Property (Quieting and Co Ownership)

QUIETING
OF
TITLE
G.R. No. 159131. July 27, 2009.*
HEIRS OF TORIBIO WAGA, represented by MERBA A.
WAGA, petitioners, vs. ISABELO SACABIN, respondent.
Actions; Reconveyance; An action for reconveyance of property
respects the decree of registration as incontrovertible and merely seeks the
transfer of the property wrongfully or erroneously registered in anothers
name to its rightful owner or to one who claims to have a better right.
Respondent filed his claim to a portion of Lot No. 450 through a protest
before the DENR only on 26 December 1991 because it was only in that
year that respondent learned that a portion of his property was inadvertently
included in petitioners certificate of title. Petitioners themselves came to
know about the exact boundaries of Lot No. 450 and the inclusion of the
disputed portion in their certificate of title only in 1991 when they
subdivided said land for partition among the heirs. Thus, when petitioners
started to take possession of the disputed 790 sq.m. portion in 1991,
respondent filed a protest before the DENR on 26 December 1991 to claim
the disputed portion for which respondent and his predecessors-in-interest
have been in possession since 1940. On 9 October 1998, respondent filed a
complaint against petitioners for Amendment of Original Certificate of Title,
Ejectment, and Damages. The action primarily seeks the reconveyance of
the disputed 790 sq.m. portion of land through the amendment of OCT No.
P-8599. An action for reconveyance of property respects the decree of
registration as incontrovertible and merely seeks the transfer of the property
wrongfully or erroneously registered in anothers name to its rightful owner
or to one who claims to have a better right.
Same; Same; Prescription; Quieting of Title; An action for
reconveyance of property based on an implied or constructive trust is the
proper remedy of an aggrieved party whose property had been erroneously
registered in anothers name; An action for reconveyance filed by the
complainant who is in possession of the disputed property would be in the
nature of an action to quiet title which is imprescriptible.An action for
reconveyance of property based on an implied or constructive trust is the
proper remedy of an aggrieved party whose
_______________
* FIRST DIVISION.
42
4 SUPREME COURT REPORTS ANNOTATED
2
Heirs of Toribio Waga vs. Sacabin
property had been erroneously registered in anothers name. The prescriptive
period for the reconveyance of registered property is ten years, reckoned
from the date of the issuance of the certificate of title. However, the ten-year
prescriptive period for an action for reconveyance is not applicable where
the complainant is in possession of the land to be reconveyed and the
registered owner was never in possession of the disputed property. In such a
case, the action for reconveyance filed by the complainant who is in
possession of the disputed property would be in the nature of an action to
quiet title which is imprescriptible.
Same; Same; Reconveyance is just and proper to end the intolerable
anomaly that the patentees should have a Torrens title for the land which
has never been in their possession and which have been possessed by
another person in the concept of owner.In this case, respondent who has
been in possession of the disputed property since 1940, by himself and
through his predecessors-in-interest, is not barred from bringing the action
for reconveyance, which in effect seeks to quiet title to the property, against
petitioners whose claim to the property is based merely on their certificate of
title which mistakenly included respondents property. Respondent has a
better right to the disputed property since he and his predecessors-in-interest
had long been in possession of the property in the concept of owner.
Petitioners only took possession of the disputed property sometime in 1991
when they realized upon partition of Lot No. 450 that the certificate of title
issued to them included the disputed property. Reconveyance is just and
proper to end the intolerable anomaly that the patentees should have a
Torrens title for the land which has never been in their possession and which
have been possessed by another person in the concept of owner.
PETITION for review on certiorari of a decision of the Court of
Appeals.
The facts are stated in the opinion of the Court.
Cruz, Capule & Marcon Law Offices for petitioners.
Emmanuel A. Akut for respondent.
43
VOL. 594, JULY 27, 2009 43
CARPIO, J.:
The Case
This is a petition for review of the Decision2 dated 9 July 2003 of
1
the Court of Appeals in CA-GR CV No. 71137. The Court of

Appeals affirmed the Decision3 dated 24 April 2001 of the
Regional Trial Court of Misamis Oriental, Branch 44 (trial court).
The Facts
Petitioners predecessor-in-interest, Toribio Waga, filed a Free
Patent Application for Lot No. 450 containing an area of 4,960
sq.m. On 1 October 1965, Lot No. 450 was surveyed by a
Cadastral Land Surveyor. On 25 September 1968, Free Patent No.
411315 and Original Certificate of Title No. P-8599 (OCT No. P-
8599),4 covering Lot No. 450, were issued in the name of the Heirs
of Toribio Waga (petitioners). OCT No. P-8599 was registered in
the Office of the Register of Deeds for the Province of Misamis
Oriental on 29 August 1974.
On 26 December 1991, Isabelo Sacabin (respondent) filed a protest
before the Department of Environment and Natural Resources
(DENR), Region X, against the issuance of Free Patent No.
411315 and OCT No. P-8599 to petitioners and their subsequent
registration. Respondent alleged that around 500 sq.m. portion of
his land, identified as Lot No. 452 which is adjacent to Lot No.
450, had been erroneously included in OCT No. P-8599. The
DENR ordered an investigation on the alleged encroachment on
respondents property. On 10 October 1996, the Regional
Executive Director of the
_______________
1 Under Rule 45 of the 1997 Rules of Civil Procedure.
2 Penned by Associate Justice Mercedes Gozo-Dadole with Associate Justices
Conrado M. Vasquez, Jr. and Rosmari D. Carandang, concurring.
3 Penned by Presiding Judge Admiral P. Labis.
4 Records, pp. 8-10.
44
4
DENR, Region X, issued a decision5 recommending that an action
be taken by the Director of Lands for the annulment of Free Patent
No. 411315 and OCT No. P-8599 issued to petitioners, segregating
from Lot No. 450 the 790 sq.m. portion belonging to respondent.
When the Director of Lands failed to act on the recommendation,
respondent filed on 9 October 1998 a complaint against petitioners
for Amendment of Original Certificate of Title, Ejectment, and
Damages. The Special Investigator who conducted the ocular
inspection of the lots of the parties testified that he found seven
fifty-year old coconut trees planted in a straight line and forming a
common natural boundary between the lots of the parties. In his
report, the Special Investigator found that respondents lot
included the disputed 790 sq.m. portion.
The trial court found that respondent and his predecessors-in-
interest have been in possession of Lot No. 452, including the
disputed 790 sq.m. portion, in an open, continuous, peaceful, and
adverse manner since 1940. Since respondent and his
predecessors-in-interest have been in possession of Lot No. 452,
including the disputed 790 sq.m. portion, for more than 30 years in
peaceful, open, continuous and adverse manner and in the concept
of owner, then the subject land has become private property of
respondent by operation of law.
On 24 April 2001, the trial court rendered a decision, the
dispositive portion of which reads:
WHEREFORE, in view of the foregoing premises, judgment is hereby
rendered in favor of plaintiff (Isabelo Sacabin) and against the defendants
(Heirs of Toribio Waga, represented by Nellie W. Villamor and Elves
Galarosa). Defendants are ordered:
1) To segregate from OCT No. P-8599 reconvey that portion belonging to
plaintiff with an area of 790 sq. meters, more or less;
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5 Rollo, pp. 53-55.
45
VOL. 594, JULY 27, 2009 45
2) That defendant Elves Galarosa and all defendants occupying inside or in

possession of that portion belonging to plaintiff are ordered to vacate
therefrom and turn-over the same to plaintiff;
3) To pay, jointly and severally, the sum of
a) P50,000.00 for damages
b) P30,000.00 for attorneys fees
c) P10,000.00 for litigation
4) To pay the cost.
SO ORDERED.6
Petitioners appealed the trial courts decision to the Court of
Appeals, which affirmed the decision. Hence, this petition.
The Court of Appeals Ruling
The Court of Appeals held that the action filed by respondent was
not intended to defeat the indefeasibility of the title of petitioners
but merely to correct the area covered by their title since it
encroached on respondents property. Settled is the rule that a
person, whose certificate of title included by mistake or oversight
the land owned by another, does not become the owner of such
land by virtue of the certificate alone. The Torrens System is
intended to guarantee the integrity and conclusiveness of the
certificate of registration but it is not intended to perpetrate fraud
against the real owner of the registered land. The certificate of title
cannot be used to protect a usurper from the true owner.
As regards the rule on the indefeasibility of the Torrens title after
one year from the decree of registration, the Court of Appeals held
that the one-year prescriptive period is not applicable in this case
since there is no collateral or direct attack made against petitioners
title but merely a petition for amendment or correction of the true
area covered by petitioners title.
_______________
6 Id., at pp. 79-80.
46
6
The Issue
The primary issue in this case is whether the complaint for
amendment of OCT No. P-8599, which seeks the reconveyance of
the disputed property, has already prescribed.
The Ruling of the Court
We find the petition without merit.
Respondents Possession of Land Since 1940 is Uncontroverted
The DENR and the trial courts finding that respondent and his
predecessors-in-interest have been in possession of Lot No. 452,
including the disputed 790 sq.m. portion, in an open, continuous,
peaceful, and adverse manner since 1940 is uncontroverted. To
defeat the claim of respondent, petitioners relied primarily on their
certificate of title which includes the disputed 790 sq.m. portion.
The Special Investigator from the DENR who conducted the
second investigation in 1996 testified that the disputed 790 sq.m.
portion is part of respondents property. The Geodetic Engineer
who assisted the investigation and conducted a survey of the
adjoining properties of the parties also found that the disputed 790
sq.m. portion rightfully belongs to respondent. Respondent offered
as evidence the sketch plan7 of the adjoining properties prepared by
the Geodetic Engineer, which clearly shows that the disputed 790
sq.m. portion is within the property of respondent. Taking into
consideration the seven fifty-year old coconut trees planted in a
straight line which form a common natural boundary between the
lots of the parties, the sketch plan clearly shows that the disputed
790 sq.m. portion is within the side of respondents property, and
is part of Lot No. 452. Another DENR employee who assisted in
the ocular inspection of the properties testified
_______________
7 Records, p. 70.
47
VOL. 594, JULY 27, 2009 47
that the petitioners and respondent admitted the existence of the
common boundary between their lots.8
Prescriptive Period Not Applicable
Petitioners contend that respondents action is barred by
prescription. Petitioners maintain that their OCT No. P-8599,
which was issued in 1968 and registered in the Register of Deeds
in 1974, is already indefeasible. They allege that when respondent
filed his protest on 26 December 1991, or 17 years after the
registration of OCT No. P-8599, it was already too late to question
the validity of petitioners certificate of title.
Indeed, respondent filed his claim to a portion of Lot No. 450
through a protest before the DENR only on 26 December 1991
because it was only in that year that respondent learned that a
portion of his property was inadvertently included in petitioners
certificate of title. Petitioners themselves came to know about the
exact boundaries of Lot No. 450 and the inclusion of the disputed
portion in their certificate of title only in 1991 when they
subdivided said land for partition among the heirs.9 Thus, when
petitioners started to take possession of the disputed 790 sq.m.
portion in 1991, respondent filed a protest before the DENR on 26
December 1991 to claim the disputed portion for which respondent
and his predecessors-in-interest have been in possession since
1940. On 9 October 1998, respondent filed a complaint against
petitioners for Amendment of Original Certificate of Title,
Ejectment, and Damages. The action primarily seeks the
reconveyance of the disputed 790 sq.m. portion of land through the
amendment of OCT No. P-8599.
An action for reconveyance of property respects the decree of
registration as incontrovertible and merely seeks the transfer of the
property wrongfully or erroneously registered in
_______________
8 Id., at p. 155; TSN, 30 September 1999, p. 6.
9 Rollo, p. 54. See Decision dated 10 October 1996 of the Regional Executive
Director of the DENR, Region X, p. 2.
48
8
anothers name to its rightful owner or to one who claims to have a
better right.10
An action for reconveyance of property based on an implied or
constructive trust is the proper remedy of an aggrieved party whose
property had been erroneously registered in anothers name.11 The
prescriptive period for the reconveyance of registered property is
ten years, reckoned from the date of the issuance of the certificate
of title. However, the ten-year prescriptive period for an action for
reconveyance is not applicable where the complainant is in
possession of the land to be reconveyed and the registered owner
was never in possession of the disputed property.12 In such a case,
the action for reconveyance filed by the complainant who is in
possession of the disputed property would be in the nature of an
action to quiet title which is imprescriptible.13
This case is similar to the case of Caragay-Layno v. CA,14 which
involves a counterclaim for reconveyance of property which was
filed by petitioner Juliana Caragay-Layno on the ground that a
portion of her property had been fraudulently or mistakenly
included in the certificate of title issued for the adjoining lot of the
respondent. The Court held:
_______________
10 Heirs of Valeriano S. Concha, Sr. v. Lumocso, G.R. No. 158121, 12 December
2007, 540 SCRA 1; Santos v. Lumbao, G.R. No. 169129, 28 March 2007, 519
SCRA 408.
11 Llenares v. Court of Appeals, G.R. No. 98709, 13 May 1993, 222 SCRA 10.
12 Rementizo v. Heirs of Pelagia Vda. de Madarieta, G.R. No. 170318, 15 January
2009, 576 SCRA 109.
13 Santos v. Heirs of Dominga Lustre, G.R. No. 151016, 6 August 2008, 561
SCRA 120; Heirs of Marcela Salonga Bituin v. Caoleng, Sr., G.R. No. 157567, 10
August 2007, 529 SCRA 747; Heirs of Salvador Hermosilla v. Remoquillo, G.R.
No. 167320, 30 January 2007, 513 SCRA 403; Coronel v. Intermediate Appellate
Court, 239 Phil. 264; 155 SCRA 270 (1987).
14 218 Phil. 685; 133 SCRA 718 (1984).
49
VOL. 594, JULY 27, 2009 49
Prescription cannot be invoked against JULIANA for the reason that as

lawful possessor and owner of the Disputed Portion, her cause of action for
reconveyance which, in effect, seeks to quiet title to the property, falls
within settled jurisprudence that an action to quiet title to property in ones
possession is imprescriptible. Her undisturbed possession over a period of
fifty-two (52) years gave her a continuing right to seek the aid of a Court of
equity to determine the nature of the adverse claim of a third party and the
effect on her own title.
Besides, under the circumstances, JULIANAs right to quiet title, to seek
reconveyance, and to annul OCT No. 63 accrued only in 1966 when she was
made aware of a claim adverse to her own. It was only then that the statutory
period of prescription may be said to have commenced to run against her x x
x.15
In this case, respondent who has been in possession of the disputed
property since 1940, by himself and through his predecessors-in-
interest, is not barred from bringing the action for reconveyance,
which in effect seeks to quiet title to the property, against
petitioners whose claim to the property is based merely on their
certificate of title which mistakenly included respondents
property. Respondent has a better right to the disputed property
since he and his predecessors-in-interest had long been in
possession of the property in the concept of owner. Petitioners only
took possession of the disputed property sometime in 1991 when
they realized upon partition of Lot No. 450 that the certificate of
title issued to them included the disputed property. Reconveyance
is just and proper to end the intolerable anomaly that the patentees
should have a Torrens title for the land which has never been in
their possession and which have been possessed by another person
in the concept of owner.16
G.R. No. 180357. August 4, 2009.*
PIONEER INSURANCE AND SURETY CORPORATION,
petitioner, vs. HEIRS OF VICENTE CORONADO, MAURA
CORONADO, SIMEON CORONADO, JULIAN
CORONADO and CRUZ B. CARBON, respondents.
Land Titles; Reconveyance; Quieting of Title; Prescription;
Jurisprudence abounds in holding that, if a person claiming to be the owner
is in actual possession of the property, the right to seek reconveyance, which
in effect seeks to quiet title to the property, does not prescribe.We
confront the issue of whether the action has prescribed, considering that
several years have already passed since TCT No. N-19781 was issued, and
petitioners title has already be-
_______________
* THIRD DIVISION.
264
Pioneer Insurance and Surety Corporation vs. Heirs of Vicente Coronado
come indefeasible and incontrovertible. The contention apparently lacks
merit. The records reveal that the respondents have been in possession of the
subject property since 1938. Jurisprudence abounds in holding that, if a
person claiming to be the owner is in actual possession of the property, the
right to seek reconveyance, which in effect seeks to quiet title to the
property, does not prescribe.
Same; The fact that the property cannot be plotted on a certain area
based on the technical description indicated in the certificate of title does
not foreclose the possibility that there is simply an error in the technical
description, or that it is only deficientunless the exact location of the
property described in the certificate of title is determined, we cannot safely
and definitively conclude that it is not located at a certain place.The
verification reports show that the geodetic engineers, except for Engr.
Mercado, concluded that the technical description in TCT No. N-19781
could not be plotted on the area where the subject property is located, on the
ground that no reference points or corner monuments had been recovered
from the purported adjoining properties. However, the fact that the property
cannot be plotted on a certain area based on the technical description
indicated in the certificate of title does not foreclose the possibility that there
is simply an error in the technical description, or that it is only deficient.
Unless the exact location of the property described in the certificate of title is
determined, we cannot safely and definitively conclude that it is not located
at a certain place.
Same; Torrens System; The real purpose of the Torrens System of land
registration is to quiet title to land and put stop forever to any question as to
the legality of the title.A certificate of title serves as evidence of an
indefeasible and incontrovertible title to the property in favor of the person
whose name appears therein. The real purpose of the Torrens System of land
registration is to quiet title to land and put stop forever to any question as to
the legality of the title.
Same; A certificate of title is conclusive evidence not only of ownership
but also the location of the property.It is true that both trial and appellate
courts actually maintained the indefeasibility of the certificate of title and
desisted from annulling or modifying the same. But by declaring that the
property is not located in Antipolo City, the location stated in the certificate
of title, they, in effect, modified the same to the prejudice of the petitioner.
Worse, they did so based on incomplete information. Notably, in Odsigue v.
Court of
265
VOL. 595, AUGUST 4, 2009 265
Appeals, 233 SCRA 626 (1994), this Court, indeed, held that a certificate of
title is conclusive evidence not only of ownership but also the location of the
property.
PETITION for review on certiorari of the decision and resolution
of the Court of Appeals.
Medialdea, Ata, Bello & Guevarra for petitioner.
Arlene Carbon for respondents.
NACHURA, J.:
This is a petition for review on certiorari of the Court of
Appeals (CA) Decision1 dated June 27, 2007 and Resolution dated
October 17, 2007. The petition stems from a complaint seeking the
annulment of petitioners certificate of title, which was dismissed
for lack of cause of action on the ground that the said title covered
a parcel of land different from the one being claimed by the
plaintiffs (herein respondents). But petitioner, dissatisfied by the
pronouncement of the trial court, filed this petition for review,
praying that the complaint be dismissed simply for utter lack of
merit, and the Court declare its property to be located in the exact
place described in its certificate of title.
The facts of the case
Respondents Vicente, Maura, Simeon and Julian, all surnamed
Coronado, are the legal heirs of Doroteo Garcia. The Coronados,
together with Cruz B. Carbon, filed with the Regional Trial Court
(RTC), Antipolo, Rizal, a complaint for Annulment of Title
and/or Reconveyance against petitioner, Pioneer Insurance and
Surety Corporation, alleging that (i)
_______________
1 Penned by Associate Justice Fernanda Lampas-Peralta with Associate Justices
Edgardo P. Cruz (retired) and Normandie B. Pizarro, concurring; Rollo, pp. 48-63.
266
6
Pioneer Insurance and Surety Corporation vs. Heirs of Vicente
Coronado
Doroteo Garcia owned a parcel of land with an area of 23 hectares,
a portion of which is located at Tugtugin, Barangay de la Paz,
Antipolo City, while the other portion is located at Pinagbarilan,
Barangay dela Paz, Antipolo City; (ii) the entire parcel of land was
declared for taxation purposes in 1906 in the name of Doroteo
Garcia under Tax Declaration No. 16495 (now Tax Declaration
No. 03-6799-SJ387); (iii) Doroteo Garcia had been in possession
of the land since Spanish time and, upon his death, his heirs,
respondents Coronados, maintained possession of the land until the
present; (iv) on December 29, 1970, respondents Coronados,
together with Cruz B. Carbon who was given a portion of the
parcel of land in consideration of legal services he rendered,
executed a Deed of Extrajudicial Partition of Real Estate
partitioning the property among themselves; (v) respondents later
learned that a portion of the land was registered in the name of a
certain Gaudencio T. Bocobo under Original Certificate of Title
(OCT) No. 501 based on Free Patent No. 291532; (vi) Bocobo
mortgaged the land covered by OCT No. 501 as security for a
P500,000.00 loan from petitioner; and (vii) for failure of Bocobo to
pay the loan, the mortgage was foreclosed and Transfer Certificate
of Title (TCT) No. 19781 was issued in the name of petitioner.
Respondents prayed, among others, that TCT No. 19781 be
declared null and void and the subject property be reconveyed to
them.2
In its Answer, petitioner averred that (i) in 1977, it issued a
performance bond in favor of Gaudencio T. Bocobo which was
secured by a real estate mortgage over a parcel of land covered by
Free Patent No. 291532 with an area of 171,419 square meters
located in Antipolo, Rizal; (ii) before petitioner conformed to the
real estate mortgage, it verified and examined Bocobos title,
which it found to be free from any suspicion; (iii) when Bocobo
failed to pay his obligations, petitioner foreclosed the mortgage on
the property and TCT No. 19781
_______________
2 Rollo, pp. 72-75.
267
VOL. 595, AUGUST 4, 2009 267
Coronado
was issued in its favor; and (iv) from 1977 up to the time of
petitioners receipt of the summons in the present complaint, no
other person had claimed interest over the property.3
On November 20, 1996, the trial court directed respondents
counsel to submit a copy of the report of the relocation survey,
which the parties agreed to be conducted on the subject property.4
Respondents filed an Urgent Motion for Investigation Survey,5
praying that the court issue an order directing the Lands
Management Bureau (LMB) to conduct the required investigation
survey. Consequently, the trial court issued an Order6 dated March
25, 1997 directing the LMB to conduct a survey of the subject
property and submit a report indicating the boundaries and the
exact location of the property.
Engr. Romulo G. Unciano, Chief of Party, Antipolo Cadastre, was
tasked to conduct the survey. He used the following as references:
1. (LRC) Psd-221879 (TCT No. 478244) equivalent to Lot 1, Psu-159753 in the
name of Alejandrina A. Tuzon;
2. Lot 2, Psu-159753, as amended, in the name of Damaso Inocencio and
Doroteo Garcia;
3. Land Registration Decree No. 133611 covering Lot 1 & Lot 2, Psu-159755 in
the name of Maximino Serranillo;
4. Psu-153144Gaudencio T. Bocobo;
5. Psu-153145Marcos Olan;
6. Psu-153146Rodolfo Bautista;
7. (LRC) Psd-257194 (OCT No. 852); and
8. TCT No. N-19781 registered in the name of Pioneer Insurance and Surety
Corp.7
_______________
3 Records, pp. 25-27.
4 Id., at p. 66.
5 Id., at p. 75.
6 Id., at p. 77.
7 Records, p. 91.
268
8
Coronado
The subject property being claimed by the respondents is that
referred to as Lot 2 in Plan Psu-159753, while Lot 1 of the same
survey plan [presently covered by Plan (LRC) Psd-221879] is in
the name of Alejandrina A. Tuzon. Adjoining the subject property
in the southeast are Lots 1 and 2 of Plan Psu-159755 in the name
of Maximino Serranillo, et al., and in the southwest is the property
of Julio Gatlabayan, covered by Plan F-53733 [(LRC) Psd-257194]
and registered under OCT No. 852.8
On the other hand, Plan Psu-153144, in the name of Gaudencio T.
Bocobo, covers the property as described in petitioners title, TCT
No. N-19781. Plans Psu-153145 and Psu-153146 are survey plans
covering the alleged adjoining properties in the names of Marcos
Olan and Rodolfo Bautista, respectively.9
In a Report on Relocation and Verification Survey10 (hereinafter
referred to as the Unciano Report) dated August 6, 1997, Engr.
Unciano concluded that the property, described in Psu-153144 and
TCT No. N-19781, is situated in Sitio Pinagbarilan, Barrio (Bo.)
Malanday, San Mateo, Rizal and not in the vicinity of the subject
property (Lot 2, Psu-159753), which is in Sitio Manungbian, Bo.
San Juan, Antipolo.
After Engr. Unciano answered some clarificatory questions about
the report, the parties agreed to constitute a commission of three
geodetic engineers to conduct another ground verification of the
property. Accordingly, the trial court issued an Order dated
September 17, 1997, directing that such a commission be
constituted to conduct a final ground verification survey, and
appointing as its Chairman, Engr. Robert Pangyarihan, who was
Chief of the Survey Division, Land Management Section,
Department of Environment and Natu-
_______________
8 Id., at pp. 93-94.
9 Id., at p. 94.
10 Id., at pp. 91-94.
269
VOL. 595, AUGUST 4, 2009 269
Coronado
ral Resources. The trial court likewise appointed Engr. Ponciano
11
M. Miranda, representing respondents, and Engr. Rosario B.

Mercado, representing the petitioner, as the other two geodetic
engineers to comprise the commission.
In addition to the references used by Engr. Unciano, the
commission used the following materials:
1. Joint Affidavit of Rodolfo Bautista and Marcos Olan, claimants of Psu-153146
and Psu-153145, respectively;
2. Plan F-53733 in the name of Julio Gatlabayan;
3. Lot 10257, Cad.29-Ext., Antipolo Cadastre;
4. Municipal Index Map of San Mateo, Rizal; and
5. Certification of location of Sapang Buaya by Brgy. Captain Simeon San Jose.12
In a Report on Verification Survey13 (hereinafter referred to as the
Pangyarihan Report) dated November 28, 1997 signed
by Engr. Pangyarihan and Engr. Miranda, it likewise
concluded that the property described in the
petitioners title is not located in the place where the
subject property is located.
Engr. Rosario B. Mercado did not agree with the findings of his
colleagues and opted to submit a separate survey
report.14 Using the tie lines indicated in the title, he
concluded that a portion of the subject property
overlapped the property described in petitioners
certificate of title.
On January 29, 2002, the RTC adopted the findings of the majority
of the commission and rendered the following
judgment:
WHEREFORE, judgment is hereby rendered recognizing Julian Coronado,
Vicente Coronado, Simeon Coronado and Maura
_______________
11 Id., at p. 146.
12 Id., at p. 162.
13 Id., at pp. 162-166.
14 Id., at pp. 188-189.
270
Coronado to be the legal heirs of Doroteo Garcia and confirming their
ownership of the parcel of land covered by PSU 159753 and Tax
Declaration marked as Exhibit S containing an area of 11.65 hectares.
On the other hand, the Court finds no necessity to declare null and void TCT
No. N-19781 registered in the name of the defendant but the court makes a
finding and so holds that the parcel of land described therein is not the same
parcel of land claimed and owned by the Coronados.
SO ORDERED.15
On June 27, 2007, the CA affirmed the RTC Decision.16 The CA
likewise denied the petitioners motion for reconsideration for lack
of merit in the Resolution dated October 17, 2007.17
The issues raised in the petition
Petitioner raises the following issues:
THE COURT OF APPEALS GRAVELY ERRED IN
AFFIRMING THE TRIAL COURTS DECISION.
5.1 The lower court committed grave abuse of discretion in not dismissing
respondents complaint and disregarding the indefeasibility of
[petitioner]s Torrens title.
5.2 The lower court gravely erred in ruling that the [petitioners] property is not
located in Antipolo City, despite the clear indication of its location
on the face of the Torrens title.
5.3 The lower court erred in not ruling that respondents claim was barred by
prescription and laches.
5.4 The lower court erred in not awarding damages and attorneys fees to
[petitioner], despite the clear absence of a cause of action against
[petitioner].18
_______________
15 Rollo, p. 141.
16 Id., at p. 63.
17 Id., at p. 66.
18 Id., at p. 24.
271
VOL. 595, AUGUST 4, 2009 271
Coronado
The Courts ruling
Initially, we confront the issue of whether the action has
prescribed, considering that several years have already passed
since TCT No. N-19781 was issued, and petitioners title has
already become indefeasible and incontrovertible. The contention
apparently lacks merit. The records reveal that the respondents
have been in possession of the subject property since 1938.
Jurisprudence abounds in holding that, if a person claiming to be
the owner is in actual possession of the property, the right to seek
reconveyance, which in effect seeks to quiet title to the property,
does not prescribe.19
On the merits, petitioner argues that the trial court and the CA
disregarded the indefeasibility of TCT No. N-19781 when it
declared that the property covered by such title is situated in
another place, and not where the subject property is located.
Petitioner maintains that such pronouncement materially impaired
the technical description of the property covered by its title, in
clear derogation of the indefeasibility of the certificate of title.
According to the petitioner, the technical description in the
certificate of title and the statement therein that the location of the
property is in the Municipality of Antipolo are a conclusive and
unassailable determination of the location of the property that falls
within the mantle of protection afforded by a Torrens title.
Factual findings are accorded not only great respect but also
finality and are deemed binding upon the Court so long as they are
supported by substantial evidence.20 Sadly, this is not true in this
case. We find that the conclusion of the trial court, as affirmed by
the CA, that the property described in TCT No. N-19781 is not
located in the place where the subject property is located lacks
adequate basis.
_______________
19 David v. Malay, 376 Phil. 825, 837; 318 SCRA 711, 721-722 (1999).
20 Skippers United Pacific, Inc. v. National Labor Relations Commission, G.R.
No. 148893, July 12, 2006, 494 SCRA 661, 667.
272
2
Coronado
Both the trial and appellate courts based their conclusions on the
verification surveys finding that the property covered by the said
title is located in another place. We note, however, that the surveys
were conducted on the subject property only. Other than an ocular
inspection, no survey was ever conducted on the area where the
property covered by TCT No. N-19781 is allegedly located.
Neither was there any effort to plot the tie lines indicated in its
technical description. Consequently, the exact location of the
property covered by the said certificate of title has not been
established.
The verification reports show that the geodetic engineers, except
for Engr. Mercado, concluded that the technical description in TCT
No. N-19781 could not be plotted on the area where the subject
property is located, on the ground that no reference points or
corner monuments had been recovered from the purported
adjoining properties. However, the fact that the property cannot be
plotted on a certain area based on the technical description
indicated in the certificate of title does not foreclose the possibility
that there is simply an error in the technical description, or that it is
only deficient. Unless the exact location of the property described
in the certificate of title is determined, we cannot safely and
definitively conclude that it is not located at a certain place.
Indubitably, a certificate of title serves as evidence of an
indefeasible and incontrovertible title to the property in favor of
the person whose name appears therein. The real purpose of the
Torrens System of land registration is to quiet title to land and put
stop forever to any question as to the legality of the title.21
It is true that both trial and appellate courts actually maintained the
indefeasibility of the certificate of title and desisted from annulling
or modifying the same. But by declaring that the property is not
located in Antipolo City, the loca-
_______________
21 Heirs of Brusas v. Court of Appeals, 372 Phil. 47, 54; 313 SCRA 176, 183
(1999).
273
VOL. 595, AUGUST 4, 2009 273
Coronado
tion stated in the certificate of title, they, in effect, modified the
same to the prejudice of the petitioner. Worse, they did so based on
incomplete information. Notably, in Odsigue v. Court of Appeals,22
this Court, indeed, held that a certificate of title is conclusive
evidence not only of ownership but also the location of the
property.
For these reasons, we remand the case to the trial court for the
determination of the exact location of the petitioners property.
WHEREFORE, premises considered, the Court of Appeals
Decision dated June 27, 2007 and Resolution dated October 17,
2007 are SET ASIDE. The case is REMANDED to the Regional
Trial Court of Antipolo, Rizal, for further proceedings.
SO ORDERED.
Ynares-Santiago (Chairperson), Carpio,** Chico-Nazario and
Velasco, Jr., JJ., concur.
Judgment and resolution set aside. Case remanded to Regional

Trial Court of Antipolo, Rizal.
Note.The Torrens system was adopted in this country

because it was believed to be the most effective measure to
guarantee the integrity of land titles and to protect their
indefeasibility once the claim of ownership is established and
recognized. (Tan vs. Philippine Banking Corp., 355 SCRA 292
[2001])
o0o
CO- OWNERSHIP
SUPREME COURT REPORTS ANNOTATED
Oesmer vs. Paraiso Development Corporation
G.R. No. 157493. February 5, 2007. *
RIZALINO, substituted by his heirs, JOSEFINA, ROLANDO

and FERNANDO, ERNESTO, LEONORA, BIBIANO, JR.,
LIBRADO and ENRIQUETA, all surnamed OESMER,
petitioners, vs. PARAISO DEVELOPMENT
CORPORATION, respondent.
Contracts; Sales; Co-Ownership; Agency; Where the co-owners affixed their
signatures on the Contract to Sell, they were no longer selling their shares
through an agent but, rather, they were selling the same directly and in their
own righta written authority is no longer necessary to empower an
agent.The law itself explicitly requires a written authority before an agent
can sell an immovable. The conferment of such an authority should be in
writing, in as clear and precise terms as possible. It is worth noting that
petitioners signatures are found in the Contract to Sell. The Contract is
absolutely silent on the establishment of any principal-agent relationship
between the five petitioners and their brother and co-petitioner Ernesto as to
the sale of the subject parcels of land. Thus, the Contract to Sell, although
signed on the margin by the five petitioners, is not sufficient to confer
authority on petitioner Ernesto to act as their agent in selling their shares in
the properties in question. However, despite petitioner Ernestos lack of
written authority from the five petitioners to sell their shares in the subject
parcels of land, the supposed Contract to Sell remains valid and binding
upon the latter. As can be clearly gleaned from the contract itself, it is not
only petitioner Ernesto who signed the said Contract to Sell; the other five
petitioners also personally affixed their signatures thereon. Therefore, a
written authority is no longer necessary in order to sell their shares in the
subject parcels of land because, by affixing their signatures on the Contract
to Sell, they were not selling their shares through an agent but, rather, they
were selling the same directly and in their own right.
Same; Same; Same; Contracts are perfected by mere consent, upon the
acceptance by the offeree of the offer made by the offeror, which acceptance
may be express or implied.It is well-settled that
_______________
* THIRD DIVISION.
229
VOL. 514, FEBRUARY 5, 2007 229
contracts are perfected by mere consent, upon the acceptance by the offeree
of the offer made by the offeror. 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. To produce a contract, the acceptance must
not qualify the terms of the offer. However, the acceptance may be express
or implied. For a contract to arise, the acceptance must be made known to
the offeror. Accordingly, the acceptance can be withdrawn or revoked before
it is made known to the offeror. In the case at bar, the Contract to Sell was
perfected when the petitioners consented to the sale to the respondent of
their shares in the subject parcels of land by affixing their signatures on the
said contract. Such signatures show their acceptance of what has been
stipulated in the Contract to Sell and such acceptance was made known to
respondent corporation when the duplicate copy of the Contract to Sell was
returned to the latter bearing petitioners signatures.
Same; Same; Same; Interpretation of Contracts; It is a cardinal rule in the
interpretation of contracts that if the terms of a contract are clear and leave
no doubt upon the intention of the contracting parties, the literal meaning of
its stipulation shall control.We also cannot sustain the allegation of the
petitioners that assuming the signatures indicate consent, such consent was
merely conditional, and that, the effectivity of the alleged Contract to Sell
was subject to the suspensive condition that the sale be approved by all the
coowners. The Contract to Sell is clear enough. It is a cardinal rule in the
interpretation of contracts that if the terms of a contract are clear and leave
no doubt upon the intention of the contracting parties, the literal meaning of
its stipulation shall control. The terms of the Contract to Sell made no
mention of the condition that before it can become valid and binding, a
unanimous consent of all the heirs is necessary. Thus, when the language of
the contract is explicit, as in the present case, leaving no doubt as to the
intention of the parties thereto, the literal meaning of its stipulation is
controlling.
Same; Same; Same; The co-owners, being owners of their respective
undivided shares in the subject properties, can dispose of their shares even
without the consent of all the co-heirs.The petitioners, being owners of
their respective undivided shares in the subject properties, can dispose of
their shares even without the
230
consent of all the co-heirs. Article 493 of the Civil Code expressly provides:
Article 493. Each co-owner shall have the full ownership of his part and of
the fruits and benefits pertaining thereto, and he may therefore alienate,
assign or mortgage it, and even substitute another person in its enjoyment,
except when personal rights are involved. But the effect of the alienation or
the mortgage, with respect to the co-owners, shall be limited to the portion
which may be allotted to him in the division upon the termination of the
coownership. [Emphases supplied.] Consequently, even without the consent
of the two co-heirs, Adolfo and Jesus, the Contract to Sell is still valid and
binding with respect to the 6/8 proportionate shares of the petitioners, as
properly held by the appellate court.
Same; Same; Same; A contract to sell is not void merely because it does not
bear the signature of the vendee.The Contract to Sell is not void merely
because it does not bear the signature of the respondent corporation.
Respondent corporations consent to be bound by the terms of the contract is
shown in the uncontroverted facts which established that there was partial
performance by respondent of its obligation in the said Contract to Sell when
it tendered the amount of P100,000.00 to form part of the purchase price,
which was accepted and acknowledged expressly by petitioners. Therefore,
by force of law, respondent is required to complete the payment to enforce
the terms of the contract. Accordingly, despite the absence of respondents
signature in the Contract to Sell, the former cannot evade its obligation to
pay the balance of the purchase price.
Interpretation of Contracts; Words and Phrases; Earnest Money and
Option Money, Distinguished; In the interpretation of contracts, the
ascertainment of the intention of the contracting parties is to be discharged
by looking to the words they used to project that intention in their contract,
all the words, not just a particular word or two, and words in context, not
words standing alone.As a final point, the Contract to Sell entered into by
the parties is not a unilateral promise to sell merely because it used the word
option money when it referred to the amount of P100,000.00, which also
form part of the purchase price. Settled is the rule that in the interpretation of
contracts, the ascertainment of the intention of the contracting parties is to be
discharged by looking to the words they used to project that intention in their
contract, all the words, not just a particular word or two, and words in
context, not words standing alone. In
231
VOL. 514, FEBRUARY 5, 2007 231
the instant case, the consideration of P100,000.00 paid by respondent to
petitioners was referred to as option money. However, a careful
examination of the words used in the contract indicates that the money is not
option money but earnest money. Earnest money and option money are
not the same but distinguished thus: (a) earnest money is part of the purchase
price, while option money is the money given as a distinct consideration for
an option contract; (b) earnest money is given only where there is already a
sale, while option money applies to a sale not yet perfected; and, (c) when
earnest money is given, the buyer is bound to pay the balance, while when
the would-be buyer gives option money, he is not required to buy, but may
even forfeit it depending on the terms of the option.
Dick B. Perez for petitioners.
Simeon C. Sato for respondent.
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on Certiorari under Rule
45 of the 1997 Revised Rules of Civil Procedure seeking to reverse
and set aside the Court of Appeals Decision dated 26 April 2002
1
in CA-G.R. CV No. 53130 entitled, Rizalino, Ernesto, Leonora,

Bibiano, Jr., Librado, Enriqueta, Adolfo, and Jesus, all surnamed
Oesmer vs. Paraiso Development Corporation, as modified by its
Resolution dated 4 March 2003, declaring the Contract to Sell
2
valid and binding with respect to the undivided proportionate

shares of the six signatories of the said document, herein
petitioners, namely: Ernesto, Enriqueta, Librado, Rizalino,
Bibiano, Jr., and Leon-
_______________
1 Penned by Associate Justice Andres B. Reyes, Jr. with Associate Justices
Conrado M. Vasquez, Jr. and Mario L. Guaria III, concurring, Rollo, pp. 31-44.
2 Id., at pp. 46-49.
232
2
ora (all surnamed Oesmer); and ordering them to execute the Deed
of Absolute Sale concerning their 6/8 share over the subject parcels
of land in favor of herein respondent Paraiso Development
Corporation, and to pay the latter the attorneys fees plus costs of
the suit. The assailed Decision, as modified, likewise ordered the
respondent to tender payment to the petitioners in the amount of
P3,216,560.00 representing the balance of the purchase price of the
subject parcels of land.
The facts of the case are as follows:
Petitioners Rizalino, Ernesto, Leonora, Bibiano, Jr., Librado, and
Enriqueta, all surnamed Oesmer, together with Adolfo Oesmer
(Adolfo) and Jesus Oesmer (Jesus), are brothers and sisters, and
the co-owners of undivided shares of two parcels of agricultural
and tenanted land situated in Barangay Ulong Tubig, Carmona,
Cavite, identified as Lot 720 with an area of 40,507 square meters
(sq. m.) and Lot 834 containing an area of 14,769 sq. m., or a total
land area of 55,276 sq. m. Both lots are unregistered and originally
owned by their parents, Bibiano Oesmer and Encarnacion
Durumpili, who declared the lots for taxation purposes under Tax
Declaration No. 3438 (cancelled by I.D. No. 6064-A) for Lot 720
3
and Tax Declaration No. 3437 (cancelled by I.D. No. 5629) for
4
Lot 834. When the spouses Oesmer died, petitioners, together with
Adolfo and Jesus, acquired the lots as heirs of the former by right
of succession.
Respondent Paraiso Development Corporation is known to be
engaged in the real estate business.
Sometime in March 1989, Rogelio Paular, a resident and former
Municipal Secretary of Carmona, Cavite, brought along petitioner
Ernesto to meet with a certain Sotero Lee, President of respondent
Paraiso Development Corporation, at Otani Hotel in Manila. The
said meeting was for the purpose
_______________
3 Rollo, p. 58.
4 Id., at p. 59.
233
VOL. 514, FEBRUARY 5, 2007 233
of brokering the sale of petitioners properties to respondent
corporation.
Pursuant to the said meeting, a Contract to Sell was drafted by the
5
Executive Assistant of Sotero Lee, Inocencia Almo. On 1 April

1989, petitioners Ernesto and Enriqueta signed the aforesaid
Contract to Sell. A check in the amount of P100,000.00, payable to
Ernesto, was given as option money. Sometime thereafter,
Rizalino, Leonora, Bibiano, Jr., and Librado also signed the said
Contract to Sell. However, two of the brothers, Adolfo and Jesus,
did not sign the document.
On 5 April 1989, a duplicate copy of the instrument was returned
to respondent corporation. On 21 April 1989, respondent brought
the same to a notary public for notarization.
In a letter dated 1 November 1989, addressed to respondent
6
corporation, petitioners informed the former of their intention to

rescind the Contract to Sell and to return the amount of
P100,000.00 given by respondent as option money.
Respondent did not respond to the aforesaid letter. On 30 May
1991, herein petitioners, together with Adolfo and Jesus, filed a
Complaint for Declaration of Nullity or for Annulment of Option
7
Agreement or Contract to Sell with Damages before the Regional

Trial Court (RTC) of Bacoor, Cavite. The said case was docketed
as Civil Case No. BCV-91-49.
During trial, petitioner Rizalino died. Upon motion of petitioners,
the trial court issued an Order, dated 16 September 1992, to the
8
effect that the deceased petitioner be substituted by his surviving

spouse, Josefina O. Oesmer, and his children, Rolando O. Oesmer
and Fernando O. Oesmer. However, the name of Rizalino was
retained in the title of the case both in the RTC and the Court of
Appeals.
_______________
5 Id., at p. 235.
6 Records, p. 44.
7 Rollo, pp. 53-57.
8 Id., at p. 68.
234
4
After trial on the merits, the lower court rendered a Decision dated 9
27 March 1996 in favor of the respondent, the dispositive portion

of which reads:
WHEREFORE, premises considered, judgment is hereby rendered in favor
of herein [respondent] Paraiso Development Corporation. The assailed
Contract to Sell is valid and binding only to the undivided proportionate
share of the signatory of this document and recipient of the check, [herein
petitioner] co-owner Ernesto Durumpili Oesmer. The latter is hereby ordered
to execute the Contract of Absolute Sale concerning his 1/8 share over the
subject two parcels of land in favor of herein [respondent] corporation, and
to pay the latter the attorneys fees in the sum of Ten Thousand (P10,000.00)
Pesos plus costs of suit.
The counterclaim of [respondent] corporation is hereby Dismissed for lack
of merit.10
Unsatisfied, respondent appealed the said Decision before the

Court of Appeals. On 26 April 2002, the appellate court rendered a
Decision modifying the Decision of the court a quo by declaring
that the Contract to Sell is valid and binding with respect to the
undivided proportionate shares of the six signatories of the said
document, herein petitioners, namely: Ernesto, Enriqueta, Librado,
Rizalino, Bibiano, Jr., and Leonora (all surnamed Oesmer). The
decretal portion of the said Decision states that:
WHEREFORE, premises considered, the Decision of the court a quo is
hereby MODIFIED. Judgment is hereby rendered in favor of herein
[respondent] Paraiso Development Corporation. The assailed Contract to
Sell is valid and binding with respect to the undivided proportionate share of
the six (6) signatories of this document, [herein petitioners], namely,
Ernesto, Enriqueta, Librado, Rizalino, Bibiano, Jr., and Leonora (all
surnamed Oesmer). The said [petitioners] are hereby ordered to execute the
Deed of Absolute Sale concerning their 6/8 share over the subject two
parcels of land and in
_______________
9 Penned by Judge Edelwina C. Pastoral; Rollo, pp. 69-73.
10 Id., at p. 73.
235
VOL. 514, FEBRUARY 5, 2007 235
favor of herein [respondent] corporation, and to pay the latter the attorneys
fees in the sum of Ten Thousand Pesos (P10,000.00) plus costs of suit. 11
Aggrieved by the above-mentioned Decision, petitioners filed a

Motion for Reconsideration of the same on 2 July 2002. Acting on
petitioners Motion for Reconsideration, the Court of Appeals
issued a Resolution dated 4 March 2003, maintaining its Decision
dated 26 April 2002, with the modification that respondent tender
payment to petitioners in the amount of P3,216,560.00,
representing the balance of the purchase price of the subject
parcels of land. The dispositive portion of the said Resolution
reads:
WHEREFORE, premises considered, the assailed Decision is hereby
modified. Judgment is hereby rendered in favor of herein [respondent]
Paraiso Development Corporation. The assailed Contract to Sell is valid and
binding with respect to the undivided proportionate shares of the six (6)
signatories of this document, [herein petitioners], namely, Ernesto,
Enriqueta, Librado, Rizalino, Bibiano, Jr., and Leonora (all surnamed
Oesmer). The said [petitioners] are hereby ordered to execute the Deed of
Absolute Sale concerning their 6/8 share over the subject two parcels of land
in favor of herein [respondent] corporation, and to pay the latter attorneys
fees in the sum of Ten Thousand Pesos (P10,000.00) plus costs of suit.
Respondent is likewise ordered to tender payment to the above-named
[petitioners] in the amount of Three Million Two Hundred Sixteen Thousand
Five Hundred Sixty Pesos (P3,216,560.00) representing the balance of the
purchase price of the subject two parcels of land. 12
Hence, this Petition for Review on Certiorari.

Petitioners come before this Court arguing that the Court of
Appeals erred:
I. On a question of law in not holding that, the supposed Contract to Sell
(Exhibit D) is not binding upon petitioner Ernesto
_______________
11 Id., at pp. 43-44.
12 Id., at pp. 48-49.
236
6
Oesmers co-owners (herein petitioners Enriqueta, Librado, Rizalino,
Bibiano, Jr., and Leonora).
II. On a question of law in not holding that, the supposed Contract to Sell
(Exhibit D) is void altogether considering that respondent itself did not
sign it as to indicate its consent to be bound by its terms. Moreover, Exhibit
D is really a unilateral promise to sell without consideration distinct from
the price, and hence, void.
Petitioners assert that the signatures of five of them namely:
Enriqueta, Librado, Rizalino, Bibiano, Jr., and Leonora, on the
margins of the supposed Contract to Sell did not confer authority
on petitioner Ernesto as agent to sell their respective shares in the
questioned properties, and hence, for lack of written authority from
the above-named petitioners to sell their respective shares in the
subject parcels of land, the supposed Contract to Sell is void as to
them. Neither do their signatures signify their consent to directly
sell their shares in the questioned properties. Assuming that the
signatures indicate consent, such consent was merely conditional.
The effectivity of the alleged Contract to Sell was subject to a
suspensive condition, which is the approval of the sale by all the
coowners.
Petitioners also assert that the supposed Contract to Sell (Exhibit
D), contrary to the findings of the Court of Appeals, is not
couched in simple language.
They further claim that the supposed Contract to Sell does not bind
the respondent because the latter did not sign the said contract as to
indicate its consent to be bound by its terms. Furthermore, they
maintain that the supposed Contract to Sell is really a unilateral
promise to sell and the option money does not bind petitioners for
lack of cause or consideration distinct from the purchase price.
The Petition is bereft of merit.
It is true that the signatures of the five petitioners, namely:
Enriqueta, Librado, Rizalino, Bibiano, Jr., and Leonora, on the
Contract to Sell did not confer authority on petitioner Ernesto as
agent authorized to sell their respective
237
VOL. 514, FEBRUARY 5, 2007 237
shares in the questioned properties because of Article 1874 of the
Civil Code, which expressly provides that:
Art. 1874. When a sale of a piece of land or any interest therein is through
an agent, the authority of the latter shall be in writing; otherwise, the sale
shall be void.
The law itself explicitly requires a written authority before an
agent can sell an immovable. The conferment of such an authority
should be in writing, in as clear and precise terms as possible. It is
worth noting that petitioners signatures are found in the Contract
to Sell. The Contract is absolutely silent on the establishment of
any principal-agent relationship between the five petitioners and
their brother and co-petitioner Ernesto as to the sale of the subject
parcels of land. Thus, the Contract to Sell, although signed on the
margin by the five petitioners, is not sufficient to confer authority
on petitioner Ernesto to act as their agent in selling their shares in
the properties in question.
However, despite petitioner Ernestos lack of written authority
from the five petitioners to sell their shares in the subject parcels of
land, the supposed Contract to Sell remains valid and binding upon
the latter.
As can be clearly gleaned from the contract itself, it is not only
petitioner Ernesto who signed the said Contract to Sell; the other
five petitioners also personally affixed their signatures thereon.
Therefore, a written authority is no longer necessary in order to sell
their shares in the subject parcels of land because, by affixing their
signatures on the Contract to Sell, they were not selling their shares
through an agent but, rather, they were selling the same directly
and in their own right.
The Court also finds untenable the following arguments raised by
petitioners to the effect that the Contract to Sell is not binding upon
them, except to Ernesto, because: (1) the signatures of five of the
petitioners do not signify their consent to sell their shares in the
questioned properties since
238
8
petitioner Enriqueta merely signed as a witness to the said Contract
to Sell, and that the other petitioners, namely: Librado, Rizalino,
Leonora, and Bibiano, Jr., did not understand the importance and
consequences of their action because of their low degree of
education and the contents of the aforesaid contract were not read
nor explained to them; and (2) assuming that the signatures
indicate consent, such consent was merely conditional, thus, the
effectivity of the alleged Contract to Sell was subject to a
suspensive condition, which is the approval by all the co-owners of
the sale.
It is well-settled that contracts are perfected by mere consent, upon
the acceptance by the offeree of the offer made by the offeror.
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. To produce a contract, the
acceptance must not qualify the terms of the offer. However, the
acceptance may be express or implied. For a contract to arise, the
acceptance must be made known to the offeror. Accordingly, the
acceptance can be withdrawn or revoked before it is made known
to the offeror.
13
In the case at bar, the Contract to Sell was perfected when the
petitioners consented to the sale to the respondent of their shares in
the subject parcels of land by affixing their signatures on the said
contract. Such signatures show their acceptance of what has been
stipulated in the Contract to Sell and such acceptance was made
known to respondent corporation when the duplicate copy of the
Contract to Sell was returned to the latter bearing petitioners
signatures.
As to petitioner Enriquetas claim that she merely signed as a
witness to the said contract, the contract itself does not say so.
There was no single indication in the said contract that she signed
the same merely as a witness. The fact that
_______________
13 Jardine Davies, Inc. v. Court of Appeals, 389 Phil. 204, 212; 333 SCRA 684,
693 (2000).
239
VOL. 514, FEBRUARY 5, 2007 239
her signature appears on the right-hand margin of the Contract to
Sell is insignificant. The contract indisputably referred to the
Heirs of Bibiano and Encarnacion Oesmer, and since there is no
showing that Enriqueta signed the document in some other
capacity, it can be safely assumed that she did so as one of the
parties to the sale.
Emphasis should also be given to the fact that petitioners Ernesto
and Enriqueta concurrently signed the Contract to Sell. As the
Court of Appeals mentioned in its Decision, the records of the
14
case speak of the fact that petitioner Ernesto, together with

petitioner Enriqueta, met with the representatives of the respondent
in order to finalize the terms and conditions of the Contract to Sell.
Enriqueta affixed her signature on the said contract when the same
was drafted. She even admitted that she understood the
undertaking that she and petitioner Ernesto made in connection
with the contract. She likewise disclosed that pursuant to the terms
embodied in the Contract to Sell, she updated the payment of the
real property taxes and transferred the Tax Declarations of the
questioned properties in her name. Hence, it cannot be gainsaid
15
that she merely signed the Contract to Sell as a witness because she
did not only actively participate in the negotiation and execution of
the same, but her subsequent actions also reveal an attempt to
comply with the conditions in the said contract.
With respect to the other petitioners assertion that they did not
understand the importance and consequences of their action
because of their low degree of education and because the contents
of the aforesaid contract were not read nor explained to them, the
same cannot be sustained.
We only have to quote the pertinent portions of the Court of
Appeals Decision, clear and concise, to dispose of this issue. Thus,
_______________
14 Rollo, pp. 31-44.
15 TSN, 15 October 1991, pp. 13-14.
240
0
First, the Contract to Sell is couched in such a simple language which is
undoubtedly easy to read and understand. The terms of the Contract,
specifically the amount of P100,000.00 representing the option money paid
by [respondent] corporation, the purchase price of P60.00 per square meter
or the total amount of P3,316,560.00 and a brief description of the subject
properties are well-indicated thereon that any prudent and mature man
would have known the nature and extent of the transaction encapsulated in
the document that he was signing.
Second, the following circumstances, as testified by the witnesses and as
can be gleaned from the records of the case clearly indicate the [petitioners]
intention to be bound by the stipulations chronicled in the said Contract to
Sell.
As to [petitioner] Ernesto, there is no dispute as to his intention to effect
the alienation of the subject property as he in fact was the one who initiated
the negotiation process and culminated the same by affixing his signature on
the Contract to Sell and by taking receipt of the amount of P100,000.00
which formed part of the purchase price.
xxxx
As to [petitioner] Librado, the [appellate court] finds it preposterous that
he willingly affixed his signature on a document written in a language
(English) that he purportedly does not understand. He testified that the
document was just brought to him by an 18 year old niece named Baby and
he was told that the document was for a check to be paid to him. He readily
signed the Contract to Sell without consulting his other siblings. Thereafter,
he exerted no effort in communicating with his brothers and sisters regarding
the document which he had signed, did not inquire what the check was for
and did not thereafter ask for the check which is purportedly due to him as a
result of his signing the said Contract to Sell. (TSN, 28 September 1993, pp.
22-23)
The [appellate court] notes that Librado is a 43 year old family man
(TSN, 28 September 1993, p. 19). As such, he is expected to act with that
ordinary degree of care and prudence expected of a good father of a family.
His unwitting testimony is just divinely disbelieving.
The other [petitioners] (Rizalino, Leonora and Bibiano Jr.) are likewise
bound by the said Contract to Sell. The theory adopted by the [petitioners]
that because of their low degree of education, they
241
VOL. 514, FEBRUARY 5, 2007 241
did not understand the contents of the said Contract to Sell is devoid of
merit. The [appellate court] also notes that Adolfo (one of the coheirs who
did not sign) also possess the same degree of education as that of the signing
co-heirs (TSN, 15 October 1991, p. 19). He, however, is employed at the
Provincial Treasury Office at Trece Martirez, Cavite and has even
accompanied Rogelio Paular to the Assessors Office to locate certain
missing documents which were needed to transfer the titles of the subject
properties. (TSN, 28 January 1994, pp. 26 & 35) Similarly, the other co-
heirs [petitioners], like Adolfo, are far from ignorant, more so, illiterate that
they can be extricated from their obligations under the Contract to Sell
which they voluntarily and knowingly entered into with the [respondent]
corporation.
The Supreme Court in the case of Cecilia Mata v. Court of Appeals (207
SCRA 753 [1992]), citing the case of Tan Sua Sia v. Yu Baio Sontua (56
Phil. 711), instructively ruled as follows:
The Court does not accept the petitioners claim that she did not understand
the terms and conditions of the transactions because she only reached Grade
Three and was already 63 years of age when she signed the documents. She
was literate, to begin with, and her age did not make her senile or
incompetent. x x x.
At any rate, Metrobank had no obligation to explain the documents to the
petitioner as nowhere has it been proven that she is unable to read or that the
contracts were written in a language not known to her. It was her
responsibility to inform herself of the meaning and consequence of the
contracts she was signing and, if she found them difficult to comprehend, to
consult other persons, preferably lawyers, to explain them to her. After all,
the transactions involved not only a few hundred or thousand pesos but,
indeed, hundreds of thousands of pesos.
As the Court has held:
x x x The rule that one who signs a contract is presumed to know its
contents has been applied even to contracts of illiterate persons on the
ground that if such persons are unable to read, they are negligent if they fail
to have the contract read to them. If a person cannot read the instrument, it
is as much his duty to procure some reliable persons to read and explain it
to him, before he signs it, as it would be to read it before he signed it if he
were able to do and his failure to obtain a
242
2
reading and explanation of it is such gross negligence as will estop from
avoiding it on the ground that he was ignorant of its contents.16
That the petitioners really had the intention to dispose of their

shares in the subject parcels of land, irrespective of whether or not
all of the heirs consented to the said Contract to Sell, was unveiled
by Adolfos testimony as follows:
ATTY. GAMO: This alleged agreement between you and your
other brothers and sisters that unless
everybody will agree, the properties would not be sold, was
that agree-ment in writing?
WITNESS: No sir.
ATTY. GAMO: What you are saying is that when your brothers
and sisters except Jesus and you
did not sign that agreement which had been marked as
[Exhibit] D, your brothers and
sisters were grossly violating your agreem ent.
WITNESS: Yes, sir, they violated what we have agreed upon. 17
We also cannot sustain the allegation of the petitioners that

assuming the signatures indicate consent, such consent was merely
conditional, and that, the effectivity of the alleged Contract to Sell
was subject to the suspensive condition that the sale be approved
by all the co-owners. The Contract to Sell is clear enough. It is a
cardinal rule in the interpretation of contracts that if the terms of a
contract are clear and leave no doubt upon the intention of the
contracting parties, the literal meaning of its stipulation shall
control. The terms of the Contract to Sell made no mention of the
18
condition that before it can become valid and binding, a unanimous

consent of all the heirs is necessary. Thus, when the language of
the
_______________
16 Rollo, pp. 36-40.
17 TSN, 28 September 1993, pp. 17-18.
18 German Marine Agencies, Inc. v. National Labor Relations Commission, 403
Phil. 572, 588-589; 350 SCRA 629, 641 (2001).
243
VOL. 514, FEBRUARY 5, 2007 243
contract is explicit, as in the present case, leaving no doubt as to
the intention of the parties thereto, the literal meaning of its
stipulation is controlling.
In addition, the petitioners, being owners of their respective
undivided shares in the subject properties, can dispose of their
shares even without the consent of all the co-heirs. Article 493 of
the Civil Code expressly provides:
Article 493. Each co-owner shall have the full ownership of his part and of
the fruits and benefits pertaining thereto, and he may therefore alienate,
assign or mortgage it, and even substitute another person in its enjoyment,
except when personal rights are involved. But the effect of the alienation or
the mortgage, with respect to the co-owners, shall be limited to the portion
which may be allotted to him in the division upon the termination of the
coownership. [Emphases supplied.]
Consequently, even without the consent of the two co-heirs,
Adolfo and Jesus, the Contract to Sell is still valid and binding
with respect to the 6/8 proportionate shares of the petitioners, as
properly held by the appellate court.
Therefore, this Court finds no error in the findings of the Court of
Appeals that all the petitioners who were signatories in the
Contract to Sell are bound thereby.
The final arguments of petitioners state that the Contract to Sell is
void altogether considering that respondent itself did not sign it as
to indicate its consent to be bound by its terms; and moreover, the
Contract to Sell is really a unilateral promise to sell without
consideration distinct from the price, and hence, again, void. Said
arguments must necessarily fail.
The Contract to Sell is not void merely because it does not bear the
signature of the respondent corporation. Respondent corporations
consent to be bound by the terms of the contract is shown in the
uncontroverted facts which established that there was partial
performance by respondent of its obligation in the said Contract to
Sell when it tendered the amount of P100,000.00 to form part of
the purchase price, which was
244
4
accepted and acknowledged expressly by petitioners. Therefore, by
force of law, respondent is required to complete the payment to
enforce the terms of the contract. Accordingly, despite the absence
of respondents signature in the Contract to Sell, the former cannot
evade its obligation to pay the balance of the purchase price.
As a final point, the Contract to Sell entered into by the parties is
not a unilateral promise to sell merely because it used the word
option money when it referred to the amount of P100,000.00,
which also form part of the purchase price.
Settled is the rule that in the interpretation of contracts, the
ascertainment of the intention of the contracting parties is to be
discharged by looking to the words they used to project that
intention in their contract, all the words, not just a particular word
or two, and words in context, not words standing alone. 19
In the instant case, the consideration of P100,000.00 paid by

respondent to petitioners was referred to as option money.
However, a careful examination of the words used in the contract
indicates that the money is not option money but earnest money.
Earnest money and option money are not the same but
distinguished thus: (a) earnest money is part of the purchase price,
while option money is the money given as a distinct consideration
for an option contract; (b) earnest money is given only where there
is already a sale, while option money applies to a sale not yet
perfected; and, (c) when earnest money is given, the buyer is
bound to pay the balance, while when the would-be buyer gives
option money, he is not required to buy, but may even forfeit it
depending on the terms of the option. 20
The sum of P100,000.00 was part of the purchase price. Although

the same was denominated as option money, it is
_______________
19 Limson v. Court of Appeals, G.R. No. 135929, 20 April 2001, 357 SCRA 209,
216.
20 Id., at p. 217.
245
VOL. 514, FEBRUARY 5, 2007 245
actually in the nature of earnest money or down payment when
considered with the other terms of the contract. Doubtless, the
agreement is not a mere unilateral promise to sell, but, indeed, it is
a Contract to Sell as both the trial court and the appellate court
declared in their Decisions.
WHEREFORE, premises considered, the Petition is DENIED,
and the Decision and Resolution of the Court of Appeals dated 26
April 2002 and 4 March 2003, respectively, are AFFIRMED, thus,
(a) the Contract to Sell is DECLARED valid and binding with
respect to the undivided proportionate shares in the subject parcels
of land of the six signatories of the said document, herein
petitioners Ernesto, Enriqueta, Librado, Rizalino, Bibiano, Jr., and
Leonora (all surnamed Oesmer); (b) respondent is ORDERED to
tender payment to petitioners in the amount of P3,216,560.00
representing the balance of the purchase price for the latters shares
in the subject parcels of land; and (c) petitioners are further
ORDERED to execute in favor of respondent the Deed of Absolute
Sale covering their shares in the subject parcels of land after
receipt of the balance of the purchase price, and to pay respondent
attorneys fees plus costs of the suit. Costs against petitioners.
SO ORDERED.
Ynares-Santiago (Chairperson), Austria-Martinez and
Callejo, Sr., JJ., concur.
Petition denied, judgment and resolution affirmed.
Notes.The parties actually entered into a contract of sale,
partially consummated as to the payment of the price, where the
Offer to Purchase provides that, after the payment of the option
money, only the balance of the purchase price need be paid,
implying that the option money forms part of the purchase price.
(Cavite Development Bank vs. Lim, 324 SCRA 346 [2000])
246
6
Sarmiento vs. Zaratan
Earnest money is something of value to show that the buyer is
really in earnest, and given to the seller to bind the bargain, and
whenever earnest money is given in a contract of sale, it is
considered as part of the purchase price and proof of the perfection
of the contract. (Laforteza vs. Machuca, 333 SCRA 643 [2000])
o0o

A.M. No. RTJ-06-2016. March 23, 2009.*(Formerly OCA I.P.I. No. 04-2120-
RTJ)
CORAZON R. TANJUATCO, complainant, vs. JUDGE
IRENEO L. GAKO, JR., Regional Trial Court, Branch 5,
Cebu City, respondent.
Courts; Judges; Pre-Trial; Amendment of Pleadings; The policy behind
the pre-trial guidelines is to abbreviate court proceedings and ensure
prompt disposition of cases and decongest court dockets, and pursuant to
this policy, the judge is expected to determine during pre-trial if there is a
need to amend the pleadings.Contrary to complainants posture, the
assailed suggestions made by respondent may be viewed as an attempt to
comply with the guidelines laid down in Administrative Matter No. 03-1-09-
SC, more known as the Rule on Guidelines to be Observed by Trial Court
Judges and Clerks of Courts in the Conduct of Pre-trial and Use of
Deposition-Discovery Measures. The policy behind the pre-trial guidelines
is to abbreviate court proceedings and ensure prompt disposition of cases
and decongest court dockets. Pursuant to this policy, the judge is expected to
determine during pre-trial if there is a need to amend the pleadings.
Pleadings and Practice; Verification; The requirement on verification
may be made by the party, his lawyer or his representative or any person
who personally knows the truth of the facts alleged in the pleading.
Respondent judge noticed that the person who verified Vicente B.s
complaint was his attorney-in-fact, obviously leading the respondent to
conclude that the verification was defective. He believed a correction was in
order to prevent future complications, such as the filing of a motion to
dismiss the complaint which undeniably will only prolong or delay the case.
In actuality, no clear benefit redounded to Vicente B. as a result of
respondents suggestion, for the requirement on verification may be made by
the party, his lawyer or his representative or any person who personally
knows the truth of the facts alleged in the pleading.
Same; Same; Even if the verification is flawed or defective, the Court
may still give due course to the pleading if the circumstances
_______________
* EN BANC.
201
warrant the relaxation of the rule in the interest of justice.The
Investigating Justice erred too when she concluded that the complaint should
have been dismissed outright under Sec. 5, Rule 7 of the Rules of Court.
Sec. 5, Rule 7 refers to certification against forum shopping. The correct and
applicable rule is the preceding Sec. 4 of Rule 7 which deals with
verification. Even if the Investigator cited the correct Rule (Sec. 4, Rule 7),
she would still be incorrect in her conclusion that the complaint should be
dismissed, for it is basic that verification is only a formal, not jurisdictional,
requisite. Accordingly, even if the verification is flawed or defective, the
Court may still give due course to the pleading if the circumstances warrant
the relaxation of the rule in the interest of justice.
Co-ownership; Parties; A co-owner may bring an action in that
capacity 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.It
should be borne in mind that Pantaleon, Carlos del Rosario, and
complainant, as compulsory heirs of Vicente S., are co-owners of the subject
lots. And a co-owner may bring an action in that capacity 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. When a suit is brought by
one co-owner for the benefit of all, a favorable decision will benefit them
but an adverse decision cannot prejudice their rights. Thus, complainant and
Carlos del Rosario stood to be benefited by the suit filed by Pantaleon, as
attorney-in-fact of Vicente B., as the two, as co-owners, are entitled to their
pro-rata share in the monetary award to be adjudged to Vicente B. Thus,
there was really no prejudice suffered by complainant or her brother, Carlos,
when respondent denied the faulty-filed motion for intervention.
Judges; No one called upon to try the facts or interpret the law in the
process of dispensing justice can be infallible.No one called upon to try
the facts or interpret the law in the process of dispensing justice can be
infallible. To hold judges for every erroneous ruling or order issued,
assuming they have erred, would be nothing short of downright harassment
and would make the judges position untolerable. To dismiss a judge for
what may be considered as serious offenses under the Code of Judicial
Conduct, there must, ideally, reliable evidence to show that the judicial acts
complained of were ill-motivated, corrupt or inspired by a persistent
disregard of well-known rules.
202
Same; Simple Misconduct; The act of a judge in suggesting to a partys
counsel that the amendment to his complaint should, in relief portion,
include a claim for rentals, is improper and at least constitutes simple
misconduct.While there is no evidence tending to show that respondent
perverted his office for some financial benefits or for consideration less than
honest, respondent to be sure did not conduct himself, in relation to Civil
Case No. CEB-27334, with the exacting partiality required under the Code
of Judicial Conduct. As the records show, respondent indeed suggested to
Vicente B.s counsel that the amendment to his complaint should, in relief
portion, include a claim for rentals. This to us is improper and at least
constitutes simple misconduct.
BRION, J., Dissenting Opinion:
Courts; Judges; I do not agree with the unusual sympathy and
consideration that the ponencia has demonstrated towards the respondent
judge whoby the measure of what he did in this case, his record of past
transgressions and past warnings from this Court, and our governing
precedentsshould be held liable for more than simple misconduct and be
penalized accordingly.I dissent from the majority opinion and conclusion.
I do not agree with the unusual sympathy and consideration that the
ponencia has demonstrated towards the respondent judge whoby the
measure of what he did in this case, his record of past transgressions and
past warnings from this Court, and our governing precedentshould be held
liable for more than simple misconduct and be penalized accordingly, I say
with emphasis as I fear that this en banc decision will set a dangerous
precedent that will shield members of the Judiciary who have soiled the
judicial robe on many occasions and who continue to commit violations that
put the whole judiciary to shame.
Same; Same; The ponencias statements are highly unusualthe
justification was provided purely by the ponencia, not by the respondent
judge.I find the ponencias statements highly unusual. First, the
Guidelines were nowhere cited by the respondent Judge as basis for his
actions. The justification was provided purely by the ponencia, not by the
respondent judge. Second, the respondent judges advice to Vicente B went
beyond matters of form that were legitimate for a court to bring up at the
earliest possible time in order to expedite proceedings and avoid
unnecessary delay. A closer
203
look at the rescission case shows that the complaint, on its face, raised a lot
of questions on who the real party in interest from the plaintiff side really
was. The actionable document, attached to the rescission, complaint, was the
contract between Cebu City, and Vicente S and Pantaleon. Yet, Vicente B
stood as the direct petitioner with Pantaleon being a mere attorney-in-fact. It
was Pantaleon who initially verified the complaint, and this was changed at
the suggestion of the respondent Judge, so that Vicente B made the
verification. The other amendment the respondent judge suggested certainly
cannot but lead to raised eyebrows; to allege in the amended complaint that
the amount deposited in escrow inclusive of interest should be paid to
plaintiff (Vicente B) by way of rentals. These were the basic facts that
underlie the ponencias conclusion that the respondent judge merely
committed a simple misconduct.
Same; Same; Actions; Co-ownhership; While a co-owner may sue
without the necessity of joining all the other co-owners as co-plaintiffs,
where the suit is for the benefit of the plaintiff alone in disregard of his or
her co-owners, the action should be dismissed.Knowledge of the pending
partition case (and necessarily of the co-ownership among the heirs) should
have alerted the respondent judge that the partition case would impact on the
rescission case as the part of the land, subject of the disputed contract, and
part of the amount held in escrow belonged to Vicente S and therefore to his
estate after his death and, pending partition, to his heirs in co-ownership.
Thus, the personality of the plaintiff and the nature of the property in dispute
should have been live issues in the rescission case. To be sure, a co-owner
may sue without the necessity of joining all the other co-owners as co-
plaintiffs because the suit is presumed to have been filed to benefit his co-
owners. Adlawan v. Adlawan (479 SCRA 275 [2006]) echoes this doctrinal
rule. However, where the suit is for the benefit of the plaintiff alone in
disregard of his or her co-owners, the action should be dismissed. Arturo M.
Tolentino, explained the rule as follows: 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.
204
Same; Same; The act of the judge in suggesting to a partys counsel
that the amendment to his complaint should, in relief portion, include the
claim for rentals was beyond being improper as it was effectively the
presiding judge lawyering for one of the parties.It is interesting to note
that while the ponencia does not completely exonerate the respondent judge,
it did its utmost to lighten his liability. This is particularly apparent when it
said: While there is no evidence tending to show that the respondent
perverted his office for some financial benefits or for consideration less than
honest, respondent to be sure did not conduct himself, in relation to [the
rescission case], with the exacting partiality required under the Code of
Judicial Conduct. As the records show, respondent indeed suggested to
Vicente B.s counsel that the amendment to his complaint should, in relief
portion, include a claim for rentals. This to us is improper and at least
constitutes simple misconduct. This Dissent posits that under the given facts,
what the respondent judge did cannot be characterized as simple misconduct.
As an intervention, it was beyond being improper as it was effectively the
presiding judge lawyering for one of the parties. This is gross partiality and
plain injustice to those affected by the decision in the rescission case.
Same; Same; The dissent fully agrees with the recommendation for the
dismissal of the judge and with its counterpartthe complete forfeiture of
the respondent judges benefitnow that the respondent judge has retired
from the service.Investigating Justice Guevarra-Salonga recommended
that the respondent, who then was still in the service, he dismissed from the
service for knowingly rendering an unjust judgment and for grave
misconduct in the performance of his duties. This Dissent fully agrees with
this recommendation and with its counterpartthe complete forfeiture of the
respondent judges benefitnow that the respondent judge has retired from
the service. The Dissent is driven by two compelling reasons in taking this
position. First is the respondent judges record of violations while in the
service. He is not a first-time offender and had been repeatedly warned in
the past that more severe penalties awaited him should he commit the same
or similar offenses. He remained incorrigible, however, and showed a
propensity to violate his duties and the trust reposed in him as a judge. This
is evident from the cases filed against him, charging him with and finding
him guilty of various offenses committed in relation to his duties as a judge.
x x x A second reason why this Dissent
205
believes that the respondent merits the ultimate administrative penalty is his
Courts record of dismissing other members of the judiciary for less than the
record of offenses that the respondent judge committed in his years of
service, as well as the message we are communicating to the public who will
surely learn of how the majority has been unusually lenient with the
respondent judge. We shall be disturbing existing jurisprudence and starting
a jurisprudential trend that may prove detrimental to the administration of
justice in the long run.
ADMINISTRATIVE MATTER in the Supreme Court. Knowingly
Rendering Unjust Judgment, Gross Partiality and/or Gross
Ignorance.
The facts are stated in the resolution of the Court.
Law Firm Tanjuatco and Partners for complainant.
RESOLUTION
VELASCO, JR., J.:
This administrative case stemmed from the sworn-complaint1
dated September 24, 2004 of Corazon R. Tanjuatco filed with this
Court, charging Regional Trial Court (RTC) Judge Ireneo L. Gako,
Jr., now retired, with Knowingly Rendering Unjust Judgment,
Gross Partiality and/or Gross Ignorance in connection with a
contract rescission case filed with respondents court.
By Resolution dated August 9, 2006, the Court resolved to refer
the administrative complaint, which was earlier redocketed as a
regular administrative matter, to Court of Appeals (CA) Associate
Justice Josefina Guevarra-Salonga for investigation,
recommendation, and report. 2
_______________
1 Rollo, pp. 3-13.
2 Id., at p. 160.
206
From the complaint, respondents comment thereon, with their
respective annexes, and other documents on record, the Court
gathers the following material facts:
Complainants father, Vicente S. del Rosario (Vicente S.), and her
brother, Pantaleon, co-owned eight (8) parcels of land located in
Alumnus, Basak-San Nicolas, Cebu City, with an aggregate area of
21,000 square meters. Via a Contract to Buy and Sell dated
August 23, 1985,3 Vicente S. and Pantaleon, for PhP 2,156,040,
sold the property to the City of Cebu, for the latters abattoir
project. As agreed upon, the purchase price was to be deposited
and to remain in escrow with the Philippine National Bank (PNB)
until lot titles shall have been delivered to the city. Following the
1986 Edsa event, however, the newly-designated OIC-Mayor of
Cebu City, John H. Osmea, unilaterally stopped the construction
of the abattoir.
On May 7, 1987, Vicente S. died, leaving behind the following
heirs: his wife, Ceferina Urguiaga, and their eight (8) children,
among whom are complainant, Pantaleon, and Carlos del Rosario.
Later developments saw Vicente S.s heirs filing a petition for the
partition of his estate. Docketed as Civil Case No. CEB-17236 of
the RTC of Cebu City, the petition, after several transfers,
eventually landed in Branch 5 of the court, then presided by
respondent judge. According to the respondent, he held
preliminary conferences among the heirs of Vicente S. x x x for
the purpose of settling the case amicably.4 The complainant, on
the other hand, narrated that the respondent held several meetings
in his chambers during the preliminary conferences.5 Upon the
heirs motion, the respondent subsequently inhibited himself from
handling the case.
_______________
3 Id., at pp. 33-35.
4 Id., at p. 93. Respondents Comment.
5 Id., at p. 181. Direct Testimony of Corazon R. Tanjuatco by way of Judicial
Affidavit.
207
At about the same time and based on the above narrated facts,
Vicente B. del Rosario (Vicente B.), represented by his father,
Pantaleon, filed a case against the City of Cebu for the rescission
of the Contract to Buy and Sell covering the eight (8) lots
adverted to. Docketed as Civil Case No. CEB-27334 and entitled
Vicente B. del Rosario, represented by his Attorney-in-Fact,
Pantaleon U. del Rosario v. City of Cebu, the complaint, with
attachments, was raffled to the respondents Branch 5. The
complaint originally carried the Verification/Certification of Non-
Forum Shopping signed by Pantaleon. The verification was
subsequently replaced by another executed by Vicente B., the
plaintiff, based on plaintiffs motion for leave to amend complaint.
This motion recited that
during the hearing [on] x x x July 3, 2002, this Honorable Court told this
representation to amend the complaint because the verification/certification
of non-forum shopping x x x should have been executed by plaintiff Vicente
B. del Rosario who is the real party in interest x x x and to allege that the
amount deposited in escrow inclusive of interest accrued should be paid to
plaintiff by way of rentals.6
On February 26, 2003, Isidro and Michael Alain Reyes de Leon,
heirs of Teresita de Leon, who in turn was Virgilio S.s niece,
moved to intervene in Civil Case No. CEB-27334, but the court
denied the motion.7
By decision dated May 28, 2004, respondent rescinded the contract
in question and awarded the whole purchase price as rentals to
Vicente B. The following events then transpired: (1) Carlos del
Rosario interposed his own motion for intervention; (2) on August
13, 2004, the city of Cebu filed a notice of appeal with the RTC;8
and (3) on September 8, 2004, Vicente B.
_______________
6 Id., at p. 38.
7 Id., at p. 94.
8 Id., at pp. 101-103.
208
moved for execution pending appeal, which the court granted
conditioned upon his posting of a bond.9
It is against the foregoing state of things that the complainant filed
her complaint alleging, in gist, the following:
1. During the rescission case hearing on July 3, 2002, the respondent
instructed Pantaleons counsel to amend the complaint and to attach instead
the verification of his son Vicente B., and to allege that the amount
deposited on the escrow, exclusive of the interest accrued, should be paid to
Vicente B. by way of rentals. Vicente B. was, therefore, made to appear as
the plaintiff. By these actuations, the respondent was no longer acting as an
impartial trier of facts. He was in fact lawyering for Pantaleon.
2. The respondent admitted the Amended Complaint despite the fact that
Vicente B. failed to pay the appropriate filing fee for the additional relief
sought in the complaint.
3. On May 28, 2004, the respondent rendered judgment ordering contract
rescission and awarding the purchase price therefor in escrow to Vicente B.
as rentals, despite his knowledge that one-half of the subject property
belongs to the estate of the deceased Vicente S. and was already within the
jurisdiction and custody of the court handling the partition case.
4. The respondent issued an Order allowing execution pending appeal
while the motion for intervention filed by Carlos del Rosario remained
unresolved.
In his Comment,10 respondent, inter alia, alleged that: his May 28,
2004 decision, far from being unjust, was based on the law and
evidence and was in fact beneficial to complainant, Cebu City
being ordered to return the eight (8) lots subject of the case; Carlos
del Rosarios motion to intervene was filed only after the decision
was rendered; he was not aware that four of the eight lots involved
in Civil Case No. CEB-27334 were included in Civil Case No.
CEN-17236 for partition; there was no need to implead the
complainant as she
_______________
9 Id., at pp. 87-88.
10 Id., at pp. 92-95.
209
and the other heirs could very well be represented by Pantaleon
who owned four of the lots in question and is a co-owner of the
other four; no damage was done to the complainant because the
case is on appeal with the CA; the complainant did not move for
intervention in the rescission case as an indispensable party; and
the matter of plaintiff Virgilio B.s non-payment of the filing fees
was not brought to the courts attention. Apropos the allegation
about his having instructed the plaintiffs counsel on what to do in
the case, respondent countered that it is the courts duty, in the
course of a hearing, to suggest to litigants and their counsels to
follow the proper procedures so that cases be speedily resolved.
On September 20, 2006, respondent judge reached the compulsory
retirement age of 70. The Court, however, ordered that the release
of his retirement benefits be held in abeyance until the resolution
of this administrative case and to hold these benefits available to
answer for any monetary penalty that may be imposed.
Following due hearings, the Investigating Justice submitted on
December 6, 2006 an investigation report. In it, she recommended
that respondent judge be adjudged guilty of knowingly rendering
an unjust judgment and grave misconduct in the performance of his
duties and be meted the penalty of dismissal. She predicated her
recommendation on the guilt of respondents on three (3) main
premises, to wit: (1) respondent proceeded with the rescission case
without impleading indispensable parties; (2) he lawyered for the
plaintiff, thus betraying his partiality towards a party in a case; and
(3) he denied and/or refused to act on the motion to intervene of an
indispensable party. Here are some excerpts of the investigation
report:
Admittedly, respondent presided over the Partition Case, having held
preliminary conferences x x x. The fact that he conducted conferences
among the heirs of the deceased Vicente coupled by the fact that the
Partition Case was filed by one of the heirs in defiance to the position of the
other heirs respecting the settlement of the
210
vast estate, would sufficiently serve notice to him that there is a severe
conflict of interests among said heirs. Respondent judge may very well insist
that he did not have the opportunity to read the voluminous case records as
well as the Rescission Case [which] would have alerted him of the need to
implead all the heirs of the deceased Vicente.
Besides, respondent x x x cannot simply feign ignorance of the Partition
Case. Before he had rendered his now assailed Decision, [he] was even
reminded by plaintiff Vicente of the pendency of the Partition Case when the
latter filed his opposition to the motion of intervenors De Leon.
So viewed, respondent judge need not wait for the complainant or the other
heirs to intervene in the Rescission Case, since it is his duty as a judge to
ensure that all indispensable parties are impleaded before resolving a case.
Law and jurisprudence clearly and explicitly dictate compulsory joinder of
indispensable parties. The absence of an indispensable party in a case
renders ineffectual all the proceedings subsequent to the fling of the
complaint including the judgment.
Parenthetically, when an action involves reconveyance of property x x x
owners of property over which reconveyance is asserted are indispensable
parties x x x.
xxxx
Still and all respondent judge opted x x x to exclude the complainant and the
other heirs of the deceased Vicente based on the bare supposition that since
Pantaleon owns the remaining half of the subject lots and that Pantaleon is
also an heir of the deceased, there is no longer any need to implead the other
heirs. x x x
Clearly, this manifests the bias and partiality of the respondent judge in
favor of Pantaleon. At this point, it bears to stress that respondent judge is at
a complete loss as to what capacity Pantaleon stands in the Rescission Case.
In his Comment dated March 8, 2005, respondent judge refers to Pantaleon,
and not plaintiff Vicente, as the plaintiff in the Rescission Case and the
supposed owner of half of the subject lots.
x x x Whether the Rescission Case was resolved speedily is of no moment
x x x. What remains is the fact that respondent judge favored Pantaleon and
disposed of the Rescission Case to the detriment of the other heirs of the
deceased Vicente. x x x
211
Worse, respondent judge had inexcusably failed to act on a motion to
intervene filed by one of the heirs of the deceased Vicente. While said
motion to intervene was filed after the assailed Decision had been rendered,
respondent judge should have prudently acted on it especially so since the
motion itself had raised the issue of non-joinder of indispensable parties.
xxx
Needless to state, whenever it appears to the court in the course of a
proceeding that an indispensable party has not been joined, it is the duty of
the court to stop the trial and order the inclusion of such party. Such an order
is unavoidable, for it is precisely when an indispensable party is not before
the court (that) the action should be dismissed.
What further reflects respondent judges utter betrayal of his duties and
responsibilities as a judge is his admission that he had in fact taught
Pantaleon what to do in the case. x x x
Certainly, the fact that respondent judge instructed Pantaleon to withdraw
the verification and certification of non-forum shopping and replace it with
one executed by plaintiff Vicente is blatantly partial, irregular and in direct
violation of procedural rules. Respondent judge should have dismissed the
complaint outright as provided under Section 5 of Rule 7 of the Rules of
Court. x x x
xxxx
All the foregoing are telling proofs that the act of the respondent judge
knowingly rendering the assailed Decision is indisputably unlawful,
anomalous and is totally inconsistent with any claim of good faith in the
performance of his judicial functions. The evidence on record proves that the
respondent judge committed acts amounting to grave misconduct.
The Court is unable to fully agree with the recommendation and
the premises and arguments holding it together.
We start off with the role of the respondent in the matter of the
amendment of the complaint. As complainant claims, respondent
judge instructed Pantaleons counsel to amend the complaint in
Civil Case No. CEB-27334 and to attach to the amended complaint
the verification of his son, Vicente B., and to allege that the
amount deposited in escrow, exclusive of the interest accrued,
should be paid to Vicente B. by way of rentals.
212
Agreeing with the complainant, the Investigating Justice stated the
observation that said actuations of respondent judge is partial,
irregular and in direct violation of procedural rules, adding that
the original complaint should have been dismissed outright
pursuant to Section 5, Rule 7 of the Rules of Court.
We are not persuaded.
Contrary to complainants posture, the assailed suggestions made
by respondent may be viewed as an attempt to comply with the
guidelines laid down in Administrative Matter No. 03-1-09-SC,
more known as the Rule on Guidelines to be Observed by Trial
Court Judges and Clerks of Courts in the Conduct of Pre-trial and
Use of Deposition-Discovery Measures. The policy behind the pre-
trial guidelines is to abbreviate court proceedings and ensure
prompt disposition of cases and decongest court dockets. Pursuant
to this policy, the judge is expected to determine during pre-trial if
there is a need to amend the pleadings.
Sec. 5 of the pre-trial guidelines reads:
5. If all efforts to settle fail, the trial judge shall:
a. Adopt the minutes of preliminary conference as part of the pre-trial
proceedings and confirm markings of exhibits or substituted photocopies and
admissions on the genuineness and due execution of documents;
b. Inquire if there are cases arising out of the same facts pending before
other courts and order its consolidation if warranted;
c. Inquire if the pleadings are in order. If not, order the amendments if
necessary;
d. Inquire if interlocutory issues are involved and resolve the same;
e. Consider the adding or dropping of parties.
As it were, respondent judge noticed that the person who verified
Vicente B.s complaint was his attorney-in-fact, obviously leading
the respondent to conclude that the verification
213
was defective. He believed a correction was in order to prevent
future complications, such as the filing of a motion to dismiss the
complaint which undeniably will only prolong or delay the case.
In actuality, no clear benefit redounded to Vicente B. as a result of
respondents suggestion, for the requirement on verification may
be made by the party, his lawyer or his representative or any
person who personally knows the truth of the facts alleged in the
pleading.11
Thus, Pantaleons verification accompanying the original
complaint would have had sufficed.
Complainants assertion that respondent made it appear that
Pantaleon was the plaintiff is a bit specious. The title of the case,
no less, clearly indicated that Vicente B. is the plaintiff, not
Pantaleon.
The Investigating Justice erred too when she concluded that the
complaint should have been dismissed outright under Sec. 5, Rule
7 of the Rules of Court. Sec. 5, Rule 7 refers to certification against
forum shopping. The correct and applicable rule is the preceding
Sec. 4 of Rule 7 which deals with verification.
Even if the Investigator cited the correct Rule (Sec. 4, Rule 7), she
would still be incorrect in her conclusion that the complaint should
be dismissed, for it is basic that verification is only a formal, not
jurisdictional, requisite.12 Accordingly, even if the verification is
flawed or defective, the Court may still give due course to the
pleading if the circumstances warrant the relaxation of the rule in
the interest of justice.13
On another point, the Investigating Justice faulted the respondent
for not impleading complainant and her brother,
_______________
11 1 Regalado, Remedial Law Compendium 145; citing Arambulo vs. Perez, 78
Phil. 387 (1947); Matel v. Rosal, 96 Phil. 984 (1955); Cajefe v. Fernandez, 109
Phil. 743 (1960).
12 Buenaventura v. Uy, et al., No. L-28156, March 31, 1982.
13 Oshita v. Republic, No. L-21180, March 31, 1967, 19 SCRA 700.
214
Carlos del Rosario, as parties-plaintiffs. She reasoned that
respondent need not wait for complainant and the other heirs to
intervene, it being the courts duty to implead all indispensable
parties before resolving the case.
To a certain extent, the Investigating Justice is correct.
While it is true that the pre-trial guidelines (A.M. No. 03-1-09-SC)
obliges the judge, if proper, to add or drop parties to the case, the
inclusion of parties-plaintiffs is a different situation.
Intervening in a case is not a matter of right but of sound discretion
of the Court. Sec. 2, Rule 19 of the Rules on the subject, Time to
intervene, specifically provides that the motion to intervene may
be filed at anytime before rendition of judgment by the trial court.
Thus, intervention to unite with the plaintiffs must be filed before
rendition of judgment. Thus, respondent acted within the bounds of
the rules when he denied Carlos del Rosarios intervention, filed as
the corresponding motion was after the assailed decision was
rendered.
The investigation report stated that it is the duty of the judge to
ensure that all indispensable parties are impleaded before resolving
the case. This may be true with respect to the joinder of
defendants as jurisdiction over their persons can be acquired by
means of service of summons. With respect to other real parties-in-
interest as additional plaintiffs, however, the court cannot simply
issue an order towards the impleadment of said parties as
additional plaintiffs. These proposed plaintiffs must give their
consent to their inclusion as plaintiffs. Otherwise, the addition of
such parties will be useless and irregular considering they may be
adverse to the idea of being parties-plaintiffs in the first place.
Thus, the respondent was correct in not simply adding complainant
and Carlos del Rosario as co-plaintiffs of Vicente B. since the RTC
had yet to acquire jurisdiction over their persons. As a matter of
fact, they filed a motion to intervene but was rejected because it
was filed after the decision was promulgated.
215
To be sure, the Investigating Justice was mistaken in her belief that
Pantaleon, the attorney-in-fact of plaintiff Vicente B., cannot
represent the other interested heirs like complainant and Carlos del
Rosario even without the joinder of the latter as co-plaintiffs.
It should be borne in mind that Pantaleon, Carlos del Rosario, and
complainant, as compulsory heirs of Vicente S., are co-owners of
the subject lots. And a co-owner may bring an action in that
capacity 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.14 When a suit is brought by one co-owner for the
benefit of all, a favorable decision will benefit them but an adverse
decision cannot prejudice their rights.15 Thus, complainant and
Carlos del Rosario stood to be benefited by the suit filed by
Pantaleon, as attorney-in-fact of Vicente B., as the two, as co-
owners, are entitled to their pro-rata share in the monetary award to
be adjudged to Vicente B. Thus, there was really no prejudice
suffered by complainant or her brother, Carlos, when respondent
denied the faulty-filed motion for intervention.
No one called upon to try the facts or interpret the law in the
process of dispensing justice can be infallible.16 To hold judges for
every erroneous ruling or order issued, assuming they have erred,
would be nothing short of downright harassment and would make
the judges position untolerable.17 To dismiss a judge for what may
be considered as serious offenses under the Code of Judicial
Conduct, there must, ideally, reliable evidence to show that the
judicial acts complained of were ill-motivated, corrupt or inspired
by a persistent disregard of well-known rules.
_______________
14 2 Tolentino, Civil Code of the Philippines 170.
15 Id.
16 Vda. de Zabala v. Pamaran, 39 SCRA 430-431 (1971).
17 Barroso v. Arche, Adm. Case No. 216-CFI, 67 SCRA 161.
216
While there is no evidence tending to show that respondent
perverted his office for some financial benefits or for consideration
less than honest, respondent to be sure did not conduct himself, in
relation to Civil Case No. CEB-27334, with the exacting partiality
required under the Code of Judicial Conduct. As the records show,
respondent indeed suggested to Vicente B.s counsel that the
amendment to his complaint should, in relief portion, include a
claim for rentals. This to us is improper and at least constitutes
simple misconduct.
Simple misconduct is punishable under Rule 140 as follows:
B. If the respondent is guilty of a less serious charge, any of the following
sanctions shall be imposed:
1. Suspension from office without salary and other benefits for not less than
one (1) nor more than three (3) months; or
2. A fine of more than P10,000.00 but not exceeding P20,000.00.
Since respondent has already retired,18 only a maximum fine of PhP
20,000 can be imposed under said rule. Since he, however, had
previously been adjudged guilty of and penalized for various
infractions in more than a few cases,19 with repeated warnings of
more severe sanction in case of repetition, a fine of PhP 100,000 is
appropriate.
_______________
18 The retirement of judges does not render moot the administrative cases against
them for acts committed while in the service. See Lagcao v. Gako, Jr., A.M. No.
RTJ-04-1840, August 2, 2007, 529 SCRA 55, 69-70; Report on the Judicial Audit
Conducted in the Regional Trial Court, Branch 8, Cebu City, A.M. No. 05-2-101-
RTC, April 26, 2005, 457 SCRA 1, 11.
19 Office of the Court Administrator v. Gako, Jr., A.M. No. RTJ-07-2074, October
24, 2008, 570 SCRA 49; City of Cebu v. Gako, Jr., A.M. No. RTJ-08-2111, May
7, 2008, 554 SCRA 15; Lagcao, supra; Zamora v. Gako, Jr., A.M. No. RTJ-99-
1484, October 24, 2000, 344 SCRA 178; Rallos v. Gako, Jr., A.M. No. RTJ-99-
1484 (A), March 17, 2000, 328 SCRA 324.
217
WHEREFORE, the Court adjudges former Judge Ireneo Lee Gako,
Jr. of the RTC, Branch 5 in Cebu City GUILTY of Simple
Misconduct. He is hereby meted the penalty of FINE in the amount
of one hundred thousand pesos (PhP 100,000) to be deducted from
his retirement benefits.
The Office of the Court Administrator is hereby ordered to
facilitate the processing of the retirement papers of retired Judge
Gako for the speedy release of his retirement benefits.
SO ORDERED.
Quisumbing, Azcuna, Tinga, Chico-Nazario, Nachura,
Leonardo-De Castro and Peralta, JJ., concur.
Puno (C.J.), Ynares-Santiago, Carpio, Austria-Martinez,
Corona and Carpio-Morales, JJ., Join the Dissent of J. Brion.
Brion, J., I Dissent.
DISSENTING OPINION
BRION, J.:
I dissent from the majority opinion and conclusion. I do not
agree with the unusual sympathy and consideration that the
ponencia has demonstrated towards the respondent judge whoby
the measure of what he did in this case, his record of past
transgressions and past warnings from this Court, and our
governing precedentshould be held liable for more than simple
misconduct and be penalized accordingly, I say with emphasis as I
fear that this en banc decision will set a dangerous precedent that
will shield members of the Judiciary who have soiled the judicial
robe on many occasions and who continue to commit violations
that put the whole judiciary to shame.
Two essential facts must be appreciated at the outset in
considering the case. The first, a matter of record, is that the
rescission complaint that gave rise to the present administrative
matter involved a contract between Vicente S and his
218
son, Pantaleon, on the one hand, and the City of Cebu, on the
other. Interestingly, Pantaleon did not frontally sue on this
contract; it was his son, Vicente B who did and Pantaleon only
acted as Vicente Bs attorney-in-fact. The second essential
undisputed fact is that Vicente S had died at the time Vicente B
sued for rescission. As a result of Vicente S death, the heirs of
Vicente S (among whom was Pantaleon) had an active case for
partition that for one year was pending before the respondent Judge
until he was compelled to inhibit himself at the instance of the
parties. Half of the property subject of the rescission case belonged
to Vicente S and, hence, is part of his undivided estate.
In the course of the rescission case, the respondent Judge
advised the petitioner that the complaint be amended so that the
verification shall be made by Vicente B instead of Pantaleon, and
that the purchase price paid by Cebu City and held in escrow shall,
upon rescission of the contract, be paid as rentals, not to the parties
to the rescinded contract, but to Vicente B, the direct petitioner.
The ponencia points out that the suggestions made by
respondent judge to Vicente B., represented by Pantaleon, may be
viewed as an attempt to comply with the guidelines laid down in
Administrative Matter 03-1-09-SC, otherwise known as the Rule
on Guidelines to be Observed by Trial Court Judges and Clerks of
Court in the Conduct of Pre-trial and Use of Discovery Deposition
Measures (Guidelines); the purpose of the Guidelines is to
abbreviate court proceedings, ensure prompt disposition of cases
and decongest court dockets. The ponencia suggested that the
respondent might have noticed that the person who verified the
complaint was Pantaleon (the attorney-in-fact) and possibly
concluded that the verification was defective and should be
addressed to prevent future complications, such as the filing of a
possible motion to dismiss; and that there was really no need for a
new verification because the attorney-in-fact is allowed to verify.
The
219
ponencia also points out that the Investigating Justice erred when
she concluded that the complaint should be dismissed outright
under Section 5, Rule 7 of the Rules of Court (the rule on
certification against Forum Shopping), and when she faulted the
respondent for not impleading complainant Tanjuatco and Carlos
del Rosatio as parties-plaintiffs.
I find the ponencias statements highly unusual. First, the
Guidelines were nowhere cited by the respondent Judge as basis
for his actions. The justification was provided purely by the
ponencia, not by the respondent judge. Second, the respondent
judges advice to Vicente B went beyond matters of form that were
legitimate for a court to bring up at the earliest possible time in
order to expedite proceedings and avoid unnecessary delay. A
closer look at the rescission case shows that the complaint, on its
face, raised a lot of questions on who the real party in interest from
the plaintiff side really was. The actionable document, attached to
the rescission, complaint, was the contract between Cebu City, and
Vicente S and Pantaleon. Yet, Vicente B stood as the direct
petitioner with Pantaleon being a mere attorney-in-fact. It was
Pantaleon who initially verified the complaint, and this was
changed at the suggestion of the respondent Judge, so that Vicente
B made the verification. The other amendment the respondent
judge suggested certainly cannot but lead to raised eyebrows; to
allege in the amended complaint that the amount deposited in
escrow inclusive of interest should be paid to plaintiff (Vicente B)
by way of rentals. These were the basic facts that underlie the
ponencias conclusion that the respondent judge merely committed
a simple misconduct.
A companion development in the case that makes matter curioser
and curioser (As Alice in Wonderland puts it) is that the
respondent judge was not a stranger at all to the del Rosario
family; members of the family had appeared before the respondent
judge as heirs in the partition of the estate of their patriarch, the
late Vicente S. del Rosario. As reflected in the Report of
Investigating Justice, the heirs/co-owners of the
220
estate of Vicente S appeared at the pre-trial of the partition of
estate case before the respondent judge, although the latter was
subsequently compelled to withdraw from the case at the instance
of the heirs who, in the judges words, misunderstood him. As
the Report puts it, [t]he fact that he conducted conferences among
the heirs of the deceased [Vicente S] coupled by the fact that the
Partition Case was filed by one of the heirs in defiance to the
position of the other heirs respecting the settlement of a vast estate,
would sufficiently serve notice to him that there is a severe conflict
of interests among said heirs.
Thus, the respondent judge who presided over the rescission case
knew, not only of the partition case, but also of the conflicting
claims by the heirs of Vicente S who were then effectively co-
owners pending partition of the estate. Yet, the respondent judge
simply went ahead and decided the rescission case, adjudicating
the whole amount held in escrow to Vicente B as rentals, without
any acknowledgement in his decision of the co-ownership status of
part of the award to Vicente B. Significantly, one of the heirs
(Carlos del Rosario) moved to be allowed to intervene in the case
although the motion was filed after the issuance of the decision in
the case but prior to its finality. The respondent judge, in defense,
simply said that he did not act on the motion to intervene because
it skipped from the attention of the courta most uncommon
explanation indeed.
Knowledge of the pending partition case (and necessarily of the
co-ownership among the heirs) should have alerted the respondent
judge that the partition case would impact on the rescission case as
the part of the land, subject of the disputed contract, and part of the
amount held in escrow belonged to Vicente S and therefore to his
estate after his death and, pending partition, to his heirs in co-
ownership. Thus, the personality of the plaintiff and the nature of
the property in dispute should have been live issues in the
rescission case. To be sure, a co-owner may sue without the
necessity of joining all the other co-owners as co-plaintiffs because
the suit is
221
presumed to have been filed to benefit his co-owners. Adlawan v.
Adlawan1 echoes this doctrinal rule. However, where the suit is for
the benefit of the plaintiff alone in disregard of his or her co-
owners, the action should be dismissed. Arturo M. Tolentino,2
explained the rule as follows:
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 supplied.)
The respondent judge disregarded this rule although in his mind
Pantaleon, rather that Vicente B, was the real plaintiff as reflected
in his Comment dated March 8, 2005 where he referred to
Pantaleon, not Vicente B, as the plaintiff and owner of the half of
the lots disputed with Cebu City. The ponencia itself appeared at a
loss about the parties relationships in the rescission and the
partition cases as shown by its ruling that:
It should be borne in mind that Pantaleon, Carlos del Rosario, and
complainant, as compulsory heirs of Vicente S. are co-owners of the subject
lots. And a co-owner may bring an action in that capacity 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. When a suit is brought by
one co-owner for the benefit of all, a favorable decision will benefit them
but an adverse decision cannot prejudice their rights. Thus, complainant and
Carlos del Rosario stood to be benefited by the suit filed by Pantaleon, as
attorney-in-fact of Vicente B, as the two, as co-owners, are entitled to their
pro-rata share in the monetary award to be adjudged to Vicente B. Thus,
there was really no prejudice suffered by complainant or her brother, when
the respondent denied the faulty-filed motion for intervention.
_______________
1 G.R. No. 161916, January 20, 2006, 479 SCRA 275.
2 Tolentino, Civil Code of the Philippines, Vol. II, 1983 Edition, p. 157.
222
The ponencia clearly overlooked that the rescission complaint was
not filed by a co-owner in his capacity as a co-owner. More
importantly, it was not even brought by a co-owner but by the son
of a co-owner; co-owner Pantaleon pointedly avoided being a
direct party to the rescission case, and even withdrew his
verification at the instance of the respondent judge. Thus, the
award of the rentals to Vicente B was not an award to a co-
ownera circumstances that will vastly complicate the partition
case if an attempt is made to bring in this award as part of the
estate. The ponencia, too, devoted a lengthy discussion on the
issue of joinder of parties, on both the plaintiff and the defendant
sides. It, however, forgot that the respondent did not make any
ruling on the intervention that Carlos del Rosariothe brother of
Pantaleon and a co-heirsought; as already mentioned, his motion
for intervention, according to the respondent judge, simply
skipped the attention of the court.
Given these observations, it may well now be asked for purposes
of evaluating the import of the suggestion of the respondent judge
to Vicente B; why did Pantaleon did not bring the rescission case
himself and even went to the extent of withdrawing his verification
at the direct suggestion of the respondent judge? In fact, were the
suggestions of the respondent judgeon the matter of verification
and on the amendment of the complaint to reflect that the amount
is escrow should be paid to Vicente B as plaintiffsimply matters
of procedure intended to expedite the proceedings?
To recall the basic facts narrated above, the parties in interest on
the part of the del Rosarios in the contract with Cebu City were
father and son, Vicente S and Pantaleon. Thus, in the rescission
case, it was Pantaleons interest that was at stake, not Vicente Bs.
By undertaking the verification (which by the way, is a substantive
change, not simply a matter of form as the verifier swears to his
personal knowledge of the facts stated), Vicente was effectively
reinforcing the idea that his was the direct interest to protect. At
the same time, Pantaleon, the direct co-owner in the estate of
Vicente S, was
223
dissociating himself from the rescission case as he was already a
party to the partition case then already pending; his presence in
both cases could raise forum-shopping issues as the Investigating
Justice directly implied when she said the the respondent judge
should have dismissed the case outright as provided under Section
5 of Rule 7 of the Rules of Court. The whole intent of the change
in the verification becomes apparent with the respondent judges
second suggestionto allege in the amended complaint that the
amount deposited in escrow be paid to the plaintiff (who is Vicente
B) by way of rentals. These companion moves ensured the
objective of securing for Vicente Ba non-party to the partition
casethe funds in escrow.
Under this view, the respondent judge directly paved the way in
securing the objective, firstly by the out-of-bounds suggestions
described above. His help was also indispensable because he
overlooked in his decision Vicente Bs lack of interest and
personality to bring the rescission suit, while at the same time
making sure that none of the other heirs in Vicente S estate
intervened. The respondent judge further helped by granting the
motion for execution pending appeal despite live issues that would
have alerted a fair and conscientious judge that something was
amiss. From this perspective, the ponencias cited Guidelines loses
relevance even if it had been invoked by the respondent judge,
while the other grounds the ponencia raised are mere technical
grounds that do not detract from the conclusion that the respondent
grossly violated his judicial duties and did not simply commit
simple misconduct. The way the Investigating Justice put it is
particularly apt: what the respondent committed in this case is not
sheer ignorance of the law but a blatant miscarriage of justice and
betrayal of his sacred oath as a judge.
It is interesting to note that while the ponencia does not completely
exonerate the respondent judge, it did its utmost to lighten his
liability. This is particularly apparent when it said:
224
While there is no evidence tending to show that the respondent perverted
his office for some financial benefits or for consideration less than honest,
respondent to be sure did not conduct himself, in relation to [the rescission
case], with the exacting partiality required under the Code of Judicial
Conduct. As the records show, respondent indeed suggested to Vicente B.s
counsel that the amendment to his complaint should, in relief portion,
include a claim for rentals. This to us is improper and at least constitutes
simple misconduct. (Emphasis supplied.)
This Dissent posits that under the given facts, what the respondent
judge did cannot be characterized as simple misconduct. As an
intervention, it was beyond being improper as it was effectively
the presiding judge lawyering for one of the parties. This is gross
partiality and plain injustice to those affected by the decision in the
rescission case.
This Court does not likewise need a finding of financial benefits
or considerations less than honest in order to conclude that what
the respondent judge did was gross misconduct in the performance
of duties. Had these benefits and considerations been found, they
would have simply been grounds, not only for the administrative
charge of gross misconduct, but for a criminal charge for bribery at
the very least. What appears clear to this Dissent, again as the
Investigating Justice phrased it, is that the respondent judge had
the deliberate intent to do injustice to the complainant and other
heirs that brought the respondent judge in conflict with Canons 2
and 3 of the Code of Judicial Conduct which read:
Canon 2
A JUDGE SHOULD AVOID IMPROPRIETY
AND THE APPEARANCE OF IMPROPRIETY
IN ALL ACTIVITIES
Canon 3
A JUDGE SHOULD PERFORM OFFICIAL DUTIES
HONESTLY AND WITH IMPARTIALITY AND
DILIGENCE
225
As stressed in the foregoing discussions, the respondent went
beyond due bounds and committed improprieties in the
performance of his duties when he maliciously intervened, through
suggestions from the bench to a party, in order to influence the
outcome of the case before him. He was also manifestly unfair,
using his skewed reading of the law, in continuing to entertain the
rescission complaint despite its obvious defects, despite the
pendency of the partition case, and despite the prejudicial effects
of his ruling on the other heirs of Vicente S. To be sure, what he
did in the case were not mere isolated acts of improprieties but
gross and unmistakable violations that, following a pattern, were
geared towards the objective of favoring a chosen party.
Investigating Justice Guevarra-Salonga recommended that the
respondent, who then was still in the service, he dismissed from
the service for knowingly rendering an unjust judgment and for
grave misconduct in the performance of his duties. This Dissent
fully agrees with this recommendation and with its counterpart
the complete forfeiture of the respondent judges benefitnow
that the respondent judge has retired from the service.
The Dissent is driven by two compelling reasons in taking this
position. First is the respondent judges record of violations while
in the service. He is not a first-time offender and had been
repeatedly warned in the past that more severe penalties awaited
him should he commit the same or similar offenses. He remained
incorrigible, however, and showed a propensity to violate his
duties and the trust reposed in him as a judge. This is evident from
the cases filed against him, charging him with and finding him
guilty
of various offenses committed in relation to his duties as a judge.
In Rallos v. Gako, Jr.,3 this Court found the respondent guilty of
grave abuse of authority, partiality and dis-
_______________
3 A.M. No. RTJ-99-1484 (A), March 17, 2000, 328 SCRA 324.
226
honesty when he made it appear that the complainants, who were
petitioners in an intestate estate proceedings before his court, were
present during a hearing of their petition when in fact they had not
attended because the respondent changed the date of hearing
without notifying them. We fined him P10,000.00 and warned him
that a commission of similar acts in the future would be dealt with
more severely.
In Zamora v. Gako, Jr.,4 then Executive Secretary Ronaldo B.
Zamora charged the respondent with ignorance of the law and
grave abuse of authority for having ordered the release of 25,000
sacks of smuggled rice to the claimants, notwithstanding the
pendency of seizure and forfeiture proceedings with the Bureau of
Customs, the office with exclusive jurisdiction over seizure and
forfeiture proceedings. We found him guilty of gross ignorance of
the law and suspended him for three (3) months without pay, with
the stern warning that the commission of similar acts in the future
would be dealt with more severely.
In Lagkao v. Gako, Jr.,5 we found the respondent guilty of grave
abuse of authority for issuing a temporary restraining order in
defiance of the decision of a higher court setting aside an
injunctive writ he had issued. We fined him P20,000 and sternly
warned him.
In City of Cebu v. Gako, Jr.,6 we found the respondent guilty of
undue delay in rendering a decision in a civil Case. We imposed a
fine of P40,000.00 and our usual warning.
_______________
4 A.M. No. RTJ-99-1484, October 24, 2000, 344 SCRA 178.
5 A.M. No. RTJ-04-1840, August 2, 2007, 529 SCRA 55.
6 A.M. No. RTJ-08-2111, promulgated on May 7, 2008, 554 SCRA 15.
227
In Office of the Court Administrator v. Gako, Jr.,7 the respondent
and some of his court employees were found to have violated
pertinent circulars and orders on the procedure for raffling of
cases. The respondent judge acted on 518 petitions for voluntary
confinement and rehabilitation of drug dependents filed from 1998
to 2006; these petitions had not been raffled as required and had
instead been brought directly to the respondents sale, in clear
violation of Section 2, Rule 20 of the 1997 Rules of Civil
Procedure. We fined him P40,000 with the ever-present warning
that the nest offense would merit a sterner penalty.
At this point, the respondent has already mocked this Court by
continuing his violations and his perverse ways, and getting away
with it. He will continue to mock this Court when he reads that all
that we can do is fine him another P100,000.00 that the majority
found sufficient and appropriate for his SIXTH offense.
Unfortunately for the Court, this time we can no longer serve him a
warning as he is now beyond such warning.
A second reason why this Dissent believes that the respondent
merits the ultimate administrative penalty is his Courts record of
dismissing other members of the judiciary for less than the record
of offenses that the respondent judge committed in his years of
service, as well as the message we are communicating to the public
who will surely learn of how the majority has been unusually
lenient with the respondent judge. We shall be disturbing existing
jurisprudence and starting a jurisprudential trend that may prove
detrimental to the administration of justice in the long run.
Given the penalty the majority imposed on the respondent judge,
the members of the Judiciary who had earlier been dismissed as
well as the public would cry foul when they learn of the Gako
record of surviving his sixth major offense. To
_______________
7 A.M. No. RTJ-07-2074, promulgated on October 24, 2008, 570 SCRA 49.
228
name some, this Court since 1992 has dismissed: Judge Florante
Madrono;8 Judge Angelito C. Teh;9 Judge Eduardo F. Cartagena;10
Judge Bienvenido M. Rebosura;11 Judge
Walerico Butalid;12 Judge Estanislao S. Belan;13 Judge Rica H.
Lacson;14 Judge Abelardo H. Santos;15 Judge Melchor E. Bonilla;16
Judge Erna Falloran-Aliposa;17 Judge Salih
_______________
8 A.M. No. MTJ-90-486, October 20, 1992, 214 SCRA 740. The Court held that
the penalty against a judge found guilty of several violations is dismissal from the
service with forfeiture of all salaries, benefits and leave credits in which he may be
entitled and with prejudice to reemployment in the government service, including
government-owned or controlled corporations.
9 A.M. No. RTJ-97-1375, October 16, 1997, 280 SCRA 623. Judge Teh was
dismissed for gross ignorance of the law.
10 A.M. No. 95-9-98-MCTC, December 4, 1997, 282 SCRA 370. Judge
Cartagena was dismissed for gross incompetence, ignorance of the law, and
misconduct.
11 A.M. No. MTJ-95-1069, January 28, 1998, 285 SCRA 109. Judge Rebosura
was dismissed for gross misconduct.
12 A.M. No. 97-8-242-RTC, August 5, 1998, 293 SCRA 589. The Court
dismissed Judge Butalid for dishonesty.
13 A.M. No. MTJ-95-1059, August 7, 1998, 294 SCRA 1. Judge Belan was
dismissed for conduct prejudicial to the best interest of the service and for
dishonesty.
14 A.M. No. MTJ-93-881, August 3, 1998, 293 SCRA 524. For violations of
Canon 3 of the Code of Judicial Conduct and Memorandum Circular No. 30 of the
Civil Service Commission, Judge Lacson was dismissed from service.
15 A.M. No. MTJ-99-1197, May 26, 1999, 307 SCRA 582. Judge Santos was
dismissed for transgressing Rule 2.01 of the Code of Judicial Conduct.
16 A.M. Nos. MTJ-94-923 and MTJ-95-11-125-MCTC, September 10, 1999, 314
SCRA 141. Judge Bonilla was dismissed for falsification of public document,
graft and corruption, dishonesty, gross misconduct, grave abuse of authority, and
immorality.
17 A.M. No. RTJ-99-1446, March 9, 2000, 327 SCRA 427. Judge Falloran-
Aliposa was dismissed for serious misconduct and for failure to measure up to the
exacting standards of conduct and morality expected of members of the judiciary.
229
Musa;18 Judge Galdino B. Jardin, Sr.;19 and Judge Fabian M.
Bautista.20 In recent memory, we dismissed no less than three
Justices of the Court of Appeals; Justices Demetrio Demetria for
violating Rule 2.04 of the Code of Judicial Conduct in A.M. No.
00-7-09-CA;21 Justice Elvi John Asuncion for gross ignorance of
the law in A.M. No. 06-44-CA-J;22 and very recently, Justice
Vicente Roxas for multiple violations of the canons of the Code of
Judicial Conduct, grave misconduct, dishonesty, undue interest and
conduct prejudicial to the best interest of the service in A.M. No.
08-8-11-CA,23 his second offense.
Why Judge Ireneo Gako has been differently treated will be a
question that many will ask. Many will even wonder why, after
finding the respondent judge liable and fining him P100,000.00,
the majority is even directing the Office of the Court Administrator
to facilitate the processing of the retirement papers of [respondent
judge] for the speedy release of his retirement benefits.
The Dissent reiterates that respondent Judge Ireneo Gako should
be found guilty of gross misconduct for knowingly rendering an
unjust judgment, gross partiality, and gross ignorance of the law.
He should be imposed the penalty of
G.R. No. 166519. March 31, 2009.*

NIEVES PLASABAS and MARCOS MALAZARTE,
petitioners, vs. COURT OF APPEALS (Special Former Ninth
Division), DOMINADOR LUMEN, and AURORA AUNZO,
respondents.
Actions; Co-Ownership; Any one of the co-owners may bring an action
for ejectment; Article 487 of the Civil Code covers all kinds of actions for
the recovery of possession, including an accion publiciana and a
reivindicatory action; 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.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
_______________
* THIRD DIVISION.
687
,
co-owners, but if the judgment is adverse, the same cannot prejudice the
rights of the unimpleaded co-owners. 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.
Same; Same; The only exception to the rule that a party does not have
to implead his co-owners in an action for recovery of property 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.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.
Same; Same; Parties; The rule is settled that the non-joinder of
indispensable parties is not a ground for the dismissal of an action.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/peti-tioners failure to
comply therewith.
Baduel, Espina and Associates for petitioners.
Rodolfo C. Acido for private respondents.
689
,
NACHURA, J.:
Assailed in this petition for review on certiorari under Rule 45 of
the Rules of Court are the May 12, 2004 Decision1 of the Court of
Appeals (CA) in CA-G.R. CV No. 43085 and the December 1,
2004 Resolution2 denying reconsideration of the challenged
decision.
The pertinent facts and proceedings follow.
In 1974, petitioners3 filed a complaint for recovery of title to
property with damages before the Court of First Instance (now,
Regional Trial Court [RTC]) of Maasin, Southern Leyte against
respondents. The case was docketed as Civil Case No. R-1949.
The property subject of the case was a parcel of coconut land in
Canturing, Maasin, Southern Leyte, declared under Tax
Declaration No. 3587 in the name of petitioner Nieves with an area
of 2.6360 hectares.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
_______________
1 Penned by Associate Justice Arturo D. Brion (now a member of this Court), with
Associate Justices B.A. Adefuin-de la Cruz and Perlita J. Tria-Tirona, concurring;
Rollo, pp. 25-42.
2 Penned by Associate Justice Arturo D. Brion (now a member of this Court), with
Associate Justices Perlita J. Tria-Tirona and Rosalinda Asuncion-Vicente,
concurring; Rollo, pp. 43-46.
3 Substituted by their heirs. (Records, p. 87.)
4 Id., at pp. 1-2.
5 Id., at pp. 3-4.
6 Id., at pp. 13-19.
689
,
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-ownersJose, 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:
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
_______________
7 Id., at pp. 213-214.
8 Id., at pp. 213-218.
690
by themselves alone without joining the brothers and sisters of Nieves who
are as INDISPENSABLE as the latter in the final determination of the case.
Not impleading them, any judgment would have no effectiveness.
They are that indispensable that a final decree would necessarily affect their
rights, so that the Court cannot proceed without their presence. There are
abundant authorities in this regard. Thus
The general rule with reference to the making of parties in a civil action
requires the joinder of all indispensable parties under any and all conditions,
their presence being a sine qua non of the exercise of judicial power.
(Borlasa v. Polistico, 47 Phil. 345, 348) For this reason, our Supreme Court
has held that when it appears of record that there are other persons interested
in the subject matter of the litigation, who are not made parties to the action,
it is the duty of the court to suspend the trial until such parties are made
either plaintiffs or defendants. (Pobre, et al. v. Blanco, 17 Phil. 156). x x x
Where the petition failed to join as party defendant the person interested in
sustaining the proceeding in the court, the same should be dismissed. x x x
When an indispensable party is not before the court, the action should be
dismissed. (People, et al. v. Rodriguez, et al., G.R. Nos. L-14059-62,
September 30, 1959) (sic)
Parties in interest without whom no final determination can be had of an
action shall be joined either as plaintiffs or defendants. (Sec. 7, Rule 3, Rules
of Court). The burden of procuring the presence of all indispensable parties
is on the plaintiff. (39 Amjur [sic] 885). The evident purpose of the rule is to
prevent the multiplicity of suits by requiring the person arresting a right
against the defendant to include with him, either as co-plaintiffs or as co-
defendants, all persons standing in the same position, so that the whole
matter in dispute may be determined once and for all in one litigation.
(Palarca v. Baginsi, 38 Phil. 177, 178).
An indispensable party is a party who has such an interest in the
controversy or subject matter that a final adjudication cannot be made, in his
absence, without inquiring or affecting such interest; a party who has not
only an interest of such a nature that a final decree cannot be made without
affecting his interest or leaving the controversy in such a condi-
691
,
tion 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
_______________
9 Id., at pp. 216-218.
10 Supra note 1.
11 CA Rollo, pp. 103-111.
12 Supra note 2.
692
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
_______________
13 Baloloy v. Hular, G.R. No. 157767, September 9, 2004, 438 SCRA 80, 90-91.
14 Adlawan v. Adlawan, G.R. No. 161916, January 20, 2006, 479 SCRA 275, 283.
15 Rollo, pp. 54-59.
693
,
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/petitioners 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.
Ynares-Santiago (Chairperson), Carpio-Morales,** Chico-
Nazario and Peralta, JJ., concur.
Petition granted, case remanded to trial court with dispatch.
Note.Article 487 of the Civil Code is a departure from the

rule laid down in the case of Palarca v. Baguisi, 38 Phil. 177
(1918), which held that an action for ejectment must be brought by
all the co-owners. As explained by Tolentino, the law now allows a
co-owner to bring an action for ejectment, which covers all kinds
of actions for the recovery of possession, including forcible entry
and unlawful detainer, 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. (Mendoza vs. Coronel, 482 SCRA
353 [2006])
o0o
_______________

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QUIETING

the Court of Appeals in CA-GR CV No. 71137. The Court of

2) That defendant Elves Galarosa and all defendants occupying inside or in

Prescription cannot be invoked against JULIANA for the reason that as

M. Miranda, representing respondents, and Engr. Rosario B.

Judgment and resolution set aside. Case remanded to Regional

Note.The Torrens system was adopted in this country

RIZALINO, substituted by his heirs, JOSEFINA, ROLANDO

in CA-G.R. CV No. 53130 entitled, Rizalino, Ernesto, Leonora,

valid and binding with respect to the undivided proportionate

Executive Assistant of Sotero Lee, Inocencia Almo. On 1 April

corporation, petitioners informed the former of their intention to

Agreement or Contract to Sell with Damages before the Regional

effect that the deceased petitioner be substituted by his surviving

27 March 1996 in favor of the respondent, the dispositive portion

Unsatisfied, respondent appealed the said Decision before the

Aggrieved by the above-mentioned Decision, petitioners filed a

Hence, this Petition for Review on Certiorari.

case speak of the fact that petitioner Ernesto, together with

That the petitioners really had the intention to dispose of their

We also cannot sustain the allegation of the petitioners that

condition that before it can become valid and binding, a unanimous

In the instant case, the consideration of P100,000.00 paid by

The sum of P100,000.00 was part of the purchase price. Although

G.R. No. 166519. March 31, 2009.*

Revealed in the course of the trial was that petitioner Nieves,

motion of the party or on its own initiative at any stage of the

Petition granted, case remanded to trial court with dispatch.

Note.Article 487 of the Civil Code is a departure from the

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