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BUS. ORG. 1 Partnership Agency and Trust

Atty. Charlotte F. Gallego
AR LAW Davao del Sur
2F Abadilla Building, Lapu-lapu St., Digos City
Mobile: +63946 762 7910/ email: arlawdavaodelsur@gmail.com

1.Salao vs. Salao, 70 SCRA 65

Salao v. Salao70SCRA65Facts:
The plaintiffs, all relatives of the defendants, instituted action for a piece of
land in Bataan, alleging it came from common funds and that there was an oral
partition made earlier. They alleged that the defendants, who became
administrators of property in Malabon inherited from their grandparents, used
common funds to buy property elsewhere.
1. Who is the trustor and who is the trustee? 2. Was trust created?
1. person who establishes a trust is called the trustor! one in whom
confidence is reposed as regards property for the benefit of another person is
"nown as the trustee! and the person for whose benefit the trust has been created
is referred to as the beneficiary# $ rt. 1%%&, 'ivil 'ode(.There is a fiduciary
relation between the trustee and the
cestui que trust
as regards certain property, real, personal, money or choses in action.2. The
court ruled that it was not proven that a trust had been created. )o documentary
evidence was presented to prove an e*press trust, and rt. 1%%+ says parol
evidence cannot be used to prove an e*press trust concerning realty.
Art. 1443. No express trusts co cer ! " a !##ova$le or a % ! terest t&ere! #a% $e
proved $% parol ev!de ce.
)either can the evidence prove an implied trust. While an implied trust may be
proven by oral evidence, it must be trustworthy. )either was it proven that there
was fraud or mista"e, enough to create a constructive trust.
'() *IN+S )F 'R,S'
'reated by the parties, or by the intention of the trustor. *press trusts do not
prescribe unless repudiated.
- 'reated by operation of law. The rule on implied trusts regarding prescription is
confusing. n general, resulting trusts do not prescribe, but constructive trusts

2.Deluao vs. Casteel, 26 SCRA 415 [1968] and 29 SCRA [1969]

4.G.R. No. L-21906; December 24, 1968
5.Ponente: J. Castro

In 1940 Nicanor Casteel unsuccessfully registered a fishpond in a big

tract of swampy land, 178.76 hectares, in the then sitio of Malalag,
municipality of Padada, Davao for 3 consecutive times because the
Bureau of Fisheries did not act upon his previous applications.
Despite the said rejection, Casteel did not lose interest. Because of the
threat poised upon his position by the other applicants who entered upon
and spread themselves within the area, Casteel realized the urgent
necessity of expanding his occupation thereof by constructing dikes and
cultivating marketable fishes. But lacking financial resources at that time,
he sought financial aid from his uncle Felipe Deluao.
Moreover, upon learning that portions of the area applied for by him were
already occupied by rival applicants, Casteel immediately filed a protest.
Consequently, two administrative cases ensued involving the area in

However, despite the finding made in the investigation of the above

administrative cases, the Director of Fisheries nevertheless rejected
Casteel's application on October 25, 1949, required him to remove all the
improvements which he had introduced on the land, and ordered that the
land be leased through public auction

On November 25, 1949 Inocencia Deluao (wife of Felipe Deluao) as party

of the first part, and Nicanor Casteel as party of the second part,
executed a contract — denominated a "contract of service". On the same
date the above contract was entered into, Inocencia Deluao executed a
special power of attorney in favor of Jesus Donesa

On November 29, 1949 the Director of Fisheries rejected the application

filed by Felipe Deluao on November 17, 1948. Unfazed by this rejection,
Deluao reiterated his claim over the same area in the two administrative
cases and asked for reinvestigation of the application of Nicanor Casteel
over the subject fishpond.

The Secretary of Agriculture and Natural Resources rendered a decision

ordering Casteel to be reinstated in the area and that he shall pay for the
improvement made thereupon.
Sometime in January 1951 Nicanor Casteel forbade Inocencia Deluao
from further administering the fishpond, and ejected the latter's
representative (encargado), Jesus Donesa, from the premises.

Whether the reinstatement of Casteel over the subject land constitute a
dissolution of the partnership between him and Deluao

Yes, the reinstatement of Casteel dissolved his partnership with Deluao.

The Supreme Court ruled that the arrangement under the so-called
"contract of service" continued until the decision both dated Sept. 15,
1950 were issued by the Secretary of Agriculture and Natural Resources
in DANR Cases 353 and 353-B.

This development, by itself, brought about the dissolution of the

partnership. Since the partnership had for its object the division into two
equal parts of the fishpond between the appellees and the appellant after
it shall have been awarded to the latter, and therefore it envisaged the
unauthorized transfer of one half thereof to parties other than the
applicant Casteel, it was dissolved by the approval of his application and
the award to him of the fishpond.

The approval was an event which made it unlawful for the members to
carry it on in partnership. Moreover, subsequent events likewise reveal
the intent of both parties to terminate the partnership because each
refused to share the fishpond with the other.

8. De Leon vs. Molo-Pekson, 6 SCRA 978 [1962]

9. Government vs. Abadilla, 46 Phil. 642 [1924]
10. Cristobal vs. Gomez, 50 Phil. 810 [1927]
11. Thomson vs. Court of Appeals, 248 SCRA 280 [1998]
12. Pacheco vs. Arro, 85 Phil. 505 [1950]
13. Tuttle vs. Union Bank and Trust Co., 199 P[2d] 884, 139 ACR 127
14.Araneta vs. Perez, 5 SCRA 338 [1962]
15.Sumaoang vs. Judge, RTC, 215 SCRA 136 [1992]
16.Tuazon vs. Caluag, [Unrep.] 96 Phil. 981 [1955]
17. Mindanao Development Authority vs. Court of Appeals, 113 SCRA
429 [1982]
18.Roa, Jr. Vs. Court of Appeals, 123 SCRA 3 [1983], under Art. 1456
19. Perez vs. Araneta, 4 SCRA 430 [1962]
20. Heirs of L. Yap vs. Court of Appeals, 312 SCRA 603 [1991]
21. Ramos vs. Ramos, 61 SCRA 284 [1974]
22.Cuaycong vs. Cuaycong, 21 SCRA 1192 [1967]
23.Magtulis vs. Espartero, 9 C.A. Rep. 67
24.Vda. De Esconde vs. Court of Appeals, 253 SCRA 66 [1996]
25. Julio vs. Dalandan, 21 SCRA 543 [1967]
26. Phil. Air Lines, Inc., vs. Heald Lumber Co., 101 Phil. 1031 [1957]
27. Martinez vs. Grano, 42 Phil. 35 [1921]
28. Philippine National Bank vs. Court of Appeals, 217 SCRA 347 [1993]
29.Abellana vs. Ponce, 437 SCRA 531 [2004]
30.O’laco vs. Co Cho Chit, 220 SCRA 656 [1993]
31. Kiel vs. Estate of P.S. Sabert, 46 Phil. 193 [1924]
32.Sollega de Romero vs. Court of Appeals, 319 SCRA 180 [1999]
33. Special Services Corporation vs. Centro La Paz, 121 SCRA 748 [1983]
34.ChiaoLiong Tan vs. Court of Appeals, 228 SCRA 75 [1993]
35.Sulit vs. Court of Appeals, 268 SCRA 441 [1997]
36.Policarpio vs. Court of Appeals, 269 SCRA 334 [1997]
37.Arlegui vs. Court of Appeals, 378 SCRA 322 [2002]
38. Republic vs. Del Monte Motors, Inc., 534 SCRA 53 [2006]
39.Homena vs. Casa, 157 SCRA 232 [1988]
40.Deluao vs. Casteel, 29 SCRA 350 [1969]
41. Diaz vs. Gorricho and Aguado, 103 Phil. 261 [1958]
42.Secuya vs. Vda. De Selma, 326 SCRA 244 [2001]
43. Tamayo vs. Callejo, 46 SCRA 27 [1972]
44. Geronimo and Isidro vs. Nava and Aquino, 105 Phil. 145 [1959]
45. Intestate Estate of Alexander T. Ty vs. Court of Appeals, 356 SCRA
661 [2001]
46.Lagura vs. Levantino, 71 Phil. 566 [1941]
47. Fabian vs. Fabian, 20 SCRA 231 [1968]
48. Salinas vs. Tuazon and Roman, supra
49. Huang vs. Court of Appeals, 236 SCRA 420 [1994]
50.Pangan vs. Court of Appeals (166 SCRA 375 [1988]
51.Esconde vs. Borlongay, 152 SCRA 603 [1987]
52.Amerol vs. Bagumbaran, 154 SCRA 396 [1987]
53. Aznar Brothers Realty Co., vs. Court of Appeals, 458 SCRA 96 [2005]
54. Heirs of Jose Olviga vs. Court of Appeals, 227 SCRA 330 [1993]
55.Vda. De Cabrera vs. Court of Appeals, 267 SCRA 339 [1997]
56.Repique vs. Padilla, [C.A.] No. 26617-R, Feb. 6, 1965
57.Vda. De Buncio vs. De Leon, 156 SCRA 352 [1987]
58.Jaramil vs. Court of Appeals, supra
59.Tongoy vs. Court of Appeals, 123 SCRA 99 [1983]
60.Caragay-Layno vs. Court of Appeals, 133 SCRA 718 [1984]
61.Adille vs. Court of Appeals, 157 SCRA 455 [1988]
62.Bejoc vs. Cabreros, 464 SCRA 78 [2005]
63. Gonzales vs. Intermediate Appellate Court, 204 SCRA 106 [1991]
64. Ruiz vs. Court of Appeals, 79 SCRA 525 [1977]
65.Bogayos vs. Guilao, 64 Phil. 347 [1937]
66. Guzman vs. Aquino, 40 SCRA 236 [1970]
67.Buencamino vs. Matias, 16 SCRA 849 [1966]
68.Caridad vs. Henarez, [Unrep] 97, Phil. 973 [1955]
69. Guerrero vs. Court of Appeals, 126 SCRA 109 [1983]
70.Palmera vs. Civil Service Commission, 235 SCRA 87 [1994]
71. Sotto vs. Teves, 86 SCRA 154 [1978]
72. Ramos vs. Court of Appeals, 232 SCRA 348 [1994]
73. Lim vs. Court of Appeals, 65 SCRA 160 [1975]
74. Trinidad vs. Ricafort, 7 Phil. 449 [1907]
75.Nakpil vs. Intermediate Appellate Court, 225 SCRA 456 [1993]
76.Custodio vs. Casiano, 9 SCRA 841 [1963]
77. De la Cruz vs. De la Cruz, 130 SCRA 666 [1984]
78. Valdez vs. Olorga, 51 SCRA 71 [1973]
79.Compania General de Tobacos vs. Topinoi, 54 Phil. 33 [1929]
80. Heirs of Candelaria vs. Romero, 109 Phil. 500 [1960]
81.Sy-Juco and Viardo vs. Sy-Juco, 40 Phil. 634 [1920]
82.Severino vs. Severino, 44 Phil. 343 [1922]
83. Heirs of A. Kionisala vs. Heirs of H. Dacut, 378 SCRA 206 [2002]
84. Noel vs. Court of Appeals, 260 SCRA 45 [1996]
85.Gayondato vs. Treasurer, supra
86.Aban vs. Cedeña, [Unrep] 103 Phil. 1153 [1958]
87. Adriano vs. Court of Appeals, 328 SCRA 738 [2000]
88. Heirs of Clemente Ermac vs. Heirs of Vicente Ermac, 403 SCRA 291
89.Ferrer-Lopez vs. Court of Appeals, 150 SCRA 393 [1987]
90.Esquivias vs. Court of Appeals, 270 SCRA 803 [1997]