Cristobal vs. Gomez (digest)

Cristobal vs. Gomez

50 Phil. 810

Facts:

Epifanio Gomez owns two parcels of land located in the Jabay, Municipality of Bacoor, Cavite and a lot located in town of Bacoor, Cavite. He sold the property with Pacto de Retro to Luis Yangco, redeemable in five years. The period to redeem expired but Yangco extended it. Gomez approached Bibiano Banas , a relative, to secure a loan. The latter only agreed if Gomez’s brother Marcelino and sister Telesfora would also be responsible for the loan.

On 12 August 1907, Marcelino and Telesfora entered into a “private partnership in participation” for the purpose of redeeming the property from Yangco. Epifanio was present when said agreement was discussed and assented to. The capital consisted of P7000, of which P1500 came from Marcelino, and P5500 from Telesfora. The agreement provided that the property redeemed will be placed in the name of Marcelino and Telesfora, the income, rent, and produce of the property would go to the two and that the property shall be returned to their brother as soon as the capital employed have been covered. Epifanio should also manifest good behavior in the opinion of Marcelino and Telesfora.

More than a year later, Epifanio Gomez dies leaving Paulina Cristobal and their four children. Meanwhile, Marcelino Gomez continued to possess the property, improved it, and earned income from it. He acquired exclusive rights over it when Telesfora conveyed her interest to him. He sold the property with pacto de retro to Banas, redeemable within five years. On April 1, 1918, he redeemed the property from Banas.

Subsequently, Paulina and children filed action to recover property from Marcelino. They claimed that the capital had been covered by the property’s income, hence, the same should be returned to them. The lower court granted their petition. Marcelino appealed. Hence the present petition.

Issue: Whether there was acceptance by Epifanio of the trust agreement.

Held: Yes. Contrary to defendant’s claim that the agreement was kept secret from Epifanio, the testimony of Banas stated that Gomez was present when the arrangement for the repurchase of the property was discussed. Banas even told Epifanio to be thankful that the latter was able to recover the property from Yangco.

Defendants also claim that because Epifanio had not accepted the donation in a public document, the same is unenforceable. This is untenable. Epifanio need not accept in accordance with formalities of donations. The court said that the partnership agreement should be viewed as an express trust, not as an intended donation.

THUS: Heirs of Epifanio entitled to recover the property.