Go v. Buenaventura
REITERATIONFacts
The Antecedents: Felisa Tamio de Buenaventura purchased a parcel of land in Quezon City in 1959, registered under TCT No. 45951/T-233. In 1960, she purportedly sold it to her daughter Bella Guerrero, Bella's husband Delfin Guerrero, Sr., and Felisa's common-law husband Felimon Buenaventura, Sr., resulting in TCT No. 49869. Felisa continued to reside on the property and construct a building thereon. In 1968, another daughter, Resurreccion A. Bihis, began occupying the second floor. Felisa died in 1994, allegedly bequeathing half of the property to Resurreccion and her daughters (the Bihis Family) in a disputed will. The Bihis Family annotated an adverse claim on the title in April 1994. Bella was appointed administratrix of Felisa's estate and included the property in the inventory. In January 1997, the adverse claim was cancelled. The Heirs of Felimon, Sr. executed an Extrajudicial Settlement of Felimon, Sr.'s estate, leading to the cancellation of TCT No. RT-74910 (49869) and the issuance of TCT No. N-170416 in the names of Bella, Delfin, Jr., and Lester. On January 23, 1997, Bella, et al. sold the property to Wilson and Peter Go for ₱4,500,000.00, resulting in TCT No. 170475. Wilson and Peter subsequently filed ejectment cases. Procedural History: In October 1997, the Estate of Felisa and the Bihis Family filed a complaint for reconveyance and damages against Bella, et al., Wilson, Peter, and the Register of Deeds. They alleged that Felisa merely entrusted the property to Bella, Delfin, Sr., and Felimon, Sr. for loan purposes and never intended to relinquish ownership. They also claimed Wilson and Peter were buyers in bad faith. The RTC found an implied trust, but ruled reconveyance was impossible as Wilson and Peter were purchasers in good faith. It awarded damages to the respondents. The Court of Appeals modified the RTC decision, nullifying the sale to Wilson and Peter, ordering reconveyance to the Estate of Felisa, and cancelling their title. The CA found an implied trust, ruled the action for reconveyance had not prescribed, and that Wilson and Peter were not purchasers in good faith. The Petition: Petitioners Wilson and Peter Go, and others, filed petitions for review on certiorari assailing the CA decision and resolution.
Issue(s)
Whether or not the CA erred in ruling on the nature of the trust created between Felisa, on one hand, and Bella, Delfin, Sr., and Felimon, Sr., on the other (express vs. implied), and whether such trust was validly established. Whether or not the action for reconveyance had prescribed, considering the nature of the trust and the possession of the property. Whether or not Wilson and Peter are purchasers in good faith, given their knowledge of adverse claims and third-party occupation.
Ruling
The petitions are bereft of merit. The Supreme Court affirmed the Court of Appeals' decision, denying the petitions for review on certiorari.
Ratio Decidendi
On the issue of trust: The Court ruled that an express trust, not an implied trust, was established between Felisa and Bella, Delfin, Sr., and Felimon, Sr. This was based on Felisa's September 21, 1970 letter, which unequivocally declared her intention to transfer the title merely to accommodate them in securing a GSIS loan, while retaining her ownership and expressing her wish for equal division among her heirs. The validity and due execution of this letter were never put in issue. The Court clarified that the mere issuance of a certificate of title in the names of Bella, Delfin, Sr., and Felimon, Sr. did not vest ownership upon them, as registration is merely evidence of title and does not preclude co-ownership or the existence of a trust relationship. Bella's claim that she signed the letter to appease her mother was dismissed, as the letter clearly established the nature of the trust. The Court reiterated that registration does not vest title, but is merely evidence thereof, and that the certificate of title does not preclude the possibility of co-ownership or a trust relationship. On the issue of prescription: The Court held that the action for reconveyance based on an express trust had not prescribed. It cited the jurisprudential rule that express trusts prescribe in ten (10) years from the time the trust is repudiated. In this case, the repudiation of the express trust occurred when Bella, as the remaining trustee, sold the subject property to Wilson and Peter on January 23, 1997. The complaint for reconveyance was filed by the respondents on October 17, 1997, only a few months after the sale, thus, it could not be considered as having prescribed. The Court emphasized that the ten-year prescriptive period for actions for reconveyance based on an implied trust applies only when the claimant is not in possession of the property; however, when the claimant is in actual possession, the action is imprescriptible. Since the Bihis Family had been in actual possession, their action for reconveyance was deemed imprescriptible. On the issue of purchasers in good faith: The Court concurred with the CA's finding that Wilson and Peter were not purchasers in good faith. A purchaser in good faith buys without notice of another's right or interest and pays a fair price. The Court noted Wilson's admission that he knew of the adverse claim annotated on the title and directed his lawyer to have it cancelled before purchasing the property. He also admitted knowledge that individuals other than the sellers were occupying the property. This knowledge of an annotation and third-party occupation, without making necessary inquiries into the validity of the sellers' title, negates any presumption of good faith. The Court stated that a person who deliberately ignores a significant fact that would create suspicion in a reasonable man is not an innocent purchaser for value.
Main Doctrine
An express trust was established when Felisa transferred the title of the property to Bella, Delfin, Sr., and Felimon, Sr. to merely accommodate them in securing a loan from GSIS, retaining her ownership. The action for reconveyance based on this express trust has not prescribed as it was filed within ten (10) years from the repudiation of the trust. Wilson and Peter were not purchasers in good faith as they had knowledge of the adverse claim and the occupation of the property by others, yet failed to make necessary inquiries.