Daniel v. Magkaisa
REITERATIONFacts
The Antecedents: Consuelo Jimenez Oda (Consuelo) owned three parcels of land. She purportedly sold these to her sister, Nelidia J. Daniel (Nelidia), with the instruction that upon Nelidia's death, the properties should be transferred to Consuelo's grandchildren, who are the respondents (Nancy, Cecilia, and Imelda Magkaisa, and Marissa Oda). To comply, Nelidia, with the conformity of her husband, petitioner Efraim D. Daniel (Efraim), executed a Declaration of Trust on September 6, 1993, acknowledging she held the properties in trust for the respondents. Nelidia later caused new titles to be issued in her name. Upon Nelidia's death on November 1, 1996, the respondents discovered the Declaration of Trust. Efraim allegedly took possession of the properties and refused to surrender the titles. Procedural History: The respondents filed a Complaint for Reconveyance Plus Damages against Efraim. The Regional Trial Court (RTC) issued a writ of preliminary injunction. During trial, Efraim admitted the existence of the trust but claimed it was revoked. The RTC found the Declaration of Trust valid and subsisting, ruling that Efraim was bound by its terms. It declared the respondents as the true owners, ordered the cancellation of titles in Nelidia's name and issuance of new ones in favor of the respondents, and directed Efraim to surrender possession and pay attorney's fees. The Court of Appeals (CA) affirmed the RTC's decision, holding that the trust was irrevocable without the beneficiary's consent and that the unsigned revocation documents had no legal effect. The CA also ruled on issues of disinheritance, possession, and the necessity of barangay conciliation. The Petition: Efraim filed a Petition for Review on Certiorari, assailing the CA's decision, primarily questioning the orders to deliver possession of the properties and titles, and the award of attorney's fees. He argued that the respondents were already in possession of some lots, that the titles were with Josefina Jimenez, not him, and that he acted in good faith.
Issue(s)
Whether the respondents are entitled to the reconveyance of the subject properties. Whether Efraim D. Daniel can be compelled to deliver possession of the subject properties to the respondents. Whether Efraim D. Daniel can be compelled to surrender the titles of the subject properties to the respondents. Whether the award of attorney's fees is proper.
Ruling
The petition is denied. The assailed Decision and Resolution of the Court of Appeals are affirmed with modification, ordering Efraim D. Daniel to locate and surrender the titles of the subject properties to the respondents with dispatch. If his efforts prove futile, he should inform the Regional Trial Court immediately.
Ratio Decidendi
On the entitlement to reconveyance: The Court affirmed the validity of the Declaration of Trust, which Efraim himself admitted. As Nelidia, the trustee, acknowledged holding the properties in trust for the respondents, and Efraim, as her husband and a signatory to the trust document, is bound by its terms. Since the trust is considered terminated upon Nelidia's death and no onerous conditions were imposed on the beneficiaries, acceptance is presumed. Therefore, beneficial ownership reverted to the respondents, entitling them to reconveyance of the properties. The Court noted that the Deed of Sale between Consuelo and Nelidia covered only the Manggahan lots, but the Medicion lot was also included in the trust, regardless of the unclear transfer from Consuelo to Nelidia. On the surrender of possession: The Court acknowledged Nancy Magkaisa's admission that her family was already in possession of the Manggahan lots. However, it upheld the respondents' contention that Efraim exercised possession over the Medicion lot by building a rest house therein. Efraim's mere denial was insufficient to overcome this allegation. Consequently, Efraim was ordered to surrender possession of the Medicion lot to the respondents, in compliance with the trust's intent. On the surrender of titles: The Court found that Efraim failed to sufficiently prove that he did not have access to or knowledge of the titles. While he claimed Josefina Jimenez held them, Josefina was not presented as a witness. Atty. Florentino testified that Nelidia held the titles until her death, and it was reasonable to assume Efraim, as Nelidia's husband, would have access to her belongings. The Court modified the RTC's order, which directed the Register of Deeds to cancel titles, by requiring Efraim to actively locate and surrender the titles to the respondents. If unsuccessful, he must inform the RTC. This was deemed more expedient than remanding the case for title validation. On attorney's fees: The Court affirmed the award of attorney's fees. Efraim's refusal to surrender possession and titles, despite admitting the trust's validity and his conformity to it, constituted bad faith and caused the respondents to incur expenses for litigation. His arguments regarding lack of ownership or interest in the properties did not absolve him from the obligation to honor the trust he acknowledged.
Main Doctrine
A Declaration of Trust, duly executed and acknowledged, binds the trustee and, by extension, those in privity with them, to honor the terms of the trust. In the absence of a valid revocation and absent any onerous conditions imposed on the beneficiaries, acceptance of the trust is presumed, and upon the death of the trustee, beneficial ownership of the trust property reverts to the beneficiaries.