Professional Documents
Culture Documents
Land Titles Set E
Land Titles Set E
Sec. 25. Any commercial bank may purchase, hold and convey
real estate for the following purposes:
a. Such as shall be necessary for its immediate acoomodatio in the
transaction of its business: Provided, however, that the total
investment in such real estate and improvements thereof,
including bank equipment, shall not exceed fifty percent (50%)
of net worth: Provided further, That real estate used for the
banks purposes, owned by another corporation in which the
bank owns equity, shall be considered as part of the banks total
investment in real estate.
xxx xxx xxx
Sec. 34. Savings and mortgage banks may purchase, hold and
convey real estate under the same conditions as those
governing commercial banks as specified in Section 25 of this
Act.
Talas claim of ownership of the property is based on the contract of sale between
the two parties which they executed back in 1981.
On the other hand, Banco disputes Talas claim of ownership of the property,
alleging that there was an implied trust relationship between them with the bank as
trustor and beneficiary and Tala as trustee. Pursuant to the implied trust, the bank is
now demanding the reconveyance of the property to the Bank as trustor and
Beneficiary.
ISSUES:
1.) Whether or not the trust agreement between the two parties is valid.
HELD:
NO. It is not.
In Tala Realty Services Corporation v. Banco Filipino Savings and Mortgage Bank, the
Court, by Decision dated November 22, 2002, ruling on one of several ejectment
cases filed by Tala Realty against Banco Filipino arising from the same trust
agreement in the reconveyance cases subject of the present petitions, held that the
trust agreement is void and cannot thus be enforced.
An implied trust could not have been formed between the Bank and Tala as the
Court has held that "where the purchase is made in violation of an existing statute
and in evasion of its express provision, no trust can result in favor of the party who
is guilty of the fraud."
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.
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 agreement which the Bank claims to be an implied trust is contrary to
law. Thus, while the Court finds the sale and lease of the subject property genuine
and binding upon the parties, the Court cannot enforce the implied trust even
assuming the parties intended to create it. In the words of the Court in the Ramos
case, "the courts will not assist the payor in achieving his improper purpose by
enforcing a resultant trust for him in accordance with the clean hands doctrine."
The Bank cannot thus demand reconveyance of the property based on its alleged
implied trust relationship with Tala.
illegally issued and that the Director of Lands had no jurisdiction to dispose of the
subject land.
The complaint was filed against Bugayong and other present owners and
mortgagees of the land, such as Lourdes Farms and LBP. In its answer and crossclaim, LBP claimed that it is a mortgagee in good faith and for value. It prayed
that should TCT-AB be annulled by he court, Lourdes Farms, Inc. should be ordered
to pay its outstanding obligations to LBP or to provide a new collateral security.
ISSUES:
1.) Does LBP have a valid and subsisting mortgagees interest over the land
covered by TCT-AB?
HELD:
NO. The Supreme Court Held that despite the arguments of LBP, it still has no valid
and subsisting mortgagees interest over the lands because the mortgagor, Lourdes
Farms, Inc., from which LBP supposedly obtained its alleged interest, has never
been the owner of the subject land. Acquisition over the subject land by
Lourdes Farms, Inc would be legally impossible as the land was released as
alienable and disposable only in 1981. Even at present, no one could have
possessed the same under a claim of ownership for the period of (30) years required
under Section 48(b) of Commonwealth Act No. 141, as amended/ PD 1529, Section
14.
Under Article 2085 of the CC, it is essential that the mortgagor be the absolute
owner of the thing mortgaged. Since Lourdes Farms, Inc. is no the owner of the
land, it does not have the capacity to mortgage it to LBP.
Also, the SC discussed that the argument of LBP that they have a constitutional
guarantee of non-impairment of contract fails because there is a valid exercise of
police power of the State. It was said that Forests constitute an essential and
vital part of our countrys resources and it is of paramount national interest that
they be preserved, cultivated, and protected. So, because of the importance of
forests to the nation, the States police power has been wielded to regulate the use
and occupancy of forest and forest reserves, thus, lands which are classified as so
cannot be alienated unless there is a declaration that they are alienable and
disposable.