Ramos vs. Ramos

An action for reconveyance based on an implied trust is barred by prescription and laches where the trustee has performed unequivocal acts of repudiation made known to the beneficiary and the statutory period has lapsed, and a judicially approved partition in an intestate proceeding constitutes res judicata that bars collateral attack after the judgment has become final.

Martin Ramos and his wife Candida Tanate were spouses residing in Himamaylan, Negros Occidental, who were survived upon their deaths in 1888 and 1906, respectively, by three legitimate children—Jose, Agustin, and Granada—and seven natural children—Atanacia, Timoteo, Modesto, Manuel, Emiliano, Maria, and Federico. The estate consisted primarily of two haciendas, Hacienda Calaza (approximately 400 hectares) and Hacienda Ylaya (185 hectares), along with sixteen other parcels of land, cattle, and advances to the legitimate children. The partition of the estate was governed by Article 840 of the old Civil Code, which entitled each acknowledged natural child to one-half of the portion pertaining to each legitimate child not bettered, provided it could be included within the free third, and which allowed the legitimate children to satisfy the natural children's portions in cash.

Martin Ramos and Candida Tanate were spouses residing in Himamaylan, Negros Occidental. Candida died on October 26, 1888, and Martin died on October 4, 1906. They were survived by three legitimate children—Jose, Agustin, and Granada—and seven natural children—Atanacia, Timoteo, Modesto, Manuel, Emiliano, Maria, and Federico. All the children, legitimate and natural alike, lived together in the family house at Hacienda Ylaya during Martin's lifetime and continued to reside there for years after his death, under the care and support of their elder brothers.

On December 10, 1906, a special proceeding for the settlement of the intestate estate of the spouses was instituted in the Court of First Instance of Negros Occidental, docketed as Civil Case No. 217. Rafael O. Ramos, Martin's brother, was appointed administrator and administered the estate for more than six years. A project of partition dated April 25, 1913 was submitted and signed by the three legitimate children, two natural children (Atanacia and Timoteo), and Timoteo Zayco as guardian representing the five minor natural children. The conjugal estate was appraised at P74,984.93, consisting of eighteen parcels of land, cattle, and advances to the legitimate children. Under the partition, the legitimate children received the landed estate: Jose Ramos received Hacienda Calaza (328 hectares), a town lot, and other parcels valued at P25,291.66; Agustin Ramos received fourteen lots including Hacienda Ylaya (185 hectares) valued at P36,291.68; and Granada received riceland and cattle valued at P1,891.66. Each of the seven natural children was adjudicated personal properties valued at P1,785.35, consisting of cash and a fractional interest in cattle, drawn from the free third of Martin's half of the estate. The partition was made pursuant to Article 840 of the old Civil Code, which permitted the legitimate children to satisfy the natural children's portions in cash.

Judge Richard Campbell approved the project of partition by decision dated April 28, 1913, declaring the proceeding closed upon proof that each heir had received the portion adjudicated to him. On February 3, 1914, Judge V. Nepomuceno ordered the administrator to submit a report with supporting evidence showing delivery of the shares. A manifestation dated February 24, 1914, signed by Jose, Agustin, Granada, Atanacia, Timoteo, and guardian Timoteo Zayco, acknowledged receipt of their respective shares from the administrator, though no receipts were attached. Notably, the manifestation recited receipt from the administrator, whereas the project of partition stipulated that Jose and Agustin Ramos would pay the cash adjudications to the natural children.

The eight lots involved in this case—Lots Nos. 1370, 1371, 1372, 1375, 2158, 2159, 2161, and 2163 of the Himamaylan cadastre, forming part of Hacienda Calaza—were registered in 1923 in equal shares in the names of Gregoria Ramos (widow of Jose) and her daughter Granada Ramos, with Transfer Certificates of Title issued on December 1, 1933. In 1932, Gregoria and Candida Ramos leased the lots to Felix Yulo, who in 1934 transferred his lease rights to Juan S. Bonin and Nestor Olmedo (husband of plaintiff Atanacia Ramos), and Bonin and Olmedo in 1935 sold their lease rights to Jesus S. Consing.

According to the plaintiffs, they never received the cash adjudications from the guardian or the administrator. They testified that they continued to receive sums of money from Jose and Agustin Ramos as their shares in the produce of the haciendas, and that after Jose's death in 1930, his widow Gregoria continued these payments until 1951, when she stopped, citing the lessee's inability to pay. The plaintiffs claimed they were unaware of the intestate proceedings and the partition, did not know that Timoteo Zayco had been appointed their guardian, and only discovered in 1956 or 1957 that the properties had Torrens titles in the names of Gregoria and Candida Ramos. They filed the present action for reconveyance on September 5, 1957, predicated on the theory that their shares were held in trust by the defendants. Timoteo Ramos, one of the natural children who was joined as co-plaintiff, manifested that he had already received his share and moved to be stricken from the complaint. The trial court dismissed the complaint on the ground of res judicata, and both parties appealed.

• Res Judicata Should Not Apply: Petitioner maintained that the partition was grievously prejudicial to the natural children and that the doctrine of res judicata should not bar their action, arguing that the partition was lopsided, defective, and not properly implemented.
• Lack of Due Process in the Partition: Petitioner argued that Modesto and Manuel Ramos were already of age in 1913 and could not have been legally represented by Timoteo Zayco as guardian ad litem, and that Zayco did not competently protect the interests of the minors Maria and Emiliano Ramos, resulting in a denial of due process.
• Non-Receipt of Shares: Petitioner contended that they never received the cash adjudications of P1,785.35 each, that Atanacia Ramos signed the project of partition and the receipt without understanding the Spanish-language documents, and that no receipts were submitted to the court to prove payment.
• Existence of a Trust: Petitioner pressed the theory that their shares in the eight lots were held in trust by the defendants, particularly the heirs of Jose Ramos, and sought reconveyance of their corresponding participations under Article 840 of the old Civil Code.
• Status as Acknowledged Natural Children: Petitioner argued that the trial court's conclusion that they were legally acknowledged natural children of Martin Ramos was correct and conclusive against the defendants, who failed to impugn that conclusion in their appellants' brief.

• No Trust Existed: Respondent denied the existence of any trust, noting that no deed of trust was alleged or proven, and that the public documents in the expediente of Civil Case No. 217—the project of partition, the decision, and the manifestation of receipt—negated the existence of an express trust.
• Res Judicata: Respondent pleaded that the judgment in Civil Case No. 217, which settled the intestate estate and approved the partition, constituted res judicata barring any further litigation regarding the same estate.
• Prescription: Respondent invoked the defense of prescription, arguing that the action was filed long after the statutory period had lapsed under Act 190.
• Release of Claim: Respondent pointed to the project of partition, the judicial decision, and the manifestation of receipt of shares as evidence of release of any claim by the natural children.
• Counterclaim for Damages: Respondent argued that the plaintiffs' action was baseless and filed in gross and evident bad faith, causing mental anguish, wounded feelings, moral shock, and serious anxiety, and sought moral damages of P50,000, attorney's fees increased to P20,000, and exemplary damages.

• Acknowledgment of Natural Children: Whether the plaintiffs were legally acknowledged natural children of Martin Ramos entitled to successional rights.
• Res Judicata: Whether the judgment in the intestate proceeding, Civil Case No. 217, constitutes res judicata barring the present action for reconveyance.
• Prescription and Laches: Whether the action for reconveyance is barred by prescription and laches given the lapse of over forty years from the time the cause of action accrued.
• Existence of Trust: Whether an express or implied trust was constituted over the eight lots in favor of the plaintiffs.
• Damages and Attorney's Fees: Whether the defendants are entitled to moral damages, exemplary damages, and attorney's fees on their counterclaim.

• Acknowledgment of Natural Children: Yes. The trial court's conclusion was affirmed; the plaintiffs were in continuous possession of the status of natural children of Martin Ramos, as evidenced by direct acts of Martin and his family under Article 135 of the old Civil Code, and the defendants were estopped from attacking that status.
• Res Judicata: Yes. The judicial decree of distribution in Civil Case No. 217, once final, vested title in the distributees and constituted a judgment in rem barring collateral attack, absent lack of jurisdiction or fraud properly established.
• Prescription and Laches: Yes. The action was filed forty-three years after it accrued for Atanacia, Modesto, and Manuel, and forty years after for Maria and Emiliano, far exceeding the ten-year prescriptive period under Act 190; the delay was inexcusable and constituted laches.
• Existence of Trust: No. No express trust was proven by clear, satisfactory, and convincing evidence, and the public documents in the intestate proceeding negated its existence; any implied trust was barred by prescription and laches, the defendants having performed unequivocal acts of repudiation made known to the plaintiffs through cadastral proceedings and lease transactions.
• Damages and Attorney's Fees: No. The litigation did not fall within any of the enumerated cases for moral damages under Articles 2219 and 2220 of the Civil Code, and the plaintiffs acted in evident good faith, precluding an award of attorney's fees; the claim for exemplary damages, ventilated for the first time on appeal, was likewise denied.

• Acknowledgment of Natural Children: While the acknowledgment was not evidenced by a record of birth, will, or other public document as required by Article 131 of the old Civil Code, the record of Civil Case No. 217—relied upon by the defendants themselves to support their defense of res judicata—indubitably showed that the plaintiffs were treated as acknowledged natural children. The reasonable inference was that they were in continuous possession of the status of natural children, as evidenced by the direct acts of Martin Ramos and his family, under Article 135 of the old Civil Code. The fact that the plaintiffs received shares in the estate implied acknowledgment. The defendants, having accorded successional rights to the plaintiffs, were estopped from attacking their status under Articles 283(4) and 2266(3) of the New Civil Code.

• Res Judicata: A judgment in an intestate proceeding is a judgment in rem. The judicial decree of distribution, once final, vests title in the distributees. Judge Campbell's decision of April 28, 1913 approving the project of partition constituted such a decree. Even if the decree were erroneous or not in conformity with law, it should have been corrected by opportune appeal; once final, its binding effect is like that of any other judgment in rem, unless set aside for lack of jurisdiction or fraud. The fact that some distributees were minors at the time did not deprive the court of jurisdiction to enter the decree. The partition was given the stamp of judicial approval, and its regularity should be sustained in the absence of a legal ground for invalidity.

• Prescription and Laches: Under Act 190, whose statute of limitations applied, the longest period of extinctive prescription was ten years. Atanacia, Modesto, and Manuel were already of age in 1914 and could have brought the action from that year. Maria and Emiliano, born in 1896, reached majority in 1917. The action was filed only in 1957—forty-three years after it accrued for the first group and forty years for the second. The delay was inexcusable. The case was analogous to Go Chi Gun vs. Co, where a partition judicially approved in 1916 was sought to be annulled in 1948 and was barred by laches. The plaintiffs allowed more than forty years to elapse before complaining of the partition. The maxim Vigilantibus et non dormientibus jura subveniunt applied.

• Existence of Trust: No express trust was proven. An express trust concerning immovable property cannot be proven by oral evidence under Articles 1443 and 1457 of the Civil Code, and the public documents in the expediente of Civil Case No. 217—the project of partition, the decision, and the manifestation of receipt—negated the existence of an express trust. A trust must be proven by clear, satisfactory, and convincing evidence. As to implied trusts, whether resulting or constructive, enforcement may be barred by laches. The defendants had performed unequivocal acts of repudiation: the eight lots were claimed by Jose and Gregoria Ramos to the exclusion of the plaintiffs in cadastral proceedings, registered in their names, leased to third parties, and the lease rights transferred to others—including the husband of plaintiff Atanacia. These transactions proved repudiation of any supposed trust and were made known to the plaintiffs. The rule of imprescriptibility applies to express trusts because the trustee's possession is not adverse, but where the trustee repudiates the trust through unequivocal acts of ouster made known to the beneficiary, prescription may supervene. For constructive trusts, the prescriptibility of an action for reconveyance is settled.

• Damages and Attorney's Fees: The litigation did not fall within any of the cases enumerated in Articles 2219 and 2220 of the Civil Code where moral damages may be recovered, nor was it analogous to any of them. The adverse result of an action does not per se make the act wrongful. The plaintiffs honestly believed they had a good cause of action and acted in evident good faith, particularly given that some were minors when the partition was made, they received no land, and there was a marked contrast between their indigence and the affluence of the heirs of Jose Ramos. It is not sound public policy to set a premium on the right to litigate. Since no compensatory or moral damages were awarded, the claim for exemplary damages—ventilated for the first time in the appellants' brief—could not be granted under Article 2229 of the Civil Code.

• Imprescriptibility of Express Trusts — A trustee cannot acquire by prescription the ownership of property entrusted to him, because the trustee's possession is not adverse. The action to compel a trustee to convey property registered in his name in trust does not prescribe, as long as the trust is continuing and subsisting. However, acquisitive prescription may bar the action where (a) the trustee has performed unequivocal acts of repudiation amounting to an ouster of the cestui que trust, (b) such positive acts of repudiation have been made known to the cestui que trust, and (c) the evidence thereon is clear and conclusive. In this case, the defendants' acts of registering the lots in their names, claiming them exclusively in cadastral proceedings, and leasing them to third parties constituted unequivocal repudiation made known to the plaintiffs.

• Prescriptibility of Constructive Trusts — The prescriptibility of an action for reconveyance based on constructive trust is settled. Prescription may supervene in an implied trust, whether resulting or constructive, and its enforcement may be barred by laches. The Court applied this doctrine to hold that even if a constructive trust existed, the action was barred by the lapse of over forty years.

• Res Judicata in Intestate Proceedings — A judgment in an intestate proceeding is a judgment in rem. The judicial decree of distribution, once final, vests title in the distributees. If the decree was erroneous, it should have been corrected by opportune appeal; once final, its binding effect is like any other judgment in rem, unless set aside for lack of jurisdiction or fraud. The fact that a distributee was a minor at the time does not deprive the court of jurisdiction to enter the decree.

• Laches — Laches is the failure or neglect, for an unreasonable and unexplained length of time, to do that which, by exercising due diligence, could or should have been done earlier. The maxim Vigilantibus et non dormientibus jura subveniunt—the law aids the vigilant, not those who sleep on their rights—was applied to bar the plaintiffs' action after more than forty years of inaction.

• Estoppel to Deny Status of Acknowledged Natural Children — Where the legitimate children have accorded successional rights to natural children based on the decedent's treatment of them as his children, the legitimate children are estopped from attacking the natural children's status as acknowledged. The Court relied on Articles 283(4) and 2266(3) of the New Civil Code.

• Good Faith as Bar to Attorney's Fees and Damages — An adverse decision does not ipso facto justify an award of attorney's fees to the winning party. Where the plaintiff acted in evident good faith and had reasonable grounds to feel aggrieved, attorney's fees and moral damages should not be granted, as it is not sound public policy to penalize the right to litigate.

• "The plaintiffs have only themselves to blame if the courts at this late hour can no longer afford them relief against the inequities allegedly vitiating the partition of their father's estate." — This passage encapsulates the Court's application of laches and prescription, emphasizing that the plaintiffs' prolonged inaction precluded judicial relief regardless of the merits of their grievance.

• "Vigilantibus et non dormientibus jura subveniunt." — The Court invoked this Latin maxim to underscore the principle that the law aids the vigilant, not those who sleep on their rights, applying it to the plaintiffs' forty-year delay in bringing their action.

• "The adverse result of an action does not per se make the act wrongful and subject the actor to the payment of moral damages. The law could not have meant to impose a penalty on the right to litigate, such right is so precious that moral damages may not be charged on those who may exercise it erroneously." — This quotation, drawn from Barretto vs. Arevalo and adopted by the Court, articulates the doctrine that losing a case in good faith does not warrant moral damages, protecting the precious right to litigate.

• "In any case, the partition was given the stamp of judicial approval, and as a matter of principle and policy we should sustain its regularity, in the absence of such cause or reason that the law itself fixes as a ground for invalidity." — Quoted from Go Chi Gun vs. Co, this passage states the principle that a judicially approved partition enjoys a presumption of regularity that cannot be collaterally attacked after the judgment becomes final.

• Go Chi Gun vs. Co, 96 Phil. 622 — Followed. A partition judicially approved in 1916 and sought to be annulled in 1948 was barred by laches; the Court applied the same reasoning to the forty-year delay in this case.
• Severino vs. Severino, 44 Phil. 343 — Distinguished. Cited by the plaintiffs as a leading case on reconveyance of property held in trust, but distinguished because it did not involve prescription or laches—the action was seasonably brought, the alleged trustee was an overseer whose possession was not adverse, and he had admitted being merely an administrator.
• Cuaycong vs. Cuaycong, L-21616, December 11, 1967, 21 SCRA 1192 — Followed. An action for reconveyance of property held in trust that accrued in 1936 and was filed only in 1961 was barred; the Court found this case more in point than Severino.
• Reyes vs. Barretto-Datu, L-17818, January 25, 1967, 19 SCRA 85 — Followed. The judicial decree of distribution, once final, vests title in the distributees; a final decree of distribution is binding like any other judgment in rem unless set aside for lack of jurisdiction or fraud.
• Barretto vs. Arevalo, 99 Phil. 771 — Followed. The adverse result of an action does not per se make the act wrongful; moral damages may not be charged on those who exercise the right to litigate erroneously.
• Laguna vs. Levantino, 71 Phil. 566 — Followed. Acquisitive prescription may bar an action against a trustee in an express trust where the trustee has performed unequivocal acts of repudiation amounting to an ouster, made known to the beneficiary, with clear and conclusive evidence.
• Alzona vs. Capunitan, L-10228, February 28, 1962, 4 SCRA 450 — Followed. The prescriptibility of an action for reconveyance based on constructive trust is settled.

• Article 840, Old Civil Code — Governs the successional rights of natural children when the testator leaves legitimate children: each natural child is entitled to one-half of the portion pertaining to each legitimate child not bettered, provided it can be included within the free third; the legitimate children may satisfy the natural children's portions in cash or other property at fair valuation. Applied in the project of partition to justify the cash adjudications to the natural children.
• Article 131, Old Civil Code — Provides that acknowledgment of natural children must be evidenced by a record of birth, will, or other public document. The Court noted that while the plaintiffs' acknowledgment was not so evidenced, their continuous possession of the status of natural children under Article 135 supplied the legal basis.
• Article 135, Old Civil Code — Presumes acknowledgment where the natural child is in continuous possession of the status of a natural child, evidenced by direct acts of the father and his family. The Court inferred acknowledgment from the record of Civil Case No. 217 and the family's treatment of the plaintiffs.
• Articles 283(4) and 2266(3), New Civil Code — Basis for the doctrine of estoppel preventing the defendants from attacking the plaintiffs' status as acknowledged natural children after having accorded them successional rights.
• Articles 1440, 1443, 1444, 1456, 1457, Civil Code — Define trusts, distinguish express from implied trusts, and provide the evidentiary rules: express trusts concerning immovables cannot be proven by oral evidence, while implied trusts may be. Article 1456 imposes a constructive trust on one who obtains property by fraud. Applied to analyze whether any trust existed and whether it was proven.
• Section 38, Act 190 — Provides that the law of prescription does not apply in the case of a continuing and subsisting trust. The Court held this rule applies to express trusts but not where the trustee has repudiated the trust.
• Article 116, Civil Code — Makes Act 190's statute of limitations applicable to this case, the longest prescriptive period being ten years.
• Articles 2219, 2220, 2208, 2229, Civil Code — Govern the award of moral damages, attorney's fees, and exemplary damages. The Court held that the litigation fell within none of the enumerated cases for moral damages, that attorney's fees were not warranted given the plaintiffs' good faith, and that exemplary damages could not be awarded absent compensatory or moral damages.

Makalintal, C.J., Barredo, Antonio, and Fernandez, JJ., concurred. Fernando, J., took no part.