G.R. No.

L-11285 May 16, 1958

VICENTE SAPTO, LAUREANA SAPTO and DORA (BAGONA), plaintiffs-appellants,

vs.
APOLONIO FABIANA, defendant-appellee.

Sapto (Moro), now deceased was the registered owner of a parcel of land located in Alambre, Toril, Davao City, under Transfer
Certificate of Title No. T-5701 (0-28) of the Register of Deeds of Davao City. When Sapto died, he left his children Samuel,
Constancio, and Ramon as heirs of the property in question. Ramon pre-deceased his two brothers, leaving no, other heirs. On
June 6, 1931, Samuel and Constancio Sapto executed a deed of sale of a portion of four hectares of the land aforementioned if
favor of defendant Apolonio Fabiana, in consideration of the amount of P245.00. The sale was duly approved by the Provincial
Governor of Davao, but was never registered. Possession of the land conveyed was, however, transferred to Fabiana and the
latter has been in the possession thereof 1931 up to the present.

Thereafter, Constancio Sapto died without any issue, Samuel Sapto married one Dora (Bagoba) and upon his death was survived
by his widow and two children, Laureana and Vicente Sapto. On October 19, 1954, the widow and children of Samuel Sapto filed
this action in the Court of First Instance of Davao for the recovery of the parcel of land sold by their predecessors to defendant
Apolonio Fabiana in 1931. After trial, the lower court held that although the sale between Samuel and Constancio Sapto and
defendant in 1931 was never registered, it was valid and binding upon the parties and the vendors heirs, and ordered the
plaintiffs to execute the necessary deed of conveyance in defendant's favor and its annotation in the certificate of title. From this
judgment, plaintiffs appealed to this Court.

The issue is whether the deed of sale executed by appellants' predecessors in favor of the appellee over the land in question,
although never registered, is valid and binding on appellants and operated to convey title and ownership to the appellee.

The question is not new. In a long line of cases already decided by this Court, we have consistently interpreted sec. 50 of the
Land Registration Act providing that "no deed . . . shall take effect as a conveyance or bind the land, but shall operate only as a
contract between the parties and as evidence of authority to the clerk or register of deeds to make registration" in the sense that
as between the parties to a sale registration is not necessary to make it valid and effective, for actual notice is equivalent to
registration (Obras Pias vs. Devera Ignacio, 17 Phil., 45; Gustilo vs. Maravilla, 48 Phil., 442; Quimson vs. Suarez, 45 Phil., 901;
Winkleman vs. Veluz, 43 Phil., 609; Galasinao vs. Austria, 51 Off. Gaz. No. 6, 2874; Carillo vs. Salak, 91 Phil., 265). "The peculiar
force of a title under Act No. 492", we said in Medina vs. Imaz and Warner Barnes and Co., 27 Phil., 314 (syllabus), "is exhibited
only when the purchaser has sold to innocent third parties the land described in the conveyance. Generally speaking, as between
vendor and vendee, the same rights and remedies exist in relation to land not so registered". In Galanza vs. Nuesa, 95 Phil., 713,
we held that "registration is intended to protect the buyer against claims of third persons arising from subsequent alienations by
the vendor, and is certainly not necessary to give effect as between the parties to their deed of sale". And in the recent case of
Casica vs. Villaseca, G.R. No. L-9590, April 30, 1957, we reiterated that "the purpose of registration is merely to notify and protect
the interests of strangers to a given transaction, who may be ignorant thereof, and the non-registration of the deed evidencing
said transaction does not relieve the parties thereto of their obligations thereunder".

No right of innocent third persons or subsequent transferees of the property in question is involved herein. The property has
remained and still is in the possession of the vendee of appellants' predecessors, herein appellee. It is, therefore, clear that the
conveyance between appellee and his vendors and valid and binding upon the latter, and is equally binding and effective against
the heirs of the vendors, herein appellants. To hold otherwise would make of the Torrens system a shield for the commission of
fraud by the vendors or his heirs (Gustilo vs. Maravilla, 48 Phil., 442), who would then be able to reconvey the same property to
other persons.

Appellants cite several cases wherein we have held that under the Torrens system, registration is the operative act that gives
validity to the transfer or creates a lien upon the land. The authorities cited refer, however, to cases involving conflicting rights
over registered property and those of innocent transferees who relied on the clean titles of the properties in question. These
cases have, therefore, no bearing on the instant case, where the appellee has always, remained in the possession of the land in
question and no subsequent transfer thereof to other persons has been made either by appellants or their prodecessors-in-
interest.

The appellants aver that it was error to require them to execute a deed of conveyance in favor of the plaintiff, appellee, and
argue that the latter's action to obtain it had long prescribed, twenty years having elapsed since the original sale. This contention
must be overruled, being predicated on the assumption that the reconveyance is sought by way of performance of the contract
of sale entered into in 1931. No enforcement of the contract is in fact needed, since the delivery of possession of the land sold
had consummated the sale and transferred title to the purchaser, registration of the contract not being indispensable as between
the parties. Actually the action for conveyance was one to quiet title, i.e., to remove the cloud cast upon appellee's ownership by
the refusal of the appellants to recognize the sale made by their predecessors. This action accrued only when appellant, initiated
their suit to recover the land in 1954. Furthermore, it is an established rule of American jurisprudence (made applicable in this
jurisdiction by Art. 480 of the New Civil Code) that actions to quiet title to property in the possession of the plaintiff are
imprescriptible (44 Am. Jur. p. 47; Cooper vs. Rhea, 39 L. R. A. 930; Inland Empire Land Co. vs. Grant County, 138 Wash. 439, 245
Pac. 14).

The prevailing rule is that the right of a plaintiff to have his title to land quieted, as against one who is asserting some
adverse claim or lien thereon, is not barred while the plaintiff or his grantors remain in actual possession of the land,
claiming to be owners thereof, the reason for this rule being that while the owner in fee continues liable to an action,
proceeding, or suit upon the adverse claim, he has a continuing right to the aid of a court of equity to ascertain and
determine the nature of such claim and its effect on his title, or to assert any superior equity in his favor. He may wait
until his possession is disturbed or his title is attacked before taking steps to vindicate his right. But the rule that the
statute of limitations is not available as a defense to an action to remove a cloud from title can only be invoked by a
complaint when he is in possession. One who claims property which is in the possession of another must, it seems,
invoke his remedy within the statutory period. (44 Am. Jur., p. 47)

Wherefore, the judgment appealed from is affirmed. Costs against appellants. So ordered.
G.R. No. L-38745 August 6, 1975

LUCIA TAN, plaintiff-appellee,

vs.
ARADOR VALDEHUEZA and REDICULO VALDEHUEZA, defendants-appellants.

This appeal was certified to this Court by the Court of Appeals as involving questions purely of law.

The decision a quo was rendered by the Court of First Instance of Misamis Occidental (Branch I) in an action instituted by the
plaintiff-appellee Lucia Tan against the defendants-appellants Arador Valdehueza and Rediculo Valdehueza (docketed as civil case
2574) for (a) declaration of ownership and recovery of possession of the parcel of land described in the first cause of action of
the complaint, and (b) consolidation of ownership of two portions of another parcel of (unregistered) land described in
the second cause of action of the complaint, purportedly sold to the plaintiff in two separate deeds of pacto de retro.

After the issues were joined, the parties submitted the following stipulation of facts:

1. That parties admit the legal capacity of plaintiff to sue; that defendants herein, Arador, Rediculo, Pacita,
Concepcion and Rosario, all surnamed Valdehueza, are brothers and sisters; that the answer filed by Arador
and Rediculo stand as the answer of Pacita, Concepcion and Rosario.

2. That the parties admit the identity of the land in the first cause of action.

3. That the parcel of land described in the first cause of action was the subject matter of the public auction sale
held on May 6, 1955 at the Capitol Building in Oroquieta, Misamis Occidental, wherein the plaintiff was the
highest bidder and as such a Certificate of Sale was executed by MR. VICENTE D. ROA who was then the Ex-
Officio Provincial Sheriff in favor of LUCIA TAN the herein plaintiff. Due to the failure of defendant Arador
Valdehueza to redeem the said land within the period of one year as being provided by law, MR. VICENTE D.
ROA who was then the Ex-Officio Provincial Sheriff executed an ABSOLUTE DEED OF SALE in favor of the
plaintiff LUCIA TAN.

A copy of the NOTICE OF SHERIFFS SALE is hereby marked as 'Annex A', the CERTIFICATE OF SALE is marked as
'Annex B' and the ABSOLUTE DEED OF SALE is hereby marked as Annex C and all of which are made as integral
parts of this stipulation of facts.

4. That the party-plaintiff is the same plaintiff in Civil Case No. 2002; that the parties defendants Arador,
Rediculo and Pacita, all Valdehueza were the same parties-defendants in the same said Civil Case No. 2002; the
complaint in Civil Case No. 2002 to be marked as Exhibit 1; the answer as Exhibit 2 and the order dated May 22,
1963 as Exhibit 3, and said exhibits are made integral part of this stipulation.

5. That defendants ARADOR VALDEHUEZA and REDICULO VALDEHUEZA have executed two documents of DEED
OF PACTO DE RETRO SALE in favor of the plaintiff herein, LUCIA TAN of two portions of a parcel of land which is
described in the second cause of action with the total amount of ONE THOUSAND FIVE HUNDRED PESOS
(P1,500.00), Philippine Currency, copies of said documents are marked as 'Annex D' and Annex E', respectively
and made as integral parts of this stipulation of facts.

6. That from the execution of the Deed of Sale with right to repurchase mentioned in the second cause of
action, defendants Arador Valdehueza and Rediculo Valdehueza remained in the possession of the land; that
land taxes to the said land were paid by the same said defendants.

Civil case 2002 referred to in stipulation of fact no. 4 was a complaint for injunction filed by Tan on July 24,
1957 against the Valdehuezas, to enjoin them "from entering the above-described parcel of land and gathering
the nuts therein ...." This complaint and the counterclaim were subsequently dismissed for failure of the parties
"to seek for the immediate trial thereof, thus evincing lack of interest on their part to proceed with the case. 1

The Deed of Pacto de Retro referred to in stipulation of fact no. 5 as "Annex D" (dated August 5, 1955) was not registered in the
Registry of Deeds, while the Deed of Pacto de Retro referred to as "Annex E" (dated March 15, 1955) was registered.

On the basis of the stipulation of facts and the annexes, the trial court rendered judgment, as follows:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff:

 1. Declaring Lucia Tan the absolute owner of the property described in the first cause of action of the amended
complaint; and ordering the herein defendants not to encroach and molest her in the exercise of her
proprietary rights; and, from which property they must be dispossessed;

2. Ordering the defendants, Arador Valdehueza and Rediculo Valdehueza jointly and severally to pay to the
plaintiff, Lucia Tan, on Annex 'E' the amount of P1,200, with legal interest of 6% as of August 15, 1966, within
90 days to be deposited with the Office of the Court within 90 days from the date of service of this decision,
and that in default of such payment the property shall be sold in accordance with the Rules of Court for the
release of the mortgage debt, plus costs;

3. And as regards the land covered by deed of pacto de retro annex 'D', the herein defendants Arador
Valdehueza and Rediculo Valdehueza are hereby ordered to pay the plaintiff the amount of P300 with legal
interest of 6% from August 15, 1966, the said land serving as guaranty of the said amount of payment;

4. Sentencing the defendants Arador Valdehueza and Rediculo Valdehueza to pay jointly and severally to the
herein plaintiff Lucia Tan the amount of 1,000.00 as attorney's fees; and .

5. To pay the costs of the proceedings.

The Valdehuezas appealed, assigning the following errors:

That the lower court erred in failing to adjudge on the first cause of action that there exists res judicata; and

That the lower court erred in making a finding on the second cause of action that the transactions between the
parties were simple loan, instead, it should be declared as equitable mortgage.

We affirm in part and modify in part.

1. Relying on Section 3 of Rule 17 of the Rules of Court which pertinently provides that a dismissal for failure to prosecute "shall
have the effect of an adjudication upon the merits," the Valdehuezas submit that the dismissal of civil case 2002 operated, upon
the principle of res judicata, as a bar to the first cause of action in civil case 2574. We rule that this contention is untenable as the
causes of action in the two cases are not identical. Case 2002 was for injunction against the entry into and the gathering of nuts
from the land, while case 2574 seeks to "remove any doubt or cloud of the plaintiff's ownership ..." (Amended complaint, Rec. on
App., p. 27), with a prayer for declaration of ownership and recovery of possession.

Applying the test of absence of inconsistency between prior and subsequent judgments, 2 we hold that the failure of Tan, in case
2002, to secure an injunction against the Valdehuezas to prevent them from entering the land and gathering nuts is not
inconsistent with her being adjudged, in case 2574, as owner of the land with right to recover possession thereof. Case 2002
involved only the possession of the land and the fruits thereof, while case 2574 involves ownership of the land, with possession
as a mere attribute of ownership. The judgment in the first case could not and did not encompass the judgment in the second,
although the second judgment would encompass the first. Moreover, the new Civil Code provides that suitors in actions to quiet
title "need not be in possession of said property. 3

2. The trial court treated the registered deed of pacto de retro as an equitable mortgage but considered the unregistered deed
of pacto de retro "as a mere case of simple loan, secured by the property thus sold under pacto de retro," on the ground that no
suit lies to foreclose an unregistered mortgage. It would appear that the trial judge had not updated himself on law and
jurisprudence; he cited, in support of his ruling, article 1875 of the old Civil Code and decisions of this Court circa 1910 and 1912.

Under article 1875 of the Civil Code of 1889, registration was a necessary requisite for the validity of a mortgage even as
between the parties, but under article 2125 of the new Civil Code (in effect since August 30,1950), this is no longer so. 4

If the instrument is not recorded, the mortgage is nonetheless binding between the parties. (Article 2125, 2nd
sentence).

The Valdehuezas having remained in possession of the land and the realty taxes having been paid by them, the contracts which
purported to be pacto de retro transactions are presumed to be equitable mortgages, 5 whether registered or not, there being no
third parties involved.

3. The Valdehuezas claim that their answer to the complaint of the plaintiff affirmed that they remained in possession of the land
and gave the proceeds of the harvest to the plaintiff; it is thus argued that they would suffer double prejudice if they are to pay
legal interest on the amounts stated in the pacto de retro contracts, as the lower court has directed, and that therefore the court
should have ordered evidence to be adduced on the harvest.

The record does not support this claim. Nowhere in the original and the amended complaints is an allegation of delivery to the
plaintiff of the harvest from the land involved in the second cause of action. Hence, the defendants' answer had none to affirm.

In submitting their stipulation of facts, the parties prayed "for its approval and maybe made the basis of the decision of this
Honorable Court. " (emphasis supplied) This, the court did. It cannot therefore be faulted for not receiving evidence on who
profited from the harvest.

4. The imposition of legal interest on the amounts subject of the equitable mortgages, P1,200 and P300, respectively, is without
legal basis, for, "No interest shall be due unless it has been expressly stipulated in writing." (Article 1956, new Civil Code)
Furthermore, the plaintiff did not pray for such interest; her thesis was a consolidation of ownership, which was properly
rejected, the contracts being equitable mortgages.

With the definitive resolution of the rights of the parties as discussed above, we find it needless to pass upon the plaintiffs
petition for receivership. Should the circumstances so warrant, she may address the said petition to the court a quo.

ACCORDINGLY, the judgment a quo is hereby modified, as follows: (a) the amounts of P1,200 and P300 mentioned in Annexes E
and D shall bear interest at six percent per annum from the finality of this decision; and (b) the parcel of land covered by Annex D
shall be treated in the same manner as that covered by Annex E, should the defendants fail to pay to the plaintiff the sum of
P300 within 90 days from the finality of this decision. In all other respects the judgment is affirmed. No costs.

April 20, 2016

G.R. No. 200274

MELECIO DOMINGO, Petitioner,

vs.
SPOUSES GENARO MOLINA and ELENA B. MOLINA, substituted by ESTER MOLINA, Respondents.

We resolve the petition for review on certiorari1 filed by the petitioner Melecio Domingo (Melecio) assailing the August 9, 2011
decision2 and January 10, 2012 resolution3 of the Court of Appeals (CA) in CA-G.R. CV No. 94160.

THE FACTS

In June 15, 1951, the spouses Anastacio and Flora Domingo bought a property in Camiling, Tarlac, consisting of a one-half
undivided portion over an 18, 164 square meter parcel of land. The sale was annotated on the Original Certificate of
Title (OCT) No. 16354 covering the subject property.

During his lifetime, Anastacio borrowed money from the respondent spouses Genaro and Elena Molina (spouses Molina). On
September 10, 1978 or 10 years after Flora’s death 4, Anastacio sold his interest over the land to the spouses Molina to answer for
his debts. The sale to the spouses Molina was annotated at the OCT of the subject property. 5 In 1986, Anastacio died.6

In May 19, 1995, the sale of Anastacio’s interest was registered under Transfer Certificate of Title (TCT) No. 272967[[7 ]]and
transferred the entire one-half undivided portion of the land to the spouses Molina.

Melecio, one of the children of Anastacio and Flora, learned of the transfer and filed a Complaint for Annulment of Title and
Recovery of Ownership (Complaint) against the spouses Molina on May 17, 1999.8

Melecio claims that Anastacio gave the subject property to the spouses Molina to serve as collateral for the money that
Anastacio borrowed. Anastacio could not have validly sold the interest over the subject property without Flora’s consent, as Flora
was already dead at the time of the sale.

Melecio also claims that Genaro Molina must have falsified the document transferring Anastacio and Flora’s one-half undivided
interest over the land. Finally, Melecio asserts that he occupied the subject property from the time of Anastacio’s death up to the
time he filed the Complaint.9

Melecio presented the testimonies of the Records Officer of the Register of Deeds of Tarlac, and of Melecio’s nephew, George
Domingo (George).10

The Records Officer testified that he could not locate the instrument that documents the transfer of the subject property
ownership from Anastacio to the spouses Molina. The Records Officer also testified that the alleged sale was annotated at the
time when Genaro Molina’s brother was the Register of Deeds for Camiling, Tarlac. 11

George, on the other hand, testified that he has been living on the subject property owned by Anastacio since 1986. George
testified, however, that aside from himself, there were also four other occupants on the subject property, namely Jaime Garlitos,
Linda Sicangco, Serafio Sicangco and Manuel Ramos.12

The spouses Molina asserted that Anastacio surrendered the title to the subject property to answer for his debts and told the
spouses Molina that they already own half of the land. The spouses Molina have been in possession of the subject property
before the title was registered under their names and have religiously paid the property’s real estate taxes.

The spouses Molina also asserted that Melecio knew of the disputed sale since he accompanied Anastacio several times to
borrow money. The last loan was even used to pay for Melecio’s wedding. Finally, the spouses Molina asserted that Melecio built
his nipa hut on the subject property only in 1999, without their knowledge and consent. 13

The spouses Molina presented Jaime Garlitos (Jaime) as their sole witness and who is one of the occupants of the subject lot.

Jaime testified that Elena Molina permitted him to build a house on the subject property in 1993. Jaime, together with the other
tenants, planted fruit bearing trees on the subject property and gave portions of their harvest to Elena Molina without any
complaint from Melecio. Jaime further testified that Melecio never lived on the subject property and that only George Domingo,
as the caretaker of the spouses Molina, has a hut on the property.
Meanwhile, the spouses Molina died during the pendency of the case and were substituted by their adopted son, Cornelio
Molina.14

THE RTC RULING

The Regional Trial Court (RTC) dismissed15 the case because Melecio failed to establish his claim that Anastacio did not sell the
property to the spouses Molina.

The RTC also held that Anastacio could dispose of conjugal property without Flora’s consent since the sale was necessary to
answer for conjugal liabilities.

The RTC denied Melecio’s motion for reconsideration of the RTC ruling. From this ruling, Melecio proceeded with his appeal to
the CA.

THE CA RULING

In a decision dated August 9, 2011, the CA affirmed the RTC ruling in toto.

The CA held that Melecio failed to prove by preponderant evidence that there was fraud in the conveyance of the property to the
spouses Molina. The CA gave credence to the OCT annotation of the disputed property sale.

The CA also held that Flora’s death is immaterial because Anastacio only sold his rights, excluding Flora’s interest, over the lot to
the spouses Molina.1âwphi1 The CA explained that "[t]here is no prohibition against the sale by the widower of real property
formerly belonging to the conjugal partnership of gains" 16.

Finally, the CA held that Melecio’s action has prescribed. According to the CA, Melecio failed to file the action within one year
after entry of the decree of registration.

Melecio filed a motion for reconsideration of the CA Decision. The CA denied Melecio’s motion for reconsideration for lack of
merit.17

THE PETITION

Melecio filed the present petition for review on certiorari to challenge the CA ruling.

Melecio principally argues that the sale of land belonging to the conjugal partnership without the wife’s consent is invalid.

Melecio also claims that fraud attended the conveyance of the subject property and the absence of any document evidencing
the alleged sale made the transfer null and void. Finally, Melecio claims that the action has not yet prescribed.

The respondents, on the other hand, submitted and adopted their arguments in their Appeal Brief 18.

First, Melecio’s counsel admitted that Anastacio had given the lot title in payment of the debt amounting to Php30,000.00. The
delivery of the title is constructive delivery of the lot itself based on Article 1498, paragraph 2 of

the Civil Code.

Second, the constructive delivery of the title coupled with the spouses Molina’s exercise of attributes of ownership over the
subject property, perfected the sale and completed the transfer of ownership.

THE ISSUES

The core issues of the petition are as follows: (1) whether the sale of a conjugal property to the spouses Molina without Flora’s
consent is valid and legal; and (2) whether fraud attended the transfer of the subject property to the spouses Molina.

OUR RULING

We deny the petition.

It is well settled that when the trial court’s factual findings have been affirmed by the CA, the findings are generally conclusive
and binding upon the Court and may no longer be reviewed on Rule 45 petitions. 19 While there are exceptions20 to this rule, the
Court finds no applicable exception with respect to the lower courts’ finding that the subject property was Anastacio and Flora’s
conjugal property. Records before the Court show that the parties did not dispute the conjugal nature of the property.

Melecio argues that the sale of the disputed property to the spouses Molina is void without Flora’s consent.

We do not find Melecio’s argument meritorious.

Anastacio and Flora’s

conjugal partnership was
dissolved upon Flora’s death.

There is no dispute that Anastacio and Flora Domingo married before the Family Code’s effectivity on August 3, 1988 and their
property relation is a conjugal partnership.21

Conjugal partnership of gains established before and after the effectivity of the Family Code are governed by the rules found in
Chapter 4 (Conjugal Partnership of Gains) of Title IV (Property Relations Between Husband and Wife) of the Family Code. This is
clear from Article 105 of the Family Code which states:

x x x The provisions of this Chapter shall also apply to conjugal partnerships of gains already established between spouses before
the effectivity of this Code, without prejudice to vested rights already acquired in accordance with the Civil Code or other laws, as
provided in Article 256.

The conjugal partnership of Anastacio and Flora was dissolved when Flora died in 1968, pursuant to Article 175 (1) of the Civil
Code22 (now Article 126 (1) of the Family Code).

Article 130 of the Family Code requires the liquidation of the conjugal partnership upon death of a spouse and prohibits any
disposition or encumbrance of the conjugal property prior to the conjugal partnership liquidation, to quote:

Article 130. Upon the termination of the marriage by death, the conjugal partnership property shall be liquidated in the same
proceeding for the settlement of the estate of the deceased.

If no judicial settlement proceeding is instituted, the surviving spouse shall liquidate the conjugal partnership property either
judicially or extrajudicially within one year from the death of the deceased spouse. If upon the lapse of the six month period no
liquidation is made, any disposition or encumbrance involving the conjugal partnership property of the terminated marriage
shall be void. x x x (emphases supplied)

While Article 130 of the Family Code provides that any disposition involving the conjugal property without prior liquidation of the
partnership shall be void, this rule does not apply since the provisions of the Family Code shall be "without prejudice to vested
rights already acquired in accordance with the Civil Code or other laws." 23

An implied co-ownership
among Flora’s heirs governed
the conjugal properties
pending liquidation and
partition.

In the case of Taningco v. Register of Deeds of Laguna,24 we held that the properties of a dissolved conjugal partnership fall under
the regime of co-ownership among the surviving spouse and the heirs of the deceased

spouse until final liquidation and partition. The surviving spouse, however, has an actual and vested one-half undivided share of
the properties, which does not consist of determinate and segregated properties until liquidation

and partition of the conjugal partnership.

An implied ordinary co-ownership ensued among Flora’s surviving heirs, including Anastacio, with respect to Flora’s share of the
conjugal partnership until final liquidation and partition; Anastacio, on the other hand, owns one-half of the original conjugal
partnership properties as his share, but this is an undivided interest.
Article 493 of the Civil Code on co-ownership provides:

Article 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and
he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal
rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the
portion which may be allotted to him in the division upon the termination of the co-ownership. (399) (emphases supplied)

Thus, Anastacio, as co-owner, cannot claim title to any specific portion of the conjugal properties without an actual partition
being first done either by agreement or by judicial decree. Nonetheless, Anastacio had the right to freely sell and dispose of his
undivided interest in the subject property.

The spouses Molina became

co-owners of the subject
property to the extent of
Anastacio’s interest.

The OCT annotation of the sale to the spouses Molina reads that "[o]nly the rights, interests and participation of Anastacio
Domingo, married to Flora Dela Cruz, is hereby sold, transferred, and conveyed unto the said vendees for the sum of ONE
THOUSAND PESOS (P1,000.00) which pertains to an undivided one-half (1/2) portion and subject to all other conditions
specified in the document x x x"25 (emphases supplied). At the time of the sale, Anastacio’s undivided interest in the conjugal
properties consisted of: (1) one-half of the entire conjugal properties; and (2) his share as Flora’s heir on the conjugal properties.

Anastacio, as a co-owner, had the right to freely sell and dispose of his undivided interest, but not the interest of his co-owners.
Consequently, Anastactio’s sale to the spouses Molina without the consent of the other co-owners was not totally void, for
Anastacio’s rights or a portion thereof were thereby effectively transferred, making the spouses Molina a co-owner of the subject
property to the extent of Anastacio’s interest. This result conforms with the well-established principle that the binding force of a
contract must be recognized as far as it is legally possible to do so (quando res non valet ut ago, valeat quantum valere potest).26

The spouses Molina would be a trustee for the benefit of the co-heirs of Anastacio in respect of any portion that might belong to
the co-heirs after liquidation and partition. The observations of Justice Paras cited in the case of Heirs of Protacio Go, Sr. V.
Servacio27 are instructive:

x x x [I]f it turns out that the property alienated or mortgaged really would pertain to the share of the surviving spouse, then said
transaction is valid. If it turns out that there really would be, after liquidation, no more conjugal assets then the whole
transaction is null and void. But if it turns out that half of the property thus alienated or mortgaged belongs to the husband as his
share in the conjugal partnership, and half should go to the estate of the wife, then that corresponding to the husband is valid,
and that corresponding to the other is not. Since all these can be determined only at the time the liquidation is over, it follows
logically that a disposal made by the surviving spouse is not void ab initio. Thus, it has been held that the sale of conjugal
properties cannot be made by the surviving spouse without the legal requirements. The sale is void as to the share of the
deceased spouse (except of course as to that portion of the husband’s share inherited by her as the surviving spouse). The
buyers of the property that could not be validly sold become trustees of said portion for the benefit of the husband’s other heirs,
the cestui que trust ent. Said heirs shall not be barred by prescription or by laches.

Melecio’s recourse as a co-owner of the conjugal properties, including the subject property, is an action for partition under Rule
69 of the Revised Rules of Court. As held in the case of Heirs of Protacio Go, Sr., "it is now settled that the appropriate recourse of
co-owners in cases where their consent were not secured in a sale of the entire property as well as in a sale merely of the
undivided shares of some of the co-owners is an action for PARTITION under Rule 69 of the Revised Rules of Court." 28

The sale of the subject

property to the spouses Molina
was not attended with fraud.

On the issue of fraud, the lower courts found that there was no fraud in the sale of the disputed property to the spouses Molina.

The issue of fraud would require the Court to inquire into the weight of evidentiary matters to determine the merits of the
petition and is essentially factual in nature. It is basic that factual questions cannot be cannot be entertained in a Rule 45
petition, unless it falls under any of the recognized exceptions 29 found in jurisprudence. The present petition does not show that
it falls under any of the exceptions allowing factual review.

The CA and RTC conclusion that there is no fraud in the sale is supported by the evidence on record.
Melecio' s argument that no document was executed for the sale is negated by the CA finding that there was a notarized deed of
conveyance executed between Anastacio and the spouses Molina, as annotated on the OCT of the disputed property.

Furthermore, Melecio's belief that Anastacio could not have sold the property without his knowledge cannot be considered as
proof of fraud to invalidate the spouses Molina's registered title over the subject property. 30

Prevailing jurisprudence uniformly holds that findings of facts of the trial court, particularly when affirmed by the Court of
Appeals, are binding upon t his court. 31

Considering these findings, we find no need to discuss the other issues raised by Melecio.

WHEREFORE, we hereby DENY the petition for review on certiorari. The decision dated August 9, 2011 of the Court of Appeals in
CA-G.R. CV No. 94160 is AFFIRMED.

SO ORDERED.
 G.R. No. 173140, January 11, 2016

MACTAN CEBU INTERNATIONAL AIRPORT AUTHORITY [MCIAA], Petitioner, v. HEIRS OF GAVINA IJORDAN, NAMELY, JULIAN
CUISON, FRANCISCA CUISON, DAMASTNA CUISON, PASTOR CUISON, ANGELINA CUISON, MANSUETO CUISON, BONIFACIA
CUISON, BASILIO CUISON, MOISES CUISON, AND FLORENCIO CUISON, Respondents.

A sale of jointly owned real property by a co-owner without the express authority of the others is unenforceable against the
latter, but valid and enforceable against the seller.chanRoblesvirtualLawlibrary

The Case

This appeal assails the decision promulgated on February 22, 2006 in CA-G.R. CV No. 61509, 1 whereby the Court of Appeals (CA)
affirmed the orders issued by the Regional Trial Court, Branch 53, in Lapu-Lapu City (RTC) on September 2, 1997, 2 and March 6,
1998.3chanRoblesvirtualLawlibrary

Antecedents

On October 14, 1957, Julian Cuizon (Julian) executed a Deed of Extrajudicial Settlement and Sale 4(Deed) covering Lot No. 4539
(subject lot) situated in Ibo, Municipality of Opon (now Lapu-Lapu City) in favor of the Civil Aeronautics Administration ((CAA),
the predecessor-in-interest of petitioner Manila Cebu International Airport Authority (MCIAA). Since then until the present,
MCIAA rejmained in material, continuous, uninterrupted and adverse possession of the subject lot through the CAA, later
renamed the Bureau of Air Transportation (BAT), and is presently known as the Air Transportation Office (ATO). The subject lot
was transferred and conveyed to MCIAA by virtue of Republic Act No. 6958.

In 1980, the respondents caused the judicial reconstitution of the original certificate of title covering the subject lot (issued by
virtue of Decree No. 531167). Consequently, Original Certificate of Title (OCT) No. RO-2431 of the Register of Deeds of Cebu was
reconstituted for Lot No. 4539 in the names of the respondents' predecessors-in-interest, namely, Gavina Ijordan, and Julian,
Francisca, Damasina, Marciana, Pastor, Angela, Mansueto, Bonifacia, Basilio, Moises and Florencio, all surnamed Cuison. 5 The
respondents' ownership of the subject lot was evidenced by OCT No. RO-2431. They asserted that they had not sold their shares
in the subject lot, and had not authorized Julian to sell their shares to MCIAA's predecessor-in-
interest.6chanroblesvirtuallawlibrary

The failure of the respondents to surrender the owner's copy of OCT No. RO-2431 prompted MCIAA to sue them for the
cancellation of title in the RTC, 7 alleging in its complaint that the certificate of title conferred no right in favor of the respondents
because the lot had already been sold to the Government in 1957; that the subject lot had then been declared for taxation
purposes under Tax Declaration No. 00387 in the name of the BAT; and that by virtue of the Deed, the respondents came under
the legal obligation to surrender the certificate of title for cancellation to enable the issuance of a new one in its name.

At the trial, MCIAA presented Romeo Cueva, its legal assistant, as its sole witness who testified that the documents pertaining to
the subject lot were the Extrajudicial Settlement and Sale and Tax Declaration No. 00387 in the name of the BAT; and that the
subject lot was utilized as part of the expansion of the Mactan Export Processing Zone Authority I. 8chanroblesvirtuallawlibrary

After MCIAA's presentation of evidence, the respondents moved to dismiss the complaint upon the Demurrer to Evidence dated
February 3, 1997,9 contending that the Deed and Tax Declaration No. 00387 had no probative value to support MCIAA's cause of
action and its prayer for relief. They cited Section 3, Rule 130 of the Rules of Court which provided that "when the subject of
inquiry is the contents of a document, no evidence shall be admissible other than the original document itself." They argued that
what MCIAA submitted was a mere photocopy of the Deed; that even assuming that the Deed was a true reproduction of the
original, the sale was unenforceable against them because it was only Julian who had executed the same without obtaining their
consent or authority as his co-heirs; that Article 1317 of the Civil Code provided that "no one may contract in the name of
another without being authorized by the latter, or unless he has by law a right to represent him;" and that the tax declaration
had no probative value by virtue of its having been derived from the unenforceable sale.

MCIAA opposed the Demurrer to Evidence in due course.10chanroblesvirtuallawlibrary

In its order dated September 2, 1997,11 the RTC dismissed MCIAA's complaint insofar as it pertained to the shares of the
respondents in Lot No. 4539 but recognized the sale as to the 1/22 share of Julian, disposing as follows:

Wherefore, in the light of the foregoing considerations, defendants' demurrer to evidence is granted with qualification.
Consequently, plaintiffs complaint is hereby dismissed insofar as it pertains to defendants' shares of Lot No. 4539, as reflected in
Original Certificate of Title No. RO 2431. Plaintiff, however, is hereby declared the owner of 1/22 share of Lot No. 4539. In this
connection, the Register of Deeds of Lapu-Lapu City is hereby directed to effect the necessary change in OCT No. RO-2431 by
replacing as one of the registered owners, "Julian Cuizon, married to Marcosa Cosef", with the name of plaintiff. No
pronouncement as to costs.

SO ORDERED.12chanroblesvirtuallawlibrary

The RTC observed that although it appeared from the Deed that vendor Julian was the only heir of the late Pedro Cuizon, thereby
adjudicating unto himself the whole of Lot No. 4539, it likewise appeared from the same Deed that the subject lot was covered
by Cadastral Case No. 20, and that Decree No. 531167 had been issued on July 29, 1930; that having known that the subject lot
had been covered by the decree issued long before the sale took place, the more appropriate thing that MCIAA or its
representatives should have done was to check the decreed owners of the lot, instead of merely relying on the tax declaration
issued in the name of Pedro Cuizon and on the statement of Julian; that the supposedly uninterrupted possession by MCIAA and
its predecessors-in-interest was not sufficiently established, there being no showing of the improvements introduced on the
property; and that even assuming that MCIAA had held the material possession of the subject lot, the respondents had remained
the registered owners of Lot No. 4539 and could not be prejudiced by prescription.

MCIAA moved for reconsideration,13 but the RTC denied its motion on March 6, 1998.14chanroblesvirtuallawlibrary

MCIAA appealed to the CA, submitting that:15chanroblesvirtuallawlibrary

I. THE TRIAL COURT ERRED IN RULING THAT ONLY THE SHARE OF JULIAN CUIZON WAS SOLD TO PLAINTIFF- APPELLANT WAY
BACK IN 1957.

II. THE TRIAL COURT ERRED IN DISREGARDING THE UN EXPLAINED, UNREASONABLE AND TEDIOUS INACTION OF DEFENDANT-
APPELLEES WHICH CONSTITUTE THEIR IMPLIED RATIFICATION OF THE SALE WHICH THEY CANNOT NOW CONVENIENTLY IMPUGN
IN ORDER TO TAKE ADVANTAGE OF THE PHENOMENAL RISE IN LAND VALUES IN MACTAN ISLAND.

III. THE TRIAL COURT ERRED IN RULING THAT PLAINTIFF- APPELLANT HAS NOT PROVEN POSSESSION OVER SAID LOT.

IV. THE TRIAL COURT ERRED IN NOT CONSIDERING MOTO- PROPRIO DEFENDANTS-APPELLEES AS GUILTY OF LACHES AND/OR
ESTOPPEL IN THE FACE OF CLEAR EVIDENCE FROM THE VERY FACTS OF THE CASE ITSELF; IT SHOULD BE NOTED, MOREVER THAT
IT WAS PLAINTIFF-APPELLANT WHO INITIATED THE COMPLAINT HENCE THE SAME COULD NOT PROPERLY BE RAISED AS
DEFENSES HEREIN BY PLAINTIFF- APPELLANT.

V. THE TRIAL COURT ERRED IN DISREGARDING THE VALID PROVISION OF THE EXTRAJUDICIAL SETTLEMENT AND SALE THAT
DEFENDANTS-APPELLEES MERELY HOLD THE TITLE IN TRUST FOR PLAINTIFF-APPELLANT AND ARE THEREFORE. OBLIGATED TO
SURRENDER THE SAME TO PLAINTIFF-APPELLANT SO THE TITLE COULD BE TRANSFERRED TO IT AS THE VENDEE WAY BACK IN
1957.

In the assailed decision promulgated on February 22, 2006, 16 the CA affirmed the orders of the RTC issued on September 2,
199717 and March 6, 1998.18chanroblesvirtuallawlibrary

The CA subsequently denied MCIAA's motion for reconsideration 19 on June 15, 2006.20chanRoblesvirtualLawlibrary

Issues

In this appeal, MCIAA submits the following grounds: 21chanroblesvirtuallawlibrary

THE COURT OF APPEALS GRAVELY ERRED IN NOT CONSIDERING THE FOLLOWING:

I. RESPONDENTS WERE FULLY AWARE OF THE SALE OF THE SUBJECT LOT IN 1957 AND PETITIONER'S
CONTINUOUS POSSESSION THEREOF.

II. RESPONDENTS' INACTION FOR MORE THAN THIRTY (30) YEARS TO RECOVER POSSESSION OF THE LOT
AMOUNTS TO AN IMPLIED RATIFICATION OF THE SALE.

III. PETITIONER'S POSSESSION OF THE LOT SINCE 1957 IS BORNE BY THE CASE RECORD.

IV. RESPONDENTS ARE CLEARLY GUILTY OF ESTOPPEL BY LACHES, WHICH LEGALLY BARS THEM FROM RECOVERING
POSSESSION OF THE LOT.

In other words, was the subject lot validly conveyed in its entirety to the petitioner?

In support of its appeal, MCIAA insists that the respondents were fully aware of the transaction with Julian from the time of the
consummation of the sale in 1957, as well as of its continuous possession thereof; 22 that what was conveyed by Julian to its
predecessor-in-interest, the CAA, was the entirety of Lot No. 4539, consisting of 12,012 square meters, not just his share of 1/22
of the whole lot; that the respondents were guilty of inexplicable inaction as to the sale, which manifested their implied
ratification of the supposedly unauthorized act of Julian of selling the subject lot in 1957; that although the respondents were
still minors at the time of the execution of the sale, their ratification of Julian's act became evident from the fact that they had
not impugned the sale upon reaching the age of majority; that they asserted their claim only after knowing of the phenomenal
rise in the value of the lot in the area despite their silence for more than 30 years; and that they did not assert ownership for a
long period, and did not exercise physical and constructive possession by paying the taxes or declaring the property for taxation
purposes.

On their part, the respondents aver that they were not aware of the sale of the subject lot in 1957 because the sale was not
registered, and because the subject lot was not occupied by MCIAA or its lessee; 23 that they became aware of the claim of MCIAA
only when its representative tried to intervene during the reconstitution of the certificate of title in 1980; and that one of the co-
owners of the property, Moises Cuison, had been vigilant in preventing the occupation of the subject lot by other
persons.chanRoblesvirtualLawlibrary

Ruling of the Court

The appeal has no merit.

Firstly, both the CA and the RTC found the Deed and the Tax Declaration with which MCIAA would buttress its right to the
possession and ownership of the subject lot insufficient to substantiate the right of MCIAA to the relief sought. Considering that
possession was a factual matter that the lower courts had thoroughly examined and based their findings on, we cannot undo
their findings. We are now instead bound and concluded thereby in accordance with the well-established rule that the findings of
fact of the trial court, when affirmed by the CA, are final and conclusive. Indeed, the Court is not a trier of facts. Moreover, this
mode of appeal is limited to issues of law; hence, factual findings should not be reviewed unless there is a showing of an
exceptional reason to review them. Alas, that showing is not made.

Secondly, the CA and the RTC concluded that the Deed was void as far as the respondents' shares in the subject lot were
concerned, but valid as to Julian's share. Their conclusion was based on the absence of the authority from his co-heirs in favor of
Julian to convey their shares in the subject lot. We have no reason to overturn the affirmance of the CA on the issue of the
respondents' co-ownership with Julian. Hence, the conveyance by Julian of the entire property pursuant to the Deed did not bind
the respondents for lack of their consent and authority in his favor. As such, the Deed had no legal effect as to their shares in the
property. Article 1317 of the Civil Code provides that no person could contract in the name of another without being authorized
by the latter, or unless he had by law a right to represent him; the contract entered into in the name of another by one who has
no authority or legal representation, or who has acted beyond his powers, is unenforceable, unless it is ratified, expressly or
impliedly, by the person on whose behalf it has been executed, before it is revoked by the other contracting party. But the
conveyance by Julian through the Deed had full force and effect with respect to his share of 1/22 of the entire property
consisting of 546 square meters by virtue of its being a voluntary disposition of property on his part. As ruled in Torres v.
Lapinid24:

x x x even if a co-owner sells the whole property as his, the sale will affect only his own share but not those of the other co-
owners who did not consent to the sale. This is because the sale or other disposition of a co-owner affects only his undivided
share and the transferee gets only what would correspond to his grantor in the partition of the thing owned in common.

MCIAA's assertion of estoppel or ratification to bar the respondents' contrary claim of ownership of their shares in the subject lot
is bereft of substance. The doctrine of estoppel applied only to those who were parties to the contract and their privies or
successors-in-interest.25 Moreover, the respondents could not be held to ratify the contract that was declared to be null and void
with respect to their share, for there was nothing for them to ratify. Verily, the Deed, being null and void, had no adverse effect
on the rights of the respondents in the subject lot.

Lastly, MCIAA's contention on acquisitive prescription in its favor must fail. Aside from the absence of the satisfactory showing of
MCIAA's supposed possession of the subject lot, no acquisitive prescription could arise in view of the indefeasibility of the
respondents' Torrens title. Under the Torrens System, no adverse possession could deprive the registered owners of their title by
prescription.26 The real purpose of the Torrens System is to quiet title to land and to stop any question as to its legality forever.
Thus, once title is registered, the owner may rest secure, without the necessity of waiting in the portals of the court, or sitting on
the mirador su casa to avoid the possibility of losing his land.27chanroblesvirtuallawlibrary

WHEREFORE, the Court DENIES the petition for review on certiorari; and AFFIRMS the decision promulgated on February 22,
2006.

No pronouncement on costs of suit.

G.R. No. 187987 November 26, 2014

VICENTE TORRES, JR., CARLOS VELEZ, AND THE HEIRS OF MARIANO VELEZ, NAMELY: ANITA CHIONG VELEZ, ROBERT OSCAR
CHIONG VELEZ, SARAH JEAN CHIONG VELEZ AND TED CHIONG VELEZ,Petitioners,
vs.
LORENZO LAPINID AND JESUS VELEZ, Respondents.

This is a Petition for Review on Certiorari 1 under Rule 45 of the Rules of Court filed by the petitioners assailing the 30 January
2009 Decision2 and 14 May 2009 Resolution3 of the Twentieth Division of the Corni of Appeals in CA-G.R. CV No. 02390, affirming
the 15 October 2007 Decision4 of the Regional Trial Court of Cebu City (RTC Cebu City) which dismissed the complaint for the
declaration of nullity of deed of sale against respondent Lorenzo Lapinid (Lapinid).

The facts as reviewed are the following:

On 4 February 2006, Vicente V. Torres, Jr. (Vicente), Mariano Velez (Mariano) 5 and Carlos Velez (petitioners) filed a
Complaint6 before RTC Cebu City praying for the nullification of the sale of real property by respondent Jesus Velez (Jesus) in
favor of Lapinid; the recovery of possession and ownership of the property; and the payment of damages.

Petitioners alleged in their complaint that they, including Jesus, are co-owners of several parcels of land including the disputed
Lot. No. 43897 located at Cogon, Carcar, Cebu. Sometime in 1993, Jesus filed an action for partition of the parcels of land against
the petitioners and other co-owners before Branch 21 of RTC Cebu City. On 13 August 2001, a judgment was rendered based on
a compromise agreement signed by the parties wherein they agreed that Jesus, Mariano and Vicente were jointly authorized to
sell the said properties and receive the proceeds thereof and distribute them to all the co-owners. However, the agreement was
later amended to exclude Jesus as an authorized seller. Pursuant totheir mandate, the petitioners inspected the property and
discovered that Lapinid was occupying a specific portion of the 3000 square meters of Lot No. 4389 by virtue of a deed of sale
executed by Jesus in favor of Lapinid. It was pointed out by petitioner that as a consequence of what they discovered, a forcible
entry case was filed against Lapinid.

The petitioners prayed that the deed of sale be declared null and void arguing that the sale of a definite portion of a co-owned
property without notice to the other co-owners is without force and effect. Further, the complainants prayed for payment of
rental fees amounting to ₱1,000.00 per month from January 2004 or from the time of deprivation of property in addition to
attorney’s fees and litigation expenses.

Answering the allegations, Jesus admitted that there was a partition case between him and the petitioners filed in 1993
involvingseveral parcels of land including the contested Lot No. 4389. However, he insisted that as early as 6 November 1997, a
motion 8 was signed by the co-owners (including the petitioners) wherein Lot No. 4389 was agreed to be adjudicated to the co-
owners belonging to the group of Jesus and the other lots be divided to the other co-owners belonging to the group of Torres.
Jesus further alleged that even prior to the partition and motion, several coowners in his group had already sold their shares to
him in various dates of 1985, 1990 and 2004.9 Thus, when the motion was filed and signed by the parties on 6 November 1997,
his rights asa majority co-owner (73%) of Lot No. 4389 became consolidated. Jesus averred that it was unnecessary to give notice
of the sale as the lot was already adjudicated in his favor. He clarified that he only agreed with the 2001 Compromise Agreement
believing that it only pertained to the remaining parcels of land excluding Lot No. 4389. 10

On his part, Lapinid admitted that a deed of sale was entered into between him and Jesus pertaining to a parcel of land with an
area of 3000 square meters. However, he insistedon the validity of sale since Jesus showed him several deeds of sale making him
a majority owner of Lot No. 4389. He further denied that he acquired a specific and definite portion of the questioned property,
citing as evidence the deed of sale which does not mention any boundaries or specific portion. He explained that Jesus permitted
him to occupy a portion notexceeding 3000 square meters conditioned on the result of the partition of the co-owners. 11

Regarding the forcible entry case, Jesus and Lapinid admitted that such case was filed but the same was already dismissed by the
Municipal Trial Court of Carcar, Cebu. In that decision, it was ruled that the buyers, including Lapinid, were buyers in good faith
since a proof of ownership was shown to them by Jesus before buying the property. 12

On 15 October 2007, the trial court dismissed the complaint of petitioners in this wise: Therefore, the Court DISMISSES the
Complaint. At the same time, the Court NULLIFIES the site assignment made by Jesus Velez in the Deed of Sale, dated November
9, 1997, of Lorenzo Lapinid’s portion, the exact location of which still has to be determined either by agreement of the co-owners
or by the Court in proper proceedings.13

Aggrieved, petitioners filed their partial motion for reconsideration which was denied through a 26 November 2007 Order of the
court.14 Thereafter, they filed a notice of appeal on 10 December 2007. 15
On 30 January 2009, the Court of Appeals affirmed 16 the decision of the trial court. It validated the sale and ruled that the
compromise agreement did not affect the validity of the sale previously executed by Jesus and Lapinid. It likewise dismissed the
claim for rental payments, attorney’s fees and litigation expenses of the petitioners.

Upon appeal before this Court, the petitioners echo the same arguments posited before the lower courts. They argue that
Lapinid, as the successor-in-interest of Jesus, is also bound by the 2001 judgment based on compromise stating that the parcels
of land must be sold jointly by Jesus, Mariano and Vicente and the proceeds of the sale be divided among the coowners. To
further strengthen their contention, they advance the argument that since the portion sold was a definite and specific portion of
a co-owned property, the entire deed of sale must be declared null and void.

We deny the petition.

Admittedly, Jesus sold an area ofland to Lapinid on 9 November 1997. To simplify, the question now iswhether Jesus, as a co-
owner, can validly sell a portion of the property heco-owns in favor of another person. We answer in the affirmative.

A co-owner has an absolute ownership of his undivided and proindiviso share in the co-owned property. 17 He has the right to
alienate, assign and mortgage it, even to the extent of substituting a third person in its enjoyment provided that no personal
rightswill be affected. This is evident from the provision of the Civil Code:

Art. 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may
therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are
involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which
may be allotted to him in the division upon the termination of the co-ownership.

A co-owner is an owner of the whole and over the whole he exercises the right of dominion, but he is at the same time the
owner of a portion which is truly abstract. 18 Hence, his co-owners have no right to enjoin a coowner who intends to alienate or
substitute his abstract portion or substitute a third person in its enjoyment. 19

In this case, Jesus can validly alienate his co-owned property in favor of Lapinid, free from any opposition from the co-owners.
Lapinid, as a transferee, validly obtained the same rights of Jesus from the date of the execution of a valid sale. Absent any proof
that the sale was not perfected, the validity of sale subsists. In essence, Lapinid steps into the shoes of Jesus as co-owner of an
ideal and proportionate share in the property held in common. 20 Thus, from the perfection of contract on 9 November 1997,
Lapinid eventually became a co-owner of the property.

Even assuming that the petitioners are correct in their allegation that the disposition in favor of Lapinid before partition was a
concrete or definite portion, the validity of sale still prevails.

In a catena of decisions,21 the Supreme Court had repeatedly held that no individual can claim title to a definite or concrete
portion before partition of co-owned property. Each co-owner only possesses a right to sell or alienate his ideal share after
partition. However, in case he disposes his share before partition, such disposition does not make the sale or alienation null and
void. What will be affected on the sale is only his proportionate share, subject to the results of the partition. The co-owners who
did not give their consent to the sale stand to be unaffected by the alienation. 22

As explained in Spouses Del Campo v. Court of Appeals: 23

We are not unaware of the principle that a co-owner cannot rightfully dispose of a particular portion of a co-owned property
prior to partition among all the co-owners. However, this should not signify that the vendee does not acquire anything atall in
case a physically segregated area of the co-owned lot is in fact sold to him. Since the coowner/vendor’s undivided interest could
properly be the object of the contract of sale between the parties, what the vendee obtains by virtue of such a sale are the same
rights as the vendor had asco-owner, in an ideal share equivalent to the consideration given under their transaction. In other
words, the vendee steps into the shoes of the vendor as co-owner and acquires a proportionate abstract share in the property
held in common.24

Also worth noting is the pronouncement in Lopez v. Vda. De Cuaycong: 25

x x x The fact that the agreement in question purported to sell a concrete portionof the hacienda does not render the sale void,
for it is a wellestablished principle that the binding force of a contract must be recognized as far as it is legally possible to do so.
"Quando res non valet ut ago, valeat quantumvalere potest." (When a thing is of no force as I do it, it shall have as much force as
it can have).26 (Italics theirs).
Consequently, whether the disposition involves an abstract or concrete portion of the co-owned property, the sale remains
validly executed.

The validity of sale being settled,it follows that the subsequent compromise agreement between the other co-owners did not
affect the rights of Lapinid as a co-owner.

Records show that on 13 August 2001, a judgment based on compromise agreement was rendered with regard to the previous
partition case involving the same parties pertaining to several parcels of land, including the disputed lot. The words of the
compromise state that: COME NOW[,] the parties and to this Honorable Court, most respectfully state that instead of
partitioning the properties, subject matter of litigation, that they will just sell the properties covered by TCT Nos. 25796, 25797
and 25798 of the Register of Deeds of the Province of Cebu and divide the proceeds among themselves.

That Jesus Velez, Mariano Velez and Vicente Torres, Jr. are currently authorized to sell said properties, receive the proceeds
thereof and distribute them to the parties.27

Be that as it may, the compromise agreement failed to defeat the already accrued right of ownership of Lapinid over the share
sold by Jesus. As early as 9 November 1997, Lapinid already became a co-owner of the property and thus, vested with all the
rights enjoyed by the other co-owners. The judgment based on the compromise agreement, which is to have the covered
properties sold, is valid and effectual provided as it does not affect the proportionate share of the non-consenting party.
Accordingly, when the compromise agreement was executed without Lapinid’s consent, said agreement could not have affected
his ideal and undivided share. Petitioners cannot sell Lapinid’s share absent his consent. Nemo dat quod non habet – "no one can
give what he does not have."28

This Court has ruled in many cases that even if a co-owner sells the whole property as his, the sale will affect only his own share
but not those of the other co-owners who did not consent tothe sale. This is because the sale or other disposition of a co-owner
affects only his undivided share and the transferee gets only what would correspond to his grantor in the partition of the thing
owned in common.29

We find unacceptable the argument that Lapinid must pay rental payments to the other co-owners.1âwphi1

As previously discussed, Lapinid,from the execution of sale, became a co-owner vested with rights to enjoy the property held in
common.

Clearly specified in the Civil Code are the following rights:

Art. 486. Each co-owner may use the thing owned in common, provided he does so in accordance with the purpose for which it is
intended and in such a way as not to injure the interest of the co-ownership or prevent the other co-owners from using it
according to their rights. The purpose of the co-ownership may be changed by agreement, express or implied.

Art. 493. Each co-owner shall havethe full ownership of his part and of the fruits and benefits pertaining thereto, and he may
therefore alienate, assign or mortgage it and even substitute another person in its enjoyment, except when personal rightsare
involved. But the effect of the alienation or mortgage, with respect to the co-owners, shall be limited to the portion which may
be allotted to him in the division upon the termination of the co-ownership.

Affirming these rights, the Court held in Aguilar v. Court of Appeals that: 30

x x x Each co-owner of property heldpro indivisoexercises his rights over the whole property and may use and enjoy the same
with no other limitation than that he shall not injure the interests of his co-owners, the reason being that until a division is made,
the respective share of each cannot be determined and every co-ownerexercises, together with his coparticipants joint
ownership over the pro indiviso property, in addition to his use and enjoyment of the same. 31 From the foregoing, it is absurd to
rule that Lapinid, who is already a co-owner, be ordered to pay rental payments to his other co-owners. Lapinid’s right of
enjoyment over the property owned in common must be respected despite opposition and may notbe limited as long he uses
the property to the purpose for which it isintended and he does not injure the interest of the co-ownership.

Finally, we find no error on denial of attorney’s fees and litigation expenses.

Pursuant to Article 2208 of the New Civil Code, attorney’s fees and expenses of litigation, in the absence of stipulation, are
awarded only in the following instances:

xxxx
 1. When exemplary damages are awarded;

2. When the defendant’s act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to
protect his interests;

3. In criminal cases of malicious prosecution against the plaintiff;

4. In case of a clearly unfounded civil action or proceeding against the plaintiff;

5. Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff’s plainly valid and
demandable claim;

6. In actions for legal support;

7. In actions for the recovery of wages of household helpers, laborers and skilled workers;

8. In actions for indemnity under workmen's compensation and employer's liability laws;

9. In a separate civil action to recover civil liability arising from a cnme;

10. When at least double judicial costs arc awarded;

11. In any other case where the court deems it just and equitable that attorney's fees and expenses oflitigation should
be recovered.

In all cases, the attorney's fees and expenses of litigation must be reasonable.

Petitioners cite Jesus' act of selling a definite portion to Lapinid as the reason which forced them to litigate and file their
complaint. However, though the Court may not fault the complainants when they filed a complaint based on their perceived
cause of action, they should have also considered thoroughly that it is well within the rights of a co-owner to validly sell his ideal
share pursuant to law and jurisprudence.

WHEREFORE, the petition is DENIED. Accordingly, the Decision and Resolution of the Court of Appeals dated 30 January 2009 and
14 May 2009 are hereby AFFIRMED.

SO ORDERED.
G.R. No. 176448 July 28, 2008

JOSE S. DAILISAN, Petitioner, vs. COURT OF APPEALS and THE HRS. OF THE "late" FEDERICO PUGAO, namely: FLORENTINA
PUGAO, FLORIDA PUGAO-UBALDO, FE PUGAO-VILLANUEVA, FERNANDO PUGAO and LUDOVICO PUGAO,Respondents.

This is a Petition for Review1 of the 25 May 2006 Decision2 and 26 January 2007 Resolution3 of the Court of Appeals in CA-G.R. SP
No. 82642,4 which reversed and set aside the Decision5 of the Regional Trial Court (RTC) of Quezon City, Branch 88, dated 3
September 2003.

On 8 July 1993, petitioner filed a Complaint 6 for partition before the RTC of Quezon City, 7 alleging that he purchased one-fourth
(¼) of the land of Federico Pugao (Federico) identified as Lot 16, Block NB 22 of subdivision Psd-57020 located in Bago Bantay,
Quezon City and covered by Transfer Certificate of Title No. No. 75133.

According to petitioner, he and Federico had initially agreed to the sale of one-half (1/2) portion of the same land for ₱12,000.00
and that he had paid Federico several installments from 1976 to 1979, which all in all totaled to ₱6,000.00, but was told to stop
further payments because per Federico’s representation he could only sell one-fourth ( ¼) of the lot. 8 Federico could not deliver
the title to him because the property was still mortgaged to a bank. When the mortgage was released, petitioner demanded the
execution of a deed of absolute sale. Instead of acceding, Federico proposed to mortgage the property to petitioner as security
for a ₱10,000.00 loan, payable

in three (3) months, and upon payment of the loan the deed of absolute sale would be executed. Petitioner agreed, and they
executed a deed of real estate mortgage.9 The loan was paid after three (3) months, after which petitioner and Federico executed
a deed of absolute sale on 5 February 1979. Petitioner asked for the partition of the lot and caused a resurvey to expedite the
partition.10 However, Federico still refused to effect the partition and even sent a notice of eviction 11 against petitioner.

According to Federico, petitioner is the husband of his niece and that when the couple’s house was demolished during martial
law, he allowed them out of pity to occupy one fourth (¼) of his lot. While averring that the property had been the subject of real
estate mortgages in favor of other banks, he admitted that he executed in favor of petitioner a deed of real estate mortgage as
security for a ₱10,000.00 loan. He was able to pay the said loan which resulted in the cancellation of the mortgage, he added. 12

However, Federico denied having voluntarily executed the deed of absolute sale, and instead alleged that when he was seriously
ill in January of 1992, petitioner, with a certain Atty. Juanitas, made him sign pages of what the former told him to be parts of the
real

estate mortgage he had earlier executed in favor of petitioner. Federico filed a complaint for falsification and ejectment against
petitioner before the barangay, but attempts at conciliation failed. Due to his failing health, Federico failed to carry out his
intention to file and pursue a formal complaint before the court. 13

Federico passed away while this case was pending before the trial court. 14 And so he was substituted by his heirs, herein
respondents.15

On 3 September 2003, the trial court, finding that respondents failed to disprove the validity of the deed of absolute sale, ruled
in favor of petitioner and ordered the partition of the subject property. 16 The dispositive portion of the decision reads:

IN VIEW OF THE FOREGOING, judgment is rendered as follows:

1. Ordering the partition of the said parcel of land mentioned and described in paragraph 3 of the complaint, adopting
for the purpose of said partition, the survey plan prepared by the Geodetic Engineer;

2. Ordering the defendant to surrender and execute all the necessary documents to effect the partition and issuance of
separate Transfer Certificate of Title over the subject matter of the Deed of Absolute Sale;

3. Ordering the defendants to pay the amount of fifty thousand pesos (₱50,000.00) as moral and exemplary damages;

4. Ordering the defendant to pay attorney’s fees in the amount of ₱30,000.00 and ₱500.00 per appearance, plus costs;

5. Ordering the Register of Deeds of Quezon City to issue a Transfer Certificate of Title to effect the partition in the name
of plaintiff.

SO ORDERED.17
Respondents moved for the reconsideration of the decision but their motion was denied by the trial court on 19 January
2004.18 Hence, they appealed the decision to the Court of Appeals.

The Court of Appeals granted the appeal. It noted that petitioner should have filed an action for specific performance to compel
Federico to honor the deed of absolute sale;19 yet the right to file such action, had already expired. 20 It further noted that
petitioner "filed the instant action for partition simply because it is not barred by prescription." 21 It ruled against the validity of
the sale between Federico and petitioner, finding that there was no consent on Federico’s part and that there was no proof of
payment of the price or consideration on the part of petitioner. 22 It concluded that the deed of sale is fictitious and invalid, and
hence could not serve as basis of any claim of ownership.23

Petitioner filed a motion for reconsideration but his motion was denied for lack of merit. 24

Petitioner now claims that the appellate court’s decision is contrary to law. He argues that his action is "actually a case of ‘specific
performance’ for the delivery/surrender of title in view of the duly executed ‘Deed of Absolute Sale,’ and thus, the validity of the
said deed cannot be collaterally attacked, but must be raised in an independent action." 25 He insists that his action for specific
performance has not prescribed because upon the execution of the deed of sale, ownership of the subject property has passed
to him, the buyer, and an action for specific performance is only incidental to his claim of ownership; on the contrary, it is
respondents’ right (duty)26 to question the validity of the deed of sale, which they did not do despite knowledge of the existence
of the said instrument as early as 1984. Finally, he questions the specific findings of the Court of Appeals concerning the
execution of the deed of absolute sale as not borne by the evidence. 27

For their part, respondents point out that this is the first time that petitioner alleged that his action for partition is actually a case
of specific performance for the delivery/surrender of the title of the subject property. This being so, respondents believe that
petitioner’s cause of action has already prescribed since more than ten (10) years have already lapsed since the execution of the
deed of sale. They add that in any case, petitioner’s arguments and allegations are untrue, baseless and misleading. 28

We resolve to grant the petition.

The two determinative issues in this case are: (1) whether the deed of absolute sale is valid; and (2) what is the prescriptive
period within which to file petitioner’s action.

The notarized deed of absolute sale is a public document, and has in its favor the presumption of regularity which may only be
rebutted by evidence so clear, strong and convincing as to exclude all controversy as to the falsity of the certificate. 29 The burden
of proof to overcome the presumption of due execution of a notarized document lies on the party contesting such execution.

First, a distinction must be made between void and voidable contracts. A contract is inexistent and void from the very beginning
when (i) its cause, object or purpose is contrary to law, morals, good customs, public order or public policy; (ii) it is absolutely
simulated or fictitious; (iii) its cause or object did not exist at the time of the transaction; (iv) its object is outside the commerce
of men; (v) it contemplates an impossible service; (vi) the intention of the parties relative to the principal object of the contract
cannot be ascertained; or (vii) it is expressly prohibited or declared void by law. 30 The action or defense for the declaration of the
inexistence of a contract does not prescribe.31 On the other hand, a voidable or annullable contract is one where (i) one of the
parties is incapable of giving consent to a contract; or (ii) the consent is vitiated by mistake, violence, intimidation, undue
influence or fraud.32 The action for annulment must be brought within four (4) years from the time the intimidation, violence or
undue influence ceases, or four (4) years from the time of the discovery of the mistake or fraud. 33

Respondents claim that the deed of sale "is not valid because there was absolutely no consent on the part of" Federico "to said
contract, which was in English," considering that Federico "did not even finish Grade 2 of the elementary school level," 34 and that
he was only led to believe that the pages thereof corresponded to and were part of the real estate mortgage. Basically,
respondents’ claim is that the deed of sale is a voidable, and not void, contract and the ground to be raised is mistake and/or
fraud because Federico was led to believe that what he was signing was still part of the earlier deed of real estate mortgage. In
that regard, respondents stress Federico’s low educational attainment and inability to understand the English language.

Nevertheless, Florida Pugao, one of the respondents, testified that she became aware of the existence of the deed of sale way
back in 1984.35 Despite this knowledge, as well as Federico’s and/or his other heirs’ knowledge of the assailed deed even prior to
1984, none of them took any action to annul the deed within the prescribed four (4)-year period which expired in 1988.

Anent Federico’s low educational attainment and unfamiliarity with English, Article 1332 of the Civil Code is the governing
provision:

Art. 1332. When one of the parties is unable to read, or if the contract is in a language not understood by him, and mistake or
fraud is alleged, the person enforcing the contract must show that the terms thereof have been fully explained to the former.
That Federico did not even reach Grade 2, that he was unable to read or understand English, and that his consent was vitiated by
mistake or fraud, make the situation fall under the above-quoted provision. Thus, it would have been incumbent upon petitioner
to show that he fully explained the terms of the contract to Federico if not for a crucial point. Respondents failed to file an action
for annulment of the deed of sale on the ground of mistake or fraud within the four-year period provided by law. Thus, they have
lost both their right to file an action for annulment or to set up such nullity of the deed of sale as a defense in an action to
enforce the same,36 which was the case filed by petitioner. Likewise, respondents failed to assign the matter of mistake or fraud
as an error before the Court of Appeals.

Anent the "inconsistencies" in the deed of sale, suffice it to say that they are really not inconsistencies but rather trivial flaws
appearing in the acknowledgment, and not in the body of the deed itself which contains the operative provisions. Moreover,
there is no allegation that the signatures appearing in the deed were forged or falsified.

All told, respondents were unable to overcome the presumption of validity of the deed of absolute sale as well as the regularity
in its execution.1avvphi1

With the issue of the deed of sale’s validity already settled, the question of prescription of action becomes easy to resolve. We
note that the Court of Appeals ruled that petitioner’s cause of action has prescribed following its conclusion that petitioner’s
action is actually one for specific performance, not partition. Interestingly, petitioner, after having triumphed in the trial court
with his action for partition, suddenly changed tack and declared that his original action was indeed an action for specific
performance. He should not have gone that far and executed an apparent somersault. In light of the facts which impelled
petitioner to seek judicial relief, there is no discernible change in the ultimate relief he seeks, as his complaint for partition is also
an action for specific performance. His objective is to make Federico honor their contract and perform his obligation to deliver a
separate title covering the lot he sold to him but which can be done only after the portion is segregated from the rest of
Federico’s property.37

Petitioner’s action before the trial court was properly captioned as one for partition because there are sufficient allegations in
the complaint that he is a co-owner of the property. The regime of co-ownership exists when ownership of an undivided thing or
right belongs to different persons.38 By the nature of a co-ownership, a co-

owner cannot point to a specific portion of the property owned in common as his own because his share therein remains
intangible.39 The pertinent portion of the deed reads:

2. That for and in consideration of the sum of Six Thousand (₱6,000.00), Pesos, Philippine Currency, paid unto the VENDOR by
the VENDEE, the VENDOR hereby SELLS, TRANSFERS, CEDES, and CONVEY unto the VENDEE, his heirs, successors or assigns an
undivided ONE-FOURTH (1/4) portion (50 square meters, more or less, in the particular portion of the lot where the house of the
VENDEE now stands) of the above-described residential lot together with all improvements thereon free from all liens and
encumbrances. 40 (Emphasis supplied)

The description "undivided ONE-FOURTH (1/4) portion (50 square meters, more or less, in the particular portion of the lot where
the house of the VENDEE now stands)" shows that the portion sold is still undivided and not sufficiently identified. While the
description

provides a guide for identifying the location of the lot sold, there was no indication of its exact metes and bounds. This is the
reason why petitioner was constrained to cause the survey of the property. 41 As a co-owner of the property, therefore, petitioner
has the right to demand partition, a right which does not prescribe. 42

Ownership of the thing sold is acquired only from the time of delivery thereof, either actual or constructive. Article 1498 of the
Civil Code provides that when the sale is made through a public instrument, the execution thereof shall be equivalent to the
delivery of the thing which is the object of the contract, if from the deed the contrary does not appear or cannot be
inferred.43 The Court notes that Federico had already delivered the portion he sold to petitioner, subject of course to the
execution of a technical survey, when he executed the deed of absolute sale, which is a public instrument. 44 In view of the
delivery in law, coupled with petitioner’s actual occupation of the portion where his house stands, all that is needed is its
segregation from the rest of the property.

WHEREFORE, the petition is GRANTED. The challenged Decision and Resolution of the Court of Appeals in CA-G.R. SP No. 82642
are SET ASIDE, and the Decision of the Regional Trial Court of Quezon City, Branch 98 is REINSTATED.

SO ORDERED.

[G.R. No. 72188. September 15, 1986.]

 RODOLFO EUSEBIO, Petitioners, v. INTERMEDIATE APPELLATE COURT and ROHIMUST SANTOS, Respondents.

The controversy in this case is between two co-owners of a parcel of land of 811.30 sq. m. situated at Blumentritt Extension,
corner Don Manuel Street, La Loma, Quezon City (the LOT), Petitioner (RODOLFO), as one of the two, had filed suit in 1981
against Private Respondent (ROHIMUST), the other co-owner, before the then Court of First Instance of Quezon City (now
Regional Trial Court) for determination of their participations in the co-ownership, and for actual partition of the LOT. The
dispositive part of the Trial Court’s Decision was as follows:jgc:chanrobles.com.ph

"WHEREFORE, judgment is hereby rendered ordering the partition of that parcel of land, containing an area of 811.30 square
meters, known as Lot No. 1, Block No. 77 of the Subdivision Plan Psd. 157222, situated at Blumentritt Extension corner Don
Manuel Street, La Loma, Quezon City, covered by Transfer Certificate of Title No. 37685 of the Register of Deeds, Quezon City, as
follows:jgc:chanrobles.com.ph

"a) 611.30 sq. m. which shall be given to plaintiff, Rodolfo Y. Eusebio;

"b) 200 sq. m. which shall be given to defendant, Rohimust Santos.

"The expenses for the survey of the lot to define the metes and bounds of the portions appertaining to plaintiff and defendant
shall be equally shared by both parties. After which any improvement existing thereon which encroached on that portion
appertaining to the other party shall be demolished so that the party affected may fully enjoy and exercise his right over said
portion." 1

We have gone over the Expediente in the Trial Court, as well as the Record in the Appellate Tribunal, and we have found
indications in the evidence that there are houses constructed on the LOT which may be legally owned in common, or which one
party might claim to have been constructed by him separately from the co-ownership. Addresses of both parties are at No. 4 Don
Manuel, and it can be presumed they live separately within the LOT. In his brief submitted to the Appellate Tribunal, ROHIMUST,
in part, had said:jgc:chanrobles.com.ph

". . . The said lot is located at the corner of Don Manuel and Blumentritt Extension consisting of 811.30 square meters. There is
an old house built and is still standing in the middle of the land. The house was constructed by his late grandfather Philip
Zinsineth. (t.s.n., p. 6, Id.)."cralaw virtua1aw library

As the manner of dividing the LOT has yet to be determined, and it could not then be known which buildings have to be cut by a
dividing line, the Trial Court simply provided for the demolition of any building or part thereof, claimed by either party, which
would be within the area assigned to the other party. No mention of compensation was made, and it is our opinion the omission
shows the Trial Court intended that no compensation shall be payable.chanrobles virtual lawlibrary

ROHIMUST took an appeal from the Trial Court’s Decision to the Intermediate Appellate Court (now Court of Appeals). The
Appellate Tribunal initially affirmed the judgment of the Trial Court in toto. However, on Motion for Reconsideration filed by
ROHIMUST, it rendered a Resolution amending its previous affirmance, holding that ROHIMUST "has the legal right to retain the
house together with its improvements and the possession thereof until full payment of the value thereof." It is that modification
which RODOLFO, in the instant Petition for Review, has alleged to be erroneous and which should be set aside.

The LOT was part of a subdivision owned by J.M. Tuazon & Co., Incorporated, represented by Gregorio Araneta, Incorporated
(GA, Inc.). As early as 1924, it was occupied by Philip Zinsineth as a lessee, and he had constructed a house and garage thereon
(Exhibit "7"). After his death, his "leasehold rights" were inherited by his two daughters, Mary, the mother of ROHIMUST, and
Isabel, the deceased mother of RODOLFO’s wife.

On April 15, 1974, the parties concerned agreed that the leasehold rights will be placed in the name of RODOLFO to the extent of
383 sq. m., and in the name of FERNANDO J. Santos, Jr., a son of Mary, to the extent of 428.30 sq. m. On that same date, a
contract to sell the LOT on installment was executed by GA, Inc. in favor of RODOLFO. FERNANDO was not included in the
contract because GA, Inc. wanted to deal only with one person. However, on July 2, 1974, RODOLFO and FERNANDO signed an
affidavit reading in part as follows:jgc:chanrobles.com.ph

"x x x

"That actually the property was bought by us jointly and the monthly installments shall be paid by us pro-rata to the area which
we are presently occupying, which is as follows:jgc:chanrobles.com.ph

"Rodolfo Y. Eusebio — 383.00 sq. m. at P49,790.00, of which the amount of P9,958 was paid as down payment, shall pay a share
in the monthly installment corresponding to P1,048.94 monthly;
"Fernando J. Santos, Jr. — 428.30 sq. m. at P55,679.00, of which the amount of P11,135.80 was paid as down payment, shall pay
a share in the monthly installment corresponding to P1,173.01 monthly;

"x x x

"That it is our understanding that as soon as the property is fully paid for by us, the same shall be subdivided so as to have two
transfer certificates of title issued to us for our corresponding portions;

"x x x"

By August 5, 1976, installment payments under the Contract to Sell had not been kept up to date. RODOLFO and FERNANDO
then made an agreement as follow:jgc:chanrobles.com.ph

"That all overdue monthly installment arising from the monthly share of Fernando J. Santos, Jr. will be advanced by Rodolfo Y.
Eusebio and the corresponding payment will be charged an interest rate of 1% per month:jgc:chanrobles.com.ph

"That the said parcel of land is to be fully paid forty eight (48) months from May 15, 1974. On the said due date of full payment,
each party will have to pay its corresponding full share of payment. Each party will be given a grace period of five (5) months to
settle its corresponding share of payment with the corresponding share thereon, and if after this date one party fails to pay its
corresponding share, the said parcel of land will be subdivided according to the amount of payment by each party" (Exhibit "G").

In 1978, full payment was made to GA, Inc., and Transfer Certificate of Title No. 244154 of the Registry of Deeds of Metro Manila
(originally No. 37685, Quezon City) was issued solely in the name of RODOLFO. For the full payment of the amount paid to GA,
Inc., FERNANDO was not able to contribute his full share. In 1980, FERNANDO transferred his rights to ROHIMUST who is his
brother.

In the case instituted by RODOLFO against ROHIMUST in 1981, the Trial Court found that, as a result of RODOLFO’s payments
made to GA, Inc. on behalf of FERNANDO, his share in the LOT had to be increased from 383 sq. m. to 611.30 sq. m., with the
participation of ROHIMUST being decreased to 200 sq. m. That adjudication is now final.chanrobles law library : red

The legal issue to be resolved in this instance is the correctness of the Appellate Tribunal’s Resolution that:jgc:chanrobles.com.ph

". . . It is undisputed that defendant-appellant’s house was erected on the land in question at the time that said portion was
under his claim of ownership. They were therefore in possession thereof unquestionably in good faith. And, par. 2 of Article 546
of the Civil Code reads:jgc:chanrobles.com.ph

"Useful expenses shall be refunded only to the possessor in good faith with the same right of retention, the person who has
defeated him in the possession having the option of refunding the amount of the expenses or of paying the increase in value
which the thing may have acquired by reason thereof.

The Appellate Tribunal was in error in invoking Article 546 which prescribes the rights of the possessor in good faith as regards
useful expenses. Article 546 presupposes, but does not establish, possession in good faith, the requisites of which are laid down
in Article 526, thus:jgc:chanrobles.com.ph

"ART. 526. He is deemed a possessor in good faith who is not aware that there exists in his title or mode of acquisition any flaw
which invalidates it.

"He is deemed a possessor in bad faith who possesses in any case contrary to the foregoing.

"Mistake upon a doubtful or difficult question of law may be the basis of good faith."cralaw virtua1aw library

It may be mentioned that, prior to April 15, 1974, the possession of the parties was in the concept of lessees of the LOT, which
was not possession in good faith for purposes of Article 546. Conceding, for the sake of avoiding immaterial complications, that
the parties became co-owners after April 15, 1974, when the contract to sell was executed, neither co-owner can claim
possession in himself of any particular identified part of the LOT. As stated in Cabello v. Cabello, 37 Phil. 328, 336, "the possession
held by a co-heir of the undivided estate is understood to be enjoyed in the name of the rest of the heirs." An undivided estate is
co-ownership by the heirs. The ownership of the physically undivided thing pertains to more than one person, thus defined as
"the right of common dominion which two or more persons have in a spiritual part of a thing which is not physically divided"
(Sanchez Roman).

The provision of the Civil Code which should be applicable is Article 543, which provides:jgc:chanrobles.com.ph

"ART. 543. Each one of the participants of a thing possessed in common shall be deemed to have exclusively possessed the part
which may be allotted to him upon the division thereof, for the entire period during which the co-possession lasted. Interruption
in the possession of the whole or a part of a thing possessed in common shall be to the prejudice of all the possessors. However,
in case of civil interruption, the Rules of Court shall apply."cralaw virtua1aw library

Under the foregoing provision, after the LOT is actually partitioned, ROHIMUST would be "deemed to have exclusively
possessed" since April 15, 1974, the part which may be allotted to him upon the division thereof" consisting of the definite 200
sq. meter area assigned to him, together with all buildings and parts of buildings erected therein (Section 11, Rule 69). RODOLFO
can have no claim over such buildings or parts of a building, which improvements ROHIMUST can keep or demolish without
paying any compensation thereof to RODOLFO. For the same reason, if there were buildings or parts of a building, found in the
definite 611.30 sq. m. area assigned to RODOLFO, he will be deemed to have been in exclusive possession thereof since April 15,
1974, and he can keep or demolish these improvements without paying any compensation therefor to ROHIMUST.chanrobles
virtual lawlibrary

WHEREFORE, the Resolution of June 14, 1985 of respondent Court promulgated in its case AC-G.R. CV No. 02022 is hereby set
aside, and its Decision of September 19, 1984 in the same case, affirming the judgment of the Trial Court in toto, shall stand
without modification. Let this case be remanded to the Trial Court for actual partition of the LOT between its co-owners under
the provisions of Rule 69 of the Rules of Court.

Without pronouncement as to costs.

SO ORDERED.
G.R. No. L-38018 October 31, 1978

MARCELO SOTTO, Administrator of the Estate of Filemon Sotto, petitioner,

vs.
PILAR TEVES, FLORENTINO TEVES, DULCE TEVES KIAMKO assisted by husband FELIPE KIAMKO DOLORES TEVES ARCENAS,
assisted by husband MARIANO ARCENAS, MARIA CAMARA GUMBAN, assisted by husband NICANOR GUMBAN, BELEN
CAMARA BROWN, assisted by husband ROGER BROWN and the HONORABLE COURT OF APPEALS, respondents.

Delfin V Nacua, Jose D. Palma, Nicolas Jumapao & Pedro Albino and San Juan, Africa Gonzales & San Agustin for petitioner.

Teodoro Almase and Filiberto Leonardo for respondents.

GUERRERO, J.:

This is a petition for review on certiorari of the Resolution of the Court of Appeals, Special Division of Five 1 dated Sept. 14, 1973
in CA-G.R. No. 44351 R which reconsidered the decision of the Eight Division 2, same Court dated November 25, 1972 and from
the Resolution dated December 13, 1973 of the said Special Division of Five, denying the motion for reconsideration of the
previous Resolution. The dispositive portion of the appealed Resolution states:

WHEREFORE, the decision rendered in the above-entitled case is hereby reconsidered. The appealed judgment
is hereby reversed and set aside. Plaintiffs are hereby declared the absolute owners of Lots Nos. 7547, 842,
2179-A, 123 and 1370. Reconveyance and delivery of possession of the aforesaid five lots to plaintiffs are
hereby ordered. Defendant is hereby sentenced to pay plaintiffs the sum corresponding to P4,500.00 a month
from October 10, 1966 until the reconveyance and delivery of possession as above ordered have been effected,
with legal interest thereon from said date until fully paid, and the sum of P5,000.00 as and for attorney's fees,
with costs of both instances against the defendant. 3

The voluminous records and pleadings in this case establish the following undisputed facts which are stated in the appealed
Resolution of the Special Division of Five dated Sept. 14, 1973, as follows:

Subject of the plaintiffs' action for declaration of ownership and/or reconveyance, and for the recovery of
possession, rentals, damages and attorney's fees, are five (5) parcels of land, all located in Cebu City, more
particularly described in the complaint, and denominated as Lots Nos. 7547, 842, 2179-A, 123, and 1370. There
is no dispute as to the fact that the aforesaid properties originally belonged to the conjugal partnership of the
spouses Florentino Rallos and Maria Fadullon. When Florentino Rallos died on March 14, 1912 in the City of
Cebu, the parcels of land in question, together with the other properties comprising the estate of the
deceased, descended in testate succession to his sole heirs, his widow, Maria Fadullon, and two children,
named Concepcion Rallos and Carmen Rallos. The lawyer to whom the Rallos heirs entrusted the settlement of
the estate was Atty. Filemon Sotto.

Shortly after the closure of the probate proceeding in 1913, Atty. Sotto married Carmen Rallos. Carmen died in 1945 without
leaving any issue. Concepcion died later leaving many children. Maria Fadullon predeceased her two daughters. Atty. Sotto died
intestate on October 10, 1966.
Competing for the ownership of the five lots are the direct descendants and blood relatives of Florentino Rallos and Maria
Fadullon, opposed by the administrator of the intestate estate of Atty. Sotto. The children of Concepcion Rallos, or the
grandchildren of Florentino Rallos and Maria Fadullon, some of whom are assisted by their spouses, are the plaintiffs in this case.
Defendant administrator represents Atty. Sotto's children out of wedlock. It is claimed by the defendant that Atty. Sotto was at
the time of his death the owner of the five lots in question.

In life, Atty. Filemon Sotto was a very prestigious man. He wielded tremendous social and political influence. Successively, he was
municipal councilor, vice-president of Cebu City, Assemblyman, Senator and Delegate to the Constitutional Convention of 1934.
He was editor and publisher of many newspapers among which was the famous "La Revolucion" which featured quite
prominently in the celebrated Wood-Sotto libel case. When his life, however, was almost at an end, he was declared
incompetent. In 1962, while Atty. Sotto was under guardianship, Cesar Sotto, his nephew and protegee and one of the guardians
judicially appointed to take care of his estate, delivered to Pilar Teves, one of the herein plaintiffs, certain documents which had
lain in secrecy in the private files of Atty. Sotto. All along, the direct descendants and blood relatives of Florentino Rallos had
rested on the belief that the properties in question, which are the fruits of the sweat and toil of their grandfather, would one day
be delivered unto them. The revelation of Cesar Sotto, however, led the plaintiffs to the discovery that all the properties in
question were now titled in the name of Atty. Sotto. and were in danger of falling into the hands of his children out of wedlock,
who are total strangers to the spouses Rallos and Fadullon. Upon such discovery, the plaintiffs initiated the present lawsuit
forthwith."

On June 13, 1967, the herein private respondents filed suit in the Court of First Instance of Cebu against petitioner Marcelo
Sotto, as administrator of the intestate estate of Filemon Sotto, for the recovery of possession and ownership of the 5 parcels of
land described in the complaint, with damages. The complaint was based mainly upon the theory that a trust relation was
established and created with respect to the said properties, with Atty. Filemon Sotto as trustee and as cestuis que trust, his
mother-in-law, Maria Fadullon Vda. de Rallos; his wife, Carmen Rallos; and his sister-in-law, Concepcion Rallos (predecessor in
interest of herein private respondents); and that in gross violation of the trust reposed upon him by Concepcion Rallos and after
her death, by her heirs, the said Atty. Filemon Sotto, through sheer manipulation, fraudulent acts and means, non-existent and
void decrees, fictitious sales and transfers, succeeded in causing the transfer of the ownership of the properties to the name of
his wife Carmen Rallos, and finally to his name alone.

The complaint alleged five causes of action. Under the first cause of action, it is alleged that on January 25, 1913, Atty. Filemon
Sotto as counsel, not only for the widow, Maria Fadullon Vda. de Rallos, but also for her daughters, Carmen and Concepcion both
surnamed Rallos, filed a motion in said Special Proceedings No. 365-0 praying to relieve the executrix Maria Fadullon Vda. de
Rallos from presenting a project of partition inasmuch as his clients had the desire to conserve pro-indiviso the properties in their
possession, which motion 4 is as follows:

MOCION SOBRE LA DISPOSICION DE LOS BIENES

Maria Fadullon, conyuge viuda de Florentino Rallos, y sus hijas Carmen Rallos y Concepcion Rallos, unicas
herederas de dicho finado comparecen hoy por medio del Abogado Filemon Sotto para exponer lo que sigue:

Que habiandose hecho por el Juzgado una declaracion de "unicas herederas" de los bienes del finado
Florentino Rallos en favor de las comparecientes, y siendo todas ellas mayores de edad, pidan al Juzgado que
se la releve a la Albacea de presenter cualquier proyecto de reparticion, pues las exponentes tienen el
preposito de conservar por ahora "por indivisos" los susodichos bienes, en poder de ellas mismas.

Cebu, 25 Enero de 1913.

(SGD.) FILEMON SOTTO

Abogado de la mocionantes

Maria Fadullon y sus hijas Carmen y Concepcion Rallos manifiestan. Que son la mismas mencionadas en la
preinserta mocion y que estan conformes con todo el contenido de la misma.

Cebu, 25 de Enero de 1913.

(SGD.) CONCHITA RALLOS DE TEVES

(SGD.) CARMEN J. RALLOS

(SGD.) MARIA F. VDA. DE RALLOS

Upon approval by the Court of the above quoted Mocion Sobre La Disposicion de los Bienes, the said probate proceedings was
terminated.

The complaint further alleged that at that time Atty. Filemon Sotto (then known as Don Filemon Sotto) was still single, but he
already enjoyed considerable prestige and influence and was well-known for his sagacity he having become a municipal
councilor, municipal vice-mayor, fiscal and assemblyman; that he married Carmen J. Rallos on Sept. 27, 1913 and he later became
senator, delegate to the Constitutional Convention and editor, besides being a practicing lawyer.

It is furthermore alleged that Atty. Filemon Sotto, having married Carmen Rallos, thereby virtually making him a member of the
Rallos family, was looked upon as the head of the Rallos family to look after the properties inherited from the deceased
Florentino Rallos including the 5 parcels of land hereinbefore mentioned, thereby establishing a trust relation with Don Filemon
Sotto as trustee of the said properties for the benefit of his mother-in-law Maria Fadullon Vda. de Rallos, his wife Carmen Rallos
de Sotto and sister-in-law Concepcion Rallos and the heirs of the latter, as cestuis que trust; that the aforesaid trust reposed upon
him continued even after the deaths of Maria Fadullon Vda. de Rallos, Carmen Rallos de Sotto and Concepcion Rallos, the latter
who married twice, first to Mariano Teves and second to Mariano Camara, and lasted up to Don Filemon Sotto's death on
October 10, 1966; that on November 29, 1916, Don Filemon Sotto in violation of the trust reposed upon him by, and his duty as
attorney for, the heirs of the deceased Florentino Rallos, illegally caused Decree No. 64101 dated Jan. 26, 1918 to be issued in
Case No. 9, G.R.L.O No. 9465 of the Court of First Instance of Cebu on the entire Lot No. 7547 in question, in the name alone of
Carmen Rallos de Sotto, the wife of Filemon Sotto, to the great prejudice and damage of the other co-owners thereof namely
Maria Fadullon Vda. de Rallos and Concepcion Rallos de Camara; that said Decree is inexistent, null and void ab initio and
without force and effect for it should have been issued not in the name of Carmen Rallos de Sotto but in the names of Maria
Fadullon Vda. de Rallos — ½ share and the remaining ½ share thereof in the names of Carmen Rallos de Sotto and Concepcion
Rallos de Camara in equal proportion of ¼ share each; that on February 9, 1918, as a result of the said inexistent, null and void
Decree No. 64101, Original Certificate of Title No. 1034 was issued in the name of Carmen Rallos de Sotto, wife of Filemon Sotto;
that sometime in 1922, Atty. Filemon Sotto had caused Lot No. 7547 to be transferred by his wife to the name of another person
as a result of which O.C.T. No. 1034 was cancelled and Transfer Certificate of Title No. 6278 was issued, for fear that said lot might
be attached in connection with the libel suit filed against the newspaper, La Revolucion edited by Don Filemon Sotto at the
instance of the then Gov. Gen. Leonard Wood; that on June 5, 1933, Don Filemon Sotto caused Transfer Certificate of Title No.
6278 of Lot 7547 to be reconveyed not in the name of his wife but in his own name under Transfer Certificate of Title No. 12740
and was thereafter reconstituted administratively by the guardian of his properties as Transfer Certificate of Title No. RT-6890 in
the name of Filemon Sotto, widower,and finally the present Certificate of Title No. 27710 was issued by the Register of Deeds in
the name of Filemon Sotto, widower.

Under the second, third, fourth and fifth causes of action, respondents alleged specific similar violations of the trust relation
reposed upon him with respect to the other 4 parcels of land in that Atty. Filemon Sotto illegally caused said lots to be registered
either in the name of his wife Carmen Rallos de Sotto alone or jointly with Maria Fadullon Vda. de Rallos, to the prejudice of the
other co-owner, Concepcion Rallos, and thereafter thru manipulations and fraudulent means, unregistered deeds of sale,
fictitious and simulated transfers, incumbrances and reconstitution, these properties were in gross violation of the trust reposed
upon him by the heirs, finally titled in the name alone of Carmen Rallos de Sotto and ultimately to that of his name as Don
Filemon Sotto, widower.

Under the sixth cause of action, demand was made for the payment of rental income of the lots in question at P4,500.00 a
month from Oct. 10, 1966 until delivery of possession and ownership of said lots as actual or compensatory damages,
P20,000.00 as moral damages, P10,000.00 as exemplary damages and P20,000.00 for professional services.

Answering the complaint, petitioner Marcelo Sotto as administrator of the estate of Atty. Filemon Sotto, denied that there was
any trust relation between Don Filemon Sotto on one hand and Maria Fadullon Vda. de Rallos, Carmen Rallos and Concepcion
Rallos on the other; that granting that such relationship existed between Don Filemon Sotto and Concepcion Rallos, such a
relationship could not have endured until the death of Don Filemon Sotto; that the decree of Lot No. 7547 was issued in the
name of Carmen Rallos pursuant to an agreement among the heirs of Florentino Rallos that this parcel of land, together with the
other parcels of land involved in this case, be adjudicated to Carmen Rallos as her share in the estate of Florentino Rallos, in the
same manner that several parcels of land were likewise adjudicated to, and decrees issued in the name of Concepcion Rallos, as
her share in the estate of Florentino Rallos; that the partition agreement adjudicating Lots No. 7547 and ½ each of Lots Nos. 842,
2179-A and Lots Nos. 123 and 1370 were adjudicated to Carmen Rallos and the other halves of Lot Nos. 842 and 2179 were
adjudicated to Maria Fadullon Vda. de Rallos and decrees were accordingly issued later on by the Cadastral Court relative to the
said properties of land in pursuance to said partition agreement; that more than 1 year having elapsed from their issuance, the
decrees had become indefeasible; that the parcels of land, having been transferred to the purchasers for value and in good faith,
the present action for reconveyance will not prosper; that the plaintiffs have no cause of action as the same is barred by
prescription, laches and estoppel; and assuming that there was any trust relation between Atty. Sotto and Concepcion Rallos, the
trust was repudiated by Atty. Filemon Sotto a long time ago as shown by the series of transfers of these lots made by him
personally. A counterclaim for exemplary damages, moral damages and attorney's fees were also set up.
The issues having been joined and trial concluded, the Court of First Instance of Cebu rendered its decision 5dismissing the
complaint, holding that no express trust relation existed between Atty. Filemon Sotto on one hand and Maria Fadullon Vda. de
Rallos, Carmen Rallos and Concepcion Rallos on the other with respect to the lots in question; that there was no implied trust
subsisting between Atty. Sotto and the said heirs and that there was actual partition between them whereby the 5 lots were
given to Carmen Rallos as her share; that Carmen Rallos exercised acts of ownership over the 5 city lots in question to the
exclusion of Concepcion Rallos and Maria Fadullon Vda. de Rallos, registering them in her name under the Torrens system; that
Concepcion Rallos and her children after her death were thus notified constructively and actually by Carmen Rallos de Sotto's
raising the flag of exclusive ownership and repudiation of the trust relation, if there was any, and since then the period of
prescription of 10 years for bringing the action tolled against an implied trust. Laches or inaction on the part of Concepcion Rallos
and her heirs have thus rendered their demand sale or no longer enforceable.

The heirs of Concepcion Rallos appealed to the Court of Appeals. In the Decision 6 promulgated Nov. 25, 1972, the Court of
Appeals, Eighth Division, affirmed the judgment of the lower court. The appellate court agreed with the conclusion of the lower
court that no express trust was created between Atty. Filemon Sotto and the heirs of Florentino Rallos by the mere signing of
the Mocion in behalf of the heirs of Florentino Rallos; that when the surviving heirs of the deceased manifested in the petition
filed by Atty. Filemon Sotto during the probate of the will that it is their desire not to partition the estate so as to preserve and
maintain co-ownership over the properties, there can be no doubt that by direct and positive acts in holding the estate pro-
indiviso, they intended to create an express trust among themselves; that Filemon Sotto who merely represented the heirs in
that probate proceedings and filed the petition in court was not made a co-trustee by reason of his marriage to Carmen Rallos
even if he was the lawyer of the Rallos family enjoying the prestige of being a prominent lawyer with political influence; that the
estate of Florentino Rallos was already partitioned whether in 1925, prior or subsequent thereto, does not matter but the fact is
that the Original Transfer Certificates of Title covering the 5 parcels of land were originally issued in the name of Carmen Rallos
alone with respect to lot No. 7547 and jointly in the name of Carmen Rallos and Maria Fadullon Vda. de Rallos as regards Lots
Nos. 842, 2179-A, 123 and 1370, to the exclusion of Concepcion Rallos: that there was repudiation of the trust relation among
the co-owners, the date of which the Court can only be guided by the registration and issuance of the certificates of title when
Carmen Rallos put the stakes of exclusive ownership over the lands and repudiated whatever trust was reposed in her by her co-
heirs; that from the moment Carmen Rallos asserted her title over the questioned properties, the statute of limitation operated
against her co-heirs, irrespective of plain Sotto vs. Teves, plaintiffs' pretension that they discovered much too late that the 5 lots
were already titled in the name of Carmen Rallos, for such discovery is deemed to have taken place when the certificates of title
to the properties were issued in favor of Carmen Rallos.

The above decision of the Appellate Court having been assailed on a Motion for Reconsideration 7 filed by plaintiffs-appellants,
now the herein private respondents, the Court of Appeals, Special Division of Five, reversed the said decision in its Resolution of
Sept. 14, 1973. The Court, however, agreed with the ruling of the original decision declaring that the heirs of Florentino Rallos
had "by manifesting to the probate court that it was their desire to preserve and maintain the ownership of the inherited
properties thereby intended and created by direct and positive acts an express trust among themselves," as it was in conformity
with the evidence and the law. 8 The court also noted that "(t)he parties ceased to debate the question as to whether or not an
express trust was created by and among the Rallos heirs after our decision was promulgated. They came to agree that such a
relationship was indeed created and that it existed. In the present motion for reconsideration, the dispute centers on the issue as
to whether the express trust subsisted or it was repudiated. The parties are also in disaccord on the question as to whether Atty.
Sotto should be considered a party in the express trust or should be regarded merely as a constructive trust." 9

The respondent Court of Appeals said that upon the facts and under the law, Atty. Sotto can be regarded as the constructive
trustee of his wife and of the widow and descendants of Florentino Rallos; that Atty. Sotto's special relations with the Rallos heirs
inhibited him from any act or conduct that could put his interests above or in direct collision with the interests of those who had
reposed their trust and confidence in him.

The Court also found that the trust continued to subsist and did not terminate in 1925 by an adjudication of the lots to Carmen
Rallos, for no such adjudication took place; that the registration of the lots was not the result of such adjudication or partition
and said registration did not amount to a repudiation of the express trust. The titling of the lots in the names of Carmen Rallos
and Maria Fadullon Vda. de Rallos was done in their capacities as trustees and not as absolute and exclusive owners thereof. In
1925 an oral agreement founded upon and in reaffirmation of the 1913 written agreement was reached among the Rallos heirs
under which the 5 lots would remain under co-ownership of the 3 heirs, with Carmen Rallos as administratrix who would be
entitled to a lifetime of usufruct of the properties but upon her death, ownership of the lots would devolve to Concepcion Rallos
and her heirs. The Court ruled that Carmen Rallos could not legally deprive Concepcion Rallos and her heirs of their rights to the
properties through the execution of a will in favor of her husband Filemon Sotto, considering that the same were trust properties
held by her in trust for the benefit of Concepcion Rallos and her heirs, hence, Atty. Filemon Sotto must be deemed to have
received the properties impressed with the subsisting trust, not for himself but for the benefit of the cestuis que trust.

Concluding, the Court said: "Upon the facts, under the applicable laws, and even on the basis of equity, plaintiffs are entitled to
be declared the owners of the properties which admittedly originated from their ancestor and blood relative, their grandfather
Florentino Rallos. As owners of the lots in question plaintiffs are also entitled to the fruits
thereof. ... 10

Petitioner's motion for reconsideration having been denied, he now comes to Us to review the reversal of the original decision of
the appellate court and makes the following assignment of errors:

I. The Court of Appeals erred in finding that an express trust was created among the heirs of Florentino Rallos by virtue of the
Mocion Sobre la Disposicion de los Bienes filed by Filemon Sotto.

II. The Court of Appeals erred in not finding that the legal relationships created by the said Mocion Sobre La Disposicion De los
Bienes was a simple co-ownership.

III. The Court of Appeals erred in finding that Don Filemon Sotto became a co-trustee by virtue of his subsequent marriage to
Carmen Rallos.

IV. The Court of Appeals erred in not finding that the heirs of Florentino Rallos entered into an actual, effective and mutually
accepted partition of the estate.

V. The Court of Appeals erred in finding that an express trust existed by the use of parol evidence, disregarding the weight of a
torrens title and a public document mutually admitted by the parties.

VI. The Court of Appeals erred in not finding that even if an express trust was created, the same was expressly repudiated by
both parties.

VII. The Court of Appeals erred not finding the respondents guilty of laches and estoppel.

The first and second assignments of error relate to the Mocion Sobre la Disposicion de los Bienes hence We are constrained to
consider and resolve them together. Petitioner faults the Court of Appeals in finding that an express trust was created among the
heirs of Florentino Rallos by virtue of the Mocion filed by Atty. Sotto, and in not finding that the legal relationship created by
the Mocion was a simple co-ownership. Petitioner contends that the "motion is very clear and categorical and the only purpose
of that Motion is to keep the properties in a co-ownership by the heirs of Florentino Rallos, not to create a relationship of express
trust among the heirs." 11 He argues that "(s)ince the alleged source of express trust is a written document, applying therefore
the document aforecited it is necessary that the document expressly state and provide for the express trust," 12 and that it is a
contradiction in terms for the Court of Appeals to imply from the document an express trust.

Petitioner's contention is without merit. It may be true that the heirs of Florentino Rallos intended and desired to keep the
properties in co-ownership pro-indiviso when they signed the Mocion filed in their behalf by Atty. Filemon Sotto in the probate
proceedings to terminate the same but the legal effect of said agreement to preserve the properties in co-ownership as
expressed in writing and embodied in the Mocion was to create a form of an express trust among themselves as co-owners of
the properties. In the case of Castrillo, et al. vs. Court of Appeals, et al., 10 SCRA 549, the Supreme Court, speaking thru Chief
Justice Makalintal, said that "co-ownership is a form of trust and every co-owner is a trustee for the other." In co-ownership, the
relationship of each co-owner to the other co-owners is fiduciary in character and attribute. Whether established by law or by
agreement of the co owners, the property or thing held pro-indiviso is impressed with a fiducial nature that each co-owner
becomes a trustee for the benefit of his co-owners and he may not do any act prejudicial to the interest of his co-owners.

Under the law on Trusts, it is not necessary, as petitioner insists, that the document expressly state and provide for the express
trust, for no particular words are required for the creation of an express trust, it being sufficient that a trust is clearly intended.
(Art. 1444, N.C.C.) An express trust is created by the direct and positive acts of the parties, by some writing or deed or will or by
words evidencing an intention to create a trust. Cuaycong et al. vs. Cuaycong, et al., G.R. No. L-21616, Dec. 11, 1967).

We agree with the findings of the respondent Court of Appeals that an express trust was created by the heirs of Florentino Rallos
in respect to the properties in litigation when they agreed to preserve said properties in co-ownership among themselves as
manifested and expressed into writing and filed as a pleading captioned Mocion Sobre la Disposicion de los Bienes. Incidentally,
this is the same finding of the original decision of the Eight Division, same Court which was, however, reconsidered on other
grounds. We find no reason to disturb this finding of the respondent Court, the same being in accordance with law and the facts
as clearly established.

We now consider the third assignment of error. Petitioner contends that the Court of Appeals erred in finding that Don Filemon
Sotto became a co-trustee by virtue of his subsequent marriage to Carmen Rallos. Petitioner, while admitting that as a lawyer
some form of trust devolved upon the shoulders of Filemon Sotto; that as the husband of Carmen Sotto, some form of trust
devolved on his shoulders; that because of overwhelming social and political standing during his time some form of trust was
carried by Filemon Sotto, 13 argues that this is not the Trust that is defined in our Civil Code most especially if it is the express
trust under Articles 1441 and 1444 which is relied upon by the respondent Court of Appeals, Special Division of Five. The trust on
the shoulder of Filemon Sotto as the family lawyer in the intestate proceedings of Florentino Rallos was only coterminous with
the duration of the proceedings itself. The trust on the shoulder of Filemon Sotto by virtue of his marriage to Carmen Rallos was
only as much as the trust on the shoulders of the two husbands of Concepcion Rallos, Mariano Teves and Mariano Camara, and
this trust is not the trust defined in our Civil Code on express trust." 14

We find no merit in petitioner's contention. In the first place, petitioner's argument is based on an incorrect assumption.
Petitioner assumes that the respondent Court of Appeals found the existence of an express trust between Atty. Filemon Sotto
and the heirs of Florentino Rallos, which is not correct. What the appellate court held is that Atty. Sotto can be regarded as the
constructive trustee of his wife and of the widow and descendants of Florentino Rallos. In fact the Court declared, thus —

Upon the record, we have no doubt but that there existed more than mere professional relationship of
attorney and client between Atty. Sotto and the members of the family of Florentino Rallos. Shortly after the
closure of the testate proceeding, Atty. Sotto contracted marriage with one of the daughters of Florentino
Rallos. The attorney thereby became not only a family lawyer but also an actual member on the Rallos family
by affinity. By reason of his marriage to Carmen Rallos, and on account of his prestige and tremendous social
and political influence, Atty. Sotto enjoyed and exercised a personal, domestic, social, political and moral
ascendancy and superiority not only over his wife but also over Maria Fadullon, Concepcion Rallos, and the
latter's children. The evidence reveals that the Ralloses looked up to Atty. Sotto as protector and benefactor, as
one on whom they could repose their trust and confidence and who would take care of the properties
inherited from Florentino Rallos, and on his part, Atty. Sotto acknowledged his position as protector of the
rights and interests of the Rallos family. Like a pater familias, he attended to the financial and medical needs of
the direct descendants of Florentino Rallos and Maria Fadullon (Exhs. U and T). When one of the five parcels in
question, Lot 7547, was being claimed by a certain Manuel Ocejo, Atty. Sotto represented the Rallos family as
defendants in Civil Case No. 1641 of the Court of First Instance of Cebu, and the lot was adjudicated in favor of
the Rallos family. The acts and conduct of the Ralloses and Atty. Sotto fostered a close and fiduciary
relationship between them. Upon the facts and under the law, Atty. Sotto can be regarded as the constructive
trustee of his wife and of the widow and descendants of Florentino Rallos. For the settled rule is that:

The relation between parties, in order to be a fiduciary relation" need not be legal, but may be moral, social,
domestic or merely personal; and where by reason of kinship, business association, disparity in age or physical
or mental condition or other reason, the grantee is in an especially intimate position with regard to another
and the latter reposes a degree of trust and confidence in the former, confidential relationship exists which
prohibits the one entrusted from seeking a selfish benefit for himself during the course of relationship, and
affords a basis for imposing a constructive trust. (89 CJS Art. 151, pp. 1054-1057)

Atty. Sotto's special relationship with the Rallos heirs inhibited him from any act or conduct that would put his interests above, or
in direct collision with, the interests of those who had reposed their trust and confidence in him." 15

Secondly, it is also not quite correct for petitioner to claim that the respondent Court ruled that Don Filemon Sotto became a co-
trustee by virtue of his subsequent marriage to Carmen Rallos. The truth of the matter is that, according to the Court, Atty. Sotto
became a constructive trustee not only by reason of his marriage to Carmen Rallos but also on account of his prestige and
tremendous social and political influence, also because Atty. Sotto enjoyed and exercised a personal, domestic, social, political
and moral ascendancy and superiority over his wife, over Maria Fadullon, Concepcion Rallos and the latter's children, besides
being the protector of the rights and interests of the Rallos family acting like a pater familias attending to their financial and
medical needs, as well as the family lawyer.

We are in full accord with these findings and conclusion of the respondent Court as the same are final, conclusive and binding
upon Us, there being no exceptional circumstances or reasons to review or revise the same.

With respect to the fourth assignment of error, petitioner impugns the Court of Appeals in not finding that the heirs of Florentino
Rallos entered into an actual, effective and mutually accepted partition of the estate. Petitioner claims that partition of the
inherited properties took place between the heirs in 1925 in accordance with which the 5 parcels of land under litigation were
adjudicated to Carmen Rallos and that by reason of the partition and adjudication, the lots were granted to Carmen Rallos and
titles were secured and issued in her favor and name.

On the other hand, the private respondents claim that there was such a partition agreed upon in 1925 when, on the occasion of
the visit of Maria Fadullon Vda. de Rallos and Carmen Rallos to Concepcion Rallos after the latter's delivery of a child, it was
agreed that the properties in Carmen, Cebu and one lot in Basak, Cebu City, all assessed at P9,000.00 were to remain with
Concepcion Rallos, while the 5 lots now in litigation, then owned in common among the three heirs, and assessed at P55,000.00
would be administered by Carmen Rallos, the fruits thereof to be received by Carmen Rallos during her lifetime and that upon
the death of Carmen the properties will devolve to Concepcion and to her children.

The respondent Court rejected petitioner's claim of partition and adjudication, declaring that —

We cannot embrace the theory advanced by defendant, which is bereft of evidentiary support, that in 1925, on
the occasion of the visit paid by Maria Fadullon and Carmen Rallos to Concepcion Rallos, the five lots in
question were adjudicated to Carmen Rallos. To begin with, there is no concrete evidence of record on which
to lay such claim. It is our belief that the realities of the situation of the parties and the practicable and
equitable utility of the inheritance of Florentino Rallos are better determinants of the question as to whether
defendant's theory would be accepted or rejected. Carmen Rallos was admittedly without any child to support.
On the other hand, Concepcion Rallos was burdened with many children. The lots in Carmen and Basak, which
were allowed to be retained by Concepcion, were assessed at a mere P9,000.00, whereas the five lots in
question had an assessed value of P55,000.00 in 1925. It is very difficult to believe that Carmen Rallos and
Maria Fadullon had gone to Concepcion, on the occasion when another child had just been added to the
latter's burden, to tell her that they were depriving her of a valuable share in the inheritance, such share to be
given to Carmen who was childless. Such theory of defendant is utterly un Filipino and is thoroughly
irreconcilable with our customs and ways of treating close relatives. The more probable and believable is the
testimony of Pilar Teves that Maria Fadullon and Carmen Rallos came to Concepcion, as Magis bearing gifts, to
tell her that the five lots would go to her and to her children upon Carmen's death. The testimony of Pilar jibes
with the evidence that Florentino Rallos had expressed the wish that a portion of the inherited properties
should be devoted to defray the expenses for the education of his grandchildren. " 16

We uphold the stand of the respondent Court of Appeals, Special Division of Five in giving credence and belief to respondents'
claim of partition as testified to by Pilar Teves, one of the private respondents, because the Court's findings and its ruling is based
on the grounds of human experience, the ordinary course of things and our own native customs, culture and tradition to revere
the memory of our ancestor by keeping intact the estate in inheritance as long as possible, and to help one's brothers and sisters
to benefit from the sweat and toil of our parents, rather than dispossess them or given the inheritance away to perfect strangers,
strangers to family ties and filial affection. It is unconscionable and contrary to morals that a parent should deprive his children of
what lawfully belongs to them. (De Guzman vs. Aquino, 34 SCRA 236).

Petitioner's version of the partition and adjudication is, from a factual viewpoint, clearly untenable; it is even inconsistent with
his evidence. The facts show that all the lots were registered originally before the alleged partition and adjudication in 1925. Lots
123 and 1370 were registered on Sept. 23, 1913; Lot 842 on Feb. 5, 1918; Lot 2179-A on June 17, 1921 and Lot 7547 on February
9, 1918. Base on their respective dates, the acts of registration preceded the supposed partition and adjudication which
inexplicably reversed the usual order of occurrence which is, that partition and adjudication normally precede registration. More
than that, the first 4 lots mentioned above were registered jointly in the names of Maria Fadullon Vda. de Rallos and Carmen
Rallos, which strongly belied petitioner's contention that all the 5 lots were adjudicated to Carmen Rallos alone. The conclusion is
inescapable that petitioner's version did not take place and that the registration of the lots could not have resulted from the
supposed partition and adjudication.

As We have heretofore stressed, the findings of fact of the Court of Appeals are conclusive. Likewise, question of credibility is left
to the Court of Appeals. (De Garcia vs. Court of Appeals, 37 SCRA 129). Appreciation of evidence is within the domain of the
Court of Appeals because its findings of facts are not reviewable by the Supreme Court. (Talosig vs. Vda. de Nieba, 43 SCRA 472;
Tingco vs. de la Merced, 58 SCRA 89). The Supreme Court will not review findings of facts of the Court of Appeals, (Evangelista &
Co. vs. Santos, 51 SCRA 416).

On appeal from a decision of the Court of Appeals, the findings of fact made in said decision are final, except: (1) When the
conclusion is a finding grounded entirely on speculations, surmises or conjectures; (2) When the inference is manifestly mistaken,
absurd or impossible; (3) When there is a grave abuse of discretion; (4) When the judgment is based on a misapprehension of
facts; (5) When the findings of fact are conflicting, (6) When the Court of Appeals, in making its findings, went beyond the issues
of the case and the same is contrary to the admissions of both appellant and appellee. (Napolis vs. Court of Appeals, 43 SCRA
301). In the case at bar, We are convinced and satisfied that the above exceptions do not obtain.

Petitioner exacerbates that the Court of Appeals erred in finding that an express trust existed by the use of parol evidence,
disregarding the weight of a torrens title and a public document mutually admitted by the parties, in his fifth assignment of error.

We reject petitioner's contention as baseless. In the first place, the respondent Court did not find that an express trust existed by
the use of parol evidence. Actually, the Court, on this point said: "On the basis of undisputed facts, we held in our decision that
the heirs of Florentino Rallos, by manifesting to the probate court that it was their desire to preserve and maintain the co-
ownership over the inherited properties, thereby intended and created, by direct positive acts, an express trust among
themselves. (pp. 19, 24, Decision). It is our view that this holding should be maintained because it is in conformity with the
evidence and the law." 17 In a later portion of the Resolution appealed from, the Court said: "As early as in 1913, the Rallos heirs
had already agreed expressly and in writing that the five parcels shall remain in co-ownership, and that in regard to them each
one of the heirs shall be a trustee for the others." 18

In the second place, the oral testimony of Pilar Teves simply affirmed the existence of such trust relation; it gave proof that the
heirs desired to continue the express trust and co-ownership over the five lots. It was not necessary that the heirs create a new
agreement of co-ownership over the said properties. They merely reiterated their written agreement made in 1913 that the five
parcels would be preserved in co-ownership but made provisions for their administration, collection of rentals and final
disposition upon the death of Carmen Rallos.

There is, therefore, no violation of Art. 1443, N.C.C which provides that "no express trust concerning an immovable or any
interest therein may be proved by parol evidence," as the same is not applicable herein.

As to the pretension that the respondent appellate court disregarded the weight of a torrens title and a public document
mutually admitted by the parties, the latter refering to the will executed by Carmen Rallos in 1942 bequeathing all her properties
to her husband, Atty. Filemon Sotto, petitioner's reasoning holds no water because from the very nature of a trust relation which
existed between Carmen Rallos and her co-owners, she cannot obtain and secure a torrens title to the properties in her name
much less dispose of them by testament to her husband, a constructive trustee, to the prejudice and deprivation of the rights
and interests of said co-heirs.

A fiduciary relationship may exist even if the title to the property subject to the trust appears in the name of the trustee alone,
because in cases of trusteeship, the legal title usually appears in the name of the trustee, while the equitable title remains with
the cestui que trust. (Palma vs. Cristobal, 77 Phil. 712). True it is that Torrens titles were issued in the name of Carmen Rallos, but
the principle holds that a trustee who takes a Torrens title in his name cannot repudiate the trust by relying on the registration,
which is one of the well- known stations upon the finality of a decree of title. (Alvarez, et al. vs. E spiritu,
L-18833, August 14, 1965, 14 SCRA 892; Paterno Vda. de Padilla vs. Bibby de Padilla, 74 Phil. 377; Nery vs. Lorenzo, L-23096, April
27, 1972, 44 SCRA 431, 439 and the cases cited therein).

Neither an the will executed by Carmen Rallos deprive the private respondents of their ownership over the five parcels of land.
These lots were trust properties; Carmen Rallos was holding them in trust for her sister Concepcion Rallos and the latter's
children. Not being the absolute owner thereof, Carmen Rallos could not legally convey their ownership by including them in
their will. To all intents and purposes, the will and last testament of Carmen Rallos was merely a vehicle of an existing trust and
therefore, Atty. Filemon Sotto must be deemed to have received the properties not for himself but for the benefit of the cestui
que trust. And as a trustee of these trust properties, Atty. Sotto never alienated or disposed any of these properties during his
lifetime, thereby recognizing his position as trustee and that he held them for the benefit and interest of the cestuis que trust.

On the penultimate and ultimate assignments of error, petitioner fulminates against the appellate court in not finding that,
assuming that an express trust was created, the same was expressly repudiated by the parties and in not finding respondents
guilty of laches and estoppel.

The resolution of these supposed errors, the 6th and the 7th, must follow as a consequence to Our ruling a propospetitioner's
4th and 5th assignments of error. We sustained the respondent Court in rejecting petitioner's version of the partition and
adjudication and that the registration of the lots could not have resulted from the supposed partition and adjudication. We
affirmed that the express trust and co-ownership over the 5 parcels of land created and agreed in 1913 by and among the Rallos
heirs did not terminate in 1925 but subsisted and was maintained by them thereafter. We also declared that the registration of
the 4 lots in the names of Carmen Rallos and Maria Fadullon Vda. de Rallos and 1 lot in favor of Carmen Rallos alone was done in
their capacities as trustees and not as absolute or exclusive owners, and not only in their own behalf and benefit but also for the
other co-owner, Concepcion Rallos.

With these previous pronouncements in mind, We must overrule petitioner's stand that the trust was expressly repudiated by
the parties although he makes capital of the fact of registration of the properties in the names of Carmen Rallos and Maria
Fadullon Vda. de Rallos, contending strongly that such registration is evidence of repudiation of the express trust. The rationale
of Our conclusion in meeting petitioner's 4th assignment of error, including the authorities cited thereunder, holds with equal
force and persuasion over petitioner's contention of alleged repudiation by the parties. The registration of the property in the
name of the trustee in possession thereof must be deemed to have been effected for the benefit of the cestui que trust.
(Severino vs. Severino, 44 Phil 343; Baretto vs. Tuason, 50 Phil. 888).

Petitioner points to the fact that Concepcion Rallos had expressly repudiated the trust by selling the Basak properties which were
converted into a subdivision, as well as to acts of exclusive ownership over the properties of the estate by each of the co-owners
to show that the trust relationship and co-ownership was repudiated, renounced and terminated when the parties agreed to an
actual partition of the estate. Petitioner's advocation is futile. Besides the falsity of its basis for the reason that We found no
partition as theorized by petitioner and that the trust relation subsisted and was maintained in 1925 and thereafter, the acts of
exclusive ownership pointed by petitioner do not appear to be clear, open and unequivocal repudiation of the trust. Thus —

1. The sale by Concepcion Rallos of some of the properties originally forming part of the estate of Florentino Rallos cannot be
considered as a repudiation of the express trust by Concepcion herself. Said properties were given to her in the aforementioned
agreement testified to by Pilar Teves and did not form part of the five parcels of land over which an express trust was established
in 1913 and reiterated in 1925.

2. With respect to Lots 123 and 1370, Atty. Filemon Sotto, soon after the creation of the express trust in 1913, caused the
registration of these two lots and the issuance of Original Certificate of Title No. 251-253 dated Sept. 23, 1913 in the names of
Maria Fadullon and Carmen Rallos, to the exclusion of Concepcion Rallos. Thereafter, Atty. Sotto caused the deed of sale to be
executed by Maria Fadullon whereby she purportedly sold her share in the two lots to Carmen Rallos, and by virtue of such deed,
Atty. Sotto was able to obtain Transfer Certificate of Title in the name of his wife Carmen Rallos. That the registration of these
two lots took place in 1913, barely 8 months after the creation of the express trust, and being inconsistent with the terms of said
Motion that they preserve the inheritance in co-ownership and in equal shares, do not clearly show that Carmen Rallos intended
to repudiate their original agreement as contained in the Mocion. Since the titles were issued in the name of Carmen Rallos thru
the professional services of her lawyer-husband Atty. Filemon Sotto, it is more believable and consistent with the express trust
relation created under the Mocion dated and filed on Jan 25, 1913 that the title was taken in the name of Carmen Rallos but for
the benefit of the other heirs, namely Maria Fadullon Rallos and Concepcion Rallos.

3. With respect to Lot 2179-A, the Original Certificate of Title was obtained by Atty. Filemon Sotto on June 17, 1921 in the name
of Maria Fadullon de Rallos and Carmen Rallos, again excluding Concepcion Rallos. When Gov. Gen. Wood sued Atty. Sotto for
damages in the famous Wood-Sotto libel case, Atty. Sotto, fearful of the issuance of attachments proceedings, caused Maria
Fadullon and Carmen Rallos to sell Lot 2179-A in favor of the spouses Agustin Jereza and Beatriz de Jereza, in whose names the
Original Certificate of Title were then transferred. However, Atty. Sotto obliged the Jerezas to execute a counter deed of sale in
his favor and consequently a Transfer Certificate of Title was issued in the name of Atty. Filemon Sotto. The fictitious transfer of
the lot to the Jereza spouses which was proved by the testimony of the Private Secretary of Atty. Filemon Sotto does not indicate
a clear repudiation of the trust or of the co-ownership; the alleged repudiation was not open, public and deliberate. The acts, on
the contrary, were secretive and fraudulent assertions of exclusive ownership.

4. With regards to Lot 842, the same was registered on Feb. 5, 1918 in the name of Carmen Rallos and her mother Maria
Fadullon Rallos, also to the exclusion of Concepcion Rallos. A deed of sale executed by Maria Fadullon purported to sell her ½
share of the lot in favor of Concepcion Rallos. This deed was among the documents kept in the private files of Atty. Sotto which
were delivered by Cesar Sotto to the respondents. This deed was not registered in the Office of the Register of Deeds but was
kept secret in the files of Atty. Sotto. Thereafter, another deed was registered whereby Maria Fadullon sold her share to Carmen
Rallos and upon the registration of the latter deed, title was consolidated in the name of Carmen Rallos, who was issued a new
Transfer Certificate of Title. That the deed of sale supposedly asserting a claim of ownership and transfer thereof was kept under
seal of secrecy cannot be considered as unequivocal acts of repudiation of the trust and of the co-ownership. Although the title
to the lot was finally consolidated in the name of Carmen Rallos thru this secret manner, We must regard the registration to be
for the benefit of the other co-heirs who cannot be prejudiced by such furtive and stealthy act.

The finding of the respondent Court of Appeals that "(t)he issuance of titles and the execution of the purported sales and
transfers, which all culminated in Atty. Sotto's acquisition of titles in his name, occurred during the existence of the express trust,
and were shrouded by a cloud of secrecy, at least as far as Concepcion Rallos was concerned. AU the papers and documents
pertaining to the issuance of titles and to the transfers and sales were kept in Atty. Sotto's possession, and concealed from the
knowledge of Concepcion Rallos. At the time Concepcion Rallos was being deprived of a valuable share in the inheritance, she
was kept completely in the dark. Under the facts, appellee cannot rely on the certificates of title in the names of Atty. Sotto to
defeat the plaintiffs' right and cause of action," 19clearly appears to be correct and well-founded that the same will not be
disturbed by Us in the present petition for review on certiorari.

In Diaz, et al. vs. Gorricho and Aguado Phil. 261, the Supreme Court, speaking thru Justice J.B.L. Reyes, said. The express trusts
disable the trustee from acquiring for his own benefit the property committed to his management or custody, at least while he
does not openly repudiate the trust, and makes such repudiation known to the beneficiary or cestui que trust. For this reason,
the old Code of Civil Procedure (Act 190) declared that the rules on adverse possession do not apply to "continuing and
subsisting" (i.e., unrepudiated) trusts."

In Valdez, et al vs. Olarga et al., 51 SCRA 71, the Supreme Court, with Acting Chief Justice Makalintal as ponente, held: "And from
the standpoint of acquisitive prescription, or prescription of ownership, this Court has held in numerous decisions involving
fiduciary relations such as those occupied by a trustee with respect to the cestui que trust that as a general rule the former's
possession is not adverse and therefore cannot ripen into a title by prescription. Adverse possession in such a case requires the
concurrence of the following circumstances: (a) that the trustee has performed unequivocal acts of repudiation amounting to an
ouster of the cestui que trust; (b) that such positive acts of repudiation have been made known to the cestui que trust and (c)
that the evidence thereon should be clear and conclusive."

In the light of the above doctrinal , We rule that the registration of the lots in the names of Carmen Rallos and her mother Maria
Fadullon Vda de Rallos and their subsequent transfers and consolidation to Carmen Rallos' name alone in a manner shown to be
fictitious, fraudulent and secretive, thereby keeping the cestuis que trust in the dark did not constitute acts of repudiation of the
express trust. Such registrations were ineffective and not binding upon the cestui que trust. We are persuaded and convinced
that the circumstances required by said decisions are not present in the case at bar.

Petitioner finally raises a number of points which according to him constitute acts of repudiation by Concepcion Rallos such as
her failure and that of her heirs to oppose the probate of the will of Carmen and that this failure also constitute laches; that the
failure of the three inventories of properties submitted in the intestate proceedings of Concepcion Rallos to include the five
parcels of land in question is a repudiation; that this omission has also placed the respondents in estoppel to claim now the
properties; and that the failure of respondents to take any action to recover the properties during the lifetime of Filemon Sotto
constitute laches.

Laches has been defined as the failure or neglect, for an unreasonable and unexplained length of time, to do that which by
exercising due diligence, could or should have been done earlier; it is negligence or omission to assert a right within a reasonable
time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it. (Tijam, et al. v.
Sibonghanoy, et al., No. L-21450, April 15, 1968, 23 SCRA 29, 35). The defense of laches is an equitable one and does not concern
itself with the character of the defendant's title, but only with whether or not by reason of the plaintiff's long inaction or
inexcusable neglect he should be barred from asserting his claim at all. (Pabalate v. Echarri, Jr., 35 SCRA 518).

Estoppel, on the other hand, rests on this rule: whenever a party has, by his declaration, act or omission, intentionally and
deliberately led the other to believe a particular thing true, and to act, upon such belief, he cannot, in any litigation arising out of
such declaration, act, or omission, be permitted to falsify it." (De Castro vs. Ginete,
L-30058, March 28, 1969, 27 SCRA 623). Estoppel has its origin in equity and being based on moral and natural justice, finds
applicability whatever and whenever the special circumstances of a case so demand (Castrillo vs. Court of Appeals, L-18046,
March 31, 1964, 10 SCRA 549; Beronilla vs. Government Service Insurance System, L-21723, November 26, 1970, 36 SCRA 44).

In determining whether a delay in seeking to enforce a right constitutes laches, the existence of a confidential relationship
between the parties is an important circumstance for consideration, a delay under such circumstances not being so strictly
regarded as where the parties are strangers to each other. The doctrine of laches is not strictly applied between near relatives,
and the fact that the parties are connected by ties of blood or marriage tends to excuse an otherwise unreasonable delay.

The claim that the heirs of Concepcion Rallos are guilty of laches and are estopped from claiming the properties deserves scant
consideration, for in fiduciary relationship, the beneficiaries have the right to rely on the trust and confidence reposed in the
trustee. In the case at bar, there being no effective repudiation of the express trust created by and among the Rallos heirs, the
defense of laches invoked by petitioner is unvailing. (Buencamino, et al., G.R. No. L-19012, October 30, 1967). Moreover, under
the facts established and showing the complete dominance of Atty. Sotto over the heirs and descendants of the Rallos family, the
confidential relationship between the parties connected by ties of marriage and the reliance of the heirs with complete and
absolute confidence in their uncle-in-law, Atty. Sotto, who, however, kept the heirs in total ignorance and suppressed from them
the real truth regarding said properties that they were already registered in Atty. Sotto's name as finally revealed to them by
Cesar Sotto, the nephew and protegee of Atty. Sotto and were in danger of being lost to total strangers, the doctrine of laches is
not strictly applicable. Furthermore, Atty. Sotto received from his wife, Carmen Rallos, the properties under her will fully
impressed with their fiduciary character and in the full knowledge that said properties were trust properties as far back in 1913
when he drafted and prepared the Mocion Sobre la Disposicion de los Bienes and filed the same in the probate proceedings. This
knowledge he carried into his marriage with Carmen Rallos and throughout his lifetime so that the will executed by Carmen
Rallos bequeathing the properties to her husband, Atty. Sotto, was merely a vehicle of an existing trust. He thereby became a
trustee of the trust properties, not as an innocent third party and neither for a valuable consideration. Notwithstanding the fact
that the titles to the properties were ultimately transferred to the name of Atty. Filemon Sotto, widower, through administrative
proceedings, the titling thereof must be regarded as for the benefit and interest of the cestui que trust, the private respondents
herein.

In passing, it must be mentioned here that Don Filemon Sotto was a distinguished figure in the political history of the nation,
having been elected a delegate from Cebu to the Constitutional Convention that formulated the 1935 Philippine Constitution. In
recognition of his wisdom and sagacity, Don Filemon was chosen Chairman of the Committee of Seven that drafted and
sponsored the 1935 Philippine Constitution. It is to the great credit and commendation to the moral integrity of Don Filemon
that having preserved and maintained the properties in question under his name without alienating or transferring them to third
persons, and realizing the responsibilities of the trust reposed in him, he must have intended said properties to be restored to
their rightful owners who are the Rallos heirs, the private respondents herein.
We are satisfied that respondents, upon discovery of the fraudulent transfers, fictitious sales and concealed deeds relating to the
trust properties which were revealed to them by Cesar Sotto, the very nephew and protegee of Atty. Filemon Sotto and guardian
appointed over the latter's estate, promptly and seasonably filed the present action for reconveyance. There is no absolute rule
as to what constitutes laches or staleness of demand; each case is to he 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 invoked to defeat justice or to perpetrate fraud and injustice. It would be
rank injustice and patently iniquitous to deprive the lawful heirs of their rightful inheritance.

Private respondents are entitled to the relief prayed for, which is for the reconveyance of the properties to them. Since their
grandmother, Maria Fadullon Vda. de Rallos die in 1938, her pro-indiviso share in the properties then owned in co-ownership
descended by intestacy to her daughters, Concepcion and Carmen. Upon Carmen's death in 1945 without issue, the properties
devolved to Concepcion pursuant to their agreement in 1925 as testified to by Pilar Teves. When Concepcion Rallos died, her
heirs, who are now the private respondents, are entitled to these properties and should be declared owners thereof. They are
also entitled to the fruits thereof, the rentals of the properties, including damages and attorney's fees as assessed by the
appellate court which We find just and reasonable.

WHEREFORE, IN VIEW OF THE FOREGOING, the judgment appealed from is hereby affirmed, with costs against the petitioner.

SO ORDERED.

G.R. No. L-11005 October 31, 1957

SIARI VALLEY ESTATES, INC., petitioner,
vs.
FILEMON LUCASAN and Hon. W. M. ORTEGA, Judge of the Court of First Instance of Zamboanga del Norte,respondents.

Orendain and Sarmiento for petitioner.

Hon. Wenceslao M. Ortega in his own behalf.
Barrios, Barrios and Lucasan for respondents.

BENGZON, J.:

This is an offshoot of our decision in G.R. No. L-7046, Siari Valley Estate Inc, vs. Filemon Lucasan, 1 wherein we affirmed, on
appeal, the judgment of Hon. Patricio Ceniza, of the Zamboanga court of first instance in its Civil Case No. 134. The dispositive
part of such affirmed judgment read as follows:

Valley Estate all the cattle that may be found in the cattle ranch ". . . judgment is hereby rendered adjudicating to the
Siari of Filemon Lucasan specially the 321 heads that had been entrusted to his care as receiver or trustee of this Court
and ordering the defendant to deliver to the plaintiff all said cattle or their value amounting to P40,000 to pay damages
to the Siari Valley Estate for the 400 heads of cattle that he sold since 1946 up to the date of the trial at the rate of P100
per head or P40,000 plus interest at the rate of 6 per cent from the date of the trial of this case in January, 1951 and to
pay the cost of the proceeding. In addition, the defendant is hereby ordered to allow the Siari Valley Estate to round up
all the buffaloes that may be found in his cattle ranch after the Siari Valley Estate shall have posted a bond in the
amount of P5,000 to answer for whatever damages the operation may cause to him.

With regard to the contempt proceedings, Filemon Lucasan is hereby found guilty of the charges and he is hereby sentenced to
pay a fine of P500 pursuant to section 6 Rule 64 of the Rules of Court or suffer subsidiary imprisonment in case of insolvency at
the rate of one day every P2.50 that he falls to pay.

With regard to the three causes of action the counter-claim of the defendant, all of them are hereby dismissed for lack of merit.

Upon petition by the intervenors, the intervention had been dismissed in a previous order of this Court, without prejudice to the
filing of an independent action. (emphasis ours.)

After our decision had become final, the expediente was returned to the court below for execution. Thereupon a dispute arose
whether we had affirmed also that part of Judge Ceniza's judgement underlined in the above quotation (concerning buffaloes)
Lucasan pointed out that, in quoting the dispositive paragraphs of the appealed judgment, our decision had omitted the
underlined portion. Therefore, he argued, the affirmance of the judgment did not include the directive about buffaloes. As the
respondent judge sustained Lucasan's contention, this petition for mandamus and other auxiliary remedies was promptly filed.

Knowing the extent and scope of our decision in said appealed case, we issued a preliminary injunction designed to protest
petitioner's interests. And now, after the parties have been heard, we turn to the principal question, which is: did we uphold the
right given to plaintiff by the court below "to round up the buffaloes"? The answer must be: we did. In the concluding part of our
decision we found the appealed judgment to be substantially in accordance with the facts and the law; and then we adjudged:
"Therefore it is hereby affirmed with appellant."

Ordinarily the affirmed judgment is that contained in its dispositive part; in the said Siari Valley appealed case, the above-quoted
four paragraphs.

It is true that in the opening statements our decision quoted the dispositive part of the appealed judgment as follows:

Premises considered, judgment is hereby rendered, adjudicating to the Siari Valley Estate all the cattle that may be
found in the cattle ranch of Filemon Lucasan, specially the 321 heads that had been entrusted to his care as receiver or
trustee of this Court and ordering the defendant to deliver to the plaintiff all said cattle or their value amounting to
P40,000, to pay damages to the Siari Valley Estate for the 400 heads of cattle that he sold since 1946 up to the date of
the trial at the rate of P100 per head or P40,000 plus interest at the rate of 6 per cent from the date of the trial of this
case in January, 1951 and to pay the costs of the proceeding.

With regard to the contempt proceedings, Filemon Lucasan is hereby found guilty of the charges and he is hereby
sentenced to pay a fine of P500 pursuant to section 6, Rule 64, of the Rules of Court or suffer subsidiary imprisonment
in case of insolvency at the rate of one day for every P2.50 that he fails to pay.
thereby omitting the portion regarding buffaloes. But observe that we used elliptical signs, i. e. several *'s which indicated the
omission of some portion or portions. This did not evince any intention to "modify" the judgment by eliminating the omitted
portion.2 The judgment, we decreed in concluding, "is hereby affirmed". We did not say, it is hereby modified. Neither did we say,
"the quoted portion of the judgment is hereby affirmed". For that matter, would respondents maintain likewise the last two
paragraphs of the dispositive part of the appealed judgment (regarding the counterclaim and the intervenors) were not equally
affirmed, because they were not quoted?

We explained in Contreras vs. Felix, 78 Phil., 570, 44 Off. Gaz., 4306 that "the final judgment as rendered is the judgment of the
court, irrespective of all seemingly contrary statements in the decision", and that the judgement must be distinguished from the
opinion. Our decree was one affirming the appealed judgment. If any statement in the opinion preceding the decree seemingly
excluded a portion (which we deny), it must be overlooked, because the judgment or the decree prevails over the opinion.

In construing confirmatory decisions of appellate courts the practice is to regard the whole of the appealed judgment to have
been upheld3 even if several points thereof have not been discussed "or touched upon such confirmatory decision." 4

The truth is, as may be verified from our decision itself, our statement omitted the portion concerning buffaloes because it was
immaterial for the purpose of the appeal. It was not a point necessary to understand or decide the questions then before
us.5 Indeed the whole decision made no reference to the subject of buffaloes, even as appellant's brief (Lucasan) failed to debate
such aspect of the appealed judgment.

The argument is advanced that inasmuch as the plaintiff "never claimed the buffaloes in its amended complaint (and) the (lower)
court could not have granted that which was not prayed", therefore the Supreme Court most probably had excluded the matter
(of buffaloes) from its confirmatory order. Such reasoning has no valid foundation because Lucasan was not in default, there was
trial, and under the circumstances the plaintiff could be granted any relief that was supported by the evidence "although not
specified in his pleadings."6 The other argument addressed to the proposition that the Court shouldn't have, and couldn't have
affirmed that phase of the judgment is too late, if not impertinent. The affirmance without modification of the judgment is final.
And the parties should realize that the matter of buffaloes was not such plain error (supposing it was error) as to call for special
consideration by this Court even if ignored7 by appellant's counsel in his brief.

All the foregoing shows the respondent judge's mistake in declining to permit Siari Valley Inc. to round up its buffaloes roaming
on Lucasan's ranch. But the latter's resistance to such rounding-up, founded on a rather technical plea, despite his knowledge
that he had complained of such buffaloes grazing on his land (R. A. in L-7046 p. 140), was not a mere mistake but a rather sharp
practice transcending the limits of good faith. However-overruling petitioner's contention-Lucasan will not be declared to have
committed contempt of court considering on the one hand that his ground of objection appeared to be not so flimsy 8 as to make
his conduct a "willful disregard or disobedience"9 or a "clear and contumacious refusal to obey" 10 and on the other hand
remembering that the power to punish for contempt should be conservatively exercised.

Wherefore, the petition for mandamus is granted, the respondent judge, and whoever may be acting in his place, is hereby
ordered to enforce, and the other respondent Filemon Lucasan is ordered to obey, the aforementioned judgment in full of Judge
Ceniza which was totally affirmed by this Court on appeal. Costs of this proceeding shall be paid respondent Lucasan. So ordered.

LEONOR B. CRUZ, G.R. No. 164110

Petitioner,
Present:

QUISUMBING, J., Chairperson,

- versus - CARPIO,
CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.

TEOFILA M. CATAPANG, Promulgated:

Respondent.
 February 12, 2008
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

QUISUMBING, J.:

This petition for review seeks the reversal of the Decision [1] dated September 16, 2003 and the Resolution[2] dated June 11,
2004 of the Court of Appeals in CA-G.R. SP No. 69250. The Court of Appeals reversed the Decision[3] dated October 22, 2001 of the
Regional Trial Court (RTC), Branch 86, Taal, Batangas, which had earlier affirmed the Decision [4] dated September 20, 1999 of the
7th Municipal Circuit Trial Court (MCTC) of Taal, Batangas ordering respondent to vacate and deliver possession of a portion of the lot
co-owned by petitioner, Luz Cruz and Norma Maligaya.

The antecedent facts of the case are as follows.

Petitioner Leonor B. Cruz, Luz Cruz and Norma Maligaya are the co-owners of a parcel of land covering an area of 1,435
square meters located at Barangay Mahabang Ludlod, Taal, Batangas.[5] With the consent of Norma Maligaya, one of the
aforementioned co-owners, respondent Teofila M. Catapang built a house on a lot adjacent to the abovementioned parcel of
land sometime in 1992. The house intruded, however, on a portion of the co-owned property. [6]

In the first week of September 1995, petitioner Leonor B. Cruz visited the property and was surprised to see a part of
respondents house intruding unto a portion of the co-owned property. She then made several demands upon respondent to
demolish the intruding structure and to vacate the portion encroaching on their property. The respondent, however, refused and
disregarded her demands.[7]

On January 25, 1996, the petitioner filed a complaint [8] for forcible entry against respondent before the 7 th MCTC of Taal,
Batangas. The MCTC decided in favor of petitioner, ruling that consent of only one of the co-owners is not sufficient to justify
defendants construction of the house and possession of the portion of the lot in question. [9]The dispositive portion of the MCTC
decision reads:
WHEREFORE, judgment is hereby rendered ordering the defendant or any person acting in her behalf
to vacate and deliver the possession of the area illegally occupied to the plaintiff; ordering the defendant to
pay plaintiff reasonable attorneys fees of P10,000.00, plus costs of suit.

SO ORDERED.[10]

On appeal, the RTC, Branch 86, Taal, Batangas, affirmed the MCTCs ruling in a Decision dated October 22, 2001, the
dispositive portion of which states:
Wherefore, premises considered, the decision [appealed] from is hereby affirmed in toto.

SO ORDERED.[11]

After her motion for reconsideration was denied by the RTC, respondent filed a petition for review with the Court of Appeals,
which reversed the RTCs decision. The Court of Appeals held that there is no cause of action for forcible entry in this case because
respondents entry into the property, considering the consent given by co-owner Norma Maligaya, cannot be characterized as one made
through strategy or stealth which gives rise to a cause of action for forcible entry. [12] The Court of Appeals decision further held that
petitioners remedy is not an action for ejectment but an entirely different recourse with the appropriate forum. The Court of Appeals
disposed, thus:

WHEREFORE, premises considered, the instant Petition is hereby GRANTED. The challenged Decision
dated 22 October 2001 as well as the Order dated 07 January 2002 of the Regional Trial Court of Taal, Batangas,
Branch 86, are hereby REVERSED and SET ASIDE and, in lieu thereof, another is entered DISMISSING the
complaint for forcible entry docketed as Civil Case No. 71-T.

SO ORDERED.[13]
 After petitioners motion for reconsideration was denied by the Court of Appeals in a Resolution dated June 11, 2004,
she filed the instant petition.

Raised before us for consideration are the following issues:

I.
WHETHER OR NOT THE KNOWLEDGE AND CONSENT OF CO-OWNER NORMA MALIGAYA IS A VALID LICENSE
FOR THE RESPONDENT TO ERECT THE BUNGALOW HOUSE ON THE PREMISES OWNED PRO-INDIVISO SANS
CONSENT FROM THE PETITIONER AND OTHE[R] CO-OWNER[.]

II.
WHETHER OR NOT RESPONDENT, BY HER ACTS, HAS ACQUIRED EXCLUSIVE OWNERSHIP OVER THE PORTION OF
THE LOT SUBJECT OF THE PREMISES PURSUANT TO THE CONSENT GRANTED UNTO HER BY CO-OWNER NORMA
MALIGAYA TO THE EXCLUSION OF THE PETITIONER AND THE OTHER CO-OWNER.[14]

III.
. . . WHETHER OR NOT RESPONDENT IN FACT OBTAINED POSSESSION OF THE PROPERTY IN QUESTION BY
MEANS OF SIMPLE STRATEGY.[15]

Petitioner prays in her petition that we effectively reverse the Court of Appeals decision.

Simply put, the main issue before us is whether consent given by a co-owner of a parcel of land to a person to construct
a house on the co-owned property warrants the dismissal of a forcible entry case filed by another co-owner against that person.

In her memorandum,[16] petitioner contends that the consent and knowledge of co-owner Norma Maligaya cannot
defeat the action for forcible entry since it is a basic principle in the law of co-ownership that no individual co-owner can claim
title to any definite portion of the land or thing owned in common until partition.

On the other hand, respondent in her memorandum[17] counters that the complaint for forcible entry cannot prosper
because her entry into the property was not through strategy or stealth due to the consent of one of the co-owners. She further
argues that since Norma Maligaya is residing in the house she built, the issue is not just possession de facto but also one
of possession de jure since it involves rights of co-owners to enjoy the property.

As to the issue of whether or not the consent of one co-owner will warrant the dismissal of a forcible entry case filed by
another co-owner against the person who was given the consent to construct a house on the co-owned property, we have held
that a co-owner cannot devote common property to his or her exclusive use to the prejudice of the co-ownership. [18] In our view,
a co-owner cannot give valid consent to another to build a house on the co-owned property, which is an act tantamount to
devoting the property to his or her exclusive use.

Furthermore, Articles 486 and 491 of the Civil Code provide:

Art. 486. Each co-owner may use the thing owned in common, provided he does so in accordance with
the purpose for which it is intended and in such a way as not to injure the interest of the co-ownership or prevent
the other co-owners from using it according to their rights. The purpose of the co-ownership may be changed by
agreement, express or implied.

Art. 491. None of the co-owners shall, without the consent of the others, make alterations in the thing
owned in common, even though benefits for all would result therefrom. However, if the withholding of the
consent by one or more of the co-owners is clearly prejudicial to the common interest, the courts may afford
adequate relief.

Article 486 states each co-owner may use the thing owned in common provided he does so in accordance with the
purpose for which it is intended and in such a way as not to injure the interest of the co-ownership or prevent the other co-
owners from using it according to their rights. Giving consent to a third person to construct a house on the co-owned property
will injure the interest of the co-ownership and prevent other co-owners from using the property in accordance with their rights.
 Under Article 491, none of the co-owners shall, without the consent of the others, make alterations in the thing owned in
common. It necessarily follows that none of the co-owners can, without the consent of the other co-owners, validly consent to the
making of an alteration by another person, such as respondent, in the thing owned in common. Alterations include any act of strict
dominion or ownership and any encumbrance or disposition has been held implicitly to be an act of alteration. [19] The construction of a
house on the co-owned property is an act of dominion. Therefore, it is an alteration falling under Article 491 of the Civil Code. There
being no consent from all co-owners, respondent had no right to construct her house on the co-owned property.

Consent of only one co-owner will not warrant the dismissal of the complaint for forcible entry filed against the builder. The
consent given by Norma Maligaya in the absence of the consent of petitioner and Luz Cruz did not vest upon respondent any right to
enter into the co-owned property. Her entry into the property still falls under the classification through strategy or stealth.

The Court of Appeals held that there is no forcible entry because respondents entry into the property was not through
strategy or stealth due to the consent given to her by one of the co-owners. We cannot give our imprimatur to this sweeping
conclusion. Respondents entry into the property without the permission of petitioner could appear to be a secret and
clandestine act done in connivance with co-owner Norma Maligaya whom respondent allowed to stay in her house. Entry into
the land effected clandestinely without the knowledge of the other co-owners could be categorized as possession by stealth.
[20]
Moreover, respondents act of getting only the consent of one co-owner, her sister Norma Maligaya, and allowing the latter to
stay in the constructed house, can in fact be considered as a strategy which she utilized in order to enter into the co-owned
property. As such, respondents acts constitute forcible entry.

Petitioners filing of a complaint for forcible entry, in our view, was within the one-year period for filing the complaint. The one-year
period within which to bring an action for forcible entry is generally counted from the date of actual entry to the land. However, when
entry is made through stealth, then the one-year period is counted from the time the petitioner learned about it. [21] Although
respondent constructed her house in 1992, it was only in September 1995 that petitioner learned of it when she visited the
property. Accordingly, she then made demands on respondent to vacate the premises. Failing to get a favorable response, petitioner
filed the complaint on January 25, 1996, which is within the one-year period from the time petitioner learned of the construction.

WHEREFORE, the petition is GRANTED. The Decision dated September 16, 2003 and the Resolution dated June 11, 2004
of the Court of Appeals in CA-G.R. SP No. 69250 are REVERSED and SET ASIDE. The Decision dated October 22, 2001 of the
Regional Trial Court, Branch 86, Taal, Batangas is REINSTATED. Costs against respondent.

SO ORDERED.

G.R. No. 166519 March 31, 2009

NIEVES PLASABAS and MARCOS MALAZARTE, Petitioners,

vs.
COURT OF APPEALS (Special Former Ninth Division), DOMINADOR LUMEN, and AURORA AUNZO,Respondents.

DECISION
NACHURA, J.:

Assailed in this petition for review on certiorari under Rule 45 of the Rules of Court are the May 12, 2004 Decision 1of the Court of
Appeals (CA) in CA-G.R. CV No. 43085 and the December 1, 2004 Resolution 2 denying reconsideration of the challenged decision.

The pertinent facts and proceedings follow.

In 1974, petitioners3 filed a complaint for recovery of title to property with damages before the Court of First Instance (now,
Regional Trial Court [RTC]) of Maasin, Southern Leyte against respondents. The case was docketed as Civil Case No. R-1949. The
property subject of the case was a parcel of coconut land in Canturing, Maasin, Southern Leyte, declared under Tax Declaration
No. 3587 in the name of petitioner Nieves with an area of 2.6360 hectares. 4In their complaint, petitioners prayed that judgment
be rendered confirming their rights and legal title to the subject property and ordering the defendants to vacate the occupied
portion and to pay damages.5

Respondents, for their part, denied petitioners’ allegation of ownership and possession of the premises, and interposed, as their
main defense, that the subject land was inherited by all the parties from their common ancestor, Francisco Plasabas. 6

Revealed in the course of the trial was that petitioner Nieves, contrary to her allegations in the complaint, was not the sole and
absolute owner of the land. Based on the testimonies of petitioners’ witnesses, the property passed on from Francisco to his son,
Leoncio; then to Jovita Talam, petitioner Nieves’ grandmother; then to Antonina Talam, her mother; and then to her and her
siblings—Jose, Victor and Victoria.7

After resting their case, respondents raised in their memorandum the argument that the case should have been terminated at
inception for petitioners’ failure to implead indispensable parties, the other co-owners – Jose, Victor and Victoria.

In its April 19, 1993 Order,8 the trial court, without ruling on the merits, dismissed the case without prejudice, thus:

This Court, much as it wants to decide the instant case on the merits, being one of the old inherited cases left behind, finds
difficulty if not impossibility of doing so at this stage of the proceedings when both parties have already rested their cases.
Reluctantly, it agrees with the defendants in the observation that some important indispensable consideration is conspicuously
wanting or missing.

It is not the Court’s wish to turn its back on the crucial part of the case, which is the pronouncement of the judgment to settle
the issues raised in the pleadings of the parties once and for all, after all the time, effort and expense spent in going through the
trial process.

But, rules are rules. They have to be followed, to arrive at a fair and just verdict. Section 7, Rule 3 of the Rules of Court provides:

"x x x Compulsory joinder of indispensable parties. – Parties in interest without whom no final determination can be had of an
action shall be joined either as plaintiffs or defendants."

What the Court wants to say here is that the instant case should have been dismissed without prejudice a long time ago for lack
of cause of action as the plaintiffs spouses Marcos Malazarte and Nieves Plasabas Malazarte have no complete legal personality
to sue by themselves alone without joining the brothers and sisters of Nieves who are as INDISPENSABLE as the latter in the final
determination of the case. Not impleading them, any judgment would have no effectiveness.

They are that indispensable that a final decree would necessarily affect their rights, so that the Court cannot proceed without
their presence. There are abundant authorities in this regard. Thus –

"The general rule with reference to the making of parties in a civil action requires the joinder of all indispensable parties under
any and all conditions, their presence being a sine qua non of the exercise of judicial power. (Borlasa v. Polistico, 47 Phil. 345,
348) For this reason, our Supreme Court has held that when it appears of record that there are other persons interested in the
subject matter of the litigation, who are not made parties to the action, it is the duty of the court to suspend the trial until such
parties are made either plaintiffs or defendants. (Pobre, et al. v. Blanco, 17 Phil. 156). x x x Where the petition failed to join as
party defendant the person interested in sustaining the proceeding in the court, the same should be dismissed. x x x When an
indispensable party is not before the court, the action should be dismissed. (People, et al. v. Rodriguez, et al., G.R. Nos. L-14059-
62, September 30, 1959) (sic)

"Parties in interest without whom no final determination can be had of an action shall be joined either as plaintiffs or
defendants. (Sec. 7, Rule 3, Rules of Court). The burden of procuring the presence of all indispensable parties is on the plaintiff.
(39 Amjur [sic] 885). The evident purpose of the rule is to prevent the multiplicity of suits by requiring the person arresting a
right against the defendant to include with him, either as co-plaintiffs or as co-defendants, all persons standing in the same
position, so that the whole matter in dispute may be determined once and for all in one litigation. (Palarca v. Baginsi, 38 Phil.
177, 178).

"An indispensable party is a party who has such an interest in the controversy or subject matter that a final adjudication cannot
be made, in his absence, without inquiring or affecting such interest; a party who has not only an interest of such a nature that a
final decree cannot be made without affecting his interest or leaving the controversy in such a condition that its final
determination may be wholly inconsistent with equity and good conscience. (67 C.J.S. 892). Indispensable parties are those
without whom no action can be finally determined." (Sanidad v. Cabataje, 5 Phil. 204)

WHEREFORE, IN VIEW OF ALL THE FOREGOING CONSIDERATIONS, both the complaint and the counterclaim in the instant case
are ordered DISMISSED without prejudice. No pronouncement as to costs.

SO ORDERED.9

Aggrieved, petitioners elevated the case to the CA. In the challenged May 12, 2004 Decision, 10 the appellate court affirmed the
ruling of the trial court. The CA, further, declared that the non-joinder of the indispensable parties would violate the principle of
due process, and that Article 487 of the Civil Code could not be applied considering that the complaint was not for ejectment,
but for recovery of title or a reivindicatory action.11

With their motion for reconsideration denied in the further assailed December 1, 2004 Resolution, 12 petitioners filed the instant
petition.

The Court grants the petition and remands the case to the trial court for disposition on the merits.

Article 487 of the Civil Code provides that any one of the co-owners may bring an action for ejectment.1avvphi1.zw+ The article
covers all kinds of actions for the recovery of possession, including an accion publiciana and a reivindicatory action. A co-owner
may file suit without necessarily joining all the other co-owners as co-plaintiffs because the suit is deemed to be instituted for
the benefit of all. Any judgment of the court in favor of the plaintiff will benefit the other co-owners, but if the judgment is
adverse, the same cannot prejudice the rights of the unimpleaded co-owners. 13

With this disquisition, there is no need to determine whether petitioners’ complaint is one for ejectment or for recovery of title.
To repeat, Article 487 of the Civil Code applies to both actions.

Thus, petitioners, in their complaint, do not have to implead their co-owners as parties. The only exception to this rule is when
the action is for the benefit of the plaintiff alone who claims to be the sole owner and is, thus, entitled to the possession thereof.
In such a case, the action will not prosper unless the plaintiff impleads the other co-owners who are indispensable parties. 14

Here, the allegation of petitioners in their complaint that they are the sole owners of the property in litigation is immaterial,
considering that they acknowledged during the trial that the property is co-owned by Nieves and her siblings, and that
petitioners have been authorized by the co-owners to pursue the case on the latter’s behalf. 15Impleading the other co-owners is,
therefore, not mandatory, because, as mentioned earlier, the suit is deemed to be instituted for the benefit of all.

In any event, the trial and appellate courts committed reversible error when they summarily dismissed the case, after both
parties had rested their cases following a protracted trial commencing in 1974, on the sole ground of failure to implead
indispensable parties. The rule is settled that the non-joinder of indispensable parties is not a ground for the dismissal of an
action. The remedy is to implead the non-party claimed to be indispensable. Parties may be added by order of the court on
motion of the party or on its own initiative at any stage of the action and/or at such times as are just. If petitioner refuses to
implead an indispensable party despite the order of the court, the latter may dismiss the complaint/petition for the
plaintiff’s/petitioner's failure to comply therewith.16

WHEREFORE, premises considered, the instant petition is GRANTED, and the case is REMANDED to the trial court for appropriate
proceedings. The trial court is further DIRECTED to decide on the merits of the civil case WITH DISPATCH.

SO ORDERED.
G.R. No. 146294 July 31, 2006

JOHN ABING, petitioner,

vs.
JULIET WAEYAN, respondent.

DECISION

GARCIA, J.:

In this appeal by way of a petition for review under Rule 45 of the Rules of Court, petitioner John Abing (John, hereafter) seeks to
set aside the Decision1 dated October 24, 2000 of the Court of Appeals (CA) in CA-G.R. SP No. 48675, reversing that of the
Regional Trial Court (RTC) of Benguet, Branch 64, which affirmed an earlier decision of the Municipal Trial Court (MTC) of
Mankayan, Benguet in an ejectment suit thereat commenced by the petitioner against the respondent.

In the main, the controversy is between a man and a woman who, during the good old days, lived together as husband and wife
without the benefit of marriage. During their cohabitation, they acquired properties. Later, they parted ways, and with it this
litigation between them involving one of their common properties.

The facts:
Sometime in 1986, John and respondent Juliet Waeyan (Juliet, for short) met and fell in love with each other. In time, the duo
cohabited as husband and wife without the benefit of marriage. Together, the couple bought a 2-storey residential house from
one Benjamin Macua which was erected on a lot owned by a certain Alejandro Diño on Aurora Street, Mankayan, Benguet.
Consequent to the purchase, the tax declaration of the 2-storey house was transferred in the name of Juliet.

On December 2, 1991, Juliet left for overseas employment in Korea. She would send money to John who deposited the same in
their joint bank account.

In 1992, the original 2-storey residential house underwent renovation. To it was annexed a new structure which housed a sari-
sari store. This new structure and the sari-sari store thereat are the properties involved in this case.

In 1994, Juliet returned from Korea and continued to live with John. She managed the sari-sari store while John worked as a mine
employee of the Lepanto Consolidated Mining, Inc.

In 1995, the relationship between the two turned from bad to worse. Hence, they decided to partition their properties. For the
purpose, they executed on October 7, 1995 a Memorandum of Agreement. Unfortunately, the document was left unsigned by
the parties although signed by the witnesses thereto. Under their unsigned agreement, John shall leave the couples' dwelling
with Juliet paying him the amount of P428,870.00 representing John's share in all their properties. On the same date – October
7, 1995 – Juliet paid John the sum of P232,397.66 by way of partial payment of his share, with the balance of P196,472.34 to be
paid by Juliet in twelve monthly installment beginning November 1995.

Juliet, however, failed to make good the balance. On account thereof, John demanded of her to vacate the annex structure
housing the sari-sari store. Juliet refused, prompting John to file an ejectment suit against her before the MTC of Mankayan,
Benguet.

In his complaint, John alleged that he alone spent for the construction of the annex structure with his own funds and thru money
he borrowed from his relatives. In fact, he added that the tax declaration for the structure was under his name. On this premise,
John claimed exclusive ownership of the subject structure, which thereby gave him the right to eject Juliet therefrom upon the
latter's failure to pay the agreed balance due him under the aforementioned Memorandum of Agreement.

In her answer, Juliet countered that their original house was renovated thru their common funds and that the subject structure
annexed thereto was merely an attachment or an extension of their original residential house, hence the same pertained to the
two of them in common.

In a decision2 dated March 15, 1997, the MTC, on its finding that the money used in the construction of the structure in question
solely came from John, ruled that the same exclusively pertained to the latter, and accordingly ordered Juliet's eviction
therefrom, including the sari-sari store thereat, and required her to surrender possession thereof to John, thus:

WHEREFORE, judgment is rendered in favor of the plaintiff (John) and against the defendant (Juliet).

Defendant is hereby ordered to vacate the premises of the store in litigation covered by Tax Declaration No. 96-001-
00445 in the name of the Plaintiff and turn over possession thereof to the latter.

Defendant is hereby further ordered to pay the Plaintiff the sum of P2,500.00 a month from the time she withheld
possession of the store in litigation in June 1996 until she vacates the same and turn over possession thereof to the
Plaintiff.

Defendant is finally ordered, to pay the sum of P5,000.00 to the Plaintiff by way of Attorney's fees; and to pay the costs.

SO ORDERED.

On Juliet's appeal to the RTC, the latter, in its decision of July 29, 1995, affirmed that of the MTC. Undaunted, Juliet then went to
the CA in CA-G.R. SP No. 48675.

As stated at the threshold hereof, the CA, in its Decision of October 24, 2000, 3 reversed that of the RTC, to wit:

WHEREFORE, the petition is GRANTED. The assailed decision of the Regional Trial Court is hereby reversed and set aside.
Petitioner, Juliet Waeyan is entitled to possess the property and maintain therein her business.

SO ORDERED.
Partly says the CA in its reversal disposition:

It is undisputed that the parties lived together as husband and wife without the benefit of marriage from 1986 to 1995
and that they acquired certain properties which must be divided between them upon the termination of their common
law relationship.

xxx xxx xxx

. . . their property relations cannot be governed by the provision of the Civil Code on conjugal partnership... but by the
rule on co-ownership.

xxx xxx xxx

. . . the parties' share in respect of the properties they have accumulated during their cohabitation shall be equal unless
there is proof to the contrary.

To the CA, John's evidence failed to establish that he alone spent for the construction of the annex structure. Hence, the same
pertained to both, and being a co-owner herself, Juliet cannot be evicted therefrom, adding that if ever, John's cause of action
should have been for a sum of money "because he claims that Juliet still owes him the payment for the extension." According to
the CA, ejectment cannot lie against Juliet because Juliet's possession of the premises in dispute was not by virtue of a contract,
express or implied, nor did she obtain such possession thru force, intimidation, threat, strategy or stealth.

Hence, John's present recourse, submitting that the CA erred in –

1. not giving effect to the parties' Memorandum of Agreement which should have been binding between them albeit
unsigned by both;

2. in holding that the subject premises (annex structure housing the sari-sari store) is owned by the two of them in
common;

3. in ruling that the parties should settle their common properties in a separate action for partition even as the
community character of the subject premises has not been proven.

We AFFIRM with modification.

Essentially, the issues raised center on the core question of whether or not the property subject of the suit pertains to the
exclusive ownership of petitioner, John. Departing from the factual findings of the two courts before it, the CA found that the
premises in dispute is owned in common by Juliet and John, the latter having failed to establish by the required quantum of
proof that the money spent for the construction thereof solely came from him. Being a co-owner of the same structure, Juliet
may not be ejected therefrom.

While the question raised is essentially one of fact, of which the Court normally eschews from, yet, given the conflicting factual
findings of the three courts below, the Court shall go by the exception 4 to the general rule and proceed to make its own
assessment of the evidence.

First and foremost, it is undisputed that the parties hereto lived together as husband and wife from 1986 to 1995 without the
benefit of marriage. Neither is it disputed that sometime in December 1991, Juliet left for Korea and worked thereat, sending
money to John which the latter deposited in their joint account. In fact, Juliet was still in Korea when the annex structure was
constructed in 1992.

Other than John's bare allegation that he alone, thru his own funds and money he borrowed from his relatives, spent for the
construction of the annex structure, evidence is wanting to support such naked claim. For sure, John even failed to reveal how
much he spent therefor. Neither did he divulge the names of the alleged relatives from whom he made his borrowings, let alone
the amount of money he borrowed from them. All that petitioner could offer by way of reinforcing his claim of spending his own
funds and borrowed money in putting up the subject structure was the affidavit executed by a certain Manuel Macaraeg to the
effect that petitioner borrowed P30,000.00 from him. Even then, Macaraeg stated in his affidavit that it was sometime in 1990
when John borrowed said amount from him. With the petitioner's own admission that the subject structure was constructed
only in 1992, or two years after he borrowed P30,000.00 from Macaraeg, it is even doubtful whether the amount he allegedly
borrowed from the latter went into the construction of the structure in dispute. More, it is noted that while petitioner was able
to present in evidence the Macaraeg affidavit, he failed to introduce similar affidavits, if any, of his close relatives from whom he
claimed to have made similar borrowings. For sure, not a single relative came forward to confirm petitioner's tale. In short, there
is a paucity of evidence, testimonial or documentary, to support petitioner's self-serving allegation that the annex structure
which housed the sari-sari store was put up thru his own funds and/or money borrowed by him. Sure, petitioner has in his favor
the tax declaration covering the subject structure. We have, however, ruled time and again that tax declarations do not prove
ownership but at best an indicia of claims of ownership. 5 Payment of taxes is not proof of ownership, any more than indicating
possession in the concept of an owner.6 Neither tax receipts nor declaration of ownership for taxation purposes are evidence of
ownership or of the right to possess realty when not supported by other effective proofs. 7

In this connection, Article 147 of the Family Code is instructive. It reads:

Art. 147. When a man and a woman who are capacitated to marry each other, live exclusively with each other as
husband and wife without the benefit of marriage or under a void marriage, their wages and salaries shall be owned by
them in equal shares and the property acquired by both of them through their work or industry shall be governed by
the rules on co-ownership.

In the absence of proof to the contrary, properties acquired while they lived together shall be presumed to have been
obtained by their joint efforts, work or industry, and shall be owned by them in equal shares. For purposes of this
Article, a party who did not participate in the acquisition by other party of any property shall be deemed to have
contributed jointly in the acquisition thereof if the former's efforts consisted in the care and maintenance of the family
and of the household.

The law is clear. In the absence, as here, of proofs to the contrary, any property acquired by common-law spouses during their
period of cohabitation is presumed to have been obtained thru their joint efforts and is owned by them in equal shares. Their
property relationship is governed by the rules on co-ownership. And under this regime, they owned their properties in common
"in equal shares." Being herself a co-owner of the structure in question, Juliet, as correctly ruled by the CA, may not be ejected
therefrom.

True it is that under Article 4878 of the Civil Code, a co-owner may bring an action for ejectment against a co-owner who takes
exclusive possession and asserts exclusive ownership of a common property. It bears stressing, however, that in this case,
evidence is totally wanting to establish John's or Juliet's exclusive ownership of the property in question. Neither did Juliet obtain
possession thereof by virtue of a contract, express or implied, or thru intimidation, threat, strategy or stealth. As borne by the
record, Juliet was in possession of the subject structure and the sari-sari store thereat by virtue of her being a co-owner thereof.
As such, she is as much entitled to enjoy its possession and ownership as John.

We, however, disagree with the ruling of the CA that the subject Memorandum of Agreement, being unsigned by Juliet and John,
has no binding effect between them.

It is a matter of record that pursuant to said Agreement, Juliet did pay John the amount of P232,397.66, as initial payment for
John's share in their common properties, with the balance of P196,472.34 payable in twelve monthly installments beginning
November 1995. It is also a matter of record that the Agreement was signed by the witnesses thereto. Hence, the irrelevant
circumstances that the Agreement was left unsigned by Juliet and John cannot adversely affect its binding force or effect
between them, as evidently, Juliet's initial payment of P232,397.66 to John was in fulfillment of what the parties had agreed
upon thereunder. However, and as correctly held by the CA, Juliet's failure to pay John the balance of the latter's share in their
common properties could at best give rise to an action for a sum of money against Juliet, or for rescission of the said agreement
and not for ejectment.

WHEREFORE, the petition is DENIED and the assailed CA Decision is AFFIRMED, except that portion thereof denying effect to the
parties' Memorandum of Agreement for being unsigned by both.

Costs against petitioner.

SO ORDERED.
 March 26, 2014

G.R. No. 189420

RAUL V. ARAMBULO AND TERESITA A. DELA CRUZ, Petitioners,

vs.
GENARO NOLASCO AND JEREMY SPENCER NOLASCO, Respondents.

DECISION

PEREZ, J.:

This is a Petition for Review of the 7 October 2008 Decision 1 and 30 July 2009 Resolution2 of the Court of Appeals in CA-G.R. CV
No. 76449, which reversed and set aside the Decision 3 of the Regional Trial Court (RTC) of Manila, Branch 51, dated 19
September 2002.

Petitioners Raul V. Arambulo and Teresita A. Dela Cruz, along with their mother Rosita Vda. De Arambulo, and siblings Primo V.
Arambulo, Ma. Lorenza A. Lopez, Ana Maria V. Arambulo, Maximiano V. Arambulo, Julio V. Arambulo and Iraida Arambulo
Nolasco (Iraida) are co-owners of two (2) parcels of land located in Tondo, Manila, with an aggregate size of 233 square meters.
When Iraida passed away, she was succeeded by her husband, respondent Genaro Nolasco and their children, Iris Abegail
Nolasco, Ingrid Aileen Arambulo and respondent Jeremy Spencer Nolasco.

On 8 January 1999, petitioners filed a petition for relief under Article 491 of the Civil Code with the RTC of Manila, alleging that
all of the co- owners, except for respondents, have authorized petitioners to sell their respective shares to the subject properties;
that only respondents are withholding their consent to the sale of their shares; that in case the sale pushes through, their
mother and siblings will get their respective 1/9 share of the proceeds of the sale, while respondents will get 1/4 share each of
the 1/9 share of Iraida; that the sale of subject properties constitutes alteration; and that under Article 491 of the Civil Code, if
one or more co-owners shall withhold their consent to the alterations in the thing owned in common, the courts may afford
adequate relief.4
In their Answer, respondents sought the dismissal of the petition for being premature. Respondents averred that they were not
aware of the intention of petitioners to sell the properties they co-owned because they were not called to participate in any
negotiations regarding the disposition of the property. 5

After the pre-trial, two (2) issues were submitted for consideration:

1.Whether or not respondents are withholding their consent in the sale of the subject properties; and

2.In the affirmative, whether or not withholding of consent of sale by the respondents is prejudicial to the petitioners. 6

On 19 September 2002, the trial court ruled in favor of petitioners and ordered respondents to give their consent to the sale. The
dispositive portion of the decision reads:

WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor of the petitioners and against the respondents:

1.Directing respondents Genaro Nolasco and Jeremy Spencer A. Nolasco to give their consent to the sale of their shares
on the subject properties;

2.Allowing the sale of the aforementioned properties;

3.Directing the petitioners and the co-owners, including the respondents herein to agree with the price in which the
subject properties are to be sold and to whom to be sold; and

4.Directing the distribution of the proceeds of the sale of the aforementioned properties in the following proportion:

a.) Rosita V. Vda. De Arambulo -1/9

b.) Primo V. Arambulo -1/9

c.) Maximiano V. Arambulo -1/9

d.) Ana Maria V. Arambulo -1/9

e.) Ma. Lorenza A. Lopez -1/9

f.) Julio V. Arambulo -1/9

g.) Raul V. Arambulo -1/9

h.) Teresita A. dela Cruz -1/9

i.) Genaro Nolasco, Jr. -1/4 of 1/9

j.) Jeremy Spencer A. Nolasco -1/4 of 1/9

k.) Iris Abegail A. Nolasco -1/4 of 1/9

l.) Ingrid Aileen Arambulo -1/4 of 1/97

Going along with petitioners’ reliance on Article 491 of the Civil Code, the trial court found that respondents’ withholding of their
consent to the sale of their shares is prejudicial to the common interest of the co-owners.

Respondents filed a Notice of Appeal and the trial court gave due course to the appeal and the entire records of the case were
elevated to the Court of Appeals.

In a Decision dated 7 October 2008, the Court of Appeals granted the appeal and reversed the trial court’s decision. The Court of
Appeals held that the respondents had the full ownership of their undivided interest in the subject properties, thus, they cannot
be compelled to sell their undivided shares in the properties. It referred to the provisions of Article 493 of the Civil Code.
However, the Court of Appeals, implying applicability of Article 491 also observed that petitioners failed to show how
respondents’ withholding of their consent would prejudice the common interest over the subject properties.

Hence, the instant petition seeking the reversal of the appellate court’s decision and praying for the affirmance of the trial court’s
decision that ordered respondents to give their consent to the sale of the subject properties. Petitioners emphasize that under
Article 491 of the Civil Code, they may ask the court to afford them adequate relief should respondents refuse to sell their
respective shares to the co-owned properties. They refute the appellate court’s finding that they failed to show how the
withholding of consent by respondents becomes prejudicial to their common interest. Citing the testimony of petitioner Teresita
A. Dela Cruz, they assert that one of the two subject properties has an area of 122 square meters and if they decide to partition,
instead of selling the same, their share would be reduced to a measly 30-square meter lot each. The other property was testified
to as measuring only 111 square meters. Petitioners reiterate that all the other co- owners are willing to sell the property and
give respondents their share of the proceeds of the sale.

At the core of this petition is whether respondents, as co-owners, can be compelled by the court to give their consent to the sale
of their shares in the co-owned properties. Until it reached this Court, the discussion of the issue moved around Article 491 of
the Civil Code. We have to remove the issue out of the coverage of Article 491. It does not apply to the problem arising out of
the proposed sale of the property co-owned by the parties in this case.

The Court of Appeals correctly applied the provision of Article 493 of the Civil Code, which states:

Art. 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may
therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are
involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which
may be allotted to him in the division upon the termination of the co-ownership.

Upon the other hand, Article 491 states:

Art. 491. None of the co-owners shall, without the consent of the others, make alterations in the thing owned in common, even
though benefits for all would result therefrom. However, if the withholding of the consent by one or more of the co-owners is
clearly prejudicial to the common interest, the courts may afford adequate relief.

As intimated above, the erroneous application of Article 491 is, in this case, an innate infirmity. The very initiatory pleading
below was captioned Petition For Relief Under Article 491 of the New Civil Code. Petitioners, likewise petitioners before the RTC,
filed the case on the submission that Article 491 covers the petition and grants the relief prayed for, which is to compel the
respondent co-owners to agree to the sale of the co-owned property. The trial court took up all that petitioners tendered, and it
favored the pleading with the finding that:

x x x To this court, the act of respondents of withholding consent to the sale of the properties is not only prejudicial to the
common interest of the co-owners but is also considered as an alteration within the purview of Article 491 of the New Civil Code.
x x x. Hence, it is deemed just and proper to afford adequate relief to herein petitioners under Article 491 of the New Civil Code. 8

That a sale constitutes an alteration as mentioned in Article 491 is an established jurisprudence.1âwphi1 It is settled that
alterations include any act of strict dominion or ownership and any encumbrance or disposition has been held implicitly to be an
act of alteration.9 Alienation of the thing by sale of the property is an act of strict dominion. 10However, the ruling that alienation
is alteration does not mean that a sale of commonly owned real property is covered by the second paragraph of Article 491, such
that if a co- owner withholds consent to the sale, the courts, upon a showing of a clear prejudice to the common interest, may,
as adequate relief, order the grant of the withheld consent. Such is the conclusion drawn by the trial court, and hinted at, if not
relied upon, by the appellate court.

Ruling that the trial court erred in its conclusion, the Court of Appeals correctly relied on Article 493 in support of the finding
that respondents cannot be compelled to agree with the sale. We affirm the reversal by the Court of Appeals of the judgment of
the trial court.

1. There is co-ownership whenever, as in this case, the ownership of an undivided thing, belongs to different persons. 11 Article
493 of the Code defines the ownership of the co-owner, clearly establishing that each co-owner shall have full ownership of his
part and of its fruits and benefits.

Pertinent to this case, Article 493 dictates that each one of the parties herein as co-owners with full ownership of their parts can
sell their fully owned part. The sale by the petitioners of their parts shall not affect the full ownership by the respondents of the
part that belongs to them. Their part which petitioners will sell shall be that which may be apportioned to them in the division
upon the termination of the co-ownership. With the full ownership of the respondents remaining unaffected by petitioners’ sale
of their parts, the nature of the property, as co-owned, likewise stays. In lieu of the petitioners, their vendees shall be co-owners
with the respondents. The text of Article 493 says so.

2. Our reading of Article 493 as applied to the facts of this case is a reiteration of what was pronounced in Bailon-Casilao v. Court
of Appeals.12 The rights of a co-owner of a certain property are clearly specified in Article 493 of the Civil Code. Thus:

Art. 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may
therefore alienate, assign or mortgage it[,] and even substitute another person in its enjoyment, except when personal rights are
involved. But the effect of the alienation or [the] mortgage, with respect to the co-owners, shall be limited to the portion which
may be allotted to him in the division upon the termination of the co-ownership.

As early as 1923, this Court has ruled that even if a co-owner sells the whole property as his, the sale will affect only his own
share but not those of the other co-owners who did not consent to the sale. 13 This is because under the aforementioned codal
provision, the sale or other disposition affects only his undivided share and the transferee gets only what would correspond to
his grantor in the partition of the thing owned in common. 14 Consequently, by virtue of the sales made by Rosalia and Gaudencio
Bailon which are valid with respect to their proportionate shares, and the subsequent transfers which culminated in the sale to
private respondent Celestino Afable, the said Afable thereby became a co- owner of the disputed parcel of land as correctly held
by the lower court since the sales produced the effect of substituting the buyers in the enjoyment thereof. 15

From the foregoing, it may be deduced that since a co-owner is entitled to sell his undivided share, a sale of the entire property
by one co- owner without the consent of the other co-owners is not null and void. However, only the rights of the co-owner-
seller are transferred, thereby making the buyer a co-owner of the property. 16 (Italics theirs).

Nearer to the dispute at hand are the pronouncements in the 1944 case of Lopez v. Vda. De Cuaycong. 17 Citing Manresa on
Article 399 which is the present Article 493 of the Civil Code, the Court said:

x x x Article 399 shows the essential integrity of the right of each co-owner in the mental portion which belongs to him in the
ownership or community.

xxxx

To be a co-owner of a property does not mean that one is deprived of every recognition of the disposal of the thing, of the free
use of his right within the circumstantial conditions of such judicial status, nor is it necessary, for the use and enjoyment, or the
right of free disposal, that the previous consent of all the interested parties be obtained. 18(Underscoring supplied).

The Court in Lopez further cited Scaevola:

2nd. Absolute right of each co-owner with respect to his part or share. – With respect to the latter, each co-owner is the same as
an individual owner. He is a singular owner, with all the rights inherent in such condition. The share of the co-owner, that is, the
part which ideally belongs to him in the common thing or right and is represented by a certain quantity, is his and he may
dispose of the same as he pleases, because it does not affect the right of the others. Such quantity is equivalent to a credit
against the common thing or right and is the private property of each creditor (co-owner). The various shares ideally signify as
many units of thing or right, pertaining individually to the different owners; in other words, a unit for each
owner.19 (Underscoring supplied).

The ultimate authorities in civil law, recognized as such by the Court, agree that co-owners such as respondents have over their
part, the right of full and absolute ownership. Such right is the same as that of individual owners which is not diminished by the
fact that the entire property is co- owned with others. That part which ideally belongs to them, or their mental portion, may be
disposed of as they please, independent of the decision of their co-owners. So we rule in this case. The respondents cannot be
ordered to sell their portion of the co-owned properties. In the language of Rodriguez v. Court of First Instance of Rizal, 20 "each
party is the sole judge of what is good for him."21

3. Indeed, the respected commentaries suggest the conclusion that, insofar as the sale of co-owned properties is concerned,
there is no common interest that may be prejudiced should one or more of the co-owners refuse to sell the co-owned property,
which is exactly the factual situation in this case. When respondents disagreed to the sale, they merely asserted their individual
ownership rights. Without unanimity, there is no common interest.

Petitioners who project themselves as prejudiced co-owners may bring a suit for partition, which is one of the modes of
extinguishing co- ownership. Article 494 of the Civil Code provides that no co-owner shall be obliged to remain in the co-
ownership, and that each co-owner may demand at any time partition of the thing owned in common insofar as his share is
concerned. Corollary to this rule, Article 498 of the Civil Code states that whenever the thing is essentially indivisible and the co-
owners cannot agree that it be allotted to one of them who shall indemnify the others, it shall be sold and its proceeds
accordingly distributed. This is resorted to (a) when the right to partition the property is invoked by any of the co-owners but
because of the nature of the property, it cannot be subdivided or its subdivision would prejudice the interests of the co-owners,
and (b) the co- owners are not in agreement as to who among them shall be allotted or assigned the entire property upon proper
reimbursement of the co-owners.22 This is the result obviously aimed at by petitioners at the outset. As already shown, this
cannot be done while the co-ownership exists.

Essentially, a partition proceeding accords all parties the opportunity to be heard, the denial of which was raised as a defense by
respondents for opposing the sale of the subject properties.

The necessity of partition could not be more emphasized than in

Rodriguez v. Court of First Instance of Rizal,23 to wit:

x x x That this recourse would entail considerable time, trouble and expense, unwarranted by the value of the property from the
standpoint of the [respondents], is no legal justification for the apportionment of the property not agreeable to any of the co-
owners. Disagreements and differences impossible of adjustment by the parties themselves are bound to arise, and it is precisely
with such contingency in view that the law on partition was evolved. 24

WHEREFORE, based on the foregoing, the petition is DENIED without prejudice to the filing of an action for partition. The
Decision of the Court of Appeals in CA-G.R. CV No. 76449 is AFFIRMED.

SO ORDERED.
G.R. No. L-32047 November 1, 1930

MANUEL MELENCIO, MARIANO MELENCIO, PURA MELENCIO, and CARIDAD MELENCIO, plaintiffs-appellants,
vs.
DY TIAO LAY, defendant-appellee.

Jose V. Valladolid, Jose P. Melencio and Camus and Delgado for appellants.
Araneta and Zaragoza for appellee.

OSTRAND, J.:

On August 1,1927, the plaintiffs, Manuel, Mariano, Pura and Caridad Melencio, brought the present action against the
defendant-appellee, Dy Tiao Lay for the recovery of the possession of a parcel of land situated in the town of Cabanatuan, Nueva
Ecija, and containing an area of 4,628.25 square meters. The plaintiffs further demand a monthly rental of P300 for the use and
occupation of the parcel from May, 1926, until the date of the surrender to them of the possession thereof; and that if it is found
that the said appellee was occupying the said parcel of land by virtue of a contract of lease, such contract should be declared null
and void for lack of consent, concurrence, and ratification by the owners thereof.

In his answer, the defendant pleaded the general issue, and as special defenses, he alleged in substance that he was occupying
the said tract of land by virtue of a contract of lease executed on July 24,1905, in favor of his predecessor in interest, by Ruperta
Garcia, Pedro Melencio, Juliana Melencio, and Ruperta Melencio under the terms specified therein, and which contract is still in
force; that Liberata Macapagal, the mother of the plaintiffs, in her capacity as judicial administratrix of the estate of Ramon
Melencio, one of the original coowners of the parcel of land in question, actually recognized and ratified the existence and
validity of the contract aforesaid by virtue of the execution of a public document by her on or about November 27,1920, and by
collecting from the assignees of the original lessee the monthly rent for the premises until April 30, 1926; and that said
defendant deposits with the clerk of court the sum of P20.20 every month as rent thereof and that as a counterclaim, he seeks
the recovery of P272 for goods and money delivered by him to the plaintiffs.

The plaintiffs filed a reply to the answer alleging, among other things, that Ruperta Garcia was not one of the coowners of the
land in question; that the person who signed the alleged contract of lease never represented themselves as being the sole and
exclusive owners of the land subject to the lease as alleged by the defendant in his answer; that the said contract of lease of July
24,1905, is null and void for being executed without the intervention and consent of two coowners, Ramon Melencio and Jose P.
Melencio, and without the marital consent of the husbands of Juliana and Ruperta Melencio; that the lessee has repeatedly
violated the terms and conditions of the said contract; and that Liberata Macapagal, in her capacity as administratrix of the
property of her deceased husband, could not lawfully and legally execute a contract of lease with the conditions and terms
similar to that of the one under consideration, and that from this it follows that she could not ratify the said lease as claimed by
the defendant.

On January 21,1928, Liberata Macapagal Viuda de Melencio, duly appointed and qualified as administratrix of the estate of her
deceased husband, Ramon Melencio, filed a petition praying to be allowed to join the plaintiffs as party to the present case,
which petition was granted in open court on January 31,1928. Her amended complaint of intervention of February 14,1928,
contains allegations similar to those alleged in the complaint of the original plaintiffs, and she further alleges that the defendant-
appellee has occupied the land in question ever since November, 1920, under and by virtue of a verbal contract of lease for a
term from month to month. To this complaint of intervention, the defendant-appellee filed an answer reproducing the
allegations contained in his answer reproducing the allegations contained in his answer to the complaint of the original plaintiffs
and setting up prescription as a further special defense.

It appears from the evidence that the land in question was originally owned by one Julian Melencio. He died prior to the year
1905 leaving his widow, Ruperta Garcia, and his five children, Juliana, Ramon, Ruperta, Pedro R., and Emilio Melencio. Emilio
Melencio also died before 1905, his son Jose P. Melencio, then a minor, succeeding to his interest in the said parcel of land by
representation. A question has been raised as to whether the land was community property of the marriage of Julian Melencio
and Ruperta Garcia, but the evidence is practically undisputed that Ruperta Garcia in reality held nothing but a widow's usufruct
in the land.

On July 24,1905, Ruperta Garcia, Pedro R. Melencio, Juliana Melencio, and Ruperta Melencio executed a contract of lease of the
land in favor of one Yap Kui Chin, but neither Jose P. Melencio nor Ramon Melencio were mentioned in the lease. The term of the
lease was for twenty years, extendible for a like period at the option of the lessee. The purpose of the lessee was to establish a
rice mill on the land, with the necessary buildings for warehouses and for quarters for the employees, and it was further
stipulated that at the termination of the original period of the lease, or the extension therof, the lessors might purchase all the
buildings and improvements on the land at a price to be fixed by experts appointed by the parties, but that if the lessors should
fail to take advantage of that privilege, the lease would continue for another and further period of twenty years. The document
was duly acknowledged but was never recorded with the register of deeds. The original rent agreed upon was P25 per month,
but by reason of the construction of a street through the land, the monthly rent was reduced of P20.20.

Shortly after the execution of the lease, the lessee took possession of the parcel in question and erected the mill as well as the
necessary buildings, and it appears that in matters pertaining to the lease, he dealt with Pedro R. Melencio, who from 1905 until
his death in 1920, acted as manager of the property held in common by the heirs of Julian Melencio and Ruperta Garcia. The
original lessee, Yap Kui Chin, died in 1912, and the lease, as well as the other property, was transferred to Uy Eng Jui who again
transferred it to Uy Eng Jui & Co., an unregistered partnership. Finally the lease came into the hands of Dy Tiao Lay, the herein
defendant-appellee.

Ramon Melencio died in 1914, and his widow, Liberata Macapagal, was appointed administratrix of his estate. In 1913 the land
which includes the parcel in question was registered under the Torrens system. The lease was not mentioned in the certificate of
title, but it was stated that one house and three warehouses on the land were the property of Yap Kui Chin.

In 1920 the heirs of Julian Melencio made an extrajudicial partition of parts of the inheritance, and among other things, the land
here in question fell to the share of the children of Ramon Melencio, who are the original plaintiffs in the present case. Their
mother, Liberata Macapagal, as administratrix of the estate of her deceased husband, Ramon, collected the rent for the lease at
the rate of P20.20 per month until the month of May,1926, when she demanded of the lessee that the rent should be increased
to P300 per month, and she was then informed by the defendant that a written lease existed and that according to the terms
thereof, the defendant was entitled to an extension of the lease at the original rental. The plaintiffs insisted that they never had
any knowledge of the existence of such a contract of lease and maintained that in such case the lease was executed without their
consent and was void. It may be noted that upon careful search, a copy of the contract of lease was found among the papers of
the deceased Pedro R, Melencio. Thereafter the present action was brought to set aside the lease and to recover possession of
the land. Upon trial, the court below rendered judgment in favor of the defendant declaring the lease valid and ordering the
plaintiffs to pay the P272 demanded by the defendant in his counterclaim. From this judgment the plaintiffs appealed.

The contention of the appellants is that the aforesaid contract of lease (Exhibit C) is null and void for the following reasons:

1. That Exhibit C calls for an alteration of the property in question and therefore ought to have been signed by all the
coowners as by law required in the premises.

2. That the validity and fulfillment of the said agreement of lease were made to depend upon the will of the lessee
exclusively.

3. That the said contract of lease being for a term of over six years, the same is null and void pursuant to the provision of
article 1548 of the Civil Code.

4. That the duration of the same is unreasonably long, thus being against public policy.

5. That the defendant-appellee and his predecessors in interest repeatedly violated the provisions of the agreement.

The first proposition is based on article 397 of the Civil Code which provides that "none of the owners shall, without the consent
of the others, make any alterations in the common property even though such alterations might be advantageous to all." We do
not think that the alterations are of sufficient importance to nullify the lease, especially so since none of the coowners objected
to such alterations until over twenty years after the execution of the contract of lease. The decision of this court in the case of
Enriquez vs. A. S. Watson and Co. (22 Phil., 623), contains a full discussion of the effect of alterations of leased community
property, and no further discussion upon the point need here be considered.
The second proposition is likewise of little merit. Under the circumstances, the provision in the contract that the lessee, at any
time before he erected any building on the land, might rescind the lease, can hardly be regarded as a violation of article 1256 of
the Civil Code.

The third and fourth proposition are, in our opinion, determinative of the controversy. The court below based its decision
principally on the case of Enriquez vs. A.S. Watson & Co. (22 Phil., 623), and on the resolution of the Direccion General de
los Registros dated April 26,1907. (Jurisprudencia Civil, vol.107, p. 222.) An examination of the Enriquez case will show that it
differs materially from the present. In that case all of the coowners of a lot and building executed a contract of lease of the
property for the term of eighteen years in favor of A. S. Watson & Co.; one of the owners was minor, but he was represented by
his legally appointed guardian, and the action of the latter in signing the lease on behalf of the minor was formally approved by
the Court of First Instance. In the present case only a small majority of the coowners executed the lease here in question, and
according to the terms of the contract the lease might be given a duration of sixty years; that is widely different from a lease
granted by all of the coowners for a term of only eighteen years.

The resolution of April 26,1907, is more in point. It relates to the inscription or registration of a contract of lease of some pasture
grounds. The majority of the coowners of the property executed the lease for the term of twelve years but when the lessees
presented the lease for inscription in the registry of property, the registrar denied the inscription on the ground that the term of
the lease exceeded six years and that therefore the majority of the coowners lacked authority to grant the lease. The Direccion
General de los Registros held that the contract of lease for a period exceeding six years, constitutes a real right subject to registry
and that the lease in question was valid.

The conclusions reached by the Direccion General led to considerable criticism and have been overruled by a decision of the
Supreme Court of Spain dated June 1,1909. In that decision the court made the following statement of the case (translation):

The joint owners of 511 out of 1,000 parts of the realty denominated El Mortero, leased out the whole property for
twelve years to Doña Josefa de la Rosa; whereupon the Count and Countess Trespalacios together with other coowners
brought this suit to annul the lease and, in view of the fact that the land was indivisible, prayed for its sale by public
auction and the distribution of the price so obtained; they alleged that they neither took part nor consented to the
lease; that the decision of the majority of part owners referred to in article 398 of the Code, implies a common
deliberation on the step to be taken , for to do without it, would, even more than to do without the minority, be nothing
less than plunder; and that, even if this deliberation were not absolutely necessary, the power of the majority would still
be confined to decisions touching the management and enjoyment of the common property, and would not include acts
of ownership, such as a lease for twelve years, which according to the Mortgage Law gives rise to a real right, which
must be recorded, and which can be performed only by the owners of the property leased.

The part owners who had executed the contract prayed in reconvention that it held valid for all the owners in common,
and if this could not be, then for all those who had signed it, and for the rest, for the period of six years; and
the Audiencia of Caceres having rendered judgment holding the contract null and void, and ordering the sale of the
realty and the distribution of the price, the defendants appealed alleging under the third and fourth assignments of
error, that the judgment was a violation of article 398 of the Civil Code, which is absolute and sets no limit of time for
the efficacy of the decisions arrived at by the majority of the part owners for the enjoyment of the common property,
citing the decisions of June 30th, 1897, of July 8th,1902, and of October 30th, 1907; under the fifth assignments of error
the appellants contended that in including joint owners among those referred to in said article, which sets certain limits
to the power of leasing, in the course of the management of another's property, the court applied article 1548 unduly;
and by the seventh assignments of error, they maintained the judgment appealed from also violated article 1727,
providing that the principal is not bound where his agent has acted beyond his authority; whence it may be inferred that
if in order to hold the contract null and void, the majority of the part owners are looked upon as managers or agents
exercising limited powers, it must at least be conceded that in so far as the act in question lies within the scope of their
powers, it is valid; the contract cannot be annulled in toto.

The Supreme Court held that the appeal from the decision of the Audiencia of Caceres was not well taken and expressed the
following consideranda:

Considering that, although as a rule the contract of lease constitutes an act of management, as this court has several
times held, cases may yet arise, either owing to the nature of the subject matter, or to the period of duration, which
may render it imperative to record the contract in the registry of property, in pursuance of the Mortgage Law, where the
contract of lease may give rise to a real right in favor of the lessee, and it would then constitute such a sundering of the
ownership as transcends mere management; in such cases it must of necessity be recognized that the part owners
representing the greater portion of the property held in common have no power to lease said property for a longer
period than six years without the consent of all the coowners, whose propriety rights, expressly recognized by the law,
would by contracts of long duration be restricted or annulled; and as under article 1548 of the Civil Code such contracts
cannot be entered into by the husband with respect to his wife's property, by the parent or guardian with respect to
 that of the child or ward, and by the manager in default of special power, since the contract of lease only produces
personal obligations, and cannot without the consent of all persons interested or express authority from the owner, be
extended to include stipulations which may alter its character, changing it into a contract of partial alienation of the
property leased;

Considering that, applying this doctrine to the case before us, one of the grounds upon which the judgment appealed
from, denying the validity of the lease made by the majority of the part owners of the pasture land El Mortero is based,
must be upheld; to wit, that the period of duration is twelve years and the consent of all the coowners has not been
obtained; hence, the third, fourth. and fifth assignments of error are without merit; firstly, because article 398 of the
Civil Code, alleged to have been violated, refers to acts decided upon by the majority of the part owners, touching the
management and enjoyment of the common property, and does not contradict what we have stated in the foregoing
paragraph; secondly because although the cases cited were such as arose upon leases for more than six years, yet this
point was not raised on appeal, and could not therefore be passed upon; and thirdly, because it cannot be denied that
there is an analogy between a manager without special authority, who is forbidden by article 1548 of the Code to give a
lease for a period of over six years, and the joint owners constituting a legal majority, who may decide to lease out the
indivisible property, with respect to the shares of the other coowners; and having come to the conclusion that the
contract is null and void, there is no need to discuss the first two assignments of error which refer to another of the
bases adopted, however erroneously, by the trial court;

Considering that the sixth assignment of error is without merit, inasmuch as the joint ownership of property is not a
sort of agency and cannot be governed by the provisions relating to the latter contract; whence, article 1727 of the
Code alleged to have been violated, can no more be applied, than, the question of the validity or nullity of the lease
being raise, upon the contract as celebrated, it would be allowable to modify a posteriorisome one or other of the main
conditions stipulated, like that regarding the duration of the lease, for this would amount to a novation; still less
allowable would it be to authorize diverse periods for the different persons unequally interested in the fulfillment.

Taking into consideration articles 398,1548, and 1713 of the Civil Code and following the aforesaid decision of June 1,1909, we
hold that the contract of lease here in question is null and void.

It has been suggested that by reason of prescription and by acceptance of benefits under the lease, the plaintiffs are estopped to
question the authority for making the lease.To this we may answer that the burden of proof of prescription devolved upon the
defendant and that as far as we can find, there is no proof that Ramon Melencio and his successors ever had knowledge of the
existence of the lease in question prior to 1926. We cannot by mere suspicion conclude that they were informed of the existence
of the document and its terms; it must be remembered that under a strict interpretation of the terms of the lease, the lessees
could remain indefinitely in their tenancy unless the lessors could purchase the mill and the buildings on the land. In such
circumstances, better evidence than that presented by the defendant in regard to the plaintiff's knowledge of the lease must be
required.

The fact that Ramon during his lifetime received his share of the products of land owned in common with his coheirs is not
sufficient proof of knowledge of the existence of the contract of lease when it is considered that the land in question was only a
small portion of a large tract which Pedro R. Melencio was administering in connection with other community property.

The appealed judgment as to the validity of the lease is therefore reversed, and it is ordered that the possession of the land in
controversy be delivered to the intervenor Liberata Macapagal in her capacity as administratrix of the estate of the deceased
Ramon Melencio. It is further ordered that the defendant pay to said administratrix a monthly rent of P50 for the occupation of
the land from May 1st, 1926, until the land is delivered to the administratrix. The sum of P272 demanded by the defendant in his
counterclaim may be deducted from the total amount of the rent due and unpaid. The building erected on the land by the
defendant and his predecessors in interest may be removed by him, or otherwise disposed of, within six months from the
promulgation of this decision. Without costs. So ordered.

Avanceña, C.J., , Malcolm, Johns, Romualdez, and Villa-Real, JJ., concur.

G.R. No. 191090 October 13, 2014

EXTRAORDINARY DEVELOPMENT CORPORATION, Petitioner,

vs.
HERMINIA F. SAMSON-BICO and ELY B. FLESTADO, Respondents.

DECISION

PEREZ, J.:

This treats of the petition for review filed by Extraordinary Development Corporation (EDC) assailing the 31 July 2009
Decision1 and 22 January 2010 Resolution2 of the Court of Appeals 10th Division in CAG.R. CV. No. 91358, which affirmed with
modification the Decision3 of the Regional Trial Court (RTC) of Binangonan, Rizal, Branch 68 in Civil Case No. 03-035, a "Complaint
for Annulment of Contract and Tax Declaration No. OO-BI-030-3512 and Reconveyance of Possession with Damages."

As borne by the records, the facts are as follow:

Apolonio Ballesteros (Apolonio) and Maria Membrebe (Maria) were husband and wife. They begot two (2) children, namely, Juan
M. Ballesteros (Juan), who married Leonarda Tambongco (Leonarda) and Irenea Ballesteros (Irenea), who married Santiago
Samson (Santiago). Juan and Leonarda begot six (6) children, namely, Leonardo T. Ballesteros (Leonardo), Marcelina T.
Ballesteros-Abad (Marcelina), Lydia T. Ballesteros-De Lara (Lydia), Cresencia T. Ballesteros-Lirio (Cresencia), Lourdes T. Ballesteros-
Tan (Lourdes), and Juan T. Ballesteros, Jr. (Juan Jr.), while Irenea and Santiago begot two (2) children, namely, Herminia B.
Samson-Bico (Herminia) and Merlita Samson Flestado, who married Ely D. Flestado (Ely).

During his lifetime, Apolonio owned a parcel of land consisting of 29,748 square meters situated at BarangayPantok, Binangonan,
Rizal covered by Tax Declaration No. BI-030-1509. When Apolonio and Maria died, the property was inherited by Juanand Irenea.
When the latter died, the heirs of Juan and Irenea became co-owners of the property.

On 16 April 2002, the heirs of Juan, without the consent of respondents, the heirs of Irenea executed in favor of petitioner EDC a
Deed of Absolute Sale4 covering the subject property for ₱2,974,800.00. Prior to the sale, respondents claimed that they learned
that the property had been the subject of a contract to sell between the heirs of Juan and EDC. On 7 March 2000, respondents
wrote to EDC informing it of the existence of coownership over the subject property. 5 EDC wrote back that it will look into the
matter and asked respondents to further establish the basis of their claims. 6

EDC was able to cause the registration of the Deed of Absolute Sale with the Office of the Provincial Assessor Rizal and transfer
the tax declaration over the subject propertyin its name. This prompted respondents to file the Complaint for Annulment of
Contract and Tax Declaration No. 00-BI-030-3512 and Reconveyance of Possession with Damages. 7

In its Answer, EDC alleged thatit is a buyer in good faith and for value of the subject property because it was of the honest belief
that the heirs of Juan are the only heirs of the late Apolonio. EDC counterclaimed for damages. 8

On the other hand, the heirs of Juan asserted that respondents were aware of and were parties to the contract to sell entered
into by them and EDC. The heirs of Juan claimed that respondents received their share in the downpayment made by EDC but
they were both unpaid of the balance on the cost of the land. 9

After presentation of respondents’ testimonial and documentary evidence, the case was called for hearing on 25 April 2007. The
case for the presentation of defendants’ evidence was reset by the trial court to 25 June 2007 for failure of their respective
lawyers to appear without any explanation.10 On 25 June 2007, the case was once again reset for the same reason. 11 On 13
August 2007, Juan appeared and informed the court that his lawyer is sick while a certain Reggie Angulo appeared before the
court and manifested that EDC has not yet hired a lawyer. The trial court reset the case to 3 October 2007 and required the
parties to secure a new lawyer. The trial court warned the defendants, petitioner here, and the heirs of Juan that if they fail to do
so, their right to present evidence would be waived.12 On 5 November 2007, the lawyer of the heirs of Juan still failed to appear,
while the counsel of the plaintiffs sent a representative to move for the resetting of the case. 13 Finally, on 5 December 2007, the
counsel of the heirs of Juan once again failed to appear so upon motion of respondent’s counsel, the case was submitted for
resolution.14

On 3 January 2008, the RTC ruled in favor of respondents. The dispositive portion of the Decision reads:

WHEREFORE, judgment is rendered as follows:

1. The Deed of Absolute Sale dated April 16, 2002 covering a property consisting of 29,748 square meters covered by
Tax Declaration No. BI-030-1509 is hereby declared null and void to the extent of one half of the property sold or 14,874
square meters.

2. That the Tax Declaration No. 00-BI-030-3512 in the name of [EDC] is hereby declared null and void and the Provincial
Assessor of Rizal or defendant Municipal Assessor of Binangonan, Rizal is hereby ordered to cancel the same, and the
Tax Declration covering the subject parcel of land be reinstated in the name of the heirs of Apolonio Ballesteros and
Maria Membrebe.

3. That the [EDC] is hereby ordered to vacate, surrender or reconvey ownership and possession of the parcel of land
subject of the Deed of Absolute Sale to [respondents] or the heirs of Apolonio Ballesteros or that they be reinstated to
the lawful ownership of one-half (1/2) of the property sold or 14,874 square meters.

4. The defendants are hereby ordered to pay the following damages to the [respondents] jointly and severally:

a. Moral damages – ₱100,000.00

b. Exemplary damages – [P]100,000.00

 c. Attorney’s fees – [P]100,000.00

5. The defendants are hereby ordered to pay the costs of suit. 15

The trial court found that respondents and the heirs of Juan are coowners of the subject property; that at the time of sale, the
heirs of Juan did not have the right to sell the one half share of the heirs of Irenea; that the sale did not bind the heirs of Irenea;
that there was fraud in the execution of the Deed of Absolute Salewhen the heirs of Juan failed to disclose to EDC that one half
of the property sold is owned by respondents; and that EDC was not a buyer in good faith because itknew that respondents were
coowners of the subject property because Herminia informed EDC of such fact through a letter dated 9 March 2000.

EDC appealed to the Court of Appeals and assigned the following errors:

I.

THE TRIAL COURT COMMITTEDGRAVE ERROR WHEN IT RENDERED A DECISION HOLDING APPELLEES THE LAWFUL OWNER OF
ONE-HALF OF THE SUBJECT PROPERTY

II.

THE TRIAL COURT COMMITTEDGRAVE ERROR WHEN IT ANNULLED THE 16 APRIL 2002 DEED OF ABSOLUTE SALE AND
INVALIDATED THE TITLE OF THE APPELLANT CORPORATION TO THE SUBJECT PROPERTY DESPITE THE COMPLETE ABSENCE OF
ANY EVIDENCE TO SUPPORT THE APPELLEES’ CLAIM OF OWNERSHIP OVER ONE-HALF OF THE SUBJECT PROPERTY.

III.

THE TRIAL COURT COMMITTEDGRAVE ERROR WHEN IT AWARDED MORAL AND EXEMPLARY DAMAGES AND ATTORNEY’S FEES
AND LITIGATION EXPENSES IN FAVOR OF THE APPELLEES DESPITE THE UTTER ABSENCE OF EVIDENCE WHICH CAN PROVE THEY
ARE ENTITLED TO THE SAME.

IV.

THE TRIAL COURT COMMITTED GRAVE ERROR AND VIOLATED THE RIGHT TO DUE PROCESS OF THE DEFENDANT CORPORATION
WHEN IT SUBMITTED THE CASE FOR

RESOLUTION WITHOUT PROVIDING THE APPELLANT THE OPPORTUNITY TO PRESENT EVIDENCE IN SUPPORT OF ITS CLAIMS AND
DEFENSES.16

The heirs of Juan and respondents failed to file their brief so the Court of Appeals submitted the case for resolution.

On 31 July 2009, the Court of Appeals partially granted the appeal. The dispositive portion of the Decision reads:

WHEREFORE, premises considered, appeal is PARTLY GRANTED. The Decision dated 03 January 2008 of the Regional Trial Court of
Binangonan, Rizal, Branch 68 in Civil Case No. 03-035 is AFFIRMEDwith the following MODIFICATIONS:

1. Defendants-appellants Leonardo T. Ballesteros, Marcelina T. Ballesteros-Abad, Lydia T. Ballesteros-De Lara, Cresencia

T. Ballesteros-Lirio, Lourdes T. Ballesteros-Tan and Juan T. Ballesteros, Jr. are hereby ORDERED to return to defendant-
appellant Extraordinary Development Corporation the amount of ₱1,487,400.00 or one-half of the purchase price as
stated in the Deed of Absolute Sale dated 16 April 2002;

2. The Deed of Absolute Sale in favor of the [EDC] is valid only to the extent of one-half of the subject property or
14,874 square meters, but not as to the other half of 14,874 square meters which is co-owned by [respondents];

3. The Provincial Assessor of Rizal is hereby ORDEREDto CANCELTax Declaration No. 00-BI-030-3512 in the name of
[EDC] and to ISSUE a new one in the names of co-owners [EDC] (one-half of the subject property) and [respondents]
(the other half); and

4. The award of moral damages, exemplary damages, and attorney’s fees in the amount of ₱100,000.00 each is hereby
DELETED.

No pronouncement as to costs.17
The Court of Appeals ruled that respondents were able to establish their co-ownership over one-half of the subject property. The
appellate court pointed out that the heirs of Juan categorically admitted in their Answer, as well as during the hearing the
existence of co-ownership. The appellate court agreed with the trial court’s finding that the heirs of Juan, as co-owners, could
only alienate or convey to EDC their one-half portion of the subject property which may be allotted to them in the division upon
the termination of the co-ownership. Thus, the sale will affect only their share but not those of the other co-owners who did not
consent to the sale. The appellate court disputed the submissionof EDC that whatever admissions made by the heirs of Juan
regarding the ownership of the subject property is effective only insofar as they are concerned but such do not bind or affect the
defenses it raised. The appellate court declared that the execution by the heirs of Juan of the Deed of Absolute Sale over the
subject property which they do not exclusively own but is admittedly co-owned bythem together with respondents, was valid
only to the extent of the former’s undivided onehalf share thereof, as they had no title or interest to transfer the other one half
portion which pertains to the appellees without the latter’s consent. EDC’s invocation of it being a buyer in good faith was not
considered by the appellate court because the subject property is an unregistered land and the defense of having purchased the
property in good faith may be availed of only where registered land is involved and the buyer had relied in good faith on the clear
title of the registered owner. The appellate court sustained the trial court’s finding that there was no denial of due process as
EDC was given the opportunity to advocate its cause and defend its interest.

However, the appellate court reversed the ruling of the trial court that the Deed of Absolute Sale is null and void. According to
the appellate court, the same is valid with respect to the transfer of the rights of the co-owners sellers heirs of Juan over the one-
half portion or 14,874 square meters of the subject property, thereby making EDC a co-owner thereof. Consequently, the
appellate court ordered the heirs of Ballesteros to return to EDC the amount of ₱1,487,400.00 or one-half of the purchase price
of ₱2,974,800.00. The award of moral and exemplary damages,as well as attorney’s fees, were deleted for lack of legal and
factual bases.

Aggrieved, EDC filed this present petition, ascribing the following errors to the Court of Appeals:

43.1 The Court of Appeals committed grave error in ruling that the Respondents are entitled to ½ of the Subject Property despite
their utter failure to present evidence which can prove their claim thereto.

43.2 The Court of Appeals gravely erred in failing to recognize that Petitioner is an innocent party to the instant dispute and is a
buyer in good faith and for value.18

Interestingly, it was EDC who pursued this petition and insist that respondents failed to prove co-ownership presumably to
validate in its entirety the Deed of Absolute Sale it entered into with the heirs of Juan. EDC reiterates its argument that the
testimony of Herminia is insufficient to prove that respondents are entitled to inherit one-half of the subject property from
Apolonio. According to EDC, respondents should have established that Irenea is a legitimate child of Apolonio; that Irenea and
Juan are the only legitimate compulsory heirs of Apolonio; that Apolonio predeceased Irenea and Juan; that Hermina and Merlita
are the legitimate children of Irenea; and that Irenea predeceased Herminia. EDC also maintains that it is a buyer in good faith
and that it was respondents who acted in bad faith, thus it prays for damages.

We deny the petition.

As borne by the records, respondents were able to convincingly establish their co-ownership over one-half of the subject
property.

Herminia has successfully established her successional rights over the subject property through her clear testimony and admitted
by the opposing counsel, viz:

DIRECT EXAMINATION BY ATTY. ROGELIO SILVESTRE, JR., ON WITNESS HERMINIA BICO

Q: Mrs. Bico, are you the same Herminia Bico, one of the plaintiffs in this case?

A: Yes, sir.

Q: Do you know the defendants Ballesteros in this case?

A: I know them, sir.

Q: Why do you know them?

A: Because they are my relatives, sir.

Q: Why did you say that they are your relatives?

A: [Their] father and my motherare brother and sister, sir.

Q: What is the name of your mother?

A: Irenea Ballesteros, sir.

Q: What is the name of the father of the defendants Ballesteros?

A: Juan Ballesteros, sir.

Q: So, you mean that they are brother and sister, what is the name of the mother of Irenea Ballesteros and [Juan] Ballesteros?

A: Maria Membrebe, sir.

Q: What about the father of Irenea Ballesteros and Juan Ballesteros?

A: Apolonio Ballesteros, sir.

Q: So, you are saying that Irenea Ballesteros and Juan Ballesteros being brother and sister they are the children of Maria
Membrede and Apolonio Ballesteros?

A: Yes, sir.

Q: Do you have proof that your mother is Irenea?

ATTY. CERVO

I admit the relationship.

ATTY. SILVESTRE

However, Your Honor, the defendant Extra-Ordinary is denying.

COURT

But they are not here.

ATTY. CERVO

As far as I am concerned…

COURT

As far as the Ballesteros…

ATTY. CERVO

As far as the Ballesteros are concerned they are admitting the relationship.

ATTY. SILVESTRE

But on the next hearing the counsel for the Extra-Ordinary will appear.

COURT

The admission is effective only insofar as the client of Atty. Cervo is concerned.
ATTY. SILVESTRE

That is the reason why I am asking these questions.

COURT

They are not here. So, if they will question it later on they are not here. I think the objection will be too late. If they do not object
right now the objection is waived.

ATTY. SILVESTRE

I went over the record of the case, the complainant and the Answer filed by the defendant now when I read the Answer filed by
defendant Ballesteros, defendant Ballesteros are practically admitting everything except for a few allegations.

COURT

Are they disputing relationship?

ATTY. SILVESTRE

No, Your Honor.

COURT

So, if it is not disputed in the Answer, it is considered admitted.

ATTY. SILVESTRE

Okay, Your Honor.

Would counsel for the defendantstipulate that the parents, grandparents as well as the father and the mother are already dead?

ATTY. CERVO

Yes admitted, Your Honor.

COURT

How can you deny that they are already dead?

ATTY. SILVESTRE

We would like to proceed to the markings, Your Honor of the exhibits.

COURT

Proceed.

ATTY. SILVESTRE

There being no objections, we would like to mark the Certificate of Baptism of Irenea Ballesteros, child of Apolonio Ballesteros
and Maria Membrebe as Exhibit "A".

COURT

Mark it.

ATTY. SILVESTRE
The name Apolonio Ballesteros and Maria Membrebebe bracketed and marked as Exhibit "A-1".

COURT

Mark it.

ATTY. SILVESTRE

The Death Certificate of Irenea Samson as Exhibit "B". The name of husband Santiago Samson be bracketed and marked as
Exhibit "B-1". The Certificate of Death of Santiago Samson be marked as Exhibit "C".

COURT

Mark them.

ATTY. SILVESTRE

The name Herminia Bico followed by the word daughter be marked as our Exhibit "C-1".

COURT

Mark it.

ATTY. SILVESTRE

The certificate of Live Birth ofHerminia Samson be marked as Exhibit "D".

COURT

Mark it.

ATTY. SILVESTRE

The Certificate of Baptism of Merlita Samson as Exhibit "E".

COURT

Mark it.

ATTY. SILVESTRE

The name Santiago Samson and Herminia Ballesteros be bracketed and marked as Exhbit "E-1".

COURT

Mark it.

ATTY. SILVESTRE

Will counsel for defendants Ballesteros stipulate that prior to the death of the sister of the witness Merlita Samson she married
the other co-plaintiff Ely Flestado?

ATTY. CERVO

Yes.

ATTY. SILVESTRE
We would like to mark, Your Honor, the Marriage Contract executed by and between MerlitaSamson and Ely Flestado as Exhibit
"F".

COURT

Mark it.

ATTY. SILVESTRE

The Certificate of Death of Merlita Flestado be marked as Exhbit "G".

COURT

Mark it.

ATTY. SILVESTRE

One of the entries in the Certificate of Death, Herminia Bico followed by the name sister be bracketed and marked as Exhbit "G-
1".

COURT

Mark it.19

We also took into consideration the admissions made by the heirs of Juan in their Answer to the Complaint filed by respondents
before the trial court. For ready reference, we shall reproduce the pertinent portion of the Answer and the Complaint:

ANSWER

xxxx

2. The defendants BALLESTEROS admit the allegations in paragraphs 8, 9, 10, 11, 12 and 13 of the complaint; 20

COMPLAINT

8. [Respondents] together with defendants-Ballesteros and defendant Juan T. Ballesteros, Jr., are co-owners ofa parcel ofland
measuring TWENTYNINE THOUSAND SEVEN HUNDRED FORTY-EIGHT (29,748) SQUARE METERS situated at Barangay Pantok,
Binangonan, Rizal by virtue of succession;

9. [Herminia], defendants Ballesteros and defendant Juan T. Ballesteros are the Heirs of the late Spouses Apolonio Ballesteros
and Maria Membrebe who were the parents of the late Juan M. Ballesteros and the late Irenea M. Ballesteros-Samson x x x;

10. During her lifetime, Irenea M. Ballesteros married Santiago Samson, now deceased, with whom she had two (2) children,
namely: [Herminia] and Merlita B. Samson x x x;

11. Merlita B. Samson married [respondent] Ely and later died childless and intestate x x x;

12. In his lifetime, Juan M. Ballesteros married Leonarda Tambongco, now deceased, with whom she had six (6) children, namely:
defendants Ballesteros and defendant Juan T. Ballesteros, Jr.; 13. Likewise, during the lifetime of Apolonio Ballesteros, he was the
owner of the parcel of land mentioned in paragraph 8 hereof and the same was declared for taxation purposes under his name x
x x;21

Furthermore, Juan testified during the 12 March 2007 hearing that respondents are co-owners of the subject property, to wit:

COURT Asan si Ballesteros?

ATTY. CERVO

He is in court, Your Honor.

COURT (to Ballesteros)

Q: Alam mo ba na ang may-ari ng lupa na binenta ninyo ay isa sa may-ari sya?

A: Opo.

Q: So, hindi lang kayo ang may-ari ng lupa? Ang ina nya kasama doon sa may-ari at kalahati lang ang sa inyo?

A: Hindi pa naparti.

Q: Kahit hindi pa naparte narerecognize ninyo na ang nanay niya ay isa sa may-ari ng lupa kasama ang tatay mo, hindi ba?

A: Opo.

Q: So, kalahati ang interest ninyo sa lupa, tama?

A: Opo.

Q: Why did you sell all?

A: Hindi pa po bayad lahat, ang hinahabol nila magkabayaran. Kulang pa po ng isang milyon.

Q: Ang tanong saiyo, kalahati ng lupa may karapatan ka, you have a right [to] only to one of the property?

A: Opo.

Q: Bakit sa Deed of Sale ibinenta lahat? Wala silang pirma.

A: Nakalimutan ko.22

A party may make judicial admissions in (a) the pleadings, (b) during the trial, either by verbal or written manifestations or
stipulations, or (c) in other stages of the judicial proceeding. 23 Sec. 4, Rule 129 of the Revised Rules of Court provides:

Sec. 4. Judicial admissions. – Anadmission, verbal or written, made by a party in the course of the proceedings in the same case,
does not require proof. The admission may be contradicted only by showing that it was made through palpable mistake or that
no such admission was made.

The Answer submitted by the heirs ofJuan, as well as the testimony of Juan constitute judicial admissions. Well-settled is the rule
that a judicial admission conclusively binds the party making it. He cannot thereafter take a position contradictory to, or
inconsistent with his pleadings. Acts or facts admitted do not require proof and cannot be contradicted unless it is shown that
the admission was made through palpable mistake or that no such admission was made. 24

EDC avers that said judicial admission should not bind it because it was an innocent purchaser in good faith.1âwphi1 The Court
of Appeals debunked this contention and correctly ruled, as follow:

In a contract of sale, it is essential that the seller isthe owner of the property he is selling. Under Article 1458 of the Civil Code,
the principal obligation of a seller is to transfer the ownership of the property sold. Also, Article 1459 of the Civil Code provides
that the thing must be licit and the vendor must have a right to transfer the ownership thereof at the time it is delivered. The
execution by appellants Ballesteros of the Deed of Absolute Sale over the subject property which they do not exclusively own but
is admittedly co-owned by them together with the [respondents], was valid only to the extent of the former’s undivided one-half
share thereof, as they had no title or interest to transfer the other one-half portion which pertains to the [respondents] without
the latter’s consent. It is an established principle that no one cangive what one does not have – nemo dat quod non habet.
Accordingly, one can sell only what one owns or is authorized to sell, and the buyer can acquire no more than what the seller can
transfer legally. Thus, since appellant EDC’s rights over the subject property originated from sellers-appellants Ballesteros, said
corporation merely stepped into the shoes of its sellers and cannot have a better right than what its sellers have.Indeed, a spring
cannot rise higher than its source.25 (Emphasis ours) Moreover, EDC was given an ample opportunity to be heard through
counsel. The essence of due process is the right to be heard. Due process is satisfied when the parties are afforded a fair and
reasonable opportunity to explain their respective sides of the controversy. Thus, when the party seeking due process was in fact
given several opportunities to be heard and air his side, but it is by his own fault or choice he squanders these chances, then his
cry for due process must fail.26
It is apparent that despite numerous resetting of the case for EDC, it failed to appear because of the absence of its counsel. On 3
October 2007, EDC was required by the court to securea new lawyer for the next hearing but during the two hearings that
followed, no counsel appeared for EDC. It is of no moment that on some dates the resetting was on motion of the other parties
to the case. The fact remains that EDC’s counsel failed to appear on 25 April, 25 June, 13 August, 5 November and 5 December
2007. Therefore, EDC was not deprived of its day in court and he cannot feign denial of due process.

Having established respondents’ co-ownership rights over the subject property, we find no error in the appellate court’s ruling
sustaining the validity of the Deed of Absolute Sale but only with respect to the rights of the heirs of Juan over one-half of the
property.

Article 493 of the Civil Code recognizes the absolute right of a coowner to freely dispose of his pro indivisoshare as well as the
fruits and other benefits arising from that share, independently of the other coowners, 27 thus:

Art. 493. Each co-owner shall have the full ownership of his part of the fruits and benefits pertaining thereto, and he may
therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are
involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which
may be allotted to him in the division upon the termination of the co-ownership.

In Spouses Del Campo v. Court of Appeals,28 we had the occasion to expound the rights of a co-owner vis-à-vis the vendee, thus:

x x x Would the sale by a co-owner of a physical portion of an undivided property held in common be valid? x x x

On the first issue, it seems plain to us that the trial court concluded that petitioners could not have acquired ownership of the
subject land which originally formed part of Lot 162, on the ground that their alleged right springs from a void sale transaction
between Salome and Soledad. The mere fact that Salome purportedly transferred a definite portion of the co-owned lot by
metes and bounds to Soledad, however, does not per serender the sale a nullity. This much is evident under Article 493 of the
Civil Code and pertinent jurisprudence on the matter. More particularly in Lopez vs. Vda. De Cuaycong, et. al. which we find
relevant, the Court, speaking through Mr. Justice Bocobo, held that:

…The fact that the agreement in question purported to sell a concrete portion of the hacienda does not render the sale void, for
it is a well-established principle that the binding force of a contract must be recognized as far asit is legally possible to do so.
"Quando res non valet ut ago, valeat quantum valere potest." (When a thing is of no force as I do it, it shall have as much force as
it can have.)

Applying this principle to the instant case, there can be no doubt that the transaction entered into by Salome and Soledad could
be legally recognized in its entirety since the object of the sale did not even exceed the ideal shares held by the former in the co-
ownership. As a matter of fact, the deed of sale executed between the parties expressly stipulated that the portion of Lot 162
sold to Soledad would be taken from Salome’s 4/16 undivided interest in said lot, which the latter could validly transfer in whole
or in part even without the consent of the other co-owners. Salome’s right to sell part of her undivided interest in the co-owned
property is absolute in accordance with the well-settled doctrine that a coowner has full ownership of his pro-indiviso share and
has the right to alienate, assign or mortgage it, and substitute another person in its enjoyment. Since Salome’s clear intention
was to sell merely part of her aliquot share in Lot 162, in our view no valid objection can be made against it and the salecan be
given effect to the full extent.

We are not unaware of the principle that a co-owner cannot rightfully dispose of a particular portion of a co-owned property
prior to partition among all the co-owners. However, this should not signify that the vendee does not acquire anything atall in
case a physically segregated area of the co-owned lot is in fact sold to him. Since the coowner/vendor’s undivided interest could
properly be the object of the contract of sale between the parties,what the vendee obtains by virtue of such a sale are the same
rights as the vendor had as co-owner, in an ideal share equivalent to the consideration given under their transaction. In other
words, the vendee steps into the shoes of the vendor as co-owner and acquires a proportionate abstract share in the property
held in common.29

We are also in full accord with the appellate court’s order for the heirs of Juan to return one-half of the purchase price to EDC.
There is unjust enrichment when a person unjustly retains a benefit to the loss of another, or when a person retains money or
property of another against the fundamental principles of justice, equity and good conscience. 30 Therefore, it is correct for the
Court of Appeals to order the heirs of Juan to return the amount of ₱1,487,400.00, representing one-half of the purchase price
to prevent unjust enrichment at the expense of EDC. Lastly, and likewise correctly, the prayer for moral and exemplary damages
and attorney’s fees being unsubstantiated had to be denied.

WHEREFORE, the instant petition is DENIEDand the assailed Decision dated 31 July 2009 and Resolution dated 22 January 2010
of the Court of Appeals in CA-G.R. CV. No. 91358 is AFFIRMED in toto.
SO ORDERED.