G.R. No. 116631 - Thomson vs. Court of Appeals

Case Summary (G.R. No. 116631)

Procedural History

The Makati Regional Trial Court (Branch 65) ruled in favor of petitioner, adjudging ownership of the MPC share to him but ordering him to pay AmCham P300,000; the trial court rested its ownership ruling on the Club’s Articles and By‑Laws which, it found, prohibited corporate membership so AmCham could not be the registered owner. AmCham appealed; the Court of Appeals reversed and ordered Thomson to transfer the share to AmCham’s nominee. Petitioner sought review with the Supreme Court, raising errors concerning (1) retention of ownership by petitioner, (2) the effect of the September 29, 1989 Release and Quitclaim, and (3) AmCham’s capacity to hold the share and/or to demand its transfer given MPC rules.

Issues Presented

Whether the Court of Appeals erred in finding AmCham to be the beneficial owner of the disputed MPC share (i.e., whether the relationship was trust/resulting trust or merely a debtor‑creditor relationship).
Whether the Court of Appeals erred in ordering petitioner to transfer the share to AmCham’s nominee, given MPC’s Articles and By‑Laws limiting corporate membership and AmCham’s corporate powers.
Whether the September 29, 1989 Release and Quitclaim operated as a waiver or extinguishment of AmCham’s beneficial ownership.

Legal Principles Employed

Trust versus debt: A trust implies fiduciary duties with beneficial interest in specific property for another; a debt implies a mere personal obligation to pay money without fiduciary duties. A resulting trust is presumed where one person pays the purchase price and property is taken in another’s name, absent proof of contrary intention.
Burden of proof: Once a resulting trust is presumed (purchaser’s funds used for property taken in another’s name), the transferee bears the burden to show that no trust was intended (i.e., that the transaction was a loan or gift).
Evidence and credibility: Determination of intent is factual and rests heavily on witness credibility; unsubstantiated denials are insufficient to overcome a presumption of trust.
Waiver: A waiver must be clear and unequivocal; general releases in broad language do not necessarily evidence relinquishment of a specific identified right unless the intent to abandon that right is shown clearly and convincingly.
Club/by‑laws and transferability: Corporations or the club may regulate transfers and impose formalities, but rules cannot nullify the right of a party to transfer shares between private parties; prohibition against corporate membership does not preclude transfer to a natural‑person nominee.
Prescription/statute of limitations: A beneficiary’s action to recover trust property is not barred so long as there has been no clear repudiation of the trust; prescription for recovery of movables generally prescribes in eight years (four years in good faith) from loss of possession, but does not run while the trustee’s possession is consistent with the trust until repudiation is made clear and brought home to the beneficiary.

Analysis — Existence of a Trust and Beneficial Ownership

The Court characterized petitioner’s relationship with AmCham as fiduciary and found a resulting trust in AmCham’s favor. AmCham had paid the purchase price and expressly required petitioner to acknowledge its beneficial ownership in written employment advices. The presumption of resulting trust (one who pays but title is taken in another’s name intends beneficial interest for himself) applied; once that presumption arose, the burden shifted to petitioner to prove it was merely an advance or loan. The Court found petitioner’s testimony insufficient to overcome the presumption: he offered no written advance agreements, described repayment terms as merely verbal and uncertain, and admitted facts inconsistent with his claim of sole ownership. The Court emphasized that uncorroborated denials lack probative force and that intent is a factual matter that the trial court is best positioned to resolve. Consequently, the Supreme Court found no reversible error in the Court of Appeals’ conclusion that AmCham was the beneficial owner.

Analysis — Effect of the Release and Quitclaim

The Court addressed petitioner’s contention that AmCham’s September 29, 1989 Release and Quitclaim extinguished AmCham’s right to reclaim the share. The Court applied the rule that waiver must be clear and unequivocal; general releases which do not specifically reference the right in question do not necessarily constitute surrender of that right. The Quitclaim’s broad language was interpreted as a general clearance from claims, not as an express abandonment of AmCham’s beneficial title to a specific asset. The Court required clear and convincing proof of intent to waive a particular right and found none here; therefore the Quitclaim did not defeat AmCham’s claim.

Analysis — Transfer to AmCham’s Nominee and MPC Bylaws

Petitioner argued that MPC’s Articles and By‑Laws precluded AmCham, an artificial person, from owning a proprietary share and thus AmCham could not demand transfer. The Court distinguished between transfer to AmCham itself (which could raise an issue) and transfer to AmCham’s designated nominee, who would be a natural person. The Court noted that MPC’s rules allow transfers to be registered if made in accordance with the Articles and By‑Laws, and a corporation’s authority to regulate transfer formalities does not empower it to completely bar transfers between

Case Syllabus (G.R. No. 116631)

Case Caption, Source and Decision

Supreme Court First Division, G.R. No. 116631; decision promulgated October 28, 1998 (reported at 358 Phil. 761).
Petition for review on certiorari by Marsh Thomson (petitioner) seeking reversal of the Court of Appeals decision of May 19, 1994 (CA-G.R. CV No. 38417) which ordered petitioner to transfer a Manila Polo Club (MPC) proprietary share to the nominee of private respondent, the American Chamber of Commerce of the Philippines, Inc. (AmCham).
Final disposition: Petition denied; Court of Appeals decision of May 19, 1994 affirmed; costs against petitioner. Opinion by Justice Quisumbing; concurred in by Justices Davide, Jr. (Chairman), Vitug, and Panganiban; Justice Bellosillo was on official leave.

Parties, Relationship and Roles

Petitioner: J. Marsh Thomson — Executive Vice-President (later Management Consultant) of AmCham from 1979 to 1989.
Private respondent: The American Chamber of Commerce of the Philippines, Inc. (AmCham) — petitioner’s employer and the party asserting beneficial ownership of an MPC proprietary share.
Third party in records: Manila Polo Club (MPC) — issuer of Proprietary Membership Certificate No. 3398.
Relationship: Employer-employee and fiduciary context — petitioner occupied a fiduciary position within AmCham as Executive Vice-President prior to consultancy arrangement.

Factual Background — Acquisition and Registration of the MPC Share

A. Lewis Burridge, retiring AmCham president, intended to transfer his MPC proprietary share to petitioner; through Burridge’s intercession AmCham paid for the share but caused it to be listed in petitioner’s name.
Employment advice dated January 13, 1986 informed petitioner AmCham was willing to acquire for his use an MPC membership; all dues and charges would be for petitioner’s personal account; if acquired in petitioner’s name, he would execute documents acknowledging beneficial ownership by AmCham.
On April 25, 1986 Burridge transferred the proprietary share to petitioner (notification letter annexed as Exhibit L).
Upon admission as a new MPC member, petitioner paid a P40,000 transfer fee from his funds; AmCham later reimbursed that amount.
MPC issued Proprietary Membership Certificate No. 3398 in favor of petitioner on November 19, 1986.
Petitioner did not execute the document recognizing AmCham’s beneficial ownership despite repeated requests and inclusion of the arrangement in subsequent employment advice letters (October 1, 1986; March 4, 1988; January 7, 1989).

Subsequent Employment Negotiations, Counter-Proposal and Quitclaim

When petitioner’s employment contract approached renewal in 1989, petitioner notified AmCham he would not be available as Executive Vice-President after September 30, 1989; AmCham requested a six-month consultancy extension.
Petitioner’s counter-proposal dated October 8, 1989 included a provision: retention of the Polo Club share subject to petitioner reimbursing AmCham either the purchase price or P110,000.
AmCham rejected the counter-proposal.
AmCham executed a Release and Quitclaim dated September 29, 1989, stating it released and discharged petitioner from "any and all existing claims" against him; the quitclaim did not mention the MPC share specifically and was expressed in general terms.

Demand, Litigation and Trial Court Ruling

AmCham, through counsel, demanded return of the MPC share by letter dated April 5, 1990, asserting AmCham "owns and placed in your name" the share.
AmCham filed a complaint on May 15, 1990 praying that Thomson return and transfer the MPC share to AmCham’s nominee.
The Makati Regional Trial Court rendered judgment on February 28, 1992 adjudicating ownership of the contested MPC share in favor of defendant (petitioner) and ordering defendant to pay plaintiff P300,000.00; the trial court reasoned AmCham, as a corporation, could not be a club member under MPC Articles and By-laws and thus petitioner could not be compelled to transfer.
Trial court found parties’ intention was that AmCham secure the membership for petitioner’s use and that petitioner was to acknowledge AmCham’s beneficial ownership, but concluded MPC rules prohibiting artificial persons from membership precluded transfer back to AmCham.

Court of Appeals Ruling and Reasoning

On May 19, 1994, the Court of Appeals reversed the trial court and ordered petitioner to transfer the MPC share to AmCham’s nominee.
CA’s key findings:
- AmCham purchased the share for petitioner’s use and petitioner “expressly conformed” to that arrangement as shown in various exhibits (A-1, B, B-1, C, C-1, D, D-1), creating contractual obligations.
- Petitioner had conceded AmCham’s ownership by (1) offering to buy the share from AmCham upon employment termination (Exhs. E and E-1), (2) obliging himself to return the share after the consultancy unless earlier requested in writing (Exh. I), and (3) admitting on cross-examination that the proprietary share appeared as an asset in AmCham’s 1988 corporate income tax return which petitioner signed as Executive Vice-President.
- Transfer to AmCham’s nominee would not violate MPC By-laws since the nominee would be a natural person; any MPC disapproval of transfer should be addressed when and if MPC disapproves.

Issues Presented to the Supreme Court

Whether the Court of Appeals erred in holding AmCham the beneficial owner of the MPC share (i.e., whether a trust rather than a debt existed).
Whether the Court of Appeals erred in ordering petitioner to transfer the share to AmCham’s nominee.
Additional grounds raised by petitioner in his petition:
- That the Quitclaim of September 29, 1989 effected waiver of AmCham’s claims and/or supersed
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