busorg cases for 03222012

8/2/2019 Busorg Cases for 03222012

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Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

EULOGIO M. PEDRANO,Petitioner,

- versus -

HEIRS OF BENEDICTO PEDRANO,namely: ROMANA PEDRANO, ANTONIOPEDRANO, ROSENDA PEDRANO RAAGAS,LEONIDA PEDRANO VILLAMOR, andZENAIDA P. DAGOHOY; and HEIRS OFNORBERTO M. PEDRANO, namely:

NORBERTO C. PEDRANO, JR., MARILYN C.PEDRANO, and BENEDICTO C. PEDRANO,represented by NORMIE P. ALCORIN,

Respondents.

G.R. No. 159666

Present:

QUISUMBING, J., Chairperson, CARPIO,CARPIO MORALES,TINGA, andVELASCO, JR., JJ.

Promulgated:

December 4, 2007x-----------------------------------------------------------------------------------------x

D E C I S I O N

VELASCO, JR., J.:

While blood is indeed thicker than water, conflicts involving

real properties are no respecter of even the most immediate of blood

relations. Lot No. 6416, Ts-222, with an area of 525 square meters

located on Lapu-lapu St., Molave, Zamboanga del Sur is the subject

of a long standing dispute between a son against his mother and his

siblings.

Lot No. 6416 was previously owned by Dr. Isidro Hynsonwho sold it on March 15, 1965 to Romana Monteal Pedrano, for PhP

315.02. Romana was married to Benedicto Pedrano who passed

away on August 19, 1967.

Fourteen years later, petitioner Eulogio M. Pedrano, a son of

Romana, alleged that he had bought the land himself for PhP 30,000

from Romana, payable on or before December 31, 1982 as shown in

the Deed of Sale dated December 22, 1981.

Since Lot No. 6416 and another lot, Lot No. 6409, were yet

untitled, these became subject of Cadastral Case No. N-4, LRC Cad.

Rec. No. N-64, for titling.

On June 14, 1984, in Cadastral Case No. N-4, petitioner

filed a Motion to Lift Order of General Default and to Admit Cadastral

Answer.[1]

Subsequently, on June 2, 1989, the Regional Trial Court

(RTC) acting as Cadastral Court rendered a Decision adjudicating

Lot No. 6409-A, Ts-222[2]

to Romana and Lot No. 6416, Ts-222 to

petitioner. Although on July 3, 1989, the cadastral court issued an

Order for the Issuance of Decree in Cadastral Case No. N-4,[3]

to

date, no Original Certificate of Title (OCT) has been issued

to Lot No. 6416.
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Alleging that petitioner had not paid the PhP 30,000

consideration for Lot No. 6416 until the December 31, 1982 deadline,

as stipulated in the December 22, 1981 Deed of Sale, respondents

filed before the Municipal Trial Court of Molave, Zamboanga del Sur,a Complaint

[4]docketed as Civil Case No. 570 entitled Heirs of

Benedicto Pedrano, namely, Romana Pedrano, Antonio Pedrano,

Rosenda Pedrano Raagas, et al. v. Eulogio Pedrano. Respondents

asked for the annulment of the December 22, 1981 Deed of Sale,

and the recovery of the possession and ownership of Lot No. 6416,

with prayer for a writ of preliminary injunction and restraining order

and damages.

According to respondents, Romana informed petitioner that

the former was canceling the sale and petitioner should have Dr.

Hynsons name in the title replaced with her name. Respondents

added that despite the cancellation of the deed of sale, Romana

allowed petitioner to occupy the house on Lot No. 6416. Further,

respondents averred they were unaware that petitioner instituted a

cadastral case to have the land titled to himself. They discovered his

machinations only in 1994. Thus, respondents instituted the instant

case to have the December 22, 1981 Deed of Sale voided for want

of consideration and for fraud.

Petitioner denied all allegations. He claimed that his father,

Benedicto, died without any property. Besides, he averred,

respondents action was barred by the decision of the RTC in

Cadastral Case No. N-4, which adjudicated Lot No. 6416 to him and

which decision had long become final and executory. He also

insisted that he had paid respondents for the land.

The Trial Court ruled prescription had set in

Subsequently, on July 4, 2000, the Molave, Zamboanga del

Sur RTC rendered a Decision, the dispositive portion of which reads:

WHEREFORE, for the reason thatprescription of the cause of action to annul thequestioned Deed of Absolute Sale has already setin, the complaint in the above-entitled case is

ordered dismissed.

To bring peace to the family, thecounterclaim of defendant in his answer is alsoordered dismissed.

IT IS SO ORDERED.[5]

The RTC said that it could no longer annul the sale

reasoning that Article 1144[6]

of the Civil Code provided for 10 years

within which to bring action from the time the right of action accrues

upon a written contract. Hence, it concluded that since the deed of

sale was executed on December 22, 1981, and the instant action

was filed only on September 5, 1996, after more than 14 years,

prescription had set in.

The Court of Appeals reversed the trial court
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Aggrieved, respondents appealed to the Court of Appeals

(CA). The appeal was docketed as CA-G.R. CV No. 68159.

Respondents raised the sole issue of whether their action hadalready prescribed.

In the meantime, pending appeal before the CA, Romana

died on September 25, 2001.

On February 14, 2003, the appellate court rendered the

assailed Decision which granted respondents appeal, and reversed

and set aside the July 4, 2000 RTC Decision. The decretal portionreads:

WHEREFORE, the instant appeal is herebyGRANTED. Accordingly, the assailed decision ishereby REVERSED and SET ASIDE and a new onerendered ordering defendant-appellee to transferownership and possession of the subject property infavor of plaintiffs-appellants.

SO ORDERED.[7]

The CA ratiocinated that Art. 1144 of the Civil Code was

erroneously applied by the RTC. The CA explained that the instant

case involves an implied trust, and that Art. 1456 of the Civil Code

was the applicable law.

The CA also found untenable petitioners assertion that he

was the one who paid Dr. Hynson the purchase price of PhP 315.02

although the agreement shows Romana was the

transferee. Moreover, he presented no proof to support his claim thathe paid PhP 30,000 for Lot No. 6416 to Romana based on the

December 22, 1981 Deed of Sale. According to the CA, the March

15, 1965 Deed of Absolute Sale categorically showed that it was

Romana who purchased the property from Dr. Hynson. Why, posed

the CA, would petitioner still pay respondents the PhP 30,000

purchase price if he had already earlier paid PhP 315.02 for the

same property? Consequently, the CA concluded, based on

the December 22, 1981 Deed of Sale, respondents had no obligationto transfer ownership of Lot No. 6416 to petitioner since the latter

had not paid for it. In sum, according to the CA, the sale was never

perfected and all along, petitioner merely held the land in trust for

respondents.

On the issue of prescription, the CA applied Villanueva-

Mijares v. Court of Appeals,[8]

where we held that an action for

reconveyance of a parcel of land based on implied or constructive

trust prescribes in ten (10) years, reckoned from the date of

registration of the deed or the date of the issuance of the certificate

of title of the property. The CA pointed out that in this case, the

prescriptive period has not started to run since no certificate of title

had yet been issued.
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Finally, the CA held that since respondents demanded that

petitioner return the property, the implied trust had ceased and

petitioner was under obligation to return the property to respondents.

In its July 28, 2003 Resolution, the appellate court likewise deniedpetitionersEx-ParteMotion for Reconsideration.

The Issues

This petition under Rule 45 raises the following issues:

1. Whether or not there was aPRESCRIPTION under Art. 1144 of the Civil Codethat the document sought to be ANNULLED wasexecuted on December 22, 1981 and the case was

filed on September 5, 1996which has a gap of 14years, 8 months and 23 days.

2. Whether or not there was an IMPLIEDTRUST and therefore the property was acquiredthrough mistake or fraud and the person obtaining itis a TRUSTEE under Art. 1456 of the Civil Code.

3. Whether or not there was an EXPRESSTRUST as provided in Art. 1444, 1445 and 1446 ofthe Civil Code where the TRUSTEE should acceptthe trust or his/her acceptance may be presumed.

4. Whether or not that the property undertrust by one spouse be considered as a conjugalproperty of both husband and wife.

5. Whether or not that the document DEEDOF SALE is the right document for partition to beexecuted by the heirs.

[9]

In gist, the instant petition proffers the twin issues: Is the

possession of the land by petitioner an implied or express trust? Has

the action of respondents prescribed?

The petition is devoid of merit.

Petitioner occupied Lot No. 6416 as implied trustee

Petitioner argues that he is the rightful owner of Lot No.

6416. He claims he paid for it with a treasury warrant representing

his salary as a public school teacher. He explains that at the time

the lot was bought from Dr. Hynson, he was the only one earningenough. His father was only a caminero, his mother, jobless except

for occasional fish vending, and his other siblings, all school drop-

outs. He contends that he was the only one who could afford to pay

for the lot, but in the March 15, 1965 Deed of Absolute Sale, he

made it appear that Romana was the vendee and she was therefore

his express trustee. He avers that Romana was not even around

when the said deed was executed. He explains that the two-centavo

difference in the purchase price of the lot and the actual payment of

PhP 315.02 was due to his use of the treasury warrant amounting to

PhP 315.02 that he received as public school teacher to pay for the

lot. He said he had been occupying the lot since his purchase in

1965.

We are not persuaded by petitioner.
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The facts and the documents presented in the instant case beliepetitioners claims

First, petitioner showed no proof that he indeed bought the

land from and paid the purchase price of PhP 315.02 to Dr.

Hynson. He who alleges a fact has the burden of proof and mere

allegation is not evidence.[10]

Besides, the March 15, 1965 Deed of

Sale, duly notarized, explicitly shows it was Romana who paid Dr.

Hynson PhP 315.02 for the land. We quote the Deed of Sale:I, DR. ISIDRO HYNSON, Filipino, of legal

age, married, with residence and postal addressat Ozamis City, Misamis Occidental, Philippines, forand in consideration of the sum of THREEHUNDRED FIFTEEN PESOS and TWO

CENTAVOS (P315.02), Philippine Currency, to mein hand paid by MRS. ROMANA MONTEALTO,likewise Filipino, of legal age, married to BenedictoPedrano, with residence and postal address atPoblacion, Molave, Zamboanga del Sur,Philippines, receipt of which in full is herebyacknowledged to my entire satisfaction, herebydo by these presents, CEDE, SELL, CONVEY andTRANSFER absolutely unto said MRS. ROMANAMONTEALTO[.]

Between petitioners bare allegations and the notarized deed

of absolute sale, a public document, the latter prevails for

being prima facieevidence, under Sec. 23, Rule 132 of the Revised

Rules on Evidence, of the facts giving rise to its execution and the

date of its execution.

Second, as aptly pointed out by the CA, if petitioner indeed

paid PhP 315.02 for the subject lot, there was no need for him to pay

for the lot again.

Third, petitioner had not adduced evidence that he indeed

paid the PhP 30,000 consideration for Lot No. 6416. We quote the

December 22, 1981 Deed of Sale:

THAT I, ROMANA M. PEDRANO, Filipino,of legal age, widow, resident of Molave, Zamboangadel Sur, for and in consideration of the sum ofTHIRTY THOUSAND (P30,000.00) PESOS,Philippine Currency,to be paid by EULOGIO M.

PEDRANO, Filipino, of legal age, married to VirginiaO. Pedrano, resident of Molave, Zamboanga delSur, on or before December 31, 1982, DO herebySELL, CEDE AND CONVEY absolutely and foreverunto the said Eulogio M. Pedrano[.]

What is clear in the aforecited deed of sale is that the late

Romana was the buyer of Lot No. 6416 from Dr. Hynson; that

petitioner was to pay Romana PhP 30,000 for it; and that he had

untilDecember 31, 1982 to do so. Petitioner claims he did but offers

no proof of payment although he occupied the land. While it is

incumbent for petitioner to present proof that he indeed paid it, he

had not presented any. Under these facts and even if we concede

that the sale was perfected, still petitioner failed to perform his

obligation to pay the consideration of PhP 30,000 to Romana. Since

petitioner failed to comply with what is incumbent upon him, the
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injured parties (respondents as heirs of Romana) may choose

between fulfillment and rescission of the sale under Art. 1191 of the

Civil Code. Respondents chose rescission. Thus, the juridical tie

between the parties is invalidated and it leaves the parties with theirrespective property rights relating to Lot No. 6416 before the

celebration of the December 22, 1981 Deed of Sale.

What remains therefore is the undisputed March 15,

1965 Deed of Sale with Romana as the buyer. Petitioners

possession of Lot No. 6416, owned by his parents, was an implied

trust constituted upon petitioner. The CA is correct in applying Art.

1456 on implied trust to this case.

Art. 1456 provides, 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.

Working for judicial confirmation of an imperfecttitle when one is not the owner constitutes fraud

On the issue of fraud, petitioner contends that there was

nothing fraudulent when he instituted the cadastral proceedings

before the Molave, Zamboanga del Sur RTC. Petitioner attests that

the said RTC awarded him ownership of Lot No. 6416 upon his

satisfactorily presenting both oral and documentary evidence of his

and his predecessors-in-interests 30-year continuous, adverse,

open, public, and notorious possession of Lot No. 6416.

Petitioners posturing is disingenuous, to say the least.

As earlier discussed, petitioner has failed to convince this

Court that he paid for Lot No. 6416 before the lapse of the December

31, 1982 deadline; therefore, he did not acquire ownership of

it. Rosenda Pedrano Raagas testified that: (1) petitioner was the

only sibling who finished school; (2) he lived in Lot No. 6416 because

his mother let him; (3) Romana asked him to take care of titling Lot

Nos. 6409-A and 6416; and (4) he was the only one financially betteroff among his siblings. In our view, all these show that petitioner not

only enjoyed immense favor from his mother, she also had only him

to count on to make decisions and work on the titling of her land.

We also find petitioners contention that his mother testified

on his behalf regarding his continuous, adverse, open, public, and

notorious possession of Lot No. 6416 self-serving, as he has shown

no proof of his mothers statements. Neither has he presented any

witness to attest to this. In fact, a cursory perusal of the Joint Motion

to Lift Order of General Default and to Admit Cadastral Answer filed

by petitioner on June 14, 1984 in Cadastral Case No. N-4 shows that

Romanas name was only inserted in the motion as an afterthought.

To our mind, in an attempt to defraud his siblings, petitioner

deliberately did not inform them of his move to put the title of Lot No.

6416 in his name. Petitioner presented the December 22, 1981 Deed


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of Sale before the cadastral court to mislead the courts to

erroneously adjudicate Lot No. 6416 to him.

Prescription has not set in

Petitioner insists that the RTC was correct in declaring that

respondents action had prescribed since more than 14 years have

lapsed from the date of the execution of the Deed of Sale

onDecember 22, 1981 to the date of the instant action for

annulment. Petitioner posits that in the intervening time,respondents were aware of the cadastral proceedings he initiated;

that in fact, he had filed a Joint Motion to Lift Order of General

Default and to Admit Cadastral Answer under Cadastral Case No. N-

4 on May 2, 1984, and for five years, the cadastral court conducted

hearings; that the cadastral court heard the testimonies of his

continuous, adverse, open, and public possession of the lots; that

since the execution of the deed of sale, respondents neither claimed

that they were not paid, nor did they demand payment from 1981 to

1993; and that the letter of Romana purportedly canceling the sale

for non-payment was written only in 1996 when she was already 83

years old and this was not sent to him.

Again, petitioner fails to persuade us.

An action for the reconveyance of a parcel of land based on

implied or constructive trust, as we have already explained in this

case, prescribes in 10 years, the point of reference being the date of

registration of the deed or the date of the issuance of the certificate

of title of the property.[11]

In the instant case, no OCT has yet been

issued to Lot No. 6416 despite an order on July 3, 1989 to title Lot

Nos. 6409-A and 6416. Without an OCT, the date from whence the

prescriptive period could be reckoned is unknown and it could not be

determined if indeed the period had already lapsed or not. Thus, we

agree with the CA that prescription has not yet set in when the

instant case was filed on September 5, 1996.

With our above disquisition, we find no need to go over the

other issues raised by petitioner.

Petitioner has equal share with other siblings over subjectproperty

From the foregoing discussion, we rule that Lot No. 6416 is

part of the estate of the spouses Benedicto and Romana and is held

by petitioner as an implied trust. Petitioner is co-heir among six (6)

compulsory heirs of Romana and Benedicto. Therefore, he is only

entitled to a one-sixth (1/6) share in Lot No. 6416.

Even if the June 2, 1989 Decision and July 3, 1989 Order for

the issuance of decree in Cadastral Case No. N-4, LRC Cad. Rec.

No. N-64 have become final, this Court can still modify them

pursuant to its inherent power to suspend its own rules or to except a

particular case from its operations wherever demands of justice so

require.[12]

We order the amendment or modification of said decision

and order for the issuance of decree to reflect the equal one-sixth

(1/6) share for each of the heirs of Romana and Benedicto with
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respect to Lot No. 6416, Ts-222 to avoid further delay and additional

legal expenses to the parties.

WHEREFORE, the petition is DENIED for lack of merit. The

February 14, 2003 Decision and July 28, 2003 Resolution in CA-G.R.

CV No. 68159 are hereby AFFIRMED withMODIFICATION that thesix (6) compulsory heirs of the late spouses Benedicto and Romana

Pedrano, namely: petitioner Eulogio M. Pedrano, Antonio M.

Pedrano, Rosenda P. Raagas, Leonida P. Villamor, Zenaida P.

Dagohoy, and Norberto M. Pedrano (deceased), represented by

Normie P. Alcorin, Norberto C. Pedrano, Jr., Marilyn C. Pedrano, and

Benedicto C. Pedrano, are each entitled to one-sixth (1/6) share in

Lot No. 6416, Ts-222. The June 2, 1989 Decision and July 3,

1989 Order for the Issuance of Decree of the RTC acting as a

cadastral court in Cadastral Case No. N-4, Cad. Rec. No. N-64

respectively adjudicating and decreeing Lot No. 6416, Ts-222 to

petitioner Eulogio M. Pedrano are MODIFIED that said lot is

adjudicated and decreed to the aforelisted six (6) heirs of Benedicto

and Romana Pedrano each with one-sixth (1/6) share in said lot. The

Land Registration Authority and the Register of Deeds of

Zamboanga del Sur are ordered to issue an OCT in the names of

said heirs. Costs against petitioner.

SO ORDERED.

PRESBITERO J. VELASCO,JR.

Associate Justice

Republic of the PhilippinesSUPREME COURT

Manila

SECOND DIVISION

G.R. No. 159810 October 9, 2006

ESTATE OF EDWARD MILLER GRIMM, represented by RAMONJ. QUISUMBING and RANDY GLEAVE LAWYER, as JudicialAdministrators, petitioners,vs.ESTATE OF CHARLES PARSONS and PATRICK C. PARSONS,G-P AND COMPANY and MANILA GOLF & COUNTRY CLUB,INC., respondents.

D E C I S I O N

GARCIA, J.:

Because legal and situational ambiguities often lead todisagreements even between or amongst the most agreeable ofpersons, it behooves all concerned to put their financial affairs and


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proprietary interests in order before they depart for the great beyond.Leaving legal loose ends hanging or allowing clouds to remain onproperty titles when one can do something about them before theproverbial thief in the night suddenly comes calling only opens thedoor to bruising legal fights and similar distracting inconveniences.

So it was here.

In this petition for review under Rule 45 of the Rules of Court, theEstate of Edward Miller Grimm, represented by its judicialadministrators, assails and seeks to set aside the Decision

1dated

September 8, 2003 of the Court of Appeals (CA) in CA-G.R. CV No.69990, reversing an earlier decision of the Regional Trial Court(RTC) of Makati City in its Civil Case No. 92-2452.

At the core of the controversy is a stock certificate of the Manila Golf& Country Club, Inc. ("MGCC" or the "Club", for short) coveredby Membership Certificate (MC) No. 1088 for 100 units, the playing

rights over which the Rizal Commercial Banking Corporation(RCBC), the court-appointed receiver, had, in the meantime, leasedout. The Club issued MC No. 1088 to replace MC No. 590. Assertingclashing ownership claims over MC No.1088, albeit recorded in thename of Charles Parsons ("Parsons", hereinafter) are petitionerEstate of Edward Miller Grimm and respondent G-P and Company("G-P & Co.", hereinafter).

Parsons and Edward Miller Grimm (Grimm), together with ConradoY. Simon (Simon), formed in 1952 a partnership for the statedpurpose of engaging in the import/export and real estate business.Per SEC Certificate #3305,

2the partnership was registered under

the name G - P and Company.

Before September 1964, Parsons and Grimm each ownedproprietary membership share in MGCC,

3as evidenced by MC No.

374 for 100 units in the name of Parsons, and MC No. 590, also for100 units, in the name of Grimm. Per records, the Club issued MCNo. 590 to Grimm on May 25, 1960.

4

After Grimm's demise on November 27, 1977, Parsons and Simoncontinued with the partnership under the same name, G P and

Company, as reflected in Articles of Partnership dated December 14,1977.

5The articles of the partnership would later undergo another

amendment to admit Parsons' son, Patrick, in the partnership.6After

Parsons died on May 12, 1988, Amended Articles of Partnershipof G-P and Companywas executed on September 23, 1988 by and

among Parsons' heirs, namely, Patrick, Michael, Peter and Jose, allsurnamed Parsons, albeit the amendment appeared to have beenregistered with the SEC only on March 18, 1993.

7

The herein legal dispute started when brothers Patrick and Jose,both surnamed Parsons, responding to a letter

8from the Estate of

Grimm, rejected the existence of a trust arrangement between theirfather and Grimm involving MC No. 1088. Thus spurned, the Estateof Grimm filed on August 31, 1992 before the RTC of Makati City, asuit for recovery of MC No. 1088 with damages against the Estate ofParsons, Patrick Parsons and MGCC. In its complaint,

9docketed as

Civil Case No. 92-2452 and eventually raffled to Branch 135 of the

court, the Estate of Grimm, represented by its judicial administrator,Ramon J. Quisumbing, alleged, among other things, the following:

1. That on September 7, 1964, Grimm transferred MC No.590 in trust to Parsons; on the same day, MGCC cancelledMC No. 590 and issued MC No. 1088 in the name ofParsons;

2. That in separate letters dated February 28, 1968addressed to MGCC, both Grimm and Parsons stated thatthe transfer of MC No. 590 was temporary. Enclosed in thatParsons' letter was MC No. 1088 which he was turning over

for safekeeping to the Club, thru E.C. Von Kauffmann andRomeo Alhambra, then MGCC honorary secretary andassistant manager, respectively;

3. That on June 9, 1978, or after Mr. Kauffman' death andMr. Alhambra's resignation, MGCC turned over thepossession of MC No. 1088 to Parsons;
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4. That in 1977, Grimm died; after a protracted proceedings,his estate was finally settled in 1988, the year Parsons alsodied;

5. That Patrick and Jose Parsons had, when reminded of the

trust arrangement between their late father and Grimm,denied the existence of a trust over the Club share andrefused to return the same; and

6. That MGCC had refused, despite demands, to cancel MCNo. 1088 and issue a new certificate in the name of theEstate of Grimm.

Attached to the complaint were the demand letters and othercommunications which, to the Estate of Grimm, document theGrimm-Parsons trust arrangement.

In his Answerwith counterclaim,10Patrick Parsons averred that hisfather was, with respect to MC No. 1088, a mere trustee of the trueowner thereof, G-P & Co., and alleged, by way of affirmativedefense, that the claim set forth in the complaint is unenforceable,barred inter aliaby the dead man's statute, prescription or had beenwaived or abandoned.

Herein respondent G-P & Co., echoing Patrick Parsons' allegationrespecting the ownership of MC No. 1088, moved to intervene and toimplead Far East Bank & Trust Co. (FEBTC), as transfer agent ofMGCC, as defendant-in-intervention. Attached to its motion wasits COMPLAINT In Intervention

11therein alleging (a) that on

September 1, 1964, Parsons executed a Letter of Trust, infra, inwhich he acknowledged the beneficial ownership of G-P & Co. overMC No. 374 and MC No.1088; (b) that Parsons, as required by thepartnership, endorsed both certificates in blank; and (c) that G-P &Co. carried said certificates amongst its assets in its books ofaccounts and financial statements and paid the monthly dues of bothcertificates to the Club when its membership privileges were nottemporarily assigned to others. In the same complaint-in-intervention, G-P & Co. cited certain tax incidents as reasons why

the transfer of MC No. 374 and MC No. 1088 from Parsons to theintervenor-partnership cannot as yet be accomplished.

After the usual reply and answer to counterclaims had been filed, theEstate of Grimm filed an amended complaint to include Randy

Gleave Lawyer, the other judicial co-administrator, as representativeof the Estate. On April 28, 1993, the trial court admitted the amendedcomplaint.

After a lengthy trial, the trial court rendered its May 29, 2000judgment

12finding for the Estate of Grimm, as plaintiff a quo,

disposing as follows:

1. Ordering defendants ESTATE OF CHARLES PARSONSand PATRICK C. PARSONS:

1.1 to turn over [MC] No. 1088 to plaintiff ESTATEOF EDWARD MILLER GRIMM;

1.2 jointly and severally to pay damages to plaintiffESTATE in the amount of P400,000.00 per annumfrom September 8, 1989 to November 12, 1998, withlegal interest thereon from the date of this Decisionuntil fully paid;

1.3 Jointly and severally, to pay plaintiff ESTATE attorney's fees in the amount of P1,000,000.00 andthe costs;

2. Ordering defendant [MGCC] and defendant-in-intervention[FEBTC] to cancel [MC] No. 1088 and to issue a newMembership Certificate in lieu thereof in the name of plaintiffESTATE .

3. Ordering Receiver RIZAL COMMERCIAL BANKINGCORPORATION to turn over to plaintiff ESTATE allincome derived from the lease of the playing rights of [MC]No. 1088, less Receiver's fees and charges.
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4. Ordering the dismissal of the counterclaim of thedefendants [Parsons]; and

5. Ordering the dismissal of the complaint-in-intervention andthe supplemental counterclaim of intervenor G - P AND

COMPANY.

SO ORDERED. (Words in bracket added.)

In gist, the trial court predicated its ruling on the postulate that thetemporary transfer of Grimm's original share in MGCC - covered byMC No. 590 whence MC No. 1088 descended to Parsons, createda trust relationship between the two.

Therefrom, only herein respondents G-P & Co., Patrick Parsons andthe Parsons Estate appealed to the CA, albeit MGCC would, in itsbrief, reiterate its readiness to issue the corresponding replacementcertificate to whosoever is finally adjudged owner of MC No. 1088.

On September 8, 2003, in CA-G.R.CV No. 69990, the appellate courtrendered its herein assailed Decision,

13disposing as follows:

WHEREFORE, the Decision of the lower court dated May29, 2000 is hereby REVERSED and SET ASIDE, andanother one rendered:

1. Dismissing the complaint filed by Estate of EdwardMiller Grimm for lack of merit;

2. Ordering Manila Golf and Country Club, Inc., anddefendant-in-intervention Far East Bank & Trust Company,as transfer agent, to immediately effect the reconveyance of[MC] No. 1088 to Intervenor-appellant G-P and Company;

3. Ordering Rizal Commercial Banking Corporation, asreceiver, to immediately turn over to intervenor-appellant G-P and Company all income derived from the lease of the

playing rights of said Membership Certificate, less receiver'sfees;

4. Ordering [the] Estate of Edward Miller Grimm to payappellants the amount of P800,000.00 as attorney's fees;

5. Ordering Estate of Edward Miller Grimm to payappellants the costs of suit.

SO ORDERED. (Words in bracket added.)

Hence, this petition for review on the lone submission that the CAerred in finding that respondent G-P & Co. is the beneficial owner ofMC No. 1088.

In their comment to the petition, the respondents urge the outright

dismissal thereof on the ground that it raises only purely factual andevidentiary issues which are beyond the office of an appeal bycertiorari. As argued further, the factual findings of the CA areconclusive on the parties.

It should be made clear right off that respondent Patrick Parsons, inhis individual capacity, and the Estate of Parsons (collectively, theParsons) are not claiming beneficial ownership over MC No. 1088.The same goes for respondent MGCC which went to state on recordthat "[T]he ownership of [MC] No. 1088 (previously No. 590) does notbelong to the Club and it does not stand to gain from thedetermination of its real owner."

14

We GRANT the petition.

The respondents' formulation of the grounds for the dismissal of theinstant petition is a statement of the general rule. A resolution of thepetition would doubtless entail a review of the facts and evidentiarymatters against which the appealed decision is cast, a procedurewhich is ordinarily outside the province of the Court and the office ofa certiorari review under Rule 45 of the Rules of Court. For, the ruleof long standing is that the Court will not set aside the factual
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determinations of the CA lightly nor will it embark in the evaluation ofevidence adduced during trial. This rule, however, admits of severalexceptions. Among these are when the factual conclusions of the CAare manifestly erroneous; are contrary to those of the trial court;when the judgment of the CA is based on misapprehension of facts

or overlooked certain relevant facts not disputed by the partieswhich, if properly considered, would justify a differentconclusion.

15Decidedly, this case falls within the recognized

exceptions to the rule on the finality of factual findings or conclusionsof the CA.

The principal issue tendered in this case turns on who betweenpetitioner Estate of Grimm and respondent G.P. & Co. beneficiallyowns MC No. 1088. Corollary thereto - owing to the presentation byrespondents of a LETTER OF TRUSTthat Parsons allegedlyexecuted in favor of G-P and Companywith respect to MC No. 1088- is the question of whether or not the transfer of MC No. 590

effected on September 7, 1964 by Grimm in favor of Parsonsresulted, as the petitioner would have it, in the formation of a trustrelation between the two. Thus formed, the trust relationship wouldpreclude the trustee from disposing of the trust property, save whenrepudiation of the trust had effectively supervened.

The trial court found the September 7, 1964 Grimm- to- Parsonscertificate transfer to be only temporary and without valuableconsideration to accommodate a third person and thus adjudgedGrimm to be the real owner of MC No. 590, as later replaced by MCNo. 1088. According to the trial court, such transfer created a trust,with Parsons, as trustee, and Grimm, as the beneficial owner of the

share thus transferred, adding that Parsons, as mere trustee, iswithout right to transfer the replacement certificate to G-P & Co.

On the other hand, the CA, while eschewing the alternativeaffirmative defenses interposed below by respondents, nonethelessruled for respondent GP & Co. Citing Article 1448 of the CivilCode,

16the appellate court held that respondent GP & Co. pertains

the beneficial ownership of MC No. 1088, an implied trust in its favorhaving been created when MC No. 590 and MC No. 374 wereacquired for and placed in the names of Grimm and Parsons,respectively, albeit the partnership paid for the price therefor. To the

appellate court, the fact that these certificates were carried, as ofDecember 31, 1974, November 27, 1977 and December 31, 1978 inthe books

17of G-P & Co. as investment assets only proves one

thing: the company paid the acquisition costs for the membershipcertificates. If Grimm was the real owner of said share, he should

have, according to the appellate court, objected to its inclusion in thepartnership assets during his lifetime. Completing its ratiocination,the CA wrote:

xxx. A trust, which derives its strength from the confidenceone reposes on another especially between the partners andthe company, does not lose that character simply because ofwhat appears in a legal document. The transfer therefore ofGrimm's [MC] No. 590 on September 7, 1964 in favor ofCharles Parsons resulted merely in the change of the personof trustee but not of the beneficial owner, the G-P andCompany.

The CA's ruling does not commend itself for acceptance. As it were,the assailed decision started on the wrong foot and thus had to limpall along to arrive at a strained and erroneous conclusion. We shallexplain.

A party in whose favor a legal presumption exists may rely on andinvoke such legal presumption to establish a fact in issue. He neednot introduce evidence to prove that fact. For, a presumption is primafacieproof of the fact presumed and to the party against whom itoperates rests the burden of overthrowing by substantial andcredible evidence the presumption.

18Under the law on evidence, it is

presumed that "there was sufficient consideration for a contract."19

Inasmuch as Grimm's name appeared on MC No. 590 as registeredowner thereof, he is deemed to have paid sufficient consideration forit. The onus of proving otherwise would fall on respondents G-P &Co. and/or the Parsons. Without so much of an explanation,however, the CA minimized the value of MC No. 590 as arguably thebest evidence of ownership. Corollarily, the appellate court devaluedthe rule on legal presumption and faulted petitioner Estate of Grimm
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for not presenting evidence to prove that Grimm paid for his originalacquisition of MC No. 590. Wrote the CA:

Contrary to the findings of the lower court, [petitioner] failedto establish [its] right over the said shares. xxx Not a single

evidence of proof of payment for the said shares was everpresented by the [petitioner] to establish ownership. (Wordsin bracket added.)

20

Ironically, while the CA held it against the petitioner for failing toadduce proof of payment by Grimm for his MC No. 590, itnonetheless proceeded to declare respondent G-P & Co. to be thebeneficial owner of said certificate even if it, too, had not presentedproof for such payment. Respondent G-P & Co., in its complaint-in-intervention (should have been answer-in-intervention), did notallege paying for MC No. 590. Surely, payment cannot be validlydeduced, as the CA did, from the bare fact of such membership

certificate being listed in the books of respondent G -P & Co. aspartnership investment assets. For one, the self-serving book entriesin question are, as correctly dismissed by the trial court, notevidentiary of ownership. Else, anyone can lay a claim, or worse,acquire ownership over a share of stock by the simple expedience oflisting, without more, the same in the partnership or corporate books.The sheer absurdity of the notion need no belaboring.

For another, what appears or what respondent company uniformlyentered as investments are: "Manila Golf & Country Club, Inc. 2shares." No reference was made whatsoever in the books orfinancial statements about MC No. 590, (MC. No. 1088) and MC. No.

374. In the absence of the number reference or other similaridentifying details, the CA's categorical conclusion that one of the "2shares" referred to is MC No. 1088 is at best speculative. Thisobservation becomes all the more valid given that Michael Parsonshad in his name two (2) Club share certificates. Exhibit "X-4," aSeptember 21, 1964 letter from Parsons to Mr. Kaufmann madespecific reference to Michael's shares:

Under the circumstance, please disregard the previousletter which Michael wrote in connection with the shares inhis name .

In the case of the two shares in the name of Michael, please

leave the two in his name . . . .

As matter now stands, in summary, I shall retain my sharesin my name and continue playing under such shares;Michael will retain two shares assigning one to Mr.Stoner; and Pete Grimm will assign his playing rights to Mr.Daikichi Yoshida.

21

And for a significant third, respondent G-P & Co. is not the same G-P& Co. that Parsons, Grimm and Simon organized in 1952, the formerbeing an entity that came into existence only on September 23,1988. It is thus well-nigh impossible for respondent company to have

participated in a transaction that occurred years before it acquiredjuridical personality. In the concrete, it is not physically possible forrespondent G-P & Co. to have paid the price for the purchase ofGrimm's MC No. 590, the same having been acquired in 1960 orsome 28 years before the respondent company was established bythe execution of the Articles of Partnership on September 23, 1988.The trial court depicted the incongruity of the situation in thefollowing fashion:

Intervenor [respondent G-P & Co.] is not the samepartnership originally formed by Grimm, Parsons and Simon.When Grimm died on November 27, 1977, the original

partnership was dissolved. The death of a partner causesdissolution of a partnership [Article 1829, Civil Code]. A newpartnership was formed with Parsons and Simon aspartners. Besides this new partnership formed after thedeath of Grimm, there were five (5) others formed [ExhibitDD, EE, FF, GG, HH and II] carrying the name, G-P andCompany.

22(Words in bracket in the original)

Independent of the cited Article 1829 of the Civil Code on the matterof partnership dissolution, however, it bears to state that Parsons
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and Simon executed on December 13, 1977 a jointaffidavit

23wherein they declared the dissolution of the original 3-man

G-P & Co., owing to the death of Grimm. The registration onDecember 14, 1977 of a new Articles of Partnership of G-P & Co.followed the execution by Parsons and Simon of said affidavit.

24

It may be, as respondents rationalize, that the succeeding G-P & Co.partnerships merely continued with the business started by theoriginal G-P & Co.

25This element of continuity, assuming to be true,

does not, however, detract from the fact that the partnerships of thesame name formed after Grimm's demise are entities altogetherdifferent and with personalities distinct from the original partnership.

This brings us to the next issue of whether or not the transfer toParsons of MC No. 590, as replaced by MC No. 1088, partook of thenature of a trust transaction.

Trust is the legal relationship between one having an equitableownership in property and another person owning the legal title tosuch property, the equitable ownership of the former entitling him tothe performance of certain duties and the exercise of certain powersby the latter.

26Trust relations between parties may be express, as

when the trust is created by the intention of the trustor.27

An expresstrust is created by the direct and positive acts of the parties, by somewriting or deed or by words evidencing an intention to create a trust;the use of the word trust is not required or essential to itsconstitution, it being sufficient that a trust is clearly intended.

28Implied

trust comes into existence by operation of law, either throughimplication of an intention to create a trust as a matter of law or

through the imposition of the trust irrespective of, and even contraryto any such intention.

29

Judging from their documented acts immediately before andsubsequent to the actual transfer on September 7, 1964 of MC No.590, Parsons, as transferee, and Grimm, as transferor, indubitablycontemplated a trust arrangement. Consider:

There can be no quibbling, owing to the letter exchanges betweenthe Club, in particular its Honorary Secretary E. C. Von Kauffman,

and Parsons, that the reason Grimm transferred his MC No. 590 toParsons was because of the latter's wish to accommodate oneDaikichi Yoshida. Earlier, Parsons recommended to Clubmanagement the approval of Mr. Yoshida's "Application For WaitingList Eligible To [Club] Proprietary Membership."

30In a letter of

August 10, 196431

to the MGCC's Board of Directors, Parsonsendorsed the application of Yoshida as Club member. While theClub's response does not appear in its files, it is quite apparent thatParsons addressed a letter to Kauffman requesting that Yoshida betaken in as a Company assignee. In his reply-letter

32of August 29,

1964, Kauffman explained why he cannot, under Club rules,favorably act on Parsons' specific request, but suggested a viablesolution, as follows:

Reference to your letter dated August 25th, there

is a hitch of assigning the playing rights to Mr. Daikichi Yoshida, as acompany assignee.

xxx xxx xxx

The only solution that I see is that you transfer Pete Grimm's100 units to your name and leave the other 100 units in yourname, then you may assign the playing rights of one of thecertificates for 100 units to Mr. Yoshida. Mr. Yoshida wasapproved by the Board but not as a Company assignee.(Emphasis added.)

Parsons' response to Kauffman's August 29, 1964 letter partly readsas follows:

Thank you for your letter of the 29th.

Under the circumstances, please disregard the previousletter which I wrote with reference to Pete Grimm's and myshares .

xxx xxx xxx
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As matter now stands, in summary, I shall retain in my nameand continue playing under such shares . And Pete Grimmwill assign his playing rights to Mr. Daikichi Yoshida.

The conclusion easily deductible from the foregoing exchanges is

that, given existing Club restrictions, the simplest way toaccommodate and qualify Yoshida for Club membership was forGrimm to transfer his 100-unit share to Parsons who will then assignthe playing rights of that share to Yoshida.

33The RTC aptly

described the relevant factual situation, viz.:

With these exchanges between Parsons and Kauffman , itis apparent that since the shares held by Parsons andGrimm are individual shares and not company shares, theirshares may not be assigned . The proposal of Parsonsthat "Pete Grimm will assign his playing rights to Yoshida"was rejected by Kauffman in his letter dated September 5,

1964 [Exhibit X-5 / 27] that "Pete Grimm's assignment to him(Yoshida) cannot be made as the rules are that onlymembers who holds (sic) 200 units may assign 100 units toan individual." A letter of the same date [Exhibit X-6 / 28]was sent by Kauffman to Mr. Yoshida informing him of hiselection to the Club apologizing for the delay . Kauffmanwrote further " Mr. Charles Parsons has madearrangement for to play (sic) as assignee of extramembership which he now holds."

The election of Yoshida as assignee of a proprietarymember and the resignation of Grimm were approved by the

Club's Board on August 27, 1964. Kauffman and Parsonswere still discussing the ways Mr Yoshida can beaccommodated as of September 5, 1964, but theresignation of Grimm and election of Yoshida was alreadyapproved more than a week before.

34(Words in bracket

in the original; Underscoring added.)

Even on the above factual perspective alone, it is not difficult tocharacterize, as did the trial court, the certificate transfer from Grimmto Parsons, as temporary, there being no evidence whatsoever that

the transfer was for value. Such transfer was doubtless meant onlyto accommodate Yoshida whose stay in the country was obviouslytemporary. As it were, Yoshida's application

35for Club membership

juxtaposed with the August 10, 1964 endorsement- letter36

ofParsons, yielded the information that he (Yoshida) is the manager ofthe Manila Liaison Office of Mitsubishi Shoji Kaisha desiring toacquire Company membership in the name of his employerMitsubishi to enable future representatives to avail themselves ofClub facilities. Since Club membership did not seem possible at thetime, Yoshida had to come in as an assignee of a proprietarymember.

Other compelling evidence attest to the temporary nature of thetransfer in question. The trial court cited two in its Decision. Wrotethat court:

Even a witness for the (respondents) intervenor and the

Parsons, Celso Jamias, Chief Accountant of G-P andCompany, confirmed that the transfer of the share toParsons was temporary. In a letter [Exhibit 7-GG] dated 10August 1991 addressed to Atty. Patricia Cecilia B. Bisda,counsel for G-P and Company, Jamais wrote:

". . . please be informed that the accommodation forMr. Yoshida to have playing rights has not bearingon the ownership of the share. The share ofGrimm (EMG) was transferred to Mr. CharlesParsons (CP) to accommodate Mr. Yoshida due toManila Golf club requirements.

Atty. Patricia Cecilia B. Bisda echoed the view of Jamias,in a letter [Exhibit Y] dated 30 August 1991 addressed to (the) then General Manager of the Club: She wrote:

"Also, we would like to clarify . That theaccommodation of Mr. Yoshida to enjoy the playingrights has no bearing to the ownership of the shares.The share of Edward Grimm was transferred to
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Charles Parsons to accommodate D. Yoshida due toclub requirements."

37

Any lingering doubt, however, as to the temporary nature of theGrimm-to-Parsons transfer should, in our view, be put to rest by what

MGCC records-file contained and the testimony of its former recordscustodian, Romeo Alhambra. In his affidavit of May 12,1989,

38Alhambra stated that "[A]ccording to Club records, the

transfer of [MC] # 580 was only temporary, and that Mr. Grimm wasand, according to club records, is in fact the owner of [MC] # 1088"and that after the transfer, "Mr. Charles Parsons endorsed the sharecertificate and turned it over to Kauffmann for safekeeping."Forming parts of the same records were letters both dated February28, 1968 the day the share certificate transfer was effectedseparately submitted by Grimm and Parsons, to inform MGCC of thetemporary nature of the transfer. In his letter, Grimm stated that MCNo. 1088 "is still my property and I wish it recorded as such in the

Club's file."

39

Parsons' letter

40

was just as simple as it was revealing,thus:

Reference to the transfer of [MC] #590 in the name of Mr.E.M. Grimm to my name, for which I now have the newCertification No. 1088 , please be advised that this transferwas made on a temporary basis and that said new certificateis still the property of Mr. E.M. Grimm and I enclose thecertificate duly endorsed by me for safekeeping.

At bottom then, documented events immediately before and after theFebruary 28, 1968 share certificate conveyance in question veritably

confirm the trust arrangement Parsons had or intended to have withGrimm andvice versa, vis--vis MC No. 1088. If, as hereinrespondent G-P & Co. posits at every turn, Parsons was its trustee,then the latter's act of endorsing MC No. 1088 in blank and thendelivering the same to the Club for safekeeping instead of directly tothe G-P & Co. was without sense.

The trial court correctly described the relationship that was formedbetween Grimm and Parsons, and the consequence of suchrelationship, as follows:

Since the transfer of Grimm's share to Parsons wastemporary, a trust was created with Parsons as the trustee,and Grimm, the beneficial owner of the share. The duties oftrustees have been said, in general terms, to be: "to protectand preserve the trust property, and to see to it that it isemployed solely for the benefit of the cestui que trust." xxxParsons as a mere trustee, it is not within his rights totransfer the share to G-P and Company (sic).

The Court has, to be sure, considered the Letter ofTrust

41dated September 1, 1964 largely because, in respondents'

own words, it "provides the answer to the question of who the realowner of MC #1088 is."

42In the Letter he purportedly signed,

Parsons declared holding MC No. 374 and MC No. 1088 as"NOMINEE IN TRUST for and in behalf of G-P AND COMPANY or its nominee." This piece of document is not, however, a winningcard for the respondents. The trial court mentioned two compelling

reasons why not, both reasons bearing on the due execution andgenuineness of the document. Wrote the court:

This "LETTER OF TRUST" was purportedly signed byParsons on September 1, 1964. But the transfer of [MC] No.590 was recorded (and MC No. 1088 issued) onlyon September 7, 1964 in the Club's Proprietary MembershipCard No. 144 [Exhibit 8]. With the testimony of Celso B.Jamias, a long time employee of G-P and Company, thedoubt as to the genuineness of the signature of Parsons onthe "LETTER OF TRUST" was brought to light. Jamias wascross-examined on the signatures of Parsons on several

documents including the signature of the LETTER OFTRUST":

Q: How about the signature appearing on Exhibit CC-1?

A: This is Charles Parsons, sir.

Q: - You are familiar with the signature?
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A: Yes, sir.

Q: - I'm showing you Exhibit I which is a letter of trustdated September 1, 1964, comparing those signatures whichyou identified above the printed name C. Parsons there are,

two signatures, the signatures you identified earlier and theone appearing on the letter of trust are similar in the sensethat the "s" of Parsons is elevated and it slopes down, is thatcorrect?

xxx xxx xxx

A: - Based on how I see, this doesn't seem to be thesignature of Parsons, it looks like but it is not, sir. [TSN, May4, 1999, pp 5-6]. (Words in parenthesis added.)

And lest it be overlooked, Parsons had previously acknowledged

Grimm to be the owner of MC No. 1088, after his earlier repeateddeclarations that the transfer of the replaced MC No. 580 wastemporary. Parsons was thus in contextually in estoppel to deny, thruthe Letter of Trust aforementioned, hypothetically assuming itsauthenticity, Grimm's ownership of the replacement certificate.

Summing up, the Court finds the evidence adduced and admitted bythe trial court more than adequately supporting a conclusion that MCNo. 1088 was issued to and held by Parsons as the trustee thereofof Grimm or his estate. The fact that respondent G-P & Co. mayhave paid, starting 1992, as evidence discloses, the membershipfees due on MC No. 1088 does not make Grimm less of a beneficialowner. Such payment, needless to stress, is not a mode of acquiringownership.

Parenthetically, the CA is observed to have said that in thesettlement of the estate of Parsons, MC No. 1088 was not includedin the list of stocks owned by him. And from this inconsequentialevent, the appellate court would conclude that the estateadministrator recognized Parsons to be a mere trustee of suchcertificate. While the decision does quite say so, the implication isthat Parsons was the trustee of G -P & Co.

We cannot agree with this non-sequiturapproach which, at bottom,clearly tends to lower the evidentiary bar for respondents. Needlessto stress, it is not for the CA and all courts for that matter tocompensate for a burden of proof not discharged or a quantumofevidence not met.

The Court cannot, for two reasons, also lend cogency to the CA'sobservation that the heirs of Grimm may have had waived,abandoned or denounced their rights to the trust property when,for P100,000.00, they executed aDeed of Acknowledgment ofSatisfaction of Partnership Interests.

43Firstly, the deed, as a

quitclaim instrument, did not mention any share certificate at all,which is only logical since MC No. 1088 was not a partnership assetin the first place. Secondly, the intention to waive a known right mustbe clear and unequivocal. In this case, the intent to renouncebeneficial ownership of MC No. 1088 cannot reasonably be drawnfrom the tenor of the quitclaim document. For perspective, what the

heirs of Grimm stated in the Deed of Acknowledgment is that theamount of P100,000.00 they received "represents the total liquidationand complete settlement of the entire partnership interestspertaining to the late Edward Miller Grimm as partner in G-P ANDCOMPANY." If, to borrow from Thompson v. Court of Appeals,

44we

apply the standard norm on how a waiver must be formulated, thenclearly the general terms of the aforementioned deed merely indicatea clearance from general accountability, not specifically anabandonment of ownership of the disputed share. For:

xxx. Settled is the rule that a waiver to be valid and effectivemust, in the first place, be couched in clear and unequivocal

terms which leave no doubt as to the intention of a party togive up a right or benefit which legally pertains to him. xxx Awaiver may not be attributed to a person when the termsthereof do not explicitly and clearly evidence an intent toabandon a right vested in such person. If we apply thestandard rule that waiver must be cast in clear andunequivocal terms, then clearly the general terms of thecited release and quitclaim indicates merely a clearancefrom general accountability, not specifically a waiver ofAmcham's beneficial ownership of the disputed shares.

45
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In all, the facts and circumstances attendant militate against the CA'sfinding pointing to G-P & Co. as the beneficial owner of MC No.1088. What the evidence adduced instead proved beyond cavil isthat Grimm or his estate is such owner. We therefore reverse.

WHEREFORE, the herein assailed decision of the Court of Appealsis REVERSED and SET ASIDE, and the Decision of the RegionalTrial Court of Makati City in Civil Case No. 92-2452 is REINSTATED.

Costs against the respondents.

SO ORDERED.

Puno, J., Chairperson, Sandoval-Gutierrez, Corona, and Azcuna,JJ., concur.

SECOND DIVISION

[G.R. No. 108547. February 3, 1997]

FELICIDAD VDA. DE CABRERA, MARYJANE CABRERA andFELICIDAD TEOKEMIAN, plaintiff, vs. COURT OFAPPEALS and VIRGILIA ORAIS DE FELICIO,represented by her Attorney-in-Fact, ERNESTO M.

ORAIS, defendants.

D E C I S I O N

TORRES, JR., J.:

Assailed in this Petition for Review on Certiorariis theDecision

[1]of the respondent Court of Appeals dated January 7, 1993

in CA-G.R. No. 22407-CV, the dispositive portion of which reads:

WHEREFORE, the decision of the lower court is herebyREVERSED and judgment is hereby entered ordering defendantsFelicidad Vda. de Cabrera and Marykane Cabrera to vacate theportion of Lot 2238 occupied by them and surrender possessionthereof to plaintiff.

SO ORDERED.

Reversed by the foregoing pronouncements was thedecision

[2]of the Regional Trial Court, Branch 7, Baganga, Davao

Oriental in Civil Case No. 379, an action for Quieting of Title to RealProperty, Damages with Preliminary Injunction. The trial courtsdisposition reads:

WHEREFORE, the plaintiff is hereby ordered:

(a) to execute a reconveyance within thirty (30) days after this

decision shall have become final and executory in favor of defendantFelicidad Vda. De Cabrera corresponding only to that portion of LotNo. 2239 actually and physically possessed and occupied by thedefendant as seen from the sketch plan of Engr. Enecio Magno (Exh.2) and pinpointed and identified during the ocular investigation as toits extent and boundaries of the said portion bought by defendantsFelicidad Vda. De Cabrera f rom Felicidad Teokemian;

(b) To reimburse defendants for litigation expenses and attorneysfees in the amount of P7,000.00; and

(c) To pay the cost.

SO ORDERED.

We are restating the facts as determined by the appellatecourt, viz:

On January 16, 1950, a Deed of Sale (Exh. B) was executed byDaniel Teokemian and Albertana Teokemian in favor of Andres Oraisover a parcel of unregistered land situated at Abejod, Cateel, Davao
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Oriental with an area described as 7.3720 hectares. The propertywas owned in common by Daniel and Albertana and their sisterFelicidad Teokemian, having inherited the same from their latefather, Domingo Teokemian. However, the Deed of Sale was notsigned by Felicidad, although her name was printed therein as one ofthe vendors. On January 26, 1950, the parcel of land was surveyedin the name of Virgilia Orais, daughter of the vendee Andres Orais,and denominated as Lot No. 2239, PLS-287, Cateel Cadastre. Assurveyed, the property had an area of 11.1000 hectares.

On June 24, 1957, Virgilia Orais was issued Free Patent No. V-79089. Original Certificate of Title No. P-10908 was issued in hername (Exh. A).

On July 27, 1972, Alberto (sic. Albertana) Teokemian executed aDeed of Absolute Sale conveying to Elano Cabrera, husband ofFelicidad Cabrera, ONE HALF PORTION OF LOT NO. 2239, Cad-

287, eastern portion, containing an area of FIFTY FIVE THOUSANDFIVE HUNDRED TEN (55,510) SQUARE METERS, more or less(Exh. 3), which portion supposedly corresponded to the one-thirdshare in Lot 2239 of Felicidad Teokemian who was not a party to theDeed of Sale earlier executed by her brother and sister in favor of

Andres Orais, Virgilia Orais predecessor-in-interest. It wasexplained by Felicidad Cabrera that the Deed of Sale was signed byAlbertana Teokemian, not by Felicidad Teokemian, because thewhole of Lot 2239 was adjudicated to Albertana in a decision of acadastral court dated June 8, 1965 as evidenced by a Certification ofan officer-in-charge of the Office of the Clerk of Court, RTC, Br. 7,Baganga, Davao Oriental (Exh. 4). Felicidad Cabrera and her

husband immediately took possession of the western portion of Lot2239.

In 1974 and 1978, Virgilia Orais brothers, Rodolfo and Jimmy Oraiswent to Cateel, Davao Oriental and confronted the Cabreras of thelatters alleged encroachment and illegal occupation of their sistersland, but no concrete action on the matter was pursued by VirgiliaOrais until February 11, 1988 when she filed Civil Case No. 379against Felicidad Cabrera, now a widow, and her daughter MarykaneCabrera for Quieting of Title to Real Property, Damages withPreliminary Mandatory Injunction.

The complaint, which was amended on June 22, 1988 by includingFelicidad Teokemian as party defendant (pp. 42-47, Records),alleged that sometime in 1972 and 1973 the late Elano Cabrera anddefendant Felicidad Cabrera, knowing that Lot 2239 was alreadyregistered in the name of the plaintiff, prepared a document of saleand had Felicidad Teokemian sign it conveying a portion of said lotto them as described in the Sketch Map (Annex D of the Complaint),after which they entered and possessed said portion and enjoyed thefruits thereon. Plaintiff further averred that by reason of thedocument of sale and the declaration of the property involved in thename of defendant Felicidad Vda. De Cabrera, there created a cloudof doubt on the formers title on said property.

Plaintiff prayed as follows:

WHEREFORE, premises considered, plaintiff through theundersigned counsel respectfully prays this Honorable Court that:

a) After due notice and hearing, a Writ of Preliminary MandatoryInjunction be issued restraining the defendants from furtherdispossessing the plaintiff of the land in question;

b) Ordering the defendants to pay jointly the plaintiff the amount ofnot less than Sixteen Thousand Two Hundred (P16,200) as totalvalue of the rice produced from the riceland in question, and theamount of Twenty One Thousand Six Hundred (P21,600.00) Pesosas the total proceeds of the nuts of the coconut land in question;

c) The Defendants be ordered to pay the plaintiff the amount ofTwenty Thousand (P20,000.00) Pesos and Ten Thousand(P10,000.00) Pesos as lit igation expenses;

d) The defendants be ordered to pay Six Thousand (P6,000.00)Pesos for attorneys fees; Four Hundred (P400.00) Pesos asexpenses for every appearance in Court;

e) The document of sale executed by Felicidad Teokemian and theTax Declarations issued to the late Elano Cabrera and FelicidadVda. De Cabrera and the subsequent Tax Declaration creating a


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cloud of doubt on the title, possession, rights and interest bedeclared null and void for being fraudulent and without any legalbasis and inexistent; and

f) Such other reliefs and remedies which this Honorable Court may

deem just, proper, and equitable in the premises.

In their answer with counterclaim (pp.10-18, Records), defendantsalleged that they acquired a portion of Lot 2239 in good faith and forvalue; that said portion was owned by Felicidad Teokemian who wasnot a party to the Deed of Sale executed by Daniel and AlbertanaTeokemian on January 16, 1950 in favor of Andres Orais over Lot2239; that not having signed the Deed of Sale, FelicidadTeokemians one-third share in Lot 2239 could not have been legallyconveyed to Andres Orais; that Virgilia Orais (successor-in-interestof Andres Orais) committed fraud in including the portion owned byFelicidad Teokemian in her applying for free patent over Lot 2239 is

concerned pursuant to Art. 1456 of the Civil Code; and that plaintiff isguilty of laches for not initiating an action against defendants torecover the western portion of Lot 2239 despite plaintiffs knowledgeof defendants acquisition thereof in 1972, as in fact it was only in1988 when the complaint for quieting of title was filed in court.

Defendants prayed, thus:

WHEREFORE, this Honorable Court, after due notice and hearingon the merits of this case; to issue order or orders;

1. Finding the defendants as the rightful, lawful, and legal owner ofthat portion which was sold to them by Felicidad Teokemian andwhich was included in the title of plaintiff;

2. To find that the plaintiff did not own the said portion and that theyhave personal knowledge of the same when the plaintiff filed andsecured the title under the Administrative Proceeding;

3. Finding that the plaintiff is only holding the title to that portion onlyin an implied trust in favor of the real owner;

4. Finding the plaintiff legally obligated to cause the segregation ofthe portion at their expense and deliver formally the said portion tothe real owners, the defendants.

5. To order the plaintiff to execute, prepare and or make any

instrument or document to finally vest in the Defendants absolute,clear and flawless title or ownership over the portion which theplaintiff holds title in trust in defendants favor.

6. To Order the Plaintiff to pay actual damages in the sumof P2,000.00 as litigation expense and Attorneys fees in the sumof P5,000.00 in favor of defendants;

7. To direct the plaintiff to account for the share of the real owner ofthe portion of land illegally cultivated and planted by plaintiff to rice infavor of FELICIDAD TEOKEMIAN to be paid thru the Defendantswho are the owners, which consisted in ONE THIRD OF THE RICE

HARVEST every year since the year 1950 to 1972 when the portionwas sold and cultivated by defendant based on the computation ofincome by the plaintiff in Paragraph 16, a paragraph in the SecondCause of Action of the complaint;

and to grant the defendants such other reliefs and remedies properand equitable in the premises.

[3]

On April 27, 1989, the lower court rendered judgment in favor ofdefendants and against the plaintiff, ruling that the latter can nolonger recover the western portion of Lot 2239 conveyed in 1972 byFelicidad Teokemian in favor of the late Elano Cabrera and FelicidadCabrera due to laches. In support of its findings, the trial courtreferred to the Courts pronouncements in Lola vs. Court ofAppeals,

[4]where it was held that although the defense of

prescription is unavailing to the petitioners, because, admittedly, thetitle to the subject lot was still registered in the name of therespondent, still the petitioners have acquired title to it by virtue ofthe equitable principle of laches due to the respondents failure toassert her claim and ownership for thirty-two years; and inRepublic vs. Court of Appeals

[5]that, while it is true that by

themselves tax receipts and declaration of ownership for taxation
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