PURA CARREON, ET AL., PLAINTIFFS AND APPELLANTS, VS. RUFO AGCAOILI AND LOURDES SANTIAGO, DEFENDANTS AND APPELLEES.

During the marriage of Bonifacio Carreon and Celerina Dauag the
registered land subject of this case was acquired. After, the death of
Carreon, his widow Celerina executed on September 24, 1946, an
affidavit adjudicating to herself alone the said land. She declared in
said document that she was the only heiress of her husband. The
original certificate of titles covering the land was cancelled and a
transfer certificate was issued in her name. There was however
annotated on her certificate a lien to the effect that her title was
subject to Section 4 of Rule 74 of the Rules of Court.

On
September 25, 1946, she borrowed P1,200.00 from the Philippine National
Bank guaranted by a mortgage on one-half of the land. A memorandum of
the mortgage was annotated on her transfer certificate. After the
maturity of the loan, she requested a certain Mr. Pintang to look for a
buyer of the land for P3,000.00. One by the name of Rufo Agcaoili was
found. The latter made an advance payment of P1,500.00 and the balance
was paid in full on October 13, 1947. The loan from the bank was paid,
the mortgage was released, and the deed of absolute sale executed in
his favor was registered.^[1] A
new transfer certificate of title was issued in the name of Agcaoili.
On February 19, 1955, the children of Celerina with the deceased
husband filed a complaint against the spouses Agcaoili seeking to have
the deed of sale executed by their mother declared as one of mortgage
and to recover one-half pro-indiviso of the land described in
the complaint. Simultaneous with the finding of said complaint,
Celerina filed an action for intervention which was dismissed by the
trial court.

Defendants filed a motion for summary judgment
upon the plea that the main averments of the complaint even if admitted
do not constitute a cause of action and supported their plea with
certain documentary evidence. Plaintiff’s filed an opposition on the
ground that there was a genuine issue which could not he determined
unless a trial is had. The trial court however allowed the parties to
submit evidence in support of their contentions and after a careful
analysis thereof found for defendants holding that plaintiffs’ claim
has no legal basis.

As may be gleaned from the appellants’
assignments of error, the present appeal is predicated on the arguments
that appellees were buyers in bad faith; that there existed a trust
relationship between them and appellants; and that such being the case,
the action against appellees is imprescriptible.

There is no
clear proof that when Rufo Agcaoili bought the land he knew of any flaw
in the title of Celerina Dauag. The mere fact that he was a townmate of
Celerina is not sufficient basis to conclude that he knew that she had
children by her first husband. It has been shown that since 1920 Rufo
Agcaoili has been an enlisted man in the Philippine constabulary and
seldom went home to visit his relatives. A man of such a situation
cannot be expected to know the relatives and children of his vendor
even if they are townmates. Fraud cannot be presumed. It must be
established by clear and sufficient evidence. Here every indication is
that Agcaoili bought the land in all good faith oblivious of the source
of its acquisition.

If fraud had been committed such was
perpetrated by Celerina, appellants’ mother. By her action she induced
Agcaoili to believe that she was the absolute owner of the land which
bore a torrens title. In dealing with it he merely relied on such
title. He was not required to do more. He is only charged with notice
of the burdens which are noted on the face of said title. So after he
bought the land and a new title was issued in his name, he became a
purchaser thereof for value and a holder of a good and valid title.^[2]

On the transfer certificate of title issued to Agcaoili there was
annotated a statement that it was subject to Section 4, Rule 74 of the
Rules of Court. This was an annotation carried over from Celerina’s
transfer certificate. Section 4, Rule 74, provides the following:

“Sec. 4. Liability of distributees and estate.—If
it shall appear at any time within two years after the settlement and
distribution of an estate in accordance with the provisions of either
of the first two sections of this rule, that an heir or other person
has been unduly deprived of his lawful participation in the estate,
such heir or such other person may compel the settlement of the estate
in the courts in the manner hereinafter provided for the purpose of
satisfying such lawful participation. And if within the same time of
two years, it shall appear that there are debts outstanding against the
estate which have not been paid, or that an heir or other person has
been unduly deprived of his lawful participation payable in money, the
court having jurisdiction of the estate may, by order for that purpose,
after hearing, settle the amount of such debts or lawful participation
and order how much and in what manner each distributee shall contribute
in the payment thereof, and may issue execution, if circumstances
require, against the bond provided in the preceding section or against
the real estate belonging to the deceased, or both. Such bond and such
real estate shall remain charged with a liability to creditors, heirs
or other persons for the full period of two years after such
distribution, notwithstanding any transfer of the real estate that may
have been made.”

The above lien is
effective only for a period of two years. From September 28, 1946, when
a transfer certificate of title was issued to Celerina, to September 8,
1949 when the deed of sale in favor of Agcaoili was issued and
registered, more than two years had elapsed. We sustain the lower
court’s opinion that thenceforth the right to have such lien cancelled
became vested on appellee Agcaoili and that the same had became functus oficio.^[3]
And there being no fraud in the transaction on the part of appellee,
nor, proof that be knew of any legal infirmity in the title of his
vendor, we find no reason to apply the proposition that he is deemed to
be holding the land in trust for the children of Celerina Dauag.

Wherefore, the decision appealed from is affirmed, without pronouncement as to costs.

Bengzon, Acting C. J., Padilla, Labrador, Concepcion, Reyes, J. B. L., Barrera, Paredes, and Dizon, JJ., concur.

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^[1]
It is also noted that the said sale was approved by the Secretary of
Agriculture and Natural Resources, the land having been acquired as a
homestead.

^[2] Castillo vs. Valdez, 53 Phil., 120; Seva and Seva vs. Nolan and Arimas, 64 Phil., 374; Bacolod-Murcia Miling Co., Inc., vs. Concepcion de la Rama de Villaruz, 90 Phil., 154.

^[3] Lapiana vs. Garchitorena Cherean, 48 Phil., 163.