G.R. No.

L-18058 January 16, 1923

FABIOLA SEVERINO, plaintiff-appellee, vs. GUILLERMO SEVERINO, defendant-appellant. FELICITAS

FACTS: An action brought by the plaintiff as the alleged natural daughter and sole heir of one Melecio Severino,
deceased, to compel the defendant Guillermo Severino to convey to her four parcels of land described in the
complaint, or in default thereof to pay her the sum of P800,000 in 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 Severino,
has 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
defendant answered both complaints with a general denial.

The evidence shows that Melecio Severino died on the 25th day of May, 1915; that some 428 hectares of the land
were recorded in the Mortgage Law Register in his name in the year 1901 by virtue of possessory information
proceedings instituted on the 9th day of May of that year by his brother Agapito Severino in his behalf; that during
the lifetime of Melecio Severino the land was worked by the defendant, Guillermo Severino, his brother, as
administrator for and on behalf of the said Melecio Severino; that after Melecio's death, the defendant Guillermo
Severino continued to occupy the land; that in 1916 a parcel survey was made of the lands in the municipality of
Silay, including the land here in question, and cadastral proceedings were instituted for the registration of the lands
titles within the surveyed area; that in the cadastral proceedings the land here in question was described as four
separate lots numbered as above stated; that Roque Hofileña, as lawyer for Guillermo Severino, filed answers in
behalf of the latter in said proceedings claiming the lots mentioned as the property of his client; that no opposition
was presented in the proceedings to the claims of Guillermo Severino and the court therefore decreed the title in
his favor, in pursuance of which decree certificates of title were issued to him in the month of March, 1917.

It may be further observed that at the time of the cadastral proceedings the plaintiff Fabiola Severino was a minor;
that Guillermo Severino did not appear personally in the proceedings and did not there testify; that the only
testimony in support of his claims was that of his attorney Hofileña, who swore that he knew the land and that he
also knew that Guillermo Severino inherited the land from his father and that he, by himself, and through his
predecessors in interest, had possessed the land for thirty years.

ISSUE: W/N Guillermo Severino was an agent of Melecio Severino. YES!

SC RULING: The defendant argues that the gist of the instant action is the alleged fraud on his part in causing the
land in question to be registered in his name; that the trial court therefore erred in rejecting his offer of evidence to
the effect that the land was owned in common by all the heirs of Ramon Severino and did not belong to Melecio
Severino exclusively; that such evidence, if admitted, would have shown that he did not act with fraudulent intent
in taking title to the land; that the trial court erred in holding him estopped from denying Melecio's title; that more
than a year having elapsed since the entry of the final decree adjudicating the land to the defendant, said decree
cannot now be reopened; that the ordering of the defendant to convey the decreed land to the administratrix is, for
all practical purposes, equivalent to the reopening of the decree of registration; that under section 38 of the Land
Registration Act the defendant has an indefeasible title to the land; and that the question of ownership of the land
being thus judicially settled, the question as to the previous relations between the parties cannot now be inquired
into.

Upon no point can the defendant's contentions be sustained. It may first be observed that this is not an action under
section 38 of the Land Registration Act to reopen or set aside a decree; it is an action in personam against an agent
to compel him to return, or retransfer, to the heirs or the estate of its principal, the property committed to his
custody as such agent, to execute the necessary documents of conveyance to effect such retransfer or, in default
thereof, to pay damages.
That the defendant came into the possession of the property here in question as the agent of the deceased Melecio
Severino in the administration of the property, cannot be successfully disputed. His testimony in the case
of Montelibano vs. Severino (civil case No. 902 of the Court of First Instance of Occidental Negros and which forms a
part of the evidence in the present case) is, in fact, conclusive in this respect. He there stated under oath that from
the year 1902 up to the time the testimony was given, in the year 1913, he had been continuously in charge and
occupation of the land as the encargado or administrator of Melecio Severino; that he had always known the land
as the property of Melecio Severino; and that the possession of the latter had been peaceful, continuous, and
exclusive. In his answer filed in the same case, the same defendant, through his attorney, disclaimed all personal
interest in the land and averred that it was wholly the property of his brother Melecio.

Neither is it disputed that the possession enjoyed by the defendant at the time of obtaining his decree was of the
same character as that held during the lifetime of his brother, except in so far as shortly before the trial of the
cadastral case the defendant had secured from his brothers and sisters a relinguishment in his favor of such rights
as they might have in the land.

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. Upon this
ground, and substantially in harmony with the principles of the Civil Law (see sentence of the supreme court of Spain
of May 1, 1900), the English Chancellors held that in general whatever a trustee does for the advantage of the trust
estate inures to the benefit of the cestui que trust. (Greenlaw vs. King, 5 Jur., 18; Ex parte Burnell, 7 Jur., 116; Ex
parte Hughes, 6 Ves., 617; Ex parte James, 8 Ves., 337; Oliver vs. Court, 8 Price, 127.) The same principle has been
consistently adhered to in so many American cases and is so well established that exhaustive citations of authorities
are superfluous and we shall therefore limit ourselves to quoting a few of the numerous judicial expressions upon
the subject. The principle is well stated in the case of Gilbert vs. Hewetson (79 Minn., 326):

A receiver, trustee, attorney, agent, or any other person occupying fiduciary relations respecting property or
persons, is utterly disabled from acquiring for his own benefit the property committed to his custody for
management. This rule is entirely independent of the fact whether any fraud has intervened. No fraud in fact need
be shown, and no excuse will be heard from the trustee. It is to avoid the necessity of any such inquiry that the rule
takes so general a form. The rule stands on the moral obligation to refrain from placing one's self in positions which
ordinarily excite conflicts between self-interest and integrity. It seeks to remove the temptation that might arise out
of such a relation to serve one's self-interest at the expense of one's integrity and duty to another, by making it
impossible to profit by yielding to temptation. It applies universally to all who come within its principle.