JOSE JUAN TONG ET. AL. v. GO TIAT KUN ET. AL. (Yen, A2021) trustee repudiates the trust.

epudiates the trust. Also, the action to reconvey does not

April 21, 2014 | J. Reyes | Implied Resulting Trusts prescribe so long as the property stands in the name of the trustee. To
PETITIONER: Juan Tong et. al allow prescription would be tantamount to allowing a trustee to acquire
RESPONDENTS: Go Tiat Kun et. al. title against the principal.

SUMMARY: Tax declarations or payments are not conclusive evidence of ownership,

Juan Tong bought Lot 998 for their family business. The lot was nevertheless, they are good indicia of possession. Such realty tax
registered under the name of Luis Sr., Juan Tong’s kids, because the payments constitute proof that the holder has a claim of title of the
former was the only Filipino citizen at that time. property. Therefore, the action for reconveyance of Lot 998 is
imprescriptible and the petitioners are not estopped form claiming
Luis Sr. died. His heirs (the respondents in this case) claimed ownership ownership.
of Lot 998. The heirs partitioned the lot into two: 998A and 998B. The
heirs sold Lot 998B to Fine Rock Dev., which sold the lot to Visayas FACTS:
Goodwill. 1. Petitioners are nine out of ten children of Juan Tong and Sy Un.
(Jose, Lucio, Simeon, Felisa, Luisa, Julia, Ana, Elena, Vicente)
The other kids of Juan Tong (petitioners) discovered this breach of the 2. Respondents are Luis Sr. and his heirs, Go Tiat Kun (wife), Leon,
trust agreement. Thus, they executed actions to cancel the sales and for Mary, Lilia, Luis Jr., and Jaime.
the reconveyance of the lot. 3. Juan Tong had a meeting with his kids to tell them that he
intends to buy Lot 998 for their family business, Juan Tong
The RTC ruled that there was an implied trust between the parties. The Lumber.
beneficial interest remained with the family business. The CA reversed 4. Juan Tong was a Chinese citizen which means that he cannot
this and ruled that there was an express trust. Express trusts concerning acquire property. Lot 998 will be registered under the name of
immovable properties cannot be proven by parol evidence. Luis Sr. because he is the only Filipino Citizen in the family.
5. Juan Tong Lumber was incorporated into Juan Tong Lumber,
The SC ruled that there was an implied resulting trust in this case. Inc. Juan Tong and Sy Un died intestate.
Records show that there is intent to create a trust and that the elements 6. Luis Sr. died. His heirs (respondents) claimed ownership of
of an implied resulting trusts are present. Lot998.They allege that no trust agreement exists, and that Luis
Sr.was the one who bought the property.
DOCTRINE: 7. The heirs executed a Deed of Extra-Judicial Settlement which
On Implied Resulting Trusts: adjudicated Lot 998 to them.
Principle of resulting trust is based on the equitable doctrine that 8. The heirs decided to subdivide Lot 998. Lot 998A - Go Tiat Kun
valiable considereation and not legal title determins the equitable title or and children; Lot 998B - Luis Jr.
interest and are always presumed always to have been contemplated by 9. Luis Jr. sold Lot 998B to Fine Rock Dev which sold the same to
the parties. This is a fiduciary relationship. Visayas Goodwill Credit Corp. The other children of Juan Tong
(petitioners) discovered the breach of trust after receiving a etter
Again,the Court finds that an implied resulting trust is present in this from Visayas Goodwill.
case. The elements of which are: 10. Petitioners filed for Annulment of Sales, Titles, Reconveyance and
1. an actual payment of money, property, or services or an Damages of Lot 998B. The trial court ruled in favor of petitioners.
equivalent, constituting valuable consideration The CA affirmed this.
2. such consideration must be furnished by the alleged beneficiary of 11. Go Tiat Kun executed a Deed of Sale of Undivided Interest of Lot
a reulsting trust. 998A in favor of her children.
12. Petitioners filed the instant case for Nullification of Titles,Deeds,
On Prescriptioon: and Deeds of Extra-Judicial Settlement and Sale and Damages
As a rule, implied resulting trusts do not prescribe except when the claiming as owners of Lot 998A.
 2. The issues in this case are not novel. In a different civil case, the
RTC: trial court already ruled that Lot 998B was held in trust by Luis
13. Ruled in favor of petitioners. There was an implied trust between Sr. in favor of his siblings. Lot 998A and Lot 998B are
Juan Tong, Luis Sr., petitioners, and respondents. 3. similarly situated which means that the whole Lot 998 was held
14. Luis Sr. was a mere trustee and not the owner. The beneficial in trust by Luis Sr.
interest remained with the business. 4. Records show an intention to create a trust between the
15. Trust was further established by the ff: parties.The intent is that the beneficial ownership of the property
a. Luis Sr. did not build a house or structure on the property should belong to the whole Juan Tong family.
b. Resided with his family in Juan Tong building, in front of a. Juan Tong had the means to buy the lot for P55,000.
the Respondents did not show that Luis Sr. bought the lot
c. subject property with his own money. Luis Sr. was earning P200 per
d. Acquired residential property in La Paz, Iloilo City and month while working for his father, Juan Tong.
other places b. Possession of Lot 998 was always with the petitioners.
e. Did not exercise any other act of ownership The lot was used as stockyard for the lumber business.
16. The rights of the respondents over the lots are derived from Luis c. From the time the lot was registered in the name of Luis
Sr. The latter was not the owner, therefore the respondents are Sr., it remained untouched by the respondents. They only
not owners. subdivided the lot when Luis Sr. died.
d. Respondent Leon admitted that the petitioners were in
CA: possession of Lot 998, that he lived with his family in
17. Reversed and set aside trial court decision.
 Ruled that an front of the said lot, that Luis Sr. did not send any letter
express trust was created because there was direct and positive claiming ownership of the lot, and that he and his mother
act from Juan Tong.
When an express trust concerns owned another residence in Iloilo.
immovables, it cannot be proved by oral or parol evidence.
 e. The real property taxes were paid not by Luis Sr., but by
18. Even if there was an implied trust, this has prescribed. This was Juan Tong and the lumber company. The respondents did
terminated when Luis Sr. died. The trust was converted into a not try to explain the petitioners’ possession of the realty
constructive trust (prescribes in 10 years from issuance of tax receipts in the name of Luis Sr.
Torrens title.)
 5. The CA’s conclusion that an express trust was created there was
19. There is also presumption of donation according to Art. 1448 of direct act by Juan Tong must yield to the clear and postive
the CC. “If the person to whom title is conveyed is a child... of the evidence on record which showed that what was created was an
one paying the price of the sale, no trust is implied by law, it implied resulting trust.
being disputable presumed that there is a gift in favor of the 6. Principle of resulting trust is based on the equitable doctrine that
child.” valiable considereation and not legal title determins the equitable
title or interest and are always presumed always to have been
ISSUE: contemplated by the parties. This is a fiduciary relationship.
1. WON there was an implied trust regarding Lot 998 when 7. A constructive trust, does not emanate from a fiduciary relation.
Juan Tong purchased this lot and registered it in Luis Sr.’s This is created by a construction of equity in orer to satisfy the
name? YES. demands of justice and prevent unjust enrichment. It arises
2. WON parol evidence may be used as proof of the trust? contrary to the intention against one who by fraud, duress, or
YES. abuse of confidence, holds the legal right to property.
3. WON the petitioner’s action was barred by prescription? 8. Again,the Court finds that an implied resulting trust is present in
NO. this case. The elements of which are:
a. an actual payment of money, property, or services or an
RATIO equivalent, constituting valuable consideration
1. The petition is impressed with merit.
 b. such consideration must be furnished by the alleged
beneficiary of a reulsting trust.
9. In this case, Juan Tong paid for the lot but it was registered
under the name of Luis Sr.
10. It was not an error for the trial court to rely on parol evidence.
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 facts and circumstances of the
transaction, particularly the source of 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.
11. Respondents claim that the action is barred by prescription is
erroneous.
12. As a rule, implied resulting trusts do not prescribe except when
the trustee repudiates the trust. Also, 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 the principal.
13. Tax declarations or payments are not conclusive evidence of
ownership, nevertheless, they are good indicia of possession. Such
realty tax payments constitute proof that the holder has a claim
of title of the property. Therefore, the action for reconveyance of
Lot 998 is imprescriptible and the petitioners are not estopped
form claiming ownership.

Notes:
Other proof of intention to create trust: Juan Tong had the means to
purchase; Lot 998 had always been in the possession of petitioners; from
registration of Luis Sr in 1957, Lot 998 remained undivided and
untouched by respondents until after his death; real property taxes were
paid by Juan Tong, not by Luis Sr.