[G.R.

 No. 9363. November 24, 1914.]

ALBINO CAMACHO, plaintiff-appellant, vs. THE MUNICIPALITY

OF BALIUAG, PROVINCE OF BULACAN, defendant-appellee.

Buencamino & Lontok, for appellant.

Chicote & Miranda, for appellee.

SYLLABUS

1. PRINCIPAL AND AGENT; OWNERSHIP OF REALTY ACQUIRED

BY AGENT. — The settled doctrine in this jurisdiction is that realty acquired
with funds and at the instance of another in the discharge of an undisclosed
agency, express or implied, belongs to the principal, and an action lies in
favor of such undisclosed principal to compel a conveyance to himself so long
as the rights of innocent third parties have not intervened.
2. ID.; ID.; PAROL EVIDENCE. — Parol evidence is competent in such
cases to overcome the prima facie case made by documents of title in the
name of the agent, but such evidence, to prevail must be clear and
convincing.

DECISION

TRENT, J  :
p

This is an action to quiet title to two parcels of land situated in

the poblacion of the municipality of Baliuag, Province of Bulacan. The
admitted facts in this case are that these lots were occupied by a school and
municipal building, respectively, belonging to the municipal government from
very early times. In 1895 the central govern- ment claimed the land and
ordered its sale at public auction. This sale occurred July 8, 1895. The
plaintiff's bid of P300 was accepted. Title was accordingly issued to him and
the sale was registered the following year — 1896. Notwithstanding this public
sale, the municipality continued to occupy the lots and to collect the rents from
several tenants whose dwellings were located thereon. In fact, it appears that
its possession of the land had been undisturbed by anyone except the central
government (in 1895) until the institution of this action in 1908. In other words,
the plaintiff has never made any pretense to rely upon his documents of title
between the date of his purchase in 1895 and shortly before he instituted the
present action in 1908.
The plaintiff testified that he had lost his documents of title in the
revolution of 1898 and did not recover them until the month of April, 1908.
During this period of time he had merely tolerated the possession of the
municipality as he had no proof sufficient to establish his title. The documents
of title had been returned to him by his attorney. His attorney testified that the
documents had been given to him by a third person whose name he refused
to reveal and that, the plaintiff being a friend of his, he had taken them to him.
The municipality introduced the deposition of Father Prada, now
residing in Spain, who was the parish priest of the municipality from 1889 to
1898, when he was compelled to leave on account of the revolution. The
affiant declared that when the Insular Government claimed the land and
proceeded to advertise it for sale, a number of the principal people had an
unofficial conference with him at which they requested him to furnish the
money with which to buy the land in order that it might be retained by the
municipality, with the understanding that the latter would repay him at a future
date. He agreed to do this and chose the plaintiff to appear at the auction and
bid for the property, furnishing him the money. According to the affiant, it was
in this capacity that the plaintiff purchased the land at the public auction, with
the affiant's money. Upon receiving the documents of title, the plaintiff turned
them over to the affiant, who kept them in his office continuously until 1898,
when he was obliged to leave the municipality and did not take them with him.
A number of reputable citizens of the municipality who had been raised
in the municipality and had held offices in the local government, both before
and after American occupation, testified that the plaintiff represented either
the municipality or Father Prada at the sale, although they did not exactly
agree as to which of these two furnished the money. As justly remarked by
counsel for the defendant however, this is a question which it is unnecessary
to investigate in this action, as either theory is sufficient to defeat the plaintiff's
claim of purchase in his own behalf. A number of tenants of this land also
testified that they had always paid rent to the municipality and never to the
plaintiff.
It was also shown that the plaintiff was an officer of the local
government in various capacities at different times since 1895, and that he
had subscribed to official acts of the municipal council in which the
municipality's claim of ownership of the land was clearly set forth. The
municipal market was built in 1895 and witnesses for the defense testified
without contradiction that the material in the former municipal building was
used in its construction. It is further admitted that the municipality collected the
rents from these parcels from 1895 until 1898, when plaintiff claims to have
lost his documents of title. To assume that this alleged loss was a sufficient
excuse for his acquiescing in the acts of ownership performed by the
municipality between the years 1898 and 1908, when he first disputed the
possession of the municipality, would be a most charitable view of the
plaintiff's case. But he offers no explanation of his acquiescence in the
possession of the municipality between 1895 and 1898, during which time he
must have had possession of his documents of title by his own testimony. On
this point also, he is directly contradicted by Father Prada, who testified that
he it was who had possession of these documents during this period.
It seems unnecessary to enter into an extended discussion of the
evidence of record. The facts testified to by the witnesses for the defendant
are so clearly established as to leave no doubt whatever of their authenticity,
and the only question is whether they ought to be admitted to vary the terms
of the plaintiff's deed.
There have been a number of cases before this court in which a title to
real property was acquired by a person in his own name while acting in a
fiduciary capacity, and who afterwards sought to take advantage of the
confidence reposed in him by claiming the ownership of the property for
himself. This court has invariably held such evidence competent as between
the fiduciary and the cestui que trust.
In Uy Aloc vs. Cho Jan Ling (19 Phil. Rep., 202), the members of a
Chinese club agreed to purchase some real property and for that purpose
subscribed a fund and placed it in the hands of the defendant, who made the
purchase in his own name. Subsequently, he refused to account for the rents
on the property and claimed it as his own. This court held parol proof of the
trust sufficient to overcome the case in favor of the defendant by reason of his
registered documents of title, and decreed that a conveyance be made by the
defendant to the members of the association.
In Taguinot vs. Municipality of Tanay (9 Phil. Rep., 396), the plaintiffs,
as heirs of their father, sought to recover possession of a parcel of land held
by the municipality on the strength of a Spanish patent issued to him. It was
proved (largely by parol evidence) that their father acted on behalf and at the
expense of the municipality in securing the patent. The patent was retained by
the gobernadorcillo, a copy only being issued to the patentee. The latter also
drew up a private document engaging to execute a conveyance to the
municipality, the same being offered in evidence. The municipality had
continuously occupied the land since the issuance of the title. The judgment of
the court below dismissing the complaint was affirmed.
In the following cases of a similar character, parol evidence was held
not sufficient to overcome the case made out by the holder of the registered
title: Belen vs. Belen (13 Phil. Rep., 202); Garen vs. Pilar (17 Phil. Rep., 132);
Balatian vs. Agra (17 Phil. Rep., 501). Agonoy vs. Ruiz (11 Phil. Rep., 204),
and Madariaga vs. Castro (20 Phil. Rep., 563), were both cases wherein one
person was delegated by a community of property owners to secure in his
own name a patent from the Spanish Government covering all their lands, the
object being to save the expense of obtaining individual patents in the name
of each. After securing these patents, the therein grantees ejected their
neighbors from the land covered by the patents and respectively claimed the
land as their own. The evidence tending to establish these facts was
considered by the court in both cases Relief by reformation of the patent or a
compulsory conveyance to the injured persons was denied in each case,
because the rights of an innocent third purchaser intervened. But in the first
case the injured persons were held entitled to damages, provided they were
able to establish the same. In the second case, however, the court presumed
a waiver of their claims by reason of other evidence of record. The fact that
the parol evidence relied upon in the cases cited in this paragraph to defeat
the documents of title was carefully considered by the court, impliedly admits
its competency. It failed in its purpose in these cases merely because it was
not sufficiently strong to overcome the case in favor of the holders of the
registered titles.
We hold, therefore, that the parol evidence introduced by the defendant
municipality was competent to defeat the terms of the plaintiff's deed. It need
only be added that in all such cases as the present we have required and
shall continue to require that the proof contradicting such documents must be
clear and convincing. These qualities are apparent in the proof offered by the
defendant municipality in the case at bar.
What judgment ought to be entered in this case? The court below
simply absolved the defendant from the complaint. The defendant municipality
does not ask for a cancellation of the deed. On the contrary, the deed is relied
upon to supplement the oral evidence showing that the title to the land is in
the defendant. As we have indicated in Consunji vs. Tison (15 Phil. Rep., 81),
and Uy Aloc vs. Cho Jan Ling (19 Phil. Rep., 202), the proper procedure in
such a case, so long as the rights of innocent third persons have not
intervened, is to compel a conveyance to the rightful owner. This ought and
can be done under the issues raised and the proof presented in the case at
bar.
 
For the foregoing reasons the judgment of the court below, absolving
the defendant from the complaint, is affirmed; and it is directed that the
plaintiff execute a conveyance of the property in dispute, now standing on the
property registry in his name, to the defendant municipality. It may be added
that this judgment can affect no right which Father Prada may have against
 the municipality for the recovery of the purchase money, which he alleges to
have furnished. The costs will be against the appellant.
 (Camacho v. Municipality of Baliuag, G.R. No. 9363, [November 24, 1914], 28
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PHIL 466-474)