G.R. No. L-19397 April 30, 1966
TEODORA MATIAS DE BUENCAMINO, ET AL., petitioners, vs. MARIA DIZON DE MATIAS, ET AL., respondents.

FACTS

The deceased spouses Hilaria Dizon Matias and Fulgencio Matias were the registered owners of three parcels of farm land. They had a son, Luis, who had legitimate children (including Teodora) and also maintained a separate family with illegitimate children. Fearing that Luis might dispose of the properties in favor of his illegitimate children to the prejudice of his legitimate ones, the grandparents decided in a 1938 family council to transfer the properties to their granddaughter Teodora, who was chosen because she was married to a rich man and would hold the title in trust for her legitimate brothers and sisters. This was kept secret from Luis. To effect the transfer, an “Escritura de Venta con Arrendamiento” was executed by the spouses in favor of Teodora and her husband Roque Buencamino on March 4, 1938. As the properties were mortgaged, Teodora obtained a loan from her father-in-law, Felipe Buencamino, Jr., secured by a mortgage on the same properties. The deed stated the grandparents would remain as lessees, but there was no evidence they paid rent. The grandparents retained possession until Fulgencio’s death in 1949, after which Luis’s widow, Maria, took possession until Teodora took over in May 1954, excluding her siblings.

ISSUE

The main issues were: (1) whether the Court of Appeals could decide the case on a ground (implied trust) different from the trial court’s ground (equitable mortgage); (2) whether the action for reconveyance was barred by prescription; (3) whether the deeds resulted in an implied trust; and (4) the nature of a deed of donation over a residential lot executed by Fulgencio Matias in favor of Teodora.

RULING

The Supreme Court affirmed the decision of the Court of Appeals. (1) The appellate court properly decided the case on the ground of implied trust, as it has the jurisdiction to affirm a judgment on different grounds, and an appellee seeking no affirmative relief is not required to make assignments of error. (2) The action was not barred by prescription. The Court of Appeals found that the true intent was for Teodora to hold the title in trust for her siblings, which created an implied trust. While such trusts generally prescribe in 10 years, the rule does not apply where a fiduciary relation exists and the trustee recognizes the trust. Continuous recognition precludes laches, and repudiation was deemed to have occurred only upon the filing of Teodora’s answer, so the action had not prescribed. (3) The execution of the deed and registration created an implied trust in favor of Teodora’s legitimate siblings. (4) Regarding the donated residential lot, the deed showed Fulgencio Matias gave Teodora only the beneficial use for life, so the order to partition the naked ownership among the heirs was proper.