TRUSTS AND POWERS OF ATTORNEY

Trust, defined.
Is confidence reposed in one person, called trustee, for the benefit of another, who is called cestui que trust, the source of trust being called the trustor. An obligation of a person to whom the legal title to property has been transferred arising out of a confidence reposed in him to apply the property faithfully and according to such confidence. Not the same as trust as used in the United States which means monopolistic combination. The Philippine Civil Code recognize two kinds of trusts: - Express trust created by the intention of the trustor or the parties, and is required to be evidenced by writing, parol evidence not being sufficient in cases of real estate or an interest therein. - Implied trust exists by operation of law

Lorenzo vs. Posadas, 64 Phil 353 It was held that no particular form of words or conduct is necessary for the manifestation of intention to create a trust. It is possible to create a trust without using the word trust or trustee. Magtulis, et. al. vs. Espartero, 63 O.G. 24 In one case, a grantor conveys land to the grantee with the understanding that after the latters death the property would be returned to the grantor or his heirs, an implied trust is created in favor of the grantor or his heirs.

Characteristics of trust.
a) It is a relationship; b) it is a relationship fiduciary in 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 relationship.

Power of Attorney, defined.

An authority enabling a person to dispose of the interest which is vested in another. An authority to do some act in relation to lands, or the creation of estates therein, or of charges thereon, which the owner, granting or reserving such power, might himself lawfully perform.

Power of Attorney distinguished from Trust.

POWER OF ATTORNEY TRUST - only two persons are necessary, the - there are generally three persons involved,

principal and the attorney in fact

the trustor; the trustee and the cestui que trust or beneficiary - never imperative but always discretionary - always imperative and leaves nothing to the option of the trustee - the attorney-in-fact acts for the use and - trustee acts not necessarily for the benefit benefit of the principal who appointed him of the trustor who appointed him, but upon his discretion, for the ultimate benefit of a third party the cestui que trust

Implied trust.
The enforcement of an implied or constructive trust is to provide an equitable remedy against unjust enrichment of a person at the expense of another. Fraudulent registration of land holds the person in whose name the land is registered as a mere trustee. Pacheco v. Arro, 85 Phil 505 Where the land is decreed in the name of a person through fraud or mistake, such person is by operation of law considered a trustee of an implied trust for the benefit of the Torrens title and the trustee and his successors-in-interest are bound to execute the deed of reconveyance. NOTE: A holder in bad faith of a Torrens title is not entitled to protection.

Existence of cestui que trust not indispensable.

In private trusts, it is not necessary that the cestui que trust should be named or even in esse at the time the trust is created in his favor. In charitable trust the rule is still further relaxed.

Trust created to go around the law, void.

A trust will not be created when, for the purpose of evading the law prohibiting one from taking or holding real property, he takes a conveyance thereof in the name of a third person. Francisco v. Rodriguez, G.R. No. L-31083 By transgressing the law and allowing one to be a dummy in the acquisition of land, he has eliminated the very source of his claim in the land and, consequently, he cannot lawfully assert any right or interest therein.

Registration of Trust
In case where a deed or other instrument is field for the following purposes, it shall not be entered on the certificate of transferring registered land in trust of creating or

declaring a trust or other equitable interest without transfer, the particulars of trust, condition, limitation and other equitable interest. But a memorandum may be entered by the words in trust, or upon condition, or other apt words, and by a reference number to the instrument authorizing or creating the same. A similar memorandum shall be made upon the duplicate certificate. The Register of Deeds shall note upon the original instrument.

Trust with express power to sell, etc

The words with power to sell or with power to mortgage shall be used in case when an instrument creating or declaring trust or other equitable interest contains an express power to sell, mortgage, or deal with the land in any manner. The power to transfer, mortgage, or any way deal with registered land held in trust must be expressly conferred or the court with jurisdiction must decree. The decree shall be filed with the Register of Land titles and Deeds for registration.

Appointment of new trustee.

When the court appoints a new trustee for registered land, a new certificate shall be entered upon presentation to the Register of Deeds of a certified copy of the decree and the surrender and cancellation of the duplicate certificate.

Registration of constructive trust.

a sworn statement shall be filed with the Register of Deeds y anyone who claims an interest in registered land by reason of any implied or constructive trust. the statement shall contain a description on the land and a reference number of the certificate

Right of trustee to apply for registration.

PD 1529 grants any trustee authority to file an application for registration of any land held in trust by him.

Trustee cannot assert title adverse to his principal.

A trustee is estopped from acquiring or asserting title adverse to that of the trustor by virtue of the rule the relations of an agent to his principal is fiduciary Barretto v. Tuason, 50 Phil 888 It was held that the registrant of the property in the name of the trustee in possession thereof must be deemed to have been affected for the benefit of the beneficiary. Palet v. Tejedor, 55 Phil 790 if bad faith or fraud is used in obtaining a decree on a registered property, it will not belong to the person in whose favor it was issued. The real owners can recover the

ownership thereof as long as it has not been transferred to a third person who is in good faith and for a valuable consideration.

Possession by trustee, when deemed adverse.

Possession of a trustee is possession of the cestue qye trust and cannot be a ground for title by prescription The possession of a trustee may be adverse when the trust is made an open repudiation by unequivocal acts made known to the beneficiary Mere silent possession of the trustee without acts to ouster the cestui que trust cannot be construed as adverse possession Perception of rents and propfits by trustee is not equivalent to ouster of the cestui que trust.

Cortez v. Oliva, 33 Phil 480 Declaring the land in the name of the trustee for taxation purposes constitutes no such unequivocal act of repudiation amounting to an ouster and cannot thus constitute adverse possession as basis for title of prescription. Golfeo v. Ct. of App. and SO Chu Bee, G.R. No. L-15841 A concrete instance to prove adverse possession by a trustee amounting to an ouster of the owner is where the trustee has refused to share the products of the land with said owner or his heirs.

Prescription of action for reconveyance of property held under constructive trust.

Action for reconveyance of real property based on implied or constructive trust prescribes in ten years, if theres no fraud employed in the procurement of the property in the name of the trustee. if theres fraud, the action does not prescribe The explicit acknowledgment of trust in a public instrument makes it an express trust, which continues and subsists until repudiated.

Carantes v. Ct. of App., et al. GR No. L-30889 An action for reconveyance based on implied or constructive trust is prescriptible. It prescribes in ten years. Where the transaction constituting implied or constructive trust has been registered, the period of prescription commences as of the date of its registration.

Registration of power of attorney.

A land may be registered and conveyed or otherwise dealt with a person who is granted power of attorney The letters of attorney shall be acknowledge before a notary public and filed with the Register of Deeds, where the land is registered.

Harry E. Keeler Electric Co. v. Rodriguez, 44 Phil 19 Persons dealing with an assumed agent, whether the assumed agency be a general or a special one, are bound at their peril, if they would hold the principal, to ascertain not only the fact of the agency but the nature and extent of the authority, and in case either is controverted, the burden of proof is upon them to establish it.

Notation of power of attorney on title.

Memorandum of a power of attorney at the back of certificate of title is not admissible as evidence of the contents of said power of attorney, but only the fact of its execution, of its presentation for notation, and of its notation for the purpose of constructive notice to the public.

How power of attorney should be construed.

Power of attorney is to be construed according to the natural import of its language The authority of the agent is not to be extended by implication beyond the natural and ordinary significance of the terms in which the authority has been given. A power of attorney does not carry with it or imply that the agent for and on behalf of his principal has the power to execute a promissory note or a mortgage to secure its payment.

San Diego v. Nombre, 120 Phil 162 Article 1878 of the Civil Code does not apply to a judicial administrator who may validly lease, even if the same exceeds one year, property of the estate without prior judicial authority and approval, since in the case lease is considered an act of administration.