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.”