B. SALE/PURCHASE OF PROPERTY
On
VILLARTA V. CUYNO
FACTS:
Plaintiffs Gregorio, Glicerio and Marina Villarta seek to
establish their title to a parcel of land, of about 15
hectares, located in the barrio of Tipolo, Municipality of
Ubay, Province of Bohol, and to recover the possession
thereof.
Defendants denied plaintiffs' alleged ownership and
asserted title in themselves, in addition to pleading
prescription of action.
CFI: declared plaintiff Gregorio Villarta owner of the
Northwestern portion of the land.
The Court refrains from deciding the case regarding the
rest of the disputed land for the reason that most of the co-
owners are not included as parties to this case.
The Court orders the dismissal of this case with respect to
the remaining part of the land in question on the ground
that it belong to the heirs of the late Isidoro Cuyno, most
of which are not made parties to this case.
The present judgment is rendered without special
pronouncement as to costs, and without prejudice to the
right of plaintiff Gregorio Villarta to recover from all the
co-owners of the disputed property the amounts of taxes
he had paid to the municipal treasurer of Ubay, Bohol.
Hence, this appeal by the plaintiffs.
Plaintiff Gregorio Villarta is the father of his co-plaintiffs
Glicerio and Marina Villarta. The disputed land belonged
originally to Isidoro Cuyno, who, prior to May 29, 1924,
had assigned a small portion thereof to one Clemente
Olaybar, who declared it, for real estate tax purposes, in
his name. The remaining portion of said land was declared
in the name of Isidoro Cuyno, which was superseded in
1925 in the same name. Isidoro Cuyno died sometime
before 1936.
For failure of his heirs to pay the real estate taxes due, said
portion, of about 14.8400 hectares, was forfeited to the
Government in 1936. To avoid its eventual sale at public
auction, one of the children of Isidoro Cuyno, namely,
Marciano Cuyno, asked plaintiff Gregorio Villarta, whose
wife (Guardicisima Cuyno) is a granddaughter of said
deceased, to pay the amount of said taxes. Accordingly,
from August 29, 1936 to September 2, 1937, Gregorio
Villarta paid the municipal treasurer of Ubay several sums
of money aggregating P114.52, representing the overdue
real estate tax on said portion of 14.8400 hectares.
June 11, 1946, Gregorio Villarta caused this portion to be
declared in his name under Tax Declaration. Meanwhile,
or on April 18, 1945, he had purchased from Clemente
Olaybar the aforementioned small portion, of about
0.3100 hectares, which the latter had acquired from
Isidoro Cuyno before May 29, 1924
Gregorio Villarta commenced the present action alleging
that defendants herein forcibly deprived them of the
possession of the land in question. The evidence for the
plaintiffs tend to establish that, despite the payments to
the municipal treasurer of Ubay, Gregorio Villarta had
been unable to take possession of said land, except a small
part thereof, because the other parts of the land,
constituting the bulk thereof, had been allegedly sold
conditionally by Isidoro Cuyno to several parties, from
whom Gregorio Villarta claims to have redeemed said
parts in three (3) separate transactions from March 3,
1942 to April 18, 1945; that on January 28, 1948,
defendants herein filed Civil Case against Gregorio
Villarta to recover the land in question from Gregorio
Villarta, upon the ground that the same represents their
share in the estate of Isidoro Cuyno, as heirs of his now
deceased son Marciano Cuyno; and that sometime in
1953, during the pendency of said case No. 292,
defendants herein illegally deprived Gregorio Villarta of
the possession of said land.
ISSUE:
RULING:
At the outset, it should be noted that plaintiffs' action is
based primarily upon the payment made by Gregorio
Villarta to the municipal treasurer of Ubay of the overdue
real estate tax on the portion of the land in question
covered by Tax Declarations, which had been forfeited to
the Government for delinquency in the payment of said
tax. Plaintiffs contend that Gregorio Villarta had thereby
acquired the rights of the deceased Isidoro Cuyno in and
to said property. However, the delinquent taxpayer was
the estate of Isidoro Cuyno, not Gregorio Villarta, so that
payment by the latter merely subrogated him into the
rights of the Government as creditor for said delinquent
taxes.
As a matter of fact, the municipal treasurer of Ubay
did not, by accepting said payment by Gregorio Villarta,
sell the property to him. Indeed, said officer did not
execute any deed of conveyance in favor of Gregorio
Villarta. What is more, the receipts given to the latter by
said officer were issued, not in his (Gregorio Villarta's)
name, but in that of Isidoro Cuyno.
The fact that Gregorio Villarta accepted said receipts,
issued in the name of Isidoro Cuyno, indicates that the
former, also, understood that he was not thereby
purchasing the property, but, had made the payment for
the account or benefit of Isidoro Cuyno.
In fact, the letter of the municipal treasurer of Ubay to
Gregorio Villarta refers to said payments of Gregorio
Villarta as part of the process of "repurchase" by his "in
behalf of the declared owner, Mr. Isidoro Cuyno". Thus,
Gregorio Villarta thereby became a trustee for the benefit
of Isidoro Cuyno, or his heirs.
Plaintiffs, likewise, invoke title to part of the land in
question in consequence of a conveyance allegedly made
to Gregorio Villarta by Clemente Olaybar, who, plaintiffs
allege, acquired it from Benito Cuyno, who, in turn,
derived his title from Isidoro Cuyno, by virtue of the deed
of sale. The property described in this instrument is
located, however, in Cabadiangan whereas the land in
question is in Tipolo. Accordingly, the lower court was
justified in concluding that the subject matter of said deed
of sale is different from that of the present case.
Again, plaintiffs invoke title by acquisitive prescription.
This pretense is, however, untenable:
(1) because they admit that, in 1936, Gregorio Villarta
was unable to take possession of most of the land in
question, for the same was then being held by those who
had allegedly purchased conditionally portion thereof
from Isidoro Cuyno;
It cannot be denied, however, that, prima facie, as
children of Guardicisima Cuyno, one of the daughters of
Isidoro Cuyno, plaintiffs Glicerio and Marina Villarta are
entitled to share in the property in question. This
notwithstanding, the lower court refrained from
determining the extent of their rights, if any, thereon,
because most of the surviving descendants of Isidoro
Cuyno had not been made parties in this case.
In other words, of the nine (9) children of Isidoro Cuyno,
the heirs of only one of them — namely, Marciano Cuyno
— are fully represented in this case. Glicerio and Marina
Villarta merely represent part of the heirs of Isidoro's son
Angel Cuyno, namely his daughter Guardicisima. Angel's
other children — Caridad, Maria and Servando Cuyno —
are not parties in this case. Neither is Isidoro's only
surviving son, Bernardo Cuyno. Nor are the descendants
of Isidoro's other deceased children — Toribia, Gregoria,
Vicenta, Bernardo, Urbano, Narciso and Benito.
The lower court acted that, therefore, in not determining
the precise share of the parties herein in the land formerly
covered by Tax Declaration No. 8042 and in limiting
itself to declaring that said land belongs to the heirs of
Isidoro Cuyno, without prejudice to the right of Gregorio
Villarta to recover from them the sums by him paid as real
estate tax thereon.
Wherefore, the decision appealed from is hereby
affirmed, with costs of this instance against plaintiffs-
appellants.

(2) because the purchase allegedly made by Gregorio

Villarta from Mr. & Mrs. Embradura, and Juan Gaviola
and Toribia Cuyno, took place only in 1942, and
plaintiffs' possession from this year was interrupted
constructively upon the filing of Civil Case No. 292 in
1948, or before the expiration of ten (10) years;

(3) because, since the aforementioned delinquent taxes

had been paid by Gregorio Villarta "in behalf of Isidoro
Cuyno", the possession acquired by the former, and his
subsequent transactions with the Embraduras and the
Gaviolas, must be deemed effected by Gregorio
Villarta in trust and for the benefit of Isidoro Cuyno, until
the contrary is clearly proven; and

(4) that the first such evidence that can be invoked by

Gregorio Villarta is, at best, Tax Declaration No. 13462
(Exhibit A) in his name, but this declaration was made on
June 11, 1946, and his possession since then was, as above
indicated, interrupted, in contemplation of law, in 1948,
and actually, according to plaintiffs' complaint, in 1953,
or before the expiration of ten (10) years since 1946.
D. LOAN – ART. 1450
NAKPIL VS. IAC, CARLOS J. VALDES and
CAVAL REALTY CORPORATION
FACTS:
Petitioner instituted an action for reconveyance with
damages for breach of trust before RTC of Baguio City
against respondents Valdes and Caval Realty
Corporation. She alleged that her husband Nakpil prior to
his death had requested Valdes to purchase Pulong
Maulap (a summer residence in Baguio City) and
thereafter register the sale and hold the title thereto in trust
for the former, which respondent Valdes did. But after her
husband's death, Valdes concealed and suppressed all
information regarding the trust agreement; instead, he
transferred Pulong Maulap in the name of respondent
Caval Realty Corporation, which is 99.7% owned by him,
in exchange for 1,500 shares of stock.
Respondent Valdes, on the other hand, denied the
existence of any trust agreement over Pulong Maulap. He
averred that he bought the summer residence for himself
with his own funds and without any participation of the
late Nakpil; neither was it bought in trust for the latter.
Valdes claims that he only informed Nakpil of the
acquisition of Pulong Maulap, and the latter merely
showed interest in buying the property if he could have
the money. Meanwhile, considering their avowed
friendship, Valdes offered the usufruct of the property to
the Nakpils who in turn agreed to shoulder its
maintenance expenses, real estate taxes, fire insurance
premiums and servicing of interest on the mortgage
obligation constituted on the property.
The records likewise show that, Valdes assigned Pulong
Maulap to Caval Realty Corporation. Later, after
petitioner allegedly received a P2,000,000.00— offer for
Pulong Maulap from Pasay City Mayor Pablo Cuneta,
petitioner wrote Valdes demanding a reconveyance to
enable her to effect the sale and reimburse the latter from
the proceeds thereof for the advances he made.
However,Valdes allegedly told petitioner that he could
not execute the deed of conveyance because Pulong
Maulap was his and he had no intention of selling it.
RTC rendered a decision holding that a trust relationship
existed since it appears in the letters downpayment of
P50,000.00 and the further sum of P25,000.00 paid to
PNB though paid through respondent’s personal funds,
the same was considered by him as a loan to Nakpil; and
while the remaining P75,000.00, representing the balance
of the mortgage indebtedness of the Garcias to the PNB,
was liquidated with the proceeds of a loan from FUB, the
said loan, although in the name of Valdes, was actually
Nakpil's. In other words, the property was acquired with
funds partly loaned by Valdes to Nakpil and partly
borrowed by Nakpil from FUB albeit in Valdes' name.To
the mind of the Court these are in confirmatory of a pre-
existing express trust relationship between Valdes and the
late Nakpil over the property in dispute, and assuming the
letters could not stand as proof of an express trust, still the
Court believes that they could, as they indeed are, proof
of an implied trust under Article 1450 of the Civil Code.
However, RTC dismissed the petition for reconveyance
on the ground that petitioner, the very documents she
presented to prove the existence of a trust relationship, has
waived her right over Pulong Maulap. Not satisfied with
the decision of the trial court, both parties appealed to
respondent Intermediate Appellate Court which reversed
the trial court.
ISSUE/S:
1. Whether Art. 1450 of the Civil Code applies; (and, if it
so applies)
2. Whether the petitioner can still compel reconveyance
of Pulong Maulap from respondent Valdes.
3. Whether or not there is a pactum commissorium
existing.
RULING:
1. Yes there was a constructive trust between the
parties under Art. 1450.
Consequently, respondent Valdes is estopped from
claiming that he bought Pulong Maulap for himself, and
not merely in trust for the late Nakpil, as this contention
is belied by the following facts:
a. Loans while in his name (Valdes), such was
obtained by late Nakpil
b. P75,000 initially advanced for the Moran
property still remains unpaid.
c. Mortgage of the vendors with PNB (P75,000)
liquidated from proceeds of loan obtained from
FUB- actually secured by late Napkil merely
using respondent’s name.
d. P65,000 loan to FUB proceeds of which were
used to finance repair and renovation of Pulong
Maulap.
e. Down payment (P50,000) and partial payment
(P25,000) to PNB came from personal fund of
Valdes which he considered as advances to late
Napkil.
f. Payment being tendered, while remitting
payment of real estate taxes was made “on
 behalf” of the Napkil’s. - which is an express What the parties merely agreed to under the arrangement
recognition of the implied trust was that respondent Valdes would undertake to "take over
the total loan of P140,000.00 and pay all of the interests
due on the notes" while the heirs of the late Jose Nakpil
Implied trusts, which may either be resulting or
would continue to live in the disputed property for five (5)
constructive, are those which, without being express, are
years without any remuneration save for regular
deducible from the nature of the transaction as matters of
maintenance expenses. This does not mean, however, that
intent, or which are superinduced on the transaction by
if at the end of the five-year period petitioner failed to
operation of law as matter of equity, independently of the
reimburse Valdes for his advances, which respondent
particular intention of the parties.
computed to be P375,056.64 Valdes could already
Article 1450, which petitioner invokes in the case at bar, automatically assume ownership of Pulong Maulap.
is an illustration of an implied trust which is constructive. Instead, the remedy of respondents Carlos J. Valdes and
Article 1450 presupposes a situation where a person, Caval Realty Corporation was to proceed against the
using his own funds, purchases a certain piece of land in estate of the late Jose M. Nakpil and/or the property itself.
behalf of another who, in the meantime, may not have
sufficient funds to purchase the land. The property is then
transferred in the name of the trustee, the person who paid 3. Yes, there exists pactum commissorium.
for the land, until he is reimbursed by the beneficiary, the
person for whom the land is purchased. It is only after the
beneficiary reimburses the trustee of the purchase price The arrangement entered into between the parties,
that the former can compel conveyance of the purchased whereby Pulong Maulap was to be "considered sold to
property from the latter. him (respondent) . . . in case petitioner fails to reimburse
Valdes, must then be construed as tantamount to a pactum
2. Yes, petitioner may redeem and compel commissorium which is expressly prohibited by Art.
conveyance of the disputed property but only after 2088 of the Civil Code. For, there was to be automatic
reimbursing respondent the sum of P375,056.64, appropriation of the property by Valdes in the event of
with legal interest from 31 July 1978, the amount failure of petitioner to pay the value of the advances.
advanced by Valdes for the purchase of the Pulong
Maulap being a conditio sine qua non for Thus, contrary to respondent's manifestations, all the
compelling conveyance. elements of a pactum commissorium were present: there
was a creditor-debtor relationship between the parties; the
property was used as security for the loan; and, there was
The period within which to compel conveyance of Pulong
automatic appropriation by respondent of Pulong Maulap
Maulap is not imprescriptible. The rule is well-settled that
in case of default of petitioner.
an action for reconveyance based on an implied or
constructive trust prescibes in ten (10) years. But, in the
case, petitioner could still compel conveyance of the
disputed property from respondent provided the former
reimburses the latter for all his expenses. Valdes never
repudiated the constructive trust during the lifetime of the
late Jose Nakpil.
On the contrary, he expressly recognized it. The
prescriptive period therefore did not begin to run until
after he repudiated the trust. And such repudiation came
when Valdes excluded Pulong Maulap from the list of
properties of the late Jose Nakpil submitted to the intestate
court in 1973. Even then, the present action for
conveyance was filed in 1979 or well within the ten-years
period.The trust relations between the parties were
therefore never extinguished. Besides, petitioner could
not have waived the interest of her children with the late
Jose M. Nakpil who are her co-heirs to the Nakpil estate.
E. INHERITANCE – ART. 1451
CUSTODIO VS. CASIANO
FACTS:
Filomena Custodio, et al., who are the children of
Alejandra, Gregoria and Trinidad, all surnamed Custodio,
filed a complaint before the Court of First Instance of
Cavite against Filomena Casiano, et al., the widow and
children, respectively, of Ciriaco Custodio, alleging,
among other things, that their grandfather, Isaac Custodio,
purchased during his lifetime for a valuable consideration
but on installment basis from the Caridad Estate of Cavite,
Inc. a parcel of land situated in the City of Cavite;
that although the title to the land was not placed in the
name of Isaac before he died due to his inability to pay in
full the purchase price, his rights thereto passed to his
children, namely, Ciriaco, Alejandro, Gregoria, and
Trinidad, in the proportion of ¼ each;
that upon payment by Alejandra of the remaining
installments, the Caridad Estate of Cavite, Inc. suggested
that the deed of sale be executed in the name of their
brother Ciriaco since he was the only male in the family,
and having the three sisters agreed to the suggestion, the
document was executed as suggested and, pursuant
thereto, Transfer Certificate of Title No. 5800 covering
the land was issued in the name of Ciriaco Custodio,
married to Filomena Casiano; and that having discovered
later that defendants were intending to sell the land to the
prejudice of the plaintiffs, the latter instituted the present
action.
In the answer they filed after their motion to dismiss was
denied, defendants averred that they are the sole and
exclusive owners of the land since the same was
purchased by their predecessor-in-interest Ciriaco
Custodio from the Caridad Estate of Cavite, Inc. as a
result of which Transfer Certificate of Title No. 5800 was
issued in his name. And as a special defense, defendants
contend that the land having been registered under the
Land Registration Act (Act 496) the title issued in relation
thereto is conclusive as to all matters contained therein,
aside from the fact that the cause of action of plaintiffs, if
any they have against defendants, has already prescribed.
After trial, the court a quo rendered judgment declaring
plaintiffs and defendants, with the exception of Isagani
Geronimo, Filomena Casiano and Sixto Brasero, co-
owners of the land in litigation, and ordering the
cancellation of Transfer Certificate of Title No. 5800 and
the issuance of another in their names in the proportion
therein specified, with costs against defendants.
Dissatisfied with this decision, defendants appealed to the
Court of Appeals.
CA: rendered judgment declaring defendants the sole and
exclusive owners of the land described in Transfer
Certificate of Title No. 5800. Hence, the present petition
for review.
Court of Appeals based its ruling on the theory that since
no trust relation was proven between the predecessors-in-
interest of both petitioners and respondents, or that they
were co-owners of the land in question, for as a matter of
fact the land appears registered in the name of Ciriaco
Custodio, coupled with the fact that petitioners filed the
instant action only after the lapse of 25 years from the date
of the registration of the land in Ciriaco's name, the right
of action of petitioners has already prescribed. This ruling
is now assigned as error.
ISSUE: Whether or not CA erred in its decision.
RULING: YES.
1) We find merit in this petition for review. An
examination of the evidence on record will clearly reveal
that the land in question was formerly a part of a big estate
known as "Hacienda Dona Bartola" which the Caridad
Estate of Cavite, Inc. bought in 1921. This hacienda was
later subdivided into small lots for resale to the public
giving preference to actual occupants.
Isaac Custodio was the occupant of the land in question
he being the lessee of its former owner. Taking advantage
of the offer given by the owner to the occupants, Isaac
bought the land he was occupying for P800.00 in 1922,
making as down payment the value of the share he was
holding with the corporation worth P600.00. When Isaac
died, the title has not yet been issued to him in view of his
inability to pay the purchase price in full, but the balance
of P60.00 was advanced by his daughter Alejandra.
Upon the payment of this balance, the manager of the
corporation suggested that since Ciriaco was the only
male in the family it would be convenient that the title be
issued in his name, to which his three sisters agreed. But
this notwithstanding, after the registration of the title in
the name of Ciriaco in 1928, his sisters took possession of
the land, with the exception of Ciriaco who was never in
possession thereof.
It further appears that, although the title of the land was
issued in the name Ciriaco the same however was at all
times kept in the possession of Alejandra, and later of
Valeriano, an uncle of plaintiffs, and it was only in 1951
when the title was given to Filomena Casiano who had
requested for it in connection with a transaction. It finally
appears that during the lifetime of Ciriaco the latter has
always acknowledged the ownership of his sisters over
the land and after his death, his widow had also
acknowledged on several occasions that the predecessors-
in-interest of the parties were co-owners of the land.
The elements abovementioned are not here present, with
the exception probably of the first one where we stated
that because of the conduct of respondents in requesting
for the delivery of the title, petitioners were prompted to
institute the present action. But not with regard to the rest.

Contrary to the above facts, respondents were not able to It appears that petitioners did not lose time in asserting
advance any proof justifying the purchase by Ciriaco of their right when they came to know of the conduct of
the property in question other than the mere fact that the respondents as regards their design to take advantage of
title was issued in his name, but of course this stand the property. Neither can respondents claim lack of
cannot be sustained for it appears sufficiently refuted by knowledge that petitioners would someday assert their
convincing evidence on record. right for they knew right along that their predecessor-in-
interest was merely a trustee of his other co-heirs. And
It is significant to note that respondents at first claimed respondents cannot finally invoke prejudice on their part
that the property was bought by Ciriaco directly from the in the event relief is accorded to petitioners for that is the
Caridad Estate of Cavite, Inc., but when confronted by consequence they should naturally expect from the
evidence showing that it was originally bought by Isaac relation of trust that existed between their predecessor-in-
Custodio, they later insinuated that it was only given to interest and his co-heirs. As a consequence, respondents
him to Isaac out of gratitude for services he rendered to cannot invoke the defense of laches.
his father. This inconsistent stand cannot but lend
WHEREFORE, the decision appealed from is reversed.
cogency to the claim of petitioners that the title to their
The decision of the court a quo dated April 2, 1956 is
land was issued in the name of Ciriaco merely with the hereby revived.
understanding that he would act as a trustee of his sisters.
There being, therefore, a relation of co-ownership
between the predecessors-in-interest of the parties herein,
it follows that the right of petitioners to bring the present
action cannot be deemed barred by prescription.
Under the foregoing facts, it is evident, and it must be so
declared, that, when the defendant procured the
registration of this land in his own name, he was acting in
a trust capacity and as representative of all of his brothers
and sisters. As a consequence, he is now holding the
registered title thereto in a trust capacity, and it is proper
for the court to declare that the plaintiffs are entitled to
their several pro rata shares, notwithstanding the fact that
the certificate of registration is in the name of the
defendant alone.

2) The contention that petitioners cannot bring the instant

action because of laches cannot also be sustained.

In order that this defense may be invoked, the following

requisites must be present:

(A) conduct on the part of the defendant giving rise to the

situation for which plaintiff seeks a remedy; (B) delay in
asserting complainant's rights after he had knowledge of
the defendant's conduct and after he have had an
opportunity to take action; (C) lack of knowledge on the
part of the defendant that the complainant would assert
the right on which he bases his suit and (D) injury or
prejudice to the defendant in the event relief is accorded
to the complainant..