1970 but later on decided to recall and not implement the same.
In fine,
DIVISION [ GR No. 190995, Aug 09, 2017 ]
BENJAMIN A. KO v. VIRGINIA DY ARAMBURO
DECISION
TIJAM, J.:
[1]
This is a Petition for Review on Certiorari under Rule 45, assailing the
Decision[2] dated September 22, 2009 of the Court of Appeals (CA) in
CA-G.R. CV No. 89611, affirming the Decision dated February 16, 2006
of the Regional Trial Court (RTC) of Tabaco City, Branch 15, in Civil
Case No. T-1693.
Factual and Procedural Antecedents
Respondent Virginia Dy Aramburo (Virginia) is Corazon Aramburo Ko's
(Corazon) sister-in-law, the former being the wife of the latter's brother,
Simeon Aramburo (Simeon). Corazon and Simeon have another sibling,
Augusto Aramburo (Augusto), who predeceased them. Virginia's co
respondents herein are the heirs of Augusto, while the petitioners in the
instant case are the heirs of Corazon who substituted the latter after she
died while the case was pending before the CA.[3]
On November 26, 1993, Virginia, together with her co-respondents
herein, filed a Complaint for Recovery of Ownership with Declaration of
Nullity and/or Alternatively Reconveyance and Damages with
Preliminary Injunction against Corazon, docketed as Civil Case No. T-
1693.[4]
Subject of this case are seven parcels of land located in Tabaco City,
Albay, to wit: (1) Transfer Certificate of Title (TCT) No. T-41187 with an
area of 176,549 square meters, more or less; (2) TCT No. T-41183 with
an area of 217,732 sq m, more or less; (3) TCT No. T-41184 with an
area of 39,674 sq m, more or less; (4) TCT No. T-28161 with an area of
86,585 sq m, more or less; (5) TCT No. T-41186 with an area of 4,325
sq m, more or less; (6) TCT No. 49818 with an area of 27,281 sq m,
more or less; and (7) TCT No. 49819 with an area of 35,760 sq m, more
or less (subject properties), now all under the name of Corazon. [5]
The complaint alleged that Virginia and her husband Simeon (Spouses
Simeon and Virginia), together with Corazon and her husband Felix
(Spouses Felix and Corazon), acquired the subject properties from
Spouses Eusebio and Epifania Casaul (Spouses Eusebio and Epifania)
through a Deed of Cession dated April 10, 1970.[6]
On April 13, 1970, Spouses Simeon and Virginia and Spouses Felix and
Corazon executed a Deed of Cession in favor of Augusto's heirs, subject
of which is the one-third pro-indiviso portion of the subject properties.[7]
However, allegedly with the use of falsified documents, Corazon was
able to have the entire subject properties transferred exclusively to her
name, depriving her co-owners Virginia and Augusto's heirs of their pro-
indiviso share, as well as in the produce of the same.[8]
For her part, Corazon admitted having acquired the subject properties
through cession from their uncle and auntie, Spouses Eusebio and
Epifania. She, however, intimated that although the said properties were
previously registered under Spouses Eusebio and Epifania's name, the
same were, in truth, owned by their parents, Spouses Juan and Juliana
Aramburo (Spouses Juan and Juliana). Hence, when her parents died,
Spouses Eusebio and Epifania allegedly merely returned the said
properties to Spouses Juan and Juliana by ceding the same to their
children, Corazon and Simeon. She further averred that the said
properties were ceded only to her and Simeon, in that, her husband
Felix's name and Virginia's name appearing in the Deed were merely
descriptive of her and Simeon's civil status, being married to Felix and
Virginia, respectively.[9]
Corazon alleged that she and Simeon thought of sharing a third of the
subject properties with the heirs of their brother Augusto who
predeceased them, hence they executed a Deed of Cession on April 13,
thus, Corazon insisted that only she and Simeon share one-half portion
each of the subject properties. [10]
Corazon further alleged that on December 14, 1974, Simeon sold and
conveyed his entire one-half share in the co-owned properties in her
favor. Hence, Corazon became the sole owner thereof and
consequently, was able to transfer the titles of the same to her name.
Corazon argued that the subject properties belong to Simeon's exclusive
property, hence, Virginia's conformity to such sale was not necessary.[11]
Corazon also raised in her Answer to the complaint, that respondents'
action was barred by prescription.[12]
Ruling of the RTC
During trial, it was established that Simeon and Virginia's marriage had
been on bad terms. In fact, since February 4, 1973 Simeon and Virginia
had lived separately. Simeon lived with his sister Corazon in Tabaco
City, Albay, while Virginia and their children lived in Paco, Manila. From
these circumstances, the trial court deduced that it is highly suspicious
that thereafter, Virginia would sign a deed of sale, consenting to her
husband's decision to sell their conjugal assets to Corazon. Virginia
vehemently disowned the signature appearing in the December 14,
1974 Deed of Absolute Sale. Verily, the National Bureau of Investigation
(NBI) examination report concluded that the questioned signature and
the specimen signatures of Virginia were not written by one and the
same person and thus, the former is a forgery. [13]
Without the conformity of Virginia, according to the trial court, Simeon
cannot alienate or encumber any real property of the conjugal
partnership.[14]
The trial court concluded, thus, that the December 14, 1974 Deed of
Absolute Sale, being falsified, is not a valid instrument to transfer the
one third share of the subject properties.[15]
The trial court also did not accept Corazon's allegation that the April 13,
1970 Deed of Cession in favor of Augusto's heirs as to the other one
third portion of the subject properties, was cancelled and not
implemented. The trial court noted Corazon's testimony during trial that
she was merely administering the said portion for Augusto's heirs, her
nephews and nieces, who were still minors at that time. [16]
On February 16, 2006, the trial court rendered a Decision in favor of
herein respondents, thus:
WHEREFORE, foregoing premises considered, judgment is hereby
rendered in favor of the plaintiffs:
Declaring the plaintiffs Virginia Dy-Arambulo and Vicky Aramburo-
(1) Lee together with the interested parties the owner of ONE-THIRD
(1/3) portion of the property subject mater of this case;
Declaring the co-plaintiffs (heirs of Augusto Aramburo) likewise the
(2) owners of One-third (1/3) portion of the property subject matter of
this case;
Ordering the Cancellation of [TCT] Nos. T-41187,T-41183, T-41184,
T-41185, T-41186, T-48918[4] [sic] and T-49819 and another ones
issued upon proper steps taken in the names of the plaintiffs and
(3)
interested parties; and the other plaintiffs, Heirs of Augusto
Aramburo, conferring ownership over TWO-THIRDS (2/3) PORTION
of the properties subject matter of this case;
Ordering the defendant to reimburse the plaintiffs TWO-THIRDS
(2/3) of the produce of the properties, subject matter of this case from
(4)
the time she appropriated it to herself in 1974 until such time as the
2/3 share are duly delivered to them; and
Ordering the defendant to pay plaintiffs by way of damages the
(5)
amount of Fifty Thousand (P50,000.00) as attorney's fees; and
(6) To pay the cost of suit.
SO ORDERED.[17]
Ruling of the CA
1
On appeal, Corazon maintained that the subject properties are not part
of Spouses Simeon and Virginia's conjugal properties. This, according
to her, is bolstered by the fact that the subject properties are not included
in the case for dissolution of conjugal partnership docketed as Special
Proceeding No. 67, and in the separation of properties case docketed
as Civil Case No. T-1032 between Simeon and Virginia.[18]
Respondents argued otherwise. Particularly, Virginia insisted that only a
third portion of the subject properties is owned by Simeon and that the
same is conjugally-owned by her and Simeon since it was acquired
during their marriage. As such, the disposition by Simeon of the one-half
portion of the subject properties in favor of Corazon is not only void but
also fictitious not only because Simeon does not own the said one-half
portion, but also because Virginia's purported signature in the December
14, 1974 Deed of Absolute Sale as the vendor's wife was a forgery as
found by the NBI, which was upheld by the trial court.[19]
In its September 22, 2009 assailed Decision,[20] the CA affirmed the trial
court's findings and conclusion in its entirety, thus:
WHEREFORE, the present appeal is DISMISSED. Consequently, the
Decision of the [RTC], Branch 15, Tabaco City, in Civil Case No. T-1693
is hereby AFFIRMED in toto.
SO ORDERED.[21]
Petitioners then, substituting deceased Corazon, filed a Motion for
Reconsideration,[22] which was likewise denied by the CA in its
Resolution[23] dated January 13, 2010:
WHEREFORE, there being no cogent reason for US to depart from Our
assailed Decision, WE hereby DENY the Motion for Partial
Reconsideration.
[24]
SO ORDERED.
Hence, this petition.
Issue
Did the CA correctly sustain the RTC decision, declaring the parties as
co-owners of the subject properties? In the affirmative, may the subject
titles be nullified and transferred to the parties as to their respective
portions?
This Court's Ruling
The petition is partly meritorious.
At the outset, let it be stated that the law which governs the instant case
is the Old Civil Code, not the Family Code, as the circumstances of this
case all occurred before the effectivity of the Family Code on August 3,
1988.
Proceeding, thus, to the issue of ownership, We find no reason to depart
from the RTC's ruling as affirmed by the CA.
Augusto's heirs own one-third
pro-indiviso share in the subject
properties
Respondents' (Augusto's heirs) claim concerning one-third of the
subject properties, is anchored upon the April 13, 1970 Deed of Cession
executed by Spouses Felix and Corazon and Spouses Simeon and
Virginia in favor of Augusto's children. Petitioners, however, maintain
that the said deed was never given effect as it was recalled by the said
spouses.
The courts a quo found that the said deed, ceding a third of the subject
properties to Augusto's heirs, was in fact implemented as evidenced by
Corazon's testimony that she was merely administering the said
properties for Augusto's heirs as her nephews and nieces were still
minors at that time.
We find no cogent reason to depart from the the courts a quo's findings
as to the existence and effectivity of the April 13, 1970 Deed of Cession
giving rights to Augusto's children over the one-third portion of the
subject property. For one, basic is the rule that factual findings of the
trial court, especially if affirmed by the appellate court, are binding and
conclusive upon this Court absent any clear showing of abuse,
arbitrariness, or capriciousness committed by the trial court.[25] In
addition, We are not convinced of Corazon's bare assertion that the said
document was cancelled merely because she and her brother . Simeon
decided not to implement it anymore. Moreover, as can be gleaned from
the testimony of respondent July Aramburo, one of Augusto's heirs,
which was notably quoted by the petitioners in this petition, it is clear
that he, together with his co-heirs, are co-owners of the subject
properties along with Spouses Simeon and Virginia and Spouses Felix
and Corazon, by virtue of the Deed of Cession executed in their favor.
The said testimony clearly stated that Simeon was also merely
administering the subject properties.[26]
Simeon's heirs, which include
Virginia, also own one-third pro-
indiviso share in the subject
properties
Respondent Virginia's claim as to the other one-third portion of the
subject properties is ultimately anchored upon the April 10, 1970 Deed
of Cession. Corazon, however, countered that inasmuch as her husband
Felix's name in the said Deed of Cession was merely descriptive of her
status as being married to the latter, Virginia's name likewise appeared
in the said Deed of Cession merely to describe Simeon's status as being
married to Virginia. In fine, Corazon argued that the properties subject
of the said Deed were given exclusively to her and Simeon.
Consequently, the one-half portion thereof pertains to Simeon's
exclusive property and does not belong to Simeon and Virginia's
conjugal property. This, according to Corazon, was bolstered by the fact
that Simeon's share in the subject properties was not included in the
petition for separation of properties between Virginia and Simeon.
Petitioners maintain this argument.
We uphold the courts a quo's conclusion that one-third portion of the
subject properties is indeed part of Simeon and Virginia's conjugal
properties.
It is undisputed that the subject properties were originally registered in
the name of Spouses Eusebio and Epifania. It is also undisputed that in
a Deed of Cession dated April 10, 1970, these parcels of land were
ceded to Spouses Felix and Corazon, and Spouses Simeon and
Virginia. There is likewise no question that the subject properties were
ceded to the said spouses during Spouses Simeon and Virginia's
marriage.
Article 160 of the Old Civil Code, which is the applicable provision since
the property was acquired prior to the enactment of the Family Code as
stated above, provides that "all property of the marriage is presumed to
belong to the conjugal partnership, unless it be proved that it pertains
exclusively to the husband or to the wife."[27] This presumption in favor
of conjugality is rebuttable, but only with a strong, clear and convincing
evidence; there must be a strict proof of exclusive ownership of one of
the spouses,[28] and the burden of proof rests upon the party asserting
it.[29]
Thus, in this case, the subject properties, having been acquired during
the marriage, are still presumed to belong to Simeon and Virginia's
conjugal properties.
Unfortunately, Corazon, or the petitioners for that matter, failed to
adduce ample evidence that would convince this Court of the exclusive
character of the properties.
Petitioners' argument that Virginia's name was merely descriptive of
Simeon's civil status is untenable. It bears stressing that if proof obtains
on the acquisition of the property during the existence of the marriage,
as in this case, then the presumption of conjugal ownership remains
unless a strong, clear and convincing proof was presented to prove
otherwise. In fact, even the registration of a property in the name of one
spouse does not destroy its conjugal nature. What is material is the time
when the property was acquired.[30]
We also give scant consideration on petitioners' bare allegation that the
subject properties were actually from the estate of Simeon and
Corazon's parents, intimating that the same were inherited by Simeon
and Corazon, hence, considered their exclusive properties. The records
are bereft of any proof that will show that the subject properties indeed
belonged to Simeon and Corazon's parents. Again, what is established
is that the subject properties were originally registered under Spouses
2
Eusebio and Epifania's name and thus, ceded by the latter. Petitioners'
bare allegation on the matter is so inadequate for the Court to reach a
conclusion that the acquisition of the subject properties was in a nature
of inheritance than a cession.
Likewise, the fact that the subject properties were not included in the
cases for separation of properties between Simeon and Virginia does
not, in any way, prove that the same are not part of Simeon and
Virginia's conjugal properties. Such fact cannot be considered as a
strong, clear and convincing proof that the said properties exclusively
belong to Simeon. Besides, We note respondents' allegation in their
Comment to this petition that the case for separation of properties
between Simeon and Virginia was not resolved by the trial court on the
merits as Simeon died during the pendency thereof, and also because
there was actually a disagreement as to the inventory the properties
included therein. This could mean that precisely, other properties may
be part of the said spouses' conjugal properties and were not included
in the said case. Notably, such allegation was not denied by the
petitioners.
At any rate, the question of whether petitioners were able to adduce
proof to overthrow the presumption of conjugality is a factual issue best
addressed by the trial court. It cannot be over-emphasized that factual
determinations of the trial courts, especially when confirmed by the
appellate court, are accorded great weight by the Court and, as a rule,
will not be disturbed on appeal, except for the most compelling reasons,
which We do not find in the case at bar.[31]
Simeon could not have validly
sold the one-third share of
Augusto's heirs, as well as the
one-third portion of his and
Virginia's conjugal share without
the latter's consent, to Corazon
We now proceed to determine the validity of the December 14, 1974
Deed of Absolute Sale executed by Simeon in favor of Corazon,
covering one-half of the subject properties which was his purported
share.
As for the one-third portion of the subject properties pertaining to
Augusto's heirs, We are one with the CA in ruling that the Deed of
Absolute Sale is void as the said portion is owned by Augusto's heirs as
above-discussed and thus, Simeon had no right to sell the same. It is
basic that the object of a valid sales contract must be owned by the
seller.[32] Nemo dat quod non habet, as an ancient Latin maxim says.
One cannot give what one does not have.[33]
However, as to the one-third portion commonly-owned by Spouses
Simeon and Virginia, Simeon's alienation of the same through sale
without Virginia's conformity is merely voidable.
Article 166[34] of the Old Civil Code explicitly requires the consent of the
wife before the husband may alienate or encumber any real property of
the conjugal partnership except when there is a showing that the wife is
incapacitated, under civil interdiction, or in like situations.
In this case, Virginia vehemently denies having conformed to the
December 14, 1974 sale in favor of Corazon. In fact, during trial, it has
already been satisfactorily proven, through the NBI's findings as upheld
by the trial court, that Virginia's signature appearing on the said Deed of
Absolute Sale is a forgery. Concedingly, a finding of forgery does not
depend entirely on the testimonies of handwriting experts as even this
Court may conduct an independent examination of the questioned
signature in order to arrive at a reasonable conclusion as to its
authenticity. We, however, do not have any means to evaluate the
questioned signature in this case as even the questioned Deed of
Absolute Sale is not available in the records before Us. Hence, We are
constrained to the general rule that the factual findings of the RTC as
affirmed by the CA should not be disturbed by this Court unless there is
a compelling reason to deviate therefrom.
In addition, as correctly observed by the courts a quo, We cannot turn a
blind eye on the circumstances surrounding the execution of the said
Deed of Absolute Sale. The CA, quoting the RTC, held thus:
[T]he dubiety of its execution at a time that [Virginia] and her husband's
marital relationship was already stale is not to be taken for granted. It is
a fact that [Virginia] had lived separately from bed and board with her
husband [Simeon] as of February 4, 1973. It is, therefore, highly
suspicious that [later on], x x x she would consent to her husband's
decision selling their conjugal assets to [Corazon]. Precisely, her
signature appearing in said Deed of Absolute Sale dated December 14,
1974 x x x is being disowned by her as being a forgery. Undoubtedly,
the NBI Examination report anent this x x x conducted by Sr. Document
Examiner Rhoda B. Flores gave the conclusion that the questioned and
the standard/sample signatures of "[Virginia]" was not written by one and
the same person. x x x.[35]
The CA also correctly observed that the forgery, as found by the RTC,
is evident from the admitted fact of strained marital relationship between
Simeon and Virginia and the fact that at the time the question Deed of
Absolute Sale was executed, Simeon had been living with Corazon in
Tabaco City, Albay, while Virginia and her children were living in Paco,
Manila.[36]
Accordingly, without Virginia's conformity, the Deed of Absolute Sale
executed on December 14, 1974 between Simeon and Corazon
purportedly covering one-half of the subject properties is voidable.
As for Augusto's heirs, the action
to nullify the sale of their share,
being void is imprescriptible; as
for Virginia, the action to nullify
the sale of her share, being
merely voidable, is susceptible to
prescription
At this juncture, We differ from the CA's pronouncement that since the
deed of sale involved is a void contract, the action to nullify the same is
imprescriptible.
We qualify.
For the share of Augusto's heirs sold by Simeon in the December 14,
1974 Deed of Absolute Sale, the sale of the same is void as the object
of such sale, not being owned by the seller, did not exist at the time of
the transaction.[37] Being a void contract, thus, the CA correctly ruled that
the action to impugn the sale of the same is imprescriptible pursuant to
Article 1410[38] of the New Civil Code (NCC).
As for the share pertaining to Simeon and Virginia, We must emphasize
that the governing law in this case is the Old Civil Code. Under the said
law, while the husband is prohibited from selling the commonly-owned
real property without his wife's consent, still, such sale is not void but
merely voidable.[39] Article 173 thereof gave Virginia the right to have the
sale annulled during the marriage within ten years from the date of the
sale. Failing in that, she or her heirs may demand, after dissolution of
the marriage, only the value of the property that Simeon erroneously
sold.[40] Thus:
Art. 173. The wife may, during the marriage, and within ten years from
the transaction questioned, ask the courts for the annulment of any
contract of the husband entered into without her consent, when such
consent is required, or any act or contract of the husband which tends
to defraud her or impair her interest in the conjugal partnership property.
Should the wife fail to exercise this right, she or her heirs, after the
dissolution of the marriage, may demand the value of property
fraudulently alienated by the husband.
In contrast, the Family Code does not provide a period within which the
wife who gave no consent may assail her husband's sale of real
property. It simply provides that without the other spouse's written
consent or a court order allowing the sale, the same would be
void.[41]Thus, the provisions of the NCC governing contracts is applied
as regards the issue on prescription. Under the NCC, a void or inexistent
contract has no force and effect from the very beginning, and this rule
applies to contracts that are declared void by positive provision of law
as in the case of a sale of conjugal property without the other spouse's
written consent.[42] Under Article 1410 of the NCC, the action or defense
for the declaration of the inexistence of a contract does not prescribe.
As this case, as far as Virginia is concerned, falls under the provisions
of the Old Civil Code, the CA erred in ruling that the subject Deed of
3
Absolute Sale is void for the lack of the wife's conformity thereto and
thus, applying Article 1410 of the NCC stating that the action to question
a void contract is imprescriptible. Again, Simeon's sale of their conjugal
property without his wife's conformity under the Old Civil Code is merely
voidable not void. The imprescriptibility of an action assailing a void
contract under Article 1410 of the NCC, thus, does not apply in such
case. The 10-year prescriptive period under Article 173 of the Old Civil
Code, therefore, should be applied in this case.

Here, the invalid sale was executed on December 14, 1974 while the
action questioning the same was filed in 1993, which is clearly way
beyond the 10-year period prescribed under Article 173 of the Old Civil
Code. Virginia's recourse is, therefore, to demand only the value of the
property, i.e., the one-third portion of the subject properties invalidly sold
by Simeon without Virginia's conformity pursuant to the same provision.

In fine, while We uphold the courts a quo's findings that the parties
herein are co-owners of the subject properties, We reverse and set aside
the said courts' ruling, ordering the cancellation of titles of the entire
subject properties and the transfer of the two-thirds portion of the same
to the respondents. While Augusto's heirs are entitled to the recovery of
their share in the subject properties, Virginia is only entitled to demand
the value of her share therefrom pursuant to Article 173 of the Old Civil
Code above-cited.

WHEREFORE, premises considered, the petition is PARTLY

GRANTED. The Decision dated September 22, 2009 of the Court of
Appeals in CA-G.R. CV No. 89611, affirming the Decision dated
February 16, 2006 of the Regional Trial Court of Tabaco City, Branch
15, in Civil Case No. T-1693 is hereby AFFIRMED in all
aspects EXCEPT insofar as it ordered the cancellation of the titles of the
entire subject properties.

Accordingly, petitioners Heirs of Corazon Aramburo Ko, respondents

Virginia Dy Aramburo and all persons claiming under her, as Heirs of
Simeon Aramburo, and respondents Heirs of Augusto Aramburo are
deemed co-owners pro-indiviso of the subject properties in equal one-
third (1/3) share. As such, the titles over the subject properties
are ORDERED cancelled insofar as the heirs of Augusto Aramburo's
share is concerned. Virginia Dy Aramburo and all persons claiming
under her have the right to demand for the value of their one-third (1/3)
share in a proper case.

SO ORDERED.

--------------------------------------------------------------------------------------

4
G.R. No. 206114 In its Decision, the RTC noted that while the Kasunduan patently lacks
the written consent of Jorge, the latter's acts reveal that he later on
acquiesced and accepted the same. In particular, the RTC observed that
DOLORES ALEJO, Petitioner
Jorge did not s~asonably and ~xpressly repudiate the Kasunduan but
vs.
instead demanded from Dolores compliance therewith and that he
SPOUSES ERNESTO CORTEZ and PRISCILLA SAN PEDRO,
allowed Dolores to take possession of the property. Further, the RTC
SPOUSES JORGE LEONARDO and JACINTA LEONARDO and THE
noted that the case for annulment of sale, reconveyance and recovery
REGISTER OF DEEDS OF BULACAN, Respondents
of possession filed by Jorge. against Dolores had been dismissed and
said dismissal attained finality. As such, res judicata set in preventing
TIJAM, J.: Jorge from further assailing the Kasunduan. 17

Assailed in this Petition for Review1 under Rule 45 are the Decision2
dated October 3, 2012 and Resolution3 dated February 26, 2013 of the
Court of Appeals4 (CA) in CA-G.R. CV No. 95432, which reversed the
Decision5 of the Regional Trial Court (R TC), 6 Branch 19 in the City of
Malolos, Bulacan. In its assailed Decision and Resolution, the CA
declared void the parties' agreement for the sale of a conjugal property
for lack of written consent of the husband.
Accordingly, the RTC declared the Kasunduan as a perfected contract
and Dolores as the rightful owner of the property. It further ordered the
cancellation of titles issued in the names of the Spouses Leonardo and
the Spouses Cortez and the issuance of a new title in the name of
Dolores. Finally, the RTC ordered Dolores to pay the balance of
PhP200,000 and the Spouses Leonardo to pay moral damages,
attorney's fees, litigation expenses and costs of suit. 18

The Facts and Antecedent Proceedings In disposal, the RTC pronounced:

At the heart of the instant controversy is a parcel of land measuring 255 WHEREFORE, judgment is hereby rendered in favor of plaintiff Dolores
square meters located .at Cut-cot, Pulilan, Bulacan and covered by Alejo and against defendants [S]pouses Leonardo and Cortez, as
Transfer Certificate of Title No. T-118170. The property belonged to the follows:
conjugal property/absolute community of property7 of the respondent
Spouses Jorge and Jacinta Leonardo (Spouses Leonardo) and upon
1.) Declaring the "Kasunduan" dated March 29, 1996 a perfected
which their residential house was built.
contract, legal, binding and subsisting having been accepted by
defendant Jorge Leonardo;
It appears that sometime in March 1996, Jorge's father, Ricardo,
approached his sister, herein petitioner Dolores Alejo (Dolores), to
2.) Declaring the plaintiff the true, legal and rightful owner of the subject
negotiate the sale of the subject property.8 Accordingly, on March 29,
property;
1996, Jacinta executed a Kasunduan with Dolores for the sale of the
property. for a purchase price of PhP500,000. Under
the Kasunduan, Dolores was to pay PhP70,000 as down payment,, 3.) Declaring TCT Nb. 18170 in the names of Spouses Jorge Leonardo,
while PhP230,000 is to be paid on April 30, 1996 and the remaining Jacinta Leonardo cancelled and of no legal force and effect;
balance of PhP200,000 was to be paid before the end of the year
1996.9 The Kasunduan was signed by Jacinta and Ricardo as witness.
4.) Declaring TCT No. 121491 in the names of Spouses Ernesto Cortez
Jorge, however, did not sign the agreement.
and Priscilla San Pedro null and void and therefore should be ordered
cancelled and of no legal force and effect;
It further appears that the down payment of PhP70,000 and the
PhP230,000 were paid by Dolores10 on the dates agreed upon and
5.) In lieu thereof, ordering the Register of Deeds of the Province of
thereafter, Dolores was allowed to possess the property and introduce
Bulacan to issue a new title in the name of plaintiff Dolores Alejo;
improvements thereon. 11

6.) Ordering plaintiff Dolores Alejo to pay defendants Spouses Leonardo

However, 9n July 3, 1996, Jorge wrote a letter to Dolores denying
the sum of Php200,000.00 to complete her obligation under the
knowledge and consent to the Kasunduan. Jorge further informed
"Kasunduan";
Dolores that Jacinta was retracting her consent to the Kasunduan due
to Dolores' failure to comply with her obligations. This was followed by
another letter dated September 29, 1996 from Jorge to Dolores 7.) Ordering defendants Spouses Leonardo to pay plaintiff the sum of
demanding that the latter pay the balance of PhP200,000 on or before Phpl00,000.00 as and by way of moral damages;
October 5, 1996, otherwise the purchase price shall be increased to
PhP700,000. 12 According to Dolores, she was being compelled by
8.) Ordering defendants Spouses Leonardo to pay plaintiff the sum of
Jorge to sign the agreement but that she refused to do so. As a result,
Jorge went to her house, destroyed its water pump and disconnected Php50,000.00, as and by way of attorney's fees and litigation expenses;
the electricity. Before· the officials of the Barangay, Dolores tendered
the balance of PhP200,000 but Jorge refused to accept the same. 9.) Ordering defendants Spouses Leonardo to pay the cost of suit.
Instead, Jorge filed cases for ejectment13 and annulment of sale,
reconveyance and recovery of possession14 against her. 15 These cases
were later on dismissed by the trial court on technical grounds. The claim of Php500,000.00 actual damages as well as Php 100,000.00
as exemplary damages are denied for lack of legal as well as factual
basis.· All other claims and counterclaim are denied for lack of merit.
However, during the pendency of said cases, the subject property was
sold by Jorge and Jacinta to respondents Spouses Ernesto Cortez and
Priscilla San Pedro (Spouses Cortez) under a Deed of Absolute Sale SO ORDERED. 19
dated September 4, 1998 for a purchase price of PhP700,000. A new
transfer certificate of title was Issued in the latter's names. At the time of The Spouses Leonardo and the Spouses Cortez seasonably appealed.
said sale, Dolores was in possession of the subject property. 16
The Ruling of the CA
Consequently, Dolores filed the case a quo for annulment of deed of
sale and damages against the Spouses Cortez and the Spouses
Leonardo. The CA granted the appeal. 20 Contrary to the findings of the R TC, the
CA held that Jorge, by imposing a new period within which Dolores was
to pay the remaining balance and by increasing the purchase price, only
The Ruling of the RTC qualifiedly accepted the Kasunduan. Being a qualified acceptance, the
5
same partakes of a counter-offer and is a rejection of the original offer.
Consequently, the CA declared the Kasunduan as void absent Jorge's
consent and acceptance. Nevertheless, the CA found Dolores to be a
possessor in good faith who is entitled to reimbursement for the useful
improvements introduced on the land or to the increase in the value
thereof, at the option of the Spouses Leonardo.
The CA accordingly disposed:
WHEREFORE, the appeal is hereby GRANTED. The assailed 14
January 2010 Decision of the Regional Trial Court, Branch 19 of Malolos
City, Bulacan is her.eby REVERSED and SET
ASIDE. The Kasunduan dated 29 March 1996 is hereby
declared VOID. TCT No. 121491 in the names of Spouses Cortez and
San Pedro is hereby declared VALID and SUBSISTING. Appellants
Spouses Leonardo are ORDERED to reimburse Dolores Alejo the
amount of Php300,000.00 that the latter paid to Jacinta Leonardo, with
legal interest until fully paid. Appellants Spouses Leonardo are likewise
ORDERED, at their option, to indemnify Dolores Alejo with her expenses
for introducing useful improvements on the subject land or pay the
increase in value which it may have acquired by reason of those
improvements, with Alejo entitled to the right of retention of the land until
the indemnity is made. Finally, the Regional Trial Court of Malolos City,
Bulacan from which this case originated is DIRECTED to receive
evidence and determine the amount of indemnity to which appellee
Dolores Alejo is entitled.
SO ORDERED.21
Dolores' motion for reconsideration was denied, hence the instant
petition.
The Issues
Dolores argues that the Spouses Leonardo's and Spouses Cortez'
appeals ought to have been outrightly dismissed for failure to comply
with the requirements of Section 13, Rule 44. On the substantive issue,
Dolores · maintains that the Kasunduan is a perfected and binding
contract as it was accepted by Jorge through his overt acts. She also
argues that the dismissal of Jorge's complaint for annulment of sale
constitutes res judicata thus preventing Jorge from further questioning
the validity of the Kasunduan. Finally, she contends that the Spouses
Cortez were not buyers in good faith as they knew that the property was
being occupied by other persons.
The Ruling of this Court
The petition is denied.
Dismissal of Appeal Lies within the Sound Discretion of the Appellate
Court
Technically, the CA may dismiss the appeal for failure to comply with the
requirements under Sec. 13, Rule 44. Thus, Section 1, Rule 50 provides
that an appeal may be dismissed by the Court of Appeals, on its own
motion or on that of the appellee upon the ground, among others, of
absence of specific assignment of errors in the appellant's brief, or of
page references to the record.
Nevertheless, it has been consistently held that such provision confers
a power, not a duty, on the appellate court.22The dismissal is directory,
not mandatory, and as such, not a ministerial duty of the appellate
court.23 In other words, the CA enjoys ample discretion to dismiss or not
to dismiss the appeal. What is more, the exercise of such discretion is
presumed to have been sound and regular and it is thus incumbent upon
Dolores to offset such presumption. Yet, the records before this Court
do not satisfactorily show that the CA has gravely abused its discretion
in not dismissing the Spouses Leonardo's and Spouses Cortez' appeals.
On the contrary, We are of the view that the ends of justice will be better
served if the instant case is determined on the merits, after full
opportunity to ventilate their respective claims and defenses is afforded
to all parties. After all, it is far better to decide a case on the merits, as
the ultimate end, rather on a technicality.
The key issue in this case is whether the Kasunduan for the sale of a
conjugal real property between Jacinta and Dolores as a continuing offer
has been converted to a perfected and binding contract. For, if Jorge
has not accepted or consented to the said sale, the Kasunduan is
considered void rendering the other issues raised herein merely
academic.
Sale by one Spouse of Conjugal Real Property is Void Without the
Written Consent of the other Spouse
Any alienation or encumbrance of conjugal property made during the
effectivity of the Family Code is governed by Article 124 thereof which
provides:
Article 124. The administration and enjoyment of the conjugal
partnership property shall belong to both spouses jointly. In case of
disagreement, the husband's decision shall prevail, subject to recourse
to the court by the wife for proper remedy, which must be availed of
within five years from the date of the contract implementing such
decision.
In the event that one spouse is incapacitated or otherwise unable to
participate in the administration of the conjugal properties, the other
spouse may assume sole powers of administration. These powers do
not include disposition or encumbrance without authority of the court or
the written consent of the other spouse. In the absence of such authority
or consent, the disposition or encumbrance shall be void. However, the
transaction shall be construed as a continuing offer on the part of the
consenting spouse and the third person, and may be perfected as a
binding contract upon the acceptance by the other spouse or
authorization by the court before the offer is withdrawn by either or both
offerors. (Emphasis supplied.)
The law is therefore unequivocal when it states that the disposition of
conjugal property of one spouse sans the written consent of the other is
void. Here, it is an established fact that the Kasunduan was entered into
solely by Jacinta and signed by her alone. By plain terms of the law
therefore, the Kasunduan is void.
Nevertheless, We agree with the RTC and the CA when it held that the
void Kasunduan constitutes a continuing offer from Jacinta and Dolores
and that Jorge had the option of either accepting or rejecting the offer
before it was withdrawn by either, or both, Jacinta and Dolores.
The point of contention is whether Jorge accepted such continuing offer.
If so, then the Kasunduan is perfected as a binding contract; otherwise,
the Kasunduan remains void .
The RTC opined that Jorge's failure to expressly repudiate
the Kasunduan and his demand that Dolores comply with her
undertakings therein show Jorge's acceptance of the sale of the
conjugal property. On the other hand, the CA noted that in varying the
terms of the Kasunduan, i.e., in the time of payment and the purchase
price, Jorge is deemed to have only qualifiedly accepted the
same.1âwphi1
We agree with the CA.
It is undisputed that after the execution of the Kasunduan, Jorge sent
two letters to Dolores: one, in forming her that he did not consent to the
sale; and the other, demanding that' Dolores pay the balance of the
purchase price on or before October 5, 1996 and failing which, the
purchase price shall be increased to PhP700,000.
6
Clearly, Jorge's first letter was an outright and express repudiation of
the Kasunduan. The second letter, while ostensibly a demand for
compliance with Dolores' obligation under the Kasunduan, varied its
terms on material points, i.e., the date of payment of the balance and
the purchase price. Consequently, such counter-offer cannot be
construed as evidencing Jorge's consent to or acceptance of
the Kasunduan for it is settled that where the other spouse's putative
consent to the sale of the conjugal property appears in a separate
document which does not contain the same terms and conditions as in
the first document signed by the other spouse, a valid transaction could
not have arisen.24

Neither can Jorge's subsequent letters to Dolores be treated as a

ratification of the Kasunduan for the basic reason that a void contract is
not susceptible to ratification. Nor can Jorge's alleged participation in the
negotiation for the sale of the property or his acquiescence to Dolores'
transfer to and possession of the subject property be treated as
converting· such continuing offer into a binding contract as the law
distinctly requires nothing less than a written consent to the sale for its
validity. Suffice to say that participation in or awareness of the
negotiations is not consent. 25

As above intimated, a determination that the Kasunduan is void renders

the other issues raised by Dolores academic, i.e., whether the doctrine
of res judicata applies and whether the Spouses Cortez are buyers in
bad faith; hence they merit no further discussion .

The CA Correctly Ruled that Dolores is a Possessor in Good Faith

While the Kasunduan was void from the beginning, Dolores is, in all
fairness, entitled to recover from the Spouses Leonardo the amount of
PhP300,000 with legal Interest until fully paid.

Moreover, the CA correctly appreciated Dolores' standing as a

possessor in good faith. It appears that Dolores acted in good faith in
entering the subject property and building improvements on it. Ricardo
represented that "Jacinta and Jorge wanted to sell the subject property.
Dolores had no reason to believe that Ricardo and Jacinta were lying.
Indeed, upon her own brother's prodding, Dolores willingly parted with
her money and paid the down payment on the selling price and later, a
portion of the remaining balance. The signatures of Jacinta and of
Ricardo (as witness) as well as her successful entry to the property
appear to have comforted Dolores that everything was in order. Article
526 of the Civil Code provides that she is deemed a possessor in good
faith, who is not aware that there exists in her title or mode of acquisition
any flaw that invalidates it.

Likewise, as correctly held by the CA, Dolores, as possessor in good

faith, is under no obligation to pay for her stay on the property prior to its
legal interruption by a final judgment. She is further entitled under Article
448 to indemnity for the improvements introduced on the property with
a right of retention until reimbursement is made. The Spouses Leonardo
have the option under Article 546 of the Civil Code of indemnifying
Dolores for the cost of the improvements or paying the increase in value
which the property may have acquired by reason of such
improvements. 26

WHEREFORE, the petition is DENIED. The Decision dated October 3,

2012 and Resolution dated February 26, 2013 of the Court of Appeals
in CA G.R. CV No. 95432 which (1) declared void the Kasunduan dated
29 March 1996; (2) declared valid the title issued in the names of
Spouses Cortez and San Pedro; (3) ordered the reimbursement of
PhP300,000 with legal interest to Dolores Alejo; (3) ordered the Spouses

Leonardo, at their option, to indemnify Dolores Alejo of her expenses on

the useful improvements or pay the increase in value on the subject
property, with retention rights until indemnity is made; and (4) remanded
the case to the RTC for purposes of receiving evidence and determining
the amount of said indemnity are AFFIRMED in toto. SO ORDERED.

7
THIRD DIVISION [ G.R. No. 200612, April 05, 2017 ]
RAFAEL C. UY (CABANGBANG STORE), PETITIONER, v. ESTATE
OF VIPA FERNANDEZ, RESPONDENT.
REYES, J.:
This is a Petition for Review on Certiorari[1] under Rule 45 of the Rules
of Court seeking to annul and set aside the Decision[2] dated November
26, 2010 and Resolution[3] dated January 24, 2012 issued by the Court
of Appeals (CA) in CA-G.R. SP No. 04481.
Facts
Vipa Fernandez Lahaylahay (Vipa) is the registered owner of a parcel of
land situated in Lopez Jaena Street, Jaro, Iloilo City covered by Transfer
Certificate of Title No. T-26576 (subject property).[4] Vipa and her
husband, Levi Lahaylahay (Levi), have two children – Grace Joy
Somosierra (Grace Joy) and Jill Frances Lahaylahay (Jill Frances). [5]
Sometime in 1990, a contract of lease was executed between Vipa and
Rafael Uy (Rafael) over the subject property and the improvements
thereon, pursuant to which, Rafael bound himself to pay Vipa, as
consideration for the lease of the property, the amount of
P3,000.00 permonth, with a provision for a 10% increase every year
thereafter.[6]
On March 5, 1994, Vipa died leaving no will or testament whatsoever.
Grace Joy became the de facto administrator of the estate of Vipa. After
Vipa's death, Levi lived in Aklan.[7]
In June 1998, Rafael stopped paying the monthly rents.[8] Consequently,
on June 12, 2003, the Estate of Vipa, through Grace Joy, filed a
complaint[9] for unlawful detainer with the Municipal Trial Court in Cities
(MTCC) of Iloilo City against Rafael. It was alleged therein that, as of
June 1998, Rafael was already bound to pay rent at the amount of
P3,300.00 per month and that his last payment was made in May 1998.
Accordingly, at the time of the filing of the Complaint, Rafael's unpaid
rents amounted to P271,150.00.[10] The Estate of Vipa claimed that
despite repeated demands, Rafael refused to pay the rents due. [11]
In his Answer,[12] Rafael denied that he refused to pay the rent for the
lease of the subject property. He claimed that sometime in June 1998
Patria Fernandez-Cuenca (Patria), Vipa's sister, demanded for the
payment of the rents, claiming that she is the rightful heir of
Vipa.[13] Since he had no idea on who is entitled to receive the rent for
the subject property, he deposited the amount of P10,000.00 with the
Office of the Clerk of Court of the Regional Trial Court (RTC) of Iloilo
City on November 20, 1998 and that Grace Joy was informed of such
consignation.[14] He claimed that a case for the settlement of the Estate
of Vipa was instituted by Patria with the RTC, which was docketed as
Special Proceeding No. 6910. He averred that he is willing to pay the
rent on the leased property to the rightful heirs of Vipa and that he made
another consignation with the RTC in the amount of P6,000.00.[15]
On June 12, 2008, the MTCC rendered a Decision, [16] the decretal
portion of which reads:
WHEREFORE, in the light of the foregoing ratiocination, judgment is
hereby rendered in favor of the [Estate of Vipa] and against [Rafael],
ordering the latter, to wit:
1. to vacate the premises subject of this case and covered by
TCT No. T-26576 and to peacefully turn over the possession
of the same to the [Estate of Vipa];
2. to pay the [Estate of Vipa] the amount of Php271,150.00 as
payment for the unpaid rentals with 12% interest per annum
from the last demand on May 3, 2003 until the whole amount
is paid;
3. to pay the [Estate of Vipa] the amount of Php3,000.00 per
month with 12% interest per annum for the use and
occupancy of the premises computed from the date of the
filing of this case on June 12, 2003 until fully paid;
4. to pay the [Estate of Vipa] attorney's fees in the amount of
Php20,000.00; [and]
5. to pay the costs of suit.
SO ORDERED.[17]
The MTCC found that after Vipa's death in 1994 until 1998, Rafael was
paying the rent for the lease of the subject property to Grace Joy.[18] That
the real reason why Patria claimed to be the heir of Vipa is because she
owed Rafael money which she could not pay. Patria then charged the
debt she owes to Rafael from the monthly rent of the subject property,
an arrangement that Rafael took advantage to avoid paying Grace Joy
the monthly rents. The MTCC further opined that the consignations
made by Rafael in the total amount of P16,000.00 are not valid since
there was no prior tender of payment.[19]
On appeal, the RTC, in its Decision[20] dated April 15, 2009, reversed the
MTCC's Decision dated June 12, 2008 and, thus, dismissed the
complaint for unlawful detainer filed by the Estate of Vipa. Thus:
WHEREFORE, premises considered, the Decision appealed from is
REVERSED and SET ASIDE; and the herein complaint is hereby
DISMISSED for lack of merit; and further DISMISSING [Rafael's]
counterclaim for failure to substantiate the same.
SO ORDERED.[21]
The RTC opined that Grace Joy was actually the plaintiff in the case and
not the Estate of Vipa. It then pointed out that Grace Joy failed to bring
the dispute to the barangay for conciliation prior to filing the complaint
for unlawful detainer.[22]
The RTC further held that the MTCC erred in including the entire subject
property as part of the Estate of Vipa. The RTC explained that the
subject property was acquired by Vipa during the subsistence of her
marriage with Levi and, as such, is part of their conjugal properties. That
after Vipa's death, the conjugal partnership was terminated, entitling
Levi to one-half of the property.[23] The RTC then pointed out that Levi
sold his share in the subject property to Rafael, as evidenced by a Deed
of Sale[24] dated December 29, 2005.[25]Accordingly, the RTC ruled that
Rafael, as co-owner of the subject property, having bought Levi's one-
half share thereof, had the right to possess the same.[26]
The Estate of Vipa sought a reconsideration[27] of the Decision dated
April 15, 2009, but it was denied by the RTC in its Order dated July 28;
2009.[28]
The Estate of Vipa then filed a Petition for Review[29] with the CA. On
November 26, 2010, the CA rendered a Decision,[30] which declared:
WHEREFORE, in view of all the foregoing, the instant petition for review
is GRANTED and the April 15, 2009 Decision of the court a quo in Civil
Case No. 08-29842 is hereby REVERSED and SET ASIDE.
Accordingly, the June 12, 2008 Decision of the Municipal Trial Court,
Branch 4, Iloilo City, in Civil Case No. 03-208 is hereby REINSTATED.
SO ORDERED.[31]
The CA held that there was no necessity to bring the dispute before the
barangay for conciliation since the Estate of Vipa, being a juridical
person, cannot be impleaded to a barangay conciliation proceeding. The
CA likewise pointed out that any allegations against Grace Joy's
authority to represent the Estate of Vipa had been laid to rest when she
was appointed as administrator of the Estate of Vipa in Special
Proceedings No. 6910 pending before the RTC.[32]
Further, the CA held that Rafael raised the issue of ownership of the
subject property, i.e., Levi's sale of his one-half share in the subject
property to Rafael, only for the first time in his appeal with the RTC.
Accordingly, it was error on the part of the RTC to have resolved the
issue of ownership of the subject property. [33] Furthermore, the CA
agreed with the MTCC that Rafael's consignation of the rent to the RTC
is ineffective. It ruled that Rafael made the consignation only twice and
the amount consigned was patently insignificant compared to the
amount of rent due.[34]
Rafael's motion for reconsideration[35] was denied by the CA in its
Resolution[36] dated January 24, 2012.
Hence, the instant petition.
Rafael maintains that Grace Joy has no authority to represent the Estate
of Vipa and, when she filed the complaint for unlawful detainer with the
8
MTCC, she did so in her personal capacity. Thus, Rafael claims that the
dispute should have been brought to the barangay for conciliation before
the complaint was filed in the MTCC.[37] He further claims that the CA
erred in . reversing the RTC's ruling on the issue of ownership of the
subject property. He insists that he already purchased Levi's one-half
share in the subject property.[38]
On the other hand, the Estate of Vipa, in its Comment,[39] avers that the
supposed lack of authority of Grace Joy to file the complaint for unlawful
detainer and the ownership of the subject property were never raised in
the proceedings before the MTCC and, hence, could not be passed
upon by the RTC in the appellate proceedings. In any case, it pointed
out that the RTC's Decision[40] dated October 28, 2005 in Special
Proceedings No. 6910, which appointed Grace Joy as the administrator
of the intestate estate of Vipa, recognized that the latter and Jill Frances
are legitimate children of Vipa and Levi.
Issue
Essentially, the issue set forth for the Court's resolution is whether the
CA erred in reversing the RTC's Decision dated April 15, 2009.
Ruling of the Court
The petition is partly meritorious.
Rafael's claim that the complaint below should have been dismissed
since Grace Joy has no authority to represent the Estate of Vipa and
that there was lack of prior barangay conciliation is untenable. Unlawful
detainer cases are covered by the Rules on Summary
Procedure.[41] Section 5 of the 1991 Revised Rules on Summary
Procedure provides that affirmative and negative defenses not pleaded
in the answer shall be deemed waived, except lack of jurisdiction over
the subject matter.
Rafael failed to plead in the answer he filed with the MTCC that Grace
Joy has no authority to represent the Estate of Vipa. Neither did he raise
therein the lack of barangay conciliation between the parties herein prior
to the filing of the complaint for unlawful detainer. Accordingly, the
foregoing defenses are already deemed waived.
In any case, the issue of the supposed lack of authority of Grace Joy to
represent the Estate of Vipa had already been rendered moot with the
RTC's appointment of Grace Joy as the administrator of the Estate of
Vipa in Special Proceedings No. 6910.
Also, there was no need to refer the dispute between the parties herein
to the barangay for conciliation pursuant to the Katarungang
Pambarangay Law.[42] It bears stressing that only individuals may be
parties to barangay conciliation proceedings either as complainants or
respondents. Complaints by or against corporations, partnerships or
other juridical entities may not be filed with, received or acted upon by
the barangay for conciliation.[43] The Estate of Vipa, which is the
complainant below, is a juridical entity that has a personality, which is
separate and distinct from that of Grace Joy.[44] Thus, there is no
necessity to bring the dispute to the barangay for conciliation prior to
filing of the complaint for unlawful detainer with the MTCC.
The CA, nevertheless, erred in hastily dismissing Rafael's allegation as
regards the ownership of the subject property. In disregarding Rafael's
claim that he owns Levi's one-half undivided share in the subject
property, the CA ruled that the said issue was raised for the first time on
appeal and should thus not have been considered by the RTC, viz.:
On the second issue, the records show that [Rafael] raised the issue of
ownership only for the first time on appeal; hence, the [RTC] erred in
deciding the appeal before it on the findings that part of the subject
premises is owned by petitioners, allegedly having bought the same
from [Levi], the husband of [Vipa].
The Court is not unmindful that in forcible entry and unlawful detainer
cases, the MTC may rule on the issue [of] ownership in order to
determine the issue of possession. However, the issue of ownership
must be raised by the defendant on the earliest opportunity; otherwise,
it is already deemed waived. Moreover, the instant case was covered by
the Rules on Summary Procedure, which expressly provide that
affirmative and negative defenses not pleaded therein shall be deemed
waived, except for lack of jurisdiction over the subject matter. Thus, the
[RTC] erred in resolving the issue of ownership for the first time on
appeal.[45] (Citations omitted)
It is true that fair play, justice, and due process dictate that parties should
not raise for the first time on appeal issues that they could have raised
but never did during trial. However, before a party may be barred from
raising an issue for the first time on appeal, it is imperative that the issue
could have been raised during the trial.[46] What escaped the appellate
court's attention is that the sale of the one-half undivided share in the
subject property to Rafael was consummated only on December 29,
2005, more than two years after Rafael filed with the MTCC his answer
to the complaint for unlawful detainer on July 18, 2003. [47] Obviously,
Rafael could not have raised his acquisition of Levi's share in the subject
property as an affirmative defense in the answer he filed with the MTCC.
Moreover, Rafael's ownership of the one-half undivided share in the
subject property would necessarily affect the property relations between
the parties herein. Thus, the CA should have exerted efforts to resolve
the said issue instead of dismissing the same on the flimsy ground that
it was not raised during the proceedings before the MTCC.
Levi and Vipa were married on March 24, 1961[48] and, in the absence
of a marriage settlement, the system of conjugal partnership of gains
governs their property relations.[49] It is presumed that the subject
property is part of the conjugal properties of Vipa and Levi considering
that the same was acquired during the subsistence of their marriage and
there being no proof to the contrary.[50]
When Vipa died on March 5, 1994, the conjugal partnership was
automatically terminated.[51] Under Article 130 of the Family Code, the
conjugal partnership property, upon its dissolution due to the death of
either spouse, should be liquidated either in the same proceeding for the
settlement of the estate of the deceased or, in the absence thereof, by
the surviving spouse within one year from the death of the deceased
spouse. That absent any liquidation, any disposition or encumbrance of
the conjugal partnership property is void. Thus:
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 extra-judicially within six months 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.
Should the surviving spouse contract a subsequent marriage without
compliance with the foregoing requirements, a mandatory regime of
complete separation of property shall govern the property relations of
the subsequent marriage. (Emphasis ours)
Article 130 of the Family Code is applicable to conjugal partnership of
gains already established between the spouses prior to the effectivity of
the Family Code pursuant to Article 105 thereof, viz.:
Article 105. In case the future spouses agree in the marriage settlements
that the regime of conjugal partnership of gains shall govern their
property relations during marriage, the provisions in this Chapter shall
be of supplementary application.
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. (Emphasis ours)
Rafael bought Levi's one-half share in the subject property in
consideration of P500,000.00 as evidenced by the Deed of Sale[52] dated
December 29, 2005. At that time, the conjugal partnership properties of
Levi and Vipa were not yet liquidated. However, such disposition,
notwithstanding the absence of liquidation of the conjugal partnership
properties, is not necessarily void.
It bears stressing that under the regime of conjugal partnership of gains,
the husband and wife are co-owners of all the property of the conjugal
partnership.[53] Thus, upon the termination of the conjugal partnership of
gains due to the death of either spouse, the surviving spouse has an
actual and vested one-half undivided share of the properties, which does
9
not consist of determinate and segregated properties until liquidation
and partition of the conjugal partnership.[54] With respect, however, to
the deceased spouse's share in the conjugal partnership properties, an
implied ordinary co-ownership ensues among the surviving spouse and
the other heirs of the deceased.[55]
Thus, upon Vipa's death, one half of the subject property was
automatically reserved in favor of the surviving spouse, Levi, as his
share in the conjugal partnership. The other half, which is Vipa's share,
was transmitted to Vipa's heirs – Grace Joy, Jill Frances, and her
husband Levi, who is entitled to the same share as that of a legitimate
child. The ensuing implied co-ownership is governed by Article 493 of
the Civil Code, which 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. (Emphasis ours)
Although Levi became a co-owner of the conjugal partnership properties
with Grace Joy and Jill Frances, he could not yet assert or claim title to
any specific portion thereof without an actual partition of the property
being first done either by agreement or by judicial decree. Before the
partition of a land or thing held in common, no individual or co-owner
can claim title to any definite portion thereof. All that the co-owner has is
an ideal or abstract quota or proportionate share in the entire land or
thing.[56]
(2) Where the defendant's act or omission has compelled the plaintiff to
litigate with third persons or to incur expenses to protect his interest[.]
Certainly, because of Rafael's unjustified refusal to pay the rents due on
the lease of the subject prope1iy, the Estate of Vipa was put to
unnecessary expense and trouble to protect its interest under paragraph
(2), Article 2208 of the Civil Code. In unlawful detainer cases, where
attorney's fees are awarded, the same shall not exceed P20,000.00. [59]
WHEREFORE, in view of the foregoing disquisitions, the petition for
review on certiorari is PARTIALLY GRANTED. The Decision dated
November 26, 2010 and Resolution dated January 24, 2012 issued by
the Court of Appeals in CA-G.R. SP No. 04481 are
hereby REVERSED and SET ASIDE. Petitioner Rafael C. Uy is hereby
directed to pay the Estate of Vipa Fernandez the following:
1. The amount of P271,150.00, representing the unpaid rentals,
with interest at the rates of twelve percent (12%) per annum
from the date of the last demand on May 3, 2003 until June
30, 2013, and six percent (6%) per annum from July 1, 2013
until fully paid;
2. Reasonable rent for the use and occupancy of the subject
property from May 2003 until December 28, 2005 at the rate
of P3,000.00 per month with interest at the rates of twelve
percent (12%) per annum from the date of the last
demand, i.e., the filing of the complaint for unlawful detainer
on June 12, 2003, until June 30, 2013, and six percent
(6%) per annum from July 1, 2013 until fully paid; and
3. The amount of P20,000.00 as attorney's fees.

Nevertheless, a co-owner could sell his undivided share; hence, Levi SO ORDERED.
had the right to freely sell and dispose of his undivided interest. Thus,
the sale by Levi of his one-half undivided share in the subject property
was not necessarily void, for his right as a co-owner thereof was
effectively transferred, making the buyer, Rafael, a co-owner of the
subject property. It must be stressed 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).[57]

However, Rafael became a co-owner of the subject property only on

December 29, 2005 – the time when Levi sold his one-half undivided
share over the subject property to the former. Thus, from December 29,
2005 Rafael, as a co-owner, has the right to possess the subject
property as an incident of ownership. Otherwise stated, prior to his
acquisition of Levi's one-half undivided share, Rafael was a mere lessee
of the subject property and is thus obliged to pay the rent for his
possession thereof.

Accordingly, Rafael could no longer be directed to vacate the subject

property since he is already a co-owner thereof. Nevertheless, Rafael is
still bound to pay the unpaid rentals from June 1998 until April 2003 in
the amount of P271,150.00. In Nacar v. Gallery Frames, et al.,[58] the
Court pointed out that pursuant to Resolution No. 796 of the Bangko
Sentral ng Pilipinas Monetary Board, the interest rate of loans or
forbearance of money, in the absence of stipulation shall be six percent
(6%) effective only from July 1, 2013. Thus, prior to July 1, 2013, the
rate of interest on loans or forbearance of money, in the absence of
stipulation, is still 12%. Accordingly, the amount of P271,150.00,
representing the unpaid rentals shall earn interest at the rates of
12% per annum from the date of the last demand on May 3, 2003 until
June 30, 2013 and 6% per annum from July 1, 2013 until fully paid.

Further, Rafael is likewise bound to pay reasonable rent for the use and
occupancy of the subject property from May 2003 until December 28,
2005 at the rate of P3,000.00 per month with interest at the rate of
12% per annum from the date of the last demand, i.e., the filing of the
complaint with the MTCC on June 12, 2003, until June 30, 2013 and
6% per annum from July 1, 2013 until fully paid.

The award of attorney's fees of P20,000.00 is likewise proper. Attorney's

fees can be awarded in the cases enumerated in Article 2208 of the Civil
Code, specifically:

Article 2208. x x x

xxxx

10
G.R. No. 200969, August 03, 2015
CONSOLACION D. ROMERO AND ROSARIO S.D.
DOMINGO, Petitioners, v. ENGRACIA D. SINGSON, Respondent.
DECISION
DEL CASTILLO, J.:
This Petition for Review on Certiorari1 seeks to set aside the February
29, 2012 Decision2 of the Court of Appeals (CA) in CA-G.R. SP No.
114363 which granted herein respondent's Petition for Review,
reversed the December 11, 2009 Order3 of the Regional Trial Court of
Pasig City, Branch 160 (RTC) in SCA No. 3144, and reinstated the
said RTC's April 29, 2009 Decision.4
Factual Antecedents
The parties herein - petitioners Consolacion Domingo Romero and
Rosario S.D. Domingo and respondent Engracia Domingo Singson -
are siblings. Their parents, Macario and Felicidad Domingo, own a
223-square meter piece of property (the subject property) located at
127 F. Sevilla Street, San Juan City, Metro Manila covered by Transfer
Certificate of Title No. (32600) (23937) 845-R5 (TCT 845-R) which was
issued in 1953. It appears that petitioners and other siblings, Rafael
and Ramon Domingo, are the actual occupants of the subject property,
having stayed there with their parents since birth. On the other hand,
respondent took up residence in Mandaluyong City after getting
married.
On February 22, 1981, Macario passed away, while Felicidad died on
September 14, 1997.6
On June 7, 2006, TCT 845-R was cancelled and a new certificate of
title -Transfer Certificate of Title No. 12575-R7 or 125758 (TCT 12575) -
was issued in respondent's name, by virtue of a notarized "Absolute
Deed of Sale"9 ostensibly executed on June 6, 2006 by and between
Macario and Felicidad - as sellers, and respondent - as buyer. And this
despite the fact that Macario and Felicidad were then already
deceased.
Soon thereafter, respondent sent letters to her siblings demanding that
they vacate the subject property, under pain of litigation.
Petitioners and their other siblings just as soon filed a
Complaint10 against respondent and the Register of Deeds of San Juan
City for annulment and cancellation of TCT 12575 and the June 6,
2006 deed of sale, reconveyance, and damages, on the claim that the
deed of sale is a forgery and that as heirs of Macario and Felicidad, the
true owners of the subject property, they were entitled to a
reconveyance of the same. The case was docketed as Civil Case No.
70898-SJ and assigned to Branch 160 of the RTC of Pasig City.
Ruling of the Metropolitan Trial Court (MeTC)
On September 26, 2006, respondent filed an unlawful detainer suit
against petitioners and her brothers Rafael and Ramon before the
MeTC of San Juan City. Docketed as Civil Case No. 9534 and
assigned to MeTC Branch 58, respondent in her Complaint 11 sought to
evict her siblings from the subject property on the claim that she is the
owner of the same; that her siblings' stay therein was merely tolerated;
and that she now needed the premises to serve as her daughters'
residence. Thus, she prayed that her siblings be ordered to vacate the
premises and pay monthly rent of P2,000.00 from date of demand until
they vacate the premises, as well as attorney's fees and costs of suit.
In their Answer,12 petitioners prayed for dismissal, claiming that the
June 6, 2006 deed of sale was a forgery, and no certificate of title in
her name could be issued; that they thus remained co-owners of the
subject property, and respondent had no right to evict them; and that
the pendency of Civil Case No. 70898-SJ bars the ejectment suit
against them.
After proceedings or on September 17, 2007, the MeTC rendered a
Decision,13 decreeing as follows:
chanRoblesvirtualLawlibrary
Anent the first issue of jurisdiction, the Court answers in the affirmative
xxx.
xxxx
From the above-quoted verse, the Metropolitan Trial Courts, Municipal
Trial Courts and Municipal Circuit Trial Courts have the exclusive
original jurisdiction over this case. Moreover, in the case of Hilario vs.
Court of Appeals, (260 SCRA 420,426 citing: Refugia, Et al[.] vs. Court
of Appeals, Et al[.,] G.R. No. 118284, July 4, 1996) the Supreme Court
held: 'xxx inferior courts retain jurisdiction over ejectment cases even if
the question of possession cannot be resolved without passing upon
the issue of ownership; but this is subject to the caveat that the issue
raised as to ownership be resolved by the Trial Court for the sole
purpose of determining the issue of possession x x x.' Thus, even
where the defendants assert in their Answer, ownership of or Title to
the property, the inferior Court is not deprived of its jurisdiction, xxx
xxxx
As to the second issue as to whether or not plaintiff may validly eject
the defendants, again this Court answers in the affirmative, since the
plaintiff is a holder of a Torrens Title which is a right in rem. The
defendants in their defense that they have filed a case before the
Regional Trial Court questioning the Title of the plaintiff is their right
and prerogative, unless however restrained by higher court, this Court
will proceed as mandated by law and jurisprudence. This action for
unlawful detainer is sanctioned by Rule 70 of the 1997 Rules of Civil
Procedure which provides:
xxxx
While the defendants claim that their parents are still the owner[s] of
the subject property in litigation and during their lifetime have not
awarded nor alienated said property to anybody, why then has plaintiff
the Title of said property? If it was secured fraudulently, the same is of
no moment since it has its own forum to address to [sic]. Moreover, the
pendency of an action questioning the ownership of the property does
not bar the filing or consideration of an ejectment suit nor the execution
of the judgment therein xxx. As correctly pointed out by the plaintiff,
'ownership may be exercised over things or rights,' Art. 427 of the New
Civil Code. Likewise, Art. 428 of the same code provides that: 'the
owner has the right to enjoy and dispose of a thing, without other
limitations than those established by law. The owner has also a right of
action against the holder and possessor of the thing in order to recover
it.' Further, Art. 434 states that 'in an action to recover, the property
must be identified, and the plaintiff must rely on the strength of his Title
and not on the weakness of the defendant's claim.' The defendants
therefore can be validly ejected from the premises in question since
this is not accion publiciana as claimed by the defendants.
Finally, on the third issue of damages and the side issue of reasonable
compensation for the use of the subject premises, the Supreme Court
in the case of Balanon-Anicete vs. Balano, 402 SCRA 514 held: 'xxx
persons who occupy the land of another at the latter's tolerance or
permission without any contract between them [are] necessarily bound
by an implied promise that they will vacate the same upon demand,
failing in which a summary action for ejectment is the proper remedy
against them.' Hence, upon demand, plaintiff is entitled to collect
reasonable compensation for the actual occupation of the subject
property which is P2,000.00 per month and the payment of attorney's
fees. Since no evidence was presented relative to damages, the Court
cannot award the same.
WHEREFORE, premises considered, judgment is hereby rendered as
follows:
1. Ordering the defendants and all persons claiming rights under them
to vacate the subject property known as No. 127 F. Sevilla St., San
Juan, Metro Manila and to surrender peaceful possession thereof to
the plaintiff in this case;
2. Ordering the defendants to pay plaintiff the amount of P2,000.00 per
11
month for the actual use and occupation of the subject property The court a quo is correct in ruling that it has jurisdiction over this case,
reckoned from date of extrajudicial demand which is August 7, 2006, the allegations in the complaint being so phrased as to present one
until defendants shall have finally vacated the premises; apparently for unlawful detainer. It did not matter that after answers were
filed and further proceedings were had, what emerged were issues of
3. Ordering the defendants to pay plaintiff the amount of P10,000.00 as ownership and possession being intricately interwoven, the court being
and by way of attorney's fees; and clothed with jurisdiction to provisionally adjudicate the issue of
ownership, it being necessary in resolving the question of possession.
4. The costs of suit.
2.2. The Issue of Whether or Not Plaintiff Can Eject Defendants
SO ORDERED.14
In Barnachea vs. Court of Appeals, et al., it was held that one of the
features of an unlawful detainer case is possession of property by
Ruling of the Regional Trial Court
defendant being at the start legal, becoming illegal by reason of the
termination of right to possess based on his contract or other
In an appeal before the RTC docketed as SCA Case No. 3144,
arrangement with plaintiff.
petitioners and their co-defendants argued that the MeTC erred in not
resolving the issue of ownership, in ordering them to vacate the
hi this case, the legal possession of subject premises by defendants-
premises, in deciding issues which were not framed by the parties, and
appellants, they being the heirs of original owners Macario and Felicidad
in not granting them damages and awarding the same instead to
Domingo, has not ceased. The basis for the claimed ownership by
respondent.
plaintiff-appellee is a deed of absolute sale dated 06 June 2006 (Exhibit
"2") showing the signatures of vendor Sps. Domingo whose respective
On April, 29, 2009, the RTC rendered its Decision, 15 pronouncing as
death certificates indicate that Macario died on 22 February 1981 and
follows:
Felicidad on 14 September 1997. It is clear that the deed of sale became
chanRoblesvirtualLawlibrary
the basis for the transfer of subject property in plaintiff-appellee's name
Stripped of its non-essentials, the appeal primarily hinges on the lower
under TCT No. 12575 (Exhibit "A"), a fact that prompted herein
court's failure to rule upon the issue on the validity of Transfer Certificate
defendants-appellants to file a complaint for annulment of sale and
of Title No. 12575 of the lot, subject of the ejectment suit.
reconveyance of ownership, docketed as Civil Case No. 70898-SJ
earlier than this subject case.
Upon a judicious consideration of the arguments raised by the parties in
their respective memorandum vis-a-vis the decision of the court a quo,
It appearing that defendants-appellants' occupancy of subject property
this court opines and so holds that the said court did not err in its
is premised on their right thereto as co-owners, being compulsory heirs
findings. The validity of a transfer certificate of title cannot be raised in
of their parents, and it not being established that they had alienated such
the said ejectment suit as it partakes of a collateral attack against the
right in favor of their sister, herein plaintiff-appellee, the latter cannot
said title. This is not allowed under the principle of indefeasibility of a
eject them therefrom.
Torrens title. The issue on the validity of title i.e., whether or not it was
fraudulently issued, can only be raised in an action expressly instituted
2.3. The Issue of Whether or Not Defendants are Entitled to Damages
for that purpose.
While defendants Rafael and Ramon Domingo allege and pray for actual
The ruling of the Supreme Court in the case of Raymundo and Perla De
and moral damages and attorney's fees in their answer and all [the]
Guzman vs. Praxides J. Agbagala, G.R. No. 163566, February 19, 2008
defendants do so in their position paper, the court can award only the
is revelatory, thus:
last, it being established that they were compelled to litigate to protect
chanRoblesvirtualLawlibrary
their right, and such award being just and equitable. As for actual and
'Indeed, a decree of registration or patent and the certificate of title
moral damages, there is no sufficient basis for a grant thereof. It is noted
issued pursuant thereto may be attacked on the ground of falsification
that not a single affidavit of any of the four defendants is attached to their
or fraud within one year from the date of their issuance. Such an attack
position paper, as required under Section 10, Rule 70, Rules of Civil
must be direct and not by a collateral proceeding. The rationale is this:
Procedure, and Section 9, Revised Rule on Summary Procedure.
xxx [The] public should be able to rely on the registered title. The Torrens
WHEREFORE, the foregoing considered, the court hereby grants the
System was adopted in this country because it was believed to be the
motion for reconsideration of its decision on appeal affirming in toto the
most effective measure to guarantee the integrity of land titles and to
decision of the Metropolitan Trial Court, Branch 58, San Juan City.
protect their indefeasibility once the claim of ownership is established
Consequently, it hereby reverses said decision by decreeing that
and recognized.'
plaintiff-appellee has no cause of action against herein defendants-
For reasons aforestated, the appeal is hereby DENIED.
appellants who are entitled to possession of the subject premises,
rendering the complaint dismissible and hereby dismisses it. Corrolarily,
WHEREFORE, premises considered, judgment is hereby rendered
plaintiff-appellee's motion for execution is hereby denied. Plaintiff-
affirming in toto in [sic] the decision of the lower court dated September
appellee is hereby ordered to pay defendants-appellants P8,000.00
17, 2007.
each in attorney's fees. Costs against plaintiff-appellee.
With costs against the appellant.
SO ORDERED.18cralawlawlibrary
Respondent filed a Motion for Reconsideration,19 which the RTC denied
SO ORDERED.16cralawlawlibrary
in a subsequent Order20 dated May 17, 2010. The trial court held:
On motion for reconsideration, however, the RTC reversed itself. Thus,
chanRoblesvirtualLawlibrary
in a December 11, 2009 Order,17it held that -
In essence, plaintiff argues that possession and not ownership should
chanRoblesvirtualLawlibrary
have been the central issue in this appealed ejectment suit. As the
subject property is titled in plaintiffs name, necessarily, she has better
2. This Court's Findings
right of possession than defendants.
At the outset, it should be mentioned that the court a quo should have
The court is not persuaded. Germane is Section 16, Rule 70 of the 1997
dismissed the complaint outright for failure to comply with a condition
Rules of Civil Procedure, to wit:
precedent under Section 10, Rule 16 of the Rules of Civil Procedure, the
chanRoblesvirtualLawlibrary
parties being siblings and there being no allegations in the complaint as
Section 16. Resolving defense of ownership. - When the defendant
regards efforts at compromise having been exerted, a matter that was
raises the defense of ownership in his pleadings and the question of
raised in the answer of defendants Consolation Romero and Rosario D.
possession cannot be resolved without deciding the issue of ownership,
Domingo.
the issue of ownership shall be resolved only to determine the issue of
possession.
2.1. The Issue of MeTC Jurisdiction

12
Having determined the ownership issue in resolving defendants' right of is, however, merely provisional and would not bar or prejudice an action
possession pursuant to the aforestated rule, the court hereby finds no between the same parties involving title to the property. Since the issue
cogent reason or sufficient justification to reconsider its previous ruling of ownership was raised in the unlawful detainer case, its resolution boils
dated 11 December 2009. down to which of the parties' respective evidence deserves more
weight.'
WHEREFORE, the motion for reconsideration is hereby DENIED for In the case at bar, both petitioner and respondents are claiming
lack of merit. ownership over the subject lot. On the part of petitioner, she maintains
that she has a right to possession because she is the registered owner
SO ORDERED.21cralawlawlibrary thereof, as evidenced by TCT No. 12575-R which was issued in her
chanroblesvirtuallawlibrary Ruling of the Court of Appeals name in 2006. On the other hand, respondents maintain that they
cannot be ejected from the subject lot because they are the
Respondent filed a Petition for Review22 with the CA, docketed as CA- compulsory heirs of their deceased parents under whose names the
G.R. SP No. 114363. On February 29, 2012, the CA rendered judgment, subject lot was registered, as shown in TCT No. 845-R.
as follows:
chanRoblesvirtualLawlibrary As between the two parties, this Court rules in favor of petitioner for
Petitioner seeks to reverse and set aside the assailed Orders since the she holds a more recently-issued certificate of title, i.e., 2006, than that
RTC allegedly erred: of their deceased parents whose certificate of title was issued in 1953.
chanRoblesvirtualLawlibrary The issuance of the certificate of title in 2006 may be traced from TCT
'I. No. 845-R wherein at the last page of its Memorandum of
[E]ncumbrances is an entry which explicitly states that the title was
IN RULING THAT THE RESPONDENTS CANNOT BE EJECTED transferred to the name of petitioner on June 6, 2006 for a
FROM THE SUBJECT PREMISES, THEIR OCCUPANCY BEING consideration of Php1,000.000.00. Clearly, the certificate of title of the
PREMISED ON THEIR RIGHT AS CO-OWNERS, BEING deceased parents was effectively cancelled in favor of petitioner.
COMPULSORY HEIRS OF THEIR [PETITIONER] PARENTS AND IT Hence, petitioner has a better right to the possession de facto of the
NOT BEING ESTABLISHED THAT THEY HAD ALIENATED SUCH subject lot for, as held in Asuncion Urieta Vda. de Aguilar vs. Alfaro,
RIGHT IN FAVOR OF THE PETITIONER. 'the titleholder is entitled to all the attributes of ownership of the
property, including possession.'
II.
Respondents' insistence that the Torrens Certificate of petitioner
IN RULING THAT THE RESPONDENTS ARE ENTITLED TO THE should not be given any probative weight because it is null and void is
AWARD OF ATTORNEY'S FEES.' of no moment. The validity of a certificate of title cannot be collaterally
This Court's Ruling attacked. Rather, the attack should be made in an action instituted
mainly for that purpose, x x x
Contending that the RTC erred when it held that respondents cannot
be ejected from the subject lot because they are co-owners thereof xxxx
and heirs of their deceased parents, petitioner points out that the only
issue that should be tackled in an unlawfol detainer case is the right of In short, a Torrens Certificate is evidence of the indefeasibility of the
a plaintiff to possession de facto over the property in question. title to the property and the person whose name appears therein is
entitled to the possession of the property unless and until his title is
For their part, respondents argue that they have legal and actual nullified. The reason being that the Torrens System was adopted as it
possession of the subject lot as they are the heirs of their deceased is the most effective measure that will guarantee the integrity of land
parents who are the registered owners of said subject lot. On the other titles and protect their indefeasibility once the claim of ownership is
hand, the title to the subject lot that was registered under petitioner's established and recognized. Hence, the age-old rule that 'the person
name is null and void for it was issued based on a forged deed of who has a Torrens Title over a land is entitled to possession thereof.'
absolute sale.
Unless there is already a judgment declaring petitioner's certificate of
The petition has merit. title as null and void, the presumption of its validity must prevail, x x x

In an unlawful detainer case, the defendant's possession of a property xxxx

becomes illegal when he is demanded by the plaintiff to vacate
therefrom due to the expiration or termination of his right to possess All said, petitioner's right to possession over the subject lot must be
the same under the contract but the defendant refuses to heed such respected in view of the certificate of title thereto issued in her name.
demand. Thus, the sole issue to be resolved is who between the
parties have [sic] a right to the physical or material possession of the WHEREFORE, the petition is GRANTED. The assailed Orders of the
property involved, independently of any claim of ownership by any of Regional Trial Court, Pasig City, Branch 160 are REVERSED and SET
the parties. ASIDE. Its Decision dated April 29, 2009 affirming the Decision dated
September 17, 2007 of the Metropolitan Trial Court, San Juan City,
However, where the issue of ownership is raised by any of the parties, Branch 58 is REINSTATED.
the rule in Sec. 16, Rule 70 of the Revised Rules of Court is explicit:
chanRoblesvirtualLawlibrary SO ORDERED.23cralawlawlibrary
Section 16. Resolving defense of ownership. - When the defendant Hence, the instant Petition.
raises the defense of ownership in his pleadings and the question of
possession cannot be resolved without deciding the issue of ownership, In a July 10, 2013 Resolution,24 this Court resolved to give due course
the issue of ownership shall be resolved only to determine the issue of to the Petition.chanrobleslaw
possession.
In other words, while only possession de facto is the issue to be Issues
determined in an ejectment case, the issue of ownership may be tackled
if raised by any of the parties and only for the purpose of reaching a Petitioners raise the following issues for resolution:
conclusion on the issue of possession. Thus, in Esmaquel vs. Coprada, chanRoblesvirtualLawlibrary
the Supreme Court had the occasion to once again hold that: A
chanRoblesvirtualLawlibrary
'The sole issue for resolution in an unlawful detainer case is physical or THE COURT OF APPEALS (TWELFTH DIVISION) OBVIOUSLY
material possession of the property involved, independent of any claim ERRED IN FAILING TO DISMISS THE COMPLAINT (ANNEX H)
of ownership by any of the parties. Where the issue of ownership is BECAUSE IT DID NOT COMPLY WITH THE JURISDICTIONAL
raised by any of the parties, the courts may pass upon the same in order ELEMENT REQUIRED BY LAW (SEC. 3, RULE 8, REVISED RULE OF
to determine who has the right to possess the property. The adjudication COURT).

13
B Procedure,32 the issue of ownership may be resolved only to determine
THE DECISION GRAVELY ERRED IN NOT HAVING RULED THAT
RESPONDENT'S CAUSE OF ACTION IN HER EJECTMENT
COMPLAINT (ANNEX H) IS INDISPENSABLY INTERTWINED WITH
THE ISSUE OF OWNERSHIP RAISED BY PETITIONERS' DEFENSE,
THUS RENDERING SAID COMPLAINT NOT AN UNLAWFUL
DETAINER CASE OVER WHICH THE MeTC HAS JURISDICTION, AS
DECIDED IN THE ORDER DATED DECEMBER 9, 2009 (ANNEX X).
C When the deed of sale in favor of respondent was purportedly
THE DECISION IS SERIOUSLY MISTAKEN IN NOT HAVING UPHELD
THE AWARD OF DAMAGES BY JUDGE MYRNA Y. LM-VERANO IN
FAVOR OF DEFENDANTS AND AGAINST RESPONDENT WHO
OBVIOUSLY OBAINED HER TITLE (ANNEX F) USING AN
UNDISPUTABLY FRAUDULENT DEED OF ABSOLUTE SALE (ANNEX
G).
D And while it is true that respondent has in her favor a Torrens title over
THE DECISION INCORRECTLY RULED THAT PETITIONERS IN
RAISING OWNERSHIP AS THEIR DEFENSE (SEC. 16 IN RELATION
TO SEC. 18, RULE 70, REVISED RULES OF COURT) CONSTITUTE
A COLLATERAL ATTACK ON THE TITLE OF RESPONDENT
OBVIOUSLY AND UNDENIABLY PROCURED THRU
FRAUD.25cralawlawlibrary
Petitioners' Arguments
In their Petition and Reply26 seeking reversal of the assailed CA
dispositions and reinstatement of the RTC's December 11, 2009 Order
dismissing respondent's ejectment case, petitioners essentially argue
that since the parties to the case are siblings and no attempt at
compromise was made by the respondent prior to the filing of Civil Case
No. 9534, then it should be dismissed for failure to comply with Rule 16,
Section 1(j) of the 1997 Rules of Civil Procedure27 in relation to Article
151 of the Family Code28 and Article 222 of the Civil Code;29 that they
could not be evicted from the subject property since they are co-owners
of the same, having inherited it from their deceased parents; that
respondent's title was derived from a forged deed of sale, which does
not make her the sole owner of the subject property; that as co-owners
and since respondent's title is void, they have a right of possession over
the subject property and they may not be evicted therefrom; that their
defense that respondent obtained her title through a forged deed of sale
does not constitute a collateral attack on such title, but is allowed in order
to prove their legal right of possession and ownership over the subject
property.
Respondent's Arguments
In her Comment30 seeking denial of the Petition, respondent claims that
the Petition should have been dismissed since only two of the
respondents in CA-G.R. SP No. 114363 filed the Petition before this
Court; that the findings of the CA do not merit review and modification,
the same being correct; and that the Petition is a mere reiteration of
issues and arguments already passed upon exhaustively below.
Our Ruling
The Court grants the Petition.
The procedural issue of lack of attempts at compromise should be
resolved in respondent's favor. True, no suit between members of the
same family shall prosper unless it should appear from the verified
complaint or petition that earnest efforts toward a compromise have
been made. However, the failure of a party to comply with this
condition precedent is not a jurisdictional defect. If the opposing party
fails to raise such defect in a motion to dismiss, such defect is deemed
waived.31
hi arriving at its pronouncement, the CA passed upon the issue or
claim of ownership, which both parties raised. While the procedure
taken is allowed -under Section 16, Rule 70 of the 1997 Rules of Civil
the issue of possession - the CA nonetheless committed serious and
patent error in concluding that based solely on respondent's TCT
12575 issued in her name, she must be considered the singular owner
of the subject property and thus entitled to possession thereof-
pursuant to the principle that "the person who has a Torrens Title over
a land is entitled to possession thereof."33 Such provisional
determination of ownership should have been resolved in petitioners'
favor.
executed by the parties thereto and notarized on June 6, 2006, it is
perfectly obvious that the signatures of the vendors therein, Macario
and Felicidad, were forged. They could not have signed the same,
because both were by then long deceased: Macario died on February
22, 1981, while Felicidad passed away on September 14, 1997. This
makes the June 6, 2006 deed of sale null and void; being so, it is
"equivalent to nothing; it produces no civil effect; and it does not
create, modify or extinguish a juridical relation."34
the subject property, she nonetheless acquired no right or title in her
favor by virtue of the null and void June 6, 2006 deed. "Verily, when
the instrument presented is forged, even if accompanied by the
owner's duplicate certificate of title, the registered owner does not
thereby lose his title, and neither does the assignee in the forged deed
acquire any right or title to the property."35
In sum, the fact that respondent has in her favor a certificate of title is
of no moment; her title cannot be used to validate the forgery or cure
the void sale. As has been held in the past:
chanRoblesvirtualLawlibrary
Insofar as a person who fraudulently obtained a property is
concerned, the registration of the property in said person's name
would not be sufficient to vest in him or her the title to the property.
A certificate of title merely confirms or records title already existing
and vested. The indefeasibility of the Torrens title should not be
used as a means to perpetrate fraud against the rightful owner of
real property. Good faith must concur with registration because,
otherwise, registration would be an exercise in futility. A Torrens title
does not furnish a shield for fraud, notwithstanding the long-
standing rule that registration is a constructive notice of title
binding upon the whole world. The legal principle is that if the
registration of the land is fraudulent, the person in whose name the land
is registered holds it as a mere trustee.36 (Emphasis supplied)
Since respondent acquired no right over the subject property, the same
remained in the name of the original registered owners, Macario and
Felicidad. Being heirs of the owners, petitioners and respondent thus
became, and remain co-owners - by succession - of the subject property.
As such, petitioners may exercise all attributes of ownership over the
same, including possession - whether de facto or dejure; respondent
thus has no right to exclude them from this right through an action for
ejectment.
With the Court's determination that respondent's title is null and void, the
matter of direct or collateral attack is a foregone conclusion as well. "An
action to declare the nullity of a void title does not prescribe and is
susceptible to direct, as well as to collateral, attack;"37 petitioners were
not precluded from questioning the validity of respondent's title in the
ejectment case.
It does not appear either that petitioners are claiming exclusive
ownership or possession of the subject property. Quite the contrary, they
acknowledge all this time that the property belongs to all the Domingo
siblings in co-ownership. In the absence of an allegation - or evidence -
that petitioners are claiming exclusive ownership over the co-owned
property, respondent has no alternative cause of action for ejectment
which should prevent the dismissal of Civil Case No. 9534. The
pronouncement in a previous case applies here:
chanRoblesvirtualLawlibrary
True it is that under Article 487 of the Civil Code,38 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
14
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.39cralawlawlibrary
Indeed, it is respondent who is claiming exclusive ownership of the
subject property owned in common.
Thus, left with no cause of action for ejectment against petitioners,
respondent's ejectment case must be dismissed.
There is likewise no merit to respondent's argument that since only two
of the defendants in the ejectment case filed the instant Petition, the
same must necessarily be dismissed. There is no rule which requires
that all the parties in the proceedings before the CA must jointly take
recourse with this Court or else such recourse would be dismissible. The
fact that Ramon and Rafael did not join in the instant Petition does not
bar petitioners from pursuing their case before this Court. Moreover,
since petitioners, Ramon and Rafael are siblings, co-heirs, co-owners,
and occupants of the subject property, they all have common interests,
and their rights and liabilities are identical and so interwoven and
dependent as to be inseparable. The reversal of the assailed CA
judgment should therefore inure to the benefit of Ramon and Rafael as
well. The December 11, 2009 Order of the RTC decreeing dismissal as
against petitioners, Ramon, and Rafael, as well as the payment of
attorney's fees to all of them - may be reinstated in all respects.
chanRoblesvirtualLawlibrary
xxx This Court has always recognized the general rule that in appellate
proceedings, the reversal of the judgment on appeal is binding only on
the parties in the appealed case and does not affect or inure to the
benefit of those who did not join or were not made parties to the appeal.
An exception to the rule exists, however, where a judgment cannot be
reversed as to the party appealing without affecting the rights of his co-
debtor, or where the rights and liabilities of the parties are so interwoven
and dependent on each other as to be inseparable, in which case a
reversal as to one operates as a reversal as to all. This exception, which
is based on a communality of interest of said parties, is recognized in
this jurisdiction. x x x
WHEREFORE, the Petition is GRANTED. The February 29, 2012
Decision of the Court of Appeals in CA-G.R. SP No. 114363
is REVERSED and SET ASIDE. The December 11, 2009 Order of the
Regional Trial Court of Pasig City, Branch 160 in SCA No. 3144
is REINSTATED and AFFIRMED.
SO ORDERED.
---------------------------------------------------------------------------
G.R. No. 58010. March 31, 1993.
EMILIA O'LACO and HUCO LUNA, petitioners, vs. VALENTIN CO CHO
CHIT, O LAY KIA and COURT OF APPEALS, respondents.
Sergio L. Guadiz for petitioners.
Norberto J . Quisumbing & Associates for private respondents.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; ACTIONS; CONDITION
PRECEDENT TO FILING OF SUIT BETWEEN MEMBERS OF THE
SAME FAMILY; EFFECT OF FAILURE TO COMPLY WITH
CONDITION. — Admittedly, the present action is between members of
the same family since petitioner Emilia O'Laco and respondent O Lay
Kia are half-sisters. Consequently, there should be an averment in the
compliant that earnest efforts toward a compromise have been made,
pursuant to Art. 222 of the New Civil Code, or a motion to dismiss could
have been filed under Sec. 1, par. (j), Rule 16 of the Rules of Court. For,
it is well-settled that the attempt to compromise as well as the inability
to succeed is a condition precedent to the filing of a suit between
members of the same family. Hence, the defect in the complaint is
assailable at any stage of the proceedings, even on appeal, for lack of
cause of action.
2. ID.; ID.; AMENDMENT TO COMPLAINT; WHEN PROPER;
AMENDMENT TO CONFORM TO EVIDENCE. — Plaintiff may be
allowed to amend his complaint to correct the defect if the amendment
does not actually confer jurisdiction on the court in which the action is
filed, i.e., if the cause of action was originally within that court's
jurisdiction. In such case, the amendment is only to cure the perceived
defect in the complaint, thus may be allowed. In the case before Us,
while respondent-spouses did not formally amend their complaint, they
were nonetheless allowed to introduce evidence purporting to show that
earnest efforts toward a compromise had been made, that is,
respondent O Lay Kia importuned Emilia O'Laco and pressed her for the
transfer of the title of the Oroquieta property in the name of spouses O
Lay Kia and Valentin Co Cho Chit, just before Emilia's marriage to Hugo
Luna. But, instead of transferring the title as requested, Emilia sold the
property to the Roman Catholic Archbishop of Manila. This testimony
was not objected to by petitioner-spouses. Hence, the complaint was
deemed accordingly amended to conform to the evidence, pursuant to
Sec. 5, Rule 10 of the Rules of Court which reads — "Sec. 5.
Amendment to conform to or authorize presentation of evidence. —
When issues not raised by the pleadings are tried by express or implied
consent of the parties, they shall be treated in all respects, as if they had
been raised in the pleadings . . ." Indeed, if the defendant permits
evidence to be introduced without objection and which supplies the
necessary allegations of a defective complaint, then the evidence is
deemed to have the effect of curing the defects of the complaint. The
insufficiency of the allegations in the complaint is deemed ipso facto
rectified.
3. CIVIL LAW; OBLIGATIONS AND CONTRACTS; TRUSTS;
EXPRESS TRUST; DEFINED; IMPLIED TRUST; DEFINED. — By
definition, trust relations between parties may either be express or
implied. Express trusts are those which are created by the direct and
positive acts of the parties, by some writing or deed, or will, or by words
evincing an intention to create a trust. Implied trusts are those which,
without being express, are deducible from the nature of the transaction
as matters of intent, or which are superinduced on the transaction by
operation of law as matters of equity, independently of the particular
intention of the parties.
4. ID.; ID.; ID.; IMPLIED TRUSTS; RESULTING TRUST; BASIS
THEREOF; CONSTRUCTIVE TRUST; BASIS THEREOF. — Implied
trust may either be resulting or constructive trusts, both coming into
being by operation of law. Resulting trusts are based on the equitable
doctrine that valuable consideration and not legal title determines the
equitable title or interest and are presumed always to have been
contemplated by the parties. They arise from the nature or
circumstances of the consideration involved in a transaction whereby
one person thereby becomes invested with legal title but is obligated in
equity to hold his legal title for the benefit of another. On the other hand,
constructive trusts are created by the construction of equity in order to
satisfy the demands of justice and prevent unjust enrichment. They arise
contrary to intention against one who, by fraud, duress or abuse of
confidence, obtains or holds the legal right to property which he ought
not, in equity and good conscience, to hold.
5. ID.; ID.; ID.; EXPRESS TRUSTS CONCERNING IMMOVABLES NOT
PROVED BY PAROL EVIDENCE; IMPLIED TRUST IN REAL
PROPERTY ESTABLISHED BY PAROL EVIDENCE; PROOF
REQUIRED; CASE AT BAR. — Unlike express trusts concerning
immovables or any interest therein which cannot be proved by parol
evidence, implied trusts may be established by oral evidence. However,
in order to establish an implied trust in real property by parol evidence,
the proof should be as fully convincing as if the acts giving rise to the
trust obligation were proven by an authentic document. It cannot be
established upon vague and inconclusive proof. After a thorough review
of the evidence on record, We hold that a resulting trust was indeed
intended by the parties under Art. 1448 of the New Civil Code which
states — "Art. 1448. There is an implied trust when property is sold, and
the legal estate is granted to one party but the price is paid by another
for the purpose of having the beneficial interest of the property. The
former is the trustee, while the latter is the beneficiary . . ." As stipulated
by the parties, the document of sale, the owner's duplicate copy of the
certificate of title, insurance policies, receipt of initial premium of
insurance coverage and real estate tax receipts were all in the
possession of respondent-spouses which they offered in evidence. As
15
emphatically asserted by respondent O Lay Kia, the reason why these
documents of ownership remained with her is that the land in question
belonged to her. Indeed, there can be no persuasive rationalization for
the possession of these documents of ownership by respondent-
spouses for seventeen (17) years after the Oroquieta property was
purchased in 1943 than that of precluding its possible sale, alienation or
conveyance by Emilia O'Laco, absent any machination or fraud. This
continued possession of the documents, together with other
corroborating evidence spread on record, strongly suggests that Emilia
O'Laco merely held the Oroquieta property in trust for respondent-
spouses.
6. ID.; ID.; ID.; CONSTRUCTIVE TRUST SUBJECT TO
PRESCRIPTION; RESULTING TRUST IMPRESCRIPTIBLE;
RESULTING TRUST CONVERTED TO CONSTRUCTIVE TRUST BY
REPUDIATION; REQUISITES; PRESCRIPTIVE PERIOD FOR
ACTION FOR RECONVEYANCE BASED ON CONSTRUCTIVE
TRUST. — As differentiated from constructive trusts, where the settled
rule is that prescription may supervene, in resulting trust, the rule of
imprescriptibility may apply for as long as the trustee has not repudiated
the trust. Once the resulting trust is repudiated, however, it is converted
into a constructive trust and is subject to prescription. A resulting trust is
repudiated if the following requisites concur: (a) the trustee has
performed unequivocal acts of repudiation amounting to an ouster of the
cestui qui trust; (b) such positive acts of repudiation have been made
known to the cestui qui trust; and, (c) the evidence thereon is clear and
convincing. In Tale v. Court of Appeals the Court categorically ruled that
an action for reconveyance based on an implied or constructive trust
must perforce prescribe in ten (10) years, and not otherwise, thereby
modifying previous decisions holding that the prescriptive period was
four (4) years. So long as the trustee recognizes the trust, the beneficiary
may rely upon the recognition, and ordinarily will not be in fault for
omitting to bring an action to enforce his rights. There is no running of
the prescriptive period if the trustee expressly recognizes the resulting
trust. Since the complaint for breach of trust was filed by respondent-
spouses two (2) months after acquiring knowledge of the sale, the action
therefore has not yet prescribed.
DECISION
BELLOSILLO, J p:
History is replete with cases of erstwhile close family relations put
asunder by property disputes. This is one of them. It involves half-sisters
each claiming ownership over a parcel of land. While petitioner Emilia
O'Laco asserts that she merely left the certificate of title covering the
property with private respondent O Lay Kia for safekeeping, the latter
who is the former's older sister insists that the title was in her possession
because she and her husband bought the property from their conjugal
funds. To be resolved therefore is the issue of whether a resulting trust
was intended by them in the acquisition of the property. The trial court
declared that there was no trust relation of any sort between the sisters.
1 The Court of Appeals ruled otherwise. 2 Hence, the instant petition for
review on certiorari of the decision of the appellate court together with
its resolution denying reconsideration. 3
It appears that on 31 May 1943, the Philippine Sugar Estate
Development Company, Ltd., sold a parcel of land, Lot No. 5, Block No.
10, Plan Psu-10038, situated at Oroquieta St., Sta. Cruz, Manila, with
the Deed of Absolute Sale naming Emilia O'Laco as vendee; thereafter,
Transfer Certificate of Title No. 66456 was issued in her name.
On 17 May 1960, private respondent-spouses Valentin Co Cho Chit and
O Lay Wa learned from the newspapers that Emilia O'Laco sold the
same property to the Roman Catholic Archbishop of Manila for
P230,000.00, with assumption of the real estate mortgage constituted
thereon. 4
On 22 June 1960, respondent-spouses Valentin Co Cho Chit and O Lay
Kia sued petitioner-spouses Emilia O'Laco and Hugo Luna to recover
the purchase price of the land before the then Court of First Instance of
Rizal, respondent-spouses asserting that petitioner Emilia O'Laco knew
that they were the real vendees of the Oroquieta property sold in 1943
by Philippine Sugar Estate Development Company, Ltd., and that the
legal title thereto was merely placed in her name. They contend that
Emilia O'Laco breached the trust when she sold the land to the Roman
Catholic Archbishop of Manila. Meanwhile, they asked the trial court to
garnish all the amounts still due and payable to petitioner-spouses
arising from the sale, which was granted on 30 June 1960. 5
Petitioner-spouses deny the existence of any form of trust relation. They
aver that Emilia O'Laco actually bought the property with her own
money; that she left the Deed of Absolute Sale and the corresponding
title with respondent-spouses merely for safekeeping; that when she
asked for the return of the documents evidencing her ownership,
respondent-spouses told her that these were misplaced or lost; and, that
in view of the loss, she filed a petition for issuance of a new title, and on
18 August 1944 the then Court of First Instance of Manila granted her
petition.
On 20 September 1976, finding no trust relation between the parties, the
trial court dismissed the complaint together with the counterclaim.
Petitioners and respondents appealed.
On 9 April 1981, the Court of Appeals set aside the decision of the trial
court thus —
". . . We set aside the decision of the lower court dated September 20,
1976 and the order of January 5, 1977 and another one is hereby
entered ordering the defendants-appellees to pay plaintiffs-appellants
jointly and severally the sum of P230,000.00 representing the value of
the property subject of the sale with assumption of mortgage to the
Roman Catholic Archbishop of Manila with legal interest from the filing
of the complaint until fully paid, the sum of P10,000.00 as attorney's
fees, plus costs."
On 7 August 1981, the Court of Appeals denied reconsideration of its
decision, prompting petitioners to come to this Court for relief.
Petitioners contend that the present action should have been dismissed.
They argue that the complaint fails to allege that earnest efforts toward
a compromise were exerted considering that the suit is between
members of the same family, and no trust relation exists between them.
Even assuming ex argumenti that there is such a relation, petitioners
further argue, respondents are already barred by laches.
We are not persuaded. Admittedly, the present action is between
members of the same family since petitioner Emilia O'Laco and
respondent O Lay Kia are half-sisters. Consequently, there should be
an averment in the complaint that earnest efforts toward a compromise
have been made, pursuant to Art. 222 of the New Civil Code, 6 or a
motion to dismiss could have been filed under Sec. 1, par. (j), Rule 16,
of the Rules of Court. 7 For, it is well-settled that the attempt to
compromise as well as the inability to succeed is a condition precedent
to the filing of a suit between members of the same family. 8 Hence, the
defect in the complaint is assailable at any stage of the proceedings,
even on appeal, for lack of cause of action. 9
But, plaintiff may be allowed to amend his complaint to correct the defect
if the amendment does not actually confer jurisdiction on the court in
which the action is filed, i.e., if the cause of action was originally within
that court's jurisdiction. 10 In such case, the amendment is only to cure
the perceived defect in the complaint, thus may be allowed.
In the case before Us, while respondent-spouses did not formally amend
their complaint, they were nonetheless allowed to introduce evidence
purporting to show that earnest efforts toward a compromise had been
made, that is, respondent O Lay Kia importuned Emilia O'Laco and
pressed her for the transfer of the title of the Oroquieta property in the
name of spouses O Lay Kia and Valentin Co Cho Chit, just before
Emilia's marriage to Hugo Luna. 11 But, instead of transferring the title
as requested, Emilia sold the property to the Roman Catholic
Archbishop of Manila. This testimony was not objected to by petitioner-
spouses. Hence, the complaint was deemed accordingly amended to
16
conform to the evidence, 12 pursuant to Sec. 5, Rule 10 of the Rules of
Court which reads —
"SECTION 5. Amendment to conform to or authorize presentation of
evidence. — When issues not raised by the pleadings are tried by
express or implied consent of the parties, they shall be treated in all
respects, as, if they had been raised in the pleadings . . ." (emphasis
supplied).
Indeed, if the defendant permits evidence to be introduced without
objection and which supplies the necessary allegations of a defective
complaint, then the evidence is deemed to have the effect of curing the
defects of the complaint. 13 The insufficiency of the allegations in the
complaint is deemed ipso facto rectified. 14
But the more crucial issue before Us is whether there is a trust relation
between the parties in contemplation of law.
We find that there is. By definition, trust relations between parties may
either be express or implied. 15 Express trusts are those which are
created by the direct and positive acts of the parties, by some writing or
deed, or will, or by words evincing an intention to create a trust. 16
Implied trusts are those which, without being express, are deducible
from the nature of the transaction as matters of intent, or which are
superinduced on the transaction by operation of law as matters of equity,
independently of the particular intention of the parties.17 Implied trusts
may either be resulting or constructive trusts, both coming into being by
operation of law. 18
Resulting trusts are based on the equitable doctrine that valuable
consideration and not legal title determines the equitable title or interest
19 and are presumed always to have been contemplated by the parties.
They arise from the nature or circumstances of the consideration
involved in a transaction whereby one person thereby becomes invested
with legal title but is obligated in equity to hold his legal title for the benefit
of another. 20 On the other hand, constructive trusts are created by the
construction of equity in order to satisfy the demands of justice 21 and
prevent unjust enrichment. They arise contrary to intention against one
who, by fraud, duress or abuse of confidence, obtains or holds the legal
right to property which he ought not, in equity and good conscience, to
hold. 22
Specific examples of resulting trusts may be found in the Civil Code,
particularly Arts. 1448, 1449, 1451,1452 and 1453, 23 while constructive
trusts are illustrated in Arts. 1450, 1454, 1455 and 1456. 24
Unlike express trusts concerning immovables or any interest therein
which cannot be proved by parol evidence, 25 implied trusts may be
established by oral evidence. 26 However, in order to establish an
implied trust in real property by parol evidence, the proof should be as
fully convincing as if the acts giving rise to the trust obligation were
proven by an authentic document. 27 It cannot be established upon
vague and inconclusive proof. 28
After a thorough review of the evidence on record, We hold that a
resulting trust was indeed intended by the parties under Art. 1448 of the
New Civil Code which states —
"ARTICLE 1448. There is an implied trust when property is sold, and the
legal estate is granted to one party but the price is paid by another for
the purpose of having the beneficial interest of the property. The former
is the trustee, while the latter is the beneficiary . . ." (emphasis supplied).
First. As stipulated by the parties, the document of sale, the owner's
duplicate copy of the certificate of title, insurance policies, receipt of
initial premium of insurance coverage and real estate tax receipts ware
all in the possession of respondent spouses which they offered in
evidence. As emphatically asserted by respondent O Lay Kia, the
reason why these documents of ownership remained with her is that the
land in question belonged to her. 29
Indeed, there can be no persuasive rationalization for the possession of
these documents of ownership by respondent-spouses for seventeen
(17) years after the Oroquieta property was purchased in 1943 than that
of precluding its possible sale, alienation or conveyance by Emilia
O'Laco, absent any machination or fraud. This continued possession of
the documents, together with other corroborating evidence spread on
record, strongly suggests that Emilia O'Laco merely held the Oroquieta
property in trust for respondent-spouses.
Second. It may be worth to mention that before buying the Oroquieta
property, respondent-spouses purchased another property situated in
Kusang-Loob, Sta. Cruz, Manila, where the certificate of title was placed
in the name of Ambrosio O'Laco, older brother of Emilia, under similar
or identical circumstances. The testimony of former counsel for
respondent-spouses, then Associate Justice Antonio G. Lucero of the
Court of Appeals, is enlightening —
"Q In the same conversation he told you how he would buy the property
(referring to the Oroquieta property), he and his wife?
"A Yes, Sir, he did.
"Q What did he say?
xxx xxx xxx
"A He said he and his wife has (sic) already acquired by purchase a
certain property located at Kusang-Loob, Sta. Cruz, Manila. He told me
he would like to place the Oroquieta Maternity Hospital in case the
negotiation materialize(s) in the name of a sister of his wife (O'Laco)"
(emphasis supplied). 30
On the part of respondent-spouses, they explained that the reason why
they did not place these Oroquieta and Kusang-Loob properties in their
name was that being Chinese nationals at the time of the purchase they
did not want to execute the required affidavit to the effect that they were
allies of the Japanese. 31 Since O Lay Kia took care of Emilia who was
still young when her mother died, 32 respondent-spouses did not
hesitate to place the title of the Oroquieta property in Emilia's name.
Quite significantly, respondent-spouses also instituted an action for
reconveyance against Ambrosio O'Laco when the latter claimed the
Kusang-Loob property as his own. A similar stipulation of facts was
likewise entered, i.e., respondent-spouses had in their possession
documents showing ownership of the Kusang-Loob property which they
offered in evidence. In that case, the decision of the trial court, now final
and executory, declared respondent-spouses as owners of the Kusang-
Loob property and ordered Ambrosio O'Laco to reconvey it to them. 33
Incidentally, Ambrosio O'Laco thus charged respondent spouses
Valentin Co Cho Cit and O Lay Kia before the Anti-Dummy Board,
docketed as Case No. 2424, for their acquisition of the Kusang-Loob
and Oroquieta properties. 34 He claimed that respondent-spouses
utilized his name in buying the Kusang-Loob property while that of
petitioner O'Laco was used in the purchase of the Oroquieta property.
In effect, there was an implied admission by Ambrosio that his sister
Emilia, like him, was merely used as a dummy. However, the Anti-
Dummy Board exonerated respondent-spouses since the purchases
were made in 1943, or during World War II, when the Anti-Dummy Law
was not enforceable.
Third. The circumstances by which Emilia O'Laco obtained a new title
by reason of the alleged loss of the old title then in the possession of
respondent-spouses cast serious doubt on the veracity of her
ownership. The petitions respectively filed by Emilia O'Laco and
Ambrosio O'Laco for the Oroquieta and the Kusang-Loob properties
were both granted on the same day, 18 August 1944, by the then Court
of First Instance of Manila. These orders were recorded in the Primary
Entry Book of the Register of Deeds of Manila at the same time, 2:35
o'clock in the afternoon of 1 September 1944, in consecutive entries,
Entries Nos. 246117-18. 35 This coincidence lends credence to the
17
position of respondent-spouses that there was in fact a conspiracy
between the siblings Ambrosio and Emilia to defraud and deprive
respondents of their title to the Oroquieta and Kusang-Loob properties.
Fourth. Until the sale of the Oroquieta property to the Roman Catholic
Archbishop of Manila, petitioner Emilia O'Laco actually recognized the
trust. Specifically, when respondent spouses learned that Emilia was
getting married to Hugo, O Lay Kia asked her to have the title to the
property already transferred to her and her husband Valentin, and Emilia
assured her that "would be arranged (maaayos na)" after her wedding.
36 Her answer was an express recognition of the trust, otherwise, she
would have refused the request outright. Petitioners never objected to
this evidence; nor did they attempt to controvert it.
Fifth. The trial court itself determined that "Valentin Co Cho Chit and O
Lay Kia had some money with which they could buy the property." 37 In
fact, Valentin was the Chief Mechanic of the Paniqui Sugar Mills, was
engaged in the buy and sell business, operated a gasoline station, and
owned an auto supply store as well as a ten-door apartment in Caloocan
City. 38 In contrast, Emilia O'Laco failed to convince the Court that she
was financially capable of purchasing the Oroquieta property. In fact,
she opened a bank account only in 1946 and likewise began filing
income tax returns that same year, 39 while the property in question was
bought in 1943. Respondent-spouses even helped Emilia and her
brothers in their expenses and livelihood. Emilia could only give a vague
account on how she raised the money for the purchase of the property.
Her narration of the transaction of sale abounds with "I don't know" and
"I don't remember." 40
Having established a resulting trust between the parties, the next
question is whether prescription has set in.
As differentiated from constructive trusts, where the settled rule is that
prescription may supervene, in resulting trust, the rule of
imprescriptibility may apply for as long as the trustee has not repudiated
the trust. 41 Once the resulting trust is repudiated, however, it is
converted into a constructive trust and is subject to prescription.
A resulting trust is repudiated if the following requisites concur: (a) the
trustee has performed unequivocal acts of repudiation amounting to an
ouster of the cestui qui trust; (b) such positive acts of repudiation have
been made known to the cestui qui trust; and, (c) the evidence thereon
is clear and convincing. 42
In Tale v. Court of Appeals 43 the Court categorically ruled that an action
for reconveyance based on an implied or constructive trust must
perforce prescribe in ten (10) years, and not otherwise, thereby
modifying previous decisions holding that the prescriptive period was
four (4) years.
Neither the registration of the Oroquieta property in the name of
petitioner Emilia O'Laco nor the issuance of a new Torrens title in 1944
in her name in lieu of the alleged loss of the original may be made the
basis for the commencement of the prescriptive period. For, the
issuance of the Torrens title in the name of Emilia O'Laco could not be
considered adverse, much less fraudulent. Precisely, although the
property was bought by respondent-spouses, the legal title was placed
in the name of Emilia O'Laco. The transfer of the Torrens title in her
name was only in consonance with the deed of sale in her favor.
Consequently, there was no cause for any alarm on the part of
respondent-spouses. As late as 1959, or just before she got married,
Emilia continued to recognize the ownership of respondent-spouses
over the Oroquieta property. Thus, until that point, respondent-spouses
were not aware of any act of Emilia which would convey to them the idea
that she was repudiating the resulting trust. The second requisite is
therefore absent. Hence, prescription did not begin to run until the sale
of the Oroquieta property, which was clearly an act of repudiation.
But immediately after Emilia sold the Oroquieta property which is
obviously a disavowal of the resulting trust, respondent-spouses
instituted the present suit for breach of trust. Correspondingly, laches
cannot lie against them.
After all, so long as the trustee recognizes the trust, the beneficiary may
rely upon the recognition, and ordinarily will not be in fault for omitting to
bring an action to enforce his rights. 44 There is no running of the
prescriptive period if the trustee expressly recognizes the resulting trust.
45 Since the complaint for breach of trust was filed by respondent-
spouses two (2) months after acquiring knowledge of the sale, the action
therefore has not yet prescribed.
WHEREFORE, the Petition for Review on Certiorari is DENIED. The
Decision of the Court of Appeals of 9 April 1981, which reversed the trial
court, is AFFIRMED. Costs against petitioners.
SO ORDERED.
-----------------------------------------------------------------------------------
G.R. No. 109068 January 10, 1994
GAUDENCIO GUERRERO, petitioner,
vs.
REGIONAL TRIAL COURT OF ILOCOS NORTE, BR. XVI, JUDGE
LUIS B. BELLO, JR., PRESIDING, and PEDRO G.
HERNANDO, respondents.
BELLOSILLO, J.:
Filed by petitioner as an accion publicana1 against private respondent,
this case assumed another dimension when it was dismissed by
respondent Judge on the ground that the parties being brother-in-law
the complaint should have alleged that earnest efforts were first exerted
towards a compromise.
Admittedly, the complaint does not allege that the parties exerted
earnest towards a compromise and that the same failed. However,
private respondent Pedro G. Hernando apparently overlooked this
alleged defect since he did not file any motion to dismiss nor attack the
complaint on this ground in his answer. It was only on 7 December 1992,
at the pre-trial conference, that the relationship of petitioner Gaudencio
Guerrero and respondent Hernando was noted by respondent Judge
Luis B. Bello, Jr., they being married to half-sisters hence are brothers-
in-law, and on the basis thereof respondent Judge gave petitioner five
(5) days "to file his motion and amended complaint" to allege that the
parties were very close relatives, their respective wives being sisters,
and that the complaint to be maintained should allege that earnest
efforts towards a compromise were exerted but failed. Apparently,
respondent Judge considered this deficiency a jurisdictional defect.
On 11 December 1992, Guerrero moved to reconsider the 7 December
1992 Order claiming that since brothers by affinity are not members of
the same family, he was not required to exert efforts towards a
compromise. Guerrero likewise argued that Hernando was precluded
from raising this issue since he did not file a motion to dismiss nor assert
the same as an affirmative defense in his answer.
On 22 December 1992, respondent Judge denied the motion for
reconsideration holding that "[f]ailure to allege that earnest efforts
towards a compromise is jurisdictional such that for failure to allege
same the court would be deprived of its jurisdiction to take cognizance
of the case." He warned that unless the complaint was amended within
five (5) days the case would be dismissed.
On 29 January 1993, the 5-day period having expired without Guerrero
amending his complaint, respondent Judge dismissed the case,
declaring the dismissal however to be without prejudice.
Guerrero appeals by way of this petition for review the dismissal by the
court a quo. He raises these legal issues: (a) whether brothers by affinity
are considered members of the same family contemplated in Art. 217,
par. (4), and Art. 222 of the New Civil Code, as well as under Sec. 1,
par. (j), Rule 16, of the Rules of Court requiring earnest efforts towards
18
a compromise before a suit between them may be instituted and
maintained; and, (b) whether the absence of an allegation in the
complaint that earnest efforts towards a compromise were exerted,
which efforts failed, is a ground for dismissal for lack of jurisdiction.
The Constitution protects the sanctity of the family and endeavors to
strengthen it as a basic autonomous social institution. 2 This is also
embodied in Art. 149,3 and given flesh in Art. 151, of the Family Code,
which provides:
Art. 151. No suit between members of the same
family shall prosper unless it should appear from
the verified complaint or petition that earnest efforts
toward a compromise have been made, but that the
same had failed. If it is shown that no such efforts
were in fact made, the case must be dismissed.
This rule shall not apply to cases which may not be
the subject of compromise under the Civil Code.
Considering that Art. 151 herein-quoted starts with the negative word
"No", the requirement is mandatory4 that the complaint or petition, which
must be verified, should allege that earnest efforts towards a
compromise have been made but that the same failed, so that "[i]f it is
shown that no such efforts were in fact made, the case must be
dismissed."
Further, Art. 151 is contemplated by Sec. 1, par. (j), Rule 16, of the Rules
of Court which provides as a ground for motion to dismiss "(t)hat the suit
is between members of the same family and no earnest efforts towards
a compromise have been made."
The Code Commission, which drafted the precursor provision in the Civil
Code, explains the reason for the requirement that earnest efforts at
compromise be first exerted before a complaint is given due course —
This rule is introduced because it is difficult to
imagine a sadder and more tragic spectacle than a
litigation between members of the same family. It is
necessary that every effort should be made toward
a compromise before a litigation is allowed to breed
hate and passion in the family. It is known that a
lawsuit between close relatives generates deeper
bitterness than between strangers . . . A litigation in
a family is to be lamented far more than a lawsuit
between strangers . . . 5
But the instant case presents no occasion for the application of the
above-quoted provisions. As early as two decades ago, we already ruled
in Gayon v. Gayon6 that the enumeration of "brothers and sisters" as
members of the same family does not comprehend "sisters-in-law". In
that case, then Chief Justice Concepcion emphasized that "sisters-in-
law" (hence, also "brothers-in-law") are not listed under Art. 217 of the
New Civil Code as members of the same family. Since Art. 150 of the
Family Code repeats essentially the same enumeration of "members of
the family", we find no reason to alter existing jurisprudence on the
matter. Consequently, the court a quo erred in ruling that petitioner
Guerrero, being a brother-in-law of private respondent Hernando, was
required to exert earnest efforts towards a compromise before filing the
present suit.
In his Comment, Hernando argues that ". . . although both wives of the
parties were not impleaded, it remains a truism that being spouses of
the contending parties, and the litigation involves ownership of real
property, the spouses' interest and participation in the land in question
cannot be denied, making the suit still a suit between half-sisters . . ."7
Finding this argument preposterous, Guerrero counters in his Reply that
his "wife has no actual interest and participation in the land subject of
the . . . suit, which the petitioner bought, according to his complaint,
before he married his wife."8 This factual controversy however may be
best left to the court a quo to resolve when it resumes hearing the case.
As regards the second issue, we need only reiterate our ruling in
O'Laco v. Co Cho Chit,9 citing Mendoza v. Court of Appeals, 10 that the
attempt to compromise as well as the inability to succeed is a condition
precedent to the filing of a suit between members of the same family,
the absence of such allegation in the complaint being assailable at any
stage of the proceeding, even on appeal, for lack of cause of action.
It is not therefore correct, as petitioner contends, that private respondent
may be deemed to have waived the aforesaid defect in failing to move
or dismiss or raise the same in the Answer. On the other hand, we
cannot sustain the proposition of private respondent that the case was,
after all, also dismissed pursuant to Sec. 3, Rule 17, of the Rules of
Court 11 for failure of petitioner to comply with the court's order to amend
his complaint.
A review of the assailed orders does not show any directive which
Guerrero supposedly defied. The Order of 7 December 1992 merely
gave Guerrero five (5) days to file his motion and amended complaint
with a reminder that the complaint failed to allege that earnest efforts
were exerted towards a compromise. The Order of 22 December 1992,
which denied Guerrero's motion for reconsideration, simply stated that
"Plaintiff if it (sic) so desire must
amend the complaint otherwise, the court will have to dismiss the case
(emphasis supplied) . . ." The Order of 29 January 1993 dismissing the
case without prejudice only made reference to an earlier order
"admonishing" counsel for Guerrero to amend the complaint, and an
"admonition" is not synonymous with "order". Moreover, since the
assailed orders do not find support in our jurisprudence but, on the other
hand, are based on an erroneous interpretation and application of the
law, petitioner could not be bound to comply with them. 12
WHEREFORE, the petition is GRANTED and the appealed Orders of
7 December 1992, 22 December 1992 and 29 January 1993 are SET
ASIDE. The Regional Trial Court of Laoag City, Branch 16, or whichever
branch of the court the case may now be assigned, is directed to
continue with Civil Case
No. 10084-16 with deliberate dispatch.
SO ORDERED.
----------------------------------------------------------------------------------------------
-G.R. NO. 154132 August 31, 2006
HIYAS SAVINGS and LOAN BANK, INC. Petitioner,
vs.
HON. EDMUNDO T. ACUÑA, in his capacity as Pairing Judge of
Regional Trial Court, Branch 122, Caloocan City, and ALBERTO
MORENO, Respondent.
DECISION
AUSTRIA-MARTINEZ, J.:
Before the Court is a petition for certiorari under Rule 65 of the Rules of
Court seeking to nullify the Orders 1 of the Regional Trial Court (RTC) of
Caloocan City, Branch 122, dated November 8, 2001 2 and May 7,
2002 3 denying herein petitioner’s Motion to Dismiss and Motion for
Partial Reconsideration, respectively.
The antecedent facts are as follows:
On November 24, 2000, Alberto Moreno (private respondent) filed with
the RTC of Caloocan City a complaint against Hiyas Savings and Loan
Bank, Inc. (petitioner), his wife Remedios, the spouses Felipe and Maria
Owe and the Register of Deeds of Caloocan City for cancellation of
mortgage contending that he did not secure any loan from petitioner, nor
did he sign or execute any contract of mortgage in its favor; that his wife,
19
acting in conspiracy with Hiyas and the spouses Owe, who were the
ones that benefited from the loan, made it appear that he signed the
contract of mortgage; that he could not have executed the said contract
because he was then working abroad. 4
On May 17, 2001, petitioner filed a Motion to Dismiss on the ground that
private respondent failed to comply with Article 151 of the Family Code
wherein it is provided that no suit between members of the same family
shall prosper unless it should appear from the verified complaint or
petition that earnest efforts toward a compromise have been made, but
that the same have failed. Petitioner contends that since the complaint
does not contain any fact or averment that earnest efforts toward a
compromise had been made prior to its institution, then the complaint
should be dismissed for lack of cause of action. 5
Private respondent filed his Comment on the Motion to Dismiss with
Motion to Strike Out and to Declare Defendants in Default. He argues
that in cases where one of the parties is not a member of the same family
as contemplated under Article 150 of the Family Code, failure to allege
in the complaint that earnest efforts toward a compromise had been
made by the plaintiff before filing the complaint is not a ground for a
motion to dismiss. Alberto asserts that since three of the party-
defendants are not members of his family the ground relied upon by
Hiyas in its Motion to Dismiss is inapplicable and unavailable. Alberto
also prayed that defendants be declared in default for their failure to file
their answer on time. 6
Petitioner filed its Reply to the Comment with Opposition to the Motion
to Strike and to Declare Defendants in Default. 7 Private respondent, in
turn, filed his Rejoinder. 8
On November 8, 2001, the RTC issued the first of its assailed Orders
denying the Motion to Dismiss, thus:
The court agrees with plaintiff that earnest efforts towards a compromise
is not required before the filing of the instant case considering that the
above-entitled case involves parties who are strangers to the family. As
aptly pointed out in the cases cited by plaintiff, Magbaleta v. G[o]nong,
L-44903, April 25, 1977 and Mendez v. [B]iangon, L-32159, October 28,
1977, if one of the parties is a stranger, failure to allege in the complaint
that earnest efforts towards a compromise had been made by plaintiff
before filing the complaint, is not a ground for motion to dismiss.
Insofar as plaintiff’s prayer for declaration of default against defendants,
the same is meritorious only with respect to defendants Remedios
Moreno and the Register of Deeds of Kaloocan City. A declaration of
default against defendant bank is not proper considering that the filing
of the Motion to Dismiss by said defendant operates to stop the running
of the period within which to file the required Answer. 9
10
Petitioner filed a Motion for Partial Reconsideration. Private
respondent filed his Comment, 11 after which petitioner filed its
Reply. 12 Thereafter, private respondent filed his Rejoinder. 13
On May 7, 2002, the RTC issued the second assailed Order denying
petitioner’s Motion for Partial Reconsideration. The trial court ruled:
Reiterating the resolution of the court, dated November 8, 2001,
considering that the above-entitled case involves parties who are
strangers to the family, failure to allege in the complaint that earnest
efforts towards a compromise were made by plaintiff, is not a ground for
a Motion to Dismiss.
Additionally, the court agrees with plaintiff that inasmuch as it is
defendant Remedios Moreno who stands to be benefited by Art. 151 of
the Family Code, being a member of the same family as that of plaintiff,
only she may invoke said Art. 151. 14
xxx
Hence, the instant Petition for Certiorari on the following grounds:
I. Public respondent committed grave abuse of discretion amounting to
lack or in excess of jurisdiction when he ruled that lack of earnest efforts
toward a compromise is not a ground for a motion to dismiss in suits
between husband and wife when other parties who are strangers to the
family are involved in the suit. Corollarily, public respondent committed
grave abuse of discretion amounting to lack or in excess of jurisdiction
when he applied the decision in the case of Magbaleta v.
Gonong instead of the ruling in the case of De Guzman v. Genato.
II. Public respondent committed grave abuse of discretion amounting to
lack or in excess of jurisdiction when he ruled that a party who is a
stranger to the family of the litigants could not invoke lack of earnest
efforts toward a compromise as a ground for the dismissal of the
complaint. 15
At the outset, the Court notes that the instant Petition
for Certiorari should have been filed with the Court of Appeals (CA) and
not with this Court pursuant to the doctrine of hierarchy of courts.
Reiterating the established policy for the strict observance of this
doctrine, this Court held in Heirs of Bertuldo Hinog v. Melicor 16 that:
Although the Supreme Court, Court of Appeals and the Regional Trial
Courts have concurrent jurisdiction to issue writs of certiorari,
prohibition, mandamus, quo warranto, habeas corpus and injunction,
such concurrence does not give the petitioner unrestricted freedom of
choice of court forum. As we stated in People v. Cuaresma:
This Court's original jurisdiction to issue writs of certiorari is not
exclusive. It is shared by this Court with Regional Trial Courts and with
the Court of Appeals. This concurrence of jurisdiction is not, however, to
be taken as according to parties seeking any of the writs an absolute,
unrestrained freedom of choice of the court to which application therefor
will be directed. There is after all a hierarchy of courts. That hierarchy is
determinative of the venue of appeals, and also serves as a general
determinant of the appropriate forum for petitions for the extraordinary
writs. A becoming regard for that judicial hierarchy most certainly
indicates that petitions for the issuance of extraordinary writs against
first level ("inferior") courts should be filed with the Regional Trial Court,
and those against the latter, with the Court of Appeals. A direct
invocation of the Supreme Court’s original jurisdiction to issue these
writs should be allowed only when there are special and important
reasons therefor, clearly and specifically set out in the petition. This is
[an] established policy. It is a policy necessary to prevent inordinate
demands upon the Court’s time and attention which are better devoted
to those matters within its exclusive jurisdiction, and to prevent further
over-crowding of the Court’s docket.
The rationale for this rule is two-fold: (a) it would be an imposition upon
the precious time of this Court; and (b) it would cause an inevitable and
resultant delay, intended or otherwise, in the adjudication of cases,
which in some instances had to be remanded or referred to the lower
court as the proper forum under the rules of procedure, or as better
equipped to resolve the issues because this Court is not a trier of facts.
Thus, this Court will not entertain direct resort to it unless the redress
desired cannot be obtained in the appropriate courts, and exceptional
and compelling circumstances, such as cases of national interest and of
serious implications, justify the availment of the extraordinary remedy of
writ of certiorari, calling for the exercise of its primary jurisdiction.
Exceptional and compelling circumstances were held present in the
following cases: (a) Chavez vs. Romulo on citizens’ right to bear arms;
(b) Government of the United States of America vs. Purganan on bail in
extradition proceedings; (c) Commission on Elections vs. Quijano-
Padilla on government contract involving modernization and
computerization of voters’ registration list; (d) Buklod ng Kawaning EIIB
vs. Zamora on status and existence of a public office; and (e) Fortich vs.
Corona on the so-called "Win-Win Resolution" of the Office of the
President which modified the approval of the conversion to agro-
industrial area. 17
20
In the present case, petitioner failed to advance a satisfactory
explanation as to its failure to comply with the principle of judicial
hierarchy. There is no reason why the instant petition could not have
been brought before the CA. On this basis, the instant petition should be
dismissed.
And even if this Court passes upon the substantial issues raised by
petitioner, the instant petition likewise fails for lack of merit.
Restating its arguments in its Motion for Partial Reconsideration,
petitioner argues that what is applicable to the present case is the
Court’s decision in De Guzman v. Genato 18 and not in Magbaleta v.
Gonong, 19 the former being a case involving a husband and wife while
the latter is between brothers.
The Court is not persuaded.
Article 151 of the Family Code provides as follows:
No suit between members of the same family shall prosper unless it
should appear from the verified complaint or petition that earnest efforts
toward a compromise have been made, but that the same have failed.
If it is shown that no such efforts were in fact made, the case must be
dismissed.
This rule shall not apply to cases which may not be the subject of
compromise under the Civil Code.
Article 222 of the Civil Code from which Article 151 of the Family Code
was taken, essentially contains the same provisions, to wit:
No suit shall be filed or maintained between members of the same family
unless it should appear that earnest efforts toward a compromise have
been made, but that the same have failed, subject to the limitations in
Article 2035. 20
The Code Commission that drafted Article 222 of the Civil Code from
which Article 151 of the Family Code was taken explains:
[I]t is difficult to imagine a sadder and more tragic spectacle than a
litigation between members of the same family. It is necessary that every
effort should be made toward a compromise before a litigation is allowed
to breed hate and passion in the family. It is known that a lawsuit
between close relatives generates deeper bitterness than between
strangers. 21
In Magbaleta, the case involved brothers and a stranger to the family,
the alleged owner of the subject property. The Court, taking into
consideration the explanation made by the Code Commision in its
report, ruled that:
[T]hese considerations do not, however, weigh enough to make it
imperative that such efforts to compromise should be a jurisdictional pre-
requisite for the maintenance of an action whenever a stranger to the
family is a party thereto, whether as a necessary or indispensable one.
It is not always that one who is alien to the family would be willing to
suffer the inconvenience of, much less relish, the delay and the
complications that wranglings between or among relatives more often
than not entail. Besides, it is neither practical nor fair that the
determination of the rights of a stranger to the family who just happened
to have innocently acquired some kind of interest in any right or property
disputed among its members should be made to depend on the way the
latter would settle their differences among themselves. 22 x x x.
Hence, once a stranger becomes a party to a suit involving members of
the same family, the law no longer makes it a condition precedent that
earnest efforts be made towards a compromise before the action can
prosper.
In the subsequent case of De Guzman, the case involved spouses and
the alleged paramour of the wife. The Court ruled that due to the efforts
exerted by the husband, through the Philippine Constabulary, to
confront the wife, there was substantial compliance with the law, thereby
implying that even in the presence of a party who is not a family member,
the requirements that earnest efforts towards a compromise have been
exerted must be complied with, pursuant to Article 222 of the Civil Code,
now Article 151 of the Family Code.
While De Guzman was decided after Magbaleta, the principle
enunciated in the Magbaleta is the one that now prevails because it is
reiterated in the subsequent cases of Gonzales v. Lopez, 23 Esquivias v.
Court of Appeals, 24Spouses Hontiveros v. Regional Trial Court, Branch
25, Iloilo City, 25 and the most recent case of Martinez v.
Martinez. 26 Thus, Article 151 of the Family Code applies to cover when
the suit is exclusively between or among family members.
The Court finds no cogent reason why the ruling in Magbaleta as well as
in all of the aforementioned cases should not equally apply to suits
involving husband and wife.
Petitioner makes much of the fact that the present case involves a
husband and his wife while Magbaleta is a case between brothers.
However, the Court finds no specific, unique, or special circumstance
that would make the ruling in Magbaleta as well as in the
abovementioned cases inapplicable to suits involving a husband and his
wife, as in the present case. In the first place, Article 151 of the Family
Code and Article 222 of the Civil Code are clear that the provisions
therein apply to suits involving "members of the same family" as
contemplated under Article 150 of the Family Code, to wit:
ART. 150. Family relations include those:
(1) Between husband and wife;
(2) Between parents and children;
(3) Among other ascendants and descendants; and
(4) Among brothers and sisters, whether of the full or half blood.
and Article 217 of the Civil Code, to wit:
ART. 217. Family relations shall include those:
(1) Between husband and wife;
(2) Between parent and child;
(3) Among other ascendants and their descendants;
(4) Among brothers and sisters.
Petitioner also contends that the trial court committed grave abuse of
discretion when it ruled that petitioner, not being a member of the same
family as respondent, may not invoke the provisions of Article 151 of the
Family Code.
Suffice it to say that since the Court has ruled that the requirement under
Article 151 of the Family Code is applicable only in cases which are
exclusively between or among members of the same family, it
necessarily follows that the same may be invoked only by a party who is
a member of that same family.
WHEREFORE, the instant Petition for Certiorari is DISMISSED for lack
of merit.
21
Costs against petitioner.
SO ORDERED
_______________________________________________________
G.R. No. 170829 November 20, 2006
PERLA G. PATRICIO, Petitioner,
vs.
MARCELINO G. DARIO III and THE HONORABLE COURT OF
APPEALS, Second Division, Respondents.
DECISION
YNARES-SANTIAGO, J.:
This petition for review on certiorari under Rule 45 of the Rules of Court
seeks to annul and set aside the Resolution of the Court of Appeals
dated December 9, 20051 in CA-G.R. CV No. 80680, which dismissed
the complaint for partition filed by petitioner for being contrary to law and
evidence.
On July 5, 1987, Marcelino V. Dario died intestate. He was survived by
his wife, petitioner Perla G. Patricio and their two sons, Marcelino Marc
Dario and private respondent Marcelino G. Dario III. Among the
properties he left was a parcel of land with a residential house and a pre-
school building built thereon situated at 91 Oxford corner Ermin Garcia
Streets in Cubao, Quezon City, as evidenced by Transfer Certificate of
Title (TCT) No. RT-30731 (175992) of the Quezon City Registry of
Deeds, covering an area of seven hundred fifty five (755) square meters,
more or less.2
On August 10, 1987, petitioner, Marcelino Marc and private respondent,
extrajudicially settled the estate of Marcelino V. Dario. Accordingly, TCT
No. RT-30731 (175992) was cancelled and TCT No. R-213963 was
issued in the names of petitioner, private respondent and Marcelino
Marc.
Thereafter, petitioner and Marcelino Marc formally advised private
respondent of their intention to partition the subject property and
terminate the co-ownership. Private respondent refused to partition the
property hence petitioner and Marcelino Marc instituted an action for
partition before the Regional Trial Court of Quezon City which was
docketed as Civil Case No. Q-01-44038 and raffled to Branch 78.
On October 3, 2002,3 the trial court ordered the partition of the subject
property in the following manner: Perla G. Patricio, 4/6; Marcelino Marc
G. Dario, 1/6; and Marcelino G. Dario III, 1/6. The trial court also ordered
the sale of the property by public auction wherein all parties concerned
may put up their bids. In case of failure, the subject property should be
distributed accordingly in the aforestated manner.4
Private respondent filed a motion for reconsideration which was denied
by the trial court on August 11, 2003,5 hence he appealed before the
Court of Appeals, which denied the same on October 19, 2005.
However, upon a motion for reconsideration filed by private respondent
on December 9, 2005, the appellate court partially reconsidered the
October 19, 2005 Decision. In the now assailed Resolution, the Court of
Appeals dismissed the complaint for partition filed by petitioner and
Marcelino Marc for lack of merit. It held that the family home should
continue despite the death of one or both spouses as long as there is a
minor beneficiary thereof. The heirs could not partition the property
unless the court found compelling reasons to rule otherwise. The
appellate court also held that the minor son of private respondent, who
is a grandson of spouses Marcelino V. Dario and Perla G. Patricio, was
a minor beneficiary of the family home.6
Hence, the instant petition on the following issues:
I.
THE HONORABLE COURT OF APPEALS PATENTLY
ERRED IN REVERSING ITS EARLIER DECISION OF
OCTOBER 19, 2005 WHICH AFFIRMED IN TOTO THE
DECISION OF THE TRIAL COURT DATED 03 OCTOBER
2002 GRANTING THE PARTITION AND SALE BY PUBLIC
AUCTION OF THE SUBJECT PROPERTY.
II.
COROLLARILY, THE HONORABLE COURT OF APPEALS
PATENTLY ERRED IN APPLYING ARTICLE 159 IN
RELATION TO ARTICLE 154 OF THE FAMILY CODE ON
FAMILY HOME INSTEAD OF ARTICLE 494 IN RELATION
TO ARTICLES 495 AND 498 OF THE NEW CIVIL CODE ON
CO-OWNERSHIP.7
The sole issue is whether partition of the family home is proper where
one of the co-owners refuse to accede to such partition on the ground
that a minor beneficiary still resides in the said home.
Private respondent claims that the subject property which is the family
home duly constituted by spouses Marcelino and Perla Dario cannot be
partitioned while a minor beneficiary is still living therein namely, his 12-
year-old son, who is the grandson of the decedent. He argues that as
long as the minor is living in the family home, the same continues as
such until the beneficiary becomes of age. Private respondent insists
that even after the expiration of ten years from the date of death of
Marcelino on July 5, 1987, i.e., even after July 1997, the subject property
continues to be considered as the family home considering that his
minor son, Marcelino Lorenzo R. Dario IV, who is a beneficiary of the
said family home, still resides in the premises.
On the other hand, petitioner alleges that the subject property remained
as a family home of the surviving heirs of the late Marcelino V. Dario
only up to July 5, 1997, which was the 10th year from the date of death
of the decedent. Petitioner argues that the brothers Marcelino Marc and
private respondent Marcelino III were already of age at the time of the
death of their father,8 hence there is no more minor beneficiary to speak
of.
The family home is a sacred symbol of family love and is the repository
of cherished memories that last during one’s lifetime. 9 It is the dwelling
house where husband and wife, or by an unmarried head of a family,
reside, including the land on which it is situated.10 It is constituted jointly
by the husband and the wife or by an unmarried head of a family. 11 The
family home is deemed constituted from the time it is occupied as a
family residence. From the time of its constitution and so long as any of
its beneficiaries actually resides therein, the family home continues to
be such and is exempt from execution, forced sale or attachment except
as hereinafter provided and to the extent of the value allowed by law. 12
The law explicitly provides that occupancy of the family home either by
the owner thereof or by "any of its beneficiaries" must be actual. That
which is "actual" is something real, or actually existing, as opposed to
something merely possible, or to something which is presumptive or
constructive. Actual occupancy, however, need not be by the owner of
the house specifically. Rather, the property may be occupied by the
"beneficiaries" enumerated in Article 154 of the Family Code, which may
include the in-laws where the family home is constituted jointly by the
husband and wife. But the law definitely excludes maids and overseers.
They are not the beneficiaries contemplated by the Code.13
Article 154 of the Family Code enumerates who are the beneficiaries of
a family home: (1) The husband and wife, or an unmarried person who
is the head of a family; and (2) Their parents, ascendants, descendants,
brothers and sisters, whether the relationship be legitimate or
illegitimate, who are living in the family home and who depend upon the
head of the family for legal support.
22
To be a beneficiary of the family home, three requisites must concur: (1)
they must be among the relationships enumerated in Art. 154 of the
Family Code; (2) they live in the family home; and (3) they are dependent
for legal support upon the head of the family.
Moreover, Article 159 of the Family Code provides that the family home
shall continue despite the death of one or both spouses or of the
unmarried head of the family for a period of 10 years or for as long as
there is a minor beneficiary, and the heirs cannot partition the same
unless the court finds compelling reasons therefor. This rule shall apply
regardless of whoever owns the property or constituted the family home.
Article 159 of the Family Code applies in situations where death occurs
to persons who constituted the family home.1âwphi1 Dr. Arturo M.
Tolentino comments on the effect of death of one or both spouses or the
unmarried head of a family on the continuing existence of the family
home:
Upon the death of the spouses or the unmarried family head who
constituted the family home, or of the spouse who consented to the
constitution of his or her separate property as family home, the property
will remain as family home for ten years or for as long as there is a minor
beneficiary living in it. If there is no more beneficiary left at the time
of death, we believe the family home will be dissolved or cease,
because there is no more reason for its existence. If there are
beneficiaries who survive living in the family home, it will continue
for ten years, unless at the expiration of the ten years, there is still
a minor beneficiary, in which case the family home continues until
that beneficiary becomes of age.
After these periods lapse, the property may be partitioned by the heirs.
May the heirs who are beneficiaries of the family home keep it intact by
not partitioning the property after the period provided by this article? We
believe that although the heirs will continue in ownership by not
partitioning the property, it will cease to be a family
home.14 (Emphasis supplied)
Prof. Ernesto L. Pineda further explains the import of Art. 159 in this
manner:
The family home shall continue to exist despite the death of one or both
spouses or of the unmarried head of the family. Thereafter, the length of
its continued existence is dependent upon whether there is still a
minor-beneficiary residing therein. For as long as there is one
beneficiary even if the head of the family or both spouses are
already dead, the family home will continue to exist (Arts. 153,
159). If there is no minor-beneficiary, it will subsist until 10 years
and within this period, the heirs cannot partition the same except
when there are compelling reasons which will justify the
partition. This rule applies regardless of whoever owns the property or
who constituted the family home.15 (Emphasis supplied)
The rule in Article 159 of the Family Code may thus be expressed in this
wise: If there are beneficiaries who survive and are living in the family
home, it will continue for 10 years, unless at the expiration of 10 years,
there is still a minor beneficiary, in which case the family home continues
until that beneficiary becomes of age.
It may be deduced from the view of Dr. Tolentino that as a general rule,
the family home may be preserved for a minimum of 10 years following
the death of the spouses or the unmarried family head who constituted
the family home, or of the spouse who consented to the constitution of
his or her separate property as family home. After 10 years and a minor
beneficiary still lives therein, the family home shall be preserved only
until that minor beneficiary reaches the age of majority. The intention of
the law is to safeguard and protect the interests of the minor
beneficiaryuntil he reaches legal age and would now be capable of
supporting himself. However, three requisites must concur before a
minor beneficiary is entitled to the benefits of Art. 159: (1) the
relationship enumerated in Art. 154 of the Family Code; (2) they live in
the family home, and (3) they are dependent for legal support upon the
head of the family.
Thus, the issue for resolution now is whether Marcelino Lorenzo R. Dario
IV, the minor son of private respondent, can be considered as a
beneficiary under Article 154 of the Family Code.
As to the first requisite, the beneficiaries of the family home are: (1) The
husband and wife, or an unmarried person who is the head of a family;
and (2) Their parents, ascendants, descendants, brothers and sisters,
whether the relationship be legitimate or illegitimate. The term
"descendants" contemplates all descendants of the person or persons
who constituted the family home without distinction; hence, it must
necessarily include the grandchildren and great grandchildren of the
spouses who constitute a family home. Ubi lex non distinguit nec nos
distinguire debemos. Where the law does not distinguish, we should not
distinguish. Thus, private respondent’s minor son, who is also the
grandchild of deceased Marcelino V. Dario satisfies the first requisite.
As to the second requisite, minor beneficiaries must be actually living in
the family home to avail of the benefits derived from Art. 159. Marcelino
Lorenzo R. Dario IV, also known as Ino, the son of private respondent
and grandson of the decedent Marcelino V. Dario, has been living in the
family home since 1994, or within 10 years from the death of the
decedent, hence, he satisfies the second requisite.
However, as to the third requisite, Marcelino Lorenzo R. Dario IV cannot
demand support from his paternal grandmother if he has parents who
are capable of supporting him. The liability for legal support falls
primarily on Marcelino Lorenzo R. Dario IV’s parents, especially his
father, herein private respondent who is the head of his immediate
family. The law first imposes the obligation of legal support upon the
shoulders of the parents, especially the father, and only in their default
is the obligation imposed on the grandparents.
Marcelino Lorenzo R. Dario IV is dependent on legal support not from
his grandmother, but from his father.1âwphi1 Thus, despite residing in
the family home and his being a descendant of Marcelino V. Dario,
Marcelino Lorenzo R. Dario IV cannot be considered as beneficiary
contemplated under Article 154 because he did not fulfill the third
requisite of being dependent on his grandmother for legal support. It is
his father whom he is dependent on legal support, and who must now
establish his own family home separate and distinct from that of his
parents, being of legal age.
Legal support, also known as family support, is that which is provided by
law, comprising everything indispensable for sustenance, dwelling,
clothing, medical attendance, education and transportation, in keeping
with the financial capacity of the family.16 Legal support has the following
characteristics: (1) It is personal, based on family ties which bind the
obligor and the obligee; (2) It is intransmissible; (3) It cannot be
renounced; (4) It cannot be compromised; (5) It is free from attachment
or execution; (6) It is reciprocal; (7) It is variable in amount. 17
Professor Pineda is of the view that grandchildren cannot demand
support directly from their grandparents if they have parents
(ascendants of nearest degree) who are capable of supporting them.
This is so because we have to follow the order of support under Art.
199.18 We agree with this view.
The reasons behind Art. 199 as explained by Pineda and Tolentino: the
closer the relationship of the relatives, the stronger the tie that binds
them. Thus, the obligation to support under Art. 199 which outlines the
order of liability for support is imposed first upon the shoulders of the
closer relatives and only in their default is the obligation moved to the
next nearer relatives and so on.
There is no showing that private respondent is without means to support
his son; neither is there any evidence to prove that petitioner, as the
paternal grandmother, was willing to voluntarily provide for her
grandson’s legal support. On the contrary, herein petitioner filed for the
partition of the property which shows an intention to dissolve the family
home, since there is no more reason for its existence after the 10-year
period ended in 1997.
23
With this finding, there is no legal impediment to partition the subject and thereafter distribute the proceeds of the sale appertaining to the just
property. share of each heir. No pronouncement as to costs.

The law does not encourage co-ownerships among individuals as SO ORDERED.

oftentimes it results in inequitable situations such as in the instant case.
Co-owners should be afforded every available opportunity to divide their
---------------------------------------------------------------------------------------------
co-owned property to prevent these situations from arising.

G.R. No. 86355 May 31, 1990

As we ruled in Santos v. Santos,19 no co-owner ought to be compelled
to stay in a co-ownership indefinitely, and may insist on partition on the
common property at any time. An action to demand partition is JOSE MODEQUILLO, petitioner,
imprescriptible or cannot be barred by laches. Each co-owner may vs.
demand at any time the partition of the common property.20 HON. AUGUSTO V. BREVA FRANCISCO SALINAS, FLORIPER
ABELLAN-SALINAS, JUANITO CULAN-CULAN and DEPUTY
SHERIFF FERNANDO PLATA respondents.
Since the parties were unable to agree on a partition, the court a
quo should have ordered a partition by commissioners pursuant to
Section 3, Rule 69 of the Rules of Court. Not more than three competent Josefina Brandares-Almazan for petitioner.
and disinterested persons should be appointed as commissioners to
make the partition, commanding them to set off to the plaintiff and to
ABC Law Offices for private respondents.
each party in interest such part and proportion of the property as the
court shall direct.
GANCAYCO, J.:
When it is made to appear to the commissioners that the real estate, or
a portion thereof, cannot be divided without great prejudice to the The issue in this petition is whether or not a final judgment of the Court
interest of the parties, the court may order it assigned to one of the of Appeals in an action for damages may be satisfied by way of
parties willing to take the same, provided he pays to the other parties execution of a family home constituted under the Family Code.
such sum or sums of money as the commissioners deem equitable,
unless one of the parties interested ask that the property be sold instead
of being so assigned, in which case the court shall order the The facts are undisputed.
commissioners to sell the real estate at public sale, and the
commissioners shall sell the same accordingly.21 On January 29, 1988, a judgment was rendered by the Court of Appeals
in CA-G.R. CV No. 09218 entitled "Francisco Salinas, et al. vs. Jose
The partition of the subject property should be made in accordance with Modequillo, et al.," the dispositive part of which read as follows:
the rule embodied in Art. 996 of the Civil Code.22 Under the law of
intestate succession, if the widow and legitimate children survive, the WHEREFORE, the decision under appeal should
widow has the same share as that of each of the children. However, be, as it is hereby, reversed and set aside.
since only one-half of the conjugal property which is owned by the Judgment is hereby rendered finding the
decedent is to be allocated to the legal and compulsory heirs (the other defendants-appellees Jose Modequillo and Benito
half to be given exclusively to the surviving spouse as her conjugal share Malubay jointly and severally liable to plaintiffs-
of the property), the widow will have the same share as each of her two appellants as hereinbelow set forth. Accordingly,
surviving children. Hence, the respective shares of the subject property, defendants-appellees are ordered to pay jointly and
based on the law on intestate succession are: (1) Perla Generosa Dario, severally to:
4/6; (2) Marcelino Marc G. Dario II, 1/6 and (3) Marcelino G. Dario III,
1/6.
1. Plaintiffs-appellants, the Salinas spouses:
23
In Vda. de Daffon v. Court of Appeals, we held that an action for
partition is at once an action for declaration of co-ownership and for a. the amount of P30,000.00 by way of
segregation and conveyance of a determinate portion of the properties compensation for the death of their son Audie
involved. If the court after trial should find the existence of co-ownership Salinas;
among the parties, the court may and should order the partition of the
properties in the same action.24 b. P10,000.00 for the loss of earnings by reason of
the death of said Audie Salinas;
WHEREFORE, the petition is GRANTED. The Resolution of the Court
of Appeals in CA-G.R. CV No. 80680 dated December 9, 2005, is c. the sum of P5,000.00 as burial expenses of
REVERSED and SET ASIDE. The case is REMANDED to the Regional Audie Salinas; and
Trial Court of Quezon City, Branch 78, who is directed to conduct a
PARTITION BY COMMISSIONERS and effect the actual physical
partition of the subject property, as well as the improvements that lie d. the sum of P5,000.00 by way of moral damages.
therein, in the following manner: Perla G. Dario, 4/6; Marcelino Marc G.
Dario, 1/6 and Marcelino G. Dario III, 1/6. The trial court is DIRECTED 2. Plaintiffs-appellants Culan-Culan:
to appoint not more than three (3) competent and disinterested persons,
who should determine the technical metes and bounds of the property
and the proper share appertaining to each heir, including the a. the sum of P5,000.00 for hospitalization
improvements, in accordance with Rule 69 of the Rules of Court. When expenses of Renato Culan- Culan; and
it is made to the commissioners that the real estate, or a portion thereof,
cannot be divided without great prejudice to the interest of the parties, b. P5,000.00 for moral damages.
the court a quo may order it assigned to one of the parties willing to take
the same, provided he pays to the other parties such sum or sums of
money as the commissioners deem equitable, unless one of the parties 3. Both plaintiff-appellants Salinas and Culan-
interested ask that the property be sold instead of being so assigned, in Culan, P7,000.00 for attorney's fees and litigation
which case the court shall order the commissioners to sell the real estate expenses.
at public sale, and the commissioners shall sell the same accordingly,

24
 All counterclaims and other claims are hereby
dismissed. 1
The said judgment having become final and executory, a writ of
execution was issued by the Regional Trial Court of Davao City to satisfy
the said judgment on the goods and chattels of the defendants Jose
Modequillo and Benito Malubay at Malalag, Davao del Sur.
On July 7, 1988, the sheriff levied on a parcel of residential land located
at Poblacion Malalag, Davao del Sur containing an area of 600 square
meters with a market value of P34,550.00 and assessed value of
P7,570.00 per Tax Declaration No. 87008-01359, registered in the name
of Jose Modequillo in the office of the Provincial Assessor of Davao del
Sur; and a parcel of agricultural land located at Dalagbong Bulacan,
Malalag, Davao del Sur containing an area of 3 hectares with a market
value of P24,130.00 and assessed value of P9,650.00 per Tax
Declaration No. 87-08-01848 registered in the name of Jose Modequillo
in the office of the Provincial Assessor of Davao del Sur. 2
A motion to quash and/or to set aside levy of execution was filed by
defendant Jose Modequillo alleging therein that the residential land
located at Poblacion Malalag is where the family home is built since
1969 prior to the commencement of this case and as such is exempt
from execution, forced sale or attachment under Articles 152 and 153 of
the Family Code except for liabilities mentioned in Article 155 thereof,
and that the judgment debt sought to be enforced against the family
home of defendant is not one of those enumerated under Article 155 of
the Family Code. As to the agricultural land although it is declared in the
name of defendant it is alleged to be still part of the public land and the
transfer in his favor by the original possessor and applicant who was a
member of a cultural minority was not approved by the proper
government agency. An opposition thereto was filed by the plaintiffs.
In an order dated August 26, 1988, the trial court denied the motion. A
motion for reconsideration thereof was filed by defendant and this was
denied for lack of merit on September 2, 1988.
Hence, the herein petition for review on certiorari wherein it is alleged
that the trial court erred and acted in excess of its jurisdiction in denying
petitioner's motion to quash and/or to set aside levy on the properties
and in denying petitioner' motion for reconsideration of the order dated
August 26, 1988. Petitioner contends that only a question of law is
involved in this petition. He asserts that the residential house and lot was
first occupied as his family residence in 1969 and was duly constituted
as a family home under the Family Code which took effect on August 4,
1988. Thus, petitioner argues that the said residential house and lot is
exempt from payment of the obligation enumerated in Article 155 of the
Family Code; and that the decision in this case pertaining to damages
arising from a vehicular accident took place on March 16, 1976 and
which became final in 1988 is not one of those instances enumerated
under Article 155 of the Family Code when the family home may be
levied upon and sold on execution. It is further alleged that the trial court
erred in holding that the said house and lot became a family home only
on August 4, 1988 when the Family Code became effective, and that the
Family Code cannot be interpreted in such a way that all family
residences are deemed to have been constituted as family homes at the
time of their occupancy prior to the effectivity of the said Code and that
they are exempt from execution for the payment of obligations incurred
before the effectivity of said Code; and that it also erred when it declared
that Article 162 of the Family Code does not state that the provisions of
Chapter 2, Title V have a retroactive effect.
Articles 152 and 153 of the Family Code provide as follows:
Art. 152. The family home, constituted jointly by the
husband and the wife or by an unmarried head of a
family, is the dwelling house where they and their
family reside, and the land on which it is situated.
Art. 153. The family home is deemed constituted on
a house and lot from the time it is occupied as a
family residence. From the time of its constitution
and so long as any of its beneficiaries actually
resides therein, the family home continues to be
such and is exempt from execution, forced sale or
attachment except as hereinafter provided and to
the extent of the value allowed by law.
Under the Family Code, a family home is deemed constituted on a house
and lot from the time it is occupied as a family residence. There is no
need to constitute the same judicially or extrajudicially as required in the
Civil Code. If the family actually resides in the premises, it is, therefore,
a family home as contemplated by law. Thus, the creditors should take
the necessary precautions to protect their interest before extending
credit to the spouses or head of the family who owns the home.
Article 155 of the Family Code also provides as follows:
Art. 155. The family home shall be exempt from
execution, forced sale or attachment except:
(1) For non-payment of taxes;
(2) For debts incurred prior to the constitution of the
family home;
(3) For debts secured by mortgages on the
premises before or after such constitution; and
(4) For debts due to laborers, mechanics,
architects, builders, material men and others who
have rendered service or furnished material for the
construction of the building.
The exemption provided as aforestated is effective from the time of the
constitution of the family home as such, and lasts so long as any of its
beneficiaries actually resides therein.
In the present case, the residential house and lot of petitioner was not
constituted as a family home whether judicially or extrajudicially under
the Civil Code. It became a family home by operation of law only under
Article 153 of the Family Code. It is deemed constituted as a family home
upon the effectivity of the Family Code on August 3, 1988 not August 4,
one year after its publication in the Manila Chronicle on August 4, 1987
(1988 being a leap year).
The contention of petitioner that it should be considered a family home
from the time it was occupied by petitioner and his family in 1969 is not
well- taken. Under Article 162 of the Family Code, it is provided that "the
provisions of this Chapter shall also govern existing family residences
insofar as said provisions are applicable." It does not mean that Articles
152 and 153 of said Code have a retroactive effect such that all existing
family residences are deemed to have been constituted as family homes
at the time of their occupation prior to the effectivity of the Family Code
and are exempt from execution for the payment of obligations incurred
before the effectivity of the Family Code. Article 162 simply means that
all existing family residences at the time of the effectivity of the Family
Code, are considered family homes and are prospectively entitled to the
benefits accorded to a family home under the Family Code. Article 162
does not state that the provisions of Chapter 2, Title V have a retroactive
effect.
Is the family home of petitioner exempt from execution of the money
judgment aforecited No. The debt or liability which was the basis of the
judgment arose or was incurred at the time of the vehicular accident on
March 16, 1976 and the money judgment arising therefrom was
rendered by the appellate court on January 29, 1988. Both preceded the
effectivity of the Family Code on August 3, 1988. This case does not fall
under the exemptions from execution provided in the Family Code.
25
As to the agricultural land subject of the execution, the trial court
correctly ruled that the levy to be made by the sheriff shall be on
whatever rights the petitioner may have on the land.
WHEREFORE, the petition is DISMISSED for lack of merit. No
pronouncement as to costs.
SO ORDERED.
----------------------------------------------------------------------------------------------
-
G.R. No. 108532 March 9, 1999
PABLITO TANEO, JR., JOSE TANEO, NENA T. CATUBIG and
HUSBAND, CILIA T. MORING and HUSBAND, petitioners,
vs.
COURT OF APPEALS and ABDON GILIG, respondents.
KAPUNAN, J.:
The issues in this case are not novel: whether or not the conveyance
made by way of the sheriff's sale pursuant to the writ of execution issued
by the trial court in Civil Case No. 590 is prohibited under Sec. 118 of
Commonwealth Act No. 141; and whether or not the family home is
exempt from execution.
As a result of a judgment in Civil Case No. 590 (for recovery of property)
in favor of private respondent, two (2) of petitioners' properties were
levied to satisfy the judgment amount of about P5,000.00: one was a
parcel of land located in Barrio Igpit, Municipality of Opol, Misamis
Oriental with an area of about five (5) hectares, and the other was the
family home also located at Igpit, Opol, Misamis Oriental. The subject
properties were sold at public auction on February 12, 1966 to the
private respondent as the highest bidder. Consequently, after
petitioners' failure to redeem the same, a final deed of conveyance was
executed on February 9, 1968, definitely selling, transferring, and
conveying said properties to the private respondent.
To forestall such conveyance, petitioners filed an action on November
5, 1985 (docketed as Civil Case No. 10407) to declare the deed of
conveyance void and to quiet title over the land with a prayer for a writ
of preliminary injunction. In their complaint, it was alleged that petitioners
are the children and heirs of Pablo Taneo and Narcisa Valaceras who
died on February 12, 1977 and September 12, 1984, respectively. Upon
their death, they left the subject property covered by OCT No. P-12820
and Free Patent No. 548906. Considering that said property has been
acquired through free patent, such property is therefore inalienable and
not subject to any encumbrance for the payment of debt, pursuant to
Commonwealth Act No. 141. Petitioners further alleged that they were
in continuous, open and peaceful possession of the land and that on
February 9, 1968. Deputy Provincial Sheriff Jose V. Yasay issued a
Sheriffs Deed of Conveyance in favor of the private respondent over the
subject property including their family home which was extrajudicially
constituted in accordance with law. As a result of the alleged illegal deed
of conveyance, private respondent was able to obtain in his name Tax
Declaration No. 851920 over the land, thus casting a cloud of doubt over
the title and ownership of petitioners over said property.
Private respondent refuted petitioners' contentions alleging that he
lawfully acquired the subject properties described as Lot No. 5545, Cad.
237 which was a private land, by virtue of a Sheriffs Sale on February
12, 1996. Said sale has become final as no redemption was made within
one year from the registration of the Sheriffs Certificate of Sale. The
validity of the sale in favor of Abdon Gilig was even confirmed by the
Court of Appeals in a related case (CA No. 499965-R) entitled "Arriola
v. Gilig," where one Rufino Arriola also claimed ownership over the
subject property.
Private respondent averred that the subject land was originally owned
by Lazaro Ba-a who sold the land to Pablo Taneo on September 18,
1941, as evidenced by an Escritura de Venta. Despite it being a private
land, Pablo Taneo filed an application for free patent which was final
only in 1979.
As counterclaim, private respondent alleged that since petitioners are
still in possession of the subject property, he has been deprived of acts
of ownership and possession and therefore, prayed for payment of
rentals from February, 1968 until possession has been restored to them.
In its decision of March 27, 1989, the RTC dismissed the complaint.
The dispositive portion thereof reads as follows:
Premises considered, Judgment is hereby rendered in favor of the
defendant and against the plaintiffs, ordering the dismissal of the
complaint filed by the plaintiffs;
a) Declaring OCT No. P-12820 and Free Patent No 548906 both in the
name of Pablo Taneo as null and void and directing the Register of
Deeds to cancel the same, without prejudice however on the part of the
defendant to institute legal proceedings for the transfer of the said title
in the name of defendant Abdon Gilig;
b) Declaring Abdon Gilig as the absolute and legal owner of the land
covered by OCT No. P-12820, and covered by Tax Declaration No.
851920,and hence entitled to the possession of the same and as a
necessaryconcomitant, admonishing the plaintiffs to refrain from
disturbing the peaceful possession of the defendant over the land in
question.
c) Likewise declaring the defendant Abdon Gilig as the true and absolute
owner of the house in question formerly declared under Tax Declaration
No.4142 in the name of Pablo Taneo and presentlydeclared under Tax
Declaration No 851916 inthe name of Abdon Gilig; ordering the plaintiffs
or any of their representatives to vacate and return the possession of
the same to defendant Abdon Gilig;
d) Ordering the plaintiffs, except the nominal parties herein, to pay to
defendant Abdon Gilig the amount of P500.00 a month as reasonable
rental of the house in question to be reckoned from February 9, 1968
until the possession of the same is returned to the defendant.
e) To pay to defendant the amount of P5,000.00 as attorney's fees and
to pay the costs.
SO ORDERED. 1
On appeal, the Court of Appeals affirmed in toto the decision of the RTC.
Hence, this petition.
The petition is devoid of merit.
In resolving the issues, the lower court made the following findings of
fact which this Court finds no cogent reason to disturb:
1. That the land in question originally belonged to Lazaro Ba-a who sold
the same to the late Pablito (sic) Taneo father of the herein plaintiff on
September 18, 1941, by virtue of an Escritura de Venta identified as
Reg. Not. 50; pages 53, Foleo Not. V, Series of 1941 of the Notarial
Register of Ernie Pelaez (Exh. 10);
2. That on July 19, 1951 Abdon Gilig with his wife filed a Civil Case No.
590 for recovery of property against Pablo Taneo, et al., wherein
Judgment was rendered on June 24, 1964, in favor of Abdon Gilig and
26
against Pablo Taneo ordering the latter to pay damages in the amount
of P5,000.00 (Exh. 2);
3. That by virtue of said decision, a writ of Execution was issued on
November 22, 1965 against the properties of Pablo Taneo and on
December 1, 1965, a Notice of Levy was executed by the Clerk of Court
Pedro Perez wherein the properties in question were among the
properties levied by the Sheriff (Exh 3);
4. That the said properties were sold atpublic auction wherein the
defendant Abdon Gilig came out as the highest bidder and on February
12, 1965, a Sheriffs Certificate of Sale was executed by Ex-
Oficio Provincial Sheriff Pedro Perez (Exh. 1) ceding the said properties
in favor of Abdon Gilig and which Certificate of Sale was registered with
the Register of Deeds on March 2, 1966;
5. That for failure to redeem the said property within the reglementary
period, a Sheriffs final Deed of Conveyance was executed by same
Provincial Sheriff Jose V. Yasay on February 1968, (Exhs. 4, 4-A)
conveying the property definitely to Abdon Gilig.
6. That on April 20, 1966, after his third-party claim which he filed with
the Sheriff in Civil Case No. 590 was not given due course, Rufino
Arriola filed Civil Case No. 2667 entitled Arriola vs. Abdon Gilig, et al.,
for Recovery of Property and/or annulment of Sale with Damages;
7. That Judgment was rendered by the Court thru Judge Bernardo Teves
dismissing the case with costs on February 21, 1969;
8. That said decision was appealed to the Court of Appeals which
affirmed the decision in toto on June 20, 979, declaring the alleged Deed
of Sale executed by Abdon Gilig in favor of the plaintiff as null and void
for being simulated or fictitious and executed in fraud or (sic) creditors;
9. That on March 7, 1964, Pablo Taneo constituted the house in question
erected on the land of Plutarco Vacalares as a family home (Exh. F) but
was however, notarized only on May 2, 1965 and registered with the
Register of Deeds on June 24, 1966.
10. That in the meanwhile, unknown to the defendant, Pablo Taneo
applied for a free patent on the land in question which was approved on
October 13, 1973, (Exh. B) and the Patent and Title issued on December
10, 1980 (Oct No. P-12820 - Exh. 12);
11. On November 3, 1985, the plaintiff filed the
present action. 2
Petitioners contend that under Section 118 of Commonwealth Act No.
141, the subject land which they inherited from their father under free
patent cannot be alienated or encumbered in violation of the law. Citing
in particular the cases of Oliveros v. Porciongcola 3 and Gonzaga v.
Court of Appeals, 4 the execution or auction sale of the litigated land falls
within the prohibited period and is. likewise, a disavowal of the rationale
of the law which is to give the homesteader or patentee every chance to
preserve for himself and his family the land which the State had
gratuitously given to him as a reward for his labor in cleaning and
cultivating it. 5
We are not unmindful of the intent of the law. In fact, in Republic v. Court
of Appeals, 6 the Court elucidated, to wit:
It is well-known that the homestead laws were designed to distribute
disposable agricultural lots of the State to land-destitute citizens for their
home and cultivation. Pursuant to such benevolent intention the State
prohibits the sale or encumbrance of the homestead (Section 116) within
five years after the grant of the patent. After that five-year period the law
impliedly permits alienation of the favor homestead; but in line with the
primordial purpose to favor the homesteader and his family the statute
provides that such alienation or conveyance (Section 117) shall be
subject to the right of repurchase by the homesteader, his widow of heirs
within five years. This Section 117 is undoubtedly a complement of
Section 116. It aims to preserve and keep in the family of the
homesteader that portion of public land which the State had gratuitously
given to him. It would, therefore, be in keeping with this fundamental
idea to hold, as we hold, that the right to repurchase exists not only when
the original homesteader makes the conveyance, but also when it is
made by his widow or heirs. This construction is clearly deducible from
the terms of the statute.
The intent of the law is undisputable but under the facts of the case, the
prohibition invoked by the petitioners under Section 118 does not apply
to them.
Sec. 118 of Commonwealth Act No. 141 reads:
Except in favor of the Government or any of its branches, units or
institution, or legally constituted banking corporations, lands acquired
under free patent or homestead provisions shall not be subject to
encumbrance or alienation from the date of the approval of the
application and for a term of five years from and after the date of
issuance of the patent or grant, nor shall they become liable to the
satisfaction of any debt contracted prior to the expiration of said period,
but the improvements or crops on the land may be mortgaged or
pledged to qualified persons, associations, or corporations.
xxx xxx xxx
The prohibition against alienation of lands acquired by homestead or
free patent commences on the date of the approval of the application for
free patent and the five-year period is counted from the issuance of the
patent. The reckoning point is actually the date of approval of the
application. In Amper v. Presiding Judge, 7 the Court held that:
. . . The date when the prohibition against the alienation of lands
acquired by homesteads or free patents commences is "the date of the
approval of the application" and the prohibition embraces the entire five-
year period "from and after the date of issuance of the patent or, grant."
As stated in Beniga v. Bugas, (35 SCRA 111), the provision would make
no sense if the prohibition starting "from the date of the approval of the
application" would have no termination date.
The specific period of five years within which the alienation or
encumbrance of a homestead is restricted starts to be computed from
the date of the issuance of the patent. But the prohibition of alienation
commences from the date the application is approved which comes
earlier. (Emphasis ours.)
Following this ruling, we agree with the respondent court that the
conveyance made by way of the sheriff's sale was not violative of the
law. The judgment obligation of the petitioners against Abdon Gilig arose
on June 24, 1964. The properties were levied and sold at public auction
with Abdon Gilig as the highest bidder on February 12, 1966. On
February 9, 1968, the final deed of conveyance ceding the subject
property to Abdon Gilig was issued after the petitioners failed to redeem
the property after the reglementary period. Pablo Taneo`s application for
free parent was approved only on October 19, 1973.
The sequence of the events leads us to the inescapable conclusion that
even before the application for homestead had been approved, Pablo
Taneo was no longer the owner of the land. The deed of conveyance
issued on February 9, 1968 finally transferred the property to Abdon
Gilig. As of that date, Pablo Taneo did not actually have transferred to
herein petitioners. The petitioners are not the owners of the land and
cannot claim to be such by invoking Commonwealth Act No. 141. The
prohibition does not apply since it is clear from the records that the
judgment debt and the execution sale took place prior to the approval of
the application for free patent. We quote with favor the respondent
court's valid observation on the matter:
. . . the application of Pablo Taneo for a free patent was approved only
on 19 October 1973 and Free Patent was issued on 10 December 1980.
27
Under the aforecited provision, the subject land could not be made liable
for the satisfaction of any debt contracted from the time of the application
and during the 5-year period following 10 December 1980, or until 10
December 1985. However, debts contracted prior to the approval of the
application for free patent, that is prior to 18 October 1973, are
notcovered by the prohibition. This is becausethey do not fall within the
scope of the prohibited period. In this case, the judgment debt in favor
of defendant-appellee was rendered on 24 June 1964, the writ of
execution issued on 22 November 1965, notice of levy made on 1
December 1965, the execution sale held on 12 February 1966, and the
certificate of sale registered on 2 March 1966, all before Pablo Taneo's
application for free patent was approved on 19 October 1973. The
execution, therefore, was not violative of the law. 8
Anent the second issue, petitioners aver that the house which their
father constituted as family home is exempt from execution. In a last
ditch effort to save their property, petitioners invoke the benefits
accorded to the family home under the Family Code.
A family home is the dwelling place of a person and his family. It is said,
however, that the family home is a real right, which is gratuitous,
inalienable and free from attachment, constituted over the dwelling place
and the land on which it is situated, which confers upon a particular
family the right to enjoy such properties, which must remain with the
person constituting it and his heirs. 9 It cannot be seized by creditors
except in certain specials cases.
Under the Civil Code (Articles 224 to 251), a family home may be
constituted judicial and extrajudicially, the former by the filing of the
petition and with the approval of the proper court, and the latter by the
recording of a public instrument in the proper registry of property
declaring the establishment of the family home. The operative act then
which created the family home extrajudicially was the registration in the
Registry of Property of the declaration prescribed by Articles 240 and
241 of the Civil Code. 10
Under the Family Code, however. registration was no longer necessary
Article 153 of the Family Code provides that the family home is deemed
constituted on a house and lot from the time it is occupied in the family.
It reads:
The family home is deemed constituted on a house
and lot from the time it is occupied as family
residence. From the time of its constitution and so
long as its beneficiaries actually resides therein, the
family home continues to be such and is exempt
from execution, forced sale or attachment, except
as hereinafter provided and to the extent of the
value allowed by law.
It is under the foregoing provision which petitioners seek refuge to avert
execution of the family home arguing that as early as 1964, Pablo Taneo
had already constituted the house in question as their family home.
However, the retroactive effect of the Family Code, particularly on the
provisions on the family home has been clearly laid down by the court
as explained in the case of Manacop v. Court of Appeals 11 to wit:
Finally, the petitioner insists that the attached property is a family home,
having been occupied by him and his family since 1972, and is therefore
exempt from attachment.
The contention is not well-taken.
While Article 153 of the Family Code provides that the family home is
deemed constituted on a house and lot from the time it is occupied as a
family residence, it does not mean that said article has a retroactive
effect such that all existing family residences, petitioner's included, are
deemed to have been constituted as family homes at the time of their
occupation prior to the effectivity of the Family Code and henceforth, are
exempt from execution for the payment of obligations incurred before
the effectivity of the Family Code on August 3, 1988 (Mondequillo vs.
Breva, 185 SCRA 766). Neither does Article 162 of said Code state that
the provisions of Chapter 2, Title V thereof have retroactive effect. It
simply means that all existing family residences at the time of the
effectivity of the Family Code are considered family homes and are
prospectively entitled to the benefits accorded to a family home under
the Family Code (Modequillo vs. Breva, supra). Since petitioner's debt
was incurred as early as November 25, 1987, it preceded the effectivity
of the Family Code. His property is therefore not exempt from
attachment (Annex "O," Plaintiff's Position Paper and Memorandum of
Authorities, p. 78)." (pp. 5-6, Decision; pp. 64-65, Rollo) (emphasis ours)
The applicable law, therefore. in the case at bar is still the Civil Code
where registration of the declaration of a family home is a prerequisite.
Nonetheless, the law provides certain instances where the family home
is not exempted from execution, forced sale or attachment.
Art. 243 reads:
The family home extrajudicially formed shall be
exempt from execution, forced sale or
attachment, except:
(1) For nonpayment of taxes;
(2) For debts incurred before the declaration was
recorded in the Registry of Property;
(3) For debts secured by mortgages on the
premises before or after such record of the
declaration;
(4) For debts due to laborers, mechanics,
architects, builders, material-men and others who
have rendered service or furnished material for the
construction of the building. 12
The trial court found that on March 7, 1964, Pablo Taneo constituted the
house in question, erected on the land of Plutarco Vacalares, as the
family home. The instrument constituting the family home was registered
only on January 24, 1966. The money judgment against Pablo Taneo
was rendered on January 24, 1964. Thus, at that time when the "debt"
was incurred, the family home was not yet constituted or even
registered. Clearly, petitioners' alleged family home, as constituted by
their father is not exempt as it falls under the exception of Article 243
(2).
Moreover, the constitution of the family home by Pablo Taneo is even
doubtful considering that such constitution did not comply with the
requirements of the law. The trial court found that the house was erected
not on the land which the Taneos owned but on the land of one Plutarco
Vacalares. By the very definition of the law that the "family home is the
dwelling house where a person and his family resides and the land on
which it is situated," 13 it is understood that the house should be
constructed on a land not belonging to another. Apparently, the
constitution of a family home by Pablo Taneo in the instant case was
merely an afterthought in order to escape execution of their property but
to no avail.
WHEREFORE, the petition is DENIED for lack of merit.
SO ORDERED.
----------------------------------------------------------------------------------------------
----
G.R. No. 186322 July 8, 2015
ENRICO S. EULOGIO and NATIVIDAD V. EULOGIO, Petitioners,
vs.
PATERNO C. BELL, SR., ROGELIA CALINGASAN-BELL, PATERNO
28
WILLIAM BELL, JR., FLORENCE FELICIA VICTORIA BELL,
PATERNO FERDINAND BELL III, and PATERNO BENERAÑO BELL
IV, Respondents.
DECISION
SERENO, CJ:
This is a Petition for Review on Certiorari assailing the Court of Appeals
(CA) Decision1 in CA-G.R. SP No. 87531 which granted the Petition for
Certiorari filed by respondents and enjoined the execution sale of their
family home for the satisfaction of the money judgment awarded to
petitioners in Civil Case No. 4581, and the Resolution2 which denied
petitioners Motion for Reconsideration.
ANTECEDENT FACTS
Respondents Paterno William Bell, Jr., Florence Felicia Victoria Bell,
Paterno Ferdinand Bell III, and Paterno Benerano IV (the Bell siblings)
are the unmarried children of respondent Spouses Paterno C. Bell and
Rogelia Calingasan-Bell (Spouses Bell). In 1995, the Bell sibling lodged
a Complaint for annulment of documents, reconveyance, quieting of title
and damages against petitioner Enrico S. Eulogio and Natividad Eulogio
(the Eulogios). It was docketed as Civil Case No. 4581 at the Regional
Trial Court (RTC) of Batangas City, Branch 84. The complaint sought
the annulment of the contract of sale executed by Spouses Bell over
their 329-square-meter residential house and lot, as well the as the
cancellation of the title obtained by petitioners by virtue of the Deed.
The RTC granted respondents’ prayers, but declared Spouses Bell
liable to petitioners in the amount of 1 million plus 12% interest per
annum. The dispositive portion of the Decision dated 15 July 1998 reads
as follows:
WHEREFORE, prescinding from all the foregoing, the Court hereby
declares:
1. That the sale of the subject house and lot under Deed of
Sale marked as Exhibit "F" is only an equitable mortgage in
favor of the defendants Enrico Eulogio and Natividad Eulogio.
However, the mortgage cannot bind the property in question
for being violative of Chapter 2, Title 4 of the Family Code, its
encumbrance not having been consented to in writing by a
majority of the beneficiaries who are the plaintiffs herein;
2. The said equitable mortgage is deemed to be an unsecured
mortgage [sic] for which the Spouses Paterno C. Bell, Sr. and
Rogelia Calingasan Bell as mortgagors are liable to the
defendants-spouses Enrico Eulogio and Natividad Eulogio in
the amount of 1,000,000 plus interest of 12% per annum.
However, under the Fourth Party Complaint Sps. Paterno C.
Bell, Sr. and Rogelia Calingasan Bell have the right of
reimbursement from fourth party defendants Nicolas Morana
and Julieta Morana for whom their loan of 1,000,000 was
secured by Sps. Paterno C. Bell, Sr. and Rogelia Calingasan
Bell. Accordingly, the fourth party defendants Nicolas Morana
and Julieta Morana are hereby ordered to reimburse Paterno
C. Bell, Sr. and Rogelia Calingasan Bell the loan of 1,000,00
plus interest of 12% per annum to be paid by the latter to
defendants Enrico and Natividad Eulogio;
3. The house and lot in question free from any and all
encumbrances by virtue of said equitable mortgage or the
purported sale; and
4. The Deed of Sale (Exhibit "F") is null and void for being
contrary to law and public policy.
Accordingly, (1) the Register of Deeds of Batangas City is hereby
ordered to cancel Transfer Certificate of Title No. T-131472 in the name
of defendants Enrico S. Eulogio and Natividad Eulogio and to re-
constitute (sic) Transfer Certificate of Title No. RT-680-(5997) as "family
home" of the plaintiffs Florence Felicia Victoria C. Bell, Paterno William
C. Bell Jr., Paterno Ferdinand C. Bell III, Paterno Benerano C. Bell IV
and fourth party plaintiffs Paterno C. Bell Sr. and Rogelia Calingasan
Bell; or in the alternative to issue a new Transfer Certificate of Title under
the same tenor;
2. The City Assessor of Batangas City is hereby directed to issue a tax
declaration covering the said subject property as family home for the
said plaintiffs and fourth party plaintiffs Paterno C. Bell and Rogelia
Calingasan Bell; and
3. Defendants Enrico Eulogio and Natividad Eulogio are ordered to pay
the plaintiffs attorney’s fees and litigation expenses of 35,000.00 as the
plaintiffs have been compelled to litigate to protect their property right,
and costs,3
Both petitioners and respondent appealed to the CA, but the trial court’s
Decision was affirmed en too. Spouses Bell later brought the case to this
Court to question their liability to petitioners in the amount of 1 million
plus interest. The Court, however, dismissed their Petition for failure to
show any reversible error committed by the CA.4 Thereafter, entry of
judgment was made.5
On 9 June 2004 the RTC issued a Writ of Execution as a result of which
respondents’ property covered by the newly reconstituted Transfer
Certificate of Title (TCT) No. 54208 [formerly RT-680 (5997)] was levied
on execution. Upon motion by respondents, trial court, on 31 August
2004, ordered the lifting of the writ of the execution on the ground that
the property was a family home.6
Petitioners filed a Motion for Reconsideration of the lifting of the writ of
execution. Invoking Article 160 of the Family Code, they posited that the
current market value of the property exceeded the statutory limit of
300,000 considering that it was located in a commercial area, and that
Spouses Bell had even sold it to them for 1million.7
The RTC, on 13 October 2004, set the case for hearing to determine the
present value of the family hoe of respondents. It also appointed a Board
of Appraisers to conduct a study on the prevailing market value of their
house and lot.8
Respondents sought reconsideration of the above directives and asked
the RTC to cite petitioners for contempt because of forum-
shopping.9 they argued that petitioners’ bid to determine the present
value of the subject property was just a ploy to re-litigate an issue that
had long been settled with finality.
The RTC, however, denied the Motion for Reconsideration10 of
respondents and directed the commissioners to canvass prospective
buyers of their house and lot.11
On 23 November 2004, respondents filed a Petition for Certiorari and
Injunction before the CA.12 where it was docketed as CA-G.R. SP. No.
87531.
Subsequently, the RTC issued on 25 November 2004 an
Order13 dispensing with the valuation report of the commissioners and
directing the issuance of a writ of execution. Consequently, respondents
filed before the CA a Supplemental Petition with an urgent prayer for a
temporary restraining order.14
The CA eventually enjoined.15 the execution sale set on 22 December
200416 by the RTC.
On 31 July 2008, the CA rendered it Decision granting respondent’s
Petition for Certiorari, but it rejected their theory that res judicata had
already set in.
29
The appellate court ruled that the RTC Decision, which had become final
and executory, only declared respondents’ house and lot as a family
home. Since the issue of whether it may be sold in execution was
incidental to the execution of the aforesaid Decision, there was as yet
no res judicata.
Still, the CA found that the trial court committed grave abuse of
discretion in ordering the execution sale of the subject family home after
finding its present value exceeded the statutory limit. The basis for the
valuation of a family home under Article 160, according to the appellate
court, is its actual value at the time of its constitution and not the
market/present value; therefore, the trial court’s order was contrary to
law.17
On 09 February 2009,18 the CA denied petitioners’ Motion for
Reconsideration. Hence, this Petition.
ISSUES
The issues to be resolved are: (1) whether petitioners are guilty of forum-
shopping; (2) whether a hearing to determine the value of respondents’
family home for purposes of execution under Article 160 of the Family
Code is barred under the principle of res judicata; and (3) whether
respondents’ family home may be sold on execution under Article 160
of the Family Code.
THE COURT’S RULING
The Court denies the Petition for lack of merit.
Petitioners are not guilty of forum-shopping.
Forum shopping can be committed in three ways; (1) by filing multiple
cases based on the same cause of action and with the same prayer, the
previous case not having been resolved yet (where the ground for
dismissal is litis pendentia); (2) by filing multiple cases based on the
same cause of action and with the same prayer, the previous case
having been finally resolved (where the ground for dismissal is res
judicata); and (3) by filing multiple cases based on the same cause of
action but with different prayers, or by splitting of causes of action (where
the ground for dismissal is also either litis pendentia or res judicata).19
The essence of forum shopping is the filing of multiple suits involving the
same parties for the same cause of action, either simultaneously or
successively, for the purpose of obtaining a favorable judgment through
means other than by appeal or certiorari.20 Forum shopping does not
apply to cases that arise from an initiatory or original action that has
been elevated by way of appeal or certiorari to higher or appellate courts
or authorities. This is so because the issues in the appellate courts
necessarily differ from those in the lower court, and the appealed cases
are but a continuation of the original case and treated as only one case. 21
Respondents contend that the Decision in Civil Case No. 4581, which
declared that property in dispute was a family home, had long attained
finality. Accordingly, respondents maintain that petitioners’ bid to re-
litigate the present value of the property in the course of the execution
proceedings is barred by res judicata, and that petitioners should be
cited for contempt of court because of forum-shopping.22
Recall that although the trial court had nullified the Deed of Sale over
respondents’ family home in Civil Case No. 4581 for lack of a written
consent from its beneficiaries as required under Article 158 of the Family
Code,23 the court still recognized the validity of the transaction as an
unsecured loan. Hence, it declared Spouses Bell liable to petitioners in
the amount of 1 million plus 12% interest per annum.
Petitioners’ bid to satisfy the above judgment cannot be considered an
act of forum shopping. Simply, the execution of a decision is just the fruit
and end of a suit and is very aptly called the life of the law. 24 It is not
separate from the main case. Similarly, the filing of the instant Petitions
as a continuation of the execution proceedings does not constitute forum
shopping. Seeking a reversal of an adverse judgment or order by appeal
or certiorari does not constitute forum shopping. Such remedies are
sanctioned and provided for the rules.25
Indeed, as will be presently discussed, the causes of action in the main
proceedings in Civil Case No. 4581 and the consequent execution
proceedings are identical. Suffice it to say, however, that the danger of
a multiplicity of suits upon one and the same cause of action, which the
judicial policy against forum shopping seeks to prevent, does not exist
in this case.
Re-litigating the issue of the value of respondents’ family home is barred
by res judicata.
Res judicata (meaning, a "matter adjudged") is a fundamental principle
of law that precludes parties from re-litigating issues actually litigated
and determined by a prior and final judgment.26 Under the 1997 Rules
of Court, there are two aspects of res judicata, namely: bar by prior
judgment.27 and conclusiveness of judgment.28
There is "bar by prior judgment" when, as between the first case in which
the judgment has been rendered and the second case that is sought to
be barred, there is an identity of parties, subject matter, and causes of
action. In this instance, the judgment in the first case constitutes an
absolute bar to the second action. The judgment or decree on the merits
of the court of competent jurisdiction concludes the litigation between
the parties, as well as their privies, and constitutes a bar to a new action
or suit involving the same cause of action before same or any other
tribunal.29
On the other hand, there is "conclusiveness of judgment" where there is
an identity of parties in the first and second cases, but no identity of
causes of action. Under this rule, the first judgment is conclusive only as
to those matters actually and directly controverted and determined and
not as to matters merely involved therein. Stated differently, any right,
fact, or matter in issue directly adjudicated or necessarily involved in the
determination of an action before a competent court in which judgment
is rendered on the merits is conclusively settled by the judgment therein
and cannot again be litigated between the parties and their privies
whether or not the claim, demand, purpose, or subject matter of the two
actions is the same.30
In this case, the trial court’s final decision in Civil Case No. 4581 bars
petitioners’ move to have the property is dispute levied on execution.
There is no question that the main proceedings in Civil Case No. 4581
and the subsequent execution proceedings in Civil Case No. 4581 and
the subsequent execution proceedings involved the same parties 31 and
subject matter.32 for these reasons, respondents argue that the
execution sale of the property in dispute under Article 170 of the Family
Code is barred by res judicata, since the trial court has already
determined that the value of the property fell within the statutory limit.
The CA held that the trial court’s Decision which is indisputably final,
only settled the issue of whether the property in dispute was a family
home. The CA ruled thus:
We rule that there is no res judicata.
At the outset, let it be emphasized that the decision of the trial court
dated July 15, 1998, which has become final and executor, only declared
the subject property as a family home. As a matter of fact, private
respondents never questioned that such property is a family home, and
consequently, the issue as to whether or not the property is family home
is settled and res judicata lies only with respect to this issue.
But the issue as to whether or not a family home could be the subject of
an execution sale was not resolved by the trial court. This issue[was]
raised only when the writ of execution was issued and hence, [was not]
resolved with finality. Thus, the issue before this Court is whether or not
30
the [f]amily [h]ome of petitioners under the facts and circumstances of
the case could be the subject of a writ execution sold at public auction. 33
The Court disagrees with the CA.
"Cause of action" is the act or omission by which a party violates the
right of another.34 It may be argued that the cause of action the main
proceedings was the sale of the property in dispute, while in the
execution proceedings it was the indebtedness of Spouses Bell to
petitioners.
The settled rule, however, is that identity of causes of action does not
mean absolute identity. Otherwise, a party could easily escape the
operation of res judicata by changing the form of the action or the relief
sought.35 The test to determine whether the causes of action are
identical is to ascertain whether the same evidence will sustain both
actions, or whether is an identity of the facts essential to the
maintenance of the two actions. If the same facts or evidence would
sustain both, the two actions considered the same, and a judgment in
the first case would be a bar to the subsequent action. Hence, party
cannot, by varying the form of action or adopting a different method of
presenting the case, escape the operation of the principle that one and
the same cause of action shall not be twice litigated between the same
parties or their privies.36
Among several tests resorted to in ascertaining whether two suits relate
to a single or common cause of action are: (1) whether the same
evidence would support and sustain both the first and the second causes
of action and (2) whether the defenses in one case may be used to
substantiate the complaint in the other. Also fundamental is the test for
determining whether the cause of action in the second case existed at
the time of the filing of the first complaint.37
Applying the above guidelines, the Court finds that the entirety of Civil
Case No. 4581 – including the bid of petitioners to execute the money
judgment awarded to them by the trial court – is founded on a common
cause of action. Records show that the sole evidence submitted by
petitioners during the execution proceedings was the Deed of Sale,
which the trial court had nullified in the main proceedings.
Concomitantly, the very sane defense raised by petitioners in the main
proceedings, i.e., that they had bought the property from Spouses Bell
for 1 million – was utilized to substantiate the claim that the current value
of respondents’ family home was actually 1 million. In fact, the trial
court’s order for respondent’s family home to be levied on execution was
solely based on the price stated in the nullified Deed of Sale.
Res judicata applies, considering that the parties are litigating over the
same property. Moreover, the same contentions and evidence
advanced by the petitioners to substantiate their claim over respondents’
family home have already been used to support their arguments in the
main proceedings.
Any lingering doubt on the application of res judicata to this case should
be put to rest by the trial court’s discussion of the nature and alienability
of the property in dispute, to wit;
The second issue is about the allegation of the plaintiffs that the family
home which has been constituted on the house and lot in question is
exempt from alienation and that its value does not exceed 300,000.
Paterno Bell, Sr. testified that the two-storey house was built in 1947 and
was made of wood and hollow blocks. He inherited it in 1976 from his
parents and has been living there with his family. In 1976, when an extra-
judicial settlement was made of the estate of his parents, the fair market
value of the house was 70,000.
City Assessor Rodezinda Pargas testified and presented Tax
Declaration and others, (Exhibit "J", Tax Declaration No. 005-047)
beginning 1985 showing that the subject lot with an area of 329 sq. m.
had a fair market value of 76,000.00 and the residential house located
thereon of 50,000.00, for a total value of 126,000.00. She testified that
during the prior years the assessed values were lower. This shows that
the limit of the value of 300,000.00 under Article 157, Title 5 of the Family
Code has not been exceeded. The testimonies of the plaintiffs who are
children of Sps. Paterno Bell, Sr. and Rogela Calingasan Bell show that
they had lived in that house together with their said parents. The Court
therefore concludes that the said house is a family home under Chapter
2, Title 5 of the Family Code. Its alienation by the said Spouses without
the written consent of the majority of the children/plaintiffs is null and
void for being contrary to law and public policy as enunciated in Art. 158
of the Family Code.38 [underscoring supplied]
The foregoing points plainly show that the issue of whether the property
in dispute exceeded the statutory limit of 300,000 has already been
determined with finality by the trial court. Its finding necessarily meant
that the property is exempt from execution. Assuming for the sake of
argument that causes of action in the main proceedings and in the
execution proceedings are different, the parties are still barred from
litigating the issue of whether respondents’ family home may be sold on
execution sale under the principle of conclusiveness of judgment.
Respondents’ family home cannot be sold on execution under Article
160 of Family Code.
Unquestionably, the family home is exempt from execution as expressly
provided for in Article 153 of the Family Code.39
It has been said that the family home is a real right that is gratuitous,
inalienable and free from attachment.40 The great controlling purpose
and policy of the Constitution is the protection or the preservation of the
homestead - the dwelling place. A houseless, homeless population is a
burden upon the energy, industry, and morals of the community to which
it belongs. No greater calamity, not tainted with crime, can befall a family
than to be expelled from the roof under which it has been gathered and
sheltered.41 The family home cannot be seized by creditors except in
special cases.42
The nature and character of the property that debtors may claim to be
exempt, however, are determined by the exemption statute. The
exemption is limited to the particular kind of property of the specific
articles prescribed by the statute; the exemption cannot exceed the
statutory limit.43
Articles 155 and 160 of the Family Code specify the exceptions
mentioned in Article 153, to wit:
ARTICLE 155. the family home shall be exempt from execution, forced
sale or attachment except;
1. For nonpayment of taxes;
2. For debts incurred prior to the constitution of the family
home;
3. For debts secured by mortgages on the premises before or
after such constitution; and
4. For debts due to laborers, mechanics, architects, builders,
materialmen and others who have rendered service or
furnished material for the construction of the building.
ARTICLE 160. when a creditor whose claims is not among those
mentioned in Article 155 obtains a judgment in his favor, and he has
reasonable grounds to believe that the family home is actually worth
more than the maximum amount fixed in Article 157, he may apply to
the court which rendered the judgment for an order directing the sale of
the property under execution. The court shall so order if it finds that the
actual value of the family home exceeds the maximum amount allowed
by law as of the time of its constitution. If the increased actual value
exceeds the maximum allowed in Article 157 and results from
subsequent voluntary improvements introduced by the person or
persons constituting the family home, by the owners of the property, or
by any of the beneficiaries, the same rule and procedure shall apply.
31
At the execution sale, no bid below the value allowed for a family home
shall be considered. The proceeds shall be applied first to the amount
mentioned in Article 157, and then to the liabilities under the judgment
and the costs. The excess, is any, shall be delivered to the judgment
debtor.
Related to the foregoing is Article 157 of the Family Code, which
provides:
ARTICLE 157. the actual value of the family home shall not exceed, at
the same time of its constitution, the amount of three hundred thousand
pesos in urban areas, and two hundred thousand pesos in rural areas,
or such amounts as may hereafter be fixed by law.
In any event, if the value of the currency changes after the adoption of
this Code, the value most favorable for the constitutions of a family home
shall be the basis of evaluation.
For purposes of the Article, urban areas are deemed to include
chartered cities and municipalities whose annual income at least equals
that legally required for chartered cities. All others are deemed to be
rural area. [underscoring supplied]
The minutes of the deliberation by the drafters of Family Code on Article
160 are enlightening, to wit:
Justice Puno inquired if the above Article [160] is still necessary. In reply,
Judge Diy opined that the above Article is intended to cover a situation
where the family home is already worth 500,000 or IM.
Justice Reyes stated that it is possible that a family home, originally
valued at 300,000, later appreciated to almost IM because of
improvements made, like roads and plazas. Justice Caguioa, however,
made a distinction between voluntary and involuntary improvements in
the sense that if the value of the family home exceeded the maximum
amount because of voluntary improvements by the one establishing the
family home, the Article will apply; but if it is through an involuntary
improvement, like conversion into a residential area or the establishment
of roads and other facilities, the one establishing the family home should
not be punished by making his home liable to creditors. He suggested
that the matter be clarified in the provision.
Prof. Bautista objected to the phrase "is worth" since if they will specify
that the family home is worth more than the maximum amount at the
time it was constituted, they will avoid the suit because the creditor will
be given proper warning. Justice Puno opined that this is a question of
fact. Justice Caguioa added that, under the second sentence, there will
be a preliminary determination as to whether the family home exceeds
the maximum amount allowed by the law.
Justice Caguia accordingly modified the last sentence as follows:
If the excess in actual value over that allowed in Article 157 is due to
subsequent voluntary improvements by the person or persons
constituting the family home or by the owner or owners of the property,
the same rules and procedure shall apply.
Prof. Bautista objected to the above provision, because it will in effect
penalize the owner for improving the family home. On the other hand,
Justice Puno opined that the provision covers only the excess in actual
value over that allowed by law. Judge Diy added that the owner may
improve the family home up to 300,000. Justice Caguioa stated that
without the above provision, one can borrow money, put it all on
improvement of the family home even beyond the maximum value of a
family home and, thereby, exempt it from levy on the part of the creditor.
He added that anyway, if one voluntarily improves his family home out
of his money, nobody can complain because there are no creditors.
Justice Puno posed the question: what is "due to the subsequent
improvement?" is it the "excess" or is it the "increase", or is it the
"increase", which constitutes the "excess"? in reply, Justice Reyes
opined that it is the "increase" which constituted the "excess". Justice
Puno, Justice Reyes and Justice Caguioa modified the last sentence as
follows:
If the increase in actual value exceeds that maximum allowed in Article
157 and results from subsequent voluntary improvements introduced by
the person or persons constituting the family home or by the owner or
owners of the property, the same rule and procedure shall apply.
Prof. Bautista commented that the phrase "increase in actual value"
does not include the original value. Justice Puno suggested that they
just say "increased actual value", which the Committee approved.44
To summarize, the exemption of the family home from execution, forced
sale or attachment is limited to 300,000 in urban areas and 200,000 in
rural areas, unless those maximum values are adjusted by law. If it is
shown, though, that those amounts do not match the present value of
the peso because of currency fluctuations, the amount of exemption
shall be based on the value that is most favorable to the constitution of
a family home. Any amount in excess of those limits can be applied to
the payment of any of the obligations specified in Articles 155 and 160.
Any subsequent improvement or enlargement of the family home by the
persons constituting it, its owners, or any of its beneficiaries will still be
exempt from execution, forced sale or attachment provided the following
conditions obtain: (a) the actual value of the property at the time of its
constitution has been determined to fall below the statutory limit; and (b)
the improvement or enlargement does not result in an increase in its
value exceeding the statutory limit.45 Otherwise, the family home can be
the subject of a forced sale, and any amount above the statutory limit is
applicable to the obligations under Articles 155 and 160.
Certainly, the humane considerations for which the law surrounds the
family home with immunities from levy do not include the intent to enable
debtors to thwart the just claims of their creditors.46
Petitioners maintain that this case falls under the exceptions to the
exemption of the family home from execution or forced sale. They claim
that the actual value of respondents’ family home exceeds the 300,000
limit in urban areas. This fact is supposedly shown by the Deed of Sale
whereby private respondents agreed to sell the property for 1 million way
back in 1995. Therefore, the RTC only properly ordered the execution
sale of the property under Article 160 to satisfy the money judgment
awarded to them in Civil Case No. 4581.47
As earlier discussed, it has been judicially determined with finality that
the property in dispute is a family home, and that its value at the time of
its constitution was within the statutory limit. Moreover, respondents
have timely claimed the exemption of the property from execution.48 On
the other hand, there is no question that the money judgment awarded
to petitioners falls under the ambit of Article 160.
Notwithstanding petitioners’ right to enforce the trial court’s money
judgment, however, they cannot obtain its satisfaction at the expense of
respondents’ rights over their family home. It is axiomatic that those
asserting the protection of an exception from an exemption must bring
themselves clearly within the terms of the exception and satisfy any
statutory requirement for its enforcement.49
To warrant the execution sale of respondents’ family home under Article
160, petitioners needed to establish these facts: (1) there was an
increase in its actual value; (2) the increase resulted from voluntary
improvements on the property introduced by the persons constituting the
family home, its owners or any of its beneficiaries; and (3) the increased
actual value exceeded the maximum allowed under Article 157.
During the execution proceedings, none of those facts was alleged –
much less proven – by petitioners.1âwphi1 The sole evidence presented
was the Deed of Sale, but the trial court had already determined with
finality that the contract was null, and that the actual transaction was an
32
equitable mortgage. Evidently, when petitioners and Spouses Bells
executed the Deed of Sale in 1990, the price stated therein was not the
actual value of the property in dispute.
The court thus agrees with the CA’s conclusion that the trial court
committed grave abuse of discretion in ordering the sale on execution
of the property in dispute under Article 160. The trial court had already
determined with finality that the property was a family home, and there
was no proof that is value had increased beyond the statutory limit due
to voluntary improvements by respondents. Yet, it ordered the execution
sale of the property. There is grave abuse of discretion when one acts
in a capricious, whimsical, arbitrary or despotic manner in the exercise
of one’s judgment, as in this case in which the assailed order is bereft of
any factual or legal justification.50
WHEREFORE, the Petitioner for Review on Certiorari is hereby DENIED
for lack of merit. Accordingly, the Decision of the Court of Appeals in CA-
GG.R SP No. 87531, enjoining the trial court from proceeding with the
sale of the family home of respondents, is AFFIRMED.
SO ORDERED.
----------------------------------------------------------------------------------------------
G.R. No. 185064 January 16, 2012
SPOUSES ARACELI OLIVA-DE MESA and ERNESTO S. DE
MESA, Petitioner,
vs.
SPOUSES CLAUDIO D. ACERO, JR. and MA. RUFINA D. ACERO,
SHERIFF FELIXBERTO L. SAMONTE and REGISTRAR ALFREDO
SANTOS, Respondents.
DECISION
REYES, J.:
Nature of the Petition
This is a petition for review on certiorari under Rule 45 of the Rules of
Court filed by the Spouses Araceli Oliva-De Mesa (Araceli) and Ernesto
S. De Mesa (Ernesto), assailing the Court of Appeals’ (CA)
Decision1 dated June 6, 2008 and Resolution2 dated October 23, 2008
in CA-G.R. CV No. 79391 entitled "Spouses Araceli Oliva-De Mesa and
Ernesto De Mesa v. Spouses Claudio Acero, Jr., et al."
The Antecedent Facts
This involves a parcel of land situated at No. 3 Forbes Street, Mount
Carmel Homes Subdivision, Iba, Meycauayan, Bulacan, which was
formerly covered by Transfer Certificate of Title (TCT) No. T-76.725 (M)
issued by the Register of Deeds of Meycauayan, Bulacan and registered
under Araceli’s name. The petitioners jointly purchased the subject
property on April 17, 1984 while they were still merely cohabiting before
their marriage. A house was later constructed on the subject property,
which the petitioners thereafter occupied as their family home after they
got married sometime in January 1987.
Sometime in September 1988, Araceli obtained a loan from Claudio D.
Acero, Jr. (Claudio) in the amount of ₱100,000.00, which was secured
by a mortgage over the subject property. As payment, Araceli issued a
check drawn against China Banking Corporation payable to Claudio.
When the check was presented for payment, it was dishonored as the
account from which it was drawn had already been closed. The
petitioners failed to heed Claudio’s subsequent demand for payment.
Thus, on April 26, 1990, Claudio filed with the Prosecutor's Office of
Malolos, Bulacan a complaint for violation of Batas Pambansa Blg. 22
(B.P. 22) against the petitioners. After preliminary investigation, an
information for violation of B.P. 22 was filed against the petitioners with
the Regional Trial Court (RTC) of Malolos, Bulacan.
On October 21, 1992, the RTC rendered a Decision3 acquitting the
petitioners but ordering them to pay Claudio the amount of ₱100,000.00
with legal interest from date of demand until fully paid.
On March 15, 1993, a writ of execution was issued and Sheriff Felixberto
L. Samonte (Sheriff Samonte) levied upon the subject property. On
March 9, 1994, the subject property was sold on public auction; Claudio
was the highest bidder and the corresponding certificate of sale was
issued to him.
Sometime in February 1995, Claudio leased the subject property to the
petitioners and a certain Juanito Oliva (Juanito) for a monthly rent of
₱5,500.00. However, the petitioners and Juanito defaulted in the
payment of the rent and as of October 3, 1998, their total accountabilities
to Claudio amounted to ₱170,500.00.
Meanwhile, on March 24, 1995, a Final Deed of Sale4 over the subject
property was issued to Claudio and on April 4, 1995, the Register of
Deeds of Meycauayan, Bulacan cancelled TCT No. T-76.725 (M) and
issued TCT No. T-221755 (M)5 in his favor.
Unable to collect the aforementioned rentals due, Claudio and his wife
Ma. Rufina Acero (Rufina) (collectively referred to as Spouses Acero)
filed a complaint for ejectment with the Municipal Trial Court (MTC) of
Meycauayan, Bulacan against the petitioners and Juanito. In their
defense, the petitioners claimed that Spouses Acero have no right over
the subject property. The petitioners deny that they are mere lessors; on
the contrary, they are the lawful owners of the subject property and, thus
cannot be evicted therefrom.
On July 22, 1999, the MTC rendered a Decision, 6 giving due course to
Spouses Acero’s complaint and ordering the petitioners and Juanito to
vacate the subject property. Finding merit in Spouses Acero’s claims,
the MTC dismissed the petitioners' claim of ownership over the subject
property. According to the MTC, title to the subject property belongs to
Claudio as shown by TCT No. T-221755 (M).
The MTC also stated that from the time a Torrens title over the subject
property was issued in Claudio’s name up to the time the complaint for
ejectment was filed, the petitioners never assailed the validity of the levy
made by Sheriff Samonte, the regularity of the public sale that was
conducted thereafter and the legitimacy of Claudio’s Torrens title that
was resultantly issued.
The petitioners appealed the MTC’s July 22, 1999 Decision to the RTC.
This appeal was, however, dismissed in a Decision dated November 22,
1999 due to the petitioners’ failure to submit their Memorandum. The
petitioners sought reconsideration of the said decision but the same was
denied in an Order dated January 31, 2000.
Consequently, the petitioners filed a petition for review7 with the CA
assailing the RTC’s November 22, 1999 Decision and January 31, 2000
Order. In a December 21, 2006 Decision,8 the CA denied the petitioner’s
petition for review. This became final on July 25, 2007.9
In the interregnum, on October 29, 1999, the petitioners filed against the
respondents a complaint10 to nullify TCT No. T-221755 (M) and other
documents with damages with the RTC of Malolos, Bulacan. Therein,
the petitioners asserted that the subject property is a family home, which
is exempt from execution under the Family Code and, thus, could not
have been validly levied upon for purposes of satisfying the March 15,
1993 writ of execution.
On September 3, 2002, the RTC rendered a Decision,11 which dismissed
the petitioners’ complaint. Citing Article 155(3) of the Family Code, the
RTC ruled that even assuming that the subject property is a family home,
the exemption from execution does not apply. A mortgage was
33
constituted over the subject property to secure the loan Araceli obtained
from Claudio and it was levied upon as payment therefor.
The petitioners sought reconsideration of the RTC’s September 3, 2002
Decision but this was denied in a Resolution12 dated January 14, 2003.
On appeal, the CA affirmed the RTC’s disposition in its Decision13 dated
June 6, 2008. The CA ratiocinated that the exemption of a family home
from execution, attachment or forced sale under Article 153 of the Family
Code is not automatic and should accordingly be raised and proved to
the Sheriff prior to the execution, forced sale or attachment. The
appellate court noted that at no time did the petitioners raise the
supposed exemption of the subject property from execution on account
of the same being a family home.
The petitioners then sought reconsideration of the said June 6, 2008
Decision but the same was denied by the CA in its Resolution14 dated
October 23, 2008.
Aggrieved, the petitioners filed the instant petition for review, praying for
the cancellation of TCT No. T-221755 (M). They insist that the execution
sale that was conducted is a nullity considering that the subject property
is a family home. The petitioners assert that, contrary to the disposition
of the CA, a prior demonstration that the subject property is a family
home is not required before it can be exempted from execution.
In their Comment,15 Spouses Acero claimed that this petition ought to be
denied on the ground of forum-shopping as the issues raised had
already been determined by the MTC in its July 22, 1999 Decision on
the complaint for ejectment filed by them, which had already become
final and executory following the petitioner’s failure to appeal the CA’s
December 21, 2006 Decision affirming it.
Issues
The threshold issues for resolution are the following: (a) whether the
petitioners are guilty of forum-shopping; and (b) whether the lower courts
erred in refusing to cancel Claudio’s Torrens title TCT No. T-221755 (M)
over the subject property.
The Court’s Ruling
First Issue: Forum-Shopping
On the first issue, we find that the petitioners are not guilty of forum-
shopping.
There is forum-shopping when as a result of an adverse decision in one
forum, or in anticipation thereof, a party seeks a favorable opinion in
another forum through means other than an appeal or certiorari. Forum-
shopping exists when two or more actions involve the same
transactions, essential facts, and circumstances; and raise identical
causes of action, subject matter, and issues.16
Forum-shopping exists where the elements of litis pendentia are
present, and where a final judgment in one case will amount to res
judicata in the other. The elements of forum-shopping are: (a) identity of
parties, or at least such parties as would represent the same interest in
both actions; (b) identity of rights asserted and relief prayed for, the relief
being founded on the same facts; and (c) identity of the two preceding
particulars such that any judgment rendered in the other action will,
regardless of which party is successful, amount to res judicata in the
action under consideration.17
There is no identity of issues and reliefs prayed for in the ejectment case
and in the action to cancel TCT No. T-221755 (M). Verily, the primordial
issue in the ejectment case is who among the contending parties has a
better right of possession over the subject property while ownership is
the core issue in an action to cancel a Torrens title.
It is true that the petitioners raised the issue of ownership over the
subject property in the ejectment case. However, the resolution thereof
is only provisional as the same is solely for the purpose of determining
who among the parties therein has a better right of possession over the
subject property.
Accordingly, a judgment rendered in an ejectment case is not a bar to
action between the same parties respecting title to the land or building.
Neither shall it be conclusive as to the facts therein. This issue is far from
being novel and there is no reason to depart from this Court’s previous
pronouncements. In Malabanan v. Rural Bank of Cabuyao, Inc.,18 this
Court had previously clarified that a decision in an ejectment case is
not res judicata in an annulment of title case and vice-versa given the
provisional and inconclusive nature of the determination of the issue of
ownership in the former.
Forum-shopping exists where the elements of litis pendentia are
present, namely: (a) identity of parties or at least such as representing
the same interests in both actions; (b) identity of rights asserted and
reliefs prayed for, the relief being founded on the same facts; and (c) the
identity in the two cases should be such that the judgment that may be
rendered in one would, regardless of which party is successful, amounts
to res judicata in the other.
Petitioner and respondent are the same parties in the annulment and
ejectment cases. The issue of ownership was likewise being contended,
with same set of evidence being presented in both cases. However, it
cannot be inferred that a judgment in the ejectment case would amount
to res judicata in the annulment case, and vice-versa.
This issue is hardly a novel one. It has been laid to rest by heaps of
cases iterating the principle that a judgment rendered in an ejectment
case shall not bar an action between the same parties respecting title to
the land or building nor shall it be conclusive as to the facts therein found
in a case between the same parties upon a different cause of action
involving possession.
It bears emphasizing that in ejectment suits, the only issue for resolution
is the physical or material possession of the property involved,
independent of any claim of ownership by any of the party litigants.
However, the issue of ownership may be provisionally ruled upon for the
sole purpose of determining who is entitled to possession de facto.
Therefore, the provisional determination of ownership in the ejectment
case cannot be clothed with finality.
Corollarily, the incidental issue of whether a pending action for
annulment would abate an ejectment suit must be resolved in the
negative.
A pending action involving ownership of the same property does not bar
the filing or consideration of an ejectment suit, nor suspend the
proceedings. This is so because an ejectment case is simply designed
to summarily restore physical possession of a piece of land or building
to one who has been illegally or forcibly deprived thereof, without
prejudice to the settlement of the parties' opposing claims of juridical
possession in appropriate proceedings.19(citations omitted)
Second Issue: Nullification of TCT No. T-221755 (M)
Anent the second issue, this Court finds that the CA did not err in
dismissing the petitioners’ complaint for nullification of TCT No. T-
221755 (M).
The subject property is a family home.
The petitioners maintain that the subject property is a family home and,
accordingly, the sale thereof on execution was a nullity. In Ramos v.
Pangilinan,20 this Court laid down the rules relative to exemption of
family homes from execution:
34
For the family home to be exempt from execution, distinction must be
made as to what law applies based on when it was constituted and what
requirements must be complied with by the judgment debtor or his
successors claiming such privilege. Hence, two sets of rules are
applicable.
If the family home was constructed before the effectivity of the Family
Code or before August 3, 1988, then it must have been
constituted either judicially or extra-judicially as provided under
Articles 225, 229-231 and 233 of the Civil Code. Judicial constitution
of the family home requires the filing of a verified petition before the
courts and the registration of the court’s order with the Registry of Deeds
of the area where the property is located. Meanwhile, extrajudicial
constitution is governed by Articles 240 to 242 of the Civil Code and
involves the execution of a public instrument which must also be
registered with the Registry of Property. Failure to comply with either
one of these two modes of constitution will bar a judgment debtor from
availing of the privilege.
On the other hand, for family homes constructed after the effectivity of
the Family Code on August 3, 1988, there is no need to constitute
extrajudicially or judicially, and the exemption is effective from the
time it was constituted and lasts as long as any of its beneficiaries under
Art. 154 actually resides therein. Moreover, the family home should
belong to the absolute community or conjugal partnership, or if
exclusively by one spouse, its constitution must have been with consent
of the other, and its value must not exceed certain amounts depending
upon the area where it is located. Further, the debts incurred for which
the exemption does not apply as provided under Art. 155 for which the
family home is made answerable must have been incurred after August
3, 1988.21 (citations omitted)
In the earlier case of Kelley, Jr. v. Planters Products, Inc.,22 we stressed
that:
Under the Family Code, there is no need to constitute the family home
judicially or extrajudicially. All family homes constructed after the
effectivity of the Family Code (August 3, 1988) are constituted as such
by operation of law. All existing family residences as of August 3,
1988 are considered family homes and are prospectively entitled to
the benefits accorded to a family home under the Family
Code.23 (emphasis supplied and citation omitted)
The foregoing rules on constitution of family homes, for purposes of
exemption from execution, could be summarized as follows:
First, family residences constructed before the effectivity of
the Family Code or before August 3, 1988 must be constituted
as a family home either judicially or extrajudicially in
accordance with the provisions of the Civil Code in order to be
exempt from execution;
Second, family residences constructed after the effectivity of
the Family Code on August 3, 1988 are automatically deemed
to be family homes and thus exempt from execution from the
time it was constituted and lasts as long as any of its
beneficiaries actually resides therein;
Third, family residences which were not judicially or
extrajudicially constituted as a family home prior to the
effectivity of the Family Code, but were existing thereafter, are
considered as family homes by operation of law and are
prospectively entitled to the benefits accorded to a family
home under the Family Code.
Here, the subject property became a family residence sometime in
January 1987. There was no showing, however, that the same was
judicially or extrajudicially constituted as a family home in accordance
with the provisions of the Civil Code. Still, when the Family Code took
effect on August 3, 1988, the subject property became a family home by
operation of law and was thus prospectively exempt from execution. The
petitioners were thus correct in asserting that the subject property was
a family home.
The family home’s exemption from execution must be set up and
proved to the Sheriff before the sale of the property at public
auction.
Despite the fact that the subject property is a family home and, thus,
should have been exempt from execution, we nevertheless rule that the
CA did not err in dismissing the petitioners’ complaint for nullification of
TCT No. T-221755 (M). We agree with the CA that the petitioners should
have asserted the subject property being a family home and its being
exempted from execution at the time it was levied or within a reasonable
time thereafter. As the CA aptly pointed out:
In the light of the facts above summarized, it is evident that appellants
did not assert their claim of exemption within a reasonable time.
Certainly, reasonable time, for purposes of the law on exemption, does
not mean a time after the expiration of the one-year period provided for
in Section 30 of Rule 39 of the Rules of Court for judgment debtors to
redeem the property sold on execution, otherwise it would render
nugatory final bills of sale on execution and defeat the very purpose of
execution – to put an end to litigation. x x x.24
The foregoing disposition is in accord with the Court’s November 25,
2005 Decision in Honrado v. Court of Appeals,25 where it was
categorically stated that at no other time can the status of a residential
house as a family home can be set up and proved and its exemption
from execution be claimed but before the sale thereof at public auction:
While it is true that the family home is constituted on a house and lot
from the time it is occupied as a family residence and is exempt from
execution or forced sale under Article 153 of the Family Code, such
claim for exemption should be set up and proved to the Sheriff before
the sale of the property at public auction. Failure to do so would estop
the party from later claiming the exemption. As this Court ruled in Gomez
v. Gealone:
Although the Rules of Court does not prescribe the period within which
to claim the exemption, the rule is, nevertheless, well-settled that the
right of exemption is a personal privilege granted to the judgment debtor
and as such, it must be claimed not by the sheriff, but by the debtor
himself at the time of the levy or within a reasonable period thereafter;
"In the absence of express provision it has variously held that claim (for
exemption) must be made at the time of the levy if the debtor is present,
that it must be made within a reasonable time, or promptly, or before the
creditor has taken any step involving further costs, or before
advertisement of sale, or at any time before sale, or within a reasonable
time before the sale, or before the sale has commenced, but as to the
last there is contrary authority."
In the light of the facts above summarized, it is self-evident that
appellants did not assert their claim of exemption within a reasonable
time. Certainly, reasonable time, for purposes of the law on exemption,
does not mean a time after the expiration of the one-year period
provided for in Section 30 of Rule 39 of the Rules of Court for judgment
debtors to redeem the property sold on execution, otherwise it would
render nugatory final bills of sale on execution and defeat the very
purpose of execution—to put an end to litigation.1awphil We said
before, and We repeat it now, that litigation must end and terminate
sometime and somewhere, and it is essential to an effective
administration of justice that, once a judgment has become final, the
winning party be not, through a mere subterfuge, deprived of the fruits
of the verdict. We now rule that claims for exemption from execution of
properties under Section 12 of Rule 39 of the Rules of Court must be
presented before its sale on execution by the sheriff.26 (citations omitted)
Reiterating the foregoing in Spouses Versola v. Court of Appeals,27 this
Court stated that:
35
Under the cited provision, a family home is deemed constituted on a
house and lot from the time it is occupied as a family residence; there is
no need to constitute the same judicially or extrajudicially.

The settled rule is that the right to exemption or forced sale under
Article 153 of the Family Code is a personal privilege granted to the
judgment debtor and as such, it must be claimed not by the sheriff,
but by the debtor himself before the sale of the property at public
auction. It is not sufficient that the person claiming exemption merely
alleges that such property is a family home. This claim for exemption
must be set up and proved to the Sheriff. x x x.28 (emphasis supplied
and citations omitted)

Having failed to set up and prove to the sheriff the supposed exemption
of the subject property before the sale thereof at public auction, the
petitioners now are barred from raising the same. Failure to do so estop
them from later claiming the said exemption.

Indeed, the family home is a sacred symbol of family love and is the
repository of cherished memories that last during one’s lifetime.29 It is
likewise without dispute that the family home, from the time of its
constitution and so long as any of its beneficiaries actually resides
therein, is generally exempt from execution, forced sale or attachment. 30

The family home is a real right, which is gratuitous, inalienable and free
from attachment. It cannot be seized by creditors except in certain
special cases.31 However, this right can be waived or be barred
by laches by the failure to set up and prove the status of the property as
a family home at the time of the levy or a reasonable time thereafter.

In this case, it is undisputed that the petitioners allowed a considerable

time to lapse before claiming that the subject property is a family home
and its exemption from execution and forced sale under the Family
Code. The petitioners allowed the subject property to be levied upon and
the public sale to proceed. One (1) year lapsed from the time the subject
property was sold until a Final Deed of Sale was issued to Claudio and,
later, Araceli’s Torrens title was cancelled and a new one issued under
Claudio’s name, still, the petitioner remained silent. In fact, it was only
after the respondents filed a complaint for unlawful detainer, or
approximately four (4) years from the time of the auction sale, that the
petitioners claimed that the subject property is a family home, thus,
exempt from execution.

For all intents and purposes, the petitioners’ negligence or omission to

assert their right within a reasonable time gives rise to the presumption
that they have abandoned, waived or declined to assert it. Since the
exemption under Article 153 of the Family Code is a personal right, it is
incumbent upon the petitioners to invoke and prove the same within the
prescribed period and it is not the sheriff’s duty to presume or raise the
status of the subject property as a family home.

The petitioners’ negligence or omission renders their present assertion

doubtful; it appears that it is a mere afterthought and artifice that cannot
be countenanced without doing the respondents injustice and depriving
the fruits of the judgment award in their favor. Simple justice and fairness
and equitable considerations demand that Claudio’s title to the property
be respected. Equity dictates that the petitioners are made to suffer the
consequences of their unexplained negligence.

WHEREFORE, in consideration of the foregoing disquisitions, the

petition is DENIED. The assailed Decision dated June 6, 2008 of the
Court of Appeals in CA-G.R. CV No. 79391, which affirmed the Decision
of the Regional Trial Court of Malolos, Bulacan, Branch 22, in Civil Case
No. 1058-M-99 and dismissed the complaint for declaration of nullity of
TCT No. 221755 (M) and other documents, and the October 23, 2008
Resolution denying reconsideration, are AFFIRMED.

SO ORDERED.

------------------------------------------------------------Salazar v felias

36