522 Phil. 506
CORONA, J.:
WHEREFORE, the decision rendered in Civil Case No. Q-96-26270 on February 27, 1998 is hereby REVERSED and SET ASIDE. As prayed for in the answer, Transfer Certificate of Title No. 56210 over the 240 square-meter lot located at 92 (now 102) K-5th Street, Kamuning, Quezon City issued in the name of Eusebio Pigao's children is hereby ordered CANCELLED and the Register of Deeds of Quezon City is hereby ordered to ISSUE a new one in lieu thereof in the names of both Eusebio Pigao's children and Samuel Rabanillo, with the front half portion of the lot pertaining to the latter and the back half portion pertaining to the former.The antecedent facts follow.
Let a copy of this decision be furnished the Register of Deeds of Quezon City for proper action.
SO ORDERED.[2]
WHEREFORE, judgment is hereby rendered in the following:
- Declaring [petitioners] the absolute owners of the entire land described in TCT No. 56210 and declaring the deed of assignment issued by the late Eusebio Pigao in favor of [respondent] null and void.
- Ordering [petitioners] to pay [respondent] the value of the house and improvements thereon in the event that they choose to appropriate the same in which case [respondent] is given the right of retention until he has been reimbursed by [petitioners]; or to compel [respondent] to buy the land in case they choose not to. In the latter case, [respondent] cannot be compelled to buy the land if the value thereof is higher than the value of the improvements.
- Dismissing the case against defendant Gil Ymata for lack of cause of action there being no privity of contract between him and [petitioners];
- Dismissing both [petitioners'] and [respondent's] claims for damages and attorney's fees there being no satisfactory warrant thereto; and
- No pronouncements as to costs.
IT IS SO ORDERED.[6]As stated earlier, the CA reversed the RTC decision and ruled in favor of respondent.
The first issue before us is the validity of the deed of assignment whereby Eusebio assigned to respondent his rights to half of the lot. Petitioners argue that the lot subject of this case was public land granted by the PHHC to their predecessor, Eusebio. Hence, they contend that Section 118 of Commonwealth Act No. 141 (CA 141)[8] otherwise known as the Public Land Act, was applicable:I.
THE [CA] ERRED IN DECLARING THAT THE SUBJECT DEED OF ASSIGNMENT IS VALID AND THAT THERE IS NO PROHIBITION [AGAINST] THE SALE [OF] RIGHTS OVER THE AWARDED LOT MADE BY EUSEBIO PIGAO.II.
THE [CA] ERRED IN DECLARING THAT A RELATIONSHIP OF IMPLIED TRUST OVER THE [ONE-HALF] (1/2) PORTION OF THE SUBJECT LOT WAS CREATED BETWEEN EUSEBIO PIGAO AND [RESPONDENT].[7]
Sec. 118. Except in favor of the Government or any of its branches, units, or institutions, lands acquired under free patent or homestead provisions shall not be subject to encumbrance or alienation from the date of the approval of the application and for a term of five years from and after the date of issuance of the patent or grant, nor shall they become liable to the satisfaction of any debt contracted prior to the expiration of said period, but the improvements or crops on the land may be mortgaged or pledged to qualified persons, associations, or corporations. (emphasis supplied)Petitioners assert that the deed of assignment was null and void because it was entered into during the prohibited period,[9] i.e., the entire period from the date of approval of Eusebio's application to purchase up to five years from and after the date of issuance of the patent to him in 1973. Respondent counters that CA 141 did not apply because it covered only homestead or sales patents.[10]
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(2) Within a period of one year from the issuance of the Certificate of Title by virtue of this deed, no transfer or alienation whatsoever of the property subject hereof, in whole or in part, shall be made or registered without the written consent of the Vendor, and such transfer or alienation may be made only in favor of persons qualified to acquire residential lands under the laws of the Philippines.[15]The CA, however, held that what was assigned by Eusebio in 1959 was his right to buy, own and occupy the front half portion of the lot and not the lot itself. It went on to conclude that the deed of assignment was perfectly valid since Eusebio was under no prohibition to sell such right.
Matters of judicial notice have three material requisites: (1) the matter must be one of common and general knowledge; (2) it must be well and authoritatively settled and not doubtful or uncertain; and (3) it must be known to be within the limits of jurisdiction of the court. The power of taking judicial notice is to be exercised by courts with caution. Care must be taken that the requisite notoriety exists and every reasonable doubt on the subject should be promptly resolved in the negative.[21] (emphasis supplied)Consequently, for this document to be properly considered by us, it should have been presented during trial and formally offered as evidence. Otherwise, we would be denying due process of law to respondent:
It is settled that courts will only consider as evidence that which has been formally offered. xxx If [petitioners] neglected to offer [any document] in evidence, however vital [it] may be, [they] only have themselves to blame, not respondent who was not even given a chance to object as the documents were never offered in evidence.Besides, this document does not even pertain to the lot and parties involved here. Accordingly, it is neither relevant nor material evidence. But even assuming that it were, then it would substantially affect the outcome of the case so respondent should have been given the chance to scrutinize the document and object to it during the trial of the case. It is too late to present it now when nothing prevented petitioners from introducing it before.
A document, or any article for that matter, is not evidence when it is simply marked for identification; it must be formally offered, and the opposing counsel given an opportunity to object to it or cross-examine the witness called upon to prove or identify it. A formal offer is necessary since judges are required to base their findings of fact and judgment only - and strictly - upon the evidence offered by the parties at the trial. To allow a party to attach any document to his pleading and then expect the court to consider it as evidence may draw unwarranted consequences. The opposing party will be deprived of his chance to examine the document and object to its admissibility. The appellate court will have difficulty reviewing documents not previously scrutinized by the court below. The pertinent provisions of the Revised Rules of Court on the inclusion on appeal of documentary evidence or exhibits in the records cannot be stretched as to include such pleadings or documents not offered at the hearing of the case.[22]
to acquire, develop, improve, subdivide, lease and sell lands and construct, lease and sell buildings or any interest therein in the cities and populous towns in the Philippines with the object of providing decent housing for those who may be found unable otherwise to provide themselves therewith.[24] (emphasis supplied)Eusebio, as a bona fide occupant of the subject lot, had a vested right to buy the property. This did not, however, give him the unbridled freedom to transfer his right to a third party, specially one who was unqualified to avail of it. Undoubtedly, the PHHC was clothed with authority to determine if a person was qualified to purchase a residential lot from it. The right to purchase was a personal right that the qualified applicant, as determined by PHHC, must personally exercise. As a personal right, it could not be transferred to just another person.
xxx [A]fter the execution of the deed of assignment, [respondent] proceeded to buy the front half portion from PHHC by paying the amortizations due thereon in exercise of the right which he purchased by way of deed of assignment. He also established his residence on this portion since he was then secure in the knowledge that he eventually will own the same portion having also purchased this right to own in the deed of assignment. Therefore, when the purchase price for the entire lot was finally paid, the deed of its conveyance was finally executed and the title to the entire lot was issued in Eusebio Pigao's name, an implied trust relationship was created over the front half portion between Pigao and [respondent].The CA declared that Article 1448 of the Civil Code was applicable:
Per Article 1448 of the Civil Code, "there is an implied trust when property is sold, and the legal estate is granted to one party but the price is paid by another for the purpose of having the beneficial interest of the property." The former party is referred to as the trustee, while the latter is referred to as the beneficiary.
In the case at bench, the trustee is Pigao, who, with the title to the entire lot issued to him, holds the front half portion thereof in trust for [respondent], who is the beneficiary.
xxx xxx xxx[26]
Art. 1448. There is an implied trust when property is sold, and the legal estate is granted to one party but the price is paid by another for the purpose of having the beneficial interest of the property. The former is the trustee, while the latter is the beneficiary.In Morales v. Court of Appeals,[27] we extensively discussed the concept of "trust:"
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A trust is the legal relationship between one person having an equitable ownership in property and another person owning the legal title to such property, the equitable ownership of the former entitling him to the performance of certain duties and the exercise of certain powers by the latter.
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Trusts are either express or implied. Express trusts are created by the intention of the trustor or of the parties, while implied trusts come into being by operation of law, either through implication of an intention to create a trust as a matter of law or through the imposition of the trust irrespective of, and even contrary to, any such intention. In turn, implied trusts are either resulting or constructive trusts. Resulting trusts are based on the equitable doctrine that valuable consideration and not legal title determines the equitable title or interest and are presumed always to have been contemplated by the parties. They arise from the nature or circumstances of the consideration involved in a transaction whereby one person thereby becomes invested with legal title but is obligated in equity to hold his legal title for the benefit of another.
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A resulting trust is exemplified by Article 1448 of the Civil Code xxx
The trust created under the first sentence of Article 1448 is sometimes referred to as a purchase money resulting trust. The trust is created in order to effectuate what the law presumes to have been the intention of the parties in the circumstances that the person to whom the land was conveyed holds it as trustee for the person who supplied the purchase money.
To give rise to a purchase money resulting trust, it is essential that there be:
- an actual payment of money, property or services, or an equivalent, constituting valuable consideration;
- and such consideration must be furnished by the alleged beneficiary of a resulting trust.
There are recognized exceptions to the establishment of an implied resulting trust. The first is stated in the last part of Article 1448 itself. Thus, where A pays the purchase money and title is conveyed by absolute deed to A's child or to a person to whom A stands in loco parentis and who makes no express promise, a trust does not result, the presumption being that a gift was intended. Another exception is, of course, that in which an actual contrary intention is proved. Also where the purchase is made in violation of an existing statute and in evasion of its express provision, no trust can result in favor of the party who is guilty of the fraud.[28]Another exception to the establishment of an implied resulting trust under Article 1448 is when its enforcement contravenes public policy. We have already ruled that the transfer of rights by Eusebio to respondent was null and void ab initio for being contrary to public policy. As we held in Ramos v. Court of Appeals:[29]
Otherwise stated, as an exception to the law on trusts, "[a] trust or a provision in the terms of a trust is invalid if the enforcement of the trust or provision would be against public policy, even though its performance does not involve the commission of a criminal or tortious act by the trustee." The parties must necessarily be subject to the same limitations on allowable stipulations in ordinary contracts, i.e., their stipulations must not be contrary to law, morals, good customs, public order, or public policy. What the parties then cannot expressly provide in their contracts for being contrary to law and public policy, they cannot impliedly or implicitly do so in the guise of a resulting trust.[30] (emphasis supplied)Admittedly, respondent shouldered half of the amortizations which were received by Eusebio's wife[31] and paid to the PHHC for the purchase of the lot. He also paid for the realty taxes for the said portion.[32] However, this was not an implied trust wherein petitioners held the title over the front half portion in trust for respondent. Otherwise, it would again run against public policy.