IMPLIED TRUSTS

ART. 1447. The enumeration of the following

cases of implied trust does not exclude others
established by the general law of trust, but
the limitation laid down in Article 1442 shall
be applicable.
 IMPLIED TRUSTS

Implied trusts are those which, without being

express, are deducible from the nature of the
transaction as matters of intent, or which are
superinduced on the transaction by operation of
law, as matters of equity, independently of the
particular intention of the parties.
 IMPLIED TRUSTS

KINDS OF IMPLIED TRUST

(1) Resulting trust.
(2) Constructive trust.
 IMPLIED TRUSTS

(1) Resulting trust. — It is broadly defined as a

trust which is raised or created by the act or
construction of law. In its more restricted sense, it is a
trust raised by implication of law and presumed always
to have been contemplated by the parties, the
intention as to which is to be found in the nature of
their transaction, but not expressed in the deed or
instrument of conveyance.
 IMPLIED TRUSTS
(2) Constructive trust. — It is also a trust raised by
construction of law or arising by operation by law. In a
more restricted sense, and as contra-distinguished
from a resulting trust, constructive trust is a trust not
created by any words, either expressly or impliedly,
evincing a direct intention to create a trust but by the
construction of equity in order to satisfy the demands
of justice and prevent unjust enrichment. It does not
arise by agreement or intention but by operation of law
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.
Distinctions between express trusts and implied
trusts.
 (1) Creation of trust. — Express trusts are created by the intention of
the trustor or parties, while implied trusts come into being by
operation of law.
 (2) Proof of trust. — An express trust concerning an immovable or
any interest therein cannot be proved by parol evidence, while an
implied trust concerning an immovable or any interest therein may
be proved by oral evidence.
 (3) Repudiation of trust. — In order that laches or acquisitive
prescription may bar an action to enforce an express trust, an
express repudiation made known to the beneficiary is required, while
laches constitutes a bar to actions to enforce an implied trust even
where there is no repudiation, unless there is concealment of the fact
giving rise to the trust. An express trust does not prescribe except
when the trustee repudiates the trust.
Implied trust converted to express
trust.
(1) Trustee acknowledged in a public instrument
sale of land by his parents to beneficiary.
(2)Trustee directed his tenant to pay rentals to
beneficiary and allowed latter to take possession.
Acquisition of property through prescription.

The rule that a trustee cannot acquire by prescription

ownership over property entrusted to him until and unless he
repudiates the trust, applies to express trusts and resulting
implied trusts.

In constructive implied trusts, prescription may supervene

even if the trustee does not repudiate the relationship.
Acts which are considered as acts of repudiation:

(a) Filing by a trustee of an action in court against the trustor to

quiet title to property, or for recovery of ownership thereof, held in
possession by the former, may constitute an act of repudiation of
the trust reposed on him by the latter.
(b) The issuance of the certificate of title would constitute an open
and clear repudiation of any trust, and in the lapse of more than 20
years, open and adverse possession as owner would certainly
suffice to vest title by prescription.
Acts which are considered as acts of repudiation:
(c) An action for the reconveyance of land based on implied or
constructive trust prescribes within 10 years. And it is from the date
of the issuance of such title that the effective assertion of adverse
title for purposes of the statute of limitations is counted.

(d) The prescriptive period may only be counted from the time
petitioners repudiated the trust relation in 1955 upon the fi ling of
the complaint for recovery of possession against private
respondents so that the counterclaim of the private respondents
contained in their amended answer wherein they asserted absolute
ownership of the disputed realty by reason of the continuous and
adverse possession of the same is well within the 10-year prescriptive
period.
Acts which are considered as acts of repudiation:

(e) There is clear repudiation of a trust when one who is an apparent administrator
of property causes the cancellation of the title thereto in the name of the apparent
beneficiaries and gets a new certificate of title in his own name.

(f) It is only when the defendants, alleged co-owners of the property in question,
executed a deed of partition and on the strength thereof obtained the
cancellation of the title in the name of their predecessor and the issuance of a new
one wherein they appear as the new owners of a definite area each, thereby in
effect denying or repudiating the ownership of one of the plaintiff’s over his
alleged share in the entire lot, that the statute of limitations started to run for the
purposes of the action instituted by the latter seeking a declaration of the
existence of the co-ownership and of their rights thereunder.
Prescriptibility of action for reconveyance based
on implied trust.

(1) Period of prescription. — An action for reconveyance is a legal

remedy granted to a rightful owner of land wrongfully or erroneously
registered under the Torrens System in the name of another to
compel the latter to reconvey the land to him even after one (1) year
from the issuance of the decree of registration, for such action does
not seek to set aside the decree which is respected as
incontrovertible and no longer open to review, but instead seeks to
transfer or reconvey the land wrongfully or erroneously registered in
another person’s name from said registered owner to the rightful
owner or to one with a better right.
Prescriptibility of action for reconveyance based on
implied trust.

(2) Where person claiming to be owner in actual possession of

property. — The prescriptive rule applies only when the plaintiff or the
person enforcing the trust is not in possession of the contested
property, since if a person claiming to be the owner thereof is in actual
possession of the property, the right to seek reconveyance, which, in
effect, seeks to quiet title to property does not prescribe for he may
wait until his possession is disturbed or his title is attacked before taking
steps to vindicate his right.
Prescriptibility of action for reconveyance based
on implied trust.

(3) When prescriptive period begins to run. — The ten-year

period of prescription of an action for reconveyance of
property (real or personal) based on an implied trust starts
from the moment the law creates the trust (when the cause of
action arises) because the so-called trustee does not recognize
any trust, and has no intention to hold for the beneficiary.
Prescriptibility of action for reconveyance based on
implied trust.
(4) Where rights of the beneficiary are recognized by the trustee. —
In such case, the ten-year period of prescription commences to run
from the time the trustee begins to assert his title or repudiate the
trust, or to hold adversely, as when the trustee fi les an ejectment suit
against the beneficiary, or when he registers the deed of assignment
of property to him and secures the cancellation of the certificate of
title in the name of the former owner, and the issuance of new
certificate of title in his own name, or when he sells portions of the
property. The exercise of such rights of dominion is anathema to the
concept of a continuing and subsisting trust.
Prescriptibility of action for reconveyance based
on implied trust.

(5) When tacking of possession not permitted. — When a

person through fraud succeeds in registering a land in his name,
the law creates what is called a constructive trust in favor of
the defrauded party. The latter is granted the right to recover
the property fraudulently registered within the period of ten
(10) years.
Prescriptibility of action for reconveyance based
on implied trust.

(6) Where property in possession of third person. — The only

limitation upon the right of the beneficiary to recover title over
the property held in trust is that the same must not have been
transferred to an innocent purchaser for value in which event,
his remedy is to ask for damages.
Laches in action to enforce a trust.

(1) In case of express trusts. — A cestui que trust is

entitled to rely upon the fi delity of the trustee.
Laches applies from the time the trustee openly
denies or repudiates the trust and the beneficiary
is notified thereof, or is otherwise plainly put on
guard against the trustee.
.
Laches in action to enforce a trust.

(2) In case of implied trusts. — It is well-

established in American law of trusts that
implied trusts, as distinguished from express
trusts, may be barred not only by prescription
but also by laches.
ART. 1448. There is an implied trust when
property is sold, and the legal estate is granted to
one party but the price is paid by another for the
purpose of having the beneficial interest of the
property. The former is the trustee, while the
latter is the beneficiary. However, if the person to
whom the title is conveyed is a child, legitimate or
illegitimate, of the one paying the price of the
sale, no trust is implied by law, it being disputably
presumed that there is a gift in favor of the child.
Sale to a party but price paid by another.
(1) General rule. — A resulting trust arises in
favor of a person from whom a consideration
comes for a conveyance of property, whether
realty or personality, to another. The
presumption is that he who pays for a thing
intends a beneficial interest therein for himself.
Sale to a party but price paid by another.
(2) Exceptions. — However, no trust is implied if
the person to whom the legal estate is conveyed is
a child, legitimate or illegitimate, of the payor,
because it is presumed that a gift or donation was
intended in favor of the child. This presumption of
a gift is rebuttable by proof of a contrary intention,
and on such rebuttal, a resulting trust arises.
Purchase by a person with his own funds for
another.
One corollary of the rule that a conveyance to one
person on a consideration from another raises a
resulting trust in favor of the latter is that
purchase by one person, on a consideration
furnished by himself, where he takes the
conveyance in the name of another, raises a
resulting trust in favor of the former
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