Dear PAO,

I was an OFW for almost 30 years. Since I was not here in the Philippines most of the time, I asked my sister to buy a house and lot on my behalf. Because of my trust in her, I also let the house and lot be registered under her name. I even let her and her family use it since I return home that often. Now that I am retiring, I told her that they needed to vacate and look for another house. She now refuses to leave and claims that since the title is under her name, she is the true owner of the property. Is she correct?

Jessica

Dear Jessica,

Please be informed of Article 1448 of the New Civil Code which states that:

“Art. 1448. There is an implied trust when property is sold, and the legal estate is granted to one party but the price is paid by another for the purpose of having the beneficial interest of the property. The former is the trustee, while the latter is the beneficiary. However, if the person to whom the title is conveyed is a child, legitimate or illegitimate, of the one paying the price of the sale, no trust is implied by law, it being disputably presumed that there is a gift in favor of the child.”

The above-mentioned provision stated that there is an implied trust when a property is sold to one person but was paid by another for the purpose of having the beneficial interest in the property. In Pigao vs Rabanillo (GR 150712, May 2, 2006), the Supreme Court, through Chief Justice Renato Corona (then associate justice), held that:

“A resulting trust is exemplified by Article 1448 of the Civil Code xxx

“The trust created under the first sentence of Article 1448 is sometimes referred to as a purchase money resulting trust. The trust is created in order to effectuate what the law presumes to have been the intention of the parties in the circumstances that the person to whom the land was conveyed holds it as trustee for the person who supplied the purchase money.

“To give rise to a purchase money resulting trust, it is essential that there be:

“1. an actual payment of money, property or services, or an equivalent, constituting valuable consideration;

“2. and such consideration must be furnished by the alleged beneficiary of a resulting trust.

“There are recognized exceptions to the establishment of an implied resulting trust. The first is stated in the last part of Article 1448 itself. Thus, where A pays the purchase money and title is conveyed by absolute deed to A’s child or to a person to whom A stands in loco parentis and who makes no express promise, a trust does not result, the presumption being that a gift was intended. Another exception is, of course, that in which an actual contrary intention is proved. Also where the purchase is made in violation of an existing statute and in evasion of its express provision, no trust can result in favor of the party who is guilty of the fraud.”

Applying this to your case, since it is clear from the narration of facts that the property was bought by you and was merely named after your sister for purposes of convenience, an implied trust was created on the property. The right to use the property was given temporarily to your sister, but the legal and beneficial ownership remains with you. Considering that you are now returning to the Philippines, you may validly transfer the title back to your name. You have to prove, however, that you indeed paid for the price of the property, as this is essential to establish the implied trust between you and your sister with respect to the subject contract.

We hope that we were able to answer your queries. Please be reminded that this advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated on.

Editor’s note: Dear PAO is a daily column of the Public Attorney’s Office. Questions for Chief Acosta may be sent to dearpao@manilatimes.net