ESTATE OF EDWARD MILLER GRIMM,
represented by RAMON J. QUISUMBING
and RANDY GLEAVE LAWYER, as Judicial
Administrators,
Petitioners,
G.R. No. 159810
October 9, 2006
- versus -
ESTATE OF CHARLES PARSONS
and PATRICK C. PARSONS, G-P AND COMPANY
and MANILA GOLF & COUNTRY CLUB, INC.,
Respondents.
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D E C I S I O N
GARCIA, J.:
Because legal and situational ambiguities often lead to disagreements
even between or amongst the most agreeable of persons, it behooves all
concerned to put their financial affairs and proprietary interests in
order before they depart for the great beyond. Leaving legal loose ends
hanging or allowing clouds to remain on property titles when one can do
something about them before the proverbial thief in the night suddenly
comes calling only opens the door to bruising legal fights and similar
distracting inconveniences. So it was here.
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In this Petition for Review under Rule 45 of the Rules of Court,
the Estate of Edward Miller Grimm, represented by its judicial
administrators, assails and seeks to set aside the Decision[1] dated
September 8, 2003 of the Court of Appeals (CA) in CA-G.R. CV No. 69990,
reversing an earlier decision of the Regional Trial Court (RTC) of
Makati City in its Civil Case No. 92-2452.
At the core of the controversy is a stock certificate of
the Manila Golf & Country Club, Inc. (“MGCC” or the “Club”,
for short) covered by Membership Certificate (MC) No. 1088 for 100
units, the playing rights over which the Rizal Commercial Banking
Corporation (RCBC), the court-appointed receiver, had, in the meantime,
leased out. The Club issued MC No. 1088 to replace MC No. 590.
Asserting clashing ownership claims over MC No.1088, albeit recorded in
the name of Charles Parsons (“Parsons”, hereinafter) are petitioner
Estate of Edward Miller Grimm and respondent G-P and Company (“G-P
& Co.”, hereinafter).
Parsons and Edward Miller Grimm (Grimm), together with Conrado Y. Simon
(Simon), formed in 1952 a partnership for the stated purpose of
engaging in the import/export and real estate business. Per SEC
Certificate #3305,[2] the partnership was registered under the
name G - P and Company.
Before September 1964, Parsons and Grimm each owned proprietary
membership share in MGCC,[3] as evidenced by MC No. 374 for 100 units
in the name of Parsons, and MC No. 590, also for 100 units, in the name
of Grimm. Per records, the Club issued MC No. 590 to Grimm on May 25,
1960.[4]
After Grimm’s demise on November 27, 1977, Parsons and Simon continued
with the partnership under the same name, G – P and Company, as
reflected in Articles of Partnership dated December 14, 1977.[5]
The articles of the partnership would later undergo another amendment
to admit Parsons’ son, Patrick, in the partnership.[6] After Parsons
died on May 12, 1988, Amended Articles of Partnership of G-P and
Company was executed on September 23, 1988 by and among Parsons’ heirs,
namely, Patrick, Michael, Peter and Jose, all surnamed Parsons, albeit
the amendment appeared to have been registered with the SEC only on
March 18, 1993. [7] chanroblesvirtualawlibrary
The herein legal dispute started when brothers Patrick and Jose, both
surnamed Parsons, responding to a letter[8] from the Estate of Grimm,
rejected the existence of a trust arrangement between their father and
Grimm involving MC No. 1088. Thus spurned, the Estate of Grimm filed on
August 31, 1992 before the RTC of Makati City, a suit for recovery of
MC No. 1088 with damages against the Estate of Parsons, Patrick Parsons
and MGCC. In its complaint,[9] docketed as Civil Case No. 92-2452
and eventually raffled to Branch 135 of the court, the Estate of Grimm,
represented by its judicial administrator, Ramon J. Quisumbing,
alleged, among other things, the following:cralaw:red
1. That on September 7,
1964, Grimm transferred MC No. 590 in trust to Parsons; on the same
day, MGCC cancelled MC No. 590 and issued MC No. 1088 in the name
of Parsons;chanroblesvirtualawlibrary
2. That in separate letters dated February 28, 1968
addressed to MGCC, both Grimm and Parsons stated that the transfer of
MC No. 590 was temporary. Enclosed in that Parsons’ letter was MC No.
1088 which he was turning over for safekeeping to the Club, thru E.C.
Von Kauffmann and Romeo Alhambra, then MGCC honorary secretary and
assistant manager, respectively;chanroblesvirtualawlibrary
3. That on June 9, 1978, or after Mr. Kauffman’ death and
Mr. Alhambra’s resignation, MGCC turned over the possession
of MC No. 1088 to Parsons;
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4. That in 1977, Grimm died; after a protracted proceedings, his estate was finally settled in 1988, the year Parsons also died;chanroblesvirtualawlibrary
5. That Patrick and Jose Parsons had, when reminded of the
trust arrangement between their late father and Grimm, denied the
existence of a trust over the Club share and refused to return the
same; and
6. That MGCC had refused, despite demands, to cancel MC No. 1088 and issue a new certificate in the name of the Estate of Grimm.
Attached to the complaint were the demand letters and other
communications which, to the Estate of Grimm, document the
Grimm-Parsons trust arrangement.
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In his Answer with counterclaim,[10] Patrick Parsons averred that
his father was, with respect to MC No. 1088, a mere trustee of the true
owner thereof, G-P & Co., and alleged, by way of affirmative
defense, that the claim set forth in the complaint is
unenforceable, barred inter alia by the dead man’s statute,
prescription or had been waived or abandoned.
Herein respondent G-P & Co., echoing Patrick Parsons’ allegation
respecting the ownership of MC No. 1088, moved to intervene and to
implead Far East Bank & Trust Co. (FEBTC), as transfer agent of
MGCC, as defendant-in-intervention. Attached to its motion was its
COMPLAINT In Intervention[11] therein alleging (a) that on September 1,
1964, Parsons executed a Letter of Trust, infra, in which he
acknowledged the beneficial ownership of G-P & Co. over MC No. 374
and MC No.1088; (b) that Parsons, as required by the partnership,
endorsed both certificates in blank; and (c) that G-P & Co. carried
said certificates amongst its assets in its books of accounts and
financial statements and paid the monthly dues of both certificates to
the Club when its membership privileges were not temporarily assigned
to others. In the same complaint-in-intervention, G-P & Co. cited
certain tax incidents as reasons why the transfer of MC No. 374 and MC
No. 1088 from Parsons to the intervenor-partnership cannot as yet be
accomplished.
After the usual reply and answer to counterclaims had been filed, the
Estate of Grimm filed an amended complaint to include Randy Gleave
Lawyer, the other judicial co-administrator, as representative of the
Estate. On April 28, 1993, the trial court admitted the amended
complaint.
After a lengthy trial, the trial court rendered its May 29, 2000
judgment[12] finding for the Estate of Grimm, as plaintiff a quo,
disposing as follows:cralaw:red
1. Ordering defendants ESTATE OF CHARLES PARSONS and PATRICK C. PARSONS:cralaw:red
1.1 to turn over [MC] No. 1088 to plaintiff ESTATE OF EDWARD MILLER GRIMM;chanroblesvirtualawlibrary
1.2 jointly and severally to pay damages to
plaintiff ESTATE in the amount of P400,000.00 per annum from September
8, 1989 to November 12, 1998, with legal interest thereon from the date
of this Decision until fully paid;chanroblesvirtualawlibrary
1.3 Jointly and severally, to pay plaintiff ESTATE attorney’s fees in the amount of P1,000,000.00 and the costs;
2. Ordering defendant [MGCC] and defendant-in-intervention
[FEBTC] to cancel [MC] No. 1088 and to issue a new Membership
Certificate in lieu thereof in the name of plaintiff ESTATE.
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3. Ordering Receiver RIZAL COMMERCIAL BANKING CORPORATION to
turn over to plaintiff ESTATE all income derived from the lease of the
playing rights of [MC] No. 1088, less Receiver’s fees and charges.
4. Ordering the dismissal of the counterclaim of the defendants [Parsons]; and
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5. Ordering the dismissal of the complaint-in-intervention and the supplemental counterclaim of intervenor G - P AND COMPANY.
SO ORDERED. (Words in bracket added)
In gist, the trial court predicated its ruling on the postulate that
the temporary transfer of Grimm’s original share in MGCC -
covered by MC No. 590 whence MC No. 1088 descended - to Parsons,
created a trust relationship between the two.
Therefrom, only herein respondents G-P & Co., Patrick Parsons and
the Parsons Estate appealed to the CA, albeit MGCC would, in its brief,
reiterate its readiness to issue the corresponding replacement
certificate to whosoever is finally adjudged owner of MC No. 1088.
On September 8, 2003, in CA-G.R.CV No. 69990, the appellate court
rendered its herein assailed Decision,[13] disposing as follows:cralaw:red
WHEREFORE, the Decision of the lower court dated May 29, 2000 is hereby REVERSED and SET ASIDE, and another one rendered:cralaw:red
1. Dismissing the complaint filed by Estate of Edward Miller Grimm for lack of merit;chanroblesvirtualawlibrary
2. Ordering Manila Golf and Country Club, Inc., and
defendant-in-intervention Far East Bank & Trust Company, as
transfer agent, to immediately effect the reconveyance of [MC] No. 1088
to Intervenor-appellant G-P and Company;chanroblesvirtualawlibrary
3. Ordering Rizal Commercial Banking Corporation, as
receiver, to immediately turn over to intervenor-appellant G-P and
Company all income derived from the lease of the playing rights of said
Membership Certificate, less receiver’s fees;chanroblesvirtualawlibrary
4. Ordering [the] Estate of Edward Miller Grimm to pay appellants the amount of P800,000.00 as attorney’s fees;chanroblesvirtualawlibrary
5. Ordering Estate of Edward Miller Grimm to pay appellants the costs of suit.
SO ORDERED. (Words in bracket added.)
Hence, this petition for review on the lone submission that the CA
erred in finding that respondent G-P & Co. is the beneficial owner
of MC No. 1088.
In their comment to the petition, the respondents urge the outright
dismissal thereof on the ground that it raises only purely factual and
evidentiary issues which are beyond the office of an appeal by
certiorari. As argued further, the factual findings of the CA are
conclusive on the parties.
It should be made clear right off that respondent Patrick Parsons, in
his individual capacity, and the Estate of Parsons (collectively, the
Parsons) are not claiming beneficial ownership over MC No. 1088. The
same goes for respondent MGCC which went to state on record that “[T]he
ownership of [MC] No. 1088 (previously No. 590) does not belong to the
Club and it does not stand to gain … from the determination of its real
owner.”[14]
We GRANT the petition.
The respondents’ formulation of the grounds for the dismissal of the
instant petition is a statement of the general rule. A resolution of
the petition would doubtless entail a review of the facts and
evidentiary matters against which the appealed decision is cast, a
procedure which is ordinarily outside the province of the Court and the
office of a certiorari review under Rule 45 of the Rules of Court. For,
the rule of long standing is that the Court will not set aside the
factual determinations of the CA lightly nor will it embark in the
evaluation of evidence adduced during trial. This rule, however, admits
of several exceptions. Among these are when the factual conclusions of
the CA are manifestly erroneous; are contrary to those of the trial
court; when the judgment of the CA is based on misapprehension of
facts or overlooked certain relevant facts not disputed by the
parties which, if properly considered, would justify a different
conclusion.[15] Decidedly, this case falls within the recognized
exceptions to the rule on the finality of factual findings or
conclusions of the CA.
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The principal issue tendered in this case turns on who between
petitioner Estate of Grimm and respondent G.P. & Co. beneficially
owns MC No. 1088. Corollary thereto - owing to the presentation
by respondents of a LETTER OF TRUST that Parsons allegedly executed in
favor of G-P and Company with respect to MC No. 1088 - is the
question of whether or not the transfer of MC No. 590 effected on
September 7, 1964 by Grimm in favor of Parsons resulted, as the
petitioner would have it, in the formation of a trust relation between
the two. Thus formed, the trust relationship would preclude the
trustee from disposing of the trust property, save when repudiation of
the trust had effectively supervened.
The trial court found the September 7, 1964 Grimm- to- Parsons
certificate transfer to be only temporary and without valuable
consideration to accommodate a third person and thus adjudged Grimm to
be the real owner of MC No. 590, as later replaced by MC No. 1088.
According to the trial court, such transfer created a trust, with
Parsons, as trustee, and Grimm, as the beneficial owner of the share
thus transferred, adding that Parsons, as mere trustee, is
without right to transfer the replacement certificate to G-P & Co.
On the other hand, the CA, while eschewing the alternative affirmative
defenses interposed below by respondents, nonetheless ruled for
respondent G–P & Co. Citing Article 1448 of the Civil
Code,[16] the appellate court held that respondent G–P & Co.
pertains the beneficial ownership of MC No. 1088, an implied
trust in its favor having been created when MC No. 590 and
MC No. 374 were acquired for and placed in the names of Grimm and
Parsons, respectively, albeit the partnership paid for the price
therefor. To the appellate court, the fact that these
certificates were carried, as of December 31, 1974, November 27, 1977
and December 31, 1978 in the books[17] of G-P & Co. as investment
assets only proves one thing: the company paid the acquisition costs
for the membership certificates. If Grimm was the real owner of said
share, he should have, according to the appellate court, objected to
its inclusion in the partnership assets during his lifetime. Completing
its ratiocination, the CA wrote:cralaw:red
xxx. A trust, which derives
its strength from the confidence one reposes on another especially
between the partners and the company, does not lose that character
simply because of what appears in a legal document. The transfer
therefore of Grimm’s [MC] No. 590 on September 7, 1964 in favor of
Charles Parsons resulted merely in the change of the person of trustee
but not of the beneficial owner, the G-P and
Company.
The CA’s ruling does not commend itself for acceptance. As it were, the
assailed decision started on the wrong foot and thus had to limp all
along to arrive at a strained and erroneous conclusion. We shall
explain.
A party in whose favor a legal presumption exists may rely on and
invoke such legal presumption to establish a fact in issue. He need not
introduce evidence to prove that fact. For, a presumption is prima
facie proof of the fact presumed and to the party against whom it
operates rests the burden of overthrowing by substantial and credible
evidence the presumption.[18] Under the law on evidence, it is presumed
that “there was sufficient consideration for a contract.”[19]
Inasmuch as Grimm’s name appeared on MC No. 590 as registered owner
thereof, he is deemed to have paid sufficient consideration for
it. The onus of proving otherwise would fall on respondents G-P &
Co. and/or the Parsons. Without so much of an explanation, however, the
CA minimized the value of MC No. 590 as arguably the best evidence of
ownership. Corollarily, the appellate court devalued the rule on legal
presumption and faulted petitioner Estate of Grimm for not presenting
evidence to prove that Grimm paid for his original acquisition of MC
No. 590. Wrote the CA:
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Contrary to the findings of the lower court, [petitioner] failed to
establish [its] right over the said shares. xxx Not a single
evidence of proof of payment for the said shares was ever presented by
the [petitioner] to establish ownership. (Words in bracket added.)[20]
Ironically, while the CA held it against the petitioner for failing to
adduce proof of payment by Grimm for his MC No. 590, it nonetheless
proceeded to declare respondent G-P & Co. to be the
beneficial owner of said certificate even if it, too, had not presented
proof for such payment. Respondent G-P & Co., in its
complaint-in-intervention (should have been answer-in-intervention),
did not allege paying for MC No. 590. Surely, payment cannot be validly
deduced, as the CA did, from the bare fact of such membership
certificate being listed in the books of respondent G -P
& Co. as partnership investment assets. For one, the self-serving
book entries in question are, as correctly dismissed by the trial
court, not evidentiary of ownership. Else, anyone can lay a claim, or
worse, acquire ownership over a share of stock by the simple expedience
of listing, without more, the same in the partnership or corporate
books. The sheer absurdity of the notion need no belaboring.
For another, what appears or what respondent company uniformly entered
as investments are: “Manila Golf & Country Club, Inc. 2 shares.” No
reference was made whatsoever in the books or financial statements
about MC No. 590, (MC. No. 1088) and MC. No. 374. In the absence
of the number reference or other similar identifying details, the CA’s
categorical conclusion that one of the “2 shares” referred to is MC No.
1088 is at best speculative. This observation becomes all the more
valid given that Michael Parsons had in his name two (2) Club share
certificates. Exhibit “X-4,” a September 21, 1964 letter from
Parsons to Mr. Kaufmann made specific reference to Michael’s shares:cralaw:red
Under the circumstance, please disregard … the previous letter which Michael wrote in connection with the shares in his name ….
In the case of the two shares in the name of Michael, please leave the two in his name
As matter now stands, in summary, I shall retain my shares in my name
and continue playing under such shares; Michael will retain two shares
assigning one to Mr. Stoner; and Pete Grimm will assign his playing
rights to Mr. Daikichi Yoshida.[21] chanroblesvirtualawlibrary
And for a significant third, respondent G-P & Co. is not the same
G-P & Co. that Parsons, Grimm and Simon organized in 1952, the
former being an entity that came into existence only on September 23,
1988. It is thus well-nigh impossible for respondent company to
have participated in a transaction that occurred years before it
acquired juridical personality. In the concrete, it is not physically
possible for respondent G-P & Co. to have paid the price for the
purchase of Grimm’s MC No. 590, the same having been acquired in 1960
or some 28 years before the respondent company was established by the
execution of the Articles of Partnership on September 23, 1988.
The trial court depicted the incongruity of the situation in the
following fashion:cralaw:red
Intervenor [respondent G-P & Co.] is not the same partnership
originally formed by Grimm, Parsons and Simon. When Grimm died on
November 27, 1977, the original partnership was dissolved. The death of
a partner causes dissolution of a partnership [Article 1829, Civil
Code]. A new partnership was formed with Parsons and Simon as partners.
Besides this new partnership formed after the death of Grimm, there
were five (5) others formed [Exhibit DD, EE, FF, GG, HH and II]
carrying the name, G-P and Company. [22] (Words in bracket in the
original)
Independent of the cited Article 1829 of the Civil Code on the matter
of partnership dissolution, however, it bears to state that Parsons and
Simon executed on December 13, 1977 a joint affidavit[23] wherein they
declared the dissolution of the original 3-man G-P & Co., owing to
the death of Grimm. The registration on December 14, 1977 of a new
Articles of Partnership of G-P & Co. followed the execution by
Parsons and Simon of said affidavit. [24]
It may be, as respondents rationalize, that the succeeding G-P &
Co. partnerships merely continued with the business started by the
original G-P & Co.[25] This element of continuity, assuming to be
true, does not, however, detract from the fact that the partnerships of
the same name formed after Grimm’s demise are entities altogether
different and with personalities distinct from the original
partnership.
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This brings us to the next issue of whether or not the transfer to
Parsons of MC No. 590, as replaced by MC No. 1088, partook of the
nature of a trust transaction.
Trust is the legal relationship between one having an equitable
ownership in property and another person owning the legal title to such
property, the equitable ownership of the former entitling him to the
performance of certain duties and the exercise of certain powers by the
latter.[26] Trust relations between parties may be express,
as when the trust is created by the intention of the trustor.[27] An
express trust is created by the direct and positive acts of the
parties, by some writing or deed or by words evidencing an intention to
create a trust; the use of the word trust is not required or essential
to its constitution, it being sufficient that a trust is clearly
intended.[28] Implied trust comes into existence 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.[29] chanroblesvirtualawlibrary
Judging from their documented acts immediately before and subsequent to
the actual transfer on September 7, 1964 of MC No. 590, Parsons, as
transferee, and Grimm, as transferor, indubitably
contemplated a trust arrangement. Consider:cralaw:red
There can be no quibbling, owing to the letter exchanges between the
Club, in particular its Honorary Secretary E. C. Von Kauffman, and
Parsons, that the reason Grimm transferred his MC No. 590 to
Parsons was because of the latter’s wish to accommodate one Daikichi
Yoshida. Earlier, Parsons recommended to Club management the approval
of Mr. Yoshida’s “Application For Waiting List Eligible To [Club]
Proprietary Membership.”[30] In a letter of August 10, 1964[31]
to the MGCC’s Board of Directors, Parsons endorsed the
application of Yoshida as Club member. While the Club’s response
does not appear in its files, it is quite apparent that Parsons
addressed a letter to Kauffman requesting that Yoshida be taken in as a
Company assignee. In his reply-letter[32] of August 29, 1964, Kauffman
explained why he cannot, under Club rules, favorably act on
Parsons’ specific request, but suggested a viable solution, as follows:cralaw:red
Reference to your letter dated August 25th, there is a hitch of
assigning the playing rights to Mr. Daikichi Yoshida, as a company
assignee.
x x x x x x x x x
The only solution that I see is that you transfer Pete Grimm’s 100
units to your name and leave the other 100 units in your name, then you
may assign the playing rights of one of the certificates for 100 units
to Mr. Yoshida. Mr. Yoshida was approved by the Board but not as a
Company assignee. (Emphasis added.)
Parsons’ response to Kauffman’s August 29, 1964 letter partly reads as follows:cralaw:red
Thank you for your letter of the 29th.
Under the circumstances, please disregard the previous letter which I wrote with reference to Pete Grimm’s and my shares.
x x x x x x x x x
As matter now stands, in summary, I shall retain in my name and
continue playing under such shares. And Pete Grimm will assign his
playing rights to Mr. Daikichi Yoshida.
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The conclusion easily deductible from the foregoing exchanges is that,
given existing Club restrictions, the simplest way to accommodate and
qualify Yoshida for Club membership was for Grimm to transfer his
100-unit share to Parsons who will then assign the playing rights of
that share to Yoshida.[33] The RTC aptly described the relevant
factual situation, viz.: chanroblesvirtualawlibrary
With these exchanges between Parsons and Kauffman, it is apparent that
since the shares held by Parsons and Grimm are individual shares and
not company shares, their shares may not be assigned. The
proposal of Parsons that “Pete Grimm will assign his playing rights to
Yoshida” was rejected by Kauffman in his letter dated September 5, 1964
[Exhibit X-5 / 27] that “Pete Grimm’s assignment to him (Yoshida)
cannot be made as the rules are that only members who holds (sic) 200
units may assign 100 units to an individual.” A letter of the same date
[Exhibit X-6 / 28] was sent by Kauffman to Mr. Yoshida informing him of
his election to the Club apologizing for the delay Kauffman wrote
further “ Mr. Charles Parsons has made arrangement for to play
(sic) as assignee of extra membership which he now holds.”chanroblesvirtualawlibrary
The election of Yoshida as assignee of a proprietary member and the
resignation of Grimm were approved by the Club’s Board on August 27,
1964. Kauffman and Parsons were still discussing the ways Mr Yoshida
can be accommodated as of September 5, 1964, but the resignation of
Grimm and election of Yoshida was already approved more
than a week before. [34] (Words in bracket in the original;
Underscoring added.)
Even on the above factual perspective alone, it is not difficult to
characterize, as did the trial court, the certificate transfer
from Grimm to Parsons, as temporary, there being no evidence whatsoever
that the transfer was for value. Such transfer was doubtless meant only
to accommodate Yoshida whose stay in the country was obviously
temporary. As it were, Yoshida’s application[35] for Club membership
juxtaposed with the August 10, 1964 endorsement- letter[36] of Parsons,
yielded the information that he (Yoshida) is the manager of the Manila
Liaison Office of Mitsubishi Shoji Kaisha desiring to acquire Company
membership in the name of his employer Mitsubishi to enable future
representatives to avail themselves of Club facilities. Since Club
membership did not seem possible at the time, Yoshida had to come in as
an assignee of a proprietary member.
Other compelling evidence attest to the temporary nature of the
transfer in question. The trial court cited two in its Decision. Wrote
that court:
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Even a witness for the (respondents) intervenor and the Parsons, Celso
Jamias, Chief Accountant of G-P and Company, confirmed that the
transfer of the share to Parsons was temporary. In a letter [Exhibit
7-GG] dated 10 August 1991 addressed to Atty. Patricia Cecilia B.
Bisda, counsel for G-P and Company, Jamais wrote:cralaw:red
“x x x please be informed that the accommodation for Mr. Yoshida to
have playing rights has not bearing on the ownership of the share. The
share of Grimm (EMG) was transferred to Mr. Charles Parsons (CP) to
accommodate Mr. Yoshida due to Manila Golf club requirements.
Atty. Patricia Cecilia B. Bisda echoed the view of Jamias, in a letter
[Exhibit Y] dated 30 August 1991 addressed to … (the) then General
Manager of the Club: She wrote:cralaw:red
“Also, we would like to
clarify that the accommodation of Mr. Yoshida to enjoy the playing
rights has no bearing to the ownership of the shares. The share of
Edward Grimm was transferred to Charles Parsons to accommodate D.
Yoshida due to club requirements.”[37]
Any lingering doubt, however, as to the temporary nature of the
Grimm-to-Parsons transfer should, in our view, be put to rest by what
MGCC records-file contained and the testimony of its former records
custodian, Romeo Alhambra. In his affidavit of May 12, 1989,[38]
Alhambra stated that “[A]ccording to Club records, the transfer of [MC]
# 580 was only temporary, and that Mr. Grimm was and, according to club
records, is in fact the owner of [MC] # 1088” and that after the
transfer, “Mr. Charles Parsons endorsed the share certificate and
turned it over to Kauffmann for safekeeping.” Forming parts of
the same records were letters both dated February 28, 1968 the day the
share certificate transfer was effected = separately submitted by
Grimm and Parsons, to inform MGCC of the temporary nature of the
transfer. In his letter, Grimm stated that MC No. 1088 “is still my
property and I wish it recorded as such in the Club’s file.”[39]
Parsons’ letter[40] was just as simple as it was revealing, thus:cralaw:red
Reference to the transfer of [MC] #590 in the name of Mr. E.M. Grimm to
my name, for which I now have the new Certification No. 1088 please be
advised that this transfer was made on a temporary basis and that said
new certificate is still the property of Mr. E.M. Grimm and I enclose
the certificate duly endorsed by me for safekeeping.
At bottom then, documented events immediately before and after the
February 28, 1968 share certificate conveyance in question veritably
confirm the trust arrangement Parsons had or intended to have with
Grimm and vice versa, vis-à-vis MC No. 1088. If, as herein
respondent G-P & Co. posits at every turn, Parsons was its trustee,
then the latter’s act of endorsing MC No. 1088 in blank and then
delivering the same to the Club for safekeeping instead of directly to
the G-P & Co. was without sense.
The trial court correctly described the relationship that was formed
between Grimm and Parsons, and the consequence of such relationship, as
follows: chanroblesvirtualawlibrary
Since the transfer of Grimm’s share to Parsons was temporary, a trust
was created with Parsons as the trustee, and Grimm, the beneficial
owner of the share. The duties of trustees have been said, in general
terms, to be: “to protect and preserve the trust property, and to
see to it that it is employed solely for the benefit of the cestui que
trust.” xxx Parsons as a mere trustee, it is not within his rights to
transfer the share to G-P and Company (sic). chanroblesvirtualawlibrary
The Court has, to be sure, considered the Letter of Trust[41] dated
September 1, 1964 largely because, in respondents’ own words, it
“provides the answer to the question of who the real owner of MC #1088
is.”[42] In the Letter he purportedly signed, Parsons declared holding
MC No. 374 and MC No. 1088 as “NOMINEE IN TRUST for and in behalf of
G-P AND COMPANY or its nominee.” This piece of document is
not, however, a winning card for the respondents. The trial court
mentioned two compelling reasons why not, both reasons bearing on the
due execution and genuineness of the document. Wrote the court:
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This “LETTER OF TRUST” was
purportedly signed by Parsons on September 1, 1964. But the transfer of
[MC] No. 590 was recorded (and MC No. 1088 issued) only on September 7,
1964 in the Club’s Proprietary Membership Card No. 144 [Exhibit 8].
With the testimony of Celso B. Jamias, a long time employee of G-P and
Company, the doubt as to the genuineness of the signature of Parsons on
the “LETTER OF TRUST” was brought to light. Jamias was cross-examined
on the signatures of Parsons on several documents including the
signature of the LETTER OF TRUST”:
Q: How about the signature appearing on Exhibit CC-1 …?
A: This is Charles Parsons, sir.
Q:- You are familiar with the signature?
A: Yes, sir.
Q: - I’m showing you Exhibit
I which is a letter of trust dated September 1, 1964, comparing those
signatures which you identified above the printed name C. Parsons there
are, two signatures, the signatures you identified earlier and the one
appearing on the letter of trust are similar in the sense that the “s”
of Parsons is elevated and it slopes down, is that correct?
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x x x x x x x x x
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A:- Based on how I see, this doesn’t seem to be the
signature of Parsons, it looks like but it is not, sir. [TSN, May 4,
1999, pp 5-6]. (Words in parenthesis added.)
And lest it be overlooked, Parsons had previously acknowledged Grimm to
be the owner of MC No. 1088, after his earlier repeated declarations
that the transfer of the replaced MC No. 580 was temporary. Parsons was
thus in contextually in estoppel to deny, thru the Letter of Trust
aforementioned, hypothetically assuming its authenticity, Grimm’s
ownership of the replacement certificate.
Summing up, the Court finds the evidence adduced and admitted by the
trial court more than adequately supporting a conclusion that MC No.
1088 was issued to and held by Parsons as the trustee thereof of Grimm
or his estate. The fact that respondent G-P & Co. may have paid,
starting 1992, as evidence discloses, the membership fees due on MC No.
1088 does not make Grimm less of a beneficial owner. Such payment,
needless to stress, is not a mode of acquiring ownership.
Parenthetically, the CA is observed to have said that in the settlement
of the estate of Parsons, MC No. 1088 was not included in the list of
stocks owned by him. And from this inconsequential event, the appellate
court would conclude that the estate administrator recognized Parsons
to be a mere trustee of such certificate. While the decision does quite
say so, the implication is that Parsons was the trustee of G -P &
Co.
We cannot agree with this non-sequitur approach which, at bottom,
clearly tends to lower the evidentiary bar for respondents. Needless to
stress, it is not for the CA and all courts for that matter to
compensate for a burden of proof not discharged or a quantum of
evidence not met.
chan robles virtual law library
The Court cannot, for two reasons, also lend cogency to the CA’s
observation that the heirs of Grimm may have had waived, abandoned or
denounced their rights to the trust property when, for P100,000.00,
they executed a Deed of Acknowledgment of Satisfaction of Partnership
Interests.[43] Firstly, the deed, as a quitclaim
instrument, did not mention any share certificate at all, which is only
logical since MC No. 1088 was not a partnership asset in the first
place. Secondly, the intention to waive a known right must be clear and
unequivocal. In this case, the intent to renounce beneficial ownership
of MC No. 1088 cannot reasonably be drawn from the tenor of the
quitclaim document. For perspective, what the heirs of Grimm stated in
the Deed of Acknowledgment is that the amount of P100,000.00 they
received “represents the total liquidation and complete settlement of
the entire partnership interests pertaining to the late Edward Miller
Grimm as partner in G-P AND COMPANY.” If, to borrow from Thompson v.
Court of Appeals,[44] we apply the standard norm on how a waiver
must be formulated, then clearly the general terms of the
aforementioned deed merely indicate a clearance from general
accountability, not specifically an abandonment of ownership of the
disputed share. For: chanroblesvirtualawlibrary
xxx. Settled is the rule
that a waiver to be valid and effective must, in the first place, be
couched in clear and unequivocal terms which leave no doubt as to the
intention of a party to give up a right or benefit which legally
pertains to him. xxx A waiver may not be attributed to a person
when the terms thereof do not explicitly and clearly evidence an intent
to abandon a right vested in such person. If we apply the standard rule
that waiver must be cast in clear and unequivocal terms, then clearly
the general terms of the cited release and quitclaim indicates merely a
clearance from general accountability, not specifically a waiver of
Amcham’s beneficial ownership of the disputed shares.[45]
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In all, the facts and circumstances attendant militate against the CA’s
finding pointing to G-P & Co. as the beneficial owner of MC No.
1088. What the evidence adduced instead proved beyond cavil is that
Grimm or his estate is such owner. We therefore
reverse.
WHEREFORE, the herein assailed decision of the Court of Appeals is REVERSED and SET ASIDE, and the Decision of the Regional Trial Court of Makati City in Civil Case No. 92-2452 is REINSTATED.
Costs against the respondents.
SO ORDERED.
Puno, J., Chairman, Sandoval-Gutierrez, Corona and Azcuna, JJ., concur.
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[1]
Per Associate Justice Eubulo G. Verzola, (ret.) concurred in by
Associate Justices
Remedios
Salazar-Fernando and Edgardo F. Sundiam; Annex “A”, Petition, Rollo,
pp. 7 et seq.
[2] Original Records, p. 2086.
[3] Sec. 6 of the
Club’s By- Laws (Exh. “U”) provides: Membership in the Club shall
consist of only the Proprietary Members. A Proprietary Member is
one owning one (1) full [MC] and who has been electedA full
[MC] shall consist of one hundred (100) units. No [MC] will be issued
for more than one hundred (100) units, but may be issued for less.
Subject to approval of the Board full Proprietary [MCs] may also
be acquired by Companies. A Company Proprietary [MC] may only be
utilized by a bona fide official of the Company chanroblesvirtualawlibrary
[4]
Per the Club’s index card #144; Exh. “7-I”, Original Records, p. 2571.
[5] Id. at 2102. chanroblesvirtualawlibrary
[6] Id. at. 2106.
[7] Id. at 2110. chanroblesvirtualawlibrary
[8] Exh. “C,” Id. at 2232.
[9]
Annex “B,” Petition; Rollo, pp. 114 et seq.
[10] Annex “D,” Petition; Id. at 142 et seq.
[11] Id. at 128 et seq.
[12]
Penned by Judge Francisco B. Ibay; Annex “R,” Petition; Id. at 797 et
seq.
[13] Supra, note 1.
[14]
MGCCI’s Comment on Petitioner’s Petition for Review, Rollo, pp. 252 et
seq.
[15]
Sampayan v. Court of Appeals, G.R. No. 156360, Jan. 14, 2005, 448
SCRA 220, citing cases. Reyes v. Court of Appeals, G.R. No.
110207, July 11, 1996, 258 SCRA 651.
[16]
Art. 1448. There is implied trust when property is sold and the legal
estate is granted to one party but the price is paid by another for the
purpose of having the beneficial interest of the property. The former
is the trustee, while the latter is the beneficiary. xxx.
[17]
Exh. “13” and submarkings; Original Records, pp. 2610 -12.
[18]
Tison v. Court of Appeals, G.R. No. 121027, July 31, 1997, 276
SCRA 582; Angeles v. Maglaya, G.R. No. 153798, September 2, 2005,
469 SCRA 363.
[19] Rule 131, Sec. 3[r], Rules of Court.
[20] CA Decision, p. 9; Rollo, p. 16.
[21] Original Records, p. 2427.
[22] RTC Decision, p. 10; Rollo, p. 2975.
[23] Id. at 2094.
[24] Id. at 2103 et seq.
[25] Comment to Petition for Review, p. 51; Id. at 140.
[26]
Tolentino, Commentaries & Jurisprudence on the Civil Code of the
Philippines, Vol. IV, 1991 ed., p. 669, citing 54 Am Jur. 21.
[27]
Art. 1441, Civil Code; Vda. De Esconde v. Courts of Appeals, G.R.
No. 103635, February 1, 1966, 253 SCRA 66.
[28] Art. 1444, Civil Code.
[29]
Valdez vs. Olarga, G.R. No. L-22571, May 25, 1973, 51 SCRA 71.
[30] Exh. “X-2”/ “24-a.”chanroblesvirtualawlibrary
[31] Exh. “X-1”/ “24,” Original Records, p. 2643.
[32] Exh. “X-3”/”25.”chanroblesvirtualawlibrary
[33]
Sec. 31 of the Club’s 1968 By- Laws provides: “A member may own
more than one (1) full Membership Certificate. The owner of more than
one (1) full Membership Certificate shall be entitled to transfer such
certificate, permanently or temporarily, to any person who has been
duly elected to membership ….
[34] RTC Decision, pp. 5-6; Rollo, pp. 801-802.
[35] Supra, note 30.
[36] Supra, note 31.
[37] Pages 6-7; Rollo, pp. 802-803.
[38] Exh. “J,” Original Records, pp. 2244-2245.
[39] Exh. “L,” Id. at 2247.
[40] Exh. “M,” Id. at 2248
[41] Exh. “7-mm.”chanroblesvirtualawlibrary
[42]
Comment to Petition for Review, p. 41; Rollo, p. 130.
[43] Exh. “3-F,” Original Records, pp. 2552 et seq.
[44] G.R. No. 116631, October 28, 1998, 298 SCRA 280.
[45] Ibid. at 293-294.
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