TRUSTS AND POWERS OF ATTORNEY

Trust, defined.

Is confidence reposed in one person, called trustee, for the benefit

of another, who is called cestui que trust, the source of trust being
called the trustor.
An obligation of a person to whom the legal title to property has
been transferred arising out of a confidence reposed in him to apply
the property faithfully and according to such confidence.
Not the same as trust as used in the United States which means
monopolistic combination.
The Philippine Civil Code recognize two kinds of trusts:
- Express trust created by the intention of the trustor or the
parties, and is required to be evidenced by writing, parol
evidence not being sufficient in cases of real estate or an interest
therein.
- Implied trust exists by operation of law

Lorenzo vs. Posadas, 64 Phil 353

It was held that no particular form of words or conduct is necessary
for the manifestation of intention to create a trust. It is possible to
create a trust without using the word trust or trustee.
Magtulis, et. al. vs. Espartero, 63 O.G. 24
In one case, a grantor conveys land to the grantee with the
understanding that after the latters death the property would be
returned to the grantor or his heirs, an implied trust is created in
favor of the grantor or his heirs.

Characteristics of trust.
a) It is a relationship; b) it is a relationship fiduciary in character; c) it is
a relationship with respect to property, not one involving merely
personal duties; d) it involves the existence of equitable duties
imposed upon the holder of the title to the property, to deal with it
for the benefit of another; and e) it arises as a result of a
manifestation of intention to create relationship.

Power of Attorney, defined.

An authority enabling a person to dispose of the interest which is

vested in another.
An authority to do some act in relation to lands, or the creation of
estates therein, or of charges thereon, which the owner, granting or
reserving such power, might himself lawfully perform.

Power of Attorney distinguished from Trust.

POWER OF ATTORNEY
TRUST
- only two persons are necessary, the - there are generally three persons
principal and the attorney in fact
involved, the trustor; the trustee and
the cestui que trust or beneficiary
- never imperative but always - always imperative and leaves
discretionary
nothing to the option of the trustee
- the attorney-in-fact acts for the use - trustee acts not necessarily for the
and benefit of the principal who benefit of the trustor who appointed
appointed him
him, but upon his discretion, for the
ultimate benefit of a third party the
cestui que trust

Implied trust.

The enforcement of an implied or constructive trust is to provide an

equitable remedy against unjust enrichment of a person at the expense of
another.
Fraudulent registration of land holds the person in whose name the land is
registered as a mere trustee.
Pacheco v. Arro, 85 Phil 505
Where the land is decreed in the name of a person through fraud or
mistake, such person is by operation of law considered a trustee of an
implied trust for the benefit of the Torrens title and the trustee and his
successors-in-interest are bound to execute the deed of reconveyance.
NOTE: A holder in bad faith of a Torrens title is not entitled to protection.

Existence of cestui que trust not indispensable.

In private trusts, it is not necessary that the cestui que trust should be
named or even in esse at the time the trust is created in his favor.
In charitable trust the rule is still further relaxed.

Trust created to go around the law, void.

A trust will not be created when, for the purpose of evading the law
prohibiting one from taking or holding real property, he takes a
conveyance thereof in the name of a third person.
Francisco v. Rodriguez, G.R. No. L-31083
By transgressing the law and allowing one to be a dummy in the
acquisition of land, he has eliminated the very source of his claim in
the land and, consequently, he cannot lawfully assert any right or
interest therein.