Case Page No.

HUANG V. COURT OF APPEALS

G.R. No. 108525; September 13, 1994

VDA.DE ESCONDE V. COURT OF APPEALS

G.R. No. 103635; February 1, 1996

TALA REALTY V. BANCO FILIPINOT

G.R. No. 137533; November 22, 2002

MEDINA V. COURT OF APPEALS V. COURT OF APPEALS

G.R. No. L-26107; November 27, 1981

FILIPINAS PORT V. GO
G.R. No. 161886; March 16, 2007

MENDIZABEL V. APAO
GR NO. 143185; February 20, 2006

VDA.DE GUALBERTO V. GO
G.R. No. 139843; July 21, 2005

HEIRS OF YAP V. COURT OF APPEALS

G.R. No. 133047; August 17, 1999
Express Trust V. Implied Trust

HUANG V. COURT OF APPEALS

G.R. No. 108525; September 13, 1994

Facts:
Private respondents Dolores and Aniceto Sandoval wanted to buy two lots in Dasmarinas Village,
Makati but was allowed to buy only one lot per policy of the subdivision owner. Private
respondents bought Lot 21 and registered it in their name. Respondents also bought Lot 20 but the
deed of sale was in the name of petitioner Ricardo Huang and registered in his name. Respondents
constructed a house on Lot 21 while petitioners were allowed by respondents to build a house on
Lot 20. Petitioners were also allowed to mortgage the Lot 20 to the SSS to secure a loan.
Respondents actually financed the construction of the house, the swimming pool, and the fence
surrounding the properties on the understanding that the petitioners would merely hold title in trust
for the respondents’ beneficial interest. Petitioner Huangs leased the property to Deltron
Corporation for its official quarters without the permission of the respondents. But later, the lessees
prohibited the use of the swimming pool by the respondents, and the Huangs began challenging
the respondents’ ownership of the property. Thus, respondents filed a complaint before the trial
court for the nullification of the deed of sale to the petitioners and the quieting of title of Lot 20.
The trial court found that the respondents were the real owners of the Lot 20 and therefore ordered
the petitioners to vacate the property and to remit to the respondents the rentals earned from Lot
20. The Court of Appeals affirmed the lower court’s decision. Hence, the instant recourse.

Issue:
Whether or not petitioners can claim ownership of the property registered in their name but for
which was paid by the respondents.

Held:
No. Respondent Sandoval provided the money for the purchase of Lot 20 but the corresponding
deed of sale and transfer certificate of title were placed in the name of petitioner Huang. Through
this transaction, a resulting trust was created. Petitioner became the trustee of Lot 20 and its
improvements for the benefit of respondent as owner. Article 1448 of the New Civil Code provides
that 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 for the property. A
resulting trust arises because of the presumption the he who pays for a thing intends a beneficial
therein for himself. Given these provisions of law, petitioner was only a trustee of the property in
question for the benefit of the respondent who is the real owner. Therefore, petitioner cannot claim
ownership of the property even when it was registered in his name. Thus, petition is denied. The
decision of the trial court as sustained by the Court of Appeals is affirmed, with costs against
petitioners.
Express Trust V. Implied Trust

VDA.DE ESCONDE V. COURT OF APPEALS

G.R. No. 103635; February 1, 1996

Facts:
Petitioners Constancia, Benjamin and Elenita, and private respondent Pedro, are the children of
the late Eulogio Esconde and petitioner Catalina Buan. Eulogio Esconde was one of the children
and heirs of Andres Esconde. Andres is the brother of Estanislao Esconde, the original owner of
the disputed lot who died without issue on April 1942. Survived by his only brother, Andres,
Estanislao left an estate consisting of four (4) parcels of land in Samal, Bataan. Eulogio died in
April, 1944 survived by petitioners and private respondent. At that time, Lazara and Ciriaca,
Eulogio's sisters, had already died without having partitioned the estate of the late Estanislao
Esconde.

On December 5, 1946, the heirs of Lazara, Ciriaca and Eulogio executed a deed of extrajudicial
partition, with the heirs of Lazara identified therein as the Party of the First Part, that of Ciriaca,
the Party of the Second Part and that of Eulogio, the Party of the Third Part. Since the children of
Eulogio, with the exception of Constancia, were then all minors, they were represented by their
mother and judicial guardian, petitioner Catalina Buanvda. De Esconde who renounced and
waived her usufructuary rights over the parcels of land in favor of her children in the same deed.
The deed bears the thumbmark of Catalina Buan and the signature of Constancia Esconde, as well
as the approval and signature of Judge Basilio Bautista. Pursuant to the same deed, transfer
certificates of title were issued to the new owners of the properties. Transfer Certificate of Title
No. 394 for Lot No. 1700 was issued on February 11, 1947 in the name of private respondent but
Catalina kept it in her possession until she delivered it to him in 1949 when private respondent got
married. Meanwhile, Benjamin constructed the family home on Lot No. 1698-B which is adjacent
to Lot No. 1700. A portion of the house occupied an area of twenty (20) square meters, more or
less, of Lot No. 1700. Benjamin also built a concrete fence and a common gate enclosing the two
(2) lots, as well as an artesian well within Lot No. 1700.

Issue:
Whether or not the action was already barred with laches and prescription.

Held:
Trust is the legal relationship between one person having an equitable ownership in property and
another person owning the legal title to such property, the equitable ownership of the former
entitling him to the performance of certain duties and the exercise of certain powers by the latter.
Trusts are either express or implied. An express trust is created by the direct and positive acts of
the parties, by some writing or deed or will or by words evidencing an intention to create a trust.
No particular words are required for the creation of an express trust, it being sufficient that a trust
is clearly intended. On the other hand, implied trusts are those which, without being expressed, are
deducible from the nature of the transaction as matters of intent or which are superinduced on the
transaction by operation of law as matters of equity, independently of the particular intention of
the parties. In turn, implied trusts are either resulting or constructive trusts. A deeper analysis of
Article 1456 reveals that it is not a trust in the technical sense for in a typical trust, confidence is
reposed in one person who is named a trustee for the benefit of another who is called the cestuique
trust, respecting property which is held by the trustee for the benefit of the cestuique trust. A
constructive trust, unlike an express trust, does not emanate from, or generate a fiduciary relation.
While in an express trust, a beneficiary and a trustee are linked by confidential or fiduciary
relations, in a constructive trust, there is neither a promise nor any fiduciary relation to speak of
and the so-called trustee neither accepts any trust nor intends holding the property for the
beneficiary.

If, as petitioners insist, a mistake was committed in allotting Lot No. 1700 to private respondent,
then a trust relationship was created between them and private respondent. However, private
respondent never considered himself a trustee. If he allowed his brother Benjamin to construct or
make improvements thereon, it appears to have been out of tolerance to a brother. Consequently,
if indeed, by mistake, private respondent was given the entirety of Lot No. 1700, the trust
relationship between him and petitioners was a constructive, not resulting, implied trust.
Petitioners, therefore, correctly questioned private respondent's exercise of absolute ownership
over the property. Unfortunately, however, petitioners assailed it long after their right to do so had
prescribed. The rule that a trustee cannot acquire by prescription ownership over property entrusted
to him until and unless he repudiates the trust, applies to express trusts and resulting implied trusts.
However, in constructive implied trusts, prescription may supervene even if the trustee does not
repudiate the relationship. Necessarily, repudiation of the said trust is not a condition precedent to
the running of the prescriptive period.

Since the action for the annulment of private respondent's title to Lot No. 1700 accrued during the
effectivity of Act No. 190, Section 40 of Chapter III thereof applies. It provides: Sec. 40. Period
of prescription as to real estate. An action for recovery of title to, or possession of, real property,
or an interest therein, can only be brought within ten years after the cause of such action accrues.
Thus, in Heirs of Jose Olviga v. Court of Appeals, the Court ruled that the ten-year prescriptive
period for an action for reconveyance of real property based on implied or constructive trust which
is counted from the date of registration of the property, applies when the plaintiff is not in
possession of the contested property. In this case, private respondent, not petitioners who instituted
the action, is in actual possession of Lot No. 1700.
Express Trust V. Implied Trust

TALA REALTY V. BANCO FILIPINOT

G.R. No. 137533; November 22, 2002

Facts:
Petitioner Tala Realty Services Corporation alleges that it is the absolute owner of nine parcels of
land and their improvements by virtue of separate Deeds of Absolute Sale executed between Tala
and the respondent Banco Filipino Savings and Mortgage Bank on August 25. 1981. The Bulacan
property is the subject matter of the case. Thereafter, Tala and the Bank entered into separate lease
contracts over the nine properties. The contracts had the same form and terms. except for the
description of the property and the amount of the monthly rentals. The contracts provided for
twenty-year lease periods renewable for another twenty years at the option of the Bank. The
monthly rental for the Bulacan property was P9,800.00. Later that same day, the parties revised
the nine lease contracts. The terms of the lease were shortened to eleven years renewable for a
period of nine years "at the option of the lessee under terms and conditions mutually agreeable to
both parties", but the monthly rental for the Bulacan property remained P9,800.00.

Almost eleven years after the execution of the nine lease contracts. Tala's director, Elizabeth H.
Palma, wrote to the Bank reminding the latter that the contracts were about to expire on August
31, 1992, and that the Bank had earlier signified its interest to renew the lease contracts. Meantime,
Tala would lease the properties to the Bank on a month-to-month basis until the agreement was
finalized. On January 20, 1993, the Bank requested Tala to send its representative to the Bank's
office to negotiate the renewal of the lease. Tala's director, Elizabeth Palma, negotiated the renewal
and submitted a proposal for increased rental. Tala reiterated the increased rental which was agreed
upon in the previous negotiation. Thus, the new monthly rental rate for the Bulacan property was
P31,800.00.

However, for several months from the time of negotiation, the Bank failed to take action on Tala's
proposed terms for the renewal of the lease contract. Tala also informed the Bank that since it had
been ten months since the expiration of the lease contracts in August 1992 and the Bank had not
taken any definite action to renew the contracts despite being furnished copies of the same in
December 1992. Tala declared itself free to "lease, dispose, sell and/or in any way alienate the
bank branch sites subject of the lease agreement." However, the Bank clarified that it is the one
which had the option to renew the lease and that it had communicated to Tale it was exercising its
option to do so. From the time the lease contract over the Bulacan property expired in August 1992
until March 1994, the Bank continued to occupy the subject Bulacan property. It paid Tala monthly
rentals at the old rate of P9,800.00 from September 1, 1992 until March 1994, but refused to pay
the P22,000.00 difference between the old monthly rate and the new rate of P31,800.00.
Issue:
Whether or not the implied trust created under the obligation was valid.

Held:
Tala's right to lease the property to the Bank proceeds from its (Tala's) claim of ownership of the
property based on a contract of sale executed between it and the Bank on August 25. 1981. The
Bank, however, disputes Tale's ownership "in fee simple" as stated in its 20-year lease contract
with Tala as it (the Bank) alleges that there is an implied trust relationship between the Bank as
trustor and beneficiary and Tala as trustee. Pursuant to this implied trust, the Bank in April 1994
demanded Tala to perform its obligation as trustee and return the disputed property to the Bank as
trustor and beneficiary. The Bank is of the view, therefore, that since it had already sought
enforcement of the implied trust and reconveyance of the subject property, the Bank had the right
to its possession and Tala did not have a right to eject it from the property.

The Bank cannot use the defense of nor seek enforcement of its alleged implied trust with Tala
since its purpose was contrary to law. As admitted by the Bank, it "warehoused" its branch site
holdings to Tala to enable it to pursue its expansion program and purchase new branch sites
including its main branch in Makati. and at the same time avoid the real property holdings limit
under Sections 25(a) and 34 of the General Banking Act which it had already reached. The Bank
stated in its Memorandum that "the (n)ew branch sites which the Respondent (Bank) will be
disqualified from buying, by reason of the aforecited limitations under existing banking laws and
regulations, will be acquired for it by the Petitioner (Tala) which will forthwith lease them to the
Respondent (Bank). The Bank also admitted that the agreement that the branch sites will be
returned to the bank anytime at its pleasure at the same transfer price- was differently stated in the
lease contracts as a "first preference to buy" because the Bank was apprehensive that the agreement
to return property. "if spelled out as-is in the documents, might provide basis for the Central Bank
to question the sale and simultaneous lease back of the branch sites as simulated and accordingly,
derail the expansion program of the Respondent".

Clearly, the Bank was well aware of the limitations on its real estate holdings under the General
Banking Act and that its -warehousing agreement" with Tala was a scheme to circumvent the
limitation. Thus, the Bank opted not to put the agreement in writing and call a spade a spade, but
instead phrased its right to reconveyance of the subject property at any time as a "first preference
to buy' at the "same transfer price. This arrangement which the Bank claims to be an implied trust
is contrary to law. Thus, while the sale and lease of the subject property genuine and binding upon
the parties, the implied trust cannot be enforced even assuming the parties intended to create it.
The Bank cannot thus demand reconveyance of the property based on its alleged implied trust
relationship with Tala. Wherefore, the petition is dismissed.
Express Trust – How Established

MEDINA V. COURT OF APPEALS V. COURT OF APPEALS

G.R. No. L-26107; November 27, 1981

Facts:
On March 6, 1957, herein petitioners filed the complaint in the trial court seeking to recover from
herein respondents a parcel of land situated in the sitio of Oac, municipality of Milagros, province
of Masbate, containing an area of 321.1156 hectares and praying that respondents be ordered to
deliver to them possession and ownership thereof with accounting, damages and costs and
litigation expenses.

Among others, the complaint alleged that petitioner Margarita Medina as plaintiff inherited with
her sister Ana Medina the said parcel of land from their father Pedro Medina; that upon their
father's death, she and her sister Ana Medina being then minors were placed under the care and
custody of the spouses Sotero Medina and Restituta Zurbito, as guardians of their persons and
property; that the land in dispute was placed under the management of Sotero Medina as
administrator thereof, and upon Sotero's death under the management of his widow, Restituta
Zurbito; that she later discovered that the land in question was surreptitiously declared for taxation
purposes in the name of Andres Navarro, Jr., grandson of Restituta Zurbito; that said respondents
as defendants had without color of title denied petitioners' ownership and instead had claimed
ownership thereof since the year 1948 and exercised acts of possession and ownership thereon to
the exclusion of petitioners; that petitioners had demanded that respondents vacate the premises
and deliver possession and ownership thereof, but the latter failed and refused to do so; that
respondent Andres Navarro, Jr. had excavated soil from the land in question and sold the same to
the Provincial Government of Masbate without the knowledge and consent of petitioners and
appropriated the proceeds thereof to his personal benefit to the damage and prejudice of the
plaintiff; and that respondent Restituta Zurbito Vda. de Medina never rendered an accounting of
the income of the property in question in spite of their repeated demands and instead appropriated
all the income therefrom to her personal use and benefit.

Respondents as defendants alleged on the other hand that petitioner Margarita and her deceased
sister Ana were but illegitimate children of Pedro Medina and for that reason did not enjoy the
status of recognized natural children, such that when Pedro died intestate, Francisco Medina,
Pedro's father who was still living, succeeded to his properties; that upon the death of Francisco,
his children succeeded to his properties and the land in dispute was adjudicated to Gregorio,
Sotero, and Narciso Medina; that in a deed of extrajudicial partition the land was later adjudicated
solely to Narciso Medina; that Narciso Medina having become sole and exclusive owner of the
land in question by virtue of said partition sold the same to Restituta and her husband Sotero
Medina on June 29, 1924, as evidenced by a deed of sale; that from that day, respondents had
actually possessed the land in question in the concept of owners, publicly, openly and continuously
and adversely against the whole world so that whatever right, interest, title or participation
petitioners had or might have had in the property had been lost by extinctive prescription and by
virtue of the 33 years of exclusive actual possession in the concept of owner of the spouses Sotero
and Restituta Medina who had thereby acquired title thereto by acquisitive prescription, even
granting arguendo that petitioners had some title, right or interest over the land.

Issue:
Whether or not petitioners' action for recovery thereof has been barred by prescription.

Held:
As provided by our Civil Code, "Trusts are either express or implied. Express trusts are created by
the intention of the trusts are of the parties. Implied trusts come into being by operation of law."
(Art. 1441) "No express trusts concerning an immovable or any interest therein may be proven by
parol evidence." (Art. 1443) "An implied trust may be proven by oral evidence." (Art. 1457).
Applied to the case at bar, if an express trust had been constituted upon the occupancy of the
property by respondents in favor of the petitioners, prescription of action would not lie, the basis
of the rule being that the possession of the trustee is not adverse to the beneficiary. But if there
were merely a constructive or implied trust, the action to recover may be barred by prescription of
action or by acquisitive prescription by virtue of respondents' continuous and adverse possession
of the property in the concept of owner-buyer for thirty-three years. The appellate court correctly
held that the facts and evidence of record do not support petitioners' claim of the creation of an
express trust and imprescriptibility of their claim, ruling squarely that "the facts do not warrant the
conclusion that an express trust was created over the land in dispute. Although no particular words
are required for the creation of an express trust, a clear intention to create a trust must be shown
(Article 1444, Civil Code of the Philippines); and the proof of fiduciary relationship must be clear
and convincing. Express trusts are those intentionally created by the direct and positive act of the
trustor, by some writing, deed or win, or oral declaration (54 Am. Jur. 33-34).

The creation of an express trust must be manifested with reasonable certainty and cannot be
inferred from loose and vague declarations or from ambiguous circumstances susceptible of other
interpretations (54 Am. Jur. 48-49). Nowhere in the record is there any evidence, and the plaintiffs
do not even raise the pretention, that the original owner of the property Pedro Medina, father of
plaintiff Margarita Medina, appointed, designated or constituted Sotero Medina (the husband of
defendant Restituta Zurbito Medina) as the trustee of the land in dispute. Plaintiffs' contention that
there was an express trust must, therefore, fail."
Express Trust – How Proven

FILIPINAS PORT V. GO
G.R. No. 161886; March 16, 2007

Facts:
Eliodoro C. Cruz, Filport’s president from 1968-1991, wrote a letter to the corporation’s BOD
questioning the creation and election of the following positions with a monthly remuneration of
P13,050.00 each. Cruz requested the board to take necessary action to recover from those elected
to the aforementioned positions the salaries they have received. In June 4, 1993, Cruz, purportedly
in representation of Filport and its stockholders, among which is herein co-petitioner Minterbro,
filed with the SEC a derivative suit against Filport's BOD for acts of mismanagement detrimental
to the interest of the corporation and its shareholders at large. Cruz prayed that the BOD be made
to pay Filport, jointly and severally, the sums of money variedly representing the damages incurred
as a result of the creation of the offices/positions complained of and the aggregate amount of the
questioned increased salaries. RTC: BOD have the power to create positions not in the by-laws
and can increase salaries. But Edgar C. Trinidad under the third and fourth causes of action to
restore to the corporation the total amount of salaries he received as assistant vice president for
corporate planning; and likewise ordering Fortunato V. de Castro and Arsenio Lopez Chua under
the fourth cause of action to restore to the corporation the salaries they each received as special
assistants respectively to the president and board chairman. In case of insolvency of any or all of
them, the members of the board who created their positions are subsidiarily liable.

Issue:
Whether or not there was mismanagement.

Held:
No. Section 35 of the Corporation Code, the creation of an executive committee (as powerful as
the BOD) must be provided for in the bylaws of the corporation. Notwithstanding the silence of
Filport’s bylaws on the matter, we cannot rule that the creation of the executive committee by the
board of directors is illegal or unlawful. One reason is the absence of a showing as to the true
nature and functions of executive committee. But even assuming there was mismanagement
resulting to corporate damages and/or business losses, respondents may not be held liable in the
absence of a showing of bad faith in doing the acts complained of. Determination of the necessity
for additional offices and/or positions in a corporation is a management prerogative which courts
are not wont to review in the absence of any proof that such prerogative was exercised in bad faith
or with malice.
Implied Trust – Resulting Trust v. Constructive Trust

MENDIZABEL V. APAO
GR NO. 143185; February 20, 2006

Facts:
On 21 March 1955, Fernando Apao ("Fernando") purchased from spouses Alejandro and Teofila
Magbanua ("vendors") a parcel of land with an area of 61,616 square meters ("property") situated
in Malangas, Zamboanga del Sur. Fernando bought the property for P400. The vendors executed
a deed of sale which stated inter alia that they could purchase back the property within six months
for P400, failing which, the sale would become absolute. The vendors failed to repurchase the
property. Fernando thus took possession of... the same. On 1 April 1958, Fernando had the property
surveyed by Engr. Ernesto Nuval together with the piece of land adjacent to it, ... On 12 January
1989, respondents filed an Urgent Motion to Declare Defendants and Hired Hands in Contempt of
Court. Respondents asserted that despite the restraining order issued by the trial court, petitioners,
through their hired hands, namely, Brañanula, Francisco Briones, and Oscar Guevarra, harvested
palay, corn, and coconuts from the property in October 1988 and on 2 December 1988. On 13
January 1989, the trial court issued an Order citing petitioners and their hired hands in contempt
of court. Upon petitioners' Motion for Reconsideration, the trial court set aside the order. On 28
October 1994, petitioners filed a Motion to Offer Documentary Exhibits with Prayer to Submit
Memorandum. The trial court granted the motion in its Order dated 3 November 1994.

Issue:
Whether or not implied trust exists in this case.

Held:
Petitioners claim that while respondents complaint alleged fraud or mistake, it did not state with
particularity the circumstances constituting fraud or mistake, pursuant to Section 5, Rule 8 of the
Rules of Court. Petitioners claim that on this score alone, both the trial court and the Court of
Appeals should have decided the case in their favor. Petitioners argument is untenable. In an action
for reconveyance, all that must be alleged in the complaint are two facts which, admitting them to
be true, would entitle the plaintiff to recover title to the disputed land, namely, (1) that the plaintiff
was the owner of the land or possessed the land in the concept of owner, and (2) that the defendant
had illegally dispossessed him of the land.

In their complaint, respondents clearly asserted that: (1) they were the true and actual possessors
of the property; (2) they purchased the property from spouses Alejandro and Teofila Magbanua on
21 March 1955 as evidenced by a deed of sale pacto de retro which spouses Magbanua executed
in their favor; (3) their ownership of the property became absolute when the vendors failed to
repurchase it within the period stipulated in their contract; and (4) they were fraudulently deprived
of ownership of the property when petitioners obtained homestead patents and certificates of title
in their names. These allegations certainly measure up to the requisite statement of facts to
constitute an action for reconveyance based on an implied trust.

Indubitably, 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.
Implied Trust – Resulting Trust v. Constructive Trust

VDA.DE GUALBERTO V. GO
G.R. No. 139843; July 21, 2005

Facts:
Petitioners are the heirs of Generoso Gualberto, the former registered owner of a parcel of land
situated in Siniloan, Laguna. Sometime in 1965, the subject parcel of land was sold by Generoso
and his wife Natividad to respondents' father, Go Kiang. In April 1973, Natividad executed an
affidavit attesting to the fact that the parcel of land had truly been sold by her and her husband to
the Sps Go.

In December 1973, in a case for unlawful detainer filed against petitioners, they alleged that the
plaintiff therein was not a real party in interest and therefore has no legal capacity and cause of
action to sue them.

Issue:
Whether or not an action for reconveyance of property based on nullity of title prescribes.

Held:
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. The SC has ruled that the 10-year prescriptive period applies
only when the person enforcing the trust, either implied or expressed, 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 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.

In the present case, petitioners remained in actual possession of the property after their father's
sale to Go Kiang and up to the lifting of their complaint in this case. The SC's actual conclusion
is that respondents had actual possession of the subject property ever since. Thus, the action for
reconveyance in the instant case is not in the nature of an action for quieting of title and is not
imprescriptible.
Implied Trust – Resulting Trust v. Constructive Trust

HEIRS OF YAP V. COURT OF APPEALS

G.R. No. 133047; August 17, 1999

Facts:
Ramon Yap purchased a parcel of land situated at 123 Batanes Street, Galas, Quezon City, covered
by Transfer Certificate of Title No. 82001/T-414, from the spouses Carlos and Josefina Nery. The
lot was thereupon registered in the name of Ramon Yap under Transfer Certificate of Title No.
102132. In 1967, Ramon Yap constructed a two storey 3-door apartment building for the use of
the Yap family. One-fifth (1/5) of the cost of the construction was defrayed by Ramon Yap while
the rest was shouldered by Chua Mia, the mother of Lorenzo, Benjamin and Ramon. Upon its
completion, the improvement was declared for real estate tax purposes in the name of Lorenzo
Yap in deference to the wishes of the old woman. On 18 March 1992, Ramon Yap sold the land
and his share of the 3-door apartment to his brother, his herein co-respondent Benjamin Yap
pursuant to a Deed of Sale. The controversy started when herein petitioners, by a letter of 08 June
1992, advised respondents of the formers claim of ownership over the property and demanded that
respondents execute the proper deed necessary to transfer the title to them.

Issue:
Whether or not there was implied trust in this case.

Held:
One basic distinction between an implied trust and an express trust is that while the former may
be established by parol evidence, the latter cannot. Even then, in order to establish an implied trust
in real property by parol evidence, the proof should be as fully convincing as if the acts giving rise
to the trust obligation are proven by an authentic document and cannot be established upon vague
and inconclusive proof. Unfortunately for petitioners, the issues they submit in the case at bar boil
down to the appreciation of the evidence presented.

The Court of Appeals, sustaining the court a quo, has found the evidence submitted by petitioners
to be utterly wanting, consisting mainly of the self-serving testimony of Sally Yap. She herself
admitted that the business establishment of her husband Lorenzo was razed by fire in 1964 that
would somehow place to doubt the claim that he indeed had the means to purchase the subject land
about two years later from the Nery spouses. Upon the other hand, Ramon Yap was by then an
accountant with apparent means to buy the property himself. At all events, deserve utmost regard
when not devoid of evidentiary support. No cogent reason had been shown by petitioners for the
Court to now hold otherwise. A trust or a provision in the terms of a trust would be invalid if the
enforcement of the trust or provision is against the law even though its performance does not
involve the commission of a criminal or tortuous act. It likewise must follow that what the parties
are not allowed to do expressly is one that they also may not do impliedly as, for instance, in the
guise of a resulting trust.