CASE DIGEST: Spouses Paringit vs. Bajit

G.R. No. 181844: September 29, 2010




During their lifetime, spouses Julian and Aurelia Paringit leased a lot in Sampaloc, Manila (the lot) from Terocel Realty, Inc. (Terocel Realty). They built their home there and raised five children. Aurelia died on November 6, 1972.

For having occupied the lot for years, Terocel Realty offered to sell it to Julian. Julian sought the help of his children so he can buy the property but only his son Felipe and wife Josefa had the financial resources he needed at that time. To bring about the purchase, on January 16, 1984 Julian executed a deed of assignment of leasehold right in favor of Felipe and his wife that would enable them to acquire the lot. On April 12, 1984 Felipe and his wife paid the last installment and the realty company executed a Deed of Absolute Sale in their favor and turned over the title to them.

In 1985, due to issues among Julian’s children regarding the ownership of the lot, Julian executed an affidavit clarifying the nature of Felipe and his wife’s purchase of the lot. He claimed that it was bought for the benefit of all his children.

Expressing their concurrence with what their father said in his affidavit, Felipe’s siblings (Marciana, et. al.), except Florencio, signed the same.

Marciana, et al continued to occupy the lot with their families without paying rent. This was the situation when their father Julian died on December 21, 1994.

In 1995. Felipe and his wife sent a demand letter to Marciana, et al asking them to pay rental arrearages for occupying the property from March 1990 to December 1995 at the rate of P2,400.00 a month, totaling P168,000.00. Marciana, et al refused to pay believing that they had the right to occupy the house and lot, it being their inheritance from their parents. On March 11, 1996 Felipe and his wife filed an ejectment suit against them. The suit prospered, resulting in the ejectment of Marciana, et al and their families from the property. Shortly after, Felipe and his wife moved into the same.

Marciana, et al filed the present action against Felipe and his wife for annulment of title and reconveyance of property.

In his answer, Felipe denied knowledge of the agreement among the siblings that the property would devolve to them all. Josefa, his wife, claimed that she signed the affidavit only because Marciana, et al were going to get mad at her had she refused. She also claimed that she signed the document only to prove having received it.

RTC rendered a decision, finding the evidence of Marciana, et al insufficient to prove by preponderance of evidence that Felipe and his wife bought the subject lot for all of the siblings.

CA rendered judgment reversing the decision of the RTC and ordering Felipe and his wife to reconvey to Marciana, et al their proportionate share in the lot upon reimbursement of what the spouses paid to acquire it plus legal interest.

ISSUE: Whether or not CA erred in finding that Felipe and his wife purchased the subject lot under an implied trust for the benefit of all the children of Julian

CIVIL LAW: Implied Trust on sale of land


The CA found that Felipe and his wife’s purchase of the lot falls under the rubric of the implied trust provided in Article 1450 of the Civil Code.

Implied trust under Article 1450 presupposes a situation where a person, using his own funds, buys property on behalf of another, who in the meantime may not have the funds to purchase it. Title to the property is for the time being placed in the name of the trustee, the person who pays for it, until he is reimbursed by the beneficiary, the person for whom the trustee bought the land. It is only after the beneficiary reimburses the trustee of the purchase price that the former can compel conveyance of the property from the latter.

CIVIL LAW: Prescription on implied trust

In an implied trust, the beneficiary’s cause of action arises when the trustee repudiates the trust, not when the trust was created as Felipe and his wife would have it. The spouses of course registered the lot in their names in January 1987 but they could not be said to have repudiated the implied trust by that registration. Their purchase of the land and registration of its title in their names are not incompatible with implied trust. It was understood that they did this for the benefit of Julian and all the children.

At any rate, even assuming that Felipe and his wife’s registration of the lot in their names in January 1987 constituted a hostile act or a violation of the implied trust, Marciana, et al had 10 years or until January of 1997 within which to bring their action. Here, they filed such action in July 1996 well within the period allowed them.

Finally, the CA ordered Marciana, et al to reimburse Felipe and his wife the individual siblings’ proportionate share in theP55,500.00 that the spouses paid the realty company.