G.R. No. L-39299 October 18, 1988
ISAAC, SEVERINO, MARIA, TELESFORA, FELISA, SERAPIO, SIMEON and MACARIA all surnamed PANGAN, petitioners, vs. COURT OF APPEALS and TEODORA GARCIA, respondents.

FACTS

The case involves a parcel of land in Bulacan originally owned by Leon Hilario. Petitioners, Hilario’s great-grandchildren through his daughter Silvestra, filed an application for land registration in 1964, claiming ownership through continuous and exclusive possession since 1895. The trial court granted the application ex-parte in 1966 after an order of general default. Subsequently, private respondent Teodora Garcia, Hilario’s granddaughter through his daughter Catalina, filed a petition to set aside the decision, claiming she was a co-heir entitled to a one-half share of the property. She alleged the land was inherited by Hilario’s three children, with the son waiving his share, leaving Silvestra and Catalina as co-owners.
The trial court initially reinstated its original registration order, ruling that Garcia’s rights were forfeited by extinctive prescription as she left the land in 1942 and did not assert her claim until 1966. On appeal, the Court of Appeals reversed this decision, holding that the petitioners failed to clearly prove acquisition by prescription and that Garcia was entitled to a one-half share as a co-heir.

ISSUE

Whether the Court of Appeals erred in reversing the trial court’s factual findings and in holding that an implied trust existed, thereby entitling Teodora Garcia to a one-half share of the property without her claim being barred by prescription.

RULING

The Supreme Court denied the petition and affirmed the decision of the Court of Appeals. The appellate court is not bound by the trial court’s factual findings if they are not supported by the evidence or if the record dictates a different conclusion. The Court of Appeals correctly exercised its jurisdiction to review questions of fact.
The Court found that the respondent court’s acceptance of Garcia’s claim—that the land was inherited from the common ancestor, Leon Hilario—was based on the record and was not an arbitrary conclusion. From this finding, the appellate court properly held that an implied trust was created between the petitioners, who were in possession of the land, and their aunt and co-heir, Teodora Garcia. The petitioners’ possession, while adverse to the world, was not adverse to Garcia as a co-owner. Their possession was deemed to be in trust for her share, especially since evidence indicated their father occasionally shared the fruits of the land with Garcia or promised her a share.
The Supreme Court agreed that the petitioners’ tax declarations and tax payments did not conclusively prove exclusive ownership adverse to Garcia. Their possession was in the concept of a co-owner, not in a manner that repudiated the trust. The act of filing the registration application in 1965, which sought to exclude Garcia, constituted the actionable repudiation of the trust. Garcia’s filing of her opposition in 1966 was thus timely, and her right had not prescribed. The Court emphasized that its role is to dispense justice, and under the circumstances, equity favored protecting the rights of the deprived co-heir.