G.R. No. 102657 August 9, 1993
FELICIANO NITO, petitioner, vs. COURT OF APPEALS, CONRADO VILLARAMA, AGRICULTURAL CREDIT ADMINISTRATION/LAND BANK, CANDIDO MILAN and Sps. RENATO & ANGELITA S. CARLOS, respondents.

FACTS

The Agricultural Credit Administration (ACA), now Land Bank, owned three parcels of land in Bulacan. Petitioner Feliciano Nito used to lease a portion. When the lease expired, ACA scheduled a public bidding for the sale of the properties on March 22, 1979. Several interested individuals, including petitioner, formed a group to deal with ACA, as ACA did not deal with individuals. The group appointed private respondent Conrado Villarama as their representative and pooled funds for a P133,000.00 bid bond. Petitioner was included in the group due to his occupancy but did not contribute to the bid bond. Villarama was the sole bidder at the public bidding and was advised to negotiate directly with ACA. The group formalized their alliance in a manifesto, authorizing Villarama to negotiate; petitioner was not a signatory. On September 10, 1979, petitioner gave Villarama a P10,000.00 cash deposit. Villarama and ACA agreed on a purchase price of P1,600,000.00, payable in full on or before March 16, 1982, with the cash deposit subject to forfeiture as liquidated damages if unpaid. The group’s counsel sent petitioner a letter dated March 8, 1982, demanding full payment for his allotted lot and warning that failure to pay would be construed as lack of interest, compelling the group to find a substitute buyer. Petitioner did not attend the group’s meeting on March 16, 1982, nor did he pay his share, insisting he wanted a lot with a 32-meter frontage instead of the offered 12-meter frontage. He instead tendered P125,000.00 directly to ACA, which refused and told him to pay Villarama. ACA extended the payment deadline to March 17, 1982. On the evening of March 16, 1982, the group, through Villarama, offered petitioner’s allotted 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.; when he failed to appear, they used Milan’s money to complete the payment. ACA then issued a Deed of Sale to Villarama, who subsequently caused the issuance of deeds of sale and certificates of title to the individual buyers, including Milan. Petitioner filed a complaint for reconveyance with damages, alleging fraud and breach of trust. The Regional Trial Court dismissed the complaint, ordering Milan to reimburse petitioner’s P10,000.00 deposit with interest and petitioner to vacate the premises. The Court of Appeals affirmed the decision in toto.

ISSUE

Whether an implied or resulting trust was created under Article 1452 of the Civil Code in favor of petitioner, making him a co-purchaser or co-owner entitled to reconveyance of the property, despite his failure to pay his full share by the agreed deadline.

RULING

No. The Supreme Court denied the petition and affirmed the decision of the Court of Appeals. Article 1452 of the Civil Code requires two concurring requisites for an implied or resulting trust: (1) two or more persons agree to purchase property, and (2) they consent that one should take the legal title in his name for the benefit of all. The evidence did not show petitioner agreed to join the group’s purchase agreement. He did not contribute to the bid bond, did not sign the manifesto formalizing the group, and rejected the group’s offer due to a disagreement over the lot’s frontage, preferring to negotiate directly with ACA. His P10,000.00 deposit was conditioned on being allotted a lot with a 32-meter frontage, which the group did not agree to. Petitioner was formally notified via a letter received by his wife to pay his full share by the deadline, with a warning that failure would lead the group to find a substitute. His non-payment jeopardized the entire sale, risking cancellation and forfeiture of the group’s deposit. The group’s recourse to substitute Milan as buyer was necessary to consummate the sale. Petitioner’s failure to pay constituted a waiver of his right to purchase the allotted lot. Thus, no trust was created in his favor under Article 1452.