3B CORPO Digests

Marsh Thomson v. Court of Appeals and The Marsh Thomson was the Executive VP then later
American Chamber of Commerce of the Management Consultant of American Chamber
Philippines, Inc. of Commerce of the Philippines (AmCham) for
October 28, 1998 over ten years.
G.R. No. 116631 Ponente: Quisumbing, J.
While Thomson was still working for AmCham,
Related Article: Tickler: Stockholder’s right his superior, A. Lewis Burridge, retired as
to transfer shares president and wanted to transfer his proprietary
share in Manila Polo Club (MPC) to Thomson.
AmCham paid for the shares but it was listed in
Doctrine of the Case Thomson’s name as evidenced in an employment
AmCham does not insist nor intend to transfer the advice.
club membership in its name but to its designated
nominee. The Manila Polo Club does not Burridge transfer said share to Thomson as
necessarily prohibit the transfer of proprietary confirmed in a letter of notification to MPC.
shares by its members. The Club only restricts Thomson paid P40,000 from his own funds for the
membership to deserving applicants in transfer fee but he was reimbursed by AmCham.
accordance with its rules, when the amended MPC then issued a membership certificate in
Articles of Incorporation states that: "No transfer favor of Thomson but Thomson failed to execute
shall be valid except between the parties, and a document recognizing AmCham’s beneficial
shall be registered in the Membership Book ownership of the share.
unless made in accordance with these Articles
and the By-Laws". Thus, as between parties Following an annual renewal of employment
herein, there is no question that a transfer is contract, Thomson still had not acknowledge
feasible. Moreover, authority granted to a AmCham as the beneficial owner of the MPC
corporation to regulate the transfer of its stock share.
does not empower it to restrict the right of a
stockholder to transfer his shares, but merely When Thomson’s employment contract was up
authorizes the adoption of regulations as to the for renewal again, he notified AmCham that he
formalities and procedure to be followed in would be accepting a consultancy arrangement
effecting transfer. and asked to retain his MPC share which
AmCham denied.
In this case, Thomson was the nominee of the
private respondent to hold the share and enjoy AmCham executed a Release and Quitclaim
the privileges of the club. But upon the expiration against Thomson. Said quitclaim did not mention
of petitioner's employment as officer and the MPC share. Then AmCham demanded from
consultant of AmCham, the incentives that go Thomson the return and delivery of the MPC
with the position, including use of the MPC share, share. After failing to get a favorable reply,
also ceased to exist. It now behooves petitioner AmCham filed a complaint against Thomson for
to surrender said share to private respondent's the return of the said share.
next nominee, another natural person. Obviously
this arrangement of trust and confidence cannot RTC ruling:
be defeated by the petitioner's citation of the MPC In favor of Thomson on the ground that the
rules to shield his untenable position, without Articles of Incorporation and By-Laws of MPC
doing violence to basic tenets of justice and fair prohibit corporations to be club members.
dealing.
CA ruling:
Reversed.
Facts
 3B CORPO Digests

he who pays for a thing intends a beneficial

Issue/s interest therein for himself.
1. Whether or not AmCham is beneficial
owner of the MPC share. Although Thomson initiated the acquisition of the
2. Whether or not Thomson should transfer share, evidence on record shows that AmCham
the MPC share to AmCham’s nominee. acquired said share with its funds. Thomson did
3. Whether or not the rights of the parties to not pay for said share, although he later wanted
the trust still subsist. to, but according to his own terms, particularly the
price thereof.

Ruling AmCham’s evident purpose in acquiring the

First issue: YES share was to provide additional incentive and
perks to its chosen executive, Thomson himself.
AmCham is the beneficial owner of the MPC Such intention was repeated in the yearly
share. The beneficiary of a trust has beneficial employment advice prepared by AmCham for
interest in the trust property, while a creditor has Thomson's concurrence.
merely a personal claim against the debtor. In
trust, there is a fiduciary relation between a Thomson voluntarily affixed his signature to
trustee and a beneficiary, but there is no such conform with the employment advice, including
relation between a debtor and creditor. While a his obligation stated therein — for him to execute
debt implies merely an obligation to pay a certain the necessary document to recognize his
sum of money, a trust refers to a duty to deal employer as the beneficial owner of the MPC
with a specific property for the benefit of share. Thus, Thomson cannot claim otherwise.
another. If a creditor-debtor relationship exists,
but not a fiduciary relationship between the AmCham’s intention to hold on to its
parties, there is no express trust. However, it is beneficial ownership is not only presumed; it
understood that when the purported trustee of was expressed in writing at the very outset.
funds is entitled to use them as his or her own Although the share was placed in the name of
(and commingle them with his or her own money), petitioner, his title is limited to the usufruct, that
a debtor-creditor relationship exists, not a trust. is, to enjoy the facilities and privileges of the
membership in the club appertaining to the share.
In this case, as the Executive Vice-President of Such arrangement reflects a trust relationship
AmCham, Thomson occupied a fiduciary position governed by law and equity.
in the business of Amcham. AmCham released
the funds to acquire a share in the Club for the Moreover, AmCham did not waive its
use of petitioner but obliged him to "execute such beneficial ownership over the share by
document as necessary to acknowledge issuing a Release and Quitclaim. The quitclaim
beneficial ownership thereof by the Chamber". A executed by private respondent does not clearly
trust relationship is, therefore, manifestly show the intent to include therein the ownership
indicated. over the MPC share. Settled is the rule that a
waiver to be valid and effective must, in the first
Moreover, Thomson failed to present evidence to place, be couched in clear and unequivocal terms
support his allegation of being merely a debtor which leave no doubt as to the intention of a party
when the private respondent paid the purchase to give up a right or benefit which legally pertains
price of the MPC share. Applicable here is the to him. A waiver may not be attributed to a person
rule that a trust arises in favor of one who pays when the terms thereof do not explicitly and
the purchase money of property in the name clearly evidence an intent to abandon a right
of another, because of the presumption that vested in such person.
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Second issue: YES disavowal is brought home to the other party,

"cestui que trust". The statute of limitations runs
AmCham does not insist nor intend to transfer the generally from the time when the act was done by
club membership in its name but to its designated which the party became chargeable as a trustee
nominee. The Manila Polo Club does not by operation of law or when the beneficiary knew
necessarily prohibit the transfer of proprietary that he had a cause of action, in the absence of
shares by its members. The Club only restricts fraud or concealment.
membership to deserving applicants in
accordance with its rules, when the amended In this case, there was no declared or explicit
Articles of Incorporation states that: "No transfer repudiation of the trust existing between the
shall be valid except between the parties, and parties. Such repudiation could only be inferred
shall be registered in the Membership Book as evident when the petitioner showed his intent
unless made in accordance with these Articles to appropriate the MPC share for himself.
and the By-Laws". Thus, as between parties Specifically, this happened when he requested to
herein, there is no question that a transfer is retain the MPC share upon his reimbursing the
feasible. Moreover, authority granted to a purchase price of P110,000, a request denied
corporation to regulate the transfer of its stock promptly by private respondent. Eventually,
does not empower it to restrict the right of a petitioner refused to surrender the share despite
stockholder to transfer his shares, but merely the written demand of private respondent. This
authorizes the adoption of regulations as to the act could then be construed as repudiation of the
formalities and procedure to be followed in trust.
effecting transfer.
The statute of limitation could start to set in at this
In this case, Thomson was the nominee of the point in time. But private respondent took
private respondent to hold the share and enjoy immediate positive action. Thus, on May 15,
the privileges of the club. But upon the 1990, private respondent filed an action to
expiration of petitioner's employment as recover the MPC share. Between the time of
officer and consultant of AmCham, the implicit repudiation of me trust on October 9,
incentives that go with the position, including 1989, as evidenced by petitioner's letter of said
use of the MPC share, also ceased to exist. It date, and private respondent's institution of the
now behooves petitioner to surrender said share action to recover the MPC share on May 15,
to private respondent's next nominee, another 1990, only about seven months had lapsed. Our
natural person. Obviously this arrangement of laws on the matter provide that actions to recover
trust and confidence cannot be defeated by the movables shall prescribe eight years from the
petitioner's citation of the MPC rules to shield his time the possession thereof is lost, unless the
untenable position, without doing violence to possessor has acquired the ownership by
basic tenets of justice and fair dealing. prescription for a period of four years if in good
faith. Since the private respondent filed the
Third issue: NO necessary action on time and the defense of good
faith is not available to the petitioner, there is no
It has been held that so long as there has been basis for any purported claim of prescription, after
no denial or repudiation of the trust, the repudiation of the trust, which will entitle petitioner
possession of the trustee of express and to ownership of the disputed share. As correctly
continuing trust is presumed to be that of the held by the respondent court, petitioner has the
beneficiary, and the statute of limitations does not obligation to transfer now said share to the
run between them. With regard to a constructive nominee of private respondent.
or a resulting trust, the statute of limitations does
not begin to run until the trustee clearly
repudiates or disavows the trust and such Disposition:
 3B CORPO Digests

WHEREFORE, the Petition for Review on

Certiorari is DENIED. The Decision of the Court
of Appeals of May 19, 1994, is AFFIRMED.