FACTS:
Before the grant of her application for private sale of Lot 5679, a
friar land, the beautiful Maxima Caballero executed a document entitled
"Agreement of Partition," wherein she stipulated to transfer
one-third (1/3) of the lot to and accepted by Paciencia Sabellano, her aunt.
When the application was approved, Maxima failed to transfer the agreed portion
to Paciencia who took possession thereof. Paciencia thereafter sold the same to
Dalmacio Secuya. When Paciencia died, her only heir, Ramon Sabellano,
executed a private document, "Deed of Confirmation of Sale,"
confirming the sale between Paciencia and Dalmacio. The document was, however,
lost. Meanwhile, Maxima sold the entire lot to Silverio Aro, husband of Cesaria
Caballero. Upon Silverio's death, the lot was transferred to Cesaria from whom
respondent bought the lot. Respondent was assured that petitioners who were
occupying a portion of the land were tenants. A clean title to the whole lot
was transferred to respondent. Petitioners, heirs of Dalmacio Secuya,
filed an action for quieting of title on the ground that respondent's title is
a cloud on their title as owners and possessors of the property subject of
litigation. They claimed that they had been occupying the property for
forty-seven years though they did not pay the land taxes. The trial court
rendered judgment against respondent. It was affirmed, on appeal, by the Court
of Appeals.
ISSUES:
1. Whether or not the Agreement is one of
partition
2. Whether or not there was a repudiation of the Express Trust
HELD:
(1) NO. It was 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. 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. The present Agreement
of Partition involves an express trust. 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." That Maxima
Caballero bound herself to give one third of Lot No. 5629 to Paciencia
Sabellona upon the approval of the former's application is clear from the terms
of the Agreement. Likewise, it is evident that Paciencia acquiesced to the
covenant and is thus bound to fulfill her obligation therein. As a result of
the Agreement, Maxima Caballero held the portion specified therein as belonging
to Paciencia Sabellona when the application was eventually approved and a sale
certificate was issued in her name. Thus, she should have transferred the same
to the latter, but she never did so during her lifetime. Instead, her heirs
sold the entire Lot No. 5679 to Silvestre Aro in 1955.
(2)YES. While no time limit
is imposed for the enforcement of rights under express trusts, prescription
may, however, bar a beneficiary's action for recovery, if a repudiation of the
trust is proven by clear and convincing evidence and made known to the beneficiary.
There was a repudiation of the express
trust when the heirs of Maxima Caballero failed to deliver or transfer the
property to Paciencia Sabellona, and instead sold the same to a third person
not privy to the Agreement. In the memorandum of incumbrances of TCT No.
3087, issued in the name of Maxima, there was no notation of the Agreement
between her and Paciencia. Equally important, the Agreement was not registered;
thus, it could not bind third persons. Neither was there any allegation that
Silvestre Aro, who purchased the property from Maxima's heirs, knew of it.
Consequently, the subsequent sales transactions involving the land in dispute
and the titles covering it must be upheld, in the absence of proof that the
said transactions were fraudulent and irregular.
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