Case # 3 regime;" that he was a homestead applicant way back in

1932 for the land possessed by him; that there exists a trust
G.R. No. L-20274            October 30, 1969
relationship Eloy Miguel would himself have personally
ELOY MIGUEL and DEMETRIO MIGUEL, petitioners, attended to his own application; and that, through fraud and
vs. misrepresentations, Leonor Reyes caused the filing and
THE COURT OF APPEALS and ANACLETA M. VDA. DE approval of an application and the issuance by the Bureau of
REYES, respondents. Lands of a sales patent covering the property in the name of
his wife, the private respondent, without the consent and
Facts: knowledge of the Miguels.

During the Spanish regime and prior to July 26, 1894, Eloy
Miguel, then single and resident of Laoag went to Isabela
(INGUD) and for some appreciable period of time stayed with COURT OF APPEALS
his kinsman Juan Felipe. There he spotted an uncultivated
The Court of Appeals dismissed the complaint upon the
parcel of land, one hectare of which he forthwith occupied,
ground that the judgment appealed from could not and did
and then cleared and planted to corn. After the Philippine
not bind the Director of Lands and the Registrar of Deeds of
Revolution, he returned to Laoag and took a wife. In the early
Isabela who were not parties thereto. Motion for
years of the ensuing American regime, Eloy Miguel returned
reconsideration was denied.
to Ingud with his family, resettled on the same land and paid
the annual realty taxes thereon. Eloy applied for Homestead
application for the land through Leonor Reyes. However,
ISSUE:
World War II broke out in the Pacific, and Miguel did not
hear of and about his homestead application; after the war Whether or not its finding that, assuming that reconveyance
he had no way of ascertaining the outcome of his application is still proper, the cases cited in the latter's first motion for
because Leonor Reyes had died during the Japanese reconsideration are not in point.
occupation. Sometime in 1932, on the occasion of the
marriage of Demetrio (son), Eloy Miguel ceded to Demetrio RULING:
14 hectares of the southern portion of the land as a gift
This is an action for the enforcement of a constructive trust —
propter nuptias. Demetrio forthwith declared the said portion
the ultimate object of which is the reconveyance of property
for taxation purposes in his name, as evidenced by tax
lost through breach of fiduciary relations and/or fraud.
declaration. However, unknown to Eloy and Demetrio Miguel,
Therefore, it can be filed within four years from the discovery
Leonor Reyes on June 25, 1935 filed sales application in the
of the fraud. And since the petitioners discovered the fraud
name of his wife, Anacleta M. Vda. de Reyes (hereinafter
committed against them by the Reyes spouses in 1950, they
referred to as the private respondent), covering the same
had until 1954 within which to bring this action. This action
parcel of land occupied and cultivated by the Miguels and
was seasonably instituted because the complaint was filed on
the subject of Eloy Miguel's homestead application.
September 7, 1953. It is noteworthy that the complaint for
Demetrio discovered that their land was covered by the sales reconveyance was not dismissed by the trial court. What it
application of the private respondent. Eloy Miguel forthwith denied was merely the relief or remedy of reconveyance.
filed on February 16, 1950 a protest with the Bureau of Lands However, in its decision, the trial court made certain findings
against sales application of the private respondent. of fact which justified the relief of reconveyance — e.g., that
Consequently, on February 21, 1950, the Director of Lands Eloy Miguel "has always been, and up to this time, in physical
ordered an investigation. When the hearing was reset for possession of the whole tract of land in question under claim
February 10, 1951. However, the Miguels had in the interim of ownership thru occupancy, he having occupied and
discovered that notwithstanding their protest and the cultivated the land since the Spanish regime;" that there was
investigation ostensibly being conducted, sales patent V-522 a trust relationship between Eloy Miguel and the Reyes
and original certificate of title P-1433, covering the parcel of spouses; and that the Reyes spouses have fraudulently and in
land in question, were granted and issued to the January 22, bad faith breached that trust. Hence, in reiterating their
1951, respectively. On September 7, 1953, Eloy and Demetrio positions before the respondent Court on the private nature
Miguel commenced the action in the CFI of Isabela against of the land, on the impropriety of impleading the Director of
the private respondent to compel her to reconvey to them Lands and the Register of Deeds of Isabela, and on the
the land covered by the abovementioned patent and title. existence of a trust relationship between the petitioners and
the Reyes spouses, the petitioners were in point of fact
inviting the respondent Court's attention to questions
erroneously decided against them by the trial court, in the
TRIAL COURT
hope that the respondent Court would render judgment in
The trial court found that Eloy Miguel "has always been, and accordance with the facts adjudged by the trial court as
up to this time, in physical possession of the whole tract of proven. Parenthetically, a fiduciary relation arises where one
land in question under claim of ownership thru occupancy, man assumes to act as agent for another and the other
he having occupied and cultivated the land since the Spanish reposes confidence in him, although there is no written
contract or no contract at all. If the agent violates his duty as
fiduciary, a constructive trust arises. It is immaterial that there
was no antecedent fiduciary relation and that it arose
contemporaneously with the particular transaction.

In the case at bar, Leonor Reyes, the private respondent's

husband, suggested that Eloy Miguel file a homestead
application over the land and offered his services in assisting
the latter to secure a homestead patent. Eloy Miguel
accepted Leonor Reyes' offer of services, thereby relying on
his word and reposing confidence in him. And in payment for
the services rendered by Leonor Reyes in preparing and filing
the homestead application and those still to be rendered by
him in securing the homestead patent, Eloy Miguel delivered
to Reyes 1/5 of his yearly harvest from the said land. When
Leonor Reyes died, the petitioners continued to deliver the
same percentage of their annual harvest to the private
respondent who undertook to continue assisting the former
to secure a homestead patent over said land. However, in
breach of their fiduciary duty and through fraud, Leonor
Reyes and the private respondent filed a sales application
and obtained a sales patent and ultimately an original
certificate of title over the same parcel of land.

Therefore, following the ruling in Fox v. Simons, supra, the

private respondent can be compelled to reconvey or assign
to the petitioners the parcel of land in the proportion of nine
hectares in favor of Eloy Miguel and 14 hectares in favor of
Demetrio Miguel, respectively.
CASE # 8 simulated for the purpose of enabling her to obtain another
loan. Petitioners failed to overcome the presumptive validity
of the extrajudicial settlement as a public instrument.
G.R. No. 112260 June 30, 1997

JOVITA YAP ANCOG, and GREGORIO YAP, JR.,

COURT OF APPEALS
petitioners,
Court of Appeals upheld the validity of the extrajudicial
vs.
settlement and sustained the trial court's dismissal of the
COURT OF APPEALS, ROSARIO DIEZ, and CARIDAD YAP, case. It emphasized that the extrajudicial settlement could
respondents. not have been simulated in order to obtain a loan, as the
new loan was merely "in addition to" a previous one which
private respondent Diez had been able to obtain even
without an extrajudicial settlement. Neither did petitioners
Gregorio Yap died, leaving his wife, private respondent
adduce evidence to prove that an extrajudicial settlement
Rosario Diez, and children, petitioners Jovita Yap Ancog and
was indeed required in order to obtain the additional loan.
Gregorio Yap, Jr.(who was a minor at this time), and private
The appellate court held that considering petitioner Jovita
respondent Caridad Yap as his heirs.
Yap Ancog's educational attainment (Master of Arts and
Rosario Diez obtained loans from the Bank of Calape, Bachelor of Laws), it was improbable that she would sign the
secured by a mortgage on the disputed land. The land, with settlement if she did not mean it to be such
improvements thereon, was formerly the conjugal property
ISSUE:
of the spouses Gregorio Yap and Rosario Diez.
1) Whether or not the extrajudicial settlement was valid. Yes.
The bank's lawyer, Atty. Narciso de la Serna, suggested that
she submit an extrajudicial settlement covering the disputed 2) Whether or not Gregorio Yap is barred by laches? No.
land as a means of facilitating the approval of her
application. The suggestion was accepted and Atty. de la RULING:
Serna prepared an extrajudicial settlement, which the heirs,
1) In this case, the trial court and the Court of Appeals found
with the exception of petitioner Gregorio Yap, Jr., then only
no evidence to show that the extrajudicial settlement was
15 years old, signed.
required to enable private respondent Rosario Diez to obtain
The loan was approved by the bank. Rosario Diez exercised a loan from the Bank of Calape. Petitioners merely claimed
rights of ownership over the land. She brought an ejectment that the extrajudicial settlement was demanded by the bank.
suit against petitioner Jovita Yap Ancog's husband and son
To the contrary, that the heirs (Jovita Yap Ancog and Caridad
to evict them from the ground floor of the house built on the
Yap) meant the extrajudicial settlement to be fully effective is
land for failure to pay rent. Thereafter, petitioner Jovita
shown by the fact that Rosario Diez performed acts of
Ancog learned that private respondent Rosario Diez had
dominion over the entire Land, beginning with its
offered the land for sale. Petitioner Ancog immediately
registration, without any objection from them. Instead,
informed her younger brother, petitioner Gregorio Yap, Jr. of
petitioner Jovita Ancog agreed to lease the land from her
their mother's plan to sell the land. They filed this action for
mother, private respondent Rosario Diez, and accepted from
partition in the RTC. As private respondent Caridad Yap was
her a special power of attorney to use the land in question as
unwilling to join in the action against their mother, Caridad
collateral for a loan she was applying from the DBP. Indeed it
was impleaded as a defendant.
was private respondent Diez who paid the loan of the
Petitioners alleged that the extrajudicial instrument was Ancogs in order to secure the release of the property from
simulated and therefore void. They claimed that in signing mortgage.
the instrument they did not really intend to convey their
2) The Court of Appeals erred in ruling that the claim of
interests in the property to their mother, but only to enable
petitioner Gregorio Yap, Jr. was barred by laches. In
her to obtain a loan on the security of the land to cover
accordance with Rule 74, Sec. 1 of the Rules of Court, as he
expenses for Caridad's school fees and for household repairs.
did not take part in the partition, he is not bound by the
settlement. It is uncontroverted that, at the time the
extrajudicial settlement was executed, Gregorio Yap, Jr. was a
TRIAL COURT minor. For this reason, he was not included or even informed
of the partition.
The trial court rendered judgment dismissing petitioners'
action. It dismissed petitioners' claim that the extrajudicial Instead, the registration of the land in Rosario Diez's name
settlement was simulated and held it was voluntarily signed created an implied trust in his favor by analogy to Art. 1451
by the parties. Observing that even without the need of of the Civil Code.
having title in her name Rosario Diez was able to obtain a
loan using the land in question as collateral, the court held In the case of O'Laco v. Co Cho Chit, Art. 1451 was held as
that the extrajudicial settlement could not have been creating a resulting trust, which is founded on the presumed
intention of the parties. As a general rule, it arises where such
may be reasonably presumed to be the intention of the
parties, as determined from the facts and circumstances
existing at the time of the transaction out of which it is
sought to be established. In this case, the records disclose
that the intention of the parties to the extrajudicial
settlement was to establish a trust in favor of petitioner Yap,
Jr. to the extent of his share. Rosario Diez testified that she
did not claim the entire property, while Atty. de la Serna
added that the partition only involved the shares of the three
participants.