G.R. No. L-9363; November 24, 1914
ALBINO CAMACHO, plaintiff-appellant, vs. THE MUNICIPALITY OF BALIUAG, PROVINCE OF BULACAN, defendant-appellee.

FACTS:
Albino Camacho purchased two parcels of land at a public auction held by the Insular Government in 1895. The land, located in the poblacion of Baliuag, Bulacan, was occupied by a municipal building and a school. A title was issued and registered in Camacho’s name in 1896. Despite the sale and registration, the Municipality of Baliuag continued to occupy the land and collect rents from tenants thereon. Camacho did not assert his ownership or disturb the municipality’s possession until 1908, when he filed an action to quiet title. Camacho claimed he lost his title documents during the revolution of 1898 and only recovered them in April 1908. The municipality, in its defense, presented parol evidence, including a deposition from Father Pranda (the parish priest from 1889-1898), to prove that Camacho acted merely as an agent or fiduciary. According to this evidence, Father Pranda, at the request of the town’s principal citizens, furnished the money for the purchase to ensure the land remained with the municipality, and Camacho bid at the auction on its behalf. Witnesses, including municipal officials and tenants, corroborated that the municipality had always been in possession and collected rents, and that Camacho, who had served in local government, had subscribed to official acts recognizing municipal ownership.

ISSUE:
Whether parol evidence is admissible to prove that the plaintiff, Albino Camacho, purchased the subject land in a fiduciary capacity for the benefit of the defendant Municipality of Baliuag, and not for himself, thereby defeating his claim of exclusive ownership based on his registered title.

RULING:
Yes. The Supreme Court affirmed the judgment of the lower court, absolving the defendant municipality from the complaint. The Court held that parol evidence is competent to establish that a person who obtained a registered title did so as an agent or trustee for another. Such evidence does not seek to alter the terms of the written deed but to prove the existence of a trust or fiduciary relationship. The Court found the municipality’s parol evidence clear, convincing, and sufficient to overcome Camacho’s claim of ownership. The evidence established that Camacho acted on behalf of the municipality (or Father Pranda as its representative) and that the purchase money was not his own. Consequently, Camacho held the title in trust for the municipality and could be compelled to execute a conveyance in its favor. The proper remedy in such a case is for the trustee to reconvey the property to the beneficial owner. The Court distinguished cases where parol evidence was insufficient due to weak proof or where the rights of innocent third-party purchasers had intervened, noting that no such circumstances were present here.