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[Mindanao

Development vs CA] ISSUE


Was there express trust between Ang Bansing and
FACTS Cruz over Lot 1846C?
- Ang Bansing owns big tract of land
- In 1939, sold a portion to Juan Cruz HELD
o Contract: work for the titling of
the entire area of my land under ELEMENTS OF TRUST
my own expenses and the 1. Competent trustor and trustee
expense for titling of the portion 2. Ascertainable trust res
sold will be under Juan Cruz 3. Sufficiently certain beneficiary
- After sale, the property of Ang Bansing - That absent any is fatal to trust
surveyed and divided into o5 lots Also, there must be:
o Portion sold to Cruz: Lot 664B3 - Present and complete disposition of the
- Survey made again on LOT 664B3 and it Trust Property
was designated as LOT 1846C - Purpose be active
- Then Cruz sold this Lot 1846C to the - Trustee has power to administer, not just
Commonwealth of the Philippines for 6k duty to perform contract
o Surety bond executed to Did the Deed contain Express Trust stipulation?
GUARANTEE that Cruz’s absolute - Court said no. the titling of whole
title over the land sold to PH property by Ang Bansing at his expense is
- 1940 – Cadastral Survey approved just a condition
- 1941 – OCT issued in the name of the Ang - No agreement that Ang Bansing will hold
Bansings the property in trust for Cruz
- March 1941 – OCT earlier issued - Hence, no express trust because if there
canceled and another OCT issued in the was, it should be clear and unequivocal
name of Francisco Ang Bansing only o Purposes named
o Same day, Ang Bansing sold Lot - The agreement WAS NOT CLEAR whether
1846 A to Juan Cruz Ang Bansing will work on the titling of the
o Lot B and C to Vedasto Corcuera whole property or just the remaining lot
- TCT No 2601 – issued in the name of Ang after sale
Bansing for the remainder of the No Trust based on actions of Cruz
property, INCLUDING LOT 1846C - Cruz never attempted to transfer the Lot
- Then another Lot B was sold to Juan Cruz C under his name
- After all the conveyances, what was left to o Whereas for the other lots sold to
Ang Bansing: Lot 1846-C, Lot 1846-D and Cruz, there was a transfer
Lot 1846-E What if Cruz action sign of Repudiation of Trust
o But the TCT for these lots were - But granting there as trust between Ang
again cancelled when Lot D was Bansing and Cruz, and Mindanao as
sold to Vedasto Corcuera beneficiary, it took Mindanao 23 years to
- Then Proc 459: transfer ownership of file this action
some private lands to Mindanao o The sale was in 1946 but demand
Development; among those is LOT 1846C to reconvey title was in 1969
o Mindanao then wrote letter to o Trust, if any, has already
Ang Bansing to surrender TCT prescribed
covering Lot 1846C so it can be HENCE, THERE WAS ONLY IMPLIED TRUST
transferred - Because the Lot C was under the name of
o Ang Bansing refused Ang Bansing but it was sold and owned
o Mindnao filed complaint asking already by Cruz
Ang Bansing to reconvey title - IN IMPLIED TRUST, THERE IS NEITHER
- Mindanao said there was a Trust between PROMISE NOR FIDUCUARY RELATIONS
Ang Bansing and Cruz over the Lot C o Trustee do not recognize any
- Lower court said yes, there’s express trust trust and no intent to hold the
- On appeal, reversed (CA: No Trust) property for the beneficiary
- Hence this petition o No agreement but made by
operation of law

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- What might have happened here is proportion to that creditor viz
Constructive Trust – wherein person sells his claim
and obtains title to it thru fraudulent § Like if creditor received
misrepresentation P80%, Ph Trust will pay
o But this prescribes after 10 years 5% of the total debt
- The prescription here started when the 4. But if that creditor is paid 70%
title was released to the Ang Bangsings in or less, PH Trust will just pay
1941 thru OCT No 26 Tan Sen additional 10k
- Collection of sum of money claimed
2. Parties in an Express Trust - At trial, it was ruled that there was a trust
a. Trustor - person who trusts hence not liable personally ang PH Trust?
b. Trustee – one in whom confidence is reposed - Also, Mindoro no completely sold
- Must have legal capacity to accept the trust Mindoro not completely sold to Roman Catholic
- Failure of trustee to assume the position - Because there was no comma between
“Mindanao Sugar Company” and “which
Art. 1445. No trust shall fail because the trustee appear above” hence only a portion was
appointed declines the designation, unless the sold
contrary should appear in the instrument
constituting the trust.


ISSUE
- Obligations of the Trustee
Was PH Trust personally liable or is it the trust
Rule 98, ROC estate?



HELD
- Generally, trustee does not assume
- PH Trust is personally liable
personal liability on the trust as to
- It holds the legal title of the properties the
properties outside of the trust estate
Mindoro Sugar; although it is not authorized to
- Trustee is generally entitled to receive
manage it or enter into contract on its behalf
compensation for his services
but only protect the claims of bond holder
- It is nonetheless liable PERSONALLY because
[Tan Senguan & Co vs Ph Trust Co] there was no express stipulation that the Trust
Estate will be the one liable

- Also, the wherefore clause, the
FACTS
judgment was against PH Trust and
- Tan Sen Guan and PH Trust entered into
not “PH Trust Company, trustee”
an agreement:
- Hence, Tan Sen has right to claim against PH
- Tan Sen secured a judgment for
Trust, and not to Mindanao Sugar or trust
P21k of Mindoro Sugar, which PH
estate
Trust is the Trustee
- That Tan Sen will convey that
judgment to PH Trust as its [Rizal Surety vs CA]
trustee, all rights, full use and
benefits for the following FACTS
considerations: - REPACOM soled to Transocean the vessel
1. Trustee will pay P5k MV Transocean Shipper payable in 20
2. If Mindoro will be sold, even to annual installment
PH Trust, additional P10k will - Insured with Rizal Surety for
be paid to Tan Sen Guan $3.5M (P23M)
irrespective of how much § Policy under name of
Mindoro was sold Repacom and
3. If any creditor of Mindanao Transocean as the
obtained payment more than insured
P15k (or 70% of P21 original - Then Rizal (?) also insured the
debt), Trustee will pay Tan Sen vessel with a foreign insurance
amount necessary so that the firm for
payment to Tan Sen will be in

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- In 1975, the vessel was lost in the - For its part, Rizal denies Trust
Mediterranean Sea Relationship, no obligation to transfer,
- Transocean filed claims vs Rizal was not asked to transfer in an interest-
- Subsequently, Repacom and Transocean bearing account, no Loss and Subrogation
entered into an agreement how to split Recept executed
the insurance proceeds - But the two company executed the
- Anticipating the dollar claims, Rizal asked Receipt but without prejudice to their
CB to allow it to retain the expected dollar claims for interest
insurance proceeds for three months; CB - A new settlement reached by the two
agreed but it must be deposited in a local companies wherein Transocean shall pay
bank Repacom P1M but Repacom in exchange
- Hence, both Transocean and Repacom will assign all its rights to Transocean
requested Rizal to deposit the insurance - Demand then was made by Transocean to
proceeds in their joint account Prudential for the interest on the balance
- Rizal then requested CB to authorize it to - No reply
receive and deposit the dollar insurance - Complaint filed for collection of unearned
under its name and for the joint account interest on the dollar balance
of Repacom and Transocean
- Rizal informed them that the local and ISSUE
foreign insurance proceeds were already Was there a trust relationship hence
in the non-interest bearing account in Rizal/Prudential liable for the interest?
Prudential Bank and Trust Compay
- Local: P2.6M Did the execution of Loss and Subrogation Receipt
- Foreign: $3M free it from all liabilities?
- Then the two settled on how to partition:
- Repacom = $434k HELD
- Transocean = $1.9M
- Balance is for future settlement Insurer or Trustee?
by way of compromise or for - Trustee, as evidenced by its request to CB
litigation – still in bank that it will open an account for the
- Then the CB approved request of the two expected dollar proceeds of the twos
companies to transfer the balance to an - In the name of Rizal for the joint
interest-bearing special dollar account account of the two companies
with any local ban - That it will stay with Prudential
- Hence, PNB wrote Rizal to remit the until court decision on settlement
amount of $718 (bal) to PNB for the two - Rizal never repudiated this
companies’ joint account agreement
- Rizal said it will do so IF the two - It was Rizal that requested the name of
companies will release Rizal from all the account under its name, in joint acct
liabilities under the policy by agreeing to even if it was not part of the compromise
the LOSS AND SUBROGATION RECEIPT agreement, it involved itself
- But because there were revisions, a - Rizal said its initiative was only coz CB
revised version of the Receipt was earlier asked it to receive the dollar
presented to Solicitor Generl who order proceeds and that it did not agree to trust
Rizal that it was responsible to ensure - “protecting its interest when it
that effective the order of CB to transfer made such request”
the amount to an interest-bearing - that the account name in the
account, the amount should have been compromise agreement was
placed in an interest-bearing account in “ITF” but Rizal denied being
Prudential (its sister company) if ayaw party thereto
niya itransfer sa PNB - when it held on the proceeds until the two
- Interest will start on Apri 21, company arrived at a settlement
1976 – authority given by CB agreement, there was Trust; the proceeds
- It is liable then for the interest as were under its name ITF for two
trustee of the proceeds companies

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- it also received the Compromise - The Municipality of Tayabas was claiming
agreement wherein it was named as the three lots on one side, and Dorotea Lopez
trustee with respect to the dollar and other Private persons on the other
proceeds - The lots were owned by Luis Palad, a
- never objected, even proceeded school teacher, who obtained it thru
and did not repudiate COMPOSICION GRATUITA in 1894
THE LOSS AND SUBROGATION RECEIPT - He left a holographic will. Died without
- It frees Rizal from the insurance policy IT descendant but left widow Dorotea Lopez
ISSUED and not in the dollar proceed - Lopez remarried hence there
interest liability were all collateral heirs
- It was a precondition before it can - In the will:
turnover the proceeds to the insureds - Coconut for wife; rented to
LIABILITY AS TRUSTEE farmers who will pay her
- In being silent at first and then not - And when the time comes that
following orders to place balance to an there will be built a Secondary
interest bearing account, Rizal is liable for College, wife will deliver the said
the accrued interest property to Ayuntamento or Civil
- It could have repudiated the trust Governor to donate such
when after receiving and property
depositing in the non-interest - Since Dorotea remarried, she tried to
bearing account, it could have not partition the land since she is no longer
put it under its name; but it did has the exclusive right thereto
- It could have also advised the - Municipality objected
insured that it would not want or - But an agreement was reached
could not transfer the balance to with two lots going to
an interest-bearing account, but Municipality and one retained by
it did not; hence, the insureds Dorotea
were made to believe that it was
amendable to the instruction ISSUE
- Besides, the lapse of 1 year, 9 months Did Palad thru the will intended to create trust
with the enormous balance in Prudential, with the Ayuntamiento as trustee and the
the sister company of Rizal, would have secondary school as beneficiary?
resulted to unjust enrichment for earning
income thereon without cost HELD

c. Beneficiary – persons for whose benefit the PALADS SAID NO TRUST
trust is created - No ayuntamiento, no school
- But court said that Governor may be the
Art. 1440. A person who establishes a trust is successor of the civil governor
called the trustor; one in whom confidence is BENEFICIARY MUST NOT ALWAYS BE NAMED
reposed as regards property for the benefit of - Not named or in esse when trust is
another person is known as the trustee; and the created in his favor
person for whose benefit the trust has been - The rule is further relaxed for charitable
created is referred to as the beneficiary. trust
- Charge is imposed on real
Art. 1446. Acceptance by the beneficiary is property and is temporary
necessary. Nevertheless, if the trust imposes no - It is clear that the Trustee will hold the
onerous condition upon the beneficiary, his legal title (not the beneficial title) with the
acceptance shall be presumed, if there is no proof
beneficiary as the heir
to the contrary.
- But during the time the beneficiary is not

yet in esse, the collateral heirs wil have no
[Government vs Abadilla] more interest except for the right to
reversion BECAUSE IT WAS CLEAR THAT
FACTS THE INTENT OF THE TESTATOR WAS TO

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HAVE INCOME ACCUMULATE FOR THE expenses of documentation and
BENEFIT OF THE SCHOOL repairs
- after this transactio, a year after, Epifanio
[Cristoba vs Gomez] died with wife Cristobal heir
- telesfora gor tired and transferred all her
FACTS rights to Marcelino for P6k; no amount
- Cristobal instituted a case to recover from was given but it was understood that
Marcelino Gomez two parcels of lands and Marcelino will shoulder the obligation as
claims for income derived from the the consideration in lieu of paying Teles
properties - Partnership dissolved
- The property in question was owned by - Three properties in question
the husband of Cristobal, Epifanio Gomesz delivered to marcelino
- It was sold to Yangco, - Marcelino meanwhile possessed the
redeemable in five years property until his death; made
- But vendor remained in improvements and the property
possession of the property like a appreciated to P50k
lessee - With the dissolution of partnership, banas
- No redemption was intended this got insecure and wanted to mortgage
time but later on, Yangco instead the property to secure debt for
conceded to granting Gomez the 8.5k with pacto de retro redeemable for
privilege to repurchase five years; it eventually redemption
- But Gomez could not afford hence period became indefinite
he borrowed money to Banas - Finally, Marcelino fully paid the debt
- Banas did not want to give him hence was conveyed the property – which
money if he was the only debtor as held by Banas bec of the mortgage
- Hence, Gomez asked for the help - After the redemption, Marcelino said he
of his brother Marcelino and bought the land now using his own money
sister Telesfora that they will be - But it came from the property
responsible for the loan where the payment for Banas
- Banas agreed and gave them 7k to the was also gotten
personal credit of Marcelino and - Meaning, when banas was fully paid, the
Telesfora purpose of the trust was accomplished
- It was agreed that this will be used to - Marcelino was fully reimbursed
repurchase but in the name of Marcelino - Hence, he must surrender
and Telesfora as administrator until 7k is property now to heirs
returned to Banas; in that time, the - It was only made in trust to rescue
property will be returned to Epifanio Epifanio
- The two set up a “Private Partnership in - With Marcelino/partnership as
Participation” agreement to redeem it trustee who administered the
- Marcelino 1.5k property to pay the debt
- Telesfora 5.5k - Epifanio knew that the partnership was
- All placed under their names established so the property will be
- All income will be applied to the reconveyed
amortization first then interest - It was argued that he did not
then other expenses know hence he could not have
- When all covered, it will be agreed; but circumstances prove
returned to Epifanio and heirs otherwise; besides, Epifanio was
- So long as he will be in good in that meeting
behavior in the opinion of two - The Partnershp was an express trust
- Hence, Yangco conveyed the property for agreement, not a donation
6.7k but was stated that it was only 5k - Marcelino did not buy the property, it was
- 1.5 was other loan to Yangco redeemed hence he does not own it
- 200 for the manager of Yangco - This was the purpose of the
- hence, balance of 300 from Banas partnership
--- this was left to cover other

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- Prescription did not also apply to - NO. it cannot be used to satisfy other
Marcelino since he was only creditors’ claims; only planholder
holding the property in trust LEGACY IS NOT BENEFICIARY
AS TO LOT C - Contrary to the position of the Assignee,
- It was really Epifanio’s but sworn saying Legacy is not the beneficiary but the plan
it was Marcelino’s to defeat creditors only holders; Legacy only bound itself to
- No intent to reallyl give it to marcelino manage and administer the fund for the
benefit of the plan holders through LBP
(trustee). That’s the intent of Legacy
[SEC vs Laigo] - Trustee – legal interest
- Beneficiary – equitable interest
FACTS - That all acts of Legacy re the fund is done
- RA 9828 mandates the SEC to issue new with due diligence for the best interest of
rules to govern Pre-Need Industry the plan holders in mind
- Under this rule, pre-need providers shall - The Congress also repealed the old
create a trust fund as a requirement for governing law with this one so as to
registration categorically define and protect the rights
- Trust Fund – coming from of plan holders thru such Trust Fund
planholders’ payment put in a - To hold that Legacy retained the
fund different from the paid-up beneficial interest of the Trust Fund is to
capital violate the spirit of the law
- Pursuant to this, Legacy set up a Trust - It facilitates the payment of
Fund with LBP benefits of planholders
- In 2000, the industry collapsed thus - Legacy will never benefit from
Legacy, and others, were unable to pay the said fund
their obligations
- Legacy was declared insolvent; inventory
of assets and liabilities made d. Corpse, Res, or Trust Estate
- SEC, as governor of pre-need companies,
objected to the inclusion of Trust Fund in [Development Bank vs COA]
the asset of Legacy bec it was to
guarantee delivery of benefits to FACTS
planholders only - The DBP Board passed a Resolution
- If included it will be susceptible creating the DBP Grautity Plan for all its
to being claimed by non- retiring employees (as of May 31, 1977)
planholders - Board of Trustees will control and
- Despite this, Judge Laigo ordered the administer such Fund
Insolvency Assignee to take possession of - The trustee then appointed DBP-TSD as
the Trust Fund investment manager to ensure that the
- RTC judge said it can be used to income of the fund will be enough to
pay for the debt and expenses cover the Gratuity Plan
SEC SAID GAD RTC - Hence, the Special Loan Program was
- The fund has the planholder as the created with the placement from the Pan
beneficial owners; not entitled other - This is open to employees to
creditors of Legacy protect the value of their gratuity
- Contravention ito ng New Rules benefits
- Legacy only a Trustor not the - This was howver suspended bec
owner of this funds partial payment of retirement
benefits is not allowed --- THIS
ISSUE WAS IN THE FORM OF
Did Legacy own the Trust Fund hence part of its DIVIDENTS (which was
asset subject to liquidation? disallowed by COA eventually)
- Under this kasi, the would be
HELD retiree can utilize his retirement

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benefits thru a form of loan of his - YES. It was made in trust with DBP as
outstanding equity in the Trustor, the Board as Trustee and
Gratuity Fund and invest it employees as Beneficiaries
§ Earnings will be first - It was stipulated in the Agreement that no
applied to the interst fund will be used other than to
then balance will be compensate or for the benefit of the
distributed to investor- employees
members - The termination of the Plan did not
- This was stopped bec irregular invalidate the trust created
an used public funds for private o Anyway, the income derived
purposes there as not reverted back to DBP
- DBP was ordered to categorize the o Also, it was recorded in another
income from the Gratuity Fund as part of book;
its Miscellaneous Income - Even though COA correctly ruled that the
- DBP refused such practice was proscribed since the
- Trustee mere administrators right of the employees to the retirement
- Employees still had inchoate benefits is still inchoate, trust was still
rights as owner of Fund established since the beneficiary needed
- DBP thru its Chairman also argued that an not be in esse by the time trust ws created
Express Trust was created and the Fund o Must only be sufficiently certain
is distinct from the other incomes made or identifiable
by the bank - COA ordering the income from the fund to
- Hence, asked the COA to lift the DBP’s Miscellaneous Fund is GAD
disallowance of P11M distributed o Not DBP revenue
as dividends under Special Loan ISSUE ON DISALLOWANCE
Program - DBP charter allows it to adopt a
§ The latter is just a supplementary retirement plan
normal loan transaction - As a special and later law, the DBP chartr
- COA denied because this was a prevails over RA 4968 (supplementary
circumvention of the PH Retirement Laws retirement plan not allowed)
- “financial assistance” in the guise - But nonetheless, the SC upheld the
of supplementary retirement disallowance
plan other than GSIS is o Because retirees are not allowed
proscribed to advance their actual
SEC: DBP owner of the DBP: it is a Trust retirement benefits
Fund o It is a circumvention of the law
- It made the - Legal Fund o The return on investment in the
contribution to the transferred to form of dividends is the
fund Trustees retirement benefit already?
- Trustees merely - Income of fund o Requisites in Retirement
administrators does not accrue to 1. Applicable law
- Employees had DBP 2. Actual retirement
inchoate rights - Thus income - Retirement benefits ae not meant to
should not be compensate ACTUAL employees pa
recorded in DBP o They have salaries and
books of account emoluments for that
THE LOAN GRANTED BY DBP UNDER SLP IS NOT
NORMAL LOAN
ISSUE - The loan is released for investment; not
Was the income in the Fund separate from the given to the employee
other income of DBP? - The loaned amount stays in the Fund
controlled by DBP but loan under name of
HELD debtor employee

1. Kinds of Express Trusts

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a) Contractual vs. Intervivos Trust - RTC ruled that action for Specific
b)Charitable trust Performance has elapsed since agreement
c) Testamentary trust made more than 10 years ago
- Created by a provision in the will whereby the ISSUE
testator directs the creation of a trust for the Was the agreement that Dalandan will “repay” the
benefit of another forclosed 4ha land of Victorina in effect created
d) Pension or Retirement Trusts trust?

2. How to prove express trusts HELD
- YES. The intent should be controlling
Art. 1443. No express trusts concerning an immovable
or any interest therein may be proved by parol - The land of DAlandan was the “kapalit”
evidence. although conditioned that the harvest will
not be demanded or the land itself would
Art. 1444. No particular words are required for the
not be taken immediately
creation of an express trust, it being sufficient that a - In effect, the naked title is with Victorina
trust is clearly intended. although she is not yet the owner
- But the Agreement now makes the
Dalandans usufructuaries for
[Mindanao Dev] undetermined length of time


- Bec Clemente Dalandan has
GR: Parole Evidence is insufficient to prove and divested himself with the
express trust over immovable ownership as kapalit to the
foreclosed land

- THUS, CLEMENTE COULD NOT HAVE
XPN: Parol Evidence must be on the part of the
purported trustee who binds himself to hold title POSSIBLE TRANSMIT IT TO HIS HEIRS
for the benefit of the beneficiary - Since there is fiduciary relation, no
prescription to claim happened

BUT HOW TO PROVE THEN?
HENCE: Parol evidence on the part of the
purported beneficiary fails - TRUST IS ETABLISHED IN THE
AGREEMENT
- Although no express words indicating
[Julio vs Dalandan] trust, the intent is very clear
- Besides, the land in question is the only
FACTS land of Clemente
- Clemente Dalandan obtained a loan - Parole evidence are admissible to clear
secured by the property of Victoriana the terms set forth in a written agreement
Dalandan (succeeded by Victoria Julio)
- Context: war time
- Dalandan defaulted that’s why the [Heirs of Tranquilino Labiste vs Heirs of Jose
property was foreclose Labiste]
- Thus, Dalandan obliged himself to repay:
- Personally liable to Vitoriana FACTS
- Will not give up harvest - HEIRS OF JOSE thru Epifanio bought a
- The land will not be demanded land from Banilad Friars thru the Bureau
immediately of Lands for P36
- Julio however avers that the land - After the sale but before release of title,
mentioned in the agreement was already Epifanio executed an affidavit saying the
acquired by her as heir thru a pacto de he, as heir, and his uncle TRANQUILINO
retro sale as the co-owners of the said property
- But since cannot demand immediately, because the money paid came from them
the demand of Julio was not met hence, - The property was partitioned with one
she asked to put a period so she can going to Tranquilino the other to Epifanio
demand the land and fruits - Thereafter Tranquilo bought the other
- But the heirs of Dalandan refuse half of Epifanio

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- Hence, the heir of Tranquilino had full [Gamboa vs Gamboa]
possession and ownership of the property
- Heirs of Tranquilino fled during the war; FACTS
when they came back, the property and - Plaintiff Gamboa wants ten parcels of
records were destroyed land, they claimed to be co-owners be
- It was then they found out that Asuncion partitioned
Lebiste was trying to reconstitute the - Defendants Gamboa (also heirs: Modesta,
property; to which the Heir of Tranq Pedro, Rafael) refused?
opposed - Modesta said that yes, they are co-heirs
- But compromise agreement reached; it insofar as one parcel of land identified by
will be reconstituted and deposite to the Tax No 6247. The rest is solely hers coz in
clerk of court pending reconveyance adverse possession for 10 years
- When TCT was issued in the name of - This was confirmed by co-
Epifanio Lebiste, Heirs of Tranq defendants Pedro and Rafael
dishonored the compromise agreement - Trial Court ruled in favor of the petitioner
- Heirs petitioned to cancel the title and and ordered partition
reconveyance of the property - It was undisputed that their parents sold
- Respondents avered that the the property, except tht under Tax No
Agreement between Jose and 6247 to Felipe Javier but the Gamboas
Tranq is forged and that the Heirs remained in possession of the land
were barred by laches - Continued until death of Father
- RTC ruled in favor of the Heirs of Tranq Gamboa as tenants of Javier
- CA affirmed the RTC decision but - Then, when Javier was the full owner, he
nonetheless declared na barred thru sold it to Feliciana and MOdesta Gamboa
prescription - For payment of the land, the
- Agreement was valid but action same land was mortgaged to
must be filed 10 years from right Javier
of action accrues from the - Then Regino paid the debt of his
written contract sisters to Javier and thusthe
- Hence this petition mortgage interest of Javier
therein was transferred to him
ISSUE § Subjugation of credit
Were the Heirs barred by prescription in - But later on, Modesta paid the
recovering the property or no because there was amount paid by Regino to Javier
an express trust created? but the interest still with Regino
§ No proof si Modesta
HELD except receipt that Javier
- No yet prescribed because there is received payment but
express trust was contested to be
- The affidavit is in the nature of trust forged
agreement § But it was proven that
- With them as co-owners indeed, Modesta paid her
- Evidenced by the 50-50 partition brother for the amount
of the property CONCLUSION
- Prescription will run from the day of the - Si modesta ang may ari; she acquired it
repudiation of the trust agreement from Javier not thru the pacto de retro
1. unequivocal acts of repudiation sale by unconditional transfer sicen by
amounting to ousting of beneficiary that time Javier became the true owner
2. positive acts of repudation made
known to the beneficiary Doctrines:
3. supported by clear, substantive • A person who has held legal title to land,
evidence coupled with possession and beneficial use of
the property for more
HENCE: Parol evidence on the part of the
purported beneficiary fails

9
than ten years, will not be declared to have document, with Modesta owning a particularly
been holding such title as trustee for himself larger share because she paid a larger amount
and his brothers and (Php1,400 of the Php1,700
sisters upon doubtful oral proof tending to price).
show a recognition by such owner of the From the time Javier sold the lots to the sisters
alleged rights of his brother until the institution of this case, Modesta has
and sisters to share in the produce of the land. been in possession,
[Ergo: The requirement that express trust over use and ownership of the 9 parcels of land since
immovable must be 1910.
in writing should be added as being governed
by the Statute of Frauds.] The Case:
• Express trust over real property cannot be This action was instituted in CFI Pampanga, by
constituted when nothing in writing was the plaintiffs Gamboa, for the purpose of
presented to prove it. (From enforcing partition of
Ty v. Ty) some ten parcels of real property in Sta. Ana,
Facts: Pampanga. The plaintiffs claim that they are co-
(To fully understand the case, here is a brief owners with the
history of the ownership of the lands in defendants Modesta, Pedro and Rafael Gamboa.
dispute) Defendant Modesta denied the allegations,
History: claiming that although one (1) parcel of land
The ten (10) parcels of land all belonged to the belongs to the common
spouses Juan Gamboa and Ana Manago, parents property of plaintiffs and defendants, 9 of the
of the 10 parcels belong to her and have been in
plaintiffs and defendants. On August 27, 1907, adverse possession for more than
the spouses sold 9 out 10 parcels of land under ten years. This is affirmed by co-defendants
a contract of sale with Pedro and Rafael.
pacto de retro for two years to Felipe Javier. The trial court sided with the plaintiffs, and
The spouses failed to redeem the property ordered the partition of the lands in this
within the period (because manner:
they died), which made Javier the absolute • 1/9 each to Petitioner Petrona, Feliciana,
owner of the 9 parcels of land. Serapion, Balbina and Mercedes de Jesus
On June 18, 1910, Javier sold the land to (widow of Marcelo Gamboa)
defendant Modesta Gamboa and Feliciana • 1/9 conjointly owned by heirs of Regino
Gamboa for Php1,700. Gamboa: Andres, Francisco, Juan, Africa and
Php600 was paid in cash, while the remaining Regino
Php1,100 was to be paid in four annual • 3/9 to Modesta, in view of the fact that Pedro
installments. The payment was and Rafael had admitted her right
secured by a mortgage on the said lands. On Modesta appealed the trial judge's decision,
May 21, 1913, Regino P. Gamboa, brother of the hence this case.
sisters, paid the Php1,100 Issues:
to Javier. In effect, under a document 1. Whether Modesta's purchase from Javier was
transferring interest in the mortgage to him, under the pacto de retro contract executed by
Regino became the owner of the their parents, and
Php1,100 debt of his two sisters. whether this purchase was in a trust character.
Modesta and Feliciana satisfied the debt, but
Regino kept the document until his death in Held/Ratio:
1920. The widow of 1. NO and NO.
Regino kept such document, which was used as The period for redemption was only two (2)
evidence in this case. Modesta nevertheless years, and such period was already expired by
produced a receipt confirming the time
her payment of the Php1,100 to Regino. In Javier sold the lands to Modesta and Feliciana.
1922, the sisters partitioned the land, The sale was under a different contract of sale,
evidenced by a written partition executed between
Javier and the sisters, and the purchase was not
for the benefit of the entire Gamboa clan.

10
Modesta and Feliciana were not mere trustees her father hence the 10-year period will
to the plaintiffs. The sale by Felipe Javier to the commence on the repudiation of trust
sisters was - CA reversed coz barred by laches and
an unconditional transfer of title to them. There prescribed already
was no agreement that their purchase of the - Assuming there was trust daw it
property was in a has already been 49 years since
trust character, and plaintiffs have not the father took possession hence
presented any evidence proving such claim. really prescribed
If there was an agreement that the sisters were - Hence this appeal
purchasing the land as trustees, with their
siblings as the beneficiaries, ISSUE
then such agreement could be enforced. But the Was there trust hence the prescriptive period has
lack of such an agreement disprove the not elapsed yet?
plaintiffs claim.
HELD
- There was no trust relationship. Hence
the uniterupted possession of Rojas of the
[Canezo vs Rojas] property for 49 years ripened into
ownership; tax declaration is not
FACTS conclusive proof of ownership but if
- Canezo filed an action for recovery of real coupled with actual possession may bring
property against the second wife of her great weight
father, Concepcion Rojas
- As proof, Canezo said that she bought the - It is true that in express and resulting
property from Crisogono Limpiado trust, no prescription until trustee
although that sale was not reduced in repudiantes
writing but in possession na siya - Express trust concerning real property
- When her husband left for Mindanao, she cannot be established by parole evidence
entrusted the property to her father - In the testimony of Canezo, it was not
CRISPULO but later on it was her established that express trust was really
stepmorther who was cultivating it and intended by the part; maybe just profit-
the property was registered for tax sharing in the copra
declaration under her father’s name - If there was trust, it is just right that title
- For her part, Concepcion said that Cripulo is with the Trustee
bought the property himself; possessed - But this was disputed by Canezo;
and cultivated with Canezo even receiving clearly, no trust intended
produce from the estate as heir - Even Implied Trust, which can be proven
- Also, the case instituted in 1997 by parole evidence was not established
hence already barred from CONSTRUCTIVE TRUST APPLICABLE
claiming rights over the property - By the death of Cripulo in 1978, the
- MTC ruled in favor of Canezo possession of the property should have
- Relying on witness saying that been conveyed to the heirs
Canezo bought it from Limpiado - But this trust is not fiduciary in nature
- Tax declaration of Cripulo was of - Prescribes even if trustee does not
little significance since it was repudiate
recovering from war time kaya
government interested in [Penalber vs Ramos]
collecting taxes than observing
necessities of law FACTS
- On appeal, decision was reversed hinged - Petitioner said she was the owner of the
on the argument that the Rojas are now subject proprerty; registered under her
owner y prescription name; built a residential and warehouse
- On MR, RTC modified hinging on - She claimed that the TCT for that
argument that it did not prescribe since property was cancelled in 1983 and was
the property was entrusted by Canezo to replaced by the name of Spouses Ramos

11
- Apparently this is due to a Deed had been in physical possession of the
of Donation allegedly executed in property
favor of the Ramoses - Re Bartex sale: Ramos claimed that
- Petitioner denied this and said it petitioner knew their intent to sell since
is forgery they posted placards in front
- That she confronted the Ramoses about - And upon sale, petitioners had no
this and said they will just pay for the right for reimbursement
Ugac Properties for P1M - Re Mendoza Property: Ramos paid for it
- They agreed out of their own funds
- She was therefore surprised when the
Spouses were selling the land to Bartex ISSUE
Inc; Was there an established trust between the
- Petitioner sent his son Johnson to caution parties?
Bartex that Spouses Ramos are not the
owner of that property HELD
- Petitioner told Spouses not to sell and
almost agreed
- Petitioner annotated adverse BURDEN TO PROVE TRUST: STRENGTH OF
claim in the title PETITIONER’S EVIDENCE NOT WEAKNESS OF
- But still, spouses continued with the sale DEFENSE
with Bartex; closed deal; property now - Petitioner did not discharge the
under the name of Bartex presumption
- Petitioner wants to cancel all titles - The verbal agreement was unenforceable
SECOND CAUSE OF ACTION - It needs to be in writing for
- That petitioner was in the property where proving but may still be binding
she operates a hardware store while - Thus, verbal agreements can be proven by
leasing it from Maria Mendoza parole evidence
- That to acquire loan, Petitioner had a - Esp in this case because Ramoses
verbal agreement with the Spouses that failed to object
they will buy the Mendoza Property; - So it was admitted that they
Payment will be from the income of the indeed managed the warehouse
hardware but put under the name of - The beginning and ending
Spouses bec they had better credit inventory was different which
standing and use it to secure loan and must have been used to buy the
build bigger building property
- Pursuant to this agreement, the spouses - It was under the Ramoses’ name
entered into a sales agreement with - But these are given little weight to prove
Mendoza; property put under sPouse’s that there was trust relationship
name - The difference was not a clear indication
- Spouses returned the management of the tht it was used to pay for the property
hardware to Petitioner when the full - Burden of proof was in the petitioner and
amount of the property was already paid they failed to prove the same
- Hence, petitioner wanted the Ramoses to
reconvey the property already contending
that Ramoses were mere trustees
RAMOS VERSION
- Tht the petitioners really mortgaged the
Ugac Properties to DBP and asked the
spouses to redeem when it was about to
be foreclosed
- In return, petitioners promised to cede,
convey the Ugac Property to Spouses
- When Ramos paid, the peititoner
executed Deed of Donation to transfer the
Ugac Properties; and since then, Ramos

12
[Torbela vs Rosario] - leased to PT&T and the rest to
Rosario’s sister for Rose Inn
FACTS Hotel and Restaurant
- The subject parcel of land was part of a - Rosario has fully paid his DBP loan hence
larger property (Lot No 356) the mortgage was cancelled
- Registered in the name of - Thereafter, he obtained another loan from
Valeriano, married to Acosta PNB
- For unknown reason, this was given by - First amount not specified
Valeriano to MARTA SEMILLA married to - But increased to P450k
EUGENIO TORBELA - Mortgaged by the SAME property
- Which was thereafter portioned § Annotated in the TCT
to their heirs – TORBELA - Then, the adverse claim annotation was
SIBLINGS thru Deed of cancelled since the first mortgage was
Extrajudicial Partiition (Dec 3, cancelled already
1962) - Then third loan was acquired from Banco
- Dec 12, 1964 – Torbela Sibling executed Filipino worth P1.2M
Deed of Absolute Quitclaim in favor of DR. - Same property mortgaged
ROSARIO for P9.00 - Annotated in the TCT
- Husband of Lena Duque-Rosaio - This was used to pay for the PNB
- He was the sone of Eusofrosina Loan
Torbela Rosario and nephew of - The value of the incomplete two-
the other TORBELA SIBLINGS story building as collateral was
- 374sqm were then put under the name of deducted
Rosario - Feb 13, 1986 – Torbella Siblings filed
- another Deed of Absolute Quitclaim was RECOVERY OF OWNERSHIP AND
executed by Dr. Rosario POSSESSION OVER LOT 356-A
ACKNOWLEDGING that the lot was LENT - Consequently, Rosario defaulted in their
and that he was returning the same for P1 Banko Filipino loan and the property was
- notarized but not immediately extrajudicially foreclosed
annotated to the TCT - Torbella impleaded not in their case
§ which was under his Banco Filipino – the lone bidder in the
name foreclosure
- using the same TCT under his name over - Meanwhile, TOrbela tried to redeem the
the property returned, Dr. Rosario lot from Banco Filipino but failed bec
obtained a loan from DBP for P70k and expiration of the one-year redemption
secured it with the said property period
- mortgage annotated on the TCT - New TCT issued to Banco Filipino
- proceeds used to introduce - Torbella filed annulment of Certificate of
improvements on the property Final Sale and judicial Cencelation of that
- thereafter, Cornelio, on behald of the TCT
Torbela Siblings executed an AFFIDAVIT - Banco Filipino filed Petition for issuance
OF ADVERSE CLAIM against Rosario or Writ of Possession
- that their Deed could not be - Over the property and
registered bec the property was improvements
mortgaged by Rosario - That Rosario and other to abide
- adverse claim was annotated in by said writ
the said TCT - RTC ruled that the mortgage in favor of
- the Deed of Absolute Quitclaim Banco Filipino made by Rosario VALID
executed by Rosario was also - Sale valid
annotated by the siblings in TCT - Banco now owner
- a four-storey hospital building was - Writ of Possession issued
erected, completed - CA denied torbela appeal
- later on converted into a - Hence this petition
commercial building
ISSUE

13
Was there an Express Trust bet Torbela and under his name and executed the
Rosario? second deed, it became Express
Was the Mortgages Rosario acquired valid? Trust

HELD RIGHT TO RECOVER PROPERTY NOT YET
PRESCRIBED
THERE WAS EXPRESS TRUST - As a rule, recovery of real property
- Documentary evidence prove that Torbela prescribes in 10 years
only accommodated Rosario to obtain - EXCEPT if action is based on continuing
DBP loan (first loan) EXPRESS trust which is
- Rosario even executed a Deed signifying IMPRESCRIPTIBLE
that the lot was “borrowed” - Constructive trust prescirbes
- Witness Border Atty Alcantara also - Repudiated express trust
testified that she witnessed the execution prescribes in 10 years after
of the Deed of Absolute Quitclaim repudiation
- Rosario confuses TITLE vs CERTIFICATE - But such repudiation must be
- He based his ownership on the clear and made known to the
TCT under his name Beneficiary
- Court said TITLE is the - In this case, Rosario has deemed to
ownership represented by the repudiate the Trust on Dec 16, 1964 when
document while CERTIFICATE the Torbela instituted case for recovery of
(TCT) was only proof of that title possession
- MERE ISSUANCE OF A TCT - Time when TCT was registered
UNDER HIS NAME DOES NOT under the name of Rosario
BAR POSSIBILITY THAT THE - But as mentioned, putting
PROPERTY IS CO-OWNED OR property under name is not
THAT NAME THEREIN IS JUST A ownership per se
TRUSTEE OR OTHER PARTIES - And repudiation must be clearly
HAVE ACQUIRED INTEREST made and duly communicated
THEREIN - But then the point of reference should be
- Registration is not equal title made on Oct 1993, when Rosario filed a
- Rosario’s contention that he acquired petition for reconstitution
ownership of the property by paying - CA held that he repudiated when
P25k to Torbela pursuant to a verbal he acquired loan from PNB and
agreement is not corroborated by reconstituted the first mortgage
independent evidence without knowledge of the
- Whereas there is the Deed, proof of Trust Torbelas
Relationship and written - But SC said while partly true, this
- When written, everything written is not repudiation itself because
therein, absence of ambiguity, is there was not information made
not subject to other - That the date talaga should be
interpretation March 6, 1981 – when Torbela
- That such deed was executed because it knew tht there was amended
was required prior to the acquisition of loan and mortgage between
loan from DBP and PNB Rosario and PNB
- And the second deed executed by - And since this complaint was filed on Jan
Rosario made him estopped to 1995, action has not prescribed
claim that he only borrowed the
property to obtain loan BANCO FILIPINO NOT MORTGAGEE, BUYER IN
- Under the law, there can be Constructive GOOD FAITH
and Implied Trust first then followed by - Bec it knew that Rosario was not the
Express Trust absolute owner since prior to the Banco
- Such as in this case, there was Loan, the previous mortgage was not yet
Implied trust first but when cancelled AND THE ADVERSE CLAIM
Rosario was able to register it

14
ALSO hence it should have alarmed Banco
that there’s a defect in the title
- The annotation of adverse claim
should have alerted it


[Go vs Estate of FelisaTamio]

FACTS
- FELISA purchased a land from Carmen
Zaragoza and constructed a three-storey
building known as D-Lourds Building
- Resided there until her death in
Feb 19, 1994
- But On Feb 10, 1964, Felisa supposedly
sold the said property to her daughter
and common-law husband for P15k
- Felisima Title cancelled and put
under Felimon Sr and Bella
married to Delfin Sr
- But in 1968, Resurrecion, the other
daughter of Felisa and sister of Bella
began occupying the property and stayed
there until her death in 2007
- The first TCT naming the three as owner
of the property was destroyed; Bella
reconstituted and had TCT registered
again under their names
- When Felisa died in 1994, she apparently
made an undisputed last will making
Resurecion and her two daughters
(BIHIS) owner of half of the property

15

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