G.R. No.

L-23374 September 30, 1970

TEOFILA FELICES, Plaintiff-Appellant, v. FRANCISCO COLEGADO

defendant-appellee.

Ezekiel S. Grageda for plaintiff-appellant.

Reyes and Dy-Liacco for defendant- appellee.

ZALDIVAR, J.:

Appeal from the decision of the Court of First Instance of Camarines Sur, in
its Civil Case No. 55510, on a question of law - the facts having been
stipulated by the parties in the court below. chanroblesvirtualawlibrary chanrobles virtual law library

Felipe Felices died on November 5, 1938. The only property left by him was
a homestead located in Barrio Curry, Pili, Camarines Sur, comprising 21
hectares, more or less, for which Original Certificate of Title No. 73 was
issued in his name. Soon after his death, five of his seven surviving children,
namely, Marta, Maria, Teofila Silverio, and Pedro, all surnamed Felices,
physically partitioned among themselves the aforementioned homestead,
each one taking actual and exclusive possession of the specific portion
pertaining to him/her, although no transfer certificate of title was issued in
their individual names. 1 On February 24, 1949, Maria Felices sold her share
to Roman Iriola with right of repurchase (con pacto de retro), which share is
on the extreme northern part of the homestead, more particularly described
as follows:

A parcel of irrigated rice land covering an area of four (4) and one-fourth
hectares situated in the Barrio of Curry, Municipality of Pili, Province of
Camarines Sur, Philippines, bounded on the North by the property of
Mamerto Iriola; on the East by the Himaao River; on the South by the
property of the heirs of Felipe Felices; and on the West by the Lagundi
Creek. This land is an integral part of the land described under Original
Certificate of Title No. 73 issued on October 20, 1948. Proportionate
assessed value: P704.00.

Upon the insistence of Roman Iriola, the deed of conditional sale was signed
by all the brothers and sisters of Maria and soon after the execution of the
deed Iriola took possession of the above-described property. chanroblesvirtualawlibrary chanrobles virtual law library

Sometime, in 1951, Silverio Felices, Pedro Felices, Marta Felices and Maria
Felices agreed to sell absolutely to Francisco Colegado their respective
shares in the homestead for the total price of P8,500.00. Knowing, however,
that such sale could not be validly effected because of the prohibition to
alienate a homestead within five years from the issuance of the patent, they
agreed to execute the document of sale later on. In the meantime, and
inasmuch as the share of Maria Felices was still in the possession of Roman
Iriola by virtue of its having been previously sold to him with right of
repurchase, Francisco Colegado advanced the amount for the repurchase of
Maria's share from Roman Iriola. chanroblesvirtualawlibrary chanrobles virtual law library

When the repurchase price was offered to Roman Iriola, the latter refused to
allow the repurchase. The Felices brothers and sisters (Silverio, Pedro, Marta
and Maria), therefore, consigned the amount for the repurchase with the
court and filed Civil Case No. 1991 in the Court of First Instance of
Camarines Sur to compel Roman Iriola to allow the repurchase and accept
the proffered repurchase money. In the complaint, Teofila Felices, the other
sister, who had a share in the homestead, was joined as party defendant
along with Roman Iriola because she refused to join as a party plaintiff with
her brothers and sisters. chanroblesvirtualawlibrary chanrobles virtual law library

On September 11, 1953, Maria, Marta, Silverio and Pedro, all surnamed
Felices, and Francisco Colegado finally executed a deed of absolute sale
whereby the said Felices brothers and sisters ceded to the latter their
respective shares in the homestead inherited by them from their deceased
father.
chanroblesvirtualawlibrary chanrobles virtual law library

On June 19, 1954, a decision was rendered by the Court of First Instance of
Camarines Sur in Civil Case No. 1991 ordering Roman Iriola to allow Maria
Felices to repurchase the property that she had previously sold conditionally
to him. Iriola appealed from that decision to the Court of Appeals, and the
latter court affirmed the decision. Upon payment by Francisco Colegado on
August 21, 1962, of the sum of P2,053.61 to the heirs of Roman Iriola, 2 as
finally determined by the Court of Appeals, said heirs surrendered the
possession of the land to Colegado. chanroblesvirtualawlibrary chanrobles virtual law library

Shortly thereafter, or on September 7, 1962, Teofila Felices, thru her lawyer,

addressed a letter to Francisco Colegado informing him of her desire to
redeem the parcel of land sold to him by Maria Felices and at the same time
offering the sum of P2,053.61 as the redemption price of the land - which
amount was later on deposited with the Clerk of Court - but this offer to
redeem was refused by Francisco Colegado on September 19, 1962, Teofila
Felices commenced the present action against Francisco Colegado in the
Court of First Instance of Camarines Sur (Civil Case No. 5510), asserting
that being a co-owner defendant Colegado can be compelled to allow her to
exercise the right of legal redemption over that portion which her sister
Maria Felices had conditionally sold to Roman Iriola and later repurchased
from Iriola by Colegado invoking the provision of Article 1620 of the Civil
Code which reads:

A co-owner of a thing may exercise the right of redemption in case the

shares of all the other co-owners or of any of them, are sold to a third
person. If the price of the alienation is grossly excessive, the redemptioner
shall pay only a reasonable one. chanroblesvirtualawlibrary chanrobles virtual law library

Should two or more co-owners desire to exercise the right of redemption,

they may only do so in proportion to the share they may respectively have
in the thing owned in common.

In his answer, which contains a counterclaim, defendant Francisco Colegado

maintains that plaintiff is now precluded to redeem the land in question. He
bases his stand on Article 1088 of the same Code, 3 and asserts that once a
property is partitioned among the heirs, as in the case at bar, the sale by
any one of the heirs of his share to a third person cannot be the subject of
redemption by his co-heirs. chanroblesvirtualawlibrary chanrobles virtual law library

On February 26, 1964, the trial court rendered its decision dismissing the
complaint, as well as defendant's counterclaim, with costs against plaintiff.
In its decision, the trial court made the following findings and conclusions:

The partition of the homestead left by the deceased Felipe Felices is a fact
undisputed by the parties. This was the subject of their stipulation which
reads:

"That even before the issuance of Original Certificate of Title No. 73 on

October 20, 1948 to the deceased Felipe Felices the children of the said
deceased immediately after his death had already made a physical partition
of the land among themselves, although no transfer certificate of title was
actually issued in favor of each heir to his or her corresponding share."

The partition conferred upon each heir "the exclusive ownership of the
property adjudicated to him" (Javelesa vs. Barrios, et al., 66 Phil. 107;
Aliases vs. Alcantara, 16 Phil. 489, Alcala vs. Alcala 35 Phil. 679). In other
words, after the partition of the homestead of Felipe Felices immediately
following his death on November 5, 1938, the co-ownership or co-heirship
among his children ceased and each of them became the exclusive owner of
the portion of the homestead adjudicated to him or her own individual share.
Consequently, Teofila Felices is not a co-owner of the share of Maria Felices
in the said homestead and she has, therefore, no right to redeem the same
from Francisco Colegado. chanroblesvirtualawlibrary chanrobles virtual law library
The defendant's counterclaim for damages is not supported by the evidence.
It is convincingly disproved by the emphatic denial of the plaintiff.

WHEREFORE, the complaint and counterclaims are DISMISSED with costs

against the plaintiff. 4 chanrobles virtual law library

Hence the present appeal by plaintiff Teofila Felices. chanroblesvirtualawlibrary chanrobles virtual law library

The only question to be resolved in this appeals whether or not, under the
facts stated in the foregoing paragraphs, plaintiff-appellant can exercise the
right of legal redemption of the land in question from defendant-appellee,
pursuant to the provisions of Article 1620 and/or Article 1088 of the Civil
Code. As correctly held by the trial court, Article 1088 of the Civil Code has
no application in the present case because said article can only be availed of
when a co-heir sells his share before the partition of the hereditary estate. 5
That article refers to the hereditary right itself, in the abstract sense, without
specifying any particular portion, although the proportionate participation of
each co-heir is ascertainable. This article presupposes that there has as yet
been no distribution of the estate among the heirs, for the moment such
distribution has taken place, even in a state of pro-indiviso, the heirs ceased
to be considered simply as co-heirs, but they have thereby become co-
owners. 6 Consequently, if one of the owners sells his share to a stranger, a
co-owner may claim his right of redemption as a co-owner under Article
1620 of the Civil Code, 7 not as a co-heir under Article 1088 of the same
Code. chanroblesvirtualawlibrary chanrobles virtual law library

But in the instant case, We also find that plaintiff-appellant has no right to
redeem the property as co-owner under Article 1620 of the Civil Code. Co-
ownership exists when the ownership of an undivided thing or right belongs
to different persons. 8 It is an inherent and peculiar feature of co-ownership
that although the co-owners may have unequal shares in the common
property, quantitatively speaking, each co-owner has the same right in a
qualitative sense as any one of the other co-owners. In other words, every
co-owner is the owner of the whole, and over the whole he exercises the
right of dominion, but he is at the same time the owner of a portion which is
truly abstract, because until division is effected such portion is not
concretely determined. chanroblesvirtualawlibrary chanrobles virtual law library

In the case before Us, it is admitted by plaintiff-appellant herself that

immediately after the death of their father Felipe Felices, she and her
brothers and sisters divided or partitioned the homestead among themselves
extrajudicially, each heir taking physical and exclusive possession and
control of his or her aliquot share. The portion given to Maria Felices, which
plaintiff-appellant now seeks to redeem, is about one-fifth of the homestead
on the northernmost part, marked out by metes and bounds, as described in
paragraph 3 of the complaint. And when Maria Felices sold her share to
Roman Iriola in 1949, she delivered to him the possession of the particular
portion of the homestead constituting her distinct share, and since then
Roman Iriola, and later his heirs upon his death, have continuously
cultivated the land and introduced improvements thereon until the
possession thereof was in turn delivered to defendant-appellee Francisco
Colegado April 1962 pursuant to the decision of the Court of Appeals. There
is, therefore, no doubt that at the time Maria Felices sold her share to
defendant-appellee Colegado and even prior thereto when she ceded the
same property to Roman Iriola, the community of interest over the entire
homestead of their father between her (Maria) and her brothers and sisters
had already ceased, and so the claim of plaintiff-appellant to redeem the
property under Article 1620 can not be sustained because when that
property was sold by Maria Felices to defendant-appellee she (plaintiff-
appellant) was no longer a co-owner of that particular property. The
following ruling of this Court, speaking through Mr. Justice J. B. L. Reyes, is
pertinent to the resolution of the issue in the present case:

The foregoing theory is untenable. Tested against the concept of co-

ownership, as authoritatively expressed by the commentators, appellant is
not a co-owner of the registered parcel of land, taken as a unit or subject of
co-ownership, since he and the spouses do not "have a spiritual part of a
thing which is not physically divided" (3 Sanchez Roman 162), nor is each of
them an "owner of the whole, and over the whole he exercises the right of
dominion, but he is at the same time the owner of a portion which is truly
abstract ..." (3 Manresa 405). The portions of appellant-plaintiff and of the
defendant spouses are correctly determined and identifiable, for to the
former belongs the northern half, and to the latter belongs the remaining
southern half, of the land. That their respective portions are not technically
described, or that said portions are still embraced in one and the same
certificate of title, does not make said portions less determinable or
identifiable, or distinguishable, one from the other, nor that dominion over
each portion less exclusive, in their respective owners. Hence, no right of
redemption among co-owners exists. (De la Cruz v. Cruz, et al., L-27759,
April 17, 1970, 32 SCRA, 307, 311). 9 chanrobles virtual law library

The foregoing sufficiently disposes of the issue raised in this appeal.

However, even granting the claim of plaintiff-appellant that co-ownership of
the homestead still existed as of the time defendant-appellee repurchased
the share of Maria Felices from Roman Iriola still she can not exercise the
right of legal redemption of the controverted property. The record shows
that on September 11, 1953 defendant-appellee Colegado bought the
respective shares of Silverio Felices, Pedro Felices, and Marta Felices in the
homestead. By such purchase defendant-appellee had thereby become a co-
owner of the homestead. When defendant-appellee thereafter paid for the
portion allotted to Maria Felices, in August, 1962, he was at that time not a
stranger but already a co-owner of the homestead. hence, plaintiff-appellant
cannot redeem the land from defendant-appellee because the latter and
plaintiff-appellant had become co-owners, and as co-owners neither of them
has the right of legal redemption against the other. 10 In the case of Viola v.
Roura & Tecson (49 Phil., 808), this Court held that the right of legal
redemption is not limited solely and exclusively to original co-owners but
applies as well to those who subsequently acquire the respective shares of
the co-owners while the community exists. chanroblesvirtualawlibrary chanrobles virtual law library

WHEREFORE, the decision appealed from is affirmed, with costs against

plaintiff-appellant. It is so ordered.

G.R. No. L-45425 April 29, 1939

JOSE GATCHALIAN, ET AL., Plaintiffs-Appellants, vs. THE COLLECTOR OF

INTERNAL REVENUE, Defendant-Appellee.

Guillermo B. Reyes for appellants.

Office of the Solicitor-General Tuason for appellee.

IMPERIAL, J.: chanrobles virtual law library

The plaintiff brought this action to recover from the defendant Collector of
Internal Revenue the sum of P1,863.44, with legal interest thereon, which
they paid under protest by way of income tax. They appealed from the
decision rendered in the case on October 23, 1936 by the Court of First
Instance of the City of Manila, which dismissed the action with the costs
against them. chanroblesvirtualawlibrary chanrobles virtual law library

The case was submitted for decision upon the following stipulation of facts:

Come now the parties to the above-mentioned case, through their respective
undersigned attorneys, and hereby agree to respectfully submit to this
Honorable Court the case upon the following statement of facts: chanrobles virtual law library

1. That plaintiff are all residents of the municipality of Pulilan, Bulacan, and
that defendant is the Collector of Internal Revenue of the Philippines; chanrobles virtual law library

2. That prior to December 15, 1934 plaintiffs, in order to enable them to

purchase one sweepstakes ticket valued at two pesos (P2), subscribed and
paid therefor the amounts as follows:
1. Jose
P0.1
Gatchalian .................................................................................
8
...................
2. Gregoria
Cristobal ................................................................................... .18
............
3. Saturnina
Silva ......................................................................................... .08
...........
4. Guillermo
Tapia ........................................................................................ .13
...........
5. Jesus
Legaspi ..................................................................................... .15
.................
6. Jose
Silva ......................................................................................... .07
....................
7. Tomasa
Mercado .................................................................................... .08
............
8. Julio
Gatchalian ................................................................................. .13
..................
9. Emiliana
Santiago ................................................................................... .13
.............
10. Maria C.
Legaspi ..................................................................................... .16
..........
11. Francisco
Cabral ....................................................................................... .13
........
12. Gonzalo
Javier ....................................................................................... .14
.............
13. Maria
Santiago ................................................................................... .17
................
14. Buenaventura
Guzman .................................................................................... .13
..
15. Mariano
Santos ...................................................................................... .14
...........
Total .........................................................................................
............... 2.00

3. That immediately thereafter but prior to December 15, 1934, plaintiffs

purchased, in the ordinary course of business, from one of the duly
authorized agents of the National Charity Sweepstakes Office one ticket
bearing No. 178637 for the sum of two pesos (P2) and that the said ticket
was registered in the name of Jose Gatchalian and Company; chanrobles virtual law library

4. That as a result of the drawing of the sweepstakes on December 15,

1934, the above-mentioned ticket bearing No. 178637 won one of the third
prizes in the amount of P50,000 and that the corresponding check covering
the above-mentioned prize of P50,000 was drawn by the National Charity
Sweepstakes Office in favor of Jose Gatchalian & Company against the
Philippine National Bank, which check was cashed during the latter part of
December, 1934 by Jose Gatchalian & Company; chanrobles virtual law library

5. That on December 29, 1934, Jose Gatchalian was required by income tax
examiner Alfredo David to file the corresponding income tax return covering
the prize won by Jose Gatchalian & Company and that on December 29,
1934, the said return was signed by Jose Gatchalian, a copy of which return
is enclosed as Exhibit A and made a part hereof; chanrobles virtual law library

6. That on January 8, 1935, the defendant made an assessment against Jose

Gatchalian & Company requesting the payment of the sum of P1,499.94 to
the deputy provincial treasurer of Pulilan, Bulacan, giving to said Jose
Gatchalian & Company until January 20, 1935 within which to pay the said
amount of P1,499.94, a copy of which letter marked Exhibit B is enclosed
and made a part hereof; chanrobles virtual law library

7. That on January 20, 1935, the plaintiffs, through their attorney, sent to
defendant a reply, a copy of which marked Exhibit C is attached and made a
part hereof, requesting exemption from payment of the income tax to which
reply there were enclosed fifteen (15) separate individual income tax returns
filed separately by each one of the plaintiffs, copies of which returns are
attached and marked Exhibit D-1 to D-15, respectively, in order of their
names listed in the caption of this case and made parts hereof; a statement
of sale signed by Jose Gatchalian showing the amount put up by each of the
plaintiffs to cover up the attached and marked as Exhibit E and made a part
hereof; and a copy of the affidavit signed by Jose Gatchalian dated
December 29, 1934 is attached and marked Exhibit F and made part
thereof; chanrobles virtual law library

8. That the defendant in his letter dated January 28, 1935, a copy of which
marked Exhibit G is enclosed, denied plaintiffs' request of January 20, 1935,
for exemption from the payment of tax and reiterated his demand for the
payment of the sum of P1,499.94 as income tax and gave plaintiffs until
February 10, 1935 within which to pay the said tax; chanrobles virtual law library

9. That in view of the failure of the plaintiffs to pay the amount of tax
demanded by the defendant, notwithstanding subsequent demand made by
defendant upon the plaintiffs through their attorney on March 23, 1935, a
copy of which marked Exhibit H is enclosed, defendant on May 13, 1935
issued a warrant of distraint and levy against the property of the plaintiffs, a
copy of which warrant marked Exhibit I is enclosed and made a part hereof;
virtual law library
chanrobles

10. That to avoid embarrassment arising from the embargo of the property
of the plaintiffs, the said plaintiffs on June 15, 1935, through Gregoria
Cristobal, Maria C. Legaspi and Jesus Legaspi, paid under protest the sum of
P601.51 as part of the tax and penalties to the municipal treasurer of
Pulilan, Bulacan, as evidenced by official receipt No. 7454879 which is
attached and marked Exhibit J and made a part hereof, and requested
defendant that plaintiffs be allowed to pay under protest the balance of the
tax and penalties by monthly installments; chanrobles virtual law library

11. That plaintiff's request to pay the balance of the tax and penalties was
granted by defendant subject to the condition that plaintiffs file the usual
bond secured by two solvent persons to guarantee prompt payment of each
installments as it becomes due; chanrobles virtual law library

12. That on July 16, 1935, plaintiff filed a bond, a copy of which marked
Exhibit K is enclosed and made a part hereof, to guarantee the payment of
the balance of the alleged tax liability by monthly installments at the rate of
P118.70 a month, the first payment under protest to be effected on or
before July 31, 1935; chanrobles virtual law library

13. That on July 16, 1935 the said plaintiffs formally protested against the
payment of the sum of P602.51, a copy of which protest is attached and
marked Exhibit L, but that defendant in his letter dated August 1, 1935
overruled the protest and denied the request for refund of the plaintiffs; chanrobles virtual law library
14. That, in view of the failure of the plaintiffs to pay the monthly
installments in accordance with the terms and conditions of bond filed by
them, the defendant in his letter dated July 23, 1935, copy of which is
attached and marked Exhibit M, ordered the municipal treasurer of Pulilan,
Bulacan to execute within five days the warrant of distraint and levy issued
against the plaintiffs on May 13, 1935; chanrobles virtual law library

15. That in order to avoid annoyance and embarrassment arising from the
levy of their property, the plaintiffs on August 28, 1936, through Jose
Gatchalian, Guillermo Tapia, Maria Santiago and Emiliano Santiago, paid
under protest to the municipal treasurer of Pulilan, Bulacan the sum of
P1,260.93 representing the unpaid balance of the income tax and penalties
demanded by defendant as evidenced by income tax receipt No. 35811
which is attached and marked Exhibit N and made a part hereof; and that on
September 3, 1936, the plaintiffs formally protested to the defendant
against the payment of said amount and requested the refund thereof, copy
of which is attached and marked Exhibit O and made part hereof; but that
on September 4, 1936, the defendant overruled the protest and denied the
refund thereof; copy of which is attached and marked Exhibit P and made a
part hereof; and chanrobles virtual law library

16. That plaintiffs demanded upon defendant the refund of the total sum of
one thousand eight hundred and sixty three pesos and forty-four centavos
(P1,863.44) paid under protest by them but that defendant refused and still
refuses to refund the said amount notwithstanding the plaintiffs' demands.
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chanroblesvirtualawlibrary

17. The parties hereto reserve the right to present other and additional
evidence if necessary.

Exhibit E referred to in the stipulation is of the following tenor:

To whom it may concern: chanrobles virtual law library

I, Jose Gatchalian, a resident of Pulilan, Bulacan, married, of age, hereby

certify, that on the 11th day of August, 1934, I sold parts of my shares on
ticket No. 178637 to the persons and for the amount indicated below and
the part of may share remaining is also shown to wit:

Purchaser Amount Address

1. Mariano Pulilan,
P0.14
Santos ........................................... Bulacan.
2. Buenaventura Guzman ............................... .13 - Do -
3. Maria
.17 - Do -
Santiago ............................................
4. Gonzalo
.14 - Do -
Javier ..............................................
5. Francisco
.13 - Do -
Cabral ..........................................
6. Maria C.
.16 - Do -
Legaspi ..........................................
7. Emiliana
.13 - Do -
Santiago .........................................
8. Julio
.13 - Do -
Gatchalian ............................................
9. Jose
.07 - Do -
Silva ......................................................
10. Tomasa Mercado ....................................... .08 - Do -
11. Jesus
.15 - Do -
Legaspi .............................................
12. Guillermo
.13 - Do -
Tapia ...........................................
13. Saturnina
.08 - Do -
Silva ............................................
14. Gregoria
.18 - Do -
Cristobal .......................................
15. Jose
.18 - Do -
Gatchalian ............................................
Total cost of
2.00 said

ticket; and that, therefore, the persons named above are entitled to the
parts of whatever prize that might be won by said ticket.

Pulilan, Bulacan, P.I.

(Sgd.) JOSE GATCHALIAN

And a summary of Exhibits D-1 to D-15 is inserted in the bill of exceptions

as follows:
RECAPITULATIONS OF 15 INDIVIDUAL INCOME TAX RETURNS FOR 1934 ALL
DATED JANUARY 19, 1935 SUBMITTED TO THE COLLECTOR OF INTERNAL
REVENUE.

Exhibi Purchas Price Net

Name t e Expenses priz
No. Price Won e
1. Jose
P4,42 3,94
Gatchalian ............................. D-1 P0.18 P 480
5 5
.............
2. Gregoria
2,57
Cristobal ............................... D-2 .18 4,575 2,000
5
.......
3. Saturnina
1,51
Silva ..................................... D-3 .08 1,875 360
5
........
4. Guillermo
2,96
Tapia .................................... D-4 .13 3,325 360
5
......
5. Jesus Legaspi by Maria 3,10
D-5 .15 3,825 720
Cristobal ......... 5
6. Jose
1,51
Silva ..................................... D-6 .08 1,875 360
5
...............
7. Tomasa
1,51
Mercado ................................ D-7 .07 1,875 360
5
.......
8. Julio Gatchalian by Beatriz 2,91
D-8 .13 3,150 240
Guzman ....... 0
9. Emiliana
2,96
Santiago ............................... D-9 .13 3,325 360
5
.......
10. Maria C.
3,14
Legaspi ................................. D-10 .16 4,100 960
0
.....
11. Francisco
2,96
Cabral ................................... D-11 .13 3,325 360
5
...
12. Gonzalo D-12 .14 3,325 360 2,96
Javier ...................................
5
.......
13. Maria
3,99
Santiago ............................... D-13 .17 4,350 360
0
...........
14. Buenaventura 2,96
D-14 .13 3,325 360
Guzman ........................... 5
15. Mariano
2,96
Santos .................................. D-15 .14 3,325 360
5
......
<=""
50,00 cospan="2
2.00
0 ">

The legal questions raised in plaintiffs-appellants' five assigned errors may

properly be reduced to the two following: (1) Whether the plaintiffs formed a
partnership, or merely a community of property without a personality of its
own; in the first case it is admitted that the partnership thus formed is liable
for the payment of income tax, whereas if there was merely a community of
property, they are exempt from such payment; and (2) whether they should
pay the tax collectively or whether the latter should be prorated among
them and paid individually. chanroblesvirtualawlibrary chanrobles virtual law library

The Collector of Internal Revenue collected the tax under section 10 of Act
No. 2833, as last amended by section 2 of Act No. 3761, reading as follows:

SEC. 10. ( a) There shall be levied, assessed, collected, and paid annually
upon the total net income received in the preceding calendar year from all
sources by every corporation, joint-stock company, partnership, joint
account (cuenta en participacion), association or insurance company,
organized in the Philippine Islands, no matter how created or organized, but
not including duly registered general copartnership (compa�ias colectivas),
a tax of three per centum upon such income; and a like tax shall be levied,
assessed, collected, and paid annually upon the total net income received in
the preceding calendar year from all sources within the Philippine Islands by
every corporation, joint-stock company, partnership, joint account (cuenta
en participacion), association, or insurance company organized, authorized,
or existing under the laws of any foreign country, including interest on
bonds, notes, or other interest-bearing obligations of residents, corporate or
otherwise: Provided, however, That nothing in this section shall be construed
as permitting the taxation of the income derived from dividends or net
profits on which the normal tax has been paid. chanroblesvirtualawlibrary chanrobles virtual law library
The gain derived or loss sustained from the sale or other disposition by a
corporation, joint-stock company, partnership, joint account (cuenta en
participacion), association, or insurance company, or property, real,
personal, or mixed, shall be ascertained in accordance with subsections ( c)
and ( d) of section two of Act Numbered Two thousand eight hundred and
thirty-three, as amended by Act Numbered Twenty-nine hundred and
twenty-six.chanroblesvirtualawlibrary chanrobles virtual law library

The foregoing tax rate shall apply to the net income received by every
taxable corporation, joint-stock company, partnership, joint account (cuenta
en participacion), association, or insurance company in the calendar year
nineteen hundred and twenty and in each year thereafter.

There is no doubt that if the plaintiffs merely formed a community of

property the latter is exempt from the payment of income tax under the law.
But according to the stipulation facts the plaintiffs organized a partnership of
a civil nature because each of them put up money to buy a sweepstakes
ticket for the sole purpose of dividing equally the prize which they may win,
as they did in fact in the amount of P50,000 (article 1665, Civil Code). The
partnership was not only formed, but upon the organization thereof and the
winning of the prize, Jose Gatchalian personally appeared in the office of the
Philippines Charity Sweepstakes, in his capacity as co-partner, as such
collection the prize, the office issued the check for P50,000 in favor of Jose
Gatchalian and company, and the said partner, in the same capacity,
collected the said check. All these circumstances repel the idea that the
plaintiffs organized and formed a community of property only. chanroblesvirtualawlibrary chanrobles virtual law library

Having organized and constituted a partnership of a civil nature, the said

entity is the one bound to pay the income tax which the defendant collected
under the aforesaid section 10 ( a) of Act No. 2833, as amended by section
2 of Act No. 3761. There is no merit in plaintiff's contention that the tax
should be prorated among them and paid individually, resulting in their
exemption from the tax. chanroblesvirtualawlibrary chanrobles virtual law library

In view of the foregoing, the appealed decision is affirmed, with the costs of
this instance to the plaintiffs appellants. So ordered.

G.R. No. L-27933      December 24, 1968

DIVERSIFIED CREDIT CORPORATION, Plaintiff-Appellee, vs. FELIPE

ROSADO and LUZ JAYME ROSADO, Defendants-Appellants.

Montalvo and Bernabe for plaintiff-appellee.

Pedro D. Delfin for defendants-appellants.
 REYES, J.B.L.: chanrobles virtual law library

This appeal from a decision of the Court of First Instance of Bacolod City,
Negros Occidental (Civ. Case No. 7516 of that Court) was certified to us by
the Court of Appeals (Second Division) because the same involves no
questions of fact. chanroblesvirtualawlibrary chanrobles virtual law library

The case had its origin in the Municipal Court of Bacolod City, when the
Diversified Credit Corporation filed an action to compel the spouses Felipe
Rosado and Luz Jayme Rosado to vacate and restore possession of a parcel
of land in the City of Bacolod (Lot 62-B of Subdivision plan LRC-Psd-33823)
that forms part of Lot No. 62 of the Bacolod Cadastre, and is covered by
Transfer Certificate of Title No. 27083 in the name of plaintiff. After answer,
claiming that the lot was defendants' conjugal property, the Municipal Court
ordered defendants to surrender and vacate the land in litigation; to pay
P100.00 a month from the filing of the complaint up to the actual vacating of
the premises; to pay P500.00 attorneys' fees and costs. Upon appeal to the
Court of First Instance, the case was submitted on the following stipulation
of facts (Rec. on App., pp. 59-60):

1. That Lot No. 62-B of Bacolod Cadastre belong to the thirteen co-owners,
including the wife of the defendant herein, who owns 1/13th part pro-
indiviso;
chanrobles virtual law library

2. That on May 11, 1964, Luz Jayme Rosado, wife of the defendant Felipe
Rosado, signed a Deed of Sale together with the co-owners of the property
to the plaintiff as shown by Exh. "A" for the plaintiff; chanrobles virtual law library

3. That on the lot in question the defendant Felipe Rosado had built a house
sometime in 1957 without the whole property having been previously
partitioned among the thirteen (13) co-owners; chanrobles virtual law library

4. That the title of the property has already been transferred to the plaintiff
upon registration of the Deed of Sale in June, 1964, with the Office of the
Register of Deeds; chanrobles virtual law library

5. That demand was made by the plaintiff upon the defendant Felipe Rosado
and his wife Luz Jayme Rosado on October 19, 1964, but until now the
defendant Felipe Rosado has refused to vacate the premises or to remove
his house thereon as shown by Exh. "B" for the plaintiff, on the grounds as
he alleged in his answer that he had built on the lot in question a conjugal
house worth P8,000.00 which necessarily makes the lot on which it stands
subject to Article 158 of the Civil Code and on the point of view of equity
that the wife of the defendant Felipe Rosado received an aliquot share of
P2,400.00 only from the share and if the house were demolished the
defendant would suffer damage in the amount of P8,000.00; chanrobles virtual law library

6. That the portion of the lot on which the house stands, would earn a
monthly rental of P50.00; chanrobles virtual law library

7. That Felipe Rosado, husband of Luz Jayme, did not give his conformity to
the Deed of Sale, Exh. "A". chanroblesvirtualawlibrary chanrobles virtual law library

8. That on October 31, 1964, the defendant Felipe Rosado requested the
plaintiff in the letter, Exh. "C" for the plaintiff, for a period of six (6) months
within which to vacate the premises. chanroblesvirtualawlibrary chanrobles virtual law library

9. That the letter was not answered by the plaintiff and they did not accept
the offer, and on November 25, 1964, they filed a complaint before the
Municipal Court which proves that plaintiff neglected the offer;

The Court of First Instance in its decision rejected the claim of ownership
advanced by Rosado, based upon the construction of a house on the
disputed lot by the conjugal partnership of the Rosado spouses, which
allegedly converted the land into conjugal property under Article 158,
paragraph 2 of the present Civil Code of the Philippines; further held that
defendants were in estoppel to claim title in view of the letter Exhibit C
requesting for six (6) months within which to vacate the premises, and
affirmed the decision of the Inferior Court. Defendant Felipe Rosado resorted
to the Court of Appeals, and his appeal (CA-G.R. No. 37398-R) is the one
now before us. He assigns four alleged errors:

(a) The lower court erred in not holding that Exhibit "A" is null and void,
since upon the construction of the conjugal dwelling thereon, the conjugal
partnership of the defendant-appellant Felipe Rosado and Luz Jayme became
the owner of the share of Luz Jayme in Lot No. 62-B, Bacolod Cadastre; chanrobles virtual law library

(b) The trial court erred in ordering the defendant-appellant to vacate Lot
No. 62-B and in not holding that Exhibit "A" is null and void because as the
legal usufructuary of the share of Luz Jayme Rosado in Lot 62-B, Bacolod
Cadastre, the conjugal partnership, managed and administered by the
defendant-appellant Felipe Rosado can not be deprived of its usufructuary
rights by any contract between Luz Jayme and the plaintiff-appellee; chanrobles virtual law library

(c) The trial court erred in not holding that the defendant-appellant should
be reimbursed the value of the conjugal house constructed on Lot 62-B;
and chanrobles virtual law library
(d) The lower court erred in ordering the defendant-appellant to pay
attorneys' fees in the amount of five hundred (P500.00) pesos.

It can be seen that the key question is whether by the construction of a

house on the lot owned in common by the Jaymes, and sold by them to the
appellant corporation, the land in question or a 1/13th part of it became
conjugal property. chanroblesvirtualawlibrary chanrobles virtual law library

Appellant, husband of vendor Luz Jayme, claims the affirmative invoking the
second paragraph of Article 158 of the Civil Code of the Philippines,
prescribing that:

ART. 158. Improvements, whether for utility or adornment, made on the

separate property of the spouses through advancements from the
partnership or through the industry of either the husband or the wife, belong
to the conjugal partnership. chanroblesvirtualawlibrary chanrobles virtual law library

Buildings constructed, at the expense of the partnership, during the

marriage on land belonging to one of the spouses, also pertain to the
partnership, but the value of the land shall be reimbursed to the spouse who
owns the same.

Rosado further contends that as the building of the house at the expense of
the conjugal partnership converted the 1/13 undivided share on his wife in
Lot 62-B into property of the community, the deed of sale of May 11, 1964
in favor of the appellee corporation was void in so far as said 1/13 share is
concerned, because his wife, Luz Jayme, had ceased to own such share from
and after the building of the house; and Rosado, as manager of the conjugal
partnership, had not participated in the sale, nor subsequently ratified the
same. chanroblesvirtualawlibrary chanrobles virtual law library

We find appellant's thesis legally untenable. For it is a basic principle in the

law of co-ownership, both under the present Civil Code as in the Code of
1889, that no individual co-owner can claim title to any definite portion of
the land or thing owned in common until the partition thereof. Prior to that
time, all that the co-owner has is an ideal, or abstract, quota or
proportionate share in the entire thing owned in common by all the co-
owners. The principle is emphasized by the rulings of this Court. In Lopez
vs. Ilustre, 5 Phil. 567, it was held that while a co-owner has the right to
freely sell and dispose of his undivided interest, he has no right to sell a
divided part of the real estate owned in common. "If he is the owner of an
undivided half of a tract of land, he has the right to sell and convey an
undivided half, but he has no right to divide the lot into two parts, and
convey the whole of one part by metes and bounds." The doctrine was
reiterated in Mercado vs. Liwanag, L-14429, June 20, 1962, holding that a
co-owner may not convey a physical portion of the land owned in common.
And in Santos vs. Buenconsejo, L-20136, June 23, 1965, it was ruled that a
co-owner may not even adjudicate to himself any determinate portion of
land owned in common. chanroblesvirtualawlibrary chanrobles virtual law library

Since the share of the wife, Luz Jayme, was at no time physically
determined, it cannot be validly claimed that the house constructed by her
husband was built on land belonging to her, and Article 158 of the Civil Code
can not apply. Certainly, on her 1/13 ideal or abstract undivided share, no
house could be erected. Necessarily, the claim of conversion of the wife's
share from paraphernal to conjugal in character as a result of the
construction must be rejected for lack of factual or legal basis. chanroblesvirtualawlibrary chanrobles virtual law library

It is the logical consequence of the foregoing ruling that the lower court did
not err in holding that the appellant was bound to vacate the land without
reimbursement, since he knew that the land occupied by the house did not
belong exclusively to his wife, but to the other owners as well, and there is
no proof on record that the house occupied only 1/13 of the total area. The
construction was not done in good faith. chanroblesvirtualawlibrary chanrobles virtual law library

WHEREFORE, the judgment of the Court of First Instance is affirmed. Costs

against appellant Felipe Rosado. chanroblesvirtualaw

[G.R. No. 18009. January 10, 1923. ]

EMILIO PUNSALAN ET AL., Plaintiffs-Appellants, v. C. BOON LIAT ET AL., Defendants-Appellants.

Yeager & Armstrong, C. A. Sobral and Lorenzo & Manalac for plaintiffs and appellants.

Kincaid, Perkins & Kincaid and P. J. Moore for defendants and appellants.

SYLLABUS

1. AMBERGRIS; OCCUPANCY; PROPERTY IN COMMON; SALE BY SOME COOWNERS. — The ambergris which
is the subject-matter of this litigation was the undivided common property of the plaintiffs and one of the
defendants. This common ownership was acquired by occupancy. None of them had any right to sell said
amber, there being an express agreement between the coowners not to sell it without the consent of all.
Held: That the two sales mentioned in the opinion having been made without the consent of all the
coowners, the same have no effect, except as to the portion belonging to those who made them.

2. ID.; ID.; ID.; ACTION FOR RECOVERY. — The right of action for recovery pertaining to each coowner,
derived from the right of ownership inherent in the coownership, can be exercised not only against
strangers, but against the coowners themselves when the latter perform with respect to the thing held in
common acts for their exclusive benefit, or of exclusive ownership, or which are prejudicial to, and in
violation of, the right of the community.

DECISION

AVANCEÑA, J. :
On or about the 13th of July, 1920, a Moro by the name of Tamsi saw from the Cawit-Cawit shores in the
Province of Zamboanga, a big bulky object in the distance which attracted his attention. Thereupon,
together with on another Moro named Bayrula, he went in a small boat to investigate and found it to be a
large fish. They then returned to shore, where they met other Moros and requested their help to catch the
fish. They went in three small boats, there being ten in one, seven in the other, and five in the third,
twenty-two men in all, twenty-one of whom are plaintiffs herein, and the remaining one named Ahamad is
defendant. After having arrived at the place where the fish was, which was found to be a whale, they
proceeded to pull it toward the shore up to the mouth of the river, where they quartered it, having found in
its abdomen a great quantity of ambergris, which was placed in three sacks, two of which were full and the
other half full, and taken to the house of Maharaja Butu, where they left it to the care of Ahamad. Then the
contents of the two full sacks were placed in three trunks. All of these twenty-two persons made an
agreement that they were to be the sole owners of this ambergris and that none of them could sell it
without the consent of the rest. As to the half of amber they agreed that some of them should take it to
Zamboanga to sell for the purpose of ascertaining the market price of the ambergris, in order that they
might dispose of the rest accordingly. Some of them, with Tamsi in charge, went to Zamboanga to sell the
half sack of amber where they did dispose of it to a Chinaman, Cheong Tong, for the sum of P2,700, which
amount was distributed among all the parties in interest. Then they offered to sell for the sum of P12,000 to
the Chinamen, Cheong Tong and Lim Chiat, the rest of the amber contained in the two sacks which had
been left in the house of Maharaja Butu, for safekeeping, and a document (Exhibit A) to this effect was
executed by Lim Chiat and Cheong Tong, on the one hand, and Tamsi, Imam Lumuyod, and Imam Asakil,
on the other. Thereupon they went to Cawit-Cawit on board the launch Ching-kang to get the amber so sold.

It appears that there were other people in Zamboanga who knew of the existence of this ambergris in the
house of maharaha Butu. While the above related events were taking place, Mr. Henry E. Teck, who was one
of those having knowledge of the existence of this amber in Cawit-Cawit and of the fact that the launch
Ching-kang had left for Cawit-Cawit, proposed to the master of the revenue cutter Mindoro to go to Cawit-
Cawit to seize some supposedly contraband opium. After transmitting this information to the Collector of
Customs, he, the master of the Mindoro, immediately proceeded to Cawit-Cawit. There were on board the
vessel Mr. Teck, some Chinamen, among whom were C. Boon Liat, Ong Chua, and Go Tong, and some
Moros who, according to Mr. Teck, were to assist in the arrest of the smugglers. Upon the arrival of the
Mindoro at Cawit-Cawit, the master, accompanied by Mr. Teck and some Moros, went to the house of
Maharaja Butu. As is to be presumed, this information about the supposed contraband opium was but a trick
to have the Mindoro at their disposal. The master proceeded to search the house, stating that he had
information to the effect that there was contraband opium and as a result of the search, he found three
large trunks containing a black substance which had a bad odor. He then asked the owner of the house to
whom those three trunks belonged, and the latter pointed to Ahamad who was present and who stated that
the contents came from the abdomen of a large fish. The master, however, said that it was opium and told
Ahamad that he would take the three trunks on board the ship. Then Ahamad and other Moros asked
permission of the master accompany him on the voyage to Zamboanga, to which the master consented.
When already on board and during the voyage the master consented. When already on board and during the
voyage the master became convinced that the contents of the three trunks were not opium.

During the voyage, Mr. Teck offered to purchase the amber contained in the three trunks, but Ahamad
refused to sell it for the reason that he was not the sole owner thereof, but owned it in common with other
persons who were in Zamboanga. However Mr. Teck, aided by his companions who wielded some influence
in Zamboanga, insisted that Ahamd should sell them the amber, telling him not to be afraid of his
companions, as he would answer for whatever might happen. With this promise of protection, Ahamad
decided to sell the amber for P7,500 and received P2,500 as part payment on account of this price, a bill of
sale having been signed by Ahamadm, Maharaja Butu and three Moros more. The balance of this price was
paid later.

When Cheong Tong, Lim Chiat, and the Moros who had gone to Cawit-Cawit on board the launch Ching-kang
arrived at the house of Maharaja Butu, they found that the amber they had purchased from Tamsi and his
companions was no longer there.

The plaintiffs are twenty-one of the twenty-two Moros who had caught the whale, and Lim Chiat and Cheong
Tong, who had purchased from Tamsi and his companions the amber contained in the three trunks
deposited in the house of Maharaja Butu for safekeeping. They claim the 80 1/2 kilos of ambergris contained
in the three trunks, or its value in the amount of P60,000, and damages in the sum of P20,000. This action
is brought against C. Boon Liat, Ong Chua, Go Tong, Henry E. Teck, and the Moro, Ahamad, the first four
being the persons who purchased this same amber from the one last named while on board the revenue
cutter Mindoro.

It appears from the foregoing that the amber in question was the undivided common property of the
plaintiffs (with the exception of Lim Chiat and Cheong Tong) and the defendant Ahamad. This common
ownership was acquired by occupancy (arts. 609 and 610 of the Civil Code), so that neither Tamsim Imam
Lumuyod, or Imam Asakil had any right to sell it, as they did, to Lim Chiat and Cheong Tong, nor had the
Moro Ahamad any right to sell this same amber, as he did, to C. Boon Liat, Ong Chua, Go Tong, and Henry
E. Teck. There was an agreement between the coowners not to sell this amber without the consent of all.
Both sales having been made without the consent of all the owners, the same have no effect, except as to
the portion pertaining to those who made them (art 399, Civil Code).

Although the original complaint filed in this case was entitled as one for replevin, in reality, from its
allegations, the action herein brought is the ordinary one for the recovery of the title to, and possession of,
this amber. It is no bar to the bringing of this action that the defendant Ahamad is one of the coowners. The
action for recovery which each coowner has, derived from the right of ownership inherent in the
coownership, may be exercised not only against strangers but against the coowners themselves, when the
latter perform, with respect to the thing held in common, acts for their exclusive benefit, or of exclusive
ownership, or which are prejudicial to, and in violation of, the right of the community. (Decision of the
supreme court of Spain of June 22, 1892.) In this case the selling of the amber by the defendant Ahamad as
his exclusive property and his attitude in representing himself to be the sole owner thereof place him in the
same position as the stranger who violates any right of the community. He is not sued in this case as
coowner, for the cause of action is predicated upon the fact that he has acted not as coowner, but as an
exclusive owner of the amber sold by him.

As to the sale made by Ahamad, it is urged that the purchasers acted in good faith. It is contended that the
latter did not know that the amber belonged to some others besides Ahamad. but the evidence shows other
wise. Henry E. Teck himself admitted that on the occasion of the sale of the amber he really had promised
Ahamad to protect him, and although he said that the promise made by him had reference to the
contingency of the amber proving to be opium, as the master of the revenue cutter Mindoro believed, this is
incredible, because he could not make Ahamad a promise, nor could such a promise, if made, have any
influence on the mind of Ahamad, inasmuch as the latter knew that the amber was not opium. If, as Henry
E. Teck admits, he made Ahamad this promise of protection, it should have been only on account of
Ahamad’s refusal to sell the amber due to the fact that he was not the sole owner thereof.

With regard to the action of the trial court in not admitting Exhibits 1 and 2 offered by the defendants, we
believe that it was no error. These documents are affidavits signed by Paslangan, and the best evidence of
their contents was the testimony of Paslangan himself whom the plaintiffs had the right to cross-examine.
Moreover, they are substantially the same as the statements made by Paslangan at the trial when testifying
as witness for the defendants, and for this reason the ruling of the trial court excluding these documents
would not, at all events, affect the merits of the case.

In the complaint it is alleged that the value of the amber is P60,000. Upon the evidence adduced on this
point, and taking into account that the defendant, Henry E. Teck, himself, testifying as witness, has stated
that this amber was worth P1,200 per kilo, we accept this estimated value set forth in the complaint.

The decision of the court below contains the following order for judgment: jgc:chanrobles.com.ph

"Wherefore, it is the judgment and order of the court that the defendants C. boon Liat, Henry E. Teck,
Ahamad Ong Chua, and Go Tong deliver to the plaintiffs, Emilio Punsalan, Bayrula, Daring Gumumtol,
Mohamad, Insael, Dunkalan, Tahil, Dambul, Dagan, Sabay, Sahibul, Pingay, Mujahad, Amilol, Baraula,
Saraban, Lim Chiat, and Cheong Tong twenty-twenty-firsts (20/21) of the amber in question, or, in default
thereof, to pay them its value of twelve thousand pesos (P12,000), less one-twenty-first of said amount." cralaw virtua1aw library

Therefore, the judgment appealed from is affirmed, with the only modification that the value of the amber
which is the subject-matter of this action shall be P60,000, without special finding as to the costs of this
instance. So ordered.
libraryc

G.R. No. L-40064         December 4, 1934

RESURRECCION TAGARAO, BUENAVENTURA TAGARAO and SERAFIN
TAGARAO, Plaintiffs-Appellees, v. MARCOS GARCIA, ET AL., defendants.
MARGARITA GARCIA, ROSARIO GARCIA, DOLORES RUFINO, and
ELUETERIO RUFINO, appellants.

Oceeño and Alba for appellants M. Garcia, R. Garcia and D. Rufino.

Vicente T. Remitio for appellant E. Rufino.
Rafael P. Guerrero for appellees.

DIAZ, J.:

This action was brought by the brothers and sisters Resurreccion Tagarao,
Buenaventura Tagarao, and Serafin Tagarao, children of the deceased
Merced Garcia, daughter of the deceased Buenaventura Garcia who was a
brother of the defendant Marcos Garcia, against the latter and the other
defendants named Paula Tabifranca, Margarita Garcia, Rosario Garcia,
Dolores Rufino and Eleuterio Rufino, praying that judgment be rendered
against the defendants ordering them to deliver to the plaintiffs, after
executing the necessary deeds of transfer, one-fourth of the land known as
lot No. 510 of cadastral case No. 11 of the municipality of Isabela,
Occidental Negros (G. L. R. O. Cad. Record No. 100), which was formerly
covered, first by original certificate of title No. 10009 (Exhibit M), later by
transfer certificate of title No. 3001 (Exhibit 3), and at present by transfer
certificate of title No. 8782 (Exhibit 7), all of the office of the register of
deeds of said Province of Occidental Negros. chanroblesvirtualawlibrary chanrobles virtual law library

In their amended complaint of July 29, 1931, which was reamended on

March 8, 1932, said plaintiffs prayed that should the defendants fail to
deliver to them the required portion of the land in question, the latter be
ordered to pay them the value thereof based on the assessed value of the
whole property, and that they furthermore be indemnified for the value of
1,407 cavans of palay at the rate of P4 a cavan, alleging that said 1,407
cavans represented their share in the products of said land from the time the
defendants took exclusive possession thereof. chanroblesvirtualawlibrary chanrobles virtual law library

Before the plaintiffs filed their amended complaint on the date above stated,
the defendants Marcos Garcia, Paula Tabifranca, Margarita Garcia, Rosario
Garcia and Dolores Rufino filed a demurrer to said plaintiffs' original
complaint, alleging that it did not state sufficient facts to constitute a cause
of action and was furthermore ambiguous, unintelligible and uncertain. The
lower court sustained said demurrer and ordered the plaintiffs to amend
their complaint within the reglementary period. chanroblesvirtualawlibrary chanrobles virtual law library
When the plaintiffs amended their complaint in the sense expressed in their
pleading of February 13, 1929, said five defendants again filed another
demurrer alleging this time that the lower court lack jurisdiction to try the
case by reason of the subject matter involved and the lower court overruled
said demurrer ordering them to answer within the reglementary period. In
compliance therewith, the defendants on October 28, 1929, filed their
answer wherein the first two defendants, or the spouses Marcos Garcia and
Paula Tabifranca, alleged that although they formerly were the absolute and
exclusive owners of the land in question they already ceased to be so at that
time, having sold the half belonging to Paula Tabifranca to the defendants
Margarita Garcia, Rosario Garcia and Dolores Rufino, and the other half
belonging to Marcos Garcia to Eleuterio Rufino. On June 9, 1931, said two
defendants filed a petition of even date stating that they had no more
interest in the case, having sold their respective participations to the two
Garcias and two Rufinos and praying in succession that they be absolved
from the complaint. chanroblesvirtualawlibrary chanrobles virtual law library

A few days later, or on July 15, 1931, said two defendants Marcos Garcia
and Paula Tabifranca filed a motion to include Eleuterio Rufino among the
defendants and on the following day the lower court, granting the motion,
ordered the inclusion of Eleuterio Rufino in the case as one of the
defendants. For this purpose the plaintiffs filed their said amended complaint
of July 29, 1931, which they reamended with a slight addition on March 8,
1932.chanroblesvirtualawlibrary chanrobles virtual law library

The defendants Marcos Garcia and Paula Tabifranca did not answer the
plaintiffs' last amended complaint but Margarita Garcia, Rosario Garcia and
Dolores Rufino jointly entered a general denial of all the allegations
contained therein, alleging as a special defense (1) that they are the
exclusive owners of one-half of the land in question; (2) that the plaintiffs
have already lost their right of action because such right, if they ever had
any, has already prescribed; and (3) said plaintiffs cannot invoke the
decision rendered in civil case No. 4091 because with respect to them it does
not constitute res judicata. chanroblesvirtualawlibrary chanrobles virtual law library

The defendant Eleuterio Rufino, answering said plaintiffs' last amended

complaint, stated in his pleading of November 19, 1931, that he denied each
and every allegation contained therein, alleging as a special defense that one
half of the land in question was sold by Marcos Garcia and purchased by him
in good faith, paying the corresponding price therefor. chanroblesvirtualawlibrary chanrobles virtual law library

After due trial the lower court rendered judgment ordering the defendants to
deliver to the plaintiffs one fourth of the land in question after executing the
necessary deeds of transfer in favor of said plaintiffs or, in lieu thereof, to
indemnify them in the sum of P3,882 plus the value of 1,000 cavans of palay
at P3 a cavan, with costs. In said judgment said court "declared the deeds of
sale executed by Marcos Garcia in favor of the defendant Eleuterio Rufino
and by Paula Tabifranca in favor of the defendants Margarita Garcia, Rosario
Garcia and Dolores Rufino, null and void." The defendants Margarita Garcia,
Rosario Garcia, Dolores Rufino and Elueterio Rufino appealed but Marcos
Garcia and Paula Tabifranca did not. chanroblesvirtualawlibrary chanrobles virtual law library

In support of their appeal, the defendants Margarita Garcia, Rosario Garcia,

and Dolores Rufino contend that the lower court committed the eight alleged
errors assigned in their brief as follows:

1. The lower court erred in not sustaining the demurrer of the defendants-
appellants Margarita Garcia, Rosario Garcia and Dolores Rufino to the second
amended complaint of the plaintiffs. chanroblesvirtualawlibrary chanrobles virtual law library

2. The lower court erred in admitting, under objections of the defendants-

appellants, oral and documentary evidence tending to attack original
certificate of title No. 10009 in the name of the spouses Marcos Garcia and
Paula Tabifranca issued on May 17, 1918. chanroblesvirtualawlibrary chanrobles virtual law library

3. The lower court erred in holding that the deed of sale made and executed
by Paula Tabifranca with respect to her undivided one-half (�) share of lot
No. 510 of the cadastral survey of Isabela in favor of Margarita Garcia,
Rosario Garcia and Dolores Rufino, was made without consideration and
declaring same null and void being fictitious. chanroblesvirtualawlibrary chanrobles virtual law library

4. The lower court erred in holding that the transaction made by Paula
Tabifranca in favor of Margarita Garcia, Rosario Garcia and Dolores Rufino
had no other purpose than to deprive the plaintiffs of their shares in lot No.
510, as legitimate heirs of Ventura Garcia and Merced Garcia. chanroblesvirtualawlibrary chanrobles virtual law library

5. The lower court erred in condemning the defendants-appellants Margarita

Garcia, Rosario Garcia and Dolores Rufino, jointly and severally with the
other defendants to return to the plaintiffs one-fourth (�) of lot No. 510 of
the cadastral survey of Isabela, or in its place, to indemnify the plaintiffs the
sum of P3,882, value of said portion. chanroblesvirtualawlibrary chanrobles virtual law library

6. The lower court erred in condemning the defendants-appellants Margarita

Garcia, Rosario Garcia and Dolores Rufino, jointly and severally with the
other defendants, to pay the plaintiffs one thousand cavanes of palay or its
value at P3 per cavan. chanroblesvirtualawlibrary chanrobles virtual law library
7. The lower court erred in holding that the right of the plaintiffs to present
this action to recover a portion of lot No. 510 of the cadastral survey of
Isabela has not prescribed. chanroblesvirtualawlibrary chanrobles virtual law library

8. The lower court erred in denying the petition for a new trial of the
defendants-appellants Margarita Garcia, Rosario Garcia and Dolores Rufino.

The appellant Eleuterio Rufino also contends that said court in rendering its
judgment in question committed the four alleged errors relied upon in his
brief, which read as follows:

1. The lower court erred in admitting over the defendant's objection oral as
well as documentary evidence of the plaintiffs tending to attack the stability
of original certificate of title No. 10009 (Exhibit 5) in the name of the
defendants Marcos Garcia and Paula Tabifranca, relative to alleged facts that
took place prior to the issuance of said title. chanroblesvirtualawlibrary chanrobles virtual law library

2. The lower court erred in ordering the defendant Eleuterio Rufino, jointly
with his codefendants, to deliver to the plaintiffs one-fourth (�) of said lot
No. 510, or in lieu thereof to indemnify them in the sum of P3,882
representing the value of said portion. chanroblesvirtualawlibrary chanrobles virtual law library

3. The lower court erred in holding in its judgment that the deed (Exhibit 8)
is fictitious and fraudulent and declaring it null and void. chanroblesvirtualawlibrary chanrobles virtual law library

4. The lower court erred in not absolving the defendant and appellant
Eleuterio Rufino from the complaint and in denying his motion for a new
trial.

Without losing sight of the purpose of the complaint of the plaintiffs and
appellees as expressed in the prayer of their pleadings or last amended
complaints, it is clear that the first assignment of alleged error attributed to
the lower court by the appellants is unfounded on the ground that its
purpose is not to attack the validity of the decree by virtue of which original
certificate of title No. 10009 was issued in favor of Marcos Garcia and Paula
Tabifranca, or that under which transfer certificates of title Nos. 3001 and
8782, were issued later, but to compel the defendants to give them one-
fourth of the land described in said certificates and to pay them the
indemnity referred to therein. chanroblesvirtualawlibrary chanrobles virtual law library

The facts which have been clearly established at the trial, according to the
record and the evidence before us, may be briefly stated as follows: chanrobles virtual law library
The land in question has an area of 31 hectares, 3 ares and 65 centares. It
was originally purchased with pacto de retro by the defendant Marcos Garcia
and his brother Ventura Garcia from Vidal Saravia on July 20, 1900. As the
latter failed to exercise his right of repurchase the two brothers became the
absolute owners of said land and it was so held by the Court of First
Instance of Occidental Negros in case No. 274 which was instituted by Pedro
Saravia, as administrator of the intestate estate of Vidal Saravia, against
said two brothers to compel the latter to resell it to him (Exhibit L). When
the two brothers purchased said land, the defendant Marcos Garcia was yet
single because he had not even been married to his former wife, as the
defendant Paula Tabifranca is only his wife by a second marriage. Marcos
Garcia had by his first wife three children who are the defendants Margarita
Garcia, Rosario Garcia and the deceased Catalina Garcia, mother of the
defendant Dolores Rufino. Ventura Garcia, now deceased, also had two
children: Merced Garcia who was married to Rafael Ragarao, and Claro
Garcia.chanroblesvirtualawlibrary chanrobles virtual law library

While Merced Garcia was still living, or at least until June, 1914, the
defendant Marcos Garcia had been delivering to her and her brother Claro
Garcia their share of the products harvested from the land in question.
Merced Garcia who, as stated, died about the year 1914 and was followed
years later by her husband Rafael Tagarao, had three children, the herein
plaintiffs Resurreccion Tagarao, Serafin Tagarao and Buenaventura Tagarao.
When this action was brought on October 14, 1928, Resurreccion Tagarao
was more than 24 years of age; Serafin was then only 23 years, 1 month
and 1 day, and Buenaventura, 18 years, 4 months and 3 days. chanroblesvirtualawlibrary chanrobles virtual law library

With the plaintiffs' grandfather, Ventura Garcia, and their mother, Merced
Garcia, already dead, the defendant Marcos Garcia claimed the lands in
question in cadastral case No. 11 of the municipality of Isabela of the
Province of Occidental Negros (G. L. R. O. Cadastral Record No. 100), known
in said case as lot No. 510, alleging in the pleading presented by him to that
effect (Exhibit I) that he had acquired it on July 20, 1904, when he was yet
unmarried to his codefendant Paula Tabifranca. Before the original certificate
of title acknowledging him to be the owner of the land in question was
issued to him, and during the period within which any person could ask for
the revision of the decree issued to that effect, Marcos Garcia, fearing that
Claro Garcia, brother of the plaintiffs' mother, might frustrate his designs by
asking for said revision, executed in favor of Claro Garcia a document
binding himself to give to the latter four hectares of said land upon the
issuance to him of the corresponding certificate of title. In view thereof,
Claro did not ask for the revision of the decree but he later brought an
action, case No. 4091 of the Court of First Instance of Occidental Negros,
against Marcos Garcia to recover from him four hectares of said land, lot No.
510 of the cadastre of Isabela, basing his claim on the document which
Marcos Garcia executed in his favor in order to promise and bind himself to
give Claro said four hectares, because after Marcos Garcia had obtained his
certificate of title he refused to comply with his promise; and as a result said
court, on October 10, 1927, rendered judgment against Marcos Garcia
ordering him to segregate four hectares of said land to be delivered to Claro
Garcia and furthermore to pay to the latter as indemnity 90 cavans of palay,
or the value thereof in the sum of P360. chanroblesvirtualawlibrary chanrobles virtual law library

In the certificate of title which was issued in favor of Marcos Garcia on May
17, 1918 (original certificate of title No. 10009), by virtue of his claim
presented in said cadastral case No. 11 of the municipality of Isabela.
Occidental Negros, it was stated, as in the decree ordering the issuance
thereof, that one-half of the land therein described belonged to him, and
that the other half to his wife by a second marriage, Paula Tabifranca. chanroblesvirtualawlibrary chanrobles virtual law library

A few years after the issuance of said certificate of title the defendant Paula
Tabifranca, second wife of the defendant Marcos Garcia, sold her rights to
the defendants Margarita Garcia, Rosario Garcia and Dolores Rufino, her
husband's daughters and granddaughter, respectively, by his first marriage,
executing the deed Exhibit N dated December 31, 1921, while the alleged
purchaser Dolores Rufino was yet a minor. This was agreed upon between
her and her husband Marcos Garcia to prevent the land, part of which
belonged to her under said certificate of title, from ever passing to her son
by her first marriage named Juan Tabigui, as she was already a widow when
she contracted marriage with said Marcos Garcia. chanroblesvirtualawlibrary chanrobles virtual law library

In the meantime the plaintiff Resurreccion Tagarao was informed that her
uncle Claro Garcia had succeeded in obtaining his share of the land in
question and, desiring to protect her rights and those of her brothers and
coplaintiffs, she negotiated with Marcos Garcia so that he might give them
their corresponding share. Marcos Garcia at first entertained her with
promises that he would see to it that she got what she wanted but later, at
her back, he sold his share of the land to the defendant Eleuterio Rufino,
brother of his son-in-law Lope Rufino, husband of the defendant Rosario
Garcia, executing in favor of Eleuterio Rufino the deed Exhibit 8 wherein it
was made to appear that the price paid to him for only one-half of the land,
lot No. 510, was P6,567. chanroblesvirtualawlibrary chanrobles virtual law library

Twelve days after Paula Tabifranca had executed said deed of transfer
Exhibit N in favor of her stepdaughters Margarita Garcia and Rosario Garcia
and of her husband Marcos Garcia's granddaughter named Dolores Rufino,
said three defendants together with Marcos Garcia obtained transfer
certificate of title No. 3001, after the cancellation of original certificate of
title No. 10009, and two days after Marcos Garcia had executed in favor of
the defendant Eleuterio Rufino the deed of sale Exhibit 8 whereby he sold to
the latter his half of the land described in the above stated certificate of title
No. 10009 (Exhibit M), he and his daughters and granddaughter jointly with
the defendant Eleuterio Rufino succeeded in having said transfer certificate
of title No. 3001 (Exhibit 3) cancelled to be substituted, as it was in fact
substituted, by transfer certificate of title No. 8782 (Exhibit 7). chanroblesvirtualawlibrary chanrobles virtual law library

The transfer made by Paula Tabifranca in favor of her stepdaughters

Margarita and Rosario Garcia and her husband's granddaughter Dolores
Rufino, and that made by Marcos Garcia in favor of Eleuterio Rufino, stated
in said deeds Exhibits N and 8, are fictitious and feigned in view of the
following reasons inferable from the evidence of record: chanrobles virtual law library

Notwithstanding the fact that in the original certificate of title No. 10009
Paula Tabifranca's right to one half of the property therein described has
been acknowledged, she was conscious that she was not entitled thereto
because it belonged exclusively to her husband or, at least, he had acquired
it long before he married her. This explains the ease with which she parted
with her alleged right for a sum disproportionate to the true value of the
land sold by her. The alleged purchasers Margarita Garcia, Rosario Garcia
and Dolores Rufino were not in a financial position to pay her the alleged
purchase price which, according to Exhibit N, amounted to P1,500; and
Dolores Rufino, being then of tender age, could not have taken part in said
contract that she was represented by her father Lope Rufino, because it does
not appear that the latter was then the guardian of her property and it is a
fact that minors cannot give consent to any contract. chanroblesvirtualawlibrary chanrobles virtual law library

Neither was Eleuterio Rufino in a financial position to pay what he allegedly

paid to the defendant Marcos Garcia for the latter's share in the land in
question on the ground that the amount of six thousand five hundred sixty-
seven pesos (P6,567) which is the price allegedly paid by him to Marcos
Garcia is a fortune greater than the income he could have had for several
years, because his means of livelihood, according to his own testimony,
consisted simply of extracting tuba from about 200 coconut trees leased
from different persons and in retailing fresh fish bought by him for a lump
sum in order to obtain a small profit. He is a brother of the defendant
Rosario Garcia's husband, and notwithstanding that the deed Exhibit 8 was
executed in his favor, the land continues until now to be registered for
taxation purposes in the name of Marcos Garcia; and notwithstanding the
alleged deed of transfer Exhibit 8 the land in question continues to be under
the Isabela Sugar Company Inc., of Occidental Negros, as property of named
"THREE SISTERS - A," "THREE SISTERS - B," and "HACIENDA GARCIA," the
first portion being under the management of Macario Torilla, husband of the
defendant Margarita Garcia; the second under the management of Lope
Rufino, husband of the defendant Rosario Garcia; and the third under that of
Claro Garcia, uncle of the plaintiffs (Exhibit D). In addition to these reasons,
it may and should be stated that Elueterio Rufino's testimony explaining how
the transaction between him and Marcos Garcia was effected, does not agree
with the text of the deed of transfer Exhibit 8. It is expressly stated in said
document that the price paid by him for the land in question was P6,567 and
that he also assumed the lien in the form of a mortgage constituted on said
land to secure the payment of Candido Montilla of a loan in the sum of
P4,675 from which it may be inferred that the total price paid by him for said
land was really P11,242. Notwithstanding this, he testified that he paid only
P1,892 to the defendant Marcos Garcia. It should be stated furthermore that
on December 1, 1928, or scarcely two and a half months from the time he
bought said land from Marcos Garcia, Eleuterio Rufino leased it, according to
Exhibit 9, to Marcos Garcia's sons-in-law and husbands of the defendants
Margarita Garcia and Rosario Garcia, when it is natural that as he was poor
and his business of tapping tuba and reselling fishes was not lucrative, he
should have personally taken charge of the cultivation and exploitation of
the land bought by him. Furthermore, on January 10, 1930, long after the
alleged transfer of said land, Exhibit 8, Macario Torilla and Lope Rufino, as
Marcos Garcia's attorneys-in-fact, the latter having executed in their favor
the power of attorney, Exhibit O-1, by virtue of which they mortgaged the
land in question in the name of their principal to Candido Montilla on July 7,
1928, Exhibit O, paid to Montilla the sum of P514.25 as interest on the loan
secured by the mortgage above stated (Exhibit 4). This last fact convinces
us more that said deed of transfer Exhibit 8 is fictitious because if it were
genuine, there being as in fact there is in said document a stipulation that
the purchaser Eleuterio Rufino assumed all the lien on said property,
Eleuterio Rufino, not Marcos Garcia, personally, nor through his sons-in-law
Macario Torilla and Lope Rufino, should have paid said interest. chanroblesvirtualawlibrary chanrobles virtual law library

The foregoing proves to our satisfaction that errors 2, 3 and 4 relied upon by
the appellants Margarita Garcia, Rosario Garcia and Dolores Rufino in their
brief are absolutely unfounded, and so is alleged error No. 3 attributed to
the lower court by the appellant Eleuterio Rufino.chanroblesvirtualawlibrary chanrobles virtual law library

It follows from the foregoing conclusions and considerations that errors 5

and 2 attributed to said court by the defendants Garcia and Eleuterio Rufino,
respectively, are likewise unfounded. If the transfers made under the deeds
which later made possible the issuance to the interested parties of
certificates of title Nos. 3001 and 8782 (Exhibits 3 and 7) are fraudulent, it
is but proper, being in accordance with law, that the defendants execute the
deeds of transfer prayed for by the plaintiffs in their complaint in order to
give them what is theirs; and this is undoubtedly one fourth of the entire
land because if one half belonged to the plaintiffs' grandfather who, as
already stated, had only two children: Claro Garcia, the plaintiffs' uncle, and
Merced Garcia, their mother. chanroblesvirtualawlibrary chanrobles virtual law library

But the question now arises whether or not the three plaintiffs are entitled to
what they jointly pray for in their complaint. There is no doubt but that the
plaintiffs Serafin Tagarao and Buenaventura Tagarao are entitled thereto on
the ground that the former was only 23 years, 1 month and 1 day, when this
action was brought, and therefore the three years exception granted by the
provisions of section 42 of Act No. 190 had not yet elapsed as to him, and
because Buenaventura Tagarao, then being only 18 years, 4 months and 3
days of age, was yet a minor and the period of prescription as to him is
extended to three years after he was attained majority. chanroblesvirtualawlibrary chanrobles virtual law library

The plaintiff Resurreccion Tagarao, notwithstanding that she was of legal age
when this action was brought, contends that neither has her right to seek
the same relief prayed for by her brothers and coplaintiffs prescribed, and
cites in support of her contention the ruling laid down in the case of
Velazquez vs. Teodoro (46 Phil., 757). It was truly stated in said case, citing
with approval a doctrine laid down by the Supreme Court of the State of
Ohio in the case of Sturges and Anderson vs. Longworth and Horne (1 Ohio
St., 545), that:

Where the interests of two defendants are joint and inseparable, and the
rights of one are saved under the provision of the statute of limitations, on
account of his disability, such saving inures to the benefit of the other
defendant, although laboring under no disability.

As may be seen, this ruling refers to cases in which the rights of the
defendants are joint and inseparable because when they are not so, that is,
when they are joint and several at the same time, as is the case of the
plaintiffs whose rights are joint and several, the rule according to said court,
interpreting the section from which section 42 of Act No. 190 was copied, is
different; and said court stated that in said cases the disability which
protects an heir from the effects of prescription is no protection to coheirs,
or in other words, using the same language of the author of the footnotes on
the decision rendered in the case of Moore vs. Armstrong, reported in 36
Am. Dec., 63, 78, wherein the same Supreme Court of the State of Ohio
sustained the latter point of view, "where the rights of the parties are not
joint, the cases are uniform, and hold that the disability of one will prevent
the operation of the statute as to him, but that those who are not under a
disability will be barred."
chanrobles virtual law library
The case of Moore vs. Armstrong, supra, has more points in common with
the case at bar than those of Sturges and Anderson vs. Longworth and
Horne, and Wilkins vs. Philips cited in said case of Velazquez vs. Teodoro,
supra. The question for determination in the former case was whether or not
the period of prescription runs not only against the heir who is laboring
under disability but also against his coheirs who are sui juris. The plaintiffs,
to all appearances, were the heirs of one Furgus Moore and the heiress who
seemed to be laboring under disability was a married woman named Mrs.
Fleming. The Supreme Court of Ohio decided the question in the negative
with the remark that whatever doubt might once have been entertained on
this subject, it was conclusively settled both in Great Britain and in the
United States that the statute is saved in favor only of the person laboring
under the alleged disability, adding in succession that this is precisely the
rule with respect both to coparceners and tenants in common. chanroblesvirtualawlibrary chanrobles virtual law library

It cannot be argued that the separation of rights among the plaintiffs was
not practicable in the sense that one of them could not have disposed of or
alienate his legal portion of the thing possessed in common without the
consent of the others, because the law provides otherwise. It says:

Every part owner shall have the absolute ownership of his part, and of the
fruits and benefits derived therefrom, and he may, therefore, sell, assign, or
mortgage it, and even substitute another person in its enjoyment, unless
personal rights are involved, but the effect of the sale or mortgage, with
respect to the other participants, shall be limited to the share which may be
allotted him in the partition upon the dissolution of the community.

Furthermore, whosoever among said plaintiffs should have desired the

partition of the property of which he was a coowner, could have demanded
such partition inasmuch as the law then allowed and still allows such act
(article 400, Civil Code; and section 181, Act No. 190). What particularly
distinguishes the case at bar from that of Sturges and Anderson vs.
Longworth and Horne, supra, and the other cases wherein it was established
that when the rights and joint the exception which saves one of the
interested parties also inures to the benefit of the others, is that it was
assumed in the latter cases that the rights and interests involved therein
pertained to joint tenancy, not tenancy in common, which are two distinct
relations, each having its own juridical meaning. The distinguishing feature
between the one and the other, as stated in the case of Mette vs. Feltgen
(148 Ill., 357, 371), is that the surviving coowner in joint tenancy is
subrogated in the rights of the deceased coowner immediately upon the
death of the latter, by the mere fact of said death, but this does not take
place in cases of tenancy in common which corresponds to what is known in
our law as community of property (articles 392 et seq. of the Civil Code). For
this reason, according to American jurisprudence, a coowner in joint tenancy
can not dispose of his share or interest in the property which is the subject
matter of the joint tenancy, without the consent of the other coowner
because in so doing he prejudices the other's rights and interests. chanroblesvirtualawlibrary chanrobles virtual law library

That the separation of rights and interests among the plaintiffs was
practicable is further evidenced by the fact that Claro Garcia with whom they
were entitled to one-half of the land in question could recover his legal
portion thereof from Marcos Garcia, although certainly not in its entirety,
having failed to assert his rights. This being so, and it being known as it is in
fact known that the purpose of the statute of limitations is no other than to
protect the diligent and vigilant, not the person who sleeps on his rights,
forgetting them and taking no trouble of exercising them one way or another
to show that he truly has such rights, it is logical to conclude that the right
of action of the plaintiff Resurreccion Tagarao is barred, and the fact that
that of her brothers and coplaintiffs Serafin and Buenaventura Tagarao still
subsists does not inure to her benefit.chanroblesvirtualawlibrary chanrobles virtual law library

Although Resurreccion Tagarao could have enforced the right which she
exercised in this case on May 17, 1918, when Marcos Garcia and Paula
Tabifranca obtained original certificate of title No. 10009 (Exhibit M) or
shortly afterwards, or long before, that is, from the death of her mother
Merced Garcia in 1914 or 1915, she did nothing to protect her rights. On the
contrary, she allowed said spouses to perform acts of ownership on the land
covered by said certificate, publicly, peacefully, uninterrupted and adversely
to the whole world including herself, and from that time until the filing of her
first complaint more than ten years had elapsed. It is for this reason why it
cannot be sustained that the defendants Marcos Garcia and Paula
Tabifranca, after it has been shown that the transfers made by them are null
and void, being fictitious and false, hold the land in question in trust,
because if they ever held it in said capacity it had been during the lifetime of
the plaintiffs' mother to whom said defendants used to give part of the fruits
thereof. But after she had died, their possession was under the
circumstances above stated and the law provides that in whatever way the
occupancy by a person claiming to be the owner of a real property may have
commenced, if said occupancy is under claim of title and is furthermore
open, continuous for ten years and adverse, it constitutes sufficient title for
the occupant thereof (sections 40 and 41 of Act No. 190), and there can be
no other exception to this rule than the disability of persons who are entitled
to said property, by reason of age, some mental defect, or imprisonment, for
whom the same law provides the exceptions contained in its section 42. chanroblesvirtualawlibrary chanrobles virtual law library

It having been established by the evidence for both the plaintiffs and the
defendants that Candido Montilla holds a lien on the land in question, which
is noted at the back of transfer certificates of title Nos. 3001 and 8782
(Exhibits 3 and 7) for a loan in the sum of P4,675 which he granted to
Marcos Garcia in the honest belief that the latter was the true owner of the
land described in certificates of title Nos. 10009 (Exhibit M), 3001 (Exhibit
3), and 8782 (Exhibit 7), it is but just that said lien be acknowledged by the
plaintiffs Serafin Tagarao and Buenaventura Tagarao, with the necessary
reservations in favor of said two plaintiffs. chanroblesvirtualawlibrary chanrobles virtual law library

It should be stated in passing that the land in question, lot No. 510 of
cadastral case No. 11 of Isabela, Occidental Negros, is assessed at P15,530,
and therefore one-twelfth (1/12) thereof is worth P1,294.17 on that basis.
chanrobles virtual law library
chanroblesvirtualawlibrary

As to the indemnity which the plaintiffs claim for the defendants, the
conclusion arrived at by the lower court in its decision and judgment is
supported by the evidence, that is, the plaintiffs' share of the crops from
1918 to 1929, including that of Resurreccion Tagarao, should be 1,000
cavans of palay. However, it being clear that Resurreccion Tagarao's action
is barred, it should be understood that only the plaintiffs Serafin Tagarao
and Buenaventura Tagarao are entitled to compel the defendants to pay to
them the value of two-thirds of the 1,000 cavans of palay at the rate of P3 a
cavan. chanroblesvirtualawlibrary chanrobles virtual law library

For all the foregoing, the judgment appealed from is affirmed in so far as it
favors the plaintiffs Serafin Tagarao and Buenaventura Tagarao, and said
defendants are hereby ordered to execute in favor of said Tagarao brothers
and deed or deeds necessary to transfer to them, by virtue of this judgment,
two-twelfths (2/12) of the entire lot No. 510 of the cadastre of Isabela,
Occidental Negros, including the portion transferred to Claro Garcia (G. L. R.
O. Cad. Record No. 100); to indemnify each of them in a sum equal to what
he may pay to the mortgage creditor Candido Montilla to free his said
portion from the lien thereof in favor of said Montilla; or likewise to pay to
each of them, upon failure of the defendants to deliver said portion and
execute the necessary deed of transfer, the sum of P1,294.17; and
furthermore to pay, as indemnity, the value of two-thirds of 1,000 cavans of
palay, at the rate of P3 a cavan, with costs against the defendants. Said
judgment is reversed as to the plaintiff Resurreccion Tagarao. So ordered. chanroblesvirtualawli

G.R. No. 124118             March 27, 2000

MARINO, RENATO, LETICIA, IMELDA, ALICIA, LIGAYA, and ZENAIDA, all surnamed
ADRIANO, petitioners,
vs.
COURT OF APPEALS, CELESTINA, MANOLO and AIDA, all surnamed ADRIANO, respondents.

GONZAGA-REYES, J.:
Petition for review on certiorari of the Decision of the Court of Appeals, Second Division, affirming in
1

toto the Joint Order of the Regional Trial Court of Lucena City, Branch 55, which dismissed Civil
2

Case No. 88-115 for annulment of will and ordered the disposition of the estate of Lucio Adriano in
accordance with the provisions of his last will and testament in Spec. Proc. No. 4442.

The pertinent facts are as follows:

The testator, Lucio Adriano also known as Ambrocio Adriano, married Gliceria Dorado on October
29, 1933. Out of their lawful marriage, they had three children, namely, Celeste, Manolo, and Aida,
private respondents in this case. Sometime in 1942 or prior thereto. Lucio and Gliceria separated,
and Gliceria settled in Rizal, Laguna where she died on June 11, 1968. Also in 1942 or even earlier,
Lucio cohabited with Vicente Villa, with whom he had eight children Marino, Renato, Leticia, Imelda,
Maria Alicia, Ligaya, Jose Vergel, and Zenaida, all surnamed Adriano. All his children by Vicenta
Villa are named petitioners in the instant case, with the exception of Jose Vergel, who died before
the inception of the proceedings.

On November 22, 1968, or five months after the death of Gliceria, Lucio married Vicenta. Lucio and
Vicenta and their children lived in Candelaria, Quezon until the spouses separated in 1972. 3

On October 10, 1980, Lucio executed a last will and testament disposing of all his properties, and
assigning among others, his second wife Vicenta and all his children by his first and second
marriage as devisees and legatees therein. Among the properties bequeathed in the will were a
45,000 square meter lot and the residential house, rice mill, warehouse and equipment situated
thereon located in Candelaria, Quezon and registered under Transfer Certificate of Title ("TCT") No.
T-56553 in the Registry of Deeds of Quezon , which was disposed of in the following manner; (1) to
4

private respondents, Lucio's children by his first wife, 10,000 square meters of the disputed property,
including the warehouse, rice mill, and equipment situated thereon; (2) to Vicenta and petitioners, his
children by his second marriage the remaining 35,000 square meters, and (3) to private
respondents, the residential house also within the same property. 5

On February 11, 1981, Lucio died and private respondent Celestina Adriano, who was instituted in
Lucio's will as its executrix, filed a petition for the probate of the will on February 18, 1981 before the
RTC of Lucena City. The probate case was docketed as Spec. Proc. No. 4442. After due hearing
and despite the Opposition filed by Vicenta, the RTC allowed the probate of the will and directed the
issuance of letters testamentary to petitioner-executrix Celestina Adriano in an Order dated August
22, 1983. On November 10, 1983, Vicenta appealed said Order to the then Intermediate Appellate
Court, which in turn affirmed the probate of the will. Vicenta died on July 2, 1985. 6

On August 17, 1988, and while the proceedings for settlement of estate were pending before the
RTC, petitioners instituted an action for annulment of Lucio Adriano's will which was docketed as
Civil Case No. 88-115. In the complaint plaintiffs-petitioners alleged that before the marriage of Lucio
and their mother, Vicenta, on November 22, 1968, the two lived together as husband and wife and
as such, acquired properties which became the subject of inventory and administration in Spec.
Proc. No. 4442. Plaintiffs claimed that the properties bequeathed in Lucio's will are undivided "civil
partnership and/or conjugal properties of Lucio Adriano and Vicenta Villa", and thus, the will sought
to be probated should be declared void and ineffective insofar as it disposes of the rightful share or
properties of Vicenta.7

It is also not disputed that the contested properties in Civil Case No. 88-115 and Spec. Proc. No.
4442 were also the subject of a complaint filed sometime in 1980 by Vicenta against Lucio, docketed
with the then Court of First Instance of Quezon, Lucena City, Branch II as Civil Case No. 7534
wherein Vicenta sought the provisional partition or separation of the properties pendente lite. The
case was dismissed on January 28, 1991 without prejudice, for lack of interest.

Spec. Proc. No. 4442 and Civil Case No. 88-115 were consolidated and jointly heard by the RTC.

The trial court favored the evidence of private respondents, which indicated that the purchase money
for the contested properties came from the earnings of Lucio in a business partnership that he
entered into in 1947, or during the subsistence of his marriage to Gliceria. The trial court further
found that Lucio's initial capital infusion of P15,000.00 in the business partnership was in fact
obtained from the conjugal fund of his first marriage. The evidence of private respondents is thus
summarized by the trial court.

Defendants evidence, on the other hand tends to show that the original common fund of
Lucio (Ambrocio) Adriano in the amount of P15,000.00 was invested by Lucio Adriano in a
partnership called the "Central Rice Mill & Co." which was formed and organized on
November 30, 1947. Such initial investment came from the savings of Lucio Adriano and
Gliceria Dorado before World War II, which was earned by said spouses by means of
ambulant peddling of betel nuts and ikmo leaves and, subsequently, by the selling of (a)
variety (of) goods and rice retailing at a market stall which they acquired at the public market
of Candelaria, Quezon. On these savings, spouses Lucio Adriano and Gliceria Dorado
added the proceeds of the sale of a "Fairbanks" rice mill during the Japanese occupation
sometime between the years 1943 and 1944. The same rice mill was then located at the
south end of Gonzales Street near the public marker of Candelaria, Quezon, and was
acquired by the same spouses through their joint efforts and industry made from the time of
their marriage in 1933.

It is likewise shown by defendants' evidence that on January 8, 1951, the Articles of Co-
Partnership of "Central Rice Mill & Co." was amended and its name was changed to
"Quezon Central Rice Mill & Co." Lucio Adriano then made a new investment into the
partnership out of savings from the conjugal partnership with Gliceria Dorado for the period
of 1947 until 1950 in the amount of P18,750.00 (Exhibit "1-A") thereby increasing his
investment to P33,750.00 (par. 7(c) of Amended Articles of Co-Partnership, Exhibit "1-A").
On January 22, 1952, another partnership called "The Lessee of the Quezon Central Rice
Mill" as formed by Lucio (Ambrocio) Adriano and four (4) partners and he invested the
amount of P25,000.00 (Exhibit "2") thereby making his total capital investment reach the
amount of P58,750.00.

On May 3, 1952, Lucio Adriano bought the share of Tan Kim Alias "Joaquin Tan", a partner
who withdrew from the partnership of the Quezon Central Rice Mill & Co. and who, in
consideration of the sum of P34,342.55 executed a Deed of Sale and Mortgage (Exhibit "3")
in favor of Lucio Adriano covering his proportional share in the properties of the partnership
consisting of two (2) rice mills, two (2) diesel engines and a camarin, which are situated at
Candelaria, Quezon. Lucio Adriano declared these properties in his name for taxation,
purposes under TCT Property Index No. 22-11-01-043-B (Exhibit "4") and Tax Declaration
No. 564 (Exhibit "5")

All in all, the withdrawals made out of the savings of the conjugal partnership of Lucio
Adriano and his wife, Gliceria Dorado, are the following:

1. Upon signing of the contract of sale and mortgage (Exhibit "3"), Lucio Adriano paid
the sum of P10,342.45 and the balance of P24,000.00, as reflected in the statement
 of account of Tan Kim as receivables from Lucio Adriano (Exhibit "6") were settled on
subsequent dates;

2. Original copy of a receipt dated May 3, 1953 (Exhibit "7") covering expenses of
registration of Exhibit "3" in the sum of P160.00;

3. Handwritten list of registration expenses (Exhibit "8"); and

4. Originals of receipts covering amounts paid by Lucio Adriano to Tan Kim on

various dates from June 3, 1953 (Exhibits "9" to "20", inclusive) in the aggregate sum
of P24,492.15.

It likewise appears from the evidence of the defendants that by the end of 1953, the total
capital investment of Lucio Adriano taken from his conjugal partnership with his first wife,
Gliceria Dorado, reached the amount of P94,744.88. In the late part of 1954, however, the
same partnership was dissolved by means of a verbal agreement reached by Lucio Adriano
and his partners and this resulted to an equal division of the partnership properties with the
left portion thereof going to Tan Kang and Tan Giam and the right portion, to Lucio Adriano
and Francisco Ramirez. Furthermore, by the end of 1955, Francisco Ramirez withdrew his
share totalling P16,250.00 in favor of Lucio Adriano, who acquired the same, and from that
time on, the latter became the sole owner of the rice mill which he latter registered as the
"Adriano Central Rice Mill". When the partnership was finally dissolved in 1955, the total
capital investment of Lucio Adriano therein was P110,994.88, consisting of the fruit or
income of his common fund with Gliceria Dorado, which was cumulatively used in the
acquisition of other properties listed in the inventory submitted to this Court by the
administratrix and defendant, Celestina Adriano de Arcilla on February 19, 1987. 8

The decretal portion of the Order dated May 8, 1991 issued by the RTC of Lucena City reads:

WHEREFORE, judgment is hereby rendered as follows:

1. In Civil Case No. 88-115, this Court finds and so holds that no cogent reasons or
grounds exist to affect adversely, if not nullify, the testamentary dispositions and
provisions contained in the Last Will and Testament of the late Lucio (Ambrocio)
Adriano. Accordingly, the complaint filed in this case is hereby ordered dismissed
with costs against plaintiffs.

In like manner, the counterclaim is hereby ordered dismissed.

2. In Spec. Proc. No. 4442, it is hereby ordered that the settlement, liquidation, and
partitioning of the estate of the late Lucio (Ambrocio) Adriano, more particularly the
delivery of the respective shares of his heirs, the plaintiffs and defendants, be
effected and implemented in accordance with the testamentary provisions set forth in
the Last Will and Testament of the testator, Lucio (Ambrocio) Adriano.

SO ORDERED. 9

The Court of Appeals dismissed petitioners' appeal for lack of merit, and affirmed in toto the Joint
Order of the RTC of Lucena City.
As elevated before us, the petition takes issue only in respect of the property covered by TCT No. T-
56553. Petitioners insist that it was erroneous of respondent court not to have upheld the co-
ownership of Vicenta to 1/2 of said property, and to have declared the entire property as belonging
to the conjugal partnership of Lucio and Gliceria. The petition essentially relies on the following
grounds: (1) TCT No. T-56553, issued to "Spouses, LUCIO ADRIANO and VICENTA VILLA" , 10

constitutes conclusive and indefeasible evidence of Vicenta's co-ownership in the property, and (2)
11

the Deed of Sale dated March 15, 1964, as annotated in OCT No. O-9198 , the mother title of TCT
12

No. T-56553, designates Vicenta Villa as a co-vendee. Petitioners maintain that the Deed of Sale,
being the "best evidence" of the contents thereof, proves Vicenta's co-ownership in the land.

We see no reason to reverse respondent court. Petitioners' insistence that a co-ownership of

properties existed between Lucio and Vicenta during their period of cohabitation before their
marriage in 1968 is without lawful basis considering that Lucio's marriage with Gliceria was then
subsisting. The co-ownership in Article 144 of the Civil Code requires that the man and woman
13

living together as husband and wife without the benefit of marriage must not in any way be
incapacitated to marry. Considering that the property was acquired in 1964, or while Lucio's
14

marriage with Gliceria subsisted, such property is presumed to be conjugal unless it be proved that it
pertains exclusively to the husband or to the wife. Thus, we ruled in Pisueñe vs. Heirs of Petra
15

Unating and Aquilino Villar that the prima facie presumption that properties acquired during the
16

marriage are conjugal cannot prevail over a court's specific finding reached in adversarial
proceedings to the contrary.

As found by both the trial court and respondent court in this case, not only did petitioners fail to
overcome the presumption of conjugality of the disputed property, private respondents have also
presented sufficient evidence to support their allegation that the property was in fact purchased by
Lucio with proceeds of the conjugal fund of his first marriage. This factual finding, which is clearly
borne out by the evidence on record, is binding and conclusive upon us and will not be disturbed.

Although in cases of common-law relations where an impediment to marry exists, equity would
dictate that property acquired by the man and woman through their joint endeavor should be
allocated to each of them in proportion to their respective efforts, petitioners in the instant case
17

have not submitted any evidence that Vicenta actually, contributed to the acquisition of the property
in question.

We cannot agree with petitioners' bare and expedient assertion that, because the title to the property
was registered in the name of both Lucio and Vicenta, she should thereby be deemed owner to half
of it. A certificate of title under the Torrens system is aimed to protect dominion, and should certainly
not be turned into an instrument for deprivation of ownership. Because a just and complete
18

resolution of this case could only be arrived at by determining the real ownership of the contested
property, evidence apart from or contrary to the certificate of title bears considerable importance. 19

This assumes peculiar force in the instant situation where the heirs of a lawful pre-existing marriage
stand to be deprived. Thus, in Belcodero vs. Court of Appeals, we held that property acquired by a
20

man while living with a common-law wife during the subsistence of his marriage is conjugal property,
even when the property was titled in the name of the common-law wife. In such cases, a
constructive trust is deemed to have been created by operation of Article 1456 of the Civil Code over
the property which lawfully pertains to the conjugal partnership of the subsisting marriage.

Art. 1456. If property is acquired through mistake or fraud, the person obtaining it is, by force
of law considered a trustee of an implied trust for the benefit of the person from whom the
property comes. 1âwphi1
In Vicenta's case, it is clear that her designation as a co-owner of the property in TCT No. T-56553 is
a mistake which needs to be rectified by the application of the foregoing provisions of Article 1456
and the ruling in Belcodero. The principle that a trustee who takes a Torrens title in his or her name
cannot repudiate the trust by relying on the registration, is a well-known exception to the principle of
conclusiveness of a certificate of title. 21

On petitioners' second ground, we note that the Deed of Sale dated March 15, 1964 which
purportedly designates Vicenta as a co-buyer of the property was not even presented in evidence.
The entry in OCT No. 0-9198 of the Deed of Sale bears no weight in proving Vicenta's supposed co-
ownership, applying petitioners' own argument that the document itself, the Deed of Sale in the
instant case, is the best evidence of its contents. The memorandum in the OCT is not admissible as
evidence of the contents of said Deed of Sale, but only of the fact of its execution, its presentation
for notation, and its actual notation for purposes of constructive notice to the public of the preferential
rights created and affecting that property. Besides, even if said Deed of Sale was submitted in
22

evidence, it still has no bearing because it could not be said to affect or bind third parties to the sale,
such as private respondents herein. 1âwphi1.nêt

WHEREFORE, the Decision in CA-G.R. CV No. 41509 is hereby AFFIRMED.

SO ORDERED.

G.R. No. L-51914 June 6, 1990

MARIA BICARME assisted by her husband JOSE BALUBAR, petitioner,

vs.
COURT OF APPEALS and CRISTINA BICARME, respondents.

Paterno Aquiao for petitioner.

Demetrio V. Pre for private respondent.

MEDIALDEA, J.:

This petition seeks to set aside the appealed decision of the lower court 1 as affirmed by the appellate court on August 28, 1979, directing the
amicable partition of two parcels of land between Cristina Bicarme (private respondent) and her aunt Maria Bicarme (petitioner), as well as
the Resolution, dated October 5, 1979, denying petitioner's motion for reconsideration.

The affirmed decision of the lower court, rendered on December 22, 1975, disposes as follows:

(a) That Maria Bicarme and Cristina Bicarme are the only surviving co-heirs and co-
owners and entitled in equal shares over the parcel of land in litigation and described
under paragraph 3 of the complaint;

(b) That the alleged deeds of Sale executed by Maria Bicarme covering and affecting
the two parcels of land in suit are declared null and void in so far (sic) as they affect
and/or cover the one-half undivided share and inheritance of plaintiff Cristina
Bicarme;

(c) Maria Bicarme is ordered to account and/or pay the value corresponding to the
one-half (½) undivided shares of Cristina Bicarme in the yearly fruits of the land and
 to commence from the filing of this complaint; that is seventy five bundles of palay
valued at P375.00 with legal interest fully paid;

(d) That the parties are hereby ordered within (15) days from receipt of this decision
to amicably agree upon a written partition and to submit the same for approval,
parties shall appoint a Commissioner to effect and carry out effectively the partition of
the 2 parcels of land in equal parts between the plaintiff and the defendant;

(e) Defendant and her hirelings and representatives are forever ordered to refrain
from molesting the Commissioner in the discharge of his duty to partition said two (2)
parcels of land in suit;

(f) And, Defendant to pay Attorney's fee and cost of this suit.

SO ORDERED. (pp. 40-41, Record on Appeal)

Petitioner-defendant Maria Bicarme appealed.

The Court of Appeals affirmed the decision; hence, this petition.

The main issue in this case dwells on ownership rights over the litigated parcels of land.

As established by the trial court, Sps. Juan Bicarme and Florencia Bidaya were the original co-
owners of two parcels of land described as follows:

1. Cornland in Palao, Bangued, Abra, bounded on the North-Hill, on the East-Brono

Barbers, on the South-Casimiro Palos, and on the West-Clemente Baldozan, of
about 8,721 sq. m., assessed at P400.00 under Tax Dee. No. 7764;

2. Riceland in Palao, Bangued, Abra, bounded on the North-Macario Bolos, East-

Roberto Bicarme, South-Juliana Baldozan, and West-Telesporo, about 1,539 sq. m.,
assessed at P 60.00, under Tax Dec. No. 7765;

.... (P. 10, Record on Appeal)

The spouses died intestate and were survived by three children-Victorina Bicarme, Sebastian
Bicarme and Maria Bicarme. Sebastian Bicarme died when he was a little boy and without any issue.
Later, Victorina Bicarme died intestate, survived by her only daughter, Cristina Bicarme.

Cristina claims that upon the death of her grandparents, Sps. Juan and Florencia, her mother
Victorina and her aunt, Maria, became co-owners or co-heirs of the litigated parcels of land. Upon
the death of her mother, Victorina, Cristina became co-heirs with Maria, having inherited the share
and interest of her mother corresponding to one-half of the two parcels of land.

Cristina instituted this action for partition, because her aunt, Maria, refused to share with her the
yearly fruits of the disputed parcels of land. Maria, however, maintains that "she acquired these two
parcels of land in 1925 (cornland) and 1926 (riceland) from the deceased spouses Placido Bidaya
and Margarita Bose and since then until the present, had been in open, public, peaceful, continuous,
adverse possession and enjoyment and in the concept of absolute owner thereof Maria further
claims that Cristina, her niece, never shared or contributed to the payment of taxes of said two
parcels of land; and, finally, that Cristina Bicarme was presumed already dead" (p. 35, Record on
Appeal).

In ruling Maria and Cristina to be co-heirs, the trial court relied on a provision separately stated in
three deeds of sale executed by Maria as follows:

That I am the sole and absolute owner over the above described cornland having
acquired the same by inheritance from my late father Juan Bicarme;" (See Exhibits
'4', '5', '6', and '7' or Exhibits 'A-1,' 'B-1,' 'C-1', and 'D-1'; (p. 37, Record on Appeal,
emphasis supplied)

The trial court stated that the provision was in the nature of a trust provision in favor of Cristina as a
co-owner/co-heir.

We agree. By admitting that the cornland is inherited property, Maria, in effect, recognized Cristina's
lights thereto as a co-heir/co-owner. As the trial court theorized:

xxx xxx xxx

(6) That Victorina Bicarme and Maria Bicarme never partitioned even orally the two
parcels of lands which were then owned in common by them;

(7) . That even after the death of Victorina Bicarme, the land in suit remained
undivided and were therefore in the possession of Maria Bicarme because her niece
Cristina Bicarme went to Manila and now married and presently residing at No. 22,
11th Avenue, Grace Park, Caloocan City.

(8) That without the knowledge and consent of Cristina Bicarme who was then of
legal age, her aunt Maria Bicarme executed on April 27, 1973 a Deed of absolute
Sale (Exhibit 'A') in favor of Marina Pizarro who acquired portion No. 3 of the
cornland; on the same date she also executed another Deed of Sale (Exhibit 'B') in
favor of Saturnino Pacopia, who acquired portion No. 2 of the cornland; and, in June
16, 1965 again Maria Bicarme executed a third Deed of Sale (Exhibit 'C') in favor of
Casimira Pacopia, who acquired portion No. 1 of the cornland;

(9) That these three (3) separated (sic) Deeds of Sale all executed by Maria Bicarme
over the cornland have a respective total area of 740 square meters, more or less,
for portion No. 3; 1,836 square meters, more or less for portion No. 2; and 1,265
square meters, more or less for portion No. 1, or a total area of 3,481 square meters
more or less;

(10) That in these three separate Deeds of Sale, Maria Bicarme expressly provided
the aforesaid trust provision. (pp. 36-37, Record on Appeal, emphasis ours)

Despite admission during the hearing on the Identity of the land in question (see p. 21, Record on
Appeal), Maria's counsel, on appeal, re-emphasized her original claim that the two parcels of land in
her possession were acquired from the Sps. Placido Biduya and Margarita Bose. However, the
private document relative to the purchase, was not produced at the trial, allegedly because "they
were placed in a trunk in their house which were burned during the Japanese Occupation." In 1945,
Maria sold the riceland. No written evidence was submitted. For all legal intents therefore, the
riceland remained inherited property. The Identity of the cornland as inherited property can no longer
be disputed, in view of Maria's admission in the deeds of sale she had executed, containing the trust
provisions.

Having established Cristina's co-ownership rights, Maria nonetheless insists that Cristina's rights are
barred by prescription under Secs. 40 and 41 of Act 190 (Code of Civil Procedure, Article 1116, Civil
Code) then the applicable law, where the longest period of both acquisitive and extinctive
prescription was only ten years (Diaz v. Garricho, 103 Phil. 261, 266). In the present case, Cristina, it
is alleged, asserted her claims 34 years after her right of action accrued, as follows:

... After Cristina left barrio Palao at the age of eleven (11), she never returned until
she was twenty two (22) years old and married (pp. 32-34, tsn., Nov. 4, 1974). Upon
her return her grandmother Florencia Bidaya was already dead (p. 33, Id). At that
time, Cristina claimed her hereditary share in the lands in question but her demands
were ignored and repudiated by her aunt Maria, Cristina admitted that ever since the
Japanese occupation when she was already of age, her aunt Maria refused to
recognize her rights to said lands (pp. 41-42, Id.). From that moment when Maria
ignored and repudiated Cristina's hereditary rights, Cristina's right of action already
accrued and the period of prescription began to run.

The instant action was filed only in 1974 (p. 1, Record on Appeal), or some 34 years
after it accrued. If she had any rights at all, Cristina slept on her rights. The present
action is unquestionably barred by prescription. (pp. 27-28, Appellants' Brief)

Against Maria's claims of acquisitive prescription, the lower court ruled that Maria was as trustee with
respect to Cristina's share. As such, prescription, as a mode of acquiring title, could not apply:

A co-owner is a trustee for the other co-owner. No one of the co-owners may acquire
exclusive ownership of the common property thru prescription for possession by one
trustee alone is not deemed adverse to the rest (Castrillo vs. Court of Appeals, 10
SCRA 549; Custodio vs. Casiano, 9 SCRA 841 and, Pascual vs. Meneses, 20 SCRA
219). (p. 6, Rollo)

While We agree with the trial court that Maria and Cristina are co-heirs, and that with respect to them
prescription, as a mode of acquisition, cannot apply, We hasten to elaborate on certain aspects,
which need clarification.

It is correct to say that possession by one co-owner (trustee) is not deemed adverse to the others. In
this sense, an action to compel partition will lie at any time and does not prescribe. It is, however, not
legally correct to say that by virtue of the imprescriptibility of an action for partition, prescription as a
mode of acquiring title, can never be invoked, or in the present case, that Maria, as a co-owner can
never acquire the property by prescription.

An action for partition implies that the thing is still owned in common. If a co-owner or co-heir holds
the property in exclusive adverse possession as owner, asserting sole and exclusive dominion for
the required period, he can acquire sole title to it as against the co-heirs or co-owners. The
imprescriptibility of an action for partition cannot thus be invoked when one of the co-owners has
possessed the property as exclusive owner, and for a period sufficient to acquire it by prescription.
From the moment one of the co-owners claims that he is the absolute and exclusive owner of the
properties and denies the others any share therein, the question involved is no longer one of
partition, but of ownership. (A. Tolentino, Civil Code of the Phil., Ann., Vol. II, pp. 192-193; Bargayo
v. Comumot, 40 Phil. 856, at p. 870). In this sense, the trial court erred in saying that there can be no
prescription (as a mode of acquiring title) in favor of a co-owner/trustee.
Having clarified this issue, the main question to be resolved is whether or not Maria has been in
possession of the lands in question under the conditions required by Section 41 of the Code of Civil
Procedure, as to uphold acquisitive prescription in her favor.

One of the conditions imposed by said section is that the possession must be adverse against the
whole world. In order that a possession may be deemed adverse to the cestui que trust, or the other
co-owner the following must concur:

... (1) that he has performed unequivocal acts of repudiation amounting to an ouster
of the cestui que trust or other co-owner, (2) that such positive acts of repudiation
have been made known to the cestui que trust or other co-owners, and (3) that the
evidence thereon must be clear and convincing. (A. Tolentino, Civil Code of the
Phils., Ann., Vol. 11, p. 193)

In the present case, Maria Bicarme disclaims the co-ownership by denying that subject properties
are the inherited properties. Other than the tax declarations in her name, there is no written evidence
that these were acquired/purchased from Sps. Placido Biduya and Margarita Bose. Payment of land
taxes does not constitute sufficient repudiation of the co-ownership, as it is not an act adverse to
Cristina's rights. Moreover, Cristina, being a minor, until she claimed her rights, was not even aware
thereof. Neither did Maria make known her repudiation to Cristina, because all along, Maria
presumed her to be dead. Her refusal to share with Cristina the yearly profits stemmed from
Cristina's failure to share in the yearly taxes. Acquisitive prescription cannot therefore apply in this
case:

Acts which are adverse to strangers may not be sufficiently adverse to the co-
owners. A mere silent possession by a co-owner, his receipt of rents, fruits or profits
from the property, the erection of buildings and fences and the planting of trees
thereon, and the payment of land taxes, cannot serve as proof of exclusive
ownership, if it is not borne out by clear, complete and conclusive evidence that he
exercised acts of possession which unequivocally constituted an ouster or
deprivation of the rights of the other co-owners. (Mangyan v. Ilan, 28 O.G. 62;
Laguna v. Levantino, 40 O.G. (14th Suppl.) 136, cited in A. Tolentino, Civil Code of
the Philippines, Ann., Vol. II, pp. 193- 194)

Additionally, it follows that neither can the doctrine on laches apply, for absent acquisitive
prescription, (i.e., where it has not been shown that the possession of the claimant has been
adverse and exclusive and opposed to the right of the others) the case is not one of ownership, in
which case, the doctrine on imprescriptibility of an action for partition will apply. Cristina's right to
partition wig therefore prosper.

Finally, We eliminate the award on attorney's fees in the absence of any specific allegation thereon
in her complaint, or that the same is covered by any of the eleven (11) exceptions enumerated in Art.
2208 of the New Civil Code. Even if We were to concede exercise of judicial discretion in the award
of attorney's fees under Art. 2208, par. 11, this provision "demands a factual, legal or equitable
justification. Without such justification, the award is a conclusion without a premise, its basis being
improperly left to speculation and conjecture." (Mirasol v. De la Cruz, G.R. L-32552, July 31, 1978;
84 SCRA 337.) Likewise, "the matter of attorney's fees cannot be touched once and only in the
dispositive portion of the decision. The text itself must expressly state the reason why attorney's fees
are being awarded" (ibid). In the present case, the matter of such fees was touched but once and
appears only in the dispositive portion of the decision.
ACCORDINGLY, the petition for review is DENIED and the appealed decision as affirmed by the
Court of Appeals is hereby AFFIRMED with the modification that the award on attorney's fees is
eliminated. Costs against petitioner. This decision is immediately executory.

SO ORDERED.

SECOND DIVISION

[G.R. NO. 141501 : July 21, 2006]

ELINO RIVERA, DOMINADOR CLAUREN, SOLEDAD CLAUREN DE

RIVERA, TEOFILA RIVERA and CECILIA RIVERA, Petitioners, v. HEIRS
OF ROMUALDO VILLANUEVA* represented by MELCHOR VILLANUEVA,
ANGELINA VILLANUEVA, VICTORIANO DE LUNA, CABANATUAN CITY
RURAL BANK, INC. and REGISTER OF DEEDS OF NUEVA ECIJA,
Respondents.

DECISION

CORONA, J.:

This Petition for Review on Certiorari 1 from a decision2 and a resolution3 of

the Court of Appeals (CA) in CA-G.R. CV No. 51449 touches upon questions
of filiation, presumptions of co-equal acquisition and res judicata.

Petitioners are allegedly the half-brothers (Elino and Dominador), the half-
sister-in-law (Soledad), and the children of a half-brother (Teofila and
Cecilia) of the deceased Pacita Gonzales (hereinafter Gonzales).
Respondents Catalino, Lucia, Purificacion and Melchor, all surnamed
Villanueva, and Arnaldo V. Avendano are allegedly the siblings, full and half-
blood of Romualdo Villanueva (hereinafter Villanueva). 4 They are
denominated as the heirs of Villanueva and are represented by Melchor.
They were allowed to substitute for Villanueva upon his death. 5 The
remaining respondents, Angelina Villanueva (hereinafter respondent
Angelina) and husband Victoriano de Luna, are allegedly the daughter and
the son-in-law, respectively, of the late Villanueva.

From 1927 until her death in 1980, Gonzales cohabited with Villanueva
without the benefit of marriage because the latter was married to one
Amanda Musngi who died on April 20, 1963. 6 In the course of their
cohabitation, they acquired several properties including the properties
contested in this case. The disputed properties are:

(a) Lot No. 266-B-1, with an area of 1,787 square meters, more or less, and
covered by Transfer Certificate of Title No. NT-21446 [in the names of
Villanueva and Gonzales], together with the residential house erected
thereon and other improvements;

(b) Lot No. 266-B-3 [included in the coverage of transfer Certificate of Title
No. NT-21446], with an area of 5,353 square meters, more or less, situated
at Poblacion, Talavera, Nueva Ecija;

(c) [Lot 801-A covered by] Transfer Certificate of Title No. NT-12201 [in the
names of Villanueva and Gonzales], with [an] area of 15.400 hectares, more
or less, situated at Llanera, Nueva Ecija;

(d) [Lot 3-A covered by] Transfer Certificate of Title No. NT-51899 [in the
names of Villanueva and Gonzales], with an area of 4.0019 hectares, more
or less, situated at Calipahan, Talavera, Nueva Ecija;

(e) [Lot No. 838 covered by] Transfer Certificate of Title No. NT-17193 [in
the names of Villanueva, Gonzales and one Soledad Alarcon vda. de Rivera],
with an area of 3.8718 hectares, more or less, situated at Talavera, Nueva
Ecija;

(f) [Lot 884-B covered by] Transfer Certificate of Title No. NT-26670 [in the
name of Gonzales], with an area of 3.5972 hectares, more or less, situated
at Talavera, Nueva Ecija;

(g) Subdivision lots situated at Talavera, Nueva Ecija, covered by Transfer

Certificates of Title Nos. 106813 to 106931, inclusive, although the land
covered by TCT No. NT-106827 - was already sold to one Pastor Barlaan;

(h) Shares of stocks, tractor, jewelries and other chattels, with an

approximate value of at least P100,000; and cralawlibrary

(i) Savings deposit with the [Philippine] National Bank, in the amount of
P118,722.61.7

Gonzales died on July 3, 1980 without leaving a will.

On August 8, 1980, Villanueva and respondent Angelina executed a deed of

extrajudicial partition with sale,8 that is, an extrajudicial settlement of
Gonzales' estate comprising a number of the aforementioned properties. In
this document, Villanueva, for the amount of P30,000, conveyed his
interests in the estate to Angelina.

Petitioners (Gonzales' half-brothers, etc.) filed a case for partition of

Gonzales' estate and annulment of titles and damages, with the Regional
Trial Court (RTC) of Santo Domingo, Nueva Ecija, Branch 37. It was
docketed as Civil Case No. SD-857 (SD-857). In dismissing the complaint,
the RTC made two findings: (1) Gonzales was never married to Villanueva
and (2) respondent Angelina was her illegitimate child by Villanueva and
therefore her sole heir, to the exclusion of petitioners. 9

Not satisfied with the trial court's decision, petitioners appealed to the CA
which affirmed it. Hence, this petition.

Petitioners contend that the RTC and CA erred in finding that respondent
Angelina was Gonzales' illegitimate daughter despite the RTC's ruling in
another case, Special Proceedings No. SD-144 (SD-144), entitled In the
Matter of the Intestate Estate of the late Pacita C. Gonzales, Epifanio C.
Rivera, petitioner, v. Romualdo Villanueva, oppositor, in which the trial court
appointed Epifanio Rivera as administrator of Gonzales' estate. 10

They argue that the trial court's decision in SD-144, to the effect that
respondent Angelina was neither the adopted nor the illegitimate daughter of
Gonzales, should have operated as res judicata on the matter of respondent
Angelina's status.

The first issue here is whether or not the findings regarding respondent
Angelina's filiation in SD-144 are conclusive on SD-857 and therefore res
judicata. The second is the determination of her real status in relation to
Gonzales. Finally, there is the question of whether or not the real properties
acquired by Villanueva and Gonzales were equally owned by them.

We resolve the first issue in the negative. Res judicata literally means "a
matter adjudged; a thing judicially acted upon or decided; a thing or matter
settled by judgment." It sets forth the rule that an existing final judgment or
decree rendered on the merits and without fraud or collusion by a court of
competent jurisdiction, upon any matter within its jurisdiction, is conclusive
of the rights of the parties or their privies, in all other actions or suits in the
same or any other judicial tribunal of concurrent jurisdiction on the points
and matters in issue in the first suit.11

For res judicata to apply, the following elements must be present:

(1) the judgment sought to bar the new action must be final;

(2) the decision must have been rendered by a court having jurisdiction over
the subject matter and the parties;

(3) the disposition of the case must be a judgment on the merits and
(4) there, must be as between the first and second action, identity of
parties, subject matter and causes of action.12

A number of factors militate against the existence of res judicata. First, the
parties in the two cases are different. Epifanio C. Rivera, who incidentally is
not a party in this petition, filed SD-144 seeking letters of administration
over his dead sister's estate. Villanueva was his lone opponent. On the other
hand, although both Villanueva and respondent Angelina were parties in SD-
857, Epifanio Rivera was not. Petitioners never alleged that Epifanio
represented their interests, and vice versa.

Furthermore, in SD-144, the trial court never actually acquired jurisdiction

over respondent Angelina's person. She was not even a party there, given
that Villanueva did not represent her interest when he opposed Epifanio
Rivera's petition.

Finally and most significantly, there was no identity of cause of action

between the two suits. By their very nature, they were entirely distinct from
each other. SD-144 was a special proceeding while SD-857 was an ordinary
civil case. The former was concerned with the issuance of letters of
administration in favor of Epifanio Rivera while the latter was for partition
and annulment of titles, and damages.

Clearly, then, there was no res judicata. Nevertheless, this still begged the
question of whether or not it was proven, as the CA held, that respondent
Angelina was the illegitimate daughter of the decedent Gonzales. On this
issue, we find merit in the petition.

Both the trial court and the CA ruled that respondent Angelina was the
illegitimate daughter of the decedent, based solely on her birth certificate.
According to the assailed decision, "the birth certificate clearly discloses that
Pacita Gonzales was the mother of Angelina Villanueva while municipal
treasurer Romualdo Villanueva was denominated therein as her father." 13
The CA found this to be adequate proof that respondent Angelina was
Gonzales' illegitimate child.

However, a closer examination of the birth certificate 14 reveals that

respondent Angelina was listed as "adopted" by both Villanueva and
Gonzales.

As a general rule, the Supreme Court is not a trier of facts. 15 However, one
of the exceptions to this rule is when the judgment of the CA is based on a
misapprehension of facts.16 We believe this to be just such an instance.
In Benitez-Badua v. Court of Appeals,17 Marissa Benitez-Badua, in
attempting to prove that she was the sole heir of the late Vicente Benitez,
submitted a certificate of live birth, a baptismal certificate, income tax
returns and an information sheet for membership in the Government Service
Insurance System of the decedent naming her as his daughter, and her
school records. She also testified that she had been reared and continuously
treated as Vicente's daughter.

By testimonial evidence alone, to the effect that Benitez-Badua's alleged

parents had been unable to beget children, the siblings of Benitez-Badua's
supposed father were able to rebut all of the documentary evidence
indicating her filiation. One fact that was counted against Benitez-Badua was
that her supposed mother Isabel Chipongian, unable to bear any children
even after ten years of marriage, all of a sudden conceived and gave birth to
her at the age of 36.

Of great significance to this controversy was the following pronouncement:

But definitely, the mere registration of a child in his or her birth

certificate as the child of the supposed parents is not a valid
adoption, does not confer upon the child the status of an adopted
child and the legal rights of such child, and even amounts to simulation
of the child's birth or falsification of his or her birth certificate, which is a
public document. (emphasis ours)18

Furthermore, it is well-settled that a record of birth is merely a prima

facieevidence of the facts contained therein. 19 It is not conclusive evidence of
the truthfulness of the statements made there by the interested parties. 20
Following the logic of Benitez, respondent Angelina and her co-defendants in
SD-857 should have adduced evidence of her adoption, in view of the
contents of her birth certificate. The records, however, are bereft of any
such evidence.

There are several parallels between this case and Benitez-Badua that are
simply too compelling to ignore. First, both Benitez-Badua and respondent
Angelina submitted birth certificates as evidence of filiation. Second, both
claimed to be children of parents relatively advanced in age. Third, both
claimed to have been born after their alleged parents had lived together
childless for several years.

There are, however, also crucial differences between Benitez-Badua and this
case which ineluctably support the conclusion that respondent Angelina was
not Gonzales' daughter, whether illegitimate or adopted. Gonzales, unlike
Benitez-Badua's alleged mother Chipongian, was not only 36 years old but
44 years old, and on the verge of menopause 21 at the time of the alleged
birth. Unlike Chipongian who had been married to Vicente Benitez for only
10 years, Gonzales had been living childless with Villanueva for 20 years.
Under the circumstances, we hold that it was not sufficiently established that
respondent Angelina was Gonzales' biological daughter, nor even her
adopted daughter. Thus, she cannot inherit from Gonzales. Since she could
not have validly participated in Gonzales' estate, the extrajudicial partition
which she executed with Villanueva on August 8, 1980 was invalid.

Finally, we come to the question of whether or not the properties acquired

by Gonzales and Villanueva during their cohabitation were equally owned by
them. According to the trial court in SD-857, 22 Gonzales and Villanueva lived
together without the benefit of marriage and therefore their property
relations were governed by Article 144 of the Civil Code:

Art. 144. When a man and a woman live together as husband and wife, but
they are not married, or their marriage is void from the beginning, the
property acquired by either or both of them through their work or industry
or their wages and salaries shall be governed by the rules on co-ownership.

However, the contending parties agreed that the relationship of Villanueva

and Gonzales was adulterous, at least until the death of Amanda Musngi,
Villanueva's legal wife, on April 20, 1963. In their appeal brief, petitioners
made the following admission:

From 1927 until her death, Pacita [Gonzales] lived together with defendant
Romualdo Villanueva ("Romualdo") as husband and wife without the benefit
of marriage. Earlier, or sometime in 1913 or 1914, Romualdo was
married to Amanda Musngi (or "Amanda"). Amanda died on April 20,
1963.23 (emphasis supplied)

Respondent Angelina, in her memorandum in SD-857, actually agreed with

petitioners on the nature of Villanueva's relationship with Gonzales: 24

While Romualdo Villanueva claimed that he and Pacita C. Gonzales lived as

husband and wife and that they were married, it turned out that he was not
legally married to the latter, for then, his marriage in the year 1927,
was still subsisting with one Amanda Musngi. (emphasis supplied)

Because the cohabitation of Villanueva and Gonzales from 1927 to 1963 was
adulterous, their property relations during those 36 years were not governed
by Article 144 of the Civil Code which applies only if the couple living
together is not in any way incapacitated from getting married. 25 According to
the doctrine laid down by Juaniza v. Jose,26 no co-ownership exists between
parties to an adulterous relationship. In Agapay v. Palang,27 we expounded
on this doctrine by declaring that in such a relationship, it is necessary for
each of the partners to prove his or her actual contribution to the acquisition
of property in order to be able to lay claim to any portion of it. Presumptions
of co-ownership and equal contribution do not apply.

In Agapay, Miguel Palang and his paramour Erlinda Agapay bought a parcel
of riceland in Pangasinan which they registered in their names. However,
because Agapay failed to prove that she contributed money to the purchase
price of the riceland, she could not rightfully claim co-ownership over the
same.

Here, the records show only four properties acquired by Villanueva and
Gonzales between 1927 and 1963 which they registered in both their
names.28 Following Agapay, these can only be apportioned according to the
actual contributions of each. Unfortunately, the records are devoid of any
evidence that Gonzales contributed anything to the acquisition of these
properties. Petitioners merely asserted that she acquired these properties
through her own industry29 without a shred of evidence to support the
allegation. On the other hand, it was clearly demonstrated that Villanueva
was the municipal treasurer of Talavera for many years and therefore the
lone breadwinner. In accordance with Agapay, none of these four parcels of
land should accrue to petitioners.

There is only one parcel of land, covered by Transfer Certificate of Title

(TCT) No. NT-26670,30 registered solely in Gonzales' name, which was
acquired between 1927 and 1963. 31 This fact of registration created a
conclusiveness of title in favor of the person in whose name it was
registered.32 In SD-857, although Villanueva sought to prove that he alone
had purchased the properties and that only he could have done so during
the period of cohabitation (since he was the sole breadwinner), he never
actually challenged the validity of the registration in her name. Thus the
efficacy of the title in Gonzales' name remained unrebutted. As Gonzales'
sole property, this should accrue entirely to her heirs.

The only property acquired after Musngi's death in 1963 and registered in
the names of both Villanueva and Gonzales was Lot 3-A covered by TCT No.
NT-51899.33 This was governed by the rules on co-ownership pursuant to
Article 144 of the Civil Code. Half of it should pertain to Gonzales' heirs and
the other half, to Villanueva.

The rest of the properties registered solely in Gonzales' name were also
acquired after the death of Amanda Musngi in 1963. The records show that
the subdivision lots situated in Talavera, Nueva Ecija covered by TCTs Nos.
106813 to 106931 were acquired in 1971. 34 These properties were governed
by co-ownership under Article 144 of the Civil Code. Again, half should
accrue to Gonzales' heirs and the other half, to Villanueva.

Significantly, the trial court in SD-857 did not establish the exact
relationship between petitioners and Gonzales, a relationship defendants
therein (now respondents) vigorously denied. In view of this, there is a need
to remand the case to the court of origin for the proper determination and
identification of Gonzales' heirs.

WHEREFORE, the petition is hereby GRANTED. The decision and resolution

of the Court of Appeals in CA-G.R. CV No. 51449 are reversed and set aside,
and a new one entered ANNULLING the deed of extrajudicial partition with
sale and REMANDING the case to the court of origin for the determination
and identification of Pacita Gonzales' heirs and the corresponding partition of
her estate.

SO ORDERED.

RIGHTS OF CO-OWNERS

G.R. No. L-4656            November 18, 1912

RICARDO PARDELL Y CRUZ and

VICENTA ORTIZ Y FELIN DE PARDELL, plaintiffs-appellees,
vs.
GASPAR DE BARTOLOME Y ESCRIBANO and
MATILDE ORTIZ Y FELIN DE BARTOLOME, defendants-appellants.

Gaspar de Bartolome, in his own behalf.

B. Gimenez Zoboli, for appellees.

TORRES, J.:

This is an appeal by bill of exceptions, from the judgment of October 5, 1907, whereby the
Honorable Dionisio Chanco, judge, absolved the defendants from the complaint, and the plaintiff
from a counterclaim, without special finding as to costs.

Counsel for the spouses Ricardo y Cruz and Vicente Ortiz y Felin de Pardell, the first of whom,
absent in Spain by reason of his employment, conferred upon the second sufficient and ample
powers to appear before the courts of justice, on June 8, 1905, in his written complaint, alleged that
the plaintiff, Vicente Ortiz, and the defendant, Matilde Ortiz, are the duly recognized natural
daughters of the spouses Miguel Ortiz and Calixta Felin y Paula who died in Vigan, Ilocos Sur, in
1875 and 1882, respectively; that Calixta Felin, prior to her death, executed on August 17, 1876, a
nuncupative will in Vigan whereby she made her four children, named Manuel, Francisca, Vicenta,
and Matilde, surnamed Ortiz y Felin, her sole and universal heirs of all her property; that, of the
persons enumerated, Manuel died before his mother and Francisca a few years after her death,
leaving no heirs by force of law, and therefore the only existing heirs of the said testatrix are the
plaintiff Vicenta Ortiz and the defendant Matilde Ortiz; that, aside from some personal property and
jewelry already divided among the heirs, the testatrix possessed, at the time of the execution of her
will, and left at her death the real properties which, with their respective cash values, are as follows:

1. A house of strong material, with the lot on which it is built, situated on

P6,000.00
Escolta Street, Vigan, and valued at
2. A house of mixed material, with the lot on which it stands, at No. 88
1,500.00
Washington Street, Vigan; valued at
3. A lot on Magallanes Street, Vigan; valued at 100.00
4. A parcel of rice land, situated in the barrio of San Julian, Vigan; valued at 60.00
5. A parcel of rice land in the pueblo of Santa Lucia; valued at 86.00
6. Three parcels of land in the pueblo of Candon; valued at 150.00
Total 7,896.00

That, on or about the first months of the year 1888, the defendants, without judicial authorization, nor
friendly or extrajudicial agreement, took upon themselves the administration and enjoyment of the
said properties and collected the rents, fruits, and products thereof, to the serious detriment of the
plaintiffs' interest; that, notwithstanding the different and repeated demands extrajudicially made
upon Matilde Ortiz to divide the aforementioned properties with the plaintiff Vicente and to deliver to
the latter the one-half thereof, together with one-half of the fruits and rents collected therefrom, the
said defendant and her husband, the self-styled administrator of the properties mentioned, had been
delaying the partition and delivery of the said properties by means of unkept promises and other
excuses; and that the plaintiffs, on account of the extraordinary delay in the delivery of one-half of
said properties, or their value in cash, as the case might be, had suffered losses and damages in the
sum of P8,000. Said counsel for the plaintiffs therefore asked that judgment be rendered by
sentencing the defendants, Gaspar de Bartolome, and Matilde Ortiz Felin de Bartolome, to restore
and deliver to the plaintiffs one-half of the total value in cash, according to appraisal, of the undivided
property specified, which one-half amounted approximately to P3,948, or if deemed proper, to
recognize the plaintiff Vicenta Ortiz to be vested with the full and absolute right of ownership to the
said undivided one-half of the properties in question, as universal testamentary heir thereof together
with the defendant Matilde Ortiz, to indemnify the plaintiffs in the sum of P8,000, for losses and
damages, and to pay the costs.

Counsel for the defendants, in his answer denied the facts alleged in paragraphs 1, 4, 6, 7, and 8
thereof, inasmuch as, upon the death of the litigating sister's brother Manuel, their mother, who was
still living, was his heir by force of law, and the defendants had never refused to give to the plaintiff
Vicente Ortiz her share of the said properties; and stated that he admitted the facts alleged in
paragraph 2, provided it be understood, however, that the surname of the defendant's mother was
Felin, and not Feliu, and that Miguel Ortiz died in Spain, and not in Vigan; that he also admitted
paragraph 3 of the complaint, with the difference that the said surname should be Felin, and likewise
paragraph 5, except the part thereof relating to the personal property and the jewelry, since the latter
had not yet been divided; that the said jewelry was in the possession of the plaintiffs and consisted
of: one Lozada gold chronometer watch with a chain in the form of a bridle curb and a watch charm
consisting of the engraving of a postage stamp on a stone mounted in gold and bearing the initials
M. O., a pair of cuff buttons made of gold coins, four small gold buttons, two finger rings, another
with the initials M. O., and a gold bracelet; and that the defendants were willing to deliver to the
plaintiffs, in conformity with their petitions, one-half of the total value in cash, according to
appraisement, of the undivided real properties specified in paragraph 5, which half amounted to
P3,948.

In a special defense said counsel alleged that the defendants had never refused to divide the said
property and had in fact several years before solicited the partition of the same; that, from 1886 to
1901, inclusive, there was collected from the property on Calle Escolta the sum of 288 pesos,
besides a few other small amounts derived from other sources, which were delivered to the plaintiffs
with other larger amounts, in 1891, and from the property on Calle Washington, called La Quinta,
990.95 pesos, which proceeds, added together, made a total of 1,278.95 pesos, saving error or
omission; that, between the years abovementioned, Escolta, and that on Calle Washington, La
Quinta, 376.33, which made a total of 1,141.71, saving error or omission; that, in 1897, the work of
reconstruction was begun of the house on Calle Escolta, which been destroyed by an earthquake,
which work was not finished until 1903 and required an expenditure on the part of the defendant
Matilde Ortiz, of 5,091.52 pesos; that all the collections made up to August 1, 1905, including the
rent from the stores, amounted to only P3,654.15, and the expenses, to P6,252.32, there being,
consequently, a balance of P2,598.17, which divided between the sisters, the plaintiff and the
defendant, would make the latter's share P1,299.08; that, as shown by the papers kept by the
plaintiffs, in the year 1891 the defendant Bartolome presented to the plaintiffs a statement in
settlements of accounts, and delivered to the person duly authorized by the latter for the purpose,
the sum of P2,606.29, which the said settlement showed was owing his principals, from various
sources; that, the defendant Bartolome having been the administrator of the undivided property
claimed by the plaintiffs, the latter were owing the former legal remuneration of the percentage
allowed by law for administration; and that the defendants were willing to pay the sum of P3,948,
one-half of the total value of the said properties, deducting therefrom the amount found to be owing
them by the plaintiffs, and asked that judgment be rendered in their favor to enable them to recover
from the latter that amount, together with the costs and expenses of the suit.

The defendants, in their counter claim, repeated each and all of the allegations contained in each of
the paragraphs of section 10 of their answer; that the plaintiffs were obliged to pay to the
administrator of the said property the remuneration allowed him by law; that, as the revenues
collected by the defendants amounted to no more than P3,654.15 and the expenditures incurred by
them, to P6,252.32, it followed that the plaintiffs owed the defendants P1,299.08, that is one-half of
the difference between the amount collected from and that extended on the properties, and asked
that judgment be therefore rendered in their behalf to enable them to collect this sum from the
plaintiffs, Ricardo Pardell and Vicenta Ortiz, with legal interest thereon from December 7, 1904, the
date when the accounts were rendered, together with the sums to which the defendant Bartolome
was entitled for the administration of the undivided properties in question.

By a written motion of August 21, 1905, counsel for the plaintiffs requested permission to amend the
complaint by inserting immediately after the words "or respective appraisal," fifth line of paragraph 5,
the phrase "in cash in accordance with the assessed value," and likewise further to amend the
same, in paragraph 6 thereof, by substituting the following word in lieu of the petition for the remedy
sought: "By reason of all the foregoing, I beg the court to be pleased to render the judgment by
sentencing the defendants, Gaspar de Bartolome and Matilde Ortiz Felin de Bartolome, to restore
and deliver to the plaintiffs an exact one-half of the total vale of the undivided properties described in
the complaint, such value to be ascertained by the expert appraisal of two competent persons, one
of whom shall be appointed by the plaintiffs and the other by the defendants, and, in case of
disagreement between these two appointees such value shall be determined by a third expert
appraiser appointed by the court, or, in a proper case, by the price offered at public auction; or, in
lieu thereof, it is requested that the court recognize the plaintiff, Vicenta Ortiz, to be vested with a full
and absolute right to an undivided one-half of the said properties; furthermore, it is prayed that the
plaintiffs be awarded an indemnity of P8,000 for losses and damages, and the costs."
Notwithstanding the opposition of the defendants, the said amendment was admitted by the court
and counsel for the defendants were allowed to a period of three days within which to present a new
answer. An exception was taken to this ruling.

The proper proceedings were had with reference to the valuation of the properties concerned in the
division sought and incidental issues were raised relative to the partition of some of them and their
award to one or the other of the parties. Due consideration was taken of the averments and
statements of both parties who agreed between themselves, before the court, that any of them might
at any time acquire, at the valuation fixed by the expert judicial appraiser, any of the properties in
question, there being none in existence excluded by the litigants. The court, therefore, by order of
December 28, 1905, ruled that the plaintiffs were entitled to acquire, at the valuation determined by
the said expert appraiser, the building known as La Quinta, the lot on which it stands and the
warehouses and other improvements comprised within the inclosed land, and the seeds lands
situated in the pueblos of Vigan and Santa Lucia; and that the defendants were likewise entitled to
acquire the house on Calle Escolta, the lot on Calle Magallanes, and the three parcels of land
situated in the pueblo of Candon.

After this partition had been made counsel for the defendants, by a writing of March 8, 1906, set
forth: That, having petitioned for the appraisement of the properties in question for the purpose of
their partition, it was not to be understood that he desired from the exception duly entered to the
ruling made in the matter of the amendment to the complaint; that the properties retained by the
defendants were valued at P9,310, and those retained by the plaintiffs, at P2,885, one-half of which
amounts each party had to deliver to the other, as they were pro indiviso properties; that, therefore,
the defendants had to pay the plaintiffs the sum of P3,212.50, after deducting the amount which the
plaintiffs were obliged to deliver to the defendants, as one-half of the price of the properties retained
by the former; that, notwithstanding that the amount of the counterclaim for the expenses incurred in
the reconstruction of the pro indiviso property should be deducted from the sum which the
defendants had to pay the plaintiffs, the former, for the purpose of bringing the matter of the partition
to a close, would deliver to the latter, immediately upon the signing of the instrument of purchase
and sale, the sum of P3,212.50, which was one-half of the value of the properties alloted to the
defendants; such delivery, however, was not to be understood as a renouncement of the said
counterclaim, but only as a means for the final termination of the pro indiviso status of the property.

The case having been heard, the court on October 5, 1907, rendered judgment holding that the
revenues and the expenses were compensated by the residence enjoyed by the defendant party,
that no losses or damages were either caused or suffered, nor likewise any other expense besides
those aforementioned, and absolved the defendants from the complaint and the plaintiffs from the
counterclaim, with no special finding as to costs. An exception was taken to this judgment by
counsel for the defendants who moved for a new trial on the grounds that the evidence presented
did not warrant the judgment rendered and that the latter was contrary to law. This motion was
denied, exception whereto was taken by said counsel, who filed the proper bill of exceptions, and the
same was approved and forwarded to the clerk of this court, with a transcript of the evidence.

Both of the litigating sisters assented to a partition by halves of the property left in her will by their
mother at her death; in fact, during the course of this suit, proceedings were had, in accordance with
the agreement made, for the division between them of the said hereditary property of common
ownership, which division was recognized and approved in the findings of the trial court, as shown
by the judgment appealed from.

The issues raised by the parties, aside from said division made during the trial, and which have been
submitted to this court for decision, concern: (1) The indemnity claimed for losses and damages,
which the plaintiffs allege amount to P8,000, in addition to the rents which should have been derived
from the house on Calle Escolta, Vigan; (2) the payment by the plaintiffs to the defendants of the
sum of P1,299.08, demanded by way of counterclaim, together with legal interest thereon from
December 7, 1904; (3) the payment to the husband of the defendant Matilde Ortiz, of a percentage
claimed to be due him as the administrator of the property of common ownership; (4) the division of
certain jewelry in the possession of the plaintiff Vicenta Ortiz; and (5) the petition that the
amendment be held to have been improperly admitted, which was made by the plaintiffs in their
written motion of August 21, 1905, against the opposition of the defendants, through which
admission the latter were obliged to pay the former P910.50. lawphil.net

Before entering upon an explanation of the propriety or impropriety of the claims made by both
parties, it is indispensable to state that the trial judge, in absolving the defendants from the
complaint, held that they had not caused losses and damages to the plaintiffs, and that the revenues
and the expenses were compensated, in view of the fact that the defendants had been living for
several years in the Calle Escolta house, which was pro indiviso property of joint ownership.

By this finding absolving the defendants from the complaint, and which was acquiesced in by the
plaintiffs who made no appeal therefrom, the first issue has been decided which was raised by the
plaintiffs, concerning the indemnity for losses and damages, wherein are comprised the rents which
should have been obtained from the upper story of the said house during the time it was occupied by
the defendants, Matilde Ortiz and her husband, Gaspar de Bartolome.

Notwithstanding the acquiescence on the part of the plaintiffs, assenting to the said finding whereby
the defendants were absolved from the complaint, yet, as such absolution is based on the
compensation established in the judgment of the trial court, between the amounts which each party
is entitled to claim from the other, it is imperative to determine whether the defendant Matilde Ortiz,
as coowner of the house on Calle Escolta, was entitled, with her husband, to reside therein, without
paying to her coowner, Vicenta Ortiz, who, during the greater part of the time, lived with her husband
abroad, one-half of the rents which the upper story would have produced, had it been rented to a
stranger.

Article 394 of the Civil Code prescribes:

Each coowner may use the things owned in common, provided he uses them in accordance
with their object and in such manner as not to injure the interests of the community nor
prevent the coowners from utilizing them according to their rights.

Matilde Ortiz and her husband occupied the upper story, designed for use as a dwelling, in the
house of joint ownership; but the record shows no proof that, by so doing, the said Matilde
occasioned any detriment to the interest of the community property, nor that she prevented her sister
Vicenta from utilizing the said upper story according to her rights. It is to be noted that the stores of
the lower floor were rented and accounting of the rents was duly made to the plaintiffs.

Each coowner of realty held pro indiviso exercises his rights over the whole property and may use
and enjoy the same with no other limitation than that he shall not injure the interests of his coowners,
for the reason that, until a division be made, the respective part of each holder can not be
determined and every one of the coowners exercises, together with his other coparticipants, joint
ownership over the pro indiviso property, in addition to his use and enjoyment of the same.

As the hereditary properties of the joint ownership of the two sisters, Vicenta Ortiz, plaintiff, and
Matilde Ortiz, defendant, were situated in the Province of Ilocos Sur, and were in the care of the last
named, assisted by her husband, while the plaintiff Vicenta with her husband was residing outside of
the said province the greater part of the time between 1885 and 1905, when she left these Islands
for Spain, it is not at all strange that delays and difficulties should have attended the efforts made to
collect the rents and proceeds from the property held in common and to obtain a partition of the
latter, especially during several years when, owing to the insurrection, the country was in a turmoil;
and for this reason, aside from that founded on the right of coownership of the defendants, who took
upon themselves the administration and care of the properties of joint tenancy for purposes of their
preservation and improvement, these latter are not obliged to pay to the plaintiff Vicenta one-half of
the rents which might have been derived from the upper of the story of the said house on Calle
Escolta, and, much less, because one of the living rooms and the storeroom thereof were used for
the storage of some belongings and effects of common ownership between the litigants. The
defendant Matilde, therefore, in occupying with her husband the upper floor of the said house, did
not injure the interests of her coowner, her sister Vicenta, nor did she prevent the latter from living
therein, but merely exercised a legitimate right pertaining to her as coowner of the property.

Notwithstanding the above statements relative to the joint-ownership rights which entitled the
defendants to live in the upper story of the said house, yet in view of the fact that the record shows it
to have been proved that the defendant Matilde's husband, Gaspar de Bartolome, occupied for four
years a room or a part of the lower floor of the same house on Calle Escolta, using it as an office for
the justice of the peace, a position which he held in the capital of that province, strict justice, requires
that he pay his sister-in-law, the plaintiff, one half of the monthly rent which the said quarters could
have produced, had they been leased to another person. The amount of such monthly rental is fixed
at P16 in accordance with the evidence shown in the record. This conclusion as to Bartolome's
liability results from the fact that, even as the husband of the defendant coowner of the property, he
had no right to occupy and use gratuitously the said part of the lower floor of the house in question,
where he lived with his wife, to the detriment of the plaintiff Vicenta who did not receive one-half of
the rent which those quarters could and should have produced, had they been occupied by a
stranger, in the same manner that rent was obtained from the rooms on the lower floor that were
used as stores. Therefore, the defendant Bartolome must pay to the plaintiff Vicenta P384, that is,
one-half of P768, the total amount of the rents which should have been obtained during four years
from the quarters occupied as an office by the justice of the peace of Vigan.

With respect to the second question submitted for decision to this court, relative to the payment of
the sum demanded as a counterclaim, it was admitted and proved in the present case that, as a
result of a serious earthquake on August 15, 1897, the said house on Calle Escolta was left in ruins
and uninhabitable, and that, for its reconstruction or repair, the defendants had to expend the sum of
P6,252.32. This expenditure, notwithstanding that it was impugned, during the trial, by the plaintiffs,
was duly proved by the evidence presented by the defendants. Evidence, unsuccessfully rebutted,
was also introduced which proved that the rents produced by all the rural and urban properties of
common ownership amounted, up to August 1, 1905, to the sum of P3,654.15 which, being applied
toward the cost of the repair work on the said house, leaves a balance of P2,598.17, the amount
actually advanced by the defendants, for the rents collected by them were not sufficient for the
termination of all the work undertaken on the said building, necessary for its complete repair and to
replace it in a habitable condition. It is therefore lawful and just that the plaintiff Vicenta Ortiz, who
was willing to sell to her sister Matilde for P1,500, her share in the house in question, when it was in
a ruinous state, should pay the defendants one-half of the amount expanded in the said repair work,
since the building after reconstruction was worth P9,000, according to expert appraisal.
Consequently, the counterclaim made by the defendants for the payment to them of the sum of
P1,299.08, is a proper demand, though from this sum a reduction must be made of P384, the
amount of one-half of the rents which should have been collected for the use of the quarters
occupied by the justice of the peace, the payment of which is incumbent upon the husband of the
defendant Matilde, as aforesaid, and the balance remaining, P915.08, is the amount which the
plaintiff Vicenta must pay to the defendants.
The defendants claim to be entitled to the collection of legal interest on the amount of the
counterclaim, from December 7, 1904. This contention can not be sustained, inasmuch as, until this
suit is finally decided, it could not be known whether the plaintiffs would or would not be obliged to
pay the sum whatever in reimbursement of expenses incurred by the plaintiffs in the repair work on
the said house on Calle Escolta, whether or not the defendants, in turn, were entitled to collect any
such amount, and, finally, what the net sum would be which the plaintiff's might have to pay as
reimbursement for one-half of the expenditure made by the defendants. Until final disposal of the
case, no such net sum can be determined, nor until then can the debtor be deemed to be in arrears.
In order that there be an obligation to pay legal interest in connection with a matter at issue between
the parties, it must be declared in a judicial decision from what date the interest will be due on the
principal concerned in the suit. This rule has been established by the decisions of the supreme court
of Spain, in reference to articles 1108, 1109, and 1110 of the Civil Code, reference on April 24,
1867, November 19, 1869, and February 22, 1901.

With regard to the percentage, as remuneration claimed by the husband of the defendant Matilde for
his administration of the property of common ownership, inasmuch as no stipulation whatever was
made in the matter by and between him and his sister-in-law, the said defendant, the claimant is not
entitled to the payment of any remuneration whatsoever. Of his own accord and as an officious
manager, he administered the said pro indiviso property, one-half of which belonged to his wife who
held it in joint tenancy, with his sister-in-law, and the law does not allow him any compensation as
such voluntary administrator. He is merely entitled to a reimbursement for such actual and
necessary expenditures as he may have made on the undivided properties and an indemnity for the
damages he may have suffered while acting in that capacity, since at all events it was his duty to
care for and preserve the said property, half of which belonged to his wife; and in exchange for the
trouble occasioned him by the administration of his sister-in-law's half of the said property, he with
his wife resided in the upper story of the house aforementioned, without payment of one-half of the
rents said quarters might have produced had they been leased to another person.

With respect to the division of certain jewelry, petitioned for by the defendants and appellants only in
their brief in this appeal, the record of the proceedings in the lower court does not show that the
allegation made by the plaintiff Vicenta is not true, to the effect that the deceased mother of the
litigant sisters disposed of this jewelry during her lifetime, because, had she not done so, the will
made by the said deceased would have been exhibited in which the said jewelry would have been
mentioned, at least it would have been proved that the articles in question came into the possession
of the plaintiff Vicenta without the expressed desire and the consent of the deceased mother of the
said sisters, for the gift of this jewelry was previously assailed in the courts, without success;
therefore, and in view of its inconsiderable value, there is no reason for holding that the said gift was
not made.

As regards the collection of the sum of P910.50, which is the difference between the assessed value
of the undivided real properties and the price of the same as determined by the judicial expert
appraiser, it is shown by the record that the ruling of the trial judge admitting the amendment to the
original complaint, is in accord with the law and principles of justice, for the reason that any of the
coowners of a pro indiviso property, subject to division or sale, is entitled to petition for its valuation
by competent expert appraisers. Such valuation is not prejudicial to any of the joint owners, but is
beneficial to their interests, considering that, as a general rule, the assessed value of a building or a
parcel of realty is less than the actual real value of the property, and this being appraiser to
determine, in conjunction with the one selected by the plaintiffs, the value of the properties of joint
ownership. These two experts took part in the latter proceedings of the suit until finally, and during
the course of the latter, the litigating parties agreed to an amicable division of the pro indiviso
hereditary property, in accordance with the price fixed by the judicial expert appraiser appointed as a
third party, in view of the disagreement between and nonconformity of the appraisers chosen by the
litigants. Therefore it is improper now to claim a right to the collection of the said sum, the difference
between the assessed value and that fixed by the judicial expert appraiser, for the reason that the
increase in price, as determined by this latter appraisal, redounded to the benefit of both parties.

In consideration of the foregoing, whereby the errors assigned to the lower court have been duly
refuted, it is our opinion that, with a partial reversal of the judgment appealed from, in so far as it
absolves the plaintiffs from the counterclaim presented by the defendants, we should and hereby do
sentence the plaintiffs to the payment of the sum of P915.08, the balance of the sum claimed by the
defendants as a balance of the one-half of the amount which the defendants advanced for the
reconstruction or repair of the Calle Escolta house, after deducting from the total of such sum
claimed by the latter the amount of P384 which Gaspar de Bartolome, the husband of the defendant
Matilde, should have paid as one-half of the rents due for his occupation of the quarters on the lower
floor of the said house as an office for the justice of the peace court of Vigan; and we further find: (1)
That the defendants are not obliged to pay one-half of the rents which could have been obtained
from the upper story of the said house; (2) that the plaintiffs can not be compelled to pay the legal
interest from December 7, 1904, on the sum expanded in the reconstruction of the aforementioned
house, but only the interest fixed by law, at the rate of 6 per cent per annum, from the date of the
judgment to be rendered in accordance with this decision; (3) that the husband of the defendant
Matilde Ortiz is not entitled to any remuneration for the administration of the pro indiviso property
belonging to both parties; (4) that, neither is he entitled to collect from the plaintiffs the sum of
P910.50, the difference between the assessed valuation and the price set by the expert appraisal
solicited by the plaintiffs in their amendment to the complaint; and, (5) that no participation shall be
made of jewelry aforementioned now in the possession of the plaintiff Vicenta Ortiz. The said
judgment, as relates to the points appealed, is affirmed, in so far as its findings agree with those of
this decision, and is reversed, in so far as they do not. No special finding is made regarding the
costs of both instances. So ordered.

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

MANUEL MELENCIO, MARIANO MELENCIO, PURA MELENCIO, and CARIDAD MELENCIO,

plaintiffs-appellants,
vs.
DY TIAO LAY, defendant-appellee.

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

OSTRAND, J.:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The second proposition is likewise of little merit. Under the circumstances, the provision in the
contract that the lessee, at any time before he erected any building on the land, might rescind the
lease, can hardly be regarded as a violation of article 1256 of the Civil Code.

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

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

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

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

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

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

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

Considering that, applying this doctrine to the case before us, one of the grounds upon which
the judgment appealed from, denying the validity of the lease made by the majority of the
part owners of the pasture land El Mortero is based, must be upheld; to wit, that the period of
duration is twelve years and the consent of all the coowners has not been obtained; hence,
the third, fourth. and fifth assignments of error are without merit; firstly, because article 398 of
the Civil Code, alleged to have been violated, refers to acts decided upon by the majority of
the part owners, touching the management and enjoyment of the common property, and
does not contradict what we have stated in the foregoing paragraph; secondly because
although the cases cited were such as arose upon leases for more than six years, yet this
point was not raised on appeal, and could not therefore be passed upon; and thirdly,
because it cannot be denied that there is an analogy between a manager without special
authority, who is forbidden by article 1548 of the Code to give a lease for a period of over six
years, and the joint owners constituting a legal majority, who may decide to lease out the
indivisible property, with respect to the shares of the other coowners; and having come to the
conclusion that the contract is null and void, there is no need to discuss the first two
assignments of error which refer to another of the bases adopted, however erroneously, by
the trial court;
 Considering that the sixth assignment of error is without merit, inasmuch as the joint
ownership of property is not a sort of agency and cannot be governed by the provisions
relating to the latter contract; whence, article 1727 of the Code alleged to have been
violated, can no more be applied, than, the question of the validity or nullity of the lease
being raise, upon the contract as celebrated, it would be allowable to modify a posteriori
some one or other of the main conditions stipulated, like that regarding the duration of the
lease, for this would amount to a novation; still less allowable would it be to authorize diverse
periods for the different persons unequally interested in the fulfillment.

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

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

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

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

G.R. No. L-3404. April 2, 1951.]

ANGELA I. TUASON, Plaintiff-Appellant, v. ANTONIO TUASON, JR., and GREGORIO ARANETA,

INC., Defendants-Appellees.

Alcuaz & Eiguren, for Appellant.

Araneta & Araneta, for Appellees.

SYLLABUS

1. COMMUNITY PROPERTY; PARTITION; RESCISSION. — A contract among land co-owners wherein they
agreed to fill their property, contract roads therein and then subdivide in into small lots for sale, the
proceeds to be later divide among them, and to this end one of them was to finance the whole development
and subdivision, to prepare a schedule of prices and conditions of sale subject to the approval of the other
two co-owners, to sell the subdivided lots and execute the corresponding contracts with buyers, and to
receive 50 per cent of the gross selling price of the lots and the rents that may be collected from the
property while in the process of sale, the remaining 50 per cent to be divided in equal portions among the
three co-owners, — does not violate article 400 of the Civil Code. Far from violating the prohibition against a
co-owner being obliged to remain a party to the community, the contract precisely has for its purpose and
object the dissolution of the co-ownership and of the community by selling the parcel held in common and
dividing the proceeds of the sale among the co-owners. The obligation imposed in the contract to preserve
the co-ownership until all the lots shall have been sold is a mere incident to the main object of dissolving the
co-ownership.

DECISION

MONTEMAYOR, J.:

In 1941 the sisters Angela I. Tuason and Nieves Tuason de Barreto and their brother Antonio Tuason Jr.,
held a parcel of land with an area of 64,928.6 sq. m. covered by Certificate of Title No. 60911 in Sampaloc,
Manila, in common, each owning an undivided 1/3 portion. Nieves wanted and asked for a partition of the
common property, but failing in this, she offered to sell her 1/3 portion. It seems that the objection to
dividing the property was that it would lose in value by the proposed partition. The share of Nieves was
offered for sale to her sister and her brother but both declined to buy it. The offer was later made to their
mother but the old lady also declined to buy, saying that if the property later increased in value, she might
be suspected of having taken advantage of her daughter. Finally, the share of Nieves was sold to Gregorio
Araneta Inc., a domestic corporation, and a new Certificate of Title No. 61721 was issued in lieu of the old
title No. 60911 covering the same property. The three co-owners agreed to have the whole parcel
subdivided into small lots and then sold, the proceeds of the sale to be later divided among them. This
agreement is embodied in a document (Exh. 6) entitled "Memorandum of Agreement" consisting of ten
pages, dated June 30, 1941.

Before, during and after the execution of this contract (Exh. 6), Atty. J. Antonio Araneta was acting as the
attorney-in-fact and lawyer of the two co-owners, Angela I. Tuason and her brother Antonio Tuason Jr. At
the same time he was a member of the Board of Directors of the third co-owner, Araneta, Inc.

The pertinent terms of the contract (Exh. 6) may be briefly stated as follows: The three co-owners agreed to
improve the property by filling it and constructing roads and curbs on the same and then subdivide it into
small lots for sale. Araneta Inc. was to finance the whole development and subdivision; it was to prepare a
schedule of prices and conditions of sale, subject to the approval of the two other co-owners; it was invested
with authority to sell the lots into which the property was to be subdivided, and execute the corresponding
contracts and deeds of sale; it was also to pay the real estate taxes due on the property or of any portion
thereof that remained unsold, the expenses of surveying, improvements, etc., all advertising expenses,
salaries of personnel, commissions, office and legal expenses, including expenses in instituting all actions to
eject all tenants or occupants on the property; and it undertook the duty to furnish each of the two co-
owners, Angela and Antonio Tuason, copies of the subdivision plans and the monthly sales and rents and
collections made thereon. In return for all this undertaking and obligation assumed by Araneta Inc.,
particularly the financial burden, it was to receive 50 per cent of the gross selling price of the lots, and any
rents that may be collected from the property, while in the process of sale, the remaining 50 per cent to be
divided in equal portions among the three co-owners so that each will receive 16.33 per cent of the gross
receipts.

Because of the importance of paragraphs 9, 11 and 15 of the contract (Exh. 6), for purposes of reference we
are reproducing them below: jgc:chanrobles.com.ph

"(9) This contract shall remain in full force and effect during all the time that it may be necessary for the
PARTY OF THE SECOND PART to fully sell the said property in small and subdivided lots and to fully collect
the purchase prices due thereon; it being understood and agreed that said lots may be rented while there
are no purchasers thereof;

"(11) The PARTY OF THE SECOND PART (meaning Araneta Inc.) is hereby given full power and authority to
sign for and in behalf of all the said co-owners of said property all contracts of sale and deeds of sale of the
lots into which this property might be subdivided; the powers herein vested to the PARTY OF SECOND PART
may not be revoked until the purposes of this contract have been fulfilled and carried out, and the PARTY OF
THE SECOND PART may, under its own responsibility and risk, delegate any of its powers under this contract
to any of its officers, employees or to third persons;

"(15) No co-owner of the property subject-matter of this contract shall sell, alienate or dispose of his
ownership, interest or participation therein without first giving preference to the other co-owners to
purchase and acquire the same under the same farms and conditions as those offered by any other
prospective purchaser. Should none of the co-owners of the property subject-matter of this contract
exercise the said preference to acquire or purchase the same, then such sale to a third party shall be made
subject to all the conditions, terms, and dispositions of this contract; provided, the PARTIES OF THE FIRST
PART (meaning Angela and Antonio) shall be bound by this contract as long as the PARTY OF THE SECOND
PART, namely, the GREGORIO ARANETA, INC. is controlled by the members of the Araneta family, who are
stockholders of the said corporation at the time of the signing of this contract and/or their lawful heirs;"

On September 16, 1944, Angela I. Tuason revoked the powers conferred on her attorney-in-fact and lawyer,
J. Antonio Araneta. Then in a letter dated October 19, 1946, Angela notified Araneta, Inc. that because of
alleged breach of the terms of the "Memorandum of Agreement" (Exh. 6) and abuse of powers granted to it
in the document, she had decided to rescind said contract and she asked that the property held in common
be partitioned. Later, on November 20, 1946, Angela filed a complaint in the Court of First Instance of
Manila asking the court to order the partition of the property in question and that she be given 1/3 of the
same including rents collected during the time that Araneta Inc., administered said property.

The suit was directed principally against Araneta, Inc. Plaintiff’s brother, Antonio Tuason Jr., one of the co-
owners evidently did not agree to the suit and its purpose, for he joined Araneta, Inc. as a co-defendant.
After hearing and after considering the extensive evidence introduced, oral and documentary, the trial court
presided over by Judge Emilio Peña in a long and considered decision dismissed the complaint without
pronouncement as to costs. The plaintiff appealed from that decision, and because the property is valued at
more than P50,000, the appeal came directly to this Court.

Some of the reasons advanced by appellant to have the memorandum contract (Exh. 6) declared null and
void or rescinded are that she had been tricked into signing it; that she was given to understand by Antonio
Araneta acting as her attorney-in-fact and legal adviser that said contract would be similar to another
contract of subdivision of a parcel into lots and the sale thereof entered into by Gregorio Araneta Inc., and
the heirs of D. Tuason, Exhibit "L", but it turned out that the two contracts widely differed from each other,
the terms of contract Exh. "L" being relatively much more favorable to the owners therein and less favorable
to Araneta Inc.; that Atty. Antonio Araneta was more or less disqualified to act as her legal adviser as he did
because he was one of the officials of Araneta Inc., and finally, that the defendant company has violated the
terms of the contract (Exh. 6) by not previously showing her the plans of the subdivision, the schedule of
prices and conditions of the sale, in not introducing the necessary improvements into the land and in not
delivering to her share of the proceeds of the rents and sales.

We have examined Exh. "L" and compared the same with the contract (Exh. 6) and we agree with the trial
court that in the main the terms of both contracts are similar and practically the same. Moreover, as
correctly found by the trial court, the copies of both contracts were shown to the plaintiff Angela and her
husband, a broker, and both had every opportunity to go over and compare them and decide on the
advisability of or disadvantage in entering into the contract (Exh. 6); that although Atty. Antonio Araneta
was an official of the Araneta Inc.; being a member of the Board of Directors of the Company at the time
that Exhibit "6" was executed, he was not the party with which Angela contracted, and that he committed no
breach of trust. According to the evidence Araneta, Inc. showed to her the plans of the subdivision and all
the pertinent papers, and sent to her checks covering her share of the proceeds of the sale but that she
refused to receive the same; and that as a matter of fact, at the time of the trial, Araneta Inc., had spent
about P117,000 in improvement and had received as proceeds on the sale of the lots the respectable sum of
P1,265,538.48. We quote with approval that portion of the decision appealed from on these points: jgc:chanrobles.com.ph

"The evidence in this case points to the fact that the actuations of J. Antonio Araneta in connection with the
execution of exhibit 6 by the parties, are above board. He committed nothing that is violative of the
fiduciary relationship existing between him and the plaintiff. The act of J. Antonio Araneta in giving the
plaintiff a copy of exhibit 6 before the same was executed, constitutes a full disclosure of the facts, for said
copy contains all that appears now in exhibit 6.

"Plaintiff charges the defendant Gregorio Araneta, Inc. with infringing the terms of the contract in that the
defendant corporation has failed (1) to make the necessary improvements on the property as required by
paragraphs 1 and 3 of the contract; (2) to submit to the plaintiff from time to time schedule of prices and
conditions under which the subdivided lots are to be sold; and to furnish the plaintiff a copy of the
subdivision plans, a copy of the monthly statement of the sales and rents of the subdivided lots, and a
statement of the monthly gross collections from the sale of the property.

"The Court finds from the evidence that the defendant Gregorio Araneta, Incorporated has substantially
complied with the obligation imposed by the contract exhibit 6 in its paragraph 1, and that for improvements
alone, it has disbursed the amount of P117,167.09. It has likewise paid taxes, commissions and other
expenses incidental to its obligations as defined in the agreement.

"With respect to the charge that Gregorio Araneta, Incorporated has failed to submit to plaintiff a copy of
the subdivision plans, list of prices and the conditions governing the sale of subdivided lots, and monthly
statement of collections from the sale of the lots, the Court is of the opinion that it has no basis. The
evidence shows that the defendant corporation submitted to the plaintiff periodically all the data relative to
prices and conditions of the sale of the subdivided lots, together with the amount corresponding to her. But
without any justifiable reason, she refused to accept them. With the indifferent attitude adopted by the
plaintiff, it was thought useless for Gregorio Araneta, Incorporated to continue sending her statement of
accounts, checks and other things. She had shown on various occasions that she did not went to have any
further dealings with the said corporation. So, if the defendant corporation proceeded with the sale of the
subdivided lots without the approval of the plaintiff, it was because it was under the correct impression that
under the contract exhibit 6 the decision of the majority co-owners is binding upon all the three.

"The Court feels that rescission of the contract exhibit 6 is not in order. Even granting that the defendant
corporation committed minor violations of the terms of the agreement, the general rule is that ’rescission
will not be permitted for a slight or casual breach of the contract, but only for such breaches as are so
substantial and fundamental as to defeat the object of the parties in making the agreement’ (Song Fo & Co.
v. Hawaiian-Philippine Co., 47 Phil. 821)." cralaw virtua1aw library

As regards improvements, the evidence shows that during the Japanese occupation from 1942 and up to
1946, the Araneta Inc. although willing to fill the land, was unable to obtain the equipment and gasoline
necessary for filling the low places within the parcel. As to sales, the evidence shows that Araneta Inc.
purposely stopped selling the lots during the Japanese occupation, knowing that the purchase price would be
paid in Japanese military notes; and Atty. Araneta claims that for this, plaintiff should be thankful because
otherwise she would have received these notes as her share of the receipts, which currency later became
valueless.

But the main contention of the appellant is that the contract (Exh. 6) should be declared null and void
because its terms, particularly paragraphs 9, 11 and 15 which we have reproduced, violate the provisions of
Art. 400 of the Civil Code, which for the purposes of reference we quote below: jgc:chanrobles.com.ph

"ART. 400. No co-owner shall be obliged to remain a party to the community. Each may, at any time,
demand the partition of the thing held in common.

"Nevertheless, an agreement to keep the thing undivided for a specified length of time, not exceeding ten
years, shall be valid. This period may be a new agreement." cralaw virtua1aw library

We agree with the trial court that the provisions of Art. 400 of the Civil Code are not applicable. The contract
(Exh. 6) far from violating the legal provision that forbids a co-owner being obliged to remain a party to the
community, precisely has for its purpose and object the dissolution of the co-ownership and of the
community by selling the parcel held in common and dividing the proceeds of the sale among the co-
owners. The obligation imposed in the contract to preserve the co-ownership until all the lots shall have
been sold, is a mere incident to the main object of dissolving the co-ownership. By virtue of the document
Exh. 6, the parties thereto practically and substantially entered into a contract of partnership as the best
and most expedient means of eventually dissolving the co-ownership, the life of said partnership to end
when the object of its creation shall have been attained.

This aspect of the contract is very similar to and was perhaps based on the other agreement or contract
(Exh. "L") referred to by appellant where the parties thereto in express terms entered into a partnership,
although this object is not expressed in so many words in Exh. 6. We repeat that we see no violation of Art.
400 of the Civil Code in the parties entering into the contract (Exh. 6) for the very reason that Art. 400 is
not applicable.

Looking at the case from a practical standpoint as did the trial court, we find no valid ground for the
partition insisted upon the appellant. We find from the evidence as was done by the trial court that of the
64,928.6 sq. m. which is the total area of the parcel held in common, only 1,600 sq. m. or 2.5 per cent of
the entire area remained unsold at the time of the trial in the year 1947, while the great bulk of 97.5 per
cent had already been sold. As well observed by the court below, the partnership is in the process of being
dissolved and is about to be dissolved, and even assuming that Art. 400 of the Civil Code were applicable,
under which the parties by agreement may agree to keep the thing undivided for a period not exceeding 10
years, there should be no fear that the remaining 1,600 sq. m. could not be disposed of within the four
years left of the ten-year period fixed by Art. 400.

We deem it unnecessary to discuss and pass upon the other points raised in the appeal and which counsel
for appellant has extensively and ably discussed, citing numerous authorities. As we have already said, we
have viewed the case from a practical standpoint, brushing aside technicalities and disregarding any minor
violations of the contract, and in deciding the case as we do, we are fully convinced that the trial court and
this Tribunal are carrying out in a practical and expeditious way the intentions and the agreement of the
parties contained in the contract (Exh. 6), namely, to dissolve the community and co-ownership, in a
manner most profitable to the said parties.

In view of the foregoing, the decision appealed from is hereby affirmed. There is no pronouncement as to
costs.

So ordered.
[G.R. No. 101522. May 28, 1993.]

LEONARDO MARIANO, AVELINA, TIGUE, LAZARO MARIANO, MERCEDES SAN PEDRO, DIONISIA M.
AQUINO, and JOSE N.T. AQUINO, Petitioners, v. HON. COURT OF APPEALS, (Sixteenth Division),
GRACE GOSIENGFIAO, assisted by her husband CHARLIE GUILLEN; EMMA GOSIENGFIAO, assisted
by her husband GERMAN GALCOS; ESTER GOSIENGFIAO, assisted by her husband AMADOR
BITONA; FRANCISCO GOSIENGFIAO, JR., NORMA GOSIENGFIAO, and PINKY ROSE GUENO,
Respondents.

The Barristers Law Office, for Petitioners.

Simeon T. Agustin for Private Respondents.

SYLLABUS

1. CIVIL LAW; PROPERTY, OWNERSHIP AND ITS MODIFICATION; CO-OWNERSHIP; REDEMPTION MADE BY
A CO-OWNER WITHIN PERIOD, INURES TO THE BENEFIT OF ALL. — A redemption by a co-owner within the
period prescribed by law inures to the benefit of all the other co-owners.

2. ID.; OBLIGATIONS AND CONTRACTS; MORTGAGE; RIGHT OF REDEMPTION UNDER ARTICLES 1088 AND
1620 OF THE CIVIL CODE, DISTINGUISHED. — According to Tolentino, the fine distinction between Article
1088 and Article 1620 is that when the sale consists of an interest in some particular property or properties
of the inheritance, the right of redemption that arises in favor of the other co-heirs is that recognized in
Article 1620. On the other hand, if the sale is the hereditary right itself, fully or in part, in the abstract
sense, without specifying any particular object, the right recognized in Article 1088 exists.

3. ID.; ID.; ID.; LEGAL REDEMPTION; GIVING COPY OF DEED OF SALE, EQUIVALENT TO WRITTEN NOTICE.
— The giving of a copy of a deed is equivalent to the notice as required by law in legal redemption.
(Conejero, Et Al., v. Court of Appeals, Et Al., 16 SCRA 775 [1966]) The requirement of a written notice has
long been settled as early as in the case of Castillo v. Samonte, where this Court quoted the ruling in
Hernaez v. Hernaez, 32 Phil., 214, thus:" ‘Both the letter and spirit of the New Civil Code argue against any
attempt to widen the scope of the notice specified in Article 1088 by including therein any other kind of
notice, such as verbal or by registration. If the intention of the law had been to include verbal notice or any
other means of information as sufficient to give the effect of this notice, then there would have been no
necessity or reasons to specify in Article 1088 of the New Civil Code that the said notice be made in writing
for, under the old law, a verbal notice or information was sufficient.’"

4. ID.; ID.; ID.; ID.; ID.; DOCTRINE IN CONEJERO CASE (16 SCRA 775 [1966] NOT APPLICABLE TO THE
CASE AT BAR. — We do not dispute the principle laid down in the Conejero case. However, the facts in the
said case are not four square with the facts of the present case. In Conejero, redemptioner Enrique Conejero
was shown and given a copy of the deed of sale of the subject property. The Court in that case stated that
the furnishing of a copy of the deed was equivalent to the giving of a written notice required by law. The
records of the present petition, however, show no written notice of the sale being given whatsoever to
private respondents. Although, petitioners allege that sometime on October 31, 1982 private respondent,
Grace Gosiengfiao was given a copy of the questioned deed of sale and shown a copy of the document at
the Office of the Barangay Captain sometime November 18, 1982, this was not supported by the evidence
presented.

5. ID.; ID.; ID.; ID.; REASON FOR REQUIREMENT OF WRITTEN NOTICE. — Consistent with aforesaid ruling,
in the interpretation of a related provision (Article 1623 of the New Civil Code) this Court had stressed that
written notice is indispensable, actual knowledge of the sale acquired in some other manners by the
redemptioner, notwithstanding. He or she is still entitled to written notice, as exacted by the code to remove
all uncertainty as to the sale, its terms and its validity, and to quiet any doubt that the alienation is not
definitive. The law not having provided for any alternative, the method of notifications remains exclusive,
though the Code does not prescribe any particular form of written notice nor any distinctive method for
written notification of redemption (Garcia v. Calaliman, 172 SCRA 201 [1989] and other cases cited).

6. ID.; ID.; ID.; ID.; FAILURE TO CONSIGN FULL REDEMPTION PRICE, NOT REQUIRED; MERE TENDER OF
PAYMENT SUFFICIENT TO ENFORCE RIGHT. — We likewise do not find merit in petitioners’ position that
private respondents could not have validly effected redemption due to their failure to consign in court the
full redemption price after the tender thereof was rejected by the petitioners. Consignation is not necessary,
because the tender of payment was not made to discharge an obligation, but to enforce or exercise a right.
It has been previously held that consignation is not required to preserve the right of repurchase as a mere
tender of payment is enough if made on time as a basis for an action to compel the vendee a retro to resell
the property; no subsequent consignation was necessary to entitle private respondents to such
reconveyance.

DECISION

NOCON, J.:

Before Us is a petition for review of the decision dated May 13, 1991 of the Court of Appeals in CA-G.R. CV
No. 13122, entitled Grace Gosiengfiao, Et. Al. v. Leonardo Mariano v. Amparo Gosiengfiao 1 raising as issue
the distinction between Article 1088 2 and Article 1620 3 of the Civil Code.

The Court of Appeals summarized the facts as follows: jgc:chanrobles.com.ph

"It appears on record that the decedent Francisco Gosiengfiao is the registered owner of a residential lot
located at Ugac Sur, Tuguegarao, Cagayan, particularly described as follows, to wit: chanrob1es virtual 1aw library

‘The eastern portion of Lot 1351, Tuguegarao Cadastre, and after its segregation now designated as Lot
1351-A, Plan PSD-67391, with an area of 1,346 square meters.’

and covered by Transfer Certificate of Title No. T-2416 recorded in the Register of Deeds of Cagayan.

"The lot in question was mortgaged by the decedent to the Rural Bank of Tuguegarao (designated as
Mortgagee bank, for brevity) on several occasions before the last, being on March 9, 1956 and January 29,
1958.

"On August 15, 1958, Francisco Gosiengfiao died intestate survived by his heirs, namely: Third-Party
Defendants: wife Antonia and Children Amparo, Carlos, Severino and herein plaintiffs-appellants Grace,
Emma, Ester, Francisco, Jr., Norma, Lina (represented by daughter Pinky Rose), and Jacinto.

"The loan being unpaid, the lot in dispute was foreclosed by the mortgagee bank and in the foreclosure sale
held on December 27, 1963, the same was awarded to the mortgagee bank as the highest bidder.

"On February 7, 1964, third-party defendant Amparo Gosiengfiao-Ibarra redeemed the property by paying
the amount of P1,347.89 and the balance of P423.35 was paid on December 28, 1964 to the mortgagee
bank.

"On September 10, 1965, Antonia Gosiengfiao on her behalf and that of her minor children Emma, Lina,
Norma together with Carlos and Severino executed a `Deed of Assignment of the Right of Redemption’ in
favor of Amparo G. Ibarra appearing in the notarial register of Pedro (Laggui) as Doc. No. 257, Page No. 6,
Book No. 8, Series of 1965.

"On August 15, 1966, Amparo Gosiengfiao sold the entire property to defendant Leonardo Mariano who
subsequently established residence on the lot subject of this controversy. It appears in the Deed of Sale
dated August 15, 1966 that Amparo, Antonia, Carlos and Severino were signatories thereto.

"Sometime in 1982, plaintiff-appellant Grace Gosiengfiao learned of the sale of said property by the third-
party defendants. She went to the Barangay Captain and asked for a confrontation with defendants
Leonardo and Avelina Mariano to present her claim to the said property.

"On November 27, 1982, no settlement having been reached by the parties, the Barangay Captain issued a
certificate to file action.

"On December 8, 1982, defendant Leonardo Mariano sold the same property to his children Lazaro F.
Mariano and Dionicia M. Aquino as evidenced by a Deed of Sale notarized by Hilarion L. Aquino as Doc. No.
143, Page No. 19, Book No. V, Series of 1982.

"On December 21, 1982, plaintiffs Grace Gosiengfiao, Et. Al. filed a complaint for ‘recovery of possession
and legal redemption with damages’ against defendants Leonardo and Avelina Mariano. Plaintiffs alleged in
their complaint that as co-heirs and co-owners of the lot in question, they have the right to recover their
respective shares in the said property as they did not sell the same, and the right of redemption with regard
to the shares of other co-owners sold to the defendants.

"Defendants in their answer alleged that the plaintiffs has (sic) no cause of action against them as the
money used to redeem the lot in question was solely from the personal funds of third-party defendant
Amparo Gosiengfiao-Ibarra, who consequently became the sole owner of the said property and thus validly
sold the entire property to the defendants, and the fact that defendants had already sold the said property
to their children, Lazaro Mariano and Dionicia M. Aquino. Defendants further contend that even granting that
the plaintiffs are co-owners with the third-party defendants, their right of redemption had already been
barred by the Statute of Limitations under Article 1144 of the Civil Code, if not by laches." 4

After trial on the merits, the Regional Trial Court of Cagayan, Branch I, rendered a decision dated
September 16, 1986, dismissing the complaint and stating that respondents have no right of ownership or
possession over the lot in question. The trial court further said that when the subject property was
foreclosed and sold at public auction, the rights of the heirs were reduced to a mere right of redemption.
And when Amparo G. Ibarra redeemed the lot from the Rural Bank on her own behalf and with her own
money she became the sole owner of the property. Respondents’ having failed to redeem the property from
the bank or from Amparo G. Ibarra, lost whatever rights they might have on the property. 5

The Court of Appeals in its questioned decision reversed and set aside the ruling of the trial court and
declared herein respondents as co-owners of the property in the question. The Court of Appeals said: chanrobles.com:cralaw:red

"The whole controversy in the case at bar revolves on the question of ‘whether or not a co-owner who
redeems the whole property with her own personal funds becomes the sole owner of said property and
terminates the existing state of co-ownership.’

"Admittedly, as the property in question was mortgaged by the decedent, a co-ownership existed among the
heirs during the period given by law to redeem the foreclosed property. Redemption of the whole property
by a co-owner does not vest in him sole ownership over said property but will inure to the benefit of all co-
owners. In other words, it will not put an end to the existing state of co-ownership. Redemption is not a
mode of terminating a co-ownership.

x           x           x

"In the case at bar, it is undisputed and supported by records, that third-party defendant Amparo G. Ibarra
redeemed the property in dispute within the one year redemption period. Her redemption of the property,
even granting that the money used was from her own personal funds did not make her the exclusive owner
of the mortgaged property owned in common but inured to the benefit of all co-owners. It would have been
otherwise if third-party defendant Amparo G. Ibarra purchased the said property from the mortgagee bank
(highest bidder in the foreclosure sale) after the redemption period had already expired and after the
mortgagee bank had consolidated it title in which case there would no longer be any co-ownership to speak
of." 6

The decision of the Court of Appeals is supported by a long line of case law which states that a redemption
by a co-owner within the period prescribed by law inures to the benefit of all the other co-owners. 7

The main argument of petitioners in the case at bar is that the Court of Appeals incorrectly applied Article
1620 of the Civil Code, instead of Article 1088 of the same code which governs legal redemption by co-heirs
since the lot in question, which forms part of the intestate estate of the late Francisco Gosiengfiao, was
never the subject of partition or distribution among the heirs, thus, private respondents and third-party
defendants had not ceased to be co-heirs. chanrobles virtualawlibrary chanrobles.com:chanrobles.com.ph

On that premise, petitioners further contend that the right of legal redemption was not timely exercised by
the private respondents, since Article 1088 prescribes that the same must be done within the period of one
month from the time they were notified in writing of the sale by the vendor.

According to Tolentino, the fine distinction between Article 1088 and Article 1620 is that when the sale
consists of an interest in some particular property or properties of the inheritance, the right of redemption
that arises in favor of the other co-heirs is that recognized in Article 1620. On the other hand, if the sale is
the hereditary right itself, fully or in part, in the abstract sense, without specifying any particular object, the
right recognized in Article 1088 exists. 8

Petitioners allege that upon the facts and circumstances of the present case, respondents failed to exercise
their right of legal redemption during the period provided by law, citing as authority the case of Conejero, Et
Al., v. Court of Appeals, Et. Al. 9 wherein the Court adopted the principle that the giving of a copy of a deed
is equivalent to the notice as required by law in legal redemption. chanrobles.com.ph : virtual law library

We do not dispute the principle laid down in the Conejero case. However, the facts in the said case are not
four square with the facts of the present case. In Conejero, redemptioner Enrique Conejero was shown and
given a copy of the deed of sale of the subject property. The Court in that case stated that the furnishing of
a copy of the deed was equivalent to the giving of a written notice required by law. 10

The records of the present petition, however, show no written notice of the sale being given whatsoever to
private respondents. Although, petitioners allege that sometime on October 31, 1982 private respondent,
Grace Gosiengfiao was given a copy of the questioned deed of sale and shown a copy of the document at
the Office of the Barangay Captain sometime November 18, 1982, this was not supported by the evidence
presented. On the contrary, respondent, Grace Gosiengfiao, in her testimony, declared as follows: chanrob1es virtual 1aw library

Q When you went back to the residence of Atty. Pedro Laggui were you able to see him?

A Yes, I did.

Q When you saw him, what did you tell?

A I asked him about the Deed of Sale which Mrs. Aquino had told me and he also showed me a Deed of
Sale. I went over the Deed of Sale and I asked Atty. Laggui about this and he mentioned here about the
names of the legal heirs. I asked why my name is not included and I was never informed in writing because
I would like to claim and he told me to better consult my own attorney.

Q And did you go?

A Yes, I did.

Q What kind of copy or document is that?

A It is a deed of sale signed by my mother, sister Amparo and my brothers.

Q If shown to you the copy of the Deed of Sale will you be able to identify it?
A Yes, sir. 11

Thereafter, Grace Gosiengfiao explicitly stated that she was never given a copy of the said Deed of Sale.

Q Where did Don Mariano, Dr. Mariano and you see each other?

A In the house of Brgy. Captain Antonio Bassig.

Q What transpired in the house of the Brgy. Captain when you saw each other there?

A Brgy. Captain Bassig informed my intention of claiming the lot and I also informed him about the Deed of
Sale that was not signed by me since it is mine it is already sold and I was never informed in writing about
it. I am a legal heir and I have also the right to claim.

Q And what was the reply of Don Mariano and Dr. Mariano to the information given to them by Brgy.
Captain Bassig regarding your claim?

A He insisted that the lot is already his because of the Deed of Sale. I asked for the exact copy so that I
could show to him that I did not sign and he said he does not have a copy. 12

The above testimony was never refuted by Dr. Mariano who was present before Brgy. Captain Bassig.

The requirement of a written notice has long been settled as early as in the case of Castillo v. Samonte, 13
where this Court quoted the ruling in Hernaez v. Hernaez, 32 Phil., 214, thus: jgc:chanrobles.com.ph

"‘Both the letter and spirit of the New Civil Code argue against any attempt to widen the scope of the notice
specified in Article 1088 by including therein any other kind of notice, such as verbal or by registration. If
the intention of the law had been to include verbal notice or any other means of information as sufficient to
give the effect of this notice, then there would have been no necessity or reasons to specify in Article 1088
of the New Civil Code that the said notice be made in writing for, under the old law, a verbal notice or
information was sufficient.’" 14

Moreover, petitioners themselves adopted in their argument respondents’ allegation in their complaint that
sometime on October, 1982 they sought the redemption of the property from spouses Leonardo Mariano and
Avelina Tigue, by tendering the repurchase money of P12,000.00, which the spouses rejected. 15
Consequently, private respondents exercised their right of redemption at the first opportunity they have by
tendering the repurchase price to petitioners. The complaint they filed before the Barangay Captain and then
to the Regional Trial Court was necessary to assert their rights. As we learned in the case of Castillo,
supra:chanrobles virtual lawlibrary

"It would seem clear from the above that the reimbursement to the purchaser within the period of one
month from the notice in writing is a requisite or condition precedent to the exercise of the right of legal
redemption; the bringing of an action in court is the remedy to enforce that right in case the purchaser
refuses the redemption. The first must be done within the month-period; the second within the prescriptive
period provided in the Statute of Limitation." 16

The ruling in Castillo v. Samonte, supra, was reiterated in the case of Garcia v. Calaliman, where We also
discussed the reason for the requirement of the written notice. We said: jgc:chanrobles.com.ph

"Consistent with aforesaid ruling, in the interpretation of a related provision (Article 1623 of the New Civil
Code) this Court had stressed that written notice is indispensable, actual knowledge of the sale acquired in
some other manners by the redemptioner, notwithstanding. He or she is still entitled to written notice, as
exacted by the code to remove all uncertainty as to the sale, its terms and its validity, and to quiet any
doubt that the alienation is not definitive. The law not having provided for any alternative, the method of
notifications remains exclusive, though the Code does not prescribe any particular form of written notice nor
any distinctive method for written notification of redemption (Conejero Et. Al. v. Court of Appeals Et. Al., 16
SCRA 775 [1966]; Etcuban v. Court of Appeals, 148 SCRA 507 [1987]; Cabrera v. Villanueva, G.R. No.
75069, April 15, 1988)." 17 (Emphasis, ours)

We likewise do not find merit in petitioners’ position that private respondents could not have validly effected
redemption due to their failure to consign in court the full redemption price after the tender thereof was
rejected by the petitioners. Consignation is not necessary, because the tender of payment was not made to
discharge an obligation, but to enforce or exercise a right. It has been previously held that consignation is
not required to preserve the right of repurchase as a mere tender of payment is enough if made on time as
a basis for an action to compel the vendee a retro to resell the property; no subsequent consignation was
necessary to entitle private respondents to such reconveyance. 18

Premises considered, respondents have not lost their right to redeem, for in the absence of a written
notification of the sale by the vendors, the 30-day period has not even begun to run.

WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED. Cost against petitioners.

SO ORDERED.

G.R. No. 56550 October 1, 1990

MARINA Z. REYES, AUGUSTO M. ZABALLERO and SOCORRO Z. FRANCISCO, petitioners,

vs.
THE HONORABLE ALFREDO B. CONCEPCION, Presiding Judge, CFI of Cavite, Tagaytay, Br.
IV, SOCORRO MARQUEZ VDA. DE ZABALLERO, EUGENIA Z. LUNA, LEONARDO M.
ZABALLERO, and ELENA FRONDA ZABALLERO, respondents.

Law Firm of Raymundo A. Armovit for petitioners.

Leonardo M. Zaballero for private respondents.

CORTÉS, J.:

On March 13, 1980, petitioners filed with the CFI a complaint for injunction and damages, docketed as Civil Case No. TG-572, seeking to
enjoin private respondents Socorro Marquez Vda. De Zaballero, Eugenia Z. Luna and Leonardo M. Zaballero from selling to a third party
their pro-indiviso shares as co-owners in eight parcels of registered land (covered by TCT Nos. A-1316 to A-1322) located in the province of
Cavite, with an aggregate area of about 96 hectares. Petitioner claimed that under Article 1620 of the new Civil Code, they, as co-owners,
had a preferential right to purchase these shares from private respondents for a reasonable price.

On March 17, 1980, respondent trial judge denied the ex parte application for a writ of preliminary
injunction, on the ground that petitioners' registered notice of lis pendens was ample protection of
their rights.

On April 24, 1980, private respondents received the summons and copies of the complaint. Private
respondents then filed their answer with counterclaim, praying for the partition of the subject
properties. Private respondent Elena Fronda Zaballero filed a motion for intervention dated April 29,
1980, adopting therein her co-respondents answer with counterclaim.

At the pre-trial hearing, the parties agreed on the following stipulation of facts:

xxx xxx xxx

1. That the plaintiffs, the defendants and the intervenor are the pro-indiviso co-
owners of the properties cited and described in the complaint;

2. That six and nine tenth (6-9/10) hectares of the land covered by TCT No. T-1319;
approximately twelve (12) hectares of that covered by TCT No. T-1320; and the
entire parcel of covered by TCT No. T-1321, are subject of expropriation proceedings
instituted by the National Housing Authority (NHA) now pending before this Court in
Civil Case Nos. TG-392, TG-396 and TG-417;

3. That based on the evidence presented by the herein parties in the aforecited
expropriation cases, the current valuation of the land and the improvements thereon
is at P95,132.00 per hectare;

4. That on 16 April 1980, the plaintiffs received a written notice from the defendants
and the intervenor that the VOLCANO SECURITIES TRADERS AND AGRI-
BUSINESS CORPORATION had offered to buy the latter's share in the properties
listed in the complaint subject to the following terms:

1. The selling price shall be net at TWELVE & 50/100 (P12.50)

PESOS per square meter, or a total price of NINE MILLION
(P9,000,000.00) PESOS for a total area of SEVENTY TWO (72)
HECTARES ONLY;

2. A downpayment equivalent to THIRTY (30%) PERCENT of the

selling price, or a minimum downpayment of TWO MILLION SEVEN
HUNDRED THOUSAND (P2,700,000.00) PESOS;

3. The balance of the purchase price to be payable within THREE (3)

YEARS from the date of downpayment in THREE (3) EQUAL,
ANNUAL PAYMENTS with interest at the legal rate prevailing at the
time of payment;

4. The balance shall be covered by a BANK GUARANTEE of

payments and shall not be governed by Art. 1250 of the Civil Code.

(Cf. Annexes 1, 2 and 3, Answer)

5. That in said letters (Annexes 1, 2 and 3, Answer), the plaintiffs were requested:

a) To exercise their pre-emptive right to purchase defendants' and

intervenor's shares under the above-quoted terms; or

b) To agree to a physical partition of the properties; or

c) To sell their shares, jointly with the defendants and the intervenor,
to the VOLCANO SECURITIES TRADERS AND AGRI-BUSINESS
CORPORATION at the price and under the terms aforequoted.

6. That the VOLCANO SECURITIES TRADERS AND AGRI-BUSINESS

CORPORATION is ready, willing and able to purchase not only the aliquot shares of
the defendants and the intervenor, but also that of the plaintiffs, in and to all the
properties subject of this case, for and in consideration of the net amount of
TWELVE and 50/100 (P12.50) PESOS per square meter and under the afore-quoted
terms;

xxx xxx xxx

 [Annex "C" of the Petition, pp. 1-2, Rollo, pp. 43-44.]

The parties laid down their respective positions, as follows:

PLAINTIFFS

1. That the subject properties are incapable of physical partition;

2. That the price of P12.50 per square meter is grossly excessive;

3. That they are willing to exercise their pre-emptive right for an amount of not more
that P95,132.00 per hectare, which is the fair and reasonable value of said
properties;

4. That the statutory period for exercising their pre-emptive right was suspended
upon the filing of the complaint;

DEFENDANTS AND INTERVENOR

1. That the reasonable price of the subject properties is P12.50 per square meter;

2. That plaintiffs' right of legal pre-emption had lapsed upon their failure to exercise
the same within the period prescribed in Art. 1623 of the Civil Code of the
Philippines;

3. That, assuming the soundness of plaintiffs' claim that the price of P12.50 per
square meter is grossly excessive, it would be to the best interest of the plaintiffs to
sell their shares to the VOLCANO SECURITIES TRADERS AND AGRI-BUSINESS
CORPORATION, whose sincerity, capacity and good faith is beyond question, as the
same was admitted by the parties herein;

4. That the subject properties consisting approximately 95 hectares may be

physically partitioned without difficulty in the manner suggested by them to plaintiffs,
and as graphically represented in the subdivision plan, which will be furnished in due
course to plaintiffs' counsel.

[Annex "C" of the Petition, pp. 2-3; Rollo, pp. 44-45.]

Based on the foregoing, respondent trial judge rendered a pre-trial order dated July 9, 1980 granting
petitioners a period of ten days from receipt of the subdivision plan to be prepared by a competent
geodetic engineer within which to express their approval or disapproval of the said plan, or to submit
within the same period, if they so desire, an alternative subdivision plan.

On July 16, 1980, counsel for private respondents sent to the counsel for petitioners a letter
enclosed with a subdivision plan.

On August 4, 1980, petitioners filed their comment to the pre-trial order, contending that the question
of reasonable value of the subject properties remains a contentious issue of fact ascertainable only
after a full trial. Petitioners likewise insisted on their pre- emptive right to purchase private
respondents' shares in the co-ownership after due determination of the reasonable price thereof.
Thereafter, counsel for private respondents sent the counsel for petitioners another subdivision plan
prepared by a geodetic engineer. Still, no definite communication was sent by petitioners signifying
their approval or disapproval to the subdivision plans.

In order to settle once and for all the controversy between the parties, private respondents filed a
motion dated December 16, 1980 requesting that petitioners be required to formally specify which of
the two options under Article 498 of the New Civil Code they wished to avail of: that petitioners'
shares in the subject properties be sold to private respondents, at the rate of P12.50 per square
meter; or that the subject properties be sold to a third party, VOLCANO LAKEVIEW RESORTS, INC.
(claimed to have been erroneously referred to in the pre-trial as VOLCANO SECURITIES TRADERS
AND AGRI-BUSINESS CORPORATION) and its proceeds thereof distributed among the parties.

Finding merit in the private respondents' request, and for the purpose of determining the applicability
of Article 498 of the New Civil Code, respondent trial judge issued an order dated February 4, 1981
which directed the parties to signify whether or not they agree to the scheme of allotting the subject
properties to one of the co-owners, at the rate of P12.50 per square meter, or whether or not they
know of a third party who is able and willing to buy the subject properties at terms and conditions
more favorable than that offered by VOLCANO LAKEVIEW RESORTS, INC. The order contained a
series of questions addressed to all the parties, who were thereupon required to submit their
answers thereto.

Private respondents filed a "Constancia" expressing that they were willing to allot their shares in the
subject properties to Socorro Marquez Vda. de Zaballero, at the rate of P12.50 per square meter,
and that they did not know of any other party who was willing and able to purchase the subject
properties under more favorable conditions than that offered by VOLCANO LAKEVIEW RESORTS,
INC.

However, instead of submitting their answers to the queries posed by respondent trial judge,
petitioners filed a motion for clarification as to the true identity of the third party allegedly willing to
purchase the subject properties.

On February 26, 1981, respondent trial judge rejected petitioners' motion on the ground that it was
irrelevant.

Thereupon, on February 27, 1981, petitioners filed a pleading captioned "Compliance and Motion",
(1) reiterating the relevance of ascertaining the true identity of the third party buyer, VOLCANO
SECURITIES TRADERS AND AGRI-BUSINESS CORPORATION or VOLCANO LAKEVIEW
RESORTS, INC., (2) expressing their view that there is actually no bona fide and financially able
third party willing to purchase the subject properties at the rate of P12.50 per square meter, and, (3)
once again insisting on their pre-emptive right to purchase the shares of private respondents in the
co-ownership at a "reasonable price", which is less than that computed excessively by the latter at
the rate of P12.50 per square meter. Petitioners therein prayed that further proceedings be
conducted in order to settle the factual issue regarding the reasonable value of the subject
properties.

On March 16, 1981, respondent trial judge issued an order denying petitioners' motion. The judge
ruled that petitioners did not possess a pre-emptive right to purchase private respondents' shares in
the co-ownership. Thus, finding that the subject properties were essentially indivisible, respondent
trial judge ordered the holding of a public sale of the subject properties pursuant to Article 498 of the
New Civil Code. A notice of sale was issued setting the date of public bidding for the subject
properties on April 13, 1981.
Petitioners then filed a motion for reconsideration from the above order. Respondent trial judge reset
the hearing on petitioners' motion for reconsideration to April 6, 1981, and moved the scheduled
public sale to April 14, 1981.

Without awaiting resolution of their motion for reconsideration, petitioners filed the present petition
for certiorari, alleging that the respondent trial judge acted without jurisdiction, or in grave abuse of
its discretion amounting to lack of jurisdiction, in issuing his order dated March 16, 1981 which
denied petitioners' claim of a pre-emptive right to purchase private respondents' pro-indiviso shares
and which, peremptorily ordered the public sale of the subject properties. On April 8, 1981, this Court
issued a temporary restraining order enjoining the sale of the subject properties at public auction.

With the comment and reply, the Court considered the issues joined and the case submitted for
decision.

The Court finds no merit in the present petition.

The attack on the validity of respondent trial judge's order dated March 16, 1981 is ultimately
premised on petitioners' claim that they had a pre-emptive right to purchase the pro-indiviso shares
of their co-owners, private respondents herein, at a "reasonable price". It is this same claim which
forms the basis of their complaint for injunction and damages filed against private respondents in the
court a quo.

This claim is patently without basis. In this jurisdiction, the legal provisions on co-ownership do not
grant to any of the owners of a property held in common a pre-emptive right to purchase the pro-
indiviso shares of his co-owners. Petitioners' reliance on Article 1620 of the New Civil Code is
misplaced. Article 1620 provides:

A co-owner of a thing may exercise the right of redemption in case the shares of all
the co-owners or of any of them, are sold to a third person. If the price of the
alienation is grossly excessive, the redemptioner shall pay only a reasonable one.

Should two or more co-owners desire to exercise the right of redemption, they may
only do so in proportion to the share they may respectively have in the thing owned
in common [Emphasis supplied].

Article 1620 contemplates of a situation where a co-owner has alienated his pro-indiviso shares to a
stranger. By the very nature of the right of "legal redemption", a co-owner's light to redeem is
invoked only after the shares of the other co-owners are sold to a third party or stranger to the co-
ownership [See Estrada v. Reyes, 33 Phil. 31 (1915)]. But in the case at bar, at the time petitioners
filed their complaint for injunction and damages against private respondents, no sale of the latter's
pro-indiviso shares to a third party had yet been made. Thus, Article 1620 of the New Civil Code
finds no application to the case at bar.

There is likewise no merit to petitioners' contention that private respondents had acknowledged the
pre-emptive right of petitioners to purchase their shares at a "reasonable price". Although it appears
that private respondents had agreed to sell their pro-indiviso shares to petitioners, the offer was
made at a fixed rate of P12.50 per square meter [See Pre-trial Order dated July 9, 1980, Annex "C"
of the Petition; Rollo, pp. 43-45]. It cannot be said that private respondents had agreed, without
qualification, to sell their shares to petitioners. Hence, petitioners cannot insist on a right to purchase
the shares at a price lower than the selling price of private respondents.
Neither do petitioners have the legal right to enjoin private respondents from alienating their pro-
indiviso shares to a third party. The rights of a co-owner of a property are clearly specified in Article
493 of the New Civil Code, thus:

Art. 493. Each co-owner shall have the full ownership of his part and of the fruits and
benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and
even substitute another person in its enjoyment, except when personal rights are
involved. But the effect of the alienation of 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.

The law does not prohibit a co-owner from selling, alienating or mortgaging his ideal share in the
property held in common. The law merely provides that the alienation or mortgage shall be limited
only to the portion of the property which may be allotted to him upon termination of the co-ownership
[See Mercado v. Liwanag, G.R. No. L-14429, June 30, 1962, 5 SCRA 472; PNB v. The Honorable
Court of Appeals, G.R. No. L-34404, June 25, 1980, 98 SCRA 207; Go Ong v. The Honorable Court
of Appeals, G.R. No. 75884, September 24, 1987, 154 SCRA 270,] and, as earlier discussed, that
the remaining co-owners have the right to redeem, within a specified period, the shares which may
have been sold to the third party. [Articles 1620 and 1623 of the New Civil Code.]

Considering the foregoing, the Court holds that respondent trial judge committed no grave abuse of
discretion when he denied petitioners' claim of a pre-emptive right to purchase private respondents'
pro-indiviso shares.

Moreover, there is no legal infirmity tainting respondent trial judge's order for the holding of a public
sale of the subject properties pursuant to the provisions of Article 498 of the New Civil Code. After a
careful examination of the proceedings before respondent trial judge, the Court finds that respondent
trial judge's order was issued in accordance with the laws pertaining to the legal or juridical
dissolution of co-ownerships.

It must be noted that private respondents, in their answer with counterclaim prayed for, inter alia, the
partition of the subject properties in the event that the petitioners refused to purchase their pro-
indiviso shares at the rate of P12.50 per square meter. Unlike petitioners' claim of a pre-emptive
right to purchase the other co-owners' pro-indiviso shares, private respondents' counterclaim for the
partition of the subject properties is recognized by law, specifically Article 494 of the New Civil Code
which lays down the general rule that no co-owner is obliged to remain in the co-ownership. Article
494 reads as follows:

No co-owner shall be obliged to remain in the co-ownership. Each co-owner may

demand at any time partition of the thing owned in common, insofar as his share is
concerned.

Nevertheless, an agreement to keep the thing undivided for a certain period of time,
not exceeding ten years, shall be valid. This term may be extended by a new
agreement.

A donor or testator may prohibit partition for a period which shall not exceed twenty
years.

Neither shall there be partition when it is prohibited by law.

 No prescription shall run in favor of a co-owner or co-heir against his co-owners or
co-heirs so long as he expressly or impliedly recognizes the co-ownership.

None of the legal exceptions under Article 494 applies to the case at bar. Private respondents'
counterclaim for the partition of the subject properties was therefore entirely proper. However, during
the pre-trial proceedings, petitioners adopted the position that the subject properties were incapable
of physical partition. Initially, private respondents disputed this position. But after petitioners
inexplicably refused to abide by the pretrial order issued by respondent trial judge, and stubbornly
insisted on exercising an alleged pre-emptive right to purchase private respondents' shares at a
"reasonable price", private respondents relented and adopted petitioner's position that the partition of
the subject properties was not economically feasible, and, consequently, invoked the provisions of
Article 498 of the New Civil Code [Private respondents' "Motion To Allot Properties To Defendants
Or To Sell the Same Pursuant To Article 498 Of The Civil Code", Annex "D" of the Petition; Rollo,
pp. 46-49].

Inasmuch as the parties were in agreement as regards the fact that the subject properties should not
be partitioned, and private respondents continued to manifest their desire to terminate the co-
ownership arrangement between petitioners and themselves, respondent trial judge acted within his
jurisdiction when he issued his order dated February 4, 1981 requiring the parties to answer certain
questions for the purpose of determining whether or not the legal conditions for the applicability of
Article 498 of the New Civil Code were present in the case.

Art. 498 provides that:

Whenever the thing is essentially indivisible and the co-owners cannot agree that it
be alloted to one of them who shall indemnify the others, it shall be sold and its
proceeds distributed.

The sale of the property held in common referred to in the above article is resorted to when (1) the
right to partition the property among the co-owners is invoked by any of them but because of the
nature of the property, it cannot be subdivided or its subdivision [See Article 495 of the New Civil
Code] would prejudice the interests of the co-owners (See Section 5 of Rule 69 of the Revised Rules
of Court) and (2) the co-owners are not in agreement as to who among them shall be allotted or
assigned the entire property upon reimbursement of the shares of the other co-owners.

Petitioners herein did not have justifiable grounds to ignore the queries posed by respondent trial
judge and to insist that hearings be conducted in order to ascertain the reasonable price at which
they could purchase private respondents' pro-indiviso shares [Petitioners' "Compliance and Motion"
dated February 27, 1981, Annex "H" of the Petition; Rollo, pp. 57-60].

Since at this point in the case it became reasonably evident to respondent trial judge that the parties
could not agree on who among them would be allotted the subject properties, the Court finds that
respondent trial judge committed no grave abuse of discretion in ordering the holding of a public sale
for the subject properties (with the opening bid pegged at P12.50 per square meter), and the
distribution of the proceeds thereof amongst the co-owners, as provided under Article 498 of the
New Civil Code.

Contrary to petitioners' contention, there was no need for further hearings in the case because it is
apparent from the various allegations and admissions of the parties made during the pre-trial
proceedings, and in their respective pleadings, that the legal requisites for the application of Article
498 of the New Civil Code were present in the case. No factual issues remained to be litigated upon.
WHEREFORE, the present petition is DISMISSED for lack of merit. The temporary restraining order
issued by the Court is hereby LIFTED.

SO ORDERED.

G.R. No. L-22621             September 29, 1967

JOSE MARIA RAMIREZ, plaintiff-appellee,

vs.
JOSE EUGENIO RAMIREZ, RITA D. RAMIREZ, BELEN T. RAMIREZ, DAVID MARGOLIES,
MANUEL UY and SONS, INC., BANK OF THE PHILIPPINE ISLANDS, in its capacity as judicial
administrator of the Testate Estate of the late Jose Vivencio Ramirez, defendants-appellants,
ANGELA M. BUTTE, defendant-appellee.

Sycip, Salazar, Luna and Associates for plaintiff-appellee.

Ramirez and Ortigas for defendants-appellants.

CONCEPCION, C.J.:

Appeal by the defendants from a decision of the Court of First Instance of Manila.

Plaintiff, Jose Maria Ramirez, brought this action 1 against defendants Jose Eugenio Ramirez, Rita D.
Ramirez, Belen T. Ramirez, David Margolies, Manuel Uy & Sons, Inc., the Estate of the late Jose
Vivencio Ramirez represented by its judicial administrator, the Bank of the Philippine Islands, and
Angela M. Butte — hereinafter referred to collectively as defendants — for the partition of a parcel of
land situated at the Northwestern corner of Escolta street and Plaza Sta. Cruz, Manila — otherwise
known as Lot 1 of Block 2120 of the Cadastral Survey of Manila and more particularly described in
Transfer Certificate of Title No. 53946 of the Register of Deeds for said City — and belonging pro
indiviso to both parties, one-sixth (1/6) to the plaintiff and five-sixths (5/6) to the defendants.

Manuel Uy & Sons expressed its conformity to the partition, "if the same can be done without great
prejudice to the interests of the parties." Defendant Butte agreed to the partition prayed for. The
other defendants objected to the physical partition of the property in question, upon the theory that
said partition is "materially and legally" impossible and "would work great harm and prejudice to the
co-owners." By agreement of the parties the lower Court referred the matter to a Commission
composed of:

(1) Delfin Gawaran, Deputy Clerk of said court, as Chairman,

(2) Artemio U. Valencia, President of the Manila Board of Realtors, as commissioner for
plaintiff, and

(3) Ramon F. Cuervo, President of the Perpetual Investment Corporation, Inc., as

commissioner for defendants,

to determine whether the property is susceptible of partition, and submit a plan therefor, if feasible,
as well as to report thereon. Subsequently, the commissioners submitted their individual reports with
their respective plans for the segregation of plaintiff's share.
After due hearing, the Court rendered a decision declaring that plaintiff is entitled to the segregation
of his share, and directing that the property be partitioned in accordance with the plan submitted by
commissioner Valencia, and that the expenses incident thereto be paid by both parties
proportionately. Hence, this appeal by, the defendants, except Mrs. Butte. Appellants maintain that
the lower court has erred: 1) in holding that said property is legally susceptible of physical division; 2)
in accepting the recommendation of commissioner Valencia, instead of that of commissioner
Cuervo, or a proposal made by the very plaintiff; and 3) in not ordering that the incidental expenses
be borne exclusively by him.

We find no merit in the appeal.

With respect to the first alleged error, it is urged that a physical division of the property will cause
"inestimable damage" to the interest of the co-owners. No evidence, however, has been introduced,
or sought to be introduced, in support of this allegation. Moreover, the same is predicated upon the
assumption that a real estate suitable for commercial purposes — such as the one herein sought to
be partitioned — is likely to suffer a proportionately great diminution in value when its area becomes
too small. But, then, if plaintiff's share of 260.26 square meters were segregated from the property in
question, there would still remain a lot of 1,301.34 square meters for appellants herein and Mrs.
Butte. A real estate of this size, in the very heart of Manila, is not, however, inconsequential, in
comparison to that of the present property of the community. In other words, we do not believe that
its value would be impaired, on account of the segregation of plaintiff's share, to such an extent as to
warrant the conclusion that the property is indivisible.

Appellants argue that, instead of making the aforementioned segregation, plaintiff's share should be
sold to them. In support of this pretense, they cite the provision of Article 495 of our Civil Code, to
the effect that:

. . . Notwithstanding the provisions of the preceding article, the co-owners cannot demand a
physical division of the thing owned in common, when to do so would render it unserviceable
for the use for which it is intended. But the co-ownership may be terminated in accordance
with article 498.

They apparently assume, once again, that the alleged "inestimable damage" to be suffered by the
property, if plaintiff's share were segregated, is equivalent to rendering it "unserviceable for the use
for which it is intended." Independently of the fact that the minor premise of this syllogism — the
alleged "inestimable damage" — has not been established, the conclusion drawn by appellants does
not follow necessarily. Indeed, the record shows that there are two (2) buildings on the land in
question, namely: 1) a two-storey commercial building — known as "Sta. Cruz Building" — abutting
on the one (1) side, 2 on the Escolta, and, on the other 3 on Plaza Santa Cruz; and 2) a small two-
storey residential building, on the Northwestern end of the lot, and behind the first building, adjoining
the Estero de la Reina, which constitutes the Southwestern boundary of the property. There is
nothing to show that, after segregating plaintiff's share, the buildings left on the remaining 1,301.34
square meters, representing defendants' share, would be unserviceable, either for commercial or for
residential purposes. On the contrary, it seems obvious that plaintiff would not insist upon the
partition prayed for, if his share 4 were unserviceable for either — particularly the commercial —
purpose. In fact, every one of the aforementioned commissioners, including the one representing
defendants herein, recommended the segregation of plaintiff's share. The commissioners merely
failed to agree on the precise configuration thereof.

This brings us to the second issue raised by appellants: whether the lower court should have
adopted the plan submitted by their own commissioner, or "in not taking into consideration," at least,
a proposal made by plaintiff herein. In this connection, it appears that said commissioner 5
recommended that plaintiff's share be given a frontage of 6.14 lineal meters at Plaza Sta. Cruz,
whereas the commissioner for the Court 6 favored a frontage of 12.66 square meters at said Plaza;
that defendants' main objection to the plan recommended by commissioner Valencia 7 and adopted
by the lower court, is that it left behind the portion awarded to plaintiff, a lot of 169 square meters,
which would have to be divided among the defendants, should they later wish to have their individual
shares segregated; and that, in order to offset this objection, plaintiff expressed — in one of the pre-
trials held in the lower court and in order to "facilitate early termination" of the case — the willingness
"to buy from the other co-owners the remaining portion of the land behind his lot at P1,000 per
square meter." 1awphîl.nèt

The record does not show that this offer of the plaintiff had not been "taken into consideration" by the
lower court. Moreover, defendants had not accepted it. And neither do they accept it now, for they
would want the plaintiff to pay a price higher than that offered by him. Upon the other hand, the
disadvantage resulting to the defendants from the existence of said lot of 169 square meters, behind
that awarded to the plaintiff, is offset by the fact that the remaining portion of the land in question —
representing defendants' collective share — has, in addition to a frontage of around 40 meters on
Plaza Santa Cruz, a frontage of 24.13 meters on Escolta Street, which apart from being, admittedly,
the most valuable one, is totally denied to the plaintiff. Then, again the Cuervo plan giving plaintiff a
6.14 meters frontage of Plaza Sta. Cruz, goes all the way down to the Western end of the property,
the Estero de la Reina, and would require a partition of the residential building, on that part of the
property in question, which the very plaintiff says is indivisible, because it would render said building
"unserviceable for the purpose for which it is intended." 8

As regards the last alleged error, it is obvious that the segregation of plaintiff's share inures to the
benefit not only of the plaintiff, but, also, of the defendants, and that both should, consequently,
defray the incidental expenses.

WHEREFORE, the decision appealed from is hereby the costs of this instance against herein
defendants-appellants. It is so ordered.

G.R. No. 76351 October 29, 1993

VIRGILIO B. AGUILAR, Petitioner, vs. COURT OF APPEALS and SENEN

B. AGUILAR, Respondents.

Jose F. Manacop for petitioner. chanrobles virtual law library

Siruello, Muyco & Associates Law Office for private respondent.

BELLOSILLO, J.:

This is a petition for review on certiorari seeking to reverse and set aside the
Decision of the Court of Appeals in CA-GR CV No. 03933 declaring null and
void the orders of 23 and 26 April, 1979, the judgment by default of 26 July
1979, and the order of 22 October 1979 of the then Court of First Instance
of Rizal, Pasay City, Branch 30, and directing the trial court to set the case
for pre-trial conference. chanroblesvirtualawlibrary chanrobles virtual law library
Petitioner Virgilio and respondent Senen are brothers; Virgilio is the
youngest of seven (7) children of the late Maximiano Aguilar, while Senen is
the fifth. On 28 October 1969, the two brothers purchased a house and lot in
Parañaque where their father could spend and enjoy his remaining years in a
peaceful neighborhood. Initially, the brothers agreed that Virgilio's share in
the co-ownership was two-thirds while that of Senen was one-third. By
virtue of a written memorandum dated 23 February 1970, Virgilio and Senen
agreed that henceforth their interests in the house and lot should be equal,
with Senen assuming the remaining mortgage obligation of the original
owners with the Social Security System (SSS) in exchange for his possession
and enjoyment of the house together with their father. chanroblesvirtualawlibrary chanrobles virtual law library

Since Virgilio was then disqualified from obtaining a loan from SSS, the
brothers agreed that the deed of sale would be executed and the title
registered in the meantime in the name of Senen. It was further agreed that
Senen would take care of their father and his needs since Virgilio and his
family were staying in Cebu. chanroblesvirtualawlibrary chanrobles virtual law library

After Maximiano Aguilar died in 1974, petitioner demanded from private

respondent that the latter vacate the house and that the property be sold
and proceeds thereof divided among them. chanroblesvirtualawlibrary chanrobles virtual law library

Because of the refusal of respondent to give in to petitioner's demands, the

latter filed on 12 January 1979 an action to compel the sale of the house and
lot so that the they could divide the proceeds between them. chanroblesvirtualawlibrary chanrobles virtual law library

In his complaint, petitioner prayed that the proceeds of the sale, be divided
on the basis of two-thirds (2/3) in his favor and one-third (1/3) to
respondent. Petitioner also prayed for monthly rentals for the use of the
house by respondent after their father died. chanroblesvirtualawlibrary chanrobles virtual law library

In his answer with counterclaim, respondent alleged that he had no

objection to the sale as long as the best selling price could be obtained; that
if the sale would be effected, the proceeds thereof should be divided equally;
and, that being a co-owner, he was entitled to the use and enjoyment of the
property.chanroblesvirtualawlibrary chanrobles virtual law library

Upon issues being joined, the case was set for pre-trial on 26 April 1979 with
the lawyers of both parties notified of the pre-trial, and served with the pre-
trial order, with private respondent executing a special power of attorney to
his lawyer to appear at the pre-trial and enter into any amicable settlement
in his behalf. 1 chanrobles virtual law library
On 20 April 1979, Atty. Manuel S. Tonogbanua, counsel for respondent, filed
a motion to cancel pre-trial on the ground that he would be accompanying
his wife to Dumaguete City where she would be a principal sponsor in a
wedding. chanroblesvirtualawlibrary chanrobles virtual law library

On 23 April 1979, finding the reasons of counsel to be without merit, the

trial court denied the motion and directed that the pre-trial should continue
as scheduled. chanroblesvirtualawlibrary chanrobles virtual law library

When the case was called for pre-trial as scheduled on 26 April 1979,
plaintiff and his counsel appeared. Defendant did not appear; neither his
counsel in whose favor he executed a special power of attorney to represent
him at the pre-trial. Consequently, the trial court, on motion of plaintiff,
declared defendant as in default and ordered reception of plaintiff's evidence
ex parte.chanroblesvirtualawlibrary chanrobles virtual law library

On 7 May 1979, defendant through counsel filed an omnibus motion to

reconsider the order of default and to defer reception of evidence. The trial
court denied the motion and plaintiff presented his evidence. chanroblesvirtualawlibrary chanrobles virtual law library

On 26 July 1979, rendering judgment by default against defendant, the trial

court found him and plaintiff to be co-owners of the house and lot, in equal
shares on the basis of their written agreement. However, it ruled that
plaintiff has been deprived of his participation in the property by defendant's
continued enjoyment of the house and lot, free of rent, despite demands for
rentals and continued maneuvers of defendants, to delay partition. The trial
court also upheld the right of plaintiff as co-owner to demand partition.
Since plaintiff could not agree to the amount offered by defendant for the
former's share, the trial court held that this property should be sold to a
third person and the proceeds divided equally between the parties. chanroblesvirtualawlibrary chanrobles virtual law library

The trial court likewise ordered defendant to vacate the property and pay
plaintiff P1,200.00 as rentals 2 from January 1975 up to the date of decision
plus interest from the time the action was filed. chanroblesvirtualawlibrary chanrobles virtual law library

On 17 September 1979, defendant filed an omnibus motion for new trial but
on 22 October 1979 the trial court denied the motion. chanroblesvirtualawlibrary chanrobles virtual law library

Defendant sought relief from the Court of Appeals praying that the following
orders and decision of the trial court be set aside: (a) the order of 23 April
1970 denying defendants motion for postponement of the pre-trial set on 26
April 1979; (b) the order of 26 April 1979 declaring him in default and
authorizing plaintiff to present his evidence ex-parte; (e) the default
judgment of 26 July 1979; and, (d) the order dated 22 October 1979
denying his omnibus motion for new trial. chanroblesvirtualawlibrary chanrobles virtual law library

On 16 October 1986, the Court of Appeals set aside the order of the trial
court of 26 April 1979 as well as the assailed judgment rendered by default.,
The appellate court found the explanation of counsel for defendant in his
motion to cancel pre-trial as satisfactory and devoid of a manifest intention
to delay the disposition of the case. It also ruled that the trial court should
have granted the motion for postponement filed by counsel for defendant
who should not have been declared as in default for the absence of his
counsel.chanroblesvirtualawlibrary chanrobles virtual law library

Petitioner now comes to us alleging that the Court of Appeals erred (1) in
not holding that the motion of defendant through counsel to cancel the pre-
trial was dilatory in character and (2) in remanding the case to the trial court
for pre-trial and trial. chanroblesvirtualawlibrary chanrobles virtual law library

The issues to be resolved are whether the trial court correctly declared
respondent as in default for his failure to appear at the pre-trial and in
allowing petitioner to present his evidence ex-parte, and whether the trial
court correctly rendered the default judgment against respondent. chanroblesvirtualawlibrary chanrobles virtual law library

We find merit in the petition. chanroblesvirtualawlibrary chanrobles virtual law library

As regards the first issue, the law is clear that the appearance of parties at
the pre-trial is mandatory. 3 A party who fails to appear at a pre-trial
conference may be non-suited or considered as in default. 4 In the case at
bar, where private respondent and counsel failed to appear at the scheduled
pre-trial, the trial, court has authority to declare respondent in default. 5 chanrobles virtual law library

Although respondent's counsel filed a motion to postpone pre-trial hearing,

the grant or denial thereof is within the sound discretion of the trial court,
which should take into account two factors in the grant or denial of motions
for postponement, namely: (a) the reason for the postponement and (b) the
merits of the case of movant. 6 chanrobles virtual law library

In the instant case, the trial court found the reason stated in the motion of
counsel for respondent to cancel the pre-trial to be without merit. Counsel's
explanation that he had to go to by boat as early as 25 March 1979 to fetch
his wife and accompany her to a wedding in Dumaguete City on 27 April
1979 where she was one of the principal sponsors, cannot be accepted. We
find it insufficient to justify postponement of the pre-trial, and the Court of
Appeals did not act wisely in overruling the denial. We sustain the trial court
and rule that it did not abuse its discretion in denying the postponement for
lack of merit. Certainly, to warrant a postponement of a mandatory process
as pre-trial would require much more than mere attendance in a social
function. It is time indeed we emphasize that there should be much more
than mere perfunctory treatment of the pre-trial procedure. Its observance
must be taken seriously if it is to attain its objective, i.e., the speedy and
inexpensive disposition of cases. chanroblesvirtualawlibrary chanrobles virtual law library

Moreover, the trial court denied the motion for postponement three (3) days
before the scheduled pre-trial. If indeed, counsel for respondent could not
attend the pre-trial on the scheduled date, respondent at least should have
personally appeared in order not to be declared as in default. But, since
nobody appeared for him, the order of the trial court declaring him as in
default and directing the presentation of petitioner's evidence ex parte was
proper. 7
chanrobles virtual law library

With regard to the merits of the judgment of the trial court by default, which
respondent appellate court did not touch upon in resolving the appeal, the
Court holds that on the basis of the pleadings of the parties and the
evidence presented ex parte, petitioner and respondents are co-owners of
subject house and lot in equal shares; either one of them may demand the
sale of the house and lot at any time and the other cannot object to such
demand; thereafter the proceeds of the sale shall be divided equally
according to their respective interests. chanroblesvirtualawlibrary chanrobles virtual law library

Private respondent and his family refuse to pay monthly rentals to petitioner
from the time their father died in 1975 and to vacate the house so that it
can be sold to third persons. Petitioner alleges that respondent's continued
stay in the property hinders its disposal to the prejudice of petitioner. On the
part of petitioner, he claims that he should be paid two-thirds (2/3) of a
monthly rental of P2,400.00 or the sum of P1,600.00. chanroblesvirtualawlibrary chanrobles virtual law library

In resolving the dispute, the trial court ordered respondent to vacate the
property so that it could be sold to third persons and the proceeds divided
between them equally, and for respondent to pay petitioner one-half (1/2) of
P2,400.00 or the sum of P1,200.00 as monthly rental, conformably with
their stipulated sharing reflected in their written agreement. chanroblesvirtualawlibrary chanrobles virtual law library

We uphold the trial court in ruling in favor of petitioner, except as to the

effectivity of the payment of monthly rentals by respondent as co-owner
which we here declare to commence only after the trial court ordered
respondent to vacate in accordance with its order of 26 July 1979. chanroblesvirtualawlibrary chanrobles virtual law library

Article 494 of the Civil Code provides that no co-owner shall be obliged to
remain in the co-ownership, and that each co-owner may demand at any
time partition of the thing owned in common insofar as his share is
concerned. Corollary to this rule, Art. 498 of the Code states that whenever
the thing is essentially, indivisible and the co-owners cannot agree that it be,
allotted to one of them who shall indemnify the others, it shall be sold and
its proceeds accordingly distributed. This is resorted to (1) when the right to
partition the property is invoked by any of the co-owners but because of the
nature of the property it cannot be subdivided or its subdivision would
prejudice the interests of the co-owners, and (b) the co-owners are not in
agreement as to who among them shall be allotted or assigned the entire
property upon proper reimbursement of the co-owners. In one case, 8 this
Court upheld the order of the trial court directing the holding of a public sale
of the properties owned in common pursuant to Art. 498 of the Civil
Code.chanroblesvirtualawlibrary chanrobles virtual law library

However, being a co-owner respondent has the right to use the house and
lot without paying any compensation to petitioner, as he may use the
property owned in common long as it is in accordance with the purpose for
which it is intended and in a manner not injurious to the interest of the other
co-owners. 9 Each co-owner of property held pro indiviso exercises his rights
over the whole property and may use and enjoy the same with no other
limitation than that he shall not injure the interests of his co-owners, the
reason being that until a division is made, the respective share of each
cannot be determined and every co-owner exercises, together with his co-
participants joint ownership over the pro indiviso property, in addition to his
use and enjoyment of the
10
same. chanrobles virtual law library

Since petitioner has decided to enforce his right in court to end the co-
ownership of the house and lot and respondent has not refuted the
allegation that he has been preventing the sale of the property by his
continued occupancy of the premises, justice and equity demand that
respondent and his family vacate the property so that the sale can be
effected immediately. In fairness to petitioner, respondent should pay a
rental of P1,200.00 per month, with legal interest; from the time the trial
court ordered him to vacate, for the use and enjoyment of the other half of
the property appertaining to petitioner. chanroblesvirtualawlibrary chanrobles virtual law library

When petitioner filed an action to compel the sale of the property and the
trial court granted the petition and ordered the ejectment of respondent, the
co-ownership was deemed terminated and the right to enjoy the possession
jointly also ceased. Thereafter, the continued stay of respondent and his
family in the house prejudiced the interest of petitioner as the property
should have been sold and the proceeds divided equally between them. To
this extent and from then on, respondent should be held liable for monthly
rentals until he and his family vacate. chanroblesvirtualawlibrary chanrobles virtual law library

WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of

Appeals dated 16 October 1986 is REVERSED and SET ASIDE. The decision
of the trial court in Civil Case No. 69.12-P dated 16 July 1979 is
REINSTATED, with the modification that respondent Senen B. Aguilar is
ordered to vacate the premises in question within ninety (90) days from
receipt of this and to pay petitioner Virgilio B. Aguilar a monthly rental of
P1,200.00 with interest at the legal rate from the time he received the
decision of the trial court directing him to vacate until he effectively leaves
the premises. chanroblesvirtualawlibrary chanrobles virtual law library

The trial court is further directed to take immediate steps to implement this
decision conformably with Art. 498 of the Civil Code and the Rules of Court.
This decision is final and executory. chanroblesvirtualawlibrary chanrobles virtual law library

SO ORDERED.

G.R. No. L-44426 February 25, 1982

SULPICIO CARVAJAL, petitioner,

vs.
THE HONORABLE COURT OF APPEALS ** and EUTIQUIANO CAMARILLO and LIBERATA CACABELOS,
respondents.

TEEHANKEE, J.:

The Court reverses the appellate court's decision affirming in toto the judgment of the Court of First
Instance of Pangasinan, declaring plaintiffs-respondents the lawful owners of the land in question
and ordering defendant (herein petitioner) to pay P30.00 monthly rentals until possession of the
property is surrendered to respondents, for unless there is partition of the estate of the deceased,
either extra judicially or by court order, a co-heir cannot validly claim title to a specific portion of the
estate and send the same. Title to any specific part of the estate does not automatically pass to the
heirs by the mere death of the decedent and the effect of any disposition by a co-heir before partition
shall be limited to the portion which may be allotted to him upon the dissolution of the communal
estate. What a co-heir can validly dispose of is only his hereditary rights.

Private respondents, who are husband and wife, had instituted a complaint before the Court of First
Instance for ejectment and recovery of possession against herein petitioner, docketed as Civil Case
No. T-1163, alleging that they are the owners in fee simple of a parcel of commercial land, pro-
indiviso, consisting of 150.8 sq. meters, more or less, situated in Poblacion, Tayug, Pangasinan,
having bought the same from Evaristo G. Espique by virtue of a Deed of Absolute Sale executed on
April 15, 1964. They also demand that petitioner pay a monthly rental for the use of the property all
P40.00 until the property is surrendered to them.
The property in question is a 1/5 portion of a 754 sq. qmeter land originally owned by Hermogenes
Espique and his wife, both dead. After their death their five children, namely: Maria, Evaristo,
Faustina, Estefanio and Tropinia succeeded them in the ownership of the whole lot.

Petitioner presently occupies two-fifths of the whole lot inherited pro-indiviso by the Espique children.
Petitioner alleges that he purchased the northern one-half portion of the lot he is occupying (which is
also claimed by respondents) from Estefanio Espique and that the southern one-half portion of the
lot he is occupying (which is also claimed by respondents) from Estefanio Espique and that the
southern one-half portion is leased to him by Tropinia Espique. The land subject of the controversy
is the most southern portion of the whole lot inherited by the Espique children which petitioner claims
he had bought from Estefanio on April 26, 1967 and which respondents claim they had bough from
Evaristo on April 15, 1964.

Both sales were made while the petition for partition filed by Evaristo Espique was still pending
before the Court of First Instance of Pangasinan, docketed therein as Civil Case No. T-966.

The Court finds merit in the petition for setting aside respondent appellate court's decision finding for
respondents-plaintiffs, for the following considerations:

The action for ejectment and recovery of possession instituted by herein respondents in the lower
court is premature, for what must be settled frist is the action for partition. Unless a project of
partition is effected, each heir cannot claim ownership over a definite portion of the inheritance.
Without partition, either by agreement between the parties of by judicial proceeding, a co-heir cannot
dispose of a specific portion of the estate. For where there are two or more heirs, the whole estate
such heirs. 1 Upon the death of a person, each of his heirs becomes the undivided owner of the whole
estate left wtih respect to the part of portion which might be adjudicated to him, a community of ownership
being thus formed among the co-owners of the estate or co-heirs while it remains undivided. 2

While under Article 493 of the New Civil Code, each co-owner shall have the full ownership of his part and
of the fruits and benefits pertaining thereto and he may alienate, assign or mortgage it, and even
substitute another person in its enjoyment, the effect of the alienation or the mortgage with respect to the
co-owners, shall be limited, by mandate of the same article, to the portion which may be allotted to him in
the division upon the termination of the co-ownership. He has no right to sell or alienate a concrete,
specific, or determinate part of the thing in common to the exclusion of the other co-owners because his
right over the thing is represented by an abstract or Ideal portion without any physical adjudication. 3 An
individual co- owner cannot adjudicate to himself or claim title to any definite portion of the land or thing
owned in common until its actual partition by agreement or judicial decree. Prior to that time all that the
co-owner has is an Ideal or abstract quota or proportionate share in the entire thing owned in common by
all the co-owners. 4 What a co owner may dispose of is only his undivided aliquot share, which shall be
limited to the portion that may be allotted to him upon partition. 5 Before partition, a co-heir can only sell
his successional rights. 6

In the case at bar, the fact that the sale executed by Evaristo G. qqqEspique in favor of respondents
and the sale executed by Estefanio Espique in favor of petitioner were made before the partition of
the property among the co-heirs does not annul or invalidate the deeds of sale and both sales are
valid. However, the interests thereby acquired by petitioner and respondents are limited only to the
parts that may be ultimately assigned to Estefanio and Evaristo, respectively, upon the partition of
the estate 7 subject to provisions on subrogation of the other co-heirs to the rights of the stranger-
purchaser provided in Article 1088 of the Civil Code. 8 Respondent court's ruling that the sale by Estefanio
in favor of petitioner is not valid because of lack of notice to his co-heirs is erroneous. Such notice in
writing is not a requisite for the validity of the sale. Its purpose is merely to apprise the co-heirs of the sale
of a portion of the estate, for them to exercise their preferential right of subrogation under Article 1088 of
the New Civil Code, that is, the right to redeem the property sold within one month from the time they
were notified in writing of the sale by a co-heir. (There is nothing in the record to indicate that such right of
subrogation was in effect sought to be exercised upon the co-heirs' having learned of the sale, which is
not in issue here.)

Thus, respondents have no right to eject petitioners nor demand payment of rentals for the use of
the property in dispute. Until the partition of the estate is ordered by the Court of First Instance of
Pangasinan in the pending partition proceedings and the share of each co-heir is determined by
metes and bounds, neither petitioner nor respondents can rightfully claim that what they bought is
the part in dispute.

Accordingly, respondent court's judgment is set aside and judgment is hereby rendered dismissing
the complaint of respondents-plaintiffs in the court below. No pronouncement as to costs.

DOLORES LAHORA VDA. DE CASTRO, ARSENIO DE CASTRO, JR.,

WILFREDO DE CASTRO, IRINEO DE CASTRO and VIRGINIA DE
CASTRO ALEJANDRO, (in substitution for the deceased defendant-
appellant ARSENIO DE CASTRO, SR.)., Petitioners, vs. GREGORIO
ATIENZA, Respondent.

Arsenio de Castro, Jr. and F.T. Papa for petitioners.

Dakila Castro and Z.D. de Mesa for respondent.

TEEHANKEE, J.:

The Court rejects petitioners' appeal as without merit and affirms the
judgment of the appellate court. Petitioners' predecessor-in-interest as co-
owner of an undivided one-half interest in the fishpond could validly lease
his interest to a third party, respondent Atienza, independently of his co-
owner (although said co-owner had also leased his other undivided one-half
interest to the same third party) and could likewise by mutual agreement
independently cancel his lease agreement with said third party. Said
predecessor-in-interest (and petitioners who have substituted him as his
heirs) therefore stands liable on his express undertaking to refund the
advance rental paid to him by the lessee on the cancelled lease and cannot
invoke the non-cancellation of the co-owner's lease to elude such liability.
virtual law library
chanroblesvirtualawlibrary chanrobles

The Court of Appeals, in its decision affirming in toto the judgment of the
Manila court of first instance ordering therein defendant-appellant Arsenio de
Castro, Sr. (now deceased and substituted by above-named petitioners as
his heirs) "to return to the plaintiff (respondent) Gregorio Atienza the sum
P2,500.00 with legal interest from the date of the filing of complaint until
fully paid plus the sum of P250.00 as attorney's fees and the costs of the
suit", found the following facts to undisputed:
On January 24, 1956 the brothers Tomas de Castro and Arsenio de Castro,
Sr. leased to plaintiff a fishpond containing an area of 26 hectares situated
in Polo, Bulacan and forming part of a bigger parcel of land covered by
Transfer Certificate of Title No. 196450 of the registry of the property of
Bulacan. The lessors are co-owners in equal shares of the leased
property.chanroblesvirtualawlibrary chanrobles virtual law library

According to the contract of lease (Exh. 1) the term of the lease was for five
years from January 24, 1956 at a rental of P5,000 a year, the first year's
rental to be paid on February 1, 1956, the second on February 1, 1957 and
the rental for the last three years on February 1, 1958. The first year's
rental was paid on time. chanroblesvirtualawlibrary chanrobles virtual law library

In the meantime, Tomas de Castro died. chanroblesvirtualawlibrary chanrobles virtual law library

In the month of November, 1956, plaintiff as lessee and defendant Arsenio

de Castro, Sr. as one of the lessors, agreed to set aside and annul the
contract of lease and for this purpose an agreement (Exh. A) was signed by
them, Exhibit A as signed by plaintiff and defendant shows that Felisa Cruz
Vda. de Castro, widow of Tomas de Castro, was intended to be made a party
thereof in her capacity as representative of the heirs of Tomas Castro. chanroblesvirtualawlibrary chanrobles virtual law library

Condition No. 2 of Exhibit A reads as follows: chanrobles virtual law library

"2. Na sa pamamagitan nito ay pinawawalang kabuluhan namin ang

nasabing kasulatan at nagkasundo kami na ang bawat isa sa amin ni Arsenio
de Castro at Felisa Cruz Vda. de Castro ay isauli kay GREGORIO ATIENZA
ang tig P2,500.00 o kabuuang halagang P5,000.00 na paunang naibigay nito
alinsunod sa nasabing kasulatan; na ang nasabing tig P2,500.00 ay isasauli
ng bawat isa sa amin sa o bago dumating ang Dec. 30, 1956." chanrobles virtual law library

Felisa Cruz Vda. de Castro refused to sign Exhibit A. Defendant did not pay
the P2,500.00 which under the above-quoted paragraph of Exhibit A, he
should have paid on December 30, 1956. Demand for payment was made by
plaintiff's counsel on January 7, 1957 but to no avail, hence the present
action.

On the conflicting contentions between the parties as to who between them

would attend to securing the signature of Mrs. Felisa Cruz Vda. de Castro
(widow of Tomas de Castro) to the agreement of cancellation of the lease
with respondent Atienza, the appellate court found that "the testimony of
the defendant (Arsenio de Castro, Sr.) ... supports the contention of the
plaintiff (Atienza) "that it was the defendant Arsenio who was interested and
undertook to do so, citing Arsenio's own declaration that "I agreed to sign
this document (referring to the cancellation) because of my desire to cancel
our original agreement" and that his purpose in obtaining the cancellation of
said lease agreement with plaintiff Atienza was "(B)ecause I had the
intention of having said fishpond leased to other persons and I cannot lease
it to third parties unless I can secure the signature of Felisa Vda. de
Castro." chanrobles virtual law library

The appellate court thus held in effect that as Arsenio "was the one
interested in cancelling the lease (Exh. 1), it stands to reason that he most
probably undertook to obtain the signature of Mrs. Castro [widow and
successor-in-interest of his brother Tomas]" and that he could not invoke his
own failure to obtain such signature to elude his own undertaking and
liability to refund respondent (plaintiff) his share of the rental paid in
advance by respondent on the cancelled lease in the sum of P2,500.00. chanroblesvirtualawlibrary chanrobles virtual law library

The appellate court furthermore correctly held that the consent or

concurrence of Felisa Vda. de Castro (as co-owner in succession of Tomas)
was not an essential condition to the validity and effectivity of the
agreement of cancellation of the lease (Exhibit A) as between Arsenio and
respondent-lessee, contrary to petitioners' claim, holding that "(S)ince there
is no specific provision in Exhibit A supporting defendant's claim, we are not
prepared to supply such condition unless the same can be deduced from
other evidence or unless the terms of Exhibit A cannot be performed by
plaintiff and defendant without Mrs. Castro being bound as a party thereto."
virtual law library
chanrobles

The issue is simply reduced to whether Arsenio as co-owner of the fishpond

owned pro-indiviso by him with his brother Tomas (succeeded by Felisa Vda.
de Castro) could validly lease his half-interest to a third party (respondent
Atienza) independently of his
co-owner, and in case his co-owner also leased his other half interest to the
same third party, whether Arsenio could cancel his own lease agreement
with said third party? chanrobles virtual law library

The appellate court correctly resolved the issue thus: "Our view of the
contract of lease Exhibit 1 is that each of the Castro brothers, leased his
undivided one-half interest in the fishpond they owned in common to the
plaintiff. Could one of them have validly leased his interest without the other
co-owner leasing his own? The answer to this is given by appellant in his
own brief (p. 14) when he said that it would result in a partnership between
the lessee and the owner of the other undivided half. If the lease could be
entered into partially by one of the co-owners, insofar as his interest is
concerned, then the lease, Exhibit 1, can also be cancelled partially as
between plaintiff and defendant. Therefore, we conclude that the consent of
Mrs. Felisa Cruz Vda. de Castro is not essential for the cancellation of the
lease of defendant's one-half undivided share in the fishpond to plaintiff." chanrobles virtual law library

The appellate court's judgment is fully supported by the Civil Code provisions
on the rights and prerogatives of co-owners, and specifically by Article 493
which expressly provides that

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

ACCORDINGLY, the appealed judgment is hereby affirmed with costs against

petitioners.

EN BANC

G.R. No. L-24419   July 15, 1968

LEONORA ESTOQUE, Plaintiff-Appellant, vs. ELENA M. PAJIMULA,

assisted by her husband CIRIACO PAJIMULA, Defendants-Appellees.

Jesus P. Mapanao for plaintiff-appellant.

Vergara and Dayot for defendants-appellees.

REYES, J.B.L., J.: chanrobles virtual law library

Direct appeal from an order of the Court of First Instance of La Union, in its
Civil Case No. 1990, granting a motion to dismiss the complaint for legal
redemption by a co-owner (retracto legal de comuneros) on account of
failure to state a cause of action. chanroblesvirtualawlibrary chanrobles virtual law library

The basic facts and issues are stated in the decision appealed from, as
follows:

Plaintiff based her complaint for legal redemption on a claim that she is a co-
owner of Lot No. 802, for having purchased 1/3 portion thereof, containing
an area of 640 square meters as evidenced by a deed of sale, Annex "A",
which was executed on October 28, 1951 by Crispina Perez de Aquitania,
one of the co-owners, in her favor. chanroblesvirtualawlibrary chanrobles virtual law library
On the other hand, the defendant, who on December 30, 1959 acquired the
other 2/3 portion of Lot No. 802 from Crispina Aquitania and her children,
claimed that the plaintiff bought the 1/3 southeastern portion, which is
definitely identified and segregated, hence there existed no co-ownership at
the time and after said plaintiff bought the aforesaid portion, upon which
right of legal redemption can be exercised or taken advantage of. chanroblesvirtualawlibrary chanrobles virtual law library

From the complaint, it would appear that Lot No. 802 of the Cadastral
survey of Rosario, covered by original certificate of title No. RO-2720 (N.A.)
was originally owned by the late spouses, Rosendo Perez and Fortunata
Bernal, who were survived by her children, namely, Crispina Perez, Lorenzo
Perez and Ricardo Perez. Ricardo Perez is also now dead. On October 28,
1951, Crispina P. Vda. de Aquitania sold her right and participation in Lot
No. 802 consisting of 1/3 portion with an area of 640 square meters to
Leonora Estoque (Annex A of the complaint). On October 29, 1951, Lorenzo
Perez, Crispina Perez and Emilia P. Posadas, widow of her deceased
husband, Ricardo Perez for herself and in behalf of her minor children,
Gumersindo, Raquel, Emilio and Ricardo, Jr., executed a deed of
extrajudicial settlement wherein Lorenzo Perez, Emilia P. Posadas and her
minor children assigned all their right, interest and participation in Lot No.
802 to Crispina Perez (Annex B of the complaint). On December 30, 1959,
Crispina Perez and her children Rosita Aquitania Belmonte, Remedios
Aquitania Misa, Manuel Aquitania, Sergio Aquitania and Aurora Aquitania
sold to Elena Pajimula, the remaining 2/3 western portion of Lot No. 802
with an area of 958 square meters (Annex C of the complaint). chanroblesvirtualawlibrary chanrobles virtual law library

The action of the plaintiff is premised on the claim of co-ownership. From the
deed of sale executed in favor of the plaintiff, it can be seen that the 1/3
portion sold to plaintiff is definitely identified as the 1/3 portion located on
the southeastern part of Lot No. 802 and specifically bounded on the north
by De Guzman Street, on the east by Posadas Street, on the south by Perez
Street, and on the west by remaining portion of the same lot, which
contained an area of 640 square meters. And in the deed of sale executed
by Crispina Perez and her children in favor of defendant Elena Pajimula over
the remaining 2/3 portion of Lot No. 802, said portion is identified as the
western portion of Lot No. 802 which is bounded on the north by De Guzman
Street, on the east by properties of Leonarda Estoque, on the south by the
national road and on the west by Lots Nos. 799 and 801, containing an area
of 598 square meters.

The appellant's stand is that the deed in her favor was inoperative to convey
the southeastern third of Lot 802 of the Rosario Cadastre notwithstanding
the description in the deed itself, for the reason that the vendor, being a
mere co-owner, had no right to sell any definite portion of the land held in
common but could only transmit her undivided share, since the specific
portion corresponding to the selling co-owner is not known until partition
takes place (Lopez vs. Ilustre, 5 Phil. 567; Ramirez vs. Bautista, 14 Phil.
528). From this premise, the appellant argues that the sale in her favor,
although describing a definite area, should be construed as having conveyed
only the undivided 1/3 interest in Lot 802 owned at the time by the vendor,
Crispina Perez Vda. de Aquitania. Wherefore, when the next day said vendor
acquired the 2/3 interest of her two other co-owners, Lot 802 became the
common property of appellant and Crispina Perez. Therefore, appellant
argues, when Crispina sold the rest of the property to appellee Pajimula
spouses, the former was selling an undivided 2/3 that appellant, as co-
owner, was entitled to redeem, pursuant to Article 1620 of the New Civil
Code.

ART. 1620. A co-owner of a thing may exercise the right of redemption in

case the shares of all the other co-owners or of any of them, are sold to a
third person. If the price of the alienation is grossly excessive the
redemptioner shall pay only a reasonable one. chanroblesvirtualawlibrary chanrobles virtual law library

Should two or more co-owners desire to exercise the right of redemption,

they may only do so in proportion to the share they may respectively have
in the thing owned in common.

The lower court, upon motion of defendant, dismissed the complaint, holding
that the deeds of sale show that the lot acquired by plaintiff Estoque was
different from that of the defendants Pajimula; hence they never became co-
owners, and the alleged right of legal redemption was not proper. Estoque
appealed. chanroblesvirtualawlibrary chanrobles virtual law library

We find no error in the order of dismissal, for the facts pleaded negate the
claim that appellant Estoque ever became a co-owner of appellees
Pajimula. chanroblesvirtualawlibrary chanrobles virtual law library

(1) The deed of sale to Estoque (Annex A of the complaint) clearly specifies
the object sold as the southeastern third portion of Lot 802 of the Rosario
Cadastre, with an area of 840 square meters, more or less. Granting that
the seller, Crispina Perez Vda. de Aquitania could not have sold this
particular portion of the lot owned in common by her and her two brothers,
Lorenzo and Ricardo Perez, by no means does it follow that she intended to
sell to appellant Estoque her 1/3 undivided interest in the lot forementioned.
There is nothing in the deed of sale to justify such inference. That the seller
could have validly sold her one-third undivided interest to appellant is no
proof that she did choose to sell the same. Ab posse ad actu non valet
illatio.
chanrobles virtual law library
(2) While on the date of the sale to Estoque (Annex A) said contract may
have been ineffective, for lack of power in the vendor to sell the specific
portion described in the deed, the transaction was validated and became
fully effective when the next day (October 29, 1951) the vendor, Crispina
Perez, acquired the entire interest of her remaining co-owners (Annex B)
and thereby became the sole owner of Lot No. 802 of the Rosario Cadastral
survey (Llacer vs. Mu�oz, 12 Phil. 328). Article 1434 of the Civil Code of the
Philippines clearly prescribes that - .

When a person who is not the owner of a thing sells or alienates and delivers
it, and later the seller or grantor acquires title thereto, such title passes by
operation of law to the buyer or grantee."

Pursuant to this rule, appellant Estoque became the actual owner of the
southeastern third of lot 802 on October 29, 1951. Wherefore, she never
acquired an undivided interest in lot 802. And when eight years later
Crispina Perez sold to the appellees Pajimula the western two-thirds of the
same lot, appellant did not acquire a right to redeem the property thus sold,
since their respective portions were distinct and separate. chanroblesvirtualawlibrary chanrobles virtual law library

IN VIEW OF THE FOREGOING, the appealed order of dismissal is affirmed.

Costs against appellant Estoque.

G.R. No. 139524               October 12, 2000

PHILIP C. SANTOS and HEIRS OF ELISEO M. SANTOS, petitioners,

vs.
LADISLAO M. SANTOS represented herein by his Attorney-In-Fact NOE M. SANTOS,
respondents.

DECISION

GONZAGA-REYES, J.:

Before us is a petition for review on certiorari assailing the January 8, 1999 Decision of the 1

Court of Appeals in CA-G.R. CV No. 48576 which reversed the decision of the Regional Trial
2 3

Court of San Mateo, Rizal (Branch 76) and which declared Ladislao M. Santos and Eliseo M.
4

Santos as entitled to ½ pro indiviso shares in the property of Isidra M. Santos. The dispositive
portion of the assailed Decision reads:

"IN THE LIGHT OF ALL THE FOREGOING, the appeal is granted. The Decision appealed
from is REVERSED. Judgment is hereby rendered in favor of the Appellant and against the
Appellees as follows:
 1. Tax Declaration Nos. 04-0566 and 04-0016, Exhibits "8" and "9", under the name of
Appellee Philip Santos and the "Deed of Sale of Unregistered Residential Land"
(Exhibit "15’) are hereby declared inefficacious insofar as the undivided one-half portion
of the Appellant in the Isidra property is concerned;

2. The Appellant and the Appellee Eliseo Santos are hereby declared each entitled to ½
pro indiviso shares in the Isidra property;

3. The Court a quo is hereby ordered to effect the partition of the subject lot conformably
with Rule 69 of the 1997 Rules of Civil procedure.

Without pronouncement as to costs.

SO ORDERED."

The following facts as narrated by the Court of Appeals are undisputed:

On May 13, 1993, Ladislao Santos, a resident in the United States of America, the Appellant in
the present recourse, through his Attorney-in-fact, Noe Santos, filed a complaint, with the
Regional Trial Court of Rizal, against his brother, Eliseo Santos and the latter’s son, Philip
Santos, the Appellees in the present recourse, for "Judicial Partition".

The Appellant averred, inter alia, in his complaint, that, when his and Eliseo Santos’ sister,
Isidra Santos, died intestate on April 1, 1967, without any issue, they inherited her parcel of land
covered by Tax Declaration 1115, issued by the Provincial Assessor of Rizal located along
General Luna Street, Gitnangbayan, San Mateo, Rizal; that, sometime, in February 1, 1993, the
Appellant discovered that Tax Declaration No. 1115 had been cancelled by Tax Declaration No.
7892, under the name of his nephew, Appellee Philip Santos, and that, on December 16, 1980,
Virgilio Santos executed a "Deed of Absolute Sale of Unregistered Residential Land" on the
basis of which Tax Declaration No. 04-0016 was issued to the Appellee Philip Santos. The
Appellant prayed the Court that judgment be rendered in his favor as follows:

"WHEREFORE, it is most respectfully prayed of this Honorable Court that after due hearing
judgment be rendered as follows:

(1) Ordering the division of the intestate estate of the late Isidra Santos between petitioner
and respondent Eliseo M. Santos;

(2) Declaring Tax Declaration No. 04-0015 in the name of Virgilio Santos as null and
void;

(3) Declaring the Deed of Sale dated December 11, 1980, executed by Virgilio Santos in
favor of Philip Santos as null and void;

(4) Declaring Tax Declaration No. 04-00161 (sic) in the name of Philip Santos as null
and void;
Petitioner prays for other relief which this Court may deem just and equitable in the premises."
(at page 3, Records)

In their Answer to the complaint, the Appellees admitted that, upon the demise of Isidra Santos,
the Appellant and the Appellee Eliseo Santos inherited the said property and the latter’s share in
Lot 1522 of the San Mateo Cadastre, which they and their sister, Isidra Santos, inherited from
their father, Bonifacio Santos who died before the outbreak of the Second World War but
insisted that the Appellant and the Appellee Eliseo Santos had agreed, in 1969, after the death of
Isidra Santos, on April 1, 1967, to partition Lot 1522, under which a portion of Lot 1522, with an
area of 3,387 square meters, was adjudicated to the Appellant, and a portion of the same lot, with
an area of 3,000 square meters, was conveyed to the Appellee Eliseo Santos and the parcel of
land left by Isidra Santos was conveyed by Appellee Eliseo Santos to Virgilio Santos, who, from
infancy had been under the care of Isidra Santos, to approximately equalize the share of the
Appellee Eliseo Santos in the estate of Bonifacio Santos. The Appellees further averred that
Appellees had acquired the Isidra property by acquisitive prescription.

Neither Appellant Ladislao Santos nor Appellee Eliseo Santos testified in the Court a quo.
Although the Appellee Eliseo Santos was present during the proceeding, he did not testify
anymore because of senility being then about 88 years old. Virginia Santos, the widow of
Virgilio Santos, testified, in the Court a quo, and declared, that she and Virgilio Santos married,
on February 12, 1967, and resided in the house of Isidra Santos until the sale, by Virgilio Santos,
of the Isidra property to his brother, the Appellee Philip Santos and in exchange with the
property of the latter located at Kambal Street, Gitnangbayan, San Mateo, Rizal, where the
couple and, after Virgilio Santos’ death, on April 5, 1984, had been residing. Virginia Santos
likewise declared that Appellant Ladislao Santos and the Appellee Eliseo Santos had an
agreement, notarized by Atty. Sixto Natividad, that Virgilio Santos and Virginia Santos became
the new owners of the Isidra property. The copy of the Agreement given Virgilio Santos was
xeroxed and the xerox copy was given to Appellee Philip Santos while Virgilio Santos’ copy was
filed with the Provincial Assessor’s Office on the basis of which, Tax Declaration No. 7892 was
issued under his name. The Appellee Philip Santos, on the other hand, declared that the
Appellant Ladislao Santos and the Appellee Eliseo Santos and their respective Spouses executed
a "Combined Deed of Partition", in 1969, covering the Lot 1522 and the Isidra Property,
wherein it was covenanted that the Isidra Property was deeded to Appellee Eliseo Santos. The
Appellee Philip Santos further declared that he was then about 20 years old, and saw the said
"Combined Deed of Partition" in the possession of Appellee Eliseo Santos.

After due proceedings, the Court a quo promulgated a Decision dismissing Appellant’s
complaint on the ground that the Appellant failed to adduce proof of his entitlement to the relief
prayed for by him and on the ground of acquisitive prescription.

The present recourse stemmed from the following factual backdrop - when Bonifacio Santos
died intestate, he was survived by his two (2) sons, namely Ladislao Santos, the Appellant in the
present recourse, and Appellee Eliseo Santos, one of the Appellees in the present recourse and
their sister, Isidra Santos. The latter was the owner of a parcel of land, hereinafter referred to, for
brevity’s sake, as the Isidra property, located in General Luna Street, Gitnangbayan, San
Mateo, Rizal, with an area of 391 square meters, more or less, covered by Tax Declaration No.
655, located in front of but oblique to and about fifty (50) meters away from the property, with
an area of 6,340 square meters, covered by Tax Declaration No. 383 of the Provincial Assessor’s
Office, (Exhibit "L-3"). She had a house constructed on her lot where she had been residing
ever since.

In the meantime, on November 10, 1964, a cadastral survey of lands in San Mateo, Rizal, was
undertaken. The property, with an area of 6,340 square meters was identified as Lot 1522,
Cadastre No. 375-D. Tax Declaration No. 655, covering the Isidra Property was later cancelled
by Tax Declaration 1115 under her name, effective 1966 (Exhibit "4").

On May 29, 1967, the Appellant and his wife, Leonila Mateo executed a "Deed of Absolute
Conveyance with Right of Way" over the southwestern portion of Lot 1522, with an area of
3,000 square meters, in favor of his brother, the Appellee Eliseo Santos for the price of P500.00,
with a provision for a right of way.

On April 1, 1967, Isidra Santos died intestate and was survived by her two (2) brothers, the
Appellant and the Appellee Eliseo Santos.

On September 9, 1969, the Provincial Assessor issued Tax Declaration No. 7892, over the Isidra
property, under the name of Virgilio Santos and Virginia Santos, thereby canceling Tax
Declaration No. 1115 under the name of Isidra Santos (Exhibit "5"). In 1972, Tax Declaration
No. 7892 was cancelled by Tax Declaration No. 5043, still under the names of Virgilio Santos
and Virginia Santos, effective 1974 (Exhibit "4") and by Tax Declaration No. 04-0015,
effective 1980 (Exhibit "7").

On December 16, 1980, Virgilio Santos executed a "Deed of Absolute Sale of Unregistered
Residential Land" in favor of his brother, the Appellee Philip Santos, over the Isidra Property at
the time covered by Tax Declaration No. 04-0015, for the price of P24,460.00 (Exhibit "H").
On the basis of said deed, Tax Declaration No. 04-0015 was cancelled by Tax Declaration No.
04-0566, under the name of Appellee Philip Santos, effective 1981 (Exhibit "E"). The Spouses
Virgilio Santos vacated the said property and resided at Kambal Street, Gitnangbayan I, San
Mateo, Rizal formerly owned by Philip Santos . The latter, in turn, had the house on the lot
demolished and had his shop installed in the Isidra Property. Since then, Philip Santos had been
paying the realty taxes therefor. On April 5, 1984, Virgilio Santos died intestate and was
survived by his wife, Virginia Santos. In the meantime, the Appellant and Appellee Philip Santos
left the Philippines and resided in the United States of America.

Despite the "Deed of Absolute Conveyance With Right of Way" executed by the Appellant in
favor of Appellee Eliseo Santos, the children of the Appellant and their uncle, the Appellee
Eliseo Santos, signed an Application, on September 26, 1984 and filed the same with the
Regional Trial Court of Rizal (at San Mateo) for the registration of "their title" over Lots 1522
and 2433 of Cadastre 375-D. The Applicants alleged, inter alia in said application, that Noe
Santos, et al., (children of Ladislao Santos), were occupying a portion of Lot 1522, with an area
of 3,430 square meters, while Appellee Eliseo Santos was occupying a portion of the same lot,
with an area of 3,000 square meters, more or less, as a site of cockpit building (Exhibit "5"). On
July 16, 1986, the Regional Trial Court promulgated a Decision granting the application, the
decretal portion of which reads as follows:

"WHEREFORE, this Court hereby declares herein applicants the absolute owners of that parcels
of land identified as Lot 1522 and Lot 2433, both of Plan AP-04-001205 marked as Exhibit "D"
and in consequence thereof, it is hereby Ordered that the said parcels of land be registered in the
names of the applicants, to wit:

1. Noe Santos, married to Felicidad Santos; Asuncion S. Ramos, married to Virgilio

Ramos; LADISLAO SANTOS, JR., married to Regina Linco; NELIA S.
MACALALAD, married to Jacinto Macalalad; OFELIA SANTOS, single; RECTO
SANTOS, single, all of legal ages, Filipino citizens and all are residents of Gen. Luna St.,
San Mateo, Rizal, an undivided portion of 3,387 square meters of that parcel of land
identified as Lot 1522 of Plan AP-04-001205, marked as Exhibit "D" and undivided
rights, interest and participation of that parcel of land identified as Lot 2433 of the above-
mentioned Plan with an area of 43 square meters, all in equal shares (pro-indiviso);

2. ELISEO SANTOS, of legal age, Filipino citizen, married to Virginia Santos and
resident of Gen. Luna St., San Mateo, Rizal, an undivided portion of 3,000 square meters
of that parcel of land identified as Lot 1522 of Plan AP-04-001205.

Once this Decision becomes final, let an Order of the issuance of a Decree of Registration issue"
(Exhibits "26-E" and "26-F")

On the basis of the Decision of the Court, Noe Santos, et al., and Appellee Eliseo Santos, were
issued an Original Certificate of Title No. ON-1146, on November 18, 1986 over Lot 1522
(Exhibit M").

Noe Santos, for and in behalf of his siblings and Appellee Eliseo Santos had a subdivision plan
prepared, subdividing Lot 1522 into two (2) subdivision lots, namely, Lot 1522-A, with an area
of 3,000 square meters (Exhibit "15-A") and Lot 1522-B, with an area of 3,387 square
meters (Exhibit "15-B").

In June, 1987, Noe Santos and his siblings and their uncle, Appellee Eliseo Santos, executed a
"Partition Agreement" adjudicating Lot 1522-A, with an area of 3,000 square meters unto
Appellee Eliseo Santos, and Lot 1522-B, with an area of 3,387 square meters, unto Noe Santos,
et al., (Exhibit "13"). On the basis of said deed, Original Certificate of Title No. ON-1146 was
cancelled and Transfer Certificate of Title No. 148892 was issued to Appellee Eliseo Santos over
Lot 1522-A (Exhibit "11").

On March 17, 1993, Appellant Ladislao Santos, through counsel, sent a letter to the Appellee
Philip Santos alleging that the Appellant had discovered that the Isidra property inherited by
Appellant and Appellee Eliseo, had been declared, for taxation purposes, under the name of
Appellee Philip Santos, on the basis of a "Deed of Sale" executed by Virgilio Santos and
suggesting a conference regarding the matter (Exhibit "J"). The Appellee Philip Santos wrote to
the counsel of the Appellant, declaring, inter alia, that the Isidra property, with the portion and
Lot 1522-A, with an area of 3,000 square meters, formed part of the share of Appellee Eliseo
Santos in the estate of his father, Bonifacio Santos; that Appellee Eliseo Santos transferred the
Isidra property to his son, Virgilio Santos, who, in turn, sold the said property to Appellee Philip
Santos, for the amount of P24,600.00, as part of the consideration of the conveyance, by
Appellee Philip Santos, of his property located in Kambal Street, Gitnangbayan, San Mateo,
Rizal, where Virgilio Santos’ widow and family had been residing (Exhibit "24") and the
redemption, by Appellee Philip Santos, of the Mortgage of the property by Virgilio Santos from
the Rural Bank of San Mateo." 5

On May 13, 1993, herein respondent Ladislao Santos filed an action for the judicial partition of
the Isidra property. After due proceedings, the trial court promulgated a decision dismissing
Ladislao’s complaint on the ground that the latter failed to adduce proof of his entitlement to the
relief prayed for by him and on the ground of acquisitive prescription. Specifically, the trial court
cited the following reasons: (1) the subject property was registered/declared for taxation
purposes only in the name of Isidra Santos; (2) the fact of co-ownership thereof by reason of
inheritance was not reflected in the tax declaration; (3) there was no proof presented that the
cancellation of the tax declaration in Isidra’s name and the issuance of another in Virgilio’s name
had been effected through fraud and misrepresentation; (4) there is no proof that a fake document
was presented to the provincial assessor for the cancellation of the tax declaration and the
issuance of another in lieu thereof as all assessment records were destroyed by the fire which
gutted the office of the provincial assessor; and (5) from the time of Isidra’s death in 1967 up to
May 13, 1993 when this case was filed, acquisitive prescription may have already set in.

In due course, the Court of Appeals, as earlier stated, rendered its assailed Decision granting the
appeal, reversing the trial court’s decision and declaring that Ladislao Santos and Eliseo Santos
are each entitled to ½ pro indiviso shares in the Isidra property.

Hence, this appeal to this Court under Rule 45 of the Rules of Court raising the following issues:

"I. THE HONORABLE COURT OF APPEALS ERRED IN NOT UPHOLDING THE

LEGALITY AND REGULARITY OF THE TRANSFER OF ISIDRA PROPERTY TO
VIRGILIO SANTOS AND LATER TO PETITIONER PHILIP C. SANTOS.

II. THE HONORABLE COURT OF APPEALS ERRED IN AWARDING ONE-HALF

(1/2) PORTION PRO INDIVISO OF ISIDRA PROPERTY IN FAVOR OF
RESPONDENT DESPITE AND INSPITE OF THE ABSENCE OF PROOF OF
ALLEGED FRAUD AND MISREPRESENTATION IN THE CANCELLATION OF
THE TAX DECLARATION IN ISIDRA’S NAME ANT ITS SUBSEQUENT
TRANSFER TO VIRGILIO SANTOS’ NAME.

III. THE HONORABLE COURT OF APPEALS ERRED IN NOT UPHOLDING THAT

ACQUISITIVE PRESCRIPTION HAS ALREADY SET IN AS TO BAR THE
INSTANT ACTION FOR PARTITION.
 IV. THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING THAT
RESPONDENT’S RIGHT TO FILE THIS INSTANT ACTION FOR PARTITION HAS
ALREADY PRESCRIBED.

V. THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING THAT

LACHES HAS ALREADY SET IN AS TO BAR RESPONDENT IN ASSERTING HIS
CLAIM UNDER THE PETITION.

VI. THE HONORABLE COURT OF APPEALS ERRED IN NOT UPHOLDING THE

RIGHT OF PETITIONER PHILIP SANTOS AS BUYER IN GOOD FAITH AND FOR
VALUE." 6

The material aspects of the issues are closely intertwined; hence, they are consolidated into two
main issues specifically dealing with the following subjects: (1) the validity of the transfers of
the property originally belonging to Isidra M. Santos (the Isidra property) from Eliseo Santos to
Virgilio Santos and then to Philip Santos; and (2) whether the action for partition is already
barred by ordinary acquisitive prescription of ten years and estoppel by laches.

The petition is not meritorious.

The controversy involves a 391 square meter parcel of land situated in San Mateo, Rizal, owned
by Isidra Santos, a spinster who died intestate and without issue in 1967. She was survived by
her two brothers, Ladislao and Eliseo. Sometime in 1993, Ladislao through his attorney-in-fact
Noe M. Santos filed an action for judicial partition of the Isidra property against his brother
Eliseo and the latter’s son Philip. While admitting that Ladislao and Eliseo inherited the subject
Isidra property, Eliseo and Philip submitted that "Eliseo Santos and wife and Ladsilao and wife
signed a document wherein Eliseo acquired the subject lot from the combined partition of the
estate of their father Bonifacio Santos and their sister Isidra Santos. Bonifacio’s estate was
composed of 6,387 square meters while that of Isidra Santos is the subject property with an area
of 391 square meters. Out of this combined parcels of land, respondent got 3,387 square meters
while Eliseo got 3,000 square meters and the subject Isidra property with an area of 391 square
meters. Eliseo, in turn, donated the subject Isidra property to his son, Virgilio Santos."

Considering that petitioners Eliseo and Philip disputed the status of Ladislao as co-owner on the
ground that the brothers entered into a Combined Deed of Partition wherein the entire Isidra
property was conveyed to Eliseo, It was then incumbent upon them to present the best evidence
obtainable to prove the same. We agree with the Court of Appeals that the claim of a subsisting
co-ownership by Ladislao over the Isidra property has not been effectively refuted by Eliseo and
Philip, and that Eliseo and his successors-in-interest (Virgilio and Philip) did not acquire
exclusive title over the entire Isidra property.

Petitioners insist that they have effectively refuted the co-ownership between Ladislao and Eliseo
based on a "lawful document" proven as follows in the court a quo: (1) the annotation at the back
of Tax Declaration No. 1115 which states: "cancelled by Tax No. 7892, dated September 9,
1969, Virgilio and Virginia Cruz-Santos"; (2) Rodolfo Bautista, municipal assessor of San
Mateo, Rizal testified on the existence of the "document" authorizing the cancellation of Tax
Declaration No. 1115 in favor of the issuance of Tax Declaration No. 7892 in Virgilio’s name;
(3) Virginia Santos (wife of Virgilio), Philip and a certain Dr. Linco testified on the existence of
said "document". In relation to the foregoing, petitioners argue that the Isidra property was
acquired through a valid document inscribed in the tax declaration; that the existence and nature
7

of this document was proved by testimonial evidence; and that respondent was not able to show
that the document registered with the provincial assessor’s office was not the combined partition
or deed of transfer by brothers Ladislao and Eliseo.

We agree with the Court of Appeals that only the original document is the best evidence of the
fact as to whether the brothers Ladislao and Eliseo Santos executed a Combined Deed of
Partition wherein the entire property of Isidra Santos was conveyed to Eliseo. In the absence of
such document, petitioners’ arguments regarding said partition must fail. The testimonies of
Virginia Santos and Philip Santos on the existence of and the contents of the aforesaid
documents are, at most, secondary evidence, which are inadmissible considering that the
petitioners as the offerors failed to prove any of the exceptions provided in Section 3, Rule 130
of the Rules of Court and to establish the conditions for their admissibility. We quote with favor
8 9

the findings of the Court of Appeals, thus:

"Even if we assumed, for the nonce, that indeed, Lot 1522 was inherited by the Appellant and
his brother, the Appellee Eliseo Santos, however, we are not convinced that the Appellant and
his wife deeded to the Appellee Eliseo Santos and the latter to Virgilio Santos the Isidra Property
under a "Deed of Transfer" as testified to by Virginia Santos or under a "Combined Deed of
Partition" as testified to by Appellee Philip Santos. The Appellees never adduced in evidence
any copy of the said deed executed by the Appellant and the Appellee Eliseo Santos and their
respective spouses. Since the subject of inquiry was the subject of said deed, it was incumbent on
the Appellees to adduce in evidence the original of the deed or a copy of the original of the deed
conformably with Section 3, Rule 130 of the Rules of Evidence. The Appellees failed to do so.
The Court a quo allowed the Appellees to adduce secondary evidence to prove the contents of
the said deed, but it was inappropriate for the Court a quo to do so over the objections of the
Appellant. This is so because, before the Appellees are allowed to adduce secondary evidence to
prove the contents of the original of the deed, the Appellees had to prove, with the requisite
quantum of evidence, the loss or destruction or unavailability of all the copies of the original of
the deed. As former Supreme Court Chief Justice Manuel V. Moran declared:

"Where there are two or more originals, it must appear that all of them have been lost, destroyed
or cannot be produced before secondary evidence can be given of any one. For example, a lease
was executed in duplicate, one being retained by the lessor and the other by the lessee. Either
copy was, therefore, an original, and could have been introduced as evidence of the contract
without the production of the other. One of these originals could not be found. The non-
production of the other was not accounted for it was held that "under these circumstances, the
rule is that no secondary evidence of the contents of either is admissible until it is shown that
originals must be accounted for before secondary evidence can be given of any one." (Moran,
Comments on the Rules of Court, Volume V, 1970 ed. at pages 90-91, supra, underscoring
supplied)
Indeed, before a party is allowed to adduce secondary evidence to prove the contents of the
original of the deed, the offeror is mandated to prove the following:

"(a) the execution and existence of the original (b) the loss and destruction of the original or its
non-production in court; and (c) unavailability of the original is not due to bad faith on the part
of the offeror." (Francisco, Rules of Court, Part I, Volume VII, 1997 ed. at page 154)."

When she testified in the Court a quo, Virginia Santos declared that there were three (3) copies
of the deed signed by the parties thereof. One copy of the deed was given to Virgilio Santos, one
copy was retained by the Appellee Eliseo Santos, and one copy was retained by Atty. Sixto
Natividad, the Notary Public. Virgilio Santos had his copy xeroxed and gave the xerox copy to
Appellee Philip Santos. Virgilio Sanots’ copy was later filed with the Provincial Assessor’s
Office. x x x.

x x x           x x x          x x x.

When he testified in the Court a quo, the Appellee Philip Santos admitted that he saw a copy of
the deed in the possession of his father, the Appellee Eliseo Santos:

x x x           x x x          x x x.

While the Appellees adduced evidence that the copy filed with the Provincial Assessor’s Office
was burned when the Office of the Provincial Assessor was burned on April 7, 1977, however,
the Appellees failed to adduce proof that the copy in the possession of Atty. Sixto Natividad was
lost or destroyed. It bears stressing that a Notary Public is mandated, under the Notarial Law, to
retain two (2) copies of every deed involving real estate as part of his notarial record, a copy of
which he is to submit to the Notarial Section of the Regional Trial Court.

The Appellees could very well have procured, by subpoenae ad testificandum and duces tecum,
the attendance of Atty. Sixto Natividad before the Court a quo and bring with him his copy of the
deed. After all, there is no evidence on record that he was already dead or was unavailable at the
time of the trial in the Court a quo. The Appellees did not. Moreover, the Appellees failed to
prove the loss or destruction of the copy on file with the Notarial Section of the Regional Trial
Court or of the copy in the possession of the Appellee Eliseo Santos. Assuming, for the nonce,
that the Appellees mustered the requisite quantum of evidence to prove the loss or destruction of
all the copies of the original of the deed, however, Section 5 of Rule 130 of the Rules of
Evidence provides that, before testimonial evidence may be adduced to prove the contents of the
original of the deed, the offeror is mandated to prove the loss or non-availability of any copy of
the original or of some authentic document reciting the contents thereof: x x x."

x x x           x x x          x x x.

In the present recourse, Virginia Santos admitted that a xerox copy of the deed was given to the
Appellee Philip Santos. However, when she testified in the Court a quo, she admitted not having
inquired from the Appellee Philip Santos if he still had the xerox copy of all deeds that Virgilio
gave him. x x x. 10
We also agree with the Court of Appeals that petitioners’ evidence consisting of the tax
declarations in Virgilio’s name and then in Philip’s name are not conclusive and indisputable
evidence to show that the lot in question was conveyed to Virgilio Santos, Philip’s predecessor-
in-interest. A mere tax declaration does not vest ownership of the property upon the declarant.
Neither do tax receipts nor declarations of ownership for taxation purposes constitute adequate
evidence of ownership or of the right to possess realty. 11

As for the much-vaunted testimony of the municipal assessor of San Mateo, Rizal, the Court of
Appeals had this to say:

"The Appellees presented Rodolfo Bautista, the representative of the Rizal Provincial Assessor,
to prove that Tax Declaration No. 7892, under the name of Virgilio Santos and Virginia Santos,
cancelled Tax Declaration No. 1115, under the name of Isidra Santos, on the basis of the
"Combined Deed of Partition" purportedly executed by the Appellant and his wife, in tandem
with the Appellee Eliseo Santos and his wife, which was, however, burned when the Provincial
Assessor’s Office was gutted by fire on April 7, 1977. However, Rodolfo Bautista himself
unabashedly admitted, when he testified in the Court a quo that he had no knowledge of the
nature of the deed that was used for the cancellation of Tax Declaration No. 1115 under the name
of Isidra Santos or the previous document burned or gutted by the fire.

"Atty. Ferry:

Q: When you testified last March 14, 1994, Mr. Bautista, you declared that you assumed your
position in the Office of the Municipal Assessor only on January 6, 1982. Before that, you were
not connected with the Municipal Assessor?

A: I am not yet connected, sir.

Q: So for the first time you learned, in your official capacity, the alleged lost of all records in the
Office of the Provincial Assessor bearing dates 1977 down was only recently?

A: No, sir.

Q: When?

A: When I took over in 1982, sir.

Q: But the fact is, you will agree with me in so far as the present controversy is concerned, you
have no way of determining the particular document presented to the Office of the Provincial
Assessor which was made the basis in effecting the transfer of tax declaration in the name of
Isidra Santos in favor of Virgilio Santos marked in evidence as Exh. 4. You have no way of
determining or identifying the particular document used or presented to the Office of the
Provincial Assessor which was made the basis for the cancellation of tax declaration in the name
of Isidra Santos and that paved the issuance of the tax declaration in the name of Virgilio Santos
marked in evidence by the defendants as Exh. 5. You will not be able to know that simply on the
basis of this document? You are in no position to tell or determine what particular document was
presented in the Office of the Provincial Assessor which paved the way to the cancellation of
Exh. 4 which is tax declaration no. 1115 in the name of Isidra Santos and the issuance of another
one in the name of Virgilio Santos marked in evidence as Exh. 5?

A: I do not know, sir (t.s.n. Bautista, at pages 9-10, April 18, 1994, underscoring supplied)

The Appellees can find no solstice on the face of Tax Declaration No. 1115, Exhibit "4", which
12

contains the following entry:

"Cancelled by:

Tax Declaration No. 7892

Dated: Sept. 9, 1969

Virgilio & Virginia Cruz Santos"

(Exhibit "4-B")

This is so because the entry does not contain any clue of the nature of the deed, if it was a deed at
all, used for the cancellation of Tax Declaration No. 1155, the parties who executed the said deed
or the beneficiary of said deed. Indeed, the Court admitted, in its Decision, that there was no way
of identifying the document used as basis for the issuance of a new tax declaration under the
name of Virgilio Santos (t.s.n. Bautista, supra). Virgilio Santos could very well have executed a
"Deed of Extra-judicial Settlement of Estate and of Self-Adjudication of Real Property"
covering the Isidra Property and filed the same with the Provincial Assessor on the basis of
which he was issued Tax Declaration No. 7892 over the property. But then, such a deed did not
prejudice the share of the Appellant in the Isidra Property. It is not legally possible for one to
adjudicate unto himself a property he was not the owner of. Hence, We find and so declare that
the Isidra Property remained the property of the Appellant and the Appellee Eliseo Santos as
their inheritance from Isidra Santos. As our Supreme Court declared in an avuncular case:

"Despite admission during the hearing on the identify of the land in question (see p. 21, Record
on Appeal), Maria’s counsel, on appeal, re-emphasized her original claim that the two parcels of
land in her possession were acquired from the Sps. Placido Biduya and Margarita Bose.
However, the private document relative to the purchase, was not produced at the trial, allegedly
because they were placed in a trunk in their house which were burned during the Japanese
Occupation. In 1945, Maria sold the riceland. No written evidence was submitted for all intents
therefore, the riceland remained inherited property (Maria Bicarme, et al., versus Court of
Appeals, et al., 186 SCRA 294, at pages 298-299)."

In the light of our findings and disquisitions, Virgilio Santos did not acquire title over the Isidra
Property. Hence, Virgilio Santos could not have lawfully sold the said property to his brother, the
Appellee Philip Santos. As the Latin aphorism goes: "NEMO DAT QUOD NON HABET." 13
All told, the testimonies of the prosecution witnesses, Virginia Santos, Philip Santos and Rodolfo
Bautista, on the existence of said document, specifically, the Combined Deed of Partition, cannot
be considered in favor of the petitioners, the same being, at most, secondary evidence.

Anent the second issue, petitioners insist that acquisitive prescription has already set in; and that
estoppel lies to bar the instant action for partition. According to petitioners, Virgilio Santos was
already in possession of the subject property since after the death of Isidra Santos on April 1,
1967. Thereafter, Philip Santos took possession of the subject property on December 16, 1980
upon its sale on said date. They reason out that more than 13 years had lapsed from April 1, 1967
to December 16, 1980; and that more than 12 years had lapsed from the time Philip Santos took
possession of the property on December 16, 1980 up to the time Ladislao Santos filed the action
for partition on May 13, 1993. Petitioners conclude that the instant action is already barred by
ordinary acquisitive prescription of ten years. Further, it is argued that the possession of Virgilio
Santos could be tacked with the possession of Philip Santos bringing to a total of 26 years the
time that elapsed before the filing of the case in 1993. They add that these 26 years of inaction
call for the application of the principle of estoppel by laches.

Considering that there was no proof that Ladislao Santos executed any "Combined Deed of
Partition" in tandem with the Eliseo Santos, we rule that a co-ownership still subsists between
the brothers over the Isidra property. This being the case, we apply Article 494 of the Civil Code
which states that, "prescription does not run in favor of a co-owner or co-heir against his co-
owners or his co-heirs so long as he expressly or impliedly recognizes the co-ownership." In
Adile vs. Court of Appeals, it was held:
14

"x x x. Prescription, as a mode of terminating a relation of co-ownership, must have been

preceded by repudiation (of the co-ownership). The act of repudiation, in turn, is subject to
certain conditions: (1) a co-owner repudiates the co-ownership; (2) such an act of repudiation is
clearly made known to the other co-owners; (3) the evidence thereon is clear and conclusive; and
(4) he has been in possession through open, continuous, exclusive, and notorious possession of
the property for the period required by law."

There is no showing that Eliseo Santos had complied with these requisites.1âwphi1 We are not
convinced that Eliseo had repudiated the co-ownership, and even if he did, there is no showing
that the same had been clearly made known to Ladislao. As aptly observed by the Court of
Appeals:

"Under Article 1119 of the New Civil Code, acts of possessory character executed in virtue of
license or tolerance of the owners shall not be available for the purposes of possession.

Indeed, Filipino family ties being close and well-knit as they are, and considering that Virgilio
Santos was the ward of Isidra Santos ever since when Virgilio Santos was still an infant, it was
but natural that the Appellant did not interpose any objection to the continued stay of Virgilio
Santos and his family on the property and even acquiesce thereto. Appellant must have assumed
too, that his brother, the Appellee Eliseo Santos, allowed his son to occupy the property and use
the same for the time being. Hence, such possession by Virgilio Santos and Philip Santos of the
property does not constitute a repudiation of the co-ownership by the Appellee Eliseo Santos and
of his privies for that matter. As our Supreme Court succinctly observed:

"x x x [A]nd it is probable that said conduct was simply tolerated by the plaintiffs on account of
his being their uncle, and they never thought that by said conduct the defendant was attempting
to oust them forever from the inheritance, nor that the defendant would have so intended in any
way, dealing as we do here with the acquisition of a thing by prescription, the evidence must be
so clear and conclusive as to establish said prescription without any shadow of doubt. This does
not happen in the instant case, for the defendant did not even try to prove that he has expressly or
impliedly refused plaintiff’s right over an aliquot part of the inheritance. (at page 875, supra)" 15

Penultimately, the action for partition is not barred by laches. An action to demand partition is
imprescriptible or cannot be barred by laches. Each co-owner may demand at any time the
partition of the common property. 16

As a final note, it must be stated that since Ladislao has successfully hurdled the issue of co-
ownership of the property sought to be partitioned, there is the secondary issue of how the
property is to be divided between the two brothers. This Court cannot proceed forthwith with the
17

actual partitioning of the property involved, hence, we reiterate the order of the Court of Appeals
for the trial court to effect the partition of the subject property in conformity with Rule 69 of the
1997 Rules of Civil Procedure.

WHEREFORE, the decision of the Court of Appeals is AFFIRMED in toto.

SO ORDERED.

G.R. No. L-39299 October 18, 1988

ISAAC, SEVERINO, MARIA, TELESFORA, FELISA, SERAPIO, SIMEON and MACARIA all
surnamed PANGAN, petitioners,
vs.
COURT OF APPEALS and TEODORA GARCIA, respondents.

Magtanggol C. Gunigundo for petitioners.

David C. Canta for private respondent.

CRUZ, J.:

The property in question is a parcel of land with an area of 635 square meters and situated in San Pascual, Obando, Bulacan. 1 It was
originally owned by Leon Hilario and is now being disputed between the herein petitioners, who are his great grandchildren by his daughter
Silvestra, and the private respondent, Teodora Garcia, who is his granddaughter by his daughter Catalina. 2

In 1964, the petitioners filed an application for the registration of the land in their names by virtue of
their continuous and exclusive possession thereof since 1895, by themselves and their father and
grandfather before them. After proper notices by publication and posting as required, the trial court
issued an order of general default, there being no opposition to the application, and proceeded to
hear the evidence of the applicants ex-parte. On the basis thereof, the application was approved on
March 31, 1966.

On June 8, 1966, the herein private respondent filed a petition to set aside the said decision, which
the trial Court granted, admitting at the same time her opposition to the application and setting the
3

case for reception of her evidence. This evidence sought to show that the land was inherited by
Leon Hilario's three children, but the son, Felicisimo, waived his right thereto and thereby made his
two sisters, Silvestra and Catalina, its exclusive co-owners. As Catalina's daughter, she was entitled
to one-half of the property, the other half going to Silvestra's heirs, the petitioners herein and the
latter's
grandchildren. 4

On September 13, 1968, the trial judge issued an order dismissing the opposition and reinstating his
original order of March 31,1966. His reason was that whatever rights Teodora might have had over
5

the property had been forfeited by extinctive prescription because she had left the land in 1942 and
had not since then asserted any claim thereto until 1966.

On appeal to the respondent court, this decision was reversed on the ground that the appellees had
6

not clearly proved that they had acquired the property by prescription. Hence, the appellant was
entitled to one-half of the property as heir, conformably to her opposition in the court a quo. Their
motion for reconsideration having been denied, they have now come to this Court in a petition for
review by certiorari under Rule 45 of the Rules of Court.

The petitioners' position is that the respondent court erred in holding that the private respondent was
entitled to one-half of the land, which she had not lost by extinctive prescription because it was held
by them in trust for her. They also insist that the appealed decision completely disregarded the
factual findings of the trial court that they had acquired the whole land by virtue of their long,
continued and adverse possession thereof, which should bar any claim by Teodora to her supposed
part ownership.

It is stressed at the outset that the appellate court is not necessarily bound by the factual findings of
the trial court simply because the latter had the opportunity to observe the witnesses directly and
assess their credibility by their deportment. While this may be a conceded advantage of the trial
judge, the appellate court may still reverse his findings of fact if they are not based on the evidence
submitted or have been reached without considering the other matters of record that might have
dictated a different conclusion. The Court of Appeals precisely is vested with jurisdiction to review
questions of fact as decided by the lower court. It would be evading this responsibility if it should
merely adopt the findings in the decision under review on the convenient justification that the trial
judge had the opportunity, which it did not have, of gauging the reliability of the witnesses first-hand.

When, therefore, the respondent court accepted the private respondent's allegation that the land was
inherited by the parties from their common ancestor, Leon Hilario, such a finding, based on the
record and not rejected but even assumed by the trial court, did not, in our view, constitute grave
abuse of discretion. And when, on the strength of this finding, it then held that an implied trust was
created between the petitioners who were in possession of the land, and Teodora Garcia, their aunt
and co-heir, that too, as we see it, is not an arbitrary assumption.

In fact, the Court feels this is the more plausible relationship between the parties, compared to the
version offered by the petitioners, who claim they acquired the property from their grandfather
through their father, who apparently acquired it from his mother, Leon Hilario's daughter. It does not
appear that they have pre-empted the other heirs to the property through any other mode of
acquisition, like sale or some similar exclusive transaction. They have not submitted any evidence of
how they acquired the land from their great grandfather, confining themselves to the assertion that
they have continued his original possession, presumably as heirs of their father, who inherited from
his mother Silvestra, who was the daughter of Hilario. If this be their theory, then they unavoidably
must recognize Teodora Garcia's own claim to the subject property as she too was an heir, being the
daughter of Catalina, who was also a daughter of Hilario.

The trial court said, however, that assuming Teodora had the right to the disputed property, the
same was forfeited by her through extinctive prescription by failure to assert it in time. In its original
decision, it affirmed the petitioners' claim that they had acquired ownership over the whole property
by their adverse possession thereof for more than thirty years in concept of owner. Teodora Garcia
apparently did not challenge such ownership and so by her inaction forever lost the right to do so.

The respondent court, rejecting this contention, held that the petitioners' possession was not for their
benefit alone but also in favor of Teodora, who was a co-heir with them and therefore also a co-
owner of the property. In other words, their possession, while adverse to the rest of the world, was
not against Teodora herself, whose share they held in implied trust for her as a co-owner of the land,
and whose fruits their father shared with her occasionally, or at least promised her she would get
eventually. The Court believes that this, too, is not an arbitrary conclusion.

To support their claim of exclusive ownership of the entire land, the petitioners stress that the
property was declared for taxation purposes in the name of Tomas Pangan, their father, in 1948 and
another tax declaration was issued, also in his name, in 1965. Moreover, real estate taxes were paid
by them from 1908 to 1914, 1930 to 1932, 1956 to 1957, and 1960 to 1965, whereas Teodora
Garcia, by her own admission, never paid any tax at all on the disputed land. 7

Tax declarations are indicia but not conclusive proof of ownership. If the property was declared in
8

the name of To as Pangan only, it could be that this was done only for reasons of convenience,
more so if it was understood, as the private respondent did, that he was declaring the property not
only for himself but for herself also as the other co-owner. As for the admitted fact that Teodora
Garcia never actually paid the real estate taxes, the explanation she gave was that she assumed her
share of such taxes was being paid from her share in the fruits of her portion of the land, which she
said she was not getting regularly, much less in full. We hold that this explanation is also plausible
enough.

But for all this, there is still the question of whether or not Teodora Garcia, by her failure to assert her
right, allowed the statutory period to lapse, thus enabling the petitioners to perfect their claim of
ownership by acquisitive prescription and so exclude her from her share in the subject property.

It is a settled rule that possession by one co-owner will not be regarded as adverse to the other co-
owners but in fact as beneficial to all of them. Hence, as long as his co-ownership is recognized, an
9

action to compel partition will not prescribe and may be filed at any time against the actual
possessor by any of the other co-owners. However, if the co-owner actually holding the property
10

asserts exclusive dominion over it against the other co-owners, the corollary of the rule is that he can
acquire sole title to it after the lapse of the prescribed prescriptive period. From that moment, the
question involved will be one of ownership and no longer mere partition. 11

According to the petitioners, there was such repudiation which was admitted by the private
respondent herself Testifying for herself at the hearing on her opposition in the registration
proceedings, she declared:

ATTY. CANLAS:
 Q: After the death of Tomas Pangan, did you ask the heirs of Tomas
Pangan of your alleged share in the property in question?

A: Yes, sir.

Q: What did they tell you?

A: They said that I have no right to a share and they won't give me my share.

Q: How many years ago did you ask from them?

A: Immediately after the death of their father.

Q: That was some 20 years ago?

A: I do not know how many years ago.

Q: And during all that span of more than 20 years ago you did not file
any action to recover your share on the land in question?

A: No sir, it was only this time . 12

For title to prescribe in favor of the co-owner, however, there must be a clear showing that he has
repudiated the claims of the other co-owners and that they have been categorically advised of the
exclusive claim he is making to the property in question. It is only when such unequivocal notice has
been given that the period of prescription will begin to run against the other co-owners and ultimately
divest them of their own title if they do not seasonably defend it. 13

Adverse possession requires the concurrence of the following circumstances:

1. That the trustee has performed unequivocal acts amounting to an ouster of the cestui que trust;

2. That such positive acts of repudiation had been made known to the cestui que trust; and

3. That the evidence thereon should be clear and conclusive. 14

On the basis of the evidence presented by the parties, the Court is not convinced that the above
requirements have been satisfied. Although there are admittedly some precedents to the contrary, it
would appear that the weight of authority requires a categorical and final rejection of the co-owners'
claim, usually manifested by a formal legal action, to make the prescriptive period start to run against
the claimant. Thus—

Filing by a trustee of an action in court against the trustor to quiet title to property, or
for recovery of ownership thereof, held in possession by the former, may constitute
an act of repudiation of the trust reposed on him by the latter. 15

The issuance of the certificate of title would constitute an open and clear repudiation
of any trust, and the lapse of more than 20 years, open and adverse possession as
owner would certainly suffice to vest title by prescription. 16
 An action for the reconveyance of land based on implied or constructive trust
prescribes within 10 years. And it is from the date of the issuance of such title that
the effective assertion of adverse title for purposes of the statute of limitation is
counted. 17

The prescriptive period may only be counted from the time petitioners repudiated the
trust relation in 1956 upon the filing of the complaint for recovery of possession
against private respondents so that the counterclaim of the private respondents
contained in their amended answer wherein they asserted absolute ownership of the
disputed realty by reason of the continuous and adverse possession of the same is
well within the 10-year prescriptive period. 18

There is clear repudiation of a trust when one who is an apparent administrator of

property causes the cancellation of the title thereto in the name of the apparent
beneficiaries and gets a new certificate of title in his own name. 19

It is only when the defendants, alleged co-owners of the property in question,

executed a deed of partition and on the strength thereof obtained the cancellation of
the title in the name of their predecessor and the issuance of a new one wherein they
appear as the new owners of a definite area each, thereby in effect denying or
repudiating the ownership of one of the plaintiffs over his alleged share in the entire
lot, that the statute of limitations started to run for the purposes of the action
instituted by the latter seeking a declaration of the existence of the co-ownership and
of their rights thereunder. 20

The established evidence clearly shows that the subject land was inherited by the petitioners and the
private respondent as co-heirs of their common ancestor, Leon Hilario, whose possession they
continued to acquire prescriptive title over the property. That possession was originally in the name
of all the heirs, including Teodora Garcia, who in fact had been assured by Tomas Pangan, the
petitioners' father, that she would get the share to which she was entitled. The petitioners have not
proved that their possession excluded their co-owner and aunt or that they derived their title from a
separate conveyance to them of the property by Leon Hilario. Parenthetically, such a conveyance, if
it existed, would be questionable as it might have deprived Leon's other children of their legitime. In
any case, the petitioners appear to have arrogated the entire property to themselves upon their
father's death sometime in 1942 or at the latest in 1965 when they sought to register the land in their
names to the exclusion of Teodora Garcia. The question is, Did such an act begin the period of
extinctive prescription against the private respondent?

Manifestly, the petitioners have acted in bad faith in denying their aunt and co-heir her legal share to
the property they had all inherited from Leon Hilario through their respective parents. This is
regrettable as Teodora Garcia is their father's first cousin who apparently trusted him and, indeed,
relied on his promise that her share would be protected. Tomas Pangan presumably was sincere in
this assurance, but it was unfortunately not honored by his children upon his death for they soon
dismissed out of hand Teodora Garcia's claim to the subject property.

In cases where there is a clear showing of imposition and improper motives, the courts must be
vigilant in the protection of the rights of the exploited. So said the respondent court, and we agree,
21

We note that the private respondent "is a poor and ignorant 62-year old widow" * whose misplaced trust in
her nephews and nieces is being used now precisely to defeat her claim to the share that she believes is rightfully hers. It is a sorry
spectacle, indeed, to see her own close kin longing up on her, so to speak, to deprive her of her small heritage, and in her old age at that.

With all this in mind, we affirm the finding of the respondent court that there was no adequate notice
by the petitioners to the private respondent of the rejection of her claim to her share in the subject
property. Noticeably absent here is a categorical assertion by the petitioners of their exclusive right
to the entire property that barred her own claim of ownership of one-half thereof nor is there any
explanation as to why they said she had no right to a share. If this trusting woman did not
immediately take legal action to protect her rights, it was simply because of forbearance toward her
nephews and nieces, let alone the fact that there was really no cases belli as yet that required her to
act decisively. That legal provocation arose only when the petitioners commenced the registration
proceedings in 1965, and it was from that time she was required to act, as she did, to protect her
interests.

In an earlier case we stressed that this Court is not only a court of law but also of justice. Faced
22

with a choice between a decision that will serve justice and another that will deny it because of a too
strict interpretation of the law, we must resolve in favor of the former, for the ultimate end of the law
is justice. Bonus judex secundum aequum at bonum judicat stricto juri praefert. This is a wise 23

maxim we will follow here in ruling for the deprived and ignorant old widow.

WHEREFORE, the petition is DENIED and the challenged decision AFFIRMED in full, with costs
against the petitioners. It is so ordered.

[G.R. No. 136803. June 16, 2000.]

EUSTAQUIO MALLILIN, JR., Petitioner, v. MA. ELVIRA CASTILLO, Respondent.

DECISION

MENDOZA, J.:

This is a petition for review of the amended decision 1 of the Court of Appeals dated May 7, 1998 in CA G.R.
CV No. 48443 granting respondent’s motion for reconsideration of its decision dated November 7, 1996, and
of the resolution dated December 21, 1998 denying petitioner’s motion for reconsideration.

The factual and procedural antecedents are as follows: chanrob1es virtual 1aw library

On February 24, 1993, petitioner Eustaquio Mallilin, Jr. filed a complaint 2 for "Partition and/or Payment of
Co-Ownership Share, Accounting and Damages" against respondent Ma. Elvira Castillo. The complaint,
docketed as Civil Case No. 93-656 at the Regional Trial Court in Makati City, alleged that petitioner and
respondent, both married and with children, but separated from their respective spouses, cohabited after a
brief courtship sometime in 1979 while their respective marriages still subsisted. During their union, they set
up the Superfreight Customs Brokerage Corporation, with petitioner as president and chairman of the board
of directors, and respondent as vice-president and treasurer. The business flourished and petitioner and
respondent acquired real and personal properties which were registered solely in respondent’s name. In
1992, due to irreconcilable differences, the couple separated. Petitioner demanded from respondent his
share in the subject properties, but respondent refused alleging that said properties had been registered
solely in her name. chanrobles.com : chanrobles.com.ph

In her Amended Answer, 3 respondent admitted that she engaged in the customs brokerage business with
petitioner but alleged that the Superfreight Customs Brokerage Corporation was organized with other
individuals and duly registered with the Securities and Exchange Commission in 1987. She denied that she
and petitioner lived as husband and wife because the fact was that they were still legally married to their
respective spouses. She claimed to be the exclusive owner of all real and personal properties involved in
petitioner’s action for partition on the ground that they were acquired entirely out of her own money and
registered solely in her name.

On November 25, 1994, respondent filed a Motion for Summary Judgment, 4 in accordance with Rule 34 of
the Rules of Court. 5 She contended that summary judgment was proper, because the issues raised in the
pleadings were sham and not genuine, to wit: chanrob1es virtual 1aw library
A.

The main issue is — Can plaintiff validly claim the partition and/or payment of co-ownership share,
accounting and damages, considering that plaintiff and defendant are admittedly both married to their
respective spouses under still valid and subsisting marriages, even assuming as claimed by plaintiff, that
they lived together as husband and wife without benefit of marriage? In other words, can the parties be
considered as co-owners of the properties, under the law, considering the present status of the parties as
both married and incapable of marrying each other, even assuming that they lived together as husband and
wife (?)

B.

As a collateral issue, can the plaintiff be considered as an unregistered co-owner of the real properties under
the Transfer Certificates of Title duly registered solely in the name of defendant Ma. Elvira Castillo? This
issue is also true as far as the motor vehicles in question are concerned which are also registered in the
name of defendant. 6

On the first point, respondent contended that even if she and petitioner actually cohabited, petitioner could
not validly claim a part of the subject real and personal properties because Art. 144 of the Civil Code, which
provides that the rules on co-ownership shall govern the properties acquired by a man and a woman living
together as husband and wife but not married, or under a marriage which is void ab initio, applies only if the
parties are not in any way incapacitated to contract marriage. 7 In the parties’ case, their union suffered the
legal impediment of a prior subsisting marriage. Thus, the question of fact being raised by petitioner, i.e.,
whether they lived together as husband and wife, was irrelevant as no co-ownership could exist between
them. chanrobles virtuallawlibrary

As to the second issue, respondent maintained that petitioner can not be considered an unregistered co-
owner of the subject properties on the ground that, since titles to the land are solely in her name, to grant
petitioner’s prayer would be to allow a collateral attack on the validity of such titles.

Petitioner opposed respondent’s Motion for Summary Judgment. 8 He contended that the case presented
genuine factual issues and that Art. 144 of the Civil Code had been repealed by the Family Code which now
allows, under Art. 148, a limited co-ownership even though a man and a woman living together are not
capacitated to marry each other. Petitioner also asserted that an implied trust was constituted when he and
respondent agreed to register the properties solely in the latter’s name although the same were acquired
out of the profits made from their brokerage business. Petitioner invoked the following provisions of the Civil
Code: chanrob1es virtual 1aw library

ARTICLE 1452. If two or more persons agree to purchase property and by common consent the legal title is
taken in the name of one of them for the benefit of all, a trust is created by force of law in favor of the
others in proportion to the interest of each.

ARTICLE 1453. When the property is conveyed to a person in reliance upon his declared intention to hold it
for, or transfer it to another grantor, there is an implied trust in favor of the person whose benefit is
contemplated.

On January 30, 1995, the trial court rendered its decision 9 granting respondent’s motion for summary
judgment. It ruled that an examination of the pleadings shows that the issues involved were purely legal.
The trial court also sustained respondent’s contention that petitioner’s action for partition amounted to a
collateral attack on the validity of the certificates of title covering the subject properties. It held that even if
the parties really had cohabited, the action for partition could not be allowed because an action for partition
among co-owners ceases to be so and becomes one for title if the defendant, as in the present case, alleges
exclusive ownership of the properties in question. For these reasons, the trial court dismissed Civil Case No.
93-656.

On appeal, the Court of Appeals on November 7, 1996, ordered the case remanded to the court of origin for
trial on the merits. It cited the decision in Roque v. Intermediate Appellate Court 10 to the effect that an
action for partition is at once an action for declaration of co-ownership and for segregation and conveyance
of a determinate portion of the properties involved. If the defendant asserts exclusive title over the
property, the action for partition should not be dismissed. Rather, the court should resolve the case and if
the plaintiff is unable to sustain his claimed status as a co-owner, the court should dismiss the action, not
because the wrong remedy was availed of, but because no basis exists for requiring the defendant to submit
to partition. Resolving the issue whether petitioner’s action for partition was a collateral attack on the
validity of the certificates of title, the Court of Appeals held that since petitioner sought to compel
respondent to execute documents necessary to effect transfer of what he claimed was his share, petitioner
was not actually attacking the validity of the titles but in fact, recognized their validity. Finally, the appellate
court upheld petitioner’s position that Art. 144 of the Civil Code had been repealed by Art. 148 of the Family
Code. chanroblesvirtual|awlibrary

Respondent moved for reconsideration of the decision of the Court of Appeals. On May 7, 1998, nearly two
years after its first decision, the Court of Appeals granted respondent’s motion and reconsidered its prior
decision. In its decision now challenged in the present petition, it held —

Prefatorily, and to better clarify the controversy on whether this suit is a collateral attack on the titles in
issue, it must be underscored that plaintiff-appellant alleged in his complaint that all the nine (9) titles are
registered in the name of defendant-appellee, Ma. Elvira T. Castillo, except one which appears in the name
of Eloisa Castillo (see par. 9, Complaint). However, a verification of the annexes of such initiatory pleading
shows some discrepancies, to wit: chanrob1es virtual 1aw library

1. TCT No. 149046 (Annex A) = Elvira T. Castillo,

single

2. TCT No. 168208 (Annex B) = -do-

3. TCT No. 37046 (Annex C) = -do-

4. TCT No. 37047 (Annex D) = -do-

5. TCT No. 37048 (Annex E) = -do

6. TCT No. 30368 (Annex F) = Steelhaus Realty & Dev.

Corp.

7. TCT No. 30369 (Annex G) = -do-

8. TCT No. 30371 (Annex F) = -do-

9. TCT No. (92323) 67881 (Annex I) = Eloisa Castillo

In this action, plaintiff-appellant seeks to be declared as ½ co-owner of the real properties covered by the
above listed titles and eventually for their partition [ par. (a), Prayer; p. 4 Records]. Notably, in order to
achieve such prayer for a joint co-ownership declaration, it is unavoidable that the individual titles involved
be altered, changed, canceled or modified to include therein the name of the appellee as a registered ½ co-
owner. Yet, no cause of action or even a prayer is contained in the complaint filed. Manifestly, absent any
cause or prayer for the alteration, cancellation, modification or changing of the titles involved, the desired
declaration of co-ownership and eventual partition will utterly be an indirect or collateral attack on the
subject titles in this suit.

It is here that We fell into error, such that, if not rectified will surely lead to a procedural lapse and a
possible injustice. Well settled is the rule that a certificate of title cannot be altered, modified or canceled
except in a direct proceeding in accordance with law.

In this jurisdiction, the remedy of the landowner whose property has been wrongfully or erroneously
registered in another name is, after one year from the date of the decree, not to set aside the decree, but
respecting it as incontrovertible and no longer open to review, to bring an action for reconveyance or, if the
property had passed into the hands of an innocent purchaser for value, for damages. Verily, plaintiff-
appellant should have first pursued such remedy or any other relief directly attacking the subject titles
before instituting the present partition suit. Apropos, the case at bench appears to have been prematurely
filed.

Lastly, to grant the partition prayed for by the appellant will in effect rule and decide against the properties
registered in the names of Steelhouse Realty and Development Corporation and Eloisa Castillo, who are not
parties in the case. To allow this to happen will surely result to injustice and denial of due process of law. . .
11

Petitioner moved for reconsideration but his motion was denied by the Court of Appeals in its resolution
dated December 21, 1998. chanrobles.com : chanrobles.com.ph

Hence this petition.

Petitioner contends that: (1) the Court of Appeals, in its first decision of November 7, 1996, was correct in
applying the Roque ruling and in rejecting respondent’s claim that she was the sole owner of the subject
properties and that the partition suit was a collateral attack on the titles; (2) the Court of Appeals correctly
ruled in its first decision that Art. 148 of the Family Code governs the co-ownership between the parties,
hence, the complaint for partition is proper; (3) with respect to the properties registered in the name of
Steelhouse Realty, respondent admitted ownership thereof and, at the very least, these properties could
simply be excluded and the partition limited to the remaining real and personal properties; and (4) the Court
of Appeals erred in not holding that under the Civil Code, there is an implied trust in his favor. 12

The issue in this case is really whether summary judgment, in accordance with Rule 35 of the Rules of
Court, is proper. We rule in the negative.

First. Rule 35, §3 of the Rules of Court provides that summary judgment is proper only when, based on the
pleadings, depositions, and admissions on file, and after summary hearing, it is shown that except as to the
amount of damages, there is no veritable issue regarding any’ material fact in the action and the movant is
entitled to judgment as a matter of law. 13 Conversely, where the pleadings tender a genuine issue, i.e., an
issue of fact the resolution of which calls for the presentation of evidence, as distinguished from an issue
which is sham, fictitious, contrived, set-up in bad faith, or patently unsubstantial, summary judgment is not
proper. 14

In the present case, we are convinced that genuine issues exist. Petitioner anchors his claim of co-ownership
on two factual grounds: first, that said properties were acquired by him and respondent during their union
from 1979 to 1992 from profits derived from their brokerage business; and second, the said properties were
registered solely in respondent’s name only because they agreed to that arrangement, thereby giving rise to
an implied trust in accordance with Art. 1452 and Art. 1453 of the Civil Code. These allegations are denied
by Respondent. She denies that she and petitioner lived together as husband and wife. She also claims that
the properties in questions were acquired solely by her with her own money and resources. With such
conflicting positions, the only way to ascertain the truth is obviously through the presentation of evidence by
the parties.
chanrobles virtua| |aw |ibrary

The trial court ruled that it is immaterial whether the parties actually lived together as husband and wife
because Art. 144 of the Civil Code can not be made to apply to them as they were both incapacitated to
marry each other. Hence, it was impossible for a co-ownership to exist between them.

We disagree.

Art. 144 of the Civil Code provides: chanrob1es virtual 1aw library

When a man and a woman live together as husband and wife, but they are not married, or their marriage is
void from the beginning, the property acquired by either or both of them through their work or industry or
their wages and salaries shall be governed by the rules on co-ownership.

This provision of the Civil Code, applies only to cases in which a man and a woman live together as husband
and wife without the benefit of marriage provided they are not incapacitated or are without impediment to
marry each other, 15 or in which the marriage is void ab initio, provided it is not bigamous. Art. 144,
therefore, does not cover parties living in an adulterous relationship. However, Art. 148 of the Family Code
now provides for a limited co-ownership in cases where the parties in union are incapacitated to marry each
other. It states: chanrob1es virtual 1aw library

In cases of cohabitation not falling under the preceding article, 16 only the properties acquired by both of
the parties through their actual joint contribution of money, property or industry shall be owned by them in
common in proportion to their respective contributions. In the absence of proof to the contrary, their
contributions and corresponding shares are presumed to be equal. The same rule and presumption shall
apply to joint deposits of money and evidences of credits.
If one of the parties is validly married to another, his or her share in the co-ownership shall accrue to the
absolute community or conjugal partnership existing in such valid marriage. If the party who acted in bad
faith is not validly married to another, his or her share shall be forfeited in the manner provided in the last
paragraph of the preceding article. chanrobles.com : virtual law library

The foregoing rules on forfeiture shall likewise apply even if both parties are in bad faith.

It was error for the trial court to rule that, because the parties in this case were not capacitated to marry
each other at the time that they were alleged to have been living together, they could not have owned
properties in common. The Family Code, in addition to providing that a co-ownership exists between a man
and a woman who live together as husband and wife without the benefit of marriage, likewise provides that,
if the parties are incapacitated to marry each other, properties acquired by them through their joint
contribution of money, property or industry shall be owned by them in common in proportion to their
contributions which, in the absence of proof to the contrary, is presumed to be equal. There is thus co-
ownership eventhough the couple are not capacitated to marry each other.

In this case, there may be a co-ownership between the parties herein. Consequently, whether petitioner and
respondent cohabited and whether the properties involved in the case are part of the alleged co-ownership
are genuine and material. All but one of the properties involved were alleged to have been acquired after
the Family Code took effect on August 3, 1988. With respect to the property acquired before the Family
Code took effect if it is shown that it was really acquired under the regime of the Civil Code, then it should
be excluded.

Petitioner also alleged in paragraph 7 of his complaint that: chanrob1es virtual 1aw library

Due to the effective management, hardwork and enterprise of plaintiff assisted by defendant, their customs
brokerage business grew and out of the profits therefrom, the parties acquired real and personal properties
which were, upon agreement of the parties, listed and registered in defendant’s name with plaintiff as the
unregistered co-owner of all said properties. 17

On the basis of this, he contends that an implied trust existed pursuant to Art. 1452 of the Civil Code which
provides that" (I)f two or more persons agree to purchase property and by common consent the legal title is
taken in the name of one of them for the benefit of all, a trust is created by force of law in favor of the
others in proportion to the interest of each." We do not think this is correct. The legal relation of the parties
is already specifically covered by Art. 148 of the Family Code under which all the properties acquired by the
parties out of their actual joint contributions of money, property or industry shall constitute a co-ownership.
Co-ownership is a form of trust and every co-owner is a trustee for the other. 18 The provisions of Art. 1452
and Art. 1453 of the Civil Code, then are no longer material since a trust relation already inheres in a co-
ownership which is governed under Title III, Book II of the Civil Code. chanroblesvirtuallawlibrary

Second. The trial court likewise dismissed petitioner’s action on the ground that the same amounted to a
collateral attack on the certificates of title involved. As already noted, at first, the Court of Appeals ruled
that petitioner’s action does not challenge the validity of respondent’s titles. However, on reconsideration, it
reversed itself and affirmed the trial court. It noted that petitioner’s complaint failed to include a prayer for
the alteration, cancellation, modification, or changing of the titles involved. Absent such prayer, the
appellate court ruled that a declaration of co-ownership and eventual partition would involve an indirect or
collateral attack on the titles. We disagree.

A torrens title, as a rule, is conclusive and indefeasible. Proceeding from this, P.D. No. 1529, 19 §48
provides that a certificate of title shall not be subject to collateral attack and can not be altered, modified, or
canceled except in a direct proceeding. When is an action an attack on a title? It is when the object of the
action or proceeding is to nullify the title, and thus challenge the judgment pursuant to which the title was
decreed. The attack is direct when the object of an action or proceeding is to annul or set aside such
judgment, or enjoin its enforcement. On the other hand, the attack is indirect or collateral when, in an
action to obtain a different relief, an attack on the judgment is nevertheless made as an incident thereof. 20

In his complaint for partition, consistent with our ruling in Roque regarding the nature of an action for
partition, petitioner seeks first, a declaration that he is a co-owner of the subject properties; and second,
the conveyance of his lawful shares. He does not attack respondent’s titles. Petitioner alleges no fraud,
mistake, or any other irregularity that would justify a review of the registration decree in respondent’s favor.
His theory is that although the subject properties were registered solely in respondent’s name, but since by
agreement between them as well as under the Family Code, he is co-owner of these properties and as such
is entitled to the conveyance of his shares. On the premise that he is a co-owner, he can validly seek the
partition of the properties in co-ownership and the conveyance to him of his share. chanrobles.com : virtual law library

Thus, in Guevara v. Guevara, 21 in which a parcel of land bequeathed in a last will and testament was
registered in the name of only one of the heirs, with the understanding that he would deliver to the others
their shares after the debts of the original owner had been paid, this Court ruled that notwithstanding the
registration of the land in the name of only one of the heirs, the other heirs can claim their shares in "such
action, judicial or extrajudicial, as may be necessary to partition the estate of the testator." 22

Third. The Court of Appeals also reversed its first decision on the ground that to order partition will, in
effect, rule and decide against Steelhouse Realty Development Corporation and Eloisa Castillo, both
strangers to the present case, as to the properties registered in their names. This reasoning, however,
ignores the fact that the majority of the properties involved in the present case are registered in
respondent’s name, over which petitioner claims rights as a co-owner. Besides, other than the real
properties, petitioner also seeks partition of a substantial amount of personal properties consisting of motor
vehicles and several pieces of jewelry. By dismissing petitioner’s complaint for partition on grounds of due
process and equity, the appellate court unwittingly denied petitioner his right to prove ownership over the
claimed real and personal properties. The dismissal of petitioner’s complaint is unjustified since both ends
may be amply served by simply excluding from the action for partition the properties registered in the name
of Steelhouse Realty and Eloisa Castillo. chanroblesvirtual|awlibrary

WHEREFORE, the amended decision of the Court of Appeals, dated May 7, 1998, is REVERSED and the case
is REMANDED to the Regional Trial Court, Branch 59, Makati City for further proceedings on the merits.

SO ORDERED.

G.R. No. L-57062 January 24, 1992

MARIA DEL ROSARIO MARIATEGUI, ET AL., Petitioners, vs. HON.

COURT OF APPEALS, JACINTO MARIATEGUI, JULIAN MARIATEGUI
and PAULINA MARIATEGUI, Respondents.

Montesa, Albon & Associates for petitioners.

Parmenio B. Patacsil, Patacsil Twins Law Office for the heirs of the late Maria
del Rosario Mariategui.

Tinga, Fuentes & Tagle Firm for private respondents. chanrobles virtual law library

BIDIN, J.:

This is a petition for review on certiorari of the decision * of the Court of

Appeals dated December 24, 1980 in CA-G.R. No. 61841, entitled "Jacinto
Mariategui, et al. v. Maria del Rosario Mariategui, et al.," reversing the
judgment of the then Court of First Instance of Rizal, Branch VIII ** at
Pasig, Metro Manila. chanroblesvirtualawlibrary chanrobles virtual law library

The undisputed facts are as follows: chanrobles virtual law library

Lupo Mariategui died without a will on June 26, 1953 (Brief for respondents,
Rollo, pp. 116; 8). During his lifetime, Lupo Mariategui contracted three (3)
marriages. With his first wife, Eusebia Montellano, who died on November 8,
1904, he begot four (4) children, namely: Baldomera, Maria del Rosario,
Urbana and Ireneo. Baldomera died and was survived by her children named
Antero, Rufina, Catalino, Maria, Gerardo, Virginia and Federico, all surnamed
Espina. Ireneo also died and left a son named Ruperto. With his second wife,
Flaviana Montellano, he begot a daughter named Cresenciana who was born
on May 8, 1910 (Rollo, Annex "A", p. 36). chanroblesvirtualawlibrary chanrobles virtual law library

Lupo Mariategui and Felipa Velasco (Lupo's third wife) got married sometime
in 1930. They had three children, namely: Jacinto, born on July 3, 1929,
Julian, born on February 16, 1931 and Paulina, born on April 19, 1938.
Felipa Velasco Mariategui died in 1941 (Rollo, Ibid). chanroblesvirtualawlibrary chanrobles virtual law library

At the time of his death, Lupo Mariategui left certain properties which he
acquired when he was still unmarried (Brief for respondents, Rollo, pp. 116;
4). These properties are described in the complaint as Lots Nos. 163, 66,
1346 and 156 of the Muntinglupa Estate (Rollo, Annex "A", p. 39). chanroblesvirtualawlibrary chanrobles virtual law library

On December 2, 1967, Lupo's descendants by his first and second

marriages, namely, Maria del Rosario, Urbana, Ruperto, Cresencia, all
surnamed Mariategui and Antero, Rufina, Catalino, Maria, Gerardo, Virginia
and Federico, all surnamed Espina, executed a deed of extrajudicial partition
whereby they adjudicated unto themselves Lot No. 163 of the Muntinglupa
Estate. Thereafter, Lot No. 163 was the subject of a voluntary registration
proceedings filed by the adjudicatees under Act No. 496, and the land
registration court issued a decree ordering the registration of the lot. Thus,
on April 1, 1971, OCT No. 8828 was issued in the name of the above-
mentioned heirs. Subsequently, the registered owners caused the
subdivision of the said lot into Lots Nos. 163-A to 163-H, for which separate
transfer certificates of title were issued to the respective parties (Rollo,
ibid).
chanroblesvirtualawlibrary chanrobles virtual law library

On April 23, 1973, Lupo's children by his third marriage with Felipa Velasco
(Jacinto, Julian and Paulina) filed with the lower court an amended complaint
claiming that Lot No. 163 together with Lots Nos. 669, 1346 and 154 were
owned by their common father, Lupo Mariategui, and that, with the
adjudication of Lot No. 163 to their co-heirs, they (children of the third
marriage) were deprived of their respective shares in the lots. Plaintiffs pray
for partition of the estate of their deceased father and annulment of the
deed of extrajudicial partition dated December 2, 1967 (Petition, Rollo, p.
10). Cresencia Mariategui Abas, Flaviana Mariategui Cabrera and Isabel
Santos were impleaded in the complaint as unwilling defendants as they
would not like to join the suit as plaintiffs although they acknowledged the
status and rights of the plaintiffs and agreed to the partition of the parcels of
land as well as the accounting of their fruits (Ibid., Rollo, p. 8; Record on
Appeal, p. 4). chanroblesvirtualawlibrary chanrobles virtual law library

The defendants (now petitioners) filed an answer with counterclaim

(Amended Record on Appeal, p. 13). Thereafter, they filed a motion to
dismiss on the grounds of lack of cause of action and prescription. They
specifically contended that the complaint was one for recognition of natural
children. On August 14, 1974, the motion to dismiss was denied by the trial
court, in an order the dispositive portion of which reads:

It is therefore the opinion of the Court that Articles 278 and 285 of the Civil
Code cited by counsel for the defendants are of erroneous application to this
case. The motion to dismiss is therefore denied for lack of merit. chanroblesvirtualawlibrary chanrobles virtual law library

SO ORDERED. (Ibid, p. 37).

However, on February 16, 1977, the complaint as well as petitioners'

counterclaim were dismissed by the trial court, in its decision stating thus:

The plaintiffs' right to inherit depends upon the acknowledgment or

recognition of their continuous enjoyment and possession of status of
children of their supposed father. The evidence fails to sustain either
premise, and it is clear that this action cannot be sustained. (Ibid, Rollo, pp.
67-68)

The plaintiffs elevated the case to the Court of Appeals on the ground that
the trial court committed an error ". . . in not finding that the parents of the
appellants, Lupo Mariategui and Felipa Velasco (were) lawfully married, and
in holding (that) they (appellants) are not legitimate children of their said
parents, thereby divesting them of their inheritance . . . " (Rollo, pp. 14-
15).chanroblesvirtualawlibrary chanrobles virtual law library

On December 24, 1980, the Court of Appeals rendered a decision declaring

all the children and descendants of Lupo Mariategui, including appellants
Jacinto, Julian and Paulina (children of the third marriage) as entitled to
equal shares in the estate of Lupo Mariategui; directing the adjudicatees in
the extrajudicial partition of real properties who eventually acquired transfer
certificates of title thereto, to execute deeds of reconveyance in favor, and
for the shares, of Jacinto, Julian and Paulina provided rights of innocent third
persons are not prejudiced otherwise the said adjudicatees shall reimburse
the said heirs the fair market value of their shares; and directing all the
parties to submit to the lower court a project of partition in the net estate of
Lupo Mariategui after payment of taxes, other government charges and
outstanding legal obligations.chanroblesvirtualawlibrary chanrobles virtual law library

The defendants-appellees filed a motion for reconsideration of said decision

but it was denied for lack of merit. Hence, this petition which was given due
course by the court on December 7, 1981. chanroblesvirtualawlibrary chanrobles virtual law library

The petitioners submit to the Court the following issues: (a) whether or not
prescription barred private respondents' right to demand the partition of the
estate of Lupo Mariategui, and (b) whether or not the private respondents,
who belatedly filed the action for recognition, were able to prove their
successional rights over said estate. The resolution of these issues hinges,
however, on the resolution of the preliminary matter, i.e., the nature of the
complaint filed by the private respondents. chanroblesvirtualawlibrary chanrobles virtual law library

The complaint alleged, among other things, that "plaintiffs are the children
of the deceased spouses Lupo Mariategui . . . and Felipa Velasco"; that
"during his lifetime, Lupo Mariategui had repeatedly acknowledged and
confirmed plaintiffs as his children and the latter, in turn, have continuously
enjoyed such status since their birth"; and "on the basis of their relationship
to the deceased Lupo Mariategui and in accordance with the law on intestate
succession, plaintiffs are entitled to inherit shares in the foregoing estate
(Record on Appeal, pp. 5 & 6). It prayed, among others, that plaintiffs be
declared as children and heirs of Lupo Mariategui and adjudication in favor of
plaintiffs their lawful shares in the estate of the decedent (Ibid, p. 10). chanroblesvirtualawlibrary chanrobles virtual law library

A perusal of the entire allegations of the complaint, however, shows that the
action is principally one of partition. The allegation with respect to the status
of the private respondents was raised only collaterally to assert their rights
in the estate of the deceased. Hence, the Court of Appeals correctly adopted
the settled rule that the nature of an action filed in court is determined by
the facts alleged in the complaint constituting the cause of action (Republic
vs. Estenzo, 158 SCRA 282 [1988]). chanroblesvirtualawlibrary chanrobles virtual law library

It has been held that, if the relief demanded is not the proper one which
may be granted under the law, it does not characterize or determine the
nature of plaintiffs' action, and the relief to which plaintiff is entitled based
on the facts alleged by him in his complaint, although it is not the relief
demanded, is what determines the nature of the action (1 Moran, p. 127,
1979 ed., citing Baguioro vs. Barrios, et al., 77 Phil. 120). chanroblesvirtualawlibrary chanrobles virtual law library

With respect to the legal basis of private respondents' demand for partition
of the estate of Lupo Mariategui, the Court of Appeals aptly held that the
private respondents are legitimate children of the deceased. chanroblesvirtualawlibrary chanrobles virtual law library
Lupo Mariategui and Felipa Velasco were alleged to have been lawfully
married in or about 1930. This fact is based on the declaration
communicated by Lupo Mariategui to Jacinto who testified that "when (his)
father was still living, he was able to mention to (him) that he and (his)
mother were able to get married before a Justice of the Peace of Taguig,
Rizal." The spouses deported themselves as husband and wife, and were
known in the community to be such. Although no marriage certificate was
introduced to this effect, no evidence was likewise offered to controvert
these facts. Moreover, the mere fact that no record of the marriage exists
does not invalidate the marriage, provided all requisites for its validity are
present (People vs. Borromeo, 133 SCRA 106 [1984]). chanroblesvirtualawlibrary chanrobles virtual law library

Under these circumstances, a marriage may be presumed to have taken

place between Lupo and Felipa. The laws presume that a man and a woman,
deporting themselves as husband and wife, have entered into a lawful
contract of marriage; that a child born in lawful wedlock, there being no
divorce, absolute or from bed and board is legitimate; and that things have
happened according to the ordinary course of nature and the ordinary habits
of life (Section 5 (z), (bb), (cc), Rule 131, Rules of Court; Corpus v. Corpus,
85 SCRA 567 [1978]; Saurnaba v. Workmen's Compensation, 85 SCRA 502
[1978]; Alavado v. City Gov't. of Tacloban, 139 SCRA 230 [1985]; Reyes v.
Court of Appeals, 135 SCRA 439 [1985]). chanroblesvirtualawlibrary chanrobles virtual law library

Courts look upon the presumption of marriage with great favor as it is

founded on the following rationale:

The basis of human society throughout the civilized world is that of

marriage. Marriage in this jurisdiction is not only a civil contract, but it is a
new relation, an institution in the maintenance of which the public is deeply
interested. Consequently, every intendment of the law leans toward
legalizing matrimony. Persons dwelling together in apparent matrimony are
presumed, in the absence of any counterpresumption or evidence special to
that case, to be in fact married. The reason is that such is the common order
of society and if the parties were not what they thus hold themselves out as
being, they would be living in the constant violation of decency and of
law . . . (Adong vs. Cheong Seng Gee, 43 Phil. 43, 56 [1922] quoted in
Alavado vs. City Government of Tacloban, 139 SCRA 230 [1985]).

So much so that once a man and a woman have lived as husband and wife
and such relationship is not denied nor contradicted, the presumption of
their being married must be admitted as a fact (Alavado v. City Gov't. of
Tacloban, supra). chanroblesvirtualawlibrary chanrobles virtual law library
The Civil Code provides for the manner under which legitimate filiation may
be proven. However, considering the effectivity of the Family Code of the
Philippines, the case at bar must be decided under a new if not entirely
dissimilar set of rules because the parties have been overtaken by events, to
use the popular phrase (Uyguangco vs. Court of Appeals, G.R. No. 76873,
October 26, 1989). Thus, under Title VI of the Family Code, there are only
two classes of children - legitimate and illegitimate. The fine distinctions
among various types of illegitimate children have been eliminated (Castro
vs. Court of Appeals, 173 SCRA 656 [1989]). chanroblesvirtualawlibrary chanrobles virtual law library

Article 172 of the said Code provides that the filiation of legitimate children
may be established by the record of birth appearing in the civil register or a
final judgment or by the open and continuous possession of the status of a
legitimate child. chanroblesvirtualawlibrary chanrobles virtual law library

Evidence on record proves the legitimate filiation of the private respondents.

Jacinto's birth certificate is a record of birth referred to in the said article.
Again, no evidence which tends to disprove facts contained therein was
adduced before the lower court. In the case of the two other private
respondents, Julian and Paulina, they may not have presented in evidence
any of the documents required by Article 172 but they continuously enjoyed
the status of children of Lupo Mariategui in the same manner as their
brother Jacinto.chanroblesvirtualawlibrary chanrobles virtual law library

While the trial court found Jacinto's testimonies to be inconsequential and

lacking in substance as to certain dates and names of relatives with whom
their family resided, these are but minor details. The nagging fact is that for
a considerable length of time and despite the death of Felipa in 1941, the
private respondents and Lupo lived together until Lupo's death in 1953. It
should be noted that even the trial court mentioned in its decision the
admission made in the affidavit of Cresenciana Mariategui Abas, one of the
petitioners herein, that " . . . Jacinto, Julian and Paulina Mariategui ay
pawang mga kapatid ko sa
ama . . ." (Exh. M, Record on Appeal, pp. 65-66). chanroblesvirtualawlibrary chanrobles virtual law library

In view of the foregoing, there can be no other conclusion than that private
respondents are legitimate children and heirs of Lupo Mariategui and
therefore, the time limitation prescribed in Article 285 for filing an action for
recognition is inapplicable to this case. Corollarily, prescription does not run
against private respondents with respect to the filing of the action for
partition so long as the heirs for whose benefit prescription is invoked, have
not expressly or impliedly repudiated the co-ownership. In other words,
prescription of an action for partition does not lie except when the co-
ownership is properly repudiated by the co-owner (Del Banco vs.
Intermediate Appellate Court, 156 SCRA 55 [1987] citing Jardin vs. Hollasco,
117 SCRA 532 [1982]). chanroblesvirtualawlibrary chanrobles virtual law library

Otherwise stated, a co-owner cannot acquire by prescription the share of the

other co-owners absent a clear repudiation of co-ownership duly
communicated to the other co-owners (Mariano vs. De Vega, 148 SCRA 342
[1987]). Furthermore, an action to demand partition is imprescriptible and
cannot be barred by laches (Del Banco vs. IAC, 156 SCRA 55 [1987]). On
the other hand, an action for partition may be seen to be at once an action
for declaration of co-ownership and for segregation and conveyance of a
determinate portion of the property involved (Roque vs. IAC, 165 SCRA 118
[1988]).chanroblesvirtualawlibrary chanrobles virtual law library

Petitioners contend that they have repudiated the co-ownership when they
executed the extrajudicial partition excluding the private respondents and
registered the properties in their own names (Petition, p. 16; Rollo, p. 20).
However, no valid repudiation was made by petitioners to the prejudice of
private respondents. Assuming petitioners' registration of the subject lot in
1971 was an act of repudiation of the co-ownership, prescription had not yet
set in when private respondents filed in 1973 the present action for partition
(Ceniza vs. C.A., 181 SCRA 552 [1990]). chanroblesvirtualawlibrary chanrobles virtual law library

In their complaint, private respondents averred that in spite of their

demands, petitioners, except the unwilling defendants in the lower court,
failed and refused to acknowledge and convey their lawful shares in the
estate of their father (Record on Appeal, p. 6). This allegation, though
denied by the petitioners in their answer (Ibid, p. 14), was never
successfully refuted by them. Put differently, in spite of petitioners'
undisputed knowledge of their relationship to private respondents who are
therefore their co-heirs, petitioners fraudulently withheld private
respondent's share in the estate of Lupo Mariategui. According to respondent
Jacinto, since 1962, he had been inquiring from petitioner Maria del Rosario
about their (respondents) share in the property left by their deceased father
and had been assured by the latter (Maria del Rosario) not to worry because
they will get some shares. As a matter of fact, sometime in 1969, Jacinto
constructed a house where he now resides on Lot No. 163 without any
complaint from petitioners. chanroblesvirtualawlibrary chanrobles virtual law library

Petitioners' registration of the properties in their names in 1971 did not

operate as a valid repudiation of the co-ownership. In Adille vs. Court of
Appeals (157 SCRA 455, 461-462 [1988]), the Court held:

Prescription, as a mode of terminating a relation of co-ownership, must have

been preceded by repudiation (of the co-ownership). The act of repudiation,
in turn, is subject to certain conditions: (1) a co-owner repudiates the co-
ownership; (2) such an act of repudiation is clearly made known to the other
co-owners; (3) the evidence thereon is clear and conclusive; and (4) he has
been in possession through open, continuous, exclusive, and notorious
possession of the property for the period required by law.

xxx xxx xxx chanrobles virtual law library

It is true that registration under the Torrens system is constructive notice of

title, but it has likewise been our holding that the Torrens title does not
furnish shield for fraud. It is therefore no argument to say that the act of
registration is equivalent to notice of repudiation, assuming there was one,
notwithstanding the long-standing rule that registration operates as a
universal notice of title.

Inasmuch as petitioners registered the properties in their names in fraud of

their co-heirs prescription can only be deemed to have commenced from the
time private respondents discovered the petitioners' act of defraudation
(Adille vs. Court of Appeals, supra). Hence, prescription definitely may not
be invoked by petitioners because private respondents commenced the
instant action barely two months after learning that petitioners had
registered in their names the lots involved. chanroblesvirtualawlibrary chanrobles virtual law library

WHEREFORE, the petition is DENIED and the assailed decision of the Court of
Appeals dated December 24, 1980 is Affirmed. chanroblesvirtualawlibrary chanrobles virtual law library

SO ORDERED.

G.R. No. 95364 June 29, 1992

UNION BANK OF THE PHILIPPINES, petitioner,

vs.

HOUSING AND LAND USE REGULATORY BOARD, MARTHA S. DAVID and TERESITA T.
QUAZON, assisted by her husband, ALFONSO MARIA QUAZON, respondents.

GRIÑO-AQUINO, J.:

The issue presented by this petition for certiorari and prohibition with preliminary injunction is
whether or not the Housing and Land Use Regulatory Board (HLURB) for brevity) has jurisdiction to
hear and decide a condominium buyer's complaint for:

(a) annulment or a real estate mortgage constituted by the project owner without his
consent and without the prior written consent of the National Housing Authority:
 (b) for annulment of the foreclosure sale; and

(c) for annulment of the condominium certificate of title that was issued to the highest
bidder at the foreclosure sale.

In 1973, Martha David purchased from Fereit Realty Development Corporation (FRDC) a
condominium unit, Lorraine Flat 552, which was in the process of completion, with parking space No.
S-12, in the condominium project known as "Europa Condominium Villas" in Baguio City.

The agreed purchase price was P217,000. Martha David made a 20% downpayment of P43,400 on
the price leaving a balance of P173,600 (including interest of 1% per month) which was payable in
60 equal monthly installments of P3,861.64 per installment.

In 1975, Martha David took possession, as owner, of the condominium unit, with notice to the
management. As of October, 1976, she had paid at least twenty-two (22) monthly installments of the
price of the condominium unit.

On January 2, 1978, FRDC, without the knowledge of the condominium buyer David, and without the
prior approval of the National Housing Authority, mortgaged the condominium project to Bancom
Development Corporation (Bancom), predecessor-in-interest of the petitioner Union Bank of the
Philippines (UBP), as security for a loan of P40,000,000 (pp. 58-59, Rollo).

As FRDC failed to pay its obligation which, as computed by Bancom, amounted to P42,075,134.84
as of June 30, 1979, Bancom foreclosed the mortgage on 45 condominium units including the unit of
Martha David.

On March 4, 1980, the Sheriff executed a Certificate of Sale to Bancom and the Far East Bank and
Trust Company (FEBTC) as the highest bidder for the total price of P19,324,000. After the expiration
of the redemption period, UBP held out the units for sale (pp. 58-59, Rollo)

On June 26, 1989, Martha David and Teresita Quazon, the latter assisted by her husband, Alfonso
Maria Quazon, who had in the meantime, purchased Martha David's unit, filed a complaint in the
HLURB, against FRDC, UBP and FEBTC to annul the title of UBP and FEBTC over David's
condominium unit and to order the issuance of a new certificate of title in the name of Teresita
Quazon. The complaint sought the following reliefs:

a. Upon the filing of this complaint an order be issued allowing the complainants to
deposit on consignation the amount of P200,000.00 (to be deposited by and/or in the
name of Teresita T. Quazon) to be paid to respondents Union Bank and Far East
Bank according to their respective interests:

b. After hearing judgment be rendered —

i. considering complainants to have fully paid the total purchase price

of the condominium unit originally purchased by the complainant
David and assigned and/or sold to complainant Quazon;

ii. ordering the cancellation of Condominium Certificate of Title No.

1117 in the name of Union bank and Far East Bank; and
 iii. ordering the issuance of a new Condominium Certificate of Title
over, the same condominium unit covered by CCT No. 1117 in the
name of complainant Teresita T. Quazon as the assignee of the unit
from complainant David.

Complainant further pray for such other reliefs as maybe deemed just and proper in
the premises. (pp. 20-21, Rollo)

On July 17, 1989, UBP and FEBTC filed their answer questioning the HLURB's jurisdiction over the
case. UBP filed a motion to dismiss on the same ground.

In an Order dated August 27, 1990, HLURB Arbiter, Cesar Manuel denied the motion of UBP, on the
ground that the "motion will render nugatory the summary nature of proceedings before this Office"
(Annex D, p. 40, Rollo). HLURB ordered the parties to file their respective position papers within
fifteen (15) days and thereafter the case would be deemed submitted for resolution.

In due time, this petition for certiorari and prohibition with injunction was filed by UBP.

UBP's main argument is that the HLURB has no jurisdiction over the complaint for consignation
which should have been filed in the regular trial courts. Furthermore, as the HLURB was created in
1981 (E.O. No. 641), it has no jurisdiction over contracts that took effect prior to 1981.

Those arguments deserve scant consideration. The issue in HLURB Case No. REM-062689-4077 is
the validity of the real estate mortgage of David's condominium unit that FRDC executed in Favor of
the Union Bank and Far East Bank without prior approval of the National Housing Authority and
legality of the title which the mortgagee banks acquired as highest bidder, therefore in the
extrajudicial foreclosure sale. The applicable provisions of P.D. No. 957 otherwise known as "The
Subdivision and Condominium Buyer's Protective Decree" are quoted hereunder as follows:

Sec. 3. NATIONAL HOUSING AUTHORITY. — The National Housing Authority shall

have exclusive jurisdiction to regulate the real estate trade and business in
accordance with the provisions of this decree. (Emphasis supplied)

Sec. 18. MORTGAGES. — No mortgage on any unit or lot shall be made by the
owner or developer without prior written approval of the Authority. Such approval
shall not be granted unless it is shown that the proceeds of the mortgage loan shall
be used for the development of the condominium or subdivision project and effective
measures have been provided to ensure such utilization. The loan value of each lot
or unit covered by the mortgage shall be determined and the buyer thereof, if any,
shall be notified before the release of the loan. The buyer may, at his option pay his
installment for the lot or unit directly to the mortgagee who shall apply the payments
to the corresponding mortgage indebtedness secured by the particular lot or unit
being paid for with a view to enabling said buyer to obtain title over the lot or unit
promptly after full payment thereof.

P.D. No. 1344 of April 2, 1978 expanded the jurisdiction of the National Housing Authority (NHA) to
include the following:

Sec. 1. In the exercise of its functions to regulate the real estate trade and business
and in addition to its powers provided for in Presidential Decree No. 957, the National
 Housing Authority shall have exclusive jurisdiction to hear and decide cases of the
following nature:

A. Unsound real estate business practices:

B. Claims involving refund and any other claims filed by subdivision

lot or condominium unit buyer against the project owner, developer,
dealer, broker, or salesman; and

C. Cases involving specific performance of contractual and statutory

obligations filed by buyers of subdivision lot or condominium unit
against the owner, developer, dealer, broker, or salesman. (VLD Vol.
52, pp. 51-52.)

On February 7, 1981, Executive Order No. 648 transferred the regulatory and quasi-judicial functions
of the NHA to Human Settlements Regulatory Commission.

Sec. 8. TRANSFER OF FUNCTIONS. — The regulatory functions of the National

Housing Authority pursuant to Presidential Decrees No. 957, 1216, 1344 and other
related laws are hereby transferred to the Commission together with such applicable
personnel, appropriation, records, equipment and property necessary for the
enforcement and implementation of such functions. Among these regulatory
functions are:

1. Regulation of the real estate trade and business;

2. Registration of subdivision lots and condominium projects;

3. Issuance of license to sell subdivision lots and condominium units in the registered
units;

4. Approval of performance bond and the suspension of license to sell;

5. Registration of dealers, brokers, and salesmen engaged in the business of selling

subdivision lots or condominium units;

6. Revocation of registration of dealers, brokers and salesman;

7. Approval of mortgage on any subdivision lot or condominium unit made by the

owner or developer;

8. Granting of permits for the alteration of plans and the extension of period for
completion of subdivision or condominium projects;

9. Approval of the conversion to other purposes of roads and open spaces found
within the project which have been donated to the city or municipality concerned;

10. Regulation of the relationship between lessors and lessees; and

 11. Hear and decide cases on unsound real estate business practices; claims
involving refund filed against project owners, developers, dealers, brokers or
salesmen and cases of specific performance. (VLD Vol. 81, pp. 108-109.)

Executive Order No. 90 dated December 17, 1986 changed the name of the Human Settlements
Regulatory Commission to "Housing and Land Use Regulatory Board (HLURB).

Clearly, FRDC's act of mortgaging the condominium project to Bancom and FEBTC, without the
knowledge and consent of David as buyer of a unit therein, and without the approval of the NHA
(now HLURB) as required by P.D. No. 957, was not only an unsound real estate business practice
but also highly prejudicial to the buyer. David, who has a cause of action for annulment of the
mortgage, the mortgage foreclosure sale and the condominium certificate of title that was issued to
the UBP and FEBTC as highest bidders at the sale. The case falls within the exclusive jurisdiction of
the NHA (now HLURB) as provided in P.D. No. 957 of 1976 and P.D. No. 1344 of 1978.

The allegations of UBP that the contract between FRDC and David had been rescinded that the
installment payments made by David had been forfeited, that it is FRDC who should refund the said
installment payments to David are mere matters of defense which are not proper in a petition for
certiorari (Planters Products Inc. vs. CA, 193 SCRA 563: Commercial Corp. vs. PNB 175 SCRA 1).

In Solid Homes Inc. vs. Payawal, 177 SCRA 72, we struck down the exercise of jurisdiction by the
Regional Trial Court of Quezon City over a lot buyer's complaint for delivery of title against the
subdivision owner.

In Antipolo Realty Corporation vs. NHA, 153 SCRA 399, this Court, citing PD Nos. 957 and 1344,
upheld the jurisdiction of the National Housing Authority to determine the rights of the parties under
the contract to sell a subdivision lot.

In the more recent case of CT Torres Enterprises vs. Hibionada, 191 SCRA 268, we affirmed the
HLURB's jurisdiction to hear and decide a complaint for specific performance of the seller's
obligation to deliver the title of a subdivision lot to the buyer, with damages.

We hold that the jurisdiction of the HLURB to regulate the real estate trade is broad enough to
include jurisdiction over complaints for specific performance of the sale, or annulment of the
mortgage, of a condominium unit, with damages.

WHEREFORE, the instant petition is DISMISSED with costs against the petitioner.

SO ORDERED.

G.R. No. 108547 February 3, 1997

FELICIDAD VDA. DE CABRERA, MARYJANE CABRERA and FELICIDAD

TEOKEMIAN, Petitioners, v. COURT OF APPEALS and VIRGILIA ORAIS
DE FELICIO, represented by her Attorney-in-Fact, ERNESTO M.
ORAIS, Respondents.

TORRES, JR., J.:

Assailed in this Petition for Review on Certiorari is the Decision 1 of the
respondent Court of Appeals dated January 7, 1993 in CA-G.R. No. 22407-
CV, the dispositive portion of which reads:

WHEREFORE, the decision of the lower court is hereby REVERSED and

judgment is hereby entered ordering defendants Felicidad Vda. de Cabrera
and Marykane Cabrera to vacate the portion of Lot 2238 occupied by them
and surrender possession thereof to plaintiff.

SO ORDERED.

Reversed by the foregoing pronouncements was the decision 2 of the

Regional Trial Court, Branch 7, Baganga, Davao Oriental in Civil Case No.
379, an action for "Quieting of Title to Real Property, Damages with
Preliminary Injunction." The trial court's disposition reads:

WHEREFORE, the plaintiff is hereby ordered:

(a) to execute a reconveyance within thirty (30) days after this decision shall
have become final and executory in favor of defendant Felicidad Vda. De
Cabrera corresponding only to that portion of Lot No. 2239 actually and
physically possessed and occupied by the defendant as seen from the sketch
plan of Engr. Enecio Magno (Exh. "2") and pinpointed and identified during
the ocular investigation as to its extent and boundaries of the said portion
bought by defendants Felicidad Vda. De Cabrera from Felicidad Teokemian;

(b) To reimburse defendants for litigation expenses and attorney's fees in

the amount of P7,000.00; and

(c) To pay the cost.

SO ORDERED.

We are restating the facts as determined by the appellate court, viz:

On January 16, 1950, a Deed of Sale (Exh. B) was executed by Daniel

Teokemian and Albertana Teokemian in favor of Andres Orais over a parcel
of unregistered land situated at Abejod, Cateel, Davao Oriental with an area
described as 7.3720 hectares. The property was owned in common by Daniel
and Albertana and their sister Felicidad Teokemian, having inherited the
same from their late father, Domingo Teokemian. However, the Deed of Sale
was not signed by Felicidad, although her name was printed therein as one
of the vendors. On January 26, 1950, the parcel of land was surveyed in the
name of Virgilia Orais, daughter of the vendee Andres Orais, and
denominated as Lot No. 2239, PLS-287, Cateel Cadastre. As surveyed, the
property had an area of 11.1000 hectares.

On June 24, 1957, Virgilia Orais was issued Free Patent No. V-79089.
Original Certificate of Title No. P-10908 was issued in her name (Exh. A).

On July 27, 1972, Alberto (sic Albertana) Teokemian executed a Deed of

Absolute Sale conveying to Elano Cabrera, husband of Felicidad Cabrera,
"ONE HALF PORTION OF LOT NO. 2239. Cad-287, eastern portion,
containing an area of FIFTY FIVE THOUSAND FIVE HUNDRED TEN (55,510)
SQUARE METERS, more or less" (Exh. 3), which portion supposedly
corresponded to the one-third share in Lot 2239 of Felicidad Teokemian who
was not a party to the Deed of Sale earlier executed by her brother and
sister in favor of Andres Orais, Virgilia Orais' predecessor-in-interest. It was
explained by Felicidad Cabrera that the Deed of Sale was signed by
Albertana Teokemian, not by Felicidad Teokemian, because the whole of Lot
2239 was adjudicated to Albertana in a decision of a cadastral court dated
June 8, 1965 as evidenced by a Certification of an officer-in-charge of the
Office of the Clerk of Court, RTC, Br. 7, Baganga, Davao Oriental (Exh. 4).
Felicidad Cabrera and her husband immediately took possession of the
western portion of Lot 2239.

In 1974 and 1978, Virgilia Orais' brothers, Rodolfo and Jimmy Orais went to
Cateel, Davao Oriental and confronted the Cabreras of the latter's alleged
encroachment and illegal occupation of their sister's land, but no concrete
action on the matter was pursued by Virgilia Orais until February 11, 1988
when she filed Civil Case No. 379 against Felicidad Cabrera, now a widow,
and her daughter Marykane Cabrera for "Quieting of Title to Real Property,
Damages with Preliminary Mandatory Injunction."

The complaint, which was amended on June 22, 1988 by including Felicidad
Teokemian as party defendant (pp. 42-47, Records), alleged that sometime
in 1972 and 1973 the late Elano Cabrera and defendant Felicidad Cabrera,
knowing that Lot 2239 was already registered in the name of the plaintiff,
prepared a document of sale and had Felicidad Teokemian sign it conveying
a portion of said lot to them as described in the Sketch Map (Annex D of the
Complaint), after which they entered and possessed said portion and
enjoyed the fruits thereon. Plaintiff further averred that by reason of the
document of sale and the declaration of the property involved in the name of
defendant Felicidad Vda. De Cabrera, there created a cloud of doubt on the
former's title on said property.

Plaintiff prayed as follows:

WHEREFORE premises considered, plaintiff through the undersigned counsel
respectfully prays this Honorable Court that:

a) After due notice and hearing, a Writ of Preliminary Mandatory Injunction

be issued restraining the defendants from further dispossessing the plaintiff
of the land in question;

b) Ordering the defendants to pay jointly the plaintiff the amount of not less
than Sixteen Thousand Two Hundred (P16,200) as total value of the rice
produced from the riceland in question, and the amount of Twenty One
Thousand Six Hundred (P21,600.00) Pesos as the total proceeds of the nuts
of the coconut land in question;

c) The Defendants be ordered to pay the plaintiff the amount of Twenty

Thousand (P20,000.00) Pesos and Ten Thousand (P10,000.00) Pesos as
litigation expenses;

d) The defendants be ordered to pay Six Thousand (P6,000.00) Pesos for

attorney's fees; Four Hundred (P400.00) Pesos as expenses for every
appearance in Court;

e) The document of sale executed by Felicidad Teokemian and the Tax

Declarations issued to the late Elano Cabrera and Felicidad Vda. De Cabrera
and the subsequent Tax Declaration creating a cloud of doubt on the title,
possession, rights and interest be declared null and void for being fraudulent
and without any legal basis and inexistent; and

f) Such other reliefs and remedies which this Honorable Court may deem
just, proper, and equitable in the premises.'

In their answer with counterclaim (pp. 10-18, Records), defendants alleged

that they acquired a portion of Lot 2239 in good faith and for value; that
said portion was owned by Felicidad Teokemian who was not a party to the
Deed of Sale executed by Daniel and Albertana Teokemian on January 16,
1950 in favor of Andres Orais over Lot 2239; that not having signed the
Deed of Sale, Felicidad Teokemian's one-third share in Lot 2239 could not
have been legally conveyed to Andres Orais; that Virgilia Orais (successor-
in-interest of Andres Orais) committed fraud in including the portion owned
by Felicidad Teokemian in her applying for free patent over Lot 2239 is
concerned pursuant to Art. 1456 of the Civil Code; and that plaintiff is guilty
of laches for not initiating an action against defendants to recover the
western portion of Lot 2239 despite plaintiff's knowledge of defendant's
acquisition thereof in 1972, as in fact it was only in 1988 when the complaint
for quieting of title was filed in court.
Defendants prayed, thus:

"WHEREFORE, this Honorable Court, after due notice and hearing on the
merits of this case; to issue order or orders;

1. Finding the defendants as the rightful, lawful, and legal owner of that
portion which was sold to them by Felicidad Teokemian and which was
included in the title of plaintiff;

2. To find that the plaintiff did not own the said portion and that they have
personal knowledge of the same when the plaintiff filed and secured the title
under the Administrative Proceeding;

3. Finding that the plaintiff is only holding the title to that portion only in an
implied trust in favor of the real owner;

4. Finding the plaintiff legally obligated to cause the segregation of the

portion at their expense and deliver formally the said portion to the real
owners, the defendants.

5. To order the plaintiff to execute, prepare and or make any instrument or

document to finally vest in the Defendants absolute, clear and flawless title
or ownership over the portion which the plaintiff holds title in trust in
defendant's favor.

6. To Order the Plaintiff to pay actual damages in the sum of P2,000.00 as

litigation expense and Attorney's fees in the sum of P5,000.00 in favor of
defendants;

7. To direct the plaintiff to account for the share of the real owner of the
portion of land illegally cultivated and planted by plaintiff to rice in favor of
FELICIDAD TEOKEMIAN to be paid thru the Defendants who are the owners,
which consisted in ONE THIRD OF THE RICE HARVEST every year since the
year 1950 to 1972 when the portion was sold and cultivated by defendant
based on the computation of income by the plaintiff in Paragraph 16, a
paragraph in the Second Cause of Action of the complaint;

and to grant the defendants such other reliefs and remedies proper and
equitable in the premises. 3

On April 27, 1989, the lower court rendered judgment in favor of defendants
and against the plaintiff, ruling that the latter can no longer recover the
western portion of Lot 2239 conveyed in 1972 by Felicidad Teokemian in
favor of the late Elano Cabrera and Felicidad Cabrera due to laches. In
support of its findings, the trial court referred to the Court's pronouncements
in Lola vs. Court of Appeals 4, where it was held that although the defense of
prescription is unavailing to the petitioners, because, admittedly, the title to
the subject lot was still registered in the name of the respondent, still the
petitioners have acquired title to it by virtue of the equitable principle of
laches due to the respondent's failure to assert her claim and ownership for
thirty-two years; and in Republic vs. Court of Appeals 5 that, while it is true
that by themselves tax receipts and declaration of ownership for taxation
purposes are not incontrovertible evidence of ownership, they become
strong evidence of ownership acquired by prescription when accompanied by
proof of actual possession of the property; and in Miguel vs. Catalino, 6 that
even granting appellant's proposition that no prescription lies against their
fathers' recorded title, their passivity and inaction for more than thirty four
years justifies the defendant appellee in setting up the equitable defense of
laches in his own behalf.

The respondent Court of Appeals reversed such findings upon appeal.

Even as the appellate court observed that the registration made by the
plaintiff was fraudulent insofar as it involved the one-third interest of
Felicidad Teokemian, which was not included in the sale executed by
Albertana and Daniel Teokemian, it nevertheless upheld its effects, on the
justification that the defendants' action for reconveyance based on an
implied trust had already been barred by prescription. Furthermore, the
action of the plaintiff is not barred by laches as was held by the lower court.

Said the appellate court:

We disagree with the lower court's ruling that plaintiff is barred from
bringing an action for recovery of ownership. Parenthetically, while the
complaint filed by plaintiff is designated as one for quieting of title, the
allegations therein show that it is actually for recovery of
ownership/possession.

First. The Deed of Absolute Sale dated May 27, 1972 (Exh. 3) executed by
Albertana Teokemian in favor of Elcano Cabrera over the portion of 55,510
square meters of Lot 2238 which allegedly pertained to the one-third
interest of Felicidad Teokemian did not convey any title to Elcano Cabrera,
assuming that Felicidad Teokemian still owned a one-third portion of Lot
2238 which was already registered in plaintiffs name, considering that
Albertana did not have any authority from Felicidad Teokemian to effect such
conveyance. Consequently, defendants Felicidad vda. De Cabrera and
Marykane Cabrera had acquired no title upon which to anchor their claim of
ownership over the one-third portion. Such being the case, plaintiffs cannot
be barred by laches from instituting the action to quiet title against
defendants

xxx xxx xxx

Second. There was no allegation, much less proof, that Lot 2239 had been
partitioned among the co-owners Daniel, Albertana, and Felicidad, all
surnamed Teokemian, before the land was sold to Andres Orais in 1950
when the same was still unregistered. This being the case, and assuming
that Felicidad Teokemian had retained ownership over an undivided one-
third portion of Lot 2239 despite its being titled in plaintiffs name in 1958,
Felicidad Teokemian could only dispose her undivided interest, not a definite
portion described in the Deed of Sale executed on July 27, 1972 (Exh. 3) as
"eastern part". Worse, the supposed vendee, Elcano Cabrera, and her
successors-in-interest, defendants Felicidad vda. de Cabrera and Marykane
Cabrera, occupied the western portion of Lot 2239, not the eastern portion
which was the subject of the sale. Their occupation of a definite portion of an
undivided property, without any color of title, could not have ripened into
ownership on the principle of laches.

Third. As testified to by Jimmy Orais, plaintiff's brother, it was only in 1974

when plaintiff came to know that her property was occupied by Elcano
Cabrera. According to Jimmy, he and his elder brother Dr. Rodolfo Orais
went to the house of Elcano Cabrera three times in 1974 and in 1979
complaining of the latter's occupancy of their sister's property. Jimmy
further declared that after Elcano Cabrera was shown plaintiffs title to the
property, Elcano Cabrera proposed a relocation survey of the area to
determine whether the premises occupied by him were included in the
plaintiff's title (T.S.N. pp. 39-44, January 3, 1989). It appears, however,
that nothing came out of the proposal to conduct a relocation survey. From
the time plaintiff became aware of Cabrera's possession of the western
portion of Lot 2239, which was in 1974, up to the time she instituted the
action for quieting of title in 1988, only fourteen (14) years had elapsed.
This case, therefore, has no congruency with those cases where the
Supreme Court ruled that the registered owner is barred by laches from
recovering his property. Thus, in Lola vs. Court of Appeals (145 SCRA 439),
the petitioners acquired title to the land owned by respondent by virtue of
the equitable principles of laches due, according to the Supreme Court, to
respondent's failure to assert her claims and ownership for thirty-two (32)
years.' In Miguel vs. Catalino (26 SCRA 234), the Supreme Court said that
appellants 'passivity and inaction for more than 34 years (1928-1962)
justifies the defendant-appellee in setting up the equitable defense of laches
in his behalf.' In Mejia vs. Gampomana (100 Phil 277), it was held that "the
original owner's right to recover back the possession of the property and title
thereto from the defendant has by the long period of 37 years and by the
patentee's inaction and neglect been converted into a stale demand."

Laches, in a general sense, is failure or neglect, for an unreasonable and

unexplained length of time, to do that which, by the exercise of due
diligence, could or should have been done earlier; it is negligence or
omission to assert a right within a reasonable time, warranting a
presumption that the party entitled to assert it (Tijam vs. Sibonghanoy, 32
SCRA 29). Since imprescriptibility is one of the basic features of a Torrens
title, it is not an ordinary delay in asserting one's right that will give rise to
the application of the principle of laches, otherwise, registered title can
easily be defeated by prescription. This is precisely the reason why, in the
cases cited, the delay or inaction by the registered owners in asserting their
rights was considered unreasonable and unexplained because it took them
from 32 to 37 years to do so. In contrast, the delay in the case at bar was
only fourteen years.

While possession of defendants Felicidad vda. De Cabrera and Marykane

Cabrera could not have ripened into ownership as already discussed, they
are possessors in good faith of the portion occupied by them and, therefore,
entitled to the benefits accorded by the Civil Code as such. 7

Sisters Felicidad Vda. de Cabrera and Marykane Cabrera, together with

Felicidad Teokemian are now before the Court as Petitioners in this Petition
for Review on Certiorari, seeking relief from the respondent court's decision,
assigning as errors the following:

RESPONDENT COURT OF APPEALS ERRED IN RULING THAT PRIVATE

RESPONDENT'S COMPLAINT FILED IN 1988 FOR QUIETING OF TITLE WHICH
ACTUALLY IS ONE FOR RECOVERY OF OWNERSHIP AND POSSESSION AS
FOUND BY RESPONDENT COURT IS NOT BARRED BY LACHES BECAUSE:

1. A PERIOD OF 30 YEARS HAD ELAPSED FROM 1958 WHEN TORRENS TITLE

WAS ISSUED TO PRIVATE RESPONDENT TO 1988 WHEN HER COMPLAINT
BELOW WAS FILED DURING WHICH PERIOD OF TIME THE PROPERTY HAS
BEEN IN OPEN, CONTINUOUS AND ADVERSE POSSESSION OF THE
ORIGINAL OWNER, FELICIDAD TEOKEMIAN, FROM 1958, OR EVEN EARLIER
IN 1941 WHEN SHE INHERITED THE PROPERTY, TO 1972 WHEN SHE SOLD
IT TO THE CABRERAS WHO CONTINUED THE PRIOR POSSESSION UNTIL
1988 WHEN PRIVATE RESPONDENT'S COMPLAINT WAS FILED.

2. ASSUMING ARGUENDO RESPONDENT COURT'S HOLDING THAT ONLY 14

YEARS HAD ELAPSED COUNTED FROM 1974 WHEN CABRERAS' POSSESSION
WAS QUESTIONED BY PRIVATE RESPONDENT'S BROTHERS, STILL THAT
PERIOD CONSTITUTES LACHES.

RESPONDENT COURT OF APPEALS ERRED IN HOLDlNG THAT LACHES DOES

NOT APPLY BECAUSE WHAT WAS SOLD TO THE CABRERAS WAS A DEFINITE
PORTION OF THE COMMUNITY PROPERTY BEFORE PARTITION, HENCE, VOID
AND THAT ALBERTANA TEOKEMIAN WHO SIGNED THE DOCUMENT OF SALE
IN FAVOR OF THE CABRERAS HAD NO AUTHORITY FROM HER SISTER-CO-
OWNER FELICIDAD TEOKEMIAN TO EXECUTE THE DEED OF CONVEYANCE. 8

The bone of the petitioners' contention rests on the alleged waiver of the
plaintiff to recover any interest she had in the one-third portion of the
property inherited by Daniel, Albertana and Felicidad Teokemian from their
late father, Domingo, due to the long period of time which lapsed from the
time the plaintiff's title was registered until the action for quieting of title
was instituted.

We find merit in the petition.

At the outset, it must be observed that the Certificate of Title of the plaintiff,
which was derived from Free Patent No. V-79089, issued in the name of
Virgilia Orais, leaves much to be desired in propriety, considering that the
Deed of Sale executed by Daniel and Albertana Teokemian, on one hand and
Andres Orais on the other, did not bear the signature of Felicidad Teokemian
and therefore did not cover the latter's share.

It was the respondent appellate court which observed that "the registration
of the plaintiff's title over the subject property was fraudulent insofar as it
involved the one-third interest of Felicidad Teokemian who did not sign the
Deed of Sale in favor of plaintiff's predecessor-in-interest and, therefore, the
latter held that portion as a trustee of an implied trust for the benefit of
Felicidad, pursuant to Art. 1456 of the Civil Code." 9 Needless to state, these
conclusions, being matters of fact, are entitled to our full affirmation, since
they are congruent with the findings of trial court, thus:

It would seem from the facts of the case that the basis of the right of
plaintiff over the land in litigation specifically Lot No. 2239 now titled in the
name of the plaintiff, located at Buayahon, Abejod, Cateel, Davao Oriental,
proceeded from the Deed of Sale executed by Daniel Teokemian and
Albertana Teokemian on January 16, 1950 acknowledged before Judge
Proserador Danao as Notary Ex Oficio. Taking a hard look over the aforesaid
deed of sale (Exh. "B") the said document apparently included the third heir
of Domingo Teokemian Felicidad Teokemian because her name was
typewritten together with her sister Albertana and brother Daniel all
surnamed Teokemian in the said document. Again this fact will come to mind
that the vendee Andres Orais was anticipating at the time Felicidad
Teokemian will also sell her share in this portion of land (Lot No. 2239)
which at the time of the sale it was still unregistered land. The non-signing
of Felicidad Teokemian over her typewritten name in this deed of sale (Exh.
"B") will attest to the fact that she did not sell her share in the lot in
question. Alter this sale the vendee Andres Orais through his encargado
Melecio Capilitan and later Servillano Abarca immediately took possession of
the two third portion of said parcel of land respecting the third portion
owned by Felicidad Teokemian." 10

However, the appellate court stated further that nonetheless, the plaintiff's
attempt to recover the property is justified because defendant Felicidad
Teokemian's own action for reconveyance has already been barred by
prescription, 11 which is the same as stating that the very tardiness of the
plaintiff in pursuing the present action for reconveyance of the subject
property has rendered the defendants' defense nugatory, and has made the
fortress of the plaintiff's case impregnable.

This conclusion is incorrect. As can be discerned from the established facts,

the Certificates of Title of the vendees Orais are, to say the least, irregular,
and were issued in a calculated move to deprive Felicidad Teokemian of her
dominical rights over the property reserved to her by descent. Plaintiff could
not have registered the part reserved to Felicidad Teokemian, as this was
not among those ceded in the Deed of Sale between Daniel/Albertana
Teokemian and Andres Orais. It must be remembered that registration does
not vest title, it is merely evidence of such title over a particular property.
(Embrado vs. Court of Appeals) 12

The defense of indefeasibility of the Torrens Title does not extend to a

transferee who takes the certificate of title with notice of a flaw in his title.

(Anonuevo vs. Court of Appeals) 13 The principle of indefeasibility of title is

unavailing where there was fraud that attended the issuance of the free
patents and titles.(Meneses vs. Court of Appeals) 14

Be that as it may, that the right of the defendants for reconveyance of the
subject property arising from an implied trust under Article 1456 of the Civil
Code is material to the instant case, such remedy has not yet lapsed, as
erroneously submitted by the plaintiff, and, is thus, a bar to the plaintiff's
action. In the case of Heirs of Jose Olviga vs. Court of Appeals, 15 we
observed that an action for reconveyance of a parcel of land based on
implied or constructive trust prescribes in ten years, the point of reference
being the date of registration of the deed or the date of the issuance of the
certificate of title over the property, but this rule applies only when the
plaintiff or the person enforcing the trust is not in possession of the
property, since if a person claiming to be the owner thereof is in actual
possession of the property, as the defendants are in the instant case, the
right to seek reconveyance, which in effect seeks to quiet title to the
property, does not prescribe. The reason for this is that one who is in actual
possession of a piece of land claiming to be the owner thereof may wait until
his possession is disturbed or his title is attacked before taking steps to
vindicate his right, the reason for the rule being, that his undisturbed
possession gives him a continuing right to seek the aid of a court of equity to
ascertain and determine the nature of the adverse claim of a third party and
its effect on his own title, which right can be claimed only by one who is in
possession.

As it is, before the period of prescription may start, it must be shown that
(a) the trustee has performed unequivocal acts of repudiation amounting to
an ouster of the cestui que trust, (b) such positive acts of repudiation have
been made known to the cestui que trust, and, (c) the evidence thereon is
clear and positive. 16

In the case at bar, the defendant Felicidad Teokemian, and thereafter, the
Cabreras, were in actual possession of the property since it was left to
Felicidad Teokemian by her father in 1941, which possession had not been
interrupted, despite the sale of the two-third portion thereof to the plaintiff
in 1950, and the latter's procurement of a Certificate of Title over the
subject property in 1957. Until the institution of the present action in 1988,
plaintiff, likewise, had not displayed any unequivocal act of repudiation,
which could be considered as an assertion of adverse interest from the
defendants, which satisfies the above-quoted requisites. Thus, it cannot be
argued that the right of reconveyance on the part of the defendants, and its
use as defense in the present suit, has been lost by prescription.

On the other hand, the action for reconveyance (quieting of title) of the
plaintiff was instituted only in 1988, that is, thirty years from the time the
plaintiff's husband was able to acquire Certificate of Title covering the
properties inherited by the Teokemians, and apparently including that
portion belonging to Felicidad Teokemian. In the meantime, defendant
Felicidad vda. De Cabrera and her late husband have been actively in
possession of the same, tilling it, and constructing an irrigation system
thereon. This must surely constitute such tardiness on the part of the
plaintiff constituting the basis for laches.
Laches has been defined as the failure or neglect, for an unreasonable and
unexplained length of time, to do that which by exercising due diligence
could or should have been done earlier, it is negligence or omission to assert
a right within a reasonable time, warranting a presumption that the party
entitled to assert it either has abandoned it or declined to assert it. 17 The
defense of laches is an equitable one and does not concern itself with the
character of the defendants title, but only with whether or not by reason of
plaintiffs long inaction or inexcusable neglect, he should be barred from
asserting his claim at all, because to allow him to do so would be inequitable
and unjust to defendant. Laches is not concerned merely with lapse of time,
unlike prescription. While the latter deals with the fact of delay, laches deals
with the effect of unreasonable delay. 18

This Court emphasized in Mejia de Lucas vs. Gampona, 19 the reason upon
which the rule is based is not alone the lapse of time during which the
neglect to enforce the right has existed, but the changes of condition which
may have arisen during the period in which there has been neglect. In other
words, where a court finds that the position of the parties has to change,
that equitable relief cannot be afforded without doing injustice, or that the
intervening rights of third persons may be destroyed or seriously impaired, it
will not exert its equitable powers in order to save one from the
consequences of his own neglect.

In our jurisdiction, it is an enshrined rule that even a registered owner of

property may be barred from recovering possession of property by virtue of
laches. Under the Land Registration Act (now the Property Registration
Decree), no title to registered land in derogation to that of the registered
owner shall be acquired by prescription or adverse possession. The same is
not true with regard to Laches. 20 As we have stated earlier in Mejia de
Lucas vs. Gamponia, while the defendant may not be considered as having
acquired title by virtue of his and his predecessor's long continued
possession (37 years) the original owner's right to recover back the
possession of the property and the title thereto from the defendant has, by
the latter's long period of possession and by patentee's inaction and neglect,
been converted into a stale demand.

The argument that laches does not apply because what was sold to the
Cabreras was a definite portion of the community property, and, therefore,
void, is likewise untenable.

Under Article 493 of the Civil Code:

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

In Go Ong vs. Court of Appeals, 21 this Court ruled that the heirs, as co-
owners, shall each have the full ownership of his part and the fruits and
benefits pertaining to it. An heir may, therefore, alienate, assign or
mortgage it, and even substitute another person in its enjoyment, except
when the personal rights are involved. But the effect of the alienation or
mortgage, with respect to the co-owners, shall be limited to the portion
which may be allotted to him in the division upon the termination of the co-
ownership.

Undisputed is the fact that since the sale of the two-third portion of the
subject property to the plaintiff, the latter had allowed Felicidad Teokemian
to occupy that one-third portion allotted to her. There has, therefore, been a
partial partition, where the transferees of an undivided portion of the land
allowed a co-owner of the property to occupy a definite portion thereof and
has not disturbed the same, for a period too long to be ignored--the
possessor is in a better condition or right (Potior est conditio possidentis).

Clearly, the plaintiff in this instance is barred from asserting her alleged right
over the portion subject matter in the instant case on the ground that their
right has been lost by laches. In Bailon-Casilao vs. Court of Appeals, we
ruled that:

As early as 1923, this Court has ruled that even if a co-owner sells the whole
property as his, the sale will affect only his own share but not those of the
other co-owners who did not consent to the sale (Punzalan vs. Boon Liat, 44
Phil 320 [1923]). This is because under the aforementioned codal provision,
the sale or other disposition affects only his undivided share and the
transferee gets only what would correspond to his grantor in the partition of
the things owned in common (Ramirez vs. Bautista, 14 Phil 528 [1909]). . . .
For Article 494 of the Civil Code explicitly declares: "No prescription shall lie
in favor of a co-owner or co-heir so long as he expressly or impliedly
recognizes the co-ownership. 22

IN VIEW WHEREOF, the petition is hereby GRANTED. The decision of the

Court of Appeals dated January 7, 1993 is hereby SET ASIDE. The decision
of the trial court dated April 27, 1989 is hereby REINSTATED in toto.

SO ORDERED
 [G.R. No. L-59974. March 9, 1987.]

TEODORA, MARTA, JOSE, SIXTO, RICARDO, ROBERTO, PILAR, VIRGILIO, all surnamed MARIANO
and AURORA EUGENIO, Petitioners, v. THE HON. JUDGE JESUS R. DE VEGA, PRESIDING JUDGE,
COURT OF FIRST INSTANCE OF BULACAN, BRANCH II, PILAR, REGINA, FELISA and DOMINADOR
all surnamed PANGANIBAN, Respondents.

Ernesto T. Zshornack, Jr., for Petitioners.

Emiliano S. Samson for Private Respondents.

DECISION

PARAS, J.:

This is an appeal from the order of the then Court of First Instance of Bulacan in Civil Case No. 6200-M **
for partition and delivery of possession of certain shares in the conjugal assets. The dispositive portion of
the order which herein petitioners assail states: jgc:chanrobles.com.ph

"Upon due research and study, the Court finds sustainable the position of the defendants that the settled
prevailing rule at present as laid down in latest decisions of the Supreme Court is that the right or action to
enforce an implied or constructive trust (which is the situation indicated in the case at bar) in one’s favor
prescribes in ten (10) years. The citation of authorities made by defendants appears to be correct. (Carontes
v. C.A., 76 SCRA 514; Dela Cerna v. Dela Cerna, 72 SCRA 514). In other words, the rule of imprescriptibility
of actions based on constructive trust invoked by plaintiffs has been reversed and abandoned.

For the foregoing premises, this case has to be resolved for defendants-movants. Case is accordingly
dismissed. No costs." cralaw virtua1aw library

The records show that spouses Urbano Panganiban and Roberta Espino owned, as conjugal property, during
their lifetime 29 parcels of unregistered land with improvements thereon, all situated in Dampol 1st, Pulilan,
Bulacan. On February 18, 1903, Roberta Espino died intestate and without debts in Pulilan, Bulacan, where
she was a resident before and at the time of her death. She left her husband, Urbano Panganiban, and their
two legitimate children, Mercedes and Gaudencia as her only forced heirs. On September 18, 1952, Urbano
Panganiban died also intestate and without debts in Pulilan, Bulacan, leaving as his only compulsory heirs
the children of Gaudencia (who together with her sister Mercedes, had predeceased their father) who are
now petitioners herein and his legitimate children with his second wife, Atanacia Agustin, who are the
private respondents herein.

The records also disclose that on June 19, 1981, or 28 years, 9 months and 1 day after Urbano’s death,
petitioners instituted an action with the then CFI of Bulacan for partition and delivery of possession of their
corresponding shares in the conjugal estate of decedents-spouses Urbano and Roberta consisting of subject
29 parcels of unregistered land. Petitioners filed the case because since the death of Urbano, their
grandfather, in 1952, private respondents (his children by the second marriage) had taken possession of the
whole conjugal property and appropriated to themselves to the exclusion of petitioners the products coming
from the 29 parcels of land. chanrobles virtual lawlibrary

On September 30, 1981 or around three (3) months from the filing of the civil case, respondent judge
issued the questioned order. Petitioners’ motion for reconsideration of the same was denied on January 12,
1982.

Hence, this petition which petitioners filed on April 5, 1982 praying for the revocation of the questioned
order and the reinstatement of this case in the trial court.

Petitioners anchor their petition on the following grounds: chanrob1es virtual 1aw library

1. The subject parcels of land being unregistered lands do not come within the applicability of the decisions
invoked which involve registered lands;

2. Assuming that the ten-year prescriptive period applies even in cases of unregistered lands, the
prescriptive period did not commence to run against petitioners since there is no allegation, much less
evidence, that private respondents had openly and effectively repudiated the co-ownership or constructive
trust over the subject property;

3. There can be no constructive notice of an adverse claim of ownership in favor of private respondents by
placing the subject lands in their names in the office of the Provincial Assessor; and

4. Petitioners’ action for partition is still timely despite the lapse of almost 29 years during which private
respondents had been in possession of the property.

Private respondents, on the other hand, contend that the order appealed from has already become final and
no longer appealable; and, that the petition is not meritorious because of the following: chanrob1es virtual 1aw library

1. The theory of constructive trust was brought out by petitioners themselves;

2. Petitioners cannot contradict their own admissions in the pleadings;

3. Petitioners slept on their alleged rights; and

4. Contrary to petitioners’ claim, the jurisprudence cited by private respondents apply to unregistered
lands. chanrobles virtual lawlibrary

The resolution of this case hinges on the focal issue of prescription.

We find the order of the trial court dismissing petitioners’ complaint on the ground of prescription under
Section 40 of Public Act No. 190 to be inaccurate.

As We see it, this case is governed by the rules on co-ownership, since both parties are clearly co-owners of
the disputed properties, having inherited the same from a common ancestor.

Now then, Art. 494 (last paragraph) of the Civil Code provides: red:chanrobles.com.ph

"x       x       x

"No prescription shall run in favor of a co-owner or co-heir against his co-owners or co-heirs so long as he
expressly or impliedly recognizes the co-ownership." cralaw virtua1aw library

In view of their lack of a clear repudiation of the co-ownership, duly communicated to the petitioners (the
other co-owners), private respondents cannot acquire the shares of the petitioners by prescription. The
record in the Office of the Assessor is not the sufficient repudiation and communication contemplated by the
law. Neither may the private respondents’ possession of the premises militate against petitioners’ claim.
After all, co-owners are entitled to be in possession of the premises.

The existence of the co-ownership here argues against the theory of implied trust, for then a co-owner
possesses co-owned property not in behalf of the other co-owners but in his own behalf.

Anent the contention that the judgment of the trial court has already become final and executory, the
records reveal the contrary. The appeal was filed on time on April 5, 1982 or before April 28, 1982, the last
day granted by this Court for the filing of the appeal. chanrobles law library

WHEREFORE, the assailed Order is SET ASIDE, and a new one is rendered remanding this case to the lower
court for adjudication on the merits.

SO ORDERED.

G.R. No. 108947 September 29, 1997

ROLANDO SANCHEZ, FLORIDA MIERLY SANCHEZ, ALFREDO T. SANCHEZ and
MYRNA T. SANCHEZ, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, ROSALIA S. LUGOD, ARTURO S.
LUGOD, EVELYN LUGOD-RANISES and ROBERTO S. LUGOD, respondents.

PANGANIBAN, J.:

Is a petition for certiorari, in lieu of appeal, the proper remedy to correct orders of a probate
court nullifying certain deeds of sale and, thus, effectively passing upon title to the properties
subject of such deeds? Is a compromise agreement partitioning inherited properties valid even
without the approval of the trial court hearing the intestate estate of the deceased owner?

The Case

These questions are answered by this Court as it resolves the petition for review on certiorari
before us assailing the November 23, 1992 Decision of the Court of Appeals in CA-G.R. SP No.
1 2

28761 which annulled the decision of the trial court and which declared the compromise
3 4

agreement among the parties valid and binding even without the said trial court's approval. The
dispositive portion of the assailed Decision reads:

WHEREFORE, for the reasons hereinabove set forth and discussed, the instant
petition is GRANTED and the challenged decision as well as the subsequent
orders of the respondent court are ANNULLED and SET ASIDE. The temporary
restraining order issued by this Court on October 14, 1992 is made
PERMANENT. The compromise agreement dated October 30, 1969 as modified
by the memorandum of agreement of April 13, 1970 is DECLARED valid and
binding upon herein parties. And Special Proceedings No. 44-M and 1022 are
deemed CLOSED and TERMINATED.

SO ORDERED. 5

The Antecedent Facts

The facts are narrated by the Court of Appeals as follows:

[Herein private respondent] Rosalia S. Lugod is the only child of spouses Juan C.
Sanchez and Maria Villafranca while [herein private respondents] Arturo S.
Lugod, Evelyn L. Ranises and Roberto S. Lugod are the legitimate children of
[herein private respondent] Rosalia.

[Herein petitioners] Rolando, Florida Mierly, Alfredo and Myrna, all surnamed
Sanchez, are the illegitimate children of Juan C. Sanchez.
Following the death of her mother, Maria Villafranca, on September 29, 1967,
[herein private respondent] Rosalia filed on January 22, 1968, thru counsel, a
petition for letters of administration over the estate of her mother and the estate of
her father, Juan C. Sanchez, who was at the time in state of senility (Annex "B",
Petition).

On September 30, 1968, [herein private respondent] Rosalia, as administratrix of

the intestate estate of her mother, submitted an inventory and appraisal of the real
and personal estate of her late mother (Annex "C", Petition).

Before the administration proceedings Special in Proceedings No. 44-M could

formally be terminated and closed, Juan C. Sanchez, [herein private respondent]
Rosalia's father, died on October 21, 1968.

On January 14, 1969, [herein petitioners] as heirs of Juan C. Sanchez, filed a

petition for letters of administration (Special Proceedings No. 1022) over the
intestate estate of Juan C. Sanchez, which petition was opposed by (herein private
respondent) Rosalia. 6

On October 30, 1969, however, [herein private respondent] Rosalia and [herein
petitioners] assisted by their respective counsels executed a compromise
agreement (Annex "D", Petition) wherein they agreed to divide the properties
enumerated therein of the late Juan C. Sanchez.

On November 3, 1969, petitioner Rosalia was appointed by [the trial court], and
took her oath as the administratrix of her father's intestate estate.

On January 19, 1970, [herein petitioners] filed a motion to require administratrix,

[herein private respondent] Rosalia, to deliver deficiency of 24 hectares and or to
set aside compromise agreement (Annex "E", Petition).

Under date of April 13, 1970, (herein private respondent) Rosalia and [herein
petitioners] entered into and executed a memorandum of agreement which
modified the compromise agreement (Annex "F". Petition)

On October 25, 1979, or nine years later, [herein petitioners] filed, thru counsel, a
motion to require [herein private respondent] Rosalia to submit a new inventory
and to render an accounting over properties not included in the compromise
agreement (Annex "G", Petition). They likewise filed a motion to defer the
approval of the compromise agreement (Annex "H", Ibid), in which they prayed
for the annulment of the compromise agreement on the ground of fraud.

On February 4, 1980, however, counsel for [herein petitioners] moved to

withdraw his appearance and the two motions he flied, Annex "G" and "H"
(Annex "I", Petition).
On February 28, 1980, the [trial] court issued an order directing [herein private
respondent] Rosalia to submit a new inventory of properties under her
administration and an accounting of the fruits thereof, which prompted [herein
private respondent] Rosalia to file a rejoinder on March 31, 1980 (Annex "K",
Petition).

On May 12, 1980, [herein petitioners], thru new counsel, filed a motion to change
administratrix (Annex "L", Petition) to which [herein private respondent] Rosalia
filed an opposition (Annex "M", Ibid).

The parties were subsequently ordered to submit their respective position papers,
which they did (Annexes "N" and "O", Petition). On September 14, 1989, former
counsel of (herein petitioners) entered his re-appearance as counsel for (herein
petitioners).

On the bases of memoranda submitted by the parties, the [trial court], this time
presided by Judge Vivencio A. Galon, promulgated its decision on June 26, 1991,
the dispositive portion of which states:

WHEREFORE, premises considered, judgment is hereby rendered

as follows by declaring and ordering:

1. That the entire intestate estate of Maria Villafranca Sanchez

under Special Proceedings No. 44-M consists of all her
paraphernal properties and one-half (1/2) of the conjugal properties
which must be divided equally between Rosalia Sanchez de Lugod
and Juan C. Sanchez;

2. That the entire intestate estate of Juan C. Sanchez under Special

Proceedings No. 1022 consists of all his capital properties, one-
half (1/2) from the conjugal partnership of gains and one-half (1/2)
of the intestate estate of Maria Villafranca under Special
Proceedings No. 44-M;

3. That one-half (1/2) of the entire intestate estate of Juan C.

Sanchez shall be inherited by his only legitimate daughter, Rosalia
V. Sanchez de Lugod while the other one-half (1/2) shall be
inherited and be divided equally by, between and among the six (6)
illegitimate children, namely: Patricia Alburo, Maria Ramuso
Sanchez, Rolando Pedro T. Sanchez, Florida Mierly T. Sanchez,
Alfredo T. Sanchez and Myrna T. Sanchez;

4. That all the Deed (sic) of Absolute Sales executed by Juan C.

Sanchez and Maria Villafranca in favor of Rosalia Sanchez Lugod,
Arturo S. Lugod, Evelyn S. Lugod and Roberto S. Lugod on July
26, 1963 and June 26, 1967 are all declared simulated and
fictitious and must be subject to collation and partition among all
heirs;

5. That within thirty (30) days from finality of this decision,

Rosalia Sanchez Lugod is hereby ordered to prepare a project of
partition of the intestate estate of Juan C. Sanchez under Special
Proceedings No. 1022 and distribute and deliver to all heirs their
corresponding shares. If she fails to do so within the said thirty
(30) days, then a Board of Commissioners is hereby constituted,
who are all entitled to honorarium and per diems and other
necessary expenses chargeable to the estate to be paid by
Administratrix Rosalia S. Lugod, appointing the Community
Environment and Natural Resources Officer (CENRO) of Gingoog
City as members thereof, with the task to prepare the project of
partition and deliver to all heirs their respective shares within
ninety (90) days from the finality of said decision;

6. That within thirty (30) days from receipt of this decision,

Administratrix Rosalia Sanchez Vda. de Lugod is hereby ordered
to submit two (2) separate certified true and correct accounting,
one for the income of all the properties of the entire intestate estate
of Maria Villafranca under Special Proceedings No. 44-M, and
another for the properties of the entire intestate estate of Juan C.
Sanchez under Special Proceedings No. 1022 duly both signed by
her and both verified by a Certified Public Accountant and
distribute and deliver to her six (6) illegitimate brothers and sisters
in equal shares, one-half (1/2) of the net income of the estate of
Juan C. Sanchez from October 21, 1968 up to the finality of this
decision;

7. For failure to render an accounting report and failure to give

cash advances to the illegitimate children of Juan C. Sanchez
during their minority and hour of need from the net income of the
estate of Juan C. Sanchez, which adversely prejudiced their social
standing and pursuit of college education, (the trial court) hereby
orders Rosalia Sanchez Vda. de Lugod to pay her six (6)
illegitimate brothers and sisters the sum of Five Hundred Thousand
(P500,000.00) Pesos, as exemplary damages, and also the sum of
One Hundred Fifty Thousand (P150,000.00) Pesos for attorney's
fees;

8. Upon release of this decision and during its pendency, should

appeal be made, the Register of Deeds and Assessors of the
Provinces and Cities where the properties of Juan C. Sanchez and
Maria Villafranca are located, are all ordered to register and
annotate in the title and/or tax declarations, the dispositive portion
 of this decision for the protection of all heirs and all those who
may be concerned.

SO ORDERED.

[Herein private respondent] Rosalia filed a motion for reconsideration dated July
17, 1991 (Annex "P", Petition) on August 6, 1991.

On August 13, 1991, [herein petitioners] filed a motion for execution and
opposition to [herein private respondent] Rosalia's motion for reconsideration
(Annex "Q", Petition).

On September 3, 1991, [the trial court] issued an Omnibus Order (Annex "S",
Petition) declaring, among other things, that the decision at issue had become
final and executory.

[Herein private respondent] Rosalia then filed a motion for reconsideration of said
Omnibus Order (Annex "T", Petition). Said [herein private respondent] was
allowed to file a memorandum in support of her motion (Annex "V", Petition).

On June 26, 1991, [the trial court] issued and Order denying petitioner Rosalia's
motion for reconsideration (Annex "W", Petition). 7

Thereafter, private respondents elevated the case to the Court of Appeals via a petition for
certiorari and contended:

The [trial court] has no authority to disturb the compromise agreement.

II

The [trial court] has arbitrarily faulted [herein private respondent] Rosalia S.
Lugod for alleged failure to render an accounting which was impossible.

III

The [trial court] acted without jurisdiction in derogation of the constitutional

rights of [herein private respondents] Arturo S. Lugod, Evelyn L. Ranises and
Roberto S. Lugod when [the trial court] decided to annul the deed of sale between
the said [herein private respondents] and Juan C. Sanchez without affording them
their day in court.

IV
 [The trial court judge] defied without rhyme or reason well-established and
entrenched jurisprudence when he determined facts sans any evidence thereon.

[The trial court] grossly misinterpreted [herein private respondent] Rosalia S.

Lugod's right to appeal.8

For clarity's sake, this Court hereby reproduces verbatim the compromise agreement of the
9

parties:

COMPROMISE AGREEMENT

COME NOW, the parties in the above-entitled case, motivated by their mutual
desire to preserve and maintain harmonious relations between and among
themselves, for mutual valuable considerations and in the spirit of good will and
fair play, and, for the purpose of this Compromise Agreement, agree to the
following:

1. That the deceased Juan C. Sanchez who died intestate on October 21, 1968 was
legally married to Maria Villafranca de Sanchez, who predeceased her on
September 29, 1967, out of whose wedlock Rosalia Sanchez Lugod, Oppositor
herein, was born, thus making her the sole and only surviving legitimate heir of
her deceased parents;

2. That the said deceased Juan C. Sanchez, left illegitimate children, Intervenors-
Oppositors and Petitioners, respectively, herein namely;

(1) Patricio Alburo, born out of wedlock on March

17, 1926 at Cebu City, Philippines, to Emilia
Alburo;

(2) Maria Ramoso Sanchez, born out of wedlock on

May 9, 1937 at Gingoog, Misamis Oriental, now,
Gingoog City, to Alberta Ramoso;

(3) (a) Rolando Pedro Sanchez, born on May 19,

1947,

(b) Florida Mierly Sanchez, born on February 16,

1949,

(c) Alfredo Sanchez, born on July 21, 1950, and

 (d) Myrna Sanchez, born on June 16, 1952, all born
out of wedlock to Laureta Tampus in Gingoog City,
Philippines.

3. That the deceased Juan C. Sanchez left the following properties, to wit:

I. SEPARATE CAPITAL OF JUAN C. SANCHEZ

NATURE, DESCRIPTION AND AREA ASSESSED VALUE

(1) Agricultural Land. Covered by Tax. Decl. No. 06458, Cad. Lot No. 1041 C-2,
located at Murallon, Gingoog City and bounded on the North by Lot Nos. 1033,
1035, 1036, 1037, 1039, 1040, 1042 & 1043; South by Lot No. 1080, 1088, 1087
& 1084; East by Lot Nos. 1089, 1061 & 2319; West by Lot Nos. 954, 1038, 1057
& 1056, containing an area of ONE HUNDRED EIGHTY THREE THOUSAND
SIX HUNDRED SEVENTY TWO (183, 672) sq. ms. more or less.

P21,690.00

II. CONJUGAL PROPERTY OF JUAN C. SANCHEZ AND MARIA

VILLAFRANCA DE SANCHEZ

(1) Agricultural Land. Covered by Tax Decl. No. 06447, Cad. Lot No. 2745, C-7
located at Agay-ayan, Gingoog City and bounded on the North by Lot Nos. 2744,
2742, 2748; South by Lot No. 2739; East by Lot No. 2746; West by Lot No.
2741, containing an area of FOURTEEN THOUSAND SEVEN HUNDRED
(14,700) sq. ms. more or less.

P1,900.00

(2) Agricultural Land. Covered by Tax Decl. No. 06449, Cad, Lot No. 3271 C-7
located at Panyangan, Lanao, Gingoog City and bounded on the North by Lot No.
3270; South by Lot Nos. 2900 & 3462; East by Panyangan River & F. Lumanao;
and Part of Lot 3272; and West by Samay Creek, containing an area of ONE
HUNDRED FOUR THOUSAND SIX HUNDRED (104,600) sq. ms. more or
less.

P11,580.00

(3) Agricultural Land. Covered by Tax Decl. No. 06449, Cad. Lot No. 2319, Case
2, located at Murallon, Gingoog City and bounded on the North by Lot No. 1061;
South by Hinopolan Creek; East by Lot No. 1044; and West by Lot No. 1041,
containing an area of THREE THOUSAND TWO HUNDRED TWENTY FIVE
(3,225) sq. ms. more or less.
(4) Agricultural Land. Covered by Tax Decl. No. 06452, Cad. Lot No. 3272, C-7
Part 4 located at Panyangan, Lunao, Gingoog City and bounded on the North by
Lot Nos. 3270 & 3273; East by Panyangan River; South by Panyangan River; and
West by Lot Nos. 3270 & 3271, containing an area of FIFTY FIVE THOUSAND
SIX HUNDRED (55,600) sq. ms. more or less, being claimed by Damian
Querubin.

P2,370.00

(5) Agricultural Land. Covered by Tax Decl. No. 06453, Cad. Lot No. 3270 Case
7, located at Sunog, Lunao, Gingoog City and bounded on the North by Samay
Creek & Lot 3267; South by Lot Nos. 3271 & 3272; East by Lot Nos. 3269 &
3273; and West by Samay Creek, containing an area of FOUR HUNDRED
EIGHT THREE THOUSAND SIX HUNDRED (483,600) sq. ms. more or less.

P61,680.00

(6) Agricultural Land. Covered by Tax Decl. No. 06457, Cad. Lot No. 3273, C-7
Part 2 located at Panyangan, Lunao, Gingoog City and bounded on the North by
Lot No. 3269; South by Lot No. 3272; East by Panyangan River; and West by Lot
No. 3270, containing an area of THIRTY FOUR THOUSAND THREE
HUNDRED (34,300) sq. ms. more or less, being claimed by Miguel Tuto.

P3,880.00

(7) Agricultural Land. Covered by Tax Decl. No. 12000, Cad. Lot No. 2806, Case
7 located at Agayayan, Gingoog City and bounded on the North by Agayayan
River; South by Victoriano Barbac; East by Isabelo Ramoso; and West by
Restituto Baol, containing an area of SIX THOUSAND SIX HUNDRED
SEVENTY SIX (6,676) sq. ms. more or less.

P380.00

(8) Agricultural Land. Covered by Tax Decl. No. 12924, Cad. Lot No. 1206 C-1
located at Cahulogan, Gingoog City and bounded on the NW., by Lot No. 1209;
SW., by Lot No. 1207; Eastby National Highway; and West by Lot No. 1207;
containing an area of FOUR THOUSAND FIVE HUNDRED THIRTEEN (4,513)
sq. ms. more or less.

P740.00

(9) Agricultural Land. Covered by Tax Decl. No. 12925, Cad. Lot No. 5554,
located at Tinaytayan, Pigsalohan, Gingoog City and bounded on the North by
Lot Nos. 5559 & 5558; South by Lot No. 3486; East by Lot No. 5555; and West
by Lot No. 5355, containing an area of EIGHTEEN THOUSAND FIVE
HUNDRED TWENTY EIGHT (18,528) sq. ms. more or less.
 P320.00

(10) Agricultural Land. Covered by Tax Decl. No. 12926, Cad. Lot No. 5555 C-7
located at Tinaytayan, Pigsalojan, Gingoog City and bounded on the North by
Tinaytayan Creek & Lot Nos. 5557 & 5558; South by Lot Nos. 3486, 3487, 3488,
3491 & 3496; East by Cr. & Lot No. 3496; and West by Lot No. 5554, containing
an area of SEVENTY SEVEN THOUSAND SEVEN HUNDRED SEVENTY
SIX (77,776) sq. ms. more or less.

P1,350.00

(11) A Commercial Land. Covered by Tax Decl. No. 06454, Cad. Lot No. 61-C-1
located at Guno-Condeza Sts., Gingoog City and bounded on the North by Lot 64;
South by Road-Lot 613 Condeza St; East by Lot Nos. 63, and 62; West by Road-
Lot 614-Guno St., containing an area of ONE THOUSAND FORTY TWO
(1,042) sq. ms. more or less.

P9,320.00

(12) A Commercial Land. Covered by Tax Decl. No. 06484, Lot No. 5, Block 2,
located at Cabuyoan, Gingoog City and bounded on the North by Lot No. 4, block
2; South by Lot No. 8, block 2; East by Lot No. 6, block 2, West by Subdivision
Road, containing an area of FOUR HUNDRED (400) sq. ms. more or less.

P12,240.00

(13) A Commercial Land. Covered by Tax Decl. No. 15798, Block No. 7-A-16-0
located at Cabuyoan, Gingoog City and bounded on the North by Lot No. 7-A-16-
0; South by Lot No. 7-16-0; East by Lot No. 7-A-18-Road; West by Lot No. 8,
PSU-120704-Julito Arengo vs. Restituto Baol, containing an area of TWO
HUNDRED SIXTEEN (216) sq. ms. more or less.

P1,050.00

(14) Agricultural Land. Covered by Tax, Decl. No. 06789, Cad. Lot No. 5157-C-
7, located at Kiogat, Agayayan, Gingoog City and bounded on the North by Lot
No. 5158, 5159, 5156; South by SE-Steep Bank; East by NW, by Lot No. 5158,
Villafranca, containing an area of NINETY SIX THOUSAND TWO HUNDRED
(96,200) sq. ms. more or less.

P3,370.00

III. PERSONAL ESTATE (CONJUGAL)

NATURE AND DESCRIPTION LOCATION APPRAISAL

 1. Fifty (50) shares of stock
Rural Bank of Gingoog, Inc.
at P100.00 per share P5,000.00

2. Four (4) shares of Preferred Stock

with San Miguel Corporation 400.00

4. That, the parties hereto have agreed to divide the above-enumerated properties
in the following manner, to wit:

(a) To Patricio Alburo, Maria Ramoso Sanchez,

Roland Pedro T. Sanchez, Florida Mierly Sanchez,
Alfredo T. Sanchez and Myrna T. Sanchez, in equal
pro-indiviso shares, considering not only their
respective areas but also the improvements existing
thereon, to wit:

Agricultural Land. Covered by Tax Decl. No.

06453, Cad. Lot No. 3270 Case 7, located at Sunog,
Lunao, Gingoog City and bounded on the North by
Samay Creek & Lot 3267; South by Lot Nos. 3271
and 3272; East by Lot Nos. 3269 & 3273; and West
by Samay Creek, containing an area of FOUR
HUNDRED EIGHTY THREE THOUSAND SIX
HUNDRED (483,600) sq. ms. and assessed in the
sum of P61,680.00.

(b) To Rosalia Sanchez Lugod all the rest of the

properties, both real and personal, enumerated
above with the exception of the following:

(1) Two Preferred Shares of Stock in

the San Miguel Corporation,
indicated in San Miguel Corporation
Stock Certificate No. 30217, which
two shares she is ceding in favor of
Patricio Alburo;

(2) The house and lot designated as

Lot No. 5, Block 2 together with the
improvements thereon and identified
as parcel No. II-12, lot covered by
Tax Decl. No. 15798 identified as
Parcel No. II-13 in the above
enumerated, and Cad. Lot No. 5157-
C-7 together with the improvements
 thereon, which is identified as parcel
No. II-14 of the above-enumeration
of properties, which said Rosalia S.
Lugod is likewise ceding and
renouncing in favor of Rolando
Pedro, Florida Mierly, Alfredo and
Myrna, all surnamed Sanchez, in
equal pro-indiviso shares;

5. That Rolando Pedro, Florida Mierly, Alfredo and Myrna, all surnamed Sanchez
hereby acknowledge to have received jointly and severally in form of advances
after October 21, 1968 the aggregate sum of EIGHT THOUSAND FIVE
HUNDRED THIRTY-THREE PESOS (P8,533.94) and NINETY-FOUR
CENTAVOS;

6. That the parties hereto likewise acknowledge and recognize in the indebtedness
of the deceased Juan G. Sanchez and his deceased wife Maria Villafranca
Sanchez to the Lugod Enterprises, Inc., in the sum of P43,064.99;

7. That the parties hereto shall be responsible for the payment of the estate and
inheritance taxes proportionate to the value of their respective shares as may be
determined by the Bureau of Internal Revenue and shall likewise be responsible
for the expenses of survey and segregation of their respective shares;

8. That Patricio Alburo, Maria Ramoso Sanchez, Roland Pedro Sanchez, Florida
Mierly Sanchez, Alfredo Sanchez and Myrna Sanchez hereby waive, relinquish
and renounce, jointly and individually, in a manner that is absolute and
irrevocable, all their rights and interests, share and participation which they have
or might have in all the properties, both real and personal, known or unknown
and/or which may not be listed herein, or in excess of the areas listed or
mentioned herein, and/or which might have been, at one time or another, owned
by, registered or placed in the name of either of the spouses Juan C. Sanchez or
Maria Villafranca de Sanchez or both, and which either one or both might have
sold, ceded, transferred, or donated to any person or persons or entity and which
parties hereto do hereby confirm and ratify together with all the improvements
thereon, as well as all the produce and proceeds thereof, and particularly of the
properties, real and personal listed herein, as well as demandable obligations due
to the deceased spouses Juan C. Sanchez, before and after the death of the
aforementioned spouses Juan C. Sanchez and Maria Villafranca de Sanchez, in
favor of oppositor Rosalia S. Lugod;

9. That the expenses of this litigation including attorney's fees shall be borne
respectively by the parties hereto;

10. That Laureta Tampus for herself and guardian ad-litem of her minor children,
namely: Florida Mierly, Alfredo, and Myrna, all surnamed Sanchez, hereby
declare that she has no right, interest, share and participation whatsoever in the
estate left by Juan C. Sanchez and/or Maria Villafranca de Sanchez, or both, and
that she likewise waives, renounces, and relinquishes whatever rigid, share,
participation or interest therein which she has or might have in favor of Rosalia S.
Lugod;

11. That, the parties hereto mutually waive and renounce in favor of each other
any whatever claims or actions, arising from, connected with, and as a result of
Special Proceedings Nos. 44-M and 1022 of the Court of First Instance of
Misamis Oriental, Rosalia S. Lugod, warranting that the parcel of land ceded to
the other parties herein contains 48 hectares and 36 ares.

12. That, Rosalia S. Lugod shall assume as she hereby assumes the payment to
Lugod Enterprises, Inc., of the sum of P51,598.93 representing the indebtedness
of the estate of Juan C. Sanchez and Maria Villafranca de Sanchez and the
advances made to Rolando Pedro, Mierly, Alfredo, and Myna all surnamed
Sanchez, mentioned in paragraphs 5 hereto agree to have letters of administration
issued in favor of Rosalia S. Lugod without any bond.

That Rosalia S. Lugod likewise agrees to deliver possession and enjoyment of the
parcel of land herein ceded to petitioners and intervenors immediately after the
signing of this agreement and that the latter also mutually agree among
themselves to have the said lot subdivided and partitioned immediately in
accordance with the proportion of one sixth (1/6) part for every petitioner and
intervenor and that in the meantime that the partition and subdivision is not yet
effected, the administrations of said parcel of land shall be vested jointly with
Laureta Tampos, guardian ad litem of petitioners and Maria Ramoso, one of the
intervenors who shall see to it that each petitioner and intervenor is given one
sixth (1/6) of the net proceeds of all agricultural harvest made thereon.

WHEREFORE, it is most respectfully prayed that the foregoing compromise

agreement be approved.

Medina, Misamis Oriental, October 30, 1969.

(Sgd.) (Sgd.)
PATRICIO ALBURO ROSALIA S. LUGOD
Intervenor-Oppositor Oppositor

(Sgd.)
MARIA RAMOSO SANCHEZ ASSISTED BY:
Intervenor-Oppositor

(Sgd.)
ASSISTED BY: PABLO S. REYES
R-101-Navarro Bldg.
 (Sgd.) Don A. Velez St.
REYNALDO L. FERNANDEZ Cagayan de Oro City
Gingoong City

(Sgd.) (Sgd.)
ROLANDO PEDRO T. SANCHEZ ALFREDO T. SANCHEZ
Petitioner Petitioner

(Sgd.) (Sgd.)
FLORIDA MIERLY T. SANCHEZ MYRNA T. SANCHEZ
Petitioner Petitioner

(Sgd.)
LAURETA TAMPUS
For herself and as Guardian
Ad-Litem of the minors
Florida Mierly, Alfredo, and
Myrna, all surnamed Sanchez

ASSISTED BY:

TEOGENES VELEZ, JR.

Counsel for Petitioners
Cagayan de Oro City

The Clerk of Court

Court of First Instance
Branch III, Medina, Mis. Or.

Greetings:

Please set the foregoing compromise agreement for the approval of the Honorable
Court today, Oct. 30, 1969.

(Sgd.) (Sgd.) (Sgd.)

PABLO S. REYES TEOGENES VELEZ, JR. REYNALDO L. FERNANDEZ

The Memorandum of Agreement dated April 13, 1970, which the parties entered into with the
assistance of their counsel, amended the above compromise. (It will be reproduced later in our
discussion of the second issue raised by the petitioners.)

The Court of Appeals, in a Resolution dated September 4, 1992, initially dismissed private
10

respondents' petition. Acting, however, on a motion for reconsideration and a supplemental

motion for reconsideration dated September 14, 1992 and September 25, 1992, respectively, 11

Respondent Court thereafter reinstated private respondents' petition in a resolution dated

12

October 14, 1992.

In due course, the Court of Appeals, as earlier stated, rendered its assailed Decision granting the
petition, setting aside the trial court's decision and declaring the modified compromise agreement
valid and binding.

Hence, this appeal to this Court under Rule 45 of the Rules of Court.

The Issues

In this appeal, petitioners invite the Court's attention to the following issues:

The respondent court grossly erred in granting the petition for certiorari under
Rule 65 considering that the special civil action of certiorari may not be availed
of as a substitute for an appeal and that, in any event, the grounds invoked in the
petition are merely alleged errors of judgment which can no longer be done in
view of the fact that the decision of the lower court had long become final and
executory.

II

Prescinding from the foregoing, the respondent court erred in annulling the
decision of the lower court for the reason that a compromise agreement or
partition as the court construed the same to be, executed by the parties on October
30, 1969 was void and unenforceable the same not having been approved by the
intestate court and that the same having been seasonably repudiated by petitioners
on the ground of fraud.

III

The respondent court grossly erred in ignoring and disregarding findings of facts
of the lower court that the alleged conveyances of real properties made by the
spouses Juan C. Sanchez and Maria Villafranca just before their death in favor of
their daughter and grandchildren, private respondents herein, are tainted with
fraud or made in contemplation of death, hence, collationable.

IV

In any event, the respondent court grossly erred in treating the lower court's
declaration of fictitiousness of the deeds of sale as a final adjudication of
annulment.

V
 The respondent court grossly erred in declaring the termination of the intestate
proceedings even as the lower court had not made a final and enforceable
distribution of the estate of the deceased Juan C. Sanchez.

VI

Prescinding from the foregoing, the respondent court grossly erred in not at least
directing respondent Rosalia S. Lugod to deliver the deficiency of eight (8)
hectares due petitioners under the compromise agreement and memorandum of
agreement, and in not further directing her to include in the inventory properties
conveyed under the deeds of sale found by the lower court to be part of the estate
of Juan C. Sanchez. 13

The salient aspects of some issues are closely intertwined; hence, they are hereby consolidated
into three main issues specifically dealing with the following subjects: (1) the propriety of
certiorari as a remedy before the Court of Appeals, (2) the validity of the compromise
agreement, and (3) the presence of fraud in the execution of the compromise and/or collation of
the properties sold.

The Court's Ruling

The petition is not meritorious.

First Issue: Propriety of Certiorari

Before the Court of Appeals

Since private respondents had neglected or failed to file an ordinary appeal within the
reglementary period, petitioners allege that the Court of Appeals erred in allowing private
respondent's recourse to Rule 65 of the Rules of Court. They contend that private respondents'
invocation of certiorari was "procedurally defective." They further argue that private
14

respondents, in their petition before the Court of Appeals, alleged errors of the trial court which,
being merely errors of judgment and not errors of jurisdiction, were not correctable by certiorari.
15
This Court disagrees.

Doctrinally entrenched is the general rule that certiorari is not a substitute for a lost appeal.
However, Justice Florenz D. Regalado lists several exceptions to this rule, viz.: "(1) where the
appeal does not constitute a speedy and adequate remedy (Salvadades vs. Pajarillo, et al., 78 Phil.
77), as where 33 appeals were involved from orders issued in a single proceeding which will
inevitably result in a proliferation of more appeals (PCIB vs. Escolin, et al., L-27860 and 27896,
Mar. 29, 1974); (2) where the orders were also issued either in excess of or without jurisdiction
(Aguilar vs. Tan, L-23600, Jun 30, 1970, Cf. Bautista, et al. vs. Sarmiento, et al., L-45137, Sept.
231985); (3) for certain special consideration, as public welfare or public policy (See Jose vs.
Zulueta, et al. 16598, May 31, 1961 and the cases cited therein); (4) where in criminal actions,
the court rejects rebuttal evidence for the prosecution as, in case of acquittal, there could be no
remedy (People vs. Abalos, L029039, Nov. 28, 1968); (5) where the order is a patent nullity
(Marcelo vs. De Guzman, et al., L-29077, June 29, 1982); and (6) where the decision in the
certiorari case will avoid future litigations (St. Peter Memorial Park, Inc. vs. Campos, et al., L-
38280, Mar. 21, 1975)." Even in a case where the remedy of appeal was lost, the Court has
16

issued the writ of certiorari where the lower court patently acted in excess of or outside its
jurisdiction, as in the present case.
17

A petition for certiorari under Rule 65 of the Rules of Court is appropriate and allowable when
the following requisites concur: (1) the writ is directed against a tribunal, board or officer
exercising judicial or quasi-judicial functions; (2) such tribunal, board or officer has acted
without or in excess of jurisdiction, or with grave abuse of discretion amounting to lack or excess
of jurisdiction; and (3) there is no appeal or any plain, speedy and adequate remedy in the
ordinary course of law. After a thorough review of the case at bar, we are convinced that all
18

these requirements were met.

As a probate court, the trial court was exercising judicial functions when it issued its assailed
resolution. The said court had jurisdiction to act in the intestate proceedings involved in this case
with the caveat that, due to its limited jurisdiction, it could resolve questions of title only
provisionally. It is hornbook doctrine that "in a special proceeding for the probate of a will, the
19

question of ownership is an extraneous matter which the probate court cannot resolve with
finality. This pronouncement no doubt applies with equal force to an intestate proceeding as in
the case at bar." In the instant case, the trial court rendered a decision declaring as simulated
20

and fictitious all the deeds of absolute sale which, on July 26, 1963 and June 26, 1967, Juan C.
Sanchez and Maria Villafranca executed in favor of their daughter, Rosalia Sanchez Lugod; and
grandchildren, namely, Arturo S. Lugod, Evelyn S. Lugod and Roberto S. Lugod. The trial court
ruled further that the properties covered by the said sales must be subject to collation. Citing
Article 1409 (2) of the Civil Code, the lower court nullified said deeds of sale and determined
with finality the ownership of the properties subject thereof . In doing so, it clearly overstepped
its jurisdiction as a probate court. Jurisprudence teaches:

[A] probate court or one in charge of proceedings whether testate or intestate

cannot adjudicate or determine title to properties claimed to be a part of the estate
and which are claimed to belong to outside parties. All that the said court could do
as regards said properties is to determine whether they should or should not be
included in the inventory or list of properties to be administered by the
administrator. If there is not dispute, well and good, but if there is, then the
parties, the administrator, and the opposing parties have to resort to an ordinary
action for a final determination of the conflicting claims of title because the
probate court cannot do so. 21

Furthermore, the trial court committed grave abuse of discretion when it rendered its decision in
disregard of the parties' compromise agreement. Such disregard, on the ground that the
22

compromise agreement "was nor approved by the court," is tantamount to "an evasion of
23

positive duty or to a virtual refusal to perform the duty enjoined or to act in contemplation and
within the bounds of law. " 24

The foregoing issues clearly involve not only the correctness of the trial court's decision but also
the latter's jurisdiction. They encompass plain errors of jurisdiction and grave abuse of
discretion, not merely errors of judgment. Since the trial court exceeded its jurisdiction, a
25

petition for certiorari is certainly a proper remedy. Indeed, it is well-settled that "(a)n act done
by a probate court in excess of its jurisdiction may be corrected by certiorari." 26

Consistent with the foregoing, the following disquisition by respondent appellate court is apt:

As a general proposition, appeal is the proper remedy of petitioner Rosalia here

under Rule 109 of the Revised Rules of Court. But the availability of the ordinary
course of appeal does not constitute sufficient ground to [prevent] a party from
making use of the extraordinary remedy of certiorari where appeal is not an
adequate remedy or equally beneficial, speedy and sufficient (Echauz vs. Court of
Appeals, 199 SCRA 381). Here, considering that the respondent court has
disregarded the compromise agreement which has long been executed as early as
October, 1969 and declared null and void the deeds of sale with finality, which, as
a probate court, it has no jurisdiction to do, We deem ordinary appeal is
inadequate. Considering further the [trial court's] granting of [herein petitioners')
motion for execution of the assailed decision, [herein private respondent]
27

Rosalia's resort to the instant petition [for review on certiorari] is all the more
warranted under the circumstances. 28

We thus hold that the questioned decision and resolutions of the trial court may be challenged
through a special civil action for certiorari under Rule 65 of the Rules of Court. At the very
least, this case is a clear exception to the general rule that certiorari is not a substitute for a lost
appeal because the trial court's decision and resolutions were issued without or in excess of
jurisdiction, which may thus be challenged or attacked at any time. "A void judgment for want of
jurisdiction is no judgment at all. It cannot be the source of any right nor the creator of any
obligation. All acts performed pursuant to it and all claims emanating from it have no legal
effect. Hence, it can never become final and any writ of execution based on it is void; ' . . . it may
be said to be a lawless thing which can be treated as an outlaw and slain at sight, or ignored
wherever and whenever it exhibits its head.' " 29

Second Issue: Validity of Compromise Agreement

Petitioners contend that, because the compromise agreement was executed during the pendency
of the probate proceedings, judicial approval is necessary to shroud it with validity. They stress
that the probate court had jurisdiction over the properties covered by said agreement. They add
that Petitioners Florida Mierly, Alfredo and Myrna were all miners represented only by their
mother/natural guardian, Laureta Tampus. 30

These contentions lack merit. Article 2028 of the Civil Code defines a compromise agreement as
"a contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an
end to one already commenced." Being a consensual contract, it is perfected upon the meeting of
the minds of the parties. Judicial approval is not required for its perfection. Petitioners'
31

argument that the compromise was not valid for lack of judicial approval is not novel; the same
was raised in Mayuga vs. Court of Appeals, where the Court, through Justice Irene R. Cortes,
32

ruled:
 It is alleged that the lack of judicial approval is fatal to the compromise. A
compromise is a consensual contract. As such, it is perfected upon the meeting of
the minds of the parties to the contract. (Hernandez v. Barcelon, 23 Phil. 599
[1912]; see also De los Reyes v. de Ugarte, 75 Phil. 505 [1945].) And from that
moment not only does it become binding upon the parties (De los Reyes v. De
Ugarte, supra ), it also has upon them the effect and authority of res judicata
(Civil Code, Art. 2037), even if not judicially approved (Meneses v. De la Rosa,
77 Phil. 34 [1946]; Vda. De Guilas v. David, 132 Phil. 241, L-24280, 23 SCRA
762 [May 27, 1968]; Cochingyan v. Cloribel, L-27070-71 [April 22, 1977], 76
SCRA 361). (Emphasis found in the original.)

In the case before us, it is ineludible that the parties knowingly and freely entered into a valid
compromise agreement. Adequately assisted by their respective counsels, they each negotiated
its terms and provisions for four months; in fact, said agreement was executed only after the
fourth draft. As noted by the trial court itself, the first and second drafts were prepared
successively in July, 1969; the third draft on September 25, 1969; and the fourth draft, which
was finally signed by the parties on October 30, 1969, followed. Since this compromise
33

agreement was the result of a long drawn out process, with all the parties ably striving to protect
their respective interests and to come out with the best they could, there can be no doubt that the
parties entered into it freely and voluntarily. Accordingly, they should be bound thereby. To be
34

valid, it is merely required under the law to be based on real claims and actually agreed upon in
good faith by the parties thereto.35

Indeed, compromise is a form of amicable settlement that is not only allowed but also
encouraged in civil cases. Article 2029 of the Civil Code mandates that a "court shall endeavor
36

to persuade the litigants in a civil case to agree upon some fair compromise."

In opposing the validity and enforcement of the compromise agreement, petitioners harp on the
minority of Florida Mierly, Alfredo and Myna. Citing Article 2032 of the Civil Code, they
contend that the court's approval is necessary in compromises entered into by guardians and
parents in behalf of their wards or children.37

However, we observe that although denominated a compromise agreement, the document in this
case is essentially a deed of partition, pursuant to Article 1082 of the Civil Code which provides
that "[e]very act which is intended to put an end to indivision among co-heirs and legatees or
devisees is deemed to be a partition, although it should purport to be a sale, an exchange, a
compromise, or any other transaction."

For a partition to be valid, Section 1, Rule 74 of the Rules of Court, requires the concurrence of
the following conditions: (1) the decedent left no will; (2) the decedent left no debts, or if there
were debts left, all had been paid; (3) the heirs and liquidators are all of age, or if they are
minors, the latter are represented by their judicial guardian or legal representatives; and (4) the
partition was made by means of a public instrument or affidavit duly filed with the Register of
Deeds. We find that all the foregoing requisites are present in this case. We therefore affirm the
38

validity of the parties' compromise agreement/partition in this case.

In any event, petitioners neither raised nor ventilated this issue in the trial court. This new
question or matter was manifestly beyond the pale of the issues or questions submitted and
threshed out before the lower court which are reproduced below, viz.:

I Are the properties which are the object of the sale by the
deceased spouses to their grandchildren collationable?

II Are the properties which are the object of the sale by the
deceased spouses to their legitimate daughter also collationable?

III The first and second issues being resolved, how much then is
the rightful share of the four (4) recognized illegitimate children? 39

Furthermore, the 27-page Memorandum dated February 17, 1990 filed by petitioners before the
Regional Trial Court readily reveals that they never questioned the validity of the compromise.
40

In their comment before the Court of Appeals, petitioners based their objection to sad
41

compromise agreement on the solitary "reason that it was tainted with fraud and deception,"
zeroing specifically on the alleged fraud committed by private respondent Rosalia S. Lugod. 42

The issue of minority was first raised only in petitioners' Motion for Reconsideration of the
Court of Appeals' Decision; thus, it "is as if it was never duly raised in that court at all."
43 44

Hence, this Court cannot now, for the first time on appeal, entertain this issue, for to do so would
plainly violate the basic rule of fair play, justice and due process. We take this opportunity to
45

reiterate and emphasize the well-settled rule that "(a)n issue raised for the first time on appeal
and not raised timely in the proceedings in the lower court is barred by estoppel. Questions
raised on appeal must be within the issues framed by the parties and, consequently, issues not
raised in the trial court cannot be raised for the first time on appeal." 46

The petitioners likewise assail as void the provision on waiver contained in No. 8 of the
aforequoted compromise, because it allegedly constitutes a relinquishment by petitioners of "a
right to properties which were not known." They argue that such waiver is contrary to law,
47

public policy, morals or good custom. The Court disagrees. The assailed waiver pertained to
their hereditary right to properties belonging to the decedent's estate which were not included in
the inventory of the estate's properties. It also covered their right to other properties originally
belonging to the spouses Juan Sanchez and Maria Villafranca de Sanchez which have been
transferred to other persons. In addition, the parties agreed in the compromise to confirm and
ratify said transfers. The waiver is valid because, contrary to petitioners' protestation, the parties
waived a known and existing interest — their hereditary right which was already vested in them
by reason of the death of their father. Article 777 of the Civil Code provides that "(t)he rights to
the succession are transmitted from the moment of death of the decedent." Hence, there is no
legal obstacle to an heir's waiver of his/her hereditary share "even if the actual extent of such
share is not determined until the subsequent liquidation of the estate." At any rate, such waiver
48

is consistent with the intent and letter of the law advocating compromise as a vehicle for the
settlement of civil disputes.49

Finally, petitioners contend that Private Respondent Rosalia T. Lugod's alleged fraudulent acts,
specifically her concealment of some of the decedent's properties, attended the actual execution
of the compromise agreement. This argument is debunked by the absence of any substantial and
50

convincing evidence on record showing fraud on her part. As aptly observed by the appellate
court:

[Herein petitioners] accuse [herein private respondent] Rosalia of fraud or

deception by alleging, inter alia, that the parcel of land given to them never
conformed to the stated area, i.e., forty-eight (48) hectares, as stated in the
compromise agreement. We find this argument unconvincing and unmeritorious.
[Herein petitioners'] averment of fraud on the part of [herein private respondent]
Rosalia becomes untenable when We consider the memorandum of agreement
they later executed with [herein private respondent] Rosalia wherein said
compromise agreement was modified by correcting the actual area given to
[herein petitioners] from forty-eight (48) hectares to thirty-six (36) hectares only.
If the actual area allotted to them did not conform to the 48 hectare area stated in
the compromise agreement, then why did they agree to the memorandum of
agreement whereby their share in the estate of their father was even reduced to
just 36 hectares? Where is fraud or deception there? Considering that [herein
petitioners] were ably represented by their lawyers in executing these documents
and who presumably had explained to them the import and consequences thereof,
it is hard to believe their charge that they were defrauded and deceived by [herein
private respondent] Rosalia.

If the parcel of land given to [herein petitioners], when actually surveyed,

happened to be different in area to the stated area of 48 hectares in the
compromise agreement, this circumstance is not enough proof of fraud or
deception on [herein private respondent] Rosalia's part. Note that Tax Declaration
No. 06453 plainly discloses that the land transferred to [herein petitioners]
pursuant to the compromise agreement contained an area of 48 hectares (Annex
"A", Supplemental Reply). And when [herein petitioners] discovered that the land
allotted to them actually contained only 24 hectares, a conference between the
parties took place which led to the execution and signing of the memorandum of
agreement wherein [herein petitioners'] distributive share was even reduced to 36
hectares. In the absence of convincing and clear evidence to the contrary, the
allegation of fraud and deception cannot be successfully imputed to [herein
private respondent] Rosalia who must be presumed to have acted in good faith. 51

The memorandum of agreement freely and validly entered into by the parties on April 13, 1970
and referred to above reads:

MEMORANDUM OF AGREEMENT

The parties assisted by their respective counsel have agreed as they hereby agree:

1. To amend the compromise agreement executed by them on October 30, 1969

so as to include the following:
 a. Correction of the actual area being given to the petitioners and
intervenors, all illegitimate children of the late Juan C. Sanchez,
forty-eight (48) hectares, thirty-six (36) ares as embodied in the
aforementioned compromise agreement to thirty-six (36) hectares
only, thus enabling each of them to get six (6) hectares each.

b. That the said 36-hectare area shall be taken from that parcel of
land which is now covered by O.C.T. No. 146 (Patent No. 30012)
and the adjoining areas thereof designated as Lot A and Lot C as
reflected on the sketch plan attached to the record of this case
prepared by Geodetic Engineer Olegario E. Zalles pursuant to the
Court's commission of March 10, 1970 provided, however, that if
the said 36-hectare area could not be found after adding thereto the
areas of said lots A and C, then the additional area shall be taken
from what is designated as Lot B, likewise also reflected in the
said sketch plan attached to the records;

c. That the partition among the six illegitimate children of the late
Juan C. Sanchez (petitioners and intervenors) shall be effective
among themselves in such a manner to be agreed upon by them,
each undertaking to assume redemption of whatever plants found
in their respective shares which need redemption from the tenants
thereof as well as the continuity of the tenancy agreements now
existing and covering the said shares or areas.

d. The subdivision survey shall be at the expense of the said

petitioners and intervenors prorata.

e. That the administratrix agrees to deliver temporary

administration of the area designated as Lot 5 of the Valles Sketch
Plan pending final survey of the said 36-hectare area.

Cagayan de Oro City, April 13, 1970.

(Sgd.)
LAURETA TAMPOS
For herself and as Guardian
ad-litem of Rolando, Mierly,
Alfredo and Myrna, all
surnamed Sanchez

Assisted by:

(Sgd.)
TEOGENES VELEZ, Jr.
Counsel for Petitioners
 (Sgd.)
ROSALIA S. LUGOD
Administratrix

Assisted by:

(Sgd.)
PABLO S. REYES
Counsel for Administratrix
(Sgd.)
MARIA RABOSO SANCHEZ
Intervenor 52

Not only did the parties knowingly enter into a valid compromise agreement; they even amended
it when they realized some errors in the original. Such correction emphasizes the voluntariness of
said deed.

It is also significant that all the parties, including the then minors, had already consummated and
availed themselves of the benefits of their compromise. This Court has consistently ruled that "a
53

party to a compromise cannot ask for a rescission after it has enjoyed its benefits." By their
54

acts, the parties are ineludibly estopped from questioning the validity of their compromise
agreement. Bolstering this conclusion is the fact that petitioners questioned the compromise only
nine years after its execution, when they filed with the trial court their Motion to Defer Approval
of Compromise Agreement, dated October 26, 1979. In hindsight, it is not at all farfetched that
55

petitioners filed said motion for the sole reason that they may have felt shortchanged in their
compromise agreement or partition with private respondents, which in their view was unwise and
unfair. While we may sympathize with this rueful sentiment of petitioners, we can only stress
that this alone is not sufficient to nullify or disregard the legal effects of said compromise which,
by its very nature as a perfected contract, is binding on the parties. Moreover, courts have no
jurisdiction to look into the wisdom of a compromise or to render a decision different therefrom.
56
It is a well-entrenched doctrine that "the law does not relieve a party from the effects of an
unwise, foolish, or disastrous contract, entered into with all the required formalities and with full
awareness of what he was doing" and "a compromise entered into and carried out in good faith
57

will not be discarded even if there was a mistake of law or fact, (McCarthy vs. Barber Steamship
Lines, 45 Phil. 488) because courts have no power to relieve parties from obligations voluntarily
assumed, simply because their contracts turned out to be disastrous deals or unwise investments."
58
Volenti non fit injuria.

Corollarily, the petitioners contend that the Court of Appeals gravely abused its discretion in
deeming Special Proceedings Nos. 44-M and 1022 "CLOSED and TERMINATED," arguing
that there was as yet no order of distribution of the estate pursuant to Rule 90 of the Rules of
Court. They add that they had not received their full share thereto. We disagree. Under Section
59

1, Rule 90 of the Rules of Court, an order for the distribution of the estate may be made when the
"debts, funeral charges, and expenses of administration, the allowance to the widow, and
inheritance tax, if any," had been paid. This order for the distribution of the estate's residue must
contain the names and shares of the persons entitled thereto. A perusal of the whole record,
particularly the trial court's conclusion, reveals that all the foregoing requirements already
60

concurred in this case. The payment of the indebtedness of the estates of Juan C. Sanchez and
Maria Villafranca in the amount of P51,598.93 was shouldered by Private Respondent Rosalia,
who also absorbed or charged against her share the advances of Rolando T. Lugod in the sum of
P8,533.94, in compliance with Article 1061 of the Civil Code on collation. Furthermore, the
61

compromise of the parties, which is the law between them, already contains the names and
shares of the heirs to the residual estate, which shares had also been delivered. On this point, we
agree with the following discussion of the Court of Appeals:

But what the (trial court) obviously overlooked in its appreciation of the facts of
this case are the uncontroverted facts that (herein petitioners) have been in
possession and ownership of their respective distributive shares as early as
October 30, 1969 and they have received other properties in addition to their
distributive shares in consideration of the compromise agreement which they now
assail. Proofs thereof are Tax Declarations No. 20984, 20985, 20986, 20987,
20988, 20989 and 20990 (Annexes "B" to "H", Supplemental Reply) in the
respective names of (herein petitioners), all for the year 1972. (Herein petitioners)
also retained a house and lot, a residential lot and a parcel of agricultural land
(Annexes "I", "J" and "K", Ibid.) all of which were not considered in the
compromise agreement between the parties. Moreover, in the compromise
agreement per se, it is undoubtedly stated therein that cash advances in the
aggregate sum of P8,533.94 were received by (herein petitioners) after October
21, 1968 (Compromise Agreement, par. 5) 62

All the foregoing show clearly that the probate court had essentially finished said intestate
proceedings which, consequently, should be deemed closed and terminated. In view of the above
discussion, the Court sees no reversible error on the part of the Court of Appeals.

Third Issue: Fraud and Collation

Petitioners fault Respondent Court for not ordering Private Respondent Rosalia T. Lugod to
deliver to them the deficiency as allegedly provided under the compromise agreement. They
further contend that said court erred in not directing the provisional inclusion of the alleged
deficiency in the inventory for purposes of collating the properties subject of the questioned
deeds of sale. We see no such error. In the trial court, there was only one hearing conducted,
63

and it was held only for the reception of the evidence of Rosalia S. Lugod to install her as
administratrix of the estate of Maria Villafranca. There was no other evidence, whether
testimonial or otherwise, "received, formally offered to, and subsequently admitted by the
probate court below"; nor was there "a trial on the merits of the parries' conflicting claims." In
64

fact, the petitioners "moved for the deferment of the compromise agreement on the basis of
alleged fraudulent concealment of properties — NOT because of any deficiency in the land
conveyed to them under the agreements." Hence, there is no hard evidence on record to back up
65

petitioners' claims.

In any case, the trial court noted Private Respondent Rosalia's willingness to reimburse any
deficiency actually proven to exist. It subsequently ordered the geodetic engineer who prepared
the certification and the sketch of the lot in question, and who could have provided evidence for
the petitioners, "to bring records of his relocation survey." However, Geodetic Engineer Idulsa
66

did not comply with the court's subpoena duces tecum and ad testificandum. Neither did he
furnish the required relocation survey. No wonder, even after a thorough scrutiny of the
67

records, this Court cannot find any evidence to support petitioners' allegations of fraud against
Private Respondent Rosalia.

Similarly, petitioners' allegations of fraud in the execution of the questioned deeds of sale are
bereft of substance, in view of the palpable absence of evidence to support them. The legal
presumption of validity of the questioned deeds of absolute sale, being duly notarized public
documents, has not been overcome. On the other hand, fraud is not presumed. It must be
68

proved by clear and convincing evidence, and not by mere conjectures or speculations. We stress
that these deeds of sale did not involve gratuitous transfers of future inheritance; these were
contracts of sale perfected by the decedents during their lifetime. Hence, the properties
69

conveyed thereby are not collationable because, essentially, collation mandated under Article
1061 of the Civil Code contemplates properties conveyed inter vivos by the decedent to an heir
by way of donation or other gratuitous title.

In any event, these alleged errors and deficiencies regarding the delivery of shares provided in
the compromise, concealment of properties and fraud in the deeds of sale are factual in nature
which, as a rule, are not reviewable by this Court in petitions under Rule 45. Petitioners have
70

failed to convince us that this case constitutes an exception to such rule. All in all, we find that
the Court of Appeals has sufficiently addressed the issues raised by them. Indeed, they have not
persuaded us that said Court committed any reversible error to warrant a grant of their petition.

WHEREFORE, the petition is hereby DENIED and the assailed Decision of the Court of
Appeals is AFFIRMED.

SO ORDERED.

G.R. No. 132518             March 28, 2000

GAVINA MAGLUCOT-AW, CATALINA ORCULLO, RICHARD ESTANO, NIDA

MAGLUCOT, MELANIA MAGLUCOT-CATUBIG, EMILIANO CATUBIG, LADISLAO
SALMA, petitioners,
vs.
LEOPOLDO MAGLUCOT, SEVERO MAGLUCOT, WILFREDA MAGLUCOT-ALEJO
and CONSTANCIO ALEJO, respondents.

KAPUNAN, J.:

This petition for review on certiorari assails the Decision, dated 11 November 1997, of the Court
of Appeals in CA-G.R. CV No. 48816 which reversed and set aside the Decision, dated 13
December 1994, of the Regional Trial Court, Branch 30 of Dumaguete City, Negros Oriental in
an action for recovery of possession and damages.

The core issue in this case is whether a partition of Lot No. 1639 had been effected in 1952.
Petitioners contend that there was already a partition of said lot; hence, they are entitled to
exclusive possession and ownership of Lot No. 1639-D which originally formed part of Lot No.
1639 until its partition. Private respondents, upon the other hand, claim that there was no
partition; hence, they are co-owners of Lot No. 1639-D. Notably, this case presents a unique
situation where there is an order for partition but there is no showing that the sketch/subdivision
plan was submitted to the then Court of First Instance for its approval or that a decree or order
was registered in the Register of Deeds.

The antecedent facts of the case are as follows:

Petitioners filed with the RTC a complaint for recovery of possession and damages alleging,
inter alia, that they are the owners of Lot No. 1639-D. Said lot was originally part of Lot No.
1639 which was covered by Original Certificate Title No. 6775 issued in the names of
Hermogenes Olis, Bartolome Maglucot. Pascual Olis, Roberto Maglucot, Anselmo Lara and
Tomas Maglucot on 16 August 1927. On 19 April 1952, Tomas Maglucot, one of the registered
1

owners and respondents predecessors-in-interest, filed a petition to subdivide lot No. 1639. 2

Consequently, on 13 May 1952, then CFI of Negros Oriental issued an order directing the
3

parties to subdivide said lot into six portions as follows:

a) Hermogenes Olis — lot 1639-A

b) Pascual Olis — lot 1639-B

c) Bartolome Maglucot — lot 1639-C

d) Roberto (Alberto) Maglucot — lot 1639-D

e) Anselmo Lara — lot 1639-E

f) Tomas Maglucot — lot 1639-F. 4

Sometime in 1963, Guillermo Maglucot rented a portion of Lot No. 1639-D (subject lot).
Subsequently, Leopoldo and Severo, both surnamed Maglucot, rented portions of subject lot in
1964 and 1969, respectively, and each paying rentals therefor. Said respondents built houses on
their corresponding leased lots. They paid the rental amount of P100.00 per annum to Mrs.
Ruperta Salma, who represented the heirs of Roberto Maglucot, petitioners predecessors-in-
interest. In December 1992, however, said respondents stopped paying rentals claiming
ownership over the subject lot. Petitioners thus filed the complaint a quo.

After trail, the lower court rendered judgment in favor of petitioners. The RTC found the
existence of tax declarations in the names of Hermogenes Olis and Pascual Oils (purported
owners of Lot Nos. 1639-A and 1639-B, respectively) as indubitable proof that there was a
5
subdivision of Lot No. 1639. It likewise found that Tomas Maglucot, respondents' predecessors-
in-interest, took active part in the partition as it was he, in fact, who commenced the action for
partition. 6 The court a quo cited Article 1431 of the Civil Code which states that "[t]hrough
estoppel an admission or representation is rendered conclusive upon the person making it, and
cannot be denied or disproved as against the person relying thereon." Applying said provision of
law, it held that while there was no court order showing that Lot No. 1639 was partitioned, its
absence could not be used by Tomas Maglucot, or respondents as his successors-in-interest, to
deny the existence of an approved partitioned against the other co-owners who claim that there
was one. 7 Said court, likewise, ruled that the tax declarations 8 over the houses of respondents,
expressly stating that the same are constructed on the lots of Roberto Maglucot, constitute a
conclusive admission by them of the ownership of the subject lot by the latter. 9

The dispositive portion of the lower court's decision reads as follows:

WHEREFORE, on the basis of the foregoing discussion, judgment is hereby rendered in

favor of the plaintiffs against the defendants ordering the latter:

1. To demolish their houses inside lot 1639-D, vacate the premises thereof
and deliver the possession of the same to Plaintiffs;

2. To jointly and solidarily pay plaintiffs the sum of P15,000.00 for

attorney's fees:

3. To each pay plaintiffs the sum of P100.00 every year from 1993 for
actual damages representing the amount of unpaid rentals up to the time
they actually vacate the premises in question;

4. To pay the costs. 10

On appeal, the CA reversed the decision of the RTC. The appellate court ruled that the sketch
plan and tax declarations relied upon by petitioners are not conclusive evidence of partition. The
11

CA likewise found that the prescribed procedure under Rule 69 of the Rules of Court was not
followed. It thus declared that there was no partition of Lot No. 1639.

Petitioners filed this petition for review on certiorari alleging that the CA committed the
following reversible errors:

IN VIOLATING THE LAW ON ACQUISITIVE PRESCRIPTION PLAINTIFFS

HAVING POSSESSED LOT 1639-D SINCE 1946;

II
 IN VIOLATING THE LAW ON ESTOPPEL, THE FACT OF PAYMENT OF
RENTALS AND OFFER TO BUY THE DEFENDANTS IS ADMISSION THAT THE
AREA IN LOT 1639-D. HAD LONG BEEN ADJUDICATED TO PLAINTIFFS;

III

IN DECLARING THAT THERE WAS NO PRIOR PARTITION, CONTRARY TO

THE FINDINGS OF THE TRIAL COURT, AND AGAINST THE EVIDENCE ON
RECORD, OF WHICH IF PROPERLY CONSIDERED WOULD CHANGE THE
OUTCOME OF THE CASE;

IV

IN DECLARING THAT THERE IS NO LAW OR JURISPRUDENCE APPLICABLE

UNDER THE PREMISES; THIS WOULD ONLY SHOW THAT THE RECORD OF
THE CASE WAS NOT PROPERLY SCRUTINIZED, AND THE LAW WAS NOT
PROPERLY STUDIED; ESPECIALLY IN THE CASE AT BENCH THAT THE ORAL
AND MUTUAL PARTITION HAPPENED DURING THE REGIME OF THE OLD
RULES OF PROCEDURE; 12

Petitioners maintain that Lot No. 1639 was mutually partitioned and physically subdivided
among the co-owners and that majority of them participated in the actual execution of the
subdivision. Further, the co-owners accepted their designated shares in 1946 as averred by
Tomas Maglucot in his petition for partition. Petitioners opine that in 1952, Tomas Maglucot
13

himself initiated a court proceeding for a formal subdivision of Lot No. 1639. In said petition, he
averred that only Hermogenes Olis and the heirs of Pascual Olis were not agreeable to the
partition. Petitioners further contend that respondents admitted in their tax declarations covering
14

their respective houses that they are "constructed on the land of Roberto Maglucot." Simply put,
15

petitioners vigorously assert that respondents are estopped from claiming to be co-owners of the
subject lot in view of the mutual agreement in 1946, judicial confirmation in 1952, and
respondents' acquiescence because they themselves exclusively exercised ownership over Lot
No. 1639-A beginning 1952 up to the present. 16

For their part, respondents posit three points in support of their position. First, they emphasize
that petitioners failed to show that the interested parties were apprised, or notified of the tentative
subdivision contained in the sketch and that the CFI subsequently confirmed the same. Second, 17

they point to the fact that petitioners were unable to show any court approval of any partition. 18

Third, they maintain that Lot No. 1639 remain undivided since to date, OCT No. 6275 is still an
existing and perfectly valid title, containing no annotation of any encumbrance or partition
whatsoever. 19

After a careful consideration of the pleadings filed by the parties and the evidence on record, we
find that the petition is meritorious. As stated earlier, the core issue in this case is whether there
was a valid partition in 1952.
Preliminary, this Court recognizes that "the jurisdiction of this Court in cases brought before it
from the Court of Appeals via Rule 45 of the Rules of Court is limited to reviewing errors of law.
Findings of fact of the latter are conclusive, except in the following instances: (1) when the
findings are grounded entirely on speculation, surmises, or conjectures; (2) when the inference
made is manifestly mistaken, absurd, or impossible; (3) when there is grave abuse of discretion;
(4) when the judgment is based on a misapprehension of facts; (5) when the findings of fact are
conflicting; (6) when in making its findings the Court of Appeals went beyond the issues of the
case, or its findings are contrary to the admissions of both the appellant and the appellee; (7)
when the findings are contrary to those of the trial court; (8) when the findings are conclusions
without citation of specific evidence on which they are based; (9) when the facts set forth in the
petition as well as in the petitioner's main and reply briefs are not disputed by the respondent;
and (10) when the findings of fact are premised on the supposed absence of evidence and
contradicted by the evidence on record." This case falls under exceptions (7), (8) and (10) in
20

that the findings of facts of the CA are in conflict with that of the RTC, are mere conclusions
without citation of specific evidence on which they are based and are premised on absence of
evidence but are contradicted by the evidence on record. For these reasons, we shall consider the
evidence on record to determine whether indeed there was partition.

In this jurisdiction, an action for partition is comprised of two phases: first, an order for partition
which determines whether a co-ownership in fact exists, and whether partition is proper, and,
second, a decision confirming the sketch or subdivision submitted by the parties or the
commissioners appointed by the court, as the case may be. The first phase of a partition and/or
21

accounting suit is taken up with the determination of whether or not a co-ownership in fact
exists, (i.e., not otherwise legally proscribed) and may be made by voluntary agreement of all the
parties interested in the property. This phase may end with a declaration that plaintiff is not
entitled to have a partition either because a co-ownership does not exist, or partition is legally
prohibited. It may end, upon the other hand, with an adjudgment that a co-ownership does in
truth exist, partition is proper in the premises and an accounting of rents and profits received by
the defendant from the real estate in question is in order. In the latter case, "the parties may, if
they are able to agree, make partition among themselves by proper instruments of conveyance,
and the court shall confirm the partition so agreed upon. In either case — i.e., either the action is
dismissed or partition and/or accounting is decreed — the order is a final one, and may be
appealed by any party aggrieved thereby. The second phase commences when it appears that
22

"the parties are unable to agree upon the partition" directed by the court. In that event, partition
shall be done for the parties by the court with the assistance of not more than three (3)
commissioners. This second stage may well also deal with the rendition of the accounting itself
and its approval by the court after the parties have been accorded opportunity to be heard
thereon, and an award for the recovery by the party or parties thereto entitled of their just share
in the rents and profits of the real estate in question." Such an order is, to be sure, final and
appealable. 23

The present rule on the question of finality and appealability of a decision or order decreeing
partition is that it is final and appealable. The order of partition is a final determination of the
23

co-ownership over Lot No. 1639 by the parties and the propriety of the partition thereof. Hence,
if the present rule were applied, the order not having been appealed or questioned by any of the
parties to the case, it has become final and executory and cannot be disturbed.
The true test to ascertain whether or not an order or a judgment is interlocutory or final is: Does
it leave something to be done in the trial court with respect to the merits of the case? If it does, it
is interlocutory; if it does not, it is final. The key test to what is interlocutory is when there is
something more to be done on the merits of the case. An order for partition is final and not
24

interlocutory and, hence, appealable because it decides the rights of the parties upon the issue
submitted. 25

However, this Court notes that the order of partition was issued when the ruling in Fuentebella
vs. Carrascoso, which held that the order of partition is interlocutory, was controlling. In
26

addition, the reports of the commissioners not having been confirmed by the trial court are not
binding. In this case, both the order of partition and the unconfirmed sketch plan are, thus,
27

interlocutory. Nevertheless, where parties do not object to the interlocutory decree, but show by
their conduct that they have assented thereto, they cannot thereafter question the decree, 28

especially, where, by reason of their conduct, considerable expense has been incurred in the
execution of the commission. Respondents in this case have occupied their respective lots in
29

accordance with the sketch/subdivision plan. They cannot after acquiescing to the order for more
than forty (40) years be allowed to question the binding effect thereof.

This case is to be distinguished from the order in the action for partition in Arcenas vs. Cinco. 30

In that case, the order was clearly interlocutory since it required the parties "to submit the
corresponding deed of partition to the Court for its approval." Here, the order appointed two
commissioners and directed them merely to approve the sketch plan already existing and
tentatively followed by the parties.

Under the present rule, the proceedings of the commissioners without being confirmed by the
court are not binding upon the parties. However, this rule does not apply in case where the
31

parties themselves actualized the supposedly unconfirmed sketch/subdivision plan. The purpose
of the court approval is to give effect to the sketch/subdivision plan. In this case, the parties
themselves or through their predecessors-in-interest implemented the sketch plan made pursuant
to a court order for partition by actually occupying specific portions of Lot No. 1639 in 1952 and
continue to do so until the present until this case was filed, clearly, the purpose of the court
approval has been met. This statement is not to be taken to mean that confirmation of the
commissioners may be dispensed with but only that the parties herein are estopped from raising
this question by their own acts of ratification of the supposedly non-binding sketch/subdivision
plan.

The records of the case show that sometime in 1946 there was a prior oral agreement to
tentatively partition Lot No. 1639. By virtue of this agreement, the original co-owners occupied
32

specific portions of Lot No. 1639. It was only in 1952 when the petition to subdivide Lot No.
33

1639 was filed because two of the co-owners, namely Hermogenes Olis and heirs of Pascual
Olis, refused to have said lot subdivided and have separate certificates of title. Significantly, after
the 1952 proceedings, the parties in this case by themselves and/or through their predecessors-in-
interest occupied specific portions of Lot No. 1639 in accordance with the sketch plan. Such
possession remained so until this case arose, or about forty (40) years later.
From its order in 1952, it can be gleaned that the CFI took notice of the tentative subdivision
plan by oral partition of the parties therein. Further, it appears that the court was aware that the
parties therein actually took possession of the portions in accordance with the sketch/subdivision
plan. With the factual backdrop, said court ordered the partition and appointed two (2)
commissioners to approve the tentative sketch/subdivision plan. It would not be unreasonable to
presume that the parties therein, having occupied specific portions of Lot No. 1639 in accordance
with the sketch/subdivision plan, were aware that it was that same sketch/subdivision plan which
would be considered by the commissioners for approval. There is no showing that respondents
by themselves or through their predecessors-in-interest raised any objections. On the contrary,
the records show that the parties continued their possession of the specific portions of Lot No.
1639 pursuant to the sketch/subdivision plan.

It has been previously held that a co-owner, who, though not a party to a partition accepts the
partition allotted to him, and holds and conveys the same in severalty, will not be subsequently
permitted to avoid partition. It follows that a party to a partition is also barred from avoiding
34

partition when he has received and held a portion of the subdivided land especially in this case
where respondents have enjoyed ownership rights over their share for a long time.

Parties to a partition proceeding, who elected to take under partition, and who took possession of
the portion allotted to them, are estopped to question title to portion allotted to another party. A
35

person cannot claim both under and against the same instrument. In other words, they accepted
36

the lands awarded them by its provisions, and they cannot accept the decree in part, and
repudiate it in part. They must accept all or none. Parties who had received the property
37

assigned to them are precluded from subsequently attacking its validity of any part of it. Here,
38

respondents, by themselves and/or through their predecessors-in-interest, already occupied of the

lots in accordance with the sketch plan. This occupation continued until this action was filed.
They cannot now be heard to question the possession and ownership of the other co-owners who
took exclusive possession of Lot 1639-D also in accordance with the sketch plan.

In technical estoppel, the party to be estopped must knowingly have acted so as to mislead his
adversary, and the adversary must have placed reliance on the action and acted as he would
otherwise not have done. Some authorities, however, hold that what is tantamount to estoppel
may arise without this reliance on the part of the adversary, and this is called, ratification or
election by acceptance or benefits, which arises when a party, knowing that he is not bound by a
defective proceeding, and is free to repudiate it if he will, upon knowledge, and while under no
disability, chooses to adopt such defective proceeding as his own. Ratification means that one
39

under no disability voluntarily adopts and gives sanction to some unauthorized act or defective
proceeding, which without his sanction would not be binding on him. It is this voluntary choice,
knowingly made, which amounts to ratification of what was therefore unauthorized, and
becomes the authorized act of the party so making the ratification. 40

The records show that respondents were paying rent for the use of a portion of Lot No. 1639-D.
Had they been of the belief that they were co-owners of the entire Lot No. 1639 they would not
have paid rent. Respondents attempted to counter this point by presenting an uncorroborated
testimony of their sole witness to the effect that the amount so paid to Roberto Maglucot and,
subsequently, to Ruperta Salma was for the payment of real property taxes. We are not
persuaded. In its quite improbable that the parties would be unaware of the difference in their
treatment of their transactions for so long a time. Moreover, no evidence was ever presented to
show that a tax declaration for the entire Lot No. 1639 has ever been made. Replete in the
records are tax declarations for specific portions of Lot 1639. It is inconceivable that respondents
would not be aware of this. With due diligence on their part, they could have easily verified this
fact. This they did not do for a period spanning more than four decades.

The payment of rentals by respondents reveal that they are mere lessees. As such, the possession
of respondents over Lot No. 1639-D is that of a holder and not in the concept of an owner. One
who possesses as a mere holder acknowledges in another a superior right which he believes to be
ownership, whether his belief be right or wrong. Since the possession of respondents were
41

found to be that of lessors of petitioners, it goes without saying that the latter were in possession
of Lot No. 1639-D in the concept of an owner from 1952 up to the time the present action was
commenced.

Partition may be inferred from circumstances sufficiently strong to support presumption. Thus, 42

after a long possession in severalty, a deed of partition may be presumed. It has been held that
43

recitals in deeds, possession and occupation of land, improvements made thereon for a long
series of years, and acquiescence for 60 years, furnish sufficient evidence that there was an
actual partition of land either by deed or by proceedings in the probate court, which had been lost
and were not recorded. And where a tract of land held in common has been subdivided into lots,
44

and one of the lots has long been known and called by the name of one of the tenants in
common, and there is no evidence of any subsequent claim of a tenancy in common, it may fairly
be inferred that there has been a partition and that such lot was set off to him whose name it
bears. 45

Respondents insist that the absence of any annotation in the certificate of title showing any
partition of Lot No. 1639 and that OCT No. 6725 has not been canceled clearly indicate that no
partition took place. The logic of this argument is that unless partition is shown in the title of the
subject property, there can be no valid partition or that the annotation in the title is the sole
evidence of partition.

Again, we are not persuaded. The purpose of registration is to notify and protect the interests of
strangers to a given transaction, who may be ignorant thereof, but the non-registration of the
deed evidencing such transaction does not relieve the parties thereto of their obligations
thereunder. As originally conceived, registration is merely a species of notice. The act of
46

registering a document is never necessary in order to give it legal effect as between the parties. 47

Requirements for the recording of the instruments are designed to prevent frauds and to permit
and require the public to act with the presumption that recorded instrument exist and are genuine.
48

It must be noted that there was a prior oral partition in 1946. Although the oral agreement was
merely tentative, the facts subsequent thereto all point to the confirmation of said oral partition.
By virtue of that agreement, the parties took possession of specific portions of the subject lot.
The action for partition was instituted because some of the co-owners refused to have separate
titles issued in lieu of the original title. In 1952, an order for partition was issued by the cadastral
court. There is no evidence that there has been any change in the possession of the parties. The
only significant fact subsequent to the issuance of the order of partition in 1952 is that
respondents rented portions of Lot No. 1639-D. It would be safe to conclude, therefore, that the
oral partition as well as the order of partition in 1952 were the bases for the finding of actual
partition among the parties. The legal consequences of the order of partition in 1952 having been
discussed separately, we now deal with oral partition in 1946. Given that the oral partition was
initially tentative, the actual possession of specific portions of Lot No. 1639 in accordance with
the oral partition and the continuation of such possession for a very long period indicate the
permanency and ratification of such oral partition. The validity of an oral partition is already
well-settled. In Espina vs. Abaya, we declared that an oral partition is valid. In Hernandez vs.
49

Andal, 50 reiterated in Tan vs. Lim, 51 this Court has ruled, thus:

On general principle, independent and in spite of the statute of frauds, courts of equity
have enforce oral partition when it has been completely or partly performed.

Regardless of whether a parol partition or agreement to partition is valid and enforceable

at law, equity will proper cases where the parol partition has actually been consummated
by the taking of possession in severalty and the exercise of ownership by the parties of
the respective portions set off to each, recognize and enforce such parol partition and the
rights of the parties thereunder. Thus, it has been held or stated in a number of cases
involving an oral partition under which the parties went into possession, exercised acts of
ownership, or otherwise partly performed the partition agreement, that equity will
confirm such partition and in a proper case decree title in accordance with the possession
in severalty.

In numerous cases it has been held or stated that parol partition may be sustained on the
ground of estoppel of the parties to assert the rights of a tenant in common as to parts of
land divided by parol partition as to which possession in severalty was taken and acts of
individual ownership were exercised. And a court of equity will recognize the agreement
and decree it to be valid and effectual for the purpose of concluding the right of the
parties as between each other to hold their respective parts in severalty.

A parol partition may also be sustained on the ground that the parties thereto have
acquiesced in and ratified the partition by taking possession in severalty, exercising acts
of ownership with respect thereto, or otherwise recognizing the existence of the partition.

A number of cases have specifically applied the doctrine of part performance, or have
stated that a part performance is necessary, to take a parol partition out of the operation of
the statute of frauds. It has been held that where there was a partition in fact between
tenants in common, and a part performance, a court of equity would have regard to
enforce such partition agreed to by the parties.

Two more points have constrained this Court to rule against respondents. First, respondents
Wilfreda Maglucot-Alejo and Constancio Alejo offered to buy the share of Roberto Maglucot.
Second, the tax declarations contain statements that the houses of respondents were built on the
land owned by Roberto Maglucot.
On the first point, petitioners presented Aida Maglucot who testified that after respondents were
informed that petitioners were going to use Lot No. 1639-D belonging to Roberto Maglucot,
respondents Wilfreda Maglucot-Alejo and Constancio Alejo went to the house of said witness
and offered to buy the share of Roberto Maglucot. 52 Aida Maglucot further testified that they
refused the offer because they also intend to use the lot for a residential purpose. 53 This
testimony of Aida Maglucot is unrebutted by respondents, and the CA did not touch upon this
finding of fact. Hence, the offer to buy has been established by the unrebutted evidence of the
petitioners. Why would they give such offer if they claim to be at least a co-owner of the said
lot? In effect, respondents impliedly admit the title of the petitioners and that they are not co-
owners, much less the sole owners, of Lot No. 1639-D.

On the second point, the existence of Tax Declaration No. 04-557 in the names of Constancio
Alejo and Godofreda Maglucot, 54 Tax Declaration No. 04-87-13 in the names of Leopoldo
Maglucot and Regina Barot, 55 Tax Declaration No. 04-593 in the names of Severo Maglucot and
Samni Posida 56 showing that the houses of the above-mentioned persons are constructed on the
land of Roberto Maglucot 57 constitute incontrovertible evidence of admission by the same
persons of the ownership of the land by Roberto Maglucot. Tax Declarations are public
documents. Unless their veracity is directly attacked, the contents therein are presumed to be true
and accurate. 58 The lone testimony of Severo Maglucot that Roberto Maglucot was only made to
appear as owner of the land in their respective declarations because he was the administrator of
Lot No. 1639 is uncorroborated and not supported by any other evidence.

No injustice is dealt upon respondents because they are entitled to occupy a portion of Lot No.
1639, particularly Lot No. 1639-A, in their capacity as heirs of Tomas Maglucot, one of the
original co-owners of Lot No. 1639 in accordance with the sketch plan of said lot showing the
partition into six portions. 59

Finally, this Court takes notice of the language utilized by counsel for petitioners in their petition
for review on certiorari.1âwphi1 Thrice in the petition, counsel for petitioners made reference to
the researcher of the CA. First, he alluded to the lack of scrutiny of the records and lack of study
of the law "by the researcher." 60 Second, he cited the researcher of the CA as having "sweepingly
stated without reference to the record" 61 that "[w]e have scanned the records on hand and found
no evidence of any partition." Finally, counsel for petitioners assailed the CA decision, stating
that "this will only show that there was no proper study of the case by the researcher." 62

Any court when it renders a decision does so as an arm of the justice system and as an institution
apart from the persons that comprise it. Decisions are rendered by the courts and not the persons
or personnel that may participate therein by virtue of their office. It is highly improper and
unethical for counsel for petitioners to berate the researcher in his appeal. Counsel for petitioner
should be reminded of the elementary rules of the legal profession regarding respect for the
courts by the use of proper language in its pleadings and admonished for his improper references
to the researcher of the CA in his petition. A lawyer shall abstain from scandalous, offensive, or
menacing language or behavior before the courts. 63

WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals is SET ASIDE
and the decision of the Regional Trial Court is hereby REINSTATED.1âwphi1.nêt
SO ORDERED.

[G.R. NO. 128338 : March 28, 2005]

TINING RESUENA, ALEJANDRA GARAY, LORNA RESUENA, ELEUTERIO

RESUENA, EUTIQUIA ROSARIO and UNISIMA RESUENA, Petitioner, v.
HON. COURT OF APPEALS, 11th DIVISION and JUANITO BORROMEO,
SR., Respondents.

DECISION

TINGA, J.:

This is a Rule 45 Petition for Review on Certiorari of the Decision1 of the

Court of Appeals affirming that of the Regional Trial Court (RTC) of Cebu, 2
which in turn reversed that of the Metropolitan Trial Court (mtc) of Talisay,
Cebu.3

The facts are as follows:

Private respondent, the late Juanito Borromeo, Sr. 4 (hereinafter,

respondent), is the co-owner and overseer of certain parcels of land located
in Pooc, Talisay, Cebu, designated as Lots Nos. 2587 and 2592 of the
Talisay-Manglanilla Estate. Respondent owns six-eighths (6/8) of Lot No.
2587 while the late spouses Inocencio Bascon and Basilisa Maneja (Spouses
Bascon) own two-eights (2/8) thereof. On the other hand, Lot No. 2592 is
owned in common by respondent and the heirs of one Nicolas Maneja.
However, the proportion of their undivided shares was not determined a
quo.

Prior to the institution of the present action, petitioners Tining Resuena,

Alejandra Garay, Lorna Resuena, Eleuterio Resuena, and Unisima Resuena
resided in the upper portion of Lot No. 2587, allegedly under the
acquiescence of the Spouses Bascon and their heir, Andres Bascon. On the
other hand, petitioner Eutiquia Rosario occupied a portion of Lot No. 2592,
allegedly with the permission of the heirs of Nicolas Maneja, one of the
original co-owners of Lot No. 2587. Respondent claims that all petitioners
have occupied portions of the subject property by virtue of his own liberality.

Respondent developed portions of Lots Nos. 2587 and 2592 occupied by him
into a resort known as the Borromeo Beach Resort. In his desire to expand
and extend the facilities of the resort that he established on the subject
properties, respondent demanded that petitioners vacate the property.
Petitioners, however, refused to vacate their homes.
On 16 February 1994, respondent filed a Complaint5 for ejectment with the
MTC against the petitioners. After a summary proceeding, the MTC, in a
Decision6 dated 10 October 1994, found that Lots Nos. 2587 and 2592 were
owned in common by respondent with other persons. The MTC ruled that
respondent did not have a preferential right of possession over the portions
occupied by petitioners, since Lots Nos. 2587 and 2592 were not yet
partitioned nor the disputed portions assigned to respondent as his
determinate share. Thus, the MTC held that respondent had no right to evict
petitioners therefrom. Consequently, respondent's Complaint was dismissed.

Notably, the MTC held that respondent and the spouses Bascon were the
owners in common of Lot No. 2587 and their respective shares had not yet
been determined by partition as proven by a testimony given by respondent
in Civil Case No. R-14600, viz:

Q. And the participation there of Inocencio Bascon is 2/8 of the said parcel of
land?cralawlibrary

A. Yes sir.

Q. And until the present that parcel of land is undivided? cralawlibrary

A. It is not yet partitioned, but during the time of Basilisa Maneja we had
already made some indications of the portions that we came to occupy.

Q. That is the parcel of land where you have your beach resort? cralawlibrary

A. Yes, sir; and that was our agreement, verbally, that with respect to the
portion of the land towards the sea-shore it will be my share and that
portion of the land towards the upper part will be theirs."7

On appeal, the RTC reversed the Decision of the MTC. It held that Article 487
of the Civil Code, which allows any one of the co-owners to bring an action in
ejectment, may successfully be invoked by the respondent because, in a
sense, a co-owner is the owner and possessor of the whole, and that the suit
for ejectment is deemed to be instituted for the benefit of all co-owners. 8
The RTC also ruled that assuming petitioners were authorized to occupy a
portion of the co-owned property, they could resume this occupation when
the properties shall have been partitioned and allocated to the ones who
gave them permission to reside therein. It thus held:

WHEREFORE, judgment of the lower court is hereby reversed and the

defendants are hereby directed to vacate the premises in question without
prejudice to their going back to the land after partition shall have been
effected by the coheirs and/or co-owners among themselves but to the
specific portion or portions adjudicated to the person or persons who
allegedly authorized them to occupy their portions by tolerance. 9

The Court of Appeals affirmed the Decision of the RTC; hence, this petition
which involves the following assignment of errors: 10

1. That with grave abuse of discretion, amounting to excess of jurisdiction,

the honorable eleventh division of the court of appeals erred in NOT
APPLYING and/or in NOT DECLARING private respondent juanito borromeo
estopped in filing this ejectment case against the herein six (6) petitioners.

2. That with grave abuse of discretion, the honorable eleventh division of the
court of appeals erred in incorrectly applying the statute of frauds,
considering that the verbal agreement entered into by and between spouses
inocencio bascon and basilisa maneja on the one hand and juanito borromeo
on the other more than twenty (20) years ago today, was already an
EXECUTED CONTRACT.

3. That with grave abuse of discretion, amounting to excess of jurisdiction,

the honorable eleventh division of the court of appeals erred in ignoring
outright article 493 of the new civil code of the philippines, considering that
the six (6) petitioners are only ASSIGNEES, pure and simple, of co-owners
spouses ignacio bascon and basilisa maneja and/or andres bascon, the
adopted son of the said spouses.

4. That granting arguendo that the herein six (6) petitioners have to be
ejected, the eleventh division of the court of appeals erred in NOT
remanding this case to the court of origin for the reception of evidence for
damages, pursuant to and in accordance with art. 546, new civil code.

The petition cannot prosper.

At the outset it must be stated that petitioners ground their petition on

respondent's testimony in Civil Case No. R-14600 that he had agreed with
co-owner, Basilisa Maneja, on the portions they each were to occupy in Lot
No. 2587 prior to the partition of the property. However, respondent's
testimony and, consequently, the agreement alluded to therein pertains
solely to Lot No. 2587 which, admittedly, all of petitioners occupy, save for
Eutiquia Rosario who occupies Lot No. 2592. No argument was presented in
this petition as regards the latter's claim. Having no basis to review Eutiquia
Rosario's claim to be allowed to continue in her occupation of Lot No. 2592,
this Court maintains the holding of the RTC on this matter, as affirmed by
the Court of Appeals, that respondent has the right to eject petitioner
Eutiquia Rosario from Lot No. 2592.

With regard to the other five (5) petitioners, the Court notes that their first
three assignments of errors are interrelated and built on each other.
Petitioners allege that respondent's testimony in Civil Case No. R-14600,
expressing that the upper two-eighths (2/8) portion of Lot No. 2587 would
be occupied by Basilisa Maneja, constituting as it does a waiver of said
portion, has estopped respondent from claiming the portion. Basilisa Maneja
and her husband allegedly relied on this agreement when the spouses
assigned the upper portion of Lot No. 2587 to petitioners. Moreover,
petitioners claim that their occupation of the upper portion of Lot No. 2587
had consummated the verbal agreement between respondent and Basilisa
Maneja and brought agreement beyond the purview of the Statute of Frauds.

A careful perusal of the foregoing issues reveals that petitioners assumed

the following as proven facts: (1) respondent had indicated to Basilisa
Maneja the portions they were to occupy in Lot No. 2587; and (2) the
Spouses Bascon assigned to petitioners their portions of Lot No. 2587. By
claiming these as the bases for their assignment of errors, petitioners in
essence are raising questions of fact.11

The issues raised by petitioners on the application of estoppel, statute of

frauds, and the assignment of properties owned in common in their favor,
while ostensibly raising questions of law, invite this Court to rule on
questions of fact. This runs counter to the settled rule that only questions of
law may be raised in a Petition for Review before the Court and the same
must be distinctly set forth.12

It is not the function of this Court to weigh anew the evidence already
passed upon by the Court of Appeals for such evidence is deemed final and
conclusive and may not be reviewed on appeal. A departure from the
general rule may be warranted, among others, where the findings of fact of
the Court of Appeals are contrary to the findings and conclusions of the trial
court, or when the same is unsupported by the evidence on record. 13

In the instant case, the RTC and the Court of Appeals rendered judgment
merely on questions of law as applied to the facts as determined by the
MTC. Consequently this Court must proceed on the same set of facts without
assuming, as petitioners have done, the veracity of claims which have been
considered, but not accepted as facts, by the courts below.
Guided by the foregoing, this Court finds in this case that filtered of the
muddle from petitioners' assignment of errors, it is unmistakable that
respondent has a right to eject the petitioners from Lot No. 2587.

Article 487 of the Civil Code, which provides simply that "[a]ny one of the
co-owners may bring an action in ejectment," is a categorical and an
unqualified authority in favor of respondent to evict petitioners from the
portions of Lot. No. 2587.

This provision is a departure from Palarca v. Baguisi,14 which held that an

action for ejectment must be brought by all the co-owners. Thus, a co-owner
may bring an action to exercise and protect the rights of all. When the action
is brought by one co-owner for the benefit of all, a favorable decision will
benefit them; but an adverse decision cannot prejudice their rights. 15

Respondent's action for ejectment against petitioners is deemed to be

instituted for the benefit of all co-owners of the property 16 since petitioners
were not able to prove that they are authorized to occupy the same.

Petitioners' lack of authority to occupy the properties, coupled with

respondent's right under Article 487, clearly settles respondent's prerogative
to eject petitioners from Lot No. 2587. Time and again, this Court has ruled
that 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. 17

Petitioners pose the strange claim that respondent had estopped himself
from filing an ejectment case against petitioners by his aforequoted
testimony in Civil Case No. R-14600. Such testimony is irrelevant to the case
at bar, as it does nothing to strengthen the claim of petitioners that they had
a right to occupy the properties. This testimony merely indicates that there
might have been an agreement between the Spouses Bascon and Borromeo
as to which of them would occupy what portion of Lot No. 2587. Yet this
averment hardly establishes a definitive partition, or moreover, any right of
petitioners to dwell in any portion of Lot No. 2587. Besides, "[e]stoppel is
effective only as between the parties thereto or their successors in interest;"
thus, only the spouses Bascon or their successors in interest may invoke
such "estoppel." A stranger to a transaction is neither bound by, nor in a
position to take advantage of, an estoppel arising therefrom. 18

For the same reason, it is of no moment whether indeed, as petitioners

claim, there was a verbal contract between Basilisa Maneja and Borromeo
when the latter indicated the portions they each were to occupy in Lot No.
2587. Such verbal contract, assuming there was one, does not detract from
the fact that the common ownership over Lot No. 2587 remained inchoate
and undivided, thus casting doubt and rendering purely speculative any
claim that the Spouses Bascon somehow had the capacity to assign or
transmit determinate portions of the property to petitioners.

Thus, in order that the petition may acquire any whiff of merit, petitioners
are obliged to establish a legal basis for their continued occupancy of the
properties. The mere tolerance of one of the co-owners, assuming that there
was such, does not suffice to establish such right. Tolerance in itself does
not bear any legal fruit, and it can easily be supplanted by a sudden change
of heart on the part of the owner. Petitioners have not adduced any
convincing evidence that they have somehow become successors-in-interest
of the Spouses Bascon, or any of the owners of Lot No. 2587.

Indeed, there is no writing presented to evidence any claim of ownership or

right to occupancy to the subject properties. There is no lease contract that
would vest on petitioners the right to stay on the property. As discussed by
the Court of Appeals,19 Article 1358 of the Civil Code provides that acts
which have for their object the creation, transmission, modification or
extinguishment of real rights over immovable property must appear in a
public instrument. How then can this Court accept the claim of petitioners
that they have a right to stay on the subject properties, absent any
document which indubitably establishes such right? Assuming that there was
any verbal agreement between petitioners and any of the owners of the
subject lots, Article 1358 grants a coercive power to the parties by which
they can reciprocally compel the documentation of the agreement. 20

Thus, the appellate court correctly appreciated the absence of any document
or any occupancy right of petitioners as a negation of their claim that they
were allowed by the Spouses Bascon to construct their houses thereon and
to stay thereon until further notice. On this note, this Court will no longer
belabor petitioners' allegation that their occupation of Lot No. 2587 is
justified pursuant to the alleged but unproven permission of the Spouses
Bascon.

All six (6) petitioners claim the right to be reimbursed "necessary expenses"
for the cost of constructing their houses in accordance with Article 546 of the
Civil Code.21 It is well-settled that while the Article allows full reimbursement
of useful improvements and retention of the premises until reimbursement is
made, applies only to a possessor in good faith, i.e., one who builds on land
with the belief that he is the owner thereof. Verily, persons whose
occupation of a realty is by sheer tolerance of its owners are not possessors
in good faith.22
The lower courts have made a common factual finding that petitioners are
occupying portions of Lots No. 2587 and 2592 by mere tolerance. Thus,
petitioners have no right to get reimbursed for the expenses they incurred in
erecting their houses thereon.

WHEREFORE, premises considered, the Petition is DENIED and the Decision

of the Court of Appeals AFFIRMED. Costs against petitioners.

SO ORDERED.

[G.R. NO. 148376. March 31, 2005]

LEONARDO ACABAL and RAMON NICOLAS, Petitioners, v. VILLANER ACABAL, EDUARDO

ACABAL, SOLOMON ACABAL, GRACE ACABAL, MELBA ACABAL, EVELYN ACABAL, ARMIN
ACABAL, RAMIL ACABAL, and BYRON ACABAL, Respondents.

DECISION

CARPIO MORALES, J.:

Before this Court is a Petition for Review on Certiorari of the February 15, 2001 Decision1 of the Court
of Appeals reversing that of the Regional Trial Court (RTC) of Dumaguete City, Branch 35. 2

In dispute is the exact nature of the document 3 which respondent Villaner Acabal (Villaner) executed in
favor of his godson-nephew-petitioner Leonardo Acabal (Leonardo) on April 19, 1990.

Villaner's parents, Alejandro Acabal and Felicidad Balasabas, owned a parcel of land situated in Barrio
Tanglad, Manjuyod, Negros Oriental, containing an area of 18.15 hectares more or less, described in
Tax Declaration No. 15856.4 By a Deed of Absolute Sale dated July 6, 1971, 5 his parents transferred
for P2,000.00 ownership of the said land to him, who was then married to Justiniana Lipajan. 6

Sometime after the foregoing transfer, it appears that Villaner became a widower.

Subsequently, he executed on April 19, 1990 a deed7 conveying the same property 8 in favor of
Leonardo.

Villaner was later to claim that while the April 19, 1990 document he executed now appears to be a
"Deed of Absolute Sale" purportedly witnessed by a Bais City trial court clerk Carmelo Cadalin and his
wife Lacorte, what he signed was a document captioned "Lease Contract" 9 (modeled after a July 1976
lease agreement10 he had previously executed with previous lessee, Maria Luisa Montenegro 11) wherein
he leased for 3 years the property to Leonardo at P1,000.00 per hectare12 and which was witnessed by
two women employees of one Judge Villegas of Bais City.

Villaner thus filed on October 11, 1993 a complaint 13 before the Dumaguete RTC against Leonardo and
Ramon Nicolas to whom Leonardo in turn conveyed the property, for annulment of the deeds of sale.
At the witness stand, Villaner declared:

Q: It appears, Mr. Acabal, that you have signed a document of sale with the defendant Leonardo
Acabal on April 19, 1990, please tell the court whether you have really agreed to sell this property to
the defendant on or before April 19, 1990? cralawlibrary

A: We had some agreement but not about the selling of this property.

Q: What was your agreement with the defendant Leonardo Acabal? cralawlibrary

A: Our agreement [was] that he will just rent. 14

xxx

Q: Now, please tell the court how were you able to sign this document on April 19, 1990? cralawlibrary

A: I do not know why I signed that, that is why I am puzzled.

Q: Why, did you not read the contents of this document?

A: I have not read that. I only happened to read the title of the Lease Contract.

Q: And do you recall who were the witnesses of the document which you signed in favor of
Leonardo Acabal?

A: Employees of Judge Villegas of Bais City.

Q: Did you see them sign that document?

A: Yes, sir.

Q: These signatures appearing in this document marked as Exhibit "C" for the plaintiff and
Exhibit "1" for the defendant, please examine over (sic) these signatures if these were the
signatures of these witnesses who signed this document?

A: These are not the signatures of the two women.

Q: And after signing this document on April 19, 1990, did you appear before a notary public to have
this notarized? cralawlibrary

A: No, I went home to San Carlos.15

xxx

Q: According to this document, you sell (sic) this property at P10,000.00, did you sell this property to
Leonardo Acabal? cralawlibrary
A: No, sir.

Q: How about after April 19, 1990, did you receive this amount from Leonardo Acabal? cralawlibrary

A: No, sir.16

xxx

Q: Now you said that on May 25, 1990, Leonardo Acabal did not pay the amount that he promised to
you, what did you do of (sic) his refusal to pay that amount? cralawlibrary

A: I went to Mr. [Carmelo] Mellie Cadalin because he was the one who prepared the papers
and to ask Leonardo Acabal why he will not comply with our agreement.

Q: By the way, who is this Mellie Cadalin?

A: Mellie Cadalin is also working in the sala of Judge Villegas.

Q: Who requested Mellie Cadalin to prepare this document? cralawlibrary

A: Maybe it was Leonardo Acabal.

Q: By the way, when for the first time did you talk to Leonardo Acabal regarding your agreement to
lease this property to him? cralawlibrary

A: March 14, 1990, in San Carlos.

Q: And what document did you give to him in order that that document will be prepared?

A: I have given (sic) some papers and contract of lease that I have signed to (sic) Mrs.
Montenegro.17 (Emphasis and underscoring supplied) ςrαlαωlιbrαrÿ

xxx

Q: Now, Carmelo Cadalin ["Mellie"] also testified before this court that in fact he identified the
document marked as Exhibit "C" for the plaintiff that what you executed on April 19, 1990 was a deed
of sale and not a contract of lease, what can you say to that statement? cralawlibrary

A: That is a lie.

Q: And what's the truth then? cralawlibrary

A: What really (sic) I have signed was the document of lease contract.

Q: Now, can you explain to the Honorable Court why it so happened that on April 19, you
were able to sign a deed of sale?
A: What I can see now is that perhaps those copies of the deed of sale were placed by Mr.
Cadalin under the documents which I signed the lease contract. But why is it that it has
already a deed of sale when what I have signed was only the lease of contract or the contract of lease.

Q: Now, Mr. Cadalin also stated before this court that he handed over to you this Deed of Sale marked
as Exhibit "C" and according to him you read this document, what can you say to this statement? cralawlibrary

A: Yes, there was a document that he gave me to read it (sic)but it was a contract of lease.

Q: How sure are you that what you signed on April 19, 1990 was really a contract of lease and not a
contract of sale? cralawlibrary

A: Because when I signed the contract of lease the witnesses that witnessed my signing the
document were the employees of Judge Villegas and then I am now surprised why in the
deed of sale which I purportedly signed are witnessed by Carmelo Cadalin and his wife
Lacorte.18 (Emphasis and underscoring supplied) ςrαlαωlιbrαrÿ

On the other hand, Leonardo asserts that what Villaner executed was a Deed of Absolute Sale for a
consideration of P10,000.00 which he had already paid,19 and as he had become the absolute owner of
the property, he validly transferred it to Ramon Nicolas on May 19, 1990. 20

Carmelo Cadalin who admittedly prepared the deed of absolute sale and who appears as a witness,
along with his wife, to the execution of the document corroborated Leonardo's claim:

Q: Mr. Cadalin, do you know the plaintiff Villaner Acabal? cralawlibrary

A: Yes, I know.21

xxx

Q: And I would like to ask you Mr. witness why do you know Villaner Acabal?

A: At the time that he went to our house together with Leonardo Acabal he requested me to
prepare a deed of sale as regards to a sale of the property. 22

xxx

Q: And after they requested you to prepare a document of sale, what did you do?

A: At first I refused to [do] it because I have so many works to do, but then they insisted so
I prepared the deed.

Q: After you prepared the document, what did you do?

A: After I prepared it I gave it to him so that he could read the same.

Q: When you say "him," whom do you refer to?

A: Villaner Acabal.

Q: And did Villaner Acabal read the document you prepared?

A: Yes, he read it.

Q: And after reading it what did Villaner Acabal do?

A: He signed the document.

Q: Showing to you a document which is marked Exhibit C for the plaintiff and Exhibit 1 for
the defendants, please tell the Honorable Court what relation this document has to the
document which you described earlier?

COURT INTERPRETER:

Witness is confronted with the said document earlier marked as Exhibit C for the
prosecution and Exhibit 1 for the defense.

A: Yes, this is the one.23

xxx

Q: Also stated in the document is the phrase "Signed in the presence of" and there is a
number and then two signatures, could you please examine the document and say whether
these signatures are familiar to you?

A: Yes, number one is my signature and number 2 is the signature of my wife as witness. 24

xxx

Q: After Villaner Acabal signed the document, what did Villaner Acabal do? cralawlibrary

A: He was given the payment by Leonardo Acabal.25

xxx

Q: Aside from the document, deed of absolute sale, that you mentioned earlier that you prepared for
Villaner Acabal and Leonardo Acabal, what other documents, if any, did you prepare for them? cralawlibrary

A: Affidavit of non-tenancy and aggregate area.26 (Emphasis and underscoring supplied) ςrαlαωlιbrαrÿ

The complaint was later amended27 to implead Villaner's eight children as party plaintiffs, they being
heirs of his deceased wife.
By Decision of August 8, 1996, the trial court found for the therein defendants-herein petitioners
Leonardo and Ramon Nicolas and accordingly dismissed the complaint.

Villaner et al. thereupon brought the case on appeal to the Court of Appeals which reversed the trial
court, it holding that the Deed of Absolute Sale executed by Villaner in favor of Leonardo was
simulated and fictitious."28

Hence, Leonardo and Ramon Nicolas' present Petition for Review on Certiorari, 29
anchored on the
following assignments of error:

I.

THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR WHEN IT RULED THAT RESPONDENT

VILLANER ACABAL WAS DECEIVED INTO SIGNING THE DEED OF ABSOLUTE SALE WHEN THE LATTER

KNOWINGLY, FREELY AND VOLUNTARILY EXECUTED THE SAME IN FAVOR OF PETITIONER LEONARDO

ACABAL.

II.

THE COURT OF APPEALS ERRED WHEN IT RULED THAT THE CONSIDERATION OF THE DEED OF

ABSOLUTE SALE IN THE AMOUNT OF TEN THOUSAND PESOS (P10,0000.00) WAS "UNUSUALLY LOW

AND INADEQUATE," ESPECIALLY TAKING INTO ACCOUNT THE LOCATION OF THE SUBJECT PROPERTY.

III.

THE COURT OF APPEALS ERRED WHEN IT FAILED TO CONSIDER WHY RESPONDENT VILLANER

ACABAL ONLY QUESTIONED THE POSSESSION AND OWNERSHIP OF PETITIONER RAMON NICOLAS IN

COURT AFTER THE LATTER WAS IN OPEN, CONTINUOUS AND PEACEFUL POSSESSION OF THE

SUBJECT PROPERTY FOR ALMOST THREE (3) YEARS.

IV.

THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN LAW WHEN IT FAILED TO DECLARE

PETITIONER RAMON NICOLAS AS A BUYER IN GOOD FAITH AS THE LATTER TOOK THE NECESSARY

STEPS AN ORDINARY AND PRUDENT MAN WOULD HAVE TAKEN BEFORE BUYING THE QUESTIONED

PROPERTY.

V.
THE COURT OF APPEALS ERRED IN RULING IN FAVOR OF RESPONDENT VILLANER ACABAL WHEN THE

LATTER DID NOT PRESENT A SINGLE WITNESS TO TESTIFY ON THE ALLEGED CONTRACT OF LEASE

WHICH HE ALLEGEDLY SIGNED AND WITNESSED BY THE EMPLOYEES OF JUDGE VILLEGAS.

VI.

THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN LAW WHEN IT RULED THAT RULE 8,

SECTION 8 OF THE 1987 (sic) RULE (sic) OF CIVIL PROCEDURE IS NOT APPLICABLE IN THE CASE AT

BAR, CONTRARY TO THE RULING OF THE LOWER COURT.

VII.

THE COURT OF APPEALS ERRED WHEN IT ORDERED PETITIONERS TO PAY RESPONDENTS "JOINTLY

AND SEVERALLY BY WAY OF RENTAL THE SUM OF P10,000.00 PER YEAR FROM 1990 UP TO THE TIME

THEY VACATE THE PREMISES."30

Procedurally, petitioners contend that the Court of Appeals erred when it failed to apply Section 8,
Rule 8 of the Rules of Court, respondent Villaner having failed to deny under oath the genuineness
and due execution of the April 19, 1990 Deed of Absolute Sale.

Petitioners' contention does not persuade. The failure to deny the genuineness and due execution of
an actionable document does not preclude a party from arguing against it by evidence of fraud,
mistake, compromise, payment, statute of limitations, estoppel, and want of consideration. 31

On the merits, this Court rules in petitioners' favor.

It is a basic rule in evidence that the burden of proof lies on the party who makes the allegations 32 - ei
incumbit probatio, qui dicit, non qui negat; cum per rerum naturam factum negantis probatio nulla
sit.33 If he claims a right granted by law, he must prove it by competent evidence, relying on the
strength of his own evidence and not upon the weakness of that of his opponent.

More specifically, allegations of a defect in or lack of valid consent to a contract by reason of fraud or
undue influence are never presumed but must be established not by mere preponderance of evidence
but by clear and convincing evidence.34 For the circumstances evidencing fraud and misrepresentation
are as varied as the people who perpetrate it in each case, assuming different shapes and forms and
may be committed in as many different ways.35

In the case at bar, it was incumbent on the plaintiff-herein respondent Villaner to prove that he was
deceived into executing the Deed of Absolute Sale. Except for his bare allegation that the transaction
was one of lease, he failed to adduce evidence in support thereof. His conjecture that "perhaps those
copies of the deed of sale were placed by Mr. Cadalin under the documents which I signed the contract
of lease,"36 must fail, for facts not conjectures decide cases.
Attempting to seek corroboration of his account, Villaner presented Atty. Vicente Real who notarized
the document. While on direct examination, Atty. Real virtually corroborated Villaner's claim that he
did not bring the document to him for notarization, 37 on cross-examination, Atty. Real conceded that it
was impossible to remember every person who would ask him to notarize documents:

Q: And in the course of your notarization, can you remember each and every face that come
(sic) to you for notarization?

A: No, it is impossible.

Q: In the case of Villaner Acabal which you have his document notarized (sic) in 1990, can
you remember his face when he came to you?

A: No.

Q: And can you also say, if a person who came to you having a document to be notarized
and if he will appear again after a month, can you remember whether he was the one who
came to you?

A: Not so much because everyday there are many people who appear with documents to be
notarized,

Q: So, it is safe to say that if Villaner Acabal came to you on April 25 or rather April 16,
1990 andhave (sic) his document notarized if he comes back in, say May 25, can you still
remember if he was the one who came to you?

A: I cannot be sure but at least, there are times I can remember persons because he seems
to be close to me already.

Q: Is this Villaner close to you? cralawlibrary

A: Because he has been frequenting the house/asking for a copy of the document.

Q: So, he became close to you after you notarized the document?

A: Yes.38 (Emphasis and underscoring supplied) ςrαlαωlιbrαrÿ

On Villaner's claim that two women employees of Judge Villegas signed as witnesses to the deed 39 but
that the signatures appearing thereon are not those of said witnesses, 40 the same must be discredited
in light of his unexplained failure to present such alleged women employee-witnesses.

In another vein, Villaner zeroes in on the purchase price of the property - P10,000.00 - which to him
was unusually low if the transaction were one of sale. To substantiate his claim, Villaner presented Tax
Declarations covering the property for the years 1971, 41 1974,42 1977,43 1980,44 1983,45 1985,46 as well
as a Declaration of Real Property executed in 1994.47
It bears noting, however, that Villaner failed to present evidence on the fair market value of the
property as of April 19, 1990, the date of execution of the disputed deed. Absent any evidence of the
fair market value of a land as of the time of its sale, it cannot be concluded that the price at which it
was sold was inadequate.48 Inadequacy of price must be proven because mere speculation or
conjecture has no place in our judicial system. 49

Victor Ragay, who was appointed by the trial court to conduct an ocular inspection 50 of the property
and to investigate matters relative to the case,51 gave an instructive report dated December 3, 1994, 52
the pertinent portions of which are hereby reproduced verbatim:

a) Only three (3) to four (4) hectares of the eighteen (18) were planted to sugar cane, the rest was
never cultivated;

b) the soil is reddish and somewhat sandy in composition;

c) the soil contains so much limestones (rocks consisting mainly of calcium carbonate);

d) no part of the land in question is plain or flat, contrary to claim of the plaintiff that almost 10
hectares of the land in question is plain or flat;

e) some areas, eastward of and adjacent of the land in question (mistakenly to be owned by the
defendant Nicolas) were planted to sugar cane by the owners - Kadusales;

f) the road going to the land in question (as claimed to be the road) is no longer passable because it
has been abandoned and not maintained by anyone, thus it makes everything impossible for anybody
to get and haul the sugar cane from the area;

g) the Commissioner has discovered some stockpiles of abandoned harvested sugar canes left to rot,
along the side of the road, undelivered to the milling site because of the difficulty in bringing up trucks
to the scene of the harvest;

h) the sugarcanes presently planted on the land in question at the time of the ocular inspection were
three (3) feet in height and their structural built was thin or lean;

i) Most of the part of the 18 hectares is not planted or cultivated because the same is too rocky and
not suitable for planting to sugarcane.53

Additionally, Ragay reported that one Anatolio Cabusog recently purchased a 6-hectare property
adjoining that of the subject property for only P1,600.0054 or P266.67 per hectare. Given that, had the
18-hectare subject property been sold at about the same time, it would have fetched the amount of
P4,800.00,55 hence, the P10,000.00 purchase price appearing in the questioned April 19, 1990
document is more than reasonable.

Even, however, on the assumption that the price of P10,000.00 was below the fair market value of the
property in 1990, mere inadequacy of the price per se will not rule out the transaction as one of sale.
For the price must be grossly inadequate or shocking to the conscience such that the mind revolts at
it and such that a reasonable man would neither directly nor indirectly be likely to consent to it. 56

Still in another vein, Villaner submits that Leonardo's transfer of the property to Nicolas in a span of
one month for a profit of P30,000.00 conclusively reflects Leonardo's fraudulent intent. This
submission is a non sequitur.

As for Villaner's argument that the sale of the property to Leonardo and the subsequent sale thereof to
Nicolas are void for being violative of the retention limits imposed by Republic Act No. 6657, otherwise
known as the Comprehensive Agrarian Reform Law, the same fails. The pertinent provisions of said
law read:

SECTION 6. Retention Limits. - Except as otherwise provided in this Act, no person may retain,
directly or indirectly, any public or agricultural land, the size of which may vary according to factors
governing a viable family-sized farm, such as commodity produced, terrain, infrastructure, and soil
fertility as determined by the Presidential Agrarian Reform Council (PARC) created hereunder, but in
no case shall retention by the landowner exceed five (5) hectares. Three (3) hectares may be
awarded to each child of the landowner, subject to the following qualifications: (1) that he is at least
fifteen (15) years of age; and (2) that he is tilling the land or directly managing the farm: Provided,
That landowners whose lands have been covered by Presidential Decree No. 27 shall be allowed to
keep the areas originally retained by them thereunder: 57 Provided further, That original homestead
grantees or direct compulsory heirs who still own the original homestead at the time of the approval of
this Act shall retain the same areas as long as they continue to cultivate said homestead.

xxx

Upon the effectivity of this Act, any sale, disposition, lease, management, contract or
transfer of possession of private lands executed by the original landowner in violation of
this Act shall be null and void: Provided, however, that those executed prior to this Act shall be
valid only when registered with the Register of Deeds within a period of three (3) months after the
effectivity of this Act. Thereafter, all Registers of Deeds shall inform the DAR within thirty (30) days of
any transaction involving agricultural lands in excess of five (5) hectares.

xxx

SECTION 70. Disposition of Private Agricultural Lands. - The sale or disposition of agricultural lands
retained by a land owner as a consequence of Section 6 hereof shall be valid as long as the total
landholdings that shall be owned by the transferee thereof inclusive of the land to be acquired shall
not exceed the landholding ceilings provided for in this Act.

Any sale or disposition of agricultural lands after the effectivity of this Act found to be
contrary to the provisions hereof shall be null and void.

Transferees of agricultural lands shall furnish the appropriate Register of Deeds and the BARC an
affidavit attesting that his total landholdings as a result of the said acquisition do not exceed the
landholding ceiling. The Register of Deeds shall not register the transfer of any agricultural land
without the submission of his sworn statement together with proof of service of a copy thereof to the
BARC. (Emphasis and underscoring supplied) ςrαlαωlιbrαrÿ

As the above-quoted provisions of the Comprehensive Agrarian Reform Law show, only those private
lands devoted to or suitable for agriculture are covered by it. 58 As priorly related, Victor Ragay, who
was appointed by the trial court to conduct an ocular inspection of the property, observed in his report
that only three (3) to four (4) hectares were planted with sugarcane while the rest of the property was
not suitable for planting as the soil was full of limestone. 59 He also remarked that the sugarcanes were
only 3 feet in height and very lean,60 whereas sugarcanes usually grow to a height of 3 to 6 meters
(about 8 to 20 feet) and have stems 2 to 5 centimeters (1-2 inches) thick. 61

It is thus gathered that the property was not suitable for agricultural purposes. In any event, since the
area devoted to the planting of sugarcane, hence, suitable for agricultural purposes, comprises only 4
hectares at the most, it is less than the maximum retention limit prescribed by law. There was then no
violation of the Comprehensive Agrarian Reform Law.

Even assuming that the disposition of the property by Villaner was contrary to law, he would still have
no remedy under the law as he and Leonardo were in pari delicto, hence, he is not entitled to
afirmative relief - one who seeks equity and justice must come to court with clean hands. In pari
delicto potior est conditio defendentis.62

The proposition is universal that no action arises, in equity or at law, from an illegal
contract; no suit can be maintained for its specific performance, or to recover the property
agreed to be sold or delivered, or the money agreed to be paid, or damages for its violation.
The rule has sometimes been laid down as though it were equally universal, that where the parties are
in pari delicto, no affirmative relief of any kind will be given to one against the other. 63 (Emphasis and
underscoring supplied) ςrαlαωlιbrαrÿ

The principle of pari delicto is grounded on two premises: first, that courts should not lend their good
offices to mediating disputes among wrongdoers; 64 and second, that denying judicial relief to an
admitted wrongdoer is an effective means of deterring illegality. 65 This doctrine of ancient vintage is
not a principle of justice but one of policy as articulated in 1775 by Lord Mansfield in Holman v.
Johnson:66

The objection, that a contract is immoral or illegal as between the plaintiff and defendant, sounds at
all times very ill in the mouth of the defendant. It is not for his sake, however, that the objection is
ever allowed; but it is founded in general principles of policy, which the defendant has the advantage
of, contrary to the real justice, as between him and the plaintiff, by accident, if I may so say. The
principle of public policy is this; ex dolo malo non oritur actio.67 No court will lend its aid to a man who
founds his cause of action upon an immoral or an illegal act. If, from the plaintiff's own stating or
otherwise, the cause of action appears to arise ex turpi causa,68 or the transgression of a positive law
of this country, there the court says he has no right to be assisted. It is upon that ground the court
goes; not for the sake of the defendant, but because they will not lend their aid to such a plaintiff. So
if the plaintiff and the defendant were to change sides, and the defendant was to bring his action
against the plaintiff, the latter would then have the advantage of it; for where both are equally in fault
potior est conditio defendentis.69

Thus, to serve as both a sanction and as a deterrent, the law will not aid either party to an illegal
agreement and will leave them where it finds them.

The principle of pari delicto, however, is not absolute, admitting an exception under Article 1416 of the
Civil Code.

ART. 1416. When the agreement is not illegal per se but is merely prohibited, and the prohibition by
the law is designed for the protection of the plaintiff, he may, if public policy is thereby enhanced,
recover what he has paid or delivered.

Under this article, recovery for what has been paid or delivered pursuant to an inexistent contract is
allowed only when the following requisites are met: (1) the contract is not illegal per se but merely
prohibited; (2) the prohibition is for the protection of the plaintiffs; and (3) if public policy is enhanced
thereby.70 The exception is unavailing in the instant case, however, since the prohibition is clearly not
for the protection of the plaintiff-landowner but for the beneficiary farmers. 71

In fine, Villaner is estopped from assailing and annulling his own deliberate acts. 72

More. Villaner cannot feign ignorance of the law, nor claim that he acted in good faith, let alone assert
that he is less guilty than Leonardo. Under Article 3 of the Civil Code, "ignorance of the law excuses no
one from compliance therewith."

And now, Villaner's co-heirs' claim that as co-owners of the property, the Deed of Absolute Sale
executed by Villaner in favor of Leonardo does not bind them as they did not consent to such an
undertaking. There is no question that the property is conjugal. Article 160 of the Civil Code 73
provides:

ART. 160. 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. 74

The presumption, this Court has held, applies to all properties acquired during marriage. For the
presumption to be invoked, therefore, the property must be shown to have been acquired during the
marriage.75

In the case at bar, the property was acquired on July 6, 1971 during Villaner's marriage with
Justiniana Lipajan. It cannot be seriously contended that simply because the tax declarations covering
the property was solely in the name of Villaner it is his personal and exclusive property.

In Bucoy v. Paulino76 and Mendoza v. Reyes77 which both apply by analogy, this Court held that
registration alone of the properties in the name of the husband does not destroy the conjugal nature
of the properties.78 What is material is the time when the land was acquired by Villaner, and that was
during the lawful existence of his marriage to Justiniana.

Since the property was acquired during the existence of the marriage of Villaner and Justiniana, the
presumption under Article 160 of the Civil Code is that it is the couple's conjugal property. The burden
is on petitioners then to prove that it is not. This they failed to do.

The property being conjugal, upon the death of Justiniana Lipajan, the conjugal partnership was
terminated.79 With the dissolution of the conjugal partnership, Villaner's interest in the conjugal
partnership became actual and vested with respect to an undivided one-half portion. 80 Justiniana's
rights to the other half, in turn, vested upon her death to her heirs 81 including Villaner who is entitled
to the same share as that of each of their eight legitimate children. 82 As a result then of the death of
Justiniana, a regime of co-ownership arose between Villaner and his co-heirs in relation to the
property.83

With respect to Justiniana's one-half share in the conjugal partnership which her heirs inherited,
applying the provisions on the law of succession, her eight children and Villaner each receives one-
ninth (1/9) thereof. Having inherited one-ninth (1/9) of his wife's share in the conjugal partnership or
one eighteenth (1/18)84 of the entire conjugal partnership and is himself already the owner of one half
(1/2) or nine-eighteenths (9/18), Villaner's total interest amounts to ten-eighteenths (10/18) or five-
ninths (5/9).

While Villaner owns five-ninths (5/9) of the disputed property, he could not claim title to any definite
portion of the community property until its actual partition by agreement or judicial decree. Prior to
partition, all that he has is an ideal or abstract quota or proportionate share in the property. 85 Villaner,
however, as a co-owner of the property has the right to sell his undivided share thereof. The Civil
Code provides so:

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

Thus, every co-owner has absolute ownership of his undivided interest in the co-owned property and
is free to alienate, assign or mortgage his interest except as to purely personal rights. While a co-
owner has the right to freely sell and dispose of his undivided interest, nevertheless, as a co-owner,
he cannot alienate the shares of his other co-owners - nemo dat qui non habet.86

Villaner, however, sold the entire property without obtaining the consent of the other co-owners.
Following the well-established principle that the binding force of a contract must be recognized as far
as it is legally possible to do so - quando res non valet ut ago, valeat quantum valere potest87 - the
disposition affects only Villaner's share pro indiviso, and the transferee gets only what corresponds to
his grantor's share in the partition of the property owned in common. 88
As early as 1923, this Court has ruled that even if a co-owner sells the whole property as his, the sale
will affect only his own share but not those of the other co-owners who did not consent to the sale.
This is because under the aforementioned codal provision, the sale or other disposition affects only his
undivided share and the transferee gets only what would correspond to this grantor in the partition of
the thing owned in common. Consequently, by virtue of the sales made by Rosalia and Gaudencio
Bailon which are valid with respect to their proportionate shares, and the subsequent transfers which
culminated in the sale to private respondent Celestino Afable, the said Afable thereby became a co-
owner of the disputed parcel of land as correctly held by the lower court since the sales produced the
effect of substituting the buyers in the enjoyment thereof.

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

The proper action in cases like this is not for the nullification of the sale or the recovery of possession
of the thing owned in common from the third person who substituted the co-owner or co-owners who
alienated their shares, but the DIVISION of the common property as if it continued to remain in the
possession of the co-owners who possessed and administered it. 89

Thus, it is now settled that the appropriate recourse of co-owners in cases where their consent were
not secured in a sale of the entire property as well as in a sale merely of the undivided shares of some
of the co-owners is an action for PARTITION under Rule 69 of the Revised Rules of Court. Neither
recovery of possession nor restitution can be granted since the defendant buyers are legitimate
proprietors and possessors in joint ownership of the common property claimed. 90 (Italics in the
original; citations omitted; underscoring supplied)

This Court is not unmindful of its ruling in Cruz v. Leis91 where it held:

It is conceded that, as a rule, a co-owner such as Gertrudes could only dispose of her share in the
property owned in common. Article 493 of the Civil Code provides:

xxx

Unfortunately for private respondents, however, the property was registered in TCT No. 43100 solely
in the name of "Gertrudes Isidro, widow." Where a parcel of land, forming part of the undistributed
properties of the dissolved conjugal partnership of gains, is sold by a widow to a purchaser who
merely relied on the face of the certificate of title thereto, issued solely in the name of the widow, the
purchaser acquires a valid title to the land even as against the heirs of the deceased spouse. The
rationale for this rule is that "a person dealing with registered land is not required to go behind the
register to determine the condition of the property. He is only charged with notice of the burdens on
the property which are noted on the face of the register or the certificate of title. To require him to do
more is to defeat one of the primary objects of the Torrens system." 92 (Citation omitted)
Cruz, however, is not applicable for the simple reason that in the case at bar the property in dispute is
unregistered. The issue of good faith or bad faith of a buyer is relevant only where the subject of the
sale is a registered land but not where the property is an unregistered land. 93 One who purchases an
unregistered land does so at his peril.94 Nicolas' claim of having bought the land in good faith is thus
irrelevant.95

WHEREFORE, the petition is GRANTED. The Court of Appeals February 15, 2001 Decision in CA-G.R.
CV No. 56148 is REVERSED and SET ASIDE and another is rendered declaring the sale in favor of
petitioner Leonardo Acabal and the subsequent sale in favor of petitioner Ramon Nicolas valid but only
insofar as five-ninths (5/9) of the subject property is concerned.

No pronouncement as to costs.

SO ORDERED.

[G.R. NO. 161916 - January 20, 2006]

ARNELITO ADLAWAN, Petitioner, v. EMETERIO M. ADLAWAN and

NARCISA M. ADLAWAN, Respondents.

DECISION

YNARES-SANTIAGO, J.:

Assailed in this Petition for Review is the September 23, 2003 Decision 1 of
the Court of Appeals in CA-G.R. SP No. 74921 which set aside the
September 13, 2002 Decision2 of the Regional Trial Court (RTC) of Cebu
City, Branch 7, in Civil Case No. CEB-27806, and reinstated the February 12,
2002 Judgment3 of the Municipal Trial Court (MTC) of Minglanilla, Metro
Cebu, in Civil Case No. 392, dismissing petitioner Arnelito Adlawan's
unlawful detainer suit against respondents Emeterio and Narcisa Adlawan.
Likewise questioned is the January 8, 2004 Resolution 4 of the Court of
Appeals which denied petitioner's motion for reconsideration.

The instant ejectment suit stemmed from the parties' dispute over Lot 7226
and the house built thereon, covered by Transfer Certificate of Title No.
8842,5 registered in the name of the late Dominador Adlawan and located at
Barrio Lipata, Municipality of Minglanilla, Cebu. In his complaint, petitioner
claimed that he is an acknowledged illegitimate child6 of Dominador who died
on May 28, 1987 without any other issue. Claiming to be the sole heir of
Dominador, he executed an affidavit adjudicating to himself Lot 7226 and
the house built thereon.7 Out of respect and generosity to respondents who
are the siblings of his father, he granted their plea to occupy the subject
property provided they would vacate the same should his need for the
property arise. Sometime in January 1999, he verbally requested
respondents to vacate the house and lot, but they refused and filed instead
an action for quieting of title 8 with the RTC. Finally, upon respondents'
refusal to heed the last demand letter to vacate dated August 2, 2000,
petitioner filed the instant case on August 9, 2000. 9

On the other hand, respondents Narcisa and Emeterio, 70 and 59 years of

age, respectively,10 denied that they begged petitioner to allow them to stay
on the questioned property and stressed that they have been occupying Lot
7226 and the house standing thereon since birth. They alleged that Lot 7226
was originally registered in the name of their deceased father, Ramon
Adlawan11 and the ancestral house standing thereon was owned by Ramon
and their mother, Oligia Mañacap Adlawan. The spouses had nine 12 children
including the late Dominador and herein surviving respondents Emeterio and
Narcisa. During the lifetime of their parents and deceased siblings, all of
them lived on the said property. Dominador and his wife, Graciana Ramas
Adlawan, who died without issue, also occupied the same. 13 Petitioner, on
the other hand, is a stranger who never had possession of Lot 7226.

Sometime in 1961, spouses Ramon and Oligia needed money to finance the
renovation of their house. Since they were not qualified to obtain a loan,
they transferred ownership of Lot 7226 in the name of their son Dominador
who was the only one in the family who had a college education. By virtue of
a January 31, 1962 simulated deed of sale, 14 a title was issued to Dominador
which enabled him to secure a loan with Lot 7226 as collateral.
Notwithstanding the execution of the simulated deed, Dominador, then
single, never disputed his parents' ownership of the lot. He and his wife,
Graciana, did not disturb respondents' possession of the property until they
died on May 28, 1987 and May 6, 1997, respectively.

Respondents also contended that Dominador's signature at the back of

petitioner's birth certificate was forged, hence, the latter is not an heir of
Dominador and has no right to claim ownership of Lot 7226. 15 They argued
that even if petitioner is indeed Dominador's acknowledged illegitimate son,
his right to succeed is doubtful because Dominador was survived by his wife,
Graciana.16

On February 12, 2002, the MTC dismissed the complaint holding that the
establishment of petitioner's filiation and the settlement of the estate of
Dominador are conditions precedent to the accrual of petitioner's action for
ejectment. It added that since Dominador was survived by his wife,
Graciana, who died 10 years thereafter, her legal heirs are also entitled to
their share in Lot 7226. The dispositive portion thereof, reads:
In View of the foregoing, for failure to prove by preponderance of evidence,
the plaintiff's cause of action, the above-entitled case is hereby Ordered
DISMISSED.

SO ORDERED.17

On appeal by petitioner, the RTC reversed the decision of the MTC holding
that the title of Dominador over Lot 7226 cannot be collaterally attacked. It
thus ordered respondents to turn over possession of the controverted lot to
petitioner and to pay compensation for the use and occupation of the
premises. The decretal portion thereof, provides:

Wherefore, the Judgment, dated February 12, 2002, of the Municipal Trial
Court of Minglanilla, Cebu, in Civil Case No. 392, is reversed. Defendants-
appellees are directed to restore to plaintiff-appellant possession of Lot 7226
and the house thereon, and to pay plaintiff-appellant, beginning in August
2000, compensation for their use and occupation of the property in the
amount of P500.00 a month.

So ordered.18

Meanwhile, the RTC granted petitioner's motion for execution pending

appeal19 which was opposed by the alleged nephew and nieces of Graciana in
their motion for leave to intervene and to file an answer in intervention. 20
They contended that as heirs of Graciana, they have a share in Lot 7226 and
that intervention is necessary to protect their right over the property. In
addition, they declared that as co-owners of the property, they are allowing
respondents to stay in Lot 7226 until a formal partition of the property is
made.

The RTC denied the motion for leave to intervene. 21 It, however, recalled the
order granting the execution pending appeal having lost jurisdiction over the
case in view of the petition filed by respondents with the Court of Appeals. 22

On September 23, 2003, the Court of Appeals set aside the decision of the
RTC and reinstated the judgment of the MTC. It ratiocinated that petitioner
and the heirs of Graciana are co-owners of Lot 7226. As such, petitioner
cannot eject respondents from the property via an unlawful detainer suit
filed in his own name and as the sole owner of the property. Thus'

WHEEFORE, premises considered, the appealed Decision dated September

13, 2002 of the Regional Trial Court of Cebu City, Branch 7, in Civil Case No.
CEB-27806 is REVERSED and SET ASIDE, and the Judgment dated February
12, 2002 of the Municipal Trial Court of Minglanilla, Metro Cebu, in Civil Case
No. 392 is REINSTATED. Costs against the respondent.

SO ORDERED.23

Petitioner's motion for reconsideration was denied. Hence, the instant

petition.

The decisive issue to be resolved is whether or not petitioner can validly

maintain the instant case for ejectment.

Petitioner averred that he is an acknowledged illegitimate son and the sole

heir of Dominador. He in fact executed an affidavit adjudicating to himself
the controverted property. In ruling for the petitioner, the RTC held that the
questioned January 31, 1962 deed of sale validly transferred title to
Dominador and that petitioner is his acknowledged illegitimate son who
inherited ownership of the questioned lot. The Court notes, however, that
the RTC lost sight of the fact that the theory of succession invoked by
petitioner would end up proving that he is not the sole owner of Lot 7226.
This is so because Dominador was survived not only by petitioner but also by
his legal wife, Graciana, who died 10 years after the demise of Dominador
on May 28, 1987.24 By intestate succession, Graciana and petitioner became
co-owners of Lot 7226.25 The death of Graciana on May 6, 1997, did not
make petitioner the absolute owner of Lot 7226 because the share of
Graciana passed to her relatives by consanguinity and not to petitioner with
whom she had no blood relations. The Court of Appeals thus correctly held
that petitioner has no authority to institute the instant action as the sole
owner of Lot 7226.

Petitioner contends that even granting that he has co-owners over Lot 7226,
he can on his own file the instant case pursuant to Article 487 of the Civil
Code which provides:

ART. 487. Any one of the co-owners may bring an action in ejectment.

This article covers all kinds of actions for the recovery of possession. Article
487 includes forcible entry and unlawful detainer (accion interdictal),
recovery of possession (accion publiciana), and recovery of ownership
(accion de reivindicacion).26 A co-owner may bring such an action without
the necessity of joining all the other co-owners as co-plaintiffs because the
suit is presumed to have been filed to benefit his co-owners. It should be
stressed, however, that where the suit is for the benefit of the plaintiff alone
who claims to be the sole owner and entitled to the possession of the
litigated property, the action should be dismissed.27
The renowned civilist, Professor Arturo M. Tolentino, explained'

A co-owner may bring such an action, without the necessity of joining all the
other co-owners as co-plaintiffs, because the suit is deemed to be instituted
for the benefit of all. If the action is for the benefit of the plaintiff
alone, such that he claims possession for himself and not for the co-
ownership, the action will not prosper. (Emphasis added)28

In Baloloy v. Hular,29 respondent filed a complaint for quieting of title

claiming exclusive ownership of the property, but the evidence showed that
respondent has co-owners over the property. In dismissing the complaint for
want of respondent's authority to file the case, the Court held that -

Under Article 487 of the New Civil Code, any of the co-owners may bring an
action in ejectment. This article covers all kinds of actions for the recovery of
possession, including an accion publiciana and a reinvidicatory action. A co-
owner may bring such an action without the necessity of joining all the other
co-owners as co-plaintiffs because the suit is deemed to be instituted for the
benefit of all. Any judgment of the court in favor of the co-owner will benefit
the others but if such judgment is adverse, the same cannot prejudice the
rights of the unimpleaded co-owners. If the action is for the benefit of the
plaintiff alone who claims to be the sole owner and entitled to the possession
thereof, the action will not prosper unless he impleads the other co-owners
who are indispensable parties.

In this case, the respondent alone filed the complaint, claiming sole
ownership over the subject property and praying that he be declared the
sole owner thereof. There is no proof that the other co-owners had waived
their rights over the subject property or conveyed the same to the
respondent or such co-owners were aware of the case in the trial court. The
trial court rendered judgment declaring the respondent as the sole owner of
the property and entitled to its possession, to the prejudice of the latter's
siblings. Patently then, the decision of the trial court is erroneous.

Under Section 7, Rule 3 of the Rules of Court, the respondent was mandated
to implead his siblings, being co-owners of the property, as parties. The
respondent failed to comply with the rule. It must, likewise, be stressed that
the Republic of the Philippines is also an indispensable party as defendant
because the respondent sought the nullification of OCT No. P-16540 which
was issued based on Free Patent No. 384019. Unless the State is impleaded
as party-defendant, any decision of the Court would not be binding on it. It
has been held that the absence of an indispensable party in a case renders
ineffective all the proceedings subsequent to the filing of the complaint
including the judgment. The absence of the respondent's siblings, as parties,
rendered all proceedings subsequent to the filing thereof, including the
judgment of the court, ineffective for want of authority to act, not only as to
the absent parties but even as to those present.30

In the instant case, it is not disputed that petitioner brought the suit for
unlawful detainer in his name alone and for his own benefit to the exclusion
of the heirs of Graciana as he even executed an affidavit of self -
adjudication over the disputed property. It is clear therefore that petitioner
cannot validly maintain the instant action considering that he does not
recognize the co-ownership that necessarily flows from his theory of
succession to the property of his father, Dominador.

In the same vein, there is no merit in petitioner's claim that he has the legal
personality to file the present unlawful detainer suit because the ejectment
of respondents would benefit not only him but also his alleged co-owners.
However, petitioner forgets that he filed the instant case to acquire
possession of the property and to recover damages. If granted, he alone will
gain possession of the lot and benefit from the proceeds of the award of
damages to the exclusion of the heirs of Graciana. Hence, petitioner cannot
successfully capitalize on the alleged benefit to his co-owners. Incidentally, it
should be pointed out that in default of the said heirs of Graciana, whom
petitioner labeled as "fictitious heirs," the State will inherit her share 31 and
will thus be petitioner's co-owner entitled to possession and enjoyment of
the property.

The present controversy should be differentiated from the cases where the
Court upheld the right of a co-owner to file a suit pursuant to Article 487 of
the Civil Code. In Resuena v. Court of Appeals,32 and Sering v. Plazo,33 the
co-owners who filed the ejectment case did not represent themselves as the
exclusive owner of the property. In Celino v. Heirs of Alejo and Teresa
Santiago,34 the complaint for quieting of title was brought in behalf of the co-
owners precisely to recover lots owned in common. 35 Similarly in Vencilao v.
Camarenta,36 the amended complaint specified that the plaintiff is one of the
heirs who co-owns the controverted properties.

In the foregoing cases, the plaintiff never disputed the existence of a co-
ownership nor claimed to be the sole or exclusive owner of the litigated lot.
A favorable decision therein would of course inure to the benefit not only of
the plaintiff but to his co-owners as well. The instant case, however,
presents an entirely different backdrop as petitioner vigorously asserted
absolute and sole ownership of the questioned lot. In his complaint,
petitioner made the following allegations, to wit:
3. The plaintiff was the only son (illegitimate) and sole heir of the late
DOMINADOR ADLAWAN who died intestate on 28 May 1987 without any
other descendant nor ascendant x x x.

xxxx

5. Being the only child/descendant and, therefore, sole heir of the deceased
Dominador Adlawan, the plaintiff became the absolute owner, and
automatically took POSSESSION, of the aforementioned house and lot x x x.
(Emphasis added)37

Clearly, the said cases find no application here because petitioner's action
operates as a complete repudiation of the existence of co-ownership and not
in representation or recognition thereof. Dismissal of the complaint is
therefore proper. As noted by Former Supreme Court Associate Justice
Edgrado L. Paras "[i]t is understood, of course, that the action [under Article
487 of the Civil Code] is being instituted for all. Hence, if the co-owner
expressly states that he is bringing the case only for himself, the action
should not be allowed to prosper."38

Indeed, respondents' not less than four decade actual physical possession of
the questioned ancestral house and lot deserves to be respected especially
so that petitioner failed to show that he has the requisite personality and
authority as co-owner to file the instant case. Justice dictates that
respondents who are now in the twilight years of their life be granted
possession of their ancestral property where their parents and siblings lived
during their lifetime, and where they, will probably spend the remaining days
of their life.

WHEREFORE, the petition is DENIED. The September 23, 2003 Decision of

the Court of Appeals in CA-G.R. SP No. 74921 which reinstated the February
12, 2002 Judgment of the Municipal Trial Court of Minglanilla, Metro Cebu,
dismissing petitioner's complaint in Civil Case No. 392, and its January 8,
2004 Resolution, are AFFIRMED.

SO ORDERED.

G.R. No. 171571               March 24, 2008

REPUBLIC OF THE PHILIPPINES, Represented by MACTAN-CEBU INTERNATIONAL

AIRPORT AUTHORITY (MCIAA), Petitioner,
vs.
HEIRS OF FRANCISCA DIGNOS-SORONO, namely: TEODORO SORONO, LUCIO SORONO,
JR., ARSENIO T. SORONO, RODULFO S. OLIVAR, ALFONSA T. SORONO, CONSTANCIO S.
LUMONGSOD, EULALIA S. LIMPANGOG, and FLORENCIA S. BAGUIO; HEIRS OF JUAN L.
AMISTOSO,1 namely: MARIO L. AMISTOSO, LYN-LYN AMISTOSO, ALLAN L. AMISTOSO,
RAQUEL S. AMISTOSO, EUFRONIO S. AMISTOSO, JR., and ROGELIO S. AMISTOSO; HEIRS
OF BRIGILDA D. AMISTOSO, namely: VICTOR A. YAGONG, HEDELIZA A. YAGONG, and
CIRIACA A. YAGONG; HEIRS OF PASTOR DIGNOS; HEIRS OF ISABEL DIGNOS, namely: DR.
NAPOLEON A. AMORES, VICENTE A. BASMAYOR, DOMINGO A. BASMAYOR, and LYDIA A.
BASMAYOR; HEIRS OF DONATA DIGNOS, namely: TRINIDAD D. FUENTES, NICASIA D.
FUENTES, and IRINEO D. FUENTES; HEIRS OF SEGUNDA DIGNOS, namely: HONORATA D.
CORTES and BENIGNO D. CORTES; HEIRS OF GREGORIA DIGNOS, namely: RITA D.
FUENTES and JOSE D. FUENTES; HEIRS OF DOMINGO FUENTES, namely: CIRILA P.
DIGNOS and BASILIO P. DIGNOS; and HEIR OF ISABELO DIGNOS, namely: TERESITA R.
DIGNOS,2 Respondents.

DECISION

CARPIO MORALES, J.:

Assailed via petition for review on certiorari is the April 23, 2005 decision of the Court of Appeals 3
affirming that of the Regional Trial Court (RTC) of Lapu-lapu City, Branch 54. 4

Lot Nos. 2296 and 2316 of the Cadastral Survey of Opon, Lapu-lapu City were adjudicated on
December 7, 1929 by the then Court of First Instance of Cebu in favor of the following in four equal
shares:

a) Francisca Dignos, married to Blas Sorono – ¼ share in the two lots;

b) Tito Dignos, married to Candida Torrebillas – ¼ share in the two lots;
c) Isabel Dignos, married to Fabiano Amores;
Donata Dignos, married to Estanislao Fuentes;
Segunda Dignos, married to Demetrio Cortes;
Gregoria Dignos, married to Severo Fuentes;
Domingo Dignos, married to Venturada Potot; and
Isabelo Dignos, married to Petronilla Gamallo – ¼ share in the two lots; and
d) Silveria Amistuoso, married to Melecio Tumulak;
Mario Amistuoso, married to Rufina Tampus;
Juan Amistuoso, married to Narcisa Cosef;
Brigilda Amistuoso, married to Casimiro Yagong; and
Pastor Amistuoso, widower – ¼ share in the two lots.5

It appears that the two lots were not partitioned by the adjudicatees.

It appears further that the heirs of Tito Dignos, who, as reflected above, was awarded ¼ share in the
two lots, sold for ₱2,565.59 the entire two lots to the then Civil Aeronautics Administration (CAA) via
a public instrument entitled "Extrajudicial Settlement and Sale" executed on October 11, 1957,
without the knowledge of respondents whose predecessors-in-interest were the adjudicatees of the
rest of the ¾ portion of the two lots.6
In 1996, CAA’s successor-in-interest, the Mactan Cebu International Airport Authority (MCIAA),
erected a security fence traversing Lot No. 2316 and relocated a number of families, who had built
their dwellings within the airport perimeter, to a portion of said lot to enhance airport security in line
with the standards set by the International Civil Aviation Organization and the Federal Aviation
Authority.

MCIAA later caused the issuance in its name of Tax Declaration No. 00548 covering Lot No. 2296
and Tax Declaration No. 00568 covering Lot No. 2316.

Respondents soon asked the agents of MCIAA to cease giving third persons permission to occupy
the lots but the same was ignored. 1avvphi1

Respondents thereupon filed on January 8, 1996 a Complaint for Quieting of Title, Legal
Redemption with Prayer for a Writ of Preliminary Injunction against MCIAA before the RTC of Lapu-
lapu City,7 alleging that the existence of the tax declarations "would cast a cloud on their valid and
existing titles" to the lots. They alleged that "corresponding original certificates of title in favor of the
decreed owners were . . . issued but the same could no longer be found and located, and in all
probability, were lost during the Second World War." 8 (This claim was not specifically denied by
petitioner in its Answer with Counterclaim.) 9

Respondents further alleged that neither they nor their predecessors-in-interests sold, alienated or
disposed of their shares in the lots of which they have been in continuous peaceful possession.

Respondents furthermore alleged that neither petitioner nor its predecessor-in-interest had given
them any written notice of its acquisition of the ¼ share of Tito Dignos.

Respondents thus prayed as follows:

1) Upon the filing of this complaint, that a restraining order be issued enjoining the defendant
and any of its officers, agents, employees, and any third person acting on their behest, to
desist from occupying their portions of Lots 2296 and 2316, Opon Cadastre, and upon due
notice and hearing, to issue the corresponding writ of preliminary injunction for the same
purpose;

2) To declare the tax declarations of the defendant or any of its predecessors-in-interests

covering Lots 2296 and 2316, Opon Cadastre, to be null and void:

3) To grant unto the plaintiffs the right of preemption in the sale of the one-fourth share of
Tito Dignos in the above-mentioned parcels of land under the provisions of Articles 1620 and
1623 of the Civil Code;

4) To order the defendant to reimburse plaintiffs the sum of ₱10,000.00 acceptance fee, the
sums of ₱1,000.00 per appearance fee, the sum of ₱10,000.00 for costs of litigation;

5) To order the defendant to pay the plaintiffs the sum of P100,000.00 for moral damages.

Plaintiffs further pray for such orders as may be just and equitable under the premises. 10
(Underscoring supplied)

Republic of the Philippines, represented by the MCIAA (hereafter petitioner), in its Answer with
Counterclaim,11 maintained that from the time the lots were sold to its predecessor-in-interest CAA, it
has been in open, continuous, exclusive, and notorious possession thereof; through acquisitive
prescription, it had acquired valid title to the lots since it was a purchaser in good faith and for value;
and assuming arguendo that it did not have just title, it had, by possession for over 30 years,
acquired ownership thereof by extraordinary prescription.

At all events, petitioner contended that respondents’ action was barred by estoppel and laches.

The trial court found for respondents. It held that respondents and their predecessors-in-interest
were in peaceful and continuous possession of their shares in the lots, and were disturbed of such
possession only in 1996 when petitioner put up the security fence that traversed Lot No. 2316 and
relocated families that had built their houses within the airport perimeter to a portion of said lot.

On petitioner’s claim that it had acquired ownership by extraordinary prescription, the trial court
brushed it aside on the ground that registered lands cannot be the subject of acquisitive prescription.

Neither, held the trial court, had respondents’ action prescribed, as actions for quieting of title cannot
prescribe if the plaintiffs are in possession of the property in question, as in the case of herein
respondents.

On petitioner’s defense of laches, the trial court also brushed the same aside in light of its finding
that respondents, who have long been in possession of the lots, came to know of the sale only in
1996. The trial court added that respondents could not be charged with constructive notice of the
1957 Extrajudicial Settlement and Sale of the lots to CAA as it was erroneously registered under Act
No. 3344,12 the law governing recording of instruments or deeds relating to real estate which are not
registered under the Torrens system. The subject lots being registered, the trial court found, the
registration of the deed should have been made under Act No. 496, 13 the applicable law in 1957. In
fine, the trial court held that the registration of the deed under Act No. 3344 did not operate as
constructive notice to the whole world.14

Concluding, the trial court held that the questioned sale was valid only with respect to Tito Dignos’ ¼
share of the lots, and that the sale thereof was subject to the right of legal redemption by
respondents following Article 1088 of the Civil Code, reading:

Should any of the heirs sell his hereditary rights to a stranger before partition, any or all of the co-
heirs may be subrogated to the rights of the purchaser by reimbursing him for the price of the sale,
provided they do so within the period of one month from the time they were notified in writing of the
sale by the vendor.

In light of its finding that the heirs of Tito Dignos did not give notice of the sale to respondents, the
trial court held that the period for legal redemption had not yet lapsed; and the redemption price
should be ¼ of the purchase price paid by the CAA for the two lots.

The trial court thus disposed:

WHEREFORE, all premises considered, the Court rules in favor of plaintiffs and hence renders
judgment:

a) Declaring Tax Declarations Nos. 00915 and 00935, as well as all other tax declarations
covering Lot 2296 and Lot 2316 under the names of the Civil Aeronautics Administration, the
Bureau of Air Transportation and the defendant Mactan Cebu International Airport Authority,
as null and void and directing the City Assessor of Lapu-Lapu City to cancel them;
 b) Declaring the Extrajudicial Settlement and Sale affecting Lot 2296 and Lot 2316 (Exhibit
"H" for plaintiffs) as void and ineffective as regards the three-fourth[s] (3/4) shares of
plaintiffs in both lots and declaring the herein plaintiffs as owners of such three fourth[s]
shares and;

c) Ordering the defendant to resell to plaintiffs for a total price of Six Hundred forty Pesos
(P640.00) the one-fourth (1/4) shares in Lot 2296 and Lot 2316 it had purchased from the
heirs of the late Tito Dignos in 1957;

No pronouncement as to costs.

SO ORDERED. 15

As priorly stated, the Court of Appeals affirmed the trial court’s decision.

Hence, the present petition for review on certiorari which proffers the following

GROUNDS FOR ALLOWANCE OF THE PETITION

THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE TRIAL COURT’S DECISION
WHEN RESPONDENTS NO LONGER HAVE ANY RIGHT TO RECOVER LOTS 2296 AND 2316
DUE TO THE PRIOR SALE THEREOF TO THE REPUBLIC AND UPON THE EQUITABLE
GROUNDS OF ESTOPPEL AND LACHES.16

The petition fails.

Article 493 of the Civil Code provides:

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 of 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.

Apropos is the following pertinent portion of this Court’s decision in Bailon-Casilao v. CA:

As early as 1923, this Court has ruled that even if a co-owner sells the whole property as his, the
sale will affect only his own share but not those of the other co-owners who did not consent to the
sale [Punsalan v. Boon Liat, 44 Phil. 320 (1923)]. This is because under the aforementioned codal
provision, the sale or other disposition affects only his undivided share and the transferee gets only
what would correspond to his grantor in the partition of the thing owned in common. [Ramirez v.
Bautista, 14 Phil. 528 (1909)]. Consequently, by virtue of the sales made by Rosalia and Gaudencio
Bailon which are valid with respect to their proportionate shares, and the subsequent transfers which
culminated in the sale to private respondent Celestino Afable, the said Afable thereby became a co-
owner of the disputed parcel of land as correctly held by the lower court since the sales produced
the effect of substituting the buyers in the enjoyment thereof [Mainit v. Bandoy, 14 Phil. 730 (1910)].

From the foregoing, it may be deduced that since a co-owner is entitled to sell his undivided share, a
sale of the entire property by one co-owner without the consent of the other co-owners is not null
and void. However, only the rights of the co-owner-seller are transferred, thereby making the buyer a
co-owner of the property.17 (Emphasis and underscoring supplied)
Petitioner’s predecessor-in-interest CAA thus acquired only the rights pertaining to the sellers-heirs
of Tito Dignos, which is only ¼ undivided share of the two lots.

Petitioner’s insistence that it acquired the property through acquisitive prescription, if not ordinary,
then extraordinary, does not lie. The trial court’s discrediting thereof is well taken. It bears emphasis
at this juncture that in the Extrajudicial Settlement and Sale forged by CAA and Tito Dignos’ heirs in
1957, the following material portions thereof validate the claim of respondents that the two lots were
registered:

xxxx

4. That since the Original Transfer Certificate of Title of the above-mentioned property/ies has/have
been lost and/or destroyed, or since the said lot/s is/are covered by Cadastral Case No. 19, and a
decree issued on March 19, 1930, bearing Decree No./s 474824 & 474825, and the VENDEE
hereby binds itself to reconstitute said title/s at its own expense and that the HEIRS-VENDORS,
their heirs, successors and assigns bind themselves to help in the reconstitution of title so that the
said lot/s may be registered in the name of the VENDEE in accordance with law[.] 18

xxxx

The trial court’s discrediting of petitioner’s invocation of laches and prescription of action is well-
taken too.

As for petitioner’s argument that the redemption price should be ¼ of the prevailing market value,
not of the actual purchase price, since, so it claims, "(1) they received just compensation for the
property at the time it was purchased by the Government; and, (2) the property, due to
improvements introduced by petitioner in its vicinity, is now worth several hundreds of millions of
pesos,"19 the law is not on its side. Thus, Article 1088 of the Civil Code provides:

Should any of the heirs sell his hereditary rights to a stranger before the partition, any or all of the
co-heirs may be subrogated to the rights of the purchaser by reimbursing him for the price of the
sale, provided they do so within the period of one month from the time they were notified in writing of
the sale by the vendor. (Emphasis and underscoring supplied)

The Court may take judicial notice of the increase in value of the lots. As mentioned earlier,
however, the heirs of Tito Dignos did not notify respondents about the sale. At any rate, since the
Extrajudicial Settlement and Sale stipulates, thus:

That the HEIRS-VENDORS, their heirs, assigns and successors, undertake and agree to warrant
and defend the possession and ownership of the property/ies herein sold against any and all just
claims of all persons whomsoever and should the VENDEE be disturbed in its possession, to
prosecute and defend the same in the Courts of Justice20 (Emphasis and underscoring supplied),

petitioner is not without any remedy. This decision is, therefore, without prejudice to petitioner’s right
to seek redress against the vendors-heirs of Tito Dignos and their successors-in-interest.

WHEREFORE, the petition is, in light of the foregoing disquisition, DENIED.

SO ORDERED.
 [G.R. No. 168970 : January 15, 2010]

CELESTINO BALUS, PETITIONER, VS. SATURNINO BALUS AND LEONARDA BALUS VDA. DE
CALUNOD, RESPONDENTS.

DECISION

PERALTA, J.:

Assailed in the present petition for review on certiorari under Rule 45 of the Rules of Court is the Decision [1]
of the Court of Appeals (CA) dated May 31, 2005 in CA-G.R. CV No. 58041 which set aside the February 7,
1997 Decision of the Regional Trial Court (RTC) of Lanao del Norte, Branch 4 in Civil Case No. 3263.

The facts of the case are as follows:

Herein petitioner and respondents are the children of the spouses Rufo and Sebastiana Balus. Sebastiana
died on September 6, 1978, while Rufo died on July 6, 1984.

On January 3, 1979, Rufo mortgaged a parcel of land, which he owns, as security for a loan he obtained
from the Rural Bank of Maigo, Lanao del Norte (Bank). The said property was originally covered by Original
Certificate of Title No. P-439(788) and more particularly described as follows:

A parcel of land with all the improvements thereon, containing an area of 3.0740 hectares, more or less,
situated in the Barrio of Lagundang, Bunawan, Iligan City, and bounded as follows: Bounded on the NE.,
along line 1-2, by Lot 5122, Csd-292; along line 2-12, by Dodiongan River; along line 12-13 by Lot 4649,
Csd-292; and along line 12-1, by Lot 4661, Csd-292. x x x [2]

Rufo failed to pay his loan. As a result, the mortgaged property was foreclosed and was subsequently sold to
the Bank as the sole bidder at a public auction held for that purpose. On November 20, 1981, a Certificate of
Sale[3] was executed by the sheriff in favor of the Bank. The property was not redeemed within the period
allowed by law. More than two years after the auction, or on January 25, 1984, the sheriff executed a
Definite Deed of Sale[4] in the Bank's favor. Thereafter, a new title was issued in the name of the Bank.

On October 10, 1989, herein petitioner and respondents executed an Extrajudicial Settlement of Estate [5]
adjudicating to each of them a specific one-third portion of the subject property consisting of 10,246 square
meters. The Extrajudicial Settlement also contained provisions wherein the parties admitted knowledge of
the fact that their father mortgaged the subject property to the Bank and that they intended to redeem the
same at the soonest possible time.

Three years after the execution of the Extrajudicial Settlement, herein respondents bought the subject
property from the Bank. On October 12, 1992, a Deed of Sale of Registered Land [6] was executed by the
Bank in favor of respondents. Subsequently, Transfer Certificate of Title (TCT) No. T-39,484(a.f.) [7] was
issued in the name of respondents. Meanwhile, petitioner continued possession of the subject lot.

On June 27, 1995, respondents filed a Complaint [8] for Recovery of Possession and Damages against
petitioner, contending that they had already informed petitioner of the fact that they were the new owners
of the disputed property, but the petitioner still refused to surrender possession of the same to them.
Respondents claimed that they had exhausted all remedies for the amicable settlement of the case, but to
no avail.

On February 7, 1997, the RTC rendered a Decision [9] disposing as follows:

WHEREFORE, judgment is hereby rendered, ordering the plaintiffs to execute a Deed of Sale in favor of the
defendant, the one-third share of the property in question, presently possessed by him, and described in the
deed of partition, as follows:

A one-third portion of Transfer Certificate of Title No. T-39,484 (a.f.), formerly Original Certificate of Title
No. P-788, now in the name of Saturnino Balus and Leonarda B. Vda. de Calunod, situated at Lagundang,
Bunawan, Iligan City, bounded on the North by Lot 5122; East by shares of Saturnino Balus and Leonarda
Balus-Calunod; South by Lot 4649, Dodiongan River; West by Lot 4661, consisting of 10,246 square meters,
including improvements thereon.

and dismissing all other claims of the parties.

The amount of P6,733.33 consigned by the defendant with the Clerk of Court is hereby ordered delivered to
the plaintiffs, as purchase price of the one-third portion of the land in question.

Plaintiffs are ordered to pay the costs.

SO ORDERED.[10]

The RTC held that the right of petitioner to purchase from the respondents his share in the disputed
property was recognized by the provisions of the Extrajudicial Settlement of Estate, which the parties had
executed before the respondents bought the subject lot from the Bank.

Aggrieved by the Decision of the RTC, herein respondents filed an appeal with the CA.

On May 31, 2005, the CA promulgated the presently assailed Decision, reversing and setting aside the
Decision of the RTC and ordering petitioner to immediately surrender possession of the subject property to
the respondents. The CA ruled that when petitioner and respondents did not redeem the subject property
within the redemption period and allowed the consolidation of ownership and the issuance of a new title in
the name of the Bank, their co-ownership was extinguished.

Hence, the instant petition raising a sole issue, to wit:

WHETHER OR NOT CO-OWNERSHIP AMONG THE PETITIONER AND THE RESPONDENTS OVER THE PROPERTY
PERSISTED/CONTINUED TO EXIST (EVEN AFTER THE TRANSFER OF TITLE TO THE BANK) BY VIRTUE OF
THE PARTIES' AGREEMENT PRIOR TO THE REPURCHASE THEREOF BY THE RESPONDENTS; THUS,
WARRANTING THE PETITIONER'S ACT OF ENFORCING THE AGREEMENT BY REIMBURSING THE
RESPONDENTS OF HIS (PETITIONER'S) JUST SHARE OF THE REPURCHASE PRICE. [11]

The main issue raised by petitioner is whether co-ownership by him and respondents over the subject
property persisted even after the lot was purchased by the Bank and title thereto transferred to its name,
and even after it was eventually bought back by the respondents from the Bank.

Petitioner insists that despite respondents' full knowledge of the fact that the title over the disputed property
was already in the name of the Bank, they still proceeded to execute the subject Extrajudicial Settlement,
having in mind the intention of purchasing back the property together with petitioner and of continuing their
co-ownership thereof.

Petitioner posits that the subject Extrajudicial Settlement is, in and by itself, a contract between him and
respondents, because it contains a provision whereby the parties agreed to continue their co-ownership of
the subject property by "redeeming" or "repurchasing" the same from the Bank. This agreement, petitioner
contends, is the law between the parties and, as such, binds the respondents. As a result, petitioner asserts
that respondents' act of buying the disputed property from the Bank without notifying him inures to his
benefit as to give him the right to claim his rightful portion of the property, comprising 1/3 thereof, by
reimbursing respondents the equivalent 1/3 of the sum they paid to the Bank.

The Court is not persuaded.

Petitioner and respondents are arguing on the wrong premise that, at the time of the execution of the
Extrajudicial Settlement, the subject property formed part of the estate of their deceased father to which
they may lay claim as his heirs.

At the outset, it bears to emphasize that there is no dispute with respect to the fact that the subject
property was exclusively owned by petitioner and respondents' father, Rufo, at the time that it was
mortgaged in 1979. This was stipulated by the parties during the hearing conducted by the trial court on
October 28, 1996.[12] Evidence shows that a Definite Deed of Sale [13] was issued in favor of the Bank on
January 25, 1984, after the period of redemption expired. There is neither any dispute that a new title was
issued in the Bank's name before Rufo died on July 6, 1984. Hence, there is no question that the Bank
acquired exclusive ownership of the contested lot during the lifetime of Rufo.

The rights to a person's succession are transmitted from the moment of his death. [14] In addition, the
inheritance of a person consists of the property and transmissible rights and obligations existing at the time
of his death, as well as those which have accrued thereto since the opening of the succession. [15] In the
present case, since Rufo lost ownership of the subject property during his lifetime, it only follows that at the
time of his death, the disputed parcel of land no longer formed part of his estate to which his heirs may lay
claim. Stated differently, petitioner and respondents never inherited the subject lot from their father.

Petitioner and respondents, therefore, were wrong in assuming that they became co-owners of the subject
lot. Thus, any issue arising from the supposed right of petitioner as co-owner of the contested parcel of land
is negated by the fact that, in the eyes of the law, the disputed lot did not pass into the hands of petitioner
and respondents as compulsory heirs of Rufo at any given point in time.

The foregoing notwithstanding, the Court finds a necessity for a complete determination of the issues raised
in the instant case to look into petitioner's argument that the Extrajudicial Settlement is an independent
contract which gives him the right to enforce his right to claim a portion of the disputed lot bought by
respondents.

It is true that under Article 1315 of the Civil Code of the Philippines, contracts are perfected by mere
consent; and from that moment, the parties are bound not only to the fulfillment of what has been expressly
stipulated but also to all the consequences which, according to their nature, may be in keeping with good
faith, usage and law.

Article 1306 of the same Code also provides that the contracting parties may establish such stipulations,
clauses, terms and conditions as they may deem convenient, provided these are not contrary to law, morals,
good customs, public order or public policy.

In the present case, however, there is nothing in the subject Extrajudicial Settlement to indicate any
express stipulation for petitioner and respondents to continue with their supposed co-ownership of the
contested lot.

On the contrary, a plain reading of the provisions of the Extrajudicial Settlement would not, in any way,
support petitioner's contention that it was his and his sibling's intention to buy the subject property from the
Bank and continue what they believed to be co-ownership thereof. It is a cardinal rule in the interpretation
of contracts that the intention of the parties shall be accorded primordial consideration. [16] It is the duty of
the courts to place a practical and realistic construction upon it, giving due consideration to the context in
which it is negotiated and the purpose which it is intended to serve. [17] Such intention is determined from the
express terms of their agreement, as well as their contemporaneous and subsequent acts. [18] Absurd and
illogical interpretations should also be avoided. [19]

For petitioner to claim that the Extrajudicial Settlement is an agreement between him and his siblings to
continue what they thought was their ownership of the subject property, even after the same had been
bought by the Bank, is stretching the interpretation of the said Extrajudicial Settlement too far.

In the first place, as earlier discussed, there is no co-ownership to talk about and no property to partition, as
the disputed lot never formed part of the estate of their deceased father.

Moreover, petitioner's asseveration of his and respondents' intention of continuing with their supposed co-
ownership is negated by no less than his assertions in the present petition that on several occasions he had
the chance to purchase the subject property back, but he refused to do so. In fact, he claims that after the
Bank acquired the disputed lot, it offered to re-sell the same to him but he ignored such offer. How then can
petitioner now claim that it was also his intention to purchase the subject property from the Bank, when he
admitted that he refused the Bank's offer to re-sell the subject property to him?

In addition, it appears from the recitals in the Extrajudicial Settlement that, at the time of the execution
thereof, the parties were not yet aware that the subject property was already exclusively owned by the
Bank. Nonetheless, the lack of knowledge on the part of petitioner and respondents that the mortgage was
already foreclosed and title to the property was already transferred to the Bank does not give them the right
or the authority to unilaterally declare themselves as co-owners of the disputed property; otherwise, the
disposition of the case would be made to depend on the belief and conviction of the party-litigants and not
on the evidence adduced and the law and jurisprudence applicable thereto.
Furthermore, petitioner's contention that he and his siblings intended to continue their supposed co-
ownership of the subject property contradicts the provisions of the subject Extrajudicial Settlement where
they clearly manifested their intention of having the subject property divided or partitioned by assigning to
each of the petitioner and respondents a specific 1/3 portion of the same. Partition calls for the segregation
and conveyance of a determinate portion of the property owned in common. It seeks a severance of the
individual interests of each co-owner, vesting in each of them a sole estate in a specific property and giving
each one a right to enjoy his estate without supervision or interference from the other. [20] In other words,
the purpose of partition is to put an end to co-ownership, [21] an objective which negates petitioner's claims in
the present case.

WHEREFORE, the instant petition is DENIED. The assailed Decision of the Court of Appeals, dated May 31,
2005 in CA-G.R. CV No. 58041, is AFFIRMED.

SO ORDERED.

[G.R. NO. 141993 : March 17, 2006]

NARCISA AVILA, assisted by her husband Bernardo Avila, Spouses

JANUARIO N. ADLAWAN and NANETTE A. ADLAWAN, NATIVIDAD
MACAPAZ, assisted by her husband EMILIO MACAPAZ, FRANCISCA N.
ADLAWAN and LEON NEMEÑO, Petitioners, v. Spouses BENJAMIN
BARABAT and JOVITA BARABAT, Respondents.

DECISION

CORONA, J.:

This Petition for Review on Certiorari under Rule 45 of the Rules of Court
assails the July 30, 1999 decision 1 and January 19, 2000 resolution of the
Court of Appeals in CA-G.R. CV No. 50899.

The subject of this controversy is a portion of a 433-square meter parcel of

land located in Poblacion, Toledo City, Cebu. The entire property is
designated as cadastral lot no. 348 registered in the name of Anunciacion
Bahena vda. de Nemeño. Upon her death, ownership of the lot was
transferred by operation of law to her five children, petitioners Narcisa Avila,
Natividad Macapaz, Francisca Adlawan, Leon Nemeño and Jose Bahena.
These heirs built their respective houses on the lot.

In 1964, respondent Benjamin Barabat leased a portion of the house owned

by Avila. His co-respondent, Jovita Barabat, moved in with him in 1969
when they got married.

Avila subsequently relocated to Cagayan de Oro City. She came back to

Toledo City in July 1979 to sell her house and share in the lot to her siblings
but no one showed interest in it. She then offered it to respondents who
agreed to buy it. Their agreement was evidenced by a private document
dated July 17, 1979 which read:
ALANG SA KASAYURAN SA TANAN:

Nga ako, NARCISA AVILA, nagpuyo sa siyudad sa Cagayan de Oro, 52 años

ang panu-igon, minyo ug may mga anak magatimaan ning maong kasulatan
nga akong guibaligya sa kantidad nga walo ka libo ka pesos (P8,000.00) ang
bahin nga balay ug yuta nga sinunod ko sa akong mga ginikanan ngadto sa
magtiayon nga Benjamin ug Jovita Barabat, mga lumulupyo sa siyudad sa
Toledo.

Nga ang maong lote ug balay ana-a mahimutang sa Poblacion, Toledo City
kansang mga utlanan mao kining musunod:

Atubangan - - - - - - - - - - N. Rafols Street

Dapit sa Tuo - - - - - - - - - - yuta ug mga panimalay sa Magsuong Natividad

Macapaz, Francisca Adlawan, Jose Bahena ug Leoning Nemeno

Dapit sa wala - - - - - - - - - - kanal sa tubig

Dapit sa luyo - - - - - - - - - - lote nga kumon sa magsuong Nemeno

Tiniman-an:
(Sgd.)
Narcisa Avila2

Respondents stopped paying rentals to Avila and took possession of the

property as owners. They also assumed the payment of realty taxes on it.

Sometime in early 1982, respondents were confronted by petitioner Januario

Adlawan who informed them that they had until March 1982 only to stay in
Avila's place because he was buying the property. Respondents replied that
the property had already been sold to them by Avila. They showed Adlawan
the July 17, 1979 document executed by Avila.

On January 6, 1983, respondents received a letter from Atty. Joselito Alo

informing them that Avila had sold her house and share in lot no. 348 to his
clients, the spouses Januario and Nanette Adlawan. Considering the sale to
the spouses Adlawan as prejudicial to their title and peaceful possession of
the property, they demanded that Avila execute a public document
evidencing the sale of the property to them but Avila refused.

Respondents filed a complaint for quieting of title with the Regional Trial
Court (RTC) of Toledo City, Branch 29. 3 Docketed as Civil Case No. T-53, the
complaint was subsequently amended to include annulment of the deed of
sale to the spouses Adlawan, specific performance, partition and damages as
additional causes of action. Respondents anchored their claim over the
property to the July 17, 1979 private document which they presented as
Exhibit "A."

Avila denied having offered to sell her property to respondents. She claimed
that respondents gave her an P8,000 loan conditioned on her signing a
document constituting her house and share in lot no. 348 as security for its
payment. She alleged that she innocently affixed her signature on Exhibit
"A" which was prepared by respondents and which they now claim as a
private deed of sale transferring ownership to them.

The trial court rendered its May 9, 1995 decision in favor of respondents. It
declared Exhibit "A" as a valid and lawful deed of sale. It nullified the
subsequent deed of sale between Avila and the spouses Adlawan. Avila was
ordered to execute a formal and notarized deed of sale in favor of
respondents. It also held petitioners liable for moral damages and attorney's
fees.

Aggrieved, petitioners filed an appeal with the Court of Appeals. In its July
30, 1999 decision, the appellate court affirmed the decision of the RTC in
toto. Petitioners sought a reconsideration but it was denied. Hence, this
petition.

Petitioners claim that the appellate court erred in ruling that the transaction
between respondents and Avila was an absolute sale, not an equitable
mortgage. They assert that the facts of the case fell within the ambit of
Article 1602 in relation to Article 1604 of the Civil Code on equitable
mortgage because they religiously paid the realty tax on the property and
there was gross inadequacy of consideration. In this connection, Articles
1602 and 1604 provide:

Art. 1602. The contract shall be presumed to be an equitable mortgage, in

any of the following cases:

(1) When the price of a sale with right to repurchase is unusually

inadequate;

(2) When the vendor remains in possession as lessee or otherwise;

(3) When upon or after the expiration of the right to repurchase another
instrument extending the period of redemption or granting a new period is
executed;
(4) When the purchaser retains for himself a part of the purchase price;

(5) When the vendor binds himself to pay the taxes of the thing sold;

(6) In any other case where it may be fairly inferred that the real intention
of the parties is that the transaction shall secure the payment of a debt or
the performance of any other obligation.

In any of the foregoing cases, any money, fruits, or other benefit to be

received by the vendee as rent or otherwise shall be considered as interest
which shall be subject to the usury laws.

xxx

Art. 1604. The provisions of Article 1602 shall also apply to a contract
purporting to be an absolute sale.

They also claim that the court erred in denying them the right to redeem the
property and in ruling that there was implied partition by the acts of the
parties.

We rule in favor of respondents.

For Articles 1602 and 1604 to apply, two requisites must concur: (1) the
parties entered into a contract denominated as a contract of sale and (2)
their intention was to secure an existing debt by way of mortgage. 4 Here,
both the trial and appellate courts found that Exhibit "A" evidenced a
contract of sale. They also agreed that the circumstances of the case show
that Avila intended her agreement with respondents to be a sale. Both
courts were unanimous in finding that the subsequent acts of Avila revealed
her intention to absolutely convey the disputed property. It was only after
the perfection of the contract, when her siblings began protesting the sale,
that she wanted to change the agreement.

Furthermore, contrary to petitioners' claim, the trial court found that it was
respondents who took over the payment of real property taxes after the
execution of Exhibit "A." There is no reason to depart from these factual
findings because, as a rule, factual findings of the trial court, when adopted
and confirmed by the Court of Appeals, are binding and conclusive on the
Court and generally will not be reviewed on appeal to us. 5 There is no reason
for us to deviate from this rule.

Petitioners' claim of gross inadequacy of selling price has no basis. They

failed to introduce evidence of the correct price at the time the land was sold
to respondents in 1979. How can we therefore conclude that the price was
grossly inadequate? In the absence of evidence as to the fair market value
of a parcel of land at the time of its sale, we cannot reasonably conclude
that the price at which it was sold was inadequate. 6

Petitioners' rely on Article 1623 in relation to Article 1620 of the Civil Code to
justify their right of redemption. This is incorrect.

These provisions state:

Art. 1620. A co-owner of a thing may exercise the right of redemption in

case the shares of all the other co-owners or any of them, are sold to a third
person. If the price of the alienation is grossly excessive, the redemptioner
shall pay only a reasonable one.

Should two or more co-owners desire to exercise the right of redemption,

they may only do so in proportion to the share they may respectively have
in the thing owned in common.

xxx

Art. 1623. The right of legal pre-emption or redemption shall not be

exercised except within thirty days from the notice in writing by the
prospective vendor, or by the vendor, as the case may be. The deed of sale
shall not be recorded in the Registry of Property, unless accompanied by an
affidavit of the vendor that he has given written notice thereof to all possible
redemptioners.

The right of redemption of co-owners excludes that of adjoining owners.

Petitioners' right to redeem would have existed only had there been co-
ownership among petitioners-siblings. But there was none. For this right to
be exercised, co-ownership must exist at the time the conveyance is made
by a co-owner and the redemption is demanded by the other co-owner or
co-owner(s).7 However, by their own admission, petitioners were no longer
co-owners when the property was sold to respondents in 1979. The co-
ownership had already been extinguished by partition.

The regime of co-ownership exists when the ownership of an undivided thing

or right belongs to different persons. 8 By the nature of co-ownership, a co-
owner cannot point to any specific portion of the property owned in common
as his own because his share in it remains intangible and ideal. 9
Every act intended to put an end to indivision among co-heirs is deemed to
be a partition.10 Here, the particular portions pertaining to petitioners had
been ascertained and they in fact already took possession of their respective
parts. The following statement of petitioners in their amended answer 11 as
one of their special and affirmative defenses was revealing:

F-8. That all defendants [i.e., petitioners] in this case who are co-owners of
lot 348 have their own respective buildings constructed on the said lot in
which case it can be safely assumed that that their respective shares in
the lot have been physically segregated although there is no formal
partition of the land among themselves.12 (emphasis supplied)

Being an express judicial admission, it was conclusive on petitioners unless it

was made through palpable mistake or that no such admission was in fact
made.13 Petitioners proved neither and were therefore bound by it.

The purpose of partition is to separate, divide and assign a thing held in

common among those to whom it belongs. 14 By their own admission,
petitioners already segregated and took possession of their respective
shares in the lot. Their respective shares were therefore physically
determined, clearly identifiable and no longer ideal. Thus, the co-ownership
had been legally dissolved. With that, petitioners' right to redeem any part
of the property from any of their former co-owners was already
extinguished. As legal redemption is intended to minimize co-ownership, 15
once a property is subdivided and distributed among the co-owners, the
community ceases to exist and there is no more reason to sustain any right
of legal redemption.16

Under the law, subject to certain conditions, owners of adjoining urban land
have the pre-emptive right to a lot before it is sold to third parties, or the
redemptive right if it has already been sold. In particular, Article 1622 of the
Civil Code provides:

Art. 1622. Whenever a piece of urban land is so small and so situated in that
a major portion thereof cannot be used for any practical purpose within a
reasonable time, having been bought merely for speculation, is about to be
re-sold, the owner of any adjoining land has a right of pre-emption at a
reasonable price.

If the re-sale has been perfected, the owner of the adjoining land shall have
a right of redemption, also at a reasonable price.
When two or more owners of adjoining lands wish to exercise the rights of
pre-emption or redemption, the owner whose intended use of the land in
question appears best justified shall be preferred.

However, this provision does not apply here. Aside from the fact that
petitioners never raised it as an issue, the conditions provided for its
application were not met. While the property may be considered as urban
land, it was not shown or even alleged that its area and location would
render a major portion of no practical use within a reasonable time. Neither
was there any allegation to the effect that the disputed property was bought
merely for speculation.

WHEREFORE, the petition is hereby DENIED. The July 30, 1999 decision
and January 19, 2000 resolution of the Court of Appeals in CA-G.R. CV No.
50899 are AFFIRMED.

Costs against petitioners.

SO ORDERED.

brary chanroble