G.R. No. L-29746 November 26, 1973
INTESTATE ESTATE OF THE LATE EMILIO CAMON. CONCEPCION EREÑETA, administratrix-appellee, vs. IGNATIUS HENRY BEZORE, ELWOOD KNICKERBOCKER, and MARY IRENE FALLON MCCORMICK, claimants-appellants.

FACTS

The claimants-appellants, as heirs of Thomas Fallon, owned a one-half pro-indiviso share in Hacienda Rosario, which was leased to Emilio Camon. Upon Camon’s death, the appellants filed a claim against his estate for P64,165, representing the value of sugar allotments and palay rentals from their share, which Camon had allegedly appropriated. The administratrix of Camon’s estate opposed the claim, presenting three key documents. These were an “Agreement to Sell” the appellants’ share to co-owners Amparo Sta. Romana and Alberta vda. de Hopon; a “Release and Waiver of Claims” where these co-owners, out of gratitude, waived all accrued claims against Camon pertaining to the share to be sold; and a subsequent “Deed of Sale” where the appellants sold their share, including all rights “accrued or accruing.”
The lower court dismissed the appellants’ claim. It held that the clear terms of the Deed of Sale encompassed all accrued benefits, including the sugar allotments. The appellants appealed, arguing the phrase “accrued or accruing” was ambiguous and should not include the allotments. They also contended that Camon’s continued cultivation of the hacienda after the original lease expired created an express trust in their favor, obligating him to account for the proceeds.

ISSUE

The primary issues were: (1) whether the sugar allotments and allowances were included in the sale of the appellants’ share under the term “accrued or accruing”; and (2) whether an express trust was created when Camon continued to cultivate the land after the lease contract expired.

RULING

The Supreme Court affirmed the dismissal of the claim. On the first issue, the Court ruled that the terms of the Deed of Sale were clear and left no doubt as to the parties’ intention. The phrase “all their rights, title, interest and participation… whether accrued or accruing” was positive and categorical. Applying Article 1370 of the Civil Code, the literal meaning of these clear stipulations controlled. The Court found no ambiguity requiring interpretation, rejecting the appellants’ arguments about the cheap price or alleged representations by the vendees, as these did not invalidate the clear written terms.
On the second issue, the Court held that no express trust was created. Camon’s continued cultivation of the hacienda after the lease term, with the owners’ acquiescence, merely gave rise to an implied new lease under Article 1670 of the Civil Code, reviving the terms of the original contract. This did not establish the fiduciary relationship essential for a trust. Furthermore, an express trust over an immovable property requires a written instrument, which was absent. Thus, the juridical relationship remained that of lessor and lessee, not trustee and beneficiary. The order of the lower court was affirmed.