1|Page

131. Salao vs. Salao, 70 SCRA 65

2|Page
132. RESURRECCION DE LEON, ET AL. vs. EMILIANA MOLO-
PECKSON, ET AL. (1962)
BAUTISTA ANGELO, J.:
Trustor/Donor: Mariano Molo y Legaspi and Juana Juan (their foster
parents)
Trustee/Donees: Emiliana Molo-Peckson and Pilar Perez Nable
Beneficiaries: Resurreccion de Leon, et al.
Moral of the Story: A declaration of trust has been defined as an act by
which a person acknowledges that the property, title to which he holds, is
held by him for the use of another. And in the absence of any reservation of
the power to revoke a voluntary trust, the trust is irrevocable without the
consent of the beneficiary
Facts of the Case:
On January 24, 1941, Mariano Molo y Legaspi died leaving a will wherein he
bequeathed his entire estate to his wife, Juana Juan.
On May 11, 1948, Juana Juan in turn executed a will naming therein many
devisees and legatees, one of whom is Guillermo San Rafael, mother of the
plaintiffs de Leon, et al. and of the defendant Pilar.
On June 7, 1948, however, Juana Juan executed a donation inter vivos in
favor of Emiliana and Pilar almost all of her entire property leaving only
about P16,000.00 worth of property for the devisees mentioned in the will.
Among the properties conveyed to Emiliana and Pilar are the ten parcels of
land subject of the present action.
Juana Juan died on May 28, 1950.
On December 5, 1950, Emiliana and Pilar executed a document which they
called "Mutual Agreement"1 wherein the parties mutually agreed to sell ten
1
Pertinent Portions of the “Mutual Agreement”
That the above named parties hereby mutually agree by these presents . . . that the following lots
should be sold at ONE (1) PESO each to the following persons and organization:
TO — JUSTA DE LEON and RESURRECCION DE LEON, several parcels of land located at Calle
Tolentino (South of Tenorio and Kapitan Magtibay), Pasay City, share and share alike or half and half
of TEN (10) LOTS described in:
Transfer Certificate of Title No. 28157 — and allocated as follows:
lots at P1 each, in conformity with the verbal wish of the late Don Mariano
Molo y Legaspi and the late Dona Juana Francisco Juan y Molo.
On August 9, 1956, however, the same Emiliana and Pilar, assisted by their
husbands, executed another document in which they revoked the so-called
mutual agreement mentioned above, and another relating to the same
subject matter, stating therein that the parties, "after matured and thorough
study, realized that the above-mentioned public instruments . . . do not
represent their true and correct interpretation of the verbal wishes of the late
spouses Don Mariano Molo y Legaspi and Dona Juana Francisco Juan y
Molo."
On August 11, 1956, the beneficiary Resurreccion de Leon and Justa de
Leon, thru their counsel demanded the conveyance to them of the ten
parcels of land for the consideration of P1.00 per parcel as stated in the
document of December 5, 1950. And having the defendants refused to do
so, said beneficiaries consigned on July 8, 1957 the amount of P10.00 as the
consideration of the ten parcels of land.
TC: Trust has been constituted by the late spouses Mariano Molo and Juana
Juan over the ten parcels of land in question in favor plaintiffs as
beneficiaries.
SC: Affirmed TC judgment (with minor modifications with regard to
accounting)2.
The “Mutual Agreement” creates an express trust in favor of
plaintiff-appelees.
(a) To JUSTA DE LEON Five (5) Lots.
(b) To RESURRECCION DE LEON, the remaining Five (5) Lots.
That this agreement is made in conformity with the verbal wish of the late Don Mariano Molo y Legaspi
and the late Dona Juana Francisco Juan y Molo. These obligations were repeatedly told to Emiliana
Molo Peckson, before their death and that same should be fulfilled after their death.
2
The trial court ordered that the accounting be made from the time appellees demanded the
conveyance of the ten parcels of land on August 11, 1956, in accordance with Article 1164 of the new
Civil Code which provides that the creditor has a right to the fruit of the thing from thetime the
obligation to deliver it arises. But this cannot be done without first submitting proof that the conditions
stated in the mutual agreement hadbeen complied with. And this only happened when the decision of
the Supreme Court in G.R. No. L-8774 became final and executory. The ruling of the trialcourt in this
respect should therefore be modified in the sense that the accounting should be made from the date
of the finality of the said decision.
3|Page
 The “Mutual Agreement” represents a recognition of pre-existing
trust or a declaration of an express trust impressed on the ten
parcels of land in question. A declaration of trust has been defined
as an act by which a person acknowledges that the property, title to
which he holds, is held by him for the use of another.
 The document in question clearly and unequivocally declares the
existence of the trust even if the same was executed subsequent to
the death of the trustor, Juana Juan, for the right creating or
declaring a trust need not be contemporaneous or inter-parties.
 The contention of appellants that the will and the donation executed
by their predecessors-in-interest were absolute for it did not contain
a hint that the lots in question will be held in trust by them does not
merit weight because the fact that an express trust was created by a
deed which was absolute on its face may be shown by a writing
separate from the deed itself.
 The fact that the beneficiaries were not notified of the existence of
the trust or that the latter have not been given an opportunity to
accept it is of no importance, for it is not essential to the existence
of a valid trust and to the right of the beneficiaries to enforce the
same that they had knowledge thereof the time of its creation.
Neither is it necessary that the beneficiary should consent to the
creation of the trust. In fact it has been held that in case of a
voluntary trust the assent of the beneficiary is not necessary to
render it valid because as a general rule acceptance by the
beneficiary is presumed.
Appellants had no right to revoke the trust without the consent of
the cestui que trust
 It is true, as appellants contend, that the alleged declaration of trust
was revoked, and having been revoked it cannot be accepted, but
the attempted revocation did not have any legal effect. The rule is
that in the absence of any reservation of the power to revoke a
voluntary trust is irrevocable without the consent of the beneficiary.
It cannot be revoked by the creator alone, nor by the trustee. Here,
there is no such reservation.
Appellants should free said lands from all liens and encumbrances.
 Appellants Emiliana and Pilar should free the lands in question from
the encumbrance that was created thereon by them in favor of the
Development Bank of the Philippines and one Claro Cortez, for as
trustees it is their duty to deliver the properties to the cestui que
trust free from all liens and encumbrances.
Obiter: On the Validity of the “Mutual Agreement”
 Mutual Agreement was executed by appellants on December 5,
1950, or about two years and six months from the time they
acquired title to the lands by virtue of the donation inter vivos
executed in their favor by their foster mother Juana Juan and six
months after the death of the donor. There is nobody who could
cajole them to execute it, nor is there any force that could coerce
them to make the declaration therein expressed, except the
constraining mandate of their conscience to comply with the
obligations repeatedly told to Emiliana Molo Peckson before the
death of Juana Juan. In fact, the acknowledgement appended to
the document they subscribed states that it was "their own free act
and voluntary deed."
 Emiliana and Pilar both studied in reputable centers (one being a
pharmacist and the other a lawyer) so it is to be supposed that they
understood and comprehended the legal import of the Mutual
Agreement they executed.
 Moreover, they have more than ample time — the six months
intervening betwen the death of the donor and the execution of the
document — to ponder not only wish of their predecessors-in-
interest but also on the propriety of putting in writing the mandate
they have received. It is, therefore, reasonable to presume that that
document represents the real wish of appellants' predecessors-in-
interest.
Obiter: On the issue of whether the lower court erred in applying
the provisions of the new Civil Code on trust since this express
trust was constituted before the effectivity of the NCC
 Appellants contend that the lower court erred in applying the
provisions of the new Civil Code on trust. This is correct. The express
trust was constituted during the lifetime of the predecessor-in-
interest of appellants, that is, before the effectivity of the new Civil
Code, although the instrument recognizing and declaring such trust
was executed on December 5, 1950, after the effectivity of said
Code. The Civil Code of 1889 and previous laws and authorities on
the matter, therefore, should govern the herein trust under the
provisions of Article 2253 of the new Civil code.
4|Page

 But the Civil Code of 1889 contains no specific provisions on trust as

does the new Civil Code. Neither does the Code of Civil Procedure of
1901 for the same merely provides for the proceeding to be followed
relative to trusts and trustees (Chapter XVIII). This silence, however,
does not mean that the juridical institution of trust was then
unknown in this jurisdiction, for the principles relied upon by the
Supreme Court before the effectivity of the new Civil Code were
those embodied in Anglo-American jurisprudence as derived from
the Roman and Civil Law principles. And these are the same
principles on which we predicate our ruling heretofore stated and on
which we now rely for the validity of trust in question.
5|Page

133. Government vs. Abadilla, 46 Phil. 642

6|Page
134. Cristobal vs. Gomez, 50 Phil. 810 (1927)
Street, J
This action was instituted in the CFI of Cavite by Paulina Cristobal, wife of
Epifanio Gomez, and her children to recover from Marcelino Gomez (brother
of Epifanio) two parcels of land located in the sitio of Japay.
Facts:
1. Property in question belonged to Epifanio.
2. 13 Dec 1891 – Epifanio sold the property under contract of sale with
pacto de retro to Luis Yangco, redeemable in 5 years, for the sum of
Php2,500
3. Epifanio remained in possession of the property but in the character
of a lessee
4. Property was not redeemed in 5years. But Yangco after many years
conceded to the vendor the privilege of repurchasing
5. Epifanio had no means to repurchase applied to Bibiano Banas, a
kinsman, for assistance. Bibiano agreed on the condition that
Epifanio’s brother, Marcelino, and sister, Telesfora, would make
themselves responsible for the loan. Banas eventually advanced
Php7,000.00 to be used to repurchase the property in the name of
Marcelino and Telesfora.
6. Marcelino and Telesfora will administer the property until the capital
advanced by Banas should be paid off afterwhich the property will be
returned to Epifanio.
7. Marcelino and Telesfora created a “private partnership in
participation” for the purpose of redeeming the property. Marcelino
will act as the manager.
8. Among the provisions in the partnership agreement:
a. (h) That all the income, rent, and produce of the aforesaid
property of Epifanio Gomez shall be applied exclusively to
the amortization of the capital employed by the two parties,
that is to say, Don Marcelino Gomez and Doña Telesfora
Gomez, with its corresponding interest and other incidental
expenses.
b. (i) As soon as the capital employed, with its interest and
other incidental expenses, shall have been covered, said
properties shall be returned to our brother Epifanio Gomez
or to his legitimate children, with the direct intervention,
however, of both parties, namely, Don Marcelino Gomez and
Doña Telesfora Gomez, or one of them.
c. (j) In order that the property of Epifanio Gomez may be
returned, it is made essential that he shall manifest good
behavior in the opinion of Don Marcelino Gomez and Doña
Telesfora Gomez jointly.
9. Telesfora conveyed her interest and share to Marcelino to free
herself from the responsibility she assumed to Banas. Banas
consented to such on 10 September 1909.
10. Since Marcelino is now the lone “debtor” , Banas required him to
execute a contract of sale with pacto de retro to secure the debt.
This was executed also on 10 Sept 1909.
11. 1 April 1918 – Marcelino finally paid off his debt with Banas
Issue:
WON Marcelino acted as a mere trustee despite the improvements made to
the property of Epifanio?
Held/Ratio
Yes.
1. The Court said that the trial court made no error in holding that
Marcelino must surrender the property in litigation (and that he
being dead, the same obligation devolves on his heirs). The so-called
partnership between Marcelino and Telesfora created a TRUST for
the express purpose of securing the property of Epifanio; and that
since the purpose had been accomplished, the property should be
returned to Epifanio’s legitimate children.
2. That under Art 1257 of the Civil Code, the successors of Epifanio are
entitled to demand fulfilment of the trust. (NCC Art. 1308. The
contract must bind both contracting parties; its validity or
compliance cannot be left to the will of one of them. (1256a))
7|Page

3. Marcelino claimed that the money used by him to redeem the

property was his own. However, the Court reasoned that since he
was able to obtain enough from income from the property he was
already able to reimburse himself for all outlays.
4. Marcelino claimed that the trust agreement was kept secret from
Epifanio such that the stipulation could not have accepted by him
before revocation of the same. However, the Court pointed out that
Banas testified that Epifanio was present when the contract was
made
5. Revocation due to the “behavior” of Epifanio should have been when
he was still alive.
6. Prescription on favor of Marcelino is not effective. Because
Marcelino was not really holding adversely under a claim of title
exclusive of any other right and adverse to all other claimants. He
was a trustee in possession under a continuing and subsisting trust.

Dissenting:
John J

The legal effect of the majority The legal effect of the majority opinion is to
penalize the defendant for his thrift and prudent business methods, and to
take the property away from him without any compensation for his twenty
years of long and faithful service upon the theory that he acquired the title in
trust, and at all times held it in trust for the use and benefit of his deceased
brother and his heirs. There is no evidence that the defendant acted as
trustee or that he ever recognized a trust, or that during the whole period of
twenty years he ever rendered any accounting or that any one ever
requested him to make an accounting. The evidence is conclusive that at all
times he acted, dealt with and treated the property as his own, upon which
he spent his own time, his own money, and improved the property, so as to
give it a commercial value. Because he did that and the property now has
increased in value, it is taken away from him without any compensation for
his services, and he is denied the fruits of twenty years of his labor in giving
it a commercial value.
8|Page

135. PEREZ V ARANETA rendered to him, in his aforementioned capacity as such trustee, in several
judicial proceedings. YES.
CONCEPCION, J.:
Contentions of Antonio Perez:
Trustor/Donor: Not mentioned
 Section 7 of Rule 86 of the Rules of Court: When the executor or
Trustee/Donees: J. Antonio Araneta
administrator is an attorney he shall not charge against the estate
Judicial Guardians: Philippine National Bank and Antonio M. Perez3 any professional fees for legal services rendered by him.

Beneficiaries: Benigno, Angela and Antonio, all surnamed Perez Y Tuason  The services above referred to inured to the benefit, not of the trust
Moral of the Story: It is true that some functions of executors or estate, but of the trustee
administrators bear a close analogy with those of a trustee. The duties of
executors or administrators are, however, fixed and/or limited by law,  The amount is excessive.
whereas those of trustee of an express trust are, usually, governed by the
intention of the trustor or of the parties, if established by contract.  The lower court should have required the introduction of evidence
on the extent of the services rendered by the aforementioned law
Facts of the Case:
firm before making said award.
Two incidents of the trusteeship of the minors Benigno, Angela and Antonio
Perez Y Tuason are consolidated in this case: Held: Section 7 of Rule 86 refers only to "executors or administrators" of the
estate of deceased persons, and does not necessarily apply to trustees. A
Issue #1: WON J. Antonio may be allowed to pay a sum of money (P5,500)
trustee may be indemnified out of trust estate for his expenses in rendering
to the law firm, Araneta & Araneta, of which he is a member, for services 4
and proving his accounts and for costs and counsel fees. Moreover, P5,500
3 fixed by the lower court as compensation for such services not excessive.
Lower Court ruled in favor of J. Antonio in both instances. Antonio M. Perez, the guardian of the
person of minor beneficiaries, appealed the decision of the lower court.
4
 It is true that some functions of executors or administrators bear a
The law firm Araneta & Araneta, through its assistant, Atty. Francisco T. Papa, had rendered close analogy with those of a trustee. The duties of executors or
services, as counsel for the appellee, in connection with the following:
administrators are, however, fixed and/or limited by law,
1. The approval of his accounts for January to March, 1956, which were objected to by whereas those of trustee of an express trust - like that
Antonio Perez. Said objection was, on October 19, 1956, overruled by the lower court, the
action of which was affirmed by this Court in G.R. No. L-11788, on May 16, 1958, on appeal which we have under consideration - are, usually, governed
taken by appellant.law library by the intention of the trustor or of the parties, if
2. The appellee's accounts for April to June, 1957; which were approved by the lower court established by contract (Art. 1441). Besides, the duties of
on July 13, 1957, despite Antonio Perez’s objection thereto. Although Antonio Perez trustees may cover a much wider range than those of executors or
appealed to the Supreme Court, he, subsequently, withdrew the appeal. administrators of the estate of deceased persons.
3. In 1958, Antonio Perez instituted CA-G.R. No. 22810-R of the Court of Appeals for a writ
of certiorari and mandamus against J. Antonio Araneta and the lower court, the latter
having sustained the action of J. Antonio Araneta in withholding certain sums from the
 The application of Section 7 of Rule 86 to all trusteeships
shares of the minors aforementioned in the net income of the trust estate for July to without distinction may dissuade deserving persons from
September, 1957, in view of Antonio Perez’s refusal to reimburse to said estate identical accepting the position of trustee and consequently have a
sums received in the form of allowances for the period from April to June, 1957, in excess
of the shares of said minors in the net income for that period. After appropriate
deterrent effect upon the establishment of trusts, at a time when a
proceedings, the Court of Appeals rendered a decision on June 25, 1958, dismissing said
petition.
9|Page
sizeable part of the burden to undertake important and even
essential activities in advanced and/or developing communities or
states, particularly in the field of education, science and social
welfare, is borne by foundations or other similar organizations based
upon the principles of trust. We believe it, therefore, to be the better
policy to acknowledge the authority of courts of justice to exercise a
sound judgment in determining, in the light of the peculiar
circumstances obtaining in each case, whether or not a trustee shall
be allowed to pay attorney's fees and charge the same against the
trust estate, independently of his compensation as a trustee.
 In the case at bar, considering that the appellee was merely
defending himself in the proceedings that required the services of
counsel; that in each case the stand taken by the appellee was
upheld by the court; that the will creating the trust and designating
the appellee as trustee explicitly grants him the right to collect for
his services such reasonable fees; that, in view of the nature of the
relations between the trustor and the trustee, on the one hand, and
the trustor and appellant on the other, there can be little doubt but
that the trustor would have sanctioned the payment of the attorney's
fees involved in this incident; and that it may have been more costly
for the trust estate to engage the services of a law firm other than
that of Araneta & Araneta, we are not prepared to hold that the
lower court has erred in authorizing the payment of said attorney's
fees by herein appellee.
Issue #2: WON the purchase of 118 shares of common stock of Philippine-
American Drug Co. at P100 each for the benefit of the trusteeship merits
judicial approval. YES.
Contentions of Antonio Perez:
 Investment is unwise in that the operation of said company has not
proved profitable.
 Shares of stock of the San Miguel Brewery pay higher returns than
shares of Philippine-American Drug Co.
 Investment is unlawful in that it is actually an act of self-dealing
between the trustee and the beneficiaries of the trust, because J.
Antonio is, also, a stockholder of said company.
Held: Investment neither unwise nor unlawful.
 The interest of appellees and his children5 in said company is
not such as to warrant the charge that the purchase of 118
common stocks for the trust estate amounts to self-dealing
by the appellee with himself. What is more, said purchase by the
trustee may be considered as an indication that he had displayed in
the management of the trust estate the same interest he had in the
protection of his own property.
 Enterprise is financially stable and sound based on the statement of
accounts of the company for the years 1954 – 1957..
 Philippine-American Drug Co. had paid cash dividends in 1954, 1955
and 1957 and declared stock dividends in 1954.6
 On the issue that purchase of shares of San Miguel Brewery would
have been a better investment: Whether an investment is good
or not does not depend upon the general, abstract
possibility of better investments. Again, one factor that should
be taken into account is the degree of influence that the investor
may have upon the management of the enterprise concerned, which
appellee admittedly has in the Philippine-American Drug Co., but
which it is not claimed he wields in the San Miguel Brewery Co.
5
J. Antonio holds, in his individual capacity, 199 out of 30,000 common shares of stock of the
Philippine-American Drug Co., whereas his children own 270 out of 5,000 preferred shares of stock of
the same enterprise.
6
The book value of each of said 118 common shares of stock, purchased by the trustee at P100 each,
is P202.80. In 1954 the Philippine-American Drug Co. had paid a cash dividend of 6%, side from
declaring a 33-1/3% stock dividend for its common shares; and that 6-½ % and 4% cash dividends
were paid in 1955 and 1957, respectively.
10 | P a g e

136. Mindanao Development Authority vs. Court of Appeals (1982)  March 7, 1941, Original Certificate of Title No. 26 was issued in the means
of Victoriana Ang Bansing, Orfelina Ang Bansing and Francisco Ang
Bansing as claimants of the land, pursuant to Decree No. 745358 issued
CONCEPCION JR., J.: on July 29, 1940. On March 31, 1941, OCT No. 26 was cancelled pursuant
to a Deed of Adjudication and TCTNo. 1783 was issued in the name of
Francisco Ang Bansing.
FACTS:

 It is not disputed that Francisco Ang Bansing was the owner of a big tract
 February 25, 1965, the President of the Philippines issued Proclamation
of land with an area of about 300,000 sq.m., situated in Barrio Panacan
No. 459, transferring ownership of certain parcels of land situated in Sasa
Davao City.
Davao City, to the Mindanao Development Authority, now the Southern
Philippines Development Administration, subject to private rights, if any.
 February 25, 1939, Ang Bansing sold a portion thereof, with an area of
about 5 hectares to Juan Cruz Yap Chuy The contract provided, among
 Lot 1846-C, the disputed parcel of land, was among the parcels of land
others, the following:
transferred to the Mindanao Development Authority in said proclamation.
That I hereby agree to work for the titling of the entire area
 March 31, 1969, Atty. Hector L. Bisnar counsel for the Mindanao
of my land under my own expenses and the expenses for
Development Authority, wrote Ang Bansing requesting the latter to
the titling of the portion sold to me shall be under the
surrender the Owner's duplicate copy of TCT No. 2601 so that Lot 1846-
expenses of the said Juan Cruz Yap Chuy.
C could be formally transferred to his client but Ang Bansing refused.
 After the sale, the land of Ang Bansing was surveyed and designated as
 Consequently, on April 11, 1969, the MDA filed a complaint against
Lot 664-B, Psd-1638. Lot 664-B was further subdivided into five (5) lots
Francisco Ang Bansing before the CFI of Davao City, for the reconveyance
of the title over Lot 1846-C, alleging, among others, the following:
 The portion sold to Juan Cruz Yap Chuy shortened to Juan Cruz, was
designated as Lot 664B-3, with an area of 61.107 square meters, more or
ISSUE:
less.

1. WON Francisco Ang Bansing as vendor and the one who worked
 June 15-17 and December 15, 1939, a cadastral survey was made and
to secure the title of his entire tract of land which included the
Lot 664-B-3 was designated as Lot 1846-C of the Davao Cadastre.
portion sold by him. to Juan Cruz Yap Chuy acted in the capacity
of and/or served as trustee for any and all parties who
 December 23, 1939, Juan Cruz sold Lot 1846-C to the Commonwealth of become successor-in-interest to Juan Cruz Yap Chuy
the Philippines for the amount of P6,347.50. On that same day, Juan
Cruz, as vendor, and C.B. Cam and Miguel N. Lansona as sureties,
2. WON Ang Bansing was bound and obligated to give, deliver and
executed a surety bond in favor of the vendee to guarantee the vendor's
reconvey to Juan Cruz Yap Chuy and/or his successor-in-interest the
absolute title over the land sold.
title pertaining to the portion of land sold and conveyed by him to
Juan Cruz Yap Chuy by virtue of the deed of sale and his affidavit.
 Cadastral survey plan was approved by the Director of Lands on July 10,
1940
HELD:
11 | P a g e
No express trust had been created between Ang Banging and Juan Cruz over
Lot 1846-C of the Davao Cadastre.
"Trusts are either express or implied. Express trusts are created by the
intention of the trustor or of the parties. Implied trusts come into being by
operation of law."
It is fundamental in the law of trusts that certain requirements must exist
before an express trust will be recognized. Basically, these elements include
1. Competent trustor and trustee,
2. Ascertainable trust res, and sufficiently certain beneficiaries. Stilted
formalities are unnecessary, but nevertheless each of the above
elements is required to be established, and, if any one of them is
missing, it is fatal to the trusts.
3. Present and complete disposition of the trust property,
notwithstanding that the enjoyment in the beneficiary will take place
in the future.
4. The purpose be an active one to prevent trust from being executed
into a legal estate or interest, and one that is not in contravention of
some prohibition of statute or rule of public policy.
5. Some power of administration other than a mere duty to perform a
contract although the contract is for a third-party beneficiary.
6. Declaration of terms which 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.
In this case, the herein petitioner relies mainly upon the following stipulation
in the deed of sale executed by Ang Bansing in favor of Juan Cruz to prove
that an express trust had been established with Ang Bansing as the settlor
and trustee and Juan Cruz as the cestui que trust or beneficiary:
That I hereby agree to work for the titling of the entire area
of my land under my own expenses and the expenses for
the titling of the portion sold to me shall be under the
expenses of said Juan Cruz Yap Chuy.
The above-quoted stipulation, however, is nothing but a condition that Ang
Bansing shall pay the expenses for the registration of his land and for Juan
Cruz to shoulder the expenses for the registration of the land sold to him.
The stipulation does not categorically create an obligation on the part of Ang
Bansing to hold the property in trust for Juan Cruz. Hence, there is no
express trust.
It is essential to the creation of an express trust that the settlor presently
and unequivocally make a disposition of property and make himself the
trustee of the property for the benefit of another.
In case of a declaration of trust, the declaration must be
clear and unequivocal that the owner holds property in trust
for the purposes named.
While Ang Bansing had agreed in the deed of sale that he will work for the
titling of "the entire area of my land under my own expenses," it is not clear
therefrom whether said statement refers to the 30-hectare parcel of land or
to that portion left to him after the sale. A failure on the part of the settlor
definitely to describe the subject-matter of the supposed trust or the
beneficiaries or object thereof is strong evidence that he intended no trust.
The intent to create a trust must be definite and particular. It must show a
desire to pass benefits through the medium of a trust, and not through some
related or similar device.
Clear and unequivocal language is necessary to create a trust and mere
precatory language and statements of ambiguous nature, are not sufficient
to establish a trust. As the Court stated in the case of De Leon vs. Packson,
a trust must be proven by clear, satisfactory and convincing evidence; it
cannot rest on vague and uncertain evidence or on loose, equivocal or
indefinite declarations. Considering that the trust intent has not been
expressed with such clarity and definiteness, no express trust can be
deduced from the stipulation aforequoted.
Nor will the affidavit executed by Ang Bansing on April 23, 1941, be
construed as having established an express trust. As counsel for the herein
12 | P a g e

petitioner has stated, "the only purpose of the Affidavit was to clarify that
the area of the land sold by Ang Bansing to Juan Cruz Yap Chuy is not only 5
hectares but 61,107 square meters or a little over six (6) hectares."
That no express trust had been agreed upon by Ang Bansing and Juan Cruz
is evident from the fact that Juan Cruz, the supposed beneficiary of the trust,
never made any attempt to enforce the alleged trust and require the trustee
to transfer the title over Lot 1846-C in his name.
Despite numerous transfers of portions of the original 30-hectare parcel of
land of Ang Bansing to Juan Cruz and the issuance of certificates of title in
the name of Juan Cruz, the latter never sought the transfer of the title to Lot
1846-C in his name. For sure, if the parties had agreed that Ang Bansing
shall hold the property in trust for Juan Cruz until after the former shall have
obtained a certificate of title to the land, the latter would have asked for the
reconveyance of the title to him in view of the surety bond executed by him
in favor of the Commonwealth Government wherein he warrants his title
over the property. The conduct of Juan Cruz is inconsistent with a trust and
may well have probative effect against a trust.
But, even granting, arguendo, that an express trust had been established, as
claimed by the herein petitioner, it would appear that the trustee had
repudiated the trust and the petitioner herein, the alleged beneficiary to the
trust, did not take any action therein until after the lapse of 23 years.
Needless to say, only an implied trust may have been impressed upon the
title of Ang Banging over Lot 1846-C of the Davao Cadastre since the land in
question was registered in his name although the land belonged to another.
In implied trusts, there is neither promise nor fiduciary relations, the so-
called trustee does not recognize any trust and has no intent to hold the
property for the beneficiary." It does not arise by agreement or intention,
but by operation of law. Thus, if property is acquired through mistake or
fraud, the person obtaining it is, by force of law, considered a trustee of an
implied trust for the benefit of the person from whom the property comes.
If a person obtains legal title to property by fraud or concealment, courts of
equity will impress upon the title a so-called constructive trust in favor of the
defrauded party.
There is also a constructive trust if a person sells a parcel of land and
thereafter obtains title to it through fraudulent misrepresentation.
Such a constructive trust is not a trust in the technical sense and is
prescriptible; it prescribes in 10 years. Here, the 10-year prescriptive period
began on March 31, 1941, upon the issuance of Original Certificate of Title
No. 26 in the names of Victoriana Ang Bansing Orfelina Ang Bansing and
Francisco Ang Banging. From that date up to April 11, 1969, when the
complaint for reconveyance was filed, more than 28 years had passed.
Clearly, the action for reconveyance had prescribed.
Separate Opinion
AQUINO, J., dissenting:
The defense of prescription cannot be set up in an action to recover property
held in trust for the benefit of another.
Property held in trust can be recovered by the beneficiary regardless of the
lapse of time. Prescription in the case of express trusts can be invoked only
from the time the trust is repudiated
And a trustee who takes a Torrens title in his name for the land held in trust
cannot repudiate the trust by relying on the registration. That is one of the
limitations upon the finality of a decree of title
The rule, that an action for reconveyance prescribes in ten years, applies to
an implied trust, not to an express trust
So, as a general rule a trust estate (in an express trust) is exempt from the
operation of the statute of limitations. The exception is when the trustee
repudiates the trust in which case the trustee may acquire the trust estate by
prescription. The repudiation must be known to the cestui que trust and
must be direct, clear, open and equivocal.
One who acquires a Torrens title in his own name to property which he is
administering for himself and his brothers and sisters as heirs in common by
descent from a common ancestor may be compelled to surrender to each of
his co-heirs his appropriate share". A partition proceeding is an appropriate
remedy to enforce this right. An equitable action for reconveyance is also a
proper remedy
13 | P a g e

In any event, the real plaintiff in this case is the Republic of the Philippines
and prescription does not run against the State.

The maxim inullum tempus occurrit regi or nullum tempus occurrit

reipublicae (lapse of time does not bar the right of the crown or lapse of time
does not bar the commonwealth). The rule is now embodied in article
1108(4) of the Civil Code.

It is a maxim of great antiquity in English law. The best reason for its
existence is the great public policy of preserving public rights and property
from damage and loss through the negligence of public officers. Thus, the
right of reversion or reconveyance to the State of lands fraudulently
registered or not susceptible of private appropriation or acquisition does not
prescribe
14 | P a g e

137. Roa, Jr. vs. Court of Appeals, 123 SCRA 3
FACTS:plaintiff and his brothers and sisters Trinidad Reyes Roa, Esperanza
Roa de Ongpin, Concepcion Roa and Zosimo Roa, husband of the latter,
were the owners pro-indiviso of a parcel of land located in Tagoloan, Misamis
Oriental. They filed for the issuance of title but opposition was made by one
Pablo Valdehuesa for a portion of the land. Pablo claimed that the portion
was his. In order to ensure the issuance of the tittle the siblings entered into
an agreement with Pablo (compromise agreement) wherein they would
replace the lot with another parcel of land of equivalent size or if the
replacement is not to his liking they would pay him 400 pesos. As a result of
the agreement Pablo withdrew his opposition. Pablo died so ownership
passed to his heirs, however no lot was given as replacement nor were they
paid. Also the property described I the original agreement was partitioned
already to the plaintiff in this case.
ISSUE: WON the agreement created a trust
HELD: YES
or retention of property by one person unconscionable against another,
raises a constructive trust.”
The court said that what was created was not an express trust
because in that type of trust the intent nto create one needs to be clear even
in the absence of particular words. Furthermore it could not be an implied
trust because the law states that “Art. 1456. If property is acquired through
mistake or fraud, the person obtaining it is, by force of law, considered a
trustee of an implied trust for the benefit of the person from whom the
property comes.” And in this case there was no use of force or fraud in play.
So basically the court concluded that although this type of scenario
may not fall under the types of implied trusts enumerated in the CC, the
enumeration given does not preclude the existence of other types of trusts
that are in line with the general law on trusts. In this case the court resolved
the case on the general principles of law on constructive trust which basically
rest on equitable considerations in order to satisfy the demands of justice,
morality, conscience and fair dealing and thus protect the innocent against
fraud.

Court cited pertinent AmJur the most releveant being

“A constructive trust, otherwise known as a trust ex maleficio, a trust ex

delicto, a trust de son tort, an involuntary trust, or an implied trust, is a trust
by operation of law which arises contrary to intention and in invitum, against
one who, by fraud, actual or constructive, by duress or abuse of confidence,
by commission of wrong, or by any form of unconscionable conduct, artifice,
concealment, or questionable means, or who in any way against equity and
good conscience, either has obtained or holds the legal right to property
which he ought not, in equity and good conscience, hold and enjoy. It is
raised by equity to satisfy the demands of justice. However, a constructive
trust does not arise on every moral wrong in acquiring or holding property or
on every abuse of confidence in business or other affairs; ordinarily such a
trust arises and will be declared only on wrongful acquisitions or retentions
of property of which equity, in accordance with its fundamental principles
and the traditional exercise of its jurisdiction or in accordance with statutory
provision, takes cognizance. It has been broadly ruled that a breach of
confidence, although in business or social relations, rendering an acquisition
15 | P a g e
138. Perez vs. Araneta, 4 SCRA 430 (1962)
CONCEPCION, J.:
Trustor: Angela S. Tuason
Trustee: J. Antonio Araneta
Beneficiaries: Benigno, Angela and Antonio, all surnamed Perez y Tuason,
the grandchildren of the decedent
Sometime in 1948, Angela S. Tuason died leaving a will, paragraph 4 of
which reads:
Instituyo como mis unicos herederos a mis mencionados tres hijos, a
rason de una novena parte del caudal hereditario que dejare para
cada uno de ellos. Lego a mi hijo Antonio otra porcion equivalente a
dos novenas partes del caudal hereditario. Lego asimismo a mis
nietos que fueren de mi hija Nieves, otra porcion equivalente a dos
novenas partes del caudal hereditario. Y finalmente lego a mis nietos
que fueren hijos de mi hija Angela otra porcion equivalente de dos
novenas partes del caudal hereditario. Dichos tres legados, sin
embargo, estan sujetos a la manda que se menciona en el parrafo
siguiente. Los dos legados, a favor de mis mencionados nietos seran
administrados por mi albacea, J. Antonio Araneta (y en defecto de
este, su hermano, Salvador Araneta), con amplios poderes de
vender los mismos, y con suproducto adquirir otros bienes, y con
derecho a cobrar por su administracion, honorarios razonables. Los
poderos de dicho administrador seran los de un trustee con los
poderes mas amplios permitidos por la ley. Deberasin embargo,
rendir trimestralmente, cuenta de su administracion a los legatarious
que fueren mayores de edad. Y asimismo, debera hacerles entrega
de la participacion que a cada legatario corresponda en las rentas
netas de la administracion. La administracion sobre un grupo cesara
cuando todos misnietos de dicho grupo llegare a su mayoria de
edad, y una mayoria de los mismos acordaren la terminacion de la
administracion. Por nietos, debe entederse no solamente a los nietos
varones sino tambien a los nietos mujeres.
In conformity with this provision of said will, the present trusteeship
proceedings was instituted and certain properties of the estate of the
deceased, valued P900,00 were turned over in 1950 to J. Antonio Araneta,
as trustee for the benefit of Benigno, Angela and Antonio, all surnamed
Perez y Tuason, the grandchildren of the decedent referred to in her
aforementioned will.
Portions of said properties constituting the trust were sold in 1956, 1957 and
1958 at prices exceedingly by P13,418.42, P4,023.52 and P81,386.94,
respectively — aggregating P98,828.88 — the original appraised value
thereof.
On September 28, 1959, the judicial guardian and father of said minors filed
a motion in the trusteeship proceedings alleging that said sum of P98,828.88
represents profits or income (based on the statements of profits and losses
attached to the corresponding income tax returns) of the trusteeship to
which said minors are entitled, pursuant to the above quoted provision of the
will, and praying that the trustee be accordingly instructed to deliver said
sum.
TC: Ruled in favor of trustee J. Antonio Araneta. Said sum not income.
SC: Affirmed TC judgment. Aforesaid sum of P98,828.88 is not a profit or
income which should be turned over to the guardian of said minors
according to the provisions of the will.
 To begin with, the issue as to whether or not the minors are entitled
to the delivery of said sum of P98,828.88 is a matter dependent
exclusively upon the conditions upon which the trust had been
established, as provided in the above quoted paragraph of the will of
the decedent, which in turn depends upon the latter's intent, as set
forth in said paragraph. (The fact that it is treated as profit within
the purview of our internal revenue law is not controlling.)
 The provision of the will of the decedent explicitly authorizing the
trustee to sell the property held in trust and to acquire, with the
proceeds of the sale, other property ("con amplios poderos de
vender los mismos, y con su producto adquirir otros bienes,") leaves
no room for doubt about the intent of the testatrix to keep, as part
of the trust, said proceeds of the sale, and not to turn the same over
to the beneficiary as net rentals ("rentas netas").
16 | P a g e

 Pursuant to the general law on trust, "a provision in the instrument

to the effect that the beneficiary shall be entitled to the 'income and
profits of' of the trust estate is not ordinarily sufficient to indicate an
intention that he should be entitled to receive gains arising from the
sale of trust property ..."

 It is well settled that profits realized in the sale of trust

properties are part of the capital held in trust to which the
beneficiaries are not entitled as income.
17 | P a g e

139. Cuaycong vs. Cuaycong, 21 SCRA 1192

the main idea is that if the trust is expressed, meaning, clearly understood
from the wordings, then a written instrument must be used as proof of the
trust.. apparently, the plaintiffs in this case, didn't present any written
instrument. instead, they claimed that the trust was implied hence there was
no need to present a written document as parole evidence suffices. 
18 | P a g e

140. Sinaon vs. Soroñgon, 136 SCRA 407 (1985)
Aquino, J
Facts
1. Canuta Soblingo – on of the 5 children of Domingo Soblingo (the
alleged owner of the lot in litigation when it was not yet registered)
2. 4 March 1916 – Judge Carlos Imperial adjudicated to Canuta
Soblingo Lot No 4781 of the Sta Barbara, Iloilo cadastre with an area
of 5.5 hectares. OCT No 6178-A was issued in 1917 to Canuta
3. 1923- Canuta sold the lot to spouses Patricio Sinaon and Julia
Sualibio (granddaughter of Canuta)
a. Canutas were registered owners for more than 40years and
had possession of the lot during that period
The Court said that title and possession cannot be defeated by oral
evidence that can be easily fabricated and contradicted.
2. The Court said that there was no express trust because “Express
trusts concerning real property cannot be proven by parol evidence
(Art 1443, Civil Code). Citing Suarez vs Tirambulo where it was held
that An implied trust “cannot be established contrary to the recitals
of a Torrens Title, upon vague and inconclusive proof. No
3. The supposed trust in this case is a constructive trust arising by
operation of law. (Art 1465, Civil Code). It is not a trust in the
technical sense.
Note: Even assuming that there was an implied trust, prescription would
have worked in favor of the Sinaons. In Gerona vs de Guzman, the Court
said that “an action for reconveyance of realty, based upon a
constructive or implied trust resulting from fraud, may be barred by
prescription. The prescriptive period is reckoned from the issuance of the
title which operates as a constructive notice”.

4. 1968 – Sorongon (et al) amended their complaint filed in 1964 that
Canuta and the Sinaons were TRUSTEES of the lot in litigation. As
such the heirs of Domingo’s four heirs are entitled to 4/5 share.

5. Trial Court – sustained the “Trustee” theory of Sorongon, and

ordered the Sinaons to convey 4/5 of Lot No 4781 to Sorongon et al.

Issue:

WON Canuta and the Sinaons were mere trustees via an implied or express
trust of the lot in litigation?

Held/Ratio:

No.

1. Sinaons were registered owners for more than 40 years had become
indefeasible and possession could not be disturbed. Any pretension
as to the existence of an implied trust should not be countenanced.
Sorongon used unreliable oral evidence to prove the trust to which
19 | P a g e
141. EMILIA O'LACO and HUCO LUNA v. VALENTIN CO CHO CHIT, O
LAY KIA and CA
G.R. No. 58010 | March 31, 1993 | BELLOSILLO
FACTS:
1. Emilia O'Laco and respondent O Lay Kia are half-sisters
2. May 31, 1943 – Philippine Sugar Estate Development Company, Ltd.,
sold a parcel of land7 with the Deed of Absolute Sale naming O'Laco as
vendee; thereafter, Transfer Certificate of Title No. 66456 was issued in
her name.
3. May 17, 1960 – spouses Valentin Co Cho Chit and O Lay Kia (spouses
Valentin) learned from the newspapers that O'Laco sold the same
property to the Roman Catholic Archbishop of Manila for P230,000.00,
with assumption of the real estate mortgage constituted thereon.
4. June 22, 1960 –spouses Valentin sued spouses Emilia O'Laco and Hugo
Luna (spouses Hugo) to recover the purchase price of the land before
CFI of Rizal.
a. Spouses Valentin: Emilia O'Laco knew that they were the real
vendees of the Oroquieta property sold in 1943 by Philippine
Sugar Estate Development Company, Ltd., and that the legal
title thereto was merely placed in her name.
i. Emilia O'Laco breached the trust when she sold the land
to the Roman Catholic Archbishop of Manila.
ii. Asked the trial court to garnish all the amounts still due
and payable to spouses Hugo arising from the sale,
which was granted on 30 June 1960.
b. Spouses Hugo:deny the existence of any form of trust relation.
i. O'Laco actually bought the property with her own money
ii. she left the Deed of Absolute Sale and the
corresponding title with spouses Valentin merely for
safekeeping;
iii. when O’Laco asked for the return of the documents
evidencing her ownership, spouses Valentin told her that
these were misplaced or lost; hence, she filed a petition
for issuance of a new title. On August 18, 1944 the CFI
Manila granted her petition.
7
Lot No. 5, Block No. 10, Plan Psu-10038, situated at Oroquieta St., Sta. Cruz, Manila
5. CFI Rizal, September 20, 1976 – finding no trust relation between the
parties, dismissed the complaint together with the counterclaim.
6. Petitioners and respondents appealed.
7. CA, April 9, 1981 (ipapanganak na si Azy nito, hehehe) – reversed
TC decision. MR denied. Appealed to SC.
CONTENTION OF SPOUSES HUGO (PETITIONERS):
1. The complaint fails to allege that earnest efforts toward a compromise
were exerted considering that the suit is between members of the same
family, and no trust relation exists between them.
2. Spouses Valentin are already barred by laches
ISSUE:
1. WON there was effort on the side of spouses Hugo to settle the
controversy - YES
2. WON there was an implied trust - YES
3. WON laches came in - NO
HELD: YES!!!
RATIO:
1. Procedural -- Contention no. 1
a. The complaint must show that there were efforts towards
compromise, pursuant to Art. 222 of the New Civil Code 8, or a
motion to dismiss could have been filed under Sec. 1, par. (j),
Rule 16, of the Rules of Court.
b. An attempt to compromise as well as the inability to succeed is a
condition precedent to the filing of a suit between members of
the same family.
8
Superseded by the Family Code, I didn’t try to look for the exact provision: “No suit shall be filed or
maintained between members of the same family unless it should appear that earnest efforts toward a
compromise have been made, but that the same have failed, subject to the limitations in Article 2035.”
20 | P a g e
c. But plaintiff may be allowed to amend his complaint to correct
the defect if the amendment does not actually confer jurisdiction
on the court in which the action is filed, i.e., if the cause of
action was originally within that court's jurisdiction.
d. Spouses Valentin did not formally amend their complaint. They
were allowed to introduce evidence purporting to show that
earnest efforts toward a compromise had been made. 9 Hence,
the complaint was deemed accordingly amended to conform to
the evidence.
e. If the defendant permits evidence to be introduced without
objection and which supplies the necessary allegations of a
defective complaint, then the evidence is deemed to have the
effect of curing the defects of the complaint.
2. (ISSUE NO. 2) Substantial – existence of trust relations
a. Trust relations between parties may either be express or implied.
i. Express trusts are those which are created by the direct
and positive acts of the parties, by some writing or
deed, or will, or by words evincing an intention to create
a trust.
ii. 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.
b. Implied trusts may either be resulting or constructive trusts,
both coming into being by operation of law.10
i. Resulting trusts are based on the equitable doctrine that
valuable consideration and not legal title determines the
equitable title or interest and are presumed always to
have been contemplated by the parties.
1. They arise from the nature or circumstances of
the consideration involved in a transaction
whereby one person thereby becomes invested
9
That is, O Lay Kia pressed O'Laco for the transfer of the title of the Oroquieta property in
the name of spouses Valentin, just before O’Laco’s marriage to Hugo. But, instead of
transferring the title as requested, Emilia sold the property to the Roman Catholic
Archbishop of Manila. This testimony was not objected to by spouses Hugo.
10
Specific examples of resulting trusts may be found in the Civil Code, particularly Arts. 1448, 1449,
1451,1452 and 1453, 23 while constructive trusts are illustrated in Arts. 1450, 1454, 1455 and 1456.
with legal title but is obligated in equity to hold
his legal title for the benefit of another.
ii. Constructive trusts are created by the construction of
equity in order to satisfy the demands of justice and
prevent unjust enrichment.
1. They arise contrary to intention against one
who, by fraud, duress or abuse of confidence,
obtains or holds the legal right to property which
he ought not, in equity and good conscience, to
hold.
c. Express trusts concerning immovables or any interest therein
cannot be proved by parol evidence. Implied trusts may be
established by oral evidence.
i. In order to establish an implied trust in real property by
parol evidence, the proof should be as fully convincing
as if the acts giving rise to the trust obligation were
proven by an authentic document. It cannot be
established upon vague and inconclusive proof.
3. (APPLICATION OF NO. 2) There is a resulting trust was indeed intended
by the parties under Art. 1448 of the NCC:
a. As stipulated by the parties, the document of sale, the owner's
duplicate copy of the certificate of title, insurance policies,
receipt of initial premium of insurance coverage and real estate
tax receipts ware all in the possession of respondent spouses
which they offered in evidence. As per O Lay Kia, the reason
why these documents of ownership remained with her is that the
land in question belonged to her.
i. The only possible reason for these documents to be
possessed by the spouses Valentin for 17 years after the
purchase of the property in 1943 is O’Laco only held the
property for the former.
b. Before buying the property, spouses Valentin purchased another
property situated in Kusang-Loob, Sta. Cruz, Manila, where the
certificate of title was placed in the name of Ambrosio O'Laco,
older brother of Emilia, under similar or identical circumstances.
i. Spouses Valentin: The reason why they did not place
these properties in their name was that being Chinese
nationals at the time of the purchase they did not want
to execute the required affidavit to the effect that they
were allies of the Japanese.
21 | P a g e

1. Spouses Valentin even filed an action for
reconveyance against Ambrosio when he
claimed the Kusang-Loob property as his own,
which they won.
2. Ambrosio O'Laco filed a case against the Anti-
Dummy Board, because of this, there was an
implied admission by Ambrosio that his sister
Emilia, like him, was merely used as a dummy.
c. The circumstances by which O'Laco obtained a new title by
reason of the alleged loss of the old title then in the possession
of spouses Valentin cast serious doubt on the veracity of her
ownership.
i. The petitions respectively filed by Emilia and Ambrosio
for both properties were both granted on the same day
by the CFI of Manila.
1. It really looks that there was conspiracy
between the siblings to defraud and deprive
spouses Valentin of their properties.
d. Until the sale of the contested property to the Roman Catholic
Archbishop of Manila, Emilia O'Laco actually recognized the trust.
i. Specifically, when spouses Valentin learned that Emilia
was getting married to Hugo, O Lay Kia asked Emilia to
have the title to the property already transferred to her
and her husband Valentin, and Emilia assured her that
"would be arranged (maaayos na)" after her wedding.
e. The TC determined that spouses Valentin had some money with
which they could buy the property."
i. Valentin was the Chief Mechanic of the Paniqui Sugar
Mills. Emilia failed to convince the Court that she was
financially capable of purchasing the property.
1. In fact, she opened a bank account only in 1946
and likewise began filing income tax returns that
same year, 39 while the property in question
was bought in 1943.
i. the trustee has performed unequivocal acts of
repudiation amounting to an ouster of the cestui qui
trust;
ii. such positive acts of repudiation have been made known
to the cestui qui trust; and,
iii. the evidence thereon is clear and convincing.
b. The Court categorically ruled that an action for reconveyance
based on an implied or constructive trust must perforce
prescribe in ten (10) years, and not otherwise, thereby
modifying previous decisions holding that the prescriptive period
was four (4) years.
5. (APPLICATION OF NO. 5) Neither the registration of the property in the
name of Emilia O'Laco nor the issuance of a new Torrens title in 1944 in
her name in lieu of the alleged loss of the original may be made the
basis for the commencement of the prescriptive period.
a. As late as 1959, or just before she got married, Emilia continued
to recognize the ownership of spouses Valentin over the
Oroquieta property.
b. Immediately after Emilia sold the Oroquieta property spouses
Valentin instituted the present suit for breach of trust.
Correspondingly, laches cannot lie against them.

4. (ISSUE NO. 3) In resulting trust, the rule of imprescriptibility may apply

for as long as the trustee has not repudiated the trust. Once the
resulting trust is repudiated, however, it is converted into a constructive
trust and is subject to prescription.
a. A resulting trust is repudiated if the following requisites concur:
22 | P a g e

142. Special Services Corporation vs. Centro La Paz, 121 SCRA 748 2. November 29, 1963 and
3. August 8, 1966
Trustor: Centro La Paz
Trustee: Alejandro Estudillo, et. al*  July 21, 1973, CENTRO submitted a third party claim to the Sheriff of
Manila likewise averring exclusive ownership of the properties in question.
FACTS:
 The Union Espiritista Cristiana de Filipinas, Inc., is a semi-religious and ISSUE/s:
charitable organization.
I. WON Estudillo is merely the trustee of Centro La Paz?
 October 10, 1972, judgment was rendered in favor of petitioner Special
Services Corporation by the CFI, Branch IV, Manila, against one Alejandro
II. WON the “Acknowledgements” of registered owners not being
Estudillo in the amount of P94,727.52, more or less, in an action for
annotated on TCT No. 51837 is conclusive of all matters, valid and
Replevin with Sum of Money. A writ of execution was thereafter issued
binding?
but which has remained unsatisfied.

 December 15, 1972, the Sheriff of Manila caused the annotation of a
notice of levy on TCT No. 51837, in respect of the rights, interest and
participation of Alejandro Estudillo, one of the registered owners indicated
in said title.
 Title covers 2 parcels of land situated in Sampaloc, Manila, consisting 348
square meters and registered in the names of:*
1. Alejandro Estudillo, married to Primitiva Victoria;
2. Joaquina de la Rosa, widow;
3. Pedro Paguio, married to Amor Jose and
4. Maximo Victoria, married to Juliana Roberto, all Chapter
members.
 July 23, 1973: schedule of the public auction sale of Estudillo's rights and
interests in said properties
 June 27, 1973, Alejandro Estudillo filed a "Motion to Dissolve and/or
Cancel the Notice of Levy" alleging that he and the other registered
owners indicated on the title merely held in trust the properties and
improvements thereon in favor of Centro La Paz (Samahang Espiritista Sa
Lunduyang La Paz) a Chapter of Union Espiritista Cristiana de Filipinas,
Inc. as evidenced by "Acknowledgments" executed by them on October
20, 1961 and October 2, 1971.
 Estudillo further alleged that CENTRO's ownership was also evidenced by
letters sent to the City Assessor by him and Crispulo Romero, President of
CENTRO, long before the filing of the replevin case on December 28,
1971 praying for the revocation of tax assessments on said properties as
the same, were used for religious purposes. Date of letters are as follows
III. Whether or not Centro La Paz which is merely a Chapter of Union
Espiritista de Filipinas, Inc. has a juridical personality of its own in
accordance with the provisions of our laws;
HELD:
I.
1. CENTRO reiterated ownership of the properties in question and
emphasized that the registered owners thereof had publicly
acknowledged their possession of said properties in the concept of
trustees.
2. Preponderance of evidence CENTRO had established that it was
"really and true and lawful owner of the property in dispute, and that
the persons registered therein as its owners are merely trustees of
the plaintiff, the series of documents executed even as early as
1957, long before the issue of whether Alejandro Estudillo really has
an interest and/or participation in the property in dispute, attest to
plaintiff's ownership of the property in question.
 The Deed of Donation dated March 13, 1957

1. February 15, 1963

23 | P a g e
 Deed of Absolute Sale executed by Joaquina dela II.
Rosa in favor of Alejandro Estudillo, Pedro Paguio
and Maximo Victoria of the same property covered
by the Deed of Donation;
 Deed of Sale of two parcels in dispute described
under T.C.T. No. 51837 executed by Sta. Mesa
Realty, Inc. in favor of Alejandro Estudillo, Joaquina
dela Rosa, Pedro Q. Paguio and Maximo Victoria
 Deed of Acknowledgment dated October 30, 1961
also executed by Estudillo de la Rosa and Victoria
acknowledging that the property described under
the aforementioned T.C.T. No. 51837, together with
the improvements thereon are being possessed by
them only as trustees;
 Deed of Acknowledgment executed on October 22,
1971, jointly by Amor Jose, widow of Paguio and the
latter's daughters, Sumilang Paguio and Filipina
Paguio (co-registered owner of Estudillo) likewise
declaring that their possession of the said property
is merely that of trustees and not as owners;
III.
 Petitions for revocation of tax assessments Nos.
3187 and 3188
 Petition to exempt said parcels from taxation, being
owned by a religious organization and;
 Follow-up letters addressed to the City Assessor of
Manila, dated February 15, 1963; December 29,1963
and May 29, 1962 respectively
 Deed of Sale executed by Estudillo, heirs of dela
Rosa and Paguio of the two parcels in favor of
Centro La Paz, indubitably point to one and
inescapable conclusion that the plaintiff is really the
true and lawful owner of the property in dispute and
that persons registered therein as its owners, are
merely trustees of the plaintiff.
As found by both the Trial Court and Appellate Court, the evidence
sufficiently establishes that the registered owners of the parcels of
land covered by TCT 51837, all of whom are members of CENTRO,
hold the properties in trust for CENTRO by virtue of the
indubitable documents executed even before the institution of suit.
In the same manner that the real property, registered solely in the
name of a husband, can be proven to be conjugal property with his
wife, the fact of registration in the name of Alejandro Estudillo and
others does not bar evidence to show that the registered owners
hold the properties in trust for CENTRO.
Admittedly, the trust was not registered in accordance with section
65 of Act 496 (the former Land Registration Law). The absence of
said registration, however, cannot be taken against CENTRO
inasmuch as, if the public auction sale had actually been held, with
Special Service Corp. (SSC) as the successful buyer, SSC could not
have been considered a purchaser for value and in good faith at said
sale since it had knowledge of CENTRO's claim, particularly when the
latter had filed a third-party-claim with the Sheriff of Manila before
the scheduled auction sale, which knowledge was equivalent to
registration of the several "Acknowledgments" in the Registry of
Deeds.
Evident from the record that although it was CENTRO that was
actively prosecuting the case, in substance, it was representing the
mother organization, the Union Espiritista Cristiana de Filipinas, Inc.,
which is the real party in interest and is itself named in the
Complaint. It is an organization that is duly registered with the
Securities and Exchange Commission, and thus possessed of a
juridical personality to sue and be sued.
24 | P a g e

143. Chiao Liong Tan vs. Court of Appeals, 228 SCRA 75 between brothers, does not lose that character simply because of what
appears in a legal document.
FACTS: Chiao Long Tan claims to be the owner of a 1976 Isuzu Elf van.   As
owner thereof,  petitioner  says  he  has  been  in  possession,  enjoyment,  On the side issue of replevin, the court said that respondent should
and utilization of the van until his older brother, Tan Ban Yong, unlawfully have filed for recovery of possession on the basis of ownership, but due to
took it away from him. Chiao claims that the van is registered under his the policy to settle in one action all the conflicting claims of the parties to the
name, that he bought the vehicle from isuzu balintawak, that  he  sent  his  possession of the property in controversy, the question of ownership may be
brother  to  pay  for  the  van  and  the  receipt  was issued in his name resolved in the same proceeding.
because it was his money that was used to pay for the vehicle, that he
allowed his brother to use the vehicle because the latter was working for the
company, and  that  his  brother  later  refused  to  return  the  vehicle  and
appropriated the same for himself.  

According to respondent CLT Industries is the family business and it

was under the name of petitioner  since  at  the  that  time,  he  was 
leaving  for  the  US  and petitioner is the only Filipino left in the Philippines.
When the family business needed a vehicle, he asked petitioner to look  for 
a  vehicle  and  gave  him  money  as  downpayment  for  an Isuzu Elf van.
After a month, he paid for the van by getting a loan from a friend. As  much 
as  the  receipt  was  placed  in  the  name  of  petitioner, private 
respondent  allowed  the  registration  under  the  name  of petitioner.
There  was  also  agreement  that  he  would  use  the  vehicle  as  he paid
for the same. All  the  abovementioned  allegations  of  private  respondent 
has  been corroborated  by  witnesses.    The  trial  court  hence  ruled  in 
favor  of  the private respondent and the CA affirmed this decision.

ISSUE: WON there was an Implied trust created when the Van was
registered under petitioners name but was paid for and really owned by
respondent

HELD: YES

The New Civil Code recognizes cases of implied trust other than
those enumerated therein. Thus, although no specific provision could be
cited to apply to the parties herein, it is undeniable that an implied trust was
created when the certificate of registration of the motor vehicle was placed
in the name of the petitioner although the price thereof was not paid by him
but by private respondent. The principle that a trustee who puts a certificate
of registration in his name cannot repudiate the trust by relying on the
registration is one of the well-known limitations upon a title. A trust, which
derives its strength from the confidence one reposes on another especially
25 | P a g e

144. SABAS H. HOMENA and ILUMINADA JUANEZA v. DIMAS CASA

AND MARIA CASTOR and the REGISTER OF DEEDS FOR THE
PROVINCE OF COTABATO ISSUE: WON there was an implied trust among the parties

G.R. No. L-32749 | January 22, 1988 | YAP HELD: NO!!!!

FACTS: RATIO:

1. Homena and Juaneza filed a case against Casa and Castor for unlawful 1. Under the Public Land Act, the homestead owner was prohibited from
dispossession disturbing the former’s peaceful, continuous, open, transferring his rights. Hence, the agreement is clearly illegal and void ab
uninterrupted adverse and public possession of the property in question. initio; it is intended to circumvent and violate the law.
a. Homena and Juaneza sought to annul the original certificate of 2. As parties to a void contract, the Homena and Juaneza have no rights
title in favor of Casa and Castor pursuant to a Homestead Patent which they can enforce and the court cannot lend itself to its
on the ground that said patent was obtained fraudulently by enforcement.
stating that the lot was not claimed and occupied by another 3. Homena and Juaneza cannot invoke the doctrine of implied trust based
person. on an illegal contract. The issue of prescription or laches becomes
b. Homena and Juaneza allege than on June 15, 1967, they irrelevant in a case such as this, where plaintiffs clearly have no cause of
purchased from Casa and Castro 2 hectares of land with the action.
agreement that the deed of sale would be given to the former
after the 5-year prohibitive period provided in the Homestead
Patent Law. However, they never got the title from Casa and
Castro.
2. Casa and Castro’s motion to dismiss:
a. complaint is barred by prescription, since thirteen years had
elapsed from the issuance of the homestead patent before the
action was filed;
b. The deed of sale executed on June 15, 1952 or prior to the
approval of the application and issuance of the homestead
patent was null and void and inoperative to convey the land in
question, which was at that time still public land; and
c. Homena and Juaneza are not the proper party to institute the
action to annul the homestead patent.
3. Homena and Juaneza’s opposition to the motion to dismiss:
a. The validity of the patent as a whole was not assailed, only with
respect to the 2 hectares that Casa and Castro were able to
register.
b. Because of the fraud in registration, it needs 4 years to be
prescribed, action was started before that time elapsed.
c. The defense of prescription cannot be set up in an action
to recover property held in trust by a person for another.
4. TC dismissed the case. MR denied. Appealed to CA, which certified the
case to SC.
26 | P a g e
145. Heirs of Candelaria vs. Romero, 109 Phil. 500. (1960)
GUTIERREZ DAVID, J.:
Trustee: Lucas Candelaria (land was registered under his name)
Beneficiaries: Emilio Candelaria (actually paid for said land)
Emilio Candelaria and his brother Lucas Candelaria bought each a lot in the
Solokan Subdivision on installment basis.
Lucas paid the first two installments corresponding to his lot, but faced with
the inability of meeting the subsequent installments because of sickness
which caused him to be bedridden, he sold his interest to his brother Emilio,
who then reimbursed him the amount he had already paid, and thereafter
continued payment of the remaining installments until the whole purchase
price had been fully satisfied. Said payments done by Emilio were however
made in the name of Lucas, with the understanding that the necessary
documents of transfer will be made later.
In 1918 a transfer certificate of title for said lot was issued by the register of
deeds of Manila in the name of "Lucas Candelaria married to Luisa Romero".
Lucas held the title to said lot merely in trust for Emilio and that this fact was
acknowledged not only by him but also by the defendants (Lucas’ heirs) on
several occasions.
Lucas' possession of the lot was merely tolerated by Emilio and his heirs.
Lucas had been collecting all its rents for his own use as financial aid by
Emilio to him as a brother in view of the fact that he was bedridden without
any means of livelihood and with several children to support, although from
1926, when Emilio was confined at the Culion Leper Colony up to his death
on February 5, 1936, Lucas had been giving part of the rents to Fortunata
Bautista, the second wife of Emilio, in accordance with the Emilio's wishes.
Lucas died in August, 1942, survived by the present defendants, who are his
spouse Luisa Romero and several children; and that said defendants are still
in possession of the lot, having refused to reconvey it to plaintiff despite
repeated demands.
Heirs of Emilio filed complaint for reconveyance of real property with
damages.
TC: Dismissed complaint on the ground that cause of action is unenforceable
under the NCC and that the action has already prescribed.
 In the order granting the motion to dismiss, the lower court held
that an express and not an implied trust was created as may be
gleaned from the facts alleged in the complaint, which is
unenforceable without any writing, and that since Transfer
Certificate of Title No. 9584 covering the land in question had been
issued to Lucas Candelaria way-back in 1918 or 38 years before the
filing of the complaint, the action has already prescribed.
SC: Implied trust, not express trust. As to whether action is barred by
lapse of time, the case is remanded for further proceedings to allow them to
present proof in support of their claim.
 Where property is taken by a person under an agreement to hold it
for, or convey it to another or the grantor, a resulting or implied
trust arises in favor of the person for whose benefit the property was
intended. This rule, which has been incorporated in the new Civil
Code in Art. 1453 thereof, is founded upon equity.
 An implied trust arises where a person purchases land with
his own money and takes a conveyance thereof in the name
of another. In such a case, the property is held on a resulting trust
in favor of the one furnishing the consideration for the transfer,
unless a different intention or understanding appears. The trust
which results under such circumstances does not arise from contract
or agreement of the parties, but from the facts and circumstances,
that is to say, it results because of equity and arises by implication
or operation of law.
 In the present case, the complaint expressly alleges that "although
Lucas Candelaria had no more interest over the lot, the subsequent
payments made by Emilio Candelaria until fully paid were made in
the name of Lucas Candelaria, with the understanding that the
necessary documents of transfer will be made later, the reason that
the transaction being brother to brother." From this allegation, it is
apparent that Emilio Candelaria who furnished the consideration
intended to obtain a beneficial interest in the property in question.
Having supplied the purchase money, it may naturally be presumed
27 | P a g e

that he intended the purchase for his own benefit. Indeed, it is

evident from the above-quoted allegation in the complaint that the
property in question was acquired by Lucas Candelaria under
circumstances which show it was conveyed to him on the faith of his
intention to hold it for, or convey it to the grantor, the plaintiff's
predecessor in interest.
 Constructive or implied trusts may, of course, be barred by
lapse of time. The rule in such trusts is that laches constitutes a
bar to actions to enforce the trust, and repudiation is not required,
unless there is a concealment of the facts giving rise to the trust.
Continuous recognition of a resulting trust, however,
precludes any defense of laches in a suit to declare and
enforce the trust.