Case Summary (G.R. No. 237422)
Key Dates and Events
Relevant dates include Juliana’s notarial will executed on 23 March 1968; Juliana’s death on 12 August 1968; probate and letters testamentary issued to Jose on 7 October 1968; probate court approval of project of partition on 25 August 1969 and issuance of new titles in Jose’s name on 15 September 1969; Jose’s death on 22 July 1980 and probate of his holographic will on 20 December 1983; petitioner’s appointment as trustee on 30 August 1984 and filing of the reconveyance action on 11 December 1984; RTC summary judgment dismissing the complaint on 10 September 1990; Court of Appeals decision affirming on 18 October 2002 and denial of reconsideration on 3 April 2003; Supreme Court denial of the Rule 45 petition.
Applicable Law
Primary statutory and doctrinal sources relied upon by the courts include the Civil Code provisions on implied trusts (Arts. 1448–1456), rules distinguishing resulting and constructive implied trusts, and jurisprudence clarifying prescription applicable to reconveyance actions founded on implied or constructive trusts. The prescriptive rule applied was the ten-year period for actions to enforce constructive trusts, counted from issuance of title (constructive notice).
Factual Background: Juliana’s Testament and the Fideicomiso
Juliana executed a will constituting a fideicomiso (trust) for her paraphernal properties to be administered by her husband, Jose, with specified beneficiaries to receive two-thirds of trust income for education and one-third for trustee compensation. Juliana’s probate petition was filed but she died before hearing; the probate was pursued, and the probate court admitted the will and issued letters testamentary to Jose.
Probate Proceedings, Project of Partition, and Exclusion of Disputed Properties
Jose, as executor, submitted an inventory and a project of partition explaining that one-half of paraphernal property would become the fideicomiso and the other half would be his legitime as compulsory heir. The probate court approved the project and ordered cancellation and reissuance of titles: certain properties were constituted into the fideicomiso, while other properties, including six large Batangas parcels in dispute, were adjudicated to Jose as heir. The probate court’s adjudication and the subsequent issuance of titles in Jose’s name on 15 September 1969 were carried out by court order.
Subsequent Transfer and Petitioner’s Reconveyance Action
After Jose’s death, his will was probated and the disputed properties were transferred to respondents as heirs; new titles in respondents’ names were issued. Enrique Lopez (Juliana’s nephew) and later petitioner Richard B. Lopez were designated trustees for Juliana’s fideicomiso. Petitioner filed an action for reconveyance on 11 December 1984, alleging that the disputed parcels were paraphernal properties of Juliana that Jose registered in his name but held in trust for Juliana’s fideicomiso and that respondents’ possession derived from that improper registration.
Procedural Disposition Below
The Regional Trial Court (RTC), Balayan, rendered summary judgment on 10 September 1990, dismissing petitioner’s reconveyance action on the ground of prescription. The Court of Appeals affirmed that dismissal. Petitioner challenged the CA’s decision via Rule 45, advancing arguments that (1) the trust over the disputed properties was an express trust and thus not subject to prescription until repudiated and (2) if implied, the trust was not an implied constructive trust or, alternatively, prescription should run from respondents’ later registration in 1984.
Legal Issue Presented
The dispositive legal issue was whether petitioner’s action for reconveyance had prescribed and, closely related, whether the relationship over the disputed properties was an express trust, a resulting implied trust, or a constructive implied trust — the classification affecting the prescriptive period’s commencement and whether repudiation by the trustee was required before prescription could run.
Court’s Characterization of the Trust
The Supreme Court accepted the factual finding that Juliana intended to constitute an express fideicomiso for her paraphernal properties, but also observed that the probate court expressly excluded the six disputed Batangas parcels from the fideicomiso and adjudicated them to Jose as heir. Because the exclusion was approved by the probate court and not successfully appealed or contested, the judicial adjudication carried the presumption of regularity. Where an erroneous adjudication occurs and an equitable obligation is implied by operation of law (given the circumstances of the adjudication and registration), the legal relation that arises is a constructive implied trust, not an express trust.
Legal Distinction: Resulting versus Constructive Implied Trusts
The Court reiterated established distinctions: resulting trusts are inferred from the nature of transactions and presumed to reflect parties’ intent (examples: when legal title is taken by one who furnished no consideration), whereas constructive trusts are imposed by equity to prevent unjust enrichment where property was obtained by mistake, fraud, or other inequitable means. The Civil Code provisions (Arts. 1448–1456) and jurisprudence (cited cases) provide the doctrinal framework for identifying when each applies.
Prescription Rule Applied to Constructive Trusts
The Court applied the rule that an action for reconveyance based on an implied or constructive trust prescribes in ten years. Critically, the ten-year period is reckoned from issuance of the original certificate of title or tran
...continue readingCase Syllabus (G.R. No. 237422)
Procedural Posture and Relief Sought
- This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure challenging the Court of Appeals Decision and Resolution in CA-G.R. CV No. 34086.
- The Court of Appeals affirmed the summary judgment of the Regional Trial Court (RTC), Branch 10, Balayan, Batangas, which dismissed petitioner Richard B. Lopez’s action for reconveyance on the ground of prescription.
- Petitioner, acting as trustee of the trust estate of the late Juliana Lopez-Manzano (Juliana), sought recovery by reconveyance of several tracts of land allegedly belonging to Juliana’s trust estate.
- The Supreme Court considered the case submitted for decision after dispensing with the filing of comments by respondents and resolved the petition by decision dated 16 December 2008.
Principal Parties and Capacities
- Petitioner: Richard B. Lopez, in his capacity as trustee of the trust estate of the late Juliana Lopez-Manzano.
- Decedent/Settlor: Juliana Lopez Manzano, married to Jose Lopez Manzano; their union produced no children.
- Respondents: Court of Appeals (as respondent in the petition for review) and multiple heirs/transferees of Jose Lopez Manzano, including Corazon Lopez, Fernando Lopez, Roberto Lopez (represented by Luzviminda Lopez), and several Manzano respondents represented by attorney-in-fact Modesto Rubio, among others.
- Other relevant persons: Jose Lopez Manzano (deceased husband and original designated trustee/executor); Enrique Lopez (nephew and designated successor trustee/executor); petitioner’s father Enrique Lopez who assumed trusteeship before petitioner’s appointment.
Facts: Properties, Will, and Testamentary Trust
- Juliana was the owner of several properties including more than 1,500 hectares comprising six parcels in Batangas, an Abra de Ilog parcel in Mindoro, and a fractional interest (1/6) in a residential lot on Antorcha St., Balayan, Batangas.
- On 23 March 1968 Juliana executed a notarial will (in Spanish) constituting a trust denominated “Fideicomiso de Juliana Lopez Manzano,” to be administered by her husband Jose, and if he died or renounced, by her nephew Enrique Lopez. The will provided:
- Two-thirds (2/3) of trust income to fund education of deserving but needy honor students.
- One-third (1/3) of trust income to be the administrator’s fees.
- As to conjugal properties and properties in both spouses’ names, Juliana bequeathed to Jose the portion she could legally dispose of and, after his death, those properties were to pass to her great-grandchildren (biznietos).
- Juliana initiated probate five days after executing the will but died on 12 August 1968; the petition for probate continued as Special Proceedings No. 706, prosecuted by Jose as designated executor.
Probate Proceedings, Inventory, and Project of Partition
- On 7 October 1968, the Court of First Instance, Branch 3, Balayan, Batangas, admitted Juliana’s will to probate and issued letters testamentary to Jose.
- Jose submitted an inventory of Juliana’s real and personal properties with appraised values, which the probate court approved.
- On 16 August 1969 Jose filed a Report including a project of partition asserting:
- As the sole compulsory heir, Jose was entitled by law to one-half (1/2) of Juliana’s paraphernal properties (her legitime), with the other one-half (1/2) to be constituted into the Fideicomiso.
- Juliana and Jose had outstanding debts of P816,000.00 (excluding interest) secured by mortgages, which would greatly reduce the residuary estate if liquidated.
- Jose offered a detailed project of partition listing properties to be constituted into the Fideicomiso (one-half of specified properties) and those adjudicated to him as heir.
- The project of partition listed numerous parcels, including the six disputed parcels in Batangas described by locations and title numbers and other parcels in Rizal, Manila and the Abra de Ilog lot in Mindoro.
Probate Court Orders, Issuance of Titles, and Exclusion of Disputed Lands from the Fideicomiso
- On 25 August 1969 the probate court approved Jose’s project of partition.
- The probate court ordered cancellation of certificates of title for properties constituting the Fideicomiso and issuance of new certificates in favor of Jose as trustee for one-half (1/2) of specified properties; the other half was registered in Jose’s name as heir.
- The properties Jose alleged were registered in both his and Juliana’s names, including the six disputed Balayan, Batangas parcels, were adjudicated to Jose as heir subject to his settlement of obligations charged on them.
- The probate court directed that new certificates of title be issued in favor of Jose as registered owner in its Order dated 15 September 1969; the certificates for the disputed properties were issued in Jose’s name on the same date.
- The Fideicomiso as constituted in S.P. No. 706 included the Abra de Ilog lot in Mindoro, the 1/6 portion of Antorcha St. lot, and properties inherited ab intestato from Juliana’s sister Clemencia; the disputed lands were expressly excluded from the trust by the probate court’s order.
Subsequent Events: Jose’s Death, Probate of His Will, and Transfer to Respondents
- Jose died on 22 July 1980, leaving a holographic will disposing of the disputed properties to the respondents.
- Jose’s will was admitted to probate on 20 December 1983 in S.P. No. 2675 before the RTC of Pasay City.
- Pursuant to Jose’s will and the RTC order dated 20 December 1983, the disputed properties’ certificates of title were cancelled and new titles were issued in the names of respondents (Jose’s heirs/transferees).
Appointment of Petitioner as Trustee and Reconveyance Action
- Enrique Lopez initially assumed trusteeship of Juliana’s estate; on 30 August 1984 the RTC of Batangas, Branch 9 appointed Richard B. Lopez (petitioner) as trustee of Juliana’s estate in S.P. No. 706.
- On 11 December 1984 petitioner instituted an action for reconveyance of parcels of land with sum of money before the RTC of Balayan, Batangas against the respondents.
- Petitioner alleged that the disputed properties were Juliana’s paraphernal properties and that Jose had registered them in his name either during the conjugal union or while performing duties as executor; upon Jose’s death, the disputed properties were treated as part of Jose’s estate though Jose held them in trust for Juliana’s trust estate.
- Respondents Maria Rolinda Manzano et al. filed a joint answer with a counterclaim for damages; respondents Corazon, Fernando and Roberto Lopez (minors) filed a motion to dismiss which was deferred until trial.
Trial Court Proceedings and Summary Judgment
- The RTC scheduled pre-trial conferences and ordered pre-trial briefs and exhibits.
- On 10 September 1990, the RTC rendered summary judgment dismissing petitioner’s action on the ground of prescription. The RTC also denied respondents’ motion to set a date of hearing on the counterclaim.
- Both petition