FIRST DIVISION

[G.R. No. 146853. February 13, 2006.]

SALVADOR COMILANG , petitioner, vs. FRANCISCO BURCENA

AND MARIANO BURCENA, respondents.

Benzon & Eder for petitioner.

Modesto L. Quismorio Jr. for respondents.

SYLLABUS

1. REMEDIAL LAW; 1997 RULES OF CIVIL PROCEDURE; SECTION 8,

RULE 51 THEREOF; ONLY MATTERS THAT ARE ASSIGNED AS ERRORS MAY BE
CONSIDERED ON APPEAL; EXCEPTION. — Once a court acquires jurisdiction
over a case, it has wide discretion to look upon matters which, although not
raised as an issue, would give life and meaning to the law. Indeed, the Rules
of Court recognize the broad discretionary power of an appellate court to
consider errors not assigned. Section 8, Rule 51 of the 1997 Rules of Civil
Procedure provides: SEC. 8 Questions that may be decided. — No error which
does not affect the jurisdiction over the subject matter or the validity of the
judgment appealed from or the proceedings therein will be considered,
unless stated in the assignment of errors, or closely related to or dependent
on an assigned error and properly argued in the brief, save as the court may
pass upon plain errors and clerical errors. Thus, an appellate court is clothed
with ample authority to review rulings even if they are not assigned as errors
in the appeal in these instances: (a) grounds not assigned as errors but
affecting jurisdiction over the subject matter; (b) matters not assigned as
errors on appeal but are evidently plain or clerical errors within
contemplation of law; (c) matters not assigned as errors on appeal but
consideration of which is necessary in arriving at a just decision and
complete resolution of the case or to serve the interests of justice or to avoid
dispensing piecemeal justice; (d) matters not specifically assigned as errors
on appeal but raised in the trial court and are matters of record having some
bearing on the issue submitted which the parties failed to raise or which the
lower court ignored; (e) matters not assigned as errors on appeal but closely
related to an error assigned; and (f) matters not assigned as errors on
appeal but upon which the determination of a question properly assigned, is
dependent.
2. ID.; ID.; ID.; ID.; CASE AT BAR. — In this case, since the
petitioner directly brought in issue on appeal in his Appellant's Brief the
declaration of the RTC that Dominga could not have validly disposed of the
subject property because respondents are the real owners of the subject
property since it was bought with money sent by them, it was well-within the
CA's authority to review and evaluate the propriety of such ruling. In holding
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 that an implied trust exists between respondents and Dominga in relation to
the subject property and therefore Dominga had no right to donate the same
to petitioner, the CA merely clarified the RTC's findings.
3. CIVIL LAW; TRUST; IMPLIED TRUST; PRESENT IN CASE AT BAR. —
Article 1448 of the Civil Code on implied trust provides: Art. 1448. There is
an implied trust when property is sold, and the legal estate is granted to one
party but the price is paid by another for the purpose of having the
beneficial interest of the property. The former is the trustee, while the latter
is the beneficiary. However, if the person to whom the title is conveyed is a
child, legitimate or illegitimate, of the one paying the price of the sale, no
trust is implied by law, it being disputably presumed that there is a gift in
favor of the child. The trust created under the first sentence of Article 1448
is sometimes referred to as a purchase money resulting trust, the elements
of which are: (a) an actual payment of money, property or services, or an
equivalent, constituting valuable consideration; and (b) such consideration
must be furnished by the alleged beneficiary of a resulting trust.
Respondents have shown that the two elements are present in the instant
case. Dominga was merely a trustee of the respondents in relation to the
subject property.
4. ID.; ID.; ID.; GUARDIANS AND TRUSTEES CANNOT DONATE
PROPERTY ENTRUSTED TO THEM; CASE AT BAR. — Therefore, Dominga could
not have validly donated the subject property to petitioner, as expressly
provided in Article 736 of the Civil Code, thus: Art. 736. Guardians and
trustees cannot donate the property entrusted to them. Truly, nobody can
dispose of that which does not belong to him.
5 . REMEDIAL LAW; EVIDENCE; ADMISSIBILITY; TESTIMONY
REGARDING A STATEMENT MADE BY ANOTHER PERSON, TO ESTABLISH THE
FACT THAT THE STATEMENT WAS MADE, NOT HEARSAY EVIDENCE; CASE AT
BAR. — Anent Margarita's testimony that Dominga told her that the
respondents sent her (Dominga) money to buy the subject property, it
cannot be categorized as hearsay evidence. Margarita's testimony was not
presented to prove the truth thereof, but only to establish the fact that
Dominga narrated to Margarita the source of the funds used in the purchase
of the subject property. What was sought to be admitted in evidence, and
what was actually admitted in evidence, was the fact that the statement was
made by Dominga to Margarita, not necessarily that the matters stated by
her were true. The said utterance is in the nature of an independently
relevant statement which may be admitted in evidence as such, but not
necessarily to prove the truth thereof.
6. ID.; ID.; HEARSAY RULE; WHEN IT DOES NOT APPLY. — Thus,
while it is true that the testimony of a witness regarding a statement made
by another person, if intended to establish the truth of the fact asserted in
the statement, is clearly hearsay evidence, it is otherwise if the purpose of
placing the statement in the record is merely to establish the fact that the
statement was made or the tenor of such statement. Regardless of the truth
or falsity of a statement, when the fact that it has been made is relevant, the
hearsay rule does not apply and the statement may be shown. As a matter
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 of fact, evidence as to the making of the statement is not secondary but
primary, for the statement itself may constitute a fact in issue, or be
circumstantially relevant as to the existence of such a fact.

DECISION

AUSTRIA-MARTINEZ, J : p

Before the Court is a petition for review on certiorari of the Decision 1

dated October 16, 2000 of the Court of Appeals (CA) in CA-G.R. CV No.
53794 which affirmed in toto the Decision dated March 28, 1996 of the
Regional Trial Court, Branch 22, Narvacan, Ilocos Sur (RTC) and the CA
Resolution dated December 19, 2000 which denied petitioner's motion for
reconsideration.
The factual background of the case is as follows:
On April 29, 1985, Francisco Burcena and Mariano Burcena
(respondents), together with their mother, Dominga Reclusado Vda. de
Burcena (Dominga), filed a complaint for annulment of document with
damages against Salvador Comilang (petitioner). The complaint alleges that:
respondents are the owners of a 918-square meter parcel of land located in
Manueva, Santa, Ilocos Sur and the house with a floor area of 32 square
meters built thereon; respondents acquired the subject property through
their earnings while working abroad; the subject property was declared for
taxation purposes in Dominga's name as administrator thereof; on or about
March 12, 1984, petitioner caused the execution of a Deed of Donation 2
over said property by taking advantage of Dominga's blindness, old age and
physical infirmity; the said Deed of Donation is null and void because: (a)
Dominga had no right to donate the same since she is not its owner, (b)
Dominga did not give her consent and was misled to the execution of such
document, (c) granting Dominga had authority to donate, the donation is
void because the property donated is the only property declared in her name
and therefore she could not have reserved for herself in full ownership
sufficient property to support herself; petitioner is in possession of the
subject property, depriving respondents of its ownership and enjoyment of
its fruits. 3
In his Answer dated February 24, 1986, petitioner contends that: the
Deed of Donation was freely and voluntarily executed by Dominga in
consideration of her love and affection for him; the subject property was
acquired by Dominga together with her two sisters, Aniceta Reclusado and
Juana Reclusado, long before respondents went to Hawaii; Dominga erected
a house on the land long before the outbreak of World War II; Dominga
financed out of her own money the construction of the house and
subsequent improvements thereof, she being a merchant when she could
still travel to Cagayan Valley; granting that respondents had been sending
money to Dominga, said money already belonged to her; if Dominga used
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 said money for improving the house, respondents have no right over the
house. 4
During the pendency of the case and before she could take the witness
stand, Dominga died. 5 Following pre-trial, trial on the merits ensued.
Witnesses for the plaintiffs were respondents and their aunt, Margarita
Burcena (Margarita); while petitioner testified on his own behalf. aEAcHI

On March 28, 1996, the RTC rendered a Decision in favor of the

respondents, the dispositive portion of which reads as follows:
WHEREFORE, decision is hereby rendered declaring the parcel of
land and the improvement therein consisting of the house mentioned
and described under paragraph 3 of the complaint, owned by the
plaintiffs Francisco Burcena and Mariano Burcena, but declaring the
possession of the defendant in good faith and further:
a) That the Deed of Donation, Exhibit "1" and submarkings
null and void;
b) That the defendant must vacate the property and turnover
the same to the plaintiffs.

c) Without pronouncement as to moral, actual and other

forms of damages as well as non-accounting of the produce
from the property by virtue of the defendant's possession,
thereof, as well as attorney's fees.

SO ORDERED. 6

The RTC held that the donation is void because Dominga could not
have validly disposed of the subject property since it was bought with the
money sent by respondents while working abroad, although declared for
taxation purposes in Dominga's name.
Dissatisfied, petitioner filed an appeal with the CA. In its Decision dated
October 16, 2000, the CA found no cogent reason to disturb the factual
findings of the RTC, as well as the latter's assessment of the credibility of
witnesses. The CA held that the case involves an implied trust known as
purchase price resulting trust under Article 1448 of the Civil Code where
property sold is granted to one party but the price is paid for by another;
that the evidence presented by the respondents convincingly show that the
subject property was bought with money belonging to respondents but
declared in Dominga's name as administrator thereof; and that Dominga's
act of donating the property to petitioner was beyond her authority and
capacity, done without the consent of the real owners, herein respondents.
Thus, the CA sustained the conclusion of the RTC that the donation is void. 7
Petitioner filed a motion for reconsideration 8 but it was denied by the
CA in its Resolution dated December 19, 2000. 9
Hence, the present petition for review on certiorari anchored on the
following assigned errors:
The Honorable Court of Appeals erred:
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 1. IN DECLARING IN ITS QUESTIONED DECISION . . . THAT " . . .
implied trust arises over the subject property . . . "; . . . ; AND/OR
2. IN DECIDING THE INSTANT CASE NOT IN ACCORDANCE WITH
LAW AND/OR APPLICABLE DECISIONS OF THIS HONORABLE
COURT; AND/OR

3. IN MISAPPRECIATING CIRCUMSTANCES OF SUBSTANCE AND

VALUE WHICH GREATLY AFFECT THE OUTCOME OF THE CASE OR
REVERSE THE DECISION OF THE HONORABLE REGIONAL TRIAL
COURT OF NARVACAN, ILOCOS SUR, BRANCH 22. 10

Petitioner assails the CA's application of the principle of implied trust to

nullify the Deed of Donation executed in his favor. He asserts that the
existence of an implied trust between respondents and Dominga in relation
to the subject property was never treated by the RTC nor was it brought in
issue on appeal before the CA. Petitioner further argues that Margarita's
statement on the witness stand that Dominga told her that the respondents
sent her money to buy the subject property, should not have been given
weight or credence by the RTC and the CA because it is hearsay and has no
probative value. aSIDCT

On the other hand, respondents maintain that the CA has the judicial
prerogative to rule on matters not assigned as errors in an appeal if
indispensable or necessary to the just resolution of the case. As to
Margarita's testimony, respondents submit that it is not hearsay since
Margarita merely stated what Dominga said.
The petition is bereft of merit.
Once a court acquires jurisdiction over a case, it has wide discretion to
look upon matters which, although not raised as an issue, would give life and
meaning to the law. Indeed, the Rules of Court recognize the broad
discretionary power of an appellate court to consider errors not assigned.
Section 8, Rule 51 of the 1997 Rules of Civil Procedure provides:
SEC. 8Questions that may be decided. — No error which does not
affect the jurisdiction over the subject matter or the validity of the
judgment appealed from or the proceedings therein will be considered,
unless stated in the assignment of errors, or closely related to or
dependent on an assigned error and properly argued in the brief, save
as the court may pass upon plain errors and clerical errors.

Thus, an appellate court is clothed with ample authority to review

rulings even if they are not assigned as errors in the appeal in these
instances: (a) grounds not assigned as errors but affecting jurisdiction over
the subject matter; (b) matters not assigned as errors on appeal but are
evidently plain or clerical errors within contemplation of law; (c) matters not
assigned as errors on appeal but consideration of which is necessary in
arriving at a just decision and complete resolution of the case or to serve the
interests of justice or to avoid dispensing piecemeal justice; (d) matters not
specifically assigned as errors on appeal but raised in the trial court and are
matters of record having some bearing on the issue submitted which the
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 parties failed to raise or which the lower court ignored; (e) matters not
assigned as errors on appeal but closely related to an error assigned; and (f)
matters not assigned as errors on appeal but upon which the determination
of a question properly assigned, is dependent. 11
In this case, since the petitioner directly brought in issue on appeal in
his Appellant's Brief the declaration of the RTC that Dominga could not have
validly disposed of the subject property because respondents are the real
owners of the subject property since it was bought with money sent by
them, it was well-within the CA's authority to review and evaluate the
propriety of such ruling. In holding that an implied trust exists between
respondents and Dominga in relation to the subject property and therefore
Dominga had no right to donate the same to petitioner, the CA merely
clarified the RTC's findings.
Article 1448 of the Civil Code on implied trust provides:
Art. 1448.There is an implied trust when property is sold, and
the legal estate is granted to one party but the price is paid by
another for the purpose of having the beneficial interest of the
property. The former is the trustee, while the latter is the beneficiary.
However, if the person to whom the title is conveyed is a child,
legitimate or illegitimate, of the one paying the price of the sale, no
trust is implied by law, it being disputably presumed that there is a gift
in favor of the child. (Emphasis supplied)cSDHEC

The trust created under the first sentence of Article 1448 is sometimes
referred to as a purchase money resulting trust, the elements of which are:
(a) an actual payment of money, property or services, or an equivalent,
constituting valuable consideration; and (b) such consideration must be
furnished by the alleged beneficiary of a resulting trust. 12 Respondents
have shown that the two elements are present in the instant case. Dominga
was merely a trustee of the respondents in relation to the subject property.
Therefore, Dominga could not have validly donated the subject property to
petitioner, as expressly provided in Article 736 of the Civil Code, thus:
Art. 736.Guardians and trustees cannot donate the property
entrusted to them.

Truly, nobody can dispose of that which does not belong to him.13
Anent Margarita's testimony that Dominga told her that the
respondents sent her (Dominga) money to buy the subject property, it
cannot be categorized as hearsay evidence. Margarita's testimony was not
presented to prove the truth thereof, but only to establish the fact that
Dominga narrated to Margarita the source of the funds used in the purchase
of the subject property. 14 What was sought to be admitted in evidence, and
what was actually admitted in evidence, was the fact that the statement was
made by Dominga to Margarita, not necessarily that the matters stated by
her were true. The said utterance is in the nature of an independently
relevant statement which may be admitted in evidence as such, but not
necessarily to prove the truth thereof. 15
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 Thus, while it is true that the testimony of a witness regarding a
statement made by another person, if intended to establish the truth of the
fact asserted in the statement, is clearly hearsay evidence, it is otherwise if
the purpose of placing the statement in the record is merely to establish the
fact that the statement was made or the tenor of such statement.
Regardless of the truth or falsity of a statement, when the fact that it has
been made is relevant, the hearsay rule does not apply and the statement
may be shown. As a matter of fact, evidence as to the making of the
statement is not secondary but primary, for the statement itself may
constitute a fact in issue, or be circumstantially relevant as to the existence
of such a fact. 16 For this reason, the statement attributed to Dominga
regarding the source of the funds used to purchase the subject property
related to the court by Margarita is admissible if only to establish the fact
that such statement was made and the tenor thereof.
Besides, the testimony of Margarita is not the main basis for the RTC's
decision. In fact, her testimony is not indispensable. It merely serves to
corroborate the testimonies of the respondents on the source of the funds
used in purchasing the subject property. The testimonies of all three
witnesses for the plaintiffs were found to be convincing and credible by the
RTC. This Court will not alter the findings of the RTC on the credibility of
witnesses, principally because trial courts have vastly superior advantages in
ascertaining the truth and in detecting falsehood as they have the
opportunity to observe the manner and demeanor of witnesses while
testifying. 17
All told, the CA did not commit any reversible error in rendering the
assailed Decision dated October 16, 2000 and the Resolution dated
December 19, 2000 in CA-G.R. CV No. 53794. The factual determinations of
the CA therein are binding and conclusive upon this Court as no compelling
reasons exist necessitating a re-examination or reversal of the same.
WHEREFORE, the petition is DENIED and the assailed Decision and
Resolution are AFFIRMED. Costs against petitioner.
SO ORDERED.
Panganiban, C.J., Ynares-Santiago and Chico-Nazario, JJ., concur.
Callejo, Sr., J., took no part.

Footnotes
1.Penned by Associate Justice Martin S. Villarama, Jr. and concurred in by Associate
Justices Romeo J. Callejo, Sr. (now Associate Justice of this Court) and Juan Q.
Enriquez, Jr.
2.In the Deed of Donation, the disputed land is described as "[a] combined
vegetable land with an area of ".0518 Sqms." (sic) and also a residential lot
with an area of "400 Sqms." (sic) and a house built thereon, . . . ." Records, p.
23.
3.Records, pp. 1-2.
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 4.Id., p. 18.
5.Id., p. 93.

6.Id., pp. 170-171.

7.CA rollo, p. 180.
8.Id., p. 186.
9.Id., p. 192.
10.Rollo , p. 16.

11.Mendoza v. Bautista, G.R. No. 143666, March 18, 2005, 453 SCRA 691, 702-
703; Sumipat v. Banga , G.R. No. 155810, August 13, 2004, 436 SCRA 521,
532-533; Catholic Bishop of Balanga v. Court of Appeals, 332 Phil. 206, 217-
218 (1996).
12.Tigno v. Court of Appeals, 345 Phil. 486, 499 (1997); Morales v. Court of
Appeals, G.R. No. 117228, June 19, 1997, 274 SCRA 282, 299; 76 Am. Jur. 2d
Trusts § 180.

13.Marquez v. Court of Appeals , 360 Phil. 843, 850 (1998); Esquejo v. Fortaleza
and D. Fortaleza, 121 Phil. 201, 204 (1965).
14.TSN, Testimony of Margarita Burcena, August 9, 1989, p. 4.
15.Bon v. People , G.R. No. 152160, January 13, 2004, 419 SCRA 101, 110.
16.Republic v. Heirs of Felipe Alejaga, Sr., 441 Phil. 656, 672 (2002); D.M. Consunji,
Inc. v. Court of Appeals, G.R. No. 137873, April 20, 2001, 357 SCRA 249, 255.
17.People v. Dalag , 450 Phil. 304, 314 (2003); Marco v. Court of Appeals, 339 Phil.
467, 471 (1997).

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