Goyanko v UCPB - Avillon
between Philippine Asia and UCPB is a mere deposit contract.
Petitioners: Joseph Goyanko Jr. as administrator of the Estate of
Joseph Goyanko Sr.
Respondents: United Coconut Planters Bank (UCPB)
DOCTRINE: A trust can be created without using the word “trust” or
“trustee”, but the mere use of these words does not automatically
reveal an intention to create a trust.
FACTS
● Joseph Goyanko Sr. invested Php2M in Philippine Asia Lending
Investors, Inc (Philippine Asia)
● The family of Goyanko Sr., represented by petitioner Joseph
Goyanko Jr. (JOSEPH) and the illegitimate family presented
conflicting claims to Philippine Asia for the release of the
investment.
● Pending the resolution of the claims, Philippine Asia deposited
the proceeds of the investment (Php1,509,318.76) with UCPB
under the name “Phil Asia: ITF (In Trust For) The Heirs of
Joseph Goyanko Sr.” (ACCOUNT)
● UCPB allowed Philippine Asia to withdraw Php1.5M.
● JOSEPH demanded UCPB to restore the amount withdraw.
UCPB refused.
● JOSEPH filed a complaint against UCBP in the RTC, arguing
that:
○ By opening the ACCOUNT, Philippine Asia established a
trust where the heirs are the beneficiaries, UCPB is the
trustee, and Philippine Asia is the trustor
○ UCPB was negligent and in bad faith when it allowed
Philippine Asia to withdraw the amount.
● UCPB argues that:
○ The ACCOUNT involves an ordinary deposit contract
with Philippine Asia which created a debtor-creditor
relationship obligating UCPB to return the proceeds to
Philippine Asia on demand.
● Lower courts found that UCPB is not liable and there is no
express trust.
ISSUE
W/N UCPB is liable for the amount withdrawn - NO
RATIO
● There is no express trust in this case, and the relationship
● Requisites of an express trust
○ Competent trustor and trustee (X)
○ Ascertainable trust res (investment)
○ Sufficiently certain beneficiaries (the heirs)
● The first requisite is lacking since UCPB was never under any
duty or was never given any power of administration over the
investment. Instead of being a trustee, UCPB was only a
depositary.
● In a letter by Philippine Asia, it begged JOSEPH to trust it with
the safekeeping of the investment proceeds and documents. If
Philippine Asia had the intention of creating a trust in favor of the
heirs, it would have relinquished any right or claim over the
proceeds in UCPB’s favor as the trustee, but Philippine Asia
never did.
● Also, the words “ITF (In Trust For) The Heirs” may have
created the impression that a trust account was created.
However, as UCPB explained, the words were only added to
distinguish this particular account with Philippine Asia’s other
accounts.
● By reason of the fiduciary nature of the bank’s relationship with
its depositors, this fiduciary relationship does not "convert the
contract between the bank and its depositors from a simple loan
to a trust agreement, whether express or implied.
● A trust can be created without using the word “trust” or “trustee”,
but the mere use of these words does not automatically reveal
an intention to create a trust.
● When UCPB allowed Philippine Asia to withdraw from the
ACCOUNT, it was merely performing its contractual obligation.
● Also, third persons who may have a right to the money
deposited, cannot hold the bank responsible UNLESS there is a
court order or garnishment.
● JOSEPH had the burden of proving the trust, which he failed to
do.
DISPOSITION WHEREFORE, in view of these considerations, we
hereby DENY the petition and AFFIRM the decision dated February 20,
2007 and the resolution dated July 31, 2007 of the Court of Appeals in
CA-G.R. CV. No. 00257. Costs against the petitioner.
CRISTOBAL v GOMEZ- BALAGTAS
Petitioners: Paulina Cristobal, et al.
Respondents: Marcelino Gomez
DOCTRINE: the acceptance by beneficiary of gratuitous trust is not
subject to the rules for the formalities of donations
FACTS:
1) Epifanio Gomez sold the property under contract of sale with
pacto de retro (right to repurchase) to Luis R. Yangco.
a) Redeemable in five years, for the sum of P2,500.
2) Gomez remained in possession in the character of a lessee.
3) The period expressed in this agreement passed without
redemption.
a) The property consolidated in Yangco, who, nevertheless,
many years later conceded to the vendor the privilege of
repurchasing.
4) Gomez was without means to effect the repurchase of the
property himself, and he therefore found it necessary to apply to
a kinsman, Bibiano Bañas, for assistance.
a) Bañas hesitated to lend Gomez the money upon his own
sole credit;
i) But told him that he would let him have the
money if his brother Marcelino Gomez and his
sister Telesfora Gomez would make themselves
responsible for the loan.
5) An agreement was reached:
a) That Bibiano Bañas should advance the sum of P7,000,
upon the personal credit of Marcelino and Telesfora
Gomez.
b) And that this money should be used to repurchase the
property in the names of Marcelino Gomez and
Telesfora Gomez, who should hold and administer the
property until the capital advanced by Bañas should be
paid off, after which the property would be returned to
Epifanio Gomez.
6) Epifanio Gomez died and Marcelino Gomez meanwhile entered
into possession of the property.
7) During this period of about twenty years Marcelino Gomez
improved the larger parcel and parcels of property quintupled in
value, being now worth about P50,000,
a) According to the estimate made by Marcelino Gomez
himself.
8) Telesfora conveyed to Marcelino her interest and share in the
three properties previously redeemed from Yangco.
9) Paulina Cristobal, widow of Epifanio, with their children, seeks to
recover the parcel of land.
10) Marcelino alleged that the heirs of Epifanio was estopped in
claiming the parcel of land because Epifanio certified in a notarial
document that Marcelino owned said lot.
11) Marcelino avers that the land was a donation, because the
money used by him to redeem the property in the end was his
own money which he had obtained from the sale of lithographic
plant.
ISSUE:
● W/N the acceptance by beneficiary of gratuitous trust is subject
to the rules for the formalities of donations. -- NO!
RATIO:
1) The properties in question, especially the salt beds, were
productive of considerable income; and Gomez admitted at the
trial that he had obtained enough from the property to reimburse
him for all outlays.
2) It is therefore evident that the Bañas loan has been fully
liquidated from the income of the property, or the equivalent, and
that the purpose of the original trust had been fully
accomplished before this action was brought.
3) The so-called partnership agreement between Marcelino Gomez
and his sister created a trust for the express purpose of
rescuing the property of Epifanio; and now that the purpose
has been accomplished, the property should be returned to his
legitimate children as provided in the agreement.
4) This bilateral contract was fully binding on both the contracting
parties; and the trial court did not err in declaring that, under the
second trial paragraph of Article 1311 NCC, the successors of
Epifanio Gomez are entitled to demand fulfillment of the trust.
5) Martinez v. Grano: a person who, before consolidation of
property in the purchaser under a contract of sale with pacto de
 retro, agrees with the vendors to buy the property and administer conveyance. In other respects the judgment is affirmed. So ordered, with
it till all debts constituting an encumbrance thereon shall be paid, costs against the appellant.
after which the property shall be turned back to the original
owner, is bound by such agreement; and upon buying in the
property under these circumstances such person becomes in
effect a trustee and is bound to administer the property in this
character. The same rule is applicable in the case before us.

6) It is claimed that the trust agreement was kept secret from

Epifanio and that having no knowledge of it, he could not have
accepted it before the stipulation was revoked.

7) Much energy has been to demonstrate that, if Epifanio Gomez at

any time had any right in the property by virtue of the Exhibit A,
such right could only be derived from the aspect of Exhibit A as a
donation, and that, inasmuch as the donation was never
accepted by Epifanio Gomez in a public document, his supposed
interest therein is unenforceable.

8) But this, in our opinion, is not a tenable hypothesis. The

partnership agreement should not be viewed in the light of an
intended donation, but as an express trust.

9) The trust agreement provides that after the capital employed and
other expenses shall have been covered, the property shall be
returned to Epifanio Gomez or his legitimate children.

10) This contemplated the action to be taken when the debt should
be fully liquidated, something that did not occur in this case until
1918. But Epifanio Gomez died in 1908.

11) It is evident that misbehavior on the part of Epifanio Gomez

during the year or more that he lived after the trust agreement
was made could not be attributed as a ground of forfeiture to his
legitimate children ten years later, especially as no step had ever
been taken in the life of Epifanio Gomez to defeat his rights
under the trust on account of his alleged misbehavior.

DISPOSITION: The appealed judgment will therefore be modified by

incorporating therein a declaration of ownership in favor of the plaintiffs
and by eliminating the requirement for the specific execution of a
RODOLFO MORALES v. COURT OF APPEALS - MEDEL
Petitioners: RODOLFO MORALES, represented by his heirs, and
PRISCILA MORALES
Respondents: COURT OF APPEALS RANULFO ORTIZ, JR., and
ERLINDA ORTIZ
FACTS:
1. Spouses Ortiz claim that they are the absolute and exclusive
owners of the premises in question (a parcel of land and a two-
storey residential house). Spouses Ortiz claim that they
purchased the property from Celso Avelino.
2. The property was purchased by Celso Avelino when he was still
a bachelor and a city fiscal of Calbayog City. It was shown that
he purchased the same from Mendiola and Bartolome through
an "Escritura de Venta."
3. After the purchase, Celso Avelino caused the following: (1)
transfer of the property’s title in his name; (2) transfer of tax
declarations in his name; (3) a survey of the premises with the
Bureau of Lands; and (4) built a residential house thereon.
4. Celso Avelino took his parents, Rosendo Avelino and Juana
Ricaforte, and his sister, Aurea, to live in his property until their
parents’ deaths.
5. Celso Avelino then became an Immigration Officer and later a
Judge of the Court of First Instance in Cebu. Consequently, he
left his property under the care of his sister, Aurea.
6. Without his knowledge, his nephew Rodolfo Morales (a son of
his other sister, Priscilla) constructed a beauty shop on the
premises in question.
7. Celso Avelino thereafter sold the property to his neighbors, the
Spouses Ortiz. The Spouses Ortiz were encouraged by Celso
Avelino to buy the property from him rather than to go to
somebody else that they do not now. Celso Avelino also
promised that he will vacate the premises as soon as his uncle
does so.
8. Hence, Spouses Ortiz and Celso Avelino executed a deed of
absolute sale.
9. Rodolfo Morales (nephew), however, refused to vacate or
demolish his beauty shop, unless he is reimbursed for P35,000.
Morales also occupied the residential building on the property, by
taking in paying boarders.
10. Rodolfo Morales contends that his grandparents Rosendo
Avelino and Juana Ricaforte (parents of Celso Avelino)
originally owned the premises in question. He further claims
that Rosendo (grandfather of Rodolofo; father of Celso
Avelino) merely entrusted Celso Avelino with the money to
purchase the property as he was their only son. Hence,
Rodolfo Morales and his mother, Priscila Morales, based
their contention on an implied trust theory.
ISSUE:
A. Whether or not Celso Avelino holds the property as a mere
trustee. NO.
B. Whether or not Rodolfo Morales was a builder in good faith. NO.
RATIO:
AS TO THE ISSUE ON WHETHER CELSO AVELINO HOLDS THE
PROPERTY AS A MERE TRUSTEE
1. Trusts are either express or implied.
a. Express trusts are created by the intention of the trustor
or of the parties.
b. Implied trusts come into being by operation of law,
either through implication of an intention to create a
trust as a matter of law or through the imposition of
the trust irrespective of and even contrary to, any
such intention.
2. Implied trusts are either resulting or constructive trusts.
Constructive trusts are created by the construction of equity in
order to satisfy the demands of justice and prevent unjust
enrichment. Resulting trusts are 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 of
circumstances of the consideration involved in a transaction
whereby one person becomes invested with legal title but is
obligated in equity to hold his legal title for the benefit of another.
3. A resulting trust in exemplified by Article 1448 of the Civil Code:
"There is an implied trust when property is sold, and the legal
estate is granted to one party but the price is paid by another
having the beneficial interest of the property. The former is the
trustee, while the latter is the beneficiary. However, if the
person to whom title is conveyed is a child, legitimate or
 illegitimate, of the one paying the price of the sale, no trust
is implied by law, it being disputable presumed that there is 1. The Court ruled in the negative. Article 448 applies only when
gift in favor of a child.” the builder, planter or sower believes he has the right to so build,
4. The last sentence of Article 1448 (sometimes referred to as plant or sow because he thinks he owns the land or believes
a purchase money resulting trust) gives one of the himself to have a claim of title.
recognized exceptions to the establishment of an implied 2. In the instant case Rodolfo Morales knew from the very
resulting trust. (The other two would be: when actual contrary beginning that he was not the owner of the land. He alleged in
intention is proved & when purchase is made in violation of an his Answer that the land was acquired by his grandparents
existing statute and in evasion of its express provision.) Rosendo Avelino and Juana Ricaforte and he constructed the
5. As a rule the burden of proving the existence of trust is on shop building in 1979 upon due permission and financial
the party asserting its existence, and such proof must be assistance from his mother, Priscila A. Morales and from his
clear and satisfactorily show the existence of trust. While aunts: Trinidad A. Cruz and Concepcion A. Peralta, and with the
implied trusts may be proved by oral evidence, evidence must be knowledge and consent of his uncle Celso Avelino.
trustworthy and received by the courts with extreme caution.
6. On this basis alone, Rodolfo and Priscilla Morales' claim must DISPOSITION: WHEREFORE, premises considered, except as to the
fail. Rodolfo and Priscilla relied merely on testimonial evidences award of moral damages, attorneys fees and litigation expenses which
which are self-serving. Proof of the Spouses Ortiz's lawful are hereby DELETED, the judgment of the respondent Court of Appeals
acquisition of the property through Celso Avelino’s ownership on is AFFIRMED.
the other hand was supported by documentary evidences such
as: the deed of absolute sale and tax declarations. Even
testimonies of Celso's other sisters prove that they believe that
he is the true owner of the property. The fact that the other
siblings did not intervene in this case to protect their right and
that upon the death of their parents no extra-judicial partition
occurred further strengthens Celso's ownership. Moreover,
assuming that their claim that Celso was a mere trustee is
true, it still falls under the exemption under the last
sentence of Article 1448 which states that if the person to
whom the title conveyed is a child, there is a presumption
that it is a gift in favor of the child.
7. Another crucial evidence considered by the Court was the sworn
Confirmation of one of the sisters of Celso Avelino, Concepcion
Peraltas. In her affidavit, she explcitly stated that: “That my
aforenamed brother [Celso Avelino], during the time when he
was City Fiscal of Calbayog City and still a bachelor, out of his
own money, bought the parcels of land x x x Likewise, out of his
own money, he constructed a residential building on the lot
which building is made of strong materials.”
8. Rodolfo Morales (nephew) failed to discharge the burden to
prove the existence of an implied trust.
Ramos v Ramos
AS TO THE ISSUE WHETHER RODOLFO MORALES WAS A G.R. No. L-19872
BUILDER IN GOOD FAITH. December 3, 1974

Petitioner :EMILIANO B. RAMOS, ET AL.,
Respondents: GREGORIA T. RAMOS, ET AL.
FACTS
1. Martin Ramos died leaving a considerable real estate
which includes Hacienda Calaza and Hacienda Ylaya both
located in Himamaylay, Negros Occidental. Hacienda
Calaza consists of sugar land, palay land and nipa
groves with an area of 400 hecatares.
2. All the children of Martin Ramos, Legitimate and Natural,
lived in Hacienda Ylaya.
3. Upon the death of Martin Ramos, the properties were
left under the administration of his brother, Rafael
Ramos.
4. He turned over Hacienda Ylaya to Agustin Ramos and
Hacienda Calaza to Jose Ramos.
5. All the children continued to live in Hacienda Ylaya. All
their expenses were supported by the proceeds of the
two haciendas.
6. Without the knowledge of other heirs, a partition was
submitted to the CFI for the settlement of the intestate
estate of Martin Ramos and his wife. – P74,985
7. Timoteo Zayco was appointed as the guardian of the five
minor heirs.
8. ½ will be shared by the legitimate children and 1/3 by
the natural children
9. Plaintiffs aver that they did not know of any partition
proceeding, denied receiving any amount from the
partition.
10. Plaintiffs only discovered later on that the property
administered by their elder brother Jose had a Torrens
Title in the name of his widow, Gregoria, and daughter,
Candida
11. Plaintiffs filed with the CFI to secure the participation of
them in the partition of Hacienda Calaza. The
defendants denied the existence of a trust and
interposed prescription as a defense because the
partition was approved in 1939 and the present petition
was only filed 1956.
· CFI dismissed the complaint
ISSUE
WON there exist a trust between the wife of Jose Ramos who is
named in the title and the other natural children of Martin
Ramos?--NO
Held:
Different rules on trust
1) A trustee cannot acquire by prescription the ownership
of property entrusted to him
2) An action to compel a trustee to convey property
registered in his name in trust for the benefit of the
cestui qui trust does not prescribed
3) the defense of prescription cannot be set up in an action
to recover property held by a person in trust for the
benefit of another
4) property held in trust can be recovered by the
beneficiary regardless of the lapse of time
5) possession of a trustee is not adverse. Not being
adverse, he does not acquire by prescription the
property held in trust.
6) The rule of imprescriptibility of the action to recover
property held in trust may possibly apply to resulting
trusts as long as the trustee has not repudiated the trust
7) Acquisitive prescription may bar the action of the
beneficiary against the trustee in an express trust for
● the recovery of the property held in trust where
 ● the trustee has performed unequivocal acts of
repudiation amounting to an ouster of the cestui
qui trust;
● such positive acts of repudiation have been
made known to the cestui qui trust and
● the evidence thereon is clear and conclusive
8) The plaintiffs did not prove any express trust in this
case. The expediente of the intestate proceedin,
particularly the project of partition, the decision and the
manifestation as to the receipt of shares negates the
existence of an express trust.
9) public documents prove that the estate of Martin Ramos
was settled in that proceeding and that adjudications
were made to his seven natural children.
10) the eight lots involved were claimed by the spouses
Jose Ramos to the exclusion of the plaintiffs.
11) After the death of Jose Ramos, the said lots were
adjudicated to his widow and daughter. In 1932
Gregoria T. Ramos and Candida Ramos leased the said
lots to Felix Yulo.
12) Yulo in 1934 transferred his lease rights over Hacienda
Calaza to Juan S. Bonin and Nestor Olmedo, the
husband of plaintiff Atanacia Ramos
13) Bonin and Olmedo in 1935 sold their lease rights over
Hacienda Calaza to Jesus S. Consing
14) Those transactions prove that the heirs of Jose
Ramos had repudiated any trust which was
supposedly constituted over Hacienda Calaza in
favor of the plaintiffs. Statute of limitations
applies in this case.

Dispositive Portion :
WHEREFORE, the trial court's judgment is affirmed with the clarification
that defendants' counterclaim is dismissed. No costs.
PACHECO v ARRO ET AL. - SAN DIEGO 22) This is because in an action for specific performance, the party
to be compelled to perform is the owner of property sought to be
conveyed.
Petitioners: DOLORES PACHECO, IN HER CAPACITY AS
ISSUE:
GUARDIAN OF THE MINORS CONCEPCION, ALICIA, AND
● W/N the heirs of Regalado should convey the lands of Regalado
HERMINIA YULO
to Arro et al. - YES
Respondents: SANTIAGO ARRO ET AL., RESPONDENTS.
DEMETRIA FIRMEZA, ACCOMPANIED BY HER HUSBAND,
RATIO:
BASILIO RIVERA
12) The juridical concept of a trust involves a fiduciary relation
between the trustee and the cestui que trust as regards certain
DOCTRINE: When the claim to the lots in the cadastral case was
property—real, personal, funds or money, or choses in action.
withdrawn, relying upon the promise by landowner to convey the lands
This must not be confused with an action for specific
made in open court, a trust or a fiduciary relation was created between
performance.
the one who withdrew the claim and the one who made the promise.
13) When the claim to the lots in the cadastral case was withdrawn
by Arro et al., relying upon the promise Regalado made in open
FACTS: court, a trust or a fiduciary relation between Regalado and Arro
12) Arro et al. and Regaldo were parties to a cadastral case. They et al. was created.
each have a claim over a parcel of land 14) The trustee cannot invoke the statute of limitations to bar the
13) but Regalado, promised in open court that after the change of action and defeat the right of the cestuis que trust (beneficiary).
Zamora and Quennon streets into T. Yulo and G. Regalado 15) Therefore Arro et al. are entitled to the lands promised by
streets, Regalado would convey and assign the lots to Arro et al. Regalado.
14) Because of this promise, Arro et al. withdrew their claims
15) The cadastral court then decreed the registration of the land in DISPOSITION: The judgment under review is affirmed, with costs
the name of Regalado. against the petitioners.
16) Regalado eventually complied with his promise by executing
deeds of donation or assignment
17) In the present case, minors Concepcion, Alicia and Herminia
Yulo (represented by Pacheco) are daughters of Regalado. They
are praying to execute the deeds of assignment in favor of them.
18) Pacheo argues that the promise cannot prevail over the final
decree of the cadastral court holding Regalado to be the owner
of the lots
19) On the other hand, Arro et al. argues that a trust was created
between them and Regalado. They are the beneficiaries, while
Regalado was the trustee.
20) Arro et al. asserts that a trustee does not have title to the
property which is the subject of the trust, because title to such
property is vested in the cestui que trust (beneficiary).
21) If Regalado was a trustee, he or his successors-in-interest could
not and cannot be compelled in an action for specific
performance to convey or assign the property—the subject of the
trust. (labo neto)
MINDANAO DEV’T AUTHORITY v CA - SIQUIAN

Petitioners: Mindanao Development Authority (now the Southern
Philippines Development Administration)
Respondents: Court of Appeals and Francisco Ang Bansing
DOCTRINE:
FACTS:
● It is not disputed that Francisco Ang Bansing was the owner of a
big tract of land with an area of about 300,000 sq.m., situated in
Barrio Panacan Davao City.
● February 25, 1939, Ang Bansing sold a portion thereof, with an
area of about 5 hectares to Juan Cruz Yap Chuy The contract
provided, among others, the following:
That I hereby agree to work for the titling of the entire
area of my land under my own expenses and the
expenses for the titling of the portion sold to me shall be
under the expenses of the said Juan Cruz Yap Chuy.
● After the sale, the land of Ang Bansing was surveyed and
designated as Lot 664-B, Psd-1638. Lot 664-B was further
subdivided into five (5) lots
● The portion sold to Juan Cruz Yap Chuy shortened to Juan Cruz,
was designated as Lot 664B-3, with an area of 61.107 square
meters, more or less.
● June 15-17 and December 15, 1939, a cadastral survey was
made and Lot 664-B-3 was designated as Lot 1846-C of the
Davao Cadastre.
● December 23, 1939, Juan Cruz sold Lot 1846-C to the
Commonwealth of the Philippines for the amount of P6,347.50.
On that same day, Juan Cruz, as vendor, and C.B. Cam and
Miguel N. Lansona as sureties, executed a surety bond in favor
of the vendee to guarantee the vendor's absolute title over the
land sold.
● Cadastral survey plan was approved by the Director of Lands on
July 10, 1940.
● March 7, 1941, Original Certificate of Title No. 26 was issued in
the means of Victoriana Ang Bansing, Orfelina Ang Bansing and
Francisco Ang Bansing as claimants of the land, pursuant to
Decree No. 745358 issued on July 29, 1940. On March 31,
1941, OCT No. 26 was cancelled pursuant to a Deed of
Adjudication and TCTNo. 1783 was issued in the name of
Francisco Ang Bansing.
● February 25, 1965, the President of the Philippines issued
Proclamation No. 459, transferring ownership of certain parcels
of land situated in Sasa Davao City, to the Mindanao
Development Authority, now the Southern Philippines
Development Administration, subject to private rights, if any.
● Lot 1846-C, the disputed parcel of land, was among the parcels
of land transferred to the Mindanao Development Authority in
said proclamation.
● March 31, 1969, Atty. Hector L. Bisnar counsel for the Mindanao
Development Authority, wrote Ang Bansing requesting the latter
to surrender the Owner's duplicate copy of TCT No. 2601 so that
Lot 1846-C could be formally transferred to his client but Ang
Bansing refused.
● Consequently, on April 11, 1969, the MDA filed a complaint
against Francisco Ang Bansing before the CFI of Davao City, for
the reconveyance of the title over Lot 1846-C, alleging, among
others, the following:
ISSUE:
1. WON Francisco Ang Bansing as vendor and the one who
worked to secure the title of his entire tract of land which
included the portion sold by him to Juan Cruz Yap Chuy acted
in the capacity of and/or served as trustee for any and all
parties who become successor-in-interest to Juan Cruz Yap
Chuy.
2. WON Ang Bansing was bound and obligated to give, deliver
and reconvey to Juan Cruz Yap Chuy and/or his successor-
in-interest the title pertaining to the portion of land sold and
conveyed by him to Juan Cruz Yap Chuy by virtue of the
deed of sale and his affidavit.
RATIO:
No express trust had been created between Ang Banging and Juan
Cruz over Lot 1846-C of the Davao Cadastre.
"Trusts are either express or implied. Express trusts are created by
the intention of the trustor or of the parties. Implied trusts come into
being by operation of law."
It is fundamental in the law of trusts that certain requirements must
exist before an express trust will be recognized. Basically, these
elements include:

1. Competent trustor and trustee,
2. Ascertainable trust res, and sufficiently certain beneficiaries.
Stilted formalities are unnecessary, but nevertheless each of
the above elements is required to be established, and, if any
one of them is missing, it is fatal to the trusts.
3. Present and complete disposition of the trust property,
notwithstanding that the enjoyment in the beneficiary will take
place in the future.
4. The purpose be an active one to prevent trust from being
executed into a legal estate or interest, and one that is not in
contravention of some prohibition of statute or rule of public
policy.
5. Some power of administration other than a mere duty to
perform a contract although the contract is for a third-party
beneficiary.
6. Declaration of terms which must be stated with reasonable
certainty in order that the trustee may administer, and that the
court, if called upon so to do, may enforce, the trust.
In this case, the herein petitioner relies mainly upon the following
stipulation in the deed of sale executed by Ang Bansing in favor of
Juan Cruz to prove that an express trust had been established with
Ang Bansing as the settlor and trustee and Juan Cruz as the cestui
que trust or beneficiary:
That I hereby agree to work for the titling of the entire area of
my land under my own expenses and the expenses for the
titling of the portion sold to me shall be under the expenses of
said Juan Cruz Yap Chuy.
The above-quoted stipulation, however, is nothing but a condition that
Ang Bansing shall pay the expenses for the registration of his land
and for Juan Cruz to shoulder the expenses for the registration of the
land sold to him. The stipulation does not categorically create an
obligation on the part of Ang Bansing to hold the property in trust for
Juan Cruz. Hence, there is no express trust.
It is essential to the creation of an express trust that the settlor
presently and unequivocally make a disposition of property and make
himself the trustee of the property for the benefit of another.
In case of a declaration of trust, the declaration must be clear and
unequivocal that the owner holds property in trust for the purposes
named.
While Ang Bansing had agreed in the deed of sale that he will work
for the titling of "the entire area of my land under my own expenses,"
it is not clear therefrom whether said statement refers to the 30-
hectare parcel of land or to that portion left to him after the sale. A
failure on the part of the settlor definitely to describe the subject-
matter of the supposed trust or the beneficiaries or object thereof is
strong evidence that he intended no trust.
The intent to create a trust must be definite and particular. It must
show a desire to pass benefits through the medium of a trust, and not
through some related or similar device.
Clear and unequivocal language is necessary to create a trust and
mere precatory language and statements of ambiguous nature, are
not sufficient to establish a trust. As the Court stated in the case of
De Leon vs. Packson,
a trust must be proven by clear, satisfactory and convincing evidence;
it cannot rest on vague and uncertain evidence or on loose, equivocal
or indefinite declarations. Considering that the trust intent has not
been expressed with such clarity and definiteness, no express trust
can be deduced from the stipulation aforequoted.
Nor will the affidavit executed by Ang Bansing on April 23, 1941, be
construed as having established an express trust. As counsel for the
herein petitioner has stated, "the only purpose of the Affidavit was to
clarify that the area of the land sold by Ang Bansing to Juan Cruz Yap
Chuy is not only 5 hectares but 61,107 square meters or a little over
six (6) hectares."
That no express trust had been agreed upon by Ang Bansing and
Juan Cruz is evident from the fact that Juan Cruz, the supposed
beneficiary of the trust, never made any attempt to enforce the
alleged trust and require the trustee to transfer the title over Lot 1846-
C in his name.
Despite numerous transfers of portions of the original 30-hectare
parcel of land of Ang Bansing to Juan Cruz and the issuance of
certificates of title in the name of Juan Cruz, the latter never sought
the transfer of the title to Lot 1846-C in his name. For sure, if the DISPOSITION: WHEREFORE, the petition should be, as it is hereby,
parties had agreed that Ang Bansing shall hold the property in trust DENIED. No costs.
for Juan Cruz until after the former shall have obtained a certificate of
title to the land, the latter would have asked for the reconveyance of
the title to him in view of the surety bond executed by him in favor of
the Commonwealth Government wherein he warrants his title over
the property. The conduct of Juan Cruz is inconsistent with a trust
and may well have probative effect against a trust.

But, even granting, arguendo, that an express trust had been

established, as claimed by the herein petitioner, it would appear that
the trustee had repudiated the trust and the petitioner herein, the
alleged beneficiary to the trust, did not take any action therein until
after the lapse of 23 years.
Needless to say, only an implied trust may have been impressed
upon the title of Ang Banging over Lot 1846-C of the Davao Cadastre
since the land in question was registered in his name although the
land belonged to another. In implied trusts, there is neither promise
nor fiduciary relations, the so-called trustee does not recognize any
trust and has no intent to hold the property for the beneficiary." It
does not arise by agreement or intention, but by operation of law.
Thus, if property is acquired through mistake or fraud, the person
obtaining it is, by force of law, considered a trustee of an implied trust
for the benefit of the person from whom the property comes.

If a person obtains legal title to property by fraud or concealment,

courts of equity will impress upon the title a so-called constructive
trust in favor of the defrauded party.
TANSENGUAN and CO. v. PHILTRUST--TORIO
There is also a constructive trust if a person sells a parcel of land and
thereafter obtains title to it through fraudulent misrepresentation. Petitioners: TAN SENGUAN & CO., INC
Respondents: PHILIPPINE TRUST COMPANY
Such a constructive trust is not a trust in the technical sense and is
prescriptible; it prescribes in 10 years. Here, the 10-year prescriptive DOCTRINE: When the transaction at hand could have been
period began on March 31, 1941, upon the issuance of Original entered into by a trustee either as such or in his individual
Certificate of Title No. 26 in the names of Victoriana Ang Bansing capacity, then it must be clearly indicated that the liabilities
Orfelina Ang Bansing and Francisco Ang Banging. From that date up arising therefrom shall be chargeable to the trust estate,
to April 11, 1969, when the complaint for reconveyance was filed, otherwise, they are due from the trustee in his personal capacity.
more than 28 years had passed. Clearly, the action for reconveyance
had prescribed.
FACTS
1. In a deed of trust, Mindoro Sugar Company and PhilTrust entered
into a trust agreement where PhilTrust (trustee) will hold in trust the real
estate, franchises, and personal property of Mindoro Sugar
Company(trustor). The trust was created to protect protect certain bonds
to be issued by the Mindoro Sugar Company and to be purchased by the
Philippine Trust Company.
2. Later, TanSenguan & Co. secured a judgment against the Mindoro
Sugar Company; and sold, transferred, and assigned that judgment to
PhilTrust.
3. In the contract between TanSenguan and PhilTrust, PhilTrust was
referred to as 'trustee' (of Mindoro Sugar Company). One of the
stipulations in the contract states: "xxx 2. The Philippine Trust Company,
Trustee, agrees that should the Mindoro Sugar Co., be sold, assigned or
its ownership transferred in any manner whatsoever to any person or
entity including the Philippine Trust Company, Trustee, itself, it shall pay
to Tan Sen Guan & Co., an additional sum of ten thousand (10,000)
pesos, said amount to be paid immediately upon the perfection of said
sale or transfer and irrespective to the amount which might be paid for it."
4. The properties of Mindoro Sugar Co. were sold at an auction to the
Roman Catholic Archbishop of Manila so TanSenguan is claiming its
Php10K, which was stated in their agreement. PhilTrust refused to pay.
TanSenguan sued PhilTrust to collect the Php10K.
5. CFI ruled in favor of PhilTrust and absolved it from paying the Php10.
CFI said that in the contract PhilTrust was bound only as a trustee and
not as an individual. TanSenguan appealed the CFI decision, hence the
case at bar.
ISSUE: Is PhilTrust personally liable for the Php10K?-- YES
RATIO:
1. While in the contract in question the Philippine Trust Company was
usually referred to as trustee, nowhere in the deed of trust between
Mindoro Sugar Co and PhilTrust was PhilTrust given any authority to
enter into a contract such as is here presented. The Philippine Trust
Company held the legal title to the properties of the Mindoro Sugar
Company to protect the bond holders. So far as the Philippine Trust
Company was concerned, it was not authorized to manage the affairs of
the Mindoro Sugar Company or to enter into contracts in its behalf.
2. Even if the contract had been authorized by the trust indenture, the
Philippine Trust Company in its individual capacity would still be
responsible for the contract as there was no express stipulation that the
true estate and not the true trustee should be held liable on the contract
in question.
3. Not only is there no express stipulation that the trustee should not be
held responsible but in the "Wherefore" clause of the contract, the
judgment was expressly assigned in favor of the Philippine Trust
Company, not the Philippine Trust Company, trustee. TanSenguan can
go after PhilTrust on its contract and has no claim against either the
Mindoro Sugar Company or the trust estate.
RULING:The judgment of the Court of First Instance is therefore
reversed, and a judgment will be entered in favor of plaintiff- appellant
and against defendant-appellee in the sum of P10,000, with legal interest
from the 8th of October, 1931, until paid, and with costs in both instances
against defendant-appellee. So ordered
GOVERNMENT v ABADILLA - VILLAMOR
Petitioners: Government of the Philippine Islands
Respondents: Anastacia Abadilla et. al., Municipality of Tayabas et.
al., Maria Palad et. al.
DOCTRINE: In order that a trust may become effective there must,
of course, be a trustee and a cestui que trust. In regard to private
trusts it is not always necessary the cestui que trust should be
named, or even be in esse (in actual existence) at the time the trust
is created in his favor. In charitable trusts such as the one here
under discussion, the rule is still further relaxed.
FACTS:
 23) In 1982, A holographic will by executed by Luis Palad where he
granted his wife, Dorotea Lopez, the right to use and possess a
coconut land up until the day she dies or remarries. Upon his
wife’s death or remarriage, the land shall be donated to a
secondary school in Tayabas. It is stipulated in the will that in the
event that his wife remarries or dies, the will shall be delivered to
the Ayuntamiento of Tayabas, should there be any or to the civil
governor of the province in order to cause the manager thereof
to comply with Palad’s wishes for the good of many and the
welfare of the town.
24) After the death of Palad, Dorotea remained in possession of the
land. In 1900, Dorotea married Calixto Dolendo. 3 years after,
the collateral heirs of Palad brought an action against Dorotea
for the partition of the lands on the ground that by reason of her
second marriage, she had lost the right to the exclusive use and
possession of the lands.
25) During the pendency of the action, an agreement was arrived at
whereby the parties resolved to turn over Lot Nos. 3464 and
3469 to the municipality as its share and the remaining portion of
the land, Lot No. 3470 was left in the possession of Dorotea.
26) The collateral heirs, however, are contending that the trust
instituted in the will was ineffective because in order for a trust to
become effective, there must be a trustee and a cestui que
trust1. The heirs are claiming that there is neither in this case
because there is no ayuntamiento, gobernador civil and no
secondary school in Tayabas
ISSUE:
● W/N the trust instituted in the will was effective
RATIO:
16) Yes. The court ruled that testamentary dispositions must be
liberally construed as to give effect to the intention of the
testators revealed by the will itself.
17) It is clear that the testator proposed to create a trust for the
benefit of the secondary school to be established in the town of
Tayabas, naming as trustee the ayuntamiento or if there be no
such, the civil governor of the province.
1
He who has a right to a beneficial interest in and out of an estate the
legal title to which is vested in another.
18) The Governor of Tayabas, as the successor of the Civil
Governor under the Spanish period, is the trustee in the case at
bar.
19) In private trusts, it is not always necessary that the cestui
que trust be named or even be in esse2 at the time the trust
is created in his favor. In charitable trusts, the rule is further
relaxed.
20) If the trustee holds the legal title and the devise is valid, the
natural heirs of the deceased have no remaining interest in the
land except their right to The reversion in case the devise for
some reason should fail, an event which has not yet taken place.
21) It seems quite evident that the intention of Palad was to have the
income of the property accumulate for the benefit of the
proposed school until it is established.
DISPOSITION: The judgment appealed from is affirmed in regard to lots
Nos. 3464 and 3469 and is reversed as to lot No. 3470, and it is ordered
that said lot No. 3470, be registered in the name of the claimant Dorotea
Lopez. No costs will be allowed. So ordered.
CHU, JR V CAPARAS - ZABALA
Petitioners: RICARDO CHU, JR. and DY KOKENG.
Respondents: MELANIA CAPARA.S and SPOUSES RUEL and
HERMENEGILDA PEREZ
DOCTRINE: A trust by operation of law is the right to the beneficial
enjoyment of a property whose legal title is vested in another. A
trust presumes the existence of a conflict involving one and the
same property between two parties, one having the rightful
ownership and the other holding the legal title. There is no trust
created when the property owned by one party is separate and
distinct from that which has been registered in another’s name.
2
In actual existence

Facts:
1. At the root of the case is a parcel of land with an area of 26,151
square meters (subject property) located in Silang, Cavite, originally
owned and registered in the name of Miguela Reyes.
2. The petitioners’ evidence showed that the subject property was
previously part of the 51k-square meter tract of land owned by
Miguela. Miguela sold to Caparas half of the said land, specifically the
eastern portion thereof. Miguela retained for herself the western
part.
● The sale was evidenced by a “Kasulatan ng Tuluyang Bilihan
ng Lupa"
3. More than 14 years later, Caparas caused the preparation of a
consolidated survey plan under her name for several parcels of land
located at Silang-Carmona, Cavite.
● Under the Caparas survey plan, the parcel of land supposedly
retained by Miguela (the western part) was erroneously
transferred to the eastern portion of the original 51k-square
meter tract of land.
● As a result of the error, the subject property was included in
the consolidated parcels of land owned by Caparas. The
petitioners asserted that Caparas admitted the wrongful
inclusion of the subject property owned a "Sinumpaang
Salaysay ng Pagpapatotoo."
4. Thereafter, Caparas sold to the spouses Perez the consolidated
parcels of land in a deed entitled "Kasulatan ng Bilihang Tuluyan",
allegedly including the erroneously included land of Miguela.
5. Miguela then sold the subject property to the petitioners for which
they secured a tax declaration.
● Considering the alleged error in the Caparas survey plan, the
petitioners demanded the reconveyance of the subject
property from Caparas and the spouses Perez, who refused
to reconvey the subject property.
6. The RTC ruled initially ruled in petitioners’ favor but refused to
approve, for lack of authority, the new survey plan for the subject
property that the petitioners submitted. However, on motion of the
Sps Perez, it set aside its earlier decision and dismissed the
complaint.
● The RTC found that Chu, one of the petitioners, admitted
during cross-examination that the parcel of land sold to them
was different from the subject property.
7. The dismissal was affirmed by the CA.
8. In the instant case, the petitioners assert that the CA disregarded
the evidence of Caparas’ "Sinumpaang Salaysay ng
Pagpapatotoo"on Miguela’s ownership of the subject property and
Caparas’ admission that she was merely a trustee thereof. The
petitioners also assert that the CA should have also considered that
the spouses Perez, as Caparas’ successors-in-interest, are also
trustees in the subject property.
Issues:
1. whether the parcel of land sold to the petitioners is the subject
property included in the consolidated parcels of land sold to the
spouses Perez.
2. whether or not Caparas held the western part of Miguela’s land in
trust
Held: NO (for both)
1. There was no enroachment for the ff reasons:
First, the records undoubtedly established that the subject property
was not the parcel of land that the petitioners purchased from
Miguela.
● We note that the Caparas survey plan was used in identifying
the property purchased by the petitioners from Miguela. The
deed of sale between them showed what the petitioners
purchased from Miguela referred to another parcel of land
designated as Lot No. 3 in the Caparas survey plan, while the
subject property (western part) was designated as Lot No. 1
of the same plan.
Significantly, Chu also admitted that the parcel of land they
purchased from Miguela was different from the subject property.
The following pieces of evidence adduced by the petitioners also
support the above conclusion:
1. Deed of Absolute Sale between Miguela and the petitioners
which described the parcel of land sold by Miguela to the
petitioners as Lot No. 3
2. The tax declaration under Miguela’s name for the year
1996 involving Lot No. 3
3. The tax declaration under the petitioners’ name for the year
1996 likewise covering Lot No.
In contrast with these pieces of evidence, the spouses Perez’s
Original Certificate of Title covering the subject property and their
actual occupation of this property since 1991 duly established their
ownership of this property. Clearly then, there was no encroachment
by the spouses Perez since they were the owners of the subject
property.
WHEREFORE, in view of these considerations, we hereby DENY
the petition and accordingly AFFIRM the decision dated August
7, 2006 and the resolution dated November 8, 2006 of the Court
of Appeals in CA-G.R. CV No. 67243.Costs against the
petitioners.

2. We also see no trust, express or implied, created between the

petitioners and the spouses Perez over the subject property.

A trust by operation of law is the right to the beneficial enjoyment of a

property whose legal title is vested in another. A trust presumes the
existence of a conflict involving one and the same property between
two parties, one having the rightful ownership and the other holding
the legal title.
· There is no trust created when the property owned by one
party is separate and distinct from that which has been
registered in another’s name.

In this case, the Caparas survey plan and the deed of sale between
the petitioners and Miguela showed that the parcel of land sold to the
petitioners is distinct from the consolidated parcels of land sold by
Caparas to the spouses Perez.

Although we are aware of an apparent discrepancy between the

boundary description of the parcel of land described in the
2"Kasulatan ng Tuluyang Bilihan ng Lupa" executed between the
several parties, on the one hand, and the boundary description of the
consolidated parcels of land stated in the Caparas survey plan and
the spouses Perez’s title on the other hand, we find the discrepancy
more imagined than real.
· This perceived discrepancy does not help the petitioners’
cause in light of the evidence that the deed of sale between
the petitioners and Miguela used the Caparas survey plan
that clearly identified the parcel of land sold to them was
different from the subject property.

Another perspective, too, that must be considered is Miguela’s act in

selling to the petitioners Lot No. 3 using the Caparas survey plan,
which can be regarded as a ratification of any perceived error under
the circumstances.