GR 48635; (February, 1943) (Digest)
G.R. No. 48635 ; February 26, 1943
MARIA CONSOLACION SUMIRA, assisted by her husband Juan Aquino, GODOFREDO INONG and TEODORA INONG, plaintiffs-appellants, vs. SEVERA VISTAN, NICOLAS BONUS and PHILIPPINE NATIONAL BANK, defendants-appellees.
FACTS
The plaintiffs, legitimate grandchildren and heirs of the original owners Gregorio Sumira and Inocencia Rivera, sought to recover their respective portions of land in Barrio O’Donnell, Capas, Tarlac. They alleged that Inocencia Rivera sold one-fourth of the land under pacto de retro to defendant Severa Vistan on June 4, 1914, and failed to repurchase it. After the death of the spouses, some of their children (Agapito, Emilio, Flora, and Apolonia Sumira) conveyed the entire land under pacto de retro to Vistan on May 14, 1925, and also failed to redeem it. The plaintiffs claimed no knowledge of these conveyances and were thus deprived of their lawful hereditary portions. Vistan subsequently obtained a Torrens title for the land through registration, without disclosing the plaintiffs’ ownership. She later fictitiously conveyed the land to co-defendant Nicolas Bonus, who mortgaged it to defendant Philippine National Bank. The plaintiffs prayed for declaration of ownership over their undivided portions (one-twelfth each), reconveyance or payment of damages, and the nullification of the mortgage to the bank insofar as it affected their rights. The trial court granted the defendants’ separate motions to dismiss on the ground that the complaint stated no cause of action.
ISSUE
1. Whether the complaint states a cause of action against the Philippine National Bank.
2. Whether the complaint states a cause of action against defendants Severa Vistan and Nicolas Bonus for reconveyance and/or damages.
3. Whether the action has prescribed.
RULING
1. As to the Philippine National Bank: The motion to dismiss was correctly sustained. The complaint alleged no vice in the execution of the mortgages by Nicolas Bonus in favor of the bank. The bank is an innocent mortgagee for value and is protected under Section 38 of Act No. 496 (Land Registration Act), regardless of any fraud in the mortgagor’s acquisition of title.
2. As to Severa Vistan and Nicolas Bonus: The motion to dismiss was erroneously sustained. The complaint alleges fraud and misrepresentation by Vistan in acquiring the Torrens title. As a purchaser, Vistan is presumed to have inquired about her vendors’ title and thus should have known that only three-fourths of the property could be legally conveyed to her, leaving one-fourth with the plaintiffs. As a co-owner, Vistan stood in a fiduciary relation to the other co-owners (the plaintiffs). Her acquisition of an exclusive Torrens title constituted a breach of trust, which is a proper ground for an equitable action for reconveyance, especially since the subsequent conveyance to Bonus was alleged to be fictitious. Furthermore, an action for damages based on constructive fraud (unintentional deception or negligence resulting in deprivation of another’s rights) is available, even if the property has been conveyed to an innocent third party, to prevent unjust enrichment.
3. As to Prescription: The action has not prescribed. The plaintiffs’ action is not for the revision or reopening of the decree of registration (which has a one-year period under Section 38 of the Land Registration Act) but is an independent equitable action for reconveyance or damages, which is not barred by the lapse of one year. Issues regarding prescription of action or acquisitive prescription (10 years) were not pleaded and need not be considered. The complaint contained allegations (e.g., possession since 1938 only, minority of some plaintiffs, existence of a trust) that, if proven, could affect the computation of prescriptive periods. These factual matters cannot be resolved on a motion to dismiss.
DISPOSITIVE:
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 Nicolas Bonus. The case is REMANDED to the Court of First Instance of Tarlac for further proceedings against Vistan and Bonus. No costs.