FIRST
DIVISION
ALEJANDRO B.
TY, G.R. No. 165696
Petitioner,
Present:
PUNO,
C.J., Chairperson,
CARPIO,
-
versus - AZCUNA,
LEONARDO-DE
CASTRO, JJ.
SYLVIA S. TY, in her capacity Promulgated:
as
Administratrix of the Intestate
Estate of Alexander Ty, April 30, 2008
Respondent.
X
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X
DECISION
AZCUNA, J.:
This is a petition for review on certiorari under Rule
45 of the Rules of Court against the Decision[1] of
the Court of Appeals (CA) in CA-G.R. No. 66053 dated
The facts are
stated in the CA Decision:
On
Meanwhile, on
On
1. EDSA Property – a parcel of land with an area of 1,728 square meters situated in EDSA, Greenhills, Mandaluyong, Metro Manila, registered in the name of Alexander Ty when he was still single, and covered by TCT No. 0006585;
2. Meridien Condominium – A residential condominium with an area of 167.5 square meters situated in 29 Annapolis Street, Greenhills, Mandaluyong, Metro Manila, registered in the name of the spouses Alexander Ty and Sylvia Ty, and covered by Condominium Certificate of Title No. 3395;
3. Wack-Wack Property – A residential land with an area of 1,584 square meters situated in Notre Dame, Wack-Wack, Mandaluyong, Metro Manila, registered in the name of the spouses Alexander Ty and Sylvia Ty, and covered by TCT No. 62670.
On P4,714,560.02
assessed by the BIR.
Apparently, this action did not sit well
with her father-in-law, the plaintiff-appellee, for on
Forthwith, on
To the aforementioned opposition, plaintiff filed a reply, reiterating the arguments set forth in his complaint, and denying that his cause of action is barred by laches.
In an order dated
As to the complaint for recovery of properties,
it is asserted by plaintiff Alejandro Ty that he owns the EDSA property, as
well as the Meridien Condominium, and the Wack-Wack property, which were
included in the inventory of the estate of Alexander Ty. Plaintiff alleged
that on
As to the two other properties, plaintiff averred that he bought the Meridien Condominium sometime in 1985 and the Wack-Wack property sometime in 1987; that titles to the aforementioned properties were also placed in the name of his son, Alexander Ty, who was also to hold these properties in trust for his brothers and sisters. Plaintiff asserted that at [the] time the subject properties were purchased, Alexander Ty and Sylvia Ty were earning minimal income, and were thus financially incapable of purchasing said properties. To bolster his claim, plaintiff presented the income tax returns of Alexander from 1980-1984, and the profit and loss statement of defendant’s Joji San General Merchandising from 1981-1984.
Plaintiff added that defendant acted in bad faith in including the subject properties in the inventory of Alexander Ty’s estate, for she was well aware that Alexander was simply holding the said properties in trust for his siblings.
In her answer, defendant denied that the subject properties were held in trust by Alexander Ty for his siblings. She contended that, contrary to plaintiff’s allegations, Alexander purchased the EDSA property with his own money; that Alexander was financially capable of purchasing the EDSA property as he had been managing the family corporations ever since he was 18 years old, aside from the fact that he was personally into the business of importing luxury cars. As to the Meridien Condominium and Wack-Wack property, defendant likewise argued that she and Alexander Ty, having been engaged in various profitable business endeavors, they had the financial capacity to acquire said properties.
By way of affirmative defenses, defendant asserted that the alleged verbal trust agreement over the subject properties between the plaintiff and Alexander Ty is not enforceable under the Statute of Frauds; that plaintiff is barred from proving the alleged verbal trust under the Dead Man’s Statute; that the claim is also barred by laches; that defendant’s title over the subject properties cannot be the subject of a collateral attack; and that plaintiff and counsel are engaged in forum-shopping.
In her counterclaim, defendant prayed that plaintiff be sentenced to pay attorney’s fees and costs of litigation.
On
During the hearing, plaintiff presented in
evidence the petition filed by defendant in Special Proceedings No. Q-88-648;
the income tax returns and confirmation receipts of Alexander Ty from
1980-1984; the profit and loss statement of defendant’s Joji San General
Merchandising from 1981-1984; the deed of sale of the EDSA property dated March
17, 1976; the TCT’s and CCT of the subject properties; petty cash vouchers,
official receipts and checks to show the plaintiff paid for the security and
renovation expenses of both the Meridien Condominium and the Wack-Wack
property; checks issued by plaintiff to defendant between June 1988 – November
1991 to show that plaintiff provided financial support to defendant in the
amount of P51,000.00; and the articles of incorporations of various
corporations, to prove that he, plaintiff, had put up several corporations.
Defendant for her presented in evidence
the petition dated
Furthermore, the following findings of facts of the court a quo,
the
We adopt the findings of the trial
court in respect to the testimonies of the witnesses who testified in this
case, thus:
“The gist of the testimony of defendant as adverse witness for the plaintiff:
“Defendant and Alexander met in
“The gist of the testimony of Conchita Sarmiento:
“In 1966, Conchita Sarmiento was employed in the Union
Chemicals as secretary of plaintiff who was the president. Sarmiento prepared
the checks for the school expenses and allowances of plaintiff’s children and
their spouses. Sarmiento is familiar with the Wack-Wack
property. Plaintiff bought the Wack-Wack property and paid the architect
and spent for the materials and labor in connection with the construction of
the Wack-Wack property (Exhs. ‘M’ to ‘Z’ inclusive; Exhs. ‘AA’ to ‘ZZ,’
inclusive; Exhs. ‘AAA’ to ‘ZZZ,’ inclusive; Exhs. ‘AAAA’ to ‘FFFF,’
inclusive). Plaintiff entrusted to Alexander the supervision of the construction
of the Wack-Wack property, so that Exhibit ‘M’ shows that the payment was
received from Alexander. Plaintiff visited the Wack-Wack property several
times and even pointed the room which he intended to occupy. Sarmiento was
told by plaintiff that it was very expensive to maintain the house. The
documents, referring to the numerous exhibits, were in the possession of
plaintiff because they were forwarded to him for payment. Sarmiento knows
the residential condominium unit because in 1987 plaintiff purchased the
materials and equipments for its renovation, as shown by Exhs. ‘GGGG’ to ‘QQQQ’
inclusive. Plaintiff supported defendant after the death of Alexander, as
shown by Exhs. ‘RRRR’ to ‘TTTT’ inclusive. Sarmiento was plaintiff’s
secretary and assisted him in his official and personal affairs. Sarmiento
knew that Alexander was receiving a monthly allowance in the amount of P5,000.00
from Alpha.
“The gist of the testimony of the plaintiff:
Plaintiff is 77 years old and has been
engaged in business for about 50 years. Plaintiff established several
trading companies and manufacturing firms. The articles of incorporation
of the companies are shown in Exhs. ‘UUUUU’ (Manila Paper Mills, Inc.);
‘UUUUU-1’ (Union Chemicals Inc.); ‘UUUUU-2’ (Starlight Industrial Company
Inc.); ‘UUUUU-3’ (Hitachi Union, Inc.); ‘UUUUU-4’ (Philippine Crystal
Manufacturing Corp.). Alexander completed his elementary education in 1969
at the age of 15 years and finished high school education in
1973. Alexander left in 1973 for the P 51, 000.00
(Exhs. ‘RRRR’ to ‘TTTTT,” inclusive) P 50,000.00 for defendant and P1,000.00
for the yaya. The Wack-Wack property cost about P5.5 million.
“The gist of the testimony of Robert Bassig:
“He is 73 years old and a real estate
broker. Bassig acted as broker in the sale of the EDSA property from
Purificacion Yujuico to plaintiff. In the Deed of
“The gist of the testimony of Tom Adarne as witness for defendant:
Adarne is 45 years old and an
architect. He was a friend of Alexander. Adarne was engaged by
defendant for the preparation of the plans of the Wack-Wack property. The
contractor who won the bidding was Home Construction, Inc. The Agreement
(Exh. ‘26’) was entered into by defendant and Home Construction Inc. The
amount of P955,555.00 (Exh. ’26-A’) was for the initial scope of the
work. There were several letter-proposals made by Home Construction (Exhs.
‘27-34-A,’ inclusive). There were receipts issued by Home Construction
Inc. (Exhs. ’35,’ ‘36’ and ‘37’). The proposal were accepted and
performed. The renovation started in 1992 and was finished in 1993 or
early 1994.
“The gist of the testimony of Rosanna Regalado:
“Regalado is 43 years old and a real
estate broker. Regalado is a close friend of defendant. Regalado
acted as broker in the sale of the Wack-Wack property between defendant and
Alexander and the owner. The sale Agreement (Exh. ‘38’) is dated P5.5
million in Far East Bank and Trust Company manager’s checks. The four (4)
checks mentioned in paragraph 1 of the Agreement were issued by Alexander but
she is not sure because it was long time ago.
“The gist of the testimony of Sylvia Ty:
“She is 40 years old, businesswoman and residing at 675 Notre
Dame, P50,000.00. the price
for one (1) unit was provided by defendant’s mother. The other three (3)
units came from the house and lot at P3.5
million manager’s check was purchased by Alexander. The sale Agreement was
signed by Alexander and defendant (Exhs. ’38-A’ and ‘38-B’). After the
purchase, defendant and Alexander continued the construction of the
property. After Alexander’s death, defendant continued the
construction. The first architect that defendant and Alexander engaged was
Gerry Contreras (Exhs. ’42,’ ‘42-A’ and ‘42-A-1’ to ‘42-A-7’). The
post-dated checks issued by Alexander were changed with the checks of
plaintiff. After the death of Alexander, defendant engaged the services of
Architect Tom Adarne. Home Construction, Inc. was contracted to continue
the renovation. Defendant and Alexander made payments to Contreras from
January to May 1998 (Exhs. ’43,’ ‘43-A’ to ‘43-H,’ inclusive). A general
contractor by the name of Nogoy was issued some receipts (Exhs. ’43-J’ and
‘43-K’). a receipt was also issued by Taniog (Exh. ‘43-L’). the
payments were made by defendant and Alexander from the latter’s
accounts. The Agreement with Home Construction Inc. (Exhs. ‘26’) shows
defendant’s signature (Exh. ‘26-A’). the additional works were covered by
the progress billings (Exhs. ‘27’ to ‘34-A’). Defendant paid them from her
account. The total contract amount was P5,049,283.04. The total
expenses, including the furnishings, etc. reached the amount of P8 to 10
million and were paid from defendant’s and Alexander’s funds. After the
death of Alexander, plaintiff made payments for the renovation of the house
(Exh. ‘M’) which plaintiff considered as advantages but plaintiff did not make
any claim for reimbursement from the estate of Alexander. Defendant’s
relationship with plaintiff became strained when he asked her to waive her
right over the Union Ajinomoto shares. Alexander was a friend of Danding
Cojuangco and was able to import luxury cars. Alexander made a written
offer to purchase the Wack-Wack property. Alexander graduated from the P51,000.00 per month from 1988-1990. Defendant did not offer to
reimburse plaintiff the advances he made on the renovation of the Wack-Wack
property because their relationship became strained over the Ajinomoto
shares. Defendant could not produce the billings which were indicated in the
post-dated checks paid to Architect Contreras. After the birth of her
child, defendant engaged in the boutique business. Defendant could not
recall how much she acquired the boutique (for). In 1983 or 1984 defendant
started to earn P50,000.00 a month. The properties in the
“The gist of the testimony of Atty. Mario Ongkiko:
“Atty. Ongkiko prepared the Deed of Sale of the EDSA property. There was only one Deed of Sale regarding the said property. The plaintiff was not the person introduced to him by Yujuico as the buyer.[3]
On
WHEREFORE, judgment is hereby rendered:
1. Declaring plaintiff as the true and lawful owner of the subject properties, as follows:
A. A parcel of land with an area of 1728 square meters, situated
along EDSA Greenhills,
B. A residential land with an area of 1584 square meters, together with the improvements thereon, situated in Notre Dame, Wack-Wack Village, Mandaluyong City, covered by TCT No. 62670.
C. A residential condominium unit with an area of 167.5 square meters, situated in 29 Annapolis St., Greenhills, Mandaluyong City, covered by Condominium Certificate Title No. 3395.
2. Ordering
the defendant to transfer or convey the subject properties in favor of
plaintiff and the Register of Deeds for
3. Ordering
the defendant to pay plaintiff the amount of P100,000.00, as moral
damages and P200,000.00, as attorney’s fees plus the cost of the suit.
SO ORDERED.[4]
Respondent herein, Sylvia S. Ty, appealed
from the RTC Decision to the CA, assigning the following as errors:
I.
THE TRIAL COURT ERRED IN HOLDING THAT APPELLEE PURCHASED THE EDSA PROPERTY BUT PLACED TITLE THERETO IN THE NAME OF ALEXANDER T. TY, SO THAT AN EXPRESS TRUST WAS CREATED BETWEEN APPELLEE, AS TRUSTOR AND ALEXANDER AS TRUSTEE IN FAVOR OF THE LATTER’S SIBLINGS, AS BENEFICIARIES EVEN WITHOUT ANY WRITING THEREOF; ALTERNATIVELY, THE TRIAL COURT ERRED IN ANY CASE IN HOLDING THAT AN IMPLIED TRUST EXISTED BETWEEN APPELLEE AND ALEXANDER TY IN FAVOR OF APPELLEE UNDER THE SAME CIRCUMSTANCES.
II.
THE TRIAL COURT ERRED IN HOLDING THAT APPELLEE PURCHASED THE WACK-WACK AND MERIDIEN CONDOMINIUM PROPERTIES BUT PLACED ITS TITLES THERETO IN THE NAMES OF SPOUSES ALEXANDER AND APPELLANT BECAUSE HE WAS FINANCIALLY CAPABLE OF PAYING FOR THE PROPERTIES WHILE ALEXANDER OR HIS WIFE, APPELLANT SYLVIA S. TY, WERE INCAPABLE. HENCE, A RESULTING TRUST WAS CREATED BETWEEN APPELLEE AND HIS SON, ALEXANDER, WITH THE FORMER, AS OWNER-TRUSTOR AND BENEFICIARY AND THE LATTER AS TRUSTEE CONCERNING THE PROPERTIES.
III.
THE TRIAL COURT ERRED IN AWARDING MORAL
DAMAGES OF P100,000 AND ATTORNEY’S FEES OF P200,000 IN FAVOR OF
APPELLEE AND AGAINST DEFENDANT-APPELLANT IN HER CAPACITY AS ADMINISTRATRIX OF
THE INTESTATE ESTATE OF ALEXANDER TY, INSTEAD OF AWARDING APPELLANT IN HER
COUNTERCLAIM ATTORNEY’S FEES AND EXPENSES OF LITIGATION INCURRED BY HER IN
DEFENDING HER HUSBAND’S ESTATE AGAINST THE UNJUST SUIT OF HER FATHER-IN-LAW,
HEREIN APPELLEE, WHO DISCRIMINATED AGAINST HIS GRAND DAUGHTER KRIZIA KATRINA ON
ACCOUNT OF HER SEX.
The arguments in the respective briefs of appellant and appellee are
summarized by the CA Decision, as well as other preliminary matters raised and
tackled, thus:
In her Brief, defendant-appellant pointed out that, based on
plaintiff-appellee’s testimony, he actually intended to establish an express
trust; but that the trial court instead found that an implied trust existed
with respect to the acquisition of the subject properties, citing Art. 1448 of
the Civil Code of the
It is defendant-appellant’s contention that the trial court erred: In applying Art. 1448 on implied trust, as plaintiff-appellee did not present a shred of evidence to prove that the money used to acquire said properties came from him; and in holding that both she and her late husband were financially incapable of purchasing said properties. On the contrary, defendant-appellant claimed that she was able to show that she and her late husband had the financial capacity to purchase said properties.
Defendant-appellant likewise questioned the admission of the testimony of plaintiff-appellee, citing the Dead Man’s Statute; she also questioned the admission of her late husband’s income tax returns, citing Section 71 of the NIRC and the case of Vera v. Cusi, Jr.
On July 10, 2001, plaintiff-appellee filed his appellee’s Brief, whereunder he argued: That the trial court did not err in finding that the subject properties are owned by him; that the said properties were merely registered in Alexander’s name, in trust for his siblings, as it was plaintiff-appellee who actually purchased the subject properties he having the financial capacity to acquire the subject properties, while Alexander and defendant-appellant had no financial capacity to do so; that defendant-appellant should be sentenced to pay him moral damages for the mental anguish, serious anxiety, wounded feelings, moral shock and similar injury by him suffered, on account of defendant-appellant’s wrongful acts; and that defendant appellant should also pay for attorney’s fees and litigation expenses by him incurred in litigating this case.
In a nutshell, it is plaintiff-appellee’s
thesis that in 1973, when he accompanied his son, Alexander, to
On
Plaintiff-appellee then filed a comment on the motion to resolve incident, to which defendant-appellant tendered a reply. Not to be outdone, the former filed a rejoinder.
Thus, on
In support of her motion to admit additional evidence, defendant-appellant presented receipts of payment of real estate taxes for the years 1987 to 2004, obviously for the purpose of proving that she and her late husband in their own right were financially capable of acquiring the contested properties. Plaintiff-appellee however did not present any countervailing evidence.
Per resolution of
Defendant-appellant in her memorandum prayed that the additional evidence be considered in resolving the appeal in the interest of truth and substantial justice. Plaintiff-appellee, on the other hand, in his memorandum, argued that the additional evidence presented by the defendant-appellant is forgotten evidence, which can lo longer be admitted, much less considered, in this appeal. Thereafter, the case was submitted for decision.
Before taking up the main issue, we deem it expedient to address some collateral issues, which the parties had raised, to wit: (a) the admissibility of the additional evidence presented to this Court, (b) the admissibility of plaintiff’s testimony, (c) the admissibility of the income tax return, and (d) laches.
On the propriety of the reception of additional evidence, this Court falls backs (sic) upon the holding of the High Court in Alegre v. Reyes, 161 SCRA 226 (1961) to the effect that even as there is no specific provision in the Rules of Court governing motions to reopen a civil case for the reception of additional evidence after the case has been submitted for decision, but before judgment is actually rendered, nevertheless such reopening is controlled by no other principle than that of the paramount interest of justice, and rests entirely upon the sound judicial discretion of the court. At any rate, this Court rules that the tax declaration receipts for the EDSA property for the years 1987-1997, and 1999; for the Wack-Wack property for the years 1986-1987, 1990-1999; and for the Meridien Condominium for the years 1993-1998 cannot be admitted as they are deemed forgotten evidence. Indeed, these pieces of evidence should have been presented during the hearing before the trial court.
However, this Court in the interest of truth and justice must hold, as it hereby holds, that the tax declaration receipts for the EDSA property for the years 2000-2004; the Wack-Wack property for the years 2000-2004; and the Meridien Condominium for the years 2000-2001 may be admitted to show that to this date, it is the defendant-appellant, acting as an administratrix, who has been paying the real estate taxes on the aforestated properties.
As regards the admissibility of plaintiff-appellee’s testimony, this Court agrees with the trial court that:
“Defendant’s argument to the effect that plaintiff’s testimony proving that the deceased Alexander Ty was financially dependent on him is inadmissible in evidence because he is barred by the Dead Man’s Statute (Rule 130, Sec. 20, Rules of Court) for making such testimony, is untenable. A reading of pages 10 to 45 of the TSN, taken on November 16, 1998, which contain the direct-examination testimony of plaintiff, and pages 27, 28, 30, 34, 35, 37, 39, 40 of the TSN, taken on January 15, 1999; page 6 of the TSN taken on December 11, 1998, pages 8, 10, 11, 12, 14, 23 24 of TSN, taken on taken on February 19, 1999; and pages 4,5,6,7,8,11,25 and 27 of the TSN taken on March 22, 1999, will show that defendant’s lawyer did not object to the plaintiff as witness against defendant, and that plaintiff was exhaustively cross-examined by defendant’s counsel regarding the questioned testimony, hence, the same is not covered by the Dead Man’s Statute (Marella v. Reyes, 12 Phil. 1; Abrenica v. Gonda and De Gracia, 34 Phil. 739; Tongco v. Vianzon, 50 Phil. 698).
A perusal of the transcript of stenographic notes will show that counsel for defendant-appellant was not able to object during the testimony of plaintiff-appellee. The only time that counsel for defendant-appellant interposed his objection was during the examination of Rosemarie Ty, a witness (not a party) to this case. Thus the Dead Man’s Statute cannot apply.
With regard to the income tax returns filed by the late Alexander Ty, this Court holds that the same are admissible in evidence. Neither Section 71 of the NIRC nor the case of Vera v. Cusi applies in this case. The income tax returns were neither obtained nor copied from the Bureau of Internal Revenue, nor produced in court pursuant to a court order; rather these were produced by plaintiff-appellee from his own files, as he was the one who kept custody of the said income tax returns. Hence, the trial court did not err in admitting the income tax returns as evidence.
Anent the issue of laches, this Court finds that the plaintiff-appellee is not guilty of laches. There is laches when: (1) the conduct of the defendant or one under whom he claims, gave rise to the situation complained of; (2) there was delay in asserting a right after knowledge defendant’s conduct and after an opportunity to sue; (3) defendant had no knowledge or notice that the complainant would assert his right; and (4) there is injury or prejudice to the defendant in the event relief is accorded to the complainant. These conditions do not obtain here.
In this case, there was no delay on the part of plaintiff-appellee in instituting the complaint for recovery of real properties. The case was files four years after Alexander’s death; two years after the inventory of assets of Alexander’s estate was submitted to the intestate court; and one month after defendant-appellant filed a motion to sell or mortgage the real estate properties. Clearly, such length of time was not unreasonable.[5]
The CA then turned to “the critical, crucial and pivotal issue of whether
a trust, express or implied, was established by the plaintiff-appellee in favor
of his late son and name-sake Alexander Ty.”
The CA proceeded to distinguish express from implied trust, then
found that no express trust can be involved here since nothing in writing was
presented to prove it and the case involves real property. It then stated
that it disagrees with the court a quo’s application of Art. 1448 of the
Civil Code on implied trust, the so-called purchase money resulting trust,
stating that the very Article provides the exception that obtains when the
person to whom the title is conveyed is the child, legitimate or illegitimate,
of the one paying the price of the sale, in which case no trust is implied by
law, it being disputably presumed that there is a gift in favor of the
child.
The CA therefore reasoned that even assuming that
plaintiff-appellee paid at least part of the price of the EDSA property, the
law still presumes that the conveyance was a discretion (a gift of devise) in
favor of Alexander.
As to plaintiff-appellee’s argument that there was no donation as
shown by his exercise of dominion over the property, the CA held that no
credible evidence was presented to substantiate the claim.
Regarding the residence condominium and the Wack-Wack property,
the CA stated that it did not agree either with the findings of the trial court
that an implied trust was created over these properties.
The CA went over the testimonies of plaintiff-appellee and the
witness Conchita Sarmiento presented to show that spouses Alexander and Sylvia
S. Ty were financially dependent of plaintiff-appellee and did not have the
financial means or wherewithals to purchase these properties. It stated:
Consider
this testimony of plaintiff-appellee:
Q During the time that Alex was staying with you, did you ever come to know that Alexander and his wife did go to the States?
A Yes, sir. But I do not know the exact date. But
they told me they want to go to
Q Was that the only time that Alexander went to the States?
A Only that time, sir. Previously, he did not tell
me. That last he come (sic) to me and tell [sic] me
that he will go to
Q Would you say for the past five years before his death Alex and his wife were going to the States at least once a year?
A I cannot say exactly. They just come to me and say that I [sic] will go to “bakasyon.” They are already grown people. They don’t have to tell me where they want to go.
Q You are saying that Alexander did not ask you for assistance whenever he goes to the States?
A Sometimes Yes.
Q In what form?
A I gave him peso, sir.
Q For what purpose?
A Pocket money, sir.
There is no evidence at all that it was plaintiff-appellee who spent for the cancer treatment abroad of his son. Nor is there evidence that he paid for the trips abroad of Alexander and the defendant-appellant. Admittedly, he only gave his son Alexander pocket money once in a while. Simply put, Alexander was not financially dependent upon the plaintiff-appellee, given that Alexander could afford the costs of his cancer treatment abroad, this on top of the trips he made to the United States at least once a year for five successive years without the support of his father.
The fact that Alexander stayed with his father, the plaintiff-appellee in this case, even after he married Sylvia and begot Krizia, does not at all prove that Alexander was dependent on plaintiff-appellee. Neither does it necessarily mean that it was plaintiff-appellee who was supporting Alexander’s family. If anything, plaintiff-appellee in his testimony admitted that Alexander and his family went to live with him in observance of Chinese traditions.
In addition, the income tax returns of Alexander from 1980-1984, and the profit and loss statement of defendant-appellant’s Joji San General Merchandising from 1981-1984, are not enough to prove that the spouses were not financially capable of purchasing the said properties. Reason: These did not include passive income earned by these two, such as interests on bank deposits, royalties, cash dividends, and earnings from stock trading as well as income from abroad as was pointed out by the defendant-appellant. More importantly, the said documents only covered the years 1980-1984. The income of the spouses from 1985 to 1987 was not shown. Hence, it is entirely possible that at the time the properties in question were purchased, or acquired, Alexander and defendant-appellant had sufficient funds, considering that Alexander worked in various capacities in the family corporations, and his own business enterprises, while defendant-appellant had thriving businesses of her own, from which she acquired commercial properties.
And this is not even to say that plaintiff-appellee is this case failed to adduce conclusive, incontrovertible proof that the money use to purchase the two properties really came from him; or that he paid for the price of the two properties in order to have the beneficial interest or estate in the said properties.
A critical examination of the testimony of plaintiff-appellee’s witness, Conchita Sarmiento, must also show that this witness did not have actual knowledge as to who actually purchased the Wack-Wack property and the Meridien Condominium. Her testimony that plaintiff-appellee visited the Wack-Wack property and paid for the costs of the construction of the improvements over the said property, in the very nature of things, does not prove that it was the plaintiff-appellee who in fact purchased the Wack-Wack property.[6]
On the other hand, the CA
found defendant-appellant’s evidence convincing:
In contrast, Rosana Regalado had actual knowledge of the transaction she testified to, considering that she was the real estate broker who negotiated the sale of the Wack-Wack property between its previous owner Drago Daic and the spouses Alexander and Sylvia Ty. In her testimony, she confirmed that the checks, which were issued to pay for the purchase price of the Wack-Wack property, were signed and issued by Alexander, thereby corroborating the testimony of defendant-appellant on this point.
Significantly, during the trial, Conchita Sarmiento identified some receipts wherein the payor was the late Alexander Ty. Apparently, prior to the death of Alexander, it was Alexander himself who was paying for the construction of the Wack-Wack property; and that the only time plaintiff-appellee paid for the costs of the construction was when Alexander died.
Quite compelling is the testimony of defendant-appellant in this respect:
Q And after the death and burial of your husband, will you tell this Honorable Court what happened to the construction of this residence in Wack-Wack?
A Well, of course, during the period I was mourning and I was reorganizing myself and my life, so I was not mainly focused on the construction, so it took a couple of months before I realized that the post-dated checks issued by my husband was changed through checks by my father-in-law Mr. Alejandro Ty.
Q And did you had [sic] any conversation with Mr. Alejandro Ty regarding as to why he did that?
A Yes, sir, that was the beginning of our misunderstanding, so I decided to hire a lawyer and that is Atty. Ongkiko, to be able to settle my estate and to protect myself from with the checks that they changed that my husband issued to Architect Gerry Contreras.
Q Was there any point in time that you yourself took over the construction?
A Yes, sir, right after a year of that property after I was more settled.
Q And did you engaged [sic] the services of any professional or construction company for the purpose?
A Yes, sir.
Q Who was that?
A Architect Tom Adarme.
Q What is his first name, if you recall?
A Architect Tommy Adarme.
Q And was there any company or office which helped Architect Adarme in the continuation of the construction?
A Yes, I also signed a contract with Architect Adarme and he hired Home Construction to finish the renovation and completion of the construction in Wack-Wack, sir.
Q Do you have any document to show that you yourself overtook personally the continuation of the construction of your residence?
A Yes, sir I have the whole construction documents and also the documents through Arch. Gerry Contreras, that contract that we signed.
In other words, plaintiff-appellee took over the management of the construction of the Wack-Wack property only because defendant-appellant was still in mourning. And, If ever plaintiff-appellee did pay for the costs of the construction after the death of Alexander, it would be stretching logic to absurd proportions to say that such fact proved that he owns the subject property. If at all, it only shows that he is entitled to reimbursement for what he had spent for the construction.[7]
Accordingly, the CA concluded, as follows:
Going by the records, we hold that plaintiff-appellee in this case was not able to show by clear preponderance of evidence that his son and the defendant-appellant were not financially capable of purchasing said property. Neither was plaintiff-appellee able to prove by clear preponderance of evidence (i.e., credible documentary evidence) that the money used to purchase the said properties really came from him. (And even if we assume that it came from him, it would still not establish an implied trust, as it would again be considered a donation, or a gift, by express mandate of the saving clause of Art. 1448 of the Civil Code, as heretofore stated).
If anything, what is clear from the evidence at bench is that Alexander and the defendant-appellant were not exactly bereft of the means, the financial capability or resources, in their own right, to purchase, or acquire, the Meridien Condominium and the Wack-Wack property.
The evidence on record shows that Alexander Ty was 31 years old when he purchased the Meridien Condominium and was 33 years old when he purchased the Wack-Wack property. In short, when he purchased these properties, he had already been working for at least nine years. He had a car care business and a beer garden business. He was actively engaged in the business dealings of several family corporations, from which he received emoluments and other benefits. As a matter of fact, Alexander and plaintiff-appellee had common interest in various family corporations of which they were stockholders, and officers and directors, such as: International Paper Industries, Inc.; Agro-Industries Specialists Services, Inc.; Hi-Professional Drillings and Manufacturing, Inc.; MVR-TV Picture Tube, Inc.; Crown Consumer Products, Inc.; Philippine Crystal Manufacturing Corporation; and Union Emporium, Inc.
Furthermore, at the time of his death, the son Alexander was Vice-President of Union Ajinomoto (Exh. “40”); Executive Vice-President of Royal Porcelain Corporation (Exh. “40-A”); Treasurer of Polymart Paper Industries, Inc. (Exh. “40-B”); General Manager of Hornblower Sales Enterprises and Intercontinental Paper Industries, Inc. (Exh. “40-C”); President of High Professional Drilling and Manufacturing, Inc. (Exh. “40-D”); President of Crown Consumer Products, Inc. (Exh. “40-E”); (Executive Vice-President of MVR-TV Picture Tube, Inc. (Exh.”40-F”); and Director of ABT Enterprise, Inc. (Exh. “40-G”). He even had a controlling interest in ABT Enterprises, which has a majority interest in Union Ajinomoto, Inc.
What is more, the tax declaration receipts for the Wack-Wack property covering the years 2000-2004, and the tax declaration receipts for the Meridien Condominium covering the years 2000-2001, showed that to his date it is still the estate of Alexander that is paying for the real estate taxes thereon.
In the context of this formidable circumstances, we are constrained to overturn the judgment of the trial court, which made these findings:
Based on the facts at hand and the applicable law, the ineluctable conclusion is that a fiduciary relationship or an implied trust existed between plaintiff and Alexander Ty with the former as the owner, trustor and beneficiary and the latter as the trustee, concerning the subject real properties. The death of Alexander automatically extinguished the said fiduciary relationship, hence, plaintiff’s instant action to recover the subject properties from the intestate estate of Alexander Ty is meritorious.
We do not agree. To belabor a point, we are not persuaded that an implied trust was created concerning the subject properties. On the assumption, as elsewhere indicated, the plaintiff-appellee at the very least, paid for part of its purchase price, the EDSA property is presumed to be a gift, or donation, in favor of Alexander Ty, defendant-appellant’s late husband, following the saving clause or exception in Art. 1448 of the Civil Code. To repeat, it is the saving clause, or exception, not the general rule, that should here apply, the late Alexander Ty being the son of Plaintiff-appellee.
Nor are we convinced, given the state of the evidence on record, that the plaintiff-appellee paid for the price of the Meridien Condominium and the Wack-Wack property. Therefore, the general rule announced in the first sentence of Art. 1448 of the Civil Code has no application in this case. Or, if the article is to be applied at all, it should be the exception, or the saving clause, that ought to apply here, the deceased Alexander Ty being the son, as stated, of plaintiff-appellee.
To sum up: Since plaintiff-appellee has erected his case upon Art. 1448 of the Civil Code, a prime example of an implied trust, viz.: that it was he who allegedly paid for the purchase price of some of the realties subject of this case, legal title or estate over which he allegedly granted or conveyed unto his son and namesake, Alexander Ty, for the latter to hold these realties in trust for his siblings in case of his (plaintiff-appellee’s) demise, plaintiff-appellee is charged with the burden of establishing the existence of an implied trust by evidence described or categorized as “sufficiently strong,” “clear and satisfactory,” or “trustworthy.” As will be presently discussed. Sad to say, plaintiff-appellee has miserably failed to discharge that burden. For, if the records are any indication, the evidence adduced by plaintiff-appellee on this score, can hardly merit the descriptive attributes “sufficiently strong,” or “clear and satisfactory,” or “trustworthy.”
If only to emphasize and reiterate what the Supreme Court has in the past declared about implied trusts, these case law rulings are worth mentioning –
Where a trust is to be established by oral
proof, the testimony supporting it must be sufficiently strong to prove
that the right of the alleged beneficiary with as much certainty as if a
document were shown. A trust cannot be established, contrary to the
recitals of a
As a rule, 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. 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.
The route to the reversal of the trial court’s finding that an implied trust had been constituted over the subject realties is, thus, indubitably clear.
As a final point, this Court finds that the plaintiff-appellee is not entitled to moral damages, attorney’s fees and costs of litigation, considering that the instant case is clearly a vexatious and unfounded suit by him filed against the estate of the late Alejandro Ty. Hence, all these awards in the judgment a quo are hereby DELETED.[8]
The CA therefore reversed and set aside the judgment appealed from and
entered another one dismissing the complaint.
On
Hence, this petition.
Petitioner submits the following grounds:
IN
REVERSING THE TRIAL COURT’S JUDGMENT, THE COURT OF APPEALS –
1. MADE FACTUAL FINDINGS GROUNDED ON
MANIFESTLY MISTAKEN INFERENCES, SPECULATIONS, SURMISES, OR CONJECTURES OR
PREMISED ON THE ABSENCE OF, OR ARE CONTRADICTED BY, THE EVIDENCE ON RECORD, AND
WITHOUT CITATIONS OF THE SPECIFIC EVIDENCE ON WHICH THEY ARE BASED.
2.
RULED THAT THERE WAS A “PRESUMED DONATION”, WHICH IS A
MATTER NEVER RAISED AS AN ISSUE IN THE CASE AS IT, IN FACT, CONFLICTS WITH THE
PARTIES’ RESPECTIVE THEORIES OF THE CASE, AND THUS DEPARTED FROM THE ACCEPTED
AND USUAL COURSE OF JUDICIAL PROCEEDINGS AS TO CALL FOR THIS HONORABLE COURT’S
EXERCISE OF ITS POWER OF SUPERVISION.
3.
APPLIED THE PROVISION ON PRESUMPTIVE DONATION IN FAVOR
OF A CHILD IN ARTICLE 1448 OF THE CIVIL CODE DESPITE AB TY’S EXPRESS DECLARATION
THAT HE DID NOT INTEND TO DONATE THE SUBJECT PROPERTIES TO ALEXANDER AND THUS
DECIDED A QUESTION OF SUBSTANCE NOT THERETOFORE DETERMINED BY THIS HONORABLE
COURT.
4.
REQUIRED THAT THE IMPLIED TRUST BE PROVEN WITH
DOCUMENTARY EVIDENCE AND THUS DECIDED A QUESTION OF
The Court disposes of the petition, as follows:
The
EDSA Property
Petitioner
contends that the EDSA property, while registered in the name of his son
Alexander Ty, is covered by an implied trust in his favor under Article 1448 of
the Civil Code. This, petitioner argues,
is because he paid the price when the property was purchased and did so for the
purpose of having the beneficial interest of the property.
Article
1448 of the Civil Code provides:
Art.
1448. There is an implied trust when
property is sold, and the legal estate is granted to one party but the price is
paid by another for the purpose of having the beneficial interest of the
property. The former is the trustee, while
the latter is the beneficiary. However,
if the person to whom the title is conveyed is a child, legitimate or
illegitimate, of one paying the price of the sale, no trust is implied by law,
it being disputably presumed that there is a gift in favor of the child.
The
CA conceded that at least part of the purchase price of the EDSA property came
from petitioner. However, it ruled out
the existence of an implied trust because of the last sentence of Article 1448: x x x However, if the person to whom the
title is conveyed is a child, legitimate or illegitimate, of the one paying the
price of the sale, no trust is implied by law, it being disputably presumed
that there is a gift in favor of the child.
Petitioner
now claims that in so ruling, the CA departed from jurisprudence in that such
was not the theory of the parties.
Petitioner,
however, forgets that it was he who invoked Article 1448 of the Civil Code to
claim the existence of an implied trust.
But Article 1448 itself, in providing for the so-called purchase money
resulting trust, also provides the parameters of such trust and adds, in the
same breath, the proviso: “However, if
the person to whom the title is conveyed is a child, legitimate or
illegitimate, of the one paying the price of the sale, NO TRUST IS IMPLIED BY
LAW, it being disputably presumed that there is a gift in favor of the
child.” (Emphasis supplied.)
Stated
otherwise, the outcome is the necessary consequence of petitioner’s theory and
argument and is inextricably linked to it by the law itself.
The
CA, therefore, did not err in simply applying the law.
Article
1448 of the Civil Code is clear. If the
person to whom the title is conveyed is the child of the one paying the price
of the sale, and in this case this is undisputed, NO TRUST IS IMPLIED BY
LAW. The law, instead, disputably
presumes a donation in favor of the child.
On
the question of whether or not petitioner intended a donation, the CA found
that petitioner failed to prove the contrary.
This is a factual finding which this Court sees no reason the record to
reverse.
The
net effect of all the foregoing is that respondent is obliged to collate into
the mass of the estate of petitioner, in the event of his death, the EDSA
property as an advance of Alexander’s share in the estate of his father,[11]
to the extent that petitioner provided a part of its purchase price.
The Meridien Condominium and the
Wack-Wack property.
Petitioner
would have this Court overturn the finding of the CA that as regards the
Meridien Condominium and the Wack-Wack property, petitioner failed to show that
the money used to purchase the same came from him.
Again,
this is clearly a factual finding and petitioner has advanced no convincing
argument for this Court to alter the findings reached by the CA.
The
appellate court reached its findings by a thorough and painstaking review of
the records and has supported its conclusions point by point, providing citations
from the records. This Court is not
inclined to reverse the same.
Among
the facts cited by the CA are the sources of income of Alexander Ty who had
been working for nine years when he purchased these two properties, who had a
car care business, and was actively engaged in the business dealings of several
family corporations, from which he received emoluments and other benefits.[12]
The
CA, therefore, ruled that with respect to the Meridien Condominium and the
Wack-Wack property, no implied trust was created because there was no showing
that part of the purchase price was paid by petitioner and, on the contrary,
the evidence showed that Alexander Ty had the means to pay for the same.
WHEREFORE, the petition is PARTLY GRANTED in that the Decision of
the Court of Appeals dated
No
costs.
SO ORDERED.
ADOLFO
S. AZCUNA
Associate Justice
WE CONCUR:
REYNATO S. PUNO
Chief Justice
Chairperson
(On Leave)
ANTONIO
T. CARPIO RENATO C. CORONA
Associate
Justice Associate Justice
TERESITA J.
LEONARDO-DE CASTRO
Associate Justice
CERTIFICATION
Pursuant
to Section 13, Article VIII of the Constitution, it is hereby certified 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
* On Leave.
[1] Penned by Justice Renato C. Dacudao and concurred in by Justices Lucas P. Bersamin and Celia C. Librea-Leagogo.
[2] CA Decision, pp. 5-9, rollo, pp. 50-53.
[3]
[4]
[5]
[6]
[7]
[8]
[9] Resolution, id. at 72-80.
[10]
[11] See
Article 1061 and subsequent articles of the Civil Code.
[12] See CA Decision, rollo,
p. 67.