G.R. No. 206404. February 14, 2022
CONCEPCION CHUA GAW, PETITIONER, VS. SUY BEN CHUA AND FELISA CHUA, RESPONDENTS.

FACTS

The case involves three parcels of land in Hagonoy, Bulacan: Lot No. 5370-A, Lot No. 5662, and Lot No. 5663. On November 22, 1969, the Santos siblings executed a deed of absolute sale over these lots in favor of Lu Pieng. The lots were rented by spouses Chua Chin and Chan Chi (Chinese nationals) for their lumber business. They had seven children, including petitioner Concepcion Chua Gaw and respondent Suy Ben Chua. Lu Pieng sold the lots to Lucio (a son) on November 26, 1976. Lucio then sold them to Juanita (a daughter) on July 18, 1980. Juanita donated Lot No. 5370-A to Ben on July 28, 1988, and sold Lots Nos. 5662 and 5663 to Ben on September 20, 1989. Chua Chin died in 1986 and Chan Chi in 1993, both remaining Chinese citizens; their estates were never settled.
Two cases were filed: 1) Ben filed an application for registration and confirmation of title over Lot No. 5370-A (LRC Case No. 25-M-95); and 2) Concepcion filed a complaint for reconveyance of her undivided share in Lots Nos. 5662 and 5663, alleging her parents were the true buyers and Lu Pieng merely held the lots in trust for the heirs (Civil Case No. 804-M-96). The cases were consolidated.
At trial, witnesses for Concepcion (Herminia Santos Salamat, Manuel Torres, and Concepcion herself) testified that Chua Chin was the actual buyer of the lots in 1969, with Lu Pieng acting only as a trustee or “tagapag-ingat” because the parents were aliens, and the property was to be transferred to the heirs when they became Filipino citizens. Ben testified he had no knowledge of Lu Pieng’s intent and that his father owned the improvements but rented the lots from Lu Pieng.
The Regional Trial Court (RTC) denied Ben’s application for registration, finding he failed to prove continuous possession since June 12, 1945. It also granted Concepcion’s complaint, declaring Chua Chin the true buyer and ordering Ben to deliver Concepcion’s undivided share in all three lots. The Court of Appeals (CA) affirmed the denial of Ben’s application but dismissed Concepcion’s complaint. The CA upheld the presumption of regularity of the notarized deed of sale to Lu Pieng and ruled that recognizing an implied trust would violate the constitutional prohibition against alien landownership. Concepcion filed a petition for review.

ISSUE

Whether an implied trust was created in favor of the heirs of Chua Chin and Chan Chi over the subject properties, entitling petitioner Concepcion Chua Gaw to reconveyance of her undivided share.

RULING

No. The Supreme Court denied the petition and affirmed the Court of Appeals’ Decision. The Court held that no implied trust under Article 1448 of the Civil Code was established. For such a trust to arise, the price must be paid by the beneficiary at the time of the sale. The evidence presented, primarily testimonial, failed to prove that Chua Chin paid the purchase price to the Santos vendors in 1969. The notarized deed of absolute sale expressly named Lu Pieng as the vendee and was presumed regular. The allegation that Lu Pieng acted as a trustee to circumvent the constitutional prohibition against aliens owning land cannot be sustained. The Constitution expressly prohibits aliens from acquiring lands, and any scheme or device to violate this is void. Allowing an implied trust based on the alleged intent to circumvent the law would give effect to an illegal transaction. Since Chua Chin and Chan Chi were Chinese nationals, they could not have validly acquired the land, directly or indirectly. Therefore, the properties were not part of their estate, and their heirs, including Concepcion, have no hereditary rights over them. The series of subsequent transfers (Lu Pieng to Lucio, Lucio to Juanita, and Juanita to Ben) were valid transactions involving the titled owners.