ART. 1449. There is also an implied trust when a donationis made to a person but it appears that althoughthe legal estate is transmitted to the donee, he neverthelessis either to have no beneficial interest or only a partthereof.Art. 1449 IMPLIED TRUSTS662 TRUSTSDonation to a person but beneficialinterest vested in another.An implied trust arises on a donation of property where itappears that although the legal estate is transmitted to the donee,he is to have no beneficial interest or only a part thereof. In suchcase, a trust results in favor of the person in whom it is intendedto vest the beneficial interest in the property donated, with thedonee being the trustee.11EXAMPLE:Property is donated by A to B but only the legal title istransmitted to B, the beneficial ownership of the whole propertyor a part thereof being vested in C.Here, a trust is established by implication of law with B asthe trustee and C, the benefi ciary.ART. 1450. If the price of a sale of property is loanedor paid by one person for the benefi t of another and theconveyance is made to the lender or payor to secure thepayment of the debt, a trust arises by operation of lawin favor of the person to whom the money is loaned orfor whom it is paid. The latter may redeem the propertyand compel a conveyance thereof to him.Purchase with borrowed funds.(1) Trust in favor of lender. — The general rule is that the use ofborrowed money in making a purchase does not raise a resultingtrust in favor of the lender, even where the money is loaned toenable the borrower to purchase the property in question andthe borrower promises, but fails, to execute a mortgage on theproperty after it is purchased to secure the loan. Nor does theuse of money given to one for the purchase of property raise aresulting trust on the property in favor of the donor. (54 Am. Jur.163.)11Art. 1061. Every compulsory heir, who succeeds with other compulsory heirs, mustbring into the mass of the estate any property or right which he may have received fromthe decedent, during the lifetime of the latter, by way of donation, or any other gratuitoustitle, in order that it may be computed in the determination of the legitime of each heir,and in the account of the partition. (1035a)Art. 1450663(2) Trust in favor of borrower. — When money is borrowedto purchase property, and the conveyance is made, not to theborrower, but to the lender who takes title to the property in hisown name in order to secure the loan, a resulting trust in theproperty, binding the lender or payor (trustee) in favor of theborrower (benefi ciary), arises. In this case, the real purchaser isthe borrower. After payment of the amount loaned or paid, hehas the right to redeem the property and compel a conveyancethereof to him (Art. 1450; Trinidad vs. Ricafort, 7 Phil. 449 [1907].),

even if there is no mention of the interest of the borrower in thetitle of the lender.An agreement between the parties whereby the propertypurchased shall be considered sold to the trustee in case thebenefi ciary fails to reimburse him is tantamount to a pactumcommissorium, which is expressly prohibited by Article 2088of the Civil Code12 for in such case there would be automaticappropriation of the property by the trustee in the event offailure of the benefi ciary to pay the loan. (Nakpil vs. IntermediateAppellate Court, 225 SCRA 456 [1993].)EXAMPLE:A buys a land in his own name from B with money borrowedfrom or paid by C. There is no trust here. The relation betweenA and C is that of debtor and creditor.If the property is conveyed to C to secure the amountadvanced, an implied trust is created by operation of law. Cbecomes the trustee and A, the benefi ciary. But it is only after Areimburses C of the purchase price that the former can compelconveyance of the purchased property from the latter.ART. 1451. When land passes by succession to anyperson and he causes the legal title to be put in thename of another, a trust is established by implication oflaw for the benefi t of the true owner.12Art. 2088. The creditor cannot appropriate the things given by way of pledge ormortgage, or dispose of them. Any stipulation to the contrary is null and void. (1859a)Art. 1451 IMPLIED TRUSTS664 TRUSTSLegal title to land inherited by heirplaced in name of another.Succession is a mode of acquisition by virtue of which theproperty, rights, and obligations to the extent of the value ofthe inheritance, of a person are transmitted through his deathto another or others either by his will or by operation of law.(Art. 774.) The rights to the succession are transmitted from themoment of the death of the decedent. (Art. 777.)Where a person who has acquired land by inheritance causesthe legal title to be placed in the name of another, a resultingtrust is presumed in law in favor of the true owner, the heir.(see Custodio vs. Casiano, 9 SCRA 841 [1963].) Here, the heirhimself by his voluntary action, causes the registration of hislegal title under the name of another person. (Pilapil vs. Heirs ofM.R. Briones, 484 SCRA 308 [2006].) Where, through fraudulentrepresentations or by pretending to be the sole heir of thedeceased, an heir succeeded in having the original title of a landin the name of the deceased cancelled and a new one issued inhis name thereby enabling him to possess the land and get itsproduce, there is created what is called “constructive trust” infavor of the defrauded. (Baysa vs. Baysa, [C.A.] 53 O.G. 728, Oct.2, 1957.)No trust relationship can exist over a property in favor of anheir as benefi ciary where it appears that the deceased predecessorhad no title to the property in question. (De la Cruz vs. De laCruz, 130 SCRA 666 [1984].)ART. 1452. If two or more persons agree to purchase

property and by common consent the legal title is takenin the name of one of them for the benefi t of all, a trustis created by force of law in favor of the others in proportionto the interest of each.Legal title to property purchasedtaken in one co-owner.Where property is purchased by two or more persons and bycommon consent the legal title is placed in the name of only oneArt. 1452665of the co-owners for the benefi t of all, a trust arises by implicationof law in favor of the others in proportion to the interest of each.(see Valdez vs. Olorga, 51 SCRA 71 [1973]; Nito vs. Court ofAppeals, 225 SCRA 231 [1993].)The property must be capable of private ownership; otherwise,Article 1452 is not applicable, as in the case of a fi shpond of publicdomain the title to which remains in the Government. (Deluaovs. Casteel, 29 SCRA 350 [1969].)ILLUSTRATIVE CASES:1. The agreement of the parties is that the property would bebought in the name and for the account of the two of them and thethird would be paid a commission as compensation on the sale of theproperty.Facts: Although the original proposal was for the partiesto purchase the property jointly, the same was abandoned andthe parties subsequently agreed that A and B would buy theproperty exclusively in their names and for their own account,to avoid the diffi culties to be encountered in acquiring theproperty in common.C accepted this proposition with the understanding thatthe property would be sold as soon as a buyer who can payP300,000.00 could be found, with the obligation on the partof A and B to pay C 20% of the proceeds after deducting thepurchase price thereof.Issue: Is Article 1452 applicable?Held: No, because nothing contained in the agreementwould indicate that the property was being purchased for thebenefi t of A, B, and C. The recitals in the contract containingthe obligation assumed by A and B merely refer to the servicesrendered by C as broker who negotiated the sale of the propertyto A and B, and which A and B agreed to compensate. The termsof the contract admit no doubt that the 20% to be paid C is ofany amount which may be obtained by the sale of the propertyafter deducting the purchase price therefor, which shall betaken from the liquidated benefi t obtained by the owners outof the sale of said property.Neither is Article 1453 applicable, because there is absolutelynothing in the agreement which even remotely indicatesArt. 1452 IMPLIED TRUSTS666 TRUSTSthat the property was conveyed to A and B in reliance upontheir declared intention to hold it for, or transfer it to anotheror the grantor. (Calero vs. Carrion, 107 Phil. 549 [1960].)________ ________ ________

2. Title to property purchased with funds furnished by membersof an association without legal personality was placed in the name ofone of them.Facts: A number of Chinese merchants raised a fund byvoluntary subscription with which they purchased a valuabletract of land and erected a large building to be used as a sortof club house for the mutual benefi t of the subscribers to thefund. The subscribers organized themselves into an irregularassociation, which had no regular articles of association andwas not registered in any commercial registry or elsewhere.The association not having any existence as a legal entity, itwas agreed to have the title to the property placed in the nameof A, one of the members of the association.Issue: Has A the right to set up title in himself to the clubproperty as well as to the rents accruing therefrom?Held: No. The evidence clearly discloses not only that thefunds with which the property in question was purchasedwere furnished by the members of the association but thatA, in whose name it was registered, received and holds theproperty as the agent and trustee of the association. In this case,the legal title of A is not questioned and the other members ofthe association do not seek such cancellation but they maintainthat A holds it under an obligation, both express and implied,to deal with it exclusively for the benefi t of the members ofthe association and subject to their will. (Uy Aloc vs. Cho JanLing, 19 Phil. 202 [1911]; see Compania General de Tabacos vs.Topino, 54 Phil. 33 [1929]; Martinez vs. Martinez, 1 Phil. 647[1902].)ART. 1453. When property is conveyed to a personin reliance upon his declared intention to hold it for, ortransfer it to another or the grantor, there is an impliedtrust in favor of the person whose benefi t is contemplated.Art. 1453667Conveyance under a promise to hold for,or transfer to another.The trust established by virtue of this article is based on thepromise or representation of the grantee to hold the propertyconveyed for, or transfer it to another or the grantor. The granteeis estopped from asserting ownership in himself by denyinghis representation as against the person for whose benefi t theimplied trust is created.The rule in Article 1453 is founded upon equity, particularlywhere on the faith of the agreement or understanding, the granteeis enabled to gain an advantage in the purchase of the propertyor where the consideration or part thereof has been furnishedby or for another. Thus, it has been held that where property istaken by a person under an agreement to hold it for or conveyit to another or to the grantor, or on certain conditions, a trustresults for the benefi t of such other or his heirs, which equitywill enforce according to the agreement. (89 C.J.S. 960; Heirs ofCandelaria vs. Romero, 109 Phil. 500 [1960]; Rosario vs. Court ofAppeals, 310 SCRA 464 [1999].)Likewise, a person who, before consolidation of property

in the purchaser under a contract of sale with pacto de retro,agrees with the vendors to buy the property and administer ituntil all debts constituting an encumbrance thereon shall havebeen paid after which the property shall be turned back to theoriginal owners, is bound by such agreement; and upon buyingthe property under these circumstances, such person becomes ineffect a trustee and is bound to administer the property in thischaracter. (Martinez vs. Grano, 42 Phil. 35 [1921].)Article 1453 would apply if the person conveying theproperty did not expressly state that he was establishing thetrust. (Cuaycong vs. Cuaycong, 21 SCRA 1192 [1967].)