TEODORA MATIAS DE BUENCAMINO, ET AL., PETITIONERS, VS. MARIA DIZON DE MATIAS, ET AL., RESPONDENTS.

This is an appeal from the decision of the Court of Appeals (in CA-G.R.
No. 24629-R) affirming with modification the judgment of the Court of
First Instance of Pampanga (in Civil Case No. 752), declaring the three
parcels of land originally registered in the name of Hilaria Dizon
Matias (presently registered in the names of the spouses Teodora Matias
and Roque Buencamino) as held in trust by Teodora for the benefit of
her legitimate brothers and sisters, and ordering the mortgage
constituted thereon (in favor of Felipe Buencamino, Jr.) cancelled,
upon payment of the mortgage indebtedness of P5,000.00, and the
issuance of another title in the names of Modesta, Teodora, Segundo,
Jacinto, Vicente, Jesus, and Mamerto Matias.

The facts of the case are briefly stated in the decision of the Court of Appeals, to wit:

“The deceased Hilaria Dizon Matias, married to Fulgencio Matias (also
deceased), was the registered owner of three parcels of farm lands with
a total area of more than 30 hectares, situated in the barrio of San
Pablo, Sta. Ana, Pampanga, and covered by Original Certificate of Title
No. 2235 of the Register of Deeds of aaid province. The aforenamed
spouses who died in 1945 and 1949, respectively, had only one son,
Luis, who died in 1948. Luis had with his lawful wife Maria Dizon
Matias, several children, seven of whom are living, namely: 1. Modesta,
2. Segundo, 3. Jacinto, 4. Vicente, 5. Jesus, 6. Teodora, and 7.
Mamerto, all surnamed Matias. The first five,together with their
mother, are the plaintiffs, and the last two with their respective
spouses, and two others, are the defendants.

“Luis also
kept a mistress with whom he had five children. He maintained the
latter family in a house he constructed for them in the same compound
where his parents were living, and found it more convenient and
comfortable to spend most of his time with his common-law wife and his
illegitimate children. And although Luis attended to the immediate
needs of his legitimate children, who were then residing with their
grandparents (deceased spouses), Luis did not lavish upon them as much
care and attention as he did the other family. This peculiar behavior
and conduct on the part of Luis, led his parents to fear that should
their properties pass on to him upon their death, Luis might dispose of
the same in favor of his illegitimate children, to the prejudice of his
legitimate children. And because of this, the deceased spouses decided
to transfer their properties in the name of one of their legitimate
grandchildren, for the latter to hold the same in trust for the other
brothers and sisters. After a family council held in 1938, the
grandchild Teoflora was chosen as the transferee because the deceased
spouses felt that Teodora, being married to a rich man, Roque
Buencamino, would not find any interest in retaining the properties for
herself, and that she would solemnly keep her promise to give to each
and every one of her brothers and sisters their corresponding shares in
the properties in question at the proper time. This transfer was kept a
secret from the son Luis.

“However, as these oft-repeated
three parcels of land were previously mortgaged fcn Serafin and
Encarnacion Lazatin to secure an obligation of P4,500.00, the same had
first to be cleared. But as neither the deceased spouses nor Teodora
had the available cash with which to settle the amount owing to the
Lazatins, what Teodora did was to approach her father-in-law, Felipe
Buencamino, Jr., who agreed to loan her P5,000.00, provided she secure
the same with a mortgage ovar the properties in question. The necessary
papers were then prepared. First, the morfgage to the Lazatins was
released upon tne payment of the P4,500.00, plus interests. An.
Escritura de Venta con Arrendaraxento was then executed by tlie
deceased spouses in favor of Teodora and Roque Buencamino on March 4,
1938. On the same date also, a mortgage in favor of Felipe Buencamino,
Jr., for the sum of P5,000.00 was executed by the new transferees
Teodora and Roque Buencamino.

“In the Escritura de Venta mentioned above, it was stated that the
deceased spouses would remain as lessees of the properties in question.
In return they would pay an annual rent of P300.00, plus the obligation
of paying the corresponding real estate taxes. Thus, it was the
deceased spouses who retained possession of the farm lands until 1949
when Fulgencio Matias died. While the taxes thereon were religiously
paid by them, there is no evidence to show that they ever paid the
annual rent of P300.00 to either Teodora or her husband Roque. Upon the
death of Fulgencio in 1949, Maria D. Matias, the widow of Luis,, took
over the possession and administration of the farm lands. However, in
May 1954, Teodora took material possession of the same from her mother
and has, since then, administered them to the exclusion of her other
brothers and sisters.”

On the basis of
these facts, the Court of Appeals affirmed the judgment of the Court of
First Instance, holding that the Escritura de Venta executed by the
deceased Hilaria Dizon in favor of defendants Buencaminos was only an
equitable mortgage, but modified it in this wise:

“In its decision, the trial court declared the Escritura de Venta con
Arrendamiento to be an equitable mortgage in favor of the plaintiffs.
And while it is true that plaintiffs-appellees did not question such
pronouncement, for the obvious reason that the appealed judgment was
favorable to them, nevertheless, this Court in its jurisdiction to
affirm, modify, or reverse a judgment brought before it for review, can
make further pronouncement in favor of an appellee who is not required
to make assignments of error on appeal. * * *

“Conformably with, our foregoing conclusions, we hereby declare that
the three parcels of land originally registered in the name of Hilaria
Dizon Matias, and presently in the name of Teodora and Roque Buencamino
are held by the latter in trust for the benefit of Teodora’s legitimate
brothers and sisters. Upon payment, therefore, of the mortgage debt of
P5,000.00, with 6% interest thereon from March 4, 1938, until the date
of actual payment, which date shall not be later than 30 days from the
date of the finality of this decision, to the estate of the late Felipe
Buencamino, Jr., the mortgage shall be cancelled, and, immediately
thereafter, Transfer Certificate of Title No. 11036 in the name of
Teodora and Roque Buencamino shall be surrendered to the Register of
Deeds of Pampanga, who shall issue another titles in the names of:

1. Modesta Matias, Filipino, of legal age, widow.
2. Teodora Matias, married to Roque Buencamino, both Filipinos and of legal age.
3. Segundo Matias, married to Lucina Taay, both Filipinos and of legal age.
4. Jacinto Matias, married to Anselma de Matias, both Filipinos and of legal age.
5. Vicente Matias, married to Anselma de Matias, both Filipinos and of legal age.
6. Jesus Matias, Filipino, single, and of legal age.
7. Mamerto Matias, married to Belen Tan Garcia, both Filipinos, and of legal age.

*     *     *     *     *     *     *

In
this proceeding instituted by the spouses Teodora and Roque Buencamino
for the review of the foregoing decision of the Court of Appeals, it is
claimed, among others, that the said court erred: (1) in deciding the
case on a certain ground in favor of appellees, other than the error
assigned in the brief for appellants; (2) in not finding the action
barred by extinc-tive prescription; (3) in concluding that the
“Escritura de Venta” (Exh. A) and the deed of mortgage (Exh. C-2)
resulted to an implied trust; and (4) in finding that the deed of
donation (Exh. B) vested on Teodora Matias de Buencamino only the
beneficial use of the residential lot owned by Fulgencio Matias.

It is true that the court a quo
rendered its judgment in favor of the plaintiffs, on the ground that
the purported deed of sale was in reality an equitable mortgage, which
ruling was not assailed by said plaintiffs in the appellate court.
This, however, does not preclude the latter court, before which the
whole appealed decision has been opened and presented for its review,
to pass upon and decide the litigated issues on different grounds.
Thus, as this Court had said:

“It is not incumbent on an appellee, who occupies a purely defensive
position and is seeking no affirmative relief, to make assignments of
error. Only an appellant is required to make such assignments.
Therefore, when the case occurs, as not infrequently happens, that a
trial judge decides a case in favor of one of the parties on a certain
ground, it is entirely proper for this Court, upon affirming the
judgment, to base its decision upon some other point which may have
been ignored by the trial court, or in respect to which that court may
have been entirely in error.” (Garcia Valdez vs. Soteraña Tuazon, 40 Phil. 943.)

The contention that the action for reconveyance, which was brought 17
years after the execution of the disputed document, was barred by
prescription, cannot also be sustained. The Court of Appeals, based on
the evidence presented in the case, made the factual finding, by which
we are bound, as follows:

“The evidence
is, likewise, clear that the true intent and understanding of the
deceased spouses with Teodora and Roque Buencamino was that the latter
would hold the title over the farm lands in trust for the benefit of
Teodora1s brothers and sisters. Teodora herself confirmed this when, in
a letter she wrote her grandfather in 1939, she reaffirmed her
intention to comply with the trust and confidence reposed upon her by
her grandparents. Again, when her mother asked Teofiora to comply with
her promise to convey the corresponding shares of her other brothers
and sisters, she replied that the only obstacle to this conveyance was
the payment of the mortgage account to her father-in-law, Felipe
Buencamino, Jr.”

In short, the execution of
the deed, Exhibit A, and the consequent registration of the properties
in the names of petitioner spouses, created an implied trust in favor
of Teodora’s legitimate brothers and sisters. And while implied or
constructive trust prescribes in 10 years,^[1] the rule does not apply
where a fiduciary relation exists and the trustee recognizes
the trust.^[2] Continuous recognition of a resulting trust precludes any defense of laches in a suit to declare and enforce
the trust.^[3]
As it does not appear when Teodora repudiated the existence of
fiduciary relations between her and brothers and sisters, the same
shall be taken to have been made only upon the filing of her answer to
the complaint. The action brought by the plaintiffs to enforce such
trust, therefore, has not yet prescribed.

On the matter of the fourth parcel of land, belonging to Fulgencio
Matias, which petitioners claim to have been donated to Teodora, we
have the finding of the Court of Appeals, supported by the document
executed by the said deceased owner on January 15, 1940, that only the
beneficial use thereof has been given to her, for the duration of her
natural life. Accordingly, the decision of the lower court to partition
the naked ownership thereof among the heirs, is proper.

Wherefore, finding no error in the decision of the Court of Appeals, the same is hereby affirmed, with costs against the petitioners. So ordered.

Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Dizon, Regala, Makalintal, Bengzon, J.P., Zaldivar, and Sanchez, JJ., concur.

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^[1] Diaz vs. Gorricho, 103 Phil. 261.

^[2] See J. M. Tuazon & Co. vs. Magdañgal, 114 Phil. 42.

^[3] Candelaria vs. Romero, 109 Phil. 500.