Trust School Reviewer

Day 1: History of Trusts/Establishing the Trust

______– A Brief Situationer

 What happened in 1066?
 ____ eased out ____
 Common law has its source in _____? Procedures are? ______
 _____ heard petitions in equity
 _____ corrected common law
 Both ___ and ____ = ______

Development of Trust in _____

 Uses (______ trust) introduced shortly after ______
o Trustee has no ____?
 Mere ___ of legal title
 What do beneficiaries enjoy
 Can direct trustee to convey ____ to another with no _____

Principal Objects of Uses

 To avoid what?
 To enable religious houses to ______, despite ______
 To have ______ in order to make ______, and;
 ______

The Statue of Uses?

 Whenever any person should thereafter be seized of land to the use of another, the latter shall be what?

Effect of the Statue of Uses

 By express ______, or by ______, certain equitable interests were not converted to ______, ______,
and ______, and ______ upon uses.
 These were recognized by the ______ as trusts after the Statue of Uses, and became the ______.
Refinements introduced by American Law
 ______ set forth rights and duties of parties and the powers of the trustee.
 ______ stated and restated or changed by statutes but no attempt yet to codify the whole body of law.
 ______ has been expounded in the Restatement of the Law of Trusts, adopted by the ______

______ Investment Code of ______

 Art. 15. ______ shall mean xxx a trustee of funds for ______ or ______, where the trustee is a ______
and at least ______ of the fund will ______ to the benefit of ______.
 ______ act of 1991

Civil Code of the Philippines

 A person who establishes a trust is called a ______, one in whom ______ is reposed as regards to
______ for the benefit of another person, known as the ______, and the person for whose benefit the
trust has been created is referred to as the ______.

Bogert, Trusts
  A trust is a ______ in which one person is the holder of the title to property subject to ______ to keep or
use the property for the benefit of another.

Definition of Terms
 The ______ of the trust is the person who intentionally causes the trust to come into existence
 The ______ is the person who holds title for the benefit of another.
 The ______ is the property interest which the trustee holds subject to the rights of another
 The ______ is the person whose benefit the trust property is to be held or used by the trustee.
 ______ is the document by which property interests are vested in the trustee and beneficiaries and the
rights and duties parties (called the ______) are set forth.

Parties to the Trust (3)

Trust distinguished from Agency

 Property
 Legal title
 Name
 Death

Trust distinguished from CASA

 Insured?
 Covered by what law?
 Guarantee
 What?
 Why?

Trust distinguished from Bailment

 Covers what?
 Legal title
 Rights
 Relationship

Trust distinguished from Contract for benefit of third person

 Acceptance by beneficiary must be ______ to ______ before ______, is necessary. Else, ______.

Types of Trusts (6)

Essential Requirements of Trust Relations (5)

Principal Methods of Creating a Trust

 A ______ by ______ that he holds the property in trust for another, or ______ such a ______ by
another.
o Examples (3)
 A ______ by the owner of property of that property by ______, to another to ______.
o Examples (2)
 Making, or procuring to be made, a ______ to ______ or ______ to another which the payee or
transferee is to hold in trust for a third person.
o Examples (2)

Life Insurance
 Function (3)
  Limitation (2)
 Tax Treatment (2)
o Proceeds?

Capacity of Settlor
 In order to create an express trust, the settlor must ______ or ______, or ______.
 ______ may render his attempt at trust creation void or voidable.
 If settlor is ______ to create a trust, his act may be void or voidable.

Expression of Trust Intent

 In order to create an express trust, the settlors intent must be ______ and not ______. Althoug it may be
______ by his conduct, the use of ______ or ______ is the method almost universially employed (______
or ______)
 The ______ and ______ must be described with ______. (as to ______)
 No particular words or phrases need be use (Art. ______) and words of ______ are not necessarily
______.

Certainty of Words/Intention
 The ______ must impose a ______ on the trustees.
o To the abosolute use of my wife… in ______ that she will do what is right as to the ______ thereof
between my children as she deems fit.

The Three Certainties (3)

 ______, if ______ or ______, no trust can arise.
o A thing is ______ when it is a particularly designated or physically segrated from all others of the
same class.
 ______, if description is ______, trust is ineffective, or it not a ______ capable of taking title.
 ______, ______ requires the statement of ______ and ______.

Necessity of Beneficiary-Definiteness
 The beneficiary does not have to be ______ at the date of ______. It is sufficient if the instrument gives a
______ or ______ by which the beneficiary can be identified at the time when enjoyment of his interest is
to begin.
o Example?

Expression of Trust Intent

 ______ - an expression of a wish or recommendation that the property be used for the benefit of another.
______
 ______ - one has deposited money and directed that account be entitled “in trust for” does not prove
______. What happens?

Implied Trust
 ______ (Trust intent not expressed in instrument)
o ______ is paid by another for the purpose of having ______.
o Donee has either no ______ or ______.
o ______ to inherited land is not in owners name
o Property is in the name of only ______ of the ______.
o Property is ______ to a person in ______ upon his declared intention to hold it in favor of another.
 ______ - to prevent unjust enrichment.

Transfer of Property
  In order to make a particular person a trustee, the ______ must go through whatever acts of ______ are
require in order to ______ that person with the property interest which the settlor intends him to hold in
trust. Transfer of title and delivery: 1) ______, 2) ______, 3) ______, 4) ______, 5) ______, properly ______
and ______. The ______ as receipt.

Consideration
 If a trust is completely creation, that the settler received ______ for creating the trust will not render it
______.
 A ______ to create a trust is not ______ against the promissor unless he received a ______. Maxim:
______ will not assist a volunteer.
 Trust is completely created when ______ vests in the beneficiary.
 Not valid under ______, or ______

Article______. The following donations shall be void

 Those between persons who were ______ or ______ at the time of donation.
 AThose made between persons found ______ of the ______, in consideration thereof.
 Those made to a ______ or his ______, ______or ______, by ______.
 In case referred to first bullet, the action of the declaration of nullity may be brought by the ______ and
the guilt of the donor and done may be proved by ______ in the same action.
Donations between Spouses (Including Live-in)
 ______. Family Code.
o Void, except ______.
 Article ______. Civil Code. Void

Acceptance by Trustee
 It is not necessary to the creation of trust that settlor ______ the trustee nor the trustee ______ and
______ to perform the duties under it, unless the trust was intended to be ______. Maxim: ______ will not
allow a trust to fair for want of a trustee.
 A bank authorized to engage in ______. Is under no obligation, either legal or moral, to accept any such
business being offered nor has it the right to accept of the same is ______.
 ______ is necessary to the vesting of title to trust property and ______ of trust duties to him.

Acceptance by Beneficiary
 Acceptance by beneficiary is ______.
 If the trust imposes no ______ upon the beneficiary, his acceptance shall be ______, if there is no ______.
 But in order that the ______ may be the owner of an equitable interest in the trust property and the holder
of an equitable claim against the trustee, the ______ must be shown. ______ cannot be forced on the
beneficiary without ______
 The ______ has the power, within ______ after he is notified of the settlors act of the trust creation, to
______.
 ______ must be of the whole trust, it is final, and it relates back to the date of trust creation. This is also
not subject to ______ in case of ______.

Formal Requirements:
 No ______ trust concerning an immovable or any interest therein may be proved by ______.
 If a settlor wishes to pass at his death property interests to a trustee and beneficiary, he must do so by
______. (2 types).
 Minimum doc requirements: Each trust or fiduciary account shall be covered by a ______.

Statue of Frauds.
 According to Art ______, the following must appear in a public instrument:
o ______ and ______ which have for their object the creation, transmission, modification, or
extinguishment of real rights over ______.
 According to Art ______, if the law requires a document xxx, the contracting parties may ______ each
other to a ______, that form, once the contract has been ______. This right may be exercised ______ with
the ______ upon the contract.

Administration of Trust

Duties of a Trustee (5)

 A ____________ is a fundamental doctrine governing the conduct of a ____________. A ____________

does not change except as the common law itself changes and then only by slow imperceptible
____________.

 A ____________ is an attitude or a course of action adopted by the fiduciary for the performance of the
requisite function. It is changeable at the ____________ of the ____________.

 The principles of the principles of the general law of trusts, insofar as they are not in conflict with this
code, the ____________, the ____________, and ____________, are hereby adopted

 Conduct of Trust Business. A trust entity shall administer the funds or property under its custody with the
____________ that a ____________ would exercise in the conduct of an enterprise of a like character and
with similar aims.
o Limitations
 ____________ investments.
 Junior ____________.
 Lacking ____________ as to safety or yield.
 ____________ property.
 Enterprise that trustee has ____________
 Personal loans without ____________
 ____________ property
 Q____________

 Prudent Standard of ____________ has Two Qualities

o The element of ____________ or ____________ includes such acts as seeking qualified
professional assistance where necessary for proper and efficient administration of trust.
o Element of ____________ or ____________; the existence of a higher skill imposes a duty to
exercise it.
o Trustee in accord with this rule is not responsible for ____________.
 Investment Limitations of a Trust Entity
o Unless otherwise directed by the ____________ creating the trust, the lending and investment of
funds shall be limited to ____________ and ____________ as may be prescribed by
____________, ____________, or ____________.
o ____________shall be administered in accordance with the terms of the instrument creating the
trust.
 o When the trustee is granted ____________ in the ____________ of the trust funds and unless
otherwise specifically enumerated by ____________ and____________, ____________ or
____________, loans and investments shall be limited to xxx
 Principles Common to All Fiduciaries
o That the fiduciary is under a ____________ to ____________ for the benefit of the other party to
the relation as to the matters within the ____________.
o That ordinarily he is under a duty not to ____________ to a third performance the
____________ of his own duties as fiduciary.
o That as to matters within the scope of the relation, he is under a duty not to ____________ at
the ____________ of the other party.
o That, if he enters into a transaction with the other party to the relation, he is under a duty to
____________ of all circumstances known to him affecting the transaction, and if the transaction
is ____________ to the other party, the latter can set it aside.
 ____________ - Most Fundamental Duty
o To administer the affairs of the Trust ____________ in the interest of the beneficiary and excluse
from consideration his/her ____________ and ____________.
 2 opposites.
 Conduct of Trust Business
o No trust entity shall ,for the account of the trustor or the beneficiary of the trust, ____________
or ____________ from, or ____________, ____________, ____________ or ____________ to, or
____________ of, any of the departments, directors, officers, stockholders, or employees of the
trust entity, relatives within the ____________ degree of ____________ or ____________, or
the relation interests of such ____________, ____________, and ____________, unless the
transaction is ____________ by the ____________ and the relationship of the trustee and the
other party involved in the transaction is ____________ to the ____________ or ____________
prior to the transaction.
 Transactions Requiring Prior Authority
o Invest in ____________ or in the ____________, in which the trustee or fiduciary owns
____________ of ____________.
o ____________, ____________, ____________ or ____________ from one trust or fiduciary
account to another trust or fiduciary account except when the investment is anyone of those in
Subsec X409.2
 Undivided Loyalty Rule to Improve Administration, to prevent loss
o Self-Serving Transactions
 ____________ in Fiduciary’s ____________.
 ____________ for investments
 Fiduciary’s ____________ of propery for ____________.
 ____________ of Fiduciary Funds in ____________.
 Profits ____________ with fiduciary property.
 ____________ with beneficiaries.
 A trustee is under a duty himself to do and not to ____________ to ____________ the doing of things
which he ought personally to do.
o Exception: ____________ but may not delegate ____________ requiring the use of skill or
judgement.
 In the administration of trust, the trustee is under a duty to:
o ____________ of the propery.
o To ____________.
o To enforce ____________.
o To defend ____________.
o To ____________ trust properties ____________.
o Handle ____________.
 A trustee is under a duty to ____________ and ____________ and to ____________ information to the
beneficiaries.
o ____________: What he received, expended, gained, lost.
o ____________: Intermediate, final, as requested, as required.
o ____________: Secrecy for 3rd parties vs. full disclosure to beneficiaries.
 Duty to Make Productive
o Generally, a trustee is directed to ____________ and ____________ income and therefore, has
either expressly or impliedly, a duty to ____________ the trust property in ____________ as
____________.
 Sources of Trustee Powers
o Express Powers
 ____________ in the trust instrument, or
 By ____________
 Or by ____________
o Implied Powers
 Not set forth in the ____________ but are deemed by ____________ to have been
intended because ____________ or ____________ to the accomplishment of the trust
purpose.
 Court Posture on Powers
o ____________ - Trustee is directed to perform certain acts of administration
o ____________ Trustee authorized to do so or referiend from doing a certain act, or to use his
judgement as to ____________ or ____________ a power should be used.
 Courts will not upset the decision of the trustee if ________________________, after
consideration of the intent of the ____________ as to the purpose of the trust and
circumstances of the beneficiary.
o ____________. Capriciously, arbitrarily, maliciously, in ____________, without ____________ of
terms.
o ____________. Court will direct trustee to use his own judgement.
 Powers of Ownership
o ____________ must be expressly granted by law or instrument.
o ____________ if expressly sated; if necessary or appripraite to carry out purposes unless
____________, or ____________ to be retained.
o ____________, ____________, or ____________ - must ne expressly conferred.
o ____________, ____________, ____________ claim.
 Powers of Administration
o ____________ distribution.
o ____________ original investment
o To ____________ share of stocks.
o To establish and maintain ____________
o To ____________ property in two or more trusts ____________.
o To allocate and apportion ____________ and ____________.
 Justice Cardoso’s Classic Statement on Fiduciaries
o Many forms of conduct permissible in the workaday world of those acting at ____________, are
forbidden to those bound by ____________.
o A trustee is held to ____________ than the ____________ of the market place.
o Not honestly alone but the ____________, the most sensitive is then the ____________.
o As to this, there has developed a ____________ that is unbending and ____________.
o ____________ has been the attitude of ____________ when petitioned to undermine the rule of
____________ by the ____________ or particular exceptions.
o Only thus has the level of conduct for fiduciaries been kept at a level higher than that
____________ by the ____________.
o It will not ____________ be ____________ by any judgement of this court.
 Day 3 – Termination of Trusts; Liabilities of the Trustee and Remedies of the Beneficiary.

 General Principles
o ____________. The common law rule against ____________, generally called ____________, is
that no interest is good unless it must ____________, if at all, not later than 21 years after some
life in being at the creation of the interest.
 This Rule ____________ the creator of every private trust by requiring him to
____________ for the certain vesting of all ____________ under or following his trust
not later than ____________ after the end of some life or lives in being at the time the
trust instrument goes into effect.
o Rule against ____________. In Several states, there are status which make void any attempt to
suspend the ____________ for longer than a fixed period, and this rule is sometimes called a
____________. ____________ in Being Rule
 The object was to facilitate the transfer of ____________ and ____________ from being
kept in a ____________ and ____________ for a lengthy period.
 Illegal in any of the following:
 ____________ prohibit the trustee from selling the property for a given period.
 ____________ prohibited by settlor from transferring his interest.
 ____________ makes beneficiary’s interest inalienable by him within a given
period and period is exceeded.
o Rule as to ____________.
 While there is some authority for the view that a private trust which is not limited in
____________ to lives in being and/or ____________ is void, it is generally held that
such a trust need not be so limited if ____________ by the parties or the court, and that
a provision for ____________ is valid only for the period of the ____________.
o Indestructible Trusts, examples
 All beneficiaries are ____________, ____________, ____________, and ____________,
a rule of law may make the trust indestructible if the ____________ of the settlor has
____________.
 A ____________ or ____________ in applying for ____________ cannot be secured;
e.g. some are minor or may be born in the future and have contingent interest.
 There is no person to ____________ and the trust is not ____________. E.g. animals,
cemetery upkeep.
o Rule against ____________
 If the terms of the trust require the trustee to ____________ instead of distributing it,
there is a provision for ____________.
 At ____________, there is no rule limiting the period during which accumulations may
be directed in a private trust, but the ownership of the accumulations must be
____________ within ____________ and/or ____________ under the ____________.
o ____________. The court has the power to order the trust funds to be applied to a
____________ different from that named by the settlor, where the settlor had intent to benefit
____________ generally and the accomplishment of the settlor’s ____________ is or becomes
impossible, impractical, or inexpedient. (____________ i.e., as near as possible)
 Specific Modes of Termination
o ____________. Unless the trust instrument expressly provides for it, neither the settlor, trustee,
nor beneficiary can change the terms of the trust. But if the beneficiaries consent to a change
they must be ____________ from objecting to the execution of the trust as altered. The settlor
may ____________ or ____________ the power to alter the provisions of the trust.
o ____________. The settlor has no power to ____________ and secure the return of the trust
property to him, unless he ____________ such a power, except where the settlor is
 ____________. In a few states by statute, ____________ are revocable, unless ____________ or
____________ on the written consent of all beneficiaries.
o ____________. The law regarding ____________ applies to a settlor and gives ground for ruling
invalid an act of trust creation at the suit of the settlor, or his representative or successors. E.G.
In the cases of conveyance induced by ____________, ____________ or ____________.
 If the settlor directed that a power of ____________ be inserted, but this was not done
due to ____________ or ____________ on the part of the person preparing the
instrument, he may have the instrument ____________ to include power of
____________.
o ____________. The length of time for which the trust is to continue is usually ____________ in
the trust instrument and the ____________ when this period expires
 If the instrument does not expressly fix the ____________, it will be deemed to have
been intended that the trust last until the settlor’s ____________ have been
accomplished.
 Examples, a period of years; lives of 1 or more persons; during ____________;
reaches an age; until marriage;
o ____________. If the ____________ of a private trust becomes accomplished before the date for
normal termination of the trust, ____________ will consider the trust terminated, either because
of the application of the statue of ____________ to ____________, or because ____________
will not compel the ____________ act of holding the property for a longer period.
o ____________If it becomes ____________ or ____________ to accomplish the purposes of the
settlor at a time before the normal date for trust termination, the court will terminate the
____________ or consider it terminated in the case of a ____________.
o ____________. Where, after the trust has been created, the interests of all beneficiaries pass by
operation of law or by conveyance to the trustee, the ____________ and ____________ merge,
no purpose of the settlor can thereafter be accomplished through the trust and it terminates.
o ____________. Where the settlor and all the beneficiaries of a trust join in applying to the
____________ for a termination of the trust, it will be ended even though the ____________
which the settlor originally had in mind have not been accomplished.
 Even though all the beneficiaries are ____________ and ____________, and they apply
for a decree of termination, it will not be granted, according to the majority American
rule, if ____________ and if the ____________. But in ____________ and some
____________, such a decree will be allowed.
 Consequence of Termination
o The trustee has the power and duty to ____________ possession of the trust property, safeguard
and manage it, and to perform such other acts are are reasonably necessary to the
____________ of the ____________; to prepare his ____________, distribute ____________,
and secure his ____________.
 Mechanism for Trustee Protection
o ____________. This includes consent, ratification, release, estoppel, election.
o ____________. Includes laches and statute of limitations.
o ____________. Includes exculpatory and immunity clauses and instruction.
 Conditions Precedent to Consent, Ratification, or Release
o Beneficiary ____________ with full information as to ____________, ____________ and
____________.
o Beneficiary must have ____________
o One beneficiary cant ____________ for another; ____________ cant act for remainderman,
majority for the minority.
 Remedies of Aggrieved Beneficiaries
o A____________
o D____________
o Criminal action for ____________
 o ____________ for the faithful performance of trust duties.
o ____________ on the product of breach.
o ____________ and ____________ of trust records.
o ____________ or ____________ of wrongful acts
o Specific ____________
o ____________ of trust property
o ____________ of trustee
 Revised Penal Code
o ____________ - any person who shall defraud another by any of the means mentioned
 With unfaithfulness or abuse of confidence namely:
 By ____ or ____________ to the prejudice of another, money, goods or any
other property received by the offender in trust or for administration.
 Affirmative Conduct of Trustee
o ____________. Exemption clauses *e.g. the trustee is made free from all liability except for
____________ or ____________) are under review by the ____________ (after the passage of
the ____________) for further ____________ to restrict the validity of such clauses especially for
those charging for their professional services.

Day 4 – Law on Agency

 Article ____________, by the contract of agency, a person ____________ himself to ____________ some
service or to do something in ____________ or on ____________, with the ____________ or
____________ of the latter.
 Parties to Agency
o ____________ - the person on whose behalf the act is done and who gives his consent
o ____________ the person who renders the service or does something on behalf of the principal
 Agency is sometimes known as ____________, ____________, ____________, ____________,
____________.
 Is there a trustee in agency?
 Trust Distinguished from Agency
o Property
o Legal title
o Name
o Death?
 ____________/____________ - the power to affect the contractual relationship of the principal
 ____________ - to be legally present in different places and carry on several activities at the same time as
if the principal himself were personally present and acting.
 Statutory Authority
o Sec 53. Other Banking Services. In addition to the operations specifically authorized in this Act, a
bank may perform the following services:
 Receive in custody ____________, ____________, and ____________.
 Act as ____________ and ____________, by order of and for the account of their
customers, shares, evidence of indebtedness and all types of securities.
 Make ____________ and ____________ for the account of others and perform such
other services for their customers are not ____________ with banking business.
 Upon prior approval of the ____________, act as ____________, ____________,
____________ or ____________ of investment management/ advisory/ consultancy
accounts; and
 Rent out ____________
 The bank shall perform the services permitted under xxx as ____________ or as an
____________. Accordingly, it shall keep the funds, securities which it receives duly
____________ from ____________.
 Examples of Agency Services
 o ____________ for individual fiduciaries, safekeeping, custodian, managing (2) and escrow.
o ____________ for transfer, registrar, paying/collection, depositary.
 Role Clarification (3)
 Essential Requisites (4)
 Formalities:
o Consent/Capacity of Principal
 ____________. Agency may be ____________.
 ____________. Silence, lack of action, failure to repudiate, knowing that a person is
acting on his behalf without his authority.
o Acceptance of Agent (2)
 Implied Acceptance by Agent
o Between persons who are present, the accept of the agency may also be implied the principal
delivers his ____________ to the agent and the latter receives It without ____________.
o Between persons who are absent, the acceptance of the agency cannot be implied from the
silence of the agent, except:
 When the principal ____________ his ____________ to the agent, who receives it w/o
any objection.
 When the principal entrusts to him by ____________ or ____________, a
____________ with respect to the ____________ in which he is habitually engaged as
an agent, and he did not ____________ to the ____________ or ____________.
 Object of the Agency
o The execution of the juridical act:
 “such other services are are not ____________ with ____________
 ____________: suffrage, director, oath, will
 ____________ act.
 Not allowed by ____________. That which cannot be done directly, cannot be done
indirectly through the agent. Example, alien owning real estate.
 Agent must act on behalf of ____________ and within the ____________ of his authority.
o Act with authority
 ____________ - valid under art 1987
 ____________, not binding on client except involves things of principal under art 1883,
then client liable.
o Act w/o authority.
 Principal’s behalf: ____________ liable under art 1897; ____________ under art 1403,
unless ratified by ____________, then valid from ____________.
 Agent’s behalf: ____________ liable.
 Formal Requirement
o ____________ on Power of Attorney
o When the sale of a piece of land or any interest therein is through an agent, the ____________ of
the latter shall be ____________; otherwise the sale shall be ____________.
o The following must appear in a public document: The power to ____________ property, or any
other power which has for its object an act appearing or which should appear in a public
document, or should ____________ a third person.
 Kinds of Agency
o As to creation (2)
o As to character (2)
o As to extent (2)
o As to authority (2)
 ____________. Example: The agent is hereby authorized to manage my property with full powers and
authority to perform all such acts as he may consider appropriate; hereby granting him general and
unlimited authority over my said property.
 Special Power of Attorney
 o Acts of strict dominion or ownership
 ____________ is acquired or transferred
 ____________ or ____________ money
 Lease ____________ for ____________.
o Gratuitous contracts
 G____________
 Waive any ____________.
o Involving personal trust and confidence.
 C____________, a____________, r____________, A____________.
 Bind principal in ____________/____________
o A special power to sell excludes the ____________ and a special power to ____________ does
not include power to sell.
o A special power to ____________ does not authorize submission to ____________
o The limits of the agents authority shall not be considered exceeded should it have been
performed in a ____________ to the principal than ____________.
 Duties and Powers of Agent
o ____________ out agency.
o ____________ business already began/ if ____________ entails danger.
o ____________ if agreed upon. Observe diligence of ____________, if agency is declined.
o Act in accordance with ____________. If none, ____________.
o Not to carry out if manifestly result in ____________.
o ____________ for transactions and ____________, even if now ____________.
o ____________, liable for damages if agent prefers his own. ( ____________, administratively
separate).
o Lend at ____________, if ____________.
o Authorized to lend, agent cannot borrow without ____________.
o ____________ on the sum he has applied to his own use.
 Obligations of the Principal
o ____________ with all the obligations within ____________.
o ____________ necessary for execution of agency, if agent requests.
o ____________ agent what he advanced, even when ____________, when agent is
____________.
o ____________ the agent for all damages regarding ____________, without ____________.
o Agency is presumed to be for ____________ unless ____________
 Termination of Agency
o ____________ of the term
o Death, civil ____________, i____________, ____________
o ____________ of the agent.
o ____________ of the object or purpose of the agency
o ____________ by principal at ____________.
o ____________ of the firm or corporation which entrusted or accepted the agency.
 Other Grounds
o Termination by ____________.
o Loss of the ____________ of the agency.
o ____________ if inconsistent with agency.
o N____________
 When agency cannot be revoked.
o Agency coupled with ____________, e.g., ____________
o Cases under Art 1972
 ____________ depends on it.
 ____________ of ____________ an obligation.
 ____________ by principal.
 Notice by Publication
o If a person specifically informs another or states by ____________ that he has given a
____________ to a third person, the latter becomes a duly authorized agent, in the former case
with respect to the person who received the ____________, and in the latter case with regard to
any person.
o The power shall continue to be in full force until the ____________ is ____________ in the same
manner which it was given.

Day 4 – Law on Depositary Relationships

 A ____________ is constituted from the moment a person receives a thing belonging to another, with the
____________ of safely keeping it and returning the same.
 Parties to the Relationship
o ____________ - the person delivering the thing for safekeeping
o ____________ - the party who receives the thing with the obligation of safely keeping the thing
and returning the same.
o ____________ - the place where the thing is safely kept.
 Deposit Distinguished from Loan (CASA)
o Purpose?
o Ownership?
o Term?
o Obligation?
o Covered by?
o Set-off?
 ____________, ____________, and ____________ of money in banks and similar institutions shall be
governed by the provisions concerning ____________.
 ____________ shall not be proper when one of the debt arises from a ____________ or from the
obligations of a depositary or a ____________ in ____________.
 Bank Services
o Personal Agencies
 For ____________
 S____________
 C____________
 M____________
 E____________
o Corporate Agencies
 T____________
 R____________
 P____________/C
 D____________
 Safekeeping Account
o Duties:
 ____________ the property
 ____________ for it
 Keep it safely in ____________ or ____________
 Deliver it ____________ or ____________.
o Responsibility: To ____________ and ____________ the thing and keep it safely as a
____________ would safe keep similar property. To exercise ____________ in delivering the
thing back to the owner or his order.
 ____________.The depositary holding certificate, bonds, securities, or instruments which earn interest
shall be bound to collect the latter when it becomes due, and to take such steps as may be necessary in
order that the securities may preserve their value and the rights corresponding to them according to law.
 Article 1975, par 2. The above provision shall not apply to ____________ for the ____________ of
____________.
 Lu Zan Sia vs C.A. et al. 222 SCRA 24
o This case ruled that ____________ is a special kind of deposit.
o Yet, Art 1975 par 2 of the Civic Code states “The above provision shall not apply to
____________.
o Sec 53.5 as worded and the last paragraph of Sec 53. Seems to ____________ the confusion.
 Custodianship Account
o ____________. Securities, warehouse receipts, quedans, and other documents of title which are
the subject of quasi-banking functions, such as repurchase agreements, shall be ___________, if
____________, to a ____________ that is mutually acceptable to the lender/purchaser and
borrower/seller (from ____________)
 ____________. The safekeeping of money, securities, documents or other property or evidences of
property deposited by two or more persons with another person, to be delivered on a certain contingency
or the occurrence of a specified event.
 ____________ refers to the things delivered.
 ____________ refer to the terms of the agreement of deposit.
 ____________ refers to the person who receives the thing for safekeeping and obliges to deliver the same
on the occurrence of the specified event.
 Duties of Escrow Agent.
o ____________. Safekeep and deliver in accordance with definite instructions in the escrow
agreement.
o If the safekeeping of the thing delivered is not the principal purpose of the contract, there is no
____________ but ____________.
o ____________. Leaving nothing to Escrow agent’s discretion and nothing for later arrangement
or negotiation between the other two parties.
 Corporate Agency Depositary
o For p____________
o For v____________
o For f____________
 Depositary of Voting Trusts – Duties
o Receive ____________
o Issue ____________
o Hold the ____________
o Receive ____________
o Distribute ____________
o On termination, ____________ the stocks on surrender of the ____________
 Pyramid of Trust and Confidence
o T____________
o I____________ w/ ____________
o A____________
o C____________
o S____________
 Trust Fees
 A bank acting as trustee, fiduciary or investment manager shall be entitled to ____________ and
____________ which shall be determined on the basis of the ____________ and ____________.
 Obligations of the Depositary
o ____________/____________ the thing
o Not to ____________ to another the safekeeping
o Not the change the ____________ of ____________. To ____________ and wait for
____________ unless ____________
o Not to ____________.
 o Not to ____________ the thing deposited without the consent of the depositor, unless
____________
o When the thing deposited is delivered ____________ and ____________, the depositary must
return it in the ____________ and he shall be liable for damages should the ____________ or
____________ be broken through his fault.
 Fault on the part of the depositary is ____________, unless ____________
 Article 1981
o As regards to the value of the thing deposited, the ____________ shall be accepted, when the
____________ is imputable to the depositary, should there be no proof to the contrary.
o However, the court may pass upon the ____________ of the ____________ with respect to the
____________.
o When the seal or lock is broken, with or without the depositary’s fault, he ____________.
 Obligations of the Depositary
o For deposit of closed and seal receptacle, depositary presumed authorized to open:
 If the ____________ is delivered to him
 When the ____________ of the depositor as regards the deposit cannot be executed
without opening the box or receptacle.
o The thing deposited shall be returned with all its ____________, ____________, and
____________.
o The depositary cannot ____________ that the depositor prove his ownership of the thing
deposited.
o Nevertheless, should he discover that the thing has been stolen and who its true owner is, he
must ____________.
o If the owner, in spite of such information, does not claim it within the period of ____________,
the depositary shall be relieved of all responsibility by ____________.
o If the depositary has ____________ to believe that the thing has not been lawfully acquired by
the depositor, the former may ____________.
o Place of return?
o No placement stipulated
 Where the ____________
 If moved with malice, then the place where ____________.
 Return of the thing deposited: anytime on demand except:
 The thing is ____________
 The depositary is ____________ of the ____________ of a third person to the
return of the thing
 When the depositary discovers that the thing ____________ and who its
____________; must ____________ and ____________ to claim
 Obligations of the Depositor
o ____________ of the necessary expenses:
 ____________ expenses for the preservation
 ____________ already deemed included in compensation
o ____________ for losses arising from the character of the thing deposited except:
 Depositor was ____________ or ____________.
 Depositary ____________ of the character of thing
 Depositary was ____________ of the character.
o ____________ the thing in ____________.
 Depositary may sell within ____________ from demand.
 ____________, must be returned to depositor
 Termination
o D____________
o L____________
o D____________