G.R. No. 254452 , November 27, 2024
HEIRS OF FERDINAND ROXAS, NAMELY: ANGELA MARGARITA T. ROXAS, DYAN PAULA T. ROXAS, MICHAEL JUDE T. ROXAS, AND MARIA KATRINA T. ROXAS, PETITIONERS, VS. HEIRS OF MELANIA ROXAS, NAMELY: MANUEL A. ROXAS, MARIA ROSARIO ROXAS-URETA, ALEXANDER A. ROXAS, SALOME ROXAS-PANTALEON, PAUL GERARDO ROXAS, ELAINE ROXAS GAMBOA, MA. IMELDA ROXAS-CRUZ, AND DAVID ANTHONY ROXAS, RESPONDENTS.

FACTS

Antonio Roxas and Melania Roxas were the parents of Ferdinand and several other children. In 1970, Melania’s cousin executed a Deed of Absolute Sale (DOAS) over a 500-square-meter lot in Baguio City in favor of Ferdinand, and Transfer Certificate of Title (TCT) No. T-16657 was issued in his name. Melania built a house on the lot, which the family used. From 1990-1995, Melania rented out a portion, and in 1991, her son Paul began residing there. Antonio died in 1995, Ferdinand died in 2004, and Melania died in 2011.
In 2014, the Heirs of Melania filed a Complaint for declaration of nullity of the DOAS and cancellation of the TCT. They alleged Melania was the true purchaser but placed the title in Ferdinand’s name to protect the property from claims of Antonio’s illegitimate children, as Ferdinand was only 19 and still studying at the time. They filed suit after the Heirs of Ferdinand sought to take over the property and filed an unlawful detainer case against Paul after Melania’s death.
The Heirs of Ferdinand countered that Ferdinand was the true owner, having received money from his parents to purchase the lot. They claimed Melania built the house and managed rentals with Ferdinand’s permission, and that Paul resided there conditionally. They also invoked a 1997 document titled “Donation/Gifts of Real Property and its Cash Equivalents to the Roxas Children from Mr. and Mrs. Antonio and Melania Roxas” (Donation Document), executed by Melania and some children as officers of the family corporation Mel-Rox Realty Inc., which they argued confirmed the subject property was already given to Ferdinand.
The Regional Trial Court (RTC) dismissed the complaint, finding the property was held in trust by Ferdinand for his parents but was subsequently given to him via the Donation Document. The Court of Appeals (CA) reversed the RTC, declaring the DOAS a relatively simulated contract, finding Melania was the true buyer, and that Ferdinand held the lot in trust for her under Article 1448 of the Civil Code. The CA ordered the cancellation of Ferdinand’s title and the issuance of a new one in Melania’s name to form part of her estate. The Heirs of Ferdinand filed the present Petition for Review.

ISSUE

The core issue is whether the Court of Appeals erred in declaring the Deed of Absolute Sale void, finding an implied trust in favor of Melania Roxas under Article 1448 of the Civil Code, and ordering the cancellation of TCT No. T-16657.

RULING

The Supreme Court DENIED the Petition and AFFIRMED the Decision of the Court of Appeals.
The Court held that the evidence established an implied trust under Article 1448 of the Civil Code, which provides: “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 facts demonstrate that Melania Roxas paid for the subject property, but the legal title was placed in the name of her son, Ferdinand. Ferdinand was 19 years old, still a student, and financially incapable of purchasing the property at the time of the sale in 1970. The Heirs of Melania’s claim that the property was placed in Ferdinand’s name to shield it from potential claims of Antonio’s illegitimate children was not rebutted. Furthermore, Melania’s acts of building a house on the lot, declaring it in her name, renting it out, and collecting the proceeds, coupled with Ferdinand’s lack of objection to his siblings’ use of the property, consistently indicate that the beneficial ownership remained with Melania. The Donation Document, which the Heirs of Ferdinand presented to show the property was given to him, was not a valid donation as it lacked the requisite public instrument and acceptance during the donor’s lifetime as required by Article 749 of the Civil Code. Nor could it operate as a will, as it was not executed with the formalities required by law. Consequently, Ferdinand was a trustee holding the property for the benefit of his mother, Melania. Upon Melania’s death, the property rightly forms part of her estate to be divided among her legal heirs. The Court of Appeals correctly ordered the cancellation of TCT No. T-16657 and the issuance of a new title in Melania’s name for this purpose.