Filipino Federation of America, Inc. v. Cubico

• Decision Date: 21 March 1963
• Docket Number: No. 4119,4119
• Citation: 380 P.2d 488,46 Haw. 353
• Parties: FILIPINO FEDERATION OF AMERICA, INCORPORATED, a California Corporation v. Alfonzo CUBICO, Eleuterio Bulawan, Chrisanto Bolilan, Alfonzo Nagal, Gregorio Ordista, and Arcadio Amper.
• Court: Hawaii Supreme Court

Page 488

380 P.2d 488

46 Haw. 353

FILIPINO FEDERATION OF AMERICA, INCORPORATED, a California Corporation v. Alfonzo CUBICO, Eleuterio Bulawan, Chrisanto Bolilan Alfonzo Nagal, Gregorio Ordista, and Arcadio Amper.

No. 4119.

Supreme Court of Hawai'i.

March 21, 1963.

Syllabus by the Court

1. Under H.R.C.P., Rule 52(a), which provides that findings of fact of the trial judge will not be set aside unless clearly erroneous, this court will not set aside findings unless it is left with a definite and firm conviction that a mistake has been committed by the trial judge.

2. A corporation has no beneficial interest in property under two ambiguous trust deeds, where it was found by the trial judge that the corporation did not furnish the funds for the purchase of the property or the construction of improvements thereon and that it was not the intention of the parties that the corporation should be the beneficial owner, and such findings were not clearly erroneous.

3. Where there is a conflict of interest among the several cestuis que trust, the presence alone of the trustee as a party is insufficient and all adverse cestuis que trust must be made parties to the action either as plaintiffs or defendants.

4. A court cannot undertake to hear and determine questions affecting the interests of absent persons unless they are made parties and have had an opportunity to come into court.

5. Absence of indispensable parties can be raised at any time even by a reviewing court on its own motion.

6. The reopening of a case for the introduction of further evidence is a matter within the discretion of the trial judge and the exercise of such discretion will not be disturbed except in the case of abuse.

7. When an action has been instituted by one claiming the legal and beneficial ownership of property in opposition to the interests of the beneficiaries of a trust, he is not entitled to an attorney's fee out of the corpus of the trust estate.

Shiro Kashiwa, Honolulu, for appellant.

Herbert K. H. Lee, Michiro Watanabe, Honolulu, for respondent.

Before TSUKIYAMA, C. J., and CASSIDY, WIRTZ, LEWIS and MIZUHA, JJ.

MIZUHA, Justice.

Plaintiff-appellant Filipino Federation of America, Incorporated, a California corporation, instituted suit in the circuit court of the first circuit to acquire the legal title to and the beneficial interest in certain parcels of land and improvements thereon situated in the City of Honolulu, Oahu, Hawaii.

The plaintiff Filipino Federation of America, Incorporated, was organized for eleemosynary purposes in 1927 by the late Hilario Camino Moncado who was its president and treasurer from the date of its incorporation until his death in 1956.

Plaintiff extended its activities to Hawaii in 1928 when several of its members, including the defendant Alfonzo Cubico, were sent from California to organize branches on the islands of Oahu and Hawaii. Later branches were also established on the islands of Maui, Lanai and Kauai. About 1931, there came into being in the then Territory of Hawaii, what was known as the Spiritual Division of the Filipino Federation of America, Incorporated. Section 12(a) of the 1936 amended bylaws of the Filipino Federation of America, Incorporated, specifically deals with the corporation's activities in Hawaii. Section 12(a)(9) provides as follows:

'Any member of the material group who joins the Spiritual Division of the Federation shall not be exempt from paying his monthly dues. The said member who joins the Spiritual Division shall be obliged to pay his regular monthly dues to the branch where he formerly belonged.'

In the membership section of the bylaws, there is a provision for various types of membeship but there is no provision for membership in the Spiritual Division. Although there is another section in the bylaws that deals with the activities of the Filipino Federation of America, Incorporated in the Philippine Islands there is no provision for membership in the Spiritual Division similar to that in Hawaii. The only reference in the entire bylaws of the Filipino Federation of America, Incorporated with reference to membership in the Spiritual Division is the above-mentioned section 12(a) which governs the activities of the Federation in the Territory of Hawaii.

The members of the Spiritual Division in Hawaii were distinguishable from the members of the Material Division. ¹ They were all members of the Filipino Federation of America, Incorporated, but Spiritual Division members differed from the members of the Material Division for they emphasized the moral precepts of the Filipino Federation of America, Incorporated, and held peculiar beliefs and practices which were not shared by the material members. They regarded themselves as sharing a common faith and fellowship as members of the Spiritual Division and all of their activities were separate and distinct from those of the Material Division and in turn were so regarded by the members of the Material Division.

In 1941 there were about 1,000 members in the Spiritual Division organized into branches on the major islands in the Hawaiian chain, namely, Oahu, Maui, Hawaii, Kauai and Lanai. On these islands, the members of the Spiritual Division held regular meetings and practiced their peculiar beliefs which were not shared by the material members. Membership in the Material Division numbered between 1,000 and 2,000 members.

In 1940 defendant Alfonzo Cubico was appointed director of the Spiritual Division in Hawaii and was placed in full charge of its activities. In 1941 at the suggestion of President Hilario Moncado, defendant Cubico began purchasing the following fifteen parcels of land, which, together with the improvements thereon, are the subject of the present controversy.

Lots 1, area 7,732 aq. ft.

2, area 6,000 sq. ft.

6, area 5,000 sq. ft.

38, area 11,526 sq. ft.

42, area 9,590 sq. ft.

43, area 8,240 sq. ft.

44, area 9,224 sq. ft.

46, area 10,113 sq. ft.

47, area 9,996 sq. ft.

48, area 11,009 sq. ft.

49, area 9,728 sq. ft.

50, area 9,652 sq. ft.

51, area 8,730 sq. ft.

52, area 7,807 sq. ft.

53, area 8,659 sq. ft.,

total area 105,952 sq. ft., all as shown on Map 13 filed in the Office of the Assistant Registrar of the Land Court of the State of Hawaii with Land Court Application No. 47 of P. C. Jones, Limited. All of these lots abut on Kalaepaa Drive in upper Kalihi Valley, Honolulu, Oahu, Hawaii. The improvements thereon are as indicated in the footnote. ²

Defendant Alfonzo Cubico acquired title by deeds of trust to Lots 1, 2, 6, 38, 46, 47, 48, 49, 50, 51, 52 and 53 on June 2, 1944 (Exhibit A in evidence) and to Lots 42, 43 and 44 on January 15, 1945 (Exhibit B in evidence), under the following written and declared trusts:

'TO HAVE AND TO HOLD the same unto the said Grantee as Trustee for the Filipino Federation of America, Inc., Spiritual Division, a California corporation, the business address of which corporation in said Territory is Watumull Building, 1166 Fort Street aforesaid, and the successors and assigns of said Trustee, in trust for the following uses and purposes and with the following powers:

'1. To hold the legal title to said premises for the benefit of said corporation, and to manage, use or permit the use of (by members of said corporation), improve, let, lease, sell on time or for cash or agree so to do, or in any manner otherwise dispose of or deal with, or agree so to do, the said property or any portion or portions thereof, or interest therein, as in the sole judgment of said Trustee shall be in the best interests of the said corporation and the members thereof, it being a condition of this conveyance that any agreement made with respect to, or any disposal of, the said premises or any portion thereof or interest therein, by said Trustee shall be binding and conclusive upon said corporation and all members thereof, and upon the trust which said Trustee represents.

'2. In the event of the death, removal, incompetency or other incapacity of the Trustee, a successor Trustee may be appointed by said corporation by instrument in writing duly executed and filed with said Assistant Registrar, and immediately upon such filing said successor Trustee shall ipso facto be vested with and succeed to the title to said trust property and all rights, powers and duties of the original or preceding Trustee without the necessity of any other or further act.'

In addition to the fifteen lots purchased by defendant Alfonzo Cubico, there were 48 other lots in the subdivision in upper Kalihi Valley, of which 20 lots were purchased by one or more members of the Spiritual Division and only one of which was purchased by a member of the Material Division.

President Hilario Camino Moncado died on April 8, 1956. Victor Ramajo, who was then vice-president, became the acting president and made his first trip to Hawaii in September 1956. The great majority of the members of the Spiritual Division refused to recognize Mr. Victor Ramajo as their leader and in December 1956 formed the Moncado Foundation of America, Limited, a Hawaii corporation, with Diana Toy Moncado, widow of President Moncado, as president.

On June 7, 1948 defendant Alfonzo Cubico, as trustee, conveyed Lots 1, 2, 6 and 38 to defendant Eleuterio Bulawan who immediately reconveyed said lots to defendant Alfonzo Cubico. On August 22, 1956, Alfonzo Cubico conveyed Lots 6 and 38 to Diana Toy Moncado and said Diana Toy Moncado, by deed dated December 19, 1956, conveyed said Lots 6 and 38 to defendant Eleuterio Bulawan. On the same date Alfonzo Cubico conveyed Lots 42, 43 and 44 to defendant Crisanto Bolilan, Lots 46, 47 and 48 to defendant Alfonzo Nagal, Lots 49, 50 and 51 to defendant Gregorio Ordista, and Lots 52 and 53 to defendant Arcadio Amper. These five, with Alfonzo Cubico holder of Lots 1 and 2, are the only defendants named in this action. The deeds under which defendants now hold title do not indicate any trust.

Plaintiff...