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G.R. No. 58010. March 31, 1993.

EMILIA O'LACO and HUCO LUNA, petitioners, vs. VALENTIN CO CHO CHIT, O LAY KIA
and COURT OF APPEALS, respondents.
Breach of Trust; Half-Sisters; Resulting and Constructive Trusts.
Facts: Emila is the half sister of O Lay Kia who is, as is her husband Co Cho Chit, a Chinese
national and cannot own property in the Philippines. O lay kia bought a piece of land and
had it named under her sister, Emilia. Emilia on the other hand sold the property to the
Church without the knowledge of her sister. When O Lay Kia found out, they immediately
filed a case for breach of contract.
Issue: Whether or not there was a trust relationship between the sisters?
Held: Yes. trust relations between parties may either be express or implied. 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 evincing an intention to create a trust.
Implied trusts are those which, without being express, are deducible from the nature of
the transaction as matters of intent, or which are super induced on the transaction by
operation of law as matters of equity, independently of the particular intention of the
parties. Implied trusts may either be resulting or constructive trusts, both coming into being
by operation of law. 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. 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.
In this case, the court cited five instances that prove a trust relationship. First, sps O Lay
Kia were in possession of all the pertinent documents of the sale from the beginning until
the end of the transaction. Second, there is a previous case of similar facts involving O lay
kia and her brother on a different parcel of land decided in her favor. Third, the
circumstances leading to Emilia acquiring a title to the land was dubious. Fourth, until the
sale to the church, Emilia actually recognized the trust(by promising to take care of the
transfer to the actual owners as soon as she is able.)
A resulting trust is repudiated if the following requisites concur: (a)the trustee has performed
unequivocal acts of repudiation amounting to an ouster of the cestui qui trust; (b)
such positive acts of repudiation have been made known to the cestui qui trust; and, (c) the
evidence thereon is clear and convincing. And finally, fifth, Emilia actually had no source of
income to show how it was possible for her to purchase the land.