2.

Acts considered acts of repudiation

filing by a trustee of an action in
court against the trustor
to quiet title to property
for recovery of ownership thereof
issuance of the certicate of title
ling of the complaint for recovery of
possession
one who is an apparent
administrator of property causes the
cancellation of the title thereto in the
name of the apparent beneciaries
and gets a new certicate of title in
his own name
executed a deed of partition and on
the strength thereof obtained the
cancellation of the title
Prescriptibility of action for reconveyance
based on implied trust
Period of prescription 10 years from the
time the right of action accrues
o It is incumbent upon the party who
sets up the defense of prescription
(afrmative) to prove the date from
which the prescriptive period began
to run.
Where person claiming to be owner in
actual possession of property Where a
party is in actual possession of the property,
the action to enforce the trust and recover
the property, thereby quiet title thereto, is
imprescriptible.
o The prescriptive rule applies only
when the plaintiff or the person
enforcing the trust is not in
possession of the contested
property.
o He may wait until his possession is
disturbed or his title is attacked
before taking steps to vindicate his
right.
o His undisturbed possession gives
him the continuing right to seek the
aid of a court of equity to ascertain
and determine the nature of the
adverse claim of a third party and its
effect on its own title, which right can
be claimed only by one who is in
possession.
When prescriptive period begins to run
o from the moment the law creates the
trust because the so-called trustee
does not recognize any trust and

o
o

has no intention to hold for the

beneciary
from the time of actual notice in case
of unregistered deed
if based on constructive trust
resulting from its fraudulent
registration in the name of another
from the discovery of the fraud or
notice thereof (from the inscription of
the instrument and/or the issuance
of the new certicate of title by virtue
thereof)
The reference point is the
date of registration of the
deed or the date of issuance
of said new certicate of title
of the property which
constitutes constructive
notice to the public.
It constitutes an open and
clear repudiation of the
alleged duciary or trust
relationship and the lapse of
ten years of adverse
possession is sufcient to
vest title by adverse
possession.
This rule applies only to the
remedy of reconveyance
which has its basis on
Section 53 (par. 3.) of P.D.
No. 1529, otherwise known
as the Property Registration
Decree and Article 1456 of
the Civil Code.
Reconveyance is available in
case of registration of
property procured by fraud,
thereby creating a
constructive trust between
the parties.
if ownership of land was sold
ctitiously to avoid a foreclosure of
mortgage from the date of
recording of the release of
mortgage, on which date the cestui
que trust was charged with the
knowledge of the settlement of the
mortgage obligation, the attainment
of the purpose for which the trust
was created
If the legitimate owner of the subject
property which was fraudulently
registered in the name of another
had always been in possession

thereof, the constructive notice rule

cannot be applied.
Actions for reconveyance
grounded on the nullity of the
conveyance of the subject
property are imprescriptible.
o if the registration under the Torrens
System was secured through
fraudulent misrepresentation from
the time the true owner actually
discovered the act of defraudation
In the absence of fraud, the
period should be counted
from the date adverse title
was asserted, that is, from
the registration of the title.
o GR: An action for reconveyance of
real property based exclusively on
fraud prescribes in 4 years from the
discovery of the fraud; such
discovery is deemed to have taken
place upon the issuance of the
certicate of title over the property. If
the action is based on implied or
constructive trust, it prescribes in 10
years from the alleged fraudulent
registration or date of issuance of
the certicate of title over the
property.
o E: If acted in bad faith in securing
title over real property, he is not
entitled to the protection of the law
for the law cannot be used as a
shield for frauds and the prescriptive
period for the ling of the action for
reconveyance based on implied trust
must be reckoned from the actual
discovery of the fraud where such
discovery was made after the date of
registration.
Where rights of the beneciary are
recognized by the trustee
o from the time the trustee begins to
assert his title or repudiate the trust
o when the trustee les an ejectment
suit against the beneciary
o when he registers the deed of
assignment of property to him and
secures the cancellation of the
certicate of title in the name of the
former owner, and the issuance of
new certicate of title in his own
name
o when he sells portions of the
property

Continuous recognition of a resulting

trust precludes any defense of
prescription or laches in a suit to
declare and enforce the trust.
o Where the predecessor-in-interest of
the claimant has appeared to be the
registered owner of the property
under the Torrens System for more
than 30 years, his title has become
indefeasible and his dominical rights
over it can no longer be challenged.
When tacking of possession not permitted
the present possessor may complete the
period necessary for prescription by tacking
his possession to that of his grantor
o applies only where there is privity
between successive possessors
o does not apply where the possessor
came into possession of the property
in dispute by virtue of sale that is null
and void ab initio because the sale
was entered into contrary to public
policy or is absolutely ctitious or
simulated
Where property in possession of third
person The only limitation upon the right
of the beneciary to recover title over the
property held in trust is that the same must
not have been transferred to an innocent
purchaser for value in which event, his
remedy is to ask for damages.
o

Laches in action to enforce a trust

In case of express trusts entitled to rely
upon the delity of the trustee
o Laches applies from the time the
trustee openly denies or repudiates
the trust and the beneciary is
notied thereof, or is otherwise
plainly put on guard against the
trustee.
o The repudiation of the trust must be
clearly proved by the trustee.
o The delay of the beneciary is
directly attributable to the trustee
who undertakes to hold the property
for the former, or who is linked to the
beneciary by a condential or
duciary relation.
o The trustees possession is not
adverse to the beneciary until and
unless the latter is made aware that
the trust has been repudiated. In
constructive trusts, there is neither
promise nor duciary relation.

In case of implied trusts may be barred

not only by prescription but also by laches
o Laches constitutes a defense to suit
to declare and enforce an implied
trust
express repudiation is not
required unless the trustee
fraudulently and successfully
conceals the facts giving rise
to the trust
o The beneficiary is not justied in
delaying action to recover his
property. If he so delays, his action
may be barred by laches or
extinctive prescription.
o negligence or omission to assert a
right within a reasonable time
warrants not only a presumption that
the party entitled to assert it either
had abandoned it or declined to
assert it but also casts doubt on the
validity of the claim
o The defense of laches is an
equitable one and does not concern
itself with the character of the
defendants title.
only with whether or not by
reason of plaintiffs long
inaction or inexcusable
neglect he should be
barred from asserting his
claim at all
o Laches deals with the effect of
unreasonable delay.
less strictly applied between
near relatives than when the
parties are strangers to each
other
The existence of a
condential relationship is an
important consideration as it
tends to excuse an otherwise
unreasonable delay.

ART. 1448. There is an implied trust when

property is sold, and the legal estate is granted
to one party but the price is paid by another for
the purpose of having the benecial interest of
the property. The former is the trustee, while the
latter is the beneciary. However, if the person
to whom the title is conveyed is a child,
legitimate or illegitimate, of the one paying the
price of the sale, no trust is implied by law, it
being disputably presumed that there is a gift in
favor of the child.

Sale to a party but price paid by another

GR: A resulting trust arises in favor of a
person from whom a consideration comes
for a conveyance of property, whether realty
or personalty, to another.
o The presumption is that he who pays
for a thing intends a benecial
interest therein for himself.
o It is essential that:
there be an actual payment
of money, property, or
service, or an equivalent
constituting valuable
consideration; and
such consideration must be
furnished by the alleged
beneciary of a resulting
trust.
o sometimes referred to as a purchase
money resulting trust
o The trust is rebuttable by proof of a
contrary intention of the person from
whom the consideration comes, and
such proof may be by parol
evidence. The trust results only in
favor of one advancing the
consideration
Title conveyed to a child No trust is
implied if the person to whom the legal
estate is conveyed is a child, legitimate or
illegitimate, of the payor.
o It is presumed that a gift or donation
was intended in favor of the child.
rebuttable by proof of a
contrary intention a
resulting trust arises
Reason: The trustee may be
under a disability.
Sale to evade some rule of law The
parties must necessarily be subject to the
same limitations on allowable stipulations in
ordinary contracts.
Purchase by a person with his own funds for
another
Purchase by one person, on a consideration
furnished by himself, where he takes the
conveyance in the name of another, raises a
resulting trust in favor of the former.
o presumption or implication of law of
the intention of the purchaser that he
intends the purchase for his own
benet and the conveyance in the
name of another as a matter of

convenience or arrangement for

collateral purposes
ART. 1449. There is also an implied trust when a
donation is made to a person but it appears that
although the legal estate is transmitted to the
donee, he nevertheless is either to have no
benecial interest or only a part thereof.
Donation to a person but benecial interest
vested in another
A trust results in favor of the person in
whom it is intended to vest the benecial
interest in the property donated, with the
donee being the trustee.
ART. 1450. If the price of a sale of property is
loaned or paid by one person for the benet of
another and the conveyance is made to the
lender or payor to secure the payment of the
debt, a trust arises by operation of law in favor
of the person to whom the money is loaned or
for whom it is paid. The latter may redeem the
property and compel a conveyance thereof to
him.

Purchase with borrowed funds

Trust in favor of lender
o GR: The use of borrowed money in
making a purchase does not raise a
resulting trust in favor of the lender,
nor does the use of money given to
one for the purchase of property
raise a resulting trust on the property
in favor of the donor.
Trust in favor of borrower When money is
borrowed to purchase property, and the
conveyance is made, not to the borrower,
but to the lender who takes title to the
property in his own name in order to secure
the loan, a resulting trust in the property,
binding the lender or payor (trustee) in favor
of the borrower (beneciary), arises.
o An agreement between the parties
whereby the property purchased
shall be considered sold to the
trustee in case the beneciary fails
to reimburse him is tantamount to a
pactum commissorium.