THIRD DIVISION
June 29, 2016
G.R. No. 185857-58
TRIFONIA D. GABUTAN, deceased, herein represented by her heirs, namely: Erlinda Llames, Elisa Asok, Primitivo Gabutan, Valentina Yane; BUNA D. ACTUB, FELISIA TROCIO, CRISANTA D. UBAUB, and TIRSO DALONDONAN, deceased, herein represented by his heirs, namely: Madelyn D. Reposar and Jerry Dalondonan, MARY JANE GILIG, ALLAN UBAUB, and SPOUSES NICOLAS & EVELYN DAILO, Petitioners,
vs.
DANTE D. NACALABAN, HELEN N. MAANDIG, SUSAN N. SIAO, and CAGAYAN CAPITOL COLLEGE, Respondents.
x - - - - - - - - - - - - - - - - - - - - - - - x
G.R. Nos. 194314-15
DANTE D. NACALABAN, HELEN N. MAANDIG, and SUSAN N. SIAO, as HEIRS OF BALDOMERA D. VDA. DE NACALABAN, Petitioners,
vs.
TRIFONIA D. GABUTAN, BUNA D. ACTUB, FELISIA D. TROCIO, CRISANTA D. UBAUB, and TIRSO DALONDONAN, deceased, herein represented by his heirs, namely: Madelyn D. Reposar and Jerry Dalondonan, MARY JANE GILIG, ALLAN UBAUB, and SPOUSES NICOLAS & EVELYN DAILO, CAGAYAN CAPITOL COLLEGE, represented by its President, Atty. Casimiro B. Suarez, Jr., Private Respondent;
HON. LEONCIA R. DIMAGIBA (Associate Justice), HON. PAUL L. HERNANDO (Associate Justice), HON. NINA G. ANTONIOV ALENZUELA (Associate Justice), HON. EDGARDO T. LLOREN (Associate Justice), HON. MICHAEL P. ELBINIAS (Associate Justice), and HON. JANE AURORA C. LANTION (Associate Justice, Acting Chairman), COURT OF APPEALS, CAGA YAN DE ORO CITY (Former Special Twenty-Second Division), Public Respondents.
D E C I S I O N
JARDELEZA, J.:
Before us are consolidated petitions questioning the Court of Appeals' (CA) Decision1 dated December 11, 2008 and Resolution2 dated August 17, 2010 in CA-G.R. CV No. 68960-MIN and CA-G.R. SP No. 53598-MlN.3 In G.R. Nos. 185857-58, the heirs of Trifonia D. Gabutan and Tirso Dalondonan, Buna D. Actub, Felisia Trocio and Crisanta D. Ubaub (Gabutan, et al.) filed a partial appeal by way of a petition for review on certiorari, 4 seeking to reverse the portion of the CA Decision declaring Cagayan Capital College (the College) as a buyer in good faith. The other petition, G .R. Nos. 194 314-] 5, is one for certiorari5filed by Dante D. Nacalaban, Helen N. Maandig, and Susan N. Siao as heirs of Baldomera D. Vda. De Nacalaban (Nacalaban, et al.). It seeks to annul the CA Decision and Resolution which sustained the action for reconveyance filed by Gabutan, et al.
The Antecedents
On January 25, 1957, Godofredo Nacalaban (Godofredo) purchased an 800-square meter parcel of prime land (property) in Poblacion, Cagayan de Oro City from Petra, F ortunata, Francisco and Dolores, all surnamed Daamo.6 Pursuant to the sale, Transfer Certificate of Title (TCT) No. T-2259 7 covering the property was issued in the name of Godofredo. He thereafter built a house on it.8
Godofredo died on January 7, 1974.9 He was survived by his wife, Baldomera, and their children, Dante, Helen, and Susan. On March 19, 1979, Baldomera issued a Certification 10 in favor of her mother, Melecia. It provided, in effect, that Baldomera was allowing her mother to build and occupy a house on the portion of the property. 11 Accordingly, the house was declared for taxation purposes. The tax declaration 12 presented in evidence showed that Melecia owned the building on the land owned by Godofredo. 13
Baldomera died on September 11, 1994. 14 On July 3, 1996, her children executed an Extrajudicial Settlement of Estate of Deceased Person with Sale15 (Extrajudicial Settlement with Sale) where they adjudicated unto themselves the property and sold it to the College. On August 22, 1996, TCT No. T-2259 was cancelled and TCT No. T-111846 16 covering the property was issued in the name of the College. 17
Melecia died on April 20, 199718 and was survived by her children, Trifonia, Buna, Felisia, Crisanta, and Tirso.
In a letter 19 dated May 5, 1997, the College demanded Trifonia D. Gabutan, Mary Jane Gilig, Allan Ubaub, and Evelyn Dailo, the heirs of Melecia who were occupying the house on the property, to vacate the premises. 20
On July 7, 1997, Gabutan, et al. filed a Complaint for Reconveyance of Real Property, Declaration of Nullity of Contracts, Partition and Damages with Writ of Preliminary Attachment and Injunction21 against Nacalaban, et al. and the College. They alleged that: (1) Melecia bought the property using her own money but Godofredo had the Deed of Absolute Sale executed in his name instead of his mother-in-law;22 (2) Godofredo and Baldomera were only trustees of the property in favor of the real owner and beneficiary, Melecia;23 (3) they only knew about the Extrajudicial Settlement with Sale upon verification with the Registry of Deeds;24 and (4) the College was a buyer in bad faith, being aware they were co-owners of the property. 25
In its Answer with Affirmative Defenses,26 the College claimed that it is a buyer in good faith and for value, having "made exhaustive investigations and verifications from all reliable sources" that Melecia and her heirs were staying in the property by mere tolerance. 27 It alleged that: (l) in the tax declaration28 of the residential house, Melecia admitted that the lot owner is Godofredo;29 (2) the occupancy permit of Melecia was issued only after Godofredo issued a certification30 to the effect that Melecia was allowed to occupy a portion of the property;31 and (3) the Extrajudicial Settlement with Sale was published in three consecutive issues of Mindanao Post, a newspaper of general circulation.32
In their Answer with Counterclaim, 33 Nacalaban, et al. denied the allegations of Gabutan, et al. They claimed to have acquired the property by intestate succession from their parents, who in their lifetime, exercised unequivocal and absolute ownership over the property.34 Nacalaban, et al. also set up the defenses of laches and prescription, and asserted that the action for reconveyance was improper because the property had already been sold to an innocent purchaser for value.35
On September 10, 1997, the College filed a separate Complaint for Unlawful Detainer and Damages36 with the Municipal Trial Court in Cities (MTCC) against Trifonia, Mary Jane, Allan, Evelyn and Nicolas Dailo (Heirs of Melecia). In their Answer with Affirmative and/or Negative Defenses with Compulsory Counterclaim, 37 the Heirs of Melecia claimed that they own and possess the property in co-ownership with Nacalaban, et al. and Gabutan, et al. because it was purchased by Melecia, their common predecessor. 38 They also claimed that the house in which they reside was constructed at her expense.39 The College had prior knowledge of this co-ownership, and hence, was a purchaser in bad faith. 40 The Heirs of Melecia also raised the defense of forum-shopping in view of the pendency of the action for reconveyance. 41 They then concluded that in view of the issues and the value of the property, as well, the MTCC had no jurisdiction over the case.42
The MTCC found it had jurisdiction to hear the case and ruled in favor of the College:43
WHEREFORE, JUDGMENT is hereby rendered ordering each of the defendants to:
a.) Immediately vacate the property of the plaintiff;
b.) Pay the plaintiff the monthly use compensation for the continued use of the property at the rate of P500.00 per month from MAY 5, 1997 until the property is actually vacated;
c.) Pay the plaintiff Attorney's fees amounting to P5,000.00 per defendant;
d.) Pay for litigation expenses at the rate of P1,000.00 per defendant.
SO ORDERED.44
On appeal, the Regional Trial Court (RTC) affirmed the MTCC's Decision46 in all respects, except that the Heirs of Melecia were given 30 days from notice to vacate the property.47 They filed a motion for reconsideration, but it was denied.49 Thus, the Heirs of Melecia filed a petition for review50 before the CA, docketed as CA-G.R. SP No. 53598.51
Meanwhile, in the reconveyance case, the RTC rendered a Decision52 in favor of Gabutan, et al. The RTC found the testimonies of their witnesses credible, in that the money of Melecia was used in buying the property but the name of Godofredo was used when the title was obtained because Godofredo lived in Cagayan de Oro City while Melecia lived in Bornay, Gitagum, Misamis Oriental.53 Thus, the RTC held that a trust was established by operation of law pursuant to Article 1448 of the Civil Code.54 The dispositive portion of the RTC's Decision reads:
WHEREFORE, judgment is hereby rendered, and this Court hereby:
1. Declares that the Spouses Godofredo and Baldomera Nacalaban held the land covered by Transfer Certificate of Title No. T-2259 issued in the name of Godofredo Nacalaban married to Baldomera Dalondonan issued on January 13, 1959 in trust for Melecia V da. de Dalondonan with the Spouses as the trustees and Melecia V da. de Dalondonan as the cestui que trust;
2. Declares that upon the death of Melecia V da. de Dalondonan on August 20, 1997, the ownership and beneficial interest of the foregoing Land passed to the plaintiffs and individual defendants by operation of law as legal heirs of Melecia V da. de Dalondonan;
3. Nullifies the Extrajudicial Settlement of Estate of Deceased Person with Sale executed by the individual defendants on July 30, 1996 and known as Doc. No. 326; Page No. 67; Book No. XX; Series of 1996 in the Notarial Register of Notary Public Victoriano M. Jacot with respect to the Extrajudicial settlement by the individual defendants of the land referred to above;
4. Declares that defendant Cagayan Capitol College was a buyer in good faith and for value of the land referred to above, and, accordingly, declares that said defendant now owns the land;
5. Orders defendant Cagayan Capitol College to inform this Court in writing within thirty (30) days from receipt of this decision the amount of the purchase price of the land referred to above bought by it from the individual defendants the amount of which should approximate the prevailing market value of the land at the time of the purchase;
6. Orders the individual defendants namely, Dante D. Nacalaban, Helen N. Maandig, and Susan N. Siao, jointly and severally, to deliver and turn over to the plaintiffs, within thirty (30) days from receipt of this decision, plaintiffs' shares of the proceeds of the sale of the land referred to above the amount of which is equivalent to five-sixth (5/6) of said proceeds with the remaining one-sixth (1/6) to be retained by the individual defendants as their share by virtue of their being the legal heirs of Baldomera D. Nacalaban;
SO ORDERED.55
Both parties filed separate appeals from this Decision before the CA. 57 In a Resolution58 dated October 7, 2004, the CA consolidated both appeals.
The CA rendered its Decision59 on December 11, 2008 dismissing the consolidated appeals and affirming in toto the RTC Decisions in the unlawful detainer case and the action for reconveyance. The CA held that: (1) the defense of co-ownership based on an implied trust by a defendant in an unlawful detainer case shall not divest the MTCC of jurisdiction over the case;60 (2) the dead man's statute does not apply because Gabutan, et al.'s counsel did not interpose any objection when the testimony of Crisanta Ubaub was offered and Gabutan, et al.'s counsel even examined her;61 (3) Nacalaban, et al.'s claim that Gabutan, et al.'s witnesses are not competent to testify on matters which took place before the death of Godofredo and Melecia is without merit because Gabutan, et al. have not specified these witnesses and such hearsay evidence alluded to;62 (4) the parole evidence rule does not apply because Melecia and Nacalaban, et al. were not parties to the Deed of Conditional Sale;63 (5) the action for reconveyance has not yet prescribed because Gabutan, et al. are in possession of the property;64 and (6) the College is a buyer in good faith. 65
Nacalaban, et al. filed their motion for reconsideration of the CA Decision, but it was denied in a Resolution 66 dated August 1 7, 2010. Hence, they filed the present petition for certiorari67under Rule 65, where they allege that: (1) the action for reconveyance already expired;68 (2) for an action for reconveyance to prosper, the property should not have passed into the hands of another who bought the property in good faith and for value;69 and (3) the title of Godofredo under TCT No. T-2259 which was issued on January 13, 1959 could not be attacked collaterally.70
On the other hand, Gabutan, et al. filed the present petition for review on certiorari71under Rule 45, seeking a partial appeal of the CA Decision. In their petition, Gabutan, et al. allege that the College is not a buyer in good faith because it did not buy the property from the registered owner. 72 Since Godofredo was the registered owner of the property and not Nacalaban, et al., the College should have exercised a higher degree of prudence in establishing their capacity to sell it. 73 Further, despite knowing that other persons possessed the property, the College did not inquire with Gabutan, et al. the nature of their stay on the property.74 Under Section 1, paragraph 2, Rule 7 4 of the Rules of Court, the publication of the Extrajudicial Settlement with Sale was also without prejudice to claims of other persons who had no notice or participation thereof. 75 Finally, Gabutan, et al. argue that they cannot be ejected from the property because there is no evidence to show that their stay was by mere tolerance, and that Melecia was a builder in good faith. 76
Considering that the petitions assail the same CA Decision and involve the same parties, we issued a Resolution77 dated December 13, 2010 consolidating them.
The Issues
The issues for resolution are:
1. Whether the petition for certiorari of Nacalaban, et al. shall prosper;
2. Whether the action for reconveyance was proper; and
3. Whether the College is a buyer in good faith.
Our Ruling
I. The petition for certiorari of
Nacalaban, et al. is a wrong
remedy
Pursuant to Section 1, Rule 45 of the Rules of Court,78 the proper remedy to obtain a reversal of judgment on the merits, final order or resolution is an appeal. The Resolution dated August 17, 2010 of the CA, which affirmed its Decision dated December 11, 2008, was a final resolution that disposed of the appeal by Nacalaban, et al. and left nothing more to be done by the CA in respect to the said case. Thus, Nacalaban, et al. should have filed an appeal in the form of a petition for review on certiorari and not a petition for certiorari under Rule 65, which is a special civil action.
Rule 65 is a limited form of review and is a remedy of last recourse. This extraordinary action lies only where there is no appeal nor plain, speedy and adequate remedy in the ordinary course of law. 79 In Malayang Manggagawa ng Stayfast Phils., Inc. v. National Labor Relations Comission, 80 we held that appeal would still be the proper remedy from a judgment on the merits, final order or resolution even if the error ascribed to the court rendering the judgment is its lack of jurisdiction over the subject matter, or the exercise of power in excess thereof, or grave abuse of discretion in the findings of fact or of law set out in the decision, order or resolution. The existence and availability of the right of appeal prohibits the resort to certiorari because one of the requirements for the latter remedy is that there should be no appeal. 81 We have always declared that a petition for certiorari is not a substitute for an appeal where the latter remedy is available but was lost through fault or negligence. 82
Here, Nacalaban, et al. received the assailed Resolution dated August 17, 2010 on September 7, 2010.83 Under the Rules of Court, they had 15 days or until September 22, 2010 to file an appeal before us. Nacalaban, et al. allowed this period to lapse without doing so and, instead, filed a petition for certiorari on November 5, 2010. 84 Being the wrong remedy, the petition of Nacalaban, et al. is, therefore, dismissible. Although there are exceptions85 to this general rule, none applies in this case.
In spite of the consolidation we have ordered, we cannot treat the petition of Nacalaban, et al. as one under Rule 45. We have the discretion to treat a Rule 65 petition for certiorari as a Rule 45 petition for review on certiorari if (1) the petition is filed within the reglementary period for filing a petition for review; (2) when errors of judgment are averred; and (3) when there is sufficient reason to justify the relaxation of the rules. 86 The first and third requisites are absent in this case. To reiterate, the petition was filed beyond the 15-day reglementary period of filing a petition for review on certiorari. As will be discussed, we also find no compelling reason to relax the rules.
II. The action for reconveyance filed by Gabutan, et al. is proper
a. An implied resulting trust was created
between Melecia and Godofredo
We stress at the outset that the question of existence of an implied trust is factual, hence, ordinarily outside the purview of Rule 45. 87 The resolution of factual issues is the function of the lower courts whose findings, when aptly supported by evidence, bind us. This is especially true when the CA affirms the lower court's findings, as in this case. While we, under established exceptional circumstances, had deviated from this rule, we do not find this case to be under any of the exceptions. 88 Even if we were to disregard these established doctrinal rules, we would still affirm the assailed CA rulings.
Article 1448 of the Civil Code provides in part that there is an implied trust when property is sold, and the legal estate is granted to one party but the price is paid by another for the purpose of having the beneficial interest of the property. The former is the trustee, while the latter is the beneficiary. The trust created here, which is also referred to as a purchase money resulting trust, 89 occurs when there is (l) an actual payment of money, property or services, or an equivalent, constituting valuable consideration; (2) and such consideration must be furnished by the alleged beneficiary of a resulting trust.90 These two elements are present here.
Gabutan, et al., through the testimonies of Felisia, Crisanta, and Trifonia, established that Melecia's money was used in buying the property, but its title was placed in Godofredo's name. She purchased the property because Felisia wanted to build a pharmacy on it.91 On one occasion in Melecia' s house, and when the entire family was present, Melecia gave Godofredo the money to purchase the property.92 Melecia entrusted the money to Godofredo because he was in Cagayan de Oro, and per Melecia' s instruction, the deed of sale covering the property was placed in his name. 93 It was allegedly her practice to buy properties and place them in her children's name, but it was understood that she and her children co-own the properties. 94
Melecia built a residential building on the property, where her daughter Crisanta and some of her grandchildren resided. 95 Godofredo also thereafter built a house on the property. Twice, he also mortgaged the property to secure loans. Melecia allowed him to do so because she trusted him. 96 After Godofredo' s death, and when Baldomera fell ill, there were family discussions to transfer the title in Melecia's name so Melecia's children can divide it together with the rest of Melecia's properties. The plans, however, always fell through.97
Both the RTC and CA found credence on these pieces of testimonial evidence that an implied resulting trust exists. Reliance on these testimonies will not violate the parol evidence rule, as Nacalaban, et al. once raised. In Tong v. Go Tiat Kun,98we ruled that since an implied trust is neither dependent upon an express agreement nor required to be evidenced by writing, Article 1457 of our Civil Code authorizes the admission of parol evidence to prove their existence. What is crucial is the intention to create a trust.99 We cautioned, however, that the parol evidence that is required to establish the existence of an implied trust necessarily has to be trustworthy and it cannot rest on loose, equivocal or indefinite declarations. 100 The testimonies of Felisia, Crisanta, and Trifonia satisfy these requirements. They are consistent and agree in all material points in reference to the circumstances behind the arrangement between Melecia and Godofredo. We agree with the RTC when it said that this arrangement among family members is not unusual, especially in the 1950s. 101
Nacalaban, et al., on the other hand, denied the arrangement between Melecia and Godofredo, and maintained that it was really the latter who purchased the property from its original owners, as evidenced by their possession of the Deed of Conditional Sale and the title being in Godofredo's name. 102 It is telling, however, that Nacalaban, et al. failed to provide the details of the sale, specifically with regard to how Godofredo could have been able to afford the purchase price himself, which would have directly refuted the allegation that Melecia's money was used in the purchase. As the RTC aptly observed, if Godofredo really bought the property with his own money, it was surprising that Baldomera did not transfer the title of the property to her name when Godofredo died in 1974. Baldomera did not do so until her death in 1994 despite being pressed by her siblings to partition the property. The RTC correctly deduced that this only meant that Baldomera acknowledged that the property belongs to Melecia. 103
Having established the creation of an implied resulting trust, the action for reconveyance filed by Gabutan, et al., the heirs of Melecia in whose benefit the trust was created, is proper. An action for reconveyance is a legal and equitable remedy granted to the rightful landowner, whose land was wrongfully or erroneously registered in the name of another, to compel the registered owner to transfer or reconvey the land to him. 104 It will not amount to a collateral attack on the title, contrary to the allegation of Nacalaban, et al. 105We explained in Hortizuela v. Tagufa: 106
x x x As a matter of fact, an action for reconveyance is a recognized remedy, an action in personam, available to a person whose property has been wrongfully registered under the Torrens system in another's name. In an action for reconveyance, the decree is not sought to be set aside. It does not seek to set aside the decree but, respecting it as incontrovertible and no longer open to review, seeks to transfer or reconvey the land from the registered owner to the rightful owner. Reconveyance is always available as long as the property has not passed to an innocent third person for value.
There is no quibble that a certificate of title, like in the case at bench, can only be questioned through a direct proceeding. The MCTC and the CA, however, failed to take into account that in a complaint for reconveyance, the decree of registration is respected as incontrovertible and is not being questioned. What is being sought is the transfer of the property wrongfully or erroneously registered in another's name to its rightful owner or to the one with a better right. If the registration of the land is fraudulent, the person in whose name the land is registered holds it as a mere trustee, and the real owner is entitled to file an action for reconveyance of the property. 107