Iglesia Filipina Independiente v.

Heirs of Bernardino Taeza

FACTS
IFI, a duly registered religious corporation, owned 31,038 sqm of land in Tuguegarao (Lots A, B, C, and
D).
Supreme Bishop Rev. Ga sold Lot D to a Bienvenido de Guzman, and Lots A and B to Taeza for P100k
installment + mortgage. Taeza defaulted on payments.
o The Parish Council, represented by Laymen Committee officers, instituted complaint for
annulment of sale to Taeza. This was dismissed for lack of personality to file.
After expiration of Gas term, he filed an action with the SEC for nullity of elections of his successor,
Bishop dela Cruz.
o While this was pending, IFI, represented by Supreme Bishop Ganno, filed an annulment of sale
case against Ga and taeza but this was dismissed without prejudiced since the election case
had not yet been resolved.
o Later, the SEC resolved the case against Ga.
Meanwhile, Taeza registered the lots in his name and TCTs were issued and he occupied a portion of
the land. IFI demanded him to vacate and he refused.
Another annulment of sale case was filed (this time, through Supreme Bishop Most Rev. Pasco) against
Taeza and it was held that the sale was null and void.
o CA reversed ruled that as a corporation sole, there was a valid sale through the Supreme
Bishop, who was the authorized administrator of all properties and the official representative.
Furthermore, there were no provisions in IFIs constitution granting other officers the authority to
enter into contracts.
o IFI filed present petition for review on certiorari.

ISSUES + RULING
Did Supreme Bishop Ga have authority to enter into a contract of sale in behalf of IFI? NO.
IFI: there was no authority, therefore, no consent to the sale. There was no compliance with Art IV (a) of
their Canons, which states that there must be conformity of the laymens committee, parish priest,
Diocesan Bishop, and sanctioned by the Supreme Council with the approval of the Supreme Bishop
(ALL must approve).
o In the alternative, IFI contends that if it was not null and void, then it should nevertheless be
unenforceable because there was no approval.
o Witness testimony: however, the Canons do not state how the approval must be made.
Therefore, such consent/approval may be assumed unless there is opposition. CA overlooked
the Councils opposition and objection made known to Ga.
o Absent approval, contract is unenforceable unless ratified under Art. 1403, CC (contracts
entered into without authority).
Since there was no authority, the transfer to Taezas name was through mistake. Under Art. 1456, CC, if
a property is acquired through mistake or fraud, [Taeza], by force of law, is considered a trustee of an
implied trust for the benefit of the person from whom the property comes.
o This is not trust in the technical sense of a typical trust. In a constructive trust, there is neither a
promise nor any fiduciary relation to speak of and the so-called trustee neither accepts any trust
nor intends to hold the property for the beneficiary. (created by construction of equity and
fairness)
 o In constructive trusts, trustee Taeza may acquire the property through prescription even if he
does not repudiate the relationship. The beneficiary must bring an action for reconveyance
before prescription bars him (10 years).
Taezas TCT was issued on 7 February 1990, action was filed on 19 January 1990, clearly within the
period. Subject property must be returned.