G.R. No. L-12540; February 28, 1959
Pedro Mabana, et al., plaintiffs; Pedro Mabana, plaintiff-appellant, vs. Marcelina Mendoza, et al., defendants-appellees.

FACTS

The plaintiffs filed an action for partition of a parcel of land in Pozorrubio, Pangasinan. They alleged that the land was originally occupied by Evaristo Mabana, whose five children (Felix, Eulogio, Benita, Luis, and Alberto) were all deceased. The plaintiffs are descendants of these children. In 1932, Luis Mabana applied for and obtained a homestead patent for the land from the Bureau of Lands, and a certificate of title was issued in the name of his heirs. The plaintiffs claimed that before the application, it was agreed between Luis Mabana and his co-heirs that the title would be placed in his name subject to the condition that he would recognize the rights of the other heirs and that he would act merely as a trustee for them. The plaintiffs later discovered the property was in the name of Marcelina Mendoza (widow of Jorge Mabana, the son of Luis) and that she had executed a deed of partition with another individual in possession. Asserting co-ownership, the plaintiffs sought partition. The defendants moved to dismiss the complaint on the grounds that it stated no cause of action and that the action had prescribed. The lower court sustained the motion, ruling that since the land was registered under the Torrens system ( Act No. 496 ) and the title became indefeasible after one year, the complaint failed to state a cause of action. The plaintiffs appealed directly to the Supreme Court.

ISSUE

Whether the lower court erred in dismissing the complaint for failure to state a cause of action, given the plaintiffs’ allegation of a trust agreement between Luis Mabana and his co-heirs concerning the homestead patent and title.

RULING

Yes, the lower court erred. The Supreme Court set aside the order of dismissal and remanded the case for further proceedings. The Court held that while a certificate of title issued under a homestead patent pursuant to Section 122 of Act No. 496 becomes conclusive and indefeasible after one year as per Section 39, this principle is immaterial to the plaintiffs’ action. The complaint specifically averred that the patent was applied for by Luis Mabana pursuant to an agreement that he would hold the title in trust for his co-heirs, with the understanding that partition would later be effected. This allegation established a fiduciary or trust relationship between Luis Mabana and his co-heirs. Consequently, the plaintiffs, as beneficiaries of that trust, have the right to recover their shares in the property, and this right is not barred by the defense of prescription. The existence of a trust creates an exception to the indefeasibility of a Torrens title.