implied trusts.docx

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TORBELA VS. SPS. ROSARIO

G.R. No. 140528 December 7,2011

MARIA TORBELA, rere!e"#e$ b% &er&e'r!, "(me)%* E+LOGIO TOSINO, &!b("$("$ c&')$re"* -LARO, MAIMINO,-ORNELIO, OLIVIA ("$ -ALITA, ())!r"(me$ TOSINO, APOLONIA TOSINOVDA. DE RAMIRE/ ("$ +LITA TOSINODEAN PEDRO TORBELA, rere!e"#e$ b%&'! &e'r!, "(me)%* OSE ("$ DIONISIO,bo#& !r"(me$ TORBELA E+ROSINATORBELA ROSARIO, rere!e"#e$ b% &er&e'r!, "(me)%* ESTEBAN T. ROSARIO,MAN+EL T. ROSARIO, ROM+LO T. ROSARIO("$ ANDREA ROSARIO3AD+-A LEONILATORBELA TAMIN ERNANDO TORBELA,rere!e"#e$ b% &'! &e'r!, "(me)%* SERGIO

T. TORBELA, E+TROPIA T. VELAS-O, PILART. /+L+ETA, -ANDIDO T. TORBELA,LORENTINA T. TORBELA ("$ PANTALEONT. TORBELA DOLORES TORBELA TABLADALEONORA TORBELA AG+STIN, rere!e"#e$b% &er &e'r!, "(me)%* PATRI-IO,SEG+NDO, -ONS+ELO ("$ ELI, ())!r"(me$ AG+STIN ("$ SEVERINATORBELA ILDEONSO, Pe#'#'o"er!,!.SPO+SES ANDRES T. ROSARIO ("$ LENAD+6+E3ROSARIO ("$ BAN-O ILIPINOSAVINGS AND MORTGAGEBAN, Re!o"$e"#!.

3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3

G.R. No. 140559

LENA D+6+E3ROSARIO, Pe#'#'o"er,!.BAN-O ILIPINO SAVINGS AND MORTGAGEBAN, Re!o"$e"#.

Presently before the Court are two consolidatedPetitions for Review on Certiorari under Rule 45of the Rules of Court, both assailing theDecision1 dated June 29, 1999 andResolution2 dated ctober 22, 1999 of theCourt of !""eals in C!#$%R% C& 'o% (9))*%

+he "etitioners in $%R% 'o% 14*52 are siblings%Dr% Rosario is the son of -ufrosina +orbelaRosario and the ne"hew of the other +orbelasiblings%

+he controversy began with a "arcel of landwith an area of ()4 s.uare /eters, located i0rdaneta City, Pangasinan ot 'o% (53#!% was originally "art of a larger "arcel of land6nown as ot 'o% (53 in the na/e of &alerian7e/illa &aleriano% 0nder une8"lainecircu/stances, &aleriano gave ot 'o% (53#! this sister arta 7e/illa, /arried to -ugen

+orbela s"ouses +orbela% 0"on the deaths othe s"ouses +orbela, ot 'o% (53#! waad:udicated in e.ual shares a/ong thechildren, the +orbela siblings, by virtue of Deed of -8tra:udicial Partition%

+orbela siblings e8ecuted a Deed of !bsolut;uitclai/ over ot 'o% (53#! and conveyed in favor of Dr% Rosario% <ence, +C+ 'o52)51 was issued in Dr% Rosario=s na/covering the said "ro"erty%

!nother Deed of !bsolute ;uitclai/ wasubse.uently e8ecuted this ti/e by Dr% Rosarioac6nowledging that he only borrowed ot 'o(53#! fro/ the +orbela siblings and waalready returning the sa/e to the lattefor P1%**% +he afore.uoted Deed wanotari>ed, but was not i//ediately annotateon +C+ 'o% 52)51%

?ollowing the issuance of +C+ 'o% 52)51, DRosario obtained a loan fro/ the D@P o?ebruary 21, 1935 in the su/ of P)*,2**%**

secured by a /ortgage constituted on ot 'o(53#!% Dr% Rosario used the "roceeds of thloan for the construction of i/"rove/ents osaid lot%

Cornelio +% +osino Cornelio e8ecuted a!Adavit of !dverse Clai/, on behalf of th

+orbela siblings, which de"osed: “it is thdesire of the parties, my aforestated kins, tregister ownership over the above-describe

property or to perfect their title over the sambut their Deed could not be registered becausthe registered owner now, Dr. RO!R"O

mortgaged the property with the D#$, and fowhich reason, the %itle is still held by the saibank&' +he aAdavit re.uests the Register oDeeds of Pangasinan to annotate their adversclai/ at the bac6 of +C+ 'o% 52)51, and thDeed of !bsolute ;uitclai/ by Dr% Rosario7ubse.uently, these deeds were allowed to bannotated as -ntry 'os% 2)44)1 and 2)44)res"ectively%

+he construction of a four#storey building oot 'o% (53#! was eventually co/"leted% +h

http://www.lawphil.net/judjuris/juri2011/dec2011/gr_140528_2011.html#fnt1






building was initially used as a hos"ital, butwas later converted to a co//ercial building%Part of the building was leased to P+B+ andthe rest to rs% !ndrea Rosario#<aduca, Dr%Rosario=s sister, who o"erated the Rose nn<otel and Restaurant%

Dr% Rosario was able to fully "ay his loan fro/D@P and the /ortagage was subse.uently

cancelled% Dr% Rosario ac.uired another loanP'@% +he loan was secured by /ortgagesconstituted on three "ro"erties which includedot 'o% (53#!, covered by +C+ 'o% 52)51% +hea/ended loan agree/ent and /ortgage on ot'o% (53#! was annotated on +C+ 'o% 52)51under -ntry 'o% 52**99

?ive days later, another annotation, -ntry 'o%52*439, was /ade on +C+ 'o% 52)51,canceling the adverse clai/ on ot 'o% (53#!under -ntry 'os% 2)44)1#2)44)2, on the basis

of the Cancellation and Discharge of ortgage%

Dr% Rosario and his wife, Du.ue#Rosarios"ouses Rosario, ac.uired a third loan in thea/ount of P1%2 and later reduced toP(*,*34%** fro/ @anco ?ili"ino% +o secure saidloan, the s"ouses Rosario again constituted/ortgages which included ot 'o% (53#! andwas annotated on +C+ 'o% 52)51%

@ecause @anco ?ili"ino "aid the balance of Dr%Rosario=s loan fro/ P'@, the /ortgage on ot

'o% (53#! in favor of P'@ was cancelled on +C+'o% 52)51%

+orbela siblings led before the R+C of 0rdaneta, Pangasinan, a Co/"laint EC&C!7- 0#4(59F was led for recovery of ownershi" and "ossession of ot 'o% (53#!,"lus da/ages, against the s"ouses Rosario%

+he s"ouses Rosario afterwards failed to "aytheir loan fro/ @anco ?ili"ino% @anco ?ili"inoe8tra:udicially foreclosed the /ortgagesincluding ot 'o% (53#!, and was the lonebidder for the foreclosed "ro"erties% +orbelasiblings i/"leaded @anco ?ili"ino as additionaldefendant in their co/"laint and "rayed thatthe s"ouses Rosario be ordered to redee/ ot'o% (53#! fro/ @anco ?ili"ino%

+he s"ouses Rosario instituted before the R+C acase for annul/ent of e8tra:udicial foreclosureagainst @anco ?ili"ino, 7heriG and Register of Deeds%

eanwhile, the +orbela siblings tried to redee/ot 'o% (53#! fro/ @anco ?ili"ino, but theeGorts were unsuccessful% 7ubse.uently, necerticates of title were issued in the na/e o@anco ?ili"ino including ot 'o% (53#!%

+he +orbela siblings thereafter led before thR+C on !ugust 29, 19 a Co/"laint foannul/ent of the Certicate of ?inal 7ale date

ay 24, 19, :udicial cancelation of +C+ 'o1351(, and da/ages, against @anco ?ili"inothe -8 Acio Provincial 7heriG, and thRegister of Deeds of Pangasinan, which wadoc6eted as Civil Case 'o% 0#4)((%

+he R+C :ointly heard the civil cases% declared that Dr% Rosario only holds ot% 'o(53#! in trust for the +orbela siblings%

ISS+E 1* H' +here was an e8"ress trusbetween the +orbela siblings and Dr% Rosario%

ELD* I-7%

+orbela siblings e8"lained that they one8ecuted the Deed as an acco//odation sthat Dr% Rosario could have ot 'o% (53#registered in his na/e and use said "ro"erty tsecure a loan fro/ D@P, the "roceeds of whicwould be used for building a hos"ital on ot 'o(53#! a clai/ su""orted by testi/onial andocu/entary evidence%

Dr% Rosario e8ecuted his own Deed of !bsolut;uitclai/, in which he e8"ressly ac6nowledgethat he Konly borrowedK ot 'o% (53#! and watransferring and conveying the sa/e bac6 tthe +orbela siblings for the consideratioof P1%**%

Dr% Rosario testied that he obtained ot 'o(53#! after "aying the +orbesiblings P25,***%**, "ursuant to a verbaagree/ent with the latter% +he Court thougobserves that Dr% Rosario=s testi/ony on the8ecution and e8istence of the verbagree/ent with the +orbela siblings lac6signicant details such as the na/es of th"arties "resent, dates, "laces, etc% and is nocorroborated by inde"endent evidence%

n addition, Dr% Rosario ac6nowledged the8ecution of the two Deeds of !bsolut;uitclai/ even aAr/ing his own signature othe latter Deed% +he Parol -vidence Ru"rovides that when the ter/s of the agree/enhave been reduced into writing, it is considere



as containing all the ter/s agreed u"on andthere can be, between the "arties and theirsuccessors in interest, no evidence of suchter/s other than the contents of the writtenagree/ent%

-ven if the Court considers Dr% Rosario=stesti/ony on his alleged verbal agree/entwith the +orbela siblings, the Court nds the

sa/e unsatisfactory% Dr% Rosario averred thatthe two Deeds were e8ecuted only because hewas K"lanning to secure loan fro/ D@P andP'@ and the ban6 needed absolute.uitclai/L%MK5 Hhile Dr% Rosario=s e8"lanation/a6es sense for the rst Deed of !bsolute;uitclai/ e8ecuted by the +orbela siblingswhich transferred ot 'o% (53#! to Dr%Rosario, the sa/e could not be said for thesecond Deed of !bsolute ;uitclai/ e8ecutedby Dr% Rosario% n fact, Dr% Rosario=s Deed of !bsolute ;uitclai/ in which he ad/itted that

he only borrowed ot 'o% (53#! and wastransferring the sa/e to the +orbela siblingsfor P1%**%** would actually wor6 against thea""roval of Dr% Rosario=s loan by the ban6s%7ince Dr% Rosario=s Deed of !bsolute ;uitclai/is a declaration against his self#interest, it /ustbe ta6en as favoring the truthfulness of thecontents of said Deed%

t can also be said that Dr% Rosario is esto""edfro/ clai/ing or asserting ownershi" over ot'o% (53#! based on his Deed of !bsolute;uitclai/% Dr% RosarioNs ad/ission in the said

Deed that he /erely borrowed ot 'o% (53#! isdee/ed conclusive u"on hi/%

+rust is the right to the benecial en:oy/ent of "ro"erty, the legal title to which is vested inanother% t is a duciary relationshi" thatobliges the trustee to deal with the "ro"erty forthe benet of the beneciary% +rust relationsbetween "arties /ay either be e8"ress ori/"lied% !n e8"ress trust is created by theintention of the trustor or of the "arties, whilean i/"lied trust co/es into being by o"eration

of law%

+he Court recogni>ed that a trust /ay have aconstructive or i/"lied nature in the beginning,but the registered owner=s subse.uent e8"ressac6nowledge/ent in a "ublic docu/ent of a"revious sale of the "ro"erty to another "arty,had the eGect of i/"arting to theafore/entioned trust the nature of an e8"resstrust% +he sa/e situation e8ists in this case%Hhen Dr% Rosario was able to register ot 'o%(53#! in his na/e under +C+ 'o% 52)51, an

i/"lied trust was initially established betweehi/ and the +orbela siblings under !rticle 145of the Civil Code%

Dr% Rosario=s e8ecution of the Deed of !bsolut;uitclai/, containing his e8"ress ad/issiothat he only borrowed ot 'o% (53#! fro/ th

+orbela siblings, eventually transfor/ed thnature of the trust to an e8"ress one% +h

e8"ress trust continued des"ite Dr% Rosaristating in his Deed of !bsolute ;uitclai/ thahe was already returning ot 'o% (53#! to th

+orbela siblings as ot 'o% (53#! re/aineregistered in Dr% Rosario=s na/e under +C+ 'o52)51 and Dr% Rosario 6e"t "ossession of sai"ro"erty, together with the i/"rove/entthereon%

ISS+E 2* H' the right of the +orbela siblingto recover ot 'o% (53#! has "rescribed%

ELD* '%

KHhile there are so/e decisions which holthat an action u"on a trust is i/"rescri"tiblewithout distinguishing between e8"ress ani/"lied trusts, the better rule, as laid down bthis Court in other decisions, is tha"rescri"tion does su"ervene where the trust /erely an i/"lied one%

0nder 7ection 4* of the old Code of CivProcedure, all actions for recovery of rea

"ro"erty "rescribed in 1* years, e8ce"ting onactions based on continuing or subsistintrusts that were considered by section ( ai/"rescri"tible% !s held in the case of Dia> v$orricho, #11229, arch 29, 195, howevethe continuing or subsisting trustconte/"lated in section ( of the Code of CivProcedure referred only to e8"resunre"udiated trusts, and did not includconstructive trusts that are i/"osed by lawwhere no duciary relation e8ists and thtrustee does not recogni>e the trust at all%K

+his "rinci"le was a/"lied in -scay v% Court o!""eals this wayO K-8"ress trusts "rescribe 1years fro/ the re"udiation of the trust%F

+o a""ly the 1*#year "rescri"tive "eriod, whicwould bar a beneciary=s action to recover ian e8"ress trust, the re"udiation of the trus/ust be "roven by clear and convincinevidence and /ade 6nown to the beneciaryn an e8"ress trust, the delay of the beneciaris directly attributable to the trustee wh






underta6es to hold the "ro"erty for the for/er,or who is lin6ed to the beneciary bycondential or duciary relations% +he trusteeNs"ossession is, therefore, not adverse to thebeneciary, until and unless the latter is /adeaware that the trust has been re"udiated%

Dr% Rosario argues that he is dee/ed to havere"udiated the trust on Dece/ber 13, 1934,

when he registered ot 'o% (53#! in his na/eunder +C+ 'o% 52)51, so when on ?ebruary 1(,193, the +orbela siblings instituted before theR+C Civil Case 'o% 0#4(59, for the recovery of ownershi" and "ossession of ot 'o% (53#!fro/ the s"ouses Rosario, over 21 years had"assed% Civil Case 'o% 0#4(59 was alreadybarred by "rescri"tion, as well as laches%

t is clear that under the foregoing :uris"rudence, the registration of ot 'o% (53#!by Dr% Rosario in his na/e under +C+ 'o%

52)51 is not the re"udiation that would havecaused the 1*#year "rescri"tive "eriod for theenforce/ent of an e8"ress trust to run%

+he C! held that Dr% Rosario re"udiated thee8"ress trust when he ac.uired another loanfro/ P'@ and constituted a second /ortgageon ot 'o% (53#! so/eti/e in 19)9, which,unli6e the rst /ortgage to D@P in 1935, waswithout the 6nowledge andor consent of the

+orbela siblings%

+he Court only concurs in "art with the C! onthis /atter%

?or re"udiation of an e8"ress trust to beeGective, the une.uivocal act of re"udiationhad to be /ade 6nown to the +orbela siblingsas the cestuis .ue trust and /ust be "roven byclear and conclusive evidence% ! scrutiny of

+C+ 'o% 52)51 reveals the following inscri"tionO

E -ntry 'o% 52**99

!/end/ent of the /ortgage in favor of P'@inscribed under -ntry 'o% 49*35 in the sensethat the consideration thereof has beenincreased to P<PP'- P-77 ?our <undred?ifty +housand Pesos only P45*,***%** and tosecure any and all negotiations with P'@,whether contracted before, during or after thedate of this instru/ent, ac6nowledged before'otary Public of Pangasinan !le:o % Dato asDoc% 'o% 19, Page 'o% 41, @oo6 'o% 11, 7eriesof 195%

Date of nstru/ent arch 5, 191

Date of nscri"tion arch 3, 191 F

!lthough according to -ntry 'o% 52**99, thoriginal loan and /ortgage agree/ent of o'o% (53#! between Dr% Rosario and P'@ wa"reviously inscribed as -ntry 'o% 49*35, -ntr'o% 49*35 does not actually a""ear on +C

'o% 52)51 and, thus, it cannot be used as threc6oning date for the start of the "rescri"tiv"eriod%

+he +orbela siblings can only be charged wit6nowledge of the /ortgage of ot 'o% (53#! tP'@ on arch 3, 191 when the a/ended loaand /ortgage agree/ent was registered o

+C+ 'o% 52)51 as -ntry 'o% 52**99% -ntry 'o52**99 is constructive notice to the wholworld that ot 'o% (53#! was /ortgaged by DRosario to P'@ as security for a loan% <ence

Dr% Rosario is dee/ed to have eGectivelre"udiated the e8"ress trust between hi/ anthe +orbela siblings on arch 3, 191, on whicday, the "rescri"tive "eriod for thenforce/ent of the e8"ress trust by the +orbelsiblings began to run%

?ro/ arch 3, 191, when the a/ended loaand /ortgage agree/ent was registered o

+C+ 'o% 52)51, to ?ebruary 1(, 193, when th +orbela siblings instituted before the R+C CivCase 'o% 0#4(59 against the s"ouses Rosario

only about ve years had "assed% +he +orbelsiblings were able to institute Civil Case 'o% 04(59 well before the la"se of the 1*#yea"rescri"tive "eriod for the enforce/ent of thee8"ress trust with Dr% Rosario%

Civil Case 'o% 0#4(59 is li6ewise not barred blaches% aches /eans the failure or neglect, foan unreasonable and une8"lained length oti/e, to do that which by e8ercising dudiligence could or should have been donearlier% t is negligence or o/ission to assert right within a reasonable ti/e, warranting

"resu/"tion that the "arty entitled to assert either has abandoned it or declined to assert i

!s the Court e8"lained in the "recedin"aragra"hs, the +orbela siblings instituted CivCase 'o% 0#4(59 ve years after Dr% Rosario=re"udiation of the e8"ress trust, still within th1*#year "rescri"tive "eriod for enforce/ent osuch trusts% +his does not constitute aunreasonable delay in asserting oneNs right% delay within the "rescri"tive "eriod sanctioned by law and is not considered to be



delay that would bar relief% aches a""ly onlyin the absence of a statutory "rescri"tive"eriod%)5

noteO +he Court nds that @anco ?ili"inois not a /ortgagee in good faith% -ntry 'os%2)44)1#2)44)2 were not validly cancelled, andthe i/"ro"er cancellation should have beena""arent to @anco ?ili"ino and aroused

sus"icion in said ban6 of so/e defect in Dr%Rosario=s title%

R0'$O @anco ?ili"ino is RD-R-D treconvey ot 'o% (53#! to the +orbela siblings

+he Register of Deeds of Pangasinan RD-R-D to cancel +C+ 'o% 1351( in thna/e of @anco ?ili"ino and to issue a necerticate of title in the na/e of the +orbelsiblings for ot 'o% (53#!



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