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XIII. Trusts - Coggle Diagram

- - - - D. (Implied Trusts) (1447-1457)
        
        E. Compare & Contrast
        
        E1. With Agency
        
        E2. With Contracts
        
        E3. With Donations
        
        Conditional Donations - Difficult to distinguish between conditional gifts and trust.
        
        E4. Companies/Corporation
        
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        A Donee becomes an absolute owner, Trustee is a legal owner, Beneficiary becomes an equitable owner. Donee has no obligation to anyone, Trustee owes certain duties to beneficiaries.
        
        Trust is a special contract. Express trust and contract arises from consent.
        
        Differences - Legal Origin, Trust equitable, Agency common law and equitable principles.
        
        Consequences - Trustee legally liable for contracts he makes. Agency performs as intermediary
        
        Abuse of Trust
        
        Trust has been expensively used to hide properties obtained through graft and corrupt practices and similar crimes (plunder).
        
        Used to conceal the identity of owners of bank accounts and hide proceeds of money laundering.
        
        Used to hide the true and legal beneficial owners of market players in olipolistic and competitive markets.
        
        Regala v. SB - Attorney-Client privilege can be used as grounds to defeat inquiry into character of the properties under trust.
        
        Money-laundering - Attempted to be remedied by related and materially-linked accounts. As Politicians used other persons to hold illicit assets e.g. Politician gives money to Yaya to be held in trust by the latter.
        
        Related Accounts - an account of which the sources were materially-linked to monetary instruments subject of a freeze order or an order of inquiry under the AMLA.
        
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        Antitrust Concept - To prevent corporate layering and reveal who ultimately owns the properties. Test is to check if there is substantial lessening of competition in the relevant market. This goes against PH Competition act, as presumed to be dominant.
        
        D1. Resulting Trust/Intention Enforcing Trusts
        
        D2. Constructive Trust
        
        Rules
        
        1447 - Enumeration of implied trusts not exclusive. So long as not in conflict with PH Laws.
        
        1448 - XCPN where no trust is implied by law. Disputable presumption of donation in favor of the Child.
        
        1449 - Power Sector example, Donor transfers to donee (60-40 entity) holding of certain facilities in protected areas. All the facilities are hypothecated to secure the loans of the donor. Here, ownership of ancillary facilities to the donee but used to secure the loans of the donor.
        
        1454 - Assignment by way of security in Partnership.
        
        1455 - Important to analyze where funds belong.
        
        1457 - May be proved by Oral Evidence. Established by acts of the parties, no estoppel by Deed.
        
        1448 Q. Car Plan - Employer pays for downpayment for an Employee's Care, Car is in employer's name but payment made by employee. Employee is the owner acting as the beneficiary. Employer is the Trustee. Tax Avoidance scheme on the part of the company.
        
        This is Beth Harmond case.
        
        Purchase Money Trust 1448. There is an implied trust when property is sold, and the 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. The former is the trustee, while the latter is the beneficiary. However, if the person to whom the title is conveyed is a child, legitimate or illegitimate, of the one paying the price of the sale, no trust is implied by law, it being disputably presumed that there is a gift in favor of the child.
        
        Donation;No Beneficial Interest 1449. There is also an implied trust when a donation is made to a person but it appears that although the legal estate is transmitted to the donee, he nevertheless is either to have no beneficial interest or only a part thereof.
        
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        Succession 1451. When land passes by succession to any person and he causes the legal title to be put in the name of another, a trust is established by implication of law for the benefit of the true owner.
        
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        Declared Intention;Conveyance 1453. When property is conveyed to a person in reliance upon his declared intention to hold it for, or transfer it to another or the grantor, there is an implied trust in favor of the person whose benefit is contemplated.
        
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        Trust Ex Maleficio, Trust ex delicto, Trust de son tort, Involuntary trust, Implied trust - Trust by operation of law which arises contrary to intention and in invitum against one who, by fraud by duress or abuse of confidence, by commission of wrong, or unconscionable conduct, artifice, concealment or questionable means, or who has in any way against equity and good conscience, either has obtained or holds the legal right to property which he ought not in equity and good conscience, hold and enjoy.
        
        When arising (Sumaoang v. Judge) - Constructive Trust arises only on wrongful acquisitions or retention of property of which equity, in accordance with its fundamental principles and the traditional exercise of its jurisdiction or in accordance with statutory provisions, take cognizance.
        
        Arise by operation of law and not by agreement or intention. they arise, not by any word or phrase, either expressly or impliedly, evincing a direct intention to create a trust, but one which arises in order to satisfy the demands of justice.
        
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        1456 (Caro case) - Should be read in relation to PD 1529, Sec. 53 which provides that registration via fraud, the owner may pursue all their legal and equitable remedies against the parties to such fraud without prejudice, however, to the rights of any innocent holder for value of a certificate of title.
        
        Prescription - Prescriptive period for the reconveyance of fraudulently registered real property is (10) years reckoned from the date of the issuance of the certificate of title.
        
        Metric is Repudiation of Trusts
        
        Intention Enforcing Trust Tong v. Go Tiat Kun - Arise from the nature or circumstances of the consideration involved in a transaction whereby one person has legal title but is equitably obligated to hold the title for the benefit of another. Equitable doctrine that valuable consideration and not legal title is determinative of equitable title or interest and is always presumed to have been contemplated by the parties. Intention Enforcing because this intent is presumed even if not express in the instrument or deed of conveyance.
        
        Q. Conclusive Presumption - Question if there is conclusive presumption. Only two kinds, Estoppel and the landlord tenant relationship. Nothing about the resulting trusts under the Rules of Court. But, equitable considerations argue that it should be conclusive.
        
        Concurrence of the Beneficiary - Trustor can be Beneficiary. But, the Trustee cannot be the beneficiary. The latter setup contemplates merger of rights. However, if partial-beneficial ownership Trustee can be the beneficiary.
        
        Arise by legal implication based on presumed intention of the parties or, on equitable principles independent of the particular intention of the parties.
        
        Evidentiary Rules
        
        Parol Evidence - only allowed in implied trust.
      - Express/Direct Trusts. Created by direct and positive acts of the parties.
        
        Evidentiary Rules
        
        1443 - No Parol Evidence as proof of an express trust in immovable. Because Estoppel by deed applies, as existence of contract means parol evidence cannot modify the terms of the contract.
    - - Creation of Trust (Juan Tong v. Go Tiat Kun) - There must be intent to create a trust, implied, constructive or express. May be inferred from the acts or conducts of the parties, as well as source of consideration.
        
        3 Certainties in Creation (English Law) -
        
        Certainty of Intention (NCC 1444) - was trust intended? Can be expressed or inferred from conduct.
        
        Certainty of Subject-Matter (1442) - Any type of property. Not future property, so long as ascertainable i.e. not general or vague descriptions.
        
        Certainty of Object (1446) - i.e. For whom the trust is for. Human beneficiary Principle, as acceptance by the beneficiary is necessary. If the trust imposes no onerous condition upon beneficiary, acceptance is presumed. Can also argue that beneficiary must be ascertainable.
        
        Effect of Failure (1445) - Say the Trust fails.
        
        No Intent - Outright Gift
        
        No Subject-Matter - Trust fails, the property reverts to the trustor
        
        No Object - trust Fails, property reverts.
        
        Note that no Failure of trust because trustee declines the obligation unless
  - - - Confidentiality - has public policy basis. Important tool of equity. However, prone to abuse.
      - Trust under the Laws of England -
        
        A trust is the relationship which arises wherever a person (trustee) is compelled in equity to hold property, whether real or personal, and whether by legal or equitable title, for the benefit of some persons (beneficiaries) or for some object permitted by law, in such a way that the real benefit of the property accrues, not tot he trustees, but to the beneficiaries or other objects of trust. (Keeton Sherridan)
        
        Does not cover PH Law on Trusts, as there are express trusts.
        
        Trust in PH Law - Legal relationship between one person having an equitable ownership of property and another having legal title to the property. Equitable ownership entitles to the performance of certain duties and the exercise of certain powers by the latter. (Justice Peralta in Cabacungan v. Laigo)