Guillermo Severino appealed a lower court ruling ordering him to reconvey land to the estate of his deceased brother Melecio, whose property Guillermo had administered. The Supreme Court affirmed the ruling, finding that Guillermo came into possession of the land as Melecio's agent and breached his fiduciary duty by claiming ownership after Melecio's death. As Melecio's agent, Guillermo was estopped from acquiring title adverse to his principal. The Court recognized Felicitas Villanueva, administratrix of Melecio's estate, had superior equitable title to enforce the estate's ownership, even against Guillermo's registered legal title obtained through his breach of trust.
Guillermo Severino appealed a lower court ruling ordering him to reconvey land to the estate of his deceased brother Melecio, whose property Guillermo had administered. The Supreme Court affirmed the ruling, finding that Guillermo came into possession of the land as Melecio's agent and breached his fiduciary duty by claiming ownership after Melecio's death. As Melecio's agent, Guillermo was estopped from acquiring title adverse to his principal. The Court recognized Felicitas Villanueva, administratrix of Melecio's estate, had superior equitable title to enforce the estate's ownership, even against Guillermo's registered legal title obtained through his breach of trust.
Guillermo Severino appealed a lower court ruling ordering him to reconvey land to the estate of his deceased brother Melecio, whose property Guillermo had administered. The Supreme Court affirmed the ruling, finding that Guillermo came into possession of the land as Melecio's agent and breached his fiduciary duty by claiming ownership after Melecio's death. As Melecio's agent, Guillermo was estopped from acquiring title adverse to his principal. The Court recognized Felicitas Villanueva, administratrix of Melecio's estate, had superior equitable title to enforce the estate's ownership, even against Guillermo's registered legal title obtained through his breach of trust.
FELICITAS VILLANUEVA (intervenor-appellee) Ostrand, J.| 16 January 1923 | G.R. No. L-18058 Putative Principal: Melecio Severino Putative Agent: Guillermo Severino Putative 3rd Person: *Paano ito in relation to this case? FACTS: Melecio Severino owned 428 hectares of the land, which was administered by his brother, Guillermo Severino. After Melecio's death, Guillermo continued to occupy the land. Cadastral proceedings were then instituted for the registration of the lands titles within the surveyed area. In the said proceedings, Guillermos lawyer Hofilea filed answers in behalf of Guillermo claiming that Melecios lots were the property of his client. Since no opposition was made in the said proceedings, the titles were eventually decreed in Guillermos favor. Fabiola Severino (the alleged natural daughter of Melecio) filed an action to compel Guillermo to convey to her four parcels land, or in default to pay damages for wrongfully causing said land to be registered in his own name. Felicitas Villanueva, in her capacity as administratrix of the estate of Melecio, filed a complaint in intervention claiming in the same relief as the original plaintiff, except in so far as she prays that the conveyance be made, or damages paid, to the estate instead of to the plaintiff Fabiola Severino. The lower court rendered a judgment: 1. Recognizing the plaintiff Fabiola Severino as the acknowledged natural child Melecio Severino and 2. Ordering the Guillermo to convey to Felicitas (as administratix of Melecios estate): a. 428 hectares of the land in question b. Proceeds in his possession of a certain mortgage placed thereon by him and to pay the costs. From this judgment, only Guillermo appeals. MAIN ISSUE: Whether or not Guillermo ought to reconvey the property to the administratix Felicitas Villanueva? RULING: YES. Guillermo came into possession of the property as the agent of Melecio. RATIO: 1. The relations of an agent to his principal are fiduciary and it is an elementary and very old rule that in regard to property forming the subject-matter of the agency, he is estopped from acquiring or asserting a title
adverse to that of the principal. His position is
analogous to that of a trustee and he cannot consistently, with the principles of good faith, be allowed to create in himself an interest in opposition to that of his principal or cestui que trust. 2. That Guillermo came into the possession of the property in question as the agent of Melecio Severino in the administration of the property, is clear and cannot be disputed. a. In the case Montelibano vs. Severino, Guillermos testimony is conclusive in this respect. He stated under oath that from 19021913, he had been in charge and occupation of the land as the encargado or administrator of Melecio Severino and that he had always known the land as the property of Melecio Severino. b. In his answer filed in the same case, Guillermo, through his attorney, disclaimed all personal interest in the land and averred that it was wholly the property of his brother Melecio. 3. Guillermo argues that his title has become res judicata through the decree of registration and cannot now be disturbed; however, the Court disagrees. a. According to the Land Registration Act, this decree becomes conclusive after 1 year from the date of the entry if it is not disputed and no one attempts to disturb the decree or the proceedings upon which it is based. b. Felicita, as administratix, raises the principle of equity and contends that the legal title so acquired inured to the benefit of the estate of Melecio Severino (Guillermos principal and cestui que trust). She thus asks that this superior equitable right be made effective by compelling the defendant, as the holder of the legal title, to transfer it to the estate. 4. Here, the Court acknowledges that torrens titles carry a strong presumption in favor of their regularity or validity. However, once it is cleary proven that a fiduciary relation existed and a consequent breach of trust occurred, there is no reason why the Court should not make such needed reparation. a. As long as the land stands registered in the name of the party guilty of the breach of trust and no rights of innocent third parties are adversely affected, reparation can take place (in the form of a conveyance or transfer of the title to the cestui que trust). Judgment appealed from is AFFIRMED (with some additional directions to its dipositive clauses) with the costs against the appellant. The right of Fabiola Severino to establish in the probate proceedings her status as Melecios recognized natural child is reserved.