Title V.

- TRUSTS (n)
CHAPTER 1
GENERAL PROVISIONS

Art. 1440. A 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 known as the trustee; and the person for whose
benefit the trust has been created is referred to as the beneficiary.
Art. 1441. Trusts are either express or implied. Express trusts are created by the intention of the trustor
or of the parties. Implied trusts come into being by operation of law.

Art. 1442. The principles of the general law of trusts, insofar as they are not in conflict with this Code,
the Code of Commerce, the Rules of Court and special laws are hereby adopted.

CHAPTER 2
EXPRESS TRUSTS

Art. 1443. No express trusts concerning an immovable or any interest therein may be proved by parol
evidence.
Art. 1444. No particular words are required for the creation of an express trust, it being sufficient that a
trust is clearly intended.

Art. 1445. No trust shall fail because the trustee appointed declines the designation, unless the contrary
should appear in the instrument constituting the trust.

Art. 1446. Acceptance by the beneficiary is necessary. Nevertheless, if the trust imposes no onerous
condition upon the beneficiary, his acceptance shall be presumed, if there is no proof to the contrary.

CHAPTER 3
IMPLIED TRUSTS

Art. 1447. The enumeration of the following cases of implied trust does not exclude others established
by the general law of trust, but the limitation laid down in Article 1442 shall be applicable.

Art. 1448. There is an implied trust when property is sold, and the legal estate is granted to one party
but the price is paid by another for the purpose of having the beneficial interest of the property. The
former is the trustee, while the latter is the beneficiary. However, if the person to whom the title is
conveyed is a child, legitimate or illegitimate, of the one paying the price of the sale, no trust is implied
by law, it being disputably presumed that there is a gift in favor of the child.
Art. 1449. There is also an implied trust when a donation is made to a person but it appears that
although the legal estate is transmitted to the donee, he nevertheless is either to have no beneficial
interest or only a part thereof.

Art. 1450. If the price of a sale of property is loaned or paid by one person for the benefit of another and
the conveyance is made to the lender or payor to secure the payment of the debt, a trust arises by
operation of law in favor of the person to whom the money is loaned or for whom its is paid. The latter
may redeem the property and compel a conveyance thereof to him.

Art. 1451. 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 the true owner.

Art. 1452. 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.

Art. 1453. When property is conveyed to a person in reliance upon his declared intention to hold it for,
or transfer it to another or the grantor, there is an implied trust in favor of the person whose benefit is
contemplated.

Art. 1454. 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 fulfillment of
the obligation is offered by the grantor when it becomes due, he may demand the reconveyance of the
property to him.

Art. 1455. 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.

Art. 1456. 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.

Art. 1457. An implied trust may be proved by oral evidence.

PD1529
Section 96. Against whom action filed. If such action is brought to recover for loss or damage or for
deprivation of land or of any estate or interest therein arising wholly through fraud, negligence,
omission, mistake or misfeasance of the court personnel, Register of Deeds, his deputy, or other
employees of the Registry in the performance of their respective duties, the action shall be brought
against the Register of Deeds of the province or city where the land is situated and the National
Treasurer as defendants. But if such action is brought to recover for loss or damage or for deprivation of
land or of any interest therein arising through fraud, negligence, omission, mistake or misfeasance of
person other than court personnel, the Register of Deeds, his deputy or other employees of the Registry,
such action shall be brought against the Register of Deeds, the National Treasurer and other person or
persons, as co-defendants. It shall be the duty of the Solicitor General in person or by representative to
appear and to defend all such suits with the aid of the fiscal of the province or city where the land lies:
Provided, however, that nothing in this Decree shall be construed to deprive the plaintiff of any right of
action which he may have against any person for such loss or damage or deprivation without joining the
National Treasurer as party defendant. In every action filed against the Assurance Fund, the court shall
consider the report of the Commissioner of Land Registration.

Action for Damages

PINO V COURT OF APPEALS

The rule applicable to this controversy is well-settled. Where the certificate of title is in the name of the
vendor when the land is sold, the vendee for value has the right to rely on what appears on the
certificate of title.

Transfer Certificate of Title No. T-32683 was issued in the name of Rafaela Donato on March 2, 1967.
The present action for reconveyance was filed only on March 9, 1982. Clearly then, the action has
already prescribed because it was filed fifteen (15) years after the issuance of TCT No. T-32683. Even if
the period were to be reckoned from the registration of the deed of absolute sale in favor of petitioner
on July 13, 1970, which is also the date of the issuance of Transfer Certificate of Title No. T-49380 in the
name of petitioner, the action of private respondents had already prescribed because a period of eleven
(11) years, seven (7) months and twenty-six (26) days has elapsed from July 13, 1970 to March 9,
1982.LLjur

Action for Reversion

REPUBLIC V COURT OF APPEALS

Appeal by certiorari from the decision of the Court of Appeals in CA-G.R. No. 52323-R, entitled "Republic
of the Philippines, vs. Landolino Alpuerto, et al.", a>rming the order of the Court of First Instance of
Quezon which dismissed the complaint for annulment and cancellation of titles and reversion of lands
Bled by petitioner, as well as from the resolution dated November 22, 1976 of the Court of Appeals,
denying petitioner's motion for reconsideration.

On April 6, 1971, the Solicitor General Bled for the government a complaint for annulment, cancellation
of titles and for reversion of Lot No. 7718 of Cadastral Survey of Mauban, Quezon to the State (pp. 96-
100, rec.), on the ground that the decision of the court dated August 3, 1966 adjudicating Lot No. 7718
to Perpetuo Alpuerto, its order for the issuance of the decree of registration dated September 22, 1966,
as well as the Original CertiBcate of Title No. 013541 and all the transfer certiBcates of title derived
therefrom, are all null and void and without legal effect because the court had no jurisdiction to allocate
the subject land, which is inalienable.
Forthwith, petitioner elevated the matter to US through the present petition, which WE find to be
meritorious. In the first place, the land in question is not within the jurisdiction of the Director f Lands,
subject to the immediate control of the Secretary of Agriculture and Commerce, direct executive control
of the survey, classification, lease, sale or any other form of concession or disposition and management
of the lands of the public domain (Sec. 4, Commonwealth Act No. 141), the same law explicitly states
that timber and mineral lands shall be governed by special laws. And the Forestry Law (Secs. 1814- 1842,
Revised Administrative Code, as amended) now vests in the Director of Forestry (now Director of Forest
Development under P.D. No. 705) the jurisdiction and authority over forest or timberland.

he forest zone or under the jurisdiction of the Bureau of Forestry, the Director of Lands had no
jurisdiction to dispose of said land under the provisions of the Public Land Law, and the petitioner
acquired no right to the land." It follows that "if a person obtains a title under the Public Land Act which
includes, by oversight, lands which cannot be registered under the Torrens system, or when the Director
of Lands did not have jurisdiction over the same because it is a public forest, the grantee does not, by
virtue of the said certiBcate of title alone, become the owner of the land illegally included" (Republic vs.
Animas, 56 SCRA 499, 503; Ledesma vs. Municipality of Iloilo, 49 Phil. 769). The patent or title thus
issued is void at law, since the o>cer who issued it had no authority to do so (Republic vs. de la Cruz, 67
SCRA, 221).

In any case, even granting that the said o>cial was negligent, the doctrine of estoppel cannot operate
against the State. "It is a well-settled rule in our jurisdiction that the Republic or its government is
usually not estopped by mistake or error on the part of its o>cials or agents.

Consequently, the State may still seek the cancellation of the title issued to Perpetuo Alpuerto and his
successors-in-interest pursuant to Section 101 of the Public Land Act. Such title has not become
indefeasible, for prescription cannot be invoked against the State (Republic vs. Animas, supra).