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MGA HATOL NG KATAAS-TAASANG HUKUMAN

(DECISIONS OF THE SUPREME COURT)

SALVADOR B. DE GUZMAN

SUPREME COURT REPORTER

[G. R. No. L-49087. April 5, 1982)

SECOND DIVISION

MINDANAO DEVELOPMENT AUTHORITY, now the SOUTHERN PHILIPPINES DEVELOPMENT ADMINISTRATION, Petitioner, vs. THE COURT OF APPEALS and FRANCISCO ANG BANSING, Respondents.

Manuel Lazaro & Virgilio C. Abejo for petitioner.

Jose S. Rodriguez for respondents. Vicente Garcia for private respondents.

SYNOPSIS

On February 25, 1939, Ang Bansing, owner of a large tract of land in Davao City, sold portion thereof to Cruz. Their contract stipulated that Ang Bansing would work for the titling of the entire area of his land at his expense, while the vendee would spend for the titling of the portion sold to him. After the cadastral survey, where the portion sold to Cruz was designated as Lot 1846-C and the portion remaining with Ang Bansing was designated as Lots 1846A, 1846-B, 1846-D, and 1846-E, Cruz sold Lot 1846-C to the Commonwealth of the Philippines. Thereafter, pursuant to a decree of registration, Original Certificate of Title No. 26, covering the entire area, including the lot sold to Cruz, was issued on March 7, 1941 in the names of the original claimants in the cadastral proceedings. This OCT was however cancelled on March 31, 1941 per Deed of Adjudication in favor of Ang Bansing for which he was issued a transfer certificate of title. Later, on various dates, Ang Bansing also sold Lot 1846A, portions of Lot 1846-B, and Lot 1846-D to Cruz and the Transfer Certificate of Title

corresponding to the said lots in the name of Ang Bansing were cancelled and new ones issued in the name of Cruz. Transfer Certificate of Title No. 2601 was issued in the name of Ang Bansing for the remaining lots, including Lot 1846-C. On February 25, 1965, pursuant to Presidential Proclamation 459, government ownership of certain parcels of land in Davao City were transferred to the Mindanao Development Authority (MDA), among which was Lot 1846-C. MDA accordingly requested Ang Bansing to surrender his owner's duplicate of TCT 2601 for registration of the government's ownership over Lot 1846-C, but he refused. MDA thus filed a suit for reconveyance on April 11, 1969, claiming that Ang Bansing acted

as trustee for Cruz when he worked for the entire tract of land as per their contract. The trial court found the existence of an express trust and ordered the reconveyance of the subject lot to MDA. On appeal, however, the Court of Appeals found no express trust and dismissed the complaint.

On petition for review, the Supreme Court held that failure on the part of Ang Bansing to definitely describe the subject-matter of the supposed trust or the beneficiaries or object thereof is strong evidence that he intended no trust; and that only an implied trust or constructive trust may have been impressed upon the title of Ang Bansing over Lot 1846-C but such constructive trust

has already prescribed and has been barred by laches.

Petition denied.

SYLLABUS

of the Ruling of the Court

1. CIVIL LAW; OBLIGATIONS AND CONTRACTS; TRUSTS; KINDS. Trusts are either express or implied. Express trusts are created by the intention of the trustor or of the parties. Implied trusts come into being by operation of law (Article 1441, Civil Code).

2. ID.; ID.; ID.; ID.; EXPRESS TRUST; ELEMENTS.— It is fundamental in the law of trusts that certain requirements must exist before an express trust will be recognized. Basically, these elements include a competent trustor and trustee, an ascertainable trust res, and sufficiently certain beneficiaries. Stilted formalities are unnecessary, but nevertheless each of the above elements is required to be established, and, if anyone of them is missing, it is fatal to the trusts. Furthermore, there must be a present and complete disposition of the trust property, notwithstanding that the enjoyment in the beneficiary will take place in the future. It is essential, too, that the purpose be an active one to prevent trust from being executed into a legal estate or interest, and one that is not in contravention of some prohibition of statute or rule of public policy. There must also be some power of administration other than a mere duty to perform a contract although the contract is for a third-party beneficiary. A declaration of terms is essential, and these must be stated with reasonable certainty in order that the trustee may administer, and that the court, if called upon to do so, may enforce, the trust (Sec. 31, Trusts, 76 Am Jur 2d, pp. 278–279). 3. ID.; ID.; ID.; ID.; ID.; ID.; CASE AT BAR.-There is no express trust where the stipulation in the deed of sale executed by Ang Bansing in favor of Juan Cruz is a mere condition that Ang Bansing shall pay the expenses for the registration of his land and for Juan Cruz to shoulder the expenses for the registration of the land sold to him. The stipulation does not categorically create an obligation on the part of Ang Bansing to hold the property in trust for Juan Cruz. It is essential to the creation of an express trust that the settlor presently and unequivocably make a disposition of property and make himself the trustee of the property for the benefit of another (Sec. 35, Trusts, 76 Am Jur 2d. 281).

4. ID.; ID.; ID.; ID.; ID.; CLEAR AND UNEQUIVOCAL LANGUAGE NECESSARY TO CREATE TRUST.Clear and unequivocal language is necessary to create a trust and mere precatory language and statements of ambiguous nature, are not sufficient to establish a trust. As the Court stated in De Leon vs. Packson, 11 Phil. 1267, a trust must be proven by clear, satisfactory and convincing evidence; it cannot rest on vague and uncertain evidence or on loose, equivocal or indefinite declarations.

5. ID.; ID.; ID.; ID.; ID.; REPUDIATION

THEREOF RENDERS TRUST, PRESCRIPTIBLE; CASE AT..

BAR.-But, even granting arguendo, that an express trust had been established, it would appear that the trustee had repudiated the trust and the petitioner did not take any action therein until after the lapse of 23 years. Thus, in its Reply to the Defendant's Answer, filed on June 29, 1969, petitioner admitted, that after the last war the City Engineer's Office of Davao City made repeated demands on the defendants for the delivery and conveyance to the Commonwealth Government, now the Republic of the Philippines, of the title of land in question, Lot 1846-C, but the defendant ignored and evaded the same." Considering that the demand was made in behalf of the Commonwealth Government, it is obvious that the said demand was made before July 4, 1946, when the Commonwealth Government was dismantled and the Republic of the Philippines came into oeing. From 1946 to 1969, when the action for reconveyance was filed with the court, 23 years had passed. For sure, the period for enforcing the alleged beneficiary over the land in question after the repudiation of the trust by the trustee, had already prescribed.

6. ID.; ID.; ID.; ID.; IMPLIED TRUST; CASE AT BAR.— An implied trust may have been impressed upon the title of Ang Bansing over Lot 1846-C of the Davao Cadastre since the land in question was registered in his name although the land belonged to another. In implied trust, there is neither promise nor fiduciary relations, the so-called trustee does not recognize any trust and has no intent to hold the property for the beneficiary. It does not arise by agreement or intention, but by operation of law. Thus, if property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes (Article 1456, Civil Code).

7. ID.; ID.; ID.; ID.; ID.; PRESCRIPTIBLE; CASE AT BAR.-Such constructive trust is not a trust in the technical sense and prescribes in 10 years. Here, the 10-year prescriptive period began on March 31, 1941, upon the issuance of Original Certificate of Title No. 26 in the names of Victoria Ang Bansing, Orfelina Ang Bansing, and Francisco Ang Bansing. From that date up to April 11, 1969, when the complaint for reconveyance was filed, more than 28 years had passed. Clearly, the action for reconveyance had prescribed.

8. ID.; ID.; ID.; ID.; ID.; ACTION FOR RECONVEYANCE OF SUBJECT NOT BARRED BY LACHES IN CASE AT BAR.-The enforcement of the constructive

trust that may have been impressed upon the title of Ang Bansing over Lot 1846-C of the Davao Cadastre is barred by laches. It appears that the deed of sale in favor of the Commonwealth Government was executed by Juan Cruz on December 23, 1939, during the cadastral proceedings, and even before the cadastral survey plan was approved by the Director of Lands on July 10, 1940. But, the vendee therein did not file an answer, much less an opposition to the answer of Ang Bansing, in the said cadastral proceedings. The judgment rendered in the said cadastral proceeding, awarding the lot in question to Ang Bansing, is already final. After an inexcusable delay of more than 28 years and acquiescene to existing conditions, it is now too late for the petitioner to complain.

AQUINO, J., Dissenting:

1. CIVIL LAW; OBLIGATIONS AND CONTRACT; EXPRESS TRUST; EVIDENCED BY AFFIDAVIT IN CASE AT BAR.-Ang Bansing is a trustee in an express trust covering Lot No. 1846-C. The trust is evidenced by his aforementioned affidavit of April 23, 1941 which he executed 23 days after TCT No. 1783 was issued to him for that lot wherein he swore that he intended to cede and transfer that lot to Juan Cruz after the survey. The same should be considered in conjunction with the stipulation in the 1939 deed of sale that Ang Bansing would undertake the titling of the whole Lot No. 1846 and that the registration expenses corresponding to Lot No. 1846-C would be borne by Juan Cruz, the vendee of that subdivision lot.

2. ID.; ID.; ID.; NOT PRESCRIPTIBLE.-There being an express trust in this case, the equitable action to compel the trustee to reconvey the land registered in his name in trust for the benefit of the cestui que trust does not prescribe (Manalang vs. Canlas, 94 Phil. 776; Ramos vs. Ramos, 61 SCRA 284). In any event, the real plaintiff in this case is the Republic of the Philippines and prescription does not run against the State (De la Viña vs. Government of the P.I.; 65 Phil. 262, 265; Republic vs. Ruiz, L-23712, April 29, 1968, 23 SCRA 348).

3. ID.; ESTOPPEL; STATE NOT ESTOPPED BY NEGLIGENCE OF PUBLIC OFFICERS.-The government officials concerned were negligent in not intervening in the land registration proceeding or in not promptly asking Ang Bansing to reconvey the disputed lot to the Commonwealth or to the Republic of the Philippines. Such negligence does not prejudice the State.

The negligence or omissions of public officers as to their public duties will not work an estoppel against the State (10 R. C. L. 705, cited in Bachrach Motor Co. vs. Unson, 50 Phil. 981, 990; Central Azucarera de Tarlac vs. Collector of Internal Revenue, 104 Phil. 653, 656; People vs. Ventura, 114 Phil. 162, 169).

CONCEPCION JR., J.:

Petition for review on certiorari of the decision of the Court of Appeals in CA-G.R. No. 48488-R, entitled: "Mindanao Development Authority, etc., plaintiff-appellee, versus Francisco Ang Bansing, defendant appellant", which reversed the decision of the Court of First Instance of Davao and dismissed the complaint filed in Civil Case No. 6480 of the said court.

It is not disputed that the respondent Francisco Ang Bansing was the owner of a big tract of land with an area of about 300,000 sq.m., situated in Barrio Panacan, Davao City. On February 25, 1939, Ang Bansing sold a portion thereof, with an area of about 5 hectares to Juan Cruz Yap Chuy. The contract provided, among others, the following:

"That I hereby agree to work for the titling of the entire area of my land under my own expenses and the expenses for the titling of the portion sold to me shall be under the expenses of the said Juan Cruz Yap Chuy"

1

After the sale, the land of Ang Bansing was surveyed and designated as Lot 664-B, Psd-1638. Lot 664-B was further subdivided into five (5) lots and the portion sold to Juan Cruz Yap Chuy, shortened to Juan Cruz, was designated as Lot 664-B-3, with an area of 61.107 square meters, more or less. On June 15-17 and December 15, 1939, a cadastral survey was made and Lot 664-3-3 was designated as Lot 1846-C of the Davao Cadastre.

On December 23, 1939, Juan Cruz sold Lot 1846-C to the Commonwealth of the Philippines for the amount of P6,347.50.3 On that same day, Juan Cruz, as vendor, and C.B.

'Record on Appeal, pp. 12-16, 85.

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Cam and Miguel N. Lansona, as sureties, executed a surety bond in favor of the vendee to guarantee the vendor's absolute title over the land sold.*

The cadastral survey plan was approved by the Director of Lands on July 10, 1940,5 and on March 7, 1941, Original Certificate of Tittle No. 26 was issued in the names of Victoriana Ang Bansing, Orfelina Ang Bansing, and Francisco Ang Bansing, as claimants of the land, pursuant to Decree No. 745358 issued on July 29, 1940. On March 31, 1941, OCT No. 26 was cancelled pursuant to a Deed of Adjudication and Transfer Certificate of Title No. 1783 was issued in the name of Francisco Ang Bansing."

On that day, March 31, 1941, Ang Bansing sold Lot 1846-A to Juan Cruz and TCT No. 1783 was cancelled. TCT No. 1784 was issued in the name of Juan Cruz, for Lot 1846-A and TCT No. 1785 was issued in the name of Ang Bansing for the remaining Lots 1846-B, 1846-C, 1846-D, and 1846-E. Later, Ang Bansing sold two subdivision lots of Lot 1846-B, namely: Lot 1846-B-2-C and Lot 1846-B-1 to Vedasto Corcuera for which TCT No. 2551 and TCT No. 2552, respectively, were issued in the name of the said Vedasto Corcuera on August 10, 1946. Thereafter, Lot 1848-A, with an area of 9.6508 hectares, and Lots 1846B-A and 1848-B-2-D, all subdivided portions of Lot 1846-B, were similarly conveyed to Juan Cruz for which TCT No. 2599 and TCT No. 2600, respectively, were issued in the name of Juan Cruz on September 26, 1946. TCT No. 2601 was issued in the name of Ang Bansing for the remainder of the property, including the lot in question. Then, another portion of 1846-B, designated in the subdivision plan as Lot 1848-B-2-B was sold to Juan Cruz for which TCT No. 184 was issued in the latter's name. On November 28, 1946, after these conveyances, there remained in the possession of Ang Bansing under TCT No. 2601, Lot 1846-C,

Id., pp. 54-57, 86.

Id., p. 33.

* Id., p. 90.

the lot in question; Lot 1846-D; and Lot 1846-E. However, TCT No. 2601 was again partially cancelled when Ang Bansing sold Lot 1846-D to Vedasto Corcuera.7

On February 25, 1965, the President of the Philippines issued Proclamation No. 459, transferring ownership of certain parcels of land situated in Sasa, Davao City, to the Mindanao Development Authority, now the Southern Philippines Development Administration, subject to private rights, if any Lot 1846-C, the disputed parcel of land, was among the parcels of land transferred to the Mindanao Development Authority in said proclamation.

8

On March 31, 1969, Atty. Hector L. Bisnar, counsel for the Mindanao Development Authority, wrote Ang Bansing requesting the latter to surrender the Owner's duplicate copy of TCT No. 2601 so that Lot 1846-C could be formally transferred to his client, but Ang Bansing refused." Consequently, on April 11, 1969, the Mindanao Development Authority filed a complaint against Francisco Ang Bansing before the Court of First Instance of Davao City, docketed therein as Civil Case No. 6480, for the reconveyance of the title over Lot 1846-C, alleging, among others, the following:

"9. That the deed of sale, marked as Annex 'A', it was stipulated by the parties that the defendant would work to secure title of his entire tract of land of about 30 hectares defraying the expenses for the same and the expenses for the title of the portion sold by the defendant to Juan Cruz Yap Chuy shall be borned by the latter;

"10. That the defendant as vendor and the one who worked to secure the title of his entire tract of land which included the portion sold by him to Juan Cruz Yap Chuy acted in the capacity of and/ or served as trustee for any and all parties who become successor-in-interest to Juan Cruz Yap Chuy and the defendant was bound and obligated to give, deliver and reconvey to Juan Cruz Yap Chuy and/or his successor-in-interest the title pertaining to the portion of land sold and conveyed by him to Juan Cruz Yap Chuy by virtue of the deed of

Id., pp. 91-92.

'Id., pp. 26-36, 88.

Id., pp. 89-90.

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