Trust: digests

Part two of the oblicon reviewer on trust relationships.

Tamayo v Callejo:
**an implied trust that became an express trust.
Before 19112, the Tamayos sold a piece of land to Fernando Domantay, who took possession of the land. When Vicente died after the sale and his widow waived her rights to the remaining portion of the property to their children Mariano and Marcos, the two brothers applied to register the land in their name, saying they inherited it from their father, including the part that was sold to Domantay. In 1918 Domantay sold the land to Callejo.
In 1940 Mariano Tamayo sold the land to Estacio, whose surveyor went to the land in 1952 to segregate it; that same year Callejo registered his adverse claim to the land. Tamayo pleaded the statute of limitations as defense, but the court found that in 1918, when they had the land registered in their name, Mariano Tamayo, on his behalf and that of his brother, executed a public document acknowledging that his deceased parents had sold a parcel of the land to Domantay.
Though there was no clear evidence to create a trust, ruling out an express trust, the admission of the sale in a public document turned the implied trust into an express one. An express trust, the court held, was a “continuing and subsisting trust” until repudiated, in which case the period of prescription begins to run only from the time of repudiation.

2. implied trust:

— those which, without being expressed, are deducible from the nature of the transaction as matters of intent, or superinduced on the transaction by operation of law as a matter of equity, independently of the intent of the parties

1448. when property is sold, and titled to one, but the price is paid by another person, for the purpose of having the beneficial interest of the property. Resulting trust.
1449. when a donation is made to a person, who either has no beneficial interest or only a part thereon. Resulting trust.
1450. when property is paid by one for the benefit of another, and the title is given to the one who paid for it, but only to secure the payment of the debt. In this case the one who borrowed the money may, after paying his debt, compel a conveyance of the property. Constructive trust , meant to prevent unjust enrichment.
1451. when one inherits land but he has it titled to another. Resulting trust, because there is intent.
1452. when two or more people agree to buy property and, with their consent, have it titled only to one of them. Resulting trust.
1453. when property is given to a person in reliance upon his declared intention to hold it or transfer it to another. Resulting trust.
1454. when property is conveyed to another to secure the performance of an obligation. When the obligation becomes due, and the grantor offers to fulfill it, he may demand the reconveyance of the property. Constructive trust.
1455. when any trustee, guardian or other person holding a fiduciary relationship uses trust funds to buy property and has it titled to him or to a third person. Constructive trust.
1456. if property is acquired through mistake or fraud.

Two kinds of implied trust:
1. resulting trust – presumed to have been contemplated by the parties, the intent found in the nature of the transaction, though not expressed in the deed or instrument of conveyance; found in articles 1448-1455

2. constructive trust – raised by construction of law, or by operation of law
— created not by intent, but by the construction of equity in order to satisfy the demands of justice (Art. 1456)

CASES:

Mindanao Dev’t Authority v CA:
A landowner, in selling his property to another, made a written promise to work for the titling of the land, but it was not done. The land was later sold to the government, which tried to claim it after 28 years. The court ruled that there was no express trust, because the written promise did not categorically create an obligation on the part of the landowner to hold the property in trust for the other. Neither was the subject matter of the supposed trust clearly described.
There might have been an implied trust created, because the land was registered in the landowner’s name though it belonged to another. An implied trust, however, prescribes in 10 years, and 28 years had lapsed by the time the local government tried to claim the land.
**dissent: prescription does not run against the government.

Fabian v Fabian:
A daughter and a niece, through fraud and misrepresentation, claimed ownership of the deceased’s land. The other children filed an action to recover the land, but only after 32 years. The court ruled that although the trustee was supposed to hold the land in trust for the rightful owner in case of fraud, the court ruled that action for reconveyance of property based upon a constructive trust may be barred by the statute of limitations. Action may be filed within four years from the discovery of the fraud, which is deemed to have taken place when new certificates of titles were issued in the names of the respondents.
“In constructive trusts, laches constitute a bar to action to enforce the trust, and repudiation is not required, unless there is a concealment of facts giving rise to the trust.”
Also, acquisitive prescription took effect. Section 41 of Act 190 says 10 years actual adverse possession by a person claiming actual ownership of the land vests to the actual occupant a full and complete title.

Bueno v Reyes:
**while implied trusts prescribe, the date of computation is from the discovery of the fraud.
A man claimed as his and his brothers’ land that was inherited by his wife from her father. Since the family was in possession of the land, it was not found out until 23 years later, by which time the man had died. The brothers Reyes raised laches and prescription as a defense, but the court held that while implied trusts prescribe, the prescriptive period begins upon discovery of the fraud.
In this case, the cadastral registration was not a “constructive notice” because Francisco Reyes was trusted to answer the cadastral notice and they may not invoke the constructive notice rule on the basis of their own breach of the authority given. Also, the appellants were the ones in possession of the land until the fraud was revealed to them. The case was remanded to the lower court for further proceedings.

Tala Realty Services Corporation v Banco Filipino Savings and Mortgage Bank:
**the court will not enforce an implied trust when it is contrary to law.
Restrained from purchasing more real estate as part of its expansion program, Banco Filipino formed a realty corporation into which it “unloaded” its “extra” branches. The realty corporation, Tala, then leased the branches to the bank.
After Banco Filipino was taken over and foreclosed by the Central Bank, Tala claimed the bank branches, since the documents show a simple sale. It charged the bank rent and, when the bank failed to pay, filed an ejectment case.
The bank however reopened later and claimed the branches, in particular the Bulacan branch, saying there was an implied trust between the bank and Tala.
The court ruled that the sale was valid since all the elements were present, but the intent was to create an implied trust for the reconveyance of the property. However, since the “warehousing agreement” was in contravention of the law, the bank may not ask the court to enforce an implied trust. Neither may Tala collect from the bank, since it was equally guilty in having tried to circumvent the law through the warehousing agreement.

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