Академический Документы
Профессиональный Документы
Культура Документы
CO 40 PHIL 491
FACTS:
W.G. Philpotts (Petitioner) , a stockholder in Philippine Manufacturing Company sought to compel
respondents to permit plaintiff, a person or by some authorized agent or attorney to inspect and
examine the records of the business transacted by said company since January 1, 1918.Respondent
corporation or any of its officials has refused to allow the petitioner himself to examine anything
relating to the affairs of the company, and the petitioner prays for an order commanding respondents to
place records of all business transactions of the company, during a specific period, at the disposal of the
plaintiff or his duly authorized agent or attorney. Petitioner desires to exercise said right through agent
or attorney. Petition is filed originally in the Supreme Court under authority of Section 515 of Code of
Civil Procedure, which gives SC concurrent jurisdiction with then Court of First Instance in cases
where any corporation or person unlawfully excludes the plaintiff from use and enjoyment and some
right he is entitled.
ISSUE:
Whether the right which the law concedes to a stockholder to inspect the records can be exercised by a
proper agent or attorney of the stockholder as well as by stockholder in person
HELD:
Yes. Right of inspection of records can be exercised by proper agent or attorney of the stockholder as
well as by stockholder in person. The right of inspection / examination into corporate affairs given to a
stockholder in section 51 of the Corporation Law which states:
The records of all business transactions of the corporation and the minutes of any meeting shall be
open to the inspection of any director, member, or stockholder of the corporation at reasonable hour
can be exercised either by himself or by any duly authorized representative or attorney in fact,
and either with or without the attendance of the stockholder. This is in conformity with the general
rule that what a man may do in person he may do through another
-Such would be violative of the principles and essence of agency, defined by law as a contract whereby
"a person binds himself to render some service or to do something in representation or on behalf of
another, WITH THE CONSENT OR AUTHORITY OF THE LATTER .
-In an agent-principal relationship, the personality of the principal is extended through the facility of
the agent. In so doing, the agent, by legal fiction, becomes the principal, authorized to perform all acts
which the latter would have him do. Such a relationship can only be effected with the consent of the
principal, which must not, in any way, be compelled by law or by any court.
-The Agreement itself between the parties states that "either party may terminate the Agreement
without cause by giving the other 30days' notice by letter, telegram or cable."
ART. 1931. Anything done by the agent, without knowledge of the death of the principal or of any
other cause which extinguishes the agency, is valid and shall be fully effective with respect to third
persons who may have contracted with him in good faith.
1. No, the sale was void. No one may contract in the name of another without being authorized by the
latter, or unless he has by law a right to represent him. A contract entered into in the name of another
by one who has no authority or the legal representation or who has acted beyond his powers, shall be
unenforceable, unless it is ratified, expressly or impliedly, by the person on whose behalf it has been
executed, before it is revoked by the other contracting party.
2. No, the sale did not fall under the exception to the general rule that death extinguishes the authority
of the agent. Article 1930 is not applicable because the special power of attorney executed in favor
of Simeon Rallos was not coupled with an interest. We refer to Article 1931, an act done by the
agent after the death of his principal is valid and effective only under two conditions: (1) that the
agent acted without knowledge of the death of the principal and (2) that the third person who
contracted with the agent himself acted in good faith. Simeon Rallos, knew of the death of his
principal at the time he sold the latter's share of the disputed land to respondent corporation, hence
Article 1931 is inapplicable. The law expressly requires for its application lack of knowledge on the
part of the agent of the death of his principal; it is not enough that the third person acted in good
faith.
3. No, the Civil Code does not impost a duty on the heirs of the principal to notify the agent of the eath
of the principal. If revocation was by the act of the principal: a general power which does not specify
the persons to whom represents' on should be made, it is the general opinion that all acts, executed
with third persons who contracted in good faith, without knowledge of the revocation, are valid. But,
if revocation was due to death of the principal: extinguishment, by operation of law, is instantaneous
without the need for notification to the parties concerned.
vs.
MAGDALENO M. PEA, Respondent.
FACTS:
Magdaleno Pea, a lawyer, was formerly a stockholder, director and corporate secretary of Isabel Sugar
Company, Inc. (ISCI). ISCI owned a parcel of land and leased it. Before the expiration of the lease
contract, ISCI informed the lessee and his tenants that the lease would no longer be renewed because
the land will be sold. ISCI and Urban Bank executed a Contract to Sell. ISCI then instructed Pea, to
act as its agent and handle the eviction of the tenants. The lessee left, but the unauthorized sub-tenants
refused to leave. Pea had the gates of the property closed and he also posted security guardsservices
for which he advanced payments. Despite this, the sub-tenants would force open the gates, and proceed
to carry on with their businesses. Pea then filed a complaint with the RTC, which issued a TRO. At the
time the complaint was filed, a new title to the land had already been issued in the name of Urban
Bank. When information reached the judge that the land had already been transferred by ISCI to Urban
Bank, the trial court recalled the TRO and issued a break-open order for the property. Pea
immediately contacted ISCIs president and told him that he would be recalling the security guards he
had posted to secure the property. The ISCI President asked him to suspend the withdrawal of the
posted guards, so that ISCI could get in touch first with Urban Bank. Pea also called Urban Banks
President. The President allegedly assured him that the bank was going to retain his services, and that
the he should not give up possession of the subject land. Thereafter, Pea, in representation of Urban
Bank, filed a separate complaint with the RTC-Makati City, to enjoin the tenants from entering
property. The RTC-Makati City issued a TRO. While the 2nd complaint was pending, Pea made efforts
to settle the issue of possession with the sub-tenants. The sub-tenants eventually agreed to stay off the
property for a total consideration of PhP1.5M. Pea advanced the payment for the full and final
settlement of their claims against Urban Bank. Pea formally informed Urban Bank that it could
already take possession of the property. There was however no mention of the compensation due and
owed to him for the services he had rendered. The bank subsequently took actual possession of the
property and installed its own guards at the premises. Pea filed a complaint with RTC demanding
from Urban Bank the payment of the 10% compensation and attorneys fees allegedly promised to him
by Urban Banks President. Urban Bank argued that it was ISCI, the original owners of the property,
that had engaged the services of Pea in securing the premises; and, consequently, they could not be
held liable for the expenses Pea had incurred. The RTC ruled in favor of Pea because if found there
has a contract of agency created. On appeal, it reversed RTCs decision and ordered Urban Bank to pay
Pea reasonable compensation for his service. Pea appealed on certiorari.
ISSUE:
W/N Pena is entitled to payment for the services he rendered as agent of Urban Bank and W/N there
exist a contract of agency.
HELD:
Yes.
RATIO:
Pea should be paid for services rendered under the agency relationship that existed between him and
Urban Bank based on the civil law principle against unjust enrichment, and not on the basis of
the purported oral contract. In a contract of agency, agents bind themselves to render some service or to
do something in representation or on behalf of the principal, with the consent or authority of the latter.
The essential elements of agency are the following: (a) the relationship is established by the parties
consent, express or implied; (b) the object is the execution of a juridical act in relation to a third person;
(c) agents act as representatives and not for themselves; and (d) agents act within the scope of their
authority.
Whether or not an agency has been created is determined by the fact that one is representing and acting
for another. The law makes no presumption of agency; proving its existence, nature and extent is
incumbent upon the person alleging it.
The Court concludes that Urban Bank constituted Atty. Pea as its agent to secure possession of the
property. This conclusion, however, is not determinative of the basis of the amount of payment that
must be made to him by the bank. The context in which the agency was created lays the basis for the
amount of compensation Atty. Pea is entitled to.
Agency is presumed to be for compensation. There is no evidence that Urban Bank agreed to pay Pea
a specific amount or percentage of amount for his services, so the court applies the principle against
unjust enrichment and on the basis of quantum meruit. Lawyering is not a business; it is a profession in
which duty to public service, not money, is the primary consideration. The principle of quantum meruit
applies if lawyers are employed without a price agreed upon for their services, in which case they
would be entitled to receive what they merit for their services, or as much as they have earned.
DOMINION INSURANCE V. CA
DOCTRINE: (No need to write)
When a special power of attorney is required for the agent to do a certain act, the agent, in the
performance of such act, must comply with the specifications embodied in the special power of
attorney giving him authority to do such. For example, here, a special power of attorney was needed for
Guevarra to settle the claims of Dominions clients. And for this purpose, there was a memorandum.
However, the memorandum stated that Guevarra was to settle the claims using the money in a
revolving fund. Guevarra did not comply with this, so the expenses Guevarra incurred in the settlement
of the claims of the insured may not be reimbursed from Dominion, at least under the law of agency.
FACTS:
Rodolfo Guevarra instituted a civil case for the recovery of a sum of money against Dominion
Insurance. He sought to recover P156,473.90, which he claimed to have advanced in his capacity as
manager of Dominion
to satisfy claims filed by Dominions clients. Dominion denied any liability to Guevarra and asserted a
counterclaim for premiums allegedly unremitted by the latter. The pre-trial conference never pushed
through despite being scheduled and postponed nine times over the course of six months. Finally, the
case was called again for pre-trial and Dominion and counsel failed to show up. The trial court declared
Dominion in default and denied any reconsideration. On the merits of the case, the RTC ruled that
Dominion was to pay Guevarra the P156,473.90 claimed as the total amount advanced by the latter in
the payment of the claims of Dominions clients. The CA affirmed.
ISSUES:
1. WON Guevarra acted within his authority as agent for Dominion
2. WON Guevarra is entitled to reimbursement of amounts
HELD:
1. NO. A perusal of the Special Power of Attorney would show that Dominion and Guevarra
intended to enter into a principal-agent relationship. Despite the word special, the contents of the
document reveal that what was constituted was a general agency. The agency comprises all the
business of the principal, but, couched in general terms, is limited only to acts of administration. A
general power permits the agent to do all acts for which the law does not require a special power. Art.
1878 enumerates the instances when a special power of attorney is required, including (1) to make
such payments as are not usually considered as acts of administration; (15) any other act of strict
dominion. The payment of claims is not an act of administration. The settlement of claims is not
included among the acts enumerated in the Special Power of Attorney, neither is it of a character
similar to the acts enumerated therein. A special power of attorney would have been required before
Guevarra could settle the insurance claims of the insured. Guevarras authority to settle claims is
embodied in the Memorandum of Management Agreement which enumerated the scope of Guevarra
s duties and responsibilities. However, the Memorandum showed the instruction of Dominion that
payment of claims shall come from a revolving fund. Having deviated from the instructions of the
principal, the expenses that Guevarra incurred in the settlement of the claims of the insured may
not be reimbursed from Dominion.
2. YES. However, while the law on agency prohibits Guevarra from obtaining reimbursement, his right
to recovery may still be justified under the general law on Obligations and Contracts, particularly,
Art. 1236 I n this case, when the risk insured against occurred, Dominions liability as insurer arose.
This obligation was extinguished when Guevarra paid such claims. Thus, to the extent that the
obligation of Dominion had been extinguished. respondent Guevarra may demand for reimbursement
from his principal.
Eduardo V. Lintonjua, Jr. and Antonio K. Litonjua vs. Eternit Corporation (EC), Eteroutremer,
S.A. Corporation (ESAC) and Far East Bank & Trust Company (FEBTC)
FACTS: The Eternit Corporation (EC) is a corporation duly organized and registered under Philippine
laws engaged in the manufacture of roofing materials and pipe products. Its manufacturing operations
were conducted on eight parcels of land covered by TCTs under the name of FEBTC, as trustee. 90%
of the shares of stocks of EC were owned by ESAC, a corporation organized and registered under the
laws of Belgium. Jack Glanville, an Australian citizen, was the Gen. Manager and Pres. of EC, while
Claude Delsaux was the Reg. Director for Asia of ESAC. Both had their offices in Belgium.
In 1986, the management of ESAC grew concerned about the political situation in the Philippines and
wanted to stop its operations in the country. The Committee for Asia of ESAC instructed EC Board of
Directors Member Michael Adams, to dispose of the eight parcels of land. Adams engaged the services
of realtor/broker Lauro G. Marquez so that the properties could be offered for sale to prospective
buyers.
Marquez thereafter offered the parcels of land and the improvements thereon to Eduardo B. Litonjua,
Jr. of the Litonjua & Company, Inc. In a Letter, Marquez declared that he was authorized to sell the
properties for P27,000,000.00. The Litonjua siblings offered to buy the property for P20,000,000.00
cash. Delsaux sent a telex to Glanville stating that, based on the "Belgian/Swiss decision," that the final
offer was "US$1,000,000.00 and P2,500,000.00. Litonjua, Jr. accepted the counterproposal of Delsaux.
The Litonjua brothers deposited the amount of US$1,000,000.00 with the Security Bank & Trust
Company, Ermita Branch, and drafted an Escrow Agreement to expedite the sale.
Meanwhile, with the assumption of Corazon C. Aquino as President of the Republic of the Philippines,
the political situation in the Philippines had improved. Glanville informed Marquez that "the decision
has been taken at a Board Meeting not to sell the properties on which Eternit Corporation is situated."
When apprised of this development, the Litonjuas, wrote EC, demanding payment for damages they
had suffered on account of the aborted sale. EC, however, rejected their demand. The Litonjuas then
filed a complaint for specific performance and damages against EC and the FEBTC, and ESAC in the
RTC of Pasig City.
EC and ESAC alleged that the Board and stockholders of EC never approved any resolution to sell
subject properties nor authorized Marquez to sell the same.
Petitioners further emphasize that they acted in good faith when Glanville and Delsaux were knowingly
permitted by respondent EC to sell the properties within the scope of an apparent authority. Petitioners
insist that respondents held themselves to the public as possessing power to sell the subject properties.
The trial court rendered judgment in favor of defendants and dismissed on the ground that there is no
valid and binding sale between the plaintiffs and said defendants.
The CA rendered judgment affirming the decision of the RTC. The Litonjuas filed a motion for
reconsideration, which was also denied by the appellate court. Hence, this appeal.
ISSUE: Whether or not Marquez needed a written authority from respondent Eternit before the sale can
be perfected.
HELD: YES. The general principles of agency govern the relation between the corporation and its
officers or agents, subject to the articles of incorporation, by-laws, or relevant provisions of law. Any
sale of real property of a corporation by a person purporting to be an agent thereof but without written
authority from the corporation is NULL AND VOID. The declarations of the agent alone are generally
insufficient to establish the fact or extent of his/her authority.
Agency may be oral unless the law requires a specific form. However, to create or convey real rights
over immovable property, a special power of attorney is necessary. Thus, when a sale of a piece of land
or any portion thereof is through an agent, the authority of the latter shall be in writing, otherwise, the
sale shall be void. In this case, the petitioners as plaintiffs below, failed to adduce in evidence any
resolution of the Board of Directors of respondent EC empowering Marquez, Glanville or Delsaux as
its agents, to sell, let alone offer for sale, for and in its behalf, the eight parcels of land owned by
respondent EC including the improvements thereon.
since the very purpose of agency is to extend the personality of the principal through the facility of the
agent.
FACTS:
Petitioners Bordador spouses were engaged in the business of purchase and sale of jewelry, while
respondent Brigida Luz was their regular customer. Respondent Narciso Deganos, Luz's brother,
received several pieces of jewelry from the Bordadors amounting to P382,816.00, which items
wereindicated in 17 receipts covering the same--11 of the receipts stated that they were received by
Deganos for a certain Evelyn Aquino, while the remaining 6indicated that they were received by
Deganos for Luz.
Deganos was supposed to sell the items at a profit and remit the proceeds and return the unsold items to
the Bordadors. Deganos remitted only P53,207.00. He neither paid the balance of the sales proceeds,
nor did he return any unsold item to the Bordadors, which led them to file an action for recovery of a
sum of money and damages against Deganos and Luz with the RTC. The Bordadors claimed that
Deganos acted as the agent of Luz when he received the items of jewelry, and because he failed to pay
for the same, Luz, as principal, became solidarily liable with him.
Deganos asserted that it was he alone who was involved in the transaction with the Bordadors; that he
neither acted as agent for nor was he authorized to act as an agent by Luz, notwithstanding the fact that
6 of thereceipts indicated that the items were received by him for Luz. He added that he never delivered
any of the items to Luz. Luz corroborated the claims of Deganos.
The RTC found that only Deganos was liable to the Bordados. It further found that it was petitioner
Lydia Bordador who indicated in the receipts that the items were received by Deganos for Evelyn
Aquino and for Luz. It said that it was "persuaded that Brigida D. Luz was behind Deganos,"but
because there was no memorandum to this effect, the agreement between the parties was unenforceable
under the Statute of Frauds. Absent the required memorandum or any written document connecting Luz
with the subject receipts or authorizing Deganos to act on her behalf, the alleged agreement between
the Bordadors and Luz was unenforceable.
The Bordadors elevated the case to the CA which affirmed said judgment, hence the instant petition.
ISSUE:
Whether Luz is liable to the Bordadors for the latter's claim for money and damages despite the fact
that Luz did not sign any of the subject receipts or authorized Deganos to receive the items of jewelry
on her behalf
HELD:
No, Luz is not liable to the Bordadors.
RATIO:
THE BASIS FOR AGENCY IS REPRESENTATION. The basis for agency is representation. Here,
there is no showing that Luz consented to the acts of Deganos or authorized him to act on her behalf,
much less with respect to the particular transactions involved. The Bordadors' attempt to foist liability
on Luz through the supposed agency relation with Deganos is groundless and ill-advised.
A PERSON DEALING WITH AN AGENT IS PUT UPON INQUIRY AND MUST DISCOVER
UPON HIS PERIL THE AUTHORITY OF THE AGENT.
Besides, it was grossly and inexcusably negligent of the Bordadors to entrust to Deganos, not once or
twice but on at least 6 occasions as evidenced by 6 receipts, several pieces of jewelry of substantial
value without requiring a written authorization from his alleged principal. A person dealing with an
agent is put upon inquiry and must discover upon his peril the authority of the agent.
Regina Dizon et al v. CA and Overland Express Lines, Inc. 302 SCRA 288
FACTS:
Overland Express Lines, Inc. entered into a Contract of Lease with Option to Buy with petitioners
involving a 1,755.80 square meter parcel of land situated at corner MacArthur Highway and SouthH
Street, Diliman, Quezon City. The term of the lease was for 1 year commencing from May 16, 1974 up
to May 15, 1975. During this period, Overland Express Lines was granted an option to purchase for the
amount of P3,000.00 per square meter. Thereafter, the lease shall be on a per month basis with a
monthly rental of P3,000.00.
For failure of Overland Express Lines to pay the increased rental of P8,000.00 per month effective June
1976, petitioners filed an action for ejectment against it. The lower court rendered judgment ordering
Overland Express Lines to vacate the leased premises and to pay the sum of P624,000.00representing
rentals in arrears and/or as damages in the form of reasonable compensation for the use and occupation
of the premises during the period of illegal detainer from June 1976 to November1982 at the monthly
rental of P8,000.00, less payments made, plus 12% interest per annum from November 18, 1976, the
date of filing of the complaint, until fully paid, the sum of P8,000.00 a month starting December 1982,
until Overland Express Lines fully vacates the premises, and to payP20,000.00 as and by way of
attorneys fees.
ISSUE:
WON Overland Express Lines actually paid the alleged P300,000.00 to Fidela Dizon, as representative
(agent) of petitioners in consideration of the option
HELD:
No. CA opined that the payment by Overland Express Lines of P300,000.00 as partial payment for the
leased property, which petitioners accepted (through Alice A. Dizon) and for which an official receipt
was issued, was the operative act that gave rise to a perfected contract of sale, and that for failure of
petitioners to deny receipt thereof, Overland Express Lines can therefore assume that Alice A. Dizon,
acting as agent of petitioners, was authorized by them to receive the money in their behalf.CA went
further by stating that in fact, what was entered into was a conditional contract of sale wherein
ownership over the leased property shall not pass to the Overland Express Lines until it has fully paid
the purchase price. Since Overland Express Lines did not consign to the court the balance of the
purchase price and continued to occupy the subject premises, it had the obligation to pay the amount of
P1,700.00 in monthly rentals until full payment of the purchase price.
In an attempt to resurrect the lapsed option, Overland Express Lines gave P300,000.00 to
petitioners(thru Alice A. Dizon) on the erroneous presumption that the said amount tendered would
constitute a perfected contract of sale pursuant to the contract of lease with option to buy.
There was no valid consent by the petitioners (as co-owners of the leased premises) on the supposed
sale entered into by Alice A. Dizon, as petitioners alleged agent, and Overland Express Lines. The
basis for agency is representation and a person dealing with an agent is put upon inquiry and must
discover upon his peril the authority of the agent. As provided in Article 1868 of the New Civil Code,
there was no showing that petitioners neither consented to the act of Alice A. Dizon nor authorized her
to act on their behalf with regard to her transaction with private respondent. The most prudent thing
private respondent should have done was to ascertain the extent of the authority of Alice A. Dizon.
Being negligent in this regard, private respondent cannot seek relief on the basis of a supposed agency.
Every person dealing with an agent is put upon inquiry and must discover upon his peril the authority
of the agent. If he does not make such inquiry, he is chargeable with knowledge of the agents authority,
and his ignorance of that authority will not be any excuse. Persons dealing with an assumed agency,
whether the assumed agency be a general or special one, are bound at their peril, if they would hold the
principal, to ascertain not only the fact of the agency but also the nature and extent of the authority, and
in case either is controverted, the burden of proof is upon them to establish it.
Trusts are either express or implied. Express trusts are created by the intention of the trustor or of the
parties. Implied trusts come into being by operation of law, either through implication of an intention
to create a trust as a matter of law or through the imposition of the trust irrespective of and even
contrary to, any such intention. Implied trusts are either resulting or constructive trusts. Constructive
trusts are created by the construction of equity in order to satisfy the demands of justice and prevent
unjust enrichment. Resulting trusts are based on the equitable doctrine that valuable consideration and
not legal title determines the equitable title or interest and are presumed always to have been
contemplated by the parties. They arise from the nature of circumstances of the consideration involved
in a transaction whereby one person becomes invested with legal title but is obligated in equity to hold
his legal title for the benefit of another.
A resulting trust in exemplified by Article 1448 of the Civil Code: "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 having the
beneficial interest of the property. The former is the trustee, while the latter is the beneficiary. However,
if the person to whom title is conveyed is a child, legitimate or illegitimate, of the one paying the price
of the sale, no trust is implied by law, it being disputable presumed that there is gift in favor of a child.
The last sentence of Article 1448 gives one of the recognized exceptions to the establishment of an
implied resulting trust. (The other two would be: when actual contrary intention is proved and when
purchase is made in violation of an existing statute and in evasion of its express provision.)
As a rule the burden of proving the existence of trust is on the party asserting its existence, and such
proof must be clear and satisfactorily show the existence of trust. While implied trusts may be proved
by oral evidence, evidence must be trustworthy and received by the courts wth extreme caution. On this
basis alone, Rodolfo and Priscilla Morales' claim must fail. Rodolfo and Priscilla relied merely on
testimonial evidences which are self-serving. Proof of Ranulfo and Erlinda Ortiz's lawful acquisition of
the property through Celso Avelinos ownership on the other hand was supported by documentary
evidences such as the deed of absolute sale and tax declarations. Even testimonies of Celso's other
sisters prove that they believe that he is the true owner of the property. The fact that the other siblings
did not intervene in this case to protect their right and that upon the death of their parents no extrajudicial partition occurred further strengthens Celso's ownership. Moreover, assuming that their claim
that Celso was a mere trustee is true, it still falls under the exemption under the last sentence of Article
1448 which states that if the person to whom the title conveyed is a child, there is a presumption that it
is a gift in favor of the child.
2. NO. Article 448 (This is on builders in good faith, look it up nalang if you want) only applies when a
builder thinks he owns the land or believes himself to have a claim of title. From the evidences
adduced, Rodolfo Morales knew from the beginning that he was not the owner of the land. Rodolfo is
not entitled to reimbursement.
From March 6, 1981, when the amended loan and mortgage agreement was registered, to February 13,
1986, when the Torbela siblings instituted before the RTC the case against the spouses Rosario, only
about five years had passed. The Torbela siblings were able to institute the case well before the lapse of
the 10-year prescriptive period for the enforcement of their express trust with Dr. Rosario.
The case at bench is likewise not barred by laches. Laches means the failure or neglect, for an
unreasonable and unexplained length of time, to do that which by exercising due diligence could or
should have been done earlier. The Torbela siblings instituted their case five years after Dr. Rosarios
repudiation of the express trust, still within the 10-year prescriptive period for enforcement of such
trusts. This does not constitute an unreasonable delay in asserting one's right. A delay within the
prescriptive period is sanctioned by law and is not considered to be a delay that would bar relief.
Laches apply only in the absence of a statutory prescriptive period.
PNB vs Aznar
649 SCRA 214 (2011)
FACTS:
In 1958, RISCO ceased operation due to business reverses. In plaintiffs desire to rehabilitate
RISCO, they contributed a total amount of P212,720.00 which was used in the purchase of the
three (3) parcels of land. After the purchase of the above lots, titles were issued in the name of
RISCO. The amount contributed by plaintiffs constituted as liens and encumbrances on the
aforementioned properties as annotated in the titles of said lots.
The stockholders contributed specific amount to constitute as their lien or interest on the property
described above, if and when said property are titled in the name of RURAL INSURANCE &
SURETY CO., INC., subject to registration as their adverse claim until such time their respective
contributions are refunded to them completely. Thereafter, various subsequent annotations were
made on the same titles in favor of herein defendant PNB
Aznar, et al., filed a Manifestation and Motion for Judgment on the Pleadings. Thus, the trial court
rendered a decision which ruled against PNB on the basis that there was an express trust created
over the subject properties whereby RISCO was the trustee and the stockholders, Aznar, et al., were
the beneficiaries or the cestui que trust.
ISSUE:
Whether or not the language of the subject Minutes created an express trust.
HELD:
No. No such reasonable certitude in the creation of an express trust obtains in the case at bar. In
fact, a careful scrutiny of the plain and ordinary meaning of the terms used in the Minutes does not
offer any indication that the parties thereto intended that Aznar, et al., become beneficiaries under
an express trust and that RISCO serve as trustor.
Indeed, we find that Aznar, et al., have no right to ask for the quieting of title of the properties at
issue because they have no legal and/or equitable rights over the properties that are derived from
the previous registered owner which is RISCO, the pertinent provision of the law is Section 2 of the
Corporation Code (Batas Pambansa Blg. 68), which states that "[a] corporation is an artificial being
created by operation of law, having the right of succession and the powers, attributes and properties
expressly authorized by law or incident to its existence.
The creation of an express trust must be manifested with reasonable certainty and cannot be
inferred from loose and vague declarations or from ambiguous circumstances susceptible of other
interpretations.
Trust is the right to the beneficial enjoyment of property, the legal title to which is vested in
another. It is a fiduciary relationship that obliges the trustee to deal with the property for the benefit
of the beneficiary. Trust relations between parties may either be express or implied. An express trust
is created by the intention of the trustor or of the parties. An implied trust comes into being by
operation of law.
Express trusts, sometimes referred to as direct trusts, are intentionally created by the direct and
positive acts of the settlor or the trustor - by some writing, deed, or will or oral declaration. It is
created not necessarily by some written words, but by the direct and positive acts of the parties.
This is in consonance with Article 1444 of the Civil Code, which states that "[n]o particular words
are required for the creation of an express trust, it being sufficient that a trust is clearly intended."
Note: You may choose to copy the words in red for an in-depth background of express trust.
Pacheco vs Arro
85 Phil. 505 (1950)
FACTS:
A petition for a writ of certiorari was filed by Dolores Pacheco, as guardian of the minors
Concepcion, Alicia and Herminia surnamed Yulo, daughters of the late Jose Yulo y Regalado, for
the review of a judgment rendered by the Court of Appeals which affirmed the one rendered on 21
March 1939 by the Court of First Instance of Occidental Negros, ordering Jose Yulo y Regalado to
execute deeds of assignment in favor of the plaintiffs for each and every lot claimed by them.
The respondents, claiming lots as their property and began to present evidence before a referee
appointed by the court in support of their respective claims. Upon the assurance and promise made
in open court by Dr. Mariano Yulo, who represented the late predecessor-in-interest of the
petitioners in the cadastral case, the latter would convey and assign the lots to the claimants, the
herein respondents withdrew their claims, and the cadastral court confirmed the title to the lots and
decreed their registration in the name of the defendant Jose Yulo y Regalado. The plaintiffs and
appellees in the courts below and now respondents asserted title to each lot claimed by them and
began to present evidence to prove title thereto in the cadastral case, but because of the promise
referred to made in open court by the representative of the defendant-appellant, the predecessor-ininterest of the petitioners, the respondents withdrew their claims relying upon such promise.
ISSUE:
Whether or not there exists a trust or fiduciary relationship?
HELD:
When the claim to the lots in the cadastral case was withdrawn by the respondents relying upon the
assurance and promise made in open court by... the predecessor-in-interest of the petitioners, a trust
or fiduciary relation between them arose, or resulted therefrom, or was created thereby. The trustee
cannot invoke the statute of limitations to bar the action and defeat the right of the cestui que
trustent.
The reason why Pacheco is covered under the Art. 1456, rather than under Art. 1453 (When
property is conveyed to a person in reliance to his declared intention to hold it for, or transfer is to
another or the grantor) is because the action for reconveyance was being filed against the
successors-in-interest of the person who gave such a declaration, and consequently, the property
held in trust passed to the heirs by way of mistake, and rightfully covered under Art. 1456.
The registration of the disputed properties in the name of Jose was actually pursuant to a court order.
The apparent mistake in the adjudication of the disputed properties to Jose created a mere implied trust
of the constructive variety in favor of the beneficiaries of the Fideicomiso.
PARINGIT VS BAJIT
Facts: During their lifetime, spouses Julian and Aurelia Paringit leased a lot on from Terocel Realty,
Inc. They built their home raised their 5 children. Then Aurelia died on November 6, 1972. For having
occupied the lot for years, Terocel Realty offered to sell it to Julian but he did not have enough money
at that time to meet the payment deadline. Julian sought the help of his children so he can buy the
property but only his son Felipe and wife Josefa had the financial resources he needed at that time. To
bring about the purchase, Julian executed a deed of assignment of leasehold right in favor of Felipe and
his wife that would enable them to acquire the lot. The latter bought the same from Terocel Realty for
P55,500.00 to be paid in installments. Felipe and his wife paid the last installment and the realty
company executed a Deed of Absolute Sale in their favor and turned over the title to them. Due to
issues among Julians children regarding the ownership of the lot, Julian executed an affidavit
clarifying the nature of Felipe and his wifes purchase of the lot. He claimed that it was bought for the
benefit of all his children and the same must be divided equally among my five children at 15 sq. m.
each; but each of them should reimburse their brother Felipe and his wife, Josefa the proportional
amount advanced by them as I also will reimburse him the sum of P30,000.00 or one half of the
amount that the couple advanced. Felipe and his wife registered their purchase of the lot, resulting in
the issuance of Transfer Certificate of Title 172313 in their names. Despite the title, however, the
spouses moved to another house on the same street in 1988. Marciana, et al, on the other hand,
continued to occupy the lot with their families without paying rent. This was the situation when their
father Julian died. Felipe and his wife sent a demand letter to Marciana, et al asking them to pay rental
arrearages for occupying the property from and Marciana, et al refused to pay or reply to the letter,
believing that they had the right to occupy the house and lot, it being their inheritance from their
parents. Then Felipe and his wife filed an ejectment suit against them. The suit prospered, resulting in
the ejectment of Marciana, et al and their families from the property. Shortly after, Felipe and his wife
moved into the same.
ISSUE:
1. Whether or not Felipe and his wife purchased the subject lot under an implied trust for the benefit of
all the children of Julian;
2. W/n that Marciana, et als right of action was barred by prescription or laches.
Held:
1. The CA found that Felipe and his wifes purchase of the lot falls under the rubric of the implied trust
provided in Article 1450 of the Civil Code. Implied trust under Article 1450 presupposes a situation
where a person, using his own funds, buys property on behalf of another, who in the meantime may not
have the funds to purchase it. Title to the property is for the time being placed in the name of the
trustee, the person who pays for it, until he is reimbursed by the beneficiary, the person for whom the
trustee bought the land. It is only after the beneficiary reimburses the trustee of the purchase price that
the former can compel conveyance of the property from the latter. But the circumstances of this case
are actually what implied trust is about. Although no express agreement covered Felipe and his wifes
purchase of the lot for the siblings and their father, it came about by operation of law and is protected
by it. The nature of the transaction established the implied trust and this in turn gave rise to the rights
and obligations provided by law. Implied trust is a rule of equity, independent of the particular intention
of the parties. In an implied trust, the beneficiarys cause of action arises when the trustee repudiates
the trust, not when the trust was created as Felipe and his wife would have it.
2. Felipe and his wife also claim that Marciana, et als action was barred by laches. But there is no basis
for such claim. Laches has been defined as the failure or neglect, for an unreasonable and unexplained
length of time, to do that which, by exercising due diligence could or should have been done earlier.
Marciana, et al had no reason to file an earlier suit against Felipe and his wife since the latter had not
bothered them despite their purchase of the lot in their names. Only about 12 years later when they
wrote their demand letter did the spouses take an adverse attitude against Marciana, et al. The latter
filed their action to annul Felipe and his wifes title and have the same transferred to their name.
Facts:
June 15, 2011 Maria Sta. Maria and Dominga Manangan were the registered owners - three-fourths () and
one-fourth () pro-indiviso, respectively - of a parcel of land. Sta. Maria sold her three-fourths () share to
Benigna Llamas. The sale was duly annotated at the back of OCT No. 24695. When Benigna died in 1944, she
willed her three-fourths () share equally to her sisters Alejandra Llamas and Josefa Llamas. Thus, Alejandra
and Josefa each owned one-half () of Benignas three-fourths () share. Alejandras heirs sold their
predecessors one-half () share (roughly equivalent to 10,564 square meters) to the respondent, as evidenced
by a Deed of Absolute Sale. Also, Josefa sold her own one-half () share (subject property) to the respondent
and the petitioner, as evidenced by another Deed of Absolute Sale. The respondent and the petitioner executed
an Agreement, allotting their portions of the subject property. The petitioner and the respondent executed an
Affidavit of Adverse Claim over the subject property. The parties took possession of their respective portions of
the subject property and declared it in their name for taxation purposes. The respondent asked the Register of
Deeds of Lingayen, Pangasinan on the requirements for the transfer of title over the portion allotted to him on
the subject property. To his surprise, the respondent learned that the petitioner had already obtained in his name
two transfer certificates of title. The respondent filed a complaint for Annulment of Title, Reconveyance and
Damages against the petitioner, seeking the reconveyance of the 1,004-square meter portion (disputed property)
covered by TCT No. 195813, on the ground that the petitioner is entitled only to the 3,020 square meters
identified in the parties Agreement. The respondent sought the nullification of the petitioners titles by
contesting the authenticity of the petitioners documents. Particularly, the respondent assailed the Benigna Deed
by presenting Benignas death certificate. The respondent argued that Benigna could not have executed a deed,
which purports to convey 4,024 square meters to the petitioner, in 1969 because Benigna already died in 1944.
The respondent added that neither could Sta. Maria have sold to the parties her three-fourths () share in 1969
because she had already sold her share to Benigna in 1932.22 The petitioner asked for the dismissal of the
complaint and for a declaration that he is the lawful owner of the parcels of land covered by his titles. The RTC
dismissed the complaint. On appeal, the CA reversed the RTC by ruling against the authenticity of the Benigna
Deed and the Affidavit. As the totality of the evidence presented sufficiently sustains [the respondents] claim
that the titles issued to [the petitioner] were based on forged and spurious documents, it behooves this Court to
annul these certificates of title. Hence, this petition for revie.
Issues:
Whether the CA erred in ordering the reconveyance of the parcel of land covered by the petitioners titles.
Held:
We partially grant the petition. An action for reconveyance is a legal and equitable remedy granted to the
rightful landowner, whose land was wrongfully or erroneously registered in the name of another, to compel the
registered owner to transfer or reconvey the land to him. The plaintiff in this action must allege and prove his
ownership of the land in dispute and the defendants erroneous, fraudulent or wrongful registration of the
property. The petitioners argument confuses registration of title with ownership. While the petitioners
ownership over the land covered by TCT No. 195812 is undisputed, his ownership only gave him the right to
apply for the proper transfer of title to the property in his name. Obviously, the petitioner, even as a rightful
owner, must comply with the statutory provisions on the transfer of registered title to lands. Section 53 of
Presidential Decree No. 1529 provides that the subsequent registration of title procured by the presentation of a
forged deed or other instrument is null and void. Thus, the subsequent issuance of TCT No. 195812 gave the
petitioner no better right than the tainted registration which was the basis for the issuance of the same title. The
Court simply cannot allow the petitioners attempt to get around the proper procedure for registering the transfer
of title in his name by using spurious documents. Reconveyance is the remedy of the rightful owner only While
the CA correctly nullified the petitioners certificates of title, the CA erred in ordering the reconveyance of the
entire subject property in the respondents favor. The respondent himself admitted that the 3,020- square meter
portion covered by TCT No. 195812 is the petitioners just share in the subject property.54 Thus, although the
petitioner obtained TCT No. 195812 using the same spurious documents, the land covered by this title should
not be reconveyed in favor of the respondent since he is not the rightful owner of the property covered by this
title.
Pasio vs Monterroyo
FACTS:
This case originated from an action for recovery of possession and damages, with prayer for the
issuance of a temporary restraining order or writ of preliminary mandatory injunction, filed by Rogelio,
George, Lolita, Rosalinda and Josephine, all surnamed Pasio, represented by their father and attorneyin-fact Jose Pasio (petitioners) against Dr. Teofilo Eduardo F. Monterroyo (Dr. Monterroyo), later
substituted by his heirs Romualdo, Maria Teresa and Stephen, all surnamed Monterroyo (respondents).
Cad. Lot No. 2139 of Cad. 292, Iligan Cadastre (Lot No. 2139), with an area of 19,979 square meters,
located at Panul-iran, Abuno, Iligan City, was part of a 24-hectare land occupied, cultivated and cleared
by Laureano Pasio (Laureano) in 1933. The 24-hectare land formed part of the public domain which
was later declared alienable and disposable. On 18 February 1935, Laureano filed a homestead
application over the entire 24-hectare land under Homestead Application No. 205845.[5] On 22 April
1940, the Bureau of Forestry wrote Laureano and informed him that the tract of land covered by his
application was not needed for forest purposes.[6] On 11 September 1941, the Director of Lands issued
an Order[7] approving Laureanos homestead application and stating that Homestead Entry No. 154651
was recorded in his name for the land applied for by him.
Laureano died on 24 March 1950. On 15 April 1952, the Director of Lands issued an Order[8] for the
issuance of a homestead patent in favor of Laureano, married to Graciana Herbito[9] (Graciana).
Laureanos heirs did not receive the order and consequently, the land was not registered under
Laureanos name or under that of his heirs. In 1953, the property was covered by Tax Declaration No.
11102[10] in the name of Laureano with Graciana[11] as administrator.
Between 1949 and 1954, a Cadastral Survey was conducted in Iligan City. The surveyor found that a
small creek divided the 24-hectare parcel of land into two portions, identified as Lot No. 2138 and Lot
No. 2139.
Petitioners claimed that Laureanos heirs, headed by his son Jose, continuously possessed and
cultivated both lots. On 16 October 1962, Joses co-heirs executed a Deed of Quitclaim renouncing
their rights and interest over the land in favor of Jose. Jose secured a title in his name for Lot No. 2138.
Later, Jose alienated Lot No. 2139 in favor of his children (petitioners in this case) who, on 8 January
1994, simultaneously filed applications for grant of Free Patent Titles over their respective shares of
Lot No. 2139 before the Land Management Bureau of the Department of Environment and Natural
Resources (DENR). On 22 August 1994, the DENR granted petitioners applications and issued
Original Certificate of Title (OCT) No. P-1322 (a.f.) in favor of Rogelio Pasio, OCT No. P-1318 (a.f.)
in favor of George Pasio, OCT No. P-1317 (a.f.) in favor of Lolita Pasio, OCT No. P-1321 (a.f.) in
favor of Josephine Pasio, and OCT No. P-1319 (a.f.) in favor of Rosalinda Pasio. Petitioners alleged
that their possession of Lot No. 2139 was interrupted on 3 January 1993 when respondents forcibly
took possession of the property.
Respondents alleged that they had been in open, continuous, exclusive and notorious possession of Lot
No. 2139, by themselves and through their predecessors-in-interest, since 10 July 1949. They alleged
that on 10 July 1949, Rufo Larumbe (Larumbe) sold Lot No. 2139 to Petra Teves (Petra). On 27
February 1984, Petra executed a deed of sale over Lot No. 2139 in favor of Vicente Teves (Vicente).
On 20 February 1985, Vicente executed a pacto de retro sale over the land in favor of Arturo Teves
(Arturo). In 1992, Arturo sold Lot No. 2139 in favor of respondents father, Dr. Monterroyo, by virtue
of an oral contract. On 5 January 1995, Arturo executed a Deed of Confirmation of Absolute Sale of
Unregistered Land in favor of Dr. Monterroyos heirs.
Respondents alleged that Jose was not the owner of Lot No. 2139 and as such, he could not sell the
land to his children. They alleged that petitioners OCTs were null and void for having been procured in
violation of the Public Land Act. They further alleged that the Land Management Bureau had no
authority to issue the free patent titles because Lot No. 2139 was a private land.
Issue:
whether the Court of Appeals erred in sustaining the trial courts Decision declaring respondents as the
rightful owners and possessors of Lot No. 2139
Ruling:
The trial court found that the preponderance of evidence favors respondents as the possessors of Lot
No. 2139 for over 30 years, by themselves and through their predecessors-in-interest. The question of
who between petitioners and respondents had prior possession of the property is a factual question
whose resolution is the function of the lower courts.[17] When the factual findings of both the trial
court and the Court of Appeals are supported by substantial evidence, they are conclusive and binding
on the parties and are not reviewable by this Court.[18] While the rule is subject to exceptions, no
exception exists in this case.
Respondents were able to present the original Deed of Absolute Sale, dated 10 July 1949, executed by
Larumbe in favor of Petra.[19]Respondents also presented the succeeding Deeds of Sale showing the
transfer of Lot No. 2139 from Petra to Vicente[20] and from Vicente to Arturo[21] and the Deed of
Confirmation of Absolute Sale of Unregistered Real Property executed by Arturo in favor of
respondents.[22] Respondents also presented a certification[23] executed by P/Sr. Superintendent
Julmunier Akbar Jubail, City Director of Iligan City Police Command and verified from the Log Book
records by Senior Police Officer Betty Dalongenes Mab-Abo confirming that Andres Quinaquin made
a report that Jose, Rogelio and Luciana Pasio, Lucino Pelarion and Nando Avilo forcibly took his
copra. This belied petitioners allegation that they were in possession of Lot No. 2139 and respondents
forcibly took possession of the property only in January 1993.
Considering that petitioners application for free patent titles was filed only on 8 January 1994, when
Lot No. 2139 had already become private land ipso jure, the Land Management Bureau had no
jurisdiction to entertain petitioners application.
1995. Hence, it is from that date that prescription began to toll. The filing of the complaint in February
1996 is well within the prescriptive period.
3. Intention although only presumed, implied or supposed by law from the nature of the transaction
or from the facts and circumstances accompanying the transaction, particularly the source of the
consideration is always an element of a resulting trust and may be inferred from the acts or
conduct of the parties rather than from direct expression of conduct. Certainly, intent as an
indispensable element, is a matter that necessarily lies in the evidence, that is, by evidence, even
circumstantial, of statements made by the parties at or before the time title passes. Because an
implied trust is neither dependent upon an express agreement nor required to be evidenced by
writing, Article 1457 of our Civil Code authorizes the admission of parole evidence to prove their
existence. Parole evidence that is required to establish the existence of an implied trust necessarily
has to be trustworthy and it cannot rest on loose, equivocal or indefinite declarations. Thus, contrary
to the Court of Appeals finding that there was no evidence on record showing that an implied trust
relation arose between Margarita and Roberto, we find that petitioner before the trial court, had
actually adduced evidence to prove the intention of Margarita to transfer to Roberto only the legal
title to the properties in question, with attendant expectation that Roberto would return the same to
her on accomplishment of that specific purpose for which the transaction was entered into. The
evidence of course is not documentary, but rather testimonial.