Estate of Margarita D. Cabacungan vs. Laigo 655 SCRA 366

FACTS:

Unknown to the other children of Margarita, the mother transferred the tax declarations of her three (3) lands to her son, Roberto, to support his application for travel to the US. Upon returning, Roberto married Estella and adopted her two children, Pedro and Marilou. Sometime later, Roberto sold one of the lands to the spouses Campos, and separately sold the two remaining lands to his two adopted children. Margarita came to know of the sale during the wake of Roberto. Hence, Roberto’s siblings filed a complaint for annulment of the said sales and for the recovery of ownership and possession of the land. The trial court ruled against the plaintiffs on the basis that there was no express trust between Roberto and his mother. The Court of Appeals affirmed the decision of the trial court.

 

Issue:

Whether the trial and appellate court’s ruling were correct.

 

Ruling:

Yes. The Court held that “A trust is the legal relationship between one person having an equitable ownership of property and another person owning the legal title to such property, the equitable ownership of the former entitling him to the performance of certain duties and the exercise of certain powers by the latter. Trusts are either express or implied.” The Court also held that “Express or direct trusts are created by the direct and positive acts of the parties, by some writing or deed, or will, or by oral declaration in words evincing an intention to create a trust.” The Court, moreover, held that “Implied trusts—also called “trusts by operation of law,” “indirect trusts” and “involuntary trusts”—arise by legal implication based on the presumed intention of the parties or on equitable principles independent of the particular intention of the parties. They are those which, without being expressed, are deducible from the nature of the transaction as matters of intent or, independently of the particular intention of the parties, as being inferred from the transaction by operation of law basically by reason of equity.” In addition, the Court held that “Implied trusts are further classified into constructive trusts and resulting trusts. Constructive trusts, on the one hand, come about in the main by operation of law and not by agreement or intention. They arise not by any word or phrase, either expressly or impliedly, evincing a direct intention to create a trust, but one which arises in order to satisfy the demands of justice.” The Court further held that “Resulting trusts arise from the nature or circumstances of the consideration involved in a transaction whereby one person becomes invested with legal title but is obligated in equity to hold his title for the benefit of another. This is based on the equitable doctrine that valuable consideration and not legal title is determinative of equitable title or interest and is always presumed to have been contemplated by the parties.” Finally, the Court held that “A trust will follow the property—through all changes in its state and form as long as such property, its products or its proceeds, are capable of identification, even into the hands of a transferee other than a bona fide purchaser for value, or restitution will be enforced at the election of the beneficiary through recourse against the trustee or the transferee personally. This is grounded on the principle in property law that ownership continues and can be asserted by the true owner against any withholding of the object to which the ownership pertains, whether such object of the ownership is found in the hands of an original owner or a transferee, or in a different form, as long as it can be identified.”

Philippine National Bank vs. Aznar 649 SCRA 214

FACTS:

Some stockholders of RISCO contributed a total amount of P212,720.00 to rehabilitate the company by purchasing three (3) parcels of land. The Minutes of the Special Meeting of the Board of Directors of RISCO provided that the contributions constituted a lien or interest in the lands. The lands were, however, attached and was bought by the PNB as the lone and highest bidder. Subsequently, titles were issued in the name of PNB which prompted the said stockholders to file a complaint for quieting of title. The trial court ruled in favor of the plaintiffs on the basis that there was an express trust. The decision was, however, set aside by the Court of Appeals on the ground that the contributions was a loan secured by a lien rather than an express trust.

 

issue:

Whether there was an express trust in this case.

 

ruling:

No. The Court held that “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 “no particular words are required for the creation of an express trust, it being sufficient that a trust is clearly intended.””

 

 

Torbela vs. Rasario 661 SCRA 633

FACTS:

The spouses Eugenio and Marta Torbela received a parcel of land from Marta’s sister. Upon the death of the spouses, the Land was adjudicated in equal shares among their children. These children executed a Deed of Absolute Quitclaim over the land in favor of their nephew, Dr. Rosario. Another Deed of Absolute Quitclaim was executed, this time by Dr. Rosario, acknowledging that he only borrowed the land and was already returning it to his aunts and uncles. The latter Deed was notarized but was not immediately annotated on the title of the land, hence, the title was still in the name of Dr. Rosario. Dr. Rosario mortgaged the land to Banco Filipino for a loan. Dr. Rosario failed to pay the loan and the mortgage was extra-judicially foreclosed. The children then filed a complaint for recovery of ownership and possession of the subject land against Dr. Rosario and Banco Filipino. The trial court ruled in their favor which was affirmed by the Court of Appeals.

 

Issue:

Whether an express trust was created in this case.

 

Ruling:

Yes. The Court held that “Express trusts are created by direct and positive acts of the parties, by some writing or deed, or will, or by words either expressly or impliedly evincing an intention to create a trust. Under Article 1444 of the Civil Code, “[n]o particular words are required for the creation of an express trust, it being sufficient that a trust is clearly intended.”62 It is possible to create a trust without using the word “trust” or “trustee.” Conversely, the mere fact that these words are used does not necessarily indicate an intention to create a trust. The question in each case is whether the trustor manifested an intention to create the kind of relationship which to lawyers is known as trust. It is immaterial whether or not he knows that the relationship which he intends to create is called a trust, and whether or not he knows the precise characteristics of the relationship which is called a trust.”

Metropolitan Bank & Trust Company, Inc. vs. Board of Trustees of Riverside Mills Corporation Provident and Retirement Fund 630 SCRA 350

FACTS:

The Riverside Mills Corporation (RMC) established a Plan for its regular employees. The contributions to the plan shall form part of the Fund which shall be held, invested and distributed by the Commercial Bank and Trust Company. The BOT of the fund entered into an agreement with Philbank to act as an agent of the BOT and to hold, manage, invest and reinvest the Fund in Trust Account No. 1797 in its behalf. When RMC ceased its business operations, the BOD of Philbank decided to apply the remaining trust assets held by it in the name of the Fund against part of the RMC’s outstanding obligations. When the unpaid employees of RMC learned of the trust account, they demanded the payment of their share, which went unheeded. They, together with the members of the Fund, filed a complaint for accounting against the BOD of Philbank and its officers. The trial court ruled in favor of the BOT of RMC and was affirmed on appeal. The BOD on petition for review on certiorari under Rule 45 of the Rules of Court contends that without known claimants of the Fund for eleven (11) years since RMC closed shop, it was justifiable for petitioner to consider the Fund to have “technically reverted” to, and formed part of RMC’s assets. Hence, it could be applied to satisfy RMC’s debts to Philbank.

 

Issue:

Whether the BOD’s contention is correct.

 

Ruling:

No. The Court held that “a trust is a “fiduciary relationship with respect to property which involves the existence of equitable duties imposed upon the holder of the title to the property to deal with it for the benefit of another.” A trust is either express or implied. Express trusts are those which the direct and positive acts of the parties create, by some writing or deed, or will, or by words evincing an intention to create a trust.”

 

 

Tong vs. Go Tiat Kun 722 SCRA 623

FACTS:

Juan Tong met all his children to inform them of his intention to purchase a lot for the family’s lumber business. Since he was a Chinese citizen the title to the property will be registered to Luis, Sr., his only Filipino child among his children. Accordingly, the title was issued to Luis, Sr. Luis, Sr. predeceased Juan Tong. The heirs of the former claimed ownership over the lot by succession causing a new TCT in their names. The other children of Juan Tong discovered the breach of the trust agreement when Luis, Jr. sold his share of the lot to Fine Rock Development Corporation, which in turn sold the same to Visayas Goodwill Credit Corporation. The other children succeeded in recovering Luis, Jr.’s share of the lot. The share of the wife of Luis, Sr. was divided in favor of her children. The other children of Juan Tong filed a case to nullify the title and deeds. The trial court rendered its judgement in favor of the plaintiffs, ruling that there was an implied trust. However, the Court of Appeals reversed the set aside the trial court’s decision, ruling that there was an express trust created. The CA also ruled that even granting that an implied trust was created, the said resulting trust was converted into a constructive trust upon Luis, Sr.’s death.

 

Issue:

Whether the case falls under an express trust.

 

Ruling:

No. The Court held that “The principle of a resulting trust is 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. They arise from the nature or circumstances of the consideration involved in a transaction whereby one person thereby becomes invested with legal title but is obligated in equity to hold his legal title for the benefit of another. On the other hand, a constructive trust, unlike an express trust, does not emanate from, or generate a fiduciary relation. Constructive trusts are created by the construction of equity in order to satisfy the demands of justice and prevent unjust enrichment. 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.”