G.R. No. 175073 - Estate of Margarita D. Cabacungan vs. Marilou Laigo

Margarita D. Cabacungan (Margarita) owned three parcels of unregistered land in Paringao and Baccuit, Bauang, La Union, covered individually by tax declarations in her name.
In 1968, Margarita’s son, Roberto Laigo, Jr. (Roberto), applied for a U.S. non-immigrant visa and requested Margarita to transfer tax declarations of the properties in his name to support the application.
Margarita executed an Affidavit of Transfer of Real Property transferring the properties by donation to Roberto, unbeknownst to her other children.
Roberto’s visa was issued; he went to the U.S. as a tourist and returned.

Roberto adopted respondents Pedro Roy Laigo (Pedro) and Marilou Laigo (Marilou) in 1979 and married Estella Balagot.
In July 1990, Roberto sold the 4,512 sq. m property in Baccuit to spouses Mario and Julia Campos for ₱23,000.
In August 1992, Roberto sold the 1,986 sq. m and 3,454 sq. m properties in Paringao to Marilou (₱100,000) and Pedro (₱40,000), respectively.
These sales were allegedly unknown to Margarita and her other children until Roberto’s wake in August 1995, when Pedro informed Margarita.

In February 1996, Margarita (represented by her daughter Luz Laigo-Ali) filed a complaint for annulment of sale, recovery of ownership and possession, and cancellation of tax declarations against respondents.
Margarita claimed the 1968 transfer to Roberto was only for visa application purposes and she never intended to divest ownership. Roberto had no right to sell the properties.
Sales were alleged to be fictitious and fraudulent due to grossly inadequate prices and bad faith on the part of Pedro, Marilou, and the Camposes.
Margarita sought annulment of sales, cancellation of Roberto’s tax declarations, and reconveyance of the properties.

The Camposes claimed to be innocent purchasers for value and good faith buyers relying on Roberto’s apparent ownership.
They argued Margarita’s claim was barred by prescription and laches because of long inaction and her failure to direct the claim against Roberto’s estate after his death.
Pedro and Marilou argued Margarita’s cause of action accrued in 1968 when the Affidavit of Transfer was executed, thus barred by a 10-year prescriptive period applicable to actions based on implied trusts.
Both claimed laches barred Margarita’s recovery due to unreasonable delay.

February 3, 1999: Margarita and the Camposes settled their claims; complaint dismissed against the Camposes. Margarita died two days later; her estate substituted as plaintiff.
July 2, 2001: Regional Trial Court (RTC) dismissed the complaint against Pedro and Marilou.

RTC found the 1968 Affidavit of Transfer was a simple transfer of properties to Roberto, with no express trust created.
Instead, an implied or constructive trust was deemed created by operation of law.
Margarita was found guilty of laches for her failure to act promptly.
The 10-year prescriptive period on reconveyance based on an implied trust was also deemed exhausted.
The sales’ alleged price inadequacy was not sufficient ground for annulment without defect in consent.

CA found no evidence to establish an implied trust between Margarita and Roberto.
Even if an implied trust existed, Margarita’s claim was barred by laches and prescription.
The rule on innocent purchasers for value applied, protecting Pedro and Marilou.

Laches should not be mechanically applied, especially between relatives with confidential relationships.
There was no intention to donate the properties to Roberto; the transfer was merely accommodation for visa purposes.
Prescription should run from the repudiation of the trust in 1992 when Roberto sold the properties, making the 1996 complaint timely.
The rule on good faith purchaser applies only to registered lands, not unregistered properties here.

Respondents maintain their positions, emphasizing the lack of written trust agreement, and contest the inapplicability of laches and prescription.

Whether an implied or constructive trust existed between Margarita and Roberto concerning the properties transferred in 1968.
Whether Margarita’s complaint for annulment of sale and recovery of ownership against Pedro and Marilou is barred by laches and/or prescription.
Whether Pedro and Marilou, as buyers of unregistered land, can be considered innocent purchasers for value and in good faith, thus protected against Margarita’s claims.
Whether the sales made by Roberto to Pedro, Marilou, and the Camposes should be annulled and the properties reconveyed to Margarita (or her estate).