Professional Documents
Culture Documents
202247
acquire and register the club share under its name, Sime Darby had the share registered under the
name of respondent Mendoza, Sime Darbys former sales manager, under a trust arrangement.
Such fact was clearly proved when in the application form 17 dated 17 July 1987 of the ACC for the
purchase of the club share, Sime Darby placed its name in full as the owner of the share and
Mendoza as the assignee of the club share. Also, in connection with the application for membership,
Sime Darby sent a letter18 dated 17 September 1987 addressed to ACC confirming that "Mendoza,
as Sime Darbys Sales Manager, is entitled to club membership benefit of the Company."
Even during the trial, at Mendozas cross-examination, Mendoza identified his signature over the
printed words "name of assignee" as his own and when confronted with his Reply-Affidavit, he did
not refute Sime Darbys ownership of the club share as well as Sime Darbys payment of the monthly
billings from the time the share was purchased. 19 Further, Mendoza admitted signing the club share
certificate and the assignment of rights, both in blank, and turning it over to Sime Darby. Clearly,
these circumstances show that there existed a trust relationship between the parties.
While the share was bought by Sime Darby and placed under the name of Mendoza, his title is only
limited to the usufruct, or the use and enjoyment of the clubs facilities and privileges while employed
with the company. In Thomson v. Court of Appeals, 20 we held that a trust arises in favor of one who
pays the purchase price of a property in the name of another, because of the presumption that he
who pays for a thing intends a beneficial interest for himself. While Sime Darby paid for the purchase
price of the club share, Mendoza was given the legal title. Thus, a resulting trust is presumed as a
matter of law. The burden then shifts to the transferee to show otherwise.
Mendoza, as the transferee, claimed that he only signed the assignment of rights in blank in order to
give Sime Darby the right of first refusal in case he decides to sell the share later on. A right of first
refusal, in this case, would mean that Sime Darby has a right to match the purchase price offer of
Mendozas prospective buyer of the club share and Sime Darby may buy back the share at that
price. However, Mendozas contention of the right of first refusal is a self-serving statement. He did
not present any document to show that there was such an agreement between him and the
company, not even an acknowledgment from Sime Darby that it actually intended the club share to
be given to him as a reward for his performance and past service.
It can be gathered then that Sime Darby did not intend to give up its beneficial interest and right over
the share. The company merely wanted Mendoza to hold the share in trust since Sime Darby, as a
corporation, cannot register a club share in its own name under the rules of the ACC. At the same
time, Mendoza, as a senior manager of the company, was extended the privilege of availing a club
membership, as generously practiced by Sime Darby.
1wphi1
However, Mendoza violated Sime Darbys beneficial interest and right over the club share after he
was informed by Atty. Ronald E. Javier of Sime Darbys plan to sell the share to an interested buyer.
Mendoza refused to give an authorization to sell the club share unless he was paid P300,000
allegedly representing his unpaid retirement benefit. In August 2004, Mendoza tried to appropriate
the club share and demanded from ACC that he be recognized as the true owner of the share as the
named member in the stock certificate as well as in the annual report issued by ACC. Despite being
informed by Sime Darby to stop using the facilities and privileges of the club share, Mendoza
continued to do so. Thus, in order to prevent further damage and prejudice to itself, Sime Darby
properly sought injunction in this case.
Whether or not the parcel of land sold to the petitioners is the subject property included in
the consolidated parcels of land sold to the spouses Perez.
HELD/RATIO:
NO. The petitioners action against Caparas and the spouses Perez for reconveyance,
based on trust, must fail for lack of basis. An action for reconveyance is a legal and
one and the same property between two parties, one having the rightful ownership and the other
holding the legal title. There is no trust created when the property owned by one party is separate
and distinct from that which has been registered in anothers name.
In this case, the Caparas survey plan and the deed of sale between the petitioners and Miguela
showed that the parcel of land sold to the petitioners is distinct from the consolidated parcels of land
sold by Caparas to the spouses Perez.
Although we are aware of an apparent discrepancy between the boundary description of the parcel
of land described in the "Kasulatan ng Tuluyang Bilihan ng Lupa" executed between Caparas and
Miguela, the "Kasulatan ng Tuluyang Bilihan ng Lupa" executed between Caparas and the spouses
Perez, and Caparas TD on the one hand, and the boundary description of the consolidated parcels
of land stated in the Caparas survey plan and the spouses Perezs title on the other hand, we find
the discrepancy more imagined than real. This perceived discrepancy does not help the petitioners
cause in light of the evidence that the deed of sale between the petitioners and Miguela used the
Caparas survey plan that clearly identified the parcel of land sold to them was different from the
subject property.
In his Answer, petitioner insisted on his rights over the mortgaged properties. Petitioner also
counterclaimed for damages and attorneys fees and the turn-over of the owners copy of the titles
for the mortgaged properties.
The Ruling of the Trial Court
The trial court ruled against respondent and his co-plaintiffs and granted reliefs to petitioner by
declaring petitioner the "true and real" mortgagee, ordering respondent to pay moral damages and
attorneys fees, and requiring respondent to deliver the titles in question to petitioner.7
Ruling of the Court of Appeals
The CA granted the petition, set aside the trial courts ruling, declared respondent the Contracts
mortgagee, directed the trial court to release the redemption payment to respondent, and ordered
petitioner to pay damages and attorneys fees.8
The Issues
The petition raises the following questions:
1. Whether an implied trust arose between petitioner and respondent, binding petitioner to
hold the beneficial title over the mortgaged properties in trust for respondent; and
2. Whether respondent is entitled to collect damages.
The Ruling of the Court
We hold in the affirmative on both questions, and thus affirm the CA.
Conflicting
Rule 45 Review
Rulings
Below
Justify
The question of the existence of an implied trust is factual, 11 hence, ordinarily outside the purview of
a Rule 45 review of purely legal questions. 12 Nevertheless, our review is justified by the need to
make a definitive finding on this factual issue in light of the conflicting rulings rendered by the courts
below.13
Implied Trust in Mortgage Contracts
An implied trust arising from mortgage contracts is not among the trust relationships the Civil Code
enumerates.14The Code itself provides, however, that such listing "does not exclude others
established by the general law on trust x x x." 15 Under the general principles on trust, equity converts
the holder of property right as trustee for the benefit of another if the circumstances of its acquisition
makes the holder ineligible "in x x x good conscience [to] hold and enjoy [it]." 16 As implied trusts are
remedies against unjust enrichment, the "only problem of great importance in the field of constructive
trusts is whether in the numerous and varying factual situations presented x x x there is a wrongful
holding of property and hence, a threatened unjust enrichment of the defendant." 17
Applying these principles, this Court recognized unconventional implied trusts in contracts involving
the purchase of housing units by officers of tenants associations in breach of their obligations, 18 the
partitioning of realty contrary to the terms of a compromise agreement, 19 and the execution of a sales
contract indicating a buyer distinct from the provider of the purchase money.20 In all these cases, the
formal holders of title were deemed trustees obliged to transfer title to the beneficiaries in whose
favor the trusts were deemed created. We see no reason to bar the recognition of the same
obligation in a mortgage contract meeting the standards for the creation of an implied trust.