TRUST

IMPLIED TRUSTS

grantor, there is an implied trust in favor of the person whose

benefit is contemplated.

ART. 1451. SUCCESSION

-When land passes by succession to any person and he
causes the legal title to be put in the name of another, a trust is
established by implication of law for the benefit of true owner.

Where a person who has acquired land by inheritance

causes the legal title to be placed in the name of
another, a resulting trust is presumed in law in favor
of the true owner, the heir.
The heir himself, by his voluntary action, causes the
registration of his legal title under the name of another
person.
This is different from where through fraudulent
representations an heir succeeded in having the original
title of the land in the name of the deceased cancelled and
a new one issued in his name thereby enabling him to
possess the land and get its produce. In this case, what is
created is a constructive trust in favor of the person
defrauded.
Succession is a mode of acquisition by virtue of which the
property, rights, and obligations to the extent of the value
of the inheritance, of a person are transmitted through his
death to another or others either by his will or by operation
of law.

ART. 1452. CO-OWNERSHIP

-If two or more persons agree to purchase property and by
common consent the legal title is taken in the name of one of
them for the benefit of all, a trust is created by force of law in
favor of the others in proportion to the interest of each.

Where property is purchased by two or more persons

and by common consent the legal title is placed in the
name of only one of the co-owners for the benefit of
all, a trust arises by implication of law (resulting trust)
in favor of the others in proportion to the interest of
each.
Article 1452 expressly allows a co-owner (first co-owner)
of a parcel of land to register his proportionate share in the
name of his co-owner (second co-owner) in whose name
the property is registered.
In this case, the second co-owner serves as a legal
trustee of the first co-owner insofar as the proportionate
share of the first co-owner is concerned.
A co-owner needs to show that there is a common
consent among the purchasing co-owners to put the legal
title to the purchased property in the name of the co-owner
for the benefit of all.

ART. 1453. CONVEYANCE

-When property is conveyed to a person in reliance upon his
declared intention to hold it for, or transfer it to another or the

The trust is based on a promise or representation of the

grantee to hold the property conveyed for, or transfer it to
another or the grantor.
The grantee is estopped from asserting ownership in
himself by denying his representation as against the
person for whose benefit the implied trust is created.
Article 1453 is founded upon equity, particularly where on
the faith of the agreement or understanding, the grantee is
enabled to gain an advantage in the purchase of the
property or where the consideration or part thereof has
been furnished by or for another.
Applicable if the person conveying the property did not
expressly state that he was establishing a trust.
Resulting trust

ART. 1454. ABSOLUTE CONVEYANCE

-If an absolute conveyance of property is made in order to
secure the performance of an obligation of the grantor toward
the grantee, a trust by virtue of law is established. If the
fulfilment of the obligation is offered by the grantor when it
becomes due, he may demand reconveyance of the property
to him.

If an absolute conveyance of property is made, instead

of mortgage or pledge, in order to guarantee the
performance of an obligation of the grantor toward the
grantee, an implied trust is created by operation of law
(constructive trust) for the benefit of the grantor.
Upon the offering to the grantee the fulfilment of the
obligation, the grantor is entitled to a deed of
reconveyance of the property so long as the rights of
innocent third parties have not intervened.

ART. 1455. PURCHASE OF PROPERTY WITH USE OF

TRUST FUNDS
-When any trustee, guardian or other person holding a
fiduciary relationship uses trust funds for the purchase of
property and causes the conveyance to be made to him or to a
third person, a trust is established by operation of law in favor
of the person to whom the funds belong.

A purchase by a trustee, guardian or other person holding

a fiduciary relationship of property, where he takes the
conveyance in his own or a third persons name, using
trust funds for the purchase, establishes a resulting trust
for the benefit of the person to whom the funds belong.
Basis: moral obligation to refrain from placing ones self in
positions which ordinarily excite conflicts between selfinterest and integrity.
There must be no fraud or breach of confidence

If there is fraud or breach of confidence in the

purchase with use of trust funds, a constructive trust
is created.

ART. 1456. ACQUISITION OF PROPERTY THROUGH

MISTAKE OR FRAUD

-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.

Where a party acquires through mistake or fraud a legal

title to property to which another has a better right, a
constructive trust is created in favor of the aggrieved
party who is truly entitled to it or his successors-in-interest,
and grants to the latter the right to recover his or their title
over the property by way of reconveyance while the same
has not yet passed to an innocent purchaser for value

Basis: the primary principle of law and equity that

one should not unjustly enrich himself at the expense
of another.
The creation of a constructive trust is an appropriate
remedy against unjust enrichment.
In order to seek reconveyance, the complaint must
allege that:
1. The plaintiff was the owner of the property
2. The defendant had illegally dispossessed him of the
same
A purchaser in bad faith is, by Article 1456, considered a
trustee of an implied trust for the benefit of the true owner
of the property. Hence, he may not successfully set up
prescription as a defense.
Remedies of owner under the torrens system

1.
2.

Reconveyance- after one year from date of decree of

registration and respecting it as incontrovertible
Damages- if the property has passed into the hands
of an innocent purchaser for value

ART. 1457. PROOF OF IMPLIED TRUST

-An implied trust may be proved by oral evidence.

An implied trust, whether involving realty or personalty,

may be proved by oral evidence to avoid unjust
enrichment by the formal holder of the property or title, the
very evil the equitable doctrine of implied trust was
devised to remedy.
In order to establish an implied trust in real property, by
parole evidence, the proof should be as fully convincing as
if the acts giving rise to the trust obligation are proven by
an authentic document.
An implied trust cannot be established contrary to what is
stated in the Torrents Title, upon vague and inconclusive
proof.
The doctrine of implied trust does not apply where there
are no proven facts to support it. There must still be proof
that the trustor wanted to grant one party only the
beneficial ownership of the property, although said
beneficiary may have legal title in himself.