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HERMINIA L. RAMOS v. CA

FACTS:

The spouses Hilario and Lydia Celestino filed an action for reconveyance against Herminia Ramos and the heirs of Herminio Ramos, claiming ownership of Lot No. 25, Block 86 located in Quezon City. The trial court dismissed the case but declared the plaintiffs as the lawful owners of the property. The court ordered the defendants to execute a deed of absolute sale, remove any improvements on the lot, vacate the lot, and pay attorney's fees and costs of suit.

According to the trial court's findings, Lydia Celestino acquired the rights to buy the property from Herminio Ramos. She assumed the obligation of paying the purchase price and made monthly amortizations until full payment was made. The transfer certificate of title was issued in Herminio Ramos' name, but he and his spouse knew of and consented to the delivery of the owner's duplicate copy of the title to Lydia Celestino. They also executed a special power of attorney in favor of Lydia. The RTC later ordered the cancellation of the transfer certificate of title upon request of Herminia Ramos.

The other version of the facts involves a dispute over the owner's duplicate copy of Transfer Certificate of Title (TCT). Lydia, the petitioner, claimed that the new owner's duplicate copy was obtained through fraud and misrepresentation. She argued that the original duplicate copy was in her possession and that Herminia, the respondent, was aware of it. Lydia and her spouse also sought the enforcement of an implied or resulting trust over the property against the defendants. The trial court ruled in favor of Lydia, ordering the execution of the conveyance deed and awarding attorney's fees.

In a separate version of the facts, the plaintiffs, Herminio and Evangeline Ramos, alleged that the lot was originally owned by Lydia Celestino and that Herminio held it in trust for her. The defendants opposed the claim, arguing that they purchased the lot from Herminio Ramos. The trial court ruled in favor of the plaintiffs, declaring them as the lawful owners of the lot and ordering the defendants to execute a deed of absolute sale.

ISSUES:

  1. Whether the special power of attorney is authentic and binding.

  2. Whether an implied or resulting trust was created when the property was sold to Herminio Ramos with the beneficial title vesting in Lydia Celestino.

  3. Whether the action for reconveyance has prescribed or been barred by laches.

  4. Whether the plaintiffs are the lawful owners of the lot and the defendants are obligated to execute a deed of absolute sale in favor of the former.

  5. Whether attorney's fees are due to the plaintiffs.

  6. Whether there was an implied trust in the transaction involving the lot in question.

  7. Whether Lydia Celestino has a valid claim of ownership over the lot described in TCT No. 204173.

  8. Whether Lydia Celestino's claim is based on a resulting trust.

  9. Whether the enforcement of the trust would be against public policy.

RULING:

  1. The Court of Appeals held that the special power of attorney is authentic and binding, as the petitioners failed to overcome the presumption of its authenticity and genuineness.

  2. The Court of Appeals affirmed the trial court's ruling that an implied or resulting trust was created, wherein the legal title of the lot was given to Herminio Ramos and Herminia Ramos, while the beneficial ownership remained with Lydia Celestino.

  3. The Court of Appeals ruled that the action for reconveyance has not prescribed, as the trust was considered a continuing and subsisting one, which the special power of attorney recognized. The rule of prescription of implied or resulting trust does not apply when a fiduciary relation exists and the trustee recognizes the trust.

  4. The Court of Appeals upheld the trial court's decision, stating that the plaintiffs are the lawful owners of the lot and the defendants are obligated to execute a deed of absolute sale in favor of the former, remove their improvements on the lot, and vacate the premises.

  5. The issue of attorney's fees was not discussed in the provided text.

  6. The Court of Appeals erred in holding that there was an implied trust in this case. The petitioners argue that no trust was established because there was a restriction expressly imposed by the PHHC in the sale of the land to the petitioner, and the sale was null and void for being contrary to public policy.

  7. The Court held that Lydia Celestino does not have a valid claim of ownership over the lot described in TCT No. 204173. Her claim is based on a resulting trust, which is an "intent-enforcing" trust. However, the Court found that her actions were indicative of bad faith and an attempt to acquire the lot indirectly, disregarding her disqualification to own the lot directly. As a result, the Court refused to enforce the resulting trust and denied her claim of ownership.

PRINCIPLES:

  • The special power of attorney is presumed authentic and binding, unless proven otherwise.

  • An implied or resulting trust may be created when legal title is given to one party, while the beneficial ownership remains with another.

  • The rule of prescription of implied or resulting trust does not apply when a fiduciary relation exists and the trustee recognizes the trust.

  • The rightful owners are entitled to reconveyance of the property and the removal of improvements made by the defendants.

  • The approval of the PHHC is necessary for a transfer of the right to buy a PHHC lot to be valid and effective.

  • The transfer of a PHHC lot to a party disqualified to acquire a PHHC lot is invalid and against public policy.

  • The PHHC's policy prohibits the sale of more than one lot per person.

  • The purpose of the PHHC is to provide decent housing for those who are unable to provide themselves with such housing.

  • A resulting trust is based on the intention of the parties, even if not expressly stated, and is enforceable if it does not contravene public policy.

  • The court will not enforce a resulting trust if its purpose is to evade laws or regulations.

  • A resulting trust will not be enforced if it arises from an illegal transaction or if its enforcement would be against public policy.

  • Trusts, including resulting trusts, are subject to the limitations of law, morals, good customs, public order, and public policy.

  • The "clean hands" doctrine is applied to refuse aid to claims arising from illegal transactions or improper purposes.