1
G.R. No. L-81147 June 20, 1989
VICTORIA BRINGAS PEREIRA, petitioner,
vs.
THE HONORABLE COURT OF APPEALS and RITA PEREIRA NAGAC, respondents.
Benjamin J. Quitoriano for petitioner.
Linzag-Arcilla & Associates Law Offices for private respondent.
GANCAYCO, J.:
Is a judicial administration proceeding necessary when the decedent dies intestate
without leaving any debts? May the probate court appoint the surviving sister of the
deceased as the administratrix of the estate of the deceased instead of the surviving
spouse? These are the main questions which need to be resolved in this case.
Andres de Guzman Pereira, an employee of the Philippine Air Lines, passed away on
January 3, 1983 at Bacoor, Cavite without a will. He was survived by his legitimate
spouse of ten months, the herein petitioner Victoria Bringas Pereira, and his sister Rita
Pereira Nagac, the herein private respondent.
On March 1, 1983, private respondent instituted before Branch 19 of the Regional Trial
Court of Bacoor, Cavite, Special Proceeding No. RTC-BSP-83-4 for the issuance of
letters of administration in her favor pertaining to the estate of the deceased Andres de
Guzman Pereira. 1 In her verified petition, private respondent alleged the following: that
she and Victoria Bringas Pereira are the only surviving heirs of the deceased; that the
deceased left no will; that there are no creditors of the deceased; that the deceased left
several properties, namely: death benefits from the Philippine Air Lines (PAL), the PAL
Employees Association (PALEA), the PAL Employees Savings and Loan Association,
Inc. (PESALA) and the Social Security System (SSS), as well as savings deposits with
the Philippine National Bank (PNB) and the Philippine Commercial and Industrial Bank
(PCIB), and a 300 square meter lot located at Barangay Pamplona, Las Pinas, Rizal and
finally, that the spouse of the deceased (herein petitioner) had been working in London
as an auxiliary nurse and as such one-half of her salary forms part of the estate of the
deceased.
On March 23,1983, petitioner filed her opposition and motion to dismiss the petition of
private respondent 2 alleging that there exists no estate of the deceased for purposes of
administration and praying in the alternative, that if an estate does exist, the letters of
administration relating to the said estate be issued in her favor as the surviving spouse.
In its resolution dated March 28, 1985, the Regional Trial Court, appointed private
respondent Rita Pereira Nagac administratrix of the intestate estate of Andres de
Guzman Pereira upon a bond posted by her in the amount of Pl,000.00. The trial court
ordered her to take custody of all the real and personal properties of the deceased and to
file an inventory thereof within three months after receipt of the order. 3
Not satisfied with the resolution of the lower court, petitioner brought the case to the
Court of Appeals. The appellate court affirmed the appointment of private respondent as
administratrix in its decision dated December 15, 1987. 4
Hence, this petition for review on certiorari where petitioner raises the following issues:
(1) Whether or not there exists an estate of the deceased Andres de Guzman Pereira for
purposes of administration; (2) Whether or not a judicial administration proceeding is
necessary where there are no debts left by the decedent; and, (3) Who has the better
right to be appointed as administratrix of the estate of the deceased, the surviving
spouse Victoria Bringas Pereira or the surviving sister Rita Pereira Nagac?
Anent the first issue, petitioner contends that there exists no estate of the deceased for
purposes of administration for the following reasons: firstly, the death benefits from PAL,
PALEA, PESALA and the SSS belong exclusively to her, being the sole beneficiary and
in support of this claim she submitted letter-replies from these institutions showing that
she is the exclusive beneficiary of said death benefits; secondly, the savings deposits in
the name of her deceased husband with the PNB and the PCIB had been used to defray
the funeral expenses as supported by several receipts; and, finally, the only real property
of the deceased has been extrajudicially settled between the petitioner and the private
respondent as the only surviving heirs of the deceased.
Private respondent, on the other hand, argues that it is not for petitioner to decide what
properties form part of the estate of the deceased and to appropriate them for herself.
She points out that this function is vested in the court in charge of the intestate
proceedings.
Petitioner asks this Court to declare that the properties specified do not belong to the
estate of the deceased on the basis of her bare allegations as aforestated and a handful
of documents. Inasmuch as this Court is not a trier of facts, We cannot order an
unqualified and final exclusion or non-exclusion of the property involved from the estate
of the deceased. 5
The resolution of this issue is better left to the probate court before which the
administration proceedings are pending. The trial court is in the best position to receive
evidence on the discordant contentions of the parties as to the assets of the decedent's
estate, the valuations thereof and the rights of the transferees of some of the assets, if
any. 6 The function of resolving whether or not a certain property should be included in
the inventory or list of properties to be administered by the administrator is one clearly
within the competence of the probate court. However, the court's determination is only
provisional in character, not conclusive, and is subject to the final decision in a separate
action which may be instituted by the parties.7
Assuming, however, that there exist assets of the deceased Andres de Guzman Pereira
for purposes of administration, We nonetheless find the administration proceedings
instituted by private respondent to be unnecessary as contended by petitioner for the
reasons herein below discussed.
The general rule is that when a person dies leaving property, the same should be
judicially administered and the competent court should appoint a qualified administrator,
in the order established in Section 6, Rule 78, in case the deceased left no will, or in case
he had left one, should he fail to name an executor therein. 8 An exception to this rule is
established in Section 1 of Rule 74. 9 Under this exception, when all the heirs are of
lawful age and there are no debts due from the estate, they may agree in writing to
partition the property without instituting the judicial administration or applying for the
appointment of an administrator.
Section 1, Rule 74 of the Revised Rules of Court, however, does not preclude the heirs
from instituting administration proceedings, even if the estate has no debts or obligations,
if they do not desire to resort for good reasons to an ordinary action for partition. While
Section 1 allows the heirs to divide the estate among themselves as they may see fit, or
to resort to an ordinary action for partition, the said provision does not compel them to do
so if they have good reasons to take a different course of action. 10 It should be noted
that recourse to an administration proceeding even if the estate has no debts is
sanctioned only if the heirs have good reasons for not resorting to an action for partition.
Where partition is possible, either in or out of court, the estate should not be burdened
with an administration proceeding without good and compelling reasons. 11
Thus, it has been repeatedly held that when a person dies without leaving pending
obligations to be paid, his heirs, whether of age or not, are not bound to submit the
property to a judicial administration, which is always long and costly, or to apply for the
appointment of an administrator by the Court. It has been uniformly held that in such
case the judicial administration and the appointment of an administrator are superfluous
and unnecessary proceedings . 12
Now, what constitutes "good reason" to warrant a judicial administration of the estate of a
deceased when the heirs are all of legal age and there are no creditors will depend on
the circumstances of each case.

In one case, 13 We said:
Again the petitioner argues that only when the heirs do not have any
dispute as to the bulk of the hereditary estate but only in the manner of
partition does section 1, Rule 74 of the Rules of Court apply and that in
this case the parties are at loggerheads as to the corpus of the
hereditary estate because respondents succeeded in sequestering
some assets of the intestate. The argument is unconvincing, because,
as the respondent judge has indicated, questions as to what property
belonged to the deceased (and therefore to the heirs) may properly be
ventilated in the partition proceedings, especially where such property
is in the hands of one heir.
In another case, We held that if the reason for seeking an appointment as administrator
is merely to avoid a multiplicity of suits since the heir seeking such appointment wants to
ask for the annulment of certain transfers of property, that same objective could be
achieved in an action for partition and the trial court is not justified in issuing letters of
administration. 14 In still another case, We did not find so powerful a reason the argument
that the appointment of the husband, a usufructuary forced heir of his deceased wife, as
judicial administrator is necessary in order for him to have legal capacity to appear in the
intestate proceedings of his wife's deceased mother, since he may just adduce proof of
his being a forced heir in the intestate proceedings of the latter.15
We see no reason not to apply this doctrine to the case at bar. There are only two
surviving heirs, a wife of ten months and a sister, both of age. The parties admit that
there are no debts of the deceased to be paid. What is at once apparent is that these two
heirs are not in good terms. The only conceivable reason why private respondent seeks
appointment as administratrix is for her to obtain possession of the alleged properties of
the deceased for her own purposes, since these properties are presently in the hands of
petitioner who supposedly disposed of them fraudulently. We are of the opinion that this
is not a compelling reason which will necessitate a judicial administration of the estate of
the deceased. To subject the estate of Andres de Guzman Pereira, which does not
appear to be substantial especially since the only real property left has been
extrajudicially settled, to an administration proceeding for no useful purpose would only
unnecessarily expose it to the risk of being wasted or squandered. In most instances of a
similar nature, 16 the claims of both parties as to the properties left by the deceased may
be properly ventilated in simple partition proceedings where the creditors, should there
be any, are protected in any event.
We, therefore, hold that the court below before which the administration proceedings are
pending was not justified in issuing letters of administration, there being no good reason
for burdening the estate of the deceased Andres de Guzman Pereira with the costs and
expenses of an administration proceeding.
With the foregoing ruling, it is unnecessary for us to delve into the issue of who, as
between the surviving spouse Victoria Bringas Pereira and the sister Rita Pereira Nagac,
should be preferred to be appointed as administratrix.
WHEREFORE, the letters of administration issued by the Regional Trial Court of Bacoor
to Rita Pereira Nagac are hereby revoked and the administration proceeding dismissed
without prejudice to the right of private respondent to commence a new action for
partition of the property left by Andres de Guzman Pereira. No costs.
SO ORDERED.
Narvasa, Cruz, Griño-Aquino and Medialdea, JJ., concur.
[G.R. No. 115181. March 31, 2000]
MARIA SOCORRO AVELINO, petitioner, vs. COURT OF APPEALS, ANGELINA
AVELINO, SHARON AVELINO, ANTONIO AVELINO, JR., TRACY AVELINO,
PATRICK MICHAEL AVELINO and MARK ANTHONY AVELINO, respondents. Sdaa
miso
2
RESOLUTION
QUISUMBING, J.:
Before us is a petition for review on certiorari of the Decision of the Court of Appeals
dated February 16, 1994 in CA-G.R. SP No. 31574 as well as its Resolution dated April
28, 1994 denying petitioner's Motion for Reconsideration. The assailed Decision affirmed
the Order of the Regional Trial Court of Quezon City, Branch 78, in Sp. Proc. No. Q-91-
10441 converting petitioner's petition for the issuance of letters of administration to an
action for judicial partition.
Petitioner Maria Socorro Avelino is a daughter and compulsory heir of the late Antonio
Avelino, Sr., and his first wife private respondent Angelina Avelino.
The other private respondents, Sharon, Antonio Jr., Tracy, Patrick and Mark Anthony all
surnamed Avelino are likewise compulsory heirs of Avelino, Sr. Sharon, an American, is
the second wife of Avelino, Sr. The other private respondents are siblings of petitioner
Ma. Socorro.
The records reveal that on October 24, 1991, Ma. Socorro filed before the Regional Trial
Court of Quezon City, Branch 78, docketed as SP Proc. No. Q-91-10441, a petition for
the issuance of letters of administration of the estate of Antonio Avelino, Sr., who died
intestate on April 10, 1989. She asked that she be appointed the administrator of the
estate.
On December 3, 1992, Angelina, and the siblings filed their opposition by filing a motion
to convert the said judicial proceedings to an action for judicial partition which petitioner
duly opposed.
On February 16, 1993, public respondent judge issued the assailed Order which reads:
"Acting on the Motion to Convert Proceedings to Action for Judicial
Partition, considering that the petitioner is the only heir not amenable
to a simple partition, and all the other compulsory heirs manifested
their desire for an expeditious settlement of the estate of the deceased
Antonio Avelino, Sr., the same is granted.
"WHEREFORE, the petition is converted into judicial partition of the
estate of deceased Antonio Avelino, Sr. The parties are directed to
submit a complete inventory of all the real and personal properties left
by the deceased. Set the hearing of the judicial partition on APRIL 13,
1993, at 8:30 o'clock in the morning. Notify all the parties and their
counsel of this assignment.
"SO ORDERED."[1]
On March 17, 1993, petitioner filed a motion for reconsideration which was denied in an
Order dated June 16, 1993.
On July 23, 1993, Ma. Socorro filed before the Court of Appeals, a petition for certiorari,
prohibition, and mandamus alleging grave abuse of discretion amounting to lack or
excess of jurisdiction on the part of the trial court, in granting private respondents' motion
to convert the judicial proceeding for the issuance of letters of administration to an action
for judicial partition. Her petition was docketed as CA-G.R. SP No. 31574. Sdaad
On February 18, 1994, the respondent appellate court rendered the assailed decision,
stating that the "petition is DENIED DUE COURSE" and accordingly dismissed." [2]
On March 1, 1994, petitioner duly moved for reconsideration, but it was denied on April
28, 1994.
Hence, this petition. Petitioner assigns the following errors:
THE COURT OF APPEALS ERRED IN UPHOLDING THE LOWER
COURT'S FINDING THAT PARTITION IS PROPER UNDER THE
PREMISES.
ADMINISTRATION SHOULD BE THE PROPER REMEDY PENDING
THE DETERMINATION OF THE CHARACTER AND EXTENT OF
THE DECEDENT'S ESTATE.[3]

For resolution, we find that given the circumstances in this case, the sole issue here is
whether respondent appellate court committed an error of law and gravely abused its
discretion in upholding the trial court's finding that a partition is proper.
Petitioner submits that: First, no partition of the estate is possible in the instant case as
no determination has yet been made of the character and extent of the decedent's
estate. She points to the Court's ruling in Arcilles v. Montejo, 26 SCRA 197 (1969),
where we held that when the existence of other properties of the decedent is a matter still
to be reckoned with, administration proceedings are the proper mode of resolving the
same.[4] In addition, petitioner contends that the estate is in danger of being depleted for
want of an administrator to manage and attend to it.
Second, petitioner insists that the Rules of Court does not provide for conversion of a
motion for the issuance of letters of administration to an action for judicial partition. The
conversion of the motion was, thus, procedurally inappropriate and should be struck
down for lack of legal basis.
When a person dies intestate, or, if testate, failed to name an executor in his will or the
executor so named is incompetent, or refuses the trust, or fails to furnish the bond
required by the Rules of Court, then the decedent's estate shall be judicially administered
and the competent court shall appoint a qualified administrator in the order established in
Section 6 of Rule 78.[5] The exceptions to this rule are found in Sections 1 and 2 of Rule
74[6] which provide:
"SECTION 1. Extrajudicial settlement by agreement between heirs. - If
the decedent left no will and no debts and the heirs are all of age or the
minors are represented by their judicial or legal representatives duly
authorized for the purpose, the parties may, without securing letters of
administration, divide the estate among themselves as they see fit by
means of a public instrument filed in the office of the register of deeds,
and should they disagree, they may do so in an ordinary action of
partition.. Scs daad
"SEC. 2. Summary settlement of estates of small value.- Whenever the
gross value of the estate of a deceased person, whether he died
testate or intestate, does not exceed ten thousand pesos, and that fact
if made to appear to the Regional Trial Court having jurisdiction of the
estate by the petition of an interested person and upon hearing, which
shall be held not less than one (1) month nor more than three (3)
months from the date of the last publication of a notice which shall be
published once a week for three (3) consecutive weeks in a newspaper
of general circulation in the province, and after such other notice to
interested persons as the court may direct, the court may proceed
summarily, without the appointment of an executor or administrator,
and without delay, to grant, if proper, allowance of the will, if any there
be, to determine who are the persons legally entitled to participate in
the estate and to apportion and divide it among them after the payment
of such debts of the estate as the court shall then find to be due; and
such persons, in their own right, if they are lawful age and legal
capacity, or by their guardians or trustees legally appointed and
qualified, if otherwise, shall thereupon be entitled to receive and enter
into the possession of the portions of the estate so awarded to them
respectively. The court shall make such order as may be just
respecting the costs of the proceedings, and all orders and judgments
made or rendered in the course thereof shall be recorded in the office
of the clerk, and the order of partition or award, if it involves real estate,
shall be recorded in the proper register's office."
3
The heirs succeed immediately to all of the rights and properties of the deceased at the
moment of the latter's death.[7] Section 1, Rule 74 of the Rules of Court, allows heirs to
divide the estate among themselves without need of delay and risks of being dissipated.
When a person dies without leaving pending obligations, his heirs, are not required to
submit the property for judicial administration, nor apply for the appointment of an
administrator by the court.[8]
We note that the Court of Appeals found that in this case "the decedent left no debts and
the heirs and legatees are all of age."[9] With this finding, it is our view that Section 1,
Rule 74 of the Rules of Court should apply.
In a last-ditch effort to justify the need for an administrator, petitioner insists that there is
nothing to partition yet, as the nature and character of the estate have yet to be
determined. We find, however, that a complete inventory of the estate may be done
during the partition proceedings, especially since the estate has no debts. Hence, the
Court of Appeals committed no reversible error when it ruled that the lower court did not
err in converting petitioner's action for letters of administration into an action for judicial
partition. Sup rema
Nor can we sustain petitioner's argument that the order of the trial court converting an
action for letters of administration to one for judicial partition has no basis in the Rules of
Court, hence procedurally infirm. The basis for the trial court's order is Section 1, Rule 74
of the Rules of Court. It provides that in cases where the heirs disagree as to the partition
of the estate and no extrajudicial settlement is possible, then an ordinary action for
partition may be resorted to, as in this case. We have held that where the more
expeditious remedy of partition is available to the heirs, then the heirs or the majority of
them may not be compelled to submit to administration proceedings.[10] The trial court
appropriately converted petitioner's action for letters of administration into a suit for
judicial partition, upon motion of the private respondents. No reversible error may be
attributed to the Court of Appeals when it found the trial court's action procedurally in
order.
WHEREFORE, the petition is DENIED for lack of merit, and the assailed decision and
resolution of the Court of Appeals is CA-G.R. SP No. 31574 are AFFIRMED. Costs
against petitioner.
SO ORDERED.
Bellosillo, (Chairman), Mendoza, Buena, and De Leon, Jr., JJ., concur. Jur
G.R. No. L-1578 September 30, 1947
PEREGRINA REBONG, petitioner,
vs.
FIDEL IBAÑEZ, Judge of First Instance of Laguna, respondent.
Zosimo D. Tanalega for petitioner.
No appearance for respondent judge.
FERIA, J.:
This is a petition for certiorari against the respondent judge of the Court of First Instance
of Laguna on the ground that the latter acted in excess of jurisdiction or with grave abuse
of discretion in denying the petition for cancellation of the lien or annotation on the
certificate of title issued to the petitioner, of a land extrajudicially inherited by him as the
only heir of her predecessors in interest to the effect that the property described in the
title is subject to the claims of the creditors and other heirs of the deceased Jose Rebong
and Maria Rebong within two years from July 9, 1947, in accordance with sections 1 and
4, Rule 74 of the Rules of Court.
The petitioner based on her petition on section 112 of Act No. 496 and offered to file a
bond of P5,000, the estimated value of the above mentioned property to answer for such
contingent claims.
The pertinent part of said section 112 of Act No. 496 provides:

SEC. 112. ... Any registered owner or other person in interest may at any time
apply petition to the court, upon the ground that the registered interests of any
description, whether vested, contingent, expectant, or inchoate, have terminated
and ceased; or that new interests have arisen or been created which do not
appear upon the certificate; ... and the court shall have jurisdiction to hear and
determine the petition after notice to all parties in interest, and may order the
entry of a new certificate, the entry or cancellation of a memorandum upon a
certificate or grant any other relief upon such terms and conditions, requiring
security if necessary, as it may deem proper; . . . .
According to the above quoted provisions, the court "may order the entry of a new
certificate, the entry or cancellation of a memorandum upon a certificate or grant any
other relief upon such terms and conditions, requiring security if necessary," upon
application of a registered owner on "the ground that registered interests of any
description, whether vested, contingent, expectant, or inchoate, have terminated and
ceased, or that new interests have arisen or been created which do not appear upon the
certificate." Applying these provisions to the present case, it is evident that, since the
registered or annotated contingent interest of the creditors or other heirs of the
petitioner's predecessors in interest, established by section 4 of Rule 74 has not yet
terminated or ceased, for the period of two years from July 9, 1947, have not yet
elapsed, the respondent judge had no jurisdiction or power to order the cancellation of
said lien or annotation as prayed by the petitioner. Neither section 4, Rule 74, of the
Rules of Court, nor section 112 of Act No. 496 authorizes interest of substitution of a
bond for a lien or registered interest of any description, whether vested, expedient,
inchoate or contingent, which have not yet terminated or ceased.
In view of the foregoing it is plan that the respondent judge has not acted in excess of
jurisdiction nor with grave abuse of discretion, but in conformity with the law, in denying
the petitioner's petition, and the petition for certiorari is therefore denied.
Moran, C.J., Paras, Pablo, Hilado, Briones, Padilla, and Tuason, JJ., concur.
G.R. No. L-273 March 29, 1947
CRESENCIA HERNANDEZ, plaintiff-appellee,
vs.
ZACARIAS ANDAL, defendant-appellant.
QUIRINO DIMASACAT, MARIA HERNANDEZ and AQUILINA
HERNANDEZ, intervenors-appellants.
Pedro Pañganiban y Tolentino for appellants.
Vicente Reyes Villavicencio for appellee.
TUASON, J.:
The plaintiff, Cresencia Hernandez, the intervenors, Maria and Aquilina Hernandez, and
Pedro and Basilia Hernandez who are not parties here, are brother and sisters. They
acquired in common by descent from their father a parcel of land of which he died seized
and known as lot No. 120073 of the Batangas cadastral survey.
On January 23, 1944, the intervenors sold 1800 square meters of this parcel, a portion
which is particularly described in the deed of conveyance Exhibit A, to Zacarias Andal,
the defendant, and Andal's wife in consideration of P860. This portion purports to be the
combined shares of the intervenors in the larger parcel, allotted to them in a verbal
partition alleged to have been made (time not stated) among the five brother and sisters.
After the sale, on a date as to which the evidence is in disagreement but which is not
now important, the plaintiff attempted to repurchase the land sold to Andal. According to
her original complaint, dated February 3, 1944, she offered the purchasers P150 as price
of repurchase, this being, according to that complaint, the amount Andal had paid for
Maria Hernandez's and Aquilina Hernandez's shares, but Andal, it is alleged, refused to
part with the property.
4
On April 8, the plaintiff filed a supplemental complaint. She alleged that when the cause
was called for trial on March 8, she announced in open court that she was willing to
repurchase her sister's share from Andal for P860 and reimburse Andal for his expense;
that Andal asked for continuance until the 29th stating that he had made other expenses;
that on 29th she brought P860 to repurchase the land in question but the case was again
postponed because the plaintiff's sisters had intervened; and that meanwhile, on the
26th, Andal resold the land fictitiously to the vendors for P970.
It results that on the date last mentioned Andal executed a deed of sale for P970 in favor
of the intervenors, an amount which included Andal's expenses as well as the normal
sale price. The document of repurchase gave as reason for the transaction the fact that it
had been agreed that in the event trouble should arise the sellers should return to the
buyer what they had received and pay the latter his expenses.
On February 14, 1944, the defendant filed his answer alleging that Maria and Aquilina
Hernandez had sold him their respective portions of the inherited land for P860 and that
he had no objection to disposing of those portions in favor of the plaintiff for P860 plus
the expenses he had incurred in the execution of the deed of sale amounting to P50, but
that he was unwilling to accept P150, which was all the plaintiff offered him besides his
expenses.
On April 4, 1944, Maria and Aquilina Hernandez's answer in intervention was filed. The
intervenors alleged that there had been a partition among them and their brother and
sisters "with the share of each delineated and marked, and after partition and delineation
everyone took exclusive, separate and independent possession of his portion in the
partition." They charged the plaintiff with bad faith in that "it was upon her request for
chance that the sale to the defendant, about to take place last November, was delayed
till January of this year when she finally informed the intervenors that they could sell to
the defendant, or she could pay only P150 and could not raise the amount of P860
offered by the defendant."
Cresencia Hernandez, the plaintiff, was the only witness to testify on her own behalf.
Substantially she reiterated the allegations in her two complaints. Zacarias Andal, the
defendant, also testified. He said that he was in possession of the land in question until
he returned it to the intervenors. He declared that the plaintiff offered to repurchase the
land from him long after he had bought it, that is, when she was about to file her action.
He stated that after he came from Candelaria, Tayabas, with the document of sale he
showed it to the plaintiff: that was on the 23rd of January. He was able to do this because
he lived near Cresencia and passed by her house on his way home from Candelaria. He
said that Cresencia Hernandez upon being shown the document merely exclaimed, "Oh,
so you already have a document." When asked whether the land "described in the
complaint of the herein plaintiff has been the object of partition among the co-owners
Pedro, Basilia, Cresencia, Maria and Aquilina surnamed Hernandez," counsel for the
plaintiff objected on the ground that the best evidence was the document of partition, and
the objection was sustained. The same objection and the same ruling were made on the
same ground when the witness was queried how it was that the land he had bought from
Maria and Aquilina Hernandez had been specified in the deed of sale, Exhibit A.
In consequence of this ruling, counsel for the defendant and intervenors did not call any
more witnesses but only announced that he had witnesses ready to prove that a parol
partition among the five brother and sisters had been made, mentioning the names of six
such witnesses. Counsel for the plaintiff again objected asserting that "under the Rules of
Court agreement affecting real estate may not be proved except by means of writing
subscribed by the person against whom the proof is offered. "Upon this objection, the
court ruled that under Rules 74 and 123 of the Rules of Court (Statute of Frauds) as well
as under article 1248 of the Civil Code, parol evidence of partition was inadmissible,
adding that to decide the case it had enough with the testimony and evidence offered by
the parties.

Thereafter the court handed down its decision declaring that the resale of the land by
Zacarias Andal in favor of Maria and Aquilina Hernandez was illegal and in bad faith. It,
however, did not seem to have found as a fact the allegation that the resale was
simulated. The court then made this judgment:
(a) declarando y sin valor alguno el documento de reventaotorgado por el
demandado Zacarias Andal en 26 de marzo de 1944, a favor de Maria y
Aquilina Hernandez sobre el terrenocuestionado que se presento como Exhibito
2 de dichodemandado, y consiguientemente se anulan tambien todas
lastransacciones posteriores que las mencionadas Maria y Aquilina Hernandez
hayan hecho sobre el terreno cuestionado despuesdel 26 de marzo de 1944,
asi como tambien cualquiera anotacionen la Oficiana del Registrador de Titulos
de Batangas que hayaanotado dicha reventa por el demandado Zacarias Andal
a favorde las terceristas Maria y Aquilina Hernandez en el citado dia 26 de
marzo de 1944; y
(b) se ordena al aqui demandado Zacarias Andal, que otorgue unaescritura de
reventa a favor de la aqui demandante Cresencia Hernandez, de las
participaciones de las terceristas en el terrenodescrito en la demanda
suplementaria previo pago de P860 mas lacantidad de P50 como gastos de
documentacion. Se absuelve al demandado de los daños y perjuicios que
reclama la demandante. Se absuelve tambien a la demandante de la contra-
demanda de lasterceristas.
Sin especial pronunciamento en cuanto a las costas.
The defendant and the intervenors are appealing from the foregoing decision and in their
joint brief made one assignment of error:
The lower court erred in refusing to admit oral evidence for proving a contract of
partition among the heirs on the ground that it was not admissible.
Before proceeding with a discussion of the questions raised we are tempted to point up
some seeming incongruities in the above-quoted judgment. Although Zacarias Andal is
no longer interested in the case, as far as the land is concerned, and even though the
intervenors have become again the absolute owners and are now in full possession of
the property, while Andal has already gotten his money back, the judgment would have
Andal execute a deed of resale in favor of the plaintiff and received from her the price of
repurchase. The judgment is silent as to the intervenors with reference to the execution
of the deed of sale or the receipt of the sale price. And the lower court made no finding
and expressed no opinion as to whether the offer of P150 instead of P860, not to
mention Andal's expenses, by the plaintiff as price of repurchase was sufficient
compliance with article 1067 of the Civil Code on which the court rested the plaintiff's
cause of action.
However, in this decision we are concerned mainly with the application of section 21 of
Rule 123 and section 1 of Rule 74 both of the Rules of Court. Article 1248 of the Civil
Code has no bearing on the case.
There is a conflict of authority as to whether an agreement of partition is such a contract
as is required to be in writing under the statute of frauds. One line of authorities holds the
affirmative view; other authorities say no. The reason for the rule that excludes partition
from the operation of the statute of frauds is that partition is not a conveyance but simply
a separation and designation of that part of the land which belongs to each tenant in
common. (27 C.J., 206.) The differences in the conclusions reached are "due perhaps to
varied phraseology of the statutes" in the several states. (40 Amer. Jur., 15.) However
the case may be, as enacted in the Philippines, first in section 335 of the former Code of
Civil Procedure, and now in Rule 123, section 21, of the Rules of Court, the law has been
uniformly interpreted in a long line of cases to be applicable to executory and not to
completed or executed contracts. (27 C.J., 206.) In this jurisdiction performance of the
contract takes it out of the operation of the statute. (Gomez vs. Salcedo, 26 Phil., 485;
5
Almirol and Cariño vs. Monserrat, 48 Phil., 67.) The statute of frauds does not declare
the contracts therein enumerated void and of no legal effect, but only makes ineffective
the action for specific performance. (Almirol and Cariño vs. Monserrat, supra.) In the
United States, even in those states where the affirmative view of the question has been
followed, "the weight of authority upholds the rule that an oral partition is effective when
several possession is taken under it by the respective parties to the agreement." (27
C.J., 206.)
On general principle, independent and in spite of the statute of frauds, courts of equity
have enforced oral partition when it has been completely or partly performed.
Regardless of whether a parol partition or agreement to partition is valid and
enforceable at law, equity will in proper cases, where the parol partition has
actually been consummated by the taking of possession in severalty and the
exercise of ownership by the parties of the respective portions set off to each,
recognize and enforce such parol partition and the rights of the parties
thereunder. Thus, it has been held or stated in a number of cases involving an
oral partition under which the parties went into possession, exercised acts of
ownership, or otherwise partly performed the partition agreement, that equity
will confirm such partition and in a proper case decree title in accordance with
the possession in severalty.
In numerous cases it has been held or stated that parol partitions may be
sustained on the ground of estoppel of the parties to assert the rights of a tenant
in common as to parts of the land divided by parol partition as to which
possession in severalty was taken and acts of individual ownership were
exercised. And a court of equity will recognize the agreement and decree it to
be valid and effectual for the purpose of concluding the right of the parties as
between each other to hold their respective parts in severalty.
A parol partition may also be sustained on the ground that the parties thereto
have acquiesced in and ratified the partition by taking possession in severalty,
exercising acts of ownership with respect thereto, or otherwise recognizing the
existence of the partition.
A number of cases have specifically applied the doctrine of part performance, or
have stated that a part performance is necessary, to take a parol partition out of
the operation of the statute of frauds. It has been held that where there was a
partition in fact between tenants in common, and a part performance, a court of
equity would have regard to and enforce such partition agreed to by the parties.
(40 Amer. Jur., 15-18.)
It is on the effects of Rule 74, section 1, of the Rules of Court on a parol partition that
there are sharp divergences of opinion among the members of this Court. This section
reads:
If the decedent left no debts and the heirs and legatees are all of age, or the
minors are represented by their judicial guardians, the parties may, without
securing letters of administration, divide the estate among themselves as they
see fit by means of a public instrument file in the office of the register of deeds,
and should they disagree, they may do so in an ordinary action of partition. If
there is only one heir or one legatee, he may adjudicate to himself the entire
estate by means of an affidavit filed in the office of the register of deeds. It shall
be presumed that the decedent left no debts if no creditor files a petition for
letters of administration within two years after the death of the decedent.
It is contended that under this rule a verbal partition is entirely void and cannot be
validated by any acts of the parties short of the execution of a public document and its
registration.
As a general proposition, transactions, so far as they affect the parties, are required to be
reduced to writing either as a condition of jural validity or as a means of providing

evidence to prove the transactions. Written form exacted by the statute of frauds, for
example, "is for evidential purposes only." (Domalagan vs. Bolifer, 33 Phil., 471.) The
decisions of this Court which we have noticed were predicated on this assumption. The
Civil Code, too, requires the accomplishment of acts or contracts in a public instrument,
not in order to validate the act or contract but only to insure its efficacy so that after the
existence of the acts or contracts has been admitted, the party bound may be compelled
to execute the document. (Hawaiian Philippine Co. vs .Hernaez, 45 Phil., 746.)
Is section 1 of Rule 74 constitutive and not merely evidential of partition? In other words,
is writing the act that confers legal validity upon the agreement? There are no indications
in the phraseology of this rule which justify an affirmative answer to these questions. It
must be noted that where the law intends a writing or other formality to be the essential
requisite to the validity of the transactions it says so in clear and unequivocal terms.
Thus, the statute of frauds as originally enacted in England and as enacted in some of
the states, uses the words "utterly void" with statute transactions required to be in writing
are absolutely void and not merely voidable if not made in the manner indicated. Again
article 633 of the Civil Code says that donation may be valid only when made in a public
document. Article 146 of the Mortgage Law makes known its intention to have the
execution of a public instrument and its registration in the registry indispensable to the
validity of the contract by using this phrase: "in order that voluntary mortgages may be
legally created in a valid manner." Article 1765 of the Civil Code also employs for the
same purpose similar expression with reference to the execution of a public document:
"in order that mortgage may be validly constituted." And with respect to the formalities of
last wills and testaments, section 618 of Act No. 190 makes this emphatic statement: "No
will shall be valid to pass upon any estate real or personal nor change or affect the same,
unless it be written etc." Other examples might be mentioned.
Section 1 of Rule 74 contains no such express or clear declaration that the required
public instruments is to be constitutive of a contract of partition or an inherent element of
its effectiveness as between the parties. And this Court had no apparent reason, in
adopting this rule, to make the efficacy of a partition as between the parties dependent
on the execution of a public instrument and its registration. On the other hand, the
opposite theory is not without reasonable support. We can think of possible factors
against the proposition that a public document and its registration were contemplated as
necessary ingredients to give life to a contract of partition so that without them no oral
partition can bind the parties.
1. In the first place, the Rules of Court of which the rule under consideration forms a part
were promulgated by the Judicial Department under authority to deal with matters of
procedure exclusively. For this court to prescribe what is to be a binding agreement
between co-heirs in the settlement of their private affairs which in no way affect the rights
of third parties would be to transcends its rule-making power. We bring out this limitation
upon the authority of this court to make rules, as an aid to interpretation, as a method of
arriving at the conclusion that section 1 of Rule 74 was meant to be remedial and not a
rule of substantive law of far-reaching importance and serious juridical and practical
implications. It is to be presumed that the framers of the Rules of Court realized the
bounds of this court's functions and did not intend to trespass on purely substantive
rights of the parties to the partition. To the extent the execution and registration of a
notarized instrument are made essential elements to validity to protect innocent third
parties, the rule is legitimate and necessary; legitimate because decedent's estate are
placed under the jurisdiction of the courts to administer and distribute. The interests of
third parties eliminated, the rule loses its character as one of procedure and practice and
invades the realm of substantive law.
Section 596 of Act No. 190, which is the precursor of section 1 Rule 74, is enlightening
and instructive. The former after stating that heirs may apportion and divide the estate
among themselves as they may see fit by agreement duly executed in writing by all of
6
them, adds the words "and not otherwise." These words, in our opinion, were expressive
of an intention to make the written formality inherent element of the validity of a parol
partition. But what is far more to the point is that by logical process of deduction the
elimination from the new rule of the words "and not otherwise" imports the casting away
from the prescribed public document of its jural character which the document enjoyed in
the former code. At the same time, the inclusion of the aforesaid words in the old
provision serves to emphasize the necessity of a positive and clear language if a given
contractual formality is to be the exclusive basis of the contract's binding effect on the
parties. It is of course unnecessary to say that the attaching of jural character to the
prescribed public instrument in section 596 of Act No. 190 is no argument for contending
that such document must be clothed with the same raiment in the new Rules. Act No.
190 was a mixture of procedural and substantive provisions, having been enacted by the
legislative body itself which, unlike this court, was unhampered and untrammelled,
except by the fundamental law, in the choice of its subjects of legislation.
2. The civil law looks upon the role of public instruments in acts and contracts with
greater liberality with a view to better adaptation to human frailties and idiosyncracies. In
their blind faith in friends and relatives, in their lack of experience and foresight, and their
ignorance, men, in spite of laws, will make and continue to make verbal contracts. The
advantages of an air-tight policy concerning such contracts fall far short of compensating
for the resulting damage, injustice, inconveniences and confusion. So even though
articles 1278, 1279 and 1280 of the Civil Code have made provisions for public
instrument for all transactions and contracts whose object is the creation, modification or
extinction of real rights in immovables, it has been recognized and held that verbal
contracts may be effective between the parties. A leading case on this subject is Thunga
Chui vs. Que Bentec (2 Phil., 561), Mr. Justice Williard writing the decision. It was said in
that case that when the essential requisites for the existence of a contract are present,
the contract is binding upon the parties, and, although required to be in writing by article
1280 of the Civil Code, the plaintiff can maintain an action under article 1279 to compel
the execution of a written instrument. It says that "article 1279 does not impose an
obligation, but confers a privilege upon both contracting parties, and the fact that the
plaintiff has not made use of same does not bar his action." It further says that article
1279, far from making the enforceability of the contract dependent upon any special
intrinsic form, recognizes its enforceability by the mere act of granting the contracting
parties an adequate remedy whereby to compel the execution of public writing or any
other special form whenever such form is necessary in order that contract may produce
the effect which is desired according to whatever its object. This doctrine was iterated
and reiterated in a series of decisions perhaps longer than that on any other legal topic.
And it has been extended even to verbal contracts involving land registered under the
Torrens Act. Do the Rules of Court adhere to this salutary principle? We can perceive no
sufficient ground for the new Rules to depart from it. No considerations of public policy
enter into a partition of hereditary estate among co-heirs greater than those involved in a
contract between strangers which operates to create, transmit, modify or extinguish
property rights in land. If as between strangers the creation, transmission, modification or
extinction of real rights may be lawfully effected by parol agreement notwithstanding the
requirement that it be put in writing, the new rule could not be more intransigent when the
transaction is between co-heirs and there is no change of ownership but simply
designation and segregation of that part which belongs to each heir.
The requirement that a partition be put in a public document and registered has, in our
opinion, for its purpose the protection of creditors and at the same time the protection of
the heirs themselves against tardy claims. Note that the last sentence of the section
speaks of debts and creditors. The object of registration is to serve as constructive
notice, and this means notice to others. It must follow that the intrinsic validity of partition
not executed with the prescribed formalities does not come into play when, as in this

case, there are no creditors or the rights of creditors are not affected. No rights of
creditors being involved, it is competent for the heirs of an estate to enter into an
agreement for distribution in a manner and upon a plan different from those provided by
law.
It is said that the findings, conclusions and judgment in the appealed decision are not
assigned as errors and that for this reason the appeal should be dismissed. We do not
think that the premise of this objection is exactly correct. The evidence on parol partition
tendered by the defendant and intervenors was ruled out and they specifically complain
of this exclusion as error. In this manner the assignment of error squarely meets and
attacks the opinion and judgment of the trial court. A superficial analysis of the case will
show that on the validity of the alleged partition hangs the result of the entire litigation,
and on that validity depends in turn the competence of the excluded evidence. These two
interrelated points are the core of the whole case. All other points are incidental to and
revolve around them. If a completed oral partition may be enforced, as the defendant and
the intervenors contend and as we opine, their evidence should be allowed, and if
allowed and it establishes their allegation, the plaintiff's cause of action vanishes.
If the appellant's assignment of error be not considered a direct challenge to the decision
of the court below, we still believe that the objection takes a narrow view of practice and
procedure contrary to the liberal spirit which pervades the Rules of Court. The first
injunction of the new Rules (Rule 1, section 2) is that they "shall be liberally construed in
order to promote their object and to assist the parties in obtaining just, speedy, and
inexpensive determination of every action and proceeding." In line with the modern
trends of procedure, we are told that, "while an assignment of error which is required by
law or rule of court has been held essential to appellate review, and only those assigned
will be considered, there are a number of cases which appear to accord to the appellate
court a broad discretionary power to waive the lack of proper assignment of errors and
consider errors not assigned. And an unassigned error closely related to an error
properly assigned, or upon which the determination of the question raised by the error
properly assigned is dependent, will be considered by the appellate court notwithstanding
the failure to assign it as error." (4 C.J.S., 1734; 3 C.J., 1341, footnote 77.) At the least,
the assignment of error, viewed in this light, authorizes us to examine and pass upon the
decision of the court below.
The judgment is reversed and the case is remanded to the court of origin for further
proceeding and a new decision not incompatible with this decision, with costs of this
appeal against the appellee.
Moran, C.J., Pablo, Hilado, Bengzon, Briones, Hontiveros, and Padilla, JJ., concur.
RESOLUTION ON MOTION FOR RECONSIDERATION
July 30, 1947
TUASON, J.:
Plaintiff and appellee has filed a motion for reconsideration. She maintains that she is
entitled to judgment because the defendant has no objection to reselling her the land and
she is, on the other hand, ready to reimburse him the purchase price. She argues that
the buyer having led her to believe that he would make the resale in her favor is
estopped from going against his own acts.
Superficially, the decision is obscure as to the relation which Andal's signification in his
answer, that he was willing to sell the land to the plaintiff, bears to the dispositive part or
judgment. But read in its entirety, analyzed closely, the decision reveals in no uncertain
manner that it is anchored on articles 1067 and 1522 of the Civil Code and that all other
matters discussed therein revolve around this basic conclusion. With particular reference
to Andal's signification abovementioned, the court does not appear to have made or
7
intended to make it an affirmative, separate basis of the judgment. Roughly, the
judgment was evolved along this process of reasoning: the plaintiff's right to repurchase
the land under the above-cited provisions of the Civil Code was evident, in the court's
opinion. But, the court said in the same breath, a complication emerged. The confusion
was brought about by the resale of the property by Andal to the original owners. The
court seemed puzzled. Then it saw a way out of the perplexity; the resale was illegal
and mala fide and hence ineffective. It was illegal, mala fide and ineffective because the
defendant had stated in his answer that he had no objection in allowing the plaintiff to
buy the land, and because the resale to the intervenors had been consummated during
the pendency of the action. Andal's signification in his answer estopped him from
alienating the land in favor of others.
It was estoppel that the court invoked Andal's expression of his willingness to sell the
land, citing section 68 (a), Rule 123, Rules of Court. The court looked upon this
expression not as a cause of action standing on its own feet but merely as an equitable
aid to keep the defendant and intervenors from making a mockery of the plaintiff's right
under the aforecited articles of the Civil Code. The Court found that the transaction
between the defendant and the intervenors had been entered into "con el proposito de
desorientar al Juzgado y frustrar en cierto modo la administracion de justicia." The
appellee both in her brief and motion for reconsideration treats Andal's willingness to sell
in the same light.
To put it differently, the central principle of the case, as the court saw it, was that the
evidence on the oral partition was inadmissible and so the plaintiff's right to repurchase
the land under articles 1067 and 1522 of the Civil Code was in order. Andal's expression
of willingness to sell the land to the plaintiff came into play not as a generator of a new
obligation in favor of the plaintiff, separate and distinct from the right of co-heirs to
repurchase shares in property inherited in common and sold to strangers by other heirs,
but simply as a factor to prevent the defendant's and intervenor's attempt to nullify that
right.
Estoppel, in the sense in which the court regarded Andal's manifestation that he was
willing to sell the land to the plaintiff, partakes of the nature of the rule of evidence.
Certainly, it belongs to the adjective branch of the law, and the court regarded it under
this criterion. The court's reference in its decision to Andal's signification cannot have a
meaning other than that the court assigned thereto a subordinate role, subordinate to the
asserted right of the plaintiff under the provisions of the Civil Code referred to.
The sole assignment of error in appellant's brief thus inevitably comprehends that part of
the appealed decision and judgment which relates to the defendant's expression of
willingness to sell land to the plaintiff. A review of the error specifically assigned
necessarily carries with it the consideration of all matters related to and dependent upon
that error. Specifically, if there was a lawful partition and the partition bars the plaintiff's
right to repurchase the land under the articles relied upon, — the proposition formulated
in the assignment of error — then Andal's previous willingness to sell loses its raison
d'etre as estoppel; it disappears with the right which it was intended to uphold and with
which it was inextricably bound up.
It should be made clear that we are only construing the decision of the lower court. We
have explained the ratio decidendi as it appeared to the court, not the theory of the
parties in their pleadings. If the supplemental complaint was intended to present Andal's
offer to sell the land to the plaintiff as constituting a new and separate cause of action —
a point which cannot be determined with a fair degree of certainty from a reading of that
complaint — the court did not see or consider it in that light. And, it should be
remembered, it is what the court decided or how the court decided a case that we have
to look as a test for judging whether the questions for review have been formulated in the
right manner.

If Andal's statement in his answer was alleged by the plaintiff to serve as an independent
cause of action, that is all the more reason, for his own benefit, why the cases should be
remanded for further proceeding. The new trial as ordered in our decision leaves the
door open for the admission of evidence on the allegations in the supplementary
complaint as well as on the alleged parol partition. As matters now stand, the plaintiff
could ask for judgment on the supplementary complaint only on the untenable hypothesis
that no assignment of error has been made relative to this feature of the case. Without
the benefit of this technicality, the plaintiff has not made out a case on the supplementary
complaint. The evidence is very meager to the point of nullity; many of the allegations
have been left untouched, and there are essential points that badly need amplication or
clarification. It would be extremely improper, for obvious reasons, to go into these defects
and deficiencies in detail in this resolution in anticipation of the new trial.
The motion is denied.
Moran, C.J., Pablo, Hilado, Bengzon, Briones, Hontiveros, and Padilla, JJ., concur.
Feria, J., reserves his vote.
[G.R. No. 147468. April 9, 2003]
SPOUSES EDUARDO ARENAS DOMINGO & JOSEFINA CHAVEZ
DOMINGO, petitioners, vs. LILIA MONTINOLA ROCES, CESAR ROBERTO
M. ROCES, ANA INES MAGDALENA ROCES TOLENTINO, LUIS MIGUEL M.
ROCES, JOSE ANTONIO M. ROCES and MARIA VIDA PRESENTACION
ROCES, respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review on certiorari of the decision of the Court of Appeals
dated November 22, 2000 in CA-G.R. CV No. 62473,[1] as well as the resolution dated
March 15, 2001, denying petitioners Motion for Reconsideration. [2]
The facts are not in dispute.
The spouses Cesar and Lilia Roces were the owners of two contiguous parcels of
land located on Arayat Street, Mandaluyong, covered by Transfer Certificates of Title
Nos. 57217 and 57218.[3] On November 13, 1962, the Government Service Insurance
System (GSIS) caused the annotation of an affidavit of adverse claim on the titles
alleging that the spouses have mortgaged the same to it. [4]
Subsequently, GSIS wrote a letter to Cesar Roces demanding the surrender of the
owners duplicates of titles. When Roces failed to comply, GSIS filed a petition with the
then Court of First Instance of Rizal, docketed as Civil Case No. R-1359, praying that the
owners duplicates in Roces possession be declared null and void and that the Register
of Deeds of Pasig be directed to issue new owners duplicates to GSIS. [5] On September
5, 1977, the Court of First Instance issued an order granting the petition.[6] The order
became final and executory, and TCT Nos. 57217 (11663) and 57218 (11664) were
issued in the name of GSIS.[7]
Cesar Roces died intestate on January 26, 1980.[8] He was survived by his widow,
Lilia Roces, and their children: Cesar Roberto Roces, Ana Ines Magdalena Roces
Tolentino, Luis Miguel M. Roces, Jose Antonio Roces and Maria Vida Presentacion
Roces, all of whom are the respondents in this case.
On July 22, 1992, Reynaldo L. Montinola, a nephew of Lilia Roces, executed an
affidavit of self-adjudication over the Arayat properties. He alleged that the properties
were owned by the spouses Cesar and Lilia Roces, both of whom died intestate, on
September 13, 1987 and June 27, 1989, respectively; that the properties were acquired
during the existence of their marriage; that the spouses left no heirs except the brother of
Lilia Roces, who was his father; that neither of the spouses left any will nor any debts;
and that he was the sole heir of the Roces spouses.[9]
On January 5, 1993, Montinola filed a petition against GSIS with the Regional Trial
Court of Pasig, docketed as Civil Case No. R-4743, praying for the cancellation of TCT
8
Nos. 57217 (11663) and 57218 (11664).[10] During the trial, GSIS failed to produce any
document evidencing the alleged real estate mortgage by Roces of the properties.Hence,
the trial court rendered judgment in favor of Montinola, declaring the owners duplicates of
TCT No. 57217 (11663) and 57218 (11664) as null and void and ordering the Registry of
Deeds of Mandaluyong to issue new owners duplicates of the said titles.[11]
GSIS did not appeal the aforesaid judgment; thus, the same became final and
executory. Accordingly, the Registry of Deeds of Mandaluyong issued TCT No. 7299 in
the name of Montinola in lieu of TCT No. 57218 (11664). [12]
Sometime in July 1993, Montinola executed a deed of absolute sale of the property
covered by TCT No. 7299 in favor of petitioner spouses Eduardo and Josefina
Domingo.[13] Thereafter, TCT No. 7673 was issued in the names of petitioners.
Both TCT Nos. 7299 and 7673 contained the following annotation:
Subject to the provision of Section 4, Rule 74 of the Rules of Court with respect to the
inheritance left by the deceased SPS. CESAR ROCES & LILIA MONTINOLA.[14]
When respondents learned of the sale of the property to petitioners, they filed a
complaint against Montinola and petitioners with the Regional Trial Court of Pasig. They
argued that the affidavit of self-adjudication was fraudulent because Montinola was not
an heir of the Roces spouses and it was not true that Lilia Roces was dead. Therefore,
the affidavit of self-adjudication, as well as the deed of absolute sale, TCT No. 7299, and
TCT No. 7673, all covering the subject property, were null and void. [15]
In their answer, petitioners alleged that they were buyers in good faith and that their
action was barred by estoppel and laches.[16]
After trial, the court a quo rendered judgment in favor of respondents, the
dispositive portion of which reads:
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs against the
defendant Reynaldo L. Montinola who is hereby ordered to pay to the plaintiffs the
following sums:
a) P1,200,000.00 as actual damages, with interest thereon at the legal rate of
six (6) per centum per annum until fully paid;
b) Moral damages in the sum of P100,000.00;
c) Exemplary damages in the sum of P50,000.00;
d) Attorneys fees in the reasonable amount of P30,000.00; and costs.
The counterclaim of defendant spouses Eduardo and Josefina Domingo is dismissed and
the complaint against the Register of Deeds is likewise dismissed without costs.
SO ORDERED.[17]
Respondents appealed to the Court of Appeals, reiterating the reliefs prayed for in
their complaint below.[18] On November 22, 2000, the Court of Appeals rendered the
assailed Decision, the decretal portion of which reads:
IN THE LIGHT OF ALL THE FOREGOING, the appeal is GRANTED. The Decision of the
Court a quo appealed from is SET ASIDE AND REVERSED. Another Decision is hereby
rendered in favor of the Appellants as follows:
1. The Affidavit of Self-Adjudication (Exhibit G), Transfer Certificate of Title No.
7299 (Exhibits N and 22, Domingo), the Deed of Absolute Sale (Exhibit 20) and
Transfer Certificate of Title No. 7673 (Exhibit 21) are hereby declared null and void.
2. Transfer Certificate of Title No. 57218 (11664), under the names of Cesar P. Roces
and Lilia Montinola, is hereby reinstated.
3. The Appellees are hereby ordered to pay, jointly and severally, to the Appellants the
amount of P50,000.00 as and by way of attorneys fees.
4. Appellants claims for actual, moral and exemplary damages are dismissed.
5. The Appellee Reynaldo Montinola is hereby ordered to pay to the Appellees Spouses
Domingo the amount of P1,800,000.00, with interest thereon at the rate of 12% per
annum from the date of the Decision of this Court until the said amount is paid in full by
the said Appellee, the other cross-claims of the Appellees, inter se, are dismissed.

SO ORDERED.[19]
Petitioners filed a Motion for Reconsideration,[20] which was denied in a Resolution
dated March 15, 2000.[21] Hence this petition, raising the following errors:
1. THE COURT OF APPEALS ERRED IN HOLDING THAT THE ANNOTATION IN THE
TITLE REGARDING SEC. 4, RULE 74 IS AN ENCUMBRANCE WHICH DISQUALIFIES
PETITIONERS FROM BEING INNOCENT PURCHASERS FOR VALUE;
2. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT IT WAS
RESPONDENTS WHO MADE IT POSSIBLE FOR REYNALDO MONTINOLA TO
PERPETUATE THE FRAUD AND, THEREFORE, THEY SHOULD BE THE ONE TO
BEAR RESULTING DAMAGE;
3. THE COURT OF APPEALS ERRED IN NOT HOLDING THAT RESPONDENTS
HAVE NO EXISTING INTEREST IN THE PROPERTY SINCE IT WAS PREVIOUSLY
MORTGAGED AND FORECLOSED BY THE G.S.I.S.; AND
4. THE COURT OF APPEALS ERRED IN HOLDING PETITIONERS LIABLE TO
RESPONDENTS FOR ATTORNEYS FEES, THEREBY ADDING MORE INJURY TO
THEIR MISFORTUNE.[22]
The petition lacks merit.
It is true that one who deals with property registered under the Torrens system
need not go beyond the same, but only has to rely on the title. He is charged with notice
only of such burdens and claims as are annotated on the title. However, this principle
does not apply when the party has actual knowledge of facts and circumstances that
would impel a reasonably cautious man to make such inquiry or when the purchaser has
knowledge of a defect or the lack of title in his vendor or of sufficient facts to induce a
reasonably prudent man to inquire into the status of the title of the property in
litigation. One who falls within the exception can neither be denominated an innocent
purchaser for value nor a purchaser in good faith.[23]
As stated above, the titles, namely, TCT Nos. 7299 and 7673, contained
annotations which made reference to the provisions of Rule 74, Section 4 of the Rules of
Court, viz:
SEC. 4. Liability of distributees and estate. If it shall appear at any time within two (2)
years after the settlement and distribution of an estate in accordance with the provisions
of either of the first two sections of this rule, that an heir or other person has been unduly
deprived of his lawful participation in the estate, such heir or such other person may
compel the settlement of the estate in the courts in the manner hereinafter provided for
the purpose of satisfying such lawful participation. And if within the same time of two (2)
years, it shall appear that there are debts outstanding against the estate which have not
been paid, or that an heir or other person has been unduly deprived of his lawful
participation payable in money, the court having jurisdiction of the estate may, by order
for that purpose, after hearing, settle the amount of such debts or lawful participation and
order how much and in what manner each distributee shall contribute in the payment
thereof, and may issue execution, if circumstances require, against the bond provided in
the preceding section or against the real estate belonging to the deceased, or both. Such
bond and such real estate shall remain charged with a liability to creditors, heirs, or other
persons for the full period of two (2) years after such distribution, notwithstanding any
transfers of real estate that may have been made.[24]
The foregoing rule clearly covers transfers of real property to any person, as long
as the deprived heir or creditor vindicates his rights within two years from the date of the
settlement and distribution of estate. Contrary to petitioners contention, the effects of this
provision are not limited to the heirs or original distributees of the estate properties, but
shall affect any transferee of the properties.
In David v. Malay,[25] it was held that the buyer of real property the title of which
contain an annotation pursuant to Rule 74, Section 4 of the Rules of Court cannot be
considered innocent purchasers for value. In the same vein, the annotation at the back of
9
TCT No. 7299 in this case referring to Rule 74, Section 4 of the Rules of Court was
sufficient notice to petitioners of the limitation on Montinolas right to dispose of the
property. The presence of an irregularity which excites or arouses suspicion should
prompt the vendee to look beyond the certificate and investigate the title of the vendor
appearing on the face thereof.[26] Purchasers of registered land are bound by the
annotations found at the back of the certificate of title. [27]
Hence, petitioners cannot be considered buyers in good faith and cannot now avoid
the consequences brought about by the application of Rule 74, Section 4 of the Rules of
Court.
Petitioners claim that respondents were guilty of laches and estoppel is likewise
untenable. Laches is the failure or neglect, for an unreasonable and unexplained length
of time, to do that which, by exercising due diligence, could or should have been done
earlier. The essential elements of laches are: (1) conduct on the part of defendant or one
under whom he claims, giving rise to the situation complained of; (2) delay in asserting
complainants right after he had knowledge of the defendants conduct and after he has an
opportunity to sue; (3) lack of knowledge or notice on the part of the defendant that the
complainant would assert the right on which he bases his suit; and (4) injury or prejudice
to the defendant in the event relief is accorded to the complainant. [28]
On the other hand, estoppel by laches arises from the negligence or omission to
assert a right within a reasonable time, warranting a presumption that the party entitled to
assert it either has abandoned it or declined to assert it. [29]
In the case at bar, only four months elapsed from the time respondents discovered
Montinolas fraudulent acts, sometime in May 1993, to the time they filed their complaint
on September 6, 1993. This relatively short span of time can hardly be called
unreasonable, especially considering that respondents used this period of time to
investigate the transfers of the property.[30] Delay is an indispensable requisite for a
finding of estoppel by laches, but to be barred from bringing suit on grounds of estoppel
and laches, the delay must be lengthy and unreasonable. [31] No unreasonable delay can
be attributed to respondents in this case.
WHEREFORE, in view of the foregoing, the instant petition for review is
DENIED. The decision and resolution of the Court of Appeals in CA-G.R. No. CV No.
62473 are AFFIRMED in toto.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Vitug, Carpio, and Azcuna, JJ., concur.
G.R. No. L-19060 May 29, 1964
IGNACIO GERONA, MARIA CONCEPCION GERONA, FRANCISCO GERONA and
DELFIN GERONA,petitioners,
vs.
CARMEN DE GUZMAN, JOSE DE GUZMAN, CLEMENTE DE GUZMAN,
FRANCISCO DE GUZMAN, RUSTICA DE GUZMAN, PACITA DE GUZMAN and
VICTORIA DE GUZMANrespondents.
Manuel J. Serapio for petitioners.
D. F. Castro and Associates for respondents.
CONCEPCION, J.:
Appeal by certiorari from a decision of the Court of Appeals, affirming that of the Court of
First Instance of Bulacan.
In the complaint, filed with the latter court on September 4, 1958, petitioners herein,
namely, Ignacio, Maria Concepcion, Francisco and Delfin, all surnamed Gerona, alleged
that they are the legitimate children of Domingo Gerona and Placida de Guzman; that the
latter, who died on August 9, 1941 was a legitimate daughter of Marcelo de Guzman and
his first wife, Teodora de la Cruz; that after the death of his first wife, Marcelo de Guzman
married Camila Ramos, who begot him several children, namely, respondents Carmen,
Jose, Clemente, Francisco, Rustica, Pacita and Victoria, all surnamed De Guzman; that

Marcelo de Guzman died on September 11, 1945; that subsequently, or on May 6, 1948,
respondents executed a deed of "extra-judicial settlement of the estate of the deceased
Marcelo de Guzman", fraudulently misrepresenting therein that they were the only
surviving heirs of the deceased Marcelo de Guzman, although they well knew that
petitioners were, also, his forced heirs; that respondents had thereby succeeded
fraudulently in causing the transfer certificates of title to seven (7) parcels of land, issued
in the name of said deceased, to be cancelled and new transfer certificates of title to be
issued in their own name, in the proportion of 1/7th individual interest for each; that such
fraud was discovered by the petitioners only the year before the institution of the case;
that petitioners forthwith demanded from respondents their (petitioners) share in said
properties, to the extent of 1/8th interest thereon; and that the respondents refused to
heed said demand, thereby causing damages to the petitioners. Accordingly, the latter
prayed that judgment be rendered nullifying said deed of extra-judicial settlement, insofar
as it deprives them of their participation of 1/18th of the properties in litigation; ordering
the respondents to reconvey to petitioners their aforementioned share in said properties;
ordering the register of deeds to cancel the transfer certificates of title secured by
respondents as above stated and to issue new certificates of title in the name of both the
petitioners and the respondents in the proportion of 1/8th for the former and 7/8th for the
latter; ordering the respondents to render accounts of the income of said properties and
to deliver to petitioners their lawful share therein; and sentencing respondents to pay
damages and attorney's fees.
In their answer, respondents maintained that petitioners' mother, the deceased Placida
de Guzman, was not entitled to share in the estate of Marcelo de Guzman, she being
merely a spurious child of the latter, and that petitioners' action is barred by the statute of
limitations.
After appropriate proceedings, the trial court rendered a decision finding that petitioners'
mother was a legitimate child, by first marriage, of Marcelo de Guzman; that the
properties described in the complaint belonged to the conjugal partnership of Marcelo de
Guzman and his second wife, Camila Ramos; and that petitioners' action has already
prescribed, and, accordingly, dismissing the complaint without costs. On appeal taken by
the petitioners, this decision as affirmed by the Court of Appeals, with costs against
them.
Petitioners maintain that since they and respondents are co-heirs of the deceased
Marcelo de Guzman, the present action for partition of the latter's estate is not subject to
the statute of limitations of action; that, if affected by said statute, the period of four (4)
years therein prescribed did not begin to run until actual discovery of the fraud
perpetrated by respondents, which, it is claimed, took place in 1956 or 1957; and that
accordingly, said period had not expired when the present action was commenced on
November 4, 1958.
Petitioners' contention is untenable. Although, as a general rule, an action for partition
among co-heirs does not prescribe, this is true only as long as the defendants do not
hold the property in question under an adverse title (Cordova vs. Cordova, L-9936,
January 14, 1948). The statute of limitations operates as in other cases, from the
moment such adverse title is asserted by the possessor of the property (Ramos vs.
Ramos, 45 Phil. 362; Bargayo v. Camumot, 40 Phil. 857; Castro v. Echarri, 20 Phil. 23).
When respondents executed the aforementioned deed of extra-judicial settlement stating
therein that they are the sole heirs of the late Marcelo de Guzman, and secured new
transfer certificates of title in their own name, they thereby excluded the petitioners from
the estate of the deceased, and, consequently, set up a title adverse to them. And this is
why petitioners have brought this action for the annulment of said deed upon the ground
that the same is tainted with fraud. 1äwphï1.ñët
Although, there are some decisions to the contrary (Jacinto v. Mendoza, L-12540,
February 28, 1959; Cuison v. Fernandez, L-11764, January 31, 1959; Maribiles v.
10
Quinto, L-10408, October 18, 1956; and Sevilla v. De los Angeles, L-7745, November 18,
1955), it is already settled in this jurisdiction that an action for reconveyance of real
property based upon a constructive or implied trust, resulting from fraud, may be barred
by the statute of limitations (Candelaria v. Romero, L-12149, September 30, 1960;
Alzona v. Capunita, L-10220, February 28, 1962).
Inasmuch as petitioners seek to annul the aforementioned deed of "extra-judicial
settlement" upon the ground of fraud in the execution thereof, the action therefor may be
filed within four (4) years from the discovery of the fraud (Mauricio v. Villanueva, L-
11072, September 24, 1959). Such discovery is deemed to have taken place, in the case
at bar, on June 25, 1948, when said instrument was filed with the Register of Deeds and
new certificates of title were issued in the name of respondents exclusively, for the
registration of the deed of extra-judicial settlement constitute constructive notice to the
whole world (Diaz v. Gorricho, L-11229, March 29, 1958; Avecilla v. Yatco, L-11578, May
14, 1958; J.M. Tuason & Co., Inc. v. Magdangal, L-15539, January 30, 1962; Lopez v.
Gonzaga, L-18788, January 31, 1964).
As correctly stated in the decision of the trial court:
In the light of the foregoing it must, therefore, be held that plaintiffs learned at
least constructively, of the alleged fraud committed against them by defendants
on 25 June 1948 when the deed of extra-judicial settlement of the estate of the
deceased Marcelo de Guzman was registered in the registry of deeds of
Bulacan, Plaintiffs' complaint in this case was not filed until 4 November 1958,
or more than 10 years thereafter. Plaintiff Ignacio Gerona became of age on 3
March 1948. He is deemed to have discovered defendants' fraud on 25 June
1948 and had, therefore, only 4 years from the said date within which to file this
action. Plaintiff Maria Concepcion Gerona became of age on 8 December 1949
or after the registration of the deed of extra-judicial settlement. She also had
only the remainder of the period of 4 years from December 1949 within which to
commence her action. Plaintiff Francisco Gerona became of age only on 9
January 1952 so that he was still a minor when he gained knowledge (even if
only constructive) of the deed of extra-judicial settlement on 25 June 1948.
Likewise, plaintiff Delfin Gerona became of legal age on 5 August 1954, so that
he was also still a minor at the time he gained knowledge (although
constructive) of the deed of extra-judicial settlement on 25 June 1948. Francisco
Gerona and Delfin Gerona had, therefore, two years after the removal of their
disability within which to commence their action (Section 45, paragraph 3, in
relation to Section 43, Act 190), that is, January 29, 1952, with respect to
Francisco, and 5 August 1954, with respect to Delfin.
WHEREFORE, the decision of the Court of Appeals is hereby affirmed, with costs
against petitioners herein. It is so ordered.
Bengzon, C.J., Bautista Angelo, Reyes, J.B.L., Barredo, Paredes, Regala and Makalintal,
JJ., concur.
Padilla, Labrador and Dizon, JJ., took no part.
G.R. No. L-33261 September 30, 1987
LIWALUG AMEROL, MACATANTO AMEROL, TAIB AMEROL, DIBARATUN
AMEROL, DIBARATUN, MATABALAO, MINDALANO DIBARATUN, DIPUNDUGUN
MORO, and MANUCAO MORO, petitioners,
vs.
MOLOK BAGUMBARAN, respondent.
SARMIENTO, J.:
This is a petition for review on certiorari of the decision 1 of the then Court of First
Instance of Lanao del Sur, Branch III, Marawi City, in Civil Case No. 1354, entitled,

"Molok Bagumbaran vs. Liwalug Amerol et al.," under Republic Act No. 5400, "as only
question of law is raised." 2
The only issue for resolution is the prescriptive period of an action for reconveyance of
real property which has been wrongfully or erroneously registered under the Torrens
System in another's name. In other words, what is the prescriptive period for the action to
reconvey the title to real property arising from an implied or constructive trust and,
corrolarily reference. The petitioners herein, defendants in the trial court, assert that they
have ten years to bring the action, while the respondent, plaintiff in the court below,
claims the prescriptive period is four years. The trial court ruled tor the plaintiff, now
respondent.
We reverse. We hold that the prescriptive period for such an action for reconveyance, as
this case, is ten years. The point of reference is, or the ten-year prescriptive period
commences to run from, the. date of the issuance of the certificate of title over the real
property.
There is no issue as to the facts, this case having been elevated to this Court, as
aforestated, on purely a question of law. Be that as it may, in order to satisfy
constitutional requirements as well as to place the question of law in proper perspective,
there is need to state the facts of the case. On this regard, the findings of the trial court
would best serve the stated purposes.
xxx xxx xxx
From the evidence submitted during the trial there is no dispute
concerning the fact relative to the Identity of the land in litigation. It is
commonly known as Lot No. 524, Pls-126 and technically described
and bounded in the sketch (Exh. "7 "). This is the very tract of land
alleged by the plaintiff to have been forcibly entered into by the
defendants and which plaintiff now w&s to recover possession thereof.
It has also been proven that the same lot was covered by two free
patent applications: — (l) that of defendant Liwalug Datomanong
(erroneously surnamed Amerol) which he filed on the 4th day of
September, 1953, and (2) that of Molok Bagumbaran which was filed
on December 27, 1954. There is also no question regarding the fact
that as to these two free patent applications, that of plaintiff Molok
Bagumbaran was given due course as a result of which Free Patent
No. V-19050 was issued on August 16,1955 by authority of the
President of the Philippines Ramon Magsaysay, by Jaime Ferrer,
Undersecretary of Agriculture and Natural Resources and duly
registered with the office of the Register of Deeds of the Province of
Lanao (now Lanao del Sur) in the mm year whereupon Original
Certificate of Title No. P-466 was duly issued, owner's duplicate
certificate having been furnished the herein plaintiff.
This court is also inclined to believe that defendant Liwalug
Datomanong had never known of plaintiff's free patent application on
the land in question nor was he ever notified or participated in the
administrative proceedings relative to plaintiff's free patent application.
In the meantime, since the date he purchased the land from Mandal
Tondo, said defendant has been and up to the present in con. tinuous
occupation and cultivation of the same. His co-defendants named in
the complaint are merely his tenants.
It is also incontrovertible fact that said defendant did not take
appropriate action to annul the patent and title of the plaintiff within one
year from issuance thereof and that the first step taken by him to
contest said patent and title was a formal protest (Exh. "12", p. 408,
Record) dated April 24, 1964, filed before the Bureau of Lands after
11
the lapse of Nine (9) long years from the issuance of patent in favor of
the plaintiff. The second step he took was his counterclaim contained
in his answer to the complaint in the above entitled case, which answer
was filed with this court on December 4, 1964. In said counterclaim,
defendant reiterated his stand that plaintiff secured patent on the land
by means of deceit and fraud, wherefore, defendant prayed that said
title be annulled, or, alternatively, plaintiff be ordered to reconvey the
said land to the said defendant Liwalug Datomanong.
First question to be resolved is whether or not the plaintiff is guilty of
fraud or misrepresentation in securing the Free Patent No. V-19050
covering the land in question.
Upon a thorough examination of the evidence, proofs are sufficient to
support defendant's contention that plaintiff is guilty of fraud and
misrepresentation. In the first place, proofs are abundant tending to
show that since 1952 when Mandal Tando transferred the land to said
defendant, the latter occupied, took possession thereof and cultivated
the same continuously, publicly, adversely against any claimant and in
the concept of owner up to the present; that said defendant had
introduced considerable improvements such as coconut and coffee
plantations and other fruit trees besides his farm house, a mosque,
cassava plantation and clearing and full cultivation of the entire area.
The fact of possession on the part of said defendant has been attested
to by competent and creditable witnesses like Mandal Tando who
conveyed the land to the defendant; Hadji Sirad Gomandang, the
barrio captain of Montay, Malabang, Lanao del Sur, Hadji Rasol
Maruhom and Hadji Abdulcadir Pagayawan, both of Pialot, Malabang,
Lanao del Sur who are farmers and barrio-mates of said defendant;
and also Disomnong Dimna Macabuat, an employee in the office of the
District Land Officer at Marawi City who had officially conducted
occular inspection and investigation of the premises in connection with
the protest of said defendant found thereon the above-mentioned
improvements introduced by the said defendant.
What is more, on or before filing his free patent application, plaintiff
knew that the land in question which was covered by his free patent
application was then actually occupied and cultivated by defendant
Liwalug Datomanong if not by Mandal Tando, the original occupant. Be
it remembered that Mandal Tando had transferred to defendant
Liwalug Datomanong Twenty Four (24) hectares, more than eleven
hectares of which is (sic) outside the military reservation and
designated as Lot No. 524, Pls-126 and the rest which is in the
southern portion lies within the military reservation. Now, immediately
adjacent thereto on the south is the land claimed and occupied by the
herein plaintiff also consisting of Twenty Four (24) hectares but wholly
within the military reservation. It appears that plaintiff declared this
Twenty four hectares for the first time on October 24, 1950 for taxation
purposes (Tax Declaration No. 1529, Record) and stated in said tax
declaration (Exhs. "8" and "8-A," p. 414, Record) regarding the
boundaries that the adjacent owner on the north is Mandal Tando. In
other words, plaintiff had expressly recognized the fact that Mandal
Tando is an adjacent land owner north of plaintiff's property. On
February 19, 1951 herein plaintiff revised the above-stated tax
declaration and secured another (Tax Declaration No. 1794, Exh. "9"
and "9-A," p. 413, Record) and still plaintiff stated therein that his

boundary land owner on the north is Hadji Abdul Gani. 3 [a.k.a.Liwalug
Datomanong(Amerol)]. 4
xxx xxx xxx
Notwithstanding the aforequoted findings, very unequivocal to be sure, the trial court
denied the counterclaim of the defendants, now petitioners, for the affirmative relief of
reconveyance on the ground of prescription. Said the court:
xxx xxx xxx
The patent of the plaintiff having been registered back in 1955 and in
contemplation of law registration thereof is notice to the whole world
and yet defendant exerted no effort whatsoever either to annul the title
or institute proceedings for reconveyance except in his counterclaim
contained in his answer to the complaint in this case at bar which
answer and counter-claim was filed on December 4, 1964, some nine
long years from the date of registration of the patent, defendant
unfortunately lost his right to reconveyance within the period of four (4)
years from the date of registration of said patent. 5
xxx xxx xxx
Thus, the dispositive portion of the assailed decision stated:
xxx xxx xxx
PREMISES CONSIDERED, judgment is hereby rendered as follows:
(1) declaring the herein plaintiff the registered owner of Lot No. 524,
Pls-126 and sustaining and respecting the validity of the plaintiff's
Original Certificate of Title No. P-466 covering the said land; (2)
ordering the defendants to vacate the premises of Lot No. 524; Pls-126
and deliver possession thereof to the herein plaintiff under certain
terms and conditions herein below stated; (3) denying and hereby
dismissing the counterclaim of the herein defendants and consequently
the prayer to annul the title and/or for reconveyance of the land to said
defendant Liwalug Datomanong must Likewise be denied; (4) that
before plaintiff could take possession of said premises he must
reimburse defendant Liwalug Datomanong the total sum of Six
Thousand Seven Hundred Fifty-Two Pesos and Sixty-Two Centavos
(P6,752.62) which he incurred for the necessary and useful expenses
on the land in question with the right of said defendant to retain
possession of the premises if said reimbursement be not completely
made. No pronouncement as to costs. 6
xxx xxx xxx
Hence, this petition. 7
The petitioners in their Brief 8 assign the following two errors allegedly committed by the
trial court:
I.
THE COURT ERRED IN ITS CONCLUSION OF LAW TOTHE EFFECT THAT
PETITIONERS RIGHT OF ACTION FOR RECONVEYANCE FOR VIOLATION OF AN
IMPLIED TRUST PRESCRIBED AFTER FOUR YEARS FROM THE REGISTRATION
OF THE PATENT OF RESPONDENT.
II.
THE COURT ERRED IN NOT REQUIRING THE INTRODUCTION OF EVIDENCE AS
BASIS IN THE ASSESSMENT OF THE FAIR MARKET VALUE OF THE
IMPROVEMENT INTRODUCED ON THE LAND IN GOOD FAITH BY PETITIONERS
INSTEAD OF BASING SUCH ASSESSMENT UPON PURE AND SIMPLE GUESS
WORKS AND WILD ESTIMATIONS.
The first assignment of error is well-taken as adverted to at the outset.
12
Indubitably, the act of respondent in misrepresenting that he was in actual possession
and occupation of the property in question, obtaining a patent and Original Certificate of
Title No. P- 466 in his name, created an implied trust in favor of the actual possessor of
the said property. The Civil Code provides:
ARTICLE 1456. If property is acquired through mistake or fraud, the
person obtaining it is by force of law, considered a trustee of an implied
trust for the benefit of the person from whom the property comes.
In this case, the land in question was patented and titled in respondent's name by and
through his false pretenses. Molok Bagumbaran fraudulently misrepresented that he was
the occupant and actual possessor of the land in question when he was not because it
was Liwalug Datomanong. Bagumbaran falsely pretended that there was no prior
applicant for a free patent over the land but there was — Liwalug Datomanong. By such
fraudulent acts, Molok Bagumbaran is deemed to hold the title of the property in trust and
for the benefit of petitioner Liwalug Datomanong. Notwithstanding the irrevocability of the
Torrens title already issued in the name of respondent, he, even being already the
registered owner under the Torrens system, may still be compelled under the law to
reconvey the subject property to Liwalug Datomanong. After all, the Torrens system was
not designed to shield and protect one who had committed fraud or misrepresentation
and thus holds title in bad faith. Further, contrary to the erroneous claim of the
respondent, 9 reconveyance does not work to set aside and put under review anew the
findings of facts of the Bureau of Lands. In an action for reconveyance, the decree of
registration is respected as incontrovertible. What is sought instead is the transfer of the
property, in this case the title thereof, which has been wrongfully or erroneously
registered in another person's name, to its rightful and legal owner, 10 or to one with a
better right. That is what reconveyance is all about.
Yet, the right to seek reconveyance based on an implied or constructive trust is not
absolute. It is subject to extinctive prescription. 11 Happily, both parties agree on this
point. The seeming impediment however, is that while the petitioners assert that the
action prescribes in ten years, the respondent avers that it does in only four years.
In support of his submission, the respondent invokes several cases. We have examined
the invocations and find them inapplicable. For instance, the case of Fabian vs.
Fabian, 12 relied on by the respondent, does not square with the present case. In
Fabian, the party who prayed for reconveyance was not in actual possession and
occupation of the property. It was instead the party to whom title over the property had
been issued who occupied and possessed it. Further, the litigated property had been in
the adverse possession of the registered owner for well-nigh over twenty-nine big years,
hence, reconveyance had been irretrievably lost.
Miguel vs. Court of Appeals, 13 is, likewise, inapplicable. In Miguel, the actual occupant
and possessor of the controverted parcel of land, after having been enticed by Leonor
Reyes, an ambulatory notary public, with promise of help, engaged and retained the
services of the latter to facilitate the issuance of a patent for the said land in his
(Miguel's) favor. Thus, there existed between the parties a relationship very much akin to
that of lawyer-client and which is similarly fiduciary in character. But Reyes, inspite of his
compensation of one-fifth of the yearly produce of the property, still violated the trust
reposed on him and instead worked for the issuance of the patent in the name of his own
wife. So, after the demise of Leonor Reyes, the property was fraudulently patented and
titled in his widow's favor. The reconveyance of the property was decreed by the Court
based on "breach of fiduciary relations and/or fraud." It was shown that the parties were
legally bound to each other by a bond of fiduciary trust, a bond lacking in the case at bar.
Finally, the case of Ramirez vs. Court of Appeals 14 can not be availed of because the
period of prescription was not there definitely and squarely settled. In fact, Ramirez
underscores a vacillation between the four-year and the ten-year rule. There it was
stated that "an action for relief on the ground of fraud — to which class the remedy
 13

prayed for by Paguia belong — scan only be brought within four years after accrual of the respondent, and December 4, 1964, when the period of prescription was interrupted by
right of action, or from the discovery of the fraud." If the decision just stayed pat on that the filing of the Answer cum Counterclaim, is less than ten years.
statement, there would be merit in the respondent's presentation. But Ramirez continues: The respondent also interposed as a deterrent to reconveyance the existence of a
"(I)ndepedently, however, of the alleged fraud on the part of Ramirez, the right to mortgage on the property. It is claimed by the respondent that reconveyance would not
demand a reconveyance prescribes after 10 years from accrual of the cause of action, be legally possible because the property under litigation has already been mortgaged by
June 22, 1944, the date of registration of the patent and of the issuance of OCT No. 282- him to the Development Bank of the Philippines. 19 This claim is untenable otherwise the
A in his name." 15 judgment for reconveyance could be negated at the will of the holder of the title. By the
Significantly, the three cases cited by the respondent to buttress his position and support simple expedient of constituting a mortgage or other encumbrance on the property, the
the ruling of the trial court have a common denominator, so to speak. The cause of action remedy of reconveyance would become illusory. In the instant case, the respondent
assailing the frauds committed and impugning the Torrens titles issued in those cases, all being doubly in bad faith — for applying for and obtaining a patent and the Original
accrued prior to the effectivity of the present Civil Code. The accrual of the cause of Certificate of Title therefor without being in possession of the land and for mortgaging it
action in Fabian was in 1928, in Miguel, February, 1950, and in Ramirez, 1944. It must to the Development Bank knowing that his Original Certificate of Title was issued under
be remembered that before August 30, 1950, the date of the effectivity of the new Civil false pretenses — must alone suffer the consequences.
Code, the old Code of Civil Procedure (Act No. 190) governed prescription. It provided: Besides, given the undisputed facts, we cannot consider the mortgage contracted by the
SEC. 43. Other civil actions; how limited-Civil actions other than for the respondent in favor of the Development Bank of the Philippines as valid and binding
recovery of real property can only be brought within the following against petitioner Liwalug Datomanong. It would be most unjust to saddle him, as owner
periods after the right of action accrues: of the land, with a mortgage lien not of his own making and from which he derived no
xxx xxx xxx benefit whatsoever. The consequences of the void mortgage must be left between the
3. Within four years: x x x An action for relief on the ground of fraud, mortgagor and the mortgagee. In no small measure the Development Bank of the
but the right of action in such case shall not be deemed to have Philippines might even be faulted for not making the requisite investigation on the
accrued until the discovery of the fraud; possession of the land mortgaged.
xxx xxx xxx Premises considered, we deemed it superfluous to rule on the second assignment of
In contrast, under the present Civil Code, we find that just as an implied or constructive error raised by the petitioners.
trust is an offspring of the law (Art. 1456, Civil Code), so is the corresponding obligation WHEREFORE, the petition is GRANTED and the Decision dated June 3, 1970 of the
to reconvey the property and the title thereto in favor of the true owner. In this context, then Court of First Instance of Lanao del Sur in Civil Case No. 1354 is hereby
and vis-a-vis prescription, Article 1144 of the Civil Code is applicable. ANNULLED and SET ASIDE and a new one entered ORDERING the respondent to
Article 1144. The following actions must be brought within ten years RECONVEY Original Certificate of Title No. P-466 in favor of petitioner Liwalug
from the time the right of action accrues: Datomanong, free of any encumbrance. Costs against the respondent.
(1) Upon a written contract; SO ORDERED.
(2) Upon an obligation created by law; Yap (Chairman), Melencio-Herrera and Paras, JJ., concur.
(3) Upon a judgment.
xxx xxx xxx
(Emphasis supplied)
An action for reconveyance based on an implied or constructive trust must perforce
prescribed in ten years and not otherwise. A long line of decisions of this Court, and of
very recent vintage at that, illustrates this rule. Undoubtedly, it is now well-settled that an
action for reconveyance based on an implied or constructive trust prescribes in ten years
from the issuance of the Torrens title over the property. 16 The only discordant note, it
seems, is Balbin vs. Medalla, 17 which states that the prescriptive period for a
reconveyance action is four years. However, this variance can be explained by the
erroneous reliance on Gerona vs. de Guzman. 18 But in Gerona, the fraud was
discovered on June 25, 1948, hence Section 43(3) of Act No. 190, was applied, the new
Civil Code not coming into effect until August 30, 1950 as mentioned earlier. It must be
stressed, at this juncture, that Article 1144 and Article 1456, are new provisions. They
have no counterparts in the old Civil Code or in the old Code of Civil Procedure, the latter
being then resorted to as legal basis of the four-year prescriptive period for an action for
reconveyance of title of real property acquired under false pretenses.
It is abundantly clear from all the foregoing that the action of petitioner Datomanong for
reconveyance, in the nature of a counterclaim interposed in his Answer, filed on
December 4, 1964, to the complaint for recovery of possession instituted by the
respondent, has not yet prescribed. Between August 16, 1955, the date of reference,
being the date of the issuance of the Original Certificate of Title in the name of the