MORALES v.

COURT OF APPEALS (Medel, D2021) Avelino to buy the property from him rather than to go to
274 SCRA 282 (1997) somebody else that they do not now. Celso Avelino also promised
that he will vacate the premises as soon as his uncle does so.
Petitioners: RODOLFO MORALES, represented by his heirs, and
8. Hence, Spouses Ortiz and Celso Avelino executed a deed of
PRISCILA MORALES
absolute sale.
Respondents: COURT OF APPEALS, RANULFO ORTIZ, JR., and
9. Rodolfo Morales (nephew), however, refused to vacate or demolish
ERLINDA ORTIZ
his beauty shop, unless he is reimbursed for P35,000. Morales
also occupied the residential building on the property, by taking
DOCTRINE:
in paying boarders.
A trust is the legal relationship between one person having an equitable
10. Rodolfo Morales contends that his grandparents Rosendo
ownership in property and another person owning the legal title to such
Avelino and Juana Ricaforte (parents of Celso Avelino)
property, the equitable ownership of the former entitling him to the
originally owned the premises in question. He further
performance of certain duties and the exercise of certain powers by the
claims that Rosendo (grandfather of Rodolofo; father of
latter. The characteristics of a trust are: 1. it is a relationship; 2. it is a
Celso Avelino) merely entrusted Celso Avelino with the
relationship of fiduciary character; 3. it is a relationship with respect to
money to purchase the property as he was their only son.
property, not one involving merely personal duties; 4. it involves the
Hence, Rodolfo Morales and his mother, Priscila Morales,
existence of equitable duties imposed upon the holder of the title to the
based their contention on an implied trust theory.
property to deal with it for the benefit of another; and 5. it arises as a
result of a manifestation of intention to create the relationship.
ISSUE:
A. Whether or not Celso Avelino holds the property as a mere
FACTS: trustee. NO.
1. Spouses Ortiz claim that they are the absolute and exclusive B. Whether or not Rodolfo Morales was a builder in good faith. NO.
owners of the premises in question (a parcel of land and a two-
storey residential house). Spouses Ortiz claim that they RATIO:
purchased the property from Celso Avelino.
2. The property was purchased by Celso Avelino when he was still a AS TO THE ISSUE ON WHETHER CELSO AVELINO HOLDS THE
bachelor and a city fiscal of Calbayog City. It was shown that he PROPERTY AS A MERE TRUSTEE
purchased the same from Mendiola and Bartolome through an
"Escritura de Venta." 1. Trusts are either express or implied.
3. After the purchase, Celso Avelino caused the following: (1) a. Express trusts are created by the intention of the trustor
transfer of the property’s title in his name; (2) transfer of tax or of the parties.
declarations in his name; (3) a survey of the premises with the b. Implied trusts come into being by operation of law,
Bureau of Lands; and (4) built a residential house thereon. either through implication of an intention to create
4. Celso Avelino took his parents, Rosendo Avelino and Juana a trust as a matter of law or through the imposition
Ricaforte, and his sister, Aurea, to live in his property until their of the trust irrespective of and even contrary to,
parents’ deaths. any such intention.
5. Celso Avelino then became an Immigration Officer and later a 2. Implied trusts are either resulting or constructive trusts.
Judge of the Court of First Instance in Cebu. Consequently, he Constructive trusts are created by the construction of equity in
left his property under the care of his sister, Aurea. order to satisfy the demands of justice and prevent unjust
6. Without his knowledge, his nephew Rodolfo Morales (a son of his enrichment. Resulting trusts are based on the equitable doctrine
other sister, Priscilla) constructed a beauty shop on the premises that valuable consideration and not legal title determines the
in question. equitable title or interest and are presumed always to have been
7. Celso Avelino thereafter sold the property to his neighbors, the contemplated by the parties. They arise from the nature of
Spouses Ortiz. The Spouses Ortiz were encouraged by Celso circumstances of the consideration involved in a transaction
 whereby one person becomes invested with legal title but is money, he constructed a residential building on the lot which
obligated in equity to hold his legal title for the benefit of another. building is made of strong materials.”
3. A resulting trust in exemplified by Article 1448 of the Civil Code: 8. Rodolfo Morales (nephew) failed to discharge the burden to prove
"There is an implied trust when property is sold, and the legal the existence of an implied trust.
estate is granted to one party but the price is paid by another
having the beneficial interest of the property. The former is the AS TO THE ISSUE WHETHER RODOLFO MORALES WAS A
trustee, while the latter is the beneficiary. However, if the BUILDER IN GOOD FAITH.
person to whom title is conveyed is a child, legitimate or
illegitimate, of the one paying the price of the sale, no 1. The Court ruled in the negative. Article 448 applies only when
trust is implied by law, it being disputable presumed that the builder, planter or sower believes he has the right to so build,
there is gift in favor of a child.” plant or sow because he thinks he owns the land or believes
4. The last sentence of Article 1448 (sometimes referred to as himself to have a claim of title.
a purchase money resulting trust) gives one of the 2. In the instant case Rodolfo Morales knew from the very beginning
recognized exceptions to the establishment of an implied that he was not the owner of the land. He alleged in his Answer
resulting trust. (The other two would be: when actual contrary that the land was acquired by his grandparents Rosendo Avelino
intention is proved & when purchase is made in violation of an and Juana Ricaforte and he constructed the shop building in 1979
existing statute and in evasion of its express provision.) upon due permission and financial assistance from his mother,
5. As a rule the burden of proving the existence of trust is on Priscila A. Morales and from his aunts: Trinidad A. Cruz and
the party asserting its existence, and such proof must be Concepcion A. Peralta, and with the knowledge and consent of his
clear and satisfactorily show the existence of trust. While uncle Celso Avelino.
implied trusts may be proved by oral evidence, evidence must be
trustworthy and received by the courts with extreme caution. DISPOSITION: WHEREFORE, premises considered, except as to the
6. On this basis alone, Rodolfo and Priscilla Morales' claim must award of moral damages, attorneys fees and litigation expenses which are
fail. Rodolfo and Priscilla relied merely on testimonial evidences hereby DELETED, the judgment of the respondent Court of Appeals is
which are self-serving. Proof of the Spouses Ortiz's lawful AFFIRMED.
acquisition of the property through Celso Avelino’s ownership on
the other hand was supported by documentary evidences such as:
the deed of absolute sale and tax declarations. Even testimonies
of Celso's other sisters prove that they believe that he is the true
owner of the property. The fact that the other siblings did not
intervene in this case to protect their right and that upon the
death of their parents no extra-judicial partition occurred further
strengthens Celso's ownership. Moreover, assuming that their
claim that Celso was a mere trustee is true, it still falls
under the exemption under the last sentence of Article
1448 which states that if the person to whom the title
conveyed is a child, there is a presumption that it is a gift
in favor of the child.
7. Another crucial evidence considered by the Court was the sworn
Confirmation of one of the sisters of Celso Avelino, Concepcion
Peraltas. In her affidavit, she explcitly stated that: “That my
aforenamed brother [Celso Avelino], during the time when he was
City Fiscal of Calbayog City and still a bachelor, out of his own
money, bought the parcels of land x x x Likewise, out of his own
 PANLILIO v. CITIBANK (B2014)  It’s a higher-risk long-term investment that can
539 SCRA 69 (2007) yield higher pay-offs.
PETITIONER: SPOUSES RAUL and AMALIA PANLILIO o In effect, Amalia loaned C&P Homes money, and
RESPONDENTS: CITIBANK, N.A. the latter pays it over a long period—in this case,
the maturity period was in 2003 (five years later),
DOCTRINE: with a gross interest rate of 16.25% per annum.
Principals in an agency relationship are solely obliged to observe the  Invesment banks are authorized to buy such
solemnity of the transaction entered into by the agent on their behalf, documents for investment purposes on behalf of
absent any proof that the latter acted beyond its authority, and their clients upon the latter’s express instructions.
concomitant to this obligation is that the principal also assumes the risks  The remaining money from the Php3M was put in
that may arise from the transaction; Bank regulations prohibit banks two PRPN accounts in trust for Amalia’s 2
from guaranteeing profits or the principal in an investment management children.
account. o That day, she signed the ff. documents: a
Directional Investment Management Agreement
(DIMA), Term Investment Application (TIA), and a
FACTS:
Directional Letter, which served as Amalia’s
 Amalia Panlilio deposited in Citibank’s Makati branch Php1M
specific instructions to Citibank regarding the
into a “Citihi” account, which is a fixed-term savings account with
investment of her money.
a higher-than-average interest.
 The DIMA and Directional Letter both contain specific
o She initially wanted to invest the money in a Peso
provisions that state that clear Citibank of any obligation
Repriceable Promissory Note (PRPN), which yielded
to guarantee the principal and interest of the investment
higher interest, but it wasn’t available on that day.
absent fraud or negligence on its part, and that all risks
 On the same day (Oct. 10, 1997), she also opened a checking
shall be assumed by Amalia.
account, to which the interests of the Citihi account will be
o Pursuant to these investments, Citibank regularly sent
credited.
Amalia confirmations of investment (COI), which is a 1-
o Jinky Suzara Lee was assigned to personally transact w/
page computer generated document that stated where her
Amalia and handle the accounts.
money went.
 These accounts were “ITF” or “in trust for”
o Amalia received the first COI on December 9, 1997.
accounts.
 According to her, it was the first time she learned
 This means that they were intended to benefit her
that her money was put into an LCTP and that
minor children in case she would meet an
she never instructed the bank to do so but only to
untimely death. In order to open them, she had to
open a “trust account with an interest of around
sign 2 documents: a Relationship Opening Form
16.25% w/ a term of 91 days”.
(ROF) and a Invester Profiling and Suitability
o She claims that upon receipt of the 1st COI, she
Questionnaire (Questionnaire).
immediately called Lee and asked that the investment in
 About a month later, on Nov. 28, Amalia phoned Citibank
the LTCP be withdrawn.
saying she wanted to place another investment for Php3M.
 However, according to Amalia, Lee convinced her
o She brought a PCIB check worth that amount to Citibank.
not to withdraw her investments immediately
Php2,134,635 was placed in a Long-Term
because C&P Homes is owned by Ayala Corp. and
Commercial Paper (LTCP) issued by Camella and
is therefore secure, and that in any case, she could
Palmera Homes (C&P Homes).
easily withdraw them at a later date.
 Essentially, an LTCP is a debt of indebtedness
o She also claims that she signed blank documents and that
with a maturity period of more than 365 days, and
the bank only made unauthorized intercalations.
is issued by a corporation to any person or entity.
  Around August 1998, newspaper reports about the  As such, the principal shall “at all times retain
plummeting of C&P Homes stocks and Ayala’s subsequent legal title to the funds...subject of the agreement.”
withdrawal of its investments in the company hit the o Under Sec. 6, the investment manager (in this case,
public. Citibank), is absolved of any liability in the absence of
o On Aug. 6, Amalia met with Lizza Colet, another Citibank fraud, bad faith, or gross or willful negligence on its part.
employee, to preterminate the LTCP and their other The same terms are contained within the Directional
investments. Letter. Thus, they generally extricate Citibank from
 However, in order for the LTCP to be responsibility in case the investment is lost.
preterminated before maturity, there must be  The DIMA, Directional Letter, TIA and COIs, read together,
another willing buyer for it. establish that the agreement between the parties, as an
 It was very hard to find buyers then because of investment management agreement, created a principal-agent
the economic crisis. Still, petitioner spouses relationship.
signed 3 sets of Sales Order Slips to sell the LTCP o Citibank purchased the LTCPs only as agent of
and left these with Colet. petitioners. Amalia’s proper recourse is against C&P
o On Aug. 18, Amalia sent their first formal, written Homes and only upon maturity.
demand to Citibank for the withdrawal of her o As principals, they are bound by the provisions of
investment ASAP. the contracts entered into by their agents absent
o In its response, Citibank says that the investment was any proof that the latter acted beyond its authority.
not a deposit so its return to the investor was not It’s the principal who assumes the risks that may
guaranteed by the bank and that its sale is still subject to arise from the transaction.
the availability of other buyers.  The Court ruled that there’s no merit to petitioner’s claim that
 Also, Citibank denies that Amalia immediately they signed blank documents.
called them upon her receipt of the 1st COI, and o Amalia testified that she didn’t ordinarily sign blank
they also deny that they just convinced her not to documents. Evidence shows that Amalia is a smart
withdraw her investments immediately. businesswoman. She wouldn’t just sign any document
 Thus, petitioners filed a case with the RTC for the recovery of a without first reviewing it.
sum of money and damages. The Panlilios won. However, upon o The rule that any ambiguity in a contract of adhesion
appeal, the CA reversed the RTC decision. 
 shall be strictly construed against the one who wrote the
contract can’t apply in this case because there is no
ISSUE/S: evidence of any ambiguity, obstruction or doubt.
W/N Citibank is liable to return to Amalia the Php2,134,635 - NO  The construction only applies when the ambiguity,
obstruction or doubt is present in the contract.
RULING: o The word “TRUST” in the TIA merely indicates that it
 As evidenced by the DIMA and Directional Letter, Amalia was to be handled by the trust department.
opned an investment managing account.  The fact that it was handled by the trust
o In essence, Amalia constituted Citibank as an department of the bank is immaterial because the
investment manager, which gave birth to a trust department also handles other fiduciary and
principal-agent relationship and NOT a creditor- investment management services.
debtor or trustee-trustor one. Thus, the money o Also, the fact that the ROF and Questionnaire contradict
invested was the sole and exclusive obligation of C&P the other documents is immaterial because they were
Homes. filled up for a different investment—not the one in
o Under Sec. 4 of the DIMA, it explicitly states that the question here.
agreement is one of agency and not trust. o Also, when they first demanded the withdrawal of the
investment, the Panlilio’s only questioned the maturity
 period and not the validity of the purchase of the LTCPs
themselves.
 Petitioners acts and omissions strongly indicate that they
conformed to the agreement in the months after the signing.
o In that period, they received several banks statements
and earned interest from their investments.
 In fact, C&P continued paying interest up to when
this case was on trial.
o Suspiciously, it was only when news reports about C&P
Homes’ stock crash got out that the Panlilio’s decided to
withdraw their investment.

DISPOSITIVE:
WHEREFORE, the Petition is DENIED. For lack of evidence, the
Decision of the Court of Appeals dated dated May 28, 2002 and its
Resolution of December 11, 2002, are AFFIRMED.

Costs against the petitioners.

 RAMOS v. RAMOS (Bianca Kit, FEU 2021)  All children, legitimate or natural lived together in Hacienda
61 SCRA 284, 298 (1974) Ylaya and were all under Martin Ramos’ care, which even
Gregoria Ramos 
admitted, that they all maintained close
Petitioner: EMILIANO B. RAMOS, ET AL.
relations with each other 

Respondents: GREGORIA T. RAMOS, ET AL.
 Partition was submitted and signed by all 3 legitimate children,
and 2 
natural children (In representation of other minors) 

DOCTRINE:
o Conjugal hereditary estate was at P74M, with 18 parcels
Trust defined.—In its technical sense, a trust is defined as the right,
of land and cattle
enforceable solely in equity, to the beneficial enjoyment of property, the
 Jose: P25K – Hacienda Ylaya
legal title to which is vested in another, but the word “trust” is frequently
 Granada: P1.8K
employed to indicate duties, relations, and responsibilities which are not
 Agustin: P36K – Hacienda Calaza 7
strictly technical trusts
 natural children: P1.7K
 Record does not show whether assessed or market values were
Express trusts are those which are created by the direct and positive
used in appraising 18 parcels of land 

acts of the parties, by some writing or deed, or will, or by words either
 P74K, 1/2 was Martin’s and 1/3 of that was the free portion from
expressly or impliedly evincing an intention to create a trust
where the 7 natural children would get their share 

 Lands were in Himamaylan Negros Occidental (Haciendas Calaza
Implied trust defined.—Implied trusts are those which, without being
and Ylaya) 

expressed, are deducible from the nature of the transaction as matters of
intent, or which are superinduced on the transaction by operation of law  The 7 natural children of Martin Ramos filed an action for
as matters of equity, independently of the particular intention of the reconveyance against the 3 legitimate children for 8 lots which
parties are part of Hacienda Calaza (The 1/6 that they were entitled to is
based on Art. 840) 

Resulting trust defined.—A resulting trust is broadly defined as a o Really directed against the heirs of Jose, his wife Gregoria
trust which is raised or created by the act or construction of law, but in and daughter Candida (in whose names the 8 lots are
its more restricted sense it is a trust raised by implication of law and registered)
presumed always to have been contemplated by the parties, the intention
as to which is to be found in the nature of their transaction, but not Gregoria et. al’s Contentions:
expressed in the deed or instrument of conveyance  There was no trust, and that there was a release of claim as
shown in 
the project of partition which was approved 

Constructive trust defined.—A constructive trust is a trust “raised by  Res judicata and prescription
construction of law, or arising by operation of law”.
Emiliano Ramos’ Contentions: 

Acquisitive prescription does not run in favor of a trustee in an  Prejudiced by the partition, several anomalies in the partition
express trust.—There is a rule that a trustee cannot acquire by agreement 

prescription the ownership of property entrusted to him  Shares of 8 lots now in Gregoria’s name were held in trust for
them

Facts: Issue/s: W/N a trust was established in favor of the natural children –
 Martin Ramos and Candida Tanate died leaving 3 legitimate NO
children: Jose, Agustin, Granada
o Martin Ramos had 7 natural children: Atanacia, Timoteo, Ruling: Petition DISMISSED. Lower court ruling AFFIRMED. 

Modesto, Manuel, Emiliano, Maria, Federica
o Rafael, Martin’s brother, was administrator of his estate Ratio:
 Acknowledgement of natural children is not evidenced by a record
of birth or any other public document, but the record of Civil Case
No. 217 indubitably shows that the plaintiffs were treated as
acknowledged natural children of Martin Ramos
o They were in continuous possession of the status of
natural children as evidenced by his direct acts and of his
family
o The fact that they received shares in his estate implies
acknowledgement
o The legitimate children are estopped from attacking
plaintiffs’ status as acknowledged, as they themselves
accorded them successional rights
o Even lower court, treated them as acknowledged natural
children in intestate proceedings had no choice but to
affirm that
 The plaintiffs did not prove any express trust. The
intestate proceeding merely proved that the estate of
Martin Ramos was settled and made to his 7 natural
children.
 They did not even specify what kind of trust they contemplated in
their action, and regardless of what kind, it is barred by laches.
 On its face, the partition agreement was theoretically correct
since 7 natural children were given their full legitime. It was
possible that the lands were undervalued or were not properly
appraised at their fair market value and the natural children
were short changed in the computation of their shares. (Land
value increases over time)
o No receipts were submitted in court to prove that Jose
and Agustin paid the plaintiffs the cash adjudicated to
them in the project of partition 

o 2 others were already of age that time and could not have
been represented by Timoteo Zayco; were denied due
process 

o Accused Zayco of not having competently protected the
interests of minors 

o Atanacia signed without understanding the receipts as
they were in Spanish
 All these contentions would deserve serious consideration
if the plaintiffs had not slept on their rights for more than
40 years; they are barred by laches.