G.R. No. 17131; June 30, 1922
Sing Juco and Sing Bengco, plaintiffs-appellees, vs. Antonio Sunyantong and his wife Vicenta Llorente de Sunyantong, defendants-appellants.

FACTS

Plaintiffs Sing Juco and Sing Bengco held a written option, later verbally extended, to purchase the “San Antonio Estate” from Maria Gay, expiring at noon on June 17, 1919. Defendant Antonio Sunyantong was their trusted employee. On the morning of the option’s expiration, Sunyantong went to Maria Gay and offered to buy the estate for his wife, the co-defendant. Gay then contacted the plaintiffs’ broker, insisting on an immediate decision. One plaintiff, Sing Bengco, responded with the ambiguous phrase “ella cuidado” (similar to “she could do as she pleased”). Interpreting this as a waiver, Gay sold the estate to Sunyantong. The plaintiffs sued, alleging Sunyantong’s infidelity as their employee caused them to lose the purchase.

ISSUE

Whether the defendant-employee, Antonio Sunyantong, can be compelled to transfer the property he acquired to his employers, the plaintiffs, due to his breach of fiduciary duty.

RULING

Yes. The Supreme Court affirmed the lower court’s judgment ordering the defendants to transfer the property to the plaintiffs. The Court found Sunyantong acted with infidelity and disloyalty to his employers. By intervening to purchase the property for himself, he caused the premature end of the plaintiffs’ option and deprived them of the opportunity to complete the purchase. This constituted an illicit act under the Civil Code, making him liable for damages. Furthermore, applying principles of equity and trust, the property acquired by a disloyal employee in breach of his duty is deemed held in trust for the principal. Therefore, the specific relief of compelling a conveyance of the property is proper, as recognized in prior jurisprudence like Camacho vs. Municipality of Baliuag. The dissenting opinion argued that no trust was proven since the defendants did not use the plaintiffs’ funds, but the majority held the breach of fiduciary duty itself justified the remedy.