G.R. No.

109307 November 25, 1999

TEODORA SALTIGA DE ROMERO, PRESENTACION ROMERO MAMA,
Represented by SABDULLAH MAMA, LUCITA ROMERO PACAS, GLORIOSA
ROMERO RASONABLE and MINDALINA ROMERO NUENAY, petitioners, vs.
THE HONORABLE COURT OF APPEALS
GONZAGA-REYES, J.:
Before us is a Petition for Review on Certiorari of the decision of the Court of
Appeals 1 in CA-G.R. CV No. 33164 entitled TEODORA SALTIGA DE ROMERO ET.
AL. vs. LUCERO ROMERO ET. AL.and LUTERO ROMERO, ET. AL. vs. SPOUSES
MELITON PACAS, ET. AL. involving two civil cases which were tried jointly by the
Regional Trial Court of Lanao Del Norte, Branch 7, namely:
1. Civil Case No. 591, which was filed by herein Petitioners Teodora Saltiga De
Romero, Presentacion Romero-Mama (PRESENTACION), Lucita Romero-Pacas
(LUCITA), Gloriosa Romero-Rasonable (GLORIOSA), and Mindalina Romero-Nuenay
(MINDALINA) against Lutero Romero (LUTERO) and the Development Bank of the
Philippines (DBP) for reconveyance of their share in a parcel of land, Lot 23 Pls-35,
titled in the name of LUTERO; and
2. Civil Case No. 1056, which was filed by LUTERO and his wife Natividad S. Romero
against LUCITA and her husband Meliton Pacas, PRESENTACION and her husband
Sabdullah Mama and GLORIOSA and her husband Dionisio Rasonable for annulment
of three affidavits wherein LUTERO supposedly sold to them shares over Lot No. 23
Pls-35.
The facts as found by the Court of Appeals are as follows:
From the evidence presented by the appellants, it appears that on December 12,
1939 Eugenio Romero bought from spouses Celedonio Jaug and Sofia Macan the
latter's "rights, interest, participation, ownership and possession" of 12 hectares of
land. The land in question was then public land. When Eugenio Romero applied for a
homestead patent for said land, the same was disapproved by the Bureau of Lands
because said Romero already had applied for a homestead patent for 24 hectares
and was disqualified from owning the additional 12 hectares.
Eugenio Romero placed the application in the name of his eldest son, Eutiquio
Romero, allegedly in trust for all the children of Eugenio. When Eutiquio got married
and had children, his brothers and sisters got worried that his heirs may claim the
land so the application was transferred in the name of Lutero Romero, the second
son of Eugenio who was then still single. When Lutero in turn got married, he
relinquished the application in favor of his younger brother Ricardo through an
instrument dated July 5, 1952.
The spouses Eugenio Romero and Teodora Saltiga had nine (9) children. Other than
the three (3) sons aforenamed, they had six (6) daughters, namely Generosa,
Diosdada, Mindalina, Lucita, Presentacion and Gloriosa.
Eugenio Romero died sometime in 1948. In 1961 his widow Teodora caused the land
in question to be subdivided among six (6) of her children, the other three (3) having
already been given their shares in the other properties of the Romero spouses. The
twelve (12) hectares were supposedly divided equally among Lutero, Ricardo,
Mindalina, Lucita, Presentacion, and Gloriosa who all got about two (2) hectares

each. Subsequently, however, Ricardo conveyed his share to Lucita and Gloriosa
who therefore had 3 hectares each. On the other hand, Mindalina left her share in the
care of her mother Teodora and her sister Presentacion because she left for Davao
City. Lutero later requested that he be allowed to farm this share of Mindalina, thus he
occupied a total of 4 hectares with the consent of his mother Teodora and sister
Presentacion.
The appellants further claimed that after the partition, they had been in occupancy of
their respective shares through their tenants.
However, appellee Lutero Romero presented evidence to the effect that sometime in
1969 a policeman picked him up and brought him to the office of Mayor Pablito
Abragan of Kapatagan where he found his mother Teodora and his three (3) sisters
Gloriosa, Presentacion and Lucita and the respective husbands of the latter two. He
testified that when he arrived at the office, he was presented three (3) affidavits for his
signature. Said affidavits were to the effect that he sold three (3) hectares each out of
the 12 hectares of land to his sister Gloriosa, his brother-in-law Sabdullah Mama
married to Presentacion Romero, and to Meliton Pacas married to Lucita Romero for
a consideration of P3,000.00 each.
Appellee Lutero Romero testified that he told the mayor that he was not selling the
land and that he could not do so because the five-year period had not yet elapsed but
the mayor told him to just sign the affidavits because after five (5) years his sisters will
get the land and pay for them and that if they would not pay, the mayor will take steps
to return the land personally to him. Lutero stated that he has not been paid for the
land by his sisters.
Lutero Romeo claimed that as early as 1940-1941 he had already been in occupancy
of the 12 hectares in question when it was shown to him by this father who owned the
adjoining parcel; and that the said land had been titled in his name even while his
father Eugenio was still alive. Indeed it appears that the title to the property, O.C.T
No. P-2,261, had been issued to Lutero Romero as early as April 26, 1967, after the
homestead patent was issued in his favor on April 7, 1967. He said that his three (3)
sisters occupied portions of the property only in 1969, after he was forced to sign the
affidavits by Mayor Abragan.
Lutero Romero had thereafter repudiated the three (3) affidavits on August 12, 1974.
Because of this, estafa charges were filed against him by the three (3) parties
concerned but said charges were dismissed.
It further appears that Lutero Romero obtained a loan from the Development Bank of
the Philippines on December 3, 1975 and mortgaged the land in question as collateral
for said loan. Appellants claim that only then did they know that the land had been
titled in the name of Lutero Romero. Thereafter, through a letter dated August 2,
1976, Lutero Romero asked his sisters to vacate the land in question.
A few days thereafter, or on August 14, 1976, Civil Case No. 591 was filed against
Lutero Romero. 2
On March 11, 1991, the RTC rendered a decision the dispositive portion of which
reads:
WHEREFORE, judgment is hereby rendered:
1. Declaring the three (3) affidavits of sale as null and void and no effect;

2. Ordering the plaintiffs in Civil Case No. 591 and defendants in Civil Case No. 1056,
namely Sabdullah Mama, Presentation Romero-Mama Gloriosa Romero Rasonable,
Meliton Pacas and Lucita Romero to surrender and to deliver to Lutero Romero the
possession of all the portions of Lot 23, Pls-35;
3. Ordering the Municipal Assessor of Kapatagan, Lanao del Norte to cancel Tax
Declaration Nos. 6029, 6030, 6031 and 6032 in the names of defendants (Civil Case
No. 1056) Sabdullah Mama, Gloriosa Rasonable, plaintiff Lutero Romero and
defendant Meliton Pacas and to restore Tax Declaration No. 1347 in the name of
Lutero Romero for the entire Lot 23, Pls-35;
4. Ordering the defendants (Civil Case No. 1056) to pay to the plaintiff the sum of
TEN THOUSAND (P10,000.00) PESOS as actual damages;
5. Ordering the defendants (Civil Case no. 1056) to pay to the plaintiffs the sum of
TEN THOUSAND (P10,000.00) Pesos as moral damages; and
6. Ordering the defendants (Civil Case No. 1056) to pay the cost of this proceeding.
SO ORDERED. 3
Not satisfied with the decision of the RTC, petitioners appealed to the Court of
Appeals, which affirmed the decision of the RTC in favor of LUTERO. Hence this
petition where the petitioners assign the following issues:
WHETHER OR NOT LUTERO ROMERO IS A TRUSTEE OF LOT 23 PLS-35 FOR
THE BENEFIT OF THE HEIRS OF EUGENIO ROMERO.
WHETHER OR NOT WITH OR WITHOUT SAID THREE (3) AFFIDAVITS IN
QUESTION PETITIONERS' VALID CAUSE OF ACTION CAN STAND OR NOT. 4
DBP filed its comment to the petition and seeks the dismissal of the case against it
considering that the agricultural loan in favor of LUTERO has been paid in full. DBP
maintains that since the mortgage was already cancelled, petitioners have no cause
of action against it. 5
Petitioners contend that LUTERO merely holds Lot 23 Pls-35 in trust for the benefit of
the heirs of his father EUGENIO since it was actually EUGENIO who first applied for
the homestead but considering that EUGENIO was already granted a homestead, the
application had to be placed in the name of his eldest son EUTIQUIO. The application
was subsequently transferred to the name of LUTERO who later transferred the
application in the name of Ricardo Romero (RICARDO), his younger brother. To
support their contention, petitioners point to the testimony of LUTERO during the
investigation of the homestead application of RICARDO to the effect that he
transferred and relinquished his rights as trustee of the lot to RICARDO. The fact that
LUTERO was able to cause the issuance of the Homestead title of the land in
question under his name clearly shows that LUTERO employed fraud in procuring the
same. Consequently, herein petitioners are entitled to recover the said lot. Petitioners
also rely on the three affidavits of sale executed by LUTERO wherein he sold portions
of Lot 23 Pls-35 in favor of GLORIOSA, PRESENTACION and her husband and
LUCITA and her husband. They claim that pursuant to these three affidavits, LUTERO
no longer has a claim over Lot 23 Pls-35. 6
On the other hand, respondents maintain that LUTERO did not commit fraud in the
titling of Lot 23 Pls-35. They allege that the petitioners failed to prove this during the
trial of the case. On the contrary, LUTERO complied with all the requirements of the
law when he successfully obtained title to the lot. Respondents also deny that

LUTERO held the land in trust for the benefit of the heirs of his father EUGENIO.
According to them, this violates the provisions of The Public Land Act. Even assuming
that a trust in fact was created, such is null and void for being contrary to law. Finally,
respondents maintain that the three affidavits of sale executed in favor of the
petitioners are void since they were simulated and not supported by any
consideration; and they were executed within the five-year prohibitory period from the
issuance of the patent. 7
The Court of Appeals ruled in favor of LUTERO, stating:
Appellants herein maintain that the land was held by Lutero Romero, only in trust for
his brothers and sisters because the land belonged to their father Eugenio Romero.
We do not find any basis for this posture. Eugenio Romero was never the owner of
the land in question because all he bought from the Jaug spouses were the alleged
rights and interests, if there was any, to the said land which was then part of the
public domain. The Jaugs could not have sold said land to Eugenio as they did not
own it. Eugenio Romero was not granted, and could not have been granted, a patent
for said land because he was disqualified by virtue of the fact that he already had
applied for the maximum limit of 24 hectares to which he was entitled. The land in
question could not therefore have passed on from him to his children.
On the other hand, Lutero Romero applied for a homestead patent over the land in
question and his application was duly approved. The appellants have not established
that there was any fraud committed in this application. In fact it appears that there
was even a hearing conducted by the Bureau of Lands on the application because a
certain Potenciano Jaug had been contesting the application. Under the presumption
of law, that official duty has been regularly performed, there appears to be no ground
to question the grant of the patent to Lutero Romero in 1967.
His sisters Gloriosa, Presentacion, and Lucita apparently recognized Lutero's
ownership of the property when in 1969 they sought the help of the mayor of
Kapatagan to convince Lutero to execute affidavits of sale in their favor. However,
Lutero could not have sold any portion of the property to them. Any such sale
executed within five (5) year period from the date of the issuance of the title is null
and void even if the sale was made by the homesteader in favor of his/her
descendants (Gayapano vs. IAC, 199 SCRA 309). Furthermore, it has been
established that the three supposed vendees never paid any consideration for the
supposed sale of the lots they occupied.
We agree with the observation of the appellee that under the theory of the appellants,
the latter had sought to circumvent the law. It would appear that because Eugenio
Romero could not legally qualify to have the land in question, he had allegedly sought
to place the application in another's name with the same intention to own it through
another. This certainly cannot be countenanced. 8
We find no reversible error committed by the Court of Appeals.
The core issue in this case is whether LUTERO acquired Lot 23 Pls-35 in trust for the
benefit of the heirs of EUGENIO.
"A trust is the legal relationship between a person having an equitable ownership in
property and another person owning the legal title to such property, the equitable
ownership of the former entitling him to performance of certain duties and the
exercise of certain powers by the latter." 9 Trust relations between parties may be

express or implied. 10 Express trusts are those which are created by the direct and
positive acts of the parties, by some writing or deed, or will, or by words evidencing
an intention to create a trust. 11 Implied trusts are those which without being express,
are deducible from the nature of the transaction as matters of intent, or which are
superinduced on the transaction by operation of law as a matter of equity,
independently of the particular intention of the parties. 12Implied trusts may either be
resulting or constructive trusts, both coming into by operation of law.
Resulting trusts are based on the equitable doctrine that valuable consideration and
not legal title determines the equitable title or interest and are presumed always to
have been contemplated by the parties. They arise from the nature or circumstances
of the consideration involved in a transaction whereby one person thereby becomes
invested with legal title but is obligated in equity to hold his legal title for the benefit of
another. On the other hand, constructive trusts are created by the construction of
equity in order to satisfy the demands of justice and prevent unjust enrichment. They
arise contrary to intention against one who, by fraud, duress or abuse of confidence,
obtains or hold the legal right to property, which he ought not, in equity and good
conscience, to hold. 13
However, it has been held that a trust will not be created when, for the purpose of
evading the law prohibiting one from taking or holding real property, he takes a
conveyance thereof in the name of a third person. 14
In the present case, the petitioners did not present any evidence to prove the
existence of the trust. Petitioners merely alleged that LUTERO, through fraudulent
means, had the title of Lot 23 Pls-35 issued in his name contrary to the alleged
agreement between the family that LUTERO would merely hold the lot in trust for the
benefit of EUGENIO's heirs. The alleged agreement was not proven and even
assuming that the petitioners duly proved the existence of the trust, said trust would
be of doubtful validity considering that it would promote a direct violation of the
provisions of the Public Land Act as regards the acquisition of a homestead patent. A
homestead applicant is required by law to occupy and cultivate the land for his own
benefit, and not for the benefit of someone else. 15 Furthermore, under Section 12 of
The Public Land Act (CA 141), a person is allowed to enter a homestead not
exceeding twenty-four (24) hectares. In the present case, it is not disputed that
EUGENIO already applied for a homestead patent for twenty-four (24) hectares of
land and was disqualified from applying for an additional twelve (12) hectares. If we
uphold the theory of the petitioners and rule that a trust in fact existed, we would be
abetting a circumvention of the statutory prohibitions stated under the Public Land
Act. We therefore find no legal or factual basis to sustain the contention of the
petitioners that LUTERO merely held Lot 23 Pls-35 in trust for the benefit of the heirs
of EUGENIO.
As for the alleged sale of three portions of the lot for a consideration of P3,000.00
each evidenced by the three affidavits of sale executed by LUTERO in favor of
GLORIOSA, PRESENTACION and LUCITA, the Court of Appeals correctly declared
the three conveyances void. CA 141 prohibits the alienation of a homestead within
five years from the issuance of the patent and grant under Section 118, which states:
Sec. 118. Except in favor of the Government or any of its branches, units, or
institutions, lands acquired under free patent or homestead provisions shall not be

subject to encumbrance or alienation from the date of the approval of the application
and for a term of five years from and after the date of issuance of the patent and
grant, nor shall they become liable to the satisfaction of any debt contracted prior to
the expiration of said period, but the improvements or crops on the land may be
mortgaged or pledged to qualified persons, associations, or corporations.
No alienation, transfer, or conveyance of any homestead after five years and before
twenty-five years after the issuance of title shall be valid without the approval of the
Secretary of Agriculture and Commerce, which approval shall not be denied except
on constitutional and legal grounds.
"The conveyance of a homestead before the expiration of the five-year prohibitory
period following the issuance of the homestead patent is null and void and cannot be
enforced, for it is not within the competence of any citizen to barter away what public
policy by law seeks to preserve." 16 In the present case, since the sales were made on
January 17, 1969 or less than two years after the issuance of LUTERO's title to the
homestead on April 7, 1967, the sales are clearly void.
Finally, we cannot grant DBP's prayer to be dropped from the case even if the
mortgage in its favor has been cancelled. DBP did not appeal the decision of the
Court of Appeals and cannot therefore seek affirmative relief from this Court other
than the ones granted in the decision of the court below. 17 All that said appellee can
do is to make a counter-assignment of errors or to argue on issues raised at the trial
only for he purpose of sustaining the judgment in his favor, even on grounds not
included in the decision of the court a quo nor raised in the appellant's assignment of
errors or arguments.
WHEREFORE, the instant petition is hereby DENIED.
SO ORDERED.
[G.R. No. 133047. August 17, 1999]
HEIRS OF LORENZO YAP, namely SALLY SUN YAP, MARGARET YAP-UY and
MANUEL YAP, petitioners, vs. THE HONORABLE COURT OF APPEALS, RAMON
YAP and BENJAMIN YAP, respondents.
What in essence petitioners seek is the enforcement of an alleged trust agreement
between Lorenzo Yap, now deceased, and his brothers Ramon and Benjamin, herein
co-respondents, covering a piece of land and its improvement. The case and factual
settings found by the Court of Appeals do not appear to deviate significantly from that
priorly made by the trial court.
Sometime in February 1966, Ramon Yap purchased a parcel of land situated at 123
(formerly 75) Batanes Street, Galas, Quezon City, covered by Transfer Certificate of
Title No. 82001/T-414, from the spouses Carlos and Josefina Nery. The lot was
thereupon registered in the name of Ramon Yap under Transfer Certificate of Title No.
102132; forthwith, he also declared the property in his name for tax purposes and
paid the real estate taxes due thereon from 1966 to 1992.In 1967, Ramon Yap
constructed a two storey 3-door apartment building for the use of the Yap family. Onefifth (1/5) of the cost of the construction was defrayed by Ramon Yap while the rest
was shouldered by Chua Mia, the mother of Lorenzo, Benjamin and Ramon. Upon its

completion, the improvement was declared for real estate tax purposes in the name
of Lorenzo Yap in deference to the wishes of the old woman.
Lorenzo Yap died on 11 July 1970. A few months later, his heirs (herein petitioners)
left their family dwelling in Lucena City to reside permanently in Manila.Ramon Yap
allowed petitioners to use one unit of the apartment building.
On 18 March 1992, Ramon Yap sold the land and his share of the 3-door apartment
to his brother, his herein co-respondent Benjamin Yap, for the sum of P337,500.00
pursuant to a Deed of Sale, recorded on even date in the Memorandum of
Encumbrances of the title to said property. Transfer Certificate of Title No. 73002 was
in due time issued in the name of Benjamin Yap.
The controversy started when herein petitioners, by a letter of 08 June 1992, advised
respondents of the formers claim of ownership over the property and demanded that
respondents execute the proper deed necessary to transfer the title to them. At about
the same time, petitioners filed a case for ejectment against one of the bonafide
tenants of the property.
On 29 July 1992, respondents filed an action with the Regional Trial Court (RTC) of
Quezon City, docketed Civil Case No. Q-92-12899, for quieting of title against
petitioners. In their answer, petitioners averred that sometime in 1966 the spouses
Carlos and Josefina Nery offered to sell the disputed parcel of land to their
predecessor-in-interest, Lorenzo Yap, for the sum of P15,000.00. Since Lorenzo and
his wife Sally Yap were at that time Chinese citizens, Lorenzo requested his brother
Ramon to allow the use of the latters name in the purchase, registration, and
declaration for tax purposes of the subject lot to which Ramon Yap consented. It was
agreed that the property would remain registered in the name of Ramon Yap until
such time as Lorenzo would have acquired Philippine citizenship but that, should
Lorenzo predecease, the lot would then be transferred to Lorenzos heirs upon the
latters naturalization. Petitioners contended that it was Lorenzo who had caused the
construction of the 3-door apartment on the property, merely entrusting the money
therefor to Ramon Yap. The death of Lorenzo in 1970 prompted petitioners to move in
and occupy the apartment and the lot, without any objection from Ramon and
Benjamin, although the latter were allowed to stay in the premises since they had no
other place to live in. In 1991, petitioners acquired Philippine citizenship and,
forthwith, they requested Ramon Yap to have the title to the lot transferred to their
names but to their chagrin they discovered that Ramon had sold the lot to his corespondent Benjamin.
Assessing the evidence before it, the trial court found for the respondents and
adjudged Benjamin Yap to be the true and lawful owner of the disputed property.
On appeal, the Court of Appeals affirmed the decision of the trial court and debunked
the claim of petitioners that Ramon Yap was merely so used as a dummy by Lorenzo
Yap. Giving full weight and credit to the Deed of Sale executed by the Nery spouses
in favor of Ramon Yap, the appellate court stressed that to overcome the presumption
of regularity in the execution of a public document, the evidence to the contrary
should be clear and convincing even as it was equally incumbent upon petitioners to
show that the subsequent sale of the property to Benjamin had only been simulated
and fictitious. The appellate court, however, deleted the award of attorneys fees in

favor of respondents for, in its view, it was not adequately shown that petitioners had
acted in bad faith in pursuing their case.
Petitioners are now before this Court seeking a reversal of the decision of the Court of
Appeals and contending that1.

2.

3.

4.

5.

6.

7.
8.

THE RESPONDENT COURT OF APPEALS COMMITTED REVERSIBLE ERROR

WHEN IT HOLDS THAT DEFENDANTS-APPELLANTS FATHER, LORENZO YAP,
BEING CHINESE CAN NOT ENTER INTO A TRUST AGREEMENT AND THE
EXISTENCE OF A TRUST AGREEMENT CAN NOT BE PROVEN BEING CHINESE.
THE RESPONDENT COURT OF APPEALS COMMITTED REVERSIBLE ERROR
WHEN IT HOLDS THAT THE FAILURE TO SHOW WRITTEN TRUST AGREEMENT
RENDERS THE ALLEGED AGREEMENT UNENFORCEABLE BY NOT
CONSIDERING THE SAME AS ONE UNDER IMPLIED TRUST.
THE RESPONDENT COURT OF APPEALS COMMITTED REVERSIBLE ERROR
WHEN IT HOLDS THAT PAROL EVIDENCE AND/OR STATUTE OF FRAUDS
APPLIED IN THE CASE AT BAR.
THE RESPONDENT COURT OF APPEALS COMMITTED REVERSIBLE ERROR
WHEN IT HOLDS THAT APPELLANTS HAVE TO REFUTE THE DEED OF SALE
EXECUTED BY THE NERY SPOUSES IN FAVOR OF RAMON YAP BY CLEAR AND
CONVINCING EVIDENCE NOTWITHSTANDING ADMISSION OF THE SAID DEED
OF SALE.
THE RESPONDENT COURT OF APPEALS COMMITTED REVERSIBLE ERROR
WHEN IT DID NOT CONSIDER THAT IN TRUST THE TITLE IS IN THE NAME OF
THE TRUSTEE AND NOT IN THE NAME OF THE NAKED OWNER.
THE RESPONDENT COURT OF APPEALS ERRED WHEN IT HOLDS THAT RAMON
YAP CAN NOT BE A DUMMY OF LORENZO YAP BEING ALIEN AND DISQUALIFIED
TO OWN REAL PROPERTY.
THE RESPONDENT COURT OF APPEALS ERRED IN NOT DECLARING THE TITLE
IN THE NAME OF RAMON YAP VOID BEING ACQUIRED AS DUMMY.
THAT RESPONDENT COURT OF APPEALS COMMITTED REVERSIBLE ERROR
WHEN IT RULED THAT BENJAMIN YAP HAS POSSESSION OF APARTMENT UNIT
123 LIKEWISE OWNERSHIP PERSONAL PROPERTIES THEREIN ON THE BASIS
OF THE INVENTORY OF THE SHERIFF OF THE COURT A QUO BY WAY OF A
SUBSEQUENT MANDATORY INJUNCTION WHICH WAS DENIED. [1]

The Court finds no merit in the appeal.

To begin with, a brief discussion on the trust relation between two parties could be
helpful. A trust may either be express or implied. [2] Express trusts are those which are
created by the direct and positive acts of the parties, by some writing or deed, or will,
or by words evincing an intention to create a trust. [3] Implied trusts are those which,
without being express, are deducible from the nature of the transaction as matters of
intent or, independently of the particular intention of the parties, as being
superinduced on the transaction by operation of law basically by reason of equity.
[4]
These species of implied trust are ordinarily subdivided into resulting and
constructive trusts.[5] A resulting trust is one that arises by implication of law and
presumed always to have been contemplated by the parties, the intention as to which
can be found in the nature of their transaction although not expressed in a deed or
instrument of conveyance.[6] Resulting trusts are based on the equitable doctrine that
it is the more valuable consideration than the legal title that determines the equitable
interest in property.[7] Upon the other hand, a constructive trust is a trust not created
by any word or phrase, either expressly or impliedly, evincing a direct intention to

create a trust, but one that arises in order to satisfy the demands of justice. It does
not come about by agreement or intention but in main by operation of law [8] construed
against one who, by fraud, duress or abuse of confidence, obtains or holds the legal
right to property which he ought not, in equity and good conscience, to hold.[9]
One basic distinction between an implied trust and an express trust is that while the
former may be established by parol evidence, the latter cannot. Even then, in order to
establish an implied trust in real property by parol evidence, the proof should be as
fully convincing as if the acts giving rise to the trust obligation are proven by an
authentic document.[10] An implied trust, in fine, cannot be established upon vague
and inconclusive proof.[11] Unfortunately for petitioners, the issues they submit in the
case at bar boil down to the appreciation of the evidence presented. The Court of
Appeals, sustaining the court a quo, has found the evidence submitted by petitioners
to be utterly wanting,[12] consisting mainly of the self-serving testimony of Sally
Yap. She herself admitted that the business establishment of her husband Lorenzo
was razed by fire in 1964 that would somehow place to doubt the claim that he indeed
had the means to purchase the subject land about two years later from the Nery
spouses. Upon the other hand, Ramon Yap was by then an accountant with apparent
means to buy the property himself. At all events, findings of fact by the Court of
Appeals, particularly when consistent with those made by the trial court, should
deserve utmost regard when not devoid of evidentiary support. No cogent reason had
been shown by petitioners for the Court to now hold otherwise. Not to be dismissed,

furthermore, is the long standing and broad doctrine of clean hands that will not allow
the creation or the use of a juridical relation, a trust whether express or implied
included, to perpetrate fraud or tolerate bad faith nor to subvert, directly or indirectly,
the law. The trust agreement between Ramon and Lorenzo, if indeed extant, would
have been in contravention of, in fact, the fundamental law. Then Section 5, Article
XIII, of the 1935 Constitution has provided that Save in cases of hereditary
succession, no private agricultural land shall be transferred or assigned except to
individuals, corporations, or associations qualified to acquire or hold lands of the
public domain in the Philippines. The mandate has also been adopted in Section 14,
Article XIV, of the 1973 Constitution and now reiterated under Section 7, Article XII, of
the 1987 Constitution.A trust or a provision in the terms of a trust would be invalid if
the enforcement of the trust or provision is against the law even though its
performance does not involve the commission of a criminal or tortuous act. It likewise
must follow that what the parties are not allowed to do expressly is one that they also
may not do impliedly as, for instance, in the guise of a resulting trust.[13]
The foregoing disquisition renders unnecessary the resolution of the incidental issues
raised in the petition.
WHEREFORE, the instant petition is DENIED, and the decision of the respondent
Court of Appeals of 08 January 1998 in C.A.-G.R. CV No. 46838 is AFFIRMED. Costs
against petitioners.
SO ORDERED.