TRUST
- A trust is a fiduciary relationship in which a trustor gives another party, known as the
trustee, the right to hold title to property or assets for the benefit of a third party.
Trustor- a person who establishes a trust
Trustee-one in whom confidence is reposed as regards property for the benefit of another person.
Beneficiary- the person for whose benefit the trust has been created.(ART. 11440)
The characteristics of a trust are:
*It is a relationship;
*it is a relationship of fiduciary character;
*it is a relationship with respect to property, not one involving merely personal duties;
*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 it arises as a result of a manifestation of intention to create the relationship.
(Morales v. CA, 274 SCRA 282, 1997)
Trusts are either express or implied.
*Express trusts are created by the intention of the trustor or of the parties, while implied trusts
come into being by operation of law, either through implication of an intention to create a trust as a
matter of law or through the imposition of the trust irrespective of, and even contrary to, any such
intention.
*Implied trusts are either resulting or constructive trusts. Resulting trusts are based on the
equitable doctrine that valuable consideration and not legal title determines the equitable title or
interest and are presumed always to have been contemplated by the parties.
They arise from the nature or circumstances of the consideration involved in a transaction
whereby one person thereby becomes invested with legal title but is obligated in equity to hold his legal
title for the benefit of another.
*Constructive trusts are created by the construction of equity in order to satisfy the demands of
justice and prevent unjust enrichment. They arise contrary to intention against one who, by fraud, duress
or abuse of confidence, obtains or holds the legal right to property which he ought not, in equity and
good conscience, to hold.
Distinguished from agency.
Express trust
"No express trusts concerning an immovable or any interest therein may be proved by parol
evidence," refers merely to enforceability, not validity of a contract between the parties. Otherwise
stated, for purposes of validity between the parties, an express trust concerning an immovable does not
have to be in writing. Thus, Article 1443 may be said to be an extension of the Statute of Frauds. The
action to compel the trustee to convey the property registered in his name for the benefit of the cestui
for trust does not prescribe. (Heirs of Maria de la Cruz y Gutierez v. CA and Heirs of Maria de la
Cruz y Guevarra, G.R. No. 76590, Feb. 26, 1990)
An express trust can be established through the actions and conduct of the parties, even in the
absence of a formal written document.
Parol evidence may be admissible to prove the existence of a trust, particularly when the parties
do not object to its introduction during trial.
The Torrens system does not protect a trustee from claims by the true beneficiaries of a trust.
(Prospero Ringor v. Concordia Felipa, Emeteria, G.R. No. 147863, August 13, 2004.)
Implied trust
When one’s property is registered in another’s name without the former’s consent, an implied
trust is created by law in favor of the true owner. Implied trusts are those which, without being
expressed, are deducible from the nature of the transaction by operation of law as matters of equity,
independently of the particular intention of the parties.
Constructive trusts are created in order to satisfy the demands of justice and prevent unjust
enrichment. They arise against one who, by fraud, duress or abuse of confidence, obtains or holds the
legal right to property which he ought not, in equity and good conscience, to hold. An action for
reconveyance based upon an implied or constructive trust prescribes in ten (10) years from the
registration of the deed or from the issuance of the title.
Implied Trust: The Court recognized the existence of an implied trust, stating that although the
title was in Miguel's name, the circumstances indicated that he held the property in trust for
Mariano's heirs. The Court explained the nature of implied trusts, distinguishing between
express and implied trusts, and concluded that the evidence supported the existence of an
implied trust in favor of Concepcion. (Miguel Cuenco, substituted by Marietta C. Cuyegkeng v.
Concepcion Cuenco Vda. De Manguerra, G.R. No. 149844, Oct. 13 2004.)
The case reaffirms the principle that an implied trust can arise from the circumstances
surrounding the acquisition of property, even when the legal title is held by another party.
It highlights the importance of possession and the payment of taxes as indicia of ownership.
