IMPORTANT RATIO FOR AGENCY

General Provisions

Orient Air v. CA
In an agent-principal relationship, the personality of the principal is
extended through the facility of the agent. Such a facility can only be
effected with the consent of the principal, which must not, in any way,
be compelled by law or by any court.

Rallos v. Felix Go Chan

Act done by the agent after the death of the principal is valud and
effective only under (2) conditions: (a) Agent acted w/o knowledge of
the death of the principal; and (b) 3rd person also contracted with the
agent himself acted in good faith. Sale was void because Simeon
Rallos knew that his principal was dead by the time he made the sale
in favour of FGC & Realty.

Air France v. CA
Teresita was the agent of the Ganas and notice to her of the rejection
of the request for extension of the validity of the tickets was notice to
the Ganas, her principals.

Santos v. Buenconsejo
The SPA executed in favour of Santos did not transfer the share of
Anatolio despite causing a subdivision plan; SPA could not have
vested in him any property right in his own name.

Albaladejo v. Phil. Refining Co.

Contention that contract between petitioner and defendant created a
relation of principal and agent between parties did not hold water,
because principals must indemnify the agent for damages incurred in
carrying out the agency. In making purchases for producers
(defendants), plaintiff was buying upon its own account.

Thomas v. Pineda
The relations of an agent to his principal are fiduciary and it is an
elementary and very old rule that in regard to property forming the
subject matter of the agency, the agent is stopped from acquiring or
asserting a title adverse to that of the principal. His position is
analogous to that of a trustee and he cannot consistently, with the

principles of good faith, be allowed to create in himself an interest in

opposition to that of his principal or cestui que trust. A receiver,
trustee, attorney, agent, or any other person, occupying fiduciary
relations respecting property or persons are utterly disabled for
acquiring for his own benefit the property committed to his custody for
management.

Palma v. Cristobal
Petitioner only held the property and secured its registration in his
name in a fiduciary capacity, and it is elementary that the trustee
cannot acquire by prescription the ownership of the property entrusted
to him. It is logical that all benefits derived by the possession and acts
of the agent, as such agent, should accrue to the benefit of his
principal.

Valera v. Velasco:
Misunderstanding between petitioner and respondent and the filing of
the suit by the respondent prove the breach of the juridical relation
between them, for, although the agent has not expressly told his
principal that he renounced the agency, yet neither dignity nor
decorum permits the latter to continue representing a person who has
adopted such an antagonistic attitude towards him. The fact that an
agent institutes an action against his principal for the recovery of the
balance in his favour resulting from the liquidation of the accounts
between them arising from the agency, and renders a final account of
his operations, is equivalent to an express renunciation of the agency,
and terminates the juridical relation between them.

Cui v Cui (yung tamang case with the agency issue, paraphrased):
An agent may now buy property placed in his hands for sale or
administration, provided that the principal gives his consent thereto.

Salamat Aaron and Carlos!

Allied Free Workers Union v. Compania Maritima
An agent can not represent two conflicting interests that are
diametrically opposed.

Far Eastern Export & Import v. Lim Teck Suan

No commission or monetary consideration was paid or agreed to be
paid by the buyers to the Export Company and the Universal Trading
Co., proof that there was no agency or brokerage, and that the profit

of the latter was undoubtedly the difference between the price listed to
the buyers and the net or special price quoted to the sellers by the
suppliers. Where a foreign company has an agent here selling its
good and merchandise, that same agent could not very well act as an
agent for local buyers, because the interests of his foreign principal
and those of the buyer would be in direct conflict. He cannot serve two
masters at the same time.

Nielsen and Co v. Lepanto

A corporation who merely acts as a purchasing agent and still requires
the consent of its principal to purchase goods is not a partner but
rather an agent.

In Nielson v Lepanto, the correct case is dated dec 28, 1968. I think
what is instructive there is the difference between agency and lease of
services. The former contemplates execution of juridical acts (power
to bring about business relations between principal and agent) while
the latter contemplates only material (non-juridical) acts.

Shell Co v. Firemans Insurance Co

Porfirio dela Fuente was actually an agent of shell because he was
employed by the company, the company could remove him at its
behest, the service station belonged to Shell and bore its trade name,
the operator (de la Fuente) sold the products of the company, the
equipment used by the operator belonged to Shell, the price of the
products was fixed by shell, and the receipt signed by the operator
merely indicated he was an agent of Shell. As the act of the agent or
his employees acting within the scope of his authority is the act of the
principal, the breach of the undertaking by the agent is one for which
the principal is answerable.

Sevilla v. CA
Even though she bound herself as surety to the lease, a true
employee cannot be made to part with his or her own money in
pursuance of his employees business, or otherwise assume any
liability thereof. The essence of a contract of agency is that the agent
renders services in representation of in behalf of another, but Sevilla
solicited airline fares for and in behalf of Tourist World Service,
received 4% of the proceeds out of her own efforts, and pre-assumed
her principals authority as owner of the business on 11/28/61. The

agency compatible with the intent of the parties cannot be revoked at

will as it is one coupled with an interest, the agency having been
created for mutual interest of the agent and the principal.

Lim v. People
Petitioner wa held to be an agent, as petitioner was asked if she could
be an agent of Ayrosos in selling tobacco, and that she admitted that
pursuant to the agreement, she would be given something. It was not
a contract of sale, as the facts revealed that appellant received the
tobacco to be sold at P1.30/kilo, and the proceeds to be given to the
complainant as soon as it was sold.

San Diego v. Nombre

While it may be admitted that the duties of a judicial administrator and
an agent are in some respects identical, the provisions on agency
should not apply to a judicial administrator. A judicial administrator is
appointed by the court. He is a representative of the Court and the
heirs of the creditors of the estate. A judicial administrator, before
entering into his duties, is required to file a bond. These
circumstances are not true in the case of agency, as the agent is only
answerable to his principal. The protection which the law gives the
principal, in limiting the powers and rights of an agent, stems from the
fact that control by the principal can only be through agreements,
whereas acts of a judicial administrator are subject to specific
provisions of law and orders of the appointing court.

De la Pena v. Hidalgo
As to renunciation of agency: Federico Hidalgo definitely renounced
his agency and was duly terminated, according to Article 1732, as
although the word renounced was not used in the letter, when the
agent informs his principal that for reasons of health and by medical
advice, that he is about to depart from the place where he is
exercising his trust and where the property subject to administration is
situated, abandons the property, and turns it over to a third party,
without stating when he ma return to take charge of the
administration, renders accounts of its revenues up to a certain date,
and transmits to his principal a general statement, it is then
reasonable and just to conclude that said agent expressly and
definitely renounced his agency.

As to implied agency: Antonio Hidalgo administered the property of

Pena y Gomez by virtue of an implied agency vested in him by an
owner who was not unaware of the fact, who knew that Hidalgo took
charge of the administration. Implied agency is founded on the lack of
contradiction of opposition, which constitutes simultaneous agreement
on the part of the presumed principal to the execution of the contract,
while in the management of anothers business, there is no
simultaneous consent, either express or implied, but a fiction of
presumption of consent because of the benefit received.

an agent must be presumed to include all the necessary and usual

means of carrying his agency into effect.

Conde v. CA
An implied agency must be held to have been created from their
silence or lack of action, or their failure to repudiate the agency.

Infante v. Cunanan
Although a principal may withdraw authority given to an agent at will,
and despite the rule that When the terms of an agreement have been
reduced to writing, it is to be considered as containing all those terms,
and therefore, there can be, between their parties and their
successor-in-interest, no evidence of terms of the agreement other
than the contents of the writing, the situation varies if one of the
parties takes advantage of the benevolence of the other and acts in a
manner that would promote his own selfish interest.

Keeler v. Rodriguez
Montelibano exceeded the limits of his authority, as plaintiff never
authorized him to receive the money for his behalf. Defendant made
payment at his own risk upon the representations of Montelibano. The
fact that Montelibano told Rodriguez of his authority to collect means
that there was some discussion as to Montelibanos authority.

Rallos v. Yangco
Defendant advertised that Collantes was his agent, and having given
them a special invitation to deal with such agent, it was the duty of
defendant to give due and timely notice to plaintiffs of the revocation
of defendants power of attorney. Failing to do so, he is responsible to
them for whatever goods may have been in good faith and without
negligence sent to the agent, without knowledge, actual or
constructive, of the termination of the agency.

Macke v. Camps
One who clothes another apparent authority as his agent, and holds
him out to the public as such, cannot be permitted to deny the
authority of such person to act as his agent, to the prejudice of
innocent 3rd persons dealing with such person in good faith and un the
following preassumptions or deductions: (1) Whenever a party has, by
his own declaration or act, intentionally and deliberately led another to
believe a particular thing true, and to act upon such belief, he cannot
in any litigation arising out of such declaration, act, or omission, be
permitted to falsify it, and unless the contrary appears, the authority of

Danon v. Brimo
The broker must be the efficient agent or the procuring cause of the
sale. The means employed by him and his efforts must result in the
sale.
Alternatively, where no time for continuance of the contract is fixed by
its terms, the other party is at liberty to terminate it at will.

Two exceptions when there is an ambiguity in writing:

a. When there is a mistake
b. When there is an ambiguity

Manotok Bros v. CA
General rule: A broker or agent is not entitled to any commission until
he has successfully done the job given to him. Private respondents
case however was within the exception. When there is a close,
proximate, and casual connection between the agents effort and
labor and the principals sale of his property, the agent is entitled to
commission.

Domingo v. Domingo
With regard to general provisions: The duties and liabilities of a broker
to his employer are essentially those which an agent owes to his
principal.

An agent who takes a secret profit in the nature of a bonus, gratuity,

or personal benefit from the vendee, without revealing the same to his
principal, the vendor is guilty of a breach of his loyalty to the principal
and forfeits his right to collect the commission from his principal, even

if the principal does not suffer any injury by reason of such breach of
fidelity, or that he obtained better results or that the agency is a
gratuitous one, or that usage or custom allows it, because the rule is
to prevent the possibility of any wrong, not to remedy or repair an
actual damage. By taking such profit/bonus/gift/propina from the
vendee, the agent thereby assumes a position wholly inconsistent
with that being an agent for his principal, who has a right to treat him,
insofar as his commission is concerned, as if no agency has existed.

A lawyer is equally liable under NCC 1720 if he fails to deliver to his

client all the money and property received by him for his client despite
his attorneys lien.

SIASAT v. IAC
The principal cannot deprive his agent of the commission agreed
upon by cancelling the agency, and therefor, dealing directly with the
buyer.

Additional:
Several kinds of agents:
Universal: are authorized to do all acts for his principal which can
lawfully be delegated to an agent
General: are authorized to do all acts pertaining to a business of a
certain kind or at a particular place, or all acts pertaining to a business
of a particular class or series
Special: are authorized to do some particular act or to act upon some
particular occasion. He acts usually in accordance with (1) specific
instructions; or (2) under limitations necessarily implied from the
nature of the act to be done.

GERMANN & CO v. DONALDSON

Kammerzell had the authority to institute a suit, because the suit was
brought to collect a claim accruing in the ordinary course of the
plaintiffs business. It is an act of strict ownership, and is necessarily
a part of the mere administration of such business as described in the
instrument in question, and only incidentally, if at all, involving a power
to dispose of the property.

PNB v. Sta Maria

Maximos siblings, save for Valeriana, are not liable for payment of
loans which were secured by their respective properties, as the

authority granted by his siblings was merely to mortgage the property

jointly owned by them. There was no authority to contract loans for
their own behalf. The properties they allowed to be mortgaged would
be subject to foreclosure and sale to respond for obligations
contracted by Macimo but it does not mean that they can be held
personally liable for the payment of such obligations.

Director of Public Works v. Sing Juco (no authority to bind into

suretyship)
Tan Ong Sze was liable upon the contract of suretyship as the
suretyship contract was signed by Mariano de la Rama, who had no
authority to do so, as can be gleaned on from the two documents
exhibiting the powers of attorney. According to CC 1827, A guaranty
shall not be presumed; it must be expressed and cannot be extended
beyond its specified limits. By analogy, a power of attorney to
execute a contract of guaranty should not be inferred from vague or
general words, especially when such words have their origin and
explanation in particular powers of a wholly different nature.

Phil Sugar Estates v. Poizat (tried to bind his wife to a mortgage)

It is a general rule in the law of agency that in order to bind the
principal by a deed executed by an agent, the deed must upon its
grace purport to be made, signed, and sealed in the name of the
principal. If, on the contrary, though the agent describe the name, the
words of the grant, covenant and the like, purport upon the face of the
instrument to be his, and the seal purports to be his seal, the deed will
bind the agent only and not the principal.

Rural Bank of Bombon v. CA

In order to bind the principal by a mortgage on real property executed
by an agent, it must upon its face purport to be made, signed, and
sealed in the name of the principal; OTHERWISE, it will bind the
agent only. Not enough merely that the agent was in fact authorized to
make the mortgage, if he has not acted in the name o the principal.
Not sufficient that he describes himself as acting by virtue of a power
of attorney in the mortgage, if the agent has acted in his own name
and has set his own hand and seal upon the mortgage. Unless it is
executed for and on behalf of his principal, and as the act and deed of
the principal, it is not valid as to the principal.

Commercial Bank and Trust v. Republic Armored Car (fraud by

officers)
The mismanagement of the business of a party by his agents does
not relieve said party from the responsibility that he had contracted to
third persons, especially in the case at bar where the written
agreement contains no limitation to defendant-appellants liability.

Lim Tiu v. Rementeria

Defendants are not liable to pay plaintiffs the value of the
merchandise, because they did not know that Domingo Tim Bun Liu
was an agent for plaintiff. According to CC 1717, when an agent acts
in his own name, the principal shall have no action against the
persons with whom the agent has contracted, nor the said persons
against the principal.

PNB v. Paz Agudelo

Paz is subsidiarily liable for the payment of the loans obtained by

Mauro from PNB for the security of which he constituted on the
mortgage on the real estate belonging to respondent, because
although the SPA did not authorize Mauro to constitute a mortgage on
the real estate of the principal to secure his personal obligation, and
although PNB was duty-bound to ascertain the extent of the agents
authority before dealing with him, an affidavit dated 1/15/26 stated
that Paz gave her consent to the lien on a certain parcel of land. A
mortgage on real property of the principal not made and signed in the
name of the principal is not valid as to the principal.

hence the agent is bound to the principal, although he does not

assume the character of such agent and appears acting in his own
name. Corollarily, if the principal can be obliged to perform his duties
under the contract, then it can also demand the enforcement of its
rights arising from such contract.

Awad v. Filma Mercantile

Code of Commerce 246: When the agent transacts business in his
own name, it shall not be necessary for him to state who is the
principal and he shall be directly liable, as if the business were for his
own account, to the persons with whom he transacts the same, said
persons not having any right of action against the principle, not the
latter against the former, the liabilities of the principal and of the agent
to each other always being reserved.

Jimenez v. Rabot
Although a power of attorney to convey real property ought to appear
in a public instrument, just as any other instrument intended to
transmit or convey interest in such property ought to appear in a
public instrument, a power of attorney to convey such property, even
though in the form of a private document, will operate with effect,
inasmuch as a private document is competent to create, transmit,
modify, or extinguish a right in real property.

Sy Juco and Viardo v. Sy Juco (son bought stuff for himself using his
parents money)
The agents apparent representation yields to the principals true
representation and the contract must be considered entered into
between the principal and the third person. If the obligation belongs to
the former, to him alone must also belong the rights arising from the
contract.

General Rule: The description must be sufficiently definite to identify

the land either from the recitals of the contract or deed from the
external facts referred to in the document, thereby enabling one to
determine the identity of the land and if the description is (1) uncertain
on its face or (2) is shown to be applicable with equal plausibility to
more than one tract, it is insufficient. HOWEVER, the SC saw no
reason why the performance of an act within the scope of his authority
should not bind the plaintiff to the same extent as if she had given the
agent the authority to sell any or all and she had conveyed only one
parcel.

NFA v. IAC (commission agent misappropriated payment for his

principal)
An undisclosed principal cannot maintain an action upon a contract
made by his agent unless such principal was disclosed in such
contract. Contract involved a thing (ship) belonging to the principal,

Katigbak v. Tai Hing

The power is general and authorizes Po Ejap to sell any kidn of realty
belonging to the principal. The use of the subjective
pertenezcan (might belong) and not the indicative
pertenecan (belong) means that Po Tecsi meant not only the

property he had at the time of the execution of the power, but also
such as he might afterwards have during the time it was in force.
While it is true that a power of attorney not recorded in the registry of
deeds is ineffective in order that an agent or attorney-in-fact may
validly perform acts in the name of his principal, and that any act
performed by the agent by virtue of said power with respect to the
land is ineffective against a third person who, in good faith, may have
acquired a right thereto, it does, however, bind the principal to
acknowledge the acts performed by his attorney-in-fact regarding said
property.

B. Obligations of the Agent

PNB v. Manila Surety and Fidelity Co.

The CA held PNB negligent not in collecting from the principal debtor
but for its neglect in collecting the sums due to the debtor due from
the Bureau of Public Works, contrary to its duty as holder of an
exclusive and irrevocable power of attorney to make such collections,
since an agent is required to act with the care of a good father of a
family (art. 1889) and becomes liable for damages which the principal
may suffer through his non-performance (1884). Its powers were
expressly irrevocable, meaning the BPW could very well refuse to
make payments to the principal debtor itself, and a fortiori reject and
demands by the surety.

Ramos v. Caoibes
Caoibes was not entitled to half the amount of the check on the
strength of the power of attorney executed in his favour, as it was only
a power of attorney, and Caoibes, as agent, had the obligation to
deliver the amount collected by virtue of said power to his principal,
Concepcion, or after he death, to the administratrix of the estate.
Under CC 1711, the contract of agency is presumed to be gratuitous,
unless the agent is a professional agent. There is no proof that
Caoibes was an agent; alternatively, under CC 1732, an agency is
terminated, among other causes, by the death of the principal or the
agent.

Hermanos v. Hermanos: Tl;dr

Domingo v. Domingo, supra

Art. 1891: Every agent is bound to render an account of his

transactions and to deliver to the principal whatever he may have
received by virtue of the agency, even though it may not be owing to
the principal

An agent who takes a secret profit in the nature of a bonus, gratuity,

or personal benefit from the vendee, without revealing the same to his
principal, the vendor is guilty of a breach of his loyalty to the principal
and forfeits his right to collect the commission from his principal, even
if the principal does not suffer any injury by reason of such breach of
fidelity, or that he obtained better results or that the agency is a
gratuitous one, or that usage or custom allows it, because the rule is
to prevent the possibility of any wrong, not to remedy or repair an
actual damage. By taking such profit/bonus/gift/propina from the
vendee, the agent thereby assumes a position wholly inconsistent
with that being an agent for his principal, who has a right to treat him,
insofar as his commission is concerned, as if no agency has existed.

US v. Reyes
Reyes was guilty of estafa, because even if he were to receive 20%,
he had no right to deduct such amount from the sum collected. Right
to collect the 10% or 20% was not upon his choosing, and Reyes was
an agent bound to pay all he had received by virtue of the agency.

Monna v. Garcia Bosque

The principal, Monna, was not bound by the agreement entered into
by Figueras and Bosque because although the partial substitution of
agency conferred to Figuerras all the powers conferred by the original
power of attorney, the sole purpose of the agreement was to authorize
Figueras Hermanos to collect the balance due to plaintiff. Nothing
indicated to the effect that Figueras hermanos can discharge any of
the debtors or to novate a contract.

DBP v. CA
The liability of an agent (DBP) who exceeds the scope of his authority
depends upon whether the third party is aware of the limits of the
agents powers. No showing that Dans knew of DBPs limited
authority. Agent is liable for damages if the third person dealing with
an agent is unaware of the limits of the authority conferred by the
principal on the agent and the third person is deceived by the nondisclosure of the agent.

Philippine Products Company v. Primateria

The agents of Primateria are NOT liable personally because
Primateria was NOT duly proven to be a foreign corporation or a
societe anonyme. Plaintiff also cannot recover from BOTH Primateria
and its agents because there was no proof that Primaterias agents
exceeded the limits of their authority, because Primateria never raised
or denied its liability on the round of excess authority, and that 1897
does not hold that in cases of excess authority that BOTH the
principal and agent are liable to the other contracting party.

Albert v. University Publishing Co.

Aruego should be held a party to the case because he was an agent
for a non-existent entity, and as was held in Salvatiera v. Garlitos, A
person acting or purporting to act on behalf of a corporation which has
no valid existence assumes such privileges and obligations and
becomes liable for contracts entered into or for other acts performed
as such agent.

Eugenio v. CA
As far as third persons are concerned, an act is deemed to have been
performed within the scope of the agents authority, if such is within
the terms of the power allowing, as written, even if the agent has in
fact exceeded the limits of his authority according to an understanding
between the principal and his agent.

Green Valley Poultry v. IAC

Green Valley is liable for the sums Squibb seeks to recover, whether
or not it is an agency to sell or a contract of sale, because, if the
contract is an agency to sell, it is liable because it sold on credit
without authority from its principal. CC 1905 states that The
commission agent cannot, without the express or implied consent of
the principal, sell on credit. Should he do so, the principal may
demand from him payment in cash, but the commission agent shall be
entitled to any interest or benefit which may result from such sale.

Metropolitan Bank and Trust v. CA

Metrobanks assertion that it was acting only as a collecting agent for
Golden Savings and that it has a right to charge back to the
depositors account any amount previously credited, whether or not

such item is returned, does not hold water. Metrobank is not a mere
collecting agent. According to CC 1909, The agent is responsible not
only for fraud, but also for negligence, which shall be judged with
more of less rigor by the courts, according to whether the agency was
or was not for a compensation. Metrobank was negligent in assuring
GS it was safe to allow Gomez to withdraw proceeds of the treasury
warrants.

C. Obligations of the Principal

Prudential Bank v. CA
Bank liable for quasi-delict when it was sued for breach of contract, as
NCC 1910 and NCC 1911 apply. Also, A banks is liable for wrongful
acts of its offices done in the interests of the bank or in the course of
dealings of the officers in their representative capacity but not for acts
outside the scope of their authority.

Cuison v. CA
The one who clothes another with apparent authority as his agent and
holds himself out to the public as such cannot be permitted to deny
the authority of such person to act as his agent, to the prejudice of
innocent third parties dealing with such person in good faith and in the
honest belief that he is what he appears to be. Cuison held out Tiu as
the manager of his Bindondo store.

D. Mode of Extinguishment of Agency

Rallos v. Felix Go Chan

Sale as to Concepcions share was invalid as Simeon Rallos knew of
his principals death when he contracted the sale. His agency was
extinguished upon the death of his principal (1919).

Diolosa v. CA
Although 1920 allows the principal to revoke the agency at will, he
could not do so without damages. Their agency agreement stipulated
that the agency terminates ...until all the subject property as
subdivided is fully disposed of. The fact that they needed to reserve
some lots for the use of the family cannot prevail over the clear terms
of the agreement.

PNB v. IAC

PNB was stopped from foreclosing the mortgage on Alfredos lot to

pay Sepas 71-72 crop because it informed Alfredo that it would not
do so. While CC 1358 requires that the revocation of Alfredos SPA to
mortgage his property should appear in a public instrument,
nevertheless, a revocation embodied in a private writing is valid and
binding between the parties. PNB acted in bad faith.

Panuyas and his wife only knew of the power of attorney, but not the
cloud pertaining to the sale made by the heirs of Dayao.

Salao v. Salao
Documentary evidence must be presented in order to prove an
express trust over an allegedly co-owned fishpond. This is in
accordance with ART 1443 which states that "No express trust
concerning an immovable or any interest therein may be proved by
parol evidence."

Dy Buncio v. Ong Guan Co

The making and accepting of a new power of attorney, whether it
enlarges or decreases the power of the agent under a prior power of
attorney, must be held to supplant and revoke the latter where the two
are inconsistent. If the new appointment with limited powers not
revoke the GPA, the execution of the second power of attorney would
be a mere futile gesture.

Infante v. Cunanan, supra

Although the Civil Code recognizes her right to revoke the agency,
and that defendants agreed to cancel the authority, they did so upon
the assurance that they would be given the commission if the property
would be sold to their own buyer.

Coleongco v. Claparols (greedy Chinese men tried to oust honest

businessman)
Coupled with an interest or not, a power of attorney may be revoked
for a just cause, such as when the agent betrays the interest of his
principal. The irrevocability of the power of attorney may not be used
to shield the perpetration of acts in bad faith, breach of confidence, or
betrayal of trust by the agent, for that would amount to holding that a
power coupled with an interest authorizes the agent to commit frauds
against the principal.

Herrera v. Luy Kim Guan

Sales made by Luy Kim Guan were valid, despite the death of his
principal, because it was proven that LKG was unaware of his
principals death in 1936.

Buason & Reyes v. Panuyas

Buason did not have a better claim than Panuyas over the parcel of
land because they did not register the sale of the parcel of land, and
the power of attorney executed by the true owners of the land was
annotated/inscribed at the back of the same original certificate of title.

IMPORTANT RATIO for TRUSTS

De Leon v. Molo-Peckson
It is not necessary that the beneficiary had knowledge of, or
consented to, the trust at the time of its creation. If the trust imposes
no onerous condition, acceptance by the beneficiary shall be
presumed (ART. 1446).
An acknowledgment by a person that the property whose title he
holds is being held by him for the use of another is a declaration of an
express trust.

Government v. Abadilla
It is not necessary that the cesti que trust or beneficiary be specifically
named or be existing at the time of the creation of trust for the same
to be valid.
(Example: A man can be a trustee to his future children [not
specifically named and not exsiting] even if at the time of the creation
of the trust he is still childless.)
The Statute of Limitation or prescription does not run between the
trustee and the beneficiary as long as the trust relations subsist i.e. no
repudiation of trust by the trustee. It may run, however, between the
trust and third persons.

Cristobal v. Gomez
If the purpose of the original trust has been accomplished, the trust is
extinguished and the trustee must return to the trustor or beneficiary
the property held in trust.

Prescription is not effective in favor of a trustee in possession of a

property under a continuing and subsisting trust. This is because the
possession is not adverse.

Cuaycong v. Cuaycong
A trustor who expressly stated that he is establishing a trust over a
land in favor of his brothers and sisters created an express trust and
not an implied trust. In such case, parol evidence is inadmissible to
prove the existence of the (express) trust. ART. 1443.

Araneta v. Perez
The prohibition on attorneys who happen to be executors or
administrators not to charge against the estate fees for legal services
rendered DOES NOT APPLY to trustees. The duties of the former are
fixed by law while those of the latter by intention of the trustor or of the
parties. Hence, an attorney trustee may charge fees against the trust
estate for legal services he rendered.

Sinaon v. Sorongon
Though an implied trust may be proved by parol evidence (ART.
1457), it cannot be established against the recitals of a Torrens title
upon vague and conslusive proof.
An action for reconveyance of realty based on an implied trust
prescribes in ten years. The prescriptive period is reckoned from the
issuance of title which operates as a constructive notice.

Mindanao Development Authority v. CA

The 'deed of sale' which states that "I hereby agree to work for the
titling of the entire area of my land under under my own expenses and
the expenses for the titling of the portion sold by me shall be under
the expenses of the said Juan Cruz Yap Chuy" does not create an
express trust. It merely states that the obligation to pay the expenses
for the registration of land shall be made by one of the parties.
Declaration of trust must be clear and unequivocal.

O'Laco v. Co Cho Chit

If the issuance of title in someone's name is not adverse because of
the existence of a trust relations i.e. title was registered in another's
name because the true owners were Chinese nationals who cannot
own land, prescription begins to run only when a clear act of
repudiation of the trust is committed by the trustee (in this case by
sale of the land held in trust).

Roa Jr. v. Court of Appeals

A constructive trust, which is a remedy against unjust enrichment, is
created if a person acquires property by committing a breach of
confidence of another.
If a person succeeds in titling a land in his name by virtue of promises
(e.g. replacement with another parcel of land or payment of a certain
amount) made to the current possessor, such person becomes a
mere trustee of the land in case he fails to fulfill his promises. The
land, although acquired without fraud, cannot be retained by the
person now holding it.

Perez v. Araneta
Beneficiaries of a trust constituted (only) on the income and profits of
the trust estate are not entitled to the profits realized in the sale of
trust properties for the same are part of the capital and hence do not
constitute income or profits.

B. Express Trusts

C. Implied Trusts

A resulting trust is repudiated when:

1. The trustee has performed clear and unequivocal acts of
repudiation amounting to an ouster of the cestui que trust
2. The acts of repudiation must have been made known to the cesitu
que turst
3. The evidence thereof is clear and convincing
Special Services Corporation v. Centro La Paz
A judgment creditor cannot levy on properties merely being held in
trust by the judgment debtor.
An express trust can be proven by preponderance of documentary
evidence such as deed of donation, deed of acknowledgment, and
written petition for tax exemption.

Chiao Liong Tan v. CA

An implied trust is created when the price of a property is paid by one

party but is registered in another's name. ART. 1448

Homena v. Casa
The doctrine of implied trust cannot be invoked based on an illegal
contract.

A contract of sale establishing a trust over a land which must not be

sold within the five year prohibitory period (but the land was sold
nonetheless, transfer of title to happen after five years) under the
Homestead Patent Law is void ab initio. Hence, no implied trust was
created.

Heirs of Candelaria v. Romero

An implied trust is created if one party made the necessary payments
for the purchase of land yet the title was registered in the name of
another in the understanding that transfer of title will be made at a
later time. The heirs of the former may demand reconveyance of said
land from the heirs of the latter.

PNB v. CA
A payment by mistake creates either a solutio indebiti under ART.
2154 or a constructive trust under ART. 1145. The former prescribes in
six years, the latter in ten years. The mistaken payor may opt to avail
of an action to enforce either of the two.
An action for recovery of the amount paid by mistake filed seven
years later by a banking institution is however barred by laches, which
deals with the effects of unreasonable delay. The bank must bear the
cost of its own negligence.