TRUST, DEFINED

> A trust is a fiduciary relationship with respect to property which 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
> A person who establishes a trust is called the trustor while the one whose confidence is reposed is the
trustee, and the person for whose benefits the trust has been created is referred to as the beneficiary
> It is the right to the beneficial enjoyment of property, the legal title to which is vested in another

PARTY ACQUIRING PROPERTY BY MISTAKE CONSIDERED TRUSTEE OF AN IMPLIED TRUST

NO TRUST CAN RESULT IN FAVOR OF A PARTY WHO IS GUILTY OF FRAUD OR VIOLATES PUBLIC
POLICY
> There can be no implied trust where the purchase is made in violation of an existing statute and in
evasion of its express provision, since no trust can result in favor of the party who is guilty of the fraud

NO PARTICULAR FORM REQUIRED BY LAW WITH REGARD TRUSTS PRESCRIPTIVE PERIOD

> Ten years from the repudiation of the trust
> It is ten years because just as a resulting trust is an offspring of the law, so is the corresponding
obligation to convey the property and title thereto to the true owner.
> Reckoning point of repudiation is from the moment his possession thereof becomes adverse

TRUSTS, HOW EXPRESSED AND REGISTERED

> If a deed or other instrument is filed in order to transfer registered land in trust, or upon any equitable
condition or limitation expressed therein, or to create or declare a trust or other equitable interests in such
land without transfer, the particulars of the trust, condition, limitation or other equitable interest shall not be
entered on the certificate but only a memorandum thereof shall be entered by the words in trust, or upon
condition, or other apt words, and by a reference by number to the instrument authorizing or creating the
same
> A similar instrument shall be made upon the original instrument creating or declaring the trust or other
equitable interest with a reference by number to the certificate of title to which it relates and to the volume
and page in the registration book in which it is registered
> No instrument which transfers, mortgages, or in any way deals with registered land in trust shall be
registered, unless the enabling power thereto is expressly conferred in the trust instrument or unless a final
judgment or order of court of competent jurisdiction has construed the instrument in favor of
the power, in which case a certified copy of such judgment or order may be registered

IF A NEW TRUSTEE OF REGISTERED LAND IS APPOINTED BY THE COURT, A NEW CERTIFICATE

MAY BE ISSUED TO HIM UPON PRESENTATION TO THE RD OF A CERTIFIED COPY OF THE ORDER
OR JUDICIAL AGREEMENT AND THE SURRENDER FOR CANCELLATION OF THE DUPLICATE
CERTIFICATE

REGISTRATION OF CLAIM BASED ON IMPLIED TRUST

> For the protection of persons claiming an interest in registered land by reason of an implied trust, he
should file with the RD a sworn statement
o Containing the description of the land
o The name of the registered owner
o A reference to the number of the certificate of title

ACTION FOR RECONVEYANCE BASED ON IMPLIED TRUST

An action for reconveyance of registered land based on implied trust prescribes in 10 years, the point of
reference being the date of registration of the deed or the date of the issuance of the certificate of title over
the property. This is especially if the plaintiff is in possession of the property at the time of the filing of the
complaint that the 10 year prescriptive period applies only when the person enforcing the trust is not in
possession of the property. If a person claiming to be its owner is in actual possession of the property, the
right to seek reconveyance, which in effect seeks to quiet title to the property, does not prescribe. The
reason is that the one who is in actual possession of the land claiming to be its owner may wait until his
possession is disturbed or his title is attacked before taking steps to vindicate his right. His undisturbed
possession gives him a continuing right to seek the aid of a court of equity to ascertain and determine the
nature of the adverse claim of a third party and its effect on his own title, which right can be claimed only by
one who is in possession. (Mendizabel, et al. vs. Apao, et al., G.R. No. 143185, February 20, 2006).

IMPLIED TRUST IF PROPERTY IS ACQUIRED BY FRAUDULENT ACT

The act of petitioners in misrepresenting that they were in actual possession and occupation of the
property, obtaining patents and original certificates of title in their names, created an implied trust in favor of
the actual possessors of the property. Under the law, if the 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. 1456, NCC).

In other words, if the registration of the land is fraudulent, the person in whose name the land is registered
holds it as a mere trustee, and the real owner is entitled to file an action for reconveyance of the property.
(Mendizabel, et al. vs. Apao, et al., G.R. No. 143185, February 20, 2006).

IMPLIED TRUST- ACTION TO RECOVER BASED ON IMPLIED TRUST

Action to recover based on implied trust; prescribes after 10 years; except if plaintiff is in possession.
Once again, the Supreme Court ruled in Consuelo Vda. de Gualberto, et al. vs. Francisco Go, et al., G.R.
No. 139843, July 21, 2005 that an action for reconveyance of real property based on implied or constructive
trust is not barred by the 10-year period of prescription only if the plaintiff is in actual, continuous and
peaceful possession of the property involved. In DBP vs. CA, 331 SCRA 267 (2000) it was said that
generally an action for reconveyance based on an implied or constructive trust prescribes in 10-years from
the date of issuance of the decree of registration. However, this rule does not apply when the plaintiff is in
actual possession of the land.

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. 1456, NCC).
Thus, the law thereby creates the obligation of the trustee to reconvey the property and the title thereto in
favor of the true owner. The prescriptive period for the reconveyance for fraudulently registered real
property is ten (10) years reckoned from the date of the issuance of the certificate of title. (Consuelo Vda.
de Alberto, et al. vs. Francis Go, et al., G.R. No. 139843, July 21, 2005).

TRUSTS- IMPLIED TRUSTS, CONSTRUCTIVE TRUSTS

When ones property is registered in anothers name without the formers 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. Meanwhile, 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.