1. Mindanao Development Authority v.

CA
FACTS:
Respondent Francisco Ang Bansing was the owner of a big tract of land
situated in Barrio Panacan Davao City. Ang Bansing sold a portion thereof,
with an area of about 5 hectares to Juan Cruz Yap Chuy. A cadastral survey
was made and Lot 664-B-3 was designated as Lot 1846-C of the Davao
Cadastre. Juan Cruz sold Lot 1846-C to the Commonwealth of the
Philippines for the amount of P6,347.50. On February 25, 1965, the
President of the Philippines issued Proclamation No. 459, transferring
ownership of certain parcels of land situated in Sasa Davao City, to the
Mindanao Development Authority, now the Southern Philippines
Development Administration, subject to private rights, if any. Lot 1846-C, the
disputed parcel of land, was among the parcels of land transferred to the
Mindanao Development Authority in said proclamation.
ISSUE: W/N there was an express trust between Ang Bansing and Juan
Cruz over Lot 1846-C of Davao Cadastre
HELD:
No express trust had been created between Ang Bansing and Juan Cruz
over Lot 1846-C of the Davao Cadastre. Herein petitioner relies mainly upon
the following stipulation in the deed of sale executed by Ang Bansing in favor
of Juan Cruz to prove that an express trust had been established with Ang
Bansing as the settlor and trustee and Juan Cruz as the cestui que trust or
beneficiary. The stipulation, however, is nothing but a condition that Ang
Bansing shall pay the expenses for the registration of his land and for Juan
Cruz to shoulder the expenses for the registration of the land sold to him.
The stipulation does not categorically create an obligation on the part of Ang
Bansing to hold the property in trust for Juan Cruz. Hence, there is no
express trust. Thus, the petition is denied.
In a separate opinion of Justice Aquino, however, it is said that the disputed
land should be adjudicated to the government agency known as the
Southern Philippines Development Administration, the successor of the
Commonwealth of the Philippines. It is argued that Ang Bansing did not
touch at all Lot No. 1846-C because he knew that it was not his property and
that it belonged to the State. It is claimed that Ang Bansing was the true
owner of Lot No. 1846-C, there being an express trust in this case. In any
event, the real plaintiff in this case is the Republic of the Philippines and
prescription does not run against the State. The maxim is nullum tempus
occurrit regi or nullum tempus occurrit reipublicae (lapse of time does not bar
the right of the crown or lapse of time does not bar the commonwealth). The
best reason for its existence is the great public policy of preserving public

rights and property from damage and loss through the negligence of public
officers. The government officials concerned were negligent in not
intervening in the land registration proceeding or in not promptly asking Ang
Bansing to reconvey the disputed lot to the Commonwealth or to the
Republic of the Philippines. Such negligence does not prejudice the State.
The negligence or omissions of public officers as to their public duties will
not work an estoppel against the State.

2. Vda. de Esconde vs CA
FACTS:
Petitioners Constancia, Benjamin and Elenita, and private respondent
Pedro, are the children of the late Eulogio Esconde and petitioner Catalina
Buan. Eulogio Esconde was one of the children and heirs of Andres
Esconde. Andres is the brother of Estanislao Esconde, the original owner of
the disputed lot who died without issue on April 1942. Survived by his only
brother, Andres, Estanislao left an estate consisting of four (4) parcels of
land in Samal, Bataan. Eulogio died in April, 1944 survived by petitioners
and private respondent. At that time, Lazara andCiriaca, Eulogio's sisters,
had already died without having partitioned the estate of the lateEstanislao
Esconde. On December 5, 1946, the heirs of Lazara, Ciriaca and Eulogio
executed adeed of extrajudicial partition. Since the children of Eulogio, with
the exception of Constancia, were then all minors, they were represented by
their mother and judicial guardian, petitioner Catalina Buan vda. de Esconde
who renounced and waived her usufructuary rights over the parcels of land
in favor of her children in the same deed. Sometime in December of 1982,
Benjamin discovered that Lot No. 1700 was registered in the name of his
brother, private respondent. Believing that the lot was co-owned by all the
children of Eulogio Esconde, Benjamin demanded his share of the lot from
private respondent. However, private respondent asserted exclusive
ownership thereof pursuant to the deed of extrajudicial partition. Hence, on
June 29, 1987, petitioners herein filed a complaint before the RTC of Bataan
against private respondent for the annulment of TCT No. 394. In its decision
of July 31,1989, the lower court ruled that the action had been barred by
both prescription and laches. Hence, petitioners elevated the case to the CA
which affirmed the lower court's decision.
ISSUE: The applicability of the laches doctrine to implied trust is the issue in
this petition.
HELD:
Trust is the legal relationship between one person having an equitable
ownership in property and another person owning the legal title to such
property, the equitable ownership of the former entitling him to the
performance of certain duties and the exercise of certain powers by the
latter. In the case at bench, petitioner Catalina Buan vda. de Esconde, as
mother and legal guardian of her children, appears to have favored her elder
son, private respondent, in allowing that he be given Lot No. 1700 in
its entirety in the extrajudicial partition of the Esconde estate to the prejudice
of her other children. After the TCT No. 394 was handed to him by his
mother, private respondent exercised exclusive rights of ownership therein to
the extent of even mortgaging the lot when he needed money.

If, as petitioners insist, a mistake was committed in allotting Lot No. 1700 to
private respondent, then a trust relationship was created between them
and private respondent. However, private respondent never considered
himself a trustee.
If he allowed his brother Benjamin to construct or make improvements
thereon, it appears to have been out of tolerance to a brother. Consequently,
if indeed, by mistake, private respondent was given the entirety of Lot No.
1700, the trust relationship between him and petitioners was a constructive,
not resulting, implied trust. Petitioners, therefore, correctly questioned
private respondents exercise of absolute ownership over the property.
Unfortunately, however, petitioners assailed it long after their right to do so
have prescribed. The rule that a trustee cannot acquire by prescription
ownership over property entrusted to him until and unless he repudiates the
trust, applies to express trusts and resulting implied trusts. However, in
constructive implied trusts, prescription may supervene even if the trustee
does not repudiate the relationship. Necessarily, repudiation of the said trust
is not a condition precedent to the running of the prescriptive period.

3. DBP v COA
Facts:
Development Bank of the Philippines (DBP) seeks to set aside COA
Decision which disallowed in audit the dividends distributed under the
Special Loan Program (SLP) to the members of the DBP Gratuity Plan.
The DBP is a government financial institution with an original charter,
Executive Order No. 81, as amended by Republic Act No. 8523 (DBP
Charter).
In 1983, the Bank established a Special Loan Program availed thru the
facilities of the DBP Provident Fund and funded by placements from the
Gratuity Plan Fund. This Special Loan Program was adopted as part of the
benefit program of the Bank to provide financial assistance to qualified
members to enhance and protect the value of their gratuity benefits
because Philippine retirement laws and the Gratuity Plan do not allow
partial payment of retirement benefits. The program was suspended in
1986 but was revived in 1991 thru DBP Board Resolution No. 066 dated
January 5, 1991.
Under the Special Loan Program, a prospective retiree is allowed the option
to utilize in the form of a loan a portion of his outstanding equity in the
gratuity fund and to invest it in a profitable investment or undertaking. The
earnings of the investment shall then be applied to pay for the interest due
on the gratuity loan which was initially set at 9% per annum subject to the
minimum investment rate resulting from the updated actuarial study. The
excess or balance of the interest earnings shall then be distributed to the
investor-members.
Pursuant to the investment scheme, DBP-TSD paid to the investor-members
a total of P11,626,414.25 representing the net earnings of the investments
for the years 1991 and 1992. The payments were disallowed by the Auditor
under Audit Observation Memorandum No. 93-2 dated March 1, 1993, on
the ground that the distribution of income of the Gratuity Plan Fund (GPF) to
future retirees of DBP is irregular and constituted the use of public funds for
private purposes which is specifically proscribed under Section 4 of P.D.
1445.
Chairman Antonio of DBP also asked COA to lift the disallowance of the
P11,626,414.25 distributed as dividends under the SLP on the ground that
the latter was simply a normal loan transaction.
Issue: Whether or not the distribution of dividends under the SLP is valid.
HELD:

NO. The beneficiaries or cestui que trust of the Fund are the DBP officials
and employees who will retire. Retirement benefits can only be demanded
and enjoyed when the employee shall have met the last requisite, that is,
actual retirement under the Gratuity Plan. In this case, dividends were
distributed to employees even before retirement.
As Chairman Zalamea himself noted, neither the Gratuity Plan nor our laws
on retirement allow the partial payment of retirement benefits ahead of
actual retirement.
It appears that DBP sought to circumvent these
restrictions through the SLP, which released a portion of an employees
retirement benefits to him in the form of a loan.
Severance of employment is a condition sine qua non for the release of
retirement benefits. Retirement benefits are not meant to recompense
employees who are still in the employ of the government. That is the
function of salaries and other emoluments. Retirement benefits are in the
nature of a reward granted by the State to a government employee who has
given the best years of his life to the service of his country.

4. JULIO v DALANDAN
FACTS
An affidavit was subscribed and sworn to by Clemente Dalandan. By the
terms of this writing, Clemente Dalandan, deceased father of defendants
Emiliano and Maria Dalandan, acknowledged that a four-hectare piece of
riceland in Las Pias, Rizal belonging to Victoriana Dalandan, whose only
child and heir is plaintiff Victoria Julio, was posted as security for an
obligation which he, Clemente Dalandan, assumed but, however, failed to
fulfill. The result was that Victoriana's said land was foreclosed.
The key provisions of said document are: 3. That this riceland owned by
VICTORIANA DALANDAN whose sole heir is VICTORIA JULIO was posted
as security for an obligation assumed by me even before the outbreak of the
last war and because I failed to fulfill the obligation secured by her said farm
the same was foreclosed; 4. That because of this, and as agreed upon
between us, I accordingly held myself liable to Victoria Julio for the
foreclosure of her said land, and I promised her that I would replace her
aforesaid land which was foreclosed because of my obligation with another
farm of more than four; (4) hectares, that is, one planted to four cavanes of
seedlings, more or less;] 5. That my children (EMILIANO AND MARIA
DALANDAN) may not be forced to give up the harvest of the farm herein
above mentioned; 6.That neither may the land which was exchanged for
the farm with four cavanes of seedlings be demanded immediately; After
the death of Clemente Dalandan, plaintiff requested from defendants to
deliver the land to her, but they refused.
ISSUE: W/N Emiliano and Maria Dalandan are trustees of Victoria Julio.
HELD / RATIO

YES. Emiliano and Maria Dalandan are usufructuaries for an undetermined

length of time. For so long as that period has not been fixed and has not
elapsed, they hold the property. Theirs is to enjoy the fruits of the land and to
hold the same as trustees of Victoria Julio. And this because, by the deed,
Clemente Dalandan divested himself of the ownership qualified solely by
withholding enjoyment of the fruits and physical possession. In
consequence, Clemente Dalandan cannot transmit to his heirs, the present
defendants, such ownership. Nemo dat quod non habet. And then, the
document is a declaration by Clemente Dalandan, now deceased, against
his own proprietary interests. Such document is binding upon his heirs.
While it is true that said deed did not in definitive words institute defendants
as trustees, a duty is therein imposed upon them when the proper time
comes to turn over both the fruits and the possession of the property to
Victoria Julio. Not that this view is without statutory support. Article 1444 of
the Civil Code states that: "No particular words are required for the creation
of an express trust, it being sufficient that a trust is clearly intended." In
reality, the development of the trust as a method of disposition of property,
so jurisprudence teaches, "seems in large part due to its freedom from
formal requirements." This principle perhaps accounts for the provisions in
Article 1444 just quoted. For, "technical or particular forms of words or
phrases are not essential to the manifestation of intention to create a trust or
to the establishment thereof." Nor would the use of some such words as
"trust" or "trustee" essential to the constitution of a trust. Conversely, the
mere fact that the word "trust" or "trustee" was employed would not
necessarily prove an intention to create a trust. What is important is whether
the trustor manifested an intention to create the kind of relationship which in
law is known as a trust. It is unimportant that the trustor should know that the
relationship "which he intends to create is called a trust, and whether or not
he knows the precise characteristics of the relationship which is called a
trust."7 Here, that trust is effective as against defendants and in favor of the
beneficiary thereof, plaintiff Victoria Julio, who accepted it in the document
itself.