Republic of the Philippines

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-49087 April 5, 1982

MINDANAO DEVELOPMENT AUTHORITY, now the SOUTHERN PHILIPPINES

DEVELOPMENT ADMINISTRATION, petitioner,
vs.
THE COURT OF APPEALS and FRANCISCO ANG BANSING, respondents.
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 Banging 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
664B-3, with an area of 61.107 square meters, more or less. 2 On June 15-17 and
December 15, 1939, a cadastral survey was made and Lot 664-B-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. 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. 4

The cadastral survey plan was approved by the Director of Lands on July 10,
1940, 5 and on March 7, 1941, Original Certificate of Title No. 26 was issued in the means 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. 6

On that day, March 31, 1941, Ang Banging 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 1846-B-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, 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. 9 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:

xxx xxx xxx

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 sale marked
as Annex 'A' and his affidavit marked as Annex 'C'. 10
In answer, Ang Bansing replied:
xxx xxx xxx

9. That defendant admits that in Annex'A'of the complaint, it was agreed and
stipulated in paragraph 6 thereof that:

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

and defendant in fact secured at his expense his OCT No. 26 for his entire land;
that in the process of defendant's securing his title neither Juan Cruz Yap Chuy
nor the Commonwealth of the Philippines asserted any right to ownership of the
subject property and that was almost 30 years ago until plaintiff filed its
complaint, thus plaintiff is forever barred from claiming any right over the subject
property. There was no real sale made but only the intention to sell a portion of
the land as stated by defendant in Annex 'C' of the complaint.

10. That defendant denies allegations contained in paragraph 10 of the

complaint that he acted as the trustee of Juan Cruz Yap Chuy Defendant was
never such; matter of fact Juan Cruz Yap Chuy for the last 26 years, that is until
he. died in October, 1965, never made any demand to have the title of the
subject property transferred in his name because he knew all the time that the
alleged sale in his favor was per se null and void he also knew that no sale was
ever consummated. 11

After trial, the Court of First Instance of Davao City found that an express trust
had been established and ordered the reconveyance of the title to Lot 1846-C
of the Davao Cadastre to the plaintiff Mindanao Development Authority. 12

Ang Banging appealed to the Court of Appeals and the said appellate court
ruled that no express trust has been created and, accordingly, reversed the
judgment and dismissed the complaint. 13
Hence, the present recourse.
The petition is without merit. As found by the respondent Court of Appeals, no
express trust had been created between Ang Banging and Juan Cruz over Lot
1846-C of the Davao Cadastre. "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." 14 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 any one 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 so to do, may enforce, the trust." 15

In this case, the herein petitioner relies mainly upon the following stipulation in
the deed of sale executed by Ang Bansing in favor of Juan Cruz to prove that
an express trust had been established with Ang Bansing as the settlor and trustee
and Juan Cruz as the cestui que trust or beneficiary:

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 said Juan Cruz Yap Chuy.

The above-quoted stipulation, however, is nothing but a 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. Hence, there is no express
trust. It is essential to the creation of an express trust that the settlor presently and
unequivocally make a disposition of property and make himself the trustee of
the property for the benefit of another. 16

In case of a declaration of trust, the declaration must be clear and unequivocal

that the owner holds property in trust for the purposes named. 17

While Ang Bansing had agreed in the deed of sale that he will work for the titling
of "the entire area of my land under my own expenses," it is not clear therefrom
whether said statement refers to the 30-hectare parcel of land or to that portion
left to him after the sale. A failure on the part of the settlor definitely to describe
the subject-matter of the supposed trust or the beneficiaries or object thereof is
strong evidence that he intended no trust. 18
The intent to create a trust must be definite and particular. It must show a desire
to pass benefits through the medium of a trust, and not through some related or
similar device. 19

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 the case of De Leon vs. Packson, 20a 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. Considering that the trust
intent has not been expressed with such clarity and definiteness, no express trust can be
deduced from the stipulation aforequoted.

Nor will the affidavit executed by Ang Banging on April 23, 1941, 21 be construed as
having established an express trust. As counsel for the herein petitioner has stated, "the only
purpose of the Affidavit was to clarify that the area of the land sold by Ang Bansing to Juan Cruz
Yap Chuy is not only 5 hectares but 61,107 square meters or a little over six (6) hectares." 22

That no express trust had been agreed upon by Ang Bansing and Juan Cruz is
evident from the fact that Juan Cruz, the supposed beneficiary of the trust,
never made any attempt to enforce the alleged trust and require the trustee to
transfer the title over Lot 1846-C in his name. Thus, the records show that the
deed of sale, covering Lot 1846-C, was executed by Ang Bansing in favor of
Juan Cruz on February 25, 1939. Two years later, or on March 31, 1941, Ang
Bansing sold Lot 1846-A to the said Juan Cruz for which TCT No. 1784 was issued
in the name of Juan Cruz. Subsequently thereafter, Lot 1848-A, with an area of
9.6508 hectares, and Lots 1846-A and 1848-B-2-D, all subdivided portions of Lot
1846-B, were similarly conveyed to the said Juan Cruz for which TCT No. 2599
and TCT No. 2600, respectively, were issued in the name of Juan Cruz on
September 26, 1946. Then, another portion of 'Lot 1¬846-B, designated in the
subdivision plan as Lot 1848-B-2-13, was sold to Juan Cruz for which TCT No. 184
was issued in his name on November 28, 1948. Despite these numerous transfers
of portions of the original 30-hectare parcel of land of Ang Bansing to Juan Cruz
and the issuance of certificates of title in the name of Juan Cruz, the latter never
sought the transfer of the title to Lot 1846-C in his name. For sure, if the parties
had agreed that Ang Bansing shall hold the property in trust for Juan Cruz until
after the former shall have obtained a certificate of title to the land, the latter
would have asked for the reconveyance of the title to him in view of the surety
bond executed by him in favor of the Commonwealth Government wherein he
warrants his title over the property. The conduct of Juan Cruz is inconsistent with
a trust and may well have probative effect against a trust.

But, even granting, arguendo, that an express trust had been established, as
claimed by the herein petitioner, it would appear that the trustee had
repudiated the trust and the petitioner herein, the alleged beneficiary to the
trust, 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, the herein 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." 23 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
being. 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 rights of the alleged beneficiary over the land
in question after the repudiation of the trust by the trustee, had already prescribed.

Needless to say, only an implied trust may have been impressed upon the title of
Ang Banging 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
trusts, 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." 24 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. 25

If a person obtains legal title to property by fraud or concealment, courts of

equity will impress upon the title a so-called constructive trust in favor of the
defrauded party. 26

There is also a constructive trust if a person sells a parcel of land and thereafter
obtains title to it through fraudulent misrepresentation. 27

Such a constructive trust is not a trust in the technical sense and is prescriptible; it
prescribes in 10 years. 28

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 Victoriana Ang
Bansing Orfelina Ang Bansing and Francisco Ang Banging. 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.

Besides, 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. 29 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 acquiescence to existing conditions, it is now too
late for the petitioner to complain.

WHEREFORE, the petition should be, as it is hereby, DENIED. No costs.

SO ORDERED.
De Castro, Ericta and Escolin, JJ., concur.
Barredo, J. (Chairman), I reserve my vote.

Separate Opinions

AQUINO, J., dissenting:

The disputed land should be adjudicated to the government agency known as

the Southern Philippines Development Administration, the successor of the
Commonwealth of the Philippines.

To adjudge Francisco Ang Bansing as the owner of the land is to sanction a

brazen breach of trust or a form of landgrabbing and to perpetrate a gross
injustice. The facts are as follows:

1. Before the war, Francisco Ang Banging was the owner of a tract of
unregistered land with an area of about twenty-nine hectares located at Barrio
Panacan (Sasa) Davao City.

2. On February 25, 1939, he sold to Juan Cruz Yap Chuy for six thousand pesos a
portion of the said land with an area of around five hectares, bounded on the
north by the land of Vedasto Corcuera, on the east by the Davao Gulf, on the
south by the land of Ang Ping and on the west by the remaining portion but
separated by the provincial road. Ang Bansing's wife, Anatalia Cepeda, was
one of the two witnesses in the deed of sale. The sale was registered on March
1, 1939 in the registry of deeds of Davao City.

3. In the deed of sale, Ang Bansing made the following commitment: "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 (by) me shall be
under the expenses of the said Juan Cruz Yap Chuy It was also stipulated that
the buyer could take possession of the land and its improvements (p. 14, Record
on Appeal).
4. After the survey of Ang Bansing's land, the portion sold to Juan Cruz Yap Chuy
came to be known as Lot No, 664B-3, described as follows: "Bounded on the
North by Lot No. 664-B-4; on the East by the Davao Gulf; on the South by Lot No.
564 and on the West by Lot No. 664-B-5; containing an area of sixty-one
thousand one hundred seven (61,107) square meters more or less." By reason of
the 1939 cadastral survey, Lot No. 664-B-3 came to be known as Lot No. 1846-C
of the Davao cadastre. The survey was made on June 15-17 and December 15,
1939, and was approved on July 10, 1940.

5. About ten months later, or on December 23, 1939, Juan Cruz Yap Chuy sold to
the Commonwealth of the Philippines the same portion, Identified as Lot No.
664-B-3, with an area of 61,107 square meters, together with the improvements
thereon, for the sum of P6,347.50 allocated as follows:

6.1107 hectares at P 140 a hectare.......................................... P 855.00 756

coconut trees, all fruit-bearing, at P7 per tree................ 5,292.00

200 coconut trees, not productive, at one peso a

tree......................................................................... 200.00

The sale included a parcel of land Identified as lot No. 664-B-5, with an area of
8,023 square meters, which was a part of the national road and which Cruz
donated to the Commonwealth Government. The sale was registered in the
registry of deeds of Davao City on December 27,1939, meaning that Ang
Bansing had constructive notice thereof

6. Simultaneously with that deed of sale, Juan Cruz Yap Chuy as principal, and
G.B. Cam and Miguel N. Lanzona as sureties, executed a bond in the sum of
P6,347.50 (the price of the sale) in favor of the Commonwealth of the
Philippines. The bond would become void if the Commonwealth obtained
absolute title to the land.

7. On April 23, 1941, Ang Bansing executed an affidavit wherein he confirmed

the previous sale to Juan Cruz Yap Chuy of the said Lot No. 1846-C. His wife,
Anatalia Cepeda, was a witness in the said affidavit. Ang Bansing clarified that
the exact area of the lot sold is 16,107 square meters and not five hectares only
which latter area was merely his calculation. Ang Bansing further said in the
affidavit:

That I hereby certify that I have no objection that the said portion after the
survey be transferred and ceded, as I intended to transfer and cede the same,
to the said Juan Cruz Yap Chuy by virtue of the said Deed of Sale above-
mentioned (referring to the 1939 Deed of Sale).
That affidavit was registered on May 8, 1941.

8. Lot No. 664-B-3 or No. 1846-C was covered by Tax Declarations Nos. 80454, R-
3612, R-5232 and A-12-123 in the name of the Republic of the Philippines (pp. 88-
89, Record on Appeal). On the other hand, Ang Bansing never declared Lot No.
1846-C for tax purposes and never paid any realty taxes therefor.

9. Ang Bansing obtained Decree No. 745358 for the registration of the 29-
hectare land (including Lot No. 664-B-3 or No. 1846-C). By virtue of that decree,
Original Certificate of Title No. 26 was issued on March 7, 1941 in the names of
Victoriana Ang Bansing Orfelina Ang Banging and Francisco Ang Bansing

10. The issuance of that title implies that the government official (may be the
provincial district engineer at Davao City), who was aware of the purchase of
Lot No. 664-B-3 from Ang Bansing was negligent in not intervening in the land
registration proceeding so as to have that lot registered in the name of the
Commonwealth of the Philippines. Another implication is that Ang Banging had
already acted fraudulently or in bad faith in not asking his lawyer to segregate
Lot No. 664-B-3 or Lot No. 1846-C from his land and to see to it that a separate
title for that lot was issued in the name of the Commonwealth of the Philippines.

11. On March 31, 1941, or 24 days after the issuance of OCT No. 26, it was
cancelled because of a "deed of adjudication". Transfer Certificate of Title No.
1783 was issued for the 19-hectare land in the name of Francisco Ang Bansing
alone.

12. Ang Bansing's land, known as Lot No. 1846, was subdivided into five lots,
namely: Lots Nos. 1846-A, 1846-B, 1846-C, 1846-D and 1846-E. On that same date
of March 31, 1941, when Ang Bansing obtained TCT No. 1783, he sold Lot
No. 1846-A to Juan Cruz Yap Chuy Because of that sale, TCT No. 1783 was
cancelled and TCT No. 1784 was issued to Juan Cruz Yap Chuy while TCT No.
1785 was issued to Ang Banging for the other four lots which (it should be
repeated) included Lot No. 1846-C the disputed lot sold in 1939 by Ang Bansing
to Juan Cruz Yap Chuy and in turn sold by the latter to the Commonwealth of
the Philippines. (The name Juan Cruz Yap Chuy was shortened to Juan Cruz as
shown in Entry No. 8052 dated August 4, 1953, appearing in TCT No. 1784. Cruz
died in 1965.)

13. Ang Bansing sold to Vedasto Corcuera Lots Nos. 1846-B-1 and 1846-B-2-C,
which are subdivision lots of Lot No. 1846-B. As a result TCT No. 1785 was
cancelled and TCT Nos. 2551 and 2552 were issued to Corcuera on August 10,
1946. Lot No. 1846- D was also sold by Ang Bansing to Corcuera.
14. Other portions of Lot No. 1846-B were sold by Ang Bansing to Juan Cruz. Lots
Nos. 1846-C and 1846-E, the remaining lots, registered in the name of Ang
Bansing as shown in TCT No. T-2601 (Exh. L), were not alienated by him.

15. On September 25, 1965, President Diosdado Macapagal issued

Proclamation No. 459, transferring to the Mindanao 'Development Authority (a
corporate body created by Republic Act No. 3034), "subject to private rights, if
any", eight parcels of land forming part of the Government's private domain.
Among those parcels was Parcel 6, Lot No. 1846-C, Psd-16952, the herein
disputed lot, with an area of 61,107 square meters, bounded on the west by the
national highway, on the north by Lot No. 1846-D, on the east by the Gulf of
Davao and on the south by Lot No. 564- A. Thus, Lot No. 1846-C became a part
of the Port Area Reservation from Sasa to Panacan Davao City.

16. In a letter dated March 31, 1969, counsel for the Mindanao Development
Authority requested Ang Bansing to surrender the owner's duplicate of TCT No. T-
2601 so that Lot No. 1846-C could be transferred to the said government agency
(Exh. K). Ang Bansing did not heed the demand.

17. On April 11, 1969, the Mindanao Development Authority sued Ang Bansing
for the reconveyance of Lot No. 1846-C. After trial (during which Ang Banging
did not testify), the trial court held that Ang Bansing held Lot No. 1846-C in trust
for the State and that the prescriptive period for recovering the Lot from Ang
Bansing started only in 1968 when Ang Banging allegedly repudiated the trust.

18. The trial court cancelled Ang Bansing's title and directed the register of
deeds to issue a new title to the Mindanao Development Authority for Lot No.
1846-C. Ang Bansing appealed to the Court of Appeals.

19. That Court in its decision dated December 27, 1977, reversing the trial court's
decision, held that Ang Banging was the owner of the disputed lot. It ruled that
even if Ang Bansing held Lot No. 1846-C in express trust, the trust was Innovated"
by subsequent circumstances and that the sale of Lot No. 1846-C to the
Commonwealth of the Philippines was not consummated because Ang Banging
sold Lot No. 1846-A and portions of Lot No. 1846-B to Juan Cruz in Lieu of Lot No.
1846-C.

20. The Appellate Court also held that the Mindanao Development Authority
had no cause of action for reconveyance because it had no privity with Ang
Bansing and that the trust, if any, was an implied or constructive trust and the
action based on that kind of trust was barred by prescription.
21. Presidential Decree No.690,which took effect on April 22, 1975, established
the Southern Philippines Development Administration and abolished the
Mindanao Development Authority. The latter's assets were transferred to the
Administration.

I am of the opinion that Ang Banging 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 twenty-three days after TCT No. 1783 was issued to him
for that lot.

As already noted, Ang Bansing in that affidavit swore that he intended to cede
and transfer that rot to Juan Cruz after the survey (Exh. C). That sworn statement
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 (Exh. A).
The said statements create an express trust for Lot No. 1846-C in favor of Juan
Cruz and his successors-in-interest or assignees. "No particular words are required
for the creation of an express trust, it being sufficient that a trust is clearly
intended" (Art. 1444, Civil Code).

It is significant that, while Ang Bansing sold Lots Nos. 1846-A, 1846-B and 1846-D
to Cruz and Corcuera, he did not touch at all Lot No. 1846-C. He did not
alienate that lot because he knew that it was not his property and that it
belonged to the State.

Equally significant and credible is the trial court's finding that it was only in 1968
that Ang Bansing laid claim to Lot No. 1846-C through Rufino Boncayao, a
surveyor who worked in the Davao City engineer's office and who discovered
that the title to the lot had not yet been placed in the name of the
Commonwealth of the Philippines.
The trial court found that Boncayao, as the agent of Ang Banging and with the
advice and backing of Vicente C. Garcia, Ang Bansing's lawyer, claimed that
Ang Bansing was the true owner of Lot No. 1846-C. 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, L-19872,
December 3,1974, 61 SCRA 284, 299).

The defense of prescription cannot be set up in an action to recover property

held in trust for the benefit of another (Sevilla vs. De los Angeles, 97 Phil. 875).

Property held in trust can be recovered by the beneficiary regardless of the

lapse of time (Marabilles vs. Quito 100 Phil. 64; Bancairen vs. Diones, 98 Phil. 122,
126; Juan vs. Zuniga 114 Phil. 1163; Vda. de Jacinto vs. Vda. de Jacinto, 115 Phil.
363, 370). Prescription in the case of express trusts can be invoked only from the
time the trust is repudiated (Tamayo vs. Callejo, 68 O.G. 8661, 46 SCRA 27,32).

And a trustee who takes a Torrens title in his name for the land held in trust
cannot repudiate the trust by relying on the registration. That is one of the
limitations upon the finality of a decree of title Sotto vs. Teves. L-38018, October
31, 1978, 86 SCRA 154, 178; Alvarez vs. Espiritu, 122 Phil. 229, 235).

The rule, that an action for reconveyance prescribes in ten years, applies to an
implied trust, not to an express trust (Carantes vs. Court of Appeals, L-33360, April
25, 1977, 76 SCRA 514).

So, as a general rule a trust estate (in an express trust) is exempt from the
operation of the statute of limitations. The exception is when the trustee
repudiates the trust in which case the trustee may acquire the trust estate by
prescription. The repudiation must be known to the cestui que trust and must be
direct, clear, open and equivocal. (Callejon Salinas vs. Roman Tuason and
Moreno Roman, 55 Phil. 729; Palma vs. Cristobal, 77 Phil. 712; Valdez vs. Olorga,
L-22571, May 25, 1973, 51 SCRA 71.)

One who acquires a Torrens title in his own name to property which he is
administering for himself and his brothers and sisters as heirs in common by
descent from a common ancestor may be compelled to surrender to each of
his co-heirs his appropriate share". A partition proceeding is an appropriate
remedy to enforce this right. (Castro vs. Castro, 57 Phil. 675). An equitable action
for reconveyance is also a proper remedy (Laguna vs. Levantino 71 Phil. 566;
Sumira vs. Vistan, 74 Phil. 138).

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 Vina vs. Government of the
P.I., 65 Phil. 262, 265; Republic vs. Ruiz, L-23712, April 29, 1968, 23 SCRA 348).

The maxim is nullum tempus occurrit regi or nullum tempus occurrit

reipublicae (lapse of time does not bar the right of the crown or lapse of time
does not bar the commonwealth). The rule is now embodied in article 1108(4) of
the Civil Code.

It is a maxim of great antiquity in English law. The best reason for its existence is
the great public policy of preserving public rights and property from damage
and loss through the negligence of public officers. (34 Am Jur. 301; Ballentines's
Law Dictionary, p. 891; U.S. vs. Nashville, Chattanooga & St. Louis Railway Co.,
118 U.S. 120,125).
Thus, the right of reversion or reconveyance to the State of lands fraudulently
registered or not susceptible of private appropriation or acquisition does not
prescribe (Martines vs. Court of Appeals, L-31271, April 29, 1974, 56 SCRA 647,
655; Republic vs. Ramos, 117 Phil. 45, 49).

The government officials concerned were negligent in not intervening in the

land registration proceeding or in not promptly asking Ang Banging 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).
I vote to reverse and set aside the decision of the Court of Appeals and to affirm
the trial court's decision with the modification that the title should be issued to
the Southern Philippines Development Administration.

Separate Opinions
AQUINO, J., dissenting:

The disputed land should be adjudicated to the government agency known as

the Southern Philippines Development Administration, the successor of the
Commonwealth of the Philippines.

To adjudge Francisco Ang Bansing as the owner of the land is to sanction a

brazen breach of trust or a form of landgrabbing and to perpetrate a gross
injustice. The facts are as follows:

1. Before the war, Francisco Ang Banging was the owner of a tract of
unregistered land with an area of about twenty-nine hectares located at Barrio
Panacan (Sasa) Davao City.

2. On February 25, 1939, he sold to Juan Cruz Yap Chuy for six thousand pesos a
portion of the said land with an area of around five hectares, bounded on the
north by the land of Vedasto Corcuera, on the east by the Davao Gulf, on the
south by the land of Ang Ping and on the west by the remaining portion but
separated by the provincial road. Ang Bansing's wife, Anatalia Cepeda, was
one of the two witnesses in the deed of sale. The sale was registered on March
1, 1939 in the registry of deeds of Davao City.
3. In the deed of sale, Ang Bansing made the following commitment: "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 (by) me shall be
under the expenses of the said Juan Cruz Yap Chuy It was also stipulated that
the buyer could take possession of the land and its improvements (p. 14, Record
on Appeal).

4. After the survey of Ang Bansing's land, the portion sold to Juan Cruz Yap Chuy
came to be known as Lot No, 664B-3, described as follows: "Bounded on the
North by Lot No. 664-B-4; on the East by the Davao Gulf; on the South by Lot No.
564 and on the West by Lot No. 664-B-5; containing an area of sixty-one
thousand one hundred seven (61,107) square meters more or less." By reason of
the 1939 cadastral survey, Lot No. 664-B-3 came to be known as Lot No. 1846-C
of the Davao cadastre. The survey was made on June 15-17 and December 15,
1939, and was approved on July 10, 1940.

5. About ten months later, or on December 23, 1939, Juan Cruz Yap Chuy sold to
the Commonwealth of the Philippines the same portion, Identified as Lot No.
664-B-3, with an area of 61,107 square meters, together with the improvements
thereon, for the sum of P6,347.50 allocated as follows:

6.1107 hectares at P 140 a hectare........................................... P 855.00 756

coconut trees, all fruit-bearing, at P7 per tree................. 5,292.00

200 coconut trees, not productive, at one peso a

tree.......................................................................... 200.00

The sale included a parcel of land Identified as lot No. 664-B-5, with an area of
8,023 square meters, which was a part of the national road and which Cruz
donated to the Commonwealth Government. The sale was registered in the
registry of deeds of Davao City on December 27,1939, meaning that Ang
Bansing had constructive notice thereof

6. Simultaneously with that deed of sale, Juan Cruz Yap Chuy as principal, and
G.B. Cam and Miguel N. Lanzona as sureties, executed a bond in the sum of
P6,347.50 (the price of the sale) in favor of the Commonwealth of the
Philippines. The bond would become void if the Commonwealth obtained
absolute title to the land.

7. On April 23, 1941, Ang Bansing executed an affidavit wherein he confirmed

the previous sale to Juan Cruz Yap Chuy of the said Lot No. 1846-C. His wife,
Anatalia Cepeda, was a witness in the said affidavit. Ang Bansing clarified that
the exact area of the lot sold is 16,107 square meters and not five hectares only
which latter area was merely his calculation. Ang Bansing further said in the
affidavit:

That I hereby certify that I have no objection that the said portion after the
survey be transferred and ceded, as I intended to transfer and cede the same,
to the said Juan Cruz Yap Chuy by virtue of the said Deed of Sale above-
mentioned (referring to the 1939 Deed of Sale).
That affidavit was registered on May 8, 1941.

8. Lot No. 664-B-3 or No. 1846-C was covered by Tax Declarations Nos. 80454, R-
3612, R-5232 and A-12-123 in the name of the Republic of the Philippines (pp. 88-
89, Record on Appeal). On the other hand, Ang Bansing never declared Lot No.
1846-C for tax purposes and never paid any realty taxes therefor.

9. Ang Bansing obtained Decree No. 745358 for the registration of the 29-
hectare land (including Lot No. 664-B-3 or No. 1846-C). By virtue of that decree,
Original Certificate of Title No. 26 was issued on March 7, 1941 in the names of
Victoriana Ang Bansing Orfelina Ang Banging and Francisco Ang Bansing

10. The issuance of that title implies that the government official (may be the
provincial district engineer at Davao City), who was aware of the purchase of
Lot No. 664-B-3 from Ang Bansing was negligent in not intervening in the land
registration proceeding so as to have that lot registered in the name of the
Commonwealth of the Philippines. Another implication is that Ang Banging had
already acted fraudulently or in bad faith in not asking his lawyer to segregate
Lot No. 664-B-3 or Lot No. 1846-C from his land and to see to it that a separate
title for that lot was issued in the name of the Commonwealth of the Philippines.

11. On March 31, 1941, or 24 days after the issuance of OCT No. 26, it was
cancelled because of a "deed of adjudication". Transfer Certificate of Title No.
1783 was issued for the 19-hectare land in the name of Francisco Ang Bansing
alone.

12. Ang Bansing's land, known as Lot No. 1846, was subdivided into five lots,
namely: Lots Nos. 1846-A, 1846-B, 1846-C, 1846-D and 1846-E. On that same date
of March 31, 1941, when Ang Bansing obtained TCT No. 1783, he sold Lot
No. 1846-A to Juan Cruz Yap Chuy Because of that sale, TCT No. 1783 was
cancelled and TCT No. 1784 was issued to Juan Cruz Yap Chuy while TCT No.
1785 was issued to Ang Banging for the other four lots which (it should be
repeated) included Lot No. 1846-C the disputed lot sold in 1939 by Ang Bansing
to Juan Cruz Yap Chuy and in turn sold by the latter to the Commonwealth of
the Philippines. (The name Juan Cruz Yap Chuy was shortened to Juan Cruz as
shown in Entry No. 8052 dated August 4, 1953, appearing in TCT No. 1784. Cruz
died in 1965.)

13. Ang Bansing sold to Vedasto Corcuera Lots Nos. 1846-B-1 and 1846-B-2-C,
which are subdivision lots of Lot No. 1846-B. As a result TCT No. 1785 was
cancelled and TCT Nos. 2551 and 2552 were issued to Corcuera on August 10,
1946. Lot No. 1846- D was also sold by Ang Bansing to Corcuera.

14. Other portions of Lot No. 1846-B were sold by Ang Bansing to Juan Cruz. Lots
Nos. 1846-C and 1846-E, the remaining lots, registered in the name of Ang
Bansing as shown in TCT No. T-2601 (Exh. L), were not alienated by him.

15. On September 25, 1965, President Diosdado Macapagal issued

Proclamation No. 459, transferring to the Mindanao 'Development Authority (a
corporate body created by Republic Act No. 3034), "subject to private rights, if
any", eight parcels of land forming part of the Government's private domain.
Among those parcels was Parcel 6, Lot No. 1846-C, Psd-16952, the herein
disputed lot, with an area of 61,107 square meters, bounded on the west by the
national highway, on the north by Lot No. 1846-D, on the east by the Gulf of
Davao and on the south by Lot No. 564- A. Thus, Lot No. 1846-C became a part
of the Port Area Reservation from Sasa to Panacan Davao City.

16. In a letter dated March 31, 1969, counsel for the Mindanao Development
Authority requested Ang Bansing to surrender the owner's duplicate of TCT No. T-
2601 so that Lot No. 1846-C could be transferred to the said government agency
(Exh. K). Ang Bansing did not heed the demand.

17. On April 11, 1969, the Mindanao Development Authority sued Ang Bansing
for the reconveyance of Lot No. 1846-C. After trial (during which Ang Banging
did not testify), the trial court held that Ang Bansing held Lot No. 1846-C in trust
for the State and that the prescriptive period for recovering the Lot from Ang
Bansing started only in 1968 when Ang Banging allegedly repudiated the trust.

18. The trial court cancelled Ang Bansing's title and directed the register of
deeds to issue a new title to the Mindanao Development Authority for Lot No.
1846-C. Ang Bansing appealed to the Court of Appeals.

19. That Court in its decision dated December 27, 1977, reversing the trial court's
decision, held that Ang Banging was the owner of the disputed lot. It ruled that
even if Ang Bansing held Lot No. 1846-C in express trust, the trust was Innovated"
by subsequent circumstances and that the sale of Lot No. 1846-C to the
Commonwealth of the Philippines was not consummated because Ang Banging
sold Lot No. 1846-A and portions of Lot No. 1846-B to Juan Cruz in Lieu of Lot No.
1846-C.
20. The Appellate Court also held that the Mindanao Development Authority
had no cause of action for reconveyance because it had no privity with Ang
Bansing and that the trust, if any, was an implied or constructive trust and the
action based on that kind of trust was barred by prescription.

21. Presidential Decree No.690,which took effect on April 22, 1975, established
the Southern Philippines Development Administration and abolished the
Mindanao Development Authority. The latter's assets were transferred to the
Administration.

I am of the opinion that Ang Banging 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 twenty-three days after TCT No. 1783 was issued to him
for that lot.
As already noted, Ang Bansing in that affidavit swore that he intended to cede
and transfer that rot to Juan Cruz after the survey (Exh. C). That sworn statement
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 (Exh. A).

The said statements create an express trust for Lot No. 1846-C in favor of Juan
Cruz and his successors-in-interest or assignees. "No particular words are required
for the creation of an express trust, it being sufficient that a trust is clearly
intended" (Art. 1444, Civil Code).

It is significant that, while Ang Bansing sold Lots Nos. 1846-A, 1846-B and 1846-D
to Cruz and Corcuera, he did not touch at all Lot No. 1846-C. He did not
alienate that lot because he knew that it was not his property and that it
belonged to the State.

Equally significant and credible is the trial court's finding that it was only in 1968
that Ang Bansing laid claim to Lot No. 1846-C through Rufino Boncayao, a
surveyor who worked in the Davao City engineer's office and who discovered
that the title to the lot had not yet been placed in the name of the
Commonwealth of the Philippines.

The trial court found that Boncayao, as the agent of Ang Banging and with the
advice and backing of Vicente C. Garcia, Ang Bansing's lawyer, claimed that
Ang Bansing was the true owner of Lot No. 1846-C. 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, L-19872,
December 3,1974, 61 SCRA 284, 299).

The defense of prescription cannot be set up in an action to recover property

held in trust for the benefit of another (Sevilla vs. De los Angeles, 97 Phil. 875).

Property held in trust can be recovered by the beneficiary regardless of the

lapse of time (Marabilles vs. Quito 100 Phil. 64; Bancairen vs. Diones, 98 Phil. 122,
126; Juan vs. Zuniga 114 Phil. 1163; Vda. de Jacinto vs. Vda. de Jacinto, 115 Phil.
363, 370). Prescription in the case of express trusts can be invoked only from the
time the trust is repudiated (Tamayo vs. Callejo, 68 O.G. 8661, 46 SCRA 27,32).

And a trustee who takes a Torrens title in his name for the land held in trust
cannot repudiate the trust by relying on the registration. That is one of the
limitations upon the finality of a decree of title Sotto vs. Teves. L-38018, October
31, 1978, 86 SCRA 154, 178; Alvarez vs. Espiritu, 122 Phil. 229, 235).

The rule, that an action for reconveyance prescribes in ten years, applies to an
implied trust, not to an express trust (Carantes vs. Court of Appeals, L-33360, April
25, 1977, 76 SCRA 514).

So, as a general rule a trust estate (in an express trust) is exempt from the
operation of the statute of limitations. The exception is when the trustee
repudiates the trust in which case the trustee may acquire the trust estate by
prescription. The repudiation must be known to the cestui que trust and must be
direct, clear, open and equivocal. (Callejon Salinas vs. Roman Tuason and
Moreno Roman, 55 Phil. 729; Palma vs. Cristobal, 77 Phil. 712; Valdez vs. Olorga,
L-22571, May 25, 1973, 51 SCRA 71.)

One who acquires a Torrens title in his own name to property which he is
administering for himself and his brothers and sisters as heirs in common by
descent from a common ancestor may be compelled to surrender to each of
his co-heirs his appropriate share". A partition proceeding is an appropriate
remedy to enforce this right. (Castro vs. Castro, 57 Phil. 675). An equitable action
for reconveyance is also a proper remedy (Laguna vs. Levantino 71 Phil. 566;
Sumira vs. Vistan, 74 Phil. 138).

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 Vina vs. Government of the
P.I., 65 Phil. 262, 265; Republic vs. Ruiz, L-23712, April 29, 1968, 23 SCRA 348).

The maxim is nullum tempus occurrit regi or nullum tempus occurrit

reipublicae (lapse of time does not bar the right of the crown or lapse of time
does not bar the commonwealth). The rule is now embodied in article 1108(4) of
the Civil Code.

It is a maxim of great antiquity in English law. The best reason for its existence is
the great public policy of preserving public rights and property from damage
and loss through the negligence of public officers. (34 Am Jur. 301; Ballentines's
Law Dictionary, p. 891; U.S. vs. Nashville, Chattanooga & St. Louis Railway Co.,
118 U.S. 120,125).

Thus, the right of reversion or reconveyance to the State of lands fraudulently

registered or not susceptible of private appropriation or acquisition does not
prescribe (Martines vs. Court of Appeals, L-31271, April 29, 1974, 56 SCRA 647,
655; Republic vs. Ramos, 117 Phil. 45, 49).

The government officials concerned were negligent in not intervening in the

land registration proceeding or in not promptly asking Ang Banging 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).

I vote to reverse and set aside the decision of the Court of Appeals and to affirm
the trial court's decision with the modification that the title should be issued to
the Southern Philippines Development Administration.
Footnotes
1 Record on Appeal, pp. 12-16, 85.
2 Id, pp. 90-91.
3 Id, pp. 17-23,86.
4 Id, pp. 54-57, 86.
5 Id, p. 33.
6 Id, p. 90.
7 Id, pp. 91-92.
8 Id, pp. 26-36, 88.
9 Id, pp. 89-90.
10 Id, pp. 2-12.
11 Id, pp. 37-54.
12 Id, pp. 185-198.
13 Rollo, pp. 44-54.
14 Art. 1441, Civil Code.
15 Sec. 31, Trusts, 76 Am Jr 2d, pp, 278-279.
16 Sec.35,Trusts,76 Am Jur 2d.281.
17 Warner vs. Burlington Fed. Sav. & L. Asso., 168 ALR 1265, 49 A2d 93.
18 Bogert on Trusts and Trustees, Sec. 48.
19 Id, Sec. 46.
20 11 Phil. 1267.
21 Record on Appeal, p. 189.
22 Rollo, p. 35.
23 Record on Appeal, pp. 59-60.
24 Diaz vs. Gorricho 103 Phil. 261.
25 Art. 1456, Civil Code.
26 Gayondato vs. Treasurer of the P.I., 49 Phil. 244.
27 Gonzales vs. Jimenez, 121 Phil. 84.

28 Escay vs. Court of Appeals, L-37504, Dec. 18, 1974, 61 SCRA 369, and other
cases cited therein.

29 Buenaventura vs. David, 37 Phil. 435; Ramos vs. Ramos, L-19872, Dec. 3, 1974,
61 SCRA 284.