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[ G.R. No. 127005. October 6, 1999]

SPS. ROSARIO vs. CA, et al.

THIRD DIVISION

Gentlemen:

Quoted hereunder, for your information, is a resolution of this Court dated OCT 6, 1999.

G.R. No. 127005 (Sps. Rosario vs. CA, et al.)

This refers to the MOTION FOR RECONSIDERATION filed by petitioners of our decision dated July 19, 1999 in G.R. No. 127005 entitled "Sps. Rosario vs. CA, et al.", finding that an implied trust existed between Filomena Lariosa and Emilio Villahermosa and his children (private respondents) over Lot 77-A of the subdivision plan (LRC) Psd-35298 of Lot 77 of the Talisay-Minglanella Estate, Cebu and that trust also existed between Filomena Lariosa and petitioner Herminia Rosario for the benefit of the private respondents Villahermosas.

Petitioners contend that the deed of sale executed on June 6, 1964 in favor of Filomena Lariosa by the Villahermosa over Lot No. 77-A was paid for by Filomena with valuable consideration; that the alleged purpose for the sale of the property to Filomena, i.e., to enable her to obtain a loan to build her house, cannot affect the nature and validity of said transaction; that whether the promise of Filomena to return or to resell the lot to the Villahermosa if she would no longer use the same constituted a resulting or implied trust. Petitioners further allege that Herminia Rosario acquired her one-half share for valuable consideration, thus the finding of a simulated sale should be reconsidered.

We are not persuaded. When property is conveyed to a person in reliance upon his declared intention to hold it for, or transfer it to another or to the grantor, there is an implied trust in favor of the person whose benefit it is contemplated.1 [Article 1453, Civil Code.] We find no cogent reason to disturb our findings considering that we have sufficiently established that the transfer made to Filomena was with the declared intention to hold the lot for, or to transfer it back to Emilio and we have also enumerated the circumstances showing that the deed of sale between Filomena and Herminia Rosario was a mere accomodation hence a simulated contract of sale.

Petitioners also claim that in finding that petitioner Herminia Rosario merely held half of the property in trust for Filomena, this Court nullifies her status as registered co-owner over the � portion of subject Lot which cannot be done since torrens certificate of title cannot be a subject of collateral attack.

We do not agree.

When petitioner Herminia obtained the registration of the � share of the subject lot by virtue of a simulated deed of sale it impressed upon the title a constructive trust in favor of the true party, Filomena Lariosa. We have also extensively discussed the same in our decision. Thus, the fact that the title to subject lot was issued in 1965 under TCT no. 12326 registered in the names of both Filomena and Herminia Rosario and said to be conclusive as to all the matters contained therein, did not operate to vest upon petitioner Herminia the ownership over the � portion of lot 77-A considering the absolute simulation of the contract of sale between Filomena and Herminia. We have ruled that the torrens system does not create or vest title. It only confirms and records title already existing and vested. It does not protect a usurper from the true owner. It cannot be a shield for the commission of fraud. It does not permit one to enrich himself at the expense of the another. Where one does not have any rightful claim over a real property, the torrens system of registration can confirm or record nothing.

Finally, we also find unmeritorious petitioners' argument that the action to question Herminia's � share has long prescribed. Petitioners allege that assuming constructive trust existed between Herminia and Filomena over the � share of the property and the while of such property, was in turn, held for the benefit of the Villahermosas, still considering that TCT No. 12326 had been in existence since 1965, the action to question Herminias one-half share had long prescribed and that an action for reconveyance based on constructive trust must be filed within ten years. This rule has no application in the instant case. Private respondents Villahermosa knew that the sale which transpired between Filomena and Herminis was merely simulated for the purpose of facilitating and expediting the approval of the Filomena's loan with the GSIS for the construction of Filomena's new house on the subject lot, which we found to be borne out by the evidence on record. In fact, Filomena had the physical possession of the subject lot until her death on October 9, 1976. Notably, before her death, Filomena complied with her solemn promise to return the subject lot 77-A to the Villahermosas which she held in trust for the latter by executing a deed of sale dated July 28, 1976, thus, there was no need for private respondents to file an action for reconveyance since the subject lot was already returned to them.

WHEREFORE, the motion for reconsideration is DENIED with FINALITY, for lack of merit.

SO ORDERED.

Very truly yours,

(Sgd.) JULIETA Y. CARREON

Clerk of Court

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