G.R. No.

211972 July 22, 2015 The Facts

WILSON GO and PETER GO, Petitioners, On March 17, 1959, the late Felisa Tamio de Buenaventura (Felisa)
vs. purchased from Carmen Zaragosa, Inc. a parcel of land with an area
THE ESTATE OF THE LATE FELISA TAMIO DE BUENA of 533 square meters, more or less, situated at Retiro corner
VENTURA, represented by RESURRECCION A. BIHIS, RHEA A. Kanlaon Streets, Sta. Mesa Heights, Quezon City (subject property)
BIHIS, and REGINA A. BIHIS; and RESURRECCION A. BIHIS, and, thus, TCT No. 45951/T-233 was issued in her name.
RHEA A. BIHIS and REGINA A. BIHIS, in their personal Thereafter, she constructed a three-storey building thereon, called
capacities, Respondents. D'Lourds Building, where she resided until her death on February 19,
1994.6 On February 10, 1960, Felisa supposedly sold the subject
x-----------------------x property to one of her daughters, Bella Guerrero (Bella), the latter's
husband, Delfin Guerrero, Sr. (Delfin, Sr.), and Felimon
G.R. No. 212045 Buenaventura, Sr. (Felimon, Sr.), Felisa's common-law
husband.7 Bella, co-petitioner in G.R. No. 212045, and Delfin, Sr.
paid ₱15,000.00 as consideration therefor.8 Thus, TCT No. 45951/T-
ELLA A. GUERRERO, DELFIN A. GUERRERO, JR. and LESTER 233 in the name of Felisa was cancelled and TCT No. 498699 was
ALVIN A. GUERRERO, Petitioners, issued in the names of Felimon, Sr. and Bella, married to Delfin, Sr..
vs.
THE ESTATE OF THE LATE FELISA TAMIO DE BUENA
VENTURA, herein represented by RESURRECION A. BIHIS, Sometime in 1968, Resurrecion A. Bihis10 (Resurrecion), the other
RHEA A. BIHIS and REGINA A. BIHIS, and RESURRECION A. daughter of Felisa, sister of Bella, and respondent in both G.R. Nos.
BIHIS, RHEA A. BIHIS and REGINA A. BIHIS, in their personal 211972 a nd 212045, began to occupy the second floor of the
capacities, Respondents. D'Lourds Building and stayed therein until her death in 2007.11

DECISION As it appears that TCT No. 49869 in the names of Felimon, Sr. and
Bella, married to Delfin, Sr., was irretrievably destroyed in the
interim, Bella caused its reconstitution and was issued TCT No. RT-
PERLAS-BERNABE, J.: 74910 (49869),12 again registered in their names.

Assailed in these consolidated1 petitions for review on certiorari2 are When Felisa died on February 19, 1994, she allegedly bequeathed,
the Decision3 dated December 19, 2013 and the Resolution4 dated in a disputed last will and testament, half of the subject property to
April 1, 2014 rendered by the Court of Appeals (CA) in CA-G.R. CV Resurrecion and her daughters, Rhea A. Bihis (Rhea) and Regina A.
No. 96697, which modified the Decision5 dated June 8, 2009 of the Bihis (Regina), corespondents in both G.R. Nos. 211972 and 212045
Regional Trial Court of Quezon City, Branch 224 (RTC) in Civil Case (collectively, the Bihis Family). Thus, on April 19, 1994, the Bihis
No. Q-97-32515, and thereby ordered: (a) the nullification of the Family caused the annotation of an adverse claim on TCT No. RT-
Deed of Sale dated January 23, 1997 in favor of Wilson Go (Wilson) 74910 (49869). Felisa's purported will likewise declared Bella as the
and Peter Go (Peter), petitioners in G.R. No. 211972; (b) the administrator of the subject property.13
reconveyance of the disputed property to the Estate of Felisa Tamio;
and (c) the cancellation of Transfer Certificate of Title (TCT) No. N-
1704 75, as well as the issuance of a new title in the name of the On the strength of such appointment, Bella filed, on May 24, 1994, a
Estate of Felisa Tamio by the Register of Deeds. petition for the probate of Felisa's will. She was eventually appointed
as the administratrix of the Estate of Felisa and, in an inventory of property, as evidenced by her continuous residence thereon, as well
Felisa's properties, Bella included the subject property as part of said as her act of leasing several units to various tenants. In fact, in a
estate.14 letter19 dated September 21, 1970 (September 21, 1970 letter)
addressed to Delfin, Sr., Felisa reminded Bella, Delfin, Sr., and
On January 22, 1997, the adverse claim of the Bihis Family was Felimon, Sr. that the subject property was merely entrusted to them
cancelled. The following day, January 23, 1997, Felimon for Bella and Delfin, Sr. to procure a loan from the GSIS.20 At the
Buenaventura, Jr. (Felimon, Jr.) and Teresita Robles, a.k.a. Rosalina bottom of the letter, Bella's and Delfin, Sr.' s signatures appear
Buenaventura Mariano15 (Teresita), apparently the heirs of Felimon, beside their names.21
Sr. (Heirs of Felimon, Sr.), executed a purported Extrajudicial
Settlement of the Estate of Felimon Buenaventura, Sr., and caused Likewise, respondents alleged that Wilson and Peter were buyers in
its annotation on TCT No. RT-74910 (49869). By virtue thereof, TCT bad faith, as they were aware of the facts and circumstances that
No. RT-74910 (49869) was cancelled and TCT No. N-170416 was would have warranted further inquiry into the validity of the title of the
issued in the names of the Heirs of Felimon, Sr., Bella, and her co- sellers, Bella, et al. They averred that Wilson and Peter knew that
petitioners in G.R. No. 212045, Delfin A. Guerrero, Jr. (Delfin, Jr.) the building was occupied by individuals other than the sellers, as in
and Lester Alvin A. Guerrero (Lester) (collectively, Bella, et al.). 16 fact, the Bihis Family was residing therein.22

On the very same day, January 23, 1997, through a Deed of Sale of In their defense, Bella and Felimon, Jr. claimed that the subject
even date, the subject property was sold to Wilson and Peter by property was owned by Bella and (the late) Felimon, Sr., as
Bella, et al. for the amount of ₱4,500,000.00, a transaction evidenced by TCT No. RT-74910 (49869), which title was issued to
completely unknown to Felisa's other heirs, the Bihis Family. Thus, them as early as February 10, 1960. Such title has therefore
TCT No. N-170416 was cancelled and, in lieu thereof, TCT No. subsisted for almost thirty seven (37) years without having been
170475 was issued in the names of Wilson and Peter. Thereafter, voided or nullified by a court decree. Moreover, they have exercised
Wilson and Peter filed ejectment cases against the occupants and/or acts of ownership over the subject property, such as m01igaging the
lessees of the subject property.17 same and leasing the building to third parties. Finally, they asserted
that Bella's act of including the subject property in the inventory of
In July 1997, the probate court revoked the appointment of Bella as properties of the Estate of Felisa was merely because of
administratrix of the Estate of Felisa and eventually, granted letters inadvertence.23
of administration to Resurrecion.18 Hence, on October 17, 1997,
herein respondents, the Estate of Felisa, as represented by the Bihis For his part, Wilson claimed that when he and his brother, Peter,
Family, and the Bihis Family, in their personal capacities purchased the subject property from Bella, et al. on January 23,
(collectively, respondents), filed a complaint for reconveyance and 1997, he was not aware of the judicial settlement of the Estate of
damages before the RTC, docketed as Civil Case No. Q-97-32515, Felisa. He testified that before they acquired the subject property, he
against Bella, et al., Wilson, Peter, and the Register of Deeds of verified the validity of the title covering the same with the Registry of
Quezon City, alleging that Felisa, during her lifetime, merely Deeds, and that a period of two (2) months had lapsed before the
entrusted the subject property to Felimon, Sr., Bella, and Delfin, Sr. sale was consummated because his lawyer advised him to request
for the purpose of assisting Bella and Delfin, Sr. to obtain a loan and Bella to cancel the encumbrance annotated on the title over the
mortgage from the Government Service Insurance System (GSIS). subject property. However, he asserted that .his lawyer merely
To facilitate the transaction, Felisa agreed to have the title over the advised him to ask for the cancellation of the annotation but he was
subject property transferred to Bella and Felimon, Sr. However, not aware of the details surrounding the same. Eventually, the
Felisa never divested herself of her ownership over the subject annotation was cancelled and that he only knew that the subject
property was included in the Estate of Felisa when herein Dissatisfied, the following parties filed their separate appeals before
respondents' complaint before the RTC was filed. As such, he the CA: the Estate of Felisa; the Bihis Family; the Estate of
maintained that he and Peter were purchasers in good faith.24 Rosalinda B. Mariano;29 and Bella, Delfin, Jr., and Lester.30 The CA
simplified the issues raised in the separate appeals, as follows: (a)
The RTC Ruling whether or not there was a trust established by Felisa in favor of
Bella, Delfin, Sr., and Felimon, Sr.; (b) whether or not the action for
reconveyance had already prescribed; and (c) whether or not Wilson
In a Decision25 dated June 8, 2009, the RTC found that there was an
implied trust between Felisa, on the one hand, and Bella and and Peter are purchasers in good faith.31
Felimon, Sr., on the other, created by operation of law. The RTC
concluded that it was the intention of the late Felisa to merely entrust The CA Ruling
to Bella and Felimon, Sr. the subject property for the sole purpose of
using the same as collateral to secure a loan with the GSIS. As such, In a Decision32 dated December 19, 2013, the CA modified the RTC
while it is true that a title was issued in the names of Bella, Delfin, Decision, and thereby ordered: (a) the nullification of the Deed of
Sr., and Felimon, Sr. by virtue of the sale of the subject property to Sale dated January 23, 1997 in favor of Wilson and Peter; ( b) the
them, it was clear that Felisa never intended to relinquish her reconveyance of the disputed property to the Estate of Felisa; and
ownership over the subject property. In concluding so, the RTC gave (c) the cancellation of TCT No. N-170475 in the name of Wilson and
probative weight to the September 21, 1970 letter executed and Peter, as well as the issuance of a new title in the name of the Estate
signed by Felisa which not only reminded Bella, Delfin, Sr., and of Felisa by the Register of Deeds.33
Felimon, Sr. that the subject property was merely entrusted to them
for purposes of securing a loan from the GSIS, but also expressed In its ruling, the CA upheld the RTC's finding that an implied trust
Felisa's desire to have the subject property divided equally among was constituted between Felisa, during her lifetime, and Bella, Delfin,
her heirs.26 Sr., and Felimon, Sr. when the former sold the subject property to
the latter. Like the RTC, it gave substantial weight and credence to
However, the R TC held that reconveyance can no longer be the September 21, 1970 letter executed by Felisa which expressed
effected since the subject property had already been transferred to her intention to convey the subject property to Bella, Delfin, Sr., and
Wilson and Peter, whom it found to be purchasers in good faith. The Felimon, Sr. only for the purpose of obtaining a loan from the GSIS.
RTC found that through Wilson's testimony, they were able to The CA similarly found that Felisa had not intended to relinquish her
disprove respondents' allegation that they were aware of an infirmity ownership over the subject property in their favor, as evidenced not
in the title of the sellers when they acquired the subject property. 27 only by the said letter but also by her contemporaneous and
subsequent acts of ownership, i.e., leasing the building to tenants,
Consequently, as Bella, Delfin, Sr., and Felimon, Sr. were unjustly instituting ejectment suits, having business permits issued in her
enriched at the expense of the respondents who, as compulsory name, and including the subject property in her last will and
heirs, were also entitled to their share in the subject property, the testament.34
RTC directed Bella, et al. to pay plaintiffs, jointly and severally, the
amounts of: (a) ₱2,000,000.00 as compensatory damages, Moreover, the CA ruled that the issuance of TCT No. 49869 in the
representing half of the purchase price of the subject property names of Bella, Delfin, Sr., and Felimon, Sr. did not operate to vest
considering that reconveyance can no longer be granted; (b) ownership of the subject property upon them, as a certificate of title
₱200,000.00 as moral damages; (c) ₱100,000.00 as exemplary is not equivalent to title. Hence, the presentation of TCT No. 49869
damages; and (d) ₱200,000.00 as attorney's fees.28
does not conclusively prove their claim of ownership over the subject The issues advanced for the Court's consideration are: (a) whether
property.35 or not the CA erred in ruling that there was an implied trust created
between Felisa, on one hand, and Bella, Delfin, Sr., and Felimon,
With respect to the issue of whether or not the action for Sr., on the other; (b) whether or not the action for reconveyance had
reconveyance based on an implied trust had already prescribed, the not yet prescribed; and (c) whether or not Wilson and Peter are
CA found that prescription has not set in. Citing jurisprudence, it held purchasers in good faith.
that an action for reconveyance based on an implied trust prescribes
in ten ( 10) years, to be counted from the date of issuance of the The Court's Ruling
Torrens title over the property. However, the rule applies only when
the claimant or the person enforcing the trust is not in possession of The petitions are bereft of merit.
the property. When the claimant is in actual possession of the
property, the action for reconveyance, which is effectively an action
The following facts are undisputed: in 1960, Felisa, as owner of the
for quieting of title, is imprescriptible. In this case, it has been subject property, transferred the same to her daughter Bella, married
indubitably established that the Bihis Family have been in actual to Delfin, Sr., and Felimon, Sr. to assist them in procuring a loan
possession of the subject property; hence, their action for
from the GSIS. In view thereof, her title over the property, TCT No.
reconveyance is imprescriptible.36
45951/T-233, was cancelled and a new one, TCT No. 49869, was
issued in the names of Bella, married to Delfin, Sr., and Felimon, Sr.
Finally, with regard to the question of whether or not Wilson and After it was lost, TCT No. 49869 was reconstituted and TCT No. RT-
Peter are purchasers in good faith, the CA ruled in the negative. It 74910 (49869) was issued in their names.
took into consideration the admission made by Wilson that he has
knowledge of the adverse claim of the Bihis Family annotated on the
Upon Felisa's death in 1994, the Bihis Family, Felisa's other heirs
title of the subject property but denied knowledge of its contents.
who have long been occupying the subject property, caused the
Likewise, he admitted that he directed his lawyer to have the said
annotation of their adverse claim over the same on TCT No. RT-
annotation cancelled before purchasing the subject property. 74910 (49869). Subsequently, however, or on January 22, 1997, the
Records also show that he knew that the Bihis Family have been
said annotation was cancelled, and the next day, the Heirs of
occupying the second floor of the D'Lourds Building. However,
Felimon, Sr. executed an Extrajudicial Settlement of his estate and
despite knowledge of the foregoing facts, he and his brother failed to
caused its annotation on said title. TCT No. RT-74910 (49869) was
make the necessary inquiries as to the validity of the title of the
then cancelled and TCT No. N-170416 was issued in the names of
sellers, Bella, et al. Consequently, he and Peter cannot be Bella, et al. Finally, by virtue of a Deed of Sale dated January 23,
considered as buyers in good faith.37 1997, the subject property was sold to Wilson and Peter, in whose
names TCT No. 170475 currently exists. Months later, or on October
Wilson and Peter, Bella, Delfin, Jr., and Lester, Felimon, Jr., and the 17, 1997,40 the complaint for reconveyance and damages, docketed
Estate of Rosalinda Buenaventura Mariano filed separate motions for as Civil Case No. Q-97-32515, was instituted.
reconsideration,38 which were all denied in the Resolution39 dated
April 1, 2014; hence, these petitions. From the foregoing factual milieu, the Court holds that: one, a trust
was established between Felisa, on the one hand, and Bella, Delfin,
The Issues Before the Court Sr., and Felimon, Sr., on the other, albeit not an implied trust as
concluded by the RTC and the CA but an express one; two, the
present action for reconveyance has not yet prescribed; and, three, Ipinaaabot ko sa iyo ang sulat kong ito upang malaman mo ang
Wilson and Peter are not purchasers in good faith. aking nagiging damdamin. Hinihiling ko sa iyo at ipinakikiusap sa iyo
tungkol doon sa late at building ng D 'lourds.
I.
Hindi naman kaila sa ivo kung papaano ko ito naisalin sa inyong
Trust is the right to the beneficial enjoyment of property, the legal title pangalan nina Filemon C. Buenaventura Sr., Bella Alvarez Guerrero
to which is vested in another. It is a fiduciary relationship that obliges at Delfin Guerrero Sr. Ang dahilan nito ay dahil sa pag-utang sa
the trustee to deal with the property for the benefit of the GSIS.
beneficiary.1âwphi1 Trust relations between parties may either be
express or implied. An express trust is created by the intention of the Kaya gusto kong malaman mo na ito ay nagpapatotoo na ito ay sarili
trustor or of the parties, while an implied trust comes into being by kong pag-aari at walang sinumang nagbigay o tumulong sa akin sa
operation of law.41 lupang ito. At maski si Ka Fe ling mo ay walang naibigay na pera
dito.
Express trusts are created by direct and positive acts of the parties,
by some writing or deed, or will, or by words either expressly or Kaya hinihiling ko ang gusto kong mangyari sa ngayon ay maging
impliedly evincing an intention to create a trust. Under Article 1444 of kaparehong-kapareho ang paghahati ng bawat isa sa anumang
the Civil Code, "[n]o particular words are required for the creation of aking kabuhayan.
an express trust, it being sufficient that a trust is clearly intended." It
is possible to create a trust without using the word "trust" or "trustee." Kaya hinihiling ko sa iyo Delfin na kung maaari lamang ay ang lahat
Conversely, the mere fact that these words are used does not ng nakatala dito ay pirmahan ninyo.
necessarily indicate an intention to create a trust. The question in
each case is whether the trustor manifested an intention to create
x x x x45 (Emphasis and underscoring supplied)
the kind of relationship which to lawyers is known as trust. It is
immaterial whether or not he knows that the relationship which he
intends to create is called a trust, and whether or not he knows the Beneath the letter appear the signatures of Bella and Delfin, and the
precise characteristics of the relationship which is called a trust.42 signature of Felisa signing as "MOMMY" as well.46

Further, in the case of Tamayo v. Callejo,43 the Court recognized that Taking the contents of the foregoing letter into consideration – the
a trust may have a constructive or implied nature in the beginning, validity and due execution of which were never put in issue, hence,
but the registered owner's subsequent express acknowledgement in indubitably established - the Court therefore differs from the finding
a public document of a previous sale of the property to another party of the courts a quo that an implied trust was established; instead, the
effectively converted the same into an express trust.44 Court rules that an express trust was duly proved in this case.

In the present case, both the R TC and the CA found that an implied The words of Felisa in the above-quoted letter unequivocally and
trust was established, heavily giving credence, among others, to the absolutely declared her intention of transferring the title over the
September 21, 1970 letter executed by Felisa during her lifetime, subject property to Bella, Delfin, Sr., and Felimon, Sr. in order to
which partly reads: merely accommodate them in securing a loan from the GSIS. She
likewise stated clearly that she was retaining her ownership over the
subject property and articulated her wish to have her heirs share
Dear Delfin,
equally therein. Hence, while in the beginning, an implied trust was In this case, there was a repudiation of the express trust when Bella,
merely created between Felisa, as trustor, and Bella, Delfin, Sr., and as the remaining trustee, sold the subject property to Wilson and
Felimon, Sr., as both trustees and beneficiaries, the execution of the Peter on January 23, 1997.53 As the complaint for reconveyance and
September 21, 1970 letter settled, once and for all, the nature of the damages was filed by respondents on October 17, 1997, 54 or only a
trust established between them as an express one, their true few months after the sale of the subject property to Wilson and
intention irrefutably extant thereon. Peter, it cannot be said that the same has prescribed.

Bella's attempt to thwart the express trust established in this case by III.
claiming that she affixed her signature on the September 21, 1970
letter only "to appease" her mother, Felisa, and that she could afford Finally, with regard to the question of whether or not Wilson and
to sign the letter since the title covering the subject property was in Peter are purchasers of the subject property in good faith, the Court
their name as owners anyway,47 does not hold water. As correctly concurs with the CA' s finding that they are not.
ruled by the CA, citing Lee Tek Sheng v. CA, 48 the "[m]ere issuance
of the certificate of title in the name of any person does not foreclose A purchaser in good faith is one who buys the property of another
the possibility that the real property may be under co-ownership with
without notice that some other person has a right to, or an interest in,
persons not named in the ce1iificate or that the registrant may only
such property and pays a full and fair price for the same at the time
be a trustee or that other parties may have acquired interest
of such purchase, or before he has notice of some other person's
subsequent to the issuance of the certificate of title,"49 as in this
claim or interest in the property.55 Corollary thereto, when a piece of
case.50 Registration does not vest title; it is merely the evidence of land is in the actual possession of persons other than the seller, the
such title.51 Moreover, the Court notes that even during the buyer must be wary and should investigate the rights of those in
proceedings before the RTC, Bella never denied the purpose for
possession. Without making such inquiry, one cannot claim that he is
which the sale to them of the subject property was effected. Instead,
a buyer in good faith. When a man proposes to buy or deal with
they relied heavily and anchored their defense on the existence of
realty, his duty is to read the public manuscript, that is, to look and
their certificate of title covering the subject property, which, to
see who is there upon it and what his rights are. A want of caution
reiterate, was insufficient to prove their ownership over the same and diligence, which an honest man of ordinary prudence is
independent of the express trust.
accustomed to exercise in making purchases, is in contemplation of
law, a want of good faith. The buyer who has failed to know or
In light of the foregoing, while the Court agrees with the RTC, as discover that the land sold to him is in adverse possession of another
affirmed by the CA, that Bella, Delfin, Sr., and Felimon, Sr. only hold is a buyer in bad faith.56
the subject property in trust for Felisa, the Court however finds that
an express trust, not an implied one, was established in this case.
In his testimony57 before the R TC, Wilson claimed to have verified
the validity of the title covering the subject property before the
II. Registry of Deeds. However, he also admitted that two (2) months
had lapsed before the sale could be consummated because his
Anent the issue of prescription, the Court finds that the action for lawyer advised him to request Bella, one of the sellers, to cancel the
reconveyance instituted by respondents has not yet prescribed, encumbrance annotated on the title of the subject property. He also
following the jurisprudential rule that express trusts prescribe in ten claimed that he had no knowledge about the details of such
(10) years from the time the trust is repudiated.52 annotation, and that he was aware that individuals other than the
sellers were in possession of the subject property.
As aptly concluded by the CA, such knowledge of the existence of an
annotation on the title covering the subject property and of the
occupation thereof by individuals other than the sellers negates any
presumption of good faith on the part of Wilson and Peter when they
purchased the subject property. A person who deliberately ignores a
significant fact which would create suspicion in an otherwise
reasonable man is not an innocent purchaser for value, 58 as in this
case.

WHEREFORE, the petitions are DENIED. The Decision dated

SO ORDERED.