Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-47378 February 27, 1987

MERCEDES U. DE GUZMAN, FRANCISCO P. DE GUZMAN (Deceased) Now His Heirs,

Represented by FELICITACION G. ROXAS (Daughter), petitioners,
vs.
THE HONORABLE COURT OF APPEALS (Sixth Division), ANTONIO M. AUSTRIA, ROMAN M.
UMALI and JULIANA U. TRINIDAD, respondents.

CRUZ, J.:

This is one of the many unfortunate cases where a dispute over property rights has marred the amity
that should characterize the Filipino family, which the Constitution to strengthen as a basic social
institution. Regrettably, the adage that blood is thicker than water is not always true. There are times
when that amalgam is diluted and so enervated by the venom of misunderstanding, if not cupidity
turning affectionate siblings into hostile strangers. Rejected then are memories of a more amiable
past when they sat together as children at the foot of a common parent, learning tender lessons of
selflessness and sharing.

This particular case arose from a complaint for partition of a 3-hectare parcel of unregistered land in
Talisay Batangas, filed in 1973 by the herein respondents against their sister and her husband, the
present petitioners. At the pre-trial conference, the parties stipulated that they were the sole heirs of
their mother, Teofila Manimtim, who died on November 7, 1923, without a will; that the said land was
sold by her two days before her death with right of repurchase within seven years; that the
defendants redeemed the said property on July 23, 1930; that the tax declaration on the land in favor
of Teofila Manimtim was then cancelled and another one was issued in the name of Francisco P. de
Guzman; and that since then the real estate taxes thereon had been paid by the defendants. On 1

the basis of this stipulation of facts, the following issues were submitted by the parties for resolution
by the trial court:

1. Whether under the deed of repurchase, the ownership of the land in dispute was in
the defendants or in an the heirs of the deceased Teofila Manimtim; and

2. Assuming arguendo that the repurchase by the defendants was made for and in
behalf of all the heirs, whether or not, as alleged by defendants, they became the
owners of the property by virtue of prescription through adverse, actual continuous,
public and exclusive possession and cultivation and whether or not, as alleged by
defendants, plaintiffs are guilty of laches and estoppel. 2

At the trial, the plaintiffs waived the presentation of their evidence in chief, relying on the stipulation
of facts, but later caned rebuttal witnesses. The defendants, for their part, sought to prove that the
land had been resold to them exclusively and that in any event they had acquired ownership over it
under the rules of prescription, laches and estoppel. 3
In its decision of December 11, 1974, the trial court held that the repurchase could not have been
made by the defendants by themselves alone because the right belonged in common to the heirs of
Teofila Manimtim. This was true even if it were assumed that the vendee a retro had intended to sell
back the land to the defendants only, as the repurchase was subject to the limitations of the Civil
Code and the stipulations in the original contract. Possession as a fact was not held exclusively by
the defendant spouses but shared with Antonio M. Austria, who remained in the disputed land until
1971. As for the tax declarations in the name of the defendants, these could not be considered proof
of ownership or, indeed, even of adverse possession. The trial court ruled that the cases invoked by
the defendants, to wit, Ecal v. Ecal, Director of Lands v. Abantao, and Austria v. Laurel, were not
4 5 6

applicable because of certain factual and legal differences.

Appealed to the Court of Appeals, the said decision was af t firmed in toto on September 29, 1977,
7

and the motion for reconsideration was denied in a resolution dated November 22, 1977. The
petitioners are now before us on certiorari.

In their first assignment of error, the petitioners fault the trial court for having allowed amendment of
the complaint that they claim changed the theory of the case after the answer had been filed. We
see no such change. The amendment was subject to the discretion of the court and this discretion
was not abused or improperly exercised because the amendment did not change the plaintiffs'
original posture. Their basic theory was that they were co-owners of the land in dispute, which was in
fact the reason they had filed their complaint for its partition, This theory was not substantially altered
by the amendment, which added to the original allegation that one of the plaintiffs administered,
cultivated and developed the property. They had never originally asserted that the defendants were
in exclusive possession of the disputed land, and the amendment did not so aver.

It was not necessary for the respondents to prove at the trial that they were entitled to the partition of
the disputed property as co-owners thereof by right of intestate succession. The reason is that these
matters were already covered by the above-mentioned stipulation of facts. The respondents were
willing to submit the issue for resolution by the trial court without presentation of further proof. The
stipulated facts were already deemed admitted by the parties.

The trial court was also correct in holding that the repurchase of the land in 1930 was subject to the
specified condition of the pacto de retro concluded in 1923, to wit, that the repurchase was to be
made by the vendor or her successors. Obviously, petitioner Mercedes de Guzman was not the only
successor, and her husband was not even an heir, of Teofila Manimtim. A sale during the period of
redemption to any other person other than the heirs of the deceased mother, as co-owners of the
subject land, could not have been made by the vendee a retro. Any of the co-owners could have
successfully invalidated such a transaction.

Concerning the petitioners' third assignment of error, we cannot over-emphasize the principle that
this Court is not a trier of facts. We review the factual findings of the lower courts only when there
appears to be a grave abuse of discretion or it is shown that they are not supported by substantial
evidence. We do not find such a flaw in this case. On the contrary, we note from the decision of the
trial court, which the respondent Court of Appeals has affirmed, that there was ample evidence of the
petitioners asserting an adverse and exclusive claim of ownership over the disputed land only from
1973. Before that date, they had acknowledged, expressly and tacitly the rights of the private
respondents as co-owners of the land in question.

The petitioners' claim of acquisitive prescription by reason of uninterrupted and adverse possession
since 1930, or for 43 years, must be rejected. Significantly, the petitioners make much of one of the
respondent's statement that they over did Rip Van Winkle "because Rip Van Winkle slept only for
twenty years ... but we slept for forty-three years," which they quote from the record. To say the
8
least, we find it censurable, as smacking of bad faith, that they did not, in fairness, continue with the
immediately succeeding sentence. The next statement read: "But we admit that we slept on the land,
not outside the land." Such suppression of a very meaningful qualification sharpens the contrast
9

between the credibilities of the parties and further weakens the petitioners' case against the
respondents.

Article 494 of the Civil Code provides that prescription does not run against a co-owner "so long as
he expressly or impliedly recognizes the co-ownership." As the adverse claim in this case was found
by the trial court to have been made by the petitioners only in May 1973, no acquisitive prescriptive
rights had as yet attached to the petitioners when the complaint for partition was filed against them in
June 1973. By the same token, laches or estoppel cannot be invoked against the private
respondents because they were not sleeping on their rights as long as the co-ownership continued
to be recognized by the herein petitioners. To quote from one of the respondents:

We, the plaintiffs (private respondents) in this case are prepared to admit that we
slept like Rip Van Winkle as Atty. Amador Roxas said, and we admit that we even
over did Rip Van Winkle because Rip Van Winkle slept only for twenty (20) years ...
but we slept for forty-three years. But we admit that we slept on the land, not outside
the land. 10

Elaborating, he declared:

We merely followed the custom of the people among brothers and sisters. It is not
usual to mistrust each other. That is the meaning of the statement that I made when I
said it is true we slept, but it is not the sleep that is understood by the defendants
(petitioners herein). We slept because we knew are along that the defendants
(petitioners) would not cheat us, would not deny us our right with respect to the land,
sir.11

In Ecal v. Ecal the Court of Appeals held through then Associate Justice Fred Ruiz Castro:
12

Under Article 1514 of the old Civil Code and Article 1612 of the new Civil Code, "if
several persons, jointly and in the same contract should sell an undivided immovable
with the right to repurchase, none of them may exercise this right for more than his
respective share. The same rule applies if the person who sold the immovable alone
has left several heirs, in which case each of the latter may only redeem the part
which he may have acquired." Should one of the co-owners or co-heirs succeed in
alone redeeming the whole property, such co-owner or co-heir shall be considered as
a mere trustee with respect to the shares of his co-owners or co-heirs; accordingly,
no prescription will lie against the right to any co- owner or co-heir to demand from
the redemptioner his respective share in the property redeemed, which share is
subject of course to a lien in favor of the redemptioner for the amount paid by him
corresponding to the value of the share.

The applicable provision was Article 1514 of the old Civil Code, which was reproduced verbatim in
the new Civil Code as Article 1612, reading as follows:

Art. 1612. If several persons, jointly and in the same contract, should sell an
undivided immovable with a right of repurchase, none of them may exercise this right
for more than his respective share.
 The same rule shall apply if the person who sold an immovable alone has left several
heirs, in which case each of the latter may only redeem the part which he may have
acquired.

There is nothing in the above provision suggesting that it is applicable only to registered land and
does not cover unregistered land like the property in question. Obviously, we cannot read any
distinction into the law where it is not obvious or even obviously intended. In fact, the private
respondents' case is even stronger than in Ecal because the redemptioner there repurchased the
property in his own right. In this case, there is the express admission from petitioner Mercedes de
Guzman that she was repurchasing the property in question not for herself alone but for the other
co-owners. 13

The Abantao case, also invoked by the petitioners, is not applicable because the factual
14

antecedents are different. There was no exercise in that case of the right of repurchase by one co-
owner that injured to the advantage of the other co-owners because the period for the redemption of
the property after it had been acquired by the government at a tax sale had already expired. Indeed,
it was only after twelve years that one of the heirs offered to, and actually did, buy back the property
from the government. She did so, however, in her own personal capacity and not by virtue of a right
of redemption, and certainly not as a co-owner. In the instant case, it has been established that
Mercedes de Guzman exercised the right of repurchase during the stipulated period of seven years
and in her capacity as a co-owner.

The case of Austria v. Laurel, is also not in point because although there was here a categorical
15

rejection by the defendant of the plaintiff's claim of ownership, the latter took all of seventeen
years to assert his right. By contrast, the petitioners in the instant case, according to the evidence
adduced, asserted their exclusive claim of ownership only in May 1973, or barely a month before the
partition case was instituted by the private respondents.

There are abundant authorities to support the holding of the court a quo that tax declarations are not
conclusive evidence of ownership or even claims of adverse possession. While it was not denied
16

that the petitioners paid the real estate taxes on the lance the payment came presumably from the
fruits thereof, which they occasionally shared with the private respondents. Significantly, it was also
established that respondent Austria stayed in the disputed land for many years and enjoyed some of
its proceeds as a matter of right and not by tolerance or charity on the part of the petitioners.
17

We are satisfied with the factual findings of the trial judge, as affirmed by the Court of Appeals, and
see no reason for disturbing then We also sustain the legal conclusions of the respondent court as a
correct interpretation and application of the pertinent law and jurisprudence.

What we see here is a deplorable attempt on the part of the petitioners to deprive the private
respondents of their lawful shares in the property derived by them from their mother, and through a
method hardly worthy of a sister. The argument that the private respondents have by their neglect
forfeited whatever rights they might have had feeble enough as it is becomes all the more
unseemly among members of the same family, where love normally takes precedence over law. We
are saddened by this regrettable case but, even so, are gratified by the results we reach today.
Happily, it proves once again that this is a Court not only of law but also of justice.

WHEREFORE, the appealed decision is affirmed in to with costs against the petitioners.

SO ORDERED.

Yap (Chairman), Narvasa, Melencio-Herrera, Feliciano, Gancayco and Sarmiento, JJ., concur.
SECOND DIVISION

HEIRS OF JUANITA PADILLA, represented by CLAUDIO PADILLA,

Petitioners,

- versus -

DOMINADOR MAGDUA,

Respondent.

G.R. No. 176858

Present:

CARPIO, J., Chairperson,

VELASCO, JR.,*

PERALTA,

BERSAMIN,** and

ABAD, JJ.

Promulgated:

September 15, 2010

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

DECISION

CARPIO, J.

The Case

Before the Court is a petition for review on certiorari[1] assailing the Orders dated 8
September 2006[2] and 13 February 2007[3] of the Regional Trial Court (RTC) of Tacloban
City, Branch 34, in Civil Case No. 2001-10-161.

The Facts

Juanita Padilla (Juanita), the mother of petitioners, owned a piece of land located in San
Roque, Tanauan, Leyte. After Juanitas death on 23 March 1989, petitioners, as legal heirs of
Juanita, sought to have the land partitioned. Petitioners sent word to their eldest brother
Ricardo Bahia (Ricardo) regarding their plans for the partition of the land. In a letter dated 5
June 1998 written by Ricardo addressed to them, petitioners were surprised to find out that
Ricardo had declared the land for himself, prejudicing their rights as co-heirs. It was then
discovered that Juanita had allegedly executed a notarized Affidavit of Transfer of Real
Property[4] (Affidavit) in favor of Ricardo on 4 June 1966 making him the sole owner of the
land. The records do not show that the land was registered under the Torrens system.

On 26 October 2001, petitioners filed an action with the RTC of Tacloban City, Branch 34, for
recovery of ownership, possession, partition and damages. Petitioners sought to declare
void the sale of the land by Ricardos daughters, Josephine Bahia and Virginia Bahia-Abas, to
respondent Dominador Magdua (Dominador). The sale was made during the lifetime of
Ricardo.

Petitioners alleged that Ricardo, through misrepresentation, had the land transferred in his
name without the consent and knowledge of his co-heirs. Petitioners also stated that prior to
1966, Ricardo had a house constructed on the land. However, when Ricardo and his wife
Zosima separated, Ricardo left for Inasuyan, Kawayan, Biliran and the house was leased to
third parties.

Petitioners further alleged that the signature of Juanita in the Affidavit is highly questionable
because on 15 May 1978 Juanita executed a written instrument stating that she would be
leaving behind to her children the land which she had inherited from her parents.

Dominador filed a motion to dismiss on the ground of lack of jurisdiction since the assessed
value of the land was within the jurisdiction of the Municipal Trial Court of Tanauan, Leyte.

In an Order dated 20 February 2006,[5] the RTC dismissed the case for lack of jurisdiction.
The RTC explained that the assessed value of the land in the amount of P590.00 was less
than the amount cognizable by the RTC to acquire jurisdiction over the case.[6]

Petitioners filed a motion for reconsideration. Petitioners argued that the action was not
merely for recovery of ownership and possession, partition and damages but also for
annulment of deed of sale. Since actions to annul contracts are actions beyond pecuniary
estimation, the case was well within the jurisdiction of the RTC.

Dominador filed another motion to dismiss on the ground of prescription.

In an Order dated 8 September 2006, the RTC reconsidered its previous stand and took
cognizance of the case. Nonetheless, the RTC denied the motion for reconsideration and
dismissed the case on the ground of prescription pursuant to Section 1, Rule 9 of the Rules
of Court. The RTC ruled that the case was filed only in 2001 or more than 30 years since the
Affidavit was executed in 1966. The RTC explained that while the right of an heir to his
inheritance is imprescriptible, yet when one of the co-heirs appropriates the property as his
own to the exclusion of all other heirs, then prescription can set in. The RTC added that since
prescription had set in to question the transfer of the land under the Affidavit, it would seem
logical that no action could also be taken against the deed of sale executed by Ricardos
daughters in favor of Dominador. The dispositive portion of the order states:

WHEREFORE, premises considered, the order of the Court is reconsidered in so far as the
pronouncement of the Court that it has no jurisdiction over the nature of the action. The
dismissal of the action, however, is maintained not by reason of lack of jurisdiction but by
reason of prescription.
SO ORDERED.[7]

Petitioners filed another motion for reconsideration which the RTC denied in an Order dated
13 February 2007 since petitioners raised no new issue.

Hence, this petition.

The Issue

The main issue is whether the present action is already barred by prescription.

The Courts Ruling

Petitioners submit that the RTC erred in dismissing the complaint on the ground of
prescription. Petitioners insist that the Affidavit executed in 1966 does not conform with the
requirement of sufficient repudiation of co-ownership by Ricardo against his co-heirs in
accordance with Article 494 of the Civil Code. Petitioners assert that the Affidavit became part
of public records only because it was kept by the Provincial Assessors office for real
property tax declaration purposes. However, such cannot be contemplated by law as a record
or registration affecting real properties. Petitioners insist that the Affidavit is not an act of
appropriation sufficient to be deemed as constructive notice to an adverse claim of
ownership absent a clear showing that petitioners, as co-heirs, were notified or had
knowledge of the Affidavit issued by their mother in Ricardos favor.

Respondent Dominador, on the other hand, maintains that Juanita, during her lifetime, never
renounced her signature on the Affidavit or interposed objections to Ricardos possession of
the land, which was open, absolute and in the concept of an owner. Dominador contends that
the alleged written instrument dated 15 May 1978 executed by Juanita years before she died
was only made known lately and conveys the possibility of being fabricated. Dominador adds
that the alleged highly questionable signature of Juanita on the Affidavit was only made an
issue after 35 years from the date of the transfer in 1966 until the filing of the case in 2001. As
a buyer in good faith, Dominador invokes the defense of acquisitive prescription against
petitioners.

At the outset, only questions of law may be raised in a petition for review on certiorari under
Rule 45 of the Rules of Court. The factual findings of the lower courts are final and
conclusive and may not be reviewed on appeal except under any of the following
circumstances: (1) the conclusion is grounded on speculations, surmises or conjectures; (2)
the inference is manifestly mistaken, absurd or impossible; (3) there is grave abuse of
discretion; (4) the judgment is based on a misapprehension of facts; (5) the findings of fact
are conflicting; (6) there is no citation of specific evidence on which the factual findings are
based; (7) the finding of absence of facts is contradicted by the presence of evidence on
record; (8) the findings of the Court of Appeals are contrary to those of the trial court; (9) the
Court of Appeals manifestly overlooked certain relevant and undisputed facts that, if properly
considered, would justify a different conclusion; (10) the findings of the Court of Appeals are
beyond the issues of the case; and (11) such findings are contrary to the admissions of both
parties.[8]

We find that the conclusion of the RTC in dismissing the case on the ground of prescription
based solely on the Affidavit executed by Juanita in favor of Ricardo, the alleged seller of the
property from whom Dominador asserts his ownership, is speculative. Thus, a review of the
case is necessary.
Here, the RTC granted the motion to dismiss filed by Dominador based on Section 1, Rule 9
of the Rules of Court which states:

Section 1. Defenses and objections not pleaded. Defenses and objections not pleaded either
in a motion to dismiss or in the answer are deemed waived. However, when it appears from
the pleadings or the evidence on record that the court has no jurisdiction over the subject
matter, that there is another action pending between the same parties for the same cause, or
that the action is barred by a prior judgment or by statute of limitations, the court shall
dismiss the case. (Emphasis supplied)

The RTC explained that prescription had already set in since the Affidavit was executed on 31
May 1966 and petitioners filed the present case only on 26 October 2001, a lapse of more than
30 years. No action could be taken against the deed of sale made in favor of Dominador
without assailing the Affidavit, and the action to question the Affidavit had already
prescribed.

After a perusal of the records, we find that the RTC incorrectly relied on the Affidavit alone in
order to dismiss the case without considering petitioners evidence. The facts show that the
land was sold to Dominador by Ricardos daughters, namely Josephine Bahia and Virginia
Bahia-Abas, during the lifetime of Ricardo. However, the alleged deed of sale was not
presented as evidence and neither was it shown that Ricardos daughters had any authority
from Ricardo to dispose of the land. No cogent evidence was ever presented that Ricardo
gave his consent to, acquiesced in, or ratified the sale made by his daughters to Dominador.
In its 8 September 2006 Order, the RTC hastily concluded that Ricardos daughters had legal
personality to sell the property:

On the allegation of the plaintiffs (petitioners) that Josephine Bahia and Virginia Bahia-Abas
had no legal personality or right to [sell] the subject property is of no moment in this case. It
should be Ricardo Bahia who has a cause of action against [his] daughters and not the
herein plaintiffs. After all, Ricardo Bahia might have already consented to or ratified the
alleged deed of sale.[9]

Also, aside from the Affidavit, Dominador did not present any proof to show that Ricardos
possession of the land had been open, continuous and exclusive for more than 30 years in
order to establish extraordinary acquisitive prescription.[10] Dominador merely assumed that
Ricardo had been in possession of the land for 30 years based on the Affidavit submitted to
the RTC. The petitioners, on the other hand, in their pleading filed with the RTC for recovery
of ownership, possession, partition and damages, alleged that Ricardo left the land after he
separated from his wife sometime after 1966 and moved to another place. The records do not
mention, however, whether Ricardo had any intention to go back to the land or whether
Ricardos family ever lived there.

Further, Dominador failed to show that Ricardo had the land declared in his name for taxation
purposes from 1966 after the Affidavit was executed until 2001 when the case was filed.
Although a tax declaration does not prove ownership, it is evidence of claim to possession of
the land.

Moreover, Ricardo and petitioners are co-heirs or co-owners of the land. Co-heirs or co-
owners cannot acquire by acquisitive prescription the share of the other co-heirs or co-
owners absent a clear repudiation of the co-ownership, as expressed in Article 494 of the
Civil Code which states:
Art. 494. x x x No prescription shall run in favor of a co-owner or co-heir against his co-
owners or co-heirs as long as he expressly or impliedly recognizes the co-ownership.

Since possession of co-owners is like that of a trustee, in order that a co-owners possession
may be deemed adverse to the cestui que trust or other co-owners, the following requisites
must concur: (1) that he has performed unequivocal acts of repudiation amounting to an
ouster of the cestui que trust or other co-owners, (2) that such positive acts of repudiation
have been made known to the cestui que trust or other co-owners, and (3) that the evidence
thereon must be clear and convincing.[11]

In the present case, all three requisites have been met. After Juanitas death in 1989,
petitioners sought for the partition of their mothers land. The heirs, including Ricardo, were
notified about the plan. Ricardo, through a letter dated 5 June 1998, notified petitioners, as
his co-heirs, that he adjudicated the land solely for himself. Accordingly, Ricardos interest in
the land had now become adverse to the claim of his co-heirs after repudiating their claim of
entitlement to the land. In Generosa v. Prangan-Valera,[12] we held that in order that title may
prescribe in favor of one of the co-owners, it must be clearly shown that he had repudiated
the claims of the others, and that they were apprised of his claim of adverse and exclusive
ownership, before the prescriptive period begins to run.

However, in the present case, the prescriptive period began to run only from 5 June 1998, the
date petitioners received notice of Ricardos repudiation of their claims to the land. Since
petitioners filed an action for recovery of ownership and possession, partition and damages
with the RTC on 26 October 2001, only a mere three years had lapsed. This three-year period
falls short of the 10-year or 30-year acquisitive prescription period required by law in order to
be entitled to claim legal ownership over the land. Thus, Dominador cannot invoke
acquisitive prescription.

Further, Dominadors argument that prescription began to commence in 1966, after the
Affidavit was executed, is erroneous. Dominador merely relied on the Affidavit submitted to
the RTC that Ricardo had been in possession of the land for more than 30 years. Dominador
did not submit any other corroborative evidence to establish Ricardos alleged possession
since 1966. In Heirs of Maningding v. Court of Appeals,[13] we held that the evidence relative
to the possession, as a fact, upon which the alleged prescription is based, must be clear,
complete and conclusive in order to establish the prescription. Here, Dominador failed to
present any other competent evidence to prove the alleged extraordinary acquisitive
prescription of Ricardo over the land. Since the property is an unregistered land, Dominador
bought the land at his own risk, being aware as buyer that no title had been issued over the
land. As a consequence, Dominador is not afforded protection unless he can manifestly
prove his legal entitlement to his claim.

With regard to the issue of the jurisdiction of the RTC, we hold that the RTC did not err in
taking cognizance of the case.

Under Section 1 of Republic Act No. 7691 (RA 7691),[14] amending Batas Pambansa Blg. 129,
the RTC shall exercise exclusive jurisdiction on the following actions:
Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the Judiciary
Reorganization Act of 1980, is hereby amended to read as follows:

Sec. 19. Jurisdiction in civil cases. Regional Trial Courts shall exercise exclusive original
jurisdiction.

(1) In all civil actions in which the subject of the litigation is incapable of pecuniary
estimation;

(2) In all civil actions which involve the title to, or possession of, real property, or any interest
therein, where the assessed value of the property involved exceeds Twenty Thousand Pesos
(P20,000.00) or, for civil actions in Metro Manila, where such value exceeds Fifty Thousand
Pesos (P50,000.00) except actions for forcible entry into and unlawful detainer of lands or
buildings, original jurisdiction over which is conferred upon the Metropolitan Trial Courts,
Municipal Trial Courts, and Municipal Circuit Trial Courts; x x x

On the other hand, Section 3 of RA 7691 expanded the jurisdiction of the Metropolitan Trial
Courts, Municipal Trial Courts and Municipal Circuit Trial Courts over all civil actions which
involve title to or possession of real property, or any interest, outside Metro Manila where the
assessed value does not exceed Twenty thousand pesos (P20,000.00). The provision states:

Section 3. Section 33 of the same law is hereby amended to read as follows:

Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit
Trial Courts in Civil Cases. - Metropolitan Trial Courts, Municipal Trial Courts, and Municipal
Trial Circuit Trial Courts shall exercise:

(3) Exclusive original jurisdiction in all civil actions which involve title to, or possession of,
real property, or any interest therein where the assessed value of the property or interest
therein does not exceed Twenty thousand pesos (P20,000.00) or, in civil actions in Metro
Manila, where such assessed value does not exceed Fifty thousand pesos (P50,000.00)
exclusive of interest, damages of whatever kind, attorneys fees, litigation expenses and
costs: Provided, That in cases of land not declared for taxation purposes, the value of such
property shall be determined by the assessed value of the adjacent lots.

In the present case, the records show that the assessed value of the land was P590.00
according to the Declaration of Property as of 23 March 2000 filed with the RTC. Based on the
value alone, being way below P20,000.00, the MTC has jurisdiction over the case. However,
petitioners argued that the action was not merely for recovery of ownership and possession,
partition and damages but also for annulment of deed of sale. Since annulment of contracts
are actions incapable of pecuniary estimation, the RTC has jurisdiction over the case.[15]

Petitioners are correct. In Singson v. Isabela Sawmill,[16] we held that:

In determining whether an action is one the subject matter of which is not capable of
pecuniary estimation this Court has adopted the criterion of first ascertaining the nature of
the principal action or remedy sought. If it is primarily for the recovery of a sum of money, the
claim is considered capable of pecuniary estimation, and whether jurisdiction is in the
municipal courts or in the courts of first instance would depend on the amount of the claim.
However, where the basic issue is something other than the right to recover a sum of money,
where the money claim is purely incidental to, or a consequence of, the principal relief
sought, this Court has considered such actions as cases where the subject of the litigation
may not be estimated in terms of money, and are cognizable by courts of first instance (now
Regional Trial Courts).

When petitioners filed the action with the RTC they sought to recover ownership and
possession of the land by questioning (1) the due execution and authenticity of the Affidavit
executed by Juanita in favor of Ricardo which caused Ricardo to be the sole owner of the
land to the exclusion of petitioners who also claim to be legal heirs and entitled to the land,
and (2) the validity of the deed of sale executed between Ricardos daughters and Dominador.
Since the principal action sought here is something other than the recovery of a sum of
money, the action is incapable of pecuniary estimation and thus cognizable by the RTC. Well-
entrenched is the rule that jurisdiction over the subject matter of a case is conferred by law
and is determined by the allegations in the complaint and the character of the relief sought,
irrespective of whether the party is entitled to all or some of the claims asserted.[17]

In sum, we find that the Affidavit, as the principal evidence relied upon by the RTC to dismiss
the case on the ground of prescription, insufficiently established Dominadors rightful claim
of ownership to the land. Thus, we direct the RTC to try the case on the merits to determine
who among the parties are legally entitled to the land.

WHEREFORE, we GRANT the petition. We REVERSE AND SET ASIDE the Orders dated 8
September 2006 and 13 February 2007 of the Regional Trial Court of Tacloban City, Branch 34
in Civil Case No. 2001-10-161.

SO ORDERED.
FIRST DIVISION

PAZ GALVEZ, CARLOS TAM, and TYCOON PROPERTIES, INC.,

Petitioners,

- versus -

HON. COURT OF APPEALS and PORFIRIO GALVEZ,

Respondents.

G.R. No. 157954

Present:

PANGANIBAN, C.J.

Chairperson,

YNARES-SANTIAGO,

AUSTRIA-MARTINEZ,

CALLEJO, SR., and

CHICO-NAZARIO, JJ.

Promulgated:

March 24, 2006

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

DECISION

CHICO-NAZARIO, J.:

The factual antecedents of this case reveal that Timotea F. Galvez died intestate on 28 April 1965.[1] She
left behind her children Ulpiano and Paz Galvez. Ulpiano, who died on 24 July 1959,[2] predeceased
Timotea and was survived by his son, Porfirio Galvez. Timotea left a parcel of land situated at
Pagdaraoan, San Fernando, La Union, covered by Tax Declaration No. 39645[3] and more particularly
described as follows:

A parcel of unirrigated riceland situated at Brgy. Pagdaraoan, San Fernando, La Union under Tax
Declaration No. 39645, series of 1957, with an area of 4,304.5 square meters, more or less bounded on
the North by Valentin and Isidoro Sobrepea; on the East by Nicolas Ducusin; on the South by Victor
Ducusin; and on the West by the National Highway.[4]
Considering that all the other compulsory heirs of Timotea already received their respective shares,[5]
the property passed by succession, both to Timoteas daughter, Paz Galvez, and to the formers grandson,
Porfirio, the latter succeeding by right of representation as the son of Ulpiano.

Porfirio Galvez was surprised to discover that on 4 May 1970,[6] Paz Galvez executed an affidavit of
adjudication stating that she is the true and lawful owner of the said property. Tax Declarations No.
15749[7] and No. 12342[8] were then issued in the name of Paz Galvez. On 22 June 1992, without the
knowledge and consent of Porfirio Galvez, Paz Galvez sold the property to Carlos Tam for a consideration
of Ten Thousand Pesos (P10,000.00) by way of a Deed of Absolute Sale.[9] Carlos Tam thereafter filed an
application for registration of said parcel of land under Land Registration Case No. 2278 before the
Regional Trial Court (RTC) of San Fernando, La Union. On 21 January 1994, Original Certificate of Title No.
0-2602 of the Registry of Deeds of San Fernando, La Union, was issued in the name of Carlos Tam.[10]
Subsequently, on 27 September 1994, Carlos Tam sold the property to Tycoon Properties, Inc. through a
Deed of Absolute Sale executed by the former in favor of the latter.[11] As a result, the title of Carlos Tam
over the property was cancelled and a new one, Transfer Certificate of Title (TCT) No. T-40390[12] was
issued in favor of Tycoon Properties, Inc.

On 12 May 1994, Porfirio Galvez filed Civil Case No. 4895 before the RTC, Branch 26, of San Fernando, La
Union, for Legal Redemption with Damages and Cancellation of Documents[13] against Paz Galvez and
Carlos Tam. The Complaint was later amended to implead as additional defendant, Tycoon Properties,
Inc.[14] When Tycoon Properties, Inc. filed its Answer, it also filed a cross-claim against Carlos Tam. In a
decision[15] dated 15 December 1999, the trial court held:

WHEREFORE, in view of the foregoing, judgment is hereby rendered as follows:

1. declaring null and void the Affidavit of Adjudication executed by defendant PAZ GALVEZ
dated May 4, 1970;

2. declaring null and void the Deed of Absolute Sale over the property originally covered by Tax
Declaration No. 39645 executed by PAZ GALVEZ in favor of CARLOS TAM;

3. the Original Certificate of Title No. 0-2602, in the name of CARLOS TAM be considered
cancelled;

4. The Deed of Sale between CARLOS TAM and TYCOON PROPERTIES, Inc. is hereby ordered
cancelled with Transfer Certificate of Title No. T-40390, being null and void;

5. That CARLOS TAM shall receive from the Clerk of Court, San Fernando City, La Union the
amount of Ten Thousand (P10,000.00) pesos, as redemption of the property pursuant to law;

6. That the property covered by Transfer Certificate of Title No. T-40390, be reconveyed (whole
property) to PORFIRIO GALVEZ, he having redeemed one-half () of the property from CARLOS TAM and
other half of the property belongs to him as co-heir of TIMOTEA FLORES GALVEZ.
 7. Defendant PAZ GALVEZ and CARLOS TAM shall be liable solidarily for the actual damages of
the plaintiff in the amount of Ten Thousand (P10,000.00) pesos as well as moral damages in the amount
of Fifty Thousand (P50,000.00) Pesos, together with attorney's fees in the amount of Ten Thousand
(P10,000.00) Pesos acceptance fee and Five Hundred (P500.00) per appearance fee.[16]

Petitioners Paz Galvez, Carlos Tam and Tycoon Properties, Inc. appealed the decision to the Court of
Appeals.[17] In a decision of the Court of Appeals dated 28 August 2002,[18] the appellate court
resolved to affirm the decision of the trial court. Petitioners filed a Motion for Reconsideration which
was denied in a resolution dated 14 April 2003.[19]

Not contented with the decision of the Court of Appeals, petitioners are now before this Court via
Petition for Review on Certiorari under Rule 45 of the Rules of Court.

Petitioners Carlos Tam and Tycoon Properties, Inc. separately filed their Memorandum[20] but raised the
same issues to wit:

THE HONORABLE COURT OF APPEALS ERRED WHEN IT REFUSED TO HOLD THAT RESPONDENT'S CLAIM
OVER THE SUBJECT PROPERTY, WHICH IS BASED ON AN IMPLIED TRUST, HAS ALREADY PRESCRIBED
BECAUSE THE ACTION WAS FILED 24 YEARS AFER PETITIONER REPUDIATED THE SAID TRUST.

II

THE HONORABLE COURT OF APPEALS ERRED WHEN IT FAILED TO RECOGNIZE THAT RESPONDENT'S
CLAIM IS ALREADY BARRED BY LACHES BECAUSE HE FAILED TO ASSERT HIS ALLEGED RIGHT FOR ALMOST
TWENTY FOUR (24) YEARS.

III

THE HONORABLE COURT ERRED IN FAILING TO RECOGNIZE THAT PETITIONERS [CARLOS TAM AND]
TYCOON PROPERTIES ARE BUYERS IN GOOD FAITH AND FOR VALUE AND HAS THE RIGHT TO RELY ON THE
FACE OF THE TITLE.[21]

In assailing the decisions of the trial and appellate courts, petitioners cite Article 1451[22] of the Civil
Code and claim that an implied or constructive trust which prescribes in ten years, was established
between Paz Galvez and Porfirio Galvez. It is petitioners unflinching stand that the implied trust was
repudiated when Paz Galvez executed an Affidavit of Self-Adjudication on 4 May 1970, registered the
same before the Register of Deeds of La Union on 4 June 1970 and secured a new tax declaration in her
name. From 4 May 1970 to the time the complaint was filed on 12 May 1994, 24 years have passed,
hence, the action is clearly barred both by prescription and laches.

We find the petition bereft of merit.

Ostensibly, this case is governed by the rules on co-ownership[23] since both Paz Galvez and Porfirio
Galvez are obviously co-owners of the disputed property having inherited the same from a common
ancestor. Article 494 of the Civil Code provides that [a] prescription shall not run in favor of a co-owner
or co-heir against his co-owners or co-heirs as long as he expressly or impliedly recognizes the co-
ownership.

It is a fundamental principle that a co-owner cannot acquire by prescription the share of the other co-
owners, absent any clear repudiation of the co-ownership.[24] In Santos v. Santos,[25] citing the earlier
case of Adille v. Court of Appeals,[26] this Court found occasion to rule that:

Prescription, as a mode of terminating a relation of co-ownership, must have been preceded by

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

For title to prescribe in favor of a co-owner there must be a clear showing that he has repudiated the
claims of the other co-owners and the latter has been categorically advised of the exclusive claim he is
making to the property in question. The rule requires a clear repudiation of the co-ownership duly
communicated to the other co-owners.[27] It is only when such unequivocal notice has been given that
the period of prescription will begin to run against the other co-owners and ultimately divest them of
their own title if they do not seasonably defend it.[28]

To sustain a plea of prescription, it must always clearly appear that one who was originally a joint owner
has repudiated the claims of his co-owners, and that his co-owners were apprised or should have been
apprised of his claim of adverse and exclusive ownership before the alleged prescriptive period began to
run.[29]

In Salvador v. Court of Appeals,[30] it was held that the possession of a co-owner is like that of a trustee
and shall not be regarded as adverse to the other co-owner but in fact beneficial to all of them.

The case of Huang v. Court of Appeals[31] is instructive on the creation of trust relationships.

Trust is a fiduciary relationship with respect to property which involves the existence of equitable duties
imposed upon the holder of the title to the property to deal with it for the benefit of another. A person
who establishes a trust is called the trustor; one in whom confidence is reposed as regards property for
the benefit of another person is known as the trustee; and the person for whose benefit the trust has
been created is referred to as the beneficiary or cestui que trust. Trust is either express or implied.
Express trust is created by the intention of the trustor or of the parties. Implied trust comes into being by
operation of law. The latter kind is either constructive or resulting trust. A constructive trust is imposed
where a person holding title to property is subject to an equitable duty to convey it to another on the
ground that he would be unjustly enriched if he were permitted to retain it. The duty to convey the
property arises because it was acquired through fraud, duress, undue influence or mistake, or through
breach of a fiduciary duty, or through the wrongful disposition of anothers property. On the other hand,
a resulting trust arises where a person makes or causes to be made a disposition of property under
circumstances which raise an inference that he does not intend that the person taking or holding the
property should have the beneficial interest in the property. It is founded on the presumed intention of
the parties, and as a general rule, it arises where, and only where such may be reasonably presumed to
be the intention of the parties, as determined from the facts and circumstances existing at the time of
the transaction out of which it is sought to be established.

Acts which may be considered adverse to strangers may not be considered adverse insofar as co-owners
are concerned. Thus, Salvador v. Court of Appeals reiterated what acts constitute proof of exclusive
ownership amounting to repudiation, emphasizing that the act must be borne out of clear and
convincing evidence of acts of possession which unequivocably amounts to an ouster or deprivation of
the right of the other co-owner. The case of Pangan v. Court of Appeals[32] enumerated the following as
constituting acts of repudiation:

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

The issuance of the certificate of title would constitute an open and clear repudiation of any trust, and
the lapse of more than 20 years, open and adverse possession as owner would certainly suffice to vest
title by prescription.

An action for the reconveyance of land based on implied or constructive trust prescribes within 10 years.
And it is from the date of the issuance of such title that the effective assertion of adverse title for
purposes of the statute of limitation is counted.

The prescriptive period may only be counted from the time petitioners repudiated the trust relation in
1955 upon the filing of the complaint for recovery of possession against private respondents so that the
counterclaim of the private respondents contained in their amended answer wherein they asserted
absolute ownership of the disputed realty by reason of the continuous and adverse possession of the
same is well within the 10-year prescriptive period.

There is clear repudiation of a trust when one who is an apparent administrator of property causes the
cancellation of the title thereto in the name of the apparent beneficiaries and gets a new certificate of
title in his own name.

It is only when the defendants, alleged co-owners of the property in question, executed a deed of
partition and on the strength thereof obtained the cancellation of the title in the name of their
predecessor and the issuance of a new one wherein they appear as the new owners of a definite area
each, thereby in effect denying or repudiating the ownership of one of the plaintiffs over his alleged
share in the entire lot, that the statute of limitations started to run for the purposes of the action
instituted by the latter seeking a declaration of the existence of the co-ownership and of their rights
thereunder.
In this case, we find that Paz Galvez effected no clear and evident repudiation of the co-ownership. The
execution of the affidavit of self-adjudication does not constitute such sufficient act of repudiation as
contemplated under the law as to effectively exclude Porfirio Galvez from the property. This Court has
repeatedly expressed its disapproval over the obvious bad faith of a co-heir feigning sole ownership of
the property to the exclusion of the other heirs essentially stating that one who acts in bad faith should
not be permitted to profit from it to the detriment of others. In the cases of Adille[33] and Pangan[34]
where, as in this case, a co-heir was excluded from his legal share by the other co-heir who represented
himself as the only heir, this Court held that the act of exclusion does not constitute repudiation.

On the issue of prescription, while admittedly prescription operates as a bar to recovery of property, the
ten-year period commenced to run from date of registration. In this case, Carlos Tam obtained his title to
the property on 21 January 1994. Since the complaint of Porfirio Galvez was filed on 12 May 1994, the
same was well within the ten-year period to file the action.

On the matter of laches, it is hornbook doctrine that laches is a creation of equity and its application is
controlled by equitable considerations. Laches cannot be used to defeat justice or perpetrate fraud and
injustice.[35] Neither should its application be used to prevent the rightful owners of a property from
recovering what has been fraudulently registered in the name of another.[36] The equitable remedy of
laches is, therefore, unavailing in this case.

Finally, petitioners claim that if the sale would be nullified, the nullification should extend only to the
one-half share of Porfirio Galvez[37] but not to the share of Paz Galvez, who, by her overt act of selling
the property, manifested her intention to dispose of her part.

Notably, Porfirio Galvezs complaint was captioned legal redemption with damages, cancellation of
documents and reconveyance of share.[38] In his prayer, he sought for the reconveyance of his one-half
share in the property and at the same time be subrogated to the other half pertaining to Paz Galvez and
sold to Carlos Tam after reimbursement of the amount which the latter paid for the property.

The pertinent provisions of the Civil Code on legal redemption are as follows:

ART. 1619. Legal redemption is the right to be subrogated, upon the same terms and conditions
stipulated in the contract, in the place of one who acquires a thing by purchase or dation in payment, or
by any other transaction whereby ownership is transmitted by onerous title.

ART. 1620. A co-owner of a thing may exercise the right of redemption in case the shares of all the other
co-owners or of any of them, are sold to a third person. If the price of the alienation is grossly excessive,
the redemptioner shall pay only a reasonable one.

Should two or more co-owners desire to exercise the right of redemption, they may only do so in
proportion to the share they may respectively have in the thing owned in common.
In the case of Hermoso v. Court of Appeals,[39] this Court, in interpreting the provision of the law on
legal redemption, held:

The purpose of Article 1067 (of the old Civil Code, now Article 1088 of the present Civil Code) is to keep
strangers to the family out of a joint ownership, if, as is often the case, the presence of outsiders be
undesirable and the other heir or heirs be willing and in a position to repurchase the share sold (De Jesus
vs. Manlapus, 81 Phil. 144). While there should be no question that an heir may dispose his right before
partition (Rivero vs. Serrano [CA] 46 O.G. 642; Wenceslao vs. Calimon, 46 Phil. 906; Hernaez vs. Hernaez,
32 Phil. 214), a co-heir would have had to pay only the price for which the vendee acquired it (Hernaez
vs. Hernaez, Ibid.).

It is a one-way street. It is always in favor of the redemptioner since he can compel the vendee to sell to
him but he cannot be compelled by the vendee to buy the alienated property.

In another case, [40] this Court reiterated that:

Legal redemption is in the nature of a privilege created by law partly for reasons of public policy and
partly for the benefit and convenience of the redemptioner, to afford him a way out of what might be a
disagreeable or [an] inconvenient association into which he has been thrust. (10 Manresa, 4th Ed., 317.)
It is intended to minimize co-ownership. The law grants a co-owner the exercise of the said right of
redemption when the shares of the other owners are sold to a third person.

The rule on redemption is liberally construed in favor of the original owner of the property and the
policy of the law is to aid rather than defeat him in the exercise of his right of redemption.[41]

Thus, petitioners cannot be accommodated in this respect and we agree with the trial court when it
held:

The provision of Art. 1088 of the Civil Code of the Philippines is very clear on the matter.

Art. 1088, provides: Should any of the heirs sell his hereditary rights to a stranger before the partition,
any or all the co-heirs may be subrogated to the rights of the purchaser by reimbursing him for the price
of the sale, provided they do so within the period of one (1) month from the time they were notified in
writing of the sale by the vendor.

There was no written notice sent to Porfirio Galvez by Paz Galvez when she sold her share over the land
to Carlos Tam. Porfirio Galvez only discovered on May 12, 1994 that the land was sold to Carlos Tam. Art.
1620, Civil Code of the Philippines, provides:

Art. 1620. A co-owner of a thing may exercise the right of redemption in case the share of all the other
co-owners or any of them are sold to a third person. If the price of the alienation is grossly excessive, the
redemptioner shall pay only a reasonable one.
No written notice of the sale was given by Paz Galvez (vendor) to Porfirio Galvez, the co-owner as
required under Art. 1623 of the Civil Code. The written notice is mandatory. Hence, the right to redeem
commenced when plaintiff sought to exercise it by instituting the complaint in the instant case on June
12, 1994. The complaint of legal redemption may be filed even several years after the consummation of
sale (Zosima Verdad vs. Court of Appeals, et al.; G.R. No. 10972, April 29, 1996).[42]

As to petitioners Carlos Tam and Tycoon Properties, Inc.s claim that they are buyers in good faith, same
fails to persuade.

A purchaser in good faith and for value is one who buys the property without notice that some other
person has a right to or interest in such property and pays its fair price before he has notice of the
adverse claims and interest of another person in the same property. So it is that the honesty of intention
which constitutes good faith implies a freedom from knowledge of circumstances which ought to put a
person on inquiry.[43]

Suffice it to state that both the trial and appellate courts found otherwise as Tam did not exert efforts to
determine the previous ownership of the property in question[44] and relied only on the tax
declarations in the name of Paz Galvez.[45] It must be noted that Carlos Tam received a copy of the
summons and the complaint on 22 September 1994. This notwithstanding, he sold the property to
Tycoon Properties, Inc. on 27 September 1994. Significantly, Carlos Tam is also an owner of Tycoon
Properties, Inc. to the extent of 45%.[46] A notice of lis pendens dated 8 July 1997 filed with the Registry
of Deeds of the Province of La Union was inscribed on TCT No. T- 40390.[47] Despite the inscription,
Tycoon Properties, Inc. mortgaged the land to Far East Bank and Trust Company for the sum of
P11,172,600.[48] All these attendant circumstances negate petitioners claim of good faith.

WHEREFORE, premises considered, the decision of the Court of Appeals dated 28 August 2002 and its
Resolution dated 14 April 2003 are AFFIRMED. Costs against petitioners.

SO ORDERED.
 THIRD DIVISION

April 13, 2016

G.R. No. 194260

HEIRS OF FELICIANO YAMBAO, namely: CHONA YAMBAO, JOEL YAMBAO, WILLY YAMBAO,
LENNIE YAMBAO and RICHARD YAMBAO, and all other persons acting under their
authority, Petitioners,
vs.
HEIRS OF HERMOGENES YAMBAO, namely: ELEANOR YAMBAO, ALBERTO YAMBAO,
DOMINIC YAMBAO, ASESCLO YAMBAO, GERALD DANTIC and MARIA PILAR YAMBAO, who
are all represented by their Attorney-in-Fact, MARIA PILAR YAMBAO, Respondents.

RESOLUTION

REYES, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to annul and
1

set aside the Decision2 dated October 22, 2010 issued by the Court of Appeals (CA) in CA-G.R. CV
No. 92755, which reversed and set aside the Decision dated December 23, 2008 of the Regional
Trial Court (RTC) of Iba, Zambales, Branch 69, in SP. Civil Case No. RTC-88-I.

Facts

The subject of this case is a parcel of land located in Barangay Bangan, Botolan, Zambales, which
was originally possessed by Macaria De Ocampo (Macaria). Macaria's nephew, Hermogenes
Yambao (Hermogenes ), acted as the administrator of the property and paid realty taxes therefor.
Hermogenes has eight children, namely: Ulpiano, Dominic, Teofilo, Feliciano, Asesclo, Delia, Amelia,
and Melinda, all surnamed Yambao.3

After Hermogenes died, it was claimed that all of his heirs were free to pick and harvest from the
fruit-bearing trees planted on the subject property. Eleanor Yambao (Eleanor), Ulpiano's daughter,
even constructed a house on the subject property. However, sometime in 2005, the communal and
mutual use of the subject property by the heirs of Hermogenes ceased when the heirs of Feliciano,
herein petitioners, prohibited them from entering the property. The heirs of Feliciano even ejected
Eleanor from the subject property. 4

This prompted the heirs of Hermogenes, herein respondents, to file with the RTC a complaint for
partition, declaration of nullity of title/documents, and damages against the heirs of Feliciano. The
heirs of Hermogenes alleged that they and the heirs of Feliciano are co-owners of the subject
property, having inherited the right thereto from Hermogenes. 5
The heirs of Feliciano denied the allegations of the heirs of Hermogenes and claimed that their
father, Feliciano, was in possession of the subject property in the concept of owner since time
immemorial. Accordingly, Feliciano was awarded a free patent thereon for which Original Certificate
of Title (OCT) No. P-10737 was issued. They also averred that the cause of action in the complaint
filed by the heirs of Hermogenes, which questioned the validity of OCT No. P-10737, prescribed after
the lapse of one year from its issuance on November 29, 1989. 6

Ruling of the RTC

On December 23, 2008, the RTC rendered a Decision dismissing the complaint filed by the heirs of
Hermogenes. The RTC opined that the heirs of Hermogenes failed to show that the subject property
is owned by Macaria, stating that tax declarations and receipts in Macaria's name are not conclusive
evidence of ownership. The RTC further held that even if Macaria owned the subject property, the
heirs of Hermogenes failed to show that Hermogenes had the right to succeed over the estate of
Macaria.

Ruling of the CA

On appeal,. the CA, in its Decision 7 dated October 22, 2010, reversed and set aside the RTC's
Decision dated December 23, 2008. The CA found that the RTC, in hastily dismissing the complaint
for partition, failed to determine first whether the subject property is indeed co-owned by the heirs of
Hermogenes and the heirs of Feliciano. The CA pointed out that:

[A] review of the records of the case shows that in Feliciano's application for free patent, he
acknowledged that the source of his claim of possession over the subject property was
Hermogenes's possession of the real property in peaceful, open, continuous, and adverse manner
and more importantly, in the concept of an owner, since 1944. Feliciano's claim of sole possession in
his application for free patent did not therefore extinguish the fact of co-ownership as claimed by the
children of Hermogenes. (Citation omitted and emphasis deleted)
8

Accordingly, the CA, considering that the parties are co-owners of the subject property, ruled that the
RTC should have conducted the appropriate proceedings for partition. 9

Aggrieved, the heirs of Feliciano filed with the Court this petition for review alleging that the CA erred
in ruling that there is co-ownership between them and the heirs of Hermogenes. The heirs of
Feliciano likewise averred that the CA also erred in ordering the partition of the subject property
since it amounts to a collateral attack on the validity of OCT No. P-10737. 10

Ruling of the Court

The petition is denied.

As pointed out by the CA, the R TC overlooked the fact that the subject property is co-owned by the
parties herein, having inherited the same from Hermogenes. Feliciano's free patent application
indicated that he merely tacked his possession of the subject property from Hermogenes, his father,
who held the property in peaceful, open, continuous, and adverse manner in the concept of an
owner since 1944. This is an implicit recognition of the fact that Feliciano merely co-owns the subject
property with the other heirs of Hermogenes. Indeed, the heirs of Feliciano have not presented any
evidence that would show that Hermogenes bequeathed the subject property solely to Feliciano.
A co-ownership is a form of trust, with each owner being a trustee for each other. Mere actual
possession by one will not give rise to the inference that the possession was adverse because a co-
owner is, after all, entitled to possession of the property. Thus, as a rule, prescription does not run in
favor of a co-heir or co-owner as long as he expressly or impliedly recognizes the co-ownership; and
he cannot acquire by prescription the share of the other co-owners, absent a clear repudiation of the
co-ownership. An action to demand partition among co-owners is imprescriptible, and each co-owner
may demand at any time the partition of the common property. 11

Prescription may nevertheless run against a co-owner if there is adverse, open, continuous and
exclusive possession of the co-owned property by the other co-owner/s. In order that a co-owners
1wphi1

possession may be deemed adverse to the cestui que trust or other co-owners, the following
requisites must concur: (1) that he has performed unequivocal acts of repudiation amounting to an
ouster of the cestui que trust or other co-owners; (2) that such positive acts of repudiation have been
made known to the cestui que trust or other co-owners; and (3) that the evidence thereon must be
clear and convincing. 12

The issuance of the certificate of title would constitute an open and clear repudiation of any trust. In 13

such a case, an action to demand partition among co-owners prescribes in 10 years, the point of
reference being the date of the issuance of certificate of title over the property. But this rule applies
only when the plaintiff is not in possession of the property, since if a person claiming to be the owner
thereof is in actual possession of the property, the right to demand partition does not prescribe. 14

Although OCT No. P-10737 was registered in the name of Feliciano on November 29, 1989, the
prescriptive period within which to demand partition of the subject property, contrary to the claim of
the heirs of Feliciano, did not begin to run. At that time, the heirs of Hermogenes were still in
possession of the property. It was only in 2005 that the heirs of Feliciano expressly prohibited the
heirs of Hermogenes from entering the property. Thus, as aptly ruled by the CA, the right of the heirs
of Hermogenes to demand the partition of the property had not yet prescribed. Accordingly, the RTC
committed a reversible error when it dismissed the complaint for partition that was filed by the heirs
of Hermogenes.

There is likewise no merit to the claim that the action for partition filed by the heirs of Hermogenes
amounted to a collateral attack on the validity of OCT No. P-10737. The complaint for partition filed
by the heirs of Hermogenes seeks first, a declaration that they are a co-owners of the subject
property, and second, the conveyance of their lawful shares. The heirs of Hermogenes do not attack
the title of Feliciano; they alleged no fraud, mistake, or any other irregularity that would justify a
review of the registration decree in their favor. Their theory is that although the subject property was
registered solely in Feliciano's name, they are co-owners of the property and as such is entitled to
the conveyance of their shares. On the premise that they are co-owners, they can validly seek the
partition of the property in co-ownership and the conveyance to them of their respective shares. 15

Moreover, when Feliciano registered the subject property in his name, to the exclusion of the other
heirs of Hermogenes, an implied trust was created by force of law and he was considered a trustee
of the undivided shares of the other heirs of Hermogenes in the property. As trustees, the heirs of
Feliciano cannot be permitted to repudiate the trust by relying on the registration. "A trustee who
16

obtains a Torrens title over a property held in trust for him by another cannot repudiate the trust by
relying on the registration."
17

WHEREFORE, in light of the foregoing disquisitions, the petition is hereby DENIED. The Decision
dated October 22, 2010 issued by the Court of Appeals in CA-G.R. CV No. 92755 is AFFIRMED.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 164277 October 8, 2014

FE U. QUIJANO, Petitioner,
vs.
ATTY. DARYLL A. AMANTE, Respondent.

DECISION

BERSAMIN, J.:

Where the plaintiff does not prove her alleged tolerance of the defendant's occupation, the
possession is deemed illegal from the beginning. Hence, the action for unlawful detainer is an
improper remedy. But the action cannot be considered as one for forcible entry without any
allegation in the complaint that the entry of the defendant was by means of force, intimidation,
threats, strategy or stealth.

Antecedents

The petitioner and her siblings, namely: Eliseo, Jose and Gloria, inherited from their father, the late
Bibiano Quijano, the parcel of land registered in the latter's name under Original Certificate of Title
(OCT) No. 0-188 of the Registry of Deeds in Cebu City with an area of 15,790 square meters, more
or less. On April 23, 1990, prior to any partition among the heirs, Eliseo sold a portion of his share,
1

measuring 600 square meters, to respondent Atty. Daryll A. Amante (respondent), with the affected
portion being described in the deed of absolute sale Eliseo executed in the following manner:

A portion of a parcel of land located at the back of the Pleasant Homes Subdivision and also at the
back of Don Bosco Seminary, Punta Princesa, Cebu City, to be taken from my share of the whole lot;
the portion sold to Atty. Amante is only 600 square meters which is the area near the boundary
facing the Pleasant Homes Subdivision, Cebu City. 2

On July 25, 1991, Eliseo, sickly and in need of money, sold an additional 1/3 portion of his share
inthe property to the respondent, with their deed of absolute sale stating that the sale was with the
approval of Eliseos siblings, and describing the portion subject of the sale as:

That the portion covered under this transaction is Specifically located right at the back of the
seminary facing Japer Memorial School and where the fence and house of Atty. Amante is located. 3

On September 30, 1992, Fe, Eliseo, Jose and Gloria executed a deed of extrajudicial partition to
divide their fathers estate (consisting of the aforementioned parcel of land) among
themselves. Pursuant to the deed extrajudicial partition, OCT No. O-188 was cancelled, and on July
4

12, 1994 the Register of Deeds issued TransferCertificate of Title (TCT) No. 6555, TCT No. 6556,
TCT No. 6557 and TCT No. 6558 to the petitioner, Gloria, Jose, and Eliseo, respectively. The
5

partition resulted in the portions earlier sold by Eliseo to the respondent being adjudicated to the
petitioner instead of to Eliseo.
6
Due to the petitioners needing her portion that was then occupied by the respondent, she
demanded that the latter vacate it. Despite several demands, the last of which was by the letter
dated November 4, 1994, the respondent refused to vacate, prompting her to file against him on
7

February 14, 1995 a complaint for ejectment and damages in the Municipal Trial Court in Cities of
Cebu City (MTCC), docketed as Civil Case No. R-34426. She alleged therein that she was the
8

registered owner of the parcel of land covered by TCT No. 6555, a portion of which was being
occupied by the respondent, who had constructed a residential building thereon by the mere
tolerance of Eliseo when the property she and her siblings had inherited from their father had not yet
been subdivided, and was thus still co-owned by them; and that the respondents occupation had
become illegal following his refusal to vacate despite repeated demands.

The respondent denied that his possession of the disputed portion had been by mere tolerance of
Eliseo. He even asserted that he was in fact the owner and lawful possessor of the property, having
bought it from Eliseo; that the petitioner and her siblings could not deny knowing about the sale in
his favor because they could plainly see his house from the road; and that the deed of absolute sale
itself stated that the sale to him was with their approval, and that they had already known that his
house and fence were existing; that before he purchased the property, Eliseo informed him that he
and his co-heirs had already orally partitioned the estate of their father, and that the portion being
sold to him was Eliseos share; and that with his having already purchased the property before the
petitioner acquired it under the deed of extrajudicial partition, she should respect his ownership and
possession of it.
9

Judgment of the MTCC

On February 5, 1996, the MTCC rendered its decision in favor of the petitioner, ruling that the
10

deeds of sale executed by Eliseo in favor of the respondent did not have the effect of conveying the
disputed property to him inasmuch as at the time of the sale, the parcel of land left by their father,
which included the disputed property, had not yet been partitioned, rendering Eliseo a mere co-
owner of the undivided estate who had no right to dispose of a definite portion thereof; that as a co-
owner, Eliseo effectively conveyed to the respondent only the portion that would ultimately be
allotted to him once the property would be subdivided; that because the disputed property was
adjudicated to the petitioner under the deed of extrajudicial settlement and partition, she was its
owner with the consequent right of possession; and that, as such, she had the right to demand that
the respondent vacate the land.

The MTCC disposed as follows:

WHEREFORE, in view of all the foregoing premises, and on the basis thereof, judgment is hereby
rendered in favor of the plaintiff and against the defendant, ordering the defendant; to:

1) vacate from the portion, presently occupied by him and whereon his building stands, of
that parcel of land locatedin Cebu City covered by TCT No. 6555 and registered in the
nameof the plaintiff; and to remove and/or demolish the building and all the structures that
may have been built on said portion;

2) pay the plaintiff the rentalof 1,000.00 a month for the portion in litigation from November
21, 1994 until such time that the defendant shall have vacated, and have removed all
structures from said portion, and have completely restored possession thereof to the plaintiff;
and

3) pay unto the plaintiff the sum of 10,000.00 as attorneys fees; and the sum of 5,000.00
for litigation expenses; and
 4) to pay the costs of suit.

SO ORDERED. 11

Decision of the RTC

On appeal, the Regional Trial Court (RTC) reversed the judgment of the MTCC, and dismissed the
complaint, holding that the summary proceeding for ejectment was not proper because the serious
12

question of ownership of the disputed property was involved, viz:

In the case at bar, by virtue of the deed of absolute sale executed by Eliseo Quijano, one of the co-
heirs of Fe Quijano, in 1990 and 1991, the defendant Atty. Amante took possession of the portion in
question and built his residential house thereat. Itwas only in 1992 that the heirs of Bibiano Quijano
executed the deed of extrajudicial partition, and instead of giving to Eliseo Quijano the portion that
he already sold to the defendant, the same was adjudicated toplaintiff, Fe Quijano to the great
prejudice of the defendant herein who had been in possession of the portion in question since 1990
and which possession is notpossession de facto but possession de jure because it is based on 2
deeds of conveyances executed by Eliseo Quijano. There is, therefore, a serious question of
ownership involved which cannot be determined in a summary proceeding for ejectment. Since the
defendantis in possession of the portion in question where his residential house is built for several
years, and before the extrajudicial partition, the possession of the defendant, to repeat, is one of
possession de jure and the plaintiff cannot eject the defendant in a summary proceeding for
ejectment involving only possession de facto. What the plaintiff should have done was to file an
action publiciana or action reinvindicatoria before the appropriate court for recovery of possession
and ownership. However, since there is a pending complaint for quieting of title filed by the
defendant against the plaintiff herein before the Regional Trial Court, the matter of ownership should
be finally resolved in said proceedings. Undaunted, the petitioner moved for reconsideration, but the
13

RTC denied her motion on November 13, 1996. 14

Decision of the CA

The petitioner appealed to the CA by petition for review.

On May 26, 2004, the CA promulgated its decision, affirming the decision of the RTC, and
15

dismissing the case for ejectment, but on the ground that the respondent was either a co-owner or
an assignee holding the right of possession over the disputed property.

The CA observed that the RTC correctly dismissed the ejectment case because a question of
ownership over the disputed property was raised; that the rule that inferior courts could pass upon
the issue of ownership to determine the question of possession was well settled; that the institution
of a separate action for quieting of title by the respondent did not divest the MTCC of its authority to
decide the ejectment case; that Eliseo, as a coowner, had no right to sell a definite portion of the
undivided estate; that the deeds of sale Eliseo executed in favor of the respondent were valid only
with respect to the alienation of Eliseos undivided share; that after the execution of the deeds of
sale, the respondent became a co-owner along with Eliseo and his co-heirs, giving him the right
toparticipate in the partition of the estate owned in common by them; that because the respondent
was not given any notice of the project of partition or of the intention to effect the partition, the
partition made by the petitioner and her co-heirs did not bind him; and that, as to him, the entire
estate was still co-owned by the heirs, giving him the right to the co-possession of the estate,
including the disputed portion.

Issues
The petitioner has come to the Court on appeal by certiorari, contending that the CA grossly erred
16

in holding that the respondent was either a co-owner or an assignee with the right of possession
over the disputed property. 17

The petitioner explains that the respondent, being a lawyer, knew that Eliseo could not validly
transfer the ownership of the disputed property to him because the disputed property was then still a
part of the undivided estate co-owned by all the heirs of the late Bibiano Quijano; that the
respondents knowledge of the defect in Eliseos title and his failure to get the co-heirs consent to
the sale in a registrable document tainted his acquisition with bad faith; that being a buyer in bad
faith, the respondent necessarily became a possessor and builder in bad faith; that she was not
aware of the sale to the respondent, and it was her ignorance of the sale that led her to believe that
the respondent was occupying the disputed property by the mere tolerance of Eliseo; thatthe
partition was clearly done in good faith; and that she was entitled to the possession of the disputed
property as its owner, consequently giving her the right to recover it from the respondent. 18

To be resolved is the issue ofwho between the petitioner and the respondent had the better right to
the possession of the disputed property.

Ruling

The petition for review on certiorarilacks merit.

An ejectment case can be eitherfor forcible entry or unlawful detainer. It is a summary proceeding
designed to provide expeditious means to protect the actual possession or the right to possession of
the property involved. The sole question for resolution in the case is the physical or material
19

possession (possession de facto)of the property in question, and neither a claim of juridical
possession (possession de jure)nor an averment of ownership by the defendant can outrightly
deprive the trial court from taking due cognizance of the case. Hence,even if the question of
ownership is raised in the pleadings, like here, the court may pass upon the issue but only to
determine the question of possession especially if the question of ownership is inseparably linked
with the question of possession. The adjudication of ownership in that instance is merely
20

provisional, and will not bar or prejudice an action between the same parties involving the title to the
property.21

Considering that the parties are both claiming ownership of the disputed property, the CA properly
ruled on the issue of ownership for the sole purpose of determining who between them had the
better right to possess the disputed property.

The disputed property originally formed part of the estate of the late Bibiano Quijano, and passed on
to his heirs by operation of law upon his death. Prior to the partition, the estate was owned in
22

common by the heirs, subject to the payment of the debts of the deceased. In a co-ownership, the
23

undivided thing or right belong to different persons, with each of them holding the property pro
indivisoand exercising her rights over the whole property. Each co-owner may use and enjoy the
property with no other limitation than that he shall not injure the interests of his co-owners. The
underlying rationale is that until a division is actually made, the respective share of each cannot be
determined, and every co-owner exercises, together with his co-participants, joint ownership of the
pro indiviso property, in addition to his use and enjoyment of it. 24

Even if an heirs right in the estate of the decedent has not yet been fully settled and partitioned and
is thus merely inchoate, Article 493 of the Civil Codegives the heir the right to exercise acts of
25

ownership. Accordingly, when Eliseo sold the disputed property to the respondent in 1990 and 1991,
he was only a co-owner along with his siblings, and could sell only that portion that would beallotted
to him upon the termination of the co-ownership. The sale did not vest ownership of the disputed
property in the respondent but transferred only the sellers pro indiviso share to him, consequently
making him, as the buyer, a co-owner of the disputed property until it is partitioned. 26

As Eliseos successor-in-interest or assignee, the respondent was vested with the right under Article
497 of the Civil Codeto take part in the partition of the estate and to challenge the partition
undertaken without his consent. Article 497 states:
27

Article 497. The creditors or assignees of the co-owners may take part in the division of the thing
owned in common and object to its being effected without their concurrence. But they cannot impugn
any partition already executed, unless there has been fraud, or in case it was made notwithstanding
a formal opposition presented to prevent it, without prejudice to the right of the debtor or assignor to
maintain its validity.

The respondent could not deny that at the time of the sale he knew that the property he was buying
was notexclusively owned by Eliseo. He knew, too, that the co-heirs had entered into an oral
1wphi1

agreement of partition vis--vis the estate, such knowledge being explicitly stated in his answer to
the complaint, to wit:

12. That defendant, before he acquired the land from Eliseo Quijano was informed by the latter that
the portion sold to him was his share already; that they have orally partitioned the whole lot before
defendant acquired the portion from him. 28

His knowledge of Eliseos co-ownership with his co-heirs, and of their oral agreement of partition
notwithstanding, the respondent still did not exercise his right under Article 497. Although Eliseo
made it appear to the respondent that the partition had already been completed and finalized, the
co-heirs had not taken possession yet oftheir respective shares to signify that they had ratified their
agreement, if any. For sure, the respondent was no stranger to the Quijanos, because he himself
had served as the lawyer of Eliseo and the petitioner herself. In that sense, it would have been easy
29

for him to ascertain whether the representation of Eliseo to him was true. As it turned out, there had
been no prior oral agreement among the heirs to partition the estate; otherwise, Eliseo would have
questioned the deed of extrajudicial partition because it did not conform to what they had supposedly
agreed upon. Had the respondent been vigilant in protecting his interest, he could have availed
himself of the rights reserved to him by law, particularly the right to take an active part in the partition
and to object to the partition if he wanted to. It was only on September 30, 1992, or two years and
five months from the time of the first sale transaction, and a year and two months from the time of
the second sale transaction, that the co-heirs executed the deed of extrajudicial partition. Having
been silent despite his ample opportunity to participate in or toobject to the partition of the estate, the
respondent was bound by whatever was ultimately agreed upon by the Quijanos.

There is no question that the holder of a Torrens title is the rightful owner of the property thereby
covered and is entitled to its possession. However, the Court cannot ignore thatthe statements in
30

the petitioners complaint about the respondents possession of the disputed property being by the
mere tolerance of Eliseo could be the basis for unlawful detainer. Unlawful detainer involves the
defendants withholding of the possession of the property to which the plaintiff is entitled, after the
expiration or termination of the formers right tohold possession under the contract, whether express
or implied. A requisite for a valid cause of action of unlawful detainer is that the possession was
originally lawful, but turned unlawful only upon the expiration of the right to possess.

To show that the possession was initially lawful, the basis of such lawful possession must then be
established. With the averment here that the respondents possession was by mere tolerance of the
petitioner, the acts of tolerance must be proved, for bare allegation of tolerance did not suffice. At
least, the petitioner should show the overt acts indicative of her or her predecessors tolerance, or
her co-heirs permission for him to occupy the disputed property. But she did not adduce such
31

evidence. Instead, she appeared to be herself not clear and definite as to his possession of the
disputed property being merely tolerated by Eliseo, as the following averment of her petition for
review indicates:

6.9. Their ignorance of the said transaction of sale, particularly the petitioner, as they were not duly
informed by the vendor-co[-]owner Eliseo Quijano, [led] them to believe that the respondents
occupancy of the subject premises was by mere tolerance of Eliseo, so that upon partition of the
whole property,said occupancy continued to be under tolerance of the petitioner when the subject
premises became a part of the land adjudicated to the latter; (emphasis supplied) In contrast, the
32

respondent consistently stood firm on his assertion that his possession of the disputed property was
in the concept of an owner, not by the mere tolerance of Eliseo, and actually presented the deeds of
sale transferring ownership of the property to him.33

Considering that the allegation ofthe petitioners tolerance of the respondents possession of the
disputed property was not established, the possession could very well be deemed illegal from the
beginning. In that case, her action for unlawful detainer has to fail. Even so, the Court would not be
34

justified to treat this ejectment suit as one for forcible entry because the complaint contained no
allegation thathis entry in the property had been by force, intimidation, threats, strategy or stealth.

Regardless, the issue of possession between the parties will still remain. To finally resolve such
issue,they should review their options and decide on their proper recourses. In the meantime, it is
wise for the Court to leave the door open to them in that respect. For now, therefore, this recourse of
the petitioner has to be dismissed.

WHEREFORE, the Court AFFIRMS the decision promulgated on May 26, 2004 subject to the
MODIFICATION that the unlawful detainer action is dismissed for being an improper remedy; and
ORDERS the petitioner to pay the costs of suit.

SO ORDERED.

LUCAS P. BERSAMIN
Associate Justice
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 179011 April 15, 2013

REY CASTIGADOR CATEDRILLA, Petitioner,

vs.
MARIO and MARGIE1 LAURON, Respondents.

DECISION

PERALTA, J.:

Assailed in this petition for review on certiorari is the Decision 2 dated February 28, 2007 of the Court
of Appeals ((A) in CA-G.R. SP No. 00939, as well as its Resolution 3dated July 11, 2007 which denied
petitioner's motion for reconsideration.

On February 12, 2003, petitioner Rey Castigador Catedrilla filed with the Municipal Trial Court (MTC)
of Lambunao, Iloilo a Complaint4 for ejectment against the spouses Mario and Margie Lauron
alleging as follows: that Lorenza Lizada is the owner of a parcel of land known as Lot 183, located in
Mabini Street, Lambunao, Iloilo, which was declared for taxation purposes in her name under Tax
Declaration No. 0363;5 that on February 13, 1972, Lorenza died and was succeeded to her
properties by her sole heir Jesusa Lizada Losaes, who was married to Hilarion Castigador
(Castigador); that the spouses Jesusa and Hilarion Castigador had a number of children, which
included Lilia Castigador (Lilia), who was married to Maximo Catedrilla (Maximo); that after the death
of the spouses Castigador, their heirs agreed among themselves to subdivide Lot 183 and, pursuant
to a consolidation subdivision plan6 dated January 21, 1984, the parcel of lot denominated as Lot No.
5 therein was to be apportioned to the heirs of Lilia since the latter already died on April 9, 1976; Lilia
was succeeded by her heirs, her husband Maximo and their children, one of whom is herein
petitioner; that petitioner filed the complaint as a co-owner of Lot No. 5; that sometime in 1980,
respondents Mario and Margie Lauron, through the tolerance of the heirs of Lilia, constructed a
residential building of strong materials on the northwest portion of Lot No. 5 covering an area of one
hundred square meters; that the heirs of Lilia made various demands for respondents to vacate the
premises and even exerted earnest efforts to compromise with them but the same was unavailing;
and that petitioner reiterated the demand on respondents to vacate the subject lot on January 15,
2003, but respondents continued to unlawfully withhold such possession.

In their Answer,7 respondents claimed that petitioner had no cause of action against them, since they
are not the owners of the residential building standing on petitioner's lot, but Mildred Kascher
(Mildred), sister of respondent Margie, as shown by the tax declaration in Mildred's name; 8 that in
1992, Mildred had already paid 10,000.00 as downpayment for the subject lot to Teresito
Castigador;9 that there were several instances that the heirs of Lilia offered the subject Lot 183 for
sale to respondents and Mildred and demanded payment, however, the latter was only interested in
asking money without any intention of delivering or registering the subject lot; that in 1998, Maximo,
petitioner's father, and respondent Margie entered into an amicable settlement 10 before the Barangay
Lupon of Poblacion Ilawod, Lambunao, Iloilo wherein Maximo offered the subject lot to the spouses
Alfons and Mildred Kascher in the amount of 90,000.00 with the agreement that all documents
related to the transfer of the subject lot to Maximo and his children be prepared by Maximo, but the
latter failed to comply; and that the amicable settlement should have the force and effect of a final
judgment of a court, hence, the instant suit is barred by prior judgment. Respondents counterclaimed
for damages.

On November 14, 2003, the MTC rendered its Decision, 11 the dispositive portion of which reads:

WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor of the plaintiff ordering
the defendants:

1. To vacate the lot in question and restore possession to the plaintiff;

2. To pay plaintiff in the reduced amount of TWENTY THOUSAND PESOS (20,000.00) as

Atty's fees, plus ONE THOUSAND (1,000.00) per Court appearance;

3. To pay plaintiff reasonable compensation for the use of the lot in question ONE
THOUSAND (1,000.00) pesos yearly counted from the date of demand;

4. To pay the cost of litigation.

No award of moral and exemplary damages.

Defendants' counterclaim is hereby dismissed for lack of sufficient evidence. 12

The MTC found that from the allegations and evidence presented, it appeared that petitioner is one
of the heirs of Lilia Castigador Catedrilla, the owner of the subject lot and that respondents are
occupying the subject lot; that petitioner is a party who may bring the suit in accordance with Article
48713 of the Civil Code; and as a co-owner, petitioner is allowed to bring this action for ejectment
under Section 1, Rule 7014 of the Rules of Court; that respondents are also the proper party to be
sued as they are the occupants of the subject lot which they do not own; and that the MTC assumed
that the house standing on the subject lot has been standing thereon even before 1992 and only
upon the acquiescence of the petitioner and his predecessor-in-interest.

The MTC found that respondents would like to focus their defense on the ground that Mildred is an
indispensable party, because she is the owner of the residential building on the subject lot and that
there was already a perfected contract to sell between Mildred and Maximo because of an amicable
settlement executed before the Office of the Punong Barangay.

However, the MTC, without dealing on the validity of the document and its interpretation, ruled that it
was clear that respondent Margie was representing her parents, Mr. and Mrs. Bienvenido Loraa, in
the dispute presented with the Punong Barangay. It also found that even Mildred's letter to
petitioner's father Maximo recognized the title of petitioner's father over the subject lot and that it had
not been established by respondents if Teresito Castigador, the person who signed the receipt
evidencing Mildred's downpayment of 10,000.00 for the subject lot, is also one of the heirs of Lilia.
The MTC concluded that respondents could not be allowed to deflect the consequences of their
continued stay over the property, because it was their very occupation of the property which is the
object of petitioner's complaint; that in an action for ejectment, the subject matter is material
possession or possession de facto over the real property, and the side issue of ownership over the
subject lot is tackled here only for the purpose of determining who has the better right of possession
which is to prove the nature of possession; that possession of Lot 183 should be relinquished by
respondents to petitioner, who is a co-owner, without foreclosing other remedies that may be availed
upon by Mildred in the furtherance of her supposed rights.
Respondents filed their appeal with the Regional Trial Court (RTC) of Iloilo City, raffled off to Branch
26. On March 22, 2005, the RTC rendered its Order,15 the dispositive portion of which reads:

WHEREFORE, circumstances herein-above considered, the decision of the court dated November
14, 2003 is hereby AFFIRMED, except for the payment of 20,000.00 as attorney's fees.

SO ORDERED.16

The RTC found that petitioner, being one of the co-owners of the subject lot, is the proper party in
interest to prosecute against any intruder thereon. It found that the amicable settlement signed and
executed by the representatives of the registered owner of the premises before the Lupon is not
binding and unenforceable between the parties. It further ruled that even if Mildred has her name in
the tax declaration signifying that she is the owner of the house constructed on the subject lot, tax
declarations are not evidence of ownership but merely issued to the declarant for purposes of
payment of taxes; that she cannot be considered as an indispensable party in a suit for recovery of
possession against respondents; that Mildred should have intervened and proved that she is an
indispensable party because the records showed that she was not in actual possession of the
subject lot. The RTC deleted the attorney's fees, since the MTC decision merely ordered the
payment of attorney's fees without any basis.

Respondents' motion for reconsideration was denied in an Order 17 dated June 8, 2005.

Dissatisfied, respondents filed with the CA a petition for review. Petitioner filed his Comment thereto.

On February 28, 2007, the CA issued its assailed decision, the dispositive portion of which reads:

IN LIGHT OF ALL THE FOREGOING, this petition for review is GRANTED. The assailed decision of
the Regional Trial Court, Br. 26, Iloilo City, dated March 22, 2005, that affirmed the MTC Decision
dated November 14, 2003, is REVERSED and SET ASIDE.

Consequently, the complaint for ejectment of the respondent is DISMISSED.18

The CA found that only petitioner filed the case for ejectment against respondents and ruled that the
other heirs should have been impleaded as plaintiffs citing Section 1, 19 Rule 7 and Section 7,20 Rule 3
of the Rules of Court; that the presence of all indispensable parties is a condition sine qua non for
the exercise of judicial power; that when an indispensable party is not before the court, the action
should be dismissed as without the presence of all the other heirs as plaintiffs, the trial court could
not validly render judgment and grant relief in favor of the respondents.

The CA also ruled that while petitioner asserted that the proper parties to be sued are the
respondents as they are the actual possessors of the subject lot and not Mildred, petitioner still
cannot disclaim knowledge that it was to Mildred to whom his co-owners offered the property for
sale, thus, he knew all along that the real owner of the house on the subject lot is Mildred and not
respondents; that Mildred even paid 10,000.00 out of the total consideration for the subject lot and
required respondents' relatives to secure the documents that proved their ownership over the subject
lot; that Maximo and Mildred had previously settled the matter regarding the sale of the subject lot
before the Barangay as contained in an amicable settlement signed by Maximo and respondent
Margie. Thus, the question in this case extends to mere possessory rights and non-inclusion of
indispensable parties made the complaint fatally defective. From the facts obtaining in this case,
ejectment being a summary remedy is not the appropriate action to file against the alleged deforciant
of the property.
Hence, this petition for review wherein petitioner raises the following issues:

THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS DISCRETION WHEN IT HELD
THAT THE DECISION OF THE TRIAL COURT WAS A NULLITY .

II

THE COURT OF APPEALS ERRED AND GRAVELY ABUSED ITS DISCRETION WHEN IT HELD
THAT PETITIONER KNEW ALL ALONG THAT MILDRED KASCHER, AND NOT RESPONDENTS,
WERE THE REAL OWNERS OF THE RESIDENTIAL BUILDING. 21

The CA found that petitioner's co-heirs to the subject lot should have been impleaded as co-plaintiffs
in the ejectment case against respondents, since without their presence, the trial court could not
validly render judgment and grant relief in favor of petitioner.

We do not concur.

Petitioner can file the action for ejectment without impleading his co-owners. In Wee v. De
Castro,22 wherein petitioner therein argued that the respondent cannot maintain an action for
ejectment against him, without joining all his co-owners, we ruled in this wise:

Article 487 of the New Civil Code is explicit on this point:

ART. 487. Any one of the co-owners may bring an action in ejectment.

This article covers all kinds of action for the recovery of possession, i.e., forcible entry and unlawful
detainer (accion interdictal), recovery of possession (accion publiciana), and recovery of ownership
(accion de reivindicacion). As explained by the renowned civilest, Professor Arturo M. Tolentino:

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.

In the more recent case of Carandang v. Heirs of De Guzman, this Court declared that a co-owner is
not even a necessary party to an action for ejectment, for complete relief can be afforded even in his
absence, thus:

In sum, in suits to recover properties, all co-owners are real parties in interest. However, pursuant to
Article 487 of the Civil Code and the relevant jurisprudence, any one of them may bring an action,
any kind of action for the recovery of co-owned properties. Therefore, only one of the co-owners,
namely the co-owner who filed the suit for the recovery of the co-owned property, is an indispensable
party thereto. The other co-owners are not indispensable parties. They are not even necessary
parties, for a complete relief can be afforded in the suit even without their participation, since the suit
is presumed to have been filed for the benefit of all co-owners. 23

In this case, although petitioner alone filed the complaint for unlawful detainer, he stated in the
complaint that he is one of the heirs of the late Lilia Castigador, his mother, who inherited the subject
lot, from her parents. Petitioner did not claim exclusive ownership of the subject lot, but he filed the
complaint for the purpose of recovering its possession which would redound to the benefit of the co-
owners. Since petitioner recognized the existence of a co-ownership, he, as a co-owner, can bring
the action without the necessity of joining all the other co-owners as co-plaintiffs.

Petitioner contends that the CA committed a reversible error in finding that Mildred Kascher is an
indispensable party and that her non-inclusion as a party defendant in the ejectment case made the
complaint fatally defective, thus, must be dismissed.

We agree with petitioner.

The CA based its findings that Mildred is an indispensable party because it found that petitioner
knew all along that Mildred is the owner of the house constructed on the subject lot as shown in the
affidavits24 of Maximo and petitioner stating that petitioner's co-owners had offered for sale the
subject lot to Mildred, and that Maximo, petitioner's father, and Mildred had previously settled before
the Barangay the matter regarding the sale of the subject lot to the latter as contained in the
amicable settlement.

We find that the affidavits of Maximo and petitioner merely stated that the lot was offered for sale to
Mildred, but nowhere did it admit that Mildred is the owner of the house constructed on the subject
lot.

Also, it appears that the amicable settlement 25 before the Barangay wherein it was stated that
Maximo will sell the subject lot to the spouses Alfons and Mildred Kascher was signed by Maximo on
behalf of his children and respondent Margie on behalf of Mr. and Mrs. Bienvenido Loraa. Thus,
there is no basis for the CA's conclusion that it was Mildred and Maximo who had previously settled
the sale of the subject lot.

Moreover, it appears however, that while there was a settlement, Liah C. Catedrilla, one of
petitioner's co-heirs, wrote a letter26 dated October 30, 2002, to the Spouses Loraa and respondent
Margie stating that the latter had made a change on the purchase price for the subject lot which was
different from that agreed upon in the amicable settlement. Records neither show that respondent
Margie had taken steps to meet with Liah or any of her co-heirs to settle the matter of the purchase
price nor rebut such allegation in the letter if it was not true. The letter 27 dated July 5, 2003 of
respondent Margie's counsel addressed to petitioner's counsel, stating that his client is amenable in
the amount as proposed in the amicable settlement, would not alter the fact of respondents' non-
compliance with the settlement since the letter was sent after the ejectment case had already been
filed by petitioner.

In Chavez v. Court of Appeals,28 we explained the nature of the amicable settlement reached after a
barangay conciliation, thus:

Indeed, the Revised Katarungang Pambarangay Law provides that an amicable settlement reached
after barangay conciliation proceedings has the force and effect of a final judgment of a court if not
repudiated or a petition to nullify the same is filed before the proper city or municipal court within ten
(10) days from its date. It further provides that the settlement may be enforced by execution by the
lupong tagapamayapa within six (6) months from its date, or by action in the appropriate city or
municipal court, if beyond the six-month period. This special provision follows the general precept
enunciated in Article 2037 of the Civil Code, viz.:

A compromise has upon the parties the effect and authority of res judicata; but there shall be no
execution except in compliance with a judicial compromise. 1wphi1
Thus, we have held that a compromise agreement which is not contrary to law, public order, public
policy, morals or good customs is a valid contract which is the law between the parties themselves. It
has upon them the effect and authority of res judicata even if not judicially approved, and cannot be
lightly set aside or disturbed except for vices of consent and forgery.

However, in Heirs of Zari, et al. v. Santos, we clarified that the broad precept enunciated in Art. 2037
is qualified by Art. 2041 of the same Code, which provides:

If one of the parties fails or refuses to abide by the compromise, the other party may either enforce
the compromise or regard it as rescinded and insist upon his original demand.

We explained, viz.:

Before the onset of the new Civil Code, there was no right to rescind compromise agreements.
Where a party violated the terms of a compromise agreement, the only recourse open to the other
party was to enforce the terms thereof.

When the new Civil Code came into being, its Article 2041 x x x created for the first time the right of
rescission. That provision gives to the aggrieved party the right to "either enforce the compromise or
regard it as rescinded and insist upon his original demand." Article 2041 should obviously be
deemed to qualify the broad precept enunciated in Article 2037 that "a compromise has upon the
parties the effect and authority of res judicata.

In exercising the second option under Art. 2041, the aggrieved party may, if he chooses, bring the
suit contemplated or involved in his original demand, as if there had never been any compromise
agreement, without bringing an action for rescission. This is because he may regard the compromise
as already rescinded by the breach thereof of the other party. 29

While the amicable settlement executed between Maximo and respondent Margie before the
Barangay had the force and effect of a final judgment of a court, it appears that there was non-
compliance thereto by respondent Margie on behalf of her parents which may be construed as
repudiation. The settlement is considered rescinded in accordance with the provision of Article 2041
of the Civil Code. Since the settlement was rescinded, petitioner, as a co-owner, properly instituted
the action for ejectment to recover possession of the subject lot against respondents who are in
possession of the same.

Even the receipt30 signed by a certain Teresito Castigador, acknowledging having received from
Mildred the amount of 10,000.00 as downpayment for the purchase of the subject lot, would not
also prove respondents' allegation that there was already a perfected contract to sell the subject lot
to Mildred, since the authority of Teresito to sell on behalf of the heirs of Lilia Castigador was not
established.

In ejectment cases, the only issue to be resolved is who is entitled to the physical or material
possession of the property involved, independent of any claim of ownership set forth by any of the
party-litigants.31 In an action for unlawful detainer, the real party-in-interest as party-defendant is the
person who is in possession of the property without the benefit of any contract of lease and only
upon the tolerance and generosity of its owner.32 Well settled is the rule that a person who occupies
the land of another at the latters tolerance or permission, without any contract between them, is
bound by an implied promise that he will vacate the same upon demand, failing which a summary
action for ejectment is the proper remedy against him. 33 His status is analogous to that of a lessee or
tenant whose term of lease has expired but whose occupancy continued by tolerance of the owner. 34
Here, records show that the subject lot is owned by petitioner's mother, and petitioner, being an heir
and a co-owner, is entitled to the possession of the subject lot. On the other hand, respondent
spouses are the occupants of the subject lot which they do not own. Respondents' possession of the
subject lot was without any contract of lease as they failed to present any, thus lending credence to
petitioner's claim that their stay in the subject lot is by mere tolerance of petitioner and his
predecessors. It is indeed respondents spouses who are the real parties-in-interest who were
1wphi1

correctly impleaded as defendants in the unlawful detainer case filed by petitioner.

WHEREFORE, premises considered, the petition is hereby GRANTED. The Decision dated
February 28, 2007 and the Resolution dated July 11, 2007 of the Court of Appeals are hereby
REVERSED and SET ASIDE. The Order dated March 22, 2005 of the Regional Trial Court, Branch
26, Iloilo City, in Civil Case No. 04-27978, is hereby REINSTATED.

SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice
 Republic of the Philippines
SUPREME COURT
Manila

THIRD DIVISION

G.R. No. 165427 March 21, 2011

BETTY B. LACBAYAN, Petitioner,

vs.
BAYANI S. SAMOY, JR., Respondent.

DECISION

VILLARAMA, JR., J.:

This settles the petition for review on certiorari filed by petitioner Betty B. Lacbayan against
respondent Bayani S. Samoy, Jr. assailing the September 14, 2004 Decision 1 of the Court of Appeals
(CA) in CA-G.R. CV No. 67596. The CA had affirmed the February 10, 2000 Decision 2 of the
Regional Trial Court (RTC), Branch 224, of Quezon City declaring respondent as the sole owner of
the properties involved in this suit and awarding to him 100,000.00 as attorneys fees.

This suit stemmed from the following facts.

Petitioner and respondent met each other through a common friend sometime in 1978. Despite
respondent being already married, their relationship developed until petitioner gave birth to
respondents son on October 12, 1979.3

During their illicit relationship, petitioner and respondent, together with three more incorporators,
were able to establish a manpower services company.4 Five parcels of land were also acquired
during the said period and were registered in petitioner and respondents names, ostensibly as
husband and wife. The lands are briefly described as follows:

1. A 255-square meter real estate property located at Malvar St., Quezon City covered by
TCT No. 303224 and registered in the name of Bayani S. Samoy, Jr. "married to Betty
Lacbayan."5

2. A 296-square meter real estate property located at Main Ave., Quezon City covered by
TCT No. 23301 and registered in the name of "Spouses Bayani S. Samoy and Betty
Lacbayan."6

3. A 300-square meter real estate property located at Matatag St., Quezon City covered by
TCT No. RT-38264 and registered in the name of Bayani S. Samoy, Jr. "married to Betty
Lacbayan Samoy."7

4. A 183.20-square meter real estate property located at Zobel St., Quezon City covered by
TCT No. 335193 and registered in the name of Bayani S. Samoy, Jr. "married to Betty L.
Samoy."8
 5. A 400-square meter real estate property located at Don Enrique Heights, Quezon City
covered by TCT No. 90232 and registered in the name of Bayani S. Samoy, Jr. "married to
Betty L. Samoy."9

Initially, petitioner lived with her parents in Mapagbigay St., V. Luna, Quezon City. In 1983, petitioner
left her parents and decided to reside in the property located in Malvar St. in Project 4, Quezon City.
Later, she and their son transferred to Zobel St., also in Project 4, and finally to the 400-square
meter property in Don Enrique Heights. 10

Eventually, however, their relationship turned sour and they decided to part ways sometime in 1991.
In 1998, both parties agreed to divide the said properties and terminate their business partnership by
executing a Partition Agreement.11 Initially, respondent agreed to petitioners proposal that the
properties in Malvar St. and Don Enrique Heights be assigned to the latter, while the ownership over
the three other properties will go to respondent.12However, when petitioner wanted additional
demands to be included in the partition agreement, respondent refused. 13 Feeling aggrieved,
petitioner filed a complaint for judicial partition14 of the said properties before the RTC in Quezon City
on May 31, 1999.

In her complaint, petitioner averred that she and respondent started to live together as husband and
wife in 1979 without the benefit of marriage and worked together as business partners, acquiring real
properties amounting to 15,500,000.00. 15 Respondent, in his Answer,16 however, denied petitioners
claim of cohabitation and said that the properties were acquired out of his own personal funds
without any contribution from petitioner. 17

During the trial, petitioner admitted that although they were together for almost 24 hours a day in
1983 until 1991, respondent would still go home to his wife usually in the wee hours of the
morning.18 Petitioner likewise claimed that they acquired the said real estate properties from the
income of the company which she and respondent established. 19

Respondent, meanwhile, testified that the properties were purchased from his personal funds,
salaries, dividends, allowances and commissions.20 He countered that the said properties were
registered in his name together with petitioner to exclude the same from the property regime of
respondent and his legal wife, and to prevent the possible dissipation of the said properties since his
legal wife was then a heavy gambler. 21 Respondent added that he also purchased the said properties
as investment, with the intention to sell them later on for the purchase or construction of a new
building.22

On February 10, 2000, the trial court rendered a decision dismissing the complaint for lack of
merit.23 In resolving the issue on ownership, the RTC decided to give considerable weight to
petitioners own admission that the properties were acquired not from her own personal funds but
from the income of the manpower services company over which she owns a measly 3.33% share. 24

Aggrieved, petitioner elevated the matter to the CA asserting that she is the pro indiviso owner of
one-half of the properties in dispute. Petitioner argued that the trial courts decision subjected the
certificates of title over the said properties to collateral attack contrary to law and jurisprudence.
Petitioner also contended that it is improper to thresh out the issue on ownership in an action for
partition.25

Unimpressed with petitioners arguments, the appellate court denied the appeal, explaining in the
following manner:
Appellants harping on the indefeasibility of the certificates of title covering the subject realties is, to
say the least, misplaced. Rather than the validity of said certificates which was nowhere dealt with in
the appealed decision, the record shows that what the trial court determined therein was the
ownership of the subject realties itself an issue correlative to and a necessary adjunct of the claim
of co-ownership upon which appellant anchored her cause of action for partition. It bears
emphasizing, moreover, that the rule on the indefeasibility of a Torrens title applies only to original
and not to subsequent registration as that availed of by the parties in respect to the properties in
litigation. To our mind, the inapplicability of said principle to the case at bench is even more
underscored by the admitted falsity of the registration of the selfsame realties in the parties name as
husband and wife.

The same dearth of merit permeates appellants imputation of reversible error against the trial court
for supposedly failing to make the proper delineation between an action for partition and an action
involving ownership. Typically brought by a person claiming to be co-owner of a specified property
against a defendant or defendants whom the plaintiff recognizes to be co-owners, an action for
partition may be seen to present simultaneously two principal issues, i.e., first, the issue of whether
the plaintiff is indeed a co-owner of the property sought to be partitioned and, second assuming
that the plaintiff successfully hurdles the first the issue of how the property is to be divided between
plaintiff and defendant(s). Otherwise stated, the court must initially settle the issue of ownership for
the simple reason that it cannot properly issue an order to divide the property without first making a
determination as to the existence of co-ownership. Until and unless the issue of ownership is
definitely resolved, it would be premature to effect a partition of the properties. This is precisely what
the trial court did when it discounted the merit in appellants claim of co-ownership. 26

Hence, this petition premised on the following arguments:

I. Ownership cannot be passed upon in a partition case.

II. The partition agreement duly signed by respondent contains an admission against
respondents interest as to the existence of co-ownership between the parties.

III. An action for partition cannot be defeated by the mere expedience of repudiating co-
ownership based on self-serving claims of exclusive ownership of the properties in dispute.

IV. A Torrens title is the best evidence of ownership which cannot be outweighed by
respondents self-serving assertion to the contrary.

V. The properties involved were acquired by both parties through their actual joint
contribution of money, property, or industry.27

Noticeably, the last argument is essentially a question of fact, which we feel has been squarely
threshed out in the decisions of both the trial and appellate courts. We deem it wise not to disturb the
findings of the lower courts on the said matter absent any showing that the instant case falls under
the exceptions to the general rule that questions of fact are beyond the ambit of the Courts
jurisdiction in petitions under Rule 45 of the 1997 Rules of Civil Procedure, as amended. The issues
may be summarized into only three:

I. Whether an action for partition precludes a settlement on the issue of ownership;

II. Whether the Torrens title over the disputed properties was collaterally attacked in the
action for partition; and
 III. Whether respondent is estopped from repudiating co-ownership over the subject realties.

We find the petition bereft of merit.

Our disquisition in Municipality of Bian v. Garcia28 is definitive. There, we explained that the
determination as to the existence of co-ownership is necessary in the resolution of an action for
partition. Thus:

The first phase of a partition and/or accounting suit is taken up with the determination of whether or
not a co-ownership in fact exists, and a partition is proper (i.e., not otherwise legally proscribed) and
may be made by voluntary agreement of all the parties interested in the property. This phase may
end with a declaration that plaintiff is not entitled to have a partition either because a co-ownership
does not exist, or partition is legally prohibited. It may end, on the other hand, with an adjudgment
that a co-ownership does in truth exist, partition is proper in the premises and an accounting of rents
and profits received by the defendant from the real estate in question is in order. x x x

The second phase commences when it appears that "the parties are unable to agree upon the
partition" directed by the court. In that event[,] partition shall be done for the parties by the [c]ourt
with the assistance of not more than three (3) commissioners. This second stage may well also deal
with the rendition of the accounting itself and its approval by the [c]ourt after the parties have been
accorded opportunity to be heard thereon, and an award for the recovery by the party or parties
thereto entitled of their just share in the rents and profits of the real estate in question. x x
x29 (Emphasis supplied.)

While it is true that the complaint involved here is one for partition, the same is premised on the
existence or non-existence of co-ownership between the parties. Petitioner insists she is a co-owner
pro indiviso of the five real estate properties based on the transfer certificates of title (TCTs) covering
the subject properties. Respondent maintains otherwise. Indubitably, therefore, until and unless this
issue of co-ownership is definitely and finally resolved, it would be premature to effect a partition of
the disputed properties.30 More importantly, the complaint will not even lie if the claimant, or petitioner
in this case, does not even have any rightful interest over the subject properties. 31

Would a resolution on the issue of ownership subject the Torrens title issued over the disputed
realties to a collateral attack? Most definitely, it would not.

There is no dispute that a Torrens certificate of title cannot be collaterally attacked, 32 but that rule is
not material to the case at bar. What cannot be collaterally attacked is the certificate of title and not
the title itself.33 The certificate referred to is that document issued by the Register of Deeds known as
the TCT. In contrast, the title referred to by law means ownership which is, more often than not,
represented by that document. 34 Petitioner apparently confuses title with the certificate of title. Title
as a concept of ownership should not be confused with the certificate of title as evidence of such
ownership although both are interchangeably used. 35

Moreover, placing a parcel of land under the mantle of the Torrens system does not mean that
ownership thereof can no longer be disputed. Ownership is different from a certificate of title, the
latter only serving as the best proof of ownership over a piece of land. The certificate cannot always
be considered as conclusive evidence of ownership. 36In fact, mere issuance of the certificate of title
in the name of any person does not foreclose the possibility that the real property may be under co-
ownership with persons not named in the certificate, or that the registrant may only be a trustee, or
that other parties may have acquired interest over the property subsequent to the issuance of the
certificate of title.37 Needless to say, registration does not vest ownership over a property, but may be
the best evidence thereof. 1avvphi1
Finally, as to whether respondents assent to the initial partition agreement serves as an admission
against interest, in that the respondent is deemed to have admitted the existence of co-ownership
between him and petitioner, we rule in the negative.

An admission is any statement of fact made by a party against his interest or unfavorable to the
conclusion for which he contends or is inconsistent with the facts alleged by him. 38 Admission against
interest is governed by Section 26 of Rule 130 of the Rules of Court, which provides:

Sec. 26. Admissions of a party. The act, declaration or omission of a party as to a relevant fact
may be given in evidence against him.

To be admissible, an admission must (a) involve matters of fact, and not of law; (b) be categorical
and definite; (c) be knowingly and voluntarily made; and (d) be adverse to the admitters interests,
otherwise it would be self-serving and inadmissible. 39

A careful perusal of the contents of the so-called Partition Agreement indicates that the document
involves matters which necessitate prior settlement of questions of law, basic of which is a
determination as to whether the parties have the right to freely divide among themselves the subject
properties. Moreover, to follow petitioners argument would be to allow respondent not only to admit
against his own interest but that of his legal spouse as well, who may also be lawfully entitled co-
ownership over the said properties. Respondent is not allowed by law to waive whatever share his
lawful spouse may have on the disputed properties. Basic is the rule that rights may be waived,
unless the waiver is contrary to law, public order, public policy, morals, good customs or prejudicial to
a third person with a right recognized by law.40

Curiously, petitioner herself admitted that she did not assent to the Partition Agreement after seeing
the need to amend the same to include other matters. Petitioner does not have any right to insist on
the contents of an agreement she intentionally refused to sign.

As to the award of damages to respondent, we do not subscribe to the trial courts view that
respondent is entitled to attorneys fees. Unlike the trial court, we do not commiserate with
respondents predicament. The trial court ruled that respondent was forced to litigate and engaged
the services of his counsel to defend his interest as to entitle him an award of 100,000.00 as
attorneys fees. But we note that in the first place, it was respondent himself who impressed upon
petitioner that she has a right over the involved properties. Secondly, respondents act of
representing himself and petitioner as husband and wife was a deliberate attempt to skirt the law
and escape his legal obligation to his lawful wife. Respondent, therefore, has no one but himself to
blame the consequences of his deceitful act which resulted in the filing of the complaint against him.

WHEREFORE, the petition is DENIED. The September 14, 2004 Decision of the Court of Appeals in
CA-G.R. CV No. 67596 is AFFIRMED with MODIFICATION. Respondent Bayani S. Samoy, Jr. is
hereby declared the sole owner of the disputed properties, without prejudice to any claim his legal
wife may have filed or may file against him. The award of 100,000.00 as attorneys fees in
respondents favor is DELETED.

No costs.

SO ORDERED.

MARTIN S. VILLARAMA, JR.

Associate Justice
SECOND DIVISION

REPUBLIC OF THE G.R. No. 148103

PHILIPPINES/MACTAN-CEBU
INTERNATIONAL AIRPORT
AUTHORITY, Present:
Petitioner,

- versus - PUNO, J., Chairperson,

SANDOVAL-GUTIERREZ,
ROSA BALTAZAR-RAMIREZ, CORONA,
Respondent. AZCUNA, and

GARCIA, JJ.

Promulgated:

July 27, 2006

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

DECISION

SANDOVAL-GUTIERREZ, J.:

For our resolution is the instant Petition for Review on Certiorari [1] seeking to reverse the
Decision[2] dated May 8, 2001 of the Court of Appeals in CA-G.R. CV No. 56256, entitled Rosa Baltazar-
Ramirez, appellant, versus Republic of the Philippines, appellee.

The undisputed facts are:

On February 5, 1991, respondent Rosa Baltazar-Ramirez filed with the Regional Trial Court, Branch 27,
Lapu-lapu City, a Complaint for Recovery of Hereditary Shares against herein petitioner, Republic of the
Philippines, then represented by the Air Transportation Office, docketed as Civil Case No. 2390-L.
Respondent alleged in the complaint that petitioner purchased several lots in Lapu-lapu City, including
Lot No. 902 and Lot No. 2350, with a combined area of 180,386 square meters, to be used for the
construction of the Mactan-Cebu International Airport in Lapu-lapu City. The lots were owned by
respondents father, Gavino Baltazar, who died intestate on April 10, 1957.

Petitioner purchased the lots from the children of Gavino Baltazar, namely: Magdalena, Cirila, Bibiana,
Anastacio, Isabel, Bernarda, Simeona, and Vidal, all surnamed Baltazar. The sale is evidenced by a Deed
of Extra-Judicial Settlement of Estate and Sale dated August 21, 1957.

Respondent, the 9th and youngest among Gavinos children, did not participate in the execution of the
Extra-Judicial Settlement of Estate and Sale. Not having sold her 1/9 share, with an area of 20,042.88
square meters, she has the right to acquire the same from petitioner Republic. Petitioner can readily give
respondent this area because it is part of an unused portion from which her share of the 20,042.88
square meters can be taken.

In its answer, petitioner, through the Mactan-Cebu International Airport Authority, denied the material
allegations of the complaint, claiming it has no knowledge whether respondent Rosa Baltazar-Ramirez is
indeed Gavinos child; and that the ownership of the lots has long been vested in the government
through prescription. After the sale in 1957, the government has been in actual and continuous
possession of the lots in the concept of an owner for more than 30 years.

After hearing, the trial court rendered its Decision dismissing respondents complaint, holding that her
share in the inheritance was repudiated by her brothers and sisters as shown by their statement in the
document of Extra-Judicial Settlement of Estate and Sale that they are the only direct and surviving heirs
of Gavino Baltazar. Even if there is no repudiation, respondents recourse is against her siblings and co-
heirs. Petitioner has acquired ownership of the lots by virtue of its continuous possession for about 34
years in the concept of an owner, without any adverse claim from respondent. Her inaction for 34 years
constitutes laches. Thus, her complaint should be dismissed.

On appeal by respondent, the Court of Appeals, in its Decision dated May 8, 2001 in CA-G.R. CV No.
56256, reversed the trial courts judgment. It held that there is no sufficient evidence showing that
respondents brothers and sisters repudiated her share in the inheritance. Respondents recourse,
therefore, is against petitioner Republic through an action for partition. This is
because petitioner Republic has acquired the undivided shares of respondents siblings. Thus, it has
become a co-owner of the lots with respondent, her share being 1/9 of the area. And finally, an action
for partition is imprescriptible and cannot be barred by laches.

Hence, the instant Petition for Review on Certiorari. Petitioner Republic ascribes to the Court of Appeals
the following error:

The Court of Appeals erred in declaring the petitioner and respondent Rosa Baltazar-Ramirez as co-
owners of the property in dispute.
The Court of Appeals in effect ruled that respondent, as an heir of Gavino Baltazar, has retained her 1/9
share in the 2 lots sold by her siblings to petitioner. It follows that respondent and petitioner have
become co-owners. And as a co-owner, respondent has the right to demand partition of the lots.

It is basic that an action for partition implies that the property is still owned in
common. Here, respondent and her siblings are no longer co-owners. The lots have been sold
to petitioner Republic, a third person. The juridical condition of co-ownership of things or right is
terminated: (1) by the consolidation in only one of the owner of all the shares of the others; (2) by the
destruction of the thing or the loss of the right (of co-ownership); (3) by prescription in favor of a third
person; and (4) by the partition which converts into certain and definite parts the respective undivided
shares of the co-owners.

Here, it is clear that upon the sale of the lots by respondents brothers and sisters to petitioner, the right
of co-ownership among them ceased or was lost.

We have held that there is juridical dissolution of co-ownership when the thing is sold, either publicly or
privately, to third persons.[3]

Likewise, a co-ownership is terminated by prescription in favor of a third person, as mentioned above.

Records show that the lots were sold in 1957, while respondents complaint was filed with the trial court
only in 1991, or after 34 years. Since 1957, petitioner has been in open, adverse and exclusive possession
of the lots in the concept of owner. Under Article 1141 of the Civil Code, real actions
over immovables prescribe after 30 years.

Considering that petitioner has purchased the lots in good faith and for value, and has been in
continuous possession thereof for more than 30 years, it has acquired the right of ownership to the
exclusion of herein respondent. If at all, her suit should be against her siblings who deprived her of her
lawful share through fraud.

In light of the above discussion, we hold that the Court of Appeals erred in declaring the parties as co-
owners of the lots in dispute and ordering that further proceedings be conducted by the trial court in
accordance with Rule 69 (on partition) of the 1997 Rules of Civil Procedure, as amended.

WHEREFORE, we GRANT the instant petition. The assailed Decision of the Court of Appeals in CA-G.R. CV
No. 56256 is REVERSED.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. L-49219 April 15, 1988

SPOUSES CONCEPCION FERNANDEZ DEL CAMPO and ESTANISLAO DEL CANTO, plaintiffs-
appellees,
vs.
BERNARDA FERNANDEZ ABESIA, defendant-appellant.

Geronimo Creer, Jr. for plaintiffs-appellees.

Benedicto G. Cobarde for defendant, defendant-appellant

GANCAYCO, J.:

In this appeal from the decision of the Court of First Instance (CFI) of Cebu, certified to this Court by the Court of Appeals on account of the
question of law involved, the sole issue is the applicability of the provisions of Article 448 of the Civil Code relating to a builder in good faith
when the property involved is owned in common.

This case involves a parcel of land, Lot No. 1161 of the Cadastral Survey of Cebu, with an area of
only about 45 square meters, situated at the corner of F. Flores and Cavan Streets, Cebu City
covered by TCT No. 61850. An action for partition was filed by plaintiffs in the CFI of Cebu. Plaintiffs
and defendants are co-owners pro indiviso of this lot in the proportion of and 1/3 share each,
respectively. The trial court appointed a commissioner in accordance with the agreement of the
parties. ,the Id commissioner conducted a survey, prepared a sketch plan and submitted a report to
the trial court on May 29, 1976, recommending that the property be divided into two lots: Lot 1161-A
with an area of 30 square meters for plaintiffs and Lot No. 1161-B with an area of 15 square meters
for the defendants. The houses of plaintiffs and defendants were surveyed and shown on the sketch
plan. The house of defendants occupied the portion with an area of 5 square meters of Lot 1161-A of
plaintiffs. The parties manifested their conformity to the report and asked the trial court to finally
settle and adjudicate who among the parties should take possession of the 5 square meters of the
land in question.

In solving the issue the trial court held as follows:

The Court believed that the plaintiffs cannot be obliged to pay for the value of the
portion of the defendants' house which has encroached an area of five (5) sq. meters
of the land alloted to them. The defendants cannot also be obliged to pay for the
price of the said five (5) square meters. The rights of a builder in good faith under
Article 448 of the New Civil Code does (sic) not apply to a case where one co-owner
has built, planted or sown on the land owned in common. "Manresa agreeing with
Sanchez Roman, says that as a general rule this article is not applicable because the
 matter should be governed more by the provisions on co-ownership than on
accession. Planiol and Ripert are also of the opinion that this article is not applicable
to a co-owner who constructs, plants or sows on the community property, even if the
land where the construction, planting or sowing is made is a third person under the
circumstances, and the situation is governed by the rules of co-ownership. Our Court
of Appeals has held that this article cannot be invoked by one co-owner against
another who builds, plants or sows upon their land, since the latter does not do so on
land not belonging to him. (C.A.), O.G. Supp., Aug. 30, 194, p. 126). In the light of the
foregoing authorities and considering that the defendants have expressed their
conformity to the partition that was made by the commissioner as shown in the
sketch plan attached to the commissioner's report, said defendants have no other
alternative except to remove and demolish part of their house that has encroached
an area of five (5) sq. meters of the land allotted to the plaintiffs.

WHEREFORE, judgment is hereby rendered assigning Lot 1161-A with an area of

thirty (30) sq. meters to the plaintiffs spouses Concepcion Fernandez Abesia,
Lourdes Fernandez Rodil, Genaro Fernandez and Dominga A. Fernandez, in the
respective metes and bounds as shown in the subdivision sketch plan attached to
the Commissioner's Report dated may 29, 1976 prepared by the Commissioner,
Geodetic Engineer Espiritu Bunagan. Further, the defendants are hereby ordered at
their expense to remove and demolish part of their house which has encroached an
area of five (5) square meters from Lot 1161-A of the plaintiffs; within sixty (60) days
from date hereof and to deliver the possession of the same to the plaintiffs. For the
Commissioner's fee of P400.00, the defendants are ordered to pay, jointly and
severally, the sum of P133.33 and the balance thereof to be paid by the plaintiffs.
The costs of suit shall be paid by the plaintiffs and the defendants in the proportion of
two-thirds (2/3) and one-third (1/3) shares respectively. A certified copy of this
judgment shall be recorded in the office of the Register of Deeds of the City of Cebu
and the expense of such recording shall be taxed as a part of the costs of the action.

Hence, this appeal interposed by the defendants with the following assignments of errors:

THE TRIAL COURT ERRED IN NOT APPLYING THE RIGHTS OF A BUILDER IN

GOOD FAITH UNDER ART. 448 OF THE NEW CIVIL CODE TO DEFENDANTS-
APPELLANTS WITH RESPECT TO THAT PART OF THEIR HOUSE OCCUPYING A
PROTION OF THE LOT ASSIGNED TO PLAINTIFFS-APPELLEES.

II

THE TRIAL COURT ERRED IN ORDERING DEFENDANTS-APPELLANTS TO

REMOVE AND DEMOLISH AT THEIR EXPENSE, THAT PART OF THEIR HOUSE
WHICH HAS ENCROACHED ON AN AREA OF FIVE SQUARE METERS OF LOT
1161-A OF PLAINTIFFS-APPELLEES.

Article 448 of the New Civil Code provides as follows:

Art. 448. The owner of the land on which anything has been built, sown, or planted in
good faith, shall have the right to appropriate as his own the works, sowing or
planting, after payment of the indemnity provided for in articles 546 and 548, or to
oblige the one who built or planted to pay the price of the land, and the one who
 sowed, the proper rent. However, the builder or planter cannot be obliged to buy the
land if its value is considerably more than that of the building or trees. In such case,
he shall pay reasonable rent, if the owner of the land does not choose to appropriate
the building or trees after proper indemnity. The parties shall agree upon the terms of
the lease and in case of disagreement, the court shall fix the terms thereof.

The court a quo correctly held that Article 448 of the Civil Code cannot apply where a co-owner
builds, plants or sows on the land owned in common for then he did not build, plant or sow upon land
that exclusively belongs to another but of which he is a co-owner. The co-owner is not a third person
under the circumstances, and the situation is governed by the rules of co-ownership. 1

However, when, as in this case, the co-ownership is terminated by the partition and it appears that
the house of defendants overlaps or occupies a portion of 5 square meters of the land pertaining to
plaintiffs which the defendants obviously built in good faith, then the provisions of Article 448 of the
new Civil Code should apply. Manresa and Navarro Amandi agree that the said provision of the Civil
Code may apply even when there was co-ownership if good faith has been established. 2

Applying the aforesaid provision of the Civil Code, the plaintiffs have the right to appropriate said
portion of the house of defendants upon payment of indemnity to defendants as provided for in
Article 546 of the Civil Code. Otherwise, the plaintiffs may oblige the defendants to pay the price of
the land occupied by their house. However, if the price asked for is considerably much more than the
value of the portion of the house of defendants built thereon, then the latter cannot be obliged to buy
the land. The defendants shall then pay the reasonable rent to the plaintiff upon such terms and
conditions that they may agree. In case of disagreement, the trial court shall fix the terms thereof. Of
course, defendants may demolish or remove the said portion of their house, at their own expense, if
they so decide.

WHEREFORE, the decision appealed from is hereby MODIFIED by ordering plaintiff to indemnify
defendants for the value of the Id portion of the house of defendants in accordance with Article 546
of the Civil Code, if plaintiffs elect to appropriate the same. Otherwise, the defendants shall pay the
value of the 5 square meters of land occupied by their house at such price as may be agreed upon
with plaintiffs and if its value exceeds the portion of the house that defendants built thereon, the
defendants may choose not to buy the land but defendants must pay a reasonable rental for the use
of the portion of the land of plaintiffs As may be agreed upon between the parties. In case of
disagreement, the rate of rental shall be determined by the trial court. Otherwise, defendants may
remove or demolish at their own expense the said portion of their house. No costs.

SO ORDERED.

Teehankee, C.J., Narvasa, Cruz and Grio-Aquino, JJ., concur.

 Republic of the Philippines
SUPREME COURT
Baguio City

SECOND DIVISION

G.R. No. 109387 April 25, 1994

LEONARDO LIM DE MESA, petitioner,

vs.
HON. COURT OF APPEALS, HON. RODRIGO V. COSICO, as Presiding Judge of the Regional
Trial Court, Bian, Laguna; ROGELIO S. MOLINA, Branch Sheriff; and ALFREDO,
NUMERIANO, ZENAIDA, ROGELIO, YOLANDA, OLIVIA, BENJAMIN, TERESITA and WILSON,
all surnamed LIM DE MESA, respondents.

Renato B. Vasquez for petitioner.

Rolando N.E. De Leon for private respondents.

REGALADO, J.:

In a resolution promulgated on March 4, 1993 in CA-G.R. SP No. 29818, entitled ("Leonardo Lim de
Mesa vs. Hon. Rodrigo V. Cosico, etc., et al.,") respondent court denied due course to the petition
for certiorari which sought the nullification of three orders of the Regional Trial Court, Branch 24,
Bian, Laguna which were issued as incidents of Civil Case No. B-1942 thereof. Petitioner is now
before us impugning the forestalled resolution. 1

The case stemmed from an action for partition filed by herein private respondents against their
eldest brother, herein petitioner Leonardo Lim de Mesa, and his sister Leticia Lim de Mesa, which
suit was docketed in the Regional Trial Court of Laguna, Branch 24, as Civil Case No. B-1942.
Private respondents prayed therein for the partition of the property left by their parents, Manuel de
Mesa and Lucia Lim, consisting of a house and lot in Sta. Rosa Estate Subdivision, Laguna and a
funeral parlor; that petitioner Leonardo de Mesa be compelled to render an accounting of the income
of the funeral parlor business from October 24, 1980, the date when the mother of the parties died;
and that private respondent Rogelio Lim de Mesa be declared the owner of eight-tenths (8 /10) of
the entire estate, as the other heirs had assigned their interests to him.

In his answer, petitioner admitted that their deceased parents left the house and lot described in the
complaint, but claimed that the funeral parlor, known as Lim de Mesa Memorial Chapel, was solely
owned by him. Petitioner also alleged that their deceased parents left other properties and
businesses which are in the possession and under the management of the two other plaintiffs
therein.
After trial, the court rendered the following judgment:

WHEREFORE, in view of all the foregoing considerations, judgment is hereby

rendered as follows:

1. Ordering the partition of the estate of the deceased spouses Manuel de Mesa and
Lucia Lim described in paragraph 1 of the complaint as Lot No. 329 of the Sta. Rosa
Estate Subdivision with a residential house of strong material(s) and a funeral
business therein, all located at Sta. Rosa, Laguna, among the following surviving
heirs in the following proportions;

1. Rogelio Lim de Mesa - 9.8787872 /13 shares representing the sum total of his
participations plus all the shares sold to him by co-heirs Alfredo, Numeriano,
Zenaida, Yolanda, Olivia, Benjamin, and Teresita, all surnamed Lim de Mesa

2. Leonardo Lim de Mesa - 0.6515151 /13 share

3. Leticia Lim de Mesa - 1.818181 /13 share

4. Wilson Lim de Mesa - 0.6515151 /13 share

as regards the property of the estate, namely, Lot No. 329 and the residential house
of strong material(s) erected therein, and

1. Rogelio Lim de Mesa - 8 /11 shares

2. Leonardo Lim de Mesa - 1 /11 shares

3. Leticia Lim de Mesa - 1 /11 shares

4. Wilson Lim de Mesa - 1 /11 shares

as regards the proceeds from the funeral business from November

1980 up to the present after an accounting thereof to be rendered by
Leonardo Lim de Mesa.

2. Ordering the defendants Leonardo Lim de Mesa and Leticia Lim de Mesa and
plaintiff Wilson Lim de Mesa to execute a deed of confirmation of the Extra-Judicial
Partition with Sale (Exhibit "H") and "Reformation of Instrument" (Exhibit "I") dated
January 27, 1983 and November 12, 1984, respectively.

3. Ordering defendant Leonardo Lim de Mesa to render an accounting of the

operation and management of the funeral business from November 1980 up to the
present within thirty (30) days from the date this decision becomes final.

4. Ordering the defendants to pay the plaintiffs the amount of P30,000.00 as moral
damages and the amount of P20,000.00 as reimbursement for attorney's fees.

5. Ordering defendants to pay costs of suits. 2

On appeal, the Court of Appeals affirmed the aforesaid judgment with some modifications, that is, by
deleting those portions thereof directing therein defendants Leonardo and Leticia Lim de Mesa,
aside from plaintiff Wilson Lim de Mesa, to execute a deed confirming the extrajudicial partition with
sale and the reformation of instrument, and to pay the awards for moral damages and attorney's
fees. Not satisfied therewith, petitioners further sought relief from this Court which, however, denied
3

their appeal in a resolution dated January 27, 1992. On June 4, 1992, entry of said judgment was
made, thereby making the judgment of the lower court, as modified by respondent Court of Appeals,
final and executory.

Thereafter, private respondents filed a motion for execution which was granted by the lower court. A 4

writ of execution was issued, but the same was returned unsatisfied on September 21, 1992 due to
petitioner's refusal to comply with the same. Private respondents then filed a motion to enforce
judgment which was granted by the lower court in its order dated October 14, 1992. 5

Subsequently, petitioner filed a motion to be furnished copies of the basic pleadings and/or orders.
Private respondents filed their opposition thereto, arguing that petitioner was not entitled to the relief
prayed for since private respondents were entitled to execution as a matter of right, and that all
incidental matters flowing therefrom may be resolved motu proprio without prior notice and hearing
to petitioner. The court a quo acted on petitioner's motion by an order, dated November 13, 1992,
directing private respondent Rogelio Lim de Mesa to furnish petitioner a copy of the deed of partition
and such documents as the latter would specify. 6

Private respondents then filed a motion to resolve the incident subject of the order of October 14,
1992 and this, in turn, led to the issuance of the lower court's order dated November 18,
1992. Upon motion filed by private respondents, the lower court issued another order, dated
7

November 25, 1992, granting the former's motion for a writ of possession and delineation of property
lines. Petitioner thereafter moved for the reconsideration of the orders dated November 18 and 25,
8

1992, contending that the same were issued in violation of Section 4, Rule 15 of the Rules of Court,
as these were issued ex parte. In its order dated December 23, 1992, the court below denied the
9

motion for reconsideration. 10

A petition for certiorari was then filed by petitioner in the Court of Appeals assailing, on the same
grounds, the following orders of the trial court, to wit:

1. ORDER dated October 14, 1992 designating Atty. Luzod, Jr. to sign the deed of
partition for and in behalf of Leonardo Lim de Mesa, petitioner, to enforce the
judgment, and ordering petitioner to explain within 10 days from notice why he
should not be cited (for) contempt of court pursuant to Sec. 3 (a) in relation to Sec. 6
and 7, Rule 71 of the Revised Rules of Court;

2. ORDER dated November 18, 1992, giving petitioner an extension of 15 days to

render an accounting and in case of failure, to cite him (for) contempt of court (for)
violation of Sec. 3(b) in relation to Sec. 6, (Rule 71), Rules of Court, and if he
continues to disobey, the public respondent may be constrained to order his
imprisonment.

3. ORDER dated November 25, 1992, granting a writ of possession directing the
respondent Sheriff to place private respondent Rogelio Lim de Mesa in possession of
the property pertaining to him by virtue of ANNEXES "X", "A", to "A-4". 11

In its resolution of March 4, 1993, as stated at the outset, respondent Court of Appeals ruled against
therein petitioner, hence the instant petition with the following assignment of errors:
12
 1. The Court of Appeals erred in applying Rule 39 of
the Rules of Court and, therefore, in concluding that
the judgment in the action for partition in Civil Case
No. B-1942 became final and executory as of June 4,
1992 and the prevailing party is entitled to a writ of
execution the issuance of which is a ministerial duty
of the court.

2. The Court of Appeals also erred in holding that the

three (3) assailed orders in Civil Case No. B-1942
were issued consequent to the execution of a
judgment that has already become final and
executory.

3. The Court of Appeals finally erred in holding that

the three (3) assailed orders in Civil Case No. B-1942
having been issued ex-parte is of no moment where
the execution is a matter of right and the losing party
need not be given advance notice of hearing of such
motion. 13

It is from the foregoing perceptions that the main thrust of herein petitioner's arguments postulates
the supposed nullity of the writ of execution issued by the trial court since the same was issued
without prior notice and hearing. We disagree.

Jurisprudentially entrenched is the rule that a judgment ordering partition with damages is final and
duly appealable, notwithstanding the fact, which petitioner seeks to capitalize on, that further
proceedings will still have to take place in the trial court. 14

There are two stages involved in the special civil action of judicial partition and accounting under
Rule 69 of the Rules of Court.

The first stage of an action for judicial partition and/or accounting is concerned with the
determination of whether or not a co-ownership in fact exists and a partition is proper, that is, it is not
otherwise legally proscribed and may be made by voluntary agreement of all the parties interested in
the property. This phase may end in a declaration that plaintiff is not entitled to the desired partition
either because a co-ownership does not exist or a partition is legally prohibited. It may also end, on
the other hand, with an adjudgment that a co-ownership does in truth exist, that partition is proper in
the premises, and that an accounting of rents and profits received by the defendant from the real
estate in question is in order. In the latter case, "the parties may, if they are able to agree, make
partition among themselves by proper instruments of conveyance, and the court shall confirm the
partition so agreed upon by all the parties." In either case, whether the action is dismissed or
15

partition and/or accounting is decreed, the order is a final one and may be appealed by any party
aggrieved thereby. 16

The second stage commences when the parties are unable to agree upon the partition ordered by
the court. In that event, partition shall be effected for the parties by the court with the assistance of
not more than three (3) commissioners. This second phase may also deal with the rendition of the
accounting itself and its approval by the Court after the parties have been accorded the opportunity
to be heard thereon, and an award for the recovery by the party or parties thereto entitled of their
just shares in the rents and profits of the real estate in question. Such an order is, to be sure, also
final and appealable. 17
In the decision ordering partition, the execution of that part of the judgment which will not necessitate
any further proceedings may be enforced. Further proceedings, such as the appointment of
commissioners to carry out the partition and the rendition and approval of the accounting, may be
had without prejudice to the execution of that part of the judgment which needs no further
proceedings. Thus, it has been held that execution was entirely proper to enforce the defendant's
obligation to render an accounting and to exact payment of the money value of the plaintiffs' shares
in the personal property and attorney's fees due defendants, as well as the costs of the suit and
damages. 18

In the present case, the decision ordering partition and the rendition of accounting had already
become final and executory. The execution thereof thus became a matter of right on the part of the
plaintiffs, herein private respondents, and is a mandatory and ministerial duty on the part of the
court. Once a judgment becomes final and executory, the prevailing party can have it executed as a
matter of right, and the judgment debtor need not be given advance notice of the application for
execution nor be afforded prior hearings thereon. 19

On the bases of the foregoing considerations, therefore, the Court of Appeals acted correctly in
holding that the failure to serve a copy of the motion for execution on petitioner is not a fatal defect.
In fact, there was no necessity for such service.

However, notwithstanding our aforesaid observations, the orders of the trial court dated October 14,
1992 and November 25, 1992, respectively directing Atty. Luzod, Jr. to sign the deed of partition for
and in behalf of petitioner and granting the writ of possession, must be set aside for having been
rendered in excess of jurisdiction.

The trial court cannot compel herein petitioner to sign the extrajudicial deed of partition prepared
solely by private respondents. Concomitantly, it cannot issue a writ of possession pursuant to the
said extrajudicial partition.

An action for partition, which is typically brought by a person claiming to be the owner of a specified
property against a defendant or defendants whom the plaintiff recognizes to be his co-owners, may
readily be seen to simultaneously present two principal issues. Firstly, there is the issue of whether
the plaintiff is indeed a co-owner of the property sought to be partitioned. Secondly, assuming that
the plaintiff successfully hurdles the first issue, there is the secondary issue of how the property is to
be divided between the plaintiff and the defendants, that is, what portion should go to which co-
owner. 20

After a judgment is rendered in an action for partition declaring that the property in question shall be
divided among the parties thereto, the procedure provided by law thereafter is that, if the parties can
agree among themselves, then the partition can be made by them through the proper instruments of
conveyance which shall be submitted for approval of the court, and such partition with the court
order confirming the same shall be recorded in the office of the proper registry of deeds. But, if the
parties are unable to agree upon the partition, the court shall by order appoint not more than three
(3) competent and disinterested persons as commissioners to make the partition, commanding them
to set off to the plaintiff and to each party in interest such part and proportion of the property as the
court in such order shall direct.21

The decision in Civil Case No. B-1942 merely declares that partition is proper and forthwith specified
therein the respective aliquot shares of the parties to the real estate and to the proceeds of the
funeral business. Withal, it did not specifically state, by metes and bounds and by adequate
description, the particular portion of the real estate to be assigned to each party. Actual partition is,
therefore, necessary. Since the parties, however, cannot agree on the actual division and allocation
of the property held in common, the trial court should order the appointment of commissioners to
carry out the partition, as provided by Section 3 of Rule 69.

WHEREFORE, the assailed resolution of respondent Court of Appeals is hereby MODIFIED and the
questioned orders of the trial court dated October 14, 1992 and November 25, 1992 are hereby SET
ASIDE. The court a quo is directed to immediately appoint and constitute the necessary number of
commissioners who shall expeditiously effect the partition of the subject property in accordance with
Rule 69 of the Rules of Court.

SO ORDERED.

Narvasa, C.J., Padilla and Puno, JJ. concur

 THIRD DIVISION

G.R. No. 143868 November 14, 2002

OSCAR C. FERNANDEZ, GIL C. FERNANDEZ and ARMANDO C. FERNANDEZ, petitioners,

vs.
Spouses CARLOS and NARCISA TARUN, respondents.

DECISION

PANGANIBAN, J.:

The right of redemption may be exercised by a co-owner, only when part of the community property
is sold to a stranger. When the portion is sold to a co-owner, the right does not arise because a new
participant is not added to the co-ownership.

The Case

The Petition for Review on Certiorari before us challenges the July 7, 2000 Decision of the Court of
Appeals (CA)1in CA-GR CV No. 55264, which reversed the Regional Trial Court (RTC) of Dagupan
City (Branch 44) in Civil Case No. D-3815.2 The assailed Decision disposed as follows:

"WHEREFORE, the appealed decision is REVERSED and a NEW ONE is entered:

"1. Ordering the partition of Lot 2991 in the proportion stated in Transfer Certificate of Title
No. 24440, that is: Angel Fernandez, married to Corazon Cabal 7,114.46 sqm; spouses
Carlos Tarun and Narcisa Zareno 1094.54 sqm.

"The costs of the subdivision shall be equitably shared by plaintiffs-appellants and

defendants-appellees.

"2. Ordering the Register of Deeds of Dagupan City to issue a separate transfer certificate of
title each to plaintiffs-appellants and defendants-appellees corresponding to their respective
shares upon completion of the partition." 3

The Facts

The antecedent facts of the case are narrated in the assailed CA Decision as follows:
"An 8,209-square meter fishpond situated at Arellano-Bani, Dagupan City is disputed by
[Respondents] Carlos Tarun and Narcisa Zareno, and [Petitioners] Corazon Cabal vda. de
Fernandez and her children Oscar, Gil and Armando, all surnamed Fernandez.

"The property is known as Lot No. 2991 of the Cadastral Survey of Dagupan. It was originally
covered by OCT No. 43099, subsequently cancelled by TCT No. 24440. The brothers Antonio,
Santiago, Demetria and Angel Fernandez, together with their uncle Armando, co-owned this property
to the extent of 1/6 thereof.4 It was subsequently increased to 1/5 on account of the 1/6 share of
Armando, who died single and without issue, which accrued in favor of the five remaining co-owners.

"On June 4, 1967, Antonio Fernandez sold his share of about 547.27 square meters to [the Spouses]
Tarun (Exh. I).5 On June 18, 1967, Demetria Fernandez, also sold her share on the same fishpond
consisting of 547.27 square meters to [respondents]. 6 Thus, the total area sold to [respondents] is
1094.54 square meters, more or less. The two sales were registered and annotated on OCT No.
43099.

"On November 14, 1969, the co-owners of the subject fishpond and another fishpond covered by
TCT No. 10944 executed a Deed of Extrajudicial Partition of two parcels of registered land with
exchange of shares. Among the parties to the deed are Antonio, Santiago, Demetria and Angel, all
surnamed Fernandez.

"It was stipulated in the deed that the parties recognize and respect the sale of a portion of Lot 2991
consisting of 1094.54 square meters previously sold by Antonio and Demetria Fernandez in favor of
[respondents]. This portion was excluded in the partition.

"Likewise, by virtue of the Deed of Extrajudicial Partition, Angel B. Fernandez exchanged his share
on the other fishpond covered by TCT No. 10944 to the shares of his co-owners on the remaining
portion of [L]ot No. 2991 covered by TCT No. 10945, making Angel B. Fernandez and [respondents]
as co-owners of Lot No. 2991.

"By virtue of the terms and conditions set forth in the Deed, TCT No. 24440 of the Registry of
Deed[s] of Dagupan City, (Exh. A) was issued in favor of Angel B. Fernandez and [respondents].
From the time the latter bought the 1094.54-square meter portion of the fishpond, they had been
paying the realty taxes thereon. However, it was Angel B. Fernandez and later on his heirs,
[petitioners], who remained in possession of the entire fishpond.

"When Angel B. Fernandez was still alive, [respondents] sought the partition of the property and their
share of its income. Angel Fernandez refused to heed their demand. After the death of Angel
Fernandez, [respondents] wrote [petitioners] of their desire for partition but this was rejected by
[petitioners]. Hence, this suit for partition and damages." 7

Ruling of the RTC

On August 1, 1996, the RTC rendered judgment in favor of petitioners, ruling that, under Articles
1620 and 1621 of the Civil Code, they were entitled to redeem the property that they had sold to
respondents. It further held that the sale was highly iniquitous and void for respondents failure to
comply with Article 1623 of the same code.

Ruling of the Court of Appeals

Reversing the RTC, the CA held that petitioners were not entitled to redeem the controversial
property for several reasons. First, it was Angel Fernandez who was its co-owner at the time of the
sale; hence, he was the one entitled to receive notice and to redeem the property, but he did not
choose to exercise that right. Second, the execution of the Deed of Extrajudicial Partition was a
substantial compliance with the notice requirement under that law. Finally, it was too late in the day
to declare the exchange highly iniquitous, when Angel Fernandez had not complained about it. As
his successors-in-interest, petitioners were bound by the terms of the agreement.

Hence, this Petition.8

Issues

In their Memorandum,9 petitioners raise the following issues:

"1. Whether or not petitioners are entitled to exercise their right of legal redemption.

"2. Whether or not the transaction is one of equitable mortgage.

"3. Whether or not the deed of extra-judicial partition is void and inefficacious.

"4. Whether or not petitioners are entitled to damages, attorneys fees and costs.

"5. Whether or not the lower court committed grave abuse of discretion amounting to lack of
jurisdiction when it substituted it surmises, conjectures and guesswork in place of the trial
courts findings of fact borne by the evidence on record." 10

This Courts Ruling

The Petition is not meritorious.

First Issue:

Entitlement to Legal Redemption

Petitioners aver that the sale to respondents is void, because it did not comply with the requirements
of the Civil Code. According to them, they were not notified of the sale, but learned about it only
when they received the summons for the partition case. They claim their right to redeem the property
under the following provisions of the Civil Code:

"Article 1620. A co-owner of a thing may exercise the right of redemption in case the shares of all the
other co-owners or of any of them, are sold to a third person. If the price of the alienation is grossly
excessive, the redemptioner shall pay only a reasonable one.

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

"Article 1621. The owners of adjoining lands shall also have the right of redemption when a piece of
rural land, the area of which does not exceed one hectare, is alienated, unless the grantee does not
own any rural land.
"The right is not applicable to adjacent lands which are separated by brooks, drains, ravines, roads
and other apparent servitudes for the benefit of other estates.

"If two or more adjoining owners desire to exercise the right of redemption at the same time, the
owner of the adjoining land of smaller area shall be preferred; and should both lands have the same
area, the one who first requested the redemption."

xxx xxx xxx

"Article 1623. The right of legal pre-emption or redemption shall not be exercised except within thirty
days from the notice in writing by the prospective vendor, or by the vendor, as the case may be. The
deed of sale shall not be recorded in the Registry of Property, unless accompanied by an affidavit of
the vendor that he has given written notice thereof to all possible redemptioners.

"The right of redemption of co-owners excludes that of adjoining owners."

We disagree with petitioners. True, the right to redeem is granted not only to the original co-owners,
but also to all those who subsequently acquire their respective shares while the community
subsists.11 However, it must be stressed that this right of redemption is available only when part of
the co-owned property is sold to a third person. Otherwise put, the right to redeem referred to in
Article 1620 applies only when a portion is sold to a non-co-owner.

In this case, it is quite clear that respondents are petitioners co-owners. The sale of the contested
property to Spouses Tarun had long been consummated before petitioners succeeded their
predecessor, Angel Fernandez. By the time petitioners entered into the co-ownership, respondents
were no longer "third persons," but had already become co-owners of the whole property. A third
person, within the meaning of Article 1620, is anyone who is not a co-owner. 12

In Basa v. Aguilar,13 this Court has unequivocally ruled that the right of redemption may be availed of
by a co-owner, only when the shares of the other owners are sold to a third person. " Legal
redemption is in the nature of a privilege created by law partly for reasons of public policy and partly
for the benefit and convenience of the redemptioner, to afford him a way out of what might be a
disagreeable or [an] inconvenient association into which he has been thrust. (10 Manresa, 4th. Ed.,
317.) It is intended to minimize co-ownership. The law grants a co-owner the exercise of the said
right of redemption when the shares of the other owners are sold to a third person." 14 There is no
legal redemption, either in case of a mere lease15 and if the purchaser is also a tenant. 16

Equally unavailing is petitioners contention that the sale was void, because the vendor had not sent
any notice in writing to the other co-owners as required under Article 1625 of the Code. Indeed, the
Code merely provides that a deed of sale shall not be recorded in the Registry of Property, unless
accompanied by an affidavit that a written notice has been given to all possible redemptioners.
However, it does not state that, by reason of such lack of notice, the sale shall become void.

Jurisprudence affirms the need for notice, but its form has been the subject of varying
interpretations. Conejero v. Court of Appeals 17 held that a written notice was still required, even if the
redemptioner had actual prior knowledge of the sale. However, in Distrito v. Court of Appeals, 18 the
Court ruled that written notice was not necessary, if the co-owner was actually aware of the sale.
While the law requires that the notice must be in writing, it does not prescribe any particular form, so
long as the reasons for a written notice are satisfied otherwise. 19 Thus, in a civil case for collection of
a share in the rentals by an alleged buyer of a co-owned property, the receipt of a summons by a co-
owner has been held to constitute actual knowledge of the sale. On that basis, the co-owner may
exercise the right of redemption within 30 days from the finality of the decision. 20
Applying the presently prevailing principles discussed above, petitioners predecessor -- Angel
Fernandez -- is deemed to have been given notice of the sale to respondents by the execution and
signing of the Deed of Extrajudicial Partition and Exchange of Shares. As correctly held by the CA,
the law does not require any specific form of written notice to the redemptioner. 21 From such time, he
had 30 days within which to redeem the property sold under Article 1623. The Deed was executed
November 4, 1969; hence, the period to redeem expired on December 4, 1969. Consequently, the
right to redeem was deemed waived, and petitioners are bound by such inaction of their
predecessor. The former cannot now be allowed to exercise the right and adopt a stance contrary to
that taken by the latter. Otherwise stated, the right to redeem had long expired during the lifetime of
the predecessor and may no longer be exercised by petitioners who are his successors-in-interest.

Second Issue:

Sale or Equitable Mortgage?

Petitioners contend that the sale was only an equitable mortgage because (1) the price was grossly
inadequate, and (2) the vendors remained in possession of the land and enjoyed its fruits. Since the
property is situated primely within the city proper, the price of P7,662 for 1,094.54 square meters is
supposedly unconscionable. Moreover, since June 4, 1967 up to the present, the vendees (or herein
respondents) have allegedly never been in actual possession of the land.

The contention is untenable. On its face, a document is considered a contract of equitable mortgage
when the circumstances enumerated in Article 1602 of the Civil Code are manifest, as follows: (a)
when the price of the sale with the right to repurchase is unusually inadequate, 22 and (b) when the
vendor remains in possession as lessee or otherwise. 23Although it is undisputed that Angel
Fernandez was in actual possession of the property, it is important to note that he did not sell it to
respondents. The sellers were his co-owners -- Antonio and Demetria Fernandez -- who, however,
are not claiming that the sale between them was an equitable mortgage. For the presumption of an
equitable mortgage to arise, one must first satisfy the requirement that the parties entered into a
contract denominated as a contract of sale, and that their intention was to secure an existing debt by
way of mortgage.24

Furthermore, mere alleged inadequacy of the price does not necessarily void a contract of sale,
although the inadequacy may indicate that there was a defect in the consent, or that the parties
really intended a donation, mortgage, or some other act or contract.25 Finally, unless the price is
grossly inadequate or shocking to the conscience, 26 a sale is not set aside. In this case, petitioners
failed to establish the fair market value of the property when it was sold in 1967. Hence, there is no
basis to conclude that the price was grossly inadequate or shocking to the conscience.

Third Issue:

Validity of the Extrajudicial Partition

Petitioners also assail the partition as lopsided and iniquitous. They argue that their predecessor
stood to lose 5,498.14 square meters under the extrajudicial partition.

We are not convinced. It is a long-established doctrine that the law will not relieve parties from the
effects of an unwise, foolish or disastrous agreement they entered into with all the required
formalities and with full awareness of what they were doing. Courts have no power to relieve them
from obligations they voluntarily assumed, simply because their contracts turn out to be disastrous
deals or unwise investments.27 Neither the law nor the courts will extricate them from an unwise or
undesirable contract which they entered into with all the required formalities and with full knowledge
of its consequences.28 On the other hand, petitioners herein are bound by the extrajudicial partition,
because contracts not only take effect between the parties, but also extend to their assigns and
heirs.29

Moreover, if petitioners intended to annul the extrajudicial partition for being "lopsided and
iniquitous," then they should have argued this in a proper action and forum. They should have filed
an action to annul the extrajudicial partition and claimed their rightful share in the estate, impleading
therein the other signatories to the Deed and not just herein respondents.

In any event, a perusal of the Deed of Extrajudicial Partition with Exchange of Shares reveals that
the partition of Lot nos. 2991 and 2924 was done equally and fairly. Indeed, 1,641.80 square meters
of Lot No. 299130 and 10,971.80 square meters of Lot No. 2924-B31 were originally given to all the co-
owners -- except Antonio, Demetria and Santiago Fernandez, who had already sold parts of their
share to third persons. However, Angel Fernandez agreed and stipulated in the same Deed that he
had traded his share in Lot No. 2924-B for the entire Lot No. 2991, except the portion already sold to
respondents.32

Taking these stipulations into consideration, we are inclined to believe that the swapping of shares
by the heirs was more favorable to the late Angel Fernandez, because his ownership became
contiguous and compact in only one fishpond, instead of being merely shared with the other co-heirs
in two different fishponds.33

Fourth Issue:

Damages and Attorneys Fees

Petitioners claim that they are entitled to P50,000 as attorneys fees and damages deserves scant
consideration. It has been clearly established that respondents are co-owners of the subject
property. Under Article 494 of the Civil Code, each co-owner may demand at any time the partition of
the thing owned in common. Hence, respondents action for partition was not an unfounded suit.
Verily, it was founded on a right given by law.

Fifth Issue:

Factual Findings of the CA

Petitioners insist that the CA made some factual findings that were neither in conformity with those of
the RTC nor borne by the evidence on record. They assert that the appellate court erred in ruling
that the extrajudicial partition had been freely and willfully entered into when, in fact, Angel B.
Fernandez had been shortchanged by 5,498.14 square meters. They also contend that the
registration of the two Deeds of Sale in favor of respondents was not valid, because it was not
accompanied by an affidavit that written notice had been served to all possible redemptioners.

We are not persuaded. We do not find any factual or legal basis to conclude that the extrajudicial
partition was iniquitous, and that the sale of Antonio and Demetrias share in Lot no. 2991 is void.
Factual findings of the CA supported by substantial evidence are conclusive and binding, 34 unless
they fall under the exceptions in Fuentes v. Court of Appeals 35 and similar cases.

WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED. Costs against
petitioners.
SO ORDERED.