G.R. No. 202247 ; June 19, 2013
SIME DARBY PILIPINAS, INC., Petitioner, vs. JESUS B. MENDOZA, Respondent.

FACTS

Petitioner Sime Darby Pilipinas, Inc. (Sime Darby) employed respondent Jesus B. Mendoza as a sales manager. On July 3, 1987, Sime Darby purchased a Class “A” club share in Alabang Country Club (ACC) from Margarita de Araneta, evidenced by a Deed of Absolute Sale. Because the ACC By-Laws state that only natural persons may own a club share, the share was placed under Mendoza’s name in trust for Sime Darby. As part of this arrangement, Mendoza endorsed the Club Share Certificate in blank, executed a Deed of Assignment also in blank, and handed the documents to Sime Darby. From 1987, Sime Darby paid the monthly dues and assessments on the club share. Mendoza retired in April 1995 and received over ₱3,000,000 in separation pay from Sime Darby. In July 2004, Sime Darby found a buyer for the club share for ₱1,101,363.64. However, the broker required an authorization to sell from Mendoza since the share was still registered in his name. Mendoza refused to sign unless Sime Darby paid him ₱300,000, which he claimed represented unpaid separation benefits. The sale fell through, and Sime Darby returned the payment. On September 13, 2005, Sime Darby filed a complaint for damages with a writ of preliminary injunction against Mendoza in the Regional Trial Court (RTC) of Makati City. Sime Darby alleged that after his retirement, Mendoza resumed using the ACC facilities and requested billings be sent to his personal address, to Sime Darby’s prejudice. Mendoza, in his Answer, claimed ownership of the club share as part of his employee benefits and bonus. The RTC denied the prayer for a preliminary injunction. After trial, the RTC ruled in favor of Sime Darby, enjoining Mendoza from using the share and ordering him to pay damages and attorney’s fees. The Court of Appeals reversed the RTC decision, dismissing the complaint and declaring Mendoza the owner of the club share. Sime Darby filed the instant petition.

ISSUE

1. Whether Sime Darby is entitled to damages and injunctive relief against Mendoza.
2. Whether the appellate court erred in declaring Mendoza the owner of the club share.

RULING

The petition has merit. The Supreme Court reversed the Court of Appeals decision and reinstated the RTC decision with modification.
On the first issue, the Court held that Sime Darby established a clear and unmistakable right to be protected, satisfying the requisites for injunctive relief. The evidence showed Sime Darby purchased the club share, paid all dues since 1987, and Mendoza held the share in trust. His refusal to authorize the sale and his resumption of using the club facilities after retirement constituted a violation of Sime Darby’s rights, necessitating the injunction to prevent serious damage.
On the second issue, the Court ruled that the appellate court erred in declaring Mendoza the owner. The evidence, including the Deed of Sale, blank endorsements, and consistent payment of dues by Sime Darby, conclusively established that Sime Darby was the beneficial owner. Mendoza held the share merely as a trustee due to ACC’s By-Laws prohibiting corporate ownership. His claim of ownership as part of employment benefits was unsupported by evidence. Therefore, Sime Darby is the true owner of the club share. The Court affirmed the award of temperate damages and attorney’s fees but deleted the award for litigation expenses due to lack of substantiation.