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