78 - Heirs of Lorenzo Yap v.

Court of Appeals, Ramon Yap and Benjamin Yap

312 SCRA 603 (1999) | J. VITUG
TOPIC: Rule 98 - Trusteeship

DOCTRINE:
A trust or a provision in the terms of a trust would be invalid if the enforcement of the trust or provision is against the
law even though its performance does not involve the commission of a criminal or tortuous act. What the parties are
not allowed to do expressly is one that they also may not do impliedly as, for instance, in the guise of a resulting trust.

ER:
Ramon Yap purchased a parcel of land situated in Quezon City. The lot was thereupon registered in his name.
Subsequently, he construed a two storey 3-door apartment for the use of the Yap family. He paid one-fifth (1/5) of the
cost of the construction. Upon its completion, the improvement was declared for real estate tax purposes in the name
of Lorenzo Yap, brother of private respondents, in deference to the wishes of their mother. When Lorenzo died, his
heirs, herein petitioners, left their family dwelling in Lucena City to reside permanently in Manila. Hence, Ramon
allowed petitioners to use one unit of the apartment building. Ramon sold the land and his share of the 3-door
apartment to his brother Benjamin Yap, his herein co-respondent. Subsequently, petitioners claimed ownership over
the property and demanded that private respondents execute the proper deed necessary to transfer title to them.
Ramon filed an action with the RTC of QC for quieting of title. In their answer, petitioners contended that Ramon was
merely used as a dummy by Lorenzo since the latter and his wife were at the time Chinese citizens. It was agreed that
the property will be transferred to Lorenzo upon his acquisition of Philippine citizenship, but that, should be
predecease, the lot will be transferred to his heirs upon the latters naturalization. SC held that the trust agreement
between Ramon and Lorenzo, if indeed extant, would have been in contravention of the fundamental law. A trust or a
provision in the terms of a trust would be invalid if the enforcement of the trust or provision is against the law even
though its performance does not involve the commission of a criminal or tortuous act.

FACS:
● Ramon Yap bought a parcel of land in QC from Sps. Nery. Ramon has 2 bros: Lorenzo and Benjamin
● He constructed a 3-storey apartment building for the Yap family
● He covered 1/5 of the construction cost while the rest was shouldered by Chua Mia, his mother. When the
building was completed, the improvement was declared for real estate tax purposes in Lorenzo’s name, in
deference to their mom’s wishes
● After Lorenzo died, Ramon allowed Lorenzo’s heirs to continue using 1 of the units of the bldg.
● Ramon then sold the land and his share of the bldg to Benjamin.
● The conflict arose when Petitioner Heirs laid claim of ownership over the property and demanded that Ramon
and Benjamin execute a deed of conveyance to them
● Ramon and Ben then filed an action for quieting of title against Petitioner Heirs.
○ Heirs averred that Sps. Nery offered to sell the land to their predecessor Lorenzo, but since Lorenzo
was still a Chinese citizen at that time, he requested his brother Ramon to allow use of Ramons
‘name for documentation purposes.
○ It was agreed that the property would remain registered in Ramon’s name until such time that Lorenzo
acquires PH citizenship. BUT, should Lorenzo pre-decease, the lot would be transferred to Lorenzo’s
heirs upon the latter’s naturalization.
○ The apartment bldg was built upon Lorenzo’s initiative without objection from Ramon and Ben.
○ They requested Ramon to have the title to the lot transferred to their names but to their chagrin, they
discovered that Ramon sold the lot to Ben
● TC → for Benjamin Yap.
● CA → affirmed Ben’s ownership, debunking the claim of the Heirs that Ramon was merely a dummy for
Lorenzo, giving full credence to the DOS between Nery and Ramon.

Issue: W/N there was a trust set up between Lorenzo and Ramon? NO.

Ruling:
● A trust may either be express or implied.

Express Implied
Created by the Those which, without being express, are deducible from the nature of the transaction
direct and as matters of intent or, independently of the particular intention of the parties, as being
positive acts of superinduced on the transaction by operation of law basically by reason of equity
the parties, by
some writing Resulting Trust Constructive Trust
or deed, or
one that arises by implication of law and Trust not created by any word or
will, or by
presumed always to have been phrase, either expressly or impliedly,
words evincing
contemplated by the parties, the intention as evincing a direct intention to create a
an intention to
to which can be found in the nature of their trust, but one that arises in order to
create a trust
transaction although not expressed in a satisfy the demands of justice.
deed or instrument of conveyance.

based on the equitable doctrine that it is the
more valuable consideration than the legal
title that determines the equitable interest in
property.
It does not come about by agreement
or intention but in main by operation of
law construed 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.

● One basic distinction between an implied trust and an express trust is that while the former may be
established by parol evidence, the latter cannot. Even then, in order to establish an implied trust in real
property by parol evidence, the proof should be as fully convincing as if the acts giving rise to the trust
obligation are proven by an authentic document. An implied trust, in fine, cannot be established upon vague
and inconclusive proof.
● Here, the evidence presented by the Heirs is wanting. Sally Yap herself admitted that the business
establishment of her husband Lorenzo was razed by fire in 1964 that would somehow place to doubt the claim
that he indeed had the means to purchase the subject land about two years later from the Nery spouses.
● On the other hand, Ramon Yap was an accountant with apparent means to buy the property himself
● Anyway, a trust cannot be set up to perpetuate fraud or subvert the law in/directly. If a trust indeed existing, it
would’ve been in contravention of §5, Article XIII (can’t alienate private agricultural lands to aliens)