Bueno v. Reyes Digest | Obligations and Contracts p.
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G.R. No. L-22587. April 28, 1969
BUENO v. REYES
Makalintal, J:
TOPIC: Trusts: Implied Trusts
DOCTRINES/PRINCIPLES: The trust, if any can be deduced at the facts of the case, was an
implied one arising by operation of law not from any presumed intention of the parties but to
satisfy the demands of justice and equity and as a protection against unfair dealing or downright
fraud.
Prescription does supervene where the trust is merely an implied one. An action for
reconveyance based on an implied trust is subject to prescription in ten years. The cause of action
upon a constructive trust which arose by reason of the “bad faith or mistake” of the trustee must
be deemed to have accrued only upon the discovery of such bad faith or mistake.
FACTS:
Francisco H. Reyes and his two brothers, Juan and Mateo was issued an Original
Certificate of Title for a lot in Laoag Cadastre. Twenty-three (23) years later, the plaintiffs filed the
action for reconveyance of the said lot. They allege that the said lot originally belonged to Jorge
Bueno, who died leaving three children, namely, Brigida Bueno, Eugenia Bueno and Rufino
Bueno, to whom the property descended by intestate succession; that subsequently Brigida and
Eugenia died, leaving their respective children, who are now the plaintiffs-appellants together with
Rufino Bueno; that Francisco H. Reyes was Eugenia's husband and the father of the plaintiffs
surnamed Reyes, “who by agreement among the heirs of Jorge Bueno was entrusted in filing the
answer in the cadastral proceedings and in obtaining the title thereto for and in behalf of all the
heirs of Jorge Bueno, including his wife Eugenia Bueno.”
The defendants Juan and Mateo Reyes filed their answer, in which they raised a number of
defenses, including laches, imprescriptibility of title, and prescription of action. This last defense
was reiterated in a subsequent motion to dismiss, which was upheld by the court a quo in the
order already referred to and now subject of this appeal.
ISSUE: Whether the lower court erred in the dismissal of the complaint on the ground of
prescription.
RULING:
Yes. Both the appellees and the lower court proceeded on the theory that the action for
reconveyance was predicated on the existence of an implied trust and that such an action
prescribes in 10 years. The appellants’ counter, in this appeal, that the trust was not implied but
express, and that in any case even an implied trust is imprescriptible. What was apparently
designed to be an express trust was for the late Francisco H. Reyes to file an answer in the
cadastral proceeding and to obtain title to the land for and in behalf of all the heirs of Jorge Bueno.
But such express trust failed to materialize.
If any trust can be deduced at all from the foregoing facts it was an implied one, arising by
operation of law not from any presumed intention of the parties but to satisfy the demands of
justice and equity and as a protection against unfair dealing or downright fraud. Indeed, in this
kind of implied trust, commonly known as constructive trust, there exists a certain antagonism
between the trust and the trustee.
Bueno v. Reyes Digest | Obligations and Contracts p. 14
The Court declared that upon the general proposition that an action for reconveyance such as the
present is subject to prescription in ten years the appellees and the court a quo are correct. The
question here, however is: from what time should the prescriptive period be counted, in the light of
the allegations in the complaint? It should be remembered that the constructive trust arose by
reason of the "bad faith or mistake" of the deceased Francisco H. Reyes, compounded by the
"connivance" of the appellees Juan and Mateo Reyes. Consequently, the cause of action upon
such trust must be deemed to have accrued only upon the discovery of such bad faith or mistake,
or to put it more specifically, upon the discovery by the appellants that Francisco H. Reyes, in
violation of their agreement with him, had obtained registration of the disputed property in his own
name and in the names of his brothers. It would not do to say that the cadastral proceeding itself,
by virtue of its nature as a proceeding in rem, was constructive notice to the appellants, for as far
as they were concerned the cadastral answer they had authorized Francisco H. Reyes to file was
not adverse to them; and neither he nor the appellee may invoke the constructive-notice rule on
the basis of their own breach of the authority thus given.
The Court held that the arguments presented were not facts already established by evidence but
were only alleged in the complaint and therefore deemed hypothetically admitted for purposes of
the motion to dismiss filed by the defendants. The Court also found contradictory allegations of
fact in the answer, but these were matters of defense that must be substantiated at the trial. At the
very least the grounds upon which the order of dismissal was based did not appear to be
indubitable; and it would be more in keeping with justice to afford the plaintiffs as well as the
defendants the opportunity to lay their respective claims and defenses before the Court in a full-
blown litigation.
DISPOSITION: The order appealed from is set aside and the case is remanded for further
proceedings. No costs.
