GR 116631; (October, 1998) (Digest)
G.R. No. 116631 October 28, 1998
MARSH THOMSON, petitioner, vs. COURT OF APPEALS and THE AMERICAN CHAMBER OF COMMERCE OF THE PHILIPPINES, INC., respondents.
FACTS
Petitioner Marsh Thomson was an executive of private respondent American Chamber of Commerce of the Philippines, Inc. (AmCham). Through the intercession of a retiring superior, AmCham paid for a proprietary share in the Manila Polo Club (MPC) to be used by Thomson, but the share was listed in Thomson’s name. An employment advice dated January 13, 1986, stated AmCham’s willingness to acquire the membership for Thomson’s use, provided that “if the membership is acquired in your name, you would execute such documents as necessary to acknowledge beneficial ownership thereof by the Chamber.” Thomson paid the transfer fee, which was later reimbursed by AmCham. MPC issued Proprietary Membership Certificate No. 3398 in Thomson’s name, but he failed to execute the document acknowledging AmCham’s beneficial ownership. Subsequent employment advice letters reiterated this requirement. When Thomson’s employment ended in 1989, he proposed to retain the Polo Club share by reimbursing its purchase price, but AmCham rejected this. AmCham executed a Release and Quitclaim in favor of Thomson, which did not specifically mention the MPC share. Later, AmCham demanded the return of the share and, upon Thomson’s refusal, filed a complaint to recover it. The Regional Trial Court ruled in favor of Thomson, citing the MPC’s Articles of Incorporation and By-laws which prohibit corporations from being members. The Court of Appeals reversed this decision, ordering Thomson to transfer the share to AmCham’s nominee.
ISSUE
1. Did the Court of Appeals err in holding that private respondent AmCham is the beneficial owner of the disputed MPC share?
2. Did the Court of Appeals err in ordering petitioner Thomson to transfer said share to private respondent’s nominee?
RULING
1. No. The Supreme Court affirmed the Court of Appeals’ finding that AmCham is the beneficial owner. The transaction created an express trust, not a debt. The employment advice letters constituted the trust agreement, whereby Thomson (as trustee) held legal title for the benefit of AmCham (as beneficiary). Thomson’s conformity to these terms, his offer to buy the share from AmCham upon employment termination, his obligation to return it per a consultancy contract, and his admission in signing AmCham’s tax return that listed the share as a corporate asset, all evidenced AmCham’s beneficial ownership. The Release and Quitclaim, being general in terms and not specifically mentioning the share, did not extinguish AmCham’s ownership.
2. No. The Supreme Court held the order for Thomson to transfer the share to AmCham’s nominee was correct. The prohibition in the MPC’s Articles against corporate membership does not invalidate the trust or prevent the transfer of the share to a human nominee of the corporate beneficiary. A corporation can own property through a trustee, and the beneficiary of a trust can enforce the trust and compel the trustee to convey the property to its nominee. The action to recover the share was filed within the prescriptive period after Thomson’s repudiation of the trust. Therefore, the petition was denied, and the Decision of the Court of Appeals was affirmed.