Art.

484

SECOND DIVISION [G.R. No. 122047. October 12, 2000] SPOUSES SERAFIN SI AND ANITA BONODE SI, petitioners, vs. COURT OF APPEALS, SPOUSES JOSE ARMADA and REMEDIOS ALMANZOR (deceased, and substituted by heirs: Cynthia Armada, Danilo Armada and Vicente Armada) respondents. DECISION QUISUMBING, J.: This petition for certiorari under Rule 45 assails the Decision[1] dated March 25, 1994, of the Court of Appeals and its Resolutions[2] dated March 24, 1995 and September 6, 1995 in CA-G.R. CV No. 30727. The Court of Appeals reversed the decision of the Regional Trial Court of Pasig City, Branch 113, and nullified the sale of the subject lot by the spouses Crisostomo and Cresenciana Armada to spouses Serafin and Anita Si. The dispositive portion of the respondent court's decision reads: "WHEREFORE, in view of the foregoing, the decision appealed from is hereby REVERSED, and a new one is rendered: 1) Annulling and declaring as invalid the registration of the Deed of Absolute Sale dated March 27, 1979 executed by Cresenciana V. Alejo in favor of Anita Bonode Si. Ordering the Register of Deeds of Pasay City to annul and cancel Transfer Certificate of Title No. 24751, issued in the name of Anita Bonode Si, married to Serafin D. Si., Jose R. Armada, married to Remedios Almanzor and Dr. Severo R. Armada Jr., single. Ordering the Register of Deeds of Pasay City to reconstitute and revive Transfer Certificate of Title No. 16007 in the names of Jose, Crisostomo and Severo, Jr. That plaintiffs be allowed to repurchase or redeem the share corresponding to the share of Crisostomo Armada within thirty (30) days from notice in writing by Crisostomo Armada. The defendants-appellees are jointly and severally ordered to pay the plaintiffs-appellants the sum of P10,000.00 as moral damages. The defendants-appellees are jointly and severally ordered to pay the plaintiff-appellants the sum of P10,000.00 as attorney's fees and litigation expenses and costs of suit.

married to Cresenciana V. Alejo, 113.34 Square Meters; JOSE R. ARMADA, married to Remedios Almanzor, 113.33 Square Meters; and DR. SEVERO R. ARMADA, Jr., single, all of legal age, Filipinos."[4] Annotated also in the title is the total cancellation of said title "... by virtue of the Deed of Sale, (P.E. 77952/T-24751), dated March 28, 1979, executed by CRESENCIANA V. ALEJO, as attorney-in-fact of CRISOSTOMO R. ARMADA, conveying 113.34 square meters of the property herein, in favor of ANITA BONODE SI, married to Serafin D. Si, for the sum of P75,000.00, issuing in lieu thereof Transfer Certificate of Title No. 24751, Reg. Book T-102. (Doc. No. 17, Page No. 5, Book No. 253 of Notary Public of Pasay City, Manila, Julian Florentino)."[5] On April 15, 1980, herein spouses Jose Armada and Remedios Almanzor, filed a complaint for Annulment of Deed of Sale and Reconveyance of Title with Damages, against herein petitioners Anita and Serafin Si and Conrado Isada, brother-in-law of Cresenciana. Isada brokered the sale. The complaint alleged that Conrado Isada sold Crisostomo's share by making it appear that Cresenciana, the attorney-in-fact of her husband, is a Filipino citizen, residing with Isada at No. 13-4th Camarilla Street, Murphy, Cubao, Quezon City. By this time, Crisostomo and Cresenciana had migrated and were already citizens of the United States of America. It also stated that when petitioners registered the deed of absolute sale they inserted the phrase "... and that the co-owners are not interested in buying the same in spite of notice to them.", and that petitioners knew of the misrepresentations of Conrado. Further, the complaint alleged that the other owners, Jose and Severo, Jr., had no written notice of the sale; and that all upon learning of the sale to the spouses Si, private respondents filed a complaint for annulment of sale and reconveyance of title with damages, claiming they had a right of redemption. Petitioners, on the other hand, alleged that on October 2, 1954, Escolastica, with the consent of her husband executed three separate deeds of sale (Exhibits 1, 2, and 3)[6] conveying 113.34 square meters of the property to Severo, and 113.33 square meters each to Crisostomo and Jose. The three deeds of sale particularly described the portion conveyed to each son in metes and bounds. Petitioners contend that since the property was already three distinct parcels of land, there was no longer co-ownership among the brothers. Hence, Jose and Severo, Jr. had no right of redemption when Crisostomo sold his share to the spouses Si. Petitioners point out that it was only because the Armada brothers failed to submit the necessary subdivision plan to the Office of the Register of Deeds in Pasay City that separate titles were not issued and TCT No. 16007 was issued and registered in the names of Jose, Crisostomo, and Severo, Jr. After trial on the merits, the court ruled for petitioners: "IN VIEW OF ALL THE FOREGOING, the complaint is hereby DISMISSED. With costs against the plaintiffs."[7] Private respondents appealed to the Court of Appeals. On March 25, 1994, the appellate court issued the decision now assailed by petitioners. In reversing the decision of the trial court and ruling for private respondents, the Court of Appeals found that: "A careful examination of TCT No. 16007 (Exh. 'A') shows that the portion sold by virtue of the Deeds of Sale (Exh. 1, 2, & 3) to the Armada brothers do not appear in the said title, neither does it indicate the particular area sold. Moreover, no evidence was presented to show that the Register of Deeds issued TCT No. 16007 (Exh. 'A') on the basis of the said deeds of Sale. In fact, TCT No. 16007 (Exh. 'A') shows that the lot is co-owned by Jose, Crisostomo and Severo, Jr. in the proportion of 113.33, 113.34 and 113.33 sq. m. respectively. Furthermore, the evidence on record shows that the Deed of Absolute Sale (Exh. 'B'), executed by Cresencia Armada in favor of defendants Si, stated that the portion sold was the 'undivided one hundred thirteen & 34/100 (113.34) square meters' of the parcel of land

covered by TCT NO. 16007 of the Registry of Deeds for Pasay City, which means that what was sold to defendants are still undetermined and unidentifiable, as the area sold remains a portion of the whole. Moreover, plaintiff Remedi[o]s Armada testified that on March 27, 1979, Crisostomo Armada, thru his attorney-in-fact and co-defendant, Cresenciana Alejo, sold his undivided 113.34 share to defendants, Sps. Si as evidenced by a Deed of Absolute Sale (Exh. 'B'), and presented for registration with the Register of Deeds (Exh. 'B-1') without notifying plaintiffs of the sale (TSN, pp. 6-8, December 20, 1988). Instead, it appears that the phrase 'and that the co-owners are not interested in buying the same inspite of notice to them', was inserted in the Deed of Sale (Exh. 'B'). xxx Otherwise stated, the sale by a (sic) co-owner of his share in the undivided property is not invalid, but shall not be recorded in the Registry Property, unless accompanied by an affidavit of the Vendor that he has given written notice thereof to all possible redemptioners."[8] On August 29, 1994, petitioners' counsel on record, Atty. Roberto B. Yam received a copy of the CA decision. On October 14, 1994, he filed a motion for reconsideration, but it was denied by the Court of Appeals on November 21, 1994, for being filed out of time. On December 5, 1994, petitioners filed their motion for new trial under Section 1, Rule 53 of the Revised Rules of Court.[9] Petitioners presented new evidence, TCT No. (17345) 2460, registered in the name of Escolastica de la Rosa, married to Severo Armada, Sr., with annotation at the back stating that the cancellation was by virtue of three deeds of sale in favor of Escolastica's sons. On March 24, 1995, respondent court denied the motion, reasoning that when the motion was filed, the reglementary period had lapsed and the decision had become final and executory. Petitioners' motion for reconsideration of said resolution was denied. Hence, the present petition, alleging that: "1. Respondent Court of Appeals committed a reversible error in ruling that a co-ownership still existed. "2. Respondent Court of Appeals committed a reversible error in denying the Motion for Reconsideration of its Decision of 25 March 1994 on purely technical grounds. "3. Respondent Court of Appeals committed a reversible error in denying the Motion for New Trial. "4. Respondent Court of Appeals committed a reversible error in ordering petitioners to pay moral damages, attorney's fees, litigation expenses and the costs of the suit."[10] In essence, this Court is asked to resolve: (1) whether respondent court erred in denying petitioners' motion for reconsideration and/or the Motion for New Trial; (2) whether private respondents are co-owners who are legally entitled to redeem the lot under Article 1623 of the Civil Code;[11] and (3) whether the award of moral damages, attorney's fees and costs of suit is correct. The pivotal issue is whether private respondents may claim the right of redemption under Art. 1623 of the Civil Code. The trial court found that the disputed land was not part of an undivided estate. It held that the three deeds of absolute sale[12]technically described the portion sold to each son. The portions belonging to the three sons were separately declared for taxation purposes with the Assessor's Office of Pasay City on September 21, 1970.[13] Jose's testimony that the land was undivided was contradicted by his wife when she said they had been receiving rent from the property specifically allotted to Jose.[14] More significantly, on
Property | Art. 484 to 493 | 1

2)

3)

4)

5) 6)

SO ORDERED."[3] The factual background of the case is as follows: The 340 square meters of land, situated in San Jose District, Pasay City, the property in dispute, originally belonged to Escolastica, wife of Severo Armada, Sr. This was covered by Transfer Certificate of Title (TCT) No. (17345) 2460. During the lifetime of the spouses, the property was transferred to their children and the Registry of Deeds, Pasay City, issued TCT No. 16007 in the names of the three sons, as follows : "DR. CRISOSTOMO R. ARMADA,

January 9, 1995, the Registry of Deeds of Pasay City cancelled TCT 24751 and issued three new titles as follows: (1) TCT 134594[15] in favor of Severo Armada, Jr.; (2) TCT 134595 [16] under the name of Anita Bonode Si, married to Serafin Si; and (3) TCT 134596 [17] owned by Jose Armada, married to Remedios Almanzor. All these are on record. However, the Court of Appeals' decision contradicted the trial court's findings.[18] In instances when the findings of fact of the Court of Appeals are at variance with those of the trial court, or when the inference drawn by the Court of Appeals from the facts is manifestly mistaken, this Court will not hesitate to review the evidence in order to arrive at the correct factual conclusion.[19] This we have done in this case. It is our considered view now, that the trial court is correct when it found that: "Rightfully, as early as October 2, 1954, the lot in question had already been partitioned when their parents executed three (3) deed of sales (sic) in favor of Jose, Crisostomo and Severo, all surnamed Armada (Exh. 1, 2, & 3), which documents purports to have been registered with the Register of Deeds of Pasay City, on September 18, 1970, and as a consequence TCT No. 16007 (Exh. A) was issued. Notably, every portion conveyed and transferred to the three sons was definitely described and segregated and with the corresponding technical description (sic). In short, this is what we call extrajudicial partition. Moreover, every portion belonging to the three sons has been declared for taxation purposes with the Assessor's Office of Pasay City on September 21, 1970. These are the unblinkable facts that the portion sold to defendant spouses Si by defendants Crisostomo Armada and Cresenciana Armada was concretely determined and identifiable. The fact that the three portions are embraced in one 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."[20] (citation omitted) ". . . [T]he herein plaintiffs cannot deny the fact that they did not have knowledge about the impending sale of this portion. The truth of the matter is that they were properly notified. Reacting to such knowledge and notification they wrote defendant Dr. Crisostomo Armada on February 22, 1979, a portion of said letter is revealing: 'Well you are the king of yourselves, and you can sell your share of Levereza."[21] (emphasis omitted) After the physical division of the lot among the brothers, the community ownership terminated, and the right of preemption or redemption for each brother was no longer available.[22] Under Art. 484 of the Civil Code,[23] there is co-ownership whenever the ownership of an undivided thing or right belongs to different persons. There is no co-ownership when the different portions owned by different people are already concretely determined and separately identifiable, even if not yet technically described.[24] This situation makes inapplicable the provision on the right of redemption of a co-owner in the Civil Code, as follows: "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." Moreover, we note that private respondent Jose Armada was well informed of the impending sale of Crisostomo's share in the land. In a letter dated February 22, 1979, Jose told his brother Crisostomo: "Well you are the king of yourselves, and you can sell your share of Leveriza."[25] Co-owners with actual notice of the sale are not entitled to written notice. A written notice is a formal requisite to make certain that the co-owners have actual notice of the sale to enable them to exercise their right of redemption within the limited period of thirty days.

But where the co-owners had actual notice of the sale at the time thereof and/or afterwards, a written notice of a fact already known to them, would be superfluous. The statute does not demand what is unnecessary.[26] Considering that respondent Court of Appeals erred in holding that herein private respondent could redeem the lot bought by petitioners, the issue of whether the appellate court erred in denying petitioners' motions for reconsideration and new trial need not be delved into. The same is true with respect to the questioned award of damages and attorney's fees. Petitioners filed their complaint in good faith and as repeatedly held, we cannot put a premium on the right to litigate. WHEREFORE, the petition is GRANTED, the Decision of the Court of Appeals dated March 25, 1994 and its Resolutions dated March 24, 1995 and September 6, 1995 in CA-G.R. CV No. 30727 are ANNULLED and SET ASIDE . Civil Case No. 8023-P is DISMISSED for lack of merit. The decision of the Regional Trial Court of Pasay City, Branch 113, promulgated on August 29, 1989, is REINSTATED. SO ORDERED. THIRD DIVISION [G.R. No. 152716. October 23, 2003] ELNA MERCADO-FEHR, petitioner, vs. BRUNO FEHR, respondent. DECISION PUNO, J.: This case arose from a petition for declaration of nullity of marriage on the ground of psychological incapacity to comply with the essential marital obligations under Article 36 of the Family Code filed by petitioner Elna Mercado-Fehr against respondent Bruno Fehr before the Regional Trial Court of Makati in March 1997.[1] After due proceedings, the trial court declared the marriage between petitioner and respondent void ab initio under Article 36 of the Family Code and ordered the dissolution of their conjugal partnership of property.[2] The dispositive portion of the Decision dated January 30, 1998 states: WHEREFORE, in the light of the foregoing, the marriage between Elna D. Mercado and Bruno F. Fehr on March 14, 1985 is hereby declared null and void on the ground of psychological incapacity on the part of respondent to perform the essential obligations of marriage under Article 36 of the Family Code. Accordingly, the conjugal partnership of property existing between the parties is dissolved and in lieu thereof, a regime of complete separation of property between the said spouses is established in accordance with the pertinent provisions of the Family Code, without prejudice to the rights previously acquired by creditors. Custody over the two minor children, MICHAEL BRUNO MERCADO FEHR and PATRICK FRANZ FEHR, is hereby awarded to petitioner, she being the innocent spouse. Let a copy of this Decision be duly recorded in the proper civil and property registries in accordance with Article 52 of the Family Code. SO ORDERED.[3] On August 24, 1999, the trial court issued an Order resolving the various motions[4]

filed by respondent after the case had been decided. The Order pertained to the properties held by the parties, thus: xxx xxx xxx

After a careful scrutiny of the inventory of properties submitted by both parties, the Court finds the following properties to be excluded from the conjugal properties, namely: a) the Bacolod property covered by Transfer Certificate of Title No. T-137232, considering that the same is owned by petitioners parents, Herminio Mercado and Catalina D. Mercado xxx and b) Suite 204 of the LCG Condominium covered by Condominium Certificate of Title No. 14735, considering that the same was purchased on installment basis by respondent with his exclusive funds prior to his marriage, as evidenced by a Contract to Sell dated July 26, 1983. xxx Accordingly, the conjugal properties of the petitioner and respondent shall be distributed in the following manner: TO PETITIONER ELNA MERCADO: a. Ground Floor, LCG Condominium, with an area of 671.84 sq. m., covered by Condominium Certificate of Title No. 14734; and b. Tamaraw FX (1995 model)

TO RESPONDENT BRUNO FRANZ FEHR: a. Upper Basement, LCG Condominium, with an area of 180.81 sq. m. and covered by Condominium Certificate of Title No. 14733; and b. Nissan Sentra with Plate No. FDJ-533 (1994 model)

Furthermore, Suite 204, LCG Condominium with an area of 113.54 sq. m. and covered by Condominium Certificate of Title NO. 14735 is hereby declared the EXCLUSIVE PROPERTY of respondent, BRUNO FRANZ FEHR. Accordingly, petitioner is hereby directed to transfer ownership of Suite 204 in the name of respondent, covered by Condominium Certificate of Title No. 14735, being respondents exclusive property, acquired prior to his marriage. Anent the monthly rentals prior to the issuance of this Order of the subject properties, namely the Ground Floor Front (Fridays Club), Ground Floor Rear Apartment and Upper Basement at LGC Condominium, all leased by Bar 4 Corporation, the same shall be shared by the parties in common, in proportion to one-half each or share and share alike, after deducting all expenses for Income Taxes, Business Permits, Realty Taxes, Municipal License fees, clearances, etc. Accordingly, petitioner is hereby directed to deliver to respondent the following: a) the balance of his share of the monthly rentals from February 1998 to May 1998; and b) his one-half share (1/2) of the monthly rentals of the aforesaid properties from June 1998 up to this date. Thereafter, the parties shall own and enjoy their respective share of the monthly rentals derived from the properties adjudicated to them as stated above. The Petitioner and Respondent are further enjoined to jointly support their minor children, Michael and Patrick Fehr, for their education, uniforms, food and medical expenses.[5]
Property | Art. 484 to 493 | 2

Petitioner filed a motion for reconsideration of said Order with respect to the adjudication of Suite 204, LCG Condominium and the support of the children. Petitioner alleged that Suite 204 was purchased on installment basis at the time when petitioner and respondent were living exclusively with each other as husband and wife without the benefit of marriage, hence the rules on co-ownership should apply in accordance with Article 147 of the Family Code. Petitioner further claimed that it would not be in the best interests of the children if she would be made to demand periodically from respondent his share in the support of the children. She instead proposed that the Upper Basement and the Lower Ground Floor of the LCG Condominium be adjudicated to her so that she could use the income from the lease of said premises for the support of the children.[6] Resolving said motion, the trial court held in an Order dated October 5, 2000 that since the marriage between petitioner and respondent was declared void ab intio, the rules on coownership should apply in the liquidation and partition of the properties they own in common pursuant to Article 147 of the Family Code. The court, however, noted that the parties have already agreed in principle to divide the properties and/or proceeds from the sale thereof proportionately among them and their children as follows: 1/3 for petitioner, 1/3 for respondent and 1/3 for the children. It also affirmed its previous ruling that Suite 204 of LCG Condominium was acquired prior to the couples cohabitation and therefore pertained solely to respondent.[7] On November 28, 2000, petitioner filed a notice of appeal questioning the October 5, 2000 Order of the trial court.[8] Respondent filed an Opposition to the Notice of Appeal.[9] On January 12, 2001, petitioner withdrew the notice of appeal[10] and instead filed on the following day a special civil action for certiorari and prohibition with the Court of Appeals, questioning the findings of the trial court in its Order dated October 5, 2000.[11] The Court of Appeals, in its Decision dated October 26, 2001, dismissed the petition for certiorari for lack of merit. The appellate court stated that petitioner has not shown any reason to warrant the issuance of a writ of certiorari as the errors she raised were mere errors of judgment which were the proper subject of an ordinary appeal, not a petition for certiorari.[12] Petitioner filed a motion for reconsideration of said Decision, which was also denied by the appellate court.[13] Hence this petition. Petitioner raises the following arguments: 1) Petitioner correctly filed a petition for certiorari and prohibition against the Regional Trial Court of Makati, Branch 149 in the Court of Appeals in view of the fact that the questioned orders were issued with grave abuse of discretion amounting to excess of or lack of jurisdiction. The Court of Appeals erred in ruling that the questioned orders were errors of judgment and not of jurisdiction.[14]

remedy, whether an appeal or a petition for certiorari, as she had lost all the right to appeal from the time the Decision of January 30, 1998 became final and executory. He argues that the Order of the trial court dated October 5, 2000 is no longer assailable because it was merely issued to execute the final and executory Decision of January 30, 1998. He also submits that the division of the properties into three and the distribution of 1/3 share each to the petitioner, the respondent, and their children was proper, in accordance with Articles 50, 51, 147 and 148 of the Family Code mandating the delivery of the presumptive legitime of the common children upon dissolution of the property regime. Respondent further claims Suite 204 of LCG Condominium to be his exclusive property as it was acquired on July 26, 1983, prior to their marriage on March 14, 1985.[16] A petition for certiorari is the proper remedy when any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction and there is no appeal, nor any plain speedy, and adequate remedy at law. Grave abuse of discretion is defined as the capricious and whimsical exercise of judgment as is equivalent to lack of jurisdiction. As a general rule, a petition for certiorari will not lie if an appeal is the proper remedy such as when an error of judgment or procedure is involved. As long as a court acts within its jurisdiction and does not gravely abuse its discretion in the exercise thereof, any supposed error committed by it will amount to nothing more than an error of judgment reviewable by a timely appeal and not assailable by a special civil action of certiorari. However, in certain exceptional cases, where the rigid application of such rule will result in a manifest failure or miscarriage of justice, the provisions of the Rules of Court which are technical rules may be relaxed. Certiorari has been deemed to be justified, for instance, in order to prevent irreparable damage and injury to a party where the trial judge has capriciously and whimsically exercised his judgment, or where there may be danger of clear failure of justice, or where an ordinary appeal would simply be inadequate to relieve a party from the injurious effects of the judgment complained of.[17] The exception applies to the case at bar. We reject respondents submission that all the appellate remedies of petitioner have been foreclosed when the Decision dated January 30, 1998 became final and executory. What is being questioned in this petition is not the January 30, 1998 Decision of the trial court declaring the marriage between petitioner and respondent void ab initio on the ground of psychological incapacity, but the Order of the trial court dated October 5, 2000 dividing the common properties of petitioner and respondent into three1/3 to petitioner, 1/3 to respondent and 1/3 to their children, and affirming its previous ruling that Suite 204 of LCG Condominium is the exclusive property of respondent. The issue on the validity of the marriage of petitioner and respondent has long been settled in the main Decision and may no longer be the subject of review. There were, however, incidental matters that had to be addressed regarding the dissolution of the property relations of the parties as a result of the declaration of nullity of their marriage. The questioned Order pertained to the division and distribution of the common properties of petitioner and respondent, pursuant to the courts directive in its main decision to dissolve the conjugal partnership. Said Order is a final Order as it finally disposes of the issues concerning the partition of the common properties of petitioner and respondent, and as such it may be appealed by the aggrieved party to the Court of Appeals via ordinary appeal. However, considering the merits of the case, the Court believes that a blind adherence to the general rule will result in miscarriage of justice as it will divest the petitioner of her just share in their common property, and thus, deprive her of a significant source of income to support their children whom the court had entrusted to her care. We have held that where a rigid application of the rule that certiorari cannot be a substitute for appeal will result in a manifest failure or miscarriage of justice, the provisions of the Rules of Court which are technical rules may be relaxed.[18] We now go to the substantive issues. The crux of the petition is the ownership of Suite 204 of LCG Condominium and how the properties acquired by petitioner and respondent should be partitioned.

It appears from the facts, as found by the trial court, that in March 1983, after two years of long-distance courtship, petitioner left Cebu City and moved in with respondent in the latters residence in Metro Manila. Their relations bore fruit and their first child, Michael Bruno Fehr, was born on December 3, 1983. The couple got married on March 14, 1985. In the meantime, they purchased on installment a condominium unit, Suite 204, at LCG Condominium, as evidenced by a Contract to Sell dated July 26, 1983 executed by respondent as the buyer and J.V. Santos Commercial Corporation as the seller. Petitioner also signed the contract as witness, using the name Elna Mercado Fehr. Upon completion of payment, the title to the condominium unit was issued in the name of petitioner.[19] In light of these facts, we give more credence to petitioners submission that Suite 204 was acquired during the parties cohabitation. Accordingly, under Article 147 of the Family Code, said property should be governed by the rules on co-ownership. The Family Code provides: Article 147. When a man and a woman who are capacitated to marry each other, live exclusively with each other as husband and wife without the benefit of marriage or under a void marriage, their wages and salaries shall be owned by them in equal shares and the property acquired by both of them through their work or industry shall be governed by the rules on co-ownership. In the absence of proof to the contrary, properties acquired while they lived together shall be presumed to have been obtained by their joint efforts, work or industry, and shall be owned by them in equal shares. For purposes of this Article, a party who did not participate in the acquisition by the other party of any property shall be deemed to have contributed jointly to the acquisition thereof if the formers efforts consisted in the care and maintenance of their family and of the household. Neither party can encumber or dispose by acts inter vivos of his or her share in the property acquired during cohabitation and owned in common, without the consent of the other, until after the termination of their cohabitation. When only one of the parties to a void marriage is in good faith, the share of the party in bad faith in the co-ownership shall be forfeited in favor of their common children. In case of default of or waiver by any or all of the common children or their descendants, each vacant share shall belong to the respective surviving descendants. (emphasis supplied) Article 147 applies to unions of parties who are legally capacitated and not barred by any impediment to contract marriage, but whose marriage is nonetheless void,[20] as in the case at bar. This provision creates a co-ownership with respect to the properties they acquire during their cohabitation. We held in Valdes vs. Regional Trial Court, Br. 102, Quezon City:[21] This peculiar kind of co-ownership applies when a man and a woman, suffering no legal impediment to marry each other, so exclusively live together as husband and wife under a void marriage or without the benefit of marriage. The term capacitated in the provision (in the first paragraph of the law) refers to the legal capacity of a party to contract marriage, i.e., any male or female of the age of eighteen years or upwards not under any of the impediments mentioned in Article 37 and 38 of the Code. Under this property regime, property acquired by both spouses through their work and industry shall be governed by the rules on equal co-ownership. Any property acquired during the union is prima facie presumed to have been
Property | Art. 484 to 493 | 3

2)

We shall first address the procedural issue, whether the Court of Appeals erred in dismissing the special civil action for certiorari filed by petitioner. Petitioner argues that the filing of a petition for certiorari with the Court of Appeals was proper because the trial court committed grave abuse of discretion in the issuance of its Order dated October 5, 2000, and there were no other speedy and adequate remedies available. She asserts that the trial court committed grave abuse of discretion when it held that Suite 204 of the LCG Condominium was the exclusive property of respondent, although it was established that they lived together as husband and wife beginning March 1983, before the execution of the Contract to Sell on July 26, 1983. Furthermore, the trial courts ruling dividing their properties into three, instead of two as provided under Article 147 of the Family Code, or four, as allegedly agreed by the parties during a conference with the trial court judge on May 3, 2000, also constituted grave abuse of discretion.[15] Respondent, on the other hand, contends that petitioner may no longer avail of any

obtained through their joint efforts. A party who did not participate in the acquisition of the property shall still be considered as having contributed thereto jointly if said partys efforts consisted in the care and maintenance of the family household. Thus, for Article 147 to operate, the man and the woman: (1) must be capacitated to marry each other; (2) live exclusively with each other as husband and wife; and (3) their union is without the benefit of marriage or their marriage is void. All these elements are present in the case at bar. It has not been shown that petitioner and respondent suffered any impediment to marry each other. They lived exclusively with each other as husband and wife when petitioner moved in with respondent in his residence and were later united in marriage. Their marriage, however, was found to be void under Article 36 of the Family Code because of respondents psychological incapacity to comply with essential marital obligations. The disputed property, Suite 204 of LCG Condominium, was purchased on installment basis on July 26, 1983, at the time when petitioner and respondent were already living together. Hence, it should be considered as common property of petitioner and respondent. As regards the settlement of the common properties of petitioner and respondent, we hold that the Civil Code provisions on co-ownership should apply. There is nothing in the records that support the pronouncement of the trial court that the parties have agreed to divide the properties into three1/3 share each to the petitioner, the respondent and their children. Petitioner, in fact, alleges in her petition before this Court that the parties have agreed on a four-way division of the properties1/4 share each to the petitioner and the respondent, and 1/4 share each to their two children. Moreover, respondents argument that the three -way partition is in accordance with Articles 50 and 51 of the Family Code does not hold water as said provisions relate only to voidable marriages and exceptionally to void marriages under Article 40 of the Family Code, i.e., the declaration of nullity of a subsequent marriage contracted by a spouse of a prior void marriage before the latter is judicially declared void.[22] In sum, we rule in favor of the petitioner. We hold that Suite 204 of LCG Condominium is a common property of petitioner and respondent and the property regime of the parties should be divided in accordance with the law on co-ownership. IN VIEW WHEREOF, the petition is GRANTED. The case is hereby REMANDED to the Regional Trial Court of Makati, Branch 149 for liquidation of the properties of petitioner and respondent in accordance with this Courts ruling. SO ORDERED. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 150707 April 14, 2004 APOLONIA LL. OCAMPO Now Substituted by MARIANO O. QUIEN, AMELITA Q. TAN, MILOVAN O. QUIEN, LUISA OCAMPO-LLORIN, MELITA F. OCAMPO, FELIX OCAMPO JR., RAMON OCAMPO, MIGUEL OCAMPO, JUANA OCAMPO, ANDRES OCAMPO SR., VIOLETA OCAMPO, MERCEDITA OCAMPO, ANTONIA OCAMPO, ELISA OCAMPO, BEATRIZ OCAMPO, JUAN JOHNNY OCAMPO, JONAS OCAMPO, MARIA DOLORES OCAMPO, REBECCA OCAMPO, FIDELA OCAMPO, LUIS OCAMPO JR. and ERNESTO O. FORTUNO, petitioners, vs. FIDELA LL. OCAMPO, FELICIDAD LL. OCAMPO, BELEN OCAMPO-BARRITO, VICENTE BARRITO, NEMESIO LL. OCAMPO, IMELDA OCAMPO and JOSE OCAMPO, respondents. DECISION

PANGANIBAN, J.: Basic is the rule that the party making an allegation in a civil case has the burden of proving it by a preponderance of evidence. In an action involving property, petitioners should rely on the strength of their own title and not on the alleged weakness of respondents claim. The Case Before this Court is a Petition for under Rule 45 of the Rules of Court, assailing the October 31, 2001 Decision2 of the Court of Appeals (CA) in CA-GR CV No. 56941. The decretal portion of the Decision reads as follows: "WHEREFORE, with the sole modification that the awards for damages and attorneys fees are hereby deleted, the judgment appealed from is, in all other respects, AFFIRMED. Without costs."3 The CA affirmed the Regional Trial Court (RTC) Decision,4 rendered on October 30, 1996, which decreed thus: "WHEREFORE, premises considered, the Court finds, holds and declares that defendant Belen Ocampo-Barrito, married to Vicente Barrito, are the true and lawful exclusive owners of the following properties, namely: (a) A parcel of residential/commercial land situated in the poblacion of Nabua, Camarines Sur, bounded on the NE by Carmen Ocampo and Alberto Espiritu, on the SE by the Burgos Street, on the SW by a street, and on the NW by Julian Ocampo and Carmen Ocampo, containing an area of 1,119 square meters, more or less, presently covered by TCT No. 13654 in the name of Belen Ocampo-Barrito, married to Vicente Barrito and previously covered by TCT No. RT4389(983) in the name of Fidela Ocampo, declared under TD No. 18856 and assessed at P17,240.00. (b) A parcel of residential land situated at San Luis, Nabua, Camarines Sur, bounded on the North and East by a barrio road, on the South by a creek, and on the West by Lot 237, with an area of about 300 square meters, declared under TD No. 19639 with an assessed value of P6,240.00. (c) A parcel of land situated at Sto. Domingo, Nabua, Camarines Sur, bounded on the North by Lot 10323, on the East by Lot 9543, on the South by Lot 10325, and on the West by Lot 10322, with an area of about 4884 square meters, declared under TD No. 35122 and assessed at P6780.00 as described and referred to in paragraph 9, sub-paragraphs (a), (b) and (c) of the original complaint and it is hereby ordered that: 1. The complaint and supplemental complaint are dismissed for failure of the plaintiffs to prove their cause/causes of action by preponderance of evidence and on the added ground of prescription; 2. The plaintiffs are ordered to pay as their joint and several obligation, to defendants Fidela Ll. Ocampo, Belen Ocampo-Barrito and Vicente Barrito, the total sum of P15,000.00 for attorneys fees and other expenses of litigation and P50,000.00 for moral damages; 3. The plaintiffs jointly and severally pay the cost of this suit. 4. Upon the finality of this decision, the notice of lis pendens annotated at plaintiffs behest in the Certificates Review1

of Title covering the properties in question, of defendants be cancelled; and the plaintiffs, their agents and representatives as well as successors-in-interest are ordered to respect the right of ownership of said defendants thereto, and to vacate and restore the lawful possession of all portions of said properties to herein defendants, their agents, representatives and successors-in-interest."5 The Facts The CA adopted the RTCs summation of facts as follows: "Notwithstanding its somewhat deficient grammar and syntax, the following summation of the relevant and material antecedents of the case by the court a quo, is substantially correct -This is a civil suit for partition and damages filed by plaintiffs against the defendants. The complaint alleges that during the lifetime of the spouses Jose Ocampo and Juana Llander-Ocampo, they begot ten (10) children, namely: Fidela, Felix, Andres, Nemesio, Jose, Apolonia, Felicidad, Luisa, Rosario, and Luis. Of the aforementioned children, the following are already dead, namely: Felix, who is survived by his widow, Melita F. Ocampo and children Felix, Jr., Ramon and Miguel; Andres, who is survived by Juana Ocampo and children Jose, Andres, Imelda, Violeta and Mercedita; Jose, who is survived by his children Antonia, Elias and Juan (Johnny); Rosario, who is survived by Ernesto O. Fortuno; Luis, who is survived by his children Rose, Ricardo, Jonas, Maria Dolores, Rebecca, Fidela and Luis, Jr.; and Luisa, who is survived by Carlos Llorin and children Mecita, Manuel, Carlos, Jr., Carmelita and Marilou L. Arellano. The complaint further alleges that during the lifetime of the spouses Jose Ocampo and Luisa Llander-Ocampo, they acquired several parcels of land and, upon their death, left the following properties, namely: (a) A parcel of residential/ commercial land situated in the poblacion of Nabua, Camarines Sur, bounded on the NE by Carmen Ocampo and Alberto Espiritu, on the SE by the Burgos Street, on the SW by a Street, and on the NW by Julian Ocampo and Carmen Ocampo, containing an area of 1,119 square meters, more or less, presently covered by TCT No. RT-4389(983) in the name of Fidela Ocampo, declared under TD No. 18856 and assessed at P17,240.00; (b) A parcel of residential land situated at San Luis, Nabua, Camarines Sur, bounded on the North and East by a barrio road, on the South by a creek, and on the West by Lot 237, with an area of about 300 square meters, declared under TD No. 19639 with an assessed value of P6,240.00; and (c) A parcel of land situated at Sto. Domingo, Nabua, Camarines Sur, bounded on the North by Lot 10323, on the East by Lot 9543, on the South by Lot 10325, and on the West by Lot 10322, with an area of about 4,884
Property | Art. 484 to 493 | 4

square meters, declared under TD No. 35122 and assessed at P6,780.00. that all the above named parcels of land are actually owned in common by the children of the late spouses Jose Ocampo and Juana Llander Ocampo although the land denominated as parcel (a) of the complaint is ostensibly registered in the name of Fidela Ocampo alone but acknowledged by her as a property owned in common by all of them, brothers and sisters; that plaintiffs desire to partition said properties but defendants Fidela Ocampo and Felicidad unlawfully and unreasonably refuse to do so and moved by a common purpose, both of them mortgaged to the PNB the land denominated as parcel (a) of the complaint to secure the payment of a P110,000.00 loan, the proceeds of which were x x x exclusively to the benefit of said defendants only; that the same defendants Fidela Ocampo and Felicidad Ocampo have been receiving the fruits of the properties to the exclusion of their co-heirs amounting to not less than P2,000.00 a year; and, that because of their relationship, they undertook earnest efforts to amicably settle this controversy but because of defendants Fidela Ocampo and Felicidad Ocampo[s] utterly unreasonable and unjustified actuations, the same failed. xxx xxx xxx In their complaint, plaintiffs pray that judgment be rendered ordering the partition of the properties described in paragraph 9 of the complaint; ordering defendants Fidela Ocampo and Felicidad Ocampo, to release or otherwise cancel any and all encumbrances on TCT No. RT-4389(983) which they had caused to be annotated thereon, particularly, the mortgage in favor of the PNB; requiring Fidela Ocampo and Felicidad Ocampo to refrain from further encumbering said properties or otherwise subjecting the same to any lien and for that purpose, a writ of preliminary injunction to be issued against them to enjoin the commission of such acts; ordering defendants Fidela Ocampo and Felicidad Ocampo to submit an accounting of the fruits and other produce they had received from said properties; further ordering Fidela Ocampo and Felicidad Ocampo to indemnify plaintiffs the sum of not less than P15,000.00 by way of attorneys fees and related expenses of litigation, plus the costs of the suit; and, further granting plaintiffs such other remedies as may be just and equitable in the premises. xxx xxx xxx On 17 December 1987, counsel for plaintiffs filed a Motion to Admit Supplemental Complaint dated 2 December 1987 which was granted by the Court as there was no opposition to it. The Supplemental Complaint alleges that defendants Helen Ocampo-Barrito and Vicente Barrito are spouses; that on 30 September 1987, TCT No. RT-4389(983) in the name of defendant Fidela Ocampo and covering the lot described as parcel (a) in paragraph 9 of the original complaint was cancelled and, in lieu thereof, TCT No. 1364 was issued to defendant Belen OcampoBarrito, married to defendant Vicente Barrito, on the strength of an allege[d] Deed of Donation Inter Vivos ostensibly executed by defendant Fidela Ll. Ocampo in their favor on 13 January 1984; that at the time the Deed of Donation Inter Vivos was presented for registration and when TCT No. 1364, Registry of Camarines Sur, was issued to defendant Belen Ocampo-Barrito, both the donor and

donees were notoriously aware that said parcel of land was among the lots subject of this Civil Case No. IR-1867 of which the donor Fidela Ll. Ocampo and the mother of the donees, Felicidad Ll. Ocampo, are defendants, that said properties were owned by the Ocampo brothers and sisters, and that the donor Fidela Ll. Ocampo was not the exclusive owner thereof; that the transfer of defendants Fidela Ll. Ocampo and Belen Ocampo-Barrito of the ownership over said property now subject of this partition is tainted with fraud, actual and deliberate, to deprive plaintiffs of their legitimate share therein, knowing as they do that the same are a co-ownership of the original parties plaintiffs and defendants herein; that defendants Fidela Ll. Ocampo and the spouses Belen Ocampo-Barrito and Vicente Barrito have not acted in good faith, deliberately causing damage and injury to the plaintiffs by their avaricious desire to obtain sole ownership of said properties through dubious and illegal means that the defendant spouses Belen Ocampo-Barrito and Vicente Barrito, through dubious means and undue influence over Fidela Ll. Ocampo, a very old spinster whom they have lately taken into their custody, succeeded in having the latter execute this supposed deed of donation inter vivos; that defendants have not acted with justice, honesty and good faith, causing injury to plaintiffs rights in a manner inconsistent with morals and good customs, hence, are liable for moral damages of not less than P50,000.00; and that to set an example for the public good and to deter others similarly minded from doing so, defendants should be assessed exemplary damages of not less than P50,000.00. Plaintiffs pray that judgment be rendered (a) declaring the Deed of Donation Inter Vivos allegedly executed by Fidela Ll. Ocampo in favor of Belen Ocampo-Barrito and Vicente Barrito be declare[d] null and void, (b) ordering defendants Belen Ocampo-Barrito and Vicente Barrito to reconvey so much of the property subject thereof as pertain to the plaintiffs, (c) directing defendants, jointly and severally, to indemnify plaintiffs such amounts as this Honorable Court may consider fair and reasonable by way of actual, moral and exemplary damages, inclusive of attorneys fees and related expenses of litigation, and (d) granting plaintiffs such other remedies as may be just and equitable in the premises. xxx xxx xxx As Special Defenses, defendant Belen Ocampo-Barrito allege that the original defendant Fidela Ll. Ocampo, her predecessor-ininterest, since 1949 has been the absolute owner in fee simple of the property by virtue of the issuance of the certificate of title in her name; that her predecessor-in-interest held the same certificate of title to the same parcel of land (TCT No. RT-4389(983) free of all encumbrances and adverse claims and was in notorious, public, and actual possession of the property in concept of absolute owner from 1949 until 13 January 1984, when said predecessor-in-interest validly conveyed the property by donation inter vivos which she accepted in the same public instrument; that TCT No. 1364 was issued to defendant Belen Ocampo-Barrito on the strength of the donation inter vivos executed in her favor by her predecessor-in-interest and has since 30 September 1987, been the absolute owner thereof; that since 1949 none of the plaintiffs ever questioned the absolute ownership and title of defendant Belen Ocampo-Barritos predecessor-in-interest over the property making the decree of registration incontrovertible; that it is fatal for plaintiffs cause of action to allege that defendants exerted undue influence over Fidela

Ll. Ocampo for the latter to execute the deed of donation while clearly admitting in both the original and supplemental complaints that defendants are residents of Mindoro Occidental a far away place from Nabua, Camarines Sur, the place where the same predecessorin-interest admittedly resides; and, that Belen Ocampo-Barritos title cannot be collaterally attacked in these supposed partition proceedings. xxx xxx xxx Defendants pray that the case be dismissed for utter lack of merit and plaintiffs be ordered to pay defendants the sum of P200,000.00 for moral damages, P50,000.00 for exemplary damages, P100,000.00 as compensatory damages, to pay attorneys fees in the amount of P15,000.00, and for other just and equitable remedies. xxx xxx xxx As the Special and/or Affirmative Defenses, defendant Fidela Ll. Ocampo alleges that she is the true and absolute owner of the real properties described in paragraph 9 of the original complaint having acquired the same by lucrative title and has, since becoming owner thereof, been in actual possession thereof excepting the portion of the lot described in paragraph 9 (a) of the complaint and covered by Torrens title which was and is still being unlawfully occupied by plaintiffs Quiens; that the properties have been declared for assessment in defendants name as exclusive owner thereof and since her acquisition of said properties, has paid the taxes thereon; that defendant had exercised continuously all the legal incidents of ownership on said lands to the exclusion of and adversely to the public, plaintiffs herein included; that the [D]eed of Donation Inter Vivos and the subsequent transfer of the property mentioned in paragraph 9 of the complaint to other defendants Belen Ocamp[o]Barrito is valid conveyance which binds the said property; and, that assuming that plaintiffs have a cause of action, the same is barred by laches. xxx xxx xxx Defendant Fidela Ll. Ocampo prays that judgment be rendered dismissing the complaint and ordering plaintiffs to indemnify such sum as will be proved as well as [s]uch amount as this Court may assess by way of moral and exemplary damages and costs, including necessary expenses for litigation, and for just and equitable reliefs."6 Ruling of the Court of Appeals According to the appellate court, other than the Acknowledgment of Co-ownership7 executed by Respondent Fidela Ocampo, no documentary evidence was offered to establish petitioners claim of co-ownership. The CA held that this piece of documentary evidence could not prevail over the array of testimonial and documentary evidence that had been adduced by respondents to prove their defenses. Communal ownership of the property in question was supposedly not proven, either, by the ancient photograph showing Spouses Chino Jose and Juana Llander Ocampo with their ten children in front of the disputed property; or by another picture showing the name "Oniang Ocampo -- 1-15-61" engraved on the said house or building. The court a quo rejected the argument of petitioners that the title to the subject property had been placed in the name of Fidela, because their parents followed the Chinese custom of placing properties in the name of the eldest son or daughter who was single. Petitioners explained that upon the death of the eldest sibling, the properties would revert to the younger
Property | Art. 484 to 493 | 5

brothers and sisters. According to the CA, however, not a shred of evidence was adduced to prove that such a Chinese custom existed or was observed in that place. The CA also dismissed petitioners contention that common ownership was indicated by the fact that some of the children of Spouses Ocampo stayed and lived on the subject property. It ruled that fraternal affection could have been the motive that impelled respondents to allow their relatives to use it. In contrast to the arguments of petitioners, the CA said that respondents were able to give clear proof of their ownership of the property: the Transfer Certificate of Title and the corresponding Tax Declaration in the name of Fidela, and later of Belen Ocampo-Barrito. Nevertheless, the CA eliminated the awards for damages and attorneys fees, because the trial court had failed to cite the factual, the legal and the equitable bases therefor. Hence, this Petition.8 The Issues Petitioners raise the following issues for our consideration: "1. Where the evidence presented, oral and documentary, on the question of coownership, is overwhelming as it is unopposed, unrebutted and unimpeached, has co-ownership been proved? "2. Where co-ownership is confirmed by long, public possession by co-owners, did the courts commit grave abuse of discretion in holding that there is no coownership? "3. Where the evidence of respondents is weak, puerile and inconsistent, did the courts commit a grave misapprehension of facts when they gave credence to it? "4. Where a deed of donation intervivos entered in bad faith deprives the heirs of their hereditary shares, is said deed valid? "5. Where a declaration against interest has not been opposed, assailed, rebutted or impeached, did the courts commit grave abuse of discretion in holding there is no such declaration?"9 At bottom, the question to be resolved in this case is who owns the disputed property? The Court's Ruling The Petition has no merit. Main Issue: Ownership of the Subject Property At the outset, we clarify that although there were three (3) properties originally involved in the litigation brought before the RTC, petitioners appeal dealt only with the first one, referred to in the Statement of Facts above -- a parcel of residential/commercial land situated in the poblacion of Nabua, Camarines Sur. In their CA appeal, petitioners declared that "the focus of this case is on the first [property] which is located at downtown Poblacion of Nabua and therefore a valuable piece of property, 1,119 square meters in all."10 Because petitioners had not questioned the RTC Decision with regard to the other properties, then the adjudication of these matters became final. Thus, only one property is left for resolution in the present proceedings.11 Since the original Complaint was an action for partition, this Court cannot order a division of the property, unless it first makes a determination as to the existence of a co-ownership.12 The settlement of the issue of ownership is the first stage in an action for partition.13 This action will not lie if the claimant has no rightful interest in the subject property. Parties filing the action are in fact required by the Rules of Court14 to set forth in their complaint the nature and the extent of their title to the property. It would be premature to effect a partition thereof until and unless the question of ownership is first definitely resolved.15

Basic is the rule that the party making an allegation in a civil case has the burden of proving it by a preponderance of evidence.16 Petitioners chief evidence of co-ownership of the property in question is simply the Acknowledgement of Co-ownership executed by Fidela. As mentioned earlier, both the trial and the appellate courts were correct in finding that this piece of documentary evidence could not prevail over the array of testimonial and documentary evidence that were adduced by respondents, as will be expounded below. Petitioners failed to trace the successive transfers of ownership of the questioned property that eventually led to them. Allegedly, it was originally owned by their parents -- Spouses Ocampo -- whose deaths passed it on to the children. Petitioners, however, presented absolutely no proof of ownership of their predecessors-in-interest. In insisting that it was so transferred and thus co-owned, the former rely on the Acknowledgement of Co-ownership executed by Fidela, their eldest sibling. On the other hand, Belen clearly traced the basis of her alleged sole ownership of the property and presented preponderant proof of her claim. First, she presented a Deed of Absolute Sale of Residential Land,17 referring to the subject property, executed between Adolfo Ocampo as seller and Felix Ocampo as buyer. The document dated July 6, 1948, was signed in the presence of two witnesses and acknowledged before Juan B. Ballecer, a notary public. The theory of petitioners is completely demolished by this document, which they never contested. According to them, the land in question was the conjugal property of their parents; and that upon the latters deaths, the former inherited it in common. If indeed the land was the conjugal property of Spouses Ocampo, then petitioners should have presented evidence to prove such ownership by their alleged predecessors-in-interest. Since the former failed to do so, how then can they prove the transfer to them of ownership that has not been established in the first place? It is axiomatic that no one can transfer to another a right greater than that which one has;18 thus, the legal truism that the spring cannot rise higher than its source.19 Likewise, in this Deed of Absolute Sale, Adolfo Ocampo declared his "exclusive ownership" of the property, "having been acquired by purchase[;] and [having] been in [his] continuous, public, peaceful, adverse and material possession for more than 50 years together with [his] predecessors in rights and interest, in [the] concept of owner without any claim of other persons."20 Second, Respondent Belen proved that on February 10, 1953, this property had been sold to Fidela by Felix Ocampo for a valuable consideration; and that Fidela had entered the property, actually occupied it, and exercised all powers of dominion over it to the exclusion of petitioners. As proofs of ownership of the property by Fidela, Belen presented Transfer Certificate of Title No. RT-4389 (983),21 which named the former as owner in fee simple; and a Declaration of Real Property,22 evidencing payment of real property taxes, also by Fidela as owner. To prove further that Fidela had exercised dominion over the property, Belen also presented a Real Estate Mortgage23 executed by the former as absolute owner. Fidela had executed it in favor of her sister Apolonia Ocampo, one of the original petitioners in this case, who is now represented by her heirs. Belen correctly argues that in agreeing to be a mortgagee, Apolonia admitted and recognized Fidela as the true owner of the land in question. The Civil Code provides that an essential requisite of a contract of mortgage is that the mortgagor be the absolute owner of the thing mortgaged.24 Co-ownership cannot be presumed even if only a portion of the property was mortgaged to Apolonia, because a coowner may dispose only of ones interest in the ideal or abstract part of the undivided thing coowned with others.25 The effect of a mortgage by a co-owner shall be limited to the portion that may be allotted to that person upon the termination of the co-ownership.26 In this case, Fidela mortgaged a definite portion of the property and thus negated any acknowledgement of co-ownership.

Third, Belen then presented a Deed of Donation Inter Vivos27 executed on January 13, 1984, between herself as donee and Fidela as donor. This act shows the immediate source of the formers claim of sole ownership of the property. A donation as a mode of acquiring ownership results in an effective transfer of title to the property from the donor to the donee.28 Petitioners stubbornly rely on the Acknowledgement of Co-ownership allegedly executed by Fidela in favor of her siblings. What they overlook is the fact that at the time of the execution of the Acknowledgement -- assuming that its authenticity and due execution were proven -- the property had already been donated to Belen. The Deed of Donation, which is the prior document, is clearly inconsistent with the document relied upon by petitioners. We agree with the RTCs ratiocination: "On the claim of plaintiffs that defendant Fidela Ll. Ocampo herself made a written acknowledgement for her co-ownership over all the properties disputed with plaintiffs in this case, the same cannot be considered as a declaration against Fidelas interest since the alleged acknowledgement was written and executed on 24 December 1985 when she was no longer the owner of the property as the year previous, on 13 January 1984, she had already donated all her properties to defendant Belen Ocampo-Barrito, so that, in effect, she had no more properties with which she can have an interest to declare against."29 Petitioners argue that the Acknowledgement of Co-ownership may be considered as a declaration against interest. A statement may be admissible as such a declaration if it complies with the following requisites: 1) the declarant is dead or unable to testify; 2) it relates to a fact against the interest of the declarant; 3) at the time of the declaration, the declarant was aware that it was contrary to his or her interest; and 4) the declarant had no motive to falsify and believed the declaration to be true.30 As correctly found by the trial court, however, the Acknowledgement of Co-ownership could not be a fact against the interest of the declarant, since her right over the property had already been extinguished by the prior act of donation. Thus, at the time of the declaration, Fidela could not have acknowledged co-ownership, as she had no more property against which she had an interest to declare. Finally, Belen presented Transfer Certificate of Title No. 1365431 as proof of her ownership of the property. To be sure, the best proof of ownership of the land is the Certificate of Title (TCT). Hence, more than a bare allegation is required to defeat the face value of respondents TCT, which enjoys a legal presumption of regularity of issuance.32 It is quite surprising that despite the process of transfers and titling of the subject property -- commencing in 1948 and eventually leading to the sole ownership of Belen in 198433 -- it was only after 1984 that petitioners started asserting their claim of co-ownership thereof. We are not unmindful of our ruling that the mere issuance of a certificate of title does not foreclose the possibility that the real property may be under co-ownership with persons not named therein.34 But given the circumstances of this case, the claim of co-ownership by petitioners has no leg to stand on. Again, we stress, Belen clearly traced the source of her sole ownership of the property in question and thereby foreclosed the unproven and unsubstantiated allegation of co-ownership thereof. In addition to the TCT presented, Belen offered as evidence the Tax Declaration35 indicating that she, as owner, had been paying real estate taxes on the property, all to the exclusion of petitioners. On the other hand, petitioners could not show any title, tax receipt or document to prove their ownership. Having filed an action involving property, they should have relied on the strength of their own title and not on the alleged weakness of respondents claim.36 Petitioners assert that their claim of co-ownership of the property was sufficiently proved by their witnesses -- Luisa Ocampo-Llorin and Melita Ocampo. We disagree. Their testimonies cannot prevail over the array of documents presented by Belen. A claim of ownership cannot
Property | Art. 484 to 493 | 6

be based simply on the testimonies of witnesses; much less on those of interested parties, self-serving as they are. As to the photographs presented by petitioners to bolster their claim of co-ownership, we affirm the CAs disposition showing the flimsiness of their claim as follows: "The other piece of documentary evidence presented by appellants really proved nothing. The ancient photograph showing the spouses Chino Jose and Juana Llander Ocampo together with their ten children, simply proved that there was such a picture taking of the spouses with their children. But the photograph does not prove communal ownership by appellants over the disputed parcels of land; neither does it prove that the said properties were indeed owned by the spouses Chino Jose and Juana Ocampo, and then later on transferred to and commonly owned by their children. By the same token, the picture exhibited by appellant showing the name Oniang Ocampo -- 1-15-61 (or Apolonia Ocampo, one of the children of the spouses Chino Jose and Juana) engraved in the house or building, does not prove communal ownership of the properties in question. At best, it is susceptible of various meanings, like: that of Oniang Ocampo was born on 1-1561, or that she got married on that date, or that she was celebrating a special event on the date mentioned, or that she even died on the date mentioned. And even assuming ex gratia argumenti, that the said engraving proved ownership over the disputed building, some such fact can only work to the prejudice of herein appellants. Why? Because it would mean that only Oniang (or Apolonia) was the owner of the building and that the building is not, therefore, a communal property of the children of the late spouses Chino Jose and Juana. Adverting to this piece of evidence, the Trial Court postulated -The engravings on the house ONIANG OCAMPO BLDG. -- 1-15-61 cannot serve as evidence that the property is of common ownership. At most, this can only establish the fact that said building was constructed for a certain Oniang on 15 January 1961. If, indeed, the property is of common ownership, there could not have been any difficulty to engrave thereon HEIRS OF JOSE OCAMPO and JUANA LLANDER-OCAMPO -- 1-15-61 instead of ONIANG OCAMPO BLDG. -- 1-15-61."37 Neither can we accept petitioners contention that co-ownership is shown by the fact that some of the children of Spouses Ocampo stayed, lived, and even put up businesses on the property. The appellate court correctly found that since the litigants in this case were blood relatives, fraternal affection could have been a good motive that impelled either Belen or Fidela to allow petitioners to use the property. Without any proof, however, co-ownership among the parties cannot be presumed. Neither are we persuaded by the contention that Spouses Ocampo placed the subject property in the name of only one person in accordance with a Chinese custom. As mentioned earlier, that custom consisted of placing properties of parents in the name of the eldest unmarried son or daughter, with the implicit understanding that ownership thereof would later revert to the siblings. In contrast to the failure of petitioners to prove that such custom existed and was practiced in that place,38 Belen presented evidence that clearly negated any claim of ownership by the formers predecessors-in-interest. Having shown that the property in question was originally owned by one Adolfo Ocampo -- not by Spouses Ocampo, from whom petitioners derive their right -- the claim of custom becomes immaterial. The fact that Fidela was not presented in court will not necessarily favor petitioners and prove that the property in question is indeed co-owned. If they felt that her testimony would prove their cause, then they could have easily called her as an adverse or a hostile witness.39 But since respondents were confident in the documents they presented in court, they did not see any need to call her as a witness.

Petitioners also question the motives of Fidela for donating her properties, when she is still alive and needs money in her old age. They clearly overlook the nature of a donation. Donation is an act of liberality whereby a person gratuitously disposes of a thing or a right in favor of another who accepts it.40 Once perfected, a donation is final; its revocation or rescission cannot be effected, absent any legal ground therefor.41 A donation may in fact comprehend the entire property of the donor.42 At any rate, the law provides that donors should reserve, in full ownership or in usufruct, sufficient means for their own support and that of all their relatives who, at the time of the acceptance of the donation, are by law entitled to be supported by them.43 In questioning the motives of Fidela for donating the subject property, petitioners are contradicting even themselves. On the one hand, they assert that she would not have disposed of her property, since she would need it in her old age; on the other, they argue that it was not hers alone anyway. It should be clear that the law protects donors by providing that, without any reservation of sufficient means for themselves, the donation shall be reduced upon the petition of any person affected.44 To be sure, petitioners arguments all pertain to circumstances extraneous to the Deed of Donation itself. The law is clear that when its terms have been reduced to writing, an agreement must be presumed to contain all the terms agreed upon; and there can be, between the parties and their successors in interest, no evidence of such terms other than the contents of the written agreement.45 Petitioners did not question the consent of Fidela to the donation. Never was there any intimation that she had either been coerced or defrauded into entering into it. As all the essential elements of a donation -- consent, subject matter and cause46 -- have been satisfied, we see no reason to entertain any doubt about the Deed pertaining thereto. The question of why the land was registered several years after the donation is purely speculative. What is important is that there was a duly proven Deed of Donation, which formed the basis of Belens claim and led to the registration of the property in her name. Petitioners also question Fidelas filing of an unlawful detainer suit after the date of the Deed of Donation. Again, we remind petitioners that because this action involves property, they should rely on the strength of their own title, not on the alleged weakness of the claim of respondents. At any rate, the burden of proof of the claim of co-ownership rests on the former. Moreover, the final resolution of this case entails the review of factual findings of the courts below. It is a settled doctrine that in a civil case, final and conclusive are the factual findings of the trial court, if supported by clear and convincing evidence on record. Usually, the Supreme Court does not review those findings -- especially when affirmed by the Court of Appeals, as in this case.47 From the records of the present case, no cogent evidence appears that would impel us to apply the above doctrine differently. The courts below have not overlooked essential facts that, if considered, may produce a different outcome. The trial court correctly explained thus: "This Court from the outset had the opportunity to see and hear the tell-tale [signs] of truthfulness or perjury like the flush of face, or the tone of voice, or the dart of eyes, or the fearful pause [--] and finds that credibility is with the defendants [herein respondents]. Moreover, the preponderance of evidence is with defendants whose testimonial evidences are buttressed by their documentary evidences."48 Finally, we agree with the CA in eliminating the awards for damages and attorneys fees for respondents failure to show any factual, legal or equitable bases therefor.49 WHEREFORE, the Petition is hereby DENIED, and the assailed Decision AFFIRMED. Costs against petitioners. SO ORDERED.

EN BANC

[G.R. No. 152766. June 20, 2003]

LILIA SANCHEZ, petitioner, vs. COURT OF APPEALS, HON. VICTORINO S. ALVARO as Presiding Judge, RTC-Br. 120, Caloocan City, and VIRGINIA TERIA, respondents. DECISION BELLOSILLO, J.: This is a Special Civil Action for Certiorari under Rule 65 of the Rules of Court to annul and set aside the Decision of the Court of Appeals dated 23 May 2001 as well as its Resolution dated 8 January 2002 in CA-G.R. SP No. 59182. Lilia Sanchez, petitioner, constructed a house on a 76-square meter lot owned by her parents-in-law. The lot was registered under TCT No. 263624 with the following co-owners: Eliseo Sanchez married to Celia Sanchez, Marilyn Sanchez married to Nicanor Montalban, Lilian Sanchez, widow, Nenita Sanchez, single, Susana Sanchez married to Fernando Ramos, and Felipe Sanchez.[1] On 20 February 1995, the lot was registered under TCT No. 289216 in the name of private respondent Virginia Teria by virtue of a Deed of Absolute Sale supposed to have been executed on 23 June 1995 [2] by all six (6) co-owners in her favor.[3] Petitioner claimed that she did not affix her signature on the document and subsequently refused to vacate the lot, thus prompting private respondent Virginia Teria to file an action for recovery of possession of the aforesaid lot with the Metropolitan Trial Court (MeTC) of Caloocan City sometime in September 1995, subsequently raffled to Br. 49 of that court. On 12 February 1998, the MeTC-Br. 49 of Caloocan City ruled in favor of private respondent declaring that the sale was valid only to the extent of 5/6 of the lot and the other 1/6 remaining as the property of petitioner, on account of her signature in the Deed of Absolute Sale having been established as a forgery. Petitioner then elevated her appeal to the Regional Trial Court of Caloocan City, subsequently assigned to Br. 120, which ordered the parties to file their respective memoranda of appeal. Counsel for petitioner did not comply with this order, nor even inform her of the developments in her case. Petitioner not having filed any pleading with the RTC of Caloocan City, the trial court affirmed the 27 July 1998 decision of the MeTC. On 4 November 1998, the MeTC issued an order for the issuance of a writ of execution in favor of private respondent Virginia Teria, buyer of the property. On 4 November 1999 or a year later, a Notice to Vacate was served by the sheriff upon petitioner who however refused to heed the Notice. On 28 April 1999 private respondent started demolishing petitioners house without any special permit of demolition from the court. Due to the demolition of her house which continued until 24 May 1999 petitioner was forced to inhabit the portion of the premises that used to serve as the houses toilet and laundry area. On 29 October 1999 petitioner filed her Petition for Relief from Judgment with the RTC
Property | Art. 484 to 493 | 7

on the ground that she was not bound by the inaction of her counsel who failed to submit petitioners appeal memorandum. However the RTC denied the Petition and the subsequent Motion for Reconsideration. On 14 June 2000 petitioner filed her Petition for Certiorari with the Court of Appeals alleging grave abuse of discretion on the part of the court a quo. On 23 May 2001 the appellate court dismissed the petition for lack of merit. On 18 June 2001 petitioner filed a Motion for Reconsideration but the Court of Appeals denied the motion in its Resolution of 8 January 2002. The only issue in this case is whether the Court of Appeals committed grave abuse of discretion in dismissing the challenged case before it. As a matter of policy, the original jurisdiction of this Court to issue the so-called extraordinary writs should generally be exercised relative to actions or proceedings before the Court of Appeals or before constitutional or other tribunals or agencies the acts of which for some reason or other are not controllable by the Court of Appeals. Where the issuance of the extraordinary writ is also within the competence of the Court of Appeals or the Regional Trial Court, it is either of these courts that the specific action for the procurement of the writ must be presented. However, this Court must be convinced thoroughly that two (2) grounds exist before it gives due course to a certiorari petition under Rule 65: (a) The tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction; and (b) There is no appeal nor any plain, speedy and adequate remedy in the ordinary course of law. Despite the procedural lapses present in this case, we are giving due course to this petition as there are matters that require immediate resolution on the merits to effect substantial justice. The Rules of Court should be liberally construed in order to promote their object of securing a just, speedy and inexpensive disposition of every action or proceeding.[4] The rules of procedure should be viewed as mere tools designed to aid the courts in the speedy, just and inexpensive determination of the cases before them. Liberal construction of the rules and the pleadings is the controlling principle to effect substantial justice.[5] Litigations should, as much as possible, be decided on their merits and not on mere technicalities.[6] Verily, the negligence of petitioners counsel cannot be deemed as negligence of petitioner herself in the case at bar. A notice to a lawyer who appears to have been unconscionably irresponsible cannot be considered as notice to his client.[7] Under the peculiar circumstances of this case, it appears from the records that counsel was negligent in not adequately protecting his clients interest, which necessarily calls for a liberal construction of the Rules. The rationale for this approach is explained in Ginete v. Court of Appeals - [8] This Court may suspend its own rules or exempt a particular case from its operation where the appellate court failed to obtain jurisdiction over the case owing to appellants failure to perfect an appeal. Hence, with more reason would this Court suspend its own rules in cases where the appellate court has already obtained jurisdiction over the appealed case. This prerogative to relax procedural rules of the most mandatory character in terms of compliance, such as the period to appeal has been invoked and granted in a considerable number of cases x x x x Let it be emphasized that the rules of procedure should be viewed as mere tools designed to facilitate the attainment of justice. Their strict and rigid application, which would result in technicalities that tend to frustrate rather than

promote substantial justice, must always be eschewed. Even the Rules of Court reflect this principle. The power to suspend or even disregard rules can be so pervasive and compelling as to alter even that which this Court itself has already declared to be final, as we are now constrained to do in the instant case x x x x The emerging trend in the rulings of this Court is to afford every party litigant the amplest opportunity for the proper and just determination of his cause, free from the constraints of technicalities. Time and again, this Court has consistently held that rules must not be applied rigidly so as not to override substantial justice. Aside from matters of life, liberty, honor or property which would warrant the suspension of the Rules of the most mandatory character and an examination and review by the appellate court of the lower courts findings of fact, the other elements that should be considered are the following: (a) the existence of special or compelling circumstances, (b) the merits of the case, (c) a cause not entirely attributable to the fault or negligence of the party favored by the suspension of the rules, (d) a lack of any showing that the review sought is merely frivolous and dilatory, and (e) the other party will not be unjustly prejudiced thereby.[9] The suspension of the Rules is warranted in this case since the procedural infirmity was not entirely attributable to the fault or negligence of petitioner. Besides, substantial justice requires that we go into the merits of the case to resolve the present controversy that was brought about by the absence of any partition agreement among the parties who were coowners of the subject lot in question. Hence, giving due course to the instant petition shall put an end to the dispute on the property held in common. In Peoples Homesite and Housing Corporation v. Tiongco[10] we held: There should be no dispute regarding the doctrine that normally notice to counsel is notice to parties, and that such doctrine has beneficent effects upon the prompt dispensation of justice. Its application to a given case, however, should be looked into and adopted, according to the surrounding circumstances; otherwise, in the courts desire to make a short-cut of the proceedings, it might foster, wittingly or unwittingly, dangerous collusions to the detriment of justice. It would then be easy for one lawyer to sell ones rights down the river, by just alleging that he just forgot every process of the court affecting his clients, because he was so busy. Under this circumstance, one should not insist that a notice to such irresponsible lawyer is also a notice to his clients. Thus, we now look into the merits of the petition. This case overlooks a basic yet significant principle of civil law: co-ownership. Throughout the proceedings from the MeTC to the Court of Appeals, the notion of coownership[11] was not sufficiently dealt with. We attempt to address this controversy in the interest of substantial justice. Certiorari should therefore be granted to cure this grave abuse of discretion. Sanchez Roman defines co-ownership as the right of common dominion which two or more persons have in a spiritual part of a thing, not materially or physically divided.[12] Manresa defines it as the manifestation of the private right of ownership, which instead of being exercised by the owner in an exclusive manner over the things subject to it, is exercised by two or more owners and the undivided thing or right to which it refers is one and the same.[13] The characteristics of co-ownership are: (a) plurality of subjects, who are the coowners, (b) unity of or material indivision, which means that there is a single object which is not materially divided, and which is the element which binds the subjects, and, (c) the

recognition of ideal shares, which determines the rights and obligations of the co-owners.[14] In co-ownership, the relationship of such co-owner to the other co-owners is fiduciary in character and attribute. Whether established by law or by agreement of the co-owners, the property or thing held pro-indiviso is impressed with a fiducial nature so that each co-owner becomes a trustee for the benefit of his co-owners and he may not do any act prejudicial to the interest of his co-owners.[15] Thus, the legal effect of an agreement to preserve the properties in co-ownership is to create an express trust among the heirs as co-owners of the properties. Co-ownership is a form of trust and every co-owner is a trustee for the others.[16] Before the partition of a land or thing held in common, no individual or co-owner can claim title to any definite portion thereof. All that the co-owner has is an ideal or abstract quota or proportionate share in the entire land or thing.[17] Article 493 of the Civil Code gives the owner of an undivided interest in the property the right to freely sell and dispose of it, i.e., his undivided interest. He may validly lease his undivided interest to a third party independently of the other co-owners.[18] But he has no right to sell or alienate a concrete, specific or determinate part of the thing owned in common because his right over the thing is represented by a quota or ideal portion without any physical adjudication.[19] Although assigned an aliquot but abstract part of the property, the metes and bounds of petitioners lot has not been designated. As she was not a party to the Deed of Absolute Sale voluntarily entered into by the other co-owners, her right to 1/6 of the property must be respected. Partition needs to be effected to protect her right to her definite share and determine the boundaries of her property. Such partition must be done without prejudice to the rights of private respondent Virginia Teria as buyer of the 5/6 portion of the lot under dispute. WHEREFORE, the Petition is GRANTED. The Decision of the Court of Appeals dated 23 May 2001 as well as its Resolution dated 8 January 2002 in CA-G.R. SP No. 59182 is ANNULLED and SET ASIDE. A survey of the questioned lot with TCT No. 289216 (formerly TCT No. 263624) by a duly licensed geodetic engineer and the PARTITION of the aforesaid lot are ORDERED. Let the records of this case be REMANDED to MeTC-Br. 49, Caloocan City to effect the aforementioned survey and partition, as well as segregate the 1/6 portion appertaining to petitioner Lilia Sanchez. The Deed of Absolute Sale by the other co-owners to Virginia Teria shall be RESPECTED insofar as the other undivided 5/6 portion of the property is concerned. SO ORDERED. CARMEN FANGONIL - HERRERA, Petitioner, - versus TOMAS FANGONIL, PURA FANGONIL TINO, MARINA FANGONIL, MARIANO FANGONIL, MILAGROS FANGONIL -LAYUG and VICTORIA FANGONIL ESTOQUE,[1] Respondents.

Property | Art. 484 to 493 | 8

In this instant Petition for Review under Rule 45 of the Revised Rules of Court, petitioner assails the (a) Decision issued by the Court of Appeals dated 30 January 2004 in CA-G.R. CV No. 61990, and (b) the Resolution of the same Court dated 15 July 2005 denying petitioners Motion for Reconsideration. Petitioner urges this Court to modify the assailed Decision of the Court of Appeals which affirmed the Decision dated 9 October 1998 of the Regional Trial Court (RTC) of Agoo, La Union, Branch 31 in Special Proceedings Case No. A806 for Judicial Partition. The petition prays that the two parcels of land, one located in Magsaysay, Tubao, La Union, more particularly described as: A parcel of rice land which the middle portion (15,364 sq. m) has been included and situated in Barrio Lloren, Tubao, La Union, declared under Tax Dec. Number 2889. Bounded on the North, by the property of Manuel Ordoa; on the East, by the property of Severino Padilla, Nicolas Caniero, and Heirs of V. Selga; on the South, by the properties of Manuel Ordoa and Francisco Padilla; and on the West, by a river; containing an area of more than two hectares; x x x.[2] and the other in San Nicholas East, Agoo, La Union, designated as: A parcel of unirrigated rice land without permanent improvements, situated in Barrio San Nicolas, Agoo, La Union with an area of 10,777 sq. m. (1 Ha. 1,777 sq. m.) more or less, visible by signs of pilapiles around its perimeter, assessed at P400.00, declared for tax purposes in my name under Tax Declaration Number 6373, and bounded-on the North, by Donato Eslao; on the East, by the Heirs of Flaviano Fangonil, and others; on the South, by Eulalio Fangonil; and on the West, by the heirs of Remgio Boado; x x x.[3] be adjudged solely to petitioner to the exclusion of respondents. In addition, petitioner requests that another parcel of land located in Poblacion, Tubao, La Union, be divided in accordance with the manner she proposes. The following are the antecedent facts: Petitioner and respondents[4] are children of the late Fabian Fangonil and Maria Lloren Fangonil[5] of Tubao, La Union. The Fangonil spouses had 7 children: Tomas, Pura, Marina, Mariano, Milagros, Sinforoso, and Carmen. Fabian died on 1 June 1953, while Maria Lloren died on February 1976. The spouses died intestate, leaving an estate consisting of 7 parcels of land herein specified: Parcel 1 a 1,800 square meter residential land located at Poblacion, Tubao, La Union, which is facing the Town Plaza; Parcel 2 a 922 square meter residential lot located at Barangay Sta. Barbara, Agoo, La Union; Parcel 3 a 54,759 square meter agricultural land located at Francia West, Tubao, La Union; Parcel 4 an 84,737 square meter agricultural land located at Francia West, Tubao, La Union; Parcel 5 a 5,821 square meter parcel of agricultural land located at Francia Sur, Tubao, La Union;

Parcel 6 a 17,958 square meter parcel of agricultural land located at Magsaysay, Tubao, La Union; Parcel 7 9,127 square meter parcel of agricultural land located at San Nicolas East, Agoo, La Union. The only remaining heirs are the 7 children. Prior to an extrajudicial settlement executed by the heirs in 1983, there was never any settlement of the estate. The parties do not dispute that the succeeding transactions involving parcels 6 and 7 took place. Fabian Fangonil, with the consent of Maria Lloren Fangonil, obtained a loan secured by a mortgage over a 15,364 square meter middle portion of the sixth parcel of land for P1,450.00, executed under a Deed of Mortgage[6] in favor of Francisca Saguitan on 20 April 1949. A portion of the sixth parcel, with an area of 4,375 square meters, was sold with a right to repurchase to a certain Constantino Oribello for P1,450.00 on 15 December 1953. The transaction was under an agreement designated as a Deed of Pacto de Retro Sale[7] between Maria Lloren Fangonil, who was a widow by then, and Constantino Oribello. On the other hand, the seventh parcel of land was sold, with a right to repurchase, by Fabian Fangonil to Quirino Estacio under an agreement denominated as Deed of Sale with Pacto de Retro[8] on 12 December 1949 for P2,600.00. The total amount received by the Fangonil spouses for the properties was P5,500.00. The parcels above-mentioned were never repurchased or redeemed by the Fangonil spouses. Prior to foreclosure, the portion of the sixth parcel covered by a Deed of Mortgage was released from the mortgage on 20 April 1956 upon petitioners payment of P1,950.00 to Francisca Suguitan. The portion of the sixth parcel covered by the Deed of Pacto de Retro Sale was repurchased on 16 October 1956 upon petitioners payment of P1,550.00 to Constantino Oribello. On the other hand, the seventh parcel subject of the Deed of Sale with Pacto de Retro was repurchased by petitioner on 13 November 1959 upon the payment of P2,600.00 to Quirino Estacio. Petitioner paid the total amount of P6,100.00 for the redemption of parcels 6 and 7. On 14 November 1983, the parties executed an Extrajudicial Settlement and Partial Partition of the estate of the Fangonil spouses covering the seven parcels of land. Although petitioner signed the extrajudicial settlement, she refused to accede to the proposed manner of partition of parcel 1. Thereafter, all the heirs concerned, except petitioner, executed a joint affidavit dated 19 December 1994, stipulating on the partition of parcel 1. On 2 February 1995 or 11 years after the execution of the extrajudicial settlement, petitioner executed an affidavit[9] refuting the portions pertaining to parcels 6 and 7, on the ground that her late brother Sinforoso Fangonil who was a Regional Trial Court (RTC) Judge then, committed misrepresentation and convinced her to sign the said settlement. On 1 March 1995, six of the seven children of the Fangonil spouses, excluding herein petitioner, filed with the RTC a petition for judicial partition of the seven parcels of land, with prayer for appointment of Marina Fangonil as administratrix. The case was docketed as Special Proceedings Case No. A-806. Petitioner intervened before the trial court to oppose the petition. She likewise prayed that she be appointed administratrix, claiming exclusive ownership over parcels 6 and 7. The parties agreed to submit the case for decision based on the pleadings, considering there was no disagreement as to the manner of sharing Parcels 2, 3, 4, and 5 of the estate. In addition, on 16 September 1996, the respondent heirs deposited in court P7,453.00[10] as payment to petitioner and her brother Tomas Fangonil as the only outstanding debtors of the estate as specified in the 14 November 1983 extrajudicial settlement. On 2 September 1998, respondents, through counsel, submitted a Manifestation/Motion dated 31

August 1998, proposing a manner of computation for repayment to petitioner, the pertinent portions of which read: 3. That the currency rate of the Philippine Peso to the U.S. Dollar on November 13, 1959 is P3.90 to U.S. $1.00; 4. That the currency rate of the Philippine Peso to the U.S. Dollar as of this date August 31, 1998 is P42.00 to U.S. $1.00; 5. So that the amount of indebtedness of P6,100.00 on November 13, 1959 has now the equivalent of P65,790.00 as of 31 August 1998; 5.1 The equivalent amount of P65,790.00 shall be proportionately paid by all the heirs with each and every heir having a share in said indebtedness in the amount of P9,398.57;[11] On 7 October 1998, the RTC issued an Order generally approving the manifestation/motion except for the computation, modifying the amount to P138,100.00 as the present equivalent of the amount of P6,100.00 previously paid by petitioner to redeem parcels 6 and 7. In its Decision[12] dated 9 October 1998, the RTC ruled in favor of respondents herein and declared parcels 6 and 7 as part of the estate of the spouses Fangonil to be partitioned and ordered the partition of parcel 1 based on the manner proposed by respondents. It ordered the payment of the estate debt to petitioner and her brother in the amount of P138,100.00, the money equivalent of the P6,100.00 paid by her at the time of redemption of parcels 6 and 7. The dispositive portion of the decision reads: WHEREFORE, upon the foregoing premises, this court hereby adjudicates and partitions the inherited properties, including the controversial parcels 6 and 7, in accordance with the following: FIRST PARCEL xxxx This is divided into two (2) segments, the Eastern Portion and Western Portion. The Eastern Portion shall belong to three (3) heirs, namely Tomas Fangonil, Sinforoso Fangonil represented by Victoria Estoque and Marina Fangonil. The Western Portion shall belong to two (2) heirs, the Southwestern part belongs to Pura F. Tino and the Northwestern part belongs to Carmen Fangonil Herrera x x x. SECOND PARCEL xxxx This parcel goes to Mariano Fangonil and Milagros Fangonil Layug. THIRD PARCEL xxxx A drawing of lots was conducted on April 25, 1997 with respect to parcel 3. Parcel 3 was divided into seven by Geodetic Engineer Gerardo Dacayanan. The result was the following (see also, Order dated April 25, 1997, page 166, Record of the case):
Property | Art. 484 to 493 | 9

Lot 1 (A) Milagros F. Layug Lot 2 (B) Tomas Fangonil Lot 3 (C) Mariano Fangonil Lot 4 (D) Pura F. Tino Lot 5 (E) Sinforoso Fangonil Lot 6 (F) Carmen F. Herrera Lot 7 (G) Marina Fangonil xxxx FOURTH PARCEL xxxx The same thing happened. There was a drawing of lots. The result was the following: Lot 1 (A) Marina Fangonil Lot 2 (B) Carmen F. Herrera Lot 3 (C) Tomas Fangonil Lot 4 (D) Sinforoso Fangonil Lot 5 (E) Milagros F. Layug Lot 6 (F) Pura F. Tino Lot 7 (G) Mariano Fangonil xxxx FIFTH PARCEL xxxx On May 2, 1997, the drawing of lots on Parcel 5 was conducted. The result was as follows: Lot 1 Pura F. Tino Lot 2 Marina Fangonil Lot 3 Milagros F. Layug Lot 4 Sinforoso Fangonil Lot 5 Carmen F. Herrera Lot 6 Mariano Fangonil Lot 7 Tomas Fangonil SIXTH PARCEL xxxx On August 27, 1998, the drawing of lots was conducted with respect to the controversial parcels, the SIXTH PARCEL and the SEVENTH PARCEL. The result on the sixth parcel was as follows: Lot 1 Pura F. Tino Lot 2 Sinforoso Fangonil Lot 3 Tomas Fangonil Lot 4 Marina Fangonil Lot 5 Carmen F. Herrera (boycotted the draw) Lot 6 Mariano Fangonil Lot 7 Milagros F. Layug xxxx SEVENTH PARCEL

xxxx The draw was made on the same day, August 27, 1998. Just like in the drawing of lots for the Sixth Parcel, Carmen F. Herrera boycotted the draw. Hence, the Court ruled that since there are seven rolled papers for the seven heirs to draw, the last undrawn rolled-paper containing the lot number shall be for Carmen Herrera. The result for the draw for the SEVENTH PARCEL was as follows: Lot 1 Carmen Herrera Lot 2 Tomas Fangonil Lot 3 Milagros F. Layug Lot 4 Marina Fangonil Lot 5 Sinforoso Fangonil Lot 6 Mariano Fangonil Lot 7 Pura F. Tino It should be noted that after the draws on August 27, 1998, Atty. Baltazar, counsel for [respondents], manifested that he will file a motion as regards the accounting of the produce of the sixth and seventh parcels. However, what he filed was the Manifestation/Motion dated August 31, 1998. The six heirs (excluding Carmen F. Herrera) shall reimburse the amount of P138,100.00, each one contributing the amount of P19,728.57, to Carmen F. Herrera. Since the other six heirs did not insist on the accounting of the produce with respect to parcels 6 and 7, Carmen F. Herrera does not have to render an accounting. As a matter of fact, this Court, in its Order dated October 7, 1998, considered the produce of the said two (2) parcels, which she appropriated from the 50s to the present as interest on her money.[13] Petitioner appealed the above RTC Decision to the Court of Appeals, alleging the unfair and prejudicial manner of partition of parcel 1 and claiming exclusive ownership over parcels 6 and 7. The Court of Appeals denied the appeal in its Decision promulgated 30 January 2004, the dispositive portion of which reads: WHEREFORE, the October 9, 1998 Decision of the Regional Trial Court of Agoo, La Union, Branch 31, in Special Proceeding Case No. A-806, is AFFIRMED in toto.[14] Under said decision, the Court of Appeals affirmed in toto the findings of the trial court, pronouncing that petitioner failed to adduce any evidence that would support her claim that the distribution was not equal and prejudicial to her interest. It concurred with the trial court in concluding that, at the most, she is only entitled to the reimbursement of the amount she spent for redemption of the questioned lots in an amount equivalent to what her money commanded then, stating that petitioner is simply holding the said property in trust for the other co-heirs. At the same time, it upheld the trial courts finding on the equivalent of the money which petitioner paid to redeem and repurchase parcels 6 and 7, but the dispositive portion merely indicated the amount of P130,100.00. Petitioner filed a Motion for Reconsideration of the 30 January 2004 Decision which the Court of Appeals denied in a Resolution dated 15 July 2005. Dissatisfied with the final resolution of the Court of Appeals on the matter, petitioner now comes before this Court

via a Petition for Review under Rule 45 of the Revised Rules of Court. Petitioner insists she is the exclusive owner of parcels 6 and 7 and rejects the partition of parcel 1 as being unequal and prejudicial, raising the following issues: I. THE RESPONDENT COURT GRAVELY ERRED IN SUSTAINING THE MANNER IN WHICH PARCEL 1 IS TO BE PARTITIONED BASED ON THE PRIVATE RESPONDENTS POSITION WHICH IS CLEARLY UNEVEN AND UNFAIR TO THE PETITIONER WHOSE SHARE WILL THEN BE FOUND AT THE REAR PORTION OF THE SAID LOT. II. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING THAT PARCELS 6 AND 7 SHALL BE OWNED SOLELY AND EXCLUSIVELY BY THE PETITIONER BEING THE ONLY ONE WHO REDEEMED AND REPURCHASED SAID PARCELS IN THE 1950S EVEN WHILE THE PARENTS OF THE PARTIES WERE STILL ALIVE. III. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING THAT THE PRIVATE RESPONDENTS RIGHT TO CLAIM A SHARE IN PARCELS 6 AND 7 HAD LONG PRESCRIBED AS A RESULT OF THEIR INACTION FOR MORE THAN FORTY (40) YEARS WHERE THEY ALLOWED THE PETITIONER TO EXERCISE FULL OWNERSHIP OVER SAID PARCELS, EVEN ASSUMING WITHOUT ADMITTING THAT AT FIRST, THEY HAVE THE RIGHT TO REDEEM THE SAID PARCELS. IV. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT HOLDING THAT THE PRIVATE RESPONDE NTS RIGHT TO CLAIM A SHARE IN PARCELS 6 AND 7 HAD LONG BEEN BARRED BY LACHES AS A RESULT OF THEIR INACTION FOR MORE THAN FORTY (40) YEARS WHERE THEY ALLOWED THE PETITIONER [TO] EXERCISE FULL OWNERSHIP OVER SAID PARCELS, EVEN ASSUMING WITHOUT ADMITTING THAT AT FIRST, THEY HAVE THE RIGHT TO REDEEM THE SAID PARCELS. V. THE TRIAL COURT GRAVELY ERRED IN HOLDING THAT THE MONEY EQUIVALENT OF THE MONEY OF THE OPPOSITORAPPELLANT WHICH SHE USED TO REPURCHASE AND REDEEM PARCELS 6 AND 7 IN THE 1950S WOULD ONLY BE P138,100.00 IN TODAYS MONEY, EVEN ASSUMING WITHOUT ADMITTING THAT THE SAID PARCELS COULD BE REDEEMED BY THE ESTATE OF FABIAN AND MARIA LLOREN.[15]
Property | Art. 484 to 493 | 10

court; and (b) whether or not the respondent court gravely erred in not finding that exclusive ownership of the properties in question has been vested in petitioner. Petitioners arguments are fallacious. With respect to procedural matters, respondents argue that the petition is a combination of an appeal via a petition for review on certiorari under Rule 45 and an independent civil action of certiorari under Rule 65 of the Revised Rules of Court. This is based on the observation that petitioner impleaded the Court of Appeals as one of the respondents while at the same time raising issues of fact alone. Respondents posit that these are indicative of an intention to categorize the petition to be under both Rules 65 and 45 of the Rules of Court and should be dismissed outright. Although petitioner erroneously impleaded the Court of Appeals as one of the respondents, petitioner clearly and rightly invoked Rule 45 of the Revised Rules of Court as the remedy availed of. As we held in National Irrigation Administration v. Court of Appeals,[16] the appeal from a final disposition of the Court of Appeals is a petition for review under Rule 45 and not a special civil action under Rule 65 of the Revised Rules of Court. Under Rule 45 of the Revised Rules of Court, decisions, final orders or resolutions of the Court of Appeals, regardless of the nature of the action or proceedings involved, may be appealed to us by filing a petition for review, which would be but a continuation of the appellate process over the original case.[17] The correct procedure is not to implead the Court of Appeals. This Court has ruled in several instances that where the Court of Appeals is impleaded as respondent in the Petition for Review, and the petition clearly invokes Rule 45, the Court of Appeals is merely omitted from the title of the case pursuant to Sec. 4(a) of Rule 45 of the Revised Rules of Court.[18] The Court of Appeals is herein omitted from the title of the case, as a liberal interpretation of the rules on technicality, in pursuit of the ends of justice and equity.[19] We now discuss respondents contention that only factual issues have been brought to this Court. Under Section 1, Rule 45, providing for appeals by certiorari before the Supreme Court, it is clearly enunciated that only questions of law may be set forth.[20] Questions of fact may not be raised unless the case falls under any of the following exceptions[21]: (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 petitioners 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. In this particular instance, we are clearly faced with issues of fact. A question of fact is involved when the doubt or difference arises as to the truth or falsehood of alleged facts or when the query necessarily invites calibration of the whole evidence, considering mainly the credibility of witnesses, existence and relevance of specific surrounding circumstances, their relation to each other and to the whole, and the probabilities of the situation.[22] We find that the only questions to be resolved are the following: (a) whether or not the respondent court gravely erred in affirming the partition of parcel 1 in accordance with the findings of the trial In the exercise of the Supreme Courts power of review, this Court is not a trier of facts, and unless there are excepting circumstances, it does not routinely undertake the reexamination of the evidence presented by the contending parties during the trial of the case.[23] Factual matters are beyond the jurisdiction of this Court.[24] In petitions for review on certiorari under Rule 45 of the Revised Rules of Court, this Court is limited to reviewing only errors of law, not of fact, unless the factual findings complained of are devoid of support by the evidence on record or the assailed judgment is based on a misapprehension of facts. As held in Philippine Airlines, Inc. v. Court of Appeals,[25] factual findings of the Court of Appeals are conclusive[26] on the parties and carry even more weight when the said court affirms the factual findings of the trial court.[27] Absent any palpable error or arbitrariness, the findings of fact of the lower court are conclusive. On this ground alone, the appeal warrants a dismissal. Setting aside the procedural defects, the appeal must fail based on the merits. Upon perusal of the records of the case, it is evident to this Court that no cogent reason exists to disturb the decision of the Court of Appeals. Petitioner contends that the manner of partition of parcel 1 by the RTC, as affirmed by the Court of Appeals, is unfair and prejudicial to her interest. However, she was not able to adduce substantial evidence aliunde to support her allegations. Respondents stress that the Fangonil spouses appropriated portions of Parcel 1 to Carmen, Pura, Tomas, Marina, and Sinforoso, by pointing out specific areas pertaining to each. Carmen, Tomas, and Marina built their houses on parcel 1. Prior to the order of partition, an ocular inspection of parcel 1 was conducted by the RTC to determine which manner of partition it would approve. During said ocular inspection, however, the RTC saw existing structures upon which the homes of Carmen, Tomas, Marina, and a store of Carmen were situated. The arrangement was allegedly based on their oral agreement. This same arrangement allotting an equal area of 362 square meters to each of the heirs was made the basis of the manner of partition proposed by respondents and later on approved by both the RTC and Court of Appeals. Anent the rights of the parties pertaining to parcels 6 and 7, petitioner insists that her act of paying for the repurchase and release from mortgage of parcels 6 and 7 was on the understanding with her parents that she would thereafter be the owner thereof. She asserts that her exercise of acts of ownership over parcels 6 and 7, to the exclusion of her parents and siblings, reveals she is the exclusive owner of these lots. She cites several circumstances in support of her contention that respondents never considered parcels 6 and 7 part of the estate of their parents and are not co-owners thereof. First, petitioner presented real estate tax receipts indicating that she had been the one paying for the realty taxes of the property. Secondly, petitioner asserts she has been the only one hiring tenants for and benefiting from the produce of parcels 6 and 7. Lastly, the non-attempt of respondents to partition parcels 6 and 7 within 10 years from the death of the Fangonil spouses, as well as to reimburse her if indeed such was the agreement, demonstrates that they never considered the said parcels part of the estate of their parents. After a thorough examination of the cases cited by petitioner and a painstaking review of the case records, this Court cannot give credence to petitioners stance. The scales of justice overwhelmingly tilt in favor of respondents and against petitioners assertion that exclusive ownership of parcels 6 and 7 has vested in her. The fact that it was petitioners money that was used for the repurchase of the properties does not make her the owner thereof, in the absence of convincing proof that would indicate such. This is more so if other evidence was adduced to show such is not the case. Neither will petitioners exercise of acts of ownership over the properties bring us to that conclusion. It is evident that petitioner was allowed to maintain possession and enjoy the fruits of the property only by the mere tolerance of the other co-owners.[28] Moreover, although we recognize that real estate tax receipts indicating payment of realty tax and possession of the parcels are indicia of ownership, such

are not conclusive proof of ownership, in the presence of other circumstances and evidence showing otherwise.[29] As a matter of fact, although the receipts indicate that the real estate tax payments for parcels 6 and 7 for the years following their repurchase and release were made by petitioner, the receipts also state that the declared owner of the properties is still the decedent Fabian Fangonil. Petitioner and respondents executed an extrajudicial settlement dated 14 November 1983, wherein it was stipulated that the Fangonil spouses died intestate, leaving 7 parcels of land in their names. Parcels 6 and 7 were included. It further stipulated that petitioner and her brother Tomas (now deceased) are the only creditors of the estate, categorically stating petitioner is a creditor of the estate in the amount of P8,700.00. This amount represents what was paid for by her for the repurchase and release from the mortgage lien of parcels 6 and 7 in the 1950s. Pertinent records of the case reveal that the amount actually advanced for the repurchase was P6,100.00. The aforementioned extrajudicial settlement, which was later on submitted to the RTC for consideration in the judicial partition, taken together with petitioners comment[30] in the same proceedings, are clear and categorical evidences that the transaction between petitioner and her parents was a mere loan. Under this extrajudicial settlement, respondents and petitioner included parcels 6 and 7 as part of the estate of their deceased parents. It is particularly stated therein that petitioner and her brother Tomas are the only creditors of the estate. Although petitioners comment allegedly maintained her claims on parcels 6 and 7, she categorically admitted therein that the amount totaling P8,700.00 referred to in the extrajudicial settlement represents the personal money she used for the redemption of parcels 6 and 7. Thus, petitioner is a mere creditor of the estate and not an owner of parcels 6 and 7. An admission, verbal or written, made by a party in the course of the proceedings in the same case, does not require proof. The admission may be contradicted only by showing that it was made through palpable mistake, or that no such admission was made.[31] We find that petitioners affidavit retracting her acquiescence to the stipulation on parcels 6 and 7 in the extrajudicial settlement deserves scant consideration for being self-serving. Absent positive proof that the earlier statements made by petitioner resulted from palpable mistake, retractions thereof, especially if unsupported by evidence, lack credence.[32] As to the issue of prescription, petitioners possession of parcels 6 and 7 did not ripen into sole and exclusive ownership thereof. First, prescription applies to adverse, open, continuous, and exclusive possession. In order that a co-owners possession may be deemed adverse to the other co-owners, the following elements[33] must concur: (1) that he has performed unequivocal acts of repudiation amounting to an ouster of the other co-owners; (2) that such positive acts of repudiation have been made known to the other co-owners; and (3) that the evidence thereon must be clear and convincing. Clearly, petitioner cannot claim adverse possession in the concept of an owner where she voluntarily executed documents stating that she was a mere creditor and/or co-owner. Mere silent possession by a co-owner; his receipt of rents, fruits or profits from the property; his erection of buildings and fences and the planting of trees thereon; and the payment of land taxes cannot serve as proofs of exclusive ownership, if it is not borne out by clear and convincing evidence that he exercised acts of possession which unequivocably constituted an ouster or deprivation of the rights of the other co-owners.[34] In this case, we find that petitioner effected no clear and evident repudiation of the co-ownership. Petitioners only act of repudiation of the co-ownership was when she refused to honor the extrajudicial settlement in 1994. Alternatively, possession by a co-owner is like that of a trustee and shall not be regarded as adverse to the other co-owners, but in fact as beneficial to all of them.[35] A co-ownership is a form of trust, with each owner being a trustee for each other.[36] Mere actual possession by one will not give rise to the inference that the possession was adverse because a co-owner is, after all, entitled to possession of the property.[37] Thus, as a rule, prescription does not run in favor of a co-heir or co-owner as long as he expressly or impliedly recognizes the co-ownership; and he cannot acquire by prescription the share of the other co-owners, absent a clear repudiation of the coProperty | Art. 484 to 493 | 11

ownership.[38] An action to demand partition among co-owners is imprescriptible, and each co-owner may demand at any time the partition of the common property.[39] On the matter of laches, we find no sufficient cause to apply the principle of laches, it being a principle grounded on equity. Laches is the failure or neglect, for an unreasonable and unexplained length of time, to do that which, by exercising due diligence, could or should have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting the presumption that the party entitled to assert it either has abandoned or declined to assert it.[40] Several circumstances must be present. First, there should exist conduct on the part of the defendant or one under whom he claims, giving rise to the situation of which complaint is made and for which the complainant seeks a remedy. Second, there is delay in asserting the complainants right, the complainant having had knowledge or notice of defendants conduct and having been afforded an opportunity to institute a suit. Third, defendant had no knowledge or notice that the complainant would assert the right on which he bases his claim. Fourth, the defendant will suffer injury or prejudice in the event relief is accorded the complainant, or the suit is not held barred. Petitioner failed to prove the presence of all four established requisites of laches. Moreover, there is no absolute rule as to what constitutes laches or staleness of demand; each case is to be determined according to its particular circumstances, with the question of laches addressed to the sound discretion of the court.[41] Because laches is an equitable doctrine, its application is controlled by equitable considerations and should not be used to defeat justice or to perpetuate fraud or injustice.[42] Regarding the issue on the computation of the money to be paid to petitioner as reimbursement for the amount she advanced to repurchase and release parcels 6 and 7 from the mortgage debt, the Court of Appeals adopted the amount as computed by the RTC based on the present peso money equivalent.[43] There is a discrepancy between the amount of indebtedness as quoted by the Court of Appeals from the RTC decision and the amount cited by the Court of Appeals in the latter part of its decision. However, the amount stated in the paragraph before the dispositive portion was P130,100.00, without any other indication that it intended to modify the amount determined by the RTC while the body of the Court of Appeals decision quoting the RTC decision indicated the amount of indebtedness as P138,100.00. There was obviously a typographical error, with the body of the decision stating that the Court of Appeals was affirming the RTCs manner of computation totaling P138,100.00. Moreover, in the body and dispositive portion, the Court of Appeals upheld the RTCs decision in toto. Even then, the amount found by the RTC on the basis of the formula it used in the Order dated 7 October 1998 was erroneous.[44] Still applying the present peso-dollar exchange rate, a slight modification in the computation is hereby ordered. The present peso equivalent of the P6,100.00 indebtedness incurred on 13 November 1959 by the Fangonil spouses and payable to petitioner should be computed based on the following figures: The currency exchange rate of the Philippine Peso to the United States Dollar in the 1950s, which is P2.00:$1.00; Currency exchange rate of the Philippine Peso to the United States Dollar as of the date of finality of this judgment. Therefore, the present peso money equivalent of the P6,100.00 should be derived from the succeeding formula: [(Current exchange rate of the Philippine Peso to the United States Dollar as of the date of finality of this judgment divided by the exchange rate in the 1950s)] multiplied by P6,100.00 WHEREFORE, premises considered, the instant Petition for Review is DENIED. The (a) Decision issued by the Court of Appeals dated 30 January 2004 and (b) its Resolution dated 15 July 2005 denying petitioners Motion for Reconsideration dated 23 February 2004 are hereby AFFIRMED, with MODIFICATION as to the amount to be reimbursed to petitioner. The present peso equivalent of the P6,100.00 indebtedness is hereby ordered reimbursed to petitioner which amount shall be computed based on current peso-dollar exchange rates at the time of finality of judgment, applying the formula below: [(Current exchange rate of the Philippine Peso to the United States Dollar as of the date of finality of this judgment divided by the exchange rate in the 1950s)] multiplied by P6,100.00 The equivalent amount shall be proportionately paid by all the heirs with each and every heir having a share in the said indebtedness. No Costs. SO ORDERED.

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.
Property | Art. 484 to 493 | 12

CELESTINO BALUS, Petitioner,

- versus -

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:

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. the CA. Aggrieved by the Decision of the RTC, herein respondents filed an appeal with

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]

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 partylitigants 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.

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 coownership 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.

SPOUSES ROMAN A. PASCUAL and MERCEDITA R. PASCUAL, FRANCISCO A. PASCUAL, MARGARITA CORAZON D. MARIANO, EDWIN D. MARIANO and DANNY R. MARIANO Petitioners, - versus SPOUSES ANTONIO BALLESTEROS and LORENZA MELCHOR-BALLESTEROS, Respondents.

Absurd and illogical interpretations should also be avoided.[19] RESOLUTION REYES, J.: This is a petition for review on certiorari under Rule 45 of the Rules of Court filed by the spouses Roman A. Pascual and Mercedita R. Pascual (Spouses Pascual), Francisco A. Pascual (Francisco), Margarita Corazon D. Mariano (Margarita), Edwin D. Mariano and
Property | Art. 484 to 493 | 13

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.

Danny R. Mariano (petitioners) assailing the Decision[1] dated July 29, 2008 and Resolution[2] dated January 30, 2009 issued by the Court of Appeals (CA) in CA-G.R. CV No. 89111. The instant case involves a 1,539 square meter parcel of land (subject property) situated in Barangay Sta. Maria, Laoag City and covered by Transfer Certificate of Title (TCT) No. T-30375[3] of the Laoag City registry. The subject property is owned by the following persons, with the extent of their respective shares over the same: (1) the spouses Albino and Margarita Corazon Mariano, 330 square meters; (2) Angela Melchor (Angela), 466.5 square meters; and (3) the spouses Melecio and Victoria Melchor (Spouses Melchor), 796.5 square meters. Upon the death of the Spouses Melchor, their share in the subject property was inherited by their daughter Lorenza Melchor Ballesteros (Lorenza). Subsequently, Lorenza and her husband Antonio Ballesteros (respondents) acquired the share of Angela in the subject property by virtue of an Affidavit of Extrajudicial Settlement with Absolute Sale[4] dated October 1, 1986. On August 11, 2000, Margarita, then already widowed, together with her children, sold their share in the subject property to Spouses Pascual and Francisco. [5] Subsequently, Spouses Pascual and Francisco caused the cancellation of TCT No. 30375 and, thus, TCT No. T-32522[6] was then issued in their names together with Angela and Spouses Melchor. Consequently, the respondents, claiming that they did not receive any written notice of the said sale in favor of Spouses Pascual and Francisco, filed with the Regional Trial Court (RTC) of Laoag City a Complaint[7] for legal redemption against the petitioners. The respondents claimed that they are entitled to redeem the portion of the subject property sold to Spouses Pascual and Francisco being co-owners of the same. For their part, the petitioners claimed that there was no co-ownership over the subject property considering that the shares of the registered owners thereof had been particularized, specified and subdivided and, hence, the respondents has no right to redeem the portion of the subject property that was sold to them.[8] On January 31, 2007, the RTC rendered a decision[9] dismissing the complaint for legal redemption filed by the respondents. In disposing of the said complaint, the RTC summed up the issues raised therein as follows: (1) whether the respondents herein and the predecessors-in-interest of the petitioners are co-owners of the subject property who have the right of redemption under Article 1620 of the Civil Code; and (2) if so, whether that right was seasonably exercised by the respondents within the 30-day redemption period under Article 1623 of the Civil Code. On the first issue, the RTC held that the respondents and the predecessors-ininterest of the petitioners are co-owners of the subject property considering that the petitioners failed to adduce any evidence showing that the respective shares of each of the registered owners thereof were indeed particularized, specified and subdivided. On the second issue, the RTC ruled that the respondents failed to seasonably exercise their right of redemption within the 30-day period pursuant to Article 1623 of the Civil Code. Notwithstanding the lack of a written notice of the sale of a portion of the subject property to Spouses Pascual and Francisco, the RTC asserted that the respondents had actual notice of the said sale. Failing to exercise their right of redemption within 30 days from actual notice of the said sale, the RTC opined that the respondents can no longer seek for the redemption of the property as against the petitioners. Thereupon, the respondents appealed from the January 31, 2007 decision of the RTC of Laoag City with the CA. On July 29, 2008, the CA rendered the herein assailed Decision[10] the decretal portion of which reads:

WHEREFORE, the appeal is GRANTED and the appealed January 31, 2007 Decision is, accordingly, REVERSED and SET ASIDE. In lieu thereof, another is entered approving [respondents] legal redemption of the portion in litigation. The rest of their monetary claims are, however, DENIED for lack of factual and/or legal bases. SO ORDERED.[11] In allowing the respondents to exercise their right of redemption, the CA held that the 30-day period within which to exercise the said right had not yet lapsed considering the absence of a written notice of the said sale. Thus, the CA stated that [t]he mandatory nature of the written notice requirement is such that, notwithstanding the actual knowledge of the sale, written notice from the seller is still necessary in order to remove all uncertainties about the sale, its terms and conditions, as well as its efficacy and status.[12] The petitioners sought for a reconsideration of the said July 29, 2008 Decision, but it was denied by the CA in its Resolution[13] dated January 30, 2009. Undaunted, the petitioners instituted the instant petition for review on certiorari before this Court essentially asserting the following arguments: (1) their predecessors-ininterest and the respondents are not co-owners of the subject property since their respective shares therein had already been particularized, specified and subdivided; and (2) even if such co-ownership exists, the respondents could no longer exercise their right of redemption having failed to exercise the same within 30 days from actual knowledge of the said sale. The petition is denied. Primarily, Section 1, Rule 45 of the Rules of Court categorically states that the petition filed shall raise only questions of law, which must be distinctly set forth. A question of law arises when there is doubt as to what the law is on a certain state of facts, while there is a question of fact when the doubt arises as to the truth or falsity of the alleged facts. For a question to be one of law, the same must not involve an examination of the probative value of the evidence presented by the litigants or any of them. The resolution of the issue must rest solely on what the law provides on the given set of circumstances. Once it is clear that the issue invites a review of the evidence presented, the question posed is one of fact.[14] The first issue raised by the petitioners is a factual question as it entails a determination of whether the subject property was indeed co-owned by the respondents and the predecessors-in-interest of the petitioners. Such determination would inevitably necessitate a review of the probative value of the evidence adduced in the case below. In any case, it ought to be stressed that both the RTC and the CA found that the subject property was indeed co-owned by the respondents and the predecessors-in-interest of the petitioners. Thus, in the absence of any exceptional circumstances to warrant the contrary, this Court must abide by the prevailing rule that findings of fact of the trial court, more so when affirmed by the CA, are binding and conclusive upon it.[15] Anent the second issue asserted by the petitioners, we find no reversible error on the part of the CA in ruling that the 30-day period given to the respondents within which to exercise their right of redemption has not commenced in view of the absence of a written notice. Verily, despite the respondents actual knowledge of the sale to the respondents, a written notice is still mandatory and indispensable for purposes of the commencement of the 30-day period within which to exercise the right of redemption.

Article 1623 of the Civil Code succinctly provides that: Article 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. (emphasis supplied) The indispensability of the written notice requirement for purposes of the exercise of the right of redemption was explained by this Court in Barcellano v. Baas,[16] thus: Nothing in the records and pleadings submitted by the parties shows that there was a written notice sent to the respondents. Without a written notice, the period of thirty days within which the right of legal pre-emption may be exercised, does not start. The indispensability of a written notice had long been discussed in the early case of Conejero v. Court of Appeals, penned by Justice J.B.L. Reyes: With regard to the written notice, we agree with petitioners that such notice is indispensable, and that, in view of the terms in which Article of the Philippine Civil Code is couched, mere knowledge of the sale, acquired in some other manner by the redemptioner, does not satisfy the statute. The written notice was obviously exacted by the Code to remove all uncertainty as to the sale, its terms and its validity, and to quiet any doubts that the alienation is not definitive. The statute not having provided for any alternative, the method of notification prescribed remains exclusive. This is the same ruling in Verdad v. Court of Appeals: The written notice of sale is mandatory. This Court has long established the rule that notwithstanding actual knowledge of a co-owner, the latter is still entitled to a written notice from the selling co-owner in order to remove all uncertainties about the sale, its terms and conditions, as well as its efficacy and status. Lately, in Gosiengfiao Guillen v. The Court of Appeals, this Court again emphasized the mandatory character of a written notice in legal redemption:

Property | Art. 484 to 493 | 14

From these premises, we ruled that [P]etitioner-heirs 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. These premises and conclusion leave no doubt about the thrust of Mariano: The right of the petitionerheirs to exercise their right of legal redemption exists, and the running of the period for its exercise has not even been triggered because they have not been notified in writing of the fact of sale. xxxx Justice Edgardo Paras, referring to the origins of the requirement, would explain in his commentaries on the New Civil Code that despite actual knowledge, the person having the right to redeem is STILL entitled to the written notice. Both the letter and the spirit of the New Civil Code argue against any attempt to widen the scope of the written notice by including therein any other kind of notice such as an oral one, or by registration. If the intent of the law has been to include verbal notice or any other means of information as sufficient to give the effect of this notice, there would have been no necessity or reason to specify in the article that said notice be in writing, for under the old law, a verbal notice or mere information was already deemed sufficient. Time and time again, it has been repeatedly declared by this Court that where the law speaks in clear and categorical language, there is no room for interpretation. There is only room for application. Where the language of a statute is clear and unambiguous, the law is applied according to its express terms, and interpretation should be resorted to only where a literal interpretation would be either impossible or absurd or would lead to an injustice. x x x (citations omitted) Here, it is undisputed that the respondents did not receive a written notice of the sale in favor of the petitioners. Accordingly, the 30-day period stated under Article 1623 of the Civil Code within which to exercise their right of redemption has not begun to run. Consequently, the respondents may still redeem from the petitioners the portion of the subject property that was sold to the latter.

Art. 485 G.R. No. L-46364 April 6, 1990 SULPICIA JIMENEZ, ET AL. vs. VICENTE FERNANDEZ, ET AL.

3. ID.; ID.; ID.; ID.; NO RIGHT TO TRANSFER THE SUBJECT PROPERTY IN THE ABSENCE OF VOLUNTARY CONVEYANCE BY DECEDENT. Melecia Cayabyab in the absence of any voluntary conveyance to her by Carlos Jimenez or Sulpicia Jimenez of the litigated portion of the land could not even legally transfer the parcel of land to Edilberto Cagampan who accordingly, could not also legally transfer the same to herein private respondents. 4. ID.; ACQUISITIVE PRESCRIPTION, NOT APPLICABLE TO LAND REGISTERED UNDER TORRENS SYSTEM. The respondent court relying on the Arcuino case, concluded that respondents had acquired the property under litigation by prescription. We cannot agree with such conclusion, because there is one very marked and important difference between the case at bar and that of the Arcuino case, and that is, that since 1933 petitioner Sulpicia Jimenez was a title holder, the property then being registered in her and her uncle Carlos Jimenez' name. In the Arcuino case, this Supreme Court held. "(I)t is true that lands registered under the Torren's System may not be acquired by prescription but plaintiffs herein are not the registered owners." (Rollo, p. 38) Even in the said case the principle of imprescriptibility of Torrens Titles was respected. Melecia Cayabyab's possession or of her predecessors-in-interest would be unavailing against the petitioner Sulpicia Jimenez who was the holder pro-indiviso with Carlos Jimenez of the Torrens Certificate of Title covering a tract of land which includes the portion now in question, from February 28, 1933, when the Original Certificate of Title No. 50 933 (Exhibit 8) was issued. "No possession by any person of any portion of the land covered by said original certificate of titles, could defeat the title of the registered owner of the land covered by the certificate of title." (Benin v. Tuason, L-26127, June 28, 1974, 57 SCRA 531) Sulpicia's title over her one-half undivided property remained good and continued to be good when she segregated it into a new title (T.C.T No. 82275, Exhibit "A") in 1969. Sulpicia's ownership over her one-half of the land and which is the land in dispute was always covered by a Torrens title, and therefore, no amount of possession thereof by the respondents, could ever defeat her proprietary rights thereon. It is apparent, that the right of plaintiff (now petitioner) to institute this action to recover possession of the portion of the land in question based on the Torrens Title of Sulpicia Jimenez, T.C.T. No. 82275 (Exhibit "A") is imprescriptible and not barred under the doctrine of laches. (J.M. Tuason & Co. v. Macalindong, L-15398, December 29, 1962, Francisco v. Cruz, et al., 43 O.G. 5105) Rollo, p. 39). 5. ID.; LACHES; APPLICATION THEREOF; CONTROLLED BY EQUITABLE CONSIDERATION. The respondent Court of Appeals declared the petitioner Sulpicia Jimenez guilty of laches and citing the ruling in the case of Heirs of Lacamen v. Heirs of Laruan (65 SCRA 605), held that, since petitioner Sulpicia Jimenez executed her Affidavit of Self-Adjudication only in 1969, she lost the right to recover possession of the parcel of land subject of the litigation. In this instance, again We rule for the petitioner. There is no absolute rule as to what constitutes laches or staleness of demand; each case is to be determined according to its particular circumstances. The question of laches is addressed to the sound discretion of the court and since laches is an equitable doctrine, its application is controlled by equitable considerations. It cannot be worked to defeat justice or to perpetrate fraud and injustice. It would be rank injustice and patently inequitous to deprive the lawful heirs of their rightful inheritance. Petitioner Sulpicia Jimenez is entitled to the relief prayed for, declaring her to be the sole and absolute owner of the land in question with right to its possession and enjoyment. Since her uncle Carlos Jimenez died in 1936, his pro-indiviso share in the properties then owned in co-ownership with his niece Sulpicia descended by intestacy to Sulpicia Jimenez alone because Carlos died without any issue or other heirs. 6. ID.; ID.; ACTION TO RECOVER POSSESSION BASED ON TORRENS TITLE; NOT BARRED. The professed objective of Act No. 496, otherwise known as the Land Registration Act or the law which established the Torrens System of Land Registration in the Philippines is that the stability of the landholding system in the Philippines depends on the confidence of the people in the titles covering the properties. And to this end, this Court has invariably upheld the indefeasibility of the Torrens Title and in, among others, J.M. Tuason
Property | Art. 484 to 493 | 15

SECOND DIVISION [G.R. No. L-46364. April 6, 1990.]

SULPICIA JIMENEZ and TORIBIO MATIAS, petitioners, vs. VICENTE FERNANDEZ alias HOSPICIO FERNANDEZ and TEODORA GRADO, respondents.

Antonio E. Bengzon III for petitioners. Agustin U. Cruz for private respondents.

SYLLABUS 1. CIVIL LAW; SUCCESSION; CIVIL CODE OF 1889; GOVERNS RIGHTS TO INHERITANCE PRIOR TO THE EFFECTIVITY OF CIVIL CODE (R.A. No. 386). It is wellsettled in this jurisdiction that the rights to the succession are transmitted from the moment of the death of the decedent (Art. 777, Civil Code). Moreover, Art. 2263 of the Civil Code provides as follows: "Rights to the inheritance of a person who died with or without a will, before the effectivity of this Code, shall be governed by the Civil Code of 1889, by other previous laws, and by the Rules of Court . . ." (Rollo, p. 17). Thus, since Carlos Jimenez, owner of one-half pro-indiviso portion of that parcel of land then covered by Original Certificate of Title No. 50933, died on July 9, 1936 (Exhibit "F") way before the effectivity of the Civil Code of the Philippines, the successional rights pertaining to his estate must be determined in accordance with the Civil Code of 1889. 2. ID.; ID.; ID.; ID.; DISQUALIFIED CHILDREN; ESTABLISHED IN CASE AT BAR. Citing the case of Cid v. Burnaman (24 SCRA 434) wherein this Court categorically held that: "To be an heir under the rules of Civil Code of 1889 (which was the law in force when Carlos Jimenez died and which should be the governing law in so far as the right to inherit from his estate was concerned), a child must be either a child legitimate, legitimated, or adopted, or else an acknowledged natural child for illegitimate not natural are disqualified to inherit." (Civil Code of 1889, Art. 807, 935). Even assuming that Melecia Cayabyab was born out of the common-law-relationship between her mother (Maria Cayabyab) and Carlos Jimenez, she could not even be considered an acknowledged natural child because Carlos Jimenez was then legally married to Susana Abalos and therefore not qualified to marry Maria Cayabyab and consequently Melecia Cayabyab was an illegitimate spurious child and not entitled to any successional rights in so far as the estate of Carlos Jimenez was concerned.

WHEREFORE, in consideration of the foregoing disquisitions, the petition is DENIED. The assailed Decision dated July 29, 2008 and Resolution dated January 30, 2009 issued by the Court of Appeals in CA-G.R. CV No. 89111 are AFFIRMED.

SO ORDERED.

and Co., Inc. v. Macalindong (6 SCRA 938), held that "the right of the appellee to file an action to recover possession based on its Torrens Title is imprescriptible and not barred under the doctrine of laches."

"WHEREFORE, decision is hereby rendered dismissing the complaint and holding the defendant, Teodora Grado, the absolute owner of the land in question; ordering the plaintiffs to pay to the defendant the amount of P500.00 as damages, as attorney's fees, and to pay the costs of suit. "SO ORDERED." (Rollo, p. 20)

RUFINA APARIS AND CASIANO PURAY, G.R. NO. L-23424, PROMULGATED JANUARY 31, 1968, WHICH CASE IS NOT APPLICABLE TO THE CASE AT BAR. VII THE LOWER COURT ERRED IN DISMISSING THE COMPLAINT AND ORDERING THE APPELLANTS TO PAY THE APPELLEES THE SUM OF P500.00 AS ATTORNEY'S FEES PLUS THE COSTS. From the foregoing, this petition for review was filed. We find merit in the petition. From the start the respondent court erred in not declaring that Melecia Jimenez Cayabyab also known as Melecia Jimenez, is not the daughter of Carlos Jimenez and therefore, had no right over the property in question. Respondents failed to present concrete evidence to prove that Melecia Cayabyab was really the daughter of Carlos Jimenez. Nonetheless, assuming for the sake of argument that Melecia Cayabyab was the illegitimate daughter of Carlos Jimenez there can be no question that Melecia Cayabyab had no right to succeed to the estate of Carlos Jimenez and could not have validly acquired, nor legally transferred to Edilberto Cagampan that portion of the property subject of this petition. prLL It is well-settled in this jurisdiction that the rights to the succession are transmitted from the moment of the death of the decedent (Art. 777, Civil Code). Moreover, Art. 2263 of the Civil Code provides as follows: "Rights to the inheritance of a person who died with or without a will, before the effectivity of this Code, shall be governed by the Civil Code of 1889, by other previous laws, and by the Rules of Court . . ." (Rollo, p. 17) Thus, since Carlos Jimenez, owner of one-half pro-indiviso portion of that parcel of land then covered by Original Certificate of Title No. 50933, died on July 9, 1936 (Exhibit "F") way before the effectivity of the Civil Code of the Philippines, the successional rights pertaining to his estate must be determined in accordance with the Civil Code of 1889. Citing the case of Cid v. Burnaman (24 SCRA 434) wherein this Court categorically held that: "To be an heir under the rules of Civil Code of 1889 (which was the law in force when Carlos Jimenez died and which should be the governing law in so far as the right to inherit from his estate was concerned), a child must be either a child legitimate, legitimated, or adopted, or else an acknowledged natural child for illegitimate not natural are disqualified to inherit." (Civil Code of 1889, Art. 807, 935) Even assuming that Melecia Cayabyab was born out of the common-law-relationship between her mother (Maria Cayabyab) and Carlos Jimenez, she could not even be considered an acknowledged natural child because Carlos Jimenez was then legally married to Susana Abalos and therefore not qualified to marry Maria Cayabyab and consequently Melecia Cayabyab was an illegitimate spurious child and not entitled to any successional rights in so far as the estate of Carlos Jimenez was concerned. prLL Melecia Cayabyab in the absence of any voluntary conveyance to her by Carlos Jimenez or Sulpicia Jimenez of the litigated portion of the land could not even legally transfer the parcel of land to Edilberto Cagampan who accordingly, could not also legally transfer the same to herein private respondents.

DECISION

PARAS, J p: Before Us is a petition for review on certiorari of the following Decision 1 and Resolution 2 of the Honorable Court of Appeals: (1) Decision, dated March 1, 1977 in C.A.-G.R. No. 49178-R entitled "Sulpicia Jimenez, et al., v. Vicente Fernandez, et al." affirming in toto the judgment of the Court of First Instance of Pangasinan, Third Judicial District in Civil Case No. 14802-I between the same parties and (2) Resolution dated June 3, 1977 denying plaintiffs-appellants' motion for reconsideration. As gathered from the records, the factual background of this case is as follows: cdphil The land in question is the Eastern portion with an area of Four Hundred Thirty Six (436) square meters of that parcel of residential land situated in Barrio Dulig (now Magsaysay), Municipality of Labrador, Pangasinan actually covered by Transfer Certificate of Title No. 82275 (Exhibit A) issued in the name of Sulpicia Jimenez. The entire parcel of land with an area of 2,932 square meters, formerly belonged to Fermin Jimenez. Fermin Jimenez has two (2) sons named Fortunato and Carlos Jimenez. This Fortunato Jimenez who predeceased his father has only one child, the petitioner Sulpicia Jimenez. After the death of Fermin Jimenez, the entire parcel of land was registered under Act 496 in the name of Carlos Jimenez and Sulpicia Jimenez (uncle and niece) in equal shares pro-indiviso. As a result of the registration case Original Certificate of Title No. 50933 (Exhibit 8) was issued on February 28, 1933, in the names of Carlos Jimenez and Sulpicia Jimenez, in equal shares pro-indiviso. Carlos Jimenez died on July 9, 1936 and his illegitimate daughter, Melecia Cayabyab, also known as Melecia Jimenez, took possession of the eastern portion of the property consisting of 436 square meters. On January 20, 1944, Melecia Jimenez sold said 436 square-meter-portion of the property to Edilberto Cagampan and defendant Teodora Grado executed a contract entitled "Exchange of Real Properties" whereby the former transferred said 436 square-meter-portion to the latter, who has been in occupation since. On August 29, 1969, plaintiff Sulpicia Jimenez executed an affidavit adjudicating unto herself the other half of the property appertaining to Carlos Jimenez, upon manifestation that she is the only heir of her deceased uncle. Consequently Transfer Certificate of Title No. 82275 was issued on October 1, 1969 in petitioner's name alone over the entire 2,932 square meterproperty. LLjur On April 1, 1970, Sulpicia Jimenez, joined by her husband, instituted the present action for the recovery of the eastern portion of the property consisting of 436 square meters occupied by defendant Teodora Grado and her son. After trial on the merits, the lower court rendered judgment, the dispositive portion of which reads:

Petitioner appealed the above judgment to the respondent Court of Appeals and on March 1, 1977, respondent Court of Appeals rendered a decision affirming the same in toto. Said decision was rendered by a special division of five (5) justices, with the Hon. Lourdes San Diego, dissenting. Petitioners within the reglementary period granted by the Honorable Court of Appeals, filed therewith a motion for reconsideration. But said motion for reconsideration was denied by the Court of Appeals in its resolution dated June 3, 1977. In their appeal to the respondent Court of Appeals from the aforequoted decision of the trial court, herein petitioner raised the following assignments of error to wit: ASSIGNMENTS OF ERROR I THE LOWER COURT ERRED IN NOT DECLARING THAT MELECIA CAYABYAB, ALSO KNOWN AS MELECIA JIMENEZ, IS NOT THE DAUGHTER OF CARLOS JIMENEZ. II THE LOWER COURT ERRED IN NOT DECLARING THAT MELECIA CAYABYAB, ALSO KNOWN AS MELECIA JIMENEZ, HAS NO RIGHT TO SELL THE LAND IN QUESTION TO EDILBERTO CAGAMPAN. III THE LOWER COURT ERRED IN NOT DECLARING THAT EDILBERTO CAGAMPAN DID NOT BECOME THE OWNER OF THE LAND IN QUESTION BY VIRTUE OF THE DEED OF SALE (EXH. "1") EXECUTED BY MELECIA CAYABYAB, ALIAS MELECIA JIMENEZ, IN HIS FAVOR. IV THE LOWER COURT ERRED IN NOT DECLARING THAT TEODORA GRADO DID NOT BECOME THE OWNER OF THE LAND IN QUESTION BY VIRTUE OF THE DEED OF EXCHANGE (EXH. "7") EXECUTED BY HER AND EDILBERTO CAGAMPAN. V THE LOWER COURT ERRED IN NOT DECLARING THAT THE TITLE OF APPELLANT SULPICIA JIMENEZ OVER THE LAND IN QUESTION CAN NOT BE DEFEATED BY THE ADVERSE OPEN AND NOTORIOUS POSSESSION OF APPELLEE TEODORA GRADO. VI THE LOWER COURT ERRED IN DECLARING THAT THE APPELLEE TEODORA GRADO IS THE ABSOLUTE OWNER OF THE LAND IN QUESTION IN THE LIGHT OF THE DECISION OF THE SUPREME COURT IN THE CASE OF LOURDES ARCUINO, ET AL., V.

Property | Art. 484 to 493 | 16

Analyzing the case before Us in this manner, We can immediately discern another error in the decision of the respondent court, which is that the said court sustained and made applicable to the case at bar the ruling in the case of Arcuino, et al., v. Aparis and Puray, No. L-23424, January 31, 1968, 22 SCRA 407, wherein We held that: ". . . it is true that the lands registered under the Torren's System may not be acquired by prescription but plaintiffs herein are not the registered owners. They merely claim to have acquired by succession, their alleged title or interest in lot No. 335. At any rate plaintiffs herein are guilty of laches." The respondent court relying on the Arcuino case, concluded that respondents had acquired the property under litigation by prescription. We cannot agree with such conclusion, because there is one very marked and important difference between the case at bar and that of the Arcuino case, and that is, that since 1933 petitioner Sulpicia Jimenez was a title holder, the property then being registered in her and her uncle Carlos Jimenez' name. In the Arcuino case, this Supreme Court held. "(I)t is true that lands registered under the Torren's System may not be acquired by prescription but plaintiffs herein are not the registered owners." (Rollo, p. 38) Even in the said case the principle of imprescriptibility of Torrens Titles was respected. Melecia Cayabyab's possession or of her predecessors-in-interest would be unavailing against the petitioner Sulpicia Jimenez who was the holder pro-indiviso with Carlos Jimenez of the Torrens Certificate of Title covering a tract of land which includes the portion now in question, from February 28, 1933, when the Original Certificate of Title No. 50 933 (Exhibit 8) was issued. Cdpr "No possession by any person of any portion of the land covered by said original certificate of titles, could defeat the title of the registered owner of the land covered by the certificate of title." (Benin v. Tuason, L-26127, June 28, 1974, 57 SCRA 531) Sulpicia's title over her one-half undivided property remained good and continued to be good when she segregated it into a new title (T.C.T No. 82275, Exhibit "A") in 1969. Sulpicia's ownership over her one-half of the land and which is the land in dispute was always covered by a Torrens title, and therefore, no amount of possession thereof by the respondents, could ever defeat her proprietary rights thereon. It is apparent, that the right of plaintiff (now petitioner) to institute this action to recover possession of the portion of the land in question based on the Torrens Title of Sulpicia Jimenez, T.C.T. No. 82275 (Exhibit "A") is imprescriptible and not barred under the doctrine of laches. (J.M. Tuason & Co. v. Macalindong, L-15398, December 29, 1962, Francisco v. Cruz, et al., 43 O.G. 5105) Rollo, p. 39) The respondent Court of Appeals declared the petitioner Sulpicia Jimenez guilty of laches and citing the ruling in the case of Heirs of Lacamen v. Heirs of Laruan (65 SCRA 605), held that, since petitioner Sulpicia Jimenez executed her Affidavit of Self-Adjudication only in 1969, she lost the right to recover possession of the parcel of land subject of the litigation. In this instance, again We rule for the petitioner. There is no absolute rule as to what constitutes laches or staleness of demand; each case is to be determined according to its particular circumstances. The question of laches is addressed to the sound discretion of the court and since laches is an equitable doctrine, its application is controlled by equitable considerations. It cannot be worked to defeat justice or to perpetrate fraud and injustice. It would be rank injustice and patently inequitous to deprive the lawful heirs of their rightful inheritance. LibLex Petitioner Sulpicia Jimenez is entitled to the relief prayed for, declaring her to be the sole and absolute owner of the land in question with right to its possession and enjoyment. Since her uncle Carlos Jimenez died in 1936, his pro-indiviso share in the properties then owned in co-

ownership with his niece Sulpicia descended by intestacy to Sulpicia Jimenez alone because Carlos died without any issue or other heirs. After all, the professed objective of Act No. 496, otherwise known as the Land Registration Act or the law which established the Torrens System of Land Registration in the Philippines is that the stability of the landholding system in the Philippines depends on the confidence of the people in the titles covering the properties. And to this end, this Court has invariably upheld the indefeasibility of the Torrens Title and in, among others, J.M. Tuason and Co., Inc. v. Macalindong (6 SCRA 938), held that "the right of the appellee to file an action to recover possession based on its Torrens Title is imprescriptible and not barred under the doctrine of laches." WHEREFORE, the Petition for Review is hereby GRANTED. The Decision and Resolution dated March 1, 1977 and June 3, 1977 in CA G.R. No. L-49178-R are SET ASIDE. SO ORDERED. FIRST DIVISION [G.R. No. 120864. October 8, 2003] MANUEL T. DE GUIA, petitioner, vs. COURT OF APPEALS (Former Sixth Division) and JOSE B. ABEJO, represented by his Attorney-in-Fact, Hermenegilda AbejoRivera, respondents. DECISION CARPIO, J.: The Case This is a Petition for Review on Certiorari[1] assailing the 22 August 1994 Decision[2] as well as the 27 June 1995 Resolution of the Court of Appeals in CA-G.R. CV No. 39875. The Court of Appeals affirmed the Decision[3] of the Regional Trial Court (trial court) of Malolos, Bulacan, Branch 16, in Civil Case No. 8796-M. The trial courts Decision ordered petitioner Manuel T. De Guia (DE GUIA) to turn over to private respondent Jose B. Abejo (ABEJO) possession of the one half () undivided portion of a fishpond and to pay actual damages and attorneys fees.

owned by Maxima Termulo who died intestate with Primitiva Lejano as her only heir. According to him, ABEJO is not the owner of the entire FISHPOND but the heirs of Primitiva Lejano who authorized him to possess the entire FISHPOND. He assailed ABEJOs ownership of the undivided portion of the FISHPOND as void and claimed ownership over an undivided half portion of the FISHPOND for himself. DE GUIA sought payment of damages and reimbursement for the improvements he introduced as a builder in good faith. The trial court set the pre-trial and required the parties to file their pre-trial briefs. ABEJO filed his pre-trial brief[5] on 05 April 1990. DE GUIA filed his pre-trial brief[6] on 31 July 1990. DE GUIAs pre-trial brief raised as the only issue in the case the amount of damages in the form of rent that DE GUIA should pay ABEJO. DE GUIA also submitted an Offer to Compromise,[7] offering to settle ABEJOs claim for P300,000 and to lease the entire FISHPOND to any party of ABEJOs choice. Hearing commenced on 30 July 1990. ABEJO rested his case on 4 December 1990. DE GUIAs last witness completed her testimony on 22 November 1991. The trial court summarized the evidence presented by ABEJO and DE GUIA as follows: Evidence adduced from plaintiff shows that there are two parcels of land covering a fishpond with a total area of 79,220 sq. m. more or less, situated at Ubihan, Meycauayan, Bulacan and covered by TCT No. 6358 equally owned by Primitiva Lejano and Lorenza Araniego married to Juan Abejo (Exh. A). The one half undivided portion owned by Lorenza Araniego corresponding to 39,611 sq. m. was later purchased by plaintiff from his father Teofilo Abejo (Exh. B), the only heir of the original owner on November 22, 1983. Prior to this sale on July 30, 1974 the whole fishpond (79,220) was the subject of a Salin ng Pamumusisyong ng Palaisdaan executed by the heirs of Primitiva Lejano with the knowledge and consent of Teofilo A. Abejo in favor of one Aniano Victa and defendant. The contract provided that the period of lease shall be until November 30, 1979. When the contract expired and defendant failed to surrender the fishpond, written demands the last of which was on November 27, 1983 were made for defendants to pay back rental and to vacate the premises in question (Exh. D & E). Defendant refused to deliver possession and also to pay the rentals due. In anticipation, however, that defendant will vacate the fishpond, plaintiff, on December 21, 1983 entered into a two year Kasunduan ng Buwisan ng Palaisdaan with Ruperto C. Villarico for a consideration of P50,000.00 (Exh. G). This contract, despite its execution and even already notarized, had to be cancelled and the amount of P50,000.00 returned by plaintiff to Villarico when the defendant did not heed the demand to vacate the fishpond. For unpaid rental, actual as well as moral and exemplary damages, plaintiff asks payment of P450,000.00 and P20,000.00 attorneys fees. On the other hand, defendants evidence tends to show that the entire fishpond with an area of 79,200 sq. m. was leased to him by the heirs of Primitiva Lejano. Subsequently, defendant became the absolute owner of one half of the undivided area of the fishpond and he questioned plaintiffs ownership of the other half as void and fraudulent. As to the area pertaining to plaintiff, defendant claimed that he introduced improvements worth P500,000 and being in good faith, he asked that he should be reimbursed by plaintiff. In his pre-trial brief, however, defendant raised the only issue which is the amount of damages plaintiff is entitled to in the form of rental. Hence, the thrust of the testimonies of defendants witnesses particularly Ben Ruben Camargo and Marta Fernando Pea was the amount of rental of fishponds in the same locality as the fishpond in question at a given time. However, the documentary evidence (Exhs. 1 and 2) in support of their testimony were not offered as evidence.[8]
Property | Art. 484 to 493 | 17

The Antecedents

On 12 May 1986, ABEJO[4] instituted an action for recovery of possession with damages against DE GUIA. In his complaint, ABEJO alleged that he is the owner of the undivided portion of a property used as a fishpond (FISHPOND) situated in Meycauayan, Bulacan and covered by TCT No. T-6358 of the Bulacan Register of Deeds. He alleged ownership over approximately 39,611 square meters out of the FISHPONDs total area of 79,220 square meters. ABEJO further averred that DE GUIA continues to possess and use the FISHPOND without any contract and without paying rent to ABEJOs damage and prejudice. ABEJO also complained that DE GUIA refuses to surrender ownership and possession of the FISHPOND despite repeated demands to do so after DE GUIAs sublease contract over the FISHPOND had expired. ABEJO asked the trial court to order DE GUIA to vacate an approximate area of 39,611 square meters as well as pay damages. DE GUIA, a lawyer by profession, appeared on his own behalf. He filed his Answer on 12 January 1990 after the Court of Appeals resolved several issues concerning the validity of the service of summons on him. In his Answer, DE GUIA alleged that the complaint does not state a cause of action and has prescribed. He claimed that the FISHPOND was originally

The trial court rendered its decision on 8 June 1992, disposing as follows: WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the defendant and hereby orders that: 1. Defendant shall turn over possession to plaintiff one half undivided portion of the 79,200 sq. m. fishpond who shall enjoy the benefits and fruits in equal share with the defendant effective immediately until such time that partition of the property is effected; Defendant shall pay to plaintiff the amount of P262,500.00 by way of actual or compensatory damages; Defendant shall pay plaintiff P20,000.00 as and for attorneys fees; and To pay the costs. 6. 7.

by intestate succession. Teofilo Abejo (now deceased) sold his undivided share in the FISHPOND to his son, ABEJO, on 22 November 1983. DE GUIA continues to possess the entire FISHPOND and to derive income from the property despite the expiration of the Lease Contract and several demands to vacate made by Teofilo Abejo and by his successor-in-interest, ABEJO. The last demand letter was dated 27 November 1983. ABEJO filed his complaint for recovery of possession with damages against DE GUIA on 12 May 1986. DE GUIAs claim of ownership over the other undivided portion of the FISHPOND has not been finally adjudicated for or against him.

execution of the documents as highly improbable since Primitiva Lejanos son, Renato Davis, witnessed the signing of the documents and found nothing irregular at the time. The appellate court also held that assuming Defendants threatened DE GUIA and the Lejano Heirs with immediate foreclosure, Defendants were merely exercising their legitimate right of foreclosing the mortgaged property for non-payment of the loan. In addition, Primitiva Lejanos lawyer and notary public, Atty. Mamerto Abao, testified that the parties appeared before him to affirm the contents of the documents. He also stated that he was present when Defendants paid Primitiva Lejano Davis and her son Renato. As of this writing, DE GUIA has a pending motion for reconsideration before the Court of Appeals. In the event the Court of Appeals Decision attains finality, DE GUIA may lose whatever right he claims over the FISHPOND.

8. 9.

2.

The Trial Courts Ruling

3 4. SO ORDERED.[9]

Aggrieved, DE GUIA went to the Court of Appeals insisting the trial court erred in ordering him to vacate and surrender possession of the undivided portion of the FISHPOND and to pay actual damages and attorneys fees. The Court of Appeals found DE GUIAs appeal without merit and affirmed the trial courts decision. Upon DE GUIAs motion for reconsideration, the appellate court reduced the compensatory damages from P262,500 to P212,500. Hence, the instant petition. The undisputed facts as found by the trial court and adopted in toto by the Court of Appeals are restated as follows: 1. The subject of the dispute are two undivided parcels of land used as a fishpond situated in Barrio Ubihan, Meycauayan, Bulacan, originally coowned by Primitiva Lejano and Lorenza Araniego married to Juan Abejo. The FISHPOND is registered under the names of Primitiva Lejano and Lorenza Araniego under TCT No. 6358 of the Bulacan Register of Deeds as follows: PRIMITIVA LEJANO, Filipina, of legal age, single - share; and LORENZA ARANIEGO, Filipina, of legal age, married to Juan Abejo, share, --3. The FISHPOND has a total land area of approximately 79,220 square meters. ABEJO is seeking to recover possession of the undivided portion of the FISHPOND containing 39,611 square meters. DE GUIA (along with a certain Aniano Victa) acquired possession of the entire FISHPOND by virtue of a document captioned Salin ng Pamumusisyong ng Palaisdaan (Lease Contract) executed between him and the heirs of Primitiva Lejano. The Lease Contract was effective from 30 July 1974 up to 30 November 1979 for a consideration of P100,000. The Lease Contract was executed with the knowledge and consent of Teofilo Abejo, sole heir of Lorenza Araniego Abejo. Teofilo Abejo acquired Lorenza Araniego Abejos undivided share in the FISHPOND

DE GUIA offers the verified Complaint for Annulment of Real Estate Mortgage and Contract of Lease with Preliminary Injunction signed by the heirs of Primitiva Lejano as proof of his ownership of the other undivided half portion of the FISHPOND. Records show that DE GUIA filed the complaint for himself and as attorney-in fact of the heirs of Primitiva Lejano (Lejano Heirs)[10] against Spouses Teofilo Morte and Angelina Villarico, Spouses Ruperto and Milagros Villarico, et al. (Defendants). The case was raffled to Branch 12 of the Regional Trial Court of Malolos, Bulacan, and docketed as Civil Case. No. 86-27-M. The complaint alleged that DE GUIA acquired his undivided share in the FISHPOND from the Lejano Heirs in February 1986. DE GUIA and the Lejano Heirs sought to annul the Kasulatan ng Sanglaan and Kasulatan ng Pagbubuwis ng Palaisdaan, executed on 10 November 1979 by Primitiva Lejano in favor of the Defendants. DE GUIA and the Lejano Heirs claimed that Primitiva Lejano signed these documents under duress and without consideration. The trial court rendered judgment[11] on 28 February 1992 against DE GUIA and the Lejano Heirs as follows: WHEREFORE, the evidence having shown the plaintiffs, particularly Manuel De Guia, their successor-in-interest, not entitled upon the facts and the law to the relief prayed for in the amended complaint, the same is hereby DISMISSED with costs against said plaintiff. Instead, as prayed for by defendants, judgment is hereby rendered: 1. Declaring the Kasulatan ng Sanglaan (Exhs. A & 1) dated November 10, 1979, and the Kasulatan ng Pagbubuwis ng Palaisdaan (Exhs. C &3) also dated November 10, 1979, as valid for all legal intents and purposes; Ordering the Ex-Officio Sheriff, RTC, Bulacan, to proceed with the extrajudicial foreclosure of the subject real estate mortgage; and Ordering plaintiffs to pay defendants attorneys fees in the amount of P20,000.00.

The trial court ruled that ABEJO has the right to demand that DE GUIA vacate and surrender an area equivalent to ABEJOs undivided share in the FISHPOND. The trial court explained that DE GUIAs sublease contract expired in 1979 and ABEJO acquired his fathers share in 1983. However, the trial court pointed out that ABEJO failed to present evidence of the judicial or extra-judicial partition of the FISHPOND. The identification of the specific area pertaining to ABEJO and his co-owner is vital in an action to recover possession of real property. Nevertheless, the trial court declared that pending partition, it is only just that DE GUIA pay ABEJO a reasonable amount as rental for the use of ABEJOs share in the FISHPOND. DE GUIA admitted this obligation when he raised as sole issue in his pre-trial brief how much rent he should pay ABEJO. DE GUIA even proposed P300,000 as the reasonable amount but under certain conditions which ABEJO found unacceptable. In determining the reasonable rent due to ABEJO, the trial court considered the Lease Contract between ABEJO and a certain Ruperto C. Villarico which provided for a yearly rent of P25,000 for undivided portion of the FISHPOND. The trial court declared that the total amount of rent due is P212,500, computed from November 1983 when ABEJO became a coowner of the FISHPOND up to 1991[13] or a period of eight and one half years. The trial court further ordered DE GUIA to pay an additional P50,000 which represents the amount ABEJO returned to Ruperto C. Villarico when they cancelled the Lease Contract between them due to DE GUIAs refusal to vacate the FISHPOND. Lastly, the trial court ruled that pending partition, ABEJO as co-owner has the right to possess the FISHPOND and to receive an equal share in the benefits from the FISHPOND effective immediately. Until there is a partition, and while there is no contract of lease, the Civil Code provisions on co-ownership shall govern the rights of the parties.

2.

2.

The Court of Appeals Ruling

4.

3.

SO ORDERED.[12] The Court of Appeals affirmed the trial court in a Decision dated 30 August 2002 in CA-G.R. CV No. 38031. The Court of Appeals found the claim of force and intimidation in the

5.

The Court of Appeals affirmed the trial courts decision. The Court of Appeals debunked DE GUIAs claim that partition and not recovery of possession was the proper remedy under the circumstances. The Court of Appeals pointed out that DE GUIAs failure to respect ABEJOs right over his undivided share in the FISHPOND justifies the action for recovery of possession. The trial courts decision effectively enforces ABEJOs right over the property which DE GUIA violated by possession and use without paying compensation. According to the Court of Appeals, partition would constitute a mechanical aspect of the decision just like accounting when necessary. The Court of Appeals likewise rejected DE GUIAs claim that the award of
Property | Art. 484 to 493 | 18

compensatory damages of P242,000, computed based on the rent stipulated in the Lease Contract between ABEJO and Ruperto C. Villarico, is grossly exorbitant. The Court of Appeals clarified that the amount the trial court awarded was P262,500 and not P242,000 as erroneously alleged by DE GUIA. The Court of Appeals pointed out that the notarized Lease Contract between ABEJO and Ruperto C. Villarico carries more evidentiary weight than the testimonies of DE GUIAs witnesses, Ben Ruben Camargo and Marta Fernando Pea. The Court of Appeals also upheld the award of attorneys fees since the parties could have avoided litigation had DE GUIA heeded the justifiable demands of ABEJO. On motion for reconsideration, the Court of Appeals reduced the compensatory damages from P262,500 to P212,500. The Court of Appeals explained that the trial court correctly computed the total amount of rent due at P212,500. The trial court erred, however, in adding the sum of P50,000 representing the rent for 1983 and 1984 which ABEJO returned to Ruperto C. Villarico. The appellate court clarified that the sum of P212,500 was arrived at by multiplying the rent of P25,000 by 8 years. The 8 year period already included the two months rent received from and then subsequently reimbursed to Ruperto C. Villarico.

The petition is partly meritorious.

respondent. Indisputably, DE GUIA has been in exclusive possession of the entire FISHPOND since July 1974. Initially, DE GUIA disputed ABEJOs claim of ownership over the undivided portion of the FISHPOND. Subsequently, he implicitly recognized ABEJOs undivided share by offering to settle the case for P300,000 and to vacate the property. During the trial proper, neither DE GUIA nor ABEJO asserted or manifested a claim of absolute and exclusive ownership over the entire FISHPOND. Before this Court, DE GUIA limits the issues to the propriety of bringing an action for recovery of possession and the recovery of compensatory damages. Following the inherent and peculiar features of co-ownership, while ABEJO and DE GUIA have equal shares in the FISHPOND quantitatively speaking, they have the same right in a qualitative sense as co-owners. Simply stated, ABEJO and DE GUIA are owners of the whole and over the whole, they exercise the right of dominion. However, they are at the same time individual owners of a portion, which is truly abstract because until there is partition, such portion remains indeterminate or unidentified.[21] As co-owners, ABEJO and DE GUIA may jointly exercise the right of dominion over the entire FISHPOND until they partition the FISHPOND by identifying or segregating their respective portions. Since a co-ownership subsists between ABEJO and DE GUIA, judicial or extra-judicial partition is the proper recourse. An action to demand partition is imprescriptible and not subject to laches.[22] Each co-owner may demand at any time the partition of the common property unless a co-owner has repudiated the co-ownership under certain conditions.[23] Neither ABEJO nor DE GUIA has repudiated the co-ownership under the conditions set by law. To recapitulate, we rule that a co-owner may file an action for recovery of possession against a co-owner who takes exclusive possession of the entire co-owned property. However, the only effect of such action is a recognition of the co-ownership. The courts cannot proceed with the actual partitioning of the co-owned property. Thus, judicial or extra-judicial partition is necessary to effect physical division of the FISHPOND between ABEJO and DE GUIA. An action for partition is also the proper forum for accounting the profits received by DE GUIA from the FISHPOND. However, as a necessary consequence of such recognition, ABEJO shall exercise an equal right to possess, use and enjoy the entire FISHPOND. DE GUIA further claims that the trial and appellate courts erred when they ordered the recovery of rent when the exact identity of the portion in question had not yet been clearly defined and delineated. According to DE GUIA, an order to pay damages in the form of rent is premature before partition. We disagree. The right of enjoyment by each co-owner is limited by a similar right of the other coowners. A co-owner cannot devote common property to his exclusive use to the prejudice of the co-ownership.[24] Hence, if the subject is a residential house, all the co-owners may live there with their respective families to the extent possible. However, if one co-owner alone occupies the entire house without opposition from the other co-owners, and there is no lease agreement, the other co-owners cannot demand the payment of rent. Conversely, if there is an agreement to lease the house, the co-owners can demand rent from the co-owner who dwells in the house. The co-owners can either exercise an equal right to live in the house, or agree to lease it. If they fail to exercise any of these options, they must bear the consequences. It would be unjust to require the co-owner to pay rent after the co-owners by their silence have allowed him to use the property.[25] In case the co-owners agree to lease a building owned in common, a co-owner cannot retain it for his use without paying the proper rent.[26] Moreover, where part of the property is
Property | Art. 484 to 493 | 19

First and Second Issues: Cause of Action and Turn-Over of Possession

DE GUIA contends that a co-owner cannot claim a definite portion from the property owned in common until there is a partition. DE GUIA argues that ABEJO should have filed an action for partition instead of recovery of possession since the court cannot implement any decision in the latter case without first a partition. DE GUIA contends that an action for recovery of possession cannot prosper when the property subject of the action is part of an undivided, co-owned property. The procedural mode adopted by ABEJO, which is recovery of possession, makes enforcement difficult if not impossible since there is still no partition of the subject property. Under Article 484 of the Civil Code, there is co-ownership whenever the ownership of an undivided thing or right belongs to different persons. A co-owner of an undivided parcel of land is an owner of the whole, and over the whole he exercises the right of dominion, but he is at the same time the owner of a portion which is truly abstract.[15] On the other hand, there is no co-ownership when the different portions owned by different people are already concretely determined and separately identifiable, even if not yet technically described.[16] Article 487 of the Civil Code provides, [a]ny 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). The summary actions of forcible entry and unlawful detainer seek the recovery of physical possession only. These actions are brought before municipal trial courts within one year from dispossession. However, accion publiciana, which is a plenary action for recovery of the right to possess, falls under the jurisdiction of the proper regional trial court when the dispossession has lasted for more than one year. Accion de reivindicacion, which seeks the recovery of ownership, also falls under the jurisdiction of the proper regional trial court.[17] Any co-owner may file an action under Article 487 not only against a third person, but also against another co-owner who takes exclusive possession and asserts exclusive ownership of the property.[18] In the latter case, however, the only purpose of the action is to obtain recognition of the co-ownership. The plaintiff cannot seek exclusion of the defendant from the property because as co-owner he has a right of possession. The plaintiff cannot recover any material or determinate part of the property.[19] In Hermogena G. Engreso with Spouse Jose Engreso v. Nestoria De La Cruz and Herminio De La Cruz,[20] we reiterated the rule that a co-owner cannot recover a material or determinate part of a common property prior to partition as follows: It is a basic principle in civil law that before a property owned in common is actually partitioned, all that the co-owner has is an ideal or abstract quota or proportionate share in the entire property. A co-owner has no right to demand a concrete, specific or determinate part of the thing owned in common because until division is effected his right over the thing is represented only by an ideal portion. As such, the only effect of an action brought by a co-owner against a co-owner will be to obtain recognition of the co-ownership; the defendant cannot be excluded from a specific portion of the property because as a coowner he has a right to possess and the plaintiff cannot recover any material or determinate part of the property. Thus, the courts a quo erred when they ordered the delivery of one-half () of the building in favor of private

The Issues

DE GUIA raises the following issues in his Memorandum: I. THE COURT OF APPEALS ERRED IN AFFIRMING THE TRIAL COURTS DECISION DENYING PETITIONERS PLEA FOR DISMISSAL OF THE COMPLAINT FOR FAILURE TO STATE A CAUSE OF ACTION; II. THE COURT OF APPEALS ERRED IN AFFIRMING THE TRIAL COURTS ORDER DIRECTING PETITIONER TO TURN OVER THE ONE-HALF UNDIVIDED PORTION OF THE FISHPOND WHICH IS STILL UNDER A STATE OF CO-OWNERSHIP; III. THE COURT OF APPEALS ERRED IN AFFIRMING, IN PART, THE AWARD OF ACTUAL OR COMPENSATORY DAMAGES DESPITE LACK OF CREDIBLE EVIDENCE TO SUPPORT THE SAME; IV. THE COURT OF APPEALS ERRED IN AFFIRMING THE AWARD OF ATTORNEYS FEES IN PRIVATE RESPONDENTS FAVOR.[14] In essence, this Court is asked to resolve: (1) whether an action for recovery of possession and turn-over of the undivided portion of a common property is proper before partition; and (2) whether there is sufficient basis for the award of compensatory damages and attorneys fees.

The Courts Ruling

occupied exclusively by some co-owners for the exploitation of an industry, the other coowners become co-participants in the accessions of the property and should share in its net profits.[27] The Lejano Heirs and Teofilo Abejo agreed to lease the entire FISHPOND to DE GUIA. After DE GUIAs lease expired in 1979, he could no longer use the entire FISHPOND without paying rent. To allow DE GUIA to continue using the entire FISHPOND without paying rent would prejudice ABEJOs right to receive rent, which would have accrued to his share in the FISHPOND had it been leased to others.[28] Since ABEJO acquired his undivided share in the FISHPOND on 22 November 1983, DE GUIA should pay ABEJO reasonable rent for his possession and use of ABEJOs portion beginning from that date. The compensatory damages of P25,000 per year awarded to ABEJO is the fair rental value or the reasonable compensation for the use and occupation of the leased property,[29] considering the circumstances at that time. DE GUIA shall continue to pay ABEJO a yearly rent of P25,000 corresponding to ABEJOs undivided share in the FISHPOND. However, ABEJO has the option either to exercise an equal right to occupy the FISHPOND, or to file a new petition before the trial court to fix a new rental rate in view of changed circumstances in the last 20 years. ABEJO made an extrajudicial demand on DE GUIA by sending the 27 November 1983 demand letter. Thus, the rent in arrears should earn interest at 6% per annum from 27 November 1983 until finality of this decision pursuant to Article 2209 [30] of the Civil Code. Thereafter, the interest rate is 12% per annum from finality of this decision until full payment.[31]

Fourth Issue: Attorneys Fees

[G.R. No. 44664. July 31, 1991.]

The trial court did not err in imposing attorneys fees of P20,000. Attorneys fees can be awarded in the cases enumerated in Article 2208 of the Civil Code specifically: xxx (2) Where the defendants act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest; xxx DE GUIA is a lawyer and he should have known that a co-owner could not take exclusive possession of a common property. Although DE GUIA offered to settle the case out of court, such offer was made under conditions not acceptable to ABEJO. Certainly, ABEJO was still put to unnecessary expense and trouble to protect his interest under paragraph (2), Article 2208 of the Civil Code. WHEREFORE, the Decision dated 22 August 1994 and Resolution dated 27 June 1995 of the Court of Appeals in CA-G.R. CV No. 39875 is AFFIRMED with respect to that portion ordering Manuel T. De Guia to pay Jose B. Abejo compensatory damages of P212,500 and attorneys fees of P20,000, and MODIFIED as follows: 1. The co-ownership between Manuel T. De Guia and Jose B. Abejo over the entire FISHPOND covered by TCT No. 6358 of the Bulacan Register of Deeds is recognized without prejudice to the outcome of CAG.R. CV No. 38031 pending before the Court of Appeals and other cases involving the same property; Manuel T. De Guia and Jose B. Abejo shall equally enjoy possession and use of the entire FISHPOND prior to partition; The compensatory damages of P25,000 per annum representing rent from 27 November 1983 until May 1992 shall earn interest at 6% per annum from 27 November 1983 until finality of this decision, and thereafter at 12% per annum until full payment; Manuel T. de Guia shall pay Jose B. Abejo a yearly rent of P25,000 from June 1992 until finality of this decision, with interest at 6% per annum during the same period, and thereafter at 12% interest per annum until full payment; After finality of this decision and for as long as Manuel T. de Guia exclusively possesses the entire FISHPOND, he shall pay Jose B. Abejo a yearly rental of P25,000 for the latters undivided share in the FISHPOND, unless Jose B. Abejo secures from the proper court an order fixing a different rental rate in view of possible changed circumstances.

BERNARDO MENDOZA I, BERNARDO MENDOZA II, GUADALUPE M. MANGALE, JULIANA M. SAMONTE, PACITA M. SAMONTE, RICARDO MENDOZA, FRANCISCO MENDOZA, PATRICIA MENDOZA, OLYMPIA M. DIZON, ROMEO MENDOZA, REYNALDO MENDOZA, REMEDIOS M. BERNABE and TRINIDAD MANUEL MENDOZA, petitioners, vs. HON. COURT OF APPEALS, RENATO SAMONTE and LUCIA DELA CRUZ SAMONTE, respondents.

Rosendo G. Tansinsin, Jr. for petitioners. Francisco E. Rodrigo, Jr. for respondents.

SYLLABUS 1. CIVIL LAW; INTESTATE SUCCESSION; ESTATE OF DECEDENT, OWNED IN COMMON BY HEIRS. Where there are two or more heirs, the whole estate of the decedent is, before its partition, owned in common by such heirs (Article 1078 of the Civil Code). 2. ID.; ID.; ID.; SALE BY AN HEIR AFTER PARTITION; VALID. Petitioners' coownership over Lot 3 was extinguished when it was subdivided into Lot 3-A and Lot 3-B, which portions were concretely determined and technically described (see de la Cruz v. Cruz, G.R. No. L-27759, April 17, 1970, 32 SCRA 307). Against the impetuous denial of petitioners that Lot 3 has been partitioned is Exhibit A which is the Subdivision Plan of Lot 3, (LRC) PSD17370, dated September 7, 1961, duly approved by the Commissioner of Land Registration. It is also Our finding that Lot 3-A has been adjudicated to petitioner Trinidad Manuel Mendoza. We take into account the pertinent provisions of the "Dokumento ng Bilihan" and estoppel on the part of petitioners. Therefore, the "Dokumento ng Bilihan" is a valid document. 3. ID.; SALE; LEGAL REDEMPTION; APPLIES ONLY IF CO-OWNERSHIP STILL EXISTS. We resolve the second issue based on the previous discussion that the coownership has been extinguished. Article 1620 of the Civil Code applies only if the coownership still exists. If the property has been partitioned or an identified share has been sold, there is no longer any right of legal redemption (see Umengan v. Butucan, et al., 117 Phil. 325; Caro v. Court of Appeals, et al., G.R. No. L-46001, March 25, 1982, 113 SCRA 10).

Third Issue: Lack of Credible Evidence to Support Award of Compensatory Damages 2. DE GUIA contends the P212,500 in rent awarded to ABEJO is exorbitant. He assails as doubtful and self-serving evidence the Lease Contract between ABEJO and Ruperto C. Villarico that served as basis for the yearly rent of P25,000 for ABEJOs share in the FISHPOND. DE GUIA says the trial and appellate courts should have given credence to the testimonies of his witnesses, Ben Ruben Camargo (Camargo) and Marta Fernando Pea (Pea) that rentals of fishponds in the same vicinity are for much lesser considerations. This issue involves calibration of the whole evidence considering mainly the credibility of witnesses. As a rule, a party may raise only questions of law in an appeal by certiorari under Rule 45 of the Rules of Court. The Supreme Court is not duty-bound to analyze and weigh again the evidence considered in the proceedings below.[32] More so in the instant case, where the Court of Appeals affirmed the factual findings of the trial court.[33] It is not true that the trial court disregarded the testimonies of Camargo and Pea because DE GUIA failed to present documentary evidence to support their testimonies. Actually, the trial and appellate courts found the testimonies of Camargo and Pea unconvincing. Judges cannot be expected to rely on the testimonies of every witness. In ascertaining the facts, they determine who are credible and who are not. In doing so, they consider all the evidence before them.[34] We find no cogent reason to overturn the trial and appellate courts evaluation of the witnesses testimonies. We likewise find reasonable the P25,000 yearly compensation for ABEJOs undivided share in the FISHPOND. Indeed, being a question of fact, it is for the trial and appellate courts to decide and this Court will not disturb their findings unless clearly baseless or irrational. The exception does not obtain in this case. 3.

4.

5.

DECISION

SO ORDERED. G.R. No. 44664 July 31, 1991 BERNARDO MENDOZA I vs. COURT OF APPEALS MEDIALDEA, J p: This is a petition for review on certiorari seeking to nullify the decision of the Court of Appeals dated June 23,1976, in C.A.-G.R. No. 56049-R entitled "Bernardo Mendoza I, et al. v. Renato Samonte, et al.," which affirmed the decision of the Court of First Instance of Bulacan; and its resolution dated September 15, 1976, which denied the motion for reconsideration. The antecedent facts are, as follows:
Property | Art. 484 to 493 | 20

FIRST DIVISION

On February 18, 1969, petitioners Bernardo Mendoza I, Bernardo Mendoza II, Guadalupe M. Mangale, Juliana M. Samonte, Pacita M. Samonte, Ricardo Mendoza, Francisco Mendoza, Patricia Mendoza, Olympia M. Dizon, Romeo Mendoza, Reynaldo Mendoza, Remedios M. Bernabe and Trinidad Manuel Mendoza instituted before the Court of First Instance of Bulacan an action for reconveyance of real property against private respondents spouses Renato Samonte and Lucia de la Cruz Samonte. On October 27, 1970, petitioners filed a First Amended Complaint wherein they alleged that in the event that the sale of the real property by petitioner Trinidad Manuel Mendoza to private respondents is declared valid, they are nonetheless entitled to legal redemption. During the pre-trial on June 28, 1971, the parties, through their respective counsel, submitted the following partial stipulation of facts (pp. 48-51, Record on Appeal): "'xxx xxx xxx:

"6. Arcadio Mendoza acquired ownership over the above-mentioned nine (9) parcels of land, including Lot 3, through donation from the late Jose Samonte, which mode of acquisition was recognized and adjudicated by the Court of Appeals in its decision dated September 23, 1964, in the case entitled: 'Victor Samonte, et al. v. Maria Samonte, et al.,' G.R. No. 22891-R; . . .; "7. were: In the case decided by the Court of Appeals, CA-G.R. No. 22891-R, the plaintiffs

na gulang at naninirahan sa Taliptip, Bulakan, Bulakan, ay aking ipinagbibili, isinasalin at inililipat sa nasabing magasawang Renato Samonte at Lucia de la Cruz, sa kanilang mga anak at tagapagmana ang Lote 3-A ng Lote 3, na binabanggit sa itaas rito, pati ng pagkamayari at posesion (sic) ng nasabing Lote 3-A, na walang pinanagutan (sic) kahit ano hanggang sa petsang ito, at aking ipagtatangol sa ano mang habol sa Lote 3-A ang mga bumiling magasawang (sic) Renato Samonte at Lucia de la Cruz sa sarili kong pananagot.' (See last paragraph, page 2, Dokumento ng Bilihan, supra). "12. All the improvements in said Lot 3-A were placed therein by defendant spouses Renato Samonte and Lucia de la Cruz Samonte. "WHEREFORE, parties herein respectfully pray that the foregoing partial stipulation of facts be admitted, and that the above-entitled case be set for hearing for purposes of receiving evidence insofar as the contorverted (sic) facts are concerned. "Malolos, Bulacan, June 18, 1971. (SGD.) ERNESTO M. TOMANENG Counsel for the plaintiffs Suite 507 Marvel Bldg. I 258 Juan Luna, Manila (SGD.) FRANCISCO E. RODRIGO, JR. Counsel for the defendants 54 Dia (sic) Juana Rodriguez, St. Quezon City" On October 15, 1973, the trial court dismissed the complaint, with costs against petitioners, based on the following grounds (pp. 51-53, Record on Appeal): "There are several issues raised by the plaintiffs in their pre-trial brief as well as memorandum and foremost among them is the question regarding the validity of the sale. According to the plaintiffs, the sale of the disputed property in favor of the defendants was null and void because as a mere co-owner of an undivided estate, Trinidad Mendoza had no right to divided (sic) the estate into parts and then convey a part thereof by metes and bounds to a third person. Such was the case, according to the plaintiffs, since there had never been any partition, judicial or extrajudicial, of the estate among the heirs of the late Arcadio Mendoza. "It is apparent that the resolution of this issue will depend on whether or not the heirs of Arcadio Mendoza had already partitioned his estate and in pursuance thereto, adjudicated the lot in question to the plaintiff Trinidad Mendoza. "After examining the 'Dokumento ng Bilihan,' evidencing the sale of the lot in question to the defendants, the Court is convinced that there was such an agreement to partition the properties, including the one involved in this case, left by the deceased Arcadio Mendoza. From paragraphs 4 and 5 of said document, xxx it can readily be seen that the partition had been accomplished by the heirs of Arcadio Mendoza. xxx. Said paragraphs, which read as follows, clearly stated that it was the agreement among the surviving children and wife of Arcadio Mendoza that Lot 3-A, which was the other half of Lot 3, was to be the share of plaintiff Trinidad Mendoza while Lot 3-B world belong to the children:
Property | Art. 484 to 493 | 21

"1. Plaintiffs are the legal heirs of the late Arcadio Mendoza of Barrio Taliptip, Bulacan, Bulacan; plaintiff Trinidad Manuel being the surviving spouse of said Arcadio Mendoza and the rest of the plaintiffs being the legitimate children of spouses Arcadio Mendoza (deceased) and Trinidad Manuel; "'2. Arcadio Mendoza and Trinidad Manuel were married on April 22, 1923, in the Catholic Church, Parish of Bulacan, Bulacan; "'3. 4, 1944; Arcadio Mendoza died in the Barrio of Taliptip, Bulacan, Bulacan, on November

VICTOR SAMONTE, AGATONA SAMONTE, ARTEMIO VILLANUEVA, CELESTINO VILLANUEVA, RAMON VILLANUEVA, MERCEDES VILLANUEVA, SANTOS VILLANUEVA, MAXIMO VILLANUEVA, ALIPIO VILLANUEVA, SIXTO DE LOS REYES, JOSE DE LOS REYES, LIGAYA DE LOS REYES, ELINO VILLANUEVA, CRISANTA VILLANUEVA, PEDRO VILLANUEVA, NICOLAS VILLANUEVA, ARSENIO VILLANUEVA, BALTAZAR VILLANUEVA, OTILLA VILLANUEVA, ENRIQUE VILLANUEVA, JOSE VILLANUEVA, ROLANDO VILLANUEVA, MARTA MENDOZA, MARIA MENDOZA, FELIPA VILLENA, ADELA ANDAYA, and MATIAS VILLANUEVA. (sic). while the defendants were: FAUSTINO SAMONTE, MARIA SAMONTE, BERNARDO MENDOZA, GUADALUPE M. VDA. DE MANGALI, JULIANA MENDOZA, RAUL SAMONTE, BERNARDO MENDOZA II, RICARDO MENDOZA, FRANCISCO MENDOZA, PACITA MENDOZA, CAYETANO SAMONTE and TRINIDAD MANUEL, in her own right and as guardian-ad-litem for the minors, OLIMPIA, PATRICIA, REYNALDO, REMEDIOS and ROMEO all surnamed MENDOZA; "8. The aforementioned Lot 3 was subsequently subdivided into two (2) lots, namely: Lot 3-A with an area of 2238 square meters and Lot 3-B with an area of 2115 square meters, as shown in the Subdivision plan (LRC) Psd-17370, dated September 7, 1961, duly approved by the Commissioner of Land Registration, Antonio Noblejas; "9. One June 26, 1962, plaintiff Trinidad Manuel Mendoza sold to defends its, Renato Samonte and Lucia de la Cruz Samonte, Lot 3-A . . .; "10. The said 'Dokumento ng Bilihan' is written in Tagalog, signed by plaintiff Trinidad Manuel Mendoza, as vendor, witnessed by plaintiffs Juliana Mendoza and Pacita Mendoza Samonte, and notarized by Atty. Pedro Magsalin; "11. following: In said 'Dokumento ng Bilihan,' plaintiff Trinidad Manuel Mendoza declared the

"'4. The late Arcadio Mendoza left properties, real and personal, among which is the property covered by Original Certificate of Title No. 12192 of the Register of Deeds of Bulacan, situated at Taliptip, Bulacan, Bulacan, consisting of nine (9) parcels of land, with an aggregate area of 33,398 square meters; . . .; "'5. The property in question is Lot 3-A, which is a portion of Lot 3, which Lot 3-A is more particularly described as follows: '(A parcel of land (Lot 3-A of the subdivision plan (LRC) Psd-17370, being a portion of Lot 3, described on plan Psu-51078, LRC (GLRO) Record No. 32994), situated in the Barrio of Taliptip, Municipality of Bulacan, Province of Bulacan. Bounded on the NE., points 1 to 2 by (Lot 8, Psu-51078, Road Widening) Bulacan-Obando Provincial Road (15.00 m. wide); on the SE., points 2 to 3 by property of Faustino Samonte; on the SW., points 3 to 4 by property of Faustino Samonte; and on the NW., points 4 to 1 by Lot 3-B of the Subdivision plan. Beginning at a point marked '1' on plan, being S, 30 deg. 52' E., 3794.82 m. from BLLM 1, Mp. of Bulacan, thence S. 49 deg. 38'E., 46.93 m. to point 2; thence S. 42 deg. 21'W., 49.94 m. to point 3; thence N. 43 deg. 47'W., 47.33 m. to point 4; thence N. 42 deg. 46'E., 45.14 m. to the point. of beginning containing an area of TWO THOUSAND TWO HUNDRED AND THIRTY EIGHT (2,238) SQUARE METERS, more or less. All points referred to are indicated on the plan and are marked on the ground as follows: points 1 and 4 by PS. Cyl. Conc. Mons. 15 x 60 cm., and the rest of Old PLS. Stone Mons. 20x20x60 cm., bearings true; declination O deg. 48' E., date of the original survey, April 27,1926 and that of the subdivision survey, July 21, 1961.'

'Na sa aming kasunduan ng ating mga anak at ako, ang nasabirg Lot 3-A ay siyang aking kalahati sa nasabing Lot 3, na may kaunting lamang, at ang Lot 3-B ay siyang nauukol sa aking mga anak na tunay nilang pagaari.' (See first paragraph, page 3, Dokumento ng Bilihan, (Annex, 'C'); 'Na sa aking pakikipagkasundo (sic) sa aking mga anak at sa kanilang kapasiyahan at kapahintulutan ang nasabing Lot 3-A ay siyang aking ipinagbili sa magasawang (sic) Renato Samonte at Lucia de la Crus, alang-alang sa aming pangako na ipagbili sa nasabing magasawa ang kalahati ng naturang Lot 3, na ang halaga ay matagal ng tinanggap namin sa mga nakabiling magasawa.' (see second paragraph, page 3, Dokumento ng Bilihan, supra); 'Na alangalang (sic) Ka halagang TATLONG LIBO AT LlMANG DAANG PISO (P3,500.00), Salaping pilipino (sic), na aking ng (sic) tinanggap na may mga dalawang taon na sa magasawang (sic) RENATO SAMONTE at LUCIA DE LA CRUZ, mga pilipino (sic), may sapat

'Na sa aming kasunduan ng aking mga anak at ako, ang nasabing Lot 3-A ay siyang aking kalahati sa nasabing Lot 3, na may kaunting lamang, at ang Lot 3-B ay siyang nauukol sa aking mga anak na tunay nilang pagaari (sic). 'Na sa aking pakikipagkasundo sa aking mga anak at sa kanilang kapasiyahan at kapahintulutan ang nasabing Lot 3-A ay siyang aking ipinagbili sa magasawang (sic) Renato Samonte at Lucia dela Cruz, alang-alang sa aming pangako na ipagbili sa nasabing magasawa (sic) ang kalahati ng naturang Lot 3, na ang halaga ay matagal ng (sic) tinangap (sic) namin sa mga nakabiling magasawa (sic).' Indeed, it must habe (sic) been because of this agreement to partition the estate, that Lot 3, from which the land in question came, was subdivided on September 7, 1961 by a survey or as stated in the second paragraph of said deed of sale. 'Na upang mahati humigit kumulang sa dalawang bahagi ang nasabing Lote No. 3, ang isa ay para sa mga anak ng namatay na aking asawang Arcadio Mendoza, at ang pangalawa ay para sa akin na tunay kong pagaari (sic), ay ipinagawa namin ang (sic) plano de subdivision (LRC) PSD-17370 petsa Sept. 7, 1961, aprobado ni G. Antonio H. Noblejas, Comisionado ng Land Registration, at ang kinalabasan ay ang mga sumusunod: 'Lote 3-A-Area 2238 sq.m.: xxx xxx xxx'

Pacita Samonte before the latter affixed their respective signatures, a fact which is not improbable. "Indeed, there is another circumstance showing why the denials of plaintiffs Trinidad Mendoza, Juliana and Pacita Samonte cannot be given ranch credit. These three plaintiffs testified that they did not know the contents of the deed of sale not only at the time they signed it out also after they had executed the same. Yet, the undeniable fact remains that after the execution of said deed of sale in 1962, the defendants started building their house on the lot in question in barrio Taliptip, Bulacan, Bulacan. The failure of said plaintiffs and of the other plaintiffs to stop or even question the defendants regarding the construction of their house on the lot in question, which was being built openly in the vicinity where they all resided, can only mean that the plaintiffs knew that the defendants had a right to build on the disputed property. "Considering the finding of the Court that Lot 3-A, the property in question, was the subject of a partition agreement and was adjudicated to plaintiff Trinidad Mendoza, it follows that said property was no longer held in co-ownership by the plaintiffs at the time that it was sold to the defendants. Such being the case, the provisions of Article 1620 of the Civil Code, allowing a co-owner to exercise the right of redemption, cannot be applied." To summarize, the trial court took into account the following in dismissing petitioners' complaint: (1) the pertinent provisions of the "Dokumento ng Bilihan" to prove that Lot 3 has been subdivided and that Lot 3-A has been adjudicated to petitioner Trinidad Manuel Mendoza; (2) the presumption that petitioners Trinidad Manuel Mendoza, Pacita Samonte and Juliana Mendoza understood the contents of the document when they signed it; (3) estoppel on the part of petitioners; and (4) non-applicability of Article 1620 of the Civil Code. On appeal, the respondent Court of Appeals affirmed the decision of the trial court (p. 40, Rollo). The motion for reconsideration was denied (p. 70, Rollo) Hence, the present petition. The issues are whether or not. (1) the "Dokumento ng Bilihan" is valid; and (2) petitioners can still exercise the right of legal redemption. According to petitioners, on June 26, 1962, when the alleged "Dokumento ng Bilihan" was executed by Trinidad Manuel Mendoza, Lot 3-A was still under litigation for it was only on September 23, 1964, that C.A.-G.R. No. 22891-R was decided by the respondent court. This being the case, petitioners have not executed any agreement of partition, judicial or extrajudicial. As held by the respondent court in C.A.-G.R. No. 22891-R, Lot 3-A (and other lots) was donated by Jose Samonte to Arcadio Mendoza for which reason, petitioner Trinidad Manuel Mendoza is not entitled to one-half (1/2) of Lot 3 but only to the share of one (1) legitimate child or 1/13 rights and interests, citing Article 996 of the Civil Code. 1 The "Dokumento ng Bilihan" is null and void insofar as it affects the rights and interests of the other petitioners because petitioner Trinidad Manuel Mendoza can only sell her 1/13 rights and interests over Lot 3-A and not more than that. Corollarily, the remaining petitioners can still exercise the right of legal redemption, conformably with Article 1620 of the Civil Code. 2 Disputing these allegations of petitioners, private respondents contend that petitioner Trinidad Manuel Mendoza declared under oath in the "Dokumento ng Bilihan" that Lot 3-A was given to her by virtue of an agreement of partition between her and her children. She declared further that the land in question was sold by her to private respondents with the knowledge and consent of her children. The amount paid therefor was known to her and her children. The document was written in Tagalog, the dialect in Bulacan. It was signed by petitioner Trinidad Manuel Mendoza, as vendor, witnessed by petitioners Pacita Samonte and Juliana Mendoza and prepared and notarized by Atty. Pedro Magsalin, the family lawyer of petitioners Having participated in, consented to and/or benefited from the sale, petitioners are estopped from impugning the validity and enforceability thereof.

Likewise, We affirm. In resolving the first issue, We have to settle two (2) sub-issues: (1) has Lot 3 been partitioned; and (2) if so, has the subject lot been adjudicated to petitioner Trinidad Manuel Mendoza? In thus case, the source of co-ownership among the heirs was intestate succession. Where there are two or more heirs, the whole estate of the decedent is, before its partition, owned in common by such heirs (Article 1078 of the Civil Code). Petitioners' coownership over Lot 3 was extinguished when it was subdivided into Lot 3-A and Lot 3-B, which portions were concretely determined and technically described (see de la Cruz v. Cruz, G.R. No. L-27769, April 17, 1970, 32 SCRA 307). Against the impetuous denial of petitioners that Lot 3 has been partitioned (pp. 19, 96, 121, Rollo) is Exhibit A which is the Subdivision Plan of Lot 3, (LRC) PSD-17370, dated September 7, 1961, duly approved by the Commissioner of Land Registration. It is also Our finding that Lot 3-A has been adjudicated to petitioner Trinidad Manuel Mendoza. We take into account the pertinent provisions of the "Dokumento ng Bilihan" and estoppel on the part of petitioners (pp. 6-8, supra). Therefore, the "Dokumento ng Bilihan" is a valid document. llcd We resolve the second issue based on the previous discussion that the co-ownership has been extinguished. Article 1620 of the Civil Code applies only if the co-ownership still exists. If the property has been partitioned or an identified share has been sold, there is no longer any right of legal redemption (see Umengan v. Butucan, et al., 117 Phil. 325; Caro v. Court of Appeals, et al., G.R. No. L-46001, March 25, 1982, 113 SCRA 10). ACCORDINGLY, the petition is hereby DENIED. The decision dated June 23, 1976 and the resolution dated September 15, 1976 of the Court of Appeals are AFFIRMED. SO ORDERED.

"It bears emphasis that according to the fourth paragraph of the 'Dokumento ng Bilihan' quoted above, the sale made by plaintiff Trinidad Mendoza of Lot 3-A to the defendants had the prior consent and approval of her children, the other plaintiffs herein. "In the opinion of the Court, the paragraphs cited above constitute clear admissions on the part of plaintiff Trinidad Mendoza, who executed said deed of sale, and on the part of plaintiffs Pacita Samonte and Juliana Samonte, who signed the same as witnesses, regarding the existence of the partition agreement adjudicating to plaintiff Trinidad Mendoza the land in question before it was sold to the defendants. "Of course, plaintiffs Trinidad Manuel, Pacita Samonte and Juliana Samonte, who all took the stand, vehemently denied having read and understood the contents of the 'Documento ng Bilihan' which they admittedly signed. According to plaintiff Trinidad Manuel, she affixed her thumbmark on the document when her sister Lourdes Manuel, the mother of defendant Renato Samonte, asked her to do so and promised to take care of the 'interests' of her children. On her part, Pacita Samonte claimed that although she was able to read the title of the document, she did not read the contents thereof, however, since she signed the same only upon the assurance of her aunt that her mother Trinidad Mendoza, had already given her conformity. Juliana Samonte also denied having read the document but alleged that her failure to do so was due to her illness then. "But in the opinion of the Court, all these denials cannot prevail over the presumption that the said plaintiffs understood the contents of the deed of sale when (sic) they signed the same. For following the ordinary course of human nature, one does not affix his signature on a legal document if he does not understand the same. Besides, it appears that the 'document (sic) ng Bilihan' was written in a dialect spoken by and known to the said plaintiffs who while on the stand all testified in the Tagalog dialect. "Moreover, according to plaintiff Romeo Mendoza, the son of plaintiff Trinidad Mendoza, the 'Documento ng Bilihan' was prepared by their lawyer, Atty. Pedro Magsalin who according to the defendant Renato Samonte read the same to the plaintiffs Trinidad Mendoza, Juliana and

Property | Art. 484 to 493 | 22

Art. 487 G.R. No. 18009 January 10, 1923 EMILIO PUNSALAN, ET AL. vs. C. BOON LIAT, ET AL. 044 Phil 320

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

EMILIO PUNSALAN ET AL., plaintiffs-appellants, vs. C. BOON LIAT ET AL., defendantsappellants.

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, tow 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
Property | Art. 484 to 493 | 23

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

AVANCEA, J p:

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: "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." 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. <see De Guia vs. CA>

subject property. In its assailed Resolution dated 25 January 2007, the Court of Appeals refused to reconsider its earlier Decision of 19 September 2006. In their Complaint[5] filed on 1 July 2002 with the MTC of Alaminos City, docketed as Civil Case No. 1990, respondents alleged that they are the registered owners of the subject property, a two-storey building erected on a parcel of land registered under Transfer Certificate of Title (TCT) No. 16193 in the Registry of Deeds of Pangasinan, described and bounded as follows: A parcel of land (Lot 13033-D-2, Psd-01550-022319, being a portion of Lot 13033-D, Psd-018529, LRC Rec. No. ____) situated in Pob., Alaminos City; bounded on the NW. along line 1-2 by Lot 13035-D-1 of the subdivision plan; on the NE. along line 2-3 by Vericiano St.; on the SE. along line 3-4 by Lot 13033-D-2 of the subdivision plan; on the SW. along line 4-1 by Lot 575, Numeriano Rabago. It is coverd by TCT No. 16193 of the Register of Deeds of Pangasinan (Alaminos City) and declared for taxation purposes per T.D. No. 2075, and assessed in the sum of P93,400.00.[6] Respondents rented out the subject property to petitioner on a month to month basis for P9,000.00 per month.[7] Both parties agreed that effective 1 October 2001, the rental payment shall be increased from P9,000.00 to P15,000.00. Petitioner, however, failed or refused to pay the corresponding increase on rent when his rental obligation for the month of 1 October 2001 became due. The rental dispute was brought to the Lupon Tagapagpamayapa of Poblacion, Alaminos, Pangasinan, in an attempt to amicably settle the matter but the parties failed to reach an agreement, resulting in the issuance by the Barangay Lupon of a Certification to file action in court on 18 January 2002. On 10 June 2002, respondent George de Castro sent a letter to petitioner terminating their lease agreement and demanding that the latter vacate and turn over the subject property to respondents. Since petitioner stubbornly refused to comply with said demand letter, respondent George de Castro, together with his siblings and co-respondents, Annie de Castro, Felomina de Castro Uban and Jesus de Castro, filed the Complaint for ejectment before the MTC. It must be noted, at this point, that although the Complaint stated that it was being filed by all of the respondents, the Verification and the Certificate of Non-Forum Shopping were signed by respondent George de Castro alone. He would subsequently attach to his position paper filed before the MTC on 28 October 2002 the Special Powers of Attorney (SPAs) executed by his sisters Annie de Castro and Felomina de Castro Uban dated 7 February 2002 and 14 March 2002 respectively, authorizing him to institute the ejectment case against petitioner. Petitioner, on the other hand, countered that there was no agreement between the parties to increase the monthly rentals and respondents demand for an increase was exorbitant. The agreed monthly rental was only for the amount of P9,000.00 and he was religiously paying the same every month. Petitioner then argued that respondents failed to comply with the jurisdictional requirement of conciliation before the Barangay Lupon prior to the filing of Civil Case. No. 1990, meriting the dismissal of their Complaint therein. The Certification to file action issued by the Barangay Lupon appended to the respondents Complaint merely referred to the issue of rental increase and not the matter of ejectment. Petitioner asserted further that the MTC lacked jurisdiction over the ejectment suit, since respondents Complaint was devoid of any allegation that there was an unlawful withholding of the subject property by the petitioner.[8] During the Pre-Trial Conference[9] held before the MTC, the parties stipulated that in May 2002, petitioner tendered to respondents the sum of P9,000.00 as rental payment for the month of January 2002; petitioner paid rentals for the months of October 2001 to

January 2002 but only in the amount of P9,000.00 per month; respondents, thru counsel, sent a letter to petitioner on 10 June 2002 terminating their lease agreement which petitioner ignored; and the Barangay Lupon did issue a Certification to file action after the parties failed to reach an agreement before it. After the submission of the parties of their respective Position Papers, the MTC, on 21 November 2002, rendered a Decision[10] dismissing respondents Complaint in Civil Case No. 1990 for failure to comply with the prior conciliation requirement before the Barangay Lupon. The decretal portion of the MTC Decision reads: WHEREFORE, premised considered, judgment is hereby rendered ordering the dismissal of this case. Costs against the [herein respondents]. On appeal, docketed as Civil Case No. A-2835, the RTC of Alaminos, Pangasinan, Branch 54, promulgated its Decision[11] dated 27 June 2005 affirming the dismissal of respondents Complaint for ejectment after finding that the appealed MTC Decision was based on facts and law on the matter. The RTC declared that since the original agreement entered into by the parties was for petitioner to pay only the sum of P9.000.00 per month for the rent of the subject property, and no concession was reached by the parties to increase such amount to P15.000.00, petitioner cannot be faulted for paying only the originally agreed upon monthly rentals. Adopting petitioners position, the RTC declared that respondents failure to refer the matter to the Barangay court for conciliation process barred the ejectment case, conciliation before the Lupon being a condition sine qua non in the filing of ejectment suits. The RTC likewise agreed with petitioner in ruling that the allegation in the Complaint was flawed, since respondents failed to allege that there was an unlawful withholding of possession of the subject property, taking out Civil Case No. 1990 from the purview of an action for unlawful detainer. Finally, the RTC decreed that respondents Complaint failed to comply with the rule that a co-owner could not maintain an action without joining all the other co-owners. Thus, according to the dispositive portion of the RTC Decision: WHEREFORE the appellate Court finds no cogent reason to disturb the findings of the court a quo. The Decision dated November 21, 2002 appealed from is hereby AFFIRMED IN TOTO.[12] Undaunted, respondents filed a Petition for Review on Certiorari[13] with the Court of Appeals where it was docketed as CA-G.R. SP No. 90906. Respondents argued in their Petition that the RTC gravely erred in ruling that their failure to comply with the conciliation process was fatal to their Complaint, since it is only respondent George de Castro who resides in Alaminos City, Pangasinan, while respondent Annie de Castro resides in Pennsylvania, United States of America (USA); respondent Felomina de Castro Uban, in California, USA; and respondent Jesus de Castro, now substituted by his wife, Martiniana, resides in Manila. Respondents further claimed that the MTC was not divested of jurisdiction over their Complaint for ejectment because of the mere absence therein of the term unlawful withholding of their subject property, considering that they had sufficiently alleged the same in their Complaint, albeit worded differently. Finally, respondents posited that the fact that only respondent George de Castro signed the Verification and the Certificate of Non-Forum Shopping attached to the Complaint was irrelevant since the other respondents already executed Special Powers of Attorney (SPAs) authorizing him to act as their attorney-in-fact in the institution of the ejectment suit against the petitioner.

LEO WEE, Petitioner,

- versus -

GEORGE DE CASTRO (on his behalf and as attorney-in-fact of ANNIE DE CASTRO and FELOMINA UBAN) and MARTINIANA DE CASTRO, Respondents.

DECISION CHICO-NAZARIO, J.: Before this Court is a Petition for Review on Certiorari[1] under Rule 45 of the Revised Rules of Court filed by petitioner Leo Wee, seeking the reversal and setting aside of the Decision[2] dated 19 September 2006 and the Resolution[3] dated 25 January 2007 of the Court of Appeals in CA-G.R. SP No. 90906. The appellate court, in its assailed Decision, reversed the dismissal of Civil Case. No. 1990, an action for ejectment instituted by respondent George de Castro, on his own behalf and on behalf of Annie de Castro, Felomina de Castro Uban and Jesus de Castro[4] against petitioner, by the Municipal Trial Court (MTC) of Alaminos City, which was affirmed by the Regional Trial Court (RTC), Branch 54, Alaminos City, Pangasinan; and, ruling in favor of the respondents, ordered the petitioner to vacate the

Property | Art. 484 to 493 | 24

On 19 September 2006, the Court of Appeals rendered a Decision granting the respondents Petition and ordering petitioner to vacate the subject property and turn over the same to respondents. The Court of Appeals decreed: WHEREFORE, premises considered, the instant petition is GRANTED. The assailed Decision dated June 27, 2005 issued by the RTC of Alaminos City, Pangasinan, Branch 54, is REVERSED and SET ASIDE. A new one is hereby rendered ordering [herein petitioner] Leo Wee to SURRENDER and VACATE the leased premises in question as well as to pay the sum of P15,000.00 per month reckoned from March, 2002 until he shall have actually turned over the possession thereof to petitioners plus the rental arrearages of P30,000.00 representing unpaid increase in rent for the period from October, 2001 to February, 2002, with legal interest at 6% per annum to be computed from June 7, 2002 until finality of this decision and 12% thereafter until full payment thereof. Respondent is likewise hereby ordered to pay petitioners the amount of P20,000.00 as and for attorneys fees and the costs of suit.[14] In a Resolution dated 25 January 2007, the appellate court denied the Motion for Reconsideration interposed by petitioner for lack of merit. Petitioner is now before this Court via the Petition at bar, making the following assignment of errors: I. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN DECLARING THAT CONCILIATION PROCESS IS NOT A JURISDICTIONAL REQUIREMENT THAT NON-COMPLIANCE THEREWITH DOES NOT AFFECT THE JURISDICTION IN EJECTMENT CASE; II. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN UPHOLDING THE SUFFICIENCY OF THE ALLEGATIONS IN THE COMPLAINT FOR EJECTMENT DESPITE THE WANT OF ALLEGATION OF UNLAWFUL WITHOLDING PREMISES (sic) QUESTIONED BY PETITIONER; III. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN RULING THAT THE FILING OF THE COMPLAINT OF RESPONDENT GEORGE DE CASTRO WITHOUT JOINING ALL HIS OTHER CO-OWNERS OVER THE SUBJECT PROPERTY IS PROPER; IV. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN NOT APPLYING SUPREME COURT CIRCULAR NO. 10 WHICH DIRECTS A PLEADER TO INDICATE IN HIS PLEADINGS HIS OFFICIAL RECEIPT OF HIS PAYMENT OF HIS IBP DUES.[15]

Petitioner avers that respondents failed to go through the conciliation process before the Barangay Lupon, a jurisdictional defect that bars the legal action for ejectment. The Certification to file action dated 18 January 2002 issued by the Barangay Lupon, appended by the respondents to their Complaint in Civil Case No. 1990, is of no moment, for it attested only that there was confrontation between the parties on the matter of rental increase but not on unlawful detainer of the subject property by the petitioner. If it was the intention of the respondents from the very beginning to eject petitioner from the subject property, they should have brought up the alleged unlawful stay of the petitioner on the subject property for conciliation before the Barangay Lupon. The barangay justice system was established primarily as a means of easing up the congestion of cases in the judicial courts. This could be accomplished through a proceeding before the barangay courts which, according to the one who conceived of the system, the late Chief Justice Fred Ruiz Castro, is essentially arbitration in character; and to make it truly effective, it should also be compulsory. With this primary objective of the barangay justice system in mind, it would be wholly in keeping with the underlying philosophy of Presidential Decree No. 1508 (Katarungang Pambarangay Law), which would be better served if an out-of-court settlement of the case is reached voluntarily by the parties.[16] To ensure this objective, Section 6 of Presidential Decree No. 1508 requires the parties to undergo a conciliation process before the Lupon Chairman or the Pangkat ng Tagapagkasundo as a precondition to filing a complaint in court subject to certain exceptions. The said section has been declared compulsory in nature.[17] Presidential Decree No. 1508 is now incorporated in Republic Act No. 7160 (The Local Government Code), which took effect on 1 January 1992. The pertinent provisions of the Local Government Code making conciliation a precondition to the filing of complaints in court are reproduced below: SEC. 412. Conciliation.- (a) Pre-condition to filing of complaint in court. No complaint, petition, action, or proceeding involving any matter within the authority of the lupon shall be filed or instituted directly in court or any other government office for adjudication, unless there has been a confrontation between the parties before the lupon chairman or the pangkat, and that no conciliation or settlement has been reached as certified by the lupon secretary or pangkat secretary as attested to by the lupon or pangkat chairman or unless the settlement has been repudiated by the parties thereto. (b) Where parties may go directly to court. The parties may go directly to court in the following instances: (1) Where the accused is under detention; (2) Where a person has otherwise been deprived of personal liberty calling for habeas corpus proceedings; (3) Where actions are coupled with provisional remedies such as preliminary injunction, attachment, delivery of personal property, and support pendente lite; and (4) Where the action may otherwise be barred by the statute of limitations.

(c) Conciliation among members of indigenous cultural communities. The customs and traditions of indigenous cultural communities shall be applied in settling disputes between members of the cultural communities. SEC. 408. Subject Matter for Amicable Settlement; Exception Thereto. The lupon of each barangay shall have authority to bring together the parties actually residing in the same city or municipality for amicable settlement of all disputes except: (a) Where one party is the government or any subdivision or instrumentality thereof; (b) Where one party is a public officer or employee, and the dispute relates to the performance of his official functions; (c) Offenses punishable by imprisonment exceeding one (1) year or a fine exceeding Five thousand pesos (P5,000.00); (d) Offenses where there is no private offended party; (e) Where the dispute involves real properties located in different cities or municipalities unless the parties thereto agree to submit their differences to amicable settlement by an appropriate lupon; (f) Disputes involving parties who actually reside in barangays of different cities or municipalities, except where such barangay units adjoin each other and the parties thereto agree to submit their differences to amicable settlement by an appropriate lupon; (g) Such other classes of disputes which the President may determine in the interest of justice or upon the recommendation of the Secretary of Justice. There is no question that the parties to this case appeared before the Barangay Lupon for conciliation proceedings. There is also no dispute that the only matter referred to the Barangay Lupon for conciliation was the rental increase, and not the ejectment of petitioner from the subject property. This is apparent from a perusal of the Certification to file action in court issued by the Barangay Lupon on 18 January 2002, to wit: CERTIFICATION TO FILE COMPLAINTS This is to certify that: 1. There was personal confrontation between parties before the barangay Lupon regarding rental increase of a commercial building but conciliation failed; Therefore, the corresponding dispute of the above-entitled case may now be filed in Court/Government Office.[18] (Emphasis ours.)
Property | Art. 484 to 493 | 25

2.

The question now to be resolved by this Court is whether the Certification dated 18 January 2002 issued by the Barangay Lupon stating that no settlement was reached by the parties on the matter of rental increase sufficient to comply with the prior conciliation requirement under the Katarungang Pambarangay Law to authorize the respondents to institute the ejectment suit against petitioner. The Court rules affirmatively. While it is true that the Certification to file action dated 18 January 2002 of the Barangay Lupon refers only to rental increase and not to the ejectment of petitioner from the subject property, the submission of the same for conciliation before the Barangay Lupon constitutes sufficient compliance with the provisions of the Katarungang Pambarangay Law. Given the particular circumstances of the case at bar, the conciliation proceedings for the amount of monthly rental should logically and reasonably include also the matter of the possession of the property subject of the rental, the lease agreement, and the violation of the terms thereof. We now proceed to discuss the meat of the controversy. The contract of lease between the parties did not stipulate a fixed period. Hence, the parties agreed to the payment of rentals on a monthly basis. On this score, Article 1687 of the Civil Code provides: Art. 1687. If the period for the lease has not been fixed, it is understood to be from year to year, if the rent agreed upon is annual; from month to month, if it is monthly; from week to week, if the rent is weekly; and from day to day, if the rent is to be paid daily. However, even though a monthly rent is paid, and no period for the lease has been set, the courts may fix a longer term for the lease after the lessee has occupied the premises for over one year. If the rent is weekly, the courts may likewise determine a longer period after the lessee has been in possession for over six months. In case of daily rent, the courts may also fix a longer period after the lessee has stayed in the place for over one month. (Emphasis supplied.) The rentals being paid monthly, the period of such lease is deemed terminated at the end of each month. Thus, respondents have every right to demand the ejectment of petitioners at the end of each month, the contract having expired by operation of law. Without a lease contract, petitioner has no right of possession to the subject property and must vacate the same. Respondents, thus, should be allowed to resort to an action for ejectment before the MTC to recover possession of the subject property from petitioner. Corollarily, petitioners ejectment, in this case, is only the reasonable consequence of his unrelenting refusal to comply with the respondents demand for the payment of rental increase agreed upon by both parties. Verily, the lessors right to rescind the contract of lease for non-payment of the demanded increased rental was recognized by this Court in Chua v. Victorio[19]: The right of rescission is statutorily recognized in reciprocal obligations, such as contracts of lease. In addition to the general remedy of rescission granted under Article 1191 of the Civil Code, there is an independent provision granting the remedy of rescission for breach of any of the lessor or lessees statutory

obligations. Under Article 1659 of the Civil Code, the aggrieved party may, at his option, ask for (1) the rescission of the contract; (2) rescission and indemnification for damages; or (3) only indemnification for damages, allowing the contract to remain in force. Payment of the rent is one of a lessees statutory obligations, and, upon non-payment by petitioners of the increased rental in September 1994, the lessor acquired the right to avail of any of the three remedies outlined above. (Emphasis supplied.) Petitioner next argues that respondent George de Castro cannot maintain an action for ejectment against petitioner, without joining all his co-owners. Article 487 of the New Civil Code is explicit on this point: ART. 487. Any one of the co-owners may bring an action in ejectment. This article covers all kinds of action for the recovery of possession, i.e., forcible entry and unlawful detainer (accion interdictal), recovery of possession (accion publiciana), and recovery of ownership (accion de reivindicacion). As explained by the renowned civilist, Professor Arturo M. Tolentino[20]: 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.) In the more recent case of Carandang v. Heirs of De Guzman,[21] this Court declared that a co-owner is not even a necessary party to an action for ejectment, for complete relief can be afforded even in his absence, thus: In sum, in suits to recover properties, all co-owners are real parties in interest. However, pursuant to Article 487 of the Civil Code and the relevant jurisprudence, any one of them may bring an action, any kind of action for the recovery of co-owned properties. Therefore, only one of the co-owners, namely the co-owner who filed the suit for the recovery of the co-owned property, is an indispensable party thereto. The other co-owners are not indispensable parties. They are not even necessary parties, for a complete relief can be afforded in the suit even without their participation, since the suit is presumed to have been filed for the benefit of all co-owners. Moreover, respondents Annie de Castro and Felomina de Castro Uban each executed a Special Power of Attorney, giving respondent George de Castro the authority to initiate Civil Case No. 1990. A power of attorney is an instrument in writing by which one person, as principal, appoints another as his agent and confers upon him the authority to perform certain specified acts or kinds of acts on behalf of the principal. The written authorization itself is the power of

attorney, and this is clearly indicated by the fact that it has also been called a letter of attorney.[22] Even then, the Court views the SPAs as mere surplusage, such that the lack thereof does not in any way affect the validity of the action for ejectment instituted by respondent George de Castro. This also disposes of petitioners contention that respondent George de Castro lacked the authority to sign the Verification and the Certificate of NonForum Shopping. As the Court ruled in Mendoza v. Coronel[23]: We likewise hold that the execution of the certification against forum shopping by the attorney-in-fact in the case at bar is not a violation of the requirement that the parties must personally sign the same. The attorney-in-fact, who has authority to file, and who actually filed the complaint as the representative of the plaintiff co-owner, pursuant to a Special Power of Attorney, is a party to the ejectment suit. In fact, Section 1, Rule 70 of the Rules of Court includes the representative of the owner in an ejectment suit as one of the parties authorized to institute the proceedings. (Emphasis supplied.) Failure by respondent George de Castro to attach the said SPAs to the Complaint is innocuous, since it is undisputed that he was granted by his sisters the authority to file the action for ejectment against petitioner prior to the institution of Civil Case No. 1990. The SPAs in his favor were respectively executed by respondents Annie de Castro and Felomina de Castro Uban on 7 February 2002 and 14 March 2002; while Civil Case No. 1990 was filed by respondent George de Castro on his own behalf and on behalf of his siblings only on 1 July 2002, or way after he was given by his siblings the authority to file said action. The Court quotes with approval the following disquisition of the Court of Appeals: Moreover, records show that [herein respondent] George de Castro was indeed authorized by his sisters Annie de Castro and Felomina de Castro Uban, to prosecute the case in their behalf as shown by the Special Power of Attorney dated February 7, 2002 and March 14, 2002. That these documents were appended only to [respondent George de Castros] position paper is of no moment considering that the authority conferred therein was given prior to the institution of the complaint in July, 2002. x x x.[24] Respondent deceased Jesus de Castros failure to sign the Verification and Certificate of Non-Forum Shopping may be excused since he already executed an Affidavit[25] with respondent George de Castro that he had personal knowledge of the filing of Civil Case No. 1990. In Torres v. Specialized Packaging Development Corporation,[26] the Court ruled that the personal signing of the verification requirement was deemed substantially complied with when, as in the instant case, two out of 25 real parties-in-interest, who undoubtedly have sufficient knowledge and belief to swear to the truth of the allegations in the petition, signed the verification attached to it. In the same vein, this Court is not persuaded by petitioners assertion that respondents failure to allege the jurisdictional fact that there was unlawful withholding of the subject property was fatal to their cause of action. It is apodictic that what determines the nature of an action as well as which court has jurisdiction over it are the allegations in the complaint and the character of the relief sought. In an unlawful detainer case, the defendants possession was originally lawful but ceased to be so upon the expiration of his right to possess. Hence, the phrase unlawful
Property | Art. 484 to 493 | 26

withholding has been held to imply possession on the part of defendant, which was legal in the beginning, having no other source than a contract, express or implied, and which later expired as a right and is being withheld by defendant.[27] In Barba v. Court of Appeals,[28] the Court held that although the phrase unlawfully withholding was not actually used by therein petitioner in her complaint, the Court held that her allegations, nonetheless, amounted to an unlawful withholding of the subject property by therein private respondents, because they continuously refused to vacate the premises even after notice and demand. In the Petition at bar, respondents alleged in their Complaint that they are the registered owners of the subject property; the subject property was being occupied by the petitioner pursuant to a monthly lease contract; petitioner refused to accede to respondents demand for rental increase; the respondents sent petitioner a letter terminating the lease agreement and demanding that petitioner vacate and turn over the possession of the subject property to respondents; and despite such demand, petitioner failed to surrender the subject property to respondents.[29] The Complaint sufficiently alleges the unlawful withholding of the subject property by petitioner, constitutive of unlawful detainer, although the exact words unlawful withholding were not used. In an action for unlawful detainer, an allegation that the defendant is unlawfully withholding possession from the plaintiff is deemed sufficient, without necessarily employing the terminology of the law.[30] Petitioners averment that the Court of Appeals should have dismissed respondents Petition in light of the failure of their counsel to attach the Official Receipt of his updated payment of Integrated Bar of the Philippines (IBP) dues is now moot and academic, since respondents counsel has already duly complied therewith. It must be stressed that judicial cases do not come and go through the portals of a court of law by the mere mandate of technicalities.[31] Where a rigid application of the rules will result in a manifest failure or miscarriage of justice, technicalities should be disregarded in order to resolve the case. [32] Finally, we agree in the ruling of the Court of Appeals that petitioner is liable for the payment of back rentals, attorneys fees and cost of the suit. Respondents must be duly indemnified for the loss of income from the subject property on account of petitioners refusal to vacate the leased premises. WHEREFORE, premises considered, the instant Petition is DENIED. The Decision dated 19 September 2006 and Resolution dated 25 January 2007 of the Court of Appeals in CA-G.R. SP No. 90906 are hereby AFFIRMED in toto. Costs against petitioner. SO ORDERED.

NACHURA, J.:

x x x Compulsory joinder of indispensable parties. Parties in interest without whom no final determination can be had of an action shall be joined either as plaintiffs or defendants. What the Court wants to say here is that the instant case should have been dismissed without prejudice a long time ago for lack of cause of action as the plaintiffs spouses Marcos Malazarte and Nieves Plasabas Malazarte have no complete legal personality to sue by themselves alone without joining the brothers and sisters of Nieves who are as INDISPENSABLE as the latter in the final determination of the case. Not impleading them, any judgment would have no effectiveness. They are that indispensable that a final decree would necessarily affect their rights, so that the Court cannot proceed without their presence. There are abundant authorities in this regard. Thus The general rule with reference to the making of parties in a civil action requires the joinder of all indispensable parties under any and all conditions, their presence being a sine qua non of the exercise of judicial power. (Borlasa v. Polistico, 47 Phil. 345, 348) For this reason, our Supreme Court has held that when it appears of record that there are other persons interested in the subject matter of the litigation, who are not made parties to the action, it is the duty of the court to suspend the trial until such parties are made either plaintiffs or defendants. (Pobre, et al. v. Blanco, 17 Phil. 156). x x x Where the petition failed to join as party defendant the person interested in sustaining the proceeding in the court, the same should be dismissed. x x x When an indispensable party is not before the court, the action should be dismissed. (People, et al. v. Rodriguez, et al., G.R. Nos. L-14059-62, September 30, 1959) (sic) Parties in interest without whom no final determination can be had of an action shall be joined either as plaintiffs or defendants. (Sec. 7, Rule 3, Rules of Court). The burden of procuring the presence of all indispensable parties is on the plaintiff. (39 Amjur [sic] 885). The evident purpose of the rule is to prevent the multiplicity of suits by requiring the person arresting a right against the defendant to include with him, either as co-plaintiffs or as co-defendants, all persons standing in the same position, so that the whole matter in
Property | Art. 484 to 493 | 27

Assailed in this petition for review on certiorari under Rule 45 of the Rules of Court are the May 12, 2004 Decision[1] of the Court of Appeals (CA) in CA-G.R. CV No. 43085 and the December 1, 2004 Resolution[2] denying reconsideration of the challenged decision. The pertinent facts and proceedings follow. In 1974, petitioners[3] filed a complaint for recovery of title to property with damages before the Court of First Instance (now, Regional Trial Court [RTC]) of Maasin, Southern Leyte against respondents. The case was docketed as Civil Case No. R-1949. The property subject of the case was a parcel of coconut land in Canturing, Maasin, Southern Leyte, declared under Tax Declaration No. 3587 in the name of petitioner Nieves with an area of 2.6360 hectares.[4] In their complaint, petitioners prayed that judgment be rendered confirming their rights and legal title to the subject property and ordering the defendants to vacate the occupied portion and to pay damages.[5] Respondents, for their part, denied petitioners allegation of ownership and possession of the premises, and interposed, as their main defense, that the subject land was inherited by all the parties from their common ancestor, Francisco Plasabas.[6] Revealed in the course of the trial was that petitioner Nieves, contrary to her allegations in the complaint, was not the sole and absolute owner of the land. Based on the testimonies of petitioners witnesses, the property passed on from Francisco to his son, Leoncio; then to Jovita Talam, petitioner Nieves grandmother; then to Antonina Talam, her mother; and then to her and her siblingsJose, Victor and Victoria.[7] After resting their case, respondents raised in their memorandum the argument that the case should have been terminated at inception for petitioners failure to implead indispensable parties, the other co-owners Jose, Victor and Victoria. In its April 19, 1993 Order,[8] the trial court, without ruling on the merits, dismissed the case without prejudice, thus: This Court, much as it wants to decide the instant case on the merits, being one of the old inherited cases left behind, finds difficulty if not impossibility of doing so at this stage of the proceedings when both parties have already rested their cases. Reluctantly, it agrees with the defendants in the observation that some important indispensable consideration is conspicuously wanting or missing. It is not the Courts wish to turn its back on the crucial part of the case, which is the pronouncement of the judgment to settle the issues raised in the pleadings of the parties once and for all, after all the time, effort and expense spent in going through the trial process. But, rules are rules. They have to be followed, to arrive at a fair and just verdict. Section 7, Rule 3 of the Rules of Court provides:

NIEVES PLASABAS and MARCOS MALAZARTE, Petitioners,

- versus -

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

dispute may be determined once and for all in one litigation. (Palarca v. Baginsi, 38 Phil. 177, 178). An indispensable party is a party who has such an interest in the controversy or subject matter that a final adjudication cannot be made, in his absence, without inquiring or affecting such interest; a party who has not only an interest of such a nature that a final decree cannot be made without affecting his interest or leaving the controversy in such a condition that its final determination may be wholly inconsistent with equity and good conscience. (67 C.J.S. 892). Indispensable parties are those without whom no action can be finally determined. (Sanidad v. Cabataje, 5 Phil. 204) WHEREFORE, IN VIEW OF ALL THE FOREGOING CONSIDERATIONS, both the complaint and the counterclaim in the instant case are ordered DISMISSED without prejudice. No pronouncement as to costs. SO ORDERED.[9] Aggrieved, petitioners elevated the case to the CA. In the challenged May 12, 2004 Decision,[10] the appellate court affirmed the ruling of the trial court. The CA, further, declared that the non-joinder of the indispensable parties would violate the principle of due process, and that Article 487 of the Civil Code could not be applied considering that the complaint was not for ejectment, but for recovery of title or a reivindicatory action.[11] With their motion for reconsideration denied in the further assailed December 1, 2004 Resolution,[12] petitioners filed the instant petition. The Court grants the petition and remands the case to the trial court for disposition on the merits. Article 487 of the Civil Code provides that any one of the co-owners may bring an action for ejectment. The article covers all kinds of actions for the recovery of possession, including an accion publiciana and a reivindicatory action. A co-owner may file suit without necessarily joining all the other co-owners as co-plaintiffs because the suit is deemed to be instituted for the benefit of all. Any judgment of the court in favor of the plaintiff will benefit the other co-owners, but if the judgment is adverse, the same cannot prejudice the rights of the unimpleaded co-owners.[13] With this disquisition, there is no need to determine whether petitioners complaint is one for ejectment or for recovery of title. To repeat, Article 487 of the Civil Code applies to both actions. Thus, petitioners, in their complaint, do not have to implead their co-owners as parties. The only exception to this rule is when the action is for the benefit of the plaintiff alone who claims to be the sole owner and is, thus, entitled to the possession thereof. In such a case, the action will not prosper unless the plaintiff impleads the other co-owners who are indispensable parties.[14]

Here, the allegation of petitioners in their complaint that they are the sole owners of the property in litigation is immaterial, considering that they acknowledged during the trial that the property is co-owned by Nieves and her siblings, and that petitioners have been authorized by the co-owners to pursue the case on the latters behalf.[15] Impleading the other co-owners is, therefore, not mandatory, because, as mentioned earlier, the suit is deemed to be instituted for the benefit of all. In any event, the trial and appellate courts committed reversible error when they summarily dismissed the case, after both parties had rested their cases following a protracted trial commencing in 1974, on the sole ground of failure to implead indispensable parties. The rule is settled that the non-joinder of indispensable parties is not a ground for the dismissal of an action. The remedy is to implead the non-party claimed to be indispensable. Parties may be added by order of the court on motion of the party or on its own initiative at any stage of the action and/or at such times as are just. If petitioner refuses to implead an indispensable party despite the order of the court, the latter may dismiss the complaint/petition for the plaintiffs/petitioner's failure to comply therewith.[16] WHEREFORE, premises considered, the instant petition is GRANTED, and the case is REMANDED to the trial court for appropriate proceedings. The trial court is further DIRECTED to decide on the merits of the civil case WITH DISPATCH. SO ORDERED.

Art. 488 G.R. No. L-44546 January 29, 1988 RUSTICO ADILLE vs. COURT OF APPEALS, ET AL.

SECOND DIVISION [G.R. No. L-44546. January 29, 1988.]

RUSTICO ADILLE, petitioner, vs. THE HONORABLE COURT OF APPEALS, EMETERIA ASEJO, TEODORICA ASEJO, DOMINGO ASEJO, JOSEFA ASEJO, and SANTIAGO ASEJO, respondents.

SYLLABUS 1. CIVIL LAW; SALES; RIGHT OF REPURCHASE EXERCISED BY A CO-OWNER; PERTAINS TO HIS SHARE ALONE; OWNERSHIP OVER THE ENTIRE PROPERTY NOT VESTED IN FAVOR OF REDEEMING CO-OWNER. The result is that the property remains to be in a condition of co-ownership. While a vendee a retro, under Article 1613 of the Code, "may not be compelled to consent to a partial redemption," the redemption by one co-heir or co-owner of the property in its totality does not vest in him ownership over it. Failure on the part of all the co-owners to redeem it entitles the vendee a retro to retain the property and consolidate title thereto in his name. But the provision does not give to the redeeming coowner the right to the entire property. It does not provide for a mode of terminating a coownership. 2. ID.; ID.; ID.; EXISTING CO-OWNERSHIP NOT TERMINATED EVEN THOUGH THE LATTER SECURED TITLE OVER THE PARCEL IN HIS NAME. Neither does the fact that the petitioner had succeeded in securing title over the parcel in his name terminate the existing co-ownership. While his half-brothers and sisters are, as we said, liable to him for reimbursement as and for their shares in redemption expenses, he cannot claim exclusive right to the property owned in common. Registration of property is not a means of acquiring ownership. It operates as a mere notice of existing title, that is, if there is one. The petitioner must then be said to be a trustee of the property on behalf of the private respondents. The Civil Code states: ART. 1456. If property is aquired 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. 3. ID.; ID.; ID.; RELATION OF CO-OWNERSHIP; TERMINATION THEREOF BY PRESCRIPTION MUST BE PRECEDED BY REPUDIATION. This Court is not unaware of the well-established principle that prescription bars any demand on property (owned in common) held by another (co-owner) following the required number of years. In that event, the party in possession acquires title to the property and the state of co-ownership is ended. In the case at bar, the property was registered in 1955 by the petitioner, solely in his name, while the claim of the private respondents was presented in 1974. Has prescription then, set in? We
Property | Art. 484 to 493 | 28

hold in the negative. Prescription, as a mode of terminating a relation of co-ownership, must have been preceded by repudiation (of the co-ownership). 4. ID.; ID.; ID.; ID.; ID.; REQUISITES ON THE ACT OF REPUDIATION. The act of repudiation, in turn, is subject to certain conditions: (1) a co-owner repudiates the coownership; (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. The instant case shows that the petitioner had not complied with these requisites. We are not convinced that he had repudiated the co-ownership; on the contrary, he had deliberately kept the private respondents in the dark by feigning sole heirship over the estate under dispute. He cannot therefore be said to have "made known" his efforts to deny the coownership. 5. ID.; LAND REGISTRATION; REGISTRATION UNDER THE TORRENS SYSTEM, NOT A MEANS TO SHIELD FRAUD. 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 a 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 longstanding rule that registration operates as a universal notice of title. 6. ID.; ID.; CONSTRUCTIVE TRUST: ACTION TO ENFORCE IT RECKONED FROM ACTUAL DISCOVERY OF THE ACT OF DEFRAUDATION. For the same reason, we cannot dismiss the private respondents' claims commenced in 1974 over the estate registered in 1955. While actions to enforce a constructive trust prescribes in ten years, reckoned from the date of the registration of the property, we, as we said, are not prepared to count the period from such a date in this case. We note the petitioner's sub rosa efforts to get hold of the property exclusively for himself beginning with his fraudulent misrepresentation in his unilateral affidavit of extrajudicial settlement that he is "the only heir and child of his mother Feliza with the consequence that he was able to secure title in his name also." Accordingly, we hold that the right of the private respondents commenced from the time they actually discovered the petitioner's act of defraudation. According to the respondent Court of Appeals, they came to know [of it] apparently only during the progress of the litigation." Hence, prescription is not a bar. 7. REMEDIAL LAW; CIVIL PROCEDURE; PRESCRIPTION AS AN AFFIRMATIVE DEFENSE; DEEMED WAIVED IF NOT PLEADED IN A MOTION TO DISMISS OR IN THE ANSWER. Moreover, and as a rule, prescription is an affirmative defense that must be pleaded either in a motion to dismiss or in the answer otherwise it is deemed waived, and here, the petitioner never raised that defense. There are recognized exceptions to this rule, but the petitioner has not shown why they apply.

property," says this modern thinker, that one "will mobilize his deepest protective devices, and anybody that threatens his possessions will arouse his most passionate enmity." 1 The task of this Court, however, is not to judge the wisdom of values; the burden of reconstructing the social order is shouldered by the political leadership and the people themselves. The parties have come to this Court for relief and accordingly, our responsibility is to give them that relief pursuant to the decree of law. The antecedent facts are quoted from the decision 2 appealed from: xxx xxx xxx

The petition raises a purely legal issue: May a co-owner acquire exclusive ownership over the property held in common? cdphil Essentially, it is the petitioner's contention that the property subject of dispute devolved upon him upon the failure of his co-heirs to join him in its redemption within the period required by law. He relies on the provisions of Article 1515 of the old Civil Code, Article 1613 of the present Code, giving the vendee a retro the right to demand redemption of the entire property. There is no merit in this petition. The right of repurchase may be exercised by a co-owner with respect to his share alone. 5 While the records show that the petitioner redeemed the property in its entirety, shouldering the expenses therefor, that did not make him the owner of all of it. In other words, it did not put to end the existing state of co-ownership. Necessary expenses may be incurred by one co-owner, subject to his right to collect reimbursement from the remaining co-owners. 6 There is no doubt that redemption of property entails a necessary expense. Under the Civil Code: ART. 488. Each co-owner shall have a right to compel the other co-owners to contribute to the expenses of preservation of the thing or right owned in common and to the taxes. Any one of the latter may exempt himself from this obligation by renouncing so much of his undivided interest as may be equivalent to his share of the expenses and taxes. No such waiver shall be made if it is prejudicial to the co-ownership. The result is that the property remains to be in a condition of co-ownership. While a vendee a retro, under Article 1613 of the Code, "may not be compelled to consent to a partial redemption," the redemption by one co-heir or co-owner of the property in its totality does not vest in him ownership over it. Failure on the part of all the co-owners to redeem it entitles the vendee a retro to retain the property and consolidate title thereto in his name. 7 But the provision does not give to the redeeming co-owner the right to the entire property. It does not provide for a mode of terminating a co-ownership. Neither does the fact that the petitioner had succeeded in securing title over the parcel in his name terminate the existing co-ownership. While his half-brothers and sisters are, as we said, liable to him for reimbursement as and for their shares in redemption expenses, he cannot claim exclusive right to the property owned in common. Registration of property is not a means of acquiring ownership. It operates as a mere notice of existing title, that is, if there is one. The petitioner must then be said to be a trustee of the property on behalf of the private respondents. The Civil Code states: ART. 1456. If property is aquired 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. We agree with the respondent Court of Appeals that fraud attended the registration of the property. The petitioner's pretension that he was the sole heir to the land in the affidavit of extrajudicial settlement he executed preliminary to the registration thereof betrays a clear effort on his part to defraud his brothers and sisters and to exercise sole dominion over the property. The aforequoted provision therefore applies. It is the view of the respondent Court that the petitioner, in taking over the property, did so either on behalf of his co-heirs, in which event, he had constituted himself a negotiorum gestor under Article 2144 of the Civil Code, or for his exclusive benefit, in which case, he is guilty of
Property | Art. 484 to 493 | 29

. . . [Th]e land in question Lot 14694 of Cadastral Survey of Albay located in Legaspi City with an area of some 11,325 sq. m. originally belonged to one Felisa Alzul as her own private property; she married twice in her lifetime; the first, with one Bernabe Adille, with whom she had as an only child, herein defendant Rustico Adille; in her second marriage with one Procopio Asejo, her children were herein plaintiffs, now, sometime in 1939, said Felisa sold the property in pacto de retro to certain 3rd persons, period of repurchase being 3 years, but she died in 1942 without being able to redeem and after her death, but during the period of redemption, herein defendant repurchased, by himself alone, and after that, he executed a deed of extra-judicial partition representing himself to be the only heir and child of his mother Felisa with the consequence that he was able to secure title in his name alone also, so that OCT. No. 21137 in the name of his mother was transferred to his name, that was in 1955; that was why after some efforts of compromise had failed, his half-brothers and sisters, herein plaintiffs, filed present case for partition with accounting on the position that he was only a trustee on an implied trust when he redeemed, and this is the evidence, but as it also turned out that one of plaintiffs, Emeteria Asejo was occupying a portion, defendant counterclaimed for her to vacate that, Well then, after hearing the evidence, trial Judge sustained defendant in his position that he was and became absolute owner, he was not a trustee, and therefore, dismissed case and also condemned plaintiff occupant, Emeteria to vacate; it is because of this that plaintiffs have come here and contend that trial court erred in: "I. II. . . . declaring the defendant absolute owner of the property; . . . not ordering the partition of the property; and

III. . . . ordering one of the plaintiffs who is in possession of the portion of the property to vacate the land, p. 1 Appellant's brief. which can be reduced to simple question of whether or not on the basis of evidence and law, judgment appealed from should be maintained. 3

DECISION

xxx

xxx

xxx

SARMIENTO, J p: In issue herein are property and property rights, a familiar subject of controversy and a wellspring of enormous conflict that has led not only to protracted legal entanglements but to even more bitter consequences, like strained relationships and even the forfeiture of lives. It is a question that likewise reflects a tragic commentary on prevailing social and cultural values and institutions, where, as one observer notes, wealth and its accumulation are the basis of self-fulfillment and where property is held as sacred as life itself. "It is in the defense of his

The respondent Court of Appeals reversed the trial court, 4 and ruled for the plaintiffsappellants, the private respondents herein. The petitioner now appeals, by way of certiorari, from the Appellate Court's decision. We required the private respondents to file a comment and thereafter, having given due course to the petition, directed the parties to file their briefs. Only the petitioner, however, filed a brief, and the private respondents having failed to file one, we declared the case submitted for decision.

fraud, and must act as trustee, the private respondents being the beneficiaries, under the Article 1456. The evidence, of course, points to the second alternative the petitioner having asserted claims of exclusive ownership over the property and having acted in fraud of his coheirs. He cannot therefore be said to have assume the mere management of the property abandoned by his co-heirs, the situation Article 2144 of the Code contemplates. In any case, as the respondent Court itself affirms, the result would be the same whether it is one or the other. The petitioner would remain liable to the private respondents, his co-heirs. This Court is not unaware of the well-established principle that prescription bars any demand on property (owned in common) held by another (co-owner) following the required number of years. In that event, the party in possession acquires title to the property and the state of coownership is ended. 8 In the case at bar, the property was registered in 1955 by the petitioner, solely in his name, while the claim of the private respondents was presented in 1974. Has prescription then, set in? We hold in the negative. 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. 9 The instant case shows that the petitioner had not complied with these requisites. We are not convinced that he had repudiated the co-ownership; on the contrary, he had deliberately kept the private respondents in the dark by feigning sole heirship over the estate under dispute. He cannot therefore be said to have "made known" his efforts to deny the co-ownership. Moreover, one of the private respondents, Emeteria Asejo, is occupying a portion of the land up to the present, yet, the petitioner has not taken pains to eject her therefrom. As a matter of fact, he sought to recover possession of that portion Emeteria is occupying only as a counterclaim, and only after the private respondents had first sought judicial relief. prcd It is true that registration under the Torrens system is constructive notice of title, 10 but it has likewise been our holding that the Torrens title does not furnish a shield for fraud. 11 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. For the same reason, we cannot dismiss the private respondents' claims commenced in 1974 over the estate registered in 1955. While actions to enforce a constructive trust prescribes in ten years, 12 reckoned from the date of the registration of the property, 13 we, as we said, are not prepared to count the period from such a date in this case. We note the petitioner's sub rosa efforts to get hold of the property exclusively for himself beginning with his fraudulent misrepresentation in his unilateral affidavit of extrajudicial settlement that he is "the only heir and child of his mother Feliza with the consequence that he was able to secure title in his name also." 14 Accordingly, we hold that the right of the private respondents commenced from the time they actually discovered the petitioner's act of defraudation. 15 According to the respondent Court of Appeals, they came to know [of it] apparently only during the progress of the litigation." 16 Hence, prescription is not a bar. Moreover, and as a rule, prescription is an affirmative defense that must be pleaded either in a motion to dismiss or in the answer otherwise it is deemed waived, 17 and here, the petitioner never raised that defense. 18 There are recognized exceptions to this rule, but the petitioner has not shown why they apply. LLpr WHEREFORE, there being no reversible error committed by the respondent Court of Appeals, the petition is DENIED. The Decision sought to be reviewed is hereby AFFIRMED in toto. No pronouncement as to costs.

SO ORDERED. G.R. No. 76351 October 29, 1993 VIRGILIO B. AGUILAR vs. COURT OF APPEALS, ET AL

FIRST DIVISION [G.R. No. 76351. October 29, 1993.]

VIRGILIO B. AGUILAR, petitioner, vs. COURT OF APPEALS and SENEN B. AGUILAR, respondents.

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 coowners 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, 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. 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 so 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. 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 coowners, 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 same. 4. ID.; ID.; TERMINATION THEREOF; EFFECT; CASE AT BAR. 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. 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.

Jose F. Manacop for petitioner. Siruelo, Muyco & Associates Law Office for private respondent.

SYLLABUS 1. REMEDIAL LAW; CIVIL PROCEDURE; PRE-TRIAL; APPEARANCE OF PARTIES THEREIN; MANDATORY. The law is clear that the appearance of parties at the pre-trial is mandatory. A party who fails to appear at a pre-trial conference may be non-suited or considered as in default. 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. 2. ID.; ID.; ID.; GRANT OR DENIAL OF POSTPONEMENT THEREOF; SUBJECT TO THE SOUND DISCRETION OF THE TRIAL JUDGE; CASE AT BAR. 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. 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 Iloilo 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. 3. CIVIL LAW; CO-OWNERSHIP; RIGHT OF CO-OWNER OVER AN INDIVISIBLE PROPERTY. 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

BELLOSILLO, J p: 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. LLjur 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 Paraaque 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. llcd 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.
Property | Art. 484 to 493 | 30

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. 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. In his complaint, petitioner prayed that the proceeds of the sale be divided on the basis of twothirds (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. cdphil 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. 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 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. 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. 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. 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. 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 defendant 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 the property should be sold to a third person and the proceeds divided equally between the parties. 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. On 17 September 1979, defendant filed an omnibus motion for new trial but on 22 October 1979 the trial court denied the motion.

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 defendant's 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; (c) the default judgment of 26 July 1979; and, (d) the order dated 22 October 1979 denying his omnibus motion for new trial. 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. LLpr 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. 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. We find merit in the petition. 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 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 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 Iloilo 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. LLpr 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

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 same 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. 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. 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. 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. LLphil Article 494 of the Civil Code provides that no co-owner shall be obliged to remain in the coownership, 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 coowners 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. 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 so 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 same. 10 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. 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
Property | Art. 484 to 493 | 31

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. 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. 6912-P dated 26 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 decision, 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. LLpr 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. SO ORDERED. G.R. No. 52361 April 27, 1981

stockholders since private respondents, who have not yet fully paid the purchase price of their units, are not shareholders. Art. 490 Assailed orders set aside and the cases ordered tried on the merits. SYLLABUS 1. COMMERCIAL LAW; CONDOMINIUM ACT (REPUBLIC ACT NO. 4726); NOT EVERY PURCHASER OF CONDOMINIUM UNIT IS A SHAREHOLDER OF CONDOMINIUM CORPORATION. Section 5 of the Condominium Act (Republic Act No. 4726) expressly provides that the shareholding in the Condominium Corporation will be conveyed only in a proper case. It is clear then that not every purchaser of a condominium unit is a shareholder of the condominium corporation. 2. ID.; ID.; ID.; MASTER DEEDS DETERMINE WHEN SHAREHOLDING TRANSFERRED TO PURCHASER; ONLY OWNER OF UNIT MAY BE A SHAREHOLDER IN CASES AT BAR. Section 4 of the Condominium Act leaves to the Master Deed the determination of when the shareholding will be transferred to the purchaser of a unit. In the case at bar, the Amended Master Deeds, which were duly registered in the Register of Deeds, and which contain, by mandate of Section 4, a statement of the exact nature of the interest acquired by a purchaser of a unit, provide that the shareholding in the Condominium Corporation is inseparable from the unit to which it is only appurtenant, and that only the owner of a unit is a shareholder. 3. ID.; ID.; ID.; ID.; ID.; OWNERSHIP OF UNIT IN CASES AT BAR ACQUIRED ONLY UPON FULL PAYMENT OF PURCHASE PRICE. The Master Deeds in the cases at bar provide that ownership of a unit is acquired by a purchaser subject to the conditions and terms of the instrument conveying the unit to such purchaser. Both deeds of conveyance in these cases provide that the seller will convey unto the buyer full and absolute title in and to the subject unit, to the shares of stock pertaining thereto and to all rights and interests in connection therewith upon full payment by the buyer of the total purchase price. Consequently, even under the contract, it is only the owner of a unit who is a shareholder of the Condominium Corporation. Inasmuch as ownership is conveyed only upon full payment of the purchase price, it necessarily follows that a purchaser of a unit who has not paid the full purchase price thereof is not the owner of the unit and consequently is not a shareholder of the Condominium Corporation. 4. ID.; ID.; ID.; OWNERSHIP IS CONDITION SINE QUA NON TO BEING SHAREHOLDER. That only the owner of a unit is a stockholder of the Condominium Corporation is inferred from Section 10 of the Condominium Act which reads: "SEC. 10 . . . Membership in a condominium corporation, regardless of whether it is a stock or non-stock corporation, shall not be transferable separately from the condominium unit of which it is an appurtenance. When a member or stockholder ceases to own a unit in the project in which the condominium corporation owns or holds the common areas, he shall automatically cease to be a member or a stockholder of the condominium corporation." Pursuant to the foregoing statutory provision, ownership of a unit is a condition sine qua non to being a shareholder in the condominium corporation. It follows that a purchaser of a unit who is not yet the owner thereof for not having fully paid the full purchase price, is not a shareholder. By necessary implication, the "separate interest" in a condominium, which entitles the holder to become automatically a shareholder in the condominium corporation, as provided in Section 2 of the Condominium Act, can be no other than ownership of a unit. This is so because nobody can be a shareholder unless he is the owner of a unit and when he ceases to be the owner, he also ceases automatically to be a shareholder. 5. ID.; ID.; CONTROVERSIES ARISING OUT OF INTRA- CORPORATE RELATIONS UNDER ORIGINAL EXCLUSIVE JURISDICTION OF SECURITIES AND EXCHANGE COMMISSION. Controversy arising out of intra-corporate or partnership
Property | Art. 484 to 493 | 32

SUNSET VIEW CONDOMINIUM CORP. vs. JOSE C. CAMPOS, JR.

FIRST DIVISION [G.R. No. 52361. April 27, 1981.]

SUNSET VIEW, CONDOMINIUM CORPORATION, petitioner, vs. THE HON. JOSE C. CAMPOS, JR. OF THE COURT OF FIRST INSTANCE, BRANCH XXX, PASAY CITY and AGUILAR-BERNARES REALTY, respondents.

[G.R. No. 52524. April 27, 1981.]

SUNSET VIEW CONDOMINIUM CORPORATION, petitioner, vs. THE HON. JOSE C. CAMPOS, JR., PRESIDING JUDGE OF THE COURT OF FIRST INSTANCE, BRANCH XXX, PASAY CITY, and LIM SIU LENG, respondents.

Quasha Aspirilla Ancheta Valmonte Pea and Marcos for petitioner. Jose M. Alejandro for private respondent. SYNOPSIS Petitioner, a condominium corporation within the meaning of the Condominium Act in relation to a duly registered Amended Master Deed, filed separate suits against private respondents for collection of assessments levied on their respective units in the condominium which they bought on installments and had not yet fully paid. Both complaints, one originally filed with respondent Court of First Instance and the other appealed to it from the City Court, were dismissed by respondent court on the ground that pursuant to Section 2 of the Condominium Act, private respondents were "holder(s) of separate interest(s)" and consequently shareholders of the petitioner condominium corporation, and that therefore these cases "should be properly filed with the Securities and Exchange Commission which has exclusive original jurisdiction over controversies arising between shareholders of the corporation". On certiorari, the Supreme Court held, that the Condominium Act leaves to the Master Deed the determination of when the shareholding in the condominium corporation will be transferred to the purchaser of a unit, which, in this case, is upon full payment by the buyer of the purchase price at which time he also becomes the owner of the unit; and that the instant case for collection cannot be a controversy arising out of intra-corporate relations between

relations between and among stockholders, members or associates; between any or tall of them and the corporation, partnership or association of which they are stockholders, members or associates, respectively, are under the original and exclusive jurisdiction of the Securities and Exchange Commission, pursuant to Section 5(o) of P.D. No. 902-A. In the cases at bar, inasmuch as the private respondents are not shareholders of the petitioner condominium corporation, the cases for collection cannot be controversies arising out of intra- corporate relations and are under the jurisdiction of regular courts.

had entered into a "Contract to Buy and Sell" with Tower Builders, Inc. over the said unit on installment basis." 7 The private respondent filed a motion to dismiss on the ground of lack of jurisdiction, alleging that the amount sought to be collected is an assessment, the correctness and validity of which is certain to involve a dispute between her and the petitioner corporation; that she has automatically become, as a purchaser of the condominium unit, a stockholder of the petitioner pursuant to Section 2 of the Condominium Act, Republic Act No. 4726; that the dispute is intra-corporate and is consequently under the exclusive jurisdiction of the Securities & Exchange Commission as provided in Section 5 of P.D. No. 902-A. 8 The petitioner filed its opposition thereto, alleging that the private respondent who had not fully paid for the unit was not the owner thereof, consequently was not the holder of a separate interest which would make her a stockholder, and that hence the case was not an intracorporate dispute. 9 After the private respondent had filed her answer to the opposition to the motion to dismiss 10 of the petitioner, the trial court issued an order dated August 13, 1979 denying the motion to dismiss. 11 The private respondent's motion for reconsideration thereof was denied by the trial court in its Order dated September 19, 1979. 12 The private respondent then appealed pursuant to Section 10 of Rule 40 of the Rules of Court to the Court of First Instance, where the appeal was docketed as Civil Case No. 7530-P. The petitioner filed its "Motion to Dismiss Appeal" on the ground that the order of the trial court appealed from is interlocutory. 13 The motion to dismiss the appeal was denied and the parties were ordered to submit their respective memorandum on the issue raised before the trial court and on the disputed order of the trial judge. 14 After the parties had submitted their respective memoranda on the matter, the respondent Judge issued an order dated December 14, 1979 in which he directed that "the appeal is hereby dismissed and the judgment of the lower court is reversed. The case is dismissed and the parties are directed to ventilate their controversy with the Securities & Exchange Commission." 15 The petitioner's motion for reconsideration thereof was denied in an order dated January 14, 1980. 16 Hence this petition for certiorari, alleging grave abuse of discretion on the part of the respondent Judge. cdrep Issues Common to Both Cases It is admitted that the private respondents in both cases have not yet fully paid the purchase price of their units. The identical issues raised in both petitions are the following: 1. Is a purchaser of a condominium unit in the condominium project managed by the petitioner, who has not yet fully paid the purchase price thereof, automatically a stockholder of the petitioner Condominium Corporation? 2. Is it the regular court or the Securities & Exchange Commission that has jurisdiction over cases for collection of assessments assessed by the Condominium Corporation on condominium units the full purchase price of which has not been paid? The private respondents in both cases argue that every purchaser of a condominium unit, regardless of whether or not he has fully paid the purchase price, is a "holder of a separate interest" mentioned in Section 2 of Republic Act No. 4726, otherwise known as "The Condominium Act" and is automatically a shareholder of the condominium corporation.

The contention has no merit. Section 5 of the Condominium Act expressly provides that the shareholding in the Condominium Corporation will be conveyed only in a proper case. Said Section 5 provides: "Any transfer or conveyance of a unit or an apartment, office or other space therein, shall include the transfer or conveyance of the undivided interests in the common areas or, in a proper case, the membership or shareholding in the condominium corporation . . ." It is clear then that not every purchaser of a condominium unit is a shareholder of the condominium corporation. The Condominium Act leaves to the Master Deed the determination of when the shareholding will be transferred to the purchaser of a unit. Thus, Section 4 of said Act provides: "The provisions of this Act shall apply to property divided or to be divided into condominium only if there shall be recorded in the Register of Deeds of the province or city in which the property lies and duly annotated in the corresponding certificate of title of the land . . . an enabling or master deed which shall contain, among others, the following: LexLib xxx xxx xxx

DECISION

FERNANDEZ, J p: These two cases which involve similar facts and raise identical questions of law were ordered consolidated by resolution of this Court dated March 17, 1980. 1 The petitioner, Sunset View Condominium Corporation, in both cases, is a condominium corporation within the meaning of Republic Act No. 4726 in relation to a duly registered Amended Master Deed with Declaration of Restrictions of the Sunset View Condominium Project located at 2230 Roxas Boulevard Pasay City of which said petitioner is the Management Body holding title to all the common and limited common areas. 2 G.R. NO. 52361 The private respondent, Aguilar-Bernares Realty, a sole proprietorship with business name registered with the Bureau of Commerce, owned and operated by the spouses Emmanuel G. Aguilar and Zenaida B. Aguilar, is the assignee of a unit, "Solana", in the Sunset View Condominium Project with La Perla Commercial, Incorporated, as assignor. 3 The La Perla Commercial, Incorporated bought the "Solana" unit on installment from the Tower Builders, Inc. 4 The petitioner, Sunset View Condominium Corporation, filed for the collection of assessments levied on the unit against Aguilar-Bernares Realty, private respondent herein, a complaint dated June 22, 1979 docketed as Civil Case No. 7303-P of the Court of First Instance of Pasay City, Branch XXX. The private respondent filed a Motion to Dismiss the complaint on the grounds (1) that the complaint does not state a cause of action; (2) that the court has no jurisdiction over the subject or nature of the action; and (3) that there is another action pending between the same parties for the same cause. The petitioner filed its opposition thereto. The motion to dismiss was granted on December 11, 1979 by the respondent Judge who opined that the private respondent is, pursuant to Section 2 of Republic Act No. 4726, a "holder of a separate interest" and consequently, a shareholder of the plaintiff condominium corporation; and that "the case should be properly filed with the Securities & Exchange Commission which has exclusive original jurisdiction on controversies arising between shareholders of the corporation." The motion for reconsideration thereof having been denied, the petitioner, alleging grave abuse of discretion on the part of respondent Judge, filed the instant petition for certiorari praying that the said orders be set aside. prcd G.R. NO. 52524 The petitioner filed its amended complaint dated July 16, 1979 docketed as Civil Case No. 14127 of Branch I of the City Court of Pasay City for the collection of overdue accounts on assessments and insurance premiums and the interest thereon amounting to P6,168.06 as of March 31, 1979 against the private respondent Lim Siu Leng 5 to whom was assigned on July 11, 1977 a unit called "Alegria" of the Sunset View Condominium Project by Alfonso Uy 6 who

"(d) A statement of the exact nature of the interest acquired or to be acquired by the purchaser in the separate units and in the common areas of the condominium project . . ." The Amended Master Deeds in these cases, which were duly registered in the Register of Deeds, and which contain, by mandate of Section 4, a statement of the exact nature of the interest acquired by a purchaser of a unit, provide in Section 6 of Part I: "(d) Each Unit owner shall, as an essential condition to such ownership, acquire stockholding in the Condominium Corporation hereinbelow provided . . ." 17 The Amended Master Deeds likewise provide in Section 7(b), thus: "(b) All unit owners shall of necessity become stockholders of the Condominium Corporation. TOWER shall acquire all the shares of stock of SUNSET VIEW and shall allocate the said shares to the units in proportion to the appurtenant interest in the COMMON AREAS and LIMITED COMMON AREAS as provided in Section 6(b) above. Said shares allocated are mere appurtenances of each unit, and, therefore, the same cannot be transferred, conveyed, encumbered or otherwise disposed of separately from the Unit . . ." 18 It is clear from the above-quoted provisions of the Master Deeds that the shareholding in the Condominium Corporation is inseparable from the unit to which it is only appurtenant, and that only the owner of a unit is a shareholder in the Condominium Corporation. Subparagraph (a) of Part I, Section 6, of the Master Deeds determines when and under what conditions ownership of a unit is acquired by a purchaser thus: "(a) The purchaser of a unit shall acquire title or ownership of such Unit, subject to the terms and conditions of the instrument conveying the unit to such purchaser and to the terms and conditions of any subsequent conveyance under which the purchaser takes title to the Unit, and subject further to this MASTER DEED . . ." 19 The instrument conveying the unit "Solana" in G.R. NO. 52361 is the "Contract to Buy and Sell" dated September 13, 1977, Annex "D", while that conveying the unit "Alegria" in G.R. NO. 52524 is the "Contract to Buy and Sell" dated May 12, 1976, Annex "C". In both deeds of conveyance, it is provided: cdrep
Property | Art. 484 to 493 | 33

"4. Upon full payment by the BUYER of the total purchase price and full compliance by the BUYER of all its obligations herein, the SELLER will convey unto the BUYER, as soon as practicable after completion of the construction, full and absolute title in and to the subject unit, to the shares of stock pertaining thereto and to all rights and interests in connection therewith. . ." 20 The share of stock appurtenant to the unit will be transferred accordingly to the purchaser of the unit only upon full payment of the purchase price at which time he will also become the owner of the unit. Consequently, even under the contract, it is only the owner of a unit who is a shareholder of the Condominium Corporation. Inasmuch as ownership is conveyed only upon full payment of the purchase price, it necessarily follows that a purchaser of a unit who has not paid the full purchase price thereof is not the owner of the unit and consequently is not a shareholder of the Condominium Corporation. That only the owner of a unit is a stockholder of the Condominium Corporation is inferred from Section 10 of the Condominium Act which reads: "SEC. 10 . . . Membership in a condominium corporation, regardless of whether it is a stock or non-stock corporation, shall not be transferable separately from the condominium unit of which it is an appurtenance. When a member or stockholder ceases to own a unit in the project in which the condominium corporation owns or holds the common areas, he shall automatically cease to be a member or stockholder of the condominium corporation." Pursuant to the above statutory provision, ownership of a unit is a condition sine qua non to being a shareholder in the condominium corporation. It follows that a purchaser of a unit who is not yet the owner thereof for not having fully paid the full purchase price, is not a shareholder. By necessary implication, the "separate interest" in a condominium, which entitles the holder to become automatically a shareholder in the condominium corporation, as provided in Section 2 of the Condominium Act, can be no other than ownership of a unit. This is so because nobody can be a shareholder unless he is the owner of a unit and when he ceases to be the owner, he also ceases automatically to be a shareholder. prLL The private respondents, therefore, who have not fully paid the purchase price of their units and are consequently not owners of their units are not members or shareholders of the petitioner condominium corporation. Inasmuch as the private respondents are not shareholders of the petitioner condominium corporation, the instant cases for collection cannot be a "controversy arising out of intracorporate or partnership relations between and among stockholders, members or associates; between any or all of them and the corporation, partnership or association of which they are stockholders, members or associates, respectively" which controversies are under the original and exclusive jurisdiction of the Securities & Exchange Commission, pursuant to Section 5(b) of P.D. No. 902-A. The subject matters of the instant cases according to the allegations of the complaints are under the jurisdiction of the regular courts: that of G.R. No. 52361, which is for the collection of P8,335.38 with interest plus attorney's fees equivalent to the principal or a total of more than P10,000 is under the jurisdiction of the Court of First Instance; and that of G.R. No. 52524, which is for the collection of P6,168.06 is within the jurisdiction of the City Court. In view of the foregoing, it is no longer necessary to resolve the issue raised in G.R. No. 52524 of whether an order of the City Court denying a motion to dismiss on the ground of lack of jurisdiction can be appealed to the Court of First Instance. WHEREFORE, the questioned orders of the respondent Judge dated December 11, 1979 and January 4, 1980 in Civil Case No. 7303-P, subject matter of the petition in G.R. No. 52361, are set aside and said Judge is ordered to try the case on the merits. The orders dated December 14, 1979 and January 14, 1980 in Civil Case No. 7530-P, subject matter of the

petition in G.R. No. 52524 are set aside and the case is ordered remanded to the court a quo, City Court of Pasay City, for trial on the merits, with costs against the private respondents. SO ORDERED. G.R. No. 2812 October 18, 1906 LONGINOS JAVIER vs. SEGUNDO JAVIER 006 Phil 493 Art. 491

FIRST DIVISION [G.R. No. 2812. October 18, 1906.]

LONGINOS JAVIER, plaintiff-appellee, vs. SEGUNDO JAVIER, ET AL., defendantsappellants.

Hartigan, Rohde & Gutierrez, for appellants. Chicote, Miranda & Sierra, for appellee.

SYLLABUS 1. REALTY; POSSESSION; JUDICIAL ADMINISTRATOR. Alfonso vs. Natividad, No. 2518, April 30, 1906, followed as to the right of a judicial administrator to recover possession of real estate belonging to the estate of the deceased. 2. ID.; ID.; GOOD FAITH; REIMBURSEMENT. The defendants, knowing that the land which they occupied was the property of others, were not possessors in good faith (art. 433, Civil Code) and are not entitled to be reimbursed for the cost of a house built thereon by them. (Art. 453, Civil Code.) 3. ID.; OWNERSHIP; COMMUNITY OF PROPERTY. The ownership of a house by one person, and of the land on which it stands by another, does not create a community of property as that term is used in articles 392 et seq. of the Civil Code. 4. ID.; TENANTS IN COMMON; CONSTRUCTION EXPENSES. The defendants, tenants in common with others of a tract of land, built a house thereon. Held, That they could not compel their cotenants to share in the expense of such construction, though they tacitly consented thereto. (Art. 397, Civil Code.)

DECISION

Property | Art. 484 to 493 | 34

WILLARD, J p: This case relates to the ownership of the lot, and of the house standing thereon, No. 521 Calle Real, Malate, Manila. The court below found that the land belonged to the plaintiff as administrator of the estate of his father, Manuel Javier, and that the defendant Isabel Hernandez and Manuel Ramon Javier, her son, are the owners of the house standing on the lot. Judgment was rendered in favor of the plaintiff for the possession of the property, but giving the defendants a reasonable opportunity to remove the house. The evidence sustains the findings of fact to the effect that the land belongs to the estate represented by the plaintiff. There was evidence to show that the land was, in 1860, in the possession of Manuel Javier, the father of the defendant Segundo Javier, and that since that time it has been occupied by his children and that no one of these children ever made any claim to the ownership thereof, and no one them ever occupied the property as owner. Manuel Ramon Javier, testifying as a witness, made no claim to the ownership of the land, and testified simply that the result of his investigations into the question of ownership showed that there was a great confusion in regard thereto. The appellants claim that this action can not be maintained by the administrator of the estate of Manuel Javier, but that it should be maintained by all the heirs of the deceased. The right of judicial administrator to recover the possession of real property belonging to the estate of the deceased was recognized in the case of Alfonso vs. Natividad 1 (4 Off. Gaz., 461; secs. 702, 703, and 704 of the Code of Civil Procedure). The appellants claim in their brief that they were possessors in good faith, and by reason thereof and of the provisions of article 451 of the Civil Code they can not be compelled to pay rent. It is to be observed, however, that the appellants do not come within the definition of a possessor in good faith found in article 433 of the Civil Code cited in their brief. As said by the appellants themselves in that brief, the two defendants, Segundo Javier and his wife, Isabel Hernandez, always believed that the land did not belong to them but belonged to the estate of Manuel Javier. It is to be observed, moreover, that the judgment of the court does not allow any recovery at all for the use or occupation of the house, and the recovery of rent for the use of the land is limited to the time elapsed since April 24, 1904, when a demand was made upon the defendants for the possession of the property. It is also claimed by the appellants that, in accordance with article 453 of the Civil Code, they are entitled to be reimbursed for the expenses of constructing the house. These expenses are only allowed in accordance with the article cited by the appellants to a possession in good faith, and the appellants were not such possessors. It is claimed finally by the appellants that the case should be decided by an application of the principles of law meant that community of property existed because the house was owned by the appellants and the land by the plaintiff, the contention can not be maintained, for such a condition of affairs does not create a community of property within the meaning of that term as it is used in title 3, book 2 of the Civil Code. If, on the other hand, it is itself belonged to the heirs of Manuel Javier, and that two of the defendants were such heirs, it can be said that the decision of the court below was fully as favorable to the appellants as it could be. Article 397 of the Civil Code relates to improvements made upon the common property by one of the coowners. The burden of proof was on the appellants to show that the house was built with the consent of their cotenants. Even if a tacit consent was shown this would not require such cotenants to pay for the house. (8 Manresa, Commentaries on Civil Code, p. 396.) The judgment of the court below allowed the appellants to remove the house within a reasonable time. Whether this judgment was erroneous as far as the appellee is concerned, we need not inquire, because he has not appealed from the judgment.

The judgment of the court below is affirmed, with the costs of this instance against the appellants. After the expiration of twenty days from the date hereof let judgment be entered in accordance herewith and ten days thereafter let the case remanded to the court below for proper action. So ordered. Art. 493 G.R. No. L-14429 June 30, 1962 RAMON MERCADO, ET AL. vs. PIO D. LIWANAG

EN BANC [G.R. No. L-14429. June 30, 1962.]

RAMON MERCADO, BASILIA MERCADO joined by her husband, FRANCISCO RONQUILLO, plaintiff-appellants, vs. PIO D. LIWANAG, defendant-appellee.

Patricio D. Senador and Ricardo D. Galano for plaintiffs-appellants. D. B. Melliza and D. M. Gangoso for defendant-appellee.

SYLLABUS 1. CO-OWNERSHIP; SALE OF AN UNDIVIDED ALIQUOT SHARE; TO WHAT PORTION THE SHARE IS LIMITED. What a co-owner may dispose of under Article 493 of the Civil Code is only his undivided aliquot share, which shall be limited to the portion which may be allotted to him upon the termination of the co-ownership. He has no right to divide the property into parts and then convey one part by metes and bounds. Lopez vs. Ilustre, 5 Phil., 567; Gonzales, et al. vs. Ichon, et al. 47 Off. Gaz., 6290; Manresa, Vol. 3, 7th ed. 630. 2. ID.; ID.; ID.; QUESTION OF VALIDITY OF DEED OF SALE TO BE RESOLVED IN RELATION TO THE TITLE. The title is the final and conclusive repository of the rights of the new co-owners, and any question regarding the validity of the deed of sale should be considered in conjunction with the title issued pursuant thereto.

DECISION

MAKALINTAL, J p: The present appeal, taken by the plaintiff from the decision of the Court of First Instance of Rizal (Quezon City), is before us on certification by the Court of Appeals, the questions involved being purely legal. The case was submitted to the trial court upon the following stipulation of facts:
Property | Art. 484 to 493 | 35

"1. That the complaint filed by the plaintiffs against the defendant seeks to annul a Deed of Sale on the ground of fraud and on the provisions of Article 493 of the Civil Code. "2. That on July 14, 1956, in the City of Manila, Philippines, the plaintiff Ramon Mercado and the defendant Pio D. Liwanag executed a Deed of Sale, photostat copy of which is attached hereto marked as Annex "A" and forming an integral part hereof, covering a divided half and described in metes and bounds, or an area of 2,196 square meters at P7.00 per square meter or for a total amount of P15,372.00, of a parcel of land situated at Kangkong, Quezon City, covered Transfer Certificate of Title No. 20805 of the Register of Deeds for the province of Rizal, now Quezon City; "3. That the said T.C.T. No. 20805 containing an area of 4,392 square meters, is issued in the name of the plaintiffs Ramon Mercado and Basilia Mercado as co-owners PROINDIVISO, and the sale was without the knowledge and consent of plaintiff Basilia Mercado; "4. That out of the total area of 4,392 square meters, an area consisting of 391 square meters was expropriated by the National Power Corporation sometime in December, 1953 at a price of P10.00 per square meter, Civil Case No. Q-829 (Eminent Domain), of the Court of First Instance of Rizal, Quezon City Branch, entitled "National Power Corporation, plaintiff, versus Brigido Almodoban, et als., defendants," but this fact of expropriation came to the knowledge of the defendant Pio D. Liwanag upon the registration of the Deed of Sale Annex "A"; "5. That pursuant to the Deed of Sale Annex "A" T.C.T. No. 32752 was issued in the name of Pio D. Liwanag and Basilia Mercado, photostat copy of which is hereto attached and marked as Annex "B"; "6. That defendant submits the receipt signed by plaintiff Ramon Mercado dated July 14, 1956 photostat copy of which is attached hereto and marked as Annex "C" and promissory note of the same date for P10,000.00, photostat copy of which is attached hereto and marked as Annex "D" which are both self-explanatory, but plaintiff Ramon Mercado disclaims payment and receipt of such check and promissory note, the check being uncashed and is still in the possession of Atty. Eugenio de Gracia; "7. That plaintiffs and defendant respectfully submit for resolution of this Honorable Court the issue of whether or not the Deed of Sale Annex "A" could be annulled based on the foregoing facts in relation to Article 493 of the Civil Code, setting aside all other issues in the pleadings." Upon the issue thus presented the trial court held that under Article 493 of the Civil Code the sale in question was valid and so dismissed the complaint, without costs. This ruling is now assailed as erroneous. Article 493 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 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." Appellants except to the application of this provision in this case for the reason that in the deed of sale sought to be annulled the vendor disposed of a divided and determinate half of the land under co-ownership. The argument, as far as it goes, seems to be tenable. What a co-owner may dispose of under Article 493 is only his undivided aliquot share, which shall be limited to the portion which may be allotted to him upon the termination of the co-ownership. He has no right to divide the property into parts and then convey one part by metes and

bounds. Lopez vs. Ilustre, 5 Phil. 567; Gonzales, et al. vs. Itchon, et al. 47 O.G. 6290; Manresa, Vol. 3, 7th ed. p. 630. The pertinent recitals in the disputed deed of sale read: "I hereby sell, transfer and convey absolutely and irrevocably unto said Pio D. Liwanag, his heirs, successors, and assigns my rights, title and interests on my chosen portion of the above- described property which consist of one-half of aforesaid ownership bounded on the West by Pacifico Gahudo, on the North by Hacienda de Piedad and on the South by Circumferential Road, consisting of 50 meters more or less frontal length along Circumferential Road and with a total area of 2,196 square meters as indicated in Co-owners Transfer Certificate of Title No. 20805." Nevertheless, upon registration of the sale and cancellation of transfer certificate of title No. 20805 in the names of the previous co-owners, the new transfer certificate that was issued (No. 32757) did not reproduce the description in the instrument but carried the names of appellee Pio D. Liwanag and Basilia Mercado as "co-owners pro-indiviso." There is no suggestion by any of the parties that this new certificate of title is invalid, irregular or inaccurate. There is no prayer that it be cancelled. As far as Basilia Mercado is concerned she retains in all their integrity her rights as co-owner which she had before the sale, and consequently she has no cause to complain. Much less has Ramon Mercado, for it was he who was responsible for whatever indicia there may be in the deed of sale that a determinate portion of the property was being sold, as shown by the second paragraph thereof, quoted without contradiction in appellee's brief as follows: "That the aforesaid Transfer Certificate of Title was originally in my name, but was split into two equal parts by virtue of my desire to donate to my sister-in law Juana Gregorio an equal half thereof with the understanding that I as donor would have the absolute power to choose from the property owned in common that part which I would like to segregate for myself or my heirs and assigns." And of course appellee himself not only does not challenge the new certificate of title, wherein he appears as co-owner of an undivided one-half share, but precisely relies upon it for his defense in this action. The title is the final and conclusive repository of the rights of the new co-owners. The question of whether or not the deed of sale should be annulled must be considered in conjunction with the title issued pursuant thereto. Since, according to this title, what appellee acquired by virtue of the sale is only an undivided half-share of the property, which under the law the vendor Ramon Mercado had the absolute right to dispose of, the trial court committed no error in dismissing the action. The end-result of the transaction is in accordance with Article 493 of the Civil Code. The other point raised by appellants refers to the statement in the dispositive portion of the decision appealed from that "the stipulation with regards to the deed of sale based on the ground of fraud is insufficient for all purposes and besides, no proof showing the allegation of such fraud exists in the record." It is contended that the trial court erred in making such statement, the same being contrary to the stipulation in which the parties expressly eliminated the issue of fraud. From the entire context of the decision, however, it can be gathered that the case was not decided on the basis of the said issue. In any event, even if the court did err in considering the question of fraud in spite of the stipulation, the error is not a prejudicial one. As far as the dismissal of the action is concerned, it makes no difference whether fraud has not been proven or fraud has been abandoned as an issue by express agreement. WHEREFORE, the decision appealed from is affirmed, with costs against appellants in this instance:

G.R. No. 102380 January 18, 1993 HERODOTUS P. ACEBEDO, ET AL. vs. BERNARDO P. ABESAMIS, ET AL.

SECOND DIVISION [G.R. No. 102380. January 18, 1993.]

HERODOTUS P. ACEBEDO, and DEMOSTHENES P. ACEBEDO, petitioners, vs. HON. BERNARDO P. ABESAMIS, MIGUEL ACEBEDO, ALEXANDER ACEBEDO, NAPOLEON ACEBEDO, RIZALINO ACEBEDO, REPUBLICA ACEBEDO, FILIPINAS ACEBEDO and YU HWA PING, respondents.

Herminio L. Ruiz for petitioners. Vicente D. Millora for private respondents. Romero A. Yu for respondent Yu Hua Ping.

SYLLABUS 1. REMEDIAL LAW; SPECIAL PROCEEDING; SALE OF PROPERTY OF DECEDENT; JURISDICTION OF PROBATE COURT TO APPROVE THEREOF BEFORE FINAL ADJUDICATION. In the case of Dillena vs. Court of Appeals (163 SCRA 30 (1988), this Court made a pronouncement that it is within the jurisdiction of the probate court to approve the sale of properties of a deceased person by his prospective heirs before final adjudication. Hence, it is error to say that this matter should be threshed out in a separate action. The Court further elaborated that although the Rules of Court do not specifically state that the sale of an immovable property belonging to an estate of a decedent, in a special proceeding, should be made with the approval of the court, this authority is necessarily included in its capacity as a probate court. Therefore, it is clear that the probate court in the case at bar, acted within its jurisdiction in issuing the Order approving the Deed of Conditional Sale. 2. ID.; ID.; ID.; COURT'S APPROVAL, NECESSARY FOR THE VALIDITY OF ANY DISPOSITION OF DECEDENT'S ESTATE; EFFECT OF ABSENCE THEREOF TO THE SUBSTANTIVE RIGHTS OF HEIRS. Petitioners herein anchor their claim on Section 7, Rule 89 of the Rules of Court. It is settled that court approval is necessary for the validity of any disposition of the decedent's estate. However, reference to judicial approval cannot adversely affect the substantive rights of the heirs to dispose of their ideal share in the coheirship and/or co-ownership among the heirs. This Court had the occasion to rule that there is no doubt that an heir can sell whatever right, interest, or participation he may have in the property under administration. This is a matter which comes under the jurisdiction of the probate court. 3. CIVIL LAW; POSSESSION; POSSESSION OF HEREDITARY PROPERTY; WHEN DEEMED ACQUIRED; RULE. The right of an heir to dispose of the decedent's property, even if the same is under administration, is based on the Civil Code provision stating
Property | Art. 484 to 493 | 36

that the possession of hereditary property is deemed transmitted to the heir without interruption and from the moment of the death of the decedent, in case the inheritance is accepted. Where there are however, two or more heirs, the whole estate of the decedent is, before its partition, owned in common by such heirs. 4. ID.; CO-OWNERSHIP; RIGHT OF A CO-OWNER TO SELL, ALIENATE OR MORTGAGE HIS SHARE IN THE PROPERTY HELD IN COMMON. The Civil Code, under the provisions on co-ownership, further qualifies this right. Although it is mandated that each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and thus 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 to the portion which may be allotted to him in the division upon the termination of the co-ownership. In other words, the law does not prohibit a co-owner from selling, alienating or mortgaging his ideal share in the property held in common. As early as 1942, this Court has recognized said right of an heir to dispose of property under administration. In the case of Teves de Jakosalem vs. Rafols, et al., (73 Phil. 628 [1942]) it was said that the sale made by an heir of his share in an inheritance, subject to the result of the pending administration, in no wise, stands in the way of such administration. The Court then relied on the provision of the Old Civil Code, Article 440 and Article 399 which are still in force as Article 533 and Article 493, respectively, in the new Civil Code. The Court also cited the words of a noted civilist, Manresa: "Upon the death of a person, each of his heirs 'becomes the undivided owner of the whole estate left with respect to the part or portion which might be adjudicated to him, a community of ownership being thus formed among the co-owners of the estate which remains undivided.'"

proportionate share of the six (6) million pesos paid by the buyer, Yu Hwa Ping, as earnest money; that the balance of P6,000,000.00 is more than enough to pay the unsettled claims against the estate. Thus, they prayed for the Court to direct the administrator, Herodotus Acebedo (referred to as petitioner-administrator hereafter): llcd 1. 2. 3. to sell the properties mentioned in the motion; with the balance of P6 million, to pay all the claims against the Estate; and to distribute the residue among the Heirs in final settlement of the Estate.

that the sale should wait for the country to recover from the effects of the coup d'etat attempts, otherwise, the properties should be divided among the heirs. On June 21, 1990, petitioners filed a "Motion for Leave of Court to Mortgage and Lease some of the Properties of the Estate". To this Motion, respondents filed an Opposition on the following grounds: that the motion is not proper because of the pending motion to approve the sale of the same properties; that said conditional sale was initiated by petitioner-administrator who had earlier signed a receipt for P500,000.00 as earnest money; that the approval of the sale would mean Yu Hwa Ping's assumption of payment of the realty taxes; that the estate has no further debts and thus, the intestate administrator may be terminated. On August 17, 1990, respondent Court issued an Order, the dispositive portion of which, stated, among others, to wit: 2 "b. the motion filed by the heirs-movants, dated October 4, 1989, praying that the new administrator be directed to sell the properties covered by TCT Nos. 155569, 120145, 9145 and 18709, in favor of Yu Hwa Ping is hereby denied; and c. the new administrator is hereby granted leave to mortgage some properties of the estate at a just and reasonable amount, subject to the approval of the Court." On December 4, 1990, the respondent Judge issued an order resolving to call the parties to a conference on December 17, 1990. The conference was held, but still the parties were unable to arrive at an agreement. So, on January 4, 1991, it was continued, wherein the parties actually agreed that the heirs be allowed to sell their shares of the properties to Yu Hwa Ping for the price already agreed upon, while herein petitioners negotiate for a higher price with Yu Hwa Ping. cdll Petitioners, then, instead filed a "Supplemental Opposition" to the approval of the Deed of Conditional Sale. On March 29, 1991, the respondent Court issued the challenged Order, the dispositive portion of which states, to wit: "WHEREFORE, the Order dated August 7, 1990, is hereby lifted, reconsidered and set aside, and another one is hereby issued as follows: 1. Approving the conditional sale, dated September 10, 1989, executed by the heirsmovants, in favor of Yu Hwa Ping, pertaining to their respective shares in the properties covered by TCT Nos. 155569, 120145, 1945 and 18709 of the Register of Deeds of Quezon City; 2. Ordering the administrator Herodotus Acebedo to sell the remaining portions of the said properties also in favor of Yu Hwa Ping at the same price as the sale executed by the herein heirs-movants; 3. Ordering Yu Hwa Ping to deposit with the Court the total remaining balance of the purchase price for the said lots within TWENTY (20) DAYS from notice hereof; 4. The motion to cite former administrator Miguel Acebedo in contempt of court, resulting from his failure to submit the owner's copy of TCT Nos. 155569, and 120145 is hereby denied." 3 Yu Hwa Ping, on April 4, 1991, deposited the remaining balance of the purchase price for the properties subject of the Deed of Conditional Sale in the amount of P6,500,000.00.

To the aforesaid Motion, herein petitioner-administrator interposed an "Opposition to Approval of Sale", to wit: "1. That he has learned that some of the heirs herein have sold some real estate property of the Estate located at Balintawak, Quezon City, without the knowledge of the herein administrator, without the approval of this Honorable Court and of some heirs, and at a shockingly low price; 2. That he is accordingly hereby registering his vehement objection to the approval of the sale, perpetrated in a manner which can even render the proponents of the sale liable for punishment for contempt of this Honorable Court; 3. The herein Administrator instead herein prays this Honorable Court to authorize the sale of the above mentioned property of the Estate to generate funds to pay certain liabilities of the Estate and with the approval of this Honorable Court if warranted, to give the heirs some advances chargeable against theirs (sic) respective shares, and, for the purpose to authorize the herein Administrator, and the other heirs to help the Administrator personally or through a broker, to look for a buyer for the highest obtainable price, subject always to the approval of this Honorable Court." 1 On October 30, 1989, herein petitioners moved to be given a period of forty-five (45) days within which to look for a buyer who will be willing to buy the properties at a price higher than P12,000,000.00. The case was set for hearing on December 15, 1989. However, by said date, petitioners have not found any buyer offering better terms. Thus, they asked the Court, on February 8, 1990, for an inextendible period of thirty days to look for a buyer. Petitioner-administrator then filed a criminal complaint for falsification of a public document against Yu Hwa Ping and notary public Eugenio Obon on February 26, 1990. He initiated this complaint upon learning that it was Yu Hwa Ping who caused the notarization of the Deed of Conditional Sale wherein allegedly petitioner-administrator's signature was made to appear. He also learned that after he confronted the notary public of the questioned document, the latter revoked his notarial act on the same. LLphil On April 2, 1990, petitioner-administrator filed the civil action to secure the declaration by the Court of the nullity of the Deed of Conditional Sale and the Deed of Absolute Sale. The period granted herein petitioners having lapsed without having found a buyer, petitioner Demosthenes Acebedo sought to nullify the Orders granting them several periods within which to look for a better buyer. Respondents filed a comment thereon. Having miserably failed to find a better buyer, after seven long months, petitioneradministrator filed another "Opposition to Approval of Sale", dated May 10, 1990, maintaining

CAMPOS, JR., J p: The lower court's jurisdiction in approving a Deed of Conditional Sale executed by respondents-heirs and ordering herein administrator-petitioner Herodotus Acebedo to sell the remaining portions of said properties, despite the absence of its prior approval as a probate court, is being challenged in the case at bar. The late Felix Acebedo left an estate consisting of several real estate properties located in Quezon City and Caloocan City, with a conservative estimated value of about P30 million. Said estate allegedly has only the following unsettled claims: a. b. P87,937.00 representing unpaid real estate taxes due Quezon City; P20,244.00 as unpaid real estate taxes due Caloocan City;

c. The unpaid salaries/allowances of former Administrator Miguel Acebedo, and the incumbent Administrator Herodotus Acebedo; and d. Inheritance taxes that may be due on the net estate.

The decedent was succeeded by eight heirs, two of whom are the petitioner herein, and the others are the private respondents. Due to the prolonged pendency of the case before the respondent Court for sixteen years, respondent-heirs filed a "Motion for Approval of Sale", on October 4, 1989. The said sale involved the properties covered by Transfer Certificate of Title Nos. 155569, 120145, 9145, and 18709, all of which are registered in Quezon City, and form part of the estate. The consideration for said lots was twelve (12) million pesos and by that time, they already had a buyer. It was further stated in said Motion that respondent-heirs have already received their

Property | Art. 484 to 493 | 37

Petitioners herein received the questioned Order on April 11, 1991. Twenty one (21) days thereafter, they filed a Motion for Reconsideration, praying that the Court reinstate its Order of August 17, 1990. To this, private respondents filed their Opposition. 4 Instead of making a reply, petitioners herein filed a Supplemental Motion for Reconsideration. The motions for reconsideration of herein petitioners were denied by the respondent Court on August 23, 1991. On September 23, 1991, herein petitioners filed a Motion for Partial Reconsideration, hoping for the last time that they would be able to convince the Court that its Order dated March 29, 1991 in effect approving the conditional sale is erroneous and beyond its jurisdiction. On October 17, 1991, the respondent Court denied the Motion for Partial Reconsideration for "lack of merit" On November 7, 1991, private respondents filed a Motion for Execution of the Order dated March 29, 1991. This was pending resolution when the petitioners filed this Petition for Certiorari. The controversy in the case at bar revolves around one question: Is it within the jurisdiction of the lower court, acting as a probate court, to issue an Order approving the Deed of Conditional Sale executed by respondents-heirs without prior court approval and to order herein Administrator to sell the remaining portion of said properties? We answer in the positive. In the case of Dillena vs. Court of Appeals, 5 this Court made a pronouncement that it is within the jurisdiction of the probate court to approve the sale of properties of a deceased person by his prospective heirs before final adjudication. Hence, it is error to say that this matter should be threshed out in a separate action. The Court further elaborated that although the Rules of Court do not specifically state that the sale of an immovable property belonging to an estate of a decedent, in a special proceeding, should be made with the approval of the court, this authority is necessarily included in its capacity as a probate court. Therefore, it is clear that the probate court in the case at bar, acted within its jurisdiction in issuing the Order approving the Deed of Conditional Sale. prLL We cannot countenance the position maintained by herein petitioners that said conditional sale is null and void for lack of prior court approval. The sale precisely was made conditional, the condition being that the same should first be approved by the probate court. Petitioners herein anchor their claim on Section 7, Rule 89 of the Rules of Court. 6 It is settled that court approval is necessary for the validity of any disposition of the decedent's estate. However, reference to judicial approval cannot adversely affect the substantive rights of the heirs to dispose of their ideal share in the co-heirship and/or co-ownership among the heirs. 7 This Court had the occasion to rule that there is no doubt that an heir can sell whatever right, interest, or participation he may have in the property under administration. This is a matter which comes under the jurisdiction of the probate court. 8 The right of an heir to dispose of the decedent's property, even if the same is under administration, is based on the Civil Code provision 9 stating that the possession of hereditary property is deemed transmitted to the heir without interruption and from the moment of the death of the decedent, in case the inheritance is accepted. Where there are however, two or more heirs, the whole estate of the decedent is, before its partition , owned in common by such heirs. 10

The Civil Code, under the provisions on co-ownership, further qualifies this right. 11 Although it is mandated that each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and thus 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 to the portion which may be allotted to him in the division upon the termination of the co-ownership. 12 In other words, the law does not prohibit a co-owner from selling, alienating or mortgaging his ideal share in the property held in common. 13 As early as 1942, this Court has recognized said right of an heir to dispose of property under administration. In the case of Teves de Jakosalem vs. Rafols, et al., 14 it was said that the sale made by an heir of his share in an inheritance, subject to the result of the pending administration, in no wise, stands in the way of such administration. The Court then relied on the provision of the Old Civil Code, Article 440 and Article 399 which are still in force as Article 533 and Article 493, respectively, in the new Civil Code. The Court also cited the words of a noted civilist, Manresa: "Upon the death of a person, each of his heirs 'becomes the undivided owner of the whole estate left with respect to the part or portion which might be adjudicated to him, a community of ownership being thus formed among the co-owners of the estate which remains undivided'." prcd Private respondents having secured the approval of the probate court, a matter which is unquestionably within its jurisdiction, and having established private respondents' right to alienate the decedent's property subject of administration, this Petition should be dismissed for lack of merit. PREMISES considered, Petition is hereby DISMISSED. With Costs. SO ORDERED. G.R. No. L-78178 April 15, 1988 DELIA BAILON-CASILAO, ET AL. vs. COURT OF APPEALS, ET AL.

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)]. 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)], thereby making him a co-owner of the property. 2. ID.; ID.; RECOURSE OF A CO-OWNER WHERE THE ENTIRE PROPERTY WAS SOLD WITHOUT HIS CONSENT. 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 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 [Ramirez v. Bautista, supra]. 3. REMEDIAL LAW; ACTION FOR PARTITION, IMPRESCRIPTIBLE. An action for petition is imprescriptible or cannot be barred by prescription [Article 494 of the Civil Code; See also Budlong v. Bontoc (G.R. No. L-27702, September 9, 1977, 79 SCRA 24)]. 4. ID.; PRESCRIPTION; WILL NOT LIE AGAINST REGISTERED LAND. Prescription will not lie in favor of respondent as against the petitioners who remain the registered owners of the disputed parcel of land pursuant to Act No. 496 which expressly provides that "(n)o title to registered land in derogation to that of the registered owner shall be acquired by prescription or adverse possession." 5. ID.; ID.; ID.; MAY BE INVOKED BY ITS REGISTERED OWNER AND HIS HEIRS. If prescription is unavailing against the registered owner, it must be equally unavailing against the latter's hereditary successors, because they merely step into the shoes of the decedent by operation of law (New Civil Code, Article 777; Old Civil Code, Article 657), the title or right undergoing no change by its transmission mortis causa. [Atus, et al., v. Nunez, et al., 97 Phil. 762, 764; Umbay v. Alecha, G.R. No. 67284, March 18, 1985, 135 SCRA 427, 429). 6. CIVIL LAW; LACHES; ELEMENTS. The four basic elements of laches, namely: (1) conduct on the part of the defendant or of one under whom he claims, giving rise to the situation of which complaint is made and for which the complainant seeks a remedy; (2) delay in asserting the complainant's rights, the complainant having had knowledge or notice of the defendant's conduct and having been afforded an opportunity to institute suit; (3) lack of knowledge or notice on the part of the defendant that the complainant would assert the right on which he bases his suit; and, (4) injury or prejudice to the defendant in the event relief is accorded to the complainant, or the suit is not held to be barred [Go Chi Gun, et al. v. Co Cho, et al., 96 Phil. 622 (1955)]. 7. ID.; ID.; MUST BE INVOKED BY PARTY IN GOOD FAITH. Laches being an equitable defense, he who invokes it must come to the court with clean hands. 8. ID.; ID.; MERE FACT OF DELAY, NOT SUFFICIENT. Mere fact of delay is insufficient to constitute, laches. It is required that (1) complainant must have had knowledge of the conduct of defendant or of one under whom he claims and (2) he must have been afforded an opportunity to institute suit. 9. ID.; LAND TITLES AND DEEDS; LAND REGISTRATION; ALL PERSONS DEALING WITH REGISTERED LAND HAS ONLY TO RELY ON THE FACE OF TITLE; ACTUAL KNOWLEDGE OF FLAW NECESSITATES FURTHER INQUIRY; EFFECT OF ABSENCE OF INQUIRY. A person dealing with a registered land has a right to rely upon the . a person dealing with a registered land has a right to rely upon the face of the Torrens certificate of title and to dispense with the need of inquiring further, except when the party concerned has actual knowledge of facts and circumstances that would impel a reasonably
Property | Art. 484 to 493 | 38

THIRD DIVISION [G.R. No. L-78178. April 15, 1988.]

DELIA BAILON-CASILAO, LUZ PAULINO-ANG, EMMA PAULINO-YBANEZ, NILDA PAULINO-TOLENTINO, and SABINA BAILON, petitioners, vs. THE HONORABLE COURT OF APPEALS and CELESTINO AFABLE, respondents.

Veronico E. Rubio for petitioners. Mario G. Fortes for private-respondent.

SYLLABUS 1. CIVIL LAW; CO-OWNERSHIP; SALE OR DISPOSITION OF ENTIRE PROPERTY AFFECTS ONLY HIS UNDIVIDED SHARE. If a co-owner sells the whole

cautious man to make such inquiry. [Gonzales v. IAC and Rural Bank of Pavia, Inc., G.R. No. 69622, January 29, 1988]. The buyer's failure to exercise even a minimum degree of ordinary prudence required by the situation, operates against him and any prejudice or injury that may be occasioned to him by such sale must be borne by him. The fate of petitioners' claim over a parcel of land rests ultimately on a determination of whether or not said petitioners are chargeable with such laches as may effectively bar their present action. The petitioners herein filed a case for recovery of property and damages with notice of lis pendens on March 13, 1981 against the defendant and herein private respondent, Celestino Afable. The parcel of land involved in this case, with an area of 48,849 square meters, is covered by Original Certificate of Title No. 1771 issued on June 12, 1931, in the names of Rosalia, Gaudencio, Sabina, Bernabe, Nenita and Delia, all surnamed Bailon, as co-owners, each with a 1/6 share. Gaudencio and Nenita are now dead, the latter being represented in this case by her children. Luz, Emma and Nilda. Bernabe went to China in 1931 and had not been heard from since then [Decision of the Court of Appeals, Rollo, p. 39]. It appears that on August 23, 1948, Rosalia Bailon and Gaudencio Bailon sold a portion of the said land consisting of 16,283 square meters to Donato Delgado. On May 13, 1949, Rosalia Bailon alone sold the remainder of the land consisting of 32,566 square meters to Ponciana V. Aresgado de Lanuza. On the same date, Lanuza acquired from Delgado the 16,283 square meters of land which the latter had earlier acquired from Rosalia and Gaudencio. On December 3, 1975, John Lanuza, acting under a special power of attorney given by his wife, Ponciana V. Aresgado de Lanuza, sold the two parcels of land to Celestino Afable, Sr. In all these transfers, it was stated in the deeds of sale that the land was not registered under the provisions of Act No. 496 when the fact is that it is. It appears that said land had been successively declared for taxation first, in the name of Ciriaca Dellamas, mother of the registered co-owners, then in the name of Rosalia Bailon in 1924, then in that of Donato Delgado in 1936, then in Ponciana de Lanuza's name in 1962 and finally in the name of Celestino Afable, Sr. in 1983. In his answer to the complaint filed by the herein petitioners, Afable claimed that he had acquired the land in question through prescription and contended that the petitioners were guilty of laches. He later filed a third-party complaint against Rosalia Bailon for damages allegedly suffered as a result of the sale to him of the land. After trial, the lower court rendered a decision: 1. Finding and declaring Celestino Afable, a co-owner of the land described in paragraph III of the complaint having validly bought the two-sixth (2/6) respective undivided shares of Rosalia Bailon and Gaudencio Bailon; 2. Finding and declaring the following as pro-indiviso co-owners, having 1/6 share each, of the property described in paragraph III of the complaint, to wit: a. b. c. d. Sabina Bailon Bernabe Bailon Heirs of Nenita Bailon-Paulino Delia Bailon-Casilao;

3. Ordering the segregation of the undivided interests in the property in order to terminate co-ownership to be conducted by any Geodetic Engineer selected by the parties to delineate the specific part of each of the co-owners. 4. Ordering the defendant to restore the possession of the plaintiffs respective shares as well as all attributes of absolute dominion; 5. a. b. c. Ordering the defendant to pay the following: P5,000.00 as damages; P2,000.00 as attorney's fees and; to pay the costs.

The proper action in cases like this is not for the nullification of the sole or for the recovery 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 of it continued to remain in the possession of the co-owners who possessed and administered it [Mainit v. Bandoy, supra.] 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 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 [Ramirez v. Bautista, supra]. As to the action for petition, neither prescription nor laches can be invoked. In the light of the attendant circumstances, defendant-appellee's defense of prescription is a vain proposition. Pursuant to Article 494 of the Civil Code, "(n)o co-owner shall be obliged to remain in the co-ownership. Such co-owner may demand at anytime the partition of the thing owned in common, insofar as his share is concerned." [Italics supplied.] In Budlong v. Bondoc [G.R. No. L-27702, September 9, 1977, 79 SCRA 241, this Court has interpreted said provision of law to mean that the action for partition is imprescriptible or cannot be barred by prescription. 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 coownership." Furthermore, the disputed parcel of land being registered under the Torrens System, the express provision of Act No. 496 that "(n)o title to registered land in derogation to that of the registered owner shall be acquired by prescription or adverse possession" is squarely applicable. Consequently, prescription will not lie in favor of Afable as against the petitioners who remain the registered owners of the disputed parcel of land. LibLex It is argued however, that as to the petitioners Emma, Luz and Nelda who are not the registered co-owners but merely represented their deceased mother, the late Nenita Bailon, prescription lies. Respondents bolster their argument by citing a decision of this Court in Pasion v. Pasion [G.R. No. L-15757, May 31, 1961, 2 SCRA 486, 489] holding that "the imprescriptibility of a Torrens title can only be invoked by the person in whose name the title is registered" and that "one who is not the registered owner of a parcel of land cannot invoke imprescriptibility of action to claim the same." Reliance on the aforesaid Pasion case is futile. The ruling therein applies only against transferees other than direct issues or heirs or to complete strangers. The rational is clear: If prescription is unavailing against the registered owner, it must be equally unavailing against the latter's hereditary successors, because they merely step into the shoes of the decedent by operation of law (New Civil Code, Article 777; Old Civil Code, Article 657), the title or right undergoing no change by its transmission mortis causa. [Atus, et al., v. Nunez, et al., 97 Phil. 762, 764]. The latest pronouncement of this Court in Umbay v. Alecha [G.R. No. 67284, March 18, 1985, 135 SCRA 427, 429], which was promulgated subsequent to the Pasion case reiterated the Atus doctrine. Thus: Prescription is unavailing not only against the registered owner but also against his hereditary successors, because they merely step into the shoes of the decedent by operation of law and are merely the continuation of the personality of their predecessor-in-interest. [Barcelona v. Barcelona, 100 Phil. 251, 257].
Property | Art. 484 to 493 | 39

[Decision of the Trial Court, Rollo, p. 37-38]. On appeal, the respondent Court of Appeals affirmed the decision of the lower court insofar as it held that prescription does not he against plaintiffs-appellees because they are co-owners of the original vendors. However, the appellate court declared that, although registered property cannot be lost by prescription, nevertheless, an action to recover it may be barred by laches, citing the ruling in Mejia de Lucaz v. Gamponia [100 Phil. 277 (1956)]. Accordingly, it held the petitioners guilty of laches and dismissed their complaint. Hence, this petition for review on certiorari of the decision of the Court of Appeals. cdrep The principal issue to be resolved in this case concerns the applicability of the equitable doctrine of laches. Initially though, a determination of the effect of a sale by one or more coowners of the entire property held in common without the consent of all the co-owners and of the appropriate remedy of the aggrieved co-owners is required. The rights of a co-owner of a certain property are clearly specified in Article 493 of the Civil Code. Thus: Art. 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or 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. [Italics supplied.] 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 coowners 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.

Laches is likewise unavailing as a shield against the action of herein petitioners. Well-stated in this jurisdiction are the four basic elements of laches, namely: (1) conduct on the part of the defendant or of one under whom he claims, giving rise to the situation of which complaint is made and for which the complainant seeks a remedy; (2) delay in asserting the complainant's rights, the complainant having had knowledge or notice of the defendant's conduct and having been afforded an opportunity to institute suit; (3) lack of knowledge or notice on the part of the defendant that the complainant would assert the right on which he bases his suit; and, (4) injury or prejudice to the defendant in the event relief is accorded to the complainant, or the suit is not held to be barred [Go Chi Gun, et al. v. Co Cho, et al., 96 Phil. 622 (1955)]. While the first and last elements are present in this case, the second and third elements are missing. The second element speaks of delay in asserting the complainant's rights. However, the mere fact of delay is insufficient to constitute, laches. It is required that (1) complainant must have had knowledge of the conduct of defendant or of one under whom he claims and (2) he must have been afforded an opportunity to institute suit. This court has pointed out that laches is not concerned with the mere lapse of time. Thus: Laches has been defined as the failure or neglect, for an unreasonable length of time to do that which by exercising due diligence could or should have been done earlier; it is negligence or omission to assert a right within a reasonable time warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it. [Tijam, et al., v. Sibonghanoy, G.R. No. L-21450, April 25, 1968, 23 SCRA 29, 35; Tejido v. Zamacoma, G.R. No. L-63048, August 7, 1985, 138 SCRA 73, 90]. cdphil The doctrine of 'laches' or of 'stale demands' is based upon grounds of public policy which requires for the peace of society, the discouragement of stale claims and unlike the statute of limitations, is not a mere question of time but is principally a question of inequity or unfairness of permitting a right or claim to be enforced or asserted," [Tijam v. Sibonghanoy, supra, p. 351. [Italics supplied.] It must be noted that while there was delay in asserting petitioners' rights, such delay was not attended with any knowledge of the sale nor with any opportunity to bring suit. In the first place, petitioners had no notice of the sale made by their eldest sister. It is undisputed that the petitioner co-owners had entrusted the care and management of the parcel of land to Rosalia Bailon who was the oldest among them [TSN, July 27, 1983, p. 14]. In fact, Nicanor Lee, a son of Rosalia, who was presented as a witness by the plaintiffs-petitioners, testified on crossexamination that his mother was only the administrator of the land as she is the eldest and her brothers and sisters were away [TSN, October 5, 1983, p. 15]. Indeed, when Delia BailonCasilao left Sorsogon in 1942 after she got married, it was only in 1983 that she returned. Sabina, on the other hand, is said to be living in Zamboanga while Bernabe who left for China in 1931 has not been heard from since then. Consequently, when Rosalia, from whom the private respondent derived his title, made the disputed sales covering the entire property, the herein petitioners were unaware thereof. In the second place, they were not afforded an opportunity to bring suit inasmuch as until 1981, they were kept in the dark about the transactions entered into by their sister. It was only when Delia Bailon-Casilao returned to Sorsogon in 1981 that she found out about the sales and immediately, she and her co-petitioners filed the present action for recovery of property. The appellate court thus erred in holding that "the petitioners did nothing to show interest in the land." For the administration of the parcel of land was entrusted to the oldest co-owner who was then in possession thereof precisely because the other co-owners cannot attend to such a task as they reside outside of Sorsogon where the land is situated. Her co-owners also allowed her to appropriate the entire produce for herself because it was not even enough for

her daily consumption [TSN, October 5, 1983, pp. 17-18]. And since petitioner was the one receiving the produce, it is but natural that she was the one to take charge of paying the real estate taxes. Now, if knowledge of the sale by Rosalia was conveyed to the petitioners only later, they cannot be faulted for the acts of their co-owner who failed to live up to the trust and confidence expected of her. In new of the lack of knowledge by the petitioners of the conduct of Rosalia in selling the land without their consent in 1975 and the absence of any opportunity to institute the proper action until 1981, laches may not be asserted against the petitioners. prLL The third element of laches is likewise absent. There was no lack of knowledge or notice on the part of the defendant that the complainants would assert the right on which they base the suit. On the contrary, private respondent is guilty of bad faith in purchasing the property as he knew that the property was co-owned by six persons and yet, there were only two signatories to the deeds of sale and no special authorization to sell was granted to the two sellers by the other co-owners. Even as the land here was misrepresented in the deeds of sale as "unregistered," the truth was that Afable already had notice that the land was titled in the name of six persons by virtue of the Certificate of Title which was already in his possession even before the sale. Such fact is apparent from his testimony before the court a quo: COURT: Q A Q A From whom did you get the certificate of Title? When it was mortgaged by Ponciana Aresgado. It was mortgaged to you before you bought it? Yes, Your Honor. (TSN, March 5, 1984, p. 12) When cross-examined, he stated:

. . . a person dealing with a registered land has a right to rely upon the face of the Torrens certificate of title and to dispense with the need of inquiring further, except when the party concerned has actual knowledge of facts and circumstances that would impel a reasonably cautious man to make such inquiry. [Gonzales v. IAC and Rural Bank of Pavia, Inc., G.R. No. 69622, January 29, 1988]. Moreover, the undisputed fact is that petitioners are relatives of his wife. As a genuine gesture of good faith, he should have contacted the petitioners who were still listed as co-owners in the certificate of title which was already in his possession even before the sale. In failing to exercise even a minimum degree of ordinary prudence required by the situation, he is deemed to have bought the lot at his own risk. Hence any prejudice or injury that may be occasioned to him by such sale must be borne by him. Indeed, aware of the flaws impairing his title, Afable went to the herein petitioner Delia BailonCasilao, asking the latter to sign a document obviously to cure the flaw [TSN, July 27, 1983, p. 6]. Later, he even filed a petition in the Court of First Instance to register the title in his name which was denied as aforesaid. It may be gleaned from the foregoing examination of the facts that Celestino Afable is not a buyer in good faith. Laches being an equitable defense, he who invokes it must come to the court with clean hands. Cdpr WHEREFORE, the petition for certiorari is hereby GRANTED, the challenged decision of the Court of Appeals is SET ASIDE, and the decision of the trial court is REINSTATED. SO ORDERED.

FIRST DIVISION [G.R. No. 125233. March 9, 2000] Spouses ALEXANDER CRUZ and ADELAIDA CRUZ, petitioners, vs. ELEUTERIO LEIS, RAYMUNDO LEIS, ANASTACIO L. LAGDANO, LORETA L. CAYONDA and the HONORABLE COURT OF APPEALS, respondents. Lexj uris DECISION KAPUNAN, J.: Private respondents, the heirs of spouses Adriano Leis and Gertrudes Isidro,[1] filed an action before the Regional Trial Court (RTC) of Pasig seeking the nullification of the contracts of sale over a lot executed by Gertrudes Isidro in favor of petitioner Alexander Cruz, as well as the title subsequently issued in the name of the latter. Private respondents claimed that the contracts were vitiated by fraud as Gertrudes was illiterate and already 80 years old at the time of the execution of the contracts; that the price for the land was insufficient as it was sold only for P39,083.00 when the fair market value of the lot should be P1,000.00 per square meter, instead of P390.00, more or less; and that the property subject of the sale was conjugal and, consequently, its sale without the knowledge and consent of private respondents was in derogation of their rights as heirs. The facts that gave rise to the complaint: Juri smis Adriano and Gertrudes were married on 19 April 1923. On 27 April 1955, Gertrudes acquired from the then Department of Agriculture and Natural Resources (DANR) a parcel of land with an area of one hundred (100) square meters, situated at Bo. Sto. Nio, Marikina, Rizal and covered by Transfer Certificate of Title (TCT) No. 42245. The Deed of Sale described Gertrudes as a widow. On 2 March 1956, TCT No. 43100 was issued in the name of "Gertrudes Isidro," who was also referred to therein as a "widow."
Property | Art. 484 to 493 | 40

Q Mr. Witness, the original Certificate of Title was given to you in the year 1974, was it not? A Q is it not? A 1975. In 1975, you already discovered that the title was in the name of several persons, Yes, sir.

Q When you discovered that it is in the name of several persons, you filed a case in court for authority to cancel the title to be transferred in your name, is it not? A Yes, sir. LLjur

Q And that was denied by the Court of First Instance of Sorsogon because there was only one signatory to the deed of sale instead of six, was it not? A Not one but two signatories.

[Decision of the Regional Trial Court of Sorsogon, Rollo, p. 35] Such actual knowledge of the existence of other co-owners in whose names the lot subject of the sale was registered should have prompted a searching inquiry by Afable considering the well-known rule in this jurisdiction that:

On 2 December 1973, Adriano died. It does not appear that he executed a will before his death. On 5 February 1985, Gertrudes obtained a loan from petitioners, the spouses Alexander and Adelaida Cruz, in the amount of P15,000.00 at 5% interest, payable on or before 5 February 1986. The loan was secured by a mortgage over the property covered by TCT No. 43100. Gertrudes, however, failed to pay the loan on the due date. Unable to pay her outstanding obligation after the debt became due and payable, on 11 March 1986, Gertrudes executed two contracts in favor of petitioner Alexander Cruz. The first is denominated as "Kasunduan," which the parties concede is a pacto de retro sale, granting Gertrudes one year within which to repurchase the property. The second is a "Kasunduan ng Tuwirang Bilihan," a Deed of Absolute Sale covering the same property for the price of P39,083.00, the same amount stipulated in the "Kasunduan." Jjj uris For failure of Gertrudes to repurchase the property, ownership thereof was consolidated in the name of Alexander Cruz in whose name TCT No. 130584 was issued on 21 April 1987, canceling TCT No. 43100 in the name of Gertrudes Isidro. On 9 June 1987, Gertrudes Isidro died. Thereafter, her heirs, herein private respondents, received demands to vacate the premises from petitioners, the new owners of the property. Private respondents responded by filing a complaint as mentioned at the outset. On the basis of the foregoing facts, the RTC rendered a decision in favor of private respondents. The RTC held that the land was conjugal property since the evidence presented by private respondents disclosed that the same was acquired during the marriage of the spouses and that Adriano contributed money for the purchase of the property. Thus, the court concluded, Gertrudes could only sell to petitioner spouses her one-half share in the property. The trial court also ruled that no fraud attended the execution of the contracts. Nevertheless, the "Kasunduan," providing for a sale con pacto de retro, had superseded the "Kasunduan ng Tuwirang Bilihan," the deed of absolute sale. The trial court did not consider the pacto de retro sale an equitable mortgage, despite the allegedly insufficient price. Nonetheless, the trial court found for private respondents. It rationalized that petitioners failed to comply with the provisions of Article 1607 of the Civil Code requiring a judicial order for the consolidation of the ownership in the vendee a retro to be recorded in the Registry of Property. The dispositive portion of the RTC's Decision reads: lex WHEREFORE, in the light of all the foregoing, judgment is hereby rendered: 1. Declaring Exhibit G "Kasunduan ng Tuwirang Bilihan" Null and Void and declar[ing] that the title issued pursuant thereto is likewise Null and Void; 2. Declaring the property in litigation as conjugal property; 3. Ordering the Registry of Deeds of Marikina Branch to reinstate the title of Gertrudes Isidro; 4. Ordering the plaintiff[s] [sic] to comply with the provision[s] of Article 1607 in relation to Article 1616 of the Civil Code; 5. Ordering the defendant[s] to pay plaintiff[s] P15,000.00 nominal damages for the violation of plaintiffs rights; 6. Ordering the defendant[s] to pay plaintiff[s] the sum of P8,000.00 as and for attorneys fees; 7. Dismissing defendant[s'] counterclaim; and 8. Ordering defendant[s] to pay the cost of suit. Jksm SO ORDERED.[2]

Petitioners appealed to the Court of Appeals in vain. The Court of Appeals affirmed the decision of the Regional Trial Court, holding that since the property was acquired during the marriage of Gertrudes to Adriano, the same was presumed to be conjugal property under Article 160 of the Civil Code. The appellate court, like the trial court, also noted that petitioner did not comply with the provisions of Article 1607 of the Civil Code. Petitioners are now before this Court seeking the reversal of the decision of the Court of Appeals. First, they contend that the subject property is not conjugal but is owned exclusively by Gertrudes, who was described in the Deed of Sale between Gertrudes and the DANR as well as in TCT No. 43100 as a widow. Second, assuming the land was conjugal property, petitioners argue that the same became Gertrudes exclusively when, in 1979, she mortgaged the property to the Daily Savings Bank and Loan Association. The bank later foreclosed on the mortgage in 1981 but Gertrudes redeemed the same in 1983. Chief The paraphernal or conjugal nature of the property is not determinative of the ownership of the disputed property. If the property was paraphernal as contended by petitioners, Gertrudes Isidro would have the absolute right to dispose of the same, and absolute title and ownership was vested in petitioners upon the failure of Gertrudes to redeem the property. On the other hand, if the property was conjugal, as private respondents maintain, upon the death of Adriano Leis, the conjugal partnership was terminated,[3] entitling Gertrudes to one-half of the property.[4] Adrianos rights to the other half, in turn, were transmitted upon his death to his heirs,[5] which includes his widow Gertrudes, who is entitled to the same share as that of each of the legitimate children.[6] Thus, as a result of the death of Adriano, a regime of co-ownership arose between Gertrudes and the other heirs in relation to the property. Incidentally, there is no merit in petitioners contention that Gertrudes redemption of the property from the Daily Savings Bank vested in her ownership over the same to the exclusion of her co-owners. We dismissed the same argument by one of the petitioners in Paulmitan vs. Court of Appeals,[7] where one of the petitioners therein claimed ownership of the entire property subject of the case by virtue of her redemption thereof after the same was forfeited in favor of the provincial government for non-payment of taxes. We held, however, that the redemption of the land "did not terminate the co-ownership nor give her title to the entire land subject of the co-ownership." We expounded, quoting our pronouncement in Adille vs. Court of Appeals:[8] The petition raises a purely legal issue: May a co-owner acquire exclusive ownership over the property held in common? Esmsc Essentially, it is the petitioners contention that the property subject of dispute devolved upon him upon the failure of his co-heirs to join him in its redemption within the period required by law. He relies on the provisions of Article 1515 of the old Civil Code, Article 1613 of the present Code, giving the vendee a retro the right to demand redemption of the entire property. There is no merit in this petition. The right of repurchase may be exercised by a co-owner with respect to his share alone (CIVL CODE, art. 1612; CIVIL CODE (1889), art. 1514.). While the records show that petitioner redeemed the property in its entirety, shouldering the expenses therefor, that did not make him the owner of all of it. In other words, it did not put to end the existing state of co-ownership (Supra, Art. 489). There is no doubt that redemption of property entails a necessary expense. Under the Civil Code: Esmmis Art. 488. Each co-owner shall have a right to compel the other coowners to contribute to the expenses of preservation of the thing or right owned in common and to the taxes. Any one of the latter may exempt himself from this obligation by renouncing so much of his undivided interest as may be equivalent to his share of the expenses

and taxes. No such waiver shall be made if it is prejudicial to the coownership. The result is that the property remains to be in a condition of coownership. While a vendee a retro, under Article 1613 of the Code, "may not be compelled to consent to a partial redemption," the redemption by one co-heir or co-owner of the property in its totality does not vest in him ownership over it. Failure on the part of all the co-owners to redeem it entitles the vendee a retro to retain the property and consolidate title thereto in his name (Supra, art. 1607). But the provision does not give to the redeeming co-owner the right to the entire property. It does not provide for a mode of terminating a co-ownership. 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: ART. 493. Each co-owner shall have the full ownership of his part of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the coowners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. Es-mso 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."[9] As gleaned from the foregoing discussion, despite the Court of Appeals finding and conclusion that Gertrudes as well as private respondents failed to repurchase the property within the period stipulated and has lost all their rights to it, it still ruled against petitioners by affirming the Regional Trial Court's decision on the premise that there was no compliance with Article 1607 of the Civil Code requiring a judicial hearing before registration of the property in the name of petitioners. This provision states: Ms-esm ART. 1607. In case of real property, the consolidation of ownership in the vendee by virtue of the failure of the vendor to comply with the provisions of article 1616 shall not be recorded in the Registry of Property without a judicial order, after the vendor has been duly heard. The aforequoted article is intended to minimize the evils which the pacto de retro sale has caused in the hands of usurers. A judicial order is necessary in order to determine the true nature of the transaction and to prevent the interposition of buyers in good faith while the determination is being made.[10]E-xsm It bears stressing that notwithstanding Article 1607, the recording in the Registry of Property of the consolidation of ownership of the vendee is not a condition sine qua non to the transfer of ownership. Petitioners are the owners of the subject property since neither Gertrudes nor her co-owners redeemed the same within the one-year period stipulated in the "Kasunduan." The essence of a pacto de retro sale is that title and ownership of the property sold are immediately vested in the vendee a retro, subject to the resolutory condition of repurchase by the vendor a retro within the stipulated period. Failure thus of the vendor a retro to perform
Property | Art. 484 to 493 | 41

said resolutory condition vests upon the vendee by operation of law absolute title and ownership over the property sold. As title is already vested in the vendee a retro, his failure to consolidate his title under Article 1607 of the Civil Code does not impair such title or ownership for the method prescribed thereunder is merely for the purpose of registering the consolidated title.[11] WHEREFORE, the decision of the Court of Appeals is MODIFIED in that the petitioners are deemed owners of the property by reason of the failure of the vendor, Gertrudes Isidro, to repurchase the same within the period stipulated. However, Transfer Certificate of Title No. 130584, in the name of Alexander M. Cruz, which was issued without judicial order, is hereby ordered CANCELLED, and Transfer Certificate of Title No. 43100 in the name of Gertrudes Isidro is ordered REINSTATED, without prejudice to compliance by petitioners with the provisions of Article 1607 of the Civil Code. SO ORDERED. SECOND DIVISION

Consorcia and Alfredo, the portion of Lot 162 sold to Soledad was described as having more or less the following measurements: 63-1/2 meters from point 9 to 10, 35 meters from point 10 to point 11, 30 meters from point 11 to a certain point parallel to a line drawn from points 9 to "10; and then from this Certain Point to point 9 and as shown in the accompanying sketch, and made an integral part of this deed, to SOLEDAD DAYNOLO, her heirs and assigns.[1] Thereafter, Soledad Daynolo immediately took possession of the land described above and built a house thereon. A few years later, Soledad and her husband, Simplicio Distajo, mortgaged the subject portion of Lot 162 as security for a P400.00 debt to Jose Regalado, Sr. This transaction was evidenced by a Deed of Mortgage[2] dated May 1, 1947. On April 14, 1948, three of the eight co-owners of Lot 162, specifically, Salome, Consorcia and Alfredo, sold 24,993 square meters of said lot to Jose Regalado, Sr. On May 4, 1951, Simplicio Distajo, heir of Soledad Daynolo who had since died, paid the mortgage debt and redeemed the mortgaged portion of Lot 162 from Jose Regalado, Sr. The latter, in turn, executed a Deed of Discharge of Mortgage[3] in favor of Soledads heirs, namely: Simplicio Distajo, Rafael Distajo and Teresita Distajo-Regalado. On same date, the said heirs sold the redeemed portion of Lot 162 for P1,500.00 to herein petitioners, the spouses Manuel Del Campo and Salvacion Quiachon. Meanwhile, Jose Regalado, Sr. caused the reconstitution of Original Certificate of Title No. 18047. The reconstituted OCT No. RO-4541 initially reflected the shares of the original co-owners in Lot 162. However, title was transferred later to Jose Regalado, Sr. who subdivided the entire property into smaller lots, each covered by a respective title in his name. One of these small lots is Lot No. 162-C-6 with an area of 11,732 square meters which was registered on February 24, 1977 under TCT No. 14566. In 1987, petitioners Manuel and Salvacion del Campo brought this complaint for repartition, resurvey and reconveyance against the heirs of the now deceased Jose Regalado, Sr. Petitioners claimed that they owned an area of 1,544 square meters located within Lot 162-C-6 which was erroneously included in TCT No. 14566 in the name of Regalado. Petitioners alleged that they occupied the disputed area as residential dwelling ever since they purchased the property from the Distajos way back in 1951. They also declared the land for taxation purposes and paid the corresponding taxes. On April 1, 1987, summons were served on Regalados widow, Josefina Buenvenida, and two of her children, Rosemarie and Antonio. Josefina and Rosemarie were declared in default on May 10, 1989 because only Antonio filed an answer to the complaint. During trial, petitioners presented the Deed of Absolute Sale [4] executed between Soledad Daynolo and Salome Bornales as well as the Deed of Mortgage [5] and Deed of Discharge[6] signed by Jose Regalado, Sr. The Deed of Absolute Sale[7] showing the purchase by the Del Campos of the property from the Distajos was likewise given in evidence. Despite the filing of an answer, Antonio failed to present any evidence to refute the claim of petitioners. Thus, after considering Antonio to have waived his opportunity to present evidence, the trial court deemed the case submitted for decision. On November 20, 1990, the trial court rendered judgment dismissing the complaint. It held that while Salome could alienate her pro-indiviso share in Lot 162, she could not validly sell an undivided part thereof by metes and bounds to Soledad, from whom petitioners derived their title. The trial court also reasoned that petitioners could not have a better right to the property even if they were in physical possession of the same and declared the property for taxation purposes, because mere possession cannot defeat the right of the Regalados who had a Torrens title over the land. On appeal, the Court of Appeals affirmed the trial courts judgment, with no

pronouncement as to costs.[8] Petitioners now seek relief from this Court and maintain that: I. THE FACT THAT THE SALE OF THE SUBJECT PORTION CONSTITUTES A SALE OF A CONCRETE OR DEFINITE PORTION OF LAND OWNED IN COMMON DOES NOT ABSOLUTELY DEPRIVE HEREIN PETITIONERS OF ANY RIGHT OR TITLE THERETO; II. IN ANY EVENT, HEREIN PRIVATE RESPONDENTS ARE ALL ESTOPPED FROM DENYING THE RIGHT AND TITLE OF HEREIN PETITIONERS.[9] In resolving petitioners appeal, we must answer the following questions: Would the sale by a co-owner of a physical portion of an undivided property held in common be valid? Is respondent estopped from denying petitioners right and title over the disputed area? Under the facts and circumstances duly established by the evidence, are petitioners entitled to repartition, resurvey and reconveyance of the property in question? On the first issue, it seems plain to us that the trial court concluded that petitioners could not have acquired ownership of the subject land which originally formed part of Lot 162, on the ground that their alleged right springs from a void sale transaction between Salome and Soledad. The mere fact that Salome purportedly transferred a definite portion of the coowned lot by metes and bounds to Soledad, however, does not per se render the sale a nullity. This much is evident under Article 493[10] of the Civil Code and pertinent jurisprudence on the matter. More particularly in Lopez vs. Vda. De Cuaycong, et.al.[11] which we find relevant, the Court, speaking through Mr. Justice Bocobo, held that: The fact that the agreement in question purported to sell a concrete portion of the hacienda does not render the sale void, for it is a well-established principle that the binding force of a contract must be recognized as far as it is legally possible to do so . Quando res non valet ut ago, valeat quantum valere potest. (When a thing is of no force as I do it, it shall have as much force as it can have.)[12] Applying this principle to the instant case, there can be no doubt that the transaction entered into by Salome and Soledad could be legally recognized in its entirety since the object of the sale did not even exceed the ideal shares held by the former in the co-ownership. As a matter of fact, the deed of sale executed between the parties expressly stipulated that the portion of Lot 162 sold to Soledad would be taken from Salomes 4/16 undivided interest in said lot, which the latter could validly transfer in whole or in part even without the consent of the other co-owners. Salomes right to sell part of her undivided interest in the co -owned property is absolute in accordance with the well-settled doctrine that a co-owner has full ownership of his pro-indiviso share and has the right to alienate, assign or mortgage it, and substitute another person in its enjoyment[13] Since Salomes clear intention was to sell merely part of her aliquot share in Lot 162, in our view no valid objection can be made against it and the sale can be given effect to the full extent. We are not unaware of the principle that a co-owner cannot rightfully dispose of a particular portion of a co-owned property prior to partition among all the co-owners. However, this should not signify that the vendee does not acquire anything at all in case a physically segregated area of the co-owned lot is in fact sold to him. Since the co-owner/vendors undivided interest could properly be the object of the contract of sale between the parties, what the vendee obtains by virtue of such a sale are the same rights as the vendor had as coowner, in an ideal share equivalent to the consideration given under their transaction. In other words, the vendee steps into the shoes of the vendor as co-owner and acquires a proportionate abstract share in the property held in common.
Property | Art. 484 to 493 | 42

[G.R. No. 108228. February 1, 2001]

SPOUSES MANUEL and SALVACION DEL CAMPO, petitioners, vs. HON. COURT OF APPEALS and HEIRS OF JOSE REGALADO, SR., respondents. DECISI ON QUISUMBING, J.: This is a petition for review on certiorari of a decision of the Court of Appeals which affirmed the judgment of the Regional Trial Court of Roxas City, Branch 15 in Civil Case No. V-5369, ordering the dismissal of the action for repartition, resurvey and reconveyance filed by petitioners. Pure questions of law are raised in this appeal as the following factual antecedents are undisputed: Salome, Consorcia, Alfredo, Maria, Rosalia, Jose, Quirico and Julita, all surnamed Bornales, were the original co-owners of Lot 162 of the Cadastral Survey of Pontevedra, Capiz under Original Certificate of Title No. 18047. As appearing therein, the lot, which consisted of a total area of 27,179 square meters was divided in aliquot shares among the eight (8) co-owners as follows: Salome Bornales Consorcia Bornales Alfredo Bornales Maria Bornales Jose Bornales Quirico Bornales Rosalia Bornales Julita Bornales 4/16 4/16 2/16 2/16 1/16 1/16 1/16 1/16

On July 14, 1940, Salome sold part of her 4/16 share in Lot 162 for P200.00 to Soledad Daynolo. In the Deed of Absolute Sale signed by Salome and two other co-owners,

Resultantly, Soledad became a co-owner of Lot 162 as of the year 1940 when the sale was made in her favor. It follows that Salome, Consorcia and Alfredo could not have sold the entire Lot 162 to Jose Regalado, Sr. on April 14, 1948 because at that time, the ideal shares held by the three co-owners/vendors were equivalent to only 10/16 of the undivided property less the aliquot share previously sold by Salome to Soledad. Based on the principle that no one can give what he does not have,[14] Salome, Consorcia and Alfredo could not legally sell the shares pertaining to Soledad since a co-owner cannot alienate more than his share in the co-ownership. We have ruled many times 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. Since a co-owner is entitled to sell his undivided share, a sale of the entire property by one co-owner will only transfer the rights of said co-owner to the buyer, thereby making the buyer a co-owner of the property.[15] In this case, Regalado merely became a new co-owner of Lot 162 to the extent of the shares which Salome, Consorcia and Alfredo could validly convey. Soledad retained her rights as co-owner and could validly transfer her share to petitioners in 1951. The logical effect of the second disposition is to substitute petitioners in the rights of Soledad as co-owner of the land. Needless to say, these rights are preserved notwithstanding the issuance of TCT No. 14566 in Regalados name in 1977. Be that as it may, we find that the area subject matter of this petition had already been effectively segregated from the mother lot even before title was issued in favor of Regalado. It must be noted that 26 years had lapsed from the time petitioners bought and took possession of the property in 1951 until Regalado procured the issuance of TCT No. 14566. Additionally, the intervening years between the date of petitioners purchase of the property and 1987 when petitioners filed the instant complaint, comprise all of 36 years. However, at no instance during this time did respondents or Regalado, for that matter, question petitioners right over the land in dispute. In the case of Vda. de Cabrera vs. Court of Appeals,[16] we had occasion to hold that where the transferees of an undivided portion of the land allowed a coowner of the property to occupy a definite portion thereof and had not disturbed the same for a period too long to be ignored, the possessor is in a better condition or right than said transferees. (Potior est condition possidentis). Such undisturbed possession had the effect of a partial partition of the co-owned property which entitles the possessor to the definite portion which he occupies. Conformably, petitioners are entitled to the disputed land, having enjoyed uninterrupted possession thereof for a total of 49 years up to the present. The lower courts reliance on the doctrine that mere possession cannot defeat the right of a holder of a registered Torrens title over property is misplaced, considering that petitioners were deprived of their dominical rights over the said lot through fraud and with evident bad faith on the part of Regalado. Failure and intentional omission to disclose the fact of actual physical possession by another person during registration proceedings constitutes actual fraud. Likewise, it is fraud to knowingly omit or conceal a fact, upon which benefit is obtained to the prejudice of a third person.[17] In this case, we are convinced that Regalado knew of the fact that he did not have a title to the entire lot and could not, therefore, have validly registered the same in his name alone because he was aware of petitioners possession of the subject portion as well as the sale between Salome and Soledad. That Regalado had notice of the fact that the disputed portion of Lot 162 was under claim of ownership by petitioners and the latters predecessor is beyond question. Records show that the particular area subject of this case was mortgaged by Soledad and her husband to Jose Regalado, Sr. as early as May 1, 1947 or one year prior to the alienation of the whole lot in favor of the latter. Regalado never questioned the ownership of the lot given by Soledad as security for the P400.00 debt and he must have at least known that Soledad bought the subject portion from Salome since he could not have reasonably accepted the lot as security for the mortgage debt if such were not the case. By accepting the said portion of Lot 162 as security for the mortgage obligation, Regalado had in fact recognized Soledads ownership of this definite portion of Lot 162. Regalado could not have been ignorant of the fact that the disputed portion is being claimed by Soledad and subsequently, by petitioners, since

Regalado even executed a Release of Mortgage on May 4, 1951, three years after the entire property was supposedly sold to him. It would certainly be illogical for any mortgagee to accept property as security, purchase the mortgaged property and, thereafter, claim the very same property as his own while the mortgage was still subsisting. Consequently, respondents are estopped from asserting that they own the subject land in view of the Deed of Mortgage and Discharge of Mortgage executed between Regalado and petitioners predecessor-in-interest. As petitioners correctly contend, respondents are barred from making this assertion under the equitable principle of estoppel by deed, whereby a party to a deed and his privies are precluded from asserting as against the other and his privies any right or title in derogation of the deed, or from denying the truth of any material fact asserted in it.[18] A perusal of the documents evidencing the mortgage would readily reveal that Soledad, as mortgagor, had declared herself absolute owner of the piece of land now being litigated. This declaration of fact was accepted by Regalado as mortgagee and accordingly, his heirs cannot now be permitted to deny it. Although Regalados certificate of title became indefeasible after the lapse of one year from the date of the decree of registration, the attendance of fraud in its issuance created an implied trust in favor of petitioners and gave them the right to seek reconveyance of the parcel wrongfully obtained by the former. An action for reconveyance based on an implied trust ordinarily prescribes in ten years. But when the right of the true and real owner is recognized, expressly or implicitly such as when he remains undisturbed in his possession, the said action is imprescriptible, it being in the nature of a suit for quieting of title.[19] Having established by clear and convincing evidence that they are the legal owners of the litigated portion included in TCT No. 14566, it is only proper that reconveyance of the property be ordered in favor of petitioners. The alleged incontrovertibility of Regalados title cannot be successfully invoked by respondents because certificates of title merely confirm or record title already existing and cannot be used to protect a usurper from the true owner or be used as a shield for the commission of fraud.[20] WHEREFORE, the petition is GRANTED. The assailed decision of the Court of Appeals in CA-G.R. CV No. 30438 is REVERSED and SET ASIDE. The parties are directed to cause a SURVEY for exact determination of their respective portions in Lot 162-C-6. Transfer Certificate of Title No. 14566 is declared CANCELLED and the Register of Deeds of Capiz is ordered to ISSUE a new title in accordance with said survey, upon finality of this decision. Costs against respondents. SO ORDERED. <See Sanchez vs. CA> A THIRD DIVISION

BALITE-DIFUNTORUM, PEDRO T. BALITE, PABLO T. BALITE, GASPAR T. BALITE, CRISTETA T. BALITE and AURELIO T. BALITE JR., All Represented by GASPAR T. BALITE,

Chairman, Sandoval-Gutierrez, Corona, Carpio Morales, and Garcia, JJ

Petitioners,

- versus -

Promulgated: RODRIGO N. LIM, Respondent. DECEMBER 10, 2004

x -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- --- -- x

DECISION PANGANIBAN, J.:

HEIRS OF THE LATE SPOUSES AURELIO AND ESPERANZA BALITE; Namely, ANTONIO T. BALITE, FLOR T. BALITEZAMAR, VISITACION T.

G.R. No. 152168 Present:

deed of sale that allegedly states a price lower than the true consideration is nonetheless binding between the parties and their successors in interest. Furthermore, a deed of sale in which the parties clearly intended to transfer ownership of the property cannot be presumed to be an equitable mortgage under Article 1602 of the Civil Code. Finally, an agreement that purports to sell in metes and bounds a specific portion of an unpartitioned co-owned property is not void; it shall effectively transfer the sellers ideal share in the co-ownership.

The Case Panganiban, J,

Property | Art. 484 to 493 | 43

Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, assailing the February 11, 2002 Decision[2] of the Court of Appeals (CA) in CA-GR CV No. 65395. The decretal portion of the Decision reads as follows:

The Facts

3. 4. 5.

P200,000.00 payable on or before May 15, 1996. P200,000.00 payable on or before July 15, 1996. P200,000.00 payable on or before September 15, 1996. P200,000.00 payable on or before December 15, 1996.

IN THE LIGHT OF ALL THE FOREGOING, the Decision of the Court a quo subject of the appeal is hereby SET ASIDE AND REVERSED and another Decision is hereby rendered as follows:

The CA summarized the facts in this manner: 6. The spouses Aurelio x x x and Esperanza Balite were the owners of a parcel of land, located [at] Poblacion (Barangay Molave), Catarman, Northern Samar, with an area of seventeen thousand five hundred fifty-one (17,551) square meters, [and] covered by Original Certificate of Title [OCT] No. 10824. When Aurelio died intestate [in 1985, his wife], Esperanza Balite, and their children, x x x [petitioners] Antonio Balite, Flor Balite-Zamar, Visitacion BaliteDifuntorum, Pedro Balite, Pablo Balite, Gaspar Balite, Cristeta (Tita) Balite and Aurelio Balite, Jr., inherited the [subject] property and became co-owners thereof, with Esperanza x x x inheriting an undivided [share] of [9,751] square meters.

1. The Deed of Absolute Sale (Exhibit A) is valid only insofar as the pro indiviso share of Esperanza Balite over the property covered by Original Certificate of Title No. 10824 is concerned;

Only Esperanza and two of her children, namely, Antonio x x x and Cristeta x x x, knew about the said transaction. x x x Geodetic Engineer Bonifacio G. Tasic conducted a subdivision survey of the property and prepared a Sketch Plan showing a portion of the property, identified as Lot 243 with an area of 10,000 square meters, under the name Rodrigo N. Lim.

2. The Register of Deeds is hereby ordered to cancel Transfer Certificate of Title No. 6683 and to issue another over the entirety of the property covered by Original Certificate of Title No. 10824, upon the payment of the capital gains tax due, as provided for by law, (based on the purchase price of the property in the amount of P1,000,000.00), with the following as co-owners, over the property described therein:

a)

Each of the [petitioners] over an undivided portion of 975 square meters;

In the meantime, Esperanza x x x [became] ill and was in dire need of money for her hospital expenses x x x. She, through her daughter, Cristeta, offered to sell to Rodrigo Lim, [her] undivided share x x x for the price of P1,000,000.00. x x x Esperanza x x x and Rodrigo x x x agreed that, under the Deed of Absolute Sale, to be executed by Esperanza x x x over the property, it will be made to appear that the purchase price of the property would be P150,000.00, although the actual price agreed upon by them for the property was P1,000,000.00.

The Sketch Plan was signed by Rodrigo x x x and Esperanza. Thereafter, Rodrigo x x x took actual possession of the property and introduced improvements thereon. He remitted to Esperanza x x x and Cristeta x x x sums of money in partial payments of the x x x property for which he signed Receipts.

Gaspar, Visitacion, Flor, Pedro and Aurelio, Jr. x x x learned of the sale, and on August 21, 1996, they wrote a letter to the Register of Deeds [RD] of Northern Samar, [saying] that they [were] not x x x informed of the sale of a portion of the said property by their mother x x x nor did they give their consent thereto, and requested the [RD] to:

b)

The [respondent], with an undivided portion of 9,751 square meters.

On April 16, 1996, Esperanza x x x executed a Deed of Absolute Sale in favor of Rodrigo N. Lim over a portion of the property, covered by [OCT] No. 10824, with an area of 10,000 square meters, for the price of P150,000.00 x x x.

3. The [respondent] is hereby ordered to pay to the [petitioners] the amount of P120,000.00, within a period of five (5) months from the finality of the Decision of this Court;

4. In the event that the [respondent] refuses or fails to remit the said amount to the [petitioner] within the period therefor, the rights and obligations of the parties shall be governed by Republic 6552 (Maceda Law).[3]

[They] also executed, on the same day, a Joint Affidavit under which they declared that the real price of the property was P1,000,000.00, payable to Esperanza x x x, by installments, as follows:

x x x hold in abeyance any processal or approval of any application for registration of title of ownership in the name of the buyer of said lot, which has not yet been partitioned judicially or extrajudicially, until the issue of the legality/validity of the above sale has been cleared.

1. 2.

P30,000.00 upon signing today of the document of sale. P170,000.00 payable upon completion of the actual relocation survey of the land sold by a Geodetic Engineer.

On August 24, 1996, Antonio x x x received from Rodrigo x x x, the amount of P30,000.00 in partial payment of [the] property and signed a Receipt for the said amount, declaring therein that the remaining balance of P350,000.00 shall personally and directly be released to my mother, Esperanza Balite, only. However, Rodrigo x x x drew and issued RCBC Check No. 309171, dated August 26, 1996, [payable] to the order of Antonio Balite in the amount of P30,000.00 in partial payment of the property.
Property | Art. 484 to 493 | 44

undivided share should be taken from the undivided shares of Cristeta and Antonio, who expressly agreed to and benefited from the sale. On October 1, 1996, Esperanza x x x executed a Special Power of Attorney appointing her son, Antonio, to collect and receive, from Rodrigo, the balance of the purchase price of the x x x property and to sign the appropriate documents therefor. xxx xxx xxx Ruling of the Court of Appeals The [petitioners] had a Notice of Lis Pendens, dated June 23, 1997, annotated, on June 27, 1997, at the dorsal portion of OCT No. 10824. On October 23, 1996, Esperanza signed a letter addressed to Rodrigo informing the latter that her children did not agree to the sale of the property to him and that she was withdrawing all her commitments until the validity of the sale is finally resolved:

xxx

xxx

xxx

In the meantime, the RD cancelled, on July 10, 1997, OCT No. 10824 and issued Transfer Certificate of Title [TCT] No. 6683 to and under the name of Rodrigo over Lot 243. The Notice of Lis Pendens x x x was carried over in TCT No. 6683.

On October 31, 1996, Esperanza died intestate and was survived by her aforenamed children.

Subsequently, Rodrigo secured a loan from the Rizal Commercial Banking Corporation in the amount of P2,000,000.00 and executed a Real Estate Mortgage over the [subject] property as security therefor.

The CA held that the sale was valid and binding insofar as Esperanza Balites undivided share of the property was concerned. It affirmed the trial courts ruling that the lack of consent of the co-owners did not nullify the sale. The buyer, respondent herein, became a co-owner of the property to the extent of the pro indiviso share of the vendor, subject to the portion that may be allotted to him upon the termination of the co-ownership. The appellate court disagreed with the averment of petitioners that the registration of the sale and the issuance of TCT No. 6683 was ineffective and that they became the owners of the share of Esperanza upon the latters death.

[Meanwhile], Rodrigo caused to be published, in the Samar Reporter, on November 14, 21 and 28, 1996, the aforesaid Deed of Absolute Sale. Earlier, on November 21, 1996, Antonio received the amount of P10,000.00 from Rodrigo for the payment of the estate tax due from the estate of Esperanza.

On motion of the [petitioners], they were granted x x x leave to file an Amended Complaint impleading the bank as [additional] party-defendant. On November 26, 1997, [petitioners] filed their "Amended Complaint.

The CA likewise rejected petitioners claim that the sale was void allegedly because the actual purchase price of the property was not stated in the Deed of Absolute Sale. It found that the true and correct consideration for the sale was P1,000,000 as declared by Esperanza and respondent in their Joint Affidavit. Applying Article 1353[5] of the Civil Code, it held that the falsity of the price or consideration stated in the Deed did not render it void. The CA pointed out, however, that the State retained the right to recover the capital gains tax based on the true price of P1,000,000.

Also, the capital gains tax, in the amount of P14,506.25, based on the purchase price of P150,000.00 appearing on the Deed of Absolute Sale, was paid to the Bureau of Internal Revenue which issued a Certification of said payments, on March 5, 1997, authorizing the registration of the Deed of Absolute Sale x x x. However, the [RD] refused to issue a title over the property to and under the name of Rodrigo unless and until the owners duplicate of OCT No. 10824 was presented to [it]. Rodrigo filed a Petition for Mandamus against the RD with the Regional Trial Court of Northern Samar (Rodrigo Lim versus Fernando Abella, Special Civil Case No. 48). x x x. On June 13, 1997, the court issued an Order to the RD to cancel OCT No. 10824 and to issue a certificate of title over Lot 243 under the name of Rodrigo.

The [respondent] opposed the Amended Complaint x x x contending that it was improper for [petitioners] to join, in their complaint, an ordinary civil action for the nullification of the Real Estate Mortgage executed by the respondent in favor of the Bank as the action of the petitioners before the court was a special civil action.

The appellate court rejected petitioners contention that, because of the allegedly unconscionably low and inadequate consideration involved, the transaction covered by the Deed was an equitable mortgage under Article 1602 of the Civil Code. Observing that the argument had never been raised in the court a quo, it ruled that petitioners were proscribed from making this claim, for the first time, on appeal.

On June 27, 1997, [petitioners] filed a complaint against Rodrigo with the Regional Trial Court of Northern Samar, entitled and docketed as Heirs of the Spouses Aurelio Balite, et al. versus Rodrigo Lim, Civil Case No. 920, for Annulment of Sale, Quieting of Title, Injunction and Damages x x x, [the origin of the instant case.]

On March 30, 1998, the court issued an Order rejecting the Amended Complaint of the petitioners on the grounds that: (a) the Bank cannot be impleaded as party-defendant under Rule 63, Section 1 of the 1997 Rules of Civil Procedure; (b) the Amended Complaint constituted a collateral attack on TCT No. 6683. The [petitioners] did not file any motion for the reconsideration of the order of the court.[4] The trial court dismissed the Complaint and ordered the cancellation of the lis pendens annotated at the back of TCT No. 6683. It held that, pursuant to Article 493 of the Civil Code, a co-owner has the right to sell his/her undivided share. The sale made by a co-owner is not invalidated by the absence of the consent of the other co-owners. Hence, the sale by Esperanza of the 10,000-square-meter portion of the property was valid; the excess from her

The CA further held that the remaining liability of respondent was P120,000. It relied on the Receipt dated August 24, 1996, which stated that his outstanding balance for the consideration was P350,000. It deducted therefrom the amounts of P30,000 received by Antonio on August 27, 1996; and P200,000, which was the amount of the check dated September 15, 1996, issued by respondent payable to Esperanza.

Finally, the appellate court noted that the mortgage over the property had been executed after the filing of the Complaint. What petitioners should have filed was a supplemental complaint instead of an amended complaint. Contrary to respondents argument, it also held that the bank was not an indispensable party to the case; but was merely a proper party. Thus, there is no necessity to implead it as party-defendant, although the court a quo had the option to do so. And even if it were not impleaded, the appellate court ruled that the bank would still have been bound by the outcome of the case, as the latter was
Property | Art. 484 to 493 | 45

a mortgagee pendente lite over real estate that was covered by a certificate of title with an annotated lis pendens.

E Whether or not the [CA] seriously erred in not declaring that TCT No. T-6683 in the name of Respondent Rodrigo N. Lim is null and void and all dealings involving the same are likewise null and void and/or subject to the decision of the case at bar in view of the notice of lis pendens annotated therein.

Hence, this Petition.[6]

We have before us an example of a simulated contract. Article 1345 of the Civil Code provides that the simulation of a contract may either be absolute or relative. In absolute simulation, there is a colorable contract but without any substance, because the parties have no intention to be bound by it. An absolutely simulated contract is void, and the parties may recover from each other what they may have given under the contract.[8] On the other hand, if the parties state a false cause in the contract to conceal their real agreement, such a contract is relatively simulated. Here, the parties real agreement binds them.[9]

F Issues In their Memorandum, petitioners present the following issues: Even assuming but without admitting that the Deed of Sale is enforceable, the respondent court seriously erred in not deciding that the consideration is unconscionably low and inadequate and therefore the transaction between the executing parties constitutes an equitable mortgage.

In the present case, the parties intended to be bound by the Contract, even if it did not reflect the actual purchase price of the property. That the parties intended the agreement to produce legal effect is revealed by the letter of Esperanza Balite to respondent dated October 23, 1996[10] and petitioners admission that there was a partial payment of P320,000 made on the basis of the Deed of Absolute Sale. There was an intention to transfer the ownership of over 10,000 square meters of the property . Clear from the letter is the fact that the objections of her children prompted Esperanza to unilaterally withdraw from the transaction. Since the Deed of Absolute Sale was merely relatively simulated, it remains valid and enforceable. All the essential requisites prescribed by law for the validity and perfection of contracts are present. However, the parties shall be bound by their real agreement for a consideration of P1,000,000 as reflected in their Joint Affidavit.[11]

A Whether or not the [CA] seriously erred in not deciding that the Deed of Absolute Sale dated April 16, 1996 is null and void on the grounds that it is falsified; it has an unlawful cause; and it is contrary to law and/or public policy. G The [CA] greatly erred in not rendering judgment awarding damages and attorneys fee[s] in favor of petitioners among others.[7] In sum, the issues raised by petitioners center on the following: 1) whether the Deed of Absolute Sale is valid, and 2) whether there is still any sum for which respondent is liable. The Courts Ruling

B Whether or not the [CA] gravely erred in not finding that the amount paid by [respondent] is only three hundred twenty thousand (P320,000.00) pesos and that respondents claim that he has paid one million pesos except P44,000.00 as balance, is fraudulent and false.

The juridical nature of the Contract remained the same. What was concealed was merely the actual price. Where the essential requisites are present and the simulation refers only to the content or terms of the contract, the agreement is absolutely binding and enforceable[12] between the parties and their successors in interest.

C Whether or not the [CA] seriously erred in not deciding that at the time the Deed of Sale was registered x x x on May 30, 1997, said Deed of Sale can no longer bind the property covered by OCT No. 10824 because said land had already become the property of all the petitioners upon the death of their mother on October 31, 1996 and therefore such registration is functus of[f]icio involving a null and void document.

The Petition has no merit.

Petitioners cannot be permitted to unmake the Contract voluntarily entered into by their predecessor, even if the stated consideration was included therein for an unlawful purpose. The binding force of a contract must be recognized as far as it is legally possible to do so.[13] However, as properly held by the appellate court, the government has the right to collect the proper taxes based on the correct purchase price.

First Issue: Validity of the Sale

Being onerous, the Contract had for its cause or consideration the price of P1,000,000. Both this consideration as well as the subject matter of the contract -- Esperanzas share in the property covered by OCT No. 10824 -- are lawful. The motives of the contracting parties for lowering the price of the sale -- in the present case, the reduction of capital gains tax liability -- should not be confused with the consideration.[14] Although illegal, the motives neither determine nor take the place of the consideration. [15]

D Whether or not the [CA] seriously erred in not ruling that petitioners amended complaint dated November 27, 1997 was proper and admissible and deemed admitted to conform to evidence presented.

Petitioners contend that the Deed of Absolute Sale is null and void, because the undervalued consideration indicated therein was intended for an unlawful purpose -- to avoid the payment of higher capital gains taxes on the transaction. According to them, the appellate courts reliance on Article 1353 of the Civil Code was erroneous. They further contend that the Joint Affidavit is not proof of a true and lawful cause, but an integral part of a scheme to evade paying lawful taxes and registration fees to the government.

Deed of Sale not an Equitable Mortgage

Property | Art. 484 to 493 | 46

Petitioner further posits that even assuming that the deed of sale is valid it should only be deemed an equitable mortgage pursuant to Articles 1602 and 1604 of the Civil Code, because the price was clearly inadequate. They add that the presence of only one of the circumstances enumerated under Article 1602 would be sufficient to consider the Contract an equitable mortgage. We disagree.

dispose of such interest. The co-owner, however, has no right to sell or alienate a specific or determinate part of the thing owned in common, because such right over the thing is represented by an aliquot or ideal portion without any physical division. Nonetheless, the mere fact that the deed purports to transfer a concrete portion does not per se render the sale void.[20] The sale is valid, but only with respect to the aliquot share of the selling co-owner. Furthermore, the sale is subject to the results of the partition upon the termination of the coownership. Hence, the transaction between Esperanza Balite and respondent could be legally recognized only in respect to the formers pro indiviso share in the co-ownership. As a matter of fact, the Deed of Absolute Sale executed between the parties expressly referred to the 10,000-square-meter portion of the land sold to respondent as the share of Esperanza in the conjugal property. Her clear intention was to sell merely her ideal or undivided share in it. No valid objection can be made against that intent. Clearly then, the sale can be given effect to the extent of 9,751 square meters, her ideal share in the property as found by both the trial and the appellate courts.

Interestingly, he was never presented in the lower court to dispute the veracity of the contents of that Receipt, particularly the second paragraph that had categorically stated the outstanding balance of respondent as of August 24, 1996, to be P350,000. Furthermore, the evidence shows that subsequent payments of P30,000 and P200,000 were made by the latter. Thus, we affirm the CAs Decision holding that the remaining unpaid balance of the price was P120,000. WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED. Costs against the petitioners. SO ORDERED. METROPOLITAN BANK AND 163744 TRUST CO., Petitioner, - versus NICHOLSON PASCUAL a.k.a. NELSON PASCUAL, Respondent. 29, 2008 x-----------------------------------------------------------------------------------------x DECISION VELASCO, JR., J.: February G.R. No.

For Articles 1602 and 1604 to apply, two requisites must concur: one, the parties entered into a contract denominated as a contract of sale; and, two, their intention was to secure an existing debt by way of mortgage.[16]

Indeed, the existence of any of the circumstances enumerated in Article 1602, not a concurrence or an overwhelming number thereof, suffices to give rise to the presumption that a contract purporting to be an absolute sale is actually an equitable mortgage.[17] In the present case, however, the Contract does not merely purport to be an absolute sale. The records and the documentary evidence introduced by the parties indubitably show that the Contract is, indeed, one of absolute sale. There is no clear and convincing evidence that the parties agreed upon a mortgage of the subject property. Furthermore, the voluntary, written and unconditional acceptance of contractual commitments negates the theory of equitable mortgage. There is nothing doubtful about the terms of, or the circumstances surrounding, the Deed of Sale that would call for the application of Article 1602. The Joint Affidavit indisputably confirmed that the transaction between the parties was a sale. . When the words of a contract are clear and readily understandable, there is no room for construction. Contracts are to be interpreted according to their literal meaning and should not be interpreted beyond their obvious intendment.[18] The contract is the law between the parties. Notably, petitioners never raised as an issue before the trial court the fact that the document did not express the true intent and agreement of the contracting parties. They raised mere suppositions on the inadequacy of the price, in support of their argument that the Contract should be considered as an equitable mortgage.

Present:

Transfer of Property During her lifetime, Esperanza had already sold to respondent her share in the subject parcel; hence her heirs could no longer inherit it. The property she had transferred or conveyed no longer formed part of her estate to which her heirs may lay claim at the time of her death. The transfer took effect on April 16, 1996 (the date the Deed of Absolute Sale was executed), and not on May 30, 1997, when the Deed of Absolute Sale was registered. Thus, petitioners claim that the property became theirs upon the death of their mother is untenable.

Second Issue: Respondents Liability

Respondent Nicholson Pascual and Florencia Nevalga were married on January 19, 1985. During the union, Florencia bought from spouses Clarito and Belen Sering a 250square meter lot with a three-door apartment standing thereon located in Makati City. Subsequently, Transfer Certificate of Title (TCT) No. S-101473/T-510 covering the purchased lot was canceled and, in lieu thereof, TCT No. 156283[1] of the Registry of Deeds of Makati City was issued in the name of Florencia, married to Nelson Pascual a.k.a. Nicholson Pascual. In 1994, Florencia filed a suit for the declaration of nullity of marriage under Article 36 of the Family Code, docketed as Civil Case No. Q-95-23533. After trial, the Regional Trial Court (RTC), Branch 94 in Quezon City rendered, on July 31, 1995, a Decision,[2] declaring the marriage of Nicholson and Florencia null and void on the ground of psychological incapacity on the part of Nicholson. In the same decision, the RTC, inter alia, ordered the dissolution and liquidation of the ex-spouses conjugal partnership of gains. Subsequent events saw the couple going their separate ways without liquidating their conjugal partnership. On April 30, 1997, Florencia, together with spouses Norberto and Elvira Oliveros, obtained a PhP 58 million loan from petitioner Metropolitan Bank and Trust Co. (Metrobank). To secure the obligation, Florencia and the spouses Oliveros executed several real estate mortgages (REMs) on their properties, including one involving the lot covered by TCT No. 156283. Among the documents Florencia submitted to procure the loan were a copy of TCT No. 156283, a photocopy of the marriage-nullifying RTC decision, and a document denominated as Waiver that Nicholson purportedly executed on April 9, 1995. The waiver, made in favor of Florencia, covered the conjugal properties of the ex-spouses listed therein, but did not incidentally include the lot in question.

We find no basis to conclude that the purchase price of the property was grossly inadequate. Petitioners did not present any witness to testify as to the market values of real estate in the subjects locale. They made their claim on the basis alone of the P2,000,000 loan that respondent had been able to obtain from the Rizal Commercial Banking Corporation. This move did not sufficiently show the alleged inadequacy of the purchase price. A mortgage is a mere security for a loan. There was no showing that the property was the only security relied upon by the bank; or that the borrowers had no credit worthiness, other than the property offered as collateral.

Petitioners insist that the appellate court erred in holding that respondents outstanding liability on the Deed of Sale was P120,000, when the Receipts on record show payments in the total amount of P320,000 only. They argue that the August 24, 1996 Receipt, on which the appellate court based its conclusion, was unreliable. To begin with, this Court is not a trier of facts. [21] It is not its function to examine and determine the and not of facts, are reviewable by this Court in a petition for review on certiorari under Rule 45 of the Revised Rules of Court. Philippine Airlines, Inc. v. Court of Appeals[23] has held that factual findings of the Court of Appeals are binding and conclusive upon the Supreme Court. These findings may be reviewed[24] only under exceptional circumstances such as, among others, when the inference is manifestly mistaken;[25] the judgment is based on a misapprehension of facts;[26] findings of the trial court contradict those of the CA;[27] or the CA manifestly overlooked certain relevant and undisputed facts that, if properly considered, would justify a different conclusion.[28]
weight of the evidence. Well-entrenched is the doctrine that only errors of law,[22]

Co-Ownership

The appellate court was correct in affirming the validity of the sale of the property insofar as the pro indiviso share of Esperanza Balite was concerned. Article 493 of the Civil Code[19] gives the owner of an undivided interest in the property the right to freely sell and

Although the factual findings of the two lower courts were not identical, we hold that in the present case, the findings of the CA are in accord with the documents on record. The trial court admitted in evidence the August 24, 1996 Receipt signed by Antonio Balite.

Property | Art. 484 to 493 | 47

Due to the failure of Florencia and the spouses Oliveros to pay their loan obligation when it fell due, Metrobank, on November 29, 1999, initiated foreclosure proceedings under Act No. 3135, as amended, before the Office of the Notary Public of Makati City. Subsequently, Metrobank caused the publication of the notice of sale on three issues of Remate.[3] At the auction sale on January 21, 2000, Metrobank emerged as the highest bidder. Getting wind of the foreclosure proceedings, Nicholson filed on June 28, 2000, before the RTC in Makati City, a Complaint to declare the nullity of the mortgage of the disputed property, docketed as Civil Case No. 00-789 and eventually raffled to Branch 65 of the court. In it, Nicholson alleged that the property, which is still conjugal property, was mortgaged without his consent. Metrobank, in its Answer with Counterclaim and Cross-Claim,[4] alleged that the disputed lot, being registered in Florencias name, was paraphernal. Metrobank also asserted having approved the mortgage in good faith. Florencia did not file an answer within the reglementary period and, hence, was subsequently declared in default. The RTC Declared the REM Invalid After trial on the merits, the RTC rendered, on September 24, 2001, judgment finding for Nicholson. The fallo reads: PREMISES CONSIDERED, the Court renders judgment declaring the real estate mortgage on the property covered by [TCT] No. 156283 of the Registry of Deeds for the City of Makati as well as all proceedings thereon null and void. The Court further orders defendants [Metrobank and Florencia] jointly and severally to pay plaintiff [Nicholson]: 1. 2. 3. PhP100,000.00 by way of moral damages; PhP75,000.00 by way of attorneys fees; and The costs.

documents, which, if properly scrutinized, would have put the bank on guard against approving the mortgage. Among the data referred to was the date of execution of the deed of waiver. spouses. The RTC dismissed Metrobanks counterclaim and cross-claim against the ex-

b.

Whether or not the [CA] erred in not holding that the declaration of nullity of marriage between the respondent Nicholson Pascual and Florencia Nevalga ipso facto dissolved the regime of community of property of the spouses. Whether or not the [CA] erred in ruling that the petitioner is an innocent purchaser for value.[7] Our Ruling

Metrobanks motion for reconsideration was denied. Undeterred, Metrobank appealed to the Court of Appeals (CA), the appeal docketed as CA-G.R. CV No. 74874. The CA Affirmed with Modification the RTCs Decision On January 28, 2004, the CA rendered a Decision affirmatory of that of the RTC, except for the award therein of moral damages and attorneys fees which the CA ordered deleted. The dispositive portion of the CAs Decision reads: WHEREFORE, premises considered, the appealed decision is hereby AFFIRMED WITH MODIFICATION with respect to the award of moral damages and attorneys fees which is hereby DELETED. SO ORDERED.[6] Like the RTC earlier held, the CA ruled that Metrobank failed to overthrow the presumption established in Art. 116 of the Family Code. And also decreed as going against Metrobank was Florencias failure to comply with the prescriptions of the succeeding Art. 124 of the Code on the disposition of conjugal partnership property. Art. 124 states: Art. 124. The administration and enjoyment of the conjugal partnership property shall belong to both spouses jointly. In case of disagreement, the husbands decision shall prevail, subject to recourse to the court by the wife for proper remedy x x x. In the event that one spouse is incapacitated or otherwise unable to participate in the administration of the conjugal properties, the other spouse may assume sole powers of administration. These powers do not include disposition or encumbrance without authority of the court or written consent of the other spouse. In the absence of such authority or consent, the disposition or encumbrance shall be void. However, the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn by either or both offerors. As to the deletion of the award of moral damages and attorneys fees, the CA, in gist, held that Metrobank did not enter into the mortgage contract out of ill-will or for some fraudulent purpose, moral obliquity, or like dishonest considerations as to justify damages. Metrobank moved but was denied reconsideration by the CA. Thus, Metrobank filed this Petition for Review on Certiorari under Rule 45, raising the following issues for consideration: a. Whether or not the [CA] erred in declaring subject property as conjugal by applying Article 116 of the Family Code.

c.

A modification of the CAs Decision is in order. The Disputed Property is Conjugal It is Metrobanks threshold posture that Art. 160 of the Civil Code providing that [a]ll property of the marriage is presumed to belong to the conjugal partnership, unless it be prove[n] that it pertains exclusively to the husband or to the wife, applies. To Metrobank, Art. 116 of the Family Code could not be of governing application inasmuch as Nicholson and Florencia contracted marriage before the effectivity of the Family Code on August 3, 1988. Citing Manongsong v. Estimo,[8] Metrobank asserts that the presumption of conjugal ownership under Art. 160 of the Civil Code applies when there is proof that the property was acquired during the marriage. Metrobank adds, however, that for the presumption of conjugal ownership to operate, evidence must be adduced to prove that not only was the property acquired during the marriage but that conjugal funds were used for the acquisition, a burden Nicholson allegedly failed to discharge. To bolster its thesis on the paraphernal nature of the disputed property, Metrobank cites Francisco v. Court of Appeals[9] and Jocson v. Court of Appeals,[10] among other cases, where this Court held that a property registered in the name of a certain person with a description of being married is no proof that the property was acquired during the spouses marriage. On the other hand, Nicholson, banking on De Leon v. Rehabilitation Finance Corporation[11] and Wong v. IAC,[12] contends that Metrobank failed to overcome the legal presumption that the disputed property is conjugal. He asserts that Metrobanks arguments on the matter of presumption are misleading as only one postulate needs to be shown for the presumption in favor of conjugal ownership to arise, that is, the fact of acquisition during marriage. Nicholson dismisses, as inapplicable, Francisco and Jocson, noting that they are relevant only when there is no indication as to the exact date of acquisition of the property alleged to be conjugal. As a final point, Nicholson invites attention to the fact that Metrobank had virtually recognized the conjugal nature of the property in at least three instances. The first was when the bank lumped him with Florencia in Civil Case No. 00-789 as co-mortgagors and when they were referred to as spouses in the petition for extrajudicial foreclosure of mortgage. Then came the published notice of foreclosure sale where Nicholson was again designated as comortgagor. And third, in its demand-letter[13] to vacate the disputed lot, Metrobank addressed Nicholson and Florencia as spouses, albeit the finality of the decree of nullity of marriage between them had long set in. We find for Nicholson. First, while Metrobank is correct in saying that Art. 160 of the Civil Code, not Art. 116 of the Family Code, is the applicable legal provision since the property was acquired prior
Property | Art. 484 to 493 | 48

SO ORDERED.[5] Even as it declared the invalidity of the mortgage, the trial court found the said lot to be conjugal, the same having been acquired during the existence of the marriage of Nicholson and Florencia. In so ruling, the RTC invoked Art. 116 of the Family Code, providing that all property acquired during the marriage, whether the acquisition appears to have been made, contracted or registered in the name of one or both spouses, is presumed to be conjugal unless the contrary is proved. To the trial court, Metrobank had not overcome the presumptive conjugal nature of the lot. And being conjugal, the RTC concluded that the disputed property may not be validly encumbered by Florencia without Nicholsons consent. The RTC also found the deed of waiver Florencia submitted to Metrobank to be fatally defective. For let alone the fact that Nicholson denied executing the same and that the signature of the notarizing officer was a forgery, the waiver document was allegedly executed on April 9, 1995 or a little over three months before the issuance of the RTC decision declaring the nullity of marriage between Nicholson and Florencia. The trial court also declared Metrobank as a mortgagee in bad faith on account of negligence, stating the observation that certain data appeared in the supporting contract

to the enactment of the Family Code, it errs in its theory that, before conjugal ownership could be legally presumed, there must be a showing that the property was acquired during marriage using conjugal funds. Contrary to Metrobanks submission, the Court did not, in Manongsong,[14] add the matter of the use of conjugal funds as an essential requirement for the presumption of conjugal ownership to arise. Nicholson is correct in pointing out that only proof of acquisition during the marriage is needed to raise the presumption that the property is conjugal. Indeed, if proof on the use of conjugal is still required as a necessary condition before the presumption can arise, then the legal presumption set forth in the law would veritably be a superfluity. As we stressed in Castro v. Miat: Petitioners also overlook Article 160 of the New Civil Code. It provides that all property of the marriage is presumed to be conjugal partnership, unless it be prove[n] that it pertains exclusively to the husband or to the wife. This article does not require proof that the property was acquired with funds of the partnership. The presumption applies even when the manner in which the property was acquired does not appear.[15] (Emphasis supplied.) Second, Francisco and Jocson do not reinforce Metrobanks theory. Metrobank would thrust on the Court, invoking the two cases, the argument that the registration of the property in the name of Florencia Nevalga, married to Nelson Pascual operates to describe only the marital status of the title holder, but not as proof that the property was acquired during the existence of the marriage. Metrobank is wrong. As Nicholson aptly points out, if proof obtains on the acquisition of the property during the existence of the marriage, then the presumption of conjugal ownership applies. The correct lesson of Francisco and Jocson is that proof of acquisition during the marital coverture is a condition sine qua non for the operation of the presumption in favor of conjugal ownership. When there is no showing as to when the property was acquired by the spouse, the fact that a title is in the name of the spouse is an indication that the property belongs exclusively to said spouse.[16] The Court, to be sure, has taken stock of Nicholsons arguments regarding Metrobank having implicitly acknowledged, thus being in virtual estoppel to question, the conjugal ownership of the disputed lot, the bank having named the former in the foreclosure proceedings below as either the spouse of Florencia or her co-mortgagor. It is felt, however, that there is no compelling reason to delve into the matter of estoppel, the same having been raised only for the first time in this petition. Besides, however Nicholson was designated below does not really change, one way or another, the classification of the lot in question. Termination of Conjugal Property Regime does not ipso facto End the Nature of Conjugal Ownership Metrobank next maintains that, contrary to the CAs holding, Art. 129 of the Family Code is inapplicable. Art. 129 in part reads: Art. 129. Upon the dissolution of the conjugal partnership regime, the following procedure shall apply: x x x x (7) The net remainder of the conjugal partnership properties shall constitute the profits, which shall be divided equally between husband and wife, unless a different proportion or division

was agreed upon in the marriage settlements or unless there has been a voluntary waiver or forfeiture of such share as provided in this Code. Apropos the aforequoted provision, Metrobank asserts that the waiver executed by Nicholson, effected as it were before the dissolution of the conjugal property regime, vested on Florencia full ownership of all the properties acquired during the marriage. Nicholson counters that the mere declaration of nullity of marriage, without more, does not automatically result in a regime of complete separation when it is shown that there was no liquidation of the conjugal assets. We again find for Nicholson. While the declared nullity of marriage of Nicholson and Florencia severed their marital bond and dissolved the conjugal partnership, the character of the properties acquired before such declaration continues to subsist as conjugal properties until and after the liquidation and partition of the partnership. This conclusion holds true whether we apply Art. 129 of the Family Code on liquidation of the conjugal partnerships assets and liabilities which is generally prospective in application, or Section 7, Chapter 4, Title IV, Book I (Arts. 179 to 185) of the Civil Code on the subject, Conjugal Partnership of Gains. For, the relevant provisions of both Codes first require the liquidation of the conjugal properties before a regime of separation of property reigns. In Dael v. Intermediate Appellate Court, we ruled that pending its liquidation following its dissolution, the conjugal partnership of gains is converted into an implied ordinary co-ownership among the surviving spouse and the other heirs of the deceased.[17] In this pre-liquidation scenario, Art. 493 of the Civil Code shall govern the property relationship between the former spouses, where: 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 coownership. (Emphasis supplied.) In the case at bar, Florencia constituted the mortgage on the disputed lot on April 30, 1997, or a little less than two years after the dissolution of the conjugal partnership on July 31, 1995, but before the liquidation of the partnership. Be that as it may, what governed the property relations of the former spouses when the mortgage was given is the aforequoted Art. 493. Under it, Florencia has the right to mortgage or even sell her one-half (1/2) undivided interest in the disputed property even without the consent of Nicholson. However, the rights of Metrobank, as mortgagee, are limited only to the 1/2 undivided portion that Florencia owned. Accordingly, the mortgage contract insofar as it covered the remaining 1/2 undivided portion of the lot is null and void, Nicholson not having consented to the mortgage of his undivided half. The conclusion would have, however, been different if Nicholson indeed duly waived his share in the conjugal partnership. But, as found by the courts a quo, the April 9, 1995 deed of waiver allegedly executed by Nicholson three months prior to the dissolution of the marriage and the conjugal partnership of gains on July 31, 1995 bore his forged signature, not to mention that of the notarizing officer. A spurious deed of waiver does not transfer any

right at all, albeit it may become the root of a valid title in the hands of an innocent buyer for value.

Upon the foregoing perspective, Metrobanks right, as mortgagee and as the successful bidder at the auction of the lot, is confined only to the 1/2 undivided portion thereof heretofore pertaining in ownership to Florencia. The other undivided half belongs to Nicholson. As owner pro indiviso of a portion of the lot in question, Metrobank may ask for the partition of the lot and its property rights shall be limited to the portion which may be allotted to [the bank] in the division upon the termination of the co-ownership.[18] This disposition is in line with the well-established principle that the binding force of a contract must be recognized as far as it is legally possible to do soquando res non valet ut ago, valeat quantum valere potest.[19] In view of our resolution on the validity of the auction of the lot in favor of Metrobank, there is hardly a need to discuss at length whether or not Metrobank was a mortgagee in good faith. Suffice it to state for the nonce that where the mortgagee is a banking institution, the general rule that a purchaser or mortgagee of the land need not look beyond the four corners of the title is inapplicable.[20] Unlike private individuals, it behooves banks to exercise greater care and due diligence before entering into a mortgage contract. The ascertainment of the status or condition of the property offered as security and the validity of the mortgagors title must be standard and indispensable part of the banks operation.[21] A bank that failed to observe due diligence cannot be accorded the status of a bona fide mortgagee,[22] as here. But as found by the CA, however, Metrobanks failure to comply with the due diligence requirement was not the result of a dishonest purpose, some moral obliquity or breach of a known duty for some interest or ill-will that partakes of fraud that would justify damages. WHEREFORE, the petition is PARTLY GRANTED. The appealed Decision of the CA dated January 28, 2004, upholding with modification the Decision of the RTC, Branch 65 in Makati City, in Civil Case No. 00-789, is AFFIRMED with the MODIFICATION that the REM over the lot covered by TCT No. 156283 of the Registry of Deeds of Makati City is hereby declared valid only insofar as the pro indiviso share of Florencia thereon is concerned. As modified, the Decision of the RTC shall read: PREMISES CONSIDERED, the real estate mortgage on the property covered by TCT No. 156283 of the Registry of Deeds of Makati City and all proceedings thereon are NULL and VOID with respect to the undivided 1/2 portion of the disputed property owned by Nicholson, but VALID with respect to the other undivided 1/2 portion belonging to Florencia. The claims of Nicholson for moral damages and attorneys fees are DENIED for lack of merit. No pronouncement as to costs. SO ORDERED.

Property | Art. 484 to 493 | 49