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36.

MIROY, Jasmin
Sanchez vs. Medicard Philippines Inc.
G.R. No. 141525, 02 SEP 2005
Facts:
Medicard Philippines, herein respondent appointed petitioner as its special corporate agent. As
such agent, Medicard gave him a commission based on the cash brought in. Later, through
petitioners effort, Medicard and United Laboratories Group of Companies (Unilab) executed a
Health Care Program Contract and then Medicard handed petitioner his commission. And again,
through petitioners initiative, the agency contract between Medicard and Unilab was renewed
for another year. And prior to the expiration of the renewed contract, Medicard proposed to
Unilab, through petitioner, an increase of the premium for the next year but it was rejected by
Unilab. The respondent company also requested petitioner to reduce his commission, but the
latter refused. Subsequently, Unilab decided not to renew health program contract with
respondent and in order not to prejudice its personnel by the termination of their health
insurance, Unilab, through respondent Ejercito, negotiated with Dr. Montoya and other officers
of Medicard. Thus, a new scheme was undertaken and petitioner did not receive any commission
under the new scheme. With that, Petitioner demanded from Medicard payment of his
commission plus damages, but the latter refused to heed his demand.
Petitoner then filed complaint with RTC and said court dismissed the same. An appealed was
filed with CA and the latter affirmed the decision of the lower court. Hence this petition.
Issue:
Whether the Court of Appeals erred in holding that the contract of agency has been revoked by
Medicard, hence, petitioner is not entitled to a commission.
Held:
No. It may be recalled that through petitioners efforts, Medicard was able to enter into a oneyear Health Care Program Contract with Unilab. As a result, Medicard paid petitioner his
commission. Again, through his efforts, the contract was renewed and once more, he received his
commission. Before the expiration of the renewed contract, Medicard, through petitioner,
proposed an increase in premium, but Unilab rejected this proposal. Medicard then requested
petitioner to reduce his commission should the contract be renewed on its third year, but he was
obstinate. So Medicard negotiated directly with Unilab. And said negotiation replaced the
premium scheme.
Furthermore, it is clear that since petitioner refused to reduce his commission, Medicard directly
negotiated with Unilab, thus revoking its agency contract with petitioner. SC hold such
revocation was authorized by Article 1924 of the Civil Code which provides:

Art. 1924. The agency is revoked if the principal directly manages the business entrusted to the
agent, dealing directly with third persons..
Case Digest No. 39_ AMANSEC, Alexandre Chrissa C.
Sumaoang vs Judge RTC Branch XXXI Guimba, Nueva Ecija
GR No. 78173, October 26, 1992
Topic: Implied Trust
Facts:
Andres Sumaoang seeks to annul the Decision rendered by the CFI of Nueva Ecija, which
awarded to private respondent Atty. Jorge A. Pascua the sum of P110,000.00 as attorney's fees.
Sebastian Sumaoang filed with the Bureau of Lands a homestead application of Cadastral Survey
of Santiago, Isabela for a certain lot. He took possession and cultivated the lot but due to illness,
he transferred residence in Tarlac. Florencio and Regino, both surnamed Domingo applied for a
homestead patent over Lot No. 3098 during Sebastian Sumaoang's absence and was granted a
homestead patent. was granted a homestead patent. To protect their interests over the homestead,
petitioner and his brothers, Vitaliano and Pedro Sumaoang, engaged the services of private
respondent Atty. Jorge A. Pascua, promising him, a contingent fee of "not less than one-half
(1/2)" of the entire homestead, if recovered.
After trial, the lower court rendered a decision declaring the homestead patent, as well as the
certificate of title, null and void. The petitioner and his brothers took possession of Lot No. 3098
and subdivided it among themselves.
Not having received compensation for his professional services as counsel, Atty. Pascua filed
sometime in 1979 a complaint for collection of attorney's fees against the petitioner. The trial
court stated that Atty. Pascua was entitled only to "the equivalent of one-half of the property
in its peso valuation" and somehow ordered petitioner and his brothers to pay attorney's fees in
the amount of P110,000.00. The dispositive portion of this decision reads as follows
Petitioner brought the present Petition 10 asking for the nullification of the decision of the CFI.
Petitioner's cause of action is anchored principally on the contention that the award of
P110,000.00 as attorney's fees of Atty. Pascua was unconscionable.
Issue: Whether or not the attorneys fees of Atty. Pascua was unconscionable
Ruling:
We believe and so hold that respondent Atty. Pascua, under the circumstances of this case, must
be regarded as holding the title of the property acquired by him at public sale under an implied
trust in favor of petitioner and his brothers, to the extent of one-half (1/2) of that property.
Among the species of implied trusts recognized by our Civil Code is that set forth in Article
1456.

Accordingly, in the instant case, an implied trust was established upon the land acquired by Atty.
Pascua even though the operative mistake was a mistake of respondent trial judge. Respondent
Judge may be seen to have intended to convey only one-half (1/2) of the land involved as
attorney's fees to Atty. Pascua. Atty. Pascua, however, took advantage of the Judge's mistake in
order to acquire all the 21.3445 hectares for himself. Atty. Pascua obviously knew that under his
contract with his clients, he was entitled to ask only for one-half (1/2) of the land. When he
purchased the entire land at public auction for P110,000.00 (leaving his clients still owing him
P1,500.00), the amount and character of his attorney's fees became unreasonable and
unconscionable and constituted unjust enrichment at the expense of his clients.

40. Pacsa, Gennady G.


OLACO ET.AL VS. CO CHO CHIT ET.AL
G.R. No. 58010. March 31, 1993
Facts: The Philippine Sugar Estate Development Company, Ltd., sold a parcel of land, with the Deed of
Absolute Sale naming Emilia O'Laco as vendee; thereafter, Transfer Certificate of Title No. 66456 was
issued in her name.
Private respondent-spouses Valentin Co Cho Chit and O Lay Kia learned from the newspapers
that Emilia O'Laco sold the same property to the Roman Catholic Archbishop of Manila with assumption
of the real estate mortgage constituted thereon.
Respondent-spouses Valentin Co Cho Chit and O Lay Kia sued petitioner-spouses Emilia O'Laco
and Hugo Luna to recover the purchase price of the land before the then Court of First Instance of Rizal,
respondent-spouses asserting that petitioner Emilia O'Laco knew that they were the real vendees of the
Oroquieta property sold in 1943 by Philippine Sugar Estate Development Company, Ltd., and that the
legal title thereto was merely placed in her name. They contend that Emilia O'Laco breached the trust
when she sold the land to the Roman Catholic Archbishop of Manila.
Petitioner-spouses deny the existence of any form of trust relation. They aver that Emilia O'Laco
actually bought the property with her own money; that she left the Deed of Absolute Sale and the
corresponding title with respondent-spouses merely for safekeeping; that when she asked for the return of
the documents evidencing her ownership, respondent-spouses told her that these were misplaced or lost;
and, that in view of the loss, she filed a petition for issuance of a new title, and on 18 August 1944 the
then Court of First Instance of Manila granted her petition.
Issue: Whether there is a trust relation between the parties in contemplation of law.
Held: Yes. Trust relations between parties may either be express or implied. Express trusts are those
which are created by the direct and positive acts of the parties, by some writing or deed, or will, or by
words evincing an intention to create a trust.
Implied trusts are those which, without being express, are deducible from the nature of the
transaction as matters of intent, or which are super induced on the transaction by operation of law as
matters of equity, independently of the particular intention of the parties. Implied trusts may either be
resulting or constructive trusts, both coming into being by operation of law. Resulting trusts are based on
the equitable doctrine that valuable consideration and not legal title determines the equitable title or
interest and are presumed always to have been contemplated by the parties. They arise from the nature
or circumstances of the consideration involved in a transaction whereby one person thereby becomes
invested with legal title but is obligated in equity to hold his legal title for the benefit of another. On the
other hand, constructive trusts are created by the construction of equity in order to satisfy the demands of
justice and prevent unjust enrichment. They arise contrary to intention against one who, by fraud, duress
or abuse of confidence, obtains or holds the legal right to property which he ought not, in equity and good
conscience, to hold.
In this case, the court cited five instances that prove a trust relationship. First, spouses O Lay Kia
were in possession of all the pertinent documents of the sale from the beginning until the end of the
transaction. Second, there is a previous case of similar facts involving O Lay Kia and her brother on a
different parcel of land decided in her favor. Third, the circumstances leading to Emilia acquiring a title to
the land was dubious. Fourth, until the sale to the church, Emilia actually recognized the trust (by
promising to take care of the transfer to the actual owners as soon as she is able.) A resulting trust is
repudiated if the following requisites concur: (a) the trustee has performed unequivocal acts of repudiation

amounting to an ouster of the cestui qui trust; (b) such positive acts of repudiation have been made
known to the cestui qui trust ; and, c) the evidence thereon is clear and convincing. And finally, fifth, Emilia
actually had no source of income to show how it was possible for her to purchase the land.

39. Campo, Arvic Robert A.


ANDRES SUMAOANG, petitioner,
vs.
HON. JUDGE, REGIONAL TRIAL COURT, BRANCH XXXI, GUIMBA, NUEVA ECIJA and
ATTY. JORGE A. PASCUA, respondents.
On 15 July 1933, the late Sebastian Sumaoang filed with the Bureau of Lands a homestead
application over Lot No. 3098 of the Cadastral Survey of Santiago, Isabela. He then took
possession of and cultivated the lot. Due to illness and the dangerous conditions then prevailing
in Santiago, Isabela immediately after the second World War, he transferred his residence to his
native town of Sta. Ignacia, Tarlac where he died on 22 August 1952. Meanwhile, Florencio and
Regino Domingo applied for a homestead patent over the same lot during Sebastian Sumaoang's
absence. On 11 may 1950, Florencio Domingo was granted a homestead patent over the land on
the strength of which the Register of Deeds of Isabela issued Original Certificate of Title to him.

To protect their interests over the homestead, petitioner and his brothers, Vitaliano and Pedro
Sumaoang, engaged the services of private respondent Atty. Jorge A. Pascua, promising him, a
contingent fee of "not less than one-half (1/2)" of the entire homestead, if recovered.
The homestead was eventually recovered and the Sumaoang brothers took possession of
Lot No. 3098 and subdivided it among themselves. Not having received compensation for his
professional services as counsel, Atty. Pascua filed sometime in 1979 a complaint for collection
of attorney's fees against his former clients. The trial court stated in its judgment dated 31 August
1982 that Atty. Pascua was entitled only to "the equivalent of one-half of the property in its
peso valuation" and somehow ordered petitioner and his brothers to pay attorney's fees in the
amount of P110,000.00. The Deputy Provincial Sheriff then levied upon and sold at public
auction the entire lot of 21.3445 hectares here involved to Atty. Pascua as the sole and hence the
highest bidder, for and in consideration of P110,000.00 as partial payment of the judgment
obligation.
Petitioner asked the court for nullification of the 31 August 1982 decision of the Guimba
CFI, as well as the writ of execution, the notice of levy and auction sale and the certificate of sale
issued in favor of Atty. Pascua. Petitioner's cause of action is anchored principally on the
contention that the award of P110,000.00 as attorney's fees of Atty. Pascua was unconscionable.
Issue: Whether or not Atty. Pascua may claim the entire property involved in the litigation as
attorneys fees.

Held: No. It is unconscionable for the victor in litigation to lose everything he won to the fees
of his own lawyer. We believe and so hold that respondent Atty. Pascua, under the circumstances
of this case, must be regarded as holding the title of the property acquired by him at public sale
under an implied trust in favor of petitioner and his brothers, to the extent of one-half (1/2) of
that property.
There is an implied trust when a property is acquired through mistake or fraud, the person
obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the
person from whom the property comes. The "mistakes" or "fraud" that results in an implied trust
being impressed upon the property involved, may be the mistake or fraud of a third person, and
need not be a mistake or fraud committed directly by the trustee himself under the implied trust.
Accordingly, in the instant case, an implied trust was established upon the land acquired
by Atty. Pascua even though the operative mistake was a mistake of respondent trial judge.
Respondent Judge may be seen to have intended to convey only one-half (1/2) of the land
involved as attorney's fees to Atty. Pascua. Atty. Pascua, however, took advantage of the Judge's
mistake in order to acquire all the 21.3445 hectares for himself. Atty. Pascua obviously knew that
under his contract with his clients, he was entitled to ask only for one-half (1/2) of the land.
When he purchased the entire land at public auction for P110,000.00 the amount and character
of his attorney's fees became unreasonable and unconscionable and constituted unjust enrichment
at the expense of his clients.
The consequences of an implied trust are, principally, that the implied trustee shall deliver the
possession and reconvey title to the property to the beneficiary of the trust, and to pay to the
latter the fruits and other net profit received from such property during the period of wrongful or
unconscionable holding, and otherwise to adjust the equities between the trustee holding the
legal title and the beneficiaries of the trust.