G.R. No. L-12149 - Heirs of Candelaria vs. Romero

Emilio and his brother Lucas Candelaria purchased separate lots in the Solokan Subdivision on an installment basis, sometime prior to 1917.
Lucas Candelaria initially paid the first two installments for his lot but, due to sickness rendering him bedridden, he sold his interest in the property to his brother Emilio.
Emilio reimbursed Lucas for the amount previously paid and continued the subsequent installment payments until the entire purchase price was fully satisfied.
Despite the financial arrangement, subsequent payments continued to be made in the name of Lucas with the mutual understanding that the necessary documents of transfer would be executed later, reflecting the transaction as one "from brother to brother."

In 1918, a Transfer Certificate of Title (TCT No. 9584) was issued by the register of deeds of Manila in the name “Lucas Candelaria married to Luisa Romero.”
The complaint alleges that Lucas held the title merely in trust for Emilio, a fact acknowledged by both Lucas and his heirs on several occasions.
The arrangement assumed that possession and payment of rents by Lucas, though beneficially belonging to Emilio, were tolerated by the parties due to familial circumstances.

The complaint for reconveyance of the land with damages was filed on December 20, 1956 by Ester Candelaria, acting in her own behalf and on behalf of the alleged heirs of Emilio Candelaria.
Defendants, consisting of Lucas’ spouse Luisa Romero and several children (the present heirs), continued to possess the lot and refused reconveyance despite repeated demands from the plaintiff.
Instead of filing an answer to the complaint, the defendants moved to dismiss the case, asserting that:

The cause of action is unenforceable under the new Civil Code due to the nature of the trust allegedly being express, which requires a written instrument.
The action has already prescribed, given that the title was issued 38 years prior (in 1918) to the filing of the complaint.

The trial court granted the motion to dismiss based on the view that the alleged trust was express rather than implied—thus requiring an unambiguous written instrument not present in the record.
The trial court further held that the action was barred by prescription because of the significant lapse of time between the issuance of the title and the filing of the complaint.

Whether the facts alleged in the complaint support the creation of an implied (or resulting) trust rather than an express trust, especially given that the trust was purportedly established from a familial agreement to hold title in trust for the benefit of Emilio.
Whether the plaintiff's cause of action for reconveyance is time-barred by the lapse of 38 years since the issuance of the Transfer Certificate of Title, thereby invoking the prescription defense.
Whether equity, through the doctrine of implied trust, should allow the plaintiff (and her alleged co-heirs) an opportunity for a full hearing and presentation of proof to enforce the trust despite the passage of time.