A.C. No. 6313 - Vitug vs. Rongcal

The petitioners, Spouses Ruth Dizon Devisfruto and Allan Devisfruto, were involved in a dispute over the ownership of certain properties located in Tampo, Botolan, Zambales.
The respondent, Maxima L. Greenfell, originally a natural-born Filipino citizen who later became an Australian citizen before reacquiring her Philippine citizenship under Republic Act No. 9225, initiated legal proceedings.

Prior to reacquiring her Philippine citizenship, Greenfell financed the purchase of a house and two lots from the Magisa Spouses (Dante and Erna Magisa) for her niece, Ruth Dizon Devisfruto, via executed deeds of sale for P20,000.00 and P25,000.00 respectively.
The properties were registered in Ruth’s name under corresponding tax declarations (Nos. 021-0464R, 021-0659R) and later consolidated under Tax Declaration No. 021-0842.
Following her citizenship reacquisition, Greenfell demanded the transfer of the properties to her name, a request which was negated by Ruth’s refusal.

On April 2009, Greenfell filed a Complaint for Reconveyance and Damages before the Municipal Circuit Trial Court.

The complaint alleged that Greenfell had provided the purchase money for the properties on the condition that the title, though registered in Ruth’s name, would eventually be reconveyed to her.
The trial court found that a purchase money resulting trust existed under Article 1448 of the Civil Code, emphasizing the intention that Ruth merely held the legal title in trust for Greenfell.

The Municipal Circuit Trial Court rendered a decision in favor of Greenfell, directing the reconveyance of the properties and awarding attorney’s fees and costs.
The decision was affirmed by the Regional Trial Court on July 18, 2013, and later, a Petition for Review under Rule 42 was filed before the Court of Appeals by the Devisfruto Spouses.

The Court of Appeals dismissed the Spouses’ petition for review, concurring that an implied trust had been created based on:

The evidence that Greenfell provided the funds.
The parties’ agreement and even testimony from Dante Magisa, which pointed to the arrangement that the title would be held by Ruth and later transferred.

The Spouses subsequently filed a motion for reconsideration which was also denied, leading to the filing of the Petition for Review on Certiorari before the Supreme Court.

Contended that there was no factual or legal basis for finding that a trust had been created.
Argued that any trust purportedly created was an express trust—not subject to parol evidence—and not an implied trust which could be inferred from the parties’ actions.
Asserted that the properties were given gratuitously, highlighting that Greenfell’s alleged financial assistance and monthly allowance to the petitioners corroborated this claim.

Maintained that the core issue involved the ownership of the properties and relied on the testimony of Dante Magisa, the original property owner.
Asserted that the intention behind the transactions was to create an implied trust whereby Greenfell, having supplied the funds, was to have beneficial interest even though the title was recorded in Ruth’s name.

Whether the Court of Appeals erred in finding that an implied trust had been created by virtue of Greenfell providing the purchase money and the intention of the parties.
Whether the Court of Appeals erred in not finding that the properties were given gratuitously to the petitioners, considering the arguments that the arrangement constituted a donation rather than a trust.