TRUST

A trust is a fduciary relationship with respect to property which involves the existence of
equitable duties imposed upon the holder of the property to deal with it for the beneft of
another. !"uan# v $A% citin# Tolentino&
Trust is the le#al relationship between one person havin# an equitable ownership in
property and another person ownin# the le#al title to such property% the equitable
ownership of the former entitlin# him to the performance of certain duties and the
exercise of certain powers by the latter. !Tolentino&
Trust is the ri#ht to the benefcial en'oyment of property% the le#al title to which is vested
in another. !(aras&
)t has three requisites*
+. A trustor , the one who establishes the trust
-. A trustee , the one in whom confdence is reposed as re#ards to property% for
the beneft of another
.. A benefciary , the one for whose beneft the trust is created !but trustor and
benefciary may be the same person/ benefciary is also referred to as cestui
que trust&
$haracteristics of trust* !Tolentino&
+. )t is a relationship
-. )t is a relationship of a fduciary character
.. )t involves property
0. )t involves the existence of equitable duties imposed upon the le#al owner to
deal with it for the beneft of another
1. )t arises as a result of a manifestation of intent to create the relationship !does
not apply in case of constructive trusts% which arise by operation of law&
$AS2*
Salao v Salao*
The plainti3s% all relatives of the defendants% instituted action for a piece of land in 4ataan%
alle#in# it came from common funds and that there was an oral partition made earlier.
They alle#ed that the defendants% who became administrators of property in 5alabon
inherited from their #randparents% used common funds to buy property elsewhere. The
court ruled that it was not proven that a trust had been created*
6o documentary evidence was presented to prove an express trust% and Art.
+00. says parole evidence cannot be used to prove an express trust concernin#
realty
6either can the evidence prove an implied trust. 7hile an implied trust may be
proven by oral evidence% it must be TRUST78RT"9.
neither was it proven that there was fraud or mista:e% enou#h to create a
constructive trust
T78 ;)6<S 8= TRUST
+. 2xpress
$reated by the parties% or by the intention of the trustor
2xpress trusts do not prescribe unless repudiated
-. )mplied
$reated by operation of law
The rule on implied trusts re#ardin# prescription is confusin#. )n
#eneral% resultin# trusts do not prescribe% but constructive trusts do
)n >erona et al v <e >u?man% in +@A0% the court held that implied trusts
prescribe within four years after the discovery of the fraud. 4ut in $aladiao v
Bda. <e 4las% in a decision made a month before >erona% the court held that
implied trusts do not prescribe if the re#istration of the property was in bad
faith% and the property was still in the trusteeCs name% because re#istration is in
the nature of a continuin# and subsistin# trust. )n >on?ales et al v )A$ !in (aras%
not in syllabus&% +@@+% the court said that action for reconveyance of real
property to enforce an implied trust prescribes in +D years from the issuance of
an adverse title to the property% which operates as constructive notice.
2xpress , Articles +00.E+00A.
created by the intention of the trustor or of the parties
those created by the direct and positive acts of the parties% by some writin# or
deed% or will% or by words either expressly or impliedly evincin# an intention to
create a trust !Salao v Salao&
. requisites for an express trust* !no express trust if any missin#/ from 5indanao <evCt
Authority v $A&&
+. $ompetent trustor and trustee
-. Ascertainable trust res
.. 4enefciaries
6o particular words are required for the creation of an express trust% as lon# as
it is clear that a trust is intended/ but an express trust concernin# realty or
interest therein may 68T be proved by parole evidence.
An express trust does not prescribe% unless repudiated. FF )n this case% the
repudiation must be :nown to the cestui que trust and must be direct% clear%
open and equivocalFFF
5indanao <evCt Authority% citin# Tamayo v $alle'o* (rescription in case of
express trusts can be invo:ed only from the time the trust is repudiated.
<issentin# opinion in 5indanao <evCt Authority% citin# various 'urisprudence.
S8G2<A< $AH2I8 vs. $86$2($)86 R8JAS>.R. 6o. +0KLKK% 6ovember -.% -DDL
6A$"URA% J.
=A$TS*
The sub'ect property is an unre#istered land with an area of 0%+A@ square meters situated
at 6aval% 4iliran. )n a complaint on +@@L% petitioner Soledad $aMe?o alle#ed that she
bou#ht such parcel of land in +@.@ from $riso#ono Gimpiado% althou#h the sale was not
reduced into writin#. Thereafter% she immediately too: possession of the property. )n +@0K%
she and her husband left for 5indanao and entrusted the said land to her father% $rispulo
Ro'as% who too: possession of% and cultivated the property. )n +@KD% she found out that the
respondent% $oncepcion Ro'as% her stepmother% was in possession of the property and was
cultivatin# the same. She also discovered that the tax declaration over the property was
already in the name of his father.
Respondent asserted that it was her husband who bou#ht the property from Gimpiado%
which accounts for the tax declaration bein# in $rispuloCs name.
After the hearin#% 5T$ rendered a decision in favor of the petitioner% ma:in# her the real
and lawful owner of the land. Respondent appealed to the RT$ of 6aval% 4iliran% which
reversed the 5T$ decision on the #round that the action had already prescribed and
acquisitive prescription had set in. "owever% actin# on petitionerCs motion for
reconsideration% the RT$ amended its ori#inal decision and held that the action had not yet
prescribed considerin# that the petitioner merely entrusted the property to her father. The
Trust E SJ4(rior N +
tenEyear prescriptive period for the recovery of a property held in trust would commence
to run only from the time the trustee repudiates the trust. The RT$ found no evidence on
record showin# that $rispulo Ro'as ever ousted the petitioner from the property.
(etitioner fled a petition for review with the $A% which reversed the amended decision of
the RT$. The $A held that% assumin# that there was a trust between the petitioner and her
father over the property% her ri#ht of action to recover the same would still be barred by
prescription since 0@ years had already lapsed since $rispulo adversely possessed the
contested property in +@0K.
"ence% this petition for review.
)SSU2* 7hether or not there is an existence of trust over the property , express or
implied , between the petitioner and her father
"2G<* 6862.
A trust is the le#al relationship between one person havin# an equitable ownership of
property and another person ownin# the le#al title to such property% the equitable
ownership of the former entitlin# him to the performance of certain duties and the
exercise of certain powers by the latter. Trusts are either express or implied. 2xpress trusts
are those which are created by the direct and positive acts of the parties% by some writin#
or deed% or will% or bywords evincin# an intention to create a trust. )mplied trusts are those
which% without bein# expressed% are deducible from the nature of the transaction as
matters of intent or% independently% of the particular intention of the parties% as bein#
super induced on the transaction by operation of law basically by reason of equity.
As a rule% the burden of provin# the existence of a trust is on the party assertin# its
existence% and such proof must be clear and satisfactorily show the existence of the trust
and its elements. The presence of the followin# elements must be proved* !+& a trustor or
settlor who executes the instrument creatin# the trust/ !-& a trustee% who is the person
expressly desi#nated to carry out the trust/ !.& the trust res% consistin# of duly identifed
and defnite real properties/ and !0& the cestui que trust% or benefciaries whose identity
must be clear. Accordin#ly% it was incumbent upon petitioner to prove the existence of the
trust relationship. And petitioner sadly failed to dischar#e that burden.
The existence of express trusts concernin# real property may not be established by parole
evidence. )t must be proven by some writin# or deed. )n this case% the only evidence to
support the claim that an express trust existed between the petitioner and her father was
the selfEservin# testimony of the petitioner.
Althou#h no particular words are required for the creation of an express trust% a clear
intention to create a trust must be shown/ and the proof of fduciary relationship must be
clear and convincin#. The creation of an express trust must be manifested with reasonable
certainty and cannot be inferred from loose and va#ue declarations or from ambi#uous
circumstances susceptible of other interpretations.
)n the case at bench% an intention to create a trust cannot be inferred from the petitionerCs
testimony and the attendant facts and circumstances. The petitioner testifed only to the
e3ect that her a#reement with her father was that she will be #iven a share in the produce
of the property. This alle#ation% standin# alone as it does% is inadequate to establish the
existence of a trust because proftEsharin# per se% does not necessarily translate to a trust
relation.
)n li#ht of the disquisitions% we hold that there was no express trust or resultin# trust
established between the petitioner and her father. Thus% in the absence of a trust relation%
we can only conclude that $rispuloCs uninterrupted possession of the sub'ect property for
0@ years% coupled with the performance of acts of ownership% such as payment of real
estate taxes% ripened into ownership.
(etition denied. <ecision of the $A aOrmed.
Salao vs. Salao GE-AA@@% 5arch +A% +@LA
=acts*
The spouses 5anuel Salao and Balentina )#nacio of 4arrio <ampalit% 5alabon% Ri?al be#ot
four children named (atricio% Ale'andra% Juan !4anli& and Ambrosia. 5anuel Salao died in
+KK1. "is eldest son% (atricio% died in +KKA survived by his only child. Balentin Salao.
After BalentinaCs death% her estate was administered by her dau#hter Ambrosia.
The documentary evidence proves that in +@++ or prior to the death of Balentina )#nacio
her two children% Juan 9. Salao% Sr. and Ambrosia Salao% secured a Torrens title% 8$T 6o.
+K1 of the Re#istry of <eeds of (ampan#a% in their names
The property in question is the fortyEsevenEhectare fshpond located at Sitio $alunuran%
Gubao% (ampan#a% wherein 4enita SalaoE5arcelo dau#hter of Balentin Salao claimed +P.
interest on the said fshpond.
The defendant Juan 9. Salao Jr. inherited from his father Juan 9. Salao% Sr. Q of the fshpond
and the other half from the donation of his auntie Ambrosia Salao.
)t was alle#ed in the said case that Juan 9. Salao% Sr and Ambrosia Salao had en#a#ed in
the fshpond business. 7here they obtained the capital and that Balentin Salao and
Ale'andra Salao were included in that 'oint venture% that the funds used were the earnin#s
of the properties supposedly inherited from 5anuel Salao% and that those earnin#s were
used in the acquisition of the $alunuran fshpond. There is no documentary evidence to
support that theory.
The lawyer of 4enita Salao and the $hildren of Bictorina Salao in a letter dated January -A%
+@1+ informed Juan S. Salao% Jr. that his clients had a oneEthird share in the two fshponds
and that when Juani too: possession thereof in +@01% in which he refused to #ive 4enita
and BictorinaCs children their oneEthird share of the net fruits which alle#edly amounted to
(-DD%DDD. "owever% there was no mention on the deeds as to the share of Balentin and
Ale'andra.
Juan S. Salao% Jr. in his answer dated =ebruary A% +@1+ cate#orically stated that Balentin
Salao did not have any interest in the two fshponds and that the sole owners thereof his
father 4anli and his aunt Ambrosia% as shown in the Torrens titles issued in +@++ and +@+L%
and that he Juani was the donee of AmbrosiaCs oneEhalf share.
4enita Salao and her nephews and niece as:ed for the annulment of the donation to Juan
S. Salao% Jr. and for the reconveyance to them of the $alunuran fshpond as Balentin
SalaoCs supposed oneEthird share in the +01 hectares of fshpond re#istered in the names
of Juan 9. Salao% Sr. and Ambrosia Salao.
)ssue*
Trust E SJ4(rior N -
+. 7hether or not the $alunuran fshpond was held in trust for Balentin Salao by
Juan 9. Salao% Sr. and Ambrosia Salao.
-. 7hether or not plainti3sC action for reconveyance had already prescribed.
"eld*
+. There was no resultin# trust in this case because there never was any intention on the
part of Juan 9. Salao% Sr.% Ambrosia Salao and Balentin Salao to create any trust. There was
no constructive trust because the re#istration of the two fshponds in the names of Juan
and Ambrosia was not vitiated by fraud or mista:e. This is not a case where to satisfy the
demands of 'ustice it is necessary to consider the $alunuran fshpond bein# held in trust
by the heirs of Juan 9. Salao% Sr. for the heirs of Balentin Salao.
Ratio*
A Torrens Title is #enerally a conclusive evidence of the ownership of the land referred to
therein. !Sec. 0L% Act 0@A&. A stron# presumption exists that Torrens titles were re#ularly
issued and that they are valid. )n order to maintain an action for reconveyance% proof as to
the fduciary relation of the parties must be clear and convincin#.
The plainti3s utterly failed to prove by clear% satisfactory and convincin# evidence. )t
cannot rest on va#ue and uncertain evidence or on loose% equivocal or indefnite
declarations.
Trust and trustee/ establishment of trust by parole evidence/ certainty of proof. R 7here a
trust is to be established by oral proof% the testimony supportin# it must be suOciently
stron# to prove the ri#ht of the alle#ed benefciary with as much certainty as if a
document provin# the trust were shown. A trust cannot be established% contrary to the
recitals of a Torrens title% upon va#ue and inconclusive proof.
Trusts/ evidence needed to establish trust on parole testimony. R )n order to establish a
trust in real property by parole evidence% the proof should be as fully convincin# as if the
act #ivin# rise to the trust obli#ation were proven by an authentic document. Such a trust
cannot be established upon testimony consistin# in lar#e part of insecure surmises based
on ancient hearsay. !Syllabus% Santa Juana vs. <el Rosario 1D (hil. ++D&.
The fore#oin# rulin#s are #ood under article +01L of the $ivil $ode which% as already
noted% allows an implied trust to be proven by oral evidence. Trustworthy oral evidence is
required to prove an implied trust because% oral evidence can be easily fabricated.
8n the other hand% a Torrens title is #enerally a conclusive of the ownership of the land
referred to therein !Sec. 0L% Act 0@A&. A stron# presumption exists% that Torrens titles were
re#ularly issued and that they are valid. )n order to maintain an action for reconveyance%
proof as to the fduciary relation of the parties must be clear and convincin#.
The real purpose of the Torrens system is% to quiet title to land. 8nce a title is re#istered%
the owner may rest secure% without the necessity of waitin# in the portals of the court% or
sittin# in the mirador de su casa% to avoid the possibility of losin# his land.
-. Reconveyance had already prescribed. (lainti3sC action is clearly barred by
prescription or laches.
Ratio*
Under Act 6o. +@D% whose statute of limitation would apply if there were an implied trust in
this case% the lon#est period of extinctive prescription was only ten year.
The $alunuran fshpond was re#istered in +@++. The written extra'udicial demand for its
reconveyance was made by the plainti3s in +@1+. Their action was fled in +@1- or after
the lapse of more than forty years from the date of re#istration. The plainti3s and their
predecessorEinEinterest% Balentin Salao% slept on their ri#hts if they had any ri#hts at all.
Bi#ilanti prospiciunt 'ura or the law protects him who is watchful of his ri#hts !@- $.J.S.
+D++% citin# 2s#uerra vs. Tecson% -+ (hil. 1+K% 1-+&.
Undue delay in the enforcement of a ri#ht is stron#ly persuasive of a lac: of merit in the
claim% since it is human nature for a person to assert his ri#hts most stron#ly when they
are threatened or invaded. Gaches or unreasonable delay on the part of a plainti3 in
see:in# to enforce a ri#ht is not only persuasive of a want of merit but may% accordin# to
the circumstances% be destructive of the ri#ht itself.
"avin# reached the conclusion that the plainti3s are not entitled to the reconveyance of
the $alunuran fshpond% it is no lon#er to pass upon the validity of the donation made by
Ambrosia Salao to Juan S. Salao% Jr. of her oneEhalf share in the two fshponds. The
plainti3s have no ri#ht and personality to assail that donation.
2ven if the donation were declared void% the plainti3s would not have any successional
ri#hts to AmbrosiaCs share. The sole le#al heir of Ambrosia was her nephew% Juan% Jr.% her
nearest relative within the third de#ree. Balentin Salao% if livin# in +@01 when Ambrosia
died% would have been also her le#al heir% to#ether with his frst cousin% Juan% Jr. !Juani&.
4enita Salao% the dau#hter of Balentin% could not represent him in the succession to the
estate of Ambrosia since in the collateral line% representation ta:es place only in favor of
the children of brothers or sisters whether they be of the full or half blood is !Art @L-% $ivil
$ode&. The nephew excludes a #randniece li:e 4enita Salao or #reatE#randnephews li:e
the plainti3s Alcuri?a !(avia vs. )turralde 1 (hil. +LA&.
Trust E SJ4(rior N .