Clv Blog on Trusts

8/12/2019 Clv Blog on Trusts

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I. NATURE AND CLASSIFICATION OF TRUSTS

I. NATURE AND CLASSIFICATION OF TRUSTS

1. DEFINITIONOF, AND PARTIESTO, ATRUSTTitle V of the Civil Code does not contain a particular definition of "Trust", but its

first article Article 1440 defines the persons who constitute the parties in a trustrelationship, thus:

TRUSTOR- the person who establishes a trust (referred to as "settlor", or "founder" incoon law parlance!

TRUSTEE- the person in who confidence is reposed as re#ards the propert$ placed intrust (referred to as the "corpus"! and

BENEFICIARY- the person for whose benefit the trust has been created (the cestui quitrustant !%

&erhaps the best wa$ to describe the le#al essence of trust is to consider it as a

le#al relationship based priaril$ on the parties' relationship to the propert$ thatconstitutes the corpus or the estate of the relationship, whereb$ a person, called thetrustor, conve$s the naed or le#al title to a propert$ in the nae of another person,called the trustee, who taes title thereto under a fiduciar$ obli#ation to ana#e thepropert$ in favor of another person, called the beneficiar$, to who therefore beneficialor e)uitable title pertains%

*uotin# fro Aerican le#al literature, Tolentino defines trust as "the le#alrelationship between one person havin# an e)uitable ownership in propert$ and anotherperson ownin# the le#al title to such propert$, the e)uitable ownership of the forerentitlin# hi to the perforance of certain duties and e+ercise of certain powers b$ thelatter%" (T./T/, CVC.2T3.&3&&/., Vol% V, at p% 556, citin# 74 A8% 9;%


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2. DISTINGUISHINGTRUST FROMOTHERSIMILARRELATIONS

"Trust" is nown as fideicomiso under panish le#al s$ste, with the trusteebein# desi#nated as the fiduciario, and the beneficiar$ referred to as the fidecomisarioor the cestui que trustant% Barretto v. Tuason, 70 &hil% === (16


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bound to act in accordance with the instructions of the principal, and in the nae of theprincipal conse)uentl$, the a#ent is not a part$ to the contracts entered into b$ hi inthe nae of the principal, and has no ri#hts, or assues no obli#ations, under suchcontracts%

n the other hand, the trustee is #iven naed title to the propert$ to be held in

trust, and he transacts business with third parties under the trust in his own behalf as atrustee and le#al title holder and not in the nae of the beneficiar$% Althou#h a trustee isbound b$ the dut$ of lo$alt$, i.e., he ust act for the best interest of the beneficiar$, andthat in a conflict-of-interests situation, he ust prefer the interest of the beneficiar$ overthat of his own estate nonetheless, he is not bound b$ an$ dut$ of obedience, forindeed he has been #iven le#al title to the trust propert$ precisel$ because he ise+pected to use his discretion and best @ud#ent in pursuin# transactions under thetrust arran#eent% 3e is not e+pected to be bound b$ the instructions of the beneficiar$,

who often is an infant, or who has no le#al capacit$, lie an insane person% ecause thetrustee is obli#ed to ana#e the trust propert$ for the benefit of the beneficiar$, he isbound to e+ercise due dili#ence in his dealin#s in relation to the trust%

Bhile both a trust and a#enc$ relationships are fiduciar$ in nature the a#enc$relation is essentiall$ revocable "at the will of the principal," bein# based priaril$ on

willin#ness of the principal to be represented b$ another person% n the other hand, atrust bein# essentiall$ based on a propert$ relationship, is not revocable at will andalthou#h "revocation of trust" is the ter used, it is not at the will of the trustor or thebeneficiar$, unless that is so stated in the trust instruent, but can onl$ be based on a"breach of trust," or onl$ upon showin# that the trustee has breached his dut$ of lo$alt$or dut$ of dili#ence% n other words, a trustee cannot #enerall$ be stripped of the le#altitle unless it is shown that he is unfit for the position of trustee, or he has breached histrust obli#ations% Thus, in De Leon v. Molo-Peckson, 5 C;A 6= (16 !, the Court heldthat in the absence of an$ reservation of the power to revoe, an e+press trust (referred

to as "voluntar$ trust"!, is irrevocable without the consent of the beneficiar$%. ESSENTIALCHARACTERISTICSOFTRUST

The essential characteristics of a trust are as follows:

(a!A Method of Disposition of Property - ne based on propert$ relationship,whereb$ le#al or naed title in trust propert$ is held b$ one (the trustee!, and thee)uitable or beneficial title pertains to another person (the beneficiar$! (Art% 1440!

(b! Constitutin !iduciary "#liation - The splittin# in the ain aspects of the fulldoinion of the sub@ect propert$ is e+pressl$ and iplied constituted under a fiduciar$obli#ation on the part of the holder of the le#al title to hold the trust properties for thebenefit of the person to who e)uitable title pertains and

(c! $ssentially an $quita#le %elation - Trusts relations ust be based and

construed on principles in e)uit$ (Art% 144

Bith respect to the essential characteristic that trust relationship is alwa$s basedupon a splittin# of doinion over the trust propert$ (a le#al relation based on propert$ri#hts!, Pacheco v. Arro, =7 &hil% 707 (1670!, held that "DtEhe @uridical concept of a trust,

which in a broad sense involves, arises fro, or is the result of, a fiduciar$ relationbetween the trustee and the cestui que trust as re#ards certain propert$-real, personal,funds or one$, or choses in action%" (at p% 714!% n ore pinpointed lan#ua#e,&ulio v.


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Dalandan, es "trust" as "a ethod of disposition ofpropert$%" (at p% 770!%

trictl$ speain#, there is no le#al trust relationship e+istin#, unless and until thele#al title to the trust properties is transferred to the trustee, who taes such title

e+pressl$ or ipliedl$ under the obli#ation to hold and ana#e the properties for thebenefit of the beneficiar$% Trusts are essentiall$ le#al relationships that arise fropropert$ relations: "A trust is a fiduciar$ relationship with respect to propert$, sub@ectin#the person b$ who the propert$ is held to e)uitable duties to deal with it for the benefitof another%" (A)uino, ;anhilio Callan#an, %esultin Trusts and Pu#lic Policy'


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deceased%

n )u Tion v. )u, 5 C;A 670 (165

trustee with respect to the ri#ht of action of the latter% (%eiterated in De Buencamino v.De Matias, 15 C;A =46 D1655!

- The Essence of Trust Founded on Equity Principles

Bith respect to the e)uit$ nature of trust relations, Article 144< of the Civil Codeprovides that "The principles of the #eneral law of trusts, insofar as the$ are not inconflict with this Code, the Code of Coerce, the ;ules of Court and special laws, arehereb$ adopted%" The foundation of Article 144< a$ be drawn fro the decision in*overnment v. A#adilla, 45 &hil% 54< (16

action (&acheco vs% Arro, =7 &hil% 707!% (at p% =0!% The e)uit$ nature of a trust supports the proposition that the intention of the trustorto create a trust for the benefit of intended beneficiar$ should as uch as possible bereali>ed% Thus, Article 1444 provides that "/o particular words are re)uired for thecreation of an e+press trust, it bein# sufficient that a trust is clearl$ intended%" Anapplication of this doctrine (not the article! can be found in *overnment v. A#adilla, 45&hil% 54< (16


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the Court nonetheless held: "but on closer e+aination it sufficientl$ reveals thepurpose of the testator% And if its provisions are not in contravention of soe establishedrule of laws or public polic$, the$ ust be respected and #iven effect%" (at p% 545!%

n application of the e)uit$ nature of trusts,A#adilla held that the intention of thetrustor is the ore essential consideration, and that "DiEn re#ard to private trusts it is not

alwa$s necessar$ that the cestui que trust should be naed, or even be in esse at thetie the trust is created in his favor%D1E% % % Thus a devise to a father in trust foraccuulation for his children lawfull$ be#otten at the tie of his death has been held tobe #ood althou#h the father had no children at the tie of the vestin# of the funds in hias trustee% n charitable trusts such as the one here under discussion, the rule is stillfurther rela+ed%D


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n the other hand, %amos defined iplied trusts as "those which, without bein#e+pressed, are deducible fro the nature of the transaction as atters of intent, or

which are superinduced on the transaction b$ operation of law as atters of e)uit$,independentl$ of the particular intention of the parties" (quotin from =6 C%9%%


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tatute of 2rauds, as e+pressed succintctl$ in Article 147: "An iplied trust a$ beproved b$ oral evidence%"

D1ECitin 2/T/T;TA/T;T..'section


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II. EXPRESS TRUSTS

II. EPRESSTRUSTS

1. ESSENCEANDDEFINITIONOFEPRESSTRUSTa. Ep)%++ T)"+t E++%ntiall* Cnt)a't"al in Nat")%

Bhile Article 1441 defines an e+press trust as "created b$ the intention % % % of theparties," which clearl$ supports the proposition that the ne+us of ever$ e+press trustarran#eent is a contractual relationship nonetheless, the sae article also defines ane+press trust as "created b$ the intention of the trustor" alone, which sees to def$ theessence of utual consent as a necessar$ eleent in brin#in# about a contractualrelationship% Het it cannot be denied that no person a$ find hiself bound to thefiduciar$ duties and obli#ations of a trustee unless he previousl$ consents thereto, orvoluntaril$ assues a relationship to the trust propert$ that necessaril$ brin#s about theduties and obli#ations of a trustee%

n other words, there can be no den$in# the le#al truis that an e+press trustconstitutes essentiall$ a contractual relationship between and aon# the partiesthereto% This is supported b$ Article 1445 which states that "DaEcceptance b$ thebeneficiar$ is necessar$," and that if the trust does not ipose an$ onerous conditionupon the beneficiar$, then "his acceptance shall be presued, if there is no proof to thecontrar$%"

9urisprudence supports the contractual basis of e+press trusts as "those which arecreated b$ the direct and positive acts of the parties, b$ soe writin# or deed, or will orb$ words either espressl$ or ipliedl$ evincin# an action to create a trust%"&ulio v.Dalandan,


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to be "propert$%"

D!rancisco v. Leyco, ? C%A%;%


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has been e+ecution% t is an established doctrine that the tatute of 2rauds has noapplication to full$ or partiall$ e+ecuted contracts%

2inall$, Article 1447 supports the proposition that a contract of e+press trust is notan consensual contract, but essentiall$ re)uires transfer of title to the trust properties forits valid constitution, when it provides that "/o trust shall fail because the trustee

appointed declines the desi#nation, unless the contrar$ should appear in the instruentconstitutin# the trust%" nder Article 1441, an e+press can be "created b$ the intention ofthe trustor" alone, and that Article 1447 follows up b$ statin# that ones that intention hascreated the e+press trust, it cannot fail sipl$ "because the trustee appointed declinesthe desi#nation," which can onl$ ean that the intention of the trustor to create the trustcan onl$ be anifested b$ the act of placin# title in the trust properties in the nae ofthe desi#nated trustee for the benefit of the desi#nated beneficiar$% The refusal b$ thedesi#nated trustee (i.e.'non-#ivin# of his consent!, does not ae the e+press trustcontract void for lac of consent, for indeed the transfer of title to the propert$ has beeneffected, ost especiall$ of the beneficial or e)uitable title to the beneficiar$, whoseacceptance of the #rant of the trustor is deeed to have taen place when no onerous

condition has been placed upon hi under the ters of the trust a#reeent%&. Ep)%++ T)"+t M"+t N%4%)t3%l%++ B% S35n t

Ha4% B%%n Int%n&%&

Althou#h the rule under Article 1444 is that "/o particular words are re)uired forthe creation of an e+press trust, it bein# sufficient that a trust is clearl$ intended," (+eealsoTuason de Pere( v. Calua, 65 &hil% 6=1 D16 E&ulio v. Dalandan,


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That rule applies s)uarel$ to e+press trusts% The basis of the rule is that thepossession of a trustee is not adverse% /ot bein# adverse, he does not ac)uire b$prescription the propert$ held in trust% Thus, section ?= of Act 160 provides that the lawof prescription does not appl$ "in the case of a continuin# and subsistin# trust%"D5E(at p%ed that @urisprudence has accepted that ac)uisitiveprescription a$ appl$ under certain conditions even in an e+press trust, thus:"Ac)uisitive prescription a$ bar the action of the beneficiar$ a#ainst the trustee in ane+press trust for the recover$ of the propert$ held in trust where (a! the trustee hasperfored une)uivocal acts of repudiation aountin# to an ouster of the cestui )ui trust(b! such positive acts of repudiation have been ade nown to the cestui que trust and(c! the evidence thereon is clear and conclusive (a#una vs% evantino, supra alinasvs% Tuason, 77 &hil% an, -16050, 8a$


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2. 0INDSOFEPRESSTRUSTS

t has been held that the developent of trust, as a ethod of disposition ofpropert$ is to a lar#e part due to its freedo fro foral re)uireents% Lucenario'Domino' Parol $vidence of $3press Trust' 106 C;A 471, 47?, citin# 74 A% 9ur% 70%Thus, Article 1444 of the Civil Code provides that "/o particular words are re)uired for

the creatio of an e+press trust, it bein# sufficient that a trust is clearl$ intended%"Trust

n +alao v. +alao, 0 C;A 57 (165!, the Court held andator$ the provisionsof Article 144?, which re)uires that an e+press trust involvin# iovable propert$ ustbe covered in a written instruent, thus -

/ot a scintilla of docuentar$ evidence was presented b$ the plaintiffs to provethat there was an e+press trust over the Calunuran fishpond in favor of Valentin alao%

&urel$ parol evidence was offered b$ the to prove the alle#ed trust% Their claithat in the oral partition in 1616 of the two fishponds the Calunuran fishpond wasassi#ned to Valentin alao is le#all$ untenable%

t is le#all$ indefensible because the ters of article 144? of the Civil Code

(alread$ in force when the action herein was instituted! are pereptor$ andunistaable: parol evidence cannot be used to prove an e+press trust concernin#realt$% (at p% =1!

Althou#h Article 1444 provides that "DnEo particular words are re)uired for thecreation of an e+press trust," it still re)uires that the circustances indicate that "a trustis clearl$ intended"% Bhen it coes to iovable propert$, that "a trust is clearl$intended" taes onl$ one for: a written instruent as andated under Article 144?% nthe absence of such written instruent then public polic$ e+pressed under Article 144?is that no such intent to create a trust e+ists, and conse)uentl$, there are not trustobli#ations on the part of the purported trustee% Bhen it coes to other fors of trustproperties, the eleent of "intention to create trust" ust still coe into pla$, which is

an$ evidence tendin# to show that the trustor had transferred title to the trust propert$with intention to have the ana#ed for the benefit of the beneficiar$, coupled with anintention on the part of the trutee to have accepted title to the trust propert$ with theobli#ation to ana#e the for the benefit of the beneficiar$% A e+press trust is neverpresued to e+ist erel$ on the basis that title to propert$ has been transferred toanother person in the absence of written evidence, the intention to create a trust ustbe proved b$ clear and convincin# evidence% Thus, De Leon v. Molo-Peckson, 5 C;A6= (165

"The re)uireent to establish a trust the proof ust be clear, satisfactor$ andconvincin#, is sufficientl$ coplied with b$ the docuent in )uestion, which clearl$ and

une)uivocall$ declares the e+istence of the trust even if the sae was e+ecutedsubse)uent to the death of the trustor%" (at p% !

n De Leon, the instruent showed that the appellants a#reed to sell to theappellee the lots at a noinal price of &1%00 per lot, which to the Court represented areco#nition of a pre-e+istin# trust or a declaration of an e+press trust, based on theprovision in the donor's will to the effect that the titles to the land should be conve$ed toappellants with the dut$ to hold the in trust for the appellee%


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ut in+alao, after it was held that no e+press trust could have been constitutedover iovables without a written trust, the Court went on to deterine whether a trustover iovable propert$, which cannot be enforced in the absence of written evidencethereof, can still be pursued under the provisions of iplied trust: "s plaintiffs4 massive

oral evidence sufficient to prove an implied trust' resultin or constructive' reardin thet5o fishponds61(at p% =1 italic format supplied!% The atter will be covered under thesection below on iplied trusts%

a. Cnt)a't"al T)"+t+

(. $nter %i%os T)"+t+

'. T%+ta#%nta)* T)"+t

Palad v. Province of 7ue(on, 45 C;A ?74 (16 !, shows where an e+press trustwas ebodied in a holo#raphic will containin# testaentar$ dispositions, throu#h whichthe testator created a trust for the establishent and aintenance of a hi#h school to befinanced with tie incoe of certain specified properties for the benefit of the inhabitantsof a town, nain# as trustee whosoever a$ be the #overnor of the province%

n Pere( v. Araneta, 4 C;A 4?0 (16 !, the Court held that the provisions of thewill of the decedent e+plicit$l$ authori>in# the trustee constituted therein to sell thepropert$ held in trust and to ac)uired, with the proceeds of the sale, other properties,leaves no roo for doubt about the intent of the testatri+ to eep, as part of the trustestate, said proceeds of sale, and not turn the sae over to the beneficiar$ as net rentalor incoe%

n De Leon v. Molo-Pecson, 5 C;A 6= (16 !, the Court held that thee+ecution b$ the appellants of the a#reeent to sell the parcels of land at a noinalprice of &1%00 per lot, represent a reco#nition of a pre-e+istin# trust or a declaration ofan e+press trust, based on the provisions in the donor's will to the effect that the titles tothe parcels of land covered should be conve$ed to appellants with the dut$ to hold thein trust for the appellee%

&. El%%#+*na)* ) C3a)ita(l% T)"+t+

'. P"(li'l*6R%g"lat%& T)"+t+

. THETRUSTOR

a. T)"+t) a+ t3% C)%at) ! t3% T)"+t

nder Article 1440, the "trustor" is defined as the "person who establishes a trust"and under Article 1441, an e+press trust a$ be "created b$ the intention of the trustor%"


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The trustor therefore, disposes of his full ownership of the desi#nated trust properties infavor of the trustee who assues le#al title thereto, and the beneficiar$, to whobeneficial or e)uitable title shall pertain%

(. T)"+t) M"+t Ha4% L%gal Capa'it* t Cn4%* T)"+t P)p%)t*

*ayondato v. Treasurer of the P.., 46 &hil%


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wron# coitted b$ the tortfeasor for which he can be held personall$ liable% .ver$trustee has the coon law dut$ of dili#ence%

n addition, the trustee is e+pected to be lo$al to the affairs and interest of thebeneficiar$% 3e cannot appropriate for hiself an$ opportunit$ which in the course of hisfunctions as trustee should pertain to the beneficiar$% 3e has the dut$ to account t the

beneficiar$ for the affairs of the trust% And he cannot convert the use of the trustproperties, and the incoes, fruits and proceeds for his own benefit% .ver$ trustee hasthe coon law dut$ of lo$alt$%

Althou#h the beneficiaries a$ be entitled to receive the incoe flowin# fro thetrust estate, the profits reali>ed in the sale of trust properties are part of the capital heldin trust, to which the beneficiaries are entitled to receive as incoe% (Pere( v. Araneta, 4C;A 4?4 D165


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the court a$ order such conve$ance to be ade b$ the forer trustee or hisrepresentatives, or b$ the other reainin# trustees, as a$ be necessar$ or proper tovest the trust estate in the new trustee, either alone or @ointl$ with others%"

The provisions of ;ule ?= of the ;ules of Court are eant to ipleent the rule inthis @urisdiction that the non-acceptance, death, civil interdiction, insanit$, insolvenc$, or

even the resi#nation of a desi#nated trustee, shall not of itself prevent a trust frocoin# into fruition or e+tin#uish one that has been alread$ constituted% The doctrineflows fro the e)uit$ nature of the trust as a le#al institution in the &hilippines%

An e+aple of the application of this principle is in the decision in Loren(o v.Pasadas, 54 &hil% ?7? (16?!, where the will of the decedent never used the ter"trust", but nevertheless the intention to create one was deeed iplicit to the Court,thus: "The appointent of &%9%8% 8oore as trustee was ade b$ the trial court inconforit$ with the wishes of the testator as e+pressed in his will% t is true that the word'trust' is not entioned or used in the will but the intention to create one is clear% /oparticular or technical words are re)uired to create a testaentar$ trust (56 C%9%, p%11!% The words 'trust' and 'trustee', thou#h apt for the purpose, are not necessar$% n

fact, the use of these two words is not conclusive on the )uestion that a trust is created(56 C%9%, p% 14!% 'To create a trust b$ will the testator ust indicate in the will hisintention so to do b$ usin# lan#ua#e sufficient to separate the le#al fro the e)uitableestate, and with sufficient certaint$ desi#nate the beneficiaries, their interest in the trust,the purpose or ob@ect of the trust, and the propert$ or sub@ect atter thereof% tatedotherwise, to constitute a valid testaentar$ trust there ust be concurrence of threecircustances: (1! ufficient words to raise a trust (

called a trust, and whether or not he nows the precise characteristics of therelationship which is called a tust%F 3ere, that trust is effective as a#ainst defendants andin favor of the beneficiar$ thereof, plaintiff Victoria 9ulio, who accepted it in thedocuent itself%" (at pp% 770-771!

nder ections 7 and 5 of ;ule 6=, the followin# are the duties andresponsibilities of the trustee appointed b$ the courts:

(a! efore enterin# on the duties of his trust, a trustee shall file a bond with thecourt conditioned upon copliance with his duties


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(b! To ae and return to the court, at such tie as it a$ order, a true inventor$ ofall the real and personal estate belon#in# to hi as trustee, which at the tie of theain# of such inventor$ shall have coe to his possession or nowled#e

(c! To ana#e and dispose of all such estate, and faithfull$ dischar#e his trust inrelation thereto, accordin# to law and the will of the testator or the provisions of the

instruent or order under which he is appointed(d! To render upon oath at least once a $ear until his trust is fulfilled, unless he is

e+cused therefro in an$ $ear b$ the court, a true account of the propert$ in his handsand of the ana#eent and disposition thereof, and will render such other account asthe court a$ order and

(e! pon the e+piration of his trust, he will settle his accounts in court and pa$ overand deliver all the estate reainin# in his hands, or due fro hi on such settleent, tothe person or persons entitled thereto%

-7 Proper Proceedings for &ale or Encumbrance ofTrust Estate

nder ection 6 of ;ule 6= of the ;ules of Court, when the sale or encubrance

of an$ real or personal estate held in trust is necessar$ or e+pedient, the ;TC havin#proper @urisdiction of the trust a$, on petition and after due notice and hearin#, ordersuch sale or encubrance to be ade, and the reinvestent and application of theproceeds thereof in such anner as will best effect the ob@ects of the trust%

&. T)"+t%% D%+ Nt A++"#% G%n%)all* P%)+nalLia(ilit* n t3% T)"+t

Althou#h a trustee enters upon the fulfillent of his duties b$ his own nae, andnot in the nae of the trustor or the beneficiar$, nonetheless, it should be understoodthat the perforance of the functions of the trustee and the contracts entered into inpursuit of the trust, as perfored under Lofficial capacit$" as a trustee% Conse)uentl$,the liabilities assued b$ the trustee is such capacit$ can onl$ be enforced to the e+tent

of the trust properties% n other words, the trustee, unless he so stipulates, does notbecoe personall$ liable to his separate properties outside of the trust properties, forcontracts and transactions arisin# fro the trust and entered into in his official capacit$as trustee%

Thus, in Tan +enuan and Co. v. Phil. Trust Co.'7= &hil% 00 (16??!, where theproperties for which the trust copan$ had entered into transaction were received not ina trustee capacit$, the Court held that the trustee would be liable for such transactionsin its personal capacit$, and not as a trustee%

A trustee who acts within the scope of the trust therefore, has a ri#ht to char#e tothe trust estate the e+penses incurred b$ reason thereof%

n the other hand, a trustee is e+pected to e+ercise due dili#ence in the pursuit ofthe trust, and when he acts with fraud or #ross ne#li#ence, he becoes personall$liable for his own separate properties, as to all persons who suffer daa#e b$ reason ofsuch fraud or ne#li#ence% A trustee, who acts wi

%. T)"+t%% i+ Entitl%& t C#p%n+atin !) Manag%#%nt ! t3% T)"+t E+tat%


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n Loren(o v. Pasadas, 54 &hil% ?7? (16?!, the Court held that as a atter of#eneral proposition, "A trustee, no doubt, is entitled to receive a fair copensation forhis services%D=E" (at p% ?57!%

nder ection of ;ule 6= of the ;ules of Court, if the copensation of thetrustee is not deterined in the instruent creatin# the trust, his copensation shall be

fi+ed b$ the court that appointed hi%

nAraneta v. Pere(, C;A


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beneficiar$ of #ratuitous e+press trust is not sub@ect to the rules for the foralities ofdonations%

(. B%n%!i'ia)* N%%& Nt Ha4% L%gal Capa'it*

t is posited that the beneficiar$ of an e+press trust need not have le#al capacit$ tobe constituted as such in a trust a#reeent, especiall$ so when the desi#nation is an

act of pure liberalit$%nder Article ?= of the Civil Code, "All those who are not speciall$ dis)ualified b$

law therefore a$ accept donations," which eans that all persons re#ardless of le#alcapacit$, a$ be donees e+cept onl$ in those specific cases where the donation tothe cannot be ade% Article 41 provides that inors and others who cannot enterinto a contract a$ becoe donees but acceptance shall be done throu#h their parentsor le#al representatives% nder Article 4


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dies, becoes insane or sub@ect to soe other le#al incapacit$, or resi#ns or isreoved, the trust does not fail, but a new trustee will be appointed% uch anappointent will be ade b$ the propert$ court unless b$ the ters of the trust otherprovision is ade for the appointent of a successor trustee% The reason wh$ a trustdoes not fail for want of a trustee is that to perit it to fail for this reason would be

contrar$ to the intention of the trustor in creatin# the trust% The trustor is priaril$interested in the disposition of the beneficial interest in the propert$, and the atter of itsadinistration is a subsidiar$ consideration%" (+upra, at p% 55!%

%. Cn!"+in ) M%)g%) ! L%gal Titl% an& B%n%!i'ial Titl% in t3% Sa#% P%)+n

Bhen the trustee of an e+istin# trust becoes the beneficiar$ thereof, or viceversa, the trust relation is ipso 8uree+tin#uished, for it is difficult to see how a personcan owe fiduciar$ duties to hiself%

!. B)%a'3 ! T)"+t

Bhen a trustee breaches his dut$ of lo$alt$, it would constitute le#al basis b$which to terinate the trust% Thus, in Martine( v. Granno,4< &hil% ?7 (16


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III. IMPLIED TRUSTS

III. IMPLIED TRUSTS

1. NATUREOFIMPLIEDTRUSTSThe Code Coission in its ;eport e+plained that the doctrine on iplied trust is

founded on e)uit$, derived fro Aerican decisions under a le#al s$ste wherein@ustice would result in which the le#al estate or title were to prevail over the e)uitableri#ht of the beneficiar$% (%eport of the Code Commission' p% 50!%

n +alao v. +alao, 0 C;A 57 (165!, the Court characteri>ed "iplied trusts" as"'those which, without bein# e+pressed, are deductible fro the nature of thetransaction as matters of intent or which are superinduced on the transaction b$operation of la5 as matters of equity' independentl$ of the particualt intention of theparties' (=6 C%9%%

n %amos v. %amos, 51 C;A


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The essence of resultin# trusts is the iplication drawn out b$ law fro the natureof the transactions covered and necessaril$, the enuerated cases, bein# erel$iplied trust fro the lawFs perceived intentions of the parties, constitute erel$disputable presuptions of trust, and evidence a$ thus be adduced to show that notrust was intended nor conteplated b$ the parties%

Martine( v. *rano' 4< &hil% ?7 (16ed Lconstructive trustM as a trust L'raised b$construction of law, or arisin# b$ operation of lawF% n a ore restricted sense and ascontradistin#uished fro a resultin# trust, a constructive trust is Ka trust not created b$an$ words, either e+pressl$ or ipliedl$ evincin# a direct intention to create a trust, butb$ the construction of equity in order to satisfy the demands of 8ustice% t does not ariseb$ a#reeent or intention, but b$ operation of law%F (=6 C%9%%


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fishponds6M (at p% =1!% The Court held that an iplied trust in order to be reco#ni>edust Leasure up to the $ardstic that a trust ust be proven b$ clear, satisfactor$ andconvincin# evidence,M and Lcannot rest on va#ue and uncertain evidence or on loose,e)uivocal or indefinite declarations%M (at p% =?, citin De Leon v. Molo-Peckson, 115 &hil%1"Trusts0 Trust and trustee0 esta#lishment of trust #y parol evidence0 certainty ofproof.; Bhere a trust is to be established b$ oral proof, the testion$ supportin# itust be sufficientl$ stron# to prove the ri#ht of the alle#ed beneficiar$ with as uchcertaint$ as if a docuent provin# the trust were shown% A trust cannot be established,contrar$ to the recitals of a Torrens title, upon va#ue and inconclusive proof%" ($llabus,uare> vs% Tirabulo, 76 &hil% ?0?!%

1Trust evidence needed to esta#lish trust on parol testimony%Nn order to establisha trust in real propert$ b$ parol evidence, the proof should be as full$ convincin# as ifthe act #ivin# rise to the trust obli#ation were proven b$ an authentic docuent% uch atrust cannot be established upon testion$ consistin# in lar#e part of insecure surises

based on ancient hearsa$%" ($llabus, anta 9uana vs% el ;osario, 70 &hil% 110!% The fore#oin# rulin#s are #ood under article 147 of the Civil Code which, asalread$ noted, allows an iplied trust to be proven b$ oral evidence% Trustworth$ oralevidence is re)uired to prove an iplied trust because oral evidence can be easil$fabricated%

n the other hand, a Torrens title is #enerall$ a conclusive evidence of theownership of the land referred to therein (ec% 4, Act 465!% A stron# presuption e+iststhat Torrens titles were re#ularl$ issued and that the$ are valid% n order to aintain anaction for reconve$ance, proof as to the fiduciar$ relation of the parties ust be clearand convincin# (Huul vs% ;ivera and i>on, 54 &hil% 1?, 1-1=!%

The real purpose of the Torrens s$ste is to )uiet title to land% "nce a title is

re#istered, the owner a$ rest secure, without the necessit$ of waitin# in the portals ofthe court, or sittin# in the irador de su casa, to avoid the possibilit$ of losin# his land"(e#arda and &rieto vs% aleeb$, ?1 &hil% 760, 76?!% (at pp% =?-=4!%

The Court then concluded in +alao that LDtEhere was no resultin# trust in this casebecause there never was an$ intention on the partM of the parties involved Lto create an$trust% There was no constructive trust because the re#istration of the two fishponds % % %

was not vitiated b$ fraud or istae% This is not a case where to satisf$ the deands of@ustice it is necessar$ to consider the % % % fishponds as bein# held in trust%M (at p% =4!%

The conclusion one #ets fro +alao is that faced with a Torrens title that showsno trust relationship assued b$ the re#istered owner, and there is no other

written evidence to show an intention to create a trust, then assive oral evidence is#enerall$ unavailable to overcoe the re#istered title of the purported trustee whodenies the e+istence of an$ trust%

Thus, the s$llabus appearin# at the be#innin# in the decision in *am#oa v.*am#oa, 7< &hil% 70? (16


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the propert$ for ore than ten $ears, will not be declared to have been holdin# such titleas trustee for hiself and his brothers and sisters upon doubtful oral proof tendin# toshow a reco#nition b$ such owner of the alle#ed ri#hts of his brothers and sisters toshare in the produce of the land% (at pp% 70?-704!

n Municipality of2ictorias v. Court of Appeals, 146 C;A ?< (16=!, it was held

that the e+istence of public records other than the Torrens title indicatin# a properdescription of the land, and not the technical description thereof, and clearl$ indicatin#the intention to create a trust, was considered sufficient proof to support the clai of thecestui que trust%

&erhaps the best wa$ to end this section is to invoe the decision in "n Chin Pov. Court of Appeals,


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person to who the title is conve$ed is a child, le#itiate or ille#itiate, of the onepa$in# the price of the sale, no trust is iplied b$ law, it bein# disputabl$ presued thatthere is a #ift in favor of the child%

n Martine(, the Court alluded to the provision of then Article 151 of the old Civil

Code, relatin# to inors, that Lthe ownership or en@o$ent of propert$ ac)uired b$ ainor child with funds of his parents, pertain to the latter DparentsEM, which the Courtobserved was Lthe onl$ provision which we have found an$where in the laws now inforce that declares the propert$ to belon# to the person who paid the one$%M (at p%546!% Althou#h the e+ception rule under Article 144= is erel$ a disputable presuption,

which eans that it can still be shown that indeed the parents had placed propert$bou#ht b$ the in the nae of their child to ipose an obli#ation on the part of the childto adinister the sae for the benefit of the parents, especiall$ when the child is nolon#er a inor%

iewise, if it is shown that the person who paid for the aount of the purchaseprice did so as a loan or an advance to the person in whose nae the title to the

propert$ is transferred, then no iplied trust should also result% n Padilla v. Court of Appeals, 7? C;A 15= (16?!, the Court applied theprovisions of Article 144= to ipute a resultin# trust where pursuant to a specialarran#eent with I which had foreclosed the ort#a#ed propert$ and the ri#ht ofredeption had alread$ e+pired, where the ort#a#ees-spouses had effected the salethereof to the trustee with the undertain# that he would use funds supplied b$ thespouses to bu$-bac the propert$ on behalf of the spouses% The Court observed: LTheconcept of iplied trusts is that fro the facts and circustances of a #iven case thee+istence of a trust relationship is inferred in order to effect the presued (in this case itis even e+pressed! intention of the parties or to satisf$ the deands of @ustice or toprotect a#ainst fraud%M (at p% 16!%

ation of the situation as an iplied trust, would ipose upon thelender-re#istered owner the fiduciar$ obli#ations of the a trustee, and would thendis)ualif$ hi to tae actions that would protect his interest, such as to effect foralforeclosure of the e)uitable ort#a#e% Bhen the borrower-beneficiar$ fails or refuses toredee the propert$ (i.e., pa$ the principal obli#ation!, and the lender brin#s an action


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for collection, can the estate propert$ be levied upon for the pa$ent of the @ud#entdebt, contrar$ to his dut$ of lo$alt$ as a iplied trusteeJ The situation is a constructivetrust, and therefore there is reall$ no fiduciar$ dut$ e+istin# between the parties%

Trinidad v. %icafort, &hil% 446 (16 !%

+evilla v. De los Aneles, 6 &hil% =7 (1677!%

'. T5 ) M)% P%)+n+ P")'3a+% P)p%)t* ;intl*, B"t Pla'%+ Titl% In On% !T3%#

nder Article 147


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Camumot, 40 &hil% =7 (16ed the principle that when a co-owner or

co-heir refutes the co-ownership and taes adverse possession of the propert$ forhiself alone, then ac)uisitive prescription a$ arise in his favor to the detrient of theother co-heirs or co-owners% Barayo distin#uished between the rule of iprescriptibilit$of the action for partition aon# co-owners, fro the doctrine of ac)uisitive prescriptionthat allows a person to obtain title to propert$ b$ open, adverse possession%

n +everino v. +everino, 44 &hil% ?4? (16


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nder Article 1446, there is an iplied trust when a donation is ade to a personbut it appears that althou#h the le#al estate is transitted to the donee, he neverthelessis either to have no beneficial interest or onl$ a part thereof%

n has been observed that the iplied trust conteplated under Article 1446 is

analo#ous to, but should not be confused with, the fideicommissary substitution underArticle =5? of the Civil Code, wherein the testator desi#nates a person as an heirchar#in# hi to deliver to another person the whole or part of the inheritance% (Co)uia,9or#e ;%, The Doctrine of mplied Trust, ?10 C;A 4=5, 46

were not $et e+istin#, the Court observed that a fideicoomissary substitution is note)uivalent to the .n#lish trust%

!. P)p%)t* Cn4%*%& t P%)+n M%)%l* a+ Hl&%) T3%)%!

nder Article 147?, when propert$ is conve$ed to a person in reliance upon hisdeclared intention to hold it for, or transfer it to another or the #rantor, there is an ipliedtrust in favor of the person whose benefit is conteplated%

The situation covered b$ Article 147? covers reall$ an e+press trust, because titleto propert$ is taen b$ the trustee under a clear a#reeent to hold it for another person%The onl$ difference is that there has been no foral acceptance b$ the persondesi#nated to be a beneficiar$, or perhaps the desi#nated beneficiar$ does not $ete+ists, such as an unborn child%

An e+aple of the situation covered b$ Article 147? a$ be found in the decisionin Pacheco v. Arro, =7 &hil% 707 (1670!, where the clais of respondents in cadastralcase were withdrawn rel$in# upon the assurance and proise ade in open court b$petitionersF predecessor-in-interests that upon obtainin# title to the properties sub@ect tothe petition, he would conve$ and assi#n the lots to the respondents in accordance withtheir respective clais% n an action for specific perforance filed to copel the

petitioners to assi#n and conve$ the lots covered, the Court held: LBhen the clai tothe lots in the cadastral case was withdrawn b$ the respondents rel$in# upon theassurance and proise ade in open court b$ % % % the predecessor-in-interests of thepetitioners, a trust or a fiduciar$ relation between the arose, or resulted therefro, or

was created thereb$%M (at pp% 714-717!%

n Martine( vs. *ra:o, 4< &hil% ?7 (16


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Art% 147? thereof, is founded upon e)uit$% The rule is the sae in the nited tates,particularl$ where, on the faith of the a#reeent or understandin#, the #rantee isenabled to #ain an advanta#e in the purchase of the propert$ or where theconsideration or part thereof has been furnished b$ or for such other% Thus, it has beenheld that where the #rantee taes the propert$ under an a#reeent to conve$ to

another on certain conditions, a trust results for the benefit of such other or his heirs,which e)uit$ will enforce accordin# to the a#reeent% (1=6 C%9%% 650!% t is also the rulethere that an iplied trust arises where a person purchases land with his own one$and taes a conve$ance thereof in the nae of another% n such a case, the propert$ isheld on a resultin# trust in favor of the one furnishin# the consideration for the transfer,unless a different intention or understandin# appears% The trust which results undersuch circustances does not arise fro contract or a#reeent of the parties, but frothe facts and circustances, that is to sa$, it results because of e)uit$ and arises b$iplication or operation of law% (ee =6 C%9%% 654-65=%!%M (at pp% 70


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n Camacho v. Municipality of Bali5a, e the developent of the doctrine, thus:

n $ Aloc vs% Cho 9an in# (16 &hil% ;ep%, conve$ance be ade b$ the defendant to the ebers of the association% n Ta#uinot vs% 8unicipalit$ of Tana$ (6 &hil% ;ep%, ?65!, the plaintiffs, as heirs oftheir father, sou#ht to recover possession of a parcel of land held b$ the unicipalit$ onthe stren#th of a panish patent issued to hi% t was proved (lar#el$ b$ parol evidence!that their father acted on behalf and at the e+pense of the unicipalit$ in securin# thepatent% The patent was retained b$ the #obernadorcillo, a cop$ onl$ bein# issued to thepatentee% The latter also drew up a private docuent en#a#in# to e+ecute aconve$ance to the unicipalit$, the sae bein# offered in evidence% The unicipalit$had continuousl$ occupied the land since the issuance of the title% The @ud#ent of thecourt below disissin# the coplaint was affired%

n the followin# cases of a siilar character, parol evidence was held not sufficient

to overcoe the case ade out b$ the holder of the re#istered title: elen vs% elen (1?&hil% ;ep%,

was denied in each case, because the ri#hts of an innocent third purchaser intervened%

ut in the first case the in@ured persons were held entitled to daa#es, provided the$were able to establish the sae% n the second case, however, the court presued awaiver of their clais b$ reason of other evidence of record% The fact that the parolevidence relied upon in the cases cited in this para#raph to defeat the docuents of title

was carefull$ considered b$ the court, ipliedl$ adits its copetenc$% t failed in itspurpose in these cases erel$ because it was not sufficientl$ stron# to overcoe thecase in favor of the holders of the re#istered titles%


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The Court then concluded in Camacho as follows: LBe hold, therefore, that theparol evidence introduced b$ the defendant unicipalit$ was copetent to defeat theters of the plaintiff's deed% t need onl$ be added that in all such cases as the present

we have re)uired and shall continue to re)uire that the proof contradictin# suchdocuents ust be clear and convincin#% These )ualities are apparent in the proof

offered b$ the defendant unicipalit$ in the case at bar%M n +everino v. +everino, 44 &hil% ?4? (16


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copan$ directl$ eplo$ed fraud to induce the copan$ to forfeit it option to purchasea valuable lar#e tract of land, and thereafter hiself purchased the sae% The Court, inaffirin# the decision of the trial court that decreed the reconve$ance of the propert$ tothe copan$, aditted that fro statutor$ law onl$ a recover of daa#es a#ainst theeplo$ee was allowed, thus: LThis reparation provided for in the Civil Code and applied

to the case of bar sees to be liited to the indenification of daa#es, as we are notaware of an$ e+press provision in said Code which iposes upon the person thus heldliable, an$ obli#ation, such as that of transferrin# to plaintiffs the estate in )uestion%M (atp% 76?!% /onetheless, the Court affired that LThis specific relief Dreconve$anceE,however, has alread$ coe to be applied in this @urisdiction in siilar cases, aon#

which can be cited that of Caacho vs% 8unicipalit$ of aliu# (ed, and a transaction of thisnature i#ht be re#arded as an eplo$ee is deeed not to have been ac)uired for hisown benefit or that of an$ other person but for his principal, and held in trust for thelatter (at p% 76?, citin


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n Laureano v. +tevenson, 47 &hil%


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Article 1475, which allows the a##rieved part$ a reed$ to see reconve$ance, is areed$ that can be enforced a#ainst the part$ who has eplo$ed fraud, thus: Lut theri#ht of action in this constructive trust should be e+ercised a#ainst the trustee, whocaused the fraud, and not a#ainst an innocent purchaser for value, as the usana;ealt$, nc% This ri#ht a$ also be e+ercised a#ainst antia#o Cru> who also obtained

title to the land with nowled#e of the fraud, but not with re#ard to usana ;ealt$, nc%which, as alread$ stated, has bou#ht the propert$ in #ood faith% The reed$ in this caseof the defrauded heirs is to brin# an action for daa#es a#ainst those who caused thefraud or were instruental in deprivin# the of the propert$% Their action cannot reachan innocent purchaser for value who is protected b$ law%M (at p% 50!

iewise, under the /ew Civil Code, the Court reiterated the principle that LDpEublicpolic$ deands that a person #uilt$ of fraud or at least, of breach of trust, should not beallowed to use a Torrens title as a shield a#ainst the conse)uences of his own

wron#doin#%M 2da. de &acinto v. 2da. de &acinto, 7 C;A ?0 (165

nder the ae#is of Article 1475, the Court liewise reiterated the principle that

re#istration of propert$ b$ one person in his nae, whether b$ istae or fraud, the realowner bein# another person, ipresses upon the title so ac)uired the character of aconstructive trust for the real owner, which would @ustif$ an action for reconve$ance:

Q n *on(ales v. &imene(' 1? C;A =0 (1657!, where unre#istered land was sold b$ thefather to a bu$er who too possession thereof, but subse)uentl$, the father ana#ed toobtain a free patent over the sae propert$ in the nae of the son to who an ori#inalcertificate of title was issued

Q n !a#ian v. !a#ian,


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trust, the 8unicipalit$ of Victorias% The Torrens s$ste was never calculated to foentbetra$al in the perforance of a trust%M (at p% 47, citin $sco#ar v. Locsin, 4 &hil% =5D164?E!%

+alomon v. ntermediate Appellate Court, 1=7 C;A ?7< (1660!%

Tomas v. Court of Appeals, 1=7 C;A 5


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within four years fro the tie the fraud was discovered% /ote that the action was notbrou#ht under the principles of iplied trust%

t is said that it was in 9ustice 9 ;e$es' dissentin# opinion in the 1675 decisionin Mara#iles v. 7uito , 100 &hil% 54 (1675!, that the seeds on acceptin# prescriptibilit$ for

iplied trust be#an to tae roots, thus --

" concur with the reasons of the a@orit$ decision, but consider the stateent tothe effect that "propert$ held under constructive trust can be vindicated re#ardless of thelapse of tie" uch too broad for un)ualified assent% The rule of iprescriptibilit$ islo#ical in case of e+press trusts, since a part$ who a#rees to hold propert$ for another,and upon whose proise confidence is reposed, will naturall$ be held to his a#reeent,and will not be allowed to set title in hiself without first repudiatin# the trust e+pressl$%The rule can be e+tended to resultin# trusts, since the intent to create a trust e+ists insuch case, even if all re)uisites of e+press trust do not concur% ut in constructive trusts,based on fraud or tort, the eleent of trust and confidence is not present, and the

authorities are Da#reedE that no repudication is re)uired for the application of e+tinctiveprescription (?4 A% 9r% pp% ==, 14? Aerican aw nst%, ;estateent on ;estitution,ec% 16 ;estateents on Trusts, ec%


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title in trust for the appellees to redee, sub@ect to the pa$ent of the redeption priceand that prescription would appl$ onl$ where the trustee asserts a ri#ht adverse to thatof the cestui que trust, such as, assertin# acts of ownership over the propert$ bein# heldin trust% ut in that case it was held that no prescription could tae place since the trialcourtFs decision becae final, the defeated trustee plaintiffs-spouses ac)uiesced in the

decision #rantin# the defendants-spouses the ri#ht to redee the propert$ andreco#ni>in# ownership ri#hts in the, such as the collection of rentals due on thepropert$, especiall$ when plaintiffs-spouses Ldid not even have the possession of thepropert$ in order to e+ercise acts of ownership over the sae%M (at p% 174!% n other

words, even in an iplied trust, when the purported trustee actuall$ tae co#ni>ance ofthe trust and holds the propert$ for the benefit of the cestui que trust' no clais ofprescription or laches can find erit%

n 165

n 1654, the Court be#an to turn awa$ fro the notion of iprescriptibilit$ of theaction for reconve$ance under an iplied trust, when in *erona v. De *u(man, 11C;A 17? (1654!, it reaffired the rule of prescriptibilit$ and e+pressl$ overruledprevious decisions to the contrar$, thus N

Althou#h, there are soe decisions to the contrar$ (9acinto vs% 8endo>a, 107&hil%, , 107 &hil%, 1?7 8arabiles vs% *uito, 100 &hil%, 54 andevilla vs% e los An#eles, 6 &hil%, =7!, it is already settled in this 8urisdiction that anaction for reconveyance of real property #ased upon a constructive or implied trust'resultin from fraud' may #e #arred #y the statute of limitations (Candelaria vs%

;oero, 106 &hil%, 700 Al>ona vs% Capunita, -10nasmuch as petitioners seek to annul the aforementioned deed of 1e3tra-8udicialsettlement1 upon the round of fraud in the e3ecution thereof' the action therefor may#e filed 5ithin four /@ years from the discovery of the fraud (8auricio vs% Villanueva, -


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110


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#y the appellants that their father' in violation of their property in his o5n name and inthe names of his #rother% t would not do not sa$ that the cadastral proceedin# itself, b$virtue of its nature as a preceedin# in rem'was constructive notice to the appellants, foras far as the$ were concerned the cadastral answer the$ had authori>ed the father ofthe plaintiffs to file was not adverse to the and neither he nor the appellees a$

invoe the constructive-notice rule on the basis of their own breach of the authorit$ thus,#iven% n top of all this, it was the appellants and not the appellees who were inpossession of the propert$ as owners, continuousl$ up to 165ona vs%Capunitan, -10


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I%;% /o% -177?6, 9an% ?0, 165ona vs%Capunitan, /o% -10


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t sees prett$-well-settled that when it coes to iplied trusts, whether resultin#or constructive trusts, and even those where the underl$in# e)uit$ consideration isbased on fraud, that prescription and laches would appl$ to bar recover$ b$ the cestuique trustof the propert$ held in the nae of the purported trustee, and the prescriptiveperiod is ten $ears% The onl$ lin#erin# )uestion is when e+actl$ the 10-$ear prescriptive

period be#insJ Bhile the a@orit$ of recent decisions of the upree Court point to there#istration of title for re#istered land with the appropriate ;e#ister of eeds as thereconin# tie, there have been recent decisions that use the actual date of discover$of fraud, as the reconin# tie, when the iplied trusts is founded on fraud %

n Tonoy v. Court of Appeals, 1


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the donee shall share one-half />HI@ of the entire property 5ith one of her #rothers orsisters after the death of the donor0M and title to the propert$ was issued in the solenae of the dau#hter% ut an$ $ears later after the death of the father, the dau#hterhad forall$ e+ecuted a sworn waiver acnowled#in# that the propert$ was re#isteredin her nae but with the intention that she would hold one-half of it in favor of the

brother 3oracio% The Court applied Article 1446, which provides that LThere is also aniplied trust when a donation is ade to a person but it appears that althou#h the le#alestate is transitted to the donee, he nevertheless is either to have no beneficialinterest or onl$ a part thereof%M n rulin# upon the issue of whether the brother was #uilt$of laches or that his action had prescribed, the Court held N

;espondent Violeta and her husband also contended that the lon# dela$ andinaction on the part of 3oracio in tain# an$ steps for reconve$ance of the one-half (1

3oracio's alle#ed one-half share was barred b$ laches, if not b$ prescription% A#ain, werule for the petitioners% n determinin 5hether delay in seekin to enforce a rihtconstitutes laches' the e3istence of a confidential relationship #ased upon' for instance'consanuinity' is an important circumstance for consideration. Delay in a situation5here such circumstance e3ists' should not #e as strictly construed as 5here the

parties are complete straners vis-a-vis each other. The doctrine of laches is not to #eapplied mechanically as #et5een near relatives the fact that the parties in the instantcase are brother and sister tends to e+plain and e+cuse what would otherwise appearsas lon# dela$% 8oreover, continued reco#nition of the e+istence of the trust precludesthe defense of laches% The two (

had reco#ni>ed the trust iposed on her b$ law% Conversely'


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allowed% % % % .ven assuin# that there was an iplied trust, private respondents'attept at reconve$ance (functionall$, an action for partition is both an action fordeclaration of co-ownership, and for se#re#ation and conve$ance of a deterinateportion of the sub@ect propert$% ee ;o)ue vs% AC, I%;% /o% 7==5, Au#ust ?0, 16==,157 C;A 11=! was clearl$ barred b$ prescription%

+ + + % t is well-settled that an action for reconve$ance of real propert$ to enforce aniplied trust prescribes in ten $ears, the period reconed fro the issuance of theadverse title to the propert$ which operates as a constructive notice%

n the case at bar, that assertion of adverse title, which was in e+plicit indication ofrepudiation of the trust for the purpose of the statute of liitations, too place whenCT /o% 46551 was issued in the nae of 2austo o$ in 16? wouldhave us believe when she testified in court that while 2austo o$ i#ht have succeededin securin# title in his sole nae, he nonetheless reco#ni>ed the co-ownership between

hi and his sisters the rule in this @urisdiction is that an action to enforce an iplied trusta$ be circuscribed not onl$ b$ prescription but also b$ laches, in which caserepudiation is not even re)uired%

2ro 16?< to 1657, or a period of thirt$-three $ears, private respondents hadliterall$ slept on their ri#hts, presuin# the$ had an$% The$ can no lon#er dispute theconclusive and incontrovertible character of 2austo o$'s title as the$ are deeed, b$their unreasonabl$ lon# inaction, to have ac)uiesced therein% 8oreover, the law protectsthose who are vi#ilant of their ri#hts%

ndue dela$ in the enforceent of a ri#ht is stron#l$ indicative of a lac of erit inthe clai, since it is huan nature for persons to assert their ri#hts ost vi#orousl$

when threatened or invaded% (at pp% 11?-114!%

n "4Laco v. Co Cho Chit,


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If the possessor of a movable lost or of which the owner has been unlawfully deprived, has acquired it in good faithat a public sale, the owner cannot obtain its return without reimbursing the price paid therefore.

[2]Citin 74 A8% 9;%, secs% 7=0, 7=1 57 C% 9%, secs% 675, 67, 67= A 8.;% AB/TTT., ;.TAT.8./T/T;T, sec%%, 16=0%

[6]Citin Al(ona v. Capunitan'4 C;A 470 (165

POSTED BY Dean Cesar L. Villanueva AT 8!"#!!8 $%## AM & ! COMMENTS & POST A

COMMENT & DI'' IT
http://deanclvontrusts.weblog.com/2008/8/III-IMPLIED-TRUSTS.htmlhttp://deanclvontrusts.weblog.com/2008/8/III-IMPLIED-TRUSTS.htmlhttp://deanclvontrusts.weblog.com/2008/8/III-IMPLIED-TRUSTS.htmlhttp://www.weblog.com/comments.aspx?blogid=23901&postid=48638http://www.weblog.com/comments.aspx?blogid=23901&postid=48638http://digg.com/submit?phase=2&url=http%3A%2F%2Fdeanclvontrusts.weblog.com%2F&title=DeanCLV+on+TRUSTShttp://deanclvontrusts.weblog.com/2008/8/III-IMPLIED-TRUSTS.htmlhttp://deanclvontrusts.weblog.com/2008/8/III-IMPLIED-TRUSTS.htmlhttp://www.weblog.com/comments.aspx?blogid=23901&postid=48638http://www.weblog.com/comments.aspx?blogid=23901&postid=48638http://digg.com/submit?phase=2&url=http%3A%2F%2Fdeanclvontrusts.weblog.com%2F&title=DeanCLV+on+TRUSTS

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