G.R. No. 117228 - Morales vs. Court of Appeals

Petitioners asserted co-ownership or trust relationship over the land acquired by Celso Avelino for their parents and siblings; claimed Rodolfo Morales as a good-faith builder entitled to indemnity.
Respondents asserted absolute ownership by purchase from Celso Avelino and sought recovery of possession, removal of improvements, monthly rentals, damages, attorney’s fees, and costs.

1987 Philippine Constitution (decision after 1990)
Rule 45, Rules of Court (petition for review on certiorari)
Civil Code Articles on trusts (Art. 1448), good-faith builder (Arts. 448, 453), moral damages (Arts. 2217–2220), attorney’s fees (Art. 2208)

Celso Avelino purchased the disputed lot and built a two-storey residence; had tax declarations and survey in his name and paid realty taxes.
Respondents bought the property from Celso by Deed of Absolute Sale and transferred the tax declaration to Erlinda Ortiz.
Rodolfo Morales constructed and operated a beauty shop on the premises without relinquishing possession; respondents filed for possession and damages.
Petitioners claimed that Celso held title in trust for his parents (Rosendo and Juana Avelino) and their heirs, including petitioners, and that Rodolfo was a builder in good faith.

Documentary evidence (deeds of sale, tax declarations, survey plan) established Celso Avelino’s absolute ownership, later transferred to respondents.
Petitioners’ claim of an implied trust was based solely on testimonial evidence, found self-serving, equivocal, and barred by laches.
Confirmation by co-heir Concepcion Peralta (declaration against interest) reinforced Celso’s exclusive ownership.
Rodolfo Morales acted in bad faith, aware he was not owner, and no trust was implied because Celso was the buyer and no contrary intention was proven.
Awarded respondents possession, removal of improvements, monthly rent from March 1987, moral damages (₱75,000), litigation expenses (₱5,000), attorney’s fees (₱10,000), and permanent injunction.

Existence of an implied trust under Article 1448, Civil Code
Status of Rodolfo Morales as builder in good faith under Articles 448 and 453, Civil Code
Basis for awards of moral damages, attorney’s fees, and litigation expenses

A resulting trust under Art. 1448 is rebutted where legal title is conveyed to a child of the one furnishing purchase money (presumption of gift).
Petitioners bore the burden to prove an implied trust by clear, trustworthy evidence; failed to do so.
Celso’s acts (tax transfers, survey, tax payments, final sale) demonstrated exclusive ownership.
Petitioners did not plead or prove breach of trust, and their own pleadings and pre-trial order did not raise an implied-trust issue.
Testimonial evidence was deemed unworthy; documentary evidence prevailed.

Article 448 applies only when the builder reasonably believes himself owner; Rodolfo admitted knowledge that grandparents owned the land.
Petitioners’ claim of consent by Celso to build was unsubstantiated, self-serving, and unrebutted by Celso (deceased).
No entitl

Petitioners sought review under Rule 45 of the Rules of Court from the Court of Appeals’ 20 April 1994 decision in CA-G.R. CV No. 34936.
The appellate court had affirmed in toto the 26 August 1991 decision of the Regional Trial Court (RTC) of Calbayog City in Civil Case No. 265.
Private respondents (Ortiz spouses) filed an action for recovery of possession, damages, and a preliminary mandatory injunction against Rodolfo Morales.
Priscila Morales intervened on 4 March 1988; Rodolfo Morales died 30 November 1988 and was substituted by his heirs.
After trial, the RTC rendered judgment for plaintiffs; defendants and intervenor appealed, but the Court of Appeals affirmed.
Petitioners filed a Rule 45 petition; after initial denial and motion for reconsideration, the Supreme Court granted reconsideration on 19 August 1996, limited to three issues: existence of an implied trust, builder in good faith, and award of damages.

Celso Avelino purchased two adjoining parcels of land at corner Umbria St. and Rosales Blvd., Brgy. Central, Calbayog City in 1948 by public Deed of Sale.
He transferred tax declarations to his name, had the lot surveyed, built a two-storey residence, and paid realty taxes continuously.
Without his knowledge, Rodolfo Morales constructed a small beauty shop on the premises in 1979.
After Celso offered to sell the property, private respondents purchased it in March 1987; deed executed in their favor, tax declaration transferred to Priscila Morales, who paid taxes.
Defendant refused to vacate or remove improvements unless reimbursed ₱35,000, though valued under ₱5,000; plaintiffs demanded removal and eviction.
Plaintiffs filed suit when defendant occupied the main building and took boarders.

Uncontested identity and boundaries of the 318 sq.-meter parcel and two-storey building.
Documentary evidence (Deeds of Sale, tax declarations, survey plan) proved plaintiffs’ title; defendants’ claim rested on self-serving testimony.
Intervenor’s evidenc