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.”