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[MARIA CONSOLACION SUMIRA v. SEVERA VLSTAN](https://www.lawyerly.ph/juris/view/c277f?user=fbGU2WFpmaitMVEVGZ2lBVW5xZ2RVdz09)
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[ GR No. 48635, Feb 26, 1943 ]

MARIA CONSOLACION SUMIRA v. SEVERA VLSTAN +

DECISION

74 Phil. 138

[ G.R. No. 48635, February 26, 1943 ]

MARIA CONSOLACION SUMIRA, ASSISTED BY HER HUSBAND JUAN AQUINO, GODOFREDO INONG AND TEODORA INONG, PLAINTIFF AND APPELLANTS VS SEVERA VLSTAN, NICOLAS BONUS AND PHILIPPINE NATIONAL BANK, DEFENDANTS AND APPELLEES.

D E C I S I O N

MORAN, J.:

In an action instituted in the Court of First Instance of Tarlac, plaintiffs Maria Consolacion  Sumira,  Godofredo Inong and Teodora Inong sought to recover their respective portions in the land  situated in Barrio O'Donnell, Capas, Tarlac, conveyed to defendant Severa  Vistan.  The complaint, as twice amended, alleges that plaintiffs are legitimate grandchildren of spouses Gregorio Sumira and Inocencia Rivera, now deceased and original owners of the land  in question; that on June 4, 1914,  Inocencia Rivera, legitimate mother of Agapito, Apolonia, Emilio, Flora,  Delfina and  Andres,  all sumamed  Sumira (Delfina. now deceased, being the mother of Godofredo and Teodora Inong;  and Andres,  also deceased, being the father of Maria  Consolacion  Sumira), sold under pacto  de retro one-fourth of the land to defendant Severa Vistan, and the vendor failed to make the repurchase in  her lifetime;  that on  May 14,  1925. after  the death of the spouses Gresorio Sumira and Inocencia Rivera, some of their children Agapito, Emilio, Flora and Apolonia conveved under pacto de retro to the same defendant the whole land and the  vendors were also unable to redeem; that of these  conveyances, first, by Inocencia Rivera and. second, by her children Agapito, Emilio, Flora  and Apolonia, to defendant Severa  Vistan,  plaintiffs had no knowledge and that accordingly they have been  deprived of their  lawful portions thereof as heirs: that subsequently  defendant Severa Vistan petitioned for the registration  of said land  in her name on the strength of the deeds of sale in  her favor  and,  without disclosing plaintiffs' ownership of their undivided portions, succeeded in obtaining the corresponding title thereto;  that, thereafter,  defendant Severa Vistan fictitiously conveyed the same land to her co-defendant Nicolas Bonus who afterwards mortgaeed the same to defendant Philippine National Bank  for the  amounts  of  P1,800  and P400; that as defendant Severa Vistan and later Nicolas Bonus had taken possession of the land  which yielded an annual produce of 2,000 cavanes of palay, plaintiffs have been deprived of their portions in said produce  in the estimated amount of P500 per  annum.

Upon these allegations, plaintiffs prayed that they be declared absolute owners of an undivided one-twelfth portion each of the land,  free from all  liens and encumbrances;  that defendants Severa Vistan and Nicolas Bonus be ordered to reconvey to the  plaintiffs said portions or to pay the sum of P800; and  that the deed of sale executed  by Severa Vistan in favor of Nicolas Bonus and the deeds of mortgage later executed by Nicolas Bonus in favor of the Philippine National Bank be declared null and void in  so far as all these transactions affect the rights of the plaintiffs.  Defendants Severa Vistan and Nicolas Bonus on the one hand, and the Philippine National Bank on the other, presented separate  motions to dismiss the action upon the ground, among others, that the complaint states no cause of action.   The trial Court sustained the  motion. hence  this appeal.

We hold that the motion was rightly sustained with respect  to the Philippine National  Bank and erroneously with respect to defendants Severa Vistan and Nicolas Bonus.  Plaintiffs' complaint alleges no vice whatsoever in the execution of the deeds of mortgage by Nicolas Bonus in  favor of the Philippine National Bank.   The Philippine National Bank is, therefore, an innocent mortgagee for a valuable  consideration and as  such it is fully protected  by law  (section 38,  Act No. 496)  in its rights in the  mortgage, regardless of whether the title under the land has been secured fraudulently or not by the mortgagor.

With respect, however, to defendant Severa Vistan, plaintiffs' complaint alleges fraud and misrepresentation in her acquisition of the Torrens  title to the land in question, and on the strength of such allegation prays that plaintiffs' lawful portions be reconveyed to them or that they be awarded  damages.  Equitable action for reconveyance is proper if based on breach of fiduciary relations on the part of the defendant and the  property has not yet been conveyed to an innocent third person.  (Severino vs. Severino, 44 Phil., 343).   It appears from the complaint that the property bought by  Vistan belonged not only to her vendors but also to the plaintiffs here.  Since Vistan is presumed to have made the necessary inquiry as to the title  of her  vendors,  she may be deemed to  have  knowledge  that  only three-fourth of the property could legally be conveyed to her and that one-fourth thereof remained with the plaintiffs.  As a mere co-owner, she stands in a fiduciary relation to the  other co-owners with respect to the community property, and her acquisition of a Torrens title thereto in her exclusive name constitutes a breach of trust which may be a ground for an equitable  action for reconveyance.  The conveyance of  the property to  defendant Nicolas Bonus is no obstacle to the action, said conveyance being alleged in the complaint to be fictitious.

As  to the action for  damages, actual fraud need not be pleaded and proved, constructive fraud being  sufficient.  Constructive  fraud  as  distinguished  from actual fraud does not mean downright dishonesty of some sort, but an unintentional deception,  negligence, mistake  of fact or any transaction which equity regards as wrongful  and  to which  it attributes the same or similar effects as those which follow from actual fraud.   Here, defendant Vistan may have acted without malice in procuring  exclusive Torrens title in her name, but as in truth she is not the owner of the whole land and plaintiffs have been deprived of their rights with no fault of their own, an equitable remedy for dam ages may be granted them (Estrellado vs. Martinez, 48 Phil., 265) even if the property  has  already  been  conveyed to an innocent third person (Dizon  vs. Lacap, 50  Phil., 193).  The reason for the rule is that nobody should be allowed to en rich himself at the expense  of another.

As another ground for their motion to dismiss, defendants Vistan and Bonus alleged  that the action has prescribed because the one-year period for the revision of the decree has long expired.  But the action is  not for  the re-opening of the decree but for reconveyance or damages.  The law affords various remedies to persons who have been deprived of their lands or  interests  therein  by virtue of the operation of  the Land Registration system.  Upon proper and  timely application, relief may be procured under Rule 38, section 2, of the new Rules of Court.  Relief may also be obtained on the ground of fraud under section 38 of the Land Registration Act provided that one year has not yet elapsed from entry of the final decree.  An action  for reconveyance or damages may also be maintained.  And, in appropriate cases, a recourse may be had to the  Assurance Fund.  The equitable action for reconveyance or damages  is not barred by the lapse of one year.

Prescription of action or of  possession for ten years not having been pleaded, need not be considered.  It may not be amiss, however, to state  that in the last amended complaint, there is an allegation that  defendants  took possession of the property since 1938 only.  And, further, there  are  indications in  the record that two of the plaintiffs were  minors when the sales took place.  Also a question of  trust is involved in this case.  And  well-known is the rule that a silent exclusive possession of the trustee might be adverse to strangers but not against  the cestui que trust.  An open disavowal  of the  trust must  have been made by  positive and equivocal acts amounting to an ouster of and made known to the cestui que trust, in order that the latter may become affected  (Bargayo vs. Camumot, 40 Phil., 857; Cortes vs. Oliva, 33 Phil., 480).  Although it has also been held that possession by some co-heirs  or co-owners  may be ground for prescriptive title if held in good faith without knowledge that others might  have interest  in  the property (Ramos vs. Ramos, 45  Phil., 362; see also De Castro vs. Echarri, 20 Phil., 23).  But all these questions cannot properly be determined upon the facts now of record.

The  appealed order is affirmed  with respect to the motion  to dismiss of the Philippine National Bank,  and reversed with respect to that of defendants Severa Vistan and Nicola Bonus.  The record of this case is ordered remanded to the Court of First Instance of Tar lac for further proceedings with respect to defendants Severa Vistan and  Nicolas  Bonus.

 Without costs.

Yulo, C. J., Ozaeta, Paras and Bocobo, JJ., concur.

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