Republic of the Philippines

Supreme Court
Manila

THIRD DIVISION

SOLEDAD CAEZO, substituted by G.R. No. 148788

WILLIAM CAEZO and
VICTORIANO CAEZO Present:
Petitioners,
YNARES-SANTIAGO, J.,
Chairperson,
AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
- versus - NACHURA, and
REYES, JJ.

Promulgated:
CONCEPCION ROJAS,
Respondent. November 23, 2007

x-----------------------------------------------------------------------------------------x

DECISION

NACHURA, J.:

This is a petition for review on certiorari from the Decision[1] of the Court of
Appeals, dated September 7, 2000, in CA-G.R. SP No. 53236, and Resolution
dated May 9, 2001.
 On January 29, 1997, petitioner Soledad Caezo filed a Complaint [2] for the
recovery of real property plus damages with the Municipal Trial Court (MTC) of
Naval, Biliran, against her fathers second wife, respondent Concepcion Rojas. The
subject property is an unregistered land with an area of 4,169 square meters, situated
at Higatangan, Naval, Biliran. Caezo attached to the complaint a Joint
Affidavit[3] executed on May 10, 1979 by Isidro Catandijan and Maximina Caezo
attesting to her acquisition of theproperty.

In her complaint, the petitioner alleged that she bought the parcel of land in
1939 from Crisogono Limpiado, although the transaction was not reduced into
writing. Thereafter, she immediately took possession of the property. When she and
her husband left for Mindanao in 1948, she entrusted the said land to her father,
Crispulo[4] Rojas, who took possession of, and cultivated, the property. In 1980, she
found out that the respondent, her stepmother, was in possession of the property and
was cultivating the same. She also discovered that the tax declaration over the
property was already in the name of Crispulo Rojas.[5]

In her Answer, the respondent asserted that, contrary to the petitioners claim, it was
her husband, Crispulo Rojas, who bought the property from Crisogono Limpiado in
1948, which accounts for the tax declaration being in Crispulos name. From then on,
until his death in 1978, Crispulo possessed and cultivated the property. Upon his
death, the property was included in his estate, which was administered by a special
administrator, Bienvenido Ricafort. The petitioner, as heir, even received her share
in the produce of the estate. The respondent further contended that the petitioner
ought to have impleaded all of the heirs as defendants. She also argued that the fact
that petitioner filed the complaint only in 1997 means that she had already
abandoned her right over the property.[6]

On July 3, 1998, after hearing, the MTC rendered a Decision in favor of the
petitioner, thus:

WHEREFORE, premises considered, the Court finds a preponderance of

evidence in favor of plaintiff Soledad Caezo and against defendant
Concepcion Rojas by declaring plaintiff the true and lawful owner of the
 land more particularly described under paragraph 5 of the complaint and
hereby orders defendant Concepcion Rojas:

a) To vacate and surrender possession of the land to

plaintiff;
b) To pay plaintiff the sum of P34,000.00 actual
damages, P10,000.00 for attorneys fees
and litigation expenses; and
c) To pay the costs.

SO ORDERED.[7]

Despite the respondents objection that the verbal sale cannot be proven without
infringing the Statute of Frauds, the MTC gave credence to the testimony of the
petitioners two witnesses attesting to the fact that Crisogono Limpiado sold the
property to the petitioner in 1939. The MTC also found no evidence to show that
Crispulo Rojas bought the property from Crisogono Limpiado in 1948. It held that
the 1948 tax declaration in Crispulos name had little significance on respondents
claim, considering that in 1948, the country was then rehabilitating itself from the
ravages of the Second World War and the government was more interested in the
increase in tax collection than the observance of the niceties of law.[8]

The respondent appealed the case to the Regional Trial Court (RTC) of Naval,
Biliran. On October 12, 1998, the RTC reversed the MTC decision on the ground
that the action had already prescribed and acquisitive prescription had set in. The
dispositive portion of the Decision reads:

WHEREFORE, premises considered, the decision of the Municipal Trial

Court of Naval, Biliran awarding ownership of the disputed land to the
plaintiff and further allowing recovery of damages is hereby REVERSED
in toto. There is no award of damages.

The said property remains as the legitime of the defendant Concepcion

Rojas and her children.

SO ORDERED.[9]
 However, acting on petitioners motion for reconsideration, the RTC amended
its original decision on December 14, 1998.[10] This time, it held that the action had
not yet prescribed considering that the petitioner merely entrusted the property to
her father. The ten-year prescriptive period for the recovery of a property held in
trust would commence to run only from the time the trustee repudiates the trust. The
RTC found no evidence on record showing that Crispulo Rojas ever ousted the
petitioner from the property. The dispositive portion of the amended decision reads
as follows:

WHEREFORE, in view of the foregoing considerations, the

decision of this Court dated October 12, 1998 is hereby set aside and
another is hereby entered modifying the decision of the Court a quo and
declaring Soledad Rojas Vda. De Caezo as the true and lawful owner of a
parcel of land, more particularly described and bounded as follows:

A parcel of land situated at Higatangan, Naval,

Biliran, bounded on the North by Policarpio Limpiado; on
the South by Fidel Limpiado; on the East by Seashore; and
on the West by Crispolo (sic) Limpiado with an approximate
area of 4,169 square meters per Tax Declaration No. 2258,
later under Tax Declaration No. 4073 in the name of
Crispolo Rojas and later in the name of the Heirs of Crispolo
Rojas.

Further, ordering defendant-appellant Concepcion Rojas and all

persons claiming rights or interest under her to vacate and surrender
possession of the land aforecited to the plaintiff or any of her authorized
representatives, Ordering the Provincial and/or Municipal Assessors
Office to cancel the present existing Tax Declaration in the name of Heirs
of Crispolo Rojas referring to the above-described property in favor of the
name of Soledad Rojas Vda. De Caezo, Ordering the defendant-appellant
Concepcion Rojas to pay the plaintiff-appellee the sum of P34,000.00 in
actual damages, and to pay for the loss of her share in money value of the
products of the coconuts of said land from 1979 to 1997 and to pay further
until the case is terminated at the rate of P200.00 per quarter based on the
regular remittances of the late Crispolo Rojas to the plaintiff-appellee, and
to pay the costs.
 SO ORDERED.[11]

The respondent filed a motion to reconsider the Amended Decision but the
RTC denied the same in an Order dated April 25, 1999.

She then filed a petition for review with the Court of Appeals (CA), which
reversed the Amended Decision of the RTC on September 7, 2000, thus:

WHEREFORE, the amended decision dated December 14,

1998 rendered in Civil Case No. B-1041 is hereby REVERSED and SET
ASIDE. The complaint filed by Soledad Caezobefore the Municipal Trial
Court of Naval, Biliran is hereby DISMISSED on grounds of laches and
prescription and for lack of merit.

SO ORDERED.[12]

The CA held that the petitioners inaction for several years casts a serious
doubt on her claim of ownership over the parcel of land. It noted that 17 years lapsed
since she discovered that respondent was in adverse possession of the property
before she instituted an action to recover the same. And during the probate
proceedings, the petitioner did not even contest the inclusion of the property in the
estate of Crispulo Rojas. [13]

The CA was convinced that Crispulo Rojas owned the property, having
bought the same from Crisogono Limpiado in 1948. Supporting this conclusion, the
appellate court cited the following circumstances: (1) the property was declared for
taxation purposes in Crispulos name and he had been paying the taxes thereon from
1948 until his death in 1978; (2) Crispulo adversely possessed the same property
from 1948 until his death in 1978; and (3) upon his death in 1978, the property was
included in his estate, the proceeds of which were distributed among his heirs.[14]

The CA further held that, assuming that there was an implied trust between
the petitioner and her father over the property, her right of action to recover the same
would still be barred by prescription since 49 years had already lapsed since Crispulo
adversely possessed the contested property in 1948.[15]

On May 9, 2001, the CA denied the petitioners motion for reconsideration for
lack of merit.[16]

In this petition for review, the petitioner, substituted by her heirs, assigns the
following errors:

That the Court of Appeals committed grave abuse of discretion in

setting aside petitioners contention that the Petition for Review filed by
respondent CONCEPCION ROJAS before the Court of Appeals was
FILED OUT OF TIME;

That the Court of Appeals erred and committed grave abuse of

discretion amounting to lack or excess of jurisdiction when it decided that
the filing of the case by SOLEDAD CAEZO for Recovery of Real
Property was already barred by PRESCRIPTION AND LACHES.[17]

The petitioner insists that the respondents petition for review before the CA
was filed out of time. The petitioner posits that the CA may not grant an additional
extension of time to file the petition except for the most compelling reason. She
contends that the fact that respondents counsel needed additional time to secure the
certified copy of his annexes cannot be considered as a compelling reason that would
justify an additional period of
extension. She admits, though, that this issue was raised for the first time in their
motion for reconsideration, but insists that it can be raised at any time since it
concerns the jurisdiction of the CA over the petition.

The petitioner further posits that prescription and laches are unavailing
because there was an express trust relationship between the petitioner and Crispulo
Rojas and his heirs, and express trusts do not prescribe. Even assuming that it was
not an express trust, there was a resulting trust which generally does not prescribe
unless there is repudiation by the trustee.
 For her part, the respondent argues that the petitioners are now estopped from
questioning the CA Resolution granting her second motion for extension to file the
petition for review. She notes that the petitioner did not raise this issue in the
comment that she filed in the CA. In any case, the grant of the second extension of
time was warranted considering that the certified true copy of the assailed RTC
orders did not arrive at the office of respondents counsel in Cebu City in time for the
filing of the petition.

On the merits, the respondent asserts that the complaint is barred by

prescription, laches and estoppel. From 1948 until his death in 1978, Crispulo
cultivated the property and was in adverse, peaceful and continuous possession
thereof in the concept of owner. It took the petitioner 49 years from 1948 before she
filed the complaint for recovery of the property in 1997. Granting that it was only in
1980 that she found out that the respondent adversely possessed the property, still
petitioner allowed 17 years to elapse before she asserted her alleged right over the
property.

Finally, the respondent maintains that the other co-owners are indispensable
parties to the case; and because they were not impleaded, the case should be
dismissed.

The petition has no merit.

On the procedural issue raised by the petitioner, we find no reversible error in

the grant by the CA of the second motion for extension of time to file the respondents
petition. The grant or denial of a motion for extension of time is addressed to the
sound discretion of the court.[18] The CA obviously considered the difficulty in
securing a certified true copy of the assailed decision because of the distance
between the office of respondents counsel and the trial court as a compelling reason
for the request. In the absence of any showing that the CA granted the motion for
extension capriciously, such exercise of discretion will not be disturbed by this
Court.

On the second issue, the petitioner insists that her right of action to recover
the property cannot be barred by prescription or laches even with the respondents
uninterrupted possession of the property for 49 years because there existed between
her and her father an express trust or a resulting trust. Indeed, if no trust relations
existed, the possession of the property by the respondent, through her predecessor,
which dates back to 1948, would already have given rise to acquisitive prescription
in accordance with Act No. 190 (Code of Civil Procedure).[19] Under Section 40 of
Act No. 190, an action for recovery of real property, or of an interest therein, can be
brought only within ten years after the cause of action accrues. This period coincides
with the ten-year period for acquisitive prescription provided under Section 41[20] of
the same Act.
Thus, the resolution of the second issue hinges on our determination of the
existence of a trust over the property --- express or implied --- between the petitioner
and her father.

A trust is the legal relationship between one person having an equitable

ownership of property and another person owning the legal title to such property, the
equitable ownership of the former entitling him to the performance of certain duties
and the exercise of certain powers by the latter.[21] Trusts are either express or
implied.[22] Express trusts are those which are created by the direct and positive acts
of the parties, by some writing or deed, or will, or by words evincing an intention to
create a trust.[23] Implied trusts are those which, without being expressed, are
deducible from the nature of the transaction as matters of intent or, independently,
of the particular intention of the parties, as being superinduced on the transaction by
operation of law basically by reason of equity.[24] An implied trust may either be a
resulting trust or a constructive trust.

It is true that in express trusts and resulting trusts, a trustee cannot acquire by
prescription a property entrusted to him unless he repudiates the trust. [25] The
following discussion is instructive:

There is a rule that a trustee cannot acquire by prescription the

ownership of property entrusted to him, or that an action to compel a
trustee to convey property registered in his name in trust for the benefit of
the cestui que trust does not prescribe, or that the defense of
prescription cannot be set up in an action to recover property held by a
person in trust for the benefit of another, or that property held in trust can
be recovered by the beneficiary regardless of the lapse of time.
 That rule applies squarely to express trusts. The basis of the rule is
that the possession of a trustee is not adverse. Not being adverse, he does
not acquire by prescription the property held in trust. Thus, Section 38 of
Act 190 provides that the law of prescription does not apply "in the case
of a continuing and subsisting trust."

The rule of imprescriptibility of the action to recover property held

in trust may possibly apply to resulting trusts as long as the trustee has not
repudiated the trust.

xxxx

Acquisitive prescription may bar the action of the beneficiary

against the trustee in an express trust for the recovery of the property held
in trust where (a) the trustee has performed unequivocal acts of
repudiation amounting to an ouster of the cestui que trust; (b) such
positive acts of repudiation have been made known to the cestui que trust,
and (c) the evidence thereon is clear and conclusive.[26]

As a rule, however, the burden of proving the existence of a trust is on the

party asserting its existence, and such proof must be clear and satisfactorily show
the existence of the trust and its elements.[27] The presence of the following elements
must be proved: (1) a trustor or settlor who executes the instrument creating the trust;
(2) a trustee, who is the person expressly designated to carry out the trust; (3)
the trust res, consisting of duly identified and definite real properties; and (4)
the cestui que trust, or beneficiaries whose identity must be clear.[28] Accordingly, it
was incumbent upon petitioner to prove the existence of the trust relationship. And
petitioner sadly failed to discharge that burden.

The existence of express trusts concerning real property may not be

established by parol evidence.[29] It must be proven by some writing or deed. In this
case, the only evidence to support the claim that an express trust existed between the
petitioner and her father was the self-serving testimony of the petitioner. Bare
allegations do not constitute evidence adequate to support a conclusion. They are not
equivalent to proof under the Rules of Court.[30]
 In one case, the Court allowed oral testimony to prove the existence of a trust,
which had been partially performed. It was stressed therein that what is important is
that there should be an intention to create a trust, thus:

What is crucial is the intention to create a trust. While oftentimes the

intention is manifested by the trustor in express or explicit language, such
intention may be manifested by inference from what the trustor has said
or done, from the nature of the transaction, or from the circumstances
surrounding the creation of the purported trust.

However, an inference of the intention to create a trust, made from

language, conduct or circumstances, must be made with reasonable
certainty. It cannot rest on vague, uncertain or indefinite declarations. An
inference of intention to create a trust, predicated only on circumstances,
can be made only where they admit of no other interpretation.[31]

Although no particular words are required for the creation of an express trust,
a clear intention to create a trust must be shown; and the proof of fiduciary
relationship must be clear and convincing. The creation of an express trust must be
manifested with reasonable certainty and cannot be inferred from loose and vague
declarations or from ambiguous circumstances susceptible of other
interpretations.[32]

In the case at bench, an intention to create a trust cannot be inferred from the
petitioners testimony and the attendant facts and circumstances. The petitioner
testified only to the effect that her agreement with her father was that she will be
given a share in the produce of the property, thus:

Q: What was your agreement with your father Crispulo Rojas when
you left this property to him?
A: Every time that they will make copra, they will give a share.

Q: In what particular part in Mindanao [did] you stay with your

husband?
A: Bansalan, Davao del Sur.
 Q: And while you were in Bansalan, Davao del Sur, did Crispolo
Rojas comply with his obligation of giving your share the proceeds of the
land?
A: When he was still alive, he gave us every three months
sometimes P200.00 and sometimes P300.00.[33]

This allegation, standing alone as it does, is inadequate to establish the existence of

a trust because profit-sharing per se, does not necessarily translate to a trust
relation. It could also be present in other relations, such as in deposit.

What distinguishes a trust from other relations is the separation of the legal
title and equitable ownership of the property. In a trust relation, legal title is vested
in the fiduciary while equitable ownership is vested in a cestui que trust. Such is not
true in this case. The petitioner alleged in her complaint that the tax declaration of
the land was transferred to the name of Crispulo without her consent. Had it been
her intention to create a trust and make Crispulo her trustee, she would not have
made an issue out of this because in a trust agreement, legal title is vested in the
trustee. The trustee would necessarily have the right to transfer the tax declaration
in his name and to pay the taxes on the property. These acts would be treated as
beneficial to the cestui que trust and would not amount to an adverse possession.[34]

Neither can it be deduced from the circumstances of the case that a resulting
trust was created. A resulting trust is a species of implied trust that is presumed
always to have been contemplated by the parties, the intention as to which can be
found in the nature of their transaction although not expressed in a deed or
instrument of conveyance. A resulting trust is based on the equitable doctrine that it
is the more valuable consideration than the legal title that determines the equitable
interest in property.[35]

While implied trusts may be proved by oral evidence, the evidence must be
trustworthy and received by the courts with extreme caution, and should not be made
to rest on loose, equivocal or indefinite declarations. Trustworthy evidence is
required because oral evidence can easily be fabricated.[36] In order to establish an
implied trust in real property by parol evidence, the proof should be as fully
convincing as if the acts giving rise to the trust obligation are proven by an authentic
document. An implied trust, in fine, cannot be established upon vague and
inconclusive proof.[37] In the present case, there was no evidence of any transaction
between the petitioner and her father from which it can be inferred that a resulting
trust was intended.

In light of the disquisitions, we hold that there was no express trust or resulting
trust established between the petitioner and her father. Thus, in the absence of a trust
relation, we can only conclude that Crispulos uninterrupted possession of the subject
property for 49 years, coupled with the performance of acts of ownership, such as
payment of real estate taxes, ripened into ownership. The statutory period of
prescription commences when a person who has neither title nor good faith, secures
a tax declaration in his name and may, therefore, be said to have adversely
claimed ownership of the lot.[38] While tax declarations and receipts are not
conclusive evidence of ownership and do not prove title to the land, nevertheless,
when coupled with actual possession, they constitute evidence of great weight and
can be the basis of a claim of ownership through prescription.[39] Moreover, Section
41 of Act No. 190 allows adverse possession in any character to ripen into ownership
after the lapse of ten years. There could be prescriptionunder the said section even
in the absence of good faith and just title.[40]

All the foregoing notwithstanding, even if we sustain petitioners claim that

she was the owner of the property and that she constituted a trust over the property
with her father as the trustee, such a finding still would not advance her case.

Assuming that such a relation existed, it terminated upon Crispulos death in

1978. A trust terminates upon the death of the trustee where the trust is personal to
the trustee in the sense that the trustor intended no other person to administer it.[41] If
Crispulo was indeed appointed as trustee of the property, it cannot be said that such
appointment was intended to be conveyed to the respondent or any of Crispulos other
heirs. Hence, after Crispulos death, the respondent had no right to retain possession
of the property. At such point, a constructive trust would be created over the property
by operation of law. Where one mistakenly retains property which rightfully belongs
to another, a constructive trust is the proper remedial device to correct the
situation.[42]
 A constructive trust is one created not by any word or phrase, either expressly
or impliedly, evincing a direct intention to create a trust, but one which arises in
order to satisfy the demands of justice. It does not come about by agreement or
intention but in the main by operation of law, construed against one who, by fraud,
duress or abuse of confidence, obtains or holds the legal right to property which he
ought not, in equity and good conscience, to hold.[43]

As previously stated, the rule that a trustee cannot, by prescription, acquire

ownership over property entrusted to him until and unless he repudiates the trust,
applies to express trusts and resulting implied trusts. However, in constructive
implied trusts, prescription may supervene even if the trustee does not repudiate the
relationship. Necessarily, repudiation of the said trust is not a condition precedent to
the running of the prescriptive period.[44] A constructive trust, unlike an express trust,
does not emanate from, or generate a fiduciary relation. While in an express trust, a
beneficiary and a trustee are linked by confidential or fiduciary relations, in a
constructive trust, there is neither a promise nor any fiduciary relation to speak of
and the so-called trustee neither accepts any trust nor intends holding the property
for the beneficiary.[45] The relation of trustee and cestui que trust does not in fact
exist, and the holding of a constructive trust is for the trustee himself, and therefore,
at all times adverse.
In addition, a number of other factors militate against the petitioners
case. First, the petitioner is estopped from asserting ownership over the subject
property by her failure to protest its inclusion in the estate of Crispulo. The CA,
thus, correctly observed that:

Even in the probate proceedings instituted by the heirs of Crispulo Rojas,

which included her as a daughter of the first marriage, Caezo never contested the
inclusion of the contested property in the estate of her father. She even
participated in the project of partition of her fathers estate which was approved by
the probate court in 1984. After personally receiving her share in the proceeds of
the estate for 12 years, she suddenly claims ownership of part of her fathers estate
in 1997.

The principle of estoppel in pais applies when -- by ones acts, representations,

admissions, or silence when there is a need to speak out -- one, intentionally or
through culpable negligence, induces another to believe certain facts to exist; and
the latter rightfully relies and acts on such belief, so as to be prejudiced if the
former is permitted to deny the existence of those facts.[46] Such a situation obtains
in the instant case.

Second, the action is barred by laches. The petitioner allegedly discovered that the
property was being possessed by the respondent in 1980.[47] However, it was only
in 1997 that she filed the action to recover the property. Laches is negligence or
omission to assert a right within a reasonable time, warranting a presumption that
the party entitled to it has either abandoned or declined to assert it.[48]

Finally, the respondent asserts that the court a quo ought to have dismissed
the complaint for failure to implead the other heirs who are indispensable parties.
We agree. We note that the complaint filed by the petitioner sought to recover
ownership, not just possession of the property; thus, the suit is in the nature of an
action for reconveyance. It is axiomatic that owners of property over which
reconveyance is asserted are indispensable parties. Without them being impleaded,
no relief is available, for the court cannot render valid judgment. Being
indispensable parties, their absence in the suit renders all subsequent actions of the
trial court null and void for want of authority to act, not only as to the absent
parties but even as to those present. Thus, when indispensable parties are not
before the court, the action should be dismissed.[49] At any rate, a resolution of this
issue is now purely academic in light of our finding that the complaint is already
barred by prescription, estoppel and laches.

WHEREFORE, premises considered, the petition is DENIED. The Decision of the

Court of Appeals, dated September 7, 2000, and Resolution dated May 9, 2001,
areAFFIRMED.
SO ORDERED.