October 15, 2012 Trust

1. Distinguish real property from real interest? Real property refers to immovable property enumerated in the NCC. Real interest is the interest over these real property (ana?) 2. Constructive trust from solutio indebiti? Im not sure with my answer but in the case of PHILIPPINE NATIONAL BANK vs. COURT OF APPEALS AND B.P. MATA AND CO., INC. Applying American case law, quasi-contractual obligations like solutio indebiti give rise to a personal liability ordinarily enforceable by an action at law, while constructive trusts are enforceable by a proceeding in equity to compel the defendant to surrender specific property. To be sure, the distinction is more procedural than substantive. (I tend to doubt this answer, ambot is my final
answer and hope dili mugawas sa exam)

the prescriptive period for quasi-contracts is six years as provided by Article 1145 while in constructive trust, prescriptive period is ten (10) years. Ana ang case, Further reflection on these concepts reveals that a constructive "trust" is as much a misnomer as a "quasi-contract," so far removed are they from trusts and contracts proper, respectively. In the case of a constructive trust, as in the case of quasi-contract, a relationship is "forced" by operation of law upon the parties, not because of any intention on their part but in order to prevent unjust enrichment, thus giving rise to certain obligations not within the contemplation of the parties.

3. Modes of acquiring ownership The modes of acquiring ownership include the ff: a. Occupation b. Intellectual creation c. Law d. Succession e. Tradition as a result of contract f. Donation g. Prescriptive 4. Is a trust a contract? (answers not found in the book) No, although trusts are very similar to contracts and for most intents and purposes, they are the same as contracts. However, trusts are governed by different laws than contracts and also require different elements for their formation. Therefore, while trust is similar to a contract, it is also different in many ways. Rather than calling trust a contract, it is better to refer to both contracts and trusts as agreements. (wahaha!!! If you have different answer, go im not sure of this hehe Godbless) While a trust requires some of the same elements of a contract in order to be enforceable, trusts include four specific elements as well: a grantor who creates the trust; beneficiaries who receive benefits from the trust; assets or property, which is the subject of the trust; and a trustee, who is the individual in charge of administering the trust. More so, implied trust is even more created by operation of law and is surely not a contract, maybe at the least, constructive trust is a quasi contract but definitely not a contract. 5. May a trustee claim title by prescription? We must distinguish: Page 1

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 In case of express trust and resulting implied trust, the trustee cannot acquire by prescription of ownership over property entrusted to him until and unless he repudiates the trust. In constructive trust, prescription may supervene even if the trustee does not repudiate the relationship. 6. What is the rule when the property is sold but price is paid by another person? General rule: a resulting trust is created in favor of a person from whom a consideration comes for conveyance of property, whether realty or personalty, to another. Exception: no trust is implied if the person to whom the legal estate is conveyed is a child, legitimate or illegitimate, of the payor, because it is presumed that a gift or donation is intended in favor of a child. 7. Distinguish resulting trust from constructive trust? Resulting trust intention to create a trust I implied or presumed by law Constructive trust imposed by law irrespective of intention 8. What is purchase money resulting trust? It is an implied trust created when the property is sold, and legal estate is granted to one party but the price is paid by another for the purpose of having the beneficial interest of the property. 9. Express trust v. implied trust? It must be borne in mind that in an express trust, the trustee has active duties of management while in a constructive trust, the duty is merely to surrender the property. Express trust come into existence only by the execution of an intention to create it by the trustor - If it concerns immovable property, it cannot be proven by parol evidence Implied trust created by operation of law - either real or personal property, it can be proven by parol evidence 10. How many party are there in a trust? There are three, namely, the trustor, trustee and the beneficiary. 11. Is express trust unilateral or bilateral? Express trust is a unilateral contract, upon which it imposes obligation only on the part of the trustee. 12. What do you mean by parol evidence? Parol refers to verbal expressions or words. Verbal evidence, such as the testimony of a witness at trial. 13. What do you mean by spendthrift trust? One establish when the beneficiary need to be protected, because of his inexperience or immaturity from his imprudent spending habits or simply because the beneficiary is spindrift. 14. Can express trust be proved by parol evidence? We must distinguish: Page 2

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a. if it concerns an immovable property, then it cannot be proven by parol evidence as provided for by law. b. If it concerns a movable property, then it can. 15. What is the rule when the price of sale paid is borrowed money? The general rule is that the use of borrowed money in making a purchase does not raise a resulting trust in favor of the lender. When money is borrowed to purchase property, and the conveyance is made, not to the borrower, but to the lender who takes title to property in his own name in order to secure loan, a resulting trust in favor of the borrower arises. 16. What do you mean by tacking? The process whereby an individual who is in Adverse Possession of real property adds his or her period of possession to that of a prior adverse possessor. In order for title to property to vest in an adverse possessor, occupancy must be continuous, regular, and uninterrupted for the full statutory period. If privity exists between the parties, such that one possessor gives possession of the land to the next, the time periods that the successive occupants have had possession of the property may be added or tacked together to meet the continuity requirement. Tacking is allowed only when no time lapses between the end of one occupant's possession and the beginning of another's occupancy. In addition, possession by the prior occupant must have been adverse or under color of title. 17. What do you mean by prescription? Prescription is a mode of acquiring ownership and other real rights through the lapse of time in the manner and under the conditions laid down by law. In the same manner, rights and actions are lost by prescriptions. 18. Kinds of implied trust? The two kinds of implied trust includes: a. constructive trust b. resulting implied trust 19. What is the concept of implied trust? The concept of implied trust is that from the facts and circumstances of a given case, the existence of a trust relationship is inferred in order to effect the presumed intention of the parties. 20. What do you mean by laches? Laches is unreasonable delay in the bringing of a cause of action before the court of justice. Laches is failure or neglect of, for unreasonable and unexplained length of time, to do that which, by exercising due diligence, culd or should have been done earlier. 21. Is an oral express trust valid? Yes, accordingly, the requirement that the express trust be written is only for enforceability, not for validity between the parties. Regarding third person, trust must be: in public instrument and Page 3

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registered in the registry of property, if it concerns real property. Hence, by analogy, this requirement may also be included under the Statute of Frauds. 22. Can a private instrument of express trust be admitted as evidence regarding immovable property? As between the parties, yes, private instrument can be admitted as evidence for the purpose of its existence and validity. Regarding third person, trust must be: in public instrument and registered in the registry of property. Yes, the defense that express trust cannot be proved by parol evidence may be waived, how much more if it is in private instrument? Haha!!! 23. Is acceptance of trust necessary? We must distinguish: a. In the case of express trust, acceptance by the trustee is necessary to charge him of the office of the trustee and administration of the trust and to vest legal title in him. However, his acceptance of trust is not necessary to its existence and validity. b. Acceptance to the trust by the beneficiary is essential to the creation and validity of the trust. 24. Trust fund doctrine in corporate law. The assets of the corporation as represented by its capital stock are regarded as trust fund to be maintained unimpaired for the payment of corporate creditors in the sense that there can be no distribution of such assets among the stock holders without provision being first made for payment of corporate debts.

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