G.R. No. L-20274. October 30, 1969
ELOY MIGUEL AND DEMETRIO MIGUEL, PETITIONERS, VS. THE COURT OF APPEALS AND ANACLETA M. VDA. DE REYES, RESPONDENTS.
CASTRO, J.:
Petition for review on certiorari
of the decision and the two resolutions of the Court of Appeals promulgated on
May 10, July 23, and September 5, all in the year 1962, in G.R.-16497-R,
entitled “Eloy MIguel and Demetrio Miguel, plaintiffs-appellees
vs. Anacleta M. vda. de
Reyes, defendant-appellant.”
During the Spanish regime and prior to July 26, 1894, Eloy
Miguel, then single and resident of Laoag, Ilocos Norte, went to Isabela and
for some appreciable period of time stayed with his kinsman Juan Felipe in
barrio Ingud Norte, municipality
of Angadanan. There he spotted an uncultivated parcel of
land, one hectare of which he forthwith occupied, and then cleared and planted
to corn. After the Philippine Revolution, he returned to Laoag, Ilocos Norte and took a
wife. In the early years of the ensuing
American regime, Eloy Miguel returned to Ingud Norte with his family, resettled on the same land,
cultivated and planted it to rice, declared it for taxation purposes, and paid
the annual realty taxes thereon.
During the year 1932, Leonor Reyes, an
ambulatory notary public and husband of the private respondent Anacleta M. Reyes,
used to visit barrio Ingud Norte, looking for documents to notarize. He and Eloy Miguel
became acquaintances. Later, Leonor Reyes asked Miguel if he wanted to secure
expeditiously a title to his landholding.
Having received an affirmative answer and after Eloy
Miguel had handed to him the tax declaration and tax receipts covering the
land, Leonor Reyes prepared and filed a homestead
application in the name of Eloy Miguel and,
furthermore; promised to work for the early approval of the said
application. Reyes handed to Miguel the
receipt for the filing fee (exh. A) corresponding to
the homestead application, advising the latter to keep it, but he (Reyes) withheld
other papers including the tax declaration and tax receipts, assuring Miguel
that he would return them as soon as the homestead patent was issued in
Miguel’s name. Reyes likewise advised
Miguel to cease paying the land taxes until the patent shall have been issued
by the Bureau of Lands.
After a long wait and
becoming impatient about the issuance of the promised title, Eloy Miguel inquired from Leonor
Reyes about the status of his application.
Reyes promised to send a letter-tracer to the Bureau of Lands, and, in
fact, asked Eloy Miguel to affix his thumbmark to a blank paper upon which was supposed to be
written a letter-tracer. However, World
War II broke out in the Pacific, and Miguel did not hear of and about his
homestead application; after the war he had no way of ascertaining the outcome
of his application because Leonor Reyes had died
meanwhile during the Japanese occupation of the Philippines.
For the services rendered
and still to be rendered by Leonor Reyes in preparing
the homestead application and in securing the issuance of the correspondent
patent, Miguel gave the former 1/5 of his yearly harvest from the land. After the death of Leonor
Reyes, Miguel continued to deliver an equal number of cavanes
of palay to the former’s
widow, Anacleta M. Vda. de
Reyes, who likewise promised to help him secure the necessary homestead
patent.
Meanwhile, Demetrio Miguel helped his father, Eloy
Miguel, clear and cultivate the land.
Sometime in 1932, on the occasion of the marriage of Demetrio,
Eloy Miguel ceded to Demetrio
14 hectares of the southern portion of the land as a gift proper nuptias. Demetrio forthwith declared the said portion for taxation
purposes in his name, as evidenced by tax declaration 7408 (exh.
G).
However, unknown to Eloy and Demetrio Miguel, Leonor Reyes on June 25, 1935 filed sales application 20240 in the name of
his wife, Anacleta M. Vda.
de Reyes (hereinafter referred to as the private respondent), covering the same
parcel of land occupied and cultivated by the Miguels
and the subject of Eloy Miguel’s homestead of application. The sales application was duly acknowledged
by the Bureau of Lands on June 29, 1935, and a sale at public
auction took place on August 3, 1939
whereat the private respondent was the sole bidder. The Director of Lands awarded the land to her
on March 7, 1940, the value
of which was to be paid on installments.
Sometime in 1950, the private respondent had the land surveyed
by Maximo Lorenzo who, in the course of the survey,
assured Eloy Miguel that the land was being surveyed
in the latter’s name. The private
respondent, who was present during the survey, made the same assurance to Eloy Miguel.
However, because his suspicions were aroused by the act of the private
respondent of having the land surveyed, Eloy Miguel
directed his son, Demetrio, to inquire from the office of the
district land officer of Ilagan, Isabela,
about the status of his (Eloy’s) homestead
application. Demetrio
discovered that their land was covered by the sales application of the private
respondent. Eloy
Miguel forthwith filed on February 16,
1950 a protest with the Bureau of Lands against sales application
20240 of the private respondent.
Consequently, on February 21,
1950, the Director of Lands ordered an investigation. Hearing of the protest was scheduled for May 26, 1950 by deputy public lands
inspector Alejandro Ramos of Land District 4, Bureau of Lands, Ilagan, Isabela, but was
postponed at the instance of the private respondent. The hearing was then reset for February 10, 1951, by assistant public
lands inspector Hilarion Briones. However, the Miguels
had in the interim discovered that notwithstanding their protest and the investigation
ostensibly being conducted by the administrative branch of the Government,
sales patent V-522 and original certificate of title P-1433, covering the
parcel of land in question, were granted and issued to the private respondent
on January 10, 1951 and January 22, 1951, respectively.
Consequently, on February
17, 1951 Eloy and Demetrio
Miguel lodged a complaint with the Court of First Instance of Isabela against the private respondent, Anacleta
M. Vda. de Reyes, the Director of Lands, and the
Register of Deeds of Isabela, for the annulment of
sales patent V-522 and the cancellation of original certificate of title
P-1433. That case, docketed as civil
case 315 of the Court of First Instance of Isabela,
was dismissed by that court on the grounds that the plaintiffs did not have
personality to institute the action, and that it was prematurely filed – the Miguels not having exhausted all administrative remedies,
more specifically not appealing to the Secretary of Agriculture and Natural
Resources from the grant by the Director of Lands of the patent to the private
respondent. On appeal to this Court, the
dismissal was affirmed on the second ground (G.R. L-4851, promulgated July 31,
1953).
On September 7, 1953, Eloy and Demetrio Miguel commenced the present action (civil case
616) in the Court of First Instance of Isabela
against the private respondent to compel her to reconvey
to them the land covered by the abovementioned patent and title. After due hearing, the trial court found that
Eloy Miguel “has always been, and up to this
time, in physical possession of the whole tract of land in question under
claim of ownership thru occupancy, he having occupied and cultivated the land
since the Spanish regime;” that he was a homestead applicant way back in 1932
for the land possessed by him; that there exists a trust relationship between
the Miguels and the private respondent and her
deceased husband, Leonor Reyes, a notary public, with
respect to the same property, without which relationship Eloy
Miguel would himself have personally attended to his own application; and that,
through fraud and misrepresentations, Leonor Reyes
caused the filing and approval of an application and the issuance by the Bureau
of Lands of a sales patent covering the property in the name of his wife, the
private respondent, without the consent and knowledge of the Miguels. The lower
court, however, held that reconveyance is not proper
because the land in question is not the private property of the Miguels since time immemorial but remains a part of the
public domain, and instead declared that Eloy Miguel
“should be given priority to acquire the land under the homestead
provisions of the Public Land Law.” Upon the foregoing premises, the court
a quo rendered judgment ordering (1) the Director of Lands to cancel
patent V-522 issued in the name of Anacleta M. Vda. de Reyes, (2) the Registrar of Deeds of Isabela to cancel original certificate of title P-1433 in
the name of Anacleta M. Vda.
de Reyes and to return Patent V-522 to the Bureau of Lands, and (3) the
Director of Lands to give due course to the homestead application of Eloy Miguel over the land.
The private respondent appealed to the Court of Appeals
(hereafter referred to as the respondent Court) which dismissed the complaint
upon the ground that the judgment appealed from could not and did not bind the
Director of Lands and the Registrar of Deeds of Isabela
who were not parties thereto. Eloy and Demetrio Miguel
(hereafter referred to as the petitioners) filed a motion for reconsideration,
wherein they argued that while the trial court might have incurred error in the
legal conclusions drawn from its own findings of fact, the respondent Court was
not legally precluded by the Rules of Court and applicable jurisprudence to
modify the judgment of the trial court, so as to make it conform to the
evidence, and to grant the relief of reconveyance
sought in the action, in which action the Director of Lands and the Register of
Deeds of Isabela are not proper or necessary
parties. The motion for reconsideration
was denied in an extended resolution of the
respondent Court promulgated on July 23, 1962, which ruled that the petitioners should
have appealed from the decision of the trial court. A second motion for reconsideration was
denied in a minute resolution dated September 5, 1962.
The petitioners are now before us on appeal by certiorari, assigning as errors (1) the Court of Appeals’ holding that
they should have appealed from the decision of the trial court, and (2) its
finding that, assuming that reconveyance in favor of
the petitioners as mere appellees is still proper,
the cases cited in the latter’s first motion for reconsideration are not in
point.
It has been postulated – and, we think, correctly – that the
Supreme Court is vested with ample authority to review matters not assigned as
errors in an appeal, if it finds that their consideration and resolution are
indispensable or necessary in arriving at a just decision in a given case.[1]
Thus, before passing upon the foregoing assigned errors, we shall first resolve
in seriatim the matters raised in both the
appealed decision and resolutions of the respondent Court because to do so is
imperative in arriving at a fair and equitable adjudication of this case.
1. The respondent Court
points up the failure of the petitioners to present a petition for judicial
confirmation of imperfect title, if they indeed had been in possession of the
land since July 26, 1894,
in accordance with the Public Land Act. Eloy Miguel
should not, however, be expected to file such a petition because all along he
was relying on the solemn assurances of Leonor Reyes
and later his wife, the private respondent, that they were in the process of
securing a homestead patent for him.
2. The respondent Court
observed in its decision that the evidence on the allegation that Leonor Reyes acted fraudulently in applying for the purchase
of the land and later transferring his right to his wife, is sharply
conflicting, and that even granting that there was fraud in the obtention of the issuance of the patent, any objection
based on that ground should have been interposed within one year from the date
of its issuance.
We cannot give our approval to this view. As found by the court below the petitioners,
have proven by preponderance of evidence the fraud perpetrated by the private
respondent and her husband on Eloy Miguel. The weight of evidence leans heavily in favor of the fact of occupation and
cultivation by Eloy Miguel of the land from prior to July 26, 1894. This was the finding of the lower court –
which belies the private respondent’s allegation that Eloy
Miguel entered as her tenant only in 1935.
There is also the receipt, exh. A, evidencing
the payment of a filing fee for a homestead application, which receipt, in the
possession of Eloy Miguel, raises at least the
presumption that he had filed a homestead application. That the records of the Bureau of Lands or of
any of its units, particularly the district land office at Ilagan,
Isabela, do not show that such application was ever
filed, supports the petitioners’ thesis, concurred in by the trial court, that
the blank paper which Eloy Miguel thumbmarked at the behest of Leonor
Reyes was used by the latter to withdraw the former’s
application instead of to trace the application. Finally, there is the private respondent’s
and her husband’s act of misleading the Bureau of Lands by falsely stating in
their application for a sales patent that there was no improvement on the land,
when, as found by the lower court, the land had already been cultivated and
improved by Eloy Miguel since 1932, by the
latest. (This misleading statement,
noted by the court a quo on
exh. 15 dated March 28, 1939 of the private
respondent, significantly, is not impugned by the latter.) In fact, the lower
court observed that the private respondent herself affirmed on the witness
stand that Eloy Miguel was in 1935 already working on
the land, although supposedly as her tenant.
Therefore, at the time the private respondent’s sales patent application
was filed in 1935, Leonor Reyes and she led the
Bureau of Lands to believe that the land was uncultivated and unoccupied by
other claimants. The very relevant
question arises: Why did the Reyes
spouses conceal from the Bureau of Lands the fact that the land was occupied
and being cultivated by the Miguels, when there
existed no prohibition against having the land cultivated for them by
tenants? There are only two logical
reasons for the mysterious conduct of the Reyes spouses. First, had they stated in their sales
application that the whole parcel of land was under cultivation by the
petitioners, the Director of Lands would have in all probability discovered
that the land applied for was covered by the prior homestead application of Eloy Miguel and most likely would have disapproved the
sales application of the private respondent.
Second, had a survey of the land been conducted earlier, this would have
aroused the suspicions of Eloy Miguel earlier and
enabled him to discover much sooner the fraud perpetrated by Leonor Reyes before the sales application of the private
respondent was given due course. Indeed,
the private respondent waited until she had just about paid all the installments
on the land before ordering a final survey thereof. It was this survey which aroused Eloy Miguel’s suspicions and enabled him and his son to
discover the fraud perpetrated upon them.
The respondent Court’s holding that any objection based on fraud
should have been interposed within one year from the issuance of the sales patent, has no relevance to the case at bar. This is an action for the enforcement
of a constructive trust – the ultimate object of which is the reconveyance of property lost through breach of
fiduciary relations and/or fraud.[2] Therefore, it can be filed within four years
from the discovery of the fraud 23. And
since the petitioners discovered the fraud committed against them by the Reyes
spouses in 1950, they had until 1954 within which to bring this action. This action was seasonably instituted because
the complaint was filed on September 7, 1953.
3. The respondent Court also
held that the only remedy available at the time the action below was
instituted, was for the Government (through the Solicitor General) to file an
action for the reversion of the
land to the public domain based on the illegality of the grant – a suit which a
private person is not authorized to file.
The foregoing rule is correct but inapplicable in this case, which, as
earlier mentioned, is an action for reconveyance of a
piece of land through enforcement of a constructive trust. For this same reason, the provision of Land
Administrative Order 6 of the Secretary of Agriculture and Natural Resources,
cited in the respondent court’s decision, is likewise inapt.
4. The respondent Court
attributes error to the lower court’s finding that Eloy
Miguel filed a homestead application for the land in question, stating that no
other evidence was presented to show that such application was filed except the
testimony of Eloy Miguel and the receipt for the
filing fee of a homestead application; and that if such application was really
filed, some trace or tell-tale evidence of it would be extant, and the
application could have been easily reconstituted after the liberation in 1945
when the Government adopted a policy to enable all public land applicants to
reconstitute their applications. It is
too well-settled to require any citation of authority that the lower court’s
findings of fact are entitled to considerable weight, especially with respect
to the appreciation of the testimony of witnesses on the stand, since it was in
the best position to observe the demeanor of the witnesses. The testimony of Eloy
Miguel regarding his filing of a
homestead application over the parcel of land – as found by the lower court –
should not therefore lightly be brushed aside.
The receipt, exh. A, for the filing of the homestead
application raises a presumption in favor
of Eloy Miguel’s having filed such an
application. As earlier explained, if no
trace of the said application could be found among the records of the Bureau of
Lands or of any of its units, particularly the district land office at Ilagan, Isabela, it is because through
fraud – i.e., by asking Eloy Miguel to thumbmark a blank piece of paper – Leonor
Reyes succeeded in withdrawing the application of Miguel. And he did this to pave the way for his wife,
the private respondent herein, herself to apply for the land under a sales
application. Of course, having relied on
the assurances of the Reyes spouses that they would help him secure a homestead
patent, Eloy Miguel found no need to reconstitute
his homestead application. It is not
even farfetched to suppose that Miguel, being illiterate, never even came to
learn of the Government’s policy of enabling public land applicants to reconstitute
their applications.
5. Coming now to the assigned
errors, the respondent Court’s view is not correct that it cannot grant the
relief of reconveyance because the petitioners did not appeal from the decision of the lower
court. There exist sufficient bases,
hereinafter to be discussed, for the respondent Court to award said relief in
the exercise of its broad appellate powers to affirm, reverse or modify the
judgment or order appealed from.
To start with, the petitioners cannot entirely be blamed if they thought
it the better part of prudence not to appeal.
For although it did not incorporate a decree of reconveyance,
still the decision of the court below was favorable to them because it
vindicated their actual possession of the land under a bona fide
claim of ownership since the Spanish regime, and adjudged them as having a
better right to the land and the priority to own it under the Public Land
Act. Besides, it was their legitimate desire to avoid incurring additional expenses
incident to the bringing of an appeal.
However, as appellees in the Court of
Appeals, the petitioners pointedly called the attention of the respondent
Court in their brief to several questions decided against them in the court
below. Thus, working on the theory that
it was plain error for the trial court to order the Director of Lands and the
Registrar of Deeds of Isabela to implement its
decision, the petitioners called the attention of the respondent Court to the
precise nature of the action below in which the Director of Lands and the Register of Deeds of Isabela
need not be impleaded.
“. . . The
action in this case is reconveyance, the purpose of
which is to compel the defendant
to return to the plaintiffs-appellees the land in
question which she has acquired through fraudulend
means. Such being the case, it would
have been utterly improper for the plaintiffs to have impleaded the Director of Lands or the
Register of Deeds of Isabela inasmuch as the action
is personal in nature directed against the person of the defendant.”
The petitioners likewise
called the attention of the respondent Court to the trust relationship
existing between them, on one hand, and the Reyes spouses, on the other, which
was breached by the latter. Thus, to
justify the reconveyance to them of the property,
they stated that:
“Moreover, a situation of trust has been created in the
instant case between the plaintiff and the defendant-appellant’s deceased
husband upon whom the plaintiff Eloy Miguel relied
through his (Reyes’) representations that the corresponding title to said land
would be secured in favor of the plaintiff Eloy
Miguel. The evidence likewise shows that
the defendant Vda. de Reyes promised the plaintiff to
continue the work began by her late husband with the ultimate result of securing
the said homestead patent and title in favor of the plaintiff Eloy Miguel.
Inasmuch as the said promise was violated by the defendant who secretly
worked toward the acquisition of the said land for her own self, fraudulently
and stealthily, no prescription can run as against plaintiffs’ right to claim
ownership of the said property.”
We held in one case that appellants need not make specific
assignment of errors provided they discuss at length and assail in their brief the
correctness of the trial court’s findings regarding the matter. Said discussion warrants the appellate court
to rule upon the point because it substantially complies with sec. 7, Rule 51,
of the Revised Rules of Court, intended merely to compel the appellant to
specify the questions which he wants to raise and be disposed of in his
appeal. A clear discussion regarding an error allegedly committed by the trial court accomplishes the
purpose of a particular assignment of error.[3]
Reasoning a fortiori from the abovecited
authority, an appellee who occupies a purely
defensive position and is not required to make assignments of errors, need only
discuss or call the attention of the appellate court in his brief to the
issues erroneously decided against him by the trial court.[4]
Here the petitioners (appellees in the Court of
Appeals) stated quite explicitly in their brief that since the action was for reconveyance, it was utterly improper to implead the Director of Lands and the Register of Deeds –
in effect, calling the attention of the respondent Court to a plain error
committed by the trial court in ordering the Director of Lands and the Register
of Deeds to nullify the sales patent and original certificate of title issued
to the private respondent. And, in
discussing the trust relationship between the Miguels
and the Reyes spouses which was breached by the latter, the petitioners (as appellees) also clearly brought to the attention of the
respondent Court a valid ground disregarded by the lower court as a basis for
granting the relief of reconveyance.
Moreover, the Rules of
Courts[5] and jurisprudence authorize a tribunal to
consider errors, although unassigned, if they involve (1) errors affecting the
lower court’s jurisdiction over the subject matter, (2) plain errors[6] not specified, and (3) clerical errors. Certainly, the mandate contained in
the dispositive portion of the lower court’s decision
and addressed to the Director of Lands and the Register of Deeds, who were not
parties to the case, is a plain error which the respondent Court properly
corrected. As afore-narrated, the
petitioners (as appellees) brought this error to the
attention of the respondent Court.
Another plain error which the respondent Court should have considered
was the court a quo‘s conclusion that the land in litigation was still part of the
public domain, in the face of the parties’ mutual allegations to the contrary
and despite the admitted fact that a sales patent and an original certificate
of title over the land had already been issued, thus segregating the land from
the public domain and making it private land.
It is noteworthy that the
complaint for reconveyance was not dismissed by the
trial court. What it denied was merely
the relief or remedy of reconveyance. However, in its decision, the trial court
made certain findings of fact which justified the relief of re-conveyance –
e.g., that Eloy Miguel “has always been, and up
to this time, in physical possession of the whole tract of land in question
under claim of ownership thru occupancy, he having occupied and cultivated the
land since the Spanish regime;” that there was a trust relationship
between Eloy Miguel and the Reyes spouses; and that
the Reyes spouses have fraudulently and in bad faith breached that trust. Hence, in reiterating their positions before
the respondent Court on the private nature of the land, on the impropriety of
impleading the Director of Lands and the Register of
Deeds of Isabela, and on the existence of a trust
relationship between the petitioners and the Reyes spouses, the petitioners
were in point of fact inviting the respondent Court’s attention to questions
erroneously decided against them by the trial court, in the hope that the
respondent Court would render judgment in accordance with the facts adjudged
by the trial court as proven.
“If the complaint states a claim upon which any relief can be
given, it is immaterial what the plaintiff has asked for in his prayer or
whether he has asked for the proper relief; the court will grant him the relief
to which he is entitled under the facts proven” (Kansas City St. L. and
C.R. Co. v. Alton R. Co., 5 Fed. Rules Service, p. 638; U.
S. Circuit Court of Appeals, Seventh
Circuit, Dec. 18, 1941).
On appeal to the respondent Court by the
private respondent, the suit was, as it has always been in the court of origin,
one for reconveyance.
And of course, the petitioners did not ask the respondent Court for an
affirmative relief different from what was logically justified by the facts
found by and proven in the court a quo.
6. The respondent Court
opined that the cases cited by the petitioners in their motion for
reconsideration (i. e., Republic of the Philippines
v. Carle Heirs, L-12485, July 21, 1959, and Roco, et
al. v. Gimeda,
L -11651, Dec. 27, 1958) are not applicable because they involved properties
which admittedly belonged to the parties entitled to reconveyance,
unlike the herein petitioners who are mere public land applicants and have not
acquired title under the Public Land Act.
Assuming the respondent Court to be correct, a legion of cases there are
which can be cited in favor of the petitioners position. Since the law of trust has been more
frequently applied in England and in the United States than it has been in
Spain, we may draw freely upon
American precedents in determining the effects of trusts, especially so because
the trusts known to American and English equity jurisprudence are derived from
the fidei commissa
of the Roman Law and are based entirely upon civil law principles.[7]
Furthermore, because the case presents problems not directly covered by
statutory provisions or by Spanish or local precedents, resort for their
solution must be had to the underlying principles of the law on the
subject. Besides, our Civil Code itself
directs the adoption of the principles of the general law of trusts, insofar as
they are not in conflict with said Code, the Code of Commerce, the Rules of
Court and special laws.[8]
In holding that the cases cited by the petitioners in their motion
for reconsideration (i. e., Republic of the
Philippines v. Carle Heirs, supra, and Roco,
et al. v. Gimeda, supra) are inapplicable, the
respondent Court advances the theory that an action for reconveyance
based on constructive trust will prosper only if the properties involved
belong to the parties suing for and entitled to reconveyance. This is not entirely accurate. In Fox v. Simons[9]
the plaintiff employed the defendant to assist him in obtaining oil leases in a
certain locality in Illinois,
the former paying the latter a salary and his expenses. The defendant acquired some leases for the
plaintiff and others for himself.
Whereupon, the plaintiff brought suit to compel the defendant to assign
the leases which he had acquired for himself.
The court found for the plaintiff, holding that it was a breach of the
defendant’s fiduciary duty to purchase for himself the kind of property which
he was employed to purchase for the plaintiff.[10]
It is to be observed that in Fox v. Simons, supra,
the plaintiff was not the original owner of the oil leases. He merely employed the defendant to obtain
them for him, but the latter obtained some for the plaintiff and some for
himself. Yet, despite the absence of
this former-ownership circumstance, the court there did not hesitate to order
the defendant to assign or convey the leases he obtained for himself to the
plaintiff because of the breach of fiduciary duty committed by said
defendant. Indeed, there need only be a
fiduciary relation and a breach of fiduciary duty before reconveyance
may be adjudged. In fact, a fiduciary
may even be chargeable as a constructive trustee of property which he
purchases for himself, even though he has not undertaken to purchase it for the
beneficiary, if in purchasing it he was improperly competing with the
beneficiary.[11]
Parenthetically, a fiduciary relation arises where one man
assumes to act as agent for another and the other reposes confidence in him,
although there is no written contract or no contract at all. If the agent violates his duty as fiduciary,
a constructive trust arises. It is
immaterial that there was no antecedent fiduciary relation and that it arose
contemporaneously with the particular transaction.”[12]
In the case at bar, Leonor Reyes, the
private respondent’s husband, suggested that Eloy
Miguel file a homestead application over the land and offered his services in
assisting the latter to secure a homestead patent. Eloy Miguel
accepted Leonor Reyes’ offer of services, thereby
relying on his word and reposing confidence in him. And in payment for the services rendered by Leonor Reyes in preparing and filing the homestead
application and those still to be rendered by him in securing the homestead
patent, Eloy Miguel delivered to Reyes 1/5 of his
yearly harvest from the said land. When Leonor Reyes died, the petitioners continued to deliver the
same percentage of their annual harvest to the private respondent who
undertook to continue assisting the former to secure a homestead patent over
said land. However, in breach of their
fiduciary duty and through fraud, Leonor Reyes and
the private respondent filed a sales application and obtained a sales patent
and ultimately an original certificate of title over the same parcel of
land. Therefore, following the ruling in
Fox v. Simons, supra, the private respondent can be compelled to
reconvey or assign to the petitioners the parcel of
land in the proportion of nine hectares in favor of Eloy
Miguel and 14 hectares in favor of Demetrio Miguel,
respectively.
The private respondent argues that there is no violation of trust
relationship because the petitioners could have participated in the public
bidding. She avers that the alleged
fraud supposedly committed upon the petitioners, and on which the claim for reconveyance is founded, is clearly of no moment because
the sales patent in question was not the necessary consequence thereof, but
rather, it was granted in consideration of her being the highest bidder and the
purchaser of the land. In refutation of
the foregoing argument, it must be observed, firstly, that the petitioners –
because of the fraud practised on them by the Reyes
spouses – never came to know about the public bidding in which the land was
offered for sale and therefore could not have participated therein. Had not the Reyes spouses misrepresented in
their sales application that the land was uncultivated and unoccupied, the
Director of Lands would in all probability have found out about the occupancy
and cultivation of the said land by the petitioners and about Eloy Miguel’s homestead application over the same, and
consequently would have denied the sales application of the Reyes spouses. Secondly, it may justifiably be postulated
that equity will convert one who, for any reason recognized by courts of equity
as a ground for interference, has received legal title from the Government to
lands, which in equity and by the laws of Congress ought to have gone to
another, into a trustee for such other and compel him to convey the legal title
accordingly.[13]
Thirdly, Eloy Miguel could have very easily obtained
title to the said parcel of land in either of two ways, had he not been
inveigled by Leonor Reyes to file a homestead
application. Thus, since he is a
natural-born Filipino citizen, who is not an owner of more than twenty-four
hectares of land, and who since prior to July 4, 1926 (under R.A. 782, approved
June 21, 1952, occupation and cultivation since July 4, 1945, or prior thereto,
is deemed sufficient) has continuously occupied and cultivated a parcel of land
not more than twenty-four hectares in area, he was entitled to apply for a
free patent, for, or gratuitous grant, of said land. This is known as confirmation of imperfect or
incomplete titles by administrative legalization.[14]
Or, since Eloy Miguel has possessed the land prior to
July 26, 1894 and said possession has been continuous, uninterrupted, open,
adverse and in the concept of an owner, there is a presumption juris et de jure
that all necessary conditions for a grant by the State have been complied with,
and he would have been by force of law entitled – pursuant to the provisions of
sec. 48(b) of the Public Land Act – to the registration of his title to the
land.[15]
ACCORDINGLY, the decision of the Court of Appeals of May 10, 1962 and its resolutions of
July 23 and September 5, 1962,
are set aside. Another judgment is
hereby entered, ordering the private respondent Anacleta
M. Vda. de Reyes to convey the land subject-matter of
the complaint, in fee simple, to the petitioners, in the proportion of nine (9)
hectares in favor of Eloy Miguel and fourteen (14) hectares in favor of Demetrio Miguel. In
the event of failure of the said private respondent, for any reason whatsoever,
to convey within thirty (30) days from the date this judgment becomes final, it
is hereby decreed that at the end of that period she will be automatically
divested of her title to the property in dispute, and this decision shall be
authority for the Register of Deeds to forthwith cancel the original of the
original certificate of title P-1433 in his office and the owner’s copy thereof
in the name of Anacleta M. Vda.
de Reyes, and to issue in favor of Eloy Miguel and Demetrio Miguel new Torrens titles over the land in the
proportion above indicated. Costs
against the private respondent Reyes.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Fernando, Teehankee,
and Barredo,
JJ., concur.
[1]
Saura Import & Export Co. v. Philippine
International Co. et al., 8 SCRA 143.
[2]
Llanera v. Lopez, et al., 106 Phil. 70; Gerona,
et al. v.
De Guzman, et al., L-19060, May 29,
1964; Fabian, et al. v. Fabian, et
al., L-20449, Jan. 29, 1968,
22 SCRA
232, 238.
[3]
Cabrera, et al. v. Belen, et al., 95 Phil. 54.
[4]
Garcia Valdez v. Soteraña Tuason, 40 Phil. 943.
[5]
See sec. 7, Rule 51.
[6]
Dilag v. Heirs of Resurreccion,
et al., 76 Phil. 650.
[7]
Government of the Philippine Islands v. Abadilla,
46 Phil. 642.
[8]
Art. 1442, Civil Code.
[9]
251 Ill. 316, 96 N. E. 233
[1911].
[10]
See Scott on Trusts, 3rd ed., Vol. V, p. 3560.
[11]
Id., p. 3550.
[12]
Scott on Trusts, supra, p. 2544, citing
Harrop v. Cole, 85 N.J. Eq.
32, 95 Atl. 378, aff’d 86 N.J. Eq. 250, 98 Atl. 1085.
[13]
See Johnson v. Towsley, 13 Wall 72, 20
L ed 485.
[14]
Secs. 11 and 44, C.A. 141, otherwise known as the
Public Land Law.
[15]
Pamintuan v. Insular Government, 8 Phil. 485; Suri v. Razon, 48
Phil. 424.