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Trusts Reviewer PDF
Trusts Reviewer PDF
Agent
must
act
upon
instructions of the owner
Agent enters into contract in
the name of the principal
Agent cannot be sued
1. Based on Equity
1442. The principles of the general law of trusts, insofar as they are
not in conflict with this Code, the Code of Commerce, the Rules of
Court and Special laws are hereby adopted.
2. Distinguished from Agency
Agency
Trust
Fiduciary in nature
Essentially revocable
Essentially obligatory in its terms
and period and can only be
rescinded based on breach of trust
Agent
possesses
property Trustee takes legal or naked title to
under agency for and in the the subject matter of trust
name of the owner
Roan Salanga
Trusts
A. Express Trusts
1. Essence and Definition of Express Trusts
Express trustone created by the intention of the trustor or
of the parties (Art. 1441)
o Those created by direct and positive acts of the parties, by
some writing or deed or will or by words evidencing an
intention to create a trust
Essential Characteristics of Express Trusts
a. Nominate and Principalfor having been given particular
name and essentially defined by the Civil Code, and not
needing another contract to be valid and binding
b. Unilateralonly the trustee assumes obligations to carry
on the trust for the benefit of the beneficiary
c. Primarily gratuitoussupported by the consideration of
liberality, especially when Art. 1446 provides that
beneficiarys acceptance is presumed
d. Realan express trusts constitute a real contract, that is, it
is not merely perfected by a mere meeting of minds
between the trustor and trustee to constitute a trust.
Indeed, no trust relationship exists, until and unless, the
property constituting the res is conveyed to the trustee.
e. Preparatorynot constituted for its own sake in that the
trust relationship is essentially a medium established by
the trustor to allow full authority and discretion on the
party of the trustee to enter into various juridical acts on
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C. Testamentary Trust
When an express trust is created under the terms of the
last will and testament of the testator, it is a testamentary
trust and is governed by the Law on Succession
o Unless the will conforms with the solemnities and
conditions set by law, it will be void together with the
testamentary trust sought to be created therein
A testamentary trust was created by a provision in the will
whereby the testator proposed to create trust for the
benefit of a secondary school to be established in the town
of Tayabas, naming as trustee the ayutamiento of the town
or if there be none, then the civil governor of the Province
of Tayabas. (Govt of the Phil. Islands v. Abadilla)
D. Pension or Retirement Trusts
Publicly-regulated trusts would be those where the State
provides the vehicle by which institutions are allowed to
administer large funds for the benefit of the public. Among
such funds created under the law would be the pension
and benefits funds administered by the GSIS, the SSS and
the Pag-Ibig Fund. Tax laws provide for incentives to the
setting-up of retirement funds for employees. All such
funds are really being administered for the beneficiaries
thereof through the medium of trust.
E. Charitable Trusts
4. Parties to an Express Trust
a) Trustora person who establishes a trust (Art. 1440)
b) Trusteeone in whom confidence is reposed as regards
property for the benefit of another person (Art. 1440)
i. Trustee must have legal capacity to accept the trust
ii. Failure of Trustee to Assume the Position
1445. No trust shall fail because the trustee appointed declines
the designation, unless the contrary should appear in the
instrument constituting the trust.
In case of refusal to accept the trust by the trustee, the
court will appoint a trustee
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Trusts
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This article applies if the person conveying the property did not
expressly state that he was establishing the trust but such is
the intention
Roan Salanga
Trusts
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