FACTS:

The case involves a dispute over two properties: the Ugac properties and the Bonifacio property. Petitioner Lina Peñalber claimed ownership of the Ugac properties and alleged that her title was cancelled and replaced with a new one in the names of the respondents, Quirino Ramos and Leticia Peñalber. She claimed that her signature on the Deed of Donation was forged and that respondent spouses Ramos sold the properties to respondent Bartex, Inc. Petitioner sought the nullification of various documents and the payment of the assessed value of the properties.

Regarding the Bonifacio property, petitioner alleged that she allowed respondent spouses Ramos to manage her hardware store and that they agreed to purchase the property on her behalf using funds from the store. However, the Deed of Sale was executed in the names of respondent spouses Ramos, who refused to transfer the property to petitioner despite her payments.

The RTC rendered a decision on the petitioner's first cause of action. The court ruled that the denial by the petitioner regarding the validity of the deed of donation was not sufficient to overcome the presumption of regularity and truth in a notarial document. The petitioner failed to present evidence such as an examination of her allegedly falsified signature, resulting in the failure of her cause.

In the second cause of action, the court found in favor of the petitioner. The decrease in stocks in the hardware store while under the management of the respondent spouses should be accounted for by them. The court also found that there was a balance in the petitioner's favor from the sales of stocks, but it was silent on how and when the respondent spouses paid off the petitioner's alleged obligations to suppliers. Thus, the court ruled in favor of the petitioner on the second cause of action.

ISSUES:

1. Whether the evidence presented by the petitioner is sufficient to prove her claim for reconveyance of the Bonifacio property.

2. Whether the requirement of exerting earnest efforts towards a compromise under Article 151 of the Family Code applies in this case.

3. Whether the existence of a trust agreement between petitioner and respondent spouses Ramos was clearly established.

4. Whether the trust agreement was valid and enforceable.

5. Whether a valid and enforceable trust agreement was created between the petitioner and respondent spouses Ramos.

6. Whether the alleged verbal trust agreement concerning an immovable property is enforceable despite not being reduced in writing.

7. Whether or not the testimonies presented by the petitioner regarding the alleged verbal trust agreement are admissible in evidence.

8. Whether or not there is sufficient evidence to prove the existence of the alleged express trust agreement.

RULING:

1. The RTC found that the evidence presented by the petitioner is sufficient to prove her second cause of action and ordered the reconveyance of the Bonifacio property to the petitioner. The Court of Appeals, on the other hand, ruled that the petitioner failed to prove her claim with the required quantum of evidence. The inventory presented by the petitioner showing a difference in value of the stocks does not conclusively prove that the said amount was used to pay the purchase price of the property. The Court of Appeals held that it is possible that the goods were taken without being sold.

2. The Court of Appeals held that the requirement of exerting earnest efforts towards a compromise under Article 151 of the Family Code does not apply in this case because it involves not only the petitioner and her daughter but also her son-in-law, who is not covered by the term "family relations" under Article 150 of the Family Code.

3. The Court of Appeals granted the appeal and reversed the decision of the Regional Trial Court, dismissing the second cause of action of petitioner's complaint. The Court found that petitioner failed to establish with reasonable certainty her claim that the purchase of the subject lot was pursuant to a verbal trust agreement with respondent spouses Ramos.

4. The court held that the petitioner failed to prove the existence of a valid and enforceable trust agreement. The burden of proof lies on the petitioner to establish her claim by preponderance of evidence. The court emphasized that the weakness of the defense does not relieve the petitioner of her burden of proof. As such, the petitioner's arguments did not persuade the court.

5. The court ruled that the alleged verbal trust agreement concerning an immovable property is unenforceable. While Article 1443 of the Civil Code requires express trusts concerning immovable properties to be in writing, the court held that non-compliance with this requirement does not render the trust invalid. The requirement is merely for purposes of proof. The court considered the requirement as a statute of frauds that regulates the formalities of the contract necessary for enforceability. In this case, the court deemed that the respondent spouses Ramos waived their objection to the parol evidence by failing to timely object. Therefore, the oral evidence of the trust agreement was considered binding upon the parties.

6. The testimonies regarding the alleged verbal trust agreement between the petitioner and the respondent spouses were deemed admissible in evidence since the respondents did not raise objections to their admissibility.

7. While the testimonies were deemed admissible, they carried little weight in proving the alleged trust agreement. The difference in the inventories of the hardware store before and after management was transferred to the respondents is not conclusive proof that the amount was used to purchase the Bonifacio property. The petitioner failed to provide sufficient evidence to prove the existence of the alleged express trust agreement.

PRINCIPLES:

• The burden of proof lies on the party asserting a claim or defense, and the quantum of evidence required is based on the nature of the claim or defense and the circumstances of the case.

• The requirement of exerting earnest efforts towards a compromise under Article 151 of the Family Code only applies to suits between members of the same family or those encompassed in the term "family relations" under Article 150.

• Bare allegations, unsubstantiated by evidence, are not equivalent to proof.

• Oral testimony is allowed to prove the existence of a trust, and parol evidence may be relied upon to determine the intention to create a trust.

• An inference of the intention to create a trust must be made with reasonable certainty and cannot rest on vague, uncertain, or indefinite declarations.

• Express trusts are created by the direct and positive acts of the parties, while implied trusts come into being by operation of law.

• Express trusts concerning immovable property may not be proved by parol or oral evidence.

• Burden of proof lies on the party asserting a claim or defense to present evidence to establish it by the preponderance of evidence.

• Weakness of defense does not relieve the plaintiff of her burden of proof.

• Express trusts concerning immovable properties must be in writing, but non-compliance with this requirement renders the trust unenforceable only for purposes of proof, not for the validity of the trust agreement.

• The requirement for express trusts concerning immovable properties to be in writing is a statute of frauds that regulates the formalities of the contract necessary for enforceability.

• Admissibility of evidence is determined by its relevance and competence, but the weight given to the evidence still depends on judicial evaluation.

• The burden of proof rests on the party alleging the existence of a fact or agreement, and failure to provide sufficient evidence will result in the denial of the claim.

• Conclusive proof requires clear and convincing evidence that leaves no room for doubt. Speculative or non sequitur conclusions are not sufficient to establish a claim.