G.R. No. 187633
Upon the death of Irene, her share in tum passed to her
HEIRS OF DELFIN and MARIA TAPPA, Petitioners,
vs.
HEIRS OF JOSE BACUD, HENRY CALABAZARON and VICENTE
MALUPENG, Respondents.
This is a Petition for Review on Certiorari1 under Rule 45 of the Revised Rules
of Court assailing the Decision2dated February 19, 2009 and Resolution3 dated
April 30, 2009 of the Court of Appeals (CA) in CA-G.R. CV No. 90026, which
reversed and set aside the Decision4 dated July 6, 2007 of Branch 5, Regional
Trial Court (RTC) ofTuguegarao City, Cagayan in Civil Case No. 5560 for
Quieting of Title, Recovery of Possession and Damages.
The Facts
On September 9, 1999, petitioners Delfin Tappa (Delfin) 5 and Maria Tappa
(Spouses Tappa) filed a complaint6 for Quieting of Title, Recovery of Possession
and Damages (Complaint) against respondents Jose Bacud (Bacud), 7Henry
Calabazaron (Calabazaron), and Vicente Malupeng (Malupeng). 8 The property
subject of the complaint is a parcel of land identified as Lot No. 3341, Pls-793
with an area of 21,879 square meters, located in Kongcong, Cabbo, Pefiablanca,
Cagayan (Lot No. 3341).9
In their complaint, Spouses Tappa alleged that they are the registered owners of
Lot No. 3341, having been issued an Original Certificate of Title No. P-69103
(OCT No. P-69103) on September 18, 1992, by virtue of Free Patent No.
021519-92-3194. 10 Delfin allegedly inherited Lot No. 3341 from his father,
Lorenzo Tappa (Lorenzo). Spouses Tappa claimed that both Delfin and Lorenzo
were in open, continuous, notorious, exclusive possession of the lot since time
immemorial. 11
In their Answer, 12 respondents Bacud, Calabazaron and Malupeng claimed that
the original owner of Lot No. 3341 was Genaro Tappa (Genaro) who had two
children, Lorenzo and Irene. Upon Genaro's death, the property passed on to
Lorenzo and Irene by operation of law; and they became ipso facto co-owners of
the property. As co-owners, Lorenzo and Irene each owned 10,939 square
meters of the lot as their respective shares. Lorenzo had children namely, Delfin,
Primitiva, and Fermina.
heirs, Demetria, Juanita, Pantaleon and Jose Bacud. 13
Respondents presented before the RTC a joint affidavit dated April 29, 1963
(1963 Affidavit) signed by Delfin, his sisters, Primitiva and Fermina, and their
mother, Modesta Angoluan. 14 The 1963 affidavit stated that Genaro originally
owned Lot No. 3341. It further stated that one-half (Yz) of the property was
owned by Lorenzo; but that the whole property was declared as his, only for
taxation purposes.
Calabazaron claimed that he became the owner of 2,520 square meters of Lot
No. 3341 by virtue of two Deeds of Sale executed in his favor, one dated
October 12, 1970 executed by Demetria, and another dated August 22, 1971
executed by Juanita. 15 After the sale, Calabazaron entered into possession of his
portion and paid the real property taxes. 16 He remains in possession up to this
date. 17
Malupeng, on the other hand, claimed that he became the owner of 210 square
meters of Lot No. 3341 by virtue of a Deed of Sale executed on November 30,
1970 by Pantaleon in his favor. 18 After the sale, Malupeng entered into
possession of his porcion of propeny and paid the real property taxes. 19 He
remains in possession up to this date. 20
Bacud claimed ownership over 1,690 square meters of Lot No. 3341 in his own
right as heir of Irene.21
Respondents started occupying their respective portions after the sale made to
each of them. They continued to occupy them despite several demands to vacate
from Spouses Tappa.22
Spouses Tappa claimed that the 1963 Affidavit was executed through force and
intimidation.23 Bacud and Malupeng denied this allegation.24
The Ruling of the RTC
The RTC issued its Decision,25 the decretal portion of which reads:
1
WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and the
Court hereby orders:
1. Plaintiffs to be the owners of Lot 3341, Pls 793 and unqualifiedly
vests in them the full and untrammeled rights of ownership:
2. All the defendants must, if still in possession of portions of the lot in
issue, convey the same to the plaintiffs;
3. No pronouncement as to costs.
SO ORDERED.26
The R TC ruled that the basic requirement of the law on quieting of title under
Article 447 of the Civil Code was met, thus:
Delfin and Maria's title is clear and unequivocal, and its validity has never
been assailed by the defendants – nor has any evidence been adduced that
successfully overcomes the presumption of validity and legality that the title
of Delfin and Maria enjoys.27 (Emphasis in the original.)
The RTC ruled that there was no document in the hands of respondents as strong
and persuasive as the title in the name of the Spouses Tappa that will support
respondents' claim of ownership and Irene's antecedent ownership. 28The RTC
stated that the 1963 Affidavit contains nothing more than the allegations of the
affiants and does not, by itself, constitute proof of ownership of land, especially
as against documents such as titles.29
Respondents appealed to the CA, raising the following arguments:
First, respondents alleged that Spouses Tappa fraudulently applied for, and were
issued a free patent over Lot No. 3341, and eventually OCT No. P-69103 dated
September 18, 1992.30 They alleged that Spouses Tappa committed fraud
because they were not in possession of the lot since 1963, which possession was
required for an applicant for a free patent under the law. 31
Second, respondents argued that the complaint should be dismissed because both
extinctive and acquisitive prescription have already set in.32 Respondents
claimed that both ordinary acquisitive prescription of 10 years, and
extraordinary acquisitive prescription of 30 years in claiming ownership of
immovable property apply in the case.33They argued that more than 30 years
have already lapsed from the time they entered possession of the subject lot in
1963 up to the filing of the complaint on September 9, 1999. 34 They also pointed
out that Spouses Tappa admitted in their complaint that respondents were in
possession of the lot since 1963. 35
Particularly, Calabazaron argued that the 10-year prescriptive period under
Article 1134 of the Civil Code applies to him by virtue of the two duly executed
Deeds of Sale in his favor. 36 It was never alleged that he had any participation
in the alleged duress, force and intimidation in the execution of the 1963
Affidavit.37 Hence, he is a purchaser in good faith and for value. Calabazaron
entered possession of the lot after the sale to him in 1970, thus, the prescriptive
period of l0 years had long lapsed. 38
Bacud and Malupeng claimed that, even assuming that the execution of the 1963
Affidavit was attended with force and intimidation, the complaint against them
should have been dismissed because the extraordinary acquisitive prescriptive
period of 30 years under Article 1137 of the Civil Code applies to them. 39 They
also argued that the action for quieting of title had already prescribed since the
possession of Bacud and Malupeng started in 1963, which fact was allegedly
admitted by Spouses Tappa in their complaint.40 Thus, Spouses Tappa had only
until 1993 to file a complaint, which they failed to do.
All respondents claimed that from the start of their possession, they (1) have
paid real taxes on the lot, (2) have planted crops, and (3) have continued to
possess the lot in the concept of owners. 41
Third, respondents alleged that Spouses Tappa failed to prove their right over
the subject lot because they cannot rely on the certificate of title issued to them
on September 18, 1992 by virtue of a free patent. 42 They asserted that Spouses
Tappa fraudulently obtained the free patent on Lot No. 3341 by concealing
material facts; specifically the fact of not being in possession of the lot since
1963. 43
The Ruling of the CA
2
The CA set aside the decision of the RTC.44 The relevant dispositive portion of
the CA decision reads:
WHEREFORE, premises considered, the appeal is hereby GRANTED. The
assailed decision dated July 6, 2007 is hereby REVERSED and SET
ASIDE, and another one entered DISMISSING the complaint.
SO ORDERED.45
On the issue of prescription, the CA ruled in favor of respondents and explained
that their possession over Lot No. 3341 already ripened into ownership through
acquisitive prescription.46 The CA noted that Spouses Tappa acknowledged in
their complaint that they have not been in possession of the lot, and that
respondents have been continuously occupying portions of it since 1963. 47 It
explained:
The substantial length of time between 1963, up to the time of filing of the
present complaint on September 9, 1999, which is more than 30 years, should be
considered against [S]pouses Tappa, and in favor of defendants-appellants.
Settled is the rule that an uninterrupted adverse possession of the land for more
than 30 years could ripen into ownership of the land through acquisitive
prescription, which is a mode of acquiring ownership and other real rights over
immovable property. Hence, appellants' possession of the land has ripened into
ownership by virtue of acquisitive prescription.48 (Citation omitted.)
On the merits of the case, the CA ruled that the two indispensable requisites for
an action to quiet title under Articles 476 and 477 of the Civil Code were not
met. 49
The first requisite is absent because Spouses Tappa do not have a legal or an
equitable title to or an interest in the property. The CA explained that the free
patent granted to Spouses Tappa produced no legal effect because Lot No. 3341
was a private land, thus:
As heretofore discussed, the open, continuous, exclusive, and notorious
possession by appellants of the subject parcel of land within the period
prescribed by law has effectively converted it into a private land. Consequently,
the registration in the name of Maria Tappa on September 18, 1992 under OCT
[No.] P-69103, by vi1iue of Free Patent No. 021519-92-3194, produces no legal
effect. Private ownership of land-as when there is a prima facie proof of
ownership like a duly registered possessory information or a clear showing of
open, continuous, exclusive, and notorious possession, by present or previous
occupants-is not affected by the issuance of a free patent over the same land,
becam,e the Public Land [L]aw applies only to lands of the public
domain.50 (Citation omitted.)
The CA further stated that while Spouses Tappa were able to obtain a free patent
over the property, and were able to register it under the Torrens system, they
have not become its owners. The CA said that "[r]egistration has never been a
mode of acquiring ownership over immovable prope1ty---it does not create title
nor vest one but it simply confirms a title already vested, rendering it forever
indefeasible."51
The second requisite that the deed, claim, encumbrance or proceeding claimed to
be casting cloud on the title must be shown to be in fact invalid or inoperative
despite its prima facie appearance of validity is likewise unavailing. The CA
ruled that no other evidence (aside from Delfin's own testimony) was presented
to prove the allegation of fraud and intimidation, making the testimony self-
serving.52 The CA further noted that Delfin's own sister, Fermina, one of the
signatories of the 1963 Affidavit, belied his testimony. Fermina testified that
they went to the house of one Atty. Carag to sign the affidavit and they did so,
on their own. 53
Spouses Tappa filed a Motion for Reconsideration,54 which the CA denied.55
Hence, spouses Tappa filed a petition for review on certiorari before this court,
raising the following issues:
I. Whether the CA erred in dismissing Spouses Tappa's complaint for
quieting of title against respondents;56
II. Whether the CA erred in not finding that Spouses Tappa's certificate
of title cannot be collaterally attacked in this case;57 and
III. Whether the CA erred in finding that respondents have acquired the
property through acquisitive prescription. 58
3
 The Ruling of the Court
We affirm the decision of the CA.
The action for quieting of title
should not prosper.
The action filed by Spouses Tappa was one for quieting of title and recovery of
possession. In Baricuatro, Jr. v. Court of Appeals, 59 an action for quieting of
title is essentially a common law remedy grounded on equity, to wit:
x x x Originating in equity jurisprudence, its purpose is to secure"... an
adjudication that a claim of title to or an interest in property, adverse to that of
the complainant, is invalid, so that the complainant and those claiming under
him may be forever afterward free from any danger of hostile claim." In an
action for quieting of title, the competent court is tasked to determine the
respective rights of the complainant and other claimants, "... not only to
place things in their proper place, to make the one who has no rights to said
immovable respect and not disturb the other, but also for the benefit of both, so
that he who has the right would see every cloud of doubt over the property
dissipated, and he could afterwards without fear introduce the improvements he
may desire, to use, and even to abuse the property as he deems best. x x x.
"60 (Emphasis in the original.)
In our jurisdiction, the remedy is governed by Article 476 and 477 of the Civil
Code, which state:
Art. 476. Whenever there is a cloud on title to real property or any interest
therein, by reason of any instrument, record, claim, encumbrance or proceeding
which is apparently valid or effective but is in truth and in fact invalid,
ineffective, voidable, or unenforceable, and may be prejudicial to said title, an
action may be brought to remove such cloud or to quiet the title.
An action may also be brought to prevent a cloud from being cast upon title to
real property or any interest therein.
Art. 477. The plaintiff must have legal or equitable title to, or interest in the real
property which is the subject-matter of the action. He need not be in possession
of said property.
From the foregoing provisions, we reiterate the rule that for an action to quiet
title to prosper, two indispensable requisites must concur, namely: (1) the
plaintiff or complainant has a legal or an equitable title to or interest in the real
property subject of the action; and (2) the deed, claim, encumbrance or
proceeding claimed to be casting cloud on his title must be shown to be in fact
invalid or inoperative despite its prima facie appearance of validity or legal
efficacy.61
Spouses Tappa failed to meet these two requisites.
First, Spouses Tappa's claim of iegal title over Lot No. 3341 by virtue of the free
patent and the certificate of title, OCT No. P-69103 issued in their name cannot
stand. The certificate of title indjcates that it was issued by virtue of Patent No.
021519-92-3194. We agree with the CA that at the time of the application for
free patent, Lot No. 3341 had already become private land by virtue of the open,
continuous, exclusive, and notorious possession by respondents. Hence, Lot No.
3341 had been removed from the coverage of the Public Land Act,62 which
governs public patent applications.
The settled rule is that a free patent issued over a private land is null and void,
and produces no legal effects. whatsoever.1awp++i1 Private ownership of land-
as when there is a prima facie proof of ownership like a duly registered
possessory information or a clear showing of open, continuous, exclusive, and
notorious possession, by present or previous occupants-is not affected by the
issuance of a free patent over the same land, because the Public Land Law
applies only to lands of the public domain. The Director of Lands has no
authority to grant free patent to lands that have ceased to be public in character
and have passed to private ownership.63
In Magistrado v. Esplana, 64 we cancelled the titles issued pursuant to a free
patent after finding that the lots involved were privately owned since time
immemorial. A free patent that purports to convey land to which the
Government did not have any title at the time of its issuance does not vest any
title in the patentee as against the true owner. 65
4
In this case, the parties were able to show that Lot No. 3341 was occupied by,
and has been in possession of the Tappa family, even before the 1963 Affidavit
was executed. After the execution of the 1963 Affidavit, respondents occupied
their respective portions of the property. Delfin testified that before his father,
Lorenzo, died in 1961, Lorenzo had been occupying the lot since before the war,
and that Delfin was born there in 1934.66
Records show that Lorenzo declared Lot No. 3341 for taxation purposes as early
as 1948, and paid the real property taxes (evidenced by real property tax
payment receipts in the name of Lorenzo from 1952 until his death in
1961).67 Spouses Tappa were likewise shown to pay the real property taxes from
1961 to 2000.68 Similarly, respondents also declared their respective portions of
Lot No. 3341 for taxation in their names in 1994, and paid real property taxes on
those portions from 1967 to 2004.69 Although tax declarations or realty tax
payment of property are not conclusive evidence of ownership, they are
good indicia of possession in the concept of owner, for no one in his right mind
would be paying taxes for a property that is not in his actual or constructive
possession. They constitute at least proof that the holder has a claim of title over
the property. 70
Spouses Tappa also admitted in their complaint that sometime in 1963, Bacud
and Malupeng started occupying portions of Lot No. 3341 and planted crops on
the property, while Calabazaron did the same on another portion of the lot in the
1970's.71 The complaint stated further that since 1963. the respondents
"continuously occupied portion of the subject land." 72
In view of the foregoing circumstances that show open, continuous, exclusive
and notorious possession and occupation of Lot No. 3341, the property had been
segregated from the public domain. 73 At the time the patent and the certificate
of title were issued in 1992, Spouses Tappa and their predecessors-in-interest
were already in possession, at least to the half of the lot, since 1934; and
respondents were also in possession of the other half since 1963. Therefore, the
free patent issued covers a land already segregated from the public domain.
In Heirs of Simplicio Santiago v. Heirs of Mariano E. Santiago, 74 we ruled, thus:
Considering the open, continuous, exclusive and notorious possession and
occupation of the land by respondents and their predecessors in interests, they
are deemed to have acquired, by operation of law, a right to a government grant
without the necessity of a certificate of title being issued. The land was thus
segregated from the public domain and the director of lands had no authority to
issue a patent. Hence, the free patent covering Lot 2344, a private land, and the
certificate of title issued pursuant thereto, are void.75
Records also show that Spouses Tappa were aware of respondents' possession of
the disputed portions of Lot No. 3341. They even admitted such possession
(since 1963) by respondents in their complaint filed in 1999. Despite this,
Spouses Tappa were able to obtain a free patent of the whole property even if
they were not in possession of some of its portions. Therefore, Free Patent No.
021519-92-3194 and OCT No. P-69103 are void not only because it covers a
private land, but also because they fraudulently included 76 respondents' portion
of the property. In Avila v. Tapucar, 77 we held that "[i]f a person obtains a title
under the Torrens system, which includes by mistake or oversight land which
can no longer be registered under the system, he does not, by virtue of the said
certificate alone, become the owner of the lands illegally included." 78
In an action to quiet title, legal title denotes registered ownership, while
equitable title means beneficial ownership. 79As discussed, the free patent and
the certificate of title issued to Spouses Tappa could not be the source of their
legal title.
The second requisite for an action to quiet title is likewise wanting. We find that
although an instrument (the 1963 Affidavit) exists, and which allegedly casts
cloud on Spouses Tappa's title, it was not shown to be in fact invalid or
ineffective against Spouses Tappa's rights to the property.
A cloud on a title exists when (1) there is an instrument (deed, or contract) or
record or claim or encumbrance or proceeding; (2) which is apparently valid or
effective; (3) but is, in truth and in fact, invalid, ineffective, voidable, or
unenforceable or extinguished (or terminated) or barred by extinctive
prescription; and (4) and may be prejudicial to the title. 80
The 1963 Affidavit it is no doubt an instrument, which appears to be valid. It is
dated and appears to be executed and signed by Delfin, his mother, and sisters. It
is also notarized by a public notary. It states that Genaro originally owns the
land described, and that one-half (l/2) of which is actually owned by Irene as a
co-heir. This is contrary to the claim of
5
Spouses Tappa that the property was solely Lorenzo's. Respondents' argue that
this affidavit evidences the title of their predecessor-in-interest over Lot No.
3341 and effectively, theirs.81
The 1963 Affidavit however, was not proven to be, in fact, invalid, ineffective,
voidable, or unenforceable, or extinguished (or terminated) or barred by
extinctive prescription. The CA correctly found that Spouses Tappa's claim of
force and intimidation in the execution of the 1963 Affidavit was
"unsubstantiated."82 The CA pointed out that, "[a]side from the testimony of
Delfin Tappa, no other evidence was presented to prove the claim of force and
intimidation, hence, it is at most, self-serving."53 Also, the 1963 Affidavit was
duly notarized and, as such, is considered a public document, and enjoys the
presumption of validity as to its authenticity and due execution.
Thus, we affirm the ruling of the CA that the requisites for an action to quiet title
are wanting in this case.84
There is no collateral attack
on the Certificate of Title.
Spouses Tappa argue that respondents collaterally attacked the certificate of title
of Lot No. 3441 when they raised the issue of its validity. Spouses Tappa used
the same argument against the CA when it declared the certificate of title to be
without legal effect. 85
Spouses Tappa's argument is without merit. The certificate of title was not
collaterally attacked. Section 48 of PD 1529,86 provides that "[a] certificate of
title shall not be subject to collateral attack. It cannot be altered, modified, or
canceled except in a direct proceeding in accordance with law." This rule is not
applicable in this case.
We reiterate our ruling in Lee Tek Sheng v. Court of Appeals,87 where we stated
that, "[ w ]hat cannot be collaterally attacked is the certificate of title and not the
title. The certificate referred to is that document issued by the Register of Deeds
x x x. By title, the law refers to ownership which is represented by that
document."88 Ownership is different from a certificate of title, the latter being
only the best proof of ownership of a piece of land. 89 Title as a concept of
ownership should not be confused with the certificate of title as evidence of such
ownership although both are interchangeably used.90
In Vda. de Figuracion v. Figuracion-Gerilla, 91 citing Lacbayan v. Samay,
Jr., 92 we reaffirm this ruling, and stated that:
Mere issuance of a certificate of title in the name of any person does not
foreclose the possibility that the real property may be under co-ownership with
persons not named in the certificate, or that the registrant may only be a trustee,
or that other parties may have acquired interest over the property subsequent to
the issuance of the certificate of title. Stated differently, placing a parcel of land
under the mantle of the Torrens system does not mean that ownership thereof
can no longer be disputed. The certificate cannot always be considered as
conclusive evidence of ownership.93
In this case, what respondents dispute, as raised in their Answer, is Spouses
Tappa's claim of sole ownership over Lot No. 3341. As affirmative defense,
respondents claimed that Spouses Tappa were owners of only one-half (1/2) of
the lot since it was originally owned by Genaro, the father of Lorenzo and
Irene. 94 Respondents claim that Lorenzo and Irene became ipso facto co-owners
of the lot. 95 Thus, respondents claim that, by virtue of a valid transfer from
Irene's heirs, they now have ownership and title over portions of Lot No. 3341,
and that they have been in continuous, exclusive, and uninterrupted possession
of their occupied portions.96 Malupeng and Calabazaron claim ownership and
title over their respective portions by virtue of a valid sale. Bacud claims
ownership and title by virtue of succession. Therefore, it is the ownership and
title of Spouses Tappa which respondents ultimately attack. OCT No. P-69103
only serves as the document representing Spouses Tappas' title.
Respondents cannot likewise argue that the certificate of title of Spouses Tappa
is indefeasible.97 We have already ruled that the one-year prescriptive period
does not apply when the person seeking annulment of title or reconveyance is in
possession of the property.98 This is because the action partakes of a suit to quiet
title, which is imprescriptible.99 In this case, respondents have been proved to be
in possession of the disputed portions of Lot No. 3341. Thus, their claim against
Spouses Tappa cannot be barred by the one-year prescriptive period.
WHEREFORE, in view of the foregoing, the petition is DENIED and the
Decision of the Court of Appeals in CA-G.R. CV No. 90026 is AFFIRMED.
SO ORDERED.
6
G.R. No. 184746 August 8, 2012
SPOUSES CRISPIN GALANG and CARlOAD GALANG, Petitioners,
vs.
SPOUSES CONRADO S. REYES AND FE DE KASTRO REYES (As
substituted by their legal heir: Hermenigildo K. Reyes), Respondents.
REYES,*
This petition for review on certiorari under Rule 45 seeks to reverse and set
aside the April 9, 2008 Decision1 of the Court of Appeals (CA) and its October 6,
2008 Resolution,2 in CA-G.R. CV. No. 85660.
The Facts
On September 4, 1997, spouses Conrado S. Reyes and Fe de Kastro Reyes (the
Reyeses) filed a case for the annulment of Original Certificate of
Title (OCT) No. P-928 against spouses Crispin and Caridad Galang (the
Galangs) with the Regional Trial Court, Antipolo, Rizal (RTC),docketed as Civil
Case No. 97-4560.
In their Complaint,3 the Reyeses alleged that they owned two properties: (1) a
subdivision project known as Ponderosa Heights Subdivision (Ponderosa), and
(2) an adjoining property covered by Transfer Certificate of Title (TCT) No.
185252, with an area of 1,201 sq.m.;4 that the properties were separated by the
Marigman Creek, which dried up sometime in 1980 when it changed its course
and passed through Ponderosa; that the Galangs, by employing manipulation and
fraud, were able to obtain a certificate of title over the dried up creek bed from
the Department of Environment and Natural Resources (DENR), through its
Provincial Office (PENRO); that, specifically, the property was denominated as
Lot 5735, Cad 29 Ext., Case-1, with an area of 1,573 sq.m. covered by OCT No.
P-928; that they discovered the existence of the certificate of title sometime in
March 1997 when their caretaker, Federico Enteroso (Enteroso), informed them
that the subject property had been fraudulently titled in the names of the
Galangs; that in 1984, prior to such discovery, Enteroso applied for the titling of
the property, as he had been occupying it since 1968 and had built his house on
it; that, later, Enteroso requested them to continue the application because of
financial constraints on his part;5 that they continued the application, but later
learned that the application papers were lost in the Assessor’s Office; 6 and that
as the owners of the land where the new course of water passed, they are entitled
to the ownership of the property to compensate them for the loss of the land
being occupied by the new creek.
The Galangs in their Answer7 denied that the land subject of the complaint was
part of a creek and countered that OCT No. P-928 was issued to them after they
had complied with the free patent requirements of the DENR, through the
PENRO; that they and their predecessor-in-interest had been in possession,
occupation, cultivation, and ownership of the land for quite some time; that the
property described under TCT No. 185252 belonged to Apolonio Galang, their
predecessor-in-interest, under OCT No. 3991; that the property was transferred
in the names of the Reyeses through falsified document;8 that assuming ex gratia
argumenti that the creek had indeed changed its course and passed through
Ponderosa, the Reyeses had already claimed for themselves the portion of the
dried creek which adjoined and co-existed with their property; that Enteroso was
able to occupy a portion of their land by means of force, coercion, machinations,
and stealth in 1981; that such unlawful entry was then the subject of an Accion
Publiciana before the RTC of Antipolo City (Branch 72); and that at the time of
the filing of the Complaint, the matter was still subject of an appeal before the
CA, under CA-G.R. CV No. 53509.
The RTC Decision
In its Decision,9 dated July 16, 2004, the RTC dismissed the complaint for lack
of cause of action and for being an erroneous remedy. The RTC stated that a title
issued upon a patent may be annulled only on grounds of actual and intrinsic
fraud, which much consist of an intentional omission of fact required by law to
be stated in the application or willful statement of a claim against the truth. In
the case before the trial court, the Reyeses presented no evidence of fraud
despite their allegations that the Galangs were not in possession of the property
and that it was part of a dried creek. There being no evidence, these contentions
remained allegations and could not defeat the title of the Galangs. The RTC
wrote:
A title issued upon patent may be annulled only on ground of actual fraud.
Such fraud must consist [of] an intentional omission of fact required by law to
be stated in the application or willful statement of a claim against the truth. It
must show some specific facts intended to deceive and deprive another of his
7
right. The fraud must be actual and intrinsic, not merely constructive or intrinsic;
the evidence thereof must be clear, convincing and more than merely
preponderant, because the proceedings which are being assailed as having been
fraudulent are judicial proceedings, which by law, are presumed to have been
fair and regular. (Libudan v. Palma Gil 45 SCRA 17)
However, aside from allegations that defendant Galang is not in possession of
the property and that the property was part of a dried creek, no other sufficient
evidence of fraud was presented by the plaintiffs. They have, thus, remained
allegations, which cannot defeat the defendants title.10
The RTC added that the land, having been acquired through a homestead patent,
was presumably public land. Therefore, only the State can institute an action for
the annulment of the title covering it.
It further opined that because the Reyeses claimed to have acquired the property
by right of accretion, they should have filed an action for reconveyance,
explaining "[t]hat the remedy of persons whose property had been wrongly or
erroneously registered in another’s name is not to set aside the decree/title, but
an action for reconveyance, or if the property has passed into the hands of an
innocent purchaser for value, an action for damages." 11
The Court of Appeals Decision
In its Decision, dated April 9, 2008, the CA reversed and set aside the RTC
decision and ordered the cancellation of OCT No. P-928 and the reconveyance
of the land to the Reyeses.
The CA found that the Reyeses had proven by preponderance of evidence that
the subject land was a portion of the creek bed that was abandoned through the
natural change in the course of the water, which had now traversed a portion of
Ponderosa. As owners of the land occupied by the new course of the creek, the
Reyeses had become the owners of the abandoned creek bed ipso facto.
Inasmuch as the subject land had become private, a free patent issued over it was
null and void and produced no legal effect whatsoever. A posteriori, the free
patent covering the subject land, a private land, and the certificate of title issued
pursuant thereto, are null and void.12
The Galangs moved for a reconsideration,13 but their motion was denied in a
Resolution dated October 6, 2008.
Hence, this petition.
Issues
The Galangs present, as warranting a review of the questioned CA decision, the
following grounds:
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN NOT
RESOLVING THAT THE OFFICE OF THE SOLICITOR GENERAL, NOT
THE PRIVATE RESPONDENTS, HAS THE SOLE AUTHORITY TO FILE
[CASES FOR] ANNULMENT OF TITLE INVOLVING PUBLIC LAND.
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
HOLDING THAT PRIVATE RESPONDENTS HAVE [A] CAUSE OF
ACTION AGAINST PETITIONERS EVEN WITHOUT EXHAUSTION OF
ADMINISTRATIVE REMED[IES].
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE
OF DISCRETION AMOUNTING TO LACK OF JURISDICTION IN
DEVIATING FROM THE FINDINGS OF FACT OF THE TRIAL COURT
AND INTERPRETING ARTICLE 420 IN RELATION TO ARTICLE 461 OF
THE CIVIL CODE OF THE PHILIPPINES BY SUBSTITUTING ITS OWN
OPINION BASED ON ASSUMPTION OF FACTS.14
A reading of the records discloses that these can be synthesized into two
principal issues, to wit: (1) whether the Reyeses can file the present action for
annulment of a free patent title and reconveyance; and (2) if they can, whether
they were able to prove their cause of action against the Galangs.
The Court’s Ruling
Regarding the first issue, the Galangs state that the property was formerly a
public land, titled in their names by virtue of Free Patent No. 045802-96-2847
8
issued by the DENR. Thus, they posit that the Reyeses do not have the
personality and authority to institute any action for annulment of title because
such authority is vested in the Republic of the Philippines, through the Office of
the Solicitor General.15
In this regard, the Galangs are mistaken. The action filed by the Reyeses seeks
the transfer to their names of the title registered in the names of the Galangs. In
their Complaint, they alleged that: first, they are the owners of the land, being
the owners of the properties through which the Marigman creek passed when it
changed its course; and second, the Galangs illegally dispossessed them by
having the same property registered in their names. It was not an action for
reversion which requires that the State be the one to initiate the action in order
for it to prosper. The distinction between the two actions was elucidated in the
case of Heirs of Kionisala v. Heirs of Dacut,16 where it was written:
An ordinary civil action for declaration of nullity of free patents and
certificates of title is not the same as an action for reversion. The difference
between them lies in the allegations as to the character of ownership of the realty
whose title is sought to be nullified. In an action for reversion, the pertinent
allegations in the complaint would admit State ownership of the disputed
land. Hence in Gabila v. Barriga where the plaintiff in his complaint admits that
he has no right to demand the cancellation or amendment of the defendant’s title
because even if the title were cancelled or amended the ownership of the land
embraced therein or of the portion affected by the amendment would revert to
the public domain, we ruled that the action was for reversion and that the only
person or entity entitled to relief would be the Director of Lands.
On the other hand, a cause of action for declaration of nullity of free patent
and certificate of title would require allegations of the plaintiff’s ownership
of the contested lot prior to the issuance of such free patent and certificate
of title as well as the defendant’s fraud or mistake; as the case may be, in
successfully obtaining these documents of title over the parcel of land
claimed by plaintiff. In such a case, the nullity arises strictly not from the fraud
or deceit but from the fact that the land is beyond the jurisdiction of the Bureau
of Lands to bestow and whatever patent or certificate of title obtained therefor is
consequently void ab initio. The real party in interest is not the State but the
plaintiff who alleges a pre-existing right of ownership over the parcel of
land in question even before the grant of title to the defendant. In Heirs of
Marciano Nagano v. Court of Appeals we ruled –
x x x x from the allegations in the complaint x x x private respondents claim
ownership of the 2,250 square meter portion for having possessed it in the
concept of an owner, openly, peacefully, publicly, continuously and adversely
since 1920. This claim is an assertion that the lot is private land x x x x
Consequently, merely on the basis of the allegations in the complaint, the lot in
question is apparently beyond the jurisdiction of the Director of the Bureau of
Lands and could not be the subject of a Free Patent. Hence, the dismissal of
private respondents’ complaint was premature and trial on the merits should
have been conducted to thresh out evidentiary matters. It would have been
entirely different if the action were clearly for reversion, in which case, it would
have to be instituted by the Solicitor General pursuant to Section 101 of C.A.
No. 141 x x x x
It is obvious that private respondents allege in their complaint all the facts
necessary to seek the nullification of the free patents as well as the certificates of
title covering Lot 1015 and Lot 1017. Clearly, they are the real parties in interest
in light of their allegations that they have always been the owners and possessors
of the two (2) parcels of land even prior to the issuance of the documents of title
in petitioners’ favor, hence the latter could only have committed fraud in
securing them –
x x x x That plaintiffs are absolute and exclusive owners and in actual
possession and cultivation of two parcels of agricultural lands herein particularly
described as follows [technical description of Lot 1017 and Lot 1015 x x x x 3.
That plaintiffs became absolute and exclusive owners of the abovesaid parcels of
land by virtue of inheritance from their late father, Honorio Dacut, who in turn
acquired the same from a certain Blasito Yacapin and from then on was in
possession thereof exclusively, adversely and in the concept of owner for more
than thirty (30) years x x x x 4. That recently, plaintiff discovered that
defendants, without the knowledge and consent of the former, fraudulently
applied for patent the said parcels of land and as a result thereof certificates of
titles had been issued to them as evidenced by certificate of title No. P-19819 in
the name of the Hrs. of Ambrocio Kionisala, and No. P- 20229 in the name of
Isabel Kionisala x x x x 5. That the patents issued to defendants are null and
void, the same having been issued fraudulently, defendants not having been
and/or in actual possession of the litigated properties and the statement they may
have made in their application are false and without basis in fact, and, the
Department of Environment and Natural Resources not having any jurisdiction
on the properties the same not being anymore public but already private property
xxxx
9
It is not essential for private respondents to specifically state in the complaint the
actual date when they became owners and possessors of Lot 1015 and Lot 1017.
The allegations to the effect that they were so preceding the issuance of the free
patents and the certificates of title, i.e., "the Department of Environment and
Natural Resources not having any jurisdiction on the properties the same not
being anymore public but already private property," are unquestionably adequate
as a matter of pleading to oust the State of jurisdiction to grant the lots in
question to petitioners. If at all, the oversight in not alleging the actual date
when private respondents’ ownership thereof accrued reflects a mere deficiency
in details which does not amount to a failure to state a cause of action. The
remedy for such deficiency would not be a motion to dismiss but a motion for
bill of particulars so as to enable the filing of appropriate responsive pleadings.
With respect to the purported cause of action for reconveyance, it is settled that
in this kind of action the free patent and the certificate of title are respected as
incontrovertible. What is sought instead is the transfer of the property, in
this case the title thereof, which has been wrongfully or erroneously
registered in the defendant’s name. All that must be alleged in the
complaint are two (2) facts which admitting them to be true would entitle
the plaintiff to recover title to the disputed land, namely, (1) that the
plaintiff was the owner of the land and, (2) that the defendant had illegally
dispossessed him of the same.
We rule that private respondents have sufficiently pleaded (in addition to the
cause of action for declaration of free patents and certificates of title) an action
for reconveyance, more specifically, one which is based on implied trust. An
implied trust arises where the defendant (or in this case petitioners) allegedly
acquires the disputed property through mistake or fraud so that he (or they)
would be bound to hold and reconvey the property for the benefit of the person
who is truly entitled to it. In the complaint, private respondents clearly assert
that they have long been the absolute and exclusive owners and in actual
possession and cultivation of Lot 1015 and Lot 1017 and that they were
fraudulently deprived of ownership thereof when petitioners obtained free
patents and certificates of title in their names. These allegations certainly
measure up to the requisite statement of facts to constitute an action for
reconveyance.17 [Emphases supplied]
In this case, the complaint instituted by the Reyeses before the RTC was for the
annulment of the title issued to the Galangs, and not for reversion. Thus, the real
party in interest here is not the State but the Reyeses who claim a right of
ownership over the property in question even before the issuance of a title in
favor of the Galangs. Although the Reyeses have the right to file an action for
reconveyance, they have failed to prove their case. Thus, on the second issue,
the Court agrees with the RTC that the Reyeses failed to adduce substantial
evidence to establish their allegation that the Galangs had fraudulently registered
the subject property in their names.
The CA reversed the RTC decision giving the reason that the property was the
former bed of Marigman Creek, which changed its course and passed through
their Ponderosa property, thus, ownership of the subject property was
automatically vested in them.
The law in this regard is covered by Article 461 of the Civil Code, which
provides:
Art. 461. River beds which are abandoned through the natural change in the
course of the waters ipso facto belong to the owners whose lands are occupied
by the new course in proportion to the area lost. However, the owners of the
lands adjoining the old bed shall have the right to acquire the same by paying the
value thereof, which value shall not exceed the value of the area occupied by the
new bed.
If indeed a property was the former bed of a creek that changed its course and
passed through the property of the claimant, then, pursuant to Article 461, the
ownership of the old bed left to dry by the change of course
was automatically acquired by the claimant.18 Before such a conclusion can be
reached, the fact of natural abandonment of the old course must be shown, that
is, it must be proven that the creek indeed changed its course without artificial or
man-made intervention. Thus, the claimant, in this case the Reyeses, must prove
three key elements by clear and convincing evidence. These are: (1)
the old course of the creek, (2) the new course of the creek, and (3) the change of
course of the creek from the old location to the new location
by natural occurrence.
In this regard, the Reyeses failed to adduce indubitable evidence to prove the old
course, its natural abandonment and the new course. In the face of a Torrens
title issued by the government, which is presumed to have been regularly issued,
the evidence of the Reyeses was clearly wanting. Uncorroborated testimonial
evidence will not suffice to convince the Court to order the reconveyance of the
10
property to them. This failure did not escape the observation of the Office of the Exhibit "A-2," was prepared by a geodetic engineer without conducting an
Solicitor General. Thus, it commented: actual survey on the ground:

In the case at bar, it is not clear whether or not the Marigman Creek dried- COUNSEL FOR DEFENDANTS:
up naturally back in 1980. Neither did private respondents submit any findings
or report from the Bureau of Lands or the DENR Regional Executive Director, I am showing to you Exhibit "A-2" which is a plan surveyed for Fe de Kastro
who has the jurisdiction over the subject lot, regarding the nature of change in Reyes and Jose de Kastro. This plan was prepared by the geodetic engineer
the course of the creek’s waters. Worse, what is even uncertain in the present without conducting actual survey on the ground, is it not?
case is the exact location of the subject matter of dispute. This is evident from
the decision of the Regional Trial Court which failed to specify which portion of
A: I cannot agree to that question.
the land is actually being disputed by the contending parties.
Q: But based on the certification of the geodetic engineer, who prepared this it
xxx appears that this plan was plotted only based on the certification on this plan
marked as Exhibit "A-2", is it not?
Since the propriety of the remedy taken by private respondents in the trial court
and their legal personality to file the aforesaid action depends on whether or not
A: Yes, sir.
the litigated property in the present case still forms part of the public domain, or
had already been converted into a private land, the identification of the actual
portion of the land subject of the controversy becomes necessary and Q: So, based on this certification that the geodetic engineer conducted the survey
indispensable in deciding the issues herein involved. of this plan based on the technical description without conducting actual survey
on the ground?
xxx
A: Yes, sir.20
Notably, private respondents failed to submit during trial any convincing proof
of a similar declaration by the government that a portion of the Marigman Creek At some point, Mr. Reyes admitted that he was not sure that the property even
had already dried-up and that the same is already considered alienable and existed:
disposable agricultural land which they could acquire through acquisitive
prescription. COUNSEL FOR DEFENDANTS:

Indeed, a thorough investigation is very imperative in the light of the conflicting
factual issues as to the character and actual location of the property in dispute.
These factual issues could properly be resolved by the DENR and the Land
Management Bureau, which have the authority to do so and have the duty to
carry out the provisions of the Public Land Act, after both parties have been
fully given the chance to present all their evidence.19 [Emphases supplied]
Moreover, during cross-examination, Conrado S. Reyes admitted that the plan
surveyed for Fe de Castro Reyes and Jose de Castro, marked before the RTC as
The subject matter of this document Exhibit I is that, that property which at
present is titled in the name of Fe de Castro Reyes married to Conrado Reyes,
et.al. is that correct?
A: Yes.
Q: The subject matter of this case now is the adjoining lot of this TCT 185252,
is that correct?

11
A: I do not know.
Q: You mean you do not know the lot subject matter of this case?
A: I do not know whether it really exists.
Q: Just answer the question, you do not know?
21
A: Yes.
The conflicting claims here are (1) the title of the Galangs issued by the DENR,
through the PENRO, and (2) the claim of the Reyeses, based on unsubstantiated
testimony, that the land in question is the former bed of a dried up creek. As
between these two claims, this Court is inclined to decide in favor of the
Galangs who hold a valid and subsisting title to the property which, in the
absence of evidence to the contrary, the Court presumes to have been issued by
the PENRO in the regular performance of its official duty.
The bottom line here is that, fraud and misrepresentation, as grounds for
cancellation of patent and annulment of title, should never be presumed, but
must be proved by clear and convincing evidence, with mere preponderance of
evidence not being adequate. Fraud is a question of fact which must be proved. 22
In this case, the allegations of fraud were never proven. There was no evidence
at all specifically showing actual fraud or misrepresentation. Thus, the Court
cannot sustain the findings of the CA.
WHEREFORE, the petition 1s GRANTED. The April 9, 2008 Decision and
the October 6, 2008 Resolution .of the Court of Appeals, in CA-G.R. CV. No. -
85660, are hereby REVERSED and SET ASIDE. Civil Case No. 97-4560 of
the Regional Trial Court of Anti polo City, Branch 73, is hereby
ordered DISMISSED for lack of merit. SO ORDERED.
G.R. No. 175542 June 5, 2013
GREEN ACRES HOLDINGS, INC., Petitioner,
vs.
VICTORIA P. CABRAL, SPS. ENRIQUE T. MORAGA and VICTORIA
SORIANO, FILCON READY MIXED, INC., DEPARTMENT OF
AGRARIAN REFORM ADJUDICATION BOARD (DARAB), and
REGISTRY OF DEEDS OF BULACAN, MEYCAUA YAN
BRANCH, Respondents.
x-----------------------x
G.R. No. 183205
VICTORIA P. CABRAL, Petitioner,
vs.
PROVINCIAL ADJUDICATOR, JOSEPH NOEL C. LONGBOAN I
OFFICE OF THE AGRARIAN REFORM ADJUDICATOR, GREEN
ACRES HOLDINGS, INC., SPOUSES ENRIQUE T. MORAGA and
VICTORIA SORIANO and FILCON READY MIXED, INC., Respondents.
Before us are two consolidated petitions for review on certiorari under Rule 45
of the 1997 Rules of Civil Procedure, as amended.
In G.R. No. 175542, petitioner Green Acres Holdings, Inc. (hereafter, Green
Acres) assails the November 24, 2006 Decision1 of the Court of Appeals (CA) in
CA-G.R. CV No. 85766 dismissing its appeal from the November 3, 2004
Order2 of the Regional Trial Court (RTC) while in G.R. No. 183205, petitioner
Victoria Cabral seeks to set aside the February 27, 2008 Decision3 and May 29,
2008 Resolution4 of the CA in CA-G.R. SP No. 99651.
The facts are as follows:
Victoria Cabral was the original owner of a parcel of land in Barangay
Pandayan, Meycauayan, Bulacan with an area of 11,432 square meters and
covered by Transfer Certificate of Title (TCT) No. T-73737 (M). The land was
placed under the coverage of Presidential Decree (P.D.) No. 27, and on March
23, 1993, three Emancipation Patents were issued to the spouses Enrique
Moraga and Victoria Soriano (Spouses Moraga) as follows: EP No. 496039 with
an area of 861 square meters; EP No. 496040 with an area of 2,159 square
meters; and EP No. 496041 with an area of 8,941 square meters. The Spouses
Moraga thereafter caused the cancellation of EP No. 496041 and its conversion
to TCT No. 256260 (M).
12
On August 29, 1994, Cabral filed a complaint before the Provincial Agrarian
Reform Adjudicator (PARAD) seeking the cancellation of the Emancipation
Patents issued to the Spouses Moraga on the grounds that these were obtained
through fraud and that the land is not suitable for rice and corn production and
has long been classified as residential, commercial, industrial and
nonagricultural land by the Zoning Administrator of the Housing and Land Use
Regulatory Board. The case was docketed as Reg. Case No. 739-Bul-94.
On December 15, 1995, the PARAD rendered a decision denying the petition for
cancellation of the Emancipation Patents and dismissing the complaint for lack
of merit. Cabral appealed the decision to the Department of Agrarian Reform
Adjudication Board (DARAB).5
While the appeal was pending, the Spouses Moraga subdivided the lot covered
by TCT No. 256260 (M) into three smaller lots, the properties subject of this
case. TCT Nos. T-270125 (M) covering 3,511 square meters, T-270126 (M)
covering 2,715 square meters, and T-270127 (M) covering 2,715 square meters
were thereafter issued in their names on May 29, 1996. On June 19, 1996, the
Spouses Moraga sold the lots to Filcon Ready Mixed Inc. (Filcon for brevity)
and TCT Nos. T-274486 (M),6 T-274487 (M)7 and T-274488 (M)8 were issued
in the name of Filcon on June 24, 1996.
On April 29, 1999, Green Acres purchased9 five lots from Filcon including the
three subject properties covered by TCT Nos. T-274486 (M), T-274487 (M) and
T-274488 (M) in the name of Filcon. Except for an already cancelled annotation
of a real estate mortgage in favor of Philippine Commercial International Bank
(PCI Bank),10 the titles were free from any annotations, liens, notices, claims or
encumbrances.
On April 30, 1999, the titles of Filcon were cancelled by the Register of Deeds
of Meycauayan, Bulacan and new titles were issued in the name of Green Acres
including TCT Nos. T-345660 (M),11 T-345661 (M)12 and T-345662
(M)13 covering the subject properties. Green Acres then constructed a warehouse
building complex on the said lots.
On January 17, 2001, the DARAB resolved Cabral’s appeal and rendered
judgment ordering the cancellation of the titles issued in the names of the
Spouses Moraga and those of Filcon for having been illegally acquired. The
dispositive portion of the DARAB decision reads:
WHEREFORE, premises considered, the decision is hereby REVERSED and
SET ASIDE and a NEW JUDGMENT is rendered disposing as follows:
1. Ordering the cancellation of TCT No. EP-051 (M) (EP No. 496039;
TCT No. EP-052 (M) (EP No. 496040); TCT No. EP-052 (M) (EP No.
496041); TCT No. T-270125 (M); TCT No. T-270126 (M); and TCT
No. T-270127 (M) – all in the names of defendants spouses Moraga;
TCT No. 274486 (M); TCT No. T-[2]74487 (M), and TCT No. T-
274488 (M) – all in the name of FILCO[N] READY MIXED INC;
2. Directing the Register of Deeds of Bulacan to restore TCT No. T-
73737 (M) in the name of plaintiff Victoria P. Cabral;
3. Ordering defendants Moraga and their assign, FILCON READY
MIXED INC., to vacate the premises of the lands in question and turn
over their possession to herein plaintiff; and,
4. All claims and counterclaims of both parties are hereby dismissed for
insufficiency of evidence.
SO ORDERED.14
When Green Acres learned about the DARAB decision, it sent a Letter 15 to
Filcon on March 15, 2001 advising the latter that it learned that the properties it
bought from Filcon were the subject of an adverse decision of the DARAB.
Fearing that its titles and possession might be disturbed by the DARAB
decision, Green Acres reminded Filcon of its warranties under the deed of sale.
In a letter16 dated March 30, 2001, Filcon replied that it was also an innocent
purchaser for value since at the time it purchased the subject property, it had no
knowledge of any legal infirmity in the title of the Spouses Moraga. In fact, it
was able to secure a loan from PCI Bank in the amount of ₱12 million with the
subject property as collateral. Filcon assured Green Acres that it is coordinating
with its predecessor, the Spouses Moraga, to make sure that Green Acres’
interest over the property is protected.
On April 19, 2001, Green Acres filed a Complaint17 for Quieting of Title,
Damages with Application for Preliminary Injunction and Writ of Preliminary
13
Attachment before the RTC of Malolos, Bulacan against Cabral, the Spouses
Moraga, Filcon, the DARAB and the Registry of Deeds of Meycauayan,
Bulacan. The case was docketed as Civil Case No. 279-M-2001. Green Acres
sought to quiet its title and alleged that it is a purchaser in good faith and for
value, claiming that it had no notice or knowledge of any adverse claim, lien, or
encumbrance on the properties. Neither was it a party to the DARAB
proceedings nor did it have notice of the said proceedings where the DARAB
Decision of January 17, 2001 was issued. Green Acres claimed that the DARAB
decision casts a cloud on its titles.
Cabral, in her Answer,18 denied all the material allegations in the complaint and
alleged that Green Acres never acquired valid title to the subject property, much
less, can it claim to be an innocent purchaser for value. She further averred that a
declaratory judgment in a petition to quiet title will effectively subject the
DARAB decision to review.
After Green Acres presented its evidence, Cabral filed a Demurrer to Plaintiff’s
Evidence19 arguing that Green Acres failed to prove that it is a purchaser in good
faith and for value. She maintains that the complaint is not appropriate for
quieting of title since it omitted to assail her titles over the subject property but
instead questioned the proceedings held at the DARAB. She likewise insisted
that the trial court has no jurisdiction over the subject property since the same is
still within the coverage of the Comprehensive Agrarian Reform Law and thus
under the jurisdiction of the DARAB.
In an Order20 dated November 3, 2004, the trial court granted the demurrer and
ordered the case dismissed.
Green Acres’ motion for reconsideration having been denied, Green Acres filed
with the CA an appeal which was docketed as CA-G.R. CV No. 85766.
In the meantime, the DARAB decision became final and executory on April 13,
200521 as no further recourse was sought by the Spouses Moraga from the denial
of their motion for reconsideration on February 24, 2005. 22On July 8, 2005,
Cabral filed with the PARAD a Motion for Issuance of Writ of Execution23 of
the DARAB decision.
On January 25, 2006, the PARAD issued a Resolution denying the Motion for
Issuance of Writ of Execution for lack of merit. It ruled:
Only the decision of the Board as embodied in the dispositive portion of the
decision can be implemented by virtue of a writ of execution. The January 17,
2001 decision merely orders the cancellation of the Emancipation Patent and
Transfer Certificate of Titles issued by the Registry of Deeds of Bulacan in favor
of Sps. MORAGA and FILCON. Hence, if ever a Writ of Execution will be
issued, it will be up to the FILCON which was included in the dispositive
portion of the Decision that has become final and executory. Nothing in the
body of the decision as well as the dispositive portion thereof directs the
cancellation of the title issued in favor of GREEN ACRES. If we subscribe to
the prayer of the movant, we will be in effect amending the aforementioned
decision because we will be inserting something that has not been directed to be
done. x x x
xxxx
Aside from amending the final and executory decision in this case, this Forum
will also be violating the generally accepted principle of due process. It is
already settled that even the administrative arm of the government exercising
quasi-judicial functions are not exempt from observing due process. x x x
xxxx
It is clear as the sun rises from the east that GREEN ACRES was never made a
party in the case at bar. Much less was it mentioned in the decision sought to be
executed itself. GREEN ACRES can not be made to suffer the consequences of
a case where it did not participate.
xxxx
Lastly, to allow movants’ contention will also render the pending case of
quieting of title filed by GREEN ACRES against herein plaintiff movant on
April 18, 2001 before the Regional Trial Court, Third Judicial Region, Branch
84 and docketed as Civil Case 279-M-2001 which was appealed to the Court of
Appeals, moot and academic.
All told, the titles of Sps. MORAGA and FILCON sought to be cancelled in the
decision have already been cancelled. Therefore, there is nothing to be done
anymore, as the relief prayed for has become fait accompli.24
14
Cabral filed a Motion for Recusation25 and a Motion for Reconsideration.26 The
PARAD, however, denied Cabral’s motions on September 11, 2006. 27 Thus, on
November 7, 2006, Cabral filed with the PARAD a Notice of Appeal. 28
In the meantime, the CA, on November 24, 2006, rendered a decision in CA-
G.R. CV No. 85766 dismissing Green Acres’ appeal. Citing the case of Foster-
Gallego v. Spouses Galang,29 the appellate court held that the trial court had no
authority to interfere with the proceedings of a court of equal jurisdiction, much
less to annul the final judgment of a co-equal court. The appellate court further
held that the only issue in an action to quiet title is whether there is a cloud in a
title to real property because of any instrument, record, claim, encumbrance or a
proceeding that has a prima facie appearance of validity and the DARAB
decision does not fall within said enumeration.
On February 27, 2007, the PARAD issued an Order 30 denying due course to
Cabral’s Notice of Appeal and held that the resolution denying the motion for
execution is an interlocutory order against which the remedy is a petition for
certiorari under Rule 65, and not an appeal to the DARAB. The PARAD further
ruled that Cabral’s act of impleading Green Acres as additional defendant only
in the execution stage is highly irregular and that to enforce the decision against
Green Acres would violate the latter’s right to due process.
On June 18, 2007, Cabral filed with the CA a petition for certiorari under Rule
65 seeking to annul the January 25, 2006 and September 11, 2006 Resolutions,
as well as the February 27, 2007 Order of the PARAD.
On February 27, 2008, the CA denied Cabral’s petition. The appellate court
ratiocinated as follows:
An execution can only be issued against a party and not against one who did not
have his day in court x x x. Green Acres was never a party to the case nor it was
(sic) mentioned in the decision sought to be executed, hence, Green Acres
cannot be made to suffer the consequences of a case where it did not participate.
To maintain otherwise would be to ignore the constitutional prohibition against
depriving a person of his property without due process of law x x x.
Moreover, to apply the decision against Green Acres will amount to collateral
attack against its titles because nowhere in the case or decision that it was
considered or passed upon. Under the Property Registration Decree, titles issued
under the Torrens system can only be altered, modified or cancelled in direct
proceeding in accordance with law
x x x.
Even assuming that spouses Moraga and Filcon fraudulently acquired the
disputed lots, still, Green Acres has valid and legitimate titles over the same
since it is a purchaser in good faith and for value when it acquired the properties
from Filcon. A buyer in good faith is one who buys the property of another
without notice that some other person has a right to or interest in such property x
x x.31 (Citations omitted.)
Both Green Acres and Cabral are now before this Court seeking the reversal of
the CA decisions adverse to them.
In G.R. No. 175542, Green Acres contends that the CA erred in:
x x x RULING THAT THE DARAB DECISION IS NOT A SOURCE OF A
CLOUD THAT IS SUSCEPTIBLE TO AN ACTION FOR QUIETING OF
TITLE.
x x x HOLDING THAT THE COURT DOES NOT HAVE AUTHORITY TO
QUIET TITLES TO REAL PROPERTY AND REMOVE A CLOUD
PRODUCED BY A DARAB DECISION.
x x x AFFIRMING THE ORDER OF THE REGIONAL TRIAL COURT
DATED NOVEMBER 3, 2004 THEREBY IMPLIEDLY HOLDING THAT
GREEN ACRES IS NOT A PURCHASER IN GOOD FAITH FOR VALUE;
THUS, ITS TITLE CAN NOT BE QUIETED.32
In G.R. No. 183205, Cabral, on the other hand, argues that the CA erred when it:
x x x FAILED TO CORRECTLY APPLY THE PERTINENT PROVISIONS
OF THE DARAB 2003 RULES OF PROCEDURE, P.D. 1529 AND THE
CIVIL CODE, AMONG OTHERS, AS WELL AS THE APPLICABLE
JURISPRUDENCE.
x x x DISMISSED PETITIONER’S PETITION FOR CERTIORARI.
15
x x x FAILED TO RULE THAT THERE WAS GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF OR ABUSE OF DISCRETION
ON THE PART OF PUBLIC RESPONDENT PROVINCIAL ADJUDICATOR
LONGBOAN.
x x x DECLARED THAT THE DECISION PROMULGATED ON JANUARY
17, 2001 CANNOT BE MADE TO APPLY TO RESPONDENT GREEN
ACRES.
x x x DECLARED THAT (SIC) RESPONDENT GREEN ACRES TO BE AN
"INNOCENT PURCHASER FOR VALUE."33
Simply put, the issues raised in the two petitions are essentially as follows: (1)
Whether the January 17, 2001 DARAB decision may be enforced against Green
Acres; and (2) Whether the said DARAB decision in favor of Cabral constitutes
a cloud on Green Acres’ title over the subject properties.
First Issue: Whether the January 17, 2001 DARAB decision may be
enforced against Green Acres.
Cabral contends that the PARAD committed grave abuse of discretion in not
issuing the writ of execution to enforce the January 17, 2001 DARAB decision
in her favor. She argues that the issuance of a writ of execution is ministerial
under Section 1, Rule XX of the 2003 DARAB Rules of Procedure which
provides that the execution of a final order or decision shall issue as a matter of
course.
Cabral also argues that contrary to the PARAD’s ruling, she is not seeking the
amendment of the final decision sought to be executed. She contends that the
directive to the Register of Deeds to restore TCT No. T-73737 (M) in her name
means that it should be done regardless of who holds title to the property at the
time of execution. In this case, it is Green Acres. She also points out that the
transfer from the Spouses Moraga to Filcon in 1996 and eventually to Green
Acres in 1999 transpired after she filed a case with the DARAB in 1994.
Therefore, under Section 12.2, Rule XX of the DARAB Rules, Green Acres is
considered a successor in interest by title subsequent to the commencement of
the action upon whom the final judgment or order of the DARAB is conclusive.
Cabral also insists that Green Acres cannot be considered an innocent purchaser
for value because the transfers were made to defeat the DARAB ruling.
Green Acres, for its part, submits that the CA did not err in denying Cabral’s
petition for certiorari. Green Acres contends that Cabral, through her motion for
execution, sought the amendment of the DARAB decision and did not move
merely for its execution. Green Acres points out that Cabral’s motion for
execution specifically sought the cancellation of Green Acres’ titles even though
the DARAB decision neither included Green Acres or its titles. Green Acres
points out that if the issuance of a writ of execution that conforms to the decision
may be denied on the ground that it will be inequitable, moreso should it be
denied in the case where the writ of execution prayed for goes beyond the
decision. Hence, even if the issuance of a writ of execution to enforce a final and
executory decision is a ministerial duty, the PARAD may not issue a writ of
execution against Filcon and Green Acres as prayed for by Cabral.
Green Acres also argues that it cannot be bound by the DARAB decision since a
writ of execution of a decision can only be issued against a party to the case and
not against one who did not have his day in court. Moreover, if granted, the
execution sought will constitute a collateral attack against the titles of Green
Acres since nowhere in the DARAB decision sought to be executed were they
mentioned. Green Acres also adds that Cabral misinterpreted Section 12.2 of the
DARAB Rules to mean that a judgment issued in a case is binding upon, and
can be executed, even against those parties not impleaded in the case. Green
Acres submits that Section 12 is a mere reproduction of Section 47, Rule 39 of
the Rules of Court on the principle of res judicata. Thus, the cited DARAB rule
does not operate to bind Green Acres, either presently or in the future, to the
DARAB decision which does not mention Green Acres either in the body or the
dispositive portion. Green Acres likewise argues that impleading it as an
additional defendant in the execution stage aggravates the violation of its right to
due process.
Green Acres further contends that Cabral’s argument that it is not a purchaser in
good faith and for value may not be considered in the resolution of her petition
before this Court as her argument goes into the merits of the case and said
matters were not raised in her motion for execution. But even if the argument
could be considered, Green Acres claims that the merits of the case show that it
is a purchaser in good faith and for value. Green Acres points out that when it
purchased the properties from Filcon, the properties were covered by transfer
certificates of title, not Emancipation Patents, without any indication that the
titles had their origins from the application of any agrarian law. Green Acres
also adds that the occupancy or possession of the properties of both Filcon and
Green Acres were not clandestine as Cabral claims. Neither can it be true, as
16
Cabral claimed, that its acquisition of the titles to the properties was made
through "surreptitious and illegal transfers." Green Acres argues that Cabral
must have known about the alleged illegal subdivision of the property and
issuance of the transfer certificates of titles or Emancipation Patents, or if she
did not know, she is nonetheless deemed to have received constructive notice of
the same because the properties were registered under the Torrens System. Yet,
despite said notice, Cabral, with gross negligence, failed to annotate a notice of
lis pendens on said titles.
We find in favor of Green Acres.
The principle that a person cannot be prejudiced by a ruling rendered in an
action or proceeding in which he was not made a party conforms to the
constitutional guarantee of due process of law.34 In Muñoz v. Yabut, Jr.,35 this
Court ruled:
An action for declaration of nullity of title and recovery of ownership of real
property, or re-conveyance, is a real action but it is an action in personam, for it
binds a particular individual only although it concerns the right to a tangible
thing. Any judgment therein is binding only upon the parties properly
impleaded.
Since they were not impleaded as parties and given the opportunity to participate
in Civil Case No. Q-28580, the final judgment in said case cannot bind BPI
Family and the spouses Chan. The effect of the said judgment cannot be
extended to BPI Family and the spouses Chan by simply issuing an alias writ of
execution against them. No man shall be affected by any proceeding to which he
is a stranger, and strangers to a case are not bound by any judgment rendered by
the court. In the same manner, a writ of execution can be issued only against a
party and not against one who did not have his day in court. Only real parties in
interest in an action are bound by the judgment therein and by writs of execution
issued pursuant thereto.36 (Emphasis supplied.)
It is beyond dispute that Green Acres was not made a party in the DARAB case.
Consequently, the January 17, 2001 DARAB decision cannot bind Green Acres.
Likewise, the binding effect of the DARAB decision cannot be extended to
Green Acres by the mere issuance of a writ of execution against it. No one shall
be affected by any proceeding to which he is a stranger, and strangers to a case
are not bound by any judgment rendered by the court. In the same manner, a writ
of execution can be issued only against a party and not against one who did not
have his day in court. Only real parties in interest in an action are bound by the
judgment therein and by writs of execution and demolition issued pursuant
thereto.37
Moreover, a Torrens title, as a general rule, is irrevocable and indefeasible, and
the duty of the court is to see to it that this title is maintained and respected
unless challenged in a direct proceeding. Section 48 of P.D. No. 1529 provides:
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. (Emphasis supplied.)
In Sps. Sarmiento v. Court of Appeals,38 this Court explained when an action is
a direct attack on a title and when it is collateral:
An action is deemed an attack on a title when the object of the action or
proceeding is to nullify the title, and thus challenge the judgment pursuant to
which the title was decreed. The attack is direct when the object of the action is
to annul or set aside such judgment, or enjoin its enforcement. On the other
hand, the attack is indirect or collateral when, in an action to obtain a different
relief, an attack on the judgment is nevertheless made as an incident thereof. 39
In the instant case, Cabral seeks the execution of a final and executory DARAB
decision that directs the cancellation of the TCTs in the name of the Spouses
Moraga and Filcon. Nowhere in the said decision is Green Acres or its TCTs
mentioned. Nonetheless, in her Motion for Issuance of Writ of Execution,
Cabral alleged that Green Acres, like Filcon, "also never acquired valid title to
the subject land" and "hence, its present TCTs thereto should likewise be
cancelled (together with the respective Emancipation Patents and TCTs of Sps.
Moraga and Filcon Ready Mixed, Inc. mentioned in the DARAB Decision) and
reverted back to her TCT."40 She prayed for the issuance of a writ of execution
against the Spouses Moraga and "their subsequent assigns/successors in interest
Filcon Ready Mixed, Inc. and Green Acres Holdings, Inc." 41 Clearly, seeking
the cancellation of the titles of Green Acres by a mere Motion for Issuance of
Writ of Execution of a decision rendered in a case where said titles were not in
issue constitutes a collateral attack on them which this Court cannot allow.
17
Furthermore, as correctly ruled by the PARAD and upheld by the appellate
court, only the decision of the DARAB as embodied in the dispositive portion of
the decision can be implemented by a writ of execution. As held in Ingles v.
Cantos:42
A writ of execution should conform to the dispositive portion of the decision to
be executed, and the execution is void if it is in excess of and beyond the
original judgment or award, for it is a settled general principle that a writ of
execution must conform strictly with every essential particular of the judgment
promulgated. It may not vary the terms of the judgment it seeks to enforce. Nor
may it go beyond the terms of the judgment sought to be executed. Where the
writ of execution is not in harmony with and exceeds the judgment which gives
it life, the writ has pro tanto no validity.43
A reading of the fallo of the DARAB decision would show that nothing in it
directs the cancellation of the titles issued in favor of Green Acres. To subscribe
to Cabral’s prayer in her motion is tantamount to modifying or amending a
decision that has already attained finality in violation of the doctrine of
immutability of judgment.
It is also worth noting that the fact that the DARAB by final judgment ordered
the cancellation of the titles of the Spouses Moraga and Filcon does not
automatically make the titles of Green Acres null and void. It is settled that a
void title may be the source of a valid title in the hands of an innocent purchaser
for value.44 An innocent purchaser for value is one who, relying on the
certificate of title, bought the property from the registered owner, without notice
that some other person has a right to, or interest in such property and pays a full
and fair price for the same at the time of such purchase or before he has notice of
the claim or interest of some other person in the property. 45 The rationale
therefor was expressed by this Court in the earlier case of Republic v. Court of
Appeals,46 thus:
Where innocent third persons, relying on the correctness of the certificate of title
thus issued, acquire rights over the property the court cannot disregard such
rights and order the total cancellation of the certificate. The effect of such an
outright cancellation would be to impair public confidence in the certificate of
title, for everyone dealing with property registered under the Torrens system
would have to inquire in every instance whether the title has been regularly or
irregularly issued. This is contrary to the evident purpose of the law. Every
person dealing with registered land may safely rely on the correctness of the
certificate of title issued therefor and the law will in no way oblige him to go
behind the certificate to determine the condition of the property. x x x 47
Green Acres is considered an innocent purchaser for value. It relied on the
certificates of title of Filcon, free from any liens and encumbrances. The only
annotation on them was a cancelled real estate mortgage in favor of PCI Bank.
Thus, as held by the CA, Green Acres was under no obligation to investigate
beyond Filcon’s titles as Green Acres had all the reason to believe that said titles
were free from any lien, claim or encumbrance.
We also agree with the CA that Cabral’s allegation that the Spouses Moraga,
Filcon and Green Acres were parties to illegal contracts cannot be given weight
as such goes into the merits of the case and may not be considered in the
execution stage.
If there is anyone to be blamed for Cabral’s failure to recover the subject
properties, it is Cabral herself, who, due to her own negligence, failed to
annotate a notice of lis pendens on the titles of the Spouses Moraga and Filcon
and thus give notice to future transferees. She cannot claim that she was clueless
that the subject properties were being transferred. As Green Acres correctly
pointed out, the transfers to Filcon and eventually to Green Acres were made
through public documents and procedures. Also, considering the significant size
of the properties, occupation of the same cannot be made clandestinely. In fact,
the properties were fenced by concrete walls and Filcon had constructed a batch
plant while Green Acres erected a warehouse and building on it. Had her
adverse claim been annotated on said titles, said notice would have served as a
warning to Green Acres or other purchasers of the properties that any right they
acquire would be subject to the outcome of the litigation before the DARAB.
Having failed to make such annotation, this Court has no choice but to uphold
the titles of Green Acres, an innocent purchaser for value.
Whether the DARAB Decision in favor of Cabral constitutes a cloud
on Green Acres’ title over the subject properties
Green Acres argues that the DARAB decision is among those enumerated in
Article 47648 of the Civil Code as a possible source of a cloud on title to real
property. It contends that there can hardly be any doubt that the DARAB
Decision is an "instrument," or if not, a "record" and reflects a "claim" on the
18
properties, while the proceedings before the DARAB are "proceedings" directed
at the real properties now owned by Green Acres which are "apparently valid or
effective" but "unenforceable" against the titles of Green Acres. It also contends
that the appellate court’s reliance on Foster-Gallego v. Spouses Galang49 is
misplaced since nothing in said case supports the proposition that a decision of a
coordinate court cannot be a source of cloud under Article 476 of the Civil
Code. Green Acres submits that Foster-Gallego is not applicable because the
ruling there was that an action to quiet title is not the proper remedy when to
remove a cloud on a title, a final and executory decision of the court need to be
reviewed or vacated. In the present case, Green Acres does not seek a review or
reversal of the DARAB decision.
Cabral, for her part, insists that the DARAB decision is not among those
enumerated in Article 476 which may cast a cloud on title to real property. As to
the applicability of Foster-Gallego, she argues that assuming that the ruling on
the main issue in said case is not directly germane, the pronouncements therein
on the nature, function, purpose and limitations of a case for quieting of title and
the power of the courts in such proceedings are applicable.
Green Acres’ arguments are meritorious.
Article 476 of the Civil Code provides:
Art. 476. Whenever there is a cloud on title to real property or any interest
therein, by reason of any instrument, record, claim, encumbrance or proceeding
which is apparently valid or effective but is in truth and in fact invalid,
ineffective, voidable, or unenforceable, and may be prejudicial to said title, an
action may be brought to remove such cloud or to quiet the title.
An action may also be brought to prevent a cloud from being cast upon title to
real property or any interest therein.
Quieting of title is a common law remedy for the removal of any cloud upon,
doubt, or uncertainty affecting title to real property. Whenever there is a cloud
on title to real property or any interest in real property by reason of any
instrument, record, claim, encumbrance, or proceeding that is apparently valid or
effective, but is in truth and in fact, invalid, ineffective, voidable, or
unenforceable, and may be prejudicial to said title, an action may be brought to
remove such cloud or to quiet the title. In such action, the competent court is
tasked to determine the respective rights of the complainant and the other
claimants, not only to place things in their proper places, and make the claimant,
who has no rights to said immovable, respect and not disturb the one so entitled,
but also for the benefit of both, so that whoever has the right will see every
cloud of doubt over the property dissipated, and he can thereafter fearlessly
introduce any desired improvements, as well as use, and even abuse the
property.50
For an action to quiet title to prosper, two indispensable requisites must concur:
(1) the plaintiff or complainant has a legal or equitable title or interest in the real
property subject of the action; and (2) the deed, claim, encumbrance, or
proceeding claimed to be casting a cloud on his title must be shown to be in fact
invalid or inoperative despite its prima facie appearance of validity or legal
efficacy.51
There is no dispute as to the first requisite since Green Acres has legal title over
the subject properties. The issue lies in the second requisite.
A cloud on title consists of (1) any instrument, record, claim, encumbrance or
proceeding; (2) which is apparently valid or effective; (3) but is in truth and in
fact invalid, ineffective, voidable, or unenforceable; and (4) may be prejudicial
to the title sought to be quieted.52
This Court holds that the DARAB decision in favor of Cabral satisfies all four
elements of a cloud on title.
As Green Acres correctly points out, the DARAB decision, a final one at that, is
both an "instrument" and a "record." Black’s Law Dictionary defines an
instrument as a document or writing which gives formal expression to a legal act
or agreement, for the purpose of creating, securing, modifying or terminating a
right.53 A record, on the other hand, is defined as a written account of some act,
court proceeding, transaction or instrument drawn up under authority of law, by
a proper officer, and designed to remain as a memorial or permanent evidence of
the matters to which it relates.54 It is likewise a "claim" which is defined as a
cause of action or a demand for money or property55 since Cabral is asserting her
right over the subject lots. More importantly, it is a "proceeding" which is
defined as a regular and orderly progress in form of law including all possible
steps in an action from its commencement to the execution of judgment and may
19
refer not only to a complete remedy but also to a mere procedural step that is
part of a larger action or special proceeding.56
Also, the DARAB decision is apparently valid and effective.1âwphi1 It is a final
decision that has not been reversed, vacated or nullified. It is likewise apparently
effective and may be prejudicial to Green Acres’ titles since it orders the
cancellation of the titles of the Spouses Moraga and Filcon all from which Green
Acres derived its titles. However, as discussed above, it is ineffective and
unenforceable against Green Acres because Green Acres was not properly
impleaded in the DARAB proceedings nor was there any notice of lis pendens
annotated on the title of Filcon so as to serve notice to Green Acres that the
subject properties were under litigation. As such, Green Acres is an innocent
purchaser for value.
Furthermore, in the case of Dare Adventure Farm Corporation v. Court of
Appeals,57 this Court had the occasion to rule that one of the proper remedies of
a person who was not impleaded in the proceedings declaring null and void the
title from which his title to the property had been derived, is an action for
quieting title. In said case, Dare Adventure Farm Corporation purchased
property from the Goc-ongs. Dare later discovered that said property was
previously mortgaged by the Goc-ongs to the Ngs. When the Goc-ongs failed to
pay their obligation, the mortgage was foreclosed and the Ngs were declared
owners of the property. Dare, who was not impleaded in the foreclosure case,
filed a petition for annulment of the judgment of the trial court with the appellate
court. The Court upheld the appellate court’s dismissal of the petition since such
remedy may be availed only when other remedies are wanting. We further ruled
that Dare’s resort to annulment of judgment was unnecessary since it cannot be
prejudiced by the judgment as it was not impleaded. Two remedies were
suggested to Dare as proper recourse, one of which is an action for quieting of
title:
We agree with the CA's suggestion that the petitioner's proper recourse was
either an action for quieting of title or an action for reconveyance of the
property. It is timely for the Court to remind that the petitioner will be better off
if it should go to the courts to obtain relief through the proper recourse;
otherwise, it would waste its own time and effort, aside from thereby unduly
burdening the dockets of the courts.
The petitioner may vindicate its rights in the property through an action for
quieting of title, a common law remedy designed for the removal of any cloud
upon, or doubt, or uncertainty affecting title to real property. The action for
quieting of title may be brought whenever there is a cloud on title to real
property or any interest in real property by reason of any instrument, record,
claim, encumbrance, or proceeding that is apparently valid or effective, but is, in
truth and in fact, invalid, ineffective, voidable, or unenforceable, and may be
prejudicial to said title. In the action, the competent court is tasked to determine
the respective rights of the plaintiff and the other claimants, not only to put
things in their proper places, and make the claimant, who has no rights to the
immovable, respect and not disturb the one so entitled, but also for the benefit of
both, so that whoever has the right will see every cloud of doubt over the
property dissipated, and he can thereafter fearlessly introduce any desired
improvements, as well as use, and even abuse the property.58
WHEREFORE, the petition in G.R. No. 175542 is GRANTED. The Decision
dated November 24, 2006 of the Court of Appeals in CA-G.R. CV No. 85766 is
REVERSED and SET ASIDE. TCT Nos. T-345660 (M), T-345661 (M) and T -
345662 (M) registered in the name of Green Acres Holdings, Inc. are declared
VALID and any cloud over such titles which may have been created by the
Decision dated January 17, 2001 of the Department of Agrarian Reform
Adjudication Board in DARAB Case No. 5129 (Reg. Case No. 739-Bul-94) is
hereby REMOVED.
The petition in G.R. No. 183205 is DENIED for lack of merit. The Decision
dated February 27, 2008 and Resolution dated May 29, 2008 of the Court of
Appeals in CA-G.R. SP No. 99651 are AFFIRMED. With costs against the
petitioner in G.R. No. 183205. SO ORDERED.
G.R. No.199146
HEIRS OF PACIFICO POCDO, namely, RITA POCDO GASIC, GOLIC
POCDO, MARCELA POCDO ALFELOR, KENNETH POCDO, NIXON
CADOS, JACQUELINE CADOS LEE, EFLYN CADOS, and GIRLIE
CADOS DAPLIN, herein represented by their Attorney-in-Fact JOHN
POCDO, Petitioners,
vs.
ARSENIA AVILA and EMELINDA CHUA, Respondents.
20
 The Case
This petition for review1 assails the 12 October 2011 Decision2 of the Court of
Appeals in CA-G.R. CV No. 91039. The Court of Appeals affirmed the 14
January 2008 Resolution of the Regional Trial Court of Baguio City, Branch 61,
in Civil Case No. 4710-R, dismissing the complaint for lack ofjurisdiction.
The Facts
In June 2000, Pacifico Pocdo, who was later substituted by his heirs upon his
death, filed a complaint to quiet title over a 1,728-square meter property
(disputed property) located in Camp 7, Baguio City, and covered by Tax
Declaration 96-06008-106641. Pacifico claimed that the disputed property is
part of Lot 43, TS-39, which originally belonged to Pacifico’s father, Pocdo
Pool. The disputed property is allegedly different from the one- hectare portion
alloted to Polon Pocdo, the predecessor-in-interest of the defendants Arsenia
Avila and Emelinda Chua, in a partition made by the heirs of Pocdo Pool.
Pacifico alleged that the defendants unlawfully claimed the disputed property,
which belonged to Pacifico.
The facts of the case were summarized by the Court of Appeals as follows:
As it appears, in 1894, Pocdo Pool, who died in 1942, began his occupation and
claim on three lots that were eventually surveyed in his name as Lot 43, TS 39-
SWO-36431, Lot 44, TS 39-SWO-36420 and Lot 45 TS 39-SWO-36429 with an
area of 144,623 [sq.m.], 64,112 [sq.m.], and 9,427 square meters, respectively,
and situated at Residence Section 4, Baguio City. These lots were the subject of
a petition to reopen judicial proceedings filed by the Heirs of Pocdo Pool with
the CFI of Baguio City in Civil Reservation Case No. 1, LRC Case 211. The
registration of the lots in the names of the petitioners were [sic] grantedin
October 1964, but since the decision was not implemented within the 10 years
[sic] prescribed period, the Heirs filed their ancestral land claims with the
DENR. In August 1991, Certificates of Ancestral Lands Claims (CALS) were
issued by the DENR for Lots 44 and 45, but Lot 43 was not approved due to
Memorandum Order 98-15 issued by the DENR Secretary in September 199[8].
In the meantime, on September 14, 1960, Polon Pocdo, an heir of Pocdo Pool,
ceded his rights over the three lots to Pacifico Pocdo in exchange for a one
hectare lot to be taken from Lot 43. However, Pacifico entered into a contract
with Florencio Pax and Braulio Yaranon on November 21, 1968 revoking the
agreement with Polon. In the contract, the 4,875 square meters where Polon’s
house was located became part of the 1-hectare given to Pax and Yaranon in
exchange for their services in the titling of Pacifico’s lands.
Polon filed a complaint in August 1980 [with] the Office of the Barangay
Captain at Camp 7, Baguio City, which was settled by an amicable settlement
dated September 3, 1980 between Pacifico and Polon. They agreed that Polon
would again retain the 4,875 square meters and Pacifico would give the 5,125
square meter area, the remaining portion of the 1-hectare share of Polon, to be
taken from Lot 43 after a segregation.
On April 18, 1981, Polon entered into a Catulagan with Arsenia Avila
authorizing the latter to undertake the segregation of his one-hectare land from
Lot 43 in accord with the amicable settlement of September 3, 1980. In
exchange, Polon would award to her 2,000 square meters from the 1- hectare lot.
After spending time, money and effort in the execution of the survey, Avila gave
the survey results to Polon prompting Polon to execute a Waiver of Rights dated
January 21, 1987. Accordingly, the subdivided lots were declared for tax
purposes and the corresponding tax declaration issued to Polon and Arsenia,
with 8,010 square meters going to Polon and 1,993 square meters to Avila.
On March 10, 2000, finding the amicable settlement, the Catulagan and Waiver
of Rights in order, the CENRO of Baguio City issued in favor of Avila a
Certificate of Exclusion of 993 square meters from the Ancestral Land Claim of
the Heirs of Pocdo Pool over Lot 43.
On April 27, 2000, however, the Heirs of Polon Pocdo and his wife Konon filed
an affidavit of cancellation with OIC-CENRO Teodoro Suaking and on that
basis, Suaking cancelled the Certificate of Exclusion. On May 8, 2000, Avila
complained to the Regional Executive Director or RED the unlawful
cancellation of her Certificate of Exclusion, and on June 1, 2000, the RED
issued a memorandum setting aside the revocation and restoring the Certificate
of Exclusion. On August 13, 2001, Avila filed an administrative complaint
against Suaking, and on July 16, 2002, the RED dismissed the letter-complaint
of Avila and referred the administrative complaint to the DENR Central Office.
Acting on the motion for reconsideration by Avila[against oppositors Pacifico
Pocdo, et al.], the RED in an Order on October 28, 2002 set aside the July 16,
21
2002 order. The Affidavit of Cancellation dated April 27, 2002 filed by the heirs
of Polon Pocdo was dismissed for lack of jurisdiction and the validity of the
Amicable Settlement, Catulagan and Deed of Waiver of Rights were recognized.
The letter dated April 28, 2000 and certification issued on May 31, 2000 by
Suaking were ordered cancelled. Accordingly, the RED held that the TSA
applications of Arsenia Avila and others under TSA Application 15313, 15314,
15409 and 15410 should be given due course subject to compliance with
existing laws and regulations.
The DENR Secretary affirmed his Order in [his] Decision of May 14, 2004 in
DENR Case 5599, with the modification that the TSAs fo[r] the appellee Avila
could now be made the basis of disposition through public bidding and the
appellant may participate in the bidding if qualified.
Pacifico Pocdo, as the appellant, went on appeal to the Office of the President
which resulted in an affirmance of DENR Secretary’s decision on April 19, 2005
in OP Case 04-H-360.
As mentioned, having exhausted administrative remedies, the Heirs of Pacifico
Pocdo challenged the OP resolution before the Court of Appeals, but this
petition was dismissed for having been filed late. The Supreme Court dismissed
the Heirs’appeal from this decision.
The instant case, Civil Case 4710-R, before the Regional Trial Court of Baguio
City, Branch 61 was filed by Pacifico Pocdo against Arsenia Avila and
Emelinda Chua in June 2000, just after the RED set aside Suaking’s revocation
on April 28, 2000 and ordered the restoration of Avila’s Certificate of
Exclusion. Since then, the judicial proceedings have run parallel to the
administrative case.3
In a Resolution4 dated 14 January 2008, the Regional Trial Court dismissed the
case for lack of jurisdiction. The trial court held that the DENR had already
declared the disputed property as public land, which the State, through the
DENR, has the sole power to dispose. Thus, the claim of petitioners to quiet title
is not proper since they do not have title over the disputed property. The trial
court agreed with the DENR Secretary’s ruling that petitioner may participate in
the public bidding of the disputed property if qualified under applicable rules.
Petitioners appealed to the Court of Appeals, asserting that the case is not
limited to quieting of title since there are other issues not affected by the DENR
ruling, particularly the validity of the Waiver of Rights and the Catulagan.
Petitioners maintained that the DENR’s ruling that the disputed property is
public land did not preclude the court from taking cognizance of the issues on
who is entitled possession to the disputed property and whether the questioned
documents are valid and enforceable against Pacifico and his heirs.
The Ruling of the Court of Appeals
The Court of Appeals ruled that petitioners, in raising the issue of quieting of
title, failed to allege any legal or equitable title to quiet. Under Article 477 of the
Civil Code, in an action to quiet title, the plaintiff must have legal or equitable
title to, or interest in the real property which is the subject matter of the action.
Instead of an action to quiet title or accion reivindicatoria, the Court of Appeals
stated that petitioners should have filed an accion publicianabased merely on the
recovery of possession de jure.
On the validity of the Catulagan and the Waiver of Rights, the Court of Appeals
held that petitioners have no right to question these since they were not parties to
said documents had not participated in any manner in their execution. The Court
of Appeals ruled that only the contracting parties are bound by the stipulations
of the said documents. Those not parties to the said documents, and for whose
benefit they were not expressly made, cannot maintain an action based on the
said documents.
Thus, the Court ofAppeals affirmed the trial court’s resolution, subject to the
right of petitioners to file the appropriate action.
The Issues
Petitioners raise the following issues:
THE COURT OF APPEALS ERRED IN RULING THAT THE PETITIONERS
SHOULD JUST FILE THE NECESSARY ACTION FOR RECOVERY OF
POSSESSION BECAUSE SAID COURT HAS FAILED TO TAKE INTO
CONSIDERATION THAT RECOVERY OF POSSESSION IS PRECISELY
ONE OF THE CAUSES OF ACTION IN THE PRESENT CASE.
22
THE COURT OF APPEALS ERRED IN RULING THAT THE RTC HAD NO
JURISDICTION SINCE IT IS THE COURTS, NOT THE DENR, THAT HAS
JURISDICTION OVER ACTIONS INVOLVING POSSESSION OF LANDS,
EVEN ASSUMING WITHOUT ADMITTING, THAT THE LAND
ISAPUBLIC LAND.
THE COURT OFAPPEALS ERRED IN UPHOLDING THE DISMISSAL OF
THE CASE BECAUSE THERE ARE OTHER CAUSES OF ACTION OVER
WHICH THE RTC HAS JURISDICTION, i.e.RECOVERY OF POSSESSION,
DECLARATION OF NULLITY OF DOCUMENTS.
THE COURT OF APPEALS ERRED IN FINDING THAT THE
PETITIONERS HAVE NO TITLE TO THE PROPERTY THAT WOULD
SUPPORT AN ACTION FOR QUIETING OF TITLE WHEN TRIAL HAD
NOT YET COMMENCED. NONETHELESS, THE RECORD IS REPLETE
OF PROOF THAT THE PETITIONERS HAVE RIGHTS/TITLE OVER THE
SUBJECT PROPERTY.5
The Ruling of the Court
We find the petition without merit.
In the administrative case involving the disputed property,which forms part of
Lot 43, the DENR ruled that Lot 43 is public land located within the Baguio
Townsite Reservation. In his Decision dated 14 May 2004 in DENR Case No.
5599, the DENR Secretary stated:
Lot 43 is public land and part of the Baguio Townsite Reservation. This has
already been settled by the decision of the Court of First Instance of Benguet
and Mountain Province dated 13 November 1922 in Civil Reservation Case No.
1. The fact that the heirs of Pocdo Pool were able to reopen Civil Reservation
Case No. 1, LRC Case No. 211 and secure a decision in their favor for
registration of Lot 43 is of no moment.As held in Republic v. Pio R. Marcos (52
SCRA 238), the Court of First Instance of Baguio and Benguet had no
jurisdiction to order the registration of lands already declared public in Civil
Reservation Case No. 1. Lot 43 being part of the Baguio Townsite Reservation,
disposition thereof is under Townsite Sales Application ("TSA"). Precisely on
this bone [sic] that Lot 43 was not awarded a Certificate of Land Ancestral
Claim [sic] under DENR Circular No. 03, series of 1990, because it is within the
Baguio Townsite Reservation.6
The DENR Decision was affirmed by the Office of the President which held that
lands within the Baguio Townsite Reservation belong to the public domain and
are no longer registrable under the Land Registration Act. 7 The Office of the
President ordered the disposition of the disputed property in accordance with the
applicable rules of procedure for the disposition of alienable public lands within
the Baguio Townsite Reservation, particularly Chapter X of Commonwealth Act
No. 141 on Townsite Reservations and other applicable rules.
Having established that the disputed property is public land, the trial court was
therefore correct in dismissing the complaint to quiet title for lack of
jurisdiction.1âwphi1 The trial court had no jurisdiction to determine who among
the parties have better right over the disputed property which is admittedly still
part of the public domain. As held in Dajunos v. Tandayag:8
x x x The Tarucs’ action was for "quieting of title" and necessitated
determination of the respective rights of the litigants, both claimants to a free
patent title, over a piece of property, admittedly public land. The law, as relied
upon by jurisprudence, lodges "the power of executive control, administration,
disposition and alienation of public lands with the Director of Lands subject, of
course, to the control of the Secretary of Agriculture and Natural Resources."
In sum, the decision rendered in civil case 1218 on October 28, 1968 is a patent
nullity. The court below did not have power to determine who (the Firmalos or
the Tarucs) were entitled to an award of free patent title over that piece of
property that yet belonged to the public domain. Neither did it have power to
adjudge the Tarucs as entitled to the "true equitable ownership" thereof, the
latter’s effect being the same: the exclusion of the Firmalos in favor of the
Tarucs.9
In an action for quieting of title, the complainant is seeking for "an adjudication
that a claim of title or interest in property adverse to the claimant is invalid, to
free him from the danger of hostile claim, and to remove a cloud upon or quiet
title to land where stale or unenforceable claims or demands exist." 10 Under
Articles 47611 and 47712 of the Civil Code, the two indispensable requisites in an
action to quiet title are: (1) that the plaintiff has a legal or equitable title to or
interest in the real property subject of the action; and (2) that there is a cloud on
23
his title by reason of any instrument, record, deed, claim, encumbrance or
proceeding, which must be shown to be in fact invalid or inoperative despite its
prima facie appearance of validity.13

In this case, petitioners, claiming to be owners of the disputed property, allege

that respondents are unlawfully claiming the disputed property by using void
documents, namely the "Catulagan" and the Deed of Waiver of Rights.
However, the records reveal that petitioners do not have legal or equitable title
over the disputed property, which forms part of Lot 43, a public land within the
Baguio Townsite Reservation. It is clear from the facts of the case that
petitioners’ predecessors-in-interest, the heirs of Pocdo Pool, were not even
granted a Certificate of Ancestral Land Claim over Lot 43, which remains public
land. Thus, the trial court had no other recourse but to dismiss the case.

There is no more need to discuss the other issues raised since these are
intrinsically linked to petitioners' action to quiet title.

WHEREFORE, we DENY the petition. We AFFIRM the 12 October 2011

Decision of the Court of Appeals in CA-G.R. CV No. 91039. SO ORDERED.

24
G.R. No. 72694 December 1, 1987
AURORA DEL BANCO, EVELYN DEL BANCO, FEDERICO TAINO,
SOLEDAD TAINO, JOVENCIO TAINO, SAMSON TAINO, NOE TAINO,
SOCORRO TAINO and CLEOFAS TAINO, petitioners,
vs.
INTERMEDIATE APPELLATE COURT (Second Civil Cases Division),
ALEJANDRA PANSACOLA, LEONILA ENCALLADO, VEDASTO
ENCALLADO, JOSE YEPES, et al., respondents.
This is a petition for review on certiorari by way of appeal from: (a) the decision
of respondent Court of Appeals (Intermediate Appellate Court) * promulgated
on May 17, 1985 in AC-G.R. CV No. 70460, entitled "Alejandra Pansacola, et
al. vs. Domen Villabona del Banco, et al." which reversed and set aside the
judgment ** of the trial court; and (b) its resolution ** of October 15, 1985 in
the same case, denying petitioners' motion for reconsideration of the
aforementioned decision and their supplement to motion for reconsideration.
The dispositive portion of the questioned decision (Rollo, p. 97) reads, as
follows:
ACCORDINGLY, the decision appealed from is hereby SET ASIDE
insofar as it dismisses the complaint, and another one entered —
(1) Declaring plaintiffs-appellants and defendants-appellees, in their
respective capacities as described in par. V of the complaint, as co-
owners of the property in dispute, but subject to the four-part pro-
indiviso division already made by said property;
(2) Ordering the cancellation of all certificates of title that may have been
issued to any of the parties hereto; and
(3) Ordering the complete and final partition of the subject property in
conformity with law.
For this purpose, this case is hereby remanded to the Court of origin so
that a final partition shall be made in accordance with Sections 2, 3, et.
seq., Rule 69 of the Rules of Court.
Let a copy of this decision be furnished to the Register of Deeds for the
Province of Quezon.
The facts of the case are taken from the decision of the Appellate Court (Rollo,
p. 39) as follows:
In a document executed in the Municipality of San Rafael, Bulacan, on February
11, 1859, three brothers, Benedicto Pansacola, Jose Pansacola and Manuel
Pansacola (known as Fr. Manuel Pena) entered into an agreement which
provided, among others:
(1) That they will purchase from the Spanish Government the lands comprising
the Island of Cagbalite which is located within the boundaries of the
Municipality of Mauban, Province of Tayabas (now Quezon) and has an
approximate area of 1,600 hectares;
(2) That the lands shall be considered after the purchase as their common
property;
(3) That the co-ownership includes Domingo Arce and Baldomera Angulo,
minors at that time represented by their father, Manuel Pansacola (Fr. Manuel
Pena) who will contribute for them in the proposed purchase of the Cagbalite
Island;
(4) That whatever benefits may be derived from the Island shall be shared
equally by the co-owners in the following proportion: Benedicto Pansacola-1/4
share; Jose Pansacola-1/4 share; and, Domingo Arce and Baldomera Angulo-2/4
shares which shall be placed under the care of their father, Manuel Pansacola
(Fr. Manuel Pena).
On August 14, 1866, co-owners entered into the actual possession and
enjoyment of the Island purchased by them from the Spanish Government. On
April 11, 1868 they agreed to modify the terms and conditions of the agreement
entered into by them on February 11, 1859. The new agreement provided for a
new sharing and distribution of the lands, comprising the Island of Cagbalite and
whatever benefits may be derived therefrom, as follows:
25
 (a) The first one-fourth (1/4) portion shall belong to Don Benedicto
Pansacola;
(b) The second one-fourth (1/4) portion shall belong to Don Jose
Pansacola;
(c) The third one-fourth(1/4) portion shall henceforth belong to the
children of their deceased brother, Don Eustaquio Pansacola,
namely: Don Mariano Pansacola,- Maria Pansacola and Don Hipolito
Pansacola;
(d) The fourth and last one-fourth (1/4) portion shall belong to their
nephews and nieces (1) Domingo Arce, (2) Baldomera Angulo,
(3) Marcelina Flores, (4) Francisca Flores, (5) Candelaria dela Cruz,
and (6) Gervasio Pansacola who, being all minors, are still under the
care of their brother, Manuel Pansacola (Fr. Manuel Pena). The latter is
the real father of said minors.
About one hundred years later, on November 18, 1968, private respondents
brought a special action for partition in the Court of First Instance of Quezon,
under the provisions of Rule 69 of the Rules of Court, including as parties the
heirs and successors-in-interest of the co-owners of the Cagbalite Island in the
second contract of co-ownership dated April 11, 1968. In their answer some of
the defendants, petitioners herein, interposed such defenses as prescription, res
judicata, exclusive ownership, estoppel and laches.
After trial on the merits, the trial court rendered a decision *** dated November
6, 1981 dismissing the complaint, the dispositive portion of which reads as
follows:
WHEREFORE, and in the fight of all the foregoing this Court finds and
so holds that the Cagbalite Island has already been partitioned into four
(4) parts among the original co-owners or their successors-in-interest.
Judgment is therefore rendered for the defendants against the plaintiffs
dismissing the complaint in the above entitled case.
Considering that the cross claims filed in the above entitled civil case are
not compulsory cross claims and in order that they may be litigated
individually the same are hereby dismissed without prejudice.
IT IS SO ORDERED.
The motion for reconsideration filed by the plaintiffs, private respondents
herein, was denied by the trial court in an order dated February 25, 1982
(Record on Appeal, p. 241).
On appeal, respondent Court reversed and set aside the decision of the lower
court (Rollo, p. 117). It also denied the motion for reconsideration and the
supplement to motion for reconsideration filed by private respondents, in its
resolution dated October 15, 1983 (Rollo, p. 86).
Instant petition was filed with the Court on December 5, 1985 (Rollo, p. 12).
Petitioners Josefina Pansacola, et al. having filed a separate petition (G.R. No.
72620) on the same subject matter and issues raised in the instant 'petition, the
counsel for private respondents filed a consolidated comment on the separate
petitions for review on February 24, 1986 with the First Division of the Court
(Rollo, p. 119). It appears that counsel for petitioners also filed a consolidated
reply to the consolidated comment of private respondents as required by the
Second Division of the Court (Rollo, p. 151). However, petitioners filed a
separate reply in the instant case on February 18,1987 (Rollo, p. 168)as required
by the Court in a Resolution of the Second Division dated November 24, 1986
(Rollo, p. 160).
On May 19, 1987, private respondents in the instant petition filed a
manifestation praying for the denial of the instant petition in the same manner
that G.R. No. 72620 was denied by the Court in its Resolution dated July 23,
1986 (Rollo, p. 151). Their rejoinder to the reply of petitioners was filed on May
25,1987 (Rollo, p. 179).
On June 8, 1987, the Court resolved to give due course to the petition (Rollo, p.
192). The memorandum of private respondents was mailed on July 18, 1987 and
received in the Court on July 29, 1987 (Rollo, p. 112); the memorandum for
petitioners was mailed on August 18, 1987 and received in the Court on
September 7, 1987 (Rollo, p. 177).
26
The sole issue to be resolved by the Court is the question of whether or not
Cagbalite Island is still undivided property owned in common by the heirs and
successors-in-interest of the brothers, Benedicto, Jose and Manuel Pansacola.
The Pansacola brothers purchased the Island in 1859 as common property and
agreed on how they would share in the benefits to be derived from the Island.
On April 11, 1868, they modified the terms and conditions of the agreement so
as to include in the co-ownership of the island the children of their deceased
brothers Eustaquio and the other children of Manuel Pansacola (Fr. Manuel
Pena) who were committed in the agreement of February 11, 1859. The new
agreement provided for a new sharing proportion and distribution of the Island
among the co-owners.
On January 20, 1907, the representative of the heirs of all the original owners of
Cagbalite Island entered into an agreement to partition the Island, supplemented
by another agreement dated April 18, 1908. The contract dated January 20, 1907
provides as follows:
Sa Mauban, Tayabas, ika 20 ng Enero ng 1907 caming mga quinatawan
ng mga ibang co-herederos na hindi caharap, sa pulong na ito, sa nasa
naming lahat na magcaroon na ng catahimikan ang aming-aming
cabahagui sa Pulong Kagbalete sumacatuid upang mapagtoos ang
hangahan ng apat na sapul na pagcacabahagui nitong manang ito,
pagcacausap na naming lahat at maihanay at mapagtalonan ang saysay ng
isa't isa, ay cusa naming pinagcasunduan at pinasiya ang
nangasosonod:—
Una: Ang malaquing calupaan, alis ang lahat na pacatan ay babahaguin
alinsunod sa pagcabaki na guinawa sa croquis na niyari ng practico
agrimensor Don Jose Garcia.
Icalawa: Ang Lomingoy, doon ang tuid na guhit sa ilong ng Pait ay
pagaapatin ding sinlaqui ayon sa dating pagkakabaki.
Icatlo: Cung magawa na ang tunay na piano at icapit na sa lupa,
paglalagay ng nadarapat na mojon, ang masacupan ng guhit, sumacatuid
ang caingin at pananim ng isa na nasacupan ng pucto na noocol sa iba, ay
mapapasulit sa dapat mag-ari, na pagbabayaran nito ang nagtanim sa
halagang:- bawat caponong niog na nabunga, P 1.00 'un peso); cung ang
bias ay abot sa isang vara, P 0.50; cung bagong tanim o locloc P 0. 50
ang capono.
Icapat: Ang lahat na pacatan ay bacod na pagaapatin at bawat bahagui ay
noocol sa isat-isa sa apat na sanga ng paganacang nagmana.
Icalima: Upang ang naipatanim ng bawat isa ay matama sa canya ng
mailagan ang hirap ng loob ng nagatikha; ay pagtotolong-tolongan ng
lahat naiba na mahusay ang dalawang partes na magcalapit na mapa
ayong tumama, hangang may pagluluaran, sa nagsikap at maoyanam,
maidaco sa lugar na walang cailangang pagusapan.
Icanim: Ang casulatang ito, cung mapermahan na na magcacaharap
sampong ng mga ibang co-herederos na notipicahan nitong lahat na
pinagcasundoan ay mahahabilin sa camay ng agrimensor, Amadeo
Pansacola, upang canyang mapanusugan ang maipaganap ang dito'y
naootos.
Na sa catunayan at catibayan ng lahat na nalalagda dito, sa pag galang at
pag ganap dito sa paingacaisahan ay pumirma sampo ng mga sacsing
caharap at catanto ngayong fecha ayon sa itaas.
The contract dated April 18, 1908 provides as follows:
Sa Mauban, ika 18 ng Abril ng 1908, sa pagcacatipon ng lahat na
firmantes nito ay pinagcaisahan itong nangasosonod:—
Una — Pinagtitibay ang mga pinagcasundoan sa itaas noong 20 ng Enero
ng 1907, liban na lamang sa mga pangcat na una at icapat at tongcol doon
pinasiya naming bahaguinin ng halohalo at paparejo ang calupaan at
pacatan.
Ycalawa — Sa pagsucat ng agrimensor na si Amadeo at paggawa ng
piano at descripcion ay pagbabayaran siya ng sa bawat isa naoocol sa
halagang isang piso sa bawat hectares.
Icatlo — Ang counting pucto sa 'Mayanibulong' na may caingin ni G.
Isidro Altamarino, asawa ni Restitute ay tutumbasan naman cay G.
27
 Norberto Pansacola sa lugar ng Dapo calapit ng Pinangalo ng gasing
sucat.
Icapat — Sa inilahad na piano ay pinasiya nang itoloy at upang maca
pagparehistro ang isa't isa ay pinagcaisahang magcacagastos na
parepareho para sa tablang pangmohon at ibat iba pang cagastusan.
Sa catunayan at catibayan ay cami, pumirma. (Record on Appeal, p. 224)
There is nothing in all four agreements that suggests that actual or physical
partition of the Island had really been made by either the original owners or their
heirs or successors-in-interest. The agreement entered into in 1859 simply
provides for the sharing of whatever benefits can be derived from the island. The
agreement, in fact, states that the Island to be purchased shall be considered as
their common property. In the second agreement entered in 1868 the co-owners
agreed not only on the sharing proportion of the benefits derived from the Island
but also on the distribution of the Island each of the brothers was allocated a 1/4
portion of the Island with the children of the deceased brother, Eustaquio
Pansacola allocated a 1/4 portion and the children of Manuel Pansacola (Fr.
Manuel Pena) also allocated a 1/4 portion of the Island. With the distribution
agreed upon each of the co-owner is a co-owner of the whole, and in this sense,
over the whole he exercises the right of dominion, but he is at the same time the
sole owner of a portion, in the instant case, a 1/4 portion (for each group of co-
owners) of the Island which is truly abstract, because until physical division is
effected such portion is merely an Ideal share, not concretely determined (3
Manresa, Codigo Civil, 3rd Ed., page 486, cited in Lopez vs. Cuaycong, 74 Phil.
601; De la Cruz vs. Cruz, 32 SCRA 307 [1970]; Felices vs. Colegado, 35 SCRA
173 [1970],; Dultra vs. CFl 70 SCRA 465 [1976]; Gatchalian vs. Arlegui, 75
SCRA 234 [1977].)
In the agreement of January 20, 1907, the heirs that were represented agreed on
how the Island was to be partitioned. The agreement of April 18, 1908 which
supplements that of January 20, 1907 reveals that as of the signing of the 1908
agreement no actual partition of the Island had as yet been done. The second and
fourth paragraphs of the agreement speaks of a survey yet to be conducted by a
certain Amadeo and a plan and description yet to be made. Virgilio Pansacola, a
son of the surveyor named Amadeo who is referred to in the contract dated April
18, 1908 as the surveyor to whom the task of surveying Cagbalite Island
pursuant to said agreement was entrusted, however, testified that said contracts
were never implemented because nobody defrayed the expenses for surveying
the same (Record on Appeal, p. 225).
Petitioners invoke res judicata to bar this action for partition in view of the
decision of the Court in G.R. No. 21033, "Domingo Arce vs. Maria Villabona, et
al.," 21034, "Domingo Arce vs. Francisco Pansacola, et al.," and
21035, "Domingo Arce vs. Emiliano Pansacola, et al." promulgated on February
20, 1958 (Rollo, p. 141) and Brief for Defendants-Appellees, p. 87 Appendix 1),
wherein the Court said:
Considering the facts that he waited for a period of nearly 23 years after
the return from his deportation before taking any positive action to
recover his pretended right in the property in question, gives great credit,
in our opinion, to the declaration of the witnesses for the defense (a) that
the original parcel of land was partitioned as they claim, and (b) that the
plaintiff had disposed of all the right and interest which he had in the
portion which had been given to him.
The issue in the aforementioned case which were tried together is not whether
there has already been a partition of the Cagbalite Island. The actions were
brought by the plaintiff to recover possession of three distinct parcels of land,
together with damages. In fact the word partition was used in the metaphysical
or Ideal sense (not in its physical sense).
Commenting on the above ruling of the Court in connection with the instant
case, the respondent Court said:
Concededly, the Supreme Court decision in G.R. Nos. 21033-35 (Exh. X)
did use or employ the word "partition." A careful reading of the said
decision will, however, reveal, and we so hold, that the employment or
use of the word "partition" therein was made not in its technical and legal
meaning or sense adverted to above, but, rather in its Ideal, abstract and
spiritual sense, this is (at) once evident from the bare statement in said
decision to the effect that the property was divided into four parts,
without any reference to the specific parts of the property that may have
been adjudicated to each owner. There being no such reference in the
decision and in the judgment affirmed therein to the adjudication of
specific and definite portions of the property to each co-owner, there is a
28
 clear and logical inference that there was indeed no adjudication of
specific and definite portions of the property made to each co-owner.
It must be admitted that the word "partition" is not infrequently used both in
popular and technical parlance (Fule vs. Fule, 52 Phil. 750 [1929]). For purposes
of the aforementioned case, evidently the Court used the word "partition" to
refer to the distribution of the Cagbalite Island agreed upon by the original
owners and in the later agreements, by the heirs and their subsequent successors-
in-interest. There need not be a physical partition; a distribution of the Island
even in a state of indiviso or was sufficient in order that a co-owner may validly
sell his portion of the co-owned property. The sale of part of a particular lot thus
co-owned by one co-owner was within his right pro-indivisois valid in its
entirety (Pamplona vs. Moreto, 96 SCRA 775 [1980]) but he may not convey a
physical portion with boundaries of the land owned in common (Mercado vs.
Liwanag, 5 SCRA 472 [1962]). Definitely, there was no physical partition of the
Island in 1859. Neither could there have been one in 1894 because the manner of
subdividing the Island was only provided for in the later agreements entered into
by the heirs in 1907 and 1908. There was a distribution of the Island in 1868 as
agreed upon by the original co-owners in their agreement of April 11, 1868. Any
agreement entered into by the parties in 1894 could be no more than another
agreement as to the distribution of the Island among the heirs of the original co-
owners and the preparation of a tentative plan by a practical surveyor, a Mr. Jose
Garcia, mentioned in the first paragraph of the 1907 agreement, preparatory to
the preparation of the real plan to be prepared by the surveyor Amadeo,
mentioned in the agreement of April 18, 1908.
What is important in the Court's ruling in the three aforementioned cases is that,
the fact that there was a distribution of the Island among the co-owners made the
sale of Domingo Arce of the portion allocated to him though pro-indiviso, valid.
He thus disposed of all his rights and interests in the portion given to him.
It is not disputed that some of the private respondents and some of the
petitioners at the time the action for partition was filed in the trial court have
been in actual possession and enjoyment of several portions of the property in
question (Rollo, p. 148). This does not provide any proof that the Island in
question has already been actually partitioned and co-ownership terminated. A
co-owner cannot, without the conformity of the other co-owners or a judicial
decree of partition issued pursuant to the provision of Rule 69 of the Rules of
Court (Rule 71 of the Old Rules), adjudicate to himself in fee simple a
determinate portion of the lot owned in common, as his share therein, to the
exclusion of other co-owners (Santos, Jr. vs. Buenconsejo, 14 SCRA 407
[1965]; Carvajal vs. Court of Appeals, 112 SCRA 237 [1982]). It is a basic
principle in the law of co-ownership both under the present Civil Code as in the
Code of 1889 that no individual co- owner can claim any definite portion thereof
(Diversified Credit Corporation vs. Rosada 26 SCRA 470 [1968]). lt is therefore
of no moment that some of the co-owners have succeeded in securing cadastral
titles in their names to some portions of the Island occupied by them (Rollo, p.
10).
It is not enough that the co-owners agree to subdivide the property. They must
have a subdivision plan drawn in accordance with which they take actual and
exclusive possession of their respective portions in the plan and titles issued to
each of them accordingly (Caro vs. Court of Appeals, 113 SCRA 10 [1982]).
The mechanics of actual partition should follow the procedure laid down in Rule
69 of the Rules of Court. Maganon vs. Montejo, 146 SCRA 282 [1986]).
Neither can such actual possession and enjoyment of some portions of the Island
by some of the petitioners herein be considered a repudiation of the co-
ownership. It is undisputed that the Cagbalite Island was purchased by the
original co-owners as a common property and it has not been proven that the
Island had been partitioned among them or among their heirs. While there is co-
ownership, a co-owner's possession of his share is co-possession which is linked
to the possession of the other co-owners (Gatchalian vs. Arlegui, 75 SCRA 234
[1977]).
Furthermore, no prescription shall run in favor of a co-owner against his co-
owners or co-heirs so long as he expressly or impliedly recognizes the co-
ownership (Valdez vs. Olonga, 51 SCRA 71 [1973], Tero vs. Tero, 131 SCRA
100 [1984]). Co-owners cannot acquire by prescription the share of the other co-
owners, absent a clear repudiation of the co-ownership clearly communicated to
the other co-owners (Mariano vs. De Vega, 148 SCRA 342 [1987]).
An action for partition does not prescribe. Article 403 of the Old Civil Code,
now Article 497, provides that the assignees of the co-owners may take part in
the partition of the common property, and Article 400 of the Old Code, now
Article 494 provides that each co-owner may demand at any time the partition of
the common property, a provision which implies that the action to demand
partition is imprescriptible or cannot be barred by laches (Budlong vs. Pondoc,
79 SCRA 24 [1977]). An action for partition does not lie except when the co-
29
ownership is properly repudiated by the co- owner (Jardin vs. Hollasco, 117
SCRA 532 [1982]).
On July 23, 1986, the Court through its Second Division denied the petition for
the review of G.R. No. 72620, the petition for review on certiorari separately
filed by Josefina Pansacola (Rollo, p. 151).
PREMISES CONSIDERED, the instant petition is likewise DENIED for lack of
merit. SO ORDERED.
G.R. No. 179205 July 30, 2014
HEIRS OR REYNALDO DELA ROSA, Namely: TEOFISTA DELA
ROSA, JOSEPHINE SANTIAGO AND JOSEPH DELA ROSA, Petitioners,
vs.
MARIO A. BA TONGBACAL, IRENEO BATONGBACAL, JOCELYN
BA TONGBACAL, NESTOR BATONGBACAL AND LOURDES BA
TONGBACAL, Respondents.
This is a Petition for Review on Certiorari1 pursuant to Rule 45 of the Revised
Rules of Court, assailing the 7 December 2006 Decision2 and 8 August 2007
Resolution3 of the Fourth Division of the Court of Appeals in CA-G.R. CV No.
64172. In its assailed Resolution, the appellate court modified its earlier ruling
and proceeded to direct petitioners to execute the requisite Deed of Sale over the
subject property.
The Facts
The subject prope1iy consists of a 3, 750 square meter-portion of the 15,00 l
square meters parcel of land situated in Barrio Saog, Marilao, Bulacan
denominated as Lot No. 1, and registered under Transfer Certificate of Title
(TCT) No. T-1074494 under the names of Reynaldo Dela Rosa (Reynaldo),
Eduardo Dela Rosa (Eduardo), Araceli Dela Rosa (Araceli) and Zenaida Dela
Rosa (Zenaida).
Sometime in 1984, Reynaldo offered to sell the subject property to Guillermo
Batongbacal (Guillermo) and Mario Batongbacal (Mario) for ₱50.00 per square
meter or for a total of ₱187,500.00. Pursuant to the agreement, Reynaldo
received an advance payment of ₱31,500.00 leaving a balance of ₱156,000.00.
As shown in the document denominated as Resibo and signed by Reynaldo on
18 February 1987, the parties agreed that the amount of ₱20,000.00 as part of
the advance payment shall be paid upon the delivery of the Special Power-of-
Attorney (SPA), which would authorize Reynaldo to alienate the subject
property on behalf of his co-owners and siblings namely, Eduardo, Araceli and
Zenaida. The balance thereon shall be paid in ₱10,000.00 monthly installments
until the purchase price is fully settled, to wit:
RESlBO
Tinaggap ko ngayong araw na ilo kay Engr. Guillermo A. Batongbacal, ng
Poblacion II, Marilao, Bulacan, ang halagang sampung libong piso (₱10,000.00)
salaping Pilipino, hilang bahaging hayad sa bahagi ng lupang may sukal na
3,750 sq.m. na aking kabahagi sa isang (1) lagay na lupang nasasaog, Marilao,
Bulakan, sinasaklcrw ng T.C.T. No. T-107449, ng Bulakan, na ipinagkasundo
kong ipaghili sa naulil na Engr. Guillermo A. Batongbacal sa halagang
Limampung Piso (₱50.00) salaping Filipino, bawat isang (1) melrong parisukal.
Ang paunang bayad na aking tinanggap ukol sa lupang nabanggil sa ilaas ay
₱21,500.00, nuong Abril 14-18, 1984. Ang halagang dapal pa niyang bayaran sa
akin ay P 156,000.00, na ang halagang dalawampung Ii bong piso (₱20,000.00)
ay babayaran niya sa akin sa arcrw na nag power-of-attorney nina Zenaida dcla
Rosa, at Enrique Magsaloc ay aking nabigay sa nasabing Engr. Guillermo A.
Batongbacal; na ang nalalabing hahaging bayad ay kanyang habayaran sa akin
ng Sampung libong piso (P 10,000.00) salaping Filipino, bawat buwan hanggang
sa matapusan ang pagbabayad ng kabuuang halaga na Isang Daang at
Walumpu’t Pitong libo Limang Daang Piso (₱187,500.00). An,g- bahaging
aking ipinagbibili ay ang Lote No. I, may sukat na 3,750 sq.m. na makikita sa
nakalakip na sketch plan na aking ding nilagdaan sa ikaliliwanag ng kasulutang
ito.5
Subsequent to the execution of the said agreement, Mario and Guillermo, on
their own instance, initiated a survey to segregate the area of 3,750 square
meters from the whole area covered by TCT No. T-107449, delineating the
boundaries of the subdivided parts. As a result, they came up with a subdivision
plan specifically designating the subject property signed by a Geodetic
Engineer.6 Mario and Guillermo thereafter made several demands from
Reynaldo to deliver the SP A as agreed upon, but such demands all went
unheeded.
30
Consequently, Guillermo and Mario initiated an action for Specific Performance
or Rescission and Damages before the Regional Trial Court (RTC) of Malolos,
Bulacan, seeking to enforce their Contract to Sell dated 18 February 1987. In
their Complaint docketed as Civil Case No. 215-M· 90,7 Mario and Guillermo
asserted that they have a better right over the subject property and alleged that
the subsequent sale thereof effected by Reynaldo to third persons is void as it
was done in bad faith. It was prayed in the Complaint that Reynaldo be directed
to deliver the SPA and, in case of its impossibility, to return the amount of
₱31,500.00 with legal interest and with damages in either case.
To protect their rights on the subject property, Mario and Guillermo, after
initiating Civil Case No. 215-M-90, filed a Notice of Lis Pendens registering
their claim on the certificate of title covering the entire property.
In refuting the allegations of Mario and Guillermo in their Complaint. Reynaldo
in his Answer8 countered that the purported Contract to Sell is void, because he
never gave his consent thereto. Reynaldo insisted that he was made to
understand that the contract between him and the Batongbacals was merely an
equitable mortgage whereby it was agreed that the latter will loan to him the
amount of ₱3 l ,500.00 payable once he receives his share in the proceeds of the
sale of the land registered under TCT No. T-107449.
Following the pre-trial conference without the parties reaching an amicable
settlement, trial on the merits ensued.9Both parties proceeded to present, in open
court, documentary and testimonial evidence to substantiate their claims.
For failure of Mario and Guillermo as plaintiffs therein to adduce sufficient
evidence to support their complaint, the RTC, in a Decision 10 dated 24 March
1999, dismissed Civil Case No. 215-M-90 and ordered Reynaldo to return to the
former the sum of ₱28,000.00 with 12% annual interest. Reynaldo failed to
convince the court a quo that the contract he entered into with Mario was an
equitable mortgage. It was held by the trial court, however, that the supposed
Contract to Sell denominated as Resibo is unenforceable under Article 1403 of
the New Civil Code because Reynaldo cannot bind his co-owners into such
contract without an SPA authorizing him to do so. As such, Reynaldo cannot be
compelled to deliver the subject property but he was nonetheless ordered by the
court to return the amount he received as pmi of the contract price since no one
should be allowed to unjustly enrich himself at the expense of another. The RTC
disposed in this wise:
WHEREFORE, premises considered, the instant complaint is hereby
DISMISSED.
However, [Reynaldo is] hereby ordered to return to [Mario and Guillermoj the
sum of ₱28,000.00 plus 12% interest per annum from the date of this decision
until fully paid.11
On appeal, the Comi of Appeals, in its Decision12 dated 7 December 2006,
brushed aside the claim of equitable mortgage and held that the sale effected by
Reynaldo of his undivided share in the property is valid and enforceable.
According to the appellate court, no SPA is necessary for Reynaldo's disposition
of his undivided share as it is limited to the portion that may be allotted to him
upon the termination of the co-ownership. The Batongbacals could have validly
demanded from Reynaldo to deliver the subject property pursuant to the
Contract to Sell but such option is no longer feasible because the entire property
has already been sold to third persons to whom a new title was issued. The
appellate court thus proceeded to rescind the contract and ordered Reynaldo to
return the amount he received as consideration thereby restoring the parties to
their situation before entering into the agreement. The decretal portion of the
decision reads:
WHEREFORE, the decision dated March 24, 1999 is AFFIRMED with
modification that appellee is ordered to return to appellants the amount of
₱31,500.00 plus 12% interest per annum from the date of decision of the trial
court until full payment thereof.
In addition, the appellee is ordered:
1. To pay appellants ₱50,000.00 as compensatory damages; ₱50,000.00
as moral damages; and ₱30,000.00 as exemplary damages.
2. To pay attorney's fees and litigation expenses of ₱50,000.00; and
3. Double costs.13
In seeking modification of the appellate court's decision, Mario and Guillermo
pointed out that the title of the subject property has not yet been transferred to
31
third persons, and thus, Reynaldo can still be compelled to execute a deed of
conveyance over his undivided share of the entire property.
In a Resolution14 dated 8 August 2007, the Court of Appeals granted the Motion
for Reconsideration of Mario and Guillermo and directed Reynaldo to convey
the subject property to them, viz:
WHEREFORE, [Reynaldo's] Motion for Reconsideration is DENIED for lack of
merit.
Upon the other hand, [Mario and Guillermo] Motion for Reconsideration is
GRANTED. Accordingly, the decision dated December 7, 2006 is PARTIALLY
RECONSIDERED ordering defendant-appellee Reynaldo dela Rosa or his
successor-in-interest to execute the requisite Deed of Sale over his Y-i undivided
share in the subject property covered by TCT T-107449 and to accept the
consideration of ₱156,000.00 within thirty (30) days from the finality of the
decision.
In case of failure of [Reynaldo] to execute the deed of sale, the Branch Clerk of
Court of RTC Br. 16 of Malolos, Bulacan is directed to execute the same and
receive the ₱156,000.00 balance on the purchase price on behalf of Reynaldo de
la Rosa.15
On 9 September 2007, the appellate court was notified of the death or Reynaldo,
and his heirs sought to be substituted as party in this case. 16
Petitioners Heirs of Reynaldo are now before this Court via this instant Petition
for Review on Certiorari praying that the Court of Appeals Decision and
Resolution be reversed on the ground that it was rendered not in accordance with
the applicable law and jurisprudence.
Issues
I.
WHETHER OR NOT THERE IS A CONTRACT OF SALE
BETWEEN REYNALDO DELA ROSA AND GUILLERMO
BATONGBACAL;
II.
ASSUMING THAT THERE IS A CONTRACT OF SALE,
WHETHER OR NOT GUILLERMO BATONGBACAL COMPLIED
WITII I IIS OBLIGATION [UNDER THE CONTRACTl;
III.
WHETHER OR NOT RESPONDENTS ARE GUILTY OF LACHES;
IV.
WHETHER OR NOT MARIO BATONGBACAL IS A PARTY TO
THE TRANSACTION BETWEEN REYNALDO DELA ROSA AND
GUILLERMO BATONGBACAL;
V.
WHETHER OR NOT RESPONDEN'qS] ARE ENTITLED TO AN A
WARD OF DAMAGES;
VI.
ASSUMING ARGUENDO THAT RESPONDENTS ARE ENTITLED
TO AW ARD OF DAMAGES. WHETHER OR NOT THE COURT
OF APPEALS" A WARD OF DAMAGES WAS EXCESSIVE.17
The various contentions revolve on the sole issue of whether the contract entered
into by parties was a Contract to Sell or an equitable mortgage. The Court will
not delve into questions which arc factual in nature, consistent with the rule that
this Court is not a trier of facts.
The Court's Ruling
In assailing the Court of Appeals' Decision and Resolution, petitioners are
unflinching in their stand that the disputed contract purporting to be an absolute
deed of sale was an equitable mortgage with the subject p roperty as security for
a loan obligation. To prove their point, petitioners asserted that the consideration
32
in the amount of ₱187,500.00 for a property consisting of 15,001 square meters
is grossly inadequate because the land valuation in Barrio Saog, Marilao,
Bulacan, at the time the transaction was entered into by the parties in 1984, was
already ₱80.00 to ₱100.00 per square meter. The gross inadequacy of the price,
the Heirs of Reynaldo argued, is telling of the intention of the parties to
mortgage and not to sell the property with the end view of affording the
mortgagor an easy opportunity to redeem the property should his means permit
him to do so.
An equitable mortgage is defined as one although lacking in some formality, or
form or words, or other requisites demanded by a statute, nevertheless reveals
the intention of the parties to charge real property as security for a debt, and
contains nothing impossible or contrary to law. For the presumption of an
equitable mortgage to arise, two requisites must concur: (1) that the parties
entered into a contract denominated as a sale; and (2) the intention was to secure
an existing debt by way of mortgage. Consequently, the non-payment of the debt
when due gives the mortgagee the right to foreclose the mortgage, sell the
property and apply the proceeds of the sale for the satisfaction of the loan
obligation.18 While there is no single test to determine whether the deed of
absolute sale on its face is really a simple loan accommodation secured by a
mortgage, the Civil Code, however, enumerates several instances when a
contract is presumed to be an equitable mortgage, to wit:
Article 1602. The contract shall be presumed to be an equitable mortgage, in any
of the following cases:
1) When the price of a sale with right to repurchase is unusually
inadequate;
(2) When the vendor remains in possession as lessee or otherwise;
(3) When upon or after the expiration of the right to repurchase another
instrument extending the period of redemption or granting a new period
is executed;
(4) When the purchaser retains for himself a part of the purchase price;
(5) When the vendor binds himself to pay the taxes on the thing sold;
(6) In any other case where it may be fairly inferred that the real
intention of the parties is that the transaction shall secure the payment
of a debt or the performance of any other obligation.
In any of the foregoing cases, any money, fruits, or other benefit to be received
by the vendee as rent or otherwise shall be considered as interest which shall be
subject to the usury laws.
A perusal of the contract denominated as Resibo reveals the utter frailty of
petitioners' position because nothing therein suggests, even remotely, that the
subject property was given to secure a monetary obligation. The terms of the
contract set forth in no uncertain terms that the instrument was executed with the
intention of transferring the ownership of the subject prope1iy to the buyer in
exchange for the price. Nowhere in the deed is it indicated that the transfer was
merely intended to secure a debt obligation. On the contrary, the document
clearly indicates the intent of Reynaldo to sell his share in the property. The
primary consideration in determining the true nature of a contract is the intention
of the parties.19 If the words of a contract appear to contravene the evident
intention of the paiiies, the latter shall prevail.20 Such intention is determined not
only from the express terms of their agreement, but also from the
contemporaneous and subsequent acts of the parties.21 That the parties intended
some other acts or contracts apart from the express terms of the agreement, was
not proven by Reynaldo during the trial or by his heirs herein.22Beyond their
bare and uncorroborated asseverations that the contract failed to express the true
intention of the parties, the record is bereft of any evidence indicative that there
was an equitable mortgage.
Neither could the allegation of gross inadequacy of the price carry the day for
the petitioners.1âwphi1 It must be underscored at this point that the subject of
the Contract to Sell was limited only to '14 pro-indiviso share of Reynaldo
consisting an area of 3,750 square meter and not the entire 15,001-square meter
parcel of land. As a co-owner of the subject property, Reynaldo's right to sell,
assign or mortgage his ideal share in the property held in common is sanctioned
by law. The applicable law is Article 493 of the New Civil Code, which spells
out the rights of co-owners over a co-owned property, to wit:
Art. 493. Each co-owner shall have the foll ownership of his part and of the
fruits and benefits pertaining thereto, and he may therefore alienate, assign or
mortgage it, and even substitute another person in its enjoyment, except when
33
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.
Pursuant to this law, a co-owner has the right to alienate his proindiviso share in
the co-owned property even without the consent of his coowners.23 This right is
absolute and in accordance with the well-settled doctrine that a co-owner has a
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 In other words,
the law does not prohibit a co-owner from selling, alienating, mortgaging his
ideal share in the property held in common.25
In Vaglidad v. Vaglidad, Jr., a case nearly on all fours to the present petition, the
Court upheld the right of the co-owner to alienate his proindiviso share in the
co-owned property as part of his right of dominion. It was even pointed out that
since the previous sale is valid, the subsequent conveyance effected by the co-
owner is null and void pursuant to the principle that "no one can give what he
does not have," nemo dat quod non habet, thus:
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, 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. 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.
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," 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. 26 (Emphasis
supplied).
In the same breadth, a co-owner cannot be compelled by the court to give their
consent to the sale of his share in a co-owned property. In Arambulo v. Nolasco,
the Court intimated:
The ultimate authorities in civil law, recognized as such by the Court, agree that
co-owners such as respondents have over their part, the right of full and absolute
ownership. Such right is the same as that or individual owners which is not
diminished by the fact that the entire property is co-owned with others. That part
which ideally belongs to them, or their mental portion, may be disposed of as
they please, independent of the decision of their co-owners. So we rule in this
case. The respondents cannot be ordered to sell their portion of the co-owned
properties. In the language of Rodriguez v. Court of first Instance of Rizal, "each
party is the sole judge of what is good for him." 27(Underscoring ours).
Thus, even if the impression of the Court of Appeals were true, i.e., that the
entire property has been sold to thirds persons, such sale could not have affected
the right of Mario and Guillermo to recover the property from Reynaldo. In view
of the nature of co-ownership, the Comi of Appeals correctly ruled that the
terms in the Contract to Sell, which limited the subject to Reynaldo's ideal share
in the property held in common is perfectly valid and binding. In fact, no
authority from the other co-owners is necessary for such disposition to be valid
as he is afforded by the law fullownership of his paii and of the fruits and
benefits pertaining thereto. J\ condition set forth in a sale contract requiring a co-
owner to secure an authority from his co-owners for the alienation of his share,
as seemingly indicated in this case, should be considered mere surplusage and
docs not, in any way, affect the validity or the enforceability of the contract. Nor
should such a condition indicate an intention to sell the whole because the
contrary intention has been clearly written:
x x x Ang bahaging aking ipinagbibili ay ang f,ote No. 1, may sukat na 3,750
sq.m. na makikita sa nakalakip na sketch plan na aking ding nilagdaan sa
ikaliliwanag ng kasulatang ito.28 Indeed, the intention clearly written, settles the
issue regarding the purchase price. A contract of sale is a consensual contract,
which becomes valid and binding upon the meeting of minds of the parties on
the price and the object of the sale.29 The mere inadequacy of the price docs not
affect its validity when both parties are in a position to form an independent
judgment concerning the transaction, unless fraud, mistake or undue influence
indicative of a defect in consent is present.30 A contract may consequently be
annulled on the ground of vitiated consent and not due to the inadequacy of the
34
price.31 In the case at bar, however, no evidence to prove fraud, mistake or
undue influence indicative of vitiated consent is attendant.
As the parties invoking equitable mortgage, the Heirs of Reynaldo did not even
come close to proving that the parties intended to charge the property as security
for a debt, leaving us with no other choice but to uphold the stipulations in the
contract. Basic is the rule that if the terms of the contract are clear and leave no
doubt upon the intention of the parties, the literal meaning of its stipulations
shall control,32 we find that the Court of Appeals cannot be faulted for ruling, in
modification of its original judgment, that the sale effected by Reynaldo of his
undivided share in the property is valid and enforceable.
WHEREFORE, premises considered, the petition is DENIED. The assailed
Decision and Resolution of the Court of Appeals are hereby AFFIRMED.
SO ORDERED.
G.R. No. 189420
RAUL V. ARAMBULO AND TERESITA A. DELA CRUZ, Petitioners,
vs.
GENARO NOLASCO AND JEREMY SPENCER
NOLASCO, Respondents.
This is a Petition for Review of the 7 October 2008 Decision1 and 30 July 2009
Resolution2 of the Court of Appeals in CA-G.R. CV No. 76449, which reversed
and set aside the Decision3 of the Regional Trial Court (RTC) of Manila, Branch
51, dated 19 September 2002.
Petitioners Raul V. Arambulo and Teresita A. Dela Cruz, along with their
mother Rosita Vda. De Arambulo, and siblings Primo V. Arambulo, Ma.
Lorenza A. Lopez, Ana Maria V. Arambulo, Maximiano V. Arambulo, Julio V.
Arambulo and Iraida Arambulo Nolasco (Iraida) are co-owners of two (2)
parcels of land located in Tondo, Manila, with an aggregate size of 233 square
meters. When Iraida passed away, she was succeeded by her husband,
respondent Genaro Nolasco and their children, Iris Abegail Nolasco, Ingrid
Aileen Arambulo and respondent Jeremy Spencer Nolasco.
On 8 January 1999, petitioners filed a petition for relief under Article 491 of the
Civil Code with the RTC of Manila, alleging that all of the co- owners, except
for respondents, have authorized petitioners to sell their respective shares to the
subject properties; that only respondents are withholding their consent to the sale
of their shares; that in case the sale pushes through, their mother and siblings
will get their respective 1/9 share of the proceeds of the sale, while respondents
will get 1/4 share each of the 1/9 share of Iraida; that the sale of subject
properties constitutes alteration; and that under Article 491 of the Civil Code, if
one or more co-owners shall withhold their consent to the alterations in the thing
owned in common, the courts may afford adequate relief. 4
In their Answer, respondents sought the dismissal of the petition for being
premature. Respondents averred that they were not aware of the intention of
petitioners to sell the properties they co-owned because they were not called to
participate in any negotiations regarding the disposition of the property. 5
After the pre-trial, two (2) issues were submitted for consideration:
1.Whether or not respondents are withholding their consent in the sale
of the subject properties; and
2.In the affirmative, whether or not withholding of consent of sale by
the respondents is prejudicial to the petitioners.6
On 19 September 2002, the trial court ruled in favor of petitioners and ordered
respondents to give their consent to the sale. The dispositive portion of the
decision reads:
WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor
of the petitioners and against the respondents:
1.Directing respondents Genaro Nolasco and Jeremy Spencer A.
Nolasco to give their consent to the sale of their shares on the subject
properties;
2.Allowing the sale of the aforementioned properties;
35
 3.Directing the petitioners and the co-owners, including the respondents
herein to agree with the price in which the subject properties are to be
sold and to whom to be sold; and
4.Directing the distribution of the proceeds of the sale of the
aforementioned properties in the following proportion:
a.) Rosita V. Vda. De Arambulo -1/9
b.) Primo V. Arambulo -1/9
c.) Maximiano V. Arambulo -1/9
d.) Ana Maria V. Arambulo -1/9
e.) Ma. Lorenza A. Lopez -1/9
f.) Julio V. Arambulo -1/9
g.) Raul V. Arambulo -1/9
h.) Teresita A. dela Cruz -1/9
i.) Genaro Nolasco, Jr. -1/4 of 1/9
j.) Jeremy Spencer A. Nolasco -1/4 of 1/9
k.) Iris Abegail A. Nolasco -1/4 of 1/9
l.) Ingrid Aileen Arambulo -1/4 of 1/97
Going along with petitioners’ reliance on Article 491 of the Civil Code, the trial
court found that respondents’ withholding of their consent to the sale of their
shares is prejudicial to the common interest of the co-owners.
Respondents filed a Notice of Appeal and the trial court gave due course to the
appeal and the entire records of the case were elevated to the Court of Appeals.
In a Decision dated 7 October 2008, the Court of Appeals granted the appeal and
reversed the trial court’s decision. The Court of Appeals held that the
respondents had the full ownership of their undivided interest in the subject
properties, thus, they cannot be compelled to sell their undivided shares in the
properties. It referred to the provisions of Article 493 of the Civil Code.
However, the Court of Appeals, implying applicability of Article 491 also
observed that petitioners failed to show how respondents’ withholding of their
consent would prejudice the common interest over the subject properties.
Hence, the instant petition seeking the reversal of the appellate court’s decision
and praying for the affirmance of the trial court’s decision that ordered
respondents to give their consent to the sale of the subject properties. Petitioners
emphasize that under Article 491 of the Civil Code, they may ask the court to
afford them adequate relief should respondents refuse to sell their respective
shares to the co-owned properties. They refute the appellate court’s finding that
they failed to show how the withholding of consent by respondents becomes
prejudicial to their common interest. Citing the testimony of petitioner Teresita
A. Dela Cruz, they assert that one of the two subject properties has an area of
122 square meters and if they decide to partition, instead of selling the same,
their share would be reduced to a measly 30-square meter lot each. The other
property was testified to as measuring only 111 square meters. Petitioners
reiterate that all the other co- owners are willing to sell the property and give
respondents their share of the proceeds of the sale.
At the core of this petition is whether respondents, as co-owners, can be
compelled by the court to give their consent to the sale of their shares in the co-
owned properties. Until it reached this Court, the discussion of the issue moved
around Article 491 of the Civil Code. We have to remove the issue out of the
coverage of Article 491. It does not apply to the problem arising out of the
proposed sale of the property co-owned by the parties in this case.
The Court of Appeals correctly applied the provision of Article 493 of the Civil
Code, which states:
Art. 493. Each co-owner shall have the full ownership of his part and of the
fruits and benefits pertaining thereto, and he may therefore alienate, assign or
mortgage it, and even substitute another person in its enjoyment, except when
personal rights are involved. But the effect of the alienation or the mortgage,
36
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.
Upon the other hand, Article 491 states:
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.
As intimated above, the erroneous application of Article 491 is, in this case, an
innate infirmity. The very initiatory pleading below was captioned Petition For
Relief Under Article 491 of the New Civil Code. Petitioners, likewise petitioners
before the RTC, filed the case on the submission that Article 491 covers the
petition and grants the relief prayed for, which is to compel the respondent co-
owners to agree to the sale of the co-owned property. The trial court took up all
that petitioners tendered, and it favored the pleading with the finding that:
x x x To this court, the act of respondents of withholding consent to the sale of
the properties is not only prejudicial to the common interest of the co-owners but
is also considered as an alteration within the purview of Article 491 of the New
Civil Code. x x x. Hence, it is deemed just and proper to afford adequate relief to
herein petitioners under Article 491 of the New Civil Code. 8
That a sale constitutes an alteration as mentioned in Article 491 is an established
jurisprudence.1âwphi1 It is settled that alterations include any act of strict
dominion or ownership and any encumbrance or disposition has been held
implicitly to be an act of alteration.9 Alienation of the thing by sale of the
property is an act of strict dominion.10However, the ruling that alienation is
alteration does not mean that a sale of commonly owned real property is covered
by the second paragraph of Article 491, such that if a co- owner withholds
consent to the sale, the courts, upon a showing of a clear prejudice to the
common interest, may, as adequate relief, order the grant of the withheld
consent. Such is the conclusion drawn by the trial court, and hinted at, if not
relied upon, by the appellate court.
Ruling that the trial court erred in its conclusion, the Court of Appeals correctly
relied on Article 493 in support of the finding that respondents cannot be
compelled to agree with the sale. We affirm the reversal by the Court of Appeals
of the judgment of the trial court.
1. There is co-ownership whenever, as in this case, the ownership of an
undivided thing, belongs to different persons.11 Article 493 of the Code defines
the ownership of the co-owner, clearly establishing that each co-owner shall
have full ownership of his part and of its fruits and benefits.
Pertinent to this case, Article 493 dictates that each one of the parties herein as
co-owners with full ownership of their parts can sell their fully owned part. The
sale by the petitioners of their parts shall not affect the full ownership by the
respondents of the part that belongs to them. Their part which petitioners will
sell shall be that which may be apportioned to them in the division upon the
termination of the co-ownership. With the full ownership of the respondents
remaining unaffected by petitioners’ sale of their parts, the nature of the
property, as co-owned, likewise stays. In lieu of the petitioners, their vendees
shall be co-owners with the respondents. The text of Article 493 says so.
2. Our reading of Article 493 as applied to the facts of this case is a reiteration of
what was pronounced in Bailon-Casilao v. Court of Appeals.12 The rights of a
co-owner of a certain property are clearly specified in Article 493 of the Civil
Code. Thus:
Art. 493. Each co-owner shall have the full ownership of his part and of the
fruits and benefits pertaining thereto, and he may therefore alienate, assign or
mortgage it[,] and even substitute another person in its enjoyment, except when
personal rights are involved. But the effect of the alienation or [the] mortgage,
with respect to the co-owners, shall be limited to the portion which may be
allotted to him in the division upon the termination of the co-ownership.
As early as 1923, this Court has ruled that even if a co-owner sells the whole
property as his, the sale will affect only his own share but not those of the other
co-owners who did not consent to the sale.13 This is because under the
aforementioned codal provision, the sale or other disposition affects only his
undivided share and the transferee gets only what would correspond to his
grantor in the partition of the thing owned in common. 14 Consequently, by virtue
of the sales made by Rosalia and Gaudencio Bailon which are valid with respect
to their proportionate shares, and the subsequent transfers which culminated in
the sale to private respondent Celestino Afable, the said Afable thereby became
37
a co- owner of the disputed parcel of land as correctly held by the lower court
since the sales produced the effect of substituting the buyers in the enjoyment
thereof.15
From the foregoing, it may be deduced that since a co-owner is entitled to sell
his undivided share, a sale of the entire property by one co- owner without the
consent of the other co-owners is not null and void. However, only the rights of
the co-owner-seller are transferred, thereby making the buyer a co-owner of the
property.16 (Italics theirs).
Nearer to the dispute at hand are the pronouncements in the 1944 case of Lopez
v. Vda. De Cuaycong.17 Citing Manresa on Article 399 which is the present
Article 493 of the Civil Code, the Court said:
x x x Article 399 shows the essential integrity of the right of each co-owner in
the mental portion which belongs to him in the ownership or community.
xxxx
To be a co-owner of a property does not mean that one is deprived of every
recognition of the disposal of the thing, of the free use of his right within the
circumstantial conditions of such judicial status, nor is it necessary, for the use
and enjoyment, or the right of free disposal, that the previous consent of all the
interested parties be obtained.18(Underscoring supplied).
The Court in Lopez further cited Scaevola:
2nd. Absolute right of each co-owner with respect to his part or share. – With
respect to the latter, each co-owner is the same as an individual owner. He is a
singular owner, with all the rights inherent in such condition. The share of the
co-owner, that is, the part which ideally belongs to him in the common thing or
right and is represented by a certain quantity, is his and he may dispose of the
same as he pleases, because it does not affect the right of the others. Such
quantity is equivalent to a credit against the common thing or right and is the
private property of each creditor (co-owner). The various shares ideally signify
as many units of thing or right, pertaining individually to the different owners; in
other words, a unit for each owner.19 (Underscoring supplied).
The ultimate authorities in civil law, recognized as such by the Court, agree that
co-owners such as respondents have over their part, the right of full and absolute
ownership. Such right is the same as that of individual owners which is not
diminished by the fact that the entire property is co- owned with others. That
part which ideally belongs to them, or their mental portion, may be disposed of
as they please, independent of the decision of their co-owners. So we rule in this
case. The respondents cannot be ordered to sell their portion of the co-owned
properties. In the language of Rodriguez v. Court of First Instance of
Rizal,20 "each party is the sole judge of what is good for him." 21
3. Indeed, the respected commentaries suggest the conclusion that, insofar as the
sale of co-owned properties is concerned, there is no common interest that may
be prejudiced should one or more of the co-owners refuse to sell the co-owned
property, which is exactly the factual situation in this case. When respondents
disagreed to the sale, they merely asserted their individual ownership rights.
Without unanimity, there is no common interest.
Petitioners who project themselves as prejudiced co-owners may bring a suit for
partition, which is one of the modes of extinguishing co- ownership. Article 494
of the Civil Code provides that no co-owner shall be obliged to remain in the co-
ownership, and that each co-owner may demand at any time partition of the
thing owned in common insofar as his share is concerned. Corollary to this rule,
Article 498 of the Civil Code states that whenever the thing is essentially
indivisible and the co-owners cannot agree that it be allotted to one of them who
shall indemnify the others, it shall be sold and its proceeds accordingly
distributed. This is resorted to (a) when the right to partition the property is
invoked by any of the co-owners but because of the nature of the property, it
cannot be subdivided or its subdivision would prejudice the interests of the co-
owners, and (b) the co- owners are not in agreement as to who among them shall
be allotted or assigned the entire property upon proper reimbursement of the co-
owners.22 This is the result obviously aimed at by petitioners at the outset. As
already shown, this cannot be done while the co-ownership exists.
Essentially, a partition proceeding accords all parties the opportunity to be
heard, the denial of which was raised as a defense by respondents for opposing
the sale of the subject properties.
The necessity of partition could not be more emphasized than in
38
Rodriguez v. Court of First Instance of Rizal,23 to wit:
x x x That this recourse would entail considerable time, trouble and expense,
unwarranted by the value of the property from the standpoint of the
[respondents], is no legal justification for the apportionment of the property not
agreeable to any of the co-owners. Disagreements and differences impossible of
adjustment by the parties themselves are bound to arise, and it is precisely with
such contingency in view that the law on partition was evolved. 24
WHEREFORE, based on the foregoing, the petition is DENIED without
prejudice to the filing of an action for partition. The Decision of the Court of
Appeals in CA-G.R. CV No. 76449 is AFFIRMED. SO ORDERED.
G.R. No. 210252 June 16, 2014
VILMA QUINTOS, represented by her Attorney-in-Fact FIDEL I.
QUINTOS, JR.; FLORENCIA I. DANCEL, represented by her Attorney-
in-Fact FLOVY I. DANCEL; and CATALINO L. IBARRA, Petitioners,
vs.
PELAGIA I. NICOLAS, NOLI L. IBARRA, SANTIAGO L. IBARRA,
PEDRO L. IBARRA, DAVID L. IBARRA, GILBERTO L. IBARRA,
HEIRS OF AUGUSTO L. IBARRA, namely CONCHITA R., IBARRA,
APOLONIO IBARRA, and NARCISO IBARRA, and the spouses RECTO
CANDELARIO and ROSEMARIE CANDELARIO,Respondents.
The Case
Before the Court is a Petition for Review on Certiorari filed under Rule 45
challenging the Decision1 and Resolution2of the Court of Appeals (CA) in CA-
G.R. CV No. 98919 dated July 8, 2013 and November 22, 2013, respectively.
The challenged rulings affirmed the May 7, 2012 Decision3 of the Regional Trial
Court (RTC), Branch 68 in Camiling, Tarlac that petitioners and respondents are
co-owners of the subject property, which should be partitioned as per the
subdivision plan submitted by respondent spouses Recto and Rosemarie
Candelario.
The Facts
As culled from the records, the facts of the case are as follows:
Petitioners Vilma Quintos, Florencia Dancel, and Catalino Ibarra, and
respondents Pelagia Nicolas, Noli Ibarra, Santiago Ibarra, Pedro Ibarra, David
Ibarra, Gilberto Ibarra, and the late Augusto Ibarra are siblings. Their parents,
Bienvenido and Escolastica Ibarra, were the owners of the subject property, a
281 sqm. parcel of land situated along Quezon Ave., Poblacion C, Camiling,
Tarlac, covered by Transfer Certificate Title (TCT) No. 318717.
By 1999, both Bienvenido and Escolastica had already passed away, leaving to
their ten (10) children ownership over the subject property. Subsequently,
sometime in 2002, respondent siblings brought an action for partition against
petitioners. The case was docketed as Civil Case No. 02-52 and was raffled to
the RTC, Branch 68, Camiling, Tarlac. However, in an Order 4 dated March 22,
2004, the trial court dismissed the case disposing as follows:
For failure of the parties, as well as their counsels, to appear despite due notice,
this case is hereby DISMISSED.
SO ORDERED.
As neither set of parties appealed, the ruling of the trial court became final, as
evidenced by a Certificate of Finality5it eventually issued on August 22, 2008.
Having failed to secure a favorable decision for partition, respondent siblings
instead resorted to executing a Deed of Adjudication6 on September 21, 2004 to
transfer the property in favor of the ten (10) siblings. As a result, TCT No.
318717 was canceled and in lieu thereof, TCT No. 390484 was issued in its
place by the Registry of Deeds of Tarlac in the names of the ten (10) heirs of the
Ibarra spouses.
Subsequently, respondent siblings sold their 7/10 undivided share over the
property in favor of their co-respondents, the spouses Recto and Rosemarie
Candelario. By virtue of a Deed of Absolute Sale7 dated April 17, 2007 executed
in favor of the spouses Candelario and an Agreement of
Subdivision8 purportedly executed by them and petitioners, TCT No. 390484
was partially canceled and TCT No. 434304 was issued in the name of the
Candelarios, covering the 7/10portion.
39
On June 1, 2009, petitioners filed a complaint for Quieting of Title and Damages
against respondents wherein they alleged that during their parents’ lifetime, the
couple distributed their real and personal properties in favor of their ten (10)
children. Upon distribution, petitioners alleged that they received the subject
property and the house constructed thereon as their share. They likewise averred
that they have been in adverse, open, continuous, and uninterrupted possession
of the property for over four (4) decades and are, thus, entitled to equitable title
thereto. They also deny any participation in the execution of the aforementioned
Deed of Adjudication dated September 21, 2004 and the Agreement of
Subdivision. Respondents countered that petitioners’ cause of action was already
barred by estoppel when sometime in 2006, one of petitioners offered to buy the
7/10 undivided share of the respondent siblings. They point out that this is an
admission on the part of petitioners that the property is not entirely theirs. In
addition, they claimed that Bienvenido and Escolastica Ibarra mortgaged the
property but because of financial constraints, respondent spouses Candelario had
to redeem the property in their behalf. Not having been repaid by Bienvenido
and Escolastica, the Candelarios accepted from their co-respondents their share
in the subject property as payment. Lastly, respondents sought, by way of
counterclaim, the partition of the property.
Docketed as Civil Case No. 09-15 of the RTC of Camiling, Tarlac, the quieting
of title case was eventually raffled to Branch 68 of the court, the same trial court
that dismissed Civil Case No. 02-52. During pre-trial, respondents, or
defendants a quo, admitted having filed an action for partition, that petitioners
did not participate in the Deed of Adjudication that served as the basis for the
issuance of TCT No. 390484, and that the Agreement of Subdivision that led to
the issuance of TCT No. 434304 in favor of respondent spouses Candelario was
falsified.9 Despite the admissions of respondents, however, the RTC, through its
May 27, 2012 Decision, dismissed petitioners’ complaint. The court did not find
merit in petitioners’ asseverations that they have acquired title over the property
through acquisitive prescription and noted that there was no document
evidencing that their parents bequeathed to them the subject property. Finding
that respondent siblings were entitled to their respective shares in the property as
descendants of Bienvenido and Escolastica Ibarra and as co-heirs of petitioners,
the subsequent transfer of their interest in favor of respondent spouses
Candelario was then upheld by the trial court. The dispositive portion of the
Decision reads:
WHEREFORE, premises considered, the above-entitled case is hereby
Dismissed.
Also, defendants-spouses Rosemarie Candelario and Recto Candelario are
hereby declared as the absolute owners of the 7/10 portion of the subject lot.
Likewise, the court hereby orders the partition of the subject lots between the
herein plaintiffs and the defendants-spouses Candelarios.
SO ORDERED.
Aggrieved, petitioners appealed the trial court’s Decision to the CA, pleading
the same allegations they averred in their underlying complaint for quieting of
title. However, they added that the partition should no longer be allowed since it
is already barred by res judicata, respondent siblings having already filed a case
for partition that was dismissed with finality, as admitted by respondents
themselves during pre-trial.
On July 8, 2013, the CA issued the assailed Decision denying the appeal. The
fallo reads: WHEREFORE, premises considered, the Decision dated May 7,
2012 of the Regional Trial Court of Camiling, Tarlac, Branch 68, in Civil Case
No. 09-15, is hereby AFFIRMED.
SO ORDERED.
Similar to the trial court, the court a quo found no evidence on record to support
petitioners’ claim that the subject property was specifically bequeathed by
Bienvenido and Escolastica Ibarra in their favor as their share in their parents’
estate. It also did not consider petitioners’ possession of the property as one that
is in the concept of an owner. Ultimately, the appellate court upheld the finding
that petitioners and respondent spouses Candelario co-own the property, 30-70
in favor of the respondent spouses.
As regards the issue of partition, the CA added:
x x x Since it was conceded that the subject lot is now co-owned by the
plaintiffs-appellants, (with 3/10 undivided interest) and defendants-appellees
Spouses Candelarios (with 7/10 undivided interest) and considering that
plaintiffs-appellants had already constructed a 3-storey building at the back
portion of the property, then partition, in accordance with the subdivision plan
(records, p. 378) undertaken by defendants-appellants [sic] spouses, is in order.10
40
On November 22, 2013, petitioners’ Motion for Reconsideration was denied.
Hence, the instant petition.
Issues
In the present petition, the following errors were raised:
I. THE COURT OF APPEALS MANIFESTLY OVERLOOKED
RELEVANT AND UNDISPUTED FACTS WHICH, IF PROPERLY
CONSIDERED, WOULD JUSTIFY PETITIONERS’ CLAIM OF
EQUITABLE TITLE.
II. THE COURT OF APPEALS ERRED WHEN IT AFFIRMED THE
ORDER OF PARTITION DESPITE THE FACT THAT THE
COUNTERCLAIM FOR PARTITION, BASED ON THE DEED OF
ABSOLUTE SALE EXECUTED IN 2007, IS BARRED BY LACHES.
III. THE COURT OF APPEALS RENDERED A SUBSTANTIALLY
FLAWED JUDGMENT WHEN IT NEGLECTED TO RULE ON
PETITIONERS’ CONTENTION THAT THE COUNTERCLAIM
FOR PARTITION IS ALSO BARRED BY PRIOR JUDGMENT,
DESPITE ITS HAVING BEEN SPECIFICALLY ASSIGNED AS
ERROR AND PROPERLY ARGUED IN THEIR BRIEF, AND
WHICH, IF PROPERLY CONSIDERED, WOULD JUSTIFY THE
DISMISSAL OF THE COUNTERCLAIM.
IV. THE COURT OF APPEALS ERRED WHEN IT ORDERED
PARTITION IN ACCORDANCE WITH THE SUBDIVISION PLAN
MENTIONED IN ITS DECISION, IN CONTRAVENTION OF THE
PROCEDURE ESTABLISHED IN RULE 69 OF THE RULES OF
CIVIL PROCEDURE.11
To simplify, the pertinent issues in this case are as follows:
1. Whether or not the petitioners were able to prove ownership over the
property;
2. Whether or not the respondents’ counterclaim for partition is already
barred by laches or res judicata; and
3. Whether or not the CA was correct in approving the subdivision
agreement as basis for the partition of the property.
The Court’s Ruling
The petition is meritorious in part.
Petitioners were not able to prove equitable title or ownership over the property
Quieting of title is a common law remedy for the removal of any cloud, doubt,
or uncertainty affecting title to real property.12 For an action to quiet title to
prosper, two indispensable requisites must concur, namely: (1) the plaintiff or
complainant has a legal or equitable title to or interest in the real property
subject of the action; and (2) the deed, claim, encumbrance, or proceeding
claimed to be casting cloud on the title must be shown to be in fact invalid or
inoperative despite its prima facie appearance of validity or efficacy. 13 In the
case at bar, the CA correctly observed that petitioners’ cause of action must
necessarily fail mainly in view of the absence of the first requisite.
At the outset, it must be emphasized that the determination of whether or not
petitioners sufficiently proved their claim of ownership or equitable title is
substantially a factual issue that is generally improper for Us to delve into.
Section 1, Rule 45 of the Rules of Court explicitly states that the petition for
review on certiorari "shall raise only questions of law, which must be distinctly
set forth." In appeals by certiorari, therefore, only questions of law may be
raised, because this Court is not a trier of facts and does not normally undertake
the re-examination of the evidence presented by the contending parties during
the trial.14 Although there are exceptions15 to this general rule as eloquently
enunciated in jurisprudence, none of the circumstances calling for their
application obtains in the case at bar. Thus, We are constrained to respect and
uphold the findings of fact arrived at by both the RTC and the CA.
In any event, a perusal of the records would readily show that petitioners, as
aptly observed by the courts below, indeed, failed to substantiate their claim.
Their alleged open, continuous, exclusive, and uninterrupted possession of the
subject property is belied by the fact that respondent siblings, in 2005, entered
41
into a Contract of Lease with the Avico Lending Investor Co. over the subject
lot without any objection from the petitioners.16 Petitioners’ inability to offer
evidence tending to prove that Bienvenido and Escolastica Ibarra transferred the
ownership over the property in favor of petitioners is likewise fatal to the latter’s
claim. On the contrary, on May 28, 1998, Escolastica Ibarra executed a Deed of
Sale covering half of the subject property in favor of all her 10 children, not in
favor of petitioners alone.17
The cardinal rule is that bare allegation of title does not suffice. The burden of
proof is on the plaintiff to establish his or her case by preponderance of
evidence.18 Regrettably, petitioners, as such plaintiff, in this case failed to
discharge the said burden imposed upon them in proving legal or equitable title
over the parcel of land in issue. As such, there is no reason to disturb the finding
of the RTC that all 10 siblings inherited the subject property from Bienvenido
and Escolastica Ibarra, and after the respondent siblings sold their aliquot share
to the spouses Candelario, petitioners and respondent spouses became co-owners
of the same.
The counterclaim for partition is not barred by prior judgment
This brings us to the issue of partition as raised by respondents in their
counterclaim. In their answer to the counterclaim, petitioners countered that the
action for partition has already been barred by res judicata.
The doctrine of res judicata provides that the judgment in a first case is final as
to the claim or demand in controversy, between the parties and those privy with
them, not only as to every matter which was offered and received to sustain or
defeat the claim or demand, but as to any other admissible matter which must
have been offered for that purpose and all matters that could have been adjudged
in that case.19 It precludes parties from relitigating issues actually litigated and
determined by a prior and final judgment.20 As held in Yusingco v. Ong Hing
Lian:21
It is a rule pervading every well-regulated system of jurisprudence, and is put
upon two grounds embodied in various maxims of the common law; the one,
public policy and necessity, which makes it to the interest of the state that there
should be an end to litigation — republicae ut sit finis litium; the other, the
hardship on the individual that he should be vexed twice for the same cause —
nemo debet bis vexari et eadem causa. A contrary doctrine would subject the
public peace and quiet to the will and neglect of individuals and prefer the
gratitude identification of a litigious disposition on the part of suitors to the
preservation of the public tranquility and happiness.22
The rationale for this principle is that a party should not be vexed twice
concerning the same cause. Indeed, res judicata is a fundamental concept in the
organization of every jural society, for not only does it ward off endless
litigation, it ensures the stability of judgment and guards against inconsistent
decisions on the same set of facts.23
There is res judicata when the following requisites are present: (1) the formal
judgment or order must be final; (2) it must be a judgment or order on the
merits, that is, it was rendered after a consideration of the evidence or
stipulations submitted by the parties at the trial of the case; (3) it must have been
rendered by a court having jurisdiction over the subject matter and the parties;
and (4) there must be, between the first and second actions, identity of parties, of
subject matter and of cause of action.24
In the case at bar, respondent siblings admit that they filed an action for partition
docketed as Civil Case No. 02-52, which the RTC dismissed through an Order
dated March 22, 2004 for the failure of the parties to attend the scheduled
hearings. Respondents likewise admitted that since they no longer appealed the
dismissal, the ruling attained finality. Moreover, it cannot be disputed that the
subject property in Civil Case No. 02-52 and in the present controversy are one
and the same, and that in both cases, respondents raise the same action for
partition. And lastly, although respondent spouses Candelario were not party-
litigants in the earlier case for partition, there is identity of parties not only when
the parties in the case are the same, but also between those in privity with them,
such as between their successors-in-interest.25
With all the other elements present, what is left to be determined now is whether
or not the dismissal of Civil case No. 02-52 operated as a dismissal on the merits
that would complete the requirements of res judicata.
In advancing their claim, petitioners cite Rule 17, Sec. 3 of the Rules of Court,
to wit:
Section 3. Dismissal due to fault of plaintiff. — If, for no justifiable cause, the
plaintiff fails to appear on the date of the presentation of his evidence in chief on
42
the complaint, or to prosecute his action for an unreasonable length of time, or to
comply with these Rules or any order of the court, the complaint may be
dismissed upon motion of the defendant or upon the court’s own motion,
without prejudice to the right of the defendant to prosecute his counterclaim in
the same or in a separate action. This dismissal shall have the effect of an
adjudication upon the merits, unless otherwise declared by the court.
The afore-quoted provision enumerates the instances when a complaint may be
dismissed due to the plaintiff's fault: (1) if he fails to appear on the date for the
presentation of his evidence in chief on the complaint; (2) if he fails to prosecute
his action for an unreasonable length of time; or (3) if he fails to comply with
the Rules or any order of the court. The dismissal of a case for failure to
prosecute has the effect of adjudication on the merits, and is necessarily
understood to be with prejudice to the filing of another action, unless otherwise
provided in the order of dismissal. Stated differently, the general rule is that
dismissal of a case for failure to prosecute is to be regarded as an adjudication
on the merits and with prejudice to the filing of another action, and the only
exception is when the order of dismissal expressly contains a qualification that
the dismissal is without prejudice.26 In the case at bar, petitioners claim that the
Order does not in any language say that the dismissal is without prejudice and,
thus, the requirement that the dismissal be on the merits is present.
Truly, We have had the occasion to rule that dismissal with prejudice under the
above-cited rule amply satisfies one of the elements of res judicata.27 It is, thus,
understandable why petitioners would allege res judicata to bolster their claim.
However, dismissal with prejudice under Rule 17, Sec. 3 of the Rules of Court
cannot defeat the right of a co-owner to ask for partition at any time, provided
that there is no actual adjudication of ownership of shares yet. Pertinent hereto is
Article 494 of the Civil Code, which reads:
Article 494. No co-owner shall be obliged to remain in the co-ownership. Each
co-owner may demand at any time the partition of the thing owned in common,
insofar as his share is concerned.
Nevertheless, an agreement to keep the thing undivided for a certain period of
time, not exceeding ten years, shall be valid. This term may be extended by a
new agreement.
A donor or testator may prohibit partition for a period which shall not exceed
twenty years. Neither shall there be any partition when it is prohibited by law.
No prescription shall run in favor of a co-owner or co-heir against his co-owners
or co-heirs so long as he expressly or impliedly recognizes the co-ownership.
(emphasis supplied)
From the above-quoted provision, it can be gleaned that the law generally does
not favor the retention of co-ownership as a property relation, and is interested
instead in ascertaining the co-owners’ specific shares so as to prevent the
allocation of portions to remain perpetually in limbo. Thus, the law provides that
each co-owner may demand at any time the partition of the thing owned in
common.
Between dismissal with prejudice under Rule 17, Sec. 3 and the right granted to
co-owners under Art. 494 of the Civil Code, the latter must prevail. To construe
otherwise would diminish the substantive right of a co-owner through the
promulgation of procedural rules. Such a construction is not sanctioned by the
principle, which is too well settled to require citation, that a substantive law
cannot be amended by a procedural rule.28 This further finds support in Art. 496
of the New Civil Code, viz:
Article 496.Partition may be made by agreement between the parties or by
judicial proceedings.1âwphi1 Partition shall be governed by the Rules of Court
insofar as they are consistent with this Code.
Thus, for the Rules to be consistent with statutory provisions, We hold that Art.
494, as cited, is an exception to Rule 17, Sec. 3 of the Rules of Court to the
effect that even if the order of dismissal for failure to prosecute is silent on
whether or not it is with prejudice, it shall be deemed to be without prejudice.
This is not to say, however, that the action for partition will never be barred by
res judicata. There can still be res judicata in partition cases concerning the same
parties and the same subject matter once the respective shares of the co-owners
have been determined with finality by a competent court with jurisdiction or if
the court determines that partition is improper for co-ownership does not or no
longer exists.
So it was that in Rizal v. Naredo,29 We ruled in the following wise:
43
Article 484 of the New Civil Code provides that there is co-ownership whenever
the ownership of an undivided thing or right belongs to different persons. Thus,
on the one hand, a co-owner of an undivided parcel of land is an owner of the
whole, and over the whole he exercises the right of dominion, but he is at the
same time the owner of a portion which is truly abstract. On the other hand,
there is no co-ownership when the different portions owned by different people
are already concretely determined and separately identifiable, even if not yet
technically described.
Pursuant to Article 494 of the Civil Code, no co-owner is obliged to remain in
the co-ownership, and his proper remedy is an action for partition under Rule 69
of the Rules of Court, which he may bring at anytime in so far as his share is
concerned. Article 1079 of the Civil Code defines partition as the separation,
division and assignment of a thing held in common among those to whom it may
belong. It has been held that the fact that the agreement of partition lacks the
technical description of the parties’ respective portions or that the subject
property was then still embraced by the same certificate of title could not legally
prevent a partition, where the different portions allotted to each were determined
and became separately identifiable.
The partition of Lot No. 252 was the result of the approved Compromise
Agreement in Civil Case No. 36-C, which was immediately final and executory.
Absent any showing that said Compromise Agreement was vitiated by fraud,
mistake or duress, the court cannot set aside a judgment based on compromise. It
is axiomatic that a compromise agreement once approved by the court settles the
rights of the parties and has the force of res judicata. It cannot be disturbed
except on the ground of vice of consent or forgery.
Of equal significance is the fact that the compromise judgment in Civil Case No.
36-C settled as well the question of which specific portions of Lot No. 252
accrued to the parties separately as their proportionate shares therein. Through
their subdivision survey plan, marked as Annex "A" of the Compromise
Agreement and made an integral part thereof, the parties segregated and
separately assigned to themselves distinct portions of Lot No. 252. The partition
was immediately executory, having been accomplished and completed on
December 1, 1971 when judgment was rendered approving the same. The CA
was correct when it stated that no co-ownership exist when the different portions
owned by different people are already concretely determined and separately
identifiable, even if not yet technically described. (emphasis supplied)
In the quoted case, We have held that res judicata applied because after the
parties executed a compromise agreement that was duly approved by the court,
the different portions of the owners have already been ascertained. Thus, there
was no longer a co-ownership and there was nothing left to partition. This is in
contrast with the case at bar wherein the co-ownership, as determined by the
trial court, is still subsisting 30-70 in favor of respondent spouses Candelario.
Consequently, there is no legal bar preventing herein respondents from praying
for the partition of the property through counterclaim.
The counterclaim for partition is not barred by laches
We now proceed to petitioners’ second line of attack. According to petitioners,
the claim for partition is already barred by laches since by 1999, both
Bienvenido and Escolastica Ibarra had already died and yet the respondent
siblings only belatedly filed the action for partition, Civil Case No. 02-52, in
2002. And since laches has allegedly already set in against respondent siblings,
so too should respondent spouses Candelario be barred from claiming the same
for they could not have acquired a better right than their predecessors-in-interest.
The argument fails to persuade.
Laches is the failure or neglect, for an unreasonable and unexplained length of
time, to do that which––by the exercise of due diligence––could or should have
been done earlier. It is the negligence or omission to assert a right within a
reasonable period, warranting the presumption that the party entitled to assert it
has either abandoned or declined to assert it.30 The principle is a creation of
equity which, as such, is applied not really to penalize neglect or sleeping upon
one’s right, but rather to avoid recognizing a right when to do so would result in
a clearly inequitable situation. As an equitable defense, laches does not concern
itself with the character of the petitioners’ title, but only with whether or not by
reason of the respondents’ long inaction or inexcusable neglect, they should be
barred from asserting this claim at all, because to allow them to do so would be
inequitable and unjust to petitioners.31
As correctly appreciated by the lower courts, respondents cannot be said to have
neglected to assert their right over the subject property. They cannot be
considered to have abandoned their right given that they filed an action for
partition sometime in 2002, even though it was later dismissed. Furthermore, the
fact that respondent siblings entered into a Contract of Lease with Avico
44
Lending Investor Co. over the subject property is evidence that they are
exercising rights of ownership over the same.
The CA erred in approving the Agreement for Subdivision
There is merit, however, in petitioners’ contention that the CA erred in
approving the proposal for partition submitted by respondent spouses. Art. 496,
as earlier cited, provides that partition shall either be by agreement of the parties
or in accordance with the Rules of Court. In this case, the Agreement of
Subdivision allegedly executed by respondent spouses Candelario and
petitioners cannot serve as basis for partition, for, as stated in the pre-trial order,
herein respondents admitted that the agreement was a falsity and that petitioners
never took part in preparing the same. The "agreement" was crafted without any
consultation whatsoever or any attempt to arrive at mutually acceptable terms
with petitioners. It, therefore, lacked the essential requisite of consent. Thus, to
approve the agreement in spite of this fact would be tantamount to allowing
respondent spouses to divide unilaterally the property among the co-owners
based on their own whims and caprices. Such a result could not be
countenanced.
To rectify this with dispatch, the case must be remanded to the court of origin,
which shall proceed to partition the property in accordance with the procedure
outlined in Rule 69 of the Rules of Court.
WHEREFORE, premises considered, the petition is hereby PARTLY
GRANTED. The assailed Decision and Resolution of the Court of Appeals in
CA-G.R. CV No. 98919 dated July 8, 2013 and November 22, 2013,
respectively, are hereby AFFIRMED with MODIFICATION. The case is hereby
REMANDED to the RTC, Branch 68 in Camiling, Tarlac for purposes of
partitioning the subject property in accordance with Rule 69 of the Rules of
Court. SO ORDERED.
[G.R. No. 205705. August 5, 2015.]
DOMINADOR M. APIQUE, petitioner, vs. EVANGELINE
APIQUE FAHNENSTICH, respondent.
Assailed in this petition for review on certiorari 1 are the
Decision 2 dated July 31, 2012 and the Resolution 3 dated January 17, 2013
of the Court of Appeals, Cagayan de Oro City (CA) in CA-G.R. CV No.
00740-MIN, which set aside the Decision 4 dated January 25, 2006 of the
Regional Trial Court of Davao City, Branch 16 (RTC) dismissing Civil
Case No. 29,122-02 and, instead, ordered petitioner Dominador M. Apique
(Dominador) to return to respondent Evangeline Apique Fahnenstich
(Evangeline) the amount of P980,000.00, plus six percent (6%) interest per
annum (p.a.) reckoned from the filing of the complaint up to the finality of
the decision and, thereafter, twelve percent (12%) interest p.a. on the total
amount demanded until its full satisfaction.
The Facts
Dominador and Evangeline are siblings who used to live with their
parents at Babak, Island Garden City of Samal, Davao, until Evangeline left
for Germany to work sometime in 1979. 5 On August 2, 1995, Evangeline
executed-General 6 and Special Powers of Attorney 7 constituting
Dominador as her attorney-in-fact to purchase real property for her, and to
manage or supervise her business affairs in the Philippines. 8
As Evangeline was always in Germany, she opened a joint savings
account on January 18, 1999 with Dominador at the Claveria Branch of the
Philippine Commercial International Bank (PCI Bank) in Davao City,
which later became Equitable PCI Bank (EPCIB), and now Banco de Oro,
under Savings Account No. 1189-02819-5 (subject account). 9
On February 11, 2002, Dominador withdrew the amount of
P980,000.00 from the subject account and, thereafter, deposited the money
to his own savings account with the same bank, under Savings Account No.
1189-00781-3. It was only on February 23, 2003 that Evangeline learned of
such withdrawal from the manager of EPCIB. Evangeline then had the
passbook updated, which reflected the said withdrawal. She likewise
discovered that Dominador had deposited the amount withdrawn to his own
account with the same bank and that he had withdrawn various amounts
from the said account. 10
Evangeline demanded the return of the amount withdrawn from the
joint account, but to no avail. Hence, she filed a complaint 11 for sum of
money, damages, and attorney's fees, with prayer for preliminary mandatory
and prohibitory injunction and temporary restraining order (TRO) against
Dominador before the RTC, docketed as Civil Case No. 29,122-02,
impleading EPCIB as a party defendant.
45
 In her complaint, 12 Evangeline claimed to be the sole owner of
the money deposited in the subject account, and that Dominador has no
authority to withdraw the same. On the other hand, she alleged that EPCIB
violated its banking rules when it allowed the withdrawal without the
presentation of the passbook. She also prayed for a TRO to enjoin EPCIB
from allowing any withdrawal from the subject account, which was granted
by the Executive Judge on May 7, 2002. 13
In his answer, 14 Dominador asserted, among others, that he was
authorized to withdraw funds from the subject account to answer for the
expenses of Evangeline's projects, considering: (a) that it was a joint
account, and (b) the general and special powers of attorney executed by
Evangeline in his favor. By way of counterclaim, he sought payment of
moral and exemplary damages, attorney's fees, litigation expenses, and costs
of suit. EPCIB, for its part, denied having violated its own banking rules
and regulations, contending that the account in question was an "OR"
account such that any of the account holders may transact without the
signature of the other. It also pointed out that "no passbook" transactions
were allowed if the following could be verified, namely: (a) technicalities of
documents, (b) identity of payee, (c) authenticity of signature/s,
and (d) sufficiency of funds. 15 In the course of the proceedings,
Evangeline and EPCIB filed a joint motion to drop the latter as party
defendant, which the RTC granted in an Order 16 dated April 5, 2004. 17
During the trial, Dominador claimed that the money withdrawn
from the subject account belonged to him, explaining that he had
contributed an initial deposit of P100,000.00 18 and that Evangeline's
common-law husband, Holgar Schwarzfeller (Holgar), had also deposited a
total amount of P900,000.00 19 pursuant to the latter's verbal promise to
compensate him for his services as administrator/manager of the couple's
business and properties in the amount of P1,000,000.00, 20 which his sister,
Marietta Apique (Marietta), corroborated. 21
The RTC Ruling
In a Decision 22 dated January 25, 2006, the RTC ruled in favor of
Dominador and dismissed the complaint. It held that Dominador may
validly withdraw money from the subject account even without
Evangeline's consent, considering that: (a) it was a joint "OR" account,
and (b) the reason for the withdrawal, i.e., as compensation for his services
as administrator of the business affairs of Evangeline. As such, it declared
the February 11, 2002 withdrawal in the amount of P980,000.00 to be a
valid transaction. However, it dismissed Dominador's counterclaims for
failure to show that Evangeline acted with bad faith in filing the complaint.
Aggrieved, Evangeline filed an appeal before the CA. 23
The CA Ruling
In a Decision 24 dated July 31, 2012, the CA reversed and set aside
the RTC's ruling and, instead, ordered Dominador to return to Evangeline
the amount of P980,000.00, plus interest at six percent (6%) p.a. reckoned
from the filing of the complaint up to the finality of the decision and,
thereafter, an additional twelve percent (12%) p.a. interest on the total
amount demanded until its full satisfaction.
The CA found that Evangeline was able to establish her case by
preponderance of evidence. 25 In so ruling, it held that since the subject
account is a joint "OR" account, and as such, Dominador is not required to
present any authorization from his co-depositor every time he transacts with
the bank, nonetheless, the nature of the said account did not give him
unbridled license to withdraw any amount any time he wants, noting that his
authority to withdraw was still subject to Evangeline's prior approval
considering the purpose for which the account was opened. 26 It rejected
Dominador's claim that the money in the subject account, or at least half of
it, belonged to Holgar, and that the amount withdrawn was part of the
compensation promised by the latter, for being bare, self-serving, and
unsubstantiated allegations. 27
Dominador moved for reconsideration 28 but the same was denied
in a Resolution 29 dated January 17, 2013; hence, this petition.
The Issue Before the Court
The essential issue for the Court's resolution is whether or not
Evangeline is entitled to the return of the amount of P980,000.00
Dominador withdrew from their joint savings account with EPCIB, plus
legal interest thereon.
The Court's Ruling
The petition is partly meritorious.
At the outset, the Court notes that the arguments raised herein
necessarily require a reevaluation of the parties' submissions and the CA's
factual findings, which is generally proscribed in a petition for review
on certiorari because: (a) a Rule 45 petition resolves only questions of law,
46
not questions of fact; and (b) factual findings of the CA are generally
conclusive on the parties and are, therefore, not reviewable by this Court.
By way of exception, however, the Court resolves factual issues when the
findings of the RTC differ from those of the CA, 30 as in this case.
A joint account is one that is held jointly by two or more natural
persons, or by two or more juridical persons or entities. 31 Under such
setup, the depositors are joint owners or co-owners of the said
account, 32 and their share in the deposits shall be presumed equal, unless
the contrary is proved, pursuant to Article 485 of the Civil Code, which
provides:
Art. 485. The share of the co-owners, in the
benefits as well as in the charges, shall be proportional to
their respective interests. Any stipulation in a contract to
the contrary shall be void.
The portions belonging to the co-owners in the
co-ownership shall be presumed equal, unless the
contrary is proved. (Emphasis supplied)
The common banking practice is that regardless of who puts the
money into the account, each of the named account holder has an undivided
right to the entire balance, 33 and any of them may deposit and/or withdraw,
partially or wholly, the funds without the need or consent of the
other, 34 during their lifetime. 35 Nevertheless, as between the account
holders, their right against each other may depend on what they have agreed
upon, and the purpose for which the account was opened and how it will be
operated. 36
In this case, there is no dispute that the account opened by
Evangeline and Dominador under Savings Account No. 1189-02819-5 with
EPCIB was a joint "OR" account. It is also admitted that: (a) the account
was opened for a specific purpose, i.e., to facilitate the transfer of needed
funds for Evangeline's business projects; 37 and (b) Dominador may
withdraw funds therefrom "if" 38 there is a need to meet Evangeline's
financial obligations arising from said projects. 39 Hence, while Dominador
is a co-owner of the subject account as far as the bank is concerned — and
may, thus, validly deposit and/or withdraw funds without the consent of his
co-depositor, Evangeline — as between him and Evangeline, his authority
to withdraw, as well as the amount to be withdrawn, is circumscribed
by the purpose for which the subject account was opened.
Under the foregoing circumstances, Dominador's right to obtain
funds from the subject account was, thus, conditioned on the necessity of
funds for Evangeline's projects. Admittedly, at the time he withdrew the
amount of P980,000.00 from the subject account, there was no project being
undertaken for Evangeline. 40 Moreover, his claim that the said amount
belonged to him, as part of the compensation promised by Holgar for his
services as administrator of the business affairs of Evangeline, was correctly
rejected by the CA, 41 considering the dearth of competent evidence
showing that Holgar:(a) undertook to pay Dominador the amount of
P1,000,000.00 for his services as administrator of Evangeline's various
projects; and (b) remitted such amount to the subject account for the benefit
of Dominador. Having failed to justify his right over the amount withdrawn,
Dominador is liable for its return, as correctly adjudged by the CA.
In civil cases, the party having the burden of proof must establish
his case by a preponderance of evidence, or evidence which is more
convincing to the court as worthy of belief than that which is offered in
opposition thereto. Thus, the party who asserts the affirmative of an issue
has the onus to prove his assertion in order to obtain a favorable judgment.
For the plaintiff, the burden to prove its positive assertions never parts. For
the defendant, an affirmative defense is one which is not a denial of an
essential ingredient in the plaintiff's cause of action, but one which, if
established, will be a good defense, i.e., an avoidance of the
claim. 42 Dominador miserably failed in this respect.
Corollarily, the Court cannot subscribe to Dominador's claim for
payment of compensation as administrator of the business affairs of
Evangeline based on the principle of quantum meruit, 43 which was not
raised as an affirmative defense or counterclaim in his answer to the
complaint. Settled is the rule that defenses which are not raised in the
answer are deemed waived, 44 and counterclaims not set up in the answer
shall be barred. 45
Nonetheless, the Court deems it proper to modify the amount to be
returned to Evangeline, considering: (a) the unrefuted claim that Dominador
contributed the amount of P100,000.00 to the joint account at the time it
was opened; and (b) the absence of controverting proof showing that the
same had been withdrawn prior to February 11, 2002, when the contested
withdrawal was made. Consequently, Dominador is entitled to the said
amount which should be, therefore, deducted from amount to be returned.
47
 Finally, the Court finds a need to partially modify the interest
accruing from the finality of the Decision, which should be imposed at the
lower rate of 6% p.a., and not 12% p.a. as imposed by the CA, in line with
the amendment introduced by the Bangko Sentral ng Pilipinas Monetary
Board in BSP-MB Circular No. 799, 46 series of 2013, and the ruling
in Nacar v. Gallery Frames. 47
WHEREFORE, the petition is DENIED. The Decision dated July
31, 2012 and the Resolution dated January 17, 2013 of the Court of
Appeals, Cagayan de Oro City in CA-G.R. CV No. 00740-MIN are
hereby AFFIRMED with MODIFICATION directing petitioner
Dominador M. Apique to return to respondent Evangeline Apique
Fahnenstich the amount of P880,000.00, plus legal interest at six percent
(6%) per annum, reckoned from the filing of the complaint on May 7, 2002,
until full payment. SO ORDERED.
[G.R. No. 179011. April 15, 2013.]
REY CASTIGADOR CATEDRILLA, petitioner, vs. MARIO and
MARGIE 1 LAURON, respondents.
Assailed in this petition for review on certiorari is the Decision 2 dated
February 28, 2007 of the Court of Appeals (CA) in CA-G.R. SP No. 00939, as
well as its Resolution 3 dated July 11, 2007 which denied petitioner's motion for
reconsideration.
On February 12, 2003, petitioner Rey Castigador Catedrilla filed with the
Municipal Trial Court (MTC) of Lambunao, Iloilo a Complaint 4 for ejectment
against the spouses Mario and Margie Lauron alleging as follows: that Lorenza
Lizada is the owner of a parcel of land known as Lot 183, located in Mabini
Street, Lambunao, Iloilo, which was declared for taxation purposes in her name
under Tax Declaration No. 0363; 5 that on February 13, 1972, Lorenza died and
was succeeded to her properties by her sole heir Jesusa Lizada Losañes, who
was married to Hilarion Castigador (Castigador); that the spouses Jesusa and
Hilarion Castigador had a number of children, which included Lilia
Castigador (Lilia), who was married to Maximo Catedrilla (Maximo); that after
the death of the spouses Castigador, their heirs agreed among themselves to
subdivide Lot 183 and, pursuant to a consolidation subdivision plan 6 dated
January 21, 1984, the parcel of lot denominated as Lot No. 5 therein was to be
apportioned to the heirs of Lilia since the latter already died on April 9, 1976;
Lilia was succeeded by her heirs, her husband Maximo and their children, one of
whom is herein petitioner; that petitioner filed the complaint as a co-owner of
Lot No. 5; that sometime in 1980, respondents Mario and Margie Lauron,
through the tolerance of the heirs of Lilia, constructed a residential building of
strong materials on the northwest portion of Lot No. 5 covering an area of one
hundred square meters; that the heirs of Lilia made various demands for
respondents to vacate the premises and even exerted earnest efforts to
compromise with them but the same was unavailing; and that petitioner
reiterated the demand on respondents to vacate the subject lot on January 15,
2003, but respondents continued to unlawfully withhold such possession.
In their Answer, 7 respondents claimed that petitioner had no cause of action
against them, since they are not the owners of the residential building standing
on petitioner's lot, but Mildred Kascher (Mildred), sister of respondent Margie,
as shown by the tax declaration in Mildred's name; 8 that in 1992, Mildred had
already paid P10,000.00 as downpayment for the subject lot to Teresito
Castigador; 9 that there were several instances that the heirs of Lilia offered the
subject Lot 183 for sale to respondents and Mildred and demanded payment,
however, the latter was only interested in asking money without any intention of
delivering or registering the subject lot; that in 1998, Maximo, petitioner's
father, and respondent Margie entered into an amicable settlement 10 before
theBarangay Lupon of Poblacion Ilawod, Lambunao, Iloilo wherein Maximo
offered the subject lot to the spouses Alfons and Mildred Kascher in the amount
of P90,000.00 with the agreement that all documents related to the transfer of
the subject lot to Maximo and his children be prepared by Maximo, but the latter
failed to comply; and that the amicable settlement should have the force and
effect of a final judgment of a court, hence, the instant suit is barred by prior
judgment. Respondents counterclaimed for damages.
On November 14, 2003, the MTC rendered its Decision, 11 the dispositive
portion of which reads:
WHEREFORE, in view of the foregoing, judgment is hereby
rendered in favor of the plaintiff ordering the defendants:
1. To vacate the lot in question and restore possession to the
plaintiff;
2. To pay plaintiff in the reduced amount of TWENTY
THOUSAND PESOS (P20,000.00) as Atty's fees, plus ONE
THOUSAND (P1,000.00) per Court appearance;
48
 3. To pay plaintiff reasonable compensation for the use of the
lot in question ONE THOUSAND (P1,000.00) pesos yearly
counted from the date of demand;
4. To pay the cost of litigation. AIaDcH
No award of moral and exemplary damages.
Defendants' counterclaim is hereby dismissed for lack of
sufficient evidence. 12
The MTC found that from the allegations and evidence presented, it appeared
that petitioner is one of the heirs of Lilia Castigador Catedrilla, the owner of the
subject lot and that respondents are occupying the subject lot; that petitioner is a
party who may bring the suit in accordance with Article 487 13 of the Civil
Code; and as a co-owner, petitioner is allowed to bring this action for ejectment
under Section 1, Rule 70 14 of the Rules of Court; that respondents are also the
proper party to be sued as they are the occupants of the subject lot which they do
not own; and that the MTC assumed that the house standing on the subject lot
has been standing thereon even before 1992 and only upon the acquiescence of
the petitioner and his predecessor-in-interest.
The MTC found that respondents would like to focus their defense on the
ground that Mildred is an indispensable party, because she is the owner of the
residential building on the subject lot and that there was already a perfected
contract to sell between Mildred and Maximo because of an amicable settlement
executed before the Office of the Punong Barangay. However, the MTC,
without dealing on the validity of the document and its interpretation, ruled that
it was clear that respondent Margie was representing her parents, Mr. and Mrs.
Bienvenido Loraña, in the dispute presented with the Punong Barangay. It also
found that even Mildred's letter to petitioner's father Maximo recognized the title
of petitioner's father over the subject lot and that it had not been established by
respondents if Teresito Castigador, the person who signed the receipt evidencing
Mildred's downpayment of P10,000.00 for the subject lot, is also one of the heirs
of Lilia. The MTC concluded that respondents could not be allowed to deflect
the consequences of their continued stay over the property, because it was their
very occupation of the property which is the object of petitioner's complaint; that
in an action for ejectment, the subject matter is material possession or
possession de facto over the real property, and the side issue of ownership over
the subject lot is tackled here only for the purpose of determining who has the
better right of possession which is to prove the nature of possession; that
possession of Lot 183 should be relinquished by respondents to petitioner, who
is a co-owner, without foreclosing other remedies that may be availed upon by
Mildred in the furtherance of her supposed rights. TAaCED
Respondents filed their appeal with the Regional Trial Court (RTC) of Iloilo
City, raffled off to Branch 26. On March 22, 2005, the RTC rendered its
Order, 15 the dispositive portion of which reads:
WHEREFORE, circumstances herein-above considered, the decision of
the court dated November 14, 2003 is hereby AFFIRMED, except for the
payment of P20,000.00 as attorney's fees.
SO ORDERED. 16
The RTC found that petitioner, being one of the co-owners of the subject lot, is
the proper party in interest to prosecute against any intruder thereon. It found
that the amicable settlement signed and executed by the representatives of the
registered owner of the premises before the Lupon is not binding and
unenforceable between the parties. It further ruled that even if Mildred has her
name in the tax declaration signifying that she is the owner of the house
constructed on the subject lot, tax declarations are not evidence of ownership but
merely issued to the declarant for purposes of payment of taxes; that she cannot
be considered as an indispensable party in a suit for recovery of possession
against respondents; that Mildred should have intervened and proved that she is
an indispensable party because the records showed that she was not in actual
possession of the subject lot. The RTC deleted the attorney's fees, since the
MTC decision merely ordered the payment of attorney's fees without any basis.
Respondents' motion for reconsideration was denied in an Order 17 dated June
8, 2005.
Dissatisfied, respondents filed with the CA a petition for review. Petitioner filed
his Comment thereto.
On February 28, 2007, the CA issued its assailed decision, the dispositive
portion of which reads:
IN LIGHT OF ALL THE FOREGOING, this petition for review
is GRANTED. The assailed decision of the Regional Trial Court, Br. 26,
Iloilo City, dated March 22, 2005, that affirmed the MTC Decision dated
November 14, 2003, is REVERSED and SET ASIDE.
Consequently, the complaint for ejectment of the respondent is
DISMISSED. 18
49
The CA found that only petitioner filed the case for ejectment against
respondents and ruled that the other heirs should have been impleaded as
plaintiffs citing Section 1, 19 Rule 7 and Section 7, 20 Rule 3 of the Rules of
Court; that the presence of all indispensable parties is a condition sine qua
non for the exercise of judicial power; that when an indispensable party is not
before the court, the action should be dismissed as without the presence of all
the other heirs as plaintiffs, the trial court could not validly render judgment and
grant relief in favor of the respondents.
The CA also ruled that while petitioner asserted that the proper parties to be
sued are the respondents as they are the actual possessors of the subject lot and
not Mildred, petitioner still cannot disclaim knowledge that it was to Mildred to
whom his co-owners offered the property for sale, thus, he knew all along that
the real owner of the house on the subject lot is Mildred and not respondents;
that Mildred even paid P10,000.00 out of the total consideration for the subject
lot and required respondents' relatives to secure the documents that proved their
ownership over the subject lot; that Maximo and Mildred had previously settled
the matter regarding the sale of the subject lot before the Barangay as contained
in an amicable settlement signed by Maximo and respondent Margie. Thus, the
question in this case extends to mere possessory rights and non-inclusion of
indispensable parties made the complaint fatally defective. From the facts
obtaining in this case, ejectment being a summary remedy is not the appropriate
action to file against the alleged deforciant of the property.
Hence, this petition for review wherein petitioner raises the following
issues: aCIHcD
I and not for the co-ownership, the action will not prosper.
THE COURT OF APPEALS ERRED AND GRAVELY
ABUSED ITS DISCRETION WHEN IT HELD THAT
THE DECISION OF THE TRIAL COURT WAS A
NULLITY.
II
THE COURT OF APPEALS ERRED AND GRAVELY
ABUSED ITS DISCRETION WHEN IT HELD THAT
PETITIONER KNEW ALL ALONG THAT MILDRED
KASCHER, AND NOT RESPONDENTS, WERE THE
REAL OWNERS OF THE RESIDENTIAL
BUILDING. 21
The CA found that petitioner's co-heirs to the subject lot should have been
impleaded as co-plaintiffs in the ejectment case against respondents, since
without their presence, the trial court could not validly render judgment and
grant relief in favor of petitioner.
We do not concur.
Petitioner can file the action for ejectment without impleading his co-owners.
In Wee v. De Castro, 22 wherein petitioner therein argued that the respondent
cannot maintain an action for ejectment against him, without joining all his co-
owners, we ruled in this wise:
Article 487 of the New Civil Code is explicit on this point:
ART. 487. Any one of the co-owners may bring an action in
ejectment. —
This article covers all kinds of action for the recovery of
possession, i.e., forcible entry and unlawful detainer (accion
interdictal), recovery of possession(accion publiciana), and
recovery of ownership (accion de reivindicacion). As explained
by the renowned civilest, Professor Arturo M. Tolentino:
A co-owner may bring such an action, without the
necessity of joining all the other co-owners as co-
plaintiffs, because the suit is deemed to be instituted for
the benefit of all. If the action is for the benefit of the
plaintiff alone, such that he claims possession for himself
In the more recent case of Carandang v. Heirs of De Guzman,
this Court declared that a co-owner is not even a necessary party
to an action for ejectment, for complete relief can be afforded
even in his absence, thus:
In sum, in suits to recover properties, all co-owners are real
parties in interest. However, pursuant to Article 487 of
the Civil Code and the relevant jurisprudence, any one of
them may bring an action, any kind of action for the
recovery of co-owned properties. Therefore only one of the
co-owners, namely the co-owner who filed the suit for the
recovery of the co-owned property, is an indispensable party
thereto. The other co-owners are not indispensable parties.
50
 They are not even necessary parties, for a complete relief can
be afforded in the suit even without their participation, since
the suit is presumed to have been filed for the benefit of all
co-owners. 23
In this case, although petitioner alone filed the complaint for unlawful detainer,
he stated in the complaint that he is one of the heirs of the late Lilia Castigador,
his mother, who inherited the subject lot, from her parents. Petitioner did not
claim exclusive ownership of the subject lot, but he filed the complaint for the
purpose of recovering its possession which would redound to the benefit of the
co-owners. Since petitioner recognized the existence of a co-ownership, he, as a
co-owner, can bring the action without the necessity of joining all the other co-
owners as co-plaintiffs.
Petitioner contends that the CA committed a reversible error in finding that
Mildred Kascher is an indispensable party and that her non-inclusion as a party
defendant in the ejectment case made the complaint fatally defective, thus, must
be dismissed.
We agree with petitioner.
The CA based its findings that Mildred is an indispensable party because it
found that petitioner knew all along that Mildred is the owner of the house
constructed on the subject lot as shown in the affidavits 24 of Maximo and
petitioner stating that petitioner's co-owners had offered for sale the subject lot
to Mildred, and that Maximo, petitioner's father, and Mildred had previously
settled before the Barangay the matter regarding the sale of the subject lot to the
latter as contained in the amicable settlement.
We find that the affidavits of Maximo and petitioner merely stated that the lot
was offered for sale to Mildred, but nowhere did it admit that Mildred is the
owner of the house constructed on the subject lot.
Also, it appears that the amicable settlement 25 before the Barangay wherein it
was stated that Maximo will sell the subject lot to the spouses Alfons and
Mildred Kascher was signed by Maximo on behalf of his children and
respondent Margie on behalf of Mr. and Mrs. Bienvenido Loraña. Thus, there is
no basis for the CA's conclusion that it was Mildred and Maximo who had
previously settled the sale of the subject lot.
Moreover, it appears however, that while there was a settlement, Liah C.
Catedrilla, one of petitioner's co-heirs, wrote a letter 26 dated October 30, 2002,
to the Spouses Loraña and respondent Margie stating that the latter had made a
change on the purchase price for the subject lot which was different from that
agreed upon in the amicable settlement. Records neither show that respondent
Margie had taken steps to meet with Liah or any of her co-heirs to settle the
matter of the purchase price nor rebut such allegation in the letter if it was not
true. The letter 27 dated July 5, 2003 of respondent Margie's counsel addressed
to petitioner's counsel, stating that his client is amenable in the amount as
proposed in the amicable settlement, would not alter the fact of respondents'
non-compliance with the settlement since the letter was sent after the ejectment
case had already been filed by petitioner.
In Chavez v. Court of Appeals, 28 we explained the nature of the amicable
settlement reached after a barangay conciliation, thus:
Indeed, the Revised Katarungang Pambarangay Law provides
that an amicable settlement reached after barangay conciliation
proceedings has the force and effect of a final judgment of a
court if not repudiated or a petition to nullify the same is filed
before the proper city or municipal court within ten (10) days
from its date. It further provides that the settlement may be
enforced by execution by the lupong tagapamayapa within six
(6) months from its date, or by action in the appropriate city or
municipal court, if beyond the six-month period. This special
provision follows the general precept enunciated in Article 2037
of the Civil Code,viz.:
A compromise has upon the parties the effect and authority
of res judicata; but there shall be no execution except in
compliance with a judicial compromise.
Thus, we have held that a compromise agreement which is not
contrary to law, public order, public policy, morals or good
customs is a valid contract which is the law between the parties
themselves. It has upon them the effect and authority of res
judicata even if not judicially approved, and cannot be lightly
set aside or disturbed except for vices of consent and forgery.
However, in Heirs of Zari, et al. v. Santos, we clarified that the
broad precept enunciated in Art. 2037 is qualified by Art. 2041
of the same Code, which provides:
51
 If one of the parties fails or refuses to abide by the compromise,
the other party may either enforce the compromise or regard it
as rescinded and insist upon his original demand.
We explained, viz.:
[B]efore the onset of the new Civil Code, there was no right to
rescind compromise agreements. Where a party violated the
terms of a compromise agreement, the only recourse open to the
other party was to enforce the terms thereof.
When the new Civil Code came into being, its Article 2041 . . .
created for the first time the right of rescission. That provision
gives to the aggrieved party the right to "either enforce the
compromise or regard it as rescinded and insist upon his original
demand." Article 2041 should obviously be deemed to qualify
the broad precept enunciated in Article 2037 that "[a]
compromise has upon the parties the effect and authority of res
judicata.
In exercising the second option under Art. 2041, the
aggrieved party may, if he chooses, bring the suit
contemplated or involved in his original demand, as if there
had never been any compromise agreement, without bringing
an action for rescission. This is because he may regard the
compromise as already rescinded by the breach thereof of the
other party. 29
While the amicable settlement executed between Maximo and respondent
Margie before the Barangay had the force and effect of a final judgment of a
court, it appears that there was non-compliance thereto by respondent Margie on
behalf of her parents which may be construed as repudiation. The settlement is
considered rescinded in accordance with the provision of Article 2041 of
the Civil Code.Since the settlement was rescinded, petitioner, as a co-owner,
properly instituted the action for ejectment to recover possession of the subject
lot against respondents who are in possession of the same.
Even the receipt 30 signed by a certain Teresito Castigador, acknowledging
having received from Mildred the amount of P10,000.00 as downpayment for
the purchase of the subject lot, would not also prove respondents' allegation that
there was already a perfected contract to sell the subject lot to Mildred, since the
authority of Teresito to sell on behalf of the heirs of Lilia Castigador was not
established.
In ejectment cases, the only issue to be resolved is who is entitled to the physical
or material possession of the property involved, independent of any claim of
ownership set forth by any of the party-litigants. 31 In an action for unlawful
detainer, the real party-in-interest as party-defendant is the person who is in
possession of the property without the benefit of any contract of lease and only
upon the tolerance and generosity of its owner. 32 Well settled is the rule that a
person who occupies the land of another at the latter's tolerance or permission,
without any contract between them, is bound by an implied promise that he will
vacate the same upon demand, failing which a summary action for ejectment is
the proper remedy against him. 33 His status is analogous to that of a lessee or
tenant whose term of lease has expired but whose occupancy continued by
tolerance of the owner. 34
Here, records show that the subject lot is owned by petitioner's mother, and
petitioner, being an heir and a co-owner, is entitled to the possession of the
subject lot. On the other hand, respondent spouses are the occupants of the
subject lot which they do not own. Respondents' possession of the subject lot
was without any contract of lease is they failed to present any, thus lending
credence to petitioner's claim that their stay in the subject lot is by mere
tolerance of petitioner and his predecessors. It is indeed respondents spouses
who are the real parties-in-interest who were correctly impleaded as defendants
in the unlawful detainer case filed by petitioner.
WHEREFORE, premises considered, the petition is hereby GRANTED. The
Decision dated February 28, 2007 and the Resolution dated July 11, 2007 of the
Court of Appeals are hereby REVERSED and SET ASIDE. The Order dated
March 22, 2005 of the Regional Trial Court, Branch 26, Iloilo City, in Civil
Case No. 04-27978, is hereby REINSTATED. SO ORDERED.
52
 [G.R. No. 4656. November 18, 1912.]
RICARDO PARDELL Y CRUZ and VICENTA ORTIZ Y FELIN
DE PARDELL, plaintiffs-appellees, vs. GASPAR DE
BARTOLOME Y ESCRIBANO and MATILDE ORTIZ Y FELIN
DE BARTOLOME, defendants-appellants.
1. ESTATES; REALTY; RIGHTS OF COOWNERS OR
TENANTS IN COMMON. — Each coowner or tenant in common of
undivided realty has the same rights therein as the others; he may use and
enjoy the same without other limitation except that he must not prejudice
the rights of his coowners, but until a division is effected, the respective
parts belonging to each can not be determined; each coowner exercises joint
dominion and is entitled to joint use.
2. ID.; ID.; ID; RENT BY ONE COOWNER. — For the use and
enjoyment of a particular portion of the lower part of a house, not used as
living quarters, a coowner must, in strict justice, pay rent, in like manner as
other people pay for similar space in the house; he has no right to the free
use and enjoyment of such space which, if rented to a third party, would
produce income.
3. ID.; ID.; ID.; REPAIRS AND IMPROVEMENT; INTEREST.
— Until a cause instituted to determine the liability of the rest of the
coowners for repairs and improvements made by one of their number is
finally decided and the amount due is fixed, the persons alleged to be liable
can not be considered in default as to interest, because interest is only due
from the date of the decision fixing the principal liability. (Supreme court of
Spain, April 24, 1867, November 19, 1869, November 22, 1901, in
connection with arts. 1108-1110 of the Civil Code.)
4. ID.; ID.; ID.; VOLUNTARY ADMINISTRATOR;
COMPENSATION. — To an administrator or voluntary manager of
property belonging to his wife and another, both coowners, the property
being undivided, the law does not conceded any remuneration, without
prejudice to his right to be reimbursed for any necessary and useful
expenditures in connection with the property and for any damages he may
have suffered thereby.
5. ID.; ID.; ID.; RIGHT TO DEMAND VALUATION BEFORE
DIVISION OR SALE. — Any one of the coowners of undivided property
about to be divided or to be sold in consequence of a mutual petition, has
the right to ask that the property be valued by experts, a valuation which
would not be prejudicial but rather beneficial to all.
This is an appeal by bill of exceptions, from the judgment of
October 5, 1907, whereby the Honorable Dionisio Chanco, judge, absolved
the defendants from the complaint, and the plaintiff from a counterclaim,
without special finding as to costs.
Counsel for the spouses Ricardo Pardell y Cruz and Vicenta Ortiz
y Felin de Pardell, the first of whom absent in Spain by reason of his
employment, conferred upon the second sufficient and ample powers to
appear before the courts of justice, on June 8, 1905, in his written
complaint, alleged that the plaintiff, Vicenta Ortiz, and the defendant,
Matilde Ortiz, are the duly recognized natural daughters of the spouses
Miguel Ortiz and Calixta Felin y Paula who died in Vigan, Ilocos Sur, in
1875 and 1882, respectively; that Calixta Felin, prior to her death, executed,
on August 17, 1876, a nuncupative will in Vigan, whereby she made her
four children, named Manuel, Francisca, Vicenta, and Matilde, surnamed
Ortiz y Felin, her sole and universal heirs of all her property; that, of the
persons enumerated, Manuel died before his mother and Francisca a few
years after her death, leaving no heirs of the said testatrix are the plaintiff
Vicenta Ortiz and the defendant Matilde Ortiz; that, aside from some
personal property and jewelry already divided among the heirs, the testatrix
possessed, at the time of the execution of her will, and left at her death the
real properties which, with their respective cash values, are as follows:
A house of strong material, with the lot on which it is
1. built,
situated on Escalante Street, Vigan, and valued at P6,000.00
2. A house of mixed material, with the
lot on which it
stands, at No. 88 Washington Street, Vigan valued at 1,500.00
3. A lot on Magallanes Street, Vigan;
valued at 100.00
4. A parcel of rice land, situated in
the barrio of San Julian,
Vigan;
valued at 60.00
5. A parcel of rice land in the pueblo
53
 of Santa Lucia; 86.00
6. Three parcels of land in the pueblo
of Candon; valued at 150.00
Total 7,896.00
That, on or about the first months of the year 1888, the defendants,
without judicial authorization, nor friendly or extrajudicial agreement, took
upon themselves the administration and enjoyment of the said properties
and collected the rents, fruits, and products thereof, to the serious detriment
of the plaintiffs' interest; that, notwithstanding the different and repeated
demands extrajudicially made upon Matilde Ortiz to divide the
aforementioned properties with the plaintiff Vicenta and to deliver to the
latter the one-half of the same which rightly belonged to her, or the value
thereof, together with one-half of the fruits and rents collected therefrom,
the said defendant and her husband, the said defendant and her husband, the
self-styled administrator of the properties mentioned, had been delaying the
partition and delivery of the said properties by means of unkempt promises
and other excuses; and that the plaintiffs, on account of the extraordinary
delay in the delivery of one-half of said properties, or their value in cash, as
the case might be, had suffered losses and damages in the sum of P8,000.
Said counsel for the plaintiffs therefore asked that judgment be rendered by
sentencing the defendants, Gaspar de Bartolome and Matilde Ortiz Felin de
Bartolome, to restore and deliver to the plaintiffs one-half of the total value
in cash, according to appraisal, of the undivided property specified, which
one-half amounted approximately to P3,498, or, if deemed proper, to
recognize the plaintiff Vicenta Ortiz to be vested with the full and absolute
right of ownership to the said undivided one-half of the properties in
question, as universal testamentary heir thereof together with the defendant
Matilde Ortiz, to indemnify the plaintiffs in the sum of P8,000, for losses
and damages, and to pay the costs.
Counsel for the defendants, in his answer denied the facts alleged
in paragraphs 1, 4, 6, 7 and 8 thereof, inasmuch as, upon the death of the
litigating sisters' brother Manuel, their mother, who was still living, was his
heir by force of law, and the defendants had never refused to give to the
plaintiff Vicenta Ortiz her share of the said properties; and stated that he
admitted the facts alleged in paragraph 2, provided it be understood,
however, that the surname of the defendant's mother was Felin, and not
Felix, and that Miguel Ortiz died in Spain, and not in Vigan; that he also
admitted paragraph 3 of the complaint, with the difference that the said
surname should be Felin, and likewise paragraph 5, except the part thereof
relating to the personal property and the jewelry, since the latter had not yet
been divided; that the said jewelry was in the possession of the plaintiffs
and consisted of: one Lozada gold chronometer watch with a chain in the
form of a bridle curb and a watch charm consisting of the engraving of a
postage stamp on a stone mounted in gold and bearing the initials M.O., a
pair of cuff buttons made of gold coins, four small gold buttons, two finger
rings, another with the initials M.O., and a gold bracelet; and that the
defendants were willing to deliver to the plaintiffs, in conformity with
petition, one-half of the total value in cash, according to appraisement, of
the undivided real properties specified in paragraph 5, which half amounted
to P3,948.
In a special defense said counsel alleged that the defendant had
never refused to divide the said property and had in fact several years before
solicited the partition of the same; that, from 1886 to 1901, inclusive, there
was collected from the property on Calle Escolta the sum of 288 pesos,
besides a few other small amounts derived from other sources, which were
delivered to the plaintiffs with other larger amounts, in 1891, and from the
property on Calle Washington, called La Quinta, 990.95 pesos, which
proceeds, added together, made a total of 1,278.95 pesos, saving error or
omission; that, between the years abovementioned, 765.38 pesos were spent
on the house situated on Calle Escolta, and on that on Calle Washington, La
Quinta, 376.33, which made a total of 1,141.71, saving error or omission;
that, in 1897, the work of reconstruction was begun of the house on Calle
Escolta, which had been destroyed by an earthquake, which work was not
finished until 1903 and required an expenditure on the part of the defendant
Matilde Ortiz, of 5,091.52 pesos; that all the collections made up to August
1,1905, including the rent from the stores, amounted to only P3,654.15, and
the expenses to P6,252.32, there being, consequently, a balance of
P2,598.18, which, divided between the sisters, the plaintiff and the
defendant, would make the latter's share P1,299.08; that, as shown by the
papers kept by the plaintiffs, in the year 1891 the defendant Bartolome
presented to the plaintiffs a statement in settlement of accounts, and
delivered to the person duly authorized by the latter for the purpose, the sum
of P2,606.29, which the said settlement showed was owing his principals,
from various sources; that, the defendant Bartolome having been the
administrator of the undivided property claimed by the plaintiffs, the latter
were owing the former the legal remuneration of the percentage allowed by
law for administration; and that the defendants were willing to pay the sum
of P3,948, one-half of the total value of the said properties, deducting
therefrom the amount found to be owing them by the plaintiffs, and asked
54
that the judgment be rendered in their favor to enable them to recover from
the latter that amount, together with the costs and expenses of the suit.
The defendants, in their counterclaim, reported each and all of the
allegations contained in each of the paragraphs of section 10 of their
answer; that the plaintiffs were obliged to pay to the administrator of the
said property the remuneration allowed him by law; that, as the revenues
collected by the defendants amounted to no more than P3,654.15, and the
expenditures incurred by them, to P6,252.32, it followed that the plaintiffs
owed the defendants P1,299.08, that is, one-half of the difference between
the amount collected from and that expended on the properties, and asked
that judgment be therefore rendered in their behalf to enable them to collect
this sum from the plaintiffs, Ricardo Pardell and Vicenta Ortiz, with legal
interest thereon from December 7, 1904, the date when the accounts were
rendered, together with the sums to which the defendant Bartolome was
entitled for the administration of the undivided properties in question.
By a written motion of August 21, 1905, counsel for the plaintiffs
requested permission to amend the complaint by inserting immediately after
the words "or respective appraisal," fifth line of paragraph 5, the phrased "in
cash in accordance with the assessed value," and likewise further to amend
the same, in paragraph 6 thereof, by substituting the following words in lieu
of the petition for the remedy sought: "By reason of all the foregoing, I beg
the court to be pleased to render judgment by sentencing the defendants,
Gaspar de Bartolome and Matilde Ortiz Felin de Bartolome, to restore and
deliver to the plaintiffs an exact one-half of the total value of the undivided
properties described in the complaint, such value to be ascertained by the
expert appraisal of two competent persons, one of whom shall be appointed
by the plaintiffs and the other by the defendants, and, in case of
disagreement between these two appointees such value shall be determined
by a third expert appraiser appointed by the court, or, in a proper case, by
the price offered at public auction; or, in lieu thereof, it is requested that the
court recognize the plaintiff, Vicenta Ortiz, to be vested with a full and
absolute right to an undivided one-half of the said properties; furthermore, it
is prayed that the plaintiffs be awarded an indemnity of P8,000 for losses
and damages, and the costs." Notwithstanding the opposition of the
defendants, the said defendants were allowed a period of three days within
which to present a new answer. An exception was taken to this ruling.
The proper proceedings were had with reference to the valuation of
the properties concerned in the division sought and incidental issues were
raised relative to the partition of some of them and their award to one or the
other of the parties. Due consideration was taken of the averments and
statements of both parties who agreed between themselves, before the court,
that any of them might at any time acquire, at the valuation fixed by the
expert judicial appraiser, any of the properties in question, there being none
in existence excluded by the litigants. The court, therefore, by order of
December 28, 1905, ruled that the plaintiffs were entitled to acquire, at the
valuation determined by the said expert appraiser, the building known as La
Quinta, the lot on which it stands and the warehouses and other
improvements comprised within the inclosed land, and the seed lands
situated in the pueblos of Vigan and Santa Lucia; and that the defendants
were likewise entitled to acquire the house on Calle Escolta, the lot on Calle
Magallanes, and the three parcels of land situated in the pueblo of Candon.
After this partition had been made, counsel for the defendants, by a
writing of March 8, 1908, set forth: That, having petitioned for the
appraisement of the properties in question for the purpose of their partition,
it was not to be understood that he desisted from the exception duly entered
to the ruling made in the matter of the amendment to the complaint; that the
properties retained by the defendants were valued at P9,310, and those
retained by the plaintiffs, at P2,885, one-half of which amounts each party
had to deliver to the other, as they were pro indiviso properties; that,
therefore, the defendants had to pay the plaintiffs the sum of P3,212.50,
after deducting the amount which the plaintiffs were obliged to deliver to
the defendants, as one-half of the price of the properties retained by the
former; that, notwithstanding that the amount of the counterclaim for the
expenses incurred in the reconstruction of the pro indiviso property should
be deducted from the sum which the defendants had to pay the plaintiffs, the
former, for the purpose of bringing the matter of the partition to a close,
would deliver to the latter, immediately upon the signing of the instrument
of purchase and sale, the sum of P3,212.50, which was one-half of the value
of the properties allotted to the defendants; such delivery, however, was not
to be understood as a renouncement of the said counterclaim, but only as a
means for the final termination of the pro indiviso status of the property.
The case having been heard, the court, on October 5, 1907,
rendered judgment holding that the revenues and the expenses were
compensated by the residence enjoyed by the defendant party, that no losses
or damages were either caused or suffered, nor likewise any other expense
besides those aforementioned, and absolved the defendants from the
complaint and the plaintiffs from the counterclaim, with no special finding
as to costs. An exception was taken to this judgment by counsel for the
55
defendants who moved for a new trial on the grounds that the evidence
presented did not warrant the judgment rendered and that the latter was
contrary to law. This motion was denied, exception whereto was taken by
said counsel, who filed the proper bill of exceptions, and the same was
approved and forwarded to the clerk of this court, with a transcript of the
evidence.
Both of the litigating sisters assented to a partition by halves of the
property left in her will by their mother at her death; in fact, during the
course of this suit, proceedings were had, in accordance with the agreement
made, for the division between them of the said hereditary property of
common ownership, which division was recognized and approved in the
findings of the trial court, as shown by the judgment appealed from.
The issues raised by the parties, aside from the said division made
during the trial, and which have been submitted to this court for decision,
concern: (1) The indemnity claimed for losses and damages, which the
plaintiffs allege amount to P8,000, in addition to the rents which should
have been derived from the house on Calle Escolta, Vigan; (2) the payment
by the plaintiffs to the defendants of the sum of P1,299.08, demanded by
way of counterclaim, together with legal interest thereon from December 7,
1904; (3) the payment to the husband of the defendant Matilde Ortiz, of a
percentage claimed to be due him as the administrator of the property of
common ownership; (4) the division of certain jewelry in the possession of
the plaintiff Vicenta Ortiz; and (5) the petition that the amendment be held
to have been improperly admitted, which was made by the plaintiffs in their
written motion of August 21, 1905, against the opposition of the defendants,
through which admission the latter were obliged to pay the former P910.50.
Before entering upon an explanation of the propriety or
impropriety of the claims made by both parties, it is indispensable to state
that the trial judge, in absolving the defendants from the complaint, held
that they had not caused losses and damages to the plaintiffs, and that the
revenues and the expenses were compensated, in view of the fact that the
defendants had been living for several years in the Calle Escolta house,
which was pro indivisoproperty of joint ownership.
By this finding absolving the defendants from the complaint, and
which was acquiesced in by the plaintiffs who made no appeal
therefrom, the first issue has been decided which was raised by the
plaintiffs, concerning the indemnity for losses and damages, wherein are
comprised the rents which should have been obtained from the upper story
of the said house during the time it was occupied by the defendants, Matilde
Ortiz and her husband, Gaspar de Bartolome.
Notwithstanding the acquiescence on the part of the plaintiffs,
assenting to the said finding whereby the defendants were absolved from the
complaint, yet as such absolution is based on the compensation established
in the judgment of the trial court, between the amounts which each party is
entitled to claim from the other, it is imperative to determine whether the
defendant Matilde Ortiz, as coowner of the house on Calle Escolta, was
entitled, with her husband, to reside therein, without paying to her coowner,
Vicenta Ortiz, who, during the greater part of the time, lived with her
husband abroad, one-half of the rents which the upper story would have
produced, had it been rented to a stranger.
Article 394 of the Civil Code prescribes:
"Each coowner may use the things owned in
common, provided he uses them in accordance with their
object and in such manner as not to injure the interests of the
community nor prevent the coowners from utilizing them
according to their rights."
Matilde Ortiz and her husband occupied the upper story, designed
for use as a dwelling, in the house of joint ownership; but the record shows
no proof that, by so doing, the said Matilde occasioned any detriment to the
interests of the community property, nor that she prevented her sister
Vicenta from utilizing the said upper story according to her rights. It is to be
noted that the stores of the lower floor were rented and an accounting of the
rents was duly made to the plaintiffs.
Each coowner of realty held pro indiviso exercises his rights over
the whole property and may use and enjoy the same with no other limitation
than that he shall not injure the interests of his coowners, for the reason that,
until a division be made, the respective part of each holder can not be
determined and every one of the coowners exercises together with his other
coparticipants, joint ownership over the pro indiviso property, in addition to
his use and enjoyment of the same.
As the hereditary properties of the joint ownership of the two
sisters, Vicenta Ortiz, plaintiff, and Matilde Ortiz, defendant, were situated
in the Province of Ilocos Sur, and were in the care of the last named,
assisted by her husband, while the plaintiff Vicenta with her husband was
56
residing outside of the said province the greater part of the time between
1885 and 1905, when she left these Islands for Spain, it is not at all strange
that delays and difficulties should have attended the efforts made to collect
the rents and proceeds from the property held in common and to obtain a
partition of the latter, especially during several years when, owing to the
insurrection, the country was in a turmoil; and for this reason, aside from
that founded on the right of coownership of the defendants, who took upon
themselves the administration and care of the property of joint tenancy for
purposes of their preservation and improvement, these latter are not obliged
to pay to the plaintiff Vicenta one-half of the rents which might have been
derived from the upper story of the said house on Calle Escolta, and, much
less, because one of the living rooms and the storeroom thereof were used
for the storage of some belongings and effects of common ownership
between the litigants. The defendant Matilde, therefore, in occupying with
her husband the upper floor of the said house, did not injure the interests of
her coowner, her sister Vicenta, nor did she prevent the latter from living
therein, but merely exercised a legitimate right pertaining to her as a
coowner of the property.
Notwithstanding the above statements relative to the joint-
ownership rights which entitled the defendants to live in the upper story of
the said house, yet, in view of the fact that the record shows it to have been
proved that the defendant Matilde's husband, Gaspar de Bartolome,
occupied for four years a room or a part of the lower floor of the same
house on Calle Escolta, using it as an office for the justice of the peace, a
position which he held in the capital of that province, strict justice requires
that he pay his sister-in-law, the plaintiff, one-half of the monthly rent
which the said quarters could have produced, had they been leased to
another person. The amount of such monthly rental is fixed at P16 in
appearance with the evidence shown in the record. This conclusion as to
Bartolome's liability results from the fact that, even as the husband of the
defendant coowner of the property, he had no right to occupy and use
gratuitously the said part of the lower floor of the house in question, where
he lived with his wife, to the detriment of the plaintiff Vicenta who did not
receive one-half of the rent which those quarters could and should have
produced, had they been occupied by a stranger, in the same manner that
rent was obtained from the rooms on the lower floor that were used as
stores. Therefore, the defendant Bartolome must pay to the plaintiff Vicenta
P384, that is, one-half of P768, the total amount of the rents which should
have been obtained during four years from the quarters occupied as an
office by the justice of the peace of Vigan.
With respect to the second question submitted for decision to this
court, relative to the payment of the sum demanded as a counterclaim, it
was admitted and proved in the present case that, as a result of a serious
earthquake on August 15, 1897, the said house on Calle Escolta was left in
ruins and uninhabitable, and that, for its reconstruction or repair, the
defendants had to expend the sum of P6,252.32. This expenditure,
notwithstanding that it was impugned, during the trial, by the plaintiffs, was
duly proved by the evidence presented by the defendants. Evidence,
unsuccessfully rebutted, was also introduced which proved that the rents
produced by all the rural and urban properties of common ownership
amounted, up to August 1, 1905, to the sum of P3,654.15 which, being
applied toward the cost of the repair work on the said house, leaves a
balance of P2,598.17, the amount actually advanced by the defendants, for
the rents collected by them were not sufficient for the termination of all the
work undertaken on the said building, necessary for its complete repair and
to replace it in a habitable condition. It is therefore lawful and just that the
plaintiff Vicenta Ortiz, who was willing to sell to her sister Matilde for
P1,500, her share in the house in question, when it was in a ruinous state,
should pay the defendants one-half of the amount expended in the said
repair work, since the building after reconstruction was worth P9,000,
according to expert appraisal. Consequently, the counterclaim made by the
defendants for the payment to them of the sum of P1,299.08, is a proper
demand, though from this sum a reduction must be made of P384, the
amount of one-half of the rents which should have been collected for the use
of the quarters occupied by the justice of the peace, the payment of which is
incumbent upon the husband of the defendant Matilde, as aforesaid, and the
balance remaining, P915.08, is the amount which the plaintiff Vicenta must
pay to the defendants.
The defendants claim to be entitled to the collection of legal
interest on the amount of the counterclaim, from December 7, 1904. This
contention can not be sustained, inasmuch as, until this suit is finally
decided, it could not be known whether the plaintiffs would or would not be
obliged to pay any sum whatever in reimbursement of expenses incurred by
the plaintiffs in the repair work on the said house on Calle Escolta, whether
or not the defendants in turn, were entitled to collect any such amount, and
finally what the net sum would be which the plaintiffs might have to pay as
reimbursement for one-half of the expenditures made by the defendants.
Until final disposal of the case, no such net sum can be determined, nor
until then can the debtor be deemed to be in arrears. In order that there be an
obligation to pay legal interest in connection with a matter at issue between
57
the parties, it must be declared in a judicial decision from what date the
interest will be due on the principal concerned in the suit. This rule has been
established by the decisions of the supreme court of Spain, in reference to
articles 1108, 1109, and 1110 of the Civil Code, rendered on April 24, 1867,
November 19, 1869, and February 22, 1901.
With regard to the percentage, as remuneration claimed by the
husband of the defendant Matilde for his administration of the property of
common ownership, inasmuch as no stipulation whatever was made in the
matter by and between him and his sister-in-law, the said defendant, the
claimant is not entitled to the payment of any remuneration whatsoever. Of
his own accord and as an officious manager, he administered the said pro
indiviso property, one-half of which belonged to his wife who held it in
joint tenancy, with his sister-in-law, and the law does not allow him any
compensation as such voluntary administrator. He is merely entitled to a
reimbursement for such actual and necessary expenditures as he may have
made on the undivided properties and an indemnity for the damages he may
have suffered while acting in that capacity, since at all events it was his duty
to care for and preserve the said property half of which belonged to his
wife; and in exchange for the trouble and labor occasioned him by the
administration of his sister-in-law's half of the said property, he with his
wife resided in the upper story of the house aforementioned, without
payment of one-half of the rents said quarters might have produced had they
been leased to another person.
With respect to the division of the certain jewelry, petitioned for by
the defendants and appellants only in their brief in this appeal, the record of
the proceedings in the lower court does not show that the allegation made
by the plaintiff Vicenta is not true, to the effect that the deceased mother of
the litigant sisters disposed of this jewelry during her lifetime, because, had
she not done so, the will made by the said deceased would have been
exhibited in which the said jewelry would have been mentioned, at least it
would have been proved that the articles in question came into the
possession of the plaintiff Vicenta without the expressed desire and the
consent of the deceased mother of the said sisters, for the gift of this jewelry
was previously assailed in the courts, without success; therefore, and in
view of its inconsiderable value, there is no reason for holding that the said
gift was not made.
As regards the collection of the sum of P910.50, which is the
difference between the assessed value of the undivided real properties and
the price of the same as determined by the judicial expert appraiser, it is
shown by the record that the ruling of the trial judge admitting the
amendment to the original complaint, is in accord with the law and
principles of justice, for the reason that any of the coowners of a pro
indiviso property, subject to division or sale, is entitled to petition for its
valuation is not prejudicial to any of the joint owners, but is beneficial to
their interests, considering that, as a general rule, the assessed value of a
building or a parcel of realty is less than the actual real value of the
property, and this being understood by the defendants, they appointed an
expert appraiser to determine, in conjunction with the one selected by the
plaintiffs, the value of the properties of joint ownership. These two experts
took part in the later proceedings of the suit until finally, and during the
course of the latter, the litigating parties agreed to an amicable division of
the pro indiviso hereditary property, in accordance with the price fixed by
the judicial expert appraiser appointed as a third party, in view of the
disagreement between and nonconformity of the appraisers chosen by the
litigants. Therefore it is improper now to claim a right to the collection of
the said sum, the difference between the assessed value and that fixed by the
judicial expert appraiser for the reason that the increase in price, as
determined by this latter appraisal, redounded to the benefit of both parties.
In consideration of the foregoing, whereby the errors assigned to
the lower court have been duly refuted, it is our opinion that, with a partial
reversal of the judgment appealed from, in so far as it absolves the plaintiffs
from the counterclaim presented by the defendants, we should and hereby
do sentence the plaintiffs to the payment of the sum of P915.08, the balance
of the sum claimed by the defendants as a balance of the one-half of the
amount which the defendants advanced for the reconstruction or repair of
the Calle Escolta house, after deducting from the total of such sum claimed
by the latter the amount of P384 which Gaspar de Bartolome, the husband
of the defendant Matilde, should have paid as one-half of the rents due for
his occupation of the quarters on the lower floor of the said house as an
office for the justice of the peace court of Vigan; and we further find: (1)
That the defendants are not obliged to pay one-half of the rents which could
have been obtained from the upper story of the said house; (2) that the
plaintiffs can not be compelled to pay legal interest from December 7, 1904,
on the sum expended in the reconstruction of the aforementioned house, but
only the interest fixed by law, at the rate of per cent per annum, from the
date of the judgment to be rendered in accordance with this decision; (3)
that the husband of the defendant Matilde Ortiz is not entitled to any
remuneration for the administration of the pro indiviso property belonging
to both parties; (4) that, neither is he entitled to collect from the plaintiffs
58
 the sum of P910.50, the difference between the assessed valuation and the
price set by the expert appraisal solicited by the plaintiffs in their
amendment to the complaint; and, (5) that no partition shall be made of
certain jewelry aforementioned now in the possession of the plaintiff
Vicenta Ortiz. The said judgment, as relates to the points appealed, is
affirmed, in so far as its findings agree with those of this decision, and is
reversed, in so far as they do not. No special finding is made regarding the
costs of both instances. So ordered.
[G.R. No. L-46001. March 25, 1982.]
LUZ CARO, petitioner, vs. HONORABLE COURT OF APPEALS
and BASILIA LAHORRA VDA. DE BENITO, AS
ADMINISTRATRIX OF THE INTESTATE ESTATE OF MARIO
BENITO, respondents.
SYNOPSIS
Alfredo Benito, Mario Benito and Benjamin Benito were the original co-owners
of two parcels of land covered by separate certificates of title. After Mario died
sometime in January, 1957, his surviving wife, Basilia Lahorra and his father,
Saturnino Benito, were subsequently judicially appointed as joint administrators
of the deceased's estate. On August 26, 1959, one of the co-owners, Benjamin
Benito, sold his one-third undivided portion over said parcels of land in favor of
herein petitioner, Luz Caro. In 1960, with the consent of Saturnino Benito, the
co-owned lots were subdivided and a subdivision title was issued to petitioner
user the lot she had bought. When private respondent learned of the said
purchase in May, 1966, she sought to redeem the property in a written offer
dated August 25, 1966, but this was refused. Eventually, she filed a complaint
with the trial court claiming that as a joint administrator of the estate of Mario
Benito, she had not been notified of the sale as required by Article 1620 in
connection with Article 1623 of the New Civil Code. The trial court dismissed
the case. On appeal, however, the Court of Appeals reversed the lower court's
judgment, found that there was absence of due notice to private respondent, and
ordered petitioner to execute a deed of redemption. Hence, this petition.
On review, the Supreme Court held that since a subdivision title has been issued
in the name of petitioner on the lot ceded to her and her title thereto having
become indefeasible one year having elapsed from the date of entry of the
subdivision title, private respondent cannot, by means of the present action,
indirectly attack the validity thereof; and that even on the assumption that there
still is co-ownership here and that therefore, the right of legal redemption exists,
private respondent as administratrix, has no personality to exercise said right
because the right of redemption is not within the powers of administration.
Assailed decision of the Court of Appeals, reversed and set aside. Complaint
dismissed.
SYLLABUS
1. CIVIL LAW; SUCCESSION; PARTITION; ORAL AGREEMENT
THEREFOR, VALID AND BINDING UPON THE PARTIES. — An
agreement of partition, though oral, is valid and consequently binding upon the
parties. (Hernandez vs. Andal, et al., 78 Phil, 196). In the case at bar, the fact is
that as early as 1960, co-ownership of the subject parcels of land was terminated
when Alfredo Benito, Luz Caro and the Intestate Estate of Mario Benito, as
trustee and representative of the heirs of Mario Benito, agreed to subdivide the
property. A petition for subdivision was then filed for the purpose. This was
accompanied by the affidavits of Alfredo Benito and Saturnino Benito, both
dated September 13, 1960 to the effect that they agree to the segregation of the
land formerly owned in common by Mario Benito, Alfredo Benito and Benjamin
Benito, A subdivision plan was made and by common agreement, Lot 1-C
thereof, with an area of 163 hectares, more or less, was ceded to petitioner,
Thereafter, the co-owners took actual and exclusive possession of the specific
portions respectively assigned to them. A subdivision title was subsequently
issued on the lot assigned to petitioner.
2. ID.; CO-OWNERSHIP; RIGHT OF LEGAL REDEMPTION DOES NOT
EXIST WHERE THE COMMUNITY HAS TERMINATED. — In Caram, et
al., 101 Phil. 315, a case squarely in point, this Court held: "Inasmuch as the
purpose of the law in establishing the right of legal redemption between co-
owners is to reduce the number of participants until the community is done away
with (Viola vs. Tecson, 49 Phil, 808),once the property is subdivided and
distributed among the co-owners, the community has terminated and there is no
reason to sustain any right of legal redemption." Although the foregoing
pronouncement has reference to the sale made after partition, this Court therein
saw no difference with respect to a conveyance which took place before the
partition agreement and approval by the court.
59
3. CIVIL LAW; LAND REGISTRATION; ALLEGATION OF FRAUD IN
SECURING REGISTRATION OF TITLE TO THE LAND SHOULD BE
SUPPORTED BY CLEAR AND CONVINCING EVIDENCE. — The rule is
that fraud in securing the registration of titles to the land should be supported by
clear and convincing evidence. (Jaramil vs. Court of Appeals, 78 SCRA 420).
As private respondent has not shown and proved the circumstances constituting
fraud, it cannot be held to exist in this case.
4. ID.; ID.; TORRENS TITLE; INDIRECT ATTACK ON VALIDITY OF
TITLE CANNOT PROSPER. — A subdivision title has been issued in the name
of petitioner on the lot ceded to her. Upon the expiration of the term of one year
from the date of the entry of the subdivision title, the Certificate of Title shall be
incontrovertible (Section 38, Act 496). Since the title of petitioner is now
indefeasible, private respondent cannot, by means of the presentation, indirectly
attack the validity thereof.
5. ID.; CO-OWNERSHIP; RIGHT OF LEGAL REDEMPTION; NOT WITHIN
THE POWERS OF ADMINISTRATION. — Even on the assumption that there
still is co-ownership here and that therefore, the right of legal redemption exists,
private respondent as administratrix, has no personality to exercise said right for
and in behalf of the intestate estate of Mario Benito. She is on the same footing
as co-administrator Saturnino Benito. Hence, if Saturnino's consent to the sale of
the one-third portion to petitioner cannot bind the intestate estate of Mario
Benito on the ground that the right of redemption was not within the powers of
administration, in the same manner, the private respondent as co-administrator
has no power to exercise the right of redemption—the very power, which the
court of Appeals ruled to be not within the powers of administration. (See Butte
vs. Manuel Uy and Sons, Inc. 4 SCRA 526)
6. ID.; ID.; ID.; 30-DAY PERIOD WITHIN WHICH TO EXERCISE SAME,
PEREMPTORY. — It has been held that the 30-day period within which to
exercise the right of legal redemption is peremptory because the policy of the
law is not to leave the purchaser's title in uncertainty beyond the established 30-
day period. (Butte vs. Manuel Uy and Sons, Inc., 4 SCRA 526). It is not a
prescriptive period but it is more a requisite or condition precedent to the
exercise of the right of legal redemption.
7. ID.; ID.; ID.; CASE AT BAR. — In the instant case, private respondent
alleged in her complaint that she learned of the sale sometime in May, 1966
upon receipt of a pleading to Special Proceeding No. 508 of the Court of First
Instance of Sorsogon. She likewise alleged that she gave a letter informing
petitioner of her desire to redeem the land on August 25, 1966. Clearly, three
months have elapsed since the notice of the sale. Hence, petitioner claims that
the thirty-day period of redemption has already expired.
This is a petition for certiorari under Rule 45 of the Revised Rules of Court
seeking a review of the decision of the Court of Appeals, 1 promulgated on
February 11, 1977, in CA-G.R. No. 52570-R entitled "Basilia Lahorra Vda. de
Benito, as Administratrix of the Intestate Estate of Mario Benito vs. Luz Caro,"
as well as the resolution of the respondent Court, dated May 13, 1977, denying
petitioner's Motion for Reconsideration. cdrep
The facts of the case are as follows:
Alfredo Benito, Mario Benito and Benjamin Benito were the original co-owners
of two parcels of land covered by Transfer Certificates of Title Nos. T-609 and
T-610 of the Registry of Deeds of Sorsogon. Mario died sometime in January,
1957. His surviving wife, Basilia Lahorra and his father, Saturnino Benito, were
subsequently appointed in Special Proceeding No. 508 of the Court of First
Instance of Sorsogon as joint administrators of Mario's estate.
On August 26, 1959, one of the co-owners, Benjamin Benito, executed a deed of
absolute sale of his one-third undivided portion over said parcels of land in favor
of herein petitioner, Luz Caro, for the sum of P10,000.00. This was registered on
September 29, 1959. Subsequently, with the consent of Saturnino Benito and
Alfredo Benito as shown in their affidavits both dated September 15, 1960,
Exhibits G and F respectively, a subdivision title was issued to petitioner Luz
Caro over Lot 1-C, under T.C.T. No. T-4978.
Sometime in the month of May, 1966, private respondent Basilia Lahorra Vda.
de Benito learned from an allegation in a pleading presented by petitioner in
Special Proceeding No. 508 that the latter acquired by purchase from Benjamin
Benito the aforesaid one-third undivided share in each of the two parcels of land.
After further verification, she sent to petitioner thru her counsel, a written offer
to redeem the said one-third undivided share dated August 25, 1966. Inasmuch
as petitioner ignored said offer, private respondent sought to intervene in Civil
Case No. 2105 entitled "Rosa Amador Vda. de Benito vs. Luz Caro" for
annulment of sale and mortgage and cancellation of the annotation of the sale
and mortgage involving the same parcels of land, but did not succeed as the
principal case was dismissed on a technicality, that is, for failure to prosecute
and the proposed intervenor failed to pay the docketing fees. Private respondent,
thus, filed the present case as an independent one and in the trial sought to prove
60
that as a joint administrator of the estate of Mario Benito, she had not been
notified of the sale as required by Article 1620 in connection with Article 1623
of the New Civil Code.
On the other hand, petitioner presented during the hearing of the case secondary
evidence of the service of written notice of the intended sale to possible
redemptioners in as much as the best evidence thereof, the written notices itself
sent to Alfredo and Saturnino Benito, could not be presented for the reason that
said notices were sent to persons who were already dead when the complaint for
legal redemption was brought. Instead, the affidavit of Benjamin Benito,
executed ante litem motam, attesting to the fact that the possible redemptioners
were formally notified in writing of his intention to sell his undivided share, was
presented in evidence. The deposition of Saturnino's widow was likewise taken
and introduced in evidence, wherein she testified that she received and gave to
her husband the written notice of the intended sale but that the latter expressed
disinterest in buying the property.
After hearing the evidence, the trial judge dismissed the complaint on the
grounds that: (a) private respondent, as administratrix of the intestate estate of
Mario Benito, does not have the power to exercise the right of legal redemption,
and (b) Benjamin Benito substantially complied with his obligation of furnishing
written notice of the sale of his one-third undivided portion to possible
redemptioners. cdll
Private respondent's Motion for Reconsideration of the trial court's decision
having been denied, she appealed to the respondent Court of Appeals contending
that the trial Judge erred in.
"I. . . not inhibiting himself from trying and deciding the
case because his son is an associate or member of the law
office of Atty. Rodolfo A. Madrid, the attorney of record of
defendant-appellee in the instant case;
II. contending that Benjamin Benito complied with the
provisions of Article 1623 of the Revised Civil Code that
before a co-owner could sell his share of the property owned
in common with the other co-heirs, he must first give
written notice of his desire to his co-heirs; (p. 49, R.A.)
III. concluding that the fact that one of the administrators
who was actively managing the estate was furnished a
written notice by the co-owner of his desire to sell his share
was enough compliance of the provisions of Article 1623 of
the Civil Code for the reason that the intention of the law is
only to give a chance to the new co-owner to buy the share
intended to be sold if he desires to buy the same; (p. 50,
R.A.)
IV. . . refusing to allow plaintiff to redeem the subject
property upon authority of Butte vs. Manuel Uy & Sons, L-
15499, Feb. 28, 1962 (p. 51, R.A.) and in consequently
dismissing the complaint (p. 52, R.A.)."
In disposing of the aforesaid errors, the Court of Appeals finding for plaintiff
(herein private respondent) held:
1. That it is not clear that Atty. Arcangel, son of the trial Judge, was legally
associated as practitioner with counsel for Luz Caro; that it is not shown at any
rate that plaintiff had asked for Judge Arcangel's disqualification and that at any
rate also, in such factual situation, an optional ground for disqualification is
addressed to his sound discretion with which it would not be correct for
appellate court to interfere or overrule.
2. That since the right of the co-owner to redeem in case his share be sold to a
stranger arose after the death of Mario Benito, such right did not form part of the
hereditary estate of Mario but instead was the personal right of the heirs, one of
whom is Mario's widow. Thus, it behooved either the vendor, Benjamin, or his
vendee, Luz Caro, to have made a written notice of the intended or
consummated sale under Article 1620 of the Civil Code.
3. That the recital in the deed of sale that the vendor notified his co-owners of
his desire to dispose of his share, who all declined to buy, was but a unilateral
statement and could not be proof of the notice required by the law.
4. That the registration of the deed of sale did not erase that right.
5. That the affidavit of notice executed on January 20, 1960 of Benjamin Benito
declaring that written notices of the sale as required by law were duly sent to
Alfredo Benito and Saturnino Benito, the latter in his capacity as administrator
of the estate of Mario Benito, as well as the sworn statement of Saturnino
Benito's widow dated November 18, 1968 confirming that her husband received
the written notice of the sale referred to in Benjamin Benito's affidavit of notice
would not satisfy that there was clear notice in writing of the specific term of the
intended sale. Worse, Saturnino was only a co-administrator and hence, his
61
unilateral act could not bind the principal because there was no less than a
renunciation of a right pertaining to the heirs, under Article 1818, NCC, apart
from the fact that the right of redemption is not within their administration.
6. That the further claim of defendant that offer to redeem was filed out of time
and that there was no actual tender loses all importance, there being no date
from which to count the 30-day period to redeem because there was no notice
given.
The dispositive part of the decision of the Court of Appeals reads as follows:
"IN VIEW THEREOF, this Court is constrained to reverse,
as it now reverses, judgment appealed from, upon payment
by plaintiff or deposit in Court, within 30 days after this
judgment should have become final, of the sum of
P10,000.00, defendant is ordered to execute a deed of
redemption over the one-third share of BENJAMIN
BENITO in favor of plaintiff for herself and as
representative of the children of Mario Benito and
therefrom, to deliver said one-third share of BENJAMIN
BENITO, costs against defendant-appellee.
SO ORDERED."
Upon denial of the motion for reconsideration, petitioner brought this petition
for review raising the following errors:
1. Respondent Court erred in allowing the exercise of the right of legal
redemption with respect to the lots in question.
2. Respondent Court erred when it made the finding that there was no notice in
law from which to count the tolling of the period of redemption and that the sale
was not made known at all to private respondent.
The alleged first error of respondent Court is premised on the fact that the lot in
question sought to be redeemed is no longer owned in common. Petitioner
contends that the right sought to be exercised by private respondent in the case
assumes that the land in question is under co-ownership, the action being based
on Article 1620 of the New Civil Code which provides:
"A co-owner of a thing may exercise the right of redemption
in case the shares of all the other co-owners or any of them,
are sold to a third person. If the price of alienation is grossly
excessive, the petitioner shall pay only a reasonable price.
"Should two or more co-owners desire to exercise the right
of redemption, they may only do so in proportion to the
share they may respectively have in the thing owned in
common."
However, the fact is that as early as 1960, co-ownership of the parcels of land
covered by Transfer Certificates of Title Nos. T-609 and T-610 was terminated
when Alfredo Benito, Luz Caro and the Intestate Estate of Mario Benito,
represented by administrators Saturnino Benito, as trustee and representative of
the heirs of Mario Benito, agreed to subdivide the property.
"An agreement of partition, though oral, is valid and
consequently binding upon the parties." (Hernandez vs.
Andal, et al., 78 Phil. 196).
A petition for subdivision was then filed for the purpose. This was accompanied
by the affidavits of Alfredo Benito and Saturnino Benito, both dated September
15, 1960 to the effect that they agree to the segregation of the land formerly
owned in common by Mario Benito, Alfredo Benito and Benjamin Benito. A
subdivision plan was made and by common agreement, Lot I-C thereof, with an
area of 163 hectares, more or less, was ceded to petitioner. Thereafter, the co-
owners took actual and exclusive possession of the specific portions respectively
assigned to them. A subdivision title was subsequently issued on the lot assigned
to petitioner, to wit, Transfer Certificate of Title No. T-4978.
In Caram, et al. vs. Court of Appeals, et al., 101 Phil. 315, a case squarely in
point, this Court held:
"Inasmuch as the purpose of the law in establishing the right
of legal redemption between co-owners is to reduce the
number of participants until the community is done away
with (Viola vs. Tecson, 49 Phil. 808), once the property is
subdivided and distributed among the co-owners, the
community has terminated and there is no reason to sustain
any right of legal redemption."
Although the foregoing pronouncement has reference to the sale made after
partition, this Court therein saw no difference with respect to a conveyance
which took place before the partition agreement and approval by the court.
Thus, it held:
62
 "Nevertheless, the result is the same, because We held in
Saturnino vs. Paulino, 97 Phil. 50, that the right of
redemption under Article 1067 may be exercised
only before partition. In this case the right was asserted not
only after partition but after the property inherited had
actually been subdivided into several parcels which were
assigned by lot to the several heirs."
In refutation, private respondent argues that petitioner Luz Caro acted in bad
faith and in fraud of the rights of the heirs of the deceased Mario Benito in
obtaining a subdivision title over the one-third portion of the land in question
which she brought from Benjamin Benito, and for this reason, she is deemed to
hold said property in trust for said heirs. The rule, however, is that fraud in
securing the registration of titles to the land should be supported by clear and
convincing evidence. (Jaramil vs. Court of Appeals, 78 SCRA 420). As private
respondent has not shown and proved the circumstances constituting fraud, it
cannot be held to exist in this case.
As aforesaid, a subdivision title has been issued in the name of petitioner on the
lot ceded to her. Upon the expiration of the term of one year from the date of the
entry of the subdivision title, the Certificate of Title shall be incontrovertible
(Section 38, Act 496). Since the title of petitioner is now indefeasible, private
respondent cannot, by means of the present action, indirectly attack the validity
thereof.
Even on the assumption that there still is co-ownership here and that therefore,
the right of legal redemption exists, private respondent as administratrix, has no
personality to exercise said right for and in behalf of the intestate estate of Mario
Benito. She is on the same footing as co-administrator Saturnino Benito. Hence,
if Saturnino's consent to the sale of the one-third portion to petitioner cannot
bind the intestate estate of Mario Benito on the ground that the right of
redemption was not within the powers of administration, in the same manner,
the private respondent as co-administrator has no power to exercise the right of
redemption — the very power which the Court of Appeals ruled to be not within
the powers of administration.
"While under Sec. 3, Rule 85, Rules of Court, the
administrator has the right to the possession of the real and
personal estate of the deceased, so far as needed for the
payment of the expenses of administration, and the
administrator may bring and defend action for the recovery
or protection of the property or right of the deceased (Sec. 2,
Rule 88), such right of possession and administration do not
include the right of legal redemption of the undivided share
sold to a stranger by one of the co-owners after the death of
another, because in such case, the right of legal redemption
only came into existence when the sale to the stranger was
perfected and formed no part of the estate of the deceased
co-owner; hence, that right cannot be transmitted to the heir
of the deceased co-owner." (Butte vs. Manuel Uy and Sons,
Inc., 4 SCRA 526).
Private respondent cannot be considered to have brought this action in her behalf
and in behalf of the heirs of Mario Benito because the jurisdictional allegations
of the complaint specifically stated that she brought the action in her capacity as
administratrix of the intestate estate of Mario Benito.
It is petitioner's contention that, assuming that private respondent may exercise
the right of redemption, there was no compliance with the conditions precedent
for the valid exercise thereof.
In Conejero, et al. vs. Court of Appeals, et al., 16 SCRA 775, this Court
explained the nature of the right of redemption in this wise:
"While the co-owner's right of legal redemption is a
substantive right, it is exceptional in nature, limited in its
duration and subject to strict compliance with the legal
requirements. One of these is that the redemptioner should
tender payment of the redemption money within thirty (30)
days from written notice of the sale by the co-owner."
It has been held that this thirty-day period is peremptory because the policy of
the law is not to leave the purchaser's title in uncertainty beyond the established
30-day period. (Butte vs. Manuel Uy and Sons, Inc., 4 SCRA 526). It is not a
prescriptive period but is more a requisite or condition precedent to the exercise
of the right of legal redemption.
In the case at bar, private respondent alleged in her complaint the she learned of
the sale sometime in May, 1966 upon receipt of a pleading in Special
Proceeding No. 508 of the Court of First Instance of Sorsogon. She likewise
alleged that she gave a letter informing petitioner of her desire to redeem the
land on August 25, 1966. Clearly, three months have elapsed since the notice of
63
the sale. Hence, petitioner claims that the thirty-day period of redemption has
already expired. In addition, petitioner makes capital out of the admission of
private respondent that she already knew of the said transaction even before
receipt of the said pleading (t.s.n., p. 16) as well as of the evidence presented
that Saturnino Benito, the admittedly active administrator until 1966, duly
received a written notice of the intended sale of Benjamin Benito's share. Said
evidence consists of the affidavit of the vendor stating that the required notice
had been duly given to possible redemptioners, the statement in the deed of sale
itself and the deposition of Saturnino Benito's widow with respect to her receipt
of the written notice. Finally, petitioner points to the records which disclose that
private respondent knew of the subdivision (t.s.n., p. 25) and hence, rationalized
that private respondent should have known also of the previous sale.
Since We have ruled that the right of legal redemption does not exist nor apply
in this case because admittedly a subdivision title (T.C.T. No. T-4978) has
already been issued in the name of the petitioner on Lot I-C sold to her, it
becomes moot and academic, if not unnecessary to decide whether private
respondent complied with the notice requirements for the exercise of the right of
legal redemption under Article 1623 of the New Civil Code.
WHEREFORE, IN VIEW OF THE FOREGOING, the decision of the Court of
Appeals is hereby REVERSED and SET ASIDE, and judgment is hereby
rendered DISMISSING the complaint. SO ORDERED.
[G.R. No. 78178. April 15, 1988.]
DELIA BAILON-CASILAO, LUZ PAULINO-ANG, EMMA PAULINO-
YBANEZ, NILDA PAULINO-TOLENTINO, and
SABINA BAILON, petitioners, vs. THE HONORABLE COURT OF
APPEALS and CELESTINO AFABLE, respondents.
SYLLABUS
1. CIVIL LAW; CO-OWNERSHIP; SALE OR DISPOSITION OF ENTIRE
PROPERTY AFFECTS ONLY HIS UNDIVIDED SHARE. — 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 [Punsalan v. Boon
Liat, 44 Phil. 320 (1923)]. The sale or other disposition affects only his
undivided share and the transferee gets only what would correspond to his
grantor in the partition of the thing owned in common. [Ramirez v. Bautista, 14
Phil. 528 (1909)], thereby making him a co-owner of the property.
2. ID.; ID.; RECOURSE OF A CO-OWNER WHERE THE ENTIRE
PROPERTY WAS SOLD WITHOUT HIS CONSENT. — The appropriate
recourse of co-owners in cases where their consent were not secured in a sale of
the entire property as well as in a sale merely of undivided shares of some of the
co-owners is an action for PARTITION under Rule 69 of the Revised Rules of
Court. Neither recovery of possession nor restitution can be granted since the
defendant buyers are legitimate proprietors and possessors in joint ownership of
the common property claimed [Ramirez v. Bautista, supra].
3. REMEDIAL LAW; ACTION FOR PARTITION, IMPRESCRIPTIBLE. —
An action for petition is imprescriptible or cannot be barred by prescription
[Article 494 of the Civil Code; See also Budlong v. Bontoc (G.R. No. L-27702,
September 9, 1977, 79 SCRA 24)].
4. ID.; PRESCRIPTION; WILL NOT LIE AGAINST REGISTERED LAND.
— Prescription will not lie in favor of respondent as against the petitioners who
remain the registered owners of the disputed parcel of land pursuant to Act No.
496 which expressly provides that "(n)o title to registered land in derogation to
that of the registered owner shall be acquired by prescription or adverse
possession."
5. ID.; ID.; ID.; MAY BE INVOKED BY ITS REGISTERED OWNER AND
HIS HEIRS. — If prescription is unavailing against the registered owner, it must
be equally unavailing against the latter's hereditary successors, because they
merely step into the shoes of the decedent by operation of law (New Civil Code,
Article 777; Old Civil Code,Article 657), the title or right undergoing no change
by its transmission mortis causa. [Atus, et al., v. Nunez, et al., 97 Phil. 762,
764;Umbay v. Alecha, G.R. No. 67284, March 18, 1985, 135 SCRA 427, 429).
6. CIVIL LAW; LACHES; ELEMENTS. — The four basic elements of laches,
namely: (1) conduct on the part of the defendant or of one under whom he
claims, giving rise to the situation of which complaint is made and for which the
complainant seeks a remedy; (2) delay in asserting the complainant's rights, the
complainant having had knowledge or notice of the defendant's conduct and
having been afforded an opportunity to institute suit; (3) lack of knowledge or
notice on the part of the defendant that the complainant would assert the right on
which he bases his suit; and, (4) injury or prejudice to the defendant in the event
relief is accorded to the complainant, or the suit is not held to be barred [Go Chi
Gun, et al. v. Co Cho, et al., 96 Phil. 622 (1955)].
64
7. ID.; ID.; MUST BE INVOKED BY PARTY IN GOOD FAITH. — Laches
being an equitable defense, he who invokes it must come to the court with clean
hands.
8. ID.; ID.; MERE FACT OF DELAY, NOT SUFFICIENT. — Mere fact of
delay is insufficient to constitute, laches. It is required that (1) complainant must
have had knowledge of the conduct of defendant or of one under whom he
claims and (2) he must have been afforded an opportunity to institute suit.
9. ID.; LAND TITLES AND DEEDS; LAND REGISTRATION; ALL
PERSONS DEALING WITH REGISTERED LAND HAS ONLY TO RELY
ON THE FACE OF TITLE; ACTUAL KNOWLEDGE OF FLAW
NECESSITATES FURTHER INQUIRY; EFFECT OF ABSENCE OF
INQUIRY. — A person dealing with a registered land has a right to rely upon
the face of the Torrens certificate of title and to dispense with the need of
inquiring further, except when the party concerned has actual knowledge of facts
and circumstances that would impel a reasonably cautious man to make such
inquiry. [Gonzales v. IAC and Rural Bank of Pavia, Inc., G.R. No. 69622,
January 29, 1988]. The buyer's failure to exercise even a minimum degree of
ordinary prudence required by the situation, operates against him and any
prejudice or injury that may be occasioned to him by such sale must be borne by
him.
The fate of petitioners' claim over a parcel of land rests ultimately on a
determination of whether or not said petitioners are chargeable with such laches
as may effectively bar their present action.
The petitioners herein filed a case for recovery of property and damages with
notice of lis pendens on March 13, 1981 against the defendant and herein private
respondent, Celestino Afable. The parcel of land involved in this case, with an
area of 48,849 square meters, is covered by Original Certificate of Title No.
1771 issued on June 12, 1931, in the names of Rosalia, Gaudencio, Sabina,
Bernabe, Nenita and Delia, all surnamed Bailon, as co-owners, each with a 1/6
share. Gaudencio and Nenita are now dead, the latter being represented in this
case by her children, Luz, Emma and Nilda. Bernabe went to China in 1931 and
had not been heard from since then [Decision of the Court of Appeals, Rollo, p.
39].
It appears that on August 23, 1948, Rosalia Bailon and Gaudencio Bailon sold a
portion of the said land consisting of 16,283 square meters to Donato Delgado.
On May 13, 1949, Rosalia Bailon alone sold the remainder of the land consisting
of 32,566 square meters to Ponciana V. Aresgado de Lanuza. On the same date,
Lanuza acquired from Delgado the 16,283 square meters of land which the latter
had earlier acquired from Rosalia and Gaudencio. On December 3, 1975, John
Lanuza, acting under a special power of attorney given by his wife, Ponciana V.
Aresgado de Lanuza, sold the two parcels of land to Celestino Afable, Sr.
In all these transfers, it was stated in the deeds of sale that the land was not
registered under the provisions of Act No. 496 when the fact is that it is. It
appears that said land had been successively declared for taxation first, in the
name of Ciriaca Dellamas, mother of the registered co-owners, then in the name
of Rosalia Bailon in 1924, then in that of Donato Delgado in 1936, then in
Ponciana de Lanuza's name in 1962 and finally in the name of Celestino Afable,
Sr. in 1983.
In his answer to the complaint filed by the herein petitioners, Afable claimed
that he had acquired the land in question through prescription and contended that
the petitioners were guilty of laches. He later filed a third-party complaint
against Rosalia Bailon for damages allegedly suffered as a result of the sale to
him of the land.
After trial, the lower court rendered a decision:
1. Finding and declaring Celestino Afable, a co-owner of the
land described in paragraph III of the complaint having
validly bought the two-sixth (2/6) respective undivided
shares of Rosalia Bailon and Gaudencio Bailon;
2. Finding and declaring the following as pro-indiviso co-
owners, having 1/6 share each, of the property described in
paragraph III of the complaint, to wit:
a. Sabina Bailon
b. Bernabe Bailon
c. Heirs of Nenita Bailon-Paulino
d. Delia Bailon-Casilao;
3. Ordering the segregation of the undivided interests in the
property in order to terminate co-ownership to be conducted
by any Geodetic Engineer selected by the parties to
delineate the specific part of each of the co-owners.
65
 4. Ordering the defendant to restore the possession of the
plaintiffs' respective shares as well as all attributes of
absolute dominion;
5. Ordering the defendant to pay the following:
a. P5,000.00 as damages;
b. P2,000.00 as attorney's fees and;
c. to pay the costs.
[Decision of the Trial Court, Rollo, p. 37-38].
On appeal, the respondent Court of Appeals affirmed the decision of the lower
court insofar as it held that prescription does not lie against plaintiffs-appellees
because they are co-owners of the original vendors. However, the appellate court
declared that, although registered property cannot be lost by prescription,
nevertheless, an action to recover it may be barred by laches, citing the ruling
in Mejia de Lucaz v. Gamponia [100 Phil. 277 (1956)]. Accordingly, it held the
petitioners guilty of laches and dismissed their complaint. Hence, this petition
for review on certiorari of the decision of the Court of Appeals. cdrep
The principal issue to be resolved in this case concerns the applicability of the
equitable doctrine of laches. Initially though, a determination of the effect of a
sale by one or more co-owners of the entire property held in common without
the consent of all the co-owners and of the appropriate remedy of the aggrieved
co-owners is required.
The rights of a co-owner of a certain property are clearly specified in Article 493
of the Civil Code.Thus:
Art. 493. Each co-owner shall have the full ownership of his
part and of the fruits and benefits pertaining thereto, and he
may therefore alienate, assign or mortgage it and even
substitute another person in its enjoyment, except when
personal rights are involved. But the effect of the alienation
or 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. [Emphasis
supplied.]
As early as 1923, this Court has ruled that even if a co-owner sells the whole
property as his, the sale will affect only his own share but not those of the other
co-owners who did not consent to the sale [Punsalan v. Boon Liat, 44 Phil. 320
(1923)]. This is because under the aforementioned codal provision, the sale or
other disposition affects only his undivided share and the transferee gets only
what would correspond to his grantor in the partition of the thing owned in
common. [Ramirez v. Bautista, 14 Phil. 528 (1909)]. Consequently, by virtue of
the sales made by Rosalia and Gaudencio Bailon which are valid with respect to
their proportionate shares, and the subsequent transfers which culminated in the
sale to private respondent Celestino Afable, the said Afable thereby became a
co-owner of the disputed parcel of land as correctly held by the lower court
since the sales produced the effect of substituting the buyers in the enjoyment
thereof [Mainit v. Bandoy, 14 Phil. 730 (1910)].
From the foregoing, it may be deduced that since a co-owner is entitled to sell
his undivided share, a sale of the entire property by one co-owner without the
consent of the other co-owners is not null and void. However, only the rights of
the co-owner-seller are transferred, thereby making the buyer a co-owner of the
property.
The proper action in cases like this is not for the nullification of the
sale or for the recovery of the thing owned in common from the third person
who substituted the co-owner or co-owners who alienated their shares, but
the DIVISION of the common property as of it continued to remain in the
possession of the co-owners who possessed and administered it [Mainit v.
Bandoy, supra.]
Thus, it is now settled that the appropriate recourse of co-owners in cases where
their consent were not secured in a sale of the entire property as well as in a sale
merely of undivided shares of some of the co-owners is an action for
PARTITION under Rule 69 of the Revised Rules of Court. Neither recovery of
possession nor restitution can be granted since the defendant buyers are
legitimate proprietors and possessors in joint ownership of the common property
claimed [Ramirez v. Bautista, supra].
As to the action for petition, neither prescription nor laches can be invoked.
In the light of the attendant circumstances, defendant-appellee's defense of
prescription is a vain proposition. Pursuant to Article 494 of the Civil
Code,"(n)o co-owner shall be obliged to remain in the co-ownership. Such co-
owner may demand at anytime the partition of the thing owned in
common, insofar as his share is concerned." [Emphasis supplied.] In Budlong v.
Bondoc [G.R. No. L-27702, September 9, 1977, 79 SCRA 241, this Court has
66
interpreted said provision of law to mean that the action for partition is
imprescriptible or cannot be barred by prescription. For Article 494 of the Civil
Code explicitly declares: "No prescription shall lie in favor of a co-owner or co-
heir so long as he expressly or impliedly recognizes the co-ownership."
Furthermore, the disputed parcel of land being registered under the Torrens
System, the express provision of Act No. 496 that "(n)o title to registered land in
derogation to that of the registered owner shall be acquired by prescription or
adverse possession" is squarely applicable. Consequently, prescription will not
lie in favor of Afable as against the petitioners who remain the registered owners
of the disputed parcel of land. LibLex
It is argued however, that as to the petitioners Emma, Luz and Nelda who are
not the registered co-owners but merely represented their deceased mother, the
late Nenita Bailon, prescription lies. Respondents bolster their argument by
citing a decision of this Court in Pasion v. Pasion [G.R. No. L-15757, May 31,
1961, 2 SCRA 486, 489] holding that "the imprescriptibility of a Torrens title
can only be invoked by the person in whose name the title is registered" and that
"one who is not the registered owner of a parcel of land cannot invoke
imprescriptibility of action to claim the same."
Reliance on the aforesaid Pasion case is futile. The ruling therein applies only
against transferees other than direct issues or heirs or to complete strangers. The
rationale is clear:
If prescription is unavailing against the registered owner, it
must be equally unavailing against the latter's hereditary
successors, because they merely step into the shoes of the
decedent by operation of law (New Civil Code, Article 777;
Old Civil Code,Article 657), the title or right undergoing no
change by its transmission mortis causa. [Atus, et al., v.
Nunez, et al., 97 Phil. 762, 764].
The latest pronouncement of this Court in Umbay v. Alecha [G.R. No. 67284,
March 18, 1985, 135 SCRA 427, 429], which was promulgated subsequent to
thePasion case reiterated the Atus doctrine. Thus:
Prescription is unavailing not only against the registered
owner but also against his hereditary successors, because
they merely step into the shoes of the decedent by operation
of law and are merely the continuation of the personality of
their predecessor-in-interest. [Barcelona v. Barcelona, 100
Phil. 251, 257].
Laches is likewise unavailing as a shield against the action of herein petitioners.
Well-stated in this jurisdiction are the four basic elements of laches, namely: (1)
conduct on the part of the defendant or of one under whom he claims, giving rise
to the situation of which complaint is made and for which the complainant seeks
a remedy; (2) delay in asserting the complainant's rights, the complainant having
had knowledge or notice of the defendant's conduct and having been afforded an
opportunity to institute suit; (3) lack of knowledge or notice on the part of the
defendant that the complainant would assert the right on which he bases his suit;
and, (4) injury or prejudice to the defendant in the event relief is accorded to the
complainant, or the suit is not held to be barred [Go Chi Gun, et al. v. Co Cho, et
al., 96 Phil. 622 (1955)].
While the first and last elements are present in this case, the second and third
elements are missing.
The second element speaks of delay in asserting the complainant's rights.
However, the mere fact of delay is insufficient to constitute, laches. It is required
that (1) complainant must have had knowledge of the conduct of defendant or of
one under whom he claims and (2) he must have been afforded anopportunity to
institute suit. This court has pointed out that laches is not concerned with the
mere lapse of time. Thus:
Laches has been defined as the failure or neglect, for an
unreasonable length of time to do that which by exercising
due diligence could or should have been done earlier; it is
negligence or omission to assert a right within a reasonable
time warranting a presumption that the party entitled to
assert it either has abandoned it or declined to assert it.
[Tijam, et al., v. Sibonghanoy, G.R. No. L-21450, April 25,
1968, 23 SCRA 29, 35; Tejido v. Zamacoma, G.R. No. L-
63048, August 7, 1985, 138 SCRA 73, 90]. cdphil
The doctrine of 'laches' or of 'stale demands' is based upon
grounds of public policy which requires for the peace of
society, the discouragement of stale claims and unlike the
statute of limitations, is not a mere question of time but is
principally a question of inequity or unfairness of permitting
67
 a right or claim to be enforced or asserted," [Tijam v.
Sibonghanoy, supra, p. 351. [Emphasis supplied.]
It must be noted that while there was delay in asserting petitioners' rights, such
delay was not attended with any knowledge of the sale nor with any opportunity
to bring suit. In the first place, petitioners had no notice of the sale made by their
eldest sister. It is undisputed that the petitioner co-owners had entrusted the care
and management of the parcel of land to Rosalia Bailon who was the oldest
among them [TSN, July 27, 1983, p. 14]. In fact, Nicanor Lee, a son of Rosalia,
who was presented as a witness by the plaintiffs-petitioners, testified on cross-
examination that his mother was only the administrator of the land as she is the
eldest and her brothers and sisters were away [TSN, October 5, 1983, p. 15].
Indeed, when Delia Bailon-Casilao left Sorsogon in 1942 after she got married,
it was only in 1983 that she returned. Sabina, on the other hand, is said to be
living in Zamboanga while Bernabe who left for China in 1931 has not been
heard from since then. Consequently, when Rosalia, from whom the private
respondent derived his title, made the disputed sales covering the entire
property, the herein petitioners were unaware thereof.
In the second place, they were not afforded an opportunity to bring suit
inasmuch as until 1981, they were kept in the dark about the transactions entered
into by their sister. It was only when Delia Bailon-Casilao returned to Sorsogon
in 1981 that she found out about the sales and immediately, she and her co-
petitioners filed the present action for recovery of property. The appellate court
thus erred in holding that "the petitioners did nothing to show interest in the
land." For the administration of the parcel of land was entrusted to the oldest co-
owner who was then in possession thereof precisely because the other co-owners
cannot attend to such a task as they reside outside of Sorsogon where the land is
situated. Her co-owners also allowed her to appropriate the entire produce for
herself because it was not even enough for her daily consumption [TSN, October
5, 1983, pp. 17-18]. And since petitioner was the one receiving the produce, it is
but natural that she was the one to take charge of paying the real estate taxes.
Now, if knowledge of the sale by Rosalia was conveyed to the petitioners only
later, they cannot be faulted for the acts of their co-owner who failed to live up
to the trust and confidence expected of her. In view of the lack of knowledge by
the petitioners of the conduct of Rosalia in selling the land without their consent
in 1975 and the absence of any opportunity to institute the proper action until
1981, laches may not be asserted against the petitioners. prLL
The third element of laches is likewise absent. There was no lack of knowledge
or notice on the part of the defendant that the complainants would assert the
right on which they base the suit. On the contrary, private respondent is guilty of
bad faith in purchasing the property as he knew that the property was co-owned
by six persons and yet, there were only two signatories to the deeds of sale and
no special authorization to sell was granted to the two sellers by the other co-
owners.
Even as the land here was misrepresented in the deeds of sale as "unregistered,"
the truth was that Afable already had notice that the land was titled in the name
of six persons by virtue of the Certificate of Title which was already in his
possession even before the sale. Such fact is apparent from his testimony before
the court a quo:
COURT:
Q From whom did you get the certificate of Title?
A When it was mortgaged by Ponciana Aresgado.
Q It was mortgaged to you before you bought it?
A Yes, Your Honor. (TSN, March 5, 1984, p. 12) When
cross-examined, he stated:
Q Mr. Witness, the original Certificate of Title was given to
you in the year 1974, was it not?
A 1975.
Q In 1975, you already discovered that the title was in the
name of several persons, is it not?
A Yes, sir.
Q When you discovered that it is in the name of several
persons, you filed a case in court for authority to
cancel the title to be transferred in your name, is it
not?
A Yes, sir. LLjur
Q And that was denied by the Court of First Instance of
Sorsogon because there was only one signatory to
the deed of sale instead of six, was it not?
68
 A Not one but two signatories.
[Decision of the Regional Trial Court of Sorsogon, Rollo, p.
35]
Such actual knowledge of the existence of other co-owners in whose names the
lot subject of the sale was registered should have prompted a searching inquiry
by Afable considering the well-known rule in this jurisdiction that:
. . . a person dealing with a registered land has a right to rely
upon the face of the Torrens certificate of title and to
dispense with the need of inquiring further, except when the
party concerned has actual knowledge of facts and
circumstances that would impel a reasonably cautious man
to make such inquiry. [Gonzales v. IAC and Rural Bank of
Pavia, Inc., G.R. No. 69622, January 29, 1988].
Moreover, the undisputed fact is that petitioners are relatives of his wife. As a
genuine gesture of good faith, he should have contacted the petitioners who were
still listed as co-owners in the certificate of title which was already in his
possession even before the sale. In failing to exercise even a minimum degree of
ordinary prudence required by the situation, he is deemed to have bought the lot
at his own risk. Hence any prejudice or injury that may be occasioned to him by
such sale must be borne by him.
Indeed, aware of the flaws impairing his title, Afable went to the herein
petitioner Delia Bailon-Casilao, asking the latter to sign a document obviously
to cure the flaw [TSN, July 27, 1983, p. 6]. Later, he even filed a petition in the
Court of First Instance to register the title in his name which was denied as
aforesaid.
It may be gleaned from the foregoing examination of the facts that Celestino
Afable is not a buyer in good faith. Laches being an equitable defense, he who
invokes it must come to the court with clean hands. Cdpr
WHEREFORE, the petition for certiorari is hereby GRANTED, the challenged
decision of the Court of Appeals is SET ASIDE, and the decision of the trial
court is REINSTATED. SO ORDERED.
[G.R. No. 75886. August 30, 1988.]
CONCEPCION ROQUE, petitioner, vs. HON. INTERMEDIATE
APPELLATE COURT, ERNESTO ROQUE, FILOMENA
OSMUNDO, CECILIA ROQUE, MARCELA ROQUE, JOSE
ROQUE and RUBEN ROQUE, respondents.
SYLLABUS
1. REMEDIAL LAW; ACTION; PARTITION; NATURE. — An action for
partition —which is typically brought by a person claiming to be co-owner of a
specified property against a defendant or defendants whom the plaintiff
recognizes to be co-owners — may be seen to present simultaneously two
principal issues. First, there is the issue of whether the plaintiff is indeed a co-
owner of the property sought to be partitioned. Second, assuming that the
plaintiff successfully hurdles the first issue, there is the secondary issue of how
the property is to be divided between plaintiff and defendant(s) — i.e., what
portion should go to which co-owner.
2. ID.; ID.; ID.; ID.; CLAIM OF AN ADVERSE TITLE TO THE PROPERTY
SUBJECT OF PARTITION WILL NOT RESULT IN THE DISMISSAL OF
AN ACTION THEREFOR; CASE AT BAR. — Should the trial court find that
the defendants do not dispute the status of the plaintiff as co-owner, the court
can forthwith proceed to the actual partitioning of the property involved. In case
the defendants assert in their Answer exclusive title in themselves adversely to
the plaintiff, the court should not dismiss the plaintiff's action for partition but,
on the contrary and in the exercise of its general jurisdiction, resolve the
question of whether the plaintiff is co-owner or not. Should the trial court find
that the plaintiff was unable to sustain his claimed status as co-owner, or that the
defendants are or have become the sole and exclusive owners of the property
involved, the court will necessarily have to dismiss the action for partition. This
result would be reached, not because the wrong action was commenced by the
plaintiff, but rather because the plaintiff having been unable to show co-
ownership rights in himself, no basis exists for requiring the defendants to
submit to partition the property at stake. If, upon the other hand, the court after
trial should find the existence of co-ownership among the parties litigant, the
court may and should order the partition of the property in the same action.
Judgment for one or the other party being on the merits, the losing party
(respondents in this case) may then appeal the same. In either case, however, it
is quite unnecessary to require the plaintiff to file another action, separate and
independent from that for partition originally instituted. Functionally, an action
69
for partition may be seen to be at once an action for declaration of co-ownership
and for segregation and conveyance of a determinate portion of the property
involved. This is the import of our jurisprudence on the matter and is sustained
by the public policy which abhors multiplicity of actions.
3. CIVIL LAW; PRESCRIPTION OF ACTION; PARTITION; GENERALLY,
AN ACTION THEREFOR DOES NOT PRESCRIBE; EXCEPTION, CASE AT
BAR. — The question of prescription also needs to be addressed in this
connection. It is sometimes said that "the action for partition of the thing owned
in common (actio communi dividendo or actio familiae erciscundae) does not
prescribe." This statement bears some refinement. In the words of Article 494 of
the Civil Code, "each co-owner may demand at any time the partition of the
thing owned in common, insofar as his share is concerned." No matter how long
the co-ownership has lasted, a co-owner can always opt out of the co-ownership,
and provided the defendant co-owners or co-heirs have theretofore expressly or
impliedly recognized the co-ownership, they cannot set up as a defense the
prescription of the action for partition. But if the defendants show that they had
previously asserted title in themselves adversely to the plaintiff and for the
requisite period of time, the plaintiffs right to require recognition of his status as
a co-owner will have been lost by prescription and the court cannot issue an
order requiring partition. This is precisely what happened in Jardin
v. Hallasgo,117 SCRA 532 (1982), which the respondent appellate court cited to
support its position quoted above.
4. ID.; PROPERTY; ACQUISITIVE PRESCRIPTION; UNREASONABLE
LONG INACTION; EFFECT; CASE AT BAR. — The facts on record clearly
show that petitioner Concepcion Roque had been in actual, open and continuous
possession of a three-fourths (3/4) portion of Lot No. 1549 ever since execution
of the "Bilihan Lubos at Patuluyan" in November of 1961. The Court notes that
it was only in their Answer with Compulsory Counterclaim filed with the trial
court in December of 1977 — more than sixteen (16) years later — that
respondents first questioned the genuineness and authenticity of the "Bilihan
Lubos at Patuluyan." Not once during those sixteen (16) years did respondents
contest petitioner's occupation of a three-fourths (3/4) portion of Lot No. 1549.
Furthermore, if indeed it is true that respondents, as they claim, are the absolute
owners of the whole of Lot No. 1549, it is most unusual that respondents would
have allowed or tolerated such prolonged occupation by petitioner of a major
portion (3/4) of the land while they, upon the other hand, contented themselves
with occupation of only a fourth thereof. This latter circumstance, coupled with
the passage of a very substantial length of time during which petitioner all the
while remained undisturbed and uninterrupted in her occupation and possession,
places respondents here in laches: respondents may no longer dispute the
existence of the co-ownership between petitioner and themselves nor the validity
of petitioner's claim of a three-fourths (3/4) interest in Lot No. 1549, as they are
deemed, by their unreasonably long inaction, to have acquiesced in the co-
ownership.
The subject of the present Petition for Review is the 31 July 1986 Decision of
the former Intermediate Appellate Court in AC-G.R. CV No. 02248 (entitled,
"Concepcion Roque, plaintiff-appellee, vs. Ernesto Roque, Filomena Osmundo,
Cecilia Roque, Marcela Roque, Jose Roque and Ruben Roque, defendants-
appellants") which reversed and set aside on appeal the decision of the Regional
Trial Court of Malolos, Branch 9.
The controversy here involves a 312 square meter parcel of land situated in San
Juan, Malolos, Bulacan and designated as Lot No. 1549 of the Cadastral Survey
of Malolos. The property was registered originally in the name of Januario
Avendaño, a bachelor who died intestate and without issue on 22 October 1945.
On 21 September 1959, the intestate heirs of Januario Avendaño executed a
document entitled "Paghahati at Pagtagabuyan ng Mana sa Labas ng
Hukuman."1 Through this instrument, extrajudicial partition of Lot No. 1549
was effected among the intestate heirs as follows:
a. One-fourth (1/4) undivided portion to Illuminada
Avendaño.
b. One-fourth (1/4) undivided portion to Gregorio Avendaño
and Miguel Avendaño.
c. One-fourth (1/4) undivided portion to Bernardino,
Bienvenido, Numeriano and Rufina, all surnamed
Avendaño.
d. One-fourth (1/4) undivided portion to respondent Ernesto
Roque and Victor Roque. 2
On 28 September 1959, co-owners Illuminada, Gregorio, Miguel, Bernardino,
Bienvenido, Numeriano and Rufina, all surnamed Avendaño, in consideration of
the aggregate amount of P500.00, transferred their collective and undivided
three-fourths (3/4) share in Lot No. 1549 to respondent Ernesto Roque and
Victor Roque, thereby vesting in the latter full and complete ownership of the
70
property. The transactions were embodied in two (2) separate deeds of sale both
entitled "Kasulatan ng Bilihang Patuluyan" 3 and both duly notarized.
Subsequently, in an unnotarized "Bilihan Lubos at Patuluyan 4 dated 27
November 1961, Ernesto and Victor Roque purportedly sold a three-fourths
(3/4) undivided portion of Lot No. 1549 to their half-sister, petitioner
Concepcion Roque, for the same amount. The property, however, remained
registered in the name of the decedent, Januario Avendaño.
Upon the instance of petitioner Concepcion Roque and allegedly of respondent
Ernesto Roque, Lot No. 1549 was surveyed on 20 September 1975. Consequent
thereto, a Subdivision Plan 5 was drawn up by the Geodetic Engineer identifying
and delineating a one-fourth (1/4) portion (78 square meters) of the property as
belonging to respondent Ernesto Roque and Victor Roque (who had died on 14
April 1962), upon the one hand, and a three-fourths (3/4) portion (234 square
meters) of the same property as belonging to petitioner Concepcion Roque, upon
the other hand. Petitioner claimed that preparation of the Subdivision Plan,
which was approved on 3 November 1975 by the Land Registration Commission
was a preliminary step leading eventually to partition of Lot No. 1549, partition
allegedly having been previously agreed upon inter se by the co-owners.
Respondents Ernesto Roque and the legal heirs of Victor Roque, however,
refused to acknowledge petitioner's claim of ownership of any portion of Lot
No. 1549 and rejected the plan to divide the land.
Attempts at amicable settlement having fallen through, petitioner Concepcion
Roque, on 6 December 1977, filed a Complaint for "Partition with Specific
Performance" 6 (docketed as Civil Case No. 5236-M) with Branch 2 of the
Court of First Instance of Malolos against respondents Ernesto Roque and the
heirs of Victor Roque" In her complaint, petitioner (plaintiff below) claimed
legal ownership of an undivided three-fourths (3/4) portion of Lot No. 1549 by
virtue of the 27 November 1961 "Bilihan Lubos at Patuluyan" executed in her
favor by Ernesto Roque and the heirs of Victor Roque. In support of this claim,
petitioner also presented an undated and unauthorized "Kasulatang Pagkilala sa
Bilihan Patuluyan ng Bahagui at Pagmamana sa Labas ng Hukuman at
Paghahati-hati at Abuyan ng Bahagui" 7 said to have been signed by the
respondents in acknowledgment of the existence and validity of the Bilihan in
favor of petitioner. Finally, petitioner alleged that, as a co-owner of Lot No.
1549, she had a right to seek partition of the property, that she could not be
compelled to remain in the co-ownership of the same.
In an Answer with Compulsory Counterclaim 8 filed on 28 December
1977(defendants below) impugned the genuineness and due execution of the
"Bilihan Lubos at Patuluyan" dated 27 November 1961 on the ground "that the
signatures appearing thereon are not the authentic signatures of the supposed
signatories . . ." It was also alleged that petitioner Concepcion Roque, far from
being a co-owner of Lot No. 1549, "occupied a portion of the lot in question by
mere tolerance of the [defendants]." Respondents also refused to honor the
unnotarized Kasulatan and, additionally, denied having had any participation in
the preparation of the Subdivision Plan.
On 27 June 1983, the trial court (now Branch 9, Regional Trial Court of
Malolos) rendered a Decision, 9 the dispositive portion of which read:
"WHEREFORE, judgment is hereby rendered, in favor of
the plaintiff and against the defendants;
1. Ordering the heirs of the late Victor Roque namely
Filomena Osmundo, his spouse, his children, Cecilia Roque,
Marcela Roque, Jose Roque and Ruben Roque and their
uncle and co-defendant Ernesto Roque, to execute a deed of
confirmation of the sale made by Ernesto and Victor Roque
in favor of plaintiff Concepcion Roque, entitled "Bilihan
Lubos at Patuluyan" execute on November 27, 1961, Exh. E
over the 3/4 portion of the subject property;
2. Ordering the partition of the parcel of land described in
par. 3 of the complaint covered by the Original Certificate
of Title No. 1442-Bulacan issued in the name of Janurio
Avendaño, in the proportion of 3/4 to pertain to Concepcion
Roque, and 1/4 to pertain to Ernesto Roque and his co-
defendants, his sister-in-law, nephews and nieces, in
accordance with the approved subdivision plan (LRC Psd-
230726).
3. Ordering defendants, jointly and severally, to pay to
plaintiff the sum of P2,000.00 as and for attorney's fees and
the costs of suit.
SO ORDERED.
The respondents appealed from this decision alleging the following
errors:
"I
71
 The lower court erred when it decided and ordered
defendants-appellants to execute a confirmation of the
"Bilihan Lubos at Patuluyan," Exh. "E."
II
The lower court erred when it decided and ordered the
defendants-appellants to deliver unto the plaintiff [a] 3/4
share of the land in question.
III
The lower court erred in deciding this case in favor of the
plaintiff-appellee, based on an unnotarized and forged
signature of defendant-appellant Ernesto Roque.
IV
The lower court erred in giving credence to the testimony of
the plaintiff-appellee Concepcion Roque despite [its] gross
inconsistencies." 10
Acting on the appeal (docketed as A.C.-G.R. CV No. 02248), the Intermediate
Appellate Court, in a Decision 11 dated 31 July 1986, reversed the judgment of
the trial court and dismissed both the petitioner's complaint and the respondents'
appeal. A Motion for Reconsideration of petitioner Concepcion Roque was
denied.
The present Petition for Review was filed with this Court on 18 September
1986. In a resolution dated 27 July 1987, we gave due course to the Petition and
required the parties to submit their respective Memoranda.
1. On the matter of dismissal of petitioner's complaint, the Intermediate
Appellate Court stated in its decision:
"While the action filed by the plaintiff is for partition, the
defendants, after denying plaintiff's assertion of co-
ownership, asserted that they are the exclusive and sole
owners of the 3/4 portion of the parcel of land claimed by
the plaintiff.
Upon the issue thus joined by the pleadings, it is obvious
that the case has become one of ownership of the disputed
portion of the subject lot.
It is well settled that an action for partition will not prosper
as such from the moment an alleged co-owner asserts an
adverse title. The action that may be brought by an
aggrieved co-owner is accion reivindicatoria or action for
recovery of title and possession (Jardin vs. Hallasgo, 117
SCRA 532, 536, 537; Paner vs. Gaspar, 3 CA Rep. 155,
158)." (Emphasis supplied).
Viewed in the light of the facts of the present case, the Intermediate Appellate
Court's decision appears to imply that from the moment respondents (defendants
below) alleged absolute and exclusive ownership of the whole of Lot No. 1549
in their Answer, the trial court should have immediately ordered the dismissal of
the action for partition and petitioner (plaintiff below), if she so desired, should
have refiled the case but this time as an accion reivindicatoria. Taking this
analysis a step further should the reivindicatory action prosper — i.e., a co-
ownership relation is found to have existed between the parties — a second
action for partition would still have to be instituted in order to effect division of
the property among the co-owners.
We do not agree with the above view. An action for partition — which is
typically brought by a person claiming to be co-owner of a specified property
against a defendant or defendants whom the plaintiff recognizes to be co-owners
— may be seen to present simultaneously two principal issues. First, there is the
issue of whether the plaintiff is indeed a co-owner of the property sought to be
partitioned. Second, assuming that the plaintiff successfully hurdles the first
issue, there is the secondary issue of how the property is to be divided between
plaintiff and defendant(s) — i.e., what portion should go to which co-owner.
Should the trial court find that the defendants do not dispute the status of the
plaintiff as co-owner, the court can forthwith proceed to the actual partitioning
of the property involved. In case the defendants assert in their Answer exclusive
title in themselves adversely to the plaintiff, the court should not dismiss the
plaintiff's action for partition but, on the contrary and in the exercise of its
general jurisdiction, resolve the question of whether the plaintiff is co-owner or
not. Should the trial court find that the plaintiff was unable to sustain his claimed
status as co-owner, or that the defendants are or have become the sole and
exclusive owners of the property involved, the court will necessarily have to
dismiss the action for partition. This result would be reached, not because the
wrong action was commenced by the plaintiff, but rather because the plaintiff
having been unable to show co-ownership rights in himself, no basis exists for
requiring the defendants to submit to partition the property at stake. If, upon the
72
other hand, the court after trial should find the existence of co-ownership among
the parties litigant, the court may and should order the partition of the property
in the same action. Judgment for one or the other party being on the merits, the
losing party (respondents in this case) may then appeal the same. In either case,
however, it is quite unnecessary to require the plaintiff to file another action,
separate and independent from that for partition originally instituted.
Functionally, an action for partition may be seen to be at once an action for
declaration of co-ownership and for segregation and conveyance of a
determinate portion of the property involved. This is the import of our
jurisprudence on the matter 12 and is sustained by the public policy which
abhors multiplicity of actions.
The question of prescription also needs to be addressed in this connection. It is
sometimes said that "the action for partition of the thing owned in common
(actio communi dividendo or actio familiae erciscundae) does not
prescribe." 13 This statement bears some refinement. In the words of Article 494
of the Civil Code, "each co-owner may demand at any time the partition of the
thing owned in common, insofar as his share is concerned." No matter how long
the co-ownership has lasted, a co-owner can always opt out of the co-ownership,
and provided the defendant co-owners or co-heirs have theretofore expressly or
impliedly recognized the co-ownership, they cannot set up as a defense the
prescription of the action for partition. But if the defendants show that they had
previously asserted title in themselves adversely to the plaintiff and for the
requisite period of time, the plaintiffs right to require recognition of his status as
a co-owner will have been lost by prescription and the court cannot issue an
order requiring partition. This is precisely what happened in Jardin v.
Hallasgo, 117 SCRA 532 (1982), which the respondent appellate court cited to
support its position quoted above.
The case of Jardin involved, among others, two (2) parcels of land which were
inherited in 1920 by the brothers Catalino Jardin and Galo Jardin together with
their half-brother, Sixto Hallasgo. The three (3) held these lands in co-ownership
until Sixto later (the date was not specified) repudiated the co-ownership and
occupied and possessed both parcels of land, claiming the same exclusively as
his own. Sometime in 1973, the heirs of Catalino and Galo instituted an action
for partition of the two (2) properties against Sixto's heirs, who had refused to
surrender any portion of the same to the former. The trial court, assuming that
prescription had started to run in that case even before the Civil Code took
effect, held that the action for partition filed by the heirs of Catalino and Galo
had already prescribed. On appeal, this Court affirmed the trial court on this
point in the following terms:
"Article 494 of the Civil Code provides that 'no co-owner
shall be obliged to remain in the co-ownership' and that
'each co owner may demand at any time the partition of the
thing owned in common, insofar as his share is concerned.'
It also provides that 'no prescription shall run in favor of a
co-owner or co-heir against his co-owners or co-heirs so
long as he expressly or impliedly recognizes the co-
ownership.'
While the action for the partition of the thing owned in
common (actio communi dividendo or actio familiae
erciscundae) does not prescribe, the co-ownership does not
last forever since it may be repudiated by a co-owner [i.e.,
Sixto]. In such a case, the action for partition does not
lie. What may be brought by the aggrieved co-owner [i.e.,
the heirs of Catalino and Galo] is an accion reivindicatoria
or action for recovery of title and possession. That action
may be barred by prescription.
'If the co-heir or co-owner having possession of the
hereditary or community property, holds the same in his
own name, that is, under claim of exclusive ownership, he
may acquire the property by prescription if his possession
meets all the other requirements of the law, and after the
expiration of the prescriptive period, his co-heir or co-owner
may lose their right to demand partition, and their action
may then be held to have prescribed (De los Santos vs.
Santa Teresa, 44 Phil. 811).'
xxx xxx xxx" (Emphasis supplied).
In the light of the foregoing discussion, it will be seen that the underscored
portion of the Court's opinion in Jardin is actually obiter. For there, the Court
simply held the action for partition by the heirs of Catalino and Galo had
prescribed and did not require such heirs to start a new action (which would
have been quite pointless); on the other hand, the Court remanded the case to the
lower court for further proceedings in respect of the recovery of a 350 square
meter lot which the evidence showed was owned by the plaintiffs but wrongfully
included by Sixto in the cadastral survey of his share of the adjoining lot.
73
In Jardin, the claim of co-ownership asserted by the heirs of Catalino and Galo
was effectively refuted by the heirs of Sixto, who not only claimed for
themselves absolute and exclusive ownership of the disputed properties but were
also in actual and adverse possession thereof for a substantial length of time.
The Court found, further, that the action for partition initially available to the
heirs of Catalino and Galo had, as a result of the preceding circumstance,
already prescribed.
An entirely different situation, however, obtains in the case at bar. First of all,
petitioner Concepcion Roque — the co-owner seeking partition — has been and
is presently in open and continuous possession of a three-fourths (3/4) portion of
the property owned in common. The Court notes in this respect the finding of
the trial court that petitioner, following execution of the "Bilihan Lubos at
Patuluyan" on 27 November 1961, had been in "continuous occupancy of the 3/4
portion of the lot . . . up to the present, and whereon plaintiffs house and that of
her son are erected." 14 Respondents do not dispute this finding of fact, although
they would claim that petitioner's possession is merely tolerated by them.
Second, prior to filing in 1977 of the Complaint in Civil Case No. 5236-
M,neither of the parties involved had asserted or manifested a claim of absolute
and exclusive ownership over the whole of Lot No. 1549 adverse to that of any
of the other co-owners: in other words, co-ownership of the property had
continued to be recognized by all the owners. Consequently, the action for
partition could not have and, as a matter of fact, had not yet prescribed at the
time of institution by Concepcion of the action below.
2. Coming now to the matter regarding dismissal of the respondents' appeal, the
Intermediate Appellate Court held that inasmuch as the attack on the validity of
the "Bilihan Lubos at Patuluyan" was predicated on fraud and no action for
annulment of the document had been brought by respondents within the four (4)
year prescriptive period provided under Article 1391 of the Civil Code, such
action had already prescribed.
We find it unnecessary to deal here with the issue of prescription discussed by
the respondent court in its assailed decision. The facts on record clearly show
that petitioner Concepcion Roque had been in actual, open and continuous
possession of a three-fourths (3/4) portion of Lot No. 1549 ever since execution
of the "Bilihan Lubos at Patuluyan" in November of 1961. The Court notes that
it was only in their Answer with Compulsory Counterclaim filed with the trial
court in December of 1977 — more than sixteen (16) years later — that
respondents first questioned the genuineness and authenticity of the "Bilihan
Lubos at Patuluyan." Not once during those sixteen (16) years did respondents
contest petitioner's occupation of a three-fourths (3/4) portion of Lot No. 1549.
Furthermore, if indeed it is true that respondents, as they claim, are the absolute
owners of the whole of Lot No. 1549, it is most unusual that respondents would
have allowed or tolerated such prolonged occupation by petitioner of a major
portion (3/4) of the land while they, upon the other hand, contented themselves
with occupation of only a fourth thereof. This latter circumstance, coupled with
the passage of a very substantial length of time during which petitioner all the
while remained undisturbed and uninterrupted in her occupation and possession,
places respondents here in laches: respondents may no longer dispute the
existence of the co-ownership between petitioner and themselves nor the validity
of petitioner's claim of a three-fourths (3/4) interest in Lot No. 1549, as they are
deemed, by their unreasonably long inaction, to have acquiesced in the co-
ownership. 15 In this respect, we affirm the decision of the respondent appellate
court presently under review.
WHEREFORE, the Decision of the Intermediate Appellate Court dated 31 July
1986 in A.C.-G.R. CV No. 02248 is SET ASIDE with respect to that portion
which orders the dismissal of the Complaint in Civil Case No. 5236-M, but is
AFFIRMED with respect to that portion which orders the dismissal of the
respondents' appeal in A.C. — G.R. CV No. 02248. The Decision of Branch 9 of
the Regional Trial Court of Malolos dated 27 June 1983 in Civil Case No. 5236-
M is hereby REINSTATED. No pronouncement as to costs. SO ORDERED.
[G.R. No. 46296. September 24, 1991.]
EPITACIO DELIMA, PACIANO DELIMA, FIDEL DELIMA,
VIRGILIO DELIMA, GALILEO DELIMA, JR., BIBIANO
BACUS, OLIMPIO BACUS and PURIFICACION
BACUS, petitioners, vs. HON. COURT OF APPEALS, GELILEO
DELIMA (deceased), substituted by his legal heirs, namely;
FLAVIANA VDA. DE DELIMA, LILY D. ARIAS, HELEN
NIADAS, ANTONIO DELIMA, DIONISIO DELIMA, IRENEA
DELIMA, ESTER DELIMA AND FELY DELIMA, respondents.
This is a petition for review on certiorari of the decision of the Court of Appeals
reversing the trial court's judgment which declared as null and void the
certificate of title in the name of respondents' predecessor and which ordered the
partition of the disputed lot among the parties as co-owners.
74
The antecedent facts of the case as found both by the respondent appellate court
and by the trial court are as follows:
During his lifetime, Lino Delima acquired Lot No. 7758 of the Talisay-
Minglanilla Friar Lands Estate in Cebu by sale on installments from the
government. Lino Delima later died in 1921 leaving as his only heirs three
brothers and a sister namely: Eulalio Delima, Juanita Delima, Galileo Delima
and Vicente Delima. After his death, TCT No. 2744 of the property in question
was issued on August 3, 1953 in the name of "The Legal Heirs of Lino Delima,
deceased, represented by Galileo Delima."
On September 22, 1953, Galileo Delima, now substituted by respondents,
executed an affidavit of "Extra-judicial Declaration of Heirs." Based on this
affidavit, TCT No. 2744 was cancelled and TCT No. 3009 was issued on
February 4, 1954 in the name of Galileo Delima alone to the exclusion of the
other heirs.
Galileo Delima declared the lot in his name for taxation purposes and paid the
taxes thereon from 1954 to 1965.
On February 29, 1968, petitioners, who are the surviving heirs of Eulalio and
Juanita Delima, filed With the Court of First Instance of Cebu (now Regional
Trial Court) an action for reconveyance and/or partition of property and for the
annulment of TCT No. 3009 with damages against their uncles Galileo Delima
and Vicente Delima,. Vicente Delima was joined as party defendant by the
petitioners for his refusal to join the latter in their action.
On January 16, 1970, the trial court rendered a decision in favor of petitioners,
the dispositive portion of which states: cdphil
"IN VIEW OF THE FOREGOING CONSIDERATIONS,
the following are the declared owners of Lot No. 7758 of the
Talisay-Minglanilla Friar Lands Estate presently covered by
Transfer Certificate of Title No. 3009, each sharing a pro-
indiviso share of one-fourth;
1) Vicente Delima (one-fourth)
2) Heirs of Juanita Delima, namely: Bibiano Bacus, Olimpio
Bacus and Purificacion Bacus (one-fourth),
3) Heirs of Eulalio Delima, namely Epitacio, Paciano, Fidel,
Virgilio and Galileo Jr., all surnamed Delima (one-fourth);
and
4) The Heirs of Galileo Delima, namely Flaviana Vda. de
Delima, Lily D. Arias, Helen Niadas, and Dionisio, Antonio,
Eotu, Irenea, and Fely, all surnamed Delima (one-fourth).
"Transfer Certificate of Title No. 3009 is declared null and
void and the Register of Deeds of Cebu is ordered to cancel
the same and issue in lieu thereof another title with the
above heirs as pro-indiviso owners.
"After the payment of taxes paid by Galileo Delima since
1958, the heirs of Galileo Delima are ordered to turn over to
the other heirs their respective shares of the fruits of the lot
in question computed at P170.00 per year up to the present
time with legal (interest).
"Within sixty (60) days from receipt of this decision the
parties are ordered to petition the lot in question and the
defendants are directed to immediately turn over possession
of the shares here awarded to the respective heirs.
"Defendants are condemned to pay the costs of the suit.
"The counterclaim is dismissed.
"SO ORDERED." (pp. 54-55, Rollo).
Not satisfied with the decision, respondents appealed to the Court of Appeals.
On May 19, 1977, respondent appellate court reversed the trial court's decision
and upheld the claim of Galileo Delima that all the other brothers and sister of
Lino Delima, namely Eulalio, Juanita and Vicente, had already relinquished and
waived their rights to the property in his favor, considering that he (Galileo
Delima) alone paid the remaining balance of the purchase price of the lot and the
realty taxes thereon (p. 26, Rollo).
Hence, this petition was filed with the petitioners alleging that the Court of
Appeals erred:
"1) In not holding that the right of a co-heir to demand
partition of inheritance is imprescriptible. If it does, the
75
 defenses of prescription and laches have already been
waived.
"2) In disregarding the evidence of the petitioners." (p.
13, Rollo).
The issue to be resolved in the instant case is whether or not petitioners' action
for partition is already barred by the statutory period provided by law which
shall enable Galileo Delima to perfect his claim of ownership by acquisitive
prescription to the exclusion of petitioners from their shares in the disputed
property. LLpr
Article 494 of the Civil Code expressly provides:
"Art. 494. No co-owner shall be obliged to remain in the co-
ownership. Each co-owner may demand at any time the
partition of the thing owned in common, insofar as his share
is concerned.
"Nevertheless, an agreement to keep the thing undivided for
a certain period of time, not exceeding ten years, shall be
valid. This term may be extended by a new agreement.
"A donor or testator may prohibit partition for a period
which shall not exceed twenty years.
"Neither shall there be any partition when it is prohibited by
law.
"No prescription shall run in favor of a co-owner or co-heir
against his co-owners or co-heirs so long as he expressly or
impliedly recognizes the co-ownership."
As a rule, possession by a co-owner will not be presumed to be adverse to the
others, but will be held to benefit all. It is understood that the co-owner or co-
heir who is in possession of an inheritance pro-indiviso for himself and in
representation of his co-owners or co-heirs, if, as such owner, he administers or
takes care of the rest thereof with the obligation of delivering it to his co-owners
or co-heirs, is under the same situation as a depository, a lessee or a trustee
(Bargayo v. Camumot, 40 Phil. 857; Segura v. Segura, No. L-29320, September
19, 1988, 165 SCRA 368). Thus, an action to compel partition may be filed at
any time by any of the co-owners against the actual possessor. In other words,
no prescription shall run in favor of a co-owner against his co-owners or co-heirs
so long as he expressly or impliedly recognizes the co-ownership (Del Blanco v.
Intermediate Appellate Court, No. 72694, December 1 , 1987, 156 SCRA 55).
However, from the moment one of the co-owners claims that he is the absolute
and exclusive owner of the properties and denies the others any share therein,
the question involved is no longer one of partition but of ownership (De Castro
v. Echarri, 20 Phil. 23; Bargayo v. Camumot, supra; De los Santos v. Santa
Teresa, 44 Phil. 811). In such case, the imprescriptibility of the action for
partition can no longer be invoked or applied when one of the co-owners has
adversely possessed the property as exclusive owner for a period sufficient to
vest ownership by prescription.
It is settled that possession by a co-owner or co-heir is that of a trustee. In order
that such possession is considered adverse to the cestui que trustamounting to a
repudiation of the co-ownership, the following elements must concur: 1) that the
trustee has performed unequivocal acts amounting to an ouster of the cestui que
trust; 2) that such positive acts of repudiation had been made known to
the cestui que trust; and 3) that the evidence thereon should be clear and
conclusive (Valdez v. Olorga, No. L-22571, May 25, 1973, 51 SCRA
71; Pangan v. Court of Appeals, No. L-39299, October 18, 1988, 166 SCRA
375).
We have held that when a co-owner of the property in question executed a deed
of partition and on the strength thereof obtained the cancellation of the title in
the name of their predecessor and the issuance of a new one wherein he appears
as the new owner of the property, thereby in effect denying or repudiating the
ownership of the other co-owners over their shares, the statute of limitations
started to run for the purposes of the action instituted by the latter seeking a
declaration of the existence of the co-ownership and of their rights thereunder
(Castillo v. Court of Appeals, No. L-18046, March 31, 1964, 10 SCRA 549).
Since an action for reconveyance of land based on implied or constructive trust
prescribes after ten (10) years, it is from the date of the issuance of such title that
the effective assertion of adverse title for purposes of the statute of limitations is
counted (Jaramil v. Court of Appeals, No. L-31858, August 31, 1977, 78 SCRA
420). LLphil
Evidence shows that TCT No. 2744 in the name of the legal heirs of Lino
Delima, represented by Galileo Delima, was cancelled by virtue of an affidavit
executed by Galileo Delima and that on February 4, 1954, Galileo Delima
obtained the issuance of a new title in his name numbered TCT No. 3009 to the
exclusion of his co-heirs. The issuance of this new title constituted an open and
clear repudiation of the trust or co-ownership, and the lapse of ten (10) years of
76
adverse possession by Galileo Delima from February 4, 1954 was sufficient to
vest title in him by prescription. As the certificate of title was notice to the
whole world of his exclusive title to the land, such rejection was binding on the
other heirs and started as against them the period of prescription. Hence, when
petitioners filed their action for reconveyance and/or to compel partition on
February 29, 1963, such action was already barred by prescription. Whatever
claims the other co-heirs could have validly asserted before can no longer be
invoked by them at this time.
ACCORDINGLY, the petition is hereby DENIED and the assailed decision of
the Court of Appeals dated May 19, 1977 is AFFIRMED. SO ORDERED.
[G.R. No. 76351. October 29, 1993.]
VIRGILIO B. AGUILAR, petitioner, vs. COURT OF APPEALS and
SENEN B. AGUILAR, respondents.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; PRE-TRIAL;
APPEARANCE OF PARTIES THEREIN; MANDATORY. — The law is clear
that the appearance of parties at the pre-trial is mandatory. A party who fails to
appear at a pre-trial conference may be non-suited or considered as in default. In
the case at bar, where private respondent and counsel failed to appear at the
scheduled pre-trial, the trial court has authority to declare respondent in default.
2. ID.; ID.; ID.; GRANT OR DENIAL OF POSTPONEMENT THEREOF;
SUBJECT TO THE SOUND DISCRETION OF THE TRIAL JUDGE; CASE
AT BAR. — Although respondent's counsel filed a motion to postpone pre-trial
hearing, the grant or denial thereof is within the sound discretion of the
trial court, which should take into account two factors in the grant or
denial of motions for postponement, namely: (a) the reason for the
postponement and (b) the merits of the caseof movant. In the instant case, the
trial court found the reason stated in the motion of counsel for respondent to
cancel the pre-trial to be without merit. Counsel's explanation that he had to go
to Iloilo by boat as early as 25 March 1979 to fetch his wife and accompany her
to a wedding in Dumaguete City on 27 April 1979 where she was one of the
principal sponsors, cannot be accepted. We find it insufficient to justify
postponement of the pre-trial, and the Courtof Appeals did not act wisely in
overruling the denial. We sustain the trial court and rule that it did not abuse its
discretion in denying the postponement for lack of merit. Certainly, to warrant a
postponement of a mandatory process as pre-trial would require much more than
mere attendance in a social function. It is time indeed we emphasize that there
should be much more than mere perfunctory treatment of the pre-trial procedure.
Its observance must be taken seriously if it is to attain its objective, i. e., the
speedy and inexpensive disposition of cases.
3. CIVIL LAW; CO-OWNERSHIP; RIGHT OF CO-OWNER OVER AN
INDIVISIBLE PROPERTY. — Article 494 of the Civil Code provides that no
co-owner shall be obliged to remain in the co-ownership, and that each co-owner
may demand at any time partition of the thing owned in common insofar as his
share is concerned. Corollary to this rule, Art. 498 of the Code states that
whenever the thing is essentially indivisible and the co-owners cannot agree that
it be allotted to one of them who shall indemnify the others, it shall be sold and
its proceeds accordingly distributed. This is resorted to (1) when the right to
partition the property is invoked by any of the co-owners but because of the
nature of the property it cannot be subdivided or its subdivision would prejudice
the interests of the co-owners, and (b) the co-owners are not in agreement as to
who among them shall be allotted or assigned the entire property upon proper
reimbursement of the co-owners. In one case, this Court upheld the order of the
trial court directing the holding of a public sale of the properties owned in
common pursuant to Art. 498 of the Civil Code. However, being a co-owner
respondent has the right to use the house and lot without paying any
compensation to petitioner, as he may use the property owned in common so
long as it is in accordance with the purpose for which it is intended and in a
manner not injurious to the interest of the other co-owners. Each co-
owner of property held pro indiviso exercises his rights over the whole property
and may use and enjoy the same with no other limitation than that he shall not
injure the interests of his co-owners, the reason being that until a division is
made, the respective share of each cannot be determined and every co-owner
exercises, together with his co-participants joint ownership over the pro
indiviso property, in addition to his use and enjoyment of the same.
4. ID.; ID.; TERMINATION THEREOF; EFFECT; CASE AT BAR. — Since
petitioner has decided to enforce his right in court to end the co-ownership of the
house and lot and respondent has not refuted the allegation that he has been
preventing the sale of the property by his continued occupancy of the premises,
justice and equity demand that respondent and his family vacate the property so
that the sale can be effected immediately. In fairness to petitioner, respondent
77
should pay a rental of P1,200.00 per month, with legal interest from the time the
trial court ordered him to vacate, for the use and enjoyment of the other
half of the property appertaining to petitioner. When petitioner filed an action to
compel the sale of the property and the trial courtgranted the petition and
ordered the ejectment of respondent, the co-ownership was deemed terminated
and the right to enjoy the possession jointly also ceased. Thereafter, the
continued stay of respondent and his family in the house prejudiced the
interest of petitioner as the property should have been sold and the proceeds
divided equally between them. To this extent and from then on, respondent
should be held liable for monthly rentals until he and his family vacate.
This is a petition for review on certiorari seeking to reverse and set aside the
Decision of the Court of Appeals in CA-GR CV No. 03933 declaring null and
void the orders of 23 and 26 April 1979, the judgment by default of 26 July
1979, and the order of 22 October 1979 of the then Court of First
Instance of Rizal, Pasay City, Branch 30, and directing the trial court to set the
case for pre-trial conference. LLjur
Petitioner Virgilio and respondent Senen are brothers; Virgilio is the
youngest of seven (7) children of the late Maximiano Aguilar, while Senen is the
fifth. On 28 October 1969, the two brothers purchased a house and lot in
Parañaque where their father could spend and enjoy his remaining years in a
peaceful neighborhood. Initially, the brothers agreed that Virgilio's share in the
co-ownership was two-thirds while that of Senen was one-third. By virtue of a
written memorandum dated 23 February 1970, Virgilio and Senen agreed that
henceforth their interests in the house and lot should be equal, with Senen
assuming the remaining mortgage obligation of the original owners with the
Social Security System (SSS) in exchange for his possession and
enjoyment of the house together with their father. llcd
Since Virgilio was then disqualified from obtaining a loan from SSS, the
brothers agreed that the deed of sale would be executed and the title registered in
the meantime in the name of Senen. It was further agreed that Senen would take
care of their father and his needs since Virgilio and his family were staying in
Cebu.
After Maximiano Aguilar died in 1974, petitioner demanded from private
respondent that the latter vacate the house and that the property be sold and
proceeds thereof divided among them.
Because of the refusal of respondent to give in to petitioner's demands, the latter
filed on 12 January 1979 an action to compel the sale of the house and lot so that
the they could divide the proceeds between them.
In his complaint, petitioner prayed that the proceeds of the sale be divided on the
basis of two-thirds (2/3) in his favor and one-third (1/3) to respondent. Petitioner
also prayed for monthly rentals for the use of the house by respondent after their
father died. cdphil
In his answer with counterclaim, respondent alleged that he had no objection to
the sale as long as the best selling price could be obtained; that if the sale would
be effected, the proceeds thereof should be divided equally; and, that being a co-
owner, he was entitled to the use and enjoyment of the property.
Upon issues being joined, the case was set for pre-trial on 26 April 1979 with
the lawyers of both parties notified of the pre-trial and served with the pre-trial
order, with private respondent executing a special power of attorney to his
lawyer to appear at the pre-trial and enter into any amicable settlement in his
behalf. 1
On 20 April 1979, Atty. Manuel S. Tonogbanua, counsel for respondent, filed a
motion to cancel pre-trial on the ground that he would be accompanying his wife
to Dumaguete City where she would be a principal sponsor in a wedding.
On 23 April 1979, finding the reasons of counsel to be without merit, the
trial court denied the motion and directed that the pre-trial should continue as
scheduled.
When the case was called for pre-trial as scheduled on 26 April 1979, plaintiff
and his counsel appeared. Defendant did not appear; neither his counsel in
whose favor he executed a special power of attorney to represent him at the pre-
trial. Consequently, the trial court, on motion of plaintiff, declared defendant as
in default and ordered reception of plaintiff's evidence ex parte.
On 7 May 1979, defendant through counsel filed an omnibus motion to
reconsider the order of default and to defer reception of evidence. The
trial courtdenied the motion and plaintiff presented his evidence.
On 26 July 1979, rendering judgment by default against defendant, the
trial court found him and plaintiff to be co-owners of the house and lot in equal
shares on the basis of their written agreement. However, it ruled that plaintiff
has been deprived of his participation in the property by defendant's continued
enjoyment of the house and lot, free of rent, despite demands for rentals and
78
continued maneuvers of defendant to delay partition. The trial court also upheld
the right of plaintiff as co-owner to demand partition. Since plaintiff could not
agree to the amount offered by defendant for the former's share, the
trial court held that the property should be sold to a third person and the
proceeds divided equally between the parties.
The trial court likewise ordered defendant to vacate the property and pay
plaintiff P1,200.00 as rentals 2 from January 1975 up to the date of decision plus
interest from the time the action was filed.
On 17 September 1979, defendant filed an omnibus motion for new trial but on
22 October 1979 the trial court denied the motion.
Defendant sought relief from the Court of Appeals praying that the following
orders and decision of the trial court be set aside: (a) the order of 23 April 1970
denying defendant's motion for postponement of the pre-trial set on 26 April
1979; (b) the order of 26 April 1979 declaring him in default and authorizing
plaintiff to present his evidence ex-parte; (c) the default judgment of 26 July
1979; and, (d) the order dated 22 October 1979 denying his omnibus motion for
new trial.
On 16 October 1986, the Court of Appeals set aside the order of the
trial court of 26 April 1979 as well as the assailed judgment rendered by default.
The appellate court found the explanation of counsel for defendant in his motion
to cancel pre-trial as satisfactory and devoid of a manifest intention to delay the
disposition of the case. It also ruled that the trial court should have granted the
motion for postponement filed by counsel for defendant who should not have
been declared as in default for the absence of his counsel. LLpr
Petitioner now comes to us alleging that the Court of Appeals erred (1) in not
holding that the motion of defendant through counsel to cancel the pre-trial was
dilatory in character and (2) in remanding the case to the trial court for pre-trial
and trial.
The issues to be resolved are: whether the trial court correctly declared
respondent as in default for his failure to appear at the pre-trial and in allowing
petitioner to present his evidence ex-parte, and whether the trial court correctly
rendered the default judgment against respondent.
We find merit in the petition.
As regards the first issue, the law is clear that the appearance of parties at the
pre-trial is mandatory. 3 A party who fails to appear at a pre-trial conference
may be non-suited or considered as in default. 4 In the case at bar, where private
respondent and counsel failed to appear at the scheduled pre-trial, the
trialcourt has authority to declare respondent in default. 5
Although respondent's counsel filed a motion to postpone pre-trial hearing, the
grant or denial thereof is within the sound discretion of the trial court, which
should take into account two factors in the grant or denial of motions for
postponement, namely: (a) the reason for the postponement and (b) the
merits ofthe case of movant. 6
In the instant case, the trial court found the reason stated in the
motion of counsel for respondent to cancel the pre-trial to be without merit.
Counsel's explanation that he had to go to Iloilo by boat as early as 25 March
1979 to fetch his wife and accompany her to a wedding in Dumaguete City on
27 April 1979 where she was one of the principal sponsors, cannot be accepted.
We find it insufficient to justify postponement of the pre-trial, and
the Court ofAppeals did not act wisely in overruling the denial. We sustain the
trial court and rule that it did not abuse its discretion in denying the
postponement for lackof merit. Certainly, to warrant a postponement of a
mandatory process as pre-trial would require much more than mere attendance
in a social function. It is time indeed we emphasize that there should be much
more than mere perfunctory treatment of the pre-trial procedure. Its observance
must be taken seriously if it is to attain its objective., i.e., the speedy and
inexpensive disposition of cases. LLpr
Moreover, the trial court denied the motion for postponement three (3) days
before the scheduled pre-trial. If, indeed, counsel for respondent could not attend
the pre-trial on the scheduled date, respondent at least should have personally
appeared in order not to be declared as in default. But, since nobody appeared
for him, the order of the trial court declaring him as in default and directing the
presentation of petitioner's evidence ex parte was proper. 7
With regard to the merits of the judgment of the trial court by default, which
respondent appellate court did not touch upon in resolving the appeal,
theCourt holds that on the basis of the pleadings of the parties and the evidence
presented ex parte, petitioner and respondents are co-owners of subject house
and lot in equal shares; either one of them may demand the same of the house
and lot at any time and the other cannot object to such demand; thereafter the
proceeds of the sale shall be divided equally according to their respective
interests.
79
Private respondent and his family refuse to pay monthly rentals to petitioner
from the time their father died in 1975 and to vacate the house so that it can be
sold to third persons. Petitioner alleges that respondent's continued stay in the
property hinders its disposal to the prejudice of petitioner. On the
part ofpetitioner, he claims that he should be paid two-thirds (2/3) of a monthly
rental of P2,400.00 or the sum of P1,600.00.
In resolving the dispute, the trial court ordered respondent to vacate the property
so that it could be sold to third persons and the proceeds divided between them
equally, and for respondent to pay petitioner one-half (1/2) of P2,400.00 or the
sum of P1,200.00 as monthly rental, conformably with their stipulated sharing
reflected in their written agreement.
We uphold the trial court in ruling in favor of petitioner, except as to the
effectivity of the payment of monthly rentals by respondent as co-owner which
we here declare to commence only after the trial court ordered respondent to
vacate in accordance with its order of 26 July 1979. LLphil
Article 494 of the Civil Code provides that no co-owner shall be obliged to
remain in the co-ownership, and that each co-owner may demand at any time
partition of the thing owned in common insofar as his share is concerned.
Corollary to this rule, Art. 498 of the Code states that whenever the thing is
essentially indivisible and the co-owners cannot agree that it be allotted to
one of them who shall indemnify the others, it shall be sold and its proceeds
accordingly distributed. This is resorted to (1) when the right to partition the
property is invoked by any of the co-owners but because of the nature of the
property it cannot be subdivided or its subdivision would prejudice the
interests of the co-owners, and (b) the co-owners are not in agreement as to who
among them shall be allotted or assigned the entire property upon proper
reimbursement of the co-owners. In one case, 8 this Court upheld the
order of the trial court directing the holding of a public sale of the properties
owned in common pursuant to Art. 498 of the Civil Code.
However, being a co-owner respondent has the right to use the house and lot
without paying any compensation to petitioner, as he may use the property
owned in common so long as it is in accordance with the purpose for which it is
intended and in a manner not injurious to the interest of the other co-owners. 9
Each co-owner of property held pro indiviso exercises his rights over the whole
property and may use and enjoy the same with no other limitation than that he
shall not injure the interests of his co-owners, the reason being that until a
division is made, the respective share of each cannot be determined and every
co-owner exercises, together with his co-participants joint ownership over
the pro indiviso property, in addition to his use and enjoyment of the same. 10
Since petitioner has decided to enforce his right in court to end the co-
ownership of the house and lot and respondent has not refuted the allegation that
he has been preventing the sale of the property by his continued
occupancy of the premises, justice and equity demand that respondent and his
family vacate the property so that the sale can be effected immediately. In
fairness to petitioner, respondent should pay a rental of P1,200.00 per month,
with legal interest from the time the trial court ordered him to vacate, for the use
and enjoyment of the other half of the property appertaining to petitioner.
When petitioner filed an action to compel the sale of the property and the
trial court granted the petition and ordered the ejectment of respondent, the co-
ownership was deemed terminated and the right to enjoy the possession jointly
also ceased. Thereafter, the continued stay of respondent and his family in the
house prejudiced the interest of petitioner as the property should have been sold
and the proceeds divided equally between them. To this extent and from then on,
respondent should be held liable for monthly rentals until he and his family
vacate.
WHEREFORE, the petition is GRANTED. The assailed
Decision of the Court of Appeals dated 16 October 1986 is REVERSED and
SET ASIDE. The decision of the trial court in Civil Case No. 6912-P dated 26
July 1979 is REINSTATED, with the modification that respondent Senen
B. Aguilar is ordered to vacate the premises in question within ninety (90) days
from receipt of this decision, and to pay petitioner Virgilio B. Aguilar a monthly
rental of P1,200.00 with interest at the legal rate from the time he received the
decision of the trial court directing him to vacate until he effectively leaves the
premises. LLpr
The trial court is further directed to take immediate steps to implement this
decision conformably with Art. 498 of the Civil Code and the Rules of Court.
This decision is final and executory. SO ORDERED.
[G.R. No. 124262. October 12, 1999.]
TOMAS CLAUDIO MEMORIAL COLLEGE, INC., petitioner, vs.
COURT OF APPEALS, HON. ALEJANDRO S. MARQUEZ,
CRISANTA DE CASTRO, ELPIDIA DE CASTRO, EFRINA DE
80
CASTRO, IRENEO DE CASTRO and ARTEMIO DE CASTRO
ADRIANO, respondents.
SYNOPSIS
Private respondents filed an action for Partition before the RTC of
Morong, Rizal, alleging that the land they inherited from their father was sold by
their brother Mariano to herein petitioner without their knowledge and consent.
Private respondents contended that the sale affected only the undivided share of
Mariano. Petitioner filed a motion to dismiss for lack of jurisdiction and
prescription. Allegedly, the RTC had no jurisdiction to try the case as the causes
of action therein had already been decided with finality by the Supreme Court in
another case. When the RTC still took cognizance of the case and the Court of
Appeals allowed the same, this special civil action of certiorari was availed of.
No grave abuse of discretion was committed by the public respondent.
Jurisdiction over the subject matter of a case is conferred by law and is
determined by the allegations of the complaint irrespective of whether plaintiff
is entitled to the claims asserted therein. Acquiring jurisdiction over the subject
matter of a case does not necessarily mean that the lower court meant to reverse
the decision of the Supreme Court in the earlier case. And, when the court acts
within its jurisdiction, any alleged errors committed in the exercise thereof will
amount to nothing more than errors of judgment which are reversible by timely
appeal and not by a special civil action of certiorari. THaAEC
SYLLABUS
1. REMEDIAL LAW; APPEAL AND CERTIORARI, WHEN
PROPER. — As long as a court acts within its jurisdiction, any alleged errors
committed in the exercise thereof will amount to nothing more than errors of
judgment which are revisable by timely appeal and not by a special civil action
of certiorari; because certiorari is not available to correct errors of procedure or
mistakes in the judge's findings and conclusions. And for a petition
for certiorari to be granted, it must be shown that the respondent court
committed grave abuse of discretion equivalent to lack or excess of jurisdiction.
By grave abuse of discretion is meant such capricious and whimsical exercise of
judgment as is equivalent to lack of jurisdiction, and mere abuse of discretion is
not enough — it must be grave.
2. ID.; JURISDICTION OVER THE SUBJECT MATTER OF A
CASE; DISCUSSED. — Jurisdiction over the subject matter of a case is
conferred by law and is determined by the allegations of the complaint
irrespective of whether the plaintiff is entitled to all or some of the claims
asserted therein. Acquiring jurisdiction over the subject matter of a case does not
necessarily mean that the lower court meant to reverse the decision of the
Supreme Court in the land registration case mentioned by the petitioner.
Moreover, settled is the rule that the jurisdiction of the court over the subject
matter is determined by the allegations of the complaint, hence the court's
jurisdiction cannot be made to depend upon defenses set up in the answer or in a
motion to dismiss. This has to be so, for were the principle otherwise, the ends
of justice would be frustrated by making the sufficiency of this kind of action
dependent upon the defendant in all cases.
3. ID.; PARTY WHO INVOKES THE JURISDICTION OF A COURT
CANNOT THEREAFTER CHALLENGE THE SAME. — It is now too late for
petitioner to question the jurisdiction of the Court of Appeals because it was
petitioner who elevated the instant controversy to the Court of Appeals via a
petition forcertiorari. In effect, petitioner submitted itself to the jurisdiction of
the Court of Appeals by seeking affirmative relief therefrom. If a party invokes
the jurisdiction of a court, he cannot thereafter challenge that court's jurisdiction
in the same case. To do otherwise would amount to speculating on the fortune of
litigation, which is against the policy of the Court.
4. CIVIL LAW; PROPERTY; CO-OWNERSHIP; ACTION FOR
PARTITION IS IMPRESCRIPTIBLE. — On the issue of prescription, if a co-
owner sells the whole property as his, the sale will affect only of his own share
and not those of the other co-owners who did not consent to the sale. Under
Article 493 of the Civil Code, the transferee becomes a co-owner and gets only
what corresponds to his grantor's share in the partition of the property owned in
common. Hence, the sale is not null and void and the proper action is the
division or partition of the entire property if it continued to remain in the
possession of the co-owners who possessed and administered it. Such partition
should result in segregating the portion belonging to the seller and its delivery to
the buyer. Pursuant to Article 494 of the Civil Code, "no co-owner shall be
obliged to remain in the co-ownership. Such co-owner may demand at anytime
the partition of the thing owned in common, insofar as his share is concerned."
In Budlong vs. Bondoc, this Court has interpreted said provision of law to mean
81
that the action for partition is imprescriptible. It cannot be barred by reconsideration but it was denied in a Resolution dated March 15, 1996. Hence
prescription. For Article 494 of the Civil Code explicitly declares: "No this petition. cdasia
prescription shall lie in favor of a co-owner or co-heirs as long as he expressly or
impliedly recognizes the co-ownership." Petitioner submits the following grounds to support the granting of the
writ of certiorari in the present case:
FIRST GROUND
This special civil action for certiorari seeks to set aside the Decision of
the Court Appeals dated August 14, 1995, in CA-G.R. SP No. 36349, and its THE HON. COURT OF APPEALS AND THE
Resolution dated March 15, 1996, which denied petitioner's motion for REGIONAL TRIAL COURT (BR. 79) HAD NO
reconsideration. cdrep JURISDICTION TO TRY SUBJECT CASE (SP. PROC.
NO. 118-M). THE "CAUSES OF ACTION" HEREIN
On December 13, 1993, private respondents filed an action for Partition HAVE BEEN FINALLY DECIDED BY THE HON.
before the Regional Trial Court of Morong, Rizal. They alleged that their COURT OF FIRST INSTANCE OF RIZAL (BR. 31)
predecessor-in-interest, Juan De Castro, died intestate in 1993 and they are his MAKATI, METRO MANILA, AND SUSTAINED IN A
only surviving and legitimate heirs. They also alleged that their father owned a FINAL DECISION BY THE HON. SUPREME COURT.
parcel of land designated as Lot No. 3010 located at Barrio San Juan, Morong,
Rizal, with an area of two thousand two hundred sixty nine (2,269) square SECOND GROUND
meters more or less. They further claim that in 1979, without their knowledge THE HON. COURT OF APPEALS GRAVELY ABUSED
and consent, said lot was sold by their brother Mariano to petitioner. The sale ITS DISCRETION AND AUTHORITY WHEN IT
was made possible when Mariano represented himself as the sole heir to the SUSTAINED THE ORDERS OF THE HON. REGIONAL
property. It is the contention of private respondents that the sale made by TRIAL COURT (BR. 79) DATED OCTOBER 4, 1994,
Mariano affected only his undivided share to the lot in question but not the AND THE ORDER DATED JANUARY 5, 1995, WHEN
shares of the other co-owners equivalent to four fifths (4/5) of the property. SAID RTC (BR. 79) INSISTED IN TRYING THIS CASE
Petitioner filed a motion to dismiss contending, as its special defense, AGAINST TCMC WHEN IT HAS RULED ALREADY IN
lack of jurisdiction and prescription and/or laches. The trial court, after hearing A FINAL ORDER THAT PETITIONER IS NOT A "REAL
the motion, dismissed the complaint in an Order dated August 18, 1984. On PARTY" IN INTEREST BY THE HON. REGIONAL
motion for reconsideration, the trial court, in an Order dated October 4, 1994, TRIAL COURT (BR. 79) IN CIVIL CASE NO. 170,
reconsidered the dismissal of the complaint and set aside its previous order. ENTITLED ELPIDIA A. DE CASTRO, ET. AL. vs. TOMAS
Petitioner filed its own motion for reconsideration but it was denied in an Order CLAUDIO MEMORIAL COLLEGE, ET. AL., WHICH
dated January 5, 1995. CASE INVOLVED THE SAME RELIEF, SAME
SUBJECT MATTER AND THE SAME PARTIES.
Aggrieved, petitioner filed with the Court of Appeals a special civil
action for certiorari anchored on the following grounds: a) the RTC has no THIRD GROUND
jurisdiction to try and take cognizance of the case as the causes of actions have THE HON. COURT OF APPEALS GRAVELY ABUSED
been decided with finality by the Supreme Court, and b) the RTC acted with ITS DISCRETION AND AUTHORITY WHEN IT
grave abuse of discretion and authority in taking cognizance of the case. CAPRICIOUSLY AND WHIMSICALLY
After the parties filed their respective pleadings, the Court of Appeals, DISREGARDED THE EXISTENCE OF RES JUDICATA
finding no grave abuse of discretion committed by the lower court, dismissed the IN THIS CASE.
petition in a Decision dated August 14, 1995. Petitioner filed a timely motion for

82
 The pivotal issues to be resolved in this case are: whether or not the
Regional Trial Court and/or the Court of Appeals had jurisdiction over the case,
and if so, whether or not the Court of Appeals committed grave abuse of
discretion in affirming the decision of the Regional Trial Court.
In assailing the Orders of the appellate court, petitioner invokes Rule 65
of the Rules of Court as its mode in obtaining a reversal of the assailed Decision
and Resolution. Before we dwell on the merits of this petition, it is worth noting,
that for a petition for certiorari to be granted, it must be shown that the
respondent court committed grave abuse of discretion equivalent to lack or
excess of jurisdiction and not mere errors of judgment, for certiorari is not a
remedy for errors of judgment, which are correctible by appeal. 1 By grave
abuse of discretion is meant such capricious and whimsical exercise of judgment
as is equivalent to lack of jurisdiction, and mere abuse of discretion is not
enough — it must be grave. 2
In the case at hand, there is no showing of grave abuse of discretion
committed by the public respondent. As correctly pointed out by the trial court,
when it took cognizance of the action for partition filed by the private
respondents, it acquired jurisdiction over the subject matter of the
case. 3 Jurisdiction over the subject matter of a case is conferred by law and is
determined by the allegations of the complaint irrespective of whether the
plaintiff is entitled to all or some of the claims asserted therein. 4 Acquiring
jurisdiction over the subject matter of a case does not necessarily mean that the
lower court meant to reverse the decision of the Supreme Court in the land
registration case mentioned by the petitioner. Cdpr
Moreover, settled is the rule that the jurisdiction of the court over the
subject matter is determined by the allegations of the complaint, hence the
court's jurisdiction cannot be made to depend upon defenses set up in the answer
or in a motion to dismiss. 5 This has to be so, for were the principle otherwise,
the ends of justice would be frustrated by making the sufficiency of this kind of
action dependent upon the defendant in all cases.
Worth stressing, as long as a court acts within its jurisdiction any
alleged errors committed in the exercise thereof will amount to nothing more
than errors of judgment which are revisable by timely appeal and not by a
special civil action of certiorari. 6 Based on the foregoing, even assuming for
the sake of argument that the appellate court erred in affirming the decision of
the trial court, which earlier denied petitioner's motion to dismiss, such actuation
on the part of the appellate court cannot be considered as grave abuse of
discretion, hence not correctible by certiorari, because certiorari is not available
to correct errors of procedure or mistakes in the judge's findings and
conclusions.
In addition, it is now too late for petitioner to question the jurisdiction
of the Court of Appeals. It was petitioner who elevated the instant controversy to
the Court of Appeals via a petition for certiorari. In effect, petitioner submitted
itself to the jurisdiction of the Court of Appeals by seeking affirmative relief
therefrom. If a party invokes the jurisdiction of a court, he cannot thereafter
challenge that court's jurisdiction in the same case. 7 To do otherwise would
amount to speculating on the fortune of litigation, which is against the policy of
the Court.
On the issue of prescription, we have ruled that even if a co-owner sells
the whole property as his, the sale will affect only his own share but not those of
the other co-owners who did not consent to the sale. 8 Under Article 493 of the
Civil Code, the sale or other disposition affects only the seller's share pro
indiviso, and the transferee gets only what corresponds to his grantor's share in
the partition of the property owned in common. Since a co-owner is entitled to
sell his undivided share, a sale of the entire property by one co-owner without
the consent of the other co-owners is not null and void. However, only the rights
of the co-owner/seller are transferred, thereby making the buyer a co-owner of
the property. The proper action in a case like this, is not for the nullification of
the sale, or for the recovery of possession of the property owned in common
from the third person, but for division or partition of the entire property if it
continued to remain in the possession of the co-owners who possessed and
administered it. 9 Such partition should result in segregating the portion
belonging to the seller and its delivery to the buyer. cdrep
In the light of the foregoing, petitioner's defense of prescription against
an action for partition is a vain proposition. Pursuant to Article 494 of the Civil
Code, "no co-owner shall be obliged to remain in the co-ownership. Such co-
owner may demand at anytime the partition of the thing owned in common,
insofar as his share is concerned." In Budlong vs. Bondoc, 10 this Court has
interpreted said provision of law to mean that the action for partition is
imprescriptible. It cannot be barred by prescription. For Article 494 of the Civil
Code explicitly declares: "No prescription shall lie in favor of a co-owner or co-
heirs as long as he expressly or impliedly recognizes the co-ownership."
WHEREFORE, the instant petition is DENIED. The assailed decision
of the Court of Appeals is hereby AFFIRMED. Costs against petitioners.
SO ORDERED.
83
 [G.R. No. 123509. March 14, 2000.]
LUCIO ROBLES, EMETERIA ROBLES, ALUDIA ROBLES and
EMILIO ROBLES, petitioners, vs. COURT OF APPEALS, Spouses
VIRGILIO SANTOS and BABY RUTH CRUZ, RURAL BANK
OF CARDONA, Inc., HILARIO ROBLES, ALBERTO PALAD
JR. in his capacity as Director of Lands, and JOSE MAULEON in
his capacity as District Land Officer of the Bureau of
Lands, respondents.
SYNOPSIS
Petitioners inherited the disputed property from their father, Silvino
Robles, whose predecessor has been occupying the same since 1916. Allegedly,
the payment of taxes thereof was entrusted to their co-heir, respondent Hilario.
In 1962, however, the tax declaration of the land was transferred to Exequiel
Bellena, father-in-law of Hilario; later, transferred to Antipolo Rural Bank, and
then, to the name of Hilario and wife Andrea, who mortgaged the same to the
Cardona Rural Bank. The property was eventually foreclosed, transferred to the
Bank's name and sold to respondent spouses Santos. Petitioners, who discovered
the mortgage, attempted but failed to redeem the property while respondent
spouses Santos took possession of the same and were able to secure Free Patent
in their names.
Evidently, there was no valid transfer of the disputed property from the
heirs of Silvino to Exequiel in 1962. Thus, the property still belong to the heirs
of the late Silvino and the mortgage executed by Hilario to the Rural Bank of
Cardona was made in his capacity as mere co-owner thereof. The Rural Bank of
Cardona, Inc. is considered a mortgagee in bad faith as it did not fully ascertain
the title of Hilario and thus failed to observe due diligence. Hence, as what was
mortgaged was only the undivided share of Hilario, respondent spouses Santos
can only acquire the same. The free patent granted to the spouses Santos was
void as the disputed land has already become a private land as petitioners are
claiming ownership thereof based on their possession of the land in the concept
of owners for more than 30 years. It has become beyond the authority of the
Director of Lands.
SYLLABUS
1. CIVIL LAW; PROPERTY; OWNERSHIP; QUIETING OF TITLE,
DISCUSSED. — Based on Art. 476 of the Civil Code, an action to quiet title is
a common-law remedy for the removal of any cloud or doubt or uncertainty on
the title to real property. It is essential for the plaintiff or complainant to have a
legal or an equitable title to or interest in the real property which is the subject
matter of the action. Also, the deed, claim, encumbrance or proceeding that is
being alleged as a cloud on plaintiff's title must be shown to be in fact invalid or
inoperative despite its prima facie appearance of validity or legal efficacy.
2. ID.; ID.; ID.; CO-OWNERSHIP; PRESCRIPTION IN FAVOR OF
A CO-OWNER. — It is a fundamental principle that a co-owner cannot acquire
by prescription the share of the other co-owners, absent any clear repudiation of
the co-ownership. In order that the title may prescribe in favor of a co-owner,
the following requisites must concur: (1) the co-owner has performed
unequivocal acts of repudiation amounting to an ouster of the other co-owners;
(2) such positive acts of repudiation have been made known to the other co-
owners; and (3) the evidence thereof is clear and convincing.
3. ID.; ID.; ID.; ID.; NO REPUDIATION THEREOF IN CASE AT
BAR. — In the present case, Hilario did not have possession of the subject
property; neither did he exclude the petitioners from the use and the enjoyment
thereof, as they had indisputably shared in its fruits. Likewise, his act of entering
into a mortgage contract with the bank cannot be construed to be a repudiation
of the co-ownership. As absolute owner of his undivided interest in the land, he
had the right to alienate his share, as he in fact did. Neither should his payment
of land taxes in his name, as agreed upon by the co-owners, be construed as a
repudiation of the co-ownership. The assertion that the declaration of ownership
was tantamount to repudiation was belied by the continued occupation and
possession of the disputed property by the petitioners as owners.
4. ID.; SPECIAL CONTRACTS; REAL ESTATE MORTGAGE;
WHEN MORTGAGOR MERE CO-OWNER OF THE PROPERTY
MORTGAGED. — In a real estate mortgage contract, it is essential that the
mortgagor be the absolute owner of the property to be mortgaged; otherwise, the
mortgage is void. In the present case, it is apparent that Hilario Robles was not
the absolute owner of the entire subject property; and that the Rural Bank of
Cardona, Inc., in not fully ascertaining his title thereto, failed to observe due
diligence and, as such, was a mortgagee in bad faith. In Rural Bank of
Compostela v. Court of Appeals, the Court invalidated a real estate mortgage
84
after a finding that the bank had not been in good faith. The Court explained:
"The rule that persons dealing with registered lands can rely solely on the
certificate of title does not apply to banks." At any rate, considering that Hilario
can be deemed to have mortgaged the disputed property not as absolute
owner but only as a co-owner, he can be adjudged to have disposed to the Rural
Bank of Cardona, Inc. only his undivided share therein. The said bank, being the
immediate predecessor of the Santos spouses, was a mortgagee in bad faith.
Thus, justice and equity mandate the entitlement of the Santos spouses, who
merely stepped into the shoes of the bank, only to what legally pertains to the
latter — Hilario's share in the disputed property.
5. ID.; LAND TITLES; FREE PATENT; NOT VALID WHEN
ISSUED AGAINST A PRIVATE LAND. — In the light of their open,
continuous, exclusive and notorious possession and occupation of the land,
petitioners are "deemed to have acquired, by operation of law, a right to a grant,
a government grant, without the necessity of a certificate of title being issued."
The land was "segregated from the public domain." Accordingly, the director of
lands had no authority to issue a free patent thereto in favor of another person.
Verily, jurisprudence holds that a free patent covering private land is null and
void. It is apparent that petitioners are claiming ownership of the disputed
property on the basis of their possession thereof in the concept of owners —
openly, peacefully, publicly, continuously and adversely since 1916. Because
they and their predecessors-in-interest have occupied, possessed and cultivated it
asowners for more than thirty years, only one conclusion can be drawn — it has
become private land and is therefore beyond the authority of the director of land.
To be entitled to the remedy of quieting of title, petitioners must show
that they have title to the real property at issue, and that some deed or
proceeding beclouds its validity or efficacy. Buyers of unregistered real
property, especially banks, must exert due diligence in ascertaining the titles of
mortgagors and sellers, lest some innocent parties be prejudiced. Failure to
observe such diligence may amount to bad faith and may result in the nullity of
the mortgage, as well as of the subsequent foreclosure and/or auction sale.
Unless the co-ownership is clearly repudiated, a co-owner cannot, by
prescription, acquire title to the shares of the other co-owners. cdrep
The Case
Before us is a Petition for Review under Rule 45, assailing the June 15,
1995 Decision and the January 15, 1996 Resolution of the Court of
Appeals 1 (CA) in CA-GR CV No. 34213. 2 In its Decision, the CA ruled: 3
"WHEREFORE, the trial court's June 17, 1991
decision is REVERSED and SET ASIDE, and in lieu
thereof a new one is hereby entered ordering the dismissal
of the plaintiffs-appellees['] second amended complaint."
Earlier, the trial court had disposed as follows:
"WHEREFORE, premises considered, judgment is
hereby rendered as follows:
1. Declaring free patent Title No. IV-1-010021
issued by the Bureau of Lands as null and void;
2. Ordering the defendant spouses Vergel Santos
and Ruth Santos to deliver the property subject of this case
to the plaintiff; and
3. Declaring the heirs of Silvino Robles as the
absolute owner of the land in controversy."
The January 15, 1996 CA Resolution denied petitioners' Motion for
Reconsideration. cdphil
The Facts
The present Petition is rooted in a case for quieting of title before the
Regional Trial Court of Morong, Rizal, filed on March 14, 1988, 4 by
Petitioners Lucio Robles, Emeteria Robles, Aludia Robles and Emilio Robles.
The facts were narrated by the trial court in this wise:
"There seems to be no dispute that Leon Robles
primitively owned the land situated in Kay Taga, Lagundi,
Morong, Rizal with an area of 9,985 square meters. He
occupied the same openly and adversely. He also declared
the same in his name for taxation purposes as early as 1916
covered by Tax Declaration No. 17865 (Exh. "I") and paid
the corresponding taxes thereon (Exh. "B"). When Leon
Robles died, his son Silvino Robles inherited the land, who
took possession of the land, declared it in his name for
taxation purposes and paid the taxes thereon.
85
 "Upon the death of Silvino Robles in 1942, his
widow Maria de la Cruz and his children inherited the
property. They took adverse possession of said property and
paid taxes thereon. The task of cultivat[ing] the land was
assigned to plaintiff Lucio Robles who planted trees and
other crops. He also built a nipa hut on the land. The
plaintiffs entrusted the payment of the land taxes to their co-
heir and half-brother, Hilario Robles.
"In 1962, for unknown reasons, the tax declaration
of the parcel of land in the name of Silvino Robles was
canceled and transferred to one Exequiel Ballena (Exh.
"19"), father of Andrea Robles who is the wife of defendant
Hilario Robles. Thereafter, Exequiel Ballena secured a loan
from the Antipolo Rural Bank, using the tax declaration as
security. Somehow, the tax declaration was transferred [to]
the name of Antipolo Rural Bank (Exh. "17") and later on,
was transferred [to] the name of defendant Hilario Robles
and his wife (Exh. "16").
"In 1996, Andrea Robles secured a loan from the
Cardona Rural Bank, Inc., using the tax declaration as
security. Andrea Robles testified without contradiction that
somebody else, not her husband Hilario Robles, signed the
loan papers because Hilario Robles was working in
Marinduque at that time as a carpenter.
"For failure to pay the mortgage debt, foreclosure
proceedings were had and defendant Rural Bank emerged as
the highest bidder during the auction sale in October 1968.
"The spouses Hilario Robles failed to redeem the
property and so the tax declaration was transferred in the
name of defendant Rural Bank. On September 25, 1987,
defendant Rural Bank sold the same to the Spouses Vergel
Santos and Ruth Santos. cdrep
"In September 1987, plaintiff discovered the
mortgage and attempted to redeem the property, but was
unsuccessful. On May 10, 1988, defendant spouses Santos
took possession of the property in question and was able to
secure Free Patent No. IV-1-010021 in their names." 5
On the other hand, the Court of Appeals summarized the facts of the
case as follows:
"The instant action for quieting of title concerns the
parcel of land bounded and more particularly described as
follows:
"A parcel of land located at Kay Taga,
Lagundi, Morong, Rizal. Bounded [i]n the north by
the property of Venancio Ablay y Simeon Ablay;
[i]n the east by the property of Veronica Tulak y
Dionisio Ablay; [i]n the south by the property of
Simeon Ablay y Dionisio Ablay; and [i]n the west
by the property of Dionisio Ablay y Simeon Ablay,
with an area of 9,985 square meters, more or less,
assessed in the year 1935 at P60.00 under Tax
Declaration No. 23219.'
"As the heirs of Silvino Robles who, likewise
inherited the above-described parcel from Leon Robles, the
siblings Lucio, Emeteria, Aludia and Emilio, all surnamed
Robles, commenced the instant suit with the filing of their
March 14, 1988 complaint against Spouses Virgilio and
Ruth Santos, as well as the Rural Bank of Cardona, Inc.
Contending that they had been in possession of the land
since 1942, the plaintiff alleged, among other matters, that it
was only in September of 1987 that they came to know of
the foreclosure of the real estate mortgage constituted
thereon by the half-brother, Hilario Robles, in favor of
defendant Rural Bank; and that they likewise learned upon
further inquiry, that the latter had already sold the self-same
parcel in favor of the Santos spouses (pp. 1-3, orig. rec.).
Twice amended to implead Hilario Robles (pp. 76-80, orig.
rec) and, upon subsequent discovery of the issuance of Free
Patent No. IV-I-010021 in favor of the defendant spouses,
the Director of Lands and the District Land Officer of the
Bureau of Lands as parties-defendants (pp. 117-121, orig.
rec). The plaintiffs' complaint sought the following reliefs
on the theory that the encumbrance of their half-brother,
constituted on the land, as well as all proceedings taken
subsequent thereto, were null and void, to wit:
86
 Wherefore, it is respectfully prayed that
(a) a preliminary mandatory injunction be issued
forthwith restoring plaintiffs to their possession of
said parcel of land; (b) an order be issued annulling
said Free Patent No. IV-I-010021 in the name of
defendants spouses Vergel Santos and Ruth C.
Santos, the deed of sale aforementioned and any
tax declaration which have been issued in the name
of defendants; and (c) ordering defendants jointly
and severally, to pay plaintiffs the sum of
P10,000.00 as attorney's fees. cda
"Plaintiffs pray for other relief as [may be]
just and equitable under the premises." (pp. 120-
121, orig. rec.)
xxx xxx xxx'
"With the termination of the pre-trial stage upon
the parties-litigants' agreement (p. 203, orig. rec.) the trial
court proceeded to try the case on the merits. It thereafter
rendered the challenged June 17, 1991 decision upon the
following findings and conclusions:
"The real estate mortgage allegedly
executed by Hilario Robles is not valid because his
signature in the mortgage deed was forged. This
fact, which remains unrebutted, was admitted by
Andrea Robles.
'Inasmuch as the real estate mortgage
executed allegedly by Hilario Robles in favor of
the defendant Cardona Rural Bank, Inc. was not
valid, it stands to reason that the foreclosure
proceedings therein were likewise not valid.
Therefore, the defendant bank did not acquire any
right arising out of the foreclosure proceedings.
Consequently, defendant bank could not have
transferred any right to the spouses Santos.
'The fact that the land was covered by a
free patent will not help the defendant Santos any.
'There can be no question that the subject
[property was held] in the concept of owner by
Leon Robles since 1916. Likewise, his successor-
in-interest, Silvino Robles, his wife Maria de la
Cruz and the plaintiffs occupied the property
openly, continuously and exclusively until they
were ousted from their possession in 1988 by the
spouses Vergel and Ruth Santos.
'Under the circumstances, therefore, and
considering that 'open, exclusive and undisputed
possession of alienable public lands for the period
prescribed by law (30 years), creates the legal
fiction whereby the land, upon completion of the
requisite period, ipso jure and without the need of
judicial or other action, ceases to be public land
and becomes private property. Possession of public
land . . . which is [of] the character and duration
prescribed by the statute is the equivalent of an
express grant from the State, considering the
dictum of the statute itself[:]; 'The possessor . . .
shall be conclusively presumed to have performed
all the conditions essential to a government grant
and shall be entitled to a certificate of title . . . .' No
proof is admissible to overcome a conclusive
presumption[,] and confirmation proceedings
would be a little more than a formality, at the most
limited to ascertaining whether the possession
claimed is of the required character and length of
time. Registration thereunder would not confer
title, but simply recognize a title already vested.
(Cruz v. IAC, G.R. No. 75042, November 29,
1988) The land in question has become private
land. cdll
'Consequently, the issuance of [a] free
patent title to the Spouses Vergel Santos and Ruth
C. Santos is not valid because at the time the
property subject of this case was already private
land, the Bureau of Lands having no jurisdiction to
dispose of the same.' (pp. 257-259, orig. rec.)'
87
 "Dissatisfied with the foregoing decision, the
Santos spouses and the defendant Rural Bank jointly filed
their July 6, 1991 Notice of Appeal (p. 260, orig. rec.) . . .
." 6
Ruling of the Court of Appeals
In reversing the trial court, the Court of Appeals held that petitioners no
longer had any title to the subject property at the time they instituted the
Complaint for quieting of title. The CA ratiocinated as follows:
"As correctly urged by the appellants, the plaintiff-
appellees no longer had any title to the property at the time
of the institution of the instant complaint. (pp. 25-27, rec.)
The latter's claim of continuous possession notwithstanding
(pp. 3-5, TSN, July 5, 1990; p. 12, TSN, July 12, 1990), the
aforesaid loss of title is amply evidenced by the subsequent
declaration of the subject realty for taxation purposes not
only in the name of Exequiel Ballena (Exhibits "1" and "2",
pp. 23-24, orig. rec.) but also in the name of the Rural Bank
of Antipolo (Exhibit 17, vol. II, orig. rec.). On the theory
that tax declarations can be evincive of the transfer of a
parcel of land or a portion thereof (Gacos v. Court of
Appeals, 212 SCRA 214), the court a quo clearly erred in
simply brushing aside the apparent transfers [which] the
land in litigation had undergone. Whether legal or equitable,
it cannot, under the circumstances, be gainsaid that the
plaintiff-appellees no longer had any title to speak of when
Exequiel Ballena executed the November 7, 1966 Deed of
Absolute Sale transferring the land in favor of the spouses
Hilario and Andrea Robles (Exhibit "3", p. 25, orig. rec.)
"Even on the theory that the plaintiffs-appellees
and their half-brother, Hilario Robles, are co-owners of the
land left behind by their common father, Silvino Robles,
such title would still be effectively discounted by what
could well serve as the latter's acts of repudiation of the co-
ownership, i.e., his possession (p. 22, TSN, November 15,
1990) and declaration thereof for taxation purposes in his
own name (Exhibit "4", p. 26, orig. rec.). In view of the
plaintiffs-appellees' inaction for more than twenty (20) years
from the time the subject realty was transferred in favor of
Hilario Robles, the appellants correctly maintain that
prescription had already set in. While it may be readily
conceded that an action to quiet title to property in the
possession of the plaintiff is imprescriptible (Almanza vs.
Arguelles, 156 SCRA 718; Coronel vs. Intermediate
Appellate Court, 155 SCRA 270; Caragay-Layno vs. Court
of Appeals, 133 SCRA 718; Charon Enterprises vs. Court of
Appeals, 124 SCRA 784; Faja vs. Court of Appeals, 75
SCRA 441; Burton vs. Gabar, 55 SCRA 4999), it equally
bears emphasis that a co-owner or, for that matter, the said
co-owner[']s successors-in-interest who occupy the
community property other than as co-owner[s] can claim
prescription as against the other co-owners (De Guzman vs.
Austria, 148 SCRA 75; Ramos vs. Ramos, 45 Phil.
362; Africa vs. Africa, 42 Phil. 902; Bargayo vs. Camumot,
40 Phil. 857; De Castro vs. Echarri, 20 Phil. 23). If only in
this latter sense, the appellants correctly argue that the
plaintiffs-appellees have lost their cause of action by
prescription. cdtai
"Over and above the foregoing considerations, the
court a quo gravely erred in invalidating the real estate
mortgage constituted on the land solely on the basis of
Andrea Robles' testimony that her husband's signature
thereon was forged (p. 257, orig. rec.),
xxx xxx xxx
"In according to the foregoing testimony . . .
credibility which, while admittedly unrebutted, was
altogether uncorroborated, the trial court lost sight of the
fact that the assailed deed of real estate mortgage (Exhibit
"5", Vol. II, orig. rec.) is a public document, the
acknowledgment of which is a prima facieevidence of its
due execution (Chua vs. Court of Appeals, 206 SCRA 339).
As such, it retains the presumption of validity in the absence
of a full, clear and convincing evidence to overcome such
presumption (Agdeppa vs. Ibe, 220 SCRA 584).
"The foregoing principles take even more greater
[sic] when it is, moreover, borne in mind that Hilario Robles
88
made the following admissions in his March 8, 1989
answer, viz:
'3. The complaint filed against herein answering
defendant has no legal basis considering
that as the lawful owner of the subject real
property, defendant Hilario Robles has the
right to mortgage the said real property
and could dispose the same in whatever
manner he wishe[s] to do." (p. 96, orig.
rec.)
"Appropriately underscored by the appellants, the
foregoing admission is binding against Hilario [Robles].
Judicial admissions, verbal or written, made by the parties in
the pleadings or in the course of the trial or other
proceedings in the same case are conclusive, no evidence
being required to prove the same. They cannot be
contradicted unless shown to have been made through [a]
palpable mistake or [unless] no such admission was actually
made (Philippine American General Insurance, Inc. vs.
Sweet Lines, Inc., 212 SCRA 194).
"It does not help the plaintiffs-appellees' cause any
that, aside from complying with the requirements for the
foreclosure of the subject real estate mortgage (Exhibits "6",
"7", "8" and "10", Volume II[)], the appellant Rural Bank
had not only relented to the mortgagor's request to postpone
the (Exhibit "g", Vol. II, orig. rec.) but had likewise granted
the latter's request for an extension of the redemption period
therefor (Exhibits "11" and "12", pp. 35-36, orig. rec.).
Without going into minute detail in discussing the Santos
spouses' rights as purchasers for value and in good faith
(Exhibit "21", Vol. II, orig. rec.), the mortgagor and the
plaintiffs'-appellees cannot now be heard to challenge the
validity of the sale of the land after admittedly failing to
redeem the same within the extension the appellant Rural
Bank granted (pp. 10-11, TSN, November 15, 1990).
"Being dependent on the supposed invalidity of the
constitution and foreclosure of the subject real estate
mortgage, the plaintiffs-appellees' attack upon . . . Free
Patent No. IV-I must necessarily fail. The trial court,
therefore, misread, and ignored the evidence o[n] record, to
come up with erroneous conclusion." cdasia
Contending that such ruling was contrary to law and jurisprudence,
Petitioners Lucio, Emeteria, Aludia and Emilio — all surnamed Robles — filed
this Petition for Review. 7
The Assigned Error
Petitioners ascribe the following error to the respondent court:
"Respondent Court of Appeals grievously erred in
ruling that with the transfers of the tax declaration over the
parcel of land in question from Silvino Robles to Exequiel
Ballena, then to the Rural Bank of Antipolo, then to
Respondent Hilario Robles, then to Respondent Rural Bank
of Cardona Inc., and then finally to Respondent Spouses
Santos, petitioners, who by themselves and their
predecessors in interest have been in open, actual and
adverse possession of said parcel of land since 1916 up to
their forced removal therefrom in 1988, have lost their title
to said property by prescription to their half-brother,
Respondent Hilario Robles, and then finally, to Respondent
Spouses Santos." 8
For a better understanding of the case, the above issue will be broken
down into three points: first, the nature of the remedy of quieting of title;second,
the validity of the real estate mortgage; and third, the efficacy of the free patent
granted to the Santos spouses.
First Issue:
Quieting of Title
Article 476 of the Civil Code provides:
"Whenever there is cloud on title to real property or
any interest therein, by reason of any instrument, record,
claim, encumbrance or proceeding which is apparently valid
or effective but is in truth and in fact invalid, ineffective,
voidable or unenforceable, and may be prejudicial to said
title, an action may be brought to remove such cloud or to
quiet title.
89
 "An action may also be brought to prevent a cloud
from being cast upon title to real property or any interest
therein."
Based on the above definition, an action to quiet title is a common-law
remedy for the removal of any cloud or doubt or uncertainty on the title to real
property. 9 It is essential for the plaintiff or complainant to have a legal or an
equitable title to or interest in the real property which is the subject matter of the
action. 10 Also, the deed, claim, encumbrance or proceeding that is being
alleged as a cloud on plaintiff's title must be shown to be in fact invalid or
inoperative despite its prima facie appearance of validity or legal efficacy. 11
That there is an instrument or a document which, on its face, is valid
and efficacious is clear in the present case. Petitioners allege that their title as
owners and possessors of the disputed property is clouded by the tax declaration
and, subsequently, the free patent thereto granted to Spouses Vergel and Ruth
Santos. The more important question to be resolved, however, is whether the
petitioners have the appropriate title that will entitle them to avail themselves of
the remedy of quieting of title. prcd
Petitioners anchor their claim to the disputed property on their
continued and open occupation and possession as owners thereof. They allege
that they inherited it from their father, Silvino, who in turn had inherited it from
his father, Leon. They maintain that after their father's death, they agreed among
themselves that Petitioner Lucio Robles would be tending and cultivating it for
everyone, and that their half-brother Hilario would be paying the land taxes.
Petitioners insist that they were not aware that from 1962 until 1987,
the subject property had been declared in the names of Exequiel Ballena, the
Rural Bank of Antipolo, Hilario Robles, the Rural Bank of Cardona, Inc., and
finally, Spouses Vergel and Ruth Santos. Maintaining that, as co-owners of the
subject property, they did not agree to the real estate mortgage constituted on it,
petitioners insist that their shares therein should not have been prejudiced by
Hilario's actions.
On the other hand, Private Respondents Vergel and Ruth Santos trace
their claim to the subject property to Exequiel Ballena, who had purportedly sold
it to Hilario and Andrea Robles. According to private respondents, the Robles
spouses then mortgaged it to the Rural Bank of Cardona, Inc. — not as co-
owners but as absolute owners — in order to secure an agricultural loan worth
P2,000. Upon their failure to pay their indebtedness, the mortgage was
foreclosed and the property sold to the bank as the highest bidder. Thereafter,
private respondents purchased the property from the bank.
Undisputed is the fact that the land had previously been occupied by
Leon and later by Silvino Robles, petitioners' predecessors-in-interest, as
evidenced by the different tax declarations issued in their names. Also
undisputed is the fact that the petitioners continued occupying and possessing
the land from the death of Silvino in 1942 until they were allegedly ousted
therefrom in 1988. In 1962, the subject property was declared in the name of
Exequiel for taxation purposes. On September 30, 1965, it was again declared in
the same name; on October 28, 1965, in the name of the Rural Bank of Antipolo;
on November 7, 1966, in the name of Hilario and Andrea; and thereafter, in the
name of the Rural Bank of Cardona and, finally, in the name of the Santos
spouses. cdll
Ostensibly, the Court of Appeals failed to consider irregularities in the
transactions involving the disputed property. First, while it was declared in the
name of Exequiel in 1962, there was no instrument or deed of conveyance
evidencing its transfer from the heirs of Silvino to him. This fact is important,
considering that the petitioners are alleging continued possession of the
property. Second, Exequiel was the father-in-law of Hilario, to whom petitioners
had entrusted the payment of the land taxes. Third, considering that the subject
property had been mortgaged by Exequiel to the Rural Bank of Antipolo, and
that it was foreclosed and in fact declared in the bank's name in 1965, why was
he able to sell it to Spouses Hilario and Andrea in 1966? Lastly, inasmuch as it
was an unregistered parcel of land, the Rural Bank of Cardona, Inc., did not
observe due diligence in determining Hilario's title thereto.
The failure to show the indubitable title of Exequiel to the property in
question is vital to the resolution of the present Petition. It was from him that
Hilario had allegedly derived his title thereto as owner, an allegation which
thereby enabled him to mortgage it to the Rural Bank of Cardona. The
occupation and the possession thereof by the petitioners and their predecessors-
in-interest until 1962 was not disputed, and Exequiel's acquisition of the said
property by prescription was not alleged. Thus, the deed of conveyance
purportedly evidencing the transfer of ownership and possession from the heirs
of Silvino to Exequiel should have been presented as the best proof of that
transfer. No such document was presented, however.
Therefore, there is merit to the contention of the petitioners that Hilario
mortgaged the disputed property to the Rural Bank of Cardona in his capacity as
90
a mere co-owner thereof. Clearly, the said transaction did not divest them of title
to the property at the time of the institution of the Complaint for quieting of title.
Contrary to the disquisition of the Court of Appeals, Hilario effected no
clear and evident repudiation of the co-ownership. It is a fundamental principle
that a co-owner cannot acquire by prescription the share of the other co-
owners, absent any clear repudiation of the co-ownership. In order that the title
may prescribe in favor of a co-owner, the following requisites must concur: (1)
the co-owner has performed unequivocal acts of repudiation amounting to an
ouster of the other co-owners; (2) such positive acts of repudiation have been
made known to the other co-owners; and (3) the evidence thereof is clear and
convincing. 12
In the present case, Hilario did not have possession of the subject
property; neither did he exclude the petitioners from the use and the enjoyment
thereof, as they had indisputably shared in its fruits. 13 Likewise, his act of
entering into a mortgage contract with the bank cannot be construed to be a
repudiation of the co-ownership. As absolute owner of his undivided interest in
the land, he had the right to alienate his share, as he in fact did. 14 Neither
should his payment of land taxes in his name, as agreed upon by the co-owners,
be construed as a repudiation of the co-ownership. The assertion that the
declaration of ownership was tantamount to repudiation was belied by the
continued occupation and possession of the disputed property by the petitioners
as owners. cdll
Second Issue:
Validity of the Real Estate Mortgage
In a real estate mortgage contract, it is essential that the mortgagor be
the absolute owner of the property to be mortgaged; otherwise, the mortgage is
void. 15 In the present case, it is apparent that Hilario Robles was not the
absolute owner of the entire subject property; and that the Rural Bank of
Cardona, Inc., in not fully ascertaining his title thereto, failed to observe due
diligence and, as such, was a mortgagee in bad faith.
First, the bank was utterly remiss in its duty to establish who the true
owners and possessors of the subject property were. It acted with precipitate
haste in approving the Robles spouses' loan application, as well as the real estate
mortgage covering the disputed parcel of land. 16 Had it been more circumspect
and assiduous, it would have discovered that the said property was in fact being
occupied by the petitioners, who were tending and cultivating it.
Second, the bank should not have relied solely on the Deed of Sale
purportedly showing that the ownership of the disputed property had been
transferred from Exequiel Ballena to the Robles spouses, or that it had
subsequently been declared in the name of Hilario. Because it was dealing
withunregistered land, and the circumstances surrounding the transaction
between Hilario and his father-in-law Exequiel were suspicious, the bank should
have exerted more effort to fully determine the title of the Robleses. Rural Bank
of Compostela v. Court of Appeals 17 invalidated a real estate mortgage after a
finding that the bank had not been in good faith. The Court explained: "The rule
that persons dealing with registered lands can rely solely on the certificate of
title does not apply to banks." In Tomas v. Tomas, the Court held:
". . . . Banks, indeed, should exercise more care and
prudence in dealing even with registered lands, than private
individuals, for their business is one affected with public
interest, keeping in trust money belonging to their
depositors, which they should guard against loss by not
committing any act of negligence which amounts to lack of
good faith by which they would be denied the protective
mantle of land registration statute, Act 496, extended only to
purchasers for value and in good faith, as well as to
mortgagees of the same character and description. . . . ." 18
Lastly, the Court likewise finds it unusual that, notwithstanding the
bank's insistence that it had become the owner of the subject property and had
paid the land taxes thereon, the petitioners continued occupying it and
harvesting the fruits therefrom. 19
Considering that Hilario can be deemed to have mortgaged the disputed
property not as absolute owner but only as a co-owner, he can be adjudged to
have disposed to the Rural Bank of Cardona, Inc., only his undivided
share therein. The said bank, being the immediate predecessor of the Santos
spouses, was a mortgagee in bad faith. Thus, justice and equity mandate the
entitlement of the Santos spouses, who merely stepped into the shoes of the
bank, only to what legally pertains to the latter — Hilario's share in the disputed
property. LLjur
Third Issue:
Efficacy of Free Patent Grant
Petitioners repeatedly insist that the disputed property belongs to them
by private ownership and, as such, it could not have been awarded to the Santos
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spouses by free patent. They allege that they possessed it in the concept of
owners — openly, peacefully, publicly and continuously as early as 1916 until
they were forcibly ousted therefrom in 1988. They likewise contend that they
cultivated it and harvested its fruits. Lucio Robles testified:
"xxx xxx xxx
Q By the way, why do you know this parcel of land?
A Because before my father died, he showed me all the
documents.
Q Before the death of your father, who was the owner of
this parcel of land?
A My father, sir.
Q How did your father acquire this parcel of land?
A My father knew that it [was] by inheritance, sir.
Q From whom?
A From his father, Leon Robles, sir.
Q And do you know also [from] whom Leon Robles
acquired this land?
A It was inherited from his father, sir.
Q What is the nature of this parcel of land?
A It's an agricultural land, sir.
Q Now, at the time of the death of your father, this land was
planted with what crops?
A Mango trees, santol trees, and I was the one who planted
those trees, sir.
Q When did you plant those trees?
A Before the death of my father, sir.
Q Now, after the death of your father, who cultivated this
parcel of land?
A I took charge of the land after the death of my father, sir.
Q Up to when?
A Up to the present, sir, after this case was already filed." 20
The preceding claim is an assertion that the subject property is private
land. The petitioners do not concede, and the records do not show, that it was
ever an alienable land of the public domain. They allege private ownership
thereof, as evidenced by their testimonies and the tax declarations issued in the
names of their predecessors-in-interest. It must be noted that while their claim
was not corroborated by other witnesses, it was not controverted by the other
parties, either. prcd
Carlos Dolores insisted that the Rural Bank of Cardona, Inc., of which
he was the manager, had acquired and possessed the subject property. He did
not, however, give any reason why the petitioners had continued occupying it,
even as he admitted on the stand that he had visited it twice. 21
In the light of their open, continuous, exclusive and notorious
possession and occupation of the land, petitioners are "deemed to have acquired,
by operation of law, a right to a grant, a government grant, without the necessity
of a certificate of title being issued." 22 The land was "segregated from the
public domain." Accordingly, the director of lands had no authority to issue a
free patent thereto in favor of another person. Verily, jurisprudence holds that a
free patent covering private land is null and void. 23
Worth quoting is the disquisition of the Court in Agne v. Director of
Lands, 24 in which it held that a riparian owner presently in possession had a
better right over an abandoned river bed than had a registered owner by virtue of
a free patent.
"Under the provisions of Act 2874 pursuant to
which the title of private respondents' predecessor-in-
interest was issued, the President of the Philippines, or his
alter ego, the Director of Lands, has no authority to grant a
free patent for land that has ceased to be a public land and
has passed to private ownership and a title so issued is null
and void. The nullity arises, not from fraud or deceit, but
from the fact that the land is not under the jurisdiction of the
Bureau of Lands. The jurisdiction of the Director of Lands
is limited only to public lands and does not cover lands
publicly owned. The purpose of the Legislature in adopting
the former Public Land Act, Act No. 2874, was and is to
limit its application to lands of the public domain, and lands
held in private ownership are not included therein and are
not affected in any manner whatsoever thereby. Land held in
freehold or fee title, or of private ownership, constitutes no
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part of the public domain, and cannot possibly come within
the purview of said act 2874, inasmuch as the 'subject' of
such freehold or private land is not embraced in any manner
in the title of the Act and the same is excluded from the
provisions of the text thereof.
"We reiterate that private ownership of land is not
affected by the issuance of the free patent over the same
land because the Public Land Act applies only to lands of
the public domain. Only public land may be disposed of by
the Director of Lands. Since as early as 1920, the land in
dispute was already under the private ownership of herein
petitioners and no longer a part of the lands of the public
domain, the same could not have been the subject matter of
a free patent. The patentee and his successors-in-interest
acquired no right or title to said land. Necessarily, Free
Patent No. 23263 issued to Herminigildo Agpoon is null and
void and the subsequent titles issued pursuant thereto cannot
become final and indefeasible. Hence we ruled in Director
of Lands v. Sicsican, et al., that if at the time the free patents
were issued in 1953 the land covered therein were already
private property of another and, therefore, not part of the
disposable land of the public domain, then applicants
patentees acquired no right or title to the land.
"Now, a certificate of title fraudulently secured is
null and void ab initio if the fraud consisted in
misrepresenting that the land is part of the public domain,
although it is not. As earlier stated, the nullity arises, not
from the fraud or deceit, but from the fact that the land is not
under the jurisdiction of the Bureau of Lands. Being null
and void, the free patent granted and the subsequent titles
produce no legal effect whatsoever. Quod nullum est,
nullum producit effectum.
"A free patent which purports to convey land to
which the government did not have any title at the time of
its issuance does not vest any title in the patentee as against
the true owner. The Court has previously held that the Land
Registration Act and the Cadastral Act do not give anybody
who resorts to the provisions thereof a better title than what
he really and lawfully has.
xxx xxx xxx
"We have, therefore, to arrive at the unavoidable
conclusion that the title of herein petitioners over the land in
dispute is superior to the title of the registered owner which
is a total nullity. The long and continued possession of
petitioners under a valid claim of title cannot be defeated by
the claim of a registered owner whose title is defective from
the beginning."
The Santos spouses argue that petitioners do not have the requisite
personality to question the free patent granted them, inasmuch as "it is a well-
settled rule that actions to nullify free patents should be filed by the Office of the
Solicitor General at the behest of the Director of Lands." 25
Private respondents' reliance on this doctrine is misplaced. Indeed, the
Court held in Peltan Development, Inc. v. Court of Appeals 26 that only the
solicitor general could file an action for the cancellation of a free patent. Ruling
that the private respondents, who were applicants for a free patent, were not the
proper parties in an action to cancel the transfer certificates covering the parcel
of land that was the subject of their application, the Court ratiocinated thus:
"The Court also holds that private respondents are
not the proper parties to initiate the present suit. The
complaint, praying as it did for the cancellation of the
transfer certificates of title of petitioners on the ground that
they were derived from a "spurious" OCT No. 4216,
assailed in effect the validity of said title. While private
respondents did not pray for the reversion of the land to the
government, we agree with the petitioners that the prayer in
the complaint will have the same result of reverting the land
to the government under the Regalian Doctrine. Gabila
v. Barinaga 27 ruled that only the government is entitled to
this relief. . . . ."
Because the cancellation of the free patent as prayed for by the private
respondents in Peltan would revert the property in question to the public
domain, the ultimate beneficiary would be the government, which can be
93
represented by the solicitor general only. Therefore, the real party-in-interest is
the government, not the private respondents. LibLex
This ruling does not, however, apply to the present case. While the
private respondents in Peltan recognized that the disputed property was part of
the public domain when they applied for free patent, 28 herein petitioners
asserted and proved private ownership over the disputed parcel of land by virtue
of their open, continued and exclusive possession thereof since 1916.
Neither does the present case call for the reversion of the disputed
property to the State. By asking for the nullification of the free patent granted to
the Santos spouses, the petitioners are claiming the property which, they
contend, rightfully belongs to them.
Indeed, the same issue was resolved by this Court in Heirs of Marciano
Nagano v. Court of Appeals. 29 In that case, the trial court dismissed a
Complaint seeking the declaration of nullity of an Original Certificate of Title
issued pursuant to a free patent, reasoning that the action should have been
instituted by the solicitor general. In reversing the trial court, the Supreme Court
held:
"It is settled that a Free Patent issued over private
land is null and void, and produces no legal effect
whatsoever. Quod nullum est, nullum producit effectum.
Moreover, private respondents' claim of open, peaceful,
continuous and adverse possession of the 2,250 square
meter portion since 1920, and its illegal inclusion in the Free
Patent of petitioners and in their original certificate of title,
gave private respondents a cause of action for quieting of
title which is imprescriptible."
In any event, the Office of the Solicitor General was afforded an
opportunity to express its position in these proceedings. But it manifested that it
would not file a memorandum, because "this case involves purely private
interests." 30
The foregoing considered, we sustain the contention of petitioners that
the free patent granted to the Santos spouses is void. It is apparent that they are
claiming ownership of the disputed property on the basis of their possession
thereof in the concept of owners — openly, peacefully, publicly, continuously
and adversely since 1916. Because they and their predecessors-in-interest have
occupied, possessed and cultivated it as owners for more than thirty
years, 31 only one conclusion can be drawn — it has become private land and is
therefore beyond the authority of the director of lands. LibLex
Epilogue
We recognize that both the petitioners and the Santos spouses fell
victim to the dubious transaction between Spouses Hilario and Andrea Robles
and the Rural Bank of Cardona, Inc. However, justice and equity mandate that
we declare Petitioners Lucio, Emerita, Aludia and Emilio Robles to have the
requisite title essential to their suit for quieting of title. Considering the
circumstances peculiar to this complicated problem, the Court finds this
conclusion the logical and just solution.
The claim that petitioners were guilty of laches in not asserting their
rights as owners of the property should be viewed in the light of the fact that
they thought their brother was paying the requisite taxes for them, and more
important, the fact that they continued cultivating it and harvesting and gaining
from its fruits.
From another viewpoint, it can even be said that it was the Rural Bank
of Cardona, Inc., which was guilty of laches because, granting that it had
acquired the subject property legally, it failed to enforce its rights as owner. It
was oblivious to the petitioners' continued occupation, cultivation and
possession thereof. Considering that they had possessed the property in good
faith for more than ten years, it can even be argued that they thus regained it by
acquisitive prescription. In any case, laches is a remedy in equity, and
considering the circumstances in this case, the petitioners cannot be held guilty
of it.
In sum, the real estate mortgage contract covering the disputed property
— a contract executed between Spouses Hilario and Andrea on the one hand and
the Rural Bank of Cardona, Inc., on the other — is hereby declared null and void
insofar as it prejudiced the shares of Petitioners Lucio, Emerita, Aludia and
Emilio Robles; it is valid as to Hilario Robles' share therein. Consequently, the
sale of the subject property to the Santos spouses is valid insofar as it pertained
to his share only. Likewise declared null and void is Free Patent No. IV-1-
010021 issued by the Bureau of Lands covering the subject property. LLphil
WHEREFORE, the Petition is hereby GRANTED. The assailed
Decision is REVERSED and SET ASIDE. Except as modified by the last
paragraph of this Decision, the trial court's Decision is REINSTATED. No costs.
SO ORDERED.
94