GR 26699; (March, 1976) (Digest)
G.R. No. L-26699 March 16, 1976
BENITA SALAO, et al., plaintiffs-appellants, vs. JUAN S. SALAO, et al., defendants-appellants.
FACTS
The case involves a dispute over a forty-seven-hectare fishpond in Calunuran, Bataan, titled in the names of Juan Y. Salao, Sr. and his sister Ambrosia Salao. The plaintiffs, descendants of another branch of the Salao family, claimed that the fishpond was acquired using funds from the earnings of properties inherited from the common ancestor, Manuel Salao. They argued that Juan and Ambrosia held the property in trust for all the heirs, including Valentin Salao (plaintiffs’ predecessor). The defendants, successors of Juan Salao, countered that the fishpond was purchased with the personal funds of Juan and Ambrosia, as evidenced by sales documents from 1905-1908, and they had exercised exclusive ownership since obtaining title in 1911.
ISSUE
The primary issue is whether an implied trust was created over the fishpond in favor of the plaintiffs and, if so, whether their action to enforce it had prescribed.
RULING
The Supreme Court ruled in favor of the defendants, holding that no trust was established and the action had prescribed. For an implied trust to arise under Article 1456 of the Civil Code, clear and convincing proof is required that property was acquired through funds of another. The plaintiffs failed to present any documentary evidence to substantiate their claim that the fishpond was purchased with earnings from Manuel Salao’s estate. The evidence showed that Juan and Ambrosia exercised exclusive dominical acts over the property for decades, including selling it under pacto de retro and leasing it, without objection from Valentin Salao. Even assuming an implied trust existed, the action to recover the property had prescribed. The prescriptive period for enforcing an implied trust is ten years from the repudiation of the trust. The Court found that the trust, if any, was repudiated no later than 1918 when the estate of Valentina Ignacio (the widow) was partitioned and the fishpond was not included, and Valentin Salao received other properties in satisfaction of his share. The plaintiffs’ action, filed in 1954, was filed well beyond the ten-year prescriptive period. The Court also denied the defendants’ claim for moral damages and attorney’s fees, finding that the plaintiffs pursued their case in good faith, and the right to litigate should not be penalized.