G.R. No. L-17955 & L-17957; May 31, 1962
PILAR LAZARO VDA. DE JACINTO, ET AL., petitioners, vs. SALUD DEL ROSARIO VDA. DE JACINTO, ET AL., respondents. (and the consolidated case)

FACTS

The case involves a parcel of riceland in Bulacan originally part of the estate of spouses Andres Jacinto and Maria C. Santos. Their heirs were their sons Melchor, Sr. and Pedro. Melchor, Sr. predeceased his parents. Upon partition of the estate, a specific lot of over 11 hectares was allotted to Melchor’s heirs (his widow Pilar Lazaro and son Melchor, Jr.). Pedro, the surviving brother, administered this lot. In 1926, Pedro purportedly delivered the properties to Pilar, but the Court of Appeals found this delivery was only “in paper.” Subsequently, Pedro caused a resurvey of the estate. This resurvey resulted in the segregation of a portion (Lot 5, exactly 5.4574 hectares) from the lot allotted to Melchor’s heirs. Pedro then succeeded in registering this Lot 5, along with other properties, in his own name under the Torrens system. Pilar and her son only discovered the shortage in 1953 when they decided to sell a portion of their land and an actual survey revealed the missing area, which corresponded precisely to Lot 5 registered in Pedro’s name.

ISSUE

The primary issue is whether the heirs of Pedro Jacinto can retain title to Lot 5, which was registered in his name through fraud and in breach of trust, to the prejudice of his co-heirs.

RULING

The Supreme Court affirmed the Court of Appeals’ decision ordering the reconveyance of Lot 5 to the heirs of Melchor Jacinto, Sr. The legal logic is anchored on the principle that the Torrens system cannot be used to shield fraud or breach of trust. While a Torrens title is generally indefeasible, it is settled doctrine that a person who obtains registration of property in his name through fraud or in violation of a trust may be compelled to reconvey the property to the rightful owner, provided no innocent third party for value has acquired rights. Here, Pedro, as a co-heir and administrator of his brother’s share, held a fiduciary position. His act of segregating a portion of the property allotted to his brother’s heirs and registering it in his own name constituted a clear breach of trust. The striking coincidence that the area missing from the heirs’ lot matched exactly the area Pedro registered fortified the finding of fraud. Consequently, Pedro and his heirs are deemed to hold the title in trust for the rightful owners, and an action for reconveyance based on an implied trust is proper. The Court also rejected the defense of prescription, reiterating that an action to enforce a trust is imprescriptible. The claim for damages by Pilar and her son was correctly deemed abandoned due to their failure to assign it as error in their appellate brief.