Feliciano Nito v. Court of Appeals
REITERATIONFacts
The Antecedents: The Agricultural Credit Administration (ACA), now Land Bank, owned three parcels of land. Petitioner Feliciano Nito was a lessee of a portion. ACA scheduled a public bidding for the sale of these lands on March 22, 1979. Several individuals, including private respondent Conrado Villarama, expressed interest. ACA advised them to form a group and appoint a representative. They formed an alliance, appointed Villarama as their representative, and contributed P133,000.00 as a bid bond. Petitioner was included in the group but did not contribute to the bid bond. Villarama was the sole bidder. He was advised to negotiate directly with ACA. The bid bond was converted to a performance bond. The group formalized their alliance through a manifesto, which petitioner did not sign. Petitioner later gave Villarama P10,000.00 as a cash deposit on September 10, 1979. Villarama and ACA agreed on a purchase price of P1,600,000.00, payable in full by March 16, 1982, with forfeiture of the cash deposit as liquidated damages. The group agreed to meet on March 16, 1982, for payment. Petitioner received a letter dated March 8, 1982, from the group's counsel, demanding full payment of his share by March 16, 1982, and warning that failure to pay would be construed as lack of interest, leading the group to seek a substitute buyer. Petitioner did not attend the March 16, 1982 meeting nor pay his share, citing a disagreement over the frontage of the lot allocated to him. Instead, he attempted to pay ACA directly with a P125,000.00 check, which ACA refused, directing him to pay Villarama. ACA extended the payment deadline to March 17, 1982. On the evening of March 16, 1982, the group offered petitioner's allocated lot to private respondent Candido Milan for P125,000.00, which Milan accepted. On March 17, 1982, the group waited for petitioner until 5:00 P.M. but he did not appear. Milan's money was used to complete the full purchase price, minus the initial deposit. ACA issued the Deed of Sale to Villarama, who then facilitated the resurvey and issuance of individual deeds and titles. Procedural History: Petitioner filed a complaint for reconveyance of property with damages before the Regional Trial Court (RTC), alleging fraud and breach of trust. The RTC dismissed the complaint for insufficiency of evidence and denied the counterclaims for damages. The RTC ordered Candido Milan to reimburse petitioner P10,000.00 with legal interest and ordered petitioner to vacate the premises. A notice of lis pendens was ordered cancelled. Petitioner appealed to the Court of Appeals (CA), which affirmed the RTC decision in toto. Hence, this petition for review on certiorari. The Petition: Petitioner argues that his P10,000.00 deposit made Villarama a trustee under Article 1452 of the Civil Code, that he became a co-purchaser/co-owner, and that his non-payment should not result in forfeiture of his rights. He contends the group could not deprive him of his share and give it to Milan.
Issue(s)
Whether petitioner's deposit of P10,000.00 and his inclusion in the group created a trust relationship under Article 1452 of the Civil Code, making him a co-purchaser or co-owner entitled to reconveyance. Whether the group could validly allocate petitioner's share to a third party (Candido Milan) due to petitioner's failure to pay his share by the deadline.
Ruling
The petition is denied for lack of merit. The decision of the Court of Appeals is affirmed.
Ratio Decidendi
On the issue of whether a trust relationship under Article 1452 of the Civil Code was created: The Court held that Article 1452 requires two requisites: (1) an agreement by two or more persons to purchase a property, and (2) their consent that one person shall take the title in his name for the benefit of all. The evidence did not show that petitioner had agreed to join the organized group to purchase the lands from ACA. While offered the opportunity, he rejected it due to a disagreement on the frontage of the lot and preferred to negotiate directly with ACA. Furthermore, petitioner did not contribute to the bid bond, did not sign the manifesto formalizing the group's alliance, and failed to pay his share by the deadline. His P10,000.00 deposit was conditioned on receiving a 32-meter frontage, not the 12-meter frontage offered. Therefore, the essential elements for the creation of a trust under Article 1452 were not met, and petitioner could not claim to be a co-purchaser or co-owner based on this provision. On the issue of whether the group could allocate petitioner's share to a third party: The Court found that petitioner was duly notified in writing on March 8, 1982, that he needed to pay the full price of his allocated portion by March 16, 1982, and that failure to do so would be construed as a lack of interest, compelling the group to find a substitute buyer. Petitioner's failure to pay by the deadline placed the entire group in jeopardy of having the sale canceled and their cash deposit forfeited. The group obtained an extension until March 17, 1982, and waited for petitioner the entire day. Only after 5:00 P.M. on March 17, 1982, when petitioner still failed to appear and pay, did the group decide to use Candido Milan's money to complete the purchase price. Without Milan's contribution, the sale would not have been consummated. The Court of Appeals correctly observed that by petitioner's failure to meet the deadline, he waived his right to purchase the allocated portion, and the group had no recourse but to give the area to Milan and the Carloses to avoid losing the entire property. The finding that petitioner received the demand letter, evidenced by the return card signed by his wife, was a factual finding of the lower courts that the Supreme Court would not disturb.
Main Doctrine
Article 1452 of the Civil Code, which creates a trust in favor of co-purchasers when legal title is taken in the name of one person for the benefit of all, requires a prior agreement to purchase and consent that one person shall take title for the benefit of all. Failure to meet conditions precedent, such as contributing to the bid bond or fulfilling payment deadlines, negates the existence of such an agreement and trust.