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PALMA vs CRISTOBAL

FACTS:

1909 - after registration proceedings under ACT 496, the original certificate of title was issued
in the names of Palma and his wife (Luisa Cristobal).
1923 - said certificate was cancelled by virtue of CFI decree, but was later substituted by
another certificate of title also in the name of Palma and his wife.
1928 - Bc of his wife's death, a new certificate was issued in Palma's name only
Palma sought at first to eject Cristobal from a parcel of land in Tondo (TCT of w/c registered to
Palma). Cristobal raised the question of ownership and the case was dismissed. Palma filed w/
CFI Manila praying he be declared owner of the land and for Cristobal to be ordered to restore
its possession to him and remove his house therefrom.
The CFI dismissed the case, and when the case was brought to the CA it was similarly
dismissed.
CA concluded that the parcel of land in question is a community property held by Palma in trust
for the real owners (respondent Cristobal being an heir of one of them), the registration having
been made in accordance with an understanding between the coowners, by reason of the
confidence they had in Palma and his wife.
This confidence, close relationship, and the fact that co-owners were receiving their shares in
the rentals, were the reasons why no step had been taken to partition the property.
Before the death of Palma's wife, she called her husband and enjoined him to give her coowners their shares and he told her not to worry about it bc he would.
The CA, in dismissing the case, invoked SC rulings w/c declared that the registration of the
property in the name of the trustees in possession thereof, must be deemed to have been effected
for the benefit of the principal/cestui que trust.
Thus this appeal by certiorari.

ISSUE: Whether the CA erred in dismissing the case


HELD: NO, the CA did not err. Palma contends that if he did commit fruad, Cristobal was in fact a
part of it, but the SC held that the fact that Cristobal has been a party to the deception which resulted in
Palma's securing in his name the title to a property not belonging to him, is not a valid reason for
changing the legal relationship between the latter and its true owners to such an extent as to let them
lose their ownership to a person trying to usurp it.
Cristobal is not barred because his appearance as attorney for petitioner was not a misrepresentation
which would induce Palma to believe that he recognized Palma as the sole owner of the property in
controversy. The misrepresentation could deceive the court and outsiders, because they were not aware
of the understanding between the co-owners that the property be registered in the name of Palma.
Palma then claimed that even granting the property was owened by several co-owners he now owns it
bc of prescription. This theory holds no water because, according to the pronouncement of the CA,
Palma held the property and secured its the registration in his name in a fiduciary capacity, and it is
elementary that a trustee cannot acquire by prescription the ownership of a property entrusted to him.
The position of a trustee is of representative nature. His position is the position of a cestui que trust. It
is logical that all benefits derived by the possession and acts of the agent, as such agent, should accrue
to the benefit of his principal.

The relations of an agent to his principal are fiduciary and 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.