[G.R. No. 133047. August 17, 1999.

]
HEIRS OF LORENZO YAP, namely SALLY SUN YAP, MARGARET YAP-UY and
MANUEL YAP, petitioners, vs. THE HONORABLE COURT OF APPEALS, RAMON
YAP and BENJAMIN YAP, respondents.
Ciruelo, Muyco & Associates for petitioners.
Rico & Associates for private respondents.
SYNOPSIS
Sometime in February 1966, private respondent Ramon Yap purchased a parcel of land situated
in Galas, Quezon City. The lot was thereupon registered in his name. Subsequently, he
constructed 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, while the rest was shouldered by his mother. 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. On 18 March 1992,
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. On
29 July 1992, private respondents filed an action with the Regional Trial Court of Quezon City
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 latter's naturalization.
In 1991, petitioners acquired Philippine citizenship and, forthwith, they requested Ramon to have
the title to the lot transferred to their names but they discovered that he had sold the lot to his corespondent. In addition, petitioners claimed that it was Lorenzo who had caused the construction
of the 3-door apartment, merely entrusting the money therefor to Ramon. Assessing the evidence
before it, the trial court rendered a decision in favor of private respondents. On appeal, the Court
of Appeals affirmed with modification the decision of the trial court, finding the evidence
submitted by petitioners to be utterly wanting. Hence, this petition.
In affirming the decision of the Court of Appeals, the Supreme Court held that findings of fact by
the Court of Appeals, particularly when consistent with those made by the trial court, should
deserve utmost regard when not devoid of evidentiary support. No cogent reason had been
shown by petitioners for the Court to now hold otherwise. Not to be dismissed, furthermore, is
the long standing and broad doctrine of clean hands that will not allow the creation or the use of
a juridical relation, a trust whether express or implied included, to perpetrate fraud or tolerate
bad faith not to subvert, directly or indirectly, the law. 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.
SYLLABUS
1.
CIVIL LAW; TRUST; EXPRESS TRUST; DISTINGUISHED FROM IMPLIED
TRUST. A trust may either be express or implied. Express trusts are those which are created
by the direct and positive acts of the parties, by some writing or deed, or will, or by words
evincing an intention to create a trust. Implied trusts are those which, without being express, are
deducible from the nature of the transaction as matters of intent or, independently of the
particular intention of the parties, as being superinduced on the transaction by operation of law
basically by reason of equity. These species of implied trust are ordinarily subdivided into
resulting and constructive trusts. A resulting trust is one that arises by implication of law and
presumed always to have been contemplated by the parties, the intention as to which can be
found in the nature of their transaction although not expressed in a deed or instrument of
conveyance. Resulting trusts are based on the equitable doctrine that it is the more valuable
consideration than the legal title that determines the equitable interest in property. Upon the other
hand, a constructive trust is a trust not created by any word or phrase, either expressly or
impliedly, evincing a direct intention to create a trust, but one that arises in order to satisfy the
demands of justice. 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.
2.
ID.; ID.; CONSIDERED INVALID IF ENFORCEMENT THEREOF IS AGAINST THE
LAW. Not to be dismissed, furthermore, is the long standing and broad doctrine of clean
hands that will not allow the creation or the use of a juridical relation, a trust whether express or
implied included, to perpetrate fraud or tolerate bad faith nor to subvert, directly or indirectly, the
law. The trust agreement between Ramon and Lorenzo, if indeed extant, would have been in
contravention of, in fact, the fundamental law. Then Section 5, Article XIII, of the 1935
Constitution has provided that "Save in cases of hereditary succession, no private agricultural
land shall be transferred or assigned except to individuals, corporations, or associations qualified
to acquire or hold lands of the public domain in the Philippines." The mandate has also been
adopted in Section 14, Article XIV, of the 1973 Constitution and now reiterated under Section 7,
Article XII, of the 1987 Constitution. 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. It likewise must follow that 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. IEHDAT
3.
REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT BY THE COURT OF
APPEALS DESERVE UTMOST REGARD WHEN NOT DEVOID OF EVIDENTIARY
SUPPORT. Unfortunately for petitioners, the issues they submit in the case at bar boil down
to the appreciation of the evidence presented. The Court of Appeals, sustaining the court a quo,
has found the evidence submitted by petitioners to be utterly wanting, consisting mainly of the
self-serving testimony of Sally Yap. She 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.
Upon the other hand, Ramon Yap was by then an accountant with apparent means to buy the
property himself. At all events, findings of fact by the Court of Appeals, particularly when
consistent with those made by the trial court, should deserve utmost regard when not devoid of
evidentiary support. No cogent reason had been shown by petitioners for the Court to now hold
otherwise.
DECISION
VITUG, J p:
What in essence petitioners seek is the enforcement of an alleged trust agreement between
Lorenzo Yap, now deceased, and his brothers Ramon and Benjamin, herein co-respondents,
covering a piece of land and its improvement. The case and factual settings found by the Court of
Appeals do not appear to deviate significantly from that priorly made by the trial court.
Sometime in February 1966, Ramon Yap purchased a parcel of land situated at 123 (formerly 75)
Batanes Street, Galas, Quezon City, covered by Transfer Certificate of Title No. 82001/T-414,
from the spouses Carlos and Josefina Nery. The lot was thereupon registered in the name of
Ramon Yap under Transfer Certificate of Title No. 102132; forthwith, he also declared the
property in his name for tax purposes and paid the real estate taxes due thereon from 1966 to
1992. In 1967, Ramon Yap constructed a two-storey 3-door apartment building for the use of the
Yap family. One-fifth (1/5) of the cost of the construction was defrayed by Ramon Yap while the
rest was shouldered by Chua Mia, the mother of Lorenzo, Benjamin and Ramon. Upon its
completion, the improvement was declared for real estate tax purposes in the name of Lorenzo
Yap in deference to the wishes of the old woman.
Lorenzo Yap died on 11 July 1970. A few months later, his heirs (herein petitioners) left their
family dwelling in Lucena City to reside permanently in Manila. Ramon Yap allowed petitioners
to use one unit of the apartment building.

On 18 March 1992, Ramon Yap sold the land and his share of the 3-door apartment to his
brother, his herein co-respondent Benjamin Yap, for the sum of P337,500.00 pursuant to a Deed
of Sale, recorded on even date in the Memorandum of Encumbrances of the title to said property.
Transfer Certificate of Title No. 73002 was in due time issued in the name of Benjamin Yap.
The controversy started when herein petitioners, by a letter of 08 June 1992, advised respondents
of the former's claim of ownership over the property and demanded that respondents execute the
proper deed necessary to transfer the title to them. At about the same time, petitioners filed a
case for ejectment against one of the bonafide tenants of the property.
On 29 July 1992, respondents filed an action with the Regional Trial Court ("RTC") of Quezon
City, docketed Civil Case No. Q-92-12899, for quieting of title against petitioners. In their
answer, petitioners averred that sometime in 1966 the spouses Carlos and Josefina Nery offered
to sell the disputed parcel of land to their predecessor-in-interest, Lorenzo Yap, for the sum of
P15,000.00. Since Lorenzo and his wife Sally Yap were at that time Chinese citizens, Lorenzo
requested his brother Ramon to allow the use of the latter's name in the purchase, registration,
and declaration for tax purposes of the subject lot to which Ramon Yap consented. It was agreed
that the property would remain registered in the name of Ramon Yap until such time as Lorenzo
would have acquired Philippine citizenship but that, should Lorenzo predecease, the lot would
then be transferred to Lorenzo's heirs upon the latter's naturalization. Petitioners contended that it
was Lorenzo who had caused the construction of the 3-door apartment on the property, merely
entrusting the money therefor to Ramon Yap. The death of Lorenzo in 1970 prompted petitioners
to move in and occupy the apartment and the lot, without any objection from Ramon and
Benjamin, although the latter were allowed to stay in the premises since they had no other place
to live in. In 1991, petitioners acquired Philippine citizenship and, forthwith, they requested
Ramon Yap to have the title to the lot transferred to their names but to their chagrin they
discovered that Ramon had sold the lot to his co-respondent Benjamin.
Assessing the evidence before it, the trial court found for the respondents and adjudged
Benjamin Yap to be the true and lawful owner of the disputed property.
On appeal, the Court of Appeals affirmed the decision of the trial court and debunked the claim
of petitioners that Ramon Yap was merely so used as a dummy by Lorenzo Yap. Giving full
weight and credit to the Deed of Sale executed by the Nery spouses in favor of Ramon Yap, the
appellate court stressed that to overcome the presumption of regularity in the execution of a
public document, the evidence to the contrary should be clear and convincing even as it was
equally incumbent upon petitioners to show that the subsequent sale of the property to Benjamin
had only been simulated and fictitious. The appellate court, however, deleted the award of
attorney's fees in favor of respondents for, in its view, it was not adequately shown that
petitioners had acted in bad faith in pursuing their case.

Petitioners are now before this Court seeking a reversal of the decision of the Court of Appeals
and contending that
"I
"THE RESPONDENT COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN
IT HOLDS THAT DEFENDANTS-APPELLANTS FATHER, LORENZO YAP, BEING
CHINESE CAN NOT ENTER INTO A TRUST AGREEMENT AND THE EXISTENCE OF A
TRUST AGREEMENT CAN NOT BE PROVEN BEING CHINESE.
"II
"THE RESPONDENT COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN
IT HOLDS THAT THE FAILURE TO SHOW WRITTEN TRUST AGREEMENT RENDERS
THE ALLEGED AGREEMENT UNENFORCEABLE BY NOT CONSIDERING THE SAME
AS ONE UNDER IMPLIED TRUST.
"III
"THE RESPONDENT COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN
IT HOLDS THAT PAROL EVIDENCE AND/OR STATUTE OF FRAUDS APPLIED IN THE
CASE AT BAR.
"IV
"THE RESPONDENT COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN
IT HOLDS THAT APPELLANTS HAVE TO REFUTE THE DEED OF SALE EXECUTED
BY THE NERY SPOUSES IN FAVOR OF RAMON YAP BY CLEAR AND CONVINCING
EVIDENCE NOTWITHSTANDING ADMISSION OF THE SAID DEED OF SALE.
"V
"THE RESPONDENT COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN
IT DID NOT CONSIDER THAT IN TRUST THE TITLE IS IN THE NAME OF THE
TRUSTEE AND NOT IN THE NAME OF THE NAKED OWNER.
"VI
"THE RESPONDENT COURT OF APPEALS ERRED WHEN IT HOLDS THAT RAMON
YAP CAN NOT BE A DUMMY OF LORENZO YAP BEING ALIEN AND DISQUALIFIED
TO OWN REAL PROPERTY.
"VII
"THE RESPONDENT COURT OF APPEALS ERRED IN NOT DECLARING THE TITLE IN
THE NAME OF RAMON YAP VOID BEING ACQUIRED AS DUMMY.

"VIII
"THAT RESPONDENT COURT OF APPEALS COMMITTED REVERSIBLE ERROR
WHEN IT RULED THAT BENJAMIN YAP HAS POSSESSION OF APARTMENT UNIT 123
LIKEWISE OWNERSHIP PERSONAL PROPERTIES THEREIN ON THE BASIS OF THE
INVENTORY OF THE SHERIFF OF THE COURT A QUO BY WAY OF A SUBSEQUENT
MANDATORY INJUNCTION WHICH WAS DENIED." 1
The Court finds no merit in the appeal.
To begin with, a brief discussion on the trust relation between two parties could be helpful. A
trust may either be express or implied. 2 Express trusts are those which are created by the direct
and positive acts of the parties, by some writing or deed, or will, or by words evincing an
intention to create a trust. 3 Implied trusts are those which, without being express, are deducible
from the nature of the transaction as matters of intent or, independently of the particular intention
of the parties, as being superinduced on the transaction by operation of law basically by reason
of equity. 4 These species of implied trust are ordinarily subdivided into resulting and
constructive trusts. 5 A resulting trust is one that arises by implication of law and presumed
always to have been contemplated by the parties, the intention as to which can be found in the
nature of their transaction although not expressed in a deed or instrument of conveyance. 6
Resulting trusts are based on the equitable doctrine that it is the more valuable consideration than
the legal title that determines the equitable interest in property. 7 Upon the other hand, a
constructive trust is a trust not created by any word or phrase, either expressly or impliedly,
evincing a direct intention to create a trust, but one that arises in order to satisfy the demands of
justice. It does not come about by agreement or intention but in main by operation of law 8
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. 10 An implied trust, in
fine, cannot be established upon vague and inconclusive proof.
Unfortunately for petitioners, the issues they submit in the case at bar boil down to the
appreciation of the evidence presented. The Court of Appeals, sustaining the court a quo, has
found the evidence submitted by petitioners to be utterly wanting, 12 consisting mainly of the
self-serving testimony of Sally Yap. She 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.
Upon the other hand, Ramon Yap was by then an accountant with apparent means to buy the
property himself. At all events, findings of fact by the Court of Appeals, particularly when

consistent with those made by the trial court, should deserve utmost regard when not devoid of
evidentiary support. No cogent reason had been shown by petitioners for the Court to now hold
otherwise.
Not to be dismissed, furthermore, is the long standing and broad doctrine of clean hands that will
not allow the creation or the use of a juridical relation, a trust whether express or implied
included, to perpetrate fraud or tolerate bad faith nor to subvert, directly or indirectly, the law.
The trust agreement between Ramon and Lorenzo, if indeed extant, would have been in
contravention of, in fact, the fundamental law. Then Section 5, Article XIII, of the 1935
Constitution has provided that
"Save in cases of hereditary succession, no private agricultural land shall be transferred or
assigned except to individuals, corporations, or associations qualified to acquire or hold lands of
the public domain in the Philippines."
The mandate has also been adopted in Section 14, Article XIV, of the 1973 Constitution and now
reiterated under Section 7, Article XII, of the 1987 Constitution. 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. It
likewise must follow that 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. 13
The foregoing disquisition renders unnecessary the resolution of the incidental issues raised in
the petition.
WHEREFORE, the instant petition is DENIED, and the decision of the respondent Court of
Appeals of 08 January 1998 in C.A.-G.R. CV No. 46838 is AFFIRMED. Costs against
petitioners.
SO ORDERED.
Melo, Panganiban and Purisima JJ., concur.
Gonzaga-Reyes J., took no part; member of the Court of Appeals Division that rendered the
decision.