View full case

RODOLFO MORALES v. CA

FACTS:

The petitioners in this case filed a petition for review on certiorari, seeking the reversal of the decision of the Court of Appeals which affirmed the decision of the Regional Trial Court of Calbayog City in a civil case. The civil case involved an action for recovery of possession of land and damages, as well as a prayer for a writ of preliminary mandatory injunction, filed by the private respondents, spouses Ranulfo Ortiz, Jr. and Erlinda Ortiz, against Rodolfo Morales.

One of the daughters of the late Rosendo Avelino and Juana Ricaforte, Priscila Morales, filed a motion to intervene in the case, which was granted. After the death of Rodolfo Morales, his heirs were allowed to substitute him in the case. The trial on the merits concluded and the trial court rendered its decision in favor of the private respondents, declaring them as the rightful owners of the disputed property and ordering the defendants-intervenors to vacate the premises, remove the beauty shop constructed thereat, pay monthly rental to the private respondents, and pay damages, expenses, and attorney's fees. The trial court's decision was affirmed by the Court of Appeals.

The disputed premises in this case is a parcel of land with a two-storey residential building located in Calbayog City. The male plaintiff used to play in the premises when he was still young, while the female plaintiff resided there with the late Judge Avelino. The defendant and intervenor did not reside in the premises in question, as they have their own residential houses in different Barangays in Calbayog City.

The plaintiffs are claiming damages as a result of the filing of this case, including mental anguish, monthly rental of the premises, litigation expenses, and attorney's fees.

The trial court's summary of the evidence for the defendants and intervenor shows that the premises were originally owned by the spouses Rosendo Avelino and Juana Ricaforte, who bought it from the Mendiolas in 1948. After the purchase, the couple occupied it as owners until their deaths. Upon their demise, their children succeeded as owners. Celso Avelino, who did not reside in the premises, acquired it and told his siblings about it. In 1950, Rosendo secured a license and constructed the two-storey house. In 1979, the defendant constructed a beauty shop beside the two-storey house with the consent of Celso and his sisters.

Despite the fact that the premises were surveyed in Celso's name, no attempt was made to change the title to Rosendo's name. Celso kept the receipts for realty tax payments of the premises. The intervenor claims that the sale of the premises to the plaintiffs is fraudulent because it included her share and her son's beauty shop.

During an ocular inspection conducted by the court, it was found that the two-storey residential building urgently needed major repairs and was not inhabited by a genuine owner for a long time.

The pertinent facts of this case are as follows: The disputed premises were acquired by Celso Avelino and declared in his name for taxation purposes. The receipts of the realty taxes were kept by Celso. Subsequently, the tax declaration for the disputed premises was transferred to the female plaintiff's name and the realty taxes were being paid by her. The plaintiffs presented documentary evidence such as the Deed of Conveyance, tax declarations, and survey plan to support their claim of ownership. On the other hand, the intervenor's claim of ownership was based only on testimonial evidence. The intervenor's testimony was deemed inconsistent and unconvincing.

Before the plaintiffs paid the purchase price of the property in question, they had a conversation with the defendant, who encouraged them to buy the property and assured them that he would vacate the premises once payment was made. The plaintiffs then paid the purchase price, and a document was executed in their favor by the owner. However, the defendant reneged on his words and refused to vacate the property unless he was paid an unreasonable amount of P35,000 for his beauty shop located on the premises.

Later on, when the plaintiffs were about to undertake urgent repairs on the residential building to make it their residence, they discovered that the defendant had already occupied the building and admitted lodgers to it. The defendant claimed ownership of the property, causing damage, prejudice, and mental anguish to the plaintiffs. Thus, the plaintiffs, as the true and lawful owners of the property, filed the present case, incurring expenses for legal representation. Dissatisfied with the trial court's decision, the defendants and intervenor appealed to the Court of Appeals, assigning several errors.

ISSUES:

  1. Did Celso Avelino purchase the land in question as a trustee for his parents and siblings, or was the property an implied trust?

  2. Was Rodolfo Morales a builder in good faith?

  3. Was there a basis for the award of moral damages, attorney’s fees, and litigation expenses to the private respondents?

RULING:

  1. Implied Trust

    • Ruling The Court did not find an implied trust in favor of petitioners. The title to the property was conveyed to Celso Avelino, and under Article 1448 of the Civil Code, it is disputably presumed that there is a gift in favor of the child when the purchase money is paid by the parent(s). This presumption was not rebutted by evidence from petitioners.

  2. Builder in Good Faith

    • Ruling Rodolfo Morales was not considered a builder in good faith. He knew from the beginning that he was not the owner of the land. Additionally, there was no reliable evidence to prove that Celso Avelino gave his consent for the construction of the beauty shop. The testimony claiming the consent was self-serving, particularly as it was given after Celso’s death and thus could not be rebutted.

  3. Awards of Moral Damages, Attorney’s Fees, and Litigation Expenses

    • Ruling The Court struck down the awards for moral damages, attorney’s fees, and litigation expenses. The private respondents failed to convincingly show that they suffered mental anguish due to specific acts of the petitioners falling under Articles 2219 and 2220 of the Civil Code. The award of attorney’s fees and litigation expenses lacked factual, legal, and equitable justification.

PRINCIPLES:

  1. Implied Trust

    • Article 1448 of the Civil Code An implied trust is created when property is sold, and the legal estate is granted to one party but the price is paid by another. However, no trust is implied if the title is conveyed to a child of the one paying the price.

    • Burden of Proof The party asserting the existence of a trust must provide clear and satisfactory evidence proving its existence and its elements.

  2. Good Faith Builder

    • Article 448 of the Civil Code A builder in good faith believes he has the right to build on the land, either through ownership or a valid claim of title.

    • Article 453 of the Civil Code If the landowner consents to the building, he is considered to act in bad faith, and the rights of the landowner and the builder are treated as though both acted in good faith.

  3. Award for Damages and Attorney’s Fees

    • Article 2219 and 2220 of the Civil Code Moral damages include mental anguish, and they must be shown to be the proximate result of the defendant's wrongful act. The award must also be proportionate to the injury suffered and not punitive.

    • Article 2208 of the Civil Code The power to award attorney’s fees demands factual, legal, and equitable justification. Attorney’s fees are not to be awarded every time a party wins a suit; they must be bolstered by substantial reasons.

These principles and rulings outline the legal reasoning applied by the Court in deciding the issues presented in the case.