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G.R. No.

L-4656 November 18, 1912


RICARDO PARDELL Y CRUZ !"
#ICEN$A OR$IZ Y %ELIN DE PARDELL, plaintifs-appellees,
vs.
GA&PAR DE 'AR$OLO(E Y E&CRI'ANO !"
(A$ILDE OR$IZ Y %ELIN DE 'AR$OLO(E, defendants-appellants.
$ORRE&, J.:
This is an appeal by bill of exceptions, from the judgment of October 5, 1!", #hereby the
$onorable %ionisio &hanco, judge, absolved the defendants from the complaint, and the plaintif
from a counterclaim, #ithout special 'nding as to costs.
&ounsel for the spouses (icardo y &ru) and *icente Orti) y +elin de ,ardell, the 'rst of #hom,
absent in -pain by reason of his employment, conferred upon the second su.cient and ample
po#ers to appear before the courts of justice, on /une 0, 1!5, in his #ritten complaint, alleged
that the plaintif, *icente Orti), and the defendant, 1atilde Orti), are the duly recogni)ed natural
daughters of the spouses 1iguel Orti) and &alixta +elin y ,aula #ho died in *igan, 2locos -ur, in
10"5 and 1003, respectively4 that &alixta +elin, prior to her death, executed on 5ugust 1", 10"6,
a nuncupative #ill in *igan #hereby she made her four children, named 1anuel, +rancisca,
*icenta, and 1atilde, surnamed Orti) y +elin, her sole and universal heirs of all her property4 that,
of the persons enumerated, 1anuel died before his mother and +rancisca a fe# years after her
death, leaving no heirs by force of la#, and therefore the only existing heirs of the said testatrix
are the plaintif *icenta Orti) and the defendant 1atilde Orti)4 that, aside from some personal
property and je#elry already divided among the heirs, the testatrix possessed, at the time of the
execution of her #ill, and left at her death the real properties #hich, #ith their respective cash
values, are as follo#s7
1. 5 house of strong material, #ith the lot on #hich it is built, situated on 8scolta
-treet, *igan, and valued at
,6,!!!.
!!
3. 5 house of mixed material, #ith the lot on #hich it stands, at 9o. 00
:ashington -treet, *igan4 valued at
1,5!!.!
!
;. 5 lot on 1agallanes -treet, *igan4 valued at 1!!.!!
<. 5 parcel of rice land, situated in the barrio of -an /ulian, *igan4 valued at 6!.!!
5. 5 parcel of rice land in the pueblo of -anta =ucia4 valued at 06.!!
6. Three parcels of land in the pueblo of &andon4 valued at 15!.!!
Total
",06.!
!
That, on or about the 'rst months of the year 1000, the defendants, #ithout judicial
authori)ation, nor friendly or extrajudicial agreement, too> upon themselves the administration
and enjoyment of the said properties and collected the rents, fruits, and products thereof, to the
serious detriment of the plaintifs? interest4 that, not#ithstanding the diferent and repeated
demands extrajudicially made upon 1atilde Orti) to divide the aforementioned properties #ith
the plaintif *icente and to deliver to the latter the one-half thereof, together #ith one-half of the
fruits and rents collected therefrom, the said defendant and her husband, the self-styled
administrator of the properties mentioned, had been delaying the partition and delivery of the
said properties by means of un>ept promises and other excuses4 and that the plaintifs, on
account of the extraordinary delay in the delivery of one-half of said properties, or their value in
cash, as the case might be, had sufered losses and damages in the sum of ,0,!!!. -aid counsel
for the plaintifs therefore as>ed that judgment be rendered by sentencing the defendants,
@aspar de Aartolome, and 1atilde Orti) +elin de Aartolome, to restore and deliver to the plaintifs
one-half of the total value in cash, according to appraisal, of the undivided property speci'ed,
#hich one-half amounted approximately to ,;,<0, or if deemed proper, to recogni)e the plaintif
*icenta Orti) to be vested #ith the full and absolute right of o#nership to the said undivided one-
half of the properties in Buestion, as universal testamentary heir thereof together #ith the
defendant 1atilde Orti), to indemnify the plaintifs in the sum of ,0,!!!, for losses and damages,
and to pay the costs.
&ounsel for the defendants, in his ans#er denied the facts alleged in paragraphs 1, <, 6, ", and 0
thereof, inasmuch as, upon the death of the litigating sister?s brother 1anuel, their mother, #ho
#as still living, #as his heir by force of la#, and the defendants had never refused to give to the
plaintif *icente Orti) her share of the said properties4 and stated that he admitted the facts
alleged in paragraph 3, provided it be understood, ho#ever, that the surname of the defendant?s
mother #as +elin, and not +eliu, and that 1iguel Orti) died in -pain, and not in *igan4 that he
also admitted paragraph ; of the complaint, #ith the diference that the said surname should be
+elin, and li>e#ise paragraph 5, except the part thereof relating to the personal property and the
je#elry, since the latter had not yet been divided4 that the said je#elry #as in the possession of
the plaintifs and consisted of7 one =o)ada gold chronometer #atch #ith a chain in the form of a
bridle curb and a #atch charm consisting of the engraving of a postage stamp on a stone
mounted in gold and bearing the initials 1. O., a pair of cuf buttons made of gold coins, four
small gold buttons, t#o 'nger rings, another #ith the initials 1. O., and a gold bracelet4 and that
the defendants #ere #illing to deliver to the plaintifs, in conformity #ith their petitions, one-half
of the total value in cash, according to appraisement, of the undivided real properties speci'ed in
paragraph 5, #hich half amounted to ,;,<0.
2n a special defense said counsel alleged that the defendants had never refused to divide the
said property and had in fact several years before solicited the partition of the same4 that, from
1006 to 1!1, inclusive, there #as collected from the property on &alle 8scolta the sum of 300
pesos, besides a fe# other small amounts derived from other sources, #hich #ere delivered to
the plaintifs #ith other larger amounts, in 101, and from the property on &alle :ashington,
called La Quinta, !.5 pesos, #hich proceeds, added together, made a total of 1,3"0.5 pesos,
saving error or omission4 that, bet#een the years abovementioned, 8scolta, and that on &alle
:ashington,La Quinta, ;"6.;;, #hich made a total of 1,1<1."1, saving error or omission4 that, in
10", the #or> of reconstruction #as begun of the house on &alle 8scolta, #hich been destroyed
by an earthBua>e, #hich #or> #as not 'nished until 1!; and reBuired an expenditure on the
part of the defendant 1atilde Orti), of 5,!1.53 pesos4 that all the collections made up to 5ugust
1, 1!5, including the rent from the stores, amounted to only ,;,65<.15, and the expenses, to
,6,353.;3, there being, conseBuently, a balance of ,3,50.1", #hich divided bet#een the sisters,
the plaintif and the defendant, #ould ma>e the latter?s share ,1,3.!04 that, as sho#n by the
papers >ept by the plaintifs, in the year 101 the defendant Aartolome presented to the
plaintifs a statement in settlements of accounts, and delivered to the person duly authori)ed by
the latter for the purpose, the sum of ,3,6!6.3, #hich the said settlement sho#ed #as o#ing
his principals, from various sources4 that, the defendant Aartolome having been the
administrator of the undivided property claimed by the plaintifs, the latter #ere o#ing the
former legal remuneration of the percentage allo#ed by la# for administration4 and that the
defendants #ere #illing to pay the sum of ,;,<0, one-half of the total value of the said
properties, deducting therefrom the amount found to be o#ing them by the plaintifs, and as>ed
that judgment be rendered in their favor to enable them to recover from the latter that amount,
together #ith the costs and expenses of the suit.
The defendants, in their counter claim, repeated each and all of the allegations contained in each
of the paragraphs of section 1! of their ans#er4 that the plaintifs #ere obliged to pay to the
administrator of the said property the remuneration allo#ed him by la#4 that, as the revenues
collected by the defendants amounted to no more than ,;,65<.15 and the expenditures incurred
by them, to ,6,353.;3, it follo#ed that the plaintifs o#ed the defendants ,1,3.!0, that is one-
half of the diference bet#een the amount collected from and that extended on the properties,
and as>ed that judgment be therefore rendered in their behalf to enable them to collect this sum
from the plaintifs, (icardo ,ardell and *icenta Orti), #ith legal interest thereon from %ecember
", 1!<, the date #hen the accounts #ere rendered, together #ith the sums to #hich the
defendant Aartolome #as entitled for the administration of the undivided properties in Buestion.
Ay a #ritten motion of 5ugust 31, 1!5, counsel for the plaintifs reBuested permission to amend
the complaint by inserting immediately after the #ords Cor respective appraisal,C 'fth line of
paragraph 5, the phrase Cin cash in accordance #ith the assessed value,C and li>e#ise further to
amend the same, in paragraph 6 thereof, by substituting the follo#ing #ord in lieu of the petition
for the remedy sought7 CAy reason of all the foregoing, 2 beg the court to be pleased to render
the judgment by sentencing the defendants, @aspar de Aartolome and 1atilde Orti) +elin de
Aartolome, to restore and deliver to the plaintifs an exact one-half of the total vale of the
undivided properties described in the complaint, such value to be ascertained by the expert
appraisal of t#o competent persons, one of #hom shall be appointed by the plaintifs and the
other by the defendants, and, in case of disagreement bet#een these t#o appointees such value
shall be determined by a third expert appraiser appointed by the court, or, in a proper case, by
the price ofered at public auction4 or, in lieu thereof, it is reBuested that the court recogni)e the
plaintif, *icenta Orti), to be vested #ith a full and absolute right to an undivided one-half of the
said properties4 furthermore, it is prayed that the plaintifs be a#arded an indemnity of ,0,!!!
for losses and damages, and the costs.C 9ot#ithstanding the opposition of the defendants, the
said amendment #as admitted by the court and counsel for the defendants #ere allo#ed to a
period of three days #ithin #hich to present a ne# ans#er. 5n exception #as ta>en to this ruling.
The proper proceedings #ere had #ith reference to the valuation of the properties concerned in
the division sought and incidental issues #ere raised relative to the partition of some of them
and their a#ard to one or the other of the parties. %ue consideration #as ta>en of the averments
and statements of both parties #ho agreed bet#een themselves, before the court, that any of
them might at any time acBuire, at the valuation 'xed by the expert judicial appraiser, any of the
properties in Buestion, there being none in existence excluded by the litigants. The court,
therefore, by order of %ecember 30, 1!5, ruled that the plaintifs #ere entitled to acBuire, at the
valuation determined by the said expert appraiser, the building >no#n as La Quinta, the lot on
#hich it stands and the #arehouses and other improvements comprised #ithin the inclosed land,
and the seeds lands situated in the pueblos of *igan and -anta =ucia4 and that the defendants
#ere li>e#ise entitled to acBuire the house on &alle 8scolta, the lot on &alle 1agallanes, and the
three parcels of land situated in the pueblo of &andon.
5fter this partition had been made counsel for the defendants, by a #riting of 1arch 0, 1!6, set
forth7 That, having petitioned for the appraisement of the properties in Buestion for the purpose
of their partition, it #as not to be understood that he desired from the exception duly entered to
the ruling made in the matter of the amendment to the complaint4 that the properties retained
by the defendants #ere valued at ,,;1!, and those retained by the plaintifs, at ,3,005, one-
half of #hich amounts each party had to deliver to the other, as they #ere pro indivisoproperties4
that, therefore, the defendants had to pay the plaintifs the sum of ,;,313.5!, after deducting
the amount #hich the plaintifs #ere obliged to deliver to the defendants, as one-half of the price
of the properties retained by the former4 that, not#ithstanding that the amount of the
counterclaim for the expenses incurred in the reconstruction of the pro indiviso property should
be deducted from the sum #hich the defendants had to pay the plaintifs, the former, for the
purpose of bringing the matter of the partition to a close, #ould deliver to the latter, immediately
upon the signing of the instrument of purchase and sale, the sum of ,;,313.5!, #hich #as one-
half of the value of the properties alloted to the defendants4 such delivery, ho#ever, #as not to
be understood as a renouncement of the said counterclaim, but only as a means for the 'nal
termination of the pro indiviso status of the property.
The case having been heard, the court on October 5, 1!", rendered judgment holding that the
revenues and the expenses #ere compensated by the residence enjoyed by the defendant party,
that no losses or damages #ere either caused or sufered, nor li>e#ise any other expense
besides those aforementioned, and absolved the defendants from the complaint and the
plaintifs from the counterclaim, #ith no special 'nding as to costs. 5n exception #as ta>en to
this judgment by counsel for the defendants #ho moved for a ne# trial on the grounds that the
evidence presented did not #arrant the judgment rendered and that the latter #as contrary to
la#. This motion #as denied, exception #hereto #as ta>en by said counsel, #ho 'led the proper
bill of exceptions, and the same #as approved and for#arded to the cler> of this court, #ith a
transcript of the evidence.
Aoth of the litigating sisters assented to a partition by halves of the property left in her #ill by
their mother at her death4 in fact, during the course of this suit, proceedings #ere had, in
accordance #ith the agreement made, for the division bet#een them of the said hereditary
property of common o#nership, #hich division #as recogni)ed and approved in the 'ndings of
the trial court, as sho#n by the judgment appealed from.
The issues raised by the parties, aside from said division made during the trial, and #hich have
been submitted to this court for decision, concern7 D1E The indemnity claimed for losses and
damages, #hich the plaintifs allege amount to ,0,!!!, in addition to the rents #hich should
have been derived from the house on &alle 8scolta, *igan4 D3E the payment by the plaintifs to
the defendants of the sum of ,1,3.!0, demanded by #ay of counterclaim, together #ith legal
interest thereon from %ecember ", 1!<4 D;E the payment to the husband of the defendant
1atilde Orti), of a percentage claimed to be due him as the administrator of the property of
common o#nership4 D<E the division of certain je#elry in the possession of the plaintif *icenta
Orti)4 and D5E the petition that the amendment be held to have been improperly admitted, #hich
#as made by the plaintifs in their #ritten motion of 5ugust 31, 1!5, against the opposition of
the defendants, through #hich admission the latter #ere obliged to pay the former
,1!.5!.lawphil.net
Aefore entering upon an explanation of the propriety or impropriety of the claims made by both
parties, it is indispensable to state that the trial judge, in absolving the defendants from the
complaint, held that they had not caused losses and damages to the plaintifs, and that the
revenues and the expenses #ere compensated, in vie# of the fact that the defendants had been
living for several years in the &alle 8scolta house, #hich #as pro indivisoproperty of joint
o#nership.
Ay this 'nding absolving the defendants from the complaint, and #hich #as acBuiesced in by the
plaintifs #ho made no appeal therefrom, the frst issue has been decided #hich #as raised by
the plaintifs, concerning the indemnity for losses and damages, #herein are comprised the rents
#hich should have been obtained from the upper story of the said house during the time it #as
occupied by the defendants, 1atilde Orti) and her husband, @aspar de Aartolome.
9ot#ithstanding the acBuiescence on the part of the plaintifs, assenting to the said 'nding
#hereby the defendants #ere absolved from the complaint, yet, as such absolution is based on
the compensation established in the judgment of the trial court, bet#een the amounts #hich
each party is entitled to claim from the other, it is imperative to determine #hether the
defendant 1atilde Orti), as coo#ner of the house on &alle 8scolta, #as entitled, #ith her
husband, to reside therein, #ithout paying to her coo#ner, *icenta Orti), #ho, during the greater
part of the time, lived #ith her husband abroad, one-half of the rents #hich the upper story
#ould have produced, had it been rented to a stranger.
5rticle ;< of the &ivil &ode prescribes7
8ach coo#ner may use the things o#ned in common, provided he uses them in
accordance #ith their object and in such manner as not to injure the interests of the
community nor prevent the coo#ners from utili)ing them according to their rights.
1atilde Orti) and her husband occupied the upper story, designed for use as a d#elling, in the
house of joint o#nership4 but the record sho#s no proof that, by so doing, the said 1atilde
occasioned any detriment to the interest of the community property, nor that she prevented her
sister *icenta from utili)ing the said upper story according to her rights. 2t is to be noted that the
stores of the lo#er Foor #ere rented and accounting of the rents #as duly made to the plaintifs.
8ach coo#ner of realty held pro indiviso exercises his rights over the #hole property and may
use and enjoy the same #ith no other limitation than that he shall not injure the interests of his
coo#ners, for the reason that, until a division be made, the respective part of each holder can
not be determined and every one of the coo#ners exercises, together #ith his other
coparticipants, joint o#nership over the pro indiviso property, in addition to his use and
enjoyment of the same.
5s the hereditary properties of the joint o#nership of the t#o sisters, *icenta Orti), plaintif, and
1atilde Orti), defendant, #ere situated in the ,rovince of 2locos -ur, and #ere in the care of the
last named, assisted by her husband, #hile the plaintif *icenta #ith her husband #as residing
outside of the said province the greater part of the time bet#een 1005 and 1!5, #hen she left
these 2slands for -pain, it is not at all strange that delays and di.culties should have attended
the eforts made to collect the rents and proceeds from the property held in common and to
obtain a partition of the latter, especially during several years #hen, o#ing to the insurrection,
the country #as in a turmoil4 and for this reason, aside from that founded on the right of
coo#nership of the defendants, #ho too> upon themselves the administration and care of the
properties of joint tenancy for purposes of their preservation and improvement, these latter are
not obliged to pay to the plaintif *icenta one-half of the rents #hich might have been derived
from the upper of the story of the said house on &alle 8scolta, and, much less, because one of
the living rooms and the storeroom thereof #ere used for the storage of some belongings and
efects of common o#nership bet#een the litigants. The defendant 1atilde, therefore, in
occupying #ith her husband the upper Foor of the said house, did not injure the interests of her
coo#ner, her sister *icenta, nor did she prevent the latter from living therein, but merely
exercised a legitimate right pertaining to her as coo#ner of the property.
9ot#ithstanding the above statements relative to the joint-o#nership rights #hich entitled the
defendants to live in the upper story of the said house, yet in vie# of the fact that the record
sho#s it to have been proved that the defendant 1atilde?s husband, @aspar de Aartolome,
occupied for four years a room or a part of the lo#er Foor of the same house on &alle 8scolta,
using it as an o.ce for the justice of the peace, a position #hich he held in the capital of that
province, strict justice, reBuires that he pay his sister-in-la#, the plaintif, one half of the monthly
rent #hich the said Buarters could have produced, had they been leased to another person. The
amount of such monthly rental is 'xed at ,16 in accordance #ith the evidence sho#n in the
record. This conclusion as to Aartolome?s liability results from the fact that, even as the husband
of the defendant coo#ner of the property, he had no right to occupy and use gratuitously the
said part of the lo#er Foor of the house in Buestion, #here he lived #ith his #ife, to the
detriment of the plaintif *icenta #ho did not receive one-half of the rent #hich those Buarters
could and should have produced, had they been occupied by a stranger, in the same manner
that rent #as obtained from the rooms on the lo#er Foor that #ere used as stores. Therefore, the
defendant Aartolome must pay to the plaintif *icenta ,;0<, that is, one-half of ,"60, the total
amount of the rents #hich should have been obtained during four years from the Buarters
occupied as an o.ce by the justice of the peace of *igan.
:ith respect to the second Buestion submitted for decision to this court, relative to the payment
of the sum demanded as a counterclaim, it #as admitted and proved in the present case that, as
a result of a serious earthBua>e on 5ugust 15, 10", the said house on &alle 8scolta #as left in
ruins and uninhabitable, and that, for its reconstruction or repair, the defendants had to expend
the sum of ,6,353.;3. This expenditure, not#ithstanding that it #as impugned, during the trial,
by the plaintifs, #as duly proved by the evidence presented by the defendants. 8vidence,
unsuccessfully rebutted, #as also introduced #hich proved that the rents produced by all the
rural and urban properties of common o#nership amounted, up to 5ugust 1, 1!5, to the sum of
,;,65<.15 #hich, being applied to#ard the cost of the repair #or> on the said house, leaves a
balance of ,3,50.1", the amount actually advanced by the defendants, for the rents collected
by them #ere not su.cient for the termination of all the #or> underta>en on the said building,
necessary for its complete repair and to replace it in a habitable condition. 2t is therefore la#ful
and just that the plaintif *icenta Orti), #ho #as #illing to sell to her sister 1atilde for ,1,5!!,
her share in the house in Buestion, #hen it #as in a ruinous state, should pay the defendants
one-half of the amount expanded in the said repair #or>, since the building after reconstruction
#as #orth ,,!!!, according to expert appraisal. &onseBuently, the counterclaim made by the
defendants for the payment to them of the sum of ,1,3.!0, is a proper demand, though from
this sum a reduction must be made of ,;0<, the amount of one-half of the rents #hich should
have been collected for the use of the Buarters occupied by the justice of the peace, the
payment of #hich is incumbent upon the husband of the defendant 1atilde, as aforesaid, and the
balance remaining, ,15.!0, is the amount #hich the plaintif *icenta must pay to the
defendants.
The defendants claim to be entitled to the collection of legal interest on the amount of the
counterclaim, from %ecember ", 1!<. This contention can not be sustained, inasmuch as, until
this suit is 'nally decided, it could not be >no#n #hether the plaintifs #ould or #ould not be
obliged to pay the sum #hatever in reimbursement of expenses incurred by the plaintifs in the
repair #or> on the said house on &alle 8scolta, #hether or not the defendants, in turn, #ere
entitled to collect any such amount, and, 'nally, #hat the net sum #ould be #hich the plaintif?s
might have to pay as reimbursement for one-half of the expenditure made by the defendants.
Gntil 'nal disposal of the case, no such net sum can be determined, nor until then can the debtor
be deemed to be in arrears. 2n order that there be an obligation to pay legal interest in
connection #ith a matter at issue bet#een the parties, it must be declared in a judicial decision
from #hat date the interest #ill be due on the principal concerned in the suit. This rule has been
established by the decisions of the supreme court of -pain, in reference to articles 11!0, 11!,
and 111! of the &ivil &ode, reference on 5pril 3<, 106", 9ovember 1, 106, and +ebruary 33,
1!1.
:ith regard to the percentage, as remuneration claimed by the husband of the defendant
1atilde for his administration of the property of common o#nership, inasmuch as no stipulation
#hatever #as made in the matter by and bet#een him and his sister-in-la#, the said defendant,
the claimant is not entitled to the payment of any remuneration #hatsoever. Of his o#n accord
and as an o.cious manager, he administered the said pro indivisoproperty, one-half of #hich
belonged to his #ife #ho held it in joint tenancy, #ith his sister-in-la#, and the la# does not allo#
him any compensation as such voluntary administrator. $e is merely entitled to a reimbursement
for such actual and necessary expenditures as he may have made on the undivided properties
and an indemnity for the damages he may have sufered #hile acting in that capacity, since at
all events it #as his duty to care for and preserve the said property, half of #hich belonged to his
#ife4 and in exchange for the trouble occasioned him by the administration of his sister-in-la#?s
half of the said property, he #ith his #ife resided in the upper story of the house aforementioned,
#ithout payment of one-half of the rents said Buarters might have produced had they been
leased to another person.
:ith respect to the division of certain je#elry, petitioned for by the defendants and appellants
only in their brief in this appeal, the record of the proceedings in the lo#er court does not sho#
that the allegation made by the plaintif *icenta is not true, to the efect that the deceased
mother of the litigant sisters disposed of this je#elry during her lifetime, because, had she not
done so, the #ill made by the said deceased #ould have been exhibited in #hich the said je#elry
#ould have been mentioned, at least it #ould have been proved that the articles in Buestion
came into the possession of the plaintif *icenta #ithout the expressed desire and the consent of
the deceased mother of the said sisters, for the gift of this je#elry #as previously assailed in the
courts, #ithout success4 therefore, and in vie# of its inconsiderable value, there is no reason for
holding that the said gift #as not made.
5s regards the collection of the sum of ,1!.5!, #hich is the diference bet#een the assessed
value of the undivided real properties and the price of the same as determined by the judicial
expert appraiser, it is sho#n by the record that the ruling of the trial judge admitting the
amendment to the original complaint, is in accord #ith the la# and principles of justice, for the
reason that any of the coo#ners of a pro indiviso property, subject to division or sale, is entitled
to petition for its valuation by competent expert appraisers. -uch valuation is not prejudicial to
any of the joint o#ners, but is bene'cial to their interests, considering that, as a general rule, the
assessed value of a building or a parcel of realty is less than the actual real value of the property,
and this being appraiser to determine, in conjunction #ith the one selected by the plaintifs, the
value of the properties of joint o#nership. These t#o experts too> part in the latter proceedings
of the suit until 'nally, and during the course of the latter, the litigating parties agreed to an
amicable division of the pro indiviso hereditary property, in accordance #ith the price 'xed by
the judicial expert appraiser appointed as a third party, in vie# of the disagreement bet#een and
nonconformity of the appraisers chosen by the litigants. Therefore it is improper no# to claim a
right to the collection of the said sum, the diference bet#een the assessed value and that 'xed
by the judicial expert appraiser, for the reason that the increase in price, as determined by this
latter appraisal, redounded to the bene't of both parties.
2n consideration of the foregoing, #hereby the errors assigned to the lo#er court have been duly
refuted, it is our opinion that, #ith a partial reversal of the judgment appealed from, in so far as it
absolves the plaintifs from the counterclaim presented by the defendants, #e should and hereby
do sentence the plaintifs to the payment of the sum of ,15.!0, the balance of the sum claimed
by the defendants as a balance of the one-half of the amount #hich the defendants advanced for
the reconstruction or repair of the &alle 8scolta house, after deducting from the total of such sum
claimed by the latter the amount of ,;0< #hich @aspar de Aartolome, the husband of the
defendant 1atilde, should have paid as one-half of the rents due for his occupation of the
Buarters on the lo#er Foor of the said house as an o.ce for the justice of the peace court of
*igan4 and #e further 'nd7 D1E That the defendants are not obliged to pay one-half of the rents
#hich could have been obtained from the upper story of the said house4 D3E that the plaintifs can
not be compelled to pay the legal interest from %ecember ", 1!<, on the sum expanded in the
reconstruction of the aforementioned house, but only the interest 'xed by la#, at the rate of 6
per cent per annum, from the date of the judgment to be rendered in accordance #ith this
decision4 D;E that the husband of the defendant 1atilde Orti) is not entitled to any remuneration
for the administration of the pro indivisoproperty belonging to both parties4 D<E that, neither is he
entitled to collect from the plaintifs the sum of ,1!.5!, the diference bet#een the assessed
valuation and the price set by the expert appraisal solicited by the plaintifs in their amendment
to the complaint4 and, D5E that no participation shall be made of je#elry aforementioned no# in
the possession of the plaintif *icenta Orti). The said judgment, as relates to the points appealed,
is a.rmed, in so far as its 'ndings agree #ith those of this decision, and is reversed, in so far as
they do not. 9o special 'nding is made regarding the costs of both instances. -o ordered.
G.R. No. L-45425 A)r*+ 29, 19,9
-O&E GA$C.ALIAN, E$ AL., plaintifs-appellants,
vs.
$.E COLLEC$OR O% IN$ERNAL RE#ENUE, defendant-appellee.
The plaintif brought this action to recover from the defendant &ollector of 2nternal (evenue the
sum of ,1,06;.<<, #ith legal interest thereon, #hich they paid under protest by #ay of income
tax. They appealed from the decision rendered in the case on October 3;, 1;6 by the &ourt of
+irst 2nstance of the &ity of 1anila, #hich dismissed the action #ith the costs against them.
The case #as submitted for decision upon the follo#ing stipulation of facts7
&ome no# the parties to the above-mentioned case, through their respective undersigned
attorneys, and hereby agree to respectfully submit to this $onorable &ourt the case upon
the follo#ing statement of facts7
1. That plaintif are all residents of the municipality of ,ulilan, Aulacan, and that defendant
is the &ollector of 2nternal (evenue of the ,hilippines4
3. That prior to %ecember 15, 1;< plaintifs, in order to enable them to purchase one
s#eepsta>es tic>et valued at t#o pesos D,3E, subscribed and paid therefor the amounts as
follo#s7
1. /ose
@atchalian .....................................................................................
...............
,!.1
0
3. @regoria
&ristobal ........................................................................................
.......
.10
;. -aturnina
-ilva ...............................................................................................
.....
.!0
<. @uillermo
Tapia ..............................................................................................
.....
.1;
5. /esus
=egaspi ..........................................................................................
............
.15
6. /ose
-ilva ...............................................................................................
..............
.!"
". Tomasa
1ercado .........................................................................................
.......
.!0
0. /ulio
@atchalian .....................................................................................
..............
.1;
. 8miliana
-antiago ........................................................................................
........
.1;
1!. 1aria &.
=egaspi ..........................................................................................
.....
.16
11. +rancisco
&abral ............................................................................................
...
.1;
13. @on)alo
/avier ..............................................................................................
......
.1<
1;. 1aria
-antiago ........................................................................................
...........
.1"
1<. Auenaventura
@u)man ......................................................................................
.1;
15. 1ariano
-antos ............................................................................................
.....
.1<
Total ...............................................................................................
......... 3.!!
;. That immediately thereafter but prior to %ecember 15, 1;<, plaintifs purchased, in the
ordinary course of business, from one of the duly authori)ed agents of the 9ational &harity
-#eepsta>es O.ce one tic>et bearing 9o. 1"06;" for the sum of t#o pesos D,3E and that
the said tic>et #as registered in the name of /ose @atchalian and &ompany4
<. That as a result of the dra#ing of the s#eepsta>es on %ecember 15, 1;<, the above-
mentioned tic>et bearing 9o. 1"06;" #on one of the third pri)es in the amount of ,5!,!!!
and that the corresponding chec> covering the above-mentioned pri)e of ,5!,!!! #as
dra#n by the 9ational &harity -#eepsta>es O.ce in favor of /ose @atchalian H &ompany
against the ,hilippine 9ational Aan>, #hich chec> #as cashed during the latter part of
%ecember, 1;< by /ose @atchalian H &ompany4
5. That on %ecember 3, 1;<, /ose @atchalian #as reBuired by income tax examiner
5lfredo %avid to 'le the corresponding income tax return covering the pri)e #on by /ose
@atchalian H &ompany and that on %ecember 3, 1;<, the said return #as signed by /ose
@atchalian, a copy of #hich return is enclosed as 8xhibit 5 and made a part hereof4
6. That on /anuary 0, 1;5, the defendant made an assessment against /ose @atchalian H
&ompany reBuesting the payment of the sum of ,1,<.< to the deputy provincial
treasurer of ,ulilan, Aulacan, giving to said /ose @atchalian H &ompany until /anuary 3!,
1;5 #ithin #hich to pay the said amount of ,1,<.<, a copy of #hich letter mar>ed
8xhibit A is enclosed and made a part hereof4
". That on /anuary 3!, 1;5, the plaintifs, through their attorney, sent to defendant a
reply, a copy of #hich mar>ed 8xhibit & is attached and made a part hereof, reBuesting
exemption from payment of the income tax to #hich reply there #ere enclosed 'fteen D15E
separate individual income tax returns 'led separately by each one of the plaintifs, copies
of #hich returns are attached and mar>ed 8xhibit %-1 to %-15, respectively, in order of
their names listed in the caption of this case and made parts hereof4 a statement of sale
signed by /ose @atchalian sho#ing the amount put up by each of the plaintifs to cover up
the attached and mar>ed as 8xhibit 8 and made a part hereof4 and a copy of the a.davit
signed by /ose @atchalian dated %ecember 3, 1;< is attached and mar>ed 8xhibit + and
made part thereof4
0. That the defendant in his letter dated /anuary 30, 1;5, a copy of #hich mar>ed 8xhibit
@ is enclosed, denied plaintifs? reBuest of /anuary 3!, 1;5, for exemption from the
payment of tax and reiterated his demand for the payment of the sum of ,1,<.< as
income tax and gave plaintifs until +ebruary 1!, 1;5 #ithin #hich to pay the said tax4
. That in vie# of the failure of the plaintifs to pay the amount of tax demanded by the
defendant, not#ithstanding subseBuent demand made by defendant upon the plaintifs
through their attorney on 1arch 3;, 1;5, a copy of #hich mar>ed 8xhibit $ is enclosed,
defendant on 1ay 1;, 1;5 issued a #arrant of distraint and levy against the property of
the plaintifs, a copy of #hich #arrant mar>ed 8xhibit 2 is enclosed and made a part
hereof4
1!. That to avoid embarrassment arising from the embargo of the property of the
plaintifs, the said plaintifs on /une 15, 1;5, through @regoria &ristobal, 1aria &. =egaspi
and /esus =egaspi, paid under protest the sum of ,6!1.51 as part of the tax and penalties
to the municipal treasurer of ,ulilan, Aulacan, as evidenced by o.cial receipt 9o. "<5<0"
#hich is attached and mar>ed 8xhibit / and made a part hereof, and reBuested defendant
that plaintifs be allo#ed to pay under protest the balance of the tax and penalties by
monthly installments4
11. That plaintif?s reBuest to pay the balance of the tax and penalties #as granted by
defendant subject to the condition that plaintifs 'le the usual bond secured by t#o
solvent persons to guarantee prompt payment of each installments as it becomes due4
13. That on /uly 16, 1;5, plaintif 'led a bond, a copy of #hich mar>ed 8xhibit I is
enclosed and made a part hereof, to guarantee the payment of the balance of the alleged
tax liability by monthly installments at the rate of ,110."! a month, the 'rst payment
under protest to be efected on or before /uly ;1, 1;54
1;. That on /uly 16, 1;5 the said plaintifs formally protested against the payment of the
sum of ,6!3.51, a copy of #hich protest is attached and mar>ed 8xhibit =, but that
defendant in his letter dated 5ugust 1, 1;5 overruled the protest and denied the reBuest
for refund of the plaintifs4
1<. That, in vie# of the failure of the plaintifs to pay the monthly installments in
accordance #ith the terms and conditions of bond 'led by them, the defendant in his
letter dated /uly 3;, 1;5, copy of #hich is attached and mar>ed 8xhibit 1, ordered the
municipal treasurer of ,ulilan, Aulacan to execute #ithin 've days the #arrant of distraint
and levy issued against the plaintifs on 1ay 1;, 1;54
15. That in order to avoid annoyance and embarrassment arising from the levy of their
property, the plaintifs on 5ugust 30, 1;6, through /ose @atchalian, @uillermo Tapia, 1aria
-antiago and 8miliano -antiago, paid under protest to the municipal treasurer of ,ulilan,
Aulacan the sum of ,1,36!.; representing the unpaid balance of the income tax and
penalties demanded by defendant as evidenced by income tax receipt 9o. ;5011 #hich is
attached and mar>ed 8xhibit 9 and made a part hereof4 and that on -eptember ;, 1;6,
the plaintifs formally protested to the defendant against the payment of said amount and
reBuested the refund thereof, copy of #hich is attached and mar>ed 8xhibit O and made
part hereof4 but that on -eptember <, 1;6, the defendant overruled the protest and
denied the refund thereof4 copy of #hich is attached and mar>ed 8xhibit , and made a
part hereof4 and
16. That plaintifs demanded upon defendant the refund of the total sum of one thousand
eight hundred and sixty three pesos and forty-four centavos D,1,06;.<<E paid under
protest by them but that defendant refused and still refuses to refund the said amount
not#ithstanding the plaintifs? demands.
1". The parties hereto reserve the right to present other and additional evidence if
necessary.
8xhibit 8 referred to in the stipulation is of the follo#ing tenor7
To whom it may concern:
2, /ose @atchalian, a resident of ,ulilan, Aulacan, married, of age, hereby certify, that on
the 11th day of 5ugust, 1;<, 2 sold parts of my shares on tic>et 9o. 1"06;" to the
persons and for the amount indicated belo# and the part of may share remaining is also
sho#n to #it7
Purchaser
Amou
nt
Address
1. 1ariano
-antos ...........................................
,!.1<
,ulilan,
Aulacan.
3. Auenaventura
@u)man ...............................
.1; - %o -
;. 1aria
-antiago ............................................
.1" - %o -
<. @on)alo
/avier ..............................................
.1< - %o -
5. +rancisco
&abral ..........................................
.1; - %o -
6. 1aria &.
=egaspi ..........................................
.16 - %o -
". 8miliana
-antiago .........................................
.1; - %o -
0. /ulio
@atchalian ..........................................
..
.1; - %o -
. /ose
-ilva ....................................................
..
.!" - %o -
1!. Tomasa
1ercado .......................................
.!0 - %o -
11. /esus
=egaspi .............................................
.15 - %o -
13. @uillermo
Tapia ...........................................
.1; - %o -
1;. -aturnina
-ilva ............................................
.!0 - %o -
1<. @regoria
&ristobal .......................................
.10 - %o -
15. /ose
@atchalian ..........................................
..
.10 - %o -
3.!!
Total cost of
said
tic>et4 and that, therefore, the persons named above are entitled to the parts of #hatever
pri)e that might be #on by said tic>et.
,ulilan, Aulacan, ,.2.
D-gd.E /O-8 @5T&$5=259
5nd a summary of 8xhibits %-1 to %-15 is inserted in the bill of exceptions as follo#s7
(8&5,2TG=5T2O9- O+ 15 29%2*2%G5= 29&O18 T5J (8TG(9- +O( 1;< 5== %5T8%
/59G5(K 1, 1;5 -GA12TT8% TO T$8 &O==8&TO( O+ 29T8(95= (8*89G8.
Name
Exhib
it
No.
Purcha
se
Price
Price
on
Expens
es
Net
pri!
e
1. /ose
@atchalian .........................................
.
%-1 ,!.10
,<,<3
5
, <0!
;,<
5
3. @regoria
&ristobal ......................................
%-3 .10 <,5"5 3,!!!
3,5"
5
;. -aturnina
-ilva .............................................
%-; .!0 1,0"5 ;6!
1,51
5
<. @uillermo
Tapia ..........................................
%-< .1; ;,;35 ;6!
3,6
5
5. /esus =egaspi by 1aria
&ristobal .........
%-5 .15 ;,035 "3!
;,1!
5
6. /ose
-ilva ..................................................
..
%-6 .!0 1,0"5 ;6!
1,51
5
". Tomasa
1ercado .......................................
%-" .!" 1,0"5 ;6!
1,51
5
0. /ulio @atchalian by Aeatri)
@u)man .......
%-0 .1; ;,15! 3<!
3,1
!
. 8miliana
-antiago ......................................
%- .1; ;,;35 ;6!
3,6
5
1!. 1aria &.
=egaspi ......................................
%-1! .16 <,1!! 6!
;,1<
!
11. +rancisco %-11 .1; ;,;35 ;6! 3,6
&abral ...................................... 5
13. @on)alo
/avier ..........................................
%-13 .1< ;,;35 ;6!
3,6
5
1;. 1aria
-antiago ..........................................
%-1; .1" <,;5! ;6!
;,
!
1<. Auenaventura
@u)man ...........................
%-1< .1; ;,;35 ;6!
3,6
5
15. 1ariano
-antos ........................................
%-15 .1< ;,;35 ;6!
3,6
5
3.!!
5!,!!
!
The legal Buestions raised in plaintifs-appellants? 've assigned errors may properly be reduced
to the t#o follo#ing7 D1E :hether the plaintifs formed a partnership, or merely a community of
property #ithout a personality of its o#n4 in the 'rst case it is admitted that the partnership thus
formed is liable for the payment of income tax, #hereas if there #as merely a community of
property, they are exempt from such payment4 and D3E #hether they should pay the tax
collectively or #hether the latter should be prorated among them and paid individually.
The &ollector of 2nternal (evenue collected the tax under section 1! of 5ct 9o. 30;;, as last
amended by section 3 of 5ct 9o. ;"61, reading as follo#s7
-8&. 1!. DaE There shall be levied, assessed, collected, and paid annually upon the total
net income received in the preceding calendar year from all sources by every corporation,
joint-stoc> company, partnership, joint account Dcuenta en participacionE, association or
insurance company, organi)ed in the ,hilippine 2slands, no matter ho# created or
organi)ed, but not including duly registered general copartnership DcompaLias colectivasE,
a tax of three per centum upon such income4 and a li>e tax shall be levied, assessed,
collected, and paid annually upon the total net income received in the preceding calendar
year from all sources #ithin the ,hilippine 2slands by every corporation, joint-stoc>
company, partnership, joint account Dcuenta en participacionE, association, or insurance
company organi)ed, authori)ed, or existing under the la#s of any foreign country,
including interest on bonds, notes, or other interest-bearing obligations of residents,
corporate or other#ise7 Provided" however" That nothing in this section shall be construed
as permitting the taxation of the income derived from dividends or net pro'ts on #hich the
normal tax has been paid.
The gain derived or loss sustained from the sale or other disposition by a corporation,
joint-stoc> company, partnership, joint account Dcuenta en participacionE, association, or
insurance company, or property, real, personal, or mixed, shall be ascertained in
accordance #ith subsections DcE and DdE of section t#o of 5ct 9umbered T#o thousand
eight hundred and thirty-three, as amended by 5ct 9umbered T#enty-nine hundred and
t#enty-six.
The foregoing tax rate shall apply to the net income received by every taxable
corporation, joint-stoc> company, partnership, joint account Dcuenta en participacionE,
association, or insurance company in the calendar year nineteen hundred and t#enty and
in each year thereafter.
There is no doubt that if the plaintifs merely formed a community of property the latter is
exempt from the payment of income tax under the la#. Aut according to the stipulation facts the
plaintifs organi)ed a partnership of a civil nature because each of them put up money to buy a
s#eepsta>es tic>et for the sole purpose of dividing eBually the pri)e #hich they may #in, as they
did in fact in the amount of ,5!,!!! Darticle 1665, &ivil &odeE. The partnership #as not only
formed, but upon the organi)ation thereof and the #inning of the pri)e, /ose @atchalian
personally appeared in the o.ce of the ,hilippines &harity -#eepsta>es, in his capacity as co-
partner, as such collection the pri)e, the o.ce issued the chec> for ,5!,!!! in favor of /ose
@atchalian and company, and the said partner, in the same capacity, collected the said chec>. 5ll
these circumstances repel the idea that the plaintifs organi)ed and formed a community of
property only.
$aving organi)ed and constituted a partnership of a civil nature, the said entity is the one bound
to pay the income tax #hich the defendant collected under the aforesaid section 1! DaE of 5ct 9o.
30;;, as amended by section 3 of 5ct 9o. ;"61. There is no merit in plaintif?s contention that
the tax should be prorated among them and paid individually, resulting in their exemption from
the tax.
2n vie# of the foregoing, the appealed decision is a.rmed, #ith the costs of this instance to the
plaintifs appellants. -o ordered.
G.R. No. 18//9, P0!1+! e2 +. v. 'oo2 L*2 e2 +., 44 P3*+. ,2/
E(ILIO PUN&ALAN, E$ AL., plaintifs-appellants,
vs.
C. 'OO$ LIA$, E$ AL., defendants-appellants.
#ea$er and Armstron$" %. A. &obral and Loren!o and 'a(alac )or plainti*s+appellants.
,incaid" Per-ins and ,incaid and P. .. 'oore )or de)endants+appellants.
A#ANCE4A, J.:
On or about the 1;th of /uly, 13!, a 1oro by the name of Tamsi sa# from the &a#it-&a#it shores
in the ,rovince of Mamboanga, a big bul>y object in the distance #hich attracted his attention.
Thereupon, together #ith another 1oro named Aayrula, he #ent in a small boat to investigation
and found it to be a large 'sh. They then returned to shore, #here they met other 1oros and
reBuested their help to catch the 'sh. They #ent in three small boats, there being then in one,
seven in the other, and 've in the third, t#enty-t#o men, in all, t#enty-one of #hom are plaintifs
herein, and the remaining one named 5hamad is defendant. 5fter having arrived at the place
#here the 'sh #as, #hich #as found to be a #hale, they proceeded to pull it to#ard the shore up
to the mouth of the river, #here they Buartered it, having found in its abdomen a great Buantity
of ambergris, #hich #as placed in three sac>s, t#o of #hich #ere full and the other half full, and
ta>en to the house of 1aharaja Autu, #here they left it to the care of 5hamad. Then the contents
of the t#o full sac>s #ere placed in three trun>s. 5ll of these t#enty-t#o persons made an
agreement that they #ere to be the sole o#ners of this ambergris and that none of them could
sell it #ithout the consent of the rest. 5s to the half sac> of amber they agreed that some of
them should ta>e it to Mamboanga to sell for the purpose of ascertaining the mar>et price of the
ambergris, in order that they might dispose of the rest accordingly. -ome of them, #ith Tamsi in
charge, #ent to Mamboanga to sell the half sac> of amber #here they did dispose of it to a
&hinaman, &heong Tong, for the sum of ,3,"!!, #hich amount #as distributed among all the
parties in interest. Then they ofered to sell for the sum of ,13,!!! to the &hinamen, &heong
Tong and =im &hiat, the rest of the amber contained in the t#o sac>s #hich had been left in the
house of 1aharaja Autu, for safe>eeping, and a document D8xhibit 5E to this efect #as executed
by =im &hiat and &heong Tong, on the one hand, and Tamsi, 2mam =umuyod, and 2mam 5sa>il, on
the other. Thereupon they #ent to &a#it-&a#it on board the launch %hin$+-an$ to get the amber
so sold.
2t appears that there #ere other people in Mamboanga #ho >ne# of the existence of this
ambergris in the house of 1aharaja Autu. :hile the above related events #ere ta>ing place, 1r.
$enry 8. Tec>, #ho #as one of those having >no#ledge of the existence of this amber in &a#it-
&a#it and of the fact that the launch %hin$+-an$ had left for &a#it-&a#it, proposed to the master
of the revenue cutter 'indoro to go to &a#it-&a#it to sei)e some supposedly contraband opium.
5fter transmitting this information to the &ollector of &ustoms, he, the master of the 'indoro,
immediately proceeded to &a#it-&a#it. There #ere on board the vessel 1r. Tec>, some
&hinamen, among #hom #ere &. Aoon =iat, Ong &hua, and @o Tong, and some 1oros #ho,
according to 1r. Tec>, #ere to assist in the arrest of the smugglers. Gpon the arrival of
the 'indoro at &a#it-&a#it, the master, accompanied by 1r. Tec> and some 1oros, #ent to the
house of 1aharaja Autu. 5s is to be presumed, this information about the supposed contraband
opium #as but a tric> to have the 'indoro at their disposal. The master proceeded to search the
house, stating that he had information to the efect that there #as contraband opium and as a
result of the search, he found three large trun>s containing a blac> substance #hich had a bad
odor. $e then as>ed the o#ner of the house to #hom those three trun>s belonged, and the latter
pointed to 5hamad #ho #as present and #ho stated that the contents came from the abdomen
of a large 'sh. The master, ho#ever, said that it #as opium and told 5hamad that he #ould ta>e
the three trun>s on board the ship. Then 5hamad and other 1oros as>ed permission of the
master to accompany him on the voyage to Mamboanga, to #hich the master consented. :hen
already on board and during the voyage the master became convinced that the contents of the
three trun>s #ere not opium.
%uring the voyage, 1r. Tec> ofered to purchase the amber contained in the three trun>s, but
5hamad refused to sell it for the reason that he #as not the sole o#ner thereof, but o#ned it in
common #ith other persons #ho #ere in Mamboanga. $o#ever 1r. Tec>, aided by his
companions #ho #ielded some inFuence in Mamboanga, insisted that 5hamad should sell them
the amber, telling him not to be afraid of his companions, as he #ould ans#er for #hatever
might happen. :ith this promise of protection, 5hamad decided to sell the amber for ,",5!! and
received ,3,5!! as part payment on account of this price, a bill of sale having been signed by
5hamad, 1aharaja Autu and three 1oros more. The balance of this price #as paid later.
:hen &heong Tong, =im &hiat, and the 1oros #ho had gone to &a#it-&a#it on board the
launch %hin$+-an$ arrived at the house of 1aharaja Autu, they found that the amber they had
purchased from Tamsi and his companions #as no longer there.
The plaintifs are t#enty-one of the t#enty-t#o 1oros #ho had caught the #hale, and =im &hiat
and &heong Tong, #ho had purchased from Tamsi and his companions the amber contained in
the three trun>s deposited in the house of 1aharaja Autu for safe>eeping. They claim the 0!-N
>ilos of ambergris contained in three trun>s, or its value in the amount o ,6!,!!!, and damages
in the sum of ,3!,!!!. This action is brought against &. Aoon =iat, Ong &hua, @o Tong, $enry 8.
Tec>, and the 1oro, 5hamad, the 'rst four being the persons #ho purchased this same amber
from the one last named #hile on board the revenue cutter 'indoro.
2t appears from the foregoing that the amber in Buestion #as the undivided common property of
the plaintifs D#ith the exception of =im &hiat and &heong TongE and the defendant 5hamad. This
common o#nership #as acBuired by occupancy Darts. 6! and 61! of the &ivil &odeE, so that
neither Tamsi, 2mam =umuyod, or 2mam 5sa>il had any right to sell it, as they did, to =im &hiat
and &heong Tong, nor had the 1oro 5hamad any right to sell this same amber, as he did, to &.
Aoon =iat, Ong &hua, @o Tong, and $enry 8. Tec>. There #as an agreement bet#een the
coo#ners not to sell this amber #ithout the consent of all. Aoth sales having been made #ithout
the consent of all the o#ners, the same have no efect, except as to the portion pertaining to
those #ho made them Dart. ;, &ivil &odeE.
5lthough the original complaint 'led in this case #as entitled as one for replevin, in reality, from
its allegations, the action herein brought is the ordinary one for the recovery of the title to, and
possession of, this amber. 2t is no bar to the bringing of this action that the defendant 5hamad is
one of the coo#ners. The action for recovery #hich each coo#ner has, derived from the right of
o#nership inherent in the coo#nership, may be exercised not only against strangers but against
the coo#ners themselves, #hen the latter perform, #ith respect to the thing held in common,
acts for their exclusive bene't, or of exclusive o#nership, or #hich are prejudicial to, and in
violation of, the right of the community. D%ecision of the supreme court of -pain of /une 33,
103.E 2n this case the selling of the amber by the defendant 5hamad as his exclusive property
and his attitude in representing himself to be the sole o#ner thereof place him in the same
position as the stranger #ho violates any right of the community. $e is not sued in this case as a
coo#ner, for the cause of action is predicated upon the fact that he has acted not as a coo#ner,
but as an exclusive o#ner of the amber sold by him.
5s to the sale made by 5hamad, it is urged that the purchaser acted in good faith. 2t is
contended that the latter did not >no# that the amber belonged to some others besides 5hamad.
Aut the evidence sho#s other#ise. $enry 8. Tec> himself admitted that on the occasion of the
sale of the amber he really had promised 5hamad to protect him, and although he said that the
promise made by him had reference to the contingency of the amber proving to be opium, as the
master of the revenue cutter 'indoro believed, this is incredible, because he could not ma>e
5hamad such a promise, nor could such a promise, if made, have any inFuence on the mind of
5hamad, inasmuch as the latter >ne# that the amber #as not opium. 2f, as $enry 8. Tec> admits,
he made 5hamad this promise of protection, it should have been only on account of 5hamad?s
refusal to sell the amber due to the fact that he #as not the sole o#ner thereof.
:ith regard to the action of the trial court in not admitting 8xhibits 1 and 3 ofered by the
defendants, #e believed that it #as no error. These documents are a.davits signed by
,aslangan, and the best evidence of their contents #as the testimony of ,aslangan himself
#hom the plaintifs had the right to cross-examine. 1oreover, they are substantially the same as
the statements made by ,aslangan at the trial #hen testifying as #itness for the defendants, and
for this reason the ruling of the trial court excluding these documents #ould not, at all events,
afect the merits of the case.
2n the complaint it is alleged that the value of the amber is ,6!,!!!. Gpon the evidence adduced
on this point, and ta>ing into account that the defendant, $enry 8. Tec>, himself, testifying as
#itness, has stated that this amber #as #orth ,1,3!! per >ilo, #e accept this estimated value
set forth in the complaint.
The decision of the court belo# contains the follo#ing order for judgment7
:herefore, it is the judgment and order of the court that the defendants &. Aoon =iat, $enry 8.
Tec>, 5hamad Ong &hua, and @o Tong deliver to the plaintifs, 8milio ,unsalan, Aayrula, %aring
@umuntol, 1ohamad, 2nsael, %un>aland, Tahil, %ambul, %agan, -abay, -ahibul, ,ingay, 1ujahad,
5milol, Aaraula, -araban, =im &hiat, and &heong Tong t#enty-t#enty-'rst D3!O31E of the amber in
Buestion, or, in default thereof, to pay them its value of t#elve thousand pesos D,13,!!!E, less
one-t#enty-'rst of said amount.
Therefore, the judgment appealed from is a.rmed, #ith the only modi'cation that the value of
the amber #hich is the subject-matter of this action shall be ,6!,!!!, #ithout special 'nding as
to the costs of this instance. -o ordered.
G.R. No. 12,552 %ebr0r5 26, 2//,
$7IN $O7ER& CONDO(INIU( CORPORA$ION, petitioner,
vs.
$.E COUR$ O% APPEAL&, AL& (ANAGE(EN$ 8 DE#ELOP(EN$ CORPORA$ION,
AN$ONIO LI$ON-UA !" &ECURI$IE& AND E9C.ANGE CO((I&&ION, respondents.
% 8 & 2 - 2 O 9
CARPIO, J.:
The &ase
Aefore us is a petition for revie# on certiorari
1
to nullify the %ecision
3
dated 5ugust ;1, 15 of
the &ourt of 5ppeals and its (esolution
;
dated /anuary 16, 16 denying petitionerPs motion for
reconsideration. The &ourt of 5ppeals dismissed petitionerPs appeal from the %ecision en
banc
<
of the -ecurities and 8xchange &ommission, #hich reversed the order of the -8& $earing
O.cer.
5
The &ourt of 5ppeals dismissed the appeal for lac> of merit and for non-compliance #ith
the reBuirement on certi'cation of non-forum shopping.
6
The 5ntecedent +acts
On /une ;!, 100, petitioner T#in To#ers &ondominium &orporation DCpetitionerC for brevityE 'led
a complaint
"
#ith the -ecurities and 8xchange &ommission DC-8&C for brevityE against
respondents 5=- 1anagement H %evelopment &orporation DC5=-C for brevityE and 5ntonio
=itonjua DC=itonjuaC for brevityE. The complaint prayed that 5=- and =itonjua be ordered to pay
solidarily the unpaid condominium assessments and dues #ith interests and penalties covering
the four Buarters of 106 and 10" and the 'rst Buarter of 100.
The complaint alleged, among others, that petitioner, a non-stoc> corporation, is organi)ed for
the sole purpose of holding title to and managing the common areas of T#in To#ers
&ondominium DC&ondominiumC for brevityE. 1embership in petitioner corporation is compulsory
and limited to all registered o#ners of units in the &ondominium. 5=-, as registered o#ner of Gnit
9o. <-5 DCGnitC for brevityE of the &ondominium, is a member of petitioner. =itonjua, #ho is the
corporate president of 5=-, occupies the Gnit.
,etitioner collects from all its members Buarterly assessments and dues as authori)ed by its
1aster %eed and %eclaration of (estrictions DC1aster %eedC for brevityE and its Ay-=a#s. 5s of
the 'ling of the complaint #ith the -8&, petitionerPs records of account sho# that 5=- failed to
pay assessments and dues starting 106 up to the 'rst Buarter of 100. ,etitioner claimed
against both 5=- and =itonjua ,110,3;.3! as unpaid assessments and dues. This amount
includes accrued interests of ,;!,0!0.;; and penalty charges of ,",";.;<, plus , 1,5!!.!! as
unpaid contingency fund assessment for 10".
0
2n their joint 5ns#er #ith &ounterclaim, 5=- and =itonjua asserted that petitioner failed to state a
cause of action against =itonjua. 5=- and =itonjua argued that petitionerPs admission that 5=-
and not =itonjua is the registered o#ner of the Gnit and member of petitioner exonerates =itonjua
from any liability to petitioner. :hile 5=- is a juridical person that cannot by itself physically
occupy the Gnit, the natural person #ho physically occupies the Gnit does not assume the
liability of 5=- to petitioner. 9either does the agent #ho acts for the corporation become
personally liable for the corporationPs obligation.
5s counterclaim, 5=- claimed damages against petitioner arising from petitionerPs act of
repeatedly preventing 5=-, its agents and guests from using the par>ing space, s#imming pool,
gym, and other facilities of the &ondominium. 2n addition, =itonjua claimed damages against
petitioner for the latterPs act of including =itonjuaPs name in the list of delinBuent unit o#ners
#hich #as posted on petitionerPs bulletin board.

On %ecember 11, 11, the -8& $earing O.cer ordered petitioner to pay =itonjua moral and
exemplary damages for maliciously including =itonjuaPs name in the list of delinBuent unit
o#ners and for impleading him as a respondent. On the other hand, the -8& $earing O.cer
ordered 5=- to pay the assessments and dues to petitioner.
1!
$o#ever, the $earing O.cer did
not determine the exact amount to be paid by 5=- because petitioner failed to lay do#n the
basis for computing the unpaid assessments and dues.
11
The dispositive portion of the decision
reads thus7
C:$8(8+O(8, premises considered, judgment is hereby rendered as follo#s7
1. Ordering respondent 5=- to pay the legal assessmentsOdues due the complainant #ithin
thirty D;!E days from 'nality of this %ecision4 and
3. Ordering the complainant to pay respondent 5ntonio =itonjua the sum of T$(88
$G9%(8% T$OG-59% ,8-O- D,;!!,!!!.!!E as moral damages, +2+TK T$OG-59% ,8-O-
D,5!,!!!.!!E as exemplary damages, and T:O $G9%(8% T$OG-59% ,8-O-
D,3!!,!!!.!!E as and by #ay of attorneyPs fees.
-O O(%8(8%.C
13
9ot satis'ed #ith the -8& $earing O.cerPs decision, both parties 'led their respective appeals to
the -8& en banc.
1;
,etitioner assailed the a#ard of moral and exemplary damages as #ell as
attorneyPs fees in favor of =itonjua. On the other hand, 5=- appealed that portion of the decision
ordering it to pay to petitioner the assessments and dues.
2n a decision dated /uly ;!, 1;, the -8& en banc nulli'ed the a#ard of damages and attorneyPs
fees to =itonjua on the ground that the -8& had no jurisdiction over =itonjua. The -8& en
banc held that there is no intra-corporate relationship bet#een petitioner and =itonjua #ho is not
the registered o#ner of the Gnit and thus, not a member of petitioner. The -8& en banc stated
that petitioner could not invo>e the doctrine of piercing the veil of 5=-P corporate 'ction since
disregarding the corporate entity is a function of the regular courts.
+urthermore, the -8& en banc remanded the case to the $earing O.cer to determine the value
of the services petitioner failed to render to 5=- because of the latterPs non-use of the
&ondominium facilities. The -8& en bancruled that the value of these services could be deducted
from the unpaid assessments and dues that 5=- o#es petitioner.
Thus, the -8& en banc declared7
C:$8(8+O(8, in vie# of the foregoing, the order appealed from is hereby reversed insofar as it
a#ards moral and exemplary damages and attorneyPs fees to respondent =itonjua as the same is
null and void for lac> of jurisdiction of this &ommission over the said party.
1<
5s regards that portion of the appealed Order directing respondent 5=- to pay the legal
assessmentOdues to the complainant TT& #ithin thirty D;!E QdaysR from 'nality of the said
decision, the same is hereby modi'ed by remanding the case to the hearing o.cer
for "e2erm*!2*o! o: 23e v+0e o: 23e 1erv*;e1 <*233e+" by the complainant TT& from
respondent 5=- in order that the same may be deducted from the amount of legal assessments
and dues #hich the respondent corporation shall pay to the complainant.
-O O(%8(8%.C
15
D8mphasis suppliedE
,etitioner appealed the -8& en banc %ecision to the &ourt of 5ppeals contending grave error or
grave abuse of discretion by the -8& en banc.
The (uling of the &ourt of 5ppeals
The &ourt of 5ppeals dismissed petitionerPs appeal on both procedural and substantive grounds.
,rocedurally, the &ourt of 5ppeals found the petition defective for failure to contain a s#orn
certi'cation of non-forum shopping as reBuired by -ection 6 of 5dministrative &ircular 9o. 1-5
and -ection 3 of (evised &ircular 9o. 30-1.
On the merits, the &ourt of 5ppeals substantially a.rmed the decision of the -8& en banc that
there is no ground to pierce the veil of 5=-P corporate 'ction. The &ourt of 5ppeals held that
there is nothing in the records to sho# that 5=- is engaged in unla#ful, business or that =itonjua
is using 5=- to defraud third parties. The fact alone that 5=- is in arrears in paying its
assessments and dues does not ma>e 5=- or =itonjua guilty of fraud #hich #ould #arrant
piercing the corporate veil of 5=-. Thus, it #as improper for petitioner to post =itonjuaPs name
instead of 5=-P in the list of delinBuent unit o#ners since =itonjua is not a member of petitioner.
The &ourt of 5ppeals also sustained the claim of petitioner against 5=- for unpaid assessments
and dues but found that petitioner failed to substantiate by preponderance of evidence the basis
for computing the unpaid assessments and dues. Thus, the &ourt of 5ppeals remanded the case
to the -8& $earing O.cer for further reception of evidence and for determination of the exact
amount of 5=-P liability to petitioner. The &ourt of 5ppeals, ho#ever, directed the -8& $earing
O.cer to deduct from 5=-P unpaid assessments and dues the value of the services denied to 5=-
because of the latterPs non-use of the &ondominium facilities. 2n allo#ing the deduction, the
&ourt of 5ppeals declared the &ondominiumPs $ouse (ule 36.; as ultra vires. $ouse (ule 36.;,
#hich petitioner claims as its basis for denying the use of the &ondominium facilities to 5=-,
authori)es #ithholding of the use of the &ondominium facilities from delinBuent unit o#ners. The
&ourt of 5ppeals, ho#ever, ruled that petitioner is not expressly authori)ed by its 1aster %eed
and Ay-=a#s to prohibit delinBuent members from using the facilities of the &ondominium.
The &ourt of 5ppeals #ent further and declared the interest and penalty charges prescribed by
$ouse (ule 36.5
16
on delinBuent accounts as exorbitant or grossly excessive, although this #as
not raised as an issue. :hile in its complaint, petitioner sought to recover ,110,3;.3! as unpaid
assessments and dues, in its amended petition for revie#, petitioner sought ,<,53."5, more
than eight times the amount it originally claimed from 5=-.
1"
2n the dispositive portion of its assailed decision, the &ourt of 5ppeals declared7
C:$8(8+O(8, the instant petition is hereby %8928% and is accordingly %2-12--8%.C
10
$ence, this petition.
The 2ssues
2n its 1emorandum, petitioner assigns the follo#ing errors in the decision of the &ourt of
5ppeals7
1. C29 %2-12--29@ T$8 ,8T2T2O9 5==8@8%=K A8&5G-8 O+ ,8T2T2O98(P- +52=G(8 TO
&O1,=K :2T$ T$8 ,8(T2989T ,(O*2-2O9- O+ -G,(818 &OG(T &2(&G=5( 9O-. 1-5 59%
30-1 O9 T$8 &8(T2+2&5T2O9 5@529-T +O(G1 -$O,,29@4C
3. C29 O(%8(29@ 5 (8159% O+ T$8 &5-8 A5&I TO T$8 $85(29@ O++2&8( +O( T$8
(8&8,T2O9 O+ 8*2%89&8 +O( -8(*2&8- -G,,O-8%=K 9OT (89%8(8% AK ,8T2T2O98(4C
;. C29 %8&=5(29@ $OG-8 (G=8 9O. 36.; 5- G=T(5 *2(8-4C
<. C29 +29%29@ T$8 ,895=T28- 59% 29T8(8-T- ,(8-&(2A8% 29 $OG-8 (G=8 36.5
1
5-
8JO(A2T59T 59% @(O--=K 8J&8--2*84C
5. C29 (8+G-29@ TO (8&O@92M8 T$8 +5&T T$5T (8-,O9%89T =2TO9/G5 59% 9OT 5=- 2-
T$8 (85= O:98( O+ 5,5(T189T G92T <-54C and
6. C29 +52=29@ TO +29% T$5T T$8(8 2- O9 (8&O(% O*8(:$8=129@ 8*2%89&8 TO -$O:
T$8 A5-2- O+ T$8 %G8- 59% 5--8--189T- A829@ &O==8&T8% +(O1 T$8 ,(2*5T8
(8-,O9%89T-.C
3!
The (uling of the &ourt
The petition is partly meritorious.
5 perusal of the foregoing issues readily reveals that petitioner raises t#o aspects of the case for
consideration - the procedural aspect and the substantive aspect.
:e #ill discuss the procedural aspect 'rst.
Non+compliance with &upreme %ourt %ircular No. /+01 and 2evised %ircular No. 34+0/.
,etitioner submits that the &ourt of 5ppeals erred in dismissing its appeal for non-compliance
#ith -upreme &ourt &ircular 9o. 1-5 and (evised &ircular 9o. 30-1. ,etitioner asserts that
#hen it 'led its petition, both circulars #ere not yet in full force.
,etitioner 'led its petition for revie# #ith the &ourt of 5ppeals on 5ugust 10, 1; and its
amended petition on -eptember ;, 1;. Aoth the original and amended petitions #ere 'led
before the efectivity of (evised 5dministrative &ircular 9o. 1-5 on /une 1, 15. $o#ever,
contrary to petitionerPs claim, before the issuance of (evised 5dministrative &ircular 9o. 1-5,
there #as already an existing circular reBuiring a s#orn certi'cation of non-forum shopping from
a party 'ling a petition for revie# #ith the &ourt of 5ppeals./a567phi/.net
&ircular 9o. 30-1, #hich too> efect on /anuary 1, 13, reBuired a s#orn certi'cation of non-
forum shopping in cases 'led #ith the &ourt of 5ppeals and the -upreme &ourt. &ircular 9o. 30-
1 speci'cally provides for summary dismissal of petitions #hich do not contain a s#orn
certi'cation of non-forum shopping. -ections 3 and ; of &ircular 9o. 30-1 state7
C3. %ertifcation - The party must certify under oath that he has not commenced any other action
or proceeding involving the same issues in the -upreme &ourt, the &ourt of 5ppeals, or diferent
%ivisions thereof, or any other tribunal or agency, and that to the best of his >no#ledge, no such
action or proceeding is pending in the -upreme &ourt, the &ourt of 5ppeals, or diferent %ivisions
thereof, or any other tribunal or agency. 2f there is any action pending, he must state the status
of the same./awphi/.n8t 2f he should learn that a similar action or proceeding has been 'led or is
pending before the -upreme &ourt, the &ourt of 5ppeals, or diferent %ivisions thereof, or any
other tribunal or agency, he should notify the court, tribunal or agency #ithin 've D5E days from
such notice.
;. Penalties -
a. 5ny violation of this &ircular shall be a cause for the summary dismissal of the multiple
petition or complaint.
x x x.C
&learly, petitioner cannot claim that at the time of the 'ling of its petitions #ith the &ourt of
5ppeals, it #as not reBuired under any existing -upreme &ourt &ircular to include in its petitions
a s#orn certi'cation of non-forum shopping. &ircular 9o. 30-1 applies in the instant case, being
the &ircular in force at the time. ,etitioner cannot even feign ignorance of &ircular 9o. 30-1 as
its petitions #ere 'led more than one year after the &ircularPs efectivity. The rule against forum
shopping has long been established and &ircular 9o. 30-1 merely formali)ed the prohibition and
provided the appropriate penalties against violators.
31
The &ourt of 5ppeals did not err in dismissing the petition for this procedural lapse. $o#ever,
special circumstances or compelling reasons may justify relaxing the rule reBuiring certi'cation
on non-forum shopping.
33
Technical rules of procedure should be used to promote, not frustrate
justice. :hile the s#ift unclogging of court doc>ets is a laudable objective, granting substantial
justice is an even more urgent ideal.
3;
The certi'cate of non-forum shopping is a mandatory
reBuirement. 9onetheless, this reBuirement must not be interpreted too literally to defeat the
ends of justice.
3<
2n the instant case, the merits of petitionerPs case should be considered special circumstances or
compelling reasons that justify tempering the hard conseBuence of the procedural reBuirement
on non-forum shopping. 2n the interest of justice, #e reinstate the petition.
8ssentially, the substantive issues for resolution in the instant petition can be summari)ed into
four, as follo#s7
1. :hether petitioner can collect assessments and dues despite its denial to 5=- of the
use of the &ondominium facilities pursuant to $ouse (ule 36.;4
3. :hether 5=- can validly ofset against its unpaid assessments and dues the value of the
services #ithheld by petitioner4
;. :hether a remand of the case to the proper trial court is necessary to determine the
amounts involved4 and
<. :hether the penalties prescribed in $ouse (ule 36.3 are grossly excessive and
exorbitant.
9irst :ssue: Payment o) assessments and dues.
Petitioner;s authority to assess dues.
,etitioner #as organi)ed to hold title to the common areas of the &ondominium and to act as its
management body. The &ondominium 5ct, the la# governing condominiums, states that7
CTitle to the common areas, including the land, or the appurtenant interests in such areas, may
be held by a corporation specially formed for the purpose Dhereinafter >no#n as the
Ccondominium corporationCE in #hich the holders of separate interests shall automatically be
members or shareholders, to the exclusion of others, in proportion to the appurtenant interest of
their respective units in the common areas. xxxC
35
The &ondominium 5ct provides that the 1aster %eed may authori)e the condominium
corporation to collect Creasonable assessments to meet authori)ed expenditures.C
36
+or this
purpose, each unit o#ner Cmay be assessed separately for its share of such expenditures in
proportion Dunless other#ise providedE to its o#nerPs fractional interest in the common
areas.C
3"
5lso, -ection 3! of the &ondominium 5ct declares7
C-ection 3!. 5n assessment upon any condominium made in accordance with a duly
registered declaration of restrictions shall be an obligation of the owner thereof at the
Stime the assessment is made. xxxC D8mphasis suppliedE
,etitioner is expressly authori)ed by its 1aster %eed to impose reasonable assessments on its
members to maintain the common areas and facilities of the &ondominium. -ection <, ,art 22 of
petitionerPs 1aster %eed provides7
C-ection <. 5--8--189T-. +rom and after date 5yala 2nvestment H %evelopment &orporation
formally conveys the condominium project to the &ondominium &orporation, the owner of
each unit shall be proportionately liable for the common expenses of the
condominium project, which shall be assessed against each unit owner in the project
and paid to the Condominium Corporation as provided in ,art 2 -ection 0 DbE hereof at such
times and in such manner as shall be provided in the Ay-=a#s of the &ondominium &orporation,
a.E Regular assessments for such amounts as shall be necessary to meet the
operating expenses of the Condominium Corporation as #ell as such amounts,
determined in accordance #ith the provisions of the Ay-=a#s, to be made for the purpose
of creating and maintaining a special fund for capital expenditures on the common areas
of the project4 including the cost of extraordinary repairs, reconstruction or restoration
necessitated by damage, depreciation, obsolescence, expropriation or condemnation of
the common areas or part thereof, as #ell as the cost of improvements or additions
thereto authori)ed in accordance #ith the provisions of the Ay-=a#s4
b.E xxx
c.E There may be assessed against the unit o#ners, in the manner prescribed herein or in
the Ay-=a#s of the &ondominium &orporation, such other assessments as are not
specifcally provided for herein
d.E The amount of any such assessment, plus interest penalties, attorneyPs fees and other
charges incurred for the collection of such assessment, shall constitute a lien upon the unit
and on the appurtenant interest of the unit o#ner in the &ondominium &orporation. -uch
lien shall be constituted in the manner provided in the Ay-=a#s of the &ondominium
&orporation. The foreclosure, transfer of conveyance, as #ell as redemption of the unit
shall include the unit o#nerPs appurtenant interest in the &ondominium &orporation. The
&ondominium &orporation shall have the po#er to bid at the foreclosure sale.C
30
Thus, petitionerPs right to collect assessments and dues from its members and the corollary
obligation of its members to pay are beyond dispute.
There is also no Buestion that 5=- is a member of petitioner considering that 5=- is the
registered o#ner of the Gnit. Gnder the automatic exclusive membership clause in the 1aster
%eed,
3
5=- became a regular member of petitioner upon its acBuisition of a unit in the
&ondominium.
5s a member of petitioner, 5=- assumed the compulsory obligation to share in the common
expenses of the &ondominium. This compulsory obligation is further emphasi)ed in -ection 0,
paragraph c, ,art 2 of the 1aster %eed, to #it7
C8ach member of the &ondominium &orporation shall share in the common expenses of the
condominium project in the same sharing or percentage stated xxxC
;!
D8mphasis suppliedE
Gndoubtedly, as a member of petitioner, 5=- is legally bound to pay petitioner assessments and
dues =O maintain the common areas and facilities of the &ondominium. 5=-P obligation arises
from both the la# and its contract #ith the &ondominium developer and other unit o#ners.
,etitionerPs 1aster %eed provides that a member of the &ondominium corporation shall share in
the common expenses of the condominium project.
;1
This obligation does not depend on the use
or non-use by the member of the common areas and facilities of the &ondominium. :hether or
not a member uses the common areas or facilities, these areas and facilities #ill have to be
maintained. 8xpenditures must be made to maintain the common areas and facilities #hether a
member uses them freBuently, infreBuently or never at all.
5=- asserts that the denial by petitioner to 5=- and =itonjua of the use of the &ondominium
facilities deprived petitioner of any right to demand from 5=- payment of any condominium
assessments and dues. 5=- contends that the right to demand payment of assessments and
dues carries #ith it the correlative obligation to allo# the use of the &ondominium facilities. 5=-
is correct if it had not defaulted on its assessment and dues before the denial of the use of the
facilities. $o#ever, the records clearly sho# that petitioner denied 5=- and =itonjua the use of
the facilities only a)ter 5=- had defaulted on its obligation to pay the assessments and dues. The
denial of the use of the facilities #as the sanction for the prior default incurred by 5=-.
2n essence, #hat 5=- #ants is to use its o#n prior non-payment as a justi'cation for its future
non-payment of its assessments and dues. -tated another #ay, 5=- advances the argument that
a contracting party #ho is guilty of 'rst breaching his obligation is excused from such breach if
the other party retaliates by refusing to comply #ith his o#n obligation.
This obviously is not the la#. 2n reciprocal obligations, #hen one partyP ful'lls his obligation, and
the other does not, delay by the other begins. 1oreover, #hen one party does not comply #ith
his obligation, the other party does not incur delay if he does not perform his o#n reciprocal
obligation because of the 'rst partyPs non-compliance. This is embodied in 5rticle 116 of the
&ivil &ode, the relevant provision of #hich reads7
C2n reciprocal obligations, neither party incurs in delay if the other does not comply or is not
ready to comply in a proper manner #ith #hat is incumbent upon him. +rom the moment one of
the parties ful'lls his obligation, delay by the other begins.C
Thus, before 5=- incurred its arrearages, petitioner allo#ed 5=- to use the facilities. $o#ever,
5=- subseBuently defaulted and thus incurred delay. 2t #as only then that petitioner disallo#ed
5=- and =itonjua from using the facilities. &learly, petitionerPs denial to 5=- of the &ondominium
facilities, after 5=- had defaulted, does not constitute a valid ground on the part of 5=- to refuse
paying its assessments and dues.
<alidity o) =ouse 2ule 3>.?.
,etitionerPs $ouse (ules and (egulations DC$ouse (ulesC for brevityE expressly authori)e denial of
the use of condominium facilities to delinBuent members. -peci'cally, $ouse (ule 36.; provides
that7
C36. 5--8--189T-7
x x x
36.; 9ames of unit o#ners #ith delinBuent accounts #ho fail to pay t#o consecutive Buarters
shall be posted in the bulletin board. !nit owners with delin"uent accounts, their tenants,
guests#visitors and relatives shall not be allowed the use of all facilities of the
condominium such as the swimming pool, gym, social hall, etc.$D8mphasis suppliedE
The issue on the validity of $ouse (ule 36.; #as raised for the 'rst time on appeal. 2t is settled
that an issue not raised during trial could not be raised for the 'rst time on appeal as to do so
#ould be ofensive to the basic rules of fair play, justice, and due process.
;3
9onetheless, the
&ourt of 5ppeals opted to address this issue.
,etitioner justi'es $ouse (ule 36.; by invo>ing -ection ;6, paragraph 11 of the &orporation &ode
#hich grants every corporation the po#er Cto exercise such po#ers as may be essential or
necessary to carry out its purpose or purposes as stated in its 5rticles of 2ncorporation.C
,etitioner #as organi)ed for the main purpose of holding title to and managing the common
areas of the &ondominium. ,etitioner claims that there is here implied the po#er to enact such
measures as may be necessary to carry out the provisions of the 5rticles of 2ncorporation, Ay-
=a#s and 1aster %eed to deal #ith delinBuent members. This, asserts petitioner, includes the
po#er to enact $ouse (ule 36.; to protect and safeguard the interests not only of petitioner but
also of its members.
+or their part, 5=- and =itonjua assail the validity of $ouse (ule 36.; alleging that it is ultra
vires. 5=- and =itonjua maintain that neither the 1aster %eed nor the Ay-=a#s of petitioner
expressly authori)es petitioner to prohibit delinBuent members from using the &ondominium
facilities. Aeing ultra vires" $ouse (ule 36.; binds no one. 8ven assuming that $ouse (ule 36.;
is intra vires" the same is iniBuitous, unconscionable, and contrary to morals, good customs and
public policy. Thus, 5=- claims it can validly deduct the value of the services #ithheld from the
assessments and dues since it #as barred from using the &ondominium facilities for #hich the
assessments and dues #ere being collected.
The &ourt of 5ppeals sustained respondentsP argument and declared $ouse (ule 36.; ultra
vires on the ground that petitioner is not expressly authori)ed by its 1aster %eed or its Ay-=a#s
to promulgate $ouse (ule 36.;.
$ouse (ule 36.; clearly restricts delinBuent members from the use and enjoyment of the
&ondominium facilities. The Buestion is #hether petitioner can validly adopt such a sanction to
enforce the collection of &ondominium assessments and dues.
:e rule that $ouse (ule 36.; is valid.
-ection <5 of the &orporation &ode provides7
C-ec. <5. @ltra vires acts of corporations. - 9o corporation under this code shall possess or
exercise any corporate po#ers except those conferred by this &ode or by its articles of
incorporation and except such as are necessary or incidental to the exercise of the po#ers so
conferred.C
The term ultra vires refers to an act outside or beyond corporate po#ers, including those that
may ostensibly be #ithin such po#ers but are, by general or special la#s, prohibited or declared
illegal.
;;
The &orporation &ode de'nes an ultra vires act as one outside the po#ers conferred by
the &ode or by the 5rticles of 2ncorporation, or beyond #hat is necessary or incidental to the
exercise of the po#ers so conferred. 1oreover, special la#s governing certain classes of
corporations, li>e the &ondominium 5ct, also grant speci'c corporate po#ers to corporations
falling under such special la#s.
The &ondominium 5ct, petitionerPs Ay-=a#s and the 1aster %eed expressly empo#er petitioner
to promulgate $ouse (ule 36.;. -ection of the &ondominium 5ct provides7
C-ection . The o#ner of a project shall, prior to the conveyance of any condominium therein,
register a declaration of restrictions relating to such project, #hich restrictions xxx shall inure to
and bind all condominium o#ners in the project. xxx The (egister of %eeds shall enter and
annotate the declaration of restrictions upon the certi'cate of title covering the land included
#ithin the project, if the land is patented or registered under the =and (egistration or &adastral
acts.
xxx
-uch declaration of restrictions, among other things, may also provide7
%a& 's to any management body(
). *or the powers thereof, +ncluding power to enforce the provisions of the
declaration of restrictions
x x x
;. ,rovisions for maintenance xxx and other services benefting the common
areas, xxxC D8mphasis suppliedE
The &ondominium 5ct clearly provides that the 1aster %eed may expressly empo#er the
management body, petitioner in the instant case, to enforce all provisions in the 1aster %eed
and %eclaration of (estrictions.
,ursuant to -ection DaE D1E and D;E of the &ondominium 5ct, the 1aster %eed expressly
authori)es petitioner to exercise all the po#ers granted to the management body by the
&ondominium 5ct, petitionerPs 5rticles of 2ncorporation and Ay-=a#s, the 1aster %eed, and the
&orporation &ode. -ection ;, ,art 22 of the 1aster %eed reads7
C-ection ;. 1595@8189T AO%K. - The &ondominium &orporation to be formed and organi)ed
pursuant to -ection " of ,art 2, above, shall constitute the management body of the project. 's
such management body, the powers of the Condominium Corporation shall be such as
are provided by the Condominium 'ct, by the 'rticles of +ncorporation and the ,y(
-aws of the Corporation, by this instrument and by the applicable provisions of the
Corporation Code as are not inconsistent with the Condominium 'ct. 5mong such
po#ers but not by #ay of limitation, it shall have the power to enforce the provisions
thereof in accordance with the ,y(-aws of the corporation.$ D8mphasis suppliedE
Thus, the 1aster %eed clearly empo#ers petitioner to enforce the provisions of the 1aster %eed
in accordance #ith petitionerPs Ay-=a#s.
,etitionerPs Ay-=a#s expressly authori)e petitionerPs Aoard of %irectors to promulgate rules and
regulations on the use and enjoyment of the common areas. Thus, paragraph 3, -ection 3 of
petitionerPs Ay-=a#s states7
C:ithout limiting the general nature of the foregoing po#ers, the Aoard of %irectors shall have
the po#er to enforce the limitations, restrictions, and conditions contained in the 1aster %eed
and %eclaration of (estrictions of the project= promulgate rules and regulations concerning
the use, enjoyment and occupancy of the units, common areas and other properties in
the condominium project, to ma>e and collect assessments against members as unit o#ners
to defray the costs and expenses of the condominium project and the corporation and to secure
by legal means the observance of the provisions of the &ondominium 5ct, the 1aster %eed, the
5rticles of 2ncorporation, these Ay-=a#s, and the rules and regulations promulgated by it in
accordance here#ith. The members of the corporation bind themselves to comply faithfully #ith
all these provisions.C
;<
D8mphasis suppliedE
8vidently, the &ondominium 5ct, the 1aster %eed and petitionerPs Ay-=a#s grant petitioner the
express po#er to promulgate rules and regulations concerning the use, enjoyment and
occupancy of the common areas.
1oreover, $ouse (ule 36.;, #hich prohibits delinBuent members from using the common areas,
is necessary to ensure maintenance of the common areas. ,etitionerPs purpose in enacting
$ouse (ule 36.; is to enforce efectively the provisions of the 1aster %eed. $ouse (ule 36.; is
#ell #ithin the po#ers of petitioner to adopt as the same is reasonably necessary to attain the
purpose for #hich both petitioner and the &ondominium project #ere created. Thus, -ection " of
the 1aster %eed declares7
C-ection ". &O9%O1292G1 &O(,O(5T2O9. - 5 corporation to be >no#n as T$8 T:29 TO:8(-
&O9%O1292G1 Dhereinafter referred to as the C&ondominium &orporationCE, shall be formed and
organi)ed pursuant to the &ondominium 5ct and the &orporation &ode to hold title to all the
aforestated common areas of the condominium project including the land, to manage T$8 T:29
TO:8(- &O9%O1292G1 and to do such other things as may be necessary, incidental and
convenient to the accomplishment of said purposes xxxC
;5
D8mphasis suppliedE
,etitioner #ould be unable to carry out its main purpose of maintaining the &ondominium
common areas and facilities if members refuse to pay their dues and yet continue to use these
areas and facilities. To impose a temporary ban on the use of the common areas and facilities
until the assessments and dues in arrears are paid is a reasonable measure that petitioner may
underta>e to compel the prompt payment of assessments and dues.
&econd :ssue: A*settin$ the value o) services withheld a$ainst AL&; unpaid assessments and
dues.
AL&; claim )or reduction o) its assessments and dues because o) its non+use o) the %ondominium
)acilities.
:e rule that 5=- has no right to a reduction of its assessments and dues to the extent of its non-
use of the &ondominium facilities. 5=- also cannot ofset damages against its assessments and
dues because 5=- is not entitled to damages for alleged injury arising from its o#n violation of its
contract. -uch a breach of contract cannot be the source of rights or the basis of a cause of
action.
;6
To recogni)e the validity of such claim #ould be to legali)e 5=-P breach of its contract.
AL&; claim )or unrendered repair services barred by estoppel.
5=- also justi'es its non-payment of dues on the ground of the alleged failure of petitioner to
repair the defects in 5=-P Gnit. $o#ever, this claim for unrendered repairs #as never raised
before the -8& $earing O.cer or the -8&en banc. The issue on these alleged unrendered
repairs, #hich supposedly caused 5=-P Gnit to deteriorate, #as raised for the 'rst time on appeal.
The &ourt of 5ppeals did not pass upon the same.
9either in the proceedings in the -8& nor in the appellate court did 5=- present evidence to
substantiate its allegation that petitioner failed to render the repair services. 5lso, 5=- failed to
establish #hether it claimed for the costs of the repair because 5=- advanced these expenses, or
for the value of damages caused to the Gnit by the #ater lea>age.
5=- is therefore barred at this late stage to interpose this claim. I! .el Rosario v. ,onga"
;"
the
&ourt held7
C5s a rule, no Buestion #ill be entertained on appeal unless it has been raised in the court belo#.
,oints of la#, theories, issues and arguments not brought to the attention of the lo#er court need
not be, and ordinarily #ill not be, considered by a revie#ing court, as they cannot be raised for
the 'rst time at that late stage. Aasic considerations of due process impel this rule.C
5s this claim #as a separate cause of action #hich should have been raised in 5=-P 5ns#er #ith
&ounterclaim, 5=-P failure to raise this claim is deemed a #aiver of the claim.
Third :ssue: 2emand o) the case to the proper trial court.
Question o) )act.
The &ourt of 5ppeals ruled that there is a need to remand the case considering that there is no
su.cient evidence on record to establish the amount of petitionerPs claim against 5=- for unpaid
assessments and dues.
The Buestion of #hether petitionerPs claim of ,<,53."5 for unpaid assessments and dues
against 5=- is supported by su.cient evidence is a purely factual issue and inevitably reBuires
the #eighing of evidence. This &ourt is not a trier of facts, and it is not the function of this &ourt
to re-examine the evidence submitted by the parties.
;0
2n cases brought before this &ourt from
the &ourt of 5ppeals under (ule <5 of the (ules of &ourt, this &ourtPs jurisdiction is limited to
revie#ing errors of la# #hich must be distinctly set forth.
;
2n this mode of appeal, the 'ndings of
fact of the &ourt of 5ppeals and other courts of origin are conclusive.
<!
/urisprudence is settled that7
CDaEs a rule, the jurisdiction of this &ourt in cases brought to it from the &ourt of 5ppeals xxx is
limited to the revie# and revision of errors of la# allegedly committed by the appellate court, as
its 'ndings of fact are deemed conclusive. 5s such this &ourt is not duty-bound to analy)e and
#eigh all over again the evidence already considered in the proceedings belo#.C
<1
This rule admits of several exceptions. This &ourt may revie# the 'ndings of fact of the &ourt of
5ppeals7
CDaE #here there is grave abuse of discretion4 DbE #hen the 'nding is grounded entirely on
speculations, surmises or conjectures4 DcE #hen the inference made is manifestly mista>en,
absurd or impossible4 DdE #hen the judgment of the &ourt of 5ppeals #as based on a
misapprehension of facts4 DeE #hen the factual 'ndings are conFicting4 D+E #hen the &ourt of
5ppeals, in ma>ing its 'ndings, #ent beyond the issues of the case and the same are contrary to
the admissions of both appellant and appellee4 DgE #hen the &ourt of 5ppeals manifestly
overloo>ed certain relevant facts not disputed by the parties and #hich, if properly considered,
#ould justify a diferent conclusion4 and, DhE #here the 'ndings of fact of the &ourt of 5ppeals are
contrary to those of the trial court, or are mere conclusions #ithout citation of speci'c evidence,
or #here the facts set forth by the petitioner are not disputed by the respondent, or #here the
'ndings of fact of the &ourt of 5ppeals are premised on the absence of evidence and are
contradicted by the evidence on record.C
<3
$o#ever, none of these exceptions exists in the instant case.
The -8& $earing O.cer found that, #hile petitioner is entitled to collect the unpaid assessments
and dues from 5=-, petitioner has failed to establish clearly the basis for computing the correct
amount of the unpaid assessments and dues. 2ndeed, there is no evidence laying do#n the basis
of petitionerPs claim other than allegations of previous demands and statements of accounts.
:hether petitioner has su.ciently established its claim by preponderance of evidence reBuires
an examination of the probative #eight of the evidence presented by the parties. 8vidently, this
is a Buestion of fact the resolution of #hich is beyond the purvie# of the petition for revie#
#here only errors of la# may be raised. On the other hand, the decision of the &ourt of 5ppeals,
'nding insu.cient evidence on record, #as made under its po#er to revie# both Buestions of
fact and la#.
2emand to the proper trial court.
:hile #e sustain the ruling of the &ourt of 5ppeals, the case can no longer be remanded to the
-8& $earing O.cer. (epublic 5ct 9o. 0", #hich too> efect on 5ugust 0, 3!!!, transferred
-8&Ps jurisdiction over cases involving intra-corporate disputes to courts of general jurisdiction or
the appropriate regional trial courts. -ection 5.3 of (.5. 9o. 0" reads7
C5.3. The &ommissionPs jurisdiction over all cases enumerated under -ection 5 of ,residential
%ecree 9o. !3-5 is hereby transferred to the &ourts of general jurisdiction or the appropriate
(egional Trial &ourt4 ,rovided, That the -upreme &ourt in the exercise of its authority may
designate the (egional Trial &ourt branches that shall exercise jurisdiction over these cases. The
&ommission shall retain jurisdiction over pending cases involving intra-corporate disputes
submitted for 'nal resolution #hich should be resolved #ithin one D1E year from the enactment of
this &ode. The &ommission shall retain jurisdiction over pending suspension of
paymentsOrehabilitation cases 'led as of ;! /une 3!!! until 'nally disposed.C
Aased on the (esolution issued by this &ourt in 51 9o. !!-0-1!--&,
<;
the &ourt 5dministrator and
the -ecurities and 8xchange &ommission should cause the transfer of the records of -8&-5& 9os.
;"" and ;"0 to the proper regional trial court for further reception of evidence and computation
of the correct amount of assessments and dues that 5=- shall pay to petitioner.
9ourth :ssue: Penalties prescribed in =ouse 2ule 3>.3.
5=- and =itonjua did not Buestion before either the -8& or the &ourt of 5ppeals the validity of the
penalties prescribed in the &ondominiumPs $ouse (ule 36.3. 9evertheless, the &ourt of 5ppeals
ruled that $ouse (ule 36.3 prescribes grossly excessive penalties and interests. The resolution of
this issue is not necessary in arriving at a complete and just resolution of this case. 5t any rate,
#e 'nd the interest and penalties prescribed under $ouse (ule 36.3 reasonable considering the
premier location of the &ondominium at the heart of 1a>ati &ity. 2t is inevitable that 5=-P unpaid
assessments and dues #ould escalate because 5=-P delinBuency started since 106.
$ouse (ule 36.3 clearly provides for a 3<T interest and an 0T penalty, both running annually, on
the total amount due in case of failure to pay, to #it7
C36.3. =ate payment of accounts of members shall be charged an interest rate of 3<T per
annum. 2n addition, a penalty at the rate of 0T per annum shall be charged on delinBuent
accounts. The 3<T interest shall be imposed on unpaid accounts starting #ith the 31st day of
the Buarter until fully paid.C
To reiterate, the &ondominium 5ct expressly provides that the 1aster %eed may empo#er the
management body of the &ondominium Cto enforce the provisions of the declaration of
restrictions.C
<<
The 1aster %eed authori)es petitioner, as the management body, to enforce the
provisions of the 1aster %eed in accordance #ith petitionerPs Ay-=a#s. Thus, petitionerPs Aoard
of %irectors is authori)ed to determine the reasonableness of the penalties and interests to be
imposed against those #ho violate the 1aster %eed. ,etitioner has validly done this by adopting
the $ouse (ules.
The 1aster %eed binds 5=- since the 1aster %eed is annotated on the condominium certi'cate
of title of 5=-P Gnit. The 1aster %eed is 5=-P contract #ith all &ondominium members #ho are all
co-o#ners of the common areas and facilities of the &ondominium. &ontracts have the force of
la# bet#een the parties and are to be complied #ith in good faith.
<5
+rom the moment the
contract is perfected, the parties are bound to comply #ith #hat is expressly stipulated as #ell as
#ith #hat is reBuired by the nature of the obligation in >eeping #ith good faith, usage and the
la#.
<6
Thus, #hen 5=- purchased its Gnit from petitioner, 5=- #as bound by the terms and
conditions set forth in the contract, including the stipulations in the $ouse (ules of petitioner,
such as $ouse (ule 36.3.
2n sum, as a member of petitioner, 5=- is indisputably bound by the &ondominiumPs $ouse (ules
#hich are authori)ed by the Ay-=a#s, the 1aster %eed and the &ondominium 5ct.
Award o) attorney;s )ees.
The a#ard of attorneyPs fees as damages is the exception rather than the rule. The general rule
is that attorneyPs fees cannot be recovered as part of damages because of the policy that no
premium should be placed on the right to litigate.
<"
&ounselPs fees are not a#arded every time a
party prevails in a suit.
<0
5n a#ard of attorneyPs fees and expenses of litigation is proper under
the instances provided for in 5rticle 33!0 of the &ivil &ode, one of #hich is #here the defendant
acted in gross and evident bad faith. 2n this case, ho#ever, #e 'nd no cogent reason to a#ard
attorneyPs fees in the absence of sho#ing of gross and evident bad faith on the part of 5=- in
refusing to satisfy petitionerPs claim.
7.ERE%ORE, the petition is @(59T8% and the assailed %ecision of the &ourt of 5ppeals is -8T
5-2%8. 5=- 1anagement H %evelopment &orporation is ordered to pay T#in To#ers
&ondominium &orporation all overdue assessments and dues, including interest and penalties
from date of default, as shall be determined by the proper (egional Trial &ourt in accordance #ith
this %ecision. The proper (egional Trial &ourt shall complete the computation #ithin sixty D6!E
days from its receipt of this %ecision and the records of -8&-5& 9os. ;"" and ;"0. &osts of suit
against 5=- 1anagement H %evelopment &orporation.
&O ORDERED.
G.R. No. 128,,8 (r;3 28, 2//5
$INING RE&UENA, ALE-ANDRA GARAY, LORNA RE&UENA, ELEU$ERIO RE&UENA,
EU$I>UIA RO&ARIO !" UNI&I(A RE&UENA, ,etitioner,
vs.
.ON. COUR$ O% APPEAL&, 11
23
DI#I&ION !" -UANI$O 'ORRO(EO, &R., (espondents.
D E C I & I O N
$INGA, J.?
This is a (ule <5 ,etition for (evie# on %ertiorari of the Becision
1
of the &ourt of 5ppeals
a.rming that of the (egional Trial &ourt D(T&E of &ebu,
3
#hich in turn reversed that of the
1etropolitan Trial &ourt DmtcE of Talisay, &ebu.
;
The facts are as follo#s7
,rivate respondent, the late /uanito Aorromeo, -r.
<
Dhereinafter, respondentE, is the co-o#ner and
overseer of certain parcels of land located in ,ooc, Talisay, &ebu, designated as =ots 9os. 350"
and 353 of the Talisay-1anglanilla 8state. (espondent o#ns six-eighths D6O0E of =ot 9o. 350"
#hile the late spouses 2nocencio Aascon and Aasilisa 1aneja D-pouses AasconE o#n t#o-eights
D3O0E thereof. On the other hand, =ot 9o. 353 is o#ned in common by respondent and the heirs
of one 9icolas 1aneja. $o#ever, the proportion of their undivided shares #as not
determined a Cuo.
,rior to the institution of the present action, petitioners Tining (esuena, 5lejandra @aray, =orna
(esuena, 8leuterio (esuena, and Gnisima (esuena resided in the upper portion of =ot 9o. 350",
allegedly under the acBuiescence of the -pouses Aascon and their heir, 5ndres Aascon. On the
other hand, petitioner 8utiBuia (osario occupied a portion of =ot 9o. 353, allegedly #ith the
permission of the heirs of 9icolas 1aneja, one of the original co-o#ners of =ot 9o. 350".
(espondent claims that all petitioners have occupied portions of the subject property by virtue of
his o#n liberality.
(espondent developed portions of =ots 9os. 350" and 353 occupied by him into a resort >no#n
as the Aorromeo Aeach (esort. 2n his desire to expand and extend the facilities of the resort that
he established on the subject properties, respondent demanded that petitioners vacate the
property. ,etitioners, ho#ever, refused to vacate their homes.
On 16 +ebruary 1<, respondent 'led a %omplaint
5
for ejectment #ith the 1T& against the
petitioners. 5fter a summary proceeding, the 1T&, in a Becision
6
dated 1! October 1<, found
that =ots 9os. 350" and 353 #ere o#ned in common by respondent #ith other persons. The
1T& ruled that respondent did not have a preferential right of possession over the portions
occupied by petitioners, since =ots 9os. 350" and 353 #ere not yet partitioned nor the disputed
portions assigned to respondent as his determinate share. Thus, the 1T& held that respondent
had no right to evict petitioners therefrom. &onseBuently, respondentPs %omplaint #as
dismissed.
9otably, the 1T& held that respondent and the spouses Aascon #ere the o#ners in common of
=ot 9o. 350" and their respective shares had not yet been determined by partition as proven by
a testimony given by respondent in &ivil &ase 9o. (-1<6!!, vi!7
U. 5nd the participation there of 2nocencio Aascon is 3O0 of the said parcel of landV
5. Kes sir.
U. 5nd until the present that parcel of land is undividedV
5. 2t is not yet partitioned, but during the time of Aasilisa 1aneja #e had already made
some indications of the portions that #e came to occupy.
U. That is the parcel of land #here you have your beach resortV
5. Kes, sir4 and that #as our agreement, verbally, that #ith respect to the portion of the
land to#ards the sea-shore it #ill be my share and that portion of the land to#ards the
upper part #ill be theirs.C
"
On appeal, the (T& reversed the Becision of the 1T&. 2t held that 5rticle <0" of the &ivil &ode,
#hich allo#s any one of the co-o#ners to bring an action in ejectment, may successfully be
invo>ed by the respondent because, in a sense, a co-o#ner is the o#ner and possessor of the
#hole, and that the suit for ejectment is deemed to be instituted for the bene't of all co-
o#ners.
0
The (T& also ruled that assuming petitioners #ere authori)ed to occupy a portion of the
co-o#ned property, they could resume this occupation #hen the properties shall have been
partitioned and allocated to the ones #ho gave them permission to reside therein. 2t thus held7
:$8(8+O(8, judgment of the lo#er court is hereby reversed and the defendants are
hereby directed to vacate the premises in Buestion #ithout prejudice to their going bac> to
the land after partition shall have been efected by the coheirs andOor co-o#ners among
themselves but to the speci'c portion or portions adjudicated to the person or persons
#ho allegedly authori)ed them to occupy their portions by tolerance.

The &ourt of 5ppeals a.rmed the Becision of the (T&4 hence, this petition #hich involves the
follo#ing assignment of errors7
1!
1. That #ith grave abuse of discretion, amounting to excess of jurisdiction, the honorable
eleventh division of the court of appeals erred in 9OT 5,,=K29@ andOor in 9OT %8&=5(29@
private respondent juanito borromeo estopped in 'ling this ejectment case against the
herein six D6E petitioners.
3. That #ith grave abuse of discretion, the honorable eleventh division of the court of
appeals erred in incorrectly applying the statute of frauds, considering that the verbal
agreement entered into by and bet#een spouses inocencio bascon and basilisa maneja on
the one hand and juanito borromeo on the other more than t#enty D3!E years ago today,
#as already an 8J8&GT8% &O9T(5&T.
;. That #ith grave abuse of discretion, amounting to excess of jurisdiction, the honorable
eleventh division of the court of appeals erred in ignoring outright article <; of the ne#
civil code of the philippines, considering that the six D6E petitioners are only 5--2@988-,
pure and simple, of co-o#ners spouses ignacio bascon and basilisa maneja andOor andres
bascon, the adopted son of the said spouses.
<. That granting arguendo that the herein six D6E petitioners have to be ejected, the
eleventh division of the court of appeals erred in 9OT remanding this case to the court of
origin for the reception of evidence for damages, pursuant to and in accordance #ith art.
5<6, ne# civil code.
The petition cannot prosper.
5t the outset it must be stated that petitioners ground their petition on respondentPs testimony in
&ivil &ase 9o. (-1<6!! that he had agreed #ith co-o#ner, Aasilisa 1aneja, on the portions they
each #ere to occupy in =ot 9o. 350" prior to the partition of the property. $o#ever, respondentPs
testimony and, conseBuently, the agreement alluded to therein pertains solely to =ot 9o. 350"W
#hich, admittedly, all of petitioners occupy, save for 8utiBuia (osario #ho occupies =ot 9o. 353.
9o argument #as presented in this petition as regards the latterPs claim. $aving no basis to
revie# 8utiBuia (osarioPs claim to be allo#ed to continue in her occupation of =ot 9o. 353, this
&ourt maintains the holding of the (T& on this matter, as a.rmed by the &ourt of 5ppeals, that
respondent has the right to eject petitioner 8utiBuia (osario from =ot 9o. 353.
:ith regard to the other 've D5E petitioners, the &ourt notes that their 'rst three assignments of
errors are interrelated and built on each other. ,etitioners allege that respondentPs testimony in
&ivil &ase 9o. (-1<6!!, expressing that the upper t#o-eighths D3O0E portion of =ot 9o. 350"
#ould be occupied by Aasilisa 1aneja, constituting as it does a #aiver of said portion, has
estopped respondent from claiming the portion. Aasilisa 1aneja and her husband allegedly relied
on this agreement #hen the spouses assigned the upper portion of =ot 9o. 350" to petitioners.
1oreover, petitioners claim that their occupation of the upper portion of =ot 9o. 350" had
consummated the verbal agreement bet#een respondent and Aasilisa 1aneja and brought
agreement beyond the purvie# of the -tatute of +rauds.
5 careful perusal of the foregoing issues reveals that petitioners assumed the follo#ing as proven
facts7 D1E respondent had indicated to Aasilisa 1aneja the portions they #ere to occupy in =ot 9o.
350"4 and D3E the -pouses Aascon assigned to petitioners their portions of =ot 9o. 350". Ay
claiming these as the bases for their assignment of errors, petitioners in essence are raising
Buestions of fact.
11
The issues raised by petitioners on the application of estoppel, statute of frauds, and the
assignment of properties o#ned in common in their favor, #hile ostensibly raising Buestions of
la#, invite this &ourt to rule on Buestions of fact. This runs counter to the settled rule that only
Buestions of la# may be raised in a petition for revie# before the &ourt and the same must be
distinctly set forth.
13
2t is not the function of this &ourt to #eigh ane# the evidence already passed upon by the &ourt
of 5ppeals for such evidence is deemed 'nal and conclusive and may not be revie#ed on appeal.
5 departure from the general rule may be #arranted, among others, #here the 'ndings of fact of
the &ourt of 5ppeals are contrary to the 'ndings and conclusions of the trial court, or #hen the
same is unsupported by the evidence on record.
1;
2n the instant case, the (T& and the &ourt of 5ppeals rendered judgment merely on Buestions of
la# as applied to the facts as determined by the 1T&. &onseBuently this &ourt must proceed on
the same set of facts #ithout assuming, as petitioners have done, the veracity of claims #hich
have been considered, but not accepted as facts, by the courts belo#.
@uided by the foregoing, this &ourt 'nds in this case that 'ltered of the muddle from petitionersP
assignment of errors, it is unmista>able that respondent has a right to eject the petitioners from
=ot 9o. 350".
5rticle <0" of the &ivil &ode, #hich provides simply that CQaRny one of the co-o#ners may bring
an action in ejectment,C is a categorical and an unBuali'ed authority in favor of respondent to
evict petitioners from the portions of =ot. 9o. 350".
This provision is a departure from Palarca v. Da$uisi,
1<
#hich held that an action for ejectment
must be brought by all the co-o#ners. Thus, a co-o#ner may bring an action to exercise and
protect the rights of all. :hen the action is brought by one co-o#ner for the bene't of all, a
favorable decision #ill bene't them4 but an adverse decision cannot prejudice their rights.
15
(espondentPs action for ejectment against petitioners is deemed to be instituted for the bene't
of all co-o#ners of the property
16
since petitioners #ere not able to prove that they are
authori)ed to occupy the same.
,etitionersP lac> of authority to occupy the properties, coupled #ith respondentPs right under
5rticle <0", clearly settles respondentPs prerogative to eject petitioners from =ot 9o. 350". Time
and again, this &ourt has ruled that persons #ho occupy the land of another at the latter?s
tolerance or permission, #ithout any contract bet#een them, are necessarily bound by an
implied promise that they #ill vacate the same upon demand, failing in #hich a summary action
for ejectment is the proper remedy against them.
1"
,etitioners pose the strange claim that respondent had estopped himself from 'ling an ejectment
case against petitioners by his aforeBuoted testimony in &ivil &ase 9o. (-1<6!!. -uch testimony
is irrelevant to the case at bar, as it does nothing to strengthen the claim of petitioners that they
had a right to occupy the properties. This testimony merely indicates that there might have been
an agreement bet#een the -pouses Aascon and Aorromeo as to #hich of them #ould occupy
#hat portion of =ot 9o. 350". Ket this averment hardly establishes a de'nitive partition, or
moreover, any right of petitioners to d#ell in any portion of =ot 9o. 350". Aesides, CQeRstoppel is
efective only as bet#een the parties thereto or their successors in interest4C thus, only the
spouses Aascon or their successors in interest may invo>e such Cestoppel.C 5 stranger to a
transaction is neither bound by, nor in a position to ta>e advantage of, an estoppel arising
therefrom.
10
+or the same reason, it is of no moment #hether indeed, as petitioners claim, there #as a verbal
contract bet#een Aasilisa 1aneja and Aorromeo #hen the latter indicated the portions they each
#ere to occupy in =ot 9o. 350". -uch verbal contract, assuming there #as one, does not detract
from the fact that the common o#nership over =ot 9o. 350" remained inchoate and undivided,
thus casting doubt and rendering purely speculative any claim that the -pouses Aascon
someho# had the capacity to assign or transmit determinate portions of the property to
petitioners.
Thus, in order that the petition may acBuire any #hif of merit, petitioners are obliged to
establish a legal basis for their continued occupancy of the properties. The mere tolerance of one
of the co-o#ners, assuming that there #as such, does not su.ce to establish such right.
Tolerance in itself does not bear any legal fruit, and it can easily be supplanted by a sudden
change of heart on the part of the o#ner. ,etitioners have not adduced any convincing evidence
that they have someho# become successors-in-interest of the -pouses Aascon, or any of the
o#ners of =ot 9o. 350".
2ndeed, there is no #riting presented to evidence any claim of o#nership or right to occupancy to
the subject properties. There is no lease contract that #ould vest on petitioners the right to stay
on the property. 5s discussed by the &ourt of 5ppeals,
1
5rticle 1;50 of the &ivil &ode provides
that acts #hich have for their object the creation, transmission, modi'cation or extinguishment
of real rights over immovable property must appear in a public instrument. $o# then can this
&ourt accept the claim of petitioners that they have a right to stay on the subject properties,
absent any document #hich indubitably establishes such rightV 5ssuming that there #as any
verbal agreement bet#een petitioners and any of the o#ners of the subject lots, 5rticle 1;50
grants a coercive po#er to the parties by #hich they can reciprocally compel the documentation
of the agreement.
3!
Thus, the appellate court correctly appreciated the absence of any document or any occupancy
right of petitioners as a negation of their claim that they #ere allo#ed by the -pouses Aascon to
construct their houses thereon and to stay thereon until further notice. On this note, this &ourt
#ill no longer belabor petitionersP allegation that their occupation of =ot 9o. 350" is justi'ed
pursuant to the alleged but unproven permission of the -pouses Aascon.
5ll six D6E petitioners claim the right to be reimbursed Cnecessary expensesC for the cost of
constructing their houses in accordance #ith 5rticle 5<6 of the &ivil &ode.
31
2t is #ell-settled that
#hile the 5rticle allo#s full reimbursement of useful improvements and retention of the premises
until reimbursement is made, applies only to a possessor in good faith, i.e., one #ho builds on
land #ith the belief that he is the o#ner thereof. *erily, persons #hose occupation of a realty is
by sheer tolerance of its o#ners are not possessors in good faith.
33
The lo#er courts have made a common factual 'nding that petitioners are occupying portions of
=ots 9o. 350" and 353 by mere tolerance. Thus, petitioners have no right to get reimbursed for
the expenses they incurred in erecting their houses thereon.
7.ERE%ORE, premises considered, the ,etition is %8928% and the Becision of the &ourt of
5ppeals 5++2(18%. &osts against petitioners.
&O ORDERED.
G.R. No. 148,66. (r;3 ,1, 2//5
LEONARDO ACA'AL !" RA(ON NICOLA&, ,etitioners,
vs.
#ILLANER ACA'AL, EDUARDO ACA'AL, &OLO(ON ACA'AL, GRACE ACA'AL, (EL'A
ACA'AL, E#ELYN ACA'AL, AR(IN ACA'AL, RA(IL ACA'AL, !" 'YRON
ACA'AL, (espondents.
% 8 & 2 - 2 O 9
CARPIO (ORALE&, ..7
Aefore this &ourt is a ,etition for (evie# on %ertiorari of the +ebruary 15, 3!!1 %ecision
1
of the
&ourt of 5ppeals reversing that of the (egional Trial &ourt D(T&E of %umaguete &ity, Aranch ;5.
3
2n dispute is the exact nature of the document
;
#hich respondent *illaner 5cabal D*illanerE
executed in favor of his godson-nephe#-petitioner =eonardo 5cabal D=eonardoE on 5pril 1, 1!.
*illanerPs parents, 5lejandro 5cabal and +elicidad Aalasabas, o#ned a parcel of land situated in
Aarrio Tanglad, 1anjuyod, 9egros Oriental, containing an area of 10.15 hectares more or less,
described in Tax %eclaration 9o. 15056.
<
Ay a %eed of 5bsolute -ale dated /uly 6, 1"1,
5
his
parents transferred for ,3,!!!.!! o#nership of the said land to him, #ho #as then married to
/ustiniana =ipajan.
6
-ometime after the foregoing transfer, it appears that *illaner became a #ido#er.
-ubseBuently, he executed on 5pril 1, 1! a deed
"
conveying the same property
0
in favor of
=eonardo.
*illaner #as later to claim that #hile the 5pril 1, 1! document he executed no# appears to
be a C%eed of 5bsolute -aleC purportedly #itnessed by a Aais &ity trial court cler> &armelo
&adalin and his #ife =acorte, #hat he signed #as a document captioned C=ease
&ontractC

Dmodeled after a /uly 1"6 lease agreement


1!
he had previously executed #ith
previous lessee, 1aria =uisa 1ontenegro
11
E #herein he leased for ; years the property to
=eonardo at ,1,!!!.!! per hectare
13
and #hich #as #itnessed by t#o #omen employees of one
/udge *illegas of Aais &ity.
*illaner thus 'led on October 11, 1; a complaint
1;
before the %umaguete (T& against
=eonardo and (amon 9icolas to #hom =eonardo in turn conveyed the property, for annulment of
the deeds of sale.
5t the #itness stand, *illaner declared7
U7 2t appears, 1r. 5cabal, that you have signed a document of sale #ith the defendant =eonardo
5cabal on 5pril 1, 1!, please tell the court #hether you have really agreed to sell this
property to the defendant on or before 5pril 1, 1!V
57 :e had some agreement but not about the selling of this property.
U7 :hat #as your agreement #ith the defendant =eonardo 5cabalV
57 Our agreement Q#asR that he #ill just rent.
1<
x x x
U7 9o#, please tell the court ho# #ere you able to sign this document on 5pril 1, 1!V
57 2 do not >no# #hy 2 signed that, that is #hy 2 am pu))led.
U7 735, "*" 5o0 !o2 re" 23e ;o!2e!21 o: 23*1 "o;0me!2@
57 I 3ve !o2 re" 232. I o!+5 3))e!e" 2o re" 23e 2*2+e o: 23e Le1e Co!2r;2.
U7 A!" "o 5o0 re;++ <3o <ere 23e <*2!e11e1 o: 23e "o;0me!2 <3*;3 5o0 1*A!e" *!
:vor o: Leo!r"o A;b+@
57 Em)+o5ee1 o: -0"Ae #*++eA1 o: '*1 C*25.
U7 D*" 5o0 1ee 23em 1*A! 232 "o;0me!2@
57 Ye1, 1*r.
U7 $3e1e 1*A!20re1 ))er*!A *! 23*1 "o;0me!2 mrBe" 1 EC3*b*2 DCD :or 23e )+*!2*E
!" EC3*b*2 D1D :or 23e "e:e!"!2, )+e1e eCm*!e over F1*;G 23e1e 1*A!20re1 *: 23e1e
<ere 23e 1*A!20re1 o: 23e1e <*2!e11e1 <3o 1*A!e" 23*1 "o;0me!2@
57 $3e1e re !o2 23e 1*A!20re1 o: 23e 2<o <ome!.
U7 5nd after signing this document on 5pril 1, 1!, did you appear before a notary public to
have this notari)edV
57 9o, 2 #ent home to -an &arlos.
15
x x x
U7 5ccording to this document, you sell DsicE this property at ,1!,!!!.!!, did you sell this
property to =eonardo 5cabalV
57 9o, sir.
U7 $o# about after 5pril 1, 1!, did you receive this amount from =eonardo 5cabalV
57 9o, sir.
16
x x x
U7 9o# you said that on 1ay 35, 1!, =eonardo 5cabal did not pay the amount that he
promised to you, #hat did you do of DsicE his refusal to pay that amountV
57 I <e!2 2o (r. HCrme+oI (e++*e C"+*! be;01e 3e <1 23e o!e <3o )re)re" 23e
))er1 !" 2o 1B Leo!r"o A;b+ <35 3e <*++ !o2 ;om)+5 <*23 o0r Areeme!2.
U7 '5 23e <5, <3o *1 23*1 (e++*e C"+*!@
57 (e++*e C"+*! *1 +1o <orB*!A *! 23e 1+ o: -0"Ae #*++eA1.
U7 :ho reBuested 1ellie &adalin to prepare this documentV
57 1aybe it #as =eonardo 5cabal.
U7 Ay the #ay, #hen for the 'rst time did you tal> to =eonardo 5cabal regarding your agreement
to lease this property to himV
57 1arch 1<, 1!, in -an &arlos.
U7 A!" <32 "o;0me!2 "*" 5o0 A*ve 2o 3*m *! or"er 232 232 "o;0me!2 <*++ be
)re)re"@
57 I 3ve A*ve! F1*;G 1ome ))er1 !" ;o!2r;2 o: +e1e 232 I 3ve 1*A!e" 2o F1*;G (r1.
(o!2e!eAro.
1"
D8mphasis and underscoring suppliedE
x x x
U7 9o#, &armelo &adalin QC1ellieCR also testi'ed before this court that in fact he identi'ed the
document mar>ed as 8xhibit C&C for the plaintif that #hat you executed on 5pril 1, 1! #as a
deed of sale and not a contract of lease, #hat can you say to that statementV
57 That is a lie.
U7 5nd #hatPs the truth thenV
57 :hat really DsicE 2 have signed #as the document of lease contract.
U7 No<, ;! 5o0 eC)+*! 2o 23e .o!orb+e Co0r2 <35 *2 1o 3))e!e" 232 o! A)r*+ 19,
5o0 <ere b+e 2o 1*A! "ee" o: 1+e@
57 732 I ;! 1ee !o< *1 232 )er3)1 23o1e ;o)*e1 o: 23e "ee" o: 1+e <ere )+;e" b5
(r. C"+*! 0!"er 23e "o;0me!21 <3*;3 I 1*A!e" 23e +e1e ;o!2r;2. Aut #hy is it that it
has already a deed of sale #hen #hat 2 have signed #as only the lease of contract or the
contract of lease.
U7 9o#, 1r. &adalin also stated before this court that he handed over to you this %eed of -ale
mar>ed as 8xhibit C&C and according to him you read this document, #hat can you say to this
statementV
57 Kes, there #as a document that he gave me to read it DsicEbut it #as a contract of lease.
U7 $o# sure are you that #hat you signed on 5pril 1, 1! #as really a contract of lease and
not a contract of saleV
57 'e;01e <3e! I 1*A!e" 23e ;o!2r;2 o: +e1e 23e <*2!e11e1 232 <*2!e11e" m5
1*A!*!A 23e "o;0me!2 <ere 23e em)+o5ee1 o: -0"Ae #*++eA1 !" 23e! I m !o<
10r)r*1e" <35 *! 23e "ee" o: 1+e <3*;3 I )0r)or2e"+5 1*A!e" re <*2!e11e" b5
Crme+o C"+*! !" 3*1 <*:e L;or2e.
10
D8mphasis and underscoring suppliedE
On the other hand, =eonardo asserts that #hat *illaner executed #as a %eed of 5bsolute -ale for
a consideration of ,1!,!!!.!! #hich he had already paid,
1
and as he had become the absolute
o#ner of the property, he validly transferred it to (amon 9icolas on 1ay 1, 1!.
3!
&armelo &adalin #ho admittedly prepared the deed of absolute sale and #ho appears as a
#itness, along #ith his #ife, to the execution of the document corroborated =eonardoPs claim7
U7 1r. &adalin, do you >no# the plaintif *illaner 5cabalV
57 Kes, 2 >no#.
31
x x x
U7 A!" I <o0+" +*Be 2o 1B 5o0 (r. <*2!e11 <35 "o 5o0 B!o< #*++!er A;b+@
57 A2 23e 2*me 232 3e <e!2 2o o0r 3o01e 2oAe23er <*23 Leo!r"o A;b+ 3e reJ0e12e"
me 2o )re)re "ee" o: 1+e 1 reAr"1 2o 1+e o: 23e )ro)er25.
33
x x x
U7 A!" :2er 23e5 reJ0e12e" 5o0 2o )re)re "o;0me!2 o: 1+e, <32 "*" 5o0 "o@
57 A2 Kr12 I re:01e" 2o H"oI *2 be;01e I 3ve 1o m!5 <orB1 2o "o, b02 23e! 23e5
*!1*12e" 1o I )re)re" 23e "ee".
U7 A:2er 5o0 )re)re" 23e "o;0me!2, <32 "*" 5o0 "o@
57 A:2er I )re)re" *2 I Ave *2 2o 3*m 1o 232 3e ;o0+" re" 23e 1me.
U7 73e! 5o0 15 D3*m,D <3om "o 5o0 re:er 2o@
57 #*++!er A;b+.
U7 A!" "*" #*++!er A;b+ re" 23e "o;0me!2 5o0 )re)re"@
57 Ye1, 3e re" *2.
U7 A!" :2er re"*!A *2 <32 "*" #*++!er A;b+ "o@
57 .e 1*A!e" 23e "o;0me!2.
U7 &3o<*!A 2o 5o0 "o;0me!2 <3*;3 *1 mrBe" EC3*b*2 C :or 23e )+*!2*E !" EC3*b*2 1
:or 23e "e:e!"!21, )+e1e 2e++ 23e .o!orb+e Co0r2 <32 re+2*o! 23*1 "o;0me!2 31
2o 23e "o;0me!2 <3*;3 5o0 "e1;r*be" er+*er@
&OG(T 29T8(,(8T8(7
7*2!e11 *1 ;o!:ro!2e" <*23 23e 1*" "o;0me!2 er+*er mrBe" 1 EC3*b*2 C :or 23e
)ro1e;02*o! !" EC3*b*2 1 :or 23e "e:e!1e.
57 Ye1, 23*1 *1 23e o!e.
3;
x x x
U7 A+1o 122e" *! 23e "o;0me!2 *1 23e )3r1e D&*A!e" *! 23e )re1e!;e o:D !" 23ere *1
!0mber !" 23e! 2<o 1*A!20re1, ;o0+" 5o0 )+e1e eCm*!e 23e "o;0me!2 !" 15
<3e23er 23e1e 1*A!20re1 re :m*+*r 2o 5o0@
57 Ye1, !0mber o!e *1 m5 1*A!20re !" !0mber 2 *1 23e 1*A!20re o: m5 <*:e 1
<*2!e11.
3<
x x x
U7 5fter *illaner 5cabal signed the document, #hat did *illaner 5cabal doV
57 $e #as given the payment by =eonardo 5cabal.
35
x x x
U7 5side from the document, deed of absolute sale, that you mentioned earlier that you prepared
for *illaner 5cabal and =eonardo 5cabal, #hat other documents, if any, did you prepare for themV
57 5.davit of non-tenancy and aggregate area.
36
D8mphasis and underscoring suppliedE
The complaint #as later amended
3"
to implead *illanerPs eight children as party plaintifs, they
being heirs of his deceased #ife.
Ay %ecision of 5ugust 0, 16, the trial court found for the therein defendants-herein petitioners
=eonardo and (amon 9icolas and accordingly dismissed the complaint.
*illaner et al. thereupon brought the case on appeal to the &ourt of 5ppeals #hich reversed the
trial court, it holding that the %eed of 5bsolute -ale executed by *illaner in favor of =eonardo
#as simulated and 'ctitious.C
30
$ence, =eonardo and (amon 9icolasP present petition for revie# on certiorari,
3
anchored on the
follo#ing assignments of error7
2.
T$8 &OG(T O+ 5,,85=- &O112TT8% 5 (8*8(-2A=8 8((O( :$89 2T (G=8% T$5T (8-,O9%89T
*2==598( 5&5A5= :5- %8&82*8% 29TO -2@929@ T$8 %88% O+ 5A-O=GT8 -5=8 :$89 T$8
=5TT8( I9O:29@=K, +(88=K 59% *O=G9T5(2=K 8J8&GT8% T$8 -518 29 +5*O( O+ ,8T2T2O98(
=8O95(%O 5&5A5=.
22.
T$8 &OG(T O+ 5,,85=- 8((8% :$89 2T (G=8% T$5T T$8 &O9-2%8(5T2O9 O+ T$8 %88% O+
5A-O=GT8 -5=8 29 T$8 51OG9T O+ T89 T$OG-59% ,8-O- D,1!,!!!!.!!E :5- CG9G-G5==K
=O: 59% 295%8UG5T8,C 8-,8&25==K T5I29@ 29TO 5&&OG9T T$8 =O&5T2O9 O+ T$8 -GA/8&T
,(O,8(TK.
222.
T$8 &OG(T O+ 5,,85=- 8((8% :$89 2T +52=8% TO &O9-2%8( :$K (8-,O9%89T *2==598(
5&5A5= O9=K UG8-T2O98% T$8 ,O--8--2O9 59% O:98(-$2, O+ ,8T2T2O98( (51O9 92&O=5-
29 &OG(T 5+T8( T$8 =5TT8( :5- 29 O,89, &O9T29GOG- 59% ,85&8+G= ,O--8--2O9 O+ T$8
-GA/8&T ,(O,8(TK +O( 5=1O-T T$(88 D;E K85(-.
2*.
T$8 &OG(T O+ 5,,85=- &O112TT8% 5 (8*8(-2A=8 8((O( 29 =5: :$89 2T +52=8% TO %8&=5(8
,8T2T2O98( (51O9 92&O=5- 5- 5 AGK8( 29 @OO% +52T$ 5- T$8 =5TT8( TOOI T$8 98&8--5(K
-T8,- 59 O(%295(K 59% ,(G%89T 159 :OG=% $5*8 T5I89 A8+O(8 AGK29@ T$8
UG8-T2O98% ,(O,8(TK.
*.
T$8 &OG(T O+ 5,,85=- 8((8% 29 (G=29@ 29 +5*O( O+ (8-,O9%89T *2==598( 5&5A5= :$89
T$8 =5TT8( %2% 9OT ,(8-89T 5 -29@=8 :2T98-- TO T8-T2+K O9 T$8 5==8@8% &O9T(5&T O+
=85-8 :$2&$ $8 5==8@8%=K -2@98% 59% :2T98--8% AK T$8 81,=OK88- O+ /G%@8 *2==8@5-.
*2.
T$8 &OG(T O+ 5,,85=- &O112TT8% 5 (8*8(-2A=8 8((O( 29 =5: :$89 2T (G=8% T$5T (G=8
0, -8&T2O9 0 O+ T$8 10" DsicE (G=8 DsicE O+ &2*2= ,(O&8%G(8 2- 9OT 5,,=2&5A=8 29 T$8 &5-8
5T A5(, &O9T(5(K TO T$8 (G=29@ O+ T$8 =O:8( &OG(T.
*22.
T$8 &OG(T O+ 5,,85=- 8((8% :$89 2T O(%8(8% ,8T2T2O98(- TO ,5K (8-,O9%89T- C/O29T=K
59% -8*8(5==K AK :5K O+ (89T5= T$8 -G1 O+ ,1!,!!!.!! ,8( K85( +(O1 1! G, TO T$8
T218 T$8K *5&5T8 T$8 ,(812-8-.C
;!
,rocedurally, petitioners contend that the &ourt of 5ppeals erred #hen it failed to apply -ection
0, (ule 0 of the (ules of &ourt, respondent *illaner having failed to deny under oath the
genuineness and due execution of the 5pril 1, 1! %eed of 5bsolute -ale.
,etitionersP contention does not persuade. The failure to deny the genuineness and due
execution of an actionable document does not preclude a party from arguing against it by
evidence of fraud, mista>e, compromise, payment, statute of limitations, estoppel, and #ant of
consideration.
;1
On the merits, this &ourt rules in petitionersP favor.
2t is a basic rule in evidence that the burden of proof lies on the party #ho ma>es the
allegations
;3
X ei incumbit probatio" Cui dicit" non Cui ne$atE cum per rerum naturam )actum
ne$antis probatio nulla sit.
;;
2f he claims a right granted by la#, he must prove it by competent
evidence, relying on the strength of his o#n evidence and not upon the #ea>ness of that of his
opponent.
1ore speci'cally, allegations of a defect in or lac> of valid consent to a contract by reason of
fraud or undue inFuence are never presumed but must be established not by mere
preponderance of evidence but by clear and convincing evidence.
;<
+or the circumstances
evidencing fraud and misrepresentation are as varied as the people #ho perpetrate it in each
case, assuming diferent shapes and forms and may be committed in as many diferent #ays.
;5
2n the case at bar, it #as incumbent on the plaintif-herein respondent *illaner to prove that he
#as deceived into executing the %eed of 5bsolute -ale. 8xcept for his bare allegation that the
transaction #as one of lease, he failed to adduce evidence in support thereof. $is conjecture that
Cperhaps those copies of the deed of sale #ere placed by 1r. &adalin under the documents #hich
2 signed the contract of lease,C
;6
must fail, for facts not conjectures decide cases.
5ttempting to see> corroboration of his account, *illaner presented 5tty. *icente (eal #ho
notari)ed the document. :hile on direct examination, 5tty. (eal virtually corroborated *illanerPs
claim that he did not bring the document to him for notari)ation,
;"
on cross-examination, 5tty.
(eal conceded that it #as impossible to remember every person #ho #ould as> him to notari)e
documents7
U7 A!" *! 23e ;o0r1e o: 5o0r !o2r*L2*o!, ;! 5o0 remember e;3 !" ever5 :;e 232
;ome FsicG 2o 5o0 :or !o2r*L2*o!@
57 No, *2 *1 *m)o11*b+e.
U7 I! 23e ;1e o: #*++!er A;b+ <3*;3 5o0 3ve 3*1 "o;0me!2 !o2r*Le" F1*;G *!
199/, ;! 5o0 remember 3*1 :;e <3e! 3e ;me 2o 5o0@
57 No.
U7 A!" ;! 5o0 +1o 15, *: )er1o! <3o ;me 2o 5o0 3v*!A "o;0me!2 2o be
!o2r*Le" !" *: 3e <*++ ))er A*! :2er mo!23, ;! 5o0 remember <3e23er 3e
<1 23e o!e <3o ;me 2o 5o0@
57 No2 1o m0;3 be;01e ever5"5 23ere re m!5 )eo)+e <3o ))er <*23 "o;0me!21
2o be !o2r*Le",
U7 &o, *2 *1 1:e 2o 15 232 *: #*++!er A;b+ ;me 2o 5o0 o! A)r*+ 25 or r23er A)r*+
16, 199/ !"3ve F1*;G 3*1 "o;0me!2 !o2r*Le" *: 3e ;ome1 b;B *!, 15 (5 25, ;!
5o0 12*++ remember *: 3e <1 23e o!e <3o ;me 2o 5o0@
57 I ;!!o2 be 10re b02 2 +e12, 23ere re 2*me1 I ;! remember )er1o!1 be;01e 3e
1eem1 2o be ;+o1e 2o me +re"5.
U7 2s this *illaner close to youV
57 Aecause he has been freBuenting the houseOas>ing for a copy of the document.
U7 &o, 3e be;me ;+o1e 2o 5o0 :2er 5o0 !o2r*Le" 23e "o;0me!2@
57 Ye1.
;0
D8mphasis and underscoring suppliedE
On *illanerPs claim that t#o #omen employees of /udge *illegas signed as #itnesses to the
deed
;
but that the signatures appearing thereon are not those of said #itnesses,
<!
the same
must be discredited in light of his unexplained failure to present such alleged #omen employee-
#itnesses.
2n another vein, *illaner )eroes in on the purchase price of the property W ,1!,!!!.!! W #hich
to him #as unusually lo# if the transaction #ere one of sale. To substantiate his claim, *illaner
presented Tax %eclarations covering the property for the years
1"1,
<1
1"<,
<3
1"",
<;
10!,
<<
10;,
<5
105,
<6
as #ell as a %eclaration of (eal ,roperty executed
in 1<.
<"
2t bears noting, ho#ever, that *illaner failed to present evidence on the fair mar>et value of the
property as of 5pril 1, 1!, the date of execution of the disputed deed. 5bsent any evidence of
the fair mar>et value of a land as of the time of its sale, it cannot be concluded that the price at
#hich it #as sold #as inadeBuate.
<0
2nadeBuacy of price must be proven because mere
speculation or conjecture has no place in our judicial system.
<
*ictor (agay, #ho #as appointed by the trial court to conduct an ocular inspection
5!
of the
property and to investigate matters relative to the case,
51
gave an instructive report dated
%ecember ;, 1<,
53
the pertinent portions of #hich are hereby reproduced verbatim7
aE Only three D;E to four D<E hectares of the eighteen D10E #ere planted to sugar cane, the rest
#as never cultivated4
bE the soil is reddish and some#hat sandy in composition4
cE the soil contains so much limestones Droc>s consisting mainly of calcium carbonateE4
dE no part of the land in Buestion is plain or Fat, contrary to claim of the plaintif that almost 1!
hectares of the land in Buestion is plain or Fat4
eE some areas, east#ard of and adjacent of the land in Buestion Dmista>enly to be o#ned by the
defendant 9icolasE #ere planted to sugar cane by the o#ners X Iadusales4
fE the road going to the land in Buestion Das claimed to be the roadE is no longer passable
because it has been abandoned and not maintained by anyone, thus it ma>es everything
impossible for anybody to get and haul the sugar cane from the area4
gE the &ommissioner has discovered some stoc>piles of abandoned harvested sugar canes left to
rot, along the side of the road, undelivered to the milling site because of the di.culty in bringing
up truc>s to the scene of the harvest4
hE the sugarcanes presently planted on the land in Buestion at the time of the ocular inspection
#ere three D;E feet in height and their structural built #as thin or lean4
iE 1ost of the part of the 10 hectares is not planted or cultivated because the same is too roc>y
and not suitable for planting to sugarcane.
5;
5dditionally, (agay reported that one 5natolio &abusog recently purchased a 6-hectare property
adjoining that of the subject property for only ,1,6!!.!!
5<
or ,366.6" per hectare. @iven that,
had the 10-hectare subject property been sold at about the same time, it #ould have fetched the
amount of ,<,0!!.!!,
55
hence, the ,1!,!!!.!! purchase price appearing in the Buestioned 5pril
1, 1! document is more than reasonable.
8ven, ho#ever, on the assumption that the price of ,1!,!!!.!! #as belo# the fair mar>et value
of the property in 1!, mere inadeBuacy of the price per se #ill not rule out the transaction as
one of sale. +or the price must beAro11+5 inadeBuate or shoc>ing to the conscience such that
the mind revolts at it and such that a reasonable man #ould neither directly nor indirectly be
li>ely to consent to it.
56
-till in another vein, *illaner submits that =eonardoPs transfer of the property to 9icolas in a span
of one month for a pro't of ,;!,!!!.!! conclusively reFects =eonardoPs fraudulent intent. This
submission is a non seCuitur.
5s for *illanerPs argument that the sale of the property to =eonardo and the subseBuent sale
thereof to 9icolas are void for being violative of the retention limits imposed by (epublic 5ct 9o.
665", other#ise >no#n as the &omprehensive 5grarian (eform =a#, the same fails. The
pertinent provisions of said la# read7
-8&T2O9 6. 2etention Limits. X 8xcept as other#ise provided in this 5ct, no person may retain,
directly or indirectly, any public or agricultural land, the si)e of #hich may vary according to
factors governing a viable family-si)ed farm, such as commodity produced, terrain,
infrastructure, and soil fertility as determined by the ,residential 5grarian (eform &ouncil D,5(&E
created hereunder, b02 *! !o ;1e 13++ re2e!2*o! b5 23e +!"o<!er eC;ee" Kve F5G
3e;2re1. Three D;E hectares may be a#arded to each child of the lando#ner, subject to the
follo#ing Buali'cations7 D1E that he is at least 'fteen D15E years of age4 and D3E that he is tilling
the land or directly managing the farm7 Provided, That lando#ners #hose lands have been
covered by ,residential %ecree 9o. 3" shall be allo#ed to >eep the areas originally retained by
them thereunder7
5"
,rovided further, That original homestead grantees or direct compulsory heirs
#ho still o#n the original homestead at the time of the approval of this 5ct shall retain the same
areas as long as they continue to cultivate said homestead.
x x x
U)o! 23e eEe;2*v*25 o: 23*1 A;2, !5 1+e, "*1)o1*2*o!, +e1e, m!Aeme!2, ;o!2r;2 or
2r!1:er o: )o11e11*o! o: )r*v2e +!"1 eCe;02e" b5 23e or*A*!+ +!"o<!er *! v*o+2*o!
o: 23*1 A;2 13++ be !0++ !" vo*"? Provided, however, that those executed prior to this 5ct
shall be valid only #hen registered #ith the (egister of %eeds #ithin a period of three D;E months
after the efectivity of this 5ct. Thereafter, all (egisters of %eeds shall inform the %5( #ithin
thirty D;!E days of any transaction involving agricultural lands in excess of 've D5E hectares.
x x x
-8&T2O9 "!. Bisposition o) Private A$ricultural Lands. X The sale or disposition of agricultural
lands retained by a land o#ner as a conseBuence of -ection 6 hereof shall be valid as long as the
total landholdings that shall be o#ned by the transferee thereof inclusive of the land to be
acBuired shall not exceed the landholding ceilings provided for in this 5ct.
A!5 1+e or "*1)o1*2*o! o: Ar*;0+20r+ +!"1 :2er 23e eEe;2*v*25 o: 23*1 A;2 :o0!" 2o be
;o!2rr5 2o 23e )rov*1*o!1 3ereo: 13++ be !0++ !" vo*".
Transferees of agricultural lands shall furnish the appropriate (egister of %eeds and the A5(& an
a.davit attesting that his total landholdings as a result of the said acBuisition do not exceed the
landholding ceiling. The (egister of %eeds shall not register the transfer of any agricultural land
#ithout the submission of his s#orn statement together #ith proof of service of a copy thereof to
the A5(&. D8mphasis and underscoring suppliedE
5s the above-Buoted provisions of the &omprehensive 5grarian (eform =a# sho#, only those
private lands devoted to or suitable for agriculture are covered by it.
50
5s priorly related, *ictor
(agay, #ho #as appointed by the trial court to conduct an ocular inspection of the property,
observed in his report that only three D;E to four D<E hectares #ere planted #ith sugarcane #hile
the rest of the property #as not suitable for planting as the soil #as full of limestone.
5
$e also
remar>ed that the sugarcanes #ere only ; feet in height and very lean,
6!
#hereas sugarcanes
usually gro# to a height of ; to 6 meters Dabout 0 to 3! feetE and have stems 3 to 5 centimeters
D1-3 inchesE thic>.
61
2t is thus gathered that the property #as not suitable for agricultural purposes. 2n any event,
since the area devoted to the planting of sugarcane, hence, suitable for agricultural purposes,
comprises only < hectares at the most, it is less than the maximum retention limit prescribed by
la#. There #as then no violation of the &omprehensive 5grarian (eform =a#.
8ven assuming that the disposition of the property by *illaner #as contrary to la#, he #ould still
have no remedy under the la# as he and =eonardo #ere in pari delicto, hence, he is not entitled
to a'rmative relief X one #ho see>s eBuity and justice must come to court #ith clean hands. :n
pari delicto potior est conditio de)endentis.
63
$3e )ro)o1*2*o! *1 0!*ver1+ 232 !o ;2*o! r*1e1, *! eJ0*25 or 2 +<, :rom ! *++eA+
;o!2r;2= !o 10*2 ;! be m*!2*!e" :or *21 1)e;*K; )er:orm!;e, or 2o re;over 23e
)ro)er25 Aree" 2o be 1o+" or "e+*vere", or 23e mo!e5 Aree" 2o be )*", or "mAe1
:or *21 v*o+2*o!. The rule has sometimes been laid do#n as though it #ere eBually universal,
that #here the parties are in pari delicto, no a.rmative relief of any >ind #ill be given to one
against the other.
6;
D8mphasis and underscoring suppliedE
The principle of pari delicto is grounded on t#o premises7 'rst, that courts should not lend their
good o.ces to mediating disputes among #rongdoers4
6<
and second, that denying judicial relief
to an admitted #rongdoer is an efective means of deterring illegality.
65
This doctrine of ancient
vintage is not a principle of justice but one of policy as articulated in 1""5 by =ord 1ans'eld
in =olman v. .ohnson7
66
The objection, that a contract is immoral or illegal as bet#een the plaintif and defendant, sounds
at all times very ill in the mouth of the defendant. 2t is not for his sa>e, ho#ever, that the
objection is ever allo#ed4 but it is founded in general principles of policy, #hich the defendant
has the advantage of, contrary to the real justice, as bet#een him and the plaintif, by accident,
if 2 may so say. The principle of public policy is this4 ex dolo malo non oritur actio.
6"
9o court #ill
lend its aid to a man #ho founds his cause of action upon an immoral or an illegal act. 2f, from
the plaintifPs o#n stating or other#ise, the cause of action appears to arise ex turpi causa,
60
or
the transgression of a positive la# of this country, there the court says he has no right to be
assisted. 2t is upon that ground the court goes4 not for the sa>e of the defendant, but because
they #ill not lend their aid to such a plaintif. -o if the plaintif and the defendant #ere to change
sides, and the defendant #as to bring his action against the plaintif, the latter #ould then have
the advantage of it4 for #here both are eBually in fault potior est conditio de)endentis.
6
Thus, to serve as both a sanction and as a deterrent, the la# #ill not aid either party to an illegal
agreement and #ill leave them #here it 'nds them.
The principle of pari delicto, ho#ever, is not absolute, admitting an exception under 5rticle 1<16
of the &ivil &ode.
5(T. 1<16. :hen the agreement is not illegal per se but is merely prohibited, and the prohibition
by the la# is designed for the protection of the plaintif, he may, if public policy is thereby
enhanced, recover #hat he has paid or delivered.
Gnder this article, recovery for #hat has been paid or delivered pursuant to an inexistent
contract is allo#ed only #hen the follo#ing reBuisites are met7 D1E the contract is not illegal per
se but merely prohibited4 D3E the prohibition is for the protection of the plaintifs4 and D;E if public
policy is enhanced thereby.
"!
The exception is unavailing in the instant case, ho#ever, since the
prohibition is clearly not for the protection of the plaintif-lando#ner but for the bene'ciary
farmers.
"1
2n 'ne, *illaner is estopped from assailing and annulling his o#n deliberate acts.
"3
1ore. *illaner cannot feign ignorance of the la#, nor claim that he acted in good faith, let alone
assert that he is less guilty than =eonardo. Gnder 5rticle ; of the &ivil &ode, Cignorance of the
la# excuses no one from compliance there#ith.C
5nd no#, *illanerPs co-heirsP claim that as co-o#ners of the property, the %eed of 5bsolute -ale
executed by *illaner in favor of =eonardo does not bind them as they did not consent to such an
underta>ing. There is no Buestion that the property is conjugal. 5rticle 16! of the &ivil
&ode
";
provides7
5(T. 16!. 5ll property of the marriage is presumed to belong to the conjugal partnership, unless
it be proved that it pertains exclusively to the husband or to the #ife.
"<
The presumption, this &ourt has held, applies to all properties acBuired during marriage. +or the
presumption to be invo>ed, therefore, the property must be sho#n to have been acBuired during
the marriage.
"5
2n the case at bar, the property #as acBuired on /uly 6, 1"1 during *illanerPs marriage #ith
/ustiniana =ipajan. 2t cannot be seriously contended that simply because the tax declarations
covering the property #as solely in the name of *illaner it is his personal and exclusive property.
2n Ducoy v. Paulino
"6
and 'endo!a v. 2eyes
""
#hich both apply by analogy, this &ourt held that
registration alone of the properties in the name of the husband does not destroy the conjugal
nature of the properties.
"0
:hat is material is the time #hen the land #as acBuired by *illaner,
and that #as during the la#ful existence of his marriage to /ustiniana.
-ince the property #as acBuired during the existence of the marriage of *illaner and /ustiniana,
the presumption under 5rticle 16! of the &ivil &ode is that it is the couplePs conjugal property.
The burden is on petitioners then to prove that it is not. This they failed to do.
The property being conjugal, upon the death of /ustiniana =ipajan, the conjugal partnership #as
terminated.
"
:ith the dissolution of the conjugal partnership, *illanerPs interest in the conjugal
partnership became actual and vested #ith respect to an undivided one-half
portion.
0!
/ustiniana?s rights to the other half, in turn, vested upon her death to her
heirs
01
including *illaner #ho is entitled to the same share as that of each of their eight
legitimate children.
03
5s a result then of the death of /ustiniana, a regime of co-o#nership arose
bet#een *illaner and his co-heirs in relation to the property.
0;
:ith respect to /ustinianaPs one-half share in the conjugal partnership #hich her heirs inherited,
applying the provisions on the la# of succession, her eight children and *illaner each receives
one-ninth D1OE thereof. $aving inherited one-ninth D1OE of his #ifePs share in the conjugal
partnership or one eighteenth D1O10E
0<
of the entire conjugal partnership and is himself already
the o#ner of one half D1O3E or nine-eighteenths DO10E, *illanerPs total interest amounts to ten-
eighteenths D1!O10E or 've-ninths D5OE.
:hile *illaner o#ns 've-ninths D5OE of the disputed property, he could not claim title to any
de'nite portion of the community property until its actual partition by agreement or judicial
decree. ,rior to partition, all that he has is an ideal or abstract Buota or proportionate share in
the property.
05
*illaner, ho#ever, as a co-o#ner of the property has the right to sell his undivided
share thereof. The &ivil &ode provides so7
5(T. <;. 8ach co-o#ner shall have the full o#nership of his part and of the fruits and bene'ts
pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute
another person in its enjoyment, except #hen personal rights are involved. Aut the efect of the
alienation or the mortgage, #ith respect to the co-o#ners, shall be limited to the portion #hich
may be allotted to him in the division upon the termination of the co-o#nership.
Thus, every co-o#ner has absolute o#nership of his undivided interest in the co-o#ned property
and is free to alienate, assign or mortgage his interest except as to purely personal rights. :hile
a co-o#ner has the right to freely sell and dispose of his undivided interest, nevertheless, as a
co-o#ner, he cannot alienate the shares of his other co-o#ners X nemo dat Cui non habet.
06
*illaner, ho#ever, sold the entire property #ithout obtaining the consent of the other co-o#ners.
+ollo#ing the #ell-established principle that the binding force of a contract must be recogni)ed
as far as it is legally possible to do so X Cuando res non valet ut a$o" valeat Cuantum valere
potest
0"
X the disposition afects only *illanerPs share pro indiviso, and the transferee gets only
#hat corresponds to his grantorPs share in the partition of the property o#ned in common.
00
5s early as 13;, this &ourt has ruled that even if a co-o#ner sells the #hole property as his, the
sale #ill afect only his o#n share but not those of the other co-o#ners #ho did not consent to
the sale. This is because under the aforementioned codal provision, the sale or other disposition
afects only his undivided share and the transferee gets only #hat #ould correspond to this
grantor in the partition of the thing o#ned in common. &onseBuently, by virtue of the sales made
by (osalia and @audencio Aailon #hich are valid #ith respect to their proportionate shares, and
the subseBuent transfers #hich culminated in the sale to private respondent &elestino 5fable,
the said 5fable thereby became a co-o#ner of the disputed parcel of land as correctly held by the
lo#er court since the sales produced the efect of substitutin$ the buyers in the enjoyment
thereof.
+rom the foregoing, it may be deduced that since a co-o#ner is entitled to sell his undivided
share, a sale of the entire property by one co-o#ner #ithout the consent of the other co-o#ners
is not null and void. $o#ever, only the rights of the co-o#ner-seller are transferred., thereby
ma>ing the buyer a co-o#ner of the property.
The proper action in cases li-e this is not )or the nullifcation o) the sale or the recovery o)
possession o) the thin$ owned in common )rom the third person who substituted the co+owner or
co+owners who alienated their shares" but the B:<:&:AN o) the common property as i) it
continued to remain in the possession o) the co+owners who possessed and administered it.
0
Thus, it is no# settled that the appropriate recourse of co-o#ners in cases #here their consent
#ere not secured in a sale of the entire property as #ell as in a sale merely of the undivided
shares of some of the co-o#ners is an action for ,5(T2T2O9 under (ule 6 of the (evised (ules of
&ourt. 9either recovery of possession nor restitution can be granted since the defendant buyers
are legitimate proprietors and possessors in joint o#nership of the common property
claimed.
!
D2talics in the original4 citations omitted4 underscoring suppliedE
This &ourt is not unmindful of its ruling in %ru! v. Leis
1
#here it held7
2t is conceded that, as a rule, a co-o#ner such as @ertrudes could only dispose of her share in the
property o#ned in common. 5rticle <; of the &ivil &ode provides7
x x x
Gnfortunately for private respondents, ho#ever, the property #as registered in T&T 9o. <;1!!
solely in the name of C@ertrudes 2sidro, #ido#.C :here a parcel of land, forming part of the
undistributed properties of the dissolved conjugal partnership of gains, is sold by a #ido# to a
purchaser #ho merely relied on the face of the certi'cate of title thereto, issued solely in the
name of the #ido#, the purchaser acBuires a valid title to the land even as against the heirs of
the deceased spouse. The rationale for this rule is that Ca person dealing #ith registered land is
not reBuired to go behind the register to determine the condition of the property. $e is only
charged #ith notice of the burdens on the property #hich are noted on the face of the register or
the certi'cate of title. To reBuire him to do more is to defeat one of the primary objects of the
Torrens system.C
3
D&itation omittedE
%ru!, ho#ever, is not applicable for the simple reason that in the case at bar the property in
dispute is unregistered. The issue of good faith or bad faith of a buyer is relevant only #here the
subject of the sale is a registered land but not #here the property is an unregistered land.
;
One
#ho purchases an unregistered land does so at his peril.
<
9icolasP claim of having bought the
land in good faith is thus irrelevant.
5
7.ERE%ORE, the petition is @(59T8%. The &ourt of 5ppeals +ebruary 15, 3!!1 %ecision in &5-
@.(. &* 9o. 561<0 is (8*8(-8% and -8T 5-2%8 and another is rendered declaring the sale in
favor of petitioner =eonardo 5cabal and the subseBuent sale in favor of petitioner (amon 9icolas
valid but only insofar as 've-ninths D5OE of the subject property is concerned.
9o pronouncement as to costs.
-O O(%8(8%.
GR No. L-46996 (5 9, 1941
ENGRACIA LA#ADIA AND O$.ER&, )+*!2*E1 !" ))e++ee1,
v1.
CO&(E DE RO&ARIO (ENDOZA AND O$.ER&, "e:e!"!21 !" ))e++!21.
DIAZ, J.:
-ubject of litigation bet#een the plaintifs and the defendants in the &ourt of +irst 2nstance of
=aguna, #ere the possession and custody of certain je#elry that about six pious ladies of the
municipality of ,agsanjan, =aguna, called 1artina, 1atea, 2sabel, ,aula, ,ia and 8ngracia all
surnamed =avadia, had sent confeccionaren 100! #ith o#n money to decorate #ith them
adornor and the imagende Our =ady of @uadalupe, patroness of the said to#n, retaining them for
if property not yielding the same but only use the aforementioned ,icture, for such purpose.The
plaintifs and the defendants, except for 8ngracia =avadia #as one of six, are descendants of the
other 've primitive masters of the vessels in Buestion. Aecause the defendant (osario &osme
1endo)a is one of the descendants of ,aula =avadia, #hich lately had custody of those, 2 #ould
sign over the cro#n constituted part thereof, the Aishop &atholic of =ipa, to have it in their po#er
but subject to the use of the image of Our =ady of @uadalupe, according to the #ill of their
o#ners, the descendants of the three, D2sabel =avadia, 1atea =avadia and 1artina =avadiaE,
8ngracia =avadia #ho are the plaintifs, promoted this cause in the &ourt of their origin, to claim
the possession and custody of all the said je#elry. These are none other than those described in
paragraph ; of the application.
The &ourt decided the case against the defendants, declaring that the plaintifs still o#n four-
sixths of the je#els undivided object Buestion, and respondents, only t#o sixths, had a perfect
right to those #ho ought determiar handle your custody4 and that having them decided to
entrust this is =avadia 8ngracia, one of the early o#ners, 2 order that the defendant do (osario
&osme 1endo)a delivery to all such applicant. 5gainst this decision of the court, 'led appeal the
defendants, believing that the court erro D1E in 'nding that the appellant (osario &osme de
1endo)a, and anticesores in the possession of the said je#els, did not act but only as trustees,
and not trust 4 D3E in 'nding that the appellees are o#ners four sixths of those, and it belongs to
them by reason that exercising the right to designate the person to #hom to entrust
sucustodia4 D;E by failing to declare the appellant (osario &osme 1endo)a, being condueLa and
trust such je#elry can not be deprived of his administration and custody for reasons other than
disabling him for it, #hich are running acts contrary to the #ill of their original o#ners, and
dispose of the said je#els at #ill4 D<E to stop claiming that ,ia =avadia and their descendants up
to (osario &osme de 1endo)a, #ho had had the custody and possession of the said je#els, have
faithfully performed their duties4and 'nally D5E to deny you your reBuest for a ne# hearing.
To get a complete picture of the facts, expongamoslos $ere, follo#ing the story of the same
court a Cuo made the decision on his appeal, as discussed or not the appellants nor the
appellees7
The object of the causes are the je#els of the image of the *irgin of Our =ady of
@uadalupe, in the to#n of ,agsanjan, =aguna, and consist of a golden cro#n encrusted
#ith diamonds and bright, a nec>lace of diamonds and bright, also a belt embedded #ith
spar>ling diamonds and a gold nec>lace also completely encrusted #ith brilliant, a gold
bracelet encrusted #ith brilliant diamonds in a gilded silver plate #here the je#els are
placed above, and other pieces of gold or *airas silver gold for the decoration of the
costumes of the image of Our =ady of @uadalupe. 5ll these gems are currently loc>ed
deposited in the Aan> of the ,hilippine 2slands because there the defendant had deposited
(osario &osme 1endo)a.
The cro#n and je#els described above #ere made in the 100!s at the expense of six
residents of the municipality of ,agsanjan ladies, =aguna. They #ere sisters and ,ia ,aula
=avadia =avadia, sisters 1artina and 1atea =avadia =avadia and sisters 2sabel and
8ngracia =avadia =avadia. These ladies je#elry that they had contributed to the &onfecion
cro#n and je#els ellasse concocted described above, also contributing money to the
&onfecion is costing them. 5ll these ladies and have died, except for the applicant, #ido#
%oLa 8ngracia =avadia. +ernande). The other plaintifs are the legal heirs of 2sabel
=avadia, 1atea =avadia and 1artina =avadia #hile the defendant (osario &osme de
1endo)a and his co-defendants are legitimate heirs and descendants of ,aula =avadia.
The cro#n je#els #ere sent to ma>e use of the titular patron ,agasanjan To#nship,
9tra.-ra. @uadalupe.:hen he had 'nished and ma>e her duenas agreed that these je#els
#ould be left #ith the taxpayer =avadia ,ia. This had such gems custody until his death in
1003, #hen his sister ,aula =avadia happened to him in the custody of the same. On the
death of paula =avadia of happened in the care, custody and preservation of these je#els
sumarido ,edro (osales, and died this, her daughter ,a) (osales turn it happened in
&ustody, preservation and care. 5 (osales ,a)?s death, the cro#n je#els passed to the
custody of her husband Aaldomero &osme. 5fter Aaldomero &osme, these je#els became
1anuel -oriano, #ho in turn #as succeeded in the custody, preservation and management
by the defendant here &osme 1endo)a (osario. 8very year since 100! to date, the je#els
in Buestion #ere used to decorate the image of Our =ady of @uadalupe in ,agsanjan, and
none of those #ho have been >eeping or guarding possess these je#els had intended as
the exclusive o#ner. The defendant (osario &osme de 1endo)a and his co-defendants do
not claim to be o#ners of the said je#elry. 2ndeed, in the intestacy of the deceased
Aaldomero &osme, -pecial -tarring 9o. 5<< of this &ourt of +irst 2nstance, said defendant
and his co-defendants have indicated to the &ourt that they have never had pretensions to
claim the domain of those je#els or any part of the same. F&ee exhibits about by A-3 A-;.E
On +ebruary , 1;0, the defendant (osario &osme de 1endo)a, in his capacity as
administrator of the deceased intestate Aaldomero &osme, notify all persons interested in
such gems 2 #anted to do formal delivery of such je#elry =ina Aishop of the day follo#ing
-aturday, that is, the +ebruary 13, 1;0, informing them that they might #itness the act of
delivery F&ee 8xhibito <E. 2ndeed, the +ebruary 13, 1;0, the defendant and her husband
made formal delivery of the je#els, giving the efect for that document, document that
:2== submit as 8xhibit 8 of the plaintifs and defendants 3. 9ot the applicants comply #ith
such delivery, about six people and the applicants in this case gave a document
designating the applicant as recamadora =avadia 8ngracia, #ho #ould have their care and
the cro#n je#els in Buestion F&ee 8xhibito ;E being. $aving raised the Buestion of #ho
should have custody cro#n and je#els in Buestion, and having reached this fact >no#n to
the Aishop of =ipa, this, in turn, on /une 31, 1;0, granted a renunciandola #rite custody
and administration of these cro#n je#els Fsee % 8xhibito plaintifs and defendants 1E.
Aeing based on the facts, the &ourt stated that the contract existed bet#een the early masters
of the vessels at issue and the 'rst of them #ho had the custody of them, #as the deposit,
according 'nido remainder of this contract in 5rticles 1"50 and follo#ing of the &ivil &ode. ,ia
=avadia 'rst, and then ,aula =avadia and the descendants of the latter being one of them the
appellant (osario &osme 1endo)a, received and possessed, one after the other, the said, only
for purposes of custody4 for, as the &ourt emphasi)es in his decision, nor the last nor those used
the same for his o#n bene't. 2f it #as under a deposit agreement as received je#els subject
matter, 'rst by ,ia and ,aula, and then by the descendants of the last including the appellant
(osario &osme 1endo)a, it is clear that there is an obligation to share this to return them to their
o#ners as soon as the claim.The article also features 1"66 of the &ivil &ode #hich states7
The depositary is obliged to >eep the thing and restuirla #hen he is reBuested, the
depositor or his successors cause, or a person #ho has been designated in the
contract. $is responsibility for the care and the loss of the thing, shall be governed by the
provisions of tit. 2 of this boo>.
The refund must be made #ith all the fruits and accessions of the thing deposited, if any, not to
be given to the depositary #ithhold, as commented -anche) (oman, D2* -anche) (oman, 005E,
even under the prexto to obtain compensation for other credits or compensated for expenses
incurred for preservation.
The primitavas o#ners of the vessels in Buestion, agreed to entrust the custody of the same to
algunasde them, reserving for himself experesamente property. This goes to sho# that the
theory of the appellants that the contract had not those that deposit after all, as they say, can
not be considered as the je#els belonging to other persons #ith respect to (osario &osme
1endo)a because she descends one of o#ners susprimitivas has no force, because even among
commoners of one thing, one of them can be depositary, and #hen it is, is subject to the same
obligations imposed by la# on all depository #ith respect to the conservation of thing #ith the
care, diligence and interest of a good father.
.oint owner. The fact That the depositary is a joint o#ner of the res does not alter the
degree of diligence reBuired of him. D&/ 10, 5"!E.
The appellees are descendants and legal heirs of 2sabel =avadia, 1atea =avadia =avadia and
1artina4 =avadia and 8ngracia, #ho #as appointed to ta>e over par custody of the je#els subject
matter is one of the early o#ners of the same4 and the appellants are themselves the
descendants and heirs of ,ia =avadia and ,aula=avadia. 9o record any#here due
primitivasdueLas not contibuyeron six in the ma>ing or acBuisition of the vessels so often
mentioned in the same proportion, the most reasonable conclusion is - and this supported by a
presumption of la# D5rt. ;;, &ivil &ode E - #hich all apportioned the cost of paying them each a
iBual fee. 2f this is true, then #e must accept the conclusion of the &ourt that appellees are
o#ners four sixths of the je#elry, and Buelos appellants are not but only t#o partesrestantes
sixths. Ay consiBuiente, having decided that the most are the appellees, entrusting the custody
and administration of those je#els to faithfully comply #ith the #ill of their primitive o#ners,
appealed to =avadia 8ngracia, the only survivor of them, his decision must respected, because
the administration and better enjoyment of the thing common, according to article ;0 of the
&ivil &ode, are mandatory agreements most of the parta>ers.
The argument that (osario &osme 1endo)a and its predecessors have been serving faithfully his
trustees cometidocomo not argues for the proposition that #e should not #ithdra# the deposit
because the deposit agreement is such that allo#s the depositor to #ithdra# the depositary of
the thing deposited, any time he #anted, above all, #hen the last, as in the case of (osario
&osme 1endo)a, has executed an act contrary to the order received, commending or trying to
instruct another, custody and administration the thing deposited, on their o#n and #ithout the
consent of depositors or their heirs.
9ot having found no error in the appealed decision of the court a Cuo" hereby, con'rm it,
sentencing the appellants to pay the costs. -o is ordered.
G.R. No. L-,2/46 November 1, 19,/
(ANUEL (ELENCIO, (ARIANO (ELENCIO, PURA (ELENCIO, !" CARIDAD
(ELENCIO, plaintifs-appellants,
vs.
DY $IAO LAY, defendant-appellee.
O&$RAND, J.:
On 5ugust 1,13", the plaintifs, 1anuel, 1ariano, ,ura and &aridad 1elencio, brought the
present action against the defendant-appellee, %y Tiao =ay for the recovery of the possession of
a parcel of land situated in the to#n of &abanatuan, 9ueva 8cija, and containing an area of
<,630.35 sBuare meters. The plaintifs further demand a monthly rental of ,;!! for the use and
occupation of the parcel from 1ay, 136, until the date of the surrender to them of the
possession thereof4 and that if it is found that the said appellee #as occupying the said parcel of
land by virtue of a contract of lease, such contract should be declared null and void for lac> of
consent, concurrence, and rati'cation by the o#ners thereof.
2n his ans#er, the defendant pleaded the general issue, and as special defenses, he alleged in
substance that he #as occupying the said tract of land by virtue of a contract of lease executed
on /uly 3<,1!5, in favor of his predecessor in interest, by (uperta @arcia, ,edro 1elencio, /uliana
1elencio, and (uperta 1elencio under the terms speci'ed therein, and #hich contract is still in
force4 that =iberata 1acapagal, the mother of the plaintifs, in her capacity as judicial
administratrix of the estate of (amon 1elencio, one of the original coo#ners of the parcel of land
in Buestion, actually recogni)ed and rati'ed the existence and validity of the contract aforesaid
by virtue of the execution of a public document by her on or about 9ovember 3",13!, and by
collecting from the assignees of the original lessee the monthly rent for the premises until 5pril
;!, 1364 and that said defendant deposits #ith the cler> of court the sum of ,3!.3! every
month as rent thereof and that as a counterclaim, he see>s the recovery of ,3"3 for goods and
money delivered by him to the plaintifs.
The plaintifs 'led a reply to the ans#er alleging, among other things, that (uperta @arcia #as
not one of the coo#ners of the land in Buestion4 that the person #ho signed the alleged contract
of lease never represented themselves as being the sole and exclusive o#ners of the land
subject to the lease as alleged by the defendant in his ans#er4 that the said contract of lease of
/uly 3<,1!5, is null and void for being executed #ithout the intervention and consent of t#o
coo#ners, (amon 1elencio and /ose ,. 1elencio, and #ithout the marital consent of the
husbands of /uliana and (uperta 1elencio4 that the lessee has repeatedly violated the terms and
conditions of the said contract4 and that =iberata 1acapagal, in her capacity as administratrix of
the property of her deceased husband, could not la#fully and legally execute a contract of lease
#ith the conditions and terms similar to that of the one under consideration, and that from this it
follo#s that she could not ratify the said lease as claimed by the defendant.
On /anuary 31,130, =iberata 1acapagal *iuda de 1elencio, duly appointed and Buali'ed as
administratrix of the estate of her deceased husband, (amon 1elencio, 'led a petition praying to
be allo#ed to join the plaintifs as party to the present case, #hich petition #as granted in open
court on /anuary ;1,130. $er amended complaint of intervention of +ebruary 1<,130, contains
allegations similar to those alleged in the complaint of the original plaintifs, and she further
alleges that the defendant-appellee has occupied the land in Buestion ever since 9ovember,
13!, under and by virtue of a verbal contract of lease for a term from month to month. To this
complaint of intervention, the defendant-appellee 'led an ans#er reproducing the allegations
contained in his ans#er reproducing the allegations contained in his ans#er to the complaint of
the original plaintifs and setting up prescription as a further special defense.
2t appears from the evidence that the land in Buestion #as originally o#ned by one /ulian
1elencio. $e died prior to the year 1!5 leaving his #ido#, (uperta @arcia, and his 've children,
/uliana, (amon, (uperta, ,edro (., and 8milio 1elencio. 8milio 1elencio also died before 1!5,
his son /ose ,. 1elencio, then a minor, succeeding to his interest in the said parcel of land by
representation. 5 Buestion has been raised as to #hether the land #as community property of
the marriage of /ulian 1elencio and (uperta @arcia, but the evidence is practically undisputed
that (uperta @arcia in reality held nothing but a #ido#?s usufruct in the land.
On /uly 3<,1!5, (uperta @arcia, ,edro (. 1elencio, /uliana 1elencio, and (uperta 1elencio
executed a contract of lease of the land in favor of one Kap Iui &hin, but neither /ose ,. 1elencio
nor (amon 1elencio #ere mentioned in the lease. The term of the lease #as for t#enty years,
extendible for a li>e period at the option of the lessee. The purpose of the lessee #as to establish
a rice mill on the land, #ith the necessary buildings for #arehouses and for Buarters for the
employees, and it #as further stipulated that at the termination of the original period of the
lease, or the extension therof, the lessors might purchase all the buildings and improvements on
the land at a price to be 'xed by experts appointed by the parties, but that if the lessors should
fail to ta>e advantage of that privilege, the lease #ould continue for another and further period
of t#enty years. The document #as duly ac>no#ledged but #as never recorded #ith the register
of deeds. The original rent agreed upon #as ,35 per month, but by reason of the construction of
a street through the land, the monthly rent #as reduced of ,3!.3!.
-hortly after the execution of the lease, the lessee too> possession of the parcel in Buestion and
erected the mill as #ell as the necessary buildings, and it appears that in matters pertaining to
the lease, he dealt #ith ,edro (. 1elencio, #ho from 1!5 until his death in 13!, acted as
manager of the property held in common by the heirs of /ulian 1elencio and (uperta @arcia. The
original lessee, Kap Iui &hin, died in 113, and the lease, as #ell as the other property, #as
transferred to Gy 8ng /ui #ho again transferred it to Gy 8ng /ui H &o., an unregistered
partnership. +inally the lease came into the hands of %y Tiao =ay, the herein defendant-appellee.
(amon 1elencio died in 11<, and his #ido#, =iberata 1acapagal, #as appointed administratrix
of his estate. 2n 11; the land #hich includes the parcel in Buestion #as registered under the
Torrens system. The lease #as not mentioned in the certi'cate of title, but it #as stated that one
house and three #arehouses on the land #ere the property of Kap Iui &hin.
2n 13! the heirs of /ulian 1elencio made an extrajudicial partition of parts of the inheritance,
and among other things, the land here in Buestion fell to the share of the children of (amon
1elencio, #ho are the original plaintifs in the present case. Their mother, =iberata 1acapagal, as
administratrix of the estate of her deceased husband, (amon, collected the rent for the lease at
the rate of ,3!.3! per month until the month of 1ay,136, #hen she demanded of the lessee
that the rent should be increased to ,;!! per month, and she #as then informed by the
defendant that a #ritten lease existed and that according to the terms thereof, the defendant
#as entitled to an extension of the lease at the original rental. The plaintifs insisted that they
never had any >no#ledge of the existence of such a contract of lease and maintained that in
such case the lease #as executed #ithout their consent and #as void. 2t may be noted that upon
careful search, a copy of the contract of lease #as found among the papers of the deceased
,edro (, 1elencio. Thereafter the present action #as brought to set aside the lease and to
recover possession of the land. Gpon trial, the court belo# rendered judgment in favor of the
defendant declaring the lease valid and ordering the plaintifs to pay the ,3"3 demanded by the
defendant in his counterclaim. +rom this judgment the plaintifs appealed.
The contention of the appellants is that the aforesaid contract of lease D8xhibit &E is null and void
for the follo#ing reasons7
1. That 8xhibit & calls for an alteration of the property in Buestion and therefore ought to
have been signed by all the coo#ners as by la# reBuired in the premises.
3. That the validity and ful'llment of the said agreement of lease #ere made to depend
upon the #ill of the lessee exclusively.
;. That the said contract of lease being for a term of over six years, the same is null and
void pursuant to the provision of article 15<0 of the &ivil &ode.
<. That the duration of the same is unreasonably long, thus being against public policy.
5. That the defendant-appellee and his predecessors in interest repeatedly violated the
provisions of the agreement.
The 'rst proposition is based on article ;" of the &ivil &ode #hich provides that Cnone of the
o#ners shall, #ithout the consent of the others, ma>e any alterations in the common property
even though such alterations might be advantageous to all.C :e do not thin> that the alterations
are of su.cient importance to nullify the lease, especially so since none of the coo#ners
objected to such alterations until over t#enty years after the execution of the contract of lease.
The decision of this court in the case of 8nriBue) vs. 5. -. :atson and &o. D33 ,hil., 63;E,
contains a full discussion of the efect of alterations of leased community property, and no
further discussion upon the point need here be considered.
The second proposition is li>e#ise of little merit. Gnder the circumstances, the provision in the
contract that the lessee, at any time before he erected any building on the land, might rescind
the lease, can hardly be regarded as a violation of article 1356 of the &ivil &ode.
The third and fourth proposition are, in our opinion, determinative of the controversy. The court
belo# based its decision principally on the case of 8nriBue) vs. 5.-. :atson H &o. D33 ,hil., 63;E,
and on the resolution of theBireccion General de los 2e$istros dated 5pril 36,1!".
D/urisprudencia &ivil, vol.1!", p. 333.E 5n examination of the 8nriBue) case #ill sho# that it
difers materially from the present. 2n that case all of the coo#ners of a lot and building executed
a contract of lease of the property for the term of eighteen years in favor of 5. -. :atson H &o.4
one of the o#ners #as minor, but he #as represented by his legally appointed guardian, and the
action of the latter in signing the lease on behalf of the minor #as formally approved by the
&ourt of +irst 2nstance. 2n the present case only a small majority of the coo#ners executed the
lease here in Buestion, and according to the terms of the contract the lease might be given a
duration of sixty years4 that is #idely diferent from a lease granted by all of the coo#ners for a
term of only eighteen years.
The resolution of 5pril 36,1!", is more in point. 2t relates to the inscription or registration of a
contract of lease of some pasture grounds. The majority of the coo#ners of the property
executed the lease for the term of t#elve years but #hen the lessees presented the lease for
inscription in the registry of property, the registrar denied the inscription on the ground that the
term of the lease exceeded six years and that therefore the majority of the coo#ners lac>ed
authority to grant the lease. The Bireccion General de los 2e$istros held that the contract of
lease for a period exceeding six years, constitutes a real right subject to registry and that the
lease in Buestion #as valid.
The conclusions reached by the Bireccion General led to considerable criticism and have been
overruled by a decision of the -upreme &ourt of -pain dated /une 1,1!. 2n that decision the
court made the follo#ing statement of the case DtranslationE7
The joint o#ners of 511 out of 1,!!! parts of the realty denominated El 'ortero" leased
out the #hole property for t#elve years to %oLa /osefa de la (osa4 #hereupon the &ount
and &ountess Trespalacios together #ith other coo#ners brought this suit to annul the
lease and, in vie# of the fact that the land #as indivisible, prayed for its sale by public
auction and the distribution of the price so obtained4 they alleged that they neither too>
part nor consented to the lease4 that the decision of the majority of part o#ners referred
to in article ;0 of the &ode, implies a common deliberation on the step to be ta>en , for
to do #ithout it, #ould, even more than to do #ithout the minority, be nothing less than
plunder4 and that, even if this deliberation #ere not absolutely necessary, the po#er of the
majority #ould still be con'ned to decisions touching the management and enjoyment of
the common property, and #ould not include acts of o#nership, such as a lease for t#elve
years, #hich according to the 1ortgage =a# gives rise to a real right, #hich must be
recorded, and #hich can be performed only by the o#ners of the property leased.
The part o#ners #ho had executed the contract prayed in reconvention that it held valid
for all the o#ners in common, and if this could not be, then for all those #ho had signed it,
and for the rest, for the period of six years4 and the Audiencia o) %aceres having rendered
judgment holding the contract null and void, and ordering the sale of the realty and the
distribution of the price, the defendants appealed alleging under the third and fourth
assignments of error, that the judgment #as a violation of article ;0 of the &ivil &ode,
#hich is absolute and sets no limit of time for the e.cacy of the decisions arrived at by
the majority of the part o#ners for the enjoyment of the common property, citing the
decisions of /une ;!th, 10", of /uly 0th,1!3, and of October ;!th, 1!"4 under the 'fth
assignments of error the appellants contended that in including joint o#ners among those
referred to in said article, #hich sets certain limits to the po#er of leasing, in the course of
the management of another?s property, the court applied article 15<0 unduly4 and by the
seventh assignments of error, they maintained the judgment appealed from also violated
article 1"3", providing that the principal is not bound #here his agent has acted beyond
his authority4 #hence it may be inferred that if in order to hold the contract null and void,
the majority of the part o#ners are loo>ed upon as managers or agents exercising limited
po#ers, it must at least be conceded that in so far as the act in Buestion lies #ithin the
scope of their po#ers, it is valid4 the contract cannot be annulled in toto.
The -upreme &ourt held that the appeal from the decision of the Audiencia o) %aceres #as not
#ell ta>en and expressed the follo#ing consideranda7
&onsidering that, although as a rule the contract of lease constitutes an act of
management, as this court has several times held, cases may yet arise, either o#ing to
the nature of the subject matter, or to the period of duration, #hich may render it
imperative to record the contract in the registry of property, in pursuance of the 1ortgage
=a#, #here the contract of lease may give rise to a real right in favor of the lessee, and it
#ould then constitute such a sundering of the o#nership as transcends mere
management4 in such cases it must of necessity be recogni)ed that the part o#ners
representing the greater portion of the property held in common have no po#er to lease
said property for a longer period than six years #ithout the consent of all the coo#ners,
#hose propriety rights, expressly recogni)ed by the la#, #ould by contracts of long
duration be restricted or annulled4 and as under article 15<0 of the &ivil &ode such
contracts cannot be entered into by the husband #ith respect to his #ife?s property, by the
parent or guardian #ith respect to that of the child or #ard, and by the manager in default
of special po#er, since the contract of lease only produces personal obligations, and
cannot #ithout the consent of all persons interested or express authority from the o#ner,
be extended to include stipulations #hich may alter its character, changing it into a
contract of partial alienation of the property leased4
&onsidering that, applying this doctrine to the case before us, one of the grounds upon
#hich the judgment appealed from, denying the validity of the lease made by the majority
of the part o#ners of the pasture landEl 'ortero is based, must be upheld4 to #it, that the
period of duration is t#elve years and the consent of all the coo#ners has not been
obtained4 hence, the third, fourth. and 'fth assignments of error are #ithout merit4 'rstly,
because article ;0 of the &ivil &ode, alleged to have been violated, refers to acts decided
upon by the majority of the part o#ners, touching the management and enjoyment of the
common property, and does not contradict #hat #e have stated in the foregoing
paragraph4 secondly because although the cases cited #ere such as arose upon leases for
more than six years, yet this point #as not raised on appeal, and could not therefore be
passed upon4 and thirdly, because it cannot be denied that there is an analogy bet#een a
manager #ithout special authority, #ho is forbidden by article 15<0 of the &ode to give a
lease for a period of over six years, and the joint o#ners constituting a legal majority, #ho
may decide to lease out the indivisible property, #ith respect to the shares of the other
coo#ners4 and having come to the conclusion that the contract is null and void, there is no
need to discuss the 'rst t#o assignments of error #hich refer to another of the bases
adopted, ho#ever erroneously, by the trial court4
&onsidering that the sixth assignment of error is #ithout merit, inasmuch as the joint
o#nership of property is not a sort of agency and cannot be governed by the provisions
relating to the latter contract4 #hence, article 1"3" of the &ode alleged to have been
violated, can no more be applied, than, the Buestion of the validity or nullity of the lease
being raise, upon the contract as celebrated, it #ould be allo#able to modify
aposteriori some one or other of the main conditions stipulated, li>e that regarding the
duration of the lease, for this #ould amount to a novation4 still less allo#able #ould it be
to authori)e diverse periods for the diferent persons uneBually interested in the
ful'llment.
Ta>ing into consideration articles ;0,15<0, and 1"1; of the &ivil &ode and follo#ing the
aforesaid decision of /une 1,1!, #e hold that the contract of lease here in Buestion is null and
void.
2t has been suggested that by reason of prescription and by acceptance of bene'ts under the
lease, the plaintifs are estopped to Buestion the authority for ma>ing the lease.To this #e may
ans#er that the burden of proof of prescription devolved upon the defendant and that as far as
#e can 'nd, there is no proof that (amon 1elencio and his successors ever had >no#ledge of the
existence of the lease in Buestion prior to 136. :e cannot by mere suspicion conclude that they
#ere informed of the existence of the document and its terms4 it must be remembered that
under a strict interpretation of the terms of the lease, the lessees could remain inde'nitely in
their tenancy unless the lessors could purchase the mill and the buildings on the land. 2n such
circumstances, better evidence than that presented by the defendant in regard to the plaintif?s
>no#ledge of the lease must be reBuired.
The fact that (amon during his lifetime received his share of the products of land o#ned in
common #ith his coheirs is not su.cient proof of >no#ledge of the existence of the contract of
lease #hen it is considered that the land in Buestion #as only a small portion of a large tract
#hich ,edro (. 1elencio #as administering in connection #ith other community property.
The appealed judgment as to the validity of the lease is therefore reversed, and it is ordered that
the possession of the land in controversy be delivered to the intervenor =iberata 1acapagal in
her capacity as administratrix of the estate of the deceased (amon 1elencio. 2t is further ordered
that the defendant pay to said administratrix a monthly rent of ,5! for the occupation of the land
from 1ay 1st, 136, until the land is delivered to the administratrix. The sum of ,3"3 demanded
by the defendant in his counterclaim may be deducted from the total amount of the rent due and
unpaid. The building erected on the land by the defendant and his predecessors in interest may
be removed by him, or other#ise disposed of, #ithin six months from the promulgation of this
decision. :ithout costs. -o ordered.
G.R. No. L-,4/4 A)r*+ 2, 1951
ANGELA I. $UA&ON, plaintif-appellant,
vs.
AN$ONIO $UA&ON, -R., !" GREGORIO ARANE$A, INC., defendants-appellees.
(ON$E(AYOR, J.?
2n 1<1 the sisters 5ngela 2. Tuason and 9ieves Tuason de Aarreto and their brother 5ntonio
Tuason /r., held a parcel of land #ith an area of 6<,30.6 sB. m. covered by &erti'cate of Title 9o.
6!11 in -ampaloc, 1anila, in common, each o#ning an undivided 1O; portion. 9ieves #anted
and as>ed for a partition of the common property, but failing in this, she ofered to sell her 1O;
portion. The share of 9ieves #as ofered for sale to her sister and her brother but both declined
to buy it. The ofer #as later made to their mother but the old lady also declined to buy, saying
that if the property later increased in value, she might be suspected of having ta>en advantage
of her daughter. +inally, the share of 9ieves #as sold to @regorio 5raneta 2nc., a domestic
corporation, and a ne# &erti'cate of Title 9o. 61"31 #as issued in lieu of the old title 9o. 6!11
covering the same property. The three co-o#ners agreed to have the #hole parcel subdivided
into small lots and then sold, the proceeds of the sale to be later divided among them. This
agreement is embodied in a document D8xh. 6E entitled C1emorandum of 5greementC consisting
of ten pages, dated /une ;!, 1<1.
Aefore, during and after the execution of this contract D8xh. 6E, 5tty. /. 5ntonio 5raneta #as
acting as the attorney-in-fact and la#yer of the t#o co-o#ners, 5ngela 2. Tuason and her brother
5ntonio Tuason /r. 5t the same time he #as a member of the Aoard of %irector of the third co-
o#ner, 5raneta, 2nc.
The pertinent terms of the contract D8xh. 6E may be brieFy stated as follo#s7 The three co-
o#ners agreed to improve the property by 'lling it and constructing roads and curbs on the same
and then subdivide it into small lots for sale. 5raneta 2nc. #as to 'nance the #hole development
and subdivision4 it #as prepare a schedule of prices and conditions of sale, subject to the subject
to the approval of the t#o other co-o#ners4 it #as invested #ith authority to sell the lots into
#hich the property #as to be subdivided, and execute the corresponding contracts and deeds of
sale4 it #as also to pay the real estate taxes due on the property or of any portion thereof that
remained unsold, the expenses of surveying, improvements, etc., all advertising expenses,
salaries of personnel, commissions, o.ce and legal expenses, including expenses in instituting
all actions to eject all tenants or occupants on the property4 and it undertoo> the duty to furnish
each of the t#o co-o#ners, 5ngela and 5ntonio Tuason, copies of the subdivision plans and the
monthly sales and rents and collections made thereon. 2n return for all this underta>ing and
obligation assumed by 5raneta 2nc., particularly the 'nancial burden, it #as to receive 5! per
cent of the gross selling price of the lots, and any rents that may be collected from the property,
#hile in the process of sale, the remaining 5! per cent to be divided in eBual portions among the
three co-o#ners so that each #ill receive 16.;; per cent of the gross receipts.
Aecause of the importance of paragraphs , 11 and 15 of the contract D8xh. 6E, for purposes of
reference #e are reproducing them belo#7
DE This contract shall remain in full force and efect during all the time that it may be
necessary for the ,5(TK O+ T$8 -8&O9% ,5(T to fully sell the said property in small and
subdivided lots and to fully collect the purchase prices due thereon4 it being understood
and agreed that said lots may be rented #hile there are no purchasers thereof4
D11E The ,5(TK O+ T$8 -8&O9% ,5(T Dmeaning 5raneta 2nc.E is hereby given full po#er
and authority to sign for and in behalf of all the said co-o#ners of said property all
contracts of sale and deeds of sale of the lots into #hich this property might be
subdivided4 the po#ers herein vested to the ,5(TK O+ T$8 -8&O9% ,5(T may, under its
o#n responsibility and ris>, delegate any of its po#ers under this contract to any of its
o.cers, employees or to third persons4
D15E 9o co-o#ner of the property subject-matter of this contract shall sell, alienate or
dispose of his o#nership, interest or participation therein #ithout 'rst giving preference to
the other co-o#ners to purchase and acBuire the same under the same terms and
conditions as those ofered by any other prospective purchaser. -hould none of the co-
o#ners of the property subject-matter of this contract exercise the said preference to
acBuire or purchase the same, then such sale to a third party shall be made subject to all
the conditions, terms, and dispositions of this contract4 provided, the ,5(T28- O+ T$8
+2(-T ,5(T Dmeaning 5ngela and 5ntonioE shall be bound by this contract as long as the
,5(TK O+ T$8 -8&O9% ,5(T, namely, the @(8@O(2O 5(598T5, 29&. is controlled by the
members of the 5raneta family, #ho are stoc>holders of the said corporation at the time
of the signing of this contract andOor their la#ful heirs4
On -eptember 16, 1<<, 5ngela 2. Tuason revo>ed the po#ers conferred on her attorney-in-fact
and la#yer, /. 5ntonio 5raneta. Then in a letter dated October 1, 1<6, 5ngela noti'ed 5raneta,
2nc. that because of alleged breach of the terms of the C1emorandum of 5greementC D8xh. 6E
and abuse of po#ers granted to it in the document, she had decided to rescind said contract and
she as>ed that the property held in common be partitioned. =ater, on 9ovember 3!, 1<6,
5ngela 'led a complaint in the &ourt of +irst 2nstance of 1anila as>ing the court to order the
partition of the property in Buestion and that she be given 1O; of the same including rents
collected during the time that the same including rents collected during the time that 5raneta
2nc., administered said property.
The suit #as administered principally against 5raneta, 2nc. ,laintif?s brother, 5ntonio Tuason /r.,
one of the co-o#ners evidently did not agree to the suit and its purpose, for he evidently did not
agree to the suit and its purpose, for he joined 5raneta, 2nc. as a co-defendant. 5fter hearing and
after considering the extensive evidence introduce, oral and documentary, the trial court
presided over by /udge 8milio ,eLa in a long and considered decision dismissed the complaint
#ithout pronouncement as to costs. The plaintif appealed from that decision, and because the
property is valued at more than ,5!,!!!, the appeal came directly to this &ourt.
-ome of the reasons advanced by appellant to have the memorandum contract D8xh. 6E declared
null and void or rescinded are that she had been tric>ed into signing it4 that she #as given to
understand by 5ntonio 5raneta acting as her attorney-in-fact and legal adviser that said contract
#ould be similar to another contract of subdivision of a parcel into lots and the sale thereof
entered into by @regorio 5raneta 2nc., and the heirs of %. Tuason, 8xhibit C=C, but it turned out
that the t#o contracts #idely difered from each other, the terms of contract 8xh. C=C being
relatively much more favorable to the o#ners therein the less favorable to 5raneta 2nc.4 that 5tty.
5ntonio 5raneta #as more or less disBuali'ed to act as her legal adviser as he did because he
#as one of the o.cials of 5raneta 2nc., and 'nally, that the defendant company has violated the
terms of the contract D8xh. 6E by not previously sho#ing her the plans of the subdivision, the
schedule of prices and conditions of the sale, in not introducing the necessary improvements into
the land and in not delivering to her her share of the proceeds of the rents and sales.
:e have examined 8xh. C=C and compared the same #ith the contract D8xh. 6E and #e agree #ith
the trial court that in the main the terms of both contracts are similar and practically the same.
1oreover, as correctly found by the trial court, the copies of both contracts #ere sho#n to the
plaintif 5ngela and her husband, a bro>er, and both had every opportunity to go over and
compare them and decide on the advisability of or disadvantage in entering into the contract
D8xh. 6E4 that although 5tty. 5ntonio 5raneta #as an o.cial of the 5raneta 2nc.4 being a member
of the Aoard of %irectors of the &ompany at the time that 8xhibit C6C #as executed, he #as not
the party #ith #hich 5ngela contracted, and that he committed no breach of trust. 5ccording to
the evidence 5raneta, the pertinent papers, and sent to her chec>s covering her receive the
same4 and that as a matter of fact, at the time of the trial, 5raneta 2nc., had spent about
,11",!!! in improvement and had received as proceeds on the sale of the lots the respectable
sum of ,1,365,5;0.<0. :e Buote #ith approval that portion of the decision appealed from on
these points7
The evidence in this case points to the fact that the actuations of /. 5ntonio 5raneta in
connection #ith the execution of exhibit 6 by the parties, are above board. $e committed
nothing that is violative of the 'duciary relationship existing bet#een him and the plaintif.
The act of /. 5ntonio 5raneta in giving the plaintif a copy of exhibit 6 before the same #as
executed, constitutes a full disclosure of the facts, for said copy contains all that appears
no# in exhibit 6.
,laintif charges the defendant @regorio 5raneta, 2nc. #ith infringing the terms of the
contract in that the defendant corporation has failed D1E to ma>e the necessary
improvements on the property as reBuired by paragraphs 1 and ; of the contract4 D3E to
submit to the plaintif from time to time schedule of prices and conditions under #hich the
subdivided lots are to be sold4 and to furnish the plaintif a copy of the subdivision plans, a
copy of the monthly gross collections from the sale of the property.
The &ourt 'nds from the evidence that he defendant @regorio 5raneta, 2ncorporated has
substantially complied #ith obligation imposed by the contract exhibit 6 in its paragraph 1,
and that for improvements alone, it has disbursed the amount of ,11",16".!. 2t has
li>e#ise paid taxes, commissions and other expenses incidental to its obligations as
denied in the agreement.
:ith respect to the charged that @regorio 5raneta, 2ncorporated has failed to submit to
plaintif a copy of the subdivision plains, list of prices and the conditions governing the
sale of subdivided lots, and monthly statement of collections form the sale of the lots, the
&ourt is of the opinion that it has no basis. The evidence sho#s that the defendant
corporation submitted to the plaintif periodically all the data relative to prices and
conditions of the sale of the subdivided lots, together #ith the amount corresponding to
her. Aut #ithout any justi'able reason, she refused to accept them. :ith the indiferent
attitude adopted by the plaintif, it #as thought useless for @regorio 5raneta, 2ncorporated
to continue sending her statement of accounts, chec>s and other things. -he had sho#n
on various occasions that she did not #ant to have any further dealings #ith the said
corporation. -o, if the defendant corporation proceeded #ith the sale of the subdivided
lots #ithout the approval of the plaintif, it #as because it #as under the correct
impression that under the contract exhibit 6 the decision of the majority co-o#ners is
binding upon all the three.
The &ourt feels that recission of the contract exhibit 6 is not minor violations of the terms
of the agreement, the general rule is that Crecission #ill not be permitted for a slight or
casual breach of the contract, but only for such breaches as are so substantial and
fundamental as to defeat the object of the parties in ma>ing the agreementC D-ong +o H
&o. vs. $a#aiian-,hilippine &o., <" ,hil. 031E.
5s regards improvements, the evidence sho#s that during the /apanese occupation from 1<3
and up to 1<6, the 5raneta 2nc. although #illing to 'll the land, #as unable to obtain the
eBuipment and gasoline necessary for 'lling the lo# places #ithin the parcel. 5s to sales, the
evidence sho#s that 5raneta 2nc. purposely stopped selling the lots during the /apanese
occupantion, >no#ing that the purchase price #ould be paid in /apanese military notes4 and 5tty.
5raneta claims that for this, plaintif should be than>full because other#ise she #ould have
received these notes as her share of the receipts, #hich currency later became valueles.
Aut the main contention of the appellant is that the contract D8xh. 6E should be declared null and
void because its terms, particularly paragraphs , 11 and 15 #hich #e have reproduced, violate
the provisions of 5rt. <!! of the &ivil &ode, #hich for the purposes of reference #e Buote belo#7
5(T. <!!. 9o co-o#ner shall be obliged to remain a party to the community. 8ach may, at
any time, demand the partition of the thing held in common.
9evertheless, an agreement to >eep the thing undivided for a speci'ed length of time, not
exceeding ten years, shall be valid. This period may be a ne# agreement.
:e agree #ith the trial court that the provisions of 5rt. <!! of the &ivil &ode are not applicable.
The contract D8xh., 6E far from violating the legal provision that forbids a co-o#ner being obliged
to remain a party to the community, precisely has for its purpose and object the dissolution of
the co-o#nership and of the community by selling the parcel held in common and dividing the
proceeds of the sale among the co-o#ners. The obligation imposed in the contract to preserve
the co-o#nership until all the lots shall have been sold, is a mere incident to the main object of
dissolving the co-o#ners. Ay virtue of the document 8xh. 6, the parties thereto practically and
substantially entered into a contract of partnership as the best and most expedient means of
eventually dissolving the co-o#nership, the life of said partnership to end #hen the object of its
creation shall have been attained.
This aspect of the contract is very similar to and #as perhaps based on the other agreement or
contract D8xh. C=CE referred to by appellant #here the parties thereto in express terms entered
into partnership, although this object is not expressed in so many #ords in 8xh. 6. :e repeat that
#e see no violation of 5rt. <!! of the &ivil &ode in the parties entering into the contract D8xh. 6E
for the very reason that 5rt. <!! is not applicable.
=oo>ing at the case from a practical standpoint as did the trial court, #e 'nd no valid ground for
the partition insisted upon the appellant. :e 'nd from the evidence as #as done by the trial
court that of the 6<,30.6 sB. m. #hich is the total area of the parcel held in common, only 1,6!!
sB. m. or 3.5 per cent of the entire area remained unsold at the time of the trial in the year 1<",
#hile the great bul> of ".5 per cent had already been sold. 5s #ell observed by the court belo#,
the partnership is in the process of being dissolved and is about to be dissolved, and even
assuming that 5rt. <!! of the &ivil &ode #ere applicable, under #hich the parties by agreement
may agree to >eep the thing undivided for a period not exceeding 1! years, there should be no
fear that the remaining 1,6!! sB. m. could not be disposed of #ithin the four years left of the ten-
years period 'xed by 5rt. <!!.
:e deem it unnecessary to discuss and pass upon the other points raised in the appeal and
#hich counsel for appellant has extensively and ably discussed, citing numerous authorities. 5s
#e have already said, #e have vie#ed the case from a practical standpoint, brushing aside
technicalities and disregarding any minor violations of the contract, and in deciding the case as
#e do, #e are fully convinced that the trial court and this Tribunal are carrying out in a practical
and expeditious #ay the intentions and the agreement of the parties contained in the contract
D8xh. 6E, namely, to dissolve the community and co-o#nership, in a manner most pro'table to
the said parties.
2n vie# of the foregoing, the decision appealed from is hereby a.rmed. There is no
pronouncement as to costs.
-o ordered.

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