well as Fifty Thousand Pesos (P50,000.00) as broker’s commission.

5 Lim also issued in the name

of Saban four postdated checks in the aggregate amount of Two Hundred Thirty Six Thousand
Seven Hundred Forty Three Pesos (P236,743.00). These checks were Bank of the Philippine
Islands (BPI) Check No. 1112645 dated June 12, 1994 for P25,000.00; BPI Check No. 1112647
dated June 19, 1994 for P18,743.00; BPI Check No. 1112646 dated June 26, 1994
for P25,000.00; and Equitable PCI Bank Check No. 021491B dated June 20, 1994
for P168,000.00.

Subsequently, Ybañez sent a letter dated June 10, 1994 addressed to Lim. In the letter Ybañez
asked Lim to cancel all the checks issued by her in Saban’s favor and to "extend another partial
SECOND DIVISION
payment" for the lot in his (Ybañez’s) favor. 6

G.R. No. 163720 December 16, 2004

After the four checks in his favor were dishonored upon presentment, Saban filed a Complaint for
collection of sum of money and damages against Ybañez and Lim with the Regional Trial Court
GENEVIEVE LIM, petitioner, (RTC) of Cebu City on August 3, 1994.7 The case was assigned to Branch 20 of the RTC.
vs.
FLORENCIO SABAN, respondents.
In his Complaint, Saban alleged that Lim and the Spouses Lim agreed to purchase the lot
for P600,000.00, i.e., with a mark-up of Four Hundred Thousand Pesos (P400,000.00) from the
price set by Ybañez. Of the total purchase price of P600,000.00, P200,000.00 went to
Ybañez, P50,000.00 allegedly went to Lim’s agent, and P113,257.00 was given to Saban to cover
taxes and other expenses incidental to the sale. Lim also issued four (4) postdated checks 8 in
DECISION favor of Saban for the remaining P236,743.00.9

Saban alleged that Ybañez told Lim that he (Saban) was not entitled to any commission for the
sale since he concealed the actual selling price of the lot from Ybañez and because he was not a
licensed real estate broker. Ybañez was able to convince Lim to cancel all four checks.

TINGA, J.:
Saban further averred that Ybañez and Lim connived to deprive him of his sales commission by
withholding payment of the first three checks. He also claimed that Lim failed to make good the
Before the Court is a Petition for Review on Certiorari assailing the Decision1 dated October 27, fourth check which was dishonored because the account against which it was drawn was closed.
2003 of the Court of Appeals, Seventh Division, in CA-G.R. V No. 60392. 2
In his Answer, Ybañez claimed that Saban was not entitled to any commission because he
The late Eduardo Ybañez (Ybañez), the owner of a 1,000-square meter lot in Cebu City (the "lot"), concealed the actual selling price from him and because he was not a licensed real estate broker.
entered into an Agreement and Authority to Negotiate and Sell (Agency Agreement) with
respondent Florencio Saban (Saban) on February 8, 1994. Under the Agency Agreement, Ybañez
Lim, for her part, argued that she was not privy to the agreement between Ybañez and Saban, and
authorized Saban to look for a buyer of the lot for Two Hundred Thousand Pesos (P200,000.00)
that she issued stop payment orders for the three checks because Ybañez requested her to pay
and to mark up the selling price to include the amounts needed for payment of taxes, transfer of
the purchase price directly to him, instead of coursing it through Saban. She also alleged that she
title and other expenses incident to the sale, as well as Saban’s commission for the sale. 3
agreed with Ybañez that the purchase price of the lot was only P200,000.00.

Through Saban’s efforts, Ybañez and his wife were able to sell the lot to the petitioner Genevieve
Ybañez died during the pendency of the case before the RTC. Upon motion of his counsel, the
Lim (Lim) and the spouses Benjamin and Lourdes Lim (the Spouses Lim) on March 10, 1994. The
trial court dismissed the case only against him without any objection from the other parties. 10
price of the lot as indicated in the Deed of Absolute Sale is Two Hundred Thousand Pesos
(P200,000.00).4 It appears, however, that the vendees agreed to purchase the lot at the price of
Six Hundred Thousand Pesos (P600,000.00), inclusive of taxes and other incidental expenses of On May 14, 1997, the RTC rendered its Decision11 dismissing Saban’s complaint, declaring the
the sale. After the sale, Lim remitted to Saban the amounts of One Hundred Thirteen Thousand four (4) checks issued by Lim as stale and non-negotiable, and absolving Lim from any liability
Two Hundred Fifty Seven Pesos (P113,257.00) for payment of taxes due on the transaction as towards Saban.
Saban appealed the trial court’s Decision to the Court of Appeals.
On October 27, 2003, the appellate court promulgated its Decision12 reversing the trial court’s
ruling. It held that Saban was entitled to his commission amounting to P236,743.00.13
The Court of Appeals ruled that Ybañez’s revocation of his contract of agency with Saban was
invalid because the agency was coupled with an interest and Ybañez effected the revocation in
bad faith in order to deprive Saban of his commission and to keep the profits for himself. 14
The appellate court found that Ybañez and Lim connived to deprive Saban of his commission. It
declared that Lim is liable to pay Saban the amount of the purchase price of the lot corresponding
to his commission because she issued the four checks knowing that the total amount thereof
corresponded to Saban’s commission for the sale, as the agent of Ybañez. The appellate court
further ruled that, in issuing the checks in payment of Saban’s commission, Lim acted as an
accommodation party. She signed the checks as drawer, without receiving value therefor, for the
purpose of lending her name to a third person. As such, she is liable to pay Saban as the holder
for value of the checks.15
Lim filed a Motion for Reconsideration of the appellate court’s Decision, but her Motion was denied
by the Court of Appeals in a Resolution dated May 6, 2004.16
Not satisfied with the decision of the Court of Appeals, Lim filed the present petition.
Lim argues that the appellate court ignored the fact that after paying her agent and remitting to
Saban the amounts due for taxes and transfer of title, she paid the balance of the purchase price
directly to Ybañez.17
She further contends that she is not liable for Ybañez’s debt to Saban under the Agency
Agreement as she is not privy thereto, and that Saban has no one but himself to blame for
consenting to the dismissal of the case against Ybañez and not moving for his substitution by his
heirs.18
Lim also assails the findings of the appellate court that she issued the checks as an
accommodation party for Ybañez and that she connived with the latter to deprive Saban of his
commission.19
Lim prays that should she be found liable to pay Saban the amount of his commission, she should
only be held liable to the extent of one-third (1/3) of the amount, since she had two co-vendees
(the Spouses Lim) who should share such liability.20
In his Comment, Saban maintains that Lim agreed to purchase the lot for P600,000.00, which
consisted of the P200,000.00 which would be paid to Ybañez, the P50,000.00 due to her broker,
the P113,257.00 earmarked for taxes and other expenses incidental to the sale and Saban’s
commission as broker for Ybañez. According to Saban, Lim assumed the obligation to pay him his
commission. He insists that Lim and Ybañez connived to unjustly deprive him of his commission
from the negotiation of the sale.21
The issues for the Court’s resolution are whether Saban is entitled to receive his commission from
the sale; and, assuming that Saban is entitled thereto, whether it is Lim who is liable to pay Saban
his sales commission.
The Court gives due course to the petition, but agrees with the result reached by the Court of
Appeals.
The Court affirms the appellate court’s finding that the agency was not revoked since Ybañez
requested that Lim make stop payment orders for the checks payable to Saban only after the
consummation of the sale on March 10, 1994. At that time, Saban had already performed his
obligation as Ybañez’s agent when, through his (Saban’s) efforts, Ybañez executed the Deed of
Absolute Sale of the lot with Lim and the Spouses Lim.
To deprive Saban of his commission subsequent to the sale which was consummated through his
efforts would be a breach of his contract of agency with Ybañez which expressly states that Saban
would be entitled to any excess in the purchase price after deducting the P200,000.00 due to
Ybañez and the transfer taxes and other incidental expenses of the sale. 22
In Macondray & Co. v. Sellner,23 the Court recognized the right of a broker to his commission for
finding a suitable buyer for the seller’s property even though the seller himself consummated the
sale with the buyer.24 The Court held that it would be in the height of injustice to permit the principal
to terminate the contract of agency to the prejudice of the broker when he had already reaped the
benefits of the broker’s efforts.
In Infante v. Cunanan, et al.,25 the Court upheld the right of the brokers to their commissions
although the seller revoked their authority to act in his behalf after they had found a buyer for his
properties and negotiated the sale directly with the buyer whom he met through the brokers’
efforts. The Court ruled that the seller’s withdrawal in bad faith of the brokers’ authority cannot
unjustly deprive the brokers of their commissions as the seller’s duly constituted agents.
The pronouncements of the Court in the aforecited cases are applicable to the present case,
especially considering that Saban had completely performed his obligations under his contract of
agency with Ybañez by finding a suitable buyer to preparing the Deed of Absolute Sale between
Ybañez and Lim and her co-vendees. Moreover, the contract of agency very clearly states that
Saban is entitled to the excess of the mark-up of the price of the lot after deducting Ybañez’s
share of P200,000.00 and the taxes and other incidental expenses of the sale.
However, the Court does not agree with the appellate court’s pronouncement that Saban’s agency
was one coupled with an interest. Under Article 1927 of the Civil Code, an agency cannot be
revoked if a bilateral contract depends upon it, or if it is the means of fulfilling an obligation already
contracted, or if a partner is appointed manager of a partnership in the contract of partnership and
his removal from the management is unjustifiable. Stated differently, an agency is deemed as one
coupled with an interest where it is established for the mutual benefit of the principal and of the
agent, or for the interest of the principal and of third persons, and it cannot be revoked by the
principal so long as the interest of the agent or of a third person subsists. In an agency coupled
with an interest, the agent’s interest must be in the subject matter of the power conferred and not
merely an interest in the exercise of the power because it entitles him to compensation. When an
agent’s interest is confined to earning his agreed compensation, the agency is not one coupled
with an interest, since an agent’s interest in obtaining his compensation as such agent is an
ordinary incident of the agency relationship.26
Saban’s entitlement to his commission having been settled, the Court must now determine
whether Lim is the proper party against whom Saban should address his claim.
Saban’s right to receive compensation for negotiating as broker for Ybañez arises from the Agency
Agreement between them. Lim is not a party to the contract. However, the record reveals that she
had knowledge of the fact that Ybañez set the price of the lot at P200,000.00 and that
the P600,000.00—the price agreed upon by her and Saban—was more than the amount set by
Ybañez because it included the amount for payment of taxes and for Saban’s commission as
broker for Ybañez.
According to the trial court, Lim made the following payments for the lot: P113,257.00 for
taxes, P50,000.00 for her broker, and P400.000.00 directly to Ybañez, or a total of Five Hundred
Sixty Three Thousand Two Hundred Fifty Seven Pesos (P563,257.00).27 Lim, on the other hand,
claims that on March 10, 1994, the date of execution of the Deed of Absolute Sale, she paid
directly to Ybañez the amount of One Hundred Thousand Pesos (P100,000.00) only, and gave to
Saban P113,257.00 for payment of taxes and P50,000.00 as his commission,28 and One Hundred
Thirty Thousand Pesos (P130,000.00) on June 28, 1994,29 or a total of Three Hundred Ninety
Three Thousand Two Hundred Fifty Seven Pesos (P393,257.00). Ybañez, for his part,
acknowledged that Lim and her co-vendees paid him P400,000.00 which he said was the full
amount for the sale of the lot.30 It thus appears that he received P100,000.00 on March 10, 1994,
acknowledged receipt (through Saban) of the P113,257.00 earmarked for taxes and P50,000.00
for commission, and received the balance of P130,000.00 on June 28, 1994. Thus, a total
of P230,000.00 went directly to Ybañez. Apparently, although the amount actually paid by Lim
was P393,257.00, Ybañez rounded off the amount to P400,000.00 and waived the difference.
Lim’s act of issuing the four checks amounting to P236,743.00 in Saban’s favor belies her claim
that she and her co-vendees did not agree to purchase the lot at P600,000.00. If she did not agree
thereto, there would be no reason for her to issue those checks which is the balance
of P600,000.00 less the amounts of P200,000.00 (due to Ybañez), P50,000.00 (commission), and
the P113,257.00 (taxes). The only logical conclusion is that Lim changed her mind about agreeing
to purchase the lot at P600,000.00 after talking to Ybañez and ultimately realizing that Saban’s
commission is even more than what Ybañez received as his share of the purchase price as
vendor. Obviously, this change of mind resulted to the prejudice of Saban whose efforts led to the
completion of the sale between the latter, and Lim and her co-vendees. This the Court cannot
countenance.
The ruling of the Court in Infante v. Cunanan, et al., cited earlier, is enlightening for the facts
therein are similar to the circumstances of the present case. In that case, Consejo Infante asked
Jose Cunanan and Juan Mijares to find a buyer for her two lots and the house built thereon for
Thirty Thousand Pesos (P30,000.00) . She promised to pay them five percent (5%) of the
purchase price plus whatever overprice they may obtain for the property. Cunanan and Mijares
offered the properties to Pio Noche who in turn expressed willingness to purchase the properties.
Cunanan and Mijares thereafter introduced Noche to Infante. However, the latter told Cunanan
and Mijares that she was no longer interested in selling the property and asked them to sign a
document stating that their written authority to act as her agents for the sale of the properties was
already cancelled. Subsequently, Infante sold the properties directly to Noche for Thirty One
Thousand Pesos (P31,000.00). The Court upheld the right of Cunanan and Mijares to their
commission, explaining that—
…[Infante] had changed her mind even if respondent had found a buyer who was willing
to close the deal, is a matter that would not give rise to a legal consequence if [Cunanan
and Mijares] agreed to call off the transaction in deference to the request of [Infante]. But
the situation varies if one of the parties takes advantage of the benevolence of the other
and acts in a manner that would promote his own selfish interest. This act is unfair as
would amount to bad faith. This act cannot be sanctioned without according the party
prejudiced the reward which is due him. This is the situation in which [Cunanan and
Mijares] were placed by [Infante]. [Infante] took advantage of the services rendered by
[Cunanan and Mijares], but believing that she could evade payment of their commission,
she made use of a ruse by inducing them to sign the deed of cancellation….This act of
subversion cannot be sanctioned and cannot serve as basis for [Infante] to escape
payment of the commission agreed upon.31
The appellate court therefore had sufficient basis for concluding that Ybañez and Lim connived to
deprive Saban of his commission by dealing with each other directly and reducing the purchase
price of the lot and leaving nothing to compensate Saban for his efforts.
Considering the circumstances surrounding the case, and the undisputed fact that Lim had not yet
paid the balance of P200,000.00 of the purchase price of P600,000.00, it is just and proper for her
to pay Saban the balance of P200,000.00.
Furthermore, since Ybañez received a total of P230,000.00 from Lim, or an excess of P30,000.00
from his asking price of P200,000.00, Saban may claim such excess from Ybañez’s estate, if that
remedy is still available,32 in view of the trial court’s dismissal of Saban’s complaint as against
Ybañez, with Saban’s express consent, due to the latter’s demise on November 11, 1994. 33
The appellate court however erred in ruling that Lim is liable on the checks because she issued
them as an accommodation party. Section 29 of the Negotiable Instruments Law defines an
accommodation party as a person "who has signed the negotiable instrument as maker, drawer,
acceptor or indorser, without receiving value therefor, for the purpose of lending his name to some
other person." The accommodation party is liable on the instrument to a holder for value even
though the holder at the time of taking the instrument knew him or her to be merely an
accommodation party. The accommodation party may of course seek reimbursement from the
party accommodated.34
As gleaned from the text of Section 29 of the Negotiable Instruments Law, the accommodation
party is one who meets all these three requisites, viz: (1) he signed the instrument as maker,
drawer, acceptor, or indorser; (2) he did not receive value for the signature; and (3) he signed for
the purpose of lending his name to some other person. In the case at bar, while Lim signed as
drawer of the checks she did not satisfy the two other remaining requisites.
The absence of the second requisite becomes pellucid when it is noted at the outset that Lim
issued the checks in question on account of her transaction, along with the other purchasers, with
Ybañez which was a sale and, therefore, a reciprocal contract. Specifically, she drew the checks in
payment of the balance of the purchase price of the lot subject of the transaction. And she had to
pay the agreed purchase price in consideration for the sale of the lot to her and her co-vendees. In
other words, the amounts covered by the checks form part of the cause or consideration from
Ybañez’s end, as vendor, while the lot represented the cause or consideration on the side of Lim,
as vendee.35 Ergo, Lim received value for her signature on the checks.

Neither is there any indication that Lim issued the checks for the purpose of enabling Ybañez, or
any other person for that matter, to obtain credit or to raise money, thereby totally debunking the
presence of the third requisite of an accommodation party.

WHEREFORE, in view of the foregoing, the petition is DISMISSED.

SO ORDERED.

Puno, J., Chairman, Austria-Martinez, Chico-Nazario, JJ. concur.

Callejo, Sr., on leave.
 Republic of the Philippines
SUPREME COURT
SECOND DIVISION
G.R. No. 156015. August 11, 2005
REPUBLIC OF THE PHILIPPINES, represented by LT. GEN. JOSE M. CALIMLIM, in his
capacity as former Chief of the Intelligence Service, Armed Forces of the Philippines
(ISAFP), and former Commanding General, Presidential Security Group (PSG), and MAJ.
DAVID B. DICIANO, in his capacity as an Officer of ISAFP and former member of the
PSG, Petitioners,
vs.
HON. VICTORINO EVANGELISTA, in his capacity as Presiding Judge, Regional Trial Court,
Branch 223, Quezon City, and DANTE LEGASPI, represented by his attorney-in-fact, Paul
Gutierrez, Respondent.
DECISION
PUNO, J.:
The case at bar stems from a complaint for damages, with prayer for the issuance of a writ of
preliminary injunction, filed by private respondent Dante Legaspi, through his attorney-in-fact Paul
Gutierrez, against petitioners Gen. Jose M. Calimlim, Ciriaco Reyes and Maj. David Diciano before
the Regional Trial Court (RTC) of Quezon City. 1
The Complaint alleged that private respondent Legaspi is the owner of a land located in Bigte,
Norzagaray, Bulacan. In November 1999, petitioner Calimlim, representing the Republic of the
Philippines, and as then head of the Intelligence Service of the Armed Forces of the Philippines
and the Presidential Security Group, entered into a Memorandum of Agreement (MOA) with one
Ciriaco Reyes. The MOA granted Reyes a permit to hunt for treasure in a land in Bigte,
Norzagaray, Bulacan. Petitioner Diciano signed the MOA as a witness. 2 It was further alleged that
thereafter, Reyes, together with petitioners, started, digging, tunneling and blasting works on the
said land of Legaspi. The complaint also alleged that petitioner Calimlim assigned about 80
military personnel to guard the area and encamp thereon to intimidate Legaspi and other
occupants of the area from going near the subject land.
On February 15, 2000, Legaspi executed a special power of attorney (SPA) appointing his
nephew, private respondent Gutierrez, as his attorney-in-fact. Gutierrez was given the power to
deal with the treasure hunting activities on Legaspi’s land and to file charges against those who
may enter it without the latter’s authority.3 Legaspi agreed to give Gutierrez 40% of the treasure
that may be found in the land.
On February 29, 2000, Gutierrez filed a case for damages and injunction against petitioners for
illegally entering Legaspi’s land. He hired the legal services of Atty. Homobono Adaza. Their
contract provided that as legal fees, Atty. Adaza shall be entitled to 30% of Legaspi’s share in
whatever treasure may be found in the land. In addition, Gutierrez agreed to pay Atty. Adaza
₱5,000.00 as appearance fee per court hearing and defray all expenses for the cost of the
litigation.4 Upon the filing of the complaint, then Executive Judge Perlita J. Tria Tirona issued a 72-
hour temporary restraining order (TRO) against petitioners.
The case5 was subsequently raffled to the RTC of Quezon City, Branch 223, then presided by
public respondent Judge Victorino P. Evangelista. On March 2, 2000, respondent judge issued
another 72-hour TRO and a summary hearing for its extension was set on March 7, 2000.
On March 14, 2000, petitioners filed a Motion to Dismiss6 contending: first, there is no real party-in-
interest as the SPA of Gutierrez to bring the suit was already revoked by Legaspi on March 7,
2000, as evidenced by a Deed of Revocation, 7 and, second, Gutierrez failed to establish that the
alleged armed men guarding the area were acting on orders of petitioners. On March 17, 2000,
petitioners also filed a Motion for Inhibition8 of the respondent judge on the ground of alleged
partiality in favor of private respondent.
On March 23, 2000, the trial court granted private respondent’s application for a writ of preliminary
injunction on the following grounds: (1) the diggings and blastings appear to have been made on
the land of Legaspi, hence, there is an urgent need to maintain the status quo to prevent serious
damage to Legaspi’s land; and, (2) the SPA granted to Gutierrez continues to be valid. 9 The trial
court ordered thus:
WHEREFORE, in view of all the foregoing, the Court hereby resolves to GRANT plaintiff’s
application for a writ of preliminary injunction. Upon plaintiff’s filing of an injunction bond in the
amount of ONE HUNDRED THOUSAND PESOS (₱100,000.00), let a Writ of Preliminary
Injunction issue enjoining the defendants as well as their associates, agents or representatives
from continuing to occupy and encamp on the land of the plaintiff LEGASPI as well as the vicinity
thereof; from digging, tunneling and blasting the said land of plaintiff LEGASPI; from removing
whatever treasure may be found on the said land; from preventing and threatening the plaintiffs
and their representatives from entering the said land and performing acts of ownership; from
threatening the plaintiffs and their representatives as well as plaintiffs’ lawyer.
On even date, the trial court issued another Order 10 denying petitioners’ motion to dismiss and
requiring petitioners to answer the complaint. On April 4, 2000, it likewise denied petitioners’
motion for inhibition.11
On appeal, the Court of Appeals affirmed the decision of the trial court. 12
Hence this petition, with the following assigned errors:
I
WHETHER THE CONTRACT OF AGENCY BETWEEN LEGASPI AND PRIVATE RESPONDENT
GUTIERREZ HAS BEEN EFFECTIVELY REVOKED BY LEGASPI.
II
WHETHER THE COMPLAINT AGAINST PETITIONERS SHOULD BE DISMISSED.
III
WHETHER RESPONDENT JUDGE OUGHT TO HAVE INHIBITED HIMSELF FROM FURTHER
PROCEEDING WITH THE CASE.
We find no merit in the petition.
On the first issue, petitioners claim that the special power of attorney of Gutierrez to represent
Legaspi has already been revoked by the latter. Private respondent Gutierrez, however, contends
that the unilateral revocation is invalid as his agency is coupled with interest.
We agree with private respondent.
Art. 1868 of the Civil Code provides that by the contract of agency, an agent binds himself to
render some service or do something in representation or on behalf of another, known as the
principal, with the consent or authority of the latter.13
A contract of agency is generally revocable as it is a personal contract of representation based on
trust and confidence reposed by the principal on his agent. As the power of the agent to act
depends on the will and license of the principal he represents, the power of the agent ceases
when the will or permission is withdrawn by the principal. Thus, generally, the agency may be
revoked by the principal at will.14
However, an exception to the revocability of a contract of agency is when it is coupled with
interest, i.e., if a bilateral contract depends upon the agency. 15 The reason for its irrevocability is
because the agency becomes part of another obligation or agreement. It is not solely the rights of
the principal but also that of the agent and third persons which are affected. Hence, the law
provides that in such cases, the agency cannot be revoked at the sole will of the principal.
In the case at bar, we agree with the finding of the trial and appellate courts that the agency
granted by Legaspi to Gutierrez is coupled with interest as a bilateral contract depends on it. It is
clear from the records that Gutierrez was given by Legaspi, inter alia, the power to manage
the treasure hunting activities in the subject land; to file any case against anyone who
enters the land without authority from Legaspi; to engage the services of lawyers to carry
out the agency; and, to dig for any treasure within the land and enter into agreements
relative thereto. It was likewise agreed upon that Gutierrez shall be entitled to 40% of
whatever treasure may be found in the land. Pursuant to this authority and to protect Legaspi’s
land from the alleged illegal entry of petitioners, agent Gutierrez hired the services of Atty. Adaza
to prosecute the case for damages and injunction against petitioners. As payment for legal
services, Gutierrez agreed to assign to Atty. Adaza 30% of Legaspi’s share in whatever
treasure may be recovered in the subject land. It is clear that the treasure that may be found in
the land is the subject matter of the agency; that under the SPA, Gutierrez can enter into contract
for the legal services of Atty. Adaza; and, thus Gutierrez and Atty. Adaza have an interest in the
subject matter of the agency, i.e., in the treasures that may be found in the land. This bilateral
contract depends on the agency and thus renders it as one coupled with interest, irrevocable at
the sole will of the principal Legaspi.16 When an agency is constituted as a clause in a bilateral
contract, that is, when the agency is inserted in another agreement, the agency ceases to be
revocable at the pleasure of the principal as the agency shall now follow the condition of the
bilateral agreement.17Consequently, the Deed of Revocation executed by Legaspi has no effect.
The authority of Gutierrez to file and continue with the prosecution of the case at bar is unaffected.
On the second issue, we hold that the issuance of the writ of preliminary injunction is justified. A
writ of preliminary injunction is an ancilliary or preventive remedy that is resorted to by a litigant to
protect or preserve his rights or interests and for no other purpose during the pendency of the
principal action.18 It is issued by the court to prevent threatened or continuous irremediable injury
to the applicant before his claim can be thoroughly studied and adjudicated. 19 Its aim is to preserve
the status quo ante until the merits of the case can be heard fully, upon the applicant’s showing of
two important conditions, viz.: (1) the right to be protected prima facie exists; and, (2) the acts
sought to be enjoined are violative of that right.20
Section 3, Rule 58 of the 1997 Rules of Civil Procedure provides that a writ of preliminary
injunction may be issued when it is established:
(a) that the applicant is entitled to the relief demanded, the whole or part of such relief consists in
restraining the commission or continuance of the act or acts complained of, or in requiring the
performance of an act or acts, either for a limited period or perpetually;
(b) that the commission, continuance or non-performance of the act or acts complained of during
the litigation would probably work injustice to the applicant; or
(c) that a party, court, agency or a person is doing, threatening, or is attempting to do, or is
procuring or suffering to be done, some act or acts probably in violation of the rights of the
applicant respecting the subject of the action or proceeding, and tending to render the judgment
ineffectual.
It is crystal clear that at the hearing for the issuance of a writ of preliminary injunction, mere prima
facie evidence is needed to establish the applicant’s rights or interests in the subject matter of the
main action.21 It is not required that the applicant should conclusively show that there was a
violation of his rights as this issue will still be fully litigated in the main case. 22 Thus, an applicant
for a writ is required only to show that he has an ostensible right to the final relief prayed
for in his complaint. 23
In the case at bar, we find that respondent judge had sufficient basis to issue the writ of
preliminary injunction. It was established, prima facie, that Legaspi has a right to peaceful
possession of his land, pendente lite. Legaspi had title to the subject land. It was likewise
established that the diggings were conducted by petitioners in the enclosed area of Legaspi’s
land. Whether the land fenced by Gutierrez and claimed to be included in the land of
Legaspi covered an area beyond that which is included in the title of Legaspi is a factual
issue still subject to litigation and proof by the parties in the main case for damages. It was
necessary for the trial court to issue the writ of preliminary injunction during the pendency of the
main case in order to preserve the rights and interests of private respondents Legaspi and
Gutierrez.

On the third issue, petitioners charge that the respondent judge lacked the neutrality of an
impartial judge. They fault the respondent judge for not giving credence to the testimony of their
surveyor that the diggings were conducted outside the land of Legaspi. They also claim that
respondent judge’s rulings on objections raised by the parties were biased against them.

We have carefully examined the records and we find no sufficient basis to hold that respondent
judge should have recused himself from hearing the case. There is no discernible pattern of bias
on the rulings of the respondent judge. Bias and partiality can never be presumed. Bare
allegations of partiality will not suffice in an absence of a clear showing that will overcome the
presumption that the judge dispensed justice without fear or favor. 24 It bears to stress again that a
judge’s appreciation or misappreciation of the sufficiency of evidence adduced by the parties, or
the correctness of a judge’s orders or rulings on the objections of counsels during the hearing,
without proof of malice on the part of respondent judge, is not sufficient to show bias or partiality.
As we held in the case of Webb vs. People,25 the adverse and erroneous rulings of a judge on the
various motions of a party do not sufficiently prove bias and prejudice to disqualify him. To be
disqualifying, it must be shown that the bias and prejudice stemmed from an extrajudicial source
and result in an opinion on the merits on some basis other than what the judge learned from his
participation in the case. Opinions formed in the course of judicial proceedings, although
erroneous, as long as based on the evidence adduced, do not prove bias or prejudice. We also
emphasized that repeated rulings against a litigant, no matter how erroneously, vigorously and
consistently expressed, do not amount to bias and prejudice which can be a bases for the
disqualification of a judge.

Finally, the inhibition of respondent judge in hearing the case for damages has become moot and
academic in view of the latter’s death during the pendency of the case. The main case for
damages shall now be heard and tried before another judge.

IN VIEW WHEREOF, the impugned Orders of the trial court in Civil Case No. Q-00-40115, dated
March 23 and April 4, 2000, are AFFIRMED. The presiding judge of the Regional Trial Court of
Quezon City to whom Civil Case No. Q-00-40115 was assigned is directed to proceed with
dispatch in hearing the main case for damages. No pronouncement as to costs.

SO ORDERED.

Austria-Martinez, Callejo, Sr., Tinga, and Chico-Nazario, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-41420 July 10, 1992
CMS LOGGING, INC., petitioner,
vs.
THE COURT OF APPEALS and D.R. AGUINALDO CORPORATION, respondents.
NOCON, J.:
This is a petition for review on certiorari from the decision dated July 31, 1975 of the Court of
Appeals in CA-G.R. No. 47763-R which affirmed in toto the decision of the Court of First Instance
of Manila, Branch VII, in Civil Case No. 56355 dismissing the complaint filed by petitioner CMS
Logging, Inc. (CMS, for brevity) against private respondent D.R. Aguinaldo Corporation
(DRACOR, for brevity) and ordering the former to pay the latter attorney's fees in the amount of
P1,000.00 and the costs.
The facts of the case are as follows: Petitioner CMS is a forest concessionaire engaged in the
logging business, while private respondent DRACOR is engaged in the business of exporting and
selling logs and lumber. On August 28, 1957, CMS and DRACOR entered into a contract of
agency 1 whereby the former appointed the latter as its exclusive export and sales agent for all
logs that the former may produce, for a period of five (5) years. The pertinent portions of the
agreement, which was drawn up by DRACOR, 2 are as follows:
1. SISON [CMS] hereby appoints DRACOR as his sole and exclusive export
sales agent with full authority, subject to the conditions and limitations hereinafter
set forth, to sell and export under a firm sales contract acceptable to SISON, all
logs produced by SISON for a period of five (5) years commencing upon the
execution of the agreement and upon the terms and conditions hereinafter
provided and DRACOR hereby accepts such appointment;
xxx xxx xxx
3. It is expressly agreed that DRACOR shall handle exclusively all negotiations of
all export sales of SISON with the buyers and arrange the procurement and
schedules of the vessel or vessels for the shipment of SISON's logs in
accordance with SISON's written requests, but DRACOR shall not in anyway [sic]
be liable or responsible for any delay, default or failure of the vessel or vessels to
comply with the schedules agreed upon;
xxx xxx xxx
9. It is expressly agreed by the parties hereto that DRACOR shall receive five
(5%) per cent commission of the gross sales of logs of SISON based on F.O.B.
invoice value which commission shall be deducted from the proceeds of any
and/or all moneys received by DRACOR for and in behalf and for the account of
SISON;
By virtue of the aforesaid agreement, CMS was able to sell through DRACOR a total of
77,264,672 board feet of logs in Japan, from September 20, 1957 to April 4, 1962.
About six months prior to the expiration of the agreement, while on a trip to Tokyo, Japan, CMS's
president, Atty. Carlos Moran Sison, and general manager and legal counsel, Atty. Teodoro R.
Dominguez, discovered that DRACOR had used Shinko Trading Co., Ltd. (Shinko for brevity) as
agent, representative or liaison officer in selling CMS's logs in Japan for which Shinko earned a
commission of U.S. $1.00 per 1,000 board feet from the buyer of the logs. Under this
arrangement, Shinko was able to collect a total of U.S. $77,264.67. 3
CMS claimed that this commission paid to Shinko was in violation of the agreement and that it
(CMS) is entitled to this amount as part of the proceeds of the sale of the logs. CMS contended
that since DRACOR had been paid the 5% commission under the agreement, it is no longer
entitled to the additional commission paid to Shinko as this tantamount to DRACOR receiving
double compensation for the services it rendered.
After this discovery, CMS sold and shipped logs valued at U.S. $739,321.13 or
P2,883,351.90, 4 directly to several firms in Japan without the aid or intervention of DRACOR.
CMS sued DRACOR for the commission received by Shinko and for moral and exemplary
damages, while DRACOR counterclaimed for its commission, amounting to P144,167.59, from the
sales made by CMS of logs to Japanese firms. In its reply, CMS averred as a defense to the
counterclaim that DRACOR had retained the sum of P101,167.59 as part of its commission for the
sales made by CMS. 5 Thus, as its counterclaim to DRACOR's counterclaim, CMS demanded
DRACOR return the amount it unlawfully retained. DRACOR later filed an amended counterclaim,
alleging that the balance of its commission on the sales made by CMS was P42,630.82, 6 thus
impliedly admitting that it retained the amount alleged by CMS.
In dismissing the complaint, the trial court ruled that no evidence was presented to show that
Shinko received the commission of U.S. $77,264.67 arising from the sale of CMS's logs in Japan,
though the trial court stated that "Shinko was able to collect the total amount of $77,264.67 US
Dollars (Exhs. M and M-1)." 7 The counterclaim was likewise dismissed, as it was shown that
DRACOR had waived its rights to the balance of its commission in a letter dated February 2, 1963
to Atty. Carlos Moran Sison, president of CMS. 8 From said decision, only CMS appealed to the
Court of Appeals.
The Court of Appeals, in a 3 to 2 decision, 9 affirmed the dismissal of the complaint since "[t]he trial
court could not have made a categorical finding that Shinko collected commissions from the
buyers of Sison's logs in Japan, and could not have held that Sison is entitled to recover from
Dracor the amount collected by Shinko as commissions, plaintiff-appellant having failed to prove
by competent evidence its claims." 10
Moreover, the appellate court held:
There is reason to believe that Shinko Trading Co. Ltd., was paid by defendant-
appellee out of its own commission of 5%, as indicated in the letter of its
president to the president of Sison, dated February 2, 1963 (Exhibit "N"), and in
the Agreement between Aguinaldo Development Corporation (ADECOR) and
Shinko Trading Co., Ltd. (Exhibit "9"). Daniel R. Aguinaldo stated in his said
letter:
. . . , I informed you that if you wanted to pay me for the service, then it would be
no more than at the standard rate of 5% commission because in our own case,
we pay our Japanese agents 2-1/2%. Accordingly, we would only add a similar
amount of 2-1/2% for the service which we would render you in the Philippines. 11
Aggrieved, CMS appealed to this Court by way of a petition for review on certiorari, alleging (1)
that the Court of Appeals erred in not making a complete findings of fact; (2) that the testimony of
Atty. Teodoro R. Dominguez, regarding the admission by Shinko's president and director that it
collected a commission of U.S. $1.00 per 1,000 board feet of logs from the Japanese buyers, is
admissible against DRACOR; (3) that the statement of DRACOR's chief legal counsel in his
memorandum dated May 31, 1965, Exhibit "K", is an admission that Shinko was able to collect the
commission in question; (4) that the fact that Shinko received the questioned commissions is
deemed admitted by DRACOR by its silence under Section 23, Rule 130 of the Rules of Court
when it failed to reply to Atty. Carlos Moran Sison's letter dated February 6, 1962; (5) that
DRACOR is not entitled to its 5% commission arising from the direct sales made by CMS to
buyers in Japan; and (6) that DRACOR is guilty of fraud and bad faith in its dealings with CMS.
With regard to CMS's arguments concerning whether or not Shinko received the commission in
question, We find the same unmeritorious.
To begin with, these arguments question the findings of fact made by the Court of Appeals, which
are final and conclusive and can not be reviewed on appeal to the Supreme Court. 12
Moreover, while it is true that the evidence adduced establishes the fact that Shinko is DRACOR's
agent or liaison in Japan, 13 there is no evidence which established the fact that Shinko did receive
the amount of U.S. $77,264.67 as commission arising from the sale of CMS's logs to various
Japanese firms.
The fact that Shinko received the commissions in question was not established by the testimony of
Atty. Teodoro R. Dominguez to the effect that Shinko's president and director told him that Shinko
received a commission of U.S. $1.00 for every 1,000 board feet of logs sold, since the same is
hearsay. Similarly, the letter of Mr. K. Shibata of Toyo Menka Kaisha, Ltd. 14
is also hearsay since
Mr. Shibata was not presented to testify on his letter.
CMS's other evidence have little or no probative value at all. The statements made in the
memorandum of Atty. Simplicio R. Ciocon to DRACOR dated May 31, 1965, 15 the letter dated
February 2, 1963 of Daniel
R. Aguinaldo, 16 president of DRACOR, and the reply-letter dated January 9, 1964 17 by
DRACOR's counsel Atty. V. E. Del Rosario to CMS's demand letter dated September 25, 1963 can
not be categorized as admissions that Shinko did receive the commissions in question.
The alleged admission made by Atty. Ciocon, to wit —
Furthermore, as per our records, our shipment of logs to Toyo Menka Kaisha,
Ltd., is only for a net volume of 67,747,732 board feet which should enable
Shinko to collect a commission of US $67,747.73 only
can not be considered as such since the statement was made in the context of
questioning CMS's tally of logs delivered to various Japanese firms.
Similarly, the statement of Daniel R. Aguinaldo, to wit —
. . . Knowing as we do that Toyo Menka is a large and reputable company, it is
obvious that they paid Shinko for certain services which Shinko must have
satisfactorily performed for them in Japan otherwise they would not have paid
Shinko
and that of Atty. V. E. Del Rosario,
. . . It does not seem proper, therefore, for CMS Logging, Inc., as principal, to
concern itself with, much less question, the right of Shinko Trading Co., Ltd. with
which our client debt directly, to whatever benefits it might have derived form the
ultimate consumer/buyer of these logs, Toyo Menka Kaisha, Ltd. There appears
to be no justification for your client's contention that these benefits, whether they
can be considered as commissions paid by Toyo Menka Kaisha to Shinko
Trading, are to be regarded part of the gross sales.
can not be considered admissions that Shinko received the questioned commissions
since neither statements declared categorically that Shinko did in fact receive the
commissions and that these arose from the sale of CMS's logs.
As correctly stated by the appellate court:
 It is a rule that "a statement is not competent as an admission where it does not,
under a reasonable construction, appear to admit or acknowledge the fact which
is sought to be proved by it". An admission or declaration to be competent must
have been expressed in definite, certain and unequivocal language (Bank of the
Philippine Islands vs. Fidelity & Surety Co., 51 Phil. 57, 64). 18
CMS's contention that DRACOR had admitted by its silence the allegation that Shinko received
the commissions in question when it failed to respond to Atty. Carlos Moran Sison's letter dated
February 6, 1963, is not supported by the evidence. DRACOR did in fact reply to the letter of Atty.
Sison, through the letter dated March 5, 1963 of F.A. Novenario, 19 which stated:
This is to acknowledge receipt of your letter dated February 6, 1963, and
addressed to Mr. D. R. Aguinaldo, who is at present out of the country.
xxx xxx xxx
We have no record or knowledge of any such payment of commission made by
Toyo Menka to Shinko. If the payment was made by Toyo Menka to Shinko, as
stated in your letter, we knew nothing about it and had nothing to do with it.
The finding of fact made by the trial court, i.e., that "Shinko was able to collect the total amount of
$77,264.67 US Dollars," can not be given weight since this was based on the summary prepared
by CMS itself, Exhibits "M" and "M-1".
Moreover, even if it was shown that Shinko did in fact receive the commissions in question, CMS
is not entitled thereto since these were apparently paid by the buyers to Shinko for arranging the
sale. This is therefore not part of the gross sales of CMS's logs.
However, We find merit in CMS's contention that the appellate court erred in holding that
DRACOR was entitled to its commission from the sales made by CMS to Japanese firms.
The principal may revoke a contract of agency at will, and such revocation may be express, or
implied, 20 and may be availed of even if the period fixed in the contract of agency as not yet
expired. 21 As the principal has this absolute right to revoke the agency, the agent can not object
thereto; neither may he claim damages arising from such revocation, 22 unless it is shown that
such was done in order to evade the payment of agent's commission. 23
In the case at bar, CMS appointed DRACOR as its agent for the sale of its logs to Japanese firms.
Yet, during the existence of the contract of agency, DRACOR admitted that CMS sold its logs
directly to several Japanese firms. This act constituted an implied revocation of the contract of
agency under Article 1924 of the Civil Code, which provides:
Art. 1924 The agency is revoked if the principal directly manages the business
entrusted to the agent, dealing directly with third persons.
In New Manila Lumber Company, Inc. vs. Republic of the Philippines, 24 this Court ruled that the
act of a contractor, who, after executing powers of attorney in favor of another empowering the
latter to collect whatever amounts may be due to him from the Government, and thereafter
demanded and collected from the government the money the collection of which he entrusted to
his attorney-in-fact, constituted revocation of the agency in favor of the attorney-in-fact.
Since the contract of agency was revoked by CMS when it sold its logs to Japanese firms without
the intervention of DRACOR, the latter is no longer entitled to its commission from the proceeds of
such sale and is not entitled to retain whatever moneys it may have received as its commission for
said transactions. Neither would DRACOR be entitled to collect damages from CMS, since
damages are generally not awarded to the agent for the revocation of the agency, and the case at
bar is not one falling under the exception mentioned, which is to evade the payment of the agent's
commission.
Regarding CMS's contention that the Court of Appeals erred in not finding that DRACOR had
committed acts of fraud and bad faith, We find the same unmeritorious. Like the contention
involving Shinko and the questioned commissions, the findings of the Court of Appeals on the
matter were based on its appreciation of the evidence, and these findings are binding on this
Court.
In fine, We affirm the ruling of the Court of Appeals that there is no evidence to support CMS's
contention that Shinko earned a separate commission of U.S. $1.00 for every 1,000 board feet of
logs from the buyer of CMS's logs. However, We reverse the ruling of the Court of Appeals with
regard to DRACOR's right to retain the amount of P101,536.77 as part of its commission from the
sale of logs by CMS, and hold that DRACOR has no right to its commission. Consequently,
DRACOR is hereby ordered to remit to CMS the amount of P101,536.77.
WHEREFORE, the decision appealed from is hereby MODIFIED as stated in the preceding
paragraph. Costs de officio.
SO ORDERED.
Narvasa, C.J., Padilla and Regalado JJ., concur.

SECOND DIVISION
G.R. No. 144773 May 16, 2005
AZNAR BROTHERS REALTY COMPANY, petitioner,
vs.
LAURENCIO AYING, IN HIS OWN BEHALF AND IN BEHALF OF THE OTHER HEIRS OF
EMILIANO AYING, PAULINO AYING, IN HIS OWN BEHALF AND IN BEHALF OF THE OTHER
HEIRS OF SIMEON AYING, AND WENCESLAO SUMALINOG, IN HIS OWN BEHALF AND IN
BEHALF OF THE OTHER HEIRS OF ROBERTA AYING, respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
This resolves the petition for review on certiorari seeking the modification of the Decision1 of the
Court of Appeals (CA) dated March 7, 2000 which affirmed with modification the Decision of the
Regional Trial Court (RTC) of Lapu-Lapu City, Branch 27 in Civil Case No. 2930-L; and the
Resolution dated August 2, 2000 denying petitioner’s motion for reconsideration of the
aforementioned decision.
The antecedent facts are as follows:
The disputed property is Lot No. 4399 with an area of 34,325 square meters located at Dapdap,
Lapu-Lapu City. Crisanta Maloloy-on petitioned for the issuance of a cadastral decree in her favor
over said parcel of land. After her death in 1930, the Cadastral Court issued a Decision directing
the issuance of a decree in the name of Crisanta Maloloy-on’s eight children, namely: Juan,
Celedonio, Emiliano, Francisco, Simeon, Bernabe, Roberta and Fausta, all surnamed Aying. The
certificate of title was, however, lost during the war.
Subsequently, all the heirs of the Aying siblings executed an Extra-Judicial Partition of Real Estate
with Deed of Absolute Sale dated March 3, 1964, conveying the subject parcel of land to herein
petitioner Aznar Brothers Realty Company. Said deed was registered with the Register of Deeds of
Lapu-Lapu City on March 6, 1964 under Act No. 3344 (the law governing registration for
unregistered land), and since then, petitioner had been religiously paying real property taxes on
said property.
In 1988, herein petitioner filed a Petition for Reconstitution of the Original Title as the original title
over the subject property had been lost during the war. On April 12, 1988, the court granted said
petition, thereby directing the Register of Deeds of Lapu-Lapu City to issue a reconstituted title in
the name of the abovementioned Aying siblings. Thus, Original Certificate of Title (OCT) No. RO-
2856 was issued.
In 1991, petitioner, claiming to be the rightful owner of the subject property, sent out notices to
vacate, addressed to persons occupying the property. Unheeded, petitioner then filed a complaint
for ejectment against the occupants before the Metropolitan Trial Court (MTC), Lapu-Lapu City.
On February 1, 1994, the MTC ordered the occupants to vacate the property. The case eventually
reached this Court, docketed as G.R. No. 128102, entitled Aznar Brothers Realty Company vs.
Court of Appeals, Luis Aying, Demetrio Sida, Felomino Augusto, Federico Abing, and Romeo
Augusto.2 On March 7, 2000, a Decision was promulgated in favor of herein petitioner, declaring it
as the rightful possessor of the parcel of land in question.
Meanwhile, herein respondents, along with other persons claiming to be descendants of the eight
Aying siblings, all in all numbering around 220 persons, had filed a complaint for cancellation of
the Extra-Judicial Partition with Absolute Sale, recovery of ownership, injunction and damages
with the RTC of Lapu-Lapu City. The complaint was dismissed twice without prejudice. Said
complaint was re-filed on August 19, 1993, docketed as Civil Case No. 2930-L.
In their amended complaint, herein respondents (plaintiffs before the RTC) alleged that: they are
co-owners of subject property, being descendants of the registered owners thereof under OCT No.
RO-2856; they had been in actual, peaceful, physical, open, adverse, continuous and
uninterrupted possession in concept of owner of subject parcel of land since time immemorial;
their possession was disturbed only in the last quarter of 1991 when some of them received
notices to vacate from petitioner and several weeks thereafter, earthmoving equipment entered
the disputed land, bulldozing the same and destroying plants, trees and concrete monuments
("mohon"); respondents discovered that such activities were being undertaken by petitioner
together with Sta. Lucia Realty and Development, Inc.; petitioner claimed to be the owner of
subject property by virtue of an extra-judicial partition of real estate with deed of absolute sale
executed in petitioner’s favor by the alleged heirs of Crisanta Maloloy-on; the aforementioned
extra-judicial partition of real estate with deed of absolute sale is a fraud and is null and void ab
initio because not all the co-owners of subject property affixed their signature on said document
and some of the co-owners who supposedly signed said document had been dead at the time of
the execution thereof; petitioner entered subject land in bad faith, knowing fully well that it did not
have any right to the land and used force, threat and intimidation against respondents; and they
suffered moral damages.3
Petitioner (defendant before the RTC) filed its Answer, denying that respondents are the lawful
owners of subject parcel of land by virtue of their being descendants or heirs of the registered
owners of subject property. Instead, petitioner alleged that it had been in actual possession of
subject land as owner thereof by virtue of the extra-judicial partition of real property and deed of
absolute sale executed in its favor; that in fact, it had been paying taxes thereon religiously; that it
tolerated about 6 persons to live on said land but said persons were eventually ejected by court
order. Petitioner then raised the affirmative defenses of failure to state cause of action and
prescription, as it took respondents 27 years, 10 months and 27 days to file the action to recover
subject property, when an action to recover property based on an implied trust should be instituted
within 4 years from discovery of the fraud. 4
In the Pre-Trial Order dated January 30, 1995 of the RTC, the issues were narrowed down to the
following:
1. Whether or not the plaintiffs [herein respondents] are the heirs of the registered owners
of Lot No. 4399.
2. Whether or not plaintiffs are the owners of Lot No. 4399.
3. Whether or not the defendant Aznar [herein petitioner] is estopped to make any claim
on Lot No. 4399.
4. Whether or not the defendant Aznar is a builder in bad faith.
5. Whether or not the defendants are liable for damages and attorney’s fees in favor of
the plaintiffs.
6. Whether or not the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale is
valid and had, in effect, validly conveyed to defendant Aznar Lot No. 4399.
7. Whether or not the plaintiffs’ action has prescribed. 5
After trial, the RTC rendered a Decision dated July 4, 1997, ruling that respondents’ evidence
failed to prove that the extra-judicial partition with deed of absolute sale was a totally simulated or
fictitious contract and concluded that said document is valid, thus, effectively conveying to
petitioner the property in question. It further held that respondents’ action had prescribed in that
the action is considered as one for reconveyance based on implied or constructive trust, it
prescribed in 10 years from the registration of the deed on March 6, 1964; and if the action is
considered as one for annulment of contract on the ground of fraud, it should have been filed
within 4 years from discovery of the fraud. The trial court also ruled that respondents failed to
present any admissible proof of filiation, hence, they were not able to prove that they are indeed
heirs of the eight Aying siblings who appear as the registered owners under OCT No. RO-2856.
The dispositive portion of the RTC Decision reads as follows:
WHEREFORE, judgment is hereby rendered dismissing the amended complaint on the
ground of prescription, and declaring the Extra-Judicial Partition of Real Estate with Deed
of Absolute Sale dated March 3, 1964 as valid and binding, adjudging that Lot 4399 with
an area of 34,325 square meters located at Dapdap, Mactan, Lapu-Lapu City had been
validly conveyed to and in favor of Aznar Brothers Realty Company, and directing the
Register of Deeds of Lapu-Lapu City to register the above-mentioned deed in accordance
with law and to cancel Original Certificate of Title No. RO-2856, and to issue a transfer
certificate of title in the name of Aznar Brothers Realty Company upon payment of the
necessary registration fees pursuant thereto.
The Writ of Preliminary Injunction issued in this case is hereby ordered dissolved.
The Motion for Contempt filed by the plaintiffs against defendants is dismissed for want of
factual and legal basis.
Costs against the plaintiffs.
SO ORDERED.6
Herein respondents appealed the foregoing decision to the CA and on March 7, 2000, said court
promulgated its Decision, the dispositive portion of which is reproduced hereunder:
THE FOREGOING CONSIDERED, the contested Decision while AFFIRMED is hereby
MODIFIED. The heirs of Emiliano Aying, Simeon Aying and Roberta Aying are hereby
declared as the lawful owners of the contested property but equivalent only to 3/8.
SO ORDERED.
In modifying the RTC judgment, the CA ratiocinated that "an action for recovery of possession of
registered land never prescribes in view of the provision of Section 44, Act No. 496 (now Sec. 47,
PD 1520), to the effect that no title to registered land in derogation to that of a registered owner
shall be acquired by prescription." The CA further ruled that even if the action is deemed to be
based on implied trust, prescription did not begin to run since there is no evidence that positive
acts of repudiation were made known to the heirs who did not participate in the execution of the
Extra-Judicial Partition of Real Estate with Deed of Absolute Sale. Thus, striking down the RTC’s
ruling that the respondents’ complaint is dismissible on the ground of prescription, the CA held
instead that herein respondents’ action had not prescribed but upheld the validity of the Extra-
Judicial Partition of Real Estate with Deed of Absolute Sale, except as to the shares of the heirs of
Emiliano, Simeon and Roberta, who did not participate in the execution of said document.
Herein petitioner’s motion for reconsideration of the CA decision was denied per Resolution dated
August 2, 2000.
Hence, the present petition for review on certiorari assailing the CA decision on the following
grounds:
I
THE COURT OF APPEALS ERRED IN FAILING TO APPLY THE RULE THAT AN HEIR
OF THE ORIGINAL REGISTERED OWNER MAY LOSE HIS RIGHT TO RECOVER A
TITLED PROPERTY BY REASON OF LACHES;
 II
THE COURT OF APPEALS ERRED IN FAILING TO APPLY THE RULE THAT THE ACT
OF REGISTRATION OF THE DEED OF PARTITION WITH SALE MAY BE
CONSIDERED AN UNEQUIVOCAL REPUDIATION OF THE TRUST GIVING RISE TO
PRESCRIPTION;
III
THE COURT OF APPEALS ERRED IN FAILING TO APPLY THE PROVISIONS OF
ARTICLE 1104 OF THE CIVIL CODE TO THE EFFECT THAT IN THE ABSENCE OF
BAD FAITH OR FRAUD, THE PARTITION WITH PRETERITION OF ANY
COMPULSORY HEIR SHALL NOT BE RESCINDED.7
In their Comment, respondents argue that this case is an action to declare as null and void the
Extra-Judicial Partition of Real Estate with Deed of Absolute Sale, hence, under Article 1410 of the
Civil Code, an action for declaration of an inexistent contract does not prescribe. Respondents
further posit that the principle of laches should be applied against petitioner and not against them,
as they (respondents) had been in actual possession of the subject property, while petitioner
merely brought action to eject them more than 29 years after the alleged execution of the Extra-
Judicial Partition of Real Estate with Deed of Absolute Sale. They also refuted petitioner’s
arguments regarding the application of the principles of implied and constructive trusts in this
case.
At the outset, it should be stressed that not all the plaintiffs who filed the amended complaint
before the trial court had been impleaded as respondents in the present petition. The only parties
impleaded are the heirs of Emiliano, Simeon and Roberta Aying, whom the CA adjudged as
owners of a 3/8 portion of the land in dispute for not having participated in the execution of the
Extra-Judicial Partition of Real Estate with Deed of Absolute Sale.
It is significant to note that herein petitioner does not question the CA conclusion that respondents
are heirs of the aforementioned three Aying siblings. Hence, the trial court and appellate court’s
findings that the Extra- Judicial Partition of Real Estate with Deed of Absolute Sale was not forged
nor simulated and that the heirs of Emiliano, Simeon and Roberta Aying did not participate in the
execution thereof, are now beyond cavil.
The issues raised by petitioner for the Court’s resolution are (1) whether or not respondents’ cause
of action is imprescriptible; and (2) if their right to bring action is indeed imprescriptible, may the
principle of laches apply.
Respondents alleged in their amended complaint that not all the co-owners of the land in question
signed or executed the document conveying ownership thereof to petitioner and made the
conclusion that said document is null and void. We agree with the ruling of the RTC and the CA
that the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale is valid and binding only
as to the heirs who participated in the execution thereof, hence, the heirs of Emiliano, Simeon and
Roberta Aying, who undisputedly did not participate therein, cannot be bound by said document.
However, the facts on record show that petitioner acquired the entire parcel of land with the
mistaken belief that all the heirs have executed the subject document. Thus, the trial court is
correct that the provision of law applicable to this case is Article 1456 of the Civil Code which
states:
ART. 1456. 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.
In Vda. De Esconde vs. Court of Appeals,8 the Court expounded thus:
Construing this provision of the Civil Code, in Philippine National Bank v. Court of
Appeals, the Court stated:
A deeper analysis of Article 1456 reveals that it is not a trust in the technical
sense for in a typical trust, confidence is reposed in one person who is named a
trustee for the benefit of another who is called the cestui que trust, respecting
property which is held by the trustee for the benefit of the cestui que trust. A
constructive trust, unlike an express trust, does not emanate from, or generate a
fiduciary relation. While in an express trust, a beneficiary and a trustee are linked
by confidential or fiduciary relations, in a constructive trust, there is neither a
promise nor any fiduciary relation to speak of and the so-called trustee neither
accepts any trust nor intends holding the property for the beneficiary. 9
The concept of constructive trusts was further elucidated in the same case, as follows:
. . . implied trusts are those which, without being expressed, are deducible from the
nature of the transaction as matters of intent or which are superinduced on the
transaction by operation of law as matters of equity, independently of the particular
intention of the parties. In turn, implied trusts are either resulting or constructive trusts.
These two are differentiated from each other as follows:
Resulting trusts are based on the equitable doctrine that valuable consideration
and not legal title determines the equitable title or interest and are presumed
always to have been contemplated by the parties. They arise from the nature of
circumstances of the consideration involved in a transaction whereby one person
thereby becomes invested with legal title but is obligated in equity to hold his
legal title for the benefit of another. On the other hand, constructive trusts are
created by the construction of equity in order to satisfy the demands of
justice and prevent unjust enrichment. They arise contrary to intention
against one who, by fraud, duress or abuse of confidence, obtains or holds
the legal right to property which he ought not, in equity and good
conscience, to hold.10 (Emphasis supplied)
Based on such concept of constructive trusts, the Court ruled in said case that:
 The rule that a trustee cannot acquire by prescription ownership over property entrusted
to him until and unless he repudiates the trust, applies to express trusts and resulting
implied trusts. However, in constructiveimplied trusts, prescription may supervene even if
the trustee does not repudiate the relationship. Necessarily, repudiation of said trust is not
a condition precedent to the running of the prescriptive period. 11
The next question is, what is the applicable prescriptive period?
In Amerol vs. Bagumbaran,12 the Court expounded on the prescriptive period within which to bring
an action for reconveyance of property based on implied or constructive trust, to wit:
. . . under the present Civil Code, we find that just as an implied or constructive trust is an
offspring of the law (Art. 1456, Civil Code), so is the corresponding obligation to reconvey
the property and the title thereto in favor of the true owner. In this context, and vis-à-vis
prescription, Article 1144 of the Civil Code is applicable.
Article 1144. The following actions must be brought within ten years from the time
the right of action accrues:
(1) Upon a written contract;
(2) Upon an obligation created by law;
(3) Upon a judgment.
xxx xxx xxx
An action for reconveyance based on an implied or constructive trust must perforce
prescribe in ten years and not otherwise. A long line of decisions of this Court, and of very
recent vintage at that, illustrates this rule. Undoubtedly, it is now well-settled that an action
for reconveyance based on an implied or constructive trust prescribes in ten years from
the issuance of the Torrens title over the property. 13
It has also been ruled that the ten-year prescriptive period begins to run from the date of
registration of the deed or the date of the issuance of the certificate of title over the property, but if
the person claiming to be the owner thereof is in actual possession of the property, the right to
seek reconveyance, which in effect seeks to quiet title to the property, does not prescribe. 14
In the present case, respondents Wenceslao Sumalinog, an heir of Roberta Aying; Laurencio
Aying, an heir of Emiliano Aying; and Paulino Aying, an heir of Simeon Aying, all testified that they
had never occupied or been in possession of the land in dispute. 15 Hence, the prescriptive period
of ten years would apply to herein respondents.
The question then arises as to the date from which the ten-year period should be reckoned,
considering that the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale was
registered under Act No. 3344 and not under Act No. 496 (Land Registration Act), despite the fact
the land in dispute was already titled under Act No. 496 in the names of the Aying siblings at the
time the subject document was executed.
In Spouses Abrigo vs. De Vera,16 it was held that registration of instruments must be done in the
proper registry, in order to affect and bind the land and, thus, operate as constructive notice to the
world.17 Therein, the Court ruled:
x x x If the land is registered under the Land Registration Act (and has therefore a Torrens
Title), and it is sold but the subsequent sale is registered not under the Land Registration
Act but under Act 3344, as amended, such sale is not considered REGISTERED x x x . 18
In this case, since the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale was
registered under Act No. 3344 and not under Act No. 496, said document is deemed not
registered. Accordingly, the ten-year prescriptive period cannot be reckoned from March 6, 1964,
the date of registration of the subject document under Act No. 3344. The prescriptive period only
began to run from the time respondents had actual notice of the Extra-Judicial Partition of Real
Estate with Deed of Absolute Sale.
The only evidence on record as to when such prescriptive period commenced as to each of the
respondents are Wenceslao Sumalinog’s (heir of Roberta Aying) testimony that about three years
after 1964, they already learned of the existence of the Extra-Judicial Partition of Real Estate with
Deed of Absolute Sale;19 and Laurencio Aying’s (heir of Emiliano Aying) admission that he found
out about the sale of the land in dispute a long time ago and can only estimate that it must be after
martial law.20 Paulino Aying (heir of Simeon Aying) gave no testimony whatsoever as to when the
children of Simeon Aying actually learned of the existence of the document of sale. On the other
hand, petitioner did not present any other evidence to prove the date when respondents were
notified of the execution of the subject document.
In view of the lack of unambiguous evidence of when the heirs of Emiliano Aying and Simeon
Aying discovered the existence of the document of sale, it must be determined which party had the
burden of proof to establish such fact.
The test for determining where the burden of proof lies is to ask which party to an action or suit will
fail if he offers no evidence competent to show the facts averred as the basis for the relief he
seeks to obtain.21 Moreover, one alleging a fact that is denied has the burden of proving it and
unless the party asserting the affirmative of an issue sustains the burden of proof of that issue by a
preponderance of the evidence, his cause will not succeed. 22 Thus, the defendant bears the
burden of proof as to all affirmative defenses which he sets up in answer to the plaintiff’s claim or
cause of action; he being the party who asserts the truth of the matter he has alleged, the burden
is upon him to establish the facts on which that matter is predicated and if he fails to do so, the
plaintiff is entitled to a verdict or decision in his favor.23
In the case at bar, it was petitioner, as the defendant before the RTC, which set up in its Answer
the affirmative defense of prescription. It was, therefore, incumbent upon petitioner to prove the
date from which the prescriptive period began to run. Evidence as to the date when the ten-year
prescriptive period began exists only as to the heirs of Roberta Aying, as Wenceslao Sumalinog
admitted that they learned of the existence of the document of sale in the year 1967. As to the
heirs of Emiliano Aying and Simeon Aying, there is no clear evidence of the date when they
discovered the document conveying the subject land to petitioner. Petitioner miserably failed to
adduce proof of when the heirs of Emiliano Aying and Simeon Aying were notified of the subject
document. Hence, with regard to said heirs, the Court may consider the admission in the amended
complaint that they learned of the conveyance of the disputed land only in 1991 when petitioner
sent notices to vacate to the occupants of the subject land, as the date from which the ten-year
prescriptive period should be reckoned.

Respondents filed their Amended Complaint on December 6, 1993. 24 Thus, with regard to
respondent heirs of Roberta Aying who had knowledge of the conveyance as far back as 1967,
their cause of action is already barred by prescription when said amended complaint was filed as
they only had until 1977 within which to bring action. As to the respondent heirs of Emiliano and
Simeon Aying, they were able to initiate their action for reconveyance of property based on implied
or constructive trust well within the ten-year prescriptive period reckoned from 1991 when they
were sent by petitioner a notice to vacate the subject property.

Evidently, laches cannot be applied against respondent heirs of Emiliano and Simeon Aying, as
they took action to protect their interest well within the period accorded them by law.

With regard to petitioner’s argument that the provision of Article 1104 of the Civil Code, stating that
a partition made with preterition of any of the compulsory heirs shall not be rescinded, should be
applied, suffice it to say that the Extra-Judicial Partition of Real Estate with Deed of Absolute Sale
is not being rescinded. In fact, its validity had been upheld but only as to the parties who
participated in the execution of the same. As discussed above, what was conveyed to petitioner
was ownership over the shares of the heirs who executed the subject document. Thus, the law,
particularly, Article 1456 of the Civil Code, imposed the obligation upon petitioner to act as a
trustee for the benefit of respondent heirs of Emiliano and Simeon Aying who, having brought their
action within the prescriptive period, are now entitled to the reconveyance of their share in the land
in dispute.

IN VIEW OF THE FOREGOING, the petition is PARTIALLY GRANTED and the Decision of the
Court of Appeals dated March 7, 2000 is MODIFIED, as follows: The amended complaint of the
heirs of Roberta Aying is DISMISSED on the ground of prescription. However, the heirs of
Emiliano Aying and Simeon Aying, having instituted the action for reconveyance within the
prescriptive period, are hereby DECLARED as the LAWFUL OWNERS of a 2/8 portion of the
parcel of land covered by Original Certificate of Title No. RO-2856.

SO ORDERED.

Puno, (Chairman), Callejo, Sr., Tinga, and Chico-Nazario, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
 THIRD DIVISION
G.R. No. 148788 November 23, 2007
SOLEDAD CAÑEZO, substituted by WILLIAM CAÑEZO and VICTORIANO
CAÑEZO Petitioners,
vs.
CONCEPCION ROJAS, Respondent.
DECISION
NACHURA, J.:
This is a petition for review on certiorari from the Decision 1 of the Court of Appeals, dated
September 7, 2000, in CA-G.R. SP No. 53236, and Resolution dated May 9, 2001.
On January 29, 1997, petitioner Soledad Cañezo filed a Complaint 2 for the recovery of real
property plus damages with the Municipal Trial Court (MTC) of Naval, Biliran, against her father’s
second wife, respondent Concepcion Rojas. The subject property is an unregistered land with an
area of 4,169 square meters, situated at Higatangan, Naval, Biliran. Cañezo attached to the
complaint a Joint Affidavit3 executed on May 10, 1979 by Isidro Catandijan and Maximina Cañezo
attesting to her acquisition of the property.
In her complaint, the petitioner alleged that she bought the parcel of land in 1939 from Crisogono
Limpiado, although the transaction was not reduced into writing. Thereafter, she immediately took
possession of the property. When she and her husband left for Mindanao in 1948, she entrusted
the said land to her father, Crispulo4 Rojas, who took possession of, and cultivated, the property. In
1980, she found out that the respondent, her stepmother, was in possession of the property and
was cultivating the same. She also discovered that the tax declaration over the property was
already in the name of Crispulo Rojas.5
In her Answer, the respondent asserted that, contrary to the petitioner’s claim, it was her husband,
Crispulo Rojas, who bought the property from Crisogono Limpiado in 1948, which accounts for the
tax declaration being in Crispulo’s name. From then on, until his death in 1978, Crispulo
possessed and cultivated the property. Upon his death, the property was included in his estate,
which was administered by a special administrator, Bienvenido Ricafort. The petitioner, as heir,
even received her share in the produce of the estate. The respondent further contended that the
petitioner ought to have impleaded all of the heirs as defendants. She also argued that the fact
that petitioner filed the complaint only in 1997 means that she had already abandoned her right
over the property.6
On July 3, 1998, after hearing, the MTC rendered a Decision in favor of the petitioner, thus:
WHEREFORE, premises considered, the Court finds a preponderance of evidence in favor of
plaintiff Soledad Cañezo and against defendant Concepcion Rojas by declaring plaintiff the true
and lawful owner of the land more particularly described under paragraph 5 of the complaint and
hereby orders defendant Concepcion Rojas:
a) To vacate and surrender possession of the land to plaintiff;
b) To pay plaintiff the sum of ₱34,000.00 actual damages, ₱10,000.00 for attorney’s fees
and litigation expenses; and
c) To pay the costs.
SO ORDERED.7
Despite the respondent’s objection that the verbal sale cannot be proven without infringing the
Statute of Frauds, the MTC gave credence to the testimony of the petitioners’ two witnesses
attesting to the fact that Crisogono Limpiado sold the property to the petitioner in 1939. The MTC
also found no evidence to show that Crispulo Rojas bought the property from Crisogono Limpiado
in 1948. It held that the 1948 tax declaration in Crispulo’s name had little significance on
respondent’s claim, considering that in 1948, the "country was then rehabilitating itself from the
ravages of the Second World War" and "the government was more interested in the increase in tax
collection than the observance of the niceties of law." 8
The respondent appealed the case to the Regional Trial Court (RTC) of Naval, Biliran. On October
12, 1998, the RTC reversed the MTC decision on the ground that the action had already
prescribed and acquisitive prescription had set in. The dispositive portion of the Decision reads:
WHEREFORE, premises considered, the decision of the Municipal Trial Court of Naval, Biliran
awarding ownership of the disputed land to the plaintiff and further allowing recovery of damages
is hereby REVERSED in toto. There is no award of damages.
The said property remains as the legitime of the defendant Concepcion Rojas and her children.
SO ORDERED.9
However, acting on petitioner’s motion for reconsideration, the RTC amended its original decision
on December 14, 1998.10 This time, it held that the action had not yet prescribed considering that
the petitioner merely entrusted the property to her father. The ten-year prescriptive period for the
recovery of a property held in trust would commence to run only from the time the trustee
repudiates the trust. The RTC found no evidence on record showing that Crispulo Rojas ever
ousted the petitioner from the property. The dispositive portion of the amended decision reads as
follows:
WHEREFORE, in view of the foregoing considerations, the decision of this Court dated October
12, 1998 is hereby set aside and another is hereby entered modifying the decision of the Court a
quo and declaring Soledad Rojas Vda. De Cañezo as the true and lawful owner of a parcel of
land, more particularly described and bounded as follows:
A parcel of land situated at Higatangan, Naval, Biliran, bounded on the North by Policarpio
Limpiado; on the South by Fidel Limpiado; on the East by Seashore; and on the West by Crispolo
(sic) Limpiado with an approximate area of 4,169 square meters per Tax Declaration No. 2258,
later under Tax Declaration No. 4073 in the name of Crispolo Rojas and later in the name of the
Heirs of Crispolo Rojas.
Further, ordering defendant-appellant Concepcion Rojas and all persons claiming rights or interest
under her to vacate and surrender possession of the land aforecited to the plaintiff or any of her
authorized representatives, Ordering the Provincial and/or Municipal Assessor’s Office to cancel
the present existing Tax Declaration in the name of Heirs of Crispolo Rojas referring to the above-
described property in favor of the name of Soledad Rojas Vda. De Cañezo, Ordering the
defendant-appellant Concepcion Rojas to pay the plaintiff-appellee the sum of ₱34,000.00 in
actual damages, and to pay for the loss of her share in money value of the products of the
coconuts of said land from 1979 to 1997 and to pay further until the case is terminated at the rate
of ₱200.00 per quarter based on the regular remittances of the late Crispolo Rojas to the plaintiff-
appellee, and to pay the costs.
SO ORDERED.11
The respondent filed a motion to reconsider the Amended Decision but the RTC denied the same
in an Order dated April 25, 1999.
She then filed a petition for review with the Court of Appeals (CA), which reversed the Amended
Decision of the RTC on September 7, 2000, thus:
WHEREFORE, the amended decision dated December 14, 1998 rendered in Civil Case No. B-
1041 is hereby REVERSED and SET ASIDE. The complaint filed by Soledad Cañezo before the
Municipal Trial Court of Naval, Biliran is hereby DISMISSED on grounds of laches and prescription
and for lack of merit.
SO ORDERED.12
The CA held that the petitioner’s inaction for several years casts a serious doubt on her claim of
ownership over the parcel of land. It noted that 17 years lapsed since she discovered that
respondent was in adverse possession of the property before she instituted an action to recover
the same. And during the probate proceedings, the petitioner did not even contest the inclusion of
the property in the estate of Crispulo Rojas. 13
The CA was convinced that Crispulo Rojas owned the property, having bought the same from
Crisogono Limpiado in 1948. Supporting this conclusion, the appellate court cited the following
circumstances: (1) the property was declared for taxation purposes in Crispulo’s name and he had
been paying the taxes thereon from 1948 until his death in 1978; (2) Crispulo adversely
possessed the same property from 1948 until his death in 1978; and (3) upon his death in 1978,
the property was included in his estate, the proceeds of which were distributed among his heirs. 14
The CA further held that, assuming that there was an implied trust between the petitioner and her
father over the property, her right of action to recover the same would still be barred by
prescription since 49 years had already lapsed since Crispulo adversely possessed the contested
property in 1948.15
On May 9, 2001, the CA denied the petitioner’s motion for reconsideration for lack of merit. 16
In this petition for review, the petitioner, substituted by her heirs, assigns the following errors:
That the Court of Appeals committed grave abuse of discretion in setting aside petitioner’s
contention that the Petition for Review filed by respondent CONCEPCION ROJAS before the
Court of Appeals was FILED OUT OF TIME;
That the Court of Appeals erred and committed grave abuse of discretion amounting to lack or
excess of jurisdiction when it decided that the filing of the case by SOLEDAD CAÑEZO for
Recovery of Real Property was already barred by PRESCRIPTION AND LACHES. 17
The petitioner insists that the respondent’s petition for review before the CA was filed out of time.
The petitioner posits that the CA may not grant an additional extension of time to file the petition
except for the most compelling reason. She contends that the fact that respondent’s counsel
needed additional time to secure the certified copy of his annexes cannot be considered as a
compelling reason that would justify an additional period of
extension. She admits, though, that this issue was raised for the first time in their motion for
reconsideration, but insists that it can be raised at any time since it concerns the jurisdiction of the
CA over the petition.
The petitioner further posits that prescription and laches are unavailing because there was an
express trust relationship between the petitioner and Crispulo Rojas and his heirs, and express
trusts do not prescribe. Even assuming that it was not an express trust, there was a resulting trust
which generally does not prescribe unless there is repudiation by the trustee.
For her part, the respondent argues that the petitioners are now estopped from questioning the CA
Resolution granting her second motion for extension to file the petition for review. She notes that
the petitioner did not raise this issue in the comment that she filed in the CA. In any case, the
grant of the second extension of time was warranted considering that the certified true copy of the
assailed RTC orders did not arrive at the office of respondent’s counsel in Cebu City in time for the
filing of the petition.
On the merits, the respondent asserts that the complaint is barred by prescription, laches and
estoppel. From 1948 until his death in 1978, Crispulo cultivated the property and was in adverse,
peaceful and continuous possession thereof in the concept of owner. It took the petitioner 49 years
from 1948 before she filed the complaint for recovery of the property in 1997. Granting that it was
only in 1980 that she found out that the respondent adversely possessed the property, still
petitioner allowed 17 years to elapse before she asserted her alleged right over the property.
Finally, the respondent maintains that the other co-owners are indispensable parties to the case;
and because they were not impleaded, the case should be dismissed.
The petition has no merit.
On the procedural issue raised by the petitioner, we find no reversible error in the grant by the CA
of the second motion for extension of time to file the respondent’s petition. The grant or denial of a
motion for extension of time is addressed to the sound discretion of the court. 18 The CA obviously
considered the difficulty in securing a certified true copy of the assailed decision because of the
distance between the office of respondent’s counsel and the trial court as a compelling reason for
the request. In the absence of any showing that the CA granted the motion for extension
capriciously, such exercise of discretion will not be disturbed by this Court.
On the second issue, the petitioner insists that her right of action to recover the property cannot be
barred by prescription or laches even with the respondent’s uninterrupted possession of the
property for 49 years because there existed between her and her father an express trust or a
resulting trust. Indeed, if no trust relations existed, the possession of the property by the
respondent, through her predecessor, which dates back to 1948, would already have given rise to
acquisitive prescription in accordance with Act No. 190 (Code of Civil Procedure). 19 Under Section
40 of Act No. 190, an action for recovery of real property, or of an interest therein, can be brought
only within ten years after the cause of action accrues. This period coincides with the ten-year
period for acquisitive prescription provided under Section 41 20 of the same Act.
Thus, the resolution of the second issue hinges on our determination of the existence of a trust
over the property --- express or implied --- between the petitioner and her father.
A trust is the legal relationship between one person having an equitable ownership of property and
another person owning the legal title to such property, the equitable ownership of the former
entitling him to the performance of certain duties and the exercise of certain powers by the
latter.21 Trusts are either express or implied.22 Express trusts are those which are created by the
direct and positive acts of the parties, by some writing or deed, or will, or by words evincing an
intention to create a trust.23 Implied trusts are those which, without being expressed, are deducible
from the nature of the transaction as matters of intent or, independently, of the particular intention
of the parties, as being superinduced on the transaction by operation of law basically by reason of
equity.24 An implied trust may either be a resulting trust or a constructive trust.
It is true that in express trusts and resulting trusts, a trustee cannot acquire by prescription a
property entrusted to him unless he repudiates the trust. 25 The following discussion is instructive:
There is a rule that a trustee cannot acquire by prescription the ownership of property entrusted to
him, or that an action to compel a trustee to convey property registered in his name in trust for the
benefit of the cestui que trust does not prescribe, or that the defense of prescription cannot be set
up in an action to recover property held by a person in trust for the benefit of another, or that
property held in trust can be recovered by the beneficiary regardless of the lapse of time.
That rule applies squarely to express trusts. The basis of the rule is that the possession of a
trustee is not adverse. Not being adverse, he does not acquire by prescription the property held in
trust. Thus, Section 38 of Act 190 provides that the law of prescription does not apply "in the case
of a continuing and subsisting trust."
The rule of imprescriptibility of the action to recover property held in trust may possibly apply to
resulting trusts as long as the trustee has not repudiated the trust.
xxxx
Acquisitive prescription may bar the action of the beneficiary against the trustee in an express
trust for the recovery of the property held in trust where (a) the trustee has performed unequivocal
acts of repudiation amounting to an ouster of the cestui que trust; (b) such positive acts of
repudiation have been made known to the cestui que trust, and (c) the evidence thereon is clear
and conclusive.26
As a rule, however, 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.27 The presence of the following elements must be proved: (1) a trustor or settlor who
executes the instrument creating the trust; (2) a trustee, who is the person expressly designated to
carry out the trust; (3) the trust res, consisting of duly identified and definite real properties; and (4)
the cestui que trust, or beneficiaries whose identity must be clear.28 Accordingly, it was incumbent
upon petitioner to prove the existence of the trust relationship. And petitioner sadly failed to
discharge that burden.
The existence of express trusts concerning real property may not be established by parol
evidence.29 It must be proven by some writing or deed. In this case, the only evidence to support
the claim that an express trust existed between the petitioner and her father was the self-serving
testimony of the petitioner. Bare allegations do not constitute evidence adequate to support a
conclusion. They are not equivalent to proof under the Rules of Court. 30
In one case, the Court allowed oral testimony to prove the existence of a trust, which had been
partially performed. It was stressed therein that what is important is that there should be an
intention to create a trust, thus:
What is crucial is the intention to create a trust. While oftentimes the intention is manifested by the
trustor in express or explicit language, such intention may be manifested by inference from what
the trustor has said or done, from the nature of the transaction, or from the circumstances
surrounding the creation of the purported trust.
However, an inference of the intention to create a trust, made from language, conduct or
circumstances, must be made with reasonable certainty. It cannot rest on vague, uncertain or
indefinite declarations. An inference of intention to create a trust, predicated only on
circumstances, can be made only where they admit of no other interpretation. 31
Although no particular words are required for the creation of an express trust, a clear intention to
create a trust must be shown; and the proof of fiduciary relationship must be clear and convincing.
The creation of an express trust must be manifested with reasonable certainty and cannot be
inferred from loose and vague declarations or from ambiguous circumstances susceptible of other
interpretations.32
In the case at bench, an intention to create a trust cannot be inferred from the petitioner’s
testimony and the attendant facts and circumstances. The petitioner testified only to the effect that
her agreement with her father was that she will be given a share in the produce of the property,
thus:
Q: What was your agreement with your father Crispulo Rojas when you left this property
to him?
A: Every time that they will make copra, they will give a share.
Q: In what particular part in Mindanao [did] you stay with your husband?
A: Bansalan, Davao del Sur.
Q: And while you were in Bansalan, Davao del Sur, did Crispolo Rojas comply with his
obligation of giving your share the proceeds of the land?
A: When he was still alive, he gave us every three months sometimes ₱200.00 and
sometimes ₱300.00.33
This allegation, standing alone as it does, is inadequate to establish the existence of a trust
because profit-sharing per se, does not necessarily translate to a trust relation. It could also be
present in other relations, such as in deposit.
What distinguishes a trust from other relations is the separation of the legal title and equitable
ownership of the property. In a trust relation, legal title is vested in the fiduciary while equitable
ownership is vested in a cestui que trust. Such is not true in this case. The petitioner alleged in her
complaint that the tax declaration of the land was transferred to the name of Crispulo without her
consent. Had it been her intention to create a trust and make Crispulo her trustee, she would not
have made an issue out of this because in a trust agreement, legal title is vested in the trustee.
The trustee would necessarily have the right to transfer the tax declaration in his name and to pay
the taxes on the property. These acts would be treated as beneficial to the cestui que trust and
would not amount to an adverse possession.34
Neither can it be deduced from the circumstances of the case that a resulting trust was
created.1âwphi1 A resulting trust is a species of implied trust that is presumed always to have
been contemplated by the parties, the intention as to which can be found in the nature of their
transaction although not expressed in a deed or instrument of conveyance. A resulting trust is
based on the equitable doctrine that it is the more valuable consideration than the legal title that
determines the equitable interest in property.35
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.36 In order to establish an implied trust in real property by parol evidence, the proof
should be as fully convincing as if the acts giving rise to the trust obligation are proven by an
authentic document. An implied trust, in fine, cannot be established upon vague and inconclusive
proof.37 In the present case, there was no evidence of any transaction between the petitioner and
her father from which it can be inferred that a resulting trust was intended.
In light of the disquisitions, we hold that there was no express trust or resulting trust established
between the petitioner and her father. Thus, in the absence of a trust relation, we can only
conclude that Crispulo’s uninterrupted possession of the subject property for 49 years, coupled
with the performance of acts of ownership, such as payment of real estate taxes, ripened into
ownership. The statutory period of prescription commences when a person who has neither title
nor good faith, secures a tax declaration in his name and may, therefore, be said to have
adversely claimed ownership of the lot.38 While tax declarations and receipts are not conclusive
evidence of ownership and do not prove title to the land, nevertheless, when coupled with actual
possession, they constitute evidence of great weight and can be the basis of a claim of ownership
through prescription.39 Moreover, Section 41 of Act No. 190 allows adverse possession
in any character to ripen into ownership after the lapse of ten years. There could be prescription
under the said section even in the absence of good faith and just title. 40
All the foregoing notwithstanding, even if we sustain petitioner’s claim that she was the owner of
the property and that she constituted a trust over the property with her father as the trustee, such
a finding still would not advance her case.
Assuming that such a relation existed, it terminated upon Crispulo’s death in 1978. A trust
terminates upon the death of the trustee where the trust is personal to the trustee in the sense that
the trustor intended no other person to administer it. 41 If Crispulo was indeed appointed as trustee
of the property, it cannot be said that such appointment was intended to be conveyed to the
respondent or any of Crispulo’s other heirs. Hence, after Crispulo’s death, the respondent had no
right to retain possession of the property. At such point, a constructive trust would be created over
the property by operation of law. Where one mistakenly retains property which rightfully belongs to
another, a constructive trust is the proper remedial device to correct the situation. 42
A constructive trust is one created not by any word or phrase, either expressly or impliedly,
evincing a direct intention to create a trust, but one which arises in order to satisfy the demands of
justice. It does not come about by agreement or intention but in the main by operation of law,
construed against one who, by fraud, duress or abuse of confidence, obtains or holds the legal
right to property which he ought not, in equity and good conscience, to hold. 43
As previously stated, the rule that a trustee cannot, by prescription, acquire ownership over
property entrusted to him until and unless he repudiates the trust, applies to express trusts and
resulting implied trusts. However, in constructive implied trusts, prescription may supervene even if
the trustee does not repudiate the relationship. Necessarily, repudiation of the said trust is not a
condition precedent to the running of the prescriptive period. 44 A constructive trust, unlike an
express trust, does not emanate from, or generate a fiduciary relation. While in an express trust, a
beneficiary and a trustee are linked by confidential or fiduciary relations, in a constructive trust,
there is neither a promise nor any fiduciary relation to speak of and the so-called trustee neither
accepts any trust nor intends holding the property for the beneficiary. 45 The relation of trustee
and cestui que trust does not in fact exist, and the holding of a constructive trust is for the trustee
himself, and therefore, at all times adverse.

In addition, a number of other factors militate against the petitioner’s case. First, the petitioner is
estopped from asserting ownership over the subject property by her failure to protest its inclusion
in the estate of Crispulo. The CA, thus, correctly observed that:

Even in the probate proceedings instituted by the heirs of Crispulo Rojas, which included her as a
daughter of the first marriage, Cañezo never contested the inclusion of the contested property in
the estate of her father. She even participated in the project of partition of her father’s estate which
was approved by the probate court in 1984. After personally receiving her share in the proceeds of
the estate for 12 years, she suddenly claims ownership of part of her father’s estate in 1997.

The principle of estoppel in pais applies when -- by one’s acts, representations, admissions, or
silence when there is a need to speak out -- one, intentionally or through culpable negligence,
induces another to believe certain facts to exist; and the latter rightfully relies and acts on such
belief, so as to be prejudiced if the former is permitted to deny the existence of those facts. 46 Such
a situation obtains in the instant case.

Second, the action is barred by laches. The petitioner allegedly discovered that the property was
being possessed by the respondent in 1980. 47 However, it was only in 1997 that she filed the
action to recover the property. Laches is negligence or omission to assert a right within a
reasonable time, warranting a presumption that the party entitled to it has either abandoned or
declined to assert it.48

Finally, the respondent asserts that the court a quo ought to have dismissed the complaint for
failure to implead the other heirs who are indispensable parties. We agree. We note that the
complaint filed by the petitioner sought to recover ownership, not just possession of the property;
thus, the suit is in the nature of an action for reconveyance. It is axiomatic that owners of property
over which reconveyance is asserted are indispensable parties. Without them being impleaded, no
relief is available, for the court cannot render valid judgment. Being indispensable parties, their
absence in the suit renders all subsequent actions of the trial court null and void for want of
authority to act, not only as to the absent parties but even as to those present. Thus, when
indispensable parties are not before the court, the action should be dismissed. 49 At any rate, a
resolution of this issue is now purely academic in light of our finding that the complaint is already
barred by prescription, estoppel and laches.

WHEREFORE, premises considered, the petition is DENIED. The Decision of the Court of
Appeals, dated September 7, 2000, and Resolution dated May 9, 2001, are AFFIRMED.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 162033 May 8, 2009
HEIRS OF TRANQUILINO LABISTE (also known as Tranquilino Laviste) represented by:
(1) GERARDO LABISTE, representing the Heirs of Gregorio Labiste;
(2) OBDULLIA LABISTE GABUAN, representing the heirs of Juan Labiste;
(3) VICTORIA G. CHIONG, representing the Heirs of Eulalia Labiste;
(4) APOLINARIA LABISTE YLAYA, representing the Heirs of Nicolasa Labiste;
(5) DEMOSTHENES LABISTE, representing the Heirs of Gervacio Labiste;
(6) ALEJANDRA LABISTE; representing the Heirs of SINFROCIO LABISTE, and
(7) CLOTILDE LABISTE CARTA, representing the Heirs of Andres Labiste, Petitioners,
vs.
HEIRS OF JOSE LABISTE, survived by his children,
(1) ZACARIAS LABISTE, deceased and survived by his children, namely: CRESENCIA
LABISTE and EUFRONIO LABISTE;
(2) BERNARDINO LABISTE, deceased and survived by his children, namely: POLICARPIO
LABISTE, BONIFACIO LABISTE, FELIX LABISTE, GABINA LABISTE, CAYETANA LABISTE
and ISABEL LABISTE;
(3) LUCIA LABISTE, deceased and survived by her children, namely: ISAAC LABISTE,
GENARO LABISTE, BRAULIA LABISTE, BRAULIO LABISTE, ASUNCION LABISTE,
ALFONSO LABISTE and CLAUDIA LABISTE;
(4) EPIFANIO LABISTE and CLAUDIA LABISTE; deceased and survived by his children,
namely SILVESTRE LABISTE, PAULA LABISTE and GERARDA LABISTE;
(5) ANA LABISTE, deceased and survived by her children, namely: MAXIMO LABISTE,
MOISES LABISTE, GERVACIO LABISTE, SATURNINA LABISTE and QUIRINO LABISTE;
(6) SEVERO LABISTE, deceased and survived by his children, Namely: FELIX LABISTE,
RUFINA LABISTE, SIMPLICIO LABISTE, VICENTE LABISTE and PATRICIO
LABISTE, Respondents.
DECISION
TINGA, J.:
This is a petition for review1 under Rule 45 of the Rules of Court of the Court of Appeals’ Decision
dated 30 June 20032 in CA-G.R. CV No. 65829. reversing the decision of the Regional Trial Court
(RTC) of Cebu City, Branch 9. The appellate court denied petitioners’ 3 motion for reconsideration
in a Resolution dated 15 January 2004.
The factual antecedents are as follows:
On 29 September 1919, the late Epifanio Labiste (Epifanio), on his own and on behalf of his
brothers and sisters who were the heirs of Jose Labiste (Jose), purchased from the Bureau of
Lands Lot No. 1054 of the Banilad Friar Lands Estate, with an area of 13,308 square meters,
located at Guadalupe, Cebu City for ₱36.00. 4 Subsequently, on 9 June 1924, then Bureau of
Lands Director Jorge B. Vargas executed Deed of Conveyance No. 12536 selling and ceding Lot
No. 1054 to Epifanio and his brothers and sisters who were the heirs of Jose. 5
After full payment of the purchase price but prior to the issuance of the deed of conveyance,
Epifanio executed an Affidavit6 (Affidavit of Epifanio) in Spanish on 10 July 1923 affirming that he,
as one of the heirs of Jose, and his uncle and petitioners’ predecessor-in-interest, Tranquilino
Labiste (Tranquilino), then co-owned Lot No. 1054 because the money that was paid to the
government came from the two of them. Tranquilino and the heirs of Jose continued to hold the
property jointly.
Sometime in 1928, the Register of Deeds of Cebu City issued Original Certificate of Title No. 3878
for Lot No. 1054. On 2 May 1928, Engineer Espiritu Bunagan (Engr. Bunagan), Deputy Public
Land Surveyor, subdivided Lot No. 1054 into two lots: Lot No. 1054-A with an area of 6,664 square
meters for Tranquilino and Lot No. 1054-B with an area of 6,664 square meters for Epifanio. The
subdivision plan prepared by Engr. Bunagan was approved by Jose P. Dans, Acting Director of
Lands on 28 October 1928.7
Subsequently, on 18 October 1939, the heirs of Tranquilino 8 purchased the one-half (1/2) interest
of the heirs of Jose9 over Lot No. 1054 for ₱300.00, as evidenced by the Calig-onan sa
Panagpalit10 executed by the parties in the Visayan dialect. The heirs of Tranquilino immediately
took possession of the entire lot.
When World War II broke out, the heirs of Tranquilino fled Cebu City and when they came back
they found their homes and possessions destroyed. The records in the Office of the Register of
Deeds, Office of the City Assessor and other government offices were also destroyed during the
war. Squatters have practically overrun the entire property, such that neither petitioners nor
respondents possess it.
In October 1993, petitioners learned that one of the respondents, 11 Asuncion Labiste, had filed on
17 September 1993 a petition for reconstitution of title over Lot No. 1054. Petitioners opposed the
petition at first but by a compromise agreement between the parties dated 25 March 1994,
petitioners withdrew their opposition to expedite the reconstitution process. Under the compromise
agreement, petitioners were to be given time to file a complaint so that the issues could be
litigated in an ordinary action and the reconstituted title was to be deposited with the Clerk of Court
for a period of sixty (60) days to allow petitioners to file an action for reconveyance and to
annotate a notice of lis pendens. The Register of Deeds of Cebu City issued the reconstituted title,
TCT No. RT-7853,12 in the name of "Epifanio Labiste, married to Tomasa Mabitad, his brothers and
sisters, heirs of Jose Labiste" on 14 December 1994. However, respondents did not honor the
compromise agreement.
Petitioners filed a complaint13 for annulment of title seeking the reconveyance of property and
damages on 13 January 1995, docketed as Civil Case No. CEB-16943, with the RTC of Cebu City.
Respondents claimed that the Affidavit of Epifanio and the Calig-onan sa Panagpalit were
forgeries and that petitioners’ action had long prescribed or barred by laches. 14
The RTC in a Decision dated 23 August 199915 ruled in favor of petitioners. After evaluating the
documents presented by petitioners, the RTC found that they are genuine and authentic as
ancient documents and that they are valid and enforceable.16 Moreover, it held that the action had
not prescribed as the complaint was filed about a year after the reconstitution of the title by
respondents. The judicial reconstitution was even opposed by petitioners until a compromise
agreement was reached by the parties and approved by the RTC which ordered the reconstitution.
The RTC further held that the reconstituted title did not give any more right to respondents than
what their predecessors-in-interest actually had as it is limited to the reconstitution of the
certificate as it stood at the time of its loss or destruction.17
On appeal, the Court of Appeals, while affirming petitioners’ right to the property, nevertheless
reversed the RTC’s decision on the ground of prescription and laches. It affirmed the RTC’s
findings that the Affidavit and the Calig-onan sa Panagpalit are genuine and authentic, and that the
same are valid and enforceable documents.18 Citing Article 1144 of the Civil Code, it held that
petitioners’ cause of action had prescribed for the action must be brought within ten (10) years
from the time the right of action accrues upon the written contract which in this case was when
petitioners’ predecessors-in-interest lost possession over the property after World War II. Also, the
lapse of time to file the action constitutes neglect on petitioners’ part so the principle of laches is
applicable.19
Hence, the present petition.
The genuineness and authenticity of the Affidavit of Epifanio and the Calig-onan sa Panagpalit are
beyond cavil. As we have ruled in a litany of cases, resort to judicial review of the decisions of the
Court of Appeals under Rule 45 is confined only to errors of law. 20 The findings of fact by the lower
court are conclusive absent any palpable error or arbitrariness. 21 The Court finds no reason to
depart from this principle. Moreover, it is a long settled doctrine that findings of fact of the trial
court, when affirmed by the Court of Appeals, are binding upon the Court. It is not the function of
the Supreme Court to weigh anew the evidence already passed upon by the Court of Appeals for
these are deemed final and conclusive and may not be reviewed on appeal. 22
The sole issue that the Court has to resolve is whether or not petitioners’ cause of action has
prescribed.
The Court of Appeals erred in applying the rules on prescription and the principle of laches
because what is involved in the present case is an express trust.
Trust is the right to the beneficial enjoyment of property, the legal title to which is vested in
another. It is a fiduciary relationship that obliges the trustee to deal with the property for the benefit
of the beneficiary.23 Trust relations between parties may either be express or implied. An express
trust is created by the intention of the trustor or of the parties. An implied trust comes into being by
operation of law.24
Express trusts are created by direct and positive acts of the parties, by some writing or deed, or
will, or by words either expressly or impliedly evincing an intention to create a trust. 25 Under Article
1444 of the Civil Code, "[n]o particular words are required for the creation of an express trust, it
being sufficient that a trust is clearly intended." The Affidavit of Epifanio is in the nature of a trust
agreement. Epifanio affirmed that the lot brought in his name was co-owned by him, as one of the
heirs of Jose, and his uncle Tranquilino. And by agreement, each of them has been in possession
of half of the property. Their arrangement was corroborated by the subdivision plan prepared by
Engr. Bunagan and approved by Jose P. Dans, Acting Director of Lands.
As such, prescription and laches will run only from the time the express trust is repudiated. The
Court has held that 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 must be shown that: (a)
the trustee has performed unequivocal acts of repudiation amounting to an ouster of the cestui
que trust; (b) such positive acts of repudiation have been made known to the cestui que trust, and
(c) the evidence thereon is clear and
conclusive.26http://sc.judiciary.gov.ph/jurisprudence/2007/november2007/148788.htm -
_ftn Respondents cannot rely on the fact that the Torrens title was issued in the name of Epifanio
and the other heirs of Jose. It has been held that a trustee who obtains a Torrens title over
property held in trust by him for another cannot repudiate the trust by relying on the
registration.27 The rule requires a clear repudiation of the trust duly communicated to the
beneficiary. The only act that can be construed as repudiation was when respondents filed the
petition for reconstitution in October 1993. And since petitioners filed their complaint in January
1995, their cause of action has not yet prescribed, laches cannot be attributed to them.
It is hornbook doctrine that laches is a creation of equity and its application is controlled by
equitable considerations. Laches cannot be used to defeat justice or perpetrate fraud and
injustice.28 Neither should its application be used to prevent the rightful owners of a property from
recovering what has been fraudulently registered in the name of
another.http://sc.judiciary.gov.ph/jurisprudence/2006/mar2006/G.R. No. 157954.htm - _ftn 29 The
equitable remedy of laches is, therefore, unavailing in this case.
However, to recover the other half of the property covered by the private Calig-onan sa Panagpalit
and to have it registered on the title of the property, petitioners should have filed an action to
compel30 respondents, as heirs of the sellers in the contract,31 to execute a public deed of sale. A
conveyance of land made in a private document does not affect its validity. Article 1358,like its
forerunner Article 1280 of the Civil Code of Spain, does not require the accomplishment of the acts
or
contracts in a public instrument in order to validate the act or contract but only to insure its
efficacy,32 so that after the existence of said contract has been admitted, the party bound may be
compelled to execute the proper document. 33 But even assuming that such action was filed by
petitioners, the same had already prescribed.1avvphi1
It is settled that only laws existing at the time of the execution of a contract are applicable thereto
and not later statutes, unless the latter are specifically intended to have retroactive
effect.34 Consequently, it is the Old Code of Civil Procedure (Act No. 190) which applies in this
case since the Calig-onan sa Panagpalit was executed on 18 October 1939 while the New Civil
Code took effect only on 30 August 1950. And section 43 of Act No. 190, like its counterpart Article
1144 of the New Civil Code, provides that action upon a written contract must be filed within ten
years.35
WHEREFORE, the petition is PARTIALLY GRANTED. The Decision of the Court of Appeals dated
30 June 2003 in CA-G.R. CV No. 65829 is REVERSED and SET ASIDE and the Decision of the
Regional Trial Court of Cebu City, Branch 9 dated 23 August 1999 is

REINSTATED with MODIFICATION in petitioners are hereby DECLARED the absolute owners of
one-half of Lot No. 1054 or Lot No. 1054-A under TCT No. RT-7853. The Register of Deeds of
Cebu City is hereby ORDERED to CANCEL TCT No. RT-7853 in part and issue a new Transfer
Certificate of Title to petitioners, heirs of Tranquilino Labiste, covering Lot No. 1054-A. No costs.

SO ORDERED.