VOL.

123, JUNE 28, 1983

Roa, Jr. vs. Court of Appeals

*

No. L27294. June 28, 1983.

ALFREDO ROA, JR., LETICIA ROA DE BORJA, RUBEN

ROA, CORNELIO ROA and ELSIE ROACACNIO (as heirs
of the late Alfredo Roa, Sr.), petitioners, vs. HON. COURT
OF APPEALS and the spouses JOAQUIN CASIO and
CUSTODIA VALDEHUESA, respondents.
Compromise Agreement Contracts Land Registration A
person, though not a party to a compromise agreement executed in
the land registration case, but who was benefited by it cannot
unjustly avoid the effects of said compromise.On the first
assigned error, We reject the contention of the petitioners that
Alfredo Roa, Sr. was not bound by the compromise agreement for
not being a participant or signatory thereto. It may be true that
Alfredo Roa, Sr. did not sign the compromise agreement, Exh. 1,
for he was then in Manila working as a newspaperman but he
certainly benefited from
_______________
*

SECOND DIVISION.

SUPREME COURT REPORTS ANNOTATED

Roa, Jr. vs. Court of Appeals

the effects of the compromise agreement which obliged Pablo

Valdehuesa to withdraw, as he did withdraw his opposition to the
registration of the Roa property under the Torrens system. The
Roa property was subsequently registered without opposition and
title was issued thereto in the name of Alfredo Roa, his brother
Zosimo and his sisters Trinidad, Esperanza and Concepcion, all

surnamed Roa as coowners thereof. Certainly, the Roas may not

escape compliance from their obligation under the compromise
agreement by partitioning the property and assigning the
property in dispute as part of the share of the petitioners.
Moreover, it will be a pure and simple case of unjust enrichment
for petitioners to acquire and own the property of Pablo
Valdehuesa, without paying the value thereof or exchanging the
land with another with an equal area as originally agreed.
Same, Same Trust An express trust cannot be deemed created
unless there is a sufficiently clear intention to create a trust. No
trust was created in the case at bar.With respect to the second
assignment of error, We do not agree with the holding of the
respondent appellate court that an express trust was created
between the parties by reason of the compromise agreement
entered into between them. Express trusts are created by the
intention of the trustor or one of the parties (Article 1441, New
Civil Code). While no particular words are required for the
creation of an express trust, it being sufficient that a trust is
clearly intended (Article 1444, New Civil Code), in the case at bar,
We find no direct and positive intent to create a trust relationship
between the parties to the compromise agreement under which
Pablo Valdehuesa agreed to withdraw his opposition to the
application for registration upon the commitment of the Roas to
give Valdehuesa another piece of land of equal area or pay its
price of P400.00. It seems clear to Us that the Roas under the
compromise agreement did not commit themselves to hold the lot
claimed by Pablo Valdehuesa for Pablo Valdehuesa and in Pablo
Valdehuesas name.
Same Same Same No implied trust can be inferred where
there was no fraud or mistake involved, but only a voluntary
agreement of one party to withdraw his opposition to a petition for
land registration.We rule that Art. 1456 is not applicable
because it is quite clear that the property of Pablo Valdehuesa
was acquired by the Roas not through mistake or fraud but by
reason of the voluntary agreement of Valdehuesa to withdraw his
opposition to the registration of the land under the Torrens
system.

VOL. 123, JUNE 28, 1983

Roa, Jr. vs. Court of Appeals

Same Trusts The Civil Code authorizes the recognition of a

trust relationship other than those enumerated in Arts. 1448 to
1456, but such recognition is subject to the limitation set forth in
Art. 1442, NCC.While it is Our ruling that the compromise
agreement between the parties did not create an express trust nor
an implied trust under Art. 1456 of the New Civil Code, We may,
however, make recourse to the principles of the general law of
trusts, insofar as they are not in conflict with the New Civil Code,
Code of Commerce, the Rules of Court and special laws which
under Art. 1442 of the New Civil Code are adopted. While Articles
1448 to 1456 of the New Civil Code enumerates cases of implied
trust, Art. 1447 specifically stipulates that the enumeration of the
cases of implied trust does not exclude others established by the
general law of trusts, but the limitations laid down in Art. 1442
shall be applicable.
Same Same Kinds of trusts recognized under American law.
In American law and jurisprudence, We find the following
general principles: A constructive trust, otherwise known as a
trust ex maleficio, a trust ex delicto, a trust de son tort, an
involuntary trust, or an implied trust, is a trust by operation of
law which arises contrary to intention and in invitum, against one
who, by fraud, actual or constructive, by duress or abuse of
confidence, by commission of wrong, or by any form of
unconscionable conduct, artifice, concealment, or questionable
means, or who in any way against equity and good conscience,
either has obtained or holds the legal right to property which he
ought not, in equity and good conscience, hold and enjoy. It is
raised by equity to satisfy the demands of justice. However, a
constructive trust does not arise on every moral wrong in
acquiring or holding property or on every abuse of confidence in
business or other affairs ordinarily such a trust arises and will be
declared only on wrongful acquisitions or retentions of property of
which equity, in accordance with its fundamental principles and
the traditional exercise of its jurisdiction or in accordance with
statutory provision, takes cognizance. It has been broadly ruled
that a breach of confidence, although in business or social
relations, rendering an acquisition or retention of property by one
person unconscionable against another, raises a constructive
trout. (76 Am. Jur. 2d, Sec. 221, pp. 446447).
Trust Trust relationship may be recognized in equity to the
end that unjust enrichment is prevented.And specifically
applicable to the case at bar is the doctrine that A constructive
trust is substantially an appropriate remedy against unjust
enrichment. It is
6

SUPREME COURT REPORTS ANNOTATED

Roa, Jr. vs. Court of Appeals

raised by equity in respect of property, which has been acquired

by fraud, or where, although acquired originally without fraud, it
is against equity that it should be retained by the person holding
it. (76 Am. Jur. 2d, Sec. 222, p. 447). The above principle is not in
conflict with the New Civil Code, Code of Commerce, Rules of
Court and special laws. And since We are a court of law and of
equity, the case at bar must be resolved on the general principles
of law on constructive trust which basically rest on equitable
considerations in order to satisfy the demands of justice, morality,
conscience and fair dealing and thus protect the innocent against
fraud. As the respondent court said, It behooves upon the courts
to shield fiduciary relations against every manner of chickanery
or detestable design cloaked by legal technicalities.
Same Prescription Prescriptive period of 10 years in
equitable trusts is counted from the time the trust is repudiated.
Admittedly, Pablo Valdehuesa and his heirs remained in
possession of the property in question in 1925 when by reason of
the compromise agreement Valdehuesa withdrew his opposition
to the registration applied for by the Roas, for which reason the
latter were able to obtain a Torrens title to the property in their
name. However, Valdehuesa and his heirs continued their
possession of the land until he sold the property in question to
private respondents herein on April 30, 1930 and the latter
remained in possession and were never disturbed in their
occupancy until the filing of the original complaint for recovery of
possession on Sept. 1, 1955 after demand was made upon them
when a relocation survey initiated by petitioners established that
private respondents were actually occupying about 2 hectares on
the eastern end of the property. Upon these facts, the prescriptive
period may only be counted from the time petitioners repudiated
the trust relation in 1955 upon the filing of the complaint for
recovery of possession against private respondents so that the
counterclaim of the private respondents contained in their
amended answer of June 12, 1956 wherein they asserted absolute
ownership of the disputed realty by reason of their continuous
and adverse possession of the same is well within the tenyear
prescriptive period.

APPEAL by certiorari to review the decision of the Court of

Appeals.
The facts are stated in the opinion of the Court.

Alberto Cacnio for petitioners.

Melecio Virgilio Law Office for respondents.
7

VOL. 123, JUNE 28, 1983

Roa, Jr. vs. Court of Appeals

GUERRERO, J.:
Appeal by 1way of certiorari from the Decision of the Court
of Appeals in CAG.R. No. 34746R entitled Alfredo Roa,
PlaintiffAppellant, versus Joaquin Casio, et al.,
DefendantsAppellees,
and from the Resolution of the said
2
Court
denying
plaintiffappellants
motion
for
reconsideration of the said Decision.
On September 1, 1955, an action for recovery of
possession of a parcel of land was filed before the Court of
First Instance of Misamis Oriental by Alfredo Roa, Sr. (now
deceased and subsequently substituted by his heirs, the
herein petitioners) against respondent spouses, Joaquin
Casio and Custodia Valdehuesa (real name appears to be
Teodosia Valdehuesa), successorsininterest of one Pablo
Valdehuesa, now deceased.
In his complaint, Alfredo Roa, Sr. alleged that the said
land is agricultural that it is situated in Bugo, formerly
within the municipality of Tagoloan, Misamis Oriental,
now comprised within the limits of the City of Cagayan de
Oro that it is registered in his name under Original
Certificate of Title No. T21D that he found the private
respondents occupying said land. He prayed that
possession of the same be returned to him and that he be
awarded actual and moral damages in the sum of
P10,000.00.
In answer to the complaint, respondent spouses alleged
that the land in question formerly belonged to one Pablo
Valdehuesa, father of respondent Custodia (Teodosia)
Valdehuesa and now deceased that it was however titled
in the name of Alfredo Roa, Sr., Trinidad Reyes Roa,
Esperanza Roa de Ongpin, Concepcion Roa and her
husband Zosimo Roa in Land Registration Case No. 12,
G.R.L.O. Record No. 10003 of the Court of First Instance of
Misamis Oriental by virtue of an agreement entered into
between the Roas and said Pablo
_______________

Third Division: Yatco, J., ponente Capistrano, J. and Caizares, J.,

concurring.
2

Special Division of Five: Yatco, J., ponente Caizares, J., concurring

Gatmaitan, J., concurs in a separate opinion Capistrano, J., and

Alvendia, J., dissenting.
8

SUPREME COURT REPORTS ANNOTATED

Roa, Jr. vs. Court of Appeals

Valdehuesa that the conditions of the said compromise

agreement were never complied with by the Roas,
notwithstanding the death of Pablo Valdehuesa in 1928
and despite repeated demands for compliance thereof that
the heirs of said Pablo Valdehuesa sold the land in
question to them on April 30, 1930, after rescinding the
aforementioned compromise agreement and that they now
enjoy the privileges of absolute ownership over said land by
reason of their continuous and adverse possession thereof
since time immemorial. By way of counterclaim, the
respondents prayed for the reconveyance of the said parcel
of land contending that the compromise agreement created
an implied trust between the parties to it, and for damages
in the amount of P10,000.00.
In answer to private respondents counterclaim, Alfredo
Roa, Sr. maintained that the heirs of Pablo Valdehuesa
cannot rescind the compromise agreement by their own act
alone or without going to court and that the alleged sale of
the said heirs to private respondents was null and void, in
view of the fact that respondent spouses knew that the
land was then titled in the name of the Roas under Act 496.
On December 22, 1959, the parties submitted to the
Court a quo an agreed Stipulation of Facts, to wit:
STIPULATION OF FACTS
That parties herein, assisted by their respective attorneys, have
agreed on the following facts:
1. That the plaintiff and the defendants are all of age and
with capacity to sue and be sued.
2. That the plaintiff and his brothers and sisters Trinidad
Reyes Roa, Esperanza Roa de Ongpin, Concepcion Roa
and Zosimo Roa, husband of the latter, were the owners
proindiviso of a parcel of land located in Tagoloan,
Misamis Oriental, containing an area of several hundred
hectares, and sometime in 1925, and for the purpose of

registering their title to said parcel of land, the said co

owners filed an application with the Court of First
Instance of Misamis Oriental, and said application was
docketed in said Court as Expediente No. 12, G.L.R.O.
Record No. 10003.
3. That in the application as well as in the plans
accompanying said application in Expediente No. 12,
G.L.R.O. No. 10003, was
9

VOL. 123, JUNE 28, 1983

Roa, Jr. vs. Court of Appeals

included a parcel of land which is now the portion in

litigation in this case.
4. That one Pablo Valdehuesa filed an opposition in said
Expediente No. 12, G.L.R.O. Record No. 10003, claiming
absolute and exclusive ownership over a portion which is
now the property under litigation.
5. That sometime during the year 1925, the coowners, said
Concepcion Roa, Esperanza Roa de Ongpin and Trinidad
Reyes Roa and Zosimo Roa entered into an agreement
with the said Pablo Valdehuesa, and the terms of their
agreement are contained in the document hereto attached,
made a part hereof, and marked as Exhibit 1.
6. That in compliance with his obligation under and by
virtue of said Exhibit 1 the said Pablo Valdehuesa
withdrew the opposition filed by him in said case
Expediente No. 12, G.L.R.O. Record No. 10003, and as the
result of said withdrawal, the plaintiff and his coowners
succeeded in registering their title to their property,
including the portion owned by Pablo Valdehuesa as
claimed in his opposition.
7. That the said Pablo Valdehuesa died in May of 1928, and
upon his death his estate passed to the ownership of his
widow and legitimate children including all his rights
under said Exhibit 1 to the property in question.
8. That since then the property in question has been in the
possession of the defendants, and their possession
together with the possession of their predecessors in said
property has been open, continuous and uninterrupted to
this date.
9. That sometime after the issuance of title in favor of the
plaintiff (Transfer Certificate of Title No. 21A) and his
aforementioned brothers and sisters covering the parcel of
land subject matter of the application filed by them in

Expediante No. 12, G.L.R.O. Record No. 10003, the said

plaintiff and his brothers and sisters partitioned among
themselves said property, and plaintiff was adjudicated a
share in said property, of which the parcel of land covered
by the opposition of Pablo Valdehuesa withdrawn under
the terms of Exhibit 1 is a part or portion of said charge,
and covered by T21D (copy attached as Exh. A).
10. That the portion in litigation as correctly described in
paragraph 3 of the complaint is covered by the certificate
of title referred to above.
10

10

SUPREME COURT REPORTS ANNOTATED

Roa, Jr. vs. Court of Appeals

11. That in 1955 the plaintiff had a surveyor relocate the

corners and boundaries of his land as described in his title
and that the portion of about 2 hectares on the eastern
end of the land is in the possession and is actually
occupied by the defendant. This is the portion in litigation
described in par. 3 of the complaint.
12. That Expediente No. 12, G.L.R.O. Record No. 10003 have
been totally destroyed during the last World War, and the
parties reserve the right to present additional evidence
during the hearing of this case.
Cagayan de Oro City, December 22, 1959. (Sgd.) ALFREDO
ROA Plaintiff (Sgd.) HERNANDO PINEDA (Attorney for
Plaintiff) (Sgd.) JOAQUIN CASIO (Sgd.) CUSTODIA
VALDEHUESA (Defendants) (Sgd.) MANUEL C. FERNANDEZ
(Sgd.) CONCORDIO C. DIEL (Attorney for Defendants)

The aforesaid compromise agreement mentioned in

paragraph 5 of the agreed Stipulation of Facts was
thereafter ratified on May 11, 1927 as shown in Exhibit 1
as follows:
SEPAN TODOS LOS QUE LA PRESENTE VIEREN: Que
nosotros, los abajo firmantes, mayores de edad hacemos const ar:
1. Que somos los dueos mancomunados de la propiedad
conocida por Terrenos de Bugu, en el municipio de
Tagoloan, provincia de Misamis.
2. Que en la tramitacion del Exp. No. 12, G.L.R.O., Record
No. 10003, para el registro de dicha propiedad, el Sr. Pablo
Valdehuesa del municipio de Tagoloan, que era uno de los
opositores, consintio en retirar su oposicion contra nuestra

citada solicitud de registro a condicion de que le

reconozcamos su dominio y propiedad sobre una parcela de
terreno dentro de la comprension de Bugu que el ocupaba,
o se le compre, y de otro modo se le compense al
reintegrarnos dicha parcela en tiempo oportuno. La
descripcion del terreno referido, cuya extension es de una
hectarea, cuarenta y nueve areas y cincuenta y
11

VOL. 123, JUNE 28, 1983

11

Roa, Jr. vs. Court of Appeals

nueve centiareas, aparece en el escrito de oposicion que

obra en el referido Exp. 12, y que luego fue retirado por
convenio de partes.
3. Por tanto, en complimiento de dicho convenio, y como
consecuencia del mismo, ratificamos lo que tenemos
prometido, para lo cual autorizamos al Sr. Zosimo Roa a
que busque y adquiera otro pedazo de terreno fuera de la
comprension de Bugu, de una hectarea, cuarenta y nueve
areas y cincuenta y nueve centiareas, poco mas o menos, y
que sea aceptable para el Sr. Pablo Valdehuesa, como
canje or permuta con la parcela que el ocupa en la
inteligencia de que el valor de compra no exceda de
P400.00 en su defecto, si no se encuentra un terreno que
sea satisfactorio para el Sr. Pablo Valdehuesa, se le
compensara el reintegro arriba citado en la mencionada
cantidad de P400.00.
4. Por su parte, el Sr. Pablo Valdehuesa, acepta todo lo
establecido en este documento, obligandose a respetarlo y
acatarlo. En testimonio de todo lo cual, firmamos el
presente documento en Cagayan de Misamis, hoy, 11 de
Mayo de 1927.
(Sgd.) Trinidad Roa de Reyes (Sgd.) Esperanza Roa de
Ongpin(Sgd.) Concepcion Roa (Sgd.) Zosimo RoaAlfredo RoaPablo
Valdehuesa

Pursuant to said Exhibit 1, Concepcion, Esperanza,

Trinidad and Zosimo, all surnamed Roa, agreed to replace
the land of Pablo Valdehuesa with another parcel of land
with an area of 1.4959 hectares to be given to Pablo
Valdehuesa in exchange for the land occupied by him, or if
said land was not acceptable to him, to pay him the amount
of P400.00. Neither of these undertakings was complied
with by the Roas and Pablo Valdehuesa continued in
possession of the land occupied by him until the same was

sold by the heirs of Pablo Valdehuesa to the respondent

spouses on April 30, 1930.
On March 6, 1964, the lower court rendered the decision
ordering the plaintiff Alfredo Roa to reconvey the land in
dispute to the defendants, now the respondent spouses, on
the ground that same could not have been registered in the
name of the plaintiff and his brother and sisters if not for
the
12

12

SUPREME COURT REPORTS ANNOTATED

Roa, Jr. vs. Court of Appeals

compromise agreement aforestated and further to pay said

defendants the amount of P1,000.00 as attorneys fees plus
costs.
On appeal taken by Alfredo Roa, the appellate court
affirmed the decision of the lower court and declared that
(a) the compromise agreement created an express trust
between the Roa brothers and sisters, including Alfredo,
Sr., (b) that the respondent spouses action for
reconveyance was imprescriptible on the authority of
Mirabiles, et al. v. Quito, et al., L14008, October 18, 1956
and (c) that Alfredo Roa cannot invoke the indefensibility
and imprescriptibility of the Torrens title issued in his
name for the land in dispute since the said title was
secured by him in breach of an express trust, and thus, the
Court ordered the reconveyance of the property within
fifteen (15) days from the finality of the decision.
Alfredo Roa, now substituted by his heirs, the herein
petitioners Alfredo Roa, Jr., Leticia Roa de Borja, Ruben
Roa, Cornelio Roa and Elsie RoaCacnio, moved to
reconsider the adverse decision. Acting on this motion for
reconsideration, the Court of Appeals in a majority
resolution denied the said motion, and while conceding that
the creation of an express trust leaves room for doubt, the
said Court ruled that the compromise agreement, at the
least gave rise to an implied trust under Art. 1456 of the
New Civil Code. Hence, petitioners filed this present
petition on the following assignment of errors:
I. The respondent Court of Appeals erred when it
ruled that Alfredo Roa, the petitioners predecessor
ininterest, was bound by the compromise
agreement (Exh. I) in the execution of which,
according to the Stipulation of Facts, said Alfredo
Roa neither participated nor signed.

II. On the assumption that the aforementioned

compromise agreement was binding upon Alfredo
Roa, the respondent Court of Appeals erred when it
held the said agreement, which stipulated the
conveyance of the property in dispute for a
consideration, as having established a trust
relationship between the parties to it.
III. The respondent Court of Appeals erred when it held
that the ruling in the case of Gerona, et al. vs. De
Guzman, G.R. No. L19060, May 29, 1964, is
inapplicable to the case at bar.
13

VOL. 123, JUNE 28, 1983

13

Roa, Jr. vs. Court of Appeals

On the first assigned error, We reject the contention of the

petitioners that Alfredo Roa, Sr. was not bound by the
compromise agreement for not being a participant or
signatory thereto. It may be true that Alfredo Roa, Sr. did
not sign the compromise agreement, Exh. 1, for he was
then in Manila working as a newspaperman but he
certainly benefited from the effects of the compromise
agreement which obliged Pablo Valdehuesa to withdraw, as
he did withdraw his opposition to the registration of the
Roa property under the Torrens system. The Roa property
was subsequently registered without opposition and title
was issued thereto in the name of Alfredo Roa, his brother
Zosimo and his sisters Trinidad, Esperanza and
Concepcion, all surnamed Roa as coowners thereof.
Certainly, the Roas may not escape compliance from their
obligation under the compromise agreement by partitioning
the property and assigning the property in dispute as part
of the share of the petitioners. Moreover, it will be a pure
and simple case of unjust enrichment for petitioners to
acquire and own the property of Pablo Valdehuesa, without
paying the value thereof or exchanging the land with
another with an equal area as originally agreed.
With respect to the second assignment of error, We do
not agree with the holding of the respondent appellate
court that an express trust was created between the parties
by reason of the compromise agreement entered into
between them. Express trusts are created by the intention
of the trustor or one of the parties (Article 1441, New Civil
Code). While no particular words are required for the
creation of an express trust, it being sufficient that a trust

is clearly intended (Article 1444, New Civil Code), in the

case at bar, We find no direct and positive intent to create a
trust relationship between the parties to the compromise
agreement under which Pablo Valdehuesa agreed to
withdraw his opposition to the application for registration
upon the commitment of the Roas to give Valdehuesa
another piece of land of equal area or pay its price of
P400.00. It seems clear to Us that the Roas under the
compromise agreement did not commit themselves to hold
the lot claimed by Pablo Valdehuesa for Pablo Valdehuesa
and in Pablo Valdehuesas name.
14

14

SUPREME COURT REPORTS ANNOTATED

Roa, Jr. vs. Court of Appeals

If the compromise agreement did not result to an express

trust relationship, did it, however, give rise to an implied
trust? Private respondents claim that under the terms of
the compromise agreement, the land claimed by Pablo
Valdehuesa should be deemed held in trust by the Roas
when the latter failed to relocate him or pay the price
therefor. The respondent appellate
court took private
3
respondents position, and opined, thus
It could thus be gleaned that had it not been for the promise of
the Roas contained in Exhibit I, Valdehuesa would not have been
induced to withdraw his opposition in the land registration case.
When, therefore, the Roas turned their back to a solemn
agreement entered in a court proceedings, they were guilty of
fraud.
Fraud is every kind of deception, whether in the form of insidious
machinations, manipulations, concealments or misrepresentations, for
the purpose of leading another party into error and then execute a
particular act. It must have a determining influence on the consent of the
victim. (4 Tolentino, Civil Code, p. 462)

It results from the foregoing that although the creation of an

express trust leaves room for doubt, by operation of law, an
implied trust is created.
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. (N.C.C.)

We cannot sustain the holding of the respondent appellate

court in its Resolution denying petitioners motion for

reconsideration that by operation of law an implied trust

was created under the terms of the compromise agreement
in the light of Article 1456 of the New Civil Code cited
above. We rule that Art. 1456 is not applicable because it is
quite clear that the property of Pablo Valdehuesa was
acquired by the Roas not through mistake or fraud but by
reason of the voluntary agreement of Valdehuesa to
withdraw his opposition to the registration of the land
under the Torrens system.
_______________
3

Rollo, p. 77.
15

VOL. 123, JUNE 28, 1983

15

Roa, Jr. vs. Court of Appeals

There is incontrovertible evidence that the Roas intended

to abide by the compromise agreement at the time of the
execution of the same. The private respondents themselves
introduced additional evidence which showed that on May
11, 1927, Trinidad Roa, Esperanza Roa de Ongpin,
Concepcion Roa and Zosimo Roa confirmed in writing the
terms and conditions of the agreement they had entered
into with Pablo Valdehuesa in the land registration
proceedings. Even the respondent appellate court expressly
determined the aforesaid failure of the Roas to comply with
the terms of the compromise agreement to be an
afterthought thus,
The change of mind of the
plaintiffappellant later is of no
4
moment in the case at bar.

While it is Our ruling that the compromise agreement

between the parties did not create an express trust nor an
implied trust under Art. 1456 of the New Civil Code, We
may, however, make recourse to the principles of the
general law of trusts, insofar as they are not in conflict
with the New Civil Code, Code of Commerce, the Rules of
Court and special laws which under Art. 1442 of the New
Civil Code are adopted. While Articles 1448 to 1456 of the
New Civil Code enumerates cases of implied trust, Art.
1447 specifically stipulates that the enumeration of the
cases of implied trust does not exclude others established
by the general law of trusts, but the limitations laid down
in Art 1442 shall be applicable.

In American law and jurisprudence, We find the

following general principles:
A constructive trust, otherwise known as a trust ex maleficio, a
trust ex delicto, a trust de son tort, an involuntary trust, or an
implied trust, is a trust by operation of law which arises contrary
to intention and in invitum, against one who, by fraud, actual or
constructive, by duress or abuse of confidence, by commission of
wrong, or by any form of unconscionable conduct, artifice,
concealment, or questionable means, or who in any way against
equity and good conscience, either has obtained or holds the legal
right to property which he ought not, in equity and good
conscience,
_______________
4

Decision, C.A., p. 7.

16

16

SUPREME COURT REPORTS ANNOTATED

Roa, Jr. vs. Court of Appeals

hold and enjoy. It is raised by equity to satisfy the demands of

justice. However, a constructive trust does not arise on every
moral wrong in acquiring or holding property or on every abuse of
confidence in business or other affairs ordinarily such a trust,
arises and will be declared only on wrongful acquisitions or
retentions of property of which equity, in accordance with its
fundamental principles and the traditional exercise of its
jurisdiction or in accordance with statutory provision, takes
cognizance. It has been broadly ruled that a breach of confidence,
although in business or social relations, rendering an acquisition
or retention of property by one person unconscionable against
another, raises a constructive trust. (76 Am. Jur. 2d, Sec. 221, pp.
446447).

And specifically applicable to the case at bar is the doctrine

that A constructive trust is substantially an appropriate
remedy against unjust enrichment. It is raised by equity in
respect of property, which has been acquired by fraud, or
where, although acquired originally without fraud, it is
against equity that it should be retained by the person
holding it. (76 Am. Jur. 2d, Sec. 222, p. 447).
The above principle is not in conflict with the New Civil
Code, Code of Commerce, Rules of Court and special laws.
And since We are a court of law and of equity, the case at
bar must be resolved on the general principles of law on
constructive trust which basically rest on equitable

considerations in order to satisfy the demands of justice,

morality, conscience and fair dealing and thus protect the
innocent against fraud. As the respondent court said, It
behooves upon the courts to shield fiduciary relations
against every manner of chickanery or detestable design
cloaked by legal technicalities.
The next point to resolve is whether the counterclaim of
private respondents for the reconveyance of the property in
dispute has already prescribed in the light of established
jurisprudence that the right to enforce an implied trust
prescribes in ten years.
Admittedly, Pablo Valdehuesa and his heirs remained in
possession of the property in question in 1925 when by
reason of the compromise agreement Valdehuesa withdrew
his opposition to the registration applied for by the Roas,
for which reason the latter were able to obtain a Torrens
title to
17

VOL. 123, JUNE 28, 1983

17

Roa, Jr. vs. Court of Appeals

the property in their name. However, Valdehuesa and his

heirs continued their possession of the land until he sold
the property in question to private respondents herein on
April 30, 1930 and the latter remained in possession and
were never disturbed in their occupancy until the filing of
the original complaint for recovery of possession on Sept. 1,
1955 after demand was made upon them when a relocation
survey initiated by petitioners established that private
respondents were actually occupying about 2 hectares on
the eastern end of the property. Upon these facts, the
prescriptive period may only be counted from the time
petitioners repudiated the trust relation in 1955 upon the
filing of the complaint for recovery of possession against
private respondents so that the counterclaim of the private
respondents contained in their amended answer of June 12,
1956 wherein they asserted absolute ownership of the
disputed realty by reason of their continuous and adverse
possession of the same is well within the tenyear
prescriptive period.
Finally, the case at bar is quite similar to the case of
Dolores Pacheco vs. Santiago Arro, 85 Phil. 505, wherein
the claim to the lots in the cadastral case was withdrawn
by the respondents relying upon the assurance and promise
made in open court by Dr. M. Y. in behalf of J. Y. y R., the
predecessorininterest of the petitioners and the Court

held that a trust or a fiduciary relation between them

arose, or resulted therefrom, or was created thereby and
the trustee cannot invoke the statute of limitations to bar
the action and defeat the right of the cestuis que trustent.
(Cited also in Tolentino, Civil Code of the Philippines, Vol.
IV, p. 627).
WHEREFORE, IN VIEW OF THE FOREGOING, the
judgment appealed from is hereby AFFIRMED.
SO ORDERED.
Concepcion, Jr., De Castro and Escolin, JJ., concur.
Makasiar (Chairman) and Abad Santos, JJ., took
no part.
Aquino, J., in the result.
Judgment affirmed.
18

18

SUPREME COURT REPORTS ANNOTATED

Limsico vs. Bautista

Notes.A clear intention to create a trust must be

shown. It must be manifested with certainty and not from
loose or vague declarations and circumstances. (Medina vs.
Court of Appeals, 109 SCRA 437.)
The legal effect of an agreement to preserve the
properties in coownership is to create an express trust
among the heirs as coowners of the properties in question.
(Sotto vs. Teves, 86 SCRA 154.)
Under the law on trust, it is not necessary, as petitioner
insists, that the document expressly state and provide for
the express trust, for no particular words are required for
the creation of an express trust, it being sufficient that a
trust is clearly intended. (Sotto vs. Teves, 86 SCRA 154.)
Where real property was registered through fraud, an
implied trust is created and the offended party may sue
within a period of 10 years. (Ruiz vs. Court of Appeals, 79
SCRA 525.)
There is a clear repudiation of a trust where one who is
an apparent administrator of property causes the
cancellation of the title thereto in the name of the apparent
beneficiaries and gets a new certificate of title in his own
name. (Carantes vs. Court of Appeals, 76 SCRA 514.)
o0o

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