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By: Jacqueline Ann Quinto

LABANON vs LABANON  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. Trusts are classified under the Civil Code as either express or implied. Such classification determines the prescriptive period for enforcing such trust. No particular form of words or conduct is necessary for the manifestation of intention to create a trust. It is possible to create a trust without using the word "trust" or "trustee". Conversely, the mere fact that these words are used does not necessarily indicate an intention to create a trust. The question in each case is whether the trustor manifested an intention to create the kind of relationship which to lawyers is known as trust. It is immaterial whether or not he knows that the relationship which he intends to create is called a trust, and whether or not he knows the precise characteristics of the relationship which is called a trust. An express trust is created by the direct and positive acts of the parties, by some writing or deed or by words evidencing an intention to create a trust; the use of the word trust is not required or essential to its constitution, it being sufficient that a trust is clearly intended. Under Section 40 of the old Code of Civil Procedure, all actions for recovery of real property prescribed in 10 years, excepting only actions based on continuing or subsisting trusts that were considered by section 38 as imprescriptible. As held in the case of Diaz v. Gorricho, L11229, March 29, 1958, however, the continuing or subsisting trusts contemplated in section 38 of the Code of Civil Procedure referred only to express unrepudiated trusts, and did not include constructive trusts (that are imposed by law) where no fiduciary relation exists and the trustee does not recognize the trust at all. that the prescriptive period for the enforcement of an express trust of ten (10) years starts upon the repudiation of the trust by the trustee. PIGAO vs RABANILLO  there is an implied trust when property is sold, and the legal estate is granted to one party but the price is paid

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by another for the purpose of having the beneficial interest of the property." The former party is referred to as the trustee, while the latter is referred to as the beneficiary. Trusts are either express or implied. Express trusts are created by the intention of the trustor or of the parties, while implied trusts come into being by operation of law, either through implication of an intention to create a trust as a matter of law or through the imposition of the trust irrespective of, and even contrary to, any such intention. In turn, implied trusts are either resulting or constructive trusts. Resulting trusts are based on the equitable doctrine that valuable consideration and not legal title determines the equitable title or interest and are presumed always to have been contemplated by the parties. They arise from the nature or circumstances of the consideration involved in a transaction whereby one person thereby becomes invested with legal title but is obligated in equity to hold his legal title for the benefit of another. A resulting trust is exemplified by Article 1448 of the Civil Code . . . The trust created under the first sentence of Article 1448 is sometimes referred to as a purchase money resulting trust. The trust is created in order to effectuate what the law presumes to have been the intention of the parties in the circumstances that the person to whom the land was conveyed holds it as trustee for the person who supplied the purchase money. To give rise to a purchase money resulting trust, it is essential that there be:1. an actual payment of money, property or services, or an equivalent, constituting valuable consideration;2. and such consideration must be furnished by the alleged beneficiary of a resulting trust. There are recognized exceptions to the establishment of an implied resulting trust. The first is stated in the last part of Article 1448 itself. Another exception is, of course, that in which an actual contrary intention is proved. Also where the purchase is made in violation of an existing statute and in evasion of its express provision, no trust can result in favor of the party who is guilty of the fraud. Another exception to the establishment of an implied resulting trust under Article 1448 is when its enforcement contravenes public policy. Otherwise stated, as an exception to the law on trusts, "[a] trust or a provision in the terms of a trust is invalid if the enforcement of the trust or provision would be against public policy, even though its performance does
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It is a relationship. by some writing. It is a relationship of fiduciary character. either through implication of an intention to create a trust as a matter of law or through the imposition of the trust irrespective of. good customs. The first is stated in the last part of Article 1448 itself. Based on the provisions of the Civil Code and jurisprudence.e. Locsin. deed or will.. Resulting trusts are based on the equitable doctrine that valuable consideration and not legal title determines equitable title or interest and are presumed always to have been contemplated by the parties. GOMEZ vs DUYAN  . They arise contrary to intention against one who. property or services. They arise from the nature or circumstances of the consideration involved in a transaction whereby — one person thereby becomes invested with legal title but is because obligated in equity to hold his legal title for the benefit of another.By: Jacqueline Ann Quinto  not involve the commission of a criminal or tortious act by the trustee. and such consideration must be furnished by the alleged beneficiary of a resulting trust. There are recognized exceptions to the establishment of an implied resulting trust. It has been held that a trustee who obtains a Torrens title over the property held in trust by him for another cannot repudiate the trust by relying on the registration. Thus. The law safeguards the rightful party's interest in titled land from fraud and improper technicalities by allowing such party to bring an action for reconveyance of whatever he has been deprived of as long as the property has not been transferred or conveyed to an innocent purchaser for value. it is not necessary that the document expressly state and provide for the express trust. an actual payment of money. duress or abuse of confidence. where A pays the purchase money and title is conveyed by absolute deed to A's child or to a person to whom A stands in loco parentis and who makes no 2 . 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. no particular words are required for its creation Petitioners cannot rely on the registration of the disputed property and the corresponding issuance of a certificate of title in their name as vesting ownership on them simply because an express trust over the property was created in favor of respondents. any such intention. by fraud. 4. Express trusts are created by the intention of the trustor or of the parties. or words evincing an intention to create a trust. It arises as a result of a manifestation of intention to create the relationship. obtains or holds the legal right to property which he ought not. 48 As this Court held in the case of Escobar vs. the equitable ownership of the former entitling him to the performance of certain duties and the exercise of certain powers by the latter. they cannot impliedly or implicitly do so in the guise of a resulting trust. — In turn. morals. 2. It is a relationship with respect to property." MORALES vs CA        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. To give rise to a purchase money resulting trust. The trust is created in order to effectuate what the law presumes to have been the intention of the parties recovery in the circumstances that the person to whom the land was conveyed holds it as trustee for the person who supplied the purchase money. and 5. it being sufficient that a trust is clearly intended. constituting valuable consideration. constructive trusts are created by the construction of equity in order to satisfy the defendants of justice and prevent unjust enrichment. while implied trusts come into being by operation of law. for it may even be created orally. the establishment of an express trust cannot be discounted. "Express trusts are those which the direct and positive acts of the parties create. the trust created was not merely implied as held by the Court of Appeals but belongs to the express kind. Under the Civil Code. their stipulations must not be contrary to law. not one involving merely personal duties. public order. What the parties then cannot expressly provide in their contracts for being contrary to law and public policy. to hold. 47 The action while respecting the registration decree as incontrovertible. i. and even contrary to. seeks to transfer or reconvey the land from the registered owner to the rightful owner." The parties must necessarily be subject to the same limitations on allowable stipulations in ordinary contracts." Even if the word "trust" was not expressly used by the signatories to the 10 February 1978 Pagpapahayag and the document did not expressly state that a trust was being established by reason thereof. The characteristics of a trust are: 1. Trusts are either express or implied. "The Torrens system was never calculated to foment betrayal in the performance of a trust. implied are either resulting or constructive trusts. it is essential that there be: 1. "No particular words are required for the creation of an express trust. or an equivalent. On the other hand. 2." under the law on Trusts. in equity and good conscience. The trust created under the first sentence of Article 1448 is sometimes referred to as a purchase money resulting trust. 3. or public policy.

such as the Statute of Frauds. the principal. the burden of proving the existence of a trust is on the party asserting its existence. Y. the burden of proving the existence of a trust is on the party asserting its existence. upon vague and inconclusive proof. RINGOR vs RINGOR  Where a trust is to be established by oral proof. TRUSTEE CANNOT INVOKE STATUTE OF LIMITATIONS AGAINST "CESTUIS QUE TRUSTENT. personal. to make such reparation as may lie within his power for the breach of trust committed by him. 53 Thus. the evidence must be trustworthy and received by the courts with extreme caution and should not be made to rest on loose. While oftentimes the intention is manifested by the trustor in express or explicit language. a writing is not a requisite for the creation of a trust. The characteristics of a trust are:1. or from the circumstances surrounding the creation of the purported trust. and such proof must be clear and satisfactorily show the existence of the trust and its elements.2.By: Jacqueline Ann Quinto   express promise. y R. the objection to the oral character of a trust may be overcome or removed where there has been partial performance of the terms of the trust as to raise an equity in the promisee. When the claim to the lots in the cadastral case was withdrawn by the respondents relying upon the assurance and promise made in open court by Dr. there appears to be no reason why the agent should not be compelled. or was created thereby. 46 Unless The principal's right of action to compel a reconveyance is not extinguished through the registration of the land in favor of the agent. which in a broad sense involves. it arises as a result of a manifestation of intention to create the relationship. sometimes referred to as direct trusts. funds or money. or oral declaration. Another exception is. Y. A trust cannot be established.. that in which an actual contrary intention is proved. it is a relationship with respect to property. it being sufficient that a trust was clearly intended. 45 It is created not necessarily by some written words. or choses in action — must not be confused with an action for specific performance. or will. equivocal or indefinite declarations. which applies only to an executory agreement. It is a relationship. it is a relationship of fiduciary character. a trust does not result. through a suit in equity. contrary to the recitals of a Torrens title. the predecessor-in-interest of the petitioners. a trust or a fiduciary relation between them arose. 3. of course. 3 . though the final decree of registration may not be reopened after the expiration of one year from the date of its entry. no trust can result in favor of the party who is guilty of the fraud. the beneficiary is protected in benefits that he has received from such performance. and 5. No particular words are required. PACHECO vs ARRO   required by a statutory provision. TY vs TY   JURIDICAL CONCEPT OF A TRUST." — The juridical concept of a trust. from the nature of the transaction. Also where the purchase is made in violation of an existing statute and in evasion of its express provision. in behalf of J. or resulted therefrom. 4. but by the direct and positive acts of the parties. the testimony supporting it must be sufficiently strong to prove that the right of the alleged beneficiary with as much certainty as if a document were shown. and such proof must be clear and satisfactorily show the existence of the trust and its elements. the evidence must be trustworthy and received by the courts with extreme caution and should not be made to rest on loose. i. 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. when a verbal contract has been completed. arises from. Trustworthy evidence is required because oral evidence can easily be fabricated. or is the result of. M. its enforceability will not be barred by the Statute of Frauds. a fiduciary relation between the trustee and the cestui que trust as regards certain property — real. executed or partially consummated. Under the doctrine of partial performance recognized in this jurisdiction. the presumption being that a gift was intended.e. not one involving merely personal duties. While implied trusts may be proved by oral evidence. 52 A trustee may perform the provisions of the trust. are intentionally created by the direct and positive acts of the settlor or the trustor — by some writing. Trustworthy evidence is required because oral evidence can easily be fabricated SEVERINO vs SEVERINO   Express trusts. and if he does. As a rule. What is crucial is the intention to create a trust. While implied trusts may be proved by oral evidence. The trustee cannot invoke the statute of limitations to bar the action and defeat the right of the cestuis que trustent. such intention may be manifested by inference from what the trustor has said or done. equivocal or indefinite declarations. and as long as the land stands registered in his name such reparation may take the form of a conveyance or transfer of the title to the cestui que trust. deed..

Accordingly. and need not be a mistake or fraud committed directly by the trustee himself under the implied trust.00 (leaving his clients still owing him P1. he was entitled to ask only for one-half (1/2) of the land. however. by duress or abuse of confidence. PRINCIPLES OF GENERAL LAW OF TRUSTS CONSISTENT WITH EXISTING LAWS INCORPORATED IN OUR CIVIL LAW. and no excuse will be heard from the trustee. It is not clearly shown from the statute itself that the PHILSUCOM imposed on itself the obligation of holding the stabilization fund for the benefit of the sugar producers. Pascua. an involuntary trust. The rule stands on the moral obligation to refrain from placing one's self in positions which ordinarily excite conflicts between selfinterest and integrity.3445 hectares for himself. STABILIZATION FUND. actual or constructive. is a trust by operation of law which arises contrary to intention and in invitum. against one who. the person obtaining it is. an implied trust was established upon the land acquired by Atty. Pascua. trustee. or an implied trust. 4 . by fraud. or any other person occupying fiduciary relations respecting property or persons. v. Pascua obviously knew that under his contract with his clients. It must be categorically demonstrated that the very administrative agency which is the source of such regulation would place a burden on itself SUMAOANG vs RTC JUDGE  OBLIGATIONS AND CONTRACTS. is utterly disabled from acquiring for his own benefit the property committed to his custody for management. under the circumstances of this case. where petitioner had retained property the beneficial ownership of which belonged to the private respondents. The Supreme Court rested its decision on the principles of the general law of trusts which. proof of the fiduciary relations and of the breach of trust must be clear and convincing. or who in any way against equity and good conscience. the Supreme Court affirmed the decision of the Court of Appeals directing petitioner to convey title to that property to private respondents. a trust ex delicto.500. NOT IMPLIED TRUST CREATED IN FAVOR OF SUGAR PRODUCERS. Among the species of implied trusts recognized by our Civil Code is that set forth in Article 1456: "If property is acquired through mistake or fraud. It applies universally to all who come within its principle. Atty. or questionable means. MISTAKE OR FRAUD GIVING RISE THERETO MAY BE THAT OF A THIRD PERSON AND NOT THAT OF TRUSTEE. "A receiver. artifice. must be regarded as holding the title of the property acquired by him at public sale under an implied trust in favor of petitioner and his brothers. or by any form of unconscionable conduct. to the extent that such principles are not inconsistent with the Civil Code and other statutes and the Rules of Court. It seeks to remove the temptation that might arise out of such a relation to serve one's selfinterest at the expense of one's integrity and duty to another. concealment. by force of law.By: Jacqueline Ann Quinto   — There is a strong presumption in favor of the regularity and validity of a registered title." GASTON vs REPUBLIC PLANTERS BANK   PRESIDENTIAL DECREE 388. Respondent Judge may be seen to have intended to convey only one-half (1/2) of the land involved as attorney's fees to Atty.00). — The conclusion we reach in this case rests not only on Article 1456 of the Civil Code but also on the principles of the general law of trusts which. included the following general principles embedded in American law and jurisprudence: "A constructive trust. Atty. agent. considered a trustee of an implied trust for the benefit of the person from whom the property comes. Jr. by commission of wrong. Court of Appeals." The "mistake" or "fraud" that results in an implied trust being impressed upon the property involved. to the extent of one-half (1/2) of that property. — No implied trust in favor of the sugar producers either can be deduced from the imposition of the levy. attorney. in the instant case. and in order to maintain an action to compel the transfer of the title to a cestui que trust. — We believe and so hold that respondent Atty. No fraud in fact need be shown. through Article 1442 of the Civil Code. IMPLIED OR PRESUMED INTENT. the Court held. This rule is entirely independent of the fact whether any fraud has intervened. Pascua. by making it impossible to profit by yielding to temptation. IMPLIED TRUST. Pascua even though the operative mistake was a mistake of respondent trial judge.000. CONSTRUCTIVE TRUST CREATED AS MEANS OF ACCORDING RELIEF AND NOT BASED ON EXPRESSED. have been adopted or incorporated into our civil law. When he purchased the entire land at public auction for P110. "The essential idea of an implied trust involves a certain antagonism between the cestui que trust and the trustee even when the trust has not arisen out of fraud nor out of any transaction of a fraudulent or immoral character (65 CJ 222). CASE AT BAR. a trust de son tort. It is to avoid the necessity of any such inquiry that the rule takes so general a form. may be the mistake or fraud of a third person. took advantage of the Judge's mistake in order to acquire all the 21. In Roa. the amount and character of his attorney's fees became unreasonable and unconscionable and constituted unjust enrichment at the expense of his clients. otherwise known as a trust ex maleficio.

And since We are a court of law and of equity. In the words of Judge Cardozo. A constructive trust is created by a court of equity as a means of affording relief. notwithstanding that the enjoyment in the beneficiary will take place in the future. it cannot rest on vague and uncertain evidence or on loose.' The above principle is not in conflict with the New Civil Code. satisfactory and convincing evidence. Pascua may have derived from or in respect of such land during the time he has held the same. to petitioner and his brothers. 1267. in accordance with its fundamental principles and the traditional exercise of its jurisdiction or in accordance with statutory provision. and that the court. are not sufficient to establish a trust. held in trust. and sufficiently certain beneficiaries. Vitaliano and Pedro Sumaoang. hold and enjoy. require private respondent Atty. there must be a present and complete disposition of the trust property. it is fatal to the trusts. that the implied trustee shall deliver the possession and reconvey title to the property to the beneficiary of the trust. and otherwise to adjust the equities between the trustee holding the legal title and the beneficiaries of the trust. an ascertainable trust res. It has been broadly ruled that a breach of confidence. Applying the provisions of Article 1456 of the Civil Code and the foregoing principles of the general law of trusts. It is essential. ordinarily such a trust arises and will be declared only on wrongful acquisitions or retentions of property of which equity. equity converts him into a trustee. Packson. BDO vs BAYUGA  The unfairness and inequity of this posture to the banking business is too evident to require elaboration. or even on an implied or presumed intent. and one that is not in contravention of some prohibition of statute or rule of public policy. Basically. It is raised by equity to satisfy the demands of justice. may enforce. in Beatty v.: "[w]hen property has been acquired in such circumstances that the holder of the legal title may not in good conscience retain the beneficial interest. Constructive trusts constitute a remedial device "through which preference of self is made subordinate to loyalty to others. and. although in business or social relations. in equity and good conscience. conscience and fair dealing and the respondent court said. raises a constructive trust. Furthermore. too. 11 Phil. Guggenheim Exploration Co. equivocal or indefinite declarations. However. MINDANAO DEV. Pascua to reconvey or cause the reconveyance of one-half (1/2) of the 21. There must also be some power of administration other than a mere duty to perform a contract although the contract is for a third-party beneficiary. a trust must he proven by clear.By: Jacqueline Ann Quinto  either has obtained or holds the legal right to property which he ought not. these elements include a competent trustor and trustee." The consequences of an implied trust are.3445 hectares of land here involved. plus one-half (1/2) of all profits (net of expenses and taxes) which Atty. is not based on an expressed intent that it shall exist. etc.' " A constructive trust. in a sense. Code of Commerce. morality. we treat the present so-called "petition for Annulment of the Decision of the CFI. 'It behooves upon the courts to shield fiduciary relations against every manner of chicanery or detestable design cloaked by legal technicalities. 5  . — Clear and unequivocal language is necessary to create a trust and mere precatory language and statements of ambiguous nature." as a "Petition for Reconveyance" and. if called upon to do so. Funds of a bank are. in general usage in the United States. although acquired originally without fraud. that the purpose be an active one to prevent trust from being executed into a legal estate or interest. and these must be stated with reasonable certainty in order that the trustee may administer. takes cognizance. Rules of Court and special laws. but nevertheless each of the above elements is required to be established. And specifically applicable to the case at bar is the doctrine that 'A constructive trust is substantially an appropriate remedy against unjust enrichment. principally. As the Court stated in De Leon vs. the trus CLEAR AND UNEQUIVOCAL LANGUAGE NECESSARY TO CREATE TRUST. It is raised by equity in respect of property which has been acquired by fraud. A declaration of terms is essential. rendering an acquisition or retention of property by one person unconscionable against another. if anyone of them is missing." In particular. There are the interests of depositors to be protected. the case at bar must be resolved on the general principles of law on constructive trust which basically rest on equitable considerations in order to satisfy the demands of justice. and to pay to the latter the fruits and other net profit received from such property during the period of wrongful or unconscionable holding. Stilted formalities are unnecessary. it is against equity that it should be retained by the person holding it. a constructive trust does not arise on every moral wrong in acquiring or holding property or on every abuse of confidence in business or other affairs. accordingly. AUTHORITY vs CA  — It is fundamental in the law of trusts that certain requirements must exist before an express trust will be recognized. fraud on the part of the person holding or detaining the property at stake is not essential in order that an implied trust may spring into being. or where.

then the trust is implied. WRITTEN EVIDENCE REQUIRED. CASE AT BAR. On the other hand. Thus. Such negligence does not prejudice the State. CASE AT BAR. of the title of land in question. For sure. Express trusts are those created by the direct and positive acts of the parties. that an express trust had been established. the right alleged by plaintiffs would have already prescribed since starting in 1936 when the trustor died. — From the provisions of paragraph 8 of the complaint herein. PERIOD OF PRESCRIPTION. by force of law. IMPLIED TRUST. 26 in the names of Victoria Ang Bansing. — But. the so. Civil Code). — Article 1453. the person obtaining it is. there is neither promise nor fiduciary relations. STATE NOT ESTOPPED BY NEGLIGENCE OF PUBLIC OFFICERS. then the complaint was properly dismissed. Clearly. it would appear that the trustee had repudiated the trust and the petitioner did not take any action therein until after the lapse of 23 years. PRESCRIPTIBLE. Thus. if the intention to establish a trust is clear. From that date up to April 11. It does not arise by agreement or intention. the period for enforcing the alleged beneficiary over the land in question after the repudiation of the trust by the trustee. such an express trust over an immovable may not be proved by parole evidence. ARTICLE 1453." Considering that the demand was made in behalf of the Commonwealth Government. are deducible from the nature of the transaction by operation of law as matters of equity. more than 28 years had passed. 1141). if the intent to establish a trust is to be taken from circumstances or other matters indicative of such intent. the action for reconveyance had prescribed. filed on June 29. the trust is express. unlike the case at bar where he was alleged to have expressed such intent. 40. PRESCRIPTIBLE. 1969. now the Republic of the Philippines. Here. would apply if the person conveying the property did not expressly state that he was establishing the trust. 1941. And even under the Code of Civil Procedure. considered a trustee of an implied trust for the benefit of the person from whom the property comes (Article 1456. EXPRESS TRUST OF AN IMMOVABLE. 6    . In implied trust. and Francisco Ang Bansing. — An implied trust may have been impressed upon the title of Ang Bansing over Lot 1846-C of the Davao Cadastre since the land in question was registered in his name although the land belonged to another. Since the complaint did not mention the written instrument of the alleged trust and since the complaint was not amended as per instruction of the Judge below.called trustee does not recognize any trust and has no intent to hold the property for the beneficiary. CASE AT BAR. From 1946 to 1969. upon the issuance of Original Certificate of Title No. 1969. — Even assuming the alleged trust to be an implied one. and an implied trust as one that comes into being by operation of law (Art.By: Jacqueline Ann Quinto      REPUDIATION THEREOF RENDERS TRUST. IMPLIED TRUST. — The government officials concerned were negligent in not intervening in the land registration proceeding or in not promptly asking Ang Bansing to reconvey the disputed lot to the Commonwealth or to the Republic of the Philippines. especially since it is alleged that the trustor expressly told the defendants of his intention to establish the trust. it is obvious that the said demand was made before July 4.more than the 10 . plaintiffs had already been allegedly refused by the defendants in their demands over the land. in its Reply to the Defendant's Answer. when the Commonwealth Government was dismantled and the Republic of the Philippines came into being. independently of the particular intention of the parties. and the complaint was filed only in 1961 . without being expressed. it is clear that plaintiffs alleged an express trust over an immovable. 1946. Orfelina Ang Bansing. . even granting arguendo. but the defendant ignored and evaded the same. Lot 1846-C. the 10 year prescriptive period began on March 31.year period of such prescription for the enforcement of such rights under the trust. one of the cases of implied trust. when the action for reconveyance was filed with the court. if property is acquired through mistake or fraud. action to recover real property such as lands prescribes in ten years (Sec. It is settled that the right to enforce an implied trust in one's favor prescribes in 10 years. — Such constructive trust is not a trust in the technical sense and prescribes in 10 years. CASE AT BAR. Under Article 1443 of the Civil Code. WHEN APPLICABLE. — There being an express trust in this case. by some writing or deed or will or by words evidencing an intention to create a trust. Act 190). but by operation of law. NOT PRESCRIPTIBLE. The negligence or omissions of public officers as to their public duties will not work an estoppel against the State CUAYCNG vs CUAYCONG  Civil Code defines an express trust as one created by the intention of the trustor or of the parties. 23 years had passed. had already prescribed. implied trusts are those which. petitioner admitted that "after the last war she City Engineer's Office of Davao City made repeated demands on the defendants for the delivery and conveyance to the Commonwealth Government. when the complaint for reconveyance was filed. the equitable action to compel the trustee to reconvey the land registered in his name in trust for the benefit of the cestui que trust does not prescribe ESTOPPEL. Thus.

PAROL EVIDENCE CANNOT BE AVAILED OF TO PROVE AN EXPRESS TRUST CONCERNING REALTY. ID. to the beneficial enjoyment of property. NO TRUST CREATED OVER QUESTIONED PROPERTY." PROOF OF. a trust is defined as the right.By: Jacqueline Ann Quinto SINAON vs SORONGAN  There was no express trust in this case. either expressly or impliedly evincing a direct intention to create a trust. J. real. whose statute of limitation would apply if there were an implied trust in this case. KINDS OF. PLAINTIFFS ACTION BARRED BY PRESCRIPTION OR LACHES. contrary to the recitals of a Torrens title. for the heirs of Valentin Salao. DISTINGUISHED. independently of the particular intention of the parties" (89 C. parol evidence cannot be used to prove an express trust concerning realty. 7 .. — There was no resulting trust in this case because there never was any intention on the part of Juan Y. An implied trust "cannot be established. but not expressed in the deed or instrument of conveyance (89 C. RESULTING AND CONSTRUCTIVE TRUST DISTINGUISHED. The prescriptive period is reckoned from the issuance of the title which operates as a constructive notice SALAO vs SALAO  — In its technical legal sense.. 724). or will or by words either expressly or impliedly evincing an intention to create a trust" (89 C. 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. are deducible from the nature of the transaction as matters of intent. 1443 and 1457). IMPLIED TRUST MAY BE PROVEN BY ORAL EVIDENCE. 1441. satisfactory and convincing evidence. On the other hand." (Art." It does not arise "by agreement or intention. EXPRESS AND IMPLIED TRUSTS. Sr. 190. a constructive trust is a trust "raised by construction of law. The written extrajudicial demand for its reconveyance was made by the plaintiffs in 1951.S. 722). Sr. but in its more restricted sense it is a trust raised by implication of law and presumed always to have been contemplated by the parties. 722).J. It cannot rest on vague and uncertain evidence or on loose. the longest period of extinctive prescription was only ten years. Salao. There was no constructive trust because the registration of the two fishponds in the names of Juan and Ambrosia was vitiated by fraud or mistake. Plaintiffs utterly failed to measure up to the yardstick that a trust must be proven by clear. but by operation of law. a constructive trust is "a trust not created by any words. S. Civil Code).S. 11. one in whom confidence is reposed as regards the property for the benefit of the another person is know as the trustee. Salao.. but by the constructions of equity in order to satisfy the demands of justice. may be barred by prescription. This is not a case where to satisfy the demands of justice it is necessary to consider the Calunuran fishpond as being held in trust by the heirs of Juan Y.J. equivocal or indefinite declarations. ID. ID. the intention as to which is to be found in        the nature of their transaction.J. An implied trust may be proven by oral evidence" (Arts. It is legally indefensible because the terms of Art.. Express trusts are created by the intention of the trust or or of the parties. "No particular words are required for the creation of an express trust. — A resulting trust is broadly defined as a trust which is raised or created by the act or construction of law. 10. Purely parol evidence was offered by them to prove the alleged trust.725). — Not a scintilla of documentary evidence was presented by the plaintiffs to prove that there was an express trust over the Calunuran fishpond in favor of Valentin Salao. — "Trusts are either express or implied. — Article 1457 of the Civil Code allows an implied trust to be proven by oral evidence. 12. ID. without being expressed. Ambrosia Salao and Valentin Salao to create any trust. A person who establishes a trust is called the trustor." In a more restricted sense and as contradistinguished from a resulting trust. RECONVEYANCE OF PROPERTY HELD IN TRUST. and the person for whose benefit the trust has been created is referred to as the beneficiary. There is a fiduciary relation between the trustee and the cestui que trust as regards certain property. upon vague and inconclusive proof" that an action for reconveyance of realty.. it being sufficient that a trust is clearly intended" (Art. Express trusts concerning real property cannot be proven by parol evidence (Art. 1444). Civil Code). money or chooses in action. based upon a constructive or implied trust resulting from fraud.S. "Implied trusts are those which. 1443 of the Civil Code are peremptory and unmistakable. enforceable solely in equity. by some writing or deed. The Calunuran fishpond was registered in 1911. Trustworthy oral evidence is required to prove an implied trust because oral evidence can be easily fabricated. or arising by operation of law. Their claim that in the oral partition in 1919 of the two fishponds the Calunuran fishpond was assigned to Valentin Salao is legally untenable. CASE AT BAR. personal. the legal title to which is vested in another. "No express trust concerning an immovable or any interest therein may be proven by parol evidence. They are ordinarily subdivided into resulting and constructive trusts (89 C. or which are superinduced on the transaction by operation of law as matters of equity. 1443. — Under Act No.

or will. Consequently. — While a sale of a piece of land appearing in a private deed is binding between the parties. An implied trust comes into being by operation of law Express trusts are created by direct and positive acts of the parties. Trust relations between parties may either be express or implied. An implied trust comes into being by operation of law. or by words either expressly or impliedly evincing an intention to 25 create a trust. laches cannot be attributed to them. it cannot be considered binding on third persons." prescription and laches will run only from the time the express trust is repudiated. the legal title to which is vested in another. there was no notation of the Agreement between her and Paciencia. however. An express trust is created by the direct and positive acts 8 . The rule requires a clear repudiation of the trust duly communicated to the beneficiary. PRIVATE DEED CANNOT BIND THIRD PERSONS. SALES. if a repudiation of the trust is proven by clear and convincing evidence and made known to the beneficiary. NO LIMIT TO ENFORCE RIGHTS BUT MAY BE BARRED BY PRESCRIPTION. 13.. PARTIES PROTECTED. the Agreement was not registered. It is a fiduciary relationship that obliges the trustee to deal with the property for the benefit of the 23 beneficiary. Plaintiffs have no right and personality to assail that donation. Jr. and (c) the evidence thereon is clear and conclusive It has been held that a trustee who obtains a Torrens title over property held in trust by him for another cannot 27 repudiate the trust by relying on the registration. thus. The Court has held that for acquisitive prescription to bar the action of the beneficiary against the trustee in an express trust for the recovery of the property held in trust it must be shown that: (a) the trustee has performed unequivocal acts of repudiation amounting to an ouster of the cestui que trust. (b) such positive acts of repudiation have been made known to the cestui que trust. who purchased the property from Maxima's heirs. SECUYA vs VDA DE SELMA      Trust is the legal relationship between one person having an equitable ownership in property and another person owning the legal title to such property. REPUDIATED WHERE HEIRS SOLD SUBJECT PROPERTY TO ANOTHER. knew of it. "[n]o particular words are required for the creation of an express trust. and instead sold the same to a third person not privy to the Agreement. (Sandoval v. Valentin Salao slept on their rights. the legal title to which is vested in another. the subsequent sales transactions involving the land in dispute and the titles covering it must be upheld. it being sufficient that a trust is clearly intended. 3087 issued in the name of Maxima. — While no time limit is imposed for the enforcement of rights under express trusts. it is no longer necessary to pass upon the validity of the donation made by Ambrosia Salao to Juan S. Equally important. — A party who has actual knowledge of facts and circumstances that would move a reasonably cautious man to make an inquiry will not be protected by the Torrens system. the equitable ownership of the former entitling him to the performance of certain duties and the exercise of certain powers by the latter. Under Article 1444 of the Civil Code. — There was a repudiation of the express trust when the heirs of Maxima Caballero failed to deliver or transfer the property to Paciencia Sabellona. An express trust is created by the intention of the trustor or of the parties. ID. prescription may. their cause of action has not yet prescribed. Court of Appeals) VDA DE ESCONDE vs CA     Trust is the right to the beneficial enjoyment of property.. TORRENS SYSTEM OF LAND REGISTRATION. if they had any rigths at all. Trusts are either express or implied. And since petitioners filed their complaint in January 1995. in the absence of proof that the said transactions were fraudulent and irregular. it could not bind third persons. Salao. The plaintiffs and their predessor-in-interest. by some writing or deed. Trust relations between parties may either be express or implied. — Where the Court has reached the conclusion that the plaintiffs are not entitled to the reconveyance of the Calunuran fishpond. RULING ON THE VALIDITY OF DONATION UNNECESSARY. of her half-share in the two fishponds.By: Jacqueline Ann Quinto   Their action was filed in 1952 or after the lapse of more than forty bears from the date of registration. ID. ID. LABISTE vs LABISTE Trust is the right to the beneficial enjoyment of property. The only act that can be construed as repudiation was when respondents filed the petition for reconstitution in October 1993. if it is not embodied in a public instrument and recorded in the Registry of Property. An express trust is created by the intention of the trustor or of the parties.. It is a fiduciary relationship that obliges the trustee to deal with the property for the benefit of the beneficiary. bar a beneficiary's action for recovery. In the memorandum of incumbrances of TCT No. IEHTaA LAND TITLES AND DEEDS. Neither was there any allegation that Silvestre Aro.

by some writing or deed or will or by words evidencing an intention to create a trust. is in actual possession of Lot No. 1924 and is by no means an evidence of an express trust created for the benefit of petitioners. private respondent was given the entirety of Lot No. HEIRS OF PEDRO MEDINA vs CA   EXPRESS TRUSTS. However. the fact is that. 394 was handed to him by his mother. No. it appears to have been out of tolerance to a brother. then a trust relationship was created between them and private respondent. private respondent. as petitioners insist. In this case.R. 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.R. Civil Code of the Philippines). No particular words are required for the creation of an express trust. 30075-R. this doctrine applies. by some writing. Petitioners. Although no particular words are required for the creation of an express trust. Having filed their action only on June 29. Consequently. However. . applies to express trusts and resulting implied trusts. CASE AT BENCH. 190. — The existence of an express trust according to law and to established jurisprudence. a mistake was committed in allotting Lot No. (G. 1700 to private respondent. said lot was registered in private respondent's name. Thus. a clear intention to create a trust must be shown (Article 1444. private respondent never considered himself a trustee.. deed or will. Neither is the deed of partition (which apparently excluded Pedro Medina) entered into earlier any indication of an express creation of a trust. Espinosa vs. DEEMED ESTABLISHED IF BY MISTAKE A PROPERTY IS ENTIRELY ALLOTED TO ONE OF THE HEIRS. In fact. On the other hand. correctly questioned private respondent's exercise of absolute ownership over the property.. Court of Appeals. CA-G. DOCUMENTARY EVIDENCE PRESENTED BY PETITIONERS DID NOT SUPPORT CREATION OF EXPRESS TRUST. 1700. Arambulo. 45 O. Although it does not appear on record whether Catalina intentionally granted private respondent that privileged bestowal. implied trusts are those which. prescription may supervene even if the trustee does not repudiate the relationship. it being sufficient that a trust is clearly intended. and are evidences of transfer of ownership of the land from one owner/owners to another or others and they in fact negate the creation or existence of an express trust. After the TCT No. 1700 in its entirety in the extrajudicial partition of the Esconde estate to the prejudice of her other children. if indeed. applies when the plaintiff is not in possession of the contested property. cannot be proven by mere parol evidence and cannot rest on vague and uncertain evidence or on loose. — Laches has also circumscribed the action for. RULE THAT REPUDIATION OF THE TRUST IS ESSENTIAL FOR PRESCRIPTION TO SUPERVENE. therefore. petitioners assailed it long after . 1700 accrued during the effectivity of Act No. CONSTRUCTIVE TRUST.By: Jacqueline Ann Quinto   of the parties. not petitioners who instituted the action. however. petitioner Catalina Buan vda. in Heirs of Jose Olviga v. 33-34). 1993. If he allowed his brother Benjamin to construct or make improvements thereon. October 21. 1987. repudiation of the said trust is not a condition precedent to the running of the prescriptive period. 9 . If. NOT APPLICABLE THERETO. as mother and legal guardian of her children. CASE AT BENCH. independently of the particular intention of the parties. 227 SCRA 330. No. these documents are adverse to petitioners' cause. in allowing that he be given Lot No. petitioners' action has been barred by prescription. Tumulak. the trust relationship between him and petitioners was a constructive. APPLICABILITY OF LACHES DOCTRINE TO IMPLIED TRUSTS. — Respondents' possession of the Spanish title issued in the late Pedro Medina's name may just be the consequence of the sale of the land by Narciso (to whom it had been adjudicated in the partition) to the spouses Sotero Medina and Restituta Zurbito on June 29. Section 40 of Chapter III  thereof applies. Express trusts are those intentionally created by the direct and positive act of the trustor. and the proof of fiduciary relationship must be clear and convincing (Quiogue vs. implied trust. not resulting. by mistake. — The rule that a trustee cannot acquire by prescription ownership over property entrusted to him until and unless he repudiates the trust. REQUIRED PROOF THEREOF. private respondent exercised exclusive rights of ownership therein to the extent of even mortgaging the lot when he needed money. de Esconde. Unfortunately. . 334-335) the Court ruled that the ten-year prescriptive period for an action for reconveyance of real property based on implied or constructive trust which is counted from the date of registration of the property. The creation of an express trust must be manifested with reasonable certainty and cannot be inferred from loose and vague declarations or from ambiguous circumstances susceptible of other interpretations . private respondent. or oral declaration (54 Am. 305. 1700. Since the action for the annulment of private respondent's title to Lot No.G. Necessarily. appears to have favored her elder son. — In the case at bench. 104813. . 1964). June 26. without being expressed. equivocal or indefinite declarations. in constructive implied trusts. whether the implied trust is constructive or resulting. Jur.

TESTIMONY OF RESPONDENT THAT SHE ADMINISTERED THE PROPERTY DID NOT CREATE EXPRESS TRUST. as is the basis of the present action. not when the trust was created as Felipe and his wife would have 33 it.. — The testimony of Sotero's widow. The registration of a land under the Torrens system does not create or vest title. STATUTE OF LIMITATIONS. The spouses of course registered the lot in their names in January 1987 but they could not be said to have repudiated the implied trust by that registration. Their purchase of the land and registration of its title in their names are not incompatible with implied trust. BENEFICIARY'S CAUSE OF ACTION BASED ON CONSTRUCTIVE TRUST MAY BE LOST BY ACQUISITIVE PRESCRIPTION. — If an express trust had been constituted upon the occupancy of the property by respondents in favor of the petitioners. ID. the beneficiary’s cause of action arises when the trustee repudiates the trust.. IMPLIED TRUST. the period of prescription begins from the discovery of the fraud (IV Tolentino's Civil Code of the Philippines 40. TRUSTS. and in an action based on fraud. CASE AT BAR. PRESCRIPTIVE PERIOD TO ENFORCE IS TEN YEARS. the Torrens system was not established to foreclose a trustor or beneficiary from proving its ownership of a property titled in the name of another person when the rights of an innocent purchaser or lienholder are not involved. 29 and Solatorio vs. ID. 7.By: Jacqueline Ann Quinto      . PRESCRIPTION. Aquino. 52 Phil. and c) defendant’s act or omission that violates the plaintiff’s right. 1924. 444). CASE AT BAR. ACTION FOR RECONVEYANCE PRESCRIBES IN TEN YEARS. it appears clear from the context of her testimony that her use of the term "administer" was in the concept of an owner-buyer "administering" and managing his/her property\ BENEFICIARY'S RIGHT OF ACTION TO RECOVER PROPERTY HELD IN TRUST IS IMPRESCRIPTIBLE. Only when the last element occurs or takes place can it be said in law 32 that a cause of action has arisen. The period of prescription commences to run from the day the action may be brought (Art. Solatorio. On the contrary. But when did the right of action based on the implied trust accrue in this case? A right of action implies the existence of a cause of action and a cause of action has three elements: a) the existence of a right in plaintiff’s favor. The first co-owner remains the owner of his proportionate share and not the second co-owner in whose name the entire land is registered The trustor-beneficiary is not estopped from proving its ownership over the property held in trust by the trustee when the purpose is not to contest the disposition or encumbrance of the property in favor of an innocent third-party purchaser for value. when such other person. prescription of action would not lie. 38 Phil. because registration is not one of 10 . as in the present case. It was understood that they did this for the benefit of Julian and all the children MIGUEL OSORIO PENSION FOUNDATION vs CA     The law expressly allows a co-owner (first co-owner) of a parcel of land to register his proportionate share in the name of his co-owner (second co-owner) in whose name the entire land is registered.. Civil Code of the Philippines). Certainly. IMPLIED TRUST. The second co-owner serves as a legal trustee of the first co-owner insofar as the proportionate share of the first co-owner is concerned. When petitioners filed the present action in 1957. — Petitioners' action to recover was likewise time-barred considering that the ten-year period under the statute of limitation within which petitioners could file an action for recovery of real property commenced to run in 1933 when petitioner Margarita Medina was informed that the land in dispute belonged to her father Pedro Medina for in that year she could have brought an action for reconveyance. — It is settled that the right to enforce an implied trust in one's favor prescribes in ten (10) years. More so. 8. in the absence of an express trust. CASE AT BAR. Restituta Zurbito. the basis of the rule being that the possession of the trustee is not adverse to the beneficiary.. ID.. PARINGIT vs PARINGIT   an implied trust prescribes within 10 years from the time 31 the right of action accrues.. 1150. In an implied trust. — Even assuming that. thirty-three (33) years had already elapsed since the land in question was sold to Sotero Medina on June 29. to the effect that her husband and then later she herself "administered" the land does not support petitioners' claim of an express trust. a constructive trust was created upon the property in question by operation of law in favor of petitioners. 6. b) defendant’s obligation to respect such right. OBLIGATIONS AND CONTRACTS. There is no showing that the term "administration'' as used by said respondent in her testimony is by reason of an appointment as such on behalf of another owner or beneficiary. PRESCRIPTIVE PERIOD COMMENCES TO RUN FROM DISCOVERY OF FRAUD. their cause of action had already prescribed upon the lapse of the ten-year period of acquisitive prescription provided by the then applicable statute (Section 41 of Act 190) foe unregistered lands like the subject land. ID. such an to support the existence of an express trust. admits its being a mere trustee of the trustor or beneficiary. citing Anuran vs. ID.

are deducible from the nature of the transaction by operation of law as matters of equity. the parol evidence offered to prove the existence of an implied trust is lean. HERBON vs PALAD  The trust created under the first sentence of Article 1448 is sometimes referred to as a purchase money resulting trust. 9 [Emphasis supplied] DELFIN vs BILLONES  When one's property is registered in another's name without the former's consent. either through implication of an intention to create a trust as a matter of law or through the imposition of the trust irrespective of. 28 In the present case. independently of the particular intention of the parties. the proof should be as fully convincing as if the acts giving rise to the trust obligation are proven by an authentic document. A TCT is merely an evidence of ownership over a particular property and its issuance in favor of a particular person does not foreclose the possibility that the property may be coowned by persons not named in the certificate. in equity and good conscience. no trust can result in favor of the party who is guilty of the fraud. an action for reconveyance based on fraud is imprescriptible where the plaintiff is in possession of the property subject of the acts. 25 the evidence must be trustworthy and received by the courts with extreme caution. paid for Jacinto's shares in Lot 421 are vague and contain no specificities. duress or abuse of confidence. 26 Thus. duress or abuse of confidence. respondent's disqualification from owning lands in the Philippines is absolute. any such intention. 29 However. constructive trusts are created in order to satisfy the demands of justice and prevent unjust enrichment. 24 While implied trusts may be proved by oral evidence. 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. and should not be made to rest on loose. to hold. and even contrary to. DURAN vs CA  Trusts are either express or implied. As a rule. constructive trusts are created by the construction of equity in order to satisfy the demands of justice and prevent unjust enrichment. obtains or holds the legal right to property which he ought not. cannot be established upon vague and inconclusive proof. or an equivalent. to hold. by fraud. where the purchase is made in violation of an existing statute and in evasion of its express provision. Said witnesses are complete strangers in so far as the intent of the parties to the contract is concerned. obtains or holds the legal right to property which he ought not. the burden of proving the existence of a trust is on the party asserting its existence. Not even an ownership in trust is allowed. in equity and good conscience. 11        . the elements of which are: (a) an actual payment of money. while implied trusts come into being by operation of law. or that it may be held in trust for another person by the registered owner  GRIMM vs ESTATE OF PARSONS The Court of Appeals erred in holding that an implied trust was created and resulted by operation of law in view of petitioner's marriage to respondent. 13 To hold otherwise would allow circumvention of the constitutional prohibition. Trustworthy evidence is required because oral evidence can easily be fabricated. On the other hand. Save for the exception provided in cases of hereditary succession. 27 An implied trust. and such proof must be clear and satisfactorily show the existence of the trust and its elements. registration being constructive notice to all persons. They arise contrary to intention against one who. constituting valuable consideration. property or services. and (b) such consideration must be furnished by the alleged beneficiary of a resulting trust. Express trusts are created by the intention of the trustor or of the parties. In turn. in order to establish an implied trust in real property by parol evidence. equivocal or indefinite declarations. They arise against one who. instead of Gonzalo. without being expressed.By: Jacqueline Ann Quinto the modes of acquiring ownership. Meanwhile. Implied trusts are those which. in fine. 28 An action for reconveyance based upon an implied or constructive trust prescribes in ten (10) years from the registration of the deed or from the issuance of the title. They arise from the nature or circumstances of the consideration involved in a transaction whereby one person thereby becomes invested with legal title but is obligated in equity to hold his legal title for the benefit of another. an implied trust is created by law in favor of the true owner. frail and far from convincing. 29 Their testimonies do not show that the payment was intended to establish a trust relationship. The testimonies of Bayani and Maria that Benjamin. Besides. implied trusts are either resulting or constructive trusts. by fraud.

the burden of proving the existence of a trust is on the party asserting its existence. it cannot be demonstrated by mere construction. unless the party who contests its accuracy can produce positive evidence establishing otherwise. nobody can dispose of that which does not belong to him. NOT A TRUST IN FAVOR OF THE PARENT. 32 A notarized document is executed to lend truth to the statements contained therein and to the authenticity of the signatures. EXPRESS TRUSTS. such as by some writing. and often is. — Trust is the legal relationship between one person who has equitable ownership of a property and another who owns the legal title to the property. and the trustee. property or services. and should not be made to rest on loose. or an equivalent. and may be overcome by other evidence to the contrary. confidence has been reposed as regards the property of the beneficiary. COMILANG vs BURCENA   The trust created under the first sentence of Article 1448 is sometimes referred to as a purchase money resulting trust. an official publication thereof. or of a foreign country. Documents consisting of entries in public records made in the performance of a duty by a public officer are prima facie evidence of the facts therein stated." not a trust in favor of the parent. and (iii) public records. this Court has held thus: "As a rule. EXISTENCE OF TRUST. Therefore. Dominga could not have validly donated the subject property to petitioner. 736. Express trusts are those created by direct and positive acts of the parties. as expressly provided in Article 736 of the Civil Code. or records of the official acts of the sovereign authority. IMPLIED TRUSTS. 12 Respondents have shown that the two elements are present in the instant case." PRESUMPTION OF A GIFT IN FAVOR OF THE CHILD. 47 A duly-registered death certificate is considered a public document and the entries found therein are presumed correct. and such proof must be clear and satisfactorily show the existence of the trust and its elements. KINDS. TRUSTS. whether of the Philippines. the elements of which are: (a) an actual payment of money. DEFINITION OF TRUST. proved by or inferred from circumstances. thus: Art. 48 Nevertheless. this presumption is disputable and is satisfactory only if uncontradicted. but must be proven in all cases. The party who impugns its regularity has the burden of proving its simulation. the person for whose benefit the trust was created. the one in whom. Trustworthy evidence is required because oral evidence can easily be fabricated. BURDEN OF PROOF. by conferment of a legal title. — Noting the need to prove the existence of a trust. equivocal or indefinite declarations. Truly. while fraud may be proved by circumstances or presumed from them. Guardians and trustees cannot donate the property entrusted to them. Notarized documents enjoy the presumption of regularity which can be overturned only by clear and convincing evidence Fraud may be. as the case may be. and the circumstances proved may in some cases raise a presumption of its existence. kept in the Philippines. 44 Public documents are (i) the written official acts. official bodies and tribunals. and (b) such consideration must be furnished by the alleged beneficiary of a resulting trust. — That [respondent] should be deemed a trustor on the basis merely of having paid the purchase price is plainly contradicted by the presumption based on Article 1448 of the Civil Code "that there is a gift in favor of the child. or a certified true copy thereof. and public officers. or a specific part thereof. or by words either expressly or impliedly evidencing an intention to create a 12 . deed or will. Their bare and unsupported allegations are not enough to overthrow the presumption of the validity of said agreement or to raise the presumption of fraud. the evidence must be trustworthy and received by the courts with extreme caution. 13 OCO vs LIMBARING      EVIDENCE.By: Jacqueline Ann Quinto    A contract or conduct apparently honest and lawful must be treated as such until it is shown to be otherwise by either positive or circumstantial evidence. the beneficiary. constituting valuable consideration. the attestation by the officer having legal custody of the record must state that the copy is a correct copy of the original. 46 and when a copy of a document or record is attested for the purpose of evidence. (ii) documents acknowledged before a notary public except last wills and testaments. However. of private documents required by law to be entered therein. While implied trusts may be proved by oral evidence. 42 Respondents indeed failed to prove that fraud attended the execution of the Extra-Judicial Partition and Deed of Absolute Sale. — Trusts may be either express or implied.. 45 Public documents may be proved by the original copy. 31 A duly executed contract carries with it the presumption of validity. Dominga was merely a trustee of the respondents in relation to the subject property. The trustor is the one who establishes the trust.

Clearly. both coming into being by operation of law. are deducible from the nature of the transaction as matters of intent. The OCT evidencing this ownership. Implied trusts may either be resulting or constructive trusts. 1456 of the Civil Code since he averred in his complaint that through fraud petitioners were able to obtain a Certificate of Title over the property. which would justify an action for 29 reconveyance. In the action for reconveyance. implied trusts are those that. duress or abuse of confidence. In furtherance of his plan to defraud the spouses out of their land. 16 Express trusts are created by the direct and positive acts of the parties. CRISOSTOMO vs GARCIA  In the case at bar. not legal title. induces another to believe certain facts to exist.] or which are superinduced on the transaction by operation of law as a matter of equity. without being expressed. 19 Lastly. Here. TCT No. admissions. by fraud. and the real owner is entitled to file an action for reconveyance of the property RODRIGO vs ANCILLA  In this case. however. "An implied trust is one that. impresses upon the title so acquired the character of a constructive trust for the real owner. will. the real owner being another person. was borrowed by Vicente Sauza." The principle of estoppel in pais applies when — by one's acts. the action for reconveyance has not prescribed. the decree of registration is respected as incontrovertible but what is sought instead is the transfer of the property wrongfully or erroneously registered in another’s name 30 to its rightful owner or to one with a better right. If the registration of the land is fraudulent. so as to be prejudiced if the former is permitted to deny the existence of those facts PASINO vs MONTERROYO  Under the principle of constructive trust. or words evidencing an intention to create a trust. or silence when there is a need to speak out — one. CUENCO vs CUYEGKENG  Trust relations between parties may either be express or implied. An action for reconveyance based on implied or constructive trust prescribes in 10 years. T-3062 in the name of Vicente Sauza was issued on January 13. Afterwards. respondent's suit for reconveyance filed on December 28. He does not seek the annulment of a voidable contract whereby Articles 1390 and 1391 of the Civil 13      . Thus. 19 These trusts arise from the nature of or the circumstances involved in a transaction. indicated through some writing. respondent's action which is for Reconveyance and Cancellation of Title is based on an implied trust under Art." 18 Resulting trusts are presumed to have been contemplated by the parties and are based on the equitable doctrine that valuable consideration. is deducible from the nature of the transaction as a matter of intent or which is superinduced on the transaction by operation of law as a matter of equity. who is obligated in equity to hold that title for the benefit of another. the person in whose name the land is registered holds it as a mere trustee. Vicente Sauza. independently of the particular intention of the parties. are deducible from the nature of the transaction as matters of intent[. 20 whereby legal title becomes vested in one person. representations. tricked the spouses into signing a deed of transfer. to hold. "without being express. 428. without being express. and the latter rightfully relies and acts on such belief. in equity and good conscience. prescription did not attach. Ramon Daomilas and Lucia Nagac. under OCT No. 17 On the other hand. he twice attempted to secure a transfer of the certificate of title to his name but in both instances failed. The foregoing circumstances lead to only one conclusion: petitioners are holding Lot 434 merely as trustees under an implied trust for respondent. determines the equitable title or interest. through misrepresentation." 18 The law itself creates the obligation of the trustees to convey the property and the title thereof in favor of the true owner. 20 This period is reckoned from the date of issuance of the transfer certificate of title which operates as constructive notice to the whole world. 1979 was well within the prescribed period. obtains or holds the legal right to property which he ought not.By: Jacqueline Ann Quinto trust. independently of the particular intention of the parties. ACcTDS 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. registration of property by one person in his name. whether by mistake or fraud. independently of the particular intention of the parties. 1971. Implied trusts are those that. deed. Lot 434 was originally registered in the names of respondent's parents. or that are superinduced in the transaction by operation of law as a matter of equity. intentionally or through culpable negligence.

This does not mean. This ten-year prescriptive period begins to run from the date the adverse party repudiates the implied trust. The Civil Code provides: The remedy of reconveyance. otherwise known as the Property Registration Decree. in equity and good conscience. an action for reconveyance is still available. 1144. a constructive trust is created in favor of the defrauded party. the person obtaining it is. which has its basis on Section 53 of Presidential Decree No. well within the prescriptive period. to hold. 40 It is now well-settled that the prescriptive period to recover property obtained by fraud or mistake. A long line of decisions of this Court. 1456." 37 When property is registered in another's name. 38 The action for reconveyance of the title to the rightful owner prescribes in 10 years from the issuance of the title. for. Undoubtedly. If the property has not yet passed to an innocent purchaser for value. 1993. OP-38221 and OP39847. 1389 and 1391. the applicable prescriptive period is ten years under Art. 41 Clearly. which repudiation takes place when the adverse party registers the land. since the land in question was evidently obtained by private respondent through fraudulent machinations 18 by means of which a free patent and title were issued in his name. and the foregoing article of the Civil Code. 1456 of the Civil Code provides: Art. private respondent's certificate of title was issued on April 6. it was held that when a party uses fraud or concealment to obtain a certificate of title of property. 26 the complaint filed on September 13. 25 The questioned titles were obtained on August 29. 1529. he is deemed to have held it in trust for the benefit of petitioner who was prejudiced by his actions. 1993 is. duress or abuse of confidence. obtains or holds the legal right to property which he ought not. If the property has passed into the hands of an innocent purchaser for value. a decree of registration is no longer open to review or attack although its issuance is attended with actual fraud. which is an action in personam and is always available as long as the property has not passed to an innocent third party for value. by fraud. 1988 and November 11.By: Jacqueline Ann Quinto         Code would find application such that the cause of action would prescribe in four years. 39 An action for reconveyance based on implied or constructive trust prescribes in ten years from the alleged fraudulent registration or date of issuance of the certificate of title over the property. basing the present action on implied trust. 1988. Petitioner 14 . 19 Here. and in relation to the issue of prescription. The petitioners' action for reconveyance may not be said to have prescribed. it is now well-settled that an action for reconveyance based on an implied or constructive trust prescribes in ten years from the issuance of the Torrens title over the property CERVANTES vs CA      In connection. respectively. by force of law. in OCT Nos. the prescriptive period is ten years. giving rise to an implied trust under Art. considered a trustee of an implied trust for the benefit of the person from whom the property comes. 1144 and not four years under Arts. The petitioners commenced their action for reconveyance on September 13. Art. Thus. SHEIDC An action for reconveyance based on an implied trust prescribes in ten years from the issuance of the Torrens title over the property. If property is acquired through mistake or fraud. the remedy is an action for damages. illustrates this rule. Since the petitioners' cause of action is based on fraud. is available to petitioner as alleged and prayed for in his pleading. an implied or constructive trust is created by law in favor of the true owner. The decree becomes incontrovertible and can no longer be reviewed after one (1) year from the date of the decree so that the only remedy of the landowner whose property has been wrongfully or erroneously registered   in another's name is to bring an ordinary action in court for reconveyance. deemed to have taken place when the certificates of title were issued. therefore. They arise contrary to intention against one who. VAGILIDAD vs VAGILIDAD  An action for reconveyance based on an implied or constructive trust must perforce prescribe in ten years and not otherwise. 42 SANJORJO vs QUIJANO The basic rule is that after the lapse of one (1) year. is 10 years pursuant to Art. however. and of very recent vintage at that. that the aggrieved party is without a remedy at law. 36 Constructive trusts are "created by the construction of equity in order to satisfy the demands of justice and prevent unjust enrichment. 1456 of the Civil Code. 1977.

even if we consider the petitioners' right of action for recovery of the shares as having accrued only on November 3. the ten (10)-year prescriptive period has already elapsed. or by any form of unconscionable conduct. 1993. However. trust relations between parties may either be express or implied. — Section 38 of the Land Registration Act provides that a certificate of title is conclusive and binding upon the whole world. BASIS THEREOF. Banks. Civil Case No. this rule does not apply when the plaintiff is in actual possession of the land. — Implied trust 15   . without being express. RESULTING TRUST. "It is a condition sine qua non for an action for reconveyance to prosper that the property should not have passed to the hands of an innocent purchaser for value. NOT APPLICABLE WHEN THERE IS ACTUAL POSSESSION OF THE LAND. A person who deliberately ignores a significant fact which would create suspicion in an otherwise reasonable man is not an innocent purchaser for value. before approving a loan. a mortgagee must exercise due diligence before entering into said contract. actual or constructive. However. Express trusts are those which are created by the direct and positive acts of the parties. this is subject to the right of a person deprived of land through fraud to bring an action for reconveyance. is a trust by operation of law which arises contrary to intention and in invitum. through their belated filing of numerous motions of extensions to file their reply instead of manifesting a willingness to abide by the ruling of the Sandiganbayan on the proper docket fees to be paid. Clearly. Implied trusts are those which. however. Nonetheless. 21  In the instant case. by duress or abuse of confidence. an innocent mortgagee is not expected to conduct an exhaustive investigation on the history of the mortgagor's title. or who in any way against equity and good conscience.By: Jacqueline Ann Quinto previously initiated a similar case. — Generally. when Benedicto entered into a compromise agreement with the Republic of the Philippines surrendering the shares in question. Prescription has already set in. or even on the latter period of September 10. have clearly slept on their rights. a buyer need not look behind the certificate of title in order to determine who is the actual owner of the land. provided that it does not prejudice the rights of an innocent purchaser for value and in good faith. or questionable means. by fraud. The evidence before us. like petitioner. prescribes in 10 years from the date of issuance of decree of registration. 1990. indicates that petitioner is not a mortgagee in good faith. thereby barring their right of action. to send representatives to the premises of the land offered as collateral and to investigate who are the real owners thereof. an action for reconveyance based on an implied or constructive trust. in equity and good conscience. BASIS THEREOF. 1981 which had the effect of suspending the prescriptive period until it was dismissed by the Court of First Instance of Palawan on October 21. LUNA vs CO CHO CHIT — By definition. artifice. 1981. or will."  PRESCRIPTION OF ACTIONS. independently of the particular intention of the parties. To be sure. by commission of wrong." The same rule applies to mortgagees. the present action is not barred by prescription. The petitioners. are deducible from the nature of the transaction as matters of intent. against one who. their business being impressed with public interest. concealment. especially in the case of a banking institution. ACTION FOR RECONVEYANCE BASED ON IMPLIED TRUST PRESCRIBES IN 10 YEARS FROM THE DATE OF ISSUANCE OF DECREE OF REGISTRATION. such as the instant case. Consequently. wherein this Court upheld the validity of the compromise agreement. against respondent on September 8. CONSTRUCTIVE TRUST. by some writing or deed. The present case was later on filed on May 18. either has obtained or holds the legal right to property which he ought not. 20 It is a resulting obligation created by law and actions thereon prescribe after ten (10) years as provided by Article 1144 of the Civil Code. IMPLIED TRUSTS. 1505. are expected to exercise more care and prudence than private individuals in their dealings. and then claim that he acted in good faith under the belief that there was no defect in the title of the vendor. "It is a well-settled rule that a purchaser cannot close his eyes to facts which should put a reasonable man upon his guard. HEIRS OF PRES MARCOS vs PCGG A constructive trust. hold and enjoy. or which are superinduced on the transaction by operation of law as matters of equity. 1987. Petitioner here was already aware that a person other than the registered owner was in actual possession of the land when it bought the same at the foreclosure sale. or by words evincing an intention to create a trust. even those involving registered lands. DBP vs CA  ACTION FOR RECONVEYANCE PROPER AGAINST MORTGAGEE/BUYER WHO IS NOT IN GOOD FAITH. otherwise known as an implied trust. Judicial notice is taken of the standard practice for banks.

MelencioHerrera. which in effect seeks to quiet title to the property. There is settled jurisprudence that one who is in actual possession of a piece of land claiming to be owner thereof may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right. which in effect seeks to quiet title to the property. both coming into being by operation of law. DE CABRERA vs CA    we observed that an action for reconveyance of a parcel of land based on implied or constructive trust prescribes in ten years. which formed a basis for the four-year rule of the questioned decision. implied trusts may be established by oral evidence. On the other hand. the reason for the rule being. — In Faja vs. 75 SCRA 441. doe not prescribe. Furthermore. Actually the action for conveyance was one to quiet title. this Court has ruled a number of times before that an action for reconveyance of a parcel of land based on implied or constructive trust prescribes in ten years. (b) such positive acts of repudiation have been made known to the cestui que trust. it is an established rule of American jurisprudence (made applicable in this jurisdiction by Art. The issue on the prescriptive period for such an action has been thoroughly discussed in the case of Amerol v. They arise contrary to intention against one who. Unlike express trusts concerning immovables or any interest therein which cannot be proved by parol evidence. that his undisturbed 16  PRESCRIPTION OF ACTIONS. Justice Paras who penned Esconde v.By: Jacqueline Ann Quinto  may either be resulting or constructive trusts. It cannot be established upon vague and inconclusive proof. to remove the cloud cast upon appellee's ownership by the refusal of the appellants to recognize the sale made by their predecessors. Court of Appeals. which right can be claimed only by one who is in possession. This action accrued only when appellants initiated their suit to recover the land in 1954. before the period of prescription may start. 1987. TALE vs CA of the property. the point of reference being the date of registration of the deed or the date of the issuance of the certificate of title over the property (Vda. 407 [1987]). does not prescribe. since if a person claiming to be the owner thereof is in actual possession of the property. Bagumbaran (154 SCRA 396. — We hold that the prescriptive period for an action for reconveyance based on fraud is ten (10) years. but this rule applies only when the plaintiff or the person enforcing the trust is not in possession of the property. Bagumbaran (supra) on September 10. .e. ACTION FOR RECONVEYANCE BASED ON FRAUD. and Sarmiento who concurred in the July 31. The reason for this is that one who is in actual possession of a piece of land claiming to be the owner thereof may wait until his possession is disturbed or his title is attacked before taking steps to vindicate his right. IAC. i. it must be shown that (a) the trustee had performed unequivocal acts of repudiation amounting to an ouster of the cestui que trust. the point of reference being the date of registration of the deed or the date of the issuance of the certificate of title over the property. RULE. the proof should be as fully convincing as if the acts giving rise to the trust obligation were proven by an authentic document. REASON THEREFOR. As it is. duress or abuse of confidence.. (c) the evidence thereon is clear and positive. by fraud. . Padilla. as the defendants are in the instant case. 159 SCRA 178). Barlongay (152 SCRA 602). the reason for the rule being. the right to seek reconveyance. since if a person claiming to be the owner thereof is in actual possession . constructive trusts are created by the construction of equity in order to satisfy the demands of justice and prevent unjust enrichment. 446. to hold. Significantly. They arise from the nature or circumstances of the consideration involved in a transaction whereby one person thereby becomes invested with legal title but is obligated in equity to hold his legal title for the benefit of another. 1987 decision constituted the same Second Division which promulgated the ten-year rule in Amerol v. OLVIGA vs CA  With regard to the issue of prescription. and. However. 480 of the New Civil Code) that actions to quiet title to property in the possession of the plaintiff are imprescriptible ACTUAL POSSESSOR OF A PIECE OF LAND CLAIMING TO BE OWNER THEREOF MAY WAIT UNTIL HIS POSSESSION IS DISTURBED OR HIS TITLE IS ATTACKED. obtains or holds the legal right to property which he ought not. in equity and good conscience. this Court likewise reiterated the ruling that: ". that his undisturbed possession gives him a continuing right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on his own title. in order to establish an implied trust in real property by parol evidence. 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. But this rule applies only when the plaintiff is not in possession of the property. de Portugal vs. the right to seek reconveyance. and Justices Yap.

We hold that in such a situation the right to quiet title to the property. who in 1988 disturbed their possession. private respondents and their predecessors-in-interest were in actual possession of the property since 1950. and it is only then that the statutory period of prescription commences to run against such possessor. Felipa Faja.  17 . was titled in the name of a third person. which right can be claimed only by one who is in possession. accrued only from the time the one in possession was made aware of a claim adverse to his own. Their undisturbed possession gave them the continuing right to seek the aid of a court of equity to determine the nature of the adverse claim of petitioners." In the case at bar.By: Jacqueline Ann Quinto possession gives him a continuing right to seek the aid of a court of equity to ascertain and determine the nature of the adverse claim of a third party and its effect on his own title. was in possession of the litigated property for no less than 30 years and was suddenly confronted with a claim that the land she had been occupying and cultivating all these years. No better situation can be conceived at the moment for Us to apply this rule on equity than that of herein petitioners whose mother. to seek its reconveyance and annul any certificate of title covering it.