[G.R. No. 133638.

April 15, 2005]

PERPETUA VDA. DE APE, petitioner, vs. THE HONORABLE COURT OF APPEALS and GENOROSA
CAWIT VDA. DE LUMAYNO, respondents.

DECISION
CHICO-NAZARIO, J.:

Before Us is a petition for review on certiorari of the Decision[1] of the Court of Appeals in CA-G.R. CV No.
45886 entitled, Generosa Cawit de Lumayno, accompanied by her husband Braulio Lumayno v. Fortunato Ape,
including his wife Perpetua de Ape.
The pertinent facts are as follows:
Cleopas Ape was the registered owner of a parcel of land particularly known as Lot No. 2319 of the Escalante
Cadastre of Negros Occidental and covered by Original Certificate of Title (OCT) No. RP 1379 (RP-154
[300]).[2] Upon Cleopas Apes death sometime in 1950, the property passed on to his wife, Maria Ondoy, and their
eleven (11) children, namely: Fortunato, Cornelio, Bernalda, Bienvenido, Encarnacion, Loreta, Lourdes, Felicidad,
Adela, Dominador, and Angelina, all surnamed Ape.
On 15 March 1973, Generosa Cawit de Lumayno (private respondent herein), joined by her husband,
Braulio,[3] instituted a case for Specific Performance of a Deed of Sale with Damages against Fortunato and his wife
Perpetua (petitioner herein) before the then Court of First Instance of Negros Occidental. It was alleged in the
complaint that on 11 April 1971, private respondent and Fortunato entered into a contract of sale of land under
which for a consideration of P5,000.00, Fortunato agreed to sell his share in Lot No. 2319 to private respondent. The
agreement was contained in a receipt prepared by private respondents son-in-law, Andres Flores, at her behest. Said
receipt was attached to the complaint as Annex A thereof and later marked as Exhibit G for private respondent. The
receipt states:

April 11, 1971

TO WHOM IT MAY CONCERN:

This date received from Mrs. Generosa Cawit de Lumayno the sum of THIRTY PESOS ONLY as Advance
Payment of my share in Land Purchased, for FIVE THOUSAND PESOS LOT #2319.

(Signed)

FORTUNATO APE

P30.00 WITNESS:
(Illegible) [4]
As private respondent wanted to register the claimed sale transaction, she supposedly demanded that Fortunato
execute the corresponding deed of sale and to receive the balance of the consideration. However, Fortunato
unjustifiably refused to heed her demands. Private respondent, therefore, prayed that Fortunato be ordered to execute
and deliver to her a sufficient and registrable deed of sale involving his one-eleventh (1/11) share or participation in
Lot No. 2319 of the Escalante Cadastre; to pay P5,000.00 in damages; P500.00 reimbursement for litigation
expenses as well as additional P500.00 for every appeal made; P2,000.00 for attorneys fees; and to pay the costs.[5]
Fortunato and petitioner denied the material allegations of the complaint and claimed that Fortunato never sold
his share in Lot No. 2319 to private respondent and that his signature appearing on the purported receipt was forged.
By way of counterclaim, the defendants below maintained having entered into a contract of lease with respondent
involving Fortunatos portion of Lot No. 2319. This purported lease contract commenced in 1960 and was supposed
to last until 1965 with an option for another five (5) years. The annual lease rental was P100.00 which private
respondent and her husband allegedly paid on installment basis. Fortunato and petitioner also assailed private
respondent and her husbands continued possession of the rest of Lot No. 2319 alleging that in the event they had
acquired the shares of Fortunatos co-owners by way of sale, he was invoking his right to redeem the same. Finally,
Fortunato and petitioner prayed that the lease contract between them and respondent be ordered annulled; and that
respondent be ordered to pay them attorneys fees; moral damages; and exemplary damages. [6]
In their reply,[7] the private respondent and her husband alleged that they had purchased from Fortunatos co-
owners, as evidenced by various written instruments,[8] their respective portions of Lot No. 2319. By virtue of these
sales, they insisted that Fortunato was no longer a co-owner of Lot No. 2319 thus, his right of redemption no longer
existed.
Prior to the resolution of this case at the trial court level, Fortunato died and was substituted in this action by
his children named Salodada, Clarita, Narciso, Romeo, Rodrigo, Marieta, Fortunato, Jr., and Salvador, all surnamed
Ape.[9]
During the trial, private respondent testified that she and her husband acquired the various portions of Lot No.
2319 belonging to Fortunatos co-owners. Thereafter, her husband caused the annotation of an adverse claim on the
certificate of title of Lot No. 2319.[10] The annotation states:

Entry No. 123539 Adverse claim filed by Braulio Lumayno. Notice of adverse claim filed by Braulio Lumayno
affecting the lot described in this title to the extent of 77511.93 square meters, more or less, the aggregate area of
shares sold to him on the basis of (alleged) sales in his possession. Doc. No. 157, Page No. 33, Book No. XI, Series
of 1967 of Alexander Cawit of Escalante, Neg. Occ. Date of instrument. June 22, 1967 at 8:30 a.m. (SGD)
FEDENCIORRAZ, Actg. Register of Deeds.[11]

In addition, private respondent claimed that after the acquisition of those shares, she and her husband had the
whole Lot No. 2319 surveyed by a certain Oscar Mascada who came up with a technical description of said piece of
land.[12] Significantly, private respondent alleged that Fortunato was present when the survey was conducted.[13]
Also presented as evidence for private respondent were pictures taken of some parts of Lot No. 2319
purportedly showing the land belonging to Fortunato being bounded by a row of banana plants thereby separating it
from the rest of Lot No. 2319.[14]
As regards the circumstances surrounding the sale of Fortunatos portion of the land, private respondent
testified that Fortunato went to her store at the time when their lease contract was about to expire. He allegedly
demanded the rental payment for his land but as she was no longer interested in renewing their lease agreement, they
agreed instead to enter into a contract of sale which Fortunato acceded to provided private respondent bought his
portion of Lot No. 2319 for P5,000.00. Thereafter, she asked her son-in-law Flores to prepare the aforementioned
receipt. Flores read the document to Fortunato and asked the latter whether he had any objection thereto. Fortunato
then went on to affix his signature on the receipt.
For her part, petitioner insisted that the entire Lot No. 2319 had not yet been formally subdivided; [15] that on 11
April 1971 she and her husband went to private respondents house to collect past rentals for their land then leased by
the former, however, they managed to collect only thirty pesos; [16] that private respondent made her (petitioners)
husband sign a receipt acknowledging the receipt of said amount of money; [17] and that the contents of said receipt
were never explained to them.[18] She also stated in her testimony that her husband was an illiterate and only learned
how to write his name in order to be employed in a sugar central. [19] As for private respondents purchase of the
shares owned by Fortunatos co-owners, petitioner maintained that neither she nor her husband received any notice
regarding those sales transactions.[20] The testimony of petitioner was later on corroborated by her daughter-in-law,
Marietta Ape Dino.[21]
After due trial, the court a quo rendered a decision[22] dismissing both the complaint and the counterclaim. The
trial court likewise ordered that deeds or documents representing the sales of the shares previously owned by
Fortunatos co-owners be registered and annotated on the existing certificate of title of Lot No. 2319. According to
the trial court, private respondent failed to prove that she had actually paid the purchase price of P5,000.00 to
Fortunato and petitioner. Applying, therefore, the provision of Article 1350 of the Civil Code, [23] the trial court
concluded that private respondent did not have the right to demand the delivery to her of the registrable deed of sale
over Fortunatos portion of the Lot No. 2319.
 The trial court also rejected Fortunato and petitioners claim that they had the right of redemption over the
shares previously sold to private respondent and the latters husband, reasoning as follows:

Defendants in their counterclaim invoke their right of legal redemption under Article 1623 of the New Civil Code in
view of the alleged sale of the undivided portions of the lot in question by their co-heirs and co-owners as claimed
by the plaintiffs in their complaint. They have been informed by the plaintiff about said sales upon the filing of the
complaint in the instant case as far back as March 14, 1973. Defendant themselves presented as their very own
exhibits copies of the respective deeds of sale or conveyance by their said co-heirs and co-owners in favor of the
plaintiffs or their predecessors-in-interest way back on January 2, 1992 when they formally offered their exhibits in
the instant case; meaning, they themselves acquired possession of said documentary exhibits even before they
formally offered them in evidence. Under Art. 1623 of the New Civil Code, defendants have only THIRTY (30)
DAYS counted from their actual knowledge of the exact terms and conditions of the deeds of sale or conveyance of
their co-heirs and co-owners share within which to exercise their right of legal redemption.[24]

Within the reglementary period, both parties filed their respective notices of appeal before the trial court with
petitioner and her children taking exception to the finding of the trial court that the period within which they could
invoke their right of redemption had already lapsed.[25] For her part, private respondent raised as errors the trial
courts ruling that there was no contract of sale between herself and Fortunato and the dismissal of their complaint
for specific performance.[26]
The Court of Appeals, in the decision now assailed before us, reversed and set aside the trial courts dismissal
of the private respondents complaint but upheld the portion of the court a quos decision ordering the dismissal of
petitioner and her childrens counterclaim. The dispositive portion of the appellate courts decision reads:

WHEREFORE, the decision dated March 11, 1994, is hereby REVERSED and SET ASIDE insofar as the dismissal
of plaintiffs-appellants complaint is concerned, and another one is entered ordering the defendant-appellant
Fortunato Ape and/or his wife Perpetua de Ape and successors-in-interest to execute in favor of plaintiff-appellant
Generosa Cawit de Lumayno a Deed of Absolute Sale involving the one-eleventh (1/11) share or participation of
Fortunato Ape in Lot No. 2319, Escalante Cadastre, containing an area of 12,527.19 square meters, more or less,
within (30) days from finality of this decision, and in case of non-compliance with this Order, that the Clerk of
Court of said court is ordered to execute the deed on behalf of the vendor. The decision is AFFIRMED insofar as the
dismissal of defendants-appellants counterclaim is concerned.

Without pronouncement as to costs.[27]

The Court of Appeals upheld private respondents position that Exhibit G had all the earmarks of a valid
contract of sale, thus:

Exhibit G is the best proof that the P5,000.00 representing the purchase price of the 1/11th share of Fortunato Ape
was not paid by the vendee on April 11, 1971, and/or up to the present, but that does not affect the binding force and
effect of the document. The vendee having paid the vendor an advance payment of the agreed purchase price of the
property, what the vendor can exact from the vendee is full payment upon his execution of the final deed of sale. As
is shown, the vendee precisely instituted this action to compel the vendor Fortunato Ape to execute the final
document, after she was informed that he would execute the same upon arrival of his daughter Bala from Mindanao,
but afterwards failed to live up to his contractual obligation (TSN, pp. 11-13, June 10, 1992).

It is not right for the trial court to expect plaintiff-appellant to pay the balance of the purchase price before the final
deed is executed, or for her to deposit the equivalent amount in court in the form of consignation. Consignation
comes into fore in the case of a creditor to whom tender of payment has been made and refuses without just cause to
accept it (Arts. 1256 and 1252, N.C.C.; Querino vs. Pelarca, 29 SCRA 1). As vendee, plaintiff-appellant Generosa
Cawit de Lumayno does not fall within the purview of a debtor.

We, therefore, find and so hold that the trial court should have found that exhibit G bears all the earmarks of a
private deed of sale which is valid, binding and enforceable between the parties, and that as a consequence of the
failure and refusal on the part of the vendor Fortunato Ape to live up to his contractual obligation, he and/or his heirs
and successors-in-interest can be compelled to execute in favor of, and to deliver to the vendee, plaintiff-appellant
Generosa Cawit de Lumayno a registerable deed of absolute sale involving his one-eleventh (1/11th) share or
participation in Lot No. 2319, Escalante Cadastre, containing an area of 12,527.19 square meters, more or less,
within 30 days from finality of this decision, and, in case of non-compliance within said period, this Court appoints
the Clerk of Court of the trial court to execute on behalf of the vendor the said document. [28]

The Court of Appeals, however, affirmed the trial courts ruling on the issue of petitioner and her childrens
right of redemption. It ruled that Fortunatos receipt of the Second Owners Duplicate of OCT (RP) 1379 (RP-154
([300]), containing the adverse claim of private respondent and her husband, constituted a sufficient compliance
with the written notice requirement of Article 1623 of the Civil Code and the period of redemption under this
provision had long lapsed.
Aggrieved by the decision of the appellate court, petitioner is now before us raising, essentially, the following
issues: whether Fortunato was furnished with a written notice of sale of the shares of his co-owners as required by
Article 1623 of the Civil Code; and whether the receipt signed by Fortunato proves the existence of a contract of
sale between him and private respondent.
In her memorandum, petitioner claimed that the Court of Appeals erred in sustaining the court a quos
pronouncement that she could no longer redeem the portion of Lot No. 2319 already acquired by private respondent
for no written notice of said sales was furnished them. According to her, the Court of Appeals unduly expanded the
scope of the law by equating Fortunatos receipt of Second Owners Duplicate of OCT (RP) 1379 (RP-154 ([300])
with the written notice requirement of Article 1623. In addition, she argued that Exhibit G could not possibly be a
contract of sale of Fortunatos share in Lot No. 2319 as said document does not contain (a) definite agreement on the
manner of payment of the price.[29] Even assuming that Exhibit G is, indeed, a contract of sale between private
respondent and Fortunato, the latter did not have the obligation to deliver to private respondent a registrable deed of
sale in view of private respondents own failure to pay the full purchase price of Fortunatos portion of Lot No. 2319.
Petitioner is also of the view that, at most, Exhibit G merely contained a unilateral promise to sell which private
respondent could not enforce in the absence of a consideration distinct from the purchase price of the land. Further,
petitioner reiterated her claim that due to the illiteracy of her husband, it was incumbent upon private respondent to
show that the contents of Exhibit G were fully explained to him. Finally, petitioner pointed out that the Court of
Appeals erred when it took into consideration the same exhibit despite the fact that only its photocopy was presented
before the court.
On the other hand, private respondent argued that the annotation on the second owners certificate over Lot No.
2319 constituted constructive notice to the whole world of private respondents claim over the majority of said parcel
of land. Relying on our decision in the case of Cabrera v. Villanueva,[30] private respondent insisted that when
Fortunato received a copy of the second owners certificate, he became fully aware of the contracts of sale entered
into between his co-owners on one hand and private respondent and her deceased husband on the other.
Private respondent also averred that although (Lot No. 2319) was not actually partitioned in a survey after the
death of Cleopas Ape, the land was partitioned in a hantal-hantal manner by the heirs. Each took and possessed
specific portion or premises as his/her share in land, farmed their respective portion or premises, and improved
them, each heir limiting his/her improvement within the portion or premises which were his/her respective
share.[31] Thus, when private respondent and her husband purchased the other parts of Lot No. 2319, it was no longer
undivided as petitioner claims.
The petition is partly meritorious.
Article 1623 of the Civil Code provides:

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.
 Despite the plain language of the law, this Court has, over the years, been tasked to interpret the written notice
requirement of the above-quoted provision. In the case Butte v. Manuel Uy & Sons, Inc.,[32] we declared that

In considering whether or not the offer to redeem was timely, we think that the notice given by the vendee (buyer)
should not be taken into account. The text of Article 1623 clearly and expressly prescribes that the thirty days for
making the redemption are to be counted from notice in writing by the vendor. Under the old law (Civ. Code of
1889, Art. 1524), it was immaterial who gave the notice; so long as the redeeming co-owner learned of the
alienation in favor of the stranger, the redemption period began to run. It is thus apparent that the Philippine
legislature in Article 1623 deliberately selected a particular method of giving notice, and that method must be
deemed exclusive. (39 Am. Jur., 237; Payne vs. State, 12 S.W. 2(d) 528). As ruled in Wampler vs. Lecompte, 150
Atl. 458 (affd. in 75 Law Ed. [U.S.] 275)

why these provisions were inserted in the statute we are not informed, but we may assume until the contrary is
shown, that a state of facts in respect thereto existed, which warranted the legislature in so legislating.

The reasons for requiring that the notice should be given by the seller, and not by the buyer, are easily divined. The
seller of an undivided interest is in the best position to know who are his co-owners that under the law must be
notified of the sale. Also, the notice by the seller removes all doubts as to fact of the sale, its perfection; and its
validity, the notice being a reaffirmation thereof, so that the party notified need not entertain doubt that the seller
may still contest the alienation. This assurance would not exist if the notice should be given by the buyer. [33]

The interpretation was somehow modified in the case of De Conejero, et al. v. Court of Appeals, et
al.[34]wherein it was pointed out that Article 1623 does not prescribe a particular form of notice, nor any distinctive
method for notifying the redemptioner thus, as long as the redemptioner was notified in writing of the sale and the
particulars thereof, the redemption period starts to run. This view was reiterated in Etcuban v. The Honorable Court
of Appeals, et al.,[35] Cabrera v. Villanueva,[36] Garcia, et al. v. Calaliman, et al.,[37] Distrito, et al. v. The Honorable
Court of Appeals, et al.,[38] and Mariano, et al. v. Hon. Court of Appeals, et al. [39]
However, in the case of Salatandol v. Retes,[40] wherein the plaintiffs were not furnished any written notice of
sale or a copy thereof by the vendor, this Court again referred to the principle enunciated in the case of Butte. As
observed by Justice Vicente Mendoza, such reversion is only sound, thus:

Art. 1623 of the Civil Code is clear in requiring that the written notification should come from the vendor or
prospective vendor, not from any other person. There is, therefore, no room for construction. Indeed, the principal
difference between Art. 1524 of the former Civil Code and Art. 1623 of the present one is that the former did not
specify who must give the notice, whereas the present one expressly says the notice must be given by the vendor.
Effect must be given to this change in statutory language. [41]

In this case, the records are bereft of any indication that Fortunato was given any written notice of prospective
or consummated sale of the portions of Lot No. 2319 by the vendors or would-be vendors. The thirty (30)-day
redemption period under the law, therefore, has not commenced to run.
Despite this, however, we still rule that petitioner could no longer invoke her right to redeem from private
respondent for the exercise of this right presupposes the existence of a co-ownership at the time the conveyance is
made by a co-owner and when it is demanded by the other co-owner or co-owners.[42] The regime of co-ownership
exists when ownership of an undivided thing or right belongs to different persons.[43]By the nature of a co-
ownership, a co-owner cannot point to specific portion of the property owned in common as his own because his
share therein remains intangible.[44] As legal redemption is intended to minimize co-ownership,[45] once the property
is subdivided and distributed among the co-owners, the community ceases to exist and there is no more reason to
sustain any right of legal redemption.[46]
In this case, records reveal that although Lot No. 2319 has not yet been formally subdivided, still, the particular
portions belonging to the heirs of Cleopas Ape had already been ascertained and they in fact took possession of their
respective parts. This can be deduced from the testimony of petitioner herself, thus:
 Q When the plaintiffs leased the share of your husband, were there any metes and bounds?

A It was not formally subdivided. We have only a definite portion. (hantal-hantal)

Q This hantal-hantal of your husband, was it also separate and distinct from the hantal-hantal or the
share of the brothers and sisters of your husband?

A Well, this property in question is a common property.

Q To the north, whose share was that which is adjacent to your husbands assumed partition?

A I do not know what [does] this north [mean].

COURT

(To Witness)

Q To the place from where the sun rises, whose share was that?

A The shares of Cornelia, Loreta, Encarnacion and Adela.

Q How could you determine their own shares?

A They were residing in their respective assumed portions.

Q How about determining their respective boundaries?

A It could be determined by stakes and partly a row of banana plantations planted by my son-in-law.

Q Who is this son-in-law you mentioned?

A Narciso Ape.

ATTY. CAWIT

(Continuing)

Q You said that there were stakes to determine the hantal-hantal of your husband and the hantal-hantal of
the other heirs, did I get you right?

ATTY. TAN

Admitted, Your Honor.

ATTY. CAWIT

Q Mrs. Ape, in 1960, Cleopas Ape was already dead, is that correct?

A Certainly, since he died in 1950.

 Q By the manifestation of your counsel that the entire land (13 hectares) of your father-in-law, Cleopas
Ape, was leased to Generosa Lumayno, is this correct?

A No, it is only the assumed portion of my husband [which] was leased to Generosa Lumayno.

Q For clarification, it was only the share of your husband [which] was leased to Generosa Cawit
Lumayno?

A Yes.[47]

ATTY. CAWIT

Q My question: is that portion which you said was leased by your husband to the Lumayno[s] and which
was included to the lease by your mother-in-law to the Lumayno[s], when the Lumayno[s]
returned your husband[s] share, was that the same premises that your husband leased to the
Lumayno[s]?

A The same.

Q In re-possessing this portion of the land corresponding to the share of your husband, did your husband
demand that they should re-possess the land from the Lumayno[s] or did the Lumayno[s] return
them to your husband voluntarily?

A They just returned to us without paying the rentals.

COURT

Q Was the return the result of your husbands request or just voluntarily they returned it to your husband?

A No, sir, it was just returned voluntarily, and they abandoned the area but my husband continued
farming.[48]

Similarly telling of the partition is the stipulation of the parties during the pre-trial wherein it was admitted that
Lot No. 2319 had not been subdivided nevertheless, Fortunato Ape had possessed a specific portion of the land
ostensibly corresponding to his share.[49]
From the foregoing, it is evident that the partition of Lot No. 2319 had already been effected by the heirs of
Cleopas Ape. Although the partition might have been informal is of no moment for even an oral agreement of
partition is valid and binding upon the parties.[50] Likewise, the fact that the respective shares of Cleopas Apes heirs
are still embraced in one and the same certificate of title and have not been technically apportioned does not make
said portions less determinable and identifiable from one another nor does it, in any way, diminish the dominion of
their respective owners.[51]
Turning now to the second issue of the existence of a contract of sale, we rule that the records of this case
betray the stance of private respondent that Fortunato Ape entered into such an agreement with her.
A contract of sale is a consensual contract, thus, it is perfected by mere consent of the parties. It is born from
the moment there is a meeting of minds upon the thing which is the object of the sale and upon the price. [52] Upon its
perfection, the parties may reciprocally demand performance, that is, the vendee may compel the transfer of the
ownership and to deliver the object of the sale while the vendor may demand the vendee to pay the thing sold. [53] For
there to be a perfected contract of sale, however, the following elements must be present: consent, object, and price
in money or its equivalent. In the case of Leonardo v. Court of Appeals, et al.,[54] we explained the element of
consent, to wit:
The essence of consent is the agreement of the parties on the terms of the contract, the acceptance by one of the offer
made by the other. It is the concurrence of the minds of the parties on the object and the cause which constitutes the
contract. The area of agreement must extend to all points that the parties deem material or there is no consent at all.

To be valid, consent must meet the following requisites: (a) it should be intelligent, or with an exact notion of the
matter to which it refers; (b) it should be free and (c) it should be spontaneous. Intelligence in consent is vitiated by
error; freedom by violence, intimidation or undue influence; spontaneity by fraud. [55]

In this jurisdiction, the general rule is that he who alleges fraud or mistake in a transaction must substantiate
his allegation as the presumption is that a person takes ordinary care for his concerns and that private dealings have
been entered into fairly and regularly.[56] The exception to this rule is provided for under Article 1332 of the Civil
Code which provides that [w]hen one of the parties is unable to read, or if the contract is in a language not
understood by him, and mistake or fraud is alleged, the person enforcing the contract must show that the terms
thereof have been fully explained to the former.
In this case, as private respondent is the one seeking to enforce the claimed contract of sale, she bears the
burden of proving that the terms of the agreement were fully explained to Fortunato Ape who was an illiterate. This
she failed to do. While she claimed in her testimony that the contents of the receipt were made clear to Fortunato,
such allegation was debunked by Andres Flores himself when the latter took the witness stand. According to Flores:

ATTY. TAN

Q Mr. Witness, that receipt is in English, is it not?

A Yes, sir.

Q When you prepared that receipt, were you aware that Fortunato Ape doesnt know how to read and
write English?

A Yes, sir, I know.

Q Mr. Witness, you said you were present at the time of the signing of that alleged receipt of P30.00,
correct?

A Yes, sir.

Q Where, in what place was this receipt signed?

A At the store.

Q At the time of the signing of this receipt, were there other person[s] present aside from you, your
mother-in-law and Fortunato Ape?

A In the store, yes, sir.

Q When you signed that document of course you acted as witness upon request of your mother-in-law?

A No, this portion, I was the one who prepared that document.

Q Without asking of (sic) your mother-in-law, you prepared that document or it was your mother-in-law
who requested you to prepare that document and acted as witness?
 A She requested me to prepare but does not instructed (sic) me to act as witness. It was our opinion that
whenever I prepared the document, I signed it as a witness.

Q Did it not occur to you to ask other witness to act on the side of Fortunato Ape who did not know how
to read and write English?

A It occurred to me.

Q But you did not bother to request a person who is not related to your mother-in-law, considering that
Fortunato Ape did not know how to read and write English?

A The one who represented Fortunato Ape doesnt know also how to read and write English. One a maid.

Q You mentioned that there [was another] person inside the store, under your previous statement, when
the document was signed, there [was another] person in the store aside from you, your mother-in-
law and Fortunato Ape, is not true?

A That is true, there is one person, but that person doesnt know how to read also.

Q Of course, Mr. Witness, since it occurred to you that there was need for other witness to sign that
document for Fortunato Ape, is it not a fact that the Municipal Building is very near your house?

A Quite (near).

Q But you could readily proceed to the Municipal Building and request one who is knowledgeable in
English to act as witness?

A I think there is no need for that small receipt. So I dont bother myself to go.

Q You did not consider that receipt very important because you said that small receipt?

A Yes, I know.[57]

As can be gleaned from Floress testimony, while he was very much aware of Fortunatos inability to read and
write in the English language, he did not bother to fully explain to the latter the substance of the receipt (Exhibit G).
He even dismissed the idea of asking somebody else to assist Fortunato considering that a measly sum of thirty
pesos was involved. Evidently, it did not occur to Flores that the document he himself prepared pertains to the
transfer altogether of Fortunatos property to his mother-in-law. It is precisely in situations such as this when the
wisdom of Article 1332 of the Civil Code readily becomes apparent which is to protect a party to a contract
disadvantaged by illiteracy, ignorance, mental weakness or some other handicap.[58]
In sum, we hold that petitioner is no longer entitled to the right of redemption under Article 1632 of the Civil
Code as Lot No. 2319 had long been partitioned among its co-owners. This Court likewise annuls the contract of
sale between Fortunato and private respondent on the ground of vitiated consent.
WHEREFORE, premises considered, the decision dated 25 March 1998 of the Court of Appeals is hereby
REVERSED and SET ASIDE and the decision dated 11 March 1994 of the Regional Trial Court, Branch 58, San
Carlos City, Negros Occidental, dismissing both the complaint and the counterclaim, is hereby REINSTATED. No
costs.
SO ORDERED.
G.R. No. L-4656 November 18, 1912

RICARDO PARDELL Y CRUZ and

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

Gaspar de Bartolome, in his own behalf.

B. Gimenez Zoboli, for appellees.

TORRES, J.:

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

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

1. A house of strong material, with the lot on which it is built, situated on Escolta Street,
P6,000.00
Vigan, and valued at

2. A house of mixed material, with the lot on which it stands, at No. 88 Washington Street,
1,500.00
Vigan; valued at

3. A lot on Magallanes Street, Vigan; valued at 100.00

4. A parcel of rice land, situated in the barrio of San Julian, Vigan; valued at 60.00

5. A parcel of rice land in the pueblo of Santa Lucia; valued at 86.00

6. Three parcels of land in the pueblo of Candon; valued at 150.00

Total 7,896.00

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

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

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

The defendants, in their counter claim, repeated each and all of the allegations contained in each of the paragraphs of
section 10 of their answer; that the plaintiffs were obliged to pay to the administrator of the said property the
remuneration allowed him by law; that, as the revenues collected by the defendants amounted to no more than
P3,654.15 and the expenditures incurred by them, to P6,252.32, it followed that the plaintiffs owed the defendants
P1,299.08, that is one-half of the difference between the amount collected from and that extended on the properties,
and asked that judgment be therefore rendered in their behalf to enable them to collect this sum from the plaintiffs,
Ricardo Pardell and Vicenta Ortiz, with legal interest thereon from December 7, 1904, the date when the accounts
were rendered, together with the sums to which the defendant Bartolome was entitled for the administration of the
undivided properties in question.
By a written motion of August 21, 1905, counsel for the plaintiffs requested permission to amend the complaint by
inserting immediately after the words "or respective appraisal," fifth line of paragraph 5, the phrase "in cash in
accordance with the assessed value," and likewise further to amend the same, in paragraph 6 thereof, by substituting
the following word in lieu of the petition for the remedy sought: "By reason of all the foregoing, I beg the court to be
pleased to render the judgment by sentencing the defendants, Gaspar de Bartolome and Matilde Ortiz Felin de
Bartolome, to restore and deliver to the plaintiffs an exact one-half of the total vale of the undivided properties
described in the complaint, such value to be ascertained by the expert appraisal of two competent persons, one of
whom shall be appointed by the plaintiffs and the other by the defendants, and, in case of disagreement between
these two appointees such value shall be determined by a third expert appraiser appointed by the court, or, in a
proper case, by the price offered at public auction; or, in lieu thereof, it is requested that the court recognize the
plaintiff, Vicenta Ortiz, to be vested with a full and absolute right to an undivided one-half of the said properties;
furthermore, it is prayed that the plaintiffs be awarded an indemnity of P8,000 for losses and damages, and the
costs." Notwithstanding the opposition of the defendants, the said amendment was admitted by the court and counsel
for the defendants were allowed to a period of three days within which to present a new answer. An exception was
taken to this ruling.

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

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

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

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

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

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

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

Article 394 of the Civil Code prescribes:

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

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

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

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

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

With respect to the second question submitted for decision to this court, relative to the payment of the sum
demanded as a counterclaim, it was admitted and proved in the present case that, as a result of a serious earthquake
on August 15, 1897, the said house on Calle Escolta was left in ruins and uninhabitable, and that, for its
reconstruction or repair, the defendants had to expend the sum of P6,252.32. This expenditure, notwithstanding that
it was impugned, during the trial, by the plaintiffs, was duly proved by the evidence presented by the defendants.
Evidence, unsuccessfully rebutted, was also introduced which proved that the rents produced by all the rural and
urban properties of common ownership amounted, up to August 1, 1905, to the sum of P3,654.15 which, being
applied toward the cost of the repair work on the said house, leaves a balance of P2,598.17, the amount actually
advanced by the defendants, for the rents collected by them were not sufficient for the termination of all the work
undertaken on the said building, necessary for its complete repair and to replace it in a habitable condition. It is
therefore lawful and just that the plaintiff Vicenta Ortiz, who was willing to sell to her sister Matilde for P1,500, her
share in the house in question, when it was in a ruinous state, should pay the defendants one-half of the amount
expanded in the said repair work, since the building after reconstruction was worth P9,000, according to expert
appraisal. Consequently, the counterclaim made by the defendants for the payment to them of the sum of P1,299.08,
is a proper demand, though from this sum a reduction must be made of P384, the amount of one-half of the rents
which should have been collected for the use of the quarters occupied by the justice of the peace, the payment of
which is incumbent upon the husband of the defendant Matilde, as aforesaid, and the balance remaining, P915.08, is
the amount which the plaintiff Vicenta must pay to the defendants.

The defendants claim to be entitled to the collection of legal interest on the amount of the counterclaim, from
December 7, 1904. This contention can not be sustained, inasmuch as, until this suit is finally decided, it could not
be known whether the plaintiffs would or would not be obliged to pay the sum whatever in reimbursement of
expenses incurred by the plaintiffs in the repair work on the said house on Calle Escolta, whether or not the
defendants, in turn, were entitled to collect any such amount, and, finally, what the net sum would be which the
plaintiff's might have to pay as reimbursement for one-half of the expenditure made by the defendants. Until final
disposal of the case, no such net sum can be determined, nor until then can the debtor be deemed to be in arrears. In
order that there be an obligation to pay legal interest in connection with a matter at issue between the parties, it must
be declared in a judicial decision from what date the interest will be due on the principal concerned in the suit. This
rule has been established by the decisions of the supreme court of Spain, in reference to articles 1108, 1109, and
1110 of the Civil Code, reference on April 24, 1867, November 19, 1869, and February 22, 1901.
With regard to the percentage, as remuneration claimed by the husband of the defendant Matilde for his
administration of the property of common ownership, inasmuch as no stipulation whatever was made in the matter
by and between him and his sister-in-law, the said defendant, the claimant is not entitled to the payment of any
remuneration whatsoever. Of his own accord and as an officious manager, he administered the said pro
indiviso property, one-half of which belonged to his wife who held it in joint tenancy, with his sister-in-law, and the
law does not allow him any compensation as such voluntary administrator. He is merely entitled to a reimbursement
for such actual and necessary expenditures as he may have made on the undivided properties and an indemnity for
the damages he may have suffered while acting in that capacity, since at all events it was his duty to care for and
preserve the said property, half of which belonged to his wife; and in exchange for the trouble occasioned him by the
administration of his sister-in-law's half of the said property, he with his wife resided in the upper story of the house
aforementioned, without payment of one-half of the rents said quarters might have produced had they been leased to
another person.

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

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

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

Arellano, C.J., Mapa, Johnson, Carson and Trent, JJ., concur.

G.R. No. L-2812 October 18, 1906

LONGINOS JAVIER, plaintiff-appellee,
vs.
SEGUNDO JAVIER, ET AL., defendants-appellants.

Hartigan, Rohde and Gutierrez, for appellants.

Chicote, Miranda and Sierra, for appellee.

WILLARD, J.:

This case relates to the ownership of the lot, and of the house standing thereon, No. 521 Calle Real, Malate, Manila.
The court below found that the land belonged to the plaintiff as administrator of the estate of his father, Manuel
Javier, and that the defendant Isabel Hernandez and Manuel Ramon Javier, her son, are the owners of the house
standing on the lot. Judgment was rendered in favor of the plaintiff for the possession of the property, but giving the
defendants a reasonable opportunity to remove the house.

The evidence sustains the findings of fact to the effect that the land belongs to the estate represented by the plaintiff.
There was evidence to show that the land was, in 1860, in the possession of Manuel Javier, the father of the
defendant Segundo Javier, and that since that time it has been occupied by his children and that no one of these
children ever made any claim to the ownership thereof, and no one them ever occupied the property as owner.

Manuel Ramon Javier, testifying as a witness, made no claim to the ownership of the land, and testified simply that
the result of his investigations into the question of ownership showed that there was a great confusion in regard
thereto.

The appellants claim that this action can not be maintained by the administrator of the estate of Manuel Javier, but
that it should be maintained by all the heirs of the deceased. The right of judicial administrator to recover the
possession of real property belonging to the estate of the deceased was recognized in the case of
Alfonso vs.Natividad 1 (4 Off. Gaz., 461; secs. 702, 703, and 704 of the Code of Civil Procedure).

The appellants claim in their brief that they were possessors in good faith, and by reason thereof and of the
provisions of article 451 of the Civil Code they can not be compelled to pay rent. It is to be observed, however, that
the appellants do not come within the definition of a possessor in good faith found in article 433 of the Civil Code
cited in their brief. As said by the appellants themselves in that brief, the two defendants, Segundo Javier and his
wife, Isabel Hernandez, always believed that the land did not belong to them but belonged to the estate of Manuel
Javier. It is to be observed, moreover, that the judgment of the court does not allow any recovery at all for the use or
occupation of the house, and the recovery of rent for the use of the land is limited to the time elapsed since April 24,
1904, when a demand was made upon the defendants for the possession of the property.

It is also claimed by the appellants that, in accordance with article 453 of the Civil Code, they are entitled to be
reimbursed for the expenses of constructing the house. These expenses are only allowed in accordance with the
article cited by the appellants to a possession in good faith, and the appellants were not such possessors. lawphil.net

It is claimed finally by the appellants that the case should be decided by an application of the principles of law
meant that community of property existed because the house was owned by the appellants and the land by the
plaintiff, the contention can not be maintained, for such a condition of affairs does not create a community of
property within the meaning of that term as it is used in title 3, book 2 of the Civil Code. If, on the other hand, it is
itself belonged to the heirs of Manuel Javier, and that two of the defendants were such heirs, it can be said that the
decision of the court below was fully as favorable to the appellants as it could be.

Article 397 of the Civil Code relates to improvements made upon the common property by one of the coowners. The
burden of proof was on the appellants to show that the house was built with the consent of their cotenants. Even if a
tacit consent was shown this would not require such cotenants to pay for the house. (8 Manresa, Commentaries on
Civil Code, p. 396.)
The judgment of the court below allowed the appellants to remove the house within a reasonable time. Whether this
judgment was erroneous as far as the appellee is concerned, we need not inquire, because he has not appealed from
the judgment.

The judgment of the court below is affirmed, with the costs of this instance against the appellants.

After the expiration of twenty days from the date hereof let judgment be entered in accordance herewith and ten
days thereafter let the case remanded to the court below for proper action. So ordered.

Arellano, C.J., Torres, Mapa, Johnson, Carson and Tracey, JJ., concur.

G.R. No. L-7180 March 30, 1912

RAFAEL ENRIQUEZ, ET AL., plaintiffs-appellants,

vs.
A.S. WATSON & CO. LTD., defendant-appellee.
Rohde and Wright for appellants.
W. A. Kincaid and Thomas L. Hartigan for appellee.

TRENT, J.:

This action was brought on April 12, 1911, by Rafael, Antonio, Trinidad, Cayetano, Rosario, Gertrudis and Carmen
Enriquez, and Antonio Gascon (the latter being a minor, was represented by his guardian ad litem), as owners and
lessors of the property Nos. 72, 74, an 76 Escolta, city of Manila, against A. S. Watson & Company, Ltd., as lessee
of said property. The plaintiffs allege that on June 22, 1906, Rafael, Carmen, Antonio, and Trinidad Enriquez and
Antonio Gascon executed to the defendant a contract of mortgage and lease upon their participation in that property;
that on January 19, 1907, the other plaintiffs executed the same mortgage and lease in favor of the defendant upon
their interest in the same property; that the said contract of lease has been terminated by the payment by the
plaintiffs to the defendant of the principal and interest of the mortgage; that the said contract of lease is null and of
no effect by reason of the minority of the plaintiff Antonio Gascon, who is still a minor; that the defendant, after
June 22, 1906, made all the repairs necessary to its business with the approval of the plaintiffs.

The plaintiffs further allege that there exists in that building a principal wall about one meter in thickness and five
meters in height, which extends from the front of the building on the Escolta to the rear of the same; that upon this
wall rests the second floor of the building and that it is necessary to safely maintain the building against earthquakes
and typhoons; that on 11th of April, 1911, the defendant commenced to destroy and remove the said wall and was
on the date of the filing of this complaint actually engaged in the destruction and removal of the same; and unless
restrained, would continue such destruction and removal, to the irreparable injury of the plaintiffs; and that the
defendant has varied the form and substance of the leased premises. The plaintiffs therefore prayed that the
defendant be prohibited from destroying and removing said wall; that it be ordered to rebuild or replace that part
which it had removed or destroyed; and that the contract of lease be declared terminated and rescinded.

On the 12th day of April, 1911, a preliminary injunction was issued by the Court of First Instance, prohibiting and
restraining the defendant from continuing the removal and destruction of the wall in question, and requiring it to
appear in court on the 17th of that month to show cause why such preliminary injunction should not be continued in
force during the pendency of this action.

On the 21st of that month, the defendant company answered, admitting the allegations as to the ownership,
mortgage, and lease, contained in paragraphs 1, 2, an 3 of the complaint, and denying all the other allegations
therein. The defendant set up by way of special defense that the wall in question was not a principal wall and did not
extend the entire length of the building; that said wall consisted of two shells filled with mortar; that it was very old,
deteriorated, and weak; that it was necessary, in order to conserve the property, to remove said wall and to substitute
it with other material; that the wall in question is so located that it and its subtenant are deprived of the use of a large
part of the ground floor fronting on the Escolta; that under Clause M of the contract of lease, the defendant has the
right to remove the wall, substituting in lieu thereof other material, this being required by the business established in
said building.

As a second special defense, the defendant admits the payment of the mortgage by the plaintiffs, but alleges that the
contract of lease is independent of the mortgage contract, and that in satisfying the mortgage of the defendant, the
leasehold was specifically continued in force by all parties.

As a third special defense, the defendant alleges that under the provisions of Paragraph M of the contract of lease, it
has expended the sum of over sixty thousand pesos in improving the leased premises, and that on making such
expenditure it believed that it would be reimbursed by enjoying the occupancy and subrenting of the premises.

On the 24th day of May, 1911, The Philippines Drug Company, a corporation organized under the laws of the
Philippine Islands, appeared and asked leave to intervene as an interested party. This leave being granted, it alleged
that it is the actual owner of the pharmacy situated in the leased premises, which formerly belonged to the defendant
A. S. Watson & Company, Ltd.; and that the defendant sublet to it the ground floor of the leased property under the
same conditions as are expressed in the original contract of lease. The intervener further alleged, as did the
defendant, the necessity for the removal of the wall in question in order to give it more space as required by its
business, and that the removal of this wall was authorized in Paragraph M of the original lease.

The trial court, after considering the evidence presented, making a personal inspection of the leased premises, and
hearing the arguments of counsel for both parties, and after making its findings of facts and conclusions of law,
entered the following decree, to wit:

The court denies the rescission and declaration of nullity of the contract of lease demanded by the
plaintiffs, declaring such contract of lease to be valid and subsisting and binding upon the parties thereto,
and upon the sublessee and intervener, the Philippine Drug Company, and continues and declares final the
preliminary writ of injunction issued herein on the 12th day of April, 1911, but modifying the same by
permitting the defendant, A. S. Watson & Co. Ltd., or the intervener, the Philippines Drug Company, to
remove the wall in question on the condition that they substitute it with properly constructed concrete
pillars and arches and such other work as may be necessary as specified in Finding No. 17 of this judgment
using such temporary shoring and bracing as shall be necessary to insure the safety of the building while
such change is being made, which work of removal and substitution may be commenced and carried out
upon the defendant or intervener, or both, filing herein an undertaking in the sum of P10,000 with sureties
approved by the court, conditioned that it or they will reimburse the plaintiff lessors for any and all damage
that may be caused the leased premises by a failure to take proper precautions and employ proper means to
safeguard and protect the building while such work of removal and substitution is being accomplished.

From this judgment the plaintiffs appealed and make the following assignment of errors:

1. The judgment is erroneous in not having declared rescinded the contract of lease.

2. The judgment is erroneous in finding that the lessee and sublessee have the right to change the form and
substance of the property leased.

3. The judgment is erroneous in finding that the lessee acted in good faith in beginning the destruction of
the wall. believing that under the contract of lease it had the right to do this.

4. The judgment is erroneous in not finding that the building is weakened by the destruction of the wall.

5. The judgment is erroneous is so far as it modifies the preliminary injunction.

6. The judgment is erroneous in not declaring perpetual the preliminary injunction.

7. The judgment is erroneous in the dispositive part thereof relating to the form and manner of making the
modifications in the property because it does not relate to anything at issue in the case.

8. The judgment is erroneous in the part relating to the form and manner of making the modifications in the
property because it does not dispose of anything judicially, but, on the contrary, gives permission to the
opposing parties without commanding them to do anything.

9. The judgment is erroneous because it does not order the repair of the destruction made in the wall.

10. The judgment is erroneous because it declares valid the contract of lease.

11. The court erred in denying the motion for a new trial.

All the questions in this case may be merged into one, and that is: Did the trial court err in failing to declare the
contract of lease voidable or rescinded for one of two reasons: first, because of the minority of one of the lessors;
and second, because neither the defendant nor intervener had authority under the contract of lease to remove the wall
in question? Plaintiffs do not now insist that the contract of lease was terminated on the payment of the mortgage.

The eight plaintiffs each have a one-eight undivided interest in the leased premises. The property was leased to the
defendant for a period of twelve years with permission to renew the lease for a further period of six years. Seven of
these plaintiffs were of age when they executed this contract of lease. The other, Antonio Gascon, was a minor. At
the time this contract of lease was executed, the minor was represented by his judicial guardian. The guardian
having obtained authority or permission of the court to enter into this contract of lease for and on behalf of his ward,
the action of the guardian in executing said contract was approved by the probate court.

Article 1548 of the Civil Code reads:

ART. 1548. The husband can not give in lease the property of the wife, the father and guardian, that of the
son or minor, and the administrator of property, not having a special power, for a period exceeding six
years.

Article 398 of the same code provides:

ART. 398. The decision of a majority of the coowners as to the management and better enjoyment of the
thing owned in common shall be obligatory.

There shall be no majority, unless the resolution has been adopted by the coowners representing a majority
of the interests which constitute the object of the community.

Should there be no majority, or the resolution of the latter is seriously prejudicial to the parties interested in
the thing owned in common, the judge, at the instance of a party, shall decree what may be proper,
including the appointment of an administrator.

xxx xxx xxx

Counsel for the plaintiffs do not claim that the contract of lease which was made for a period of more than six years
is seriously prejudicial to the interests of the minor, nor do they claim that said contract, of itself, prejudices in any
way the minor's interest.

The supreme court of Spain had under consideration this very question in its resolution of April 26, 1907 (vol. 15
Jurisprudencia referente al Codigo Civil, p. 194). In this case, a contract of lease for twelve years, executed by one
of the coowners of a certain property, one of whom was a minor, had been presented for registry. Registry was
refused for the reason, among others, the majority of the coowners lacked authority to execute said contract of lease.
It was argued that the majority of the coowners, in their enjoyment of the control of the management and
administration of the thing, acted in a representative or an administrative capacity in regard to the minority. In
determining the questions presented in this case, the court said:

That for the administration and better enjoyment of the thing, the decision of the majority of the coowners
is obligatory, and that there is no majority, unless the decision is made by the coowners, that represent the
majority of the interests that constitute the object of the community, are general rules laid down in article
398 of the Civil Code, governing community of property.

The contract of lease is by its nature and purpose one of the means of enjoyment or development of
nonfungible property, and, in this concept, may be agreed upon by the coowners of a thing, provided
always that they represent a majority of the interests of the community, the decision being obligatory for all
by virtue of the powers that are expressly conferred upon them by virtue of said provisions.
 If, indeed, the contract of lease of real property for a period exceeding six years, or in which the rents are
advanced for more than three years, constitutes a real right inasmuch as it is subject to registry, according
to the decision of this court in various resolutions, this principle of law, which has been applied in the sense
of not permitting the execution of such a contract to those who administer the goods of others, and
especially to prevent agents from executing such a contract without special authority for the same, in
accordance with the provisions of article 1713 of the said code, is not opposed to the principle of law laid
down in said article 398; taking into consideration the legal character and peculiar attributes of community
of property, which makes it convenient and necessary that those who have less interest therein should
submit to those who have a greater participation therein, in all that refers to the exploitation and ordinary
enjoyment of the same, the rule is established that the enjoyment of the common thing must be subject to
the will of the majority, without distinguishing and limiting the period or the form of the enjoyment;
therefore, the contract of lease being the same in essence whatever the term for which it is constituted, such
a contract must be considered as an act of mere administration, and subject to contract by the decision of
the majority of coowners, the other interested parties always having the right to appeal to the court when
the decision is gravely prejudicial to them according to the provisions of the same article 398.

This doctrine was recognized by the supreme court in its decision of June 30, 1897, and of the 8th of July,
1902, and by this court in its resolution of May 29, 1906, considering as included in the powers conferred
in said article, leases exceeding a period of six years, decided upon by a majority of the coowners of a
property possessed in common.

The contract of lease of the property referred to in these proceedings, having been agreed upon by the
coowners representing the majority of the interests in the same, they were possessed of sufficient legal
capacity by virtue of what is already said, and it is, therefore, subject to registry.

In the execution of the contract of lease under consideration, the minor was, as we have said, represented by his
judicial guardian, who not only asked the court for and obtained authority to execute this contract of lease on behalf
of this ward, but his act, after the execution, was approved by the court. The interest of the minor has not been
prejudiced by reason of the fact that this contract of lease was executed for a term of more than six years. Under the
doctrine laid down by the supreme court of Spain, it would appear that this contract of lease would be valid if the
minor had not been represented by his guardian. The minor having been represented by his duly appointed guardian,
there can be no question about the validity of this contract of lease.

The principal question is whether or not the appellees have violated the terms of the contract of lease and thereby
entitle appellants to have said contract of lease rescinded.

Before considering the contract in question, it might be well to examine the right of the lessee to make changes in
the property leased, if there were no express stipulation therefor in the contract.

Article 1573 of the Civil Code provides:

A lessee shall have, with regard to the useful and voluntary improvements, the same rights which are
granted the usufructuary.

Article 487 of the same code reads:

The usufructuary may make on the property which is the object of the usufruct any improvements, useful or
for recreation, which he may deem proper, provided he does not change its form or substance; but he shall
have no right to be indemnified therefor. He may, however, remove said improvements, should it be
possible to do so without injury to the property.

The result is that the lessee may make any improvements, useful or for recreation, in the property leased that he may
deem proper, provided that he does not change its form or substance. The same obligation is expressed in articles
487 and 489, and in so far as the form of the thing is concerned, in article 1557. According to article 487 and 1557,
the obligations of the lessee and the lessor are the same in the absence of any agreement to the contrary, in so far as
the conservation of the form of the thing leased is concerned. This question of conserving the form and substance of
the thing leased or the object of the usufruct has been passed upon at various times by the courts.

In the case of the Manila Building and Loan Association and Peñalosa (13 Phil. Rep., 575), this court said:

If the object leased were a house, it is evident that the lessee might effect such improvements for use,
recreation or comfort as would not change its form or substance as he deemed fit; he could build a tower or
luxurious pavilion more expensive than the house itself, to which, at the expiration of the lease, the owner
of the house would have no right whatever, unless the lessee could not remove the same without injury to
the house to which it was attached as an improvement, excepting of course the right to cause the same to be
demolished so that the house might be returned to him in the same condition that the lessee received it; . . . .

The supreme court of Spain, in its judgment of June 24, 1905, volume 14 of the Jurisprudencia referente al Codigo
Civil, page 38, had under consideration the interpretation of this phrase in a case in which the lessee asked for the
rescission of the lease because the lessor had altered the form of the thing leased. The facts were that the lessee had
leased the house for the period of ten years, and at the time of the execution of the contract of lease, there was a
vacant lot next to the house and 13 windows of the house lease overlooked this lot. Thereafter the owner of the
adjacent lot constructed an edifice thereon which gave rise to litigation between the lessor and the owner of the
adjacent lot, which litigation was settled by the lessor and the owner of the said lot, the latter being permitted to
cover the windows of the leased property, and the former allowed to open in the partition wall of the latter's garden
two large and two small windows of specified dimensions, under certain conditions. The construction was
continued, with the result that such construction effectually closed and covered the 13 windows and the balcony,
depriving the property leased of the light previously received by the same. For the purpose of obtaining better light,
many changes were made and much work done in the interior of the leased house, the final result being that some of
the rooms of the house were darkened completely, others receiving poor and indirect ventilation. The court, in
refusing to rescind the contract of lease, said:

It does not appear that there is error committed by the trial court in its decision as set out in the first assignment of
error, because, even though the noncompliance by the lessor of his obligations, among which was that of
maintaining the lessee in the peaceable enjoyment of the lease during the period of the contract, and the prohibition
to change the form of the thing leased, confers upon the lessee the right to ask for the rescission of the contract, such
circumstances are not found in the present case since the trial court says that the appellant was not disturbed in the
possession of the house, the object of the lease, nor was he impeded from using the premises as a tavern, for which
use he had intended the same, and these findings of fact have not been legally impugned.

The decision also states that the changes made in the property did not change the form of the same in the sense and
concept covered by article 1557 of the Civil Code. Notwithstanding that the findings on the point contain legal
reasoning now corresponding to this court, the interpretation of this article can not be made in general and absolute
terms not defined by law, because as a circumstantial fact depending in each case on the peculiar conditions of the
thing leased, there exists no reason in the case at bar upon which to base the conclusion that the trial court erred,
having in mind that the particular use of the same as a tavern was not interfered with, as held in its decision, and also
the fact set out in its decision, and not contradicted in any manner, namely, that the changes and alterations made
were beneficial, tolerated by Sabay, and consented to by the person to whom Sabay transferred his rights under the
contract of sublease.

The two last reasons given for the rescission of the contract lack force and weight, because, in accordance
with the sense and concept of article 1561 of the said Civil Code, the property must be returned at the
expiration of the term of lease with the changes made in the same, and these do not involve, as has already
been said, any variation or change of form or any interruption of the peaceable enjoyment of the lease and
because it does not appear from the facts that the trial court accepted as proven that the appellant suffered
disturbance of his rights for which he had been compelled to become responsible to the lessor, and he, not
having done so, there is no legal reason to apply, as is attempted, the provisions of article 1560 of the code
referred to.
Manresa, in volume 10 of his commentaries on the Civil Code, pages 534, 535, [488, 489] says:

The question was discussed very energetically as to whether the lessee of a city property leased for a stated
industrial purpose, could install machinery propelled by steam in substitution for the utilities, implements,
and contrivances which were used before the general adoption of such machinery. The installation of
modern machinery and its ordinary operation, at once caused a deterioration to the estate much greater than
the use of the former apparatus, besides the accidents which might occur and which produce very great
damage to the thing leased. Therefore, based upon this consideration, it was said that the lessee could not
make this substitution because it implied a bad and prejudicial use of the thing and therefore very different
from that diligence of a good father in its use to which he had obligated himself.

As Laurent says, there arise here two contrary interests and two diverse tendencies. The owner has in view
the stability of the structure and fears every innovation which may compromise its preservation. The
manufacturer finds himself obliged to keep abreast of the development of his industry, to make changes, if
he does not wish to perish, and his interests demand that he put into practice the inventions which increase
his profits, even though the edifice may suffer. The owner commences to resist, adds this writer, but
competition forces the manufacturer, and the owner ends by yielding, if he does not wish to remain
unproductive.

This is the essence of the policy pursued by foreign decisions, where the question has been so much more
important than in our own country. Until the year 1860, judicial decisions were inclined to favor the owner
of the property. But from that year the rights of industry have been recognized with ever increasing
clearness. It has been considered that from the moment the lease is drawn up, in which is stated the
industrial use to which the lessee desires to put the thing leased, the claims of the industry to which the
object of the lease is to be devoted have been determined, and the lessee can not be condemned to a
stagnation which would be uneconomical, and, these facts admitted, the logical consequences must
necessarily follow: the lessor can not prevent the lessee from adopting the improvements of his industry;
the acts of the parties in making the stipulations in the lease will do the rest.

The lessee may make on the property which is the object of the lease any improvements, useful or for recreation,
which may be deem proper, provided he does not change its form or substance. He is obligated to use the thing
leased as a diligent father of a family would, and to return the thing leased at the expiration of the lease in the same
condition in which he received it, except what may have been destroyed or impaired by time or unavoidable reasons.
(Arts. 1573, 487, 1555, and 1561, Civil Code.)

The supreme court of Spain recognizes the fact that no ironclad rules for the interpretation of these articles can be
laid down which would govern all cases. These provisions must be applied according to the facts and circumstances
of each case. Manresa is inclined to the view that industrial development should be taken into consideration in the
determination of questions involved in the application of said articles. The provisions of these articles are general
rules of law, and, like most general propositions, are not to be accepted without limitation or reserve, under any and
all circumstances. They must be interpreted in the light of the growth of civilization and varying conditions. Certain
obligations are placed upon the lessee to prevent lawless acts which would result in waste or destruction. The
importance of these obligations to the lessor cannot be denied. Especially are they valuable and essential to the
protection of a landlord who rents his premises for a short time. Suppose he has fitted his premises for certain uses
and leases them for such uses for a short term. He would then be entitled to receive them back at the end of the term
still fitted for those same uses, and he may well say that he does not choose to have a different property returned to
him from that which he leased, even if it be found to be of greater value of reason of the change. But suppose that a
usufructuary who has a life interest in an estate should receive as such a hemp hacienda, and that in a short time this
hacienda should become permanently unproductive through disease or death of the plants, or by change of the
market conditions, and the land to have become far more valuable, by reason of new conditions, as rice or sugar
land. Is the usufructuary to be compelled to preserve or renew the useless hemp fields and forego the advantages to
be derived from a different use? Or, suppose a life tenant should change warehouses into dwelling houses on the
ground that by change of conditions the demand for warehouses had ceased and the property had become worthless,
whereas it would be very valuable when fitted for dwelling houses. Would this be such a change in the form or
substance of the thing leased as to forfeit the interest of the tenant? Again, a lessee for a long term received, during
very prosperous times, a hemp hacienda upon which were constructed large and valuable storehouses in which were
the old style hand-presses, but new. Later, on account of a complete change in conditions due to the market and the
method of pressing hemp by steam, the lessee allowed the buildings and presses, which had become useless, to fall
into decay rather than incur the expense of repair. Would a prudent owner of the fee, if in possession, have done the
same? These questions naturally suggest their own answer. The radical and permanent changes of surrounding
conditions must always be an important consideration in the determination of such questions. The interpretation that
"if the man is too long for the bed his head should be chopped off rather than enlarge the old bed or purchase a new
one" should not be given those provisions of the Civil Code regarding the obligations of lessees.

Let us now turn to the contract of lease and the evidence presented. In this contract of lease there are two clauses
which deserve careful consideration.

Clause K:

All the expenditures for cleaning, painting, and repairs which the building may require and all that is
ordered done by the Board of Health, will be at the expense of the lessee, A. S. Watson and Company,
Limited.

Clause M:

The lessee may make such works on the building as the business which it has established therein requires,
provided always that neither the strength nor the value of the said building is impaired.

It will be noted that the word "reparaciones" is used in Clause K, and the word "obras" in Clause M. Counsel for the
appellants insist that the word "obras" as thus used means the same as "reparaciones." The Encyclopedic Dictionary
of the Castilian Language (Diccionario Enciclopedico de la Lengua Castellana) defines these words as follows:

OBRA:

1. A thing made or produce by an agent.

xxx xxx xxx

4. A building in course of construction.

REPARACION:

1. The action an effect of repair. (Reparar-verb: To mend, to straighten, or correct the damage suffered by
something.)

The New Dictionary of the Castilian Language (Nuevo Diccionario de la Lengua Castellana) defines the same words
as follows:

OBRA:

Anything made, created, or produced by the some power or agent. Any construction of architecture,
masonry, or carpentry, applied especially to buildings in course of construction or repair, as: "There are
three jobs in Calle Hortaleza. Everything in my house is disordered and topsy-turvy because of the work."

REPARACION:
 The act or effect of repairing or of being repaired. The fact of the repairing, in the sense of renewing or
improving something.

The only synonym given in this work for "obra" is produccion."

It may be that repairs are included in the definition of "obras." Nevertheless, it cannot be denied that the word
"obras," used in its general sense, has a far more comprehensive meaning than just simple repairs.

Sections 290 and 293 of the Code of Civil Procedure, provide:

SEC. 290. Terms of a writing presumed to be in their ordinary sense. — The terms of a writing are
presumed to have been used in their primary and general acceptation, but evidence is nevertheless
admissible that they have a local, technical or otherwise peculiar signification, and were so used and
understood in the particular instance, in which case the agreement must be construed accordingly.

SEC. 293. Where intention of different parties to instrument not the same. — When the terms of an
agreement have been intended in a different sense by the different parties to it, that sense is to prevail
against either party in which he supposed the other understood it; and when different constructions of a
provision are otherwise equally proper, that is to be taken which is the most favorable to the party in whose
favor the provision was made.

In the case at bar no proof has been presented tending to show that the word "obras" was used in a technical or
special sense, or that it has a local signification, and therefore, it must be considered as used in its ordinary and
general sense. If there exist any ambiguity and if the meaning that the appellants give to the word "obras" is proper,
the meaning given by the appellees is likewise proper, consequently, we must apply the rule laid down in section
293, above quoted, for the reason that the stipulation contained in Clause M of the contract is a stipulation in the
favor of the lessee.

Counsel for appellants insist that in order to define the meaning of the word "obras" we should refer to the articles of
the Civil Code that deal with contracts of lease. This might be done in those cases where the intention of the parties
could not be ascertained from either the contract itself or from the conduct of the parties in executing and carrying
out the same. In the case at bar, all that is necessary is to give a fair and reasonable interpretation to the meaning of
clause M of the contract of lease. This clause contains certain limitations on the exercise of the right to make
alterations (obras): first, the alterations (obras) proposed to be made must be required by the business; second, such
alterations must not injure the solidity of the building; and third, the same must not prejudice the value of the
building. But it is insisted, as we have said, that the word "obras" in clause M must be interpreted to mean
"reparaciones" as used in Clause K. Clause K imposes upon the lessee the obligation to make the repairs required by
the building for its conservation. If the words have exactly the same meaning and were intended by the parties to
mean the same thing, then the insertion of clause M would only have had the effect of giving to the lessee the right
to keep the building in repair, when, as a matter of fact, Clause K made it its duty to repair the building. As we
understand the contract, in Clause K a duty is imposed upon the lessee, while in Clause M a right is given to it. In
Clause K the word "reparaciones" is used in connection with the duty, and in clause M the word "obras" is used in
connection with the right. If the contracting parties had intended that the two words be used in the same sense they
would have so stated, or they would have eliminated Clause M entirely as being useless, as it is meaningless to say
that when a duty is imposed upon a person it is necessary to expressly give him a right to perform that duty. If he did
not have the right to perform that duty, the same would not have been imposed upon him. The stipulations in Clause
M are expressed as clearly and explicitly as they could have been under the circumstances. At the time of the
execution of this contract of lease, it was impossible to know what would be the requirements of the business during
its term of eighteen years. It was likewise impossible for the parties to have then agreed in detail as to the changes
that might be necessary. The lessee wished to reserve to itself the right to make the changes in the property required
by its business, and none of the parties could anticipate what might be required during this long period of time. This
right was conferred upon the lessee by the lessors, but the right, as we have said, had its limitations: that is, the
lessee could not prejudice the solidity or the value of the building without breaking the contract.
The question was raised as to whether the conduct of the parties in carrying out the terms of this lease has been such
as to show or indicate their intention or understanding of the meaning of the word "obras" when they inserted this
word in Clause M. Upon this point the trial court said:

That under and by virtue of the said contract of lease, the defendant company entered into possession of the
leased premises, making therein alterations and repairs at a cost of some P60,000, including the removal of
the whole front of the building facing upon the Escolta and replacing the same upon the new street line,
established by the city of Manila, with a modern and a decorative commercial front; the removal of the
heavy tiled roof and the replacing of the same with a light galvanized roof; the removal of various walls
and replacing the same with steel columns and girders; the tearing down and rebuilding of a part of the
building and the adding thereto of a camarin upon the Pasig River; and the building of a river wall and
reclamation of a considerable amount of ground; and which alteration included the removal of that part of
the wall in question which extended from point A to point G on the plan of the premises introduced in
evidence as defendant's Exhibit No. 9, all of which repairs, alterations and improvements, were made with
final approval of the plaintiffs, although after much controversy and many disagreements, and to which
alterations and improvements the plaintiffs contributed the sum of about eighteen hundred pesos paid by
the city of Manila for the expropriation for street purposes of the small strip along the front of the building
heretofore mentioned.

These findings of fact are, we think, fully supported by the evidence. The result is that these important and material
changes, which include the removal of a great portion of the very wall in question, were made by virtue of the
contract of lease itself. It is true that the owners objected at first, but afterwards consented in accordance with the
provisions of Clause M, and not by reason of any subsequent specific agreement. After all, that the defendants have
the right under the law and the provisions of Clause M of the contract of lease to remove the wall in question, cannot
be seriously doubted, provided always that neither the solidity of the building nor its value be impaired.

Let us now determine whether or not a removal of the wall in question (1) will prejudice either the solidity of the
building or its value, and (2) if it is required by the business of the defendants.

The walls which the defendants and interveners propose to remove and substitute in lieu thereof other material is
composed of two outer shells of Guadalupe or Meycauayan stone, filled with lime, plaster and rubber, the two shells
being bound together by stones laid transversely, the whole wall was so formed being about one meter thick and
extending from the front of the building a distance of about 38 meters toward the Pasig River. This wall is about
four meters high, extending from the ground floor to the second floor. The joists and girders supporting the second
floor are embedded in said wall. There are two actual openings in this wall, with three doors and an arch, which
have been walled up. The wall is in good condition, except that part removed by the defendants before the
commencement of this action, and said wall is one of the longitudinal walls, all being approximately of the same
thickness. The wall in question divides the east half of the ground floor of the building approximately in its center
and sustains a part of the weight of the second floor of this east half, together with a partition forming one of the
divisions of the second floor. But it does not sustain any of the weight of the roof, this weight being distributed by
means of trusses to the outer walls of the building. About one-third of this wall, or that part nearest the Pasig has
already been removed, and the removal of the same was approved by the owners. The interveners now propose to
remove the remaining two-thirds and substitute in lieu thereof other material, using the material of the old wall for
filing up certain openings in other walls of the building. This old wall, according to the experts, offers very little
resistance to lateral shocks or motions. Practically all of the resistance of lateral shocks or motions is furnished by
the cross-walls. Again, according to the opinion of the experts the building will be greatly strengthened against
earthquakes or unusual shocks or force, and its durability increased by the removal of the remaining part of the wall
in question and the substitution in lieu thereof of reinforced concrete posts or pillars and arches, taking the material
and filing, as the interveners propose to do, the openings in some of the other walls. Such proposed removal, if
carried out, will practically double the floor space of the drug store and greatly increase its rental value, and also
greatly increase the actual value of the building. This extra floor space is absolutely essential to the business carried
on in this part of the building. The foregoing are substantially the findings of the trial court, based upon the
testimony of expert witnesses, and an ocular inspection of the premises. These facts show clearly and beyond a
question that the removal of the remainder of this old wall will not only prejudice the solidity of the building, but
greatly increase its solidity and durability, as, according to the opinion of the experts, the reinforced concrete posts
and arches will offer greater resistance to earthquakes or bagious than the old wall; that both the intrinsic and rental
value of the building will be increased; and that this removal is required by the business.

Lastly, counsel for the appellants say:

The plaintiffs contend that a contract is only binding on the parties thereto as provided in article 1257 of the
Civil Code and that, although a sublessee is bound to the lessor as provided in articles 1551 and 1552 yet
this is not an obligation arising out of contract but one founded in law and the relation of the parties to
property, and that the lessor has no obligation towards the sublessee as such at all either legal or of contract
and that therefore even if by clause (m) of the lease of the plaintiffs had the obligation to permit the
defendant to take out the wall to suit the convenience of its own business, that such an obligation was
purely personal between the parties to the lease and since the contract of lease is not assignable this right
could not be transferred by the defendant or made use of by the defendant for the benefit of other persons.

A lease may be of things, works, or services. (Art. 1542, Civil Code.) In a lease of things, one of the parties thereto
binds himself to give to the other the enjoyment or use of a thing for a specified time and for a fixed price. (Art.
1543, idem.)

Article 1550 of the Civil Code reads:

Should it not be expressly forbidden in the contract of the lease of things, the lessee may sublet the whole
or a part of the things leased without prejudice to his liability for the fulfillment of the contract executed
with the lessor.

There is nothing in the contract of lease in the case at bar which even tends to prohibit the lessee from subletting the
whole or any part of the leased premises. The lessee's right to do this cannot be questioned, and his subtenant is not
only obligated to carry out his part of the contract with the sublessor, but he is also bound to the lessors for all of the
acts which refer to the use and preservation of the premises, in the manner agreed upon between the lessors and the
lessee. The lessors can compel the subtenant to comply with these conditions. This sets up the privity between the
lessors and the subtenant. But it is said that the contract of lease in question is not assignable. This contract is an
ordinary one, under which the lessee as we have said, has a perfect right to sublet the whole of the premises for the
entire time. Should the lessee do this, would it not amount to an assignment of the contract of the lease? The power
of assignment is incident to the state of every lessee of things, unless he has been restrained by the terms of his
lease. In the contract of lease in question, the lessors, by Clause M, agree that the lessee may make such changes as
its business requires, provided that neither the solidity nor the value of the building is prejudiced. This is a specific
right granted to the lessee. This right is a part of the lease itself and affects directly the thing leased. It is not,
therefore, a personal obligation between the lessors and the lessee.

We are, therefore, of the opinion that the judgment appealed from should be affirmed with costs against the
appellant.

Johnson, Carson and Moreland, JJ., concur.

Arellano, C.J. and Mapa, J., dissent.

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

MANUEL MELENCIO, MARIANO MELENCIO, PURA MELENCIO, and CARIDAD
MELENCIO, plaintiffs-appellants,
vs.
DY TIAO LAY, defendant-appellee.

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

OSTRAND, J.:

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

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

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

On January 21,1928, Liberata Macapagal Viuda de Melencio, duly appointed and qualified as administratrix of the
estate of her deceased husband, Ramon Melencio, filed a petition praying to be allowed to join the plaintiffs as party
to the present case, which petition was granted in open court on January 31,1928. Her amended complaint of
intervention of February 14,1928, contains allegations similar to those alleged in the complaint of the original
plaintiffs, and she further alleges that the defendant-appellee has occupied the land in question ever since November,
1920, under and by virtue of a verbal contract of lease for a term from month to month. To this complaint of
intervention, the defendant-appellee filed an answer reproducing the allegations contained in his answer reproducing
the allegations contained in his answer to the complaint of the original plaintiffs and setting up prescription as a
further special defense.
It appears from the evidence that the land in question was originally owned by one Julian Melencio. He died prior to
the year 1905 leaving his widow, Ruperta Garcia, and his five children, Juliana, Ramon, Ruperta, Pedro R., and
Emilio Melencio. Emilio Melencio also died before 1905, his son Jose P. Melencio, then a minor, succeeding to his
interest in the said parcel of land by representation. A question has been raised as to whether the land was
community property of the marriage of Julian Melencio and Ruperta Garcia, but the evidence is practically
undisputed that Ruperta Garcia in reality held nothing but a widow's usufruct in the land.

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

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

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

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

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

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

2. That the validity and fulfillment of the said agreement of lease were made to depend upon the will of the
lessee exclusively.
 3. That the said contract of lease being for a term of over six years, the same is null and void pursuant to the
provision of article 1548 of the Civil Code.

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

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

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

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

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

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

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

The joint owners of 511 out of 1,000 parts of the realty denominated El Mortero, leased out the whole
property for twelve years to Doña Josefa de la Rosa; whereupon the Count and Countess Trespalacios
together with other coowners brought this suit to annul the lease and, in view of the fact that the land was
indivisible, prayed for its sale by public auction and the distribution of the price so obtained; they alleged
that they neither took part nor consented to the lease; that the decision of the majority of part owners
referred to in article 398 of the Code, implies a common deliberation on the step to be taken , for to do
without it, would, even more than to do without the minority, be nothing less than plunder; and that, even if
this deliberation were not absolutely necessary, the power of the majority would still be confined to
decisions touching the management and enjoyment of the common property, and would not include acts of
ownership, such as a lease for twelve years, which according to the Mortgage Law gives rise to a real right,
which must be recorded, and which can be performed only by the owners of the property leased.
 The part owners who had executed the contract prayed in reconvention that it held valid for all the owners
in common, and if this could not be, then for all those who had signed it, and for the rest, for the period of
six years; and the Audiencia of Caceres having rendered judgment holding the contract null and void, and
ordering the sale of the realty and the distribution of the price, the defendants appealed alleging under the
third and fourth assignments of error, that the judgment was a violation of article 398 of the Civil Code,
which is absolute and sets no limit of time for the efficacy of the decisions arrived at by the majority of the
part owners for the enjoyment of the common property, citing the decisions of June 30th, 1897, of July
8th,1902, and of October 30th, 1907; under the fifth assignments of error the appellants contended that in
including joint owners among those referred to in said article, which sets certain limits to the power of
leasing, in the course of the management of another's property, the court applied article 1548 unduly; and
by the seventh assignments of error, they maintained the judgment appealed from also violated article 1727,
providing that the principal is not bound where his agent has acted beyond his authority; whence it may be
inferred that if in order to hold the contract null and void, the majority of the part owners are looked upon
as managers or agents exercising limited powers, it must at least be conceded that in so far as the act in
question lies within the scope of their powers, it is valid; the contract cannot be annulled in toto.

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

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

Considering that, applying this doctrine to the case before us, one of the grounds upon which the judgment
appealed from, denying the validity of the lease made by the majority of the part owners of the pasture
land El Mortero is based, must be upheld; to wit, that the period of duration is twelve years and the consent
of all the coowners has not been obtained; hence, the third, fourth. and fifth assignments of error are
without merit; firstly, because article 398 of the Civil Code, alleged to have been violated, refers to acts
decided upon by the majority of the part owners, touching the management and enjoyment of the common
property, and does not contradict what we have stated in the foregoing paragraph; secondly because
although the cases cited were such as arose upon leases for more than six years, yet this point was not
raised on appeal, and could not therefore be passed upon; and thirdly, because it cannot be denied that there
is an analogy between a manager without special authority, who is forbidden by article 1548 of the Code to
give a lease for a period of over six years, and the joint owners constituting a legal majority, who may
decide to lease out the indivisible property, with respect to the shares of the other coowners; and having
come to the conclusion that the contract is null and void, there is no need to discuss the first two
assignments of error which refer to another of the bases adopted, however erroneously, by the trial court;

Considering that the sixth assignment of error is without merit, inasmuch as the joint ownership of property
is not a sort of agency and cannot be governed by the provisions relating to the latter contract; whence,
article 1727 of the Code alleged to have been violated, can no more be applied, than, the question of the
validity or nullity of the lease being raise, upon the contract as celebrated, it would be allowable to modify
a posteriorisome one or other of the main conditions stipulated, like that regarding the duration of the lease,
 for this would amount to a novation; still less allowable would it be to authorize diverse periods for the
different persons unequally interested in the fulfillment.

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

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

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

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

Avanceña, C.J., , Malcolm, Johns, Romualdez, and Villa-Real, JJ., concur.

Jonhson, J., I reserve my vote.
 [G.R. No. 2426. January 24, 1906. ]

FERNANDO MONTANO LOPEZ, Plaintiff-Appellee, v. PEDRO MARTINEZ ILUSTRE, Defendant-

Appellant.

Hartigan, Marple, Rohde & Gutierrez, for Appellant.

Carlos Casademunt, for Appellee.

SYLLABUS

1. REALTY; TENANTS IN COMMON; SALE OF UNDIVIDED INTEREST; PARTITION. — M. and the

defendant were owners as tenants in common of twenty-eight separate tracts of land. M. sold to the plaintiff his
undivided one-half interest in two of these tracts by contract with pacto de retro. Before the right to repurchase had
expired M. and the defendant made a voluntary partition between themselves of the twenty-eight tracts, by which
partition the two tracts in which the plaintiff was interested fell to the defendant. M. did not exercise his right of
repurchase. Held, That the partition between M. and the defendant did not affect the plaintiff, and that he was the
owner of an undivided one-half of the two lots in question.

DECISION

WILLARD, J. :

On the 26th day of December, 1902, Francisco Martinez and the defendant, Pedro Martinez, his son, were the
owners as tenants in common of two separate parcels of land in Calle Dulumbayan, in the city of Manila, each being
the owner of an undivided one-half of each of said tracts of land. On the 26th day of December, 1902, Francisco
Martinez conveyed to the plaintiff his undivided half interest in both said tracts of land. This deed contained a clause
giving Martinez the right to repurchase the property within one year from December 26, 1902. He did not
repurchase it, and on the 28th of December, 1903, the plaintiff caused the proper marginal entry to be made upon the
books in the registry of property in which registry the conveyance had been recorded, and afterwards brought this
action in March, 1904, asking for a partition of the two lots of land, between himself and the defendant, and that
defendant account for and pay to the plaintiff his part of the rents of the said properties from the 26th day of
December, 1903.

It appeared that Francisco Martinez and the defendant, his son, were the owners as tenants in common of twenty-six
other parcels of land; that in June, 1903, before the expiration of the year in which Francisco Martinez had the right
to repurchase the property so conveyed to the plaintiff, he and the defendant, his son, made a voluntary partition of
these twenty-eight tracts of land, which partition was approved by the Court of First Instance of Manila on the 15th
day of June, 1903. These twenty-eight tracts of land had been acquired by Francisco Martinez during his marriage
with his wife, Dona Germana Ilustre. The wife having died, her estate was in process of administration in the Court
of First Instance of Manila, and the partition above mentioned was made on the theory that these lands were the
property of the conjugal partnership existing between Francisco Martinez and his wife. In this partition the two
parcels of land in question in this case fell to the defendant, and his claim is that by this partition plaintiff lost all his
interest in the property. Judgment was entered in the court below in favor of plaintiff as prayed for in his complaint,
and the defendant has brought the case here by bill of exceptions.

Article 399 of the Civil Code is as follows:jgc:chanrobles.com.ph

"Every coowner shall have full ownership of his part and in the fruits and benefits derived therefrom, and he
therefore may alienate, assign, or mortgage it, and even substitute another person in its enjoyment, unless personal
rights are in question. But the effect of the alienation or mortgage, with regard to the coowners, shall be limited to
the share which may be awarded him in the division on the dissolution of the community."cralaw virtua1aw library
This article gives the owner of an undivided interest in the property the right to freely sell and dispose of it - that is,
of his undivided interest. He has no right to sell a divided part of the real estate. If he is the owner of an undivided
half of a tract of land, he has a right to sell and convey an undivided half, but he has no right to divide the lot into
two parts, and convey the whole of one part by metes and bounds. All that Francisco Martinez undertook to do in
this case was to convey his undivided interest in these two properties. This he had a perfect right to do, in
accordance with the terms of said article. There is nothing in the last clause of the article inconsistent with this
position. That declares simply that when the property is divided the purchaser gets an interest only in that part which
may be assigned to him. For the purposes of this case we see no difference between it and a case in which the tenant
in common makes an absolute conveyance of his undivided interest in the property, without reserving the right to
repurchase. In the case of an absolute conveyance of that character, the relation between the grantor in the deed and
his cotenant is terminated. They are no longer cotenants. The grantee in the deed takes the place of the grantor, and
he and the other owner of the property become cotenants. In such a case the grantor loses all interest in the property,
and of course has no right to take any part in the partition of it. It would be absurd to say that after such conveyance
the grantor, who had lost all his interest in the property, could by agreement with the other owner make a partition of
property in which he had no interest that would be binding upon his grantee.

We do not see how the fact that Francisco Martinez and his son were the owners of other pieces of property as
tenants in common can affect the question presented in this case. Each tract was separate and distinct from all others.
The parties had a right to deal with one lot without any reference to the other twenty-seven. The fact that the
defendant acquired title to all of them by inheritance from his mother did not make them physically one tract of land,
so that a conveyance by the son of his undivided half interest in one of these lots would amount to a conveyance of a
divided part of a tract of land held by him in common with his father.

The judgment of the court below is affirmed, with the costs of this instance against the appellant, and after the
expiration of twenty days judgment should be entered in accordance herewith and the case remanded to the court
below for execution. So ordered.

Arellano, C.J., Mapa, Johnson and Carson, JJ., concur.

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

ANGELA I. TUASON, plaintiff-appellant,

vs.
ANTONIO TUASON, JR., and GREGORIO ARANETA, INC., defendants-appellees.

Alcuaz & Eiguren for appellant.

Araneta & Araneta for appellees.

MONTEMAYOR, J.:

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

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

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

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

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

(11) The PARTY OF THE SECOND PART (meaning Araneta Inc.) is hereby given full power and
authority to sign for and in behalf of all the said co-owners of said property all contracts of sale and deeds
of sale of the lots into which this property might be subdivided; the powers herein vested to the PARTY OF
 THE SECOND PART may, under its own responsibility and risk, delegate any of its powers under this
contract to any of its officers, employees or to third persons;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

So ordered.
G.R. No. L-10104 February 10, 1916

ROMANA CORTES, ET AL., plaintiffs-appellants,

vs.
FLORENCIO G. OLIVA, defendant-appellee.

Leodegario Azarraga for appellants.

Jose Agoncillo for appellee.

CARSON, J.:

This is an action for the recovery of personal property and for the damages incident to its alleged unlawful
conversion.

The plaintiffs are the heirs of one Pio Oliva, deceased, who during his lifetime was the owner of a large machine
used for grinding sugar cane; he was also the joint owner with his brother, Florencio Oliva, the defendant herein, of
another smaller machine used for the same purpose. Throughout the record the machine owned outright by Pio Oliva
is referred to as the large machine or mill (trapiche grande) while the other is referred to as the small or partnership
machine.

In 1896 defendant was the manager of an hacienda in Nasugbu, Batangas, and Pio Oliva was a tenant on the
hacienda. The two machines in question were installed and in use on the hacienda at the time of the breaking out of
the revolution against Spain. Owing to the unsettled conditions incident to the revolution, the hacienda was
abandoned together with the two machines in question and various other agricultural implements. Pio Oliva died in
1898 in the pueblo of Calawang, Laguna, P. I., leaving as his heirs the plaintiffs herein. The defendant, Florencio
Oliva, returned to Nasugbu in 1899. In 1901 he took them in an abandoned condition and badly in need of repairs.
On the large machine he expended approximately P163 and a less amount on the smaller machine, and he kept both
machines under shelter until work was received on the hacienda. In 1906 the large machine was again used for
grinding cane and it appears to have been used for that purpose ever since. The smaller machine, the one owned in
partnership, has never been used since 1896, and unsuccessful efforts have been made to sell it. The record is very
unsatisfactory and inconclusive as to the value of the two machines. One of the plaintiffs testified that the large
machine was worth P1,200, while the defendant put its value at P400. There is no direct evidence in the record as to
what the value of the smaller machine is, but it is very clear that its market value must be small indeed.

The plaintiffs contend that the defendant unlawfully took possession of these machines in the year 1906 without
their knowledge or consent; that from that date until the year 1912 he had ground cane in the large machine to the
value of P42,000, and that they, as the heirs of the true owner of the machine, are entitled to P14,000 for the use of
this machine, that being one third the estimated value of the output; that the profits which would have accrued to
them from the use of the small machine during that period amounts to P3,500; that they are entitled to a judgment
for the recovery of the machines of their value; and further to a judgment for the sum of P17,500 for the profits
which should have accrued to them for the use of these machines from the year 1906 to the year 1912.

The defendant contends that he took possession of the machines in 1901, and has them in his possession since that
date under a claim of ownership; that he took possession because his brother, Pio Oliva, was indebted to him at the
time of his death, and in view of conditions existing at that time, 1901, he took this mode of indemnity himself
against loss of the amount of the indebtedness which exceeded the value of both machines at the time when he took
possession.

This action was instituted on the 6th day of June, 1913, and the trial judge was of opinion that it had prescribed
under the provisions of section 43 of the new Code of Civil Procedure (Act No. 190), the evidence of record
disclosing that the defendant had been in possession of both the mills under a claim of ownership for a period of
more than four years prior to the date of the institution of the action.
As to larger machine, we are of opinion that the ruling of the trial judge was unquestionably correct. We find
nothing in the record which would justify us in disturbing the findings of fact by the trial judge and there can be no
doubt that accepting his finding of facts as correct, the plaintiff's action for possession had prescribed long before
the action was instituted (sec. 43 Act No. 190).

The plaintiff contend that the defendant did not take and keep possession of this machine under a claim of
ownership; and that in truth and in fact he originally took possession of this machine in the year 1906, and that since
that time he has kept possession merely as security for his claim of indebtedness against their father. In support of
their contentions, they rely on certain statements made by the defendant in a letter written to one of the plaintiffs.
This letter appears to have been written partly with a view to secure some compromise of the threatened litigation
over the machines, and partly by way of justification and defense of the defendant's conduct in taking possession of
the machines after his brother's death. In the course of the letter he insists that the plaintiffs were not wronged by his
action in taking possession, because, as he indicates, their claim of ownership in the machine and of profits from its
operation is fully met by his claim of indebtedness and of interest on the debt. Plaintiffs insist that this statement
demonstrates that the defendant was not asserting a right of ownership in the machine at the time when the letter was
written, but only the right to payment of the amount of the alleged indebtedness with interest.

Without stopping to consider the question of the admissibility in evidence of the contents of his letter, which seems
to have been written with some view to a compromise of threatened litigation, we hold that, read in connection with
all the evidence of record, it falls far short of sustaining the contentions of the plaintiffs. We agree with the trial
judge, who carefully reviewed the letter together with all the rest of the evidence, and held that the letter, as a whole,
clearly discloses that defendant regarded himself as the lawful owner of the machine at the time when the letter was
written; and that the references to the principal and interest of the debt for which it was taken was made by the
defendant merely for the sake of showing that he had not wronged his brother or his brother's heirs by taking the
machines for the debt.

With reference to the smaller machine, which was originally owned jointly by the defendant and his brother, the
claim of prescription of the action brought by the plaintiffs is not satisfactorily established.

This machine having been originally the joint property of the defendant and his brother, the fact that he held it in his
possession for a long period of years, and exercised acts of ownership with reference to it does not afford a sufficient
ground for the inference he had possession under a claim of exclusive ownership, and adverse to the claims of his
brother's estate. Ordinarily possession by one joint owner will not be presumed to be adverse to the others, but will,
as a rule, be held to be for the benefit of all. Much stronger evidence is required to show an adverse holding by one
of several joint owners than by a stranger; and in such cases, 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 coowners, and that his coowners
were apprised or should have been apprised of his claim of adverse and exclusive ownership before the alleged
prescriptive period began to run. We do not think that the evidence or record is sufficient to sustain a finding to that
effect with reference to the small machine.

On their own allegations, however, plaintiffs cannot maintain an action for possession of this machine against the
defendant, who was originally a joint with his brother, their predecessor in interest. Doubtless they have a right to
have the machine sold and to a partition of the proceeds of the sale, and an accounting for profits while in the
exclusive possession of the defendant; and liberally construed, the allegations of their complaint would seem to be
sufficient, if supported by competent evidence to entitle them to a judgment for such profits.

But there is no direct evidence in the record as to profits gained by the defendant from the use of this machine,
though there are indications in the record that in fact he made no such profits, and that the machine, which was
practically worthless, has lain idle ever since it came into his possession.

The judgment entered in the court below dismissing the complaint at costs of the plaintiffs should be affirmed with
the costs of this instance against the appellants, without prejudice, nevertheless, to the right of the plaintiffs to bring
another action asserting any right they may have in the small machine, originally owned jointly by the defendant and
his brother, their predecessor in interest, or in profits arising from the use of this machine since the date of the
institution of this action. So ordered.

Arellano, C.J., Torres, Johnson, Moreland and Trent, JJ., concur.

G.R. No. L-38544 November 18, 1933

PAZ DE SANTOS, CONSUELO DE SANTOS and JOSE MARIANO DE SANTOS, petitioners-appellants,

vs.
BANK OF THE PHILIPPINE ISLANDS, oppositor-appellee.

Vicente J. Francisco for appellants.

Feria and La O for appellee.

VILLA-REAL, J.:

This is an appeal taken by the petitioners herein Paz, Consuelo and Jose Mariano de Santos, from the order of the
Court of First Instance of Manila, which reads as follows:

Upon consideration of the petition filed by Paz, Consuelo and Jose Mariano de Santos praying that
this court order the cancellation of the lien annotated on their certificates of title consisting in the
preliminary attachment of the properties described therein, in favor of the Bank of the Philippine
Islands; it appearing that this same motion had already been previously filed, that is on July 6,
1931, and denied by this same court; it appearing likewise, that a similar petition had been filed in
civil case No. 39435 of the Court of First Instance of Manila, entitled "Bank of the Philippine
Islands vs. Isidoro de Santos et al., which petition was also denied by the said court which heard
the motion in question on September 30, 1931; and it appearing further that aid order have not
been appealed from and have therefore become final on the ground that the period fixed by law
within which they might have been again considered by this court has elapse; and it appearing
furthermore that the provisions of the Civil Code and of the Code of Civil Procedure cited by the
petitioners in their motion under consideration by this court are not applicable to nor can serve as a
ground for the aforesaid motion filed by them, inasmuch as they contain nothing with reference to
liens in favor of third persons who are not a party to the partition in question;

Wherefore, the petition of the aforesaid petitioners herein is hereby denied. It is so ordered.

In support of their appeal, the petitioner-appellants assign the following alleged errors in the decision of the court a
quo, to wit:

1. In not ordering the cancellation of the preliminary attachment noted at the back of the new certificates of
title Nos. 39885, 39879 and 39880 issued respectively to each of the three herein appellants for their
respective shares in the community property.

2. In holding the orders of the court of July 31, and of September 30, 1931 mentioned in the appealed order,
as binding and conclusive in the instant case.

3. In ordering the appellants to include in their bill of exceptions the aforementioned order of September
30, 1931, which was issued in the case of the Bank of the Philippine Islands vs. Isidoro de Santos et al., No.
39435, by the judge of the Sala other than the one in which the present case was heard.

The following pertinent facts are necessary for the solution of the questions raised in this appeal:

The petitioner-appellants herein Paz, Consuelo and Jose Mariano de Santos, together with their brothers Felipe and
Isidoro de Santos, were owners pro indiviso of nine parcels of land described in the transfer certificates of title Nos.
34394, 34395, 34396, 34397, 34398, 34399, 34400, 34403 and 34530.

On March 26, 1930, Isidoro de Santos and Paulino Candelaria executed jointly and severally in favor of the herein
oppositor-appellee, Bank of the Philippine Islands, a promissory note for the sum of P45,000 payable within ninety
days with interest at the rate of 9 per cent per annum, delivering the promissory note in question (Appendix B) to the
aforesaid bank.

Inasmuch as Isidoro de Santos and Paulino Candelaria failed to pay the amount of the said promissory note upon
maturity and after demand had been made upon them therefore the aforesaid oppositor-appellee, Bank of the
Philippine Islands, on April 18, 1931, filed a complaint against Isidoro de Santos and Paulino Candelaria with the
Court of First Instance of Manila, praying for the issuance of a writ of preliminary attachment against their
properties, which was issued and annotated on the back of each and every one of the transfer certificates of the
hereinbefore enumerated.

Three days after the issuance of said writ of attachment and the annotation thereof on the back of the aforesaid
transfer certificates of title, that is on April 21, 1931, the herein petitioner-appellants, together with Isidoro and
Felipe de Santos executed an extrajudicial partition of the parcels of land in question.

On July 6, 1931, Felipe de Santos filed a motion in Cadastral Case No. 3 and others, G.L.R.O. Record No. 63 and
others, of the Court of First Instance of Manila, praying among other things, (1) that the aforesaid extrajudicial
partition be approved by the court, and (2) that the preliminary attachment of the interest of Isidoro de Santos in
each and every one of the nine parcels of land described in the transfer certificates of the title hereinbefore
enumerated, be consolidated into parcels of land adjudicated to him by virtue of the aforesaid extrajudicial partition.

Although the petitioner-appellants herein and Isidoro de Santos were duly notified of the hearing of the aforesaid
motion which was set for July 14, 1931, as evidenced by the notice and the note of Attorney Javier appearing at the
foot thereof, none of them appeared at the hearing.

On July 31, 1931, the Court of First Instance of Manila, in deciding the aforesaid motion of Felipe de Santos, stated
the following:

The petition is hereby denied with respect to the properties described in the transfer certificates of title Nos.
34396, 34398 and 34403, on the ground that the first two properties are mortgaged to Luis Mirasol and the
last to the Philippine Guaranty Co., Inc., inasmuch as the mortgage constituted thereon is subscribed to
jointly and severally by all the coowners thereof. The motion to the effect that all the attachments issued
against Isidoro de Santos be consolidated exclusively on the properties adjudicated to him by virtue of the
aforesaid deed of partition is, likewise hereby denied.

Neither the petitioner Felipe de Santos nor the herein petitioner-appellants Paz, Consuelo and Jose Mariano de
Santos, nor Isidoro de Santos excepted to nor appealed from the order above-mentioned.

On September 30, 1931, the Court of First Instance of Manila denied the motion filed by Felipe de Santos in civil
case No. 39435 of the said court, wherein he prayed, among other things, that the said court order the register of
deeds of the City of Manila to note on the back of transfer certificates of title Nos. 34397 and 34530 the preliminary
attachment in favor of the Bank of the Philippine Islands, referring to that portion of the property described in
subdivision plan Psd 7299, and to cancel the preliminary attachments noted on the back of transfer certificates of
title Nos. 34394, 34395, 34396, 34398, 34400 and 34403, and on the back of transfer certificate of title No. 34530
with respect to the portion of the property described therein, which was ]adjudicated to the said petitioner. The court
has based its aforesaid decision of the ground that neither the said petitioner Felipe de Santos nor the defendant
therein, Isidoro de Santos, has the right to compel the plaintiff Bank of the Philippine Islands to conform to the
attachment of only those properties adjudicated to the said defendant Isidoro de Santos by virtue of the deed of
partition, in lieu of his right to an undivided one-fifth of each of the nine parcels of land hereinbefore
enumerated.lawphil.net

Neither the petitioner Felipe de Santos nor the defendant therein, Isidoro de Santos, appealed from the above order.

On August 3, 1932, one-year after the motion of Felipe de Santos was filed in the said civil case No. 39435, the
herein petitioner-appellants filed a motion in the cadastral cases aforementioned, praying for the cancellation of the
annotation of the preliminary attachments levied on the interest of Isidoro de Santos before the partition, appearing
on the back of the new transfer certificates of title issued in their name after the partition, said annotation having
been made pursuant to the order of the court issued in said cadastral cases on July 31, 1931.

On September 17, 1932, the court denied the motion in question by the aforesaid order from which this appeal was
taken.

It being procedural in nature, we shall first pass upon the question raised in the second assignment of error, to wit;
that the trial court erred in holding the orders of the court of July 31, and September 30, 1931, as binding and
conclusive in the instant case.

It can be inferred from the order of September 17, 1932, appealed from, that in denying the motion for the
cancellation of the preliminary attachments filed by the herein petitioner-appellants on August 5, 1932, the court a
quo based its decision on the ground that a similar motion for the cancellation of the preliminary attachments in
question had already been filed in the said case on July 6, 1931, and denied by the order of July 31, 1931; and
another in civil case No. 39435 of the Court of First Instance of Manila, entitled "Bank of the Philippine Islands vs.
Isidoro de Santos et al.", which was likewise denied on September 30, 1931. Inasmuch as the orders denying the
aforesaid motions have not been appealed from, they have therefore become final and conclusive.

The order of the court a quo denying the motions in question is based, therefore, on the assumption that the question
regarding the cancellation of the preliminary attachment sought by the petitioner-appellants has become res judicata.
This court has constantly held that in order that res judicata may exist, it is necessary that there be identity of
parties, of grounds or causes of action and of things or subject matter under litigation (Aquino vs. Director of Lands,
39 Phil., 850; Isaac vs. Padilla, 31 Phil., 496; Donato vs. Mendoza, 25 Phil., 57; Roman Catholic Archbishop of
Manila vs. Director of Lands, 35 Phil., 339).

The motion for cancellation dated July 6, 1931, was filed by Felipe de Santos alone, and the fact that the herein
petitioner-appellants were notified thereof has not made them parties to the said motion, inasmuch as they were not
included in the motion in question in accordance with section 114 of the Code of Civil Procedure.

Neither were the herein petitioner-appellants made parties to the motion for cancellation of the preliminary
attachment filed by Felipe de Santos in civil case No. 39435 of the Court of First Instance of Manila, on August 5,
1931, wherein the Bank of the Philippine Islands was plaintiff and Isidoro de Santos et al. were defendants.

In the motion under consideration, the denial of which is the subject matter of this appeal, Felipe de Santos is not a
party-petitioner. Therefore, there is no identity between the petitioner in the motions of July 6, and of August 5,
1931, respectively, and the parties to the motion under consideration.

In the two motions of July 6, and August 5, 1931, mentioned above, wherein Felipe de Santos alone was the
petitioner, the subject matter thereof could not be other that the properties adjudicated to him by virtue of the deed of
partition, which properties he wished to free from the attachment, inasmuch as he neither acted nor could act in
representation of his coowners for the reason that he was not authorized to do so. In the motion under consideration,
the petitioner-appellants pray for the cancellation of the annotation of the preliminary attachment on the back of the
new transfer certificates of title issued in their respective names, by virtue of the order of the court in the cadastral
case, on July 31, 1931. If the properties which Felipe de Santos sought to free from the preliminary attachment in his
motions of July 6, and of August 5, 1931, were those which had been adjudicated to him by virtue of the partition,
and the properties which the herein petitioner-appellants seek to free from the same attachment in their motion to
that effect are those which corresponded to them by virtue of the aforesaid partition, which properties are separate
and distinct from those adjudicated to Felipe de Santos, neither is there identity of subject matter under litigation
herein. The only point where there is identity is in the cause or ground of action for cancellation, which is the same
in the aforestated motions of July 6, and of August 5, 1931, as well as in the motion under consideration, which
ground consists in the partition of the properties owned in common.lawphi1.net
Therefore, there being no identity either of parties, or of subject matter or thing under litigation, there is no res
judicata.

The second question to decide in this appeal, which is raised in the first assignment of error, is whether or not it is
proper to order the cancellation of the preliminary attachment annotated on the back of the new transfer certificates
of title Nos. 39885, 39879 and 39880, issued respectively in the names of the herein petitioner-appellants for their
respective shares in the community property.

Inasmuch as article 403 of the Civil Code authorizes creditors to contest a partition already made in case of fraud, or
when it has been made to the prejudice of existing rights and interest, and inasmuch as the oppositor-appellee herein,
bank of the Philippine Islands, was not notified of the partition made among the herein petitioner-appellants and
their coowners Felipe de Santos and Isidoro de Santos, and was not given an opportunity to contest the partition
already made, nor the approval thereof by the cadastral court, the case should be remanded to the court a quo in
order to permit the said oppositor-appellee, Bank of the Philippine Islands, to file the objection it may deem
convenient, in accordance with the provisions of article 403 of the Civil Code cited above.

In view of the foregoing considerations, we are of the opinion and so hold that inasmuch as the partition of the
properties held under title of common ownership was made without notifying the creditors thereof, said creditors
may contest the partition in question in case of fraud, or when it has been made to the prejudice of existing rights or
interests.

Wherefore, the order appealed from is hereby reversed and the case ordered remanded to the court a quo in order to
give the herein oppositor-appellee, Bank of the Philippine Islands, and opportunity to contest the partition in
accordance with the provisions of article 403 of the Civil Code, without special pronouncement as to costs. So
ordered.
G.R. No. 1111 May 16, 1903

FELICIDAD GARCIA DE LARA, plaintiff-appellant,

vs.
JOSE GONZALEZ DE LA RAMA, ET AL., defendants-appellees.

Emilio Martinez Llanos for appellant.

No appearance for appellees.

COOPER, J.:

This is an appeal by the plaintiff from a judgment of the Court of First Instance, brought here by bill of exceptions
which purports to have been prepared under section 143 of the Code of Civil Procedure of 1901, but which in reality
bears a very small resemblance to a bill of exceptions properly prepared under the Code. It contains arguments of
counsel, unintelligible statements, and sets forth much that is irrelevant. The real nature of the suit, the rulings of the
court from which the appeal has been taken, and the character of the judgment rendered, after a careful reading of
the bill of exceptions, are left in doubt and largely to conjecture.

The Code of Civil Procedure is based upon American practice and has superseded the Spanish Code of Procedure,
and since the practice now in force is in a large measure different from that under the Spanish practice, many
difficulties present themselves to those not familiar with the American practice.

As a general rule, excepting which are not presented in the course of the proceedings in the Court of First Instance
can not be presented and urged on appeal to this court. The purpose of the rule is to require a party desiring to
review in the appellate court the action of the trial court to call the attention of the trial court by timely objections to
the proceedings complained of. This rule serves the interest of litigants and conduces to produce the orderly
administration of justice in the courts.

An exception has been defined as an objection taken to the decision of the trial court upon a matter of law, and is a
notice that the party taking it preserves for the consideration of the appellate court a ruling deemed erroneous. (8
Am. Enc. P. and P., 157.)

An objection alone is not sufficient to preserve the question for review on appeal. To save the objection an exception
is necessary.

We will indicate briefly when and how objections are made and exceptions taken. This will depend upon the
character of the question.

They are taken sometime by demurrer, sometimes by answer, or by some objection raised during the progress of the
trial, or by objections to the judgment after its rendition. The defendant may demur to the complaint when it appears
upon the face thereof, either —

1. That the court has no jurisdiction of the person of the defendant, or the subject of the action; or

2. That the plaintiff has no legal capacity to sue; or

3. That there is another action pending between the same parties for the same cause; or

4. That there is a defect or misjoinder of parties, plaintiff or defendant; or

5. That the complaint does not state facts sufficient to constitute a cause of action; or
6. That the complaint is ambiguous, unintelligible, or uncertain.

The demurrer must distinctly specify the grounds upon which any of the objections to the complaint are taken.

(Sec. 91 Code of Civil Procedure.)

When any of the matters enumerated in this section do not appear upon the fact of the complaint, the objection to the
complaint can only be taken by answer. (Sec. 92.)

If no objection be taken to the complaint, either by demurrer or answer, the defendant shall be deemed to have
waived all the above-named objections, excepting only the objection to the jurisdiction of the court over the subject-
matter, and that the complaint does not state facts sufficient to constitute a cause of action. (Sec. 93, Code of Civil
Procedure.)

If the ruling of the court upon a demurrer be adverse to the party making the same, he should except to the ruling of
the court, and, in order that the court may determine the force of the objection, it will be necessary to incorporate in
the bill of exceptions the complaint demurred to, the demurrer, and the judgment or ruling of the court upon the
demurrer.

If the objection is raised by the answer, the exception must necessarily come after proofs which are made in support
of it. The sufficiency and the validity of the objection thus raised must be determined by the sufficiency of the
evidence which has been offered in support of the allegation contained in the answer. This requires a review or
retrial of the questions of fact and can only be made in the cases which are provided for in section 497 of the Code
of Civil Procedure.

The manner of making objections and taking exceptions to rulings, such as rulings upon admissibility or exclusion
of evidence and other questions arising during the course of the trial, is provided for in section 142, which reads as
follows:

The party excepting to the ruling, order, or judgment shall forthwith inform the court that he excepts to the
ruling, order, or judgment, and the judge shall thereupon minute the fact that the party has so excepted; but
the trial shall not be delayed thereby. The exception shall also be recorded by the stenographer, if one is
officially connected with the court.

The Code has not made any specific provisions as to the manner and time of taking exceptions to the final judgment
which has been rendered in a case. It would seem that the objection should be taken at the time of the rendition of
the final judgment, or as soon thereafter as may be practicable, and before the ending of the term of court at which
the final judgment is rendered.

With reference to the character of objections which may be taken to a judgment of the court, the American rule is
stated as follows:

Errors in a judgment or decree will not be noticed on appeal in the absence of objections and exceptions
taken below, and they should be sufficiently specific to direct the attention of the court to the alleged
defects. (8 Enc. Pl. and Pr., 289.)

If objection to the judgment arises upon the insufficiency of the proof to support the judgment or the findings of fact
made by the judge, it will also be necessary to bring the case within the first or third clause of section 497 of the
Code of Civil Procedure, and if under the latter clause, the excepting party should file a motion in the Court of First
Instance for a new trial based upon the ground that the findings of fact are plainly and manifestly against the weight
of evidence.

The manner of perfecting a bill of exceptions is governed by section 143 of the Code and need no be here repeated.
In preparing and presenting a bill of exceptions under this section it is necessary that counsel should carefully read
and follow the plain directions of the statute. These directions are sufficiently explicit to enable those who will
carefully consider the section to comply with them.

In preparing a case for this court, counsel should also carefully consider the rules of the Supreme Court for sending
up the bill of exceptions and for the making of briefs and assignments of errors.

By reason of the failure of the appellants in this case to comply with the plain statutory provisions with reference to
bills of exceptions, it is largely a matter of conjecture to determine the nature of the suit, the rulings of the court
complained of, or the character of the judgment which has been rendered. For this failure we might well refuse to
consider the case.

It seems probable that the suit was an action for the partition of a tract of land, being the undivided half of the
hacienda de Angono, situated in the Province of Rizal, and which the plaintiff and defendants in the suit has
inherited from their deceased father, Don Eugenio Gonzalez de Lara; that Eugenio Gonzalez de Lara had acquired
this undivided half interest by purchase from Doña Dominga Santa Ana; that the court refused to partition the land
because the tract sought to be partitioned was itself an undivided interest, the other being owned by the parties the
names of whom are not disclosed in the record; that the court declined to make the partition on the ground that the
demarcation and boundaries of the land sought to be partitioned had not been set forth in the partition, and by reason
of the interest which is sought to be partitioned being an undivided interest.

If this was the character of the suit, the Court of First Instance did not err in so holding.

Partition proceedings are now governed, and were at the time of the institution of this suit, by the Code of Civil
Procedure, 1901, and must be determined by the provisions of this Code. Section 183 requires that the complaint in
an action for partition shall set forth the nature and extent of the plaintiff's title, and shall contain an adequate
description of the real estate of which partition is demanded, and name each tenant in common, coparcener, or other
person interested therein as defendants.

This provision requires that all persons interested in the land sought to be partitioned must be made a party to the
suit. If the land sought to be partitioned was an undivided interest held by the father of the plaintiffs and defendants,
in order to comply with the requirements of statute those who were interested in the other half interest should have
been made parties to the suit.

This is not according to the requirements of the Code, but the very nature of a partition suit renders it necessary;
otherwise the proceedings in the suit may become wholly ineffectual.

This proceeds from the general principle of law that a litigation can never result in an adjudication which will be
binding upon others than the parties to the suit and their privies in blood or in estate. The other owners were persons
who not only had an interest in the controversy but an interest of such a nature that a final decree could not be made
without affecting that interest. The decree, therefore, would not bind such parties, and upon another suit for partition
brought by them the very half that had been partitioned in this case might be assigned as the portion belonging to
such other joint owners.

The Code provides that if, upon trial in a partition suit, the court finds that the plaintiff has a legal right to any part
of such estate, it shall order partition thereof in favor of the plaintiff, among all parties in interest, and if the parties
to the suit are not able to agree amongst themselves to the making of partition, the court shall appoint three
commissioners to make the partition and set off to the plaintiff and each party in interest such part and proportion of
the estate as the court shall order.

When it is made to appear to the commissioner that the estate, or a portion thereof, can not be divided without great
inconvenience to the parties interested, the court may order it assigned to one of the parties, provided he pays to the
other party sum of money as the commissioners judge equitable. But if no one of the parties interested will take such
assignment and pay such sum, the court shall order the commissioners to sell such estate at public or private sale.
Where the estate can not be divided, the court may direct the sale of the property at public or private sale. At this
public or private sale third parties may become the purchasers.

A suit brought by the persons interested who were not made parties to the suit, and who are not bound by the
partition proceedings, would deprive such purchaser of the title to the land acquired at public sale under the
judgment of a court. Both the purchaser at such sale and the heirs who had received their specific portion by metes
and bounds, or the heirs who had compensated the other heirs by the payment of the value of the land, by reason of
land not being divisible, would be deprived of the rights which they had acquired under the proceedings. This would
not only create confusion and inconvenience but the time of the court would have been uselessly consumed in the
proceedings thus rendered ineffectual, at the suit of the persons who were not made parties to the action. Such result
is avoided by the provision of the statute which requires each tenant in common, coparcener, or other person
interested in the land to be made a party to the suit.

The judgment will be affirmed with costs of both instances against appellants. This affirmance, however, will be
without prejudice to the rights of the plaintiff should he desire to institute a partition proceeding against all parties at
interest and effect a partition of the lands.

By the provisions of section 181 of the Code of Civil Procedure, a person having or holding real estate with others,
in any form of joint tenancy or tenancy in common, may compel partition thereof.

Torres, J., concurs.

G.R. No. L-39086 June 15, 1988

ABRA VALLEY COLLEGE, INC., represented by PEDRO V. BORGONIA, petitioner,

vs.
HON. JUAN P. AQUINO, Judge, Court of First Instance, Abra; ARMIN M. CARIAGA, Provincial
Treasurer, Abra; GASPAR V. BOSQUE, Municipal Treasurer, Bangued, Abra; HEIRS OF PATERNO
MILLARE, respondents.

PARAS, J.:

This is a petition for review on certiorari of the decision * of the defunct Court of First Instance of Abra, Branch I,
dated June 14, 1974, rendered in Civil Case No. 656, entitled "Abra Valley Junior College, Inc., represented by
Pedro V. Borgonia, plaintiff vs. Armin M. Cariaga as Provincial Treasurer of Abra, Gaspar V. Bosque as Municipal
Treasurer of Bangued, Abra and Paterno Millare, defendants," the decretal portion of which reads:

IN VIEW OF ALL THE FOREGOING, the Court hereby declares:

That the distraint seizure and sale by the Municipal Treasurer of Bangued, Abra, the Provincial
Treasurer of said province against the lot and building of the Abra Valley Junior College, Inc.,
represented by Director Pedro Borgonia located at Bangued, Abra, is valid;

That since the school is not exempt from paying taxes, it should therefore pay all back taxes in the
amount of P5,140.31 and back taxes and penalties from the promulgation of this decision;

That the amount deposited by the plaintaff him the sum of P60,000.00 before the trial, be
confiscated to apply for the payment of the back taxes and for the redemption of the property in
question, if the amount is less than P6,000.00, the remainder must be returned to the Director of
Pedro Borgonia, who represents the plaintiff herein;

That the deposit of the Municipal Treasurer in the amount of P6,000.00 also before the trial must
be returned to said Municipal Treasurer of Bangued, Abra;

And finally the case is hereby ordered dismissed with costs against the plaintiff.

SO ORDERED. (Rollo, pp. 22-23)

Petitioner, an educational corporation and institution of higher learning duly incorporated with the Securities and
Exchange Commission in 1948, filed a complaint (Annex "1" of Answer by the respondents Heirs of Paterno
Millare; Rollo, pp. 95-97) on July 10, 1972 in the court a quo to annul and declare void the "Notice of Seizure' and
the "Notice of Sale" of its lot and building located at Bangued, Abra, for non-payment of real estate taxes and
penalties amounting to P5,140.31. Said "Notice of Seizure" of the college lot and building covered by Original
Certificate of Title No. Q-83 duly registered in the name of petitioner, plaintiff below, on July 6, 1972, by
respondents Municipal Treasurer and Provincial Treasurer, defendants below, was issued for the satisfaction of the
said taxes thereon. The "Notice of Sale" was caused to be served upon the petitioner by the respondent treasurers on
July 8, 1972 for the sale at public auction of said college lot and building, which sale was held on the same date. Dr.
Paterno Millare, then Municipal Mayor of Bangued, Abra, offered the highest bid of P6,000.00 which was duly
accepted. The certificate of sale was correspondingly issued to him.

On August 10, 1972, the respondent Paterno Millare (now deceased) filed through counstel a motion to dismiss the
complaint.
On August 23, 1972, the respondent Provincial Treasurer and Municipal Treasurer, through then Provincial Fiscal
Loreto C. Roldan, filed their answer (Annex "2" of Answer by the respondents Heirs of Patemo Millare; Rollo, pp.
98-100) to the complaint. This was followed by an amended answer (Annex "3," ibid, Rollo, pp. 101-103) on
August 31, 1972.

On September 1, 1972 the respondent Paterno Millare filed his answer (Annex "5," ibid; Rollo, pp. 106-108).

On October 12, 1972, with the aforesaid sale of the school premises at public auction, the respondent Judge, Hon.
Juan P. Aquino of the Court of First Instance of Abra, Branch I, ordered (Annex "6," ibid; Rollo, pp. 109-110) the
respondents provincial and municipal treasurers to deliver to the Clerk of Court the proceeds of the auction sale.
Hence, on December 14, 1972, petitioner, through Director Borgonia, deposited with the trial court the sum of
P6,000.00 evidenced by PNB Check No. 904369.

On April 12, 1973, the parties entered into a stipulation of facts adopted and embodied by the trial court in its
questioned decision. Said Stipulations reads:

STIPULATION OF FACTS

COME NOW the parties, assisted by counsels, and to this Honorable Court respectfully enter into
the following agreed stipulation of facts:

1. That the personal circumstances of the parties as stated in paragraph 1 of the complaint is
admitted; but the particular person of Mr. Armin M. Cariaga is to be substituted, however, by
anyone who is actually holding the position of Provincial Treasurer of the Province of Abra;

2. That the plaintiff Abra Valley Junior College, Inc. is the owner of the lot and buildings thereon
located in Bangued, Abra under Original Certificate of Title No. 0-83;

3. That the defendant Gaspar V. Bosque, as Municipal treasurer of Bangued, Abra caused to be
served upon the Abra Valley Junior College, Inc. a Notice of Seizure on the property of said
school under Original Certificate of Title No. 0-83 for the satisfaction of real property taxes
thereon, amounting to P5,140.31; the Notice of Seizure being the one attached to the complaint as
Exhibit A;

4. That on June 8, 1972 the above properties of the Abra Valley Junior College, Inc. was sold at
public auction for the satisfaction of the unpaid real property taxes thereon and the same was sold
to defendant Paterno Millare who offered the highest bid of P6,000.00 and a Certificate of Sale in
his favor was issued by the defendant Municipal Treasurer.

5. That all other matters not particularly and specially covered by this stipulation of facts will be
the subject of evidence by the parties.

WHEREFORE, it is respectfully prayed of the Honorable Court to consider and admit this
stipulation of facts on the point agreed upon by the parties.

Bangued, Abra, April 12, 1973.

Sgd. Agripino Brillantes

Typ AGRIPINO BRILLANTES
Attorney for Plaintiff

Sgd. Loreto Roldan

Typ LORETO ROLDAN
Provincial Fiscal
Counsel for Defendants
Provincial Treasurer of
Abra and the Municipal
Treasurer of Bangued, Abra

Sgd. Demetrio V. Pre

Typ. DEMETRIO V. PRE
Attorney for Defendant
Paterno Millare (Rollo, pp. 17-18)

Aside from the Stipulation of Facts, the trial court among others, found the following: (a) that the school is
recognized by the government and is offering Primary, High School and College Courses, and has a school
population of more than one thousand students all in all; (b) that it is located right in the heart of the town of
Bangued, a few meters from the plaza and about 120 meters from the Court of First Instance building; (c) that the
elementary pupils are housed in a two-storey building across the street; (d) that the high school and college students
are housed in the main building; (e) that the Director with his family is in the second floor of the main building; and
(f) that the annual gross income of the school reaches more than one hundred thousand pesos.

From all the foregoing, the only issue left for the Court to determine and as agreed by the parties, is whether or not
the lot and building in question are used exclusively for educational purposes. (Rollo, p. 20) The succeeding
Provincial Fiscal, Hon. Jose A. Solomon and his Assistant, Hon. Eustaquio Z. Montero, filed a Memorandum for the
Government on March 25, 1974, and a Supplemental Memorandum on May 7, 1974, wherein they opined "that
based on the evidence, the laws applicable, court decisions and jurisprudence, the school building and school lot
used for educational purposes of the Abra Valley College, Inc., are exempted from the payment of taxes." (Annexes
"B," "B-1" of Petition; Rollo, pp. 24-49; 44 and 49).

Nonetheless, the trial court disagreed because of the use of the second floor by the Director of petitioner school for
residential purposes. He thus ruled for the government and rendered the assailed decision.

After having been granted by the trial court ten (10) days from August 6, 1974 within which to perfect its appeal
(Per Order dated August 6, 1974; Annex "G" of Petition; Rollo, p. 57) petitioner instead availed of the instant
petition for review on certiorari with prayer for preliminary injunction before this Court, which petition was filed on
August 17, 1974 (Rollo, p.2).

In the resolution dated August 16, 1974, this Court resolved to give DUE COURSE to the petition (Rollo, p. 58).
Respondents were required to answer said petition (Rollo, p. 74).

Petitioner raised the following assignments of error:

THE COURT A QUO ERRED IN SUSTAINING AS VALID THE SEIZURE AND SALE OF THE COLLEGE
LOT AND BUILDING USED FOR EDUCATIONAL PURPOSES OF THE PETITIONER.

II

THE COURT A QUO ERRED IN DECLARING THAT THE COLLEGE LOT AND BUILDING OF THE
PETITIONER ARE NOT USED EXCLUSIVELY FOR EDUCATIONAL PURPOSES MERELY BECAUSE THE
COLLEGE PRESIDENT RESIDES IN ONE ROOM OF THE COLLEGE BUILDING.

III
THE COURT A QUO ERRED IN DECLARING THAT THE COLLEGE LOT AND BUILDING OF THE
PETITIONER ARE NOT EXEMPT FROM PROPERTY TAXES AND IN ORDERING PETITIONER TO PAY
P5,140.31 AS REALTY TAXES.

IV

THE COURT A QUO ERRED IN ORDERING THE CONFISCATION OF THE P6,000.00 DEPOSIT MADE IN
THE COURT BY PETITIONER AS PAYMENT OF THE P5,140.31 REALTY TAXES. (See Brief for the
Petitioner, pp. 1-2)

The main issue in this case is the proper interpretation of the phrase "used exclusively for educational purposes."

Petitioner contends that the primary use of the lot and building for educational purposes, and not the incidental use
thereof, determines and exemption from property taxes under Section 22 (3), Article VI of the 1935 Constitution.
Hence, the seizure and sale of subject college lot and building, which are contrary thereto as well as to the provision
of Commonwealth Act No. 470, otherwise known as the Assessment Law, are without legal basis and therefore
void.

On the other hand, private respondents maintain that the college lot and building in question which were subjected to
seizure and sale to answer for the unpaid tax are used: (1) for the educational purposes of the college; (2) as the
permanent residence of the President and Director thereof, Mr. Pedro V. Borgonia, and his family including the in-
laws and grandchildren; and (3) for commercial purposes because the ground floor of the college building is being
used and rented by a commercial establishment, the Northern Marketing Corporation (See photograph attached as
Annex "8" (Comment; Rollo, p. 90]).

Due to its time frame, the constitutional provision which finds application in the case at bar is Section 22, paragraph
3, Article VI, of the then 1935 Philippine Constitution, which expressly grants exemption from realty taxes for
"Cemeteries, churches and parsonages or convents appurtenant thereto, and all lands, buildings, and
improvements used exclusively for religious, charitable or educational purposes ...

Relative thereto, Section 54, paragraph c, Commonwealth Act No. 470 as amended by Republic Act No. 409,
otherwise known as the Assessment Law, provides:

The following are exempted from real property tax under the Assessment Law:

xxx xxx xxx

(c) churches and parsonages or convents appurtenant thereto, and all lands, buildings, and
improvements used exclusively for religious, charitable, scientific or educational purposes.

xxx xxx xxx

In this regard petitioner argues that the primary use of the school lot and building is the basic and controlling guide,
norm and standard to determine tax exemption, and not the mere incidental use thereof.

As early as 1916 in YMCA of Manila vs. Collector of lnternal Revenue, 33 Phil. 217 [1916], this Court ruled that
while it may be true that the YMCA keeps a lodging and a boarding house and maintains a restaurant for its
members, still these do not constitute business in the ordinary acceptance of the word, but an institution used
exclusively for religious, charitable and educational purposes, and as such, it is entitled to be exempted from
taxation.

In the case of Bishop of Nueva Segovia v. Provincial Board of Ilocos Norte, 51 Phil. 352 [1972], this Court included
in the exemption a vegetable garden in an adjacent lot and another lot formerly used as a cemetery. It was clarified
that the term "used exclusively" considers incidental use also. Thus, the exemption from payment of land tax in
favor of the convent includes, not only the land actually occupied by the building but also the adjacent garden
devoted to the incidental use of the parish priest. The lot which is not used for commercial purposes but serves
solely as a sort of lodging place, also qualifies for exemption because this constitutes incidental use in religious
functions.

The phrase "exclusively used for educational purposes" was further clarified by this Court in the cases of Herrera
vs. Quezon City Board of assessment Appeals, 3 SCRA 186 [1961] and Commissioner of Internal Revenue vs.
Bishop of the Missionary District, 14 SCRA 991 [1965], thus —

Moreover, the exemption in favor of property used exclusively for charitable or educational
purposes is 'not limited to property actually indispensable' therefor (Cooley on Taxation, Vol. 2, p.
1430), but extends to facilities which are incidental to and reasonably necessary for the
accomplishment of said purposes, such as in the case of hospitals, "a school for training nurses, a
nurses' home, property use to provide housing facilities for interns, resident doctors,
superintendents, and other members of the hospital staff, and recreational facilities for student
nurses, interns, and residents' (84 CJS 6621), such as "Athletic fields" including "a firm used for
the inmates of the institution. (Cooley on Taxation, Vol. 2, p. 1430).

The test of exemption from taxation is the use of the property for purposes mentioned in the Constitution (Apostolic
Prefect v. City Treasurer of Baguio, 71 Phil, 547 [1941]).

It must be stressed however, that while this Court allows a more liberal and non-restrictive interpretation of the
phrase "exclusively used for educational purposes" as provided for in Article VI, Section 22, paragraph 3 of the
1935 Philippine Constitution, reasonable emphasis has always been made that exemption extends to facilities which
are incidental to and reasonably necessary for the accomplishment of the main purposes. Otherwise stated, the use of
the school building or lot for commercial purposes is neither contemplated by law, nor by jurisprudence. Thus, while
the use of the second floor of the main building in the case at bar for residential purposes of the Director and his
family, may find justification under the concept of incidental use, which is complimentary to the main or primary
purpose—educational, the lease of the first floor thereof to the Northern Marketing Corporation cannot by any
stretch of the imagination be considered incidental to the purpose of education.

It will be noted however that the aforementioned lease appears to have been raised for the first time in this Court.
That the matter was not taken up in the to court is really apparent in the decision of respondent Judge. No mention
thereof was made in the stipulation of facts, not even in the description of the school building by the trial judge, both
embodied in the decision nor as one of the issues to resolve in order to determine whether or not said properly may
be exempted from payment of real estate taxes (Rollo, pp. 17-23). On the other hand, it is noteworthy that such fact
was not disputed even after it was raised in this Court.

Indeed, it is axiomatic that facts not raised in the lower court cannot be taken up for the first time on appeal.
Nonetheless, as an exception to the rule, this Court has held that although a factual issue is not squarely raised
below, still in the interest of substantial justice, this Court is not prevented from considering a pivotal factual matter.
"The Supreme Court is clothed with ample authority to review palpable errors not assigned as such if it finds that
their consideration is necessary in arriving at a just decision." (Perez vs. Court of Appeals, 127 SCRA 645 [1984]).

Under the 1935 Constitution, the trial court correctly arrived at the conclusion that the school building as well as the
lot where it is built, should be taxed, not because the second floor of the same is being used by the Director and his
family for residential purposes, but because the first floor thereof is being used for commercial purposes. However,
since only a portion is used for purposes of commerce, it is only fair that half of the assessed tax be returned to the
school involved.

PREMISES CONSIDERED, the decision of the Court of First Instance of Abra, Branch I, is hereby AFFIRMED
subject to the modification that half of the assessed tax be returned to the petitioner.
SO ORDERED.