Republic of the
SUPREME COURT
SECOND DIVISION
HEIRS OF MAXIMO LABANON, G.R. No. 160711
represented by ALICIA LABANON
CAÑEDO and
the PROVINCIAL Present:
ASSESSOR OF COTABATO,
Petitioners,
QUISUMBING, J., Chairperson,
CARPIO,
CARPIO
MORALES,
- versus - TINGA,
and
VELASCO,
JR., JJ.
HEIRS OF CONSTANCIO Promulgated:
LABANON, represented by
ALBERTO MAKILANG,
Respondents. August 14, 2004
x-----------------------------------------------------------------------------------------x
D E C I S I
O N
VELASCO, JR., J.:
The Case
This Petition for Review on Certiorari
under Rule 45 seeks the recall and nullification of the May 8, 2003 Decision[1] of
the Court of Appeals (CA) in CA-G.R. CV No. 65617 entitled Heirs of Constancio Labanon represented by Alberto Makilang v. Heirs of
Maximo Labanon represented by Alicia Labanon Cañedo and the Provincial Assessor
of Cotabato, which reversed the August 18, 1999 Decision[2] of
the Kidapawan City, Cotabato Regional Trial Court (RTC), Branch 17, in Civil
Case No. 865. Likewise assailed is the
The Facts
The
CA culled the facts this way:
During
the lifetime of Constancio Labanon, prior to the outbreak of WWII, he settled
upon a piece of alienable and disposable public agricultural land situated at
Brgy. Lanao, Kidapawan, Cotabato x x x. Constancio cultivated the said lot and
introduced permanent improvements that still exist up to the present. Being of
very limited educational attainment, he found it difficult to file his public
land application over said lot. Constancio then asked his brother, Maximo
Labanon who was better educated to file the corresponding public land
application under the express agreement that they will divide the said lot as
soon as it would be feasible for them to do so. The offer was accepted by
Maximo. During the time of the application it was Constancio who continued to
cultivate the said lot in order to comply with the cultivation requirement set
forth under Commonwealth Act 141, as amended, on
On
“That
I, MAXIMO LABANON, of legal age, married to Anastacia Sagarino, and a resident
of Kidapawan, Cotabato, for and in consideration of the expenses incurred by my
elder brother CONSTANCIO LABANON also of legal age, Filipino, widower and a
resident of Kidapawan, Cotabato, for the clearing, cultivation and improvements
on the eastern portion xxx Lot No. 1, Blk. 22, Pls-59 xxx which expenses have
been incurred by my said brother xxx before the outbreak of the last world war
xxx I do hereby assign transfer and convey my rights to, interests in and
ownership on the said eastern portion of said Lot No. 1, Block 22, Pls-59 ONE
HUNDRED (100 M) ALONG THE NATIONAL HIGHWAY, (DAVAO-COTABATO ROAD) by TWO
HUNDRED FIFTY METERS (250 M) going inside the land to cover an area of TWO AND
ONE HALF HECTARES (25,000 SQ. M.), more or less, adjoining the school site of
barrio Lanao, Kidapawan, Cotabato, to the said CONSTANCIO LABANON, his heirs
and assigns, can freely occupy for his own use and benefit xxx.
IN
WITNESS WHEREFOF, I have hereunto set my hand this 11th day of
February 1995 at Kidapawan, Cotabato.
(SGD) MAXIMO LABANON
With
my marital consent.
(SGD) ANASTACIA SAGARINO
(Wife)” (p.16,
rollo)
On
“That
I am the same and identical person who is a homestead applicant (HA-224742,
E-128802) of a tract of land which is covered by Homestead Patent No. 67512
dated June 6, 1941, known as Lot No. 1, Block 22, Pls-59, situated in [B]arrio
Lanao, Municipality of Kidapawan, Province of Cotabato, Philippines, and
containing an area of 5.0000 hectares, more or less;
That
I am the same and identical person who executed a deed of ASSIGNMENT OF RIGHTS
AND OWNERSHIP in favor of my brother Constancio Labanon, now deceased, now for
his heirs, for the eastern half portion of the land above described, and which
deed was duly notarized by notary public Florentino P. Kintanar on February 11,
1955 at Kidapawan, Cotabato and entered in his Notarial Register as Doc. No.
20, Page No. 49, Book No. V, Series of 1955; and
That
in order that I and the Heirs of Constancio Labanon will exercise our
respective rights and ownership over the aforementioned lot, and to give force
and effect to said deed of assignment, I hereby, by these presents, request the
Honorable Director of Lands and the Land Title Commission to issue a separate
title in my favor covering the western half portion of the aforementioned lot
and to the Heirs of Constancio Labanon a title for the eastern half portion
thereof.
IN
WITNESS THEREOF, I have hereunto set my hand this 25th day of April,
1962, at Pikit,
After
the death of Constancio Labanon, his heirs executed an [e]xtra-judicial
settlement of estate with simultaneous sale over the aforesaid eastern portion
of the lot in favor of Alberto Makilang, the husband of Visitacion Labanon, one
of the children of Constancio. Subsequently, the parcel of land was declared
for taxation purposes in the name of Alberto under TD No. 11593. However, in
March 1991, the defendants heirs of Maximo Labanon namely, Alicia L. Caniedo,
Leopoldo Labanon, Roberto Nieto and Pancho Labanon, caused to be cancelled from
the records of the defendant Provincial Assessor of Cotabato the aforesaid TD
No. 11593 and the latter, without first verifying the legality of the basis for
said cancellation, did cancel the same. x x x Further, after discovering that
the defendant-heirs of Maximo Labanon were taking steps to deprive the heirs of
Constancio Labanon of their ownership over the eastern portion of said lot, the
latter, thru Alberto Makilang, demanded the owner’s copy of the certificate of
title covering the aforesaid Lot to be surrendered to the Register of Deeds of
Cotabato so that the ownership of the heirs of Constancio may be fully effected
but the defendants refused and still continue to refuse to honor the trust
agreement entered into by the deceased brothers. x x x[4]
Thus,
on
Wherefore,
prescinding from the foregoing facts and considerations the Court finds and so
holds that the [defendant-heirs] of Maximo Labanon represented by Alicia
Labanon Caniedo have proved by preponderance of evidence that they are entitled
to the reliefs set forth in their answer and consequently judgment is hereby
rendered as follows:
1. Ordering the dismissal of the complaint
against the Heirs of Maximo Labanon represented by Alicia Labanon Caniedo for
lack of merit;
2. Ordering the dismissal of the case
against the Provincial Assessor. The claim of the plaintiff is untenable,
because the duties of the Provincial Assessor are ministerial. Moreover, the
presumption of regularity in the performance of his duty is in his favor;
3. Ordering the plaintiff to pay the
defendants the amount of P20,000.00 as exemplary damages, P10,000.00 for
Attorney’s Fees, P500.00 per appearance in Court; and
4. To pay the costs of this suit.
IT
IS SO ORDERED.[6]
Aggrieved,
respondents elevated the adverse judgment to the CA which issued the assailed
WHEREFORE, the appeal is hereby GRANTED for being meritorious. The
assailed decision of the Regional Trial Court is hereby REVERSED and SET ASIDE
and a new one is hereby entered as follows:
1)
Recognizing
the lawful possession of the plaintiffs-appellants over the eastern portion of the property in dispute;
2)
Declaring
the plaintiffs-appellants as owners of the eastern portion of the property by
reason of lawful possession;
3)
Ordering
the Provincial Assessor to reinstate TD No. 11593 and declaring TD No. 243-A
null and void;
4)
Ordering
the defendants-appellees to pay the plaintiffs-appellants the amount of P20,000
as moral damages, P10,000 for attorney’s fees, P500.00 per appearance in Court
and
5)
To pay
the costs of the suit.
SO ORDERED.
The Issues
Surprised
by the turn of events, petitioners brought this petition before us raising the following issues, to wit:
1. Whether
or not Original Certificate of Title No. 41320 issued on April 10, 1975 in the name of MAXIMO
LABANON be now considered indefeasible
and conclusive; and
2. Whether
or not the Trust Agreement allegedly made by Constancio
Labanon and Maximo Labanon prescribed.[7]
The Court’s Ruling
The
petition must fail.
First Issue
Respondents are not precluded from
challenging the validity of
Original Certificate of Title No.
P-41320
Petitioners argue that respondents
can no longer question Maximo Labanon’s ownership of the land after its
registration under the principle of indefeasibility of a Transfer Certificate
of Title (TCT).
Such
argument is inaccurate.
The
principle of indefeasibility of a TCT is embodied in Section 32 of Presidential
Decree No. (PD) 1529, amending the Land Registration Act, which provides:
Upon the expiration of said period of one year, the decree of registration and the certificate of title issued shall become incontrovertible. Any person aggrieved by such decree of registration in any case may pursue his remedy by action for damages against the applicant or any other persons responsible for the fraud.
Contrary
to petitioners’ interpretation, the aforequoted legal provision does not
totally deprive a party of any remedy to recover the property fraudulently
registered in the name of another.
Section 32 of PD 1529 merely precludes the reopening of the registration
proceedings for titles covered by the Torrens System, but does not foreclose
other remedies for the reconveyance of the property to its rightful owner. As elaborated in Heirs of Clemente Ermac v. Heirs of Vicente Ermac:
While it is true
that Section 32 of PD 1529 provides that the decree of registration becomes
incontrovertible after a year, it does not altogether deprive an aggrieved
party of a remedy in law. The acceptability of the Torrens System would be
impaired, if it is utilized to perpetuate fraud against the real owners.[8]
A
more succinct explanation is found in Vda.
De Recinto v. Inciong, thus:
The mere possession of a certificate of title
under the
Undeniably, respondents are not
precluded from recovering the eastern portion of Original Certificate of Title
(OCT) No. P-14320, with an area subject of the “Assignment of Rights and
Ownership” previously owned by their father, Constancio Labanon. The action for Recovery of Ownership before
the RTC is indeed the appropriate remedy.
Second Issue
The trust agreement between Maximo Labanon and
Constancio Labanon may still be enforced
Former Vice-President and Senator
Arturo Tolentino, a noted civilist, explained the nature and import of a trust:
Trust
is the legal relationship between one person having an equitable ownership in
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.[10]
This legal relationship can be
distinguished from other relationships of a fiduciary character, such as
deposit, guardianship, and agency, in that the trustee has legal title to the
property.[11] In the case at bench, this is exactly the
relationship established between the parties.
Trusts are classified under the Civil
Code as either express or implied. Such classification determines the
prescriptive period for enforcing such trust.
Article
1444 of the New Civil Code on express trust provides that “[n]o particular words
are required for the creation of an express trust, it being sufficient that a
trust is clearly intended.”
Civil law expert Tolentino further
elucidated on the express trust, thus:
No
particular form of words or conduct is necessary for the manifestation of
intention to create a trust. It is possible to create a trust without using the
word “trust” or “trustee”. Conversely, the mere fact that these words are used
does not necessarily indicate an intention to create a trust. The question in
each case is whether the trustor manifested an intention to create the kind of
relationship which to lawyers is known as trust. It is immaterial whether or
not he knows that the relationship which he intends to create is called a
trust, and whether or not he knows the precise characteristics of the
relationship which is called a trust.[12]
Correlatively, we ruled in Estate of Edward Miller Grimm v. Estate of
Charles Parsons and Patrick C. Parsons, that:
An express trust is created by the direct
and positive acts of the parties, by some writing or deed or by words
evidencing an intention to create a trust;
the use of the word trust is not
required or essential to its constitution, it being sufficient that a trust is
clearly intended.[13]
In the instant case, such intention
to institute an express trust between Maximo Labanon as trustee and Constancio
Labanon as trustor was contained in not just one but two written documents, the
Assignment of Rights and Ownership as well as Maximo Labanon’s April 25, 1962 Sworn
Statement. In both documents, Maximo Labanon recognized Constancio Labanon’s
ownership and possession over the eastern portion of the property covered by
OCT No. P-14320, even as he recognized himself as the applicant for the
Homestead Patent over the land. Thus, Maximo Labanon maintained the title over
the property while acknowledging the true ownership of Constancio Labanon over
the eastern portion of the land. The
existence of an express trust cannot be doubted nor disputed.
On the issue of prescription, we had
the opportunity to rule in Bueno v. Reyes
that unrepudiated written express
trusts are imprescriptible:
While there are some decisions which hold that an action upon a trust is imprescriptible, without distinguishing between express and implied trusts, the better rule, as laid down by this Court in other decisions, is that prescription does supervene where the trust is merely an implied one. The reason has been expressed by Justice J.B.L. Reyes in J.M. Tuason and Co., Inc. vs. Magdangal, 4 SCRA 84, 88, as follows:
Under Section 40 of the old Code of Civil Procedure, all actions for recovery of real property prescribed in 10 years, excepting only actions based on continuing or subsisting trusts that were considered by section 38 as imprescriptible. As held in the case of Diaz v. Gorricho, L-11229, March 29, 1958, however, the continuing or subsisting trusts contemplated in section 38 of the Code of Civil Procedure referred only to express unrepudiated trusts, and did not include constructive trusts (that are imposed by law) where no fiduciary relation exists and the trustee does not recognize the trust at all.[14]
This principle was amplified in Escay v. Court of Appeals this way: “Express trusts prescribe 10 years from the
repudiation of the trust (Manuel Diaz, et al. vs. Carmen Gorricho et al., 54
0.G. p. 8429, Sec. 40, Code of Civil Procedure).”[15]
In the more recent case of Secuya v. De Selma, we again ruled that
the prescriptive period for the enforcement of an express trust of ten (10)
years starts upon the repudiation of the trust by the trustee.[16]
In the case at bar, Maximo Labanon
never repudiated the express trust instituted between him and Constancio
Labanon. And after Maximo Labanon’s death, the trust could no longer be
renounced; thus, respondents’ right to enforce the trust agreement can no
longer be restricted nor prejudiced by prescription.
It must be noted that the Assignment
of Rights and Ownership and Maximo Labanon’s Sworn Statement were executed
after the Homestead Patent was applied for and eventually granted with the
issuance of Homestead Patent No. 67512 on
In addition, petitioners can no
longer question the validity of the positive declaration of Maximo Labanon in
the Assignment of Rights and Ownership in favor of the late Constancio Labanon,
as the agreement was not impugned during the former’s lifetime and the
recognition of his brother’s rights over the eastern portion of the lot was
further affirmed and confirmed in the subsequent April 25, 1962 Sworn
Statement.
Section
31, Rule 130 of the Rules of Court is the repository of the settled precept
that “[w]here one derives title to property from another, the act, declaration,
or omission of the latter, while holding the title, in relation to the
property, is evidence against the former.” Thus, petitioners have accepted the
declaration made by their predecessor-in-interest, Maximo Labanon, that the
eastern portion of the land covered by OCT No. P-14320 is owned and possessed
by and rightfully belongs to Constancio Labanon and the latter’s heirs.
Petitioners cannot now feign ignorance of such acknowledgment by their father, Maximo.
Lastly, the heirs of Maximo Labanon
are bound to the stipulations embodied in the Assignment of Rights and Ownership
pursuant to Article 1371 of the Civil Code that contracts take effect between
the parties, assigns, and heirs.
Petitioners as heirs of Maximo cannot
disarrow the commitment made by their father with respect to the subject
property since they were merely subrogated to the rights and obligations of their
predecessor-in-interest. They simply
stepped into the shoes of their predecessor and must therefore recognize the
rights of the heirs of Constancio over the eastern portion of the lot. As the
old adage goes, the spring cannot rise higher than its source.
WHEREFORE, the
petition is DENIED. The
May 8, 2003 CA Decision and October 13, 2003 Resolution in CA-G.R. CV No. 65617
are AFFIRMED with the modifications
that the Kidapawan City, Cotabato RTC, Branch 17 is directed to have OCT No.
P-14320 segregated and subdivided by the Land Management Bureau into two (2)
lots based on the terms of the
Costs
against petitioners.
SO ORDERED.
PRESBITERO J. VELASCO, JR.
Associate Justice
WE CONCUR:
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
ANTONIO T.
CARPIO CONCHITA
CARPIO MORALES
Associate Justice Associate
Justice
DANTE O. TINGA
Associate Justice
A T T E S T A T I O N
I attest that the conclusions in the
above Decision had been reached in consultation before the case was assigned to
the writer of the opinion of the Court’s Division.
LEONARDO A. QUISUMBING
Associate Justice
Chairperson
C E R T I F
I C A T I O N
Pursuant to Section 13, Article VIII of the
Constitution, and the Division Chairperson’s Attestation, I certify that the
conclusions in the above Decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Court’s Division.
REYNATO S.
PUNO
Chief Justice
[1] Rollo, pp. 40-49. The Decision was penned by Associate Justice Eloy R. Bello, Jr., with Justices Cancio C. Garcia (Chairman) and Mariano C. Del Castillo concurring.
[2]
[3]
[4]
[5]
[6] Supra note 2, at 39.
[7] Rollo, p. 15.
[8] G.R. No. 149679, May 30, 2003, 403 SCRA 291, 297; citations omitted.
[9] No. L-26083, May 31, 1977, 77 SCRA 196, 201.
[10]
IV A. Tolentino, Commentaries and
Jurisprudence on the Civil Code of the
[11]
[12]
[13] G.R. No. 159810, October 9, 2006, 504 SCRA 67, 81.
[14] No. L-22587, April 28, 1969, 27 SCRA 1179, 1183; citations omitted.
[15] No. L-37504, December 18, 1974, 61 SCRA 369, 388; citation omitted.
[16] G.R. No. 136021, February 22, 2000, 326 SCRA 244, 254.