for 12 years, she suddenly claims ownership of part of her fathers estate in 1997.
The principle of estoppel in pais applies when -- by ones acts, representations, admissions, or silence when there is a need to speak out -- one,
intentionally or through culpable negligence, induces another to believe certain facts to exist; and the latter rightfully relies and acts on such belief, so
as to be prejudiced if the former is permitted to deny the existence of those facts.[46] Such a situation obtains in the instant case.

Second, the action is barred by laches. The petitioner allegedly discovered that the property was being possessed by the respondent in
1980.[47] However, it was only in 1997 that she filed the action to recover the property. Laches is negligence or omission to assert a right within a
reasonable time, warranting a presumption that the party entitled to it has either abandoned or declined to assert it.[48]

Finally, the respondent asserts that the court a quo ought to have dismissed the complaint for failure to implead the other heirs who are
indispensable parties. We agree. We note that the complaint filed by the petitioner sought to recover ownership, not just possession of the
property; thus, the suit is in the nature of an action for reconveyance. It is axiomatic that owners of property over which reconveyance is asserted are
indispensable parties. Without them being impleaded, no relief is available, for the court cannot render valid judgment. Being indispensable parties,
their absence in the suit renders all subsequent actions of the trial court null and void for want of authority to act, not only as to the absent parties but
even as to those present. Thus, when indispensable parties are not before the court, the action should be dismissed.[49] At any rate, a resolution of this
issue is now purely academic in light of our finding that the complaint is already barred by prescription, estoppel and laches.

WHEREFORE, premises considered, the petition is DENIED. The Decision of the Court of Appeals, dated September 7, 2000, and Resolution
dated May 9, 2001, areAFFIRMED.
SO ORDERED.

SECOND DIVISION

HEIRS OF TRANQUILINO LABISTE G.R. No. 162033

(also known as Tranquilino Laviste)
represented by: (1) GERARDO LABISTE,
representing the Heirs of Gregorio Labiste; Present:
(2) OBDULLIA LABISTE GABUAN,
representing the heirs of Juan Labiste; QUISUMBING, J.,
(3) VICTORIA G. CHIONG, representing Chairperson,
the Heirs of Eulalia Labiste; (4) APOLINARIA CARPIO MORALES,
LABISTE YLAYA, representing the TINGA,
Heirs of Nicolasa Labiste; (5) DEMOSTHENES VELASCO, JR., and
LABISTE, representing the Heirs of Gervacio BRION, JJ.
Labiste; (6) ALEJANDRA LABISTE;
representing the Heirs of SINFROCIO
LABISTE, and (7) CLOTILDE LABISTE CARTA,
representing the Heirs of Andres Labiste,
Petitioners,

- versus

HEIRS OF JOSE LABISTE, survived by his Promulgated:

children, (1) ZACARIAS LABISTE, deceased
and survived by his children, namely: CRESENCIA
LABISTE and EUFRONIO LABISTE; (2) May 8, 2009
BERNARDINO LABISTE, deceased and survived
by his children, namely: POLICARPIO LABISTE,
BONIFACIO LABISTE, FELIX LABISTE,
GABINA LABISTE, CAYETANA LABISTE and
ISABEL LABISTE; (3) LUCIA LABISTE,
deceased and survived by her children, namely:
ISAAC LABISTE, GENARO LABISTE,
BRAULIA LABISTE, BRAULIO LABISTE,
ASUNCION LABISTE, ALFONSO LABISTE
and CLAUDIA LABISTE; (4) EPIFANIO
LABISTE and CLAUDIA LABISTE;
deceased and survived by his children,
namely SILVESTRE LABISTE,
PAULA LABISTE and GERARDA LABISTE;
(5) ANA LABISTE, deceased and survived by her
children, namely: MAXIMO LABISTE, MOISES
LABISTE, GERVACIO LABISTE, SATURNINA
LABISTE and QUIRINO LABISTE; (6) SEVERO
LABISTE, deceased and survived by his children,
Namely: FELIX LABISTE, RUFINA
LABISTE, SIMPLICIO LABISTE,
VICENTE LABISTE and PATRICIO
LABISTE,
Respondents.

x-------------------------------------------------------------------------------------x

DECISION

TINGA, J.:

This is a petition for review[1] under Rule 45 of the Rules of Court of the Court of Appeals Decision dated 30 June 2003[2] in CA-G.R. CV No. 65829.
reversing the decision of the Regional Trial Court (RTC) of Cebu City, Branch 9. The appellate court denied petitioners[3] motion for reconsideration
in a Resolution dated 15 January 2004.

The factual antecedents are as follows:

On 29 September 1919, the late Epifanio Labiste (Epifanio), on his own and on behalf of his brothers and sisters who were the heirs of Jose
Labiste (Jose), purchased from the Bureau of Lands Lot No. 1054 of the Banilad Friar Lands Estate, with an area of 13,308 square meters, located at
Guadalupe, Cebu City for P36.00.[4] Subsequently, on 9 June 1924, then Bureau of Lands Director Jorge B. Vargas executed Deed of Conveyance
No. 12536 selling and ceding Lot No. 1054 to Epifanio and his brothers and sisters who were the heirs of Jose.[5]

After full payment of the purchase price but prior to the issuance of the deed of conveyance, Epifanio executed an Affidavit[6] (Affidavit of
Epifanio) in Spanish on 10 July 1923 affirming that he, as one of the heirs of Jose, and his uncle and petitioners predecessor-in-interest, Tranquilino
Labiste (Tranquilino), then co-owned Lot No. 1054 because the money that was paid to the government came from the two of them. Tranquilino and
the heirs of Jose continued to hold the property jointly.
Sometime in 1928, the Register of Deeds of Cebu City issued Original Certificate of Title No. 3878 for Lot No. 1054. On 2 May 1928,
Engineer Espiritu Bunagan (Engr. Bunagan), Deputy Public Land Surveyor, subdivided Lot No. 1054 into two lots: Lot No. 1054-A with an area of
6,664 square meters for Tranquilino and Lot No. 1054-B with an area of 6,664 square meters for Epifanio. The subdivision plan prepared by Engr.
Bunagan was approved by Jose P. Dans, Acting Director of Lands on 28 October 1928.[7]
 Subsequently, on 18 October 1939, the heirs of Tranquilino[8] purchased the one-half (1/2) interest of the heirs of Jose[9] over Lot No. 1054
for P300.00, as evidenced by the Calig-onan sa Panagpalit[10] executed by the parties in the Visayan dialect. The heirs of Tranquilino immediately
took possession of the entire lot.

When World War II broke out, the heirs of Tranquilino fled Cebu City and when they came back they found their homes and possessions
destroyed. The records in the Office of the Register of Deeds, Office of the City Assessor and other government offices were also destroyed during
the war. Squatters have practically overrun the entire property, such that neither petitioners nor respondents possess it.

In October 1993, petitioners learned that one of the respondents,[11] Asuncion Labiste, had filed on 17 September 1993 a petition for
reconstitution of title over Lot No. 1054. Petitioners opposed the petition at first but by a compromise agreement between the parties dated 25 March
1994, petitioners withdrew their opposition to expedite the reconstitution process. Under the compromise agreement, petitioners were to be given
time to file a complaint so that the issues could be litigated in an ordinary action and the reconstituted title was to be deposited with the Clerk of
Court for a period of sixty (60) days to allow petitioners to file an action for reconveyance and to annotate a notice of lis pendens. The Register of
Deeds of Cebu City issued the reconstituted title, TCT No. RT-7853,[12] in the name of Epifanio Labiste, married to Tomasa Mabitad, his brothers
and sisters, heirs of Jose Labiste on 14 December 1994. However, respondents did not honor the compromise agreement.

Petitioners filed a complaint[13] for annulment of title seeking the reconveyance of property and damages on 13 January 1995, docketed as
Civil Case No. CEB-16943, with the RTC of Cebu City. Respondents claimed that the Affidavit of Epifanio and the Calig-onan sa Panagpalit were
forgeries and that petitioners action had long prescribed or barred by laches.[14]

The RTC in a Decision dated 23 August 1999[15] ruled in favor of petitioners. After evaluating the documents presented by petitioners, the
RTC found that they are genuine and authentic as ancient documents and that they are valid and enforceable. [16] Moreover, it held that the action had
not prescribed as the complaint was filed about a year after the reconstitution of the title by respondents. The judicial reconstitution was even
opposed by petitioners until a compromise agreement was reached by the parties and approved by the RTC which ordered the reconstitution. The
RTC further held that the reconstituted title did not give any more right to respondents than what their predecessors-in-interest actually had as it is
limited to the reconstitution of the certificate as it stood at the time of its loss or destruction.[17]

On appeal, the Court of Appeals, while affirming petitioners right to the property, nevertheless reversed the RTCs decision on the ground of
prescription and laches. It affirmed the RTCs findings that the Affidavit and the Calig-onan sa Panagpalit are genuine and authentic, and that the
same are valid and enforceable documents.[18] Citing Article 1144 of the Civil Code, it held that petitioners cause of action had prescribed for the
action must be brought within ten (10) years from the time the right of action accrues upon the written contract which in this case was when
petitioners predecessors-in-interest lost possession over the property after World War II. Also, the lapse of time to file the action constitutes neglect
on petitioners part so the principle of laches is applicable.[19]

Hence, the present petition.

The genuineness and authenticity of the Affidavit of Epifanio and the Calig-onan sa Panagpalit are beyond cavil. As we have ruled in a litany
of cases, resort to judicial review of the decisions of the Court of Appeals under Rule 45 is confined only to errors of law. [20] The findings of fact by
the lower court are conclusive absent any palpable error or arbitrariness.[21] The Court finds no reason to depart from this principle. Moreover, it is a
long settled doctrine that findings of fact of the trial court, when affirmed by the Court of Appeals, are binding upon the Court. It is not the function
of the Supreme Court to weigh anew the evidence already passed upon by the Court of Appeals for these are deemed final and conclusive and may
not be reviewed on appeal.[22]

The sole issue that the Court has to resolve is whether or not petitioners cause of action has prescribed.

The Court of Appeals erred in applying the rules on prescription and the principle of laches because what is involved in the present case is an
express trust.

Trust is the right to the beneficial enjoyment of property, the legal title to which is vested in another. It is a fiduciary relationship that obliges
the trustee to deal with the property for the benefit of the beneficiary.[23] Trust relations between parties may either be express or implied. An express
trust is created by the intention of the trustor or of the parties. An implied trust comes into being by operation of law.[24]

Express trusts are created by direct and positive acts of the parties, by some writing or deed, or will, or by words either expressly or impliedly
evincing an intention to create a trust.[25] Under Article 1444 of the Civil Code, "[n]o particular words are required for the creation of an express trust,
it being sufficient that a trust is clearly intended." The Affidavit of Epifanio is in the nature of a trust agreement. Epifanio affirmed that the lot
brought in his name was co-owned by him, as one of the heirs of Jose, and his uncle Tranquilino. And by agreement, each of them has been in
possession of half of the property. Their arrangement was corroborated by the subdivision plan prepared by Engr. Bunagan and approved by Jose P.
Dans, Acting Director of Lands.
 As such, prescription and laches will run only from the time the express trust is repudiated. The Court has held that for acquisitive
prescription to bar the action of the beneficiary against the trustee in an express trust for the recovery of the property held in trust it must be shown
that: (a) the trustee has performed unequivocal acts of repudiation amounting to an ouster of the cestui que trust; (b) such positive acts of repudiation
have been made known to the cestui que trust, and (c) the evidence thereon is clear and conclusive.[26] Respondents cannot rely on the fact that
the Torrens title was issued in the name of Epifanio and the other heirs of Jose. It has been held that a trustee who obtains a Torrens title over
property held in trust by him for another cannot repudiate the trust by relying on the registration. [27] The rule requires a clear repudiation of the trust
duly communicated to the beneficiary. The only act that can be construed as repudiation was when respondents filed the petition for reconstitution in
October 1993. And since petitioners filed their complaint in January 1995, their cause of action has not yet prescribed, laches cannot be attributed to
them.

It is hornbook doctrine that laches is a creation of equity and its application is controlled by equitable considerations. Laches cannot be used to
defeat justice or perpetrate fraud and injustice.[28] Neither should its application be used to prevent the rightful owners of a property from

recovering what has been fraudulently registered in the name of another.[29] The equitable remedy of laches is, therefore, unavailing in this case.

However, to recover the other half of the property covered by the private Calig-onan sa Panagpalit and to have it registered on the title of the
property, petitioners should have filed an action to compel[30] respondents, as heirs of the sellers in the contract,[31] to execute a public deed of sale. A
conveyance of land made in a private document does not affect its validity. Article 1358,like its forerunner Article 1280 of the Civil Code of Spain,
does not require the accomplishment of the acts or
contracts in a public instrument in order to validate the act or contract but only to insure its efficacy, [32] so that after the existence of said contract has
been admitted, the party bound may be compelled to execute the proper document.[33] But even assuming that such action was filed by petitioners, the
same had already prescribed.

It is settled that only laws existing at the time of the execution of a contract are applicable thereto and not later statutes, unless the latter are
specifically intended to have retroactive effect.[34] Consequently, it is the Old Code of Civil Procedure (Act No. 190) which applies in this case since
the Calig-onan sa Panagpalit was executed on 18 October 1939 while the New Civil Code took effect only on 30 August 1950. And section 43 of
Act No. 190, like its counterpart Article 1144 of the New Civil Code, provides that action upon a written contract must be filed within ten years.[35]
WHEREFORE, the petition is PARTIALLY GRANTED. The Decision of the Court of Appeals dated 30 June 2003 in CA-G.R. CV No.
65829 is REVERSED and SET ASIDE and the Decision of the Regional Trial Court of Cebu City, Branch 9 dated 23 August 1999 is

REINSTATED with MODIFICATION in petitioners are hereby DECLARED the absolute owners of one-half of Lot No. 1054 or Lot No. 1054-A
under TCT No. RT-7853.The Register of Deeds of Cebu City is hereby ORDERED to CANCEL TCT No. RT-7853 in part and issue a new Transfer
Certificate of Title to petitioners, heirs of Tranquilino Labiste, covering Lot No. 1054-A. No costs.
SO ORDERED.