G.R. No.

152716 October 23, 2003

ELNA MERCADO-FEHR, petitioner,

vs.
BRUNO FEHR, respondent.

DECISION

PUNO, J.:

This case arose from a petition for declaration of nullity of marriage on the ground of psychological
incapacity to comply with the essential marital obligations under Article 36 of the Family Code filed by
petitioner Elna Mercado-Fehr against respondent Bruno Fehr before the Regional Trial Court of Makati in
March 1997. 1

After due proceedings, the trial court declared the marriage between petitioner and respondent void ab
initio under Article 36 of the Family Code and ordered the dissolution of their conjugal partnership of
property. The dispositive portion of the Decision dated January 30, 1998 states:
2

WHEREFORE, in the light of the foregoing, the marriage between Elna D. Mercado and Bruno F. Fehr on
March 14, 1985 is hereby declared null and void on the ground of psychological incapacity on the part of
respondent to perform the essential obligations of marriage under Article 36 of the Family Code.

Accordingly, the conjugal partnership of property existing between the parties is dissolved and in lieu
thereof, a regime of complete separation of property between the said spouses is established in
accordance with the pertinent provisions of the Family Code, without prejudice to the rights previously
acquired by creditors.1 vvphi 1.nt

Custody over the two minor children, MICHAEL BRUNO MERCADO FEHR and PATRICK FRANZ FEHR,
is hereby awarded to petitioner, she being the innocent spouse.

Let a copy of this Decision be duly recorded in the proper civil and property registries in accordance with
Article 52 of the Family Code.

SO ORDERED. 3

On August 24, 1999, the trial court issued an Order resolving the various motions filed by respondent
4

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

xxxxxxxxx

After a careful scrutiny of the inventory of properties submitted by both parties, the Court finds the
following properties to be excluded from the conjugal properties, namely:

a) the Bacolod property covered by Transfer Certificate of Title No. T-137232, considering that
the same is owned by petitioners parents, Herminio Mercado and Catalina D. Mercado xxx and

b) Suite 204 of the LCG Condominium covered by Condominium Certificate of Title No. 14735,
considering that the same was purchased on installment basis by respondent with his exclusive
funds prior to his marriage, as evidenced by a Contract to Sell dated July 26, 1983. xxx
Accordingly, the conjugal properties of the petitioner and respondent shall be distributed in the following
manner:

TO PETITIONER ELNA MERCADO:

a. Ground Floor, LCG Condominium, with an area of 671.84 sq. m., covered by Condominium
Certificate of Title No. 14734; and

b. Tamaraw FX (1995 model)

TO RESPONDENT BRUNO FRANZ FEHR:

a. Upper Basement, LCG Condominium, with an area of 180.81 sq. m. and covered by
Condominium Certificate of Title No. 14733; and

b. Nissan Sentra with Plate No. FDJ-533 (1994 model)

Furthermore, Suite 204, LCG Condominium with an area of 113.54 sq. m. and covered by Condominium
Certificate of Title NO. 14735 is hereby declared the EXCLUSIVE PROPERTY of respondent, BRUNO
FRANZ FEHR. Accordingly, petitioner is hereby directed to transfer ownership of Suite 204 in the name of
respondent, covered by Condominium Certificate of Title No. 14735, being respondents exclusive
property, acquired prior to his marriage.1aw phi 1.nt

Anent the monthly rentals prior to the issuance of this Order of the subject properties, namely the Ground
Floor Front (Fridays Club), Ground Floor Rear Apartment and Upper Basement at LGC Condominium, all
leased by Bar 4 Corporation, the same shall be shared by the parties in common, in proportion to one-half
each or share and share alike, after deducting all expenses for Income Taxes, Business Permits, Realty
Taxes, Municipal License fees, clearances, etc. Accordingly, petitioner is hereby directed to deliver to
respondent the following: a) the balance of his share of the monthly rentals from February 1998 to May
1998; and b) his one-half share (1/2) of the monthly rentals of the aforesaid properties from June 1998 up
to this date. Thereafter, the parties shall own and enjoy their respective share of the monthly rentals
derived from the properties adjudicated to them as stated above.

The Petitioner and Respondent are further enjoined to jointly support their minor children, Michael and
Patrick Fehr, for their education, uniforms, food and medical expenses. 5

Petitioner filed a motion for reconsideration of said Order with respect to the adjudication of Suite 204,
LCG Condominium and the support of the children. Petitioner alleged that Suite 204 was purchased on
installment basis at the time when petitioner and respondent were living exclusively with each other as
husband and wife without the benefit of marriage, hence the rules on co-ownership should apply in
accordance with Article 147 of the Family Code. Petitioner further claimed that it would not be in the best
interests of the children if she would be made to demand periodically from respondent his share in the
support of the children. She instead proposed that the Upper Basement and the Lower Ground Floor of
the LCG Condominium be adjudicated to her so that she could use the income from the lease of said
premises for the support of the children. 6

Resolving said motion, the trial court held in an Order dated October 5, 2000 that since the marriage
between petitioner and respondent was declared void ab intio, the rules on co-ownership should apply in
the liquidation and partition of the properties they own in common pursuant to Article 147 of the Family
Code. The court, however, noted that the parties have already agreed in principle to divide the properties
and/or proceeds from the sale thereof proportionately among them and their children as follows: 1/3 for
petitioner, 1/3 for respondent and 1/3 for the children. It also affirmed its previous ruling that Suite 204 of
LCG Condominium was acquired prior to the couples cohabitation and therefore pertained solely to
respondent. 7
1vv phi 1.nt

On November 28, 2000, petitioner filed a notice of appeal questioning the October 5, 2000 Order of the
trial court. Respondent filed an Opposition to the Notice of Appeal. On January 12, 2001, petitioner
8 9

withdrew the notice of appeal and instead filed on the following day a special civil action for certiorari and
10

prohibition with the Court of Appeals, questioning the findings of the trial court in its Order dated October
5, 2000. 11

The Court of Appeals, in its Decision dated October 26, 2001, dismissed the petition for certiorari for lack
of merit. The appellate court stated that petitioner has not shown any reason to warrant the issuance of a
writ of certiorari as the errors she raised were mere errors of judgment which were the proper subject of
an ordinary appeal, not a petition for certiorari. 12

Petitioner filed a motion for reconsideration of said Decision, which was also denied by the appellate
court.
13

Hence this petition. Petitioner raises the following arguments:

1) Petitioner correctly filed a petition for certiorari and prohibition against the Regional Trial Court
of Makati, Branch 149 in the Court of Appeals in view of the fact that the questioned orders were
issued with grave abuse of discretion amounting to excess of or lack of jurisdiction.

2) The Court of Appeals erred in ruling that the questioned orders were errors of judgment and
not of jurisdiction. 14

We shall first address the procedural issue, whether the Court of Appeals erred in dismissing the special
civil action for certiorari filed by petitioner.

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

Respondent, on the other hand, contends that petitioner may no longer avail of any remedy, whether an
appeal or a petition for certiorari, as she had lost all the right to appeal from the time the Decision of
January 30, 1998 became final and executory. He argues that the Order of the trial court dated October 5,
2000 is no longer assailable because it was merely issued to execute the final and executory Decision of
January 30, 1998. He also submits that the division of the properties into three and the distribution of 1/3
share each to the petitioner, the respondent, and their children was proper, in accordance with Articles
50, 51, 147 and 148 of the Family Code mandating the delivery of the presumptive legitime of the
common children upon dissolution of the property regime. Respondent further claims Suite 204 of LCG
Condominium to be his exclusive property as it was acquired on July 26, 1983, prior to their marriage on
March 14, 1985. 16

A petition for certiorari is the proper remedy when any tribunal, board or officer exercising judicial or
quasi-judicial functions has acted without or in excess of its jurisdiction, or with grave abuse of discretion
amounting to lack or excess of jurisdiction and there is no appeal, nor any plain speedy, and adequate
remedy at law. Grave abuse of discretion is defined as the capricious and whimsical exercise of judgment
as is equivalent to lack of jurisdiction. As a general rule, a petition for certiorari will not lie if an appeal is
the proper remedy such as when an error of judgment or procedure is involved. As long as a court acts
within its jurisdiction and does not gravely abuse its discretion in the exercise thereof, any supposed error
committed by it will amount to nothing more than an error of judgment reviewable by a timely appeal and
not assailable by a special civil action of certiorari. However, in certain exceptional cases, where the rigid
application of such rule will result in a manifest failure or miscarriage of justice, the provisions of the Rules
of Court which are technical rules may be relaxed. Certiorari has been deemed to be justified, for
instance, in order to prevent irreparable damage and injury to a party where the trial judge has
capriciously and whimsically exercised his judgment, or where there may be danger of clear failure of
justice, or where an ordinary appeal would simply be inadequate to relieve a party from the injurious
effects of the judgment complained of. 17

The exception applies to the case at bar. We reject respondents submission that all the appellate
remedies of petitioner have been foreclosed when the Decision dated January 30, 1998 became final and
executory. What is being questioned in this petition is not the January 30, 1998 Decision of the trial court
declaring the marriage between petitioner and respondent void ab initio on the ground of psychological
incapacity, but the Order of the trial court dated October 5, 2000 dividing the common properties of
petitioner and respondent into three1/3 to petitioner, 1/3 to respondent and 1/3 to their children, and
affirming its previous ruling that Suite 204 of LCG Condominium is the exclusive property of respondent.
The issue on the validity of the marriage of petitioner and respondent has long been settled in the main
Decision and may no longer be the subject of review. There were, however, incidental matters that had to
be addressed regarding the dissolution of the property relations of the parties as a result of the
declaration of nullity of their marriage. The questioned Order pertained to the division and distribution of
the common properties of petitioner and respondent, pursuant to the courts directive in its main decision
to dissolve the conjugal partnership. Said Order is a final Order as it finally disposes of the issues
concerning the partition of the common properties of petitioner and respondent, and as such it may be
appealed by the aggrieved party to the Court of Appeals via ordinary appeal. However, considering the
merits of the case, the Court believes that a blind adherence to the general rule will result in miscarriage
of justice as it will divest the petitioner of her just share in their common property, and thus, deprive her of
a significant source of income to support their children whom the court had entrusted to her care. We
have held that where a rigid application of the rule that certiorari cannot be a substitute for appeal will
result in a manifest failure or miscarriage of justice, the provisions of the Rules of Court which are
technical rules may be relaxed. 18

We now go to the substantive issues. The crux of the petition is the ownership of Suite 204 of LCG
Condominium and how the properties acquired by petitioner and respondent should be partitioned.

It appears from the facts, as found by the trial court, that in March 1983, after two years of long-distance
courtship, petitioner left Cebu City and moved in with respondent in the latters residence in Metro Manila.
Their relations bore fruit and their first child, Michael Bruno Fehr, was born on December 3, 1983. The
couple got married on March 14, 1985. In the meantime, they purchased on installment a condominium
unit, Suite 204, at LCG Condominium, as evidenced by a Contract to Sell dated July 26, 1983 executed
by respondent as the buyer and J.V. Santos Commercial Corporation as the seller. Petitioner also signed
the contract as witness, using the name "Elna Mercado Fehr". Upon completion of payment, the title to
the condominium unit was issued in the name of petitioner. 19

In light of these facts, we give more credence to petitioners submission that Suite 204 was acquired
during the parties cohabitation. Accordingly, under Article 147 of the Family Code, said property should
be governed by the rules on co-ownership. The Family Code provides:

Article 147. When a man and a woman who are capacitated to marry each other, live exclusively with
each other as husband and wife without the benefit of marriage or under a void marriage, their wages and
salaries shall be owned by them in equal shares and the property acquired by both of them through their
work or industry shall be governed by the rules on co-ownership.
In the absence of proof to the contrary, properties acquired while they lived together shall be presumed to
have been obtained by their joint efforts, work or industry, and shall be owned by them in equal shares.
For purposes of this Article, a party who did not participate in the acquisition by the other party of any
property shall be deemed to have contributed jointly to the acquisition thereof if the formers efforts
consisted in the care and maintenance of their family and of the household.

Neither party can encumber or dispose by acts inter vivos of his or her share in the property acquired
during cohabitation and owned in common, without the consent of the other, until after the termination of
their cohabitation.

When only one of the parties to a void marriage is in good faith, the share of the party in bad faith in the
co-ownership shall be forfeited in favor of their common children. In case of default of or waiver by any or
all of the common children or their descendants, each vacant share shall belong to the respective
surviving descendants. (emphasis supplied)

Article 147 applies to unions of parties who are legally capacitated and not barred by any impediment to
contract marriage, but whose marriage is nonetheless void, as in the case at bar. This provision creates
20

a co-ownership with respect to the properties they acquire during their cohabitation.

We held in Valdes vs. Regional Trial Court, Br. 102, Quezon City: 21

This peculiar kind of co-ownership applies when a man and a woman, suffering no legal impediment to
marry each other, so exclusively live together as husband and wife under a void marriage or without the
benefit of marriage. The term "capacitated" in the provision (in the first paragraph of the law) refers to the
legal capacity of a party to contract marriage, i.e., any "male or female of the age of eighteen years or
upwards not under any of the impediments mentioned in Article 37 and 38" of the Code.

Under this property regime, property acquired by both spouses through their work and industry shall be
governed by the rules on equal co-ownership. Any property acquired during the union is prima facie
presumed to have been obtained through their joint efforts. A party who did not participate in the
acquisition of the property shall still be considered as having contributed thereto jointly if said partys
"efforts consisted in the care and maintenance of the family household."

Thus, for Article 147 to operate, the man and the woman: (1) must be capacitated to marry each other; (2)
live exclusively with each other as husband and wife; and (3) their union is without the benefit of marriage
or their marriage is void. All these elements are present in the case at bar. It has not been shown that
petitioner and respondent suffered any impediment to marry each other. They lived exclusively with each
other as husband and wife when petitioner moved in with respondent in his residence and were later
united in marriage. Their marriage, however, was found to be void under Article 36 of the Family Code
because of respondents psychological incapacity to comply with essential marital obligations.

The disputed property, Suite 204 of LCG Condominium, was purchased on installment basis on July 26,
1983, at the time when petitioner and respondent were already living together. Hence, it should be
considered as common property of petitioner and respondent.

As regards the settlement of the common properties of petitioner and respondent, we hold that the Civil
Code provisions on co-ownership should apply. There is nothing in the records that support the
pronouncement of the trial court that the parties have agreed to divide the properties into three1/3
share each to the petitioner, the respondent and their children. Petitioner, in fact, alleges in her petition
before this Court that the parties have agreed on a four-way division of the properties1/4 share each to
the petitioner and the respondent, and 1/4 share each to their two children. Moreover, respondents
argument that the three-way partition is in accordance with Articles 50 and 51 of the Family Code does
not hold water as said provisions relate only to voidable marriages and exceptionally to void marriages
under Article 40 of the Family Code, i.e., the declaration of nullity of a subsequent marriage contracted by
a spouse of a prior void marriage before the latter is judicially declared void.
22

In sum, we rule in favor of the petitioner. We hold that Suite 204 of LCG Condominium is a common
property of petitioner and respondent and the property regime of the parties should be divided in
accordance with the law on co-ownership.

IN VIEW WHEREOF, the petition is GRANTED. The case is hereby REMANDED to the Regional Trial
Court of Makati, Branch 149 for liquidation of the properties of petitioner and respondent in accordance
with this Courts ruling.

SO ORDERED.

G.R. No. 122047 October 12, 2000

SPOUSES SERAFIN SI AND ANITA BONODE SI, petitioners,

vs.
COURT OF APPEALS, SPOUSES JOSE ARMADA and REMEDIOS ALMANZOR (deceased, and
substituted by heirs: Cynthia Armada, Danilo Armada and Vicente Armada) respondents.

DECISION

QUISUMBING, J.:

This petition for certiorari under Rule 45 assails the Decision dated March 25, 1994, of the Court of
1

Appeals and its Resolutions dated March 24, 1995 and September 6, 1995 in CA-G.R. CV No. 30727.
2

The Court of Appeals reversed the decision of the Regional Trial Court of Pasig City, Branch 113, and
nullified the sale of the subject lot by the spouses Crisostomo and Cresenciana Armada to spouses
Serafin and Anita Si. The dispositive portion of the respondent court's decision reads:

"WHEREFORE, in view of the foregoing, the decision appealed from is hereby REVERSED, and a new
one is rendered:

1) Annulling and declaring as invalid the registration of the Deed of Absolute Sale dated March
27, 1979 executed by Cresenciana V. Alejo in favor of Anita Bonode Si.

2) Ordering the Register of Deeds of Pasay City to annul and cancel Transfer Certificate of Title
No. 24751, issued in the name of Anita Bonode Si, married to Serafin D. Si., Jose R. Armada,
married to Remedios Almanzor and Dr. Severo R. Armada Jr., single.

3) Ordering the Register of Deeds of Pasay City to reconstitute and revive Transfer Certificate of
Title No. 16007 in the names of Jose, Crisostomo and Severo, Jr.

4) That plaintiffs be allowed to repurchase or redeem the share corresponding to the share of
Crisostomo Armada within thirty (30) days from notice in writing by Crisostomo Armada.

5) The defendants-appellees are jointly and severally ordered to pay the plaintiffs-appellants the
sum of P10,000.00 as moral damages.

6) The defendants-appellees are jointly and severally ordered to pay the plaintiff-appellants the
sum of P10,000.00 as attorney's fees and litigation expenses and costs of suit.
SO ORDERED." 3

The factual background of the case is as follows:

The 340 square meters of land, situated in San Jose District, Pasay City, the property in dispute,
originally belonged to Escolastica, wife of Severo Armada, Sr. This was covered by Transfer Certificate of
Title (TCT) No. (17345) 2460. During the lifetime of the spouses, the property was transferred to their
children and the Registry of Deeds, Pasay City, issued TCT No. 16007 in the names of the three sons, as
follows : "DR. CRISOSTOMO R. ARMADA, married to Cresenciana V. Alejo, 113.34 Square Meters;
JOSE R. ARMADA, married to Remedios Almanzor, 113.33 Square Meters; and DR. SEVERO R.
ARMADA, Jr., single, all of legal age, Filipinos." Annotated also in the title is the total cancellation of said
4

title "... by virtue of the Deed of Sale, (P.E. 77952/T-24751), dated March 28, 1979, executed by
CRESENCIANA V. ALEJO, as attorney-in-fact of CRISOSTOMO R. ARMADA, conveying 113.34 square
meters of the property herein, in favor of ANITA BONODE SI, married to Serafin D. Si, for the sum of
P75,000.00, issuing in lieu thereof Transfer Certificate of Title No. 24751, Reg. Book T-102. (Doc. No. 17,
Page No. 5, Book No. 253 of Notary Public of Pasay City, Manila, Julian Florentino)." 5

On April 15, 1980, herein spouses Jose Armada and Remedios Almanzor, filed a complaint for
Annulment of Deed of Sale and Reconveyance of Title with Damages, against herein petitioners Anita
and Serafin Si and Conrado Isada, brother-in-law of Cresenciana. Isada brokered the sale.

The complaint alleged that Conrado Isada sold Crisostomo's share by making it appear that Cresenciana,
the attorney-in-fact of her husband, is a Filipino citizen, residing with Isada at No. 13-4th Camarilla Street,
Murphy, Cubao, Quezon City. By this time, Crisostomo and Cresenciana had migrated and were already
citizens of the United States of America. It also stated that when petitioners registered the deed of
absolute sale they inserted the phrase "... and that the co-owners are not interested in buying the same in
spite of notice to them.", and that petitioners knew of the misrepresentations of Conrado. Further, the
complaint alleged that the other owners, Jose and Severo, Jr., had no written notice of the sale; and that
all upon learning of the sale to the spouses Si, private respondents filed a complaint for annulment of sale
and reconveyance of title with damages, claiming they had a right of redemption.

Petitioners, on the other hand, alleged that on October 2, 1954, Escolastica, with the consent of her
husband executed three separate deeds of sale (Exhibits 1, 2, and 3) conveying 113.34 square meters of
6

the property to Severo, and 113.33 square meters each to Crisostomo and Jose. The three deeds of sale
particularly described the portion conveyed to each son in metes and bounds. Petitioners contend that
since the property was already three distinct parcels of land, there was no longer co-ownership among
the brothers. Hence, Jose and Severo, Jr. had no right of redemption when Crisostomo sold his share to
the spouses Si. Petitioners point out that it was only because the Armada brothers failed to submit the
necessary subdivision plan to the Office of the Register of Deeds in Pasay City that separate titles were
not issued and TCT No. 16007 was issued and registered in the names of Jose, Crisostomo, and Severo,
Jr.

After trial on the merits, the court ruled for petitioners:

"IN VIEW OF ALL THE FOREGOING, the complaint is hereby DISMISSED. With costs against the
plaintiffs."
7

Private respondents appealed to the Court of Appeals. On March 25, 1994, the appellate court issued the
decision now assailed by petitioners. In reversing the decision of the trial court and ruling for private
respondents, the Court of Appeals found that:

"A careful examination of TCT No. 16007 (Exh. 'A') shows that the portion sold by virtue of the Deeds of
Sale (Exh. 1, 2, & 3) to the Armada brothers do not appear in the said title, neither does it indicate the
particular area sold. Moreover, no evidence was presented to show that the Register of Deeds issued
TCT No. 16007 (Exh. 'A') on the basis of the said deeds of Sale. In fact, TCT No. 16007 (Exh. 'A') shows
that the lot is co-owned by Jose, Crisostomo and Severo, Jr. in the proportion of 113.33, 113.34 and
113.33 sq. m. respectively.

Furthermore, the evidence on record shows that the Deed of Absolute Sale (Exh. 'B'), executed by
Cresencia Armada in favor of defendants Si, stated that the portion sold was the 'undivided one hundred
thirteen & 34/100 (113.34) square meters' of the parcel of land covered by TCT NO. 16007 of the Registry
of Deeds for Pasay City, which means that what was sold to defendants are still undetermined and
unidentifiable, as the area sold remains a portion of the whole.

Moreover, plaintiff Remedi[o]s Armada testified that on March 27, 1979, Crisostomo Armada, thru his
attorney-in-fact and co-defendant, Cresenciana Alejo, sold his undivided 113.34 share to defendants,
Sps. Si as evidenced by a Deed of Absolute Sale (Exh. 'B'), and presented for registration with the
Register of Deeds (Exh. 'B-1') without notifying plaintiffs of the sale (TSN, pp. 6-8, December 20, 1988).
Instead, it appears that the phrase 'and that the co-owners are not interested in buying the same inspite
of notice to them', was inserted in the Deed of Sale (Exh. 'B').

xxx

Otherwise stated, the sale by a (sic) co-owner of his share in the undivided property is not invalid, but
shall not be recorded in the Registry Property, unless accompanied by an affidavit of the Vendor that he
has given written notice thereof to all possible redemptioners."
8

On August 29, 1994, petitioners' counsel on record, Atty. Roberto B. Yam received a copy of the CA
decision. On October 14, 1994, he filed a motion for reconsideration, but it was denied by the Court of
Appeals on November 21, 1994, for being filed out of time.

On December 5, 1994, petitioners filed their motion for new trial under Section 1, Rule 53 of the Revised
Rules of Court. Petitioners presented new evidence, TCT No. (17345) 2460, registered in the name of
9

Escolastica de la Rosa, married to Severo Armada, Sr., with annotation at the back stating that the
cancellation was by virtue of three deeds of sale in favor of Escolastica's sons. On March 24, 1995,
respondent court denied the motion, reasoning that when the motion was filed, the reglementary period
had lapsed and the decision had become final and executory. Petitioners' motion for reconsideration of
said resolution was denied.

Hence, the present petition, alleging that:

"1. Respondent Court of Appeals committed a reversible error in ruling that a co-ownership still
existed.

"2. Respondent Court of Appeals committed a reversible error in denying the Motion for
Reconsideration of its Decision of 25 March 1994 on purely technical grounds.

"3. Respondent Court of Appeals committed a reversible error in denying the Motion for New
Trial.

"4. Respondent Court of Appeals committed a reversible error in ordering petitioners to pay moral
damages, attorney's fees, litigation expenses and the costs of the suit."10

In essence, this Court is asked to resolve: (1) whether respondent court erred in denying petitioners'
motion for reconsideration and/or the Motion for New Trial; (2) whether private respondents are co-
owners who are legally entitled to redeem the lot under Article 1623 of the Civil Code; and (3) whether
11

the award of moral damages, attorney's fees and costs of suit is correct.
The pivotal issue is whether private respondents may claim the right of redemption under Art. 1623 of the
Civil Code. The trial court found that the disputed land was not part of an undivided estate. It held that the
three deeds of absolute sale technically described the portion sold to each son. The portions belonging
12

to the three sons were separately declared for taxation purposes with the Assessor's Office of Pasay City
on September 21, 1970. Jose's testimony that the land was undivided was contradicted by his wife when
13

she said they had been receiving rent from the property specifically allotted to Jose. More significantly,
14

on January 9, 1995, the Registry of Deeds of Pasay City cancelled TCT 24751 and issued three new
titles as follows: (1) TCT 134594 in favor of Severo Armada, Jr.; (2) TCT 134595 under the name of
15 16

Anita Bonode Si, married to Serafin Si; and (3) TCT 134596 owned by Jose Armada, married to
17

Remedios Almanzor. All these are on record.

However, the Court of Appeals' decision contradicted the trial court's findings. 18

In instances when the findings of fact of the Court of Appeals are at variance with those of the trial court,
or when the inference drawn by the Court of Appeals from the facts is manifestly mistaken, this Court will
not hesitate to review the evidence in order to arrive at the correct factual conclusion. This we have done
19

in this case. It is our considered view now, that the trial court is correct when it found that:

"Rightfully, as early as October 2, 1954, the lot in question had already been partitioned when their
parents executed three (3) deed of sales (sic) in favor of Jose, Crisostomo and Severo, all surnamed
Armada (Exh. 1, 2, & 3), which documents purports to have been registered with the Register of Deeds of
Pasay City, on September 18, 1970, and as a consequence TCT No. 16007 (Exh. A) was issued.
Notably, every portion conveyed and transferred to the three sons was definitely described and
segregated and with the corresponding technical description (sic). In short, this is what we call
extrajudicial partition. Moreover, every portion belonging to the three sons has been declared for taxation
purposes with the Assessor's Office of Pasay City on September 21, 1970. These are the unblinkable
facts that the portion sold to defendant spouses Si by defendants Crisostomo Armada and Cresenciana
Armada was concretely determined and identifiable. The fact that the three portions are embraced in one
certificate of title does not make said portions less determinable or identifiable or distinguishable, one
from the other, nor that dominion over each portion less exclusive, in their respective owners. Hence, no
right of redemption among co-owners exists." (citation omitted)
20

". . . [T]he herein plaintiffs cannot deny the fact that they did not have knowledge about the impending
sale of this portion. The truth of the matter is that they were properly notified. Reacting to such knowledge
and notification they wrote defendant Dr. Crisostomo Armada on February 22, 1979, a portion of said
letter is revealing: 'Well you are the king of yourselves, and you can sell your share of
Levereza." (emphasis omitted)
21

After the physical division of the lot among the brothers, the community ownership terminated, and the
right of preemption or redemption for each brother was no longer available. 22

Under Art. 484 of the Civil Code, there is co-ownership whenever the ownership of an undivided thing or
23

right belongs to different persons. There is no co-ownership when the different portions owned by
different people are already concretely determined and separately identifiable, even if not yet technically
described. This situation makes inapplicable the provision on the right of redemption of a co-owner in the
24

Civil Code, as follows:

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

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

Moreover, we note that private respondent Jose Armada was well informed of the impending sale of
Crisostomo's share in the land. In a letter dated February 22, 1979, Jose told his brother Crisostomo:
"Well you are the king of yourselves, and you can sell your share of Leveriza." Co-owners with actual
25

notice of the sale are not entitled to written notice. A written notice is a formal requisite to make certain
that the co-owners have actual notice of the sale to enable them to exercise their right of redemption
within the limited period of thirty days. But where the co-owners had actual notice of the sale at the time
thereof and/or afterwards, a written notice of a fact already known to them, would be superfluous. The
statute does not demand what is unnecessary. 26

Considering that respondent Court of Appeals erred in holding that herein private respondent could
redeem the lot bought by petitioners, the issue of whether the appellate court erred in denying petitioners'
motions for reconsideration and new trial need not be delved into. The same is true with respect to the
1wphi1

questioned award of damages and attorney's fees. Petitioners filed their complaint in good faith and as
repeatedly held, we cannot put a premium on the right to litigate.

WHEREFORE, the petition is GRANTED, the Decision of the Court of Appeals dated March 25, 1994 and
its Resolutions dated March 24, 1995 and September 6, 1995 in CA-G.R. CV No. 30727 are ANNULLED
and SET ASIDE. Civil Case No. 8023-P is DISMISSED for lack of merit. The decision of the Regional
Trial Court of Pasay City, Branch 113, promulgated on August 29, 1989, is REINSTATED.

SO ORDERED.

SI v. CA- Right of Redemption

After physical division of a lot the community ownership is terminated and right of redemption is no longer
available.

FACTS:
Spouses Armada transferred their property to the names of their three sons namely, Crisotomo, Jose and
Severo. Crisostomo through Cresencia (atty-in-fact) executed a deed of sale in favor Anita Si.
Spouses Jose Armada (other brother) filed a complaint to annul the sale on the ground that there was no
written notice of such sale whereas the deed stated that the co-owners are not interested in buying the
land. Further, there was misrepresentation on the citizenship of Cresencia is a Filipino citizen.
Petitioners claimed that there was really no co-ownership since the parents executed three deeds of sale
assigning specific properties to the brothers. Since there is no-ownership it follows that there is no right to
redemption. Petitioners pointed out that it was only because the brothers failed to submit a subdivision
plan which is the reason why there is only one certificate of title.
Lower court dismissed the petition. CA reversed and said that co-ownership still exists and that the land
was undivided. Petitioners filed a motion for new trial on the basis that there was annotation at the back of
the original TCT due to the sale in favor of the brothers. CA denied because the reglementary period had
lapsed and the decision has become final and executory.

ISSUE:
Whether or not private respondents are co-owners and that they are entitled to right of redemption based
on Art 1623 of NCC.
RULING:
1. Trial court was correct in finding that the parents already partitioned the property which was registered
with the RD. Every portion conveyed and transferred was definitely described and segregated with
corresponding technical description. After this division co-ownership already ceased. Hence, there is no
right to redemption available to the respondents.

2. There was an actual notice of the impending sale and Jode even acknowledged such when he told his
brother Crisostomo in a letter Well you are the king of yourselves, and you can sell your share of
Leveriza. Written notice is no longer necessary when there is actual notice.

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 17,240.00.

(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 6,240.00.

(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 6780.00

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 15,000.00 for attorneys fees and other expenses of litigation and
50,000.00 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 17,240.00;

(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 6,240.00; 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 6,780.00.

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 110,000.00 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 2,000.00 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 15,000.00 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 Ocampo-Barrito and Vicente
Barrito have not acted in good faith, deliberately causing damage and injury to the
plaintiffs by their avaricious desire to obtain sole ownership of said properties through
dubious and illegal means that the defendant spouses Belen Ocampo-Barrito and
Vicente Barrito, through dubious means and undue influence over Fidela Ll. Ocampo, a
very old spinster whom they have lately taken into their custody, succeeded in having the
latter execute this supposed deed of donation inter vivos; that defendants have not acted
with justice, honesty and good faith, causing injury to plaintiffs rights in a manner
inconsistent with morals and good customs, hence, are liable for moral damages of not
less than 50,000.00; 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 50,000.00.

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-in-interest validly conveyed the
 property by donation inter vivos which she accepted in the same public instrument; that
TCT No. 1364 was issued to defendant Belen Ocampo-Barrito on the strength of the
donation inter vivos executed in her favor by her predecessor-in-interest and has since
30 September 1987, been the absolute owner thereof; that since 1949 none of the
plaintiffs ever questioned the absolute ownership and title of defendant Belen Ocampo-
Barritos predecessor-in-interest over the property making the decree of registration
incontrovertible; that it is fatal for plaintiffs cause of action to allege that defendants
exerted undue influence over Fidela Ll. Ocampo for the latter to execute the deed of
donation while clearly admitting in both the original and supplemental complaints that
defendants are residents of Mindoro Occidental a far away place from Nabua, Camarines
Sur, the place where the same 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 200,000.00 for moral damages, 50,000.00 for
exemplary damages, 100,000.00 as compensatory damages, to pay attorneys fees in
the amount of 15,000.00, 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-in-interest. Since the former failed to do so, how then can they prove the transfer to them of
ownership that has not been established in the first place? It is axiomatic that no one can transfer to
another a right greater than that which one has;18 thus, the legal truism that the spring cannot rise higher
than its source.19

Likewise, in this Deed of Absolute Sale, Adolfo Ocampo declared his "exclusive ownership" of the
property, "having been acquired by purchase[;] and [having] been in [his] continuous, public, peaceful,
adverse and material possession for more than 50 years together with [his] predecessors in rights and
interest, in [the] concept of owner without any claim of other persons."20
Second, Respondent Belen proved that on February 10, 1953, this property had been sold to Fidela by
Felix Ocampo for a valuable consideration; and that Fidela had entered the property, actually occupied it,
and exercised all powers of dominion over it to the exclusion of petitioners.

As proofs of ownership of the property by Fidela, Belen presented Transfer Certificate of Title No. RT-
4389 (983),21which 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 co-
owner shall be limited to the portion that may be allotted to that person upon the termination of the co-
ownership.26 In this case, Fidela mortgaged a definiteportion 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.32It 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. -- 1-15-61."37

Neither can we accept petitioners contention that co-ownership is shown by the fact that some of the
children of Spouses Ocampo stayed, lived, and even put up businesses on the property. The appellate
court correctly found that since the litigants in this case were blood relatives, fraternal affection could
have been a good motive that impelled either Belen or Fidela to allow petitioners to use the property.
Without any proof, however, co-ownership among the parties cannot be presumed.

Neither are we persuaded by the contention that Spouses Ocampo placed the subject property in the
name of only one person in accordance with a Chinese custom. As mentioned earlier, that custom
consisted of placing properties of parents in the name of the eldest unmarried son or daughter, with the
implicit understanding that ownership thereof would later revert to the siblings.

In contrast to the failure of petitioners to prove that such custom existed and was practiced in that
place,38 Belen presented evidence that clearly negated any claim of ownership by the formers
predecessors-in-interest. Having shown that the property in question was originally owned by one Adolfo
Ocampo -- not by Spouses Ocampo, from whom petitioners derive their right -- the claim of custom
becomes immaterial.

The fact that Fidela was not presented in court will not necessarily favor petitioners and prove that the
property in question is indeed co-owned. If they felt that her testimony would prove their cause, then they
could have easily called her as an adverse or a hostile witness.39 But since respondents were confident in
the documents they presented in court, they did not see any need to call her as a witness.

Petitioners also question the motives of Fidela for donating her properties, when she is still alive and
needs money in her old age. They clearly overlook the nature of a donation.

Donation is an act of liberality whereby a person gratuitously disposes of a thing or a right in favor of
another who accepts it.40 Once perfected, a donation is final; its revocation or rescission cannot be
effected, absent any legal ground therefor.41 A donation may in fact comprehend the entire property of the
donor.42 At any rate, the law provides that donors should reserve, in full ownership or in usufruct, sufficient
means for their own support and that of all their relatives who, at the time of the acceptance of the
donation, are by law entitled to be supported by them.43

In questioning the motives of Fidela for donating the subject property, petitioners are contradicting even
themselves. On the one hand, they assert that she would not have disposed of her property, since she
would need it in her old age; on the other, they argue that it was not hers alone anyway. It should be clear
that the law protects donors by providing that, without any reservation of sufficient means for themselves,
the donation shall be reduced upon the petition of any person affected. 44

To be sure, petitioners arguments all pertain to circumstances extraneous to the Deed of Donation itself.
The law is clear that when its terms have been reduced to writing, an agreement must be presumed to
contain all the terms agreed upon; and there can be, between the parties and their successors in interest,
no evidence of such terms other than the contents of the written agreement.45

Petitioners did not question the consent of Fidela to the donation. Never was there any intimation that she
had either been coerced or defrauded into entering into it. As all the essential elements of a donation --
consent, subject matter and cause46 -- have been satisfied, we see no reason to entertain any doubt
about the Deed pertaining thereto.

The question of why the land was registered several years after the donation is purely speculative. What
is important is that there was a duly proven Deed of Donation, which formed the basis of Belens claim
and led to the registration of the property in her name.

Petitioners also question Fidelas filing of an unlawful detainer suit after the date of the Deed of Donation.
Again, we remind petitioners that because this action involves property, they should rely on the strength
of their own title, not on the alleged weakness of the claim of respondents. At any rate, the burden of
proof of the claim of co-ownership rests on the former.
Moreover, the final resolution of this case entails the review of factual findings of the courts below. It is a
settled doctrine that in a civil case, final and conclusive are the factual findings of the trial court, if
supported by clear and convincing evidence on record. Usually, the Supreme Court does not review
those findings -- especially when affirmed by the Court of Appeals, as in this case. 47 From the records of
the present case, no cogent evidence appears that would impel us to apply the above doctrine differently.
The courts below have not overlooked essential facts that, if considered, may produce a different
outcome. The trial court correctly explained thus:

"This Court from the outset had the opportunity to see and hear the tell-tale [signs] of truthfulness
or perjury like the flush of face, or the tone of voice, or the dart of eyes, or the fearful pause [--]
and finds that credibility is with the defendants [herein respondents]. Moreover, the
preponderance of evidence is with defendants whose testimonial evidences are buttressed by
their documentary evidences."48

Finally, we agree with the CA in eliminating the awards for damages and attorneys fees for respondents
failure to show any factual, legal or equitable bases therefor.49

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

SO ORDERED.

Davide, Jr., Ynares-

G.R. No. 152766 June 20, 2003

LILIA SANCHEZ, Petitioner,

vs.
COURT OF APPEALS, HON. VICTORINO S. ALVARO as Presiding Judge, RTC-Br. 120, Caloocan
City, and VIRGINIA TERIA, Respondents.

DECISION

BELLOSILLO, J.:

This is a Special Civil Action for Certiorari under Rule 65 of the Rules of Court to annul and set aside the
Decision of the Court of Appeals dated 23 May 2001 as well as its Resolution dated 8 January 2002 in
CA-G.R. SP No. 59182.

Lilia Sanchez, petitioner, constructed a house on a 76-square meter lot owned by her parents-in-law. The
lot was registered under TCT No. 263624 with the following co-owners: Eliseo Sanchez married to Celia
Sanchez, Marilyn Sanchez married to Nicanor Montalban, Lilian Sanchez, widow, Nenita Sanchez, single,
Susana Sanchez married to Fernando Ramos, and Felipe Sanchez. On 20 February 1995, the lot was
1

registered under TCT No. 289216 in the name of private respondent Virginia Teria by virtue of a Deed of
Absolute Sale supposed to have been executed on 23 June 1995 by all six (6) co-owners in her
2

favor. Petitioner claimed that she did not affix her signature on the document and subsequently refused to
3

vacate the lot, thus prompting private respondent Virginia Teria to file an action for recovery of
possession of the aforesaid lot with the Metropolitan Trial Court (MeTC) of Caloocan City sometime in
September 1995, subsequently raffled to Br. 49 of that court.

On 12 February 1998, the MeTC-Br. 49 of Caloocan City ruled in favor of private respondent declaring
that the sale was valid only to the extent of 5/6 of the lot and the other 1/6 remaining as the property of
petitioner, on account of her signature in the Deed of Absolute Sale having been established as a forgery.
Petitioner then elevated her appeal to the Regional Trial Court of Caloocan City, subsequently assigned
to Br. 120, which ordered the parties to file their respective memoranda of appeal. Counsel for petitioner
did not comply with this order, nor even inform her of the developments in her case. Petitioner not having
filed any pleading with the RTC of Caloocan City, the trial court affirmed the 27 July 1998 decision of the
MeTC.

On 4 November 1998, the MeTC issued an order for the issuance of a writ of execution in favor of private
respondent Virginia Teria, buyer of the property. On 4 November 1999 or a year later, a Notice to Vacate
was served by the sheriff upon petitioner who however refused to heed the Notice.

On 28 April 1999 private respondent started demolishing petitioners house without any special permit of
demolition from the court.

Due to the demolition of her house which continued until 24 May 1999 petitioner was forced to inhabit the
portion of the premises that used to serve as the houses toilet and laundry area.

On 29 October 1999 petitioner filed her Petition for Relief from Judgment with the RTC on the ground that
she was not bound by the inaction of her counsel who failed to submit petitioners appeal memorandum.
However the RTC denied the Petition and the subsequent Motion for Reconsideration.

On 14 June 2000 petitioner filed her Petition for Certiorari with the Court of Appeals alleging grave abuse
of discretion on the part of the court a quo.

On 23 May 2001 the appellate court dismissed the petition for lack of merit. On 18 June 2001 petitioner
1wphi1

filed a Motion for Reconsideration but the Court of Appeals denied the motion in its Resolution of 8
January 2002.

The only issue in this case is whether the Court of Appeals committed grave abuse of discretion in
dismissing the challenged case before it.

As a matter of policy, the original jurisdiction of this Court to issue the so-called extraordinary writs should
generally be exercised relative to actions or proceedings before the Court of Appeals or before
constitutional or other tribunals or agencies the acts of which for some reason or other are not
controllable by the Court of Appeals. Where the issuance of the extraordinary writ is also within the
competence of the Court of Appeals or the Regional Trial Court, it is either of these courts that the
specific action for the procurement of the writ must be presented. However, this Court must be convinced
thoroughly that two (2) grounds exist before it gives due course to a certiorari petition under Rule 65: (a)
The tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess
of its or his jurisdiction; and (b) There is no appeal nor any plain, speedy and adequate remedy in the
ordinary course of law.

Despite the procedural lapses present in this case, we are giving due course to this petition as there are
matters that require immediate resolution on the merits to effect substantial justice.

The Rules of Court should be liberally construed in order to promote their object of securing a just,
speedy and inexpensive disposition of every action or proceeding. 4

The rules of procedure should be viewed as mere tools designed to aid the courts in the speedy, just and
inexpensive determination of the cases before them. Liberal construction of the rules and the pleadings is
the controlling principle to effect substantial justice. Litigations should, as much as possible, be decided
5

on their merits and not on mere technicalities. 6

Verily, the negligence of petitioners counsel cannot be deemed as negligence of petitioner herself in the
case at bar. A notice to a lawyer who appears to have been unconscionably irresponsible cannot be
considered as notice to his client. Under the peculiar circumstances of this case, it appears from the
7

records that counsel was negligent in not adequately protecting his clients interest, which necessarily
calls for a liberal construction of the Rules.

The rationale for this approach is explained in Ginete v. Court of Appeals - 8

This Court may suspend its own rules or exempt a particular case from its operation where the appellate
court failed to obtain jurisdiction over the case owing to appellants failure to perfect an appeal. Hence,
with more reason would this Court suspend its own rules in cases where the appellate court has already
obtained jurisdiction over the appealed case. This prerogative to relax procedural rules of the most
mandatory character in terms of compliance, such as the period to appeal has been invoked and granted
in a considerable number of cases x x x x

Let it be emphasized that the rules of procedure should be viewed as mere tools designed to facilitate the
attainment of justice. Their strict and rigid application, which would result in technicalities that tend to
frustrate rather than promote substantial justice, must always be eschewed. Even the Rules of Court
reflect this principle. The power to suspend or even disregard rules can be so pervasive and compelling
as to alter even that which this Court itself has already declared to be final, as we are now constrained to
do in the instant case x x x x

The emerging trend in the rulings of this Court is to afford every party litigant the amplest opportunity for
the proper and just determination of his cause, free from the constraints of technicalities. Time and again,
this Court has consistently held that rules must not be applied rigidly so as not to override substantial
justice.

Aside from matters of life, liberty, honor or property which would warrant the suspension of the Rules of
the most mandatory character and an examination and review by the appellate court of the lower courts
findings of fact, the other elements that should be considered are the following: (a) the existence of
special or compelling circumstances, (b) the merits of the case, (c) a cause not entirely attributable to the
fault or negligence of the party favored by the suspension of the rules, (d) a lack of any showing that the
review sought is merely frivolous and dilatory, and (e) the other party will not be unjustly prejudiced
thereby.9

The suspension of the Rules is warranted in this case since the procedural infirmity was not entirely
attributable to the fault or negligence of petitioner. Besides, substantial justice requires that we go into the
merits of the case to resolve the present controversy that was brought about by the absence of any
partition agreement among the parties who were co-owners of the subject lot in question. Hence, giving
due course to the instant petition shall put an end to the dispute on the property held in common.

In Peoples Homesite and Housing Corporation v. Tiongco we held:

10

There should be no dispute regarding the doctrine that normally notice to counsel is notice to parties, and
that such doctrine has beneficent effects upon the prompt dispensation of justice. Its application to a
given case, however, should be looked into and adopted, according to the surrounding circumstances;
otherwise, in the courts desire to make a short-cut of the proceedings, it might foster, wittingly or
unwittingly, dangerous collusions to the detriment of justice. It would then be easy for one lawyer to sell
ones rights down the river, by just alleging that he just forgot every process of the court affecting his
clients, because he was so busy. Under this circumstance, one should not insist that a notice to such
irresponsible lawyer is also a notice to his clients.

Thus, we now look into the merits of the petition.

This case overlooks a basic yet significant principle of civil law: co-ownership. Throughout the
proceedings from the MeTC to the Court of Appeals, the notion of co-ownership was not sufficiently dealt
11

with. We attempt to address this controversy in the interest of substantial justice. Certiorari should
therefore be granted to cure this grave abuse of discretion.

Sanchez Roman defines co-ownership as "the right of common dominion which two or more persons
have in a spiritual part of a thing, not materially or physically divided. Manresa defines it as the
12

"manifestation of the private right of ownership, which instead of being exercised by the owner in an
exclusive manner over the things subject to it, is exercised by two or more owners and the undivided
thing or right to which it refers is one and the same." 13

The characteristics of co-ownership are: (a) plurality of subjects, who are the co-owners, (b) unity of or
material indivision, which means that there is a single object which is not materially divided, and which is
the element which binds the subjects, and, (c) the recognition of ideal shares, which determines the rights
and obligations of the co-owners. 14

In co-ownership, the relationship of such co-owner to the other co-owners is fiduciary in character and
attribute. Whether established by law or by agreement of the co-owners, the property or thing held pro-
indiviso is impressed with a fiducial nature so that each co-owner becomes a trustee for the benefit of his
co-owners and he may not do any act prejudicial to the interest of his co-owners. 15

Thus, the legal effect of an agreement to preserve the properties in co-ownership is to create an express
trust among the heirs as co-owners of the properties. Co-ownership is a form of trust and every co-owner
is a trustee for the others. 16

Before the partition of a land or thing held in common, no individual or co-owner can claim title to any
definite portion thereof. All that the co-owner has is an ideal or abstract quota or proportionate share in
the entire land or thing.
17

Article 493 of the Civil Code gives the owner of an undivided interest in the property the right to freely sell
and dispose of it, i.e., his undivided interest. He may validly lease his undivided interest to a third party
independently of the other co-owners. But he has no right to sell or alienate a concrete, specific or
18

determinate part of the thing owned in common because his right over the thing is represented by a quota
or ideal portion without any physical adjudication.19

Although assigned an aliquot but abstract part of the property, the metes and bounds of petitioners lot
has not been designated. As she was not a party to the Deed of Absolute Sale voluntarily entered into by
the other co-owners, her right to 1/6 of the property must be respected. Partition needs to be effected to
protect her right to her definite share and determine the boundaries of her property. Such partition must
be done without prejudice to the rights of private respondent Virginia Teria as buyer of the 5/6 portion of
the lot under dispute.

WHEREFORE, the Petition is GRANTED. The Decision of the Court of Appeals dated 23 May 2001 as
well as its Resolution dated 8 January 2002 in CA-G.R. SP No. 59182 is ANNULLED and SET ASIDE. A
survey of the questioned lot with TCT No. 289216 (formerly TCT No. 263624) by a duly licensed geodetic
engineer and the PARTITION of the aforesaid lot are ORDERED.

Let the records of this case be REMANDED to MeTC-Br. 49, Caloocan City to effect the aforementioned
survey and partition, as well as segregate the 1/6 portion appertaining to petitioner Lilia Sanchez.

The Deed of Absolute Sale by the other co-owners to Virginia Teria shall be RESPECTED insofar as the
other undivided 5/6 portion of the property is concerned.
SO ORDERED.

G.R. No. 122904 April 15, 2005

ADORACION E. CRUZ, THELMA DEBBIE E. CRUZ, GERRY E. CRUZ and NERISSA CRUZ-
TAMAYO, Petitioner,
vs.
THE HONORABLE COURT OF APPEALS, SUMMIT FINANCING CORP., VICTOR S. STA. ANA,
MAXIMO C. CONTRERAS, RAMON G. MANALASTAS, and VICENTE TORRES, Respondents.

DECISION

TINGA, J.:

This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure. Petitioners
are assailing the Decision of the Court of Appeals in CA-G.R.CV No. 41298 which reversed and set aside
1

the Decision of the Regional Trial Court (RTC), Branch CLXIII, Pasig in Civil Case No. 49466 and
2

dismissed petitioners' complaint therein for annulment of certain deeds, and the November 21,
1995 Resolution, which denied petitioners' motion for reconsideration.
3

Herein petitioner Adoracion Cruz is the mother of her co-petitioners Thelma Cruz, Gerry Cruz and Nerissa
Cruz Tamayo, as well as Arnel Cruz, who was one of the defendants in Civil Case No. 49466. Petitioners
filed said case on February 11, 1983 against Arnel Cruz and herein private respondents Summit
Financing Corporation ("Summit"), Victor S. Sta. Ana and Maximo C. Contreras, the last two in their
capacities as deputy sheriff and ex-officio sheriff of Rizal, respectively, and Ramon G. Manalastas in his
capacity as Acting Register of Deeds of Rizal.

The Complaint alleged that petitioners and Arnel Cruz were co-owners of a parcel of land situated in
4

Taytay, Rizal. Yet the property, which was then covered by Transfer Certificate of Title (TCT) No. 495225,
was registered only in the name of Arnel Cruz. According to petitioners, the property was among the
properties they and Arnel Cruz inherited upon the death of Delfin Cruz, husband of Adoracion Cruz.

On August 22, 1977, petitioners and Arnel Cruz executed a Deed of Partial Partition, distributing to each
5

of them their shares consisting of several lots previously held by them in common. Among the properties
adjudicated to defendant Cruz was the parcel of land covered at the time by TCT No. 495225. It is the
subject of this case.

Subsequently, the same parties to the Deed of Partial Partition agreed in writing to share equally in the
proceeds of the sale of the properties although they had been subdivided and individually titled in the
names of the former co-owners pursuant to the Deed of Partial Partition. This arrangement was embodied
in a Memorandum of Agreement< executed on August 23, 1977 or a day after the partition. The tenor of
6

the Memorandum of Agreementwas annotated at the back of TCT No. 495225 on September 1, 1977.

Sometime in January 1983, petitioner Thelma Cruz discovered that TCT No. 495225 had already been
cancelled by TCT No. 514477 which was issued on October 18, 1982 in the name of Summit. Upon
further investigation, petitioners learned that Arnel Cruz had executed a Special Power of Attorney on
7

May 16, 1980 in favor of one Nelson Tamayo, husband of petitioner Nerissa Cruz Tamayo, authorizing
him to obtain a loan in the amount of One Hundred Four Thousand Pesos (P104,000.00) from
respondent Summit, to be secured by a real estate mortgage on the subject parcel of land.

On June 4, 1980, a Real Estate Mortgage was constituted on the disputed property then covered by TCT
8

No. 495225 to secure the loan obtained by Arnel Cruz thru Nelson Tamayo from respondent Summit.
Since the loan had remained outstanding on maturity, Summit instituted extrajudicial foreclosure
proceedings, and at the foreclosure sale it was declared the highest bidder. Consequently, Sheriff Sta.
Ana issued a Certificate of Sale to respondent Summit, which more than a year later consolidated its
9

ownership of the foreclosed property. Upon presentation of the affidavit of consolidation of ownership, the
Acting Register of Deeds of Rizal cancelled TCT No. 495225 and issued, in lieu thereof, TCT No. 514477
in the name of respondent Summit.

In their complaint before the RTC, petitioners asserted that they co-owned the properties with Arnel Cruz,
as evidenced by the Memorandum of Agreement. Hence, they argued that the mortgage was void since
they did not consent to it.

In ruling in favor of petitioners, the trial court declared that with the execution of the Memorandum of
Agreement, petitioners and Arnel Cruz had intended to keep the inherited properties in a state of co-
ownership. The trial court stated that respondent Summit should suffer the consequences of incorrectly
assuming that Arnel Cruz was the exclusive owner of the mortgaged property. It found respondent
Summit negligent in its failure to inquire further into the limitations of defendant Cruz's title. Thus, the trial
court declared that only the undivided share of Cruz in the mortgaged property was validly transferred to
respondent Summit although it granted petitioners' prayer for nullification, per the dispositive portion of
its Decision, thus:

WHEREFORE, judgment is hereby rendered, in favor of plaintiff and against defendants, as

follows:

1. Declaring the "Special Power of Attorney," the Real Estate Mortgage, the "Public
Auction Sale," the "Certificate of Sale," the "Affidavit of Consolidation," executed by
defendant Summit Financing Corporation, and the Consolidation of Ownership null and
void ab initio;

2. Ordering the Register of Deeds of Rizal, to cancel TCT No. 514477, and to issue, in
lieu thereof another TCT, in the name of Arnel E. Cruz, with the same annotations on the
Real Estate Mortgage inscribed on September 16, 1980 and thereafter.

3. Ordering defendants, jointly and severally, to pay to plaintiffs, the amount

of P10,000.00, as reasonable attorney's fees, plus costs.

4. Dismissing defendants (sic) counterclaims, for lack of merit.

SO ORDERED. 10

With the exception of Arnel Cruz, the other defendants, who are herein private respondents, elevated the
case to the Court of Appeals. Private respondents as appellants therein argued, among others, that the
trial court erred in not holding Arnel Cruz as the sole and exclusive owner of the mortgaged property, in
not holding petitioners in estoppel, and in not finding that under the Memorandum of Agreement the
parties thereto merely agreed to share in the proceeds of the sale of the properties. Private respondents
also questioned the trial court's nullification of the special power of attorney and its declaration that
respondent Summit was grossly negligent in not verifying the capacity of Arnel Cruz. 11

In the assailed Decision, the Court of Appeals reversed the trial court's decision. The appellate court
stressed that the Memorandum of Agreement does not contain any proscription against the mortgage of
the subject property although it provides that the parties thereto are entitled to share in the proceeds of
the sale of the properties covered by it. In that regard, the appellate court noted that petitioner Adoracion
Cruz had executed two other real estate mortgages on the other parcels of land, which were not objected
to by her supposed co-owners. Thus, it upheld the validity of the real estate mortgage executed by
Nelson Tamayo on behalf of Arnel Cruz, without prejudice to petitioners' right of action against Arnel Cruz
for the collection of the proceeds of the loan. 12
Petitioners moved for the reconsideration of the decision, but the Court of Appeals denied it in the
assailed Resolution dated November 21, 1995.

Hence, the present petition which at the bottom presents the issue whether or not the real estate
mortgage on the property then covered by TCT No. 495225 is valid. Resolution of the issue in turn
depends on the determination of whether the mortgaged property was the exclusive property of Arnel
Cruz when it was mortgaged. If answered in the affirmative, then there was nothing to prevent him from
exercising ownership over the said property.

Petitioners insist that the Memorandum of Agreement "expressly created a pro-indiviso co-ownership over
the property." Thus, petitioners argue that the Court of Appeals erred in upholding the validity of the
13

mortgage considering that it was executed without their knowledge and consent.

On the other hand, private respondents rely on the provisions of the Deed of Partial Partition in claiming
that defendant Cruz was already the exclusive owner of the disputed property at the time it was
mortgaged. To further bolster their claim, private respondents assert that each of petitioners also
executed real estate mortgages on the properties allocated to them in the partition deed as absolute
owners in fee simple.

This Court finds no merit in the petition.

Co-ownership is terminated upon judicial or extra-judicial partition of the properties owned in common.
Partition, in general, is the separation, division and assignment of a thing held in common among those to
whom it may belong. Every act which is intended to put an end to indivision among co-heirs and legatees
14

or devisees is deemed to be a partition, although it should purport to be a sale, an exchange, a

compromise, or any other transaction. 15

From a reading of the following provisions of the Deed of Partial Partition, no other meaning can be
gathered other than that petitioners and Arnel Cruz had put an end to the co-ownership, to wit:

That the parties hereto are common co-owners pro-indiviso in equal shares of the following
registered real properties . . .

That there are no liens and encumbrance of whatsoever nature and kind on the above-described
real properties except . . .;

That the said liability was actually inscribed and annotated in the aforesaid titles on July 19, 1967
. . .;

That since July 19, 1967 and up to this writing two years have already lapsed and no claim has
been filed against the estate of said Delfin I. Cruz . . .;

That the parties hereto mutually decided to end their common ownership pro-indiviso over the
above-described properties and agreed to partition the same as follows:

(1) To be adjudicated to THELMA E. CRUZ: . . .

(2) To be adjudicated to NERISSA CRUZ-TAMAYO: . . .

(3) To be adjudicated to ARNEL E. CRUZ:

(a) ...
 (b) Lot 1-C-2-B-2-B-4-P-4, (LRC) PSD-264936

(c ) ...

(d) ...

(4) To be adjudicated to GERRY E. CRUZ: . . .

(5) To be adjudicated to ADORACION E. CRUZ: . . .

That the contracting parties warrant unto each other quiet and peaceful possession as owners
and possessors of their respective shares in the partition . . . (emphasis supplied)
16

In the aforesaid deed, the shares of petitioners and Arnel Cruz's in the mass of co-owned properties were
concretely determined and distributed to each of them. In particular, to Arnel Cruz was assigned the
disputed property. There is nothing from the words of said deed which expressly or impliedly stated that
petitioners and Arnel Cruz intended to remain as co-owners with respect to the disputed property or to
any of the properties for that matter. It is well-settled in both law and jurisprudence, that contracts are the
law between the contracting parties and should be fulfilled, if their terms are clear and leave no room for
doubt as to the intention of the contracting parties.17

To be considered a co-owner, one "must have a spiritual part of a thing which is not physically divided, or
each of them 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." In Dela Cruz v. Cruz, et al., this Court
18 19

denied the prayer for legal redemption of plaintiff-appellant therein because "the portions of appellant-
plaintiff and of the defendant spouses are concretely determined and identifiable, for to the former
belongs the northern half, and to the latter belongs the remaining southern half, of the land." 20

Petitioners do not question the validity or efficacy of the Deed of Partial Partition. In fact, they admitted its
existence in their pleadings and submitted it as part of their evidence. Thus, the deed should be accorded
its legal dire effect. Since a partition legally made confers upon each heir the exclusive ownership of the
property adjudicated to him, it follows that Arnel Cruz acquired absolute ownership over the specific
21

parcels of land assigned to him in the Deed of Partial Partition, including the property subject of this case.
As the absolute owner thereof then, Arnel Cruz had the right to enjoy and dispose of the property, as well
22

as the right to constitute a real estate mortgage over the same without securing the consent of petitioners.

On the other hand, there is absolutely nothing in the Memorandum of Agreement which diminishes the
right of Arnel Cruz to alienate or encumber the properties allotted to him in the deed of partition. The
following provisions of the agreement, which recognize the effects of partition, negate petitioner's claim
that their consent is required to make the mortgage in favor of respondent Summit valid, to wit:

That the parties hereto are common co-owners pro-indiviso in equal shares of the following
registered real properties . . .

That as a result of said partial partition, the properties affected were actually partitioned and the
respective shares of each party, adjudicated to him/her;

That despite the execution of this Deed of Partial Partition and the eventual disposal or sale of
their respective shares, the contracting parties herein covenanted and agreed among themselves
and by these presents do hereby bind themselves to one another that they shall share alike and
receive equal shares from the proceeds of the sale of any lot or lots allotted to and adjudicated in
their individual names by virtue of this deed of partial partition;
 That this Agreement shall continue to be valid and enforceable among the contracting parties
herein up to and until the last lot is covered by the deed of partial partition above adverted to shall
have been disposed of or sold and the proceeds thereof equally divided and their respective
shares received by each of them. (emphasis supplied)
23

As correctly held by the Court of Appeals, the parties only bound themselves to share in the proceeds of
the sale of the properties. The agreement does not direct reconveyance of the properties to reinstate the
common ownership of the parties. To insist that the parties also intended to re-establish co-ownership
after the properties had been partitioned is to read beyond the clear import of the agreement and to
render nugatory the effects of partition, which is not the obvious or implied intent of the parties.

Moreover, to ascertain the intent of the parties in a contractual relationship, it is imperative that the
various stipulations provided for in the contracts be construed together, consistent with the parties'
contemporaneous and subsequent acts as regards the execution of the contract. Subsequent to the
24

execution of the Deed of Partition andMemorandum of Agreement, the properties were titled individually
in the names of the co-owners to which they were respectively adjudicated, to the exclusion of the other
co-owners. Petitioners Adoracion Cruz and Thelma Cruz separately sold the properties distributed to
them as absolute owners thereof. Being clear manifestations of sole and exclusive dominion over the
properties affected, the acts signify total incongruence with the state of co-ownership claimed by
petitioners. Thus, this Court holds that the real estate mortgage on the disputed property is valid and
does not contravene the agreement of the parties.

WHEREFORE, the instant petition is DENIED. The assailed Decision and Resolution of the Court of
Appeals in CA-G.R. CV No. 41298 are hereby AFFIRMED. Costs against petitioners.

SO ORDERED.

G.R. No. 161136 November 16, 2006

WILFREDO T. VAGILIDAD and LOLITA A. VAGILIDAD, Petitioners,

vs.
GABINO VAGILIDAD, Jr. and DOROTHY VAGILIDAD, Respondents.

DECISION

PUNO, J.:

This is a Petition for Review on Certiorari of the Decision1 and Resolution2 of the Court of Appeals in CA-
G.R. No. CV-68318 dated March 19, 2003 and November 13, 2003, respectively, reversing and setting
aside the decision of the Regional Trial Court of Antique, Sixth Judicial Region, Branch II, in Civil Case
No. 2825 dated January 26, 1999.

The facts are stated in the assailed Decision3 of the appellate court, viz.:

A parcel of land, Lot No. 1253, situated in Atabay, San Jose, Antique, measuring 4,280 square meters,
was owned by Zoilo [Labiao] (hereafter ZOILO) as per Original Certificate of Title No. RO-2301 issued on
March 3, 1931. Sometime in 1931, ZOILO died. Subsequently, on May 12, 1986, Loreto Labiao (hereafter
LORETO), son of ZOILO, sold to Gabino Vagilidad Jr. (hereafter GABINO JR.) a portion of Lot No. 1253
(hereafter Lot 1253-B), measuring 1,604 square meters as evidenced by the Deed of Absolute Sale
executed by LORETO.

In view of the death of ZOILO, his children, LORETO, Efren Labiao (hereafter EFREN) and Priscilla
Espanueva (hereafter PRISCILLA) executed an Extrajudicial x x x Settlement of Estate dated January 20,
1987, adjudicating the entire Lot No. 1253, covering 4,280 square meters, to LORETO. On January 29,
1987, Transfer Certificate of Title (TCT) No. T-16693 was issued in favor of LORETO, EFREN and
PRISCILLA, but on even date, TCT No. T-16693 was cancelled and TCT No. T-16694, covering the said
property, was issued in the name of LORETO alone.

On July 31, 1987, GABINO JR., as petitioner, filed a Petition for the Surrender of TCT No. T-16694,
covering Lot No. 1253, with the Regional Trial Court of San Jose City, Sixth Judicial Region, against
LORETO, docketed as Cadastral Case No. 87-731-A. The plaintiff alleged that, being the owner of x x x
Lot No. 1253-B, under TCT No. T-16694, by virtue of the sale that took place on May 12, 1986, he is
entitled to ask for the surrender of the owners copy of TCT No. T-16694 to the Register of Deeds of
Antique in order to effect the transfer of title to the name of the petitioner. However, as per motion of both
counsels[,] since the parties seemed to have already reached an amicable settlement without the
knowledge of their counsels, the trial court issued an Order dated March 21, 1994 sending the case to the
archives.

On September 21, 1988, [GABINO JR.] paid real estate taxes on the land he bought from LORETO as
per Tax Declaration No. 1038 where the property was specified as Lot No. 1253-B. GABINO JR.
thereafter sold the same lot to Wilfredo Vagilidad (hereafter WILFREDO) as per Deed of Absolute Sale
dated December 7, 1989. On even date, Deed of Absolute Sale of a Portion of Land involving the opt-
described property was also executed by LORETO in favor of WILFREDO. The aforementioned deeds,
which were both executed on December 7, 1989 [and] notarized by Atty. Warloo Cardenal[,] [appear] to
have been given the same entry number in his notarial books as both contained the designation
"Document No. 236, Page No. 49, Book No. XI, Series of 1989[."]

Corollarily, on February 14, 1990, the sale of Lot No. 1253-B to WILFREDO was registered with the
Registry of Deeds of the Province of Antique under Entry No. 180425. Consequently, TCT No. T-18023,
cancelling TCT No. 16694, was issued in favor of WILFREDO pursuant to the Deed of Absolute Sale
dated December 7, 1989.

On October 24, 1991, spouses WILFREDO and LOLITA obtained a loan from the Philippine National
Bank (PNB for brevity) in the amount of 150,000.00 and mortgaged Lot No. 1253-B as collateral of the
said loan and the transaction was inscribed at the back of TCT No. 18023 as Entry No. 186876.
Subsequently, the xxx real estate mortgage was cancelled under Entry No. 191053 as per inscription
dated November 17, 1992 in xxx TCT No. 18023.

Subsequently, WILFREDO obtained another loan from Development Bank of the Philippines (DBP for
brevity) in the amount of 200,000.00 and mortgaged Lot No. 1253-B as collateral of the xxx loan and the
transaction was inscribed at the back of TCT No. 18023 as Entry No. 196268. The said loan was paid
and, consequently, the mortgage was cancelled as Entry No. 202500.

On September 29, 1995, spouses GABINO and Ma. Dorothy Vagilidad (hereafter DOROTHY), as
plaintiffs, filed a Complaint for Annulment of Document, Reconveyance and Damages, with the Regional
Trial Court of Antique, Sixth Judicial Region, Branch 11, against spouses WILFREDO and Lolita Vagilidad
(hereafter LOLITA), docketed as Civil Case No. 2825. The plaintiffs claimed that they are the lawful
owners of Lot No. 1253-B which was sold to him by LORETO in 1986. They alleged that [GABINO JR.] is
a nephew of defendant WILFREDO. They likewise raised that when GABINO SR. died, defendant
WILFREDO requested GABINO JR. to transfer the ownership of Lot No. 1253-B in defendant
WILFREDOs name for loaning purposes with the agreement that the land will be returned when the
plaintiffs need the same. They added that, pursuant to the mentioned agreement, plaintiff GABINO JR.,
without the knowledge and consent of his spouse, DOROTHY, executed the Deed of Sale dated
December 7, 1989 in favor of defendant WILFREDO receiving nothing as payment therefor. They pointed
out that after defendant WILFREDO was able to mortgage the property, plaintiffs demanded the return of
the property but the defendants refused to return the same. The plaintiffs claimed that the same
document is null and void for want of consideration and the same does not bind the non-consenting
spouse. They likewise prayed that the defendant be ordered to pay the plaintiffs not less than
100,000.00 as actual and moral damages, 10,000.00 as attorneys fees and 5,000.00 as litigation
expenses.

For their part, the defendants, on January 15, 1996, filed their Answer, denying the material allegations of
the plaintiffs. Defendants claimed that they are the lawful owners of Lot No. 1253-B. They alleged that
LORETO, with conformity of his wife, sold to them Lot No. 1253 on December 7, 1989 for 5,000.00 and
the transaction was registered with the Register of Deeds of the Province of Antique under Entry No.
180425. They added that, subsequently, TCT No. T-18023, covering Lot No. 1253-B, was issued in favor
of the defendants. Hence, they claimed that the plaintiffs be directed to pay the defendants 200,000.00
as moral damages, 50,000.00 as exemplary damages, 20,000.00 as attorneys fees and 30,000.00
for litigation expenses.4

The trial court ruled in favor of petitioners WILFREDO and LOLITA and held that LORETO did not validly
convey Lot No. 1253-B to GABINO, JR. on May 12, 1986 since at that time, the heirs of ZOILO had not
partitioned Lot No. 1253.5 It ruled that LORETO could only sell at that time his aliquot share in the
inheritance. He could not have sold a divided part thereof designated by metes and bounds. Thus, it held
that LORETO remained the owner of the subject lot when he sold it to WILFREDO on December 7, 1989.
It further found that there was no proof that WILFREDO knew of the sale that took place between
LORETO and GABINO, JR. on May 12, 1986. The dispositive portion of the decision states:

WHEREFORE, in view of the foregoing pronouncements and a preponderance of evidence, judgment is

hereby rendered:

1. FINDING the defendants WILFREDO VAGILIDAD and LOLITA VAGILIDAD to have duly
acquired ownership of Lot No. 1253-B containing an area of 1,604 square meters, more or less,
situated in San Jose, Antique;

2. SUSTAINING the validity of Transfer Certificate of Title No. T-18023 covering the subject Lot
No. 1253-B and issued in the name of the defendant WILFREDO VAGILIDAD, married to the
defendant LOLITA VAGILIDAD;

3. DISMISSING the complaint of the plaintiffs GABINO VAGILIDAD, JR. and MA. DOROTHY
VAGILIDAD, as well as the counterclaims of the defendants WILFREDO VAGILIDAD and
LOLITA VAGILIDAD and of the defendants LORETO LABIAO and FRANCISCA LABIAO; and

4. PRONOUNCING no cost.6

GABINO, JR. and DOROTHY filed an appeal with the Court of Appeals. The appellate court reversed and
set aside the decision of the court a quo, viz.:

WHEREFORE, premises considered, the Decision dated January 26, 1999 of the Regional Trial Court of
Antique, Sixth Judicial Region, Branch 11, in Civil Case No. 2825, is hereby REVERSED and SET ASIDE
and a new one is entered: (1) declaring the Deed of Absolute Sale [of Portion of Land] dated December 7,
1989 executed by appellee LORETO in favor of appellee WILFREDO null and void; (2) ordering the
defendants-appellees WILFREDO and LOLITA to reconvey Lot No. 1253-B to plaintiffs-appellants
GABINO, JR. and DOROTHY; and (3) ordering the defendants-appellees to pay the plaintiffs-appellants
100,000.00 as moral damages, 10,000.00 as attorneys fees and 5,000.00 as litigation expenses.7

The appellate court ruled that the sale made by LORETO in favor of GABINO, JR. on May 12, 1986 is
valid. The rights of LORETO to succession are transmitted from the moment of ZOILOs death in 1931.
Thus, when LORETO sold the 1,604-square meter portion of Lot No. 1253 to GABINO JR., he already
had the right as co-owner to his share to Lot No. 1253, even if at that time the property had not yet been
partitioned. Consequently, the sale made by LORETO in favor of WILFREDO on December 7, 1989 is
void because LORETO and FRANCISCA were no longer the owners of Lot No. 1253-B as of that time.
The appellate court also held WILFREDO and LOLITA liable for moral damages for falsifying the fictitious
deeds of sale on December 7, 1989.

WILFREDO and LOLITA moved for reconsideration but the motion was denied in the questioned
Resolution dated November 13, 2003. Hence, this petition for review on certiorari raising the following
errors:

THE HONORABLE COURT OF APPEALS ERRED IN NOT APPLYING ARTICLE 1349 AND
ARTICLE 1460 OF THE NEW CIVIL CODE IN THE CASE AT BAR.

II

THE HONORABLE COURT OF APPEALS ERRED IN NOT APPLYING THE PROVISION OF

ARTICLE 1544 OF THE NEW CIVIL CODE AND THE DOCTRINE OF DOUBLE SALE THAT
THE BUYER WHO IS IN POSSESSION OF THE TORRENS TITLE AND HAD THE DEED OF
SALE REGISTERED MUST PREVAIL.

III

THE HONORABLE COURT OF APPEALS ERRED IN NOT APPLYING ARTICLE 1391 OF THE
NEW CIVIL CODE AND THE DOCTRINE THAT IN CASE OF FRAUD, ACTION FOR
RECONVEYANCE MUST BE BROUGHT WITHIN FOUR (4) YEARS FROM THE DISCOVERY
OF THE FRAUD.

IV

THE HONORABLE COURT OF APPEALS ERRED IN AWARDING PRIVATE RESPONDENT

MORAL DAMAGES, ATTORNEYS FEES AND LITIGATION EXPENSES.8

We deny the petition.

First, petitioners contend that the Deed of Absolute Sale between LORETO and GABINO, JR. does not
have a determinate object. They anchor their claim on the following discrepancies: (1) the object of the
Deed of Absolute Sale between LORETO and GABINO, JR. is Lot No. 1253 with an area of 1,604 square
meters; (2) the object of the Deed of Absolute Sale of Portion of Land between LORETO and WILFREDO
is a portion of Lot No. 1253, known as Lot No. 1253-B, also with an area of 1,604 square meters;9 (3)
the Deed of Absolute Sale between LORETO and GABINO, JR. shows that its object, Lot No. 1253,
is not registered under the Land Registration Act nor under the Spanish Mortgage Law; and (4) the
property subject of this action, Lot No. 1253-B, was taken from Lot No. 1253 containing an area of 4,280
square meters previously registered in the name of ZOILO under Original Certificate of Title (OCT) No.
RO-2301.10 With these discrepancies, petitioners contend that either the Deed of Absolute Sale between
LORETO and GABINO, JR. does not have a determinate object or that Lot No. 1253-B, the subject
parcel, is not the object thereof. Hence, absent a determinate object, the contract is void. They rely on
Articles 1349 and 1460 of the Civil Code, viz.:

Art. 1349. The object of every contract must be determinate, as to its kind. The fact that the quantity is not
determinate shall not be an obstacle to the existence of the contract, provided it is possible to determine
the same, without the need of a new contract between the parties.
Art. 1460. A thing is determinate when it is particularly designated or physically segregated from all others
of the same class.

The requisite that a thing be determinate is satisfied if at the time the contract is entered into, the thing is
capable of being made determinate without the necessity of a new or further agreement between the
parties.

Petitioners err. The evidence on record shows that Lot No. 1253-B, the subject parcel, and the lot
described as Lot No. 1253 in the Deed of Absolute Sale of May 12, 1986 between LORETO and
GABINO, JR., are the same. In the Deed of Absolute Sale, Lot No. 1253 is described, viz.:

A parcel of land (Lot No. 1253 of the Cadastral Survey of San Jose), with the improvements thereon.
Bounded on the North [by] 1254 and 1255; on the South by road; on the East by 1253 and road on the
West by 1240-Angel Salazar; containing an area of 1,604 square meters more or less declared under Tax
Declaration No. 4159.11

In the Deed of Absolute Sale of Portion of Land of December 7, 1989 between LORETO and WILFREDO,
the subject parcel is described, viz.:

A parcel of land (Lot No. 1253. Ap-06-00271) of the Cadastral Survey of San Jose, LRC Cad. Rec. No.
936), situated at Atabay, San Jose, Antique. Bounded on the N. and E. along lines 1-2-3 by lot 1255; San
Jose Cadastre; on the S. along line 3-4 by Road; on the W. along line 4-5 by Lot 1240; San Jose
Cadastre; and on the N. along line 5-1 by Lot 1254, San Jose Cadastre containing an area of [Four]
Thousand Two Hundred Eighty (4,280) square meters, more or less.

of which a portion of land subject of this sale is hereinbelow (sic) particularly described as follows, to wit:

A portion of Lot No. 1253-B of the Cadastral Survey of San Jose, situated at Atabay, San Jose, Antique.
Bounded on the North by Lot No. 1254; South by Road; West by Lot 1253-A; and on the East by Lot No.
1253-C; containing an area of 1,604 square meters, more or less.12

The description of Lot No. 1253, the object of the Deed of Absolute Sale, as "not registered under Act No.
196[,] otherwise known as the Land Registration Act, nor under the Spanish Mortgage Law" 13 is a stray
description of the subject parcel. It is uncorroborated by any evidence in the records. This
description solely appears on the Deed of Absolute Sale and the discrepancy was not explained by
LORETO who signed the Deed of Absolute Sale as vendor. LORETO does not, in fact, deny the
existence of the Deed of Absolute Sale. He merely counters that the Deed of Absolute Sale was
purportedly a mortgage. However, LORETOs claim that it was one of mortgage is clearly negated by a
Certification14 issued by the Bureau of Internal Revenue dated May 12, 1986. It certified that LORETO
was not required to pay the capital gains tax on the transfer of Lot No. 1253 to GABINO, JR. because the
property was classified as an ordinary asset.

To be sure, petitioners could have easily shown that LORETO owned properties other than Lot No. 1253
to bolster their claim that the object of the Deed of Absolute Sale was different from Lot No. 1253-B which
is the object described in the Deed of Absolute Sale of Portion of Land. They did not proffer any evidence.

The trial court itself comprehensively traced the origin of Lot No. 1253-B. It clearly demonstrated that the
subject parcel was originally part of the registered lot of ZOILO. It also showed how the subject parcel
was eventually bounded by Lot No. 1253-A on the West and by Lot No. 1253-C on the East, as the lot
would be later described in the Deed of Absolute Sale of Portion of Land.

The trial court found that ZOILO previously owned Lot No. 1253 under OCT No. RO-2301 issued on
March 3, 1931. On November 14, 1986, Entry No. 167922 was inscribed in the certificate of title, per
Order dated March 30, 1978 of Judge Noli Ma. Cortes of the then Court of First Instance of Antique,
stating that it was a reconstituted certificate of title.15 Lot No. 1253 was subdivided by virtue of a
subdivision plan dated June 19, 1987. On January 20, 1987, an Extrajudicial Settlement of Estate
executed by LORETO, EFREN and PRISCILLA was entered as Entry No. 170722. The OCT of ZOILO
was cancelled by TCT No. T-16693 in the names of LORETO, EFREN and PRISCILLA on January 29,
1987. TCT No. T-16693 was cancelled on the same day by TCT No. T-16694 in the name of LORETO
alone. The TCT was partially cancelled by the issuance of TCTs covering Lot Nos. 1253-A, 1253-C and
1253-D. The TCT of Lot No. 1253-B was issued in the name of WILFREDO married to LOLITA on
February 15, 1990. WILFREDOs TCT No. T-18023 appears to be a transfer from LORETOs TCT No. T-
16694.

II

Next, petitioners contend that the appellate court should have upheld the title of WILFREDO under Article
1544 of the Civil Code and the doctrine of double sale where the buyer who is in possession of the
Torrens Title must prevail.16 First, petitioners title was issued pursuant to the purported Deed of Absolute
Sale of Portion of Land dated December 7, 1989. Second, WILFREDO did not see any encumbrance at
the back of the title of the subject lot when he purchased it from LORETO on December 7, 1989. Thus,
since he is not bound to go beyond the certificate of title, he has acquired the subject property in due
course and in good faith.

We disagree. Article 1544 of the Civil Code states, viz.:

Art. 1544. If the same thing should have been sold to different vendees, the ownership shall be
transferred to the person who may have first taken possession thereof in good faith, if it should be
movable property.

Should it be immovable property, the ownership shall belong to the person acquiring it who in good faith
recorded it in the Registry of Property.

Should there be no inscription, the ownership shall pertain to the person who in good faith was first in the
possession; and, in the absence thereof, to the person who presents the oldest title, provided there is
good faith.

Petitioners reliance on Article 1544 is misplaced. While title to the property was issued in WILFREDOs
name on February 15, 1990, the following circumstances show that he registered the subject parcel with
evident bad faith.

First, the Deed of Absolute Sale of Portion of Land dated December 7, 1989 between LORETO and
WILFREDO is tainted with blatant irregularities. It is a fact that the Deed of Absolute Sale of Portion of
Land and the Deed of Absolute Sale between GABINO, JR. and WILFREDO are of even date. Both
Deeds had the same object Lot No. 1253-B. Both deeds were notarized by Atty. Warloo Cardenal and
bear the same entry in his notarial register: Document No. 236, Page No. 49, Book No. XI, Series of
1989.

Second, the testimony of a disinterested witness, Febe Mabuhay, established the irregularity. Mabuhay
used to work as secretary for Atty. Cardenal and co-signed as witness in both Deeds. She stated that
Atty. Cardenal instructed her to prepare the two documents in the last week of November 1989. She was
present when GABINO, JR. signed the Deed of Absolute Sale. She testified that after GABINO, JR. left,
LORETO and his wife FRANCISCA arrived and signed the Deed of Absolute Sale of Portion of
Land.17 The Decision of the court a quo further states, viz.:

[Mabuhay testified that when she prepared the two documents, she] noticed the similarity of Lot No. 1253
as technically described in both documents but she did not call the attention of Atty. Warlo[o] Cardenal.
[She likewise stated that Atty. Cardenal] specifically instructed her to assign the same document number
to the two documents notarized on December 7, 1989. 18

Third, the testimony of Atty. Ernesto Estoya, then Clerk of Court of the Regional Trial Court of Antique,
supports the claim that there was bad faith in the execution of the Deed of Absolute Sale of Portion of
Land. Atty. Estoya brought the notarial record of Atty. Cardenal for the year 1989 pursuant to a subpoena.
He stated that he had not brought both Deeds as required in the subpoena because "Doc. No. 236; Page
No. 49; Book No. XI; Series of 1989" as entered in the notarial register of Atty. Cardenal could not be
found in the files. He further explained that the last document on page 48 of the notarial register of Atty.
Cardenal is Document No. 235, while the first document on page 49 is Document No. 239, leaving three
unexplained gaps for document numbers 236, 237 and 238. Atty. Estoya stated that he was not the one
who received the 1989 notarial register of Atty. Cardenal when the latter surrendered it since he assumed
office only in 1994.19

Fourth, we give credence to the testimony of GABINO, JR. that LORETO and WILFREDO had employed
the scheme to deprive him and his wife of their lawful title to the subject property. The facts speak for
themselves. WILFREDO knew that he could not use the Deed of Absolute Sale executed in his favor by
GABINO, JR. because the latter had no title to transfer. Without a title, WILFREDO could not use the
subject property as collateral for a bank loan. Hence, LORETO, who had refused to surrender the title to
GABINO, JR. and in whose name the land remained registered, had to execute the Deed of Absolute
Sale of Portion of Land in favor of WILFREDO. Hence, it was convenient for WILFREDO to deny the
existence of the Deed of Absolute Sale of December 7, 1989 between him and GABINO, JR. But the
evidence on record shows that after he was able to register the subject property in his name on February
15, 1990, WILFREDO used the title as collateral in the loans that he contracted with the Philippine
National Bank on October 24, 1991 and the Development Bank of the Philippines on December 1, 1993.
This supports the claim of GABINO, JR. that WILFREDO needed the lot for loaning purposes.

With these corroborating circumstances and the following irrefragable documents on record, the evidence
preponderates in favor of GABINO, JR. One, he acquired Lot No.1253-B from LORETO on May 12,
198620 by virtue of the Deed of Absolute Sale. Two, the Bureau of Internal Revenue issued a Certification,
also on May 12, 1986, for the exemption from the payment of capital gains tax when LORETO sold to him
the subject parcel. Three, GABINO, JR. paid the real estate tax on the subject parcel in 1987. Four, he
filed a Petition for the Surrender of LORETOs title on July 31, 1987 so he could transfer the title of the
property in his name.

Petitioners likewise err in their argument that the contract of sale between LORETO and GABINO, JR.
is void on the ground that at the time of the sale on May 12, 1986, LORETO had a right to dispose only
an aliquot part of the yet undivided property of ZOILO. The subject parcel, being an inherited property, is
subject to the rules of co-ownership under the Civil Code.

Co-ownership is the right of common dominion which two or more persons have in a spiritual part of a
thing, not materially or physically divided.21 Before the partition of the property held in common, no
individual or co-owner can claim title to any definite portion thereof. All that the co-owner has is an ideal
or abstract quota or proportionate share in the entire property.22

LORETO sold the subject property to GABINO, JR. on May 12, 1986 as a co-owner. LORETO had a
right, even before the partition of the property on January 19, 1987,23 to transfer in whole or in part his
undivided interest in the lot even without the consent of his co-heirs. This right is absolute in accordance
with the well-settled doctrine that a co-owner has full ownership of his pro-indiviso share and has the right
to alienate, assign or mortgage it, and substitute another person for its enjoyment. 24 Thus, what GABINO,
JR. obtained by virtue of the sale on May 12, 1986 were the same rights as the vendor LORETO had as
co-owner, in an ideal share equivalent to the consideration given under their transaction. 25
LORETO sold some 1,604 square meters of Lot No. 1253 to GABINO, JR. Consequently, when LORETO
purportedly sold to WILFREDO on December 7, 1989 the same portion of the lot, he was no longer the
owner of Lot No. 1253-B. Based on the principle that "no one can give what he does not
have,"26 LORETO could not have validly sold to WILFREDO on December 7, 1989 what he no longer had.
As correctly pointed out by the appellate court, the sale made by LORETO in favor of WILFREDO is void
as LORETO did not have the right to transfer the ownership of the subject property at the time of sale.

III

Petitioners contend that since the subdivision plan of Lot No. 1253 was only approved on January 19,
1987, the appellate court can not presume

that the aliquot part of LORETO was the parcel designated as Lot 1253-B.27

Petitioners err. The mere fact that LORETO sold a definite portion of the co-owned lot by metes and
bounds before partition does not, per se, render the sale a nullity. We held in Lopez v. Vda. De
Cuaycong28 that the fact that an agreement purported to sell a concrete portion of a co-owned property
does not render the sale void, for it is well-established that the binding force of a contract must be
recognized as far as it is legally possible to do so.29

In the case at bar, the contract of sale between LORETO and GABINO, JR. on May 12, 1986 could be
legally recognized. At the time of sale, LORETO had an aliquot share of one-third of the 4,280-square
1wphi1

meter property or some 1,42630 square meters but sold some 1,604 square meters to GABINO, JR. We
have ruled that if a co-owner sells more than his aliquot share in the property, the sale will affect only his
share but not those of the other co-owners who did not consent to the sale.31 Be that as it may, the co-
heirs of LORETO waived all their rights and interests over Lot No. 1253 in favor of LORETO in an
Extrajudicial Settlement of Estate dated January 20, 1987. They declared that they have previously
received their respective shares from the other estate of their parents ZOILO and PURIFICACION. 32 The
rights of GABINO, JR. as owner over Lot No. 1253-B are thus preserved. These rights were not
effectively transferred by LORETO to WILFREDO in the Deed of Absolute Sale of Portion of Land. Nor
were these rights alienated from GABINO, JR. upon the issuance of the title to the subject property in the
name of WILFREDO. Registration of property is not a means of acquiring ownership. 33 Its alleged
incontrovertibility cannot be successfully invoked by WILFREDO because certificates of title cannot be
used to protect a usurper from the true owner or be used as a shield for the commission of fraud. 34

IV

On the issue of prescription, petitioners contend that the appellate court failed to apply the rule that an
action for reconveyance based on fraud prescribes after the lapse of four years. 35 They cite Article
139136 of the Civil Code and the case of Gerona v. De Guzman.37

We disagree. This Court explained in Salvatierra v. Court of Appeals,38 viz.:

An action for reconveyance based on an implied or constructive trust must perforce prescribe in ten years
and not otherwise. A long line of decisions of this Court, and of very recent vintage at that, illustrates this
rule. Undoubtedly, it is now well-settled that an action for reconveyance based on an implied or
constructive trust prescribes in ten years from the issuance of the Torrens title over the property. The
only discordant note, it seems, is Balbin v. Medalla, which states that the prescriptive period for a
reconveyance action is four years. However, this variance can be explained by the erroneous
reliance on Gerona v. de Guzman. But in Gerona, the fraud was discovered on June 25, 1948,
hence Section 43(3) of Act No. 190 was applied, the New Civil Code not coming into effect until
August 30, 1950 xxx. It must be stressed, at this juncture, that Article 1144 and Article 1456 are
new provisions. They have no counterparts in the old Civil Code or in the old Code of Civil
Procedure, the latter being then resorted to as legal basis of the four-year prescriptive period for
an action for reconveyance of title of real property acquired under false pretenses.39

[Thus,] under the present Civil Code, xxx just as an implied or constructive trust is an offspring of xxx Art.
1456, xxx so is the corresponding obligation to reconvey the property and the title thereto in favor of the
true owner. In this context, and vis--vis prescription, Article 1144 of the Civil Code is applicable[, viz.:]

Art. 1144. The following actions must be brought within ten years from the time the right of action
accrues:

1) Upon a written contract;

2) Upon an obligation created by law;

3) Upon a judgment.40 (emphases supplied)

Thus, in the case at bar, although the TCT of WILFREDO became indefeasible after the lapse of one year
from the date of registration, the attendance of fraud in its issuance created an implied trust in favor of
GABINO, JR. under Article 145641 of the Civil Code. Being an implied trust, the action for reconveyance of
the subject property therefore prescribes within a period of ten years from February 15, 1990. Thus, when
respondents filed the instant case with the court a quo on September 26, 1995, it was well within the
prescriptive period.

On the issue of damages, petitioners contend that the grant is erroneous and the alleged connivance
between Atty. Cardenal and WILFREDO lacks basis.

We disagree. The evidence on record is clear that petitioners committed bad faith in the execution of the
purported Deed of Absolute Sale of Portion of Land dated December 7, 1989 between LORETO and
WILFREDO. As stated by the appellate court, viz.:

xxxx From the series of events, it can be reasonably inferred that appellees WILFREDO, LORETO and
Atty. Cardenal connived in attempting to deprive appellants of Lot No. 1253-B, hence, the appellants
entitlement to moral damages. Further, it is a well-settled rule that attorneys fees are allowed to 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 for whom it is sought. xxxx To protect
themselves, the appellants engaged the services of counsel and incurred expenses in the course of
litigation. Hence, we deem it equitable to award attorneys fees to the appellant xxx.42

IN VIEW WHEREOF, the petition is DENIED. The assailed Decision and Resolution of the Court of
Appeals in CA-G.R. No. CV-68318 dated March 19, 2003 and November 13, 2003, respectively, are
AFFIRMED in toto. Costs against petitioners.

SO ORDERED.

G.R. No. 154486 December 1, 2010

FEDERICO JARANTILLA, JR., Petitioner,

vs.
ANTONIETA JARANTILLA, BUENAVENTURA REMOTIGUE, substituted by CYNTHIA REMOTIGUE,
DOROTEO JARANTILLA and TOMAS JARANTILLA, Respondents.
 DECISION

LEONARDO-DE CASTRO, J.:

This petition for review on certiorari1 seeks to modify the Decision2 of the Court of Appeals dated July 30,
2002 in CA-G.R. CV No. 40887, which set aside the Decision3 dated December 18, 1992 of the Regional
Trial Court (RTC) of Quezon City, Branch 98 in Civil Case No. Q-50464.

The pertinent facts are as follows:

The spouses Andres Jarantilla and Felisa Jaleco were survived by eight children: Federico, Delfin,
Benjamin, Conchita, Rosita, Pacita, Rafael and Antonieta.4 Petitioner Federico Jarantilla, Jr. is the
grandchild of the late Jarantilla spouses by their son Federico Jarantilla, Sr. and his wife Leda
Jamili.5 Petitioner also has two other brothers: Doroteo and Tomas Jarantilla.

Petitioner was one of the defendants in the complaint before the RTC while Antonieta Jarantilla, his aunt,
was the plaintiff therein. His co-respondents before he joined his aunt Antonieta in her complaint, were his
late aunt Conchita Jarantillas husband Buenaventura Remotigue, who died during the pendency of the
case, his cousin Cynthia Remotigue, the adopted daughter of Conchita Jarantilla and Buenaventura
Remotigue, and his brothers Doroteo and Tomas Jarantilla.6

In 1948, the Jarantilla heirs extrajudicially partitioned amongst themselves the real properties of their
deceased parents.7 With the exception of the real property adjudicated to Pacita Jarantilla, the heirs also
agreed to allot the produce of the said real properties for the years 1947-1949 for the studies of Rafael
and Antonieta Jarantilla.8

In the same year, the spouses Rosita Jarantilla and Vivencio Deocampo entered into an agreement with
the spouses Buenaventura Remotigue and Conchita Jarantilla to provide mutual assistance to each other
by way of financial support to any commercial and agricultural activity on a joint business arrangement.
This business relationship proved to be successful as they were able to establish a manufacturing and
trading business, acquire real properties, and construct buildings, among other things. 9 This partnership
ended in 1973 when the parties, in an "Agreement,"10 voluntarily agreed to completely dissolve their "joint
business relationship/arrangement."11

On April 29, 1957, the spouses Buenaventura and Conchita Remotigue executed a document wherein
they acknowledged that while registered only in Buenaventura Remotigues name, they were not the only
owners of the capital of the businesses Manila Athletic Supply (712 Raon Street, Manila), Remotigue
Trading (Calle Real, Iloilo City) and Remotigue Trading (Cotabato City). In this same "Acknowledgement
of Participating Capital," they stated the participating capital of their co-owners as of the year 1952, with
Antonieta Jarantillas stated as eight thousand pesos (8,000.00) and Federico Jarantilla, Jr.s as five
thousand pesos (5,000.00).12

The present case stems from the amended complaint13 dated April 22, 1987 filed by Antonieta Jarantilla
against Buenaventura Remotigue, Cynthia Remotigue, Federico Jarantilla, Jr., Doroteo Jarantilla and
Tomas Jarantilla, for the accounting of the assets and income of the co-ownership, for its partition and the
delivery of her share corresponding to eight percent (8%), and for damages. Antonieta claimed that in
1946, she had entered into an agreement with Conchita and Buenaventura Remotigue, Rafael Jarantilla,
and Rosita and Vivencio Deocampo to engage in business. Antonieta alleged that the initial contribution
of property and money came from the heirs inheritance, and her subsequent annual investment of seven
thousand five hundred pesos (7,500.00) as additional capital came from the proceeds of her farm.
Antonieta also alleged that from 1946-1969, she had helped in the management of the business they co-
owned without receiving any salary. Her salary was supposedly rolled back into the business as
additional investments in her behalf. Antonieta further claimed co-ownership of certain properties14 (the
subject real properties) in the name of the defendants since the only way the defendants could have
purchased these properties were through the partnership as they had no other source of income.

The respondents, including petitioner herein, in their Answer,15 denied having formed a partnership with
Antonieta in 1946. They claimed that she was in no position to do so as she was still in school at that
time. In fact, the proceeds of the lands they partitioned were devoted to her studies. They also averred
that while she may have helped in the businesses that her older sister Conchita had formed with
Buenaventura Remotigue, she was paid her due salary. They did not deny the existence and validity of
the "Acknowledgement of Participating Capital" and in fact used this as evidence to support their claim
that Antonietas 8% share was limited to the businesses enumerated therein. With regard to Antonietas
claim in their other corporations and businesses, the respondents said these should also be limited to the
number of her shares as specified in the respective articles of incorporation. The respondents denied
using the partnerships income to purchase the subject real properties and said that the certificates of title
should be binding on her.16

During the course of the trial at the RTC, petitioner Federico Jarantilla, Jr., who was one of the original
defendants, entered into a compromise agreement17 with Antonieta Jarantilla wherein he supported
Antonietas claims and asserted that he too was entitled to six percent (6%) of the supposed partnership
in the same manner as Antonieta was. He prayed for a favorable judgment in this wise:

Defendant Federico Jarantilla, Jr., hereby joins in plaintiffs prayer for an accounting from the other
defendants, and the partition of the properties of the co-ownership and the delivery to the plaintiff and to
defendant Federico Jarantilla, Jr. of their rightful share of the assets and properties in the co-
ownership.181av vphi1

The RTC, in an Order19 dated March 25, 1992, approved the Joint Motion to Approve Compromise
Agreement20and on December 18, 1992, decided in favor of Antonieta, to wit:

WHEREFORE, premises above-considered, the Court renders judgment in favor of the plaintiff Antonieta
Jarantilla and against defendants Cynthia Remotigue, Doroteo Jarantilla and Tomas Jarantilla ordering
the latter:

1. to deliver to the plaintiff her 8% share or its equivalent amount on the real properties covered
by TCT Nos. 35655, 338398, 338399 & 335395, all of the Registry of Deeds of Quezon City; TCT
Nos. (18303)23341, 142882 & 490007(4615), all of the Registry of Deeds of Rizal; and TCT No.
T-6309 of the Registry of Deeds of Cotabato based on their present market value;

2. to deliver to the plaintiff her 8% share or its equivalent amount on the Remotigue Agro-
Industrial Corporation, Manila Athletic Supply, Inc., MAS Rubber Products, Inc. and Buendia
Recapping Corporation based on the shares of stocks present book value;

3. to account for the assets and income of the co-ownership and deliver to plaintiff her rightful
share thereof equivalent to 8%;

4. to pay plaintiff, jointly and severally, the sum of 50,000.00 as moral damages;

5. to pay, jointly and severally, the sum of 50,000.00 as attorneys fees; and

6. to pay, jointly and severally, the costs of the suit.21

Both the petitioner and the respondents appealed this decision to the Court of Appeals. The petitioner
claimed that the RTC "erred in not rendering a complete judgment and ordering the partition of the co-
ownership and giving to [him] six per centum (6%) of the properties."22
While the Court of Appeals agreed to some of the RTCs factual findings, it also established that
Antonieta Jarantilla was not part of the partnership formed in 1946, and that her 8% share was limited to
the businesses enumerated in the Acknowledgement of Participating Capital. On July 30, 2002, the Court
of Appeals rendered the herein challenged decision setting aside the RTCs decision, as follows:

WHEREFORE, the decision of the trial court, dated 18 December 1992 is SET ASIDE and a new one is
hereby entered ordering that:

(1) after accounting, plaintiff Antonieta Jarantilla be given her share of 8% in the assets and
profits of Manila Athletic Supply, Remotigue Trading in Iloilo City and Remotigue Trading in
Cotabato City;

(2) after accounting, defendant Federico Jarantilla, Jr. be given his share of 6% of the assets and
profits of the above-mentioned enterprises; and, holding that

(3) plaintiff Antonieta Jarantilla is a stockholder in the following corporations to the extent stated in
their Articles of Incorporation:

(a) Rural Bank of Barotac Nuevo, Inc.;

(b) MAS Rubber Products, Inc.;

(c) Manila Athletic Supply, Inc.; and

(d) B. Remotigue Agro-Industrial Development Corp.

(4) No costs.23

The respondents, on August 20, 2002, filed a Motion for Partial Reconsideration but the Court of Appeals
denied this in a Resolution24 dated March 21, 2003.

Antonieta Jarantilla filed before this Court her own petition for review on certiorari25 dated September 16,
2002, assailing the Court of Appeals decision on "similar grounds and similar assignments of errors as
this present case"26 but it was dismissed on November 20, 2002 for failure to file the appeal within the
reglementary period of fifteen (15) days in accordance with Section 2, Rule 45 of the Rules of Court. 27

Petitioner filed before us this petition for review on the sole ground that:

THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN NOT RULING THAT PETITIONER
FEDERICO JARANTILLA, JR. IS ENTITLED TO A SIX PER CENTUM (6%) SHARE OF THE
OWNERSHIP OF THE REAL PROPERTIES ACQUIRED BY THE OTHER DEFENDANTS USING
COMMON FUNDS FROM THE BUSINESSES WHERE HE HAD OWNED SUCH SHARE.28

Petitioner asserts that he was in a partnership with the Remotigue spouses, the Deocampo spouses,
Rosita Jarantilla, Rafael Jarantilla, Antonieta Jarantilla and Quintin Vismanos, as evidenced by the
Acknowledgement of Participating Capital the Remotigue spouses executed in 1957. He contends that
from this partnership, several other corporations and businesses were established and several real
properties were acquired. In this petition, he is essentially asking for his 6% share in the subject real
properties. He is relying on the Acknowledgement of Participating Capital, on his own testimony, and
Antonieta Jarantillas testimony to support this contention.

The core issue is whether or not the partnership subject of the Acknowledgement of Participating Capital
funded the subject real properties. In other words, what is the petitioners right over these real properties?
It is a settled rule that in a petition for review on certiorari under Rule 45 of the Rules of Civil Procedure,
only questions of law may be raised by the parties and passed upon by this Court. 29

A question of law arises when there is doubt as to what the law is on a certain state of facts, while there is
a question of fact when the doubt arises as to the truth or falsity of the alleged facts. For a question to be
one of law, the same must not involve an examination of the probative value of the evidence presented by
the litigants or any of them. The resolution of the issue must rest solely on what the law provides on the
given set of circumstances. Once it is clear that the issue invites a review of the evidence presented, the
question posed is one of fact. Thus, the test of whether a question is one of law or of fact is not the
appellation given to such question by the party raising the same; rather, it is whether the appellate court
can determine the issue raised without reviewing or evaluating the evidence, in which case, it is a
question of law; otherwise it is a question of fact.30

Since the Court of Appeals did not fully adopt the factual findings of the RTC, this Court, in resolving the
questions of law that are now in issue, shall look into the facts only in so far as the two courts a quo
differed in their appreciation thereof.

The RTC found that an unregistered partnership existed since 1946 which was affirmed in the 1957
document, the "Acknowledgement of Participating Capital." The RTC used this as its basis for giving
Antonieta Jarantilla an 8% share in the three businesses listed therein and in the other businesses and
real properties of the respondents as they had supposedly acquired these through funds from the
partnership.31

The Court of Appeals, on the other hand, agreed with the RTC as to Antonietas 8% share in the business
enumerated in the Acknowledgement of Participating Capital, but not as to her share in the other
corporations and real properties. The Court of Appeals ruled that Antonietas claim of 8% is based on the
"Acknowledgement of Participating Capital," a duly notarized document which was specific as to the
subject of its coverage. Hence, there was no reason to pattern her share in the other corporations from
her share in the partnerships businesses. The Court of Appeals also said that her claim in the
respondents real properties was more "precarious" as these were all covered by certificates of title which
served as the best evidence as to all the matters contained therein.32 Since petitioners claim was
essentially the same as Antonietas, the Court of Appeals also ruled that petitioner be given his 6% share
in the same businesses listed in the Acknowledgement of Participating Capital.

Factual findings of the trial court, when confirmed by the Court of Appeals, are final and conclusive except
in the following cases: (1) when the inference made is manifestly mistaken, absurd or impossible; (2)
when there is a grave abuse of discretion; (3) when the finding is grounded entirely on speculations,
surmises or conjectures; (4) when the judgment of the Court of Appeals is based on misapprehension of
facts; (5) when the findings of fact are conflicting; (6) when the Court of Appeals, in making its findings,
went beyond the issues of the case and the same is contrary to the admissions of both appellant and
appellee; (7) when the findings of the Court of Appeals are contrary to those of the trial court; (8) when
the findings of fact are conclusions without citation of specific evidence on which they are based; (9)
when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties and
which, if properly considered, would justify a different conclusion; and (10) when the findings of fact of the
Court of Appeals are premised on the absence of evidence and are contradicted by the evidence on
record.33

In this case, we find no error in the ruling of the Court of Appeals.

Both the petitioner and Antonieta Jarantilla characterize their relationship with the respondents as a co-
ownership, but in the same breath, assert that a verbal partnership was formed in 1946 and was affirmed
in the 1957 Acknowledgement of Participating Capital.
There is a co-ownership when an undivided thing or right belongs to different persons. 34 It is a partnership
when two or more persons bind themselves to contribute money, property, or industry to a common fund,
with the intention of dividing the profits among themselves.35 The Court, in Pascual v. The Commissioner
of Internal Revenue,36 quoted the concurring opinion of Mr. Justice Angelo Bautista in Evangelista v. The
Collector of Internal Revenue37 to further elucidate on the distinctions between a co-ownership and a
partnership, to wit:

I wish however to make the following observation: Article 1769 of the new Civil Code lays down the rule
for determining when a transaction should be deemed a partnership or a co-ownership. Said article
paragraphs 2 and 3, provides;

(2) Co-ownership or co-possession does not itself establish a partnership, whether such co-
owners or co-possessors do or do not share any profits made by the use of the property;

(3) The sharing of gross returns does not of itself establish a partnership, whether or not the
persons sharing them have a joint or common right or interest in any property from which the
returns are derived;

From the above it appears that the fact that those who agree to form a co- ownership share or do not
share any profits made by the use of the property held in common does not convert their venture into a
partnership. Or the sharing of the gross returns does not of itself establish a partnership whether or not
the persons sharing therein have a joint or common right or interest in the property. This only means that,
aside from the circumstance of profit, the presence of other elements constituting partnership is
necessary, such as the clear intent to form a partnership, the existence of a juridical personality different
from that of the individual partners, and the freedom to transfer or assign any interest in the property by
one with the consent of the others.

It is evident that an isolated transaction whereby two or more persons contribute funds to buy certain real
estate for profit in the absence of other circumstances showing a contrary intention cannot be considered
a partnership.

Persons who contribute property or funds for a common enterprise and agree to share the gross returns
of that enterprise in proportion to their contribution, but who severally retain the title to their respective
contribution, are not thereby rendered partners. They have no common stock or capital, and no
community of interest as principal proprietors in the business itself which the proceeds derived.

A joint purchase of land, by two, does not constitute a co-partnership in respect thereto; nor does an
agreement to share the profits and losses on the sale of land create a partnership; the parties are only
tenants in common.

Where plaintiff, his brother, and another agreed to become owners of a single tract of realty, holding as
tenants in common, and to divide the profits of disposing of it, the brother and the other not being entitled
to share in plaintiffs commission, no partnership existed as between the three parties, whatever their
relation may have been as to third parties.

In order to constitute a partnership inter sese there must be: (a) An intent to form the same; (b) generally
participating in both profits and losses; (c) and such a community of interest, as far as third persons are
concerned as enables each party to make contract, manage the business, and dispose of the whole
property. x x x.

The common ownership of property does not itself create a partnership between the owners, though they
may use it for the purpose of making gains; and they may, without becoming partners, agree among
themselves as to the management, and use of such property and the application of the proceeds
therefrom.38 (Citations omitted.)
Under Article 1767 of the Civil Code, there are two essential elements in a contract of partnership: (a) an
agreement to contribute money, property or industry to a common fund; and (b) intent to divide the profits
among the contracting parties. The first element is undoubtedly present in the case at bar, for, admittedly,
all the parties in this case have agreed to, and did, contribute money and property to a common
fund. Hence, the issue narrows down to their intent in acting as they did.39 It is not denied that all the
parties in this case have agreed to contribute capital to a common fund to be able to later on share its
profits. They have admitted this fact, agreed to its veracity, and even submitted one common
documentary evidence to prove such partnership - the Acknowledgement of Participating Capital.

As this case revolves around the legal effects of the Acknowledgement of Participating Capital, it would
be instructive to examine the pertinent portions of this document:

ACKNOWLEDGEMENT OF
PARTICIPATING CAPITAL

KNOW ALL MEN BY THESE PRESENTS:

That we, the spouses Buenaventura Remotigue and Conchita Jarantilla de Remotigue, both of legal age,
Filipinos and residents of Loyola Heights, Quezon City, P.I. hereby state:

That the Manila Athletic Supply at 712 Raon, Manila, the Remotigue Trading of Calle Real, Iloilo City and
the Remotigue Trading, Cotabato Branch, Cotabato, P.I., all dealing in athletic goods and equipments,
and general merchandise are recorded in their respective books with Buenaventura Remotigue as the
registered owner and are being operated by them as such:

That they are not the only owners of the capital of the three establishments and their participation in the
capital of the three establishments together with the other co-owners as of the year 1952 are stated as
follows:

1. Buenaventura Remotigue (TWENTY-FIVE THOUSAND)25,000.00

2. Conchita Jarantilla de Remotigue (TWENTY-FIVE THOUSAND) 25,000.00

3. Vicencio Deocampo (FIFTEEN THOUSAND) 15,000.00

4. Rosita J. Deocampo (FIFTEEN THOUSAND).... 15,000.00

5. Antonieta Jarantilla (EIGHT THOUSAND).. 8,000.00

6. Rafael Jarantilla (SIX THOUSAND).. ... 6,000.00

7. Federico Jarantilla, Jr. (FIVE THOUSAND).. 5,000.00

8. Quintin Vismanos (TWO THOUSAND)... 2,000.00

That aside from the persons mentioned in the next preceding paragraph, no other person has any interest
in the above-mentioned three establishments.

IN WITNESS WHEREOF, they sign this instrument in the City of Manila, P.I., this 29th day of April, 1957.

[Sgd.]
BUENAVENTURA REMOTIGUE
[Sgd.]
CONCHITA JARANTILLA DE REMOTIGUE40

The Acknowledgement of Participating Capital is a duly notarized document voluntarily executed by

Conchita Jarantilla-Remotigue and Buenaventura Remotigue in 1957. Petitioner does not dispute its
contents and is actually relying on it to prove his participation in the partnership. Article 1797 of the Civil
Code provides:

Art. 1797. The losses and profits shall be distributed in conformity with the agreement. If only the share of
each partner in the profits has been agreed upon, the share of each in the losses shall be in the same
proportion.

In the absence of stipulation, the share of each partner in the profits and losses shall be in proportion to
what he may have contributed, but the industrial partner shall not be liable for the losses. As for the
profits, the industrial partner shall receive such share as may be just and equitable under the
circumstances. If besides his services he has contributed capital, he shall also receive a share in the
profits in proportion to his capital. (Emphases supplied.)

It is clear from the foregoing that a partner is entitled only to his share as agreed upon, or in the absence
of any such stipulations, then to his share in proportion to his contribution to the partnership. The
petitioner himself claims his share to be 6%, as stated in the Acknowledgement of Participating Capital.
However, petitioner fails to realize that this document specifically enumerated the businesses covered by
the partnership: Manila Athletic Supply, Remotigue Trading in Iloilo City and Remotigue Trading in
Cotabato City. Since there was a clear agreement that the capital the partners contributed went to the
three businesses, then there is no reason to deviate from such agreement and go beyond the stipulations
in the document. Therefore, the Court of Appeals did not err in limiting petitioners share to the assets of
the businesses enumerated in the Acknowledgement of Participating Capital.

In Villareal v. Ramirez,41 the Court held that since a partnership is a separate juridical entity, the shares to
be paid out to the partners is necessarily limited only to its total resources, to wit:

Since it is the partnership, as a separate and distinct entity, that must refund the shares of the partners,
the amount to be refunded is necessarily limited to its total resources. In other words, it can only pay out
what it has in its coffers, which consists of all its assets. However, before the partners can be paid their
shares, the creditors of the partnership must first be compensated. After all the creditors have been paid,
whatever is left of the partnership assets becomes available for the payment of the partners shares. 42

There is no evidence that the subject real properties were assets of the partnership referred to in the
Acknowledgement of Participating Capital.

The petitioner further asserts that he is entitled to respondents properties based on the concept of trust.
He claims that since the subject real properties were purchased using funds of the partnership, wherein
he has a 6% share, then "law and equity mandates that he should be considered as a co-owner of those
properties in such proportion."43 In Pigao v. Rabanillo,44 this Court explained the concept of trusts, to wit:

Express trusts are created by the intention of the trustor or of the parties, while implied trusts come into
being by operation of law, either through implication of an intention to create a trust as a matter of law or
through the imposition of the trust irrespective of, and even contrary to, any such intention. In turn, implied
trusts are either resulting or constructive trusts. Resulting trusts are based on the equitable doctrine that
valuable consideration and not legal title determines the equitable title or interest and are presumed
always to have been contemplated by the parties. They arise from the nature or circumstances of the
consideration involved in a transaction whereby one person thereby becomes invested with legal title but
is obligated in equity to hold his legal title for the benefit of another.45
On proving the existence of a trust, this Court held that:

Respondent has presented only bare assertions that a trust was created. Noting the need to prove the
existence of a trust, this Court has held thus:

"As a rule, the burden of proving the existence of a trust is on the party asserting its existence, and such
proof must be clear and satisfactorily show the existence of the trust and its elements. While implied
trusts may be proved by oral evidence, the evidence must be trustworthy and received by the courts with
extreme caution, and should not be made to rest on loose, equivocal or indefinite declarations.
Trustworthy evidence is required because oral evidence can easily be fabricated." 46

The petitioner has failed to prove that there exists a trust over the subject real properties. Aside from his
bare allegations, he has failed to show that the respondents used the partnerships money to purchase
the said properties. Even assuming arguendo that some partnership income was used to acquire these
properties, the petitioner should have successfully shown that these funds came from his share in the
partnership profits. After all, by his own admission, and as stated in the Acknowledgement of Participating
Capital, he owned a mere 6% equity in the partnership.

In essence, the petitioner is claiming his 6% share in the subject real properties, by relying on his own
self-serving testimony and the equally biased testimony of Antonieta Jarantilla. Petitioner has not
presented evidence, other than these unsubstantiated testimonies, to prove that the respondents did not
have the means to fund their other businesses and real properties without the partnerships income. On
the other hand, the respondents have not only, by testimonial evidence, proven their case against the
petitioner, but have also presented sufficient documentary evidence to substantiate their claims,
allegations and defenses. They presented preponderant proof on how they acquired and funded such
properties in addition to tax receipts and tax declarations.47 It has been held that "while tax declarations
and realty tax receipts do not conclusively prove ownership, they may constitute strong evidence of
ownership when accompanied by possession for a period sufficient for prescription."48 Moreover, it is a
rule in this jurisdiction that testimonial evidence cannot prevail over documentary evidence.49 This Court
had on several occasions, expressed our disapproval on using mere self-serving testimonies to support
ones claim. In Ocampo v. Ocampo,50 a case on partition of a co-ownership, we held that:

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.51

It is true that a certificate of title is merely an evidence of ownership or title over the particular property
described therein. Registration in the Torrens system does not create or vest title as registration is not a
mode of acquiring ownership; hence, this cannot deprive an aggrieved party of a remedy in
law.52 However, petitioner asserts ownership over portions of the subject real properties on the strength of
his own admissions and on the testimony of Antonieta Jarantilla. As held by this Court in Republic of the
1avv phi1

Philippines v. Orfinada, Sr.53:

Indeed, a Torrens title is generally conclusive evidence of ownership of the land referred to therein, and a
strong presumption exists that a Torrens title was regularly issued and valid. A Torrens title is
incontrovertible against any informacion possessoria, of other title existing prior to the issuance thereof
not annotated on the Torrens title. Moreover, persons dealing with property covered by a Torrens
certificate of title are not required to go beyond what appears on its face. 54

As we have settled that this action never really was for partition of a co-ownership, to permit petitioners
claim on these properties is to allow a collateral, indirect attack on respondents admitted titles. In the
words of the Court of Appeals, "such evidence cannot overpower the conclusiveness of these certificates
of title, more so since plaintiffs [petitioners] claims amount to a collateral attack, which is prohibited under
Section 48 of Presidential Decree No. 1529, the Property Registration Decree."55

SEC. 48. Certificate not subject to collateral attack. A certificate of title shall not be subject to collateral
attack. It cannot be altered, modified, or cancelled except in a direct proceeding in accordance with law.

This Court has deemed an action or proceeding to be "an attack on a title when its objective is to nullify
the title, thereby challenging the judgment pursuant to which the title was decreed." 56 In Aguilar v.
Alfaro,57 this Court further distinguished between a direct and an indirect or collateral attack, as follows:

A collateral attack transpires when, in another action to obtain a different relief and as an incident to the
present action, an attack is made against the judgment granting the title. This manner of attack is to be
distinguished from a direct attack against a judgment granting the title, through an action whose main
objective is to annul, set aside, or enjoin the enforcement of such judgment if not yet implemented, or to
seek recovery if the property titled under the judgment had been disposed of. x x x.

Petitioners only piece of documentary evidence is the Acknowledgement of Participating Capital, which
as discussed above, failed to prove that the real properties he is claiming co-ownership of were acquired
out of the proceeds of the businesses covered by such document. Therefore, petitioners theory has no
factual or legal leg to stand on.

WHEREFORE, the Petition is hereby DENIED and the Decision of the Court of Appeals in CA-G.R. CV
No. 40887, dated July 30, 2002 is AFFIRMED.

SO ORDERED.

G.R. No. 170829 November 20, 2006

PERLA G. PATRICIO, Petitioner,

vs.
MARCELINO G. DARIO III and THE HONORABLE COURT OF APPEALS, Second
Division, Respondents.

DECISION

YNARES-SANTIAGO, J.:

This petition for review on certiorari under Rule 45 of the Rules of Court seeks to annul and set aside the
Resolution of the Court of Appeals dated December 9, 20051 in CA-G.R. CV No. 80680, which dismissed
the complaint for partition filed by petitioner for being contrary to law and evidence.

On July 5, 1987, Marcelino V. Dario died intestate. He was survived by his wife, petitioner Perla G.
Patricio and their two sons, Marcelino Marc Dario and private respondent Marcelino G. Dario III. Among
the properties he left was a parcel of land with a residential house and a pre-school building built thereon
situated at 91 Oxford corner Ermin Garcia Streets in Cubao, Quezon City, as evidenced by Transfer
Certificate of Title (TCT) No. RT-30731 (175992) of the Quezon City Registry of Deeds, covering an area
of seven hundred fifty five (755) square meters, more or less.2

On August 10, 1987, petitioner, Marcelino Marc and private respondent, extrajudicially settled the estate
of Marcelino V. Dario. Accordingly, TCT No. RT-30731 (175992) was cancelled and TCT No. R-213963
was issued in the names of petitioner, private respondent and Marcelino Marc.
Thereafter, petitioner and Marcelino Marc formally advised private respondent of their intention to partition
the subject property and terminate the co-ownership. Private respondent refused to partition the property
hence petitioner and Marcelino Marc instituted an action for partition before the Regional Trial Court of
Quezon City which was docketed as Civil Case No. Q-01-44038 and raffled to Branch 78.

On October 3, 2002,3 the trial court ordered the partition of the subject property in the following manner:
Perla G. Patricio, 4/6; Marcelino Marc G. Dario, 1/6; and Marcelino G. Dario III, 1/6. The trial court also
ordered the sale of the property by public auction wherein all parties concerned may put up their bids. In
case of failure, the subject property should be distributed accordingly in the aforestated manner. 4

Private respondent filed a motion for reconsideration which was denied by the trial court on August 11,
2003,5 hence he appealed before the Court of Appeals, which denied the same on October 19, 2005.
However, upon a motion for reconsideration filed by private respondent on December 9, 2005, the
appellate court partially reconsidered the October 19, 2005 Decision. In the now assailed Resolution, the
Court of Appeals dismissed the complaint for partition filed by petitioner and Marcelino Marc for lack of
merit. It held that the family home should continue despite the death of one or both spouses as long as
there is a minor beneficiary thereof. The heirs could not partition the property unless the court found
compelling reasons to rule otherwise. The appellate court also held that the minor son of private
respondent, who is a grandson of spouses Marcelino V. Dario and Perla G. Patricio, was a minor
beneficiary of the family home.6

Hence, the instant petition on the following issues:

I.

THE HONORABLE COURT OF APPEALS PATENTLY ERRED IN REVERSING ITS EARLIER

DECISION OF OCTOBER 19, 2005 WHICH AFFIRMED IN TOTO THE DECISION OF THE
TRIAL COURT DATED 03 OCTOBER 2002 GRANTING THE PARTITION AND SALE BY
PUBLIC AUCTION OF THE SUBJECT PROPERTY.

II.

COROLLARILY, THE HONORABLE COURT OF APPEALS PATENTLY ERRED IN APPLYING

ARTICLE 159 IN RELATION TO ARTICLE 154 OF THE FAMILY CODE ON FAMILY HOME
INSTEAD OF ARTICLE 494 IN RELATION TO ARTICLES 495 AND 498 OF THE NEW CIVIL
CODE ON CO-OWNERSHIP.7

The sole issue is whether partition of the family home is proper where one of the co-owners refuse to
accede to such partition on the ground that a minor beneficiary still resides in the said home.

Private respondent claims that the subject property which is the family home duly constituted by spouses
Marcelino and Perla Dario cannot be partitioned while a minor beneficiary is still living therein namely, his
12-year-old son, who is the grandson of the decedent. He argues that as long as the minor is living in the
family home, the same continues as such until the beneficiary becomes of age. Private respondent insists
that even after the expiration of ten years from the date of death of Marcelino on July 5, 1987, i.e., even
after July 1997, the subject property continues to be considered as the family home considering that his
minor son, Marcelino Lorenzo R. Dario IV, who is a beneficiary of the said family home, still resides in the
premises.

On the other hand, petitioner alleges that the subject property remained as a family home of the surviving
heirs of the late Marcelino V. Dario only up to July 5, 1997, which was the 10th year from the date of
death of the decedent. Petitioner argues that the brothers Marcelino Marc and private respondent
Marcelino III were already of age at the time of the death of their father, 8 hence there is no more minor
beneficiary to speak of.
The family home is a sacred symbol of family love and is the repository of cherished memories that last
during ones lifetime.9 It is the dwelling house where husband and wife, or by an unmarried head of a
family, reside, including the land on which it is situated. 10 It is constituted jointly by the husband and the
wife or by an unmarried head of a family.11 The family home is deemed constituted from the time it is
occupied as a family residence. From the time of its constitution and so long as any of its beneficiaries
actually resides therein, the family home continues to be such and is exempt from execution, forced sale
or attachment except as hereinafter provided and to the extent of the value allowed by law. 12

The law explicitly provides that occupancy of the family home either by the owner thereof or by "any of its
beneficiaries" must be actual. That which is "actual" is something real, or actually existing, as opposed to
something merely possible, or to something which is presumptive or constructive. Actual occupancy,
however, need not be by the owner of the house specifically. Rather, the property may be occupied by
the "beneficiaries" enumerated in Article 154 of the Family Code, which may include the in-laws where the
family home is constituted jointly by the husband and wife. But the law definitely excludes maids and
overseers. They are not the beneficiaries contemplated by the Code.13

Article 154 of the Family Code enumerates who are the beneficiaries of a family home: (1) The husband
and wife, or an unmarried person who is the head of a family; and (2) Their parents, ascendants,
descendants, brothers and sisters, whether the relationship be legitimate or illegitimate, who are living in
the family home and who depend upon the head of the family for legal support.

To be a beneficiary of the family home, three requisites must concur: (1) they must be among the
relationships enumerated in Art. 154 of the Family Code; (2) they live in the family home; and (3) they are
dependent for legal support upon the head of the family.

Moreover, Article 159 of the Family Code provides that the family home shall continue despite the death
of one or both spouses or of the unmarried head of the family for a period of 10 years or for as long as
there is a minor beneficiary, and the heirs cannot partition the same unless the court finds compelling
reasons therefor. This rule shall apply regardless of whoever owns the property or constituted the family
home.

Article 159 of the Family Code applies in situations where death occurs to persons who constituted the
family home. Dr. Arturo M. Tolentino comments on the effect of death of one or both spouses or the
1wphi1

unmarried head of a family on the continuing existence of the family home:

Upon the death of the spouses or the unmarried family head who constituted the family home, or of the
spouse who consented to the constitution of his or her separate property as family home, the property will
remain as family home for ten years or for as long as there is a minor beneficiary living in it. If there is no
more beneficiary left at the time of death, we believe the family home will be dissolved or cease,
because there is no more reason for its existence. If there are beneficiaries who survive living in
the family home, it will continue for ten years, unless at the expiration of the ten years, there is
still a minor beneficiary, in which case the family home continues until that beneficiary becomes
of age.

After these periods lapse, the property may be partitioned by the heirs. May the heirs who are
beneficiaries of the family home keep it intact by not partitioning the property after the period provided by
this article? We believe that although the heirs will continue in ownership by not partitioning the
property, it will cease to be a family home.14 (Emphasis supplied)

Prof. Ernesto L. Pineda further explains the import of Art. 159 in this manner:

The family home shall continue to exist despite the death of one or both spouses or of the unmarried
head of the family. Thereafter, the length of its continued existence is dependent upon whether there is
still a minor-beneficiary residing therein. For as long as there is one beneficiary even if the head
of the family or both spouses are already dead, the family home will continue to exist (Arts. 153,
159). If there is no minor-beneficiary, it will subsist until 10 years and within this period, the heirs
cannot partition the same except when there are compelling reasons which will justify the
partition. This rule applies regardless of whoever owns the property or who constituted the family
home.15 (Emphasis supplied)

The rule in Article 159 of the Family Code may thus be expressed in this wise: If there are beneficiaries
who survive and are living in the family home, it will continue for 10 years, unless at the expiration of 10
years, there is still a minor beneficiary, in which case the family home continues until that beneficiary
becomes of age.

It may be deduced from the view of Dr. Tolentino that as a general rule, the family home may be
preserved for a minimum of 10 years following the death of the spouses or the unmarried family head
who constituted the family home, or of the spouse who consented to the constitution of his or her
separate property as family home. After 10 years and a minor beneficiary still lives therein, the family
home shall be preserved only until that minor beneficiary reaches the age of majority. The intention of the
law is to safeguard and protect the interests of the minor beneficiaryuntil he reaches legal age and would
now be capable of supporting himself. However, three requisites must concur before a minor beneficiary
is entitled to the benefits of Art. 159: (1) the relationship enumerated in Art. 154 of the Family Code; (2)
they live in the family home, and (3) they are dependent for legal support upon the head of the family.

Thus, the issue for resolution now is whether Marcelino Lorenzo R. Dario IV, the minor son of private
respondent, can be considered as a beneficiary under Article 154 of the Family Code.

As to the first requisite, the beneficiaries of the family home are: (1) The husband and wife, or an
unmarried person who is the head of a family; and (2) Their parents, ascendants, descendants, brothers
and sisters, whether the relationship be legitimate or illegitimate. The term "descendants" contemplates
all descendants of the person or persons who constituted the family home without distinction; hence, it
must necessarily include the grandchildren and great grandchildren of the spouses who constitute a
family home. Ubi lex non distinguit nec nos distinguire debemos. Where the law does not distinguish, we
should not distinguish. Thus, private respondents minor son, who is also the grandchild of deceased
Marcelino V. Dario satisfies the first requisite.

As to the second requisite, minor beneficiaries must be actually living in the family home to avail of the
benefits derived from Art. 159. Marcelino Lorenzo R. Dario IV, also known as Ino, the son of private
respondent and grandson of the decedent Marcelino V. Dario, has been living in the family home since
1994, or within 10 years from the death of the decedent, hence, he satisfies the second requisite.

However, as to the third requisite, Marcelino Lorenzo R. Dario IV cannot demand support from his
paternal grandmother if he has parents who are capable of supporting him. The liability for legal support
falls primarily on Marcelino Lorenzo R. Dario IVs parents, especially his father, herein private respondent
who is the head of his immediate family. The law first imposes the obligation of legal support upon the
shoulders of the parents, especially the father, and only in their default is the obligation imposed on the
grandparents.

Marcelino Lorenzo R. Dario IV is dependent on legal support not from his grandmother, but from his
father. Thus, despite residing in the family home and his being a descendant of Marcelino V. Dario,
1wphi1

Marcelino Lorenzo R. Dario IV cannot be considered as beneficiary contemplated under Article 154
because he did not fulfill the third requisite of being dependent on his grandmother for legal support. It is
his father whom he is dependent on legal support, and who must now establish his own family home
separate and distinct from that of his parents, being of legal age.

Legal support, also known as family support, is that which is provided by law, comprising everything
indispensable for sustenance, dwelling, clothing, medical attendance, education and transportation, in
keeping with the financial capacity of the family.16 Legal support has the following characteristics: (1) It is
personal, based on family ties which bind the obligor and the obligee; (2) It is intransmissible; (3) It cannot
be renounced; (4) It cannot be compromised; (5) It is free from attachment or execution; (6) It is
reciprocal; (7) It is variable in amount.17

Professor Pineda is of the view that grandchildren cannot demand support directly from their
grandparents if they have parents (ascendants of nearest degree) who are capable of supporting them.
This is so because we have to follow the order of support under Art. 199. 18 We agree with this view.

The reasons behind Art. 199 as explained by Pineda and Tolentino: the closer the relationship of the
relatives, the stronger the tie that binds them. Thus, the obligation to support under Art. 199 which
outlines the order of liability for support is imposed first upon the shoulders of the closer relatives and only
in their default is the obligation moved to the next nearer relatives and so on.

There is no showing that private respondent is without means to support his son; neither is there any
evidence to prove that petitioner, as the paternal grandmother, was willing to voluntarily provide for her
grandsons legal support. On the contrary, herein petitioner filed for the partition of the property which
shows an intention to dissolve the family home, since there is no more reason for its existence after the
10-year period ended in 1997.

With this finding, there is no legal impediment to partition the subject property.

The law does not encourage co-ownerships among individuals as oftentimes it results in inequitable
situations such as in the instant case. Co-owners should be afforded every available opportunity to divide
their co-owned property to prevent these situations from arising.

As we ruled in Santos v. Santos,19 no co-owner ought to be compelled to stay in a co-ownership

indefinitely, and may insist on partition on the common property at any time. An action to demand partition
is imprescriptible or cannot be barred by laches. Each co-owner may demand at any time the partition of
the common property.20

Since the parties were unable to agree on a partition, the court a quo should have ordered a partition by
commissioners pursuant to Section 3, Rule 69 of the Rules of Court. Not more than three competent and
disinterested persons should be appointed as commissioners to make the partition, commanding them to
set off to the plaintiff and to each party in interest such part and proportion of the property as the court
shall direct.

When it is made to appear to the commissioners that the real estate, or a portion thereof, cannot be
divided without great prejudice to the interest of the parties, the court may order it assigned to one of the
parties willing to take the same, provided he pays to the other parties such sum or sums of money as the
commissioners deem equitable, unless one of the parties interested ask that the property be sold instead
of being so assigned, in which case the court shall order the commissioners to sell the real estate at
public sale, and the commissioners shall sell the same accordingly.21

The partition of the subject property should be made in accordance with the rule embodied in Art. 996 of
the Civil Code.22 Under the law of intestate succession, if the widow and legitimate children survive, the
widow has the same share as that of each of the children. However, since only one-half of the conjugal
property which is owned by the decedent is to be allocated to the legal and compulsory heirs (the other
half to be given exclusively to the surviving spouse as her conjugal share of the property), the widow will
have the same share as each of her two surviving children. Hence, the respective shares of the subject
property, based on the law on intestate succession are: (1) Perla Generosa Dario, 4/6; (2) Marcelino Marc
G. Dario II, 1/6 and (3) Marcelino G. Dario III, 1/6.
In Vda. de Daffon v. Court of Appeals,23 we held that 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. If the court after trial should find the existence of co-ownership among the parties, the
court may and should order the partition of the properties in the same action. 24

WHEREFORE, the petition is GRANTED. The Resolution of the Court of Appeals in CA-G.R. CV No.
80680 dated December 9, 2005, is REVERSED and SET ASIDE. The case is REMANDED to the
Regional Trial Court of Quezon City, Branch 78, who is directed to conduct a PARTITION BY
COMMISSIONERS and effect the actual physical partition of the subject property, as well as the
improvements that lie therein, in the following manner: Perla G. Dario, 4/6; Marcelino Marc G. Dario, 1/6
and Marcelino G. Dario III, 1/6. The trial court is DIRECTED to appoint not more than three (3) competent
and disinterested persons, who should determine the technical metes and bounds of the property and the
proper share appertaining to each heir, including the improvements, in accordance with Rule 69 of the
Rules of Court. When it is made to the commissioners that the real estate, or a portion thereof, cannot be
divided without great prejudice to the interest of the parties, the court a quo may order it assigned to one
of the parties willing to take the same, provided he pays to the other parties such sum or sums of money
as the commissioners deem equitable, unless one of the parties interested ask that the property be sold
instead of being so assigned, in which case the court shall order the commissioners to sell the real estate
at public sale, and the commissioners shall sell the same accordingly, and thereafter distribute the
proceeds of the sale appertaining to the just share of each heir. No pronouncement as to costs.

SO ORDERED.

G.R. No. 164277 October 8, 2014

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

DECISION

BERSAMIN, J.:

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

Antecedents

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

April 23, 1990, prior to any partition among the heirs, Eliseo sold a portion of his share, measuring 600
square meters, to respondent Atty. Daryll A. Amante (respondent), with the affected portion being
described in the deed of absolute sale Eliseo executed in the following manner:

A portion of a parcel of land located at the back of the Pleasant Homes Subdivision and also at the back
of Don Bosco Seminary, Punta Princesa, Cebu City, to be taken from my share of the whole lot; the
portion sold to Atty. Amante is only 600 square meters which is the area near the boundary facing the
Pleasant Homes Subdivision, Cebu City. 2
On July 25, 1991, Eliseo, sickly and in need of money, sold an additional 1/3 portion of his share inthe
property to the respondent, with their deed of absolute sale stating that the sale was with the approval of
Eliseos siblings, and describing the portion subject of the sale as:

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

On September 30, 1992, Fe, Eliseo, Jose and Gloria executed a deed of extrajudicial partition to divide
their fathers estate (consisting of the aforementioned parcel of land) among themselves. Pursuant to the
4

deed extrajudicial partition, OCT No. O-188 was cancelled, and on July 12, 1994 the Register of Deeds
issued TransferCertificate of Title (TCT) No. 6555, TCT No. 6556, TCT No. 6557 and TCT No. 6558 to 5

the petitioner, Gloria, Jose, and Eliseo, respectively. The partition resulted in the portions earlier sold by
Eliseo to the respondent being adjudicated to the petitioner instead of to Eliseo. 6

Due to the petitioners needing her portion that was then occupied by the respondent, she demanded that
the latter vacate it. Despite several demands, the last of which was by the letter dated November 4,
1994, the respondent refused to vacate, prompting her to file against him on February 14, 1995 a
7

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

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

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

Judgment of the MTCC

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

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

The MTCC disposed as follows:

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

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

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

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

4) to pay the costs of suit.

SO ORDERED. 11

Decision of the RTC

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

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

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

reconsideration, but the RTC denied her motion on November 13, 1996. 14

Decision of the CA

The petitioner appealed to the CA by petition for review.

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

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

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

Issues

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

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

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

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

Ruling

The petition for review on certiorarilacks merit.

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

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

ownership in that instance is merely provisional, and will not bar or prejudice an action between the same
parties involving the title to the property.
21

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

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

the heirs, subject to the payment of the debts of the deceased. In a co-ownership, the undivided thing or
23

right belong to different persons, with each of them holding the property pro indivisoand exercising her
rights over the whole property. Each co-owner may use and enjoy the property with no other limitation
than that he shall not injure the interests of his co-owners. The underlying rationale is that until a division
is actually made, the respective share of each cannot be determined, and every co-owner exercises,
together with his co-participants, joint ownership of the pro indiviso property, in addition to his use and
enjoyment of it.24
Even if an heirs right in the estate of the decedent has not yet been fully settled and partitioned and is
thus merely inchoate, Article 493 of the Civil Codegives the heir the right to exercise acts of ownership.
25

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SO ORDERED.

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

ANGELA I. TUASON, plaintiff-appellant,

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

Alcuaz & Eiguren for appellant.

Araneta & Araneta for appellees.

MONTEMAYOR, J.:

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

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

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

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

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

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

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

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

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

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

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

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

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

The Court finds from the evidence that he defendant Gregorio Araneta, Incorporated has
substantially complied with obligation imposed by the contract exhibit 6 in its paragraph 1, and
that for improvements alone, it has disbursed the amount of P117,167.09. It has likewise paid
taxes, commissions and other expenses incidental to its obligations as denied in the agreement.
 With respect to the charged that Gregorio Araneta, Incorporated has failed to submit to plaintiff a
copy of the subdivision plains, list of prices and the conditions governing the sale of subdivided
lots, and monthly statement of collections form the sale of the lots, the Court is of the opinion that
it has no basis. The evidence shows that the defendant corporation submitted to the plaintiff
periodically all the data relative to prices and conditions of the sale of the subdivided lots,
together with the amount corresponding to her. But without any justifiable reason, she refused to
accept them. With the indifferent attitude adopted by the plaintiff, it was thought useless for
Gregorio Araneta, Incorporated to continue sending her statement of accounts, checks and other
things. She had shown on various occasions that she did not want to have any further dealings
with the said corporation. So, if the defendant corporation proceeded with the sale of the
subdivided lots without the approval of the plaintiff, it was because it was under the correct
impression that under the contract exhibit 6 the decision of the majority co-owners is binding upon
all the three.

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

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

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

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

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

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

This aspect of the contract is very similar to and was perhaps based on the other agreement or contract
(Exh. "L") referred to by appellant where the parties thereto in express terms entered into partnership,
although this object is not expressed in so many words in Exh. 6. We repeat that we see no violation of
Art. 400 of the Civil Code in the parties entering into the contract (Exh. 6) for the very reason that Art. 400
is not applicable.
Looking at the case from a practical standpoint as did the trial court, we find no valid ground for the
partition insisted upon the appellant. We find from the evidence as was done by the trial court that of the
64,928.6 sq. m. which is the total area of the parcel held in common, only 1,600 sq. m. or 2.5 per cent of
the entire area remained unsold at the time of the trial in the year 1947, while the great bulk of 97.5 per
cent had already been sold. As well observed by the court below, the partnership is in the process of
being dissolved and is about to be dissolved, and even assuming that Art. 400 of the Civil Code were
applicable, under which the parties by agreement may agree to keep the thing undivided for a period not
exceeding 10 years, there should be no fear that the remaining 1,600 sq. m. could not be disposed of
within the four years left of the ten-years period fixed by Art. 400.

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

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

So ordered.

G.R. No. L-25014 October 17, 1973

DOLORES LAHORA VDA. DE CASTRO, ARSENIO DE CASTRO, JR., WILFREDO DE CASTRO,

IRINEO DE CASTRO and VIRGINIA DE CASTRO ALEJANDRO, (in substitution for the deceased
defendant-appellant ARSENIO DE CASTRO, SR.)., petitioners,
vs.
GREGORIO ATIENZA, respondent.

Arsenio de Castro, Jr. and F.T. Papa for petitioners.

Dakila Castro and Z.D. de Mesa for respondent.

TEEHANKEE, J.:

The Court rejects petitioners' appeal as without merit and affirms the judgment of the appellate court.
Petitioners' predecessor-in-interest as co-owner of an undivided one-half interest in the fishpond could
validly lease his interest to a third party, respondent Atienza, independently of his co-owner (although
said co-owner had also leased his other undivided one-half interest to the same third party) and could
likewise by mutual agreement independently cancel his lease agreement with said third party. Said
predecessor-in-interest (and petitioners who have substituted him as his heirs) therefore stands liable on
his express undertaking to refund the advance rental paid to him by the lessee on the cancelled lease
and cannot invoke the non-cancellation of the co-owner's lease to elude such liability.

The Court of Appeals, in its decision affirming in toto the judgment of the Manila court of first instance
ordering therein defendant-appellant Arsenio de Castro, Sr. (now deceased and substituted by above-
named petitioners as his heirs) "to return to the plaintiff (respondent) Gregorio Atienza the sum P2,500.00
with legal interest from the date of the filing of complaint until fully paid plus the sum of P250.00 as
attorney's fees and the costs of the suit", found the following facts to undisputed:
 On January 24, 1956 the brothers Tomas de Castro and Arsenio de Castro, Sr. leased to
plaintiff a fishpond containing an area of 26 hectares situated in Polo, Bulacan and
forming part of a bigger parcel of land covered by Transfer Certificate of Title No. 196450
of the registry of the property of Bulacan. The lessors are co-owners in equal shares of
the leased property.

According to the contract of lease (Exh. 1) the term of the lease was for five years from
January 24, 1956 at a rental of P5,000 a year, the first year's rental to be paid on
February 1, 1956, the second on February 1, 1957 and the rental for the last three years
on February 1, 1958. The first year's rental was paid on time.

In the meantime, Tomas de Castro died.

In the month of November, 1956, plaintiff as lessee and defendant Arsenio de Castro, Sr.
as one of the lessors, agreed to set aside and annul the contract of lease and for this
purpose an agreement (Exh. A) was signed by them, Exhibit A as signed by plaintiff and
defendant shows that Felisa Cruz Vda. de Castro, widow of Tomas de Castro, was
intended to be made a party thereof in her capacity as representative of the heirs of
Tomas Castro.

Condition No. 2 of Exhibit A reads as follows:

"2. Na sa pamamagitan nito ay pinawawalang kabuluhan namin ang nasabing kasulatan

at nagkasundo kami na ang bawat isa sa amin ni Arsenio de Castro at Felisa Cruz Vda.
de Castro ay isauli kay GREGORIO ATIENZA ang tig P2,500.00 o kabuuang halagang
P5,000.00 na paunang naibigay nito alinsunod sa nasabing kasulatan; na ang nasabing
tig P2,500.00 ay isasauli ng bawat isa sa amin sa o bago dumating ang Dec. 30, 1956."

Felisa Cruz Vda. de Castro refused to sign Exhibit A. Defendant did not pay the
P2,500.00 which under the above-quoted paragraph of Exhibit A, he should have paid on
December 30, 1956. Demand for payment was made by plaintiff's counsel on January 7,
1957 but to no avail, hence the present action.

On the conflicting contentions between the parties as to who between them would attend to securing the
signature of Mrs. Felisa Cruz Vda. de Castro (widow of Tomas de Castro) to the agreement of
cancellation of the lease with respondent Atienza, the appellate court found that "the testimony of the
defendant (Arsenio de Castro, Sr.) ... supports the contention of the plaintiff (Atienza) "that it was the
defendant Arsenio who was interested and undertook to do so, citing Arsenio's own declaration that "I
agreed to sign this document (referring to the cancellation) because of my desire to cancel our original
agreement" and that his purpose in obtaining the cancellation of said lease agreement with plaintiff
Atienza was "(B)ecause I had the intention of having said fishpond leased to other persons and I cannot
lease it to third parties unless I can secure the signature of Felisa Vda. de Castro."

The appellate court thus held in effect that as Arsenio "was the one interested in cancelling the lease
(Exh. 1), it stands to reason that he most probably undertook to obtain the signature of Mrs. Castro
[widow and successor-in-interest of his brother Tomas]" and that he could not invoke his own failure to
obtain such signature to elude his own undertaking and liability to refund respondent (plaintiff) his share
of the rental paid in advance by respondent on the cancelled lease in the sum of P2,500.00.

The appellate court furthermore correctly held that the consent or concurrence of Felisa Vda. de Castro
(as co-owner in succession of Tomas) was not an essential condition to the validity and effectivity of the
agreement of cancellation of the lease (Exhibit A) as between Arsenio and respondent-lessee, contrary to
petitioners' claim, holding that "(S)ince there is no specific provision in Exhibit A supporting defendant's
claim, we are not prepared to supply such condition unless the same can be deduced from other
evidence or unless the terms of Exhibit A cannot be performed by plaintiff and defendant without Mrs.
Castro being bound as a party thereto."

The issue is simply reduced to whether Arsenio as co-owner of the fishpond owned pro-indiviso by him
with his brother Tomas (succeeded by Felisa Vda. de Castro) could validly lease his half-interest to a third
party (respondent Atienza) independently of his
co-owner, and in case his co-owner also leased his other half interest to the same third party, whether
Arsenio could cancel his own lease agreement with said third party?

The appellate court correctly resolved the issue thus: "Our view of the contract of lease Exhibit 1 is that
each of the Castro brothers, leased his undivided one-half interest in the fishpond they owned in common
to the plaintiff. Could one of them have validly leased his interest without the other co-owner leasing his
own? The answer to this is given by appellant in his own brief (p. 14) when he said that it would result in a
partnership between the lessee and the owner of the other undivided half. If the lease could be entered
into partially by one of the co-owners, insofar as his interest is concerned, then the lease, Exhibit 1, can
also be cancelled partially as between plaintiff and defendant. Therefore, we conclude that the consent of
Mrs. Felisa Cruz Vda. de Castro is not essential for the cancellation of the lease of defendant's one-half
undivided share in the fishpond to plaintiff."

The appellate court's judgment is fully supported by the Civil Code provisions on the rights and
prerogatives of co-owners, and specifically by Article 493 which expressly provides that

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

ACCORDINGLY, the appealed judgment is hereby affirmed with costs against petitioners.

Makalintal, Actg. C.J., Zaldivar, Castro, Fernando, Barredo, Makasiar, Antonio and Esguerra, JJ., concur.

G.R. No. 109972 April 29, 1996

ZOSIMA VERDAD, petitioner,

vs.
THE HON. COURT OF APPEALS, SOCORRO C. ROSALES, AURORA ROSALES, NAPOLEON
ROSALES, ANTONIO ROSALES, FLORENDA ROSALES, ELENA ROSALES AND VIRGINIA
ROSALES, respondents.

VITUG, J.:p

The petitioner, Zosima Verdad, is the purchaser of a 248-square meter residential lot (identified to be Lot No. 529, Ts-65 of the Butuan
Cadastre, located along Magallanes Street, now Marcos M. Calo St., Butuan City). Private respondent, Socorro Cordero Vda. de Rosales,
seeks to exercise a right of legal redemption over the subject property and traces her title to the late Macaria Atega, her mother-in-law, who
died intestate on 08 March 1956.

During her lifetime, Macaria contracted two marriages: the first with Angel Burdeos and the second,
following the latter's death, with Canuto Rosales. At the time of her own death, Macaria was survived by
her son Ramon A. Burdeos and her grandchild (by her daughter Felicidad A. Burdeos) Estela Lozada of
the first marriage and her children of the second marriage, namely, David Rosales, Justo Rosales,
Romulo Rosales, and Aurora Rosales.

Socorro Rosales is the widow of David Rosales who himself, some time after Macaria's death, died
intestate without an issue.

In an instrument, dated 14 June 1982, the heirs of Ramon Burdeos, namely, his widow Manuela Legaspi
Burdeos and children Felicidad and Ramon, Jr., sold to petitioner Zosima Verdad (their interest on) the
disputed lot supposedly for the price of P55,460.00. In a duly notarized deed of sale, dated 14 November
1982, it would appear, however, that the lot was sold for only P23,000.00. Petitioner explained that the
second deed was intended merely to save on the tax on capital gains.

Socorro discovered the sale on 30 March 1987 while she was at the City Treasurer's Office. On 31 March
1987, she sought the intervention of the Lupong Tagapayapa of Barangay 9, Princess Urduja, for the
redemption of the property. She tendered the sum of P23,000.00 to Zosima. The latter refused to accept
the amount for being much less than the lot's current value of P80,000.00. No settlement having been
reached before the Lupong Tagapayapa, private respondents, on 16 October 1987, initiated against
petitioner an action for "Legal Redemption with Preliminary Injunction" before the Regional Trial Court of
Butuan City.

On 29 June 1990, following the reception of evidence, the trial court handed down its decision holding, in
fine, that private respondents' right to redeem the property had already lapsed.

An appeal to the Court of Appeals was interposed by private respondents. The appellate court, in its
decision of 22 April 1993, reversed the court a quo; thus:

WHEREFORE, premises considered, the judgment appealed from is hereby

REVERSED, and a new one is accordingly entered declaring plaintiff-appellant, Socorro
C. Rosales, entitled to redeem the inheritance rights (Art. 1088, NCC) or pro
indiviso share (Art. 1620, NCC) of the Heirs of Ramon Burdeos, Sr. in Lot 529, Ts-65 of
the Butuan Cadastre, within the remaining ELEVEN (11) DAYS from finality hereon,
unless written notice of the sale and its terms are received in the interim, under the same
terms and conditions appearing under Exhibit "J" and after returning the purchase price
of P23,000.00 within the foregoing period. No cost. 1

In her recourse to this Court, petitioner assigned the following "errors:" That

The Honorable Court of Appeals erred in declaring Socorro C. Rosales is entitled to

redeem the inheritance rights (Article 1088, NCC) or pro-indiviso share (Article 1620,
NCC) of the heirs of Ramon Burdeos, Sr. in Lot 529, Ts-65 of the Butuan Cadastre, for
being contrary to law and evidence.

The Honorable Court of Appeals erred in ignoring the peculiar circumstance, in that, the
respondents' actual knowledge, as a factor in the delay constitutes laches.

The Honorable Court of Appeals erred in concluding that Socorro C. Rosales, in effect,
timely exercised the right of legal redemption when referral to Barangay by respondent
signifies bona fide intention to redeem and; that, redemption is properly made even if
there is no offer of redemption in legal tender.

The Honorable Court of Appeals erred in ruling that the running of the statutory
redemption period is stayed upon commencement of Barangay proceedings. 2
Still, the thrust of the petition before us is the alleged incapacity of private respondent Socorro C. Rosales
to redeem the property, she being merely the spouse of David Rosales, a son of Macaria, and not being a
co-heir herself in the intestate estate of Macaria.

We rule that Socorro can. It is true that Socorro, a daughter-in-law (or, for that matter, a mere relative by
affinity), is not an intestate heir of her parents-in-law; however, Socorro's right to the property is not
3

because she rightfully can claim heirship in Macaria's estate but that she is a legal heir of her husband,
David Rosales, part of whose estate is a share in his mother's inheritance.

David Rosales, incontrovertibly, survived his mother's death. When Macaria died on 08 March 1956 her
estate passed on to her surviving children, among them David Rosales, who thereupon became co-
owners of the property. When David Rosales himself later died, his own estate, which included
his undivided interest over the property inherited from Macaria, passed on to his widow Socorro and her
co-heirs pursuant to the law on succession.

Art. 995. In the absence of legitimate descendants and ascendants, and illegitimate
children and their descendants, whether legitimate or illegitimate, the surviving spouse
shall inherit the entire estate, without prejudice to the rights of brothers and sisters,
nephews and nieces, should there be any, under article 1001.

xxx xxx xxx

Art. 1001. Should brothers and sisters or their children survive with the widow or widower,
the latter shall be entitled to one-half of the inheritance and the brothers and sisters or
their children to the other half.
4

Socorro and herein private respondents, along with the co-heirs of David Rosales, thereupon
became co-owners of the property that originally descended from Macaria.

When their interest in the property was sold by the Burdeos heirs to petitioner, a right of redemption arose
in favor of private respondents; thus:

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

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

We hold that the right of redemption was timely exercised by private respondents. Concededly, no written
notice of the sale was given by the Burdeos heirs (vendors) to the co-owners required under Article 1623
5

of the Civil
Code

Art. 1623. The right of legal pre-emption or redemption shall not be exercised except
within thirty days from the notice in writing by the prospective vendor, or by the vendor,
as the case may be. The deed of safe shall not be recorded in the Registry of Property,
unless accompanied by an affidavit of the vendor that he has given written notice thereof
to all possible redemptioners.
 Hence, the thirty-day period of redemption had yet to commence when private respondent
Rosales sought to exercise the right of redemption on 31 March 1987, a day after she discovered
the sale from the Office of the City Treasurer of Butuan City, or when the case was initiated, on
16 October 1987, before the trial court.

The written notice of sale is mandatory. This Court has long established the rule that notwithstanding
actual knowledge of a co-owner, the latter is still entitled to a written notice from the selling co-owner in
order to remove all uncertainties about the sale, its terms and conditions, as well as its efficacy and
status.6

Even in Alonzo vs. Intermediate Appellate Court, relied upon by petitioner in contending that actual
7

knowledge should be an equivalent to a written notice of sale, the Court made it clear that it was not
reversing the prevailing jurisprudence; said the Court:

We realize that in arriving at our conclusion today, we are deviating from the strict letter
of the law, which the respondent court understandably applied pursuant to existing
jurisprudence. The said court acted properly as it had no competence to reverse the
doctrines laid down by this Court in the above-cited cases. In fact, and this should be
clearly stressed, we ourselves are not abandoning the De Conejero and Buttle doctrines.
What we are doing simply is adopting an exception to the general rule, in view of the
peculiar circumstances of this case. 8

In Alonzo, the right of legal redemption was invoked several years, not just days or months, after
the consummation of the contracts of sale. The complaint for legal redemption itself was there
filed more than thirteen years after the sales were concluded.

Relative to the question posed by petitioner on private respondents' tender of payment, it is enough that
we quote, with approval, the appellate court; viz.:

In contrast, records dearly show that an amount was offered, as required in Sempio
vs. Del Rosario, 44 Phil. 1 and Daza vs. Tomacruz, 58 Phil. 414, by the redemptioner-
appellant during the barangay conciliation proceedings (Answer, par. 8) but was flatly
rejected by the appellee, not on the ground that it was not the purchase price (though it
appeared on the face of the deed of sale, Exh. "J-1"), nor that it was offered as partial
payment thereof, but rather that it was

All given, we find no error in the appellate court's finding that private respondents are entitled to the
redemption of the subject property.

WHEREFORE, the petition is DENIED and the assailed decision of the Court of Appeals is AFFIRMED.
Costs against petitioner.

SO ORDERED.

G.R. No. 164110 February 12, 2008

LEONOR B. CRUZ, petitioner,

vs.
TEOFILA M. CATAPANG, respondent.

DECISION

QUISUMBING, J.:
This petition for review seeks the reversal of the Decision1 dated September 16, 2003 and the
Resolution2 dated June 11, 2004 of the Court of Appeals in CA-G.R. SP No. 69250. The Court of Appeals
reversed the Decision3dated October 22, 2001 of the Regional Trial Court (RTC), Branch 86, Taal,
Batangas, which had earlier affirmed the Decision4 dated September 20, 1999 of the 7th Municipal Circuit
Trial Court (MCTC) of Taal, Batangas ordering respondent to vacate and deliver possession of a portion
of the lot co-owned by petitioner, Luz Cruz and Norma Maligaya.

The antecedent facts of the case are as follows.

Petitioner Leonor B. Cruz, Luz Cruz and Norma Maligaya are the co-owners of a parcel of land covering
an area of 1,435 square meters located at Barangay Mahabang Ludlod, Taal, Batangas. 5 With the
consent of Norma Maligaya, one of the aforementioned co-owners, respondent Teofila M. Catapang built
a house on a lot adjacent to the abovementioned parcel of land sometime in 1992. The house intruded,
however, on a portion of the co-owned property.6

In the first week of September 1995, petitioner Leonor B. Cruz visited the property and was surprised to
see a part of respondents house intruding unto a portion of the co-owned property. She then made
several demands upon respondent to demolish the intruding structure and to vacate the portion
encroaching on their property. The respondent, however, refused and disregarded her demands. 7

On January 25, 1996, the petitioner filed a complaint8 for forcible entry against respondent before the
7th MCTC of Taal, Batangas. The MCTC decided in favor of petitioner, ruling that consent of only one of
the co-owners is not sufficient to justify defendants construction of the house and possession of the
portion of the lot in question.9 The dispositive portion of the MCTC decision reads:

WHEREFORE, judgment is hereby rendered ordering the defendant or any person acting in her
behalf to vacate and deliver the possession of the area illegally occupied to the plaintiff; ordering
the defendant to pay plaintiff reasonable attorneys fees of P10,000.00, plus costs of suit.

SO ORDERED.10

On appeal, the RTC, Branch 86, Taal, Batangas, affirmed the MCTCs ruling in a Decision dated October
22, 2001, the dispositive portion of which states:

Wherefore, premises considered, the decision [appealed] from is hereby affirmed in toto.

SO ORDERED.11

After her motion for reconsideration was denied by the RTC, respondent filed a petition for review with the
Court of Appeals, which reversed the RTCs decision. The Court of Appeals held that there is no cause of
action for forcible entry in this case because respondents entry into the property, considering the consent
given by co-owner Norma Maligaya, cannot be characterized as one made through strategy or stealth
which gives rise to a cause of action for forcible entry.12 The Court of Appeals decision further held that
petitioners remedy is not an action for ejectment but an entirely different recourse with the appropriate
forum. The Court of Appeals disposed, thus:

WHEREFORE, premises considered, the instant Petition is hereby GRANTED. The challenged
Decision dated 22 October 2001 as well as the Order dated 07 January 2002 of the Regional
Trial Court of Taal, Batangas, Branch 86, are hereby REVERSED and SET ASIDE and, in lieu
thereof, another is entered DISMISSING the complaint for forcible entry docketed as Civil Case
No. 71-T.

SO ORDERED.13
After petitioners motion for reconsideration was denied by the Court of Appeals in a Resolution dated
June 11, 2004, she filed the instant petition.

Raised before us for consideration are the following issues:

I.

WHETHER OR NOT THE KNOWLEDGE AND CONSENT OF CO-OWNER NORMA MALIGAYA

IS A VALID LICENSE FOR THE RESPONDENT TO ERECT THE BUNGALOW HOUSE ON THE
PREMISES OWNED PRO-INDIVISO SANS CONSENT FROM THE PETITIONER AND OTHE[R]
CO-OWNER[.]

II.

WHETHER OR NOT RESPONDENT, BY HER ACTS, HAS ACQUIRED EXCLUSIVE

OWNERSHIP OVER THE PORTION OF THE LOT SUBJECT OF THE PREMISES PURSUANT
TO THE CONSENT GRANTED UNTO HER BY CO-OWNER NORMA MALIGAYA TO THE
EXCLUSION OF THE PETITIONER AND THE OTHER CO-OWNER.14

III.

. . . WHETHER OR NOT RESPONDENT IN FACT OBTAINED POSSESSION OF THE

PROPERTY IN QUESTION BY MEANS OF SIMPLE STRATEGY.15

Petitioner prays in her petition that we effectively reverse the Court of Appeals decision.

Simply put, the main issue before us is whether consent given by a co-owner of a parcel of land to a
person to construct a house on the co-owned property warrants the dismissal of a forcible entry case filed
by another co-owner against that person.

In her memorandum,16 petitioner contends that the consent and knowledge of co-owner Norma Maligaya
cannot defeat the action for forcible entry since it is a basic principle in the law of co-ownership that no
individual co-owner can claim title to any definite portion of the land or thing owned in common until
partition.

On the other hand, respondent in her memorandum17 counters that the complaint for forcible entry cannot
prosper because her entry into the property was not through strategy or stealth due to the consent of one
of the co-owners. She further argues that since Norma Maligaya is residing in the house she built, the
issue is not just possession de facto but also one of possession de jure since it involves rights of co-
owners to enjoy the property.

As to the issue of whether or not the consent of one co-owner will warrant the dismissal of a forcible entry
case filed by another co-owner against the person who was given the consent to construct a house on the
co-owned property, we have held that a co-owner cannot devote common property to his or her exclusive
use to the prejudice of the co-ownership.18 In our view, a co-owner cannot give valid consent to another to
build a house on the co-owned property, which is an act tantamount to devoting the property to his or her
exclusive use.

Furthermore, Articles 486 and 491 of the Civil Code provide:

Art. 486. Each co-owner may use the thing owned in common, provided he does so in
accordance with the purpose for which it is intended and in such a way as not to injure the
 interest of the co-ownership or prevent the other co-owners from using it according to their rights.
The purpose of the co-ownership may be changed by agreement, express or implied.

Art. 491. None of the co-owners shall, without the consent of the others, make alterations in the
thing owned in common, even though benefits for all would result therefrom. However, if the
withholding of the consent by one or more of the co-owners is clearly prejudicial to the common
interest, the courts may afford adequate relief.

Article 486 states each co-owner may use the thing owned in common provided he does so in
accordance with the purpose for which it is intended and in such a way as not to injure the interest of the
co-ownership or prevent the other co-owners from using it according to their rights. Giving consent to a
third person to construct a house on the co-owned property will injure the interest of the co-ownership and
prevent other co-owners from using the property in accordance with their rights.

Under Article 491, none of the co-owners shall, without the consent of the others, make alterations in the
thing owned in common. It necessarily follows that none of the co-owners can, without the consent of the
other co-owners, validly consent to the making of an alteration by another person, such as respondent, in
the thing owned in common. Alterations include any act of strict dominion or ownership and any
encumbrance or disposition has been held implicitly to be an act of alteration. 19 The construction of a
house on the co-owned property is an act of dominion. Therefore, it is an alteration falling under Article
491 of the Civil Code. There being no consent from all co-owners, respondent had no right to construct
her house on the co-owned property.

Consent of only one co-owner will not warrant the dismissal of the complaint for forcible entry filed against
the builder. The consent given by Norma Maligaya in the absence of the consent of petitioner and Luz
Cruz did not vest upon respondent any right to enter into the co-owned property. Her entry into the
property still falls under the classification "through strategy or stealth."

The Court of Appeals held that there is no forcible entry because respondents entry into the property was
not through strategy or stealth due to the consent given to her by one of the co-owners. We cannot give
our imprimatur to this sweeping conclusion. Respondents entry into the property without the permission
of petitioner could appear to be a secret and clandestine act done in connivance with co-owner Norma
Maligaya whom respondent allowed to stay in her house. Entry into the land effected clandestinely
without the knowledge of the other co-owners could be categorized as possession by stealth.20 Moreover,
respondents act of getting only the consent of one co-owner, her sister Norma Maligaya, and allowing the
latter to stay in the constructed house, can in fact be considered as a strategy which she utilized in order
to enter into the co-owned property. As such, respondents acts constitute forcible entry.

Petitioners filing of a complaint for forcible entry, in our view, was within the one-year period for filing the
complaint. The one-year period within which to bring an action for forcible entry is generally counted from
the date of actual entry to the land. However, when entry is made through stealth, then the one-year
period is counted from the time the petitioner learned about it.21 Although respondent constructed her
house in 1992, it was only in September 1995 that petitioner learned of it when she visited the property.
Accordingly, she then made demands on respondent to vacate the premises. Failing to get a favorable
response, petitioner filed the complaint on January 25, 1996, which is within the one-year period from the
time petitioner learned of the construction.

WHEREFORE, the petition is GRANTED. The Decision dated September 16, 2003 and the Resolution
dated June 11, 2004 of the Court of Appeals in CA-G.R. SP No. 69250 are REVERSED and SET
ASIDE. The Decision dated October 22, 2001 of the Regional Trial Court, Branch 86, Taal, Batangas
is REINSTATED. Costs against respondent.

SO ORDERED.
G.R. No. 161916 January 20, 2006

ARNELITO ADLAWAN, Petitioner,

vs.
EMETERIO M. ADLAWAN and NARCISA M. ADLAWAN, Respondents.

DECISION

YNARES-SANTIAGO, J.:

Assailed in this petition for review is the September 23, 2003 Decision1 of the Court of Appeals in CA-
G.R. SP No. 74921 which set aside the September 13, 2002 Decision2 of the Regional Trial Court (RTC)
of Cebu City, Branch 7, in Civil Case No. CEB-27806, and reinstated the February 12, 2002 Judgment3 of
the Municipal Trial Court (MTC) of Minglanilla, Metro Cebu, in Civil Case No. 392, dismissing petitioner
Arnelito Adlawans unlawful detainer suit against respondents Emeterio and Narcisa Adlawan. Likewise
questioned is the January 8, 2004 Resolution4 of the Court of Appeals which denied petitioners motion for
reconsideration.

The instant ejectment suit stemmed from the parties dispute over Lot 7226 and the house built thereon,
covered by Transfer Certificate of Title No. 8842,5 registered in the name of the late Dominador Adlawan
and located at Barrio Lipata, Municipality of Minglanilla, Cebu. In his complaint, petitioner claimed that he
is an acknowledged illegitimate child6 of Dominador who died on May 28, 1987 without any other issue.
Claiming to be the sole heir of Dominador, he executed an affidavit adjudicating to himself Lot 7226 and
the house built thereon.7 Out of respect and generosity to respondents who are the siblings of his father,
he granted their plea to occupy the subject property provided they would vacate the same should his
need for the property arise. Sometime in January 1999, he verbally requested respondents to vacate the
house and lot, but they refused and filed instead an action for quieting of title 8with the RTC. Finally, upon
respondents refusal to heed the last demand letter to vacate dated August 2, 2000, petitioner filed the
instant case on August 9, 2000.9

On the other hand, respondents Narcisa and Emeterio, 70 and 59 years of age, respectively, 10 denied that
they begged petitioner to allow them to stay on the questioned property and stressed that they have been
occupying Lot 7226 and the house standing thereon since birth. They alleged that Lot 7226 was originally
registered in the name of their deceased father, Ramon Adlawan11 and the ancestral house standing
thereon was owned by Ramon and their mother, Oligia Maacap Adlawan. The spouses had
nine12 children including the late Dominador and herein surviving respondents Emeterio and Narcisa.
During the lifetime of their parents and deceased siblings, all of them lived on the said property.
Dominador and his wife, Graciana Ramas Adlawan, who died without issue, also occupied the
same.13 Petitioner, on the other hand, is a stranger who never had possession of Lot 7226.

Sometime in 1961, spouses Ramon and Oligia needed money to finance the renovation of their house.
Since they were not qualified to obtain a loan, they transferred ownership of Lot 7226 in the name of their
son Dominador who was the only one in the family who had a college education. By virtue of a January
31, 1962 simulated deed of sale,14 a title was issued to Dominador which enabled him to secure a loan
with Lot 7226 as collateral. Notwithstanding the execution of the simulated deed, Dominador, then single,
never disputed his parents ownership of the lot. He and his wife, Graciana, did not disturb respondents
possession of the property until they died on May 28, 1987 and May 6, 1997, respectively.

Respondents also contended that Dominadors signature at the back of petitioners birth certificate was
forged, hence, the latter is not an heir of Dominador and has no right to claim ownership of Lot
7226.15 They argued that even if petitioner is indeed Dominadors acknowledged illegitimate son, his right
to succeed is doubtful because Dominador was survived by his wife, Graciana. 16

On February 12, 2002, the MTC dismissed the complaint holding that the establishment of petitioners
filiation and the settlement of the estate of Dominador are conditions precedent to the accrual of
petitioners action for ejectment. It added that since Dominador was survived by his wife, Graciana, who
died 10 years thereafter, her legal heirs are also entitled to their share in Lot 7226. The dispositive portion
thereof, reads:

In View of the foregoing, for failure to prove by preponderance of evidence, the plaintiffs cause of action,
the above-entitled case is hereby Ordered DISMISSED.

SO ORDERED.17

On appeal by petitioner, the RTC reversed the decision of the MTC holding that the title of Dominador
over Lot 7226 cannot be collaterally attacked. It thus ordered respondents to turn over possession of the
controverted lot to petitioner and to pay compensation for the use and occupation of the premises. The
decretal portion thereof, provides:

Wherefore, the Judgment, dated February 12, 2002, of the Municipal Trial Court of Minglanilla, Cebu, in
Civil Case No. 392, is reversed. Defendants-appellees are directed to restore to plaintiff-appellant
possession of Lot 7226 and the house thereon, and to pay plaintiff-appellant, beginning in August 2000,
compensation for their use and occupation of the property in the amount of P500.00 a month.

So ordered.18

Meanwhile, the RTC granted petitioners motion for execution pending appeal19 which was opposed by
the alleged nephew and nieces of Graciana in their motion for leave to intervene and to file an answer in
intervention.20 They contended that as heirs of Graciana, they have a share in Lot 7226 and that
intervention is necessary to protect their right over the property. In addition, they declared that as co-
owners of the property, they are allowing respondents to stay in Lot 7226 until a formal partition of the
property is made.

The RTC denied the motion for leave to intervene.21 It, however, recalled the order granting the execution
pending appeal having lost jurisdiction over the case in view of the petition filed by respondents with the
Court of Appeals.22

On September 23, 2003, the Court of Appeals set aside the decision of the RTC and reinstated the
judgment of the MTC. It ratiocinated that petitioner and the heirs of Graciana are co-owners of Lot 7226.
As such, petitioner cannot eject respondents from the property via an unlawful detainer suit filed in his
own name and as the sole owner of the property. Thus

WHEEFORE, premises considered, the appealed Decision dated September 13, 2002 of the Regional
Trial Court of Cebu City, Branch 7, in Civil Case No. CEB-27806 is REVERSED and SET ASIDE, and the
Judgment dated February 12, 2002 of the Municipal Trial Court of Minglanilla, Metro Cebu, in Civil Case
No. 392 is REINSTATED. Costs against the respondent.

SO ORDERED.23

Petitioners motion for reconsideration was denied. Hence, the instant petition.

The decisive issue to be resolved is whether or not petitioner can validly maintain the instant case for
ejectment.
Petitioner averred that he is an acknowledged illegitimate son and the sole heir of Dominador. He in fact
executed an affidavit adjudicating to himself the controverted property. In ruling for the petitioner, the RTC
held that the questioned January 31, 1962 deed of sale validly transferred title to Dominador and that
petitioner is his acknowledged illegitimate son who inherited ownership of the questioned lot. The Court
notes, however, that the RTC lost sight of the fact that the theory of succession invoked by petitioner
would end up proving that he is not the sole owner of Lot 7226. This is so because Dominador was
survived not only by petitioner but also by his legal wife, Graciana, who died 10 years after the demise of
Dominador on May 28, 1987.24 By intestate succession, Graciana and petitioner became co-owners of Lot
7226.25 The death of Graciana on May 6, 1997, did not make petitioner the absolute owner of Lot 7226
because the share of Graciana passed to her relatives by consanguinity and not to petitioner with whom
she had no blood relations. The Court of Appeals thus correctly held that petitioner has no authority to
institute the instant action as the sole owner of Lot 7226.

Petitioner contends that even granting that he has co-owners over Lot 7226, he can on his own file the
instant case pursuant to Article 487 of the Civil Code which provides:

ART. 487. Any 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).26 A co-owner may bring such an action without the necessity of
joining all the other co-owners as co-plaintiffs because the suit is presumed to have been filed to benefit
his co-owners. It should be stressed, however, that where the suit is for the benefit of the plaintiff alone
who claims to be the sole owner and entitled to the possession of the litigated property, the action should
be dismissed.27

The renowned civilist, Professor Arturo M. Tolentino, explained

A co-owner may bring such an action, without the necessity of joining all the other co-owners as co-
plaintiffs, because the suit is deemed to be instituted for the benefit of all. If the action is for the benefit
of the plaintiff alone, such that he claims possession for himself and not for the co-ownership, the
action will not prosper. (Emphasis added)28

In Baloloy v. Hular,29 respondent filed a complaint for quieting of title claiming exclusive ownership of the
property, but the evidence showed that respondent has co-owners over the property. In dismissing the
complaint for want of respondents authority to file the case, the Court held that

Under Article 487 of the New Civil Code, any of the co-owners may bring an action in ejectment. This
article covers all kinds of actions for the recovery of possession, including an accion publiciana and a
reinvidicatory action. A co-owner may bring such an action without the necessity of joining all the other
co-owners as co-plaintiffs because the suit is deemed to be instituted for the benefit of all. Any judgment
of the court in favor of the co-owner will benefit the others but if such judgment is adverse, the same
cannot prejudice the rights of the unimpleaded co-owners. If the action is for the benefit of the plaintiff
alone who claims to be the sole owner and entitled to the possession thereof, the action will not prosper
unless he impleads the other co-owners who are indispensable parties.

In this case, the respondent alone filed the complaint, claiming sole ownership over the subject property
and praying that he be declared the sole owner thereof. There is no proof that the other co-owners had
waived their rights over the subject property or conveyed the same to the respondent or such co-owners
were aware of the case in the trial court. The trial court rendered judgment declaring the respondent as
the sole owner of the property and entitled to its possession, to the prejudice of the latters siblings.
Patently then, the decision of the trial court is erroneous.
Under Section 7, Rule 3 of the Rules of Court, the respondent was mandated to implead his siblings,
being co-owners of the property, as parties. The respondent failed to comply with the rule. It must,
likewise, be stressed that the Republic of the Philippines is also an indispensable party as defendant
because the respondent sought the nullification of OCT No. P-16540 which was issued based on Free
Patent No. 384019. Unless the State is impleaded as party-defendant, any decision of the Court would
not be binding on it. It has been held that the absence of an indispensable party in a case renders
ineffective all the proceedings subsequent to the filing of the complaint including the judgment. The
absence of the respondents siblings, as parties, rendered all proceedings subsequent to the filing
thereof, including the judgment of the court, ineffective for want of authority to act, not only as to the
absent parties but even as to those present.30

In the instant case, it is not disputed that petitioner brought the suit for unlawful detainer in his name
alone and for his own benefit to the exclusion of the heirs of Graciana as he even executed an affidavit of
self- adjudication over the disputed property. It is clear therefore that petitioner cannot validly maintain the
instant action considering that he does not recognize the co-ownership that necessarily flows from his
theory of succession to the property of his father, Dominador.

In the same vein, there is no merit in petitioners claim that he has the legal personality to file the present
unlawful detainer suit because the ejectment of respondents would benefit not only him but also his
alleged co-owners. However, petitioner forgets that he filed the instant case to acquire possession of the
property and to recover damages. If granted, he alone will gain possession of the lot and benefit from the
proceeds of the award of damages to the exclusion of the heirs of Graciana. Hence, petitioner cannot
successfully capitalize on the alleged benefit to his co-owners. Incidentally, it should be pointed out that in
default of the said heirs of Graciana, whom petitioner labeled as "fictitious heirs," the State will inherit her
share31 and will thus be petitioners co-owner entitled to possession and enjoyment of the property.

The present controversy should be differentiated from the cases where the Court upheld the right of a co-
owner to file a suit pursuant to Article 487 of the Civil Code. In Resuena v. Court of Appeals,32 and Sering
v. Plazo,33 the co-owners who filed the ejectment case did not represent themselves as the exclusive
owner of the property. In Celino v. Heirs of Alejo and Teresa Santiago,34 the complaint for quieting of title
was brought in behalf of the co-owners precisely to recover lots owned in common.35 Similarly in Vencilao
v. Camarenta,36 the amended complaint specified that the plaintiff is one of the heirs who co-owns the
controverted properties.

In the foregoing cases, the plaintiff never disputed the existence of a co-ownership nor claimed to be the
sole or exclusive owner of the litigated lot. A favorable decision therein would of course inure to the
benefit not only of the plaintiff but to his co-owners as well. The instant case, however, presents an
entirely different backdrop as petitioner vigorously asserted absolute and sole ownership of the
questioned lot. In his complaint, petitioner made the following allegations, to wit:

3. The plaintiff was the only son (illegitimate) and sole heir of the late DOMINADOR ADLAWAN who died
intestate on 28 May 1987 without any other descendant nor ascendant x x x.

xxxx

5. Being the only child/descendant and, therefore, sole heir of the deceased Dominador Adlawan, the
plaintiff became the absolute owner, and automatically took POSSESSION, of the aforementioned
house and lot x x x. (Emphasis added)37

Clearly, the said cases find no application here because petitioners action operates as a complete
repudiation of the existence of co-ownership and not in representation or recognition thereof. Dismissal of
the complaint is therefore proper. As noted by Former Supreme Court Associate Justice Edgrado L.
Paras "[i]t is understood, of course, that the action [under Article 487 of the Civil Code] is being instituted
for all. Hence, if the co-owner expressly states that he is bringing the case only for himself, the action
should not be allowed to prosper."38

Indeed, respondents not less than four decade actual physical possession of the questioned ancestral
house and lot deserves to be respected especially so that petitioner failed to show that he has the
requisite personality and authority as co-owner to file the instant case. Justice dictates that respondents
who are now in the twilight years of their life be granted possession of their ancestral property where their
parents and siblings lived during their lifetime, and where they, will probably spend the remaining days of
their life.

WHEREFORE, the petition is DENIED. The September 23, 2003 Decision of the Court of Appeals in CA-
G.R. SP No. 74921 which reinstated the February 12, 2002 Judgment of the Municipal Trial Court of
Minglanilla, Metro Cebu, dismissing petitioners complaint in Civil Case No. 392, and its January 8, 2004
Resolution, are AFFIRMED.

SO ORDERED

G.R. No. 191090 October 13, 2014

EXTRAORDINARY DEVELOPMENT CORPORATION, Petitioner,

vs.
HERMINIA F. SAMSON-BICO and ELY B. FLESTADO, Respondents.

DECISION

PEREZ, J.:

This treats of the petition for review filed by Extraordinary Development Corporation (EDC) assailing the
31 July 2009 Decision and 22 January 2010 Resolution of the Court of Appeals 10th Division in CAG.R.
1 2

CV. No. 91358, which affirmed with modification the Decision of the Regional Trial Court (RTC) of
3

Binangonan, Rizal, Branch 68 in Civil Case No. 03-035, a "Complaint for Annulment of Contract and Tax
Declaration No. OO-BI-030-3512 and Reconveyance of Possession with Damages."

As borne by the records, the facts are as follow:

Apolonio Ballesteros (Apolonio) and Maria Membrebe (Maria) were husband and wife. They begot two (2)
children, namely, Juan M. Ballesteros (Juan), who married Leonarda Tambongco (Leonarda) and Irenea
Ballesteros (Irenea), who married Santiago Samson (Santiago). Juan and Leonarda begot six (6)
children, namely, Leonardo T. Ballesteros (Leonardo), Marcelina T. Ballesteros-Abad (Marcelina), Lydia
T. Ballesteros-De Lara (Lydia), Cresencia T. Ballesteros-Lirio (Cresencia), Lourdes T. Ballesteros-Tan
(Lourdes), and Juan T. Ballesteros, Jr. (Juan Jr.), while Irenea and Santiago begot two (2) children,
namely, Herminia B. Samson-Bico (Herminia) and Merlita Samson Flestado, who married Ely D. Flestado
(Ely).

During his lifetime, Apolonio owned a parcel of land consisting of 29,748 square meters situated at
BarangayPantok, Binangonan, Rizal covered by Tax Declaration No. BI-030-1509. When Apolonio and
Maria died, the property was inherited by Juanand Irenea. When the latter died, the heirs of Juan and
Irenea became co-owners of the property.

On 16 April 2002, the heirs of Juan, without the consent of respondents, the heirs of Irenea executed in
favor of petitioner EDC a Deed of Absolute Sale covering the subject property for 2,974,800.00. Prior to
4

the sale, respondents claimed that they learned that the property had been the subject of a contract to
sell between the heirs of Juan and EDC. On 7 March 2000, respondents wrote to EDC informing it of the
existence of coownership over the subject property. EDC wrote back that it will look into the matter and
5

asked respondents to further establish the basis of their claims. 6

EDC was able to cause the registration of the Deed of Absolute Sale with the Office of the Provincial
Assessor Rizal and transfer the tax declaration over the subject propertyin its name. This prompted
respondents to file the Complaint for Annulment of Contract and Tax Declaration No. 00-BI-030-3512 and
Reconveyance of Possession with Damages. 7

In its Answer, EDC alleged thatit is a buyer in good faith and for value of the subject property because it
was of the honest belief that the heirs of Juan are the only heirs of the late Apolonio. EDC counterclaimed
for damages. 8

On the other hand, the heirs of Juan asserted that respondents were aware of and were parties to the
contract to sell entered into by them and EDC. The heirs of Juan claimed that respondents received their
share in the downpayment made by EDC but they were both unpaid of the balance on the cost of the
land.9

After presentation of respondents testimonial and documentary evidence, the case was called for hearing
on 25 April 2007. The case for the presentation of defendants evidence was reset by the trial court to 25
June 2007 for failure of their respective lawyers to appear without any explanation. On 25 June 2007,
10

the case was once again reset for the same reason. On 13 August 2007, Juan appeared and informed
11

the court that his lawyer is sick while a certain Reggie Angulo appeared before the court and manifested
that EDC has not yet hired a lawyer. The trial court reset the case to 3 October 2007 and required the
parties to secure a new lawyer. The trial court warned the defendants, petitioner here, and the heirs of
Juan that if they fail to do so, their right to present evidence would be waived. On 5 November 2007, the
12

lawyer of the heirs of Juan still failed to appear, while the counsel of the plaintiffs sent a representative to
move for the resetting of the case. Finally, on 5 December 2007, the counsel of the heirs of Juan once
13

again failed to appear so upon motion of respondents counsel, the case was submitted for resolution. 14

On 3 January 2008, the RTC ruled in favor of respondents. The dispositive portion of the Decision reads:

WHEREFORE, judgment is rendered as follows:

1. The Deed of Absolute Sale dated April 16, 2002 covering a property consisting of 29,748
square meters covered by Tax Declaration No. BI-030-1509 is hereby declared null and void to
the extent of one half of the property sold or 14,874 square meters.

2. That the Tax Declaration No. 00-BI-030-3512 in the name of [EDC] is hereby declared null and
void and the Provincial Assessor of Rizal or defendant Municipal Assessor of Binangonan, Rizal
is hereby ordered to cancel the same, and the Tax Declration covering the subject parcel of land
be reinstated in the name of the heirs of Apolonio Ballesteros and Maria Membrebe.

3. That the [EDC] is hereby ordered to vacate, surrender or reconvey ownership and possession
of the parcel of land subject of the Deed of Absolute Sale to [respondents] or the heirs of
Apolonio Ballesteros or that they be reinstated to the lawful ownership of one-half (1/2) of the
property sold or 14,874 square meters.

4. The defendants are hereby ordered to pay the following damages to the [respondents] jointly
and severally:

a. Moral damages 100,000.00

b. Exemplary damages [P]100,000.00

 c. Attorneys fees [P]100,000.00

5. The defendants are hereby ordered to pay the costs of suit. 15

The trial court found that respondents and the heirs of Juan are coowners of the subject property; that at
the time of sale, the heirs of Juan did not have the right to sell the one half share of the heirs of Irenea;
that the sale did not bind the heirs of Irenea; that there was fraud in the execution of the Deed of Absolute
Salewhen the heirs of Juan failed to disclose to EDC that one half of the property sold is owned by
respondents; and that EDC was not a buyer in good faith because itknew that respondents were
coowners of the subject property because Herminia informed EDC of such fact through a letter dated 9
March 2000.

EDC appealed to the Court of Appeals and assigned the following errors:

I.

THE TRIAL COURT COMMITTEDGRAVE ERROR WHEN IT RENDERED A DECISION HOLDING

APPELLEES THE LAWFUL OWNER OF ONE-HALF OF THE SUBJECT PROPERTY

II.

THE TRIAL COURT COMMITTEDGRAVE ERROR WHEN IT ANNULLED THE 16 APRIL 2002 DEED
OF ABSOLUTE SALE AND INVALIDATED THE TITLE OF THE APPELLANT CORPORATION TO THE
SUBJECT PROPERTY DESPITE THE COMPLETE ABSENCE OF ANY EVIDENCE TO SUPPORT THE
APPELLEES CLAIM OF OWNERSHIP OVER ONE-HALF OF THE SUBJECT PROPERTY.

III.

THE TRIAL COURT COMMITTEDGRAVE ERROR WHEN IT AWARDED MORAL AND EXEMPLARY
DAMAGES AND ATTORNEYS FEES AND LITIGATION EXPENSES IN FAVOR OF THE APPELLEES
DESPITE THE UTTER ABSENCE OF EVIDENCE WHICH CAN PROVE THEY ARE ENTITLED TO THE
SAME.

IV.

THE TRIAL COURT COMMITTED GRAVE ERROR AND VIOLATED THE RIGHT TO DUE PROCESS
OF THE DEFENDANT CORPORATION WHEN IT SUBMITTED THE CASE FOR

RESOLUTION WITHOUT PROVIDING THE APPELLANT THE OPPORTUNITY TO PRESENT

EVIDENCE IN SUPPORT OF ITS CLAIMS AND DEFENSES. 16

The heirs of Juan and respondents failed to file their brief so the Court of Appeals submitted the case for
resolution.

On 31 July 2009, the Court of Appeals partially granted the appeal. The dispositive portion of the Decision
reads:

WHEREFORE, premises considered, appeal is PARTLY GRANTED. The Decision dated 03 January
2008 of the Regional Trial Court of Binangonan, Rizal, Branch 68 in Civil Case No. 03-035 is
AFFIRMEDwith the following MODIFICATIONS:
 1. Defendants-appellants Leonardo T. Ballesteros, Marcelina T. Ballesteros-Abad, Lydia T.
Ballesteros-De Lara, Cresencia T. Ballesteros-Lirio, Lourdes T. Ballesteros-Tan and Juan T.
Ballesteros, Jr. are hereby ORDERED to return to defendant-appellant Extraordinary
Development Corporation the amount of 1,487,400.00 or one-half of the purchase price as
stated in the Deed of Absolute Sale dated 16 April 2002;

2. The Deed of Absolute Sale in favor of the [EDC] is valid only to the extent of one-half of the
subject property or 14,874 square meters, but not as to the other half of 14,874 square meters
which is co-owned by [respondents];

3. The Provincial Assessor of Rizal is hereby ORDEREDto CANCELTax Declaration No. 00-BI-
030-3512 in the name of [EDC] and to ISSUE a new one in the names of co-owners [EDC] (one-
half of the subject property) and [respondents] (the other half); and

4. The award of moral damages, exemplary damages, and attorneys fees in the amount of
100,000.00 each is hereby DELETED.

No pronouncement as to costs. 17

The Court of Appeals ruled that respondents were able to establish their co-ownership over one-half of
the subject property. The appellate court pointed out that the heirs of Juan categorically admitted in their
Answer, as well as during the hearing the existence of co-ownership. The appellate court agreed with the
trial courts finding that the heirs of Juan, as co-owners, could only alienate or convey to EDC their one-
half portion of the subject property which may be allotted to them in the division upon the termination of
the co-ownership. Thus, the sale will affect only their share but not those of the other co-owners who did
not consent to the sale. The appellate court disputed the submissionof EDC that whatever admissions
made by the heirs of Juan regarding the ownership of the subject property is effective only insofar as they
are concerned but such do not bind or affect the defenses it raised. The appellate court declared that the
execution by the heirs of Juan of the Deed of Absolute Sale over the subject property which they do not
exclusively own but is admittedly co-owned bythem together with respondents, was valid only to the
extent of the formers undivided onehalf share thereof, as they had no title or interest to transfer the other
one half portion which pertains to the appellees without the latters consent. EDCs invocation of it being a
buyer in good faith was not considered by the appellate court because the subject property is an
unregistered land and the defense of having purchased the property in good faith may be availed of only
where registered land is involved and the buyer had relied in good faith on the clear title of the registered
owner. The appellate court sustained the trial courts finding that there was no denial of due process as
EDC was given the opportunity to advocate its cause and defend its interest.

However, the appellate court reversed the ruling of the trial court that the Deed of Absolute Sale is null
and void. According to the appellate court, the same is valid with respect to the transfer of the rights of the
co-owners sellers heirs of Juan over the one-half portion or 14,874 square meters of the subject property,
thereby making EDC a co-owner thereof. Consequently, the appellate court ordered the heirs of
Ballesteros to return to EDC the amount of 1,487,400.00 or one-half of the purchase price of
2,974,800.00. The award of moral and exemplary damages,as well as attorneys fees, were deleted for
lack of legal and factual bases.

Aggrieved, EDC filed this present petition, ascribing the following errors to the Court of Appeals:

43.1 The Court of Appeals committed grave error in ruling that the Respondents are entitled to of the
Subject Property despite their utter failure to present evidence which can prove their claim thereto.

43.2 The Court of Appeals gravely erred in failing to recognize that Petitioner is an innocent party to the
instant dispute and is a buyer in good faith and for value.18
Interestingly, it was EDC who pursued this petition and insist that respondents failed to prove co-
ownership presumably to validate in its entirety the Deed of Absolute Sale it entered into with the heirs of
Juan. EDC reiterates its argument that the testimony of Herminia is insufficient to prove that respondents
are entitled to inherit one-half of the subject property from Apolonio. According to EDC, respondents
should have established that Irenea is a legitimate child of Apolonio; that Irenea and Juan are the only
legitimate compulsory heirs of Apolonio; that Apolonio predeceased Irenea and Juan; that Hermina and
Merlita are the legitimate children of Irenea; and that Irenea predeceased Herminia. EDC also maintains
that it is a buyer in good faith and that it was respondents who acted in bad faith, thus it prays for
damages.

We deny the petition.

As borne by the records, respondents were able to convincingly establish their co-ownership over one-
half of the subject property.

Herminia has successfully established her successional rights over the subject property through her clear
testimony and admitted by the opposing counsel, viz:

DIRECT EXAMINATION BY ATTY. ROGELIO SILVESTRE, JR., ON WITNESS HERMINIA BICO

Q: Mrs. Bico, are you the same Herminia Bico, one of the plaintiffs in this case?

A: Yes, sir.

Q: Do you know the defendants Ballesteros in this case?

A: I know them, sir.

Q: Why do you know them?

A: Because they are my relatives, sir.

Q: Why did you say that they are your relatives?

A: [Their] father and my motherare brother and sister, sir.

Q: What is the name of your mother?

A: Irenea Ballesteros, sir.

Q: What is the name of the father of the defendants Ballesteros?

A: Juan Ballesteros, sir.

Q: So, you mean that they are brother and sister, what is the name of the mother of Irenea Ballesteros
and [Juan] Ballesteros?

A: Maria Membrebe, sir.

Q: What about the father of Irenea Ballesteros and Juan Ballesteros?

A: Apolonio Ballesteros, sir.

Q: So, you are saying that Irenea Ballesteros and Juan Ballesteros being brother and sister they are the
children of Maria Membrede and Apolonio Ballesteros?

A: Yes, sir.

Q: Do you have proof that your mother is Irenea?

ATTY. CERVO

I admit the relationship.

ATTY. SILVESTRE

However, Your Honor, the defendant Extra-Ordinary is denying.

COURT

But they are not here.

ATTY. CERVO

As far as I am concerned

COURT

As far as the Ballesteros

ATTY. CERVO

As far as the Ballesteros are concerned they are admitting the relationship.

ATTY. SILVESTRE

But on the next hearing the counsel for the Extra-Ordinary will appear.

COURT

The admission is effective only insofar as the client of Atty. Cervo is concerned.

ATTY. SILVESTRE

That is the reason why I am asking these questions.

COURT

They are not here. So, if they will question it later on they are not here. I think the objection will be too
late. If they do not object right now the objection is waived.

ATTY. SILVESTRE
I went over the record of the case, the complainant and the Answer filed by the defendant now when I
read the Answer filed by defendant Ballesteros, defendant Ballesteros are practically admitting everything
except for a few allegations.

COURT

Are they disputing relationship?

ATTY. SILVESTRE

No, Your Honor.

COURT

So, if it is not disputed in the Answer, it is considered admitted.

ATTY. SILVESTRE

Okay, Your Honor.

Would counsel for the defendantstipulate that the parents, grandparents as well as the father and the
mother are already dead?

ATTY. CERVO

Yes admitted, Your Honor.

COURT

How can you deny that they are already dead?

ATTY. SILVESTRE

We would like to proceed to the markings, Your Honor of the exhibits.

COURT

Proceed.

ATTY. SILVESTRE

There being no objections, we would like to mark the Certificate of Baptism of Irenea Ballesteros, child of
Apolonio Ballesteros and Maria Membrebe as Exhibit "A".

COURT

Mark it.

ATTY. SILVESTRE

The name Apolonio Ballesteros and Maria Membrebebe bracketed and marked as Exhibit "A-1".
COURT

Mark it.

ATTY. SILVESTRE

The Death Certificate of Irenea Samson as Exhibit "B". The name of husband Santiago Samson be
bracketed and marked as Exhibit "B-1". The Certificate of Death of Santiago Samson be marked as
Exhibit "C".

COURT

Mark them.

ATTY. SILVESTRE

The name Herminia Bico followed by the word daughter be marked as our Exhibit "C-1".

COURT

Mark it.

ATTY. SILVESTRE

The certificate of Live Birth ofHerminia Samson be marked as Exhibit "D".

COURT

Mark it.

ATTY. SILVESTRE

The Certificate of Baptism of Merlita Samson as Exhibit "E".

COURT

Mark it.

ATTY. SILVESTRE

The name Santiago Samson and Herminia Ballesteros be bracketed and marked as Exhbit "E-1".

COURT

Mark it.

ATTY. SILVESTRE

Will counsel for defendants Ballesteros stipulate that prior to the death of the sister of the witness Merlita
Samson she married the other co-plaintiff Ely Flestado?
ATTY. CERVO

Yes.

ATTY. SILVESTRE

We would like to mark, Your Honor, the Marriage Contract executed by and between MerlitaSamson and
Ely Flestado as Exhibit "F".

COURT

Mark it.

ATTY. SILVESTRE

The Certificate of Death of Merlita Flestado be marked as Exhbit "G".

COURT

Mark it.

ATTY. SILVESTRE

One of the entries in the Certificate of Death, Herminia Bico followed by the name sister be bracketed and
marked as Exhbit "G-1".

COURT

Mark it.
19

We also took into consideration the admissions made by the heirs of Juan in their Answer to the
Complaint filed by respondents before the trial court. For ready reference, we shall reproduce the
pertinent portion of the Answer and the Complaint:

ANSWER

xxxx

2. The defendants BALLESTEROS admit the allegations in paragraphs 8, 9, 10, 11, 12 and 13 of the
complaint; 20

COMPLAINT

8. [Respondents] together with defendants-Ballesteros and defendant Juan T. Ballesteros, Jr., are co-
owners ofa parcel ofland measuring TWENTYNINE THOUSAND SEVEN HUNDRED FORTY-EIGHT
(29,748) SQUARE METERS situated at Barangay Pantok, Binangonan, Rizal by virtue of succession;

9. [Herminia], defendants Ballesteros and defendant Juan T. Ballesteros are the Heirs of the late Spouses
Apolonio Ballesteros and Maria Membrebe who were the parents of the late Juan M. Ballesteros and the
late Irenea M. Ballesteros-Samson x x x;
10. During her lifetime, Irenea M. Ballesteros married Santiago Samson, now deceased, with whom she
had two (2) children, namely: [Herminia] and Merlita B. Samson x x x;

11. Merlita B. Samson married [respondent] Ely and later died childless and intestate x x x;

12. In his lifetime, Juan M. Ballesteros married Leonarda Tambongco, now deceased, with whom she had
six (6) children, namely: defendants Ballesteros and defendant Juan T. Ballesteros, Jr.; 13. Likewise,
during the lifetime of Apolonio Ballesteros, he was the owner of the parcel of land mentioned in paragraph
8 hereof and the same was declared for taxation purposes under his name x x x; 21

Furthermore, Juan testified during the 12 March 2007 hearing that respondents are co-owners of the
subject property, to wit:

COURT Asan si Ballesteros?

ATTY. CERVO

He is in court, Your Honor.

COURT (to Ballesteros)

Q: Alam mo ba na ang may-ari ng lupa na binenta ninyo ay isa sa may-ari sya?

A: Opo.

Q: So, hindi lang kayo ang may-ari ng lupa? Ang ina nya kasama doon sa may-ari at kalahati lang ang sa
inyo?

A: Hindi pa naparti.

Q: Kahit hindi pa naparte narerecognize ninyo na ang nanay niya ay isa sa may-ari ng lupa kasama ang
tatay mo, hindi ba?

A: Opo.

Q: So, kalahati ang interest ninyo sa lupa, tama?

A: Opo.

Q: Why did you sell all?

A: Hindi pa po bayad lahat, ang hinahabol nila magkabayaran. Kulang pa po ng isang milyon.

Q: Ang tanong saiyo, kalahati ng lupa may karapatan ka, you have a right [to] only to one of the property?

A: Opo.

Q: Bakit sa Deed of Sale ibinenta lahat? Wala silang pirma.

A: Nakalimutan ko. 22
A party may make judicial admissions in (a) the pleadings, (b) during the trial, either by verbal or written
manifestations or stipulations, or (c) in other stages of the judicial proceeding. Sec. 4, Rule 129 of the
23

Revised Rules of Court provides:

Sec. 4. Judicial admissions. Anadmission, verbal or written, made by a party in the course of the
proceedings in the same case, does not require proof. The admission may be contradicted only by
showing that it was made through palpable mistake or that no such admission was made.

The Answer submitted by the heirs ofJuan, as well as the testimony of Juan constitute judicial
admissions. Well-settled is the rule that a judicial admission conclusively binds the party making it. He
cannot thereafter take a position contradictory to, or inconsistent with his pleadings. Acts or facts admitted
do not require proof and cannot be contradicted unless it is shown that the admission was made through
palpable mistake or that no such admission was made. 24

EDC avers that said judicial admission should not bind it because it was an innocent purchaser in good
faith. The Court of Appeals debunked this contention and correctly ruled, as follow:
1w phi 1

In a contract of sale, it is essential that the seller isthe owner of the property he is selling. Under Article
1458 of the Civil Code, the principal obligation of a seller is to transfer the ownership of the property sold.
Also, Article 1459 of the Civil Code provides that the thing must be licit and the vendor must have a right
to transfer the ownership thereof at the time it is delivered. The execution by appellants Ballesteros of the
Deed of Absolute Sale over the subject property which they do not exclusively own but is admittedly co-
owned by them together with the [respondents], was valid only to the extent of the formers undivided
one-half share thereof, as they had no title or interest to transfer the other one-half portion which pertains
to the [respondents] without the latters consent. It is an established principle that no one cangive what
one does not have nemo dat quod non habet. Accordingly, one can sell only what one owns or is
authorized to sell, and the buyer can acquire no more than what the seller can transfer legally. Thus,
since appellant EDCs rights over the subject property originated from sellers-appellants Ballesteros, said
corporation merely stepped into the shoes of its sellers and cannot have a better right than what its
sellers have.Indeed, a spring cannot rise higher than its source. (Emphasis ours) Moreover, EDC was
25

given an ample opportunity to be heard through counsel. The essence of due process is the right to be
heard. Due process is satisfied when the parties are afforded a fair and reasonable opportunity to explain
their respective sides of the controversy. Thus, when the party seeking due process was in fact given
several opportunities to be heard and air his side, but it is by his own fault or choice he squanders these
chances, then his cry for due process must fail. 26

It is apparent that despite numerous resetting of the case for EDC, it failed to appear because of the
absence of its counsel. On 3 October 2007, EDC was required by the court to securea new lawyer for the
next hearing but during the two hearings that followed, no counsel appeared for EDC. It is of no moment
that on some dates the resetting was on motion of the other parties to the case. The fact remains that
EDCs counsel failed to appear on 25 April, 25 June, 13 August, 5 November and 5 December 2007.
Therefore, EDC was not deprived of its day in court and he cannot feign denial of due process.

Having established respondents co-ownership rights over the subject property, we find no error in the
appellate courts ruling sustaining the validity of the Deed of Absolute Sale but only with respect to the
rights of the heirs of Juan over one-half of the property.

Article 493 of the Civil Code recognizes the absolute right of a coowner to freely dispose of his pro
indivisoshare as well as the fruits and other benefits arising from that share, independently of the other
coowners, thus: 27

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

In Spouses Del Campo v. Court of Appeals, we had the occasion to expound the rights of a co-owner
28

vis--vis the vendee, thus:

x x x Would the sale by a co-owner of a physical portion of an undivided property held in common be
valid? x x x

On the first issue, it seems plain to us that the trial court concluded that petitioners could not have
acquired ownership of the subject land which originally formed part of Lot 162, on the ground that their
alleged right springs from a void sale transaction between Salome and Soledad. The mere fact that
Salome purportedly transferred a definite portion of the co-owned lot by metes and bounds to Soledad,
however, does not per serender the sale a nullity. This much is evident under Article 493 of the Civil Code
and pertinent jurisprudence on the matter. More particularly in Lopez vs. Vda. De Cuaycong, et. al. which
we find relevant, the Court, speaking through Mr. Justice Bocobo, held that:

The fact that the agreement in question purported to sell a concrete portion of the hacienda does not
render the sale void, for it is a well-established principle that the binding force of a contract must be
recognized as far asit is legally possible to do so. "Quando res non valet ut ago, valeat quantum valere
potest." (When a thing is of no force as I do it, it shall have as much force as it can have.)

Applying this principle to the instant case, there can be no doubt that the transaction entered into by
Salome and Soledad could be legally recognized in its entirety since the object of the sale did not even
exceed the ideal shares held by the former in the co-ownership. As a matter of fact, the deed of sale
executed between the parties expressly stipulated that the portion of Lot 162 sold to Soledad would be
taken from Salomes 4/16 undivided interest in said lot, which the latter could validly transfer in whole or
in part even without the consent of the other co-owners. Salomes right to sell part of her undivided
interest in the co-owned property is absolute in accordance with the well-settled doctrine that a coowner
has full ownership of his pro-indiviso share and has the right to alienate, assign or mortgage it, and
substitute another person in its enjoyment. Since Salomes clear intention was to sell merely part of her
aliquot share in Lot 162, in our view no valid objection can be made against it and the salecan be given
effect to the full extent.

We are not unaware of the principle that a co-owner cannot rightfully dispose of a particular portion of a
co-owned property prior to partition among all the co-owners. However, this should not signify that the
vendee does not acquire anything atall in case a physically segregated area of the co-owned lot is in fact
sold to him. Since the coowner/vendors undivided interest could properly be the object of the contract of
sale between the parties,what the vendee obtains by virtue of such a sale are the same rights as the
vendor had as co-owner, in an ideal share equivalent to the consideration given under their transaction. In
other words, the vendee steps into the shoes of the vendor as co-owner and acquires a proportionate
abstract share in the property held in common. 29

We are also in full accord with the appellate courts order for the heirs of Juan to return one-half of the
purchase price to EDC. There is unjust enrichment when a person unjustly retains a benefit to the loss of
another, or when a person retains money or property of another against the fundamental principles of
justice, equity and good conscience. Therefore, it is correct for the Court of Appeals to order the heirs of
30

Juan to return the amount of 1,487,400.00, representing one-half of the purchase price to prevent unjust
enrichment at the expense of EDC. Lastly, and likewise correctly, the prayer for moral and exemplary
damages and attorneys fees being unsubstantiated had to be denied.

WHEREFORE, the instant petition is DENIEDand the assailed Decision dated 31 July 2009 and
Resolution dated 22 January 2010 of the Court of Appeals in CA-G.R. CV. No. 91358 is AFFIRMED in
toto.
SO ORDERED.

G.R. No. 108228 February 1, 2001

SPOUSES MANUEL and SALVACION DEL CAMPO, petitioners,

vs.
HON. COURT OF APPEALS and HEIRS OF JOSE REGALADO, SR., respondents.

QUISUMBING, J.:

This is a petition for review on certiorari of a decision of the Court of Appeals which affirmed the judgment
of the Regional Trial Court of Roxas City, Branch 15 in Civil Case No. V-5369, ordering the dismissal of
the action for repartition, resurvey and reconveyance filed by petitioners.

Pure questions of law are raised in this appeal as the following factual antecedents are undisputed:

Salome, Consorcia, Alfredo, Maria, Rosalia, Jose, Quirico and Julita, all surnamed Bornales, were the
original co-owners of Lot 162 of the Cadastral Survey of Pontevedra, Capiz under Original Certificate of
Title No. 18047. As appearing therein, the lot, which consisted of a total area of 27,179 square meters
was divided in aliquot shares among the eight (8) co-owners as follows:

Salome 4/16
Bornales

Consorcia 4/16
Bornales
Alfredo Bornales 2/16

Maria Bornales 2/16

Jose Bornales 1/16

Quirico Bornales 1/16

Rosalia 1/16
Bornales

Julita Bornales 1/16

On July 14, 1940, Salome sold part of her 4/16 share in Lot 162 for P200.00 to Soledad Daynolo. In the
Deed of Absolute Sale signed by Salome and two other co-owners, Consorcia and Alfredo, the portion of
Lot 162 sold to Soledad was described as having more or less the following measurements:

63-1/2 meters from point "9" to "10", 35 meters from point "10" to point "11", 30 meters from point
"11" to a certain point parallel to a line drawn from points "9" to "10"; and then from this "Certain
Point" to point "9" and as shown in the accompanying sketch, and made an integral part of this
deed, to SOLEDAD DAYNOLO, her heirs and assigns.1

Thereafter, Soledad Daynolo immediately took possession of the land described above and built a house
thereon. A few years later, Soledad and her husband, Simplicio Distajo, mortgaged the subject portion of
Lot 162 as security for a P400.00 debt to Jose Regalado, Sr. This transaction was evidenced by a Deed
of Mortgage2 dated May 1, 1947.
On April 14, 1948, three of the eight co-owners of Lot 162, specifically, Salome, Consorcia and Alfredo,
sold 24,993 square meters of said lot to Jose Regalado, Sr.

On May 4, 1951, Simplicio Distajo, heir of Soledad Daynolo who had since died, paid the mortgage debt
and redeemed the mortgaged portion of Lot 162 from Jose Regalado, Sr. The latter, in turn, executed a
Deed of Discharge of Mortgage3 in favor of Soledads heirs, namely: Simplicio Distajo, Rafael Distajo and
Teresita Distajo-Regalado. On same date, the said heirs sold the redeemed portion of Lot 162 for
P1,500.00 to herein petitioners, the spouses Manuel Del Campo and Salvacion Quiachon. 1w phi1.nt

Meanwhile, Jose Regalado, Sr. caused the reconstitution of Original Certificate of Title No. 18047. The
reconstituted OCT No. RO-4541 initially reflected the shares of the original co-owners in Lot 162.
However, title was transferred later to Jose Regalado, Sr. who subdivided the entire property into smaller
lots, each covered by a respective title in his name. One of these small lots is Lot No. 162-C-6 with an
area of 11,732 square meters which was registered on February 24, 1977 under TCT No. 14566.

In 1987, petitioners Manuel and Salvacion del Campo brought this complaint for "repartition, resurvey and
reconveyance" against the heirs of the now deceased Jose Regalado, Sr. Petitioners claimed that they
owned an area of 1,544 square meters located within Lot 162-C-6 which was erroneously included in TCT
No. 14566 in the name of Regalado. Petitioners alleged that they occupied the disputed area as
residential dwelling ever since they purchased the property from the Distajos way back in 1951. They also
declared the land for taxation purposes and paid the corresponding taxes.

On April 1, 1987, summons were served on Regalados widow, Josefina Buenvenida, and two of her
children, Rosemarie and Antonio. Josefina and Rosemarie were declared in default on May 10, 1989
because only Antonio filed an answer to the complaint.

During trial, petitioners presented the Deed of Absolute Sale4 executed between Soledad Daynolo and
Salome Bornales as well as the Deed of Mortgage5 and Deed of Discharge6 signed by Jose Regalado, Sr.
The Deed of Absolute Sale7 showing the purchase by the Del Campos of the property from the Distajos
was likewise given in evidence.

Despite the filing of an answer, Antonio failed to present any evidence to refute the claim of petitioners.
Thus, after considering Antonio to have waived his opportunity to present evidence, the trial court
deemed the case submitted for decision.

On November 20, 1990, the trial court rendered judgment dismissing the complaint. It held that while
Salome could alienate her pro-indiviso share in Lot 162, she could not validly sell an undivided part
thereof by meters and bounds to Soledad, from whom petitioners derived their title. The trial court also
reasoned that petitioners could not have a better right to the property even if they were in physical
possession of the same and declared the property for taxation purposes, because mere possession
cannot defeat the right of the Regalados who had a Torrens title over the land.

On appeal, the Court of Appeals affirmed the trial courts judgment, with no pronouncement as to costs. 8

Petitioners now seek relief from this Court and maintain that:

I.

THE FACT THAT THE SALE OF THE SUBJECT PORTION CONSTITUTES A SALE OF A
CONCRETE OR DEFINITE PORTION OF LAND OWNED IN COMMON DOES NOT
ABSOLUTELY DEPRIVE HEREIN PETITIONERS OF ANY RIGHT OR TITLE THERETO;

II.
 IN ANY EVENT, HEREIN PRIVATE RESPONDENTS ARE ALL ESTOPPED FROM DENYING
THE RIGHT AND TITLE OF HEREIN PETITIONERS.9

In resolving petitioners appeal, we must answer the following questions: Would the sale by a co-owner of
a physical portion of an undivided property held in common be valid? Is respondent estopped from
denying petitioners right and title over the disputed area? Under the facts and circumstances duly
established by the evidence, are petitioners entitled to repartition, resurvey and reconveyance of the
property in question?

On the first issue, it seems plain to us that the trial court concluded that petitioners could not have
acquired ownership of the subject land which originally formed part of Lot 162, on the ground that their
alleged right springs from a void sale transaction between Salome and Soledad. The mere fact that
Salome purportedly transferred a definite portion of the co-owned lot by metes and bounds to Soledad,
however, does not per se render the sale a nullity. This much is evident under Article 493 10 of the Civil
Code and pertinent jurisprudence on the matter. More particularly in Lopez vs. Vda. De Cuaycong, et.
al.11 which we find relevant, the Court, speaking through Mr. Justice Bocobo, held that:

The fact that the agreement in question purported to sell a concrete portion of the
hacienda does not render the sale void, for it is a well-established principle that the binding force
of a contract must be recognized as far as it is legally possible to do so. "Quando res non valet ut
ago, valeat quantum valere potest." (When a thing is of no force as I do it, it shall have as much
force as it can have.)12

Applying this principle to the instant case, there can be no doubt that the transaction entered into by
Salome and Soledad could be legally recognized in its entirety since the object of the sale did not even
exceed the ideal shares held by the former in the co-ownership. As a matter of fact, the deed of sale
executed between the parties expressly stipulated that the portion of Lot 162 sold to Soledad would be
taken from Salomes 4/16 undivided interest in said lot, which the latter could validly transfer in whole or
in part even without the consent of the other co-owners. Salomes right to sell part of her undivided
interest in the co-owned property is absolute in accordance with the well-settled doctrine that a co-owner
has full ownership of his pro-indiviso share and has the right to alienate, assign or mortgage it, and
substitute another person in its enjoyment13 Since Salomes clear intention was to sell merely part of her
aliquot share in Lot 162, in our view no valid objection can be made against it and the sale can be given
effect to the full extent.

We are not unaware of the principle that a co-owner cannot rightfully dispose of a particular portion of a
co-owned property prior to partition among all the co-owners. However, this should not signify that the
vendee does not acquire anything at all in case a physically segregated area of the co-owned lot is in fact
sold to him. Since the co-owner/vendors undivided interest could properly be the object of the contract of
sale between the parties, what the vendee obtains by virtue of such a sale are the same rights as the
vendor had as co-owner, in an ideal share equivalent to the consideration given under their transaction. In
other words, the vendee steps into the shoes of the vendor as co-owner and acquires a proportionate
abstract share in the property held in common.

Resultantly, Soledad became a co-owner of Lot 162 as of the year 1940 when the sale was made in her
favor. It follows that Salome, Consorcia and Alfredo could not have sold the entire Lot 162 to Jose
Regalado, Sr. on April 14, 1948 because at that time, the ideal shares held by the three co-
owners/vendors were equivalent to only 10/16 of the undivided property less the aliquot share previously
sold by Salome to Soledad. Based on the principle that "no one can give what he does not
have,"14 Salome, Consorcia and Alfredo could not legally sell the shares pertaining to Soledad since a co-
owner cannot alienate more than his share in the co-ownership. We have ruled many times that even if a
co-owner sells the whole property as his, the sale will affect only his own share but not those of the other
co-owners who did not consent to the sale. Since a co-owner is entitled to sell his undivided share, a sale
of the entire property by one co-owner will only transfer the rights of said co-owner to the buyer, thereby
making the buyer a co-owner of the property.15
In this case, Regalado merely became a new co-owner of Lot 162 to the extent of the shares which
Salome, Consorcia and Alfredo could validly convey. Soledad retained her rights as co-owner and could
validly transfer her share to petitioners in 1951. The logical effect on the second disposition is to
substitute petitioners in the rights of Soledad as co-owner of the land. Needless to say, these rights are
preserved notwithstanding the issuance of TCT No. 14566 in Regalados name in 1977.

Be that as it may, we find that the area subject matter of this petition had already been effectively
segregated from the mother lot even before title was issued in favor of Regalado. It must be noted that
26 years had lapsed from the time petitioners bought and took possession of the property in 1951 until
Regalado procured the issuance of TCT No. 14566. Additionally, the intervening years between the date
of petitioners purchase of the property and 1987 when petitioners filed the instant complaint, comprise all
of 36 years. However, at no instance during this time did respondents or Regalado, for that matter,
question petitioners right over the land in dispute. In the case of Vda. De Cabrera vs. Court of
Appeals,16 we had occasion to hold that where the transferees of an undivided portion of the land allowed
a co-owner of the property to occupy a definite portion thereof and had not disturbed the same for a
period too long to be ignored, the possessor is in a better condition or right than said transferees. (Potior
est condition possidentis). Such undisturbed possession had the effect of a partial partition of the co-
owner property which entitles the possessor to the definite portion which he occupies. Conformably,
petitioners are entitled to the disputed land, having enjoyed uninterrupted possession thereof for a total of
49 years up to the present.

The lower courts reliance on the doctrine that mere possession cannot defeat the right of a holder of a
registered Torrens title over property is misplaced, considering that petitioners were deprived of their
dominical rights over the said lot through fraud and with evident bad faith on the part of Regalado. Failure
and intentional omission to disclose the fact of actual physical possession by another person during
registration proceedings constitutes actual fraud. Likewise, it is fraud to knowingly omit or conceal a fact,
upon which benefit is obtained to the prejudice of a third person.17 In this case, we are convinced that
Regalado knew of the fact that he did not have a title to the entire lot and could not, therefore, have
validly registered the same in his name alone because he was aware of petitioners possession of the
subject portion as well as the sale between Salome and Soledad.

That Regalado had notice of the fact that the disputed portion of Lot 162 was under claim of ownership by
petitioners and the latters predecessor is beyond question. Records show that the particular area subject
of this case was mortgaged by Soledad and her husband to Jose Regalado, Sr. as early as May 1, 1947
or one year prior to the alienation of the whole lot in favor of the latter. Regalado never questioned the
ownership of the lot given by Soledad as security for the P400.00 debt and he must have at least known
that Soledad bought the subject portion from Salome since he could not have reasonably accepted the lot
as security for the mortgage debt if such were not the case. By accepting the said portion of Lot 162 as
security for the mortgage obligation, Regalado had in fact recognized Soledads ownership of this definite
portion of Lot 162. Regalado could not have been ignorant of the fact that the disputed portion is being
claimed by Soledad and subsequently, by petitioners, since Regalado even executed a Release of
Mortgage on May 4, 1951, three years after the entire property was supposedly sold to him. It would
certainly be illogical for any mortgagee to accept property as security, purchase the mortgaged property
and, thereafter, claim the very same property as his own while the mortgage was still subsisting.

Consequently, respondents are estopped from asserting that they own the subject land in view of the
Deed of Mortgage and Discharge of Mortgage executed between Regalado and petitioners predecessor-
in-interest. As petitioners correctly contend, respondents are barred from making this assertion under the
equitable principle of estoppel by deed, whereby a party to a deed and his privies are precluded from
asserting as against the other and his privies any right or title in derogation of the deed, or from denying
the truth of any material fact asserted in it.18 A perusal of the documents evidencing the mortgage would
readily reveal that Soledad, as mortgagor, had declared herself absolute owner of the piece of land now
being litigated. This declaration of fact was accepted by Regalado as mortgagee and accordingly, his
heirs cannot now be permitted to deny it.
Although Regalados certificate of title became indefeasible after the lapse of one year from the date of
the decree of registration, the attendance of fraud in its issuance created an implied trust in favor of
petitioners and gave them the right to seek reconveyance of the parcel wrongfully obtained by the former.
An action for reconveyance based on an implied trust ordinarily prescribes in ten years. But when the
right of the true and real owner is recognized, expressly or implicitly such as when he remains
undisturbed in his possession, the said action is imprescriptible, it being in the nature of a suit for quieting
of title.19 Having established by clear and convincing evidence that they are the legal owners of the
litigated portion included in TCT NO. 14566, it is only proper that reconveyance of the property be
ordered in favor of petitioners. The alleged incontrovertibility of Regalados title cannot be successfully
invoked by respondents because certificates of title merely confirm or record title already existing and
cannot be used to protect a usurper from the true owner or be used as a shield for the commission of
fraud.20

WHEREFORE, the petition is GRANTED. The assailed decision of the Court of Appeals in CA-G.R. CV
No. 30438 is REVERSED and SET ASIDE. The parties are directed to cause a SURVEY for exact
determination of their respective portions in Lot 162-C-6. Transfer Certificate of Title No. 14566 is
declared CANCELLED and the Register of Deeds of Capiz is ordered to ISSUE a new title in accordance
with said survey, upon finality of this decision.

Costs against respondents. 1wphi 1.nt

SO ORDERED.