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    Tala vs. Banco Filipino

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    Karissa Tolentino
    Banco Filipino sold nine properties to Tala Realty to expand its operations beyond the limits imposed by the General Banking Act. Tala Realty then leased the properties back to Banco Filipino. However, Banco Filipino acknowledged that the sale and leaseback was actually part of an implied trust agreement, or "warehousing agreement", to circumvent the property holding limits of the Act. The Court ruled that no valid implied trust existed because the agreement between the two parties was made in violation of the Act and to evade its provisions. As the purpose of the agreement was contrary to law, Banco Filipino could not claim the defense of an implied trust.

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    Tala vs. Banco Filipino

    Uploaded by

    Karissa Tolentino
    297 views1 page
    Banco Filipino sold nine properties to Tala Realty to expand its operations beyond the limits imposed by the General Banking Act. Tala Realty then leased the properties back to Banco Filipino. However, Banco Filipino acknowledged that the sale and leaseback was actually part of an implied trust agreement, or "warehousing agreement", to circumvent the property holding limits of the Act. The Court ruled that no valid implied trust existed because the agreement between the two parties was made in violation of the Act and to evade its provisions. As the purpose of the agreement was contrary to law, Banco Filipino could not claim the defense of an implied trust.

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    Banco Filipino sold nine properties to Tala Realty to expand its operations beyond the limits imposed by the General Banking Act. Tala Realty then leased the properties back to Banco Filipino. However, Banco Filipino acknowledged that the sale and leaseback was actually part of an implied trust agreement, or "warehousing agreement", to circumvent the property holding limits of the Act. The Court ruled that no valid implied trust existed because the agreement between the two parties was made in violation of the Act and to evade its provisions. As the purpose of the agreement was contrary to law, Banco Filipino could not claim the defense of an implied trust.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    297 views1 page

    Tala vs. Banco Filipino

    Uploaded by

    Karissa Tolentino
    Banco Filipino sold nine properties to Tala Realty to expand its operations beyond the limits imposed by the General Banking Act. Tala Realty then leased the properties back to Banco Filipino. However, Banco Filipino acknowledged that the sale and leaseback was actually part of an implied trust agreement, or "warehousing agreement", to circumvent the property holding limits of the Act. The Court ruled that no valid implied trust existed because the agreement between the two parties was made in violation of the Act and to evade its provisions. As the purpose of the agreement was contrary to law, Banco Filipino could not claim the defense of an implied trust.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
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    Tala Realty vs. Banco Filipino, Nov.

    22, 2002
    Banco Filipino wanted to expand its operations. But it cannot anymore acquire new properties since it already reached its limits as provided for by the General Banking Act. So it sold (9) of its properties with Tara Realty and then the latter executed a lease agreement with the bank leasing the (9) properties to Banco Filipino. However, the bank did not really intended a genuine sale of its (9) properties as it was only made in order for it to acquire other properties. The Bank acknowledged that the sale and twenty-year lease of the property were part of a larger implied trust "warehousing agreement."

    Issue: is there a valid trust? Held: No. Trust is either express or implied.
    The Bank, in alleging the existence of an implied trust between it and Tala, relies on Articles 1448 and 1453 of the New Civil Code which provide: "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. . . xxx xxx xxx Art. 1453. When property is conveyed to a person in reliance upon his declared intention to hold it for, or transfer it to another or the grantor, there is an implied trust in favor of the person whose benefit is contemplated." Both Articles 1448 and 1453 invoked by the Bank are examples of resulting trusts. An implied trust could not have been formed between the Bank and Tala as this Court has held that "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." The Bank cannot use the defense of nor seek enforcement of its alleged implied trust with Tala since its purpose was contrary to law. As admitted by the Bank, it "warehoused" its branch site holdings to Tala to enable it to pursue its expansion program and purchase new branch sites including its main branch in Makati, and at the same time avoid the real property holdings limit under Sections 25(a) and of the General Banking Act which it had already reached. The Bank stated in its Memorandum that "the new branch sites which the Bank will be disqualified from buying, by reason of the aforecited limitations under existing banking laws and regulations, will be acquired for it by the Tala which will forthwith lease them to the Bank. Clearly, the Bank was well aware of the limitations on its real estate holdings under the General Banking Act and that its "warehousing agreement" with Tala was a scheme to circumvent the limitation.

    Bus. Org.; Trusts; JGR

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