A.I. Powered: Philippine Bar Reviewer

Question

A. General Principles: Trust Fund Doctrine

Scenario:

Alpha Corporation is a real estate development company. It recently completed a major housing project and received payments from several buyers. As part of its legal obligations, Alpha Corporation is required to set up a trust fund to hold the payments received from the buyers. The purpose of the trust fund is to ensure that the funds will be used exclusively for the completion of the housing project as agreed upon.

However, the company faced financial difficulties and was unable to complete the project. The buyers became concerned about the status of their payments and the utilization of the trust fund.

With regard to the Trust Fund Doctrine in the Philippines, answer the following question:

1. What is the legal concept of the Trust Fund Doctrine in the Philippines?
2. What are the obligations of Alpha Corporation in relation to the trust fund and the payments received from the buyers?
3. What legal remedies are available to the buyers if Alpha Corporation failed to fulfill its obligations under the Trust Fund Doctrine?

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Answer