TRUST-digest

TRUST PENALBER VS. RAMOS G.R. No. 178645. January 30, 2009

Facts: Petitioner operated a hardware store in a building along Bonifacio St., Tuguegarao, Cagayan, which stood in a commercial lot owned by Maria Mendoza, from whom the petitioner rented the same. In 1982, petitioner allowed respondents to manage the store. In 1984, Mendoza put the Bonifacio property for sale. Having no funds, Petitioner  allegedly entered into a verbal agreement with respondents stipulating that the latter shall buy the property in behalf of the petitioner and the consideration for the lot shall be paid from the accumulated earnings of the store. On September 20, 1984, respondents returned the management of the store to the petitioner with an inventory showing a difference of  P116,946.15. The petitioner then demanded from the respondents the reconveyance title of the property but the latter  refused. Petitioner argues that the respondents are mere trustees of the property and thus, are under moral and legal obligation to reconvey the property to her. Petitioner further  argues that the difference in the inventory proves that such amount was used to pay for the purchase price of the property. Respondents, on the other hand, contend that they have the full ownership of the property because they paid for it out of their  own funds. The petitioner filed a case before the RTC which rendered a judgment in favor of the petitioner, which was later  on reversed by the Court of Appeals. Issue: Whether there is a valid and enforceable trust. Held:

No, the Court ruled that petitioner’s allegations as to the existence of an express trust agreement with respondent spouses Ramos, supported only by her own and her son Johnson’s testimonies, do not hold water. A resulting difference of P116,946.15 in the beginning inventory of the stocks of the hardware store and the second inventory thereof, by itself, is not conclusive proof that the said amount was used to pay the purchase price of the Bonifacio property, such as would make it the property of petitioner held merely in trust by respondent spouses Ramos.