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HEIRS OF TRANQUILINO LABISTE v HEIRS OF JOSE LABISTE ordinary action and the reconstituted title was to be

FACTS: deposited w/ Clerk of Court for 60 days to allow


 On 29 Sep 1919, the late Epifanio Labiste, on his own and on behalf petitioners to file an action for reconveyance and to
of his siblings who were the heirs of Jose Labiste, purchased from annotate a notice of lis pendens.
the Bureau of Lands (BOL) Lot 1054 of Banilad Friar Lands Estate  Register of Deeds of Cebu City issued the reconstituted title, TCT
o Area: 13,308 sqm, at Guadalupe, Cebu City for P36.00. RT-7853, in the name of Epifanio Labiste, married to Tomasa
o 9 June 1924: then BOL Dir. Vargas executed Deed of Conveyance Mabitad, his siblings, heirs of Jose Labiste on 14 Dec 1994.
12536 selling Lot1054 to Epifanio and siblings  Respondents did not honor the compromise agreement.
 After full payment of purchase price but prior to issuance of deed  Petitioners filed a complaint for annulment of title seeking the
of conveyance, Epifanio executed an Affidavit (Affidavit of Epifanio) reconveyance of property and damages on Jan 1995, docketed as
in Spanish on 10 July 1923 affirming that he, as one of the heirs of Civil Case CEB-16943, w/ RTC of Cebu City.
Jose, and his uncle and petitioners predecessor-in-interest, o Respondents claimed that the Affidavit of Epifanio and
Tranquilino Labiste, then co-owned Lot 1054 because the money the Calig-onan sa Panagpalit were forgeries and that
that was paid to the government came from the two of them. petitioners action had long prescribed or barred by laches.
 Tranquilino &heirs of Jose continued to hold the property jointly.  RTC on 23 Aug1999 ruled in favor of petitioners:
 In 1928, Register of Deeds of Cebu City issued OCT 3878 for Lot o RTC found that documents presented by petitioners are genuine as
1054. On 2 May 1928, Engineer Bunagan, Deputy Public Land ancient documents (valid and enforceable)
Surveyor, subdivided Lot 1054 into 2 lots (6,664 sqm each): o the action had not prescribed as the complaint was filed about a
o Lot 1054-A for Tranquilino and Lot 1054-B for Epifanio. year after the reconstitution of the title by respondents. The judicial
o subdivision plan prepared by Engr. Bunagan approved by Jose P. reconstitution was even opposed by petitioners until a compromise
Dans, Acting Director of Lands on 28 Oct 1928. agreement was reached by the parties and approved by RTC which
 On 18 Oct1939, the heirs of Tranquilino purchased the 1/2 interest ordered the reconstitution.
o the reconstituted title did not give any more right to respondents
of the heirs of Jose over Lot 1054 for P300.00,
than what their predecessors-in-interest had as it is limited to the
o as evidenced by the Calig-onan sa Panagpalit executed by reconstitution of the certificate as it stood at the time of its loss or
the parties in the Visayan dialect. destruction.
o Tranquilino heirs immediately took possession of entire lot.  On appeal, CA, while affirming petitioners right to the property,
 When WWII broke out, heirs of Tranquilino fled Cebu City. When reversed RTCs decision on the ground of prescription and laches.
they came back they found their homes and possessions destroyed. o Citing, Article 1144 of the Civil Code, it held that
 Records in Office of Register of Deeds, Office of the City Assessor petitioners cause of action had prescribed for the action
and other government offices were also destroyed during the war. must be brought within 10 years from the time the right of
 Squatters have overrun the entire property, such that neither action accrues upon the written contract
petitioners nor respondents possess it. o the lapse of time to file the action constitutes neglect on
 In Oct 1993, petitioners learned that one of the respondents, petitioners part so the principle of laches is applicable.
Asuncion Labiste, had filed on 17 Sep 1993 a petition for  Hence, the present petition.
reconstitution of title over Lot 1054. ISSUES + RULING:
o Petitioners opposed the petition at first but by a 1. WON petitioners cause of action has prescribed. NO
compromise agreement on 25 March 1994, they withdrew  The genuineness and authenticity of the Affidavit of Epifanio and
their opposition to expedite the reconstitution process. the Calig-onan sa Panagpalit are beyond cavil.
o Compromise Agreement: petitioners to be given time to o Findings of fact of RTC affirmed by CA are binding on SC.
file a complaint so that the issues could be litigated in an
 CA erred in applying rules on prescription and laches because what 1993. Since, petitioners filed their complaint in Jan 1995,
is involved in the present case is an express trust. their cause of action has not yet prescribed, laches cannot
 Trust is the right to the beneficial enjoyment of property, the legal be attributed to them.
title to which is vested in another.  Laches is a creation of equity.Laches cannot be used to prevent the
o It is a fiduciary relationship that obliges the trustee to deal rightful owners of a property from recovering what has been
with the property for the benefit of the beneficiary. fraudulently registered in the name of another. The remedy
o Trust relations between parties may be express or implied. of laches is, therefore, unavailing in this case.
o express trust is created by the intention of the trustor or of 2. WON action to compel respondents to execute a public deed of
the parties. sale has prescribed. YES
o implied trust comes into being by operation of law.  However, to recover the other half of the property covered by the
 Express trusts are created by direct and positive acts of the parties, private Calig-onan sa Panagpalit and to have it registered on the
by some writing or deed, or will, or by words either expressly or title of the property, petitioners should have filed an action to
impliedly evincing an intention to create a trust. compel respondents, as heirs of the sellers in the contract, to
 Art 1444 CivilCode: "no particular words are required for the execute a public deed of sale.
creation of an express trust;sufficient that a trust is intended."  A conveyance of land made in a private document does not affect
 The Affidavit of Epifanio is in the nature of a trust agreement. its validity. Art 1358,like its forerunner Art 1280 of the Civil Code
o Epifanio affirmed that the lot brought in his name was co-owned of Spain, does not require the accomplishment of the acts or
by him, as one of the heirs of Jose, and his uncle Tranquilino. And contracts in a public instrument to validate the act or contract but
by agreement, each of them has been in possession of half of the only to insure its efficacy, so that after the existence of said
property. contract has been admitted, the party bound may be compelled to
o Their arrangement was corroborated by the subdivision plan
execute the proper document.
 As such, prescription and laches will run only from the time the  But even assuming that such action was filed by petitioners, the
express trust is repudiated. same had already prescribed.
 For acquisitive prescription to bar the action of the beneficiary against the
trustee in an express trust for the recovery of the property held in trust it
 Only laws existing at the time of the execution of a contract are
must be shown that: applicable thereto and not later statutes, unless the latter are
o (a) the trustee has performed unequivocal acts of repudiation specifically intended to have retroactive effect.
amounting to an ouster of the cestui que trust; o It is the Old Code of Civil Procedure (Act No. 190) which
o (b) such positive acts of repudiation have been made known to applies in this case since the Calig-onan sa Panagpalit was
the cestui que trust, and executed on 18 Oct 1939 while the New Civil Code took
o (c) the evidence thereon is clear and conclusive. effect only on 30 Aug 1950. And sec 43 of Act No. 190, like
 Respondents cannot rely on the fact that the Torrens title was its counterpart Art1144 of the New Civil Code, provides
issued in the name of Epifanio and the other heirs of Jose. that action upon a written contract must be filed within 10
o A trustee who obtains a Torrens title over property held in years.
trust by him for another cannot repudiate the trust by PETITIONPARTIALLY GRANTED. CAREVERSED.RTCREINSTATED wi
relying on the registration. th MODIFICATION petitioners are DECLARED absolute owners of ½ of
o The rule requires a clear repudiation of the trust duly Lot 1054 or Lot 1054-A. Register of Deeds ORDERED to CANCEL TCT
communicated to the beneficiary. RT-7853 in part and issue a new TCT to petitioners, heirs of
The only act that can be construed as repudiation was Tranquilino Labiste, covering Lot 1054-A.
when respondents filed petition for reconstitution in Oct

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