G.R. No. 47354. March 21, 1989.
HORACIO G. ADAZA and FELICIDAD MARUNDAN, petitioners, vs. THE HONORABLE COURT OF APPEALS and VIOLETA G. ADAZA, assisted by her husband LINO AMOR, respondents.

FACTS

Victor Adaza, Sr. donated a parcel of public land to his daughter, respondent Violeta Adaza, in 1953. Violeta, assisted by her brother petitioner Horacio Adaza, subsequently filed a homestead application over the land, which was approved. An Original Certificate of Title was issued solely in Violeta’s name in 1960. In 1971, during a family gathering, Horacio presented a prepared Deed of Waiver for Violeta’s signature. This document stated that the property, though registered only in Violeta’s name, was owned in common by her and Horacio, and it conveyed one-half of the property to him. Violeta signed the Deed.
Violeta and her husband later filed a complaint to annul the Deed of Waiver, alleging it was procured through Horacio’s fraud, misrepresentation, and undue influence. They asserted she was the absolute owner by virtue of the donation and the title. Horacio, in his defense, claimed co-ownership and argued the waiver was voluntary. He also counterclaimed for reconveyance of his alleged half-share. The trial court upheld the validity of the Deed of Waiver. The Court of Appeals reversed, declaring the waiver void and dismissing Horacio’s counterclaim, primarily on the ground that the property was Violeta’s exclusive property, making the waiver’s recital of co-ownership a false cause.

ISSUE

The core issue is whether the Deed of Waiver is valid and enforceable, and consequently, whether Horacio is entitled to reconveyance of a one-half interest in the subject property.

RULING

The Supreme Court reversed the Court of Appeals and reinstated the trial court’s decision, declaring the Deed of Waiver valid and upholding Horacio’s right to a one-half share. The Court rejected the appellate court’s finding that the stated cause or consideration—co-ownership—was false. The legal logic proceeded from two key principles. First, the donation from Victor Adaza, Sr. to Violeta was subject to an implied trust. Since the donated land was still part of the public domain at the time of donation, Victor Adaza could not have legally transferred full ownership. The subsequent homestead patent, procured through the joint efforts of Violeta and Horacio, inured to the benefit of both as co-owners, with Violeta holding title in trust for her brother. This established a fiduciary relationship and a constructive trust.
Second, given this established trust relationship, the Deed of Waiver was not based on a false cause. Its statement of co-ownership reflected the true legal situation arising from the trust. The Court found the waiver to be a clear act of Violeta recognizing the trust and conveying the beneficial interest she held for Horacio. Furthermore, the Court rejected the defense of laches against Horacio’s counterclaim. Delay in asserting a right is construed less strictly among close relatives due to the confidential relationship and continued recognition of the trust, as evidenced by Violeta’s prior correspondence with Horacio concerning the property. Therefore, the waiver was valid, and Horacio was entitled to reconveyance of his one-half share.