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EXPRESS

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ARTICLE No express trusts concerning
1443 an immovable or any interest
therein may be proved by parol
evidence.

The requirement of the law under this Article is only for
enforceability, not for validity between the parties.
The burden of proving the existence of the trust is on the party
alleging its existence.
To affect third persons, the trust must be in a public instrument and
registered in the registry of property.
Q: What is parol evidence?

A:It is an oral testimony of a witness in court

Q: Can the defense under this Article be waived?


A: Yes. Either by failure to interpose timely objections against
the presentation of oral evidence not admissible under the law or by
cross-examining the adverse party and his witnesses along the
prohibited lines.

An express trust over personal property or
any interest therein, and an implied trust,
whether the property subject to the trust is
real or personal, may be proved by oral
evidence.
No particular words are
ARTICLE required for the creation of
1444 an express trust, it being
sufficient that a trust is
clearly intended.
Express trusts are 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.
ILLUSTRATION:
FACTS:

The trial court declared in a decision that S had the right to redeem
four (4) lots with a house of strong materials, and ordered B to make
the resale of the property in favor of S. After the decision had become
final and executory, B suggested that the tenants of the house pay his
rentals to S instead of to him. Not only this but when the tenants left
the house, S took possession of, and exercised acts of, ownership
over the house and B all along showed conformity thereto

ISSUE:WON there is an express trust?


HELD:

Yes. The acts of B should be construed as a recognition of the fact that


the property, though still in his name, is to be held in trust for S, to be
conveyed to the latter upon payment of the repurchase price. Such trust
is an express one, not subject to prescription. (Geronimo and Isidro vs.
Nava and Aquino)

NOTE: The terminology used in not controlling. What is important is that


there must be a clear intention to create a trust.
ILLUSTRATION:
FACTS:
In 1995, the late Joseph Goyanko Sr. invested 2 million pesos with Philippine Asia
Lending investors Inc. (PALII). After his death, his son, Goyanko Jr., filed a claim over his
estate and at the same time Sr.s illegitimate family filed a claim as well, over the
investment to PALII. Due to the proceedings, PALII, deposited the proceeds with UCPB
under the name Phil Asia: ATF (in trust for) the heirs of the late investor. Thereafter,
UCPB allowed PALII to withdraw P1.5M under that account. When the heirs were about
to claim the proceeds of the investment, UCPB refused to restore the amount to the
petitioner. On litigation, the trial court disregarded the statement (ITF) to charge UCPB
with any trust relationship with PALII and the decedents heirs.
On appeal, despite the arguments of the petitioners that a trust was created, the
appellate court found against the heirs. In their argument, the CAs iteration was that the
transaction was a mere deposit between UCPB and PALII. The ITF addition has no
effect.

ISSUE:WON there is an express trust?


HELD:

No. in order for a trust to come into being, Article 1444 of the CC must be satisfied.
From the facts at hand, the high court found insufficiency. In fine, the following
elements must exist:

1. a competent trustor and trustee;


2. an ascertainable trust res; and
3. sufficiently certain beneficiaries.

The lack of one is fatal to the existence of a trust. Furthermore, there must be a
present and complete disposition of the trust property, notwithstanding that the
enjoyment in the beneficiary will take place in the future. 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 declaration of terms is essential, and these
must be stated with reasonable certainty in order that the trustee may administer, and
that the court, if called upon so to do, may enforce, the trust.(Goyanko vs UCPB)
KINDS OF EXPRESS TRUSTS:

1. Charitable Trust
2. Accumulation Trust
3. Spendthrift Trust
4. Sprinkling Trust
Q: When may a trustee sue or be sued alone?

A: In order that a trustee may sue or be sued alone, it


is essential that his trust be EXPRESS, that is, a trust
created by the direct and positive acts of the parties,
by some writing, deed, or will or by proceedings in
court.
Can you find
the dog in this
group of
pandas?
ARTICLE No trust shall fail because the
1445 trustee appointed declines the
designation, unless the contrary
should appear in the instrument
constituting the trust.
Acceptance by the beneficiary is
ARTICLE necessary. Nevertheless, if the trust
1446 imposes no onerous condition upon the
beneficiary, his acceptance shall be
presumed, if there is no proof to the
contrary.
For the trust to be valid, acceptance of
beneficiary may be:

1.Expressed
2. Implied
3. Presumed-If the granting is purely
gratuitous

Lets challenge your ability to stay focused!
Quickly read out loud the color that each word is printed in
IMPLIED TRUSTS
The enumeration of the following
ARTICLE cases of implied trust does not
1447 exclude others established by the
general law of trust, but the
limitation laid down in Article
1442 shall be applicable.
WHAT IS AN IMPLIED TRUST?
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 are not created voluntarily, but imposed by law


or inferred from the conduct or dealings of the parties.
KINDS OF IMPLIED TRUSTS:
1. Resulting Trust- 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.

2. Constructive Trust- 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.
The doctrine of implied trusts is founded upon equity.

The consequences of an implied trust are, principally, that the


implied trustee shall deliver the possession and reconvey
title to the property to the beneficiary of the trust, and to pay
to the latter the fruits and other net profits received from
such property during the period of wrongful holding and
otherwise, to adjust the equities between the trustee holding
the legal title and the beneficiary of the trust.

The doctrine of implied trust if based on an illegal contract


cannot be invoked.
EXPRESS TRUSTS VS IMPLIED TRUSTS
EXPRESS IMPLIED

Creation Intention of the trustor or parties Deducible from the nature of the
transaction or imposed by
operation of law
Proof If concerning an immovable or an May be proved by parol evidence.
interest therein, it cannot be proved by
parol evidence.
Repudiation Express repudiation is required in order Laches constitutes a bar to actions
that laches or acquisitive prescription to enforce an implied trust even
may bar an action to enforce an where there is no repudiation,
express trust. 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.
Q:May an implied trust be converted to express
trust?

A: Yes. An implied trust may be converted to an


express trust by the recognition by the implied
trustee of the right to the property of the owner.
Note: 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.

The settled rule in constructive implied trusts is that


prescription may supervene even if the trustee does not
repudiate the relationship.
The trustee may claim title by prescription founded on adverse possession where it
appears that:

(a) he has performed open and unequivocal acts of repudiation amounting to an


ouster of the cestui que trustor the other co-owners;

(b) such positive acts of repudiation have been made known to the cestui que trust
or the other co-owners;

(c) the evidence thereon should be clear and conclusive or convincing; and

(d) the period fixed by law has prescribed. The period will commence to run from
and after said repudiation and the knowledge thereof by the cestui que trust.
ACTION FOR RECONVEYANCE BASED ON IMPLIED TRUST

An action for reconveyance to enforce an implied trust in ones favor prescribes


in ten years from the time the law creates the trust(when the cause of action
arises).

Note: The prescriptive rule applies only if the person enforcing the trust is not in
possession of the property.

However, if defendant acted in bad faith, the filing of the action for
reconveyance based on implied trust must be reckoned from the actual
discovery of the fraud where such discovery was made after the date of
registration.
THE TRUST PURSUIT RULE
There is a fundamental principle in agency that where certain
property entrusted to an agent and impressed by law with a trust in
favor of the principal is wrongfully diverted, such trust follows the
property in the hands of a third person and the principal is
ordinarily entitled to pursue and recover it so long as the property
can be traced and identified, and no superior equities have intervened.
This principle is actually one of trusts, since the wrongful conversion
gives rise to a constructive trust which pursues the property, its
product or proceeds, and permits the beneficiary to recover the
property or obtain damages for the wrongful conversion of the property.

Accordingly, the person to whom is made a transfer of trust property


constituting a wrongful conversion of the trust property and a breach of
the trust, when not protected as a bona fide purchaser for value, is
himself liable and accountable as a constructive trustee.