BERNARDO DE LOS SANTOS, PETITIONER, VS. FAUSTINO B. REYES, THE HON. COURT OF APPEALS AND SPOUSES BENJAMIN DIESTRO AND AIDA LAGAREJOS, RESPONDENTS.

De los Santos versus Reyes

The Case

This is a petition for review on certiorari brought by Bernardo de los Santos against Faustino B. Reyes, the Court of Appeals, and the spouses Benjamin Diestro and Aida Lagarejos. The petitioner lost a complaint for reconveyance of a parcel of land in Angono, Rizal, before the trial court and again before the Court of Appeals, and now asks the Supreme Court to reverse both. The case matters for two reasons: it is a clean illustration of the finality and conclusiveness of the factual findings of the Court of Appeals in a petition for review under Rule 45, and it is a textbook application of the implied trust provision of the Civil Code and of the disputable presumption of a gift in favor of a child.

Procedural History

The petitioner filed a complaint for reconveyance of a parcel of land before the then Court of First Instance of Rizal. In a decision dated 12 February 1968, the trial court dismissed the complaint, declared the private respondent Faustino B. Reyes the owner of the land, and ordered the petitioner to pay 1,500 pesos as moral damages and attorney's fees, plus the costs of suit.

The petitioner appealed to the Court of Appeals, assigning grave abuse of discretion and several errors in the appreciation of evidence. In a decision promulgated on 23 July 1975, the Court of Appeals affirmed the trial court in full. Undeterred, the petitioner filed the present petition for review on certiorari under Rule 45 on 27 December 1976. The private respondents filed their comment, the petitioner filed his reply, and the Supreme Court gave due course to the petition. The parties then filed their briefs, and the case was submitted for decision.

Facts

Faustino B. Reyes purchased three lots from the hacienda owner, Justa G. Vda de Guido, for a total consideration of 14,000 pesos. He paid 11,000 pesos at the time of the sale and the remaining 3,000 pesos later. Because the vendor imposed a limit that no one person could buy more than two lots at a time, the deed of sale and the certificate of title were placed in the name of Reyes's daughter, Virginia T. Reyes, who was then only eighteen years old and could not have paid the price herself. A notarized agreement dated 15 June 1955 documented these facts. After the sale, Reyes remained in possession of the land and received its fruits, even after Virginia married the petitioner.

Virginia died of coronary embolism on the same date she gave birth to a baby girl. The petitioner claimed that the child was born alive and survived the mother, so that the child inherited the land from Virginia and the petitioner, in turn, inherited it from the child. Reyes, on the other hand, testified that the baby was born dead, its head having been crushed when extracted with forceps. The petitioner never took the witness stand to deny this testimony, and none of his documentary evidence spoke to whether the child was born alive or dead.

Reyes executed an extrajudicial adjudication affidavit to transfer the land from Virginia's name to his own, which the petitioner characterized as an admission that Virginia owned the land. Almost seven years after Virginia's death, the petitioner filed the action for reconveyance, relying on the deed of sale, the certificate of title, the tax declaration in Virginia's name, and the extrajudicial settlement affidavit.

Issues

• Whether or not the Court of Appeals erred in disregarding the probative value of the petitioner's public documentary evidence in favor of the oral testimony of Faustino B. Reyes.
• Whether or not the Court of Appeals erred in declaring Faustino B. Reyes the owner of the land despite the certificate of title and tax declaration being in the name of Virginia T. Reyes.
• Whether or not the Court of Appeals erred in admitting oral testimony to establish a trust over the land, in alleged violation of the Civil Code provisions on express trusts.
• Whether or not the Court of Appeals erred in holding that Virginia and her child died at the same time, and in applying Article 43 of the Civil Code.

Applicable Provisions

Article 43 of the Civil Code provides:

Article 43. If there is a doubt, as between two or more persons who are called to succeed each other, as to which of them died first, whoever alleges the death of one prior to the other, shall prove the same; in the absence of proof, it is presumed that they died at the same time and there shall be no transmission of rights from one to the other.

This provision governs the petitioner's claim that he inherited the land through the child, because he had the burden of proving that the child survived the mother.

Article 1448 of the Civil Code provides:

There is an implied trust when property is sold, and the legal estate is granted to one party but the price is paid by another for the purpose of having the beneficial interest of the property. The former is the trustee, while the latter is the beneficiary. However, if the person to whom the title is conveyed is a child, legitimate or illegitimate, of the one paying the price of the sale, no trust is implied by law, it being disputably presumed that there is a gift in favor of the child.

This provision is the heart of the case, because the land was placed in the name of Reyes's daughter while Reyes paid the price, raising the disputable presumption of a gift that the petitioner had to overcome.

Ruling

On the first issue, the Court held that the assigned errors, except the third, involve questions of fact. The jurisdiction of the Supreme Court in cases brought from the Court of Appeals is limited to reviewing errors of law, and the findings of fact of the Court of Appeals are conclusive. The Court enumerated the exceptional circumstances in which it may review findings of fact, and found that none obtained in this petition.

On the second issue, the Court sustained the finding that Reyes actually owned the land notwithstanding the title in Virginia's name. The notarized agreement explained why the deed of sale and the certificate of title named Virginia, who at eighteen could not have paid the price. The extrajudicial adjudication affidavit could not be read as an admission of ownership, since it was merely the practical way to transfer the land back to Reyes.

On the third issue, the Court held that there was neither an express nor an implied trust. The petitioner wrongly assumed an express trust, which under Article 1444 cannot be proved by parol evidence. The correct provision is Article 1448, and under it the presumption of a gift in favor of the child is disputable. Testimonial evidence that the land was not given as a gift to Virginia was therefore properly allowed to rebut that presumption.

On the fourth issue, the Court held that the petitioner failed to prove that the child was born alive and survived the mother, as Article 43 requires of the party alleging the prior death. He never contradicted the positive testimony of Reyes that the child was born dead, and the alleged admission in the answer of the Diestro spouses, who were strangers to the family, could not bind Reyes.

Doctrine

First, in a petition for review under Rule 45, only questions of law may be raised, and the findings of fact of the Court of Appeals are conclusive upon the Supreme Court, save only in the exceptional circumstances enumerated in the decision.

Second, under Article 1448 of the Civil Code, when property is sold and the legal estate is granted to one party while the price is paid by another, an implied trust arises; but if the person to whom the title is conveyed is a child of the one paying the price, no trust is implied, and it is disputably presumed that there is a gift in favor of the child. Being a disputable presumption, it may be rebutted by testimonial evidence.

Third, under Article 43 of the Civil Code, the party who alleges that one person died before another must prove it; in the absence of proof, they are presumed to have died at the same time, and there is no transmission of rights from one to the other.

Disposition

The Supreme Court dismissed the petition for lack of merit, with costs against the petitioner, thereby affirming the rulings of the Court of Appeals and the trial court in favor of Faustino B. Reyes.

Remember This

Memorize this line: when a parent pays the price but the title is placed in the name of the child, no trust is implied by law, it being disputably presumed that there is a gift in favor of the child. Examiners use this case to test the rebuttable presumption of a gift under Article 1448 and the rule that factual findings of the Court of Appeals bind the Supreme Court under Rule 45.