Salao v. Salao70 SCRA 65

Facts: The plaintiffs, all relatives of the defendants, instituted action for a piece of land in Bataan, alleging it came from common funds and that there was an oral partition made earlier. They alleged that the defendants, who became administrators of property in Malabon inherited from their grandparents, used common funds to buy property elsewhere.

Issue: 1. Who is the trustor and who is the trustee? 2. Was trust created?

Held:

1. A person who establishes a trust is called the trustor; one in whom confidence is reposed as regards property for the benefit of another person is known as the trustee; and the person for whose benefit the trust has been created is referred to as the beneficiary" (Art. 1440, Civil Code). There is a fiduciary relation between the trustee and the cestui que trust as regards certain property, real, personal, money or choses in action.

2. The court ruled that it was not proven that a trust had been created. No documentary evidence was presented to prove an express trust, and Art. 1443 says parol evidence cannot be used to prove an express trust concerning realty.

Art. 1443. No express trusts concerning an immovable or any interest therein may be proved by parol evidence.

Neither can the evidence prove an implied trust. While an implied trust may be proven by oral evidence, it must be trustworthy. Neither was it proven that there was fraud or mistake, enough to create a constructive trust.

TWO KINDS OF TRUST

Express- Created by the parties, or by the intention of the trustor. Express trusts do not prescribe unless repudiated.

Implied- Created by operation of law. The rule on implied trusts regarding prescription is confusing. In general, resulting trusts do not prescribe, but constructive trusts do.