G.R. No. 119974 June 30, 1999
RUPERTO L. VILORIA, petitioner, vs. COURT OF APPEALS, LIDA C. AQUINO, assisted by her husband Gregorio Aquino, MANUEL V. CACANANDO, as heirs of the late Felicitacion V. Cacanando, RODOLFO V. ANCHETA, ESTRELLA V. ANCHETA and CARMEN A. NICOLASURA, assisted by her husband Ramon Nicolasura, as heirs of the late Josefina V. Ancheta and ANASTACIO L. VILORIA, respondents.

FACTS

Nicolasa and Rosaida Viloria died single and without issue, survived by their brothers Ruperto and Anastacio, and the heirs of their predeceased sisters, Felicitacion and Josefina. The heirs filed an action for partition against Ruperto, who was in possession of a commercial lot and an orchard previously co-owned by the siblings. Ruperto claimed full ownership, asserting that Nicolasa and Rosaida had sold their shares to him via deeds of sale executed in 1965 (commercial lot) and 1978/1987 (orchard).
The heirs contested the validity of these conveyances. They argued that the 1965 deed covering the commercial lot was merely to secure a loan, creating an express trust where Ruperto held title as trustee while Nicolasa and Rosaida retained beneficial ownership, as evidenced by their continued collection of rentals for 25 years. Regarding the orchard, they contended Rosaida’s 1987 deed of sale was without consideration and was subsequently revoked, while Nicolasa’s share had allegedly been donated to another heir.

ISSUE

The primary issues were: (1) whether the 1965 deed of sale for the commercial lot constituted an absolute sale or created an express trust; and (2) whether prescription had run in favor of Ruperto to bar the heirs’ claim.

RULING

The Supreme Court affirmed the Court of Appeals’ decision. On the first issue, the Court upheld the finding that an express trust was created over the commercial lot. Ruperto’s admission and assurance to his sisters that they would remain co-owners, coupled with their continuous exercise of acts of dominion (collecting rentals) for decades, clearly demonstrated that the transfer of title was not intended as an absolute conveyance. As a trustee, Ruperto could not acquire the property for his own benefit. Therefore, upon the death of Nicolasa and Rosaida, their 2/3 interest in the commercial lot passed to their heirs.
Regarding the orchard, the Court sustained the validity of Rosaida’s 1987 notarized deed of sale to Ruperto. The subsequent deed of revocation, being a unilateral act, could not nullify the prior contract without a proper judicial action for annulment. Consequently, only the 1/3 share of the orchard formerly belonging to Nicolasa (which was not effectively conveyed to Ruperto) was subject to partition among the heirs. The defense of prescription was unavailing because an express trust prescribes only after 10 years from its repudiation, and Ruperto’s acts did not constitute clear repudiation. The final partition allocated 1/4 of the subject properties to Ruperto and 3/4 to the other heirs.