Labiste v. Labiste
REITERATIONFacts
The Antecedents: On September 29, 1919, Epifanio Labiste, on behalf of his co-heirs of Jose Labiste, purchased Lot No. 1054 from the Bureau of Lands. Subsequently, on July 10, 1923, Epifanio executed an Affidavit affirming that he and his uncle, Tranquilino Labiste (petitioners' predecessor-in-interest), co-owned the lot, with the purchase money coming from both. A subdivision plan in 1928 divided the lot into Lot No. 1054-A for Tranquilino and Lot No. 1054-B for Epifanio. On October 18, 1939, the heirs of Tranquilino purchased the one-half interest of the heirs of Jose over Lot No. 1054. During World War II, records were destroyed, and squatters occupied the property. In October 1993, petitioners learned that respondent Asuncion Labiste filed a petition for reconstitution of title. Petitioners initially opposed but withdrew their opposition based on a compromise agreement dated March 25, 1994, which stipulated that petitioners would be given time to file a complaint for reconveyance. A reconstituted title, TCT No. RT-7853, was issued in the name of "Epifanio Labiste, married to Tomasa Mabitad, his brothers and sisters, heirs of Jose Labiste." Respondents allegedly did not honor the compromise agreement. Procedural History: Petitioners filed a complaint for annulment of title, reconveyance, and damages on January 13, 1995. The Regional Trial Court (RTC) ruled in favor of petitioners, finding the Affidavit of Epifanio and the Calig-onan sa Panagpalit to be genuine, valid, and enforceable, and holding that the action had not prescribed. The Court of Appeals (CA) reversed the RTC, ruling that the action had prescribed and was barred by laches, despite affirming the genuineness of the documents. The CA held that the cause of action prescribed ten years from the loss of possession after World War II. The Petition: Petitioners seek review of the CA's decision, arguing that the CA erred in applying the rules on prescription and laches.
Issue(s)
Whether the petitioners' cause of action for reconveyance has prescribed or is barred by laches, considering the existence of an express trust. Whether the Affidavit of Epifanio and the Calig-onan sa Panagpalit created an express trust. Whether the respondents' filing of a petition for reconstitution of title constituted a repudiation of the express trust, and whether an action to compel execution of a public deed of sale has prescribed.
Ruling
The petition is PARTIALLY GRANTED. The Decision of the Court of Appeals is REVERSED and SET ASIDE, and the Decision of the Regional Trial Court is REINSTATED with MODIFICATION. Petitioners are declared the absolute owners of one-half of Lot No. 1054 (Lot No. 1054-A) under TCT No. RT-7853. The Register of Deeds of Cebu City is ORDERED to cancel TCT No. RT-7853 in part and issue a new Transfer Certificate of Title to petitioners covering Lot No. 1054-A.
Ratio Decidendi
On the issue of prescription and laches in relation to express trust: The Court of Appeals erred in applying the rules on prescription and laches because the case involves an express trust. An express trust is created by the direct and positive acts of the parties, evinced by a writing or deed, or words showing an intention to create a trust. The Affidavit of Epifanio clearly established a trust agreement, affirming co-ownership of Lot No. 1054 between Epifanio and Tranquilino Labiste. Prescription and laches in express trusts commence only from the time the trust is repudiated. Repudiation requires unequivocal acts by the trustee amounting to an ouster of the beneficiary, which must be made known to the beneficiary, with clear and conclusive evidence. The Court held that respondents could not rely on the Torrens title issued in Epifanio's name to repudiate the trust, as a trustee obtaining such a title cannot use it to deny the trust. The filing of the petition for reconstitution of title in October 1993 was the only act that could be construed as a repudiation. Since petitioners filed their complaint in January 1995, their cause of action had not yet prescribed, and laches could not be attributed to them. The equitable remedy of laches is unavailing to defeat justice or perpetrate fraud. On the creation of an express trust: The Affidavit of Epifanio clearly established a trust agreement, affirming co-ownership of Lot No. 1054 between Epifanio and Tranquilino Labiste. An express trust is created by the direct and positive acts of the parties, evinced by a writing or deed, or words showing an intention to create a trust. On the repudiation of the express trust and the action to compel execution of a public deed of sale: The filing of the petition for reconstitution of title in October 1993 was the only act that could be construed as a repudiation. To recover the other half of the property covered by the private Calig-onan sa Panagpalit and have it registered, petitioners should have filed an action to compel respondents, as heirs of the sellers, to execute a public deed of sale. While a conveyance of land in a private document is valid, Article 1358 of the Civil Code requires public instruments for efficacy, allowing a party to be compelled to execute the proper document. However, even assuming such an action was filed, it would have already prescribed. The Calig-onan sa Panagpalit was executed on October 18, 1939, and the Old Code of Civil Procedure (Act No. 190) applied, which provides a ten-year prescriptive period for actions upon a written contract, similar to Article 1144 of the New Civil Code. Therefore, the action to compel the execution of a public deed of sale for the other half of the property was already barred by prescription.
Main Doctrine
In an express trust, prescription and laches begin to run only from the time the express trust is repudiated by the trustee, and such repudiation must be made known to the beneficiary through unequivocal acts. A trustee obtaining a Torrens title over property held in trust cannot repudiate the trust by relying solely on the registration.