WEEK 12 eSCRA Compilation

Baldoz v Papa
G.R. No. L-18150

1. Review of decree of registration; Petition must be in form of motion filed in same

proceedings.—It is Settled that registration procedings being in rem are binding upon
the whole world, and that a final decree of registration issued therein in accordance with
law is reviewable only within one year and upon the ground of fraud. Any petition to set
aside the decree must be filed within one year from the issuance thereof, not in the form
of a separate action but in the form of a motion filed in the same registration proceeding
where the decree was issued.

Cal Jr. vs. Zosa

G.R. No. 152518

1. The right of a person deprived of land or of any estate or interest therein by adjudication
or confirmation of title obtained by actual or extrinsic fraud is recognized by law under
Section 32 of P.D. No. 1529.—The right of a person deprived of land or of any estate or
interest therein by adjudication or confirmation of title obtained by actual or extrinsic
fraud is recognized by law under Section 32 of P.D. No. 1529, thus: Review of decree of
registration; Innocent purchaser for value.—The decree of registration shall not be
reopened or revised by reason of absence, minority, or other disability of any person
adversely affected thereby, nor by any proceeding in any court for reversing judgments,
subject, however, to the right of any person, including the government and the branches
thereof, deprived of land or of any estate or interest therein by such adjudication or
confirmation of title obtained by actual fraud, to file in the proper Court of First Instance
(now the Regional Trial Court) a petition for reopening and review of the decree of
registration not later than one year from and after the date of the entry of such decree of
registration, but in no case shall such petition be entertained by the court where an
innocent purchaser for value has acquired the land or an interest therein, whose rights
may be prejudiced.

2. Fraud is of two kinds: actual or constructive. Actual or positive fraud proceeds from an
intentional deception practiced by means of the misrepresentation or concealment of a
material fact. Constructive fraud is construed as a fraud because of its detrimental effect
upon public interests and public or private confidence, even though the act is not done
with an actual design to commit positive fraud or injury upon other persons.

3. Fraud may also be either extrinsic or intrinsic. Fraud is regarded as intrinsic where the
fraudulent acts pertain to an issue involved in the original action, or where the acts
constituting the fraud were or could have been litigated therein. Fraud is regarded as
extrinsic where it prevents a party from having a trial or from presenting his entire case
to the court, or where it operates upon matters pertaining not to the judgment itself but to
the manner in which it is procured, so that there is not a fair submission of the
 controversy. Extrinsic fraud is also actual fraud, but collateral to the transaction sued
upon.

4. For fraud to justify a review of a decree, it must be extrinsic or collateral and the facts
upon which it is based have not been controverted or resolved in the case where the
judgment sought to be annulled was rendered.—The “fraud” contemplated by Section
32, P.D. No. 1529 is extrinsic. For fraud to justify a review of a decree, it must be
extrinsic or collateral, and the facts upon which it is based have not been controverted or
resolved in the case where the judgment sought to be annulled was rendered.

5. Relief on the ground of fraud will not be granted where the alleged fraud goes into the
merits of the case, is extrinsic and not collateral and has been controverted and
decided.—We have repeatedly held that relief on the ground of fraud will not be granted
where the alleged fraud goes into the merits of the case, is intrinsic and not collateral,
and has been controverted and decided, like what is very much obtaining in the present
case.

Crisolo vs. Court of Appeals

No. L-33093

1. One who abandons his opposition in a land registration case is not entitled to reopening
of proceedings by means of petition for review based on fraud under Section 38 of Act
496.—The persons contemplated under Section 38 of Act 496, to be entitled to a review
of a decree of registration, are those who were fraudulently deprived of their opportunity
to be heard in the original registration case. Such is not the situation of the private
respondents here. They were not denied their day in court by fraud, which the law
provides as the sole ground for reopening of the decree of registration. In fact they
opposed the registration but failed to substantiate their opposition.

2. To be entitled to reopening of decree proceedings, specific, not mere general allegation,

of actual, extrinsic fraudulent acts must be alleged and proved.—Mere allegation of fraud
is not enough. Specific, intentional acts to deceive and deprive another of his right, or in
some manner injure him, must be alleged and proved. There must be actual or positive
fraud as distinguished from constructive fraud to entitle one to the reopening of a decree
of registration. And it must be extrinsic and not intrinsic fraud. This is necessary to
maintain the stability of judicial decisions and save the precious time of the courts from
being wasted by unnecessary proceedings. Otherwise, We will be opening the floodgate
of delay in the disposition of cases and thus contributing to the perennial problem of the
clogging of court dockets. No premium should be given to sheer negligence of parties,
otherwise We will encourage delay in the administration of justice.

Fil-Estate Management, Inc. vs. Trono,

G.R. No. 130871
 1. The Regional Trial Court (formerly Court of First Instance) has the authority to act, not
only on applications for original registration of title to land, but also on all petitions filed
after the original registration of title.—Pursuant to the above provisions, the Regional
Trial Court (formerly Court of First Instance) has the authority to act, not only on
applications for original registration of title to land, but also on all petitions filed after the
original registration of title. Thus, it has the authority and power to hear and determine all
questions arising from such applications or petitions. The Court of Appeals, therefore,
erred in ruling that the Regional Trial Court, Branch 255, Las Piñas City has no
jurisdiction over LRC Case No. M-228 on the ground that the land subject of
respondents’ application for registration was already registered in the Registry of Deeds
of Las Piñas City.

2. It is well settled that a Torrens title cannot be collaterally attacked, the issue on the
validity of title, i.e., whether or not it was fraudulently issued can only be raised in an
action expressly instituted for the purpose.—Respondents’ application for registration of
a parcel of land already covered by a Torrens title is actually a collateral attack against
petitioners’ title not permitted under the principle of indefeasibility of a Torrens title. It is
well settled that a Torrens title cannot be collaterally attacked; the issue on the validity of
title, i.e., whether or not it was fraudulently issued, can only be raised in an action
expressly instituted for the purpose. Hence, whether or not respondents have the right to
claim title over the property in question is beyond the province of the instant proceeding.
That should be threshed out in a proper action. It has been invariably stated that the real
purpose of the Torrens System is to quiet title to land and to stop forever any question
as to its legality. Once a title is registered, the owner may rest secure, without the
necessity of waiting in the portals of the court, or sitting on the “mirador su casa” to avoid
the possibility of losing his land.

3. A decree of registration that has become final shall be deemed conclusive not only on
the questions actually contested and determined, but also upon all matters that might be
litigated or decided in the land registration proceedings.—A decree of registration that
has become final shall be deemed conclusive not only on the questions actually
contested and determined, but also upon all matters that might be litigated or decided in
the land registration proceedings. As per records of the Registry of Deeds of Las Piñas
City, TCT No. T-9182 was registered in petitioners’ name as early as April 28, 1989, or
five (5) years before the filing of respondents’ application for registration. Thus, it is too
late for them (respondents) to question petitioners’ titles considering that the Certificates
of Title issued to the latter have become incontrovertible after the lapse of one year from
the decree of registration.

Almarza vs. Arguelles

No. L-49250

1. Prescription cannot be invoked in an action for reconveyance which is in effect an action

to quiet title against the plaintiff in possession of the land for many years; Reason; Sale
to plaintiff acknowledged in an affidavit annotated at the back of the tax declaration.—
First. It is not disputed that petitioner has been in possession as owner of the disputed
 portion of Lot No. 5815 since 1929 by reason of a sale in her and her husband's favor by
the original owner thereof, Romualdo Grana, predecessor-in-interest of private
respondents. Said sale was even acknowledged by Laura Pancrudo, mother of private
respondents Asuncion and Gilda Arguelles. in an affidavit annotated at the back of Tax
Declaration No. 456. From that time on, petitioner and/or her husband cultivated the
land, gathered the produce thereof, declared the same in her and/or her husband's
name for taxation purposes and accordingly paid the realty taxes due thereon. In
Caragay-Layno v. Court of Appeals, 133 SCRA 718, citing Sapto, et al. v. Fabiana, 103
Phil. 683 and Faja v. Court of Appeals, 75 SCRA 441, cases with similar factual
backgrounds as the instant case, We held that prescription cannot be invoked in an
action for reconveyance, which is, in effect, an action to quiet title against the plaintiff
therein who is in possession of the land in question. The reason, We explained, is "that
as lawful possessor and owner of the Disputed Portion, her cause of action for
reconveyance which, in effect, seeks to quiet title to property in one's possession is
imprescriptible. Her undisturbed possession over a period of fifty-two [52] years (48
years in this case) gave her a continuing right to seek the aid of a Court of equity to
determine the nature of the adverse claim of a third party and the effect on her title.

2. Prescription commences to run only from the time the possessor was made aware of a
claim adverse to his own.—We further stated that if ever prescription may be invoked, it
may be said to have commenced to run only from the time the possessor was made
aware of a claim adverse to his own. In the case at bar, petitioner was made aware of
such adverse claim only upon service on her of the summons in Civil Case No. 11051.
As her action for reconveyance, or to quiet title was contained in her counterclaim, the
same cannot be said to have already prescribed.

3. A land registration court has no jurisdiction to decree a lot to persons who have no claim
in it and who never asserted any right to ownership over it; Remedy for wrongful
registration is, after one year from date of the decree, not to set aside the decree, but to
bring an ordinary action for reconveyance, or for damages if the property has passed
into the hands of an innocent purchaser for value.—Second. The evidence submitted by
Josefa Malote during the Cadastral hearing consisted of tax declaration No. 3909
covering only a portion of Lot No. 5815 designated as Lot No. 5815-A and land tax
receipt dated March 30, 1950 showing payment of real estate tax for a portion only of Lot
No. 5815, designated as Lot No. 5815-A in said tax declaration No. 3909. In so doing,
she laid claim only to said portion of Lot No. 5815 and did not assert ownership over the
disputed portion, known as Lot No. 5815-B. This being the case. the inclusion of the
disputed portion in OCT No. 0-134 is "void and of no effect for a land registration court
has no jurisdiction to decree a lot to persons who have put no claim in it and who never
asserted any right of ownership over it." "The remedy of the landowner whose property
has been wrongfully or erroneously registered in another's name is, after one year from
date of the decree, not to set aside the decree, but respecting the decree as
incontrovertible and no longer open to review, to bring an ordinary action in the ordinary
court of justice for reconveyance or if the property has passed into the hands of an
innocent purchaser for value, for damages." Petitioner availed herself of this remedy
seasonably.
 4. Neglect or failure of private respondents to assert their alleged right under the certificate
of title for an unreasonable length of time makes them guilty of laches.—Third. Private
respondents obtained OCT No. 0-134 on May 29, 1951. Their action was instituted only
on April 20, 1977, or after a lapse of twenty-six [26] years. The neglect or failure of
private respondents to assert their alleged right under the certificate of title for such
unreasonable length of time makes them guilty of laches. They should now be held
either to have abandoned or waived whatever right they may have under said certificate
of title.

5. Land-grabbing; Unjust enrichment; To adjudge private respondents owner of the

disputed lot based merely on its having been erroneously included in their certificate of
title would be attaching credence to a Torrens title oblivious to the demands of justice
and putting a premium on land-grabbing and transgressing the broader principle in
human relations against unjust enrichment.—On this premise, to adjudge private
respondents owner of the disputed portion of Lot No. 5815 on the basis merely of its
having been erroneously included in their certificate of title would indeed be "a sad day
for the law" for then. We shall be "attaching full faith and credence to a Torrens
certificate of title" "oblivious to the demands of justice" and anchoring our decision
"solely on a narrow and literal reading of a statutory prescription, devoid of any shadow
of moral right." Furthermore, We shall be putting a premium on land-grabbing and
transgressing the broader principle in human relations that no person shall unjustly
enrich himself at the expense of another.

Bautista-Borja vs. Bautista

G.R. No. 136197 December 10, 2008

1. Prescription; Following Article 1410 of the Civil Code, petitioner’s action is one for
declaration of the nullity of the Deeds of Sale which she claims to be either falsified and
there was no consideration therefor is imprescriptible.—From the earlier quoted-
allegations in petitioner’s complaint, it is clear that her action is one for declaration of the
nullity of the Deeds of Sale which she claims to be either falsified—because at the time
of the execution thereof, Pablo was already gravely ill and bedridden, hence he could
not have gone and appeared before the Notary Public, much less understood the
significance and legal deeds—and/or because there was no consideration therefor.
Clearly, following Article 1410 of the Civil Code, petitioner’s action is imprescriptible.

2. An action for reconveyance of property based on a void contract does not prescribe.—
But even if petitioner’s complaint were to be taken as one for reconveyance, given that it
is based on an alleged void contract, it is just the same as imprescriptible. x x x x Thus, if
the trial court finds that the deed of sale is void, then the action for the declaration of the
contract’s nullity is imprescriptible. Indeed, the Court has held in a number of cases that
an action for reconveyance of property based on a void contract does not prescribe.
However, if the trial court finds that the deed of sale is merely voidable, then the action
would have already prescribed
Esconde vs. Barlongay,
152 SCRA 603, No. L-67583 July 31, 1987

1. In case a decree of registration is obtained by fraud, party defrauded has one year from
entry of the decree to file a petition for review, provided there has been no transfer to an
innocent purchaser for value.—lt is a settled doctrine that when a decree of registration
has been obtained by fraud, the party defrauded has only one year from entry of the
decree to file a petition for review before a competent court, provided that the land has
not been transferred to an innocent purchaser for value. \

2. Failure to object to registration under Torrens System or to question its validity within
one year after issuance of certificate of title claimant lost his right to such land.—It has
been held that a claimant having failed to present his answer or objection to the
registration of a parcel of land under the Torrens System or to question the validity of
such registration within a period of one year after the certificate of title had been issued,
had forever lost his right in said land even granting that he had any right therein.

3. Action for reconveyance—a legal remedy granted to rightful owner of land wrongfully or
erroneously registered in the name of another to compel the latter to reconvey the land
to him.—An action for reconveyance is a legal and equitable remedy granted to the
rightful owner of land which has been wrongfully or erroneously registered in the name
of another for the purpose of compelling the latter to transfer or reconvey the land to him.

4. Action height one year from issuance of decree.—The prevailing rule in this jurisdiction
does not bar a landowner whose property was wrongfully or erroneously registered
under the Torrens System from bringing an action, after one year from the issuance of
the decree, for the reconveyance of the property in question. Such an action does not
aim or purport to re-open the registration proceeding and set aside the decree of
registration, but only to show that the person who secured the registration of the
questioned property is not the real owner thereof (Rodriguez v. Toreno, 79 SCRA 357
[1977]). ordinary civil action for reconveyance does not seek to set aside the decree but
respecting the decree as incontrovertible and no longer open to review, seeks to transfer
or reconvey the land from the registered owner to the rightful owner (Director of Lands,
et. al. v. Register of Deeds, et al. 92 Phil. 827 [1953]).

5. Action for reconveyance of property on the ground of fraud—filed within four years from
discovery of fraud—Petitioner's action for reconveyance had already prescribed. An
action for reconveyance of real property on the ground of fraud must be filed within four
(4) years from the discovery of the fraud. Such discovery is deemed to have taken place
from the issuance of an original certificate of title (Babin v. Medalla, 108 SCRA 666; and
Alarcon v. Bidin, 120 SCRA 390).

Heirs of Tranquilino Labiste vs. Heirs of Jose Labiste,

587 SCRA 417, G.R. No. 162033 May 8, 2009
 1. 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.—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. 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.

2. The rule requires a clear repudiation of the trust duly communicated to the beneficiary.—
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.
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. 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.

Joaquin vs. Cujuangco,

20 SCRA 769, No. L-18060 July 25, 1967

1. A decree of registration quiets title to the land def initely, subject only to reopening within
a period of one year.

2. When action for reconveyance of registered land cannot prosper.—Certain parcels of

land registered under the Torrens system in 1921 and 1925, allegedly in the names of
the administrators thereof in their f iduciary capacity, can no longer be recovered in 1959
from the persons to whom said lands were transferred by the administrators. The trust
relationship did not extend to the transferees, who acquired the lands for value and
claimed adverse title in themselves. The action for reconveyance on the theory of trust
might prosper, if at all, against the trustees and provided that they still hold the lands, but
not against third persons who do not occupy the same fiduciary position

3. Prescription under the old law; Action filed beyond the ten-year period is barred.—An
action filed in 1959 to recover lands acquired by the defendants in 1928 and 1936 and
held by them adversely since then is barred under section 41 of the Code of Civil
Procedure. Their adverse possession ripened into ownership by prescription for ten
years.
 4. Acquisitive prescription over mortgaged land.—Where land was sold to the defendant in
1913 and the seller claims that the sale was in reality a mortgage and that he off ered to
redeem the mortgage in 1917 but the defendant did not allow the redemption and the
action to recover the land was filed in 1959, the action cannot prosper because the
defendant's adverse possession of the land ripened into a dominical title by prescription
after the lapse of ten years.

Khemani vs. Heirs of Anastacio Trinidad,

540 SCRA 83, G.R. No. 147340 December 13, 2007

1. Interlocutory Orders; Motion to Dismiss; Certiorari; An order denying a motion to dismiss

is an interlocutory order, and, as a general rule, cannot be questioned in a special civil
action for certiorari.—It has long been settled that an order denying a motion to dismiss
is an interlocutory order. It neither terminates nor finally disposes of a case, as it leaves
something to be done by the court before the case is finally decided on the merits. As
such, the general rule is that the denial of a motion to dismiss cannot be questioned in a
special civil action for certiorari. However, there are exceptions to the general rule. In
Velarde v. Lopez, Jr., 419 SCRA 422 (2004), the Court held that resort to a special civil
action for certiorari is allowed when the ground for the motion to dismiss is improper
venue, lack of jurisdiction, or res judicata as in the case at bar. Thus, petitioner did not
commit a procedural error in filing a petition for certiorari before the Court of Appeals.

2. Res Judicata; Requisites; Words and Phrases; Res judicata literally means “a matter
adjudged; a thing judicially acted upon or decided; a thing or matter settled by
judgment,” and lays the rule that an existing final judgment or decree rendered on the
merits, and without fraud or collusion, by a court of competent jurisdiction, upon any
matter within its jurisdiction, is conclusive of the rights of the parties or their privies, in all
other actions or suits in the same or any other judicial tribunal of concurrent jurisdiction
on the points and matters in issue in the first suit.—In Oropeza Marketing Corp. v. Allied
Banking Corp., 393 SCRA 278 (2002), we held that res judicata literally means “a matter
adjudged; a thing judicially acted upon or decided; a thing or matter settled by
judgment.” It lays the rule that an existing final judgment or decree rendered on the
merits, and without fraud or collusion, by a court of competent jurisdiction, upon any
matter within its jurisdiction, is conclusive of the rights of the parties or their privies, in all
other actions or suits in the same or any other judicial tribunal of concurrent jurisdiction
on the points and matters in issue in the first suit. A case is barred by prior judgment or
res judicata when the following requisites concur: (1) the former judgment is final; (2) it is
rendered by a court having jurisdiction over the subject matter and the parties; (3) it is a
judgment or an order on the merits; and (4) there is—between the first and the second
actions—identity of parties, subject matter, and causes of action.

3. Reconveyance; Prescription; Trusts; An aggrieved party may file an action for

reconveyance based on implied or constructive trust, which prescribes in ten years from
the date of the issuance of the certificate of title over the property provided that the
 property has not been acquired by an innocent purchaser for value.—Even assuming
arguendo that respondents filed their action after one year, they may still be entitled to
relief. An aggrieved party may file an action for reconveyance based on implied or
constructive trust, which prescribes in ten years from the date of the issuance of the
certificate of title over the property provided that the property has not been acquired by
an innocent purchaser for value. Respondents clearly asserted in their complaint that
they and their predecessors-in-interest have long been the owners of the Disputed
Property and that they were fraudulently deprived of ownership thereof when the Peña
Heirs obtained a patent and certificate of title in their favor. These allegations certainly
measure up to the requisite statement of facts to constitute an action for reconveyance.
Khemani vs. Heirs of Anastacio Trinidad, 540 SCRA 83, G.R. No. 147340 December 13,
2007asserted in their complaint that they and their predecessors-in-interest have long
been the owners of the Disputed Property and that they were fraudulently deprived of
ownership thereof when the Peña Heirs obtained a patent and certificate of title in their
favor. These allegations certainly measure up to the requisite statement of facts to
constitute an action for reconveyance.

4. Accretions to the original lot awarded by the Government to a private individual do not
belong to the Government—the Bureau of Lands does not have authority to subdivide
and allocate the same to other individuals.—It appears from the records that after our
ruling in the Assistant Executive Secretary case in 1989, the BOL issued a Patent on
September 20, 1993 in favor of the Peña Heirs which became the basis for the issuance
of OCT No. P-33658 covering Lot No. 107. However, as held in the Assistant Executive
Secretary case, Lot No. 107—as accretions to the original lot (Lot No. 355) awarded to
Larrabaster on July 10, 1950—“no longer belonged to the Government[,] the subdivision
thereof by the Bureau of Lands into three lots (Lot No. 107, Lot No. 108 and Lot No.
109), as well as the allocation of said lots to two other individuals, was beyond the scope
of its authority.” As a result, while Lot No. 107 may no longer be acquired under the
provisions of the Public Land Act, it does not absolutely foreclose the possibility that, as
a private property, a portion thereof (the Disputed Property) may have been acquired by
respondents through acquisitive prescription under the Civil Code. These matters,
however, are the proper subject of a separate action should one be filed subject, of
course, to such claims and defenses that either party may have under relevant laws.

Lopez vs. Court of Appeals,

574 SCRA 26, G.R. No. 157784 December 16, 2008

1. Trusts; Implied trusts are either resulting or constructive trusts; Difference between the
two kinds of implied trusts.—In Aznar Brothers Realty Company v. Aying, 458 SCRA 496
(2005), 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.

2. 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.—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. Specific examples of resulting trusts may be found in the Civil Code,
particularly Arts. 1448, 1449, 1451, 1452 and 1453.

3. 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.—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. 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. Constructive trusts
are illustrated in Arts. 1450, 1454, 1455 and 1456.

4. Reconveyance; Prescription; An action for reconveyance based on implied or

constructive trust prescribes in ten (10) years reckoned from the date of the issuance of
the original certificate of title or transfer certificate of title.—The right to seek
reconveyance based on an implied or constructive trust is not absolute. It is subject to
extinctive prescription. 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.

5. 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.—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. 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. 
Marcopper Mining Corporation vs. Garcia,
143 SCRA 178, No. L-55935 July 30, 1986

1. Exceptions to the rule that a motion to dismiss on the ground that the complaint states
no cause of action hypothetically admits the truth of the facts alleged in the complaint.—
Tins motion supplanted, the general demurrer in an action at law and, as a rule admits,
for the purpose of the motion, all facts which are well pleaded. However, while the court
must accept as true all well pleaded facts, the motion does not admit allegations of
which the court will take judicial notice are not true, nor does the rule apply to legally
impossible facts, nor to facts inadmissible in evidence, nor to facts which appear by
record or document included in the pleadings to be unfounded (Vol. 1, Moran’s
Comments on the Rules of Court, 1970 ed., p. 505, citing cases).

2. Public Lands Act; An allegation that the plaintiff as a 30-year possessor of subject land is
entitled to have its ownership “confirmed or ratified,” admits that the land is public land.
—While the petitioner concludes in the complaint that the land being private, could not
have been the subject of an application for free patent, the petitioner based this
conclusion from its allegation that “By itself and through its predecessors-in-interest,
plaintiff has been in possession of subject land for more than 30 years in the manner
prescribed by law, and therefore, it is entitled pursuant to existing laws to have its
ownership in fee simple of the land confirmed or ratified.” The petitioner thereby admitted
that until such confirmation, the land remains public.

3. An allegation in the complaint that is legal in nature is not deemed admitted for purposes
of resolving motions to dismiss.—Furthermore, the petitioner also alleged that
“Buenaventura Paez, was the rightful owner and that it was the latter and his successor-
in-interest, the herein plaintiff (petitioner), by virtue of the subsequent sale and transfer
of the land to it, who had performed and/or possessed the conditions required by the
laws for the issuance of a free patent decree on the land.” Thus, the trial court could not
have sustained the petitioner’s allegation that the land was private even for the purpose
of the motion to dismiss as this conclusion would be patently unfounded.

4. Prescription; An allegation that defendant was able to register the land in question
without the knowledge of the plaintiff is an allegation that fraud was committed by the
defendant, not an allegation of implied trust. The action thus prescribes in 4 years.—The
petitioner also admitted in its complaint that a free patent in respondent’s name had
been issued for the land in question, after the latter had succeeded in making the land
inspector and/or functionaries of the Bureau of Lands and other government agencies
believe, among others, that respondent had performed or fulfilled the conditions
prescribed under R.A. 782 and Com. Act 141, as amended, for entitlement to a free
patent title. It stated that as a consequence, a free patent was issued in favor of
respondent on August 29, 1973 and the corresponding OCT on October 23, 1973. While
petitioner alleged the above facts, it likewise admitted that it learned of the same only in
1975, after more than one year from the issuance of the respondent’s OCT; and that the
complaint was filed only in 1979 which was clearly more than the four-year prescriptive
period from August 29, 1973 provided by law within which an action for reconveyance on
 the ground of fraud may be filed. Although the petitioner pleaded the existence of an
implied trust in its favor, all of its allegations only attempted to show fraud on the part of
the respondent. Thus, it is obvious that from the complaint itself, the prescriptive period
which is applicable in the case is four years and not ten years as the petitioner
maintains.

5. The trial court can consider all the pleadings filed, including annexes, motions and
evidence then on record for purposes of resolving a motion to dismiss based on lack of
cause of action.—In the present case, before the trial court issued the questioned order
dismissing petitioner’s complaint, it had the opportunity to examine the merits of the
complaint, the answer with counterclaim, the petitioner’s answer to the counterclaim and
its answer to the request for admission. It was but logical for said court to consider all of
these pleadings in determining whether or not there was a sufficient cause of action in
the petitioner’s complaint. The order of dismissal was in the nature of a summary
judgment.

6. Mere possession of public land for more than 30 years does not automatically divest it of
its public character.—Records reveal that no application for confirmation of incomplete
or imperfect title had been filed by respondent’s predecessors-in-interest under Section
48 (b) of the Public Land Law. Under the law, the questioned land retains its public
character. The application for registration under Section 14 of the Property Registration
Decree (P.D. 1529) which, among others, recognizes possession of alienable lands of
the public domain in the manner and for the length of time therein required as basis for
registration of title to the land, did not remove the land from the operational effect of
Section 48 (b) of the Public Land Law. It nevertheless strengthens the conclusion that
the land never ceased to be part of the public domain.

7. A mining corporation cannot obtain a free patent to a public land.—The lower court
correctly stated that as a mining corporation, the petitioner could not legally obtain a free
patent to the land. The petitioner denies any knowledge as to whether Paez, from whom
it bought the land, ever applied for a free patent or obtained one, notwithstanding its own
admission that before the alleged sale of the land to it by Paez, it verified from the
Bureau of Lands office in Marinduque and Manila if said land was subject to an
application for free patent. The petitioner cannot maintain that Paez was the rightful
owner of the land, much less the person qualified for the issuance of a free patent for the
latter did not do anything to secure a title or confirm an imperfect one, assuming that he
was entitled to the same.

8. Prescription; Trusts; An implied trust does not arise where defrauder and defrauded
have no relationship, fiduciary or otherwise, relative to the land in dispute. That one was
able to register it in its name is, therefore, an assertion of a fraudulent act for which an
action to recover must be filed within 4 years.—An implied or constructive trust
presupposes the existence of a defrauded party who is the rightful owner of the disputed
property. In the case at bar, aside from the fact that the petitioner and its predecessor-in-
interest never applied for a free patent although the petitioner claims that it was entitled
to the same, it also did not allege the existence of any relationship, fiduciary or
otherwise, with the respondent which may justify the creation of an implied trust. The
 respondent, therefore, could not have committed fraud against the petitioner or its
predecessor-in-interest. Besides, the petitioner’s failure to file any opposition to the
registration of the land in the respondent’s favor and its filing of an action for
reconveyance only after almost six years from the date of said registration cast doubt on
the petitioner’s right over the property.

9. There being no implied or constructive trust, the petitioner cannot invoke the ten-year
prescriptive period within which to file an action for reconveyance. Thus, even assuming
that the respondent was indeed guilty of fraud in the procurement of the free patent and
the corresponding OCT in his name and that the petitioner is the one entitled to the
issuance of a patent, then petitioner’s action should have been filed within four (4) years
from the issuance of the respondent’s OCT which was on October 23, 1973.

Municipality of Victorias vs. Court of Appeals,

149 SCRA 32, No. L-31189 March 31, 1987

1. Evidence; Secondary Evidence; Certificate issued by the Archives Division of the Bureau
of Records Management of a page of a 1934 notarial register of a notary public,
considered an authentic document, and admissible to prove identity of land, in lieu of the
deed of sale which is the best evidence.—ln lieu of a Deed of Sale, petitioner presented
a certificate issued by the Archives Division of the Bureau of Records Management in
Manila, of a page of the 1934 Notarial Register of Vicente D. Aragon. x x x It is beyond
question that the foregoing certificate is an authentic document clearly corroborated and
supported by: (a) the testimony of the municipal councilor of Victorias, Ricardo Suarez,
(Original TSN Hearing of September 14, 1964, pp. 12-22) who negotiated the sale; Cb)
the testimony of Emilio Cuesta, (Original TSN Hearing of September 14, 1964, pp. 22-
38) the municipal treasurer of said municipality, since 1932 up to the date of trial on
September 14, 1964, who personally paid the amount of P750.00 to Felipe Leuenberger
as consideration of the Contract of Sale; (c) Certificate of Settlement (Original Exhibits,
p. 20) "as evidence of said payment;" (d) Tax Declaration No. 429 (Ibid., p. 22) which
was cancelled and was substituted by Tax Declaration No. 3600 covering the portion of
the property unsold (Decision, CFI, Neg. Occ. Orig. Record on Appeal, p. 6) and (e) Tax
Declaration No. 3601 (Ibid., p. 23) in the name of the Municipal Government of Victorias
covering the portion occupied as cemetery.

2. Testimonial and documentary evidence sufficiently identify the land sold by the
predecessors-ininterest of respondents; To insist on the technical description of a
disputed land is to sacrifice substance to form.—The above-mentioned testimonies and
documentary evidence sufficiently identify the land sold by the predecessors-in-interest
 of private respondent. To insist on the technical description of the land in dispute would
be to sacrifice substance to form which would undoubtedly result in manifest injustice to
the petitioner.

3. Sales; Delivery; A thing sold is understood as delivered when it is placed in the control
and possession of the vendee; Delivery produces its natural effects in law one of which
being the conveyance of ownership.—Moreover, it is expressly provided by law that the
thing sold shall be understood as delivered, when it is placed in the control and
possession of the vendee. (Civil Code Art. 1497). Where there is no express provision
that title shall not pass until payment of the price, and the thing sold has been delivered,
title passes from the moment the thing sold is placed in the possession and control of
the buyer. (Kuenzle & Streiff vs. Watson & Co., 13 Phil. 26 [19091). Delivery produces
its natural effects in law, the principal and most important of which being the conveyance
of ownership, without prejudice to the right of the vendor to claim payment of the price.
(Ocejo, Perez & Co. vs. International Banking Corp., 37 Phil. 631 [1918]).

4. When a sale is made through a public instrument, the execution thereof is equivalent to
the delivery of the thing object of the contract; Execution of the public instrument
operates as a formal or symbolic delivery of the property sold.—Similarly, when the sale
is made through a public instrument, the execution thereof shall be equivalent to the
delivery of the thing which is the object of the contract, if from the deed, the contrary
does not appear or cannot be clearly inferred (Civil Code Art. 1498). The execution of
the public instrument operates as a formal or symbolic delivery of the property sold and
authorizes the buyer to use the document as proof of ownership. (Florendo v. Foz, 20
Phil. 388 [1911]).

5. A registered property owner is entitled to the protection afforded to a holder of a Torrens

title.—Unfortunately, the purchaser Municipality of Victorias failed to register said Deed
of Sale; hence, when Simeona Jingco Vda. de Ditching died, her granddaughter,
respondent Norma Leuenberger claimed to have inherited the land in dispute and
succeeded in registering said land under the Torrens system. Said land is now covered
by Transfer Certificate of Title No. T-34036 (Exhibit A, supra) issued by the Register of
Deeds of Negros Occidental on March 11, 1963 in the name of Norma Leuenberger,
married to Francisco Soliva, containing an area of 208,157 square meters. As registered
owner, she is unquestionably entitled to the protection afforded to a holder of a Torrens
Title.

6. Under the Torrens System, every person holding a certificate of title holds the same free
from all encumbrances except those noted in the certificate.—Admittedly, it is wellsettled
that under the Torrens System, "Every person receiving a certificate of title in pursuance
of a decree of registration, . . . shall hold the same free of all encumbrance except those
noted on said certificate x x x." (Sec. 39, Act 496; now Sec.43, PD 1529).

7. Land registration is not a mode of acquiring ownership but only of confirming ownership
of the land; Purpose of establishment of Torrens system; Where the applicant possesses
no title or ownership over the land, he cannot acquire one under the Torrens System of
Registration.—In the instant case, however, respondent Norma Leuenberger admitted
 that she inherited the land covered by Transfer Certificate of Title No. T-34036 from her
grandmother, who had already sold the land to the petitioner in 1934; hence, she merely
stepped into the shoes of her grandmother and she cannot claim a better right than her
predecessor-in-interest. When she applied for registration of the disputed land, she had
no legal right to do so as she had no ownership of the land since land registration is not
a mode of acquiring ownership but only of confirming ownership of the land. (Grande, et
al. vs. Court of Appeals, et al, 115 Phil. 521.) 'The Torrens System was not established
as a means for the acquisition of title to private land, x x x" It is intended merely to
confirm and register the title which one may already have on the land. Where the
applicant possesses no title or ownership over the parcel of land, he cannot acquire one
under the Torrens system of Registration. (Torela, et al., vs. Torela, et al., L-27843,
October 11, 1979).

8. Although an inherently defective Torrens title may not ordinarily be cancelled even after
proof of its defect, the law safeguards the rightful party 's interest in the titled land from
fraud and improper use of technicalities by allowing reconveyance.—While an inherently
defective Torrens title may not ordinarily be cancelled even after proof of its defect, the
law nevertheless safeguards the rightful party's interest in the titled land from fraud and
improper use of technicalities by allowing such party, in appropriate cases, to judicially
seek reconveyance to him of whatever he has been deprived of as long as the land has
not been transferred or conveyed to a purchaser in good faith. (Pedro Pascua, et al., vs.
Mariano Gopuyoc et al, L-23197, May 31, 1977.)

9. Implied Trust; Where the land is decreed in the name of a person through fraud or
mistake. such person is by operation of law a trustee of an implied trust for the benefit of
the persons from whom the property comes.—Thus, it has been held that where the land
is decreed in the name of a person through fraud or mistake, such person is by
operation of law considered a trustee of an implied trust for the benefit of the persons
from whom the property comes. The beneficiary shall have the right to enforce the trust,
notwithstanding the irrevocability of the Torrens title and the trustee and his successors-
in-interest are bound to execute the deed of reconveyance. (Pacheco vs. Arro, 85 Phil.
505; Escobar vs. Locsin, 74 Phil. 86).

10. The Torrens system was never calculated to foment betrayal in the performance of a
trust.—As the land in dispute is held by private respondents in trust for the Municipality
of Victorias, it is logical to conclude that the latter can neither be deprived of its
possession nor be made to pay rentals thereof. Private respondent is in equity bound to
reconvey the subject land to the cestui que trust, the Municipality of Victorias. The
Torrens system was never calculated to foment betrayal in the performance of a trust.
(Escobar vs. Locsin, 74 Phil. 86).

11. entitled to great weight on appeal; Reason.—Finally. the conclusions and findings of fact
by the trial court are entitled to great weight on appeal and should not be disturbed
unless for strong and cogent reasons because the trial court is in a better position to
examine real evidence, as well as to observe the demeanor of the witnesses while
testifying in the case. (Chase v. Buencamino, Sr., 136 SCRA 365 [1985)).
Naval vs. Court of Appeals,
483 SCRA 102, G.R. No. 167412 February 22, 2006

1. When a party adopts a certain theory in the court below, he is not allowed to change his
theory on appeal, for to allow him to do so would not only be unfair to the other party, but
it would also be offensive to the basic rules of fair play, justice and due process.—A
perusal of the records reveals that during the trial, petitioner vigorously asserted that the
subject land was the exclusive property of Ildefonso who sold it to her in 1972. However,
in this appeal, petitioner assails the ownership not only of Gregorio but also of Ildefonso
by alleging that at the time the latter sold the land to Gregorio, the same was declared in
the name of Agrifina Avila. When a party adopts a certain theory in the court below, he is
not allowed to change his theory on appeal, for to allow him to do so would not only be
unfair to the other party, but it would also be offensive to the basic rules of fair play,
justice and due process.

2. Land Registration; Article 1544 of the Civil Code has no application to land not
registered under Torrens System.— While we agree with the appellate court that
respondents have superior right over the petitioner on the subject property, we find
Article 1544 inapplicable to the case at bar since the subject land was unregistered at
the time of the first sale. The registration contemplated under this provision has been
held to refer to registration under the Torrens System, which considers the act of
registration as the operative act that binds the land. Thus, in Carumba v. Court of
Appeals, we held that Article 1544 of the Civil Code has no application to land not
registered under Torrens System.

3. Double Sales; Act No. 3344; Under this law, registration by the first buyer is constructive
notice to the second buyer that can defeat his right as such buyer in good faith.—The
law applicable therefore is Act No. 3344, which provides for the registration of all
instruments on land neither covered by the Spanish Mortgage Law nor the Torrens
System. Under this law, registration by the first buyer is constructive notice to the second
buyer that can defeat his right as such buyer in good faith. Applying the law, we held in
Bautista v. Fule that the registration of an instrument involving unregistered land in the
Registry of Deeds creates constructive notice and binds third person who may
subsequently deal with the same property.

4. The issue of good faith or bad faith of the buyer is relevant only where the subject of the
sale is registered land and the purchaser is buying the same from the registered owner
whose title to the land is clean.—Even if petitioner argues that she purchased and
registered the subject land in good faith and without knowledge of any adverse claim
thereto, respondents still have superior right over the disputed property. We held in
Rayos v. Reyes that: “[T]he issue of good faith or bad faith of the buyer is relevant only
where the subject of the sale is registered land and the purchaser is buying the same
from the registered owner whose title to the land is clean x x x in such case the
purchaser who relies on the clean title of the registered owner is protected if he is a
purchaser in good faith for value.” Since the properties in question are unregistered
lands, petitioners as subsequent buyers thereof did so at their peril. Their claim of having
bought the land in good faith, i.e., without notice that some other person has a right to or
 interest in the property, would not protect them if it turns out, as it actually did in this
case, that their seller did not own the property at the time of the sale.

5. One can sell only what one owns or is authorized to sell, and the buyer can acquire no
more than what the seller can transfer legally.—It is an established principle that no one
can give what one does not have, nemo dat quod non habet. Accordingly, one can sell
only what one owns or is authorized to sell, and the buyer can acquire no more than
what the seller can transfer legally. In the case at bar, since Ildefonso no longer owned
the subject land at the time of the sale to the petitioner, he had nothing to sell and the
latter did not acquire any right to it.

6. Certificates of Title; What cannot be collaterally attacked is the certificate of title and the
title or ownership which is represented by such certificate; A certificate of title is merely
an evi dence of ownership or title over the particular property described therein.—A
certificate of title, once registered, should not thereafter be impugned, altered, changed,
modified, enlarged or diminished except in a direct proceeding permitted by law.
Moreover, Section 32 of Presidential Decree No. 1529 provides that “[u]pon the
expiration of said period of one year, the decree of registration and the certificate of title
shall become incontrovertible.” However, it does not deprive an aggrieved party of a
remedy in law. What cannot be collaterally attacked is the certificate of title and not the
title or ownership which is represented by such certificate. Ownership is different from a
certificate of title. The fact that petitioner was able to secure a title in her name did not
operate to vest ownership upon her of the subject land. Registration of a piece of land
under the Torrens System does not create or vest title, because it is not a mode of
acquiring ownership. A certificate of title is merely an evidence of ownership or title over
the particular property described therein. It cannot be used to protect a usurper from the
true owner; nor can it be used as a shield for the commission of fraud; neither does it
permit one to enrich himself at the expense of others. Its issuance in favor of a particular
person does not foreclose the possibility that the real property may be co-owned with
persons not named in the certificate, or that it may be held in trust for another person by
the registered owner.

7. Reconveyance; In an action for reconveyance, the decree of registration is respected as

incontrovertible; What is sought instead is the transfer of the property or its title which
has been wrongfully or erroneously registered in another person’s name, to its rightful or
legal owner, or to the one with a better right.— As correctly held by the Court of Appeals,
notwithstanding the indefeasibility of the Torrens title, the registered owner may still be
compelled to reconvey the registered property to its true owners. The rationale for the
rule is that reconveyance does not set aside or re-subject to review the findings of fact of
the Bureau of Lands. In an action for reconveyance, the decree of registration is
respected as incontrovertible. What is sought instead is the transfer of the property or its
title which has been wrongfully or erroneously registered in another person’s name, to its
rightful or legal owner, or to the one with a better right.

8. An action for reconveyance does not prescribe when the plaintiff is in possession of the
land to be reconveyed.—The Court of Appeals correctly held that an action for
reconveyance does not prescribe when the plaintiff is in possession of the land to be
 reconveyed, as in this case. Thus, in Leyson v. Bontuyan, 452 SCRA 94 (2005): x x x
[T]his Court declared that an action for reconveyance based on fraud is imprescriptible
where the plaintiff is in possession of the property subject of the acts.

Rementizo vs. Heirs of Pelagia Vda. de Madarieta,

576 SCRA 109, G.R. No. 170318 January 15, 2009

1. Fraud is a question of fact which must be alleged and proved. Fraud cannot be
presumed and must be proven by clear and convincing evidence.—Madarieta miserably
failed to show that Rementizo employed fraud in the awarding of EP No. A-028390-H in
his favor. Fraud is a question of fact which must be alleged and proved. Fraud cannot be
presumed and must be proven by clear and convincing evidence. In this case, there was
no such evidence showing actual fraud on the part of Rementizo.

2. Land Registration; Reconveyance; In an action for reconveyance, the decree of

registration is respected as incontrovertible but what is sought instead is the transfer of
the property wrongfully or erroneously registered in another’s name to its rightful owner
or to one with a better right.—In an action for reconveyance, the decree of registration is
respected as incontrovertible but what is sought instead is the transfer of the property
wrongfully or erroneously registered in another’s name to its rightful owner or to one with
a better right. The person in whose name the land is registered holds it as a mere
trustee. Nevertheless, the right to seek reconveyance of registered property is not
absolute because it is subject to extinctive prescription. In Caro v. Court of Appeals, 180
SCRA 401 (1989), the prescriptive period of an action for reconveyance was explained:
[U]nder 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-à-vis prescription, Article 1144 of the Civil Code is applicable.

3. The ten (10)-year prescriptive period is reckoned from the date of issuance of the
certificate of title.—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. The ten (10)-year prescriptive period is
reckoned from the date of issuance of the certificate of title.

4. There is but one instance when prescription cannot be invoked in an action for
reconveyance, that is, when the plaintiff or complainant (Madarieta or respondents in this
case) is in possession of the land to be reconveyed, and the registered owner was never
in possession of the disputed property.—There is but one instance when prescription
cannot be invoked in an action for reconveyance, that is, when the plaintiff or
complainant (Madarieta or respondents in this case) is in possession of the land to be
reconveyed, and the registered owner was never in possession of the disputed property.
In such a case, the Court has allowed the action for reconveyance to prosper despite the
lapse of more than ten (10) years from the issuance of the title to the land.
 5. An action for reconveyance based on an implied or constructive trust prescribes in ten
(10) years from the issuance of the Torrens title over the property, which operates as a
constructive notice to the whole world.—An action for reconveyance based on an implied
or constructive trust prescribes in ten (10) years from the issuance of the Torrens title
over the property, which operates as a constructive notice to the whole world. The title
over the subject land was registered in Rementizo’s name in 1987 while Madarieta filed
the complaint to recover the subject lot only in 1998. More than eleven (11) years had
lapsed before Madarieta instituted the action for annulment of EP No. A-028390-H,
which in essence is an action for reconveyance. Therefore, the complaint was clearly
barred by prescription.

6. The reckoning point, therefore, for the computation of the ten (10)-year prescriptive
period is the date of the issuance of Emancipation Patent (EP) No. A-028390-H and
registration of Original Certificate of Title (OCT) No. EP-195 in the name of Rementizo.
—There is no evidence adduced by Madarieta or respondents that Rementizo employed
fraud in the issuance of EP No. A-028390-H and OCT No. EP-195. Madarieta did not
even present any evidence that her late husband objected to Rementizo’s occupation
over the subject land after the issuance of EP No. A-028390-H and OCT No. EP-195.
The absence of fraud in the present case distinguishes it from the cases of GSIS,
Samonte, and Adille. The reckoning point, therefore, for the computation of the ten (10)-
year prescriptive period is the date of the issuance of EP No. A-028390-H and
registration of OCT No. EP-195 in the name of Rementizo.

Salao vs. Salao,

70 SCRA 65, No. L-26699 March 16, 1976

1. Reconveyance; Proof as to fiduciary relation of parties must be clear and convincing.—

In order to maintain an action for reconveyance, proof as to the fiduciary relation of the
parties must be clear and convincing.

2. Trusts; Nature of.—In its technical legal sense, a trust is defined as the right enforceable
soly in equity, to the beneficial enjoyment of property, the legal title to which is vested in
another, but the word “trust” is frequently employed to indicate duties, relations, and
responsibilities which are not strictly technical trusts.

a. Juridical concept of.—A person who establishes a trust is called the trustor; one
in whom confidence is reposed as regards property for the benefit of another
person is known as the trustee; and the person for whose benefit the trust has
been created is referred to as the beneficiary. There is a fiduciary relation
between the trustee and the cestui que trust as regards certain property, real,
personal, money or choses in action.
b. Express trusts.—Express trusts are created by the intention of the trustor or of
the parties. No particular words are required for the creation of an express trust,
it being sufficient that a trust is clearly intended. 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 either expressly or impliedly evincing an intention to
create a trust.
c. Implied trusts.—Implied trusts come into being by operation of law. 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.
i. Implied trusts.—Implied trusts come into being by operation of law.
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.
d. Trust must be proven by clear, satisfactory and convincing evidence.—A
constructive trust is a trust “raised by construction of law, or arising by operation
of law”. In a more restricted sense and as contradistinguished from a resulting
trust, a constructive trust is “a trust not created by any words, either expressly or
impliedly evincing a direct intention to create a trust, but by the construction of
equity in order to satisfy the demands of justice.” It does not arise “by agreement
or intention, but by operation of law.” Thus, “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.”

i. Express and implied trusts; When parol evidence available; Reasons.—

No express trusts concerning an immovable or any interest therein may
be proven by parol evidence. An implied trust may be proven by oral
evidence. Trustworthy oral evidence is required to prove an implied trust
because oral evidence can be easily fabricated.

3. Land registration; Any transaction affecting land should be evidenced by a registerable

deed.—“The act of registration” is “the operative act” that conveys, and affects the land.
That means that any transaction affecting the registered land should be evidenced by a
registerable deed.
a. Torrens system; Purpose of.—The real purpose of the Torrens system is to quiet
title to land. “Once a title is registered, the owner may rest secure, without the
necessity of waiting in the portals of the court, or sitting in the mirador de su
casa, to avoid the possibility of losing his land.”
i. Torrens title; Torrens title as conclusive evidence of ownership;
Presumption of validity and regularity in issuance of title.—A Torrens title
is generally a conclusive evidence of the ownership of the land referred to
therein (Sec. 47, Act 496). A strong presumption exists that Torrens titles
were regularly issued and that they are valid.

Santos vs. Heirs of Dominga Lustre,

561 SCRA 121, G.R. No. 151016 August 6, 2008
1. Land Titles; Reconveyance; The action for reconveyance on the ground that the
certificate of title was obtained by means of a fictitious deed of sale is virtually an action
for the declaration of its nullity, which does not prescribe.—On the issue of prescription
and laches, we fully agree with the CA. The action for reconveyance on the ground that
the certificate of title was obtained by means of a fictitious deed of sale is virtually an
action for the declaration of its nullity, which does not prescribe. Moreover, a person
acquiring property through fraud becomes, by operation of law, a trustee of an implied
trust for the benefit of the real owner of the property. An action for reconveyance based
on an implied trust prescribes in ten years. And in such case, the prescriptive period
applies only if there is an actual need to reconvey the property as when the plaintiff is
not in possession of the property. Otherwise, if plaintiff is in possession of the property,
prescription does not commence to run against him. Thus, when an action for
reconveyance is nonetheless filed, it would be in the nature of a suit for quieting of title,
an action that is imprescriptible.

a. It is true that an action for reconveyance will not prosper when the property to be
reconveyed is in the hands of an innocent purchaser for value.—It is true that an
action for reconveyance will not prosper when the property sought to be
reconveyed is in the hands of an innocent purchaser for value. In this case,
however, the protection of the rights of any alleged innocent purchaser is a
matter that should be threshed out in the main case and not in these
proceedings.