oblicon 1139-1155

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Obligations and Contracts 1139-1155

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Tan vs. Court of Appeals

This is a petition to review the decision as well as the resolution of the Court of Appeals which affirmed the order dated J1989 of the Regional Trial Court of Quezon City, Branch 88 in Civil Case No. Q-89-2357 convicting petitioners Julia L. TJames L. Tan of indirect contempt and sentencing each of them to suffer a penalty of imprisonment of ten (10) days and tfine of P500.00 each.

Petitioner Julia L. Tan is an 84 year old widow who is the Principal of Grace Christian High School offering both element

secondary courses while petitioner James L. Tan is the Administrative Consultant of the school.

This case arose from the refusal of the petitioners to admit and enroll certain students for the school year 1987-1988 bheated controversies, acts of misbehavior, and a refusal to dialogue with the school administration led the school authobelieve that it would be best for all concerned if these children enrolled in other schools.

Two separate petitions for mandamuswith prayers for preliminary mandatory injunction were eventually filed with the RTrial Court of Quezon City. The first case docketed as Civil Case No. Q-51039 was assigned to Branch 79 of the cousecond case which led to the present petition was docketed as Civil Case No. Q-89-2357 and was assigned to Branch 8latter case was filed by Vicente Luy and his daughter Vonette Luy, who were also petitioners in Civil Case No. Q-51039.

On July 1, 1987, Branch 79 in Civil Case No. Q-51039 issued an order granting the issuance of a writ of preliminary inju

The school and the petitioners were ordered to allow enrollment of the subject children.

While the two cases were pending in court, the children were enrolled and continued their studies. During the enrollment pMay, 1989, however, the petitioners refused the enrollment in the first year high school of Carmella Ang See, Michael RobeKaren Gay Dipasupil and Vonette Luy on the ground that the school was under no legal duty to still accept them in the highafter graduating them from the elementary course.

On May 23, 1989, Vicente Luy (father of Vonette Luy) together with other parents Josefina Ang, Teresita Ang See and TDipasupil filed in Branch 79, a motion to hold in indirect contempt the petitioners for refusing to enroll their children in disobedience of the writ of preliminary injunction issued on July 1, 1987.

On May 25, 1989, Branch 88 issued an order in the second case granting the prayer for the issuance of the writ of premandatory injunction and ordering the petitioners to enroll Vonette Luy in the first year high school.

In the meantime, the herein petitioners challenged in the Court of Appeals (CA-G.R. SP No. 13179) the order granting the wpreliminary mandatory injunction by Branch 79.

On June 26, 1989, the Court of Appeals set aside the order prompting the respondents to file a petition forcertiorariwith case was docketed as G.R. No. 90063.

In a resolution dated December 12, 1989, we dismissed the petition for lack of merit and resolved "that . . . the childreaffected shall be allowed to finish the current school year (including the summer term if any), as the questioned order of thof Appeals shall take effect only as of the beginning of school year 1990-1991."

Meanwhile, the case in Branch 88 continued its independent course. Thus, on June 16, 1989, the trial court upon mo

Vicente Luy issued the questioned order. This order is now challenged by the petitioners in this case.

The facts of the controversy which led to the two cases against the petitioners are stated in this Court's Resolution in G.90063, "Yap Chin Fah, et al. v. Court of Appeals, et al.", December 12, 1989 as follows:

Sometime in 1986, private respondent Grace Christian High School ("Grace Christian") applied with the then MinEducation, Culture and Sports (MECS) for a tuition-fee increase of fifteen percent (15%) for the School Year (SY) 1986-87. respondent Grace Christian had applied for, and been granted, yearly increments in tuition fees from SY 1973-74 (except1983-84) until SY 1985-1986. On 18 December 1986, Grace Christian received a notice from the MECS that its fee-inapplication had been definitely approved on 10 November 1986.

Meanwhile, a group of parents whose children are enrolled in Grace Christian, allegedly alarmed by what they perceived todeterioration despite the periodic fee increases in academic standards and physical facilities of the school, form

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Grace Christian High School Parents-Teachers Association ("Association"). The Association, composed of a majorityparents (despite its name, no faculty member sits on the executive committee) demanded: (a) recognition as an organizati(b) representation in Grace Christian's policy-making process, viz., faculty selection and improvement of the physicaFeeling that their demands had been largely ignored, the Association in October 1985 asked for a formal dialogue with theadministration. During a heated exchange in this dialogue, one of the petitioners herein, William Tiu, stood up and pointed aand shouted at Grace Christian's vice-principal, and later spat on the latter.

On 23 September 1986, Grace Christian had been granted provisional authority by the MECS to impose a fifteen percen

increase in tuition fee for SY 1986-1987. Thereupon, some of the above-mentioned group of parents lobbied with thparents urging non-payment of the fee increase. During the enrollment period for the second semester of SY 1986-number of parents, among them petitioners (comprising nine [9] members or officers of the 19 member executive commthe Association) refused to pay the incremental fee: Grace Christian in turn refused to receive these parents' payment of (i.e., the fee before the fifteen [15%] increase) tuition fee for that semester. On 16 December 1986, Grace Christian reminparents about the payment of the approved increased tuition fee for the second semester.

From 23 February to 5 March 1987, a group of parents, petitioners included, staged a rally outside the school gates. Bannplacards critical of the school administration were set up. The latent animosity between the Association (or some mthereof) and Grace Christian began to flare up. Petitioners first came out with statements in the print and broadcastattacking Grace Christian's periodic fee increases and allegedly deteriorating academic standards. Some of the petitionerswith video-cameras, forced their way into the school premises and interrupted a class in session, urging students therein to using the allotted class hour against school policies. Some of the students walked out of their classrooms to jo

parents in the rally outside.

On 27 February 1987, the Association through a letter asked Secretary Quisumbing of the Department of Education, CultuSports (DECS) to reconsider the 23 September 1986 (as well as the 10 November 1986) order granting the school's appfor a fee increase. On 12 March 1987, the Association obtained a "freeze-order" from the DECS, enjoining Grace Christiaimposing the already approved fifteen percent (15%) fee increase, until the DECS shall have received proof that sixty p(60%) of the increase had been apportioned to salaries of Grace Christian's faculty. After submission by Grace Christian of payment of salary increases to the faculty, the DECS in an Indorsement dated 16 March 1987 lifted the "freeze-order," allowing the school to resume collection of the fifteen percent (15%) fee increase.

Meanwhile, the already adversarial relationship between Grace Christian and the Association further deteriorated when theadministrators overheard several of the Prep (pre-school) students chanting slogans against the school and its teindicating that their parents had imbued them with hostility or at least disdain and scorn for the school.

During the period 14-18 April 1987, petitioners were individually and personally informed through a letter by the principal oChristian that, as they were severely critical of the school's policies, it would be best for all concerned if their children ensome other school. On 25 May 1987, the first day of the enrollment period for SY 1987-88, petitioners were informed that respective children were in the list of "referral" cases, the school principal would confer with them either in the afternoon of 1987, the last day of enrollment, or on 30 May 1987. Petitioners felt that their children were being singled out by the schdecided not to see the principal and instead proceeded to the DECS for advise. The DECS in a lst Indorsement dated 1987 ordered private respondent School to enroll petitioner's children. The latter however refused to enroll these stprompting petitioners to file an action for mandamusin court. The trial court on 11 June 1987, to maintain the status quobthe parties, ordered the temporary enrollment of petitioner's children. (Resolution-GR No. 90063, pp. 1-4)

While Civil Case No. Q-51039 was being considered on appeal by the Court of Appeals and later the Supreme Coproceedings were also going on in Civil Case No. Q-89-2357, which had been filed by Vonette C. Luy and her father Vice

and assigned to Branch 88 on April 26, 1989.

The Luy petition alleged:

xxx xxx xxx

. . . [T]hat during the school year 1989-1990 appellants unjustifiably refused to admit her in the High School Department, the fact that she was given a reservation slip which she was instructed to fill up and "return not later than April 15, 1989 twith report card for this year." Before April 15, 1989, she submitted the reservation slip to the school principal, but the pinformed her that she would no longer be admitted because her father was very vocal against certain school policactivities. As the school principal refused to allow her to enroll in the High School Department, her father wrote a letter codated April 7, 1989 to the Department of Education, Culture and Sports (DECS). The Department indorsed the letter to the

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for immediate comment and/or appropriate action (Exhibits "E" and "D"). In reply, the lawyer of the school wrote the Dreiterate the school's decision not to enroll Vonette Luy in its High School Department (Exhibit "E"). ( Rollo, pp. 40-41)

The school and herein petitioners Julia and James Tan opposed the issuance of the writ of preliminary mandatory injuncthe grounds that:

xxx xxx xxx

. . . (a) the right of a student to enroll in a private school is not absolute; (b) Vonette C. Luy failed to exhaust all adminiremedies; and (c) there is no clear legal basis for the issuance of a writ of preliminary mandatory injunction. ( Rollo, p. 41)

On May 25, 1989, Judge Tirso D.C. Velasco issued the writ, stating

In view of the foregoing, the petitioner has clearly established her right to be admitted to the First Year, High School DepaGrace Christian School, Quezon City and the unmitigated duty of respondents to admit the petitioner to the aforesaid HighDepartment.

The Writ of Preliminary Mandatory Injunction is hereby GRANTED and the respondents are ordered to allow the enrollpetitioner in the High School Department, Grace Christian High School, Quezon City, after posting a bond of Five ThPesos of compliance to this Court within three (3) days from receipt hereof. (pp. 73-74, Records.) ( Rollo, pp. 41-42)

A motion for reconsideration was filed followed by a supplemental motion for reconsideration. The petitioners stated Department of Education, Culture, and Sports had decided their administrative case upholding the right of the school toenrollment in the first year high school of Vonette Luy as well as the other students similarly situated. (SeeAnnex "D", R52-53)

Significantly, the petitioners also pointed out to the court that Vicente Luy and his daughter were engaging in forum shbecause Civil Case No. Q-51039 had been filed earlier by Mr. Luy himself and various other parents. There was pendingthe same cause of action on contempt and both cases were raising the same issues.

As earlier stated, the first case on the grant of mandatory injunction was at that time already with the Court of Appeals.

On June 9, 1989, Vicente Luy filed a motion to declare the petitioners in contempt of court for refusing to enroll Vonettehigh school.

We note that on this same date, June 9, 1989, the other court presided over by Judge Godofredo Legaspi denied themotion for contempt filed by Mr. Luy, Josefina Ang, Teresita Ang See, and Teresita Dipasupil.

On June 13, 1989, Judge Tirso Velasco ordered the petitioners to comply with the writ of preliminary mandatory injunctiowould act on the motion for contempt. The petitioners opposed this order stating that Judge Legaspi had just denied themotion for contempt in the other case (Civil Case No. Q-51039). In this opposition, the petitioners again charged Mr. Lforum shopping contending that the first case he filed with others should take precedence over Civil Case No. Q-89-2357 pbefore Judge Velasco's court.

On June 16, 1989, Judge Velasco issued the order questioned in this petition, stating:

IN VIEW HEREOF, and for continuously defying not only the writ of this court but also the three Orders of June 7, June June 15, 1989, the Court finds the two respondents Julia L. Tan and James Tan guilty beyond reasonable doubt of contempt and hereby sentences each of them to suffer a penalty of imprisonment of ten (10) days and to pay the cost. Thlikewise fined P500.00 each.

The Court orders that a warrant of arrest be immediately issued and served upon them to start service of sentence. The Cdetermine whether, during this period of time, petitioner Vonette Luy shall have been enrolled in respondent school for determination shall be made whether respondents shall be continuously held in custody until compliance by them of thewrit of preliminary mandatory injunction. (Rollo, p. 57)

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Only ten (10) days later, on June 26, 1989, the Court of Appeals set aside the writ issued by Judge Velasco whicommanded the herein petitioners to enroll the protesting school children. It lifted the writ of preliminary injunction it had issmotion for reconsideration was denied.

The parents went to our Court. We initially issued a status quoorder, enjoining the parties to maintain the situation existingthe decision of the Court of Appeals was rendered.

On December 12, 1989, however, we decided the controversy in favor of herein petitioners and the school. The Court in G

90063 declared the petition of the parents and their children unmeritorious. We stated:

ACCORDINGLY, the Court Resolved to DISMISS the Petition for lack of merit. However, the children here affected sallowed to fill the current school year (including the summer term, if any), as the questioned Order of the Court of Appeatake effect only as of the beginning of SY 1990-91."(Padilla, J., took no part, Gutierrez, Jr., J., is on official leave)." (at p. 7)

The petition in this case is impressed with merit.

Our ruling in Yap Chin Fah et al.v.Hon.Court of Appeals, et al. was already long final when the Fourth Division of the CAppeals rendered its October 22, 1990 decision practically ignoring and rendering naught the ratio decidendiwhich impelledismiss the earlier petition. This cannot be countenanced.

We stressed in Ver v.Quetulio (163 SCRA 80 [1988]), citingAng Ping v. Regional Trial Court of Manila, Br.40(154 SC[1987]):

As early as 1922, this Court declared in Shioji v. Harvey (43 Phil. 333) that "the only function of a lower court, when the juof a higher court is returned to it, is the ministerial one of issuing the order of execution. A lower court is without supejurisdiction to interpret or to reverse the judgment of the higher court."

This is especially true where it is a Supreme Court decision or resolution which states with finality how the particular case bhas been resolved. We ruled in Tugade v. Court of Appeals (85 SCRA 226):

Respondent Court of Appeals is really devoid of any choice at all.It could not have ruled in any other way on the legal qraised.This Tribunal having spoken, its duty was to obey.It is a simple as that. There is relevance to this excerpt from BaBarrera (34 SCRA 98 [1970]). "The delicate task of ascertaining the significance that attaches to a constitutional or s

provision, an executive order, a procedural norm or a municipal ordinance is committed to the judiciary. It thus dischargesno less crucial than that appertaining to the other two departments in the maintenance of the rule of law. To assure stalegal relations and avoid confusion, it has to speak with one voice. It does so with finality, logically and rightly, through the judicial organ, this Court. What it says then should be definitive and authoritative, binding on those occupying the lower rthe judicial hierarchy. They have to defer and to submit." ( Ibid, 107). The opinion in Barrera further emphasizes the point: thought was reiterated in an opinion of Justice J.B.L. Reyes and further emphasized in these words: "Judge Gaudencio need not be reminded that the Supreme Court, by tradition and in our system of judicial administration, has the last word othe law is; it is the final arbiter of any justiciable controversy.There is only one Supreme Court from whose decisions acourts should take their bearings. (Justice J.B.L. Reyes spoke thus in Albert v. Court of First Instance of Manila (BranchSCRA 948, 961). (Emphasis supplied)

The respondent Court of Appeals should have been aware that in the related case (G.R. No. 90063), we had already set awrit of preliminary injunction similar to the writ from which emanated the contempt order directing that the petition

imprisoned and made to pay fines. If this Court had already found a preliminary injunction invalid and sustained the sposition that there was no unmistakable and indubitable right to enroll the petitioners' children, any lower court's decisiocontrary is not only unenforceable and ineffective, but certainly cannot be the basis for a contempt order.

Our ruling in the related case of Yap Chin Fah, et al.v.Hon.Court of Appeals, et al., states:

As the Court of Appeals pointed out, petitioners here failed to exhaust their administrative remedies before resorting taction, as they had failed to: (a) see the principal of Grace Christian on 29 May 1987, their scheduled conference date; (b) the resolution of the letter of reconsideration/clarification of lst Indorsement dated 1 June 1987 filed by Grace Christian wDECS Assistant Regional Director; and (c) appeal to the DECS Secretary to finally resolve their disagreements withChristian, the right to appeal from the decision of a subordinate officer to a superior one constituting "a plain, speeadequate remedy in the ordinary course of law" within the meaning of the Rules of Court. The Education Act of 1982 vest

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DECS the primary authority to hear and resolve disputes by and among members of the educational community similar tbetween petitioners and Grace Christian.

Moreover, a writ of preliminary mandatory injunction lies only when the right sought to be enforced is clear, unmistakaindubitable (Rivera v. Florendo, 144 SCRA, 643 [1986]). In the instant case, no such clear right was shown. It is true thatschoolsnot unlike public utilities and other private corporations whose businesses impinge on the public interest areto reasonable regulation and supervision of the State (Const., Art. XIV [4] [1]). At the same time, however, private schoothe right to establish reasonable rules and regulations for the admission, discipline and promotion of students. This

establish and enforce reasonable rules and regulations extends as well to parents and parent-teacher associations, as pareunder a social and moral (if not legal obligation, individually and collectively, to assist and cooperate with the schoolsinstant case, since petitioners have failed to comply with the conditions and prerequisites for admission, i.e., registration wprescribed dates, payment of duly-approved tuition fees, and compliance with school rules and regulations, Grace Ccannot be regarded as having acted arbitrarily or capriciously in refusing to re-enroll petitioners' children.

xxx xxx xxx

Lastly, where relations between parents and students on the one hand, and teachers and administrators upon the othehave deteriorated to the level here exhibited, a private school may, in the interest of the rest of the student body and of theand management as a whole, and of the children of the parents affected, require the affected children to be enrolled elseThe maintenance of a morally conducive and orderly educational environment will be seriously imperiled if, undcircumstances of this case, Grace Christian is forced to admit petitioners' children and to reintegrate them to the student

may even be argued that petitioners' children have been innocent victims in a deplorable confrontation between some parerespondent School, but the situation here finds some analogy in labor cases where, because of pre-existing and supestrained relations, reinstatement is not always a feasible solution. (G.R. No. 90063, December 12, 1989, pp. 5-6; 7)

The issue before us was the right to enroll in high school of students who graduated from the elementary department of thinstitution. Exactly the same issue is raised in the case which gave rise to the contempt order and to the present petitionthe common facts of the two cases, both the DECS and this Court have found the petitioners' position valid.

We cannot close this case without deploring the action of Vicente Luy and his counsel for filing Civil Case No. Q-89-2357 when exactly the same issues were already before Branch 79 in Civil Case No. Q-51039 filed by, among others, Mr. Luy inThis results not only in unnecessarily clogging the heavily burdened dockets of our courts but also in the unseemly sightBranches of the same trial court and two Divisions of the Court of Appeals issuing contradictory decisions one in favoschool and the other in favor of the students and their parents. This problem of forum shopping is now before our Commthe Revision of the Rules of Court.

Pending any amendment of the Rules or a circular remedying this problem, lawyers and litigants alike are warned to bcandid with courts of justice and not engage in forum shopping through deliberate splitting of actions or appeals in the hoeven as one case is dismissed, another would still be open.

The Court of Appeals in this case was also misled. It ruled:

It is important to note that Civil Case No. Q-51039 was filed for the purpose of requiring appellants to maintain the estudents in the roll of students in the Elementary Department. This prayer was granted when the court issued the preliminary mandatory injunction asked for. Herein appellants thereafter complied with the said order. It was only when therefused to admit the eight (8) students in its High School Department that they filed the motion for contempt. Said moti

denied because what the initial petition prayed for was for the issuance of a writ of preliminary mandatory injunction to mthe enrollment in the Elementary Department of the students and not their admission in the High School Department school. Therefore, the right of the students to be admitted in the High School Department was not in issue hence, the cocorrect in ruling that it had no jurisdiction to declare the appellants in contempt of court for the act complained of, tdismissing the charge without considering its merits. (Rollo, pp. 45-46)

Civil Case No. Q-51039 was filed by Vicente Luy and other parents not only to continue enrolling their children in the elemdepartment but also to compel the enrollment of their other children in the high school department of Grace Christian Schpointed out by the petitioners, there were eighteen (18) students involved in Civil Case No. Q- 51039, not eight (8) as stthe Court of Appeals. Vonette Luy had two sisters, Vivian Luy and Virna Luy who were high school students and who joinepetition. The case involved not only elementary grade but also high school students.

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No thinking person can dispute the fact that our country is suffering from the effects of a serious deterioration of academother standards in our educational system. This Court is disturbed by the big number of candidates taking the bar examwho, after six (6) years in the elementary grades, four (4) years in high school, and eight (8) years in college appeafunctionally semi-illiterate judging from the answers they give to bar examination questions. The same is true of other discprofessions, and occupations. A drastic upgrading of educational standards especially in the elementary and high school limperative.

It is for the above reason that Government should uphold and encourage schools and colleges which endeavor to main

highest standards of education. We have consistently sustained the rights of students to legitimately address their grievancto school authorities, media, and the general public to the extent of sometimes countenancing uncivil and rowdy beHowever, we have not hesitated to strike down violence and anarchy when certain students and their inevitable supportersthe grant of "ordered liberty" mandated by the Constitution. Educators who insist on high standards and who enforce reasrules of discipline deserve support from courts of justice and other branches of Government.

WHEREFORE, the petition is hereby GRANTED. The questioned DECISION and RESOLUTION of the Court of AppeREVERSED and SET ASIDE. The petitioners are ACQUITTED of the offense of indirect contempt of court.

SO ORDERED.

Dira vs. Tanega

Direct appeal by plaintiff-appellant Vicente Dira from a decision of the Court of First Instance of Leyte, dated February 13dismissing, on the grounds of prescription and laches, the complaint in its Civil Case No. 2886, an action for accounting of in an alleged partnership, payment of salaries and other money claims, without pronouncement as to costs.

The material facts as found by the trial judge are as follows:

That sometime in March 1946, plaintiff and defendant together with Francisco Pagulayan entered into a partnership purpose of engaging in the printing business in the City of Tacloban and that the terms of the said partnership was for a pfive (5) years from the organization thereof; that this fact was admitted by the defendant in his answer; that, in the articlepartnership, the plaintiff was designated as President and his salary as such was P150.00 a month, that, during his incum

as President until the expiration of the period, the defendant who was the manager-treasurer of the partnership never paid salary; that at the time the plaintiff was also the editor of the Leyte-Samar Tribune and in accordance with their ArtPartnership established the said periodicals, the plaintiff as editor was to receive a salary of P100.00 a month; that this salthe accrued amount therein was not also paid by the defendant, who was the business manager of the enterprise; that theof the said partnership was P5,000.00 equally divided among the partners; that this amount was used by the partnepurchase printing equipment from the 64th Naval Construction Battalion, U.S.N. and which printing equipment arepossession of the defendant up to now; that, before the purchase by the three of them of the printing equipment, the obtained a personal loan from Francisco Pagulayan in the amount of P1,100.00 and he pledged his share in the said equipmpay the same; that upon the request of the plaintiff, the defendant paid the said amount to Francisco Pagulayan and thplaintiff used his share in the partnership as guarantee for the defendant's payment; that on June 3, 1946, Francisco Pagsold his share of the partnership to the defendant and who by virtue thereof became 2/3 owner of the business; that the depresented Exhibit "5" which purports to be a letter of demand to plaintiff asking him to settle his account, but due to his fado so, he (defendant) assumed full ownership of the business, he changed the name from the Leyte-Samar Press to TPress; that from the time the partnership was organized and went into business, the defendant as Manager-Treasurerendered any accounting of the business operations, or paid the share of the plaintiff in the profits; and that the present apartnership accounting and sum of money was only filed in Court by the plaintiff against the defendant on February 10, 19is after a lapse of 9 years, 10 months and 11 days after the expiration of the contract of partnership, Exhibit 'A' on Febru1951. (Pp. 49-51, R. on A.)

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It is undisputed that the defendant had been in the exclusive possession of all the printing equipment since 1946. Plaintiff admitted that the defendant conducted himself as absolute owner of the printing equipment. He testified that defendant clocation of the printing press which place he (Dira) did not know. According to defendant himself, he believed in good faacted accordingly since 1947 that he was the sole owner of the printing press, after the refusal of the plaintiff to indebtedness of P1,100.00 to him. From the above facts, it can be deduced that defendant had acquired ownership of the

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equipment and accessories in question as Article 1132 of the Civil Code provides that the ownership of movables prethrough uninterrupted possession of eight years, without need of any condition. Surely 1946 or 1947 to 1961, more thand/or eight years had elapsed.

Plaintiff stated that defendant ignored him and did not give him any participation, since 1947, in the business, yet he demand an immediate accounting of the business. For his failure to demand accounting five years before February 10, 196the defendant, he had forfeited his right by prescription. In support, Article 1153 of the Civil Code, among other things, pthat the period for prescription of actions to demand accounting runs from the day the persons who should render same c

their functions, and Article 1149 of the Civil Code provides that "all other actions whose periods are not fixed in this Codother laws within five years from the time the right of action accrues."

It is an incontrovertible fact that the plaintiff had filed this action against the defendant on February 10, 1961, nearly ten yeathe expiration of the contract of partnership between them on March, 1951. ... (Pp, 56-57, R. on A.)

In his complaint, plaintiff-appellant prayed for payment of his salaries not only as President of the partnership but also as ethe Leyte-Samar Tribune which admittedly he had not been paid from the start, for accounting of the partnership affapayment of his alleged share in the rental value of the printing equipment and accessories used by the partnership, of walso claimed part-ownership proportionally to his share in the partnership, and for damages, attorney's fees and cosdefendant-appellee admitted practically all the material allegations of the complaint about the organization of the partnersthe terms thereof as well as the non-payment of the salaries claimed by appellant, but, in defense, he alleged that thebusiness of the partnership became his alone in 1947 after he had acquired by purchase the share of Francisco Pagulay

had taken over the share of appellant, since the latter failed to pay the P1,100 he had requested appellee to pay to Pagulasecurity for the payment of which, he had pledge his said share to appellee; that since 1947, the place of the businetransferred by him, he had its name changed to Taega Press and he had always been operating openly and publicly tprinting business from 1947 without any intervention or participation of appellant and without said appellant making any cany kind in connection therewith until the filing of the complaint on February 10, 1961, hence, all the claims and causes oof the appellant had already prescribed.

Upon the facts found by His Honor quoted above, We agree with His Honor in upholding appellee's defense of prescriptionany angle that this case may be viewed, it is obvious that appellant's causes of action barred by the statute of limitations.

Appellee took exclusive control of the partnership affairs since 1947, publicly and openly and after having notified appellantwould do so should the latter fail to comply with his letter of demand, Exhibit "5", dated April 19, 1947. Nowhere in the factby the trial judge does it appear that appellant did anything about said demand or that he ever contested the action of the aof transferring the place of business and changing its name to Taega Press. There is nothing to show that he had takmove for the payment to him of his unpaid salaries both as President of the business and as editor of the Leyte-Samar Trib

Under these circumstances, it would be giving premium to inaction and indifference to still hold that appellant could sue apalmost fourteen years after the latter, with prior notice to the former, had openly and publicly taken over exclusive contropartnership business as if it were his own and only a little short of ten years after the expiration of the stipulated partnership. His claims for salaries accrued after each month they were unpaid. Whether we assume that these claims loin 1947 when appellee took over the businesses of the printing press and the newspaper or in 1951, upon the expirationterm of the agreements, by all standards, these claims had already prescribed when the present suit was filed. On the otheunder Article 1153 of the Civil Code, a demand for "accounting runs from the day the persons who should render the same in their functions," which in this case as in 1947, when the appellee began to operate the businesses as exclusively hAgain, inasmuch as the longest period in the chapter on prescription of the Civil Code is ten years, it is evident that appaction for accounting is already barred. The same is true with the claim for rentals and recovery of proportional ownership

printing equipment and accessories, as to which, appellant's period to bring his actions accrued also in 1947, fourteebefore this suit was filed.

As a matter of fact, appellant impliedly admits the correctness of this position, since in this appeal his only contention is thas his partner and as pledgee of his share, the appellee became his trustee, in legal contemplation, or that, in the eyes of a relationship of trusteeship arose between him and appellee, hence his actions against him are imprescriptible. Appellantis without merit. In bad faith or in good faith, after eight years of actual adverse possession, appellee acquired clear owneappellant's share by acquisitive prescription. According to Art. 1132 of the Civil Code, "the ownership of personal propeprescribes through uninterrupted possession for eight years, without need of any other condition." So, appellee bundisputed owner of appellant's share since 1955 or six years before this action was filed and since said year the allegtrusteeship had already lost any basis whatsoever. Under Article 1140 of same Code, "Actions to recover movable

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prescribe eight years from the time the possession thereof is lost, unless the possessor has acquired the ownersprescription for a less period" or for an equal period, in which latter case, the right to sue prescribes together with the title.

Equally untenable is appellant's reliance on the theory that as a member of the partnership, appellee continued as a trusteafter 1947, when said appellee took the business for himself and even after 1951, the expiry date of the agreemenprovisions of Article 1785 to the effect that: .

When a partnership for a fixed term or particular undertaking is continued after the termination of such term or pa

undertaking without any express agreement, the rights and duties of the partners remain the same as they were termination, so far as is consistent with a partnership at will.

A continuation of the business by the partners or such of them as habitually acted therein during the term, without any setor liquidation of the partnership affairs, isprima facie evidence of a continuation of the partnership.

and Article 1829 thus:

On dissolution the partnership is not terminated, but continues until the winding up of partnership affairs is completed.

are clearly inapplicable here, for the simple reason that those articles are premised on a continuation of the partnership awhich is not our case, because here appellee repudiated the partnership as early as 1947 with either actual or pre

knowledge of the appellant. By analogy, at least, with the rule as to a co-ownership, which a partnership essentially is, presdoes not run in favor of any of the co-owners only as long as the co-owner claiming against the others "expressly or imrecognizes the co-ownership," a circumstance irreconcilably inconsistent with appellee's conduct of transferring the pbusiness, changing its name and not paying appellant any of the salaries agreed upon in the articles of partnership.

What is more, this case may well be decided on the basis of laches as was done by the trial judge. In other words, prescription were not properly applicable, We could still hold that under the facts proven in the record and found by thecourt, appellant has been guilty of laches and his stale demands may not gain the ears of the court. We note, however, thaanswer, the appellee limit his defense specifically to prescription which is a separate defense from laches. Not thaparticularity of appellee's defense is fatal, because, after all, it does not appear that the evidence proving laches were objeby appellant, (Section 5, Rule 10, Rules of Court) but We do not feel that in this case We need to go beyond the specific dexpressly invoked by the appellant. This is mentioned only, lest appellant may still entertain any hope regarding this case.

WHEREFORE, the judgment of the lower court is affirmed, with costs against appellant.

Espanol vs. Philippine Veterans Administration

This is a petition for review on certiorari to set aside and/or modify the decision dated January 14, 1975, in Civil Case Noof the Court of First Instance of Manila, ordering by way of mandamus the Chairman and Members of the Board of AdminisPhilippine Veterans Administration to restore Maria U. Espaol's monthly pension.

Maria U. Espaol was the widow of the deceased veteran German Espaol, who died in the service during World Warapplied for monthly pension under R.A. No. 65 with the Philippine Veterans Administration (now Philippine VeteransOffice). Her application was approved and she received her monthly pension and her minor children their monthly depepension. But on November 1, 1951, the Philippine Veterans Administration (PVA), in pursuance of its administrative providing that those beneficiaries of veterans receiving pensions from the U.S. Veterans Administration are no longer enreceive pension from the PVA, cancelled Maria U. Espaol's monthly pension and that of her then minor children (p. 5, AppBrief; p. 10, rec.).

On February 25, 1974, or after more than 22 years from the date when her monthly pension was cancelled, Maria U. Espawith the CFI of Manila a petition for mandamus against PVA for the restoration and continued payment of her monthly pincluding that of her dependents effective from the date of cancellation.

After PVA filed its answer, in which factual issues were admitted, judgment on the pleadings was rendered by the lower cJanuary 14, 1975, the dispositive portion of which reads:

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WHEREFORE, finding merit in the petition, let mandamus issue, ordering the restoration of petitioner's monthly pensiwhatever increase are allowed by law except that of petitioner's children who are now above 18 years of age (p. 10, rec.).

The PVA appealed to the Court of Appeals, which elevated the appeal to this Court, as only errors or questions of lainvolved (pp. 4-5, CA decision; pp. 38-39, rec.).

WE find the appeal to be without merit.

I

The contention of appellant PVA that the action of appellee Maria U. Espaol to compel the restoration of her monthly and that of her children, effective from the date of cancellation on November 1, 1951, has already prescribed, inasmuchsame was filed more than 10 years from the date of cancellation, is without merit.

Article 1144 of the New Civil Code provides that actions based on an obligation created by law shall be brought within 1from the time the right of action accrues. It is important to reckon the date, when the right of action accrues, as the sambeginning for counting the 10-year prescriptive period.

The right of action accrues when there exists a cause of action, which consists of 3 elements, namely: a) a right in favoplaintiff by whatever means and under whatever law it arises or is created; b) an obligation on the part of defendant to

such right; and c) an act or omission on the part of such defendant violative of the right of the plaintiff (Cole vs. Vda. de Gr116 SCRA 670 [1982]; Mathay vs. Consolidated Bank & Trust Co., 58 SCRA 559 [1974]; Vda. de Enriquez vs. De la CSCRA 1 [1973]). It is only when the last element occurs or takes place that it can be said in law that a cause of action has(Cole vs. Vda. de Gregorio, supra).

The appellee cannot be said to have a cause of action, in compelling appellant to continue paying her monthly penNovember 1, 1951, because appellant's act of cancellation, being pursuant to an administrative policy, cannot be considviolation of appellee's right to receive her monthly pension.

It is elementary rule in administrative law that administrative regulations and policies enacted by administrative bodies to ithe law which they are entrusted to enforce, have the force of law, are entitled to great respect (Sierra Madre Trust vs. Seof Agriculture and Natural Resources, 121 SCRA 384 [1983]; Asturias Sugar Central Inc. vs. Commissioner of Customs, 29617 [1969]; Antique Sawmill Inc. vs. Zayco, et al., 17 SCRA 316 [1966]), and have in their favor a presumption of legality

appellant's act of cancelling appellee's monthly pension being presumed legal and valid, cannot be taken as a violaappellee's right to receive her monthly pension under R.A. No. 65.

In the case of Del Mar vs. The Philippine Veterans Administration (51 SCRA 340 [1973]), this Court did not consider presin favor of PVA, even though the action of Del Mar was filed on June 20, 1964 or more than 10 years from the cancellatiomonthly pension in March, 1950; because the action of Del Mar was basically to declare the questioned administrativeinvalid, which action does not prescribe.

It is only when this Court declared invalid the questioned administrative policy in the case of Del Mar vs. The Philippine VAdministration, supra, promulgated on June 27, 1973, can the appellee be said to have a cause of action to compel apperesume her monthly pension; because it is at that point in time, when the presumption of legality of the questioned adminpolicy had been rebutted and thus it can be said with certainty that appellant's act was in violation of appellee's right to recemonthly pension.

The 10-year prescriptive period, therefore, should be counted from June 27, 1973 when the case of Del Mar vs. The PhVeterans Administration, supra, was promulgated, and not from November 1, 1951, the date of cancellation by appeappellee's pension. The action of appellee, which was brought on February 25, 1974, is therefore well within the prescriptive period.

II

Appellant's contention that appellee's action for mandamus cannot prosper because no prior exhaustion of administrative was made, as appellee had not made any prior demand on appellant, is without merit.

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It is a rule that when a case involves solely legal questions, the litigant need not exhaust all administrative remedies beforerelief is sought (One Heart Sporting Club, Inc. vs. CA, 108 SCRA 416 [1981]; Bagatsing vs. Ramirez, 74 SCRA 306 [197Mar vs. The Philippine Veterans Administration, supra; Mendoza vs. SSS, 44 SCRA 373 [1972]).

III

The contention of appellant that it cannot be ordered by mandamus to resume paying appellee's monthly pension becausecase of Board of Administrators, Philippine Veterans Administration vs. Hon. Maria Agcaoili and Mauro Abrera (58 SC

[1974]), it was held that disbursement of public funds must be covered by corresponding appropriation, is likewise untenabl

WE find the Agcaoili case inapplicable to appellee's claim. Since the action for mandamus filed by claimant Mauro Abreracase was to compel PVA to pay him the additional benefits provided for by R.A. No. 5753 (An Act further amending R.A.amended, by increasing the Pension of totally disabled Veterans of WWII and their Living Dependents), this Courdismissed his action because Congress made no actual appropriations to cover all increased claims covered by R.A. No. 5the case at bar, appellee does not seek to recover increased benefits under R.A. No. 5753, but for the restoration of her mpension and her children's monthly dependent's pension provided for by R.A. No. 65, as amended, the coverage ofCongress had already appropriated funds therefor. Besides, R.A. No. 5753 covering disabled veterans is alien to appelleefor benefits due to her as a surviving spouse of a deceased veteran. The action by appellee for mandamus against apthus, exists.

WHEREFORE, THE DECISION OF THE COURT OF FIRST INSTANCE DATED JANUARY 14, 1975 IS HEREBY AMEAND APPELLANT, CHAIRMAN AND MEMBERS OF THE BOARD, PHILIPPINE VETERANS ADMINISTRATIONPHILIPPINE VETERANS AFFAIRS OFFICE) IS HEREBY ORDERED TO:

1. PAY APPELLEE, MARIA U. ESPAOL, HER MONTHLY PENSION PLUS WHATEVER INCREMENTS THAT MPROVIDED FOR BY LAW, EFFECTIVE NOVEMBER 1, 1951, AS LONG AS SHE QUALIFIES; AND

2. PAY APPELLEE'S QUALIFIED MINOR CHILDREN THEIR MONTHLY DEPENDENT'S PENSION PLUS WHAINCREMENTS THAT MAY BE PROVIDED FOR BY LAW, EFFECTIVE NOVEMBER 1, 1951.

COSTS AGAINST RESPONDENT-APPELLANT.

SO ORDERED.

Huang vs. Court of Appeals

Sometime in 1965 respondent Dolores Sandoval wanted to buy two (2) lots in Dasmarias Village, Makati, but was advpetitioner Milagros Huang, wife of her brother, petitioner Ricardo Huang, that the policy of the subdivision owner forbaacquisition of two (2) lots by a single individual. Consequently, Dolores purchased Lot 21 and registered it in her name. Spurchased the adjacent lot, Lot 20, but heading the advice of Milagros, the deed of sale was placed in the name of RicarRegistered in his name under TCT No. 204783. Thereafter, Dolores constructed a residential houLot 21. Ricardo also requested her permission to construct a small residential house on Lot 20 to which she agreed inasmshe was then the one paying for apartment rentals of the Huang spouses. She also allowed Ricardo to mortgage Lot 20Social Security System to secure the payment of his loan of P19,200.00 to be spent in putting up the house. However, shefinanced the construction of the house, the swimming pool and the fence thereon on the understanding that the Huang swould merely hold title in trust for her beneficial interest.

On 19 March 1968, to protect her rights and interests as the lawful owner of Lot 20 and its improvements, Dolores requesHuangs to execute in her favor a deed of absolute sale with assumption of mortgage over the property. The letter obliged.

On 15 March 1980, the Huang spouses leased the house to Deltron-Sprague Electronics Corporation for its various executofficial quarters without first securing the permission of Dolores. Dolores tolerated the lease of the property as she did notat that time. But, after sometime, the lessees started prohibiting the Sandoval family from using the swimming pool aHuangs then began challenging the Sandovals' ownership of the property.

On 26 August 1980, Dolores lodged a complaint before the office of the Barangay Captain praying that the spouses RicaMilagros Huang be made to execute the necessary request to the SSS for the approval of the deed of sale with assum

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mortgage, as well as for the release in her favor of the owner's duplicate certificate of title in its possession so that the deebe duly annotated on the title and/or a new certificate of title issued in her name. But no amicable settlement was reachedon 16 December 1980 the Lupong Tagapayapa issued a certification that the controversy was ripe for judicial action.

On 22 December 1980, Ricardo and Milagros Huang filed a complaint against the spouses Dolores and Aniceto Sandovathen Court of First Instance of Rizal, docketed as Civil Case No. 39702, seeking the nullity of the deed of sale with assummortgage and/or quieting of title to Lot 20. They alleged that the Sandovals made them sign blank papers which turned out

deed of sale with assumption of mortgage over Lot 20.

Meanwhile, on 19 February 1981, Dolores paid the balance of Ricardo's loan to the SSS and requested the release to herNo. 204783 and the real estate mortgage thereon, but SSS refused. On the same date, she filed a complaint against thespouses and the SSS before the same trial court, docketed as Civil Case No. 40288, praying among other things that: (a) tbe restrained from releasing the owner's copy of TCT No. 204783 to the Huangs; (b) the SSS be ordered instead to releassaid title as well as the mortgaged thereon; and (c) the Registered of Deeds of Rizal be ordered to register the deed cancel TCT No. 204783 and issue another one in her name.

Both cases were consolidated and jointly tried. On the basis of the evidence presented, the trial court found that it wasDolores who brought Lot 20 but had it registered in the name of Ricardo; and, it was she who built the house and swimmithereon and the fence enclosing Lots 20 and 21. As regards the deed of sale with assumption of mortgage, the trial cour

that it was signed voluntarily by the Huang spouses so much so that their claim that they were misled into signingunbelievable. Thus, on 23 November 1988, judgment was rendered in favor of the Sandoval spouses thus:

In Civil Case No. 39702 (1) The complaint of the Huang spouses was dismissed; (2) The Sandovals were declared owLot 20 and all the improvements thereon; (3) The deed of sale with assumption of mortgage was declared valid; (4) Thespouses and all persons acting in their behalf were ordered to vacate the property and turn over the possession to the San(5) The Huang spouses were ordered jointly and severally (a) deliver to the Sandoval spouses all the rentals and other income from Lot 20 which they received, and (b) paySandovals P5,000.00 as exemplary damages, P10,000.00 as attorney's fees, and the costs of suit; and, (6) The RegDeeds of Rizal was ordered to (a) register the deed of sale with assumption of mortgage; (b) cancel TCT No. 204783, issue, in lieu thereof, a transfer certificate of title in the name of "Dolores Sandoval married to Aniceto Sandoval" upon comwith all the legal requirements.

In Civil Case No. 40288 (1) Ricardo, Milagros or the SSS who has custody of the owner's copy of TCT No. 20478ordered to surrender it to the Registry of Deeds of Rizal within ten (10) days from the finality of the decision, otherwise, foto do so, the title shall be deemed annulled and the Register of Deeds shall issue another owner's copy thereof in favoSandovals, and (2) SSS was ordered to execute a discharge of the mortgage annotated on TCT No. 204783 and delivDolores within ten (10) days from the finality of the decision. 1

The Huang spouses filed a motion for reconsideration and trial and/or rehearing but it was denied by the trial court in its order of 26 July 1989. 2

On appeal to the Court of Appeals, the decision of the trial court was affirmed. 3 The motion to reconsider the decis

denied. 4 Hence the instant recourse.

Petitioners assert that the finding of the Court of Appeals of a resulting or implied trust between them and Dolores is not suby evidence. On the contrary, the deed of sale with assumption of mortgage has all the elements of an equitable moGranting arguendo that a resulting or implied trust exists between the parties, its enforcement is already barred by presPetitioners argue that when the suit in the trial court was filed by Dolores19 February 1981 more than ten (10) years had already lapsed since No. 204783 was issued on 11 October 1967. They also contend that jurisprudence has established the rule that the presperiod for an action for reconveyance based on fraud is ten (10) years, and that a resulting or implied trust is totally incomwith the deed of sale with assumption of mortgage, hence, the existence of said deed cannot be vaguelly dismissed as security. It is the position of petitioners that the terms of the contract are rendered conclusive upon the partieevidence aliunde is not admissible to vary, contradict or dispute a complete and enforceable agreement embodied in a docu

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The exhaustive decision of the trial court based as it is on a painstaking review of the entire records deserves our affirIndeed, we find no reason to disturb the factual conclusions therein.

Ricardo claimed that he bought Lot 20 with his own money on installment: the first installment of P19,341.00 was paiNovember 1965, and the second installment of P39,279.75 was paid on 4 April 1966. He said that the money came frsalary as employee of the Universal Textile Mills, his commission as rice sales agent, his involvement in politics andundeclared income.

But Ricardo's pretense was easily unmasked by the following circumstances: (1) His annual income as employee of Textwas only P6,795.05 in 1964, 5 P6,295.05 in 1965 6 and P7,154.15 in 1966; 7 as of 10 June 1967, he was only receiving a msalary of P600.00; 8 (2) His commission as rice sales agent of Dolores was earned in connection with a 1973 transaction, he could not have used this commission in 1965 and 1966 for the purchase of Lot 20; (3) He never bothered to explain hmade money out of politics and how much he realized from it; and, (4) There is no evidence on the source, nature and amhis undeclared income. The only logical conclusion then is that the money which was used to buy Lot 20 did not belong to h

On the part of Dolores, she was able to prove by overwhelming evidence that she purchased Lot 20 with her own fundtestified that Milagros informed her that she could not buy two (2) lots in the village in her name; instead, she suggested thof the lots be bought in the name of Ricardo. This testimony we never refuted by Ricardo. Moreover, the Agreements to Puand Sell Lots 20 9 and 21 10 were both executed on 5 November 1965 and the first installments for both lots were paid

same date, while the second installments were paid on 4 April 1966. These facts suggest that the lots were bought in atransaction by only one person.

Dolores also testified that she gave the amount corresponding to the first installments for both lots to Milagros. Dolores wto establish that she withdrew P19,500.00 from her deposit at the National City Bank of New York 11 and issued a PruBank check for P19,341.00. 12 In payment of the second installments for the two lots, she withdrew P24,000.00 from thNational City Bank 13 and issued a check for P54,927.90. 14 Viewed together with the foregoing circumstances is the adof Ricardo himself that Dolores constructed the swimming pool on Lot 20 and enclosed Lots 20 and 21 with a fence at hexpense.

Aside from Lot 20, Ricardo also asserted ownership of the house thereon which he claimed to have started constructingDecember 1967 and that it was "semi-accomplished" by 8 March 1968.

Weighed against the testimony of Dolores that for the cost of labor alone in the construction of the house she spent P45while the other expenses are listed in Exhs. "20," and "21" and "21-A" to "J," Ricardo could not have spent therefor becapreviously shown, his income was not sufficient enough. Neither could the P19,200.00 loan which he obtained from thsuffice. Dolores even had to shell out P5,062.68 on 7 May 1968 to pay for arrears in the rental of the apartment being occuthe Huangs from November 1966 to February 1968; electric bills from March 1965 to December 1967; and, water billFebruary 1966, 15 to prevent the Huangs from being ejected from their apartment. Dolores' ownership of the house is cofurther by the presence of her personal properties therein, e.g., chandelier, 16 furniture, 17 (c) Tai-ping rugs 18 and Sacrestatue. 19

As a whole, spouses Huang's evidence failed to help them in their bid to establish ownership over Lot 20 and its improve

They should know the Chinese proverb that "one simply cannot attain his purpose of chewing food well if he were to dmeans of loose teeth."

Regarding the deed of sale with assumption of mortgage, Ricardo alleged that Dolores and his cousin, Rene Javier, preand misled him into signing it because of his P30,000.00 indebtedness to Dolores; the deed was "blank" in the sense that ithave a title when he signed it; he did not read it contents; and, he did not acknowledge it before a notary public.

Ricardo's version of the circumstances under which he signed the deed of question is incredible. Human experience against the claim that a highly educated and mature man like Ricardo would sign a deed of sale without reading or knocontents. Ricardo graduated with the degree of Bachelor of Science in Architecture in 1955, and when he signed the deed about 39 years old. There is no evidence on record that Dolores "pressured" Ricardo to sign the deed. In fact, Milagros sigdocument at the instance of Ricardo himself. The deed, which was duly notarized, enjoys the presumption of regulari

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execution. The claim of Ricardo that he was indebted to Dolores in the amount of P30,000.00, which he used in his pretenhe was coerced by her, was never established.

On the contrary, the testimony of Dolores is more in accord with reason and clearly disproves Ricardo's gratuitous allegShe testified that she asked Ricardo and Milagros to sign the deed of sale for her and her children's protection becauwould come when they would want the property for themselves. Besides, according to her, the Huang spouses read the cof the deed and signed it before the notary public without any compulsion from her. We are therefore drawn to the ine

conclusion that the Huang spouses voluntarily signed the deed before the notary public with full knowledge of its contentsrecognition of Dolores' ownership over Lot 20 and its improvements.

We shall discuss the merit, nay, the demerit of the Huang petition. First, there is need to define the basic concepts in relationship. Trust is a fiduciary relationship with respect to property which involves the existence of equitable duties imupon the holder of the title to the property to deal with it for the benefit of another. 20 A person who establishes a trust is catrustor; one in whom confidence is reposed as regards property for the benefit of another person is known as the trustee; aperson for whose benefit the trust has been created is referred to as the beneficiary 21 or cestui que trust. Trust is either eor implied. Express trust is created by the intention of the trustor or of the parties. Implied trust comes into being by operlaw. 22 The latter kind or neither constructive or resulting trust. A constructive trust is imposed where a person holdingproperty is subject to an equitable duty to convey it to another on the ground that he would be unjustly enriched if hpermitted to retain it. The duty to convey the property arises because it was acquired through fraud, duress, undue influe

mistake, or through breach of a fiduciary duty, or through the wrongful disposition of another's property. On the other resulting trust arises where a person makes or causes to be made a disposition of property under circumstances which rinference that he does not intend that the person taking or holding the property should have the beneficial interesproperty. 23 It is founded on the presumed intention of the parties, and as a general rule, it arises where, and only whermay be reasonably presumed to be the intention of the parties, as determined from the facts and circumstances existingtime of the transaction out of which it is sought to be established. 24

In the present case, Dolores provided the money for the purchase Lot 20 but the corresponding deed of sale and transfer certificate of title were placed in the name of Ricardo Huang becauwas advised that the subdivision owner prohibited the acquisition of two (2) lots by a single individual. Guided by the fodefinitions, we are in conformity with the common finding of the trial court and respondent court that a resulting trust was cRicardo became the trustee of Lot 20 and its improvements for the benefit of Dolores as owner. The pertinent law is Art. the New Civil Code which provides that there is an implied trust when property is sold and the legal estate is granted to onbut the price is paid by another for the purpose of having the beneficial interest for the property. A resulting trust arises becthe presumption that he who pays for a thing intends a beneficial interest therein for himself. 25

Petitioners' assertion that the deed of sale with assumption of mortgage has all the elements of an equitable mortgagoutrightly be rejected as it was apparently never brought to the attention of the trial court nor averred before respondenWell settled is the rule that, ordinarily, issues not raised in the trial court, let alone in the Court of Appeals, cannot be raisedfirst time before this Court 26 as it would be offensive to the basic rule of fair play, justice and due process. 27

Petitioners raise the issue of prescription. But the action to compel the trustee to convey the property registered in his nthe benefits of the cestui que trust does not prescribe. 28 If at all, it is only when the trustee repudiates the trust that the pe

prescription commences to run. 29

The prescriptive period is ten (10) years from the repudiation of the trust. It is ten (10) years because just as a resulting truoffspring of the law, so is the corresponding obligation to convey the property and the title thereto to the true owner.context, and vis-a-vis prescription, Art. 1144 of the New Civil Code, which is the law applicable, provides: "The following must be brought within ten years from the time the right of action accrues: (a) Upon a written contract; (b) Upon an obcreated by law; (c) Upon judgment." 30

Thus, the reckoning point is repudiation of the trust by the trustee because from that moment his possession becomes awhich in the present case gave rise to a cause of action by Dolores against the Huang spouses. 31 However, before the pprescription may start, it must be shown

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(a) the trustee has performed unequivocal acts of repudiation amounting to an ouster of the cestui que trust; (b) such positiof repudiation have been made known to the cestui que trust; and, (c) the evidence thereon is clear and conclusive. In LaLevantino 32 and Valdez v. Olorga, 33 we held that acts which may be adverse to strangers may not be sufficiently advthe cestui que trust. A mere silent possession of the trustee unaccompanied by acts amounting to an ouster of the cestrust cannot be construed as an adverse possession. Mere perception of rents and profits by the trustee, and erecting fencbuildings adapted for the cultivation of the land held in trust, are not equivalent to unequivocal acts of ouster of the cestrust.

We agree with the trial court that the action filed by Dolores has not prescribed. Firstly, Ricardo has not performunequivocal act of repudiation amounting to an ouster of Dolores. The only acts which may be considered as indicativeintention not to respect the trust anymore were his leasing the house without the prior knowledge of Dolores; his refusal out the demand of Dolores that he must ask the lessees to vacate the house; and, his refusal to give the necessary paDolores to enable her to get the title from the SSS. Secondly, the foregoing acts are not positive acts of repudiation; and,the evidence on such acts is unclear and inconclusive. But even if the foregoing acts were manifest acts of repudiatioknown to Dolores, the fact remains that they were done at the earliest only on 15 March 1980 when Ricardo leased Lot 20improvements to Deltron. Dolores' complaint before the trial court was filed on 19 February 1981, or within the 10-year presperiod.

Petitioners are of the mistaken notion that the 10-year prescriptive period is counted from the date of issuance of the T

certificate of title. This rule applies only to the remedy of reconveyance which has its basis on Separ. 3, P.D. No. 1529, otherwise known as the Property Registration Decree, 34 and Art. 1456 of the Civil Code. 35Reconvis available in case of registration of property procured by fraud thereby creating a constructive trust between the pasituation which does not obtain in this case.

Without expressly stating so, petitioners' line of argument Rule 130, Sec. 7, of the Rules of Court then prevailing which states: "When the terms of an agreement have been reduwriting, it is to be considered as containing all such terms and, therefore, there can be, between the parties and their succin-interest, no evidence of the terms of the agreement other than the contents of the writing."

The Huangs were less than candid to the Court when they merely invoked the general rule and completely ignoring the excthat are also explicitly provided therein: (a) where a mistake or imperfection of the writing or its failure to express the truand agreement of the parties, or the validity of the agreement is put in issue by the pleadings; and, (b) when there is an iambiguity in the writing. In the present case, parol evidence is admissible because the deed of sale with assumption of mofailed to express the true intent and agreement of the parties. We concur with the finding of the appellate court that the deexecuted by the parties as security for the protection of the rights and interest of Dolores as the true and lawful owner ofand its improvements.

Petitioners state prefatorily in their petition that this case involves sibling oppression. It does not. Rather, it is a battle bgreed and thirst for justice, between a fortunate sister and a less fortunate brother, with the latter taking advantage of the fbounty.

WHEREFORE, the petition is DENIED. The decision of respondent Court of Appeals dated 28 September 1992 and its re

dated 8 January 1993, both sustaining the decision of the Regional Trial Court, are AFFIRMED, with costs against petitione

SO ORDERED.

Municipality of Opon vs. Caltex

Suit lodged in 1956 to recover P37,050.00 in municipal license taxes paid for the years 1950-1955. The Cebdismissed the complaint. 1 The Court of Appeals modified, allowed recovery of P27,900.00. 2Petitioners defendants bcame to this Court on appeal.

The facts, the Court of Appeals found, are: "Plaintiff-appellant Caltex (Philippines) Inc., is a domestic corporation ein the business of importing, distributing and selling gasoline, kerosene and other petroleum products. For the purpose of

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its imported petroleum products it has an establishment called 'Caltex Opon Terminal' located in the Municipality of OponIn addition, the said 'Caltex Opon Terminal' has a tin can factory whereby plaintiff-appellant manufactures 5-gallon tin canuse in the sale and distribution of its petroleum products. Pursuant, however, to a service agreement dated August 1, 19entered into between plaintiff-appellant and Tidewater Associated Oil Company (hereinafter called Tidewater), plaintiff-apagreed to arrange, within its ability to do so, in drum and package factories owned and operated by it, to manufacture,and/or fill cans and drums for Tidewater, provided the latter reimburses herein plaintiff-appellant for all cost and expense thereby, plus three (3%) per cent of such cost and expense. From 1950 to 1955, plaintiff-appellant tin can factory at its

Opon Terminal' manufactured 8,037,775 tin cans out of which 6,883,429 were used for the sale and distribution of products and 1,154,346 tin cans were delivered to Tidewater by virtue of the service agreement abovementioned. An breakdown of the foregoing figures is provided by Exhibit '1' and plaintiff-appellant's brief, as follows:

YearUsed byCaltex

Delivered toTidewater

Total TinsManufactured

Percentage forTidewater

1950 1,115,839 153,674 1,269,513 12.014%

1951 1,346,091 196,527 1,542,618 12.739%

1952 1,141,645 131,276 1,272,921 10.312%

1953 1,152,559 213,612 1,366,171 15.635%

1954 1,026,549 209,848 1,236,397 16.972%

1955 1,100,746 249,409 1,350,155 18.472%

6,883,429 1,154,346 8,037,775 14.361%

Ordinance No. 9, series of 1949, of defendant-appellee Municipality of Opon, Cebu, imposes a municipal license tafactory on the basis of its maximum annual output capacity, with a schedule of graduated rates. Pursuant to this orddefendants-appellees levied and collected from plaintiff-appellant license taxes based on the production of the tin factor'Caltex Opon Terminal' for the years 1950 to 1955 as follows:

Official Receipt No. Date Amount

A-10495701 Jan. 20, 1950 P3,750.00

A-16556672 Jan. 15, 1951 6,300.00

A-1453325 Jan. 15, 1952 7,700.00

A-7863313 Jan. 8, 1953 6,350.00

B-3044810 Jan. 15, 1954 6,800.00

B-9788189 Jan. 11, 1955 6,150.00

T o t a l . . . . . . . . . . P37,050.00

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The gist of the decision of the Court of Appeals, speaking through Presiding Justice Jose P. Bengzon, now AsJustice of this Court, is that respondent is entitled to recover P27,900.00 representing license taxes paid for the manufactucans used in the sale and distribution of its own products (P30,750 less P2,850, the amount paid in 1950, action as to whprescribed); and that the sum of P6,300.00, collected as license taxes corresponding to the tin cans respondent produTidewater was properly collectible.

1. Petitioners' line of argument is this: respondent company is liable for the entire output of the tin can factory becaus

is the motivating factor in the manufacture thereof. Petitioners' view is that the tin cans whether for its own use or for Tidupon the contract heretofore stated, are taxable. Reason therefor, so petitioners point out, is that the license tax is basedmaximum annual output capacity of the factory.

Ordinance No. 9 here involved is entitled "An Ordinance imposing a Municipal License Tax on Tin Can Factory on thof its Maximum Annual Output Capacity." Section 1, in part, provides: "A municipal license tax on tin factory" is imposed upTin factory with a maximum output capacity of 30,000 tins P150.00"

Tersely put then, the issue is narrowed down to whether respondent tin can factory is taxable as a separate busirespondent. And this because petitioners insist that even the tin cans manufactured for use by respondent itself shosubjected to municipal tax.

On this point, we are not hampered by lack of precedent. The reach of petitioner municipality's licensing power unvery same Ordinance No. 9 had already been the subject of a judicial test in Standard Vacuum Oil Company vs. AntiguPhil. 909, 913. The language there is expressive. We said that "when a person or company is already taxed on itbusiness, it may not be further taxed for doing something or engaging in an activity or work which is merely a part of, incidand is necessary to its main business." 4

The Standard Oil case does not stand alone. In City of Manila vs. Fortune Enterprises, Inc. 5 this Court ruled tbusiness of auto supplies, battery charging and upholstery is part of the main business of automobile repairing and is, thenot taxable separately. Mr. Justice Jose B. L. Reyes, speaking for this Court, wrote down the following guidelines:

. . . The foregoing ruling 6brings out the point that where something is done as a mere incident to, or as a necconsequence of the principal business it is not ordinarily taxed as an independent business in itself; and that what is usuall

as essential is the main activity in which the taxpayer is engaged. All the various transactions tending to better accompprincipal end in view must be treated as merely incidental to the principal purpose of the business, in the absecircumstances evidencing a different intent.

In the sale and distribution of its products in liquid form respondent uses containers. The container is a part of the sold. By maintaining its factory for tin cans respondent is assured of continuous supply thereof. Therefore, the tin manufactures for its ownership are not within the coverage of petitioner municipality's taxing power under Ordinance No. 9.

Withal, the problem does not end here. The entire-output-of-factory argument advanced by petitioners needsarticulation. For petitioners insist that respondent's factory also serves the needs of another entity Tidewater. To be notis that of the tin cans produce for the period 1950-1955, 85.63% were used by respondent; 14.361% delivered to TidJurisprudential support is not wanting for the decision of the Court of Appeals establishing a dividing line between the tmanufactured for respondent's own business and those for Tidewater.

In Manila Press, Inc. vs. Sarmiento, supra, this Court separately treated the quarterly license tax liability of plaintiff thus: The papers, stationeries and office supplies on which customers' names were printed were held subject to the the printing business because, for the printing jobs performed for its customers, "the principal service was that of a printer"; sales of papers, stationeries and office supplies "on which no printing work was performed," for the taxpayer "merely aretail dealer."

So it is, that in our case, the distinction made by the Court of Appeals is not without reason. For the tin cans produTidewater license tax was correctly assessed. But for those produced by respondent for its own use, no license tax because the manufacture thereof is "incidental to" and tends "to better accomplish the principal end in view" its main bus

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2. The second assignment of error that respondent's action to recover taxes paid for the years 1951 to 1953 hprescribed offers no novel question of law. A rule which has earned acceptance is that the period for prescription of arecover municipal license taxes is six years under Article 1145 (2) of the Civil Code. 7 The two-year prescriptive period in 306 of the National Internal Revenue Code relied upon by petitioners finds no application. For, this codal provision, as wsaid in one case, 8 "clearly refers exclusivelyto claims for refund of `national internal revenue tax' erroneously or illegally coand not "to a refund of `local or municipal license fees' illegally collected."

For the reasons given, the judgment under review is hereby affirmed.1wph1.t

No costs. So ordered.

Callanta vs. Carnation Philippines, Inc.

The issue raised in this petition for certiorari is whether or not an action for illegal dismissal prescribes in three [3] years pto Articles 291 and 292 of the Labor Code which provide:

Art. 291. Offenses.Offenses penalized under this Code and the rules and regulations issued pursuant thereto shall presthree [3] years.

xxx xxx xxx

Art. 292. Money Claims. All money claims arising from employer-employee relations accruing during the effectivity of thshall be filed within three [3] years from the time the cause of action accrued; otherwise, they shall be forever barred.

xxx xxx xxx

Petitioner Virgilio Callanta was employed by private respondent Carnation Philippines, Inc. [Carnation, for brevity] in Januaas a salesman in the Agusan del Sur area. Five [51 years later or on June 1, 1979, respondent Carnation filed with the ROffice No. X of the Ministry of Labor and Employment [MOLE], an application for clearance to terminate the employment ofCallanta on the alleged grounds of serious misconduct and misappropriation of company funds amounting to P12,000.00, mless.

Upon approval on June 26, 1979 by MOLE Regional Director Felizardo G. Baterbonia, of said clearance application, peVirgilio Callanta's employment with Carnation was terminated effective June 1, 1979.

On July 5, 1982, Virgilio Callanta filed with the MOLE, Regional Office No. X, a complaint for illegal dismissal with clareinstatement, backwages, and damages against respondent Carnation.

In its position paper dated October 5, 1982, respondent Carnation put in issue the timeliness of petitioner's complaint allegthe same is barred by prescription for having been filed more than three [3] years after the date of Callanta's dismissal.

On March 24, 1983, Labor Arbiter Pedro C. Ramos rendered a decision finding the termination of Callanta's employmenwithout valid cause. Respondent Carnation was therefore ordered to reinstate Virgilio Callanta to his former positi

backwages of one [1] year without qualification including all fringe benefits provided for by law and company policy, within days from receipt of the decision. It was likewise provided that failure on the part of respondent to comply with the decisioentitle complainant to full backwages and all fringe benefits without loss of seniority rights.

On April 18, 1983, respondent Carnation appealed to respondent National Labor Relations Commission [NLRC] whidecision dated February 25, 1985, 1 set aside the decision of the Labor Arbiter. It declared the complaint for illegal dismissby Virgilio Callanta to have already prescribed. Thus:

Records show that Virgilio Callanta was dismissed from his employment with respondent company effective June 1, 197that on 5 July 1982, he filed the instant complaint against respondent for: Unlawful Dismissal with Backwages, etc.

The provisions of the Labor Code applicable are:

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Art. 291. Offenses. Offenses penalized under this Code and the rules and regulations issued pursuant thereto shall presthree [3] years.

Art. 292. Money claims. All money claims arising from employer-employee relations accruing during the effectivity of thshall be filed within three [3] years from the time the cause of action accrued; otherwise, they shall be forever barred.

Obviously, therefore, the causes of action, i.e., "Unlawful Dismissal" and "Backwages, etc." have already prescrib

complaint therefore having been filed beyond the three-year period from accrual date.

With this finding, there is no need to discuss the other issues raised in the appeal.

WHEREFORE, in view of the foregoing, the Decision appealed from is hereby SET ASIDE and another one entered, dismthe complaint.

SO ORDERED.

Hence, this petition, which We gave due course in the resolution dated September 18, 1985. 2

Petitioner contends that since the Labor Code is silent as to the prescriptive period of an action for illegal dismissal with cla

reinstatement, backwages and damages, the applicable law, by way of supplement, is Article 1146 of the New Civil Codprovides a four [4]-year prescriptive period for an action predicated upon "an injury to the rights of the plaintiff" considering action for illegal dismissal is neither a "penal offense" nor a mere "money claim," as contemplated under Articles 291 arespectively, of the Labor Code. Petitioner further claims that an action for illegal dismissal is a more serious violation of thof an employee as it deprives him of his means of livelihood; thus, it should correspondingly have a prescriptive period longthe three 13] years provided for in "money claims."

Public respondent, on the other hand, counters with the arguments that a case for illegal dismissal falls under the category of "offenses penalized under this Code and the rules and regulations pursuant thereto" provided under Article 2money claim under Article 292, so that petitioner's complaint for illegal dismissal filed on July 5, 1982, or three [3] years, month and five [5] days after his alleged dismissal on June 1, 1979, was filed beyond the three-year prescriptive peprovided under Articles 291 and 292 of the Labor Code, hence, barred by prescription; that while it is admittedly a more

offense as it involves an employee's means of livelihood, there is no logic in assuming that it has a longer prescriptive penaturally, one who is truly aggrieved would immediately seek the redress of his grievance; that assuming arguendo that does not provide for a prescriptive period for the enforcement of petitioner's right, it is nevertheless beyond dispute that tright has already lapsed into a stale demand; and that considering the seriousness of the act committed by petitioner, respondent was justified in terminating the employment.

We find for petitioner.

Verily, the dismissal without just cause of an employee from his employment constitutes a violation of the Labor Code implementing rules and regulations. Such violation, however, does not amount to an "offense" as understood under Articlethe Labor Code. In its broad sense, an offense is an illegal act which does not amount to a crime as defined in the penal lwhich by statute carries with it a penalty similar to those imposed by law for the punishment of a crime. 3 It is in this sense

general penalty clause is provided under Article 289 of the Labor Code which provides that "... any violation of the provisthis code declared to be unlawful or penal in nature shall be punished with a fine of not less than One Thousand[P1,000.00] nor more than Ten Thousand Pesos [10,000.00], or imprisonment of not less than three [3] months nor mothree [3] years, or both such fine and imprisonment at the discretion of the court." [Emphasis supplied.]

The confusion arises over the use of the term "illegal dismissal" which creates the impression that termination of an empwithout just cause constitutes an offense. It must be noted, however that unlike in cases of commission of any of the proactivities during strikes or lockouts under Article 265, unfair labor practices under Article 248, 249 and 250 and illegal recractivities under Article 38, among others, which the Code itself declares to be unlawful, termination of an employment withor valid cause is not categorized as an unlawful practice.

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Besides, the reliefs principally sought by an employee who was illegally dismissed from his employment are reinstatemenformer position without loss of seniority rights and privileges, if any, backwages and damages, in case there is bad faitdismissal. As an affirmative relief, reinstatement may be ordered, with or without backwages. While ordinarily, reinstatemconcomitant of backwages, the two are not necessarily complements, nor is the award of one a condition precedent to anof the other. 4 And, in proper cases, backwages may be awarded without ordering reinstatement . In either case, no penaltynor improsonment is imposed on the employer upon a finding of illegality in the dismissal. By the very nature of the reliefs therefore, an action for illegal dismissal cannot be generally categorized as an "offense" as used under Article 291 of the

Code, which according to public respondent, must be brought within the period of three[3] years from the time the cause oaccrued, otherwise, the same is forever barred.

It is true that the "backwwages" sought by an illegally dismissed employee may be considered, by reason of its practical efa "money claim." However, it is not the principal cause of action in an illegal dismissal case but the unlawful deprivationone's employment committed by the employer in violation of the right of an employee. Backwages is merely one of thewhich an illegally dismissed employee prays the labor arbiter and the NLRC to render in his favor as a consequenceunlawful act committed by the employer. The award thereof is not private compensation or damages 5 but is in furtheraneffectuation of the public objectives of the Labor Code. 6 even though the practical effect is the enrichment of the individuaward of backwages is not inredness of a private right, but, rather, is in the nature of a command upon the employer topublic reparation for his violation of the Labor Code. 7

The case of Valencia vs. Cebu Portland Cement, et al., 106 Phil. 732, a 1959 case cited by petitioner, is applicable in thecase insofar as it concerns the issue of prescription of actions. In said case, this Court had occasion to hold that an acdamages involving a plaintiff seperated from his employment for alleged unjustifiable causes is one for " injury to the rightsplaintiff, and must be brought within four [4] years. 8

In Santos vs. Court of Appeals, 96 SCRA 448 [1980], this Court, thru then Chief Justice Enrique M. Fernando, sustained thof the Solicitor General that the period of prescription mentioned under Article 281, now Article 292, of the Labor Code, rand "is limited to money claims, an other cases of injury to rights of a workingman being governed by the Civil Code." Accothis Court ruled that petitioner Marciana Santos, who sought reinstatement, had four [4] years within which to file her compthe injury to her rights as provided under Article 1146 of the Civil Code.

Indeed there is, merit in the contention of petitioner that the four [4]-year prescriptive period under Article 1146 of the NeCode, applies by way of supplement, in the instant case, to wit:

Art. 1146. The following actions must be instituted within four years.

[1] Upon an injury to the lights of the plaintiff.

xxx xxx xxx

[Emphasis supplied]

As this Court stated in Bondoc us. People's Bank and Trust Co., 9 when a person has no property, his job may possiblyonly possession or means of livelihood, hence, he should be protected against any arbitrary and unjust deprivation of Unemployment, said the Court in Almira vs. B.F. Goodrich Philippines, 10 brings "untold hardships and sorrows ondependent on the wage earners. The misery and pain attendant on the loss of jobs thus could be avoided if there be acceof the view that under all the circumstances of this case, petitioners should not be deprived of their means of livelihood."

It is a principle in American jurisprudence which, undoubtedly, is well-recognized in this jurisdiction that one's emploprofession, trade or calling is a "property right," and the wrongful interference therewith is an actionable wrong. 11 The considered to be property within the protection of a constitutional guaranty of due process of law. 12 Clearly then, whenarbitrarily and unjustly deprived of his job or means of livelihood, the action instituted to contest the legality of one's dismissemployment constitutes, in essence, an action predicated "upon an injury to the rights of the plaintiff," as contemplated un1146 of the New Civil Code, which must be brought within four [4] years.

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