Philippine Supreme Court Case on Co-Ownership Rights

CASE 1
Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. L-44546 January 29, 1988 RUSTICO ADILLE, petitioner, vs. THE HONORABLE COURT OF APPEALS, EMETERIA ASEJO, TEODORICA ASEJO, DOMINGO ASEJO, JOSEFA ASEJO and SANTIAGO ASEJO, respondents.
SARMIENTO, J.: In issue herein are property and property rights, a familiar subject of controversy and a wellspring of enormous conflict that has led not only to protracted legal entanglements but to even more bitter consequences, like strained relationships and even the forfeiture of lives. It is a question that likewise reflects a tragic commentary on prevailing social and cultural values and institutions, where, as one observer notes, wealth and its accumulation are the basis of self-fulfillment and where property is held as sacred as life itself. "It is in the defense of his property," says this modern thinker, that one "will mobilize his deepest protective devices, and anybody that threatens his possessions will arouse his most passionate enmity." 1 The task of this Court, however, is not to judge the wisdom of values; the burden of reconstructing the social order is shouldered by the political leadership-and the people themselves. The parties have come to this Court for relief and accordingly, our responsibility is to give them that relief pursuant to the decree of law. The antecedent facts are quoted from the decision 2 appealed from: xxx xxx xxx ... [T]he land in question Lot 14694 of Cadastral Survey of Albay located in Legaspi City with an area of some 11,325 sq. m. originally belonged to one Felisa Alzul as her own private property; she married twice in her lifetime; the first, with one Bernabe Adille, with whom she had as an only child, herein defendant Rustico Adille; in her second marriage with one Procopio Asejo, her children were herein plaintiffs, now, sometime in 1939, said Felisa sold the property in pacto de retro to certain 3rd persons, period of repurchase being 3 years, but she died in 1942 without being able to redeem and after her death, but during the period of redemption, herein defendant repurchased, by himself alone, and after that, he executed a deed of extra-judicial partition representing himself to be the only heir and child of his mother Felisa with the consequence that he was able to secure title in his name alone also, so that OCT. No. 21137 in the name of his mother was transferred to his name, that was in 1955; that was why after some efforts of compromise had failed, his half-brothers and sisters, herein plaintiffs, filed present case for partition with accounting on the position that he was only a trustee on an implied trust when he redeemed,-and this is the evidence, but as it also turned out that one of plaintiffs, Emeteria Asejo was occupying a portion, defendant counterclaimed for her to vacate that, Well then, after hearing the evidence, trial Judge sustained defendant in his position that he was and became absolute owner, he was not a trustee, and therefore, dismissed case and also condemned plaintiff occupant, Emeteria to vacate; it is because of this that plaintiffs have come here and contend that trial court erred in: I. ... declaring the defendant absolute owner of the property;
Property Volume 4 (Co-ownership) Bachelor of Laws II-A 1
II. ... not ordering the partition of the property; and III. ... ordering one of the plaintiffs who is in possession of the portion of the property to vacate the land, p. 1 Appellant's brief. which can be reduced to simple question of whether or not on the basis of evidence and law, judgment appealed from should be maintained. 3 xxx xxx xxx The respondent Court of appeals reversed the trial Court, 4 and ruled for the plaintiffs-appellants, the private respondents herein. The petitioner now appeals, by way of certiorari, from the Court's decision. We required the private respondents to file a comment and thereafter, having given due course to the petition, directed the parties to file their briefs. Only the petitioner, however, filed a brief, and the private respondents having failed to file one, we declared the case submitted for decision. The petition raises a purely legal issue: May a co-owner acquire exclusive ownership over the property held in common? Essentially, it is the petitioner's contention that the property subject of dispute devolved upon him upon the failure of his co-heirs to join him in its redemption within the period required by law. He relies on the provisions of Article 1515 of the old Civil Article 1613 of the present Code, giving the vendee a retro the right to demand redemption of the entire property. There is no merit in this petition. The right of repurchase may be exercised by a co-owner with aspect to his share alone. 5 While the records show that the petitioner redeemed the property in its entirety, shouldering the expenses therefor, that did not make him the owner of all of it. In other words, it did not put to end the existing state of CO-OWNERSHIP. Necessary expenses may be incurred by one co-owner, subject to his right to collect reimbursement from the remaining coowners. 6 There is no doubt that redemption of property entails a necessary expense. Under the Civil Code: ART. 488. Each co-owner shall have a right to compel the other co-owners to contribute to the expenses of preservation of the thing or right owned in common and to the taxes. Any one of the latter may exempt himself from this obligation by renouncing so much of his undivided interest as may be equivalent to his share of the expenses and taxes. No such waiver shall be made if it is prejudicial to the CO-OWNERSHIP. The result is that the property remains to be in a condition of CO-OWNERSHIP. While a vendee a retro, under Article 1613 of the Code, "may not be compelled to consent to a partial redemption," the redemption by one co-heir or co-owner of the property in its totality does not vest in him ownership over it. Failure on the part of all the co-owners to redeem it entitles the vendee a retro to retain the property and consolidate title thereto in his name. 7But the provision does not give to the redeeming co-owner the right to the entire property. It does not provide for a mode of terminating a CO-OWNERSHIP. Neither does the fact that the petitioner had succeeded in securing title over the parcel in his name terminate the existing COOWNERSHIP. While his half-brothers and sisters are, as we said, liable to him for reimbursement as and for their shares in redemption expenses, he cannot claim exclusive right to the property owned in common. Registration of property is not a means of acquiring ownership. It operates as a mere notice of existing title, that is, if there is one. The petitioner must then be said to be a trustee of the property on behalf of the private respondents. The Civil Code states: ART. 1456. If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes. We agree with the respondent Court of Appeals that fraud attended the registration of the property. The petitioner's pretension that he was the sole heir to the land in the affidavit of extrajudicial settlement he executed preliminary to the registration thereof
betrays a clear effort on his part to defraud his brothers and sisters and to exercise sole dominion over the property. The aforequoted provision therefore applies. It is the view of the respondent Court that the petitioner, in taking over the property, did so either on behalf of his co-heirs, in which event, he had constituted himself a negotiorum gestor under Article 2144 of the Civil Code, or for his exclusive benefit, in which case, he is guilty of fraud, and must act as trustee, the private respondents being the beneficiaries, under the Article 1456. The evidence, of course, points to the second alternative the petitioner having asserted claims of exclusive ownership over the property and having acted in fraud of his co-heirs. He cannot therefore be said to have assume the mere management of the property abandoned by his co-heirs, the situation Article 2144 of the Code contemplates. In any case, as the respondent Court itself affirms, the result would be the same whether it is one or the other. The petitioner would remain liable to the Private respondents, his coheirs. This Court is not unaware of the well-established principle that prescription bars any demand on property (owned in common) held by another (co-owner) following the required number of years. In that event, the party in possession acquires title to the property and the state of CO-OWNERSHIP is ended . 8 In the case at bar, the property was registered in 1955 by the petitioner, solely in his name, while the claim of the private respondents was presented in 1974. Has prescription then, set in? We hold in the negative. Prescription, as a mode of terminating a relation of CO-OWNERSHIP, must have been preceded by repudiation (of the CO-OWNERSHIP). The act of repudiation, in turn is subject to certain conditions: (1) a co-owner repudiates the CO-OWNERSHIP; (2) such an act of repudiation is clearly made known to the other co-owners; (3) the evidence thereon is clear and conclusive, and (4) he has been in possession through open, continuous, exclusive, and notorious possession of the property for the period required by law. 9 The instant case shows that the petitioner had not complied with these requisites. We are not convinced that he had repudiated the CO-OWNERSHIP; on the contrary, he had deliberately kept the private respondents in the dark by feigning sole heirship over the estate under dispute. He cannot therefore be said to have "made known" his efforts to deny the CO-OWNERSHIP. Moreover, one of the private respondents, Emeteria Asejo, is occupying a portion of the land up to the present, yet, the petitioner has not taken pains to eject her therefrom. As a matter of fact, he sought to recover possession of that portion Emeteria is occupying only as a counterclaim, and only after the private respondents had first sought judicial relief. It is true that registration under the Torrens system is constructive notice of title, 10 but it has likewise been our holding that the Torrens title does not furnish a shield for fraud. 11 It is therefore no argument to say that the act of registration is equivalent to notice of repudiation, assuming there was one, notwithstanding the long-standing rule that registration operates as a universal notice of title. For the same reason, we cannot dismiss the private respondents' claims commenced in 1974 over the estate registered in 1955. While actions to enforce a constructive trust prescribes in ten years, 12 reckoned from the date of the registration of the property, 13 we, as we said, are not prepared to count the period from such a date in this case. We note the petitioner's sub rosa efforts to get hold of the property exclusively for himself beginning with his fraudulent misrepresentation in his unilateral affidavit of extrajudicial settlement that he is "the only heir and child of his mother Feliza with the consequence that he was able to secure title in his name also." 14 Accordingly, we hold that the right of the private respondents commenced from the time they actually discovered the petitioner's act of defraudation. 15 According to the respondent Court of Appeals, they "came to know [of it] apparently only during the progress of the litigation." 16 Hence, prescription is not a bar. Moreover, and as a rule, prescription is an affirmative defense that must be pleaded either in a motion to dismiss or in the answer otherwise it is deemed waived, 17 and here, the petitioner never raised that defense. 18 There are recognized exceptions to this rule, but the petitioner has not shown why they apply. WHEREFORE, there being no reversible error committed by the respondent Court of Appeals, the petition is DENIED. The Decision sought to be reviewed is hereby AFFIRMED in toto. No pronouncement as to costs. SO ORDERED,
Property Volume 4 (Co-ownership)
Bachelor of Laws II-A
CASE 2
Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 79899 April 24, 1989 D. ANNIE TAN, petitioner, vs. COURT OF APPEALS, CHINA BANKING CORPORATION, GEORGE LAUREL TAN, TEODORA TAN ONG, ROSA TAN, ROSITA TAN, and MAURO UMALI TAN, respondents. Tabaquero, Albano & Evangelista for petitioner. Del Rosario, Lim, Telan De Vera & Vigilia for respondent China Banking Corporation. Estela B. Perlas for respondents Tan.
GUTIERREZ, JR., J.: Tan Tiong Tick, married to Tan Ong Hun, was the registered owner of a 178 square meter parcel of land and its improvements located at Lot No. 5, Block No. 2021 of the Cadastral Survey of Manila, Carvajal Street, Binondo, Manila. Mr. and Mrs. Tan had six children - respondents George Laurel Tan, Teodora Tan Ong, Rosa Tan, Rosita Tan, Mauro Umali Tan, and the petitioner, D. Annie Tan. On February 6, 1963, in order to secure payment of various obligations with respondent China Banking Corporation or China Bank for short, Mr. and Mrs. Tan Tiong Tick mortgaged the disputed property to the bank. Tan Tiong Tick died on December 22, 1969 without having paid his obligations. On June 27, 1972, China Bank foreclosed the mortgage and purchased the property at public auction as the highest bidder for the sum of P186,100.00. On August 31, 1972, the widow and children of Tan Tiong Tick filed a complaint against China Bank with the Court of First Instance of Manila praying for the nullity of the real estate mortgage executed by the spouses Tan and the foreclosure sale conducted by the Sheriff. They also asked that the redemption period be suspended. The one year period for redemption expired on July 6, 1973 without the Tan heirs having exercised the right to redeem the property. The widow Tan Ong Hun having died, only the children were left to redeem the lot and building. China Bank consolidated its ownership over the land and improvements and a new title, Transfer Certificate Title No. 112924 was issued in the name of the bank on August 16, 1973. About two weeks earlier, however, the heirs of Tan and China Bank agreed to amicably settle the action for nullity of mortgage before the Court of First Instance of Manila. The parties filed a joint motion to dismiss. The verbal agreement regarding the disposition of the property was confirmed in a letter of China Bank signed by four of the children and one daughter-in-law on August 3, 1973. The heirs were given the right to repurchase the property for P180,000.00 provided it was done on or before August 31,1974. The agreement reads in part: xxx xxx xxx
It is understood, that should you fail to pay us in full the aforesaid sum of P180,000.00 on or before August 31, 1974, your right to repurchase the property shall terminate and we shall be free to dispose of the property to any other party. (p. 81, Folder of Exhibits; Exhibit 2, CBC) There are allegations that some of the heirs tried to buy the property in the ensuing one year period but for one reason or another, were unable to do so. Finally, on August 30, 1974, or one day before the end of the period to buy back, petitioner D. Annie Tan went to the office of Mr. Dee K. Chiong of China Bank and tendered her China Bank Manager's Check for P180,000.00 as payment. Upon the insistence of the bank official, the deed of sale returning the property to the heirs was executed in favor, not of D. Annie Tan who alone paid for the property but of all the six heirs of Tan Tiong Tick who would, therefore, share and share alike. This led to the filing of the action by D. Annie Tan against her brothers and sisters and the China Banking Corporation, now respondents in this petition. The petitioner prayed the trial court to order the respondents-(1) to reconvey the disputed property to her and (2) to pay actual damages in the amount of P300,000.00, moral damages in the amount of P100,000.00, exemplary damages in the amount of P50,000.00, and attorney's fees in the amount of P10,000.00. On September 1, 1980, the Court of First Instance of Manila rendered a decision, the dispositive portion of which reads: ACCORDINGLY, judgment is hereby rendered as follows: (1) Dismissing the complaint as well as defendants' counter-claim; (2) Ordering each of the defendants, namely George Laurel Tan, Teodora Tan Ong, Rosa Tan and Rosita Tan to reimburse the plaintiff the sum of P30,000.00 plus 12% interest from August 20, 1974 until the whole amount is fully paid; (3) Ordering the defendant Mauro Umali Tan who had been ordered in default to execute the deed of sale of his rights and interests over the property covered in Transfer Certificate of Title No. 64806 in favor of the plaintiff in accordance with his instrument of waiver dated June 25, 1974, and (4) Without pronouncement as to costs. (Annex B, Rollo, pp. 43-44) On October 17, 1986, the Court of Appeals affirmed the decision of the trial court. On September 7, 1987, a motion for reconsideration was denied. Hence this petition. The petitioner gives the following grounds why her petition should be given due course: 1. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE DECISION OF THE TRIAL COURT ORDERING REIMBURSEMENT TO THE PETITIONER INSPITE OF THE FACT THAT THE LEGAL BASIS FOR THE REIMBURSEMENT, WHICH WAS NOT CLEARLY EXPLAINED IN THE DECISION, MAY HAVE BEEN THE ALLEGED EXISTENCE OF (1) A CO-OWNERSHIP AMONG THE HEIRS, AND (2) CREDITOR-DEBTOR RELATIONSHIP BETWEEN THE HEIRS AND THE BANK, WHICH HAVE NOT BEEN FULLY ESTABLISHED BY EVIDENCE. 2. ASSUMING, WITHOUT ADMITTING, THE EXISTENCE AMONG THE HEIRS OF A CO-OWNERSHIP AND/OR A CREDITOR/ DEBTOR RELATIONSHIP BETWEEN THE RESPONDENT BANK AND THE HEIRS, RESPONDENT COURT GRAVELY ERRED IN NOT HOLDING THAT THE CO-HEIRS OF PETITIONER, THE PRIVATE RESPONDENTS HEREIN, HAVE IMPLIEDLY WAIVED THEIR RIGHT TO BUY BACK THE PROPERTY BY THEIR FAILURE TO RAISE THE MONEY FOR THEIR RESPECTIVE SHARES UP TO THE LAST DAY GIVEN THEM BY THE RESPONDENT BANK ON AUGUST 31, 1974, THUS WHEN PETITIONER BOUGHT THE PROPERTY BY HER EXCLUSIVE FUNDS, IT BENEFITED HER ALONE AND NOT HER CO-HEIRS. 3. RESPONDENT COURT OF APPEALS, GRAVELY ERRED IN NOT HOLDING THAT THE LETTER-AGREEMENT DATED AUGUST 3, 1973, FOR WHICH THE RIGHTS OF THE PETITIONER AND HER CO-HEIRS TO BUY BACK THE FORECLOSED
PROPERTY AROSE, IS ACTUALLY NOT A RIGHT TO REPURCHASE BUT IS AN OPTION TO BUY BACK THE PROPERTY WHICH MAY BE EXERCISED BY THE HEIRS SINGLY OR COLLECTIVELY. (Rollo, pp. 21-22) The decision of the trial court, affirmed by the Court of Appeals, is based on the principle that the heirs of Mr. and Mrs. Tan Tiong Tick being co- owners of the foreclosed property, a repurchase or reconveyance effected by only one of those heirs redounds to the CO-OWNERSHIP. This explains why the courts below ordered four of the heirs - George Laurel Tan, Teodora Tan Ong, Rosa Tan and Rosita Tan - to reimburse D. Annie Tan the sum of P30,000.00 each plus 12% interests while the share of the fifth heir who was in default and who had waived his interest would go to the petititioner. The petitioner contends that there was no CO-OWNERSHIP and no creditor/debtor relationship between her and the other children. The petitioner states: This controversy addresses itself to the question of whether or not the coownership among the heirs over a parcel of land formerly belonging to their parents had been dissolved by the foreclosure and consolidation of title by a bank after the redemption period of one (1) year had expired, such that a unilateral obligation given by the bank to the heirs to buy back the foreclosed property out of liberality is actually an option to buy given to the heirs as group of persons singly or collectively, and not strictly a right of repurchase to be exercised by the heirs as coowners. If it is admitted that the CO-OWNERSHIP of the heirs over the foreclosed property of their parents had been dissolved by the consolidation of the title in the mortgagee's name, which in this case is respondent Bank and that there exists no creditor-debtor relationship between respondent Bank and the heirs, then the bank may not impose an obligation to the heirs that they should purchase back the property only as former co-owners or as solidary debtors, but as groups of persons, singly or collectively. The bank would then be imposing an onerous condition upon the heirs of going back to the dissolved coownership which the law frowns upon. To settle this case once and for all, herein petitioner anchors her claim on the theory that when the respondent Bank foreclosed the property and consolidated its title on August 16, 1973 and T.C.T. No. 112924 was issued in its name, the COOWNERSHIP of the heirs of the deceased parents of petitioner and private respondents over the property in question have been dissolved. In this wise, the decision of the respondent court premised on the existence of a CO-OWNERSHIP or in a creditor-debtor relationship, and ordering the reimbursement to petitioner of the money for the purchase of the property in question which allegedly redounded to the benefits of her co-heirs as coowners or solidary debtors has no leg to stand on. It is this erroneous decision of respondent court based on a misapprehension of facts and contrary to settled jurisprudence that petitioner comes to this Honorable Court, for relief. (Sese v. Intermediate Appellate Court, G.R. No. 66186, July 31, 1987; Moran, Jr. v. Court of Appeals, 133 SCRA 88; Manero v. Court of Appeals, 102 SCRA 817; Carolina Industries v. CMS Brokerage, 97 SCRA 734; Sacay v. Sandiganbayan, 142 SCRA 593) (Rollo, pp. 7-9) The first question which arises is the correctness of the assumption that there was a CO-OWNERSHIP among the children of Tan Tiong Tick and Tan Ong Hun when the petitioner purchased the property. Since the lot and its improvement were mortgaged by the deceased parents, there can be no question that a CO-OWNERSHIP existed among the heirs during the period given by law to redeem the foreclosed property. Redemption by one during this period would have inured to the benefit of all (Adille v. Court of Appeals, G.R. No. 44546, 157 SCRA 455 [1988]; and De Guzman v. Court of Appeals, G.R. No. 47378, 148 SCRA 75 [1987]). The records show, however, that when the petitioner purchased the disputed property on August 30, 1974, any CO-OWNERSHIP among the brothers and sisters no longer existed. The period to redeem had expired more than one year earlier, on July 6, 1973. The respondent China Bank consolidated its ownership and a new title was issued in the bank's name. When the heirs allowed the one year redemption period to expire without redeeming their parents' former property and permitted the consolidation of ownership and the issuance of a new title, the CO-OWNERSHIP was extinguished. The challenged ruling of the respondent court is, therefore, based on erroneous premises. Under Section 63-B of Presidential Decree No. 1529, the Property Registration Decree, in case of non-redemption, the purchaser at the foreclosure sale, meaning the respondent Bank in this case, is entitled to a new certificate of title in its name after filing the necessary papers with the Register of Deeds (Spouses Teofisto and Eulalia Verceles v. Court of First Instance of Rizal, et al., G.R. No. 62219, February 28, 1989). It becomes a ministerial duty to place the buyer in possession of the property he now owns (Banco
Filipino v. Intermediate Appellate Court, G.R. No. 68878,142 SCRA 44 [1986]). Ownership, therefore, passed to China Bank and there was no more CO-OWNERSHIP among the heirs. The non-existence of a common inheritance of the Tan children at the time the disputed property was purchased from China Bank is moreover supported by the evidence showing that there was no more inheritance to divide. It had already been divided. Tan Tiong Tick left other properties in addition to the property disputed in this petition. The eldest son, George Laurel Tan, inherited practically all the properties consisting of several hectares of real estate in Novaliches, Metro Manila; a furnished house in Greenhills, Mandaluyong; and a cigar factory (t.s.n., November 18, 1976, p. 24). The petitioner also claims that stock certificates went to another sister, Teodora Tan Ong because she "forced" the other heirs to sign a deed of sale in her favor. May the heirs be considered as debtors in common, substituting for their parents in liquidating the latter's obligations? The answer is again, No. Upon the foreclosure of the mortgaged property and its purchase by China Bank as the highest bidder, the proceeds of the auction sale were applied to the various debts of the Tan spouses. The parents' debts were paid. The obligation having been extinguished, there was no more common debt and no legal subrogation arising when one pays the debts properly accruing to several others. Respondent China Bank contends that the letter agreement dated August 3, 1973 called for the reconveyance of the land and improvements to all the heirs "in equal undivided shares." There is no such stipulation in the letter. There is reference to a verbal agreement to reconvey to the "heirs of your late father" but no requirement that everybody must share in the purchase or the offer would be withdrawn. What is clear is that the bank's general manager, Mr. Dee K. Chiong tried to impose the above requirement when the one year period to buy back was about to expire. Mr. Dee rejected the offer of D. Annie Tan to buy the property for herself alone. He insisted that the money brought by the petitioner would be considered a joint fund of all the heirs and ordered the same annotated on the back of the check given as payment for the property. This attitude of Mr. Dee K. Chiong is in sharp contrast to the bank's official stand embodied in a letter to the Central Bank. Asked to comment on a letter-complaint filed by D. Annie Tan with Malacaang and forwarded to the Central Bank, the respondent bank through its Legal Officer wrote the Director, Department of Commercial and Savings Bank, Central Bank an explanation, part of which states: To our mind, the dispute is not between the Bank and the heirs or any one of them, but among the heirs themselves, for as far as the Bank is concerned, it makes no difference whether the property is reconveyed to all the heirs or to any one of them alone as they may agree. As a matter of fact the complainant has already filed a Petition under the Cadastral Case now pending in the CFI, Manila, involving the property and all the heirs. (Copy of the Petition is hereto attached as Annex "l0"). At any rate, it is our honest conviction that the charges filed by the complainant and the interpretation of Articles 1302 and 1303 of the New Civil Code properly belong to the Courts where the complainant can always have her right, if any, vindicated, and if only to resolve the issue, we shall welcome any court action to clear the matter. (Folder of Exhibits, pp. 97- 98) The petitioner questions the unusual interest shown by China Bank in the case when its stand should be one of neutrality. She claims that there is an orchestrated alliance between the bank and the other private respondents as shown by the fact that the bank seems to be more eager and vigorous than the other heirs to win the case. (Rollo, p. 310). As earlier stated, there is nothing in the August 3, 1973 letter-agreement which called for either a purchase by all the heirs or no purchase at all. But could not Mr. Dee K. Chiong validly impose such a requirement at the time the tender of money to buy the property was made? Again, the answer is in the negative.
We agree with the petitioner that her agreeing to sign an annotation at the back of the check was a case of vitiated consent. She states that her conformity was null and void because it was made under duress. The records show that up to the last hour the petitioner was pleading with Mr. Dee K. Chiong to buy the property for herself alone as the money she had raised was not in any way owned by the other heirs. Since the period was expiring, the petitioner had no choice. It was a case of either agreeing to the bank executive's requirement or losing the family property forever to strangers. Mr. Dee could not impose a new CO-OWNERSHIP upon the petitioner, her brothers and sisters. CO-OWNERSHIP is discouraged by law. As held in the case of Basa v. Aguilar (G.R. No. L-30994, 117 SCRA 128, 130-131 [1982]): Legal redemption is in the nature of a privilege created by law partly for reasons of public policy and partly for the benefit and convenience of the redemptioner, to afford him a way out of what might be a disagreeable or inconvenient association into which he has thrust. (10 Manresa, 4th Ed., 317.) It is intended to minimize COOWNERSHIP. The law grants a co-owner the exercise of the said right of redemption when the shares of the other owners are sold to "a third person." A third person, within the meaning of this Article, is anyone who is not a coowner. (Sentencia of February 7, 1944 as cited in Tolentino, Comments on the Civil Code, Vol. V, p. 160.) (Emphasis supplied) The records show that the annotation at the back of the P180,000.00 manager's check that the funds were contributed by all the heirs was made by a China Bank representative and that D. Annie Tan was told by Dee K Chiong that if she would not sign it, he would not accept the manager's check and she would lose her right to buy the lot within the period offered by the bank. The petitioner, at first, refused but being placed between the difficulty of agreeing to the condition or losing the property, she decided to agree. (t.s.n., September 27, 1976, pp. 24-25; t.s.n., November 18, 1976, p. 36) The petitioner was also aware that a certain Mr. Ang who operated a travel agency in the next door building was eager to buy the property at double the price stated in the letteragreement executed more than a year earlier. (Court of Appeals Rollo, Brief for Plaintiff-Appellant, p. 77) The petitioner further argues: The insistence by respondent Bank that the said letter-agreement is a right to re-purchase given to all the heirs of the late Tan Tiong Tick to be exercised only collectively cannot legally stand considering the following circumstances: a) What will happen if one of the heirs of the late Tan Tiong Tick refuses or fails to exercise his right to purchase for whatever reason? Cannot any of the other heirs, but all, raise sufficient funds for the full amount of the purchase price because the other heirs could not let him or her borrow money to cover his or her share? Would such refusal then prejudice the other heirs? b) Cannot two or more heirs, but not all, who have sufficient funds exercise the right of purchase? c) Would all the heirs then who signed the letter-agreement as in the case at bar lose their right to purchase the property because of the refusal of one heir? d) If only one of the heirs has sufficient funds to purchase the property and the others do not have, and this particular heir does not want to lend her or his money to the other heirs who have none, can the offer of the other heir to exercise the option to buy in her or his own name alone be legally refused? e) Finally, can the buying back of the property by one heir alone be disallowed considering that she is the one who has enough or sufficient funds and that her action will prevent the property from going to third persons, like respondent Bank, for failure to pay the purchase price on the last day of the period given by respondent Bank?' It is petitioner's submission that to follow the arguments of respondent Bank that the letter-agreement can only be exercised collectively and not singly would render the said agreement a useless piece of paper, and gravely prejudicial to the property itself.
What is more, even the respondent bank's legal officer, Atty. Arsenio Sy Santos, when asked to comment on the case of the petitioner, admitted that indeed the letter-agreement of August 3,1973 is actually an option to buy. Said legal officer gave the following observations and comments, to wit: xxxxxxxxx Observations and comments It may be interesting to note that the provisions of Articles 1302 and 1303 which read as follows: "Art. 1302. It is presumed that there is legal subrogation: (1) When a creditor pays another creditor who is preferred even without the debtor's knowledge; (2) When a third person, not interested in the obligation, pays with the express or tacit approval of the debtor. (3) When even without the knowledge of the debtor, a person interested in the fulfillment of the obligation pays, without prejudice to the effects of confusion as to the latter's share. Art. 1303. Subrogation transfers to the person subrogated the credit with all the rights thereto appertaining, either against the debtor or against third person, be they guarantors or possessors of mortgages, subject to stipulated in a conventional subrogations (sic)." refer to cases where the creditor-debtor relationship exists among the parties. (Rollo, pp. 243-246) xxx xxx xxx There was no creditor-debtor relationship existing among the heirs and Mr. Dee had no legal authority to create one. China Bank contends that when it told the petitioner that the property could not be reconveyed to her alone, she was likewise informed that a similar offer from some of the other co-heirs had also been politely turned down. (Exhibit 7, China Bank, Folder of Exhibits, p. 87) The petitioner disputes this claim. She states that there was no such offer by her co-heirs because she was the only one willing to buy back the lot and the only one with the means to do so at that time. It was only on September 12, 1974 that the individual respondents offered to repurchase. By that time, D. Annie Tan had already paid for the lot and was already insisting on a conveyance of the property in her name alone. The petitioner states: There is, therefore, no doubt that the money used in buying back the property belongs exclusively to the petitioner. Private respondents' in action in not contributing the necessary money up to the last day of the buy back period is fatal to their cause. To paraphrase one case decided by this Honorable Court, courts cannot look with favor at parties who, by their silence, delay and inaction, knowingly induce another to spend time, effort and expense in protecting their interests over the property by paying the buy back money only to spring from ambush and claim title or interest over the property when the land and building value have become higher. (See Lola v. Court of Appeals, G.R. No. 46575, November 13, 1986). Moreover, the laws aid the vigilant, not those who slumber on their rights. (Miraflor v. Court of Appeals, G.R. Nos. 40151-52, April 8, 1986). Definetly, the effects of a waiver militates against the private respondents. Having forfeited, abandoned and/or waived their rights, private respondents are now estopped from taking an inconsistent position. They cannot now assert that they are still CO-owners of the property with the petitioner. (Sec. 65, Rule 123, Rules of Court; Hernaez v. Hernaez, 32 Phil. 214) (See also Banco de Oro Savings & Mortgage Bank v. Equitable Banking Corporation, G.R.
No. 74917, January 20, 1988, citing Saura Import and Export Co. v. Court of Appeals, 24 SCRA 974). All the elements of a valid waiver (1) the existence of a right; (2) the knowledge of the existence thereof; and (3) the intention to relinquish such right, either expressly or impliedly are present. (Director of Lands v. Abiertas, 44 O.G. 928). ... (Rollo, pp. 238-239) The claim of the respondents Tan in their memorandum that they gave their individual contributions to the petitioner to raise the P180,000.00 is not worthy of credence. At the time of the repurchase, the petitioner was already estranged from the respondents Tan and they would not have given her any money without corresponding receipts or given her money under any circumstance, for that matter. In fact, there is no reason why the petitioner should be the one to collect the money of the heirs and bring it to China Bank. She was neither a son nor the eldest. Neither did the others feel kindly towards her. The petitioner had called for a conference on July 23, 1974 at 619 Carvajal Street, Binondo, Manila to discuss compliance with the letter-agreement considering the fast approaching deadline. Not one showed up. (Rollo, pp. 44-45) The money was raised by D. Annie Tan through her connections with Jardine Davies because of her construction business. The decision of the respondent court confirmed the factual findings of the trial court. It declared that the respondents Tan became debtors of petitioner Tan and ordered them to reimburse the P30,000.00 each which were advanced by the petitioner. There was no pooling of resources up to August 30,1974 when at 4:00 in the afternoon, D. Annie Tan went to Mr. Dee K. Chiong with the China Bank manager's check for P180,000.00. The equities of this case also favor the grant of the petition. D. Annie Tan went to plenty of trouble in her effort to buy back the property formerly owned by her parents. There is nothing in the records to show that, beyond making some perfunctory allegations, the respondents Tan did anything to save the property from falling into the hands of other persons. The petitioner states that she has now spent substantial sums to pay for real estate taxes and to renovate, and improve the premises. According to her she has "spent her little fortunes to preserve the patrimony left by her parents." She alone deserves to be entitled to the property, in law and equity. (Rollo, p. 317) WHEREFORE, the petition is hereby GRANTED. The questioned decision of the Court of Appeals is REVERSED and SET ASIDE. The respondent China Banking Corporation is ordered to execute the deed of sale over the disputed property in favor of the petitioner alone. SO ORDERED.
10
CASE 3
SECOND DIVISION [G.R. No. 108228. February 1, 2001] SPOUSES MANUEL and SALVACION DEL CAMPO, Petitioners, v. HON. COURT OF APPEALS and HEIRS OF JOSE REGALADO, SR.,Respondents. DECISION QUISUMBING, J.: This is a petition for review on certiorari of a decision of the Court of Appeals which affirmed the judgment of the Regional Trial Court of Roxas City, Branch 15 in Civil Case No. V-5369, ordering the dismissal of the action for repartition, resurvey and reconveyance filed by petitioners. Pure questions of law are raised in this appeal as the following factual antecedents are undisputed: Salome, Consorcia, Alfredo, Maria, Rosalia, Jose, Quirico and Julita, all surnamed Bornales, were the original co-owners of Lot 162 of the Cadastral Survey of Pontevedra, Capiz under Original Certificate of Title No. 18047. As appearing therein, the lot, which consisted of a total area of 27,179 square meters was divided in aliquot shares among the eight (8) co-owners as follows: Salome Bornales 4/16 Consorcia Bornales 4/16 Alfredo Bornales 2/16 Maria Bornales 2/16 Jose Bornales 1/16 Quirico Bornales 1/16 Rosalia Bornales 1/16 Julita Bornales 1/16 On July 14, 1940, Salome sold part of her 4/16 share in Lot 162 for P200.00 to Soledad Daynolo. In the Deed of Absolute Sale signed by Salome and two other co-owners, Consorcia and Alfredo, the portion of Lot 162 sold to Soledad was described as having more or less the following measurements: 63-1/2 meters from point 9 to 10, 35 meters from point 10 to point 11, 30 meters from point 11 to a certain point parallel to a line drawn from points 9 to "10; and then from this Certain Point to point 9 and as shown in the accompanying sketch, and made an integral part of this deed, to SOLEDAD DAYNOLO, her heirs and assigns.[1 Thereafter, Soledad Daynolo immediately took possession of the land described above and built a house thereon. A few years later, Soledad and her husband, Simplicio Distajo, mortgaged the subject portion of Lot 162 as security for a P400.00 debt to Jose Regalado, Sr. This transaction was evidenced by a Deed of Mortgage [2 dated May 1, 1947. On April 14, 1948, three of the eight co-owners of Lot 162, specifically, Salome, Consorcia and Alfredo, sold 24,993 square meters of said lot to Jose Regalado, Sr. On May 4, 1951, Simplicio Distajo, heir of Soledad Daynolo who had since died, paid the mortgage debt and redeemed the mortgaged portion of Lot 162 from Jose Regalado, Sr. The latter, in turn, executed a Deed of Discharge of Mortgage [3 in favor of Soledads heirs, namely: Simplicio Distajo, Rafael Distajo and Teresita Distajo-Regalado. On same date, the said heirs sold the redeemed portion of Lot 162 for P1,500.00 to herein petitioners, the spouses Manuel Del Campo and Salvacion Quiachon.
Meanwhile, Jose Regalado, Sr. caused the reconstitution of Original Certificate of Title No. 18047. The reconstituted OCT No. RO4541 initially reflected the shares of the original co-owners in Lot 162. However, title was transferred later to Jose Regalado, Sr. who subdivided the entire property into smaller lots, each covered by a respective title in his name. One of these small lots is Lot No. 162C-6 with an area of 11,732 square meters which was registered on February 24, 1977 under TCT No. 14566. In 1987, petitioners Manuel and Salvacion del Campo brought this complaint for repartition, resurvey and reconveyance against the heirs of the now deceased Jose Regalado, Sr. Petitioners claimed that they owned an area of 1,544 square meters located within Lot 162-C-6 which was erroneously included in TCT No. 14566 in the name of Regalado. Petitioners alleged that they occupied the disputed area as residential dwelling ever since they purchased the property from the Distajos way back in 1951. They also declared the land for taxation purposes and paid the corresponding taxes. On April 1, 1987, summons were served on Regalados widow, Josefina Buenvenida, and two of her children, Rosemarie and Antonio. Josefina and Rosemarie were declared in default on May 10, 1989 because only Antonio filed an answer to the complaint. During trial, petitioners presented the Deed of Absolute Sale [4 executed between Soledad Daynolo and Salome Bornales as well as the Deed of Mortgage [5 and Deed of Discharge [6 signed by Jose Regalado, Sr. The Deed of Absolute Sale [7 showing the purchase by the Del Campos of the property from the Distajos was likewise given in evidence. Despite the filing of an answer, Antonio failed to present any evidence to refute the claim of petitioners. Thus, after considering Antonio to have waived his opportunity to present evidence, the trial court deemed the case submitted for decision. On November 20, 1990, the trial court rendered judgment dismissing the complaint. It held that while Salome could alienate her pro-indiviso share in Lot 162, she could not validly sell an undivided part thereof by metes and bounds to Soledad, from whom petitioners derived their title. The trial court also reasoned that petitioners could not have a better right to the property even if they were in physical possession of the same and declared the property for taxation purposes, because mere possession cannot defeat the right of the Regalados who had a Torrens title over the land. On appeal, the Court of Appeals affirmed the trial courts judgment, with no pronouncement as to costs. [8 Petitioners now seek relief from this Court and maintain that: I. THE FACT THAT THE SALE OF THE SUBJECT PORTION CONSTITUTES A SALE OF A CONCRETE OR DEFINITE PORTION OF LAND OWNED IN COMMON DOES NOT ABSOLUTELY DEPRIVE HEREIN PETITIONERS OF ANY RIGHT OR TITLE THERETO; II. IN ANY EVENT, HEREIN PRIVATE RESPONDENTS ARE ALL ESTOPPED FROM DENYING THE RIGHT AND TITLE OF HEREIN PETITIONERS.[9 In resolving petitioners appeal, we must answer the following questions: Would the sale by a co-owner of a physical portion of an undivided property held in common be valid? Is respondent estopped from denying petitioners right and title over the disputed area? Under the facts and circumstances duly established by the evidence, are petitioners entitled to repartition, resurvey and reconveyance of the property in question? On the first issue, it seems plain to us that the trial court concluded that petitioners could not have acquired ownership of the subject land which originally formed part of Lot 162, on the ground that their alleged right springs from a void sale transaction between Salome and Soledad. The mere fact that Salome purportedly transferred a definite portion of the co-owned lot by metes and bounds to Soledad, however, does not per se render the sale a nullity. This much is evident under Article 493 [10 of the Civil Code and pertinent jurisprudence on the matter. More particularly in Lopez vs. Vda. De Cuaycong, et.al. [11 which we find relevant, the Court, speaking through Mr. Justice Bocobo, held that:
12
The fact that the agreement in question purported to sell a concrete portion of the hacienda does not render the sale void, for it is a well-established principle that the binding force of a contract must be recognized as far as it is legally possible to do so. Quando res non valet ut ago, valeat quantum valere potest. (When a thing is of no force as I do it, it shall have as much force as it can have.)[12 Applying this principle to the instant case, there can be no doubt that the transaction entered into by Salome and Soledad could be legally recognized in its entirety since the object of the sale did not even exceed the ideal shares held by the former in the COOWNERSHIP. As a matter of fact, the deed of sale executed between the parties expressly stipulated that the portion of Lot 162 sold to Soledad would be taken from Salomes 4/16 undivided interest in said lot, which the latter could validly transfer in whole or in part even without the consent of the other co-owners. Salomes right to sell part of her undivided interest in the co-owned property is absolute in accordance with the well-settled doctrine that a co-owner has full ownership of his pro-indiviso share and has the right to alienate, assign or mortgage it, and substitute another person in its enjoyment [13 Since Salomes clear intention was to sell merely part of her aliquot share in Lot 162, in our view no valid objection can be made against it and the sale can be given effect to the full extent. We are not unaware of the principle that a co-owner cannot rightfully dispose of a particular portion of a co-owned property prior to partition among all the co-owners. However, this should not signify that the vendee does not acquire anything at all in case a physically segregated area of the co-owned lot is in fact sold to him. Since the co-owner/vendors undivided interest could properly be the object of the contract of sale between the parties, what the vendee obtains by virtue of such a sale are the same rights as the vendor had as co-owner, in an ideal share equivalent to the consideration given under their transaction. In other words, the vendee steps into the shoes of the vendor as co-owner and acquires a proportionate abstract share in the property held in common. Resultantly, Soledad became a co-owner of Lot 162 as of the year 1940 when the sale was made in her favor. It follows that Salome, Consorcia and Alfredo could not have sold the entire Lot 162 to Jose Regalado, Sr. on April 14, 1948 because at that time, the ideal shares held by the three co-owners/vendors were equivalent to only 10/16 of the undivided property less the aliquot share previously sold by Salome to Soledad. Based on the principle that no one can give what he does not have, [14 Salome, Consorcia and Alfredo could not legally sell the shares pertaining to Soledad since a co-owner cannot alienate more than his share in the COOWNERSHIP. We have ruled many times that even if a co-owner sells the whole property as his, the sale will affect only his own share but not those of the other co-owners who did not consent to the sale. Since a co-owner is entitled to sell his undivided share, a sale of the entire property by one co-owner will only transfer the rights of said co-owner to the buyer, thereby making the buyer a co-owner of the property. [15 In this case, Regalado merely became a new co-owner of Lot 162 to the extent of the shares which Salome, Consorcia and Alfredo could validly convey. Soledad retained her rights as co-owner and could validly transfer her share to petitioners in 1951. The logical effect of the second disposition is to substitute petitioners in the rights of Soledad as co-owner of the land. Needless to say, these rights are preserved notwithstanding the issuance of TCT No. 14566 in Regalados name in 1977. Be that as it may, we find that the area subject matter of this petition had already been effectively segregated from the mother lot even before title was issued in favor of Regalado. It must be noted that 26 years had lapsed from the time petitioners bought and took possession of the property in 1951 until Regalado procured the issuance of TCT No. 14566. Additionally, the intervening years between the date of petitioners purchase of the property and 1987 when petitioners filed the instant complaint, comprise all of 36 years. However, at no instance during this time did respondents or Regalado, for that matter, question petitioners right over the land in dispute. In the case of Vda. de Cabrera vs. Court of Appeals, [16 we had occasion to hold that where the transferees of an undivided portion of the land allowed a co-owner of the property to occupy a definite portion thereof and had not disturbed the same for a period too long to be ignored, the possessor is in a better condition or right than said transferees. (Potior est condition possidentis). Such undisturbed possession had the effect of a partial partition of the co-owned property which entitles the possessor to the definite portion which he occupies. Conformably, petitioners are entitled to the disputed land, having enjoyed uninterrupted possession thereof for a total of 49 years up to the present. The lower courts reliance on the doctrine that mere possession cannot defeat the right of a holder of a registered Torrens title over property is misplaced, considering that petitioners were deprived of their dominical rights over the said lot through fraud and with evident bad faith on the part of Regalado. Failure and intentional omission to disclose the fact of actual physical possession by another person during registration proceedings constitutes actual fraud. Likewise, it is fraud to knowingly omit or conceal a fact, upon which benefit is obtained to the prejudice of a third person. [17 In this case, we are convinced that Regalado knew of the fact that he did not have a title to the entire lot and could not, therefore, have validly registered the same in his name alone because he was aware of petitioners possession of the subject portion as well as the sale between Salome and Soledad.
That Regalado had notice of the fact that the disputed portion of Lot 162 was under claim of ownership by petitioners and the latters predecessor is beyond question. Records show that the particular area subject of this case was mortgaged by Soledad and her husband to Jose Regalado, Sr. as early as May 1, 1947 or one year prior to the alienation of the whole lot in favor of the latter. Regalado never questioned the ownership of the lot given by Soledad as security for the P400.00 debt and he must have at least known that Soledad bought the subject portion from Salome since he could not have reasonably accepted the lot as security for the mortgage debt if such were not the case. By accepting the said portion of Lot 162 as security for the mortgage obligation, Regalado had in fact recognized Soledads ownership of this definite portion of Lot 162. Regalado could not have been ignorant of the fact that the disputed portion is being claimed by Soledad and subsequently, by petitioners, since Regalado even executed a Release of Mortgage on May 4, 1951, three years after the entire property was supposedly sold to him. It would certainly be illogical for any mortgagee to accept property as security, purchase the mortgaged property and, thereafter, claim the very same property as his own while the mortgage was still subsisting. Consequently, respondents are estopped from asserting that they own the subject land in view of the Deed of Mortgage and Discharge of Mortgage executed between Regalado and petitioners predecessor-in-interest. As petitioners correctly contend, respondents are barred from making this assertion under the equitable principle of estoppel by deed, whereby a party to a deed and his privies are precluded from asserting as against the other and his privies any right or title in derogation of the deed, or from denying the truth of any material fact asserted in it. [18 A perusal of the documents evidencing the mortgage would readily reveal that Soledad, as mortgagor, had declared herself absolute owner of the piece of land now being litigated. This declaration of fact was accepted by Regalado as mortgagee and accordingly, his heirs cannot now be permitted to deny it. Although Regalados certificate of title became indefeasible after the lapse of one year from the date of the decree of registration, the attendance of fraud in its issuance created an implied trust in favor of petitioners and gave them the right to seek reconveyance of the parcel wrongfully obtained by the former. An action for reconveyance based on an implied trust ordinarily prescribes in ten years. But when the right of the true and real owner is recognized, expressly or implicitly such as when he remains undisturbed in his possession, the said action is imprescriptible, it being in the nature of a suit for quieting of title. [19 Having established by clear and convincing evidence that they are the legal owners of the litigated portion included in TCT No. 14566, it is only proper that reconveyance of the property be ordered in favor of petitioners. The alleged incontrovertibility of Regalados title cannot be successfully invoked by respondents because certificates of title merely confirm or record title already existing and cannot be used to protect a usurper from the true owner or be used as a shield for the commission of fraud. [20 WHEREFORE , the petition is GRANTED. The assailed decision of the Court of Appeals in CA-G.R. CV No. 30438 is REVERSED and SETASIDE. The parties are directed to cause a SURVEY for exact determination of their respective portions in Lot 162-C-6. Transfer Certificate of Title No. 14566 is declared CANCELLEDand the Register of Deeds of Capiz is ordered to ISSUE a new title in accordance with said survey, upon finality of this decision. Costs against Respondents. SO ORDERED.
14
CASE 4
THIRD DIVISION G.R. No. L-57062 January 24, 1992 MARIA DEL ROSARIO MARIATEGUI, ET AL., petitioners, -versusHON. COURT OF APPEALS, JACINTO MARIATEGUI, JULIAN MARIATEGUI and PAULINA MARIATEGUI, respondents. Montesa, Albon & Associates for petitioners. Parmenio B. Patacsil, Patacsil Twins Law Office for the heirs of the late Maria del Rosario Mariategui. Tinga, Fuentes & Tagle Firm for private respondents.
BIDIN, J.: This is a petition for review on certiorari of the decision * of the Court of Appeals dated December 24, 1980 in CA-G.R. No. 61841, entitled "Jacinto Mariategui, et al. v. Maria del Rosario Mariategui, et al.," reversing the judgment of the then Court of First Instance of Rizal, Branch VIII ** at Pasig, Metro Manila. The undisputed facts are as follows: Lupo Mariategui died without a will on June 26, 1953 (Brief for respondents, Rollo, pp. 116; 8). During his lifetime, Lupo Mariategui contracted three (3) marriages. With his first wife, Eusebia Montellano, who died on November 8, 1904, he begot four (4) children, namely: Baldomera, Maria del Rosario, Urbana and Ireneo. Baldomera died and was survived by her children named Antero, Rufina, Catalino, Maria, Gerardo, Virginia and Federico, all surnamed Espina. Ireneo also died and left a son named Ruperto. With his second wife, Flaviana Montellano, he begot a daughter named Cresenciana who was born on May 8, 1910 (Rollo, Annex "A", p. 36). Lupo Mariategui and Felipa Velasco (Lupo's third wife) got married sometime in 1930. They had three children, namely: Jacinto, born on July 3, 1929, Julian, born on February 16, 1931 and Paulina, born on April 19, 1938. Felipa Velasco Mariategui died in 1941 (Rollo, Ibid). At the time of his death, Lupo Mariategui left certain properties which he acquired when he was still unmarried (Brief for respondents, Rollo, pp. 116; 4). These properties are described in the complaint as Lots Nos. 163, 66, 1346 and 156 of the Muntinglupa Estate (Rollo, Annex "A", p. 39). On December 2, 1967, Lupo's descendants by his first and second marriages, namely, Maria del Rosario, Urbana, Ruperto, Cresencia, all surnamed Mariategui and Antero, Rufina, Catalino, Maria, Gerardo, Virginia and Federico, all surnamed Espina, executed a deed of extrajudicial partition whereby they adjudicated unto themselves Lot No. 163 of the Muntinglupa Estate. Thereafter, Lot No. 163 was the subject of a voluntary registration proceedings filed by the adjudicatees under Act No. 496, and the land registration court issued a decree ordering the registration of the lot. Thus, on April 1, 1971, OCT No. 8828 was issued in the name of the abovementioned heirs. Subsequently, the registered owners caused the subdivision of the said lot into Lots Nos. 163-A to 163-H, for which separate transfer certificates of title were issued to the respective parties (Rollo, ibid). On April 23, 1973, Lupo's children by his third marriage with Felipa Velasco (Jacinto, Julian and Paulina) filed with the lower court an amended complaint claiming that Lot No. 163 together with Lots Nos. 669, 1346 and 154 were owned by their common father, Lupo Mariategui, and that, with the adjudication of Lot No. 163 to their co-heirs, they (children of the third marriage) were deprived of their respective shares in the lots. Plaintiffs pray for partition of the estate of their deceased father and annulment of the deed of extrajudicial partition dated December 2, 1967 (Petition, Rollo, p. 10). Cresencia Mariategui Abas, Flaviana Mariategui Cabrera and Isabel Santos were impleaded in the complaint as unwilling defendants as they would not like to join the suit as plaintiffs although
they acknowledged the status and rights of the plaintiffs and agreed to the partition of the parcels of land as well as the accounting of their fruits (Ibid., Rollo, p. 8; Record on Appeal, p. 4). The defendants (now petitioners) filed an answer with counterclaim (Amended Record on Appeal, p. 13). Thereafter, they filed a motion to dismiss on the grounds of lack of cause of action and prescription. They specifically contended that the complaint was one for recognition of natural children. On August 14, 1974, the motion to dismiss was denied by the trial court, in an order the dispositive portion of which reads: It is therefore the opinion of the Court that Articles 278 and 285 of the Civil Code cited by counsel for the defendants are of erroneous application to this case. The motion to dismiss is therefore denied for lack of merit. SO ORDERED. (Ibid, p. 37). However, on February 16, 1977, the complaint as well as petitioners' counterclaim were dismissed by the trial court, in its decision stating thus: The plaintiffs' right to inherit depends upon the acknowledgment or recognition of their continuous enjoyment and possession of status of children of their supposed father. The evidence fails to sustain either premise, and it is clear that this action cannot be sustained. (Ibid, Rollo, pp. 67-68) The plaintiffs elevated the case to the Court of Appeals on the ground that the trial court committed an error ". . . in not finding that the parents of the appellants, Lupo Mariategui and Felipa Velasco (were) lawfully married, and in holding (that) they (appellants) are not legitimate children of their said parents, thereby divesting them of their inheritance . . . " (Rollo, pp. 14-15). On December 24, 1980, the Court of Appeals rendered a decision declaring all the children and descendants of Lupo Mariategui, including appellants Jacinto, Julian and Paulina (children of the third marriage) as entitled to equal shares in the estate of Lupo Mariategui; directing the adjudicatees in the extrajudicial partition of real properties who eventually acquired transfer certificates of title thereto, to execute deeds of reconveyance in favor, and for the shares, of Jacinto, Julian and Paulina provided rights of innocent third persons are not prejudiced otherwise the said adjudicatees shall reimburse the said heirs the fair market value of their shares; and directing all the parties to submit to the lower court a project of partition in the net estate of Lupo Mariategui after payment of taxes, other government charges and outstanding legal obligations. The defendants-appellees filed a motion for reconsideration of said decision but it was denied for lack of merit. Hence, this petition which was given due course by the court on December 7, 1981. The petitioners submit to the Court the following issues: (a) whether or not prescription barred private respondents' right to demand the partition of the estate of Lupo Mariategui, and (b) whether or not the private respondents, who belatedly filed the action for recognition, were able to prove their successional rights over said estate. The resolution of these issues hinges, however, on the resolution of the preliminary matter, i.e., the nature of the complaint filed by the private respondents. The complaint alleged, among other things, that "plaintiffs are the children of the deceased spouses Lupo Mariategui . . . and Felipa Velasco"; that "during his lifetime, Lupo Mariategui had repeatedly acknowledged and confirmed plaintiffs as his children and the latter, in turn, have continuously enjoyed such status since their birth"; and "on the basis of their relationship to the deceased Lupo Mariategui and in accordance with the law on intestate succession, plaintiffs are entitled to inherit shares in the foregoing estate (Record on Appeal, pp. 5 & 6). It prayed, among others, that plaintiffs be declared as children and heirs of Lupo Mariategui and adjudication in favor of plaintiffs their lawful shares in the estate of the decedent (Ibid, p. 10). A perusal of the entire allegations of the complaint, however, shows that the action is principally one of partition. The allegation with respect to the status of the private respondents was raised only collaterally to assert their rights in the estate of the deceased. Hence, the Court of Appeals correctly adopted the settled rule that the nature of an action filed in court is determined by the facts alleged in the complaint constituting the cause of action (Republic vs. Estenzo, 158 SCRA 282 [1988]). It has been held that, if the relief demanded is not the proper one which may be granted under the law, it does not characterize or determine the nature of plaintiffs' action, and the relief to which plaintiff is entitled based on the facts alleged by him in his
complaint, although it is not the relief demanded, is what determines the nature of the action (1 Moran, p. 127, 1979 ed., citing Baguioro vs. Barrios, et al., 77 Phil. 120). With respect to the legal basis of private respondents' demand for partition of the estate of Lupo Mariategui, the Court of Appeals aptly held that the private respondents are legitimate children of the deceased. Lupo Mariategui and Felipa Velasco were alleged to have been lawfully married in or about 1930. This fact is based on the declaration communicated by Lupo Mariategui to Jacinto who testified that "when (his) father was still living, he was able to mention to (him) that he and (his) mother were able to get married before a Justice of the Peace of Taguig, Rizal." The spouses deported themselves as husband and wife, and were known in the community to be such. Although no marriage certificate was introduced to this effect, no evidence was likewise offered to controvert these facts. Moreover, the mere fact that no record of the marriage exists does not invalidate the marriage, provided all requisites for its validity are present (People vs. Borromeo, 133 SCRA 106 [1984]). Under these circumstances, a marriage may be presumed to have taken place between Lupo and Felipa. The laws presume that a man and a woman, deporting themselves as husband and wife, have entered into a lawful contract of marriage; that a child born in lawful wedlock, there being no divorce, absolute or from bed and board is legitimate; and that things have happened according to the ordinary course of nature and the ordinary habits of life (Section 5 (z), (bb), (cc), Rule 131, Rules of Court; Corpus v. Corpus, 85 SCRA 567 [1978]; Saurnaba v. Workmen's Compensation, 85 SCRA 502 [1978]; Alavado v. City Gov't. of Tacloban, 139 SCRA 230 [1985]; Reyes v. Court of Appeals, 135 SCRA 439 [1985]). Courts look upon the presumption of marriage with great favor as it is founded on the following rationale: The basis of human society throughout the civilized world is that of marriage. Marriage in this jurisdiction is not only a civil contract, but it is a new relation, an institution in the maintenance of which the public is deeply interested. Consequently, every intendment of the law leans toward legalizing matrimony. Persons dwelling together in apparent matrimony are presumed, in the absence of any counterpresumption or evidence special to that case, to be in fact married. The reason is that such is the common order of society and if the parties were not what they thus hold themselves out as being, they would be living in the constant violation of decency and of law . . . (Adong vs. Cheong Seng Gee, 43 Phil. 43, 56 [1922] quoted in Alavado vs. City Government of Tacloban, 139 SCRA 230 [1985]). So much so that once a man and a woman have lived as husband and wife and such relationship is not denied nor contradicted, the presumption of their being married must be admitted as a fact (Alavado v. City Gov't. of Tacloban, supra). The Civil Code provides for the manner under which legitimate filiation may be proven. However, considering the effectivity of the Family Code of the Philippines, the case at bar must be decided under a new if not entirely dissimilar set of rules because the parties have been overtaken by events, to use the popular phrase (Uyguangco vs. Court of Appeals, G.R. No. 76873, October 26, 1989). Thus, under Title VI of the Family Code, there are only two classes of children legitimate and illegitimate. The fine distinctions among various types of illegitimate children have been eliminated (Castro vs. Court of Appeals, 173 SCRA 656 [1989]). Article 172 of the said Code provides that the filiation of legitimate children may be established by the record of birth appearing in the civil register or a final judgment or by the open and continuous possession of the status of a legitimate child. Evidence on record proves the legitimate filiation of the private respondents. Jacinto's birth certificate is a record of birth referred to in the said article. Again, no evidence which tends to disprove facts contained therein was adduced before the lower court. In the case of the two other private respondents, Julian and Paulina, they may not have presented in evidence any of the documents required by Article 172 but they continuously enjoyed the status of children of Lupo Mariategui in the same manner as their brother Jacinto. While the trial court found Jacinto's testimonies to be inconsequential and lacking in substance as to certain dates and names of relatives with whom their family resided, these are but minor details. The nagging fact is that for a considerable length of time and despite the death of Felipa in 1941, the private respondents and Lupo lived together until Lupo's death in 1953. It should be noted that even the trial court mentioned in its decision the admission made in the affidavit of Cresenciana Mariategui Abas, one of the
petitioners herein, that " . . . Jacinto, ama . . ." (Exh. M, Record on Appeal, pp. 65-66).
Julian
and
Paulina
Mariategui
ay
pawang
mga
kapatid
ko
sa
In view of the foregoing, there can be no other conclusion than that private respondents are legitimate children and heirs of Lupo Mariategui and therefore, the time limitation prescribed in Article 285 for filing an action for recognition is inapplicable to this case. Corollarily, prescription does not run against private respondents with respect to the filing of the action for partition so long as the heirs for whose benefit prescription is invoked, have not expressly or impliedly repudiated the CO-OWNERSHIP. In other words, prescription of an action for partition does not lie except when the CO-OWNERSHIP is properly repudiated by the co-owner (Del Banco vs. Intermediate Appellate Court, 156 SCRA 55 [1987] citing Jardin vs. Hollasco, 117 SCRA 532 [1982]). Otherwise stated, a co-owner cannot acquire by prescription the share of the other co-owners absent a clear repudiation of COOWNERSHIP duly communicated to the other co-owners (Mariano vs. De Vega, 148 SCRA 342 [1987]). Furthermore, an action to demand partition is imprescriptible and cannot be barred by laches (Del Banco vs. IAC, 156 SCRA 55 [1987]). On the other hand, 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 (Roque vs. IAC, 165 SCRA 118 [1988]). Petitioners contend that they have repudiated the CO-OWNERSHIP when they executed the extrajudicial partition excluding the private respondents and registered the properties in their own names (Petition, p. 16; Rollo, p. 20). However, no valid repudiation was made by petitioners to the prejudice of private respondents. Assuming petitioners' registration of the subject lot in 1971 was an act of repudiation of the CO-OWNERSHIP, prescription had not yet set in when private respondents filed in 1973 the present action for partition (Ceniza vs. C.A., 181 SCRA 552 [1990]). In their complaint, private respondents averred that in spite of their demands, petitioners, except the unwilling defendants in the lower court, failed and refused to acknowledge and convey their lawful shares in the estate of their father (Record on Appeal, p. 6). This allegation, though denied by the petitioners in their answer (Ibid,p. 14), was never successfully refuted by them. Put differently, in spite of petitioners' undisputed knowledge of their relationship to private respondents who are therefore their co-heirs, petitioners fraudulently withheld private respondent's share in the estate of Lupo Mariategui. According to respondent Jacinto, since 1962, he had been inquiring from petitioner Maria del Rosario about their (respondents) share in the property left by their deceased father and had been assured by the latter (Maria del Rosario) not to worry because they will get some shares. As a matter of fact, sometime in 1969, Jacinto constructed a house where he now resides on Lot No. 163 without any complaint from petitioners. Petitioners' registration of the properties in their names in 1971 did not operate as a valid repudiation of the CO-OWNERSHIP. In Adille vs. Court of Appeals (157 SCRA 455, 461-462 [1988]), the Court held: Prescription, as a mode of terminating a relation of CO-OWNERSHIP, must have been preceded by repudiation (of the CO-OWNERSHIP). The act of repudiation, in turn, is subject to certain conditions: (1) a co-owner repudiates the CO-OWNERSHIP; (2) such an act of repudiation is clearly made known to the other co-owners; (3) the evidence thereon is clear and conclusive; and (4) he has been in possession through open, continuous, exclusive, and notorious possession of the property for the period required by law. xxx xxx xxx It is true that registration under the Torrens system is constructive notice of title, but it has likewise been our holding that the Torrens title does not furnish shield for fraud. It is therefore no argument to say that the act of registration is equivalent to notice of repudiation, assuming there was one, notwithstanding the long-standing rule that registration operates as a universal notice of title. Inasmuch as petitioners registered the properties in their names in fraud of their co-heirs prescription can only be deemed to have commenced from the time private respondents discovered the petitioners' act of defraudation (Adille vs. Court of Appeals, supra). Hence, prescription definitely may not be invoked by petitioners because private respondents commenced the instant action barely two months after learning that petitioners had registered in their names the lots involved. WHEREFORE, the petition is DENIED and the assailed decision of the Court of Appeals dated December 24, 1980 is Affirmed. SO ORDERED.
CASE 5
THIRD DIVISION HEIRS OF FLORES RESTAR namely: ESMENIA R. RESTAR, BERNARDITA R. RENTINO, LUCIA RESTAR, RODOLFO RESTAR, JANET R. RELOJERO, LORNA R. RAMOS, MANUEL RESTAR, NENITA R. BELLEZA, MIRASOL R. DELA CRUZ, ROSELLE R. MATORRE, POLICARPIO RESTAR and ADOLFO RESTAR Petitioners, - versus HEIRS OF DOLORES R. CICHON, namely: RUDY R. CICHON, NORMA C. LACHICA, NILDA C. JUMAYAO, LYDIA C. SANTOS, and NELSON R. CICHON; HEIRS OF PERPETUA R. STA. MARIA, namely GEORGE STA. MARIA, LILIA M. MANIAGO, DERLY M. CONCEPCION, GERVY STA. MARIA, DORY M. INDULO; HEIRS OF MARIA R. ROSE, namely: TERESITA R. MALOCO, ROLANDO ROSE, EDELYN R. PALACIO and MINERVA R. PASTRANA, DOMINICA RESTARRELOJERO and PACIENCIA RESTAR MANARES, Respondents. G.R. No. 161720 Present: PANGANIBAN, J., Chairman, SANDOVAL-GUTIERREZ,* CORONA, CARPIO MORALES, and GARCIA, JJ.
Promulgated: ' November 22, 2005
xx- - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -xx DECISION
CARPIO MORALES, J.: In 1935, Emilio Restar (Restar) died intestate, leaving eight (8) children-compulsory heirs, namely: Flores Restar, Dolores RestarCichon, Perpetua Restar-Sta. Maria, Paciencia Restar-Manares, Dominica Restar-Relojero, Policarpio Restar, Maria Restar-Rose and Adolfo Restar. In 1960, Restar's eldest child, Flores, on the basis of a July 12, 1959 Joint Affidavit[1] he executed with one Helen Restar, caused the cancellation of Tax Declaration No. 6696[2] in Restar's name covering a 5,918[3] square meter parcel of land, Lot 3177 (the lot), located at Barangay Carugdog, Lezo, Aklan which was among the properties left by Restar, and the issuance of Tax Declaration No. 11134 in his name. Flores died on June 10, 1989. On November 5, 1998, the co-heirs of Flores discovered the cancellation of Restar's Tax Declaration No. 6696 and the issuance in lieu thereof of Tax Declaration No. 11134[4] in his name. On January 21, 1999, the heirs of Flores' sisters Dolores R. Cichon, Perpetua Sta. Maria, and Maria Rose who had in the meantime died, together with Flores' surviving sisters Dominica Restar-Relojero and Paciencia Restar-Manares, filed a Complaint[5] against Flores' heirs for 'partition [of the lot], declaration of nullity of documents, ownership with damages and preliminary injunction before the Regional Trial Court (RTC) of Aklan. Flores' brothers Policarpio and Adolfo were impleaded also as defendants, they being unwilling co-plaintiffs. The plaintiffs, herein respondents, alleged that, inter alia, during the lifetime of Flores, they were given their shares ofpalay from the lot and even after Flores death up to 1991; after Flores' death in 1989, his widow Esmenia appealed to them to allow her to hold on to the lot to finance the education of her children, to which they (the plaintiffs) agreed on the condition that after the children had
19
finished their education, it would be divided into eight (8) equal parts; and upon their demand for partition of the lot, the defendants Heirs of Flores refused, they claiming that they were the lawful owners thereof as they had inherited it from Flores. By Answer[6] filed February 23, 1999, the defendants-herein petitioners Heirs of Flores claimed that they had been in possession of the lot in the concept of owner for more than thirty (30) years and have been paying realty taxes since time immemorial. And they denied having shared with the plaintiffs the produce of the lot or that upon Flores' death in 1989, Esmenia requested the plaintiffs to allow her to hold on to it to finance her children's education, they contending that by 1977, the children had already finished their respective courses.[7] The defendants Heirs of Flores further claimed that after World War II and under the 'new Tax Declaration in 1945, Flores caused the transfer of parcels of ricelands situated in Carugdog, Lezo, Aklan to his siblings as their shares from the estate of their father Restar;[8] and an extra-judicial partition was subsequently executed on September 28, 1973 by Restar's heirs, which was notarized by one Atty. Jose Igtanloc, dividing and apportioning among themselves four (4) parcels of land. [9] The defendant Adolfo Restar, by separate Answer,[10] alleged that the complaint did not state a cause of action as against him for he interposed no objection to the partition of the lot among the heirs of Restar. As for the defendant Policarpio Restar, he in his Amended Answer[11] acknowledged Flores as the owner of the lot but claimed that a portion of it, 1,315 square meters, was sold to him as shown by a Deed of Absolute Sale dated May 14, 1981.[12] He thus prayed that, among other things, an order for the partition of the lot among Restar's heirs be issued excluding, however, that portion sold to him by Flores.[13] After trial, Branch 3 of the RTC of Kalibo, Aklan held that Flores' share in Restar's estate was not the lot but that covered by Cadastral Lot No. 3183. Nevertheless, the trial court, holding that Flores and his heirs had performed acts sufficient to constitute repudiation of the CO-OWNERSHIP, concluded that they had acquired the lot by prescription.[14] Respecting the defendant Policarpio's claim that a portion of the lot was sold to him, the trial court discredited the same upon noting that Flores' signature in the purported Deed of Sale differed from those appearing in other documents submitted by the parties; in 1981, when the said Deed of Sale was alleged to have been executed, Flores was admittedly paralyzed and bedridden and could not have written his name in a 'straight manner, as in fact his signature appearing in at least two documents dated 1980 was 'crooked, and there existed discrepancies in the spelling of Flores' wife's signature which read 'Esmea in the deed, and not as 'Esmenia.[15] The trial court thus dismissed the complaint by Decision of June 30, 1999.[16] 'On appeal by the defendants Heirs of Flores and Policarpio Restar, the appellate court, by Decision of October 29, 2002.[17] reversed the decision of the trial court, it finding that the defendants Heirs of Flores failed to prove that their possession of the lot excluded their co-owners or that they derived title to it from a separate conveyance to them by Restar. The appellate court further found that there was no adequate notice by Flores to his other co-heirs/co-owners of the repudiation of the CO-OWNERSHIP and neither was there a categorical assertion by the defendants of their exclusive right to the entire lot that barred the plaintiffs' claim of ownership.[18] And the appellate court found it credible for the plaintiffs to have failed to immediately take legal action to protect their rights on account of forbearance towards their eldest brother who had asked them to continue cultivating the lot to support his children's education.[19] Respecting the defendant Policarpio's claim that part of the lot had been sold to him by Flores, the appellate court sustained the trial court's rejection thereof. Accordingly, the appellate court disposed: WHEREFORE, in view of all the foregoing, the appeal is hereby GRANTED in so far as plaintiffs-appellants Heirs of Dolores Cichon, et al., are concerned and DENIED in so far as defendant-appellant Policarpio Restar. The decision of the Regional Trial Court of Kalibo, Aklan, Branch 3, dated June 30, 1999 is MODIFIED. The ruling of the said court that the heirs of Flores Restar have acquired ownership by adverse possession of the land in question, Cadastral Lot No. 6686, is hereby REVERSED. SO ORDERED. (Emphasis in the original)
The appellate court having denied reconsideration of its decision, only the defendants Heirs of Flores filed the present petition, assigning the following errors: A. THE COURT OF APPEALS PATENTLY ERRED IN REVERSING THE RULING OF THE LOWER COURT THAT THE PETITIONERS AS HEIRS OF FLORES RESTAR HAVE ACQUIRED OWNERSHIP BY ADVERSE POSSESSION OF THE LAND IN QUESTION. THE COURT OF APPEALS PATENTLY ERRED IN NOT RULING THAT THERE WAS ACQUISITIVE PRESCRIPTION ON THE LAND IN QUESTION NOTWITHSTANDING THAT THE LAND IN QUESTION HAS BEEN DECLARED IN THE NAME OF FLORES RESTAR, FATHER OF PETITIONERS, AS EARLY AS 1960 AND THAT PETITIONERS AND THEIR PREDECESSOR-IN-INTEREST HAVE BEEN IN OPEN, CONTINUOUS, EXCLUSIVE AND NOTORIOUS POSSESSION OF THE LAND IN QUESTION IN THE CONCEPT OF OWNER FOR MORE THAN THIRTY (30) YEARS.[20]
B.
The petition is impressed with merit. Article 494 of the New 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. xxx 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 to demand partition of a co-owned property does not prescribe, a co-owner may acquire ownership thereof by prescription[21] where there exists a clear repudiation of the CO-OWNERSHIP, and the co-owners are apprised of the claim of adverse and exclusive ownership.[22] Acquisitive prescription of dominion and other real rights may be ordinary or extraordinary. 'Ordinary acquisitive prescription requires possession of things in good faith and with just title for a period of ten years. Without good faith and just title, acquisitive prescription can only be extraordinary in character which requires uninterrupted adverse possession for thirty years. Thus, the New Civil Code provides: ART. 1117. Acquisitive prescription of dominion and other real rights may be ordinary or extraordinary. Ordinary acquisitive prescription requires possession of things in good faith and with just title for the time fixed by law. ART. 1134. Ownership and other real rights over immovable property are acquired by ordinary prescription through possession of ten years. ART. 1137. Ownership and other real rights over immovables also prescribe through uninterrupted adverse possession thereof for thirty years, without need of title or of good faith.
Resolving the main issue of whether petitioners acquired ownership over the lot by extraordinary prescription, the appellate court held in the negative. While this Court is not a trier of facts, if the inference drawn by the appellate court from the facts is manifestly mistaken, it may, in the interest of justice, review the evidence in order to arrive at the correct factual conclusions based on the record.[23]
21
Contrary to the findings of the appellate court, the records of the case amply support petitioners' claim that the requirements for extraordinary prescription had been duly met. When Restar died in 1935, his eight children became pro indiviso co-owners of the lot by intestate succession. Respondents never possessed the lot, however, much less asserted their claim thereto until January 21, 1999 when they filed the complaint for partition subject of the present petition. In contrast, Flores took possession of the lot after Restar's death and exercised acts of dominion thereon ' tilling and cultivating the land, introducing improvements, and enjoying the produce thereof. The statutory period of prescription, however, commenced not in 1935 but in 1960 when Flores, who had neither title nor good faith, secured a tax declaration in his name and may, therefore, be said to have adversely claimed ownership of the lot. And respondents were also deemed to have been on said date become aware of the adverse claim.[24] Flores' possession thus ripened into ownership through acquisitive prescription after the lapse of thirty years in accordance with the earlier quoted Article 1137 of the New Civil Code. The following observations of the trial court thus merit this Court's approval. The evidence proved that as far back as 1959, Flores Restar adjudicated unto himself the whole land in question as his share from his father by means of a joint affidavit which he executed with one Helen Restar, and he requested the Provincial Treasurer/Assessor to have the land declared in his name. It was admitted by the parties during the pre-trial that this affidavit was the basis of the transfer of Tax Declaration No. 6686 from Emilio Restar to Flores Restar. So that from 1960 the land was declared in the name of Flores Restar (Exhibit 10). This was the first concrete act of repudiation made by Flores of the CO-OWNERSHIP over the land in question. x x x Plaintiffs did not deny that aside from the verbal partition of one parcel of land in Carugdog, Lezo, Aklan way back in 1945, they also had an amicable partition of the lands of Emilio Restar in Cerrudo and Palale, Banga Aklan on September 28, 1973 (exhibit '20'). If they were able to demand the partition, why then did they not demand the inclusion of the land in question in order to settle once and for all the inheritance from their father Emilio Restar, considering that at that time all of the brothers and sisters, the eight heirs of Emilio Restar, were still alive and participated in the signing of the extra-judicial partition? Also it was admitted that Flores died only in 1989. Plaintiffs had all the chances (sic) to file a case against him from 1960, or a period of 29 years when he was still alive, yet they failed to do so. They filed the instant case only on January 22, 1999, almost ten (10) years after Flores' death. From the foregoing evidence, it can be seen that the adverse possession of Flores started in 1960, the time when the tax declaration was transferred in his name. The period of acquisitive prescription started to run from this date. Hence, the adverse possession of Flores Restar from 1960 vested in him exclusive ownership of the land considering the lapse of more than 38 years. Acquisitive prescription of ownership, laches and prescription of the action for partition should be considered in favor of Flores Restar and his heirs. [25] While tax declarations and receipts are not conclusive evidence of ownership and do not prove title to the land, nevertheless, when coupled with actual possession, they constitute evidence of great weight[26] and can be the basis of a claim of ownership through prescription.[27] As for respondents' claim that they have been receiving shares from the produce of the land, it was correctly discredited by the trial court. [P]laintiffs' claim that Flores Restar gave them five to eight gantas each as their shares in the produce cannot be sustained. A few gantas cannot be considered one-eight share of sixty (60) cavans of palay produced per cropping. One eight of sixty cavans would be at least six cavans, not merely gantas after excluding expenses for cultivation and production. If plaintiffs were to be believed, their whole 7/8 share of the produce would total two cavans, six gantas only at the usual rate of 25 gantas per cavan.[28]
22
Unless there are strong and impelling reasons to disturb the trial court's findings of facts which must, as a matter of judicial policy, be accorded with the highest respect, they must remain. Respondents have not, however, proffered any reason warranting the disturbance of the trial court's findings of facts. Indeed, the following acts of Flores show possession adverse to his co-heirs: the cancellation of the tax declaration certificate in the name of Restar and securing another in his name; the execution of a Joint Affidavit stating that he is the owner and possessor thereof to the exclusion of respondents; payment of real estate tax and irrigation fees without respondents having ever contributed any share therein; and continued enjoyment of the property and its produce to the exclusion of respondents. And Flores' adverse possession was continued by his heirs. The appellate court's crediting of respondents' justification for failing to immediately take legal action to protect their rights ' forbearance toward Flores and/or his wife who asked to be allowed to cultivate the land to support their children's education ' does not impress. For assuming such justification to be true, why did not any of respondents assail Flores' continuous possession after his children completed their college education in 1977? The trial court's finding and conclusion that Flores and his heirs had for more than 38 years possessed the land in open, adverse and continuous possession in the concept of owner which length of possession had never been questioned, rebutted or disputed by any of respondents, being thus duly supported by substantial evidence, he and his heirs have become owner of the lot by extraordinary prescription. It is unfortunate that respondents slept on their rights. Dura lex sed lex. WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals is REVERSED and SET ASIDE and the June 30, 1999 decision of the trial court is REINSTATED. No pronouncement as to costs. SO ORDERED.
23
CASE 6
Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. L-46296 September 24, 1991 EPITACIO DELIMA, PACLANO DELIMA, FIDEL DELIMA, VIRGILIO DELIMA, GALILEO DELIMA, JR., BIBIANO BACUS, OLIMPIO BACUS and PURIFICACION BACUS, Petitioners, vs. HON. COURT OF APPEALS, GALILEO 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. MEDIALDEA, J.: 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. 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: 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 (on-fourth); 3) Heirs of Eulalio Delima, namely Epitacio, Pagano, 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).
24
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 a 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 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. 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 coheirs, is under the same situation as a depository, a lessee or a trustee (Bargayo v. Camumot, 40 Phil, 857; Segura v. Segura, No. L29320, 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).
25
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 thecestui que trust amounting 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 COOWNERSHIP 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). 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 Ms 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 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, 1968, 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.
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CASE 7
Republic of the Philippines SUPREME COURT Manila FIRST DIVISION G.R. No. L-29320 September 19, 1988 FELIPE SEGURA, ANTONIA SEGURA, NICANORA SEGURA, BERNANDINA SEGURA, ALIPIO SEGURA and MONSERRAT SEGURA,plaintiffs-appellants, vs. NICOLAS SEGURA, SANTIAGO SEGURA, GAUDENCIO SEGURA, EMILIANO AMOJIDO, MILDRED ELISON VDA. DE JAVELOSA, ERNESTO AMOJIDO, EPIFANIA DE AMOJIDO, IGMEDIO AMOJIDO, and THE RURAL BANK OF SANTA BARBARA,defendantsappellees. CRUZ, J.: This is another distasteful case where kin is pitted against kin in a bitter dispute over property inherited from a common ancestor who probably would have been distressed to see her progeny quarreling over it as if they were hostile strangers. The land in question consists of 4,060 square meters and was originally registered under Original Certificate of Title No. 1994 in the 1 Registry of Deeds of Iloilo in the name of Gertrudes Zamora. She died intestate and without debts in 1936 and was survived by four children, who never got around to dividing the property among themselves. This controversy is not among the four brothers, who are now also deceased. It is Gertrudes's grandchildren by three of her sons (the fourth having died without issue) who are involved in this complaint for recovery of ownership and possession of the disputed inheritance, plus damages. The conflict began when on April 6, 1941, three of these nine grandchildren, namely, Nicolas, Santiago and Gaudencio Segura, executed a deed of extrajudicial partition arrogating the entire property to themselves alone as equal pro indiviso owners 2 (thereby, curiously, excluding Nicolas and Santiago's own brother and two sisters, and Gaudencio's own sister, besides the other two co-heirs.) This partition was not registered immediately, but only in 1946, or five years later. Before and after such registration, the following developments transpired: 1. The land was sold for P50.00 to Emiliano Amojido, with right to repurchase on or before February 15, 1942. This right was not exercised. 3 2. On November 28, 1946, Amojido executed an affidavit of consolidation of ownership and obtained TCT No. 28336, with a reservation of the rights of the other heirs annotated therein. 4 3. On March 31, 1953, Amojido sold the land for P1,500.00 to Mirope Mascareias vda. de Elison, who obtained TCT No. T-19396 in her name, which did not retain the annotation. 5 4. On May 28, 1956, the plaintiffs filed Civil Case No. 3941, for recovery of possession and ownership of the subject land from Nicolas, Santiago and Gaudencio Segura. 6 5. On February 14, 1957, Elison sold the land for P1,000.00 to Mildred Elison vda. de Javelosa, who obtained TCT No. 22074 in her name.7 6. On January l5, 1958, Mildred sold the land for P1,500.00 to Ernesto and Igmedio Amojido, who obtained TCT No 24342 in their names.8
7. On January 16,1958, Civil Case No. 3941 was dismissed on motion of the plaintiffs' counsel. 8. On July 23, 1961, the land was mortgaged to the Rural Bank of Sta. Barbara, which is one of the appellees herein. The complaint in the case at bar was filed on January 11, 1968, and docketed as Civil Case No. 7477 in the Court of First Instance of Iloilo. In it, the six excluded grandchildren alleged that the partition and all subse quent transfers of the subject land were null and void insofar as these transactions deprived them of their shares as co-owners of the said property. The defendants moved to dismiss, contending that the action was barred by prior judgment and that in any event whatever rights might have pertained to the plaintiffs had already prescribed under the Rules of Court and the Civil Code. The plaintiffs opposed the motion. Thereafter, issues 9 having been joined, the trial courts issued its order of March 28, 1968, dismissing the complaint on the ground of prescription. The motion for reconsideration was denied in an order dated May 28, 1968, on the further ground, as if it were an afterthought, of res judicata. The plaintiffs then appealed to this Court and now ask that the said orders be reversed and the complaint reinstated. We hold at the outset that the present action is not barred by prior judgment as the dismissal of the earlier complaint was without prejudice to its refiling at a future date. It appears that when Civil Case No. 3941 was called for hearing, the plaintiffs' counsel himself moved for its dismissal on the ground that his clients had gone to Mindanao and he did not know when they would be returning. 10 There is here no showing of failure to prosecute, such as an unreasonable delay on the part of the complainants, and the appellees have not so contended. It was clear that the plaintiffs' counsel had the intention of reviving the case, and that must have been the impression too of the trial judge because his order of dismissal did not state that it was with prejudice to the refiling of the case. 11 The applicable rule is Rule 17, Section 2, of the Rules of Court reading thus: Dismissal by order of the court.-Except as provided in the preceding section, an action shall not be dismissed at the plaintiffs instance save upon order of the court and upon such terms and conditions as the court deems proper. If a counterclaim has been pleaded by a defendant prior to the service upon him of the plaintiffs motion to dismiss, the action shall not be dismissed against the defendant's objection unless the counterclaim can remain pending for independent adjudication by the court. Unless otherwise specified in the order, a dismissal under this paragraph shall be without prejudice. It follows that even, if, as noted by the trial court in its Order of May 28, 1968, "the same case Civil Case No. 3941 of this Court. Exh. 'A' with the same subject matter, with the same plaintiffs, almost with the same defendants, and the same theory, was dismissed by this Court on January 16,1958," the present action is not barred by res judicata. The second ground is not as simple. The claim of prescription is based first on the contention that under the Rules of Court the deed of extrajudicial partition should have been impugned within two years from the date of its execution in 1941. As the challenge in the instant case was made only in 1956, when Civil Case No. 3941 was filed, that first case, and more so the case at bar which was commenced in 1968, should be and were properly dismissed for tardiness under Rule 74, Section 4, of the Rules of Court. This section provides in gist that a person who has been deprived of his lawful participation in the estate of the decedent, whether as heir or as creditor, must assert his claim within two years after the extrajudicial or summary settlement of such estate under Sections 1 and 2 respectively of the same Rule 74. Thereafter, he will be precluded from doing so as the right will have prescribed. It is clear that Section 1 of Rule 74 does not apply to the partition in question which was null and void as far as the plaintiffs were concerned. The rule covers only valid partitions. The partition in the present case was invalid because it excluded six of the nine heirs who were entitled to equal shares in the partitioned property. Under the rule, "no extrajudicial settlement shall be binding upon any person who has not participated therein or had no notice thereof." As the partition was a total nullity and did not affect the excluded heirs, it was not correct for the trial court to hold that their right to challenge the partition had prescribed after two years from its execution in 1941. The appellees invoke a second basis for their claim of prescription and argue that even under the Civil Code the complaint should also be deemed prescribed pursuant to the following provisions: Art. 1134. Ownership and other real rights over immovable property are acquired by ordinary prescription through possession of ten years (1957a).
Art. 1144. The following actions must be brought within ten years from the time the right of action accrues: (1) Upon a written contract; (2) Upon an obligation created by law; (3) Upon a judgment. It is recalled that following the execution of the deed of partition, the owners named therein sold the entire land to Emiliano Amojido who, after the vendors had failed to exercise their right of repurchase, executed an affidavit of consolidation in his favor on November 28, 1946. He subsequently obtained a transfer certificate of title in his name, but this contained the following annotation: This land is subject to any claim that may be presented by any heir or any other person deprived of his lawful participation in the estate of Gertrudes Zamora, within two years from date of the Extra-judicial Settlement and distribution of the estate. 12 As a person can sell only what he owns or is authorized to sell, the buyer can as a consequence acquire no more than what the seller can legally transfer. The deed of partition being invalid as to the other heirs, the vendors could dispose only of their respective shares in the land, or one-third only of the property and not the other two-thirds as well which did not belong to them. Article 493 of the Civil Code reads as follows: Each co-owner shall have the full ownership of his part and 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. Applying this provision, we have held in previous cases: When a real property belongs pro indiviso to three persons, who acquired it by inheritance from a common ancestor, the action for recovery by the legal representative of one of the heirs can only concern one-third of the property; and if the other co-owners have, by sale to third person, disposed of one-third of the said pro indiviso property, the plaintiff who sues for recovery is not entitled to ask for the annulment of the sale, inasmuch as the latter merely exercised their rights; such alienation does not affect the rights of the heir who claims only one-third, which belongs to the other two co-owners whose rights must be respected by the plaintiff. 13 Every co-heir has the absolute ownership of his share in the community property and may alienate, assign or mortgage the same, except as to purely personal rights, but the effect of any such transfer is limited to the portion which may be awarded to him upon the partition of the property. 14 None of the other co-heirs who did not participate in the sale can demand the nullification of the same, inasmuch as every co-owner may alienate, transfer, or mortgage his share in the common thing, and even substitute another person in the enjoyment thereof, unless personal rights are in question; although the effect of the alienation or mortgage, in relation to the co-owners shall be limited 15 to the portion that may be adjudicated to him when the community ceased. To repeat, the general rule is that no one can give what he does not have - nemo dat quod non habet. Hence, even if it be assumed that Amojido had bought the land in good faith from the parties to the extrajudicial partition, only so much of their share could be validly acquired by him, with the rest of the property remaining under the ownership of the six excluded co-heirs In other words, Amojido became pro indiviso co-owner of the land with the other six heirs, who retained title to their respective shares although he had possession of the entire property. The portion pertaining to the herein appellants should be deemed held by Amojido under an implied trust for their benefit, conformably to the ruling in Bargayo v. Camumot, 16 thus: In law it is understood that the co-owners 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.
There is no question that an action for reconveyance of property held in implied trust is imprescriptible. 17 However, this is true only as long as the trustee continues to acknowledge the title of the cestui que trust, or, otherwise stated, provided he does not repudiate such title." 18 The moment he does so, the prescriptive period will begin to run and may eventually operate to divest the real owners of their right to the property after the lapse of the applicable statutory period. Under the provision above-quoted, that period is fixed at ten years, whether the claim be based upon an obligation created by law under Article 1144 or covered by Article 1134 on rights over immovable property. When did such prescriptive period start in the case at bar? It is noted that when Amojido secured the registration of the land in his name following the deed of sale executed in his favor by the parties to the extrajudicial partition, his certificate of title carried an express reservation of whatever rights might pertain to the other heirs. This annotation constituted an acknowledgement of the possibility that a portion of the land might not belong to him and the commitment that he would be holding such part as impliedly conveyed to him in trust by and for its true owners. However, when Amojido himself sold the land to Mirope Mascareas vda. de Elison on March 13, 1953, the transfer certificate of title issued in her name no longer carried the said encumbrance. By the deletion of this annotation, Mirope, as the new transferee, repudiated as of the date of registration the claim of the other heirs to their shares in the property. From then on her assertion of ownership over the whole land became adverse even as against the appellants herein. And as the certificate of title was notice to the whole world of her exclusive title to the land, such rejection was binding on the said heirs and started as against them the period of prescription. The record does not show when TCT No. T-19396 in the name of Mirope Mascareas vda. de Elison was issued, but it can be conjectured that this was done before February 14, 1957, when she sold the land to Mildred Elison vda. de Javelosa. On the assumption that the land was registered in the name of Mirope in 1953 following her purchase without acknowledgement of the coheirs' rights, the 10-year prescriptive period would have started from that year. Suspended on May 28, 1956, when the first complaint was filed, it began running again on February 16, 1958, 30 days after it was dismissed, and was completed after seven more years in 1965, two years before the second complaint was filed in 1968. Hence, that complaint was barred by prescription, as correctly held by the trial court, although the different starting point it used, erroneously, was 1941, date of the extrajudicial partition. The unavoidable consequence of all this is that whatever claims the co-heirs could have validly asserted before can no longer be invoked by them at this time. They have let the time inexorably pass while they were slumbering on their rights, and now it is too late. WHEREFORE, the appeal is DISMISSED, with costs against the appellants. It is so ordered.
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CASE 8
FIRST DIVISION [G.R. No. 125233. March 9, 2000] Spouses ALEXANDER CRUZ and ADELAIDA CRUZ, Petitioners, vs. ELEUTERIO LEIS, RAYMUNDO LEIS, ANASTACIO L. LAGDANO, LORETA L. CAYONDA and the HONORABLE COURT OF APPEALS, Respondents. Lexj uris DECISION KAPUNAN, J.: Private respondents, the heirs of spouses Adriano Leis and Gertrudes Isidro, 1 filed an action before the Regional Trial Court (RTC) of Pasig seeking the nullification of the contracts of sale over a lot executed by Gertrudes Isidro in favor of petitioner Alexander Cruz, as well as the title subsequently issued in the name of the latter. Private respondents claimed that the contracts were vitiated by fraud as Gertrudes was illiterate and already 80 years old at the time of the execution of the contracts; that the price for the land was insufficient as it was sold only for P39,083.00 when the fair market value of the lot should be P1,000.00 per square meter, instead of P390.00, more or less; and that the property subject of the sale was conjugal and, consequently, its sale without the knowledge and consent of private respondents was in derogation of their rights as heirs. The facts that gave rise to the complaint: Juri smis Adriano and Gertrudes were married on 19 April 1923. On 27 April 1955, Gertrudes acquired from the then Department of Agriculture and Natural Resources (DANR) a parcel of land with an area of one hundred (100) square meters, situated at Bo. Sto. Nio, Marikina, Rizal and covered by Transfer Certificate of Title (TCT) No. 42245. The Deed of Sale described Gertrudes as a widow. On 2 March 1956, TCT No. 43100 was issued in the name of "Gertrudes Isidro," who was also referred to therein as a "widow." On 2 December 1973, Adriano died. It does not appear that he executed a will before his death. On 5 February 1985, Gertrudes obtained a loan from petitioners, the spouses Alexander and Adelaida Cruz, in the amount of P15,000.00 at 5% interest, payable on or before 5 February 1986. The loan was secured by a mortgage over the property covered by TCT No. 43100. Gertrudes, however, failed to pay the loan on the due date. Unable to pay her outstanding obligation after the debt became due and payable, on 11 March 1986, Gertrudes executed two contracts in favor of petitioner Alexander Cruz. The first is denominated as "Kasunduan," which the parties concede is a pacto de retro sale, granting Gertrudes one year within which to repurchase the property. The second is a "Kasunduan ng Tuwirang Bilihan," a Deed of Absolute Sale covering the same property for the price of P39,083.00, the same amount stipulated in the "Kasunduan." Jjj uris For failure of Gertrudes to repurchase the property, ownership thereof was consolidated in the name of Alexander Cruz in whose name TCT No. 130584 was issued on 21 April 1987, canceling TCT No. 43100 in the name of Gertrudes Isidro. On 9 June 1987, Gertrudes Isidro died. Thereafter, her heirs, herein private respondents, received demands to vacate the premises from petitioners, the new owners of the property. Private respondents responded by filing a complaint as mentioned at the outset. On the basis of the foregoing facts, the RTC rendered a decision in favor of private respondents. The RTC held that the land was conjugal property since the evidence presented by private respondents disclosed that the same was acquired during the marriage of the spouses and that Adriano contributed money for the purchase of the property. Thus, the court concluded, Gertrudes could only sell to petitioner spouses her one-half share in the property. The trial court also ruled that no fraud attended the execution of the contracts. Nevertheless, the "Kasunduan," providing for a sale conpacto de retro, had superseded the "Kasunduan ng Tuwirang Bilihan," the deed of absolute sale. The trial court did not consider the pacto de retro sale an equitable mortgage, despite the allegedly insufficient price. Nonetheless, the trial court found for
private respondents. It rationalized that petitioners failed to comply with the provisions of Article 1607 of the Civil Code requiring a judicial order for the consolidation of the ownership in the vendee a retro to be recorded in the Registry of Property. The dispositive portion of the RTC's Decision reads: lex WHEREFORE, in the light of all the foregoing, judgment is hereby rendered: 1. Declaring Exhibit G "Kasunduan ng Tuwirang Bilihan" Null and Void and declar[ing] that the title issued pursuant thereto is likewise Null and Void; 2. Declaring the property in litigation as conjugal property; 3. Ordering the Registry of Deeds of Marikina Branch to reinstate the title of Gertrudes Isidro; 4. Ordering the plaintiff[s] [sic] to comply with the provision[s] of Article 1607 in relation to Article 1616 of the Civil Code; 5. Ordering the defendant[s] to pay plaintiff[s] P15,000.00 nominal damages for the violation of plaintiffs rights; 6. Ordering the defendant[s] to pay plaintiff[s] the sum of P8,000.00 as and for attorneys fees; 7. Dismissing defendant[s'] counterclaim; and 8. Ordering defendant[s] to pay the cost of suit. Jksm SO ORDERED.
2
Petitioners appealed to the Court of Appeals in vain. The Court of Appeals affirmed the decision of the Regional Trial Court, holding that since the property was acquired during the marriage of Gertrudes to Adriano, the same was presumed to be conjugal property under Article 160 of the Civil Code. The appellate court, like the trial court, also noted that petitioner did not comply with the provisions of Article 1607 of the Civil Code. Petitioners are now before this Court seeking the reversal of the decision of the Court of Appeals. First, they contend that the subject property is not conjugal but is owned exclusively by Gertrudes, who was described in the Deed of Sale between Gertrudes and the DANR as well as in TCT No. 43100 as a widow. Second, assuming the land was conjugal property, petitioners argue that the same became Gertrudes exclusively when, in 1979, she mortgaged the property to the Daily Savings Bank and Loan Association. The bank later foreclosed on the mortgage in 1981 but Gertrudes redeemed the same in 1983. Chief The paraphernal or conjugal nature of the property is not determinative of the ownership of the disputed property. If the property was paraphernal as contended by petitioners, Gertrudes Isidro would have the absolute right to dispose of the same, and absolute title and ownership was vested in petitioners upon the failure of Gertrudes to redeem the property. On the other hand, if the property was conjugal, as private respondents maintain, upon the death of Adriano Leis, the conjugal partnership was terminated,3 entitling Gertrudes to one-half of the property.4 Adrianos rights to the other half, in turn, were transmitted upon his death to his heirs,5 which includes his widow Gertrudes, who is entitled to the same share as that of each of the legitimate children.6 Thus, as a result of the death of Adriano, a regime of CO-OWNERSHIP arose between Gertrudes and the other heirs in relation to the property. Incidentally, there is no merit in petitioners contention that Gertrudes redemption of the property from the Daily Savings Bank vested in her ownership over the same to the exclusion of her co-owners. We dismissed the same argument by one of the petitioners in Paulmitan vs. Court of Appeals,7 where one of the petitioners therein claimed ownership of the entire property subject of the case by virtue of her redemption thereof after the same was forfeited in favor of the provincial government for non-payment of taxes. We held, however, that the redemption of the land "did not terminate the CO-OWNERSHIP nor give her title to the entire land subject of the CO-OWNERSHIP." We expounded, quoting our pronouncement in Adille vs. Court of Appeals:8
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The petition raises a purely legal issue: May a co-owner acquire exclusive ownership over the property held in common?Esmsc Essentially, it is the petitioners contention that the property subject of dispute devolved upon him upon the failure of his co-heirs to join him in its redemption within the period required by law. He relies on the provisions of Article 1515 of the old Civil Code, Article 1613 of the present Code, giving the vendee a retro the right to demand redemption of the entire property. There is no merit in this petition. The right of repurchase may be exercised by a co-owner with respect to his share alone (CIVL CODE, art. 1612; CIVIL CODE (1889), art. 1514.). While the records show that petitioner redeemed the property in its entirety, shouldering the expenses therefor, that did not make him the owner of all of it. In other words, it did not put to end the existing state of CO-OWNERSHIP (Supra, Art. 489). There is no doubt that redemption of property entails a necessary expense. Under the Civil Code: Esmmis Art. 488. Each co-owner shall have a right to compel the other co-owners to contribute to the expenses of preservation of the thing or right owned in common and to the taxes. Any one of the latter may exempt himself from this obligation by renouncing so much of his undivided interest as may be equivalent to his share of the expenses and taxes. No such waiver shall be made if it is prejudicial to the CO-OWNERSHIP. The result is that the property remains to be in a condition of CO-OWNERSHIP. While a vendee a retro, under Article 1613 of the Code, "may not be compelled to consent to a partial redemption," the redemption by one coheir or co-owner of the property in its totality does not vest in him ownership over it. Failure on the part of all the co-owners to redeem it entitles the vendee a retro to retain the property and consolidate title thereto in his name (Supra, art. 1607). But the provision does not give to the redeeming co-owner the right to the entire property. It does not provide for a mode of terminating a CO-OWNERSHIP. It is conceded that, as a rule, a co-owner such as Gertrudes could only dispose of her share in the property owned in common. Article 493 of the Civil Code provides: ART. 493. Each co-owner shall have the full ownership of his part of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the COOWNERSHIP. Es-mso Unfortunately for private respondents, however, the property was registered in TCT No. 43100 solely in the name of "Gertrudes Isidro, widow." Where a parcel of land, forming part of the undistributed properties of the dissolved conjugal partnership of gains, is sold by a widow to a purchaser who merely relied on the face of the certificate of title thereto, issued solely in the name of the widow, the purchaser acquires a valid title to the land even as against the heirs of the deceased spouse. The rationale for this rule is that "a person dealing with registered land is not required to go behind the register to determine the condition of the property. He is only charged with notice of the burdens on the property which are noted on the face of the register or the certificate of title. To require him to do more is to defeat one of the primary objects of the Torrens system."9 As gleaned from the foregoing discussion, despite the Court of Appeals finding and conclusion that Gertrudes as well as private respondents failed to repurchase the property within the period stipulated and has lost all their rights to it, it still ruled against petitioners by affirming the Regional Trial Court's decision on the premise that there was no compliance with Article 1607 of the Civil Code requiring a judicial hearing before registration of the property in the name of petitioners. This provision states: Ms-esm ART. 1607. In case of real property, the consolidation of ownership in the vendee by virtue of the failure of the vendor to comply with the provisions of article 1616 shall not be recorded in the Registry of Property without a judicial order, after the vendor has been duly heard.
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The aforequoted article is intended to minimize the evils which the pacto de retro sale has caused in the hands of usurers. A judicial order is necessary in order to determine the true nature of the transaction and to prevent the interposition of buyers in good faith while the determination is being made.10E-xsm It bears stressing that notwithstanding Article 1607, the recording in the Registry of Property of the consolidation of ownership of the vendee is not a condition sine qua non to the transfer of ownership. Petitioners are the owners of the subject property since neither Gertrudes nor her co-owners redeemed the same within the one-year period stipulated in the "Kasunduan." The essence of a pacto de retro sale is that title and ownership of the property sold are immediately vested in the vendee a retro, subject to the resolutory condition of repurchase by the vendor a retro within the stipulated period. Failure thus of the vendor a retro to perform said resolutory condition vests upon the vendee by operation of law absolute title and ownership over the property sold. As title is already vested in the vendee a retro, his failure to consolidate his title under Article 1607 of the Civil Code does not impair such title or ownership for the method prescribed thereunder is merely for the purpose of registering the consolidated title. 11 WHEREFORE , the decision of the Court of Appeals is MODIFIED in that the petitioners are deemed owners of the property by reason of the failure of the vendor, Gertrudes Isidro, to repurchase the same within the period stipulated. However, Transfer Certificate of Title No. 130584, in the name of Alexander M. Cruz, which was issued without judicial order, is hereby ordered CANCELLED, and Transfer Certificate of Title No. 43100 in the name of Gertrudes Isidro is ordered REINSTATED, without prejudice to compliance by petitioners with the provisions of Article 1607 of the Civil Code. SO ORDERED.
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Philippine Supreme Court Case on Co-Ownership Rights

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Philippine Supreme Court Case on Co-Ownership Rights

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CASE 1

Property Volume 4 (Co-ownership)

Bachelor of Laws II-A

Property Volume 4 (Co-ownership)

Bachelor of Laws II-A

Property Volume 4 (Co-ownership)

Bachelor of Laws II-A

Property Volume 4 (Co-ownership)

Bachelor of Laws II-A

Promulgated: ' November 22, 2005

xx- - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -xx DECISION

Property Volume 4 (Co-ownership)

Bachelor of Laws II-A

Property Volume 4 (Co-ownership)

Bachelor of Laws II-A

Property Volume 4 (Co-ownership)

Bachelor of Laws II-A

Property Volume 4 (Co-ownership)

Bachelor of Laws II-A

Property Volume 4 (Co-ownership)

Bachelor of Laws II-A

Property Volume 4 (Co-ownership)

Bachelor of Laws II-A

Property Volume 4 (Co-ownership)

Bachelor of Laws II-A

Property Volume 4 (Co-ownership)

Bachelor of Laws II-A

Property Volume 4 (Co-ownership)

Bachelor of Laws II-A

Property Volume 4 (Co-ownership)

Bachelor of Laws II-A

Property Volume 4 (Co-ownership)

Bachelor of Laws II-A

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