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PARTNERSHIP

Josefina Realubit v. Eden and Prosencio Jaso


G.R. No. 178782
September 21, 2011

PEREZ, J.
Facts:
Petitioner entered into a Joint Venture Agreement with one Francis Biondo, a French
national, for the operation of an ice manufacturing business. Petitioner was designated industrial
partner and Biondo was capitalist partner. Subsequently, Biondo executed a Deed of
Assignment, transferring all his rights and interests in the business in favor of respondent Eden
Jaso. The spouses Jaso sent petitioner a letter demanding an accounting and inventory of the
partnership, and remittance of their portion of the profits.

Petitioner failed to heed their demand, alleging that the joint venture with Biondo had
already ceased operations, and the present business was under a single proprietorship.
Respondents filed a suit for specific performance, accounting, and dissolution of the joint
venture.

Issue: Whether or not respondent, as assignee of the partner Biondo, may order petitioner to
render an accounting of the joint venture.

Held:
No. A joint venture is generally understood to mean an organization formed for some
temporary purpose. It is likened to a partnership or one which has for its object determinate
things, their use or fruits, or a specific undertaking, or the exercise of a profession or vocation.
Article 1813 provides: (t)he transfer by a partner of his partnership interest does not make the
assignee of such interest a partner of the firm, nor entitle the assignee to interfere in the
management of the partnership business or to receive anything except the assignee's profits. The
assignment does not purport to transfer an interest in the partnership, but only a future contingent
right to a portion of the ultimate residue as the assignor may become entitled to receive by virtue
of his proportionate interest in the capital.

Although respondent did not become partner as a consequence of the assignment of rights,
however, her prayer for dissolution of the joint venture may be granted conformably with the
right granted to the purchaser of a partners interest under Article 1813.










Cesar Lirio, doing business under the name Celkor Ad Sonicmix, v. Wilmer Genovia
G.R. No. 167757
November 23, 2011

PERALTA, J.
Facts:
Respondent Genovia was hired by petitioner Lirio as manager in his recording studio,
Celkor. He was employed to manage and operate Celkor and to promote the recording studios
services. A few days after respondent started working, petitioner asked him to compose and
arrange songs for the album of his daughter, a former ABS-CBN talent. For this project, the
respondent was assured compensation separate from his salary as studio manager. He then
finished the composition of the songs and the album was recorded. He also worked on the
promotion of the album. When the respondent asked for his compensation, the petitioner told
him that he is entitled to only 20% of the net profit, and not of the gross sales of the album, and
that the salary he receives as studio manager would be deducted from the said 20% net profit
share.

When the respondent insisted on a more proper compensation, the petitioner terminated
his services. The respondent filed a complaint for illegal dismissal.
The petitioner asserts that because of their agreement on the sharing of profits, his relationship
with the respondent is one of an informal partnership, not an employer-employee relationship.
Both of them contributed money, property or industry to the project with the intention of
dividing the profit among themselves.

Issue: Whether or not their relationship was that of an employer and employee, or a partnership.

Held:
The relationship between the petitioner and respondent was that of an employer and
employee, not a partnership. The claim of partnership was not supported by any written
agreement. The requisites of an employer-employee relationship were met. In the payroll
presented by the respondent, there were deductions from his wages for his absence from work,
which negates the petitioners claim that the wages were advances for respondents work in the
partnership.








AGENCY
Tom Tan v. Heirs of Antonio Yamson
G.R. No. 163182
October 24, 2012

MENDOZA, J.:
Facts:
Petitioners were owners of seven parcels of land located in Mandaue City. In order to
raise funds to meet their unpaid obligations to a certain Philip Lo, they decided to sell their
properties. They issued the Authority to Look for Buyer/Buyers on May 19, 1998 in favor of
Yamson to facilitate their search for prospective buyers. Subsequently, two lots were sold to
Kimhee Realty Corporation, represented by Oscar Chua, and the relevant parties executed the
Deed of Absolute Sale. Yamson then demanded his commission from petitioners for the sale of
the lots to his registered buyer. Petitioners, however, refused to pay him, arguing that he was not
entitled to his commission because it was petitioners themselves who introduced Yamson to
Chua and that the agreement was for Yamson to sell all seven lots, which he failed to
accomplish.

Issue: Whether Yamson was entitled to the payment by petitioners of his broker's commission.

Held:
Yes. A plain reading of the Authority to Look for Buyer/Buyers reveals that nowhere in
the said document is it indicated that the sale of all seven lots was a prerequisite to the payment
by petitioners of Yamson's commission. If petitioners' intention was for Yamson to locate a
buyer for all their properties, then they should have had this condition reduced to writing and
included in the Authority to Look for Buyer/Buyers that they executed. Since no such stipulation
appears, then it would be fair to conclude that the petitioners had no such intention. Thus,
Yamson is entitled to his commission for the sale of the two lots.


















Philippine Charter Insurance Corporation vs. Explorer Maritime Co. et al
G.R. No. 175409
September 7, 2011

LEONARDO-DE CASTRO, J.
Facts:
In 1995, petitioner Philippine Charter Insurance Corporation (PCIC), as insurer-subrogee, filed
with the a Complaint against the following respondents: the unknown owner of the vessel M/V
"Explorer" (common carrier), Wallem Philippines Shipping, Inc. (ship agent), Asian Terminals,
Inc. (arrastre), and Foremost International Port Services, Inc. (broker). PCIC sought to recover
from the respondents the sum representing the value of lost or damaged shipment paid to the
insured, interest and attorneys fees.
In 2000, the respondent common carrier, "the Unknown Owner" of the vessel M/V "Explorer,"
and Wallem Philippines Shipping, Inc. filed a Motion to Dismiss on the ground that PCIC failed
to prosecute its action for an unreasonable length of time because PCIC had not set the case for
pre-trial. PCIC opposed this, saying that it it was waiting for the resolution of its Motion to
Disclose the identity of the Unknown Owner, which it allegedly filed with another branch of
the court. According to PCIC, it was premature for it to move for the setting of the pre-trial
conference before the resolution of the Motion to Disclose.
Issue: Whether or not the petitioners Motion to Disclose has to be resolved before the case is
set for trial

Held:
No. Respondent Explorer Maritime Co., Ltd., which was then referred to as the
"Unknown Owner of the vessel M/V Explorer," had already been properly impleaded pursuant
to Section 14, Rule 3 of the Rules of Court. As all the parties have been properly impleaded, the
resolution of the Motion to Disclose was unnecessary for the purpose of setting the case for pre-
trial

Furthermore, Section 3, Rule 3 of the Rules of Court likewise provides that an agent
acting in his own name and for the benefit of an undisclosed principal may sue or be sued
without joining the principal except when the contract involves things belonging to the principal.
Since the action filed by PCIC was an action for damages, the agent may be properly sued
without impleading the principal. Thus, even assuming that petitioner had filed its Motion to
Disclose with the proper court, its pendency did not bar PCIC from moving for the setting of the
case for pre-trial as required under Rule 18, Section 1 of the Rules of Court.






Loadmasters Customs Services, Inc., v. Glodel Brokerage Corporation and R&B Insurance
Corporation
G.R. No. 179446
January 10, 2011

MENDOZA, J.:
Facts:
On August 28, 2001, R&B Insurance issued marine policy in favor of Columbia to insure
the shipment of 132 bundles of electric copper cathodes against all risks. The cargoes were
shipped on board the vessel "Richard Rey" from Isabela, Leyte to North Harbor, Manila. They
arrived on the same date.
Columbia engaged the services of Glodel for the release and withdrawal of the cargoes
from the pier and the subsequent delivery to its warehouses. Glodel, in turn, engaged the services
of Loadmasters for the use of its delivery trucks to transport the cargoes to Columbias
warehouses in Bulacan and Valenzuela City. The goods were loaded on board 12 trucks owned
by Loadmasters, driven by its employed drivers. Of the 6 trucks route to Balagtas, Bulacan, only
5 reached the destination. One truck, loaded with 11 bundles, failed to deliver its cargo.
Later on, the said truck, was recovered but without the copper cathodes. Because of this
incident, Columbia filed with R&B Insurance a claim for insurance indemnity in the amount
ofP1,903,335.39. After the investigation, R&B Insurance paid Columbia the amount
ofP1,896,789.62 as insurance indemnity. R&B Insurance, thereafter, filed a complaint for
damages against both Loadmasters and Glodel before the RTC of Manila. It sought
reimbursement of the amount it had paid to Columbia for the loss of the subject cargo. It claimed
that it had been subrogated "to the right of the consignee to recover from the party/parties who
may be held legally liable for the loss."
RTC rendered a decision holding Glodel liable for damages for the loss of the subject
cargo and dismissing Loadmasters counterclaim for damages and attorneys fees against R&B
Insurance. CA rendered that Loadmasters is an agent of Glodel.

Issue: Whether Loadmasters is an agent of Glodel.

Held:
No. Article 1868 of the Civil Code provides: By the contract of agency a person binds
himself to render some service or to do something in representation or on behalf of another, with
the consent or authority of the latter. The elements of a contract of agency are: (1) consent,
express or implied, of the parties to establish the relationship; (2) the object is the execution of a
juridical act in relation to a third person; (3) the agent acts as a representative and not for
himself; (4) the agent acts within the scope of his authority.
Loadmasters never represented Glodel. Neither was it ever authorized to make such
representation. It is a settled rule that the basis for agency is representation, that is, the agent acts
for and on behalf of the principal on matters within the scope of his authority and said acts have
the same legal effect as if they were personally executed by the principal. On the part of the
principal, there must be an actual intention to appoint or an intention naturally inferable from his
words or actions, while on the part of the agent, there must be an intention to accept the
appointment and act on it. Such mutual intent is not obtaining in this case.

Urban Bank Inc. v. Magdaleno M. Pea
G.R. Nos. 145817, 145822, 162562
October 19, 2011

SERENO, J.
Facts:
Isabel Sugar Company Inc. (ISCI) owned a parcel of land in Pasay City occupied by
tenants whose lease contracts were no longer renewed. ISCI was to sell the land to petitioner
Urban Bank on the condition that it would be delivered to the petitioner free from all tenants.
Respondent Pea, director and corporate secretary of ISCI, was engaged by the corporation, in a
memorandum, as its agent to handle the eviction of the tenants. Respondent Pea thereafter
advances the expenses for the posting of security guards in the property and the filing of the
necessary court actions. Despite the non-eviction of the tenants, the sale of the property between
ISCI and petitioner was completed. The petitioner informed respondent that it will retain his
services in guarding the property and that he should continue his possession thereof in the
meantime. The petitioner bank also sent respondent a letter saying that the latter is authorized to
represent it in any court action he may institute in carrying out his duties. The petitioners
engagement of the respondent was acknowledged by ISCI in a letter. Later on, the respondent
informed the petitioner that it could already take possession of the property free from tenants

When the respondent asked petitioner for his compensation, the former argued that it was
ISCI, the original owners of the property that engaged the services of the respondent. It was
ISCI, therefore, who was liable for his compensation.

Issue: Whether or not an agency relationship existed between the respondent Pea and the
petitioner Urban Bank.

Held:
Yes. After the sale between ISCI and the petitioner was consummated, respondent Pea
remained in possession of the property and represented himself to third persons as the agent of
petitioner. The bank did not repudiate the actions of Pea, even if it was fully aware of his
representations to third parties on its behalf as owner of the Pasay property. Its tacit acquiescence
to his dealings with respect to the Pasay property and the tenants spoke of its intent to ratify his
actions, as if these were its own. Even assuming arguendo that it issued no written authority, and
that the oral contract was not substantially established, the bank duly ratified his acts as its agent
by its acquiescence and acceptance of the benefits, namely, the peaceful turnover of possession
of the property free from sub-tenants.
Even if, however, Pea was constituted as the agent of Urban Bank, it does not
necessarily preclude that a third party would be liable for the payment of the agency fee of Pea.
Nor does it preclude the legal fact that Pea while an agent of Urban Bank, was also an agent of
ISCI, and that his agency from the latter never terminated. This is because the authority given to
Pea by both ISCI and Urban Bank was common to secure the clean possession of the property
so that it may be turned over to Urban Bank. This is an ordinary legal phenomenon that an
agent would be an agent for the purpose of pursuing a shared goal so that the common objective
of a transferor and a new transferee would be met.
Indeed, the Civil Code expressly acknowledged instances when two or more principals
have granted a power of attorney to an agent for a common transaction. The agency relationship
between an agent and two principals may even be considered extinguished if the object or the
purpose of the agency is accomplished. In this case, Peas services as an agent of both ISCI and
Urban Bank were engaged for one shared purpose or transaction, which was to deliver the
property free from unauthorized sub-tenants to the new owner a task that Pea was able to
achieve and is entitled to receive payment for.






















Westmont Investment Corp. v. Amos Francia
G.R. No. 194128
December 7, 2011

MENDOZA, J.:
Facts:
Respondents Amos P. Francia, Jr., Cecilia Zamora and Benjamin Francia filed a
Complaint for Collection of Sum of Money and Damages arising from their investments against
petitioner Westmont Investment Corporation and respondent Pearlbank Securities Inc. before the
RTC. Wincorp and Pearlbank filed their separate motions to dismiss for failure to state a cause of
action. RTC denied the motions to dismiss of Wincorp and Pearlbank for lack of merit.
RTC ruled in favor of the Francias and held Wincorp solely liable to them. CA affirmed.
It held that Wincorp is an agent of the plaintiff-appellees and is thus liable to the latter
notwithstanding the clear written agreement to the contrary.
Issue: Whether or not Wincorp is an agent of the Francias.
Held:
No. In a contract of agency, a person binds himself to render some service or to do
something in representation or on behalf of another with the latters consent. It is said that the
underlying principle of the contract of agency is to accomplish results by using the services of
others to do a great variety of things. Its aim is to extend the personality of the principal or the
party for whom another acts and from whom he or she derives the authority to act. Its basis is
representation.
Significantly, the elements of the contract of agency are: (1) consent, express or implied,
of the parties to establish the relationship; (2) the object is the execution of a juridical act in
relation to a third person; (3) the agent acts as a representative and not for himself; (4) the agent
acts within the scope of his authority.
In this case, the principal-agent relationship between the Francias and Wincorp was not
duly established by evidence. The records are bereft of any showing that Wincorp merely
brokered the loan transactions between the Francias and Pearlbank and the latter was the actual
recipient of the money invested by the former. Pearlbank did not authorize Wincorp to borrow
money for it. Neither was there a ratification, expressly or impliedly, that it had authorized or
consented to said transaction.





Albert Ching v. Felix Bantolo
G.R. No. 177086
December 5, 2012

DEL CASTILLO, J.:
Facts:
Respondents Felix M. Bantolo (Bantolo), Antonio O. Adriano and Eulogio Sta. Cruz, Jr.
are owners of several parcels of land situated in Tagaytay City. On April 3, 2000, respondents
executed in favor of petitioners Albert Ching (Ching) and Romeo J. Bautista a Special Power of
Attorney (SPA) authorizing petitioners to obtain a loan using respondents' properties as
collateral. On July 18, 2000, the Philippine Veterans Bank (PVB) approved the loan application
of petitioner Ching in the amount of P25 million. On July 31, 2000, petitioner Ching thru a letter
informed respondents of the approval of the loan. Sometime in the first week of August 2000,
petitioners learned about the revocation of the SPA.
Petitioners alleged that the SPA is irrevocable because it is a contract of agency coupled
with interest. According to them, they agreed to defray the costs or expenses involved in
processing the loan because respondents promised that they would have an equal share in the
proceeds of the loan or the subject properties. On the other hand, respondents alleged that they
executed the SPA in favor of petitioners because of their assurance that they would be able to get
a loan in the amount of P50 million and that P30 million would be given to respondents within a
month's time. Later, they were informed that the loan was approved in the amount of P25 million
and that their share would be P6 million. Since it was not the amount agreed upon, respondents
revoked the SPA and demanded the return of the titles.

Issue: Whether the contract of agency may be revoked.

Held:
Yes. There is no question that the SPA executed by respondents in favor of petitioners is
a contract of agency coupled with interest. This is because their bilateral contract depends upon
the agency. Hence, it cannot be revoked at the sole will of the principal.
Furthermore, petitioner Ching is entitled to actual damages in the amount of P500,000.00
without any condition. In exchange for his possession of the titles, petitioner Ching advanced the
amount of P500,000.00 to respondents. Considering that the loan application with PVB did not
push through, respondents are liable to return the said amount to petitioner Ching.







TRUSTS
Richard Juan v. Gabriel Yap, Sr.
G.R. No. 181277
March 30, 2011

CARPIO, J.:
Facts:
On 31 July 1995, spouses Maximo and Dulcisima Caeda mortgaged to petitioner
Richard Juan, employee and nephew of respondent Gabriel Yap, Sr., two parcels of land in
Talisay, Cebu to secure a loan of P1.68 million, payable within one year. On 30 June 1998, Juan,
sought the extrajudicial foreclosure of the mortgage. Although Juan and Yap participated in the
auction sale, the properties were sold to Juan for tendering the highest bid of P2.2 million. No
certificate of sale was issued to petitioner, however, for his failure to pay the sales commission.
Yap and the Caeda spouses executed a memorandum of agreement where (1) the
Caeda spouses acknowledged Yap as their "real mortgagee-creditor while Juan is merely a
trustee" of Yap; (2) Yap agreed to allow the Caeda spouses to redeem the foreclosed properties
for P1.2 million; and (3) the Caeda spouses and Yap agreed to initiate judicial action "either to
annul or reform the Contract or to compel Richard Juan to reconvey the mortgagees rights" to
respondent as trustor. Three days later, the Caeda spouses and Yap sued Juan in the RTC of
Cebu City to declare respondent as trustee of petitioner vis a vis the Contract, annul petitioners
bid for the foreclosed properties, and declare the Contract "superseded or novated" by the MOA.
The Caeda spouses consigned with the trial court the P1.68 million as redemption payment.
The RTC ruled for Juan and declared him to be the "true and real" mortgagee. CA
reversed.

Issue: Whether an implied trust arose between Juan and Yap, binding Juan to hold the beneficial
title over the mortgaged properties in trust for Yap.

Held:
Yes. An implied trust arising from mortgage contracts is not among the trust relationships
the Civil Code enumerates. The Code itself provides, however, that such listing does not
exclude others established by the general law on trust x x x. Under the general principles on
trust, equity converts the holder of property right as trustee for the benefit of another if the
circumstances of its acquisition makes the holder ineligible in good conscience to hold and
enjoy it. As implied trusts are remedies against unjust enrichment, the only problem of great
importance in the field of constructive trusts is whether in the numerous and varying factual
situations presented x x x there is a wrongful holding of property and hence, a threatened unjust
enrichment of the defendant.
Applying these principles, this Court recognized unconventional implied trusts in
contracts involving the purchase of housing units by officers of tenants associations in breach of
their obligations, the partitioning of realty contrary to the terms of a compromise agreement, and
the execution of a sales contract indicating a buyer distinct from the provider of the purchase
money. In all these cases, the formal holders of title were deemed trustees obliged to transfer title
to the beneficiaries in whose favor the trusts were deemed created. There is no reason to bar the
recognition of the same obligation in a mortgage contract meeting the standards for the creation
of an implied trust
Philippine National Bank v. Merelo B. Aznar, et al.
G.R. No. 171805
May 30, 2011

LEONARDO-DE CASTRO, J.:
Facts:
In 1958, RISCO ceased operation due to business reverses. To rehabilitate RISCO,
plaintiffs contributed a total amount of P212,720.00 which was used in the purchase of the three
parcels of land situated in Cebu. After the purchase of the above lots, titles were issued in the
name of RISCO. The amount contributed by plaintiffs constituted as liens and encumbrances on
the aforementioned properties as annotated in the titles of said lots.
Thereafter, the Notice of Attachment and Writ of Execution in favor of PNB were
annotated on the title. As a result, a Certificate of Sale was issued in favor of PNB, being the
lone and highest bidder of the three parcels of land known. A Final Deed of Sale in favor of PNB
was also issued and a new certificate of title was issued in the name of PNB.
Plaintiffs filed the case for the quieting of their supposed title to the subject properties,
declaratory relief, cancellation of TCT and reconveyance alleging that the subsequent
annotations on the titles are subject to the prior annotation of their liens and encumbrances.
The RTC ruled against PNB on the basis that there was an express trust created over the
subject properties whereby RISCO was the trustee and the stockholders, Aznar, et al., were the
beneficiaries or the cestui que trust. CA set aside RTC ruling and held that the monetary
contributions made by Aznar, et al., to RISCO can only be characterized as a loan secured by a
lien on the subject lots, rather than an express trust.

Issue: Whether the language of the subject Minutes created an express trust.

Held:
No. Trust is the right to the beneficial enjoyment of property, the legal title to which is
vested in another. It is a fiduciary relationship that obliges the trustee to deal with the property
for the benefit of the beneficiary. Trust relations between parties may either be express or
implied. An express trust is created by the intention of the trustor or of the parties. An implied
trust comes into being by operation of law.
Express trusts, sometimes referred to as direct trusts, are intentionally created by the
direct and positive acts of the settlor or the trustor - by some writing, deed, or will or oral
declaration. It is created not necessarily by some written words, but by the direct and positive
acts of the parties. This is in consonance with Article 1444 of the Civil Code, which states that
[n]o particular words are required for the creation of an express trust, it being sufficient that a
trust is clearly intended.
The creation of an express trust must be manifested with reasonable certainty and cannot
be inferred from loose and vague declarations or from ambiguous circumstances susceptible of
other interpretations.
In the present case, no such reasonable certitude in the creation of an express trust
obtains. In fact, a careful scrutiny of the plain and ordinary meaning of the terms used in the
Minutes does not offer any indication that the parties thereto intended that Aznar, et al., become
beneficiaries under an express trust and that RISCO serve as trustor.

Maria Torbela v. Spouses Andres and Lena Rosario
G.R. No. 140528
December 7, 2011

LEONARDO-DE CASTRO, J.:
Facts:
Torbela siblings inherited the title to Lot No. 356-A from their parents, the Torbela
spouses, who, in turn, acquired the same from the first registered owner of Lot No. 356-A,
Valeriano. Torbela siblings executed a Deed of Absolute Quitclaim in which they transferred and
conveyed said lot to Dr. Rosario for the consideration of P9.00. However, the Torbela siblings
explained that they only executed the Deed as an accommodation so that Dr. Rosario could
have said lot registered in his name and use said property to secure a loan from DBP
Dr. Rosario was then issued TCT No. 52751, covering Lot No. 356-A. Dr. Rosario then
executed his own Deed of Absolute Quitclaim, expressly acknowledging that he only
borrowed Lot No. 356-A and was transferring and conveying the same back to the Torbela
siblings for the consideration of P1.00. Thereafter, Dr. Rosarios loan in the amount of
P70,200.00, secured by a mortgage on Lot No. 356-A, was approved by DBP. Soon thereafter,
construction of a hospital building started on Lot No. 356-A.
Both the RTC and the Court of Appeals that Dr. Rosario only holds Lot No. 356-A in
trust for the Torbela siblings.

Issue: Whether Dr. Rosario only holds Lot No. 356-A in trust for the Torbela siblings.

Held:
Yes. Dr. Rosarios execution of the Deed of Absolute Quitclaim, containing his express
admission that he only borrowed Lot No. 356-A from the Torbela siblings, transformed the
nature of the trust to an express one. The express trust continued despite Dr. Rosario stating in
his Deed of Absolute Quitclaim that he was already returning Lot No. 356-A to the Torbela
siblings as Lot No. 356-A remained registered in Dr. Rosarios name under TCT No. 52751 and
Dr. Rosario kept possession of said property, together with the improvements thereon.
Trust is the right to the beneficial enjoyment of property, the legal title to which is vested
in another. It is a fiduciary relationship that obliges the trustee to deal with the property for the
benefit of the beneficiary. Trust relations between parties may either be express or implied. An
express trust is created by the intention of the trustor or of the parties, while an implied trust
comes into being by operation of law.
A trust may have a constructive or implied nature in the beginning, but the registered
owners subsequent express acknowledgement in a public document of a previous sale of the
property to another party, had the effect of imparting to the aforementioned trust the nature of an
express trust. The same situation exists in this case. When Dr. Rosario was able to register Lot
No. 356-A in his name under TCT No. 52751 on December 16, 1964, an implied trust was
initially established between him and the Torbela siblings under Article 1451 of the Civil Code.





Joseph Goyanko Jr. v. UCPB
G.R. No. 179096
February 06, 2013

BRION, J.:
Facts:
In 1995, the late Joseph Goyanko, Sr. invested P2,000,000.00 with Philippine Asia
Lending Investors, Inc. family, represented by petitioner, and his illegitimate family presented
conflicting claims to PALII for the release of the investment. Pending the investigation of the
conflicting claims, PALII deposited the proceeds of the investment with UCPB on under the
name "Phil Asia: ITF (In Trust For) The Heirs of Joseph Goyanko, Sr.". On September 27, 1997,
the deposit under the ACCOUNT was P1,509,318.76.
On December 11, 1997, UCPB allowed PALII to withdraw P1,500,000.00 from the
Account, leaving a balance of only P9,318.76. When UCPB refused the demand to restore the
amount withdrawn plus legal interes, the petitioner filed a complaint before the RTC. In its
answer to the complaint, UCPB admitted, among others, the opening of the ACCOUNT under
the name "ITF The Heirs of Joseph Goyanko, Sr.," and the withdrawal on December 11, 1997.
RTC dismissed the petitioners complaint ruling that the words "ITF HEIRS" is not
sufficient to charge UCPB with knowledge of any trust relation between PALII and Goyankos
heirs. It concluded that UCPB merely performed its duty as a depository bank in allowing PALII
to withdraw from the ACCOUNT, as the contract of deposit was officially only between PALII,
in its own capacity, and UCPB. CA affirmed the ruling of the RTC and held that no express trust
was created between the HEIRS and PALII.

Issue: Whether UCPB is liable for the amount withdrawn as a trust agreement existed between
PALII and UCPB, in favor of the HEIRS, when PALII opened the ACCOUNT with
UCPB.

Held:
No. The elements of an express trust include a competent trustor and trustee, an
ascertainable trust res, and sufficiently certain beneficiaries. Each of the above elements is
required to be established, and, if any one of them is missing, it is fatal to the trust. There must
be a present and complete disposition of the trust property, notwithstanding that the enjoyment in
the beneficiary will take place in the future. It is essential, too, that 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. There must also be some
power of administration other than a mere duty to perform a contract although the contract is for
a third party beneficiary. A declaration of terms is essential, and these must be stated with
reasonable certainty in order that the trustee may administer, and that the court, if called upon so
to do, may enforce, the trust.
Under these standards, no express trust was created in the present case. First, while an
ascertainable trust res and sufficiently certain beneficiaries may exist, a competent trustor and
trustee do not. Second, UCPB, as trustee of the ACCOUNT, was never under any equitable duty
to deal with or given any power of administration over it. On the contrary, it was PALII that
undertook the duty to hold the title to the ACCOUNT for the benefit of the HEIRS. Third,
PALII, as the trustor, did not have the right to the beneficial enjoyment of the ACCOUNT.
Finally, the terms by which UCPB is to administer the ACCOUNT was not shown with
reasonable certainty. While we agree with the petitioner that a trusts beneficiaries need not be
particularly identified for a trust to exist, the intention to create an express trust must first be
firmly established, along with the other elements laid above; absent these, no express trust exists.