G.R. No. 58010. March 31, 1993.

EMILIA O'LACO and HUCO LUNA, petitioners, vs. VALENTIN CO CHO CHIT, O LAY KIA and COURT OF
APPEALS, respondents.

Breach of Trust; Half-Sisters; Resulting and Constructive Trusts.

Facts: Emila is the half sister of O Lay Kia who is, as is her husband Co Cho Chit, a Chinese national and cannot
own property in the Philippines. O lay kia bought a piece of land and had it named under her sister, Emilia.
Emilia on the other hand sold the property to the Church without the knowledge of her sister. When O Lay Kia
found out, they immediately filed a case for breach of contract.

Issue: Whether or not there was a trust relationship between the sisters?

Held: Yes. ”… trust relations between parties may either be express or implied. Express trusts are those which
are created by the direct and positive acts of the parties, by some writing or deed, or will, or by words
evincing an intention to create a trust.

Implied trusts are those which, without being express, are deducible from the nature of the transaction as
matters of intent, or which are super induced on the transaction by operation of law as matters of equity,
independently of the particular intention of the parties. Implied trusts may either be resulting or constructive
trusts, both coming into being by operation of law. 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. On the other hand, 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.” In this
case, the court cited five instances that prove a trust relationship. First, sps O Lay Kia were in possession of all
the pertinent documents of the sale from the beginning until the end of the transaction. Second, there is
a previous case of similar facts involving O lay kia and her brother on a different parcel of land decided in her
favor. Third, the circumstances leading to Emilia acquiring a title to the land was dubious. Fourth, until the
sale to the church, Emilia actually recognized the trust(by promising to take care of the transfer to the actual
owners as soon as she is able.)

A resulting trust is repudiated if the following requisites concur: (a)the trustee has performed unequivocal
acts of repudiation amounting to an ouster of the cestui qui trust; (b) such positive acts of repudiation have
been made known to the cestui qui trust; and, (c) the evidence thereon is clear and convincing. And finally, fifth, Emilia
actually had no source of income to show how it was possible for her to purchase the land.

Juan v. Yap, Sr.

G.R. No. 182177, 30 March 2011
FACTS:
Spouses Maximo and Dulcisima Cañeda mortgaged to petitioner Richard Juan, employee and
nephew of respondent Gabriel Yap, Sr., two parcels of land in Talisay, Cebu to secure a loan of
₱1.68 million, payable within one year. On 30 June 1998, petitioner, represented by Solon, sought
the extrajudicial foreclosure of the mortgage. Although petitioner and respondent participated in the
auction sale, the properties were sold to petitioner for tendering the highest bid of ₱2.2 million. No
certificate of sale was issued to petitioner, however, for his failure to pay the sale’s commission.

On 15 February 1999, respondent and the Cañeda spouses executed a memorandum of agreement
(MOA) where (1) the Cañeda spouses acknowledged respondent as their “real mortgagee-creditor
while Richard Juan is merely a trustee of respondent; (2) respondent agreed to allow the Cañeda
spouses to redeem the foreclosed properties for ₱1.2 million; and (3) the Cañeda spouses and
respondent agreed to initiate judicial action “either to annul or reform the [Contract] or to compel
Richard Juan to reconvey the mortgagee’s rights. Three days later, the Cañeda spouses and
respondent sued petitioner in the Regional Trial Court of Cebu City (trial court) to declare respondent
as trustee of petitioner vis a vis the Contract, annul petitioner’s bid for the foreclosed properties,
declare the Contract “superseded or novated” by the MOA, and require petitioner to pay damages,
attorney’s fees and the costs. The Cañeda spouses consigned with the trial court the amount of
₱1.68 million as redemption payment.

In his Answer, petitioner insisted on his rights over the mortgaged properties. Petitioner also
counterclaimed for damages and attorney’s fees and the turn-over of the owner’s copy of the titles
for the mortgaged properties.

ISSUE:

Whether an implied trust arose between petitioner and respondent, binding petitioner to hold the
beneficial title over the mortgaged properties in trust for respondent.

RULING:

Yes, the existence of an implied trust is factual.

An implied trust arising from mortgage contracts is not among the trust relationships the Civil Code
enumerates. The Code itself provides, however, that such listing “does not exclude others
established by the general law on trust. Under the general principles on trust, equity converts the
holder of property right as trustee for the benefit of another if the circumstances of its acquisition
makes the holder ineligible “in good conscience [to] hold and enjoy [it]. As implied trusts are
remedies against unjust enrichment, the “only problem of great importance in the field of constructive
trusts is whether in the numerous and varying factual situations presented there is a wrongful
holding of property and hence, a threatened unjust enrichment of the defendant.”

Applying these principles, this Court recognized unconventional implied trusts in contracts involving
the purchase of housing units by officers of tenants’ associations in breach of their obligations, the
partitioning of realty contrary to the terms of a compromise agreement,and the execution of a sales
contract indicating a buyer distinct from the provider of the purchase money. In all these cases, the
formal holders of title were deemed trustees obliged to transfer title to the beneficiaries in whose
favor the trusts were deemed created.