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Prof. Joselito Guianan Chan's The Labor Code of the Philippines, Annotated Labor Standards & Social Legislation Volume I of a 3-Volume Series 2019 Edition (3rd Revised Edition)
 

 
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UNITED STATES SUPREME COURT JURISPRUDENCE
 

 
PHILIPPINE SUPREME COURT JURISPRUDENCE
 

   
March-1997 Jurisprudence                 

  • G.R. No. 51765 March 3, 1997 - REPUBLIC PLANTERS BANK v. ENRIQUE A. AGANA, SR., ET AL.

  • G.R. No. 93397 March 3, 1997 - TRADERS ROYAL BANK v. COURT OF APPEALS, ET AL.

  • G.R. No. 99425 March 3, 1997 - ANTONIO RAMOS, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. Nos. 100487 & 100607 March 3, 1997 - ARTURO JULIANO v. SANDIGANBAYAN, ET AL.

  • G.R. No. 106581 March 3, 1997 - PEOPLE OF THE PHIL. v. RENATO FLORES, ET AL.

  • G.R. No. 110419 March 3, 1997 - UERM-MEMORIAL MEDICAL CENTER, ET AL. v. NLRC, ET AL.

  • G.R. No. 114383 March 3, 1997 - PEOPLE OF THE PHIL. v. JOEL COREA

  • G.R. No. 116437 March 3, 1997 - PEOPLE OF THE PHIL. v. PABLITO ANDAN

  • G.R. No. 117161 March 3, 1997 - RAMON INGLES v. COURT OF APPEALS, ET AL.

  • G.R. No. 120704 March 3, 1997 - BARTOLOME C. CARALE, ET AL. v. PAMPIO A. ABARINTOS, ET AL.

  • G.R. No. 123321 March 3, 1997 - ROMAN CATHOLIC ARCHBISHOP OF MANILA v. COURT OF APPEALS, ET AL.

  • G.R. No. 123361 March 3, 1997 - TEOFILO CACHO v. COURT OF APPEALS, ET AL.

  • G.R. No. 125198 March 3, 1997 - MSCI-NACUSIP v. NWPC, ET AL.

  • G.R. No. 84449 March 4, 1997 - PEOPLE OF THE PHIL. v. BENEDICTO JAVIER, ET AL.

  • G.R. No. 102876 March 4, 1997 - BATAAN SHIPYARD AND ENG’G CORP. v. NLRC, ET AL.

  • G.R. No. 118607 March 4, 1997 - PEOPLE OF THE PHIL. v. JULITO FRANCO

  • Adm. Matter No. RTJ-96-1335 March 5, 1997 - INOCENCIO BASCO v. LEO H. RAPATALO

  • G.R. No. 126576 March 5, 1997 - RICARDO M. ANGOBUNG v. COMELEC, ET AL.

  • G.R. No. 83598 March 7, 1997 - LEONCIA BALOGBOG, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. Nos. 94994-95 March 7, 1997 - PEOPLE OF THE PHIL. v. LILIBETH CACO

  • G.R. No. 106212 March 7, 1997 - PROGRESS HOMES, ET AL. v. NLRC, ET AL.

  • G.R. No. 108395 March 7, 1997 - HEIRS OF TEODORO GUARING, JR. v. COURT OF APPEALS, ET AL.

  • G.R. Nos. 108604-10 March 7, 1997 - PEOPLE OF THE PHIL. v. FEDERICO A. BURCE

  • G.R. No. 113420 March 7, 1997 - REPUBLIC OF THE PHIL. v. SANDIGANBAYAN, ET AL.

  • G.R. No. 113905 March 7, 1997 - LEOPOLDO ALICBUSAN v. COURT OF APPEALS, ET AL.

  • G.R. No. 116211 March 7, 1997 - MEYNARDO POLICARPIO v. COURT OF APPEALS, ET AL.

  • G.R. No. 116512 March 7, 1997 - PEOPLE OF THE PHIL. v. WILLIAM O. CASIDO, ET AL.

  • Adm. Matter No. RTJ-96-1353 March 11, 1997 - DANILO B. PARADA v. LORENZO B. VENERACION

  • G.R. No. 127066 March 11, 1997 - REYNALDO O. MALONZO v. COMELEC, ET AL.

  • G.R. No. 117169 March 12, 1997 - PHILTREAD WORKERS UNION, ET AL. v. NIEVES R. CONFESOR, ET AL.

  • G.R. No. 121917 March 12, 1997 - ROBIN CARIÑO PADILLA v. COURT OF APPEALS, ET AL.

  • G.R. Nos. 99301 & 99343 March 13, 1997 - VICTOR KIERULF, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 100333 March 13, 1997 - HILARIO MAGCALAS, ET AL. v. NLRC, ET AL.

  • G.R. No. 103611 March 13, 1997 - PEOPLE OF THE PHIL. v. CESAR HERBIETO, ET AL.

  • G.R. No. 107131 March 13, 1997 - NFD INT’L. MANNING AGENTS, INC. v. NLRC, ET AL.

  • G.R. No. 108454 March 13, 1997 - PEOPLE OF THE PHIL. v. TEDDY QUINAO, ET AL.

  • G.R. No. 109779 March 13, 1997 - PEOPLE OF THE PHIL. v. NESTOR MAÑOZCA

  • G.R. No. 110067 March 13, 1997 - LINDA T. ALMENDRAS v. COURT OF APPEALS, ET AL.

  • G.R. No. 111478 March 13, 1997 - GEORGE F. SALONGA, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 111567 March 13, 1997 - PEOPLE OF THE PHIL. v. TEODORICO AVILLANO, ET AL.

  • G.R. No. 116123 March 13, 1997 - SERGIO NAGUIAT, ET AL. v. NLRC, ET AL.

  • G.R. No. 116228 March 13, 1997 - PEOPLE OF THE PHIL. v. EPIFANIO GAYON, ET AL.

  • G.R. No. 116352 March 13, 1997 - J. & D.O. AGUILAR CORP. v. NLRC, ET AL.

  • G.R. Nos. 116596-98 March 13, 1997 - PEOPLE OF THE PHIL. v. LORENZO TOPAGUEN

  • G.R. No. 117266 March 13, 1997 - CONTEMPT PROCEEDINGS AGAINST VENTURA O. DUCAT, ET AL.

  • G.R. Nos. 117955-58 March 13, 1997 - HERMINIGILDO TOMARONG, ET AL. v. ANTONIO C. LUBGUBAN, ET AL.

  • G.R. No. 119058 March 13, 1997 - PEOPLE OF THE PHIL. v. ERLINDA VILLARAN

  • G.R. No. 120853 March 13, 1997 - RUDY ALMEDA v. COURT OF APPEALS, ET AL.

  • G.R. No. 122427 March 13, 1997 - BENJAMIN LAZA, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 123881 March 13, 1997 - VIVA PRODUCTIONS, INC. v. COURT OF APPEALS, ET AL.

  • G.R. No. 91694 March 14, 1997 - PEOPLE OF THE PHIL. v. SABAS CALVO, JR., ET AL.

  • G.R. No. 97626 March 14, 1997 - PHIL. BANK OF COMMERCE, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 114387 March 14, 1997 - PEOPLE OF THE PHIL. v. ALEJANDRO DEVILLERES

  • G.R. No. 120592 March 14, 1997 - TRADERS ROYAL BANK EMPLOYEES UNION v. NLRC, ET AL.

  • G.R. No. 121765 March 14, 1997 - PEOPLE OF THE PHIL. v. RANDOLF B. MONTEALTO

  • G.R. No. 122646 March 14, 1997 - ADELIA C. MENDOZA v. ANGELITO C. TEH, ET AL.

  • G.R. No. 112229 March 18, 1997 - RAYMOND PE LIM v. COURT OF APPEALS, ET AL.

  • G.R. Nos. 114924-27 March 18, 1997 - DANTE NACURAY, ET AL. v. NLRC, ET AL.

  • G.R. No. 119321 March 18, 1997 - CATALINO F. BAÑEZ, ET AL. v. COURT OF APPEALS, ET AL.

  • Bar Matter No. 712 March 19, 1997 - PETITION OF AL ARGOSINO TO TAKE THE LAWYER’S OATH

  • G.R. Nos. 100382-100385 March 19, 1997 - PEOPLE OF THE PHIL. v. MARIO TABACO

  • G.R. No. 111157 March 19, 1997 - ITOGON-SUYOC MINES, INC. v. OFFICE OF THE PRESIDENT, ET AL.

  • G.R. No. 117029 March 19, 1997 - PELTAN DEVELOPMENT, INC., ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 121112 March 19, 1997 - FELICIDAD MIRANO, ET AL. v. NLRC, ET AL.

  • G.R. No. 127325 March 19, 1997 - MIRIAM DEFENSOR SANTIAGO, ET AL. v. COMELEC, ET AL.

  • Adm. Matter No. P-95-1159 March 20, 1997 - COURT ADMINISTRATOR v. WILLIAM C. SEVILLO

  • G.R. No. 88684 March 20, 1997 - PEOPLE OF THE PHIL. v. CESAR LACBANES

  • G.R. No. 95551 March 20, 1997 - REPUBLIC OF THE PHIL. v. CONCEPCION S. ALARCON VERGARA, ET AL.

  • G.R. No. 107019 March 20, 1997 - FRANKLIN M. DRILON, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 116404 March 20, 1997 - FRANCISCO LUNA, ET AL. v. NLRC, ET AL.

  • G.R. No. 117218 March 20, 1997 - PEOPLE OF THE PHIL. v. GERRY NALANGAN

  • G.R. No. 119599 March 20, 1997 - MALAYAN INSURANCE CORP. v. COURT OF APPEALS, ET AL.

  • G.R. No. 127456 March 20, 1997 - JESUS A. JARIOL, ET AL. v. COMELEC, ET AL.

  • Adm. Matter No. MTJ-96-1091 March 21, 1997 - WILFREDO NAVARRO v. DEOGRACIAS K. DEL ROSARIO

  • G.R. No. 107699 March 21, 1997 - ALEX JACOBO v. COURT OF APPEALS, ET AL.

  • G.R. No. 116692 March 21, 1997 - SAMAR II ELECTRIC COOPERATIVE v. NLRC, ET AL.

  • G.R. No. 117097 March 21, 1997 - SAMAHAN NG OPTOMETRISTS SA PILIPINAS, ET AL. v. ACEBEDO INTL. CORP., ET AL.

  • G.R. No. 118436 March 21, 1997 - HEIRS OF MANUEL A. ROXAS, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 118836 March 21, 1997 - FEDERICO DORDAS, ET AL. v. COURT OF APPEALS, ET AL.

  • G.R. No. 122728 March 21, 1997 - CASIANO A. ANGCHANGCO, JR. v. OMBUDSMAN, ET AL.

  • G.R. No. 123037 March 21, 1997 - TEODORO Q. PEÑA v. HRET, ET AL.

  • Adm. Matter No. P-96-1184 March 24, 1997 - NBI, ET AL. v. RODOLFO TULIAO

  • G.R. No. 106588 March 24, 1997 - RAUL H. SESBREÑO v. CENTRAL BOARD OF ASSESSMENT APPEALS, ET AL.

  • Adm. Matter No. RTJ-89-318 March 25, 1997 - LUCIANA Vda. DE ARAGO v. PATERNO T. ALVAREZ

  • G.R. No. 96229 March 25, 1997 - PEOPLE OF THE PHIL. v. GLORIOSA S. NAVARRO

  • G.R. No. 124137 March 25, 1997 - ROY M. LOYOLA v. COMELEC, ET AL.

  • G.R. No. 126298 March 25, 1997 - PATRIA C. GUTIERREZ v. COMELEC, ET AL.

  • G.R. No. 99032 March 26, 1997 - RICARDO A. LLAMADO v. COURT OF APPEALS, ET AL.

  • G.R. No. 101817 March 26, 1997 - PEOPLE OF THE PHIL. v. FELIPE IMMACULATA

  • G.R. No. 107801 March 26, 1997 - PEOPLE OF THE PHIL. v. ROSARIA V. IGNACIO

  • G.R. No. 110613 March 26, 1997 - PEOPLE OF THE PHIL. v. EDGAR VILLANUEVA

  • G.R. No. 113470 March 26, 1997 - PEOPLE OF THE PHIL. v. DANILO CORBES, ET AL.

  • G.R. No. 115951 March 26, 1997 - ZEBRA SECURITY AGENCY, ET AL. v. NLRC, ET AL.

  • G.R. No. 117378 March 26, 1997 - GIL CAPILI, ET AL. v. NLRC, ET AL.

  • G.R. No. 117408 March 26, 1997 - NATIONAL INVESTMENT AND DEV. CORP. v. COURT OF APPEALS, ET AL.

  • G.R. No. 117604 March 26, 1997 - CHINA BANKING CORP. v. COURT OF APPEALS, ET AL.

  • G.R. No. 118332 March 26, 1997 - PEOPLE OF THE PHIL. v. IRENEO PEREZ

  • G.R. No. 119528 March 26, 1997 - PAL, INC. v. CIVIL AERONAUTICS BOARD, ET AL.

  • G.R. No. 121031 March 26, 1997 - ROSAURO I. TORRES v. COMELEC, ET AL.

  • G.R. No. 122013 March 26, 1997 - JOSE C. RAMIREZ v. COMELEC, ET AL.

  • G.R. No. 124333 March 26, 1997 - NATIVIDAD P. ARAGON v. COURT OF APPEALS, ET AL.

  • G.R. No. 119877 March 31, 1997 - BIENVENIDO ONGKINGCO, ET AL. v. NLRC, ET AL.

  •  




     
     

    G.R. No. 116211   March 7, 1997 - MEYNARDO POLICARPIO v. COURT OF APPEALS, ET AL.

     
    PHILIPPINE SUPREME COURT DECISIONS

    THIRD DIVISION

    [G.R. No. 116211. March 7, 1997.]

    MEYNARDO POLICARPIO, Petitioner, v. COURT OF APPEALS and ROSITO PUECHI S. UY, Respondents.

    Julian S. Yap for Petitioner.

    Manuel D. Ballelos for Private Respondent.


    SYLLABUS


    1. CIVIL LAW; TRUSTS; CONSTRUCTIVE TRUST; PRIVATE RESPONDENT WILLFULLY VIOLATED THE IMPLIED TRUST REPOSED IN HIM BY HIS CO-TENANTS; THIS WARRANTS THE SANCTION PROVIDED BY CONSTRUCTIVE TRUST UNDER ARTICLE 1447. — We hold that an implied trust was created by the agreement between petitioner (and the other tenants) an private Respondent. Implied trusts are those which, without being expressed, are deducible from the nature of the transaction by operation of law as matters of equity, independently of the particular intention of the parties. Constructive trusts are created in order to satisfy the demands of justice and prevent unjust enrichment. They arise against one who, by fraud, duress or abuse of confidence, obtains or holds the legal right to property which he ought not, in equity and good conscience, to hold. It is not necessary that the intention of the tenants to purchase their apartment units be categorically stated in the purposes of their Association. A constructive trust as invoked by petitioner can be implied from the nature of the transaction as a matter of equity, regardless of the absence of such intention in the purposes of their Association. During his negotiations with Serapia Realty, Inc., private respondent admitted that he was not only representing himself but also the other tenants as president of the Association. This admission recognized the confidence reposed in him by his co-tenants. The sale of the apartments in favor of private respondent was on August 6, 1986. Yet, it was only on March 27, 1987, that he informed the tenants of such sale. If he was in good faith, why the delay? Obviously, he hid the perfection of the sale from them. Why did he not inform the tenants that he was the owner as soon as the sale was consummated if, according to him, his co-tenants were unwilling to share the expenses of redemption? His co-tenants could not have blamed him for acquiring the entire property, after all, they supposedly did not have the money to contribute. Truly, the actuations of private respondent show nothing but greed on his part; he purchased the units for himself at bargain prices so he could resell them at a profit at the expense of the tenants. This violation of the trust reposed in him warrants the sanction provided by the equitable rule on which constructive trust is founder. Unfortunately, however, not all the plaintiffs in the original redemption case will be able to avail of this award because a party who has not appealed from the decision may not obtain any affirmative relief from the appellate court other than what he had obtained from the lower court, if any, whose decision is brought up on appeal. The conclusion we thus reach in this case finding constructive trust under Article 1447 of the New Civil Code, rests on the general principles on trust which, by Article 1442, have been adopted or incorporated into our civil law, to the extent that such principles are not inconsistent with the Civil Code, other statutes and the Rules of Court.


    D E C I S I O N


    PANGANIBAN, J.:


    The Court finds occasion to apply the general principles of constructive trust as authorized by the Civil Code in granting this petition and in compelling private respondent to implement his trust relationship with petitioner.

    This is a petition under Rule 45 of the Rules of Court to reverse the Decision 1 of public respondent 2 in CA-G.R. CV No. 32821 promulgated on March 21, 1994, and the Resolution 3 promulgated on July 5, 1994, denying petitioner’s motion for reconsideration.

    The dispositive portion of the assailed Decision reads: 4

    "WHEREFORE, in view of the foregoing, judgment is hereby rendered:chanrob1es virtual 1aw library

    1. REVERSING and SETTING ASIDE the appealed decision dated 10 September 1990;

    2. DISMISSING the Complaint; and

    3. Without pronouncement as to costs."cralaw virtua1aw library

    The Facts


    The facts of the case, as culled from the challenged Decision. are simple. Petitioner (along with his co-plaintiffs in the antecedent cases, namely, Rodolfo Gayatin, Jose Villacin and Jocelyn Montinola) 5 and private respondent were former tenants of the 30-door Barretto Apartments formerly owned by Serapia Realty, Inc. Sometime in April 1984, private respondent was elected President of the Barretto Tenants Association (hereafter referred to as the "Association") which was formed, among others, "to promote, safeguard and protect the general interest and welfare of its members." 6

    In a letter dated July 30, 1984, private respondent as president of the Association sought the assistance of the then Minister of Human Settlements to cause the expropriation of the subject property under the Urban Land Reform Program for subsequent resale to its tenants. The matter was endorsed to the Human Settlements Regulatory Commission, which in a letter dated November 5, 1984, signed by Commissioner and Chief Executive Officer Ernesto C. Mendiola, rejected the tenant’s request for expropriation. The letter stated in part: 7

    "At the moment, the effects of the provisions of PD 1517, otherwise known as the Urban Land Reform Decree, are limited only to the proclaimed 245 APD’s and/or ULRZ’s. Be informed further that, pursuant to Rule VIII & IX of the Rules and Regulations of the abovementioned Decree, expropriation will be availed of only as a last resort as there are various modes of Land Acquisition/Disposition techniques which the Ministry can avail of to help bonafide (sic) tenants/residents of a certain area."cralaw virtua1aw library

    Failing to get the assistance of the government, the tenants undertook to negotiate directly with the owners of the Barretto Apartments. Initially, Private Respondent Rosito Uy orally expressed to Mrs. Rosita Barretto Ochoa the tenants’ desire to purchase their respective units. Later, in a letter dated May 29, 1985, signed by thirty (30) tenants of the commercial and residential units, the tenants formally expressed to Mrs. Ochoa their intent to purchase.

    On July 27, 1985, Serapia Real Estate, Inc., sent to Rosito Uy, in his capacity as president of the Association, the following letter: 8

    "Sir:chanrob1es virtual 1aw library

    This is in response to your letter regarding your intent to buy our property together with its improvements located at corners Haig and Romualdez Streets and along Gen. Kalentong Street, Mandaluyong, Metro Manila. We would like to inform you that we are offering to sell the said property at a price of FOUR MILLION FIVE HUNDRED THOUSAND (P4,500,000.00) PESOS ONLY, under the following Terms and Conditions:chanrob1es virtual 1aw library

    AREA: 2,237 square meters

    Manner of

    Payment: An earnest money of

    P100,000.00 within 30 days.

    Full payment payable

    within 60 days.

    This offer is on a ‘FIRST COME FIRST SERVED BASIS’ and our price is good only within 60 days or until September 30, 1985 only.

    Thank You."cralaw virtua1aw library

    In addition, Serapia Realty, Inc., sent to spouses Gayatin a mimeographed letter stating: 9

    "November 15, 1985

    Mr./Mrs. Gayatin

    SIR/MADAM:chanrob1es virtual 1aw library

    Please be informed that we are intending to sell the unit you are now occupying.

    We are therefore giving you the first priority to purchase the same, if you desire.

    We are giving you a period of ten (10) days from receipt hereof to see us(,) otherwise, we will consider your inaction a waiver in (sic) your part to purchase the same.

    Very truly yours,

    SERAFIA REALTY INC.

    By: S/ Mrs. Rosa B. Ochoa

    T/ Mrs. Rosa B. Ochoa

    Kalentong Mandaluyong,

    Metro Manila

    (Authorize (sic) representative)"

    On November 20, 1985, Rodolfo Gayatin acknowledged receipt of the said letter with a request that he be furnished with the following information: 10

    "a. Consideration of the sale;

    "b. Terms and conditions of the sale; and

    "c. Plan indicating the areas and boundaries of each unit."cralaw virtua1aw library

    Letters acknowledging receipt of Mrs. Ochoa’s letter of intent to sell the apartment unit occupied by the tenants were sent by Dionisio Enriquez and Elena J. Bañares. The tenants designated and appointed private respondent as their president to negotiate with Serapia Realty, Inc. But the negotiations apparently did not ripen into a perfected sale.

    One and a half years later, on March 12, 1987, petitioner and his co-plaintiffs were notified that private respondent was the new owner of the apartment units occupied by them. Believing that they had been betrayed by their Association president, petitioner sued for "Redemption and Damages with Prayer For Preliminary Injunction."cralaw virtua1aw library

    Private respondent counter-sued for Damages and Accion Publiciana with Preliminary Attachment. Joint trial of the two cases ensued. The trial court found that private respondent had been designated and entrusted by plaintiffs to negotiate with the Barretto family for the sale of the units. It also found that a constructive trust was created between the private respondent as "the cestui que trust [should be trustee] and plaintiffs as beneficiaries [or cestuis que trust] vis-a-vis the subject units." 11 The dispositive portion of the trial court decision reads: 12

    "WHEREFORE, judgment is hereby rendered in the above-entitled cases in favor of plaintiffs Rodolfo Gayatin, Jose Villacin, Jocelyn Montinola and Meynardo Policarpio, and against defendant, Rosito Puechi S. Uy, —

    1. Ordering said defendant to execute the corresponding deeds of conveyance in favor of plaintiffs Meynardo Policarpio, Jocelyn Montinola, Jose Villacin and Rodolfo Gayatin covering Door 8, Lot 14; Door 3, Lot 9; Door 2, Lot 9; and Door 1, Lot 9, upon refund by the plaintiffs to the defendant of the sums of P35,200.00; P35,520.00; P35,600.00 and P47,200.00 respectively, without any interest.

    Should defendant Uy fail to so execute the deeds of conveyance herein ordered within fifteen (15) days from finality of judgment, the Clerk of this Court will execute the same and the Register of Deeds will be ordered to nullify the certificates of title in the name of said defendant and to issue other certificates of title in favor of the four above-named plaintiffs, respectively; and to pay to the plaintiffs the following sums:chanrob1es virtual 1aw library

    a) P15,000.00 as attorney’s fees;

    b) P40,000.00 as moral damages; and

    c) P20,000.00 as exemplary damages,

    all with interest at 12% per annum from date of this decision;

    2. Dismissing the Complaint in Civil Case No. 54444 as far as defendant Serapia Real Estate Inc. is concerned;

    3. Dismissing defendants’ counterclaims in Civil Case No. 54444; and

    4. Dismissing Rosito Puechi Uy’s complaint in Civil Case No. 55739.

    Costs against defendant Uy."cralaw virtua1aw library

    Private respondent appealed the decision to public respondent which as earlier stated reversed the decision and denied the subsequent motion for reconsideration. Hence, this petition only by Meynardo Policarpio. His co-plaintiff in the antecedent case, Jose Villacin, filed a Petition for Intervention 13 on March 28, 1995, which the First Division of this Court in a Resolution dated June 26, 1995, denied for lack of merit, because Villacin’s earlier petition docketed as G.R. No. 116137 Jose Villacin v. Court of Appeals, Et. Al.) had already been dismissed for failure to attach an affidavit of service. 14chanrobles.com:cralaw:red

    The Issue


    The sole issue raised by petitioner in this appeal is: 15

    "The respondent Court erred in reversing the finding of the trial court that a constructive trust existed between the plaintiffs and the defendant."cralaw virtua1aw library

    Public respondent, in finding that a constructive trust had not been created, ruled: 16

    "The contemporary and subsequent acts of the parties herein fail to convince Us that a constructive trust exists for the benefit of the appellees (tenants). A reading of the Articles of Incorporation of Barretto Apartment Tenants Association, Inc. (Exh.’J’) shows that the purpose for its formation is couched in general terms without specifically stipulating the proposed purchase and sale of the apartment units. While it may be conceded that the sale to the tenants was a general concern that would have redounded to their benefit, still it cannot be denied that the transaction could not have been effected unless the tenants and the owners came to terms regarding the sale. The record reveals that appellant (herein private respondent) did in fact send several communications, first to the Ministry of Human Settlements and when this avenue did not prosper, to the Barretto family in an effort to pursue their common desire to own their respective unit(s). The letter to the Minister of Human Settlements is dated July 30, 1984 (Exh.’J’) about a year before the execution of the Articles of Incorporation on 06 August 1985. Incidentally, no evidence appears on record to show that the Association filed the requisite documents for incorporation with the Securities and Exchange Commission.

    The Deed of Absolute Sale in favor of appellant over appellees’ unit appear to have been executed on 05 August 1986 (Exhs.’B’ to ‘F’) or about two (2) years after appellant was designated President of the Association and approximately one (1) year after the Articles of Incorporation were drawn up and signed by the parties. (Exhibit ‘S’)"

    Public respondent contended that plaintiffs were informed of the negotiations for the purchase and sale of property. Further, public respondent said:jgc:chanrobles.com.ph

    "it appears incumbent upon the tenants to verify from time to time on (sic) the progress of the negotiations not only from Mrs. Ochoa but also from appellant who live (sic) in the same apartment complex. Their inaction leads to the impression that they lacked interest to pursue their original plan to purchase the property or they could not agree on the terms and conditions for the sale." 17

    Before us, petitioner argues that public respondent erred in stating that "there was no common interest on the part of the members of the association to purchase units they were occupying." 18 He also maintains that it is immaterial whether the intent to buy the units was specifically stated in the purposes of the Association. What is important is that the contemporary and subsequent acts of parties indicated such a purpose." Petitioner insists that the tenants had authorized and private respondent had agreed to negotiate with the owners regarding the terms of the sale, precisely to conform to the desire of the owners to deal with only one person. Petitioner vehemently denies that the co-tenants of private respondent "had revoked or withdrawn the authority and trust reposed on the private respondent to act as negotiator in their behalf." 19

    Private respondent rebuts by saying that the entire property consisting of thirty (30) doors was not sold on one particular date. Rather, there were actually two batches of sale. He asserts that petitioner, in feigning ignorance of the two batches of sale and suing private respondent, had created an alibi to suspend payment of rental for years. 20

    It should also be considered, states private respondent, that upon denial of the tenants’ request for expropriation by the Ministry of Human Settlements, and the revelation that Barretto’s apartments were heavily encumbered, tenants "completely abandoned the plan to organize a formal association." Assuming for the sake of argument, adds private respondent, that the informal Association created a relationship among the parties, "the same ceased and expired by virtue of the act of the owners of the apartment who directly deal with the tenants" under Article 1924 21 of the Civil Code. 22

    The Court’s Ruling


    We find for Petitioner.

    As a rule, the jurisdiction of this Court in cases brought before it from the Court of Appeals is limited to the review and revision of errors of law allegedly committed by the appellate court. However, when there is conflict between the factual findings of the Court of Appeals and the trial court, 23 the Court may review such findings and conclusions, as we now do.

    We hold that an implied trust was created by the agreement between petitioner (and the other tenants) and private Respondent. Implied trusts are those which, without being expressed, are deducible from the nature of the transaction by operation of law as matters of equity, independently of the particular intention of the parties. 24 Constructive trusts are created in order to satisfy the demands of justice and prevent unjust enrichment. They arise against one who, by fraud, duress or abuse of confidence. obtains or holds the legal right to property which he ought not, in equity and good conscience, to hold. 25 It is not necessary that the intention of the tenants to purchase their apartments units be categorically stated in the purposes of their Association. A constructive trust as invoked by petitioner can be implied from the nature of the transaction as a matter of equity, regardless of the absence of such intention in the purposes of their Association. During his negotiations with Serapia Realty, Inc., private respondent admitted that he was not only representing himself but also the other tenants as president of the Association. This admission recognized the confidence reposed in him by his co-tenants. He testified: 26

    "Q Apart from the Regulatory Commission, and from the First Lady Imelda Marcos, you did not make any communication to any person or body in your capacity as President of the Association anymore?

    A We also tried to negotiate with Mr. Ochoa.

    Q What was your purpose of attempting to communicate with Mr. Ochoa?

    A So that those who cannot afford to pay in cash can be allowed to pay in installment.

    Q You used the word ‘we’, to whom are you referring to?

    A My co-tenants in the apartment.

    Q And when you made representations with the owner of the apartment, you were doing this in your capacity as President?

    A Both as individual member and as President.

    Q In your capacity as both individual member and President?

    A Yes, sir."cralaw virtua1aw library

    Alfonso Barretto, president of Serapia Realty Estate Corporation, testified that the owners wanted to deal with one "spokesman." 27 Hence, the tenants authorized private respondent to negotiate on their behalf. Unfortunately, private respondent negotiated for himself only, and successfully purchased eight (8) apartment units and secured an authority to sell the remaining twenty-two (22) units.

    Private respondent alleges that, after being informed by the owner, Petitioner, together with the latter’s co-plaintiffs in the action for redemption, did not want to contribute funds to redeem the encumbered apartment. (Such redemption was required before the units could be sold.) The trial court debunked this allegation thus: 28

    ". . . It taxes the mind no end to accept defendant’s claim that when the units which the tenants have for years been dreaming of owning one day were ready to be sold to them, all of them would suddenly become reluctant,’ to quote his word, to buy them. Considering the virtually (sic) give-away considerations (P42,200.00, P35,600.00, P35,520.00 and P35,200.00) for the subject units all of which were uniformly two-storey apartments with ‘2 bedrooms, living and dining rooms and kitchen’(citing TSN, January 12, 1990, p. 7) situated in a strategic and prime area, it is unbelievable and inconsistent with the ordinary imperatives of human experience for the plaintiffs to suddenly show reluctance towards the opportunity they have been expecting and preparing for all along."cralaw virtua1aw library

    If only the tenants had been informed by private respondent of this predicament of the owners, surely they would have raised the required amount to redeem the property and, in turn, acquired the units being rented by them. The incriminating admission of private respondent that he had not informed the plaintiffs in the redemption case of the prices at which the apartment units were sold demonstrated beyond cavil his betrayal of their trust: 29

    "Q Did you inform verbally (sic) these 4 plaintiffs that their apartments were being bought at P47,200.00, P35,600, P35,520 and P35,200?

    A I did not.

    Q As President of the association who got the trust and confidence of the members including the 4 plaintiffs, did you not consider it in keeping with trust and confidence to officially inform them that these apartments is (sic) being sold at that (sic) prices and if you could buy this (sic), you pay this (sic) amount. You did not inform them, is it not?

    ATTY. BALLELOS (counsel for private respondent):chanrob1es virtual 1aw library

    Already answered. He did not inform them but as far as the amount is concerned as a matter of discretion."cralaw virtua1aw library

    The ability of the tenants to pay the purchase price for their units was clearly found by trial court to be sufficient; and this finding was not contested by private respondent, to wit: 30

    "The ability of the plaintiffs to pay for their respective apartment units in question is demonstrated when they promptly complied with the Court’s Order of March 15, 1990 to pay to the Branch Clerk of this Court all the rentals due on their respective units from the time they stopped paying up to this month of March, which amounts were ordered to be deposited with the Philippine National Bank, Pasig Branch, Shaw Blvd., Pasig, in self-renewing 120-day time deposits,’ which now stands at P126,434.84 (including the monthly rentals in the same amount that they were last paying to defendant Serapia Real Estate, Inc.,’ from the month of April 1990 to July 1990) per PNB Certificates of Time Deposit Nos. 713637-C, 713638-C, 713639-C, 713640-C and 6713641-C, all dated August 30, 1990, now in the possession of the Branch Clerk of this Court."cralaw virtua1aw library

    The tenants could not be faulted for not inquiring into the status of private respondent’s negotiation with the owners of the apartments. They had a right to expect private respondent to be true to his duty as their representative and to take the initiative of informing them of the progress of his negotiations.

    The sale of the apartments in favor of private respondent was on August 6, 1986. Yet, it was only on March 27, 1987, that he informed the tenants of such sale. If he was in good faith, why the delay? Obviously, he hid the perfection of the sale from them. Why did he not inform the tenants that he was the owner as soon as the sale was consummated if, according to him, his co-tenants were unwilling to share the expenses of redemption? His co-tenants could not have blamed him for acquiring the entire property; after all, they supposedly did not have the money to contribute. Truly, the actuations of private respondent show nothing but greed on his part; he purchased the units for himself at bargain prices so he could resell them at a profit at the expense of the tenants. This violation of the trust reposed in him warrants the sanction provided by the equitable rule on which constructive trust is founded. Unfortunately, however, not all the plaintiffs in the original redemption case will be able to avail of this award because a party who has not appealed from the decision may not obtain any affirmative relief from the appellate court other than what he had obtained from the lower court if any, whose decision is brought up on appeal. 31

    The conclusion we thus reach in this case, finding constructive trust under Article 1447 32 of the New Civil Code, rests on the general principles on trust which, by Article 1442, have been adopted or incorporated into our civil law, to the extent that such principles are not inconsistent with the Civil Code, other statutes and the Rules of Court.

    This Court has ruled in the case of Sumaoang v. Judge, RTC, Br. XXXI, Guimba, Nueva Ecija 33 that:jgc:chanrobles.com.ph

    "A constructive trust, otherwise known as a trust ex maleficio, a trust ex delicto, a trust de son tort, an involuntary trust, or an implied trust, is a trust by operation of law which arises contrary to intention and in invitum, against one who, by fraud, actual or constructive, by duress or abuse of confidence, by commission of wrong, or by any form of unconscionable conduct, artifice, concealment, or questionable means, or who in any way against equity and good conscience. either has obtained or holds the legal right to property which he ought not, in equity and good conscience, hold and enjoy. It is raised by equity to satisfy the demands of justice. However, a constructive trust does not arise on every moral wrong in acquiring or holding property or on every abuse of confidence in business or other affairs; ordinarily such a trust arises and will be declared only on wrongful acquisitions or retentions of property of which equity, in accordance with its fundamental principles and the traditional exercise of its jurisdiction or in accordance with statutory provision, takes cognizance. It has been broadly ruled that a breach of confidence, although in business or social relations, rendering an acquisition or retention of property by one person unconscionable against another, raises a constructive trust.

    And specifically applicable to the case at bar is the doctrine that ‘A constructive trust is substantially an appropriate remedy against unjust enrichment. It is raised by equity in respect of property, which has been acquired by fraud, or where although acquired originally without fraud, it is against equity that it should be retained by the person holding it.’

    The above principle is not in conflict with the New Civil Code, Codes of Commerce, Rules of Court and special laws. And since We are a court of law and of equity, the case at bar must be resolved on the general principles of law on constructive trust which basically rest on equitable considerations in order to satisfy the demands of justice, morality, conscience and fair dealing and thus protect the innocent against fraud. As the respondent court said, ‘It behooves upon the courts to shield fiduciary relations against every manner of chicanery or detestable design cloaked by legal technicalities.’"

    Although the citations in the said case originated from American jurisprudence, they may well be applied in our jurisdiction." (S)ince the law of trust has been more frequently applied in England and in the United States than it has been in Spain, we may draw freely upon American precedents in determining the effects of trusts, especially so because the trusts known to American and English equity jurisprudence are derived from the fidei commissa of the Roman Law and are based entirely upon civil law principles." 34

    Having concluded that private respondent willfully violated the trust reposed in him by his co-tenants, we consider it a serious matter of "justice, morality, conscience and fair dealing" that he should not be allowed to profit from his breach of trust. "Every person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him." 35 Thus, petitioner is granted the opportunity to purchase the property which should have been his long ago had private respondent been faithful to his trust.chanrobles.com : virtual lawlibrary

    We only regret that we cannot grant the same opportunity to the other beneficiaries or cestuis que trust for their failure to perfect their petitions for review of the respondent Court’s Decision.

    WHEREFORE, the petition is hereby GRANTED. The assailed Decision and Resolution are hereby REVERSED and SET ASIDE. Consistent with the trial court’s decision, Private Respondent Rosito Puechi S. Uy is ORDERED to EXECUTE a deed of conveyance covering Door 8, Lot 14, in favor of Petitioner Meynardo Policarpio upon the latter’s payment of P35,200.00 without any interest.

    No costs.

    SO ORDERED.

    Narvasa, C.J., Davide, Jr., Melo and Francisco, JJ., concur.

    Endnotes:



    1. Rollo, pp. 30-42.

    2. Sixteenth Division composed of Justice Pacita Cañizares-Nye, ponente, and Justices Jorge S. Imperial and Eduardo G. Montenegro, concurring.

    3. Rollo, p. 44.

    4. Ibid., p. 41-42.

    5. In Civil Case Nos. 54444 for Redemption and Damages with Prayer for Preliminary Injunction and 55739 for Damages, Accion Publiciana with Preliminary Attachment filed before Branch CLI (151) of the Regional Trial Court in Pasig.

    6. Rollo, p. 32.

    7. Ibid., pp. 32-33.

    8. Ibid., p. 33.

    9. Ibid., p. 34.

    10. Ibid. p. 34.

    11. Ibid., p. 84.

    12. Ibid., pp. 30-31.

    13. Ibid., pp. 197-230.

    14. Ibid., p. 249.

    15. Ibid., p. 20.

    16. Ibid., p. 40.

    17. Ibid., p. 41.

    18. Ibid., p. 21.

    19. Ibid., pp. 20-23.

    20. Ibid., pp. 135-141.

    21. "Article 1924. The agency is revoked if the principal directly manages the business entrusted to the agent, dealing directly with third persons."cralaw virtua1aw library

    22. Rollo, p. 138.

    23. Quebral v. Court of Appeals, 252 SCRA 353, 364, January 25, 1996; Co v. Court of Appeals, 247 SCRA 195, 200, August 11, 1994 citing Gaw v. Intermediate Appellate Court, 220 SCRA 405, March 24, 1993. See also Florentino Reyes, Et. Al. v. Court of Appeals, G.R. No. 110207, July 11, 1996, for the ten exceptions to the rule that findings of facts of the Court of Appeals are binding to this Court.

    24. Cuaycong v. Cuaycong, 21 SCRA 1192, 1196-1197, December 11, 1967, citing 89 C.J.S. 722, 724.

    25. Vda. De Esconde v. Court of Appeals, 253 SCRA 66, 73-74, February 1, 1996, citing O’Laco v. Co Cho Chit, 220 SCRA 656, 663, March 31, 1993. See also 89 C.J.S. 726-727 and 76 Am Jur 2d 446.

    26. TSN, May 15, 1990, pp. 11-12.

    27. TSN, January 12, 1990, p. 3.

    28. Rollo, pp. 82-83.

    29. TSN, May 15, 1990, p. 17.

    30. Rollo, pp. 83-84.

    31. Atlantic Gulf and Pacific Company of Manila, Inc. v. Court of Appeals, 247 SCRA 606, August 23, 1995; Santos v. Court of Appeals, 221 SCRA 42, 46, April 6, 1993 citing De Lima v. Laguna Tayabas Co., 160 SCRA 70, 76, April 15, 1988.

    32. Article 1447 of the Civil Code provides:jgc:chanrobles.com.ph

    "ART. 1447. The enumeration of the following cases of implied trust does not exclude others established by the general law of trust, but the limitation laid down in Article 1442 shall be applicable."cralaw virtua1aw library

    33. 215 SCRA 136, 147, October 26, 1992, citing Roa, Jr. v. Court of Appeals, 123 SCRA 3, June 28, 1983.

    34. Miguel v. Court of Appeals, 29 SCRA 760, 775, October 30, 1969, citing Government of the Philippine Islands v. Abadilla, 46 Phil. 642 (1924).

    35. Article 22 of the Civil Code.

    G.R. No. 116211   March 7, 1997 - MEYNARDO POLICARPIO v. COURT OF APPEALS, ET AL.




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