G.R. No.
L-4963 January 29, 1953 The claim of the defendants that Maria Uson had relinquished her right over the lands in
MARIA USON, plaintiff-appellee,
vs.
MARIA DEL ROSARIO, CONCEPCION NEBREDA, CONRADO NEBREDA,
DOMINADOR NEBREDA, AND FAUSTINO NEBREDA, Jr., defendants-appellants.
Priscilo Evangelista for appellee.
Brigido G. Estrada for appellant.
BAUTISTA ANGELO, J.:
This is an action for recovery of the ownership and possession of five (5) parcels of land
situated in the Municipality of Labrador, Province of Pangasinan, filed by Maria Uson against
Maria del Rosario and her four children named Concepcion, Conrado, Dominador, and
Faustino, surnamed Nebreda, who are all of minor age, before the Court of First Instance of
Pangasinan.
Maria Uson was the lawful wife of Faustino Nebreda who upon his death in 1945 left the
lands involved in this litigation. Faustino Nebreda left no other heir except his widow Maria
Uson. However, plaintiff claims that when Faustino Nebreda died in 1945, his common-law
wife Maria del Rosario took possession illegally of said lands thus depriving her of their
possession and enjoyment.
Defendants in their answer set up as special defense that on February 21, 1931, Maria Uson
and her husband, the late Faustino Nebreda, executed a public document whereby they agreed
to separate as husband and wife and, in consideration of their separation, Maria Uson was
given a parcel of land by way of alimony and in return she renounced her right to inherit any
other property that may be left by her husband upon his death (Exhibit 1).
After trial, at which both parties presented their respective evidence, the court rendered
decision ordering the defendants to restore to the plaintiff the ownership and possession of the
lands in dispute without special pronouncement as to costs. Defendants interposed the present
appeal.
There is no dispute that Maria Uson, plaintiff-appellee, is the lawful wife of Faustino Nebreda,
former owner of the five parcels of lands litigated in the present case. There is likewise no
dispute that Maria del Rosario, one of the defendants-appellants, was merely a common-law
wife of the late Faustino Nebreda with whom she had four illegitimate children, her now co-
defendants. It likewise appears that Faustino Nebreda died in 1945 much prior to the
effectivity of the new Civil Code. With this background, it is evident that when Faustino
Nebreda died in 1945 the five parcels of land he was seized of at the time passed from the
moment of his death to his only heir, his widow Maria Uson (Article 657, old Civil Code).As
this Court aptly said, "The property belongs to the heirs at the moment of the death of the
ancestor as completely as if the ancestor had executed and delivered to them a deed for the
same before his death" (Ilustre vs. Alaras Frondosa, 17 Phil., 321). From that moment,
therefore, the rights of inheritance of Maria Uson over the lands in question became vested.
question because she expressly renounced to inherit any future property that her husband may
acquire and leave upon his death in the deed of separation they had entered into on February
21, 1931, cannot be entertained for the simple reason that future inheritance cannot be the
subject of a contract nor can it be renounced (1 Manresa, 123, sixth edition; Tolentino on Civil
Code, p. 12; Osorio vs. Osorio and Ynchausti Steamship Co., 41 Phil., 531).
But defendants contend that, while it is true that the four minor defendants are illegitimate
children of the late Faustino Nebreda and under the old Civil Code are not entitled to any
successional rights, however, under the new Civil Code which became in force in June, 1950,
they are given the status and rights of natural children and are entitled to the successional
rights which the law accords to the latter (article 2264 and article 287, new Civil Code), and
because these successional rights were declared for the first time in the new code, they shall be
given retroactive effect even though the event which gave rise to them may have occurred
under the prior legislation (Article 2253, new Civil Code).
There is no merit in this claim. Article 2253 above referred to provides indeed that rights
which are declared for the first time shall have retroactive effect even though the event which
gave rise to them may have occurred under the former legislation, but this is so only when the
new rights do not prejudice any vested or acquired right of the same origin. Thus, said article
provides that "if a right should be declared for the first time in this Code, it shall be effective
at once, even though the act or event which gives rise thereto may have been done or may
have occurred under the prior legislation, provided said new right does not prejudice or impair
any vested or acquired right, of the same origin." As already stated in the early part of this
decision, the right of ownership of Maria Uson over the lands in question became vested in
1945 upon the death of her late husband and this is so because of the imperative provision of
the law which commands that the rights to succession are transmitted from the moment of
death (Article 657, old Civil Code). The new right recognized by the new Civil Code in favor
of the illegitimate children of the deceased cannot, therefore, be asserted to the impairment of
the vested right of Maria Uson over the lands in dispute.
As regards the claim that Maria Uson, while her deceased husband was lying in state, in a
gesture of pity or compassion, agreed to assign the lands in question to the minor children for
the reason that they were acquired while the deceased was living with their mother and Maria
Uson wanted to assuage somewhat the wrong she has done to them, this much can be said;
apart from the fact that this claim is disputed, we are of the opinion that said assignment, if
any, partakes of the nature of a donation of real property, inasmuch as it involves no material
consideration, and in order that it may be valid it shall be made in a public document and must
be accepted either in the same document or in a separate one (Article 633, old Civil Code).
Inasmuch as this essential formality has not been followed, it results that the alleged
assignment or donation has no valid effect.
G.R. No. 59550 January 11, 1995
EDILBERTO NOEL (now PINITO W. MERCADO) as ADMINISTRATOR OF THE INTESTATE
ESTATE OF GREGORIO NANAMAN and HILARIA TABUCLIN, petitioner,
vs.
COURT OF APPEALS and JOSE C. DELESTE, respondents.
G.R. No. 60636 January 11, 1995
PINITO W. MERCADO, as SPECIAL ADMINISTRATOR OF THE INTESTATE ESTATE OF
GREGORIO NANAMAN and HILARIA TABUCLIN, petitioner,
vs.
HONORABLE COURT OF APPEALS and JOSE C. DELESTE, respondents.
QUIASON, J.:
The consolidated cases, G.R. Nos. 59550 and 60636, are petitions for review on certiorari under Rule
45 of the Revised Rules of court of the Amended Decision dated May 14, 1981 of the Court of Appeals
in CA-G.R. No. 56303-R, which affirmed in toto the decision of the Court of First Instance, Branch II,
Lanao del Norte in Special Proceedings No. 596 (II-94) in favor of Jose C. Deleste, private respondent
herein.
I The court thereafter ordered Noel, as regular administrator, to file an action to recover the 34.7-hectare
Gregorio Nanaman and Hilaria Tabuclin (Nanaman spouses) were a childless, legally-married couple.
Gregorio, however, had a child named Virgilio Nanaman by another woman. Since he was two years
old, Virgilio was reared by Gregorio and Hilaria. He was sent to school by the couple until he reached
third year of the law course.
During their marriage, Gregorio and Hilaria acquired certain property including a 34.7-hectare land in
Tambo, Iligan City on which they planted sugarcane, corn and bananas. They also lived there with
Virgilio and fifteen tenants.
On October 2, 1945, Gregorio died. Hilaria then administered the property with the help of Virgilio
enjoyed the procedure of the land to the exclusion of Juan Nanaman, the brother of Gregorio, and
Esperanza and Caridad Nanaman, Gregorio's daughters by still another woman. In 1953, Virgilio
declared the property in his name for taxation purposes under Tax Declaration No. 5534 (Exhs. 13 &
13-A). On November 1, 1952, Hilaria and Virgilio, mortgaged the 34.7-hectare land in favor of private
respondent, in consideration of the amount of P4,800.00 (Exh. 5).
On February 16, 1954, Hilaria and Virgilio executed a deed of sale over the same tract of land also in
favor of private respondent in consideration of the sum of P16,000.00 (Exh. 7). Witnesses to the sale
were the wife of Virgilio, Rosita S. Nanaman, Rufo C. Salas, the driver of private respondent, and
Remedios Pilotan. The document was notarized on February 17, 1954 and was registered with the
Register of Deeds of Iligan city on March 2, 1954. The tax declaration in the name of Virgilio was
cancelled and a new tax declaration was issued in the name of private respondent. Having discovered
that the property was in arrears in the payment of taxes from 1952, private respondent paid the taxes
for 1952, 1953 and 1954 (Exhs. 13-B, 13-C & 14-B). From then on, private respondent has paid the
taxes on the property.
On May 15, 1954, Hilaria died. On October 27, 1954, Esperanza and Caridad Nanaman filed intestate
estate proceedings concerning the estate of their father, Gregorio. Included in the list of property of the
estate was the 34.7-hectare land. Inasmuch as only Esperanza, Caridad and Virgilio Nanaman were
named as heirs of Gregorio in the petition, Juan Nanaman, Gregorio's brother, opposed it. On
November 26, 1954, the petition was amended to include the estate of Hilaria with Alejo Tabuclin,
Hilaria's brother, and Julio Tabuclin, a son of Hilaria's deceased brother, Jose, as additional petitioners.
Having been appointed special administrator of the estate of the Nanaman couple, Juan Nanaman
included the 34.7-hectare land in the list of the assets of the estate.
Juan also reported that Virgilio took the amount of P350.00 from the procedure of the estate without
prior permission and that five tenants in contempt of court. Accordingly, in its Order of January 30,
1956, the probate court required private respondent and said tenants to appear before it and "show
cause why they should not be cited for contempt for illegally interfering in the land" under special
administration.
On June 16, 1956, when Edilberto Noel took over as regular administrator of the estate, he was not
able to take possession of the land in question because it was in the possession of private respondent
and some heirs of Hilaria.
On July 18, 1957, private respondent and the heirs of the Nanaman spouses executed an amicable
settlement of the Nanaman estate. In the document, private respondent agreed "to relinquish his rights
to one-half (1/2) of the entire parcel of land in Tambo, Iligan City, indicated in item 1 under the Estate,
sold to him by Hilaria Tabuclin, in favor of all the heirs of the abovementioned intestate [estate] for the
reason that not all of the heirs of Gregorio Nanaman have signed and agreed" (G.R. No. 60636, Rollo,
p. 67). The court approved the amicable settlement but when it was questioned by some heirs, the
court set aside its approval and declared it null and void (Exh. H-1).
land from private respondent. Consequently, on April 30, 1963, Noel filed an action against private
respondent for the version of title over the 34.7-hectare land to the Nanaman estate and to order
private respondent to pay the rentals and attorney's fees to the estate.
On December 14, 1973, the trial court rendered a decision, holding that the action for annulment of the
deed of sale had prescribed in 1958 inasmuch as the sale was registered in 1954 and that Gregorio's
heirs had slept on their rights by allowing Hilaria to exercise rights of ownership over Gregorio's share
of the conjugal property after his death in 1945. On the issue that Hilaria had no authority to dispose of
one-half of the property pertaining to her husband, the trial court ruled: (1) that Hilaria in effect acted as
administratrix over the estate of Gregorio; (2) that she sold the 34.7- hectare land in order to pay the
debts of the conjugal partnership; and (3) that out of the purchase price of P16,000.00, P4,000.00 was
in payment to private respondent (who was a doctor of medicine) for medical services rendered and
medicine administered during Gregorio's ailment and P800.00 was used to pay taxes in arrears.
Noel appealed to the Court of Appeals. In its Decision of February 18, 1980, the appellate court ruled
that the transaction between Hilaria and Virgilio on one hand and private respondent on the other, was
indeed a sale. It found that no fraud, mistake or misrepresentation attended in the execution of the
deed of sale and that no proof was shown that the contract was merely a mortgage.
The appellate court, however, agreed with Noel that Hilaria could not validly sell the 37.7-hectare land
because it was conjugal property, and Hilaria could sell only her one-half share thereof.
On the issue of prescription, the appellate court ruled that since no fraud, mistake or misrepresentation
attended the execution of the deed of sale, the prescriptive period of ten years had not yet elapsed
when the action to recover the property was filed in 1963. Moreover, the appellate court held that in the
absence of proof of adverse possession by Hilaria, she should be considered as holding the property
pursuant to her usufructuary rights over the same under the provisions of the Spanish Civil Code of
1889, the law in force at the time of the death of Gregorio.
Finding that Noel's claim for rentals of P5,000.00 per annum from 1957 was uncontroverted, the
appellate court ruled that one-half thereof belonged to the estate of Gregorio. The dispositive portion of
the decision states:
WHEREFORE, the judgment appealed from is set aside and another is hereby
entered declaring the intestate estate of Gregorio Nanaman and the defendant-
appellee co-owners of the land in question in the proportion of one-half (1/2)
interest each; ordering defendant-appellee Jose C. Deleste to return to plaintiff-
appellant, as administrator of Gregorio Nanaman's estate the land in question,
and to pay plaintiff as such administrator the sum of P2,500.00 as rental of the
1/2 interest of the estate from the year 1957 until the land is returned to the
estate with legal interest from the filing of plaintiff's complaint; and, to, pay the
expenses of litigation and attorney's fees to plaintiff in the sum of P3,000.00.
Costs against the appellee, Jose C. Deleste (G.R. No. 60636, Rollo, p. 42).
Private respondent filed a motion for the reconsideration of said decision praying for the total
affirmance of the decision of the trial court. Noel also filed a motion for reconsideration praying for the
return of ownership and possession of the entire tract of land to the estate of the 34.7-hectare land.
The appellate court took into account that since Gregorio's death, Hilaria and Virgilio took physical
possession of the property and enjoyed its fruits which were delivered to them by the tenants; that
Virgilio instituted said tenants; and that he declared the property in his own name for tax purposes. The
court also ruled that the non-payment of the real estate taxes by Juan constituted abandonment of the
property and his non-filing of an action to recover the same from the time that private respondent
"usurped" the property until the filing of the complaint in 1963 by Noel amounted to laches (G.R. No.
60636, Rollo, p. 50).
Hence, the appellate court tacked "the physical possession of Hilaria and Virgilio to the possession of
the defendant for another nine (9) years up to the time the complaint was filed." It considered the
"change of conditions or relations" which had transpired in the case such as private respondent's
registration of his muniment of title over the property; the cancellation of Virgilio's tax declaration and
the issuance of another tax declaration in the name of private respondent; private respondent's
payment of taxes from 1952 "up to the present;" the execution of a new tenancy agreement between
private respondent and the tenants; and private respondent's purchase of plows, a carabao and
insecticides for use in the ricefield.
Stating that it was "proscribed from taking away property from the alert and the industrious and
dumping it into the hands and possession of one has previously slept on his rights," the appellate court
in its amended decision decreed:
WHEREFORE, Our decision of February 18, 1980 is hereby affirmed and
reiterated insofar as it upheld the regularity and due execution of the deed of sale
(Exh. A or 7) and the transaction affecting the undivided one-half portion of the
property described in par. 3 of the complaint appertaining to the share of Hilaria
Tabuclin, as evidenced by said Exh. A or 7, and is reconsidered and set aside
and another one entered affirming the decision of the lower court in all its parts,
including the award of damages and the costs of suit. No costs in this instance
(G.R. No. 60636, Rollo, p. 52).
II
Pinito W. Mercado, as new administrator of the estate, appealed to this Court, questioning the court of
Appeals' Amended Decision applying the doctrine of laches and equating the said doctrine with
acquisitive prescription (G.R. No. 59550).
Subsequently, another petition for certiorari to declare the sale to private respondent as an equitable
mortgage, was filed by Atty. Bonifacio Legaspi (G.R. No. 60636). Said counsel explained that he
represented the heirs of Hilaria while the counsel in G.R. No. 59550 represented the heirs of Gregorio
(G.R. No. 60636, Rollo, pp. 104-107). These two cases, arising as they do from the same decision of
the Court of Appeals, were consolidated in the resolution of September 2, 1991 and are herein jointly
considered.
III
There are no cogent reasons to deviate from the ruling of the Court of Appeals that the contract
involving the 34.7-hectare property was one of sale and not of mortgage in the absence of a showing
that the findings complained of are totally devoid of support in the record or that they are so glaringly
erroneous as to constitute serious abuse of discretion (Andres v. Manufacturers Hanover & Trust
Corporation, 177 SCRA 618 [1989]). It should be noted that two contracts had been executed involving
said property (the November 1, 1952 mortgage and the February 16, 1954 sale). In the absence of
proof of gross inadequacy of the price, that the sale was made with what might appear as an
inadequate consideration does not make the contract one of mortgage (Askay v. Cosalan, 46 Phil. 179
[1924]).
We find, however, that the resolution of these petitions hinges on whether Hilaria and Virgilio could
dispose of the entire property sold to private respondent and assuming that they did not have full
ownership thereof, whether the right of action to recover the share of the collateral heirs of Gregorio
had prescribed or been lost through laches.
Gregorio died in 1945 long before the effectivity of the Civil Code of the Philippines on August 30,
1950. Under Article 2263 of the said Code, "rights to the inheritance of a person who died, with or
without a will, before the effectivity of this Code, shall be governed by the Civil Code of 1889, by other
previous laws, and by the rules of Court."
Thus, succession to the estate of Gregorio was governed primarily by the provisions of the Spanish
Civil Code of 1889. Under Article 953 thereof, a spouse like Hilaria, who is survived by brothers or
sisters or children of brothers or sisters of the decedent, as is obtaining in this case, was entitled to
receive in usufruct the part of the inheritance pertaining to said heirs. Hilaria, however, had full
ownership, not merely usufruct, over the undivided half of the estate (Spanish Civil Code of 1889, Art.
493). It is only this undivided half-interest that she could validly alienate.
On the other hand, Virgilio was not an heir of Gregorio under the Spanish Civil Code of 1889. Although
he was treated as a child by the Nanaman spouses, illegitimate children who were not natural were
disqualified to inherit under the said Code (Cid v. Burnaman, 24 SCRA 434 [1968]). Article 998 of the
Civil Code of the Philippines, which gave an illegitimate child certain hereditary rights, could not benefit
Virgilio because the right of ownership of the collateral heirs of Gregorio had become vested upon his
death (Civil Code of the Philippines, Art. 2253; Uson v. Del Rosario, 92 Phil. 530 [1953]). Therefore,
Virgilio had no right at all to transfer ownership over which he did not own.
In a contract of sale, it is essential that the seller is the owner of the property he is selling. The principal
obligation of a seller is "to transfer the ownership of" the property sold (Civil Code of the Philippines,
Art. 1458). This law stems from the principle that nobody can dispose of that which does not belong to
him (Azcona v. Reyes, 59 Phil. 446 [1934]; Coronel v. Ona, 33 Phil. 456 [1916). NEMO DAT QUAD
NON HABET .
While it cannot be said that fraud attended the sale to private respondent, clearly there was a mistake
on the part of Hilaria and Virgilio in selling an undivided interest in the property which belonged to the
collateral heirs of Gregorio.
The sale, having been made in 1954, was governed by the Civil Code of the Philippines. Under Article
1456 of said Code, an implied trust was created on the one-half undivided interest over the 34.7-
hectare land in favor of the real owners.
Said Article provides: recovery of the property was filed, less than ten years had elapsed. Therefore, the action had not been
barred by prescription.
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 The ten-year prescriptive period before title to real estate shall vest by adverse possession (
from whom the property comes. prescripcion adquisitiva) is also reckoned in the case of private respondent from March 2, 1954
(Corporacion de PP. Agustinos Recoletos v. Crisostomo, 32 Phil. 427 [1915]).
In Diaz v. Gorricho, 103 Phil. 261 (1958), the Court said that Article 1456 merely expresses a rule
recognized in Gayondato v. Insular Treasurer, 49 Phil. 244 (1926). Applying said rule, the Gayondato WHEREFORE, the Amended Decision dated May 14, 1981 of the Court of Appeals is REVERSED and
court held that the buyer of a parcel of land at a public auction to satisfy a judgment against a widow SET ASIDE and the Decision dated February 18, 1980 is REINSTATED and AFFIRMED in toto.
acquired only one-half interest the land corresponding to the share of the window and the other half
belonging to the heirs of her husband became impressed with a constructive trust in behalf of said
heirs.

On the issue of prescription, we hold that the action for recovery of title or possession over the 34.7-
hectare land had not yet prescribed when the complaint was filed on April 30, 1963.

In its Amended Decision, the Court of Appeals reckoned the prescriptive period from the death of
Gregorio on October 2, 1945.

Under the law in force in 1945, the surviving spouse was given the management of the conjugal
property until the affairs of the conjugal partnership were terminated. The surviving spouse became the
owner of one-half interest of the conjugal estate in his own right. he also became a trustee with respect
to the other half for the benefit of whoever may be legally entitled to inherit the said portion. "He could
therefore no more acquire a title by prescription against those for whom he was administering the
conjugal estate than could a guardian his ward or a judicial administrator against the heirs of an estate.
. . . The surviving husband as the administrator and liquidator of the conjugal estate occupies the
position of a trustee of the highest order and is not permitted by the law to hold that estate or any
portion thereof adversely to those for whose benefit the law imposes upon him duty of administration
and liquidation" (Pamittan v. Lasam, 60 Phil. 908 [1934]).

The possession of Virgilio, his registration of the land in his name for tax purposes, his hiring of tenants
to till the land, and his enjoyment of the produce of the tenants, appear more as acts done to help
Hilaria in managing the conjugal property. There is no evidence to prove indubitably that Virgilio
asserted a claim of ownership over the property in his own right and adverse to all including Hilaria.

In the same manner, the doctrine of laches does not apply. Upon orders of the court in the intestate
proceedings, Noel, the administrator of the estate of the Nanaman spouses, immediately filed an action
to recover possession and ownership of the property. There is no evidence showing any failure or
neglect on his part, for an unreasonable and unexplained length of time, to do that which, by exercising
due diligence, could or should have been done earlier (Cristobal v. Melchor, 78 SCRA 175 [1977]). The
doctrine of stale demands would apply only where by reason of the lapse of time, "[i]t would be
inequitable to allow a party to enforce his legal rights" (Z.E. Lotho, Inc. v. Ice and cold Storage
Industries of the Philippines, Inc., 3 SCRA 744 [1961]). Moreover, this Court, except for every strong
reasons, is not disposed to sanction the application of the doctrine of laches to prejudice or defeat the
right of an owner or original transferee (Raneses v. Intermediate Appellate Court, 187 SCRA 397
[1990]).

The action to recover the undivided half-interest of the collateral heirs of Gregorio prescribes in ten
years. The cause of action is based on Article 1456 of the Civil Code of the Philippines, which made
private respondent a trustee of an implied trust in favor of the said heirs. Under Article 1144 of the Civil
Code of the Philippines, actions based upon an obligation created by law, can be brought within ten
years from the time the right of action accrues (Rosario v. Auditor General, 103 Phil. 1132 [1958]).

The ten-year prescriptive period within which the collateral heirs of Gregorio could file an action to
recover their share in the property sold to private respondent ( prescripcion extintiva) accrued only on
march 2, 1954, when the deed of sale was registered with the Register of Deeds (Cf. Arradaza v. Court
of Appeals, 170 SCRA 12 [1987]). From march 2, 1954 to April 30, 1963, when the complaint for the
G.R. No. 59550 January 11, 1995
EDILBERTO NOEL (now PINITO W. MERCADO) as ADMINISTRATOR OF THE INTESTATE
ESTATE OF GREGORIO NANAMAN and HILARIA TABUCLIN, petitioner,
vs.
COURT OF APPEALS and JOSE C. DELESTE, respondents.
G.R. No. 60636 January 11, 1995
PINITO W. MERCADO, as SPECIAL ADMINISTRATOR OF THE INTESTATE ESTATE OF
GREGORIO NANAMAN and HILARIA TABUCLIN, petitioner,
vs.
HONORABLE COURT OF APPEALS and JOSE C. DELESTE, respondents.
QUIASON, J.:
The consolidated cases, G.R. Nos. 59550 and 60636, are petitions for review on certiorari under Rule
45 of the Revised Rules of court of the Amended Decision dated May 14, 1981 of the Court of Appeals
in CA-G.R. No. 56303-R, which affirmed in toto the decision of the Court of First Instance, Branch II,
Lanao del Norte in Special Proceedings No. 596 (II-94) in favor of Jose C. Deleste, private respondent
herein.
I The court thereafter ordered Noel, as regular administrator, to file an action to recover the 34.7-hectare
Gregorio Nanaman and Hilaria Tabuclin (Nanaman spouses) were a childless, legally-married couple.
Gregorio, however, had a child named Virgilio Nanaman by another woman. Since he was two years
old, Virgilio was reared by Gregorio and Hilaria. He was sent to school by the couple until he reached
third year of the law course.
During their marriage, Gregorio and Hilaria acquired certain property including a 34.7-hectare land in
Tambo, Iligan City on which they planted sugarcane, corn and bananas. They also lived there with
Virgilio and fifteen tenants.
On October 2, 1945, Gregorio died. Hilaria then administered the property with the help of Virgilio
enjoyed the procedure of the land to the exclusion of Juan Nanaman, the brother of Gregorio, and
Esperanza and Caridad Nanaman, Gregorio's daughters by still another woman. In 1953, Virgilio
declared the property in his name for taxation purposes under Tax Declaration No. 5534 (Exhs. 13 &
13-A). On November 1, 1952, Hilaria and Virgilio, mortgaged the 34.7-hectare land in favor of private
respondent, in consideration of the amount of P4,800.00 (Exh. 5).
On February 16, 1954, Hilaria and Virgilio executed a deed of sale over the same tract of land also in
favor of private respondent in consideration of the sum of P16,000.00 (Exh. 7). Witnesses to the sale
were the wife of Virgilio, Rosita S. Nanaman, Rufo C. Salas, the driver of private respondent, and
Remedios Pilotan. The document was notarized on February 17, 1954 and was registered with the
Register of Deeds of Iligan city on March 2, 1954. The tax declaration in the name of Virgilio was
cancelled and a new tax declaration was issued in the name of private respondent. Having discovered
that the property was in arrears in the payment of taxes from 1952, private respondent paid the taxes
for 1952, 1953 and 1954 (Exhs. 13-B, 13-C & 14-B). From then on, private respondent has paid the
taxes on the property.
On May 15, 1954, Hilaria died. On October 27, 1954, Esperanza and Caridad Nanaman filed intestate
estate proceedings concerning the estate of their father, Gregorio. Included in the list of property of the
estate was the 34.7-hectare land. Inasmuch as only Esperanza, Caridad and Virgilio Nanaman were
named as heirs of Gregorio in the petition, Juan Nanaman, Gregorio's brother, opposed it. On
November 26, 1954, the petition was amended to include the estate of Hilaria with Alejo Tabuclin,
Hilaria's brother, and Julio Tabuclin, a son of Hilaria's deceased brother, Jose, as additional petitioners.
Having been appointed special administrator of the estate of the Nanaman couple, Juan Nanaman
included the 34.7-hectare land in the list of the assets of the estate.
Juan also reported that Virgilio took the amount of P350.00 from the procedure of the estate without
prior permission and that five tenants in contempt of court. Accordingly, in its Order of January 30,
1956, the probate court required private respondent and said tenants to appear before it and "show
cause why they should not be cited for contempt for illegally interfering in the land" under special
administration.
On June 16, 1956, when Edilberto Noel took over as regular administrator of the estate, he was not
able to take possession of the land in question because it was in the possession of private respondent
and some heirs of Hilaria.
On July 18, 1957, private respondent and the heirs of the Nanaman spouses executed an amicable
settlement of the Nanaman estate. In the document, private respondent agreed "to relinquish his rights
to one-half (1/2) of the entire parcel of land in Tambo, Iligan City, indicated in item 1 under the Estate,
sold to him by Hilaria Tabuclin, in favor of all the heirs of the abovementioned intestate [estate] for the
reason that not all of the heirs of Gregorio Nanaman have signed and agreed" (G.R. No. 60636, Rollo,
p. 67). The court approved the amicable settlement but when it was questioned by some heirs, the
court set aside its approval and declared it null and void (Exh. H-1).
land from private respondent. Consequently, on April 30, 1963, Noel filed an action against private
respondent for the version of title over the 34.7-hectare land to the Nanaman estate and to order
private respondent to pay the rentals and attorney's fees to the estate.
On December 14, 1973, the trial court rendered a decision, holding that the action for annulment of the
deed of sale had prescribed in 1958 inasmuch as the sale was registered in 1954 and that Gregorio's
heirs had slept on their rights by allowing Hilaria to exercise rights of ownership over Gregorio's share
of the conjugal property after his death in 1945. On the issue that Hilaria had no authority to dispose of
one-half of the property pertaining to her husband, the trial court ruled: (1) that Hilaria in effect acted as
administratrix over the estate of Gregorio; (2) that she sold the 34.7- hectare land in order to pay the
debts of the conjugal partnership; and (3) that out of the purchase price of P16,000.00, P4,000.00 was
in payment to private respondent (who was a doctor of medicine) for medical services rendered and
medicine administered during Gregorio's ailment and P800.00 was used to pay taxes in arrears.
Noel appealed to the Court of Appeals. In its Decision of February 18, 1980, the appellate court ruled
that the transaction between Hilaria and Virgilio on one hand and private respondent on the other, was
indeed a sale. It found that no fraud, mistake or misrepresentation attended in the execution of the
deed of sale and that no proof was shown that the contract was merely a mortgage.
The appellate court, however, agreed with Noel that Hilaria could not validly sell the 37.7-hectare land
because it was conjugal property, and Hilaria could sell only her one-half share thereof.
On the issue of prescription, the appellate court ruled that since no fraud, mistake or misrepresentation
attended the execution of the deed of sale, the prescriptive period of ten years had not yet elapsed
when the action to recover the property was filed in 1963. Moreover, the appellate court held that in the
absence of proof of adverse possession by Hilaria, she should be considered as holding the property
pursuant to her usufructuary rights over the same under the provisions of the Spanish Civil Code of
1889, the law in force at the time of the death of Gregorio.
Finding that Noel's claim for rentals of P5,000.00 per annum from 1957 was uncontroverted, the
appellate court ruled that one-half thereof belonged to the estate of Gregorio. The dispositive portion of
the decision states:
WHEREFORE, the judgment appealed from is set aside and another is hereby
entered declaring the intestate estate of Gregorio Nanaman and the defendant-
appellee co-owners of the land in question in the proportion of one-half (1/2)
interest each; ordering defendant-appellee Jose C. Deleste to return to plaintiff-
appellant, as administrator of Gregorio Nanaman's estate the land in question,
and to pay plaintiff as such administrator the sum of P2,500.00 as rental of the
1/2 interest of the estate from the year 1957 until the land is returned to the
estate with legal interest from the filing of plaintiff's complaint; and, to, pay the
expenses of litigation and attorney's fees to plaintiff in the sum of P3,000.00.
Costs against the appellee, Jose C. Deleste (G.R. No. 60636, Rollo, p. 42).
Private respondent filed a motion for the reconsideration of said decision praying for the total
affirmance of the decision of the trial court. Noel also filed a motion for reconsideration praying for the
return of ownership and possession of the entire tract of land to the estate of the 34.7-hectare land.
The appellate court took into account that since Gregorio's death, Hilaria and Virgilio took physical
possession of the property and enjoyed its fruits which were delivered to them by the tenants; that
Virgilio instituted said tenants; and that he declared the property in his own name for tax purposes. The
court also ruled that the non-payment of the real estate taxes by Juan constituted abandonment of the
property and his non-filing of an action to recover the same from the time that private respondent
"usurped" the property until the filing of the complaint in 1963 by Noel amounted to laches (G.R. No.
60636, Rollo, p. 50).
Hence, the appellate court tacked "the physical possession of Hilaria and Virgilio to the possession of
the defendant for another nine (9) years up to the time the complaint was filed." It considered the
"change of conditions or relations" which had transpired in the case such as private respondent's
registration of his muniment of title over the property; the cancellation of Virgilio's tax declaration and
the issuance of another tax declaration in the name of private respondent; private respondent's
payment of taxes from 1952 "up to the present;" the execution of a new tenancy agreement between
private respondent and the tenants; and private respondent's purchase of plows, a carabao and
insecticides for use in the ricefield.
Stating that it was "proscribed from taking away property from the alert and the industrious and
dumping it into the hands and possession of one has previously slept on his rights," the appellate court
in its amended decision decreed:
WHEREFORE, Our decision of February 18, 1980 is hereby affirmed and
reiterated insofar as it upheld the regularity and due execution of the deed of sale
(Exh. A or 7) and the transaction affecting the undivided one-half portion of the
property described in par. 3 of the complaint appertaining to the share of Hilaria
Tabuclin, as evidenced by said Exh. A or 7, and is reconsidered and set aside
and another one entered affirming the decision of the lower court in all its parts,
including the award of damages and the costs of suit. No costs in this instance
(G.R. No. 60636, Rollo, p. 52).
II
Pinito W. Mercado, as new administrator of the estate, appealed to this Court, questioning the court of
Appeals' Amended Decision applying the doctrine of laches and equating the said doctrine with
acquisitive prescription (G.R. No. 59550).
Subsequently, another petition for certiorari to declare the sale to private respondent as an equitable
mortgage, was filed by Atty. Bonifacio Legaspi (G.R. No. 60636). Said counsel explained that he
represented the heirs of Hilaria while the counsel in G.R. No. 59550 represented the heirs of Gregorio
(G.R. No. 60636, Rollo, pp. 104-107). These two cases, arising as they do from the same decision of
the Court of Appeals, were consolidated in the resolution of September 2, 1991 and are herein jointly
considered.
III
There are no cogent reasons to deviate from the ruling of the Court of Appeals that the contract
involving the 34.7-hectare property was one of sale and not of mortgage in the absence of a showing
that the findings complained of are totally devoid of support in the record or that they are so glaringly
erroneous as to constitute serious abuse of discretion (Andres v. Manufacturers Hanover & Trust
Corporation, 177 SCRA 618 [1989]). It should be noted that two contracts had been executed involving
said property (the November 1, 1952 mortgage and the February 16, 1954 sale). In the absence of
proof of gross inadequacy of the price, that the sale was made with what might appear as an
inadequate consideration does not make the contract one of mortgage (Askay v. Cosalan, 46 Phil. 179
[1924]).
We find, however, that the resolution of these petitions hinges on whether Hilaria and Virgilio could
dispose of the entire property sold to private respondent and assuming that they did not have full
ownership thereof, whether the right of action to recover the share of the collateral heirs of Gregorio
had prescribed or been lost through laches.
Gregorio died in 1945 long before the effectivity of the Civil Code of the Philippines on August 30,
1950. Under Article 2263 of the said Code, "rights to the inheritance of a person who died, with or
without a will, before the effectivity of this Code, shall be governed by the Civil Code of 1889, by other
previous laws, and by the rules of Court."
Thus, succession to the estate of Gregorio was governed primarily by the provisions of the Spanish
Civil Code of 1889. Under Article 953 thereof, a spouse like Hilaria, who is survived by brothers or
sisters or children of brothers or sisters of the decedent, as is obtaining in this case, was entitled to
receive in usufruct the part of the inheritance pertaining to said heirs. Hilaria, however, had full
ownership, not merely usufruct, over the undivided half of the estate (Spanish Civil Code of 1889, Art.
493). It is only this undivided half-interest that she could validly alienate.
On the other hand, Virgilio was not an heir of Gregorio under the Spanish Civil Code of 1889. Although
he was treated as a child by the Nanaman spouses, illegitimate children who were not natural were
disqualified to inherit under the said Code (Cid v. Burnaman, 24 SCRA 434 [1968]). Article 998 of the
Civil Code of the Philippines, which gave an illegitimate child certain hereditary rights, could not benefit
Virgilio because the right of ownership of the collateral heirs of Gregorio had become vested upon his
death (Civil Code of the Philippines, Art. 2253; Uson v. Del Rosario, 92 Phil. 530 [1953]). Therefore,
Virgilio had no right at all to transfer ownership over which he did not own.
In a contract of sale, it is essential that the seller is the owner of the property he is selling. The principal
obligation of a seller is "to transfer the ownership of" the property sold (Civil Code of the Philippines,
Art. 1458). This law stems from the principle that nobody can dispose of that which does not belong to
him (Azcona v. Reyes, 59 Phil. 446 [1934]; Coronel v. Ona, 33 Phil. 456 [1916). NEMO DAT QUAD
NON HABET .
While it cannot be said that fraud attended the sale to private respondent, clearly there was a mistake
on the part of Hilaria and Virgilio in selling an undivided interest in the property which belonged to the
collateral heirs of Gregorio.
The sale, having been made in 1954, was governed by the Civil Code of the Philippines. Under Article
1456 of said Code, an implied trust was created on the one-half undivided interest over the 34.7-
hectare land in favor of the real owners.
Said Article provides: of Appeals, 170 SCRA 12 [1987]). From march 2, 1954 to April 30, 1963, when the complaint
for the recovery of the property was filed, less than ten years had elapsed. Therefore, the
If property is acquired through mistake or fraud, the person obtaining it is, by action had not been barred by prescription.
force of law, considered a trustee of an implied trust for the benefit of the person
from whom the property comes.
The ten-year prescriptive period before title to real estate shall vest by adverse possession (
prescripcion adquisitiva) is also reckoned in the case of private respondent from March 2,
In Diaz v. Gorricho, 103 Phil. 261 (1958), the Court said that Article 1456 merely expresses a rule
recognized in Gayondato v. Insular Treasurer, 49 Phil. 244 (1926). Applying said rule, the Gayondato
1954 (Corporacion de PP. Agustinos Recoletos v. Crisostomo, 32 Phil. 427 [1915]).
court held that the buyer of a parcel of land at a public auction to satisfy a judgment against a widow
acquired only one-half interest the land corresponding to the share of the window and the other half WHEREFORE, the Amended Decision dated May 14, 1981 of the Court of Appeals is
belonging to the heirs of her husband became impressed with a constructive trust in behalf of said
heirs.
REVERSED and SET ASIDE and the Decision dated February 18, 1980 is REINSTATED
and AFFIRMED in toto.
On the issue of prescription, we hold that the action for recovery of title or possession over the 34.7-
hectare land had not yet prescribed when the complaint was filed on April 30, 1963. SO ORDERED.

In its Amended Decision, the Court of Appeals reckoned the prescriptive period from the death of
Gregorio on October 2, 1945.

Under the law in force in 1945, the surviving spouse was given the management of the conjugal
property until the affairs of the conjugal partnership were terminated. The surviving spouse became the
owner of one-half interest of the conjugal estate in his own right. he also became a trustee with respect
to the other half for the benefit of whoever may be legally entitled to inherit the said portion. "He could
therefore no more acquire a title by prescription against those for whom he was administering the
conjugal estate than could a guardian his ward or a judicial administrator against the heirs of an estate.
. . . The surviving husband as the administrator and liquidator of the conjugal estate occupies the
position of a trustee of the highest order and is not permitted by the law to hold that estate or any
portion thereof adversely to those for whose benefit the law imposes upon him duty of administration
and liquidation" (Pamittan v. Lasam, 60 Phil. 908 [1934]).

The possession of Virgilio, his registration of the land in his name for tax purposes, his hiring of tenants
to till the land, and his enjoyment of the produce of the tenants, appear more as acts done to help
Hilaria in managing the conjugal property. There is no evidence to prove indubitably that Virgilio
asserted a claim of ownership over the property in his own right and adverse to all including Hilaria.

In the same manner, the doctrine of laches does not apply. Upon orders of the court in the intestate
proceedings, Noel, the administrator of the estate of the Nanaman spouses, immediately filed an action
to recover possession and ownership of the property. There is no evidence showing any failure or
neglect on his part, for an unreasonable and unexplained length of time, to do that which, by exercising
due diligence, could or should have been done earlier (Cristobal v. Melchor, 78 SCRA 175 [1977]). The
doctrine of stale demands would apply only where by reason of the lapse of time, "[i]t would be
inequitable to allow a party to enforce his legal rights" (Z.E. Lotho, Inc. v. Ice and cold Storage
Industries of the Philippines, Inc., 3 SCRA 744 [1961]). Moreover, this Court, except for every strong
reasons, is not disposed to sanction the application of the doctrine of laches to prejudice or defeat the
right of an owner or original transferee (Raneses v. Intermediate Appellate Court, 187 SCRA 397
[1990]).

The action to recover the undivided half-interest of the collateral heirs of Gregorio prescribes in ten
years. The cause of action is based on Article 1456 of the Civil Code of the Philippines, which made
private respondent a trustee of an implied trust in favor of the said heirs. Under Article 1144 of the Civil
Code of the Philippines, actions based upon an obligation created by law, can be brought within ten
years from the time the right of action accrues (Rosario v. Auditor General, 103 Phil. 1132 [1958]).

The ten-year prescriptive period within which the collateral heirs of Gregorio could file an action to
recover their share in the property sold to private respondent ( prescripcion extintiva) accrued only on
march 2, 1954, when the deed of sale was registered with the Register of Deeds (Cf. Arradaza v. Court
G.R. No. 118464 December 21, 1998
HEIRS OF IGNACIO CONTI and ROSARIO CUARIO, petitioner,
vs.
COURT OF APPEALS and LYDIA S. REYES as Attorney-in-Fact of JOSEFINA S. REYES,
BERNARDITA S. PALILIO, HERMINIA S. PALILIO, REMEDIOS A. SAMPAYO,
ILUMINADA A. SAMPAYO, ENRICO A. SAMPAYO CARLOS A. SAMPAYO,
GENEROSO C. SAMPAYO, MYRNA C. SAMPAYO, ROSALINO C. SAMPAYO,
MANUEL C. SAMPAYO, DELIA A. SAMPAYO, CORAZON C. SAMPAYO, NILO C.
SAMPAYO, and LOLITA A. SAMPAYO in her own behalf and as Attorney-in-Fact of
NORMA A. SAMPAYO, respondents.
BELLOSILLO, J.:
This petition for review on certiorari seeks to reverse the 30 March 1994. Decision and 21
December 1994 Resolution of respondent Court of Appeals which upheld the right of private
respondents as heirs of Lourdes Sampayo to demand partition under Art. 494 of the Civil
Code.
Lourdes Sampayo and Ignacio Conti, married to Rosario Cuado, were the co-owners of the
property in litigation consisting of a 539-square meter lot at the corner of Zamora and
Abellanosa Streets, Lucena City, covered by TCT No. T-15374, with a house erected
thereon.1 On 17 March 1986 Lourdes Sampayo died intestate without issue. 2 Subsequently,
on 1 April 1987 private respondents Josefina S. Reyes, Bernardita S. Palilio, Herminia S.
Palilio, Remedios A. Sampayo, Iluminada A. Sampayo, Enrico A. SAMPAYO, Carlos A.
Sampayo, Gelleroso C. Sampayo, Myrna C. Sampayo, Rosalina C. Sampayo, Manuel C.
Sampayo, Delia. A. Sampayo, Corazon C. Sampayo, Nilo C. Sampayo, Lolita A. Sampayo
and Norma A. Sampayo, all represented by their Attorney-in-Fact Lydia S. Reyes, with Lolita
A. Sampayo acting also in her own behalf and as Attorney-in-Fact of Norma A. Sampayo, all
claiming to be collateral relatives of the deceased Lourdes Sampayo, filed an action for
partition and damages before RTC-Br. 54, Lucena City. 3
The spouses Ignacio Conti and Rosario Cuario refused the partition on the ground that private
respondents failed to produce any document to produce that they were the rightful heirs of
Lourdes Sampayo. 4 On 30 August 1987 Ignacio Conti died and was substituted as party-
defendant by his children Asuncion, Francisco, Milagros, Joselito, Luisito, Diego and Teresita,
all surnamed Conti. 5
At the trial, private respondents presented Lydia Sampayo Reyes and Adelaida Sampayo to
prove that they were the collateral heirs of the deceased Lourdes Sampayo and therefore
entitled to her rights as co-owner of the subject lot. Bringing with her the original copy of her
certificate of live birth showing that her father was Inocentes Reyes and her mother was
Josefina Sampayo, 6 Lydia Sampayo Reyes testified that she was one of the nieces of Lourdes
Sampayo, being the daughter of Josefina Sampayo, the only living sibling of Lourdes. Lydia
also testified that Lourdes had another sister named Remedios J. Sampayo who died in 1948,
and two brothers, Manuel J. Sampayo and Luis J. Sampayo who died in 1983 and 1960,
respectively. To prove that Josefina, Remedios, Luis and Manuel were siblings of Lourdes,
their baptismal certificates together with a photocopy of the birth certificate of Manuel
Sampayo were offered in evidence. These documents showed that their father and mother, like
Lourdes Sampayo, were Antonio Sampavo and Brigida Jaraza.
The certificates of baptism presented as part of the testimony of Lydia Sampayo Reyes were
prepared by Rev. Franklin C. Rivero who duly certified that all data therein written were in
accordance with the church records, hence, the lower left portion of the documents bearing the
seal of the church with the notation as to where the documents were logged in particular. 7
The baptismal certificates were presented in lieu of the birth certificates because the repository
of those documents, the Office of the Civil Registrar of Lucena City, had been razed by fire
On two separate occasions, 27 November 1974 and 30 August 1983, thus all civil registration
records were totally burned. 8 On the other hand, a photocopy of Manuel's birth certificate
dated 25 October 1919 (Exh. "I") 9 showed that it was issued by the Local Civil Registrar of
Lucena, Tayabas (now Lucena City).
Adelaida Sampayo, widow of Manuel Sampayo, testified that her husband Manuel was the
brother of the deceased Lourdes, and with the death of Manuel, Luis and Remedios, the only
living sibling of Lourdes was Josefina. 10
To rebut whatever rights the alleged heirs of Lourdes had over the subject lot, petitioners
presented Rosario Cuario Conti, Rosal Ladines Malundas and Rodolfo Espineli. Rosario
testified that the subject property was co-owned in equal shares by her husband Ignacio Conti
and Lourdes Sampayo and that her family (Rosario) had been staying in the subject property
since 1937. 11 In fact, she said that her late husband Ignacio Conti paid for the real estate
taxes 12 and spent for the necessary repairs and improvements thereon 13 because by
agreement Lourdes would leave her share of the property to them. 14
However, as correctly found by the trial court, no will, either testamentary or holographic, was
presented by petitioners to substantiate this claim. 15 Rosario also disclosed that when
Lourdes died her remains were taken by her-relatives from their house. 16 When cross
examined on who those relatives were, she replied that the only one she remembered was
Josefina since there were many relatives who came. When asked who Josefina's parents were,
she said she could not recall. Likewise, when asked who the parents of Lourdes were, Rosario
denied having ever known them. 17
Another witness, Rosa Ladines Malundas, narrated that she used to be the neighbor and
hairdresser of the deceased Lourdes Sampayo who told her that upon her death her share
would go to Ignacio Conti whom she considered as her brother since both of them were
"adopted" by their foster parents Gabriel Cord and Anastacia Allarey Cord, 18 although she
admitted that she did not know whether Lourdes had other relatives. 19
According to another witness, Rodolfo Espineli, he took pictures of the tombs bearing the
tombstones of Gabriel Cord and Anastacia Allarey Cord and Ignacio Conti as well as that of
Lourdes Sampayo who was supposed to have been interred beside her "adoptive" parents.
However, as revealed by Rosario during her direct examination, Lourdes was not in fact
interred there because her relatives took her remains. 20
On 4 April 1991 the trial court declared private respodents as the rightful heirs of Lourdes
Sampayo. It further ordered private respondents and petitioners to submit a project of partition
of the residential house and lot for confirmation by the court. 21
Petitioners elevated the case to the Court of Appeals contending that the trial court erred in
finding that private respondents were the heirs of Lourdes Sampayo and that they were entitled
to the partition of the lot and the improvements thereon. 22
On 30 March 1994 the Court of Appeals affirmed the assailed RTC decision and held 23
In the instant case, plaintiffs [now private respondents] were able to prove
and establish by preponderance of evidence that they are the collateral
heirs of deceased Lourdes Sampayo and therefore the lower court did not
err in ordering herein plaintiffs [now private respondents] and defendants
[now petitioners] to submit a project of partition of the residential house
and lot owned in common by the deceased Lourdes Sampayo and
defendant spouses Conti for confirmation by the court . . . . Considering
our earlier finding that the lower court did not err in declaring herein
plaintiffs [now private respondents] as heirs of deceased Sampayo and
therefore entitled to inherit her property, the argument of the appellants
[now petitioners] that the plaintiffs [now private respondents] are not
entitled, to partition is devoid of merit (insertions in 11 supplied).
Respondent court also ruled, citing Hernandez v. Padua 24 and Marabilles v. Quito, 25 that a
prior and separate judicial declaration of heirship was not necessary 26 and that private
respondents became the co-owners of the portion of the property owned and registered in the
name of Lourdes Sampayo upon her death and, consequently, entitled to the immediate
possession thereof and all other incidents/rights of ownership as provided for by law,
including the right to demand partition under Art. 777 of the Civil Code, 27 and Ilustre v.
Alaras Frondosa 28 holding that the property belongs to the heirs at the moment of death of
the decedent, as completely as if he had executed and delivered to them a deed for the same
before his death.
The appellate court subsequently denying a motion for reconsideration upheld the probative
value of the documentary and testimonial evidence of private respondents and faulted
petitioners for not having subpoenaed Josefina if they believed that she was a vital witness in
the case. 29 Hence, petitioners pursued this case arguing that a complaint for partition to claim
a supposed share of the deceased co-owner cannot prosper without prior settlement of the
latter's estate and compliance with all legal requirements especially publication, and private
respondents were not able to prove by competent evidence their relationship with the
deceased. 30
There is no merit in the petition. A prior settlement of the estate is not essential before the
heirs can commence any action originally pertaining to the deceased as we explained in
Quison v. Salud 31 —
Claro Quison died in 1902. It was proven at the trial that the present
plaintiffs are next of kin and heirs, but it is said by the appellants that they
are not entitled to maintain this action because there is no evidence that
any proceedings have been taken in court for the settlement of the estate of
Claro Quison; and that without such settlement, the heirs cannot maintain
this action. There is nothing in this point. As well by the Civil Code as by
the Code of Civil Procedure, the title to the property owned by a person
who dies intestate passes at once to his heirs. Such transmission is, under
the present law, subject to the claims of administration and the property
may be taken from the heirs for the purpose of paying debts and expenses,
but this does not prevent an immediate passage of the title, upon the death
of the intestate, from himself to his heirs. Without some showing that a
judicial administrator had been appointed in proceedings to settle the
estate of Claro Quison, the right of the; plaintiffs to maintain this action is
established.
Conformably with the foregoing and taken in conjunction with Arts. 777 and 494 32 of the
Civil Code, from the death of Lourdes Sampayo her rights as a co-owner, incidental to which
is the right to ask for partition at any time or to terminate the co-ownership, were transmitted
to her rightful heirs. In so demanding partition private respondents merely exercised the right
originally pertaining to the decedent, their predecessor-in-interest.
Petitioners' theory as to the requirement of publication would have been correct had the action
been for the partition of the estate of Lourdes Sampayo, or if we were dealing with
extrajudicial settlement by agreement between heirs and the summary settlement of estates of
small value. 33 But what private respondents are pursuing is the mere segregation of Lourdes'
one-half share which they inherited; from her through intestate succession. This is a simple
case of ordinary partition between co-owners. The applicable law in point is Sec. 1 of Rules 69
of the Rules of Court —
Sec. 1. Complaint in an action for partition of real estate. — A person
having the right to compel the partition of real estate may do so as in this
rule prescribed, setting forth in his complaint the nature and extent of his
title and an adequate description of the real estate of which partition is
demanded and joining as defendants all the other persons interested in the
property.
A cursory reading of the aforecited rule shows that publication is not required as erroneously
maintained by petitioners. There are two (2) simultaneous issues in an action for partition.
First, whether the plaintiff is indeed a co-owner of the property sought to be partitioned, and
second, if answered in the affirmative, the manner of the division of the property, i.e., what
portion should go to which co-owner. 34 Thus, in this case, we must determine whether
private respondents, by preponderance of evidence, have been able to establish that they are
co-owners by way of succession as collateral heirs of the late Lourdes Sampayo as they claim
to be, either a sister, a nephew or a niece. These, private respondents were able to prove in the
trial court as well as before respondent Court of Appeals.
Petitioners however insist that there was no such proof of filiation because: (a) mere
photocopies of birth certificates do not prove filiation; (b) certifications on non-availability of
records of birth do not prove filiation; (c) baptismal certificates do not prove filiation of
alleged collateral relatives of the deceased; and, (d) the testimonies of Lydia S. Reyes, alleged
daughter of Josefina Reyes, and Adelaida Sampayo, alleged sister-in-law of Josefina and
Lourdes, were incompetent as Lydia was made to testify on events which happened before her
birth while Adelaida testified on matters merely narrated to her. 35
We are not persuaded. Altogether, the documentary and testimonial evidence submitted that
private respondents are competent and adequate proofs that private respondents are collateral
heirs of Lourdes Sampayo. Private respondents assert that they are co-owners of one-half (1/2)
pro-indiviso share of the subject property by way of legal or intestate succession.
Succession is a mode of acquisition by vietue of which the property, rights and obligations to
the extent of the value of the inheritance of a person are transmitted through his death to
another or others either by his will or by operation of law. 36 Legal or intestate succession
takes place if a person dies without a will, or with a void will, or one which has subsequently
lost its validity. 37 If there are no descendants, ascendants, illegitimate children, or a surviving
spuoses, the collateral relatives shall succeed to the entire estate of the decedent. 38 It was
established during the trial that Lourdes died intestate and without issues. Private respondents
as sister, nephews and nieces now claim to be the collateral relatives of Lourdes.
Under Art. 172 of the Family Code, 39 the filiation of ligitimate children shall be proved by
any other means allowed by the Rules of Court and special laws, in the absence of a record of
birth or a parent's admission of such legitimate filiation in a public or private document duly
signed by the parent. Such other proof of one's filiation may be a baptismal certificate, a
judicial admission, a family Bible in which his name has been entered, common reputation
respecting his pedigree, admission by silence, the testimonies of witnesses and other kinds of
proof admissible under Rule 130 of the Rules of Court. 40 By analogy, this method of proving
filiation may also be utilized in the instant case.
Public documents are the written official acts, or records of the official act of the sovereign
authority, official bodies and tribunals, and public officers, whether of the Philippines, or of a
foreign country. 41 The baptismal certificates presented in evidence by private respondents are
public documents. Parish priests continue to be the legal custodians of the parish records and
are authorized to issue true copies, in the form of certificates, of the entries contained therein.
42
The admissibility of baptismal certificates offered by Lydia S. Reyes, absent the testimony of
the officiating priest or the official recorder, was settled in People v. Ritter, citing U.S. v. de
Vera (28 Phil.105 [1914], 43 thus.
. . . the entries made in the Registry Book may be considered as entries
made in the course of the business under Section 43 of Rule 130, which is
an exception to the hearsay rule. The baptisms administered by the church
are one of its transactions in the exercise of ecclesiastical duties and
recorded in the book of the church during this course of its business.
It may be argued that baptismal certificates are evidence only of the administration of the
sacrament, but in this case, there were four (4) baptismal certificates which, when taken
together, uniformly show that Lourdes, Josefina, Remedios and Luis had the same set of
parents, as indicated therein. Corroborated by the undisputed testimony of Adelaida Sampayo
that with the demise of Lourdes and her brothers Manuel, Luis and sister Remedios, the only
sibling left was Josefina Sampayo Reyes, such baptismal certificates have acquired evidentiary
weight to prove filiation.
Petitioners' objection to the photocopy of the certificate of birth of Manuel Sampayo was
properly discarded by the court a quo and respondent Court of Appeals. According to Sec. 3,
par. (1), Rule 130, of the Rules of Court, when the subject of inquiry is the contents of a
document, no evidence shall be admissible other than the original document itself except when
the original has been lost or destroyed or cannot be produced in court, without bad faith on the
part of the offeror. The loss or destruction of the original certificate of birth of Manuel T.
Sampayo was duly established by the certification issued by the Office of the Local Civil
Registrar of Lucena City to the effect that its office was completely destroyed by fire on 27
November 1974 and 30 August 1983, respectively, and as a consequence thereof, all civil
registration records were totally burned.
Apparently, there seems to be some merit in petitioners' contention that the testimony of
Adelaida Sampayo cannot prove filiation for being hearsay considering that there was no
declaration ante litem motam as required by the rules, i.e., that the declaration relating to
pedigree was made before the controversy occurred. Nonetheless, petitioners made no move to
dispute her testimony in open court when she was mentioning who the brothers and sisters of
Lourdes were. As correctly observed by the trial court in explicit terms, "the documentary and
testimonial evidence not were not disputed by defendants" (now petitioners). 44 Notably,
when Rosario Cuario Conti took the witness stand, she admitted that she was not aware of the
identities of the parents of the deceased. Clearly, this runs, counter to the relationship akin to
filial bonding which she professed she had enjoyed with the decedent. As wife of Ignacio
Contil, she was supposedly a "sister-in-law" of the deceased Lourdes Sampayo who regarded
Ignacio as a brother. However, in sum, we rule that all the pieces of evidence adduced, taken
together, clearly preponderate to the right of private respondents to maintain the action for
partition. Absent any reversible error in the assailed Decision and Resolution of the Court of
Appeals, this petition for review on certiorari will not lie.
WHEREFORE, the petition is DENIED. The assailed Decision dated 30 March 1994 and
Resolution dated 21 December 1994 of the Court of Appeals are AFFIRMED. Costs against
petitioners.
SO ORDERED.
G.R. No. L-4170 January 31, 1952
Intestate of the late AGUSTIN MONTILLA, SR.; PEDRO LITONJUA, a movant-
appellant,
vs.
AGUSTIN B. MONTILLA, JR., administrator-appellee;
CLAUDIO MONTILLA, oppositor-appellee.
Carlos Hilado and Jose V. Coruña for the administrator.
Jose M. Estacion for movant. Gaudencio Occeño and Jose Ur. Carbonell for oppositor.
PARAS, C.J.:
In Civil Case No. 868 of the court of First Instance of Negros Occidental, Pedro L. Litonjua
obtained a judgment against Claudio Montilla for the payment of the sum of P4,000 with legal
interest, plus costs amounting to P39.00 In due time, a writ of execution was issued, but no
property of Claudio Montilla was found which could be levied upon.
On June 12, 1950 Pedro L. Litonjua filed in special Proceeding No 32 of the Court of First
Instance of Negros Occidental, Intestate Estate of Agustin Montilla, Sr., deceased, a motion
praying that the interest, property and participation of Claudio Montilla, one of the heirs of
Agustin Montilla, Sr., in the latter's intestate estate be sold and out of the proceed the
judgment debt of Claudio Montilla in favor of Pedro L. Litonjua be paid. This motion was
opposed by Claudio Montilla and by Agustin Montilla, Jr., administrator of the intestate estate.
and which was inherited by such widow and heirs, but it is no less that only after all
the debts of the said estate have been paid can it be known what net remainder will
be left for division among the heirs, because the debts of the deceased must be paid
before his heirs can inherit. (Arts. 659 et seq. 1026, 1027, and 1032 of the civil
Code, and secs. 734 et seq., Code of Civil Code Procedure.)
An execution cannot legally be levied upon the property of an intestate succession to
pay the debts of the widow and heirs of the deceased, until the credits held against
the latter at the time of his death shall have been paid can the remaining property
that pertains to the said debtors heirs can be attached (Art. 1034, aforecited, Civil
Code.) (pp. 350-251)
The foregoing pronouncements are perfectly applicable to the case at bar, because the
appellant is not a creditor of the deceased Agustin Montilla, Sr. and he seeks to collect his
claim out of the inheritance of Claudio Montilla, an heir, before the net assets of the intestate
estate have been determined.
Wherefore, the appealed order is affirmed, and it is so ordered with costs against the appellant.

On August 7, 1950, the Court of First Instance of Negros Occidental issued an order denying
the motion. From this order Pedro L. Litonjua appealed. In the case of Ortiga Brothers and
Co. vs. Enage and Yap Tico, 18 Phil. 345, it was held that the creditor of the heirs of a
deceased person is entitled to collect his claim out of the property which pertains by
inheritance to said heirs, only after the debts of the testate or intestate succession have been
paid and when the net assets that are divisible among the heirs are known, because the debts of
the deceased must first be paid before his heirs can inherit. It was therein also held that a
person who is not a creditor of a deceased, testate or intestate, has no right to intervene either
in the proceedings brought in connection with the estate or in the settlement of the succession.
We quote hereunder pertinent passages of the decision.

A person who, having claim against a deceased person which should be considered
by the committee does not, after publication of the required notice, exhibit his claim
to the committee as provided by law, shall be barred from recovering such demand
or from pleading the same as an offset to any action, under the provisions of section
695 of the Code of Civil Procedure, excepting the case referred to in section 701 of
the same; with still less reason can one who is not a creditor of the said deceased
intervene in the proceedings relative to the latter's intestate estate and to the
settlement of his succession (article 1034 of the Civil Code), because such creditor
has no right or interest that call for the protection of the law and the courts, except in
any remainder which may be found due the heir.

It is true that Yap Tico, as the creditor of the widow and heirs of the deceased
Ildefonso, is entitled to collect what is due him out of the property left by the latter
G.R. No. L-44837 November 23, 1938
SOCORRO LEDESMA and ANA QUITCO LEDESMA, plaintiffs-appellees,
vs.
CONCHITA MCLACHLIN, ET AL., defendants-appellants.
Adriano T. de la Cruz for appellants.
Simeon Bitanga for appellees.
VILLA-REAL, J.:
This case is before us by virtue of an appeal taken by the defendants Conchita McLachlin,
Lorenzo Quitco, Jr., Sabina Quitco, Rafael Quitco and Marcela Quitco, from the decision of
the Court of First Instance of Occidental Negros, the dispositive part of which reads:
For the foregoing considerations, the court renders judgment in this case declaring
Ana Quitco Ledesma an acknowledged natural daughter of the deceased Lorenzo M.
Quitco, for legal purposes, but absolving the defendants as to the prayer in the first
cause of action that the said Ana Quitco Ledesma be declared entitled to share in the
properties left by the deceased Eusebio Quitco.
As to the second cause of action, the said defendants are ordered to pay to the
plaintiff Socorro Ledesma, jointly and severally, only the sum of one thousand five
hundred pesos(P1,500), with legal interest thereon from the filing of this complaint
until fully paid. No pronouncement is made as to the costs. So ordered.
In support of their appeal, the appellants assign the following errors allegedly committed by
the trial court in its aforesaid decision:
1. That the trial court erred in holding, that the action for the recovery of the sum of
P1,500, representing the last installment of the note Exhibit C has not yet prescribed.
2. That the trial court erred in holding that the property inherited by the defendants
from their deceased grandfather by the right of representation is subject to the debts
and obligations of their deceased father who died without any property
whatsoever.lawphi1.net
3. That the trial court erred in condemning the defendants to pay jointly and
severally the plaintiff Socorro Ledesma the sum of P1,500.
The only facts to be considered in the determination of the legal questions raised in this appeal
are those set out in the appealed decision, which have been established at the trial, namely:
In the year 1916, the plaintiff Socorro Ledesma lived maritally with Lorenzo M.
Quitco, while the latter was still single, of which relation, lasting until the year 1921,
was born a daughter who is the other plaintiff Ana Quitco Ledesma. In 1921, it
seems hat the relation between Socorro Ledesma and Lorenzo M. Quitco came to an
end, but the latter executed a deed (Exhibit A), acknowledging the plaintiff Ana
Quitco Ledesma as his natural daughter and on January 21, 1922, he issued in favor
of the plaintiff Socorro Ledesma a promissory note (Exhibit C), of the following
tenor:
P2,000. For value received I promise to pay Miss Socorro Ledesma the sum of two
thousand pesos (P2,000). Philippine currency under the following terms: Two
hundred and fifty pesos (P250) to be paid on the first day of March 1922; another
two hundred and fifty pesos (P250)to be paid on the first day of November
1922; the remaining one thousand and five hundred (P1,500) to be paid two years
from the date of the execution of this note. San Enrique, Occ. Negros, P. I., Jan. 21,
1922.
Subsequently, Lorenzo M. Quitco married the defendant Conchita McLachlin, with
whom he had four children, who are the other defendants. On March 9, 1930,
Lorenzo M. Quitco died (Exhibit 5), and, still later, that is, on December 15, 1932,
his father Eusebio Quitco also died, and as the latter left real and personal properties
upon his death, administration proceedings of said properties were instituted in this
court, the said case being known as the "Intestate of the deceased Eusebio Quitco,"
civil case No. 6153 of this court.
Upon the institution of the intestate of the deceased Eusebio Quitco and the
appointment of the committee on claims and appraisal, the plaintiff Socorro
Ledesma, on August 26, 1935, filed before said committee the aforequoted
promissory note for payment, and the commissioners, upon receipt of said
promissory note, instead of passing upon it, elevated the same to this court en
consulta (Exhibit F), and as the Honorable Jose Lopez Vito, presiding over the First
Branch, returned said consulta and refrained from giving his opinion thereon
(Exhibit C), the aforesaid commissioners on claims and appraisal, alleging lack of
jurisdiction to pass upon the claim, denied he same (Exhibit H).
On November 14, 1933 (Exhibit I), the court issued an order of declaration
of heirs in the intestate of the deceased Eusebio Quitco, and as Ana Quitco Ledesma
was not included among the declared heirs, Socorro Ledesma, as mother of Ana
Quitco Ledesma, asked for the reconsideration of said order, a petition which the
court denied. From the order denying the said petition no appeal was taken, and in
lieu thereof there was filed the complaint which gives rise to this case.
The first question to be decided in this appeal, raised in the first assignment of alleged error, is
whether or not the action to recover the sum of P1,500, representing the last installment for the
payment of the promissory note Exhibit C, has prescribed.
According to the promissory note Exhibit C, executed by the deceased Lorenzo M. Quitco, on
January 21, 1922, the last installment of P1,500 should be paid two years from the date of the
execution of said promissory note, that is, on January 21, 1924. The complaint in the present
case was filed on June 26, 1934, that is, more than ten years after he expiration of the said
period. The fact that the plaintiff Socorro Ledesma filed her claim, on August 26, 1933, with
the committee on claims and appraisal appointed in the intestate of Eusebio Quitco, does not
suspend the running of the prescriptive period of the judicial action for the recovery of said
debt, because the claim for the unpaid balance of the amount of the promissory note should no
have been presented in the intestate of Eusebio Quitco, the said deceased not being the one
who executed the same, but in the intestate of Lorenzo M. Quitco, which should have been
instituted by the said Socorro Ledesma as provided in section 642 of the Code of Civil
Procedure, authorizing a creditor to institute said case through the appointment of an
administrator for the purpose of collecting his credit. More than ten years having thus elapsed
from the expiration of the period for the payment of said debt of P1,500, the action for its
recovery has prescribed under section 43, No. 1, of the Code of Civil Procedure.

The first assignment of alleged error is, therefore, well-founded.

As to the second assignment of alleged error, consisting in that the trial court erred in holding
that the properties inherited by the defendants from their deceased grandfather by
representation are subject to the payment of debts and obligations of their deceased father,
who died without leaving any property, while it is true that under the provisions of articles 924
to 927 of the Civil Code, a children presents his father or mother who died before him in the
properties of his grandfather or grandmother, this right of representation does not make the
said child answerable for the obligations contracted by his deceased father or mother, because,
as may be seen from the provisions of the Code of Civil Procedure referring to partition of
inheritances, the inheritance is received with the benefit of inventory, that is to say, the heirs
only answer with the properties received from their predecessor. The herein defendants, as
heirs of Eusebio Quitco, in representation of their father Lorenzo M. Quitco, are not bound to
pay the indebtedness of their said father from whom they did not inherit anything.

The second assignment of alleged error is also well-founded.

Being a mere sequel of the first two assignments of alleged errors, the third assignment of
error is also well-founded.

For the foregoing considerations, we are of the opinion and so hold: (1) That the filing of a
claim before the committee on claims and appraisal, appointed in the intestate of the father, for
a monetary obligation contracted by a son who died before him, does not suspend the
prescriptive period of the judicial action for the recovery of said indebtedness; (2) that the
claim for the payment of an indebtedness contracted by a deceased person cannot be filed for
its collection before the committee on claims and appraisal, appointed in the intestate of his
father, and the propertiesinherited from the latter by the children of said deceased do not
answer for the payment of the indebtedness contracted during the lifetime of said person.

Wherefore, the appealed judgment is reversed, and the defendants are absolved from the
complaint, with the costs to the appellees. So ordered.
G.R. No. 118248 April 5, 2000
DKC HOLDINGS CORPORATION,petitioner,
vs.
COURT OF APPEALS, VICTOR U. BARTOLOME and REGISTER OF DEEDS FOR
METRO MANILA, DISTRICT III, respondents.
YNARES-SANTIAGO, J.:
This is a petition for review on certiorari seeking the reversal of the December 5, 1994
Decision of the Court of Appeals in CA-G.R. CV No. 40849 entitled "DKC Holdings
Corporation vs. Victor U. Bartolome, et al.",1 affirming in toto the January 4, 1993 Decision
of the Regional Trial Court of Valenzuela, Branch 172,2 which dismissed Civil Case No.
3337-V-90 and ordered petitioner to pay P30,000.00 as attorney's fees.
The subject of the controversy is a 14,021 square meter parcel of land located in Malinta,
Valenzuela, Metro Manila which was originally owned by private respondent Victor U.
Bartolome's deceased mother, Encarnacion Bartolome, under Transfer Certificate of Title No.
B-37615 of the Register of Deeds of Metro Manila, District III. This lot was in front of one of
the textile plants of petitioner and, as such, was seen by the latter as a potential warehouse site.
On March 16, 1988, petitioner entered into a Contract of Lease with Option to Buy with
Encarnacion Bartolome, whereby petitioner was given the option to lease or lease with
purchase the subject land, which option must be exercised within a period of two years
counted from the signing of the Contract. In turn, petitioner undertook to pay P3,000.00 a
month as consideration for the reservation of its option. Within the two-year period, petitioner
shall serve formal written notice upon the lessor Encarnacion Bartolome of its desire to
exercise its option. The contract also provided that in case petitioner chose to lease the
property, it may take actual possession of the premises. In such an event, the lease shall be for
a period of six years, renewable for another six years, and the monthly rental fee shall be
P15,000.00 for the first six years and P18,000.00 for the next six years, in case of renewal.
Petitioner regularly paid the monthly P3,000.00 provided for by the Contract to Encarnacion
until her death in January 1990. Thereafter, petitioner coursed its payment to private
respondent Victor Bartolome, being the sole heir of Encarnacion. Victor, however, refused to
accept these payments.
Meanwhile, on January 10, 1990, Victor executed an Affidavit of Self-Adjudication over all
the properties of Encarnacion, including the subject lot. Accordingly, respondent Register of
Deeds cancelled Transfer Certificate of Title No. B-37615 and issued Transfer Certificate of
Title No. V-14249 in the name of Victor Bartolome.
On March 14, 1990, petitioner served upon Victor, via registered mail, notice that it was
exercising its option to lease the property, tendering the amount of P15,000.00 as rent for the
month of March. Again, Victor refused to accept the tendered rental fee and to surrender
possession of the property to petitioner.
Petitioner thus opened Savings Account No. 1-04-02558-I-1 with the China Banking
Corporation, Cubao Branch, in the name of Victor Bartolome and deposited therein the
P15,000.00 rental fee for March as well as P6,000.00 reservation fees for the months of
February and March.
Petitioner also tried to register and annotate the Contract on the title of Victor to the property.
Although respondent Register of Deeds accepted the required fees, he nevertheless refused to
register or annotate the same or even enter it in the day book or primary register.1âwphi1.nêt
Thus, on April 23, 1990, petitioner filed a complaint for specific performance and damages
against Victor and the Register of Deeds,3 docketed as Civil Case No. 3337-V-90 which was
raffled off to Branch 171 of the Regional Trial Court of Valenzuela. Petitioner prayed for the
surrender and delivery of possession of the subject land in accordance with the Contract terms;
the surrender of title for registration and annotation thereon of the Contract; and the payment
of P500,000.00 as actual damages, P500,000.00 as moral damages, P500,000.00 as exemplary
damages and P300,000.00 as attorney's fees.
Meanwhile, on May 8, 1990, a Motion for Intervention with Motion to Dismiss4 was filed by
one Andres Lanozo, who claimed that he was and has been a tenant-tiller of the subject
property, which was agricultural riceland, for forty-five years. He questioned the jurisdiction
of the lower court over the property and invoked the Comprehensive Agrarian Reform Law to
protect his rights that would be affected by the dispute between the original parties to the case.
On May 18, 1990, the lower court issued an Order5 referring the case to the Department of
Agrarian Reform for preliminary determination and certification as to whether it was proper
for trial by said court.
On July 4, 1990, the lower court issued another Order6 referring the case to Branch 172 of the
RTC of Valenzuela which was designated to hear cases involving agrarian land, after the
Department of Agrarian Reform issued a letter-certification stating that referral to it for
preliminary determination is no longer required.
On July 16, 1990, the lower court issued an Order denying the Motion to Intervene,7 holding
that Lanozo's rights may well be ventilated in another proceeding in due time.
After trial on the merits, the RTC of Valenzuela, Branch 172 rendered its Decision on January
4, 1993, dismissing the Complaint and ordering petitioner to pay Victor P30,000.00 as
attorney's fees. On appeal to the CA, the Decision was affirmed in toto.
Hence, the instant Petition assigning the following errors:
(A)
FIRST ASSIGNMENT OF ERROR
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE
PROVISION ON THE NOTICE TO EXERCISE OPTION WAS NOT
TRANSMISSIBLE.
(B)
 SECOND ASSIGNMENT OF ERROR
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE NOTICE
OF OPTION MUST BE SERVED BY DKC UPON ENCARNACION BARTOLOME
PERSONALLY.
(C)
THIRD ASSIGNMENT OF ERROR
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE
CONTRACT WAS ONE-SIDED AND ONEROUS IN FAVOR OF DKC.
(D)
FOURTH ASSIGNMENT OF ERROR
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT THE
EXISTENCE OF A REGISTERED TENANCY WAS FATAL TO THE VALIDITY OF
THE CONTRACT.
(E)
FIFTH ASSIGNMENT OF ERROR
THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT PLAINTIFF-
APPELLANT WAS LIABLE TO DEFENDANT-APPELLEE FOR ATTORNEY'S
FEES.8
The issue to be resolved in this case is whether or not the Contract of Lease with Option to Buy
entered into by the late Encarnacion Bartolome with petitioner was terminated upon her death or
whether it binds her sole heir, Victor, even after her demise.
Both the lower court and the Court of Appeals held that the said contract was terminated upon the
death of Encarnacion Bartolome and did not bind Victor because he was not a party thereto.
Art. 1311 of the Civil Code provides, as follows —
Art. 1311. Contracts take effect only between the parties, their assigns and heirs, except
in case where the rights and obligations arising from the contract are not transmissible by
their nature, or by stipulation or by provision of law. The heir is not liable beyond the
value of the property he received from the decedent.
xxx xxx xxx
The general rule, therefore, is that heirs are bound by contracts entered into by their predecessors-in-
interest except when the rights and obligations arising therefrom are not transmissible by (1) their
nature, (2) stipulation or (3) provision of law.
In the case at bar, there is neither contractual stipulation nor legal provision making the rights and
obligations under the contract intransmissible. More importantly, the nature of the rights and
obligations therein are, by their nature, transmissible.
The nature of intransmissible rights as explained by Arturo Tolentino, an eminent civilist, is as
follows:
Among contracts which are intransmissible are those which are purely personal, either by
provision of law, such as in cases of partnerships and agency, or by the very nature of the
obligations arising therefrom, such as those requiring special personal qualifications of
the obligor. It may also be stated that contracts for the payment of money debts are not
transmitted to the heirs of a party, but constitute a charge against his estate. Thus, where
the client in a contract for professional services of a lawyer died, leaving minor heirs, and
the lawyer, instead of presenting his claim for professional services under the contract to
the probate court, substituted the minors as parties for his client, it was held that the
contract could not be enforced against the minors; the lawyer was limited to a recovery
on the basis of quantum meruit.9
In American jurisprudence, "(W)here acts stipulated in a contract require the exercise of special
knowledge, genius, skill, taste, ability, experience, judgment, discretion, integrity, or other personal
qualification of one or both parties, the agreement is of a personal nature, and terminates on the
death of the party who is required to render such service." 10
It has also been held that a good measure for determining whether a contract terminates upon the
death of one of the parties is whether it is of such a character that it may be performed by the
promissor's personal representative. Contracts to perform personal acts which cannot be as well
performed by others are discharged by the death of the promissor. Conversely, where the service or
act is of such a character that it may as well be performed by another, or where the contract, by its
terms, shows that performance by others was contemplated, death does not terminate the contract or
excuse nonperformance. 11
In the case at bar, there is no personal act required from the late Encarnacion Bartolome. Rather, the
obligation of Encarnacion in the contract to deliver possession of the subject property to petitioner
upon the exercise by the latter of its option to lease the same may very well be performed by her
heir Victor.
As early as 1903, it was held that "(H)e who contracts does so for himself and his heirs." 12 In
1952, it was ruled that if the predecessor was duty-bound to reconvey land to another, and at his
death the reconveyance had not been made, the heirs can be compelled to execute the proper deed
for reconveyance. This was grounded upon the principle that heirs cannot escape the legal
consequence of a transaction entered into by their predecessor-in-interest because they have
inherited the property subject to the liability affecting their common ancestor. 13
It is futile for Victor to insist that he is not a party to the contract because of the clear provision of
Article 1311 of the Civil Code. Indeed, being an heir of Encarnacion, there is privity of interest
between him and his deceased mother. He only succeeds to what rights his mother had and what is
valid and binding against her is also valid and binding as against him. 14 This is clear from
Parañaque Kings Enterprises vs. Court of Appeals, 15 where this Court rejected a similar defense
—
 With respect to the contention of respondent Raymundo that he is not privy to the lease
contract, not being the lessor nor the lessee referred to therein, he could thus not have
violated its provisions, but he is nevertheless a proper party. Clearly, he stepped into the
shoes of the owner-lessor of the land as, by virtue of his purchase, he assumed all the
obligations of the lessor under the lease contract. Moreover, he received benefits in the
form of rental payments. Furthermore, the complaint, as well as the petition, prayed for
the annulment of the sale of the properties to him. Both pleadings also alleged collusion
between him and respondent Santos which defeated the exercise by petitioner of its right
of first refusal.
In order then to accord complete relief to petitioner, respondent Raymundo was a
necessary, if not indispensable, party to the case. A favorable judgment for the petitioner
will necessarily affect the rights of respondent Raymundo as the buyer of the property
over which petitioner would like to assert its right of first option to buy.
In the case at bar, the subject matter of the contract is likewise a lease, which is a property right. The
death of a party does not excuse nonperformance of a contract which involves a property right, and
the rights and obligations thereunder pass to the personal representatives of the deceased. Similarly,
nonperformance is not excused by the death of the party when the other party has a property interest
in the subject matter of the contract. 16
Under both Article 1311 of the Civil Code and jurisprudence, therefore, Victor is bound by the
subject Contract of Lease with Option to Buy.
That being resolved, we now rule on the issue of whether petitioner had complied with its
obligations under the contract and with the requisites to exercise its option. The payment by
petitioner of the reservation fees during the two-year period within which it had the option to lease
or purchase the property is not disputed. In fact, the payment of such reservation fees, except those
for February and March, 1990 were admitted by Victor. 17 This is clear from the transcripts, to wit
— Valenzuela in Civil Case No. 3337-V-90 are both SET ASIDE and a new one rendered ordering
ATTY. MOJADO:
One request, Your Honor. The last payment which was allegedly made in January 1990
just indicate in that stipulation that it was issued November of 1989 and postdated
January 1990 and then we will admit all.
COURT:
All reservation fee?
ATTY. MOJADO:
Yes, Your Honor.
COURT:
All as part of the lease?
ATTY. MOJADO:
Reservation fee, Your Honor. There was no payment with respect to payment of rentals.
18
Petitioner also paid the P15,000.00 monthly rental fee on the subject property by depositing the
same in China Bank Savings Account No. 1-04-02558-I-1, in the name of Victor as the sole heir of
Encarnacion Bartolome, 19 for the months of March to July 30, 1990, or a total of five (5) months,
despite the refusal of Victor to turn over the subject property. 20
Likewise, petitioner complied with its duty to inform the other party of its intention to exercise its
option to lease through its letter dated Match 12, 1990, 21 well within the two-year period for it to
exercise its option. Considering that at that time Encarnacion Bartolome had already passed away, it
was legitimate for petitioner to have addressed its letter to her heir.1âwphi1
It appears, therefore, that the exercise by petitioner of its option to lease the subject property was
made in accordance with the contractual provisions. Concomitantly, private respondent Victor
Bartolome has the obligation to surrender possession of and lease the premises to petitioner for a
period of six (6) years, pursuant to the Contract of Lease with Option to Buy.
Coming now to the issue of tenancy, we find that this is not for this Court to pass upon in the
present petition. We note that the Motion to Intervene and to Dismiss of the alleged tenant, Andres
Lanozo, was denied by the lower court and that such denial was never made the subject of an
appeal. As the lower court stated in its Order, the alleged right of the tenant may well be ventilated
in another proceeding in due time.
WHEREFORE, in view of the foregoing, the instant Petition for Review is GRANTED. The
Decision of the Court of Appeals in CA-G.R. CV No. 40849 and that of the Regional Trial Court of
private respondent Victor Bartolome to:
(a) surrender and deliver possession of that parcel of land covered by Transfer Certificate
of Title No. V-14249 by way of lease to petitioner and to perform all obligations of his
predecessor-in-interest, Encarnacion Bartolome, under the subject Contract of Lease with
Option to Buy;
(b) surrender and deliver his copy of Transfer Certificate of Title No. V-14249 to
respondent Register of Deeds for registration and annotation thereon of the subject
Contract of Lease with Option to Buy;
(c) pay costs of suit.
Respondent Register of Deeds is, accordingly, ordered to register and annotate the subject Contract
of Lease with Option to Buy at the back of Transfer Certificate of Title No. V-14249 upon
submission by petitioner of a copy thereof to his office.
G.R. No. 103577 October 7, 1996
ROMULO A. CORONEL, ALARICO A. CORONEL, ANNETTE A. CORONEL,
ANNABELLE C. GONZALES (for herself and on behalf of Florida C. Tupper, as
attorney-in-fact), CIELITO A. CORONEL, FLORAIDA A. ALMONTE, and
CATALINA BALAIS MABANAG, petitioners,
vs.
THE COURT OF APPEALS, CONCEPCION D. ALCARAZ, and RAMONA
PATRICIA ALCARAZ, assisted by GLORIA F. NOEL as attorney-in-fact, respondents.
MELO, J.:p
The petition before us has its roots in a complaint for specific performance to compel herein
petitioners (except the last named, Catalina Balais Mabanag) to consummate the sale of a
parcel of land with its improvements located along Roosevelt Avenue in Quezon City entered
into by the parties sometime in January 1985 for the price of P1,240,000.00.
The undisputed facts of the case were summarized by respondent court in this wise:
On January 19, 1985, defendants-appellants Romulo Coronel, et al.
(hereinafter referred to as Coronels) executed a document entitled
"Receipt of Down Payment" (Exh. "A") in favor of plaintiff Ramona
Patricia Alcaraz (hereinafter referred to as Ramona) which is reproduced
hereunder:
RECEIPT OF DOWN PAYMENT
P1,240,000.00 — Total amount
50,000 — Down payment
———————————
P1,190,000.00 — Balance
Received from Miss Ramona Patricia Alcaraz of 146 Timog, Quezon City,
the sum of Fifty Thousand Pesos purchase price of our inherited house and
lot, covered by TCT No. 119627 of the Registry of Deeds of Quezon City,
in the total amount of P1,240,000.00.
We bind ourselves to effect the transfer in our names from our deceased
father, Constancio P. Coronel, the transfer certificate of title immediately
upon receipt of the down payment above-stated.
On our presentation of the TCT already in or name, We will immediately
execute the deed of absolute sale of said property and Miss Ramona
Patricia Alcaraz shall immediately pay the balance of the P1,190,000.00.
Clearly, the conditions appurtenant to the sale are the following:
1. Ramona will make a down payment of Fifty Thousand (P50,000.00)
Pesos upon execution of the document aforestated;
2. The Coronels will cause the transfer in their names of the title of the
property registered in the name of their deceased father upon receipt of the
Fifty Thousand (P50,000.00) Pesos down payment;
3. Upon the transfer in their names of the subject property, the Coronels
will execute the deed of absolute sale in favor of Ramona and the latter
will pay the former the whole balance of One Million One Hundred
Ninety Thousand (P1,190,000.00) Pesos.
On the same date (January 15, 1985), plaintiff-appellee Concepcion D.
Alcaraz (hereinafter referred to as Concepcion), mother of Ramona, paid
the down payment of Fifty Thousand (P50,000.00) Pesos (Exh. "B", Exh.
"2").
On February 6, 1985, the property originally registered in the name of the
Coronels' father was transferred in their names under TCT
No. 327043 (Exh. "D"; Exh. "4")
On February 18, 1985, the Coronels sold the property covered by TCT No.
327043 to intervenor-appellant Catalina B. Mabanag (hereinafter referred
to as Catalina) for One Million Five Hundred Eighty Thousand
(P1,580,000.00) Pesos after the latter has paid Three Hundred Thousand
(P300,000.00) Pesos (Exhs. "F-3"; Exh. "6-C")
For this reason, Coronels canceled and rescinded the contract (Exh. "A")
with Ramona by depositing the down payment paid by Concepcion in the
bank in trust for Ramona Patricia Alcaraz.
On February 22, 1985, Concepcion, et al., filed a complaint for specific
performance against the Coronels and caused the annotation of a notice of
lis pendens at the back of TCT No. 327403 (Exh. "E"; Exh. "5").
On April 2, 1985, Catalina caused the annotation of a notice of adverse
claim covering the same property with the Registry of Deeds of Quezon
City (Exh. "F"; Exh. "6").
On April 25, 1985, the Coronels executed a Deed of Absolute Sale over
the subject property in favor of Catalina (Exh. "G"; Exh. "7").
On June 5, 1985, a new title over the subject property was issued in the
name of Catalina under TCT No. 351582 (Exh. "H"; Exh. "8").
 (Rollo, pp. 134-136)
In the course of the proceedings before the trial court (Branch 83, RTC, Quezon City) the
parties agreed to submit the case for decision solely on the basis of documentary exhibits.
Thus, plaintiffs therein (now private respondents) proffered their documentary evidence
accordingly marked as Exhibits "A" through "J", inclusive of their corresponding
submarkings. Adopting these same exhibits as their own, then defendants (now petitioners)
accordingly offered and marked them as Exhibits "1" through "10", likewise inclusive of their
corresponding submarkings. Upon motion of the parties, the trial court gave them thirty (30)
days within which to simultaneously submit their respective memoranda, and an additional 15
days within which to submit their corresponding comment or reply thereof, after which, the
case would be deemed submitted for resolution.
On April 14, 1988, the case was submitted for resolution before Judge Reynaldo Roura, who
was then temporarily detailed to preside over Branch 82 of the RTC of Quezon City. On
March 1, 1989, judgment was handed down by Judge Roura from his regular bench at
Macabebe, Pampanga for the Quezon City branch, disposing as follows:
WHEREFORE, judgment for specific performance is hereby rendered
ordering defendant to execute in favor of plaintiffs a deed of absolute sale
covering that parcel of land embraced in and covered by Transfer
Certificate of Title No. 327403 (now TCT No. 331582) of the Registry of
Deeds for Quezon City, together with all the improvements existing
thereon free from all liens and encumbrances, and once accomplished, to
immediately deliver the said document of sale to plaintiffs and upon
receipt thereof, the said document of sale to plaintiffs and upon receipt
thereof, the plaintiffs are ordered to pay defendants the whole balance of
the purchase price amounting to P1,190,000.00 in cash. Transfer
Certificate of Title No. 331582 of the Registry of Deeds for Quezon City
in the name of intervenor is hereby canceled and declared to be without
force and effect. Defendants and intervenor and all other persons claiming
under them are hereby ordered to vacate the subject property and deliver
possession thereof to plaintiffs. Plaintiffs' claim for damages and
attorney's fees, as well as the counterclaims of defendants and intervenors
are hereby dismissed.
No pronouncement as to costs.
So Ordered.
Macabebe, Pampanga for Quezon City, March 1, 1989.
(Rollo, p. 106)
A motion for reconsideration was filed by petitioner before the new presiding judge of the
Quezon City RTC but the same was denied by Judge Estrella T. Estrada, thusly:
The prayer contained in the instant motion, i.e., to annul the decision and
to render anew decision by the undersigned Presiding Judge should be
denied for the following reasons: (1) The instant case became submitted
for decision as of April 14, 1988 when the parties terminated the
presentation of their respective documentary evidence and when the
Presiding Judge at that time was Judge Reynaldo Roura. The fact that they
were allowed to file memoranda at some future date did not change the
fact that the hearing of the case was terminated before Judge Roura and
therefore the same should be submitted to him for decision; (2) When the
defendants and intervenor did not object to the authority of Judge
Reynaldo Roura to decide the case prior to the rendition of the decision,
when they met for the first time before the undersigned Presiding Judge at
the hearing of a pending incident in Civil Case No. Q-46145 on November
11, 1988, they were deemed to have acquiesced thereto and they are now
estopped from questioning said authority of Judge Roura after they
received the decision in question which happens to be adverse to them; (3)
While it is true that Judge Reynaldo Roura was merely a Judge-on-detail
at this Branch of the Court, he was in all respects the Presiding Judge with
full authority to act on any pending incident submitted before this Court
during his incumbency. When he returned to his Official Station at
Macabebe, Pampanga, he did not lose his authority to decide or resolve
such cases submitted to him for decision or resolution because he
continued as Judge of the Regional Trial Court and is of co-equal rank
with the undersigned Presiding Judge. The standing rule and supported by
jurisprudence is that a Judge to whom a case is submitted for decision has
the authority to decide the case notwithstanding his transfer to another
branch or region of the same court (Sec. 9, Rule 135, Rule of Court).
Coming now to the twin prayer for reconsideration of the Decision dated
March 1, 1989 rendered in the instant case, resolution of which now
pertains to the undersigned Presiding Judge, after a meticulous
examination of the documentary evidence presented by the parties, she is
convinced that the Decision of March 1, 1989 is supported by evidence
and, therefore, should not be disturbed.
IN VIEW OF THE FOREGOING, the "Motion for Reconsideration and/or
to Annul Decision and Render Anew Decision by the Incumbent Presiding
Judge" dated March 20, 1989 is hereby DENIED.
SO ORDERED.
Quezon City, Philippines, July 12, 1989.
(Rollo, pp. 108-109)
Petitioners thereupon interposed an appeal, but on December 16, 1991, the Court of Appeals
(Buena, Gonzaga-Reyes, Abad Santos (P), JJ.) rendered its decision fully agreeing with the
trial court.
Hence, the instant petition which was filed on March 5, 1992. The last pleading, private
respondents' Reply Memorandum, was filed on September 15, 1993. The case was, however,
re-raffled to undersigned ponente only on August 28, 1996, due to the voluntary inhibition of
the Justice to whom the case was last assigned.
While we deem it necessary to introduce certain refinements in the disquisition of respondent
court in the affirmance of the trial court's decision, we definitely find the instant petition bereft
of merit.
The heart of the controversy which is the ultimate key in the resolution of the other issues in
the case at bar is the precise determination of the legal significance of the document entitled
"Receipt of Down Payment" which was offered in evidence by both parties. There is no
dispute as to the fact that said document embodied the binding contract between Ramona
Patricia Alcaraz on the one hand, and the heirs of Constancio P. Coronel on the other,
pertaining to a particular house and lot covered by TCT No. 119627, as defined in Article
1305 of the Civil Code of the Philippines which reads as follows:
Art. 1305. A contract is a meeting of minds between two persons whereby
one binds himself, with respect to the other, to give something or to render
some service.
While, it is the position of private respondents that the "Receipt of Down Payment" embodied
a perfected contract of sale, which perforce, they seek to enforce by means of an action for
specific performance, petitioners on their part insist that what the document signified was a
mere executory contract to sell, subject to certain suspensive conditions, and because of the
absence of Ramona P. Alcaraz, who left for the United States of America, said contract could
not possibly ripen into a contract absolute sale.
Plainly, such variance in the contending parties' contentions is brought about by the way each
interprets the terms and/or conditions set forth in said private instrument. Withal, based on
whatever relevant and admissible evidence may be available on record, this, Court, as were the
courts below, is now called upon to adjudge what the real intent of the parties was at the time
the said document was executed.
The Civil Code defines a contract of sale, thus:
Art. 1458. By the contract of sale one of the contracting parties obligates
himself to transfer the ownership of and to deliver a determinate thing, and
the other to pay therefor a price certain in money or its equivalent.
Sale, by its very nature, is a consensual contract because it is perfected by mere consent. The
essential elements of a contract of sale are the following:
a) Consent or meeting of the minds, that is, consent to transfer ownership
in exchange for the price;
b) Determinate subject matter; and
c) Price certain in money or its equivalent.
Under this definition, a Contract to Sell may not be considered as a Contract of Sale because
the first essential element is lacking. In a contract to sell, the prospective seller explicity
reserves the transfer of title to the prospective buyer, meaning, the prospective seller does not
as yet agree or consent to transfer ownership of the property subject of the contract to sell until
the happening of an event, which for present purposes we shall take as the full payment of the
purchase price. What the seller agrees or obliges himself to do is to fulfill is promise to sell the
subject property when the entire amount of the purchase price is delivered to him. In other
words the full payment of the purchase price partakes of a suspensive condition, the non-
fulfillment of which prevents the obligation to sell from arising and thus, ownership is retained
by the prospective seller without further remedies by the prospective buyer. In Roque vs.
Lapuz (96 SCRA 741 [1980]), this Court had occasion to rule:
Hence, We hold that the contract between the petitioner and the
respondent was a contract to sell where the ownership or title is retained
by the seller and is not to pass until the full payment of the price, such
payment being a positive suspensive condition and failure of which is not
a breach, casual or serious, but simply an event that prevented the
obligation of the vendor to convey title from acquiring binding force.
Stated positively, upon the fulfillment of the suspensive condition which is the full payment of
the purchase price, the prospective seller's obligation to sell the subject property by entering
into a contract of sale with the prospective buyer becomes demandable as provided in Article
1479 of the Civil Code which states:
Art. 1479. A promise to buy and sell a determinate thing for a price certain
is reciprocally demandable.
An accepted unilateral promise to buy or to sell a determinate thing for a
price certain is binding upon the promissor if the promise is supported by
a consideration distinct from the price.
A contract to sell may thus be defined as a bilateral contract whereby the prospective seller,
while expressly reserving the ownership of the subject property despite delivery thereof to the
prospective buyer, binds himself to sell the said property exclusively to the prospective buyer
upon fulfillment of the condition agreed upon, that is, full payment of the purchase price.
A contract to sell as defined hereinabove, may not even be considered as a conditional contract
of sale where the seller may likewise reserve title to the property subject of the sale until the
fulfillment of a suspensive condition, because in a conditional contract of sale, the first
element of consent is present, although it is conditioned upon the happening of a contingent
event which may or may not occur. If the suspensive condition is not fulfilled, the perfection
of the contract of sale is completely abated (cf. Homesite and housing Corp. vs. Court of
Appeals, 133 SCRA 777 [1984]). However, if the suspensive condition is fulfilled, the
contract of sale is thereby perfected, such that if there had already been previous delivery of
the property subject of the sale to the buyer, ownership thereto automatically transfers to the
buyer by operation of law without any further act having to be performed by the seller.
In a contract to sell, upon the fulfillment of the suspensive condition which is the full payment
of the purchase price, ownership will not automatically transfer to the buyer although the
property may have been previously delivered to him. The prospective seller still has to convey
title to the prospective buyer by entering into a contract of absolute sale.
It is essential to distinguish between a contract to sell and a conditional contract of sale
specially in cases where the subject property is sold by the owner not to the party the seller
contracted with, but to a third person, as in the case at bench. In a contract to sell, there being
no previous sale of the property, a third person buying such property despite the fulfillment of
the suspensive condition such as the full payment of the purchase price, for instance, cannot be
deemed a buyer in bad faith and the prospective buyer cannot seek the relief of reconveyance
of the property. There is no double sale in such case. Title to the property will transfer to the
buyer after registration because there is no defect in the owner-seller's title per se, but the
latter, of course, may be used for damages by the intending buyer.
In a conditional contract of sale, however, upon the fulfillment of the suspensive condition, the
sale becomes absolute and this will definitely affect the seller's title thereto. In fact, if there
had been previous delivery of the subject property, the seller's ownership or title to the
property is automatically transferred to the buyer such that, the seller will no longer have any
title to transfer to any third person. Applying Article 1544 of the Civil Code, such second
buyer of the property who may have had actual or constructive knowledge of such defect in
the seller's title, or at least was charged with the obligation to discover such defect, cannot be a
registrant in good faith. Such second buyer cannot defeat the first buyer's title. In case a title is
issued to the second buyer, the first buyer may seek reconveyance of the property subject of
the sale.
With the above postulates as guidelines, we now proceed to the task of deciphering the real
nature of the contract entered into by petitioners and private respondents.
It is a canon in the interpretation of contracts that the words used therein should be given their
natural and ordinary meaning unless a technical meaning was intended (Tan vs. Court of
Appeals, 212 SCRA 586 [1992]). Thus, when petitioners declared in the said "Receipt of
Down Payment" that they —
Received from Miss Ramona Patricia Alcaraz of 146 Timog, Quezon City,
the sum of Fifty Thousand Pesos purchase price of our inherited house
and lot, covered by TCT No. 1199627 of the Registry of Deeds of Quezon
City, in the total amount of P1,240,000.00.
without any reservation of title until full payment of the entire purchase price, the
natural and ordinary idea conveyed is that they sold their property.
When the "Receipt of Down Payment" is considered in its entirety, it becomes more manifest
that there was a clear intent on the part of petitioners to transfer title to the buyer, but since the
transfer certificate of title was still in the name of petitioner's father, they could not fully effect
such transfer although the buyer was then willing and able to immediately pay the purchase
price. Therefore, petitioners-sellers undertook upon receipt of the down payment from private
respondent Ramona P. Alcaraz, to cause the issuance of a new certificate of title in their names
from that of their father, after which, they promised to present said title, now in their names, to
the latter and to execute the deed of absolute sale whereupon, the latter shall, in turn, pay the
entire balance of the purchase price.
The agreement could not have been a contract to sell because the sellers herein made no
express reservation of ownership or title to the subject parcel of land. Furthermore, the
circumstance which prevented the parties from entering into an absolute contract of sale
pertained to the sellers themselves (the certificate of title was not in their names) and not the
full payment of the purchase price. Under the established facts and circumstances of the case,
the Court may safely presume that, had the certificate of title been in the names of petitioners-
sellers at that time, there would have been no reason why an absolute contract of sale could
not have been executed and consummated right there and then.
Moreover, unlike in a contract to sell, petitioners in the case at bar did not merely promise to
sell the properly to private respondent upon the fulfillment of the suspensive condition. On the
contrary, having already agreed to sell the subject property, they undertook to have the
certificate of title changed to their names and immediately thereafter, to execute the written
deed of absolute sale.
Thus, the parties did not merely enter into a contract to sell where the sellers, after compliance
by the buyer with certain terms and conditions, promised to sell the property to the latter.
What may be perceived from the respective undertakings of the parties to the contract is that
petitioners had already agreed to sell the house and lot they inherited from their father,
completely willing to transfer full ownership of the subject house and lot to the buyer if the
documents were then in order. It just happened, however, that the transfer certificate of title
was then still in the name of their father. It was more expedient to first effect the change in the
certificate of title so as to bear their names. That is why they undertook to cause the issuance
of a new transfer of the certificate of title in their names upon receipt of the down payment in
the amount of P50,000.00. As soon as the new certificate of title is issued in their names,
petitioners were committed to immediately execute the deed of absolute sale. Only then will
the obligation of the buyer to pay the remainder of the purchase price arise.
There is no doubt that unlike in a contract to sell which is most commonly entered into so as to
protect the seller against a buyer who intends to buy the property in installment by
withholding ownership over the property until the buyer effects full payment therefor, in the
contract entered into in the case at bar, the sellers were the one who were unable to enter into a
contract of absolute sale by reason of the fact that the certificate of title to the property was
still in the name of their father. It was the sellers in this case who, as it were, had the
impediment which prevented, so to speak, the execution of an contract of absolute sale.
What is clearly established by the plain language of the subject document is that when the said
"Receipt of Down Payment" was prepared and signed by petitioners Romeo A. Coronel, et al.,
the parties had agreed to a conditional contract of sale, consummation of which is subject only
to the successful transfer of the certificate of title from the name of petitioners' father,
Constancio P. Coronel, to their names.
The Court significantly notes this suspensive condition was, in fact, fulfilled on February 6,
1985 (Exh. "D"; Exh. "4"). Thus, on said date, the conditional contract of sale between
petitioners and private respondent Ramona P. Alcaraz became obligatory, the only act required
for the consummation thereof being the delivery of the property by means of the execution of
the deed of absolute sale in a public instrument, which petitioners unequivocally committed
themselves to do as evidenced by the "Receipt of Down Payment."
Article 1475, in correlation with Article 1181, both of the Civil Code, plainly applies to the
case at bench. Thus,
Art. 1475. The contract of sale is perfected at the moment there is a
meeting of minds upon the thing which is the object of the contract and
upon the price.
From the moment, the parties may reciprocally demand performance,
subject to the provisions of the law governing the form of contracts.
Art. 1181. In conditional obligations, the acquisition of rights, as well as
the extinguishment or loss of those already acquired, shall depend upon
the happening of the event which constitutes the condition.
Since the condition contemplated by the parties which is the issuance of a certificate of title in
petitioners' names was fulfilled on February 6, 1985, the respective obligations of the parties
under the contract of sale became mutually demandable, that is, petitioners, as sellers, were
obliged to present the transfer certificate of title already in their names to private respondent
Ramona P. Alcaraz, the buyer, and to immediately execute the deed of absolute sale, while the
buyer on her part, was obliged to forthwith pay the balance of the purchase price amounting to
P1,190,000.00.
It is also significant to note that in the first paragraph in page 9 of their petition, petitioners
conclusively admitted that:
3. The petitioners-sellers Coronel bound themselves "to effect the transfer
in our names from our deceased father Constancio P. Coronel, the transfer
certificate of title immediately upon receipt of the downpayment above-
stated". The sale was still subject to this suspensive condition. (Emphasis
supplied.)
(Rollo, p. 16)
Petitioners themselves recognized that they entered into a contract of sale subject to a
suspensive condition. Only, they contend, continuing in the same paragraph, that:
. . . Had petitioners-sellers not complied with this condition of first
transferring the title to the property under their names, there could be no
perfected contract of sale. (Emphasis supplied.)
(Ibid.)
not aware that they set their own trap for themselves, for Article 1186 of the Civil
Code expressly provides that:
Art. 1186. The condition shall be deemed fulfilled when the obligor
voluntarily prevents its fulfillment.
Besides, it should be stressed and emphasized that what is more controlling than these mere
hypothetical arguments is the fact that the condition herein referred to was actually and
indisputably fulfilled on February 6, 1985, when a new title was issued in the names of
petitioners as evidenced by TCT No. 327403 (Exh. "D"; Exh. "4").
The inevitable conclusion is that on January 19, 1985, as evidenced by the document
denominated as "Receipt of Down Payment" (Exh. "A"; Exh. "1"), the parties entered into a
contract of sale subject only to the suspensive condition that the sellers shall effect the
issuance of new certificate title from that of their father's name to their names and that, on
February 6, 1985, this condition was fulfilled (Exh. "D"; Exh. "4").
We, therefore, hold that, in accordance with Article 1187 which pertinently provides —
Art. 1187. The effects of conditional obligation to give, once the condition
has been fulfilled, shall retroact to the day of the constitution of the
obligation . . .
In obligation to do or not to do, the courts shall determine, in each case,
the retroactive effect of the condition that has been complied with.
the rights and obligations of the parties with respect to the perfected contract of sale
became mutually due and demandable as of the time of fulfillment or occurrence of
the suspensive condition on February 6, 1985. As of that point in time, reciprocal
obligations of both seller and buyer arose.
Petitioners also argue there could been no perfected contract on January 19, 1985 because they
were then not yet the absolute owners of the inherited property.
We cannot sustain this argument.
Article 774 of the Civil Code defines Succession as a mode of transferring ownership as
follows:
Art. 774. Succession is a mode of acquisition by virtue of which the
property, rights and obligations to be extent and value of the inheritance of
a person are transmitted through his death to another or others by his will
or by operation of law.
Petitioners-sellers in the case at bar being the sons and daughters of the decedent
Constancio P. Coronel are compulsory heirs who were called to succession by
operation of law. Thus, at the point their father drew his last breath, petitioners
stepped into his shoes insofar as the subject property is concerned, such that any
rights or obligations pertaining thereto became binding and enforceable upon them.
It is expressly provided that rights to the succession are transmitted from the
moment of death of the decedent (Article 777, Civil Code; Cuison vs. Villanueva, 90
Phil. 850 [1952]).
Be it also noted that petitioners' claim that succession may not be declared unless the creditors
have been paid is rendered moot by the fact that they were able to effect the transfer of the title
to the property from the decedent's name to their names on February 6, 1985.
Aside from this, petitioners are precluded from raising their supposed lack of capacity to enter
into an agreement at that time and they cannot be allowed to now take a posture contrary to
that which they took when they entered into the agreement with private respondent Ramona P.
Alcaraz. The Civil Code expressly states that:
Art. 1431. Through estoppel an admission or representation is rendered
conclusive upon the person making it, and cannot be denied or disproved
as against the person relying thereon.
Having represented themselves as the true owners of the subject property at the time
of sale, petitioners cannot claim now that they were not yet the absolute owners
thereof at that time.
Petitioners also contend that although there was in fact a perfected contract of sale between
them and Ramona P. Alcaraz, the latter breached her reciprocal obligation when she rendered
impossible the consummation thereof by going to the United States of America, without
leaving her address, telephone number, and Special Power of Attorney (Paragraphs 14 and 15,
Answer with Compulsory Counterclaim to the Amended Complaint, p. 2; Rollo, p. 43), for
which reason, so petitioners conclude, they were correct in unilaterally rescinding rescinding
the contract of sale.
We do not agree with petitioners that there was a valid rescission of the contract of sale in the
instant case. We note that these supposed grounds for petitioners' rescission, are mere
allegations found only in their responsive pleadings, which by express provision of the rules,
are deemed controverted even if no reply is filed by the plaintiffs (Sec. 11, Rule 6, Revised
Rules of Court). The records are absolutely bereft of any supporting evidence to substantiate
petitioners' allegations. We have stressed time and again that allegations must be proven by
sufficient evidence (Ng Cho Cio vs. Ng Diong, 110 Phil. 882 [1961]; Recaro vs. Embisan, 2
SCRA 598 [1961]. Mere allegation is not an evidence (Lagasca vs. De Vera, 79 Phil. 376
[1947]).
Even assuming arguendo that Ramona P. Alcaraz was in the United States of America on
February 6, 1985, we cannot justify petitioner-sellers' act of unilaterally and extradicially
rescinding the contract of sale, there being no express stipulation authorizing the sellers to
extarjudicially rescind the contract of sale. (cf. Dignos vs. CA, 158 SCRA 375 [1988]; Taguba
vs. Vda. de Leon, 132 SCRA 722 [1984])
Moreover, petitioners are estopped from raising the alleged absence of Ramona P. Alcaraz
because although the evidence on record shows that the sale was in the name of Ramona P.
Alcaraz as the buyer, the sellers had been dealing with Concepcion D. Alcaraz, Ramona's
mother, who had acted for and in behalf of her daughter, if not also in her own behalf. Indeed,
the down payment was made by Concepcion D. Alcaraz with her own personal check (Exh.
"B"; Exh. "2") for and in behalf of Ramona P. Alcaraz. There is no evidence showing that
petitioners ever questioned Concepcion's authority to represent Ramona P. Alcaraz when they
accepted her personal check. Neither did they raise any objection as regards payment being
effected by a third person. Accordingly, as far as petitioners are concerned, the physical
absence of Ramona P. Alcaraz is not a ground to rescind the contract of sale.
Corollarily, Ramona P. Alcaraz cannot even be deemed to be in default, insofar as her
obligation to pay the full purchase price is concerned. Petitioners who are precluded from
setting up the defense of the physical absence of Ramona P. Alcaraz as above-explained
offered no proof whatsoever to show that they actually presented the new transfer certificate of
title in their names and signified their willingness and readiness to execute the deed of
absolute sale in accordance with their agreement. Ramona's corresponding obligation to pay
the balance of the purchase price in the amount of P1,190,000.00 (as buyer) never became due
and demandable and, therefore, she cannot be deemed to have been in default.
Article 1169 of the Civil Code defines when a party in a contract involving reciprocal
obligations may be considered in default, to wit:
Art. 1169. Those obliged to deliver or to do something, incur in delay
from the time the obligee judicially or extrajudicially demands from them
the fulfillment of their obligation.
xxx xxx xxx
In reciprocal obligations, neither party incurs in delay if the other does not
comply or is not ready to comply in a proper manner with what is
incumbent upon him. From the moment one of the parties fulfill his
obligation, delay by the other begins. (Emphasis supplied.)
There is thus neither factual nor legal basis to rescind the contract of sale between petitioners
and respondents.
With the foregoing conclusions, the sale to the other petitioner, Catalina B. Mabanag, gave
rise to a case of double sale where Article 1544 of the Civil Code will apply, to wit:
Art. 1544. If the same thing should have been sold to different vendees,
the ownership shall be transferred to the person who may have first taken
possession thereof in good faith, if it should be movable property.
Should if be immovable property, the ownership shall belong to the person
acquiring it who in good faith first recorded it in Registry of Property.
Should there be no inscription, the ownership shall pertain to the person
who in good faith was first in the possession; and, in the absence thereof
to the person who presents the oldest title, provided there is good faith.
The record of the case shows that the Deed of Absolute Sale dated April 25, 1985 as proof of
the second contract of sale was registered with the Registry of Deeds of Quezon City giving
rise to the issuance of a new certificate of title in the name of Catalina B. Mabanag on June 5,
1985. Thus, the second paragraph of Article 1544 shall apply.
The above-cited provision on double sale presumes title or ownership to pass to the first buyer,
the exceptions being: (a) when the second buyer, in good faith, registers the sale ahead of the
first buyer, and (b) should there be no inscription by either of the two buyers, when the second
buyer, in good faith, acquires possession of the property ahead of the first buyer. Unless, the
second buyer satisfies these requirements, title or ownership will not transfer to him to the
prejudice of the first buyer.
In his commentaries on the Civil Code, an accepted authority on the subject, now a
distinguished member of the Court, Justice Jose C. Vitug, explains:
This Court had occasions to rule that:
If a vendee in a double sale registers that sale after he has acquired
knowledge that there was a previous sale of the same property to a third
party or that another person claims said property in a pervious sale, the
registration will constitute a registration in bad faith and will not confer
upon him any right. (Salvoro vs. Tanega, 87 SCRA 349 [1978]; citing
Palarca vs. Director of Land, 43 Phil. 146; Cagaoan vs. Cagaoan, 43 Phil.
554; Fernandez vs. Mercader, 43 Phil. 581.)

The governing principle is prius tempore, potior jure (first in time,
stronger in right). Knowledge by the first buyer of the second sale cannot
defeat the first buyer's rights except when the second buyer first registers
in good faith the second sale (Olivares vs. Gonzales, 159 SCRA 33).
Conversely, knowledge gained by the second buyer of the first sale defeats
his rights even if he is first to register, since knowledge taints his
registration with bad faith (see also Astorga vs. Court of Appeals, G.R.
No. 58530, 26 December 1984). In Cruz vs. Cabana (G.R. No. 56232, 22
June 1984, 129 SCRA 656), it has held that it is essential, to merit the
protection of Art. 1544, second paragraph, that the second realty buyer
must act in good faith in registering his deed of sale (citing Carbonell vs.
Court of Appeals, 69 SCRA 99, Crisostomo vs. CA, G.R. No. 95843, 02
September 1992).
(J. Vitug Compendium of Civil Law and Jurisprudence, 1993 Edition, p.
604).
Thus, the sale of the subject parcel of land between petitioners and Ramona P. Alcaraz,
perfected on February 6, 1985, prior to that between petitioners and Catalina B. Mabanag on
February 18, 1985, was correctly upheld by both the courts below.
Although there may be ample indications that there was in fact an agency between Ramona as
principal and Concepcion, her mother, as agent insofar as the subject contract of sale is
concerned, the issue of whether or not Concepcion was also acting in her own behalf as a co-
buyer is not squarely raised in the instant petition, nor in such assumption disputed between
mother and daughter. Thus, We will not touch this issue and no longer disturb the lower
courts' ruling on this point.
WHEREFORE, premises considered, the instant petition is hereby DISMISSED and the
appealed judgment AFFIRMED.

Petitioner point out that the notice of lis pendens in the case at bar was annoted on the title of
the subject property only on February 22, 1985, whereas, the second sale between petitioners
Coronels and petitioner Mabanag was supposedly perfected prior thereto or on February 18,
1985. The idea conveyed is that at the time petitioner Mabanag, the second buyer, bought the
property under a clean title, she was unaware of any adverse claim or previous sale, for which
reason she is buyer in good faith.

We are not persuaded by such argument.

In a case of double sale, what finds relevance and materiality is not whether or not the second
buyer was a buyer in good faith but whether or not said second buyer registers such second
sale in good faith, that is, without knowledge of any defect in the title of the property sold.

As clearly borne out by the evidence in this case, petitioner Mabanag could not have in good
faith, registered the sale entered into on February 18, 1985 because as early as February 22,
1985, a notice of lis pendens had been annotated on the transfer certificate of title in the names
of petitioners, whereas petitioner Mabanag registered the said sale sometime in April, 1985. At
the time of registration, therefore, petitioner Mabanag knew that the same property had
already been previously sold to private respondents, or, at least, she was charged with
knowledge that a previous buyer is claiming title to the same property. Petitioner Mabanag
cannot close her eyes to the defect in petitioners' title to the property at the time of the
registration of the property.
G.R. No. L-46364 April 6, 1990
SULPICIA JIMENEZ and TORIBIO MATIAS, petitioners,
vs.
VICENTE FERNANDEZ alias HOSPICIO FERNANDEZ and TEODORA GRADO,
respondents.
Antonio E. Bengzon III for petitioners.
Agustin U. Cruz for private respondents.
PARAS, J.:
Before Us is a petition for review on certiorari of the following Decision 1 and Resolution 2
of the Honorable Court of Appeals: (1) Decision, dated March 1, 1977 in C.A.-G.R. No.
49178-R entitled "Sulpicia Jimenez, et al., v. Vicente Fernandez, et al." affirming in toto the
judgment of the Court of First Instance of Pangasinan, Third Judicial District in Civil Case
No. 14802-I between the same parties and (2) Resolution dated June 3, 1977 denying
plaintiffs-appellants' motion for reconsideration.
As gathered from the records, the factual background of this case is as follows:
The land in question is the Eastern portion with an area of Four Hundred Thirty Six (436)
square meters of that parcel of residential land situated in Barrio Dulig (now Magsaysay),
Municipality of Labrador, Pangasinan actually covered by Transfer Certificate of Title No.
82275 (Exhibit A) issued in the name of Sulpicia Jimenez.
The entire parcel of land with an area of 2,932 square meters, formerly belonged to Fermin
Jimenez. Fermin Jimenez has two (2) sons named Fortunato and Carlos Jimenez. This
Fortunato Jimenez who predeceased his father has only one child, the petitioner Sulpicia
Jimenez. After the death of Fermin Jimenez, the entire parcel of land was registered under Act
496 in the name of Carlos Jimenez and Sulpicia Jimenez (uncle and niece) in equal shares pro-
indiviso. As a result of the registration case Original Certificate of Title No. 50933 (Exhibit 8)
was issued on February 28, 1933, in the names of Carlos Jimenez and Sulpicia Jimenez, in
equal shares pro-indiviso.
Carlos Jimenez died on July 9, 1936 and his illegitimate daughter, Melecia Cayabyab, also
known as Melecia Jimenez, took possession of the eastern portion of the property consisting of
436 square meters.
On January 20, 1944, Melecia Jimenez sold said 436 square meter-portion of the property to
Edilberto Cagampan and defendant Teodora Grado executed a contract entitled "Exchange of
Real Properties" whereby the former transferred said 436 square meter-portion to the latter,
who has been in occupation since.
On August 29, 1969, plaintiff Sulpicia Jimenez executed an affidavit adjudicating unto herself
the other half of the property appertaining to Carlos Jimenez, upon manifestation that she is
the only heir of her deceased uncle. Consequently Transfer Certificate of Title No. 82275 was
issued on October 1, 1969 in petitioner's name alone over the entire 2,932 square meter
property.
On April 1, 1970, Sulpicia Jimenez, joined by her husband, instituted the present action for the
recovery of the eastern portion of the property consisting of 436 square meters occupied by
defendant Teodora Grado and her son.
After trial on the merits, the lower court rendered judgment, the dispositive portion of which
reads:
WHEREFORE, decision is hereby rendered dismissing the complaint and holding
the defendant, Teodora Grado, the absolute owner of the land in question; ordering
the plaintiffs to pay to the defendant the amount of P500.00 as damages, as
attorney's fees, and to pay the costs of suit.
SO ORDERED. (Rollo, p. 20)
Petitioner appealed the above judgment to the respondent Court of Appeals and on March 1,
1977, respondent Court of Appeals rendered a decision affirming the same in toto. Said
decision was rendered by a special division of five (5) justices, with the Hon. Lourdes San
Diego, dissenting.
Petitioners within the reglementary period granted by the Honorable Court of Appeals, filed
therewith a motion for reconsideration. But said motion for reconsideration was denied by the
Court of Appeals in its resolution dated June 3, 1977.
In their appeal to the respondent Court of Appeals from the aforequoted decision of the trial
court, herein petitioner raised the following assignments of error to wit:
ASSIGNMENTS OF ERROR
I
THE LOWER COURT ERRED IN NOT DECLARING THAT MELECIA
CAYABYAB, ALSO KNOWN AS MELECIA JIMENEZ, IS NOT THE
DAUGHTER OF CARLOS JIMENEZ.
II
THE LOWER COURT ERRED IN NOT DECLARING THAT MELECIA
CAYABYAB, ALSO KNOWN AS MELECIA JIMENEZ, HAS NO RIGHT TO
SELL THE LAND IN QUESTION TO EDILBERTO CAGAMPAN.
III
 THE LOWER COURT ERRED IN NOT DECLARING THAT EDILBERTO
CAGAMPAN DID NOT BECOME THE OWNER OF THE LAND IN QUESTION
BY VIRTUE OF THE DEED OF SALE (EXH. "1") EXECUTED BY MELECIA
CAYABYAB, ALIAS MELECIA JIMENEZ, IN HIS FAVOR.
IV
THE LOWER COURT ERRED IN NOT DECLARING THAT TEODORA
GRADO DID NOT BECOME THE OWNER OF THE LAND IN QUESTION BY
VIRTUE OF THE DEED OF EXCHANGE (EXH. "7") EXECUTED BY HER
AND EDILBERTO CAGAMPAN.
V
THE LOWER COURT ERRED IN NOT DECLARING THAT THE TITLE OF
APPELLANT SULPICIA JIMENEZ OVER THE LAND IN QUESTION CAN
NOT BE DEFEATED BY THE ADVERSE OPEN AND NOTORIOUS
POSSESSION OF APPELLEE TEODORA GRADO.
VI
THE LOWER COURT ERRED IN DECLARING THAT THE APPELLEE
TEODORA GRADO IS THE ABSOLUTE OWNER OF THE LAND IN
QUESTION IN THE LIGHT OF THE DECISION OF THE SUPREME COURT IN
THE CASE OF LOURDES ARCUINO, ET AL., V. RUFINA APARIS AND
CASIANO PURAY, G.R. NO. L-23424, PROMULGATED JANUARY 31, 1968,
WHICH CASE IS NOT APPLICABLE TO THE CASE AT BAR.
VII
THE LOWER COURT ERRED IN DISMISSING THE COMPLAINT AND
ORDERING THE APPELLANTS TO PAY THE APPELLEES THE SUM OF
P500.00 AS ATTORNEYS FEES PLUS THE COSTS.
From the foregoing, this petition for review was filed.
We find merit in the petition.
From the start the respondent court erred in not declaring that Melecia Jimenez Cayabyab also
known as Melecia Jimenez, is not the daughter of Carlos Jimenez and therefore, had no right
over the property in question. Respondents failed to present concrete evidence to prove that
Melecia Cayabyab was really the daughter of Carlos Jimenez. Nonetheless, assuming for the
sake of argument that Melecia Cayabyab was the illegitimate daughter of Carlos Jimenez there
can be no question that Melecia Cayabyab had no right to succeed to the estate of Carlos
Jimenez and could not have validly acquired, nor legally transferred to Edilberto Cagampan
that portion of the property subject of this petition.
It is well-settled in this jurisdiction that the rights to the succession are transmitted from the
moment of the death of the decedent (Art. 777, Civil Code). Moreover, Art. 2263 of the Civil
Code provides as follows:
Rights to the inheritance of a person who died with or without a will, before the
effectivity of this Code, shall be governed by the Civil Code of 1889, by other
previous laws, and by the Rules of Court . . . (Rollo, p. 17)
Thus, since Carlos Jimenez, owner of one-half pro-indiviso portion of that parcel of land then
covered by Original Certificate of title No. 50933, died on July 9, 1936 (Exhibit "F") way
before the effectivity of the Civil Code of the Philippines, the successional rights pertaining to
his estate must be determined in accordance with the Civil Code of 1889.
Citing the case of Cid v. Burnaman (24 SCRA 434) wherein this Court categorically held that:
To be an heir under the rules of Civil Code of 1889 (which was the law in force
when Carlos Jimenez died and which should be the governing law in so far as the
right to inherit from his estate was concerned), a child must be either a child
legitimate, legitimated, or adopted, or else an acknowledged natural child — for
illegitimate not natural are disqualified to inherit. (Civil Code of 1889, Art. 807,
935)
Even assuming that Melecia Cayabyab was born out of the common-law-relationship between
her mother (Maria Cayabyab) and Carlos Jimenez, she could not even be considered an
acknowledged natural child because Carlos Jimenez was then legally married to Susana
Abalos and therefore not qualified to marry Maria Cayabyab and consequently Melecia
Cayabyab was an illegitimate spurious child and not entitled to any successional rights in so
far as the estate of Carlos Jimenez was concerned.
Melecia Cayabyab in the absence of any voluntary conveyance to her by Carlos Jimenez or
Sulpicia Jimenez of the litigated portion of the land could not even legally transfer the parcel
of land to Edilberto Cagampan who accordingly, could not also legally transfer the same to
herein private respondents.
Analyzing the case before Us in this manner, We can immediately discern another error in the
decision of the respondent court, which is that the said court sustained and made applicable to
the case at bar the ruling in the case of Arcuino, et al., v. Aparis and Puray, No. L-23424,
January 31, 1968, 22 SCRA 407, wherein We held that:
. . . it is true that the lands registered under the Torrens System may not be acquired
by prescription but plaintiffs herein are not the registered owners. They merely
claim to have acquired by succession, their alleged title or interest in lot No. 355. At
any rate plaintiffs herein are guilty of laches.
The respondent court relying on the Arcuino case, concluded that respondents had acquired
the property under litigation by prescription. We cannot agree with such conclusion, because
there is one very marked and important difference between the case at bar and that of the
Arcuino case, and that is, that since 1933 petitioner Sulpicia Jimenez was a title holder, the
property then being registered in her and her uncle Carlos Jimenez' name. In the Arcuino case,
this Supreme Court held. "(I)t is true that lands registered under the Torrens System may not Macalindong (6 SCRA 938), held that "the right of the appellee to file an action to recover
be acquired by prescription but plaintiffs herein are not the registered owners." (Rollo, p. 38) possession based on its Torrens Title is imprescriptible and not barred under the doctrine of
Even in the said cited case the principle of imprescriptibility of Torrens Titles was respected. laches.

Melecia Cayabyab's possession or of her predecessors-in-interest would be unavailing against WHEREFORE, the Petition for Review is hereby GRANTED. The Decision and Resolution
the petitioner Sulpicia Jimenez who was the holder pro-indiviso with Carlos Jimenez of the dated March 1, 1977 and June 3, 1977 in CA G.R. No. L-49178-R are SET ASIDE.
Torrens Certificate of Title covering a tract of land which includes the portion now in
question, from February 28, 1933, when the Original Certificate of Title No. 50933 (Exhibit 8)
was issued.

No possession by any person of any portion of the land covered by said original certificate of
titles, could defeat the title of the registered owner of the land covered by the certificate of
title. (Benin v. Tuason, L-26127, June 28, 1974, 57 SCRA 531)

Sulpicia's title over her one-half undivided property remained good and continued to be good
when she segregated it into a new title (T.C.T No. 82275, Exhibit "A") in 1969. Sulpicia's
ownership over her one-half of the land and which is the land in dispute was always covered
by a Torrens title, and therefore, no amount of possession thereof by the respondents, could
ever defeat her proprietary rights thereon. It is apparent, that the right of plaintiff (now
petitioner) to institute this action to recover possession of the portion of the land in question
based on the Torrens Title of Sulpicia Jimenez, T.C.T. No. 82275 (Exhibit "A") is
imprescriptible and not barred under the doctrine of laches. (J.M. Tuason & Co. v.
Macalindong, L-15398, December 29, 1962, Francisco v. Cruz, et al., 43 O.G. 5105) Rollo, p.
39)

The respondent Court of Appeals declared the petitioner Sulpicia Jimenez guilty of laches and
citing the ruling in the case of Heirs of Lacamen v. Heirs of Laruan (65 SCRA 605), held that,
since petitioner Sulpicia Jimenez executed her Affidavit of Self-Adjudication only in 1969,
she lost the right to recover possession of the parcel of land subject of the litigation.

In this instance, again We rule for the petitioner. There is no absolute rule as to what
constitutes laches or staleness of demand; each case is to be determined according to its
particular circumstances. The question of laches is addressed to the sound discretion of the
court and since laches is an equitable doctrine, its application is controlled by equitable
considerations. It cannot be worked to defeat justice or to perpetrate fraud and injustice. It
would be rank injustice and patently inequitous to deprive the lawful heirs of their rightful
inheritance.

Petitioner Sulpicia Jimenez is entitled to the relief prayed for, declaring her to be the sole and
absolute owner of the land in question with right to its possession and enjoyment. Since her
uncle Carlos Jimenez died in 1936, his pro-indiviso share in the properties then owned in co-
ownership with his niece Sulpicia descended by intestacy to Sulpicia Jimenez alone because
Carlos died without any issue or other heirs.

After all, the professed objective of Act No. 496, otherwise known as the Land Registration
Act or the law which established the Torrens System of Land Registration in the Philippines is
that the stability of the landholding system in the Philippines depends on the confidence of the
people in the titles covering the properties. And to this end, this Court has invariably upheld
the indefeasibility of the Torrens Title and in, among others, J.M. Tuason and Co., Inc. v.