Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No.

120864 October 8, 2003

MANUEL T. DE GUIA, petitioner, vs. COURT OF APPEALS (Former Sixth Division) and JOSE B. ABEJO, represented by his Attorney-in-Fact, Hermenegilda AbejoRivera, respondents. DECISION CARPIO, J.: The Case This is a Petition for Review on Certiorari1 assailing the 22 August 1994 Decision2 as well as the 27 June 1995 Resolution of the Court of Appeals in CA-G.R. CV No. 39875. The Court of Appeals affirmed the Decision3 of the Regional Trial Court ("trial court") of Malolos, Bulacan, Branch 16, in Civil Case No. 8796-M. The trial courts Decision ordered petitioner Manuel T. De Guia ("DE GUIA") to turn over to private respondent Jose B. Abejo ("ABEJO") possession of the one half () undivided portion of a fishpond and to pay actual damages and attorneys fees. The Antecedents On 12 May 1986, ABEJO4 instituted an action for recovery of possession with damages against DE GUIA. In his complaint, ABEJO alleged that he is the owner of the undivided portion of a property used as a fishpond ("FISHPOND") situated in Meycauayan, Bulacan and covered by TCT No. T-6358 of the Bulacan Register of Deeds. He alleged ownership over approximately 39,611 square meters out of the FISHPONDs total area of 79,220 square meters. ABEJO further averred that DE GUIA continues to possess and use the FISHPOND without any contract and without paying rent to ABEJOs damage and prejudice. ABEJO also complained that DE GUIA refuses to surrender ownership and possession of the FISHPOND despite repeated demands to do so after DE GUIAs sublease contract over the FISHPOND had expired. ABEJO asked the trial court to order DE GUIA to vacate an approximate area of 39,611 square meters as well as pay damages. DE GUIA, a lawyer by profession, appeared on his own behalf. He filed his Answer on 12 January 1990 after the Court of Appeals resolved several issues concerning the validity of the service of summons on him. In his Answer, DE GUIA alleged that the complaint does not state a cause of action and has prescribed. He claimed that the FISHPOND was originally owned by Maxima Termulo who died intestate with Primitiva Lejano as her only heir. According to him, ABEJO is not the owner of the entire FISHPOND but the heirs of Primitiva Lejano who authorized him to possess the entire FISHPOND. He assailed ABEJOs ownership of the undivided portion of the FISHPOND as void and claimed ownership over an undivided half portion of the FISHPOND for himself. DE GUIA sought payment of damages and reimbursement for the improvements he introduced as a builder in good faith. The trial court set the pre-trial and required the parties to file their pre-trial briefs. ABEJO filed his pre-trial brief5on 05 April 1990. DE GUIA filed his pre-trial brief6 on 31 July 1990. DE GUIAs pre-trial brief raised as the only issue in the case the amount of damages in the form of rent that DE GUIA should pay ABEJO. DE GUIA also submitted an Offer to Compromise,7 offering to settle ABEJOs claim for P300,000 and to lease the entire FISHPOND to any party of ABEJOs choice. Hearing commenced on 30 July 1990. ABEJO rested his case on 4 December 1990. DE GUIAs last witness completed her testimony on 22 November 1991. The trial court summarized the evidence presented by ABEJO and DE GUIA as follows: Evidence adduced from plaintiff shows that there are two parcels of land covering a fishpond with a total area of 79,220 sq. m. more or less, situated at Ubihan, Meycauayan, Bulacan and covered by TCT No. 6358 equally owned by Primitiva Lejano and Lorenza Araniego married to Juan Abejo (Exh. A). The one half undivided portion owned by Lorenza Araniego corresponding to 39,611 sq. m. was later purchased by plaintiff from his father Teofilo Abejo (Exh. B), the only heir of the original owner on November 22, 1983. Prior to this sale on July 30, 1974 the whole fishpond (79,220) was the subject of a "Salin ng Pamumusisyong ng Palaisdaan" executed by the heirs of Primitiva Lejano with the knowledge and consent of Teofilo A. Abejo in favor of one Aniano Victa and defendant. The contract provided that the period of lease shall be until November 30, 1979. When the contract expired and defendant failed to surrender the fishpond, written demands the last of which was on November 27, 1983 were made for defendants to pay back rental and to vacate the premises in question (Exh. D & E). Defendant refused to deliver possession and also to pay the rentals due. In anticipation, however, that defendant will vacate the fishpond, plaintiff, on December 21, 1983 entered into a two year "Kasunduan ng Buwisan ng Palaisdaan" with Ruperto C. Villarico for a consideration of P50,000.00 (Exh. G). This

contract, despite its execution and even already notarized, had to be cancelled and the amount of P50,000.00 returned by plaintiff to Villarico when the defendant did not heed the demand to vacate the fishpond. For unpaid rental, actual as well as moral and exemplary damages, plaintiff asks payment of P450,000.00 and P20,000.00 attorneys fees. On the other hand, defendants evidence tends to show that the entire fishpond with an area of 79,200 sq. m. was leased to him by the heirs of Primitiva Lejano. Subsequently, defendant became the absolute owner of one half of the undivided area of the fishpond and he questioned plaintiffs ownership of the other half as void and fraudulent. As to the area pertaining to plaintiff, defendant claimed that he introduced improvements worth P500,000 and being in good faith, he asked that he should be reimbursed by plaintiff. In his pre-trial brief, however, defendant raised the only issue which is the amount of damages plaintiff is entitled to in the form of rental. Hence, the thrust of the testimonies of defendants witnesses particularly Ben Ruben Camargo and Marta Fernando Pea was the amount of rental of fishp onds in the same locality as the fishpond in question at a given time. However, the documentary evidence (Exhs. 1 and 2) in support of their testimony were not offered as evidence.8 The trial court rendered its decision on 8 June 1992, disposing as follows: WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiff and against the defendant and hereby orders that: 1. Defendant shall turn over possession to plaintiff one half undivided portion of the 79,200 sq. m. fishpond who shall enjoy the benefits and fruits in equal share with the defendant effective immediately until such time that partition of the property is effected; 2. Defendant shall pay to plaintiff the amount of P262,500.00 by way of actual or compensatory damages; 3 Defendant shall pay plaintiff P20,000.00 as and for attorneys fees; and 4. To pay the costs. SO ORDERED.9 Aggrieved, DE GUIA went to the Court of Appeals insisting the trial court erred in ordering him to vacate and surrender possession of the undivided portion of the FISHPOND and to pay actual damages and attorneys fees. The Court of Appeals found DE GUIAs appeal without merit and affirmed the trial courts decision. Upon DE GUIAs motion for reconsideration, the appellate court reduced the compensatory damages from P262,500 toP212,500. Hence, the instant petition. The undisputed facts as found by the trial court and adopted in toto by the Court of Appeals are restated as follows: 1. The subject of the dispute are two undivided parcels of land used as a fishpond situated in Barrio Ubihan, Meycauayan, Bulacan, originally co-owned by Primitiva Lejano and Lorenza Araniego married to Juan Abejo. 2. The FISHPOND is registered under the names of Primitiva Lejano and Lorenza Araniego under TCT No. 6358 of the Bulacan Register of Deeds as follows: PRIMITIVA LEJANO, Filipina, of legal age, single - share; and LORENZA ARANIEGO, Filipina, of legal age, married to Juan Abejo, share, --3. The FISHPOND has a total land area of approximately 79,220 square meters. ABEJO is seeking to recover possession of the undivided portion of the FISHPOND containing 39,611 square meters. 4. DE GUIA (along with a certain Aniano Victa) acquired possession of the entire FISHPOND by virtue of a document captioned Salin ng Pamumusisyong ng Palaisdaan ("Lease Contract") executed between him and the heirs of Primitiva Lejano. The Lease Contract was effective from 30 July 1974 up to 30 November 1979 for a consideration of P100,000. 5. The Lease Contract was executed with the knowledge and consent of Teofilo Abejo, sole heir of Lorenza Araniego Abejo. Teofilo Abejo acquired Lorenza Araniego Abejos undivided share in the FISHPOND by intestate succession. 6. Teofilo Abejo (now deceased) sold his undivided share in the FISHPOND to his son, ABEJO, on 22 November 1983.

7. DE GUIA continues to possess the entire FISHPOND and to derive income from the property despite the expiration of the Lease Contract and several demands to vacate made by Teofilo Abejo and by his successor-in-interest, ABEJO. The last demand letter was dated 27 November 1983. 8. ABEJO filed his complaint for recovery of possession with damages against DE GUIA on 12 May 1986. 9. DE GUIAs claim of ownership over the other undivided portion of the FISHPOND has not been finally adjudicated for or ag ainst him. DE GUIA offers the verified Complaint for Annulment of Real Estate Mortgage and Contract of Lease with Preliminary Injunction signed by the heirs of Primitiva Lejano as proof of his ownership of the other undivided half portion of the FISHPOND. Records show that DE GUIA filed the complaint for himself and as attorney-in fact of the heirs of Primitiva Lejano ("Lejano Heirs")10 against Spouses Teofilo Morte and Angelina Villarico, Spouses Ruperto and Milagros Villarico, et al. ("Defendants"). The case was raffled to Branch 12 of the Regional Trial Court of Malolos, Bulacan, and docketed as Civil Case. No. 86-27-M. The complaint alleged that DE GUIA acquired his undivided share in the FISHPOND from the Lejano Heirs in February 1986. DE GUIA and the Lejano Heirs sought to annul the Kasulatan ng Sanglaan and Kasulatan ng Pagbubuwis ng Palaisdaan, executed on 10 November 1979 by Primitiva Lejano in favor of the Defendants. DE GUIA and the Lejano Heirs claimed that Primitiva Lejano signed these documents under duress and without consideration. The trial court rendered judgment11 on 28 February 1992 against DE GUIA and the Lejano Heirs as follows: WHEREFORE, the evidence having shown the plaintiffs, particularly Manuel De Guia, their successor-in-interest, not entitled upon the facts and the law to the relief prayed for in the amended complaint, the same is hereby DISMISSED with costs against said plaintiff. Instead, as prayed for by defendants, judgment is hereby rendered: 1. Declaring the "Kasulatan ng Sanglaan" (Exhs. "A" & "1") dated November 10, 1979, and the "Kasulatan ng Pagbubuwis ng Palaisdaan" (Exhs. "C" &"3") also dated November 10, 1979, as valid for all legal intents and purposes; 2. Ordering the Ex-Officio Sheriff, RTC, Bulacan, to proceed with the extrajudicial foreclosure of the subject real estate mortgage; and 3. Ordering plaintiffs to pay defendants attorneys fees in the amount of P20,000.00. SO ORDERED.12 The Court of Appeals affirmed the trial court in a Decision dated 30 August 2002 in CA-G.R. CV No. 38031. The Court of Appeals found the claim of force and intimidation in the execution of the documents as highly improbable since Primitiva Lejanos son, Renato Davis, witnessed the signing of the documents and found nothing irregular at the time. The appellate court also held that assuming Defendants threatened DE GUIA and the Lejano Heirs with immediate foreclosure, Defendants were merely exercising their legitimate right of foreclosing the mortgaged property for non-payment of the loan. In addition, Primitiva Lejanos lawyer and notary public, Atty. Mamerto Abao, testified that the parties appeared before him to affirm the contents of the documents. He also stated that he was present when Defendants paid Primitiva Lejano Davis and her son Renato. As of this writing, DE GUIA has a pending motion for reconsideration before the Court of Appeals. In the event the Court of Appeals Decision attains finality, DE GUIA may lose whatever right he claims over the FISHPOND. The Trial Courts Ruling The trial court ruled that ABEJO has the right to demand that DE GUIA vacate and surrender an area equivalent to ABEJOs undivided share in the FISHPOND. The trial court explained that DE GUIAs sublease contract expired in 1979 and ABEJO acquired his fathers share in 1983. However, the trial court pointed out that ABEJO failed to present evidence of the judicial or extra-judicial partition of the FISHPOND. The identification of the specific area pertaining to ABEJO and his co-owner is vital in an action to recover possession of real property. Nevertheless, the trial court declared that pending partition, it is only just that DE GUIA pay ABEJO a reasonable amount as rental for the use of ABEJOs share in the FISHPOND. DE GUIA admitted this obligation when he raised as sole issue in his pre-trial brief how much rent he should pay ABEJO. DE GUIA even proposed P300,000 as the reasonable amount but under certain conditions which ABEJO found unacceptable. In determining the reasonable rent due to ABEJO, the trial court considered the Lease Contract between ABEJO and a certain Ruperto C. Villarico which provided for a yearly rent of P25,000 for undivided portion of the FISHPOND. The trial court declared that the total amount of rent due is P212,500, computed from November 1983 when ABEJO became a co-owner of the FISHPOND up to 199113 or a period of eight and one half years. The trial court further ordered DE GUIA to pay an additional P50,000 which represents the amount ABEJO returned to Ruperto C. Villarico when they cancelled the Lease Contract between them due to DE GUIAs refusal to vacate the FISHPOND.

Lastly, the trial court ruled that pending partition, ABEJO as co-owner has the right to possess the FISHPOND and to receive an equal share in the benefits from the FISHPOND effective immediately. Until there is a partition, and while there is no contract of lease, the Civil Code provisions on co-ownership shall govern the rights of the parties. The Court of Appeals Ruling The Court of Appeals affirmed the trial courts decision. The Court of Appeals debunked DE GUIAs claim that partition and not recovery of possession was the proper remedy under the circumstances. The Court of Appeals pointed out that DE GUIAs failure to respect ABEJOs right over his undivided share in the FISHPOND justifies the action for recovery of possession. The trial courts decision effectively enforces ABEJOs right over the property which DE GUIA violated by possession and use without paying compensation. According to the Court of Appeals, partition would constitute a mechanical aspect of the decision just like accounting when necessary. The Court of Appeals likewise rejected DE GUIAs claim that the award of compensatory damages of P242,000, computed based on the rent stipulated in the Lease Contract between ABEJO and Ruperto C. Villarico, is grossly exorbitant. The Court of Appeals clarified that the amount the trial court awarded was P262,500 and not P242,000 as erroneously alleged by DE GUIA. The Court of Appeals pointed out that the notarized Lease Contract between ABEJO and Ruperto C. Villarico carries more evidentiary weight than the testimonies of DE GUIAs witnesses, Ben Ruben Camargo and Marta Fernando Pea. The Court of Appeals also upheld the award of attorneys fees since the parties could have avoided litigation had DE GUIA heeded the justifiable demands of ABEJO. On motion for reconsideration, the Court of Appeals reduced the compensatory damages from P262,500 toP212,500. The Court of Appeals explained that the trial court correctly computed the total amount of rent due atP212,500. The trial court erred, however, in adding the sum of P50,000 representing the rent for 1983 and 1984 which ABEJO returned to Ruperto C. Villarico. The appellate court clarified that the sum of P212,500 was arrived at by multiplying the rent of P25,000 by 8 years. The 8 year period already included the two months rent received from and then subsequently reimbursed to Ruperto C. Villarico. The Issues DE GUIA raises the following issues in his Memorandum: I. THE COURT OF APPEALS ERRED IN AFFIRMING THE TRIAL COURTS DECISION DENYING PETITIONERS PLEA FOR DISMISSAL OF THE COMPLAINT FOR FAILURE TO STATE A CAUSE OF ACTION; II. THE COURT OF APPEALS ERRED IN AFFIRMING THE TRIAL COURTS ORDER DIRECTING PETITIONER TO TURN OVER THE ONE -HALF UNDIVIDED PORTION OF THE FISHPOND WHICH IS STILL UNDER A STATE OF CO-OWNERSHIP; III. THE COURT OF APPEALS ERRED IN AFFIRMING, IN PART, THE AWARD OF ACTUAL OR COMPENSATORY DAMAGES DESPITE LACK OF CREDIBLE EVIDENCE TO SUPPORT THE SAME; IV. THE COURT OF APPEALS ERRED IN AFFIRMING THE AWARD OF ATTORNEYS FEES IN PRIVATE RESPONDENTS FAVOR. 14 In essence, this Court is asked to resolve: (1) whether an action for recovery of possession and turn-over of the undivided portion of a common property is proper before partition; and (2) whether there is sufficient basis for the award of compensatory damages and attorneys fees. The Courts Ruling The petition is partly meritorious. First and Second Issues: Cause of Action and Turn-Over of Possession

DE GUIA contends that a co-owner cannot claim a definite portion from the property owned in common until there is a partition. DE GUIA argues that ABEJO should have filed an action for partition instead of recovery of possession since the court cannot implement any decision in the latter case without first a partition. DE GUIA contends that an action for recovery of possession cannot prosper when the property subject of the action is part of an undivided, co-owned property. The procedural mode adopted by ABEJO, which is recovery of possession, makes enforcement difficult if not impossible since there is still no partition of the subject property. Under Article 484 of the Civil Code, "there is co-ownership whenever the ownership of an undivided thing or right belongs to different persons." A co-owner of an undivided parcel of land is an "owner of the whole, and over the whole he exercises the right of dominion, but he is at the same time the owner of a portion which is truly abstract."15 On the other hand, there is no co-ownership when the different portions owned by different people are already concretely determined and separately identifiable, even if not yet technically described.16 Article 487 of the Civil Code provides, "[a]ny one of the co-owners may bring an action in ejectment." This article covers all kinds of actions for the recovery of possession. Article 487 includes forcible entry and unlawful detainer (accion interdictal), recovery of possession (accion publiciana), and recovery of ownership (accion de reivindicacion). The summary actions of forcible entry and unlawful detainer seek the recovery of physical possession only. These actions are brought before municipal trial courts within one year from dispossession. However, accion publiciana, which is a plenary action for recovery of the right to possess, falls under the jurisdiction of the proper regional trial court when the dispossession has lasted for more than one year. Accion de reivindicacion, which seeks the recovery of ownership, also falls under the jurisdiction of the proper regional trial court.171awphi1.nt Any co-owner may file an action under Article 487 not only against a third person, but also against another co-owner who takes exclusive possession and asserts exclusive ownership of the property.18In the latter case, however, the only purpose of the action is to obtain recognition of the co-ownership. The plaintiff cannot seek exclusion of the defendant from the property because as co-owner he has a right of possession. The plaintiff cannot recover any material or determinate part of the property.19 In Hermogena G. Engreso with Spouse Jose Engreso v. Nestoria De La Cruz and Herminio De La Cruz,20 we reiterated the rule that a co-owner cannot recover a material or determinate part of a common property prior to partition as follows: It is a basic principle in civil law that before a property owned in common is actually partitioned, all that the co-owner has is an ideal or abstract quota or proportionate share in the entire property. A co-owner has no right to demand a concrete, specific or determinate part of the thing owned in common because until division is effected his right over the thing is represented only by an ideal portion. As such, the only effect of an action brought by a co-owner against a co-owner will be to obtain recognition of the co-ownership; the defendant cannot be excluded from a specific portion of the property because as a co-owner he has a right to possess and the plaintiff cannot recover any material or determinate part of the property. Thus, the courts a quo erred when they ordered the delivery of one-half () of the building in favor of private respondent. Indisputably, DE GUIA has been in exclusive possession of the entire FISHPOND since July 1974. Initially, DE GUIA disputed ABEJOs claim of ownership over the undivided portion of the FISHPOND. Subsequently, he implicitly recognized ABEJOs undivided share by offering to settle the case for P300,000 and to vacate the property. During the trial proper, neither DE GUIA nor ABEJO asserted or manifested a claim of absolute and exclusive ownership over the entire FISHPOND.1a\^/phi1.net Before this Court, DE GUIA limits the issues to the propriety of bringing an action for recovery of possession and the recovery of compensatory damages. Following the inherent and peculiar features of co-ownership, while ABEJO and DE GUIA have equal shares in the FISHPOND quantitatively speaking, they have the same right in a qualitative sense as co-owners. Simply stated, ABEJO and DE GUIA are owners of the whole and over the whole, they exercise the right of dominion. However, they are at the same time individual owners of a portion, which is truly abstract because until there is partition, such portion remains indeterminate or unidentified.21 As co-owners, ABEJO and DE GUIA may jointly exercise the right of dominion over the entire FISHPOND until they partition the FISHPOND by identifying or segregating their respective portions. Since a co-ownership subsists between ABEJO and DE GUIA, judicial or extra-judicial partition is the proper recourse. An action to demand partition is imprescriptible and not subject to laches.22 Each co-owner may demand at any time the partition of the common property unless a co-owner has repudiated the co-ownership under certain conditions.23 Neither ABEJO nor DE GUIA has repudiated the co-ownership under the conditions set by law. To recapitulate, we rule that a co-owner may file an action for recovery of possession against a co-owner who takes exclusive possession of the entire co-owned property. However, the only effect of such action is a recognition of the co-ownership. The courts cannot proceed with the actual partitioning of the co-owned property. Thus, judicial or extra-judicial partition is necessary to effect physical division of the FISHPOND between ABEJO and DE GUIA. An action for partition is also the proper forum for accounting the profits received by DE GUIA from the FISHPOND. However, as a necessary consequence of such recognition, ABEJO shall exercise an equal right to possess, use and enjoy the entire FISHPOND.

DE GUIA further claims that the trial and appellate courts erred when they ordered the recovery of rent when the exact identity of the portion in question had not yet been clearly defined and delineated. According to DE GUIA, an order to pay damages in the form of rent is premature before partition. We disagree. The right of enjoyment by each co-owner is limited by a similar right of the other co-owners. A co-owner cannot devote common property to his exclusive use to the prejudice of the co-ownership.24 Hence, if the subject is a residential house, all the co-owners may live there with their respective families to the extent possible. However, if one co-owner alone occupies the entire house without opposition from the other coowners, and there is no lease agreement, the other co-owners cannot demand the payment of rent. Conversely, if there is an agreement to lease the house, the co-owners can demand rent from the co-owner who dwells in the house. The co-owners can either exercise an equal right to live in the house, or agree to lease it. If they fail to exercise any of these options, they must bear the consequences. It would be unjust to require the co-owner to pay rent after the co-owners by their silence have allowed him to use the property.25 In case the co-owners agree to lease a building owned in common, a co-owner cannot retain it for his use without paying the proper rent.26 Moreover, where part of the property is occupied exclusively by some co-owners for the exploitation of an industry, the other co-owners become co-participants in the accessions of the property and should share in its net profits.27 The Lejano Heirs and Teofilo Abejo agreed to lease the entire FISHPOND to DE GUIA. After DE GUIAs lease expired in 1979, he could no longer use the entire FISHPOND without paying rent. To allow DE GUIA to continue using the entire FISHPOND without paying rent would prejudice ABEJOs right to receive rent, which would have accrued to his share in the FISHPOND had it been leased to others.28 Since ABEJO acquired his undivided share in the FISHPOND on 22 November 1983, DE GUIA should pay ABEJO reasonable rent for his possession and use of ABEJOs portion beginning from that date. The compensatory damages of P25,000 per year awarded to ABEJO is the fair rental value or the reasonable compensation for the use and occupation of the leased property,29 considering the circumstances at that time. DE GUIA shall continue to pay ABEJO a yearly rent ofP25,000 corresponding to ABEJOs undivided share in the FISHPOND. However, ABEJO has the option either to exercise an equal right to occupy the FISHPOND, or to file a new petition before the trial court to fix a new rental rate in view of changed circumstances in the last 20 years.1a\^/phi1.net ABEJO made an extrajudicial demand on DE GUIA by sending the 27 November 1983 demand letter. Thus, the rent in arrears should earn interest at 6% per annum from 27 November 1983 until finality of this decision pursuant to Article 220930 of the Civil Code. Thereafter, the interest rate is 12% per annum from finality of this decision until full payment.31 Third Issue: Lack of Credible Evidence to Support Award of Compensatory Damages DE GUIA contends the P212,500 in rent awarded to ABEJO is exorbitant. He assails as doubtful and self-serving evidence the Lease Contract between ABEJO and Ruperto C. Villarico that served as basis for the yearly rent ofP25,000 for ABEJOs share in the FISHPOND. DE GUIA says the trial and appellate courts should have given credence to the testimonies of his witnesses, Ben Ruben Camargo ("Camargo") and Marta Fernando Pea ("Pea") that rentals of fishponds in the same vicinity are for much lesser considerations. This issue involves calibration of the whole evidence considering mainly the credibility of witnesses. As a rule, a party may raise only questions of law in an appeal by certiorari under Rule 45 of the Rules of Court. The Supreme Court is not duty-bound to analyze and weigh again the evidence considered in the proceedings below.32 More so in the instant case, where the Court of Appeals affirmed the factual findings of the trial court.33 It is not true that the trial court disregarded the testimonies of Camargo and Pea because DE GUIA failed to present documentary evidence to support their testimonies. Actually, the trial and appellate courts found the testimonies of Camargo and Pea unconvincing. Judges cannot be expected to rely on the testimonies of every witness. In ascertaining the facts, they determine who are credible and who are not. In doing so, they consider all the evidence before them.34 We find no cogent reason to overturn the trial and appellate courts evaluation of the witnesses testimonies. We likewise find reasonable the P25,000 yearly compensation for ABEJOs undivided share in the FISHPOND. Indeed, being a question of fact, it is for the trial and appellate courts to decide and this Court will not disturb their findings unless clearly baseless or irrational. The exception does not obtain in this case. Fourth Issue: Attorneys Fees

The trial court did not err in imposing attorneys fees of P20,000. Attorneys fees can be awarded in the cases enumerated in Article 2208 of the Civil Code specifically: xxx (2) Where the defendants act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest; xxx DE GUIA is a lawyer and he should have known that a co-owner could not take exclusive possession of a common property. Although DE GUIA offered to settle the case out of court, such offer was made under conditions not acceptable to ABEJO. Certainly, ABEJO was still put to unnecessary expense and trouble to protect his interest under paragraph (2), Article 2208 of the Civil Code. WHEREFORE, the Decision dated 22 August 1994 and Resolution dated 27 June 1995 of the Court of Appeals in CA-G.R. CV No. 39875 is AFFIRMED with respect to that portion ordering Manuel T. De Guia to pay Jose B. Abejo compensatory damages of P212,500 and attorneys fees of P20,000, and MODIFIED as follows: 1. The co-ownership between Manuel T. De Guia and Jose B. Abejo over the entire FISHPOND covered by TCT No. 6358 of the Bulacan Register of Deeds is recognized without prejudice to the outcome of CAG.R. CV No. 38031 pending before the Court of Appeals and other cases involving the same property; 2. Manuel T. De Guia and Jose B. Abejo shall equally enjoy possession and use of the entire FISHPOND prior to partition; 3. The compensatory damages of P25,000 per annum representing rent from 27 November 1983 until May 1992 shall earn interest at 6% per annum from 27 November 1983 until finality of this decision, and thereafter at 12% per annum until full payment; 4. Manuel T. de Guia shall pay Jose B. Abejo a yearly rent of P25,000 from June 1992 until finality of this decision, with interest at 6% per annum during the same period, and thereafter at 12% interest per annum until full payment; 5. After finality of this decision and for as long as Manuel T. de Guia exclusively possesses the entire FISHPOND, he shall pay Jose B. Abejo a yearly rental of P25,000 for the latters undivided share in the FISHPOND, unless Jose B. Abejo secures from the proper court an order fixing a different rental rate in view of possible changed circumstances. SO ORDERED. Davide, Jr., C.J., (Chairman), Vitug, Ynares-Santiago and Azcuna, JJ., concur. Republic of the Philippines SUPREME COURT Manila EN BANC 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, Vigan, and valued at 2. A house of mixed material, with the lot on which it stands, at No. 88 Washington Street, Vigan; valued at 3. A lot on Magallanes Street, Vigan; valued at 4. A parcel of rice land, situated in the barrio of San Julian, Vigan; valued at 5. A parcel of rice land in the pueblo of Santa Lucia; valued at 6. Three parcels of land in the pueblo of Candon; valued at Total

P6,000.00 1,500.00 100.00 60.00 86.00 150.00 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 indivisoproperties; 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 indivisoproperty 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 onehalf 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 indivisoproperty, 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 indivisoproperty 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. Republic of the Philippines SUPREME COURT Manila EN BANC 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 defendantappellee, 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 Doa Josefa de la Rosa; whereupon the Count and Countess Trespalacios together with other coowners brought this suit to annul the lease and, in view of the fact that the land was indivisible, prayed for its sale by public auction and the distribution of the price so obtained; they alleged that they neither took part nor consented to the lease; that the decision of the majority of part owners referred to in article 398 of the Code, implies a common deliberation on the step to be taken , for to do without it, would, even more than to do without the minority, be nothing less than plunder; and that, even if this deliberation were not absolutely necessary, the power of the majority would still be confined to decisions touching the management and enjoyment of the common property, and would not include acts of ownership, such as a lease for twelve years, which according to the Mortgage Law gives rise to a real right, which must be recorded, and which can be performed only by the owners of the property leased. The part owners who had executed the contract prayed in reconvention that it held valid for all the owners in common, and if this could not be, then for all those who had signed it, and for the rest, for the period of six years; and the Audiencia of Caceres having rendered judgment holding the contract null and void, and ordering the sale of the realty and the distribution of the price, the defendants appealed alleging under the third and fourth assignments of error, that the judgment was a violation of article 398 of the Civil Code, which is absolute and sets no limit of time for the efficacy of the decisions arrived at by the majority of the part owners for the enjoyment of the common property, citing the decisions of June 30th, 1897, of July 8th,1902, and of October 30th, 1907; under the fifth assignments of error the appellants contended that in including joint owners among those referred to in said article, which sets certain limits to the power of leasing, in the course of the management of another's property, the court applied article 1548 unduly; and by the seventh assignments of error, they maintained the judgment appealed from also violated article 1727, providing that the principal is not bound where his agent has acted beyond his authority; whence it may be inferred that if in order to hold the contract null and void, the majority of the part owners are looked upon as managers or agents exercising limited powers, it must at least be conceded that in so far as the act in question lies within the scope of their powers, it is valid; the contract cannot be annulled in toto. The Supreme Court held that the appeal from the decision of the Audiencia of Caceres was not well taken and expressed the following consideranda: Considering that, although as a rule the contract of lease constitutes an act of management, as this court has several times held, cases may yet arise, either owing to the nature of the subject matter, or to the period of duration, which may render it imperative to record the contract in the registry of property, in pursuance of the Mortgage Law, where the contract of lease may give rise to a real right in favor of the lessee, and it would then constitute such a sundering of the ownership as transcends mere management; in such cases it must of necessity be recognized that the part owners representing the greater portion of the property held in common have no power to lease said property for a longer period than six years without the consent of all the coowners, whose propriety rights, expressly recognized by the law, would by contracts of long duration be restricted or annulled; and as under article 1548 of the Civil Code such contracts cannot be entered into by the husband with respect to his wife's property, by the parent or guardian with respect to that of the child or ward, and by the manager in default of special power, since the contract of lease only

produces personal obligations, and cannot without the consent of all persons interested or express authority from the owner, be extended to include stipulations which may alter its character, changing it into a contract of partial alienation of the property leased; Considering that, applying this doctrine to the case before us, one of the grounds upon which the judgment appealed from, denying the validity of the lease made by the majority of the part owners of the pasture land El Mortero is based, must be upheld; to wit, that the period of duration is twelve years and the consent of all the coowners has not been obtained; hence, the third, fourth. and fifth assignments of error are without merit; firstly, because article 398 of the Civil Code, alleged to have been violated, refers to acts decided upon by the majority of the part owners, touching the management and enjoyment of the common property, and does not contradict what we have stated in the foregoing paragraph; secondly because although the cases cited were such as arose upon leases for more than six years, yet this point was not raised on appeal, and could not therefore be passed upon; and thirdly, because it cannot be denied that there is an analogy between a manager without special authority, who is forbidden by article 1548 of the Code to give a lease for a period of over six years, and the joint owners constituting a legal majority, who may decide to lease out the indivisible property, with respect to the shares of the other coowners; and having come to the conclusion that the contract is null and void, there is no need to discuss the first two assignments of error which refer to another of the bases adopted, however erroneously, by the trial court; Considering that the sixth assignment of error is without merit, inasmuch as the joint ownership of property is not a sort of agency and cannot be governed by the provisions relating to the latter contract; whence, article 1727 of the Code alleged to have been violated, can no more be applied, than, the question of the validity or nullity of the lease being raise, upon the contract as celebrated, it would be allowable to modify a posteriori some one or other of the main conditions stipulated, like that regarding the duration of the lease, for this would amount to a novation; still less allowable would it be to authorize diverse periods for the different persons unequally interested in the fulfillment. Taking into consideration articles 398,1548, and 1713 of the Civil Code and following the aforesaid decision of June 1,1909, we hold that the contract of lease here in question is null and void. It has been suggested that by reason of prescription and by acceptance of benefits under the lease, the plaintiffs are estopped to question the authority for making the lease.To this we may answer that the burden of proof of prescription devolved upon the defendant and that as far as we can find, there is no proof that Ramon Melencio and his successors ever had knowledge of the existence of the lease in question prior to 1926. We cannot by mere suspicion conclude that they were informed of the existence of the document and its terms; it must be remembered that under a strict interpretation of the terms of the lease, the lessees could remain indefinitely in their tenancy unless the lessors could purchase the mill and the buildings on the land. In such circumstances, better evidence than that presented by the defendant in regard to the plaintiff's knowledge of the lease must be required. The fact that Ramon during his lifetime received his share of the products of land owned in common with his coheirs is not sufficient proof of knowledge of the existence of the contract of lease when it is considered that the land in question was only a small portion of a large tract which Pedro R. Melencio was administering in connection with other community property. The appealed judgment as to the validity of the lease is therefore reversed, and it is ordered that the possession of the land in controversy be delivered to the intervenor Liberata Macapagal in her capacity as administratrix of the estate of the deceased Ramon Melencio. It is further ordered that the defendant pay to said administratrix a monthly rent of P50 for the occupation of the land from May 1st, 1926, until the land is delivered to the administratrix. The sum of P272 demanded by the defendant in his counterclaim may be deducted from the total amount of the rent due and unpaid. The building erected on the land by the defendant and his predecessors in interest may be removed by him, or otherwise disposed of, within six months from the promulgation of this decision. Without costs. So ordered. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. L-51283 June 7, 1989 LOURDES MARIANO, petitioner, vs. COURT OF APPEALS, and DANIEL SANCHEZ, respondents. Jose V. Natividad & Associates for petitioner . Arturo S. Santos for respondents.

NARVASA, J.: The proceedings at bar concern (1) an attempt by a married man to prevent execution against conjugal property of a judgment rendered against his wife, for obligations incurred by the latter while engaged in a business that had admittedly redounded to the benefit of the family, and (2) the interference by a court with the proceedings on execution of a co-equal or coordinate court. Both acts being proscribed by law, correction is called for and will hereby be effected. The proceedings originated from a suit filed by Esther Sanchez against Lourdes Mariano in the Court of First Instance at Caloocan City, 1 for recovery of the value of ladies' ready made dresses allegedly purchased by and delivered to the latter. 2 A writ of preliminary attachment issued at Esther Sanchez' instance, upon a bond posted by Veritas Insurance Company in the amount of P 11,000.00, and resulted in the seizure of Lourdes Mariano's property worth P 15,000.00 or so. 3 Her motion for the discharge of the attachment having been denied, 4 Lourdes Mariano went up to the Court of Appeals on certiorari. That Court ordered 5 the Trial Court to receive evidence on whether or not the attachment had been improvidently or irregularly issued. 6 The Trial Court did so, came to the conclusion that the attachment had indeed been improperly issued, and consequently dissolved it. 7 Trial then ensued upon the issues arising from the complaint as well as Lourdes Mariano's answer with counterclaim-which included a claim for damages resulting from wrongful attachment. Thereafter judgment was rendered in favor of defendant Lourdes Mariano and against plaintiff Esther Sanchez containing the following dispositions, to wit: 8 1. On the complaint, defendant is ordered to pay unto the plaintiff for the value of the dishonored check (Exhs. G-1, H and I) in the total amount of P 1,512.00. 2. On the counterclaim, the plaintiff is ordered to pay unto defendant the following, as follows: a) P 7,500.00 for loss of income of the defendant for 75 days; b) P 16,000.00 for the value of attached goods; c) P 25,000.00 for moral and exemplary damages; d) P 5,000.00 as attorney's fees plus costs of suit. The Veritas Insurance Company which issued the attachment bond is ordered to pay unto the defendant the full insurance coverage of P 11,000.00 to answer for the total liability of the plaintiff thereof Esther Sanchez sought to perfect an appeal by filing a notice of appeal, an appeal bond and a record on appeal. 9 Pending approval of the record on appeal, Lourdes Mariano filed a motion for the immediate execution of the judgment which the Court granted. 10 In virtue of the writ of execution which afterwards issued in due course, the sheriff garnished the sum of P 11,000.00 from Veritas Insurance Company, and levied on real and personal property belonging to the conjugal partnership of Esther Sanchez and her husband, Daniel Sanchez. Esther Sanchez then filed a petition for certiorari with the Court of Appeals, praying for the annulment of the execution pending appeal authorized by the Trial Court; but her petition was adjudged to be without merit and was accordingly dismissed. 11 Daniel Sanchez, Esther's husband, now made his move. He filed a complaint for annulment of the execution in the Court of First Instance at Quezon City in his capacity as administrator of the conjugal partnership. 12 He alleged that the conjugal assets could not validly be made to answer for obligations exclusively contracted by his wife, and that, moreover, some of the personal property levied on, such as household appliances and utensils necessarily used in the conjugal dwelling, were exempt from execution. He also applied for a preliminary injunction pending adjudication of the case on the merits. 13 The Quezon City Court issued an order setting the matter of the injunction for hearing, and commanding the sheriff, in the meantime, to desist from proceeding with the auction sale of the property subject of Daniel Sanchez' claim. 14 Lourdes Mariano filed a motion to dismiss the action; this, the Court denied. 15 She then instituted a special civil action of certiorari in the Court of Appeals 16 where she initially enjoyed some measure of success: her petition was given due course, and the Quezon City Court was restrained by the Appellate Court's Seventh Division 17 from further proceeding with the case. 18 Eventually, however, the Eighth Division 19 came to the conclusion that there was no merit in her cause and dismissed her petition. 20 It ruled that the Quezon City Court had not interfered with the execution process of the Caloocan

Court because Daniel Sanchez's action in the former court raised an issue-the validity of the sheriffs levy on the conjugal partnership assets of the Sanchez spouses different from those adjudicated in the Caloocan Court, and Sanchez was not a party to the case tried by the latter. From this verdict Lourdes Mariano has appealed to this Court, contending that the Appellate Court committed reversible error1) in ruling that the conjugal partnership of Daniel and Esther Sanchez could not be made liable for Esther's judgment obligation arising from the spouses' joint business with Lourdes Mariano; 2) in ruling that the Quezon City Court of First Instance had not interfered with the execution process of the Caloocan Court of First Instance; and 3) when its Eighth Division decided the petition of Lourdes Mariano although the case had been raffled to the Seventh Division and the latter had in fact given due course to the petition. 1. There is no dispute about the fact that Esther Sanchez was engaged in business not only without objection on the part of her husband, Daniel, but in truth with his consent and approval. 21 It is also established that, as expressly acknowledged by Esther herself and never denied by Daniel, the profits from the business had been used to meet, in part at least, expenses for the support of her family, i.e., the schooling of the children, food and other household expenses. 22 Under the circumstances, Lourdes Mariano action against Esther Sanchez was justified, the litigation being "incidental to the ... business in which she is engaged 23 and consequently, the conjugal partnership of Daniel and Esther Sanchez was liable for the debts and obligations contracted by Esther in her business since the income derived therefrom, having been used to defray some of the expenses for the maintenance of the family and the education of the children, had redounded to the benefit of the partnership. 24 It was therefore error for the Court of Appeals to have ruled otherwise. 2. It was also error for the Court of Appeals to have held that there was no interference by the Quezon City Court of First Instance with the execution process of the Caloocan Court. The rule, one of great importance in the administration of justice, is that a Court of First Instance has no power to restrain by means of injunction the execution of a judgment or decree of another judge of concurrent or coordinate jurisdictions. 25 But this is precisely what was done by the Quezon City Court of First Instance: it enjoined the execution of a judgment authorized and directed by a co-equal and coordinate court, the Caloocan City Court of First Instance. It did so on the claim of Daniel Sanchez that the property being levied on belonged to the conjugal partnership and could not be made liable for the wife's obligations. The question that arises is whether such a claim that property levied on in execution of a judgment is not property of the judgment debtor, Daniel Sanchez's wife, but of the conjugal partnership of the Sanchez Spouses is properly cognizable by a Court other than that which rendered judgment adversely to the wife. To be sure, Section 17, Rule 39 of the Rules of Court, authorizes a "third person," i.e., "any other person than the judgment debtor or his agent," to vindicate "his claim to the property by any proper action." The section reads as follows: 26 SEC. 17. Proceedings where property claimed by third person.-If property levied on be claimed by any other person than the judgment debtor or his agent, and such person make an affidavit of his title thereto or right to the possession thereof, stating the grounds of such right or title, and serve the same upon the officer making the levy, and a copy thereof upon the judgment creditor, the officer shall not be bound to keep the property, unless such judgment creditor or his agent, on demand of the officer, indemnify the officer against such claim by a bond in a sum not greater than the value of the property levied on. In case of disagreement as to such value, the same shall be determined by the court issuing the writ of execution. The officer is not liable for damages, for the taking or keeping of the property, to any third-party claimant, unless a claim is made by the latter and unless an action for damages is brought by him against the officer within one hundred twenty (120) days from the date of the filing of the bond. But nothing herein contained shall prevent such claimant or any third person from vindicating his claim to the property by any proper action. xxx xxx xxx The "proper action" referred to in the section "is and should be an entirely separate and distinct action from that in which execution has issued, if instituted by a stranger to the latter suit:" 27 and in "such separate action, the court may issue a writ of preliminary injunction against the sheriff enjoining him from proceeding with the execution sale."28 "Upon the other hand, if the claim of impropriety on the part of the sheriff in

the execution proceedings is made by a party to the action, not a stranger thereto, any relief therefrom may be applied for with, and obtained from, only the executing court; and this is true even if a new party has been impleaded in the suit." 29 In the case at bar, the husband of the judgment debtor cannot be deemed a "stranger" to the case prosecuted and adjudged against his wife. A strikingly similar situation was presented in a case decided by this Court as early as 1976, Rejuso v. Estipona. 30 There, the sheriff tried to evict petitioner Rejuso and his family from their house and lot which had been sold in execution of a money judgment rendered by the Court of First Instance of Davao against Rejuso. What Rejuso did was to institute, together with his wife, Felisa, a separate suit in the same court against the sheriff and the judgment creditor, Estipona, for the purpose of annulling the levy, execution sale, and writ of possession issued in the first action in respect of their residential house and lot, on the theory that that property was conjugal in character and "hence, not subject to such proceedings considering that Felisa was not a party to the previous case." The action was however dismissed by the court on the ground that it had "no jurisdiction over the subject matter of the action or the nature of the action and of the relief sought." 31 The dismissal was had on motion of Estipona who argued that the court had no jurisdiction to "vacate or annul and/or enjoin the enforcement of the process issued by another branch in another case," and since Rejuso had already raised the same issues in the first case, without success, he should not be allowed to "get from another branch ... what he failed to get ... (from) Branch l." This Court affirmed that judgment of dismissal, 32 holding that Rejuso's action was barred by res adjudicata; and "(a)s regards Felisa Rejuso, who is a new party in Civil Case No. 5102" (the second action) it was ruled that... her remedy, if it has not yet been barred by the statute of limitations or become stale in some other way, is within Civil Case No. 4435 (the first suit). Indeed, it is superfluous to start a new action on a matter which can be more simply and conveniently litigated within a former proceeding of which it is more logically and legally an integral part. (Ipekdjian Merchandising Co., Inc, v. CTA, 8 SCRA 59 [1963]). Actually, the court in which the former proceeding was pending has exclusive jurisdiction thereof (De Leon vs. Salvador, 36 SCRA 567), the fact that the two cases are in the same Branch of the same Court of First Instance and presided over by the same Judge notwithstanding. After all, it is simpler and more convenient to observe such practice, which insures also consistency in the resolutions of related questions because they are to be determined in most if not all instances by the same judge. In any case, whether by intervention in the court issuing the writ, or by separate action, it is unavailing for either Esther Sanchez or her husband, Daniel, to seek preclusion of the enforcement of the writ of possession against their conjugal assets. For it being established, as aforestated, that Esther had engaged in business with her husband's consent, and the income derived therefrom had been expended, in part at least, for the support of her family, the liability of the conjugal assets to respond for the wife's obligations in the premises cannot be disputed. The petitioner's appeal must therefore be sustained. However, the petitioner's theory that the Eighth Division of the Appellate Court had improperly taken cognizance of the case which had been raffled to the Seventh Division, must be rejected. It is without foundation, and was evidently made without attempt to ascertain the relevant facts and applicable rules. The case had originally been assigned to Mr. Justice Isidro C. Borromeo for study and report while he was still a member of the Seventh Division. The case was brought by him to the Eighth Division when he was subsequently transferred thereto; and he had ultimately written the opinion for the division after due deliberation with his colleagues. All of this took place in accordance with the Rules of the Court of Appeals. WHEREFORE, the Decision of the Court of Appeals subject of the petition is REVERSED AND SET ASIDE, and the Regional Trial Court (formerly Court of First Instance) at Quezon City is ORDERED to dismiss Civil Case No. 20415 entitled "Daniel P. Sanchez v. Deputy Sheriff Mariano V. Cachero, et al.," with prejudice. Costs against private respondents. SO ORDERED. Republic of the Philippines SUPREME COURT Baguio City

SECOND DIVISION TIRSO D. MONTEROSO, G.R. No. 105608 Petitioner, Present:

- versus QUISUMBING, J., Chairperson, CARPIO MORALES, COURT OF APPEALS, SOLEDAD TINGA, MONTEROSO-CAGAMPANG, VELASCO, JR., and REYGULA MONTEROSO-BAYAN, BRION, JJ.

PERFECTO L. CAGAMPANG, SR., SOFIA PENDEJITO VDA. DE MONTEROSO, FLORENDA MONTEROSO, ALBERTO MONTEROSO, HEIRS OF FABIAN MONTEROSO, JR., REYNATO MONTEROSO, RUBY MONTEROSO, MARLENE MONTEROSO-POSPOS, ADELITA MONTEROSO-BERENGUEL, and HENRIETO MONTEROSO, Respondents. x-----------------------------------------------x SOFIA PENDEJITO VDA. DE G.R. No. 113199 MONTEROSO, SOLEDAD MONTEROSO-CAGAMPANG, PERFECTO L. CAGAMPANG, SR., REYGULA MONTEROSO-BAYAN, FLORENDA MONTEROSO, ALBERTO MONTEROSO, RUBY MONTEROSO, MARLENE MONTEROSO-POSPOS, HENRIETO MONTEROSO, ADELITA MONTEROSO-BERENGUEL, and REYNATO MONTEROSO, Petitioners, - versus COURT OF APPEALS and TIRSO D. MONTEROSO, Respondents. Promulgated: April 30, 2008 x-----------------------------------------------------------------------------------------x

DECISION VELASCO, JR., J.: The Case

Before us are two petitions for review under Rule 45, the first docketed as G.R. No. 105608, and the second docketed as G.R. No. 113199, both assailing the Decision[1]dated March 31, 1992 of the Court of Appeals (CA) in CA-G.R. CV No. 15805 which modified the June 9, 1987 Decision[2] of the Regional Trial Court (RTC), Branch 4 in Butuan City in Civil Case Nos. 1292 and 1332.

The Facts

It is not unusual. Acrimonious litigation between and among siblings and immediate relatives over inheritance does occur. It is unfortunate when the decedent had, while still alive, taken steps to precisely avoid a bruising squabble over inheritance.

In a sense, Don Fabian B. Monteroso, Sr., a former justice of the peace and municipal mayor of Cabadbaran, Agusan del Norte, started it all. During his lifetime, Don Fabian married twice and sired eight children, four from each union.

In 1906, Don Fabian married Soledad Doldol. Out of this marriage were born Soledad, Reygula, Benjamin, and Tirso. On April 8, 1927, Soledad Doldol Monteroso passed away.

A little over a year later, Don Fabian contracted a second marriage with Sofia Pendejito. From this union were born Florenda, Reynato, Alberto, and Fabian, Jr.

After the death of his first wife, but during the early part of his second marriage, Don Fabian filed before the Court of First Instance (CFI) of Agusan an intestate proceeding for the estate of his deceased first wife, Soledad D. Monteroso, docketed as Special Proceeding (SP) No. 309, apparently to obviate any dispute over the inheritance of his children from his first marriage. Subsequently, the CFI receivedand later approved per an Orden[3] (Order) dated March 11, 1936a Proyecto de Particion[4] (Project of Partition) dated February 21, 1935.

The partition in SP No. 309 covered Parcels F-1 to F-5, and adjudicated to Don Fabian the whole of Parcels F-1, F-2, and F-3, and onehalf of Parcel F-5, while the intestate estate of Soledad D. Monteroso comprised the whole of Parcel F-4 and one-half of Parcel F-5. The intestate estate of Soledad D. Monteroso was partitioned and distributed to her four children in equal shares.

Subsequently, a Mocion[5] (Motion) was filed for the delivery to Soledad D. Monterosos four children, her legal heirs, their respective shares in her intestate estate, as adjudicated among them under the duly CFI-approved Project of Partition.

In the meantime, the children of Don Fabian from his first marriage married accordingly: The eldest, Soledad to Atty. Perfecto Cagampang, Sr.; Reygula to Jose Bayan; Benjamin to Mauricia Nakila; and Tirso to Melecia Taa. Benjamin died on February 1, 1947 leaving behind four children with wife Nakila, namely: Ruby, Marlene, Adelita, and Henrieto. A year and a half later, or on October 26, 1948, Don Fabian also passed away.

Before and shortly after Don Fabians demise, conveyances involving certain of parcels thus mentioned were purportedly made.

The following is an illustration of the lineal relation of the parties or the family tree of the direct descendants of Don Fabian from his two marriages:

This brings us to the objects of the squabble: the conjugal patrimonies of Don Fabian from his two successive marriages.

During the lifetime of Don Fabian, the following properties were acquired, viz: PARCEL F-ONE A parcel of coconut plantation on sitio Pandanon, Cabadbaran, Agusan described as follows: North by the property of Telesforo Ago and Gregorio Cupay; East by Miguel Y Climaco Cabonce, Isidro Maamo and Buenaventura Sandigan and Pandanon River, and West by Gregorio Axamin, Alex Fores and Ventura Sandigan with a superficial extension of 10 has. 62 ares and 42 centares. PARCEL F-TWO

A parcel of coconut land situated on sitio Pandanon, Cabadbaran, Agusan, with a superficial extension of 6 hectares, 50 ares bearing Tax No. 14801 of the Municipality of Cabadbaran, Agusan, x x x. PARCEL F-THREE A parcel of coconut land under Tax No. 17167 situated on sitio Calibunan, Cabadbaran, Agusan with superficial extension of 8 hectares and 34 centares x x x. PARCEL F-FOUR A parcel of coconut land under Tax No. 14600 situated on sitio Pandanon, Cabadbaran, Agusan, with a superficial extension of 27 hectares, 96 ares and 28 centares x x x. PARCEL F-FIVE A parcel of residential lot under Tax No. 18477 situated within the Poblacion of the Municipality of Cabadbaran, Agusan, with a house of strong materials found on the same lot with a superficial extension of 660 square meters x x x. PARCEL F-SIX A parcel of residential lot under Tax No. 5374 situated within the Poblacion of the Municipality of Cabadbaran, Agusan, with a superficial extension of 3,890 square meters x x x. PARCEL F-SEVEN A parcel of coconut and corn land under Tax No. 1769 situated at Ambahan, Tubay, Agusan, with a superficial extension of 8 hectares x x x. PARCEL F-EIGHT A parcel of coconut land situated at Ambahan, Tubay, Agusan, under Tax No. 2944, with a superficial extension of 7 hectares, 59 ares and 96 centares x x x.[6] PARCEL S-ONE A parcel of land situated at Tagbongabong, Cabadbaran, Agusan under Tax Dec. No. 5396 with an area of 24 hectares more or less x x x. PARCEL S-TWO A parcel of coconut land situated at Dal-as, Bay-ang, Cabadbaran, Agusan under Tax No. 69 with an area of 24 hectares more or less x x x. PARCEL S-THREE A parcel of coconut land situated at Pandanon, Mabini, Cabadbaran, Agusan, under Tax No. 21639 with an area of 1.4080 hectares more or less x x x. PARCEL S-FOUR A parcel of land situated at Mabini, Cabadbaran, Agusan under Tax No. 3367 with an area of 1,000 sq. m. bounded x x x.[7]

The F designation signified that the covered properties were acquired during the first marriage, to distinguish them from t hose acquired during the second marriage which are designated as S properties.

On July 28, 1969, the children of the late Benjamin D. Monteroso, namely: Ruby Monteroso, Marlene M. Pospos, Henrieto Monteroso, and Adelita Monteroso-Berenguel, filed with the RTC a Complaint for Recovery of Property with Damages against their uncle, Tirso

D. Monteroso. Docketed as Civil Case No. 1292, and later raffled to Branch 4 of the court, the complaint involved a portion of Parcel F-4, described in the Project of Partition, as follows: (1) One parcel of coconut land with the improvements thereon existing, Tax No. 14600 with a superficial extension of 6 hectares, 99 ares and 32 centares, bounded as follows: on the North, Regula Monteroso; on the East by the Provincial Road Butuan-Cabadbaran; on the Sourth Tirso Monteroso and on the West Diego Calo.[8]

As the heirs of Benjamin alleged in their complaint, their uncle, Tirso, was entrusted with the above-described one-fourth portion of Parcel F-4 as part of the share from the estate of Soledad D. Monteroso allotted to their father per SP No. 309. However, their uncle refused to surrender and deliver the same when they demanded such delivery upon their reaching the majority age.

Tirso countered that the portion pertaining to Benjamin was never entrusted to him; it was in the possession of their sister, Soledad Monteroso-Cagampang, who was not entitled to any share in Parcel F-4, having previously opted to exchange her share in said property for another parcel of land, i.e., Parcel F-7, then being occupied by her.

On April 14, 1970, Tirso, in turn, filed a Complaint for Partition and Damages with Receivership docketed as Civil Case No. 1332, involving 12 parcels of land (i.e., Parcels F-1 to F-8 and Parcels S-1 to S-4, mentioned above) against his stepmother, Pendejito, and all his full and half-siblings and/or their representatives. The complaint in Civil Case No. 1332 was subsequently amended to include Perfecto, as codefendant, and Pendejito, as guardian ad litem for the minor children of Fabian P. Monteroso, Jr., who died in 1970 after the filing of the complaint.

In Civil Case No. 1332, Tirso, inter alia, alleged the following: (1) the aforementioned 12 parcels of land belong to the conjugal partnerships of the first and second marriages contracted by Don Fabian; (2) SP No. 309, which purportedly judicially settled the intestate estate of his mother, is null and void for the reason that the project of partition failed to comprehend the entire estate of the decedent as Parcels F-6, F-7, and F-8 were excluded, thereby depriving Tirso of his one-fourth share or legitime over the said three parcels of land; and (3) Parcels S-1 to S-4, having been acquired during the second marriage of Don Fabian, are not paraphernal properties of Sofia Pendejito Vda. de Monteroso.

Answering, the defendants in Civil Case No. 1332 contended that Don Fabian acquired Parcel F-6 during the second marriage, while Parcels F-7 and F-8 were Don Fabians exclusive properties having been acquired through a donation from the heirs of one Benito Tinosa. They further maintained the validity of the judicial partition under SP No. 309 which operates as res judicata insofar as Parcels F-1 to F-5 are concerned. In particular, they asserted that Parcels F-1, F-2, F-3, and one-half of F-5 were adjudicated to Don Fabian as his share in the conjugal partnership of the first marriage, while Parcel F-4 and the other half of Parcel F-5 were equally divided among the four children of the first marriage; that during his lifetime, Don Fabian sold Parcels F-1, F-2, F-3, F-7, and F-8 to Soledad Monteroso-Cagampang; that Soledad Monteroso-Cagampang, Tirso D. Monteroso, and Mauricia Nakila Vda. de Benjamin Monteroso donated Parcel F-6 to Reygula MonterosoBayan; and that Parcels S-1 to S-4 are truly paraphernal properties of Sofia Pendejito Vda. de Monteroso as Parcel S-1 was acquired by her through a homestead patent, Parcel S-2 through adverse possession, and Parcels S-3 and S-4 by purchase.

The Initial Ruling of the RTC

Involving practically the same properties and parties, Civil Case Nos. 1292 and 1332 were consolidated and jointly heard. After a long drawn-out trial spanning almost 15 years, with six different judges successively hearing the case, the RTC, presided by Judge Miguel Rallos, rendered on July 22, 1985 a Decision,[9] dismissing Civil Case No. 1292 on the ground of failure to state a cause of action, but finding, in Civil Case No. 1332, for Tirso.

What appears to be a victory for Tirso was, however, short-lived. Acting on four separate motions for reconsideration duly filed by the various defendants in Civil Case No. 1332, a new judge, who took over the case from Judge Rallos who inhibited himself from the case, rendered a new decision.

The Subsequent Ruling of the RTC

Dated June 9, 1987, the new Decision set aside the July 22, 1985 RTC Decision of Judge Rallos and gave due course to both Civil Case Nos. 1292 and 1332. In full, thefallo of the new decision reads: WHEREFORE, premises considered, both complaints in Civil Cases No. 1292 and 1332 are hereby given due course and judgment is hereby rendered as follows: 1. Declaring, confirming and ordering that Lot 380, Pls-736 located at Pandanon, Cabadbaran, belongs to the children of first marriage and partitioned as per subdivision survey map made by Geodetic Engineer Antonio Libarios, Exh. 7, page 72 of the records as follows: (a.) Lot 380-A, Share of Soledad Monteroso Cagampang with an area of 5.3376 hectares, with technical description therein; Lot 380-B, Share of Reygula Monteroso Bayan with an area of 5.3376 hectares, with technical description therein; Lot 380-C, Share of the Heirs of Benjamin D. Monteroso with an area of 5.3376 hectares with technical description therein; Lot 380-D, Share of Tirso D. Monteroso with an area of 5.3376 hectares and Lot 351, Pls-736 with an area of 6,099 sq. meters, with both technical description therein;

(b.)

(c.)

(d.)

2. It is hereby ordered that Tirso D. Monteroso must deliver, return, relinquish, cede, waive and/or quit claim immediately the area of 3.7815 hectares being portion of Lot 380-C, Pls-736 indicated in the subdivision survey plan by Engr. Libarios, page 72, Records, Civil Case No. 1292, Folio 2, Exh. V, to the Heirs of Benjamin D. Monteroso who are absolute owners of Lot 380-C, Pls-736 and to pay, return and deliver immediately to the said Heirs of Benjamin D. Monteroso the net income in arrears from 1948 to 1983, the total sum of Two Hundred Sixty Thousand Eight Hundred Forty Four and 70/100 (P260,844.70) Pesos with interest of 12% per annum compounded annually from January 1, 1984 up to the present and until fully paid; 3. It is hereby ordered that Reygula Monteroso Bayan must deliver, return, relinquish, cede, waive and/or quit claim immediately the area of 1.6128 hectares which is part of Lot 380-C, Pls-736, indicated in the subdivision survey plan by Engr. Libarios, page 72, Records (Civil Case No. 1292, Folio 2), Exh. V, to the Heirs of Benjamin D. Monteroso who are the absolute owners of Lot 380-C, Pls-736 and to pay, return and deliver immediately to the said Heirs of Benjamin D. Monteroso the net income in arrears from 1948 to 1983 the total sum of One Hundred Six Thousand Nine Hundred Sixty and 40/100 (P106,960.40) Pesos with interest of 12% per annum compounded annually from January 1, 1984 up to the present and until fully paid;

4. It is hereby ordered that Soledad Monteroso Cagampang must deliver, return, relinquish, cede, waive and/or quit claim immediately the area of 1.0929 hectares being portion of Lot 380-C, Pls-736, indicated in the subdivision survey plan by Engr. Libarios, page 72, Records (Civil Case No. 1292, Folio 2), Exh. V, to her sister Reygula Monteroso Bayan who is the absolute owner of Lot 380-C, Pls-736 and to pay, return and deliver immediately to the said Reygula Monteroso Bayan the net income in arrears from 1948 to 1983, the total sum of Seventy Seven Thousand Six Hundred Twenty Five and 96/100 (P77,625.96) Pesos with interest of 12% per annum compounded annually from January 1, 1984 up to the present and until fully paid, subject to deduction of whatever cash advances, if any, was ever received by Reygula M. Bayan. 5. The three alleged Absolute Sale, Exh. C, D and E with all its submarkings are declared fictitious, simulated and no consideration. It can never be considered a donation because aside from being inofficious and impairing the legitime of other heirs, the vendee had not signed therein which could be considered acceptance and above all, these documents were prepared and acknowledged by Notary Public squarely disqualified and highly prohibited. Therefore, all are declared null and void and of no legal effect. So, parcels F-1, F-2, F-3, F-6, F-7 and F-8 [remain] as part of the intestate estate of Don Fabian B. Monteroso, Sr. 6. The Register of Deeds and the Provincial Assessor, both in the Province of Agusan del Norte are hereby ordered to cancel as the same are cancelled and nullified, all transfer of certificates and tax declarations now in the name of Soledad Monteroso de Cagampang and Atty. Perfecto L. Cagampang, Sr. which parcels of land originally were registered and declared in the name of Don Fabian B. Monteroso, Sr., and to register and declare again in the name of Heirs of Don Fabian B. Monteroso, Sr., more particularly the following: (a.) [TCT No. RT-203] (420) for Lot 432, Cad. 121, with an area of 10.0242 hectares under Tax Dec. No. 02-018-0224, Series of 1980, PIN-02-019-05-050 known as Parcel F-1; TCT No. RT-205 (424) for Lot 100, Cad. 121, with an area of 1.9083 hectares under Tax Dec. No. 02-019-0488, Series of 1980, PIN-02-019-08-002 known as F-2; TCT No. RT-204 (423) for Lot 103, Cad. 121, with an area of 2.8438 hectares under Tax Declaration No. 02-019-0335, Series of 1980, PIN-02-019-08-017 known as F-2; Parcel of coconut land located at Poblacion, Cabadbaran, known as F-3 with area of 6.3100 hectares under Tax Dec. No. 02-001-1810, Series of 1980 and PIN-02-001-30-027; Residential Lot, known as F-5 located at Poblacion, Cabadbaran under Tax Dec. No. 18447 then under Tax Dec. No. 1922, containing an area of 660 sq. meters bounded on the North by Washington Street; on the East by Progresso Street; on the South by Rizal Street; and on the West by Ramon Cabrera. Residential Lot known as F-6 located at Poblacion under Tax Dec. No. 5374, Series of 1949 and Tax Dec. No. 499, Series of 1954, consisting of 3,890 sq. meters bounded as follows: North Andres Atega South Rill East Luis Jamboy now Celestino Udarbe, Sixto Ferrer and New Road West Atega Street; (g.) Coconut land known as F-7, located at Ambajan, Tubay, Agusan del Norte under Tax Dec. No. 1769, Series of 1955 and Tax Dec. No. 10-03-0273, Series of 1980 with an area of [8.000] hectares; Parcel of coconut land known as F-8, located at Ambajan, Tubay, Agusan del Norte with an area of 7.5996 hectares under Tax Dec. No. 2944 and Tax Dec. No. 10-03-0273, Series of 1980; Parcel of S-1, located at Tagbongabong, Cabadbaran under Tax Dec. No. 11506, Series of 1963 with an area of 24 hectares in the name of Sofia Vda. de Monteroso; Parcel of S-2, located at Dal-as, Bay-ang, Cabadbaran, under Tax Dec. No. 1888, Series of 1948, Tax Dec. No. 669, Series of 1952, and subsequently transferred in fraud of other heirs, in the name of Florenda P. Monteroso under Tax Dec. No. 11507, Series of 1964, Tax Dec. No. 3381, Series of 1972, Tax Dec. No. 5036, Series of 1974, Tax Dec. No. 02006-0047, Series of 1980;

(b.)

(c.)

(d.)

(e.)

(f.)

(h.)

(i.)

(j.)

(k.)

Parcel of S-3, located at Pandanon, Mabini, Cabadbaran, under Tax Dec. No. 5373, Series of 1949 with an area of 1.4080 hectares and bounded as follows: North Pandanon River South Crisanto Dolleroso East Pandanon River West Pandanon River and Peregrino Aznar;

(l.)

Parcel S-4, located at Mabini, Cabadbaran, under Tax Dec. No. 3367 with an area of 1.6500 hectares and bounded as follows: North Hrs. of G. Corvera South C. Vda. de Alburo East Ellodoro Delleroso West A. Ventura

7. It is hereby declared that upon the death of Don Fabian B. Monteroso, Sr. on March 26, 1948, the following are the properties belonging to his intestate estate: (a.) (b.) (c.) (d.) (e.) (f.) (g.) (h.) (i.) (j.) (k.) Whole parcel Lot 432, F-1; Whole parcels Lot 100 and 103, F-2; Whole parcel cocoland, Calibunan, F-3; One-half (1/2) parcel F-5; One-half (1/2) parcel F-6; One-half (1/2) parcel F-7; One-half (1/2) parcel F-8; One-half (1/2) parcel S-1; One-half (1/2) parcel S-2; One-half (1/2) parcel S-3; One-half (1/2) parcel S-4.

8. It is hereby ordered that Lot 432 under TCT [No.] RT-203 (420) with an area of 10.0242 hectares under Tax Dec. No. 02-018-0224 (1980) is hereby divided into nine (9) equal shares for the eight (8) children of Don Fabian B. Monteroso and the one-ninth (1/9) share be held in usufruct by the widow Sofia Pendejito Monteroso during her lifetime.

Sofia Pendejito Monteroso being in possession and enjoying the fruits or income of F-1 is hereby ordered to pay and deliver immediately to the following heirs the corresponding amount of net income of F-1, Lot 432, from 1948 to 1983: (a.) (b.) (c.) (d.) (e.) (f.) (g.) (h.) To Soledad Monteroso Cagampang P78,521.32 To Reygula Monteroso Bayan P78,521.32 To Hrs. of Benjamin D. Monteroso P78,521.32 To Tirso D. Monteroso P78,521.32 To Florenda P. Monteroso P78,521.32 To Reynato P. Monteroso P78,521.32 To Alberto P. Monteroso P78,521.32 To Hrs. of Fabian P. Monteroso, Jr. P78,521.32

The above-mentioned [amounts] shall be subject to deduction for whatever cash advance any heir may have received. Then the net balance of said [amounts] shall be subject to interest at the rate of twelve percent (12%) per annum compounded annually from January 1, 1984 to the present until fully paid. 9. It is hereby ordered that Lot 100 under [TCT No. RT-205] (424) with an area of 1.9083 hectares under Tax Dec. No. 02-019-0488, Series of 1980 and Lot No. 103 under [TCT No. RT-204] (423) with an area of 2.8438 hectares and under Tax Dec. No. 02-019-0335, Series of 1980, [both known as Parcel F-2,] shall be divided into nine (9) equal shares for the eight (8) children of Fabian B. Monteroso, Sr. and one-ninth (1/9) share shall be held in usufruct by the widow, Sofia P. Monteroso, during her lifetime. Soledad Monteroso Cagampang and Atty. Perfecto L. Cagampang, Sr. are ordered to deliver to [their] co-heirs their shares in these parcels of land, F-2, free from any lien and encumbrances whatsoever, and to pay each of them the net income in arrears from 1948 to 1983, namely:

(a.) (b.) (c.) (d.) (e.) (f.) (g.) (h.)

To Reygula Monteroso Bayan P34,976.85 To Hrs. of Benjamin D. Monteroso P34,976.85 To Tirso D. Monteroso P34,976.85 To Florenda P. Monteroso P34,976.85 To Reynato P. Monteroso P34,976.85 To Alberto P. Monteroso P34,976.85 To Hrs. of Fabian P. Monteroso, Jr. P34,976.85 To Sofia P. Monteroso (usufruct) P34,976.85

The above-mentioned [amounts] shall be subjected to deduction of whatever amount any heir may have received by way of cash advances. The net amount shall be subjected to an interest at the rate of twelve percent (12%) per annum compounded annually from January 1, 1984 to the present or until fully paid. 10. Soledad Monteroso Cagampang and Atty. Perfecto L. Cagampang, Sr. being in possession and enjoying the fruits and income of Parcel F-3, are hereby ordered to pay to the following heirs, the net income in arrears from 1948 to 1983: (a.) (b.) (c.) (d.) (e.) (f.) (g.) (h.) To Reygula Monteroso Bayan P49,727.35 To Hrs. of Benjamin D. Monteroso P49,727.35 To Tirso D. Monteroso P49,727.35 To Florenda P. Monteroso P49,727.35 To Reynato P. Monteroso P49,727.35 To Alberto P. Monteroso P49,727.35 To Hrs. of Fabian P. Monteroso, Jr. P49,727.35 To Sofia P. Monteroso (usufruct) P49,727.35

The above-mentioned [amounts] shall be subject to deduction for whatever cash advance, if any, such heir may have received. Then the net [amounts] shall be subject to interest at the rate of twelve percent (12%) per annum compounded annually from January 1, 1984 to the present until fully paid. Soledad Monteroso Cagampang and Atty. Perfecto L. Cagampang, Sr. are both ordered to deliver to the abovementioned co-heirs their respective shares free from any lien and encumbrances whatsoever. 11. Parcels F-5, F-6, F-7 and F-8 are declared real properties belonging to the first marriage. Hence onehalf (1/2) of each of these four parcels shall equally be divided by the four (4) children of the first marriage and the other half must be divided into nine (9) equal shares for the eight (8) children of Fabian B. Monteroso, Sr., and one-ninth (1/9) shall be held in usufruct by the widow, Sofia Pendejito Vda. de Monteroso. Therefore, it is hereby ordered that F-6 is divided as follows: (a.) (b.) (c.) (d.) (e.) (f.) (g.) (h.) (i.) To Soledad Monteroso Cagampang - - - - 702 sq. m. To Reygula Monteroso Bayan - - - - - - - 702 sq. m. To Hrs. of Benjamin D. Monteroso - - - - 702 sq. m. To Tirso D. Monteroso - - - - - - - - - - - - 702 sq. m. To Florenda P. Monteroso - - - - - - - - - - 216 sq. m. To Reynato P. Monteroso - - - - - - - - - - - 216 sq. m. To Alberto P. Monteroso - - - - - - - - - - - 216 sq. m. To Hrs. of Fabian Monteroso, Jr. - - - - - - 216 sq. m. To Sofia P. Monteroso - - - - - - - - - - - - - 216 sq. m.

12. It is hereby ordered, that Soledad Monteroso Cagampang and Atty. Perfecto L. Cagampang, Sr. must deliver to all heirs their respective shares on F-7 and F-8 including usufruct of Sofia P. Monteroso as declared in paragraph five (5) and in addition, must pay and deliver the net income in arrears from 1948 to 1983, summarized as follows: (a.) (b.) (c.) (d.) (e.) (f.) (g.) (h.) To Reygula Monteroso Bayan - - - - - P189,665.88 To Hrs. of Benjamin D. Monteroso - - P189,665.88 To Tirso D. Monteroso - - - - - - - - - - P189,665.88 To Florenda P. Monteroso - - - - - - - - P 58,358.73 To Reynato P. Monteroso - - - - - - - - - P 58,358.73 To Alberto P. Monteroso - - - - - - - - - P 58,358.73 To Hrs. of Fabian Monteroso, Jr. - - - - P 58,358.73 To Sofia P. Monteroso (usufruct) - - - - P 58,358.73

all with interest at the rate of twelve percent (12%) per annum compounded annually from January 1, 1984 to the present until fully paid. However, it is subject to deduction of whatever cash advances, if ever any heir, may have received. 13. The Deed of Donation in 1948, Exh. F, over parcel known as F-5, is declared null and void because the same was prepared and acknowledged before a Notary Public disqualified and prohibited to do so under Notarial Law (Barretto vs. Cabreza, 33 Phil. Reports 112). Hence, the transfer of tax declaration is hereby ordered cancelled and the same must be declared again in the name of the Heirs of Fabian B. Monteroso, Sr. and ordered partitioned in the proportion stated in paragraph eleven (11) hereof. 14. Parcels of land known as S-1, S-2, S-3 and S-4 are declared conjugal properties of the second marriage. Hence, one-half (1/2) thereof belongs to Sofia Pendejito Monteroso and one-half (1/2) shall be equally divided into nine (9) shares for the eight (8) children of Don Fabian B. Monteroso, Sr. where the one-ninth (1/9) shall be held in usufruct by Sofia P. Monteroso during her lifetime. 15. For the net income in arrears of S-1 located at Tagbongabong, Cabadbaran, from 1948 to 1983, Sofia Pendejito Monteroso is hereby ordered to pay and deliver to the following heirs the corresponding share: (a.) (b.) (c.) (d.) (e.) (f.) (g.) (h.) To Soledad Monteroso Cagampang - - P93,998.12 To Reygula Monteroso Bayan - - - - - P93,998.12 To Hrs. of Benjamin D. Monteroso - - P93,998.12 To Tirso D. Monteroso - - - - - - - - - - P93,998.12 To Florenda P. Monteroso - - - - - - - - P93,998.12 To Reynato P. Monteroso - - - - - - - - P93,998.12 To Alberto P. Monteroso - - - - - - - - - P93,998.12 To Hrs. of Fabian P. Monteroso, Jr. - - P93,998.12

However, all these amounts shall be subject to deduction, if any cash advance was ever made or received by any heir. The above-mentioned [amounts are] subject to an interest at the rate of twelve percent (12%) compounded annually from January 1, 1948 to the present until fully paid. 16. The alleged Deed of Absolute Sale executed by Sofia P. Monteroso in favor of Florenda P. Monteroso over a coconut land located at Dal-as, Bay-ang, Cabadbaran, consisting of 24 hectares is hereby declared null and void being in fraud of other heirs. It is clearly inofficious and impairs the legitime of her brothers, sisters and nephews and nieces. Therefore, the tax declaration in the name of Florenda P. Monteroso under Tax Dec. No. 11507, Series of 1964, Tax Dec. No. 3381, Series of 1972, Tax Dec. No. 5036, Series of 1974 and Tax Dec. No. 02-006-0047, PIN-02-006-02-002 are hereby ordered cancelled and the said land shall be declared again in the name of Heirs of Fabian B. Monteroso. Sofia Pendejito Monteroso is not required to render accounting as to the income of S-2 because the coconut trees therein were planted by her while being already a widow. One-half (1/2) of the land where the coconut trees are planted shall be her share and the other one-half (1/2) shall be divided into nine (9) shares for the eight (8) children of Fabian B. Monteroso including her 1/9 usufruct thereon. 17. Sofia Pendejito Monteroso is hereby ordered to pay and deliver immediately the net income in arrears of parcel S-3 located at Pandanon to the following heirs with the corresponding amount: (a.) (b.) (c.) (d.) (e.) (f.) (g.) (h.) To Soledad Monteroso Cagampang - - P49,349.02 To Reygula Monteroso Bayan - - - - - P49,349.02 To Hrs. of Benjamin D. Monteroso - - P49,349.02 To Tirso D. Monteroso - - - - - - - - - - P49,349.02 To Florenda P. Monteroso - - - - - - - - P49,349.02 To Reynato P. Monteroso - - - - - - - - P49,349.02 To Alberto P. Monteroso - - - - - - - - - P49,349.02 To Hrs. of Fabian P. Monteroso, Jr. - - P49,349.02

However, [the] above-mentioned [amounts] shall be subject to deductions, if any cash advance was ever made or received by any heir. Then the net amount receivable shall be subject to an interest at the rate of twelve percent (12%) compounded annually from January 1, 1984 to the present until fully paid. 18. For the net income in arrears of parcel S-4, located at Mabini, Cabadbaran, from 1948 to 1983, Sofia P. Monteroso is hereby ordered to pay and deliver to the following heirs their corresponding shares:

(a.) (b.) (c.) (d.) (e.) (f.) (g.) (h.)

To Soledad Monteroso Cagampang - - P6,477.54 To Reygula Monteroso Bayan - - - - - P6,477.54 To Hrs. of Benjamin D. Monteroso - - P6,477.54 To Tirso D. Monteroso - - - - - - - - - - P6,477.54 To Florenda P. Monteroso - - - - - - - - P6,477.54 To Reynato P. Monteroso - - - - - - - - P6,477.54 To Alberto P. Monteroso - - - - - - - - - P6,477.54 To Hrs. of Fabian P. Monteroso, Jr. - - P6,477.54

However, all these amounts shall be subject to deductions, if any cash advance was ever made or received by any heir. The above-mentioned amount is subject to an interest at the rate of twelve percent (12%) compounded annually from January 1, 1984 to the present until fully paid. Sofia Pendejito Monteroso is ordered to deliver to the above-mentioned heirs their respective shares free from any lien and encumbrances whatsoever. 19. These cases involved inheritance, hence the Bureau of Internal Revenue (BIR) of Agusan del Norte at Butuan City is hereby notified for prompt, proper and appropriate action. Likewise, the Provincial Treasurer of Agusan del Norte and the Municipal Treasurers of Cabadbaran and Tubay are hereby informed and reminded for their prompt, proper and appropriate action in the assessment and collection of real estate taxes including transfers tax. 20. That all the heirs are hereby directed, and ordered to pay all taxes due in favor of the Government of the Republic of the Philippines within thirty (30) days from the finality of judgment hereof, otherwise, upon proper application or manifestation by appropriate or concerned government agency, a portion of the intestate estate of Don Fabian B. Monteroso, Sr., shall be sold at public auction for such purpose. 21. Under Civil Case No. 1292, Tirso D. Monteroso or his heirs, assigns and successors-in-interest, is hereby ordered to pay Ruby Monteroso, Marlene Monteroso-Pospos, Adelita Monteroso-Berenguel and Henrieto Monteroso the following sums of money: (a.) (b.) (c.) (d.) P10,000.00 for moral damages; P10,000.00 for exemplary damages; P3,000.00 for costs of suit; and P10,000.00 for attorneys fees.

22. Under Civil Case No. 1292, Soledad Monteroso de Cagampang and Reygula Monteroso Bayan are hereby ordered jointly and severally to pay Ruby Monteroso, Marlene Monteroso-Pospos, Adelita Monteroso-Berenguel and Henrieto Monteroso the following sums of money: (a.) (b.) (c.) (d.) P10,000.00 for moral damages; P10,000.00 for exemplary damages; P2,000.00 for costs of suit; and P10,000.00 for attorneys fees.

23. Under Civil Case No. 1332, Soledad Monteroso Cagampang, Atty. Perfecto L. Cagampang, Sr. and Sofia Pendejito Vda. de Monteroso or their heirs, assigns and successors-in-interest, are hereby ordered to pay jointly and severally, unto and in favor of Tirso D. Monteroso or his heirs, assigns and successors-in-interest, the following sums of money: (a.) (b.) (c.) (d.) P20,000.00 for moral damages; P20,000.00 for exemplary damages; P5,000.00 for costs of suit; and P10,000.00 for attorneys fees.

24. It is hereby ordered that a judicial administrator of the intestate estate of Don Fabian B. Monteroso, Sr. shall be appointed by this Court upon written recommendation by all the parties within thirty (30) days from promulgation of this decision. Should the parties fail to submit unanimously a recommendee, the Court at its discretion may appoint an administrator, unless none of the parties appeal this decision and this judgment is complied with by all the parties and/or so executed in accordance with the provisions of the New Rules of Court. SO ORDERED.[10]

As regards Civil Case No. 1292, the RTC found that the heirs of Benjamin have indeed been deprived of their inheritance which corresponds to one-fourth share due their father from the intestate estate of their grandmother, Soledad D. Monteroso. Thus, the court ordered the equal distribution of Parcel F-4, i.e., Lot 380, Pls-736 located in Pandanon, Cabadbaran, Agusan del Norte, among the children of the first marriage of Don Fabian, and partitioned it based on the subdivision survey map prepared by a geodetic engineer.

Turning on the alleged sale of Parcels F-1, F-2, F-3, F-7, and F-8 by Don Fabian to Soledad Monteroso-Cagampang, the RTC found the covering three deeds of absolute sale[11] to be null and void for the reason that the alleged conveyances were fictitious, simulated, and/or without sufficient consideration. Alternatively, the RTC ruled that the conveyances, even if considered as donation, would be inofficious for impairing the legitime of the other compulsory heirs, not to mention the lack of due acceptance of the donation by Soledad MonterosoCagampang. Adding a vitiating element to the conveyances, as the RTC noted, was the fact that the corresponding documents were prepared by and acknowledged before Perfecto, who happened to be the husband of the alleged vendee, Soledad Monteroso-Cagampang.

The RTC also declared as null and void the donation of Parcel F-5 to Reygula Monteroso-Bayan owing to clear legal infirmities attaching to the covering deed of donation.[12] For one, the parcel in question, while purportedly donated free from any liens or encumbrance, was in fact the subject of a deed of absolute sale between Don Fabian and the Cagampang spouses. For another, one of the signatory-donors, Mauricia Nakila, Benjamins widow, did not have the right to effect a donation because she was not a compulsory heir of her husband by representation. The RTC added that the real owners of the rights and interests of Benjamin over Parcel F-5 are her children as representative heirs.

Finally, the RTC declared the Order dated March 11, 1936 issued in SP No. 309 approving the Project of Partition to be valid, and that it constitutes res judicata on the affected properties, i.e., Parcel F-4 and one-half of Parcel F-5, which were equally distributed to the heirs of Soledad D. Monteroso. Pursuing this point and on the finding that Parcels F-1 to F-8 were acquired during the first marriage and Parcels S-1 to S-4 during the second, the RTC thus held that Don Fabians intestate estate consisted of the whole of Parcels F-1, F-2, and F-3; and half of Parcels F-5 to F-8 and half of Parcels S-1 to S-4, to be distributed in accordance with the law on intestate succession. This means, the RTC concluded, that the estate shall descend to Don Fabians compulsory heirs and their representatives, as in the case of the late Benjamin and Fabian, Jr., subject to accounting of the income or produce of the subject properties for the applicable period, less advances made or received by any heir, if any.

The Ruling of the CA

From the above June 9, 1987 Decision, Tirso, defendant in Civil Case No. 1292, appealed to the CA, so did the Cagampang spouses, defendants in Civil Case No. 1332. The other defendants in Civil Case No. 1332, namely: Sofia Pendejito Vda. de Monteroso, Florenda Monteroso, Alberto Monteroso, Heirs of Fabian Monteroso, Jr., Reynato Monteroso, and Reygula Monteroso-Bayan, also interposed their own appeal. The separate appeals were consolidated and docketed as CA-G.R. CV No. 15805.

On March 31, 1992, the CA rendered the assailed decision, affirming with modification the June 9, 1987 RTC Decision, disposing as follows: WHEREFORE, the decision appealed from is hereby modified, as follows: a) In the event that a homestead patent over Parcel S-1 is issued by the Bureau of Lands pursuant to the patent application of Sofia Pendejito Vda. de Monteroso, said patent shall issue not in the name of the applicant but in favor of the eight heirs of Fabian Monteroso, Sr. who thereafter shall be declared absolute owners of the said parcel of land in the proportion stated in this decision but who nevertheless shall allow Sofia Pendejito Vda. de Monteroso to exercise during her lifetime usufructuary rights over a portion of the said parcel of land equivalent to the share therein of each of the heirs of her deceased husband; b) The said heirs of Fabian Monteroso, Sr. are hereby declared absolute owners of Parcel F-6 to the extent of their respective shares therein as presently individually possessed by them pursuant to an extrajudicial partition of the said parcel of land which the Court hereby declares as a valid contract among the said heirs; and c) With the exception of those pertaining to Parcel F-4 as stated in this decision, the parties thus found to have unjustly misappropriated the fruits of the subject parcels of land are hereby directed to render an accounting thereof consistent with our findings in the case at bar. With the exception of the foregoing modifications, the decision under review is hereby AFFIRMED in all other respects. No pronouncement as to costs. SO ORDERED.[13]

The CA summarized into three issues the multifarious assignments of errors raised by the parties, to wit: first, whether or not the intestate estate of Soledad Doldol Monteroso was settled in SP No. 309, thus according the Project of Partition approved therein the effect of res judicata; second, whether or not it was appropriate to partition Parcels F-1, F-2, and F-3, and half of Parcels F-5, F-6, F-7, F-8, S-1, S-2, S-3, and S-4; and third, whether or not Tirso D. Monteroso is entitled to damages.

The CA resolved the first issue in the affirmative, SP No. 309 being a valid and binding proceedings insofar as the properties subject thereof are concerned, i.e., Parcels F-1 to F-5 of which the whole of Parcel F-4 and one-half of Parcel F-5, as Soledad D. Monterosos intestate estate, were distributed to her heirs. This is not to mention that the authenticity and due execution of the documents filed or issued in relation therewithreferring to the Proyecto de Particion dated February 12, 1935 which is a carbon copy of the original, the Orden issued by the CFI on March 11, 1936, and the Mocion dated March 18, 1936having duly been established. Affirming the RTC, the CA rejected Tirsos claim that SP No. 309 is void for settling only a part of the estate of Soledad D. Monteroso. The CA held that partial settlement is not a ground for the nullification of the judicial partition under either the Spanish Civil Code of 1889 or the present Civil Code. The appellate court added that the proper remedy in such a situation is to ask for the partition and the subsequent distribution of the property omitted.

The CA likewise disposed of the second issue in the affirmative, dismissing the opposition of the Cagampang spouses and Reygulo Monteroso-Bayan who all claimed ownership over some of the parcels of land on the strength of the deeds of conveyance executed in their favor. The CA upheld the RTCs finding that the three deeds of absolute sale in which Don Fabian purportedly sold Parcels F -1, F-2, F-3, F-7, and

F-8 to Soledad Monteroso-Cagampang were infirm. The CA noted that even the Cagampang spouses recognized these infirmities, and instead of denying their existence, they tried to justify the same and seek an exception therefrom.

On the alleged donation of Parcel F-5 by Don Fabian to Reygula Monteroso-Bayan, the CA likewise agreed with the RTCs finding on the nullity thereof. The CA pointed out that Reygula Monteroso-Bayan did not controvert the RTCs finding, except to gratuitously say that the trial courts declaration of nullity was wrong since nobody questioned the authenticity of the donation in the first place.

Apropos Parcel S-1, a disposable agricultural land of the public domain which is the subject of a homestead patent application by Don Fabian, the CA, as opposed to the RTCs disposition, held that a patent, if eventually issued, ought to be in the name of the legal heirs of Don Fabian, not of his surviving spouse, Pendejito. This conclusion, so the CA explained, is in line with the provision of Section 105 of the Public Land Act or Commonwealth Act No. 141 (CA 141), as amended.

As to Parcel S-2, the CA agreed with the RTC that it is a conjugal property acquired during the second marriage through a deed of sale[14] executed on August 15, 1947 by Marcelo Morancel. Likewise, the CA said that Parcels S-3 and S-4 are conjugal properties as no evidence was adduced supporting the alleged purchase by Pendejito of said properties with her own funds.

Anent the RTCs order partitioning Parcel F-6, the CA agreed with the defendants in Civil Case No. 1332 that Parcel F-6 has long been partitioned equitably among all the eight children of Don Fabian. Thus, the CA further modified the RTC on this point.

On the third and last issues, the CA set aside all awards of actual damages made by the RTC premised on the income generating capacity of the subject properties, except that of Parcel F-4, as an order of accounting of the fruits of the other subject properties unjustly appropriated by them would address the issue of damages.

It bears to stress at this juncture that, save for the grant of damages and the disposition of Parcels F-6 and S-1, the CA affirmed the questioned RTC Decision on all other points. On June 15, 1992, Tirso D. Monteroso thereafter filed before the Court his partial petition for review under Rule 45, docketed as G.R. No. 105608.

On the other hand, Pendejito, together with the other defendants in Civil Case No. 1332, first interposed a joint motion for partial reconsideration, which the CA denied per its equally assailed December 16, 1993 Resolution,[15] before elevating the case via a petition for review under Rule 45, docketed as G.R. No. 113199.

G.R. No. 105608 Denied with Finality

Per its Resolution[16] dated June 29, 1992, the Court denied Tirso D. Monterosos petition under G.R. No. 105608 for late payment of fees and non-compliance with the requirements of the Rules of Court and Circular Nos. 1-88 and 28-91 on the submission of a certified copy of

the assailed decision/order and a certification of non-forum shopping. Another Resolution[17] of August 12, 1992 followed, this time denying with finality Tirso D. Monterosos motion for reconsideration filed on July 29, 1992. On August 31, 1992, an Entry of Judgment[18] was issued.

In net effect, the March 31, 1992 CA Decision in CA-G.R. CV No. 15805 is final and executory as to Tirso D. Monteroso, and the Court need not pass upon the issues he raised in his petition under G.R. No. 105608, albeit we shall take stock of his Comment[19] and Memorandum[20] in G.R. No. 113199. The Issues

Petitioners in G.R. No. 113199 raise the following issues for our consideration: 1. Whether the finding that the Deeds of Sale (Exhibits C, D and E) were not supported by valuable consideration and sham, fictitious and simulated is supported by the evidence. 2. Whether the finding or conclusion that petitioners Spouses Atty. Perfecto and Soledad Cagampang did not dispute the finding of the trial Court that the Deeds of Sale in question are sham, fictitious and simulated is supported by evidence. 3. Whether the [CA] committed reversible error in concluding that, By invoking the benefits of prescription in their favor, the Cagampang spouses are deemed to have admitted the existence of a co-ownership. 4. Whether the [CA] committed reversible error in upholding partition as the proper remedy of private respondent Tirso Monteroso to recover the properties sold by Fabian Monteroso, Sr. to Soledad D. Monteroso de Cagampang when co-ownership is not pleaded as theory in the Complaint. 5. Whether the [CA] committed reversible error in holding that the cause of action of private respondent Tirso Monteroso is not barred by extinctive prescription and laches. 6. Whether the [CA] committed reversible error in granting reliefs not prayed for in the Complaint in favor of parties who did not assert or claim such relief, such as partition and accounting among the parties and the nullification of the donation in favor of petitioner Reygula Bayan when x x x Tirso Monteroso and the petitioners herein who are signatories to the Deed of Donation did not question or ask for the nullification of the donation in favor of Reygula Bayan. 7. Whether the [CA] committed reversible error in ordering the partition of parcels S-1, S-2, S-3 and S-4 which are admitted in the Complaint to be in the exclusive, adverse possession of petitioners Sofia vda. de Monteroso, Florenda, Alberto and Reynato and the Heirs of Fabian Monteroso, Jr. since the death of Fabian Monteroso, Sr. in 1948, appropriating the harvests unto themselves, to the exclusion of plaintiff (private respondent Tirso Monteroso) who was deprived of his share continuously up to the present.[21]

The Courts Ruling After a circumspect consideration of the arguments earnestly pressed by the parties and in the light of the practically parallel findings of the RTC and CA, we find the petition under G.R. No. 113199 to be devoid of merit.

It is a rule of long standing that: [T]he jurisdiction of the Court in cases brought before it from the Court of Appeals via Rule 45 of the Rules of Court is limited to reviewing errors of law. Findings of fact of the latter are conclusive, except in the following instances: (1) when the findings are grounded entirely on speculation, surmises, or conjectures; (2) when the inference made is manifestly mistaken, absurd, or impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of fact are conflicting; (6) when in making its findings the Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (7) when the findings are contrary to those of the trial court; (8) when the findings are conclusions without

citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioners main and reply briefs are not disputed by the respondent; and (10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record.[22]

None of the above exceptions, however, obtains in the instant case. First and Second Issues: Simulated Sale In connection with the first two related issues, petitioners maintain that the CA erred when it affirmed the RTCs conclusion on the fictitious or simulated nature, for lack or inadequate consideration, of the Deeds of Sale (Exhibits C, D, and E), noting that Tirso failed to present substantial evidence to support the alleged infirmity of the underlying sale. The fact that one of the lots sold under Exhibit C on May 10, 1939 for PhP 2,500 was used as collateral for a PhP 600 loan is not, so petitioners claim, proof that the amount of PhP 600 represents the maximum loan value of the property or that the sale in question is not supported by valuable consideration.

Moreover, petitioners belabored to explain that the trial court erred in concluding that the property conveyed under Exhibit C and covered by Transfer Certificate of Title (TCT) No. RT-203 (420) in the name of Soledad Monteroso-Cagampang, married to Perfecto, was fictitious on the ground that the certificate did not indicate that it was a conjugal property. Petitioners assert that the registration of a property only in the name of one of the spouses is not proof that no consideration was paid therefor. As petitioners would stress, what determines whether a given property is conjugal or separate is the law itself, not what appears in the certificate of title.

Lastly, petitioners take exception from the appellate courts posture that the Cagampang spouses did not dispute the trial courts finding that the deeds of sale (Exhibits C, D, and E) were simulated and fictitious for lack of consideration. Petition ers insist that they in fact contested such conclusion of the RTC in their brief before the CA, adding they only raised the issue of prescription as an alternative defense without conceding the RTCs findings on contract infirmity.

We are not persuaded.

The antecedent facts, as borne by the records, strongly indicate the simulated character of the sale covered by the deeds of absolute sale over Parcels F-1 (Exhibit C), F-2 (Exhibit D), F-3, F-5, F-7, and F-8 (Exhibit E). As found below, Don Fabian never relinquished possession of the covered properties during his lifetime. The first deed,Exhibit E, was executed on May 1, 1939; the second, Exhibit C, on May 10, 1939; and the third, Exhibit D, on September 24, 1939. Soledad Monteroso-Cagampang, however, only took possession of the subject properties after Don Fabians death in 1948 or nine years after contract execution. The gap, unexplained as it were, makes for a strong case that the parties to the sale never intended to be bound thereby.

The more telling circumstance, however, is the fact that Perfecto had judicially sought the amendment of the corresponding TCTs so that only the name of his wife, Soledad, shall be inscribed as real party-in-interest on the Memorandum of Encumbrances at the back portion of the titles. If only to stress the point, when the deeds were executed in 1939, Soledad and Perfecto Cagampang, the notarizing officer, were already married.

A property acquired during the existence of a marriage is presumed conjugal. This postulate notwithstanding, Perfecto Cagampang went out of his way to make it appear that the subject parcels of land were effectively his wifes paraphernal properties. No explanat ion was given for this unusual move.

Hence, we agree with the trial and appellate courts that the unexplained situations described above sufficiently show that the purported conveyances were simulated. We also accord credence to Tirsos allegation that the Cagampang spouses tricked Don Fa bian into believing that his creditors were after the properties which have to be hidden by means of simulated conveyances to Soledad MonterosoCagampang. The fact that only one of the subject lots was used as collateral for a PhP 600 loan which the Cagampang spouses took out does not weaken the conclusion on the simulated character of the contracts, as logically drawn from the twin circumstances adverted to.

The Court can allow that petitioners indeed attempted to traverse, before the CA, the RTCs findings on the area of simulated sale and that they only raised the matter of acquisitive prescription as an alternative defense. However, as we shall explain shortly, the fact of petitioners having made the attempt aforestated will not carry the day for them. Third Issue: Recognition of Co-ownership in Acquisitive Prescription

In its assailed decision, the CA declared, By invoking the benefits of prescription in their favor, the Cagampang spouses are deemed to have admitted the existence of a co-ownership x x x. The petitioners tag this declaration as flawed since the benefit of prescription m ay be availed of without necessarily recognizing co-ownership. Prescription and co-ownership, they maintain, are so diametrically opposed legal concepts, such that one who invokes prescription is never deemed to admit the existence of co-ownership.

Petitioners are mistaken; their error flows from compartmentalizing what the CA wrote. The aforecited portion of the CAs dec ision should not have been taken in isolation. It should have been read in the context of the appellate courts disquisition on the matter of Tirso being a co-owner of the subject undivided properties whose rights thereto, as a compulsory heir, accrued at the moment of death of Don Fabian, vis--vis the defense of acquisitive prescription foisted by the Cagampang spouses. For clarity, we reproduce the pertinent portion of the assailed decision: Nor do we find any merit in the third. From the allegation in the Complaint in Civil Case No. 1332 as well as from the arguments advanced by the parties on the issues raised therein, this Court is convinced that therein plaintiff Tirso Monterosos principal cause of action is unmistakably one for partition which by its very nature is imprescriptible and cannot be barred by laches x x x. The only exception to the rule on the imprescriptibility of an action for partition is provided in a case where the co-ownership of the properties sought to be partitioned had been properly repudiated by a co-owner at which instance the remedy available to the aggrieved heirs lies not in action for partition but for reconveyance which is subject to the rules on extinctive prescription. By invoking the benefits of prescription in their favor, the Cagampang spouses are deemed to have admitted the existence of a co-ownership among the heirs of Fabian Monteroso, Sr. over the properties forming the decedents estate.[23] (Emphasis ours.)

From the foregoing disquisition, what the appellate court tried to convey is clear and simple: partition is the proper remedy available to Tirso who is a co-owner of the subject properties by virtue of his being a compulsory heir, like siblings Soledad, Reygula, and Benjamin, of Don Fabian. The right to seek partition is imprescriptible and cannot be barred by laches. Consequently, acquisitive prescription

or laches does not lie in favor of the Cagampang spouses and against Tirso, the general rule being that prescription does not run against a coowner or co-heir. The only exception to the imprescriptibility of an action for partition against a co-owner is when a co-owner repudiates the co-ownership. Thus, the appellate court ruled that by invoking extinctive prescription as a defense, the lone exception against imprescriptibility of action by a co-owner, the Cagampang spouses are deemed to have contextually recognized the co-ownership of Tirso and must have repudiated such co-ownership in order for acquisitive prescription to set in. Taking off from that premise, the appellate court then proceeded to tackle the issue of repudiation by the Cagampang spouses. Therefore, we hold that the appellate court did not err in finding that the Cagampang spouses are effectively barred from invoking prescription, given that the subject properties are conjugal properties of the decedent, Don Fabian, which cannot be subjected to acquisitive prescription, the necessary consequence of recognizing the co-ownership stake of other legal heirs. Fourth and Fifth Issues: Partition Proper, not Barred by Laches nor by Acquisitive Prescription Being inextricably intertwined, we tackle both issues together. Petitioners, citing Article 494 of the Civil Code[24] and Art. 1965 of the Spanish Civil Code, aver that the right to ask partition is proper only where co-ownership is recognized. They also suggest that no co-ownership obtains in this case considering that no less than Tirso avers in his complaint in Civil Case No. 1332 that from the time of Don Fabians death in 1948, the lots in question have been in the exclusive, adverse, and public possession of the Cagampang spouses. Assayed against this perspective, petitioners submit that partition is not proper, ergo unavailing, but an action for reconveyance which is subject to the rules on extinctive prescription.

Corollary to the posture above taken, petitioners assert that there being no co-ownership over the properties sold by Don Fabian to Soledad Monteroso-Cagampang, Tirsos cause of action, under the Code of Civil Procedure (Act No. 190) in relation to Art. 1116 of the Civil Code,[25] had already prescribed, either in 1949, i.e., 10 years after the subject properties were registered in Soledad Monteroso-Cagampangs name, or in 1958, i.e., 10 years after the cause of action accrued in 1948 (death of Don Fabian), citingOsorio v. Tan.[26] Tirsos complaint in Civil Case No. 1332 was commenced in 1970.

Petitioners contend that the evidence adduced clearly demonstrates that Soledad Monteroso-Cagampang acquired ownership of the subject properties by virtue of the deeds of sale executed in 1939 by Don Fabian. After the sale, she registered them under her name and then took exclusive, adverse, and public possession over them. Thus, they submit that the prescriptive period applicable to the instant case under Act No. 190 had long expired, adding that the CA erred in finding that Soledad Monteroso-Cagampang repudiated the co-ownership only in 1961 when she and the other heirs ignored the demand of Tirso for partition.

As a final point, petitioners alleged that the exclusion of Tirso from the enjoyment of the fruits of the subject properties since after the death of Don Fabian in 1948 is consistent with Soledad Monteroso-Cagampangs claim of exclusive ownership and dominion.

We cannot subscribe to petitioners theory.

The fact that Tirso and the other compulsory heirs of Don Fabian were excluded from the possession of their legitime and the enjoyment of the fruits thereof does not per seargue against the existence of a co-ownership. While Tirso may not have expressly pleaded the theory of co-ownership, his demand from, and act of initiating Civil Case No. 1332 against, the Cagampang spouses for his share necessarily implies that he was asserting his right as co-owner or co-heir of the properties unjustly withheld by the Cagampang spouses through the instrumentality of simulated deeds of sale covering some of the hereditary properties. By asserting his right as a compulsory heir, Tirso has effectively brought into the open the reality that the Cagampang spouses were holding some of the subject properties in trust and that he is a co-owner of all of them to the extent of his legal share or legitime thereon.

Consequently, we are one with the trial and appellate courts that partition is the proper remedy for compulsory or legal heirs to get their legitime or share of the inheritance from the decedent. An action for partition is at once an action for declaration of co-ownership and for segregation and conveyance of a determinate portion of the properties involved.[27] Also, Sec. 1, Rule 69 of the Rules of Court pertinently provides:

SECTION 1. Complaint in action for partition of real estate. A person having the right to compel the partition of real estate may do so as provided in this Rule, setting forth in his complaint the nature and extent of his title and an adequate description of the real estate of which partition is demanded and joining as defendants all other persons interested in the property. (Emphasis ours.)

Being a compulsory heir of Don Fabian, Tirso has the right to compel partition of the properties comprising the intestate estate of Don Fabian as a measure to get his hereditary share. His right as an heir to a share of the inheritance covers all the properties comprising the intestate estate of Don Fabian at the moment of his death,[28] i.e., onOctober 26, 1948. Before partition and eventual distribution of Don Fabians intestate estate, a regime of co-ownership among the compulsory heirs existed over the undivided estate of Don Fabian. Being a coowner of that intestate estate, Tirsos right over a share thereof is imprescriptible.[29] As a matter of law, acquisitive prescription does not apply nor set in against compulsory heirs insofar as their pro-indiviso share or legitime is concerned, unless said heirs repudiate their share.[30] Contrary to petitioners stance, reconveyance is not the proper remedy available to Tirso. Be it remembered in this regard th at Tirso is not asserting total ownership rights over the subject properties, but only insofar as his legitime from the intestate estate of his father, Don Fabian, is concerned.

Acquisitive prescription, however, may still set in in favor of a co-owner, where there exists a clear repudiation of the co-ownership, and the co-owners are apprised of the claim of adverse and exclusive ownership.[31] In the instant case, however, no extinctive or acquisitive prescription has set in against Tirso and other compulsory heirs in favor of the Cagampang spouses because effective repudiation had not timely been made against the former. As aptly put by the appellate court, the repudiation which must be clear and open as to amount to an express disavowal of the co-ownership relation happened not when the deeds of absolute sale were executed in 1939, as these could not have

amounted to a clear notice to the other heirs, but in 1961 when the Cagampang spouses refused upon written demand by Tirso for the partition and distribution of the intestate estate of Don Fabian. Since then, Tirso was deemed apprised of the repudiation by the Cagampang spouses.

However, considering that the new Civil Code was already then in effect, Art. 1141 of said Code[32] applies; thus, Tirso has at the very least 10 years and at the most 30 years to file the appropriate action in court. The records show that Tirsos cause of action has not prescribed as he instituted an action for partition in 1970 or only nine years after the considered express repudiation. Besides, acquisitive prescription also does not lie against Tirso even if we consider that a valid express repudiation was indeed made in 1961 by the Cagampang spouses since in the presence of evident bad faith, the required extraordinary prescription period[33] of 30 years has not yet lapsed, counted from said considered repudiation. Such would still be true even if the period is counted from the time of the death of Don Fabian when the Cagampang spouses took exclusive possession of the subject properties. Sixth Issue: Partition Proper for Conjugal Properties of Second Marriage

On the ground of prescription under Act No. 190, petitioners assert that Tirso lost the right to seek the partition of Parcels S-1, S-2, S-3, and S-4, he having admitted, as early as 1948, the adverse, exclusive, and public possession thereof by Pendejito and her children. This type of possession, they maintain, works as a repudiation by Pendejito and her children of the co-ownership claim of Tirso. They further argue that Parcel S-1 pertains to Pendejito as her paraphernal property since the homestead application therefor was under her name.

We are not persuaded.

Tirsos acknowledgment of Pendejito and her childrens possession of Parcels S-1, S-2, S-3, and S-4 cannot be viewed as the required repudiation to bar Tirso from pursuing his right to seek partition. Under the law on co-ownership, it behooves on the person desiring to exclude another from the co-ownership to do the repudiating. Verily, the records do not show that Pendejito and her children performed acts clearly indicating an intention to repudiate the co-ownership and then apprising Tirso and other co-owners or co-compulsory heirs of such intention.

To be sure, Tirso and his siblings from the first marriage have a stake on Parcels S-2, S-3, and S-4, even if these parcels of land formed part of the conjugal partnership of gains of the second marriage. There can be no serious dispute that the children of the first marriage have a hereditary right over the share of Don Fabian in the partnership assets of the first marriage.

Anent Parcel S-1, we join the CA in its holding that it belongs to the heirs of Don Fabian under Sec. 105 of CA 141, which pertinently provides: Sec. 105. If at any time the applicant or grantee shall die before the issuance of the patent or the final grant of the land, or during the life of the lease, or while the applicant or grantee still has obligations pending towards the Government, in accordance with this Act, he shall be succeeded in his rights and obligations with respect to the land applied for or granted or issued under this Act by his heirs in law, who shall be entitled to have issued to them the

patent or final concession if they show that they have complied with the requirements therefor, and who shall be subrogated in all his rights and obligations for the purposes of this Act. (Emphasis ours.)

It is undisputed that Don Fabian was the homestead patent applicant who was subrogated to the rights of the original applicants, spouses Simeon Cagaanan and Severina Naranjo, by purchasing from the latter Parcel S-1 on May 8, 1943. Don Fabian cultivated the applied area and declared it for taxation purposes. The application, however, would be rejected because death supervened. In 1963, Pendejito filed her own homestead application for Parcel S-1.

Assayed against the foregoing undisputed facts in the light of the aforequoted Sec. 105 of CA 141, the heirs of Don Fabian are entitled to Parcel S-1. Said Sec. 105 has been interpreted in Soliman v. Icdang[34] as having abrogated the right of the widow of a deceased homestead applicant to secure under Sec. 3 of Act No. 926, otherwise known as the Public Land Act of 1903, a patent in her own name, thus: [W]e should bear in mind that, although Adolfo Icdang was married to plaintiff when he filed the homestead application, an applicant may be said to have acquired a vested right over a homestead only by the presentation of the final proof and its approval by the Director of Lands. (Ingara vs. Ramelo, 107 Phil., 498; Balboa vs. Farrales, 51 Phil., 49 8; Republic vs. Diamon, 97 Phil., 838.) In the case at bar, the final proof appears to have been presented to, and approved by the Director of Lands, in 1954, or several years after the death of Adolfo Icdang and the dissolution of his conjugal partnership with plaintiff herein. Hence, the land in question could not have formed part of the assets of said partnership. It belonged to the heirs of Adolfo Icdang, pursuant to section 105 of Commonwealth Act No. 141, reading: xxxx It is worthy of notice that, under the Public Land Act of 1903 (Act No . 926, section 3), in the event of the death of an applicant prior to the issuance of a patent, his widow shall be entitled to have a patent for the land applied for issue to her upon showing that she has consummated the requirements of law for homesteading the lands, and that only in case the deceased applicant leaves no widow shall his interest in the land descend and the patent issue to his legal heirs. Incorporated substantially in section 103 of the Public Land Act of 1919 (Act No. 2874), this policy was changed by Act No. 3517, pursuant to which the deceased shall be succeeded no longer by his widow, but by his heirs in law, who shall be entitled to have issued to them the patentif they show that they have complied with the requirements therefor. And this is, in effect, the rule maintained in the above quoted section 105 of Commonwealth Act No. 141.[35] (Emphasis added.)

It appearing that Don Fabian was responsible for meeting the requirements of law for homesteading Parcel S-1, said property, following Soliman, cannot be categorized as the paraphernal property of Pendejito. Thus, the homestead patent thereto, if eventually issued, must be made in the name of the compulsory heirs of Don Fabian. Over it, Pendejito shall be entitled, pursuant to Art. 834 of the Spanish Civil Code of 1889, only to a usufructuary right over the property equal to the corresponding share of each of Don Fabians compu lsory heirs, i.e., his eight children. Seventh Issue: Judgment Must not Only be Clear but Must Also be Complete

Petitioners bemoan the fact that both the trial and appellate courts granted relief and remedies not prayed for by the parties. As argued, Civil Case No. 1292, initiated by the heirs of Benjamin against Tirso, basically sought recovery of real properties; while Civil Case No. 1332, a countersuit filed by Tirso, was for partition and damages, the main thrust of which is to recover his alleged share from properties in the exclusive possession and enjoyment of other heirs since the death of Don Fabian in 1948. Thus, petitioners take issue against both decisions of

the trial and appellate courts which ordered partition not only in favor of Tirso but also in favor of the other petitioners he sued. What is particularly appalling, according to them, is the order for accounting which no one requested.

Petitioners lament, while understandable, is specious. Our judicial system requires courts to apply the law and grant remedies when appropriately called for by law and justice. In the exercise of this mandate, courts have the discretion to apply equity in the absence or insufficiency of the law. Equity has been defined as justice outside law, being ethical rather than jural and belonging to the sphere of morals than of law. It is grounded on the precepts of conscience and not on any sanction of positive law, for equity finds no room for application where there is law.[36]

In the instant case, a disposition only ordering partial partition and without accounting, as petitioners presently urge, would be most impractical and against what we articulated in Samala v. Court of Appeals.[37] There, we cautioned courts against being dogmatic in rendering decisions, it being preferable if they take a complete view of the case and in the process come up with a just and equitable judgment, eschewing rules tending to frustrate rather than promote substantial justice.

Surely, the assailed path taken by the CA on the grant of relief not specifically sought is not without precedent. In National Housing Authority v. Court of Appeals, where the petitioner questioned the competence of the courts a quo to resolve issues not raised in the pleadings, and to order the disposition of the subject property when what was raised was the issue of right to possession, this Court in dismissing the challenge stated that a case should be decided in its totality, resolving all interlocking issues in order to render justice to all concerned and to end the litigation once and for all.[38] Verily, courts should always strive to settle the entire controversy in a single proceeding leaving no root or branch to bear the seed of future litigation.[39]

Eighth Issue: Deed of Donation Null and Void

Finally, as an incidental issue, petitioners asseverate that the deed of donation (Exhibit F) executed on September 19, 1948, or after the death of Don Fabian, in favor of Reygula M. Bayan, is valid, particularly so since Tirso and the heirs of Benjamin, as represented by their mother, Nakila, do not question the validity of said deed as they in fact signed the same. That the donated property was the same property described and included in the deed of sale (Exhibit E) in favor of Soledad Monteroso-Cagampang is not, they contend, an invalidating factor since what Don Fabian sold under Exhibit E did not extend beyond his conjugal share thereon.

Just like the issue of the nullity of the three deeds of absolute sale (Exhibits C, D, and E) heretofore discussed, we agree with the determination of the RTC and CA as to the invalidity of the donation of Parcel F-5 to Reygula M. Bayan. We need not repeat the reasons for such determination, except the most basic. We refer to the authority of the person who executed the deed of donation. As it were, the widow of Benjamin, Nakila, signed the deed of donation. She, however, cannot give consent to the donation as she has no disposable right thereto. The legal maxim nemo dat quod non habet[40] applies to this instance as Nakila only has usufructuary right equal to the share of her

children under Art. 834 of the Spanish Civil Code of 1889. Besides, Nakila signed the deed of donation in her name and not in the name of her children who are the heirs in representation of their father, Benjamin. Lest it be overlooked, the then minor children were not under the legal guardianship of Nakila, a situation which thus disqualifies her from signing on their behalf.

The fact that nobody objected to the donation is of little consequence, for as the CA aptly observed, The circumstance that parties to a void contract choose to ignore its nullity can in no way enhance the invalid character of such contract. It is axiomatic that void contracts cannot be the subject of ratification, either express or implied.[41]

WHEREFORE, the petition in G.R. No. 113199 is DENIED for lack of merit. The assailed Decision and Resolution dated March 31, 1992 and December 16, 1993, respectively, of the CA in CA-G.R. CV No. 15805 are hereby AFFIRMED IN TOTO. Costs against the petitioners.

SO ORDERED.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION

G.R. No. 76351 October 29, 1993 VIRGILIO B. AGUILAR, petitioner, vs. COURT OF APPEALS and SENEN B. AGUILAR, respondents. Jose F. Manacop for petitioner. Siruello, Muyco & Associates Law Office for private respondent.

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

Since Virgilio was then disqualified from obtaining a loan from SSS, the brothers agreed that the deed of sale would be executed and the title registered in the meantime in the name of Senen. It was further agreed that Senen would take care of their father and his needs since Virgilio and his family were staying in Cebu. After Maximiano Aguilar died in 1974, petitioner demanded from private respondent that the latter vacate the house and that the property be sold and proceeds thereof divided among them. Because of the refusal of respondent to give in to petitioner's demands, the latter filed on 12 January 1979 an action to compel the sale of the house and lot so that the they could divide the proceeds between them. In his complaint, petitioner prayed that the proceeds of the sale, be divided on the basis of two-thirds (2/3) in his favor and one-third (1/3) to respondent. Petitioner also prayed for monthly rentals for the use of the house by respondent after their father died. In his answer with counterclaim, respondent alleged that he had no objection to the sale as long as the best selling price could be obtained; that if the sale would be effected, the proceeds thereof should be divided equally; and, that being a co-owner, he was entitled to the use and enjoyment of the property. Upon issues being joined, the case was set for pre-trial on 26 April 1979 with the lawyers of both parties notified of the pre-trial, and served with the pre-trial order, with private respondent executing a special power of attorney to his lawyer to appear at the pre-trial and enter into any amicable settlement in his behalf. 1 On 20 April 1979, Atty. Manuel S. Tonogbanua, counsel for respondent, filed a motion to cancel pre-trial on the ground that he would be accompanying his wife to Dumaguete City where she would be a principal sponsor in a wedding. On 23 April 1979, finding the reasons of counsel to be without merit, the trial court denied the motion and directed that the pre-trial should continue as scheduled. When the case was called for pre-trial as scheduled on 26 April 1979, plaintiff and his counsel appeared. Defendant did not appear; neither his counsel in whose favor he executed a special power of attorney to represent him at the pre-trial. Consequently, the trial court, on motion of plaintiff, declared defendant as in default and ordered reception of plaintiff's evidence ex parte. On 7 May 1979, defendant through counsel filed an omnibus motion to reconsider the order of default and to defer reception of evidence. The trial court denied the motion and plaintiff presented his evidence. On 26 July 1979, rendering judgment by default against defendant, the trial court found him and plaintiff to be co-owners of the house and lot, in equal shares on the basis of their written agreement. However, it ruled that plaintiff has been deprived of his participation in the property by defendant's continued enjoyment of the house and lot, free of rent, despite demands for rentals and continued maneuvers of defendants, to delay partition. The trial court also upheld the right of plaintiff as co-owner to demand partition. Since plaintiff could not agree to the amount offered by defendant for the former's share, the trial court held that this property should be sold to a third person and the proceeds divided equally between the parties. The trial court likewise ordered defendant to vacate the property and pay plaintiff P1,200.00 as rentals 2 from January 1975 up to the date of decision plus interest from the time the action was filed. On 17 September 1979, defendant filed an omnibus motion for new trial but on 22 October 1979 the trial court denied the motion. Defendant sought relief from the Court of Appeals praying that the following orders and decision of the trial court be set aside: (a) the order of 23 April 1970 denying defendants motion for postponement of the pre-trial set on 26 April 1979; (b) the order of 26 April 1979 declaring him in default and authorizing plaintiff to present his evidenceex-parte; (e) the default judgment of 26 July 1979; and, (d) the order dated 22 October 1979 denying his omnibus motion for new trial. On 16 October 1986, the Court of Appeals set aside the order of the trial court of 26 April 1979 as well as the assailed judgment rendered by default., The appellate court found the explanation of counsel for defendant in his motion to cancel pre-trial as satisfactory and devoid of a manifest intention to delay the disposition of the case. It also ruled that the trial court should have granted the motion for postponement filed by counsel for defendant who should not have been declared as in default for the absence of his counsel. Petitioner now comes to us alleging that the Court of Appeals erred (1) in not holding that the motion of defendant through counsel to cancel the pre-trial was dilatory in character and (2) in remanding the case to the trial court for pre-trial and trial.

The issues to be resolved are whether the trial court correctly declared respondent as in default for his failure to appear at the pre-trial and in allowing petitioner to present his evidence ex-parte, and whether the trial court correctly rendered the default judgment against respondent. We find merit in the petition. As regards the first issue, the law is clear that the appearance of parties at the pre-trial is mandatory. 3 A party who fails to appear at a pre-trial conference may be non-suited or considered as in default. 4 In the case at bar, where private respondent and counsel failed to appear at the scheduled pre-trial, the trial, court has authority to declare respondent in default. 5 Although respondent's counsel filed a motion to postpone pre-trial hearing, the grant or denial thereof is within the sound discretion of the trial court, which should take into account two factors in the grant or denial of motions for postponement, namely: (a) the reason for the postponement and (b) the merits of the case of movant. 6 In the instant case, the trial court found the reason stated in the motion of counsel for respondent to cancel the pre-trial to be without merit. Counsel's explanation that he had to go to by boat as early as 25 March 1979 to fetch his wife and accompany her to a wedding in Dumaguete City on 27 April 1979 where she was one of the principal sponsors, cannot be accepted. We find it insufficient to justify postponement of the pre-trial, and the Court of Appeals did not act wisely in overruling the denial. We sustain the trial court and rule that it did not abuse its discretion in denying the postponement for lack of merit. Certainly, to warrant a postponement of a mandatory process as pre-trial would require much more than mere attendance in a social function. It is time indeed we emphasize that there should be much more than mere perfunctory treatment of the pre-trial procedure. Its observance must be taken seriously if it is to attain its objective, i.e., the speedy and inexpensive disposition of cases. Moreover, the trial court denied the motion for postponement three (3) days before the scheduled pre-trial. If indeed, counsel for respondent could not attend the pre-trial on the scheduled date, respondent at least should have personally appeared in order not to be declared as in default. But, since nobody appeared for him, the order of the trial court declaring him as in default and directing the presentation of petitioner's evidence ex parte was proper. 7 With regard to the merits of the judgment of the trial court by default, which respondent appellate court did not touch upon in resolving the appeal, the Court holds that on the basis of the pleadings of the parties and the evidence presented ex parte, petitioner and respondents are co-owners of subject house and lot in equal shares; either one of them may demand the sale of the house and lot at any time and the other cannot object to such demand; thereafter the proceeds of the sale shall be divided equally according to their respective interests. Private respondent and his family refuse to pay monthly rentals to petitioner from the time their father died in 1975 and to vacate the house so that it can be sold to third persons. Petitioner alleges that respondent's continued stay in the property hinders its disposal to the prejudice of petitioner. On the part of petitioner, he claims that he should be paid two-thirds (2/3) of a monthly rental of P2,400.00 or the sum of P1,600.00. In resolving the dispute, the trial court ordered respondent to vacate the property so that it could be sold to third persons and the proceeds divided between them equally, and for respondent to pay petitioner one-half (1/2) of P2,400.00 or the sum of P1,200.00 as monthly rental, conformably with their stipulated sharing reflected in their written agreement. We uphold the trial court in ruling in favor of petitioner, except as to the effectivity of the payment of monthly rentals by respondent as coowner which we here declare to commence only after the trial court ordered respondent to vacate in accordance with its order of 26 July 1979. Article 494 of the Civil Code provides that no co-owner shall be obliged to remain in the co-ownership, and that each co-owner may demand at any time partition of the thing owned in common insofar as his share is concerned. Corollary to this rule, Art. 498 of the Code states that whenever the thing is essentially, indivisible and the co-owners cannot agree that it be, allotted to one of them who shall indemnify the others, it shall be sold and its proceeds accordingly distributed. This is resorted to (1) when the right to partition the property is invoked by any of the co-owners but because of the nature of the property it cannot be subdivided or its subdivision would prejudice the interests of the co-owners, and (b) the co-owners are not in agreement as to who among them shall be allotted or assigned the entire property upon proper reimbursement of the co-owners. In one case, 8 this Court upheld the order of the trial court directing the holding of a public sale of the properties owned in common pursuant to Art. 498 of the Civil Code. However, being a co-owner respondent has the right to use the house and lot without paying any compensation to petitioner, as he may use the property owned in common long as it is in accordance with the purpose for which it is intended and in a manner not injurious to the interest of the other co-owners. 9 Each co-owner of property heldpro indiviso exercises his rights over the whole property and may use and enjoy the same with no other limitation than that he shall not injure the interests of his co-owners, the reason being that until a division is made, the respective share of each cannot be determined and every co-owner exercises, together with his co-participants joint ownership over the pro indiviso property, in addition to his use and enjoyment of the same. 10

Since petitioner has decided to enforce his right in court to end the co-ownership of the house and lot and respondent has not refuted the allegation that he has been preventing the sale of the property by his continued occupancy of the premises, justice and equity demand that respondent and his family vacate the property so that the sale can be effected immediately. In fairness to petitioner, respondent should pay a rental of P1,200.00 per month, with legal interest; from the time the trial court ordered him to vacate, for the use and enjoyment of the other half of the property appertaining to petitioner. When petitioner filed an action to compel the sale of the property and the trial court granted the petition and ordered the ejectment of respondent, the co-ownership was deemed terminated and the right to enjoy the possession jointly also ceased. Thereafter, the continued stay of respondent and his family in the house prejudiced the interest of petitioner as the property should have been sold and the proceeds divided equally between them. To this extent and from then on, respondent should be held liable for monthly rentals until he and his family vacate. WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of Appeals dated 16 October 1986 is REVERSED and SET ASIDE. The decision of the trial court in Civil Case No. 69.12-P dated 16 July 1979 is REINSTATED, with the modification that respondent Senen B. Aguilar is ordered to vacate the premises in question within ninety (90) days from receipt of this and to pay petitioner Virgilio B. Aguilar a monthly rental of P1,200.00 with interest at the legal rate from the time he received the decision of the trial court directing him to vacate until he effectively leaves the premises. The trial court is further directed to take immediate steps to implement this decision conformably with Art. 498 of the Civil Code and the Rules of Court. This decision is final and executory. SO ORDERED. Cruz, Davide, Jr., Quiason, JJ., concur.

Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 150707 April 14, 2004

APOLONIA LL. OCAMPO Now Substituted by MARIANO O. QUIEN, AMELITA Q. TAN, MILOVAN O. QUIEN, LUISA OCAMPO-LLORIN, MELITA F. OCAMPO, FELIX OCAMPO JR., RAMON OCAMPO, MIGUEL OCAMPO, JUANA OCAMPO, ANDRES OCAMPO SR., VIOLETA OCAMPO, MERCEDITA OCAMPO, ANTONIA OCAMPO, ELISA OCAMPO, BEATRIZ OCAMPO, JUAN JOHNNY OCAMPO, JONAS OCAMPO, MARIA DOLORES OCAMPO, REBECCA OCAMPO, FIDELA OCAMPO, LUIS OCAMPO JR. and ERNESTO O. FORTUNO,petitioners, vs. FIDELA LL. OCAMPO, FELICIDAD LL. OCAMPO, BELEN OCAMPO-BARRITO, VICENTE BARRITO, NEMESIO LL. OCAMPO, IMELDA OCAMPO and JOSE OCAMPO, respondents. DECISION PANGANIBAN, J.: Basic is the rule that the party making an allegation in a civil case has the burden of proving it by a preponderance of evidence. In an action involving property, petitioners should rely on the strength of their own title and not on the alleged weakness of respondents claim. The Case Before this Court is a Petition for Review1 under Rule 45 of the Rules of Court, assailing the October 31, 2001 Decision2 of the Court of Appeals (CA) in CA-GR CV No. 56941. The decretal portion of the Decision reads as follows: "WHEREFORE, with the sole modification that the awards for damages and attorneys fees are hereby deleted, the judgment appealed from is, in all other respects, AFFIRMED. Without costs."3 The CA affirmed the Regional Trial Court (RTC) Decision,4 rendered on October 30, 1996, which decreed thus:

"WHEREFORE, premises considered, the Court finds, holds and declares that defendant Belen Ocampo-Barrito, married to Vicente Barrito, are the true and lawful exclusive owners of the following properties, namely: (a) A parcel of residential/commercial land situated in the poblacion of Nabua, Camarines Sur, bounded on the NE by Carmen Ocampo and Alberto Espiritu, on the SE by the Burgos Street, on the SW by a street, and on the NW by Julian Ocampo and Carmen Ocampo, containing an area of 1,119 square meters, more or less, presently covered by TCT No. 13654 in the name of Belen Ocampo-Barrito, married to Vicente Barrito and previously covered by TCT No. RT-4389(983) in the name of Fidela Ocampo, declared under TD No. 18856 and assessed at P17,240.00. (b) A parcel of residential land situated at San Luis, Nabua, Camarines Sur, bounded on the North and East by a barrio road, on the South by a creek, and on the West by Lot 237, with an area of about 300 square meters, declared under TD No. 19639 with an assessed value of P6,240.00. (c) A parcel of land situated at Sto. Domingo, Nabua, Camarines Sur, bounded on the North by Lot 10323, on the East by Lot 9543, on the South by Lot 10325, and on the West by Lot 10322, with an area of about 4884 square meters, declared under TD No. 35122 and assessed at P6780.00 as described and referred to in paragraph 9, sub-paragraphs (a), (b) and (c) of the original complaint and it is hereby ordered that: 1. The complaint and supplemental complaint are dismissed for failure of the plaintiffs to prove their cause/causes of action by preponderance of evidence and on the added ground of prescription; 2. The plaintiffs are ordered to pay as their joint and several obligation, to defendants Fidela Ll. Ocampo, Belen Ocampo-Barrito and Vicente Barrito, the total sum of P15,000.00 for attorneys fees and other expenses of litigation and P50,000.00 for moral damages; 3. The plaintiffs jointly and severally pay the cost of this suit. 4. Upon the finality of this decision, the notice of lis pendens annotated at plaintiffs behest in the Certificates of Title covering the properties in question, of defendants be cancelled; and the plaintiffs, their agents and representatives as well as successors-in-interest are ordered to respect the right of ownership of said defendants thereto, and to vacate and restore the lawful possession of all portions of said properties to herein defendants, their agents, representatives and successors-in-interest."5 The Facts The CA adopted the RTCs summation of facts as follows: "Notwithstanding its somewhat deficient grammar and syntax, the following summation of the relevant and material antecedents of the case by the court a quo, is substantially correct -This is a civil suit for partition and damages filed by plaintiffs against the defendants. The complaint alleges that during the lifetime of the spouses Jose Ocampo and Juana Llander-Ocampo, they begot ten (10) children, namely: Fidela, Felix, Andres, Nemesio, Jose, Apolonia, Felicidad, Luisa, Rosario, and Luis. Of the aforementioned children, the following are already dead, namely: Felix, who is survived by his widow, Melita F. Ocampo and children Felix, Jr., Ramon and Miguel; Andres, who is survived by Juana Ocampo and children Jose, Andres, Imelda, Violeta and Mercedita; Jose, who is survived by his children Antonia, Elias and Juan (Johnny); Rosario, who is survived by Ernesto O. Fortuno; Luis, who is survived by his children Rose, Ricardo, Jonas, Maria Dolores, Rebecca, Fidela and Luis, Jr.; and Luisa, who is survived by Carlos Llorin and children Mecita, Manuel, Carlos, Jr., Carmelita and Marilou L. Arellano. The complaint further alleges that during the lifetime of the spouses Jose Ocampo and Luisa Llander-Ocampo, they acquired several parcels of land and, upon their death, left the following properties, namely: (a) A parcel of residential/ commercial land situated in the poblacion of Nabua, Camarines Sur, bounded on the NE by Carmen Ocampo and Alberto Espiritu, on the SE by the Burgos Street, on the SW by a Street, and on the NW by Julian Ocampo and Carmen Ocampo, containing an area of 1,119 square meters, more or less,

presently covered by TCT No. RT-4389(983) in the name of Fidela Ocampo, declared under TD No. 18856 and assessed at P17,240.00; (b) A parcel of residential land situated at San Luis, Nabua, Camarines Sur, bounded on the North and East by a barrio road, on the South by a creek, and on the West by Lot 237, with an area of about 300 square meters, declared under TD No. 19639 with an assessed value ofP6,240.00; and (c) A parcel of land situated at Sto. Domingo, Nabua, Camarines Sur, bounded on the North by Lot 10323, on the East by Lot 9543, on the South by Lot 10325, and on the West by Lot 10322, with an area of about 4,884 square meters, declared under TD No. 35122 and assessed at P6,780.00. that all the above named parcels of land are actually owned in common by the children of the late spouses Jos e Ocampo and Juana Llander Ocampo although the land denominated as parcel (a) of the complaint is ostensibly registered in the name of Fidela Ocampo alone but acknowledged by her as a property owned in common by all of them, brothers and sisters; that plaintiffs desire to partition said properties but defendants Fidela Ocampo and Felicidad unlawfully and unreasonably refuse to do so and moved by a common purpose, both of them mortgaged to the PNB the land denominated as parcel (a) of the complaint to secure the payment of a P110,000.00 loan, the proceeds of which were x x x exclusively to the benefit of said defendants only; that the same defendants Fidela Ocampo and Felicidad Ocampo have been receiving the fruits of the properties to the exclusion of their co-heirs amounting to not less than P2,000.00 a year; and, that because of their relationship, they undertook earnest efforts to amicably settle this controversy but because of defendants Fidela Ocampo and Felicidad Ocampo*s+ utterly unreasonable and unjustified actuations, the same failed. xxx xxx xxx

In their complaint, plaintiffs pray that judgment be rendered ordering the partition of the properties described in paragraph 9 of the complaint; ordering defendants Fidela Ocampo and Felicidad Ocampo, to release or otherwise cancel any and all encumbrances on TCT No. RT-4389(983) which they had caused to be annotated thereon, particularly, the mortgage in favor of the PNB; requiring Fidela Ocampo and Felicidad Ocampo to refrain from further encumbering said properties or otherwise subjecting the same to any lien and for that purpose, a writ of preliminary injunction to be issued against them to enjoin the commission of such acts; ordering defendants Fidela Ocampo and Felicidad Ocampo to submit an accounting of the fruits and other produce they had received from said properties; further ordering Fidela Ocampo and Felicidad Ocampo to indemnify plaintiffs the sum of not less than P15,000.00 by way of attorneys fees and related expenses of litigation, plus the costs of the suit; and, further granting plaintiffs such other remedies as may be just and equitable in the premises. xxx xxx xxx

On 17 December 1987, counsel for plaintiffs filed a Motion to Admit Supplemental Complaint dated 2 December 1987 which was granted by the Court as there was no opposition to it. The Supplemental Complaint alleges that defendants Helen Ocampo-Barrito and Vicente Barrito are spouses; that on 30 September 1987, TCT No. RT-4389(983) in the name of defendant Fidela Ocampo and covering the lot described as parcel (a) in paragraph 9 of the original complaint was cancelled and, in lieu thereof, TCT No. 1364 was issued to defendant Belen Ocampo-Barrito, married to defendant Vicente Barrito, on the strength of an allege[d] Deed of Donation Inter Vivos ostensibly executed by defendant Fidela Ll. Ocampo in their favor on 13 January 1984; that at the time the Deed of Donation Inter Vivos was presented for registration and when TCT No. 1364, Registry of Camarines Sur, was issued to defendant Belen Ocampo-Barrito, both the donor and donees were notoriously aware that said parcel of land was among the lots subject of this Civil Case No. IR-1867 of which the donor Fidela Ll. Ocampo and the mother of the donees, Felicidad Ll. Ocampo, are defendants, that said properties were owned by the Ocampo brothers and sisters, and that the donor Fidela Ll. Ocampo was not the exclusive owner thereof; that the transfer of defendants Fidela Ll. Ocampo and Belen Ocampo-Barrito of the ownership over said property now subject of this partition is tainted with fraud, actual and deliberate, to deprive plaintiffs of their legitimate share therein, knowing as they do that the same are a co-ownership of the original parties plaintiffs and defendants herein; that defendants Fidela Ll. Ocampo and the spouses Belen OcampoBarrito and Vicente Barrito have not acted in good faith, deliberately causing damage and injury to the plaintiffs by their avaricious desire to obtain sole ownership of said properties through dubious and illegal means that the defendant spouses Belen Ocampo-Barrito and Vicente Barrito, through dubious means and undue influence over Fidela Ll. Ocampo, a very old spinster whom they have lately taken into their custody, succeeded in having the latter execute this supposed deed of donation inter vivos; that defendants have not acted with justice, honesty and good faith, causing injury to plaintiffs rights in a manner inconsistent with morals and good customs, hence, are liable for moral damages of not less than P50,000.00; and that to set an example for the public good and to deter others similarly minded from doing so, defendants should be assessed exemplary damages of not less than P50,000.00.

Plaintiffs pray that judgment be rendered (a) declaring the Deed of Donation Inter Vivos allegedly executed by Fidela Ll. Ocampo in favor of Belen Ocampo-Barrito and Vicente Barrito be declare[d] null and void, (b) ordering defendants Belen Ocampo-Barrito and Vicente Barrito to reconvey so much of the property subject thereof as pertain to the plaintiffs, (c) directing defendants, jointly and severally, to indemnify plaintiffs such amounts as this Honorable Court may consider fair and reasonable by way of actual, moral and exemplary damages, inclusive of attorneys fees and related expenses of litigation, and (d) granting plaintiffs such other remedies as may be just and equitable in the premises. xxx xxx xxx

As Special Defenses, defendant Belen Ocampo-Barrito allege that the original defendant Fidela Ll. Ocampo, her predecessor-in-interest, since 1949 has been the absolute owner in fee simple of the property by virtue of the issuance of the certificate of title in her name; that her predecessor-in-interest held the same certificate of title to the same parcel of land (TCT No. RT-4389(983) free of all encumbrances and adverse claims and was in notorious, public, and actual possession of the property in concept of absolute owner from 1949 until 13 January 1984, when said predecessor-ininterest validly conveyed the property by donation inter vivos which she accepted in the same public instrument; that TCT No. 1364 was issued to defendant Belen Ocampo-Barrito on the strength of the donation inter vivos executed in her favor by her predecessor-in-interest and has since 30 September 1987, been the absolute owner thereof; that since 1949 none of the plaintiffs ever questioned the absolute ownership and title of defendant Belen Ocampo-Barritos predecessor-in-interest over the property making the decree of registration incontrovertible; that it is fatal for plaintiffs cause of action to allege that defendants exerted undue influence over Fidela Ll. Ocampo for the latter to execute the deed of donation while clearly admitting in both the original and supplemental complaints that defendants are residents of Mindoro Occidental a far away place from Nabua, Camarines Sur, the place where the same predecessor-in-interest admittedly resides; and, that Belen Ocampo-Barritos title cannot be collaterally attacked in these supposed partition proceedings. xxx xxx xxx

Defendants pray that the case be dismissed for utter lack of merit and plaintiffs be ordered to pay defendants the sum of P200,000.00 for moral damages, P50,000.00 for exemplary damages,P100,000.00 as compensatory damages, to pay attorneys fees in the amount of P15,000.00, and for other just and equitable remedies. xxx xxx xxx

As the Special and/or Affirmative Defenses, defendant Fidela Ll. Ocampo alleges that she is the true and absolute owner of the real properties described in paragraph 9 of the original complaint having acquired the same by lucrative title and has, since becoming owner thereof, been in actual possession thereof excepting the portion of the lot described in paragraph 9 (a) of the complaint and covered by Torrens title which was and is still being unlawfully occupied by plaintiffs Quiens; that the properties have been declared for assessment in defendants name as exclusive owner thereof and since her acquisition of said properties, has paid the taxes thereon; that defendant had exercised continuously all the legal incidents of ownership on said lands to the exclusion of and adversely to the public, plaintiffs herein included; that the [D]eed of Donation Inter Vivos and the subsequent transfer of the property mentioned in paragraph 9 of the complaint to other defendants Belen Ocamp[o]-Barrito is valid conveyance which binds the said property; and, that assuming that plaintiffs have a cause of action, the same is barred by laches. xxx xxx xxx

Defendant Fidela Ll. Ocampo prays that judgment be rendered dismissing the complaint and ordering plaintiffs to indemnify such sum as will be proved as well as [s]uch amount as this Court may assess by way of moral and exemplary damages and costs, including necessary expenses for litigation, and for just and equitable reliefs."6 Ruling of the Court of Appeals According to the appellate court, other than the Acknowledgment of Co-ownership7 executed by Respondent Fidela Ocampo, no documentary evidence was offered to establish petitioners claim of co-ownership. The CA held that this piece of documentary evidence could not prevail over the array of testimonial and documentary evidence that had been adduced by respondents to prove their defenses. Communal ownership of the property in question was supposedly not proven, either, by the ancient photograph showing Spouses Chino Jose and Juana Llander Ocampo with their ten children in front of the disputed property; or by another picture showing the name "Oniang Ocampo -- 1-15-61" engraved on the said house or building. The court a quo rejected the argument of petitioners that the title to the subject property had been placed in the name of Fidela, because their parents followed the Chinese custom of placing properties in the name of the eldest son or daughter who was single. Petitioners explained that

upon the death of the eldest sibling, the properties would revert to the younger brothers and sisters. According to the CA, however, not a shred of evidence was adduced to prove that such a Chinese custom existed or was observed in that place. The CA also dismissed petitioners contention that common ownership was indicated by the fact that some of the children of Spouses Ocampo stayed and lived on the subject property. It ruled that fraternal affection could have been the motive that impelled respondents to allow their relatives to use it. In contrast to the arguments of petitioners, the CA said that respondents were able to give clear proof of their ownership of the property: the Transfer Certificate of Title and the corresponding Tax Declaration in the name of Fidela, and later of Belen Ocampo-Barrito. Nevertheless, the CA eliminated the awards for damages and attorneys fees, because the trial court had failed to cite the factual, the legal and the equitable bases therefor. Hence, this Petition.8 The Issues Petitioners raise the following issues for our consideration: "1. Where the evidence presented, oral and documentary, on the question of co-ownership, is overwhelming as it is unopposed, unrebutted and unimpeached, has co-ownership been proved? "2. Where co-ownership is confirmed by long, public possession by co-owners, did the courts commit grave abuse of discretion in holding that there is no co-ownership? "3. Where the evidence of respondents is weak, puerile and inconsistent, did the courts commit a grave misapprehension of facts when they gave credence to it? "4. Where a deed of donation intervivos entered in bad faith deprives the heirs of their hereditary shares, is said deed valid? "5. Where a declaration against interest has not been opposed, assailed, rebutted or impeached, did the courts commit grave abuse of discretion in holding there is no such declaration?"9 At bottom, the question to be resolved in this case is who owns the disputed property? The Court's Ruling The Petition has no merit. Main Issue: Ownership of the Subject Property At the outset, we clarify that although there were three (3) properties originally involved in the litigation brought before the RTC, petitioners appeal dealt only with the first one, referred to in the Statement of Facts above -- a parcel of residential/commercial land situated in the poblacion of Nabua, Camarines Sur. In their CA appeal, petitioners declared that "the focus of this case is on the first [property] which is located at downtown Poblacion of Nabua and therefore a valuable piece of property, 1,119 square meters in all."10 Because petitioners had not questioned the RTC Decision with regard to the other properties, then the adjudication of these matters became final. Thus, only one property is left for resolution in the present proceedings.11 Since the original Complaint was an action for partition, this Court cannot order a division of the property, unless it first makes a determination as to the existence of a co-ownership.12 The settlement of the issue of ownership is the first stage in an action for partition.13 This action will not lie if the claimant has no rightful interest in the subject property. Parties filing the action are in fact required by the Rules of Court14 to set forth in their complaint the nature and the extent of their title to the property. It would be premature to effect a partition thereof until and unless the question of ownership is first definitely resolved.15 Basic is the rule that the party making an allegation in a civil case has the burden of proving it by a preponderance of evidence.16 Petitioners chief evidence of co-ownership of the property in question is simply the Acknowledgement of Co-ownership executed by Fidela. As mentioned

earlier, both the trial and the appellate courts were correct in finding that this piece of documentary evidence could not prevail over the array of testimonial and documentary evidence that were adduced by respondents, as will be expounded below. Petitioners failed to trace the successive transfers of ownership of the questioned property that eventually led to them. Allegedly, it was originally owned by their parents -- Spouses Ocampo -- whose deaths passed it on to the children. Petitioners, however, presented absolutely no proof of ownership of their predecessors-in-interest. In insisting that it was so transferred and thus co-owned, the former rely on the Acknowledgement of Co-ownership executed by Fidela, their eldest sibling. On the other hand, Belen clearly traced the basis of her alleged sole ownership of the property and presented preponderant proof of her claim. First, she presented a Deed of Absolute Sale of Residential Land,17 referring to the subject property, executed between Adolfo Ocampo as seller and Felix Ocampo as buyer. The document dated July 6, 1948, was signed in the presence of two witnesses and acknowledged before Juan B. Ballecer, a notary public. The theory of petitioners is completely demolished by this document, which they never contested. According to them, the land in question was the conjugal property of their parents; and that upon the latters deaths, the former inherited it in common. If indeed the land was the conjugal property of Spouses Ocampo, then petitioners should have presented evidence to prove such ownership by their alleged predecessors-ininterest. Since the former failed to do so, how then can they prove the transfer to them of ownership that has not been established in the first place? It is axiomatic that no one can transfer to another a right greater than that which one has;18 thus, the legal truism that the spring cannot rise higher than its source.19 Likewise, in this Deed of Absolute Sale, Adolfo Ocampo declared his "exclusive ownership" of the property, "having been acquired by purchase[;] and [having] been in [his] continuous, public, peaceful, adverse and material possession for more than 50 years together with [his] predecessors in rights and interest, in [the] concept of owner without any claim of other persons."20 Second, Respondent Belen proved that on February 10, 1953, this property had been sold to Fidela by Felix Ocampo for a valuable consideration; and that Fidela had entered the property, actually occupied it, and exercised all powers of dominion over it to the exclusion of petitioners. As proofs of ownership of the property by Fidela, Belen presented Transfer Certificate of Title No. RT-4389 (983),21 which named the former as owner in fee simple; and a Declaration of Real Property,22 evidencing payment of real property taxes, also by Fidela as owner. To prove further that Fidela had exercised dominion over the property, Belen also presented a Real Estate Mortgage23 executed by the former as absolute owner. Fidela had executed it in favor of her sister Apolonia Ocampo, one of the original petitioners in this case, who is now represented by her heirs. Belen correctly argues that in agreeing to be a mortgagee, Apolonia admitted and recognized Fidela as the true owner of the land in question. The Civil Code provides that an essential requisite of a contract of mortgage is that the mortgagor be the absolute owner of the thing mortgaged.24 Co-ownership cannot be presumed even if only a portion of the property was mortgaged to Apolonia, because a co-owner may dispose only of ones interest in the ideal or abstract part of the undivided thing co-owned with others.25 The effect of a mortgage by a coowner shall be limited to the portion that may be allotted to that person upon the termination of the co-ownership.26 In this case, Fidela mortgaged adefinite portion of the property and thus negated any acknowledgement of co-ownership. Third, Belen then presented a Deed of Donation Inter Vivos27 executed on January 13, 1984, between herself as donee and Fidela as donor. This act shows the immediate source of the formers claim of sole ownership of the property. A donation as a mode of acquiring ownership results in an effective transfer of title to the property from the donor to the donee.28 Petitioners stubbornly rely on the Acknowledgement of Co-ownership allegedly executed by Fidela in favor of her siblings. What they overlook is the fact that at the time of the execution of the Acknowledgement -- assuming that its authenticity and due execution were proven -- the property had already been donated to Belen. The Deed of Donation, which is the prior document, is clearly inconsistent with the document relied upon by petitioners. We agree with the RTCs ratiocination: "On the claim of plaintiffs that defendant Fidela Ll. Ocampo herself made a written acknowledgement for her co-ownership over all the properties disputed with plaintiffs in this case, the same cannot be considered as a declaration against Fidelas interest since the alleged acknowledgement was written and executed on 24 December 1985 when she was no longer the owner of the property as the year previous, on 13 January 1984, she had already donated all her properties to defendant Belen Ocampo-Barrito, so that, in effect, she had no more properties with which she can have an interest to declare against."29 Petitioners argue that the Acknowledgement of Co-ownership may be considered as a declaration against interest. A statement may be admissible as such a declaration if it complies with the following requisites: 1) the declarant is dead or unable to testify; 2) it relates to a fact

against the interest of the declarant; 3) at the time of the declaration, the declarant was aware that it was contrary to his or her interest; and 4) the declarant had no motive to falsify and believed the declaration to be true.30 As correctly found by the trial court, however, the Acknowledgement of Co-ownership could not be a fact against the interest of the declarant, since her right over the property had already been extinguished by the prior act of donation. Thus, at the time of the declaration, Fidela could not have acknowledged co-ownership, as she had no more property against which she had an interest to declare. Finally, Belen presented Transfer Certificate of Title No. 1365431 as proof of her ownership of the property. To be sure, the best proof of ownership of the land is the Certificate of Title (TCT). Hence, more than a bare allegation is required to defeat the face value of respondents TCT, which enjoys a legal presumption of regularity of issuance.32 It is quite surprising that despite the process of transfers and titling of the subject property -- commencing in 1948 and eventually leading to the sole ownership of Belen in 198433 -- it was only after 1984 that petitioners started asserting their claim of co-ownership thereof. We are not unmindful of our ruling that the mere issuance of a certificate of title does not foreclose the possibility that the real property may be under co-ownership with persons not named therein.34 But given the circumstances of this case, the claim of co-ownership by petitioners has no leg to stand on. Again, we stress, Belen clearly traced the source of her sole ownership of the property in question and thereby foreclosed the unproven and unsubstantiated allegation of co-ownership thereof. In addition to the TCT presented, Belen offered as evidence the Tax Declaration35 indicating that she, as owner, had been paying real estate taxes on the property, all to the exclusion of petitioners. On the other hand, petitioners could not show any title, tax receipt or document to prove their ownership. Having filed an action involving property, they should have relied on the strength of their own title and not on the alleged weakness of respondents claim.36 Petitioners assert that their claim of co-ownership of the property was sufficiently proved by their witnesses -- Luisa Ocampo-Llorin and Melita Ocampo. We disagree. Their testimonies cannot prevail over the array of documents presented by Belen. A claim of ownership cannot be based simply on the testimonies of witnesses; much less on those of interested parties, self-serving as they are. As to the photographs presented by petitioners to bolster their claim of co-ownership, we affirm the CAs disposition showing the flimsiness of their claim as follows: "The other piece of documentary evidence presented by appellants really proved nothing. The ancient photograph showing the spouses Chino Jose and Juana Llander Ocampo together with their ten children, simply proved that there was such a picture taking of the spouses with their children. But the photograph does not prove communal ownership by appellants over the disputed parcels of land; neither does it prove that the said properties were indeed owned by the spouses Chino Jose and Juana Ocampo, and then later on transferred to and commonly owned by their children. By the same token, the picture exhibited by appellant showing the name Oniang Ocampo -- 1-15-61 (or Apolonia Ocampo, one of the children of the spouses Chino Jose and Juana) engraved in the house or building, does not prove communal ownership of the properties in question. At best, it is susceptible of various meanings, like: that of Oniang Ocampo was born on 1-15-61, or that she got married on that date, or that she was celebrating a special event on the date mentioned, or that she even died on the date mentioned. And even assuming ex gratia argumenti, that the said engraving proved ownership over the disputed building, some such fact can only work to the prejudice of herein appellants. Why? Because it would mean that only Oniang (or Apolonia) was the owner of the building and that the building is not, therefore, a communal property of the children of the late spouses Chino Jose and Juana. Adverting to this piece of evidence, the Trial Court postulated -The engravings on the house ONIANG OCAMPO BLDG. -- 1-15-61 cannot serve as evidence that the property is of common ownership. At most, this can only establish the fact that said building was constructed for a certain Oniang on 15 January 1961. If, indeed, the property is of common ownership, there could not have been any difficulty to engrave thereon HEIRS OF JOSE OCAMPO and JUANA LLANDER-OCAMPO -- 1-15-61 instead of ONIANG OCAMPO BLDG. -- 1-1561."37 Neither can we accept petitioners contention that co-ownership is shown by the fact that some of the children of Spouses Ocampo stayed, lived, and even put up businesses on the property. The appellate court correctly found that since the litigants in this case were blood relatives, fraternal affection could have been a good motive that impelled either Belen or Fidela to allow petitioners to use the property. Without any proof, however, co-ownership among the parties cannot be presumed. Neither are we persuaded by the contention that Spouses Ocampo placed the subject property in the name of only one person in accordance with a Chinese custom. As mentioned earlier, that custom consisted of placing properties of parents in the name of the eldest unmarried son or daughter, with the implicit understanding that ownership thereof would later revert to the siblings.

In contrast to the failure of petitioners to prove that such custom existed and was practiced in that place,38 Belen presented evidence that clearly negated any claim of ownership by the formers predecessors-in-interest. Having shown that the property in question was originally owned by one Adolfo Ocampo -- not by Spouses Ocampo, from whom petitioners derive their right -- the claim of custom becomes immaterial. The fact that Fidela was not presented in court will not necessarily favor petitioners and prove that the property in question is indeed coowned. If they felt that her testimony would prove their cause, then they could have easily called her as an adverse or a hostile witness.39 But since respondents were confident in the documents they presented in court, they did not see any need to call her as a witness. Petitioners also question the motives of Fidela for donating her properties, when she is still alive and needs money in her old age. They clearly overlook the nature of a donation. Donation is an act of liberality whereby a person gratuitously disposes of a thing or a right in favor of another who accepts it.40 Once perfected, a donation is final; its revocation or rescission cannot be effected, absent any legal ground therefor.41 A donation may in fact comprehend the entire property of the donor.42 At any rate, the law provides that donors should reserve, in full ownership or in usufruct, sufficient means for their own support and that of all their relatives who, at the time of the acceptance of the donation, are by law entitled to be supported by them.43 In questioning the motives of Fidela for donating the subject property, petitioners are contradicting even themselves. On the one hand, they assert that she would not have disposed of her property, since she would need it in her old age; on the other, they argue that it was not hers alone anyway. It should be clear that the law protects donors by providing that, without any reservation of sufficient means for themselves, the donation shall be reduced upon the petition of any person affected.44 To be sure, petitioners arguments all pertain to circumstances extraneous to the Deed of Donation itself. The law is clear that when its terms have been reduced to writing, an agreement must be presumed to contain all the terms agreed upon; and there can be, between the parties and their successors in interest, no evidence of such terms other than the contents of the written agreement.45 Petitioners did not question the consent of Fidela to the donation. Never was there any intimation that she had either been coerced or defrauded into entering into it. As all the essential elements of a donation -- consent, subject matter and cause46 -- have been satisfied, we see no reason to entertain any doubt about the Deed pertaining thereto. The question of why the land was registered several years after the donation is purely speculative. What is important is that there was a duly proven Deed of Donation, which formed the basis of Belens claim and led to the registration of the property in her name. Petitioners also question Fidelas filing of an unlawful detainer suit after the date of the Deed of Donation. Again, we remind petitioners that because this action involves property, they should rely on the strength of their own title, not on the alleged weakness of the claim of respondents. At any rate, the burden of proof of the claim of co-ownership rests on the former. Moreover, the final resolution of this case entails the review of factual findings of the courts below. It is a settled doctrine that in a civil case, final and conclusive are the factual findings of the trial court, if supported by clear and convincing evidence on record. Usually, the Supreme Court does not review those findings -- especially when affirmed by the Court of Appeals, as in this case.47 From the records of the present case, no cogent evidence appears that would impel us to apply the above doctrine differently. The courts below have not overlooked essential facts that, if considered, may produce a different outcome. The trial court correctly explained thus: "This Court from the outset had the opportunity to see and hear the tell-tale [signs] of truthfulness or perjury like the flush of face, or the tone of voice, or the dart of eyes, or the fearful pause [--] and finds that credibility is with the defendants [herein respondents]. Moreover, the preponderance of evidence is with defendants whose testimonial evidences are buttressed by their documentary evidences."48 Finally, we agree with the CA in eliminating the awards for damages and attorneys fees for respondents failure to show any factual, legal or equitable bases therefor.49 WHEREFORE, the Petition is hereby DENIED, and the assailed Decision AFFIRMED. Costs against petitioners. SO ORDERED. Republic of the Philippines SUPREME COURT Manila

FIRST DIVISION G.R. No. 150707 April 14, 2004

APOLONIA LL. OCAMPO Now Substituted by MARIANO O. QUIEN, AMELITA Q. TAN, MILOVAN O. QUIEN, LUISA OCAMPO-LLORIN, MELITA F. OCAMPO, FELIX OCAMPO JR., RAMON OCAMPO, MIGUEL OCAMPO, JUANA OCAMPO, ANDRES OCAMPO SR., VIOLETA OCAMPO, MERCEDITA OCAMPO, ANTONIA OCAMPO, ELISA OCAMPO, BEATRIZ OCAMPO, JUAN JOHNNY OCAMPO, JONAS OCAMPO, MARIA DOLORES OCAMPO, REBECCA OCAMPO, FIDELA OCAMPO, LUIS OCAMPO JR. and ERNESTO O. FORTUNO,petitioners, vs. FIDELA LL. OCAMPO, FELICIDAD LL. OCAMPO, BELEN OCAMPO-BARRITO, VICENTE BARRITO, NEMESIO LL. OCAMPO, IMELDA OCAMPO and JOSE OCAMPO, respondents. DECISION PANGANIBAN, J.: Basic is the rule that the party making an allegation in a civil case has the burden of proving it by a preponderance of evidence. In an action involving property, petitioners should rely on the strength of their own title and not on the alleged weakness of respondents claim. The Case Before this Court is a Petition for Review1 under Rule 45 of the Rules of Court, assailing the October 31, 2001 Decision2 of the Court of Appeals (CA) in CA-GR CV No. 56941. The decretal portion of the Decision reads as follows: "WHEREFORE, with the sole modification that the awards for damages and attorneys fees are hereby deleted, the judgment appealed from is, in all other respects, AFFIRMED. Without costs."3 The CA affirmed the Regional Trial Court (RTC) Decision,4 rendered on October 30, 1996, which decreed thus: "WHEREFORE, premises considered, the Court finds, holds and declares that defendant Belen Ocampo-Barrito, married to Vicente Barrito, are the true and lawful exclusive owners of the following properties, namely: (a) A parcel of residential/commercial land situated in the poblacion of Nabua, Camarines Sur, bounded on the NE by Carmen Ocampo and Alberto Espiritu, on the SE by the Burgos Street, on the SW by a street, and on the NW by Julian Ocampo and Carmen Ocampo, containing an area of 1,119 square meters, more or less, presently covered by TCT No. 13654 in the name of Belen Ocampo-Barrito, married to Vicente Barrito and previously covered by TCT No. RT-4389(983) in the name of Fidela Ocampo, declared under TD No. 18856 and assessed at P17,240.00. (b) A parcel of residential land situated at San Luis, Nabua, Camarines Sur, bounded on the North and East by a barrio road, on the South by a creek, and on the West by Lot 237, with an area of about 300 square meters, declared under TD No. 19639 with an assessed value of P6,240.00. (c) A parcel of land situated at Sto. Domingo, Nabua, Camarines Sur, bounded on the North by Lot 10323, on the East by Lot 9543, on the South by Lot 10325, and on the West by Lot 10322, with an area of about 4884 square meters, declared under TD No. 35122 and assessed at P6780.00 as described and referred to in paragraph 9, sub-paragraphs (a), (b) and (c) of the original complaint and it is hereby ordered that: 1. The complaint and supplemental complaint are dismissed for failure of the plaintiffs to prove their cause/causes of action by preponderance of evidence and on the added ground of prescription; 2. The plaintiffs are ordered to pay as their joint and several obligation, to defendants Fidela Ll. Ocampo, Belen Ocampo-Barrito and Vicente Barrito, the total sum of P15,000.00 for attorneys fees and other expenses of litigation and P50,000.00 for moral damages; 3. The plaintiffs jointly and severally pay the cost of this suit.

4. Upon the finality of this decision, the notice of lis pendens annotated at plaintiffs behest in the Certificates of Title covering the properties in question, of defendants be cancelled; and the plaintiffs, their agents and representatives as well as successors-in-interest are ordered to respect the right of ownership of said defendants thereto, and to vacate and restore the lawful possession of all portions of said properties to herein defendants, their agents, representatives and successors-in-interest."5 The Facts The CA adopted the RTCs summation of facts as follows: "Notwithstanding its somewhat deficient grammar and syntax, the following summation of the relevant and material antecedents of the case by the court a quo, is substantially correct -This is a civil suit for partition and damages filed by plaintiffs against the defendants. The complaint alleges that during the lifetime of the spouses Jose Ocampo and Juana Llander-Ocampo, they begot ten (10) children, namely: Fidela, Felix, Andres, Nemesio, Jose, Apolonia, Felicidad, Luisa, Rosario, and Luis. Of the aforementioned children, the following are already dead, namely: Felix, who is survived by his widow, Melita F. Ocampo and children Felix, Jr., Ramon and Miguel; Andres, who is survived by Juana Ocampo and children Jose, Andres, Imelda, Violeta and Mercedita; Jose, who is survived by his children Antonia, Elias and Juan (Johnny); Rosario, who is survived by Ernesto O. Fortuno; Luis, who is survived by his children Rose, Ricardo, Jonas, Maria Dolores, Rebecca, Fidela and Luis, Jr.; and Luisa, who is survived by Carlos Llorin and children Mecita, Manuel, Carlos, Jr., Carmelita and Marilou L. Arellano. The complaint further alleges that during the lifetime of the spouses Jose Ocampo and Luisa Llander-Ocampo, they acquired several parcels of land and, upon their death, left the following properties, namely: (a) A parcel of residential/ commercial land situated in the poblacion of Nabua, Camarines Sur, bounded on the NE by Carmen Ocampo and Alberto Espiritu, on the SE by the Burgos Street, on the SW by a Street, and on the NW by Julian Ocampo and Carmen Ocampo, containing an area of 1,119 square meters, more or less, presently covered by TCT No. RT-4389(983) in the name of Fidela Ocampo, declared under TD No. 18856 and assessed at P17,240.00; (b) A parcel of residential land situated at San Luis, Nabua, Camarines Sur, bounded on the North and East by a barrio road, on the South by a creek, and on the West by Lot 237, with an area of about 300 square meters, declared under TD No. 19639 with an assessed value ofP6,240.00; and (c) A parcel of land situated at Sto. Domingo, Nabua, Camarines Sur, bounded on the North by Lot 10323, on the East by Lot 9543, on the South by Lot 10325, and on the West by Lot 10322, with an area of about 4,884 square meters, declared under TD No. 35122 and assessed at P6,780.00. that all the above named parcels of land are actually owned in common by the children of the late spouses Jose Ocampo and Juana Llander Ocampo although the land denominated as parcel (a) of the complaint is ostensibly registered in the name of Fidela Ocampo alone but acknowledged by her as a property owned in common by all of them, brothers and sisters; that plaintiffs desire to partition said properties but defendants Fidela Ocampo and Felicidad unlawfully and unreasonably refuse to do so and moved by a common purpose, both of them mortgaged to the PNB the land denominated as parcel (a) of the complaint to secure the payment of a P110,000.00 loan, the proceeds of which were x x x exclusively to the benefit of said defendants only; that the same defendants Fidela Ocampo and Felicidad Ocampo have been receiving the fruits of the properties to the exclusion of their co-heirs amounting to not less than P2,000.00 a year; and, that because of their relationship, they undertook earnest efforts to amicably settle this controversy but because of defendants Fidela Ocampo and Felicidad Ocampo*s+ utterly unreasonable and unjustified actuations, the same failed. xxx xxx xxx

In their complaint, plaintiffs pray that judgment be rendered ordering the partition of the properties described in paragraph 9 of the complaint; ordering defendants Fidela Ocampo and Felicidad Ocampo, to release or otherwise cancel any and all encumbrances on TCT No. RT-4389(983) which they had caused to be annotated thereon, particularly, the mortgage in favor of the PNB; requiring Fidela Ocampo and Felicidad Ocampo to refrain from further encumbering said properties or otherwise subjecting the same to any lien and for that purpose, a writ of preliminary injunction to be issued against them to enjoin the commission of such acts; ordering defendants Fidela Ocampo and Felicidad Ocampo to submit an accounting of the fruits and other produce they had received from said properties; further ordering Fidela Ocampo and Felicidad Ocampo to indemnify plaintiffs the sum of not less than P15,000.00 by way of attorneys fees and related

expenses of litigation, plus the costs of the suit; and, further granting plaintiffs such other remedies as may be just and equitable in the premises. xxx xxx xxx

On 17 December 1987, counsel for plaintiffs filed a Motion to Admit Supplemental Complaint dated 2 December 1987 which was granted by the Court as there was no opposition to it. The Supplemental Complaint alleges that defendants Helen Ocampo-Barrito and Vicente Barrito are spouses; that on 30 September 1987, TCT No. RT-4389(983) in the name of defendant Fidela Ocampo and covering the lot described as parcel (a) in paragraph 9 of the original complaint was cancelled and, in lieu thereof, TCT No. 1364 was issued to defendant Belen Ocampo-Barrito, married to defendant Vicente Barrito, on the strength of an allege[d] Deed of Donation Inter Vivos ostensibly executed by defendant Fidela Ll. Ocampo in their favor on 13 January 1984; that at the time the Deed of Donation Inter Vivos was presented for registration and when TCT No. 1364, Registry of Camarines Sur, was issued to defendant Belen Ocampo-Barrito, both the donor and donees were notoriously aware that said parcel of land was among the lots subject of this Civil Case No. IR-1867 of which the donor Fidela Ll. Ocampo and the mother of the donees, Felicidad Ll. Ocampo, are defendants, that said properties were owned by the Ocampo brothers and sisters, and that the donor Fidela Ll. Ocampo was not the exclusive owner thereof; that the transfer of defendants Fidela Ll. Ocampo and Belen Ocampo-Barrito of the ownership over said property now subject of this partition is tainted with fraud, actual and deliberate, to deprive plaintiffs of their legitimate share therein, knowing as they do that the same are a co-ownership of the original parties plaintiffs and defendants herein; that defendants Fidela Ll. Ocampo and the spouses Belen OcampoBarrito and Vicente Barrito have not acted in good faith, deliberately causing damage and injury to the plaintiffs by their avaricious desire to obtain sole ownership of said properties through dubious and illegal means that the defendant spouses Belen Ocampo-Barrito and Vicente Barrito, through dubious means and undue influence over Fidela Ll. Ocampo, a very old spinster whom they have lately taken into their custody, succeeded in having the latter execute this supposed deed of donation inter vivos; that defendants have not acted with justice, honesty and good faith, causing injury to plaintiffs rights in a manner inconsistent with morals and good customs, hence, are liable for moral damages of not less than P50,000.00; and that to set an example for the public good and to deter others similarly minded from doing so, defendants should be assessed exemplary damages of not less than P50,000.00. Plaintiffs pray that judgment be rendered (a) declaring the Deed of Donation Inter Vivos allegedly executed by Fidela Ll. Ocampo in favor of Belen Ocampo-Barrito and Vicente Barrito be declare[d] null and void, (b) ordering defendants Belen Ocampo-Barrito and Vicente Barrito to reconvey so much of the property subject thereof as pertain to the plaintiffs, (c) directing defendants, jointly and severally, to indemnify plaintiffs such amounts as this Honorable Court may consider fair and reasonable by way of actual, moral and exemplary damages, inclusive of attorneys fees and related expenses of litigation, and (d) granting plaintiffs such other remedies as may be just and equitable in the premises. xxx xxx xxx

As Special Defenses, defendant Belen Ocampo-Barrito allege that the original defendant Fidela Ll. Ocampo, her predecessor-in-interest, since 1949 has been the absolute owner in fee simple of the property by virtue of the issuance of the certificate of title in her name; that her predecessor-in-interest held the same certificate of title to the same parcel of land (TCT No. RT-4389(983) free of all encumbrances and adverse claims and was in notorious, public, and actual possession of the property in concept of absolute owner from 1949 until 13 January 1984, when said predecessor-ininterest validly conveyed the property by donation inter vivos which she accepted in the same public instrument; that TCT No. 1364 was issued to defendant Belen Ocampo-Barrito on the strength of the donation inter vivos executed in her favor by her predecessor-in-interest and has since 30 September 1987, been the absolute owner thereof; that since 1949 none of the plaintiffs ever questioned the absolute ownership and title of defendant Belen Ocampo-Barritos predecessor-in-interest over the property making the decree of registration incontrovertible; that it is fatal for plaintiffs cause of action to allege that defendants exerted undue influence over Fidela Ll. Ocampo for the latter to execute the deed of donation while clearly admitting in both the original and supplemental complaints that defendants are residents of Mindoro Occidental a far away place from Nabua, Camarines Sur, the place where the same predecessor-in-interest admittedly resides; and, that Belen Ocampo-Barritos title cannot be collaterally attacked in these supposed partition proceedings. xxx xxx xxx

Defendants pray that the case be dismissed for utter lack of merit and plaintiffs be ordered to pay defendants the sum of P200,000.00 for moral damages, P50,000.00 for exemplary damages,P100,000.00 as compensatory damages, to pay attorneys fees in the amount of P15,000.00, and for other just and equitable remedies. xxx xxx xxx

As the Special and/or Affirmative Defenses, defendant Fidela Ll. Ocampo alleges that she is the true and absolute owner of the real properties described in paragraph 9 of the original complaint having acquired the same by lucrative title and has, since becoming owner thereof, been in actual possession thereof excepting the portion of the lot described in paragraph 9 (a) of the complaint and covered by Torrens title which was and is still being unlawfully occupied by plaintiffs Quiens; that the properties have been declared for assessment in defendants name as exclusive owner thereof and since her acquisition of said properties, has paid the taxes thereon; that defendant had exercised continuously all the legal incidents of ownership on said lands to the exclusion of and adversely to the public, plaintiffs herein included; that the [D]eed of Donation Inter Vivos and the subsequent transfer of the property mentioned in paragraph 9 of the complaint to other defendants Belen Ocamp[o]-Barrito is valid conveyance which binds the said property; and, that assuming that plaintiffs have a cause of action, the same is barred by laches. xxx xxx xxx

Defendant Fidela Ll. Ocampo prays that judgment be rendered dismissing the complaint and ordering plaintiffs to indemnify such sum as will be proved as well as [s]uch amount as this Court may assess by way of moral and exemplary damages and costs, including necessary expenses for litigation, and for just and equitable reliefs."6 Ruling of the Court of Appeals According to the appellate court, other than the Acknowledgment of Co-ownership7 executed by Respondent Fidela Ocampo, no documentary evidence was offered to establish petitioners claim of co-ownership. The CA held that this piece of documentary evidence could not prevail over the array of testimonial and documentary evidence that had been adduced by respondents to prove their defenses. Communal ownership of the property in question was supposedly not proven, either, by the ancient photograph showing Spouses Chino Jose and Juana Llander Ocampo with their ten children in front of the disputed property; or by another picture showing the name "Oniang Ocampo -- 1-15-61" engraved on the said house or building. The court a quo rejected the argument of petitioners that the title to the subject property had been placed in the name of Fidela, because their parents followed the Chinese custom of placing properties in the name of the eldest son or daughter who was single. Petitioners explained that upon the death of the eldest sibling, the properties would revert to the younger brothers and sisters. According to the CA, however, not a shred of evidence was adduced to prove that such a Chinese custom existed or was observed in that place. The CA also dismissed petitioners contention that common ownership was indicated by the fact that some of the children of Spouses Ocampo stayed and lived on the subject property. It ruled that fraternal affection could have been the motive that impelled respondents to allow their relatives to use it. In contrast to the arguments of petitioners, the CA said that respondents were able to give clear proof of their ownership of the property: the Transfer Certificate of Title and the corresponding Tax Declaration in the name of Fidela, and later of Belen Ocampo-Barrito. Nevertheless, the CA eliminated the awards for damages and attorneys fees, because the trial court had failed to cite the factual, the legal and the equitable bases therefor. Hence, this Petition.8 The Issues Petitioners raise the following issues for our consideration: "1. Where the evidence presented, oral and documentary, on the question of co-ownership, is overwhelming as it is unopposed, unrebutted and unimpeached, has co-ownership been proved? "2. Where co-ownership is confirmed by long, public possession by co-owners, did the courts commit grave abuse of discretion in holding that there is no co-ownership? "3. Where the evidence of respondents is weak, puerile and inconsistent, did the courts commit a grave misapprehension of facts when they gave credence to it? "4. Where a deed of donation intervivos entered in bad faith deprives the heirs of their hereditary shares, is said deed valid?

"5. Where a declaration against interest has not been opposed, assailed, rebutted or impeached, did the courts commit grave abuse of discretion in holding there is no such declaration?"9 At bottom, the question to be resolved in this case is who owns the disputed property? The Court's Ruling The Petition has no merit. Main Issue: Ownership of the Subject Property At the outset, we clarify that although there were three (3) properties originally involved in the litigation brought before the RTC, petitioners appeal dealt only with the first one, referred to in the Statement of Facts above -- a parcel of residential/commercial land situated in the poblacion of Nabua, Camarines Sur. In their CA appeal, petitioners declared that "the focus of this case is on the first [property] which is located at downtown Poblacion of Nabua and therefore a valuable piece of property, 1,119 square meters in all."10 Because petitioners had not questioned the RTC Decision with regard to the other properties, then the adjudication of these matters became final. Thus, only one property is left for resolution in the present proceedings.11 Since the original Complaint was an action for partition, this Court cannot order a division of the property, unless it first makes a determination as to the existence of a co-ownership.12 The settlement of the issue of ownership is the first stage in an action for partition.13 This action will not lie if the claimant has no rightful interest in the subject property. Parties filing the action are in fact required by the Rules of Court14 to set forth in their complaint the nature and the extent of their title to the property. It would be premature to effect a partition thereof until and unless the question of ownership is first definitely resolved.15 Basic is the rule that the party making an allegation in a civil case has the burden of proving it by a preponderance of evidence.16 Petitioners chief evidence of co-ownership of the property in question is simply the Acknowledgement of Co-ownership executed by Fidela. As mentioned earlier, both the trial and the appellate courts were correct in finding that this piece of documentary evidence could not prevail over the array of testimonial and documentary evidence that were adduced by respondents, as will be expounded below. Petitioners failed to trace the successive transfers of ownership of the questioned property that eventually led to them. Allegedly, it was originally owned by their parents -- Spouses Ocampo -- whose deaths passed it on to the children. Petitioners, however, presented absolutely no proof of ownership of their predecessors-in-interest. In insisting that it was so transferred and thus co-owned, the former rely on the Acknowledgement of Co-ownership executed by Fidela, their eldest sibling. On the other hand, Belen clearly traced the basis of her alleged sole ownership of the property and presented preponderant proof of her claim. First, she presented a Deed of Absolute Sale of Residential Land,17 referring to the subject property, executed between Adolfo Ocampo as seller and Felix Ocampo as buyer. The document dated July 6, 1948, was signed in the presence of two witnesses and acknowledged before Juan B. Ballecer, a notary public. The theory of petitioners is completely demolished by this document, which they never contested. According to them, the land in question was the conjugal property of their parents; and that upon the latters deaths, the former inherited it in common. If indeed the land was the conjugal property of Spouses Ocampo, then petitioners should have presented evidence to prove such ownership by their alleged predecessors-ininterest. Since the former failed to do so, how then can they prove the transfer to them of ownership that has not been established in the first place? It is axiomatic that no one can transfer to another a right greater than that which one has;18 thus, the legal truism that the spring cannot rise higher than its source.19 Likewise, in this Deed of Absolute Sale, Adolfo Ocampo declared his "exclusive ownership" of the property, "having been acquired by purchase[;] and [having] been in [his] continuous, public, peaceful, adverse and material possession for more than 50 years together with [his] predecessors in rights and interest, in [the] concept of owner without any claim of other persons."20 Second, Respondent Belen proved that on February 10, 1953, this property had been sold to Fidela by Felix Ocampo for a valuable consideration; and that Fidela had entered the property, actually occupied it, and exercised all powers of dominion over it to the exclusion of petitioners. As proofs of ownership of the property by Fidela, Belen presented Transfer Certificate of Title No. RT-4389 (983),21 which named the former as owner in fee simple; and a Declaration of Real Property,22 evidencing payment of real property taxes, also by Fidela as owner.

To prove further that Fidela had exercised dominion over the property, Belen also presented a Real Estate Mortgage23 executed by the former as absolute owner. Fidela had executed it in favor of her sister Apolonia Ocampo, one of the original petitioners in this case, who is now represented by her heirs. Belen correctly argues that in agreeing to be a mortgagee, Apolonia admitted and recognized Fidela as the true owner of the land in question. The Civil Code provides that an essential requisite of a contract of mortgage is that the mortgagor be the absolute owner of the thing mortgaged.24 Co-ownership cannot be presumed even if only a portion of the property was mortgaged to Apolonia, because a co-owner may dispose only of ones interest in the ideal or abstract part of the undivided thing co-owned with others.25 The effect of a mortgage by a coowner shall be limited to the portion that may be allotted to that person upon the termination of the co-ownership.26 In this case, Fidela mortgaged adefinite portion of the property and thus negated any acknowledgement of co-ownership. Third, Belen then presented a Deed of Donation Inter Vivos27 executed on January 13, 1984, between herself as donee and Fidela as donor. This act shows the immediate source of the formers claim of sole ownership of the property. A donation as a mode of acquiring ownership results in an effective transfer of title to the property from the donor to the donee. 28 Petitioners stubbornly rely on the Acknowledgement of Co-ownership allegedly executed by Fidela in favor of her siblings. What they overlook is the fact that at the time of the execution of the Acknowledgement -- assuming that its authenticity and due execution were proven -- the property had already been donated to Belen. The Deed of Donation, which is the prior document, is clearly inconsistent with the document relied upon by petitioners. We agree with the RTCs ratiocination: "On the claim of plaintiffs that defendant Fidela Ll. Ocampo herself made a written acknowledgement for her co-ownership over all the properties disputed with plaintiffs in this case, the same cannot be considered as a declaration against Fidelas interest since the alleged acknowledgement was written and executed on 24 December 1985 when she was no longer the owner of the property as the year previous, on 13 January 1984, she had already donated all her properties to defendant Belen Ocampo-Barrito, so that, in effect, she had no more properties with which she can have an interest to declare against."29 Petitioners argue that the Acknowledgement of Co-ownership may be considered as a declaration against interest. A statement may be admissible as such a declaration if it complies with the following requisites: 1) the declarant is dead or unable to testify; 2) it relates to a fact against the interest of the declarant; 3) at the time of the declaration, the declarant was aware that it was contrary to his or her interest; and 4) the declarant had no motive to falsify and believed the declaration to be true.30 As correctly found by the trial court, however, the Acknowledgement of Co-ownership could not be a fact against the interest of the declarant, since her right over the property had already been extinguished by the prior act of donation. Thus, at the time of the declaration, Fidela could not have acknowledged co-ownership, as she had no more property against which she had an interest to declare. Finally, Belen presented Transfer Certificate of Title No. 1365431 as proof of her ownership of the property. To be sure, the best proof of ownership of the land is the Certificate of Title (TCT). Hence, more than a bare allegation is required to defeat the face value of respondents TCT, which enjoys a legal presumption of regularity of issuance.32 It is quite surprising that despite the process of transfers and titling of the subject property -- commencing in 1948 and eventually leading to the sole ownership of Belen in 198433 -- it was only after 1984 that petitioners started asserting their claim of co-ownership thereof. We are not unmindful of our ruling that the mere issuance of a certificate of title does not foreclose the possibility that the real property may be under co-ownership with persons not named therein.34 But given the circumstances of this case, the claim of co-ownership by petitioners has no leg to stand on. Again, we stress, Belen clearly traced the source of her sole ownership of the property in question and thereby foreclosed the unproven and unsubstantiated allegation of co-ownership thereof. In addition to the TCT presented, Belen offered as evidence the Tax Declaration35 indicating that she, as owner, had been paying real estate taxes on the property, all to the exclusion of petitioners. On the other hand, petitioners could not show any title, tax receipt or document to prove their ownership. Having filed an action involving property, they should have relied on the strength of their own title and not on the alleged weakness of respondents claim.36 Petitioners assert that their claim of co-ownership of the property was sufficiently proved by their witnesses -- Luisa Ocampo-Llorin and Melita Ocampo. We disagree. Their testimonies cannot prevail over the array of documents presented by Belen. A claim of ownership cannot be based simply on the testimonies of witnesses; much less on those of interested parties, self-serving as they are. As to the photographs presented by petitioners to bolster their claim of co-ownership, we affirm the CAs disposition showing the flimsiness of their claim as follows:

"The other piece of documentary evidence presented by appellants really proved nothing. The ancient photograph showing the spouses Chino Jose and Juana Llander Ocampo together with their ten children, simply proved that there was such a picture taking of the spouses with their children. But the photograph does not prove communal ownership by appellants over the disputed parcels of land; neither does it prove that the said properties were indeed owned by the spouses Chino Jose and Juana Ocampo, and then later on transferred to and commonly owned by their children. By the same token, the picture exhibited by appellant showing the name Oniang Ocampo -- 1-15-61 (or Apolonia Ocampo, one of the children of the spouses Chino Jose and Juana) engraved in the house or building, does not prove communal ownership of the properties in question. At best, it is susceptible of various meanings, like: that of Oniang Ocampo was born on 1-15-61, or that she got married on that date, or that she was celebrating a special event on the date mentioned, or that she even died on the date mentioned. And even assuming ex gratia argumenti, that the said engraving proved ownership over the disputed building, some such fact can only work to the prejudice of herein appellants. Why? Because it would mean that only Oniang (or Apolonia) was the owner of the building and that the building is not, therefore, a communal property of the children of the late spouses Chino Jose and Juana. Adverting to this piece of evidence, the Trial Court postulated -The engravings on the house ONIANG OCAMPO BLDG. -- 1-15-61 cannot serve as evidence that the property is of common ownership. At most, this can only establish the fact that said building was constructed for a certain Oniang on 15 January 1961. If, indeed, the property is of common ownership, there could not have been any difficulty to engrave thereon HEIRS OF JOSE OCAMPO and JUANA LLANDER-OCAMPO -- 1-15-61 instead of ONIANG OCAMPO BLDG. -- 1-1561."37 Neither can we accept petitioners contention that co-ownership is shown by the fact that some of the children of Spouses Ocampo stayed, lived, and even put up businesses on the property. The appellate court correctly found that since the litigants in this case were blood relatives, fraternal affection could have been a good motive that impelled either Belen or Fidela to allow petitioners to use the property. Without any proof, however, co-ownership among the parties cannot be presumed. Neither are we persuaded by the contention that Spouses Ocampo placed the subject property in the name of only one person in accordance with a Chinese custom. As mentioned earlier, that custom consisted of placing properties of parents in the name of the eldest unmarried son or daughter, with the implicit understanding that ownership thereof would later revert to the siblings. In contrast to the failure of petitioners to prove that such custom existed and was practiced in that place,38 Belen presented evidence that clearly negated any claim of ownership by the formers predecessors-in-interest. Having shown that the property in question was originally owned by one Adolfo Ocampo -- not by Spouses Ocampo, from whom petitioners derive their right -- the claim of custom becomes immaterial. The fact that Fidela was not presented in court will not necessarily favor petitioners and prove that the property in question is indeed coowned. If they felt that her testimony would prove their cause, then they could have easily called her as an adverse or a hostile witness.39 But since respondents were confident in the documents they presented in court, they did not see any need to call her as a witness. Petitioners also question the motives of Fidela for donating her properties, when she is still alive and needs money in her old age. They clearly overlook the nature of a donation. Donation is an act of liberality whereby a person gratuitously disposes of a thing or a right in favor of another who accepts it.40 Once perfected, a donation is final; its revocation or rescission cannot be effected, absent any legal ground therefor.41 A donation may in fact comprehend the entire property of the donor.42 At any rate, the law provides that donors should reserve, in full ownership or in usufruct, sufficient means for their own support and that of all their relatives who, at the time of the acceptance of the donation, are by law entitled to be supported by them.43 In questioning the motives of Fidela for donating the subject property, petitioners are contradicting even themselves. On the one hand, they assert that she would not have disposed of her property, since she would need it in her old age; on the other, they argue that it was not hers alone anyway. It should be clear that the law protects donors by providing that, without any reservation of sufficient means for themselves, the donation shall be reduced upon the petition of any person affected.44 To be sure, petitioners arguments all pertain to circumstances extraneous to the Deed of Donation itself. The law is clear that when its terms have been reduced to writing, an agreement must be presumed to contain all the terms agreed upon; and there can be, between the parties and their successors in interest, no evidence of such terms other than the contents of the written agreement.45 Petitioners did not question the consent of Fidela to the donation. Never was there any intimation that she had either been coerced or defrauded into entering into it. As all the essential elements of a donation -- consent, subject matter and cause46 -- have been satisfied, we see no reason to entertain any doubt about the Deed pertaining thereto. The question of why the land was registered several years after the donation is purely speculative. What is important is that there was a duly proven Deed of Donation, which formed the basis of Belens claim and led to the registration of the property in her name.

Petitioners also question Fidelas filing of an unlawful detainer suit after the date of the Deed of Donation. Again, we remind petitioners that because this action involves property, they should rely on the strength of their own title, not on the alleged weakness of the claim of respondents. At any rate, the burden of proof of the claim of co-ownership rests on the former. Moreover, the final resolution of this case entails the review of factual findings of the courts below. It is a settled doctrine that in a civil case, final and conclusive are the factual findings of the trial court, if supported by clear and convincing evidence on record. Usually, the Supreme Court does not review those findings -- especially when affirmed by the Court of Appeals, as in this case.47 From the records of the present case, no cogent evidence appears that would impel us to apply the above doctrine differently. The courts below have not overlooked essential facts that, if considered, may produce a different outcome. The trial court correctly explained thus: "This Court from the outset had the opportunity to see and hear the tell-tale [signs] of truthfulness or perjury like the flush of face, or the tone of voice, or the dart of eyes, or the fearful pause [--] and finds that credibility is with the defendants [herein respondents]. Moreover, the preponderance of evidence is with defendants whose testimonial evidences are buttressed by their documentary evidences."48 Finally, we agree with the CA in eliminating the awards for damages and attorneys fees for respondents failure to show any factual, legal or equitable bases therefor.49 WHEREFORE, the Petition is hereby DENIED, and the assailed Decision AFFIRMED. Costs against petitioners. SO ORDERED. THIRD DIVISION

[G.R. No. 98328. October 9, 1997]

JUAN C. CARVAJAL, petitioner, vs. COURT OF APPEALS and SOLID HOMES, INC., respondents. DECISION PANGANIBAN, J.: Is there denial of due process if an applicant for land registration is unable to testify? May a land registration court, after it is convinced that the property subject of an application for registration under the torrens system is already covered by an existing certificate, dismiss such application and thus ignore petitioners insistence on submitting further evidence of his alleged title? What constitutes sufficient evidence to show identity of the land applied for with the land already titled in favor of private respondent?

The Case

These are the main questions raised in this petition for review assailing the November 29, 1990 Decision[1] of the Court of Appeals[2] in CA-G.R. SP No. 18318, the dispositive portion of which reads: WHEREFORE, in view of the foregoing, let this petition be, as it is hereby DISMISSED.[3] This petition also impugns the April 25, 1991 Court of Appeals Resolution[4] which denied reconsideration.

The Facts

The facts found by public respondent are as follows:[5]

Petitioner is the applicant in a land registration case filed with Branch 71, Regional Trial Court of the Fourth Judicial Region stationed in Antipolo, Rizal. Sought to be brought by petitioner under the operation of the Land Registration Act (Act No. 496) is a 96,470 square meter lot denominated as Lots 6846-A, 6846-B, 6846-C and 6846-D. Copies of the application were ordered by respondent Court to be furnished (to) the National Land Titles and Deeds Registration Administration (NLTDRA) which on March 18, 1987 submitted a report recommending that applicant be order[ed] to amend his petition by including the names and complete postal addresses of the adjoining owners and correcting the discrepancy regarding the boundary lot number along line 2-3 of Lot 6846-D on plan Csd-04-005516-D. On order of respondent Court [trial court], the petition was accordingly amended. After the NLTDRA was notified that the case is [sic] initially set for hearing on December 7, 1987, the Acting Chief, Docket Division of the NLRDRA [sic] submitted another report recommending that petitioner be ordered to refer to the Bureau of Lands for corrections of the discrepancy existing in the directional bearing and area of Lot 6846-D, Csd-04-005516-D. The technical descriptions as corrected by the Bureau of Lands was [sic] submitted and the application was initially set for hearing on April 26, 1988. The Notice of Initial Hearing stating that the application was set forbe [sic] heard on April 26, 1988 was thereafter issued by the NLTDRA. On June 1, 1988, an order of general default was issued by respondent Court. Exempted from the order was one Annie Jimenez who filed an opposition to the application. On June 22, 1988, private respondent Solid Homes, Inc. filed its opposition stating that a land registered in its name under the Torrens System and covered by then TCT No. N-7873 is almost identical to the property subject of the application by petitioner. The opposition was not admitted considering that no motion to set aside the order of general default was filed by private respondent. On June 28, 1988, private respondent filed a motion to lift the order of general default and to admit its opposition on the ground that its right would be adversely affected by the application. Acting on the motion and in order to avoid duplicity, the NLTDRA was directed to make the plotting of the relative position of the property covered by LRC Psd-245998 and embraced in TCT No. N-7873 and to submit its plotting to the Court for its guidance. In the same order dated July 1, 1988, respondent Court in the interest of justice set aside the order of general default in so far as private respondent was concerned and admitted private respondents opposition. On January 10, 1989, petitioner filed a motion praying that the opposition of private respondent be dismissed for the reason that the order issued by respondent court directing the NLRTDA [sic] to make a plotting of the land in question on the basis of the title submitted by the Registry of Deeds of Marikina Branch Manila released the private respondent from the duty and obligation of presenting evidence to prove that the land applied for is private and that there is apparent lack of interest on the part of private respondent to pursue its claim on account of its non-appearance despite the lapse of more than six months or to introduce evidence that will show that the land in question is covered by the alleged torrens certificate of title. During the hearings conducted on September 13, 1988, September 27, 1988, October 4, 1988, October 11, 1988, October 18, 1988, November 22, 1988, December 6, 1988, petitioner presented his evidence on the question as to whether or not he had a registrable right over the land in question. Pursuant to the court order dated July 1, 1988 directing the NLTDRA to make the plotting of the relative position of the property covered by LRC Psd-245998 and embraced in TCT No. N-7873, the Land Registration Authority submitted a report dated December 22, 1986 [should be 1988] recommending that, after due hearing, the application for registration of petitioner be dismissed. The application was thus dismissed by respondent court in an order dated January 2, 1989. Considering, however, that the recommendation is [sic] for dismissal after due hearing, respondent judge issued an order dated January 10, 1989 setting for hearing on January 24, 1989 the Report submitted by the Land Registration Authority. The hearing proceeded on February 8, 1989 with Engr. Silverio G. Perez, Chief, Department on Registration, Land Registration Authority being presented in connection with his Report recommending the dismissal of the application after due hearing. On February 28, 1989, the petitioner's application for registration was dismissed. On March 13, 1989, petitioner filed his motion to reconsider the February 28, 1989 dismissal of the application for registration to which private respondent filed an opposition dated March 20, 1989. The motion for reconsideration was denied in an order dated March 4, 1989. On May 2, 1989 petitioner filed a second motion to reconsider the dismissal of his petition. On May 8, 1989, respondent judge issued an order requiring the parties as well as the engineers from the Land Registration Commission and the DENR to appear before respondent Court on June 5, 1989. The engineer from the Land Registration Commission was likewise directed to inform the court whether the property applied for by petitioner is indeed inside the titled property of private respondent. After the Land Registration Authority submitted a report showing that there was indeed an overlapping of the four (4) parcels of land applied for by petitioner and the properties of Solid Homes under TCT 7873 and considering that the properties applied for are [sic] within the titled property and could not be the subject of an application for registration, the second motion to reconsider the dismissal of the application for registration was denied in an order dated July 5, 1989. As earlier stated, the Court of Appeals affirmed the dismissal of the application for registration, and denied the subsequent motion for reconsideration. Hence, this recourse to this Court via Rule 45 of the Rules of Court.

The Issues

Petitioner submits the following issues:[6] 1. Whether or not an actual ground verification survey is required to establish the identity of the two parcels of land or whether TCT No. 7873 under Plan FP-1540 of Solid Homes Inc., situated in Barangay Mayamot, Antipolo, Rizal is identical or similar to Lots 6846-A to 6846-D inclusive Cad. 585, Lungsod Silangan, Cadastre, situated in Mambogan, Antipolo, Rizal applied for under LRC Case No. 414 (-A), LRC Record No. N-60084; 2. Whether or not the petitioner was given (the) chance and the opportunity to be heard or allowed to fully introduce his evidence in the (proceeding) for Land Registration and (to) rest (his) case; 3. Whether the decision of the Honorable Court of Appeals is reversible. Petitioner alleges that the table survey made by the Land Registration Authority and the geodetic engineer of the Land Management Bureau cannot serve as basis for identifying his land. On the other hand, petitioner was able to establish the identity of the land he applied for by actual ground survey which was approved by the Director of Lands and reprocessed by the Land Registration Authority. He claims that if said land is covered by private respondents title, the Director of Lands and/or Regional Director will no (t) approve the survey. Petitioner also argues that the land in question is situated in Mambogan, Antipolo, Rizal while that of private respondent is in Mayamot, Antipolo, Rizal. Survey Plan FP-1540, which served as basis of private respondents certificate of title, cannot be found; hence, according to petitioner, the table survey was anomalous. Petitioner adds that the matter entirely wanting in this case (is) the identity or similarity of the realties.[7] Petitioner concludes that the trial court should have ordered actual ocular inspection and ground verification survey of the properties involved. Petitioner further maintains that he was denied due process when he, as an applicant in a land registration case, was not able to take the witness stand. According to petitioner, even his counsel hardly participated in the proceeding except to propound clarificatory questions during the examination of Engineer Silverio Perez of the Land Registration Authority.[8] Public respondent justified its dismissal of the appeal in this wise:[9] Land already decreed and registered in an ordinary registration proceeding cannot again be subject of adjudication or settlement in a subsequent conducted proceeding (Land Titles and Deeds by Noblejas, 1968 Revised Edition, page 96). The Report submitted by the Land Registration Authority (Annex B) and the Survey Division of the DENR (Annex RR) both indicate an overlapping of the lot applied for by petitioner and the lot covered by TCT N-7873 owned by private respondent Solid Homes, Inc. Even if petitioner were allowed to continue with the presentation of his evidence, the end result would still be the dismissal of his application for registration. Respondent Judge was therefore justified in cutting short the proceeding as the time to be spent in hearing petitioners application could be used disposing the other cases pending with respondent court. Anent the allegation that private respondent Solid Homes did not actively participate in the trials conducted to hear his evidence, suffice it to state that it is counsels prerogative to determine how he intends to pursue his case.

The Court's Ruling

The petition has no merit.

First Issue: Identity of the Property Applied For

We are not persuaded that the land petitioner applied for was not identical to private respondents land which was already covered by a torrens certificate of title. The two reports prepared by the Land Registration Authority and the DENR Survey Division clearly showed that there was an overlapping between the two properties. Because the futility of petitioners application was apparent, the trial court deemed it unnecessary to hear further evidence. We agree. At the outset, we stress that there was nothing irregular in the order given by the trial court to the Land Registration Authority and the Survey Division of the DENR to submit reports on the location of the land covered by petitioners application and private respondents certificate of title. The authority of the land registration court to require the filing of additional papers to aid it in its determination of the propriety of the application was based on Section 21 of PD 1529:[10]

SEC. 21. Requirement of additional facts and papers; ocular inspection. -- The court may require facts to be stated in the application in addition to those prescribed by this Decree not inconsistent therewith and may require the filing of any additional papers. It may also conduct an ocular inspection, if necessary. From the above provision, it is also clear that ocular inspection of the property applied for was only discretionary, not mandatory. Likewise, the land registration court was not obliged to order the survey of the contested lot, especially when another government agency had already submitted a report finding that the contested lot was identical with that described in private respondent s certificate of title and recommending the dismissal of the application for registration. Further, the order of the land registration court for the LRA and DENR to submit reports was in accordance with the purposes of the Land Registration Law:[11] The purposes of the land registration law, in general, are: to ascertain once and for all the absolute title over a given landed property; to make, so far as it is possible, a certificate of title issued by the court to the owner of the land absolute proof of such title; to quiet title to the land and to put a stop forever to any question of legality to a title; and to decree that land title to be final, irrevocable and, undisputable. (citing Benen vs. Tuason, L-26127, June 28, 1974, 57 SCRA 531.) It is true that a court of first instance acting as a land registration court has limited and special jurisdiction. It can not be denied, however, that when the law confers jurisdiction upon a court, the latter is deemed to have all the necessary powers to exercise such jurisdiction to make it effective. (citing Marcelino vs. Antonio, 70 Phil. 388, 391.) The purpose of the applicant is to prove that he has an absolute or simple title over the property sought to be registered, otherwise his application will be denied. An absolute oppositor claims a dominical right totally adverse to that of the applicant. If successful, registration will be decreed in favor of the oppositor. As to whether or not private respondents have absolute or fee simple title over the property sought to be registered necessarily requires a resolution of the question as to whether or not the oppositors had a dominical right totally adverse to that of the applicants. x x x Based on the reports submitted, the land registration court correctly dismissed the application for original land registration. An application for registration of an already titled land constitutes a collateral attack on the existing title. It behooves a land registration court to determine the veracity of any and all adverse claims, bearing in mind Section 46 of Act No. 496 which provides that (n)o title to registered land in derogation to that of the registered owner shall be acquired by prescription or adverse possession. The trial courts order to the LRA and DENR was a mere cautionary measure in cognizance of the well-settled rule that a torrens title cannot be collaterally attacked. In other words, the title may be challenged only in a proceeding for that purpose, not in an application for registration of a land already registered in the name of another person. After one year from its registration, the title is incontrovertible and is no longer open to review. The remedy of the landowner, whose property has been wrongfully or erroneously registered in anothers name, is to institute an ord inary action for reconveyance or -- if the property has passed into the hands of an innocent purchaser for value -- for damages.[12] In view of the nature of a torrens title, a land registration court has the duty to determine whether the issuance of a new certificate alters a valid and existing certificate of title. Contrary to petitioners contention, the approval by the assistant chief of the Bureau of Lands Survey Division of the survey conducted on the land applied for by petitioner did not prove that the said land was not covered by any title. It merely showed that such land has been surveyed and its boundaries have been determined. Also noteworthy is the finding of public respondent that "the same order (issued by the land registration court) [which set] aside the order (of) general default insofar as private respondent Solid Homes, Inc. was concerned, directed the NLTDRA to make the plotting of the relative position of the property covered by LRC Psd-245998 and [that which was] embraced in TCT No. N-7873.[13] The intention of the land registration court was to avoid duplicity,[14] that is, to rule out the possibility that the land he sought to register was already covered by a certificate of title. In this case, the land he applied for was found to be within the land described in private respondents transfer certificate of title. Petitioner also alleges that the land he applied for was located in Barangay Mambogan, while the registered land of private respondent was in Barangay Mayamot. In his reply filed with public respondent, however, he himself admitted that Barangay Mambogan is a part of Barangay Mayamot [which is] a bigger barrio in Antipolo, Rizal, and Mayamot covers a big parcel of land running from Antipolo up to Marikina.[15] In view of petitioners declaration, it was not impossible for the land owned by private respondent to be located in Barangay Mayamot and in Barangay Mambogan. At any rate, whether the two lands are located in Mambogan or Mayamot or both is a factual question, and its resolution by the trial and the appellate courts is binding on this Court. Petitioner failed to provide a reason, let alone an adequate one, to justify the reversal of such finding of the lower courts. Petitioner also argues that the plotting made by NLTDRA was anomalous because Survey Plan FP -1540, on which private respondents title was based, could not be located. This argument lacks merit. The law does not require resorting to a survey plan to prove the true boundaries of a land covered by a valid certificate of title; the title itself is the conclusive proof of the realtys metes and bounds. Section 47 of the Land Registration Act, or Act No. 496, provides that (t)he original certificates in the registration book, any copy thereof duly certified under the signature of the clerk, or of the register of deeds of the province or city where the land is situated, and the seal of the court, and also the owners duplicate certificate, shall be received as evidence in all the courts of the Philippine Islands and shall be conclusive as to all matters contained therein except so far as otherwise provided in this Act. It has been held that a certificate of title is conclusive evidence with respect to the ownership of the land described therein and other matters which can be litigated and decided in land registration proceedings.[16] Thus, this Court inOdsigue vs. Court of Appeals[17] ruled:

x x x. Petitioner contends that private respondents have not identified the property sought to be recovered as required by Art. 434 of the Civil Code. He alleges that Sitio Aduas, where the land in question is located, is at the boundary of Barangay May-Iba, Teresa, Rizal, and Barangay Lagundi, Morong, Rizal. On the other hand, petitioner maintains, the parcel of land he is occupying is located in Barangay May-Iba. He claims that the technical description in the title does not sufficiently identify the property of private respondent and that a geodetic survey to determine which of his improvements should be demolished should first have been conducted by the private respondent. x x x. But private respondents title (OCT No. 4050) indicates that the property is located in Barangay Lagundi. Likewise, the certification issued by the Municipal Agrarian Reform Officer at Morong, Rizal stated that petitioner was occupying a landholding at Barangay Lagundi. For our purposes, a survey is not necessary. A certificate of title is conclusive evidence not only of ownership of the land referred but also its location. The subject of these proceedings is the land covered by OCT No. 4050. Accordingly, petitioners required to demolish only whatever is constructed within its boundaries. (Underscoring supplied.) The old case of Legarda and Prieto vs. Saleeby[18] explains the nature of a torrens certificate of title, as follows: x x x. The registration, under the torrens system, does not give the owner any better title than he had. If he does not already have a perfect title, he can not have it registered. Fee simple titles only may be registered. The certificate of registration accumulates in one document a precise and correct statement of the exact status of the fee held by its owner. The certificate, in the absence of fraud, is the evidence of title and shows exactly the real interest of its owner. The title once registered, with very few exceptions, should not thereafter be impugned, altered, changed, modified, enlarged, or diminished, except in some direct proceeding permitted by law. Otherwise all security in registered titles would be lost. A registered title can not be altered, modified, enlarged, or diminished in a collateral proceeding and not even by a direct proceeding, after the lapse of the period prescribed by law. All in all, the land registration court did not err in relying on the certificate of title instead of the survey plan; likewise, the appellate court did not commit any reversible error in affirming the trial courts decision.

Second Issue: Denial of Due Process

Petitioner claims that he was denied due process because he was unable to take the witness stand. We disagree. The essence of due process is the opportunity to be heard. It is the denial of this opportunity that is repugnant to due process.[19] In this case, petitioner was afforded an opportunity to present witnesses, and he did present three. However, petitioner did not invoke his right to take the witness stand even when the trial court ordered the submission of the parties memoranda which signified the termination o f the proceedings. Because he acquiesced to the termination of the case, he forfeited his right to take the witness stand. Likewise, we are not persuaded by his allegation that his own counsel hardly participated in the proceedings. The records show that said counsel did cross-examine Engineer Silverio Perez by propounding clarificatory questions to the latter. In any event, the client is generally bound by the acts of his counsel. Petitioner has not shown at all that his previous counsel had acted in such grossly negligent manner as to deprive him of effective representation, or of due process.[20] In support of his contention, petitioner cites Tirona vs. Naawa[21] which held: We hold the view, however that respondent Judge erred when he ordered the dismissal of the registration case over the object ion of the oppositors; and when he refused to reconsider the order of dismissal and reinstate the case he had neglected to perform an act which the law enjoins as a duty resulting from an office, and had thereby deprived the oppositors of a right to which they are entitled. Such ruling finds no application to the present case, because neither Respondent Mariano Raymundo (the applicant in the land registration case) nor Petitioner Constantino Tirona (the oppositor in the cited case) was a holder of any certificate of title over the land intended for registration. Such being the case, the land registration court was ordered to act in accordance with Section 37 of Act No. 496[22] either by dismissing the application if none of the litigants succeeded in showing a proper title, or by entering a decree awarding the land applied for to the person entitled thereto. WHEREFORE, premises considered, the petition is hereby DENIED and the assailed Decision and Resolution are AFFIRMED. Costs against petitioner. SO ORDERED. Narvasa, C.J., (Chairman), Romero, Melo, and Francisco, JJ., concur. SECOND DIVISION

REPUBLIC OF THEPHILIPPINES, Represented by MACTANCEBUINTERNATIONAL AIRPORT AUTHORITY (MCIAA), Petitioner,

G.R. No. 171571 Present: QUISUMBING, J., Chairperson, CARPIO MORALES, TINGA, CHICO-NAZARIO, and VELASCO, JR., JJ.

- vesus -

HEIRS OF FRANCISCA DIGNOS-SORONO, namely: TEODORO SORONO, LUCIO SORONO, JR., ARSENIO T. SORONO, RODULFO S. OLIVAR, ALFONSA T. SORONO, CONSTANCIO S. LUMONGSOD, EULALIA S. LIMPANGOG, and FLORENCIA S. BAGUIO; HEIRS OF JUAN L. AMISTOSO,[1] namely: MARIO L. AMISTOSO, LYN-LYN AMISTOSO, ALLAN L. AMISTOSO, RAQUEL S. AMISTOSO, EUFRONIO S. AMISTOSO, JR., and ROGELIO S. AMISTOSO; HEIRS OF BRIGILDA D. AMISTOSO, namely: VICTOR A. YAGONG, HEDELIZA A. YAGONG, and CIRIACA A. YAGONG; HEIRS OF PASTOR DIGNOS; HEIRS OF ISABEL DIGNOS, namely: DR. NAPOLEON A. AMORES, VICENTE A. BASMAYOR, DOMINGO A. BASMAYOR, and LYDIA A. BASMAYOR; HEIRS OF DONATA DIGNOS, namely: TRINIDAD D. FUENTES, NICASIA D. FUENTES, and IRINEO D. FUENTES; HEIRS OF SEGUNDA DIGNOS, namely: HONORATA D. CORTES and BENIGNO D. CORTES; HEIRS OF GREGORIA DIGNOS, namely: RITA D. FUENTES and JOSE D. FUENTES; HEIRS OF DOMINGO FUENTES, namely: CIRILA P. DIGNOS and BASILIO P. DIGNOS; and HEIR OF ISABELO DIGNOS, namely: TERESITA R. DIGNOS,[2] Respondents. x - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - x

Promulgated: March 24, 2008

DECISION CARPIO MORALES, J.: Assailed via petition for review on certiorari is the April 23, 2005 decision of the Court of Appeals[3] affirming that of the Regional Trial Court (RTC) of Lapu-lapu City, Branch 54.[4]

Lot Nos. 2296 and 2316 of the Cadastral Survey of Opon, Lapu-lapu City were adjudicated on December 7, 1929 by the then Court of First Instance of Cebu in favor of the following in four equal shares:

a) Francisca Dignos, married to Blas Sorono share in the two lots; b) Tito Dignos, married to Candida Torrebillas share in the two lots; c) Isabel Dignos, married to Fabiano Amores; Donata Dignos, married to Estanislao Fuentes; Segunda Dignos, married to Demetrio Cortes; Gregoria Dignos, married to Severo Fuentes; Domingo Dignos, married to Venturada Potot; and Isabelo Dignos, married to Petronilla Gamallo share in the two lots; and d) Silveria Amistuoso, married to Melecio Tumulak; Mario Amistuoso, married to Rufina Tampus; Juan Amistuoso, married to Narcisa Cosef; Brigilda Amistuoso, married to Casimiro Yagong; and Pastor Amistuoso, widower share in the two lots.[5]

It appears that the two lots were not partitioned by the adjudicatees.

It appears further that the heirs of Tito Dignos, who, as reflected above, was awarded share in the two lots, sold for P2,565.59 the entire two lots to the then Civil Aeronautics Administration (CAA) via a public instrument entitled Extrajudicial Settlement and Sale executed on October 11, 1957, without the knowledge of respondents whose predecessors-in-interest were the adjudicatees of the rest of the portion of the two lots.[6]

In 1996, CAAs successor-in-interest, the Mactan Cebu International Airport Authority (MCIAA), erected a security fence traversing Lot No. 2316 and relocated a number of families, who had built their dwellings within the airport perimeter, to a portion of said lot to enhance airport security in line with the standards set by the International Civil Aviation Organization and the Federal Aviation Authority.

MCIAA later caused the issuance in its name of Tax Declaration No. 00548 covering Lot No. 2296 and Tax Declaration No. 00568 covering Lot No. 2316.

Respondents soon asked the agents of MCIAA to cease giving third persons permission to occupy the lots but the same was ignored.

Respondents thereupon filed on January 8, 1996 a Complaint for Quieting of Title, Legal Redemption with Prayer for a Writ of Preliminary Injunction against MCIAA before the RTC of Lapu-lapu City,[7] alleging that the existence of the tax declarations would cast a cloud on their valid and existing titles to the lots. They alleged that corresponding original certificates of title in favor of the decreed owners were . . . issued but the same could no longer be found and located, and in all probability, were lost during the Second World War. [8] (This claim was not specifically denied by petitioner in its Answer with Counterclaim.)[9]

Respondents further alleged that neither they nor their predecessors-in-interests sold, alienated or disposed of their shares in the lots of which they have been in continuous peaceful possession.

Respondents furthermore alleged that neither petitioner nor its predecessor-in-interest had given them any written notice of its acquisition of the share of Tito Dignos.

Respondents thus prayed as follows: 1) Upon the filing of this complaint, that a restraining order be issued enjoining the defendant and any of its officers, agents, employees, and any third person acting on their behest, to desist from occupying their portions of Lots 2296 and 2316, Opon Cadastre, and upon due notice and hearing, to issue the corresponding writ of preliminary injunction for the same purpose; 2) To declare the tax declarations of the defendant or any of its predecessors-in-interests covering Lots 2296 and 2316, Opon Cadastre, to be null and void: 3) To grant unto the plaintiffs the right of preemption in the sale of the one-fourth share of Tito Dignos in the above-mentioned parcels of land under the provisions of Articles 1620 and 1623 of the Civil Code;

4) To order the defendant to reimburse plaintiffs the sum of P10,000.00 acceptance fee, the sums of P1,000.00 per appearance fee, the sum of P10,000.00 for costs of litigation; 5) To order the defendant to pay the plaintiffs the sum of P100,000.00 for moral damages. Plaintiffs further pray for such orders as may be just and equitable under the premises.[10] (Underscoring supplied)

Republic of the Philippines, represented by the MCIAA (hereafter petitioner), in its Answer with Counterclaim, [11] maintained that from the time the lots were sold to its predecessor-in-interest CAA, it has been in open, continuous, exclusive, and notorious possession thereof; through acquisitive prescription, it had acquired valid title to the lots since it was a purchaser in good faith and for value; and assuming arguendo that it did not have just title, it had, by possession for over 30 years, acquired ownership thereof by extraordinary prescription.

At all events, petitioner contended that respondents action was barred by estoppel and laches.

The trial court found for respondents. It held that respondents and their predecessors-in-interest were in peaceful and continuous possession of their shares in the lots, and were disturbed of such possession only in 1996 when petitioner put up the security fence that traversed Lot No. 2316 and relocated families that had built their houses within the airport perimeter to a portion of said lot.

On petitioners claim that it had acquired ownership by extraordinary prescription, the trial court brushed it aside on the g round that registered lands cannot be the subject of acquisitive prescription.

Neither, held the trial court, had respondents action prescribed, as actions for quieting of title cannot prescribe if the p laintiffs are in possession of the property in question, as in the case of herein respondents.

On petitioners defense of laches, the trial court also brushed the same aside in light of its finding that respondents, who have long been in possession of the lots, came to know of the sale only in 1996. The trial court added that respondents could not be charged with constructive notice of the 1957 Extrajudicial Settlement and Sale of the lots to CAA as it was erroneously registered under Act No. 3344,[12] the law governing recording of instruments or deeds relating to real estate which are not registered under the Torrenssystem. The subject lots being registered, the trial court found, the registration of the deed should have been made under Act No. 496,[13] the applicable law in 1957. In fine, the trial court held that the registration of the deed under Act No. 3344 did not operate as constructive notice to the whole world.[14]

Concluding, the trial court held that the questioned sale was valid only with respect to Tito Dignos share of the lots, and that the sale thereof was subject to the right of legal redemption by respondents following Article 1088 of the Civil Code, reading: Should any of the heirs sell his hereditary rights to a stranger before partition, any or all of the co-heirs may be subrogated to the rights of the purchaser by reimbursing him for the price of the sale, provided they do so within the period of one month from the time they were notified in writing of the sale by the vendor.

In light of its finding that the heirs of Tito Dignos did not give notice of the sale to respondents, the trial court held that the period for legal redemption had not yet lapsed; and the redemption price should be of the purchase price paid by the CAA for the two lots.

The trial court thus disposed: WHEREFORE, all premises considered, the Court rules in favor of plaintiffs and hence renders judgment: a) Declaring Tax Declarations Nos. 00915 and 00935, as well as all other tax declarations covering Lot 2296 and Lot 2316 under the names of the Civil Aeronautics Administration, the Bureau of Air Transportation and the defendant Mactan Cebu International Airport Authority, as null and void and directing the City Assessor of Lapu-Lapu City to cancel them; b) Declaring the Extrajudicial Settlement and Sale affecting Lot 2296 and Lot 2316 (Exhibit H for plaintiffs) as void and ineffective as regards the three-fourth[s] (3/4) shares of plaintiffs in both lots and declaring the herein plaintiffs as owners of such three fourth[s] shares and; c) Ordering the defendant to resell to plaintiffs for a total price of Six Hundred forty Pesos (P640.00) the onefourth (1/4) shares in Lot 2296 and Lot 2316 it had purchased from the heirs of the late Tito Dignos in 1957; No pronouncement as to costs. SO ORDERED. [15]

As priorly stated, the Court of Appeals affirmed the trial courts decision.

Hence, the present petition for review on certiorari which proffers the following GROUNDS FOR ALLOWANCE OF THE PETITION THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE TRIAL COURTS DECISION WHEN RESPONDENTS NO LONGER HAVE ANY RIGHT TO RECOVER LOTS 2296 AND 2316 DUE TO THE PRIOR SALE THEREOF TO THE REPUBLIC AND UPON THE EQUITABLE GROUNDS OF ESTOPPEL AND LACHES.[16]

The petition fails.

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

Apropos is the following pertinent portion of this Courts decision in Bailon-Casilao v. CA: As early as 1923, this Court has ruled that even if a co-owner sells the whole property as his, the sale will affect only his own share but not those of the other co-owners who did not consentto the sale [Punsalan v. Boon

Liat, 44 Phil. 320 (1923)]. This is because under the aforementioned codal provision, the sale or other disposition affects only his undivided share and the transferee gets only what would correspond to his grantor in the partition of the thing owned in common. [Ramirez v. Bautista, 14 Phil. 528 (1909)]. Consequently, by virtue of the sales made by Rosalia and Gaudencio Bailon which are valid with respect to their proportionate shares, and the subsequent transfers which culminated in the sale to private respondent Celestino Afable, the said Afable thereby became a co-owner of the disputed parcel of land as correctly held by the lower court since the sales produced the effect of substituting the buyers in the enjoyment thereof [Mainit v. Bandoy, 14 Phil. 730 (1910)]. From the foregoing, it may be deduced that since a co-owner is entitled to sell his undivided share, a sale of the entire property by one co-owner without the consent of the other co-owners is not null and void. However, only the rights of the co-owner-seller are transferred, thereby making the buyer a co-owner of the property.[17] (Emphasis and underscoring supplied)

Petitioners predecessor-in-interest CAA thus acquired only the rights pertaining to the sellers-heirs of Tito Dignos, which is only undivided share of the two lots.

Petitioners insistence that it acquired the property through acquisitive prescription, if not ordinary, then extraordinary, does not lie. The trial courts discrediting thereof is well taken. It bears emphasis at this juncture that in the Extrajudicial Settlement and Sale forged by CAA and Tito Dignos heirs in 1957, the following material portions thereof validate the claim of respondents that the two lots were registered: xxxx 4. That since the Original Transfer Certificate of Title of the above-mentioned property/ies has/have been lost and/or destroyed, or since the said lot/s is/are covered by Cadastral Case No. 19, and a decree issued on March 19, 1930, bearing Decree No./s 474824 & 474825, and the VENDEE hereby binds itself to reconstitute said title/s at its own expense and that the HEIRS-VENDORS, their heirs, successors and assigns bind themselves to help in the reconstitution of title so that the said lot/s may be registered in the name of the VENDEE in accordance with law[.][18] xxxx The trial courts discrediting of petitioners invocation of laches and prescription of action is well-taken too.

As for petitioners argument that the redemption price should be of the prevailing market value, not of the actual purchase price, since, so it claims, (1) they received just compensation for the property at the time it was purchased by the Government; and, (2) the property, due to improvements introduced by petitioner in its vicinity, is now worth several hundreds of millions of pesos,[19] the law is not on its side. Thus, Article 1088 of the Civil Code provides: Should any of the heirs sell his hereditary rights to a stranger before the partition, any or all of the co-heirs may be subrogated to the rights of the purchaser by reimbursing him for the price of the sale, provided they do so within the period of one month from the time they were notified in writing of the sale by the vendor. (Emphasis and underscoring supplied)

The Court may take judicial notice of the increase in value of the lots. As mentioned earlier, however, the heirs of Tito Dignos did not notify respondents about the sale. At any rate, since the Extrajudicial Settlement and Sale stipulates, thus: That the HEIRS-VENDORS, their heirs, assigns and successors, undertake and agree to warrant and defend the possession and ownership of the property/ies herein sold against any and all just claims of all persons whomsoever and should the

VENDEE be disturbed in its possession, to prosecute and defend the same in the Courts of Justice[20] (Emphasis and underscoring supplied),

petitioner is not without any remedy. This decision is, therefore, without prejudice to petitioners right to seek redress against the vendors heirs of Tito Dignos and their successors-in-interest.

WHEREFORE, the petition is, in light of the foregoing disquisition, DENIED.

SO ORDERED. FIRST DIVISION SPOUSES CHARLITO COJA and ANNIE MESA COJA, Petitioners, G.R. No. 151153

-versus-

HON. COURT OF APPEALS and HEIRS OF FELICIANO AQUILLO, SR., namely: QUINCIANO VICTOR, SR., LORNA A. VICTOR, ANTONIO VICTOR, QUINCIANO A. VICTOR, JR., SUSANA A. VICTOR, CLARA AQUILLO, CARMENCITA AQUILLO, AGAPITO AQUILLO, NOEL AQUILLO, ADONIS AQUILLO, FELICIANO AQUILLO, JR., RONALD AQUILLO and ALDRIN AQUILLO, Respondents.

Present: PUNO, C.J., Chairperson, YNARES-SANTIAGO,* SANDOVAL-GUTIERREZ, CORONA, and AZCUNA, JJ.

Promulgated: December 10, 2007

X -------------------------------------------------------------------------------------- X

DECISION AZCUNA, J.:

Before us is a petition for review on certiorari[1] assailing the Decision of the Court of Appeals (CA) in CA-G.R. CV No. 37583 dated February 5, 2001 and the Resolution[2] dated November 5, 2001 denying petitioners motion for reconsideration.

The facts of the case are as follows:

Luz Aquillo Victor (hereafter Luz) and Feliciano Aquillo, Jr. (hereafter Feliciano Jr.), both deceased, were the legitimate children of the late spouses Feliciano Aquillo, Sr. (hereafter Feliciano Sr.) and Lorenza Mangarin Aquillo (hereafter Lorenza). [3] During their marriage,

Feliciano Sr. and Lorenza acquired a 120-square meter lot located at Poblacion, Mandaon, Masbate, upon which they built their conjugal home.[4] The subject lot was covered by Tax Declaration No. 1151[5] issued in the name of Feliciano Sr.

After the death of Lorenza, Feliciano Sr. cohabited with Paz Lachica and lived at the aforesaid house. However, after Lorenzas death, her heirs failed to partition their hereditary shares in their inheritance.

On February 27, 1960, while Lorenza was cohabiting with Feliciano Sr., Paz Lachica purchased a 192-square meter lot covered by Tax Declaration No. 02115 from the heirs of Juan Rivas.[6] She later sold 40.10 square meters of the property to Isabel L. de Real leaving her with only 151.9 square meters.[7]

On July 7, 1965, or two (2) days before he died, Feliciano Sr. married Paz Lachica.[8] After Feliciano Sr. died, his heirs also failed to partition among themselves their hereditary shares in their inheritance.

Sometime in 1969, Paz Lachica was issued Tax Declaration No. 4424[9] over the remaining 151.9 square meters of the property covered by Tax Declaration No. 02115. The aforesaid Tax Declaration was later cancelled by Tax Declaration No. 3443-Rev.[10] On September 10, 1973, Tax Declaration No. 3514[11] was issued, effectively canceling Tax Declaration No. 3443-Rev. Also, in said Tax Declaration No. 3514, the area originally covered by Tax Declaration No. 3443-Rev was increased from 151.9 square meters to 336 square meters, and it included the 120-square meter property originally covered by Tax Declaration No. 1151. It also contained an annotation at the back stating Revised as per request of the owner to include the excess area for taxation purposes.[12] Thereafter, Tax Declaration No. 3514 was cancelled by Tax Declaration No. 1558,[13] which was later cancelled by Tax Declaration No. 1946,[14] and later cancelled by Tax Declaration No. 2038.[15]

On December 18, 1986, Paz Lachica and herein petitioners, Spouses Charlito Coja and Annie Mesa Coja, executed a Deed of Absolute Sale[16] wherein the former sold the 336-square meter parcel of land covered by Tax Declaration No. 2038 to the latter. Consequently, Tax Declaration No. 4946[17] was issued in the name of petitioners, canceling Tax Declaration No. 2038.

Sometime in 1987, Charlito Coja filed an application for the issuance of title with the Regional Trial Court (RTC), Branch 46, Masbate, Masbate (now Masbate City) docketed as LRC No. N-365.[18] Luz, being one of the heirs of Feliciano Sr., opposed the application for registration.[19] Likewise, the Office of the Solicitor General (OSG) opposed the application. The OSG alleged, among other things, that the applicant or his predecessors-in- interest had not been in open, continuous, exclusive, and notorious possession of the subject land within the period required by law; and that the documents attached to or alleged in the application do not constitute competent and sufficient evidence

of a bona fide acquisition of the land or of an open, continuous, exclusive, and notorious possession and occupation thereof in the concept of an owner.[20]

During the pendency of the case, Luz died. She was substituted by her spouse, Quinciano Victor, Sr., and her children, Lorna, Antonio, Quinciano Jr., and Susana, all surnamed Victor.

On November 3, 1989, respondents filed an action for recovery of possession and ownership with damages, docketed as Civil Case No. 3904, against the petitioners and Paz Lachica.[21] Respondents claimed that they are the true and lawful heirs of the Spouses Feliciano Sr. and Lorenza; that Paz Lachica refused to deliver the property to its rightful owners despite repeated demands; that Paz Lachica appropriated the subject property to herself and had the tax declaration transferred to her name; that Paz Lachica sold the property to the Spouses Coja; and that the Spouses Coja failed to deliver the subject property to the rightful heirs despite repeated demands.[22]

Upon motion by the plaintiffs, LRC No. N-365 and Civil Case No. 3904 were consolidated.[23]

In their Answer, defendants therein alleged that Paz Lachica acquired the subject property before her marriage to Feliciano Sr. and that she had been in actual and physical possession of the same for more than fifteen (15) years before she sold the property to the Spouses Coja; that they acquired the property by purchasing it from Paz Lachica; that they are buyers in good faith and for value; and that the property in question was the paraphernal property of Paz Lachica and, therefore, plaintiffs therein have no right and interest over the same.[24]

The parties failed to settle their respective differences and a joint trial ensued.

On March 11, 1992, the RTC rendered a decision[25] against the plaintiffs-oppositors and in favor of the defendants-applicants, the decretal portion of which reads:

WHEREFORE, premises considered, decision is hereby rendered in favor of the defendants-applicants, to wit: 1. oppositors; Ordering the dismissal of the complaint in Civil Case No. 3904 with costs against the plaintiffs-

2. Declaring the defendants-applicants spouses Charlito Coja and Annie Mesa, the absolute owner of the land subject of their application in L.R.C. No. N-365; 3. Declaring the title of the applicants, spouses Charlito Coja and Annie Mesa and Sancho Mesa, over the property designated as Psu-05-005736 together with all the improvements thereon, CONFIRMED and REGISTERED pursuant to the provisions of P.D. 1529. Once this decision becomes final and executory, let the corresponding decree of registration issue.

SO ORDERED.[26]

The RTC opined that since the land in question is registered in the name of Paz Lachica alone, it is assumed that it is not part of the conjugal partnership properties of Feliciano Sr., and Lorenza, for if it was their conjugal property, it should have been registered in their names. As such, when the Spouses Coja purchased the property from Paz Lachica, they were of the honest belief that the latter was the true and lawful owner. Likewise, on the basis of the evidence adduced, the RTC held that defendants-applicants possess good title proper for registration and confirmation.[27]

Aggrieved, plaintiffs-oppositors appealed from the decision to the CA, assigning the following errors:

[1]

THE TRIAL COURT GRAVELY ERRED IN HOLDING THAT THE DEFENDANTS-APPLICANTS, SPOUSES CHARLITO COJA AND ANNIE MESA COJA ARE THE TRUE AND LAWFUL OWNERS OF THE LAND SUBJECT OF THEIR APPLICATION. THE TRIAL COURT GRAVELY ERRED IN CONCLUDING THAT THE LAND IN QUESTION IS NOT THE CONJUGAL PARTNERSHIP PROPERTY OF THE COUPLE, THE LATE SPOUSES FELICIANO AQUILLO AND LORENZA MANGARIN THE TRIAL COURT GRAVELY ERRED IN HOLDING THAT DEFENDANTS-APPLICANTS POSSESS GOOD TITLE, PROPER FOR REGISTRATION.[28]

[2]

[3]

On February 5, 2001, the CA rendered a Decision[29] reversing and setting aside the decision of the RTC, the pertinent portion of which reads:

WHEREFORE, premises considered, the decision dated March 11, 1992 is hereby REVERSED and SET ASIDE, and a new one entered, as follows: 1. The sale of the property by Paz Lachica to Spouses Charlito Coja and Annie Mesa Coja insofar as the shares of appellants is (sic) concerned is NULLIFIED; Appellees-applicants are ordered to deliver possession of the property originally covered by Tax Declaration No. 1151 to appellants, to the extent of 93.3333 square meters; Appellee-applicants are ordered to pay appellants P300.00 per month as reasonable rent for the use of the property, from the date of filing of the complaint and until possession thereof is restored to appellants; The application for registration of title by Charlito and Annie Coja in L.R.C. No. N-365 is denied; and Costs against appellees.

2.

3.

4.

5.

SO ORDERED.[30]

The CA concluded that the property formerly covered by Tax Declaration No. 1151, with an area of 120 square meters, is the conjugal property of Feliciano Sr. and Lorenza having been acquired during their marriage. Under the law, upon the death of Lorenza, one-half of said property, or 60 square meters, was transmitted to her heirs, namely Feliciano Sr., Feliciano Jr., and Luz, at 20 square meters each, while the

remaining one-half pertained to Feliciano Sr. alone as his share in the conjugal property. Upon the death of Feliciano Sr., his rights over the property, consisting of his inheritance from his wife and his share in the conjugal partnership, or a total of 80 square meters, were transmitted to his heirs, Feliciano Jr., Luz, and his widow, Paz Lachica. Thus, Paz Lachica is entitled to only 26.6666 square meters and the heirs of Feliciano Jr. and Luz are entitled to the remaining 93.3333 square meters of the subject property. Therefore, Paz Lachica had no authority to sell their portions of the property.

Applicants-appellees therein filed a motion for reconsideration but it was denied in the Resolution[31] dated November 5, 2001.

Hence, this petition, assigning the following errors:

[1] THE HONORABLE COURT OF APPEALS ERRED IN REVERSING AND SETTING ASIDE THE DECISION OF THE REGIONAL TRIAL COURT, BRANCH 46, AT MASBATE NOW MASBATE CITY (ANNEX H) AS THE SAME IS IN ACCORDANCE WITH LAW AND JURISPRUDENCE; AND [2] THE HONORABLE COURT OF APPEALS ERRED IN DENYING THE APPLICATION FOR LAND REGISTRATION OF TITLE OF THE PETITIONERS OVER THEIR RESIDENTIAL AND COMMERCIAL LAND SITUATED AT POBLACION, MANDAON, MASBATE WHICH SHOULD BE CONFIRMED AND REGISTERED PURSUANT TO LAND REGISTRATION LAW IN RELATION TO PD NO. 1529.

Petitioners argue that respondents failed to establish their case on the basis of the evidence they presented during the trial. Respondents only presented Tax Declaration No. 1151 which had never been updated since 1945 up to Feliciano Sr.s death. In addition, his alleged successors-in-interest have not caused the revision of the said tax declaration nor paid the taxes to the government up to the present and hence the same cannot be considered proof of ownership. Since Feliciano Sr. is not the owner of the property in question, the same cannot be inherited by the respondents. Moreover, no survey of the property had been made in the name of Feliciano Sr.[32]

Petitioners add that the subject property was the paraphernal property of Paz Lachica since she purchased the property before she married Feliciano Sr. Finally, petitioners maintain that they are purchasers in good faith and for value since the subject property was covered by a tax declaration in Paz Lachicas name when they bought it from her.[33]

The petition lacks merit.

The property subject matter of the contract of sale between the Spouses Coja and Paz Lachica, is a 336-square meter parcel of land covered by Tax Declaration No. 2038.[34] This includes the property bought by Paz Lachica from the heirs of Juan Rivas, some other parcels of land, and the 120-square meter lot purchased by Feliciano Sr. and Lorenza during their marriage.

Article 160 of the Civil Code provides:

Article 160. All property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertains exclusively to the husband or to the wife.

All properties acquired during the marriage are thus disputably presumed to belong to the conjugal partnership. As a condition for the operation of above article, in favor of the conjugal partnership, the party who invokes the presumption must first prove that the property was acquired during the marriage.[35]

The CA declared that the 120-square meter lot belonged to the conjugal partnership of Feliciano Sr. and Lorenza because the spouses acquired it during the subsistence of their marriage and the property was in fact declared for taxation purposes during the said period. Thus, the statutory presumption set forth in Article 160 of the Civil Code became operative. Having been acquired during the marital union of Feliciano Sr. and Lorenza, the subject 120-square meter portion of the property sold by Paz Lachica to the Spouses Coja is presumed to be the conjugal property of Feliciano Sr. and Lorenza.

The presumption may be rebutted only with strong, clear, categorical and convincing evidence. There must be strict proof of the exclusive ownership of one of the spouses, and the burden of proof rests upon the party asserting it.[36]

Petitioners insist that the property subject of the sale was exclusively owned by Paz Lachica having been purchased prior to her marriage with Feliciano Sr. The argument is not supported by evidence. While it may be correct to argue that the 216-square meter portion of the 336-square meter subject of the sale was exclusively owned by Paz Lachica, the same cannot be sustained as to the 120-square meter portion originally covered by Tax Declaration No. 1151. Paz Lachica claims ownership over the property in question on the basis only of a tax declaration issued in her name. But that is Tax Declaration No. 3514 which was belatedly issued in the name of Paz Lachica to include the 120square meter lot originally covered by Tax Declaration No. 1151. Revision was done upon Paz Lachicas request after the death of Feliciano Sr. The revision of the tax declaration or the issuance of a new one in her name, did not operate and transfer title of the subject property to her. The property remained as one that formed part of the conjugal property of Feliciano Sr. and Lorenza.

Upon the death of Lorenza, the conjugal partnership was terminated. As a result, one half of the property was automatically reserved in favor of the surviving spouse, Feliciano Sr. as his share in the conjugal partnership. The other half, which is the share of Lorenza,

was transmitted to Lorenzas heirs, Feliciano Jr., Luz, and her husband Feliciano Sr., who is entitled to the same share as that of a legitimate child.[37]

The Court agrees in toto with the CAs conclusion: x x x. Under Article 996 of the Civil Code, upon the death of Lorenza Mangarin, one-half of said property, or 60 square meters, is transmitted to her heirs, namely: Feliciano Aquillo, Sr., Feliciano Aquillo, Jr., and Luz Aquillo, at 20 square meters each, while the remaining one-half is transmitted to Feliciano Aquillo, Sr. Upon the death of Feliciano Aquillo, Sr., his rights over the property, consisting of the 20 square meter-inheritance from his late wife and his 60 square meter-share in the conjugal partnership, or a total of 80 square meters were transmitted to his heirs, namely: Feliciano Aquillo, Jr., Luz Aquillo, and his widow, Paz Lachica. The surviving spouse is entitled to the same share as that of the legitimate children, to the portion of one-third each or 26.6666 square meters each x x x. Thus, as a result of the death of Feliciano Aquillo, Sr., a regime of co-ownership exists among Feliciano, Jr., Luz Aquillo, and Paz Lachica, with respect to the undivided 80 square meters of the property covered by Tax Declaration No. 1151. The 120 square meters less the hereditary share of Paz Lachica which is 26.6666 square meters, or the 93.3333 square meters of the property covered by Tax Declaration No. 1151, belong to the appellants, being the heirs of the late Feliciano Aquillo, Jr. and Luz Aquillo. x x x.[38]

Considering that Paz Lachica owns only 26.6666 square meters of the 120-square meter property and the remaining 93.3333-square meter portion thereof is owned by the respondents, the former could only validly sell the portion which rightfully belonged to her. However, considering that Paz Lachica, the predecessor-in-interest of the Spouses Coja, was a co-owner of the subject 120-square meter property; and considering further that partition of the property is wanting, this Court is precluded from directing the Spouses Coja to return specific portions of the property to respondents. Noteworthy is the pronouncement on this issue in De Guia v. Court of Appeals[39] citing Hermogena G. Engreso with Spouse Jose Engreso v. Nestoria de la Cruz and Herminio de la Cruz:[40]

It is a basic principle in civil law that before a property owned in common is actually partitioned, all that the co-owner has is an ideal or abstract quota or proportionate share in the entire property. A co-owner has no right to demand a concrete, specific or determinate part of the thing owned in common because until division is effected his right over the thing is represented only by an ideal portion. As such, the only effect of an action brought by a co-owner against a co-owner will be to obtain recognition of the co-ownership; the defendant cannot be excluded from a specific portion of the property because as a co-owner he has a right to possess and the plaintiff cannot recover any material or determinate part of the property. x x x.

A co-owner may file an action for recovery of possession against a co-owner who takes exclusive possession of the entire co-owned property. However, the only effect of such action is a recognition of the co-ownership. The courts cannot proceed with the actual partitioning of the co-owned property.[41] In fine, judicial or extrajudicial partition is necessary to effect physical division of the subject 120-square meter property.

WHEREFORE, the petition is PARTIALLY GRANTED. The Decision of the Court of Appeals dated February 5, 2001 in CA-G.R. CV No. 37583 is AFFIRMEDwith the MODIFICATION that the portion ordering petitioners to deliver possession to respondents of the property originally covered by Tax Declaration No. 1151 to the extent of 93.3333 square meters is DELETED. In lieu thereof, the co-ownership between the parties over the subject 120-square meter property is recognized, to the extent of undivided shares of 93.3333 square meters for respondents and 26.6666 square meters for petitioners.

THIRD DIVISION

CELESTINO BALUS, Petitioner,

G.R. No. 168970 Present: CORONA, J., Chairperson, VELASCO, JR., NACHURA, PERALTA, and MENDOZA, JJ. Promulgated: January 15, 2010

- versus -

SATURNINO BALUS andLEONARDA BALUS VDA. DE CALUNOD, Respondents.

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

DECISION

PERALTA, J.: Assailed in the present petition for review on certiorari under Rule 45 of the Rules of Court is the Decision[1] of the Court of Appeals (CA) dated May 31, 2005 in CA-G.R. CV No. 58041 which set aside the February 7, 1997 Decision of the Regional Trial Court (RTC) of Lanao del Norte, Branch 4 in Civil Case No. 3263.

The facts of the case are as follows: Herein petitioner and respondents are the children of the spouses Rufo and Sebastiana Balus. Sebastiana died on September 6, 1978, while Rufo died on July 6, 1984.

On January 3, 1979, Rufo mortgaged a parcel of land, which he owns, as security for a loan he obtained from the Rural Bank of Maigo, Lanao del Norte (Bank). The said property was originally covered by Original Certificate of Title No. P-439(788) and more particularly described as follows: A parcel of land with all the improvements thereon, containing an area of 3.0740 hectares, more or less, situated in the Barrio of Lagundang, Bunawan, Iligan City, and bounded as follows: Bounded on the NE., along line 1-2, by Lot 5122, Csd-292; along line 2-12, by Dodiongan River; along line 12-13 by Lot 4649, Csd-292; and along line 12-1, by Lot 4661, Csd-292. x x x [2]

Rufo failed to pay his loan. As a result, the mortgaged property was foreclosed and was subsequently sold to the Bank as the sole bidder at a public auction held for that purpose. On November 20, 1981, a Certificate of Sale[3] was executed by the sheriff in favor of the Bank. The property was not redeemed within the period allowed by law. More than two years after the auction, or on January 25, 1984, the sheriff executed a Definite Deed of Sale[4] in the Bank's favor. Thereafter, a new title was issued in the name of the Bank.

On October 10, 1989, herein petitioner and respondents executed an Extrajudicial Settlement of Estate[5] adjudicating to each of them a specific one-third portion of the subject property consisting of 10,246 square meters. The Extrajudicial Settlement also contained provisions wherein the parties admitted knowledge of the fact that their father mortgaged the subject property to the Bank and that they intended to redeem the same at the soonest possible time.

Three years after the execution of the Extrajudicial Settlement, herein respondents bought the subject property from the Bank. On October 12, 1992, a Deed of Sale of Registered Land[6] was executed by the Bank in favor of respondents. Subsequently, Transfer Certificate of Title (TCT) No. T-39,484(a.f.)[7] was issued in the name of respondents. Meanwhile, petitioner continued possession of the subject lot.

On June 27, 1995, respondents filed a Complaint[8] for Recovery of Possession and Damages against petitioner, contending that they had already informed petitioner of the fact that they were the new owners of the disputed property, but the petitioner still refused to surrender possession of the same to them. Respondents claimed that they had exhausted all remedies for the amicable settlement of the case, but to no avail.

On February 7, 1997, the RTC rendered a Decision[9] disposing as follows: WHEREFORE, judgment is hereby rendered, ordering the plaintiffs to execute a Deed of Sale in favor of the defendant, the one-third share of the property in question, presently possessed by him, and described in the deed of partition, as follows: A one-third portion of Transfer Certificate of Title No. T-39,484 (a.f.), formerly Original Certificate of Title No. P-788, now in the name of Saturnino Balus and Leonarda B. Vda. de Calunod, situated at Lagundang, Bunawan, Iligan City, bounded on the North by Lot 5122; East by shares of Saturnino Balus and Leonarda Balus-Calunod; South by Lot 4649, Dodiongan River; West by Lot 4661, consisting of 10,246 square meters, including improvements thereon. and dismissing all other claims of the parties.

The amount of P6,733.33 consigned by the defendant with the Clerk of Court is hereby ordered delivered to the plaintiffs, as purchase price of the one-third portion of the land in question. Plaintiffs are ordered to pay the costs. SO ORDERED.[10]

The RTC held that the right of petitioner to purchase from the respondents his share in the disputed property was recognized by the provisions of the Extrajudicial Settlement of Estate, which the parties had executed before the respondents bought the subject lot from the Bank.

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

On May 31, 2005, the CA promulgated the presently assailed Decision, reversing and setting aside the Decision of the RTC and ordering petitioner to immediately surrender possession of the subject property to the respondents. The CA ruled that when petitioner and respondents did not redeem the subject property within the redemption period and allowed the consolidation of ownership and the issuance of a new title in the name of the Bank, their co-ownership was extinguished.

Hence, the instant petition raising a sole issue, to wit: WHETHER OR NOT CO-OWNERSHIP AMONG THE PETITIONER AND THE RESPONDENTS OVER THE PROPERTY PERSISTED/CONTINUED TO EXIST (EVEN AFTER THE TRANSFER OF TITLE TO THE BANK) BY VIRTUE OF THE PARTIES' AGREEMENT PRIOR TO THE REPURCHASE THEREOF BY THE RESPONDENTS; THUS, WARRANTING THE PETITIONER'S ACT OF ENFORCING THE AGREEMENT BY REIMBURSING THE RESPONDENTS OF HIS (PETITIONER'S) JUST SHARE OF THE REPURCHASE PRICE.[11] The main issue raised by petitioner is whether co-ownership by him and respondents over the subject property persisted even after the lot was purchased by the Bank and title thereto transferred to its name, and even after it was eventually bought back by the respondents from the Bank.

Petitioner insists that despite respondents' full knowledge of the fact that the title over the disputed property was already in the name of the Bank, they still proceeded to execute the subject Extrajudicial Settlement, having in mind the intention of purchasing back the property together with petitioner and of continuing their co-ownership thereof.

Petitioner posits that the subject Extrajudicial Settlement is, in and by itself, a contract between him and respondents, because it contains a provision whereby the parties agreed to continue their co-ownership of the subject property by redeeming or repurchasing the same from the Bank. This agreement, petitioner contends, is the law between the parties and, as such, binds the respondents. As a result, petitioner asserts that respondents' act of buying the disputed property from the Bank without notifying him inures to his benefit as to give him the right to claim his rightful portion of the property, comprising 1/3 thereof, by reimbursing respondents the equivalent 1/3 of the sum they paid to the Bank.

The Court is not persuaded.

Petitioner and respondents are arguing on the wrong premise that, at the time of the execution of the Extrajudicial Settlement, the subject property formed part of the estate of their deceased father to which they may lay claim as his heirs.

At the outset, it bears to emphasize that there is no dispute with respect to the fact that the subject property was exclusively owned by petitioner and respondents' father, Rufo, at the time that it was mortgaged in 1979. This was stipulated by the parties during the hearing conducted by the trial court on October 28, 1996.[12] Evidence shows that a Definite Deed of Sale[13] was issued in favor of the Bank on January 25, 1984, after the period of redemption expired. There is neither any dispute that a new title was issued in the Bank's name before Rufo died on July 6, 1984. Hence, there is no question that the Bank acquired exclusive ownership of the contested lot during the lifetime of Rufo.

The rights to a person's succession are transmitted from the moment of his death. [14] In addition, the inheritance of a person consists of the property and transmissible rights and obligations existing at the time of his death, as well as those which have accrued thereto since the opening of the succession.[15] In the present case, since Rufo lost ownership of the subject property during his lifetime, it only follows that at the time of his death, the disputed parcel of land no longer formed part of his estate to which his heirs may lay claim. Stated differently, petitioner and respondents never inherited the subject lot from their father.

Petitioner and respondents, therefore, were wrong in assuming that they became co-owners of the subject lot. Thus, any issue arising from the supposed right of petitioner as co-owner of the contested parcel of land is negated by the fact that, in the eyes of the law, the disputed lot did not pass into the hands of petitioner and respondents as compulsory heirs of Rufo at any given point in time.

The foregoing notwithstanding, the Court finds a necessity for a complete determination of the issues raised in the instant case to look into petitioner's argument that the Extrajudicial Settlement is an independent contract which gives him the right to enforce his right to claim a portion of the disputed lot bought by respondents.

It is true that under Article 1315 of the Civil Code of the Philippines, contracts are perfected by mere consent; and from that moment, the parties are bound not only to the fulfillment of what has been expressly stipulated but also to all the consequences which, according to their nature, may be in keeping with good faith, usage and law.

Article 1306 of the same Code also provides that the contracting parties may establish such stipulations, clauses, terms and conditions as they may deem convenient, provided these are not contrary to law, morals, good customs, public order or public policy.

In the present case, however, there is nothing in the subject Extrajudicial Settlement to indicate any express stipulation for petitioner and respondents to continue with their supposed co-ownership of the contested lot.

On the contrary, a plain reading of the provisions of the Extrajudicial Settlement would not, in any way, support petitioner's contention that it was his and his sibling's intention to buy the subject property from the Bank and continue what they believed to be co-ownership thereof. It is a cardinal rule in the interpretation of contracts that the intention of the parties shall be accorded primordial consideration. [16] It is the duty of the courts to place a practical and realistic construction upon it, giving due consideration to the context in which it is negotiated and the purpose which it is intended to serve.[17] Such intention is determined from the express terms of their agreement, as well as their contemporaneous and subsequent acts.[18] Absurd and illogical interpretations should also be avoided.[19]

For petitioner to claim that the Extrajudicial Settlement is an agreement between him and his siblings to continue what they thought was their ownership of the subject property, even after the same had been bought by the Bank, is stretching the interpretation of the said Extrajudicial Settlement too far.

In the first place, as earlier discussed, there is no co-ownership to talk about and no property to partition, as the disputed lot never formed part of the estate of their deceased father.

Moreover, petitioner's asseveration of his and respondents' intention of continuing with their supposed co-ownership is negated by no less than his assertions in the present petition that on several occasions he had the chance to purchase the subject property back, but he refused to do so. In fact, he claims that after the Bank acquired the disputed lot, it offered to re-sell the same to him but he ignored such offer. How then can petitioner now claim that it was also his intention to purchase the subject property from the Bank, when he admitted that he refused the Bank's offer to re-sell the subject property to him?

In addition, it appears from the recitals in the Extrajudicial Settlement that, at the time of the execution thereof, the parties were not yet aware that the subject property was already exclusively owned by the Bank. Nonetheless, the lack of knowledge on the part of petitioner and respondents that the mortgage was already foreclosed and title to the property was already transferred to the Bank does not give them the right or the authority to unilaterally declare themselves as co-owners of the disputed property; otherwise, the disposition of the case would be made to depend on the belief and conviction of the party-litigants and not on the evidence adduced and the law and jurisprudence applicable thereto.

Furthermore, petitioner's contention that he and his siblings intended to continue their supposed co-ownership of the subject property contradicts the provisions of the subject Extrajudicial Settlement where they clearly manifested their intention of having the subject property divided or partitioned by assigning to each of the petitioner and respondents a specific 1/3 portion of the same. Partition calls for the segregation and conveyance of a determinate portion of the property owned in common. It seeks a severance of the individual interests of each co-owner, vesting in each of them a sole estate in a specific property and giving each one a right to enjoy his estate without supervision or interference from the other.[20] In other words, the purpose of partition is to put an end to co-ownership,[21] an objective which negates petitioner's claims in the present case.

WHEREFORE, the instant petition is DENIED. The assailed Decision of the Court of Appeals, dated May 31, 2005 in CA-G.R. CV No. 58041, is AFFIRMED. SO ORDERED. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. 154645 July 13, 2004

MILAGROS JOAQUINO a.k.a. MILAGROS J. REYES, petitioner, vs. LOURDES REYES, MERCEDES, MANUEL, MIRIAM and RODOLFO JR. -- all surnamed REYES, respondents.

DECISION

PANGANIBAN, J.: Though registered in the paramours name, property acquired with the salaries and earnings of a husband belongs to his conjug al partnership with the legal spouse. The filiation of the paramours children must be settled in a probate or special proceeding instituted for the purpose, not in an action for recovery of property. The Case Before the Court is a Petition for Review1 under Rule 45 of the Rules of Court, seeking to nullify the February 4, 2002 Decision2 and the August 14, 2002 Resolution3 of the Court of Appeals (CA) in CA-GR CV No. 45883. The CA disposed as follows: "WHEREFORE, premises considered, the appeal is hereby partially DENIED and the Decision dated May 30, 1994, of the Regional Trial Court of Pasay City, Branch 111 in Civil Case No. 9722-P is MODIFIED to read, as follows: "WHEREFORE, judgment is hereby rendered in favor of plaintiffs and against the defendant as follows: a. Declaring the house and lot registered under Transfer Certificate of Title No. 90293 (26627-A) of the Registry of Deeds of Metro Manila, District IV as conjugal partnership property of the late Spouses Rodolfo and Lourdes Reyes; b. Ordering the *petitioner+ to surrender possession of said subject property, pursuant to the applicable law on succession, to the respective estates of the late Rodolfo Reyes and Lourdes Reyes and to pay a reasonable rental of P10,000.00 a month, to the same juridical entities, upon their failure to do so until possession of the property is delivered; and c. To pay *respondents+ attorneys fees in the sum of P20,000.00 and to pay the costs."4 The questioned Resolution, on the other hand, denied petitioners Motion for Reconsideration. The Facts

The CA narrated the facts as follows: "[Respondents] filed a Complaint for reconveyance and damages, dated January 23, 1982, before the Court of First Instance of Rizal, containing the following allegations: x x x The complaint alleges that [respondent] Lourdes P. Reyes is the widow of Rodolfo A. Reyes who died on September 12, 1981; that [respondents] Mercedes, Manuel, Miriam and Rodolfo, Jr. are the legitimate children of [respondent] Lourdes P. Reyes and the deceased Rodolfo A. Reyes; that for years before his death, Rodolfo A. Reyes had illicit relations with [petitioner] Milagros B. Joaquino; that before his death, x x x Rodolfo A. Reyes was Vice President and Comptroller of Warner Barnes and Company with an income of P15,000.00 a month and, after retirement on September 30, 1980, received from said company benefits and emoluments in the amount of P315,0[1]1.79; that [respondent] wife was not the recipient of any portion of the said amount. The complaint further alleges that on July 12, 1979, a [D]eed of [S]ale of a property consisting of a house and lot at BF Homes, Paraaque, Metro Manila was executed by the spouses Ramiro Golez and Corazon Golez in favor of [petitioner] Milagros B. Joaquino for which Transfer Certificate of Title No. 90293 of the Register of Deeds of Metro Manila, District IV was issued in the name of [petitioner] Milagros B. Joaquino; that the funds used to purchase this property were conjugal funds and earnings of the deceased Rodolfo A. Reyes as executive of Warner Barnes and Company as [petitioner] Joaquino was without the means to pay for the same; that [petitioner] executed a Special Power of Attorney in favor of Rodolfo A. Reyes to mortgage the property to Commonwealth Insurance Corporation in order to pay the balance of the purchase price; that said Rodolfo A. Reyes executed a mortgage in favor of Commonwealth Insurance Corporation for P140,000.00 and to guaranty payment thereof, he secured a life insurance [policy] with Philam Life Insurance Corporation for the said amount, assigning the proceeds thereof to Commonwealth Insurance Corporation; that the monthly amortizations of the mortgage were paid by said Rodolfo A. Reyes before his death and at the time of his death, the outstanding balance of P110,000.00 was to be paid out of his Philam Life Insurance [p]olicy. The complaint finally alleges that the deceased had two cars in *petitioners+ possession and that the real and personal properties in *petitioners+ possession are conjugal partnership propert[ies] of the spouses Lourdes P. Reyes and Rodolfo A. Reyes and one-half belongs exclusively to [respondent] Lourdes P. Reyes and the other half to the estate of Rodolfo A. Reyes to be apportioned among the [other respondents] as his forced heirs. [Respondents] therefore, pray that the property covered by T.C.T. No. 90293 be declared conjugal property of the spouses Lourdes P. Reyes and Rodolfo A. Reyes and that *petitioner+ be ordered to reconvey the property in *respondents+ favor; that the two cars in *petitioners+ possession be delivered to *respondents+ and that *petitioner+ be made to pay actual, compensatory and moral damages to *respondents+ as well as attorneys fees. xxx xxx xxx

"[Petitioner] eventually filed her Answer, dated August 1, 1982, the allegations of which have been summarized by the trial court in the following manner: In her Answer, *petitioner+ Milagros B. Joaquino alleges that she purchased the real property in question with her ow n exclusive funds and it was only for convenience that the late Rodolfo Reyes facilitated the mortgage over the same; that although the late Rodolfo Reyes paid the monthly amortization of the mortgage as attorney-in-fact of [petitioner], the money came exclusively from [her]. *Petitioner+ further alleges in her answer, by way of special and affirmative defenses, that during all the nineteen (19) years that [she] lived with Rodolfo Reyes from 1962 continuously up to September 12, 1981 when the latter died, [petitioner] never had knowledge whatsoever that he was married to someone else, much less to [respondent] Lourdes P. Reyes; that [petitioner] was never the beneficiary of the emoluments or other pecuniary benefits of the late Rodolfo Reyes during his lifetime or after his death because [she] had the financial capacity to support herself and her children begotten with the late Rodolfo Reyes. *Petitioner+ prays for a judgment dismissing *respondents+ complaint and for the latter to pay unto [petitioner] moral and exemplary damages in such amounts as may be determined during the trial, including atto*r+neys fees and the costs of the suit. x x x. xxx "On February 2, 1993, [respondent] Lourdes Reyes died. "Subsequently, the trial court granted the complaint based on the following factual findings: xxx xxx

Lourdes Reyes was legally married to Rodolfo Reyes on January 3, 1947 in Manila. They have four children, namely: Mercedes, Manuel, Miriam and Rodolfo Jr., all surnamed Reyes and co-[respondents] in this case. Rodolfo Reyes died on September 12, 1981. At the time of his death, Rodolfo Reyes was living with his common-law wife, Milagros Joaquino, x x x with whom she begot three (3) children namely: Jose Romillo, Imelda May and Charina, all surnamed Reyes. During his lifetime, Rodolfo Reyes worked with Marsman and Company and later transferred to Warner Barnes & Co., where he assumed the position of Vice-President [Comptroller] until he retired on September 30, 1980. His monthly salary at Warner Barnes & Co. was P15,000.00 x x x and upon his separation or retirement from said company, Rodolfo Reyes received a lump sum of P315,011.79 in full payment and settlement of his separation and retirement benefits. During the common-law relationship of Rodolfo Reyes and [petitioner] Milagros Joaquino and while living together, they decided to buy the house and lot situated at No. 12 Baghdad Street, Phase 3, BF Homes, Paraaque, Metro Manila. A Deed of Absolute Sale dated July 12, 1979 was executed in favor of [petitioner] Milagros Joaquino and Transfer Certificate of Title No. S-90293 covering the said property was issued in the name of [petitioner only] on July 20, 1979. To secure the finances with which to pay the purchase price of the property in the amount ofP140,000.00, [petitioner] executed on July 20, 1979, a Special Power of Attorney in favor of Rodolfo A. Reyes for the latter, as attorney-in-fact, to secure a loan from the Commonwealth Insurance Company. An application for mortgage loan was filed by Rodolfo Reyes with the Commonwealth Insurance Company and a Real Estate Mortgage Contract was executed as collateral to the mortgage loan. The loan was payable in ten (10) years with a monthly amortization of P1,166.67. The monthly amortizations were paid by Rodolfo Reyes and after his death, the balance of P109,797.64 was paid in full to the Commonwealth Insurance by the Philam Life Insurance Co. as insurer of the deceased Rodolfo A. Reyes."5 On appeal to the CA, petitioner questioned the following findings of the trial court: 1) that the house and lot had been paid in full from the proceeds of the loan that Rodolfo Reyes obtained from the Commonwealth Insurance Company; 2) that his salaries and earnings, which were his and Lourdes conjugal funds, paid for the loan and, hence, the disputed property was conjugal; and 3) that petitioners illegitimate children, not having been recognized or acknowledged by him in any of the ways provided by law, acquired no successional rights to his estate. Ruling of the Court of Appeals Affirming the RTC, the CA held that the property had been paid out of the conjugal funds of Rodolfo and Lourdes because the monthly amortizations for the loan, as well as the premiums for the life insurance policy that paid for the balance thereof, came from his salaries and earnings. Like the trial court, it found no sufficient proof that petitioner was financially capable of buying the disputed property, or that she had actually contributed her own exclusive funds to pay for it. Hence, it ordered her to surrender possession of the property to the respective estates of the spouses. The appellate court, however, held that the trial court should not have resolved the issue of the filiation and the successional rights of petitioners children. Such issues, it said, were not properly cognizable in an ordinary civil action for reconveyance and damages and were better ventilated in a probate or special proceeding instituted for the purpose. Hence, this Petition.6 Issues Petitioner submits the following issues for the Courts consideration: "I. Whether or not it has been indubitably established in a court of law and trier of facts, the Regional Trial Court, that petitioners three [3] illegitimate children are x x x indeed the children of the late Rodolfo Reyes. "II. Whether or not it is legally permissible for [respondents] to make a mockery of the law by denying [the] filiations of their [two] 2 illegitimate sisters and one [1] illegitimate brother when in fact the very complaint filed by their mother, the lawful wife, Lourdes[,] shows that her husband Rodolfo had illicit relations with the petitioner Milagros and had lived with her in a house and lot at Baghdad Street. "III.

Whether or not the fact that the Court of Appeals made a finding that the house and lot at Baghdad Street are conjugal property of lawfully wedded Rodolfo and Lourdes including the insurance proceeds which was used to pay the final bill for the house and lot, this will prevail over Articles 19 and 21 of the Civil Code. "IV. Whether or not the Supreme Court should enforce the rule that the parties to a lawsuit should only tell the truth at the trial and in [their] pleadings x x x. "V. Whether or not the legitimate children of the late Rodolfo Reyes should respect their fathers desire that his illegitimate children should have a home or a roof over their heads in consonance with his duty to love, care and provide for his children even after his death."7 The issues boil down to the following: 1) the nature of the house and lot on Baghdad Street (BF Homes Paraaque, Metro Manila); and 2) the propriety of ruling on the filiation and the successional rights of petitioners children. The Courts Ruling The Petition is devoid of merit. First Issue: The Conjugal Nature of the Disputed Property Before tackling the merits, we must first point out some undisputed facts and guiding principles. As to the facts, it is undisputed that the deceased Rodolfo Reyes was legally married to Respondent Lourdes Reyes on January 3, 1947.8 It is also admitted that for 19 years or so, and while their marriage was subsisting, he was actually living with petitioner. It was during this time, in 1979, that the disputed house and lot was purchased and registered in petitioners name. Plainly, therefore, the applicable law is the Civil Code of the Philippines. Under Article 145 thereof, a conjugal partnership of gains (CPG) is created upon marriage9 and lasts until the legal union is dissolved by death, annulment, legal separation or judicial separation of property.10 Conjugal properties are by law owned in common by the husband and wife.11 As to what constitutes such properties are laid out in Article 153 of the Code, which we quote: "(1) That which is acquired by onerous title during the marriage at the expense of the common fund, whether the acquisition be for the partnership, or for only one of the spouses; (2) That which is obtained by the industry, or work, or as salary of the spouses, or of either of them; (3) The fruits, rents or interests received or due during the marriage, coming from the common property or from the exclusive property of each spouse." Moreover, under Article 160 of the Code, all properties of the marriage, unless proven to pertain to the husband or the wife exclusively, are presumed to belong to the CPG. For the rebuttable presumption to arise, however, the properties must first be proven to have been acquired during the existence of the marriage.12 The law places the burden of proof13 on the plaintiffs (respondents herein) to establish their claim by a preponderance of evidence14 -- evidence that has greater weight or is more convincing than that which is offered to oppose it.15 On the other hand, Article 14416 of the Civil Code mandates a co-ownership between a man and a woman who are living together but are not legally married. Prevailing jurisprudence holds, though, that for Article 144 to apply, the couple must not be incapacitated to contract marriage.17 It has been held that the Article is inapplicable to common-law relations amounting to adultery or concubinage, as in this case. The reason therefor is the absurdity of creating a co-ownership in cases in which there exists a prior conjugal partnership between the man and his lawful wife.18 In default of Article 144 of the Civil Code, Article 148 of the Family Code has been applied.19 The latter Article provides:

"Art. 148. In cases of cohabitation not falling under the preceding Article, only the properties acquired by both of the parties through their actual joint contribution of money, property, or industry shall be owned by them in common in proportion to their respective contributions. In the absence of proof to the contrary, their contributions and corresponding shares are presumed to be equal. The same rule and presumption shall apply to joint deposits of money and evidence of credit. "If one of the parties is validly married to another, his or her share in the co-ownership shall accrue to the absolute community or conjugal partnership existing in such valid marriage. If the party which acted in bad faith is not validly married to another, his or her share shall be forfeited in the manner provided in the last paragraph of the preceding Article. "The foregoing rules on forfeiture shall likewise apply even if both parties are in bad faith." Thus, when a common-law couple have a legal impediment to marriage, only the property acquired by them -- through their actual joint contribution of money, property or industry -- shall be owned by them in common and in proportion to their respective contributions. With these facts and principles firmly settled, we now proceed to the merits of the first issue. The present controversy hinges on the source of the funds paid for the house and lot in question. Upon the resolution of this issue depends the determination of whether the property is conjugal (owned by Rodolfo and Lourdes) or exclusive (owned by Milagros) or co-owned by Rodolfo and Milagros. The above issue, which is clearly factual, has been passed upon by both the trial and the appellate courts, with similar results in favor of respondents. Such finding is generally conclusive; it is not the function of this Court to review questions of fact. 20 Moreover, it is well-settled that only errors of law and not of facts are reviewable by this Court in cases brought to it from the Court of Appeals or under Rule 45 of the Rules of Court.21 This principle applies with greater force herein, because the CA came up with the same factual findings as those of the RTC. Even then, heeding petitioners plea, we have gone through the pleadings and the evidence presented by the parties to find out if there is any circumstance that might warrant a reversal of the factual findings. Unfortunately for petitioner, we have found none. Indeed, a preponderance of evidence has duly established that the disputed house and lot was paid by Rodolfo Reyes, using his salaries and earnings. By substantial evidence, respondents showed the following facts: 1) that Rodolfo was gainfully employed as comptroller at Warner, Barnes and Co., Inc. until his retirement on September 30, 1980, upon which he received a sizeable retirement package;22 2) that at exactly the same time the property was allegedly purchased,23 he applied for a mortgage loan24 -- intended for "housing"25 -- from the Commonwealth Insurance Company; 3) that he secured the loan with a real estate mortgage26 over the same property; 4) that he paid the monthly amortizations for the loan27 as well as the semi-annual premiums28 for a Philam Life insurance policy, which he was required to take as additional security; and 5) that with the proceeds of his life insurance policy, the balance of the loan was paid to Commonwealth by Philam Life Insurance Company.29 All told, respondents have shown that the property was bought during the marriage of Rodolfo and Lourdes, a fact that gives rise to the presumption that it is conjugal. More important, they have established that the proceeds of the loan obtained by Rodolfo were used to pay for the property; and that the loan was, in turn, paid from his salaries and earnings, which were conjugal funds under the Civil Code. In contrast, petitioner has failed to substantiate either of her claims -- that she was financially capable of buying the house and lot, or that she actually contributed to the payments therefor. Indeed, it does not appear that she was gainfully employed at any time after 196130 when the property was purchased. Hearsay are the Affidavits31 and the undated Certification32 she had presented to prove that she borrowed money from her siblings and had earnings from a jewelry business. Respondents had not been given any opportunity to cross-examine the affiants, who had not testified on these matters. Based on the rules of evidence, the Affidavits and the Certification have to be rejected. In fact, they have no probative value.33 The CA was also correct in disregarding petitioners allegation that part of the purchase money had come from the sale of a drugstore34 four years earlier. Under the circumstances, therefore, the purchase and the subsequent registration of the realty in petitioners name was tantamount to a donation by Rodolfo to Milagros. By express provision of Article 739(1) of the Civil Code, such donation was void, because it was "made between persons who were guilty of adultery or concubinage at the time of the donation." The prohibition against donations between spouses35 must likewise apply to donations between persons living together in illicit relations; otherwise, the latter would be better situated than the former.36 Article 87 of the Family Code now expressly provides thus:

"Art. 87. Every donation or grant of gratuitous advantage, direct or indirect, between the spouses during the marriage shall be void, except moderate gifts which the spouses may give each other on the occasion of any family rejoicing. The prohibition shall also apply to persons living together as husband and wife without a valid marriage." (Italics supplied) Regarding the registration of the property in petitioners name, it is enough to stress that a certificate of title under the Torrens system aims to protect dominion; it cannot be used as an instrument for the deprivation of ownership.37 It has been held that property is conjugal if acquired in a common-law relationship during the subsistence of a preexisting legal marriage, even if it is titled in the name of the common-law wife.38 In this case, a constructive trust is deemed created under Article 1456 of the Civil Code, which we quote: "Art. 1456. If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes." The registration of the property in petitioners name was clearly designed to deprive Rodolfos legal spouse and com pulsory heirs of ownership. By operation of law, petitioner is deemed to hold the property in trust for them. Therefore, she cannot rely on the registration in repudiation of the trust, for this case is a well-known exception to the principle of conclusiveness of a certificate of title.39 Second Issue: Ruling on Illegitimate Filiation Not Proper It is petitioners alternative submission that her children are entitled to a share in the disputed property, because they were voluntarily acknowledged by Rodolfo as his children. Claiming that the issue of her childrens illegitimate filiation was duly established in the trial court, she faults the CA for ruling that the issue was improper in the instant case. Her position is untenable. Indeed, it has been ruled that matters relating to the rights of filiation and heirship must be ventilated in the proper probate court in a special proceeding instituted precisely for the purpose of determining such rights.40 Sustaining the appellate court in Agapay v. Palang,41 this Court held that the status of an illegitimate child who claimed to be an heir to a decedents estate could not be adjudicated in an ordinary civil action which, as in this case, was for the recovery of property. Considerations of due process should have likewise deterred the RTC from ruling on the status of petitioners children. It is evident from the pleadings of the parties that this issue was not presented in either the original42 or the Supplemental Complaint43 for reconveyance of property and damages; that it was not pleaded and specifically prayed for by petitioner in her Answers44 thereto; and that it was not traversed by respondents Reply to the Supplemental Complaint.45 Neither did petitioners Memorandum,46 which was submitted to the trial court, raise and discuss this issue. In view thereof, the illegitimate filiation of her children could not have been duly established by the proceedings as required by Article 887 of the Civil Code.47 In view of the foregoing reasons, the CA cannot be faulted for tackling the propriety of the RTCs ruling on the status of th e children of petitioner, though she did not assign this matter as an error. The general rule -- that only errors assigned may be passed upon by an appellate court admits of exceptions. Even unassigned errors may be taken up by such court if the consideration of those errors would be necessary for arriving at a just decision or for serving the interest of justice.48 The invocation by petitioner of Articles 1949 and 2150 of the Civil Code is also unmeritorious. Clearly, the illegitimate filiation of her children was not the subject of inquiry and was in fact not duly established in this case. Thus, she could not have shown that respondents had acted in bad faith or with intent to prejudice her children. These are conditions necessary to show that an act constitutes an abuse of rights under Article 19.51 She also failed to show that respondents -- in violation of the provisions of Article 21 of the Civil Code -- had acted in a manner contrary to morals, good customs or public policy. Moreover, we note that the issue concerning the applicability of Articles 19 and 21 was not raised by petitioner in the trial court or even in the CA. Hence, she should not be permitted to raise it now. Basic is the rule that parties may not bring up on appeal issues that have not been raised on trial.52 WHEREFORE, the Petition is hereby DENIED, and the assailed Decision and Resolution of the Court of AppealsAFFIRMED. Costs against petitioner. SO ORDERED. SECOND DIVISION

ANITA UNGAB-VALEROSO, joined in by her husband, RUSELO VALEROSO, Petitioners,

G.R. No. 163081 Present: QUISUMBING, J., Chairperson, CARPIO, CARPIO MORALES,* TINGA, and VELASCO, JR., JJ. Promulgated: June 15, 2007

- versus

AMANCIA UNGAB-GRADO, FELIX UNGAB, represented by his son ROSENDO UNGAB, ESPENILA UNGAB-JAICTIN and RUSTICINA UNGAB-TAMALA, Respondents. x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION QUISUMBING, J.:

This petition for review assails both the Decision[1] dated September 19, 2003 of the Court of Appeals in CA-G.R. CV No. 68895 and its Resolution[2] dated March 2, 2004, which denied petitioners motion for reconsideration. The Court of Appeals had affirmed with modification the Decision[3] dated December 20, 1999 of the Regional Trial Court (RTC) of Iligan City, Branch 3, in Civil Case No. 4048.

The antecedent facts, borne by the records, are as follows:

Subject of this case is a 14.3375-hectare land in Binuni, Kolambugan, Lanao (now Binuni, Bacolod, Lanao del Norte) registered in the name of Timoteo Ungab under Original Certificate of Title (OCT) No. (P-41)-1,550.[4] Petitioner Anita Ungab is the only child of Timoteo, now deceased. Respondent Felix Ungab is the brother of Timoteo while the other respondents are the heirs of Timoteos other brothers and sisters, namely Simeona, Eugenia, Lorenzo, Lazaro, and Margarito.

In 1972, the heirs of Ciriaco Ungab filed a complaint docketed as Civil Case No. II-74 in the Court of First Instance (CFI) of Iligan City, Lanao del Norte against the brothers, sisters and heirs of Timoteo for the partition, accounting and reconveyance of the subject land. When the case was called for trial, the parties submitted a written compromise agreement.

On February 15, 1973, the CFI rendered judgment adopting in toto the compromise agreement. The decretal portion reads: WHEREFORE, judgment is hereby rendered as follows: (1) that the plaintiffs will be given an area of 4,779 square meters of the coconut land which is a portion of the titled land in the name of Heirs of Timoteo Ungab, under Original Certificate of Title No. T-41 (should be P-41), Homestead Patent No. V-4777, located at Binoni, Bacolod, Lanao del Norte (formerly Kolambugan, Lanao); (2) that defendants are entitled to an area of 138,596 square meters (13.8596 Has.) from said titled land abovementioned; (3) that the expenses for segregation survey of the 4,779 square meters will be shouldered equally among the nine (9) heirs 3 heirs representing the plaintiffs and the 6 heirs representing the defendants; (4) that the squatters of the above-described titled parcels of land to wit: (a) Dioscoro Buco, (b) Porferio Sugabo, (c) heirs of Severo Buco, (d) Jesus Buco, (e) and others inside the said titled land will be ejected with damages thru Court action, all expenses will be borne equally among the heirs aforementioned, for each recovery; and whatever damages that will be awarded by the court in said ejectment action will be equally divided among the nine sets of heirs, as well as the produce of the income of the squatted area; (5) that meantime that the squatters on the land will not be as yet finally ejected, the 4,779 square meters of the plaintiffs will not as yet be segregated and plaintiffs cannot as yet enjoy the produce, and income thereof, until the squatters will be ejected; and all expenses of the ejectment suits against

the squatters will be borne by Margarito Ungab and his wife, subject to the reimbursement with receipts upon the final ejectment of the squatters by all nine sets of heirs aforementioned; (6) the portion pertaining to Simona Ungab is acknowledged to have been sold under Pacto de Retro for the sum of P3,000.00 more or less (the Pacto de Retro Sale consideration controls) unto Margarito Ungab and wife which should be paid likewise by the nine sets of heirs both plaintiffs and defendants; (8) all other prayers and remedies invoked in the complaint and counter-complaint are hereby denied, and (9) no costs is adjudged in this proceeding. SO ORDERED.[5]

The parties did not have the land partitioned but divided the proceeds of the land in accordance with the decision. However, in December 1996, Anita refused to give respondents their respective shares. Respondents then filed against petitioners Anita and her husband Ruselo Valeroso, a complaint for recovery of possession, partition, enforcement of compromise agreement and damages docketed as Civil Case No. 4048 with the RTC of Iligan City.

During the pre-trial, respondents presented in court the affidavit dated March 13, 1939 of Timoteo acknowledging that he co-owned with his brothers and sisters, Simeona, Eugenia, Lorenzo, Lazaro, Felix and Margarito, a parcel of land with an area of 18.8993 hectares in Binuni, Kolambugan, Lanao under Homestead Application No. 218565.[6] Respondents also presented the Affidavit of Acknowledgment dated August 4, 1960 of Anita Ungab and her mother Aurelia Ungab acknowledging the rights of Simeona, Eugenia, Lorenzo, Lazaro, Felix and Margarito as co-owners of the land.[7]

In their defense, the Spouses Anita and Ruselo claimed that Anita exclusively owns the land as sole heir of Timoteo. They maintained that the decision in Civil Case No. II-74 had become dormant and could no longer be executed. Besides, they aver, Anita was not privy to the compromise agreement, which led to the decision in Civil Case No. II-74.

On December 1999, the RTC held that the compromise agreement bound all the parties thereto including their heirs and assigns, and Timoteos affidavit whose presumption of regularity petitioners failed to overcome, and the compromise agreement created an express trust which has not yet prescribed. The RTC ruled as follows: WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs (herein respondents) and against the defendant, Anita Ungab-Valeroso ordering the latter: 1) To have the property, OCT No. (P-41)-1,550, partitioned for her to retain only one-seventh (1/7) share; another one-seventh (1/7) to Felix Ungab and the remaining 5/7 to the heirs of Simeona, Eugenia, Lorenzo, Lazaro, and Margarito, all surnamed Ungab; To reimburse Amancia Ungab-Grado and Espenila Ungab Jaictin the sum of P24,000.00 for their shares for three (3) years at a rate of P2,000.00 per harvest in every three (3) months; the sum of P24,000.00 for plaintiff Felix Ungab and another P24,000.00 for Rusticina UngabTamala; To pay plaintiffs attorneys fees and appearance fees of P30,000.00.

2)

3)

SO ORDERED.[8]

Petitioners elevated the case to the Court of Appeals, which affirmed the trial courts decision but deleted the award of attorneys fees. It held there is evidence showing that the land under OCT No. (P-41)-1,550 was owned in common by the parties, and that Anita is estopped by her own act of signing the Affidavit of Acknowledgment dated August 4, 1960 from denying the co-ownership.

The dispositive portion of the decision dated September 19, 2003 of the Court of Appeals states: WHEREFORE, premises considered, the decision dated December 20, 1999, of the Regional Trial Court of Iligan City, Twelfth Judicial Region, Branch 3, in Civil Case No. 4048 is herebyAFFIRMED with MODIFICATION as to attorneys fees, the award thereof is deleted. Costs against the appellants. SO ORDERED.[9]

Petitioners moved for reconsideration but it was denied in the Resolution dated March 2, 2004. Petitioners now come before us raising the following issues: I. WHETHER OR NOT RESPONDENTS ARE CO-OWNERS OF THE PARCEL OF LAND COVERED BY OCT No. (P-41)-1,550; II. WHETHER OR NOT RESPONDENTS SUIT FOR PARTITION IN THE COURT BELOW IS LEGALLY PROPER.[10]

The main issue before us is: Did the Court of Appeals commit a reversible error of law which merits review by this Court under Rule 45 of the Rules of Court?

We rule in the negative.

Petitioners point that the property was registered in the name of Timoteo. They assert that by the law of intestate succession, Anita, being the sole heir of Timoteo, is the sole owner of the land. Petitioners maintain that respondents could not base their claim on Timoteos affidavit dated March 13, 1939 because this referred to a different parcel of land. Considering that the description of the property in the OCT and in Timoteos affidavit differed, petitioners maintain that respondents bear the burden of proving that these lots in the affidavit are the same as those under OCT No. (P-41)-1,550. However, according to petitioners, respondents failed to discharge this burden.

Respondents counter that the case is not about succession. They are not claiming as heirs of Timoteo, but as his co-owners. They assert that where one does not have any rightful claim over real property, the Torrens system of registration can confirm or record nothing. They claim that the land was already governed by a state of co-ownership even before the title was issued. According to respondents, this fact is shown by the Affidavit of Acknowledgment signed by Anita herself.

At the outset, we agree that the instant case does not involve successional rights as correctly pointed out by respondents, who are claiming an alleged right of co-ownership existing prior to the issuance of the land title in the name of Timoteo. The threshold issue is whether respondents are truly co-owners of the land.

The records lack evidence sufficiently showing that the land covered by Homestead Application No. 218565 referred to in the Affidavit of Timoteo is the same land covered by OCT No. (P-41)-1,550 which originated from Homestead Patent No. V-4777. The records do not show whether Homestead Application No. 218565 was the one granted in Homestead Patent No. V-4777. The court cannot just fill in the deficiency in the evidence submitted by the concerned parties.

We note, however, that even without the Affidavit of Timoteo, there is still evidence on record proving that the respondents and Timoteo indeed own the land in common. For one, there is the Affidavit of Acknowledgment dated August 4, 1960.

Petitioners contend that respondents cannot use the Affidavit of Acknowledgment signed by Anita and her mother as Anita was misled in signing it. A question involving the due execution of the Affidavit of Acknowledgment would require an inquiry into the appreciation of evidence by the trial court, a matter which this Court cannot do in a petition for review on certiorari under Rule 45. [11] The truth or falsehood of the Affidavit of Acknowledgment is a question of fact, of which this Court cannot take cognizance. [12] Moreover, the Affidavit of Acknowledgment, being a notarized document, enjoys the presumption of regularity.[13] Petitioners mere allegation that Anita was misled by her mother into signing the affidavit could not overcome this presumption.

Petitioners claim that by respondents failure to execute the judgment within the ten -year prescription period, the judgment had prescribed. It could not be used to convey any right. This claim, in our view, is unmeritorious. When the parties started sharing the proceeds of the land, they had in effect partially executed the compromise agreement and the judgment in Civil Case No. II-74. Such partial execution weighs heavily as evidence that they agreed on the co-ownership arrangement. Note also that the judgment did not explicitly order the partition of the land itself, but merely identified the rights to and respective shares of the parties in said land.

Petitioners argue that the co-ownership was already extinguished because the Civil Code provides that an agreement to keep a thing undivided shall not exceed ten years. Indeed, the law limits the term of a co-ownership to ten years, but this term limit may nevertheless be extended.[14] The action to reconvey does not prescribe so long as the property stands in the name of the trustee. To allow prescription would be tantamount to allowing a trustee to acquire title against his principal and true owner.[15]

Moreover, as properly held by the trial and appellate courts, the execution of the Affidavit of Acknowledgment and the compromise agreement established an express trust wherein the respondents, as trustors, reposed their confidence on petitioner Anita and her mother, as trustees, that they will hold the land subject of the co-ownership. There are no particular words required in the creation of an express trust, it being sufficient that a trust is clearly intended.[16] This express trust is shown in the two documents. Express trusts do not prescribe except when the trustee repudiates the trust.[17]

Petitioners contend that an affidavit of acknowledgment is not one of the modes of acquiring ownership recognized under the Civil Code. They cite Acap v. Court of Appeals,[18] where we held that a stranger to succession cannot conclusively claim ownership over a lot on the sole basis of a waiver document which does not cite the elements of any of the derivative modes of acquiring ownership.

But we find that the ruling in Acap is not applicable to this case. In Acap, the claim of a right over the property was based on a declaration of heirship and waiver of rights, and a notice of adverse claim. Therein we held that the declaration of heirship and waiver of rights relates to an abdication of a right in favor of other persons who are co-heirs in the succession. A stranger to a succession cannot conclusively claim ownership over the property on the sole basis thereof. We also held that a notice of adverse claim is nothing but a notice of claim adverse to the registered owner, the validity of which is yet to be established in court. Hence, the declaration of heirship and waiver of rights and a notice of adverse claim did not sufficiently show how a stranger to the succession acquired ownership of the property. In the present case, the Affidavit of Acknowledgment and the compromise agreement were presented not to show how respondents acquired their rights over the property but as proof that their rights therein exist.

WHEREFORE, the petition is DENIED for lack of merit. The Decision dated September 19, 2003 and the Resolution dated March 2, 2004 of the Court of Appeals in CA-G.R. CV No. 68895 are AFFIRMED.

Costs against petitioners.

SO ORDERED. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 171678 December 10, 2008

ROSA J. SALES, EARL RYAN CHENG and EMIL RALPH CHENG, petitioners, vs. WILLIAM BARRO, respondent. DECISION QUISUMBING, J.: For review on certiorari is the Decision1 dated January 3, 2006 of the Court of Appeals in CA-G.R. SP No. 90381, which reversed the Decision2 dated March 10, 2005 of the Regional Trial Court (RTC) of Manila, Branch 39, in Civil Case No. 04-111243. The facts are as follows: This case originated from the ejectment complaint filed by the petitioners against the respondent, his wife, and all persons claiming rights under them before Branch 28 of the Metropolitan Trial Court (MeTC) of Manila. In their complaint,3 the petitioners alleged among others that (1) they are owners of the lot described and embraced in Transfer Certificate of Title (TCT ) No. 2622374 of the Registry of Deeds of the City of Manila; (2) the respondent constructed a shanty thereon without their consent; (3) the respondent and his co-defendants have not been paying any rent to the petitioners for their occupation thereof; (4) the respondent and his co-defendants refused the formal demand made by the petitioners for them to vacate the subject lot; and (5) the Office of the Barangay Captain of Barangay 464, Zone 46, 4th District, Manila issued the necessary Certification to File Action.5 In his answer, the respondent denied the allegations of the complaint, and essentially claimed that (1) his construction of the temporary makeshift house on the lot was tolerated by the petitioners, considering that he acted as the caretaker thereof; and (2) he does not remember receiving any demand letter and summons from the barangay and so he was surprised to know that an ejectment complaint was filed against him.6

In its Decision7 dated September 27, 2004, the MeTC found in favor of the petitioners. It held that the respondent, his wife, and all persons claiming rights under them, being possessors by tolerance, can be validly ejected from the lot at any time and after due notice. It then directed them to vacate the lot, pay P5,000 a month from January 2004 up to such time that the lot is actually turned over to the petitioners, and pay P10,000 as attorneys fees. The respondent appealed to the RTC which affirmed in toto the assailed MeTC decision. Unfazed by the decision of the RTC, the respondent elevated the case to the Court of Appeals. After finding the complaint to be substantially lacking in the requisite allegations that would make out a case either for forcible entry or unlawful detainer,8 the Court of Appeals reversed the RTC decision and accordingly dismissed the petitioners complaint. The dispositive portion of the Court of Appeals decision reads: WHEREFORE, premises considered, we hereby GRANT the petition on the basis of the lower tribunals lack of jurisdiction, and accordingly DISMISS respondents ejectment complaint. SO ORDERED.9 The petitioners moved for reconsideration, but the Court of Appeals denied the motion. Hence, this petition on the following grounds: I. WITH ALL DUE RESPECT, THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN DISMISSING PETITIONERS EJECTMENT COMPLAINT ON THE ALLEGED GROUND THAT THE COMPLAINT FAILED TO STATE THE JURISDICTIONAL FACT OF PRIOR PHYSICAL POSSESSION. II. WITH ALL DUE RESPECT, THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN NOT RULING THAT THE RESPONDENT WAS IN ESTOPPEL FROM QUESTIONING THE JURISDICTION OF THE METROPOLITAN TRIAL COURT ASSUMING, WITHOUT ADMITTING, THAT THE LOWER COURT HAD NO JURISDICTION OVER THE COMPLAINT.10 Simply put, we are asked to resolve: (1) whether the Court of Appeals correctly dismissed the complaint; and (2) whether the respondent was already estopped from questioning the jurisdiction of the MeTC. Anent the first issue, the petitioners argue that the complaint was for unlawful detainer, and hence, there was no need for them to allege prior physical possession of the lot. They further contend that their position that the complaint was for unlawful detainer is supported by the claim of the respondent in his answer that "he made a temporary makeshift structure on the lot to serve as his living place and that the same was tolerated by the petitioners considering that he acted as caretaker of the property."11 For his part, the respondent insists that the Court of Appeals was correct in dismissing the complaint.12 After carefully examining the averments of the petitioners complaint and the character of the reliefs sought therein,13 we hold that the Court of Appeals did not err in finding that the complaint was for forcible entry, and that the Court of Appeals correctly dismissed it. There are two reasons why we could not subscribe to the petitioners submission that their complaint was for unlawful detainer. Firstly, the petitioners own averment in the complaint "that the defendant constructed a shanty in the lot of the plaintiffs without their consent,"14 and the relief asked for by the petitioners that the respondent and his wife "pay the amount of P10,000 a month beginning January 2004 as for reasonable rent of the subject premises,"15 clearly contradict their claim. It must be highlighted that as admitted by the petitioners in their motion for reconsideration16 before the appellate court, and as evidenced by the TCT No. 262237 annexed to the complaint, the petitioners became owners of the property only on January 6, 2004. By averring that the respondent constructed his shanty on the lot without their consent and then praying that the MeTC direct the respondent to pay them rent from January 2004, or from the inception of the respondents occupation of the lot, no other conclusion can be made except that the petitioners had always considered respondents occupat ion of the same to be unlawful from the very beginning. Hence, the complaint can never support a case for unlawful detainer. "It is a settled rule that in order to justify an action for unlawful detainer, the owners permission or tolerance must be present at the beginning of the possession."17 Secondly, the nature of the complaint is neither changed nor dependent upon the allegations and/or defenses made in the answer. As we had previously stated in Caiza v. Court of Appeals,18 "it is axiomatic that what determines the nature of an action as well as which court has jurisdiction over it, are the allegations of the complaint and the character of the relief sought." As correctly found by the Court of Appeals, what the petitioners actually filed was a fatally defective complaint for forcible entry, considering that there was no allegation therein regarding the petitioners prior physical possession of the lot.19 In Tirona v. Alejo, we held that "in actions

for forcible entry, two allegations are mandatory for the municipal trial court to acquire jurisdiction: first, the plaintiff must allege his prior physical possession of the property; and second, he must also allege that he was deprived of his possession by any of the means provided for in Section 1,20 Rule 70 of the Rules of Court, namely, force, intimidation, threats, strategy, and stealth." 21 The petitioners allegation that they are the registered owners of the lot miserably falls short of satisfying the required averm ent of prior physical possession. As we had clarified and stressed in Tirona, "the word possessionas used in forcible entry and unlawful detainer, means nothing more than physical possession, not legal possession in the sense contemplated in civil law."22 Finally, was the respondent already estopped from questioning the jurisdiction of the MeTC to try the petitioners complaint? The petitioners argue that the respondent is already estopped because the respondent failed to assail the jurisdiction of the MeTC at the earliest opportunity and actively participated in the proceedings before it.23 The respondent counters that he could not be held guilty of estoppel because he questioned in his answer and pleadings petitioners allegation that he was served a demand letter. By questioning the veracity of the allegation of the existence of a jurisdictional requirement, he, in effect, questioned the jurisdiction of the MeTC in trying the case. 24 It is well-settled that a courts jurisdiction may be raised at any stage of the proceedings, even on appeal. The reason is that jurisdi ction is conferred by law, and lack of it affects the very authority of the court to take cognizance of and to render judgment on the action.25 The rule remains that estoppel does not confer jurisdiction on a tribunal that has none over the cause of action or subject matter of the case.26 In any event, even if respondent did not raise the issue of jurisdiction, the reviewing court is not precluded from ruling that it has no jurisdiction over the case. In this sense, dismissal for lack of jurisdiction may even be ordered by the court motu proprio.27 WHEREFORE, the instant petition is DENIED for lack of merit. Costs against the petitioners. SO ORDERED. Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 140228 November 19, 2004

FRANCISCO MEDINA, MARIA MEDINA, RAYMUNDO MEDINA, ENRIQUE MEDINA, EDGARDO MEDINA, EVELYN MEDINA, ERNIE MEDINA, ELPIDIO MEDINA, EDWIN MEDINA, ELEONOR MEDINA, TEOFILO MEDINA, JR., EUGENE MEDINA, ELVIRA MEDINA, ANATALIO MEDINA, MARIO MEDINA, CORNELIO MEDINA, ERNESTO MEDINA, IGNACIO CONSTANTINO, SANTOS CONSTANTINO, HERMOGENES CONSTANTINO, FLORENCIO CONSTANTINO, VIRGINIA CONSTANTINO, MARCELO GEREMILLO, ROSILA GEREMILLO, ERNESTO GEREMILLO, MERCEDES GEREMILLO, MELENCIO GEREMILLO, BALBINO MEDINA, CRISANTA MEDINA, YOLANDA MEDINA, LYDIA MEDINA, RENATO MEDINA, EUFEMIA MEDINA, VIRGILIO MEDINA, SONIA MEDINA, LUZVIMINDA MEDINA, CRISPIN MEDINA, REMIGIO M. RODOLFO, MILAGROS M. RODOLFO, NIDA M. RODOLFO, BELEN M. RODOLFO, MANUEL M. RODOLFO, ALFREDO M. RODOLFO, SALLY AREVALO, ELMER AREVALO, CELSO AREVALO, JR., VINCENT AREVALO, NENE AREVALO, THE HEIRS OF NAZARIA CRUZ and SANTOS AREVALO, petitioners, vs. GREENFIELD DEVELOPMENT CORPORATION, respondent.

DECISION

AUSTRIA-MARTINEZ, J.: The propriety of the writ of preliminary injunction issued by the Regional Trial Court of Muntinlupa City (Branch 276) in Civil Case No. 98-233 is the sole issue in this petition for review on certiorari, assailing the decision of the Court of Appeals nullifying said writ. Petitioners are the grandchildren of Pedro Medina from two marriages. In his first marriage to Isadora San Jose, Pedro sired three children: Rafael, Rita and Remegia; in his second marriage, this time to Natalia Mullet, Pedro had five: Cornelio, Brigida, Balbino, Crisanta and Rosila. Except for Balbino and Crisanta, all of Pedro's children likewise bore children, the petitioners in this case.1

On June 5, 1962, Pedro, his brother Alberto Medina and his niece Nazaria Cruz (Alberto's daughter) executed a notarized Contract to Sell in favor of respondent Greenfield Development Corporation over a parcel of land located in Muntinlupa City, then in the Province of Rizal, covered by Transfer Certificate of Title (TCT) No. 100177 (Lot 90-A) and measuring 17,121 square meters.2 A notarized Deed of Sale covering said property was subsequently entered into on June 27, 1962, in favor of respondent, and this time signed by Pedro, Cornelio, Brigida, Balbino, Gregoria, Crisanta, Rosila, and Alberto, all surnamed Medina, and Nazaria Cruz, as vendors.3 Thereafter, a notarized Deed of Absolute Sale with Mortgage was executed on September 4, 1964 in favor of respondent over Lot 90-B covered by TCT No. 100178, measuring 16,291 square meters. Signing as vendors were Pedro, Cornelio, Brigida, Balbino, Gregoria, Crisanta, Rosila, and Alberto, all surnamed Medina, and Nazaria Cruz.4 By virtue of these sales, respondent was able to register in its name the title to the two parcels of land with TCT No. 100578 covering Lot 90-A and TCT No. 133444 covering Lot 90-B. These properties were consolidated with other lots and were eventually registered on July 19, 1995, in the name of respondent under TCT Nos. 202295, 202296 and 202297.5 On November 6, 1998, petitioners instituted Civil Case No. 98-233, an action for annulment of titles and deeds, reconveyance, damages with preliminary injunction and restraining order, against respondent and the Register of Deeds of Makati.6 Included in the complaint are the heirs of Nazaria Cruz, as unwilling co-plaintiffs.7 Petitioners allege in their complaint that they are co-owners of these two parcels of land. While the titles were registered in the names of Pedro, Alberto, Cornelio, Brigida and Gregoria, all surnamed Medina, they alleged that they were recognized as co-owners thereof. In support of their case, petitioners maintain that the deeds of sale on these properties were simulated and fictitious, and the signatures of the vendors therein were fake. Despite the transfer of the title to respondent's name, they remained in possession thereof and in fact, their caretaker, a certain Santos Arevalo and his family still reside on a portion of the property. On July 13, 1998, petitioners caused an adverse claim to be annotated on the titles. After discovering the annotation, respondent constructed a fence on the property and posted security personnel, barring their ingress and egress. Thus, petitioners sought, among others, the issuance of a temporary restraining order and a writ of preliminary injunction enjoining respondent and its agents and representatives from preventing petitioners to exercise their rights over the properties.8 Respondent denied the allegations, stating that petitioners have no valid claim on the properties as it is already titled in its name by virtue of the public documents executed by their predecessors. As counterclaim, respondent alleged that Santos Arevalo is not petitioners' caretaker and it was them who employed him as caretaker.9 On January 18, 1999, the trial court issued its resolution granting petitioners' prayer for injunctive relief. The dispositive portion of the resolution reads: Let therefore an injunction issue, enjoining and directing defendant GREENFIELD DEVELOPMENT CORPORATION, its security guards, agents, representatives, and all those claiming rights under it, from preventing plaintiffs and their caretaker Santos Arevalo, from entering and going out of the subject premises, and from preventing them to exercise their property rights, upon payment of a bond in the amount of P100,000.00. It is SO ORDERED.10 Respondent filed a special civil action for certiorari and prohibition with the Court of Appeals, docketed as CA-G.R. SP No. 52015. On July 16, 1999, the Court of Appeals11 rendered its decision nullifying the trial court's resolution, the dispositive portion of which provides: IN THE (sic) LIGHT OF ALL THE FOREGOING, the petition is hereby GRANTED. The assailed Resolution of the Public Respondent Judge, dated January 18, 1999, in Civil Case No. 98-233 is hereby NULLIFIED. SO ORDERED.12 Petitioners now seek recourse with this Court, alleging the following grounds: I THE COURT OF APPEALS ERRED IN RELYING HEAVILY ON THE ANTECEDENT FACTS NARRATED IN THE PETITION OF THE RESPONDENT IN CA-G.R. SP NO. 52015 AND ADOPTED THE SAME AS ITS OWN WITHOUT EVIDENTIARY SUPPORT II

THE COURT OF APPEALS COMMITTED A GRAVE ERROR IN UPHOLDING THE VALIDITY OF THE DEEDS OF SALE IN FAVOR OF THE RESPONDENT AND IN HOLDING THAT RESPONDENT'S TRANSFER CERTIFICATES OF TITLE ARE VALID DESPITE THE FACT THAT THE SAID ISSUES ARE YET TO BE TRIED III THE COURT OF APPEALS ERRED IN PRESUMING THAT NOTARIZED DOCUMENTS ARE VALID AND THAT RESPONDENT'S TORRENS TITLES ARE INDEFEASIBLE ON THE WRONG NOTION THAT THE RESPONDENT WAS PRESUMED INNOCENT PERSON IV THE COURT OF APPEALS COMMITTED A MISTAKE IN HOLDING THAT RESPONDENT WAS IN CONSTRUCTIVE POSSESSION OF THE SUBJECT PREMISES NOTWITHSTANDING THAT PETITIONERS ARE IN ACTUAL POSSESSION THEREOF V THE COURT OF APPEALS ERRED IN FINDING THAT PETITIONERS' RIGHT TO IMPUGN RESPONDENT'S TITLES HAVE (SIC) PRESCRIBED SINCE AN ACTION OR DEFENSE BASED ON THE INEXISTENCE OF A CONTRACT DOES NOT PRESCRIBE 13 As stated at the outset, the sole issue in this case is whether or not the trial court erred in granting petitioners' prayer for injunctive relief. This Court's resolution will revolve only on the propriety of the injunction. Any reference to the validity or invalidity of the transfers and the titles is merely preliminary, as the matter should be resolved after trial on the merits. It was the trial court's opinion that petitioners are entitled to the injunction for the following reasons: The Court however holds suspect the acquisition by Greenfield Development Corporation of the two parcels. Lot 90-A covered by Transfer Certificate of Title No. 100177, was promised to be sold to defendant under a contract to sell but the other co-owners did not sign this Contract to Sell, who all denied knowledge of the same. No contract of Sale followed this Contract to Sell which cannot be the bases of the issuance of a new title. A Contract to Sell is only a promise to sell, and is not a deed of sale, specially as this Contact to Sell is not signed by all of the registered owners. This Court cannot also understand how the document, denominated as DEED OF ABSOLUTE SALE WITH MORTGAGE can be the bases (sic) of a new title. The absoluteness of the sale, is contradicted by the mortgage it also provides. There is absoluteness of sale only when the buyer upon execution of the contract, pay (sic) in full the consideration and ownership passes to the Vendee. The registered owners of Lot 90-B covered by Transfer Certificate of Title No. 100178 even deny having executed this document of Deed of Absolute Sale with Mortgage. Until these matters are threshed out at the trial on the merits, and after this is fully explained and determined, whether the properties were actually sold to Defendant Greenfield Development Corporation, irreparable injury will visit the landowner if the claim of ownership by Greenfield Development Corporation is allowed and not enjoined.14 The Court of Appeals, however, disagreed with the trial court. It noted that the trial court relied mainly on petitioners' allegations in the complaint, which were not supported by substantial evidence, and ignored the presumption of validity ascribed to the duly notarized deeds of conveyances and the titles issued to respondent. The Court of Appeals also found that respondent is in constructive possession of the properties in dispute considering that it is already the registered owner thereof since 1962. Lastly, the Court of Appeals held that petitioners' right to impugn respondent's title to the property has already prescribed.15 Section 3, Rule 58 of the Rules of Court provides for the grounds justifying the issuance of a preliminary injunction, to wit: SEC. 3. Grounds for issuance of preliminary injunction. - A preliminary injunction may be granted when it is established: (a) That the applicant is entitled to the relief demanded, and the whole or part of such relief consists in restraining the commission or continuance of the act or acts complained of, or in requiring the performance of an act or acts, either for a limited period or perpetually; (b) That the commission, continuance or non-performance of the act or acts complained of during the litigation would probably work injustice to the applicant; or

(c) That a party, court, agency or a person is doing, threatening or is attempting to do, or is procuring or suffering to be done, some act or acts probably in violation of the rights of the applicant respecting the subject of the action or proceeding, and tending to render the judgment ineffectual. The purpose of a preliminary injunction is to prevent threatened or continuous irremediable injury to some of the parties before their claims can be thoroughly studied and adjudicated. Its sole aim is to preserve the status quo until the merits of the case can be heard fully.16 Thus, to be entitled to an injunctive writ, the petitioner has the burden to establish the following requisites:17 1) a right in esse or a clear and unmistakable right to be protected; (2) a violation of that right; (3) that there is an urgent and permanent act and urgent necessity for the writ to prevent serious damage. Hence, petitioners' entitlement to the injunctive writ hinges on their prima facie legal right to the properties subject of the present dispute. The Court notes that the present dispute is based solely on the parties' allegations in their respective pleadings and the documents attached thereto. We have on one hand, petitioners' bare assertion or claim that they are co-owners of the properties sold by their predecessors to respondent, and on the other, respondent's claim of ownership supported by deeds of conveyances and torrens titles in their favor. From these alone, it is clear that petitioners failed to discharge the burden of clearly showing a clear and unmistakable right to be protected. Where the complainant's right or title is doubtful or disputed, injunction is not proper. The possibility of irreparable damage without proof of actual existing right is not a ground for an injunction.18 Petitioners contend that the Court of Appeals should not have relied on respondent's allegations regarding the circumstances surrounding the sales and the transfer of the titles. Petitioners point out that trial on the merits of the case is still ongoing and respondent is yet to adduce evidence in support of its contention. The same, however, applies to petitioners' cause of action. They only have their own allegations and are yet to prove their claim. And as stated earlier, the only bases from which the propriety of the injunction can be determined are their respective pleadings and documents. What tilt the balance in respondent's favor are the notarized documents and the titles to the properties. The wellsettled rule is that a document acknowledged before a notary public enjoys the presumption of regularity. It is a prima facie evidence of the facts therein stated. To overcome this presumption, there must be presented evidence that is clear and convincing. Absent such evidence, the presumption must be upheld.19 In addition, the titles in the name of respondent, having been registered under the Torrens system, are generally a conclusive evidence of the ownership of the land referred to therein,20 and a strong presumption exists that the titles are regularly issued and valid.21 Therefore, until and unless petitioners show that the documents are indeed spurious and the titles invalid, then the presumptions must prevail at this juncture. Petitioners, however, argue that the presumption of validity of the notarized documents and titles cannot be applied in respondent's case as it is not an innocent purchaser.22 According to petitioners, respondent is fully aware that at the time that the Contract to Sell was entered into in 1962, Leon Medina who is a co-owner of the property then covered by TCT No. 21314, was already dead. Suffice it to say that these arguments already involve the merits of the main case pending before the trial court, which should not even be preliminarily dealt with, as it would be premature. Equally pertinent is the rule that courts should avoid issuing a writ of preliminary injunction, which in effect, would dispose of the main case without trial.23 The ground relied upon by the trial court in issuing the writ of preliminary injunction in this case is its doubt over the acquisition of the properties by respondent.24 Such basis would be virtually recognizing petitioners' claim that the deeds of conveyances and the titles are a nullity without further proof, to the detriment of the doctrine of presumption of validity in favor of these documents. There would, in effect, be a prejudgment of the main case and a reversal of the rule on the burden of proof since it would assume the proposition which the petitioners are inceptively duty bound to prove.25 Petitioners also claim that they are in actual possession of the property. As alleged in their complaint, they instituted Santos Arevalo, a copetitioner, as caretaker.26 They also alleged in their petition filed before this Court that Balbino and Yolanda Medina and their respective families are still residing on a portion of the property.27Respondent belies their claim, declaring that it employed Arevalo as caretaker. Respondent presented a notarized Receipt and Quitclaim dated April 26, 1994, signed by Arevalo, who attested that he was employed by respondent as caretaker and that his stay on the property was a mere privilege granted by respondent. Possession and ownership are two different legal concepts. Just as possession is not a definite proof of ownership, neither is non-possession inconsistent with ownership. Even assuming that petitioners' allegations are true, it bears no legal consequence in the case at hand because the execution of the deeds of conveyances is already deemed equivalent to delivery of the property to respondent, and prior physical delivery or possession is not legally required.28 Under Article 1498 of the Civil Code, "when the sale is made through a public instrument, the execution thereof shall be equivalent to the delivery of the object of the contract, if from the deed the contrary does not appear or cannot be inferred." Possession is also transferred, along with ownership thereof, to respondent by virtue of the notarized deeds of conveyances. 29

In sum, the trial court committed grave abuse of discretion in issuing the writ of preliminary injunction, and the Court of Appeals was correct in nullifying the same. The Court, however, finds that it was precipitate for the Court of Appeals to rule that petitioners' action is barred by prescription. As previously stressed, the parties are yet to prove their respective allegations and the trial court is yet to receive the evidence. There is nothing on record that can conclusively support the conclusion that the action is barred by prescription. Hence, the Court of Appeals should not have made such ruling. WHEREFORE, the petition is hereby DENIED for lack of merit. The Decision dated July 16, 1999 rendered by the Court of Appeals in CA-G.R. SP No. 52015 is AFFIRMED, except as to its view on prescription, as discussed in the body of the text. Let the original records of this case be remanded to the Regional Trial Court of Muntinlupa City (Branch 276) with dispatch for further proceedings. SO ORDERED. Republic of the Philippines Supreme Court Manila

THIRD DIVISION

REPUBLIC OF THE PHILIPPINES, Petitioner,

G.R. No. 162787

Present:

YNARES-SANTIAGO, J., Chairperson, - versus AUSTRIA-MARTINEZ, CHICO-NAZARIO, REYES, and BRION,* JJ.

LOURDES F. ALONTE, Respondent.

Promulgated: June 13, 2008 x------------------- -------------------------------x

DECISION

AUSTRIA-MARTINEZ, J.:

This resolves the Petition for Review on Certiorari under Rule 45 of the Rules of Court, praying that the Decision[1] of the Court of Appeals (CA) dated February 26, 2004which affirmed the Decision of the Regional Trial Court of Quezon City, Branch 82 (RTC) granting respondent's petition for reconstitution, be reversed and set aside.

The CA accurately summarized the facts as culled from the records, thus:

On August 10, 2001, the petitioner-appellee [herein respondent] Lourdes F. Alonte filed a Petition for the Reconstitution of the Original of Transfer Certificate of Title No. 335986 and Issuance of the Corresponding Owner's Duplicate thereof supposedly over lot 18-B of the subd. Plan (LRC) Psd-328326 containing an area of Eighty Square Meters and Ninety Five Square Decimeters (80.95) situated in the Municipality of Caloocan (now Quezon City).

The petitioner-appellee alleged in its [sic] petition that she is the owner in fee simple of a parcel of land with its improvement situated in Quezon City, bounded and described as follows:

xxxx

It is further alleged that the original copy of the aforesaid title which used to be kept in the Office of the Register of Deeds of Quezon City was among those declared either destroyed or burned during the fire which razed the said office on June 11, 1988 (Annex E, Certification From the Register of Deeds, Records, p. 9).

Likewise, the petitioner-appellee alleged that the owner's Duplicate copy thereof was lost and an affidavit to that effect was executed and accordingly filed in the Office of the Registry of Deeds forQuezon City (Annex F).

At the ex-parte hearing conducted on January 4, 2002, the petitioner-appellee was represented by her attorney-in-fact, Editha Alonte as evidenced by a Special Power of Attorney (Exh. H). The petitioner-appellee is presently in the United States and the witness and her family together with her sisters-in-law are the ones presently occupying the house erected thereon.

The following documents were presented to prove the jurisdictional facts:

Exhibit A - copy of the Petition dated July 27, 2001. Exhibit B - Order dated August 29, 2001. Exhibit C, C-1 to C-5 - the proof of service of the said Order to the City Prosecutor's Office, the Registry of Deeds of Quezon City, the Quezon City Legal Department, the Land Registration Authority, the Office of the Solicitor General, and the Land Management Bureau of the DENR; Exhibit D - Certificate of Publication dated October 26, 2001 issued by the National Printing Office; Exhibit E - Volume 97 No. 43, October 22, 2001 issue of the Official Gazette; Exhibit E-1 - Volume 97 No. 44, October 29, 2001 issue of the Official Gazette; Exhibit F - Certificate of Posting and Service dated November 19, 2001 by the Deputy Sheriff of this Court.

In addition to the abovementioned documents, the petitioner-appellee presented the following:

Annex A - Photocopy of TCT No. 335986; Annex B - Tax Declaration No. D-074-00504 for 1996; Annex C - Tax Declaration No. D-074-00921 for 1997; Annex D - Certification from the Office of the City Treasurer dated July 25, 2001; Annex E - Certification from the Register of Deeds of Quezon City dated February 4, 2000; Annex F - Affidavit of Loss dated July 9, 2001; Annex G - Technical Description; Annex H - Certification from the Office of the City Assessor dated August 1, 2001 (Records, pp. 5-12).[2]

The CA further adopted the following factual findings of the RTC, to wit:

The adjoining owners of the subject property were also furnished with copies of the Order dated August 29, 2001 by registered mail, as evidenced by the registry return cards (Exhibits G, G-1 and G-2) attached to the records. There being no opposition thereto, the petitioner was allowed to present her evidence ex-parte before a Hearing Officer designated by the Court.

xxxx

In its Report dated August 2, 2002, the Land Registration Authority submitted its findings as follows:

(1) The present petition seeks the reconstitution of Transfer Certificate of Title No. 335986, allegedly lost or destroyed and supposedly covering Lot 18-B of the subdivision plan (LRC) Psd-328326, situated in the Municipality of Caloocan (now Quezon City).

(2) The plan and technical description of Lot 18-B of the subdivision plan (LRC) Psd 328326, were verified correct by this Authority to represent the aforesaid lot and the same have been approved under (LRA) PR-19193 pursuant to the provision of Section 12 of Republic Act No. 26.[3] (Emphasis supplied)

On August 13, 2002, the RTC promulgated its Decision, the dispositive portion of which reads as follows:

WHEREFORE, the Petition dated July 27, 2001 is hereby GRANTED and the Register of Deeds of Quezon City is hereby directed to reconstitute in the files of his Office the original copy of TCT No. 335986 based on the corresponding technical description and survey plan of the property in question in the name of petitioner Lourdes F. Alonte.

The owner's duplicate copy of TCT No. 335986 which was lost is hereby declared null and void and the Register of Deeds of Quezon City is hereby directed to issue a new owner's duplicate copy of the reconstituted title to the petitioner, after payment of the prescribed fees and after their Order shall have become final.

SO ORDERED.[4]

Thereafter, the RTC Branch Clerk of Court issued a Certificate of Finality dated September 3, 2002.[5]

However, on September 10, 2002, the RTC issued an Order reading as follows:

It appearing from the records that the Notice of Appeal filed by the Office of the Solicitor General thru registered mail on August 29, 2002 and received by this Court on September 4, 2002, was within the reglementary period, the Certificate of Finality earlier issued on September 3, 2002 is hereby REVOKED and/or otherwise RECALLED.

ACCORDINGLY, the Notice of Appeal is hereby given due course. Let, therefore, the records hereof be elevated to the Court of Appeals for appropriate proceedings and disposition.

SO ORDERED.[6]

On February 26, 2004, the CA then issued the assailed Decision affirming the RTC judgment. The CA held that the RTC did not err in ordering the reconstitution of the original copy of Transfer Certificate of Title (TCT) No. 335986 based on a photocopy because the court applied Section 3(f) of Republic Act (R.A.) No. 26, entitled An Act Providing a Special Procedure for the Reconstitution of Torrens Certificate of Title Lost or Destroyed, which took effect on September 26, 1946. Said provision states that transfer certificates of title shall be reconstituted from x x x any other document which, in the judgment of the court, is sufficient and proper basis for reconstituting the lost or destroyed certificate of title.

Hence, the present petition for review on certiorari on the following grounds:

I The Court of Appeals erred in finding that there is sufficient and proper basis for reconstitution of TCT No. 335986.

II The Court of Appeals erred in affirming the lower court's decision granting the petition for reconstitution despite respondent's failure to comply with the mandatory requirements prescribed under Republic Act No. 26.[7]

Petitioner alleges that the trial court did not acquire jurisdiction to hear the petition for respondent's failure to allege the following mandatory and jurisdictional facts in her petition:

1.

the names and addresses of the occupants or persons in possession of the property, of the owners of the adjoining properties and of all persons who may have any interest in the property;

2. 3.

a detailed description of the encumbrance appearing on the title; and the restrictions and liabilities allegedly appearing on the subject title as referred to in paragraph 8 of the Petition.[8]

Petitioner also pointed out other supposed defects in the petition, i.e., it was not accompanied by a plan and technical description of the property duly approved by the Chief of the General Land Registration Office (now Land Registration Authority [LRA]) or by a certified copy of the description taken from a prior certificate of title covering the same property as prescribed under the last condition under Section 12 of R.A. No. 26; there was no tracing cloth plan attached to the petition as prescribed by Section 5 (a) of LRC Circular No. 35; and there is no showing that the Affidavit of Loss executed on July 9, 2001 by the petitioner stating the alleged fact of loss of the owner's duplicate copy of TCT No. T-335986 had been sent or registered with the Office of the Registry of Deeds of Quezon City.[9]

The petition is unmeritorious.

The Court emphasizes its ruling in Republic of the Philippines v. Casimiro,[10] to wit:

The findings of fact of the RTC, affirmed by the Court of Appeals, cannot be disturbed by this Court, since As a rule, only questions of law may be appealed to the Court by certiorari. The Court is not a trier of facts, its jurisdiction being limited to errors of law. Moreover, where as in this case the Court of Appeals affirms the factual findings of the trial court, such findings generally become conclusive and binding upon the Court. The Court will not disturb the factual findings of the trial and appellate courts unless there are compelling or exceptional reasons, and there is none in the instant petition. Petitioner failed to present before this Court any compelling or exceptional argument or evidence that would justify a departure from the foregoing general rule. This Court defers to the findings of both the RTC and the Court of Appeals as to the weight accorded to respondents evidence and the sufficiency thereof to substantiate his right to a reconstitution of the original copy of TCT No. 305917.[11] (Emphasis supplied)

In the present case, the RTC declared the petition to be sufficient in form and substance in its Order[12] dated August 29, 2001. Both the RTC and the CA found the evidence presented by petitioner as adequate to order the reconstitution of TCT No. 335986. Akin to Casimiro,[13] herein petitioner also failed to convince the Court that there are compelling reasons for it to deviate from the general rule that the findings of fact of the RTC, affirmed by the CA, are binding on this Court.

A thorough examination of the record reveals that there is no factual basis for petitioner's claim that respondent failed to comply with the requirements for a petition for reconstitution as enumerated in Sections 12 and 13 of R.A. No. 26, to wit:

Section 12. Petitions for reconstitution from sources enumerated in Section x x x 3(f) of this Act, shall be filed with the proper Court of First Instance, by the registered owner, his assigns, or any person having an interest in the property. The petition shall state or contain, among other things, the following: (a) that the owner's duplicate of the certificate of title had been lost or destroyed; (b) that no co-owner's, mortgagee's or lessee's duplicate had been issued, or, if any had been issued, the same had been lost or destroyed; (c ) the location, area and boundaries of the property; (d) the nature and description of the buildings or improvements, if any, which do not belong to the owner of the land, and the names and addresses of the owners of such buildings or improvements; (e) the names and addresses of the occupants or persons in possession of the property, of the owners of the adjoining properties and of all persons who may have any interest in the property; (f) a detailed description of the encumbrances, if any, affecting the property; and (g) a statement that no deeds or other instruments affecting the property have been presented for registration, or, if there be any, the registration thereof has not been accomplished, as yet. All documents, or authenticated copies thereof, to be introduced in evidence in support of the petition for reconstitution shall be attached thereto and filed with the same: Provided, That in case the reconstitution is to be made exclusively from sources enumerated in Sections 2(f) or 3(f) of this Act, the petition shall be further accompanied with a plan and technical description of the property duly approved by the Chief of the General Land Registration Office, or with a certified copy of the description taken from a prior certificate of title covering the same property. Section 13. The Court shall cause a notice of the petition, filed under the preceding section, to be published, at the expense of the petitioner, twice in successive issues of the Official Gazette, and to be posted on the main entrance of the provincial building and of the municipal building of the municipality or city in which the land is situated, at least thirty days prior to the date of hearing. The court shall likewise cause a copy of the notice to be sent, by registered mail or otherwise, at the expense of the petitioner, to every person named therein whose address is known, at least thirty days prior to the date of hearing. Said notice shall state, among other things, the number of the lost or destroyed certificate of title, if known, the name of the registered owner, the names of the occupants or persons in possession of the property, the owners of the adjoining properties and all other interested parties, the location, area and boundaries of the property, and the date on which all persons having any interest therein, must appear and file their claim or objections to the petition. The petitioner shall, at the hearing, submit proof of the publication, posting and service of the notice as directed by the court.

The petition for reconstitution alleged that respondent is in possession of the subject lot and it listed the names and addresses of adjoining owners enumerated in the Certification from the Office of the City Assessor dated August 1, 2001; it stated that the title is free from any and all liens and encumbrances; and it stated that a copy of TCT No. 335986 is attached to the petition and made an integral part of the petition, hence, the restrictions and liabilities appearing at the back of the copy of the TCT are deemed part of the petition for reconstitution. Said petition was also accompanied by a technical description of the property approved by the Commissioner of the National Land Titles and Deeds Registration Administration, the predecessor of the LRA, as prescribed under the last condition of Section 12 of R.A. No. 26. Thus, the petition clearly complied with the requirements of Section 12, R.A. No. 26.

The fact that Editha Alonte, respondent's attorney-in-fact, testified that it is she and her family who are residing on the subject lot does not negate the statement in the petition for reconstitution that it is respondent who is in possession of the lot. After all, Article 524 of the New Civil Code provides that possession may be exercised in one's own name or in that of another. Obviously, Editha Alonte was exercising possession over the land in the name of respondent Lourdes Alonte. This is supported by the Certification[14] from the Office of the City Treasurer of Quezon City which states that the real property taxes on said property, declared in the name of Lourdes Alonte, had been paid.

Furthermore, as stated above, the LRA submitted to the trial court a Report[15] dated August 2, 2002 stating that *t+he plan and technical description of Lot 18-B of the subdivision plan (LRC) Psd-328326, were verified correct by this Authority to represent the aforesaid lot and the same have been approved under (LRA) PR-19193 pursuant to the provisions of Section 12 of R.A. No. 26. Attached to said Report were the print copy of plan (LRA) PR-19193[16] and the corresponding technical description.[17] Since the LRA issued a Report that is highly favorable to respondent, and considering further the presumption that official duty has been regularly performed,[18] the only conclusion would be that respondent has fully complied with the requirements of LRC Circular No. 35.

It also appears that the Affidavit of Loss dated July 9, 2001 executed by respondent has indeed been submitted to the Register of Deeds as the photocopy of TCT No. 335986 bears an inscription at the back regarding the submission of such document to the Register of Deeds.

In fine, petitioner miserably failed to present any matter that would warrant the reversal or modification of the factual findings of the RTC, as affirmed by the CA.

WHEREFORE, the petition is DENIED. The Decision of the Court of Appeals is AFFIRMED.

No costs. SO ORDERED.

Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. 3088 February 6, 1907

EL BANCO ESPAOL-FILIPINO, plaintiff-appellant, vs. JAMES PETERSON, sheriff of the city of Manila, ET AL., defendants-appellees. Del-Pan, Ortigas & Fisher for appellant. Hartigan, Marple, Rohde, & Gutierrez for appellees. TORRES, J.: On the 24th of October, 1905, the Spanish-Filipino Bank, a corporation, through its attorneys, Del-Pan, Ortigas and Fisher, filed a complaint against the sheriff of the city of Manila and the other defendant, Juan Garcia, praying that judgment be rendered against the said sheriff, declaring that the execution levied upon the property referred to in the complaint, to wit, wines, liquors, canned goods, and other similar merchandise, was illegal, and directing the defendants to return the said goods to the plaintiff corporation, and in case that he had disposed of the same, to pay the value thereof, amounting to P30,000, Philippine currency, and further that it be declared that the said plaintiff corporation, under the contract of pledge referred to in the complaint had the right to apply the proceeds of the sale of the said goods to the payment of the debt of P40,000, Philippine currency, for the security of which the said merchandise was pledged, with preference over the claim of the other defendant, Juan Garcia and that both defendants be held jointly liable to the plaintiff for the sum of P500, Philippine currency, as damages, and the said defendants to pay the costs of the proceedings, and for such other and further relief as the plaintiff might be entitled to under the law. Plaintiff alleges in its complaint that under the contract entered into on the 4th of March, 1905, by and between the Spanish-Filipino Bank and Francisco Reyes, the former, loaned to the latter the sum of P141,702, Philippine currency; that on the same date Francisco Reyes was already indebted to the bank in the sum of P84,415.38, Philippine currency, which, added to the amount of the loan, made a total of P226,117.38, Philippine currency, received by the said Reyes as a loan from the plaintiff bank, the entire sum at an annual interest of 8 per cent; that to secure the payment of these two sums and the interest thereon, the debtor, Francisco Reyes, by a public instrument executed before a notary on the aforesaid date mortgaged in favor of the plaintiff bank several pieces of property belonging to him, and pledged to the said bank part of his personal property, specifying the proportion on which the said real and personal property thus mortgaged and pledged in favor of the plaintiff corporation would be respectively liable for the payment of the debt; that the property pledged by the debtor to the bank included a stock or merchandise, consisting of wines, liquors, canned goods, and other similar articles valued at P90,591.75, Philippine currency, then stored in the warehouses of the debtor, Reyes, No. 12 Plaza Moraga, in the city of Manila, which said goods and merchandise were liable for the payment of the said sum of P90,591.75, Philippine currency; that in the aforesaid deed of pledge it was agreed by and between the bank and the debtor, Reyes, that the goods should be delivered to Ramon Garcia y Planas for safe-keeping, the debtor having actually turned over to the said Garcia y Planas the goods in question by delivering to him the keys of the warehouse in which they were kept; that in a subsequent contract entered into by and between the debtor, Reyes, and the plaintiff bank on the 29th of September, 1905, the said contract executed on the 4th of March was modified so as to provide that the goods then (September 29) in possession the depositary should only be liable for the sum of P40,000, Philippine currency, the said contract of the 4th of March remaining in all other respects in full force and effect, Luis M.a Sierra having been subsequently appointed by agreement between the bank and the debtor as depositary of the goods thus pledged in substitution for the said Ramon Garcia y Planas. On the 19th of October, 1905, in an action brought in the Court of First Instance of the city of Manila by Juan Garcia y Planas against Francisco Reyes and Ramon Agtarat, judgment was rendered against the last-mentioned two for the sum of P15,000, Philippine currency, to be paid by them severally or jointly, upon which judgment execution was issued against the property of the defendants, Reyes and Agtarap. On the aforesaid 19th day of October, for the purpose of levying upon the property of the defendants, the sheriff at the request of Garcia, the plaintiff in that case, entered the warehouse where the goods pledged to the plaintiff bank were stored under the custody of the depositary, Sierra, and levied upon them as per list attached to the complaint marked "Exhibit A." The sheriff seized the goods which had been pledged to the bank, depriving the latter of the possession of the same, to which said contract executed on the 4th of March, 1905. Without the authority of the bank, Reyes could not dispose of the said goods. The value of the goods seized by the sheriff was P30,000, Philippine currency, the said sheriff, having refused, and still refusing, to return to the same to the bank, notwithstanding repeated demands made upon him to this effect, and it being alleged in the complaint that unless prohibited by the court the sheriff would proceed to sell the said goods at public auction and apply the proceeds to the satisfaction of the judgment rendered in favor of the Juan Garcia y Planas, while the other debtor Reyes had not paid to the bank the P40,000, Philippine currency, to secure the payment of which the goods mentioned in Exhibit A had been pledged to the bank, that is, to secure the payment of a sum in excess of the actual value of the goods in the hands of the sheriff. The defendant sheriff, James J. Peterson, and Juan Garcia, his codefendant, through their attorneys, Hartigan, Marple, Rohde and Gutierrez, answering the complaint, stated that they admitted the allegations contained in paragraphs 1, 2, 3, 4, 5, 12, and 17 of the complaint, but denied the allegations contained in paragraphs 6, 7, 8, 9, 10, 11, 14, 16, and 18. They further denied the allegations contained in paragraph 12, with

the exception that the defendant sheriff levied upon the goods mentioned in Exhibit A attached to the complaint for the purpose of satisfying the judgment referred to therein; and also the allegations contained in paragraph 13 of the complaint, with the exception that the sheriff seized the property mentioned in Exhibit A under the execution referred to therein; and finally defendants denied the allegation contained in paragraph 15 of the complaint, with the exception of the allegation that the value of the property seized is P30,000. They accordingly asked that the action be dismissed and that it be adjudged that the plaintiff had no interest whatever in the property described in the complaint, and that the plaintiff be taxed with the costs of these proceedings. The testimony introduced by the parties having been received, and the exhibits having been attached to the record, the court below entered judgment on the 4th of January, 1906, dismissing plaintiff's action and directing that the defendant recover from the Spanish-Filipino Bank the costs of this action, for which execution was duly issued. To this judgment counsel for plaintiff excepted and announced his intention of prosecuting a bill of exceptions, and further made a motion for a new trial on the ground that the judgment of the court below was contrary to law and that the findings of fact were plainly and manifestly contrary to the weight of the evidence. The decision of this case depends mainly upon the question as to whether the contract of pledge entered into by and between the SpanishFilipino Bank and Francisco Reyes to secure a loan made by the former to the latter was valid, all the requisites prescribed by the Civil Code having been complied with. If so, the bank's claim had preference over the claim of a third person not secured, as was the bank's, by a pledge, with reference to the property pledged to the extent of its value, and therefore such property could not have been legally levied upon by the sheriff at the request of the defendant, Juan Garcia. (Arts. 1921, 1922, Civil Code.) The contract in question complies with all the requisites provided in article 1857 of the Civil Code, such as that the property was pledged to secure a debt, the date of the execution, the terms of the pledge, and the property pledged, all of which appears in a public document, and the property pledged was placed in the hands of a third person by common consent of the debtor and creditor, under the supervision of an agent of the bank. (Arts. 1863, 1865, 1866, 1869, 1871, Civil Code.) The defect alleged to exist in the said contract is that the debtor, Reyes, continued in possession of the property pledged; that he never parted with the said property, and that neither the creditor nor the depositary appointed by common consent of the parties were ever in possession of the property pledged, and for this reason, and upon the further ground that the contract was fraudulent, the court below dismissed the complaint with the costs against the plaintiff. In the motion for a new trial it was alleged by the plaintiff that the judgment of the court below was contrary to law, and that the findings of fact contained therein were plainly and manifestly against the weight of the evidence. If plaintiffs contention is correct, then the judgment of the court below should be reversed. From the evidence introduced at the trial, both oral and documentary, it appears that a third person, appointed by the common consent of the debtor and creditor, was in possession of the goods pledged in favor of the bank under the direct supervision of an agent of the bank expressly appointed for this purpose, and it has not been shown that the said Reyes continued in the possession of the goods after they had been pledged to the plaintiff bank. Exhibit C and the testimony of Francisco Reyes, Luis M.a Sierra, and Mariano Rodriguez corroborate the existence and authenticity of the contract of pledge recorded in a public instrument and conclusively and satisfactorily show that the debtor, after the pledge of the property, parted with the possession of the same, and that it was delivered to a third person designated by common consent of the parties. For the purpose of giving this possession greater effect, the pledgee appointed a person to examine daily the property in the warehouse where the same was kept. The witness Matias Garcia also testified as to the status of these goods, and informed Juan Garcia of such status before the same were levied upon. The sheriff's testimony supports the allegation that the depositary, Sierra, was present at the place where the goods were kept, as well as the representative of the bank, Rodriguez, when he, the sheriff, went there for the purpose of levying upon the said property. He further testified that Rodriguez, the representative of the bank, then protested and notified him that the property in question was pledged to the SpanishFilipino Bank. The contract in question was, therefore, a perfect contract of pledge under articles 1857 and 1863 of the Civil Code, it having been conclusively shown that the pledgee took charge and possession of the goods pledged through a depository and a special agent appointed by it, each of whom had a duplicate key to the warehouse wherein the said goods were stored, and that the pledgee, itself, received and collected the proceeds of the goods as they were sold. The fact that the said goods continued in the warehouse which was formerly rented by the pledgor, Reyes, does not affect the validity and legality of the pledge, it having been demonstrated that after the pledge had been agreed upon, and after the depository appointed with the common consent of the parties had taken possession of the said property, the owner, the pledgor, could no longer dispose of the same, the pledgee being the only one authorized to do so through the depositary and special agent who represented it, the symbolical transfer of the

goods by means of the delivery of the keys to the warehouse where the goods were stored being sufficient to show that the depositary appointed by the common consent of the parties was legally placed in possession of the goods. (Articles 438, 1463, Civil Code.) The fact that the debtor, Reyes, procured purchasers and made arrangements for the sale of the goods pledged and that the bills for the goods thus sold were signed by him does not affect the validity of the contract, for the pledgor, Reyes, continued to be the owner of the goods, (art. 1869, Civil Code), he being the one principally interested in the sale of the property on the best possible terms. As to the reservation stipulated in paragraph 13 of the contract executed on the 4th of March, 1905, it could not affect the contract in question for the reason that reservation referred to the rent from the property mortgaged, to the bank and the dividends from the shares of stock also pledged to the bank, and not the merchandise so pledged, and such reservation could not have rendered the contract of pledge null. If the case is to be decided in accordance with the facts alleged and established, the defendant not having introduced any evidence to show that the said contract of pledge was fraudulent as to other creditors, there was no legal ground upon which the court below could have held that the contract evidenced by the instrument in question was entered into to defraud other creditors of the pledgor. For the reason hereinbefore set out, and the judgment of the court below being contrary to the evidence, the said judgment is hereby reversed, and it is hereby adjudged that the plaintiff corporation, under and by virtue of the contract of pledge in question, had a preferential right over that of the defendant, Juan Garcia, to the goods pledged or the value thereof, the value to be applied to the payment of the debt of P40,000, Philippine currency, for the security of which the said property was pledged, and the defendants are accordingly hereby ordered to return to the plaintiff corporation the property improperly levied upon, or to pay its value, amounting to P30,000, Philippine currency, without special provision as to costs. After the expiration of twenty days let judgment be entered in accordance herewith, and ten days thereafter the case be remanded to the court below for execution. So ordered. Republic of the Philippines SUPREME COURT Manila EN BANC G.R. No. L-9989 March 13, 1918

EDUARDO CUAYCONG, ET AL., plaintiffs-appellees, vs. RAMONA BENEDICTO, ET AL., defendants-appellants. Ruperto Montinola and Aurelio Montinola for appellants. No appearance for appellees. FISHER, J.: The issues in this case relate to the right of plaintiffs to make use of two roads existing on the Hacienda Toreno, a tract of land in the municipality of Victorias, Negros Occidental, the property of the defendants, Blasa Benedicto and Ramona Benedicto. One of these roads is referred to in the proceedings as the Nanca-Victorias road and the other as the Dacuman Toreno road. The Court of First Instance held that those of the plaintiffs who claimed to be entitled to make use of the Dacuman Toreno road had failed to establish the asserted right, and dismissed the action as to them. From this decision they appealed to this court but, their brief not having been filed within the time prescribed by the rules, their appeal was dismissed, on motion of defendants, by resolution dated February 14, 1916. Consequently, the issues presented on this appeal are limited to those which relate to the rights of the parties with respect to the Nanca-Victorias road, and the determination of the correctness of the decision of the court concerning that part of the controversy submitted to its decision. The allegations in the complaint with respect to the Nanca-Victorias road are that the appellees, Eduardo Cuaycong, Lino Cuaycong, and Eulalio Dolor, are the owners of a group of haciendas situated between the southern boundary of the Hacienda Toreno and the barrio of Nanca, of the municipality of Seravia, and that the appellees Silverio Ginoo, Gervasio Ascalon, and Juan Ledesma, are the lessees of part of said haciendas; that more than twenty years the appellees and their predecessors in interest have made use of the Nanca-Victorias road, which crosses the Hacienda Toreno, openly, publicly, and continiously, with the knowledge of the owners of the said hacienda, for the purpose of conveying the products of their haciendas to the town of Victorias and to the landing place there situated, and for the purpose of transporting supplies from those points to their haciendas, making use of the said road by means of carts, carabaos, and other usual means of transportation; that there is no outlet to a public road from the hacienda occupied by these plaintiffs, the only road and way by which the products of the plaintiffs' property can be taken to the town of Victorias and to the landing place there being across the Hacienda Toreno by the road marked on the plan attached to the complaint; that on the fifteenth day of November, 1912, the defendants closed the road in question at the point at which it crosses the Hacienda Toreno, and refused to permit plaintiffs to continue using it; that plaintiffs were about to commence to grind their crop of sugar cane, and that, if prevented from transporting their sugar across the Hacienda Toreno to their point of embarkation, would suffer

damages difficult to estimate. Upon these averments of fact the plaintiffs prayed for a judgment that they are entitled to use the road in question as they have been using it in the past, and that a perpetual injunction be issued against plaintiffs restraining them from impending such use. Upon the filing of the complaint, plaintiffs moved the court to issue a preliminary injunction restraining defendants from interfering with the use of the road during the pendency of the suit, which motion was granted by the court. Defendants in their answer put in issue all the special averments of the complaint, as above set forth, and by way of counterclaim and special defense, averred that the road crossing the Hacienda Toreno, over which plaintiffs claim the right of passage, is the private property of defendants; and, further, that they have not refused plaintiffs permission to pass over this road but have required them to pay toll for the privilege of doing so. Defendants also claimed damages for the use of the road by plaintiffs during the pendency of the suit, alleging that the preliminary injunction had been improvidently issued upon false statements contained in the verified complaint filed by plaintiffs. The case was tried in July, 1913. The court on December 8, 1913, rendered judgment, dismissing the complaint with respect to the plaintiffs Felix Suarez, Probo Jereza, Enrique Azcona, and Melecio Pido, these being the plaintiffs who claimed the right to use the Dacuman Toreno road. With respect to the Nanca-Victorias road, the court held that it was a public highway over which the public had acquired a right of use by immemorial prescription, and ordered the issuance of a perpetual injunction against plaintiffs, restraining them from interfering in any manner with the use of the said road. The conclusion of the court with respect to the facts affecting the Nanca-Victorias road are as follows: Turning to a consideration of the evidence relative to the Nanca-Victorias road we find incontestable proof that it has been in existence for at least forty years. That the hacenderos located in the southwestern section of Victorias and the public generally passed over it freely and that it was used for all purposes of transportation of farm produce, animals, etc. and by pedestrians as well as carromatas and other conveyances without break or interruption until two or three years ago when the defendants announced that the road was private and that those who wished to pass over it with sugar carts would be obliged to pay a toll of ten centavos all other vehicles, it appears, were permitted to pass free charge. This arrangement seems to have existed during the years of 1911 and 1912 and part of 1913, the money being collected apparently from some hacenderos and not from others. There is some reason to believe from the evidence presented by defendants themselves that the practice of making these payments to hacienda 'Toreno' originated in an attempt to raise a fund for the repair of the road. There is no evidence that any other hacenderos between Nanca and Victorias or any other person made any attempt to close the road or to collect toll. On the contrary the road appears to have been repaired by the hacenderos when it needed repairing and everyone used it on equal terms until the defendants in 1910 or 1911 interposed the objection that the road in dispute was private. This we think is a fair deduction from the evidence and although it is asserted that toll was collected at an earlier date by the late Leon Montinola, brother of the defendant Ruperto Montinola, there is no tangible evidence that this was so and that toll has been paid only during the years of 1911, 1912, and part of 1913. The question presented by the assignment of error are in effect: (a) Is the Nanca-Victorias road at the point at which it traverses the Hacienda Toreno a public highway or not? (b) If it be held that the road in question is not a public highway, have plaintiffs proven their acquisition of an easement of way over the Hacienda Toreno at the point traversed by the road in question? The trial judge, in holding that the road in question is public, bases in conclusion upon the fact, which he deems to have been proven, that the road has been in existence "from time immemorial," and had been "continiously used as a public road . . . and open to public as such for thirty or forty years . . . until . . . the defendants undertook to claim it as private and to collect toll for the passage of carts." (Bill of Exceptions, p. 56.) There is no doubt that for the past thirty or forty years a road has existed between the former site of the town of Victorias and the barrio of Nanca, of the municipality of Seravia, and that this road crosses defendants' hacienda. It is also true that during this period the plaintiffs and their predecessors in the ownership of the hacienda now held by them have made use of this road for the purpose of going and coming from their haciendas to the town of Victorias; but the question is whether this use was limited to the plaintiffs, and their tenants and employees, or whether it was, as held by the lower court, a use enjoyed by the public in general. Plaintiffs produced only two witnesses, Segundo de Leon (stet. notes, pp. 21-22) and Eduardo Cuaycong, (stet. notes, pp. 27-33) to testify as regards the use of the Nanca-Victorias road. Several other witnesses testified on behalf of plaintiffs, but their testimony relates to the Dacuman Toreno road, which is not involved in this appeal. We have carefully read the testimony of the witnesses Leon and Cuaycong, given upon their direct and cross examination, but we have been unable to find that either of them has testified that the road in question was ever used by the public in general. These witnesses testified with regard to the use of the road by the present and former owners and occupants of the estates of Bacayan, Esperanza, Alcaigan, Pusot, and Dolores for the transportation of the products of these estates to the town of Victorias, and of supplies and agricultural implements from Victorias to the haciendas, but neither of them testified expressly that any other use had been made of said road. Nevertheless, it may be reasonably inferred from the testimony of these witnesses that all persons having occasion to travel between Victorias and the haciendas of Bacayan, Esperanza, Alacaigan, Pusot, and Dolores, whether or not they were owners, tenants, or employees of said estates, made use of the road now in dispute, crossing the Hacienda Toreno, and to this limited extent it may be said that the public made use of the road, but there is nothing in the evidence to indicate that the so called public use extended beyond this.

Apart from the fact that there is no direct evidence to support the finding of the court concerning the general public use of the road in dispute, the record contains data strongly tending to show that when the complaint was filed plaintiffs did not contend that the road was a public highway, but merely contended that they had acquired by prescription an easement of way across the Hacienda Toreno. For example, the action is entitled an "action concerning a right of away." (Bill of Exceptions, pp. 64 and 65.) It is not averred in the complaint that the road in question was used by the public. On the contrary, it is averred that it was used by the plaintiffs and their predecessors. The averment in paragraph 8 of the complaint that the plaintiffs have no other "outlet to a public road" than that which they have been accustomed to used by going across the defendants' hacienda for the purpose of going to the town of Victorias also shows that when they commenced this action they had in mind the provisions of articles 564, et seq. of the Civil Code, which relate to the method of establishing the compulsory easement of way. The owners of an existing easement, as well as those whose properties are adjacent with a public road, have no occasion to invoke these provisions of the Code, which relate to the creation of new rights, and not the enforcement of rights already in existence. It is true in the opening statement made to the court, counsel for plaintiffs, who was not the same attorney by whom the complaint was signed, stated that plaintiffs contend that the road in question is public, but as no evidence was introduced tending to establish this contention concerning the Nanca Victorias road, counsel for defendants had no occasion to object upon the ground that such testimony was not relevant to the averments of the complaint. No evidence was taken to indicate that at any time since the road in question has been in existence any part of the expense of its upkeep has been defrayed by the general government, the province, or the municipality. The trial judge said upon this subject: It is true that whatever repairs were made on the road were made irregularly. The municipality of Victorias had no funds to devote to the construction and repair of roads, and the upkeep of the road depending entirely therefore on the initiative of the persons who used it, was attended to only at such times as repairs were absolutely necessary. (Bill of Exceptions, p. 49.) The court also held that it appears from the government grant issued in 1885 to the original owner of the hacienda adjacent to the Hacienda Toreno on its western boundary, that the Nanca-Victorias road at that time separated that estate from the Jalbuena Hacienda, and that these facts constitute "circumstantial evidence that the road was in existence in 1885." We have examined the document to which the court refers, and we agree that the road in question existed in 1885; but we do not believe that the document in question proves that the road was public highway. Another circumstance established by the evidence, and which is some importance in the determination of this issue, is that although the defendants closed the Nanca-Victorias road in the month of February, 1911, and since that time have collected toll from persons passing over it with carts loaded with sugar, including those belonging to several of the plaintiffs, nothing was done by them to prevent the continuation of this restriction until December, 1912, when this action was commenced. It is natural to assume that if plaintiffs had considered that the road in question was public, they would have protested immediately against the action of the defendants, and would have either commenced a civil action, as they subsequently did, or would have brought about a prosecution under section 16 of Act No. 1511. Upon the evidence taken and admissions contained in the pleadings and those made during the course of the trial we consider that the following findings are warranted: 1. The town of Victorias has always been the shipping point of the products of the Hacienda Toreno, and of the haciendas of appellees, as well as the place from which supplies were brought to those properties. 2. For thirty or forty years before the commencement of the suit a wagon road, herein called the Nanca-Victorias road, has been in existence, connecting the haciendas of appellees with the town of Victorias, and this road traverses the property of defendants. Since the removal of the town of Victorias to a new site the Nanca-Victorias road has been used by appellees in travelling between their properties and the provincial road which crosses the Hacienda Toreno from east to west. 3. No public funds have at any time been expended on the construction or upkeep of the Nanca-Victorias road, but from time to time work has been done on it by the laborers employed by the present and former owners of the Hacienda Toreno and the haciendas owned by the appellees and their predecessors in title. 4. The Nanca-Victorias wagon road, including that part of it which crosses the Hacienda Toreno, has for thirty-five or forty years been used by the appellees and their predecessors in title for the transportation, by the usual means, of the products of their estates to their shipping points in or near the town of Victorias, and the transportation to their estates of all supplies required by them, and has been used by all persons having occasion to travel to and from all or any of the estates now owned by the appellees. 5. The use of the Nanca-Victorias road in the manner and by the person above mentioned was permitted without objection by the owners of the Hacienda Toreno until the year 1911, when they closed it, and began charging a toll of 5 centavos for each cart which passed over the road, including carts belonging to the appellants, until restrained from continuing to do so by the preliminary injunction granted in this case. 6. The Nanca-Victorias road constitutes the only outlet from the estates of appellants to the nearest public road which is the provincial road which crosses the Hacienda Toreno from east to west.

Upon these facts the questions of law to be decided are: (a) Is the Nanca-Victorias road a public highway? (b) If the Nanca-Victoria road, or that part of it which crosses the Hacienda Toreno, is not a public highway, is it subject to a private easement of way in favor of the appellees? The defendants are the owners of the Hacienda Toreno under a Torrens title issued in accordance with the Land Registration Act, conferring to them its absolute ownership, subject only to the limitations of paragraph four of section 39 of said Act. It is admitted that there is no annotation on the certificate of title regarding the road here in question, either as a "public road" or as a "private way established by law," and, therefore, the questions presented by this appeal are to be determined precisely as they would be had the Hacienda Toreno not been brought under the operation of the Land Registration Act. The plaintiffs being the owners of the property in question, the presumption of law is that it is free from any lien or encumbrance whatever, and the burden therefore rests upon plaintiffs to establish the contrary. As this court said in case of Fabie vs. Lichauco and the children of Francisco L. Roxas (11 Phil. Rep., 14): It is settled of law that a property is assumed to be free from all encumbrance unless the contrary is proved. There is admittedly no evidence to show that the land occupied by the road here in question was any time conveyed to the general government or any of its political subdivisions by the present or any of the former owners of the Hacienda Toreno. There is no evidence, even remotely, tending to show that the road existed prior to the time when the property now known as the Hacienda Toreno passed from the State into private ownership. The record fails to disclose any evidence whatever tending to show that the Government has at any time asserted any right or title in or to the land occupied by the road, or that it has incurred any expense whatever in its upkeep or construction. The Civil Code defines as public roads those which are constructed by the State (art. 339), and as provincial and town roads those "the expense of which is borne by such towns or provinces." (Civil Code, art. 344.) While it is not contended that this definition is exclusive, it does show that during the Spanish regime, under normal conditions, roads which were public were maintained at the public expense, and that the fact that at no time was any expense incurred by the Government with respect to the road here in question tends strongly to support the contention of the defendants that it is private way. During the Spanish regime the law required each able to bodied citizen not within one of the exempted classes to work a certain number of days in each year, his labor to be devoted to "services of general utility" to the municipality of his residence. (Royal Decree of July 11, 1883, art. 5.) Under this Decree and the Regulations for its enforcement (Berriz, vol. 11, 258) the greater part of the work on the public road of the Islands was accomplished. Had the road here in question been a public way, it is reasonable to assume that the polistas of the town of Victorias would have been employed in maintaining it. It is most significant that no mention is made in the testimony of the plaintiffs' witnesses of any work of this character having been done on the road at any time, particularly in view of the fact that their attention was drawn to this point. (Stet. note, pp. 8, 10, 11, 12, 13 and 14.) The evidence shows that the repairs were made by the owners of the estates benefited by the road, and by their laborers, as a pure voluntary act for their own convenience and interest. There being no evidence of a direct grant to the government of the land occupied by the road in question or that any Government funds or labor were expended upon it, the question presents itself whether the use to which the road has been put was such as to justify the conclusion of the lower court that it has become public property. There being no evidence that the original use of the road by plaintiffs' predecessors was based upon any grant of the fee to the road or of an easement of way, or that it began under the assertion of a right on their part, the presumption must be that the origin of the use was the mere tolerance or license of the owners of the estates affected. This being so, has that merely permissive use been converted into a title vested in the public at large, or in the plaintiffs by reason of their ownership of the land beneficially affected by the use? Had it been shown that the road had been maintained at the public expense, with the acquiescence of the owners of the estates crossed by it, this would indicate such adverse possession by the government as in course of time would ripen into title or warrant the presumption of a grant or of a dedication. But in this case there is no such evidence, and the claims of plaintiffs, whether regarded as members of the public asserting a right to use the road as such, or as persons claiming a private easement of way over the land of another must be regarded as resting upon the mere fact of user. If the owner of a tract of land, to accommodate his neighbors or the public in general, permits them to cross his property, it is reasonable to suppose that it is not his intention, in so doing, to divest himself of the ownership of the land so used, or to establish an easement upon it and that the persons to whom such permission, tacit or express, is granted, do not regard their privilege of use as being based upon an essentially revocable license. If the use continues for a long period of time, no change being made in the relations of the parties by any express or implied agreement, does the owner of the property affected lose his right of revocation? Or, putting the same question in another form, does the mere permissive use ripen into title by prescription?

It is a fundamental principle of the law in this jurisdiction concerning the possession of real property that such possession is not affected by acts of a possessory character which are "merely tolerated" by the possessor, or which are due to his license (Civil Code, arts. 444 and 1942). This principle is applicable not only with respect to the prescription of the dominium as a whole, but to the prescription of right in rem. In the case of Cortes vs. Palanca Yu Tibo (2 Phil. Rep., 24, 38), the Court said: The provision of article 1942 of the Civil Code to the effect that acts which are merely tolerated produce no effect with respect to possession is applicable as much to the prescription of real rights as to the prescription of the fee, it being a glaring and self-evident error to affirm the contrary, as does the appellant in his motion papers. Possession is the fundamental basis of the prescription. Without it no kind of prescription is possible, not even the extraordinary. Consequently, if acts of mere tolerance produce no effect with respect to possession, as that article provides, in conformity with article 444 of the same Code, it is evident that they can produce no effect with respect to prescription, whether ordinary or extraordinary. This is true whether the prescriptive acquisition be of a fee or of real rights, for the same reason holds in one and the other case; that is, that there has been no true possession in the legal sense of the word. (See also Ayala de Roxas vs. Maglonso, 8 Phil Rep., 745; Municipality of Nueva Caceres vs. Director of Lands and Roman Catholic Bishop of Nueva Caceres, 24 Phil. Rep., 485.) Possession, under the Civil Code, to constitute the foundation of a prescriptive right, must be possession under claim of title (en concepto de dueno), or use the common law equivalent of the term, it must be adverse. Acts of a possessory character performed by one who holds by mere tolerance of the owner are clearly not en concepto de dueo, and such possessory acts, no matter how long so continued, do not start the running of the period of prescription. A similar question was presented in the case of the Roman Catholic Archbishop of Manila vs. Roxas (22 Phil. Rep., 450), in which case it appeared that Roxas, the owner of the Hacienda de San Pedro Macati, claimed a right of way across the property of the church to Calle Tejeron, a public street of the town of San Pedro Macati. The proof showed that the road in question had been used by the tenants of the Hacienda de San Pedro Macati for the passage of carts in coming and leaving the hacienda "from time immemorial," and further that the road had been used for time out of mind, not only by the tenants of the hacienda but by many other people in going and coming from a church half-way between the boundary line of the hacienda and Calle Tejeron. The court held that the facts did not give rise to a prescriptive right of easement in favor of the owner of the hacienda, upon the ground that such use "is to be regarded as permissive and under an implied license, and not adverse. Such a use is not inconsistent with the only use which the proprietor thought fit to make of the land, and until the appellee thinks proper to inclose it, such use is not adverse and will not preclude it from enclosing the land when other views of its interest render it proper to do so. And though an adjacent proprietor may make such use of the open land more frequently than another, yet the same rule will apply unless there be some decisive act indicating a separate and exclusive use under a claim of right. A different doctrine would have a tendency to destroy all neighborhood accommodations in the way of travel; for if it were once understood that a man, by allowing his neighbor to pass through his farm without objection over the pass-way which he used himself, would thereby, after the lapse of time, confer a right on such neighbor to require the pass-way to be kept open for his benefit and enjoyment, a prohibition against all such travel would immediately ensue." The decisions of the supreme court of Louisiana, a State whose jurisdiction is based, as is our own, upon the Roman Law, and whose Civil Code is taken, as is our own,. very largely from the Code of Napoleon, are particularly persuasive in matters of this character. In the case of Torres vs. Fargoust (37 La. Ann., 497), cited by appellants in their brief, in which the issues were very similar to those of the present case, the court held that The mere fact that for thirty or forty years the public was permitted to pass over this ground would not of itself constitute the place a locus publicus . . . dedication must be shown by evidence so conclusive as to exclude all idea of private ownership; . . . such dedication cannot be inferred from ere user alone; . . . no one is presumed to give away his property. The burden is on him who avers a divestiture of ownership to prove it clearly. We are, therefore, of the opinion, and so hold, that upon the facts established by the evidence it does not appear that the road in question is a public road or way. We are also of the opinion that plaintiffs have failed to show that they have acquired by prescription a private right of passage over the lands of defendants. The supreme court of Spain has decided that under the law in force before the enactment of the Civil Code, the easement of way was discontinous, and that while such an easement might be acquired by prescription, it must be used in good faith, in the belief of the existence of the right, and such user must have been continuous from time immemorial. (Judgment of December 15, 1882.) In the appealed decision the court below says that the plaintiffs and their predecessors made use of the road in question "from time immemorial," but there is no evidence whatever in the record to sup[port this finding, although it is true that the evidence shows the existence of the road and its use by the plaintiffs and their predecessors for thirty-five or forty years. Speaking of the evidence required under the present Code of Civil Procedure to show immemorial use of an easement, this court said in the case of Ayal de Roxas vs. Case (8 Phil. Rep., 197, 198): Third Partida in title 31, law 15 . . . says that discontinues servitudes . . . must be proved by usage or a term so long that men can not remember its commencement. . . . In many judgments the supreme court of Spain has refused to accept proof of any definite number of years as a satisfaction of this requirement of the law. . . . We are of the opinion that in order to establish a right of prescription [title of prescription based upon use from time immemorial] something more required than memory of living witnesses. Whether this something should be the declaration of persons long dead, repeated by those who testify, as exacted by the Spanish law, or should be the common reputation of ownership recognized by the Code of Procedure, it is unnecessary for us to decide. On either theory the appellant has failed in his proof . . . .

The same thing may be said in this case. Witnesses have testified that they have known the road for a certain period of years, beginning at a time prior to the enactment of the Civil Code, but no evidence has been made to prove immemorial use by either of the means of proof mentioned in this decision cited, nor is immemorial user averred in the complaint as the basis of the right. It is evident, therefore, that no vested right by user from time immemorial had been acquired by plaintiffs at the time the Civil Code took effect. Under that Code (art 539) no discontinuous easement could be acquired by prescription in any event. Assuming, without deciding, that this rule has been changed by the provisions of the present Code of Civil Procedure relating to prescription, and that since its enactment discontinuous easement may be required by prescription, it is clear that this would not avail plaintiffs. The Code of Civil Procedure went into effect on October 1, 1901. The term of prescription for the acquisition of rights in real estate is fixed by the Code (sec. 41) at ten years. The evidence shows that in February, 1911, before the expiration of the term of ten years since the time the Code of Civil Procedure took effect, the defendants interrupted the use of the road by the plaintiffs by constructing and maintaining a toll gate on it and collecting toll from persons making use of it with carts and continued to do so until they were enjoined by the granting of the preliminary injunction by the trial court in December, 1912. Our conclusion is, therefore, that the plaintiffs have not acquired by prescription a right to an easement of way over the defendant's property; that their use of the Nanca-Victorias road across the Hacienda Toreno was due merely to the tacit license and tolerance of the defendants and their predecessors in title; that license was essentially revokable; and that, therefore, the defendants were within their rights when they closed the road in 1911. While in the allegations from the plaintiffs' complaint it might be inferred that it was their purpose to seek to impose upon the defendants the easement to which arts. 564 et seq. of the Civil Code relate, that purpose was evidently abandoned, and the case was tried upon a wholly different theory. Proof was offered to show that the right of passage across defendants' land is necessary to enable plaintiffs to get their products to market, but there was no offer on their part to pay defendants the indemnity required by section 564. For the reasons stated the judgment of the court below is reversed, the injunction issued against defendants is allowed on this appeal. So ordered. Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. L-57259 October 13, 1983 ANGEL P. PERAN, petitioner, vs. THE HONORABLE PRESIDING JUDGE, BRANCH II, COURT OF FIRST INSTANCE OF SORSOGON, 10th JUDICIAL DISTRICT, RAMON ESPERA and ENCARNACION EVASCO, as private-respondents, respondents. Irene P. Escandor for petitioner. Esteban Escalante, Jr. for private respondents.

MELENCIO-HERRERA, J.: The decision of the then Court of First Instance of Sorsogon, Branch II, Gubat, Sorsogon, rendered in the exercise of its appellate jurisdiction, dismissing Civil Case No. 1277, entitled "Angel P. Peran vs. Encarnacion Evasco, et al.", for Forcible Entry and Illegal Detainer, is being assailed in this Petition for Review on certiorari on a question of law. Said Decision reversed the judgment of the 2nd Municipal Circuit Court of BulusanBarcelona, Sorsogon, for Forcible Entry & Illegal Detainer. The antecedent facts follow: The property in question, an unregistered residential land, with an area of 1,225 square meters more or less, situated at Tagdon Barcelona, Sorsogon, was originally owned by Jose Evasco. On December 29, 1950, Jose Evasco executed a "Reparticion Ex-trajudicial" whereby he partitioned his properties among his five heirs. 1Subject property was one of those alloted to his son, Alejandro Evasco, who had it surveyed in 1956 (Exhibits "I" and "I-1") who had it declared in his name under Tax Declaration No. 1900. The other heirs received their own shares, one of them, the deceased Anacleto Evasco, one of whose children was listed as Encarnacion, possibly, the principal private respondent herein. Alejandro Evasco sold his property to Jose E. Torella on December 31, 1972, 2 who declared it for taxation purposes under Tax Declaration No. 5157. 3 On July 10, 1977, Jose E. Torella, in turn, sold the land to Jose Enriquez Sabater, 4 and the latter also declared the property in his name

under Tax Declaration No. 7127. 5Petitioner Angel P. Peran acquired the land by purchase from Jose Enriquez Sabater on December 27, 1978, 6and subsequently declared it, too, in his name under Tax Declaration No. 7310. 7 The sale was duly recorded in the Register of Deeds' Office of the province of Sorsogon on January 3, 1979 in accordance with the provisions of Sec. 194 of the Revised Administrative Code as amended by Act No. 3344. Sometime in January 1979, petitioner personally asked private respondents, Encarnacion Evasco and her common-law husband Ramon Espera, whose house is erected on a 440 square meter portion (44 sq, ms. according to petitioner) of the lot in question, to remove the same and vacate the premises. Respondents refused, and consequently, a confrontation between the parties was had before the, Municipal Mayor of Barcelona and later before the Municipal Judge of Bulusan-Barcelona to settle the dispute, but to no avail. On February 8, 1979, petitioner filed a complaint for Forcible Entry and Illegal Detainer against private respondents before the 2nd Municipal Circuit Court of Bulusan-Barcelona, seeking the ejectment of the latter from the portion in question contending that respondents are mere squatters thereon; that they had prevented plaintiff from entering the property and deprived him of possession; and that they were tolerating persons in getting soil and bringing about a gradual erosion of the land to his extreme prejudice. Private respondents answered denying the material allegations of the Complaint, and alleging that they are the lawful possessors for more than twenty (20) years of the said portion, which formerly belonged to Jose Evasco, grandfather of Encarnacion Evasco and that petitioner has no right to eject them therefrom. On September 1, 1979, the 2nd Municipal Circuit Court of Bulusan-Barcelona rendered its Decision ordering private respondents to vacate the lot in question, return its possession to petitioner, reimburse him attorney's fees of P300.00 and litigation expenses, and to pay the costs. Reconsideration of the said decision filed by private respondents was denied by said Court on November 12, 1979. Private respondents appealed to respondent Court of First Instance of Sorsogon, Branch II. Respondent Court reversed the Municipal Circuit Court and dismissed the case on March 28, 1980, ruling that said Court had no jurisdiction over the case as the same was filed only on February 4, (8), 1979, which was well beyond the one-year-period of limitation, the cause of action having accrued from the sale of the property by Alejandro Evasco to Jose E. Torella on December 31, 1972; and that since the only issue in an illegal detainer case is physical possession, "whoever has prior possession, no matter in what character, is protected by law." Reconsideration of the said Decision sought by petitioner was denied by respondent Court. Petitioner appealed said judgment directly to this Tribunal on a question of law, raising as the lone issue: ... whether the respondent court was in error when for purposes of determining the jurisdiction of the 2nd Municipal Circuit Court of Bulusan-Barcelona, to try Civil Case No. 1227, for Illegal Detainer: (a) it reckoned the counting of one-year period within which to file the action from the sale of the property in question by Alejandro Evasco to Jose Torella on December 31, 1972 and not from the date of demand made by the petitioner upon the respondents; and (b) by assuming that "prior possession in whatever character is protected by law. We rule for petitioner. Private respondents admit that the land in question was originally owned by Jose Evasco. The tax declarations covering their house clearly state "house built on land owned by Jose Evasco under Tax No. 1599". 8 Since the land had been partitioned to Alejandro Evasco by his father, Jose Evasco, respondent Encarnacion can lay no claim to the property even as a grand-daughter of Jose Evasco. Respondents may have been in possession of the portion they occupy prior to petitioner but they have not proved their title thereto, nor their right to possess the same. As the 2nd Municipal Circuit Court of Bulusan-Barcelona found, no concrete evidence was introduced by respondents on this point. Moreover, it is noteworthy that the validity of the "Reparticion Extrajudicial" whereby said lot was adjudicated to Alejandro Evasco by his father Jose Evasco, predecessors-in-interest of petitioner, had never been challenged. If at all, private respondents' possession of their portion of the property was by mere tolerance of petitioner's predecessors-in-interest, which, however, does not vest in them a right which they can assert against petitioner. Possession by tolerance is lawful but this becomes illegal when, upon demand to vacate by the owner, the possessor refuses to comply with such demand. 9 A possessor by tolerance is necessarily bound by an implied promise to vacate upon demand, failing which a summary action for ejectment is the proper remedy against him.10 It is not necessary that there be a formal agreement or contract of lease before an unlawful detainer suit may be filed against a possessor by tolerance. 11 Neither is prior physical possession of the property by petitioner an indispensable requisite. 12 The ruling of respondent Court, therefore, that "since the only issue in forcible entry and illegal detainer action is the physical possession of real propertypossession de facto and n t possession de jurewhoever has prior possession, no matter in what character, is protected by law," is erroneous under the factual milieu herein,

A Forcible Entry and Unlawful Detainer action must be brought within one year from the unlawful deprivation or withholding of possession. 13 The one-year-period of limitation commences from the time of demand to vacate, and when several demands are made, the same is counted from the last letter of demand. 14 Demand may either be personal or in writing. 15 The demand to vacate having been made by petitioner in January 1979, and the ejectment suit having been instituted on February 8, 1979, the 2nd Municipal Circuit Court of BulusanBarcelona acted well within its jurisdiction in taking cognizance of the case. WHEREFORE, the assailed Decision of respondent Court of First Instance of Sorsogon, Branch II, in Civil Case No.1227, is SET ASIDE, and the Decision of the 2nd Municipal Circuit Court of Bulusan-Barcelona is hereby reinstated, Costs against private respondents. SO ORDERED. Abad Santos, ** Plana Escolin * and Relova, JJ., concur.. Republic of the Philippines SUPREME COURT Manila THIRD DIVISION

G.R. No. 111737 October 13, 1999 DEVELOPMENT BANK OF THE PHILIPPINES, petitioner, vs. THE HONORABLE COURT OF APPEALS AND SPOUSES TIMOTEO and SELFIDA S. PIEDA, respondents. GONZAGA-REYES, J.: Before us is a Petition for Review on Certiorari of the decision of the Court of Appeals 1 in CA-G.R. CV No. 28549 entitled "SPOUSES TIMOTEO PIEDA, ET. AL. vs. DEVELOPMENT BANK OF THE PHILIPPINES" which affirmed the decision of the Regional Trial Court (RTC), Branch 16 2, Roxas City in Civil Case No. V-4590, for cancellation of certificate of title and/or specific performance, accounting and damages with a prayer for the issuance of a writ of preliminary injunction.1wphi1.nt The records show that respondent spouses Pieda (PIEDAS) are the registered owners of a parcel of land (Lot 11-14-1-14) situated at barangay Astorga Dumarao, Capiz containing an area of 238,406 square meters, more or less, and covered by Homestead Patent No. 0844 and Original Certificate of Title No. P-1930. On March 7, 1972, the PIEDAS mortgaged the above described parcel of land to petitioner, Development Bank of the Philippines (DBP) to secure their agricultural loan in the amount of P20,000.00. The PIEDAS failed to comply with the terms and conditions of the mortgage compelling DBP to extrajudicially foreclose on February 2, 1977. In the foreclosure sale, DBP was the highest bidder and a Sheriff Certificate of Sale was executed in its favor. In the corresponding Certificate of Sale, the sheriff indicated that "This property is sold subject to the redemption within five (5) years from the date of registration of this instrument and in the manner provided for by law applicable to this case". The certificate of sale was registered in the Register of Deeds of Capiz on April 25, 1977. On March 10, 1978, after the expiration of the one-year redemption period provided for under Section 6, ACT 3135, DBP consolidated its title over the foreclosed property by executing an Affidavit of Consolidation of Ownership. Subsequently, a Final Deed of Sale was executed in DBP's favor, which was registered together with the Affidavit of Consolidation of Ownership with the Register of Deeds of Capiz on May 30, 1978. Consequently, Original Certificate of Title No. P-1930 was cancelled and TCT No. T-15559 was issued in the name of DBP. Thereafter, DBP took possession of the foreclosed property and appropriated the produce thereof. On July 5, 1978, the Ministry of Justice issued Opinion No. 92, Series of 1978 3 which declared that lands covered by P.D. No. 27 4, like the herein subject property, may not be the object of foreclosure proceedings after the promulgation of said decree on Oct. 21, 1972. On August 24, 1981, the PIEDAS offered to redeem the foreclosed property by offering P10,000.00 as partial redemption payment. This amount was accepted by DBP who issued O.R. No. 1665719 and through a letter, conditionally approved the offer of redemption considering the P10,000.00 as down payment. 5 However, on November 11, 1981, DBP sent the PIEDAS another letter informing them that pursuant to P.D. 27, their offer to redeem and/or repurchase the subject property could not be favorably considered for the reason that said property was tenanted. 6 On November 16, 1981, in deference to the above-mentioned opinion, DBP through Ramon Buenaflor sent a letter to the Acting Register of Deeds of Capiz requesting the latter to cancel TCT No. T-15559 and to restore Original Certificate of Title No. P-1930 in the name of the PIEDAS. The Acting Register of Deeds, in reply to such request, suggested that DBP file a petition in court pursuant to Section 108 of

Presidential Decree 1529 7. In compliance with said suggestion, DBP petitioned for the cancellation of TCT No. T-15559 with then Court of First Instance of Capiz, Branch II, docketed as Special Case No. 2653. The petition was favorably acted upon on February 22, 1982. Thus, the foreclosure proceeding conducted on February 2, 1977 was declared null and void and the Register of Deeds of Capiz was ordered to cancel TCT No. 15559; OCT No. 1930 was ordered revived. Meanwhile, on December 21, 1981, the PIEDAS filed the instant complaint against DBP for cancellation of certificate of title and/or specific performance, accounting and damages with a prayer for the issuance of a writ of preliminary injunction averring that DBP, in evident bad faith, caused the consolidation of its title to the parcel of land in question in spite of the fact that the 5-year redemption period expressly stated in the Sheriff's Certificate of Sale had not yet lapsed and that their offer to redeem the foreclosed property was made well within said period of redemption. 8 After trial, the RTC ruled in favor of the PIEDAS stating that DBP violated the stipulation in the Sheriff's Certificate of Sale which provided that the redemption period is five (5) years from the registration thereof in consonance with Section 119 9 of CA No. 141 10. DBP should therefore assume liability for the fruits that said property produced from said land considering that it prematurely took possession thereof. The dispositive portion of the decision reads: WHEREFORE, judgment is hereby rendered in favor of plaintiffs and against the defendant Development Bank of the Philippines as follows: 1. Condemning the defendant DBP to pay the plaintiffs P201,138.28 less whatever amount the plaintiffs still have to pay the said defendant DBP as balance of their loan account reckoned up to the date of this decision; P20,000.00 as attorney's fees; P5,000.00 as litigation expenses and costs. SO ORDERED. 11 DBP appealed to the Court of Appeals, which affirmed the decision of the RTC. The Court of Appeals stated that since DBP was in evident bad faith when it unlawfully took possession of the property subject of the dispute and defied what was written on the Sheriff's Certificate of Sale, the PIEDAS were entitled to recover the fruits produced by the property or its equivalent valued at P72,000.00 per annum or a total of P216,000.00 for the three-year period. Respondent court stated that said amount was not rebutted by DBP and was fair considering the size of the land in question. The court added that any discussion with respect to the redemption period was of little significance since the foreclosure proceeding was declared null and void in Special Civil Case No. 2653 12 on February 22, 1982. Thus, the right of the PIEDAS to redeem the property has become moot and academic. Finally, the award of attorney's fees amounting to P10,000.00 13 was justified considering that the PIEDAS were compelled to protect their interests. 14 DBP's Motion for Reconsideration 15 was denied; hence this petition where it assigns the following errors: Ground No. 1 The Honorable Court Of Appeals Gravely Erred In Affirming The Court A Quo's Decision Awarding Actual Damages In The Amount Of P216,000.00 In Favor Of The Private Respondents Notwithstanding The Absence Of Evidence Substantiating Said Award. Thus, The Honorable Court Of Appeals Had Decided This Instant Case In A Way Not In Accord With Applicable Law And Jurisprudence. 2. Ground No. 2 The Honorable Court Of Appeals Gravely Erred In Affirming The Court A Quo's Finding That DBP Was In Bad Faith When It Took Possession Of The Property In Question Notwithstanding the Contrary Evidence Adduced By Petitioner DBP. Thus, The Honorable Court Of Appeals Departed From The Accepted And Usual Course f Judicial Proceedings. 3. Ground No. 3 The Honorable Court Of Appeals Gravely Erred In Affirming The Court A Quo's Decision Awarding Attorney's Fees And Litigation Costs In Favor Of The Private Respondents Notwithstanding Absence Of Evidence Proving The Same. Clearly, The Lower Court Be Committed Misapprehension Of Facts That Can Be Considered A Question Of Law. 16 DBP maintains that the valuation of the income derived from the property in dispute allegedly amounting to P216,000.00 was not proven by the PIEDAS. DBP argues that they granted the PIEDAS a loan of P20,000.00 in March 7, 1972 and up to the time of the foreclosure of the property, the PIEDAS have paid only P2,000.00 on their principal. The failure of the PIEDAS to pay this loan is attributable to the fact that said property did not produce income amounting to P72,000.00 per annum. According to DBP, in the absence of receipts or other evidence to support such a claim, the Court of Appeals should not have granted said amount considering that the PIEDAS had the burden of proving actual damages. Furthermore, Selfida Pieda herself admitted that the property never produced income amounting to P72,000.00 per annum. At any rate, the actual amount earned by the property in terms of rentals turned over by the tenant-farmers or caretakers of the land were duly receipted and were duly accounted for by the DBP.

DBP also alleges that the mere fact that DBP took possession and administration of the property does not warrant a finding that DBP was in bad faith. First, records show that the PIEDAS consented to and approved the takeover of DBP. Second, Sec. 7 17 of Act No. 3135 18 allows the mortgagee-buyer to take possession of the mortgaged property even during the redemption period. Third, DBP's act of consolidating the title of the property in its name does not constitute bad faith as there is no law which prohibits the purchaser at public auction from consolidating title in its name after the expiration of the one (1) year redemption period reckoned from the time the Certificate of Sale was registered; and neither is there any law or jurisprudence which prohibits the PIEDAS from exercising their right of redemption over said property within five (5) years even if title is consolidated in the name of the purchaser. When DBP consolidated title over the property in its name, the new TCT issued in its favor was subject to the lien i.e. the right of redemption of the PIEDAS; if there was a failure to register this in the TCT, DBP should not be faulted. Besides, even if the five (5) year period of redemption was not indicated therein, Sec. 44 19 and 4620 of Presidential Decree No. 1529 21 attaches such lien by operation of law even in the absence of an annotation in the title. Moreover, Sec. 119 of CA No. 141 also makes said right of redemption a statutory lien, which subsists and binds the whole world despite the absence of registration. DBP also could not have been in bad faith when it denied the PIEDAS' offer to redeem the property since the denial was premised on Opinion No. 92 of the Minister of Justice series of 1978 which stated that said land was covered under P.D. 27 and could not be the subject of foreclosure proceedings. For this reason, DBP immediately filed a petition to nullify the foreclosure proceedings which was favorably acted upon prior to the service of summons and the complaint in the present case on DBP on June 30, 1982. If DBP was really in bad faith, it would not have filed said petition for said petition was against its own interests. Further, DBP asserts that PIEDAS appointed DBP as their attorney-in-fact or agent in case of foreclosure of the property under Section 4 of the mortgage contract, which provides: 4. . . . In case of foreclosure, the Mortgagor hereby consents to the appointment of the mortgagee or any of its employees as receiver, without any bond, to take charge of the mortgage property at once, and to hold possession of the case and the rents and profits derived from the mortgaged property before the sale. . . . 22 DBP was therefore entitled to take possession of the property pursuant to the mortgage contract. Finally, considering that DBP lawfully had material possession of the property after it consolidated its title, DBP was entitled to the fruits and income thereof pursuant to Section 34, Rule 39 of the Rules of Court: Sec. 34. Rents and Profits Pending Redemption. Statement thereof and credit therefor on redemption. The purchaser, from the time of the sale until a redemption, and a redemptioner, from the time of his redemption until another redemption, is entitled to receive the rents of the property sold or the value of the use or occupation thereof when such property is in the possession of a tenant. . . . Taking all this into consideration, DBP cannot be faulted for taking over possession of the property in question. The core issue in this case is whether DBP was in bad faith when it took possession of the disputed lot. We rule in the negative and find DBP's contentions meritorious. A possessor in good faith is one who is not aware that there exists in his title or mode of acquisition any flaw, which invalidates it. 23 Good faith is always presumed, and upon him who alleges bad faith on the part of a possessor rests the burden of proof. 24 It was therefore incumbent on the PIEDAS to prove that DBP was aware of the flaw in its title i.e. the nullity of the foreclosure. This, they failed to do. Respondent PIEDAS argue that DBP's bad faith stems from the fact that DBP consolidated title over the disputed property despite the statement in the Sheriff's Certificate of Sale to the effect that said land was subject to a five year redemption period. The period of redemption of extrajudicially foreclosed land is provided under Section 6 of ACT No. 3135 to wit: Sec. 6. In all cases in which an extrajudicial sale is made under the special power hereinbefore referred to, the debtor, his successors in interest or any judicial creditor or judgment creditor of said debtor, or any person having a lien on the property subsequent to the mortgage or deed of trust under which the property is sold, may redeem the same at any time within the term of one year from and after the date of sale; and such redemption shall be governed by the provisions of section four hundred and sixty-four to four hundred and sixty-six, inclusive, of the Code of Civil Procedure, 25 in so far as these are not inconsistent with the provisions of this Act. If no redemption is made within one year, the purchaser is entitled as a matter of right to consolidate 26 and to possess 27 the property. 28 Accordingly, DBP's act of consolidating its title and taking possession of the subject property after the expiration of the period of redemption was in accordance with law. Moreover, it was in consonance with Section 4 of the mortgage contract between DBP and the

PIEDAS where they agreed to the appointment of DBP as receiver to take charge and to hold possession of the mortgage property in case of foreclosure. DBP's acts cannot therefore be tainted with bad faith. The right of DBP to consolidate its title and take possession of the subject property is not affected by the PIEDAS' right to repurchase said property within five years from the date of conveyance granted by Section 119 of CA No. 141. In fact, without the act of DBP consolidating title in its name, the PIEDAS would not be able to assert their right to repurchase granted under the aforementioned section. Respondent PIEDAS are of the erroneous belief that said section prohibits a purchaser of homestead land in a foreclosure sale from consolidating his title over said property after the one-year period to redeem said property has expired. Section 119 does not contain any prohibition to convey homestead land but grants the homesteader, his widow or legal heirs a right to repurchase said land within a period of five years in the event that he conveys said land. This is in consonance with the policy of homestead laws to distribute disposable agricultural lands of the State to landdestitute citizens for their home and cultivation. 29 The right to repurchase under Section 119 aims to preserve and keep in the family of the homesteader that portion of public land which the State had gratuitously given him. 30 Such right is based on the assumption that the person under obligation to reconvey the property has the full title to the property because it was voluntarily conveyed to him or that he consolidated his title thereto by reason of a redemptioner's failure to exercise his right of redemption. 31 It is also settled that "the five-year period of redemption fixed in Section 119 of the Public Land Law of homestead sold at extrajudicial foreclosure begins to run from the day after the expiration of the one-year period of repurchase allowed in an extrajudicial foreclosure". 32 Thus DBP's consolidation of title did not derogate from or impair the right of the PIEDAS to redeem the same under C.A. No. 141. It may be argued that P.D. 27 was already in effect when DBP foreclosed the property. However, the legal propriety of the foreclosure of the land was put into question only after Opinion No. 92 series of 1978 of the Ministry of Justice declared that said land was covered by P.D. 27 and could not be subject to foreclosure proceedings. The Opinion of the Ministry of Justice was issued on July 5, 1978 or almost two months after DBP consolidated its title to the property on March 10, 1978. By law and jurisprudence, a mistake upon a doubtful or difficult question of law may properly be the basis of good faith. 33 In the case of Maneclang vs. Baun, 34 we held that when a contract of sale is void, the possessor is entitled to keep the fruits during the period for which it held the property in good faith. Good faith of the possessor ceases when an action to recover possession of the property is filed against him and he is served summons therefore. 35In the present case, DBP was served summons on June 30, 1982. 36 By that time, it was no longer in possession of the disputed land as possession thereof was given back to the PIEDAS after the foreclosure of DBP was declared null and void on February 22, 1982. Therefore, any income collected by DBP after it consolidated its title and took possession of the property on May 30, 1978 up to February 22, 1982 belongs to DBP as a possessor in good faith since its possession was never legally interrupted. Finally, we delete the award for attorney's fees. Although attorney's fees may be awarded if the claimant is compelled to litigate with third persons or to incur expenses to protect his interest by reason of an unjustified act or omission of the party from whom it is sought 37, we hold that DBP's acts were clearly not unjustified. WHEREFORE, the instant petition is hereby GRANTED, and the appealed decision of the Court of Appeals is REVERSED. The Development Bank of the Philippines is absolved from any liability to Timoteo and Selfida Pieda in so far as it orders the DBP to pay the PIEDAS P216,000.00 as annual produce value of the land; P20,000.00 in attorney's fees, P5,000.00 in litigation expenses and the costs of the suit. This decision is without prejudice to whatever liability the PIEDAS may still have to the DBP with respect to their loan. SO ORDERED.