AGENCY

1. Persons dealing with an agent must ascertain not only the fact of agency, but also the nature and extent of his authority—he must
require the presentation of the power of attorney, or the instructions as regards the agency. According to Art.1990 of New Civil
Code, insofar as third persons are concerned, an act is deemed to have been performed within the scope of the agent’s authority,
if such as is within the terms of the power of attorney, as written. Salvador v. Rabaja
2. The power of atty is not a general power of atty as to constitute a universal agency but rather an SPA which does NOT confer the
power to collect the insurance proceeds.
3. “Procuring cause”, in describing a broker’s activity, refers to a cause originating a series of events which, without break in their
continuity, result in the accomplishment of the prime objective of the employment of the broker—producing a purchaser ready,
willing and able to buy on the owner’s terms. To be regarded as the “procuring cause” of a sale as to be entitled to a commission,
a broker’s efforts must have been the foundation on which the negotiations resulting in a sale began. Medrano v. Court of
Appeals, 452 SCRA 77 (2005).
4. In Agency, principal’s personality is extended through the facility of the agent—who, by legal fiction, becomes the principal,
authorized to perform all acts which the latter would have him do. Such a relationship can only be effected with the consent of
the principal, which must not, in any way, be compelled by law or by any court. Orient Air Services v. Court of Appeals, 197 SCRA
645 (1991).
5. Under Art. 1878, an SPA is necessary for agent to enter into a contract by which the ownership of an immovable property is
transmitted or acquired, either gratuitously or for a valuable consideration. Absence of a written authority makes sale of a piece
of land is ipso jure void, precisely to protect the interest of an unsuspecting owner from being prejudiced by the unwarranted act
of another. However, we apply estoppel principle to enforce of the sale with respect to the principal (such as admission in
court).Pahud v. Court of Appeals, 597 SCRA 13
6. Every principal is subject to liability for loss caused to another by the latter’s reliance upon a deceitful representation by an agent
in the course of his employment
a. if the representation is authorized;
b. if it is within the implied authority of the agent to make for the principal; or
c. if it is apparently authorized, regardless of whether the agent was authorized by him or not to make the
representation. Pahud v. CA
7. The basis for agency is representation; there must be an actual intention on principal’s part to appoint, or an intention naturally
inferable from his words or actions; on agent’s part, there must also be an intention to accept the appointment and act on it; in
the absence of such intent, there is no agency. xDominion Insurance Corp. v. CA, 376 SCRA 239 (2002).
8. Although document is entitled “Special Power of Attorney” its wordings show that it sought only to establish an agency that
comprises all the business of the principal within the designated locality, but couched in general terms, and consequently was
limited only to acts of administration. A general power permits the agent to do all acts for which the law does not require a special
power, and only covers acts of administration. Dominion Insurance Corp. v. Court of Appeals, 376 SCRA 239 (2002)
9. The payment of claims by the area manager of an insurance company is not an act of administration, and that since the settlement
of claims was not included among the acts enumerated in the SPA issued by the insurance company, nor is of a character similar
to the acts enumerated therein, then a special power of attorney was required before such area manager could settle the
insurance claims of the insured. Dominion Insurance Corp. v. Court of Appeals, 376 SCRA 239 (2002).
10. Agents who have been authorized to sell parcels of land cannot claim personal damages in the nature of unrealized commission
where the buyer refuses to proceed with the sale. The rendering of such service did not make them parties to the contracts of
sale executed in behalf of the latter. Since a contract may be violated only by the parties thereto as against each other, the real
parties-in-interest, either as plaintiff or defendant, in an action upon that contract must, generally, either be parties to said
contract. xUy v. Court of Appeals, 314 SCRA 69 (1999)
11. Conveyance made by seller of a property acquired through pactum commisoriumis void, and thus not vest title to the buyer.
Such a situation falls squarely under Art. 1456, where the buyer is deemed to have acquired the property by mistake or through
ineffectual transfer.[Title void?]Home Guaranty Corp. v. La Savoje Dev. Corp.
12. A broker who takes secret profits forfeits his right to the commission.
13. When under the agreement the agent becomes responsible for any changes in the acquisition cost of the object he has been
authorized to purchase from a supplier in the United States, the underlying agreement is not an contract of agency to buy, since
a true agent does not bear any risk relating to the subject matter or the price. Being a contract of sale and not agency, any
profits realized by the purported agent from discounts received from the American supplier pertained to it with no obligation to
account for it, much less to turn it over, to the purported principal. xGonzalo Puyat v. Arco
14. When the authority is couched in general terms, without mentioning any specific power to sell or mortgage or to do other
specific acts of strict dominion, then only acts of administration are deemed conferred. Time and again, We have stressed that
the power of administration does not include acts of disposition, which are acts of strict ownership. Bautista-Spille v. NICORP
Management and Dev. Corp
15. Where nephew in his own name sold a house and lot to the company, when in fact it was the uncle’s property, but in the estafa
case filed by the company against the nephew, the uncle swore that he had authorized his nephew to sell the property, the
 uncle can be compelled in the civil action to execute the deed of sale covering the property. “It having been proven at the trial
that he gave his consent to the said sale, it follows that the defendant conferred verbal, or at least implied, power of agency
upon his nephew Duran, who accepted it in the same way by selling the said property. The principal must therefore fulfill all the
obligations contracted by the agent, who acted within the scope of his authority. (Arts. 1709, 1710 and 1727) Gutierrez
Hermanos v. Orense
16. While Agency Law prohibits the area manager from obtaining reimbursement, his right to recover may still be justified under
the Law on Contracts, particularly Article 1236 of Civil Code on payment by a third party of the obligation of the debtor, allows
recovery “only insofar as the payment has been beneficial to the debtor.” Thus, to the extent that the obligation of the insurance
company has been extinguished, the area manager may demand for reimbursement from his principal; otherwise, it would result
in unjust enrichment of petitioner. Dominion Insurance Corp. v. CA, 376 SCRA 239 (2002).
17. When the law expressly provides for solidarity of the obligation, as in the liability of co-principals in a contract of agency, each
obligor may be compelled to pay the entire obligation. The agent may recover the whole compensation from any one of the co-
principals, as in this case. xDe Castro v. Court of Appeals
18. “In the insurance business, the most difficult and frustrating period is the solicitation and persuasion of the prospective clients
to buy insurance policies. Normally, agents would encounter much embarrassment, difficulties, and oftentimes frustrations in
the solicitation and procurement of the insurance policies. To sell policies, an agent exerts great effort, patience, perseverance,
ingenuity, tact, imagination, time and money. Therefore, the respondents cannot state that the agency relationship between
Valenzuela and Philamgen is not coupled with interest. “There may be cases in which an agent has been induced to assume a
responsibility or incur a liability, in reliance upon the continuance of the authority under such circumstances that, if the
authority be withdrawn, the agent will be exposed to personal loss or liability. Furthermore, there is an exception to the
principle that an agency is revocable at will and that is when the agency has been given not only for the interest of the principal
but for the interest of third persons or for the mutual interest of the principal and the agent. In these cases, it is evident that the
agency ceases to be freely revocable by the sole will of the principal.”Valenzuela v. Court of Appeals
19. The act of contractor, who, after executing an SPA to collect whatever amounts may be due to him from the Government, and
thereafter demanded and collected from the government the money the collection, constituted revocation of the agency in favor
of the attorney-in-fact. New Manila Lumber Co., Inc. v. Republic of the Philippines, 107 Phil. 824 (1960).Damages are generally not
awarded to the agent for the revocation of the agency, and the case at bar is not one falling under the exception mentioned,
which is to evade the payment of the agent’s commission. Principal may revoke the agency at will and by selling directly to its
customer has impliedly revoked the agency and thus Adra Corp. is entitled to neither damages nor commission. CMS Logging
v. Court of Appeals, 211 SCRA 374 (1992).
20. The fact that the agent defrauded the principal in not turning over the proceeds of the transactions to the latter cannot in any
way relieve or exonerate such principal from liability to the third persons who relied on his agent’s authority. It is an equitable
maxim that as between two innocent parties, the one who made it possible for the wrong to be done should be the one to bear
the resulting loss. xCuison v. Court of Appeals
21. Where authorized agent failed to indicate in the mortgage that she was acting for and on behalf of her principal; and the Real
Estate Mortgage explicitly shows on its face that it was signed by agent in her own name and in her own personal capacity.
Thus, consistent with the law on agency, the principal cannot be bound by the acts of the agent. The third-party bank has no
one to blame but itself: Not only did it act with undue haste when it granted and released the loan in less than three days, it also
acted negligently in preparing the Real Estate Mortgage as it failed to indicate that agent was signing it for and on behalf of
principal. xBucton v. Rural Bank of El Salvador
22. Where lending bank required borrower to obtain a mortgage-redemption-insurance and deducted the premiums thereto from
the loan proceeds, it was wearing two hats, as a lender and as insurance agent. When it turned out that the bank knew or ought
to have known that borrower was not qualified at his age for MRI coverage which prevented his insurance coverage at the time
of the borrower’s death, the bank was deemed to have been an agent who acted beyond the scope of its authority. Under Art.
1897, if third person dealing with an agent is unaware of the limits of the authority conferred by the principal and third person
has been deceived by the non-disclosure thereof by the agent, then the latter is liable for damages to him. The rule is founded
upon the supposition that there has been some wrong or omission on his part either in misrepresenting, or in affirming, or
concealing the authority under which he assumes to act. DBP v. Court of Appeals
23. Agents who have been authorized to sell parcels of land cannot claim personal damages in the nature of unrealized commission
where the buyer refuses to proceed with the sale. The rendering of such service did not make them parties to the contracts of
sale executed in behalf of the latter. Since a contract may be violated only by the parties thereto as against each other, the real
parties-in-interest, either as plaintiff or defendant, in an action upon that contract must, generally, either be parties to said
contract. xUy v. Court of Appeals
24. Relation of agent to his principal is fiduciary and, an agent is estopped from acquiring or asserting a title adverse to that of the
principal—a position analogous to that of a trustee—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. Hernandez v. Hernandez
25. Where holder of an exclusive and irrevocable power of attorney to make collections, failed to collect the sums due to principal
and thereby allowed the allotted funds to be exhausted by other creditors, such agent has failed to act with the care of a good
 father of a family required under Art. 1887 and became personally liable for the damages which the principal may suffer
through his non-performance. Phil. National Bank v. Manila Surety
26. Ignorance of a person of the scope of the agent’s authority he is dealing with is no excuse and the fault cannot be thrown upon
the principal. A person dealing with an agent assumes the risk of lack of authority of the agent. He cannot charge the principal
by relying upon the agent’s assumption of authority that proves to be unfounded. The principal, on the other hand, may act on
the presumption that third persons dealing with his agent will not be negligent in failing to ascertain the extent of his authority
as well as the existence of his agency. Manila Memorial Park Cemetery, Inc. v. Linsangan
27. Where there is no showing that Brigida consented to or authorized Deganos’ acts, any attempt to foist liability on her through
the supposed agency relation with Deganos is groundless. It was grossly negligent of petitioners to entrust to Deganos, not once
or twice but on at least six occasions as evidenced by receipts, several pieces of jewelry of substantial value without requiring a
written authorization from his alleged principal. Bordador v. Luz
28. When there is nothing the power of atty that clearly grants to Samuel the power to receive the payment in his own name
instead of that of the principal, hence the check issued to Samuel CANNOT be considered payment to principal.
29. Where an agent defies the instructions of its principal in New York not to proceed with the sale due to non-availability of
carriage, it has acted without authority or against its principal’s instructions and holds itself personally liable for the contract it
entered into with the local company. National Power Corp. v. NAMARCO
30. When copra purchased by a company from another company is by way of sale rather than an agency to purchase, the former is
not liable to reimburse the latter for expenses incurred by the latter in maintaining it purchasing organization intact over a
period during which the actual buying of copra was suspended. xAlbaladejo y Cia
31. Principal is not absolve from damages sustained by its buyer based on the fault primarily caused by its agent in pointing to the
wrong lot, since under Arts. 1909 and 1910, the liability of the principal for acts done by the agent within the scope of his
authority do not exclude those done negligently. Pleasantville Dev. v. Court of Appeals
32. Even when agent exceeds his authority, principal is still solidarily liable with the agent, if principal allowed agent to act as
though the agent had full powers. In other words, the acts of an agent beyond the scope of his authority do not bind the
principal, unless the principal ratifies them, expressly or implied. Ratification in agency is the adoption or confirmation by one
person of an act performed on his behalf by another without authority.” Innocent third persons should not be prejudiced if the
principal failed to adopt the needed measures to prevent misrepresentation, much more so if the principal ratified his agent’s
acts beyond the latter’s authority. Filipinas Life Assurance Co. v. Pedroso
33. Instrument which grants agent power “To follow-up, ask, demand, collect and receipt for my benefit indemnities or sum due me
relative to the sinking of M.V. NEMOS in the vicinity of El Jadida, Casablanca, Morocco on the evening of February 17, 1986,” are
SPAs, and exclude any intent to grant a GPA or to constitute a universal agency. Being SPAs, they must be strictly construed, and
cannot be read to give power to the attorney-in-fact “to obtain, receive, receipt from” the insurance company the proceeds arising
from the death of the seaman-insured, especially when the commercial practice for group insurance of this nature is that it is the
employer-policyholder who took out the policy who is empowered to collect the proceeds on behalf of the covered insured or
their beneficiaries. Pineda v. CA, 226 SCRA 754 (1993)
34. The practice in group insurance business, which is consistent with the jurisprudence thereon in the State of California from whose
laws our Insurance Code has been mainly patterned, is that the employer-policyholder who takes out the insurance for its officers
and employees, is the agent of the insurer who has authority to collect the proceeds from the insurer. In this case, the insurer,
through the negligence of its agent, allowed a purported attorney-in-fact whose instrument does not clearly show such power to
collect the proceeds, it was liable therefor under the doctrine that the principal is bound by the misconduct of its agent. xPineda
v. Court of Appeals
35. Although buyer was introduced by broker to seller, nonetheless broker was not entitled to commission even with the
consummation of the sale because the lapse of the period of more than one (1) year and five (5) months between the expiration
of broker’s authority to sell and the consummation of the sale to the buyer, is significant index of the broker’s non-participation
in the really critical events leading to the consummation of said sale. Broker was not the efficient procuring cause in bringing
about the sale and therefore not entitled to the stipulated broker’s commission. Inland Realty v. Court of Appeals, 273 SCRA
70 (1997).
36. Express mandate required by Art. 1874 is for power of attorney to expressly empower the agent “to sell land” belonging to the
principal. It need not contain a specific description of the land to be sold, such that giving the agent the power to sell “any or all
tracts, lots, or parcels” of land belonging to the principal is adequate. xDomingo v. Domingo
37. On the Duties and Obligations Assumed: “The duties and liability of a broker to his employer are essentially those which an agent
owes to his principal. Consequently, the decisive legal provisions on determining whether a broker is mandated to give to the
employer the propina or gift received from the buyer would be Articles 1891 and 1909 of the Civil Code.” (NOTE: Yet the facts did
indicate clearly that the real estate broker was appointed as an exclusive agent.) xDomingo v. Domingo
38. Express mandate required by Art. 1874 is for power of attorney to expressly empower the agent “to sell land” belonging to the
principal. It need not contain a specific description of the land to be sold, such that giving the agent the power to sell “any or all
tracts, lots, or parcels” of land belonging to the principal is adequate. xDomingo v. Domingo
39. As a necessary consequence of such breach of trust, an agent must then forfeit his right to the commission and must return the
part of the commission he received from his principal. Domingo v. Domingo
40. Rallos v. Felix Go Chan & Sons Realty Corp., 81 SCRA 251 (1978):
a. Consent, express or implied, of the parties to establish the relationship;
b. Object, which is the Execution of Juridical Acts in Relation to Third Parties;
c. Agent acts as a representative and not for himself; and
d. Agent acts within the scope of his authority
41. Agency is basically personal, representative, and derivative in nature. The authority of the agent emanates from the powers
granted to him by his principal; his act is the act of the principal if done within the scope of the authority. Qui facit per alium facit
per se. “He who acts through another acts himself.” Consequently, agency is extinguished by the death of the principal or agent.
See article 1931. Sale is NOT valid because even though buyer was unaware of Principal’s death, the brother would have been
aware of Principal’s death as they are siblings. Rallos v. Felix Go Chan & Sons Realty Corp., 81 SCRA 251 (1978).
42. Agency is presumed to be for compensation; when agent performs services for principal at latter’s request, principal’s intent to
compensate the agent will be inferred from the principal's request for the agent’s service. xUrban Bank v. Peña
43. Whether or not an agency has been created is determined by the fact that one is representing and acting for another. The law
makes no presumption of agency; proving its existence, nature and extent is incumbent upon the person alleging it. xUrban
Bank v. Peña
44. There is no agency relationship existing in a tenancy arrangement over agricultural land, since the tenant farmer, who has
possession of the land, acts for his sole benefit and has sole discretion in all matters of agricultural production. He is not under
the control of landowner, whose only right is to demand delivery of agreed number of cavanes of palay, with no say on how
cultivation could be improved to have better yields. xJusayan v.Sombilla
There is an essential distinction between the possession by a receiving teller of funds received from third persons paid to the
bank, and an agent who receives the proceeds of sales of merchandise delivered to him in agency by his principal. In the former
case, payment by third persons to the teller is payment to the bank itself; the teller is a mere custodian or keeper of the funds
received, and has no independent right or title to retain or possess the same as against the bank. An agent, on the other hand,
can even assert, as against his own principal, an independent, autonomous, right to retain money or goods received in
consequence of the agency; as when the principal fails to reimburse him for advances he has made, and indemnify him for
damages suffered without his fault. xChua-Burce v. Court of Appeals, 331 SCRA 1 (2000). Consequently:
 An insurance agent is guilty of estafa for failing to deliver sums of money paid to him as agent for the account of his
employer. Where nothing to the contrary appears, the provisions of Art. 1720 of Civil Code impose upon an agent the
obligation to deliver to his principal all funds collected on his account. xU.S. v. Kiene, 7 Phil 736 (1907)
 A travelling sales agent who misappropriated or failed to return to his principal the proceeds of the things or goods he
was commissioned or authorized to sell, is liable for estafa. xGuzman v. Court of Appeals, 99 Phil. 703 (1956).
 Whereas, bank teller or cash custodian, being merely an employee of the bank, cannot be held liable for estafa, but rather
for theft. xChua-Burce v. Court of Appeals, infra.
As a necessary consequence of such breach of trust, an agent must then forfeit his right to the commission and must return
the part of the commission he received from his principal. Domingo v. Domingo, 42 SCRA 131 (1971).
45. Provision in mortgage contract that in case of accident or loss, finance company shall make a proper claim against insurance
company, was in effect an agency, and under Art. 1884, finance company was bound by its acceptance to carry out the agency.
In spite of borrower’s instructions to make such claims, it insisted on having the vehicle repaired but eventually resulting in loss
of the insurance coverage, the finance company had breached its duty of diligence, and must assume the damages suffered by
borrower, and can no longer collect on the balance of the mortgage loan.BA Finance v. CA
46. An investment management account, where the written instrument provides that bank shall purchase debt securities on behalf
of client and will handle the accounts in accordance with client’s instructions, creates a principal-agent relationship, and not a
trust relationship nor an ordinary bank deposit account. Consequently, under Art. 1910, the client assumed all obligations or
inherent risks entailed by transactions emanating from the arrangement, and the bank may be held liable as an agent, only
when it exceeds its authority, or acts with fraud, negligence or bad faith. Principals are solely obliged to observe the solemnity
of the transaction entered into by the agent on their behalf, absent any proof that the latter acted beyond its authority, and
concomitant to this obligation is that the principal also assumes the risks that may arise from the transaction. Panlilio v.
Citibank
47. The Law on Agency has no application in criminal cases, and no man can escape punishment when he participates in the
commission of a crime upon the ground that he simply acted as an agent of any party. xPeople v. Chowdury,
 TRUSTS
48. 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.” Its characteristics are:
a. it is a relationship;
b. it is a relationship of fiduciary character;
c. It is a relationship with respect to property, not one involving merely personal duties;
d. it 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; and
e. it arises as a result of a manifestation of intention to create the relationship. Morales v. Court of Appeals, 274 SCRA 282
(1997).
49. Where original purchaser of the immovable property had sold all his interest thereto to his brother who reimbursed him all
amounts previously, but continued to pay the balance of the installments in the name of the original buyer with understanding
that upon full payment the title would be transferred to the buyer, am implied trust had been constituted. Heirs of Emilio
Candelaria v. Romero
50. Constructive trusts are fictions of equity that courts use as devices to remedy any situation in which the holder of the legal title,
the purported trustee, should not, in good conscience, retain title over a property. xVda. de Ouano v. Republic
51. A constructive trust arose when the government decided to discontinue the airport project
52. A purchase money trust is furnished by beneficiary of a resulting trust
53. Express trust may not be proven by parol evidence. However, when the oppositors failed to timely object when the petitioner
tried to prove by parol evidence the existence of an express trust over immovable, there is deemed to be a waiver since Art.
1443 “is in the nature of a statute of frauds.”Peñalber v. Ramos, 577 SCRA 509 (2009).
54. A co-ownership is a form of trust, with each owner being a trustee for each other. Mere actual possession by one will not give rise
to the inference that the possession was adverse because a co-owner is, after all, entitled to possession of the property. Thus, as
a rule, prescription does not run in favor of a co-heir or co-owner as long as he expressly or impliedly recognizes the co-ownership;
and he cannot acquire by prescription the share of the other co-owners, absent a clear repudiation of the co-ownership. An action
to demand partition among co-owners is imprescriptible, and each co-owner may demand at any time the partition of the
common property. Heirs of Yambao v. Heirs of Yambao, 789 SCRA 361 (2016). EXCEPTION:In resulting trusts, acquisitive
prescription run in favor of the trustee only when he repudiates expressly the trusts and makes known such repudiation to the
beneficiary, and there is a lapse of 10 years from:
b. Notice of repudiation served upon the beneficiary;
c. Registration of title in name of trustee, when such registration is equivalent to a clear act of repudiation:
 Such as registration by one of the co-owners of title in his sole name in fraud of the other co-owners (which makes
it a class of constructive trust).
55. The requirement in Article 1443 that express trust concerning an immovable or an interest therein be in writing is merely for
purposes of proof not for validity of the trust agreement.
56. Generally, Trustee Does Not Assume Personal Liability on the Trust as to Properties Outside of the Trust Estate – When a trustee
enters into a contract that gives rise to liability, there must be clear indication that he enters into the contract as trustee, so that
he would be liable individually only to the extent of the trust properties: “In other words, when the transaction at hand could
have been entered into by a trustee either as such or in its individual capacity, then it must be clearly indicated that the liabilities
arising therefrom shall be chargeable to the trust estate, otherwise they are due from the trustee in his personal capacity. xTan
Senguan and Co. v. Phil. Trust Co., 58 Phil. 700 (1933).
57. In a resulting trust, the beneficiary’s cause of action arises when the trustee repudiates the trust, not when the trust was created.
xParingit v. Bajit, 631 SCRA 584 (2010).
58. Implied Trusts Distinguished from Quasi-Contracts (Solutio Indebiti) – The Civil Code incorporated “constructive trusts, on top
of quasi-contracts, both of which embody the principle of equity above strict legalism.” When there is already 7 years that passed
from the mistake in crediting an account, which is still within the prescriptive period for the enforcement of a constructive or
implied trust, we rule that petitioner’s claim cannot prosper since it is already barred by laches. PNB v. Court of Appeals, 217
SCRA 347 (1993).
59. A foreigner cannot by way of trust own a land because as to do so would be circumvention of the consti. Muller v. Muller
60. In order that a trust may become effective there must, of course be a trustee and a cestui que trust. The existence of an equivalent
designated position in the testamentary trust to act as trustee “In regard to private trusts it is not always necessary the cestui que
trust should be named, or even be in esse at the time the trust is created in his favor. Thus a devise a father in trust for
accumulation for his children lawfully begotten at the time of his death has been held to be good although the father had no
children at the time of the vesting of the funds in him as trustee. In charitable trusts such as the one here under discussion, the
rule is still further relaxed.Government v. Abadilla
61. A testamentary trust is created by a provision in the will whereby the testator directs the creation of a trust for the benefit of a
secondary school to be established in the town of Tayabas, naming as trustee the ayutamiento or if there be no ayutamiento,
then the civil governor of the Province of Tayabas. xGovernment of P.I. v. Abadilla
62. Under an ordinary devise of land in trust, the trustee holds the legal title and the cestui que trust the beneficial title and the
natural heirs of the testator who are neither trustees nor casuist que trustent have no remaining interest in the land devised
except the right to the reversion in the event the devise should fail, or the trust for other reasons terminate. xGovernment v.
Abadilla
63. Though prescription does not run between the trustee and cestui que trust as long as the trust relations subsist, it runs between
against the trustee and in favor of a third person who holds actual, open, public, and continuous possession adverse to the trust,
of land for over 10 years. xGovernment v. Abadilla
64. Under Art. 1444 “No particular words are required for the creation of an express trust, it being sufficient that a trust is clearly
intended.” The Affidavit of Epifanio is in the nature of a trust agreement. Epifanio affirmed the lot brought in his name was co-
owned by him, as one of the heirs of Jose, and his uncle Tranquilino. And by agreement, each of them has been in possession of
half of the property. Their arrangement was corroborated by the subdivision plan prepared by Engr. Bunagan and approved by
Jose P. Dans, Acting Director of Lands. Heirs of Tranquilino Labiste v. Heirs of Jose Labiste
65. Evidence is clear and conclusive: a clear repudiation of the trust duly communicated to the beneficiary –A trustee who obtains a
Torrens title over the property held in trust by him for another cannot repudiate the trust by relying on the registration. The rule
requires a clear repudiation of the trust duly communicated to the beneficiary. The only act that can be construed as
repudiation was when respondents filed the petition for reconstitution seeking registration only in his name, xHeirs of
Tranquilino Labiste v. Heirs of Jose Labiste
66. Action to quiet title is imprescriptible because they have always lived on the property.
67. However, an action for reconveyance based on implied or constructive trust is imprescriptible if the plaintiff or the person
enforcing the trust is in possession of the property. In effect, the action for reconveyance is an action to quiet the property title,
which 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.  Gabutan v. Nacalaban
68. Where father donates a piece of land in the name of the daughter but with verbal notice that the other half would be held by
her for the benefit of a younger brother, coupled with a deed of waiver subsequently executed by the daughter that she held
the land for the common benefit of her brother, created an implied trust in favor of the brother under Art. 1449. Adaza v.
Court of Appeals
69. An implied trust in order to be recognized must measure up to the yardstick that a trust must be proven by clear, satisfactory
and convincing evidence, and cannot rest on vague and uncertain evidence or on loose, equivocal or indefinite
declarations.Salao v. Salao, 70 SCRA 65 (1976).Consequently:
70. Existence of public records other than the Torrens title indicating a proper description of the land, and not the technical
description thereof, and clearly indicating the intention to create a trust, is considered sufficient proof to support the claim of the
cestui que trust. xMunicipality of Victorias v. CA, 149 SCRA 32 (1987).
71. An affidavit of the fact of resulting trust against contrary affidavits, as well as the transfer certificates of title and tax declarations
to the contrary, do not support clearly the existence of trust. xBooc v. Five Start Marketing Co., Inc., 538 SCRA 42 (2007).
72. 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. In the present case, there was no evidence of any transaction
between the petitioner and her father from which it can be inferred that a resulting trust was intended.” Cañezo v. Rojas, 538
SCRA 242 (2007).
73. Testimonies even if admitted into evidence is NOT trustworthy and CANNOT prove an implied trust considering that Carla,
Gavino and Rod would execute a detailed partition over a 2 hectare land planted to coconut trees, it is incredible that they will
not document their agreement over the larger 8 hectare mango orchard.
74. A trustee cannot acquire by prescription because the possession of a trustee is NOT adverse in case of an express trust.
75. Tamayo v. Callejo, 46 SCRA 27 (1972), recognized that a trust may have a constructive or implied nature in the beginning, but
the registered owner’s subsequent express acknowledgement in a public document of a previous sale of the property to
another party, had the effect of imparting to the aforementioned trust the nature of an express trust. Torbela v. Spouses
Rosario
76. Trustors are the credit card companies because it entrusts the funds to Pagamino; trustee is Pagamigo which is the company
who has the confidential credit card info of the buyers because it has naked title to the funds in the bank accounts; beneficiaries
are the merchants because they in the end are the beneficial owners of the funds since they have bound themselves to deliver
goods purchased by internet buyers.