July 15, 1966 ANTONIO ARANETA, vs.

ANTONIO PEREZ

.FACTS: The trust was established pursuant to the will of the late Angela S. Tuason, Appellee J. Antonio Araneta was appointed trustee on March 24, 1950. In the order appealed from the lower court approved, upon petition of the trustee, a deed of donation executed by him on April 30, 1955 in favor of the City of Manila covering a lot pertaining to the trusteeship, with an area of 853.1 square meters. Such approval was given over the opposition of appellant Antonio Perez. As found by the lower court, the said lot was being used as a street and had been so used since prior to its acquisition by the late Angela S. Tuason. The street leads to other lots also pertaining to the trusteeship with an area of 8,176.6 square meters, and it is through the said street that the tenants occupying those other lots pass in going to and from their respective houses. On the lot in question the trustee had been paying a realty tax of P100.00 yearly. The lower court also found that the lots aforementioned would be converted into a residential subdivision and that for the purpose the corresponding plan has been prepared; that the lot donated to the City of Manila appears on the plan to be included among the areas covered by the street layouts as required by law; and that the donation would save the trusteeship the amount of the realty tax and relieve it from the duty of maintaining the lot in usable condition as a street. There can be no dispute therefore that the donation was beneficial to the trusteeship, not to say necessary under the law if the planned residential subdivision is to be realized. ISSUE: IS THE DONATION VALID? RULING: Appellant does not deny the beneficial aspects of the donation. But he maintains that it is invalid on the ground that under Article 736 of the Civil Code "guardians and trustees cannot donate the properties entrusted to them". It should be remembered that this article is a new provision of the Civil Code, which took effect only on August 30, 1950 (Rep. Act No. 386) and does not apply retroactively to the testamentary trust established upon the death of Angela S. Tuason on March 20, 1948, taking into account Articles 2253 and 2255, which provide against such retroactive operation on acts or events that took place under former laws. There being nothing in the old Civil Code which prohibits a trustee from donating properties under trusteeship, and considering that the powers given to herein appellee as trustee are of a plenary character, subject only to the limitation that they should be permissible under the law; considering further that when the testatrix conferred such powers she must have had in mind the law that was in force at the time; and considering finally that after all a trust is created for the benefit of the cestuis que trust and that in this particular case the acts of the trustee are subject to the supervision of the Court, We see no reason why the donation in question should not be allowed.

The new Civil Code, in prohibiting a trustee from donating properties entrusted to him does so for the protection of the trust beneficiaries and evidently contemplates gifts of pure beneficence, that is, those which are supported by no other cause than the liberality of the donor. But when the donation, as in the present instance, is clearly in their interest, to say it cannot be done would be contrary to the spirit and intent of the law. .

Mindanao Development Authority vs. Court of Appeals (1982) FACTS: It is not disputed that Francisco Ang Bansing was the owner of a big tract of land situated in Barrio Panacan Davao City. February 25, 1939, Ang Bansing sold a portion thereof, to Juan Cruz Yap Chuy The contract provided, among others, the following:

That I hereby agree to work for the titling of the entire area of my land under my own expenses and the expenses for the titling of the portion sold to me shall be under the expenses of the said Juan Cruz Yap Chuy.
After the sale, the land of Ang Bansing was surveyed and designated The portion sold to Juan Cruz Yap Chuy, was designated as Lot 664B-3, June 15-17 and December 15, 1939, a cadastral survey was made December 23, 1939, Juan Cruz sold Lot 1846-C to the Commonwealth of the Philippines for the amount of P6,347.50. On that same day, Juan Cruz, as vendor, and C.B. Cam and Miguel N. Lansona as sureties, executed a surety bond in favor of the vendee to guarantee the vendor's absolute title over the land sold. Cadastral survey plan was approved by the Director of Lands on July 10, 1940 March 7, 1941, Original Certificate of Title No. 26 was issued in the means of Victoriana Ang Bansing, Orfelina Ang Bansing and Francisco Ang Bansing as claimants of the land, pursuant to Decree No. 745358 issued on July 29, 1940. On March 31, 1941, OCT No. 26 was cancelled pursuant to a Deed of Adjudication and TCTNo. 1783 was issued in the name of Francisco Ang Bansing. February 25, 1965, the President of the Philippines issued Proclamation No. 459, transferring ownership of certain parcels of land situated in Sasa Davao City, to the Mindanao Development Authority, now the Southern Philippines Development Administration, subject to private rights, if any. Lot 1846-C, the disputed parcel of land, was among the parcels of land transferred to the Mindanao Development Authority in said proclamation.

ISSUE: 1. WON Francisco Ang Bansing as vendor and the one who worked to secure the title of his entire tract of land which included the portion sold by him. to Juan Cruz Yap Chuy acted in the

capacity of and/or served as trustee for any and all parties who become successor-ininterest to Juan Cruz Yap Chuy
.

HELD:

No express trust had been created between Ang Banging and Juan Cruz over Lot 1846-C of the Davao Cadastre.

"Trusts are either express or implied. Express trusts are created by the intention of the trustor or of the parties. Implied trusts come into being by operation of law."
It is fundamental in the law of trusts that certain requirements must exist before an express trust will be recognized. Basically, these elements include 1. Competent trustor and trustee, 2. Ascertainable trust res, and sufficiently certain beneficiaries. Stilted formalities are unnecessary, but nevertheless each of the above elements is required to be established, and, if any one of them is missing, it is fatal to the trusts. 3. Present and complete disposition of the trust property, notwithstanding that the enjoyment in the beneficiary will take place in the future. 4. The purpose be an active one to prevent trust from being executed into a legal estate or interest, and one that is not in contravention of some prohibition of statute or rule of public policy. 5. Some power of administration other than a mere duty to perform a contract although the contract is for a third-party beneficiary. 6. Declaration of terms which must be stated with reasonable certainty in order that the trustee may administer, and that the court, if called upon so to do, may enforce, the trust. In this case, the herein petitioner relies mainly upon the following stipulation in the deed of sale executed by Ang Bansing in favor of Juan Cruz to prove that an express trust had been established with Ang Bansing as the settlor and trustee and Juan Cruz as the cestui que trust or beneficiary It is essential to the creation of an express trust that the settlor presently and unequivocally make a disposition of property and make himself the trustee of the property for the benefit of another.