Miguel, Vianca Mikaella S.

Trusteeship(2015) Digests
2016-89476

1. Go vs. The Estate of Buenaventura |G.R. No. 211972| July 22, 2015| PERLAS-BERNABE, J

Petitioners: WILSON GO AND PETER GO, BELLA A. GUERRERO, DELFIN A. GUERRERO, JR.
AND LESTER ALVIN A. GUERRERO

Respondent: THE ESTATE OF THE LATE FELISA TAMIO DE BUENAVENTURA,

REPRESENTED BY RESURRECCION A. BIHIS, RHEA A. BIHIS, AND REGINA A. BIHIS; AND
RESURRECCION A. BIHIS, RHEA A. BIHIS AND REGINA A. BIHIS, M THEIR PERSONAL
CAPACITIES

Facts
 On March 17, 1959, the late Felisa Tamio de Buenaventura purchased from Carmen Zaragosa,
Inc. a parcel of land with and a TCT was issued in her name. She constructed a three-storey
building thereon, called D'Lourds Building, where she resided until her death
 On February 10, 1960, Felisa supposedly sold the subject property to one of her daughters, Bella
Guerrero, her husband Delfin Guerrero, Sr., and Felimon Buenaventura, Sr., Felisa's common-law
husband.
 The TCT in the name of Felisa was cancelled and a TCT was issued in the names of Felimon, Sr.
and Bella, married to Delfin, Sr..
 Resurrecion A. Bihis, the other daughter of Felisa, sister of Bella began to occupy the second
floor of the D'Lourds Building and stayed therein until her
 The TCT in the names of Felimon, Sr. and Bella, married to Delfin, Sr., was irretrievably
destroyed in the interim, Bella caused its reconstitution and was issued a TCT registered in their
names.
 When Felisa died she allegedly bequeathed, in a disputed last will and testament, half of the
subject property to Resurrecion and her daughters, Rhea A. Bihis and Regina A. Bihis
 the Bihis Family caused the annotation of an adverse claim on the TCT. Felisa's purported will
likewise declared Bella as the administrator of the subject property.
 Bella filed a petition for the probate of Felisa's will and was appointed as the administratrix of
the Estate of Felisa and, in an inventory of Felisa's properties, Bella included the subject property
as part of said estate.
 the adverse claim of the Bihis Family was cancelled.
 Felimon Buenaventura, Jr. and Teresita Robles, apparently the heirs of Felimon, Sr. executed a
purported Extrajudicial Settlement of the Estate of Felimon Buenaventura, Sr., and caused its
annotation on the TCT.
 The TCT was cancelled and a new one was issued in the names of the Heirs of Felimon, Sr.,
Bella, and her co-petitioners
 through a Deed of Sale of even date, the subject property was sold to Wilson and Peter by
Bella, et al. for P4,500,000.00, a transaction completely unknown to Felisa's other heirs, the
Bihis Family.
 Thus, the TCT and a new one was issued in the names of Wilson and Peter.
 Wilson and Peter filed ejectment cases against the occupants and/or lessees of the subject
property
 the probate court revoked the appointment of Bella as administratrix of the Estate of Felisa and
eventually, granted letters of administration to Resurrecion.
 the Estate of Felisa, as represented by the Bihis Family, and the Bihis Family, in their personal
filed a complaint for reconveyance and damages before the RTC, against Bella,  et al., Wilson,
Peter
 o alleged that Felisa, during her lifetime, merely entrusted the subject property to Felimon,
Sr., Bella, and Delfin, Sr. for the purpose of assisting Bella and Delfin, Sr. to obtain a
loan and mortgage from the Government Service Insurance System (GSIS).
o To facilitate the transaction, Felisa agreed to have the title over the subject property
transferred to Bella and Felimon, Sr.
o However, Felisa never divested herself of her ownership over the subject property, as
evidenced by her continuous residence thereon, as well as her act of leasing several units
to various tenants.
o in a letter addressed to Delfin, Sr., Felisa reminded Bella, Delfin, Sr., and Felimon,
Sr. that the subject property was merely entrusted to them for Bella and Delfin, Sr.
to procure a loan from the GSIS
o At the bottom of the letter, Bella's and Delfin, Sr.'s signatures appear beside their
names.
o Wilson and Peter were buyers in bad faith, as they were aware of the facts and
circumstances that would have warranted further inquiry into the validity of the title of
the sellers, Bella, et al.
 In their defense, Bella and Felimon, Jr. claimed that the subject property was owned by Bella and
Felimon, Sr., as evidenced by the TCT in their names which subsisted for almost thirty seven
years without having been voided or nullified by a court decree. Moreover, they have exercised
acts of ownership over the subject property, such as mortgaging the same and leasing the building
to third parties. Finally, they asserted that Bella's act of including the subject property in the
inventory of properties of the Estate of Felisa was merely because of inadvertence.
 Wilson maintained that he and Peter were purchasers in good faith.
 RTC found that there was an implied trust between Felisa, on the one hand, and Bella and
Felimon, Sr., on the other, created by operation of law.
o it was the intention of the late Felisa to merely entrust to Bella and Felimon, Sr. the
subject property for the sole purpose of using the same as collateral to secure a loan with
the GSIS.
o As such, while it is true that a title was issued in the names of Bella, Delfin, Sr., and
Felimon, Sr. by virtue of the sale of the subject property to them, it was clear that Felisa
never intended to relinquish her ownership over the subject property.
 reconveyance can no longer be effected since the subject property had already been transferred to
Wilson and Peter, whom it found to be purchasers in good faith.
 CA modified the RTC Decision, and ordered reconveyance of the property
An action for reconveyance based on an implied trust prescribes in ten (10) years, to be counted
from the date of issuance of the Torrens title over the property. However, the rule applies only
when the claimant or the person enforcing the trust is not in possession of the property. When the
claimant is in actual possession of the property, the action for reconveyance, which is effectively
an action for quieting of title, is imprescriptible. In this case, it has been indubitably established
that the Bihis Family have been in actual possession of the subject property; hence, their action
for reconveyance is imprescriptible.

ISSUE + RULING

1. Whether or not there was an express trust YES

- Trust is the right to the beneficial enjoyment of property, the legal title to which is vested in
another. It is a fiduciary relationship that obliges the trustee to deal with the property for the
benefit of the beneficiary. Trust relations between parties may either be express or implied. An
express trust is created by the intention of the trustor or of the parties, while an implied trust
comes into being by operation of law.
Miguel, Vianca Mikaella S. Trusteeship(2015) Digests
2016-89476

- Express trusts are created by direct and positive acts of the parties, by some writing or deed, or
will, or by words either expressly or impliedly evincing an intention to create a trust.
o Under Article 1444 of the Civil Code, "[n]o particular words are required for the creation
of an express trust, it being sufficient that a trust is clearly intended." 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.
o  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. 
o 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.
- Tamayo v. Callejo: a trust may have a constructive or implied nature in the beginning, but the
registered owner's subsequent express acknowledgement in a public document of a previous sale
of the property to another party effectively converted the same into an express trust.
- In the case, both the RTC and the CA found that an implied trust was established, based on the
letter executed by Felisa during her lifetime addressed to Delfin, Sr., Felisa reminded Bella,
Delfin, Sr., and Felimon, Sr. that states that the subject property was merely entrusted to them for
Bella and Delfin, Sr. to procure a loan from the GSIS. At the bottom of the letter, Bella's and
Delfin, Sr.'s signatures appear beside their names.
- an express trust was duly proved in this case.
- The words of Felisa in the above-quoted letter unequivocally and absolutely declared her
intention of transferring the title over the subject property to Bella, Delfin, Sr., and Felimon, Sr.
in order to merely accommodate them in securing a loan from the GSIS.
o She likewise stated clearly that she was retaining her ownership over the subject property
and articulated her wish to have her heirs share equally therein.
o while in the beginning, an implied trust was merely created between Felisa, as trustor,
and Bella, Delfin, Sr., and Felimon, Sr., as both trustees and beneficiaries, the execution
of the letter settled, once and for all, the nature of the trust established between them as
an express one, their true intention irrefutably extant thereon.
- Lee Tek Sheng v. CA: the "[m]ere issuance of the certificate of title in the name of any person
does not foreclose the possibility that the real property may be under co-ownership with persons
not named in the certificate or that the registrant may only be a trustee or that other parties may
have acquired interest subsequent to the issuance of the certificate of title,"
- Registration does not vest title; it is merely the evidence of such title. 51redarclaw

2. Whether or not the action for reconveyance instituted by respondents has prescribed NO

 express trusts prescribe in ten (10) years from the time the trust is repudiated .
 there was a repudiation of the express trust when Bella, as the remaining trustee, sold the subject
property to Wilson and Peter on January 23, 1997.
  As the complaint for reconveyance and damages was filed by respondents on October 17,
1997, or only a few months after the sale of the subject property to Wilson and Peter, it cannot be
said that the same has prescribed.

3. Whether or not Wilson and Peter are purchasers of the subject property in good faith NO
  A purchaser in good faith is one who buys the property of another without notice that some other
person has a right to, or an interest in, such property and pays a full and fair price for the same at
the time of such purchase, or before he has notice of some other person's claim or interest in the
property.
 when a piece of land is in the actual possession of persons other than the seller, the buyer must be
wary and should investigate the rights of those in possession. Without making such inquiry, one
cannot claim that he is a buyer in good faith.
 The buyer who has failed to know or discover that the land sold to him is in adverse possession of
another is a buyer in bad faith.56redarclaw
 The knowledge of Wilson and peter of the existence of an annotation on the title covering the
subject property and of the occupation thereof by individuals other than the sellers negates any
presumption of good faith on the part of Wilson and Peter when they purchased the subject
property.

RULING: PETITION DENIED

Miguel, Vianca Mikaella S. Trusteeship(2015) Digests
2016-89476

2. Sotto v Teves |G.R. No. L-38018 | October 31, 1978| GUERRERO, J

Petitioner: MARCELO SOTTO, Administrator of the Estate of Filemon Sotto

Respondent: PILAR TEVES, FLORENTINO TEVES, DULCE TEVES KIAMKO assisted by husband
FELIPE KIAMKO DOLORES TEVES ARCENAS, assisted by husband MARIANO ARCENAS,
MARIA CAMARA GUMBAN, assisted by husband NICANOR GUMBAN, BELEN CAMARA
BROWN, assisted by husband ROGER BROWN and the HONORABLE COURT OF APPEALS

Facts:

- Plaintiffs filed an action for declaration of ownership and/or reconveyance, and for the recovery
of possession for parcels of land which originally belonged to the conjugal partnership of the
spouses Florentino Rallos and Maria Fadullon.
- When Florentino Rallos died the parcels of land in question, together with the other properties
comprising the estate of the deceased, descended in testate succession to his sole heirs, his
widow, Maria Fadullon, and two children, named Concepcion Rallos and Carmen Rallos.
- The lawyer to whom the Rallos heirs entrusted the settlement of the estate was Atty. Filemon
Sotto.
- after the closure of the probate proceeding Atty. Sotto married Carmen Rallos.
- Carmen died in 1945 without leaving any issue. Concepcion died later leaving many children.
Maria Fadullon predeceased her two daughters. Atty. Sotto died intestate
- the direct descendants and blood relatives of Florentino Rallos and Maria Fadullon which are the
children of Concepcion Rallos, or the grandchildren of Florentino Rallos and Maria Fadullon
- the administrator of the intestate estate of Atty. Sotto opposed their action.

- All along, the direct descendants and blood relatives of Florentino Rallos had rested on the belief
that the properties in question, which are the fruits of the sweat and toil of their grandfather,
would one day be delivered unto them. However, they discovered that the properties in question
were now titled in the name of Atty. Sotto. and were in danger of falling into the hands of his
children out of wedlock, who are total strangers to the spouses Rallos and Fadullon.

- The plaintiffs’ complaint was based mainly upon the theory that a trust relation was established
and created with respect to the said properties, with Atty. Filemon Sotto as trustee and as cestuis
que trust, his mother-in-law, Maria Fadullon Vda. de Rallos; his wife, Carmen Rallos; and his
sister-in-law, Concepcion Rallos (predecessor in interest of herein private respondents); and that
in gross violation of the trust reposed upon him by Concepcion Rallos and after her death, by her
heirs, the said Atty. Filemon Sotto, through sheer manipulation, fraudulent acts and means, non-
existent and void decrees, fictitious sales and transfers, succeeded in causing the transfer of the
ownership of the properties to the name of his wife Carmen Rallos, and finally to his name alone.

o Atty. Filemon Sotto as counsel, not only for the widow, Maria Fadullon Vda. de Rallos,
but also for her daughters, Carmen and Concepcion both surnamed Rallos, filed a motion
in the probate Proceedings to relieve the executrix Maria Fadullon Vda. de Rallos from
presenting a project of partition inasmuch as his clients had the desire to conserve pro-
indiviso the properties in their possession
o Upon approval by the Court of the above quoted Mocion Sobre La Disposicion de los
Bienes, the said probate proceedings was terminated.
 - petitioner Marcelo Sotto as administrator of the estate of Atty. Filemon Sotto, denied that there
was any trust relation between Don Filemon Sotto on one hand and Maria Fadullon Vda. de
Rallos, Carmen Rallos and Concepcion Rallos on the other; that granting that such relationship
existed between Don Filemon Sotto and Concepcion Rallos, such a relationship could not have
endured until the death of Don Filemon Sotto;

- The CFI dismissed the complaint holding that no express trust relation existed between Atty.
Filemon Sotto on one hand and Maria Fadullon Vda. de Rallos, Carmen Rallos and Concepcion
Rallos on the other with respect to the lots in question; that there was no implied trust subsisting
between Atty. Sotto and the said heirs and that there was actual partition between them whereby
the 5 lots were given to Carmen Rallos as her share; that Carmen Rallos exercised acts of
ownership there by repudiating the trust, if there was any, and since then the period of
prescription of 10 years for bringing the action tolled against an implied trust.

- CA affirmed

ISSUES + RULING

1. Whether or not an express trust was created among the heirs of Florentino Rallos by virtue of
the Mocion filed by Atty. SottoYES

Petitioner contends that the "motion is very clear and categorical and the only purpose of that Motion is to
keep the properties in a co-ownership by the heirs of Florentino Rallos, not to create a relationship of
express trust among the heirs."  "(s)ince the alleged source of express trust is a written document,
applying therefore the document aforecited it is necessary that the document expressly state and provide
for the express trust," and that it is a contradiction in terms for the Court of Appeals to imply from the
document an express trust.

- It may be true that the heirs of Florentino Rallos intended and desired to keep the properties in
co-ownership pro-indiviso when they signed the Mocion filed in their behalf by Atty. Filemon
Sotto in the probate proceedings to terminate the same but the legal effect of said agreement to
preserve the properties in co-ownership as expressed in writing and embodied in the Mocion was
to create a form of an express trust among themselves as co-owners of the properties.
- Castrillo, et al. vs. Court of Appeals, et al.:"co-ownership is a form of trust and every co-owner is
a trustee for the other." In co-ownership, the relationship of each co-owner to the other co-owners
is fiduciary in character and attribute. Whether established by law or by agreement of the co
owners, the property or thing held pro-indiviso is impressed with a fiducial nature that each co-
owner becomes a trustee for the benefit of his co-owners and he may not do any act prejudicial to
the interest of his co-owners.
- Under the law on Trusts, it is not necessary, as petitioner insists, that the document expressly state
and provide for the express trust, for no particular words are required for the creation of an
express trust, it being sufficient that a trust is clearly intended. (Art. 1444, N.C.C.) An express
trust is created by the direct and positive acts of the parties, by some writing or deed or will or by
words evidencing an intention to create a trust.
- that an express trust was created by the heirs of Florentino Rallos in respect to the properties in
litigation when they agreed to preserve said properties in co-ownership among themselves as
manifested and expressed into writing and filed as a pleading captioned Mocion Sobre la
Disposicion de los Bienes. 
Miguel, Vianca Mikaella S. Trusteeship(2015) Digests
2016-89476

2. Whether or not the Court of Appeals erred in finding that Don Filemon Sotto became a co-
trustee by virtue of his subsequent marriage to Carmen RallosNO
- Petitioner argues that this is not the Trust that is defined in our Civil Code most especially if it is the
express trust under Articles 1441 and 1444 which is relied upon by the respondent Court of Appeals
o The trust on the shoulder of Filemon Sotto as the family lawyer in the intestate proceedings of
Florentino Rallos was only coterminous with the duration of the proceedings itself.
o The trust on the shoulder of Filemon Sotto by virtue of his marriage to Carmen Rallos was
only as much as the trust on the shoulders of the two husbands of Concepcion Rallos,
Mariano Teves and Mariano Camara, and this trust is not the trust defined in our Civil Code
on express trust."
- petitioner's argument is based on an incorrect assumption. Petitioner assumes that the CA found the
existence of an express trust between Atty. Filemon Sotto and the heirs of Florentino Rallos, which is
not correct.
- What the appellate court held is that Atty. Sotto can be regarded as the constructive trustee of his wife
and of the widow and descendants of Florentino Rallos.
o Atty. Sotto's special relationship with the Rallos heirs inhibited him from any act or conduct
that would put his interests above, or in direct collision with, the interests of those who had
reposed their trust and confidence in him." 
- It is not correct that Don Filemon Sotto became a co-trustee by virtue of his subsequent marriage to
Carmen Rallos.
o Atty. Sotto became a constructive trustee not only by reason of his marriage to Carmen Rallos
but also on account of his prestige and tremendous social and political influence, also because
Atty. Sotto enjoyed and exercised a personal, domestic, social, political and moral
ascendancy and superiority over his wife, over Maria Fadullon, Concepcion Rallos and the
latter's children, besides being the protector of the rights and interests of the Rallos family
acting like a pater familias attending to their financial and medical needs, as well as the
family lawyer.
3. Whether or not the Court of Appeals erred in finding that an express trust existed by the use of
parol evidence, disregarding the weight of a torrens title and a public document mutually
admitted by the parties, in his fifth assignment of errorNO
- CA did not find that an express trust existed by the use of parol evidence. A
- the heirs of Florentino Rallos, by manifesting to the probate court that it was their desire to preserve
and maintain the co-ownership over the inherited properties, thereby intended and created, by direct
positive acts, an express trust among themselves.
- "As early as in 1913, the Rallos heirs had already agreed expressly and in writing that the five parcels
shall remain in co-ownership, and that in regard to them each one of the heirs shall be a trustee for the
others
- the oral testimony of Pilar Teves simply affirmed the existence of such trust relation; it gave proof
that the heirs desired to continue the express trust and co-ownership over the five lots. It was not
necessary that the heirs create a new agreement of co-ownership over the said properties. They
merely reiterated their written agreement made in 1913 that the five parcels would be preserved in co-
ownership but made provisions for their administration, collection of rentals and final disposition
upon the death of Carmen Rallos.
- There is, therefore, no violation of Art. 1443, N.C.C which provides that "no express trust concerning
an immovable or any interest therein may be proved by parol evidence," as the same is not applicable
herein.
- As to the pretension that the respondent appellate court disregarded the weight of a torrens title and a
public document mutually admitted by the parties, the latter refering to the will executed by Carmen
Rallos in bequeathing all her properties to her husband, Atty. Filemon Sotto, petitioner's reasoning
 holds no water because from the very nature of a trust relation which existed between Carmen Rallos
and her co-owners, she cannot obtain and secure a torrens title to the properties in her name much less
dispose of them by testament to her husband, a constructive trustee, to the prejudice and deprivation
of the rights and interests of said co-heirs.
- A fiduciary relationship may exist even if the title to the property subject to the trust appears in the
name of the trustee alone, because in cases of trusteeship, the legal title usually appears in the name
of the trustee, while the equitable title remains with the cestui que trust.
- Torrens titles were issued in the name of Carmen Rallos, but the principle holds that a trustee who
takes a Torrens title in his name cannot repudiate the trust by relying on the registration, which is one
of the well- known stations upon the finality of a decree of title.
- the will executed by Carmen Rallos cannot deprive the private respondents of their ownership over
the five parcels of land.
o These lots were trust properties; Carmen Rallos was holding them in trust for her sister
Concepcion Rallos and the latter's children. Not being the absolute owner thereof, Carmen
Rallos could not legally convey their ownership by including them in their will.
o the will and last testament of Carmen Rallos was merely a vehicle of an existing trust and
therefore, Atty. Filemon Sotto must be deemed to have received the properties not for himself
but for the benefit of the cestui que trust.
- the registration of the lots in the names of Carmen Rallos and her mother Maria Fadullon Vda de
Rallos and their subsequent transfers and consolidation to Carmen Rallos' name alone in a manner
shown to be fictitious, fraudulent and secretive, thereby keeping the cestuis que trust in the dark did
not constitute acts of repudiation of the express trust. Such registrations were ineffective and not
binding upon the cestui que trust.

RULING: Judgmeent Affirmed

Miguel, Vianca Mikaella S. Trusteeship(2015) Digests
2016-89476

3. Heirs of Medina v CA|G.R. No. L-26107|November 27, 1981| TEEHANKEE, Acting C.J.

Petitioners: THE HEIRS OF PEDRO MEDINA, represented by MARGARITA MEDINA

Respondents: THE HON. COURT OF APPEALS, * RESTITUTA ZURBITO VDA. DE MEDINA and
ANDRES NAVARRO, JR

Facts:

- The late Francisco Medina had eight children, namely, Gregorio, Sotero, Narciso, Victorina, Simona,
Carmen, Pedro and Hospicia, all of whom are deceased. Petitioner Margarita Medina, who filed the
complaint on behalf of the heirs of Pedro Medina in the Court of First Instance of Masbate, is the
daughter of Pedro Medina  who predeceased his father Francisco Medina.
- Restituta Zurbito Vda. de Medina, private respondent, is the widow of Sotero Medina (brother of
Pedro Medina); and Andres Navarro, Jr., her herein co-respondent and co-defendant in the trial court,
is her grandson.
- petitioners filed the complaint in the trial court seeking to recover from herein respondents a parcel
of land si praying that respondents be ordered to deliver to them possession and ownership thereof
with accounting, damages and costs and litigation expenses.
o They allegepetitioner Margarita Medina as plaintiff inherited with her sister Ana Medina the
said parcel of land from their father Pedro Medina; that upon their father's death, she and her
sister Ana Medina being then minors were placed under the care and custody of the spouses
Sotero Medina and Restituta Zurbito, as guardians of their persons and property
o the land was placed under the management of Sotero Medina as administrator thereof, and
upon Sotero's death under the management of his widow, Restituta Zurbito;
o she later discovered that the land in question was surreptitiously declared for taxation
purposes in the name of Andres Navarro, Jr., grandson of Restituta Zurbito
o petitioners had demanded that respondents vacate the premises and deliver possession and
ownership thereof, but the latter failed and refused to do so;
o Andres Navarro, Jr. had excavated soil from the land in question and sold the same without
the knowledge and consent of petitioners and appropriated the proceeds thereof to his
personal benefit to the damage and prejudice of the plaintiff;
o Restituta Zurbito Vda. de Medina never rendered an accounting of the income of the property
in question in spite of their repeated demands and instead appropriated all the income
therefrom to her personal use and benefit.
- Respondents allege that petitioner Margarita and her deceased sister Ana were but illegitimate
children of Pedro Medina and for that reason did not enjoy the status of recognized natural children,
such that when Pedro died intestate, Francisco Medina, Pedro's father who was still living, succeeded
to his properties
o upon the death of Francisco, his children succeeded to his properties and the land in dispute
was adjudicated to Gregorio, Sotero, and Narciso Medina;
o in a deed of extrajudicial partition the land was later adjudicated solely to Narciso Medina
o Narciso Medina having become sole and exclusive owner of the land in question by virtue of
said partition sold the same to Restituta and her husband Sotero Medina
o respondents had actually possessed the land in question in the concept of owners, publicly,
openly and continuously and adversely against the whole world so that whatever right,
interest, title or participation petitioners had or might have had in the property had been lost
by extinctive prescription and by virtue of the 33 years of exclusive actual possession in the
 concept of owner of the spouses Sotero and Restituta Medina who had thereby acquired title
thereto by acquisitive prescription, even granting arguendo that petitioners had some title,
right or interest over the land.
- Trial court declaredpetitioner Margarita Medina with her co-heirs as the lawful owners of the land
- Court of Appeals reversed the trial court's decision and sustaining respondents' defenses of
prescription of action and acquisitive prescription, ordered the dismissal of the complaint.

ISSUE + RULING

Whether or not an express trust over the property in litigation has been constituted by petitioners'
father Pedro Medina upon his brother Sotero and Sotero's wife Restituta Zurbito for the benefit of his
children, petitioner Margarita Medina and her deceased sister Ana Medina and the latter's heirs NO

- As provided by our Civil Code, "Trusts are either express or implied. Express trusts are created by the
intention of the trusts are of the parties.
- Implied trusts come into being by operation of law." (Art. 1441)
- "No express trusts concerning an immovable or any interest therein may be proven by parol
evidence." (Art. 1443)
- "An implied trust may be proven by oral evidence." (Art. 1457)  library
- In the case, if an express trust had been constituted upon the occupancy of the property by
respondents in favor of the petitioners, prescription of action would not lie, the basis of the rule being
that the possession of the trustee is not adverse to the beneficiary.
- But if there were merely a constructive or implied trust, the action to recover may be barred by
prescription of action or by acquisitive prescription by virtue of respondents' continuous and adverse
possession of the property in the concept of owner-buyer for thirty-three years.
- Although no particular words are required for the creation of an express trust, a clear intention to
create a trust must be shown (Article 1444, Civil Code of the Philippines); and the proof of fiduciary
relationship must be clear and convincing
- Express trusts are those intentionally created by the direct and positive act of the trustor, by some
writing, deed or win, or oral declaration
- 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
- Nowhere in the record is there any evidence, and the plaintiffs do not even raise the pretention, that
the original owner of the property Pedro Medina, father of plaintiff Margarita Medina, appointed,
designated or constituted Sotero Medina (the husband of defendant Restituta Zurbito Medina) as the
trustee of the land in dispute.
- petitioners anchor their claim of an express trust on the following circumstances: (1) respondents'
possession of the titulo real covering the land; (2) the deed of partition of the estate of the common
predecessor Francisco Medina, adjudicating the land solely to his son Narciso Medina; (3) the deed of
sale of the land dated June, executed by Narciso Medina in favor of his brother Sotero Medina; and
(4) the testimony of respondent Restituta Zurbito Vda. de Medina (Sotero's wife) to the effect that her
husband used to "administer" and then later on, she herself "administered" the land.
- These circumstances do not make out the creation of an express trust.
- petitioners' action to recover was likewise time-barred, pointing out that "the ten-year period under
the statute of limitation within which plaintiffs could file an action for recovery of real property
commenced to run, in 1933 when plaintiff 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.
Miguel, Vianca Mikaella S. Trusteeship(2015) Digests
2016-89476

- The period of prescription commences to run from the day the action may be brought (Article 1150,
Civil Code of the Philippines), and in an action based on fraud, as is the basis of the present action,
the period of prescription begins from the discovery of the fraud

Ruling: appealed decision is hereby affirmed.

4. ROMAN CATHOLIC BISHOP OF JARO v. GREGORIO DE LA PEÑA | GR No. 6913, Nov 21,
1913 | MORELAND, J.:

Petitioner: ROMAN CATHOLIC BISHOP OF JARO

Respondent: GREGORIO DE LA PEÑA 

Facts:

- plaintiff is the trustee of a charitable bequest made for the construction of a leper hospital and that
Father Agustin de la Peña was the duly authorized representative of the plaintiff to receive the
legacy. 
- The defendant is the administrator of the estate of Father De la Peña.
- In the year 1898 the books of Father De la Peña, as trustee, showed that he had on hand as such
trustee the sum of P6,641, collected by him for the charitable purposes
- In the same year he deposited in his personal account P19,000 in the Hongkong and Shanghai Bank
at Iloilo. 
- during the war of the revolution, Father De la Peña was arrested by the military authorities as a
political prisoner, and while thus detained made an order on said bank in favor of the United States
Army officer under whose charge he then was for the sum thus deposited in said bank. 
- The arrest of Father De la Peña and the confiscation of the funds in the bank were the result of the
claim of the military authorities that he was an insurgent and that the funds thus deposited had been
collected by him for revolutionary purposes. 
- The money was taken from the bank by the military authorities by virtue of such order, was
confiscated and turned over to the Government.

ISSUE + RULING

Whether or not the the Estate of Dela Pena is liable for P6,641 of trust funds that was included in the
P19,000 deposited  in his personal account which were removed and confiscated by the military
authorities of the United StatesNO

- Although the Civil Code states that "a person obliged to give something is also bound to preserve it
with the diligence pertaining to a good father of a family" (art. 1094), it also provides, following the
principle of the Roman law, major casus est, cui humana infirmitas resistere non potest, that "no one
shall be liable for events which could not be foreseen, or which having been foreseen were inevitable,
with the exception of the cases expressly mentioned in the law or those in which the obligation so
declares."  (Art. 1105.)
- By placing the money in the bank and mixing it with his personal funds De la Peña did not thereby
assume an obligation different from that under which he would have lain if such deposit had not been
made,  nor  did he thereby make himself liable to repay the money at all hazards. 
- If the money had been forcibly taken from his pocket or from his house by the military forces of one
of the combatants during a state of war, it is clear that under the provisions of the Civil Code he
would have been exempt from responsibility. 
- The fact that he placed the trust fund in the bank in his personal account does not add to his
responsibility.  Such deposit did not make him a debtor who must respond at all hazards.
Miguel, Vianca Mikaella S. Trusteeship(2015) Digests
2016-89476

- There was no law prohibiting him from depositing the trust funds in his personal account and there
was no law which changed his responsibility by reason  of the deposit. 

- While it may be true that one who is under obligation to do or give a thing is in duty bound, when he
sees events approaching the results of which will be dangerous to his trust, to take all reasonable
means and measures to escape or, if unavoidable, to temper the effects of those events, we do not feel
constrained to hold that, in choosing between two means equally legal, he is culpably negligent in
selecting one whereas he would not have been if he had selected the other.

- the money which is the subject matter of this action was deposited by Father De la Peña in the
Hongkong and Shanghai Banking Corporation of Iloilo; that said money was forcibly taken from the
bank by the armed forces of the United Sates during the war of the insurrection; and that said Father
De la Peña was not responsible for its loss. 

Ruling: judgment reversed

5. Salinas v Tuason |G.R. No. 33626| March 2, 1931| JOHNSON, J
Plaintiff: ANA CALLEJON SALINAS ET AL
Defendants :FELISA ROMAN TUASON and JOSE MORENO ROMAN

Facts:
- The plaintiffs alleged that they were the heirs of Francisco Callejon Salinas, who died in Spain in
1911;
o They claim the amount of P30,000 from the defendants as proceeds from the sale of two
parcels of land which belonged Francisco Callejon Salinas
o The lands were administered by Jose Moreno Lahaba, also a Spaniard, resident of the
Philippine Islands, who died in Manila
o Moreno Lahaba sold said parcels of land for the sum of P30,000, but failed and refused to
account for that sum to his principal or the heirs
o said sum passed by way of inheritance to the heirs of Moreno Lahaba, the defendants
herein;
o said defendants, as such heirs, likewise refused to account to the plaintiffs for said sum of
P30,000.
- The defendants opposed on the grounds of (a) lack of jurisdiction, (b) res judicata and (c)
prescription (d) that the deceased Jose Moreno Lahaba, as agent or representative of Francisco
Callejon Salinas, had accounted to his principal for the proceeds from the sale of the lands in
question, resulting from said accounting a balance of P2,500 in favor of his principal; ( e) that said
amount was paid to the heirs of his principal; and (f) that Moreno Lahaba had spent P16,000 for
clearing said lands and for the survey and registration thereof.
- Lower court ruled that plaintiffs were entitled to recover said sum of P30,000
-
ISSUES+ RULING
1. Whether or not lower court had jurisdiction of the subject matter of this action  YES
Resps: plaintiffs' claim for P30,000 is a claim against the estate of Jose Moreno Lahaba, and said claim
not having been presented before the commissioners of said estate, is now barred, and the lower court
did not have jurisdiction to take cognizance of an action for the recovery of said amount.
- The amount of P30,000 which the plaintiffs are seeking to recover is not a claim against the estate
of Moreno Lahaba.
- It is not an indebtedness of Moreno Lahaba or his estate.
- Said amount represents the price of trust property administered by him, of which he and his heirs
failed and refused to account.
- The only appropriate manner to recover said trust property, in view of the trustee's failure and
refusal to account for it, is by an action in court, and the lower court acted correctly in taking
jurisdiction of the case.

2. Whether or not the payment to the heirs of Callejon Salinas of the sum of P2,500 constitutes res
judicata.  NO
- It does constitute res judicata as to that amount only, but not as to the amount of P36,000 claimed
in this action.

3. Whether or not the lower court erred in holding that the present action has not prescribed NO
Miguel, Vianca Mikaella S. Trusteeship(2015) Digests
2016-89476

- there is absolutely no evidence in the record to show that the plaintiffs failed to demand from time
to time from Moreno Lahaba and his heirs all the trust property in his or their possession belonging
to Callejon Salinas.
- the plaintiffs, through the Spanish Consul General, time and again requested Moreno Lahaba and
his heirs to return to them all of said trust property, but Moreno Lahaba and his heirs denied and
concealed the existence of the P30,000 in question.
- As soon as the plaintiffs secured positive knowledge of the existence of said amount as trust
property belonging to their predecessor, they commenced this action for the recovery thereof.
- As a general rule, a trust estate is exempt from the operation of the statute of limitations. A
trustee, however, may acquire the trust estate by prescription provided there is repudiation of
the trust and this fact is known to the cestui que trust. The repudiation must be clear, open and
unequivocal. 
o In that case the statute will commence to run from and after said repudiation and the
knowledge thereof by the cestui. Furthermore, prescription in order to be available as a
defense, the trustee must prove that there was a direct repudiation of the trust and that
the cestui que trust or beneficiary had knowledge thereof.
- The defense of prescription is not available to the defendants. There was no open, clear and
unequivocal repudiation of the trust by Jose Moreno Lahaba. Neither was there any knowledge on
the part of Callejon Salinas and his heirs of any such repudiation. On the contrary, there was
concealment and misappropriation on the part of Moreno Lahaba of the property entrusted to his
administration and care.

RULING : judgment appealed affirmed

6. Diaz, et al. vs. Gorricho and Aguado | G.R. No. L-11229|March 29, 1958.| REYES, J. B. L., J.:

Plaintiffs: MANUEL DIAZ, CONSTANCIA DIAZ and SOR PETRA DIAZ

Defendants: CARMEN GORRICHO and her husband FRANCISCO AGUADO

Facts:
- Francisco Diaz died in 1919, survived by his widow Maria Sevilla and their three children — Manuel
Diaz, Lolita Diaz, and Constancia Diaz.
- Carmen J. Gorricho filed an action against Maria Sevilla in the CFI, a writ of attachment was issued
upon the shares of Maria Sevilla in the lots covered by the conjugal partnership of the spouses.
- said parcels were sold at public auction and purchased by the plaintiff herself,
- Maria Sevilla failed to redeem within one year, and a final deed of sale was issued in favor of
Carmen J. Gorricho.
o In said final deed the sheriff conveyed to Gorricho the whole of the parcel instead of only the
half-interest of Maria Sevilla
- Maria Sevilla died.
- her children Manuel Diaz, Constancia Diaz, and Sor Petra Diaz filed the present action against
Carmen Gorricho and her husband Francisco Aguado to compel defendants to execute in their favor a
deed of reconveyance over an undivided one-half interest over the lots in question which defendants
were allegedly holding in trust for them.
- Defendants denied and argued that plaintiffs’ action has long prescribed
- Lower court held that while a constructive trust in plaintiffs’ favor arose when defendant Gorricho
took advantage of the error of the provincial sheriff in conveying to her the whole of the parcels in
question and obtained title in herself, the action of plaintiffs was, however, barred by laches and
prescription.

ISSUES + RULING

Whether or not there was a constructive trust over the property YES

- The principal contention of appellants is that their father’s half of the disputed property was
acquired by Carmen J. Gorricho through an error of the provincial sheriff; that having been
acquired through error, it was subject to an implied trust, as provided by Article 1456 of the
new Civil Code; and therefore, since the trust is continuing and subsisting, the appellants may
compel reconveyance of the property despite the lapse of time, specially because prescription
does not run against titles registered under Act 496.
- The American law on trusts has always maintained a distinction between express trusts
created by intention of the parties, and the implied or constructive trusts that are exclusively
created by law, the latter not being trusts in their technical sense
- The express trusts disable the trustee from acquiring for his own benefit the property
committed to his management or custody, at least while he does not openly repudiate the
trust, and makes such repudiation known to the beneficiary or cestui que trust.
- the old Code of Civil Procedure (Act 190) declared that the rules on adverse possession do
not apply to "continuing and subsisting" (i.e., unrepudiated) trusts.
- But in constructive trusts the rule is that laches constitutes a bar to actions to enforce the trust,
and repudiation is not required, unless there is concealment of the facts giving rise to the trust
- The reason for the difference in treatment is obvious. In express trusts, the delay of the
beneficiary is directly attributable to the trustee who undertakes to hold the property for the
Miguel, Vianca Mikaella S. Trusteeship(2015) Digests
2016-89476

former, or who is linked to the beneficiary by confidential or fiduciary relations. The trustee’s
possession is, therefore, not adverse to the beneficiary, until and unless the latter is made
aware that the trust has been repudiated.
- But in constructive trusts (that are imposed by law), there is neither promise nor fiduciary
relation; the so-called trustee does not recognize any trust and has no intent to hold for the
beneficiary; therefore, the latter is not justified in delaying action to recover his property. It is
his fault if he delays; hence, he may be estopped by his own laches.

- the equitable doctrine of estoppel by laches requires that the one invoking it must show, not
only the unjustified inaction, but that some unfair injury would result to him unless the action
is held barred
o This requirement the appellees have not met, and they are thereby bereft of the
protection of this rule.

Whether or not the appellant’s cause of action is barred YES

- the judgment of dismissal should be upheld, because the appellants’ cause of action to attack
the sheriff’s deed and cancel the transfer certificates of title issued to the appellees accrued
from the year of issuance and recording, and appellants have allowed fifteen (15) years to
elapse before taking remedial action

Ruling:Affirmed