Sime Darby Pilipinas v. Mendoza
REITERATIONFacts
The Antecedents: Sime Darby Pilipinas, Inc. (Sime Darby) employed Jesus B. Mendoza (Mendoza) as sales manager. Sime Darby purchased a Class "A" club share in Alabang Country Club (ACC) in 1987. Due to ACC's By-Laws prohibiting corporate ownership, the share was placed under Mendoza's name in trust for Sime Darby. Mendoza endorsed the Club Share Certificate and executed a Deed of Assignment in blank, and Sime Darby paid all monthly dues and assessments from 1987. Mendoza retired in April 1995, receiving substantial separation pay. In July 2004, Sime Darby found a buyer for the share. To facilitate the sale, Sime Darby required an authorization from Mendoza, who refused unless paid ₱300,000, claiming it was for unpaid separation benefits. The sale did not proceed. Procedural History: Sime Darby filed a complaint for damages with a writ of preliminary injunction against Mendoza. The Regional Trial Court (RTC) initially denied Sime Darby's prayer for a restraining order and preliminary injunction. After trial, the RTC rendered a decision in favor of Sime Darby, enjoining Mendoza from using the club share and ordering him to pay temperate damages and attorney's fees. Mendoza appealed to the Court of Appeals (CA), which reversed the RTC's decision, dismissing Sime Darby's complaint. Sime Darby's motion for reconsideration was denied, leading to the present petition. The Petition: Sime Darby filed a petition for review on certiorari assailing the CA's decision and resolution, arguing that the appellate court erred in declaring Mendoza as the owner of the club share and in reversing the RTC's ruling granting damages and injunctive relief.
Issue(s)
Whether Sime Darby is entitled to damages and injunctive relief against Mendoza regarding the club share. Whether the appellate court erred in declaring that Mendoza is the owner of the club share.
Ruling
The petition has merit. The Supreme Court GRANTED the petition, SET ASIDE the Decision and Resolution of the Court of Appeals, and REINSTATED the Decision of the Regional Trial Court.
Ratio Decidendi
On the entitlement to damages and injunctive relief: The Supreme Court held that Sime Darby sufficiently established its right over the club share. Evidence showed Sime Darby acquired the share in 1987 and, due to ACC's By-Laws, registered it under Mendoza's name in trust. An application form identified Sime Darby as the owner and Mendoza as the assignee, and a letter confirmed Mendoza's membership as a company benefit. Mendoza's admission of signing documents in blank and turning them over to Sime Darby, coupled with Sime Darby's consistent payment of dues, established a trust relationship. The Court applied the principle that a trust arises in favor of the one who pays the purchase price, creating a resulting trust, where Mendoza held only the usufructuary right. Mendoza's refusal to authorize the sale and his attempt to appropriate the share constituted a violation of Sime Darby's rights, justifying the injunctive relief and damages. The RTC's findings, which were reinstated, correctly identified the elements for a writ of preliminary injunction, including a clear and unmistakable right and an urgent necessity to prevent serious damage, all present in this case. On the appellate court's declaration of Mendoza's ownership: Mendoza's claim of a right of first refusal was deemed self-serving and unsubstantiated by any document. The circumstances, including Sime Darby's payment of dues and the bills being sent to its address, indicated no intent to relinquish beneficial interest. Therefore, the appellate court erred in declaring Mendoza the owner.
Main Doctrine
A trust arises in favor of one who pays the purchase price of a property in the name of another, creating a resulting trust, where the transferee holds the legal title but the beneficial interest belongs to the payor. The transferee's claim of a right of first refusal without documentary evidence is self-serving and cannot overcome the presumption of trust.