Heirs of Franco vs. Court of Appeals

A General Power of Administration does not convey ownership and does not create an implied trust under Article 1452 of the Civil Code where registered land was acquired solely by patent in one person's name, and a Torrens title so divided through a non-consensual Section 112 proceeding on the basis of such document is void for fraud and must be cancelled.

Quintin Franco was the patentee under the Public Land Act of Lot No. 5172, Cad. 85 Ext., located at Lianib, Dipolog, Zamboanga del Norte, for which OCT No. P-436 was issued in his name on 9 July 1954. Miguel Franco was Quintin's brother, later appointed special administrator of Quintin's intestate estate in Sp. Proc. No. R-531, while Faustina Franco Vda. De Cabading, Quintin's sister, and the other heirs opposed Miguel's administration. Resolution of the dispute turned on Torrens indefeasibility, the limited summary relief under Section 112 of Act No. 496, implied trusts under Article 1452 of the Civil Code, and the evidentiary effect of judicial admissions and declarations against interest.

Quintin Franco obtained by patent Lot No. 5172, Cad. 85 Ext., a 70.6381-hectare agricultural parcel at Lianib, Dipolog, Zamboanga del Norte, covered by OCT No. P-436 issued on 9 July 1954 and consistently declared for taxation in his name. Quintin died intestate on 8 December 1967. On 17 October 1968 his brother Miguel Franco filed a verified petition for issuance of letters of administration in Sp. Proc. No. R-531, expressly listing the entire Lot No. 5172 as property left by Quintin without asserting any ownership therein, and was appointed special administrator on 3 December 1969 over the opposition of his sister Faustina Franco Vda. De Cabading, who sought her own appointment.

Thereafter Miguel asserted for the first time, in a motion for reconsideration of his removal as special administrator, that one-half of the property had been transferred to him by a 1967 document entitled General Power of Administration executed by Quintin. It emerged that on the strength of that document Miguel had filed a petition dated 2 January 1972 in Misc. Sp. No. 2993 before Branch 1 of the Dipolog Court of First Instance seeking cancellation of OCT No. P-436. Only four days later, on 6 January 1973, the petition was granted and cancellation ordered, enabling Miguel to obtain TCT No. T-20203 covering half of the property on 13 February 1973, without the knowledge or unanimity of the other heirs. When the other heirs learned of the title, they sought its cancellation in the estate proceedings.

The intestate court declared on 27 August 1973 that Quintin was the absolute owner of the subject property and, on 1 September 1973, removed Miguel as special administrator because his claim to half the estate rendered him incapable of rendering a true and faithful account. Miguel moved for reconsideration only of the removal order, not of the ownership declaration, and merely alleged inadvertence for omitting his co-ownership claim from his 1968 petition without adducing proof. On 4 May 1977 the intestate court cancelled TCT No. T-20203 for fraud, but the Court of Appeals reversed on 29 February 1984 on the ground that an intestate court lacked jurisdiction to finally settle ownership, as affirmed by Supreme Court Resolution on 1 October 1984. The heirs, principally those of Faustina, then filed Civil Case No. 3847 before the RTC for cancellation of Miguel's title. After trial the RTC dismissed the complaint, construing the General Power of Administration as acknowledging a trust with Quintin holding half in trust for Miguel under Article 1452 of the Civil Code.

• Absence of Fraud and Good Faith Registration: Petitioner argued that the transfer and registration of one-half of the subject property in Miguel's name was not done through fraud or in bad faith.
• General Power of Administration as Proof of Trust: Petitioner maintained that at no time did respondents question the execution or genuineness of the General Power of Administration, which purportedly admitted an existing trust relation between Quintin and Miguel.
• Recognition of Miguel's Rights: Petitioner argued that the Court of Appeals failed to appreciate the recognition which Quintin had accorded to Miguel's rights and interest in the property.

• Judicial Admission and Declaration Against Interest: Whether Miguel's 1968 verified petition listing the entire property as Quintin's, and his 19-year silence, barred his later claim to one-half thereof.
• Validity of Section 112 Registration: Whether the 6 January 1973 order cancelling OCT No. P-436 and the resulting TCT No. T-20203 were valid under Section 112 of the Land Registration Act.
• Implied Trust and Conveyance: Whether the General Power of Administration conveyed ownership or created an implied trust under Article 1452 of the Civil Code in favor of Miguel.

• Judicial Admission and Declaration Against Interest: Yes. The 1968 verified statement was both a declaration against interest and a binding judicial admission, unexcused by proven palpable mistake, and was reinforced by laches and consistent tax declarations in Quintin's name.
• Validity of Section 112 Registration: No. The 6 January 1973 order was without factual basis and improper under Section 112, which allows only summary, non-controversial corrections where unanimity exists and no adverse claim is posed.
• Implied Trust and Conveyance: No. The General Power of Administration contained no language of conveyance and Article 1452 was inapplicable, as the land was acquired by patent alone with no proof of joint purchase or common consent to title in one name for all.

• Judicial Admission and Declaration Against Interest: Miguel expressly declared under oath in 1968 that the entire Lot No. 5172 belonged to Quintin while remaining silent on any half-interest, asserting co-ownership only four years later. Because no palpable mistake was shown, the allegation of mere inadvertence in the amended petition being unproved and correctable earlier, the statement bound him as a judicial admission and stood as a declaration against interest, the best evidence of the fact in dispute. The weight thereof was heightened by his duty as special administrator to know the estate, his failure to seek reconsideration of the 27 August 1973 provisional ownership finding against him, his 19-year silence from 1954 registration to 1973 titling indicative of laches, and the exclusive tax declarations in Quintin's name corroborating sole ownership.
• Validity of Section 112 Registration: Under the Torrens system, OCT No. P-436 issued in 1954 had long become indefeasible and incontrovertible, constituting the best evidence of Quintin's ownership, yet Branch 1 disregarded this when it granted Miguel's 2 January 1972 petition only four days later on 6 January 1973. Proceedings under Section 112 of Act No. 496, now Section 108 of P.D. No. 1529, are summary and limited to clerical corrections or non-controversial amendments, available only upon unanimity among parties in interest, meaning absence of serious controversy as to title. No such unanimity existed, the other heirs holding adverse interests and having been prejudiced by the surreptitious division, rendering the cancellation order and TCT No. T-20203 baseless and fraudulent.
• Implied Trust and Conveyance: No document conveyed any portion to Miguel, the General Power of Administration documenting only delegated authority to administer and containing no conveyancing language. Article 1452 requires concurrence of two requisites, namely agreement of two or more persons to purchase property and consent that legal title be taken in one name for the benefit of all, as reiterated in Nito vs. Court of Appeals. That joint-purchase situation was absent, the property having been acquired through Quintin's sole patent application without proof of Miguel's participation. Thus, even without inquiring into authenticity and due execution, Miguel was found to have no ownership right, with tax declarations further confirming Quintin's claim.

• Judicial admission and declaration against interest — A party's act, declaration, or omission as to a relevant fact may be given in evidence against him, constituting the best evidence affording the greatest certainty of facts in dispute; a judicial admission binds its maker absent a showing of palpable mistake and cannot be offset by rationalization. Applied to Miguel's verified 1968 petition admitting Quintin's full ownership and omitting his own claim, which was given full substantive and procedural evidentiary value in Civil Case No. 3847.
• Torrens indefeasibility — Under the Land Registration Act, title covered by a Torrens title becomes indefeasible after one year from entry of the decree of registration, incontrovertible and binding on all persons whether notified or not, and is the best evidence of ownership of registered land. Applied to OCT No. P-436 registered 9 July 1954 in Quintin's name, against which Miguel's belated claim could not prevail.
• Provisional determination of ownership by intestate court — While an intestate court lacks authority to rule with finality on ownership of decedent's property, it is not precluded from provisionally determining ownership for estate purposes such as inclusion in the inventory. Applied to sustain the evidentiary relevance of the 27 August 1973 order declaring Quintin absolute owner, whose non-contest by Miguel bolstered the admission.
• Summary nature of Section 112, Act No. 496 — Section 112, now Section 108 of the Property Registration Decree, permits only summary correction of clerical mistakes and non-controversial erasures, alterations, or amendments, available only upon unanimity among parties in interest, meaning absence of serious controversy or adverse claim as to title. Applied to void the 6 January 1973 order dividing OCT No. P-436 to Miguel's prejudice of co-heirs.
• Implied trust under Article 1452, Civil Code — If two or more persons agree to purchase property and by common consent legal title is taken in one name for the benefit of all, a trust is created by force of law in proportion to each interest; concurrence of joint purchase agreement and common-consent titling is required. Applied to reject the RTC's trust theory in Heirs of Miguel Franco vs. Court of Appeals and Heirs of Faustina Cabading because the land was acquired by Quintin's sole patent, not joint purchase.

• "A declaration against interest is the best evidence which affords the greatest certainty of the facts in dispute." — States the evidentiary weight accorded to Miguel's 1968 verified admission that the entire property belonged to Quintin.
• "This tolerant silence militates against Miguel Franco’s claim of ‘co-ownership.’ Juxtaposed with his previous judicial admission of Quintin Franco’s absolute ownership of Lot No. 5172, it is not difficult to see that the act of Miguel Franco in registering one-half of the property in his name was an insidious and surreptitious, if not belated, maneuver to deprive the legal heirs of Quintin Franco of their lawful share and interest in the property. As a matter of fact, Miguel Franco may well be charged with laches." — Explains why Miguel's 19-year silence and belated registration were deemed fraudulent and barred by laches.
• "No erasure, alteration, or amendment shall be made upon the registration book after the entry of a certificate of title or of a memorandum thereon and the attestation of the same by the clerk or any register of deeds, except by order of the court." — Quotes the opening limitation of Section 112, Act No. 496, to frame why the summary cancellation of OCT No. P-436 was improper absent unanimity.

• Noda vs. Cruz-Arnaldo, G.R. No. L-57322, June 22, 1987 — Cited for the proposition that a declaration against interest affords the greatest certainty of facts in dispute.
• Yuliongsu vs. PNB, 130 Phil. Rep. 575, 580 (1968) — Cited to hold that a judicial admission binds its maker absent palpable mistake.
• In the Matter of the Intestate of Deceased Ismael Reyes vs. Reyes, G.R. No. 139587, 22 November 2000 — Cited to support provisional determination of ownership by an intestate court for inventory purposes.
• David vs. Malay, G.R. No. 132644, November 19, 1999 — Cited for Torrens indefeasibility one year after decree of registration.
• Sps. Villanueva vs. Court of Appeals, G.R. No. 84464, June 21, 1991 — Cited for the rule that a Torrens title is the best evidence of ownership of registered land.
• Quevada vs. Glorioso, G.R. No. 121270, August 27, 1998 — Cited with Republic vs. CFI of Baguio-Benguet to limit Section 112 to clerical, non-controversial corrections.
• Taguman vs. Republic, 94 Phil. 171, 175 (1953) — Cited as origin of the unanimity / no adverse claim requirement for Section 112 relief, as reiterated in later cases.
• Nito vs. Court of Appeals, G.R. No. 102657, 9 August 1993 — Cited with Ceniza vs. Court of Appeals to state the two requisites of an Article 1452 trust.
• Ranola vs. Court of Appeals, 379 Phil. Rep. 1, 11 (2000) — Cited for the rule that tax declarations, while not incontrovertible proof of ownership, prove a claim of title.

• Article 1452, New Civil Code — Provides that joint purchasers taking legal title in one name create a trust by force of law; held inapplicable because the subject property was acquired by Quintin's sole patent application, not by joint purchase.
• Section 112, Act No. 496 (now Section 108, P.D. No. 1529) — Authorizes court-ordered erasure, alteration, or amendment of certificates only on specified grounds after notice, without opening the original decree or impairing a good-faith purchaser; held misapplied to the controversial division of OCT No. P-436 without unanimity.
• Section 25, Rule 130, Rules of Court — Allows a party's act, declaration, or omission as to a relevant fact to be given in evidence against him; applied to Miguel's 1968 petition and silence.
• Section 1(a), Rule 81, Rules of Court — Requires a special administrator to return a true and complete inventory of estate assets coming to his possession or knowledge; used to impute to Miguel full knowledge of Quintin's holdings, strengthening his admission.

Puno (Chairman), Quisumbing, Austria-Martinez, and Callejo, Sr., concur.