AgPart 925- Trust Digest

TRUSTS DIGESTS ATTY. COCHINGYAN ALS2014B

ALS2014B 1 of 51 sof

Morales vs. CA (1997) (Beauty shop) Doctrine:

1. A trust is the legal relationship between one person having an equitable ownership in property and another person owning the legal title to such property, the equitable ownership of the former entitling him to the performance of certain duties and the exercise of certain powers by the latter. The characteristics of a trust are:

a. It is a relationship; b. It is a relationship of fiduciary character; c. It is a relationship with respect to property, not one involving merely personal duties; d. It 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; and e. It arises as a result of a manifestation of intention to create the relationship.

2. Art. 1448. There is an implied trust when property is sold, and the legal estate is granted to one party but the price is paid by another for the purpose of having the beneficial interest of the property. The former is the trustee, while the latter is the beneficiary. However, if the person to whom the title is conveyed is a child, legitimate or illegitimate, of the one paying the price of the sale, no trust is implied by law, it being disputably presumed that there is a gift in favor of the child.

Facts: Cast of Characters: Celso Avelino Owner of the premises in question Priscilla Morales Sister of Celso Avelino, claims ownership of the land Rodolfo Morales Son of Priscilla, built beauty shop on premises in question Ranulfo and Erlinda Ortiz Purchased premises in question from Celso Avelino Aurea Avelino Sister of Celso, caretaker of the premises in question Rosendo Avelino and Juana Ricaforte Parents of Celso, Aurea and Priscilla Ranulfo and Erlinda Ortiz claim that they are the absolute and exclusive owners of the premises in question (318 sq.m. land located at corner Umbria St. and Rosales Blvd. Brgy. Central, Calbayog City) through their purchase of the said property from Celso Avelino and stated the following: The property was purchased by Celso Avelino (the Ortiz's predecessor in interest) when he was still a bachelor and a city fiscal of Calbayog city from Alejandra Mendiola and Celita Bartolome through an "Escritura de Venta." After the purchase, he caused the transfer of the title as well as the tax declarations in his name. He faithfully paid the taxes and kept the receipts thereof. He also caused a survey of the premises in question with the Bureau of Lands and built a residential house thereon. He took his parents Rosendo Avelino and Juana Ricaforte and his sister Aurea to live in his property until their death. Celso Avelino then became an Immigration Officer and later a Judge of the Court of First Instance in Cebu so he left his property under the care of his sister, Aurea. Without his knowledge, his nephew Rodolfo Morales (a son of his other sister, Priscilla) constructed a beauty shop on the premises in question. Celso thereafter sold the property to Ranulfo and Erlinda Ortiz (Celso's neighbors), they paid the purchase price and a deed of absolute sale was executed. Rodolfo Morales, however, refused to vacate the premises unless he is reimbursed P35,000. He also occupied the residential building on the property, took in paying boarders and even claimed ownership of the premises in question. Rodolfo Morales contends that his grandparents Rosendo Avelino and Juana Ricaforte originally owned the premises in question. The property was allegedly bought by Celso Avelino who was entrusted by Rosendo with the money to buy it. They caused the name of the property to be under Celso Avelino being the only son. When Rosendo Avelino and Juana Ricaforte died, their children: Celso Avelino, Trinidad Cruz, Concepcion Peralta, Priscilla Morales and Aurea Avelino succeeded as owners thereof. Issues:

1. W/N Celso Avelino acquired the property as a mere trustee. 2. W/N Rodolfo Morales a builder in good faith that would entitle him to reimbursement.



Held: 1. NO.

Trusts are either express or implied. Express trusts are created by the intention of the trustor or of the parties. Implied trusts come into being by operation of law, either through implication of an intention to create a trust as a matter of law or through the imposition of the trust irrespective of and even contrary to, any such intention. Implied trusts are either resulting or constructive trusts. Constructive trusts are created by the construction of equity in order to satisfy the demands of justice and prevent unjust enrichment. Resulting trusts are based on the equitable doctrine that valuable consideration and not legal title determines the equitable title or interest and are presumed always to have been contemplated by the parties. They arise from the nature of circumstances of the consideration involved in a transaction whereby one person becomes invested with legal title but is obligated in equity to hold his legal title for the benefit of another. A resulting trust in exemplified by Article 1448 of the Civil Code: "There is an implied trust when property is sold, and the legal estate is granted to one party but the price is paid by another having the beneficial interest of the property. The former is the trustee, while the latter is the beneficiary. However, if the person to whom title is conveyed is a child, legitimate or illegitimate, of the one paying the price of the sale, no trust is implied by law, it being disputable presumed that there is gift in favor of a child. The last sentence of Article 1448 gives one of the recognized exceptions to the establishment of an implied resulting trust. (The other two would be: when actual contrary intention is proved and when purchase is made in violation of an existing statute and in evasion of its express provision.) As a rule the burden of proving the existence of trust is on the party asserting its existence, and such proof must be clear and satisfactorily show the existence of trust. While implied trusts may be proved by oral evidence, evidence must be trustworthy and received by the courts wth extreme caution. On this basis alone, Rodolfo and Priscilla Morales' claim must fail. Rodolfo and Priscilla relied merely on testimonial evidences which are self-serving. Proof of Ranulfo and Erlinda Ortiz's lawful acquisition of the property through Celso Avelinos ownership on the other hand was supported by documentary evidences such as the deed of absolute sale and tax declarations. Even testimonies of Celso's other sisters prove that they believe that he is the true owner of the property. The fact that the other siblings did not intervene in this case to protect their right and that upon the death of their parents no extra-judicial partition occurred further strengthens Celso's ownership. Moreover, assuming that their claim that Celso was a mere trustee is true, it still falls under the exemption under the last sentence of Article 1448 which states that if the person to whom the title conveyed is a child, there is a presumption that it is a gift in favor of the child.

2. NO. Article 448 (This is on builders in good faith, look it up nalang if you want) only applies when a builder thinks he owns the land or believes himself to have a claim of title. From the evidences adduced, Rodolfo Morales knew from the beginning that he was not the owner of the land. Rodolfo is not entitled to reimbursement.



Lina Pealber v. Quirino Ramos, Leticia Pealber, Bartex, Inc. (2009) (Express Trust + Hardware Management)

Doctrine:

1. In its technical legal sense, a trust is defined as the right, enforceable solely in equity, to the beneficial enjoyment of property, the legal title to which is vested in another; but the word trust is frequently employed to indicate duties, relations, responsibilities which are not strictly technical trusts.

Facts:

(Note: The First Cause of Action is not Trust related. Im including it just so you know what happened in case mag-ask siya.)

Cast:

Lina Pealber Petitioner, owner of a parcel of land and a hardware.

Leticia Pealber - daughter of Lina, wife of Quirino Ramos

Bartex third party corporation who bought the lands in question in the first cause of action.

First cause of action: Lina owned a parcel of land with a warehouse and a residential house in Ugac, Tugegarao (Ugac Properties). She alleges that in 1986, she discovered that her TCT for the land was cancelled and a new one was issued in favor of spouses Ramos. She learned that the reason for the cancellation was a deed of donation purporting to be signed by her in favor of the spouses. When she confronted the spouses they said that they would just pay 1M for the property. They did not. Petitioner also learned that the spouses were planning to sell the properties to Bartex. Through her son, Johnson, she notified Bartex that the Ramoses were not the lawful owners of the properties. Nevertheless, the sale ensued and a new TCT was issued in favor of Bartex. Petitioner prayed for the nullification of the new TCTs.

As regards this matter, the Trial Court said that Pealber failed to prove her ownership over the properties in question. Moreover, Spouses Ramos showed as evidence the deed of donation which Pealber purportedly executed. The RTC said that because it was notarized, it is entitled to full credit and a high degree of proof is needed to overthrow the presumption of its regularity. Pealber failed to overthrow the presumption. The decision regarding this matter was not appealed.

SECOND CAUSE OF ACTION:

Petitioner operated a hardware store in a building which she owned in Tugegarao. However, the commercial lot where the property is situated is owned by a certain Mendoza which leased the property to her. Petitioner allowed the spouses Ramos to manage the hardware. In 1984, Mendoza decided to sell the lot. As petitioner did not have the money to buy the property, she allegedly entered into a verbal agreement with the respondents::

1. The lot would be bought by the spouses Ramos for and in behalf of petitioner.

2. The consideration of P80,000.00 for said lot would be paid by Ramos from the accumulated earnings of the store;

3. Since Ramos have the better credit standing, they would be made to appear in the Deed of Sale as the vendees so that the title to be issued in their names could be used by them to secure a loan with which to build a bigger building and expand the business of petitioner.

The spouses Ramos then entered into a contract of sale with Mendoza. A TCT was then issued in favor of the Ramoses. When the spouses returned the management of the hardware to Penalber, Penalber asked for reconveyance of title over the lots. She insisted that the spouses were merely trustees of the properties and therefore they are under the legal obligation to return the same to her. The Ramoses contended that Penalber not only ceded management of the hardware to them but also the ownership thereof on the condition that they would use the profits from the business to pay for Penalbers outstanding obligations. They said that after they paid Penalbers outstanding obligations they bought the property out of their own funds. RTC decided in favor of Penalber stating that the evidence presented (inventory of stocks when the management was transferred to Sps. Ramos) proved that there is a difference of 116, 946 Php from the



present value of the stocks. The RTC said that this difference was due Penalber and that the same was applied as part of the payment for the lot. Respondents Ramos filed a motion for reconsideration stating that oral evidence should not be admitted to prove express trusts. RTC denied the motion.

CA ruled in favor of the Respondent spouses. According to them, the claim of the RTC that the difference was applied as part of the purchase price has no basis. Petitioner alleges that there was an express trust between her and the respondents. She maintains that it was clearly intended from their verbal agreement that she is a trustor when she entrusted the lot to the trustees (spouses) for her benefit.

Issues:

1. W/N There is a trust agreement between the respondent and petitioner.

Held:

1. NO. In its technical legal sense, a trust is defined as the right, enforceable solely in equity, to the beneficial enjoyment of property, the legal title to which is vested in another, but the word "trust" is frequently employed to indicate duties, relations, and responsibilities which are not strictly technical trusts.

Trusts are either express or implied. Express trusts are created by the intention of the trustor or of the parties. Implied trusts come into being by operation of law. Express trusts are those which are created by the direct and positive acts of the parties, by some writing or deed, or will, or by words either expressly or impliedly evincing an intention to create a trust. No particular words are required for the creation of an express trust, it being sufficient that a trust is clearly intended. However, in accordance with Article 1443 of the Civil Code, when an express trust concerns an immovable property or any interest therein, the same may not be proved by parol or oral evidence.

The case at bar concerns an immovable property and therefore, trusts regarding the matter cannot be proven by parol evidence from which the trial court based their ruling. However, the trial court was also correct when it dismissed the motion for reconsideration based on the objection on parol evidence. Because respondents objections were brought up late the same amounted to a waiver.

Nevertheless, even if the parol evidence was admitted, the same was insufficient to prove a trust agreement between the parties. Petitioner failed to prove the existence of trust. The difference between the inventories is not conclusive proof that the same was applied to the purchase price of the property.

Lot remains with the spouses.



Julio v. Dalandan (1967) (4-hectare farm, document, express trust) Doctrines:

Technical or particular forms of words or phrases are not essential to the manifestation of intention to create a trust or to the establishment thereof. Nor would the use of some such words as trust or trustee be essential to the constitution of a trust.

Conversely, the mere fact that the word trust or trustee was employed would not necessarily prove an intention to create a trust. What is important is whether the trustor manifested an intention to create the kind of relationship which in law is known as a trust. It is important that the trustor should know that the relationship which intents to create is called a trust, and whether or not he knows the precise characteristics of the relationship which is called a trust.

Facts:

Victoriana Dalandan owned a four-hectare piece of riceland which was used by Clemente Dalandan, as a security for his loan. The latter failed to fulfill his obligation thus the land was foreclosed. A document was subsequently created which acknowledged such security. In the said document, it was noted that Clemente Dalandan holds himself liable to Victoria Julio (the sole heir of Victoriana Dalandan) and within which he promised to replace the said land with another farm of more than 4-hectares. The document also states that Clementes children may not be forced to give up the harvest of the abovementioned farm, and that the land may not be demanded immediately. The said document was also sworn to by Victoria Julio.

Clemente died. Victoria Julio then subsequently tried to claim such land from the heirs of Clemente Dalandan. The heirs claimed that because of the document neither the delivery of the land nor the fruits may be immediately demanded. Julio acceded and asked that the heirs fix a specific time period wherein the land would be delivered to her. The heirs refused to do so.

Julio filed a complaint saying that she was the owner and that the heirs should fix the time period wherein said land would be delivered. The heirs filed a motion to dismiss stating that the action of Julio has prescribed. Trial court ruled in favor the heirs holding that the action has indeed prescribed because the 10 year period from the date of the document has elapsed.

The SC held that the heirs were usufructuaries of the land of Julio. They were only holding the land as mere trustees of Victoria Julio. SC held that the pertinent parts of the agreed upon document states that Clemente promised to replace the land with another farm, and that the land and its fruits may not immediately demanded from his heirs. Because of this, by the deed, Clemente Dalandan divested himself of the ownership qualified solely by withholding enjoyment of the fruits and physical possession. In consequence, Clemente Dalandan cannot transmit to his heirs, the present defendants, such ownership.

But, defendants aver that recognition of the trust may not be proved by evidence aliunde (from some other source). They argue that by the express terms of Article 1443 of the Civil Code, "no express trusts concerning an immovable or any interest therein may be proved by parol evidence."

Issues:

1. W/N there was an express trust.

Held/Ratio:

YES, SC held that the express trust imposed upon defendants by their predecessor appears in the document itself. For, while it is true that said deed did not in definitive words institute defendants as trustees, a duty is therein imposed upon them when the proper time comes to turn over both the fruits and the possession of the property to Victoria Julio. They held that technical or particular forms of words or phrases are not essential to the manifestation of intention to create a trust or to the establishment thereof. Nor would the use of some such words as trust or trustee essential to the constitution of a trust.



Canezo v. Rojas (2011) (evil stepmom, laches) Doctrines:

Although no particular words are required for the creation of an express trust, a clear intention to create a trust must be shown and proof of fiduciary relationship must be clear and convincing. The creation of an express trust must be manifested with reasonably certainty and cannot be inferred from loose and vague declarations.

Facts:

Soledad Canezo is suing for recovery of real property from her stepmom Rojas. She claims that she bought the land in 1939 and entrusted it to her father when she and her husband left for Mindanao in 1948. In 1980, she found out that her stepmom was occupying said land after her father's death. She instituted the action for recovery only in 1997.

On the other hand, stepmom Rojas contends that i t was her husband Rojas who bought the land. And that petitioner Canezo's action was barred by laches, having been instituted 17 years after knowledge that respondent was in possession of said land.

MTC ruled in favor of Canezo, RTC reversed saying acquisitive prescription had set in. CA affirmed. Appropriate decision (if prescribed or barred by laches) depends on whether there was or there wasn't a trust relationship between father and daughter over the land.

Petitioner proffered as parol evidence her arrangement with her father. It was to the effect that she will be given a share in the produce of the property. She claims that there was an express trust and that actions for express trusts don't prescribe.

Issues:

1. W/N there was a trust (express of implied) over the property between father and daughter.

Held/Ratio:

1. NO. Stepmom was declared the owner. The burden of proving a trust is on the party asserting its existence. An express trust may not be established by parol evidence (see doctrine). Even assuming that a trust existed, it would have terminated upon death of the trustee. In this case, her father died in 1978 and she instituted the action only in 1997. She was therefore barred by laches.



Heirs of Tranquilino Labiste v. Heirs of Jose Labiste (WW2, prescription and laches) Doctrine:

A trust is the right to a beneficial enjoyment of property, the legal title to which is vested in another o it is a fiduciary relationship that obliges the trustee to deal with the property for the benefit of the

beneficiary. Express trusts are created by direct and positive acts of the parties, by some writing or deed, or will, or by words

either expressly or impliedly evincing an intention to create a trust.

Facts:

Epifanio Labiste (Epifanio), on his own and on behalf of his brothers and sisters who were the heirs of Jose Labiste (Jose), purchased from the Bureau of Lands (BoL) Lot No. 1054 of the Banilad Friar Lands Estate, with an area of 13,308 sqm., located at Guadalupe, Cebu City for P36. After full payment of the purchase price but prior to the issuance of the deed of conveyance, Epifanio executed an Affidavit in Spanish affirming that he, as one of the heirs of Jose, and his uncle and petitioners predecessor-in-interest, Tranquilino Labiste (Tranquilino), then co-owned the lot because the money that was paid to the government came from the two of them. Tranquilino and the heirs of Jose continued to hold the property jointly.

On 2 May 1928, the Deputy Public Land Surveyor, subdivided Lot No. 1054 into two lots: Lot No. 1054-A with an area of 6,664 sqm. for Tranquilino and Lot No. 1054-B with an area of 6,664 sqm. for Epifanio. The subdivision plan prepared by Engr. Bunagan subsequently approved. Subsequently, the heirs of Tranquilino purchased the one-half (1/2) interest of the heirs of Jose over the lot for P300.00. The parties executed a Calig-onan sa Panagpalit in Visayan. The heirs of Tranquilino immediately took possession of the entire lot.

When WW2 broke out, the heirs of Tranquilino fled but upon return they found their homes and possessions destroyed. Public records in the government offices were also destroyed during the war. Squatters have also overrun the entire property, such that party possesses it.

Petitioners learned that one of the respondents, Asuncion Labiste, had filed a petition for reconstitution of title over the lot. At first, they opposed the petition but both parties eventually reached a compromise agreement. Under the agreement, petitioners were to be given time to file a complaint so that the issues could be litigated in an ordinary action and the reconstituted title was to be deposited with the Clerk of Court to allow petitioners to file an action for reconveyance and to annotate a notice of lis pendens. The Register of Deeds issued the reconstituted title in the name of Epifanio Labiste, his brothers and sisters, heirs of Jose Labiste on 14 December 1994. However, respondents did not honor the compromise agreement.

Petitioners filed a complaint for annulment of title seeking the reconveyance of property and damages. Respondents claimed that the Affidavit of Epifanio and the Calig-onan sa Panagpalit were forgeries and that petitioners action had long prescribed or barred by laches. The RTC found that they are genuine and authentic as ancient documents and that they are valid and enforceable. Moreover, it held that the action had not prescribed as the complaint was filed about a year after the reconstitution of the title by respondents. The period of prescription that applies is actually 10 years. The RTC further held that the reconstituted title did not give any more right to respondents than what their predecessors-in-interest actually had as it is limited to the reconstitution of the certificate as it stood at the time of its loss or destruction.

Issue:

1. W/N petitioners cause of action has prescribed

Ratio:

1. NO. What is involved in the present case is an express trust. Petitioners are declared as the absolute owners of the lot. The genuineness and authenticity of the Affidavit of Epifanio and the Calig-onan sa Panagpalit are beyond cavil. Express trusts are created by direct and positive acts of the parties, by some writing or deed, or will, or by words either expressly or impliedly evincing an intention to create a trust.



The Affidavit of Epifanio is in the nature of a trust agreement. Epifanio affirmed that the lot brought in his name was co-owned by him, as one of the heirs of Jose, and his uncle Tranquilino. and by agreement, each of them has been in possession of half of the property. Their arrangement was corroborated by the subdivision plan prepared by Engr. Bunagan and approved by Acting Director of Lands.

Prescription and laches will run only from the time the express trust is repudiated. The rule requires a clear repudiation of the trust duly communicated to the beneficiary. The only act that can be construed as repudiation was when respondents filed the petition for reconstitution in October 1993. And since petitioners filed their complaint in January 1995, their cause of action has not yet prescribed, laches cannot be attributed to them.

Pacheco v. Arro (1950) (Yulo, open court) (Half of the case is in Spanish, so baka lang pag-Spanish niya tayo haha)

Doctrine:

The juridical concept of a trust, which in a broad sense involves, arises from, or is the result of, a fiduciary relation between the trustee and the cestui que trust (beneficiary who is entitled to all the benefits of the trust) as regards certain property real, personal, funds or money, or choses in action

o must not be confused with an action for specific performance. A trustee cannot invoke the statute of limitations to bar the action and defeat the rights of the cestui que trust.

Facts:

Dolores Pacheco is the guardian of minors Concepcion, Alicia and Herminia Yulo, the daughters of Jose Yulo. The Court of Appeals affirmed the earlier judgment of the CFI, ordering Jose Yulo to execute deeds of assignment in favor of the Arro for each and every lot claimed claimed by them.

There was a cadastral case filed in the CFI of Occidental Negros. Arro, asserting title, filed answers in the cadastral case, claiming lots as their property and began to present evidence before a referee appointed by the court in support of their respective claims. Subsequently, Dr. Mariano Yulo, representing Jose Yulo, assured and promised in open court that Jose would convey and assign the lots to the the Arros once the names of two streets found in Occidental Negros be changed to the names of Joses parents. Because of such promise, Arro then withdrew his claims. Afterwards, the cadastral court confirmed title to the lots and decreed their registration in the name of Jose Yulo. Pacheco et al, claim that they will not issue the deed of assignment since there was no trust created. Pacheco asserts that a trustee does not have title to the property which is the subject of the trust, because title to such is vested in the cestui que trust.

Issue:

1. W/N there was a trust created between Jose Yulo and Arro?

Held:

1. YES The juridical concept of a trust, which in a broad sense involves, arises from, or is the result of fiduciary relation between the trustee and the cetui que trust as regards certain property real, personal, funds or money, or choses in action must not be confused with an action for specific performance. When the claim to the lots in the cadastral case was withdrawn by Arro, relying upon the assurance and promise made in open court by Mariano Yulo, in behalf of Jose, a trust or a fiduciary relation between them arose, or resulted therefrom, or was created thereby. The trustee cannot invoke the statute of limitations to bar the action and defeat the right of the cestui que trust. If the pretense of Pacheco that the promise made in open court cannot prevail over the final decree of the cadastral court holding Jose to be the owner of the lots claimed by Arro were to be substantiated and upheld, then actions to compel a party to assign or convey the undivided share in a parcel of land registered in his name to his co-owner of co-heir could no longer be brought and could no longer suceed and prosper.



Petrona Gamboa, et al. v. Modesta Gamboa, et al. (1928) (failed to redeem lot, 10 parcels of land) Doctrines:

A person who has held legal title to land, coupled with possession and beneficial use of the property for more than ten years, will not be declared to have been holding such title as trustee for himself and his brothers and sisters upon doubtful oral proof tending to show a recognition by such owner of the alleged rights of his brother and sisters to share in the produce of the land. [Ergo: The requirement that express trust over immovable must be in writing should be added as being governed by the Statute of Frauds.]

Express trust over real property cannot be constituted when nothing in writing was presented to prove it. (From Ty v. Ty)

Facts:

(To fully understand the case, here is a brief history of the ownership of the lands in dispute)

History:

The ten (10) parcels of land all belonged to the spouses Juan Gamboa and Ana Manago, parents of the plaintiffs and defendants. On August 27, 1907, the spouses sold 9 out 10 parcels of land under a contract of sale with pacto de retro for two years to Felipe Javier. The spouses failed to redeem the property within the period (because they died), which made Javier the absolute owner of the 9 parcels of land.

On June 18, 1910, Javier sold the land to defendant Modesta Gamboa and Feliciana Gamboa for Php1,700. Php600 was paid in cash, while the remaining Php1,100 was to be paid in four annual installments. The payment was secured by a mortgage on the said lands. On May 21, 1913, Regino P. Gamboa, brother of the sisters, paid the Php1,100 to Javier. In effect, under a document transferring interest in the mortgage to him, Regino became the owner of the Php1,100 debt of his two sisters.

Modesta and Feliciana satisfied the debt, but Regino kept the document until his death in 1920. The widow of Regino kept such document, which was used as evidence in this case. Modesta nevertheless produced a receipt confirming her payment of the Php1,100 to Regino. In 1922, the sisters partitioned the land, evidenced by a written partition document, with Modesta owning a particularly larger share because she paid a larger amount (Php1,400 of the Php1,700 price).

From the time Javier sold the lots to the sisters until the institution of this case, Modesta has been in possession, use and ownership of the 9 parcels of land since 1910.

The Case: This action was instituted in CFI Pampanga, by the plaintiffs Gamboa, for the purpose of enforcing partition of some ten parcels of real property in Sta. Ana, Pampanga. The plaintiffs claim that they are co-owners with the defendants Modesta, Pedro and Rafael Gamboa. Defendant Modesta denied the allegations, claiming that although one (1) parcel of land belongs to the common property of plaintiffs and defendants, 9 of the 10 parcels belong to her and have been in adverse possession for more than ten years. This is affirmed by co-defendants Pedro and Rafael. The trial court sided with the plaintiffs, and ordered the partition of the lands in this manner:

1/9 each to Petitioner Petrona, Feliciana, Serapion, Balbina and Mercedes de Jesus (widow of Marcelo Gamboa) 1/9 conjointly owned by heirs of Regino Gamboa: Andres, Francisco, Juan, Africa and Regino 3/9 to Modesta, in view of the fact that Pedro and Rafael had admitted her right

Modesta appealed the trial judge's decision, hence this case. Issues:

1. Whether Modesta's purchase from Javier was under the pacto de retro contract executed by their parents, and whether this purchase was in a trust character.



Held/Ratio:

1. NO and NO. The period for redemption was only two (2) years, and such period was already expired by the time Javier sold the lands to Modesta and Feliciana. The sale was under a different contract of sale, executed between Javier and the sisters, and the purchase was not for the benefit of the entire Gamboa clan. Modesta and Feliciana were not mere trustees to the plaintiffs. The sale by Felipe Javier to the sisters was an unconditional transfer of title to them. There was no agreement that their purchase of the property was in a trust character, and plaintiffs have not presented any evidence proving such claim.

If there was an agreement that the sisters were purchasing the land as trustees, with their siblings as the beneficiaries, then such agreement could be enforced. But the lack of such an agreement disprove the plaintiffs claim.



Ty vs. Ty (2008) (No implied trust with child) Doctrines:

If the person to whom the title is conveyed is the child of the one paying the price of the sale, no trust is implied by law.

Facts:

Alexander Ty, son of Alejandro Ty and husband of Sylvia Ty, dies of cancer at the age of 34. Sylvia, as Administratrix, files petition for the settlement of Alexanders intestate estate in the Quezon City RTC. She also asks court to sell or mortgage properties in order to pay the estate tax amounting to P4,714,560.02 as assessed by the BIR. The properties include a parcel of land in EDSA Greenhills, a residential land in Wack Wack, and the Meridien condo unit in Annapolis, Greenhills.

Alejandro Ty opposed the move and filed for recovery of the property with prayer for preliminary injunction and/or temporary restraining order. Plaintiff Alejandro claims that he owns the EDSA, Wack Wack and Meridien condo unit because he paid for them. The property was supposedly registered in trust for Alexanders brothers and sisters in case plaintiff dies. Plaintiff added that defendant acted in bad faith in including the subject properties in the inventory of Alexander Tys estate, for she was well aware that Alexander was simply holding the said properties in trust for his siblings. Plaintiff also claimed that Alexander had no financial capacity to purchase the disputed property, as the latter was only dependent on the former.

Sylvia countered that Alexander had purchased the property with his money. Alexander was financially capable of purchasing it because he had been managing the family corporations since he was 18 years old and was also engage in other profitable businesses along with his car care business.

The RTC granted the application for preliminary injunction and decides in favor of plaintiff regarding the recovery of the property. CA reversed the RTC stating that the implication created by law under Art. 1448 does not apply if the property was in the name of the purchasers child. They agreed that plaintiff partly paid for the EDSA property. Plaintiff appealed.

Issues:

1. W/N there was an implied trust under Art. 1448 of the Civil Code?

Held/Ratio:

1. NO, there was no implied trust created in relation to the EDSA property. If the person to whom the title is conveyed is the child of the one paying the price of the sale, no trust is implied by law under Art. 1448, the so-called purchase money resulting trust. The said article provides an exception: if the person to whom the title is conveyed is a child, legitimate or illegitimate, of the one paying the price of the sale, NO TRUST is IMPLIED by LAW, it being disputable presumed that there is a gift in favor of the child. The Court also noted that plaintiff failed to prove that he did not intend a donation.

Regarding the Meridien Condo and Wack Wack property, the court said that plaintiff failed to prove that purchase money came from him. They also said that Alexander was capable of purchasing the property as he had been working for nine years, had a car care business, and was actively engaged in the business dealings of several family corporations from which he received emoluments and other benefits. Hence, no implied trust created because there was no proof that plaintiff had paid for said properties.



Tan Sen Guan and Co. v. Philippine Trust Company (1933) Doctrines:

There is an implication by the SC that when a trustee enters into a contract that gives rise to liability, but there is no clear indication that he enters into the contract as trustee, then the trustee would be held individually liable on the liability arising from the contract

But even if the contract had been authorized by the trust indenture, the Phil Trust Company in its individual capacity would still be responsible for the contract as there was no express stipulation that the trust estate and not the trustee should be held liable on the contract in question. In other words, when the transaction at hand could have been entered into by a trustee either as such or in its individual capacity, then it must be clearly indicated that the liabilities arising therefrom shall be chargeable to the trust estate, otherwise they are due from the trustee in his personal capacity.

Facts:

Plaintiff Tan Sen Guan and Co. (TSG) secured a judgment for the sum of P21,426 against Mindoro Sugar Co., of which the Philippine Trust Company (PTC) is the trustee. TSG and PTC entered into an agreement where TSG assigned, conveyed, transferred and sold to PTC the full amount of the said judgment and all its rights thereto.

The agreement further stated that:

(1) PTC shall pay TSG 5,000 as satisfactory consideration, (2) PTC agrees that should Mindoro Sugar Co., be sold, assigned or its ownership transferred in any manner

whatsoever to any person or entity including the PTC itself, it shall pay TSG an additional P10,000, (3) In case any other creditor of the Mindoro Sugar Co. obtains in the payment of his credit, a greater proportion than

the price paid to TSG (which is P15,000 for a dept of P21,426), the PTC shall pay TSG whatever sum necessary in order that the amount received by TSG be equal, the proportion to its claim, to that received by the said other creditor, in proportion to his claim, and

(4) In case the Mindoro Sugar Co. is sold any person or entity which pays nothing to the creditor or pay to them in satisfaction of the credits an amount equal or less than 70% of their respective claims, or should said creditors from whatever source obtain in payment of their credits an amount equal or less than 70% of their respective claims, then the PTC will only pay to TSG the additional P10,000 sum upon sale or transfer of transfer of Mindoro Sugar Co as stated in (2)

All the properties of Mindoro Sugar Co. was subsequently sold to Roman Catholic Archbishop of Manila in a public auction. As per TSG and PTCs agreement, TSG sought to collect the additional P10,000 from PTC. PTC didnt want to pay. Hence, TSG filed a suit in the CFI. The CFI absolved PTC from liability, claiming that not all the properties of Mindoro Sugar Co. were sold and that PTC is not personally liable for the P10,000 claim since it only signed the agreement in its capacity as a trustee and not as an individual.

Issues:

1. W/N PTC is personally liable, having executed the agreement in its capacity as trustee of the properties of the Mindoro Sugar Co.

2. W/N all the properties of Mindoro Sugar Co. were sold at the auction to Roman Catholic Archbishop

Held:

1. YES. The deed of trust between PTC and Mindoro authorizes the trustee to enter into contracts such as the one executed with TSG. The PTC had legal title to the properties of Mindoro to protect the bond holders. So far as PTC was concerned, it was not authorized to manage affairs of Mindoro or to enter contracts in its behalf. But even if the contract had been authorized by the deed of trust, the PTC, in its individual capacity, would still be liable for the contract as there was no express stipulation that the true estate and not the trustee should be held liable on the contract in question. Not only is there no express stipulation that the trustee should not be held responsible but in the wherefore clause of the agreement between TSG and PTC, the sum was expressly assigned in favor of the PTC, not the PTC, trustee.



2. YES. The sale apparently included all the real and personal properties which the sugar company held, as even the accounts receivable by the sugar company were included. The only thing reserved from the sale was the standing crops and it is reasonable to presume that they had already been sold between the date of the sale and the institution of the suit.

Government v. Abadilla (1924) (Beneficiary, ayuntamiento, Palad) Doctrines:

For trust to be effective, there must be a trustee and a cestui que trust.

The existence of an equivalent designated position in the testamentary trust to act as trustee complies with the requirement of a trustee.

Facts:

Luis Palad, a school teacher, owns three parcels of land (coconut land). He obtained titles to the land by composicion gratuita in 1894. In 1892, he executed a holographic will (partly written in Spanish and partly in Tagalog). Pertinent portions of his will read:

that the cocoanut land in Colongcolong, which I have put under cultivation, be used by my wife after my death during her life or until she marriesand if the times aforementioned should arrive, I prepare and donate it to secondary college to be erected in the capital of Tayabas; so this will be delivered by my wife and the executors to the Ayuntamiento of this town, should there be any, and if not, to the civil governor of this province in order to cause the manager thereof to comply with my wishes for the good of many and the welfare of the town.

Luis Palad died in 1896. After his death, his widow Dorotea Lopez remained in possession of the land. In 1900, she married Calixto Dolendo. In 1903, the heirs of Luis Palad brought an action against Dorotea Lopez for the partition of the lands. They claimed that she lost her right to the exclusive use and possession of the lot when she contracted her second marriage.

During the pendency of the action, the parties agreed to turn 2 lots over to the municipality of Tayabas. The 3rd lot was left in the possession of Dorotea Lopez. In 1904, the action was dismissed. The municipality of Tayabas has been in possession of the 2 lots ever since and Dorotea Lopez has likewise held uninterrupted possession of the 3rd lot.

Both the municipality of Tayabas and the heirs of Palad are claiming the lots. Dorotea Lopez is also claiming the 3rd lot. The lower court ordered the registration of the three lots in the name of the governor of the Province of Tayabas in trust for a secondary school to be established in the municipality of Tayabas. The claimants Palad and Dorotea Lopez appealed.

Issues:

1. W/N the clause quoted from the will of Luis Palad is valid.

Held/Ratio:

1. YES. Though unskillfully drawn and grammatically incorrect, the clause reveals the purpose of the testator. Under the law, if provisions do not contravene some established rule or public policy, they must be respected and given effect. Testamentary dispositions must be liberally construed. The testator proposed to create a trust for the benefit of a secondary school to be established in the town of Tayabas, naming as trustee the ayuntamiento of the town or if there be no ayuntamiento, then the civil governor of the Province of Tayabas.

For trust to be effective, there must be a trustee and a cestui que trust. In regard to private trust it is not always necessary that the cestui que trust should be named, or even be in esse at the time the trust is created in his favor. Though, there is no ayuntamiento or secondary school, the governor of the Province, may act as trustee in the case.

Judgment is affirmed with regard to the 2 lots. Dorotea acquired the 3rd lot though possession.

* ayuntamiento: a municipal corporation.



Cristobal v. Gomez (1927) (siblings to the rescue) Doctrines:

Acceptance by the beneficiary of gratuitous trust is not subject to the rules for the formalities of donations.

Facts:

Epifanio Gomez owned 3 lots located in Cavite. He sold the property under Pacto de Retro to Luis Yangco, redeemable in 5 years, with Epifanio Gomez remaining in possession in the character of a lessee. The period to redeem expired but Yangco extended it. Gomez approached Bibiano Banas, a relative, to secure a loan. Banas only agreed if Gomezs brother Marcelino and sister Telesfora would make themselves responsible for the loan.

Marcelino and Telesfora entered into a private partnership in participation for the purpose of redeeming the property from Yangco. Epifanio was present when said agreement was discussed and assented to. The agreement stated the following:

The capital of this partnership should consist of P7,000, of which Marcelino Gomez was to supply the amount of P1,500, and Telesfora Gomez the sum of P5,550

All the property to redeemed should be placed in the name of the two and that Marcelino Gomez should be its manager

That all the income, rent, and produce of the aforesaid property of Epifanio Gomez shall be applied exclusively to the amortization of the capital employed by the two parties (including interest and incidental expenses)

As soon as the capital employed shall have been covered, said properties shall be returned to our brother Epifanio Gomez or to his legitimate children

In order that the property of Epifanio Gomez may be returned, it is made essential that he shall manifest good behavior in the opinion of Don Marcelino Gomez and Doa Telesfora Gomez jointly

More than a year later, Epifanio Gomez dies leaving Paulina Cristobal and their 4 children. Meanwhile, Marcelino Gomez continued to possess the property and improved it. The value quintupled in value (now P50,000). [Marcelino acquired exclusive rights over it when Telesfora conveyed her interest to him. He sold the property with pacto de retro to Banas, redeemable within 5 years. On April 1, 1918, he redeemed the property from Banas.]

Subsequently, Paulina and children filed action to recover property from Marcelino. They claimed that the capital had been covered by the propertys income, hence, the same should be returned to them. The TC held that Marcelino Gomez must surrender the property. Marcelino appealed, claiming (a) the agreement was kept secret from Epifanio and therefore he could not have accepted it before the stipulation was revoked, and that (b) Epifanio did not accept the donation in a public instrument therefore it is unenforceable

Issues:

1. W/N a trust existed 2. W/N there was acceptance by Epifanio of the trust agreement 3. W/N acceptance in a public instrument is required for enforceability, as is the case in the law on donations.

Held/Ratio:

1. YES. TC did not err in holding that the defendant Marcelino Gomez must surrender the property. The so-called partnership agreement between Marcelino Gomez and his sister created a trust for the purpose of rescuing the property of Epifanio Gomez; and now that the purpose has been accomplished, the property should be returned to his legitimate children, as provided in the agreement. Martinez vs. Grao applies: a person who, before consolidation of property in the purchaser under a contract of sale with pacto de retro, agrees with the vendors to buy the property and administer it till all debts constituting an encumbrance thereon shall be paid, after which the property shall be turned back to the original owner, is bound by such agreement; and upon buying in the property under these circumstances such person becomes in effect a trustee and is bound to administer the property in this character.



2. YES. Bibiano Baas testimony contradicts the defendants claim that the trust agreement (Exhibit A) was kept secret from Epifanio Gomez (so he could no have accepted it) Baas says that Epifanio Gomez was present when the arrangement for the repurchase of the property from Yangco was discussed and that he assented thereto. He even told Epifanio Gomez in the presence of his brother and sister that he should be pleased that he was able to recover the property. Even supposing that Epifanio Gomez may never have seen the Exhibit A, he understood the nature of the arrangement and his assent thereto was a sufficient acceptance.

3. NO. With regard to Marcelinos claim that if Epifanio Gomez had any right in the property, such right could only be derived from a donation, and that, inasmuch as the donation was never accepted by Epifanio Gomez in a public instrument, his supposed interest therein is unenforceable - The Court says the partnership agreement should not be viewed in the light of an intended donation, but as an express trust. Acceptance by the beneficiary of gratuitous trust is not subject to the rules for the formalities of donations.

DBP v. COA (2004) Retirement Plan Doctrine:

Where the DBP establishes a pension trust for its officers and employees and appoints trustees for the fund whereby the trust agreement transferred legal title over the income and properties of the fund, then the principal and the income of the fund together constitute the res or the subject matter of the trust. Since the trust agreement established the fund precisely so that it would eventually be sufficient to pay for the retirement benefits of DBP officers and employees then the income and profits thereof cannot be booked by DBP as its own, and DBP cannot be directed by COA to treat such income as its own.

Trust:

Trustor: DBP

Trustees: Board of Trustees of the Gratuity Plan Fund

Beneficiary: Employee / Retirees

Facts:

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 a retirement fund to cover the benefits due to DBP retiring officials and employees under Commonwealth Act No. 186, as amended. 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 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 (SLP) availed thru the facilities of the DBP Provident Fund and funded by placements from the Gratuity Plan Fund. Under the SLP, 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. The excess or balance of the interest earnings shall then be distributed to the investor-members.

Pursuant to the investment scheme, DBP paid to the investor-members a total of P11,626,414.25 representing the net earnings of the investments for the years 1991 and 1992. The payments were disallowed under AOM 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 a private purpose. The Auditor, aside from requiring the recipients to refund their dividends, recommended that the DBP record in its books as miscellaneous income the income of the Gratuity Plan Fund, on the ground that the Fund is still owned by the Bank, the Board of Trustees being a mere administrator of the Fund.



Former DBP Chairman Antonio requested COA to reconsider AOM 93-2 arguing that the express trust created for the benefit of qualified DBP employees under the Trust Agreement gave the Fund a separate legal personality as it transferred legal title over the Fund to the Board of Trustees and all earnings of the Fund accrue only to the Fund. Moreover, the income of the fund is not the income of DBP. He also asked COA to lift the disallowance of the P11,626,414.25 distributed as dividends under the SLP on the ground that the latter was simply a normal loan transaction. However, the COA en banc affirmed AOM 93-2 and denied the Motion for Reconsideration. Hence, the petition.Issues: 1. W/N the income of the Fund is income of DBP 2. W/N the distribution of dividends under the SLP is valid. Held:

1. No. The income of the Fund is not the income of the DBP. The DBP Board Resolution No. 794 shows that DBP intended to establish a trust fund to cover the retirement benefits of certain employees under RA 1616. The principal and income of the Fund would be separate and distinct from the funds of DBP, as provided in the salient portions of said Resolution, and must be used to satisfy all of the liabilities to the beneficiary officials and employees under the Gratuity Plan.

COA correctly observed that the right of the employees to claim their gratuities from the Fund is still immature. 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.

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. As such, it should not be recorded in the books of account of DBP as its income.

2. No. The High Court upheld the disallowed dividends distributed under the SLP. As 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.

There was thus no basis for the loans granted to DBP employees under the SLP. The rights of the recipient DBP employees to their retirement gratuities were still immature, 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.

The Supreme Court also held that 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.



Ramos v. Ramos (1974) (legitimate, natural, partition, hacienda, imprescriptibility, 43 years) Doctrines (all from outline):

Implied trusts are those which, without being expressed, are deducible from the nature of the transactions as matters of intent, or which are superinduced on the transaction by operation of law as matters of equity, independently of the particular intention of the parties They are ordinarily subdivided into resulting and constructive trusts

Resulting Trusts: The rule of imprescriptibility of an action to recover property held in trust may possibly apply to a resulting trust as long as the trustee has not repudiated the trust. A resulting trust is broadly defined as a trust which is raised or created by the act or construction of law, but in its more restricted sense it is a trust raised by implication of law and presumed always to have been contemplated by parties, the intention as to which is to be found in the nature of their transaction, but not expressed in the deed or instrument of conveyance. Examples of resulting trusts are found in articles 1448 to 1445 of the Civil Code.

Constructive Trusts: On the other hand, a constructive trust is a trust Raised by construction of law, or arising by operation of law. In a more restricted sense and as contradistinguished from a resulting trust, a constructive trust is A trust not created by any words, either expressly or implied evincing a direct intention to create a trust, but by the construction of equity in order to satisfy the demands of justice. It does not arise by agreement or intention but by operation of law If a person obtains legal title to property by fraud or concealment, courts of equity will impress upon the title a so-called constructive trust in favor of the defrauded party A constructive trust is not a trust in the technical sense.

Facts:

*The case has so many facts and a bit confusing because everyone are surnamed Ramos. Martin Ramos has a total of 10 Children. It is like a family drama. I placed (N) for natural and (L) for legitimate for easy reference.

Plaintiff: Emiliano Ramos - Natural (Illegitimate) - The case used "natural" rather than illegitimate

Defendant: Gregoria Ramos - Widow of Jose Ramos (Jose Ramos is a Legitimate child)

Administrator1: Rafael Ramos Younger brother of Martin Ramos (So the uncle of the children) Administrator2: Timoteo Zayco Uncle but a brother-in-law also of Gregoria Ramos

When spouses Martin Ramos (Father) and Candida Tanate died, they were survived by their three (3) LEGITIMATE children: Jose, Agustin and Granada. Martin Ramos, however, has seven (7) NATURAL children: Atanacia, Timoteo, Modesto, Manuel, Emiliano, Maria and Federico. Their father left considerable real estate, the most valuable of which were the Hacienda Calaza and Hacienda Ylaya, both located in Himamaylay, Negros Occidental. Hacienda Calaza consists of sugar land, palay etc.

ALL (legit or acknowledged natural) of the children of Martin Ramos lived together in Hacienda Ylaya during his lifetime and were under his care. All said children continued to live in said house of their father for years even after his death.

Upon their father's death, his properties were left under the administration of Rafael Ramos, the younger brother of their father and their uncle. Rafael continued to administer those properties, giving plaintiffs money as their shares of the produce of said properties but plaintiffs not receiving any property or piece of land however, until 1913 when Rafael gathered all the heirs, including plaintiffs, in the house of their father, saying he would return the administration of the properties. He turned over Hacienda Ylaya to Agustin Ramos (L) and Hacienda Calaza to Jose Ramos (L).

The estate was administered for more than 6 years. The Father died 1906.There was a project of partition on April 25, 1913 (Please refer to the case so that you could have idea on how the estate was partitioned). It was agreed in the project of partition that: (The legitimate children will pay cash adjudication to the natural children because the 2nd paragraph of Article 840 Family Code gives the legitimate children the right to satisfy in cash the hereditary portions of the natural children.). This is Persons stuff already.

Jose Ramos (L) would pay the cash adjudications to Atanacia (N), Timoteo (N) and Manuel (N)



While Agustin Ramos (L) would pay the cash adjudications to Modesto (N), Federico (N), Emiliano (N) and Maria (N)

It was further agreed that Jose Ramos and Agustin Ramos would pay their sister, Granada, the sums of P3,302.36 and P14,273.78, respectively (Exh. 3).

Judge Richard Campbell, in his "decision" dated April 28,1913, approved the project of partition as well as the intervention of Timoteo Zayco as guardian of the five heirs, who were minors. Plaintiffs continuously received money pertaining to their shares from Agustin (N) and Jose (N). They are of varied amounts.

Upon Jose Ramos death his widow GREGORIA Ramos continued to give plaintiffs money pertaining to their shares in the products of Hacienda Calaza. She however stopped doing so in 1951, telling them that the lessee Estanislao Lacson was not able to pay the lease rental. There was never any accounting made to plaintiffs by Jose Ramos, plaintiffs reposing confidence in their elder brother, Nor was any accounting made by his widow, defendant Gregoria Ramos, upon his death, plaintiff Manuel Ramos moreover having confidence in her.

THE DISCOVERIES:

Plaintiffs did not know that intestate proceedings were instituted for the distribution of the estate of their father. Neither did plaintiffs Modesto, Manuel, Emiliano and Maria know that Timoteo Zayco, their uncle and brother-in-law of defendant widow Gregoria was appointed their guardian. There was an express admission by defendant Gregoria Ramos that Timoteo Zayco was her brother-in-law (Small world). They never received any sum of money in cash the alleged insignificant sum of P1,785.35 each from said alleged guardian as their supposed share in the estate of their father under any alleged project of partition. As a matter of fact, plaintiffs Modesto and Manuel were in 1913 no longer minors at the time of the alleged project of partition of the estate being approved, both being of age at that time. No guardian could in law act on their behalf.

Plaintiffs only discovered later on that the property administered by their elder brother Jose had a Torrens Title in the name of his widow, Gregoria, and daughter, Candida, when plaintiff Modesto's children insisted and inquired from the Register of Deeds sometime in 1956 or 1957. Plaintiffs did not intervene in the intestate proceedings for (the) settlement of the estate of their brother Jose as they did not know of it.

Thus, seeking for Reconveyance.

Issues:

1. W/N the prescription and laches are available to bar the action for reconveyance of property allegedly held in trust.

2. W/N there is fraud 3. There is also a Persons Issue about natural children

Held/Ratio:

1. YES. (Please please double check the case is really confusing )

NOT an Express Trust - The plaintiffs did not prove any express trust in this case. The expediente of the intestate proceeding, particularly the project of partition, the decision and the manifestation as to the receipt of shares negatives the existence of an express trust. Those public documents prove that the estate of Martin Ramos was settled in that proceeding and that adjudications were made to his seven natural children. In Express trust, a trustee cannot acquire by prescription the ownership of property entrusted to him or that an action to compel a trustee to convey property registered in his name in trust for the benefit of the cestui qui trust does not, or that the defense of prescription cannot be set up in an action to recover property held by a person in trust for the benefit of another or that property held in trust can be recovered by the beneficiary regardless of the lapse of time.

NOT an Implied Trust - Neither have the plaintiffs specified the kind of implied trust contemplated in their action.

We have stated that whether it is a resulting or constructive trust, its enforcement may be barred by laches (Refer to the Doctrine above)



In the cadastral proceedings, which supervened after the closure of the intestate proceeding, the eight lots involved herein were claimed by the spouses Jose Ramos and Gregoria T. Ramos to the exclusion of the plaintiffs. After the death of Jose Ramos, the said lots were adjudicated to his widow and daughter. In 1932 Gregoria T. Ramos and Candida Ramos leased the said lots to Felix Yulo. Yulo in 1934 transferred his lease rights over Hacienda Calazato Juan S. Bonin and Nestor Olmedo, the husband of plaintiff Atanacia Ramos (N). Bonin and Olmedo in 1935 sold their lease rights over Hacienda Calaza to Jesus S. Consing.

The rule of imprescriptibility of the action to recover property held in trust may possibly apply to resulting trusts as long as the trustee has not repudiated the trust. The transactions prove that the heirs of Jose Ramos had repudiated any trust which was supposedly constituted over Hacienda Calaza in favor of the plaintiffs. Under Act 190, whose statute of limitations applies to this case (Art. 116, Civil Code), the longest period of extinctive prescription was only ten years.

Atanacia, Modesto and Manuel, all surnamed Ramos, were already of age in 1914. From that year, they could have brought the action to annul the partition. Maria Ramos and Emiliano Ramos were both born in 1896. They reached the age of twenty-one years in 1917. They could have brought the action from that year. The instant action was filed only in 1957. As to Atanacia, Modesto and Manuel, the action was filed forty-three years after it accrued and, as to Maria and Emiliano, the action was filed forty years after it accrued. The delay was inexcusable. The instant action is unquestionably barred by prescription and res judicata.

2. Cannot be determined. Parenthetically, it may be noted that the filing of the instant case long after the death of Jose Ramos and other persons involved in the intestate proceeding renders it difficult to determine with certitude whether the plaintiffs had really been defrauded. The plaintiffs contend that the partition was not binding on them (Note that their brother, Timoteo, considered himself bound by that partition). The plaintiffs have only themselves to blame if the courts at this late hour can no longer afford them relief against the inequities allegedly vitiating the partition of their father's estate.

3. Defendants Agustin Ramos and Granada Ramos and the late Jose Ramos accorded successional rights to the plaintiffs because martin Ramos and members of his family had treated them as his children. Under the circumstances, Agustin Ramos and Granada Ramos and the heirs of Jose Ramos are estopped from attacking plaintiffs' status as acknowledged natural children

Please browse through the case. The case is long because of the discussion of how the Legitimate children gave money to the Natural children (all their family drama as well) and there was a discussion also about different kinds of Trust.



Diaz v. Gorricho and Agguado (1958) Doctrine

A constructive trust is a trust raised by constitution of law, or arising by operation of law. In constructive trusts, there is neither promise nor fiduciary relations; the so called trustee does not recognize

any trust and has no intent to hold the property for the beneficiary. Therefore, the trustor may acquire the property by acquisitive prescription and the action of the beneficiary may be barred by laches.

Facts

The spouses Francisco Diaz and Maria Sevilla were the registered owners of 2 lots in Cabanatuan City. They held these lots as conjugal partnership properties. Francisco died in 1919 and was survived by his widow, Maria Sevilla, and their 3 children, Manuel, Lolita and Constancia.

Sometime in 1935, Carmen Gorricho filed an action against Maria Sevilla (case did not indicate what action) and a writ of attachment was issued upon the shares of Maria Sevilla in the 2 lots. Carmen Gorricho acquired the properties in public auction. After 1 year, a deed of absolute sale was executed in her favor because Maria Sevilla was not able to redeem the property within this period. The issue lies in the mistake of the sheriff who gave the whole of the 2 lots to Carmen Gorricho, not merely the portion of the lots which she was in fact entitled to. The other portion properly belonged to the 3 children.

Maria died and her children filed an action to compel Gorricho and her spouse Aguado to reconvey of the property to them. The children allege that the portion was being held in trust by Gorricho and Aguada for them. They say that Gorricho acquired the whole of the property through the mistake of the sheriff and that Article 1456 of the Civil code states that properties acquired through error are subject to an implied trust. Also that prescription does not run against titled properties.

In her defense, Gorricho avers that there is no trust and that the action has prescribed.

Issues

1. Whether there exists an implied trust between Carmen Gorricho and the children of Maria Sevilla 2. Whether prescription runs against a trustor in a constructive trust. In relation, whether the action for

reconveyance by the beneficiaries is barred by laches

Held

1. There is an implied trust between Carmen Gorricho and the children of Maria Sevilla.

According to Article 1456 of the Civil Code of the Philippines, if property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes. It was the mistake of the sheriff in giving the entire property to Carmen Gorricho after the public auction when she was entitled only to the portion pertaining to Maria Sevilla. This mistake of the sheriff caused an implied trust to be created by operation of law between Carmen Gorricho and the children of Maria Sevilla.

2. The action for reconveyance of the beneficiaries is barred by laches

With regard to laches and prescription, there is a difference between express trusts and implied trusts. Remember that express trusts are created by intention of the parties, therefore, there is a fiduciary relationship. This fiduciary relationship disables the trustee from acquiring for his own benefit the property in his custody, at least while he does not openly repudiate the trust, and makes such repudiation known to the beneficiary. Therefore, a trustor in an express trust cannot adversely posses property in his custody and no acquisitive prescription can take place. In the case of an express trust, a beneficiary is entitled to rely upon the fidelity of the trustee. No laches exists until a reasonable time after a beneficiary is notified of a breach or other cause of suit against the trustee. Laches does exist, however, where suit is not commenced within such reasonable time.



As for constructive trusts, the relationship is created by operation of law. The relationship is not fiduciary in nature. Therefore, the trustor may acquire by prescription the property which is under his custody. Prescription runs from the time the trust is created by law. (However, this is principle is applicable under only when the beneficiary or the trustor is aware that a constructive trust was in fact created by operation of law.) The so-called trustee does not recognize any trust and has no intent to hold for the beneficiary; therefore, the beneficiary is not justified in delaying action to recover his property. It is his fault if he delays; hence, he may be estopped by his own laches.

The instant case involves a constructive trust, hence, Carmen Gorricho may acquire the property by prescription. Also, the Supreme Court held that the action for reconveyance instituted by the children of Maria Sevilla is barred by laches. It took them 15 years to assert their right. The action for reconveyance is dismissed.

Ouano vs. Republic of the Philippines (2011) (expropriation, Lahug airport, constructive trust) Doctrines:

Constructive trusts are fictions of equity that courts use as devices to remedy any situation in which the holder of the legal title, MCIAA in this case, may not, in good conscience, retain the beneficial interest.

Facts:

Case is a consolidation of two petitions.

In 1949, the National Airport Corporation (NAC) pursued a program to expand the Lahug Airport in Cebu. NAC negotiated with the owners of the properties around the airport. The landowners claimed that the government negotiating team, as a sweetener, ASSURED them that they could repurchase their respective lands should the Lahug airport expansion project do no push through or once the Lahug airport closes or its operations transferred to Mactan-Cebu Airport.

Some of the landowners accepted the assurance and executed deeds of sale with right of repurchase. Others refused to sell because the purchase price was way below market value forcing the government to file a complaint for expropriation. RTC ruled for the government. The former owners did not appeal the decision of the trial court in view of the BUY-BACK assurance made by the government. New TCTs were issued in the name of the Republic which, pursuant to R.A. 6958, was subsequently transferred to MCIAA.

Soon after the transfer of the lots to MCIAA (end of 1991), Lahug airport completely ceased operations, Mactan airport having opened to accommodate incoming and outgoing commercial flights. On the ground, the expropriated lots were NEVER UTILIZED for the purpose they were taken as no expansion of Lahug Airport was undertaken. The former lot owners formally demanded from the government that they be allowed to exercise their promised right to repurchase.

Ouano Petition:

Soon after the MCIAA abandoned the Lahug Airport expansion project, informal settlers entered and occupied Lot 763-A which, before its expropriation, belonged to the Ouanos. They are asking the court for the repurchase of the lot because MCIAA ignored the demand.

MCIAA Petition:

Inocian and 4 others (children of Limbaga who originally owned 6 of the lots expropriated) and Magat (and 7 others) filed before the RTC for reconveyance of real properties and damages against MCIAA.

During trial, Inocians presented the testimony of Inocians and Uy. Uy, an employee of the CAA, testified that he was a member of the team which negotiated for the acquisition of certain lots for the expansion of the Lahug airport. He said that their team assured the landowners that their landholdings would be reconveyed to them in the event that the Lahug Airport would be abandoned or if its operations were transferred to the Mactan airport.



Inocian testified that he and his mom, attended a meeting called by the NAC team where they were also given the same assurance. They no longer appealed in the expropriation case due to the repurchase assurance.

Issues:

1. W/N the petitioners are entitled to recover their property simply on the basis of an alleged verbal promise or assurance?

Held/Ratio:

1. YES. There exists an undeniable historical narrative that the predecessors of MCIAA had suggested to the landowners of the properties covered by the Lahug Airport expansion scheme that they could repurchase their properties at the termination of the airports venue. MCIAAs invocation of the Statute of Frauds is misplaced primarily because the statue applies only to executory contracts and not partially consummated contracts. In effect, the government merely held the properties condemned in trust until the proposed public use or purpose for which the lots were condemned was actually consummated by the government. Since the government failed to perform the obligation that is the basis of the transfer of the property, then the lot owners Ouanos and Inocians can demand reconveyance of their old properties after payment of condemnation price. Constructive trust are fictions of equity that courts use as devices to remedy any situation in which the holder of the legal title, MCIAA in this case, may not, retain the beneficial interest. The landowners, in establishing the trust must himself do equity in a manner as the court may deem just and reasonable. A condemnor should commit to use the property pursuant to the purpose stated in the petition for expropriation, failing which it should file another petition for the new purpose. If not, the condemnor should return the said property to its private owner, if the latter so desires.



Lopez v. Court of Appeals (2008) (be mindful of the dates, prescription ang kailangan dito). Doctrine

1. The difference between resulting, and constructive implied trust. (Please see For the Topic of the Class Aznar Brothers v. Aying)

2. Article 1456 (please see the footnotes) 3. The right to seek reconveyance based on an implied or constructive trust is not absolute. It is subject to

extinctive prescription. An action for reconveyance based on implied or constructive trust prescribes in 10 years. This period is reckoned from the date of the issuance of the original certificate of title or transfer certificate of title. Since such issuance operates as a constructive notice to the whole world, the discovery of the fraud is deemed to have taken place at that time.

Facts The instant petition stemmed from an action for reconveyance instituted by petitioner Richard B. Lopez in his

capacity as trustee of the estate of the late Juliana Lopez Manzano (Juliana) to recover from respondents several large tracts of lands allegedly belonging to the trust estate of Juliana.

The decedent, Juliana, was married to Jose Lopez Manzano (Jose). Their union did not bear any children. Juliana was the owner of several properties, among them, the properties subject of this dispute. The disputed properties totaling more than 1,500 hectares consist of six parcels of land. They were the exclusive paraphernal properties of Juliana.

On 23 March 1968, Juliana executed a notarial will, whereby she expressed that she wished to constitute a trust fund for her paraphernal properties, to be known as Fideicomiso, to be administered by her husband. If her husband were to die or renounce the obligation, her nephew, Enrique Lopez, was to become administrator and executor of the Fideicomiso. As to her conjugal properties, Juliana bequeathed the portion that she could legally dispose to her husband, and after his death, said properties were to pass to her great grandchildren.

Juliana died on 12 August 1968. The petition was pursued instead in Special Proceeding (SP 706) by her husband, Jose, who was the designated executor in the will. On 7 October 1968, the probate court, admitted the will to probate and issued the letters testamentary to Jose. Jose then submitted an inventory of Juliana's real and personal properties with their appraised values, which was approved by the probate court.

Thereafter, Jose filed a Report dated 16 August 1969, which included a proposed project of partition. In the report, Jose explained that as the only compulsory heir of Juliana, he was entitled by operation of law to one-half (1/2) of Juliana's paraphernal properties as his legitime, while the other one-half (1/2) was to be constituted into the Fideicomiso. At the same time, Jose alleged that he and Juliana had outstanding debts totaling P816,000.00 excluding interests, and that these debts were secured by real estate mortgages. He noted that if these debts were liquidated, the "residuary estate available for distribution would, value-wise, be very small."

On 25 August 1969, the probate court issued an order approving the project of partition. As to the properties to be constituted into the Fideicomiso, the probate court ordered that the certificates of title thereto be cancelled, and, in lieu thereof, new certificates be issued in favor of Jose as trustee of the Fideicomiso covering one-half (1/2) of the properties listed on the project of partition; and regarding the other half, to be registered in the name of Jose as heir of Juliana. The properties which Jose had alleged as registered in his and Juliana's names, including the disputed lots, were adjudicated to Jose as heir, subject to the condition that Jose would settle the obligations charged on these properties. The probate court, thus, directed that new certificates of title be issued in favor of Jose as the registered owner thereof in its Order dated 15 September 1969. On even date, the certificates of title of the disputed properties were issued in the name of Jose.

The Fideicomiso was constituted in S.P No. 706 encompassing one-half (1/2) of the Abra de Ilog lot on Mindoro, the 1/6 portion of the lot in Antorcha St. in Balayan, Batangas and all other properties inherited ab intestato by Juliana from her sister, Clemencia, in accordance with the order of the probate court in S.P. No. 706. The disputed lands were excluded from the trust.



Jose died on 22 July 1980. Pursuant to Jose's will, the RTC ordered on 20 December 1983 the transfer of the disputed properties to the respondents as the heirs of Jose. Consequently, the certificates of title of the disputed properties were cancelled and new ones issued in the names of respondents.

Petitioner's father, Enrique Lopez, assumed the trusteeship of Juliana's estate. On 30 August 1984, the RTC of Batangas appointed the petitioner as trustee of Juliana's estate. On 11 December 1984, petitioner instituted an action for reconveyance of parcels of land with sum of money before the RTC of Balayan, Batangas against respondents. The complaint alleged that Jose was able to register in his name the disputed properties, which were the paraphernal properties of Juliana, either during their conjugal union or in the course of the performance of his duties as executor of the testate estate of Juliana and that upon the death of Jose, the disputed properties were included in the inventory as if they formed part of Jose's estate when in fact Jose was holding them only in trust for the trust estate of Juliana.

On 10 September 1990, the RTC rendered a summary judgment, dismissing the action on the ground of prescription of action. Hence, this petition. Issue

1. W/N the action for reconveyance has prescribed? Held & Ratio

1. Yes. The resolution of this issue calls for a determination of whether or not that there was an implied trust constituted over the disputed properties when Jose, the trustee, registered them in his name. If there was an implied trust, then it will be subject to extinctive prescription of 10 years. The Court found that there was indeed an implied, constructive trust when the court, by an apparent mistake, excluded the disputed properties in the Fideicomiso and subsequently adjudicated the same to be registered under Joses name as heir. The reckoning point of the prescription was 15 September 1969, when the disputed properties, by court order, were registered under Joses name.1 Petitioner insists that an express trust was constituted over the disputed properties; thus the registration of the disputed properties in the name of Jose as trustee cannot give rise to prescription of action to prevent the recovery of the disputed properties by the beneficiary against the trustee. Juliana did indeed intend to constitute an express trust, but the disputed properties were expressly excluded from the Fideicomiso. The probate court adjudicated the disputed properties to Jose as the sole heir of Juliana. If a mistake was made in excluding the disputed properties from the Fideicomiso and adjudicating the same to Jose as sole heir, the mistake was not rectified as no party appeared to oppose or appeal the exclusion of the disputed properties from the Fideicomiso. Moreover, the exclusion of the disputed properties from the Fideicomiso bore the approval of the probate court. The issuance of the probate court's order adjudicating the disputed properties to Jose as the sole heir of Juliana enjoys the presumption of regularity. On the premise that the disputed properties were the paraphernal properties of Juliana which should have been included in the Fideicomiso, their registration in the name of Jose would be erroneous and Jose's possession would be that of a trustee in an implied trust. Implied trusts are those which, without being expressed, are deducible from the nature of the transaction as matters of intent or which are superinduced on the transaction by operation of law as matters of equity, independently of the particular intention of the parties. The facts of the case are governed by Article 14562.

1 This period is reckoned from the date of the issuance of the original certificate of title or transfer certificate of title. Since such issuance operates as a constructive notice to the whole world, the discovery of the fraud (or mistake as is in the case) is deemed to have taken place at that time. 2 Article 1456 of The Civil Code of the Philippines. This article provides:



For the Topic of the Class In further, the Court differentiated two kinds of implied trusts in Aznar Brothers Realty Company v. Aying, to wit:

x x x In turn, implied trusts are either resulting or constructive trusts. These two are differentiated from each other as follows:

Resulting trusts are based on the equitable doctrine that valuable consideration and not legal title determines the equitable title or interest and are presumed always to have been contemplated by the parties. They arise from the nature of circumstances of the consideration involved in a transaction whereby one person thereby becomes invested with legal title but is obligated in equity to hold his legal title for the benefit of another. On the other hand, constructive trusts are created by the construction of equity in order to satisfy the demands of justice and prevent unjust enrichment. They arise contrary to intention against one who, by fraud, duress or abuse of confidence, obtains or holds the legal right to property which he ought not, in equity and good conscience, to hold.

A resulting trust is presumed to have been contemplated by the parties, the intention as to which is to be found in the nature of their transaction but not expressed in the deed itself. Specific examples of resulting trusts may be found in the Civil Code, particularly Arts. 1448, 1449, 1451, 1452 and 1453.

A constructive trust is created, not by any word evincing a direct intention to create a trust, but by operation of law in order to satisfy the demands of justice and to prevent unjust enrichment. It is raised by equity in respect of property, which has been acquired by fraud, or where although acquired originally without fraud, it is against equity that it should be retained by the person holding it. Constructive trusts are illustrated in Arts. 1450, 1454, 1455 and 1456.

ART. 1456. If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes.



Salao v Salao (1976) (fishpond inheritance) Doctrine:

An implied trust, to be recognized, must measure up to the yardstick that a trust must be proven by clear, satisfactory evidence, and cannot rest on vague and uncertain evidence or on loose, equivocal or indefinite declarations

Facts:

The Spouses Manuel Salao and

AgPart 925- Trust Digest

Documents

Transcript of AgPart 925- Trust Digest