Practice question
A fiduciary secretly uses funds held for a beneficiary to buy land and puts the title in the fiduciary's own name. The fiduciary claims absolute beneficial ownership merely because the title names the fiduciary. Which rule addresses the transaction?
- Article 1455 creates a trust by operation of law in favor of the person whose funds were used
- The name on title always extinguishes every fiduciary obligation
- The beneficiary must prove an express written declaration to invoke any trust
- The fiduciary automatically owns the funds after using them
- The transaction necessarily gifts the land to the State
Legal references
- Civil Code Articles 1440–1457: https://lawphil.net/statutes/repacts/ra1949/ra_386_1949.html
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