G.R. No. 133047 , August 17, 1999
HEIRS OF LORENZO YAP, namely SALLY SUN YAP, MARGARET YAP-UY and MANUEL YAP, petitioners, vs. THE HONORABLE COURT OF APPEALS, RAMON YAP and BENJAMIN YAP, respondents.

FACTS

In February 1966, respondent Ramon Yap purchased a parcel of land in Quezon City from the spouses Carlos and Josefina Nery. The lot was registered in his name under TCT No. 102132, declared in his name for tax purposes, and he paid realty taxes from 1966 to 1992. In 1967, a two-storey 3-door apartment was constructed on the land, with one-fifth of the cost paid by Ramon and the rest by Chua Mia, the mother of Lorenzo, Benjamin, and Ramon. The improvement was declared for tax purposes in the name of Lorenzo Yap in deference to their mother’s wishes. Lorenzo Yap died in July 1970. His heirs (petitioners) later moved to Manila, and Ramon allowed them to use one unit of the apartment. On March 18, 1992, Ramon sold the land and his share of the apartment to his brother, respondent Benjamin Yap. Petitioners, claiming ownership, demanded respondents transfer the title to them and filed an ejectment case against a tenant. Respondents filed an action for quieting of title. Petitioners claimed that in 1966, the Nery spouses offered to sell the land to Lorenzo Yap, but because Lorenzo and his wife were Chinese citizens, he requested Ramon to act as a dummy, with an agreement that the property would be transferred to Lorenzo or his heirs upon his naturalization. They contended Lorenzo financed the construction. The trial court ruled for respondents, declaring Benjamin the lawful owner. The Court of Appeals affirmed the trial court’s decision but deleted the award of attorney’s fees.

ISSUE

The core issue is whether an implied trust existed wherein Ramon Yap held the legal title to the subject property in trust for his brother Lorenzo Yap, thereby entitling Lorenzo’s heirs to ownership.

RULING

The Supreme Court DENIED the petition and AFFIRMED the decision of the Court of Appeals. The Court found no merit in petitioners’ claim of an implied trust. It held that the evidence presented by petitioners, mainly the self-serving testimony of Sally Yap, was insufficient to establish an implied trust by parol evidence, as such proof must be as fully convincing as if proven by an authentic document. The findings of fact by the Court of Appeals, consistent with the trial court, were accorded respect. Furthermore, the Court applied the doctrine of clean hands, stating that even if such a trust agreement existed, it would have been created to circumvent the constitutional prohibition (under the 1935, 1973, and 1987 Constitutions) against aliens acquiring private agricultural land, save by hereditary succession. A trust cannot be enforced if it contravenes the law. Thus, what cannot be done expressly cannot be done impliedly through a resulting trust. The incidental issues raised were rendered unnecessary to resolve.