G.R. No. 108121 May 10, 1994HERMINIA L. RAMOS and HEIRS OF HERMINIO RAMOS,Petitioners,v.HON. COURT OF APPEALS, SPOUSES HILARIO CELESTINO and LYDIA CELESTINO,Respondents.Leven S. Puno for petitioners.chanrobles virtual law libraryFernandez & Olivas for private respondents.DAVIDE, JR.,J.:Invoking Rule 45 of the Rules of Court, petitioners seek the review and reversal of the decision of the Court of Appeals of 30 September 19911and its Resolution of 15 December 19922in CA-G.R. CV No. 26544.3The challenged decision affirmed the joint decision4of Branch 95 of the Regional TrialCourt (RTC) of Quezon City in Civil Case No. Q-49272 and LRC CaseNo. Q-3387(86), the dispositive portion of which reads as follows:WHEREFORE, in LRC Case No. Q-3387 (86), the Court hereby renders judgment dismissing said case with the petition and claims therein for lack of jurisdiction thereover; and in Civil Case No. Q-49272, the Court hereby renders judgment dismissing defendant's counterclaim for lack of merit and declaring plaintiffs to be the lawful owners of the subject parcel of land designated as Lot 25, Block 86 of the subdivision plan Psd-68807, with an area of 400 square meters, more or less, situated in Sikatuna Village, Diliman, Quezon City, and covered by Transfer Certificate of Title No. 204173 of the Registry of Deeds for Quezon City, as well as ordering defendants: (a) to execute a deed of absolute sale in favor of plaintiffs, conveying and transferring the ownership of said parcel of land; (b) to remove whatever improvements defendants have erected on said parcel of land; (c) to vacate said parcel of land and deliver possession thereof to plaintiffs; and, (d) jointly and severally to pay plaintiffs the sum of P20,000.00 as attorney's fees, as well as to pay the costs of suit. Further, finding no satisfactory warrant therefor, the Court also hereby dismisses the rest of plaintiff's claims.5chanrobles virtual law libraryCivil Case No. Q-49272 was an action for reconveyance filed by the spouses Hilario and Lydia Celestino against Herminia Ramos and the heirs of Herminio Ramos praying that the plaintiffs be declared the lawful owners of Lot No. 25, Block 86 of the subdivision plan Psd-68807 located at Sikatuna Village, Diliman, Quezon City, and that the defendants be ordered to execute a deed of absolute sale over the lot in favor of the plaintiffs, remove whatever improvements they have constructed thereon, vacate the lot and deliver its possession to the plaintiffs, and to pay actual, moral, and exemplary damages, attorney's fees, and the costs of the suit.6LRC Rec. Case No. Q-3387(86)was a petition to declare void the order issued on 22 August 1985 by Branch 104 of the RTC of Quezon City in LRC Case No. Q-3150(85)7ordering the cancellation of Transfer Certificate of Title (TCT) No. 204173 upon petition of Herminia Ramos.chanroblesvirtualawlibrarychanrobles virtual law libraryThe facts, as found by the trial court and adopted by the respondent Court of Appeals, are as follows:From the evidence adduced at the joint trial of these related cases, the Court finds that petitioner/plaintiff Lydia Celestino (referred to as Lydia hereinafter), married to plaintiff Hilario Celestino, was employed in the economic research department of the Central Bank of the Philippines from 1949 to 1983, while the late Herminio Ramos (Herminio, hereinafter) - the deceased spouse of respondent/defendant Herminia L. Ramos (Herminia hereinafter) and predecessor-in-interest of Herminia and the rest of defendants - was employed during his lifetime in the same department of the Central Bank until his retirement sometime in 1972.chanroblesvirtualawlibrarychanrobles virtual law librarySometime in 1961, the now defunct People's Homesite & Housing Corporation (PHHC) awarded the rights to buy certain parcels of land to employees of the Central Bank. As a Central Bank employee, Herminio was awarded the rights to buy the parcel of land designated as Lot 25, Block 86 of the subdivision plan Psd-68807, with an area of some 400 square meters, and situated in what is now known as Sikatuna Village in Diliman, Quezon City, For the price of P3,800.00 payable in installments, Herminio then sold and transferred to Lydia his said rights to buy said property, and Lydia paid said price in several installments, the last installment being paid on May 21, 1962 (Exhs. A thru C). Having acquired the rights to buy the property, Lydia assumed the obligation of paying to the PHHC the purchase price thereof. Thus, Lydia paid to the PHHC the monthly amortizations of P34.11 per month over a period of some 10 years ending sometime in 1974 when she paid the last monthly amortization, thereby effecting the full payment of the purchase of the subject land. During said period and thereafter, Lydia's friend, Cynthia Camacho, who was then residing at the back of the subject property, acted as the property's caretaker for Lydia, even as Lydia also had the land fenced.chanroblesvirtualawlibrarychanrobles virtual law libraryWhen the corresponding transfer certificate of title - Transfer Certificate of Title (TCT) No. 204173 of the Registry of Deeds for Quezon City - was issued after the full payment of the purchase price, the certificate was in the name of "HERMINIO T. RAMOS, of legal age, Filipino, married to Herminia L. Ramos" (Exhs. 1-A & 6-A). Herminio and Herminia knew of and consented to the delivery to Lydia of said title certificate's owner's duplicate copy (Exh. D, also Exh. 1), and said copy since then has been in Lydia's possession and custody. On or about November 26, 1974, Herminio, together with Herminia, executed in Lydia's favor an irrevocable special power of attorney (Exh. E), in sum empowering Lydia to sell, mortgage, or lease the subject property and to dispose of the proceeds thereof in any manner she wants. Said special power of attorney was executed upon the advice of a realty expert, one Isidro Gonzales, as a practical means of giving assurance to Lydia that Herminio, together with his spouse Herminia, was in good faith and recognized the existing implied trust relationship between them over the subject land, particularly in view of the restriction annotated on the title certificate in sum to the effect that within one year from said certificate's issuance no transfer or alienation of the property shall be made without the PHHC's written consent (Exh. 1-B).chanroblesvirtualawlibrarychanrobles virtual law libraryOn August 22, 1985, Branch 104 of the Regional Trial Court of the National Capital Judicial Region in Quezon City (referred to as RTC Branch 104 hereinafter) issued in its LTC Case No. Q-3150 (85) an Order (Exh. 9), in sum cancelling and declaring null and void "the owner's duplicate copy of Transfer Certificate of Title No. 204173 that was lost" and ordering the Register of Deeds of Quezon City "to issue, upon payment of the required fees, another owner's duplicate copy which shall contain annotations in, and memorandum of the fact that it is issued in the place of the lost certificate of title, in all respect be entitled to like faith and credit as the original duplicate for all purposes of Presidential Decree No. 1529" and, accordingly, another owner's duplicate copy of TCT No. 204173, with a memorandum of said order of RTC Branch 104 was issued by the Register of Deeds of Quezon City (Exhs. 6 and 6-B). Said Order was issued upon Herminia's petition, in sum claiming that the original owner's duplicate copy was lost and missing.chanroblesvirtualawlibrarychanrobles virtual law libraryAfter having belatedly learned of the issuance of said Order of RTC Branch 104, Lydia on March 21, 1986 filed her petition herein, docketed as LRC Case No. Q-3387 (86), in sum praying that said Order of August 22, 1985 in LRC Case No. Q-3150 (85) be declared null and void and without legal effect and that the new owner's duplicate copy issued and delivered to Herminia be cancelled, on the ground that Herminia secured such new owner's duplicate copy thru fraud and misrepresentation because she well knew that the supposedly "lost" owner's duplicate copy was in Lydia's possession and custody.chanroblesvirtualawlibrarychanrobles virtual law librarySometimes later, after having verified that Herminio had passed away in the early part of 1985 and that Herminia and his successors-in-interest were disputing the ownership of the subject property and building thereon, Lydia together with her spouse Hilario Celestino filed the complaint herein, docketed as Civil Case No. Q-49272, engaging the services of counsel for the prosecution thereof.8chanrobles virtual law libraryThe trial court's decision is premised on the following findings and conclusion:The Court, upon the evidence adduced, finds that an implied or resulting trust was created by operation of law when the subject property was sold by the PHHC, with the legal title being vested in Herminio as the corresponding TCT was issued in his name, but with the beneficial title, however, being vested in Lydia as she was the one who paid the purchase price of the property out of her funds after Herminio had earlier sold and transferred to her his rights to buy the property and she had fully paid him the purchase price for said rights; accordingly, it appearing that instead of recognizing and abiding by said trust, Herminia and the other defendants (who as Herminio's successor-in-interest merely stepped into his shoes upon his death) have repudiated the trust by claiming the property for themselves soon after Herminio's death in 1985, Lydia and her spouse Hilario were fully warranted in bringing their said compliant herein, seeking as it does, the enforcement of the trust thru defendants' execution of the corresponding conveyance deed to the end that the true beneficial title may be reflected in the corresponding title certificate; and, again, sinceit was because of defendant's unwarranted repudiation of the trustthat plaintiffs were compelled to bring their complaint in Civil CaseNo. Q-49272 and engage their counsel's services therefor, the Court finds that aside from the principal relief sought in the complaint and the costs, recovery by plaintiffs from defendants of the sum of P20,000.00) as reasonable attorney's fees is just and equitable . . . .chanroblesvirtualawlibrarychanrobles virtual law libraryThe fact that Herminia knew of and consented to the subject transaction between Herminio and Lydia is amply indicated by the special power of attorney, Exh. E, executed in Lydia's favor by Herminio and Herminia sometime on November 26, 1974. No reasonable explanation can be gleaned from the evidence adduced for Herminio's and Herminia's execution of said special power of attorney other than the fact that they recognized that it was Lydia who paid the purchase price of the subject property to the PHHC out of her own funds and that she was the beneficial owner thereof. Of course, Herminia would have the Court find that the signature appearing over her printed name in Exh. E is not her signature. But, certainly, Herminia's bare claim cannot prevail against the notary public's certificate in the acknowledgment portion of the document, in sum asserting that both Herminio and Herminia personally appeared before the notary public, that they are the same persons who executed the special power of attorney, and that they acknowledged to the notary public that they understood the contents of the document and that they executed the same as their voluntary act and deed; and indeed, Herminia's specimen signatures (Exh. 2 thru 5), presented at the trial, cannot properly be described as bearing no marked similarity, nay, identity, with the signature appearing over her printed name Exh. E.chanroblesvirtualawlibrarychanrobles virtual law libraryThen, again, the fact that Herminia apparently secured the tax declarations and paid the realty taxes and penalties on the subject property only after Herminio's death in 1985 (Exhs. 7 thru 8-1), tends to indicate that Herminia herself never regarded Herminio and herself as the subject property's owners in fee simple but, rather, merely as trustees for Lydia - that is, until Herminia, together with the other defendants, repudiated the trust soon after Herminio's death in 1985.9chanrobles virtual law libraryThe defendants appealed from the decision to the Court of Appeals which docketed the appeal as CA-G.R. CV No. 26544. In their belief, the defendants-appellants contended that the trial court erred in holding that (1) Herminia Ramos knew of and consented to the transaction between her husband and Lydia Celestino as evidenced by the special power of attorney; (2) the alleged special power of attorney showed that the Ramos spouses recognized that it was Lydia Celestino who paid the purchase price of the lot to the PHHC out of her own funds; (3) an implied or resulting trust was created when the property was sold by the People's Homesite and Housing Corporation (PHHC) and issued to Herminio Ramos with the beneficial title vesting in Lydia Celestino since she was the one who paid the purchase price out of her own funds; (4) the plaintiff's action for reconveyance had not prescribed or been barred by laches; (5) the plaintiffs are the lawful owners of the lot, and the defendants are obligatedto execute a deed of absolute sale in favor of the former, remove their improvements on the lot, and vacate the premises and deliver the possession of the lot to the former; and (6) attorney's fees are due the plaintiffs.10chanrobles virtual law libraryIn connection with the first three assigned errors, the appellants maintained in the alternative that even assuming for the sake of argument that Herminio Ramos sold his rights over the lot in question to Lydia Celestino, the transaction was unenforceable or voidab initioand no trust was created in view of the following considerations: the alleged sale was not evidenced by any document, note, or memorandum as required by the Statute of Frauds (Article 1403(2) (e), Civil Code); no document was introduced to prove the alleged express trust as required in Article 1443 of the Civil Code; the transactionin question did not give rise to an implied trust under the Civil Code; Lydia Celestino is not qualified to acquire the lot in question from the PHHC, a fact she admitted in her testimony; the PHHC did not give its consent to the alleged sale, contrary to the conditions annotated at the back of TCT No. 204173 to the effect that the vendee (Herminio Ramos) cannot sell or encumber the said parcel of land or any part thereof without the written consent of the PHHC; the cause, object, or purpose of the alleged transaction (sale of right over the lot) is contrary to law or the public policy that the award of lands should only be to those who are not yet owners of land in Quezon City, or to morals since the transaction circumvented the policy; and Herminio Ramos had no right to sell the land or any portion thereof without the consent of his wife.11chanrobles virtual law libraryAs aforestated, the Court of Appeals, in its Decision of 30 September 1991, affirmed the decision of the trial court. In rejecting the appellants' first three assigned errors, it held that (a) the petitioners were unable to overcome the presumption of the authenticity and genuineness of the special power of attorney, a public document duly acknowledged before a notary public;12(b) the Statute of Frauds applies only to executory contracts, while the action instituted by the appellees was "for reconveyance based on resulting trust arising from a fully executed sale with nothing left to be done except the formal executionof the deed of conveyance"; "the documentary evidence showing the saleof Herminia [sic] Ramos' right to purchase the lot is well-nigh conclusive";13(c) neither the private respondents nor the trial court made any reference to an express trust under Article 1437 of the Civil Code; what is present in this case is a resulting trust under Article 144814of the Civil Code wherein "the legal title to the lot was taken and given to Herminia Ramos and Herminio Ramos; while the beneficial ownership thereof remained with the plaintiff";15and(d) "restriction of the sale of the property without the approval of the PHHC within one year from the issuance of the title does not militate against and is not an element of a resulting trust."16chanrobles virtual law libraryAs regards the fourth assigned error, the Court of Appeals ruled that the appellees' cause of action for reconveyance had not yet prescribed for "the trust was a continuing and subsisting one" which the special power of attorney recognized; the rule of prescription of implied or resulting trust does not apply where a fiduciary relation exists and the trustee recognizes the trust; and if atall, there was a repudiation of the trust, it "came about only after the death of Herminio when defendants tried to claim the property for themselves in 1985."17chanrobles virtual law libraryThe appellants then filed a Motion for Reconsideration and for Leave to Submit Additional Evidence, dwelling at length on the admissibility and authenticity of the special power of attorney by reiterating that Herminia Ramos' signature thereon is a forgery and alleging that the copy thereof was not admissible in evidence as it was a mere photocopy and therefore not the best evidence; and that they were able to obtain a certification from the Clerk of Court of the RTC of Manila that Atty. Ulpiano P. Mosalla, before whom the special power of attorney was acknowledged, was not a duly commissioned notary public for and in the City of Manila. They further reiterated the issues of prescription, the absence of marital consent on the part of Herminia Ramos to the sale of her husband's right over the lot, and the disqualification of Lydia Celestino to purchase the lot.18chanrobles virtual law libraryIn its Resolution of 15 December 1992,19the Court of Appeals denied the aforesaid motion for reconsideration with leave to submit additional evidence.chanroblesvirtualawlibrarychanrobles virtual law libraryHence this petition which was filed on 28 December 1992.chanroblesvirtualawlibrarychanrobles virtual law libraryOn 13 December 1993, after the submission of the comment to the petition, the reply thereon, and the rejoinder to the latter, we gave due course to the petition and directed the parties to submit their simultaneous memoranda, which they complied with.chanroblesvirtualawlibrarychanrobles virtual law libraryPetitioners (defendants-appellants below) maintain that the Court of Appeals erred in holding that (a) petitioner Herminia Ramos' signature on the special power of attorney is genuine; (b) there was an implied trust in this case; and (c) the action for reconveyance had not yet prescribed.chanroblesvirtualawlibrarychanrobles virtual law libraryAs we see it, the second assigned error unravels the core and decisive issue in this case,i.e., the validity of the transaction involving the lot in question between Herminio Ramos and Lydia Celestino. The petitioners reiterate their thesis before the trial court and the Court of Appeals that no trust was established in this case because (1) there is a restriction expressly imposed by the PHHC in the sale of the land to Herminio Ramos, to wit:Within a period of one year from the issuance of TCT by virtue of this deed no transfer or alienation whatsoever of the property subject thereof whether in whole or in part shall be made or registered w/out the written consent of the vendor and such transfer or alienation may be made only in favor of person qualified to acquire land under the laws of the Philippines.20chanrobles virtual law libraryand (2) even assumingarguendothat Herminio Ramos sold his rights over the lot, the sale was null and void for being contrary to the public policy of awarding PHHC lots to Central Bank employees who are not residential landowners. Private respondent Lydia Celestino, Herminio's vendee, was disqualified to acquire any PHHC lot because she already owned a residential lot in Quezon City. This issue was raised in the petitioners' special and affirmative defenses in their answer,21but the trial court did not meet or resolve it squarely. It assumed that the transaction was valid. The Court of Appeals likewise did not tackle this issue in its Decision of 30 September 1991 and Resolution of 15 December 1992. Just like the trial court, it merely assumed the validity of the transaction.chanroblesvirtualawlibrarychanrobles virtual law libraryThe assumption, however, is without basis. As correctly pointed out by the petitioners, which the private respondents failed to rebut, Lydia Celestino had candidly admitted in her testimony that although she was a Central Bank employee, she was not qualified to acquire any PHHC lot under the agreement entered into between the PHHC and the Central Bank because she is already the owner of a lot in Quezon City. Thus, on cross-examination she declared:Q Mrs. witness, you stated that the lots what you call Central Bank Village were awarded to the employees of the Central Bank but you were not one of the awardees. Why?chanrobles virtual law libraryA I have here in Quezon City a property in my name and we are not allowed to get another property.chanroblesvirtualawlibrarychanrobles virtual law libraryQ So in other words, you are not qualified?chanrobles virtual law libraryA Yes, sir.22On further cross-examination, she elaborated on her disqualification. Thus:ATTY. ESPONAS (continuing):Q You previously testified that the reason you are not one of the awardees of a lot in that subdivision of the Central Bank, the reason was you were not qualified, is it not?chanrobles virtual law libraryA I was not qualified.chanroblesvirtualawlibrarychanrobles virtual law libraryQ And the reason why you were not qualified is because you already own a properly in Quezon City, is it not?chanrobles virtual law libraryA I was only telling the truth. Yes.chanroblesvirtualawlibrarychanrobles virtual law libraryQ And again the qualification in order to be qualified or be entitled to an award in that subdivision of the central bank, you must not be an owner of a lot in Quezon City.xxx xxx xxxA Yes, sir, you must not be an owner.chanroblesvirtualawlibrarychanrobles virtual law libraryQ And up to now you are an owner of a lot in Quezon City?chanrobles virtual law libraryA Yes, the same house that I claimed then.xxx xxx xxxQ Up to now you are still not qualified to own a lot in that subdivision?xxx xxx xxxchanrobles virtual law libraryWITNESS:chanrobles virtual law libraryI am not qualified up to now.23chanrobles virtual law libraryHer disqualification is the probable reason why she did not submit for approval by the PHHC the transfer in her favor of Herminio Ramos' right to buy the lot in question. The PHHC's approval was necessary for the validity ofthe transfer. InIbay vs. Intermediate Appellate court,24which also involved a transfer of the right of an awardee of a PHHC lot to a party disqualified to acquire a PHHC lot, this Court stated:There is no need to quibble on or belabor further this point. As squarely ruled by the respondent Court, Exhibit "1" is not to be considered a deed of sale of the property but merely a transfer of Rosita Abando's rights as an applicant to one-half (1/2) of the lot. This is so because at the date of its execution, Rosita was not yet the owner of the lot. The document itself explicitly states that the PHHC is the registered owner of the property. The approval of the PHHC is necessary for the transfer to be valid and effective. In the case at bar, not only did the transfer lack the requisite approval, the same was categorically disapproved by the latter, per its letter of 15 February 1960, because petitioner, under the policy of the PHHC, is no longer qualified to acquire another PHHC lot. ResolutionNo. 82 of the PHHC, adopted by its Board of Directors on 23 May 1951, provided that "the sale of more than one lot per person shall not be permitted."25This policy is supported by the law. One of the purposes of the PHHC was 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.The same awareness of the fatal flaw of the transfer is the most logical explanation why Lydia Celestino took no further action to secure a new transfer certificate of title despite the fact that she had always been in the possession of TCT No. 204173 which was issued to Herminio Ramos on 21 November 1974 yet.26Instead of requiring Herminio Ramos to execute a deed of sale in her favor and to obtain the PHHC's conformity thereto, she was satisfied with the special power of attorney, executed five days after the issuance of the title, or on 26 November 1974, authorizing her to "SELL, MORTGAGE, LEASE, LET, or RENT" this lot.27Such authority is inconsistent with Lydia Celestino's claim for ownership because the grantor therein, Herminio Ramos, solemnly declared that he is "the owner in fee simple" of the lot described in TCT No. 204173.chanroblesvirtualawlibrarychanrobles virtual law libraryFinally, it was only on 21 March 1986, more than fifteen years after Herminio Ramos allegedly sold to her his rights over the lot and abouttwelve years after the certificate of title on the lot was issued to Herminio Ramos, when Lydia Celestino first publicly revealed, by filing LRC CaseNO. Q-3387(86), that Herminio sold to her his rights thereon. All these merely suggest that Lydia did everything to hide her disqualification to own the lot until she could no longer avoid the dangerous precipice where she was brought by her clandestine transaction with Herminio Ramos.chanroblesvirtualawlibrarychanrobles virtual law libraryThe inevitable conclusion then is that Lydia Celestino, knowing of her disqualification to acquire a lot from the PHHC at the subdivision reserved for qualified Central Bank employees, tried to get one through the backdoor. Otherwise stated, she wanted to get indirectly that which she could not do so directly. Having acted with evident bad faith, she did not come to court with clean hands when she asked for the reconveyance of the property on the basis of a resulting trust under Article 1448 of the Civil Code.chanroblesvirtualawlibrarychanrobles virtual law libraryA resulting trust is an "intent-enforcing" trust, based on a finding by the court that in view of the relationship of the parties their acts express an intent to have a trust, even though they did not use language to that effect. The trust is said to result in law from the acts of the parties. However, if the purpose of the payor of the consideration in having title placed in the name of another was to evade some rule of the common or statute law, the courts will not assist the payor in achieving his improper purpose by enforcing a resulting trust for him in accordance with the "clean hands" doctrine. The court generally refuses to give aid to claims from rights arising out of an illegal transaction, such as where the payor could not lawfully take title to land in his own name and he used the grantee as a mere dummy to hold for him and enable him to evade the landlaws,28e.g.,an alien who is ineligible to hold title to land, who pays for it and has the title put in the name of a citizen.chanroblesvirtualawlibrarychanrobles virtual law libraryOtherwise 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."29The 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.30What 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.chanroblesvirtualawlibrarychanrobles virtual law libraryAlthough the contract should be voided for being contrary to public policy, we deem it equitable to allow the private respondents to recover what they had paid for the land with legal interest thereon commencing from the date of the filing of the complaint in Civil Case No. Q-49272. Thus, she is entitled to the return of the amount she had paid to Herminio in the sum of P3,800.00 and the refund of the installments she had paid to the PHHC (P34.11 monthly for a period of ten years), with legal interest thereon.chanroblesvirtualawlibrarychanrobles virtual law libraryThe foregoing discussions render unnecessary the resolution of the other issues raised by the parties.chanroblesvirtualawlibrarychanrobles virtual law libraryWHEREFORE, the instant petition is GRANTED and the respondent Court of Appeals' Decision of 30 September 1991 and Resolution of 17 December 1992 in CA-G.R. CV No. 26544 as well as the joint decision of the Regional Trial Court of Quezon City, Branch 95, in Civil Case No. Q-49272 and LRC Case No. Q-3387(86) of 23 February 1990 are REVERSED and SET ASIDE. The latter two cases are ordered DISMISSED. However, the petitioners are ordered to refund to the private respondents within thirty days from the finality of this decision the sum of P3,800.00 and all the installments the latter had paid to the PHHC for the purchase rice of the lot in question, with 6%per annuminterest thereon computed from the date of the filing of the complaint in Civil Case No. Q-49272 until payment. Let a copy of this decision be furnished the National Housing Authority for its information and appropriate action as it may deem necessary in the premises.chanroblesvirtualawlibrarychanrobles virtual law librarySO ORDERED.Cruz, Bellosillo, Quiason and Kapunan,JJ., concur.

DEVELOPMENT BANK OF THE PHILIPPINES,petitioner, vs.COMMISSION ON AUDIT,respondent.D E C I S I O NCARPIO,J.:The CaseIn this special civil action forcertiorari,[1]the Development Bank of the Philippines (DBP) seeks to set aside COA Decision No. 98-403[2]dated 6 October 1998 (COA Decision) and COA Resolution No. 2000-212[3]dated 1 August 2000 issued by the Commission on Audit (COA).The COA affirmed Audit Observation Memorandum (AOM) No. 93-2,[4]which disallowed in audit the dividends distributed under the Special Loan Program (SLP) to the members of the DBP Gratuity Plan.Antecedent FactsThe DBP is a government financial institution with an original charter, Executive Order No. 81,[5]as amended by Republic Act No. 8523[6](DBP Charter).The COA is a constitutional body with the mandate to examine and audit all government instrumentalities and investment of public funds.[7]The COA Decision sets forth the undisputed facts of this case as follows:xxx [O]n February 20, 1980, the Development Bank of the Philippines (DBP) Board of Governors adopted Resolution No. 794 creating the DBP Gratuity Plan and authorizing the setting up of aretirement fund to cover the benefits due to DBP retiring officials and employees under Commonwealth Act No. 186, as amended.The Gratuity Plan was made effective on June 17, 1967 and covered all employees of the Bank as of May 31, 1977.On February 26, 1980, a Trust Indenture was entered into by and between the DBP and the Board of Trustees of the Gratuity Plan Fund, vesting in the latter the control and administration of the Fund.The trustee, subsequently, appointed the DBP Trust Services Department (DBP-TSD) as the investment manager thru an Investment Management Agreement, with the end in view of making the income and principal of the Fund sufficient to meet the liabilities of DBP under the Gratuity Plan.In 1983, the Bank established a Special Loan Program availed thru the facilities of the DBP Provident Fund and funded by placements from the Gratuity Plan Fund.This Special Loan Program was adopted as part of the benefit program of the Bank to provide financial assistance to qualified members to enhance and protect the value of their gratuity benefits because Philippine retirement laws and the Gratuity Plan do not allow partial payment of retirement benefits.The program was suspended in 1986 but was revived in 1991 thru DBP Board Resolution No. 066 dated January 5, 1991.Under the Special Loan Program, a prospective retiree is allowed the option to utilize in the form of a loan a portion of his outstanding equity in the gratuity fund and to invest it in a profitable investment or undertaking.The earnings of the investment shall then be applied to pay for the interest due on the gratuity loan which was initially set at 9% per annum subject to the minimum investment rate resulting from the updated actuarial study.The excess or balance of the interest earnings shall then be distributed to the investor-members.Pursuant to the investment scheme, DBP-TSD paid to the investor-members a total ofP11,626,414.25 representing the net earnings of the investments for the years 1991 and 1992.The payments were disallowed by the Auditor under Audit Observation Memorandum No. 93-2 dated March 1, 1993, on the ground that the distribution of income of the Gratuity Plan Fund (GPF) to future retirees of DBP is irregular and constituted the use of public funds for private purposes which is specifically proscribed under Section 4 of P.D. 1445.[8]AOM No. 93-2 did not question the authority of the Bank to set-up the [Gratuity Plan] Fund and have it invested in the Trust Services Department of the Bank.[9]Apart from requiring the recipients of theP11,626,414.25 to refund their dividends, the Auditor recommended that the DBP record in its books as miscellaneous income the income of the Gratuity Plan Fund (Fund).The Auditor reasoned that the Fund is still owned by the Bank, the Board of Trustees is a mere administrator of the Fund in the same way that the Trust Services Department where the fund was invested was a mere investor and neither can the employees, who have still an inchoate interest [i]n the Fund be considered as rightful owner of the Fund.[10]In a letter dated 29 July 1996,[11]former DBP Chairman Alfredo C. Antonio requested then COA Chairman Celso D. Gangan to reconsider AOM No. 93-2.Chairman Antonio alleged that the express trust created for the benefit of qualified DBP employees under the Trust Agreement[12](Agreement) dated 26 February 1980 gave the Fund a separate legal personality.The Agreement transferred legal title over the Fund to the Board of Trustees and all earnings of the Fund accrue only to the Fund.Thus, Chairman Antonio contended that the income of the Fund is not the income of DBP.Chairman Antonio also asked COA to lift the disallowance of theP11,626,414.25 distributed as dividends under the SLP on the ground that the latter was simply a normal loan transaction.He compared the SLP to loans granted by other gratuity and retirement funds, like the GSIS, SSS and DBP Provident Fund.The Ruling of the Commission on AuditOn 6 October 1998, the COAen bancaffirmed AOM No. 93-2, as follows:The Gratuity Plan Fund is supposed to be accorded separate personality under the administration of the Board of Trustees but that concept has been effectively eliminated when the Special Loan Program was adopted. xxxThe Special Loan Program earns for the GPF an interest of 9% per annum, subject to adjustment after actuarial valuation.The investment scheme managed by the TSD accumulated more than that as evidenced by the payment ofP4,568,971.84 in 1991 andP7,057,442,41 in 1992, to the member-borrowers.In effect, the program is grossly disadvantageous to the government because it deprived the GPF of higher investment earnings by the unwarranted entanglement of its resources under the loan program in the guise of giving financial assistance to the availing employees. xxxRetirement benefits may only be availed of upon retirement.It can only be demanded and enjoyed when the employee shall have met the last requisite, that is, actual retirement under the Gratuity Plan.During employment, the prospective retiree shall only have an inchoate right over the benefits.There can be no partial payment or enjoyment of the benefits, in whatever guise, before actual retirement.xxxPREMISES CONSIDERED, the instant request for reconsideration of the disallowance amounting toP11,626,414.25 has to be, as it is hereby, denied.[13]In its Resolution of 1 August 2000, the COA also denied DBPs second motion for reconsideration.Citing the Courts ruling inConte v. COA,[14]the COAconcluded thatthe SLP was actually a supplementary retirement benefit in the guise of financial assistance, thus:At any rate, the Special Loan Program is not just an ordinary and regular transaction of the Gratuity Plan Fund, as the Bank innocently represents. xxx It is a systematic investment mix conveniently implemented in a special loan program with the least participation of the beneficiaries, by merely filing an application and then wait for the distribution of net earnings.The real objective, of course, is to give financial assistance to augment the value of the gratuity benefits, and this has the same effect as the proscribed supplementary pension/retirement plan under Section 28 (b) of C(ommonwealth) A(ct) 186.This Commission may now draw authority from the case ofConte, et al. v. Commission on Audit(264 SCRA 19 [1996]) where the Supreme Court declared that financial assistance granted to retiring employees constitute supplementary retirement or pension benefits.It was there stated:xxxSaid Sec. 28 (b) as amended by R.A. 4968 in no uncertain terms bars the creation of any insurance or retirement plan other than the GSIS for government officers and employees, in order to prevent the undue and iniquitous proliferation of such plans.It is beyond cavil that Res. 56 contravenes the said provision of law and is therefore, invalid, void and of no effect.To ignore this and rule otherwise would be tantamount to permitting every other government office or agency to put up its own supplementary retirement benefit plan under the guise of such financial assistance.[15]Hence, the instant petition filed by DBP.The IssuesThe DBP invokes justice and equity on behalf of its employees because of prevailing economic conditions.The DBP reiterates that the income of the Fund should be treated and recorded as separate from the income of DBP itself, and charges that COA committed grave abuse of discretion:1.IN CONCLUDING THAT THE ADOPTION OF THE SPECIAL LOAN PROGRAM CONSTITUTES A CIRCUMVENTION OF PHILIPPINE RETIREMENT LAWS;2.IN CONCLUDING THAT THE SPECIAL LOAN PROGRAM IS GROSSLY DISADVANTAGEOUS TO THE GOVERNMENT;3.IN CONCLUDING THAT THE SPECIAL LOAN PROGRAM CONSTITUTES A SUPPLEMENTARY RETIREMENT BENEFIT.[16]The Office of the Solicitor General (OSG), arguing on behalf of the COA, questions the standing of the DBP to file the instant petition.The OSG claims that the trustees of the Fund or the DBP employees themselves should pursue thiscertiorariproceeding since they would be the ones to return the dividends and not DBP.The central issues for resolution are:(1) whether DBP has the requisite standing to file the instant petition forcertiorari; (2) whether the income of the Fund is income of DBP; and (3) whether the distribution of dividends under the SLP is valid.The Ruling of the CourtThe petition is partly meritorious.The standing of DBP to file this petition for certiorariAs DBP correctly argued, the COAen bancimplicitly recognized DBPs standing when it ruled on DBPs request for reconsideration from AOM No. 93-2 and motion for reconsideration from the Decision of 6 October 1998.The supposed lack of standing of the DBP was not even an issue in the COA Decision or in the Resolution of 1 August 2000.The OSG nevertheless contends that the DBP cannot question the decisions of the COAen bancsince DBP is a government instrumentality.Citing Section 2, Article IX-D of the Constitution,[17]the OSG argued that:Petitioner may ask the lifting of the disallowance by COA, since COA had not yet made a definitive and final ruling on the matter in issue.But after COA denied with finality the motion for reconsideration of petitioner, petitioner, being a government instrumentality, should accept COAs ruling and leave the matter of questioning COAs decision with the concerned investor-members.[18]These arguments do not persuade us.Section 2, Article IX-D of the Constitution does not bar government instrumentalities from questioning decisions of the COA.Government agencies and government-owned and controlled corporations have long resorted to petitions forcertiorarito question rulings of the COA.[19]These government entities filed their petitions with this Court pursuant to Section 7, Article IX of the Constitution, which mandates that aggrieved parties may bring decisions of the COA to the Court oncertiorari.[20]Likewise, the Government Auditing Code expressly provides that a government agency aggrieved by a COA decision, order or ruling may raisethe controversy to the Supreme Court oncertiorariin the manner provided by law and the Rules of Court.[21]Rule 64 of the Rules of Court now embodies this procedure, to wit:SEC 2.Mode of review. A judgment or final order or resolution of the Commission on Elections and the Commission on Audit may be brought by the aggrieved party to the Supreme Court oncertiorariunder Rule 65, except as hereinafter provided.The novel theory advanced by the OSG would necessarily require persons not parties to the present case the DBP employees who are members of the Plan or the trustees of the Fund to avail ofcertiorariunder Rule 65.The petition forcertiorariunder Rule 65, however, is not available to any person who feels injured by the decision of a tribunal, board or officer exercising judicial or quasi-judicial functions.The person aggrieved under Section 1 of Rule 65 who can avail of the special civil action ofcertioraripertains only to one who was a party in the proceedings before the courta quo,[22]or in this case, before the COA.To hold otherwise would open the courts to numerous and endless litigations.[23]Since DBP was the sole party in the proceedings before the COA, DBP is the proper party to avail of the remedy ofcertiorari.The real party in interest who stands to benefit or suffer from the judgment in the suit must prosecute or defend an action.[24]We have held that interest means material interest, an interest in issue that the decision will affect, as distinguished from mere interest in the question involved, or a mere incidental interest.[25]As a party to the Agreement and a trustor of the Fund, DBP has a material interest in the implementation of the Agreement, and in the operation of the Gratuity Plan and the Fund as prescribed in the Agreement.The DBP also possesses a real interest in upholding the legitimacy of the policies and programs approved by its Board of Directors for the benefit of DBP employees.This includes the SLP and its implementing rules, which the DBP Board of Directors confirmed.

The income of the Gratuity Plan FundThe COA alleges that DBP is the actual owner of the Fund and its income, on the following grounds: (1) DBP made the contributions to the Fund; (2) the trustees of the Fund are merely administrators; and (3) DBP employees only have an inchoate right to the Fund.The DBP counters that the Fund is the subject of a trust, and that the Agreement transferred legal title over the Fund to the trustees.The income of the Fund does not accrue to DBP. Thus, such income should not be recorded in DBPs books of account.[26]A trust is a fiduciary relationship with respect to property which involves the existence of equitable duties imposed upon the holder of the title to the property to deal with it for the benefit of another.[27]A trust is either express or implied.Express trusts are those which the direct and positive acts of the parties create, by some writing or deed, or will, or by words evincing an intention to create a trust.[28]In the present case, the DBP Board of Governors (now Board of Directors) Resolution No. 794 and the Agreement executed by former DBP Chairman Rafael Sison and the trustees of the Plan created an express trust, specifically, an employees trust.An employees trust is a trust maintained by an employer to provide retirement, pension or other benefits to its employees.[29]It is a separate taxable entity[30]established for the exclusive benefit of the employees.[31]Resolution No. 794 shows that DBP intended to establish a trust fund to cover the retirement benefits of certain employees under Republic Act No. 1616[32](RA 1616).The principal and income of the Fund would be separate and distinct from the funds of DBP.We quote the salient portions of Resolution No. 794, as follows:2.Trust Agreement designed for in-house trustees of three (3) to be appointed by the Board of Governors and vested with control and administration of the funds appropriated annually by the Board to be invested in selective investments so thatthe income and principal of said contributions would be sufficient to meet the required payments of benefits as officials and employees of the Bank retire under the Gratuity Plan; xxxThe proposed funding of the gratuity plan has decided advantages on the part of the Bank over the present procedure, where the Bank provides payment only when an employee retires or on pay as you go basis:1.It is a definite written program, permanent and continuing whereby theBank provides contributions to a separate trust fund, which shall be exclusively used to meet its liabilities to retiring officials and employees; and2.Since the gratuity plan will be tax qualified under the National Internal Revenue Code and RA 4917, the Banks periodic contributions thereto shall be deductible for tax purposes and the earnings therefrom tax free.[33](Emphasis supplied)In a trust,one person has an equitable ownership in the property while another person owns 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.[34]A person who establishes a trust is the trustor.One in whom confidence is reposed as regards property for the benefit of another is the trustee.The person for whose benefit the trust is created is the beneficiary.[35]In the present case, DBP, as the trustor, vested in the trustees of the Fund legal title over the Fund as well as control over the investment of the money and assets of the Fund.The powers and duties granted to the trustees of the Fund under the Agreement were plainly more than just administrative, to wit:1.TheBANK hereby vests the control and administration of the Fund in the TRUSTEESfor the accomplishment of the purposes for which said Fund is intended in defraying the benefits of the PLAN in accordance with its provisions, and the TRUSTEES hereby accept the trust xxx2.TheTRUSTEES shall receive and hold legal title to the money and/or property comprising the Fund,and shall hold the same in trust for its beneficiaries, in accordance with, and for the uses and purposes stated in the provisions of the PLAN.3.Without in any sense limiting the general powers of management and administration given to TRUSTEES by our laws and as supplementary thereto, the TRUSTEES shall manage, administer, and maintain the Fund with full power and authority:xxxb.Toinvest and reinvest at any time all or any part of the Fundin any real estate (situated within the Philippines), housing project, stocks, bonds, mortgages, notes, other securities or property which the said TRUSTEES may deem safe and proper, andto collect and receive all income and profitsexisting therefrom;c.To keep and maintain accurate books of account and/or records of the Fund xxx.d.To pay all costs, expenses, and charges incurred in connection with the administration, preservation, maintenance and protection of the Fund xxx to employ or appoint such agents or employees xxx.e.To promulgate, from time to time, such rules not inconsistent with the conditions of this Agreement xxx.f.Todo all acts which, in their judgment, are needful or desirable for the proper and advantageous control and management of the Fundxxx.[36](Emphasis supplied)Clearly, the trustees received and collected any income and profit derived from the Fund, and they maintained separate books of account for this purpose.The principal and income of the Fund will not revert to DBP even if the trust is subsequently modified or terminated.The Agreement states that the principal and income must be used to satisfy all of the liabilities to the beneficiary officials and employees under the Gratuity Plan, as follows:5.The BANK reserves the right at any time and from time to time (1) to modify or amend in whole or in part by written directions to the TRUSTEES, any and all of the provisions of this Trust Agreement, or (2) to terminate this Trust Agreement upon thirty (30) days prior notice in writing to the TRUSTEES; provided, however, that no modification or amendment which affects the rights, duties, or responsibilities of the TRUSTEES may be made without the TRUSTEES consent; and provided, thatsuch termination, modification, or amendment prior to the satisfaction of all liabilities with respect to eligible employees and their beneficiaries, does not permit any part of the corpus or income of the Fund to be used for, or diverted to, purposes other than for the exclusive benefit of eligible employees and workers as provided for in the PLAN.In the event of termination of this Trust Agreement, all cash, securities, and other property then constituting the Fund less any amounts constituting accrued benefits to the eligible employees, charges and expenses payable from the Fund, shall be paid over or delivered by the TRUSTEES to the members in proportion to their accrued benefits.[37](Emphasis supplied)The resumption of the SLP did not eliminate the trust or terminate the transfer of legal title to the Funds trustees.The records show that the Funds Board of Trustees approved the SLP upon the request of the DBP Career Officials Association.[38]The DBP Board of Directors only confirmed the approval of the SLP by the Funds trustees.The beneficiaries orcestui que trustof the Fund are the DBP officials and employees who will retire under Commonwealth Act No. 186[39](CA 186), as amended by RA 1616.RA 1616 requires the employer agency or government instrumentality to pay for the retirement gratuity of its employees who rendered service for the required number of years.[40]The Government Service Insurance System Act of 1997[41]still allows retirement under RA 1616 for certain employees.As COA correctly observed, the right of the employees to claim their gratuities from the Fund is still inchoate.RA 1616 does not allow employees to receive their gratuities until they retire.However, this does not invalidate the trust created by DBP or the concomitant transfer of legal title to the trustees.As far back as inGovernment v. Abadilla,[42]the Court held that it is not always necessary that thecestui que trustshould be named, or even bein esseat the time the trust is created in his favor. It is enough that the beneficiaries are sufficiently certain or identifiable.[43]In this case, the GSIS Act of 1997 extended the option to retire under RA 1616 only to employees who had entered government service before 1 June 1977.[44]The DBP employees who were in the service before this date are easily identifiable.As of the time DBP filed the instant petition, DBP estimated that 530 of its employees could still retire under RA 1616.At least 60 DBP employees had already received their gratuities under the Fund.[45]The Agreement indisputably transferred legal title over the income and properties of the Fund to the Funds trustees.Thus, COAs directive to record the income of the Fund in DBPs books of account as the miscellaneous income of DBP constitutes grave abuse of discretion.The income of the Fund does not form part of the revenues or profits of DBP, and DBP may not use such income for its own benefit.The principal and income of the Fund together constitute theresor subject matter of the trust.The Agreement established the Fund precisely so that it would eventually be sufficient to pay for the retirement benefits of DBP employees under RA 1616 without additional outlay from DBP.COA itself acknowledged the authority of DBP to set up the Fund.However, COAs subsequent directive would divest the Fund of income, and defeat the purpose for the Funds creation.The validity of the Special Loan Programand the disallowance ofP11,626,414.25In disallowing theP11,626,414.25 distributed as dividends under the SLP, the COA relied primarily on Republic Act No. 4968 (RA 4968) which took effect on 17 June 1967.RA 4968 added the following paragraph to Section 28 of CA 186, thus:(b)Hereafter no insurance or retirement plan for officers or employees shall be created by any employer.All supplementary retirement or pension plans heretofore in force in any government office, agency, or instrumentality or corporation owned or controlled by the government, are hereby declared inoperative or abolished:Provided,That the rights of those who are already eligible to retire thereunder shall not be affected.Even assuming, however, that the SLP constitutes a supplementary retirement plan, RA 4968 does not apply to the case at bar.The DBP Charter, which took effect on 14 February 1986, expressly authorizes supplementary retirement plans adopted by and effective in DBP, thus:SEC. 34.Separation Benefits.All those who shall retirefrom the service or are separated therefrom on account of the reorganization of the Bank under the provisions of this Chartershall be entitled to all gratuities and benefits provided for under existing laws and/or supplementary retirement plans adopted by and effective in the Bank: Provided, that any separation benefits and incentives which may be granted by the Bank subsequent to June 1, 1986, which may be in addition to those provided under existing laws and previous retirement programs of the Bank prior to the said date, for those personnel referred to in this section shall be funded by the National Government; Provided, further, that, any supplementary retirement plan adopted by the Bank after the effectivity of this Chapter shall require the prior approval of the Minister of Finance.xxx.SEC. 37.Repealing Clause. All acts, executive orders, administrative orders, proclamations, rules and regulations or parts thereof inconsistent with any of the provisions of this charter are hereby repealed or modified accordingly.[46](Emphasis supplied)Being aspecial and later law, the DBP Charter[47]prevails over RA 4968.The DBP originally adopted the SLP in 1983.The Court cannot strike down the SLP now based on RA 4968 in view of the subsequent DBP Charter authorizing the SLP.Nevertheless, the Court upholds the COAs disallowance of theP11,626,414.25 in dividends distributed under the SLP.According to DBP Board Resolution No. 0036 dated 25 January 1991, the SLP allows a prospective retiree to utilize in the form of a loan, a portion of their outstanding equity in the Gratuity Plan Fund and to invest [the] proceeds in a profitable investment or undertaking.[48]The basis of the loanable amount was an employees gratuity fund credit,[49]that is to say, what an employee would receive if he retired at the time he availed of the loan.In his letter dated 26 October 1983 proposing the confirmation of the SLP, then DBP Chairman Cesar B. Zalamea stated that:The primary objective of this proposal therefore is to counteract the unavoidable decrease in the value of the said retirement benefits through the following scheme:I.To allow a prospective retiree the option to utilize in the form of a loan, a portion of his standing equity in the Gratuity Fundand to invest it in a profitable investment or undertaking.The income or appreciation in value will be for his own account and should provide him the desired hedge against inflation or erosion in the value of the peso.This is being proposed sincePhilippine retirement laws and the Gratuity Plan do not allowpartial paymentof retirement benefits, even the portion already earned, ahead of actual retirement.[50](Emphasis supplied)As Chairman Zalamea himself noted, neither the Gratuity Plan nor our laws on retirement allow the partial payment of retirement benefits ahead of actual retirement.It appears that DBP sought to circumvent these restrictions through the SLP, which released a portion of an employees retirement benefits to him in the form of a loan.Certainly, the DBP did this for laudable reasons, to address the concerns of DBP employees on the devaluation of their retirement benefits.The remaining question is whether RA 1616 and the Gratuity Plan allow this scheme.We rule that it is not allowed.The right to retirement benefits accrues only upon certain prerequisites.First, the conditions imposed by the applicable lawin this case, RA 1616 must be fulfilled.[51]Second, there must be actual retirement.[52]Retirement means there is a bilateral act of the parties, a voluntary agreement between the employer and the employees whereby the latter after reaching a certain age agrees and/or consents tosevere his employmentwith the former.[53]Severance of employment is a conditionsine qua nonfor the release of retirement benefits. Retirement benefits are not meant to recompense employees who are still in the employ of the government.That is the function of salaries and other emoluments.[54]Retirement benefits are in the nature of a reward granted by the State to a government employee who has given the best years of his life to the service of his country.[55]The Gratuity Plan likewise provides that the gratuity benefit of a qualified DBP employee shall only be released upon retirement under th(e) Plan.[56]As the COA correctly pointed out, this means that retirement benefits can only be demanded and enjoyed when the employee shall have met the last requisite, that is, actual retirement under the Gratuity Plan.[57]There was thusno basisfor the loans granted to DBP employees under the SLP.The rights of the recipient DBP employees to their retirement gratuities were still inchoate, if not a mere expectancy, when they availed of the SLP.No portion of their retirement benefits could be considered as actually earned or outstanding before retirement.Prior to retirement, an employee who has served the requisite number of years is only eligible for, but not yet entitled to, retirement benefits.The DBP contends that the SLP is merely a normal loan transaction, akin to the loans granted by the GSIS, SSS and the DBP Provident Fund.The records show otherwise.In a loan transaction ormutuum, the borrower or debtor acquires ownership of the amount borrowed.[58]As the owner, the debtor is then free to dispose of or to utilize the sum he loaned,[59]subject to the condition that he should later return the amount with the stipulated interest to the creditor.[60]In contrast, the amount borrowed by a qualified employee under the SLP was not even released to him.The implementing rules of the SLP state that:The loan shall be availablestrictly for the purpose of investment in the following investment instruments:a.182 or 364-day term Time deposits with DBPb.182 or 364-day T-bills /CB Billsc.182 or 364-day term DBP Blue Chip FundTheinvestment shall be registered in the name of DBP-TSDin trust for availee-investor for his sole risk and account.Choice of eligible terms shall be at the option of availee-investor.Investments shall be commingled by TSDand Participation Certificates shall be issued to each availee-investor.xxxIV.LOANABLE TERMSxxxe.Allowable Investment Instruments Time Deposit DBP T-Bills/CB Bills and DBP Blue Chip Fund.TSD shall purchase new securities and/orallocate existing securities portfolio of GPFdepending on liquidity position of the Fund xxx.xxxg.Security The loan shall be secured by GS, Certificate of Time Deposit and/or BCF Certificate of Participation which shall be registered in the name of DBP-TSD in trust for name of availee-investor and shall be surrendered to the TSD for safekeeping.[61](Emphasis supplied)In the present case, the Fund allowed the debtor-employee to borrow a portion of his gratuity fund creditsolelyfor the purpose of investing it in certain instruments specified by DBP.The debtor-employee could not dispose of or utilize the loan in any other way.These instruments were, incidentally, some of the same securities where the Fund placed its investments.At the same time the Fund obligated the debtor-employee to assign immediately his loan to DBP-TSD so that the amount could be commingled with the loans of other employees.The DBP-TSD the same department which handled and had custody of the Funds accounts then purchased orre-allocatedexisting securitiesin the portfolio of the Fund to correspond to the employees loans.Simply put, the amount ostensibly loaned from the Fund stayed in the Fund, and remained under the control and custody of the DBP-TSD.The debtor-employee never had any control or custody over the amount he supposedly borrowed.However, DBP-TSD listed new or existing investments of the Fund corresponding to the loan in the name of the debtor-employee, so that the latter could collect the interest earned from the investments.In sum, the SLP enabled certain DBP employees to utilize and even earn from their retirement gratuities even before they retired.This constitutes a partial release of their retirement benefits, which is contrary to RA 1616 and the Gratuity Plan.As we have discussed, the latter authorizes the release of gratuities from the earnings and principal of the Fund only upon retirement.The Gratuity Plan will lose its tax-exempt status if the retirement benefits are released prior to the retirement of the employees.The trust funds of employees other than those of private employers are qualified for certain tax exemptions pursuant to Section 60(B) formerly Section 53(b) of the National Internal Revenue Code.[62]Section 60(B) provides:Section 60.Imposition of Tax. (A)Application of Tax. The tax imposed by this Title upon individuals shall apply to the income of estates or of any kind of property held in trust, including:xxx(B)Exception. The tax imposed by this Title shall not apply to employees trust which forms part of a pension, stock bonus or profit-sharing plan of an employer for the benefit of some or all of his employees (1) if contributions are made to the trust by such employer, or employees, or both for thepurpose of distributing to such employees the earnings and principal of the fund accumulated by the trustin accordance with such plan, and (2) if under the trust instrument it is impossible, at any time prior to the satisfaction of all liabilities with respect to employees under the trust, for any part of the corpus or income to be (within the taxable year or thereafter) used for, or diverted to, purposes other than for the exclusive benefit of his employees: xxx (Emphasis supplied)The Gratuity Plan provides that the gratuity benefits of a qualified DBP employee shall be released only upon retirement under th(e) Plan. If the earnings and principal of the Fund are distributed to DBP employees prior to their retirement, the Gratuity Plan will no longer qualify for exemption under Section 60(B).To recall, DBP Resolution No. 794 creating the Gratuity Plan expressly provides that since the gratuity plan will be tax qualified under the National Internal Revenue Code xxx, the Banks periodic contributions thereto shall be deductible for tax purposes and the earnings therefrom tax free. If DBP insists that its employees may receive theP11,626,414.25 dividends, the necessary consequence will be the non-qualification of the Gratuity Plan as a tax-exempt plan.Finally, DBP invokes justice and equity on behalf of its affected employees.Equity cannot supplant or contravene the law.[63]Further, as evidenced by the letter of former DBP Chairman Zalamea, the DBP Board of Directors was well aware of the proscription against the partial release of retirement benefits when it confirmed the SLP.If DBP wants to enhance and protect the value of xxx(the) gratuity benefits of its employees, DBP must do so by investing the money of the Fund in the proper and sound investments, and not by circumventing restrictions imposed by law and the Gratuity Plan itself.We nevertheless urge the DBP and COA to provide equitable terms and a sufficient period within which the affected DBP employees may refund the dividends they received under the SLP.Since most of the DBP employees were eligible to retire within a few years when they availed of the SLP, the refunds may be deducted from their retirement benefits, at least for those who have not received their retirement benefits.WHEREFORE, COA Decision No. 98-403 dated 6 October 1998 and COA Resolution No. 2000-212 dated 1 August 2000 areAFFIRMEDwithMODIFICATION.The income of the Gratuity Plan Fund, held in trust for the benefit of DBP employees eligible to retire under RA 1616, should not be recorded in the books of account of DBP as the income of the latter.SO ORDERED.PERFECTO MACABABBAD, Jr.,*deceased, substituted by his heirs Sophia Macababbad,Glenn M. Macababbad, Perfecto Vener M. Macababbad III and Mary Grace Macababbad,and SPS. CHUA SENG LIN AND SAY UN AY,petitionersvs.FERNANDO G. MASIRAG, FAUSTINA G. MASIRAG, CORAZON G. MASIRAG,LEONOR G. MASIRAG, and LEONCIO M. GOYAGOY,respondentFRANCISCA MASIRAG BACCAY, PURA MASIRAG FERRER-MELAD, AND SANTIAGO MASIRAG,Intervenors- Respondents.D E C I S I O NBRION,J.:Before us is the Petition for Review onCertiorarifiled by Perfecto Macababbad, Jr.1(Macababbad) and the spouses Chua Seng Lin (Chua) and Say Un Ay (Say) (collectively called thepetitioners), praying that we nullify the Decision2of the Court of Appeals (CA) and the Resolution3denying the motion for reconsideration that followed. The assailed decision reversed the dismissal Order4of the Regional Trial Court (RTC), Branch 4, Tuguegarao City, Cagayan, remanding the case for further trial.BACKGROUNDOn April 28, 1999, respondents Fernando Masirag (Fernando), Faustina Masirag (Faustina), Corazon Masirag (Corazon), Leonor Masirag (Leonor) and Leoncio Masirag Goyagoy (Leoncio) (collectively called therespondents), filed with the RTC a complaint5against Macababbad, Chua and Say.6On May 10, 1999, they amended their complaint to allege new matters.7The respondents alleged that their complaint is an action for:quieting of title, nullity of titles, reconveyance, damages and attorneys fees8against the defendants[petitioners here] x x xwho cabal themselves in mala fides of badges of fraud dishonesty, deceit, misrepresentations, bad faith, under the guise of purported instrument, nomenclature EXTRA-JUDICIAL SETTLEMENT WITH SIMULTANEOUS SALE OF PORTION OF REGISTERED LAND (Lot 4144), dated December 3, 1967, a falsification defined and penalized under Art. 172 in relation to Art. 171, Revised Penal Code, by causing it to appear that persons (the plaintiffs herein[the respondents in this case])have participated in any act or proceeding when they (the plaintiffs herein [the respondents in this case]) did not in fact so participate in the EXTRA-JUDICIAL SETTLEMENT WITH SIMULTANEOUS SALE OF PORTION OF REGISTERED LAND (Lot 4144 covered by Original Certificate of Title No. 1946)[sic].9The amended complaint essentially alleged the following:10The deceased spouses Pedro Masirag (Pedro) and Pantaleona Tulauan (Pantaleona) were the original registered owners of Lot No. 4144 of the Cadastral Survey of Tuguegarao (Lot No. 4144), as evidenced by Original Certificate of Title (OCT) No. 1946.11Lot No. 4144 contained an area of 6,423 square meters.Pedro and Pantaleona had eight (8) children, namely, Valeriano, Domingo, Pablo, Victoria, Vicenta, Inicio, Maxima and Maria. Respondents Fernando, Faustina, Corazon and Leonor Masirag are the children of Valeriano and Alfora Goyagoy, while Leoncio is the son of Vicenta and Braulio Goyagoy. The respondents allegedly did not know of the demise of their respective parents; they only learned of the inheritance due from their parents in the first week of March 1999 when their relative, Pilar Quinto, informed respondent Fernando and his wife Barbara Balisi about it. They immediately hired a lawyer to investigate the matter.The investigation disclosed that the petitioners falsified a document entitled Extra-judicial Settlement with Simultaneous Sale of Portion of Registered Land (Lot 4144) dated December 3, 196712(hereinafter referred to as theextrajudicial settlement of estate and sale) so that the respondents were deprived of their shares in Lot No. 4144. The document purportedly bore the respondents signatures, making them appear to have participated in the execution of the document when they did not; they did not even know the petitioners. The document ostensibly conveyed the subject property to Macababbad for the sum of P1,800.00.13Subsequently, OCT No. 1946 was cancelled and Lot No. 4144 was registered in the names of its new owners under Transfer Certificate of Title (TCT) No. 13408,14presumably after the death of Pedro and Pantaleona. However, despite the supposed sale to Macababbad, his name did not appear on the face of TCT No. 13408.15Despite his exclusion from TCT No. 13408, his Petition for another owners duplicate copy of TCT No. 13408, filed in the Court of First Instance of Cagayan, was granted on July 27, 1982.16Subsequently, Macababbad registered portions of Lot No. 4144 in his name and sold other portions to third parties.17On May 18, 1972, Chua filed a petition for the cancellation of TCT No. T-13408 and the issuance of a title evidencing his ownership over a subdivided portion of Lot No. 4144 covering 803.50 square meters. On May 23, 1972, TCT No. T-18403 was issued in his name.18Based on these allegations, the respondents asked: (1) that the extrajudicial settlement of estate and sale be declared null and voidab initioand without force and effect, and that Chua be ordered and directed to execute the necessary deed of reconveyance of the land; if they refuse, that the Clerk of Court be required to do so; (2) the issuance of a new TCT in respondents name and the cancellation of Macababbads and Chuas certificates of title; and (3) that the petitioners be ordered to pay damages and attorneys fees.Macababbad filed a motion to dismiss the amended complaint on July 14, 1999, while Chua and Say filed an Appearance with Motion to Dismiss on September 28, 1999.On December 14, 1999, the RTC granted the motion of Francisca Masirag Baccay, Pura Masirag Ferrer-Melad, and Santiago Masirag for leave to intervene and to admit their complaint-in-intervention. The motion alleged that they have common inheritance rights with the respondents over the disputed property.THE RTC RULINGThe RTC, after initially denying the motion to dismiss, reconsidered its ruling anddismissed the complaintin its Order19dated May 29, 2000on the grounds that: 1) the action, which was filed 32 years after the property was partitioned and after a portion was sold to Macababbad, had already prescribed; and 2) there was failure to implead indispensable parties, namely, the other heirs of Pedro and Pantaleona and the persons who have already acquired title to portions of the subject property in good faith.20The respondents appealed the RTCs order dated May 29, 2000 to the CA on the following grounds:ITHE COURT A QUO ERRED IN DISMISSING THE CASEIITHE COURT A QUO ERRED IN INTERPRETING THE NATURE OF APPELLANTS CAUSE OF ACTION AS THAT DESIGNATED IN THE COMPLAINTS TITLE AND NOT IN (SIC) THE ALLEGATIONS IN THE COMPLAINT21The petitioners moved to dismiss the appeal primarily on the ground that the errors the respondents raised involved pure questions of law that should be brought before the Supreme Courtviaa petition for review oncertiorariunder Rule 45 of the Rules of Court. The respondents insisted that their appeal involved mixed questions of fact and law and thus fell within the purview of the CAs appellate jurisdiction.THE CA DECISION22The CA ignored23the jurisdictional issue raised by the petitioners in their motion to dismiss, took cognizance of the appeal, and focused on the following issues:1) whether the complaint stated a cause of action; and 2) whether the cause of action had been waived, abandoned or extinguished.The appellate court reversed and set aside the RTCs dismissal of the complaint.On thefirstissue, it ruled that the complaintcarve(d) out a sufficient and adequate cause of action xxx. One can read through the verbosity of the initiatory pleading to discern that a fraud was committed by the defendants on certain heirs of the original owners of the property and that, as a result, the plaintiffs were deprived of interests that should have gone to them as successors-in-interest of these parties. A positive deception has been alleged to violate legal rights. This is the ultimate essential fact that remains after all the clutter is removed from the pleading. Directed against the defendants, there is enough to support a definitive adjudication.24On thesecondissue, the CA applied the Civil Code provision on implied trust,i.e.,that a person who acquires a piece of property through fraud is considered a trustee of an implied trust for the benefit of the person from whom the property came. Reconciling this legal provision with Article 1409 (which defines void contracts) and Article 1410 (which provides that an action to declare a contract null and void is imprescriptible), the CA ruled that the respondents cause of action had not prescribed, becausein assailing the extrajudicial partition as void, the [respondents] have the right to bring the action unfettered by a prescriptive period.25THE PETITION FOR REVIEW ONCERTIORARIThe Third Division of this Court initially denied26the petition for review oncertiorarifor the petitioners failure to show any reversible error committed by the CA. However, it subsequently reinstated the petition. In their motion for reconsideration, the petitioners clarified the grounds for their petition, as follows:A. THE HONORABLE COURT OF APPEALS DID NOT HAVE JURISDICTION TO PASS UPON AND RULE ON THE APPEAL TAKEN BY THE RESPONDENTS IN CA-GR CV NO. 68541.27In the alternative, ex abundanti cautela, the petitioners alleged other reversible errors summarized as follows:28 The RTC dismissal on the ground that indispensable parties were not impleaded has already become final and executory because the CA did not pass upon this ground;29 The respondents' argument that there was no failure to implead indispensable parties since the other heirs of Pedro and Pantaleona who were not impleaded were not indispensable parties in light of the respondents' admission that the extra-judicial settlement is valid with respect to the other heirs who sold their shares to Perfecto Macababbad is erroneous because innocent purchasers for value of portions of Lot 4144 who are also indispensable parties were not impleaded;30 The CA erred in reconciling Civil Code provisions Article 1456 and Article 1410, in relation to Article 1409;31 The CA erred in saying that the Extra-judicial Partition was an inexistent and void contract because it could not be said that none of the heirs intended to be bound by the contract.32The respondents argued in their Comment that:33 The appeal was brought on mixed questions of fact and law involving prescription, laches and indispensable parties; The non-inclusion of indispensable parties is not a ground to dismiss the claim The respondents action is not for reconveyance. Rather, it is an action to declare the sale of their respective shares null and void; An action for the nullity of an instrument prescribes in four (4) years from discovery of the fraud. Discovery was made in 1999, while the complaint was also lodged in 1999. Hence, the action had not yet been barred by prescription; Lacheshad not set in because the action was immediately filed after discovery of the fraud.OUR RULINGWe find the petition devoid of merit.Questions of Fact v. Questions of LawA question of law arises when there is doubt as to what the law is on a certain state of facts while there is a question of fact when the doubt arises as to the truth or falsity of the alleged facts.34A question of law may be resolved by the court without reviewing or evaluating the evidence.35No examination of the probative value of the evidence would be necessary to resolve a question of law.36The opposite is true with respect to questions of fact, which necessitate a calibration of the evidence.37The nature of the issues to be raised on appeal can be gleaned from the appellants notice of appeal filed in the trial court and in his or her brief as appellant in the appellate court.38In their Notice of Appeal, the respondents manifested their intention to appeal the assailed RTC order on legal grounds andon the basis of the environmental facts.39Further, in their Brief, the petitioners argued that the RTC erred in ruling that their cause of action had prescribed and that they had slept on their rights.40All these indicate that questions of facts were involved, or were at least raised, in the respondents appeal with the CA.InCrisostomo v. Garcia,41this Court ruled that prescription may either be a question of law or fact; it is a question of fact when the doubt or difference arises as to the truth or falsity of an allegation of fact; it is a question of law when there is doubt or controversy as to what the law is on a given state of facts. The test of whether a question is one of law or fact is not the appellation given to the question by the party raising the issue; the test is whether the appellate court can determine the issue raised without reviewing or evaluating the evidence. Prescription, evidently, is a question of fact where there is a need to determine the veracity of factual matters such as the date when the period to bring the action commenced to run.42Ingjug-Tiro v. Casals,43instructively tells us too that a summary or outright dismissal of an action is not proper where there are factual matters in dispute which require presentation and appreciation of evidence. In this cited case whose fact situation is similar to the present case, albeit with a very slight and minor variation, we considered the improvident dismissal of a complaint based on prescription and laches to be improper because the following must still be proven by the complaining parties:first,that they were the co-heirs and co-owners of the inherited property;second,that their co-heirs-co-owners sold their hereditary rights thereto without their knowledge and consent;third,that forgery, fraud and deceit were committed in the execution of theDeed of Extrajudicial Settlement and Confirmation of Salesince Francisco Ingjug who allegedly executed the deed in 1967 actually died in 1963, hence, the thumbprint found in the document could not be his;fourth,that Eufemio Ingjug who signed the deed of sale is not the son of Mamerto Ingjug, and, therefore, not an heir entitled to participate in the disposition of the inheritance;fifth,that respondents have not paid the taxes since the execution of the sale in 1965 until the present date and the land in question is still declared for taxation purposes in the name of Mamerto Ingjug, the original registered owner, as of 1998;sixth,that respondents had not taken possession of the land subject of the complaint nor introduced any improvement thereon; andseventh,that respondents are not innocent purchasers for value.As inIngjug-Tiro, the present case involves factual issues that require trial on the merits. This situation rules out a summary dismissal of the complaint.Proper Mode of AppealSince the appeal raised mixed questions of fact and law, no error can be imputed on the respondents for invoking the appellate jurisdiction of the CA through an ordinary appeal. Rule 41, Sec. 2 of the Rules of Court provides:Modes of appeal.(a) Ordinary appeal - The appeal to the Court of Appeals in cases decided by the Regional Trial Court in the exercise of its original jurisdiction shall be taken by filing a notice of appeal with the court which rendered the judgment or final order appealed from and serving a copy thereof upon the adverse party.InMurillo v. Consul,44this Court had the occasion to clarify the three (3) modes of appeal from decisions of the RTC, namely: (1) ordinary appeal or appeal by writ of error, where judgment was rendered in a civil or criminal action by the RTC in the exercise of original jurisdiction, covered by Rule 41; (2) petition for review, where judgment was rendered by the RTC in the exercise of appellate jurisdiction, covered by Rule 42; and (3) petition for review to the Supreme Court under Rule 45 of the Rules of Court. The first mode of appeal is taken to the CA on questions of fact or mixed questions of fact and law. The second mode of appeal is brought to the CA on questions of fact, of law, or mixed questions of fact and law. The third mode of appeal is elevated to the Supreme Court only on questions of law.PrescriptionA ruling on prescription necessarily requires an analysis of the plaintiffs cause of action based on the allegations of the complaint and the documents attached as its integral parts. A motion to dismiss based on prescription hypothetically admits the allegations relevant and material to the resolution of this issue, but not the other facts of the case.45Unfortunately, both the respondents complaint and amended complaint are poorly worded, verbose, and prone to misunderstanding. In addition, therefore, to the complaint, we deem it appropriate to consider the clarifications made in their appeal brief by the petitioners relating to the intent of their complaint. We deem this step appropriate since there were no matters raised for the first time on appeal and their restatement was aptly supported by the allegations of the RTC complaint. The respondents argue in their Appellants Brief that:x x x Although reconveyance was mentioned in the title, reconveyance of which connotes that there was a mistake in titling the land in question in the name of the registered owner indicated therein, but in the allegations in the body of the allegations in the body of the instant complaint, it clearly appears that the nature of the cause of action of appellants, [sic] they wanted to get back their respective shares in the subject inheritance because they did not sell said shares to appellee Perfecto Macababbad as the signatures purported to be theirs which appeared in the Extrajudicial Settlement with Simultaneous Sale of Portion of Registered Land (Lot 4144) were forged.As appellants represented 2 of the 8 children of the deceased original owners of the land in question who were Pedro Masirag and Pantaleona Talauan, the sale is perfectly valid with respect to the other 6 children, and voidab initiowith respect to the appellants.46The respondents likewise argue that their action is one for the annulment of theextrajudicial settlement of estate and salebearing their forged signatures. They contend that their action had not yet prescribed because an action to declare an instrument null and void is imprescriptible. In their Comment to the petition for review, however, the respondents modified their position and argued that the sale to the petitioners pursuant to theextrajudicial settlement of estate and salewas void because it was carried out through fraud; thus, the appropriate prescription period is four (4) years from the discovery of fraud. Under this argument, respondents posit that their cause of action had not yet prescribed because they only learned of theextrajudicial settlement of estate and salein March 1999; they filed their complaint the following month.The petitioners, on the other hand, argue that the relevant prescriptive period here is ten (10) years from the date of the registration of title, this being an action for reconveyance based on an implied or constructive trust.We believe and so hold that the respondents amended complaint sufficiently pleaded a cause to declare thenullityof the extrajudicial settlement of estate and sale, as they claimed in their amended complaint. Without prejudging the issue of the merits of the respondents claim and on the assumption that the petitioners already hypothetically admitted the allegations of the complaint when they filed a motion to dismiss based on prescription, the transfer may be null and void if indeed it is established that respondents had not given their consent and that the deed is a forgery or is absolutely fictitious. As the nullity of the extrajudicial settlement of estate and sale has been raised and is the primary issue, the action to secure this result will not prescribe pursuant to Article 1410 of the Civil Code.Based on this conclusion, the necessary question that next arises is: What then is the effect of the issuance of TCTs in the name of petitioners? In other words, does the issuance of the certificates of titles convert the action to one of reconveyance of titled land which, under settled jurisprudence, prescribes in ten (10) years?Precedents say it does not; the action remains imprescriptible, the issuance of the certificates of titles notwithstanding.Ingjug-Tirois again instructive on this point:Article 1458 of the New Civil Code provides: "By the contract of sale one of the contracting parties obligates himself oftransfer the ownership of and to delivera determinate thing, and the other to pay therefor a price certain in money or its equivalent." It is essential that the vendors be the owners of the property sold otherwise they cannot dispose that which does not belong to them. As the Romans put it: "Nemo dat quod non habet."No one can give more than what he has. The sale of the realty to respondents is null and void insofar as it prejudiced petitioners' interests and participation therein. At best, only the ownership of the shares of Luisa, Maria and Guillerma in the disputed property could have been transferred to respondents.Consequently, respondents could not have acquired ownership over the land to the extent of the shares of petitioners.The issuance of a certificate of title in their favor could not vest upon them ownership of the entire property; neither could it validate the purchase thereof which is null and void. Registration does not vest title; it is merely the evidence of such title. Our land registration laws do not give the holder any better title than what he actually has. Being null and void, the sale to respondents of the petitioners' shares produced no legal effects whatsoever.Similarly, the claim that Francisco Ingjug died in 1963 but appeared to be a party to theExtrajudicial Settlement and Confirmation of Saleexecuted in 1967 would be fatal to the validity of the contract, if proved by clear and convincing evidence. Contracting parties must be juristic entities at the time of the consummation of the contract. Stated otherwise, to form a valid and legal agreement it is necessary that there be a party capable of contracting and party capable of being contracted with. Hence, if any one party to a supposed contract was already dead at the time of its execution, such contract is undoubtedly simulated and false and therefore null and void by reason of its having been made after the death of the party who appears as one of the contracting parties therein. The death of a person terminates contractual capacity.In actions for reconveyance of the propertypredicated on the fact that the conveyance complained of was null and voidab initio, a claim of prescription of action would be unavailing. "The action or defense for the declaration of the inexistence of a contract does not prescribe."Neither couldlachesbe invoked in the case at bar.Lachesis a doctrine in equity and our courts are basically courts of law and not courts of equity. Equity, which has been aptly described as "justice outside legality," should be applied only in the absence of, and never against, statutory law.Aequetas nunguam contravenit legis. The positive mandate of Art. 1410 of the New Civil; Code conferring imprescriptibility to actions for declaration of the inexistence of a contract should preempt and prevail over all abstract arguments based only on equity. Certainly,lachescannot be set up to resist the enforcement of an imprescriptible legal right, and petitioners can validly vindicate their inheritance despite the lapse of time.47We have a similar ruling inHeirs of Rosa Dumaliang v. Serban.48The respondents action is therefore imprescriptible and the CA committed no reversible error in so ruling.LachesDismissal based on laches cannot also apply in this case, as it has never reached the presentation of evidence stage and what the RTC had for its consideration were merely the parties pleadings. Laches is evidentiary in nature and cannot be established by mere allegations in the pleadings.49Without solid evidentiary basis, laches cannot be a valid ground to dismiss the respondents complaint.Non-joinder of Indispensable parties is not aGround for a Motion to DismissThe RTC dismissed the respondents amended complaint because indispensable parties were not impleaded. The respondents argue that since theextrajudicial settlement of estate and salewas va