Is it possible that you convert an implied trust into an express trust?

JOSE JUAN
TONG, ET AL., Petitioners, vs. GO TIAT KUN, ET AL., Respondents, G.R. No. 196023,
April 21, 2014

The appellate court’s conclusion that an express trust was created because there
was a direct and positive act by Juan Tong to create a trust must inevitably yield
to the clear and positive evidence on record which showed that what was truly
created was an implied resulting trust. As what has been fully established, in view
of the mutual trust and confidence existing between said parties who are family
members, the only reason why Lot 998 was registered in the name of Luis, Sr. was
to facilitate the purchase of the said property to be used in the family’s lumber
business since Luis, Sr. is the only Filipino Citizen in the Juan Tong family at that
time. As the registered owner of Lot 998, it is only natural that tax declarations
and the corresponding tax payment receipts be in the name of Luis, Sr. so as to
effect payment thereof.

The principle of a resulting trust is based on the equitable doctrine that valuable
consideration and not legal title determines the equitable title or interest and are
presumed always to have been contemplated by the parties. They arise from the
nature or circumstances of the consideration involved in a transaction whereby one
person thereby becomes invested with legal title but is obligated in equity to hold
his legal title for the benefit of another. On the other hand, a constructive trust,
unlike an express trust, does not emanate from, or generate a fiduciary relation.
Constructive trusts are created by the construction of equity in order to satisfy
the demands of justice and prevent unjust enrichment. They arise contrary to
intention against one who, by fraud, duress or abuse of confidence, obtains or
holds the legal right to property which he ought not, in equity and good conscience,
to hold.

Guided by the foregoing definitions, the Court is in conformity with the finding of
the trial court that an implied resulting trust was created as provided under the
first sentence of Article 1448 which is sometimes referred to as a purchase money
resulting trust, the elements of which are: (a) an actual payment of money,
property or services, or an equivalent, constituting valuable consideration; and (b)
such consideration must be furnished by the alleged beneficiary of a resulting
trust. Here, the petitioners have shown that the two elements are present in the
instant case. Luis, Sr. was merely a trustee of Juan Tong and the petitioners in
relation to the subject property, and it was Juan Tong who provided the money for
the purchase of Lot 998 but the corresponding transfer certificate of title was
placed in the name of Luis, Sr.

The principle that a trustee who puts a certificate of registration in his name
cannot repudiate the trust by relying on the registration is one of the well-known
limitations upon a title. A trust, which derives its strength from the confidence
one reposes on another especially between families, does not lose that character
simply because of what appears in a legal document.

Contrary to the claim of the respondents, it is not error for the trial court to rely
on parol evidence, i.e., the oral testimonies of witnesses Simeon Juan Tong and
Jose Juan Tong, to arrive at the conclusion that an implied resulting trust exists.
What is crucial is the intention to create a trust.

"Intention—although only presumed, implied or supposed by law from the nature of

the transaction or from the facts and circumstances accompanying the transaction,
particularly the source of the consideration—is always an element of a resulting
trust and may be inferred from the acts or conduct of the parties rather than
from direct expression of conduct. Certainly, intent as an indispensable element is
a matter that necessarily lies in the evidence, that is, by evidence, even
circumstantial, of statements made by the parties at or before the time title
passes. Because an implied trust is neither dependent upon an express agreement
nor required to be evidenced by writing, Article 1457 of our Civil Code authorizes
the admission of parol evidence to prove their existence. Parol evidence that is
required to establish the existence of an implied trust necessarily has to be
trustworthy and it cannot rest on loose, equivocal or indefinite declarations."

Lastly, the respondents’ assertion that the petitioners’ action is barred by

prescription, laches and estoppel is erroneous.

As a rule, implied resulting trusts do not prescribe except when the trustee
repudiates the trust. Further, the action to reconvey does not prescribe so long as
the property stands in the name of the trustee. To allow prescription would be
tantamount to allowing a trustee to acquire title against his principal and true
owner. It should be noted that the title of Lot 998 was still registered in the name
of Luis Sr. even when he predeceased Juan Tong. Considering that the implied
trust has been repudiated through such death, Lot 998 cannot be included in his
estate except only insofar as his undivided share thereof is concerned. It is well-
settled that title to property does not vest ownership but it is a mere proof that
such property has been registered. And, the fact that the petitioners are in
possession of all the tax receipts and tax declarations of Lot 998 all the more
amplify their claim of ownership over Lot 998-A. Although these tax declarations
or realty tax payments of property are not conclusive evidence of ownership,
nevertheless, they are good indicia of possession in the concept of owner, for no
one in his right mind would be paying taxes for a property that is not in his actual
or at least constructive possession. Such realty tax payments constitute proof that
the holder has a claim of title over the property. Therefore, the action for
reconveyance of Lot 998-A, which forms part of Lot 998, is imprescriptible and
the petitioners are not estopped from claiming ownership thereof.