G.R. No. 194168 - Land Bank of the Philippines vs. Spouses Orilla

In 1959, Felisa purchased a 533‑square‑meter lot at Retiro corner Kanlaon Streets, Sta. Mesa Heights, Quezon City from Carmen Zaragosa, Inc.
A Transfer Certificate of Title (TCT) No. 45951/T-233 was issued in her name.
Felisa constructed a three‑storey building known as D'Lourds Building, where she resided until her death on February 19, 1994.

On February 10, 1960, Felisa purportedly sold the subject property to her daughter Bella Guerrero, Bella’s husband Delfin Guerrero, Sr., and Felimon Buenaventura, Sr. (her common‑law husband).
The transaction, for which Bella and Delfin, Sr. paid P15,000.00, resulted in the cancellation of the original title and the issuance of TCT No. 49869 in the names of Felimon, Sr. and Bella.
The sale is later characterized as not a true conveyance of ownership but rather an arrangement to facilitate securing a loan from the Government Service Insurance System (GSIS).

In 1968, Resurrecion A. Bihis, another daughter of Felisa, began occupying the second floor of the D'Lourds Building.
Resurrecion resided in the building until her death in 2007.
The Bihis Family later emerged as adverse possessors by annotating an adverse claim on the title following Felisa’s disputed last will and testament.

Upon Felisa’s death in 1994, her purported will bequeathed half of the subject property to Resurrecion and her daughters, Rhea and Regina Bihis.
On April 19, 1994, the Bihis Family caused an adverse claim annotation on TCT No. RT‑74910 (the reconstituted form of TCT No. 49869).
Bella, having been appointed administratrix after filing a petition for probate on May 24, 1994, included the subject property in the inventory of the estate.

Title Reconstitutions, Extrajudicial Settlement, and Sale to Wilson and Peter

After the alleged destruction of TCT No. 49869, Bella caused its reconstitution, leading to the issuance of TCT No. RT‑74910.
On January 22, 1997, the adverse annotation by the Bihis Family was cancelled.
On January 23, 1997, Felimon Buenaventura, Jr. and Teresita Robles (heirs of Felimon, Sr.) executed an Extrajudicial Settlement of the estate, causing its annotation on the title.
The cancellation of TCT No. RT‑74910 led to the issuance of TCT No. N‑170416 in the names of Bella, Delfin A. Guerrero, Jr., and Lester Alvin A. Guerrero.
On the same day, a Deed of Sale transferred the subject property from Bella and co‑owners to Wilson and Peter Go for P4,500,000.00.
Subsequently, a new title, TCT No. 170475, was issued in the names of Wilson and Peter after cancellation of the previous title.
Wilson and Peter later initiated ejectment cases against the occupants or lessees of the subject property.

In October 1997, the Estate of Felisa (represented by the Bihis Family) filed a complaint for reconveyance and damages before the Regional Trial Court (RTC), Civil Case No. Q‑97‑32515.
The RTC, in its June 8, 2009 Decision, found that an implied trust existed between Felisa and the trio (Bella, Delfin, Sr., and Felimon, Sr.) based on Felisa’s intent to use the property as collateral for a GSIS loan.
The RTC further ruled against reconveyance since the property had already been transferred to Wilson and Peter, whom it found to be good faith purchasers.
The Court of Appeals (CA) later modified the RTC Decision in its December 19, 2013 ruling by:

Ordering the nullification of the Deed of Sale in favor of Wilson and Peter.
Directing the reconveyance of the property to the Estate of Felisa.
Cancelling TCT No. N‑170475 and ordering the issuance of a new title in the name of the Estate of Felisa.

Wilson and Peter, along with other parties, filed separate motions for reconsideration, which were denied in the April 1, 2014 Resolution.

A crucial piece of evidence is the September 21, 1970 letter from Felisa to Delfin, Sr., which clearly stated that the property was entrusted to Bella, Delfin, Sr., and Felimon, Sr. solely for the purpose of securing a GSIS loan.
This letter, along with subsequent conduct (continuous residence, leasing, and inclusion in Felisa’s will), highlights that Felisa never intended to relinquish her ownership over the subject property.

Whether the Court of Appeals erred in ruling that an implied trust was established between Felisa and the trio (Bella, Delfin, Sr., and Felimon, Sr.), or whether the evidence supports the creation of an express trust.

Whether the action for reconveyance based on the trust (implied or express) has already prescribed, considering the timing of events and the claimant’s possession of the property.

Whether Wilson and Peter, who acquired the subject property, qualify as purchasers in good faith given their knowledge of the annotated adverse claim and the occupancy by the Bihis Family.