Prop Digests.docx 3v123p

1. GR NO. 182839, JUNE 02, 2014 PNB VS. JOSE GARCIA ET. AL. DIGEST Facts: Jose Sr., without the knowledge and consent of his children executed SPAs authorizing spouses Garcia to convey a property covered with TCT No. T-44422 to secure a loan from PNB by way of mortgage and an Amendment of Real Estate Mortgage in favor of PNB which were inscribed in the title. The respondents filed a Complaint for Nullity of the said Amendment against spouses Garcia and PNB alleging that the property was conjugal, being acquired during the marriage of Jose Sr. to Ligaya and they became owners pro indivisio upon the death of Ligaya on 1987. PNB contends that the subject property was ed to Jose Sr. alone, and who was described in the as a “widower. During the proceedings, Nora, Jose Jr, Bobby and Jimmy executed an SPA dated May 31, 1996 authorizing Jose Sr. to act attorney-in-fact during the pretrial of the case.

Issue: Whether the subject property was a conjugal or was acquired during marriage or thereafter. Ruling: Yes. Article 119 of the Civil Code in line with Article 160 applies. All properties acquired during marriage are conjugal and the registration of it in the name of one spouse does not destroy the presumption that it is conjugal. What is material is the time when the property was acquired. The conjugal partnership was converted into an implied ordinary coownership upon the death of Ligaya thus governed by Article 493 of Civil Code.

The effect of the mortgage with respect to the co-owners shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. Thus, Jose Sr. cannot mortgage the entire property.

2.

REPUBLIC VS. HEIRS OF FRANCISCA DIGNOS-SORONO

REPUBLIC VS. HEIRS OF FRANCISCA DIGNOS-SORONO G.R. No. 171571 March 24, 2008

FACTS: 2 were adjudicated by the then Court of First Instance of Cebu in favor of the following in four equal shares: a) Francisca Dignos, married to Blas Sorono

¼ share in

the two lots; b) Tito Dignos ¼ share in the two lots; c) predecessors-in-interest of the respondents

¼ share in

the two lots; and d) predecessors-in-interest of the respondents

¼ share in

the two lots

It appears that the two lots were not partitioned by the adjudicatees. It appears further that the heirs of Tito Dignos, who was awarded ¼ share in the two lots, sold the entire two lots to the then Civil Aeronautics istration (CAA) via a public instrument entitled ”Extrajudicial Settlement and Sale” without the knowledge of respondents whose predecessors-in-interest were the adjudicatees of the rest of the ¾ portion of the two lots.

In 1996, CAAs successor-in-interest, the Mactan Cebu International Airport Authority (MCIAA), erected a security fence one of the lot and relocated a number of families, who had built their dwellings within the airport perimeter, to a portion of said lot to enhance airport security. MCIAA later caused the issuance in its name of a Tax Declarations of the 2 lots. Respondents soon asked the agents of MCIAA to cease giving third persons permission to occupy the lots but the same was ignored. Respondents thereupon filed a Complaint for Quieting of Title, Legal Redemption with Prayer for a Writ of Preliminary Injunction against MCIAA before the RTC of Lapu-lapu City. Respondents further alleged that neither they nor their predecessors-in-interests sold, alienated or disposed of their shares in the lots of which they have been in continuous peaceful possession. Respondents furthermore alleged that neither petitioner nor its predecessor-in-interest had given them any written notice of its acquisition of the ¼ share of Tito Dignos.

The Republic, represented by the MCIAA in its Answer with Counterclaim, maintained that from the time the lots were sold to its predecessor-in-interest CAA, it has been in open, continuous, exclusive, and notorious possession thereof; through acquisitive prescription, it had acquired valid title to the lots since it was a purchaser in good faith and for value; and assuming arguendo that it did not have just title, it had, by possession for over 30 years, acquired ownership thereof by extraordinary prescription. At all events, petitioner contended that respondents action was barred by estoppel and laches.

The trial court found for respondents. the CA affirmed the trial court’s decision. Hence, the present petition for review on certiorari ISSUE: 1. WON the sale of the entire 2 lots by the heirs of Tito binding to the respondents

2. WON estoppel and laches should work against respondents HELD: the petition is denied

1. NO. Article 493 of the Civil Code provides:

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

Apropos is the following pertinent portion of this Courts decision in Bailon-Casilao v. CA:

As early as 1923, this Court has ruled that even if a co-owner sells the whole property as his, the sale will affect only his own share but not those of the other co-owners who did not consent to thesale.This is because under the aforementioned codal provision, the sale or other disposition affects only his undivided share and the transferee gets only what would correspond to his grantor in the partition of the thing owned in common.

From the foregoing, it may be deduced that since a co-owner is entitled to sell his undivided share, a sale of the entire property by one co-owner without the consent of the other co-owners is NOT null and void. However, only the rights of the co-owner-seller are transferred, thereby making the buyer a co-owner of the property.

Petitioners predecessor-in-interest CAA thus acquired only the rights pertaining to the sellers-heirs of Tito Dignos, which is only ¼ undivided share of the two lots.

2. NO. ed lands cannot be the subject of acquisitive prescription. Petitioners’ insistence that it acquired the property through acquisitive prescription, if not ordinary, then extraordinary, does not lie. It bears emphasis at this juncture that in the Extrajudicial Settlement and Sale forged by CAA and Tito Dignos heirs the following material portions thereof validate the claim of respondents that the two lots were ed: x x x x

1.

That since the OCT of Title of the abovementioned property/ies has/have been lost and/or destroyed… and the VENDEE hereby binds itself to reconstitute said title/s at its own expense and that the HEIRS-VENDORS, their heirs, successors and assigns bind themselves to help in the reconstitution of title so that the said lot/s may be ed in the name of the VENDEE in accordance with law x x x x

NOTES: As for petitioners argument that the redemption price should be ¼ of the prevailing market value, not of the actual purchase price, since, so it claims, (1) the respondents received just compensation for the property at the time it was purchased by the Government; and, (2) the property, due to improvements introduced by petitioner in its vicinity, is now worth several hundreds of millions of pesos, the law is not on its side.

Thus, Article 1088 of the Civil Code provides:

Should any of the heirs sell his hereditary rights to a stranger before the partition, any or all of the co-heirs may be subrogated to the rights of the purchaser by reimbursing him for the price of the sale, provided they do so within the period of one month from the time they were notified in writing of the sale by the vendor. The Court may take judicial notice of the increase in value of the lots.

As mentioned earlier, however, the heirs of Tito Dignos did not notify respondents about the sale. At any rate, since the Extrajudicial Settlement and Sale stipulates, thus:

That the HEIRS-VENDORS, their heirs, assigns and successors, undertake andagree to warrant and defend the possession and ownership of the property/ies herein sold against any and all just claims of all persons whomsoever and should the VENDEE be disturbed in its possession, to prosecute and defend the same in the Courts of Justice.

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

3.

Metropolitan Bank vs Pascual Republic of the Philippines SUPREME COURT Manila SECOND DIVISION

G.R. No. 163744

February 29, 2008

METROPOLITAN BANK AND TRUST CO., petitioner, vs. NICHOLSON PASCUAL a.k.a. NELSON PASCUAL, respondent. DECISION VELASCO, JR., J.: Respondent Nicholson Pascual and Florencia Nevalga were married on January 19, 1985. During the union, Florencia bought from spouses Clarito and Belen Sering a 250-square meter lot with a three-door apartment standing thereon located in Makati City. Subsequently, Transfer Certificate of Title (TCT) No. S-101473/T-510 covering the purchased lot was canceled and, in lieu thereof, TCT No. 1562831 of the Registry of Deeds of Makati City was issued in the name of Florencia, "married to Nelson Pascual" a.k.a. Nicholson Pascual. In 1994, Florencia filed a suit for the declaration of nullity of marriage under Article 36 of the Family Code, docketed as Civil Case No. Q-95-23533. After trial, the Regional Trial Court (RTC), Branch 94 in Quezon City rendered, on July 31, 1995, a Decision, 2 declaring the marriage of Nicholson and Florencia null and void on the ground of psychological incapacity on the part of Nicholson. In the same decision, the RTC, inter alia, ordered the dissolution and liquidation of the ex-spouses’ conjugal partnership of gains. Subsequent events saw the couple going their separate ways without liquidating their conjugal partnership. On April 30, 1997, Florencia, together with spouses Norberto and Elvira Oliveros, obtained a PhP 58 million loan from petitioner Metropolitan Bank and Trust Co. (Metrobank). To secure the obligation, Florencia and the spouses Oliveros executed several real estate mortgages (REMs) on their properties, including one involving the lot covered by TCT No. 156283. Among the documents Florencia submitted to procure the loan were a copy of TCT No. 156283, a photocopy of the marriage-nullifying RTC decision, and a document denominated as "Waiver" that Nicholson purportedly executed on April 9, 1995. The waiver, made in favor of Florencia, covered the conjugal properties of the ex-spouses listed therein, but did not incidentally include the lot in question. Due to the failure of Florencia and the spouses Oliveros to pay their loan obligation when it fell due, Metrobank, on November 29, 1999, initiated foreclosure proceedings under Act No. 3135, as amended, before the Office of the Notary Public of Makati City. Subsequently, Metrobank caused the publication of the notice of sale on three issues of Remate.3 At the auction sale on January 21, 2000, Metrobank emerged as the highest bidder. Getting wind of the foreclosure proceedings, Nicholson filed on June 28, 2000, before the RTC in Makati City, a Complaint to declare the nullity of the mortgage of the disputed property, docketed as

Civil Case No. 00-789 and eventually raffled to Branch 65 of the court. In it, Nicholson alleged that the property, which is still conjugal property, was mortgaged without his consent. Metrobank, in its Answer with Counterclaim and Cross-Claim,4 alleged that the disputed lot, being ed in Florencia’s name, was paraphernal. Metrobank also asserted having approved the mortgage in good faith. Florencia did not file an answer within the reglementary period and, hence, was subsequently declared in default. The RTC Declared the REM Invalid After trial on the merits, the RTC rendered, on September 24, 2001, judgment finding for Nicholson. The falloreads: PREMISES CONSIDERED, the Court renders judgment declaring the real estate mortgage on the property covered by [TCT] No. 156283 of the Registry of Deeds for the City of Makati as well as all proceedings thereon null and void. The Court further orders defendants [Metrobank and Florencia] tly and severally to pay plaintiff [Nicholson]: 1. PhP100,000.00 by way of moral damages; 2. PhP75,000.00 by way of attorney’s fees; and 3. The costs. SO ORDERED.5 Even as it declared the invalidity of the mortgage, the trial court found the said lot to be conjugal, the same having been acquired during the existence of the marriage of Nicholson and Florencia. In so ruling, the RTC invoked Art. 116 of the Family Code, providing that "all property acquired during the marriage, whether the acquisition appears to have been made, contracted or ed in the name of one or both spouses, is presumed to be conjugal unless the contrary is proved." To the trial court, Metrobank had not overcome the presumptive conjugal nature of the lot. And being conjugal, the RTC concluded that the disputed property may not be validly encumbered by Florencia without Nicholson’s consent. The RTC also found the deed of waiver Florencia submitted to Metrobank to be fatally defective. For let alone the fact that Nicholson denied executing the same and that the signature of the notarizing officer was a forgery, the waiver document was allegedly executed on April 9, 1995 or a little over three months before the issuance of the RTC decision declaring the nullity of marriage between Nicholson and Florencia. The trial court also declared Metrobank as a mortgagee in bad faith on of negligence, stating the observation that certain data appeared in the ing contract documents, which, if properly scrutinized, would have put the bank on guard against approving the mortgage. Among the data referred to was the date of execution of the deed of waiver. The RTC dismissed Metrobank’s counterclaim and cross-claim against the ex-spouses.

Metrobank’s motion for reconsideration was denied. Undeterred, Metrobank appealed to the Court of Appeals (CA), the appeal docketed as CA-G.R. CV No. 74874. The CA Affirmed with Modification the RTC’s Decision On January 28, 2004, the CA rendered a Decision affirmatory of that of the RTC, except for the award therein of moral damages and attorney’s fees which the CA ordered deleted. The dispositive portion of the CA’s Decision reads: WHEREFORE, premises considered, the appealed decision is hereby AFFIRMED WITH MODIFICATION with respect to the award of moral damages and attorney’s fees which is hereby DELETED. SO ORDERED.6 Like the RTC earlier held, the CA ruled that Metrobank failed to overthrow the presumption established in Art. 116 of the Family Code. And also decreed as going against Metrobank was Florencia’s failure to comply with the prescriptions of the succeeding Art. 124 of the Code on the disposition of conjugal partnership property. Art. 124 states: Art. 124. The istration and enjoyment of the conjugal partnership property shall belong to both spouses tly. In case of disagreement, the husband’s decision shall prevail, subject to recourse to the court by the wife for proper remedy x x x. In the event that one spouse is incapacitated or otherwise unable to participate in the istration of the conjugal properties, the other spouse may assume sole powers of istration. These powers do not include disposition or encumbrance without authority of the court or written consent of the other spouse. In the absence of such authority or consent, the disposition or encumbrance shall be void. However, the transaction shall be construed as a continuing offer on the part of the consenting spouse and the third person, and may be perfected as a binding contract upon the acceptance by the other spouse or authorization by the court before the offer is withdrawn by either or both offerors. As to the deletion of the award of moral damages and attorney’s fees, the CA, in gist, held that Metrobank did not enter into the mortgage contract out of ill-will or for some fraudulent purpose, moral obliquity, or like dishonest considerations as to justify damages. Metrobank moved but was denied reconsideration by the CA. Thus, Metrobank filed this Petition for Review on Certiorari under Rule 45, raising the following issues for consideration: a. Whether or not the [CA] erred in declaring subject property as conjugal by applying Article 116 of the Family Code. b. Whether or not the [CA] erred in not holding that the declaration of nullity of marriage between the respondent Nicholson Pascual and Florencia Nevalga ipso facto dissolved the regime of community of property of the spouses. c. Whether or not the [CA] erred in ruling that the petitioner is an innocent purchaser for value.7

Our Ruling A modification of the CA’s Decision is in order. The Disputed Property is Conjugal It is Metrobank’s threshold posture that Art. 160 of the Civil Code providing that "[a]ll property of the marriage is presumed to belong to the conjugal partnership, unless it be prove[n] that it pertains exclusively to the husband or to the wife," applies. To Metrobank, Art. 116 of the Family Code could not be of governing application inasmuch as Nicholson and Florencia contracted marriage before the effectivity of the Family Code on August 3, 1988. Citing Manongsong v. Estimo,8 Metrobank asserts that the presumption of conjugal ownership under Art. 160 of the Civil Code applies when there is proof that the property was acquired during the marriage. Metrobank adds, however, that for the presumption of conjugal ownership to operate, evidence must be adduced to prove that not only was the property acquired during the marriage but that conjugal funds were used for the acquisition, a burden Nicholson allegedly failed to discharge. To bolster its thesis on the paraphernal nature of the disputed property, Metrobank cites Francisco v. Court of Appeals9 and Jocson v. Court of Appeals,10 among other cases, where this Court held that a property ed in the name of a certain person with a description of being married is no proof that the property was acquired during the spouses’ marriage. On the other hand, Nicholson, banking on De Leon v. Rehabilitation Finance Corporation11 and Wong v. IAC,12contends that Metrobank failed to overcome the legal presumption that the disputed property is conjugal. He asserts that Metrobank’s arguments on the matter of presumption are misleading as only one postulate needs to be shown for the presumption in favor of conjugal ownership to arise, that is, the fact of acquisition during marriage. Nicholson dismisses, as inapplicable, Francisco and Jocson, noting that they are relevant only when there is no indication as to the exact date of acquisition of the property alleged to be conjugal. As a final point, Nicholson invites attention to the fact that Metrobank had virtually recognized the conjugal nature of the property in at least three instances. The first was when the bank lumped him with Florencia in Civil Case No. 00-789 as co-mortgagors and when they were referred to as "spouses" in the petition for extrajudicial foreclosure of mortgage. Then came the published notice of foreclosure sale where Nicholson was again designated as co-mortgagor. And third, in its demandletter13 to vacate the disputed lot, Metrobank addressed Nicholson and Florencia as "spouses," albeit the finality of the decree of nullity of marriage between them had long set in. We find for Nicholson. First, while Metrobank is correct in saying that Art. 160 of the Civil Code, not Art. 116 of the Family Code, is the applicable legal provision since the property was acquired prior to the enactment of the Family Code, it errs in its theory that, before conjugal ownership could be legally presumed, there must be a showing that the property was acquired during marriage using conjugal funds. Contrary to Metrobank’s submission, the Court did not, inManongsong,14 add the matter of the use of conjugal funds as an essential requirement for the presumption of conjugal ownership to arise. Nicholson is correct in pointing out that only proof of acquisition during the marriage is needed to raise the presumption that the property is conjugal. Indeed, if proof on the use of conjugal is still required as a necessary condition before the presumption can arise, then the legal presumption set forth in the law would veritably be a superfluity. As we stressed in Castro v. Miat:

Petitioners also overlook Article 160 of the New Civil Code. It provides that "all property of the marriage is presumed to be conjugal partnership, unless it be prove[n] that it pertains exclusively to the husband or to the wife." This article does not require proof that the property was acquired with funds of the partnership. The presumption applies even when the manner in which the property was acquired does not appear.15 (Emphasis supplied.) Second, Francisco and Jocson do not reinforce Metrobank’s theory. Metrobank would thrust on the Court, invoking the two cases, the argument that the registration of the property in the name of "Florencia Nevalga, married to Nelson Pascual" operates to describe only the marital status of the title holder, but not as proof that the property was acquired during the existence of the marriage. Metrobank is wrong. As Nicholson aptly points out, if proof obtains on the acquisition of the property during the existence of the marriage, then the presumption of conjugal ownership applies. The correct lesson of Franciscoand Jocson is that proof of acquisition during the marital coverture is a condition sine qua non for the operation of the presumption in favor of conjugal ownership. When there is no showing as to when the property was acquired by the spouse, the fact that a title is in the name of the spouse is an indication that the property belongs exclusively to said spouse. 16 The Court, to be sure, has taken stock of Nicholson’s arguments regarding Metrobank having implicitly acknowledged, thus being in virtual estoppel to question, the conjugal ownership of the disputed lot, the bank having named the former in the foreclosure proceedings below as either the spouse of Florencia or her co-mortgagor. It is felt, however, that there is no compelling reason to delve into the matter of estoppel, the same having been raised only for the first time in this petition. Besides, however Nicholson was designated below does not really change, one way or another, the classification of the lot in question. Termination of Conjugal Property Regime does not ipso facto End the Nature of Conjugal Ownership Metrobank next maintains that, contrary to the CA’s holding, Art. 129 of the Family Code is inapplicable. Art. 129 in part reads: Art. 129. Upon the dissolution of the conjugal partnership regime, the following procedure shall apply: xxxx (7) The net remainder of the conjugal partnership properties shall constitute the profits, which shall be divided equally between husband and wife, unless a different proportion or division was agreed upon in the marriage settlements or unless there has been a voluntary waiver or forfeiture of such share as provided in this Code. Apropos the aforequoted provision, Metrobank asserts that the waiver executed by Nicholson, effected as it were before the dissolution of the conjugal property regime, vested on Florencia full ownership of all the properties acquired during the marriage. Nicholson counters that the mere declaration of nullity of marriage, without more, does not automatically result in a regime of complete separation when it is shown that there was no liquidation of the conjugal assets.

We again find for Nicholson. While the declared nullity of marriage of Nicholson and Florencia severed their marital bond and dissolved the conjugal partnership, the character of the properties acquired before such declaration continues to subsist as conjugal properties until and after the liquidation and partition of the partnership. This conclusion holds true whether we apply Art. 129 of the Family Code on liquidation of the conjugal partnership’s assets and liabilities which is generally prospective in application, or Section 7, Chapter 4, Title IV, Book I (Arts. 179 to 185) of the Civil Code on the subject, Conjugal Partnership of Gains. For, the relevant provisions of both Codes first require the liquidation of the conjugal properties before a regime of separation of property reigns. In Dael v. Intermediate Appellate Court, we ruled that pending its liquidation following its dissolution, the conjugal partnership of gains is converted into an implied ordinary co-ownership among the surviving spouse and the other heirs of the deceased.17 In this pre-liquidation scenario, Art. 493 of the Civil Code shall govern the property relationship between the former spouses, where: Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the coownership. (Emphasis supplied.) In the case at bar, Florencia constituted the mortgage on the disputed lot on April 30, 1997, or a little less than two years after the dissolution of the conjugal partnership on July 31, 1995, but before the liquidation of the partnership. Be that as it may, what governed the property relations of the former spouses when the mortgage was given is the aforequoted Art. 493. Under it, Florencia has the right to mortgage or even sell her one-half (1/2) undivided interest in the disputed property even without the consent of Nicholson. However, the rights of Metrobank, as mortgagee, are limited only to the 1/2 undivided portion that Florencia owned. Accordingly, the mortgage contract insofar as it covered the remaining 1/2 undivided portion of the lot is null and void, Nicholson not having consented to the mortgage of his undivided half. The conclusion would have, however, been different if Nicholson indeed duly waived his share in the conjugal partnership. But, as found by the courts a quo, the April 9, 1995 deed of waiver allegedly executed by Nicholson three months prior to the dissolution of the marriage and the conjugal partnership of gains on July 31, 1995 bore his forged signature, not to mention that of the notarizing officer. A spurious deed of waiver does not transfer any right at all, albeit it may become the root of a valid title in the hands of an innocent buyer for value. Upon the foregoing perspective, Metrobank’s right, as mortgagee and as the successful bidder at the auction of the lot, is confined only to the 1/2 undivided portion thereof heretofore pertaining in ownership to Florencia. The other undivided half belongs to Nicholson. As owner pro indiviso of a portion of the lot in question, Metrobank may ask for the partition of the lot and its property rights "shall be limited to the portion which may be allotted to [the bank] in the division upon the termination of the co-ownership."18 This disposition is in line with the 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.19

In view of our resolution on the validity of the auction of the lot in favor of Metrobank, there is hardly a need to discuss at length whether or not Metrobank was a mortgagee in good faith. Suffice it to state for the nonce that where the mortgagee is a banking institution, the general rule that a purchaser or mortgagee of the land need not look beyond the four corners of the title is inapplicable.20 Unlike private individuals, it behooves banks to exercise greater care and due diligence before entering into a mortgage contract. The ascertainment of the status or condition of the property offered as security and the validity of the mortgagor’s title must be standard and indispensable part of the bank’s operation.21 A bank that failed to observe due diligence cannot be accorded the status of a bona fide mortgagee,22 as here. But as found by the CA, however, Metrobank’s failure to comply with the due diligence requirement was not the result of a dishonest purpose, some moral obliquity or breach of a known duty for some interest or ill-will that partakes of fraud that would justify damages. WHEREFORE, the petition is PARTLY GRANTED. The appealed Decision of the CA dated January 28, 2004, upholding with modification the Decision of the RTC, Branch 65 in Makati City, in Civil Case No. 00-789, isAFFIRMED with the MODIFICATION that the REM over the lot covered by TCT No. 156283 of the Registry of Deeds of Makati City is hereby declared valid only insofar as the pro indiviso share of Florencia thereon is concerned. As modified, the Decision of the RTC shall read: PREMISES CONSIDERED, the real estate mortgage on the property covered by TCT No. 156283 of the Registry of Deeds of Makati City and all proceedings thereon are NULL and VOID with respect to the undivided 1/2 portion of the disputed property owned by Nicholson, but VALID with respect to the other undivided 1/2 portion belonging to Florencia. The claims of Nicholson for moral damages and attorney’s fees are DENIED for lack of merit. No pronouncement as to costs. SO ORDERED.

4.

Cabrera Vs Ysaac

(digest, pero parang tungkol sa sales ang digest na to. Read narin yung full text sa next maikli din naman)

JUAN P. CABRERA vs. HENRY YSAAC G.R. No. 166790 NOVEMBER 19, 2014 FACTS: Henry Ysaac is one of the co-owners of a parcel of land covered by OCT No. 506 with an area of 5,517 square meters. He leased out a portion of the property to several lessees including Juan Cabrera who leased a 95-square meter portion of the land. In need of money, Henry offered to sell the 95 sq. meter lot but Juan demurred because the lot was too small for his needs since there was no parking space for his vehicle. To deal with Juan’s need, Henry expanded his offer to include two ading lands which was then leased by two families but warned that the sale could only proceed if the two families would agree. The deal was almost closed with the agreed price of P 250/sq.m but Juan stated that he could only pay the full price after his retirement. Henry agreed but demanded for an initial payment of P1, 500.00 which Juan paid. ISSUE: Whether or not there was a valid contract of sale between petitioner and respondent. RULING: We find that there was no contract of sale. It was null ab initio. As defined by the Civil Code, “[a] contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service.”For there to be a valid contract, there must be consent of the contracting parties, an object certain which is the subject matter of the contract, and cause of the obligation which is established.76

Sale is a special contract. The seller obligates himself to deliver a determinate thing and to transfer its ownership to the buyer. In turn, the buyer pays for a price certain in money or its equivalent.77 A “contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price.”78 The seller and buyer must agree as to the certain thing that will be subject of the sale as well as the price in which the thing will be sold. The thing to be sold is the object of the contract, while the price is the cause or consideration. The object of the sales contract between petitioner and respondent was a definite portion of a co-owned parcel of land. At the time of the alleged sale between petitioner and respondent, the entire property was still held in common. This is evidenced by the original certificate of title, which was under the names of Matilde Ysaac, Priscilla Ysaac, Walter Ysaac, respondent Henry Ysaac, Elizabeth Ysaac, Norma Ysaac, Luis Ysaac, Jr., George Ysaac, Franklin Ysaac, Marison Ysaac, Helen Ysaac, Erlinda Ysaac, and Maridel Ysaac.85 The rules allow respondent to sell his undivided interest in the coownership. However, this was not the object of the sale between him and petitioner. The object of the sale was a definite portion. Even if it was respondent who was benefiting from the fruits of the lease contract to petitioner, respondent has “no right to sell or alienate a concrete, specific or determinate part of the thing owned in common, because his right over the thing is represented by quota or ideal portion without any physical adjudication.”

(FULL TEXT)

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 166790

November 19, 2014

JUAN P. CABRERA, Petitioner, vs. HENRY YSAAC, Respondent. DECISION LEONEN, J.: Unless all the co-owners have agreed to partition their property, none of them may sell a definite portion of the land. The co-owner may only sell his or her proportionate interest in the co-ownership. A contract of sale which purports to sell a specific or definite portion of unpartitioned land is null and void ab initio. In this petition for review on certiorari, Juan P. Cabrera assails the Court of Appeals' decision dated June 19, 2003 and resolution dated January 3, 2005. These decisions ruled that a specific performance to execute a deed of sale over a parcel of land is not available as a relief for Juan Cabrera. 1

2

3

It appears that the heirs of Luis and Matilde Ysaac co-owned a 5,517-square-meter parcel of land located in Sabang, Naga City, covered by Original Certificate of Title (OCT) No. 506. One of the coowners is respondent, Henry Ysaac. 4

Henry Ysaac leased out portions of the property to several lessees. Juan Cabrera, one of the lessees, leased a 95-square-meter portion of the land beginning in 1986. 5

On May 6, 1990, Henry Ysaac needed money and offered to sell the 95-square-meter piece of land to Juan Cabrera. He told Henry Ysaac that the land was too small for his needs because there was no parking space for his vehicle. 6

7

In order to address Juan Cabrera’s concerns, Henry Ysaac expanded his offer to include the two ading lands that Henry Ysaac was then leasing to the Borbe family and the Espiritu family. Those three parcels of land have a combined area of 439-square-meters. However, Henry Ysaac warned Juan Cabrera that the sale for those two parcels could only proceed if the two families agree to it. Juan Cabrera accepted the new offer. Henry Ysaac and Juan Cabrera settled on the price of P250.00 per square meter, but Juan Cabrera stated that he could only pay in full after his retirement on June 15, 1992. Henry Ysaac agreed but demanded for an initial payment of P1,500.00, which Juan Cabrera paid. 8

9

According to Juan Cabrera, Henry Ysaac informed him that the Borbe family and the Espiritu family were no longer interested in purchasing the properties they were leasing. Since Mamerta Espiritu of the Espiritu family initially considered purchasing the property and had made an initial deposit for it, Juan Cabrera agreed to reimbursethis earlier payment. On June 9, 1990, Juan Cabrera paid the amount of P6,100.00. Henry Ysaac issued a receipt for this amount. P3,100.00 of the amount paid was reimbursed to Mamerta Espiritu and, in turn, she gaveJuan Cabrera the receipts issued to her by Henry Ysaac. 10

11

On June 15, 1992, Juan Cabrera tried to pay the balance of the purchase price to Henry Ysaac. However,at that time, Henry Ysaac was in the United States. The only person in Henry Ysaac’s residence was his wife. The wife refused to accept Juan Cabrera’s payment. 12

Sometime in September 1993, JuanCabrera alleged that Henry Ysaac approached him, requesting to reduce the area of the land subject of their transaction. Part of the 439-square-meter land was going to be made into a barangay walkway, and another part was being occupied by a family that was difficult to eject. Juan Cabrera agreed to the proposal. The land was surveyed again. According to Juan Cabrera, Henry Ysaac agreed to shoulder the costs of the resurvey, which Juan Cabrera advanced in the amount of P3,000.00. 13

The resurvey shows that the area now covered by the transaction was 321 square meters. Juan Cabrera intended to show the sketch plan and pay the amount due for the payment of the lot. However, on that day, Henry Ysaac was in Manila. Once more, Henry Ysaac’s wife refused to receive the payment because of lack of authority from her husband. 14

15

On September 21, 1994, Henry Ysaac’s counsel, Atty. Luis Ruben General, wrote a letter addressed to Atty. Leoncio Clemente, Juan Cabrera’s counsel. Atty. General informed Atty. Clemente that his client is formally rescinding the contract of sale because Juan Cabrera failed to pay the balance of the purchase price of the land between May 1990 and May 1992. The letter also stated that Juan Cabrera’s initial payment of P1,500.00 and the subsequent payment of P6,100.00 were going to be applied as payment for overdue rent of the parcel of land Juan Cabrera was leasing from Henry Ysaac. The letter also denied the allegation of Juan Cabrera that Henry Ysaac agreed to shoulder the costs of the resurveying of the property. Juan Cabrera, together with his uncle, Delfin Cabrera, went to Henry Ysaac’s house on September 16, 1995 to settle the matter. Henry Ysaac told Juan Cabrera that he could no longer sell the property because the new of the property was his brother, Franklin Ysaac. 16

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Due to Juan Cabrera’s inability to enforce the contract of sale between him and Henry Ysaac, he decided to file a civil case for specific performance on September 20, 1995. Juan Cabrera prayed for the execution of a formal deed of sale and for the transfer of the title of the property in his name. He tendered the sum of P69,650.00 to the clerk of court as payment of the remaining balance of the original sale price. On September 22, 1995, a notice of lis pendenswas annotated on OCT No. 560. 21

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In his answer with counterclaim, Henry Ysaac prayed for the dismissal of Juan Cabrera’s complaint. He also prayed for compensation in the form of moral damages, attorney’s fees, and incidental litigation expenses. 25

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Before the Regional Trial Court decided the case, the heirs of Luis and Matilde Ysaac, under the istration of Franklin Ysaac, sold their property to the local government ofNaga City on February 12, 1997. The property was turned into a projectfor the urban poor of the city. During the trial, Corazon Borbe Combe of the Borbe family testified that contrary to what Juan Cabrera claimed, her family never agreed to sell the land they were formerly leasing from Henry Ysaac in favor of 28

29

Juan Cabrera. The Borbe family bought the property from NagaCity’s urban poor program after the salebetween the Ysaacs and the local government of Naga City. 30

31

On September 22, 1999, the Regional Trial Court of Naga City ruled that the contract of sale between Juan Cabrera and Henry Ysaac was duly rescinded when the former failed to pay the balance of the purchase price in the period agreed upon. The Regional Trial Court found that there was an agreement between Juan Cabrera and Henry Ysaac as to the sale of land and the corresponding unit price. However, aside from the receipts turned over by Mamerta Espiritu of the Espiritu family to Juan Cabrera, there was no "evidence that the other ading lot occupants agreed to sell their respective landholdings" to Juan Cabrera. The Regional Trial Court also doubted that Juan Cabrera was willing and able to pay Henry Ysaac on June 15, 1992. According to the trial court: 32

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[A]fter the said refusal of Henry Ysaac’s wife, plaintiff [Juan Cabrera] did not bother to write tothe defendant [Henry Ysaac] or to any of the co-owners his intention to pay for the land or he could have consigned the amount in court at the same time notifying [Henry Ysaac] of the consignation in accordance with Article 1256 of the Civil Code. Furthermore, in September, 1993 [Juan Cabrera] was able to meet [Henry Ysaac] whenthe latter allegedly talked to him about the reduction of the areahe was going to buy. There is no showing that [Juan Cabrera] again tendered his payment to Henry Ysaac. Instead, he allegedly made his offer after he had the land resurveyed but defendant was then in Manila. There is no evidence as to what date this offer was made. . . . . . [T]he court does not see any serious demand made for performance of the contract on the part of [Juan Cabrera] in 1992 when he allegedly promised to pay the balance of the purchase price. Neither could he demand for the sale of the ading lots because the occupants thereof did not manifest their consent thereto. At the most, he could have demanded the sale of the lot which he was occupying. If his payment was refused in 1995, he cannot demand for damages because the rescission of the contract was relayed to him in writing in Exhibit "4". 35

The Regional Trial Court dismissed Juan Cabrera’s complaint and Henry Ysaac’s counterclaim. Juan Cabrera appealed the Regional Trial Court’s decision. 36

37

The Court of Appeals agreed with the Regional Trial Court that there was a perfected contract of sale between Juan Cabrera and Henry Ysaac. According to the Court of Appeals, even if the subject of the sale is part of Henry Ysaac’s undivided property, a co-owner may sell a definite portion of the property. 38

39

The Court of Appeals also ruled that the contract of sale between Juan Cabrera and Henry Ysaac was not validly rescinded. For the rescission to be valid under Article 1592 of the Civil Code, it should have been done through a judicial or notarial act and not merely through a letter. 40

41

However, due to the sale of the entire property of the Ysaac family in favor of the local government of Naga City, the Court of Appeals ruled that the verbal contract between Juan Cabrera and Henry Ysaac cannot be subject to the remedy of specific performance. The local government of Naga City was an innocent purchaser for value, and following the rules on double sales, it had a preferential right since the sale it entered into was in a public instrument, while the one with Juan Cabrera was only made orally. The only recourse the Court of Appeals could do is to order Henry Ysaac to return the initial payment of the purchase price of P10,600.00 (P1,500.00 andP6,100.00 as evidenced by the receipts issued by Henry Ysaac to Juan Cabrera, and P3,000.00 for the surveying expenses) as payment of actual damages. The Court of Appeals likewise awarded attorney’s fees and litigation costs. To wit: 42

43

WHEREFORE, premises considered, the assailed decision of the lower court is hereby SET ASIDE and a new one is entered as follows: 1. Declaring that there is no valid rescission of the contract of sale of the subject lot between plaintiff-appellant [Juan P. Cabrera] and defendant-appellee [Henry Ysaac]; however, specific performance is not an available relief to plaintiff because of the supervening sale of the property to the City of Naga, an innocent purchaser and for value; 2. Ordering [Henry Ysaac] to pay [Juan P. Cabrera] actual damages in the amount of P10,600.00, with legal interest of 12% per annum from September 20, 1995 until paid; 3. Ordering [Henry Ysaac] to pay [Juan P. Cabrera], the amount of thirty thousand pesos (P30,000.00) by way of attorney’s fees and litigation expenses. Henry Ysaac filed his motion for reconsideration dated July 14, 2003 of the decision of the Court of Appeals. On the other hand, Juan Cabrera immediately filed a petition for reviewon certiorari with this court. In the resolution dated October 15, 2003, this court denied the petition "for being premature since respondent’s motion for reconsideration of the questioned decision of the Court of Appeals is still pending resolution." 44

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In the resolution dated January 3,2005, the Court of Appeals denied Henry Ysaac’s motion for reconsideration. On February24, 2005, Juan Cabrera filed another petition with this court, questioning the propriety of the Court of Appeals’ decision and resolution. This court initially noted that the petition was filed out of time. The stamp on the petition states that it was received by this court on March 24, 2005, while the reglementary period to file the petition expired on February 28, 2005. Thus, the petition was dismissed in this court’s resolution dated April 27, 2005. Petitioner filed a motion for reconsideration. However, the same was denied with finality in this court’s resolution dated August 17, 2005. 47

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In a letter addressed to the Chief Justice, petitioner argued that it would be unfair to him if a clerical error would deprive his petition from being judged on the merits. Petitioner emphasized that the registry receipts show that he filed the petition on February 24, 2005, not March 24, 2005, as noted by this court in his pleading. This court treated the letter as a second motion for reconsideration. In the resolution dated March 31, 2006, this court found merit in petitioner’s letter. The petition was reinstated, and respondent was ordered to file his comment. Respondent filed his comment on September 18, 2006. This court required petitioner to file a reply, which petitioner complied with on January 15, 2007. 51

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The issues raised by petitioner and respondent are summarized as follows: 1. Whether this court could take cognizance of issues not raised by petitioner but by respondent in his comment to the petition for review; 2. Whether there was a valid contractof sale between petitioner and respondent; 3. Whether the contract ofsale still subsisted; a. Whether the contract was terminated through rescission;

b. Whether the contract was no longer enforceable due to the supervening sale of the property to the local government of Naga City; 4. Whether petitioner is entitled to the execution of a deed of sale in his favor; and 5. Whether petitioner is entitled to actual damages, attorney’s fees, and costs of litigation. The petition should be denied. I This court can resolve issues raised by both parties Petitioner stated that the errors inthis case are: (1) "the [Court of Appeals] erred in holding that the relief of specific performance is not available to [petitioner] supposedly because of the supervening sale of [the] property to the City Government of Naga"; and (2) "consequently, the [Court of Appeals] erred in not ordering the execution of the necessary deed of sale in favor of [petitioner]." Petitioner argues that this court should limit its adjudication to these two errors. 57

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On the other hand, respondent raised issues on the validity of the contract of sale in favor of petitioner, and the propriety of the award of actual damages with interest, attorney’s fees, and litigation expenses. 60

For petitioner, if respondent wanted to raise issues regarding the Court of Appeals’ decision, respondent should have interposed a separate appeal. 61

Petitioner’s position is erroneous. This court can resolve issues and assignments of error argued by petitioner and respondent. This court "is clothed with ample authority to review matters, even if they are not assigned as errors in their appeal,if it finds that their consideration is necessary to arriveat a just decision of the case." We can consider errors not raised by the parties,more so if these errors were raised by respondent. 62

Respondent raised different issues compared with those raised by petitioner. However, the assignment of error of respondent was still responsive to the main argument of petitioner. Petitioner’s argument works on the premise that there was a valid contract. By attacking the validity of the contract, respondent was merely responding to the premise of petitioner’s main argument. The issue is relevant to the final disposition of this case; hence, it should be considered by this court in arriving at a decision. II There was no valid contract of sale between petitioner and respondent Petitioner agrees with the decision of the Court of Appeals that there was a perfected contract of sale between him and respondent. 63

Respondent, however, argues that there was no contract between him and petitioner because under Article 1475 of the Civil Code, there has to be a meeting of the minds as to the price and the object

of the contract. Respondent argues that there was no meeting of the minds as to the final price and size of the property subject of the sale. 64

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66

In addition, while respondent its that he was willing to sell the property being leased from him by the Borbe family and the Espiritu family, petitioner presented no evidence to show that these families agreed to the sale in favor of petitioner. During trial, Corazon Borbe Combe of the Borbe family testified that her family never agreed to allow the sale of the property in favor of petitioner. Respondent likewise alleged that Mamerta Espiritu of the Espiritu family eventually bought the property occupied by her family, which is contrary to the claim that petitioner obtained the consent of Mamerta Espiritu to have the land sold in his favor. Petitioner replied that respondent sold 113 square meters of the 321-square-meter property to the Espiritu family on January 17, 1996. Petitioner argued that Mamerta Espiritu was not a buyer in good faith because in 1990, she voluntarily agreed to surrender the lot for sale in favor of petitioner because she did not have the money to pay for the lot. Hence, the sale in favor of Mamerta Espiritu should not supersede the sale in favor of petitioner. 67

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The Regional Trial Court ruled that there was a valid contract of sale, although it found that there was no evidence to petitioner’s claim that he was able to secure the consent of the Espiritu family and the Borbe family to the sale of the land. There was a valid contract of sale subject to a suspensive condition, but the suspensive condition was not complied with. 71

For the Court of Appeals, there was a valid contract of sale. The Court of Appeals’ ruling was based on the idea that a co-owner could sell a definite portion of the land owned in common, and not because the suspensive conditions of the contract were complied with. In ruling this way, the Court of Appeals relied on Pamplona v. Morato, which stated that: 72

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. . . [A] "co-owner may validly sell his undivided share of the property owned in common. (If the part sold happens to be his allotted share after partition, the transaction is entirely valid). Now then if there has been no express partition as yet, but the co-owner who sells points out to his buyers the boundaries of the parthe was selling, and the other coowners make no objection, there is in effect already a partial partition, and the sale of the definite portioncan no longer be assailed." 74

We find that there was no contract of sale. It was null ab initio. As defined by the Civil Code, "[a] contract is a meeting of minds between two persons whereby one binds himself, with respect to the other, to give something or to render some service." For there to be a valid contract, there must be consent of the contracting parties, an object certain which is the subject matter of the contract, and cause of the obligation which is established. Sale is a special contract. The seller obligates himself to deliver a determinate thing and to transfer its ownership to the buyer. In turn, the buyer pays for a price certain in money or its equivalent. A "contract of sale is perfected at the moment there is a meeting of minds upon the thing which is the object of the contract and upon the price." The seller and buyer must agree as to the certain thing that will be subject of the sale as well as the price in which the thing will be sold. The thing to be sold is the object of the contract, while the price is the cause or consideration. 75

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The object of a valid sales contract must be owned by the seller. If the seller is not the owner, the seller must be authorized by the owner to sell the object. 79

Specific rules attach when the seller co-ownsthe object of the contract. Sale of a portion of the property is considered an alteration of the thing owned in common. Under the Civil Code, such disposition requires the unanimous consent of the other co-owners. However, the rules also allow a co-owner to alienate his or her part in the co-ownership. 80

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These two rules are reconciled through jurisprudence. If the alienation precedes the partition, the co-owner cannot sell a definite portion of the land without consent from his or her co-owners. He or she could only sell the undivided interest of the co-owned property. As summarized in Lopez v. Ilustre, "[i]f he is the owner of an undivided half of a tract of land, he has a right to sell and convey an undivided half, but he has no right to divide the lot into two parts, and convey the whole of one part by metes and bounds." 82

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The undivided interestof a co-owner is also referred to as the "ideal or abstract quota" or "proportionate share." On the other hand, the definite portion of the land refers to specific metes and bounds of a co-owned property. To illustrate, if a ten-hectare property is owned equally by ten coowners, the undivided interest of a co-owner is one hectare. The definite portion of that interest is usually determined during judicial or extrajudicial partition. After partition, a definite portion of the property held in common is allocated to a specific co-owner. The co-ownership is dissolved and, in effect, each of the former co-owners is free to exercise autonomously the rights attached to his or her ownership over the definite portion of the land. It is crucial that the co-owners agree to which portion of the land goes to whom. Hence, prior to partition, a sale of a definite portion of common property requires the consent of all co-owners because it operates to partition the land with respect to the co-owner selling his or her share. The co-owner or seller is already marking which portion should redound to his or her autonomous ownership upon future partition. The object of the sales contract between petitioner and respondent was a definite portion of a coowned parcel of land. At the time of the alleged sale between petitioner and respondent, the entire property was still held in common. This is evidenced by the original certificate of title, which was under the names of Matilde Ysaac, Priscilla Ysaac, Walter Ysaac, respondent Henry Ysaac, Elizabeth Ysaac, Norma Ysaac, Luis Ysaac, Jr., George Ysaac, Franklin Ysaac, Marison Ysaac, Helen Ysaac, Erlinda Ysaac, and Maridel Ysaac. 85

The rules allow respondent to sell his undivided interestin the coownership. However, this was not the object of the sale between him and petitioner. The object of the sale was a definite portion. Even if it was respondent who was benefiting from the fruits of the lease contract to petitioner, respondent has "no right to sell or alienate a concrete, specific or determinate part of the thing owned in common, because his right over the thing is represented by quota or ideal portion without any physical adjudication." 86

There was no showing that respondent was authorized by his coowners to sell the portion of land occupied by Juan Cabrera, the Espiritu family, or the Borbe family. Without the consent of his coowners, respondent could not sell a definite portion of the co-owned property. Respondent had no right to define a 95-square-meter parcel of land, a 439-square-meter parcel of land, or a 321-square-meter parcel of land for purposes of selling to petitioner. The determination of those metes and bounds are not binding to the co-ownership and, hence, cannot be subject to sale, unless consented to by all the co-owners. In finding that there was a valid contract of sale between petitioner and respondent, the Court of Appeals erred in the application of Pamplona v. Moreto. The ruling in Pamplona should be read and applied only in situations similar to the context of that case. 87

Pamplona involved the Spouses Moreto who owned three (3) parcels of land with a total area of 2,346 square meters. The spouses had six (6) children. After the wife had died, the husband sold one of the parcels to the Pamplona family, even if the conjugal partnership had not yet been liquidated. The parcel sold measured 781 square meters, which was less than the ideal share of the husband in the estate. This court allowed the sale to prosper because of the tolerance from the husband’s co-heirs. This court ruled: The title may be pro-indiviso or inchoate but the moment the coowner as vendor pointed out its location and even indicated the boundaries over which the fences were to be erected without objection, protest or complaint bythe other co-owners, on the contrary they acquiesced and tolerated such alienation, occupation and possession, We rule that a factual partition or termination of the coownership, although partial, was created, and barred not only the vendor, Flaviano Moreto, butalso his heirs, the private respondents herein from asserting as against the vendees petitioners any right or title in derogation of the deed of sale executed by said vendor Flaviano Moreto. (Emphasis supplied) 88

In Pamplona, the co-heirs of Flaviano Moreto only questioned the sale to the Pamplona family nine (9) years after the sale. By then, the Pamplona family had exercised several acts of ownership over the land. That is why this court considered it acquiescence or tolerance on the part of the co-heirs when they allowed the Pamplonas to take possession and build upon the land sold, and only questioned these acts several years later. The ruling in Pamplonadoes not apply to petitioner. There was no evidence adduced during the trial that respondent’s co-owners acquiesced or tolerated the sale to petitioner. The co-owners tolerated petitioner’s possession of a portion of their land because petitioner was a lessee over a 95-squaremeter portion of the property, not the buyer of the 321-squaremeter portion. There was also no evidence of consent to sell from the co-owners. When petitioner approached respondent in 1995 to enforce the contract of sale, respondent referred him to Franklin Ysaac, the over the entire property. Respondent’s act suggests the absence of consent from the co-owners. Petitioner did not show that he sought Franklin Ysaac’s consent as and the consent of the other co-owners. Without the consent of the co-owners, no partial partition operated in favor of the sale to petitioner. At best, the agreement between petitioner and respondent is a contract to sell, not a contract of sale. A contract to sell is a promise to sell an object, subject to suspensive conditions. Without the fulfillment of these suspensive conditions, the sale does not operate to determine the obligation of the seller to deliver the object. 89

A co-owner could enter into a contract to sell a definite portion of the property. However, such contract is still subject to the suspensive condition of the partition of the property, and that the other co-owners agree that the part subject of the contract to sell vests in favor of the co-owner’s buyer. Hence, the co-owners’ consent is an important factor for the sale to ripen. A non-existent contract cannot be a source of obligations, and it cannot be enforced by the courts Since petitioner believes that there was a perfected contract of sale between him and respondent, he argues that a deed of sale should be formally executed. Petitioner agrees with the Court of Appeals’ finding that there was no valid rescission of the contract in accordance with Article 1592 of the Civil Code. However, petitioner disagrees with the Court of Appeals when it ruled that the 90

contract was no longer enforceable due to the supervening sale with the local government of Naga City. Petitioner argues that the sale in favor of the local government of Naga City was not made in good faith. Before the sale was finalized between the local government and the heirs of Luis and Matilde Ysaac, petitioner had a notice of lis pendens annotated to OCT No. 506. It was presumed that the local government had due notice of petitioner’s adverse claim, thus, it cannot be considered an innocent purchaser. 91

For respondent, due to the inexistence of a valid contract of sale, petitioner cannot demand specific performance from respondent. Respondent disagrees with the Court of Appeals when it stated that Article 1592 of the rescission of contract of sale applies. There is no need to apply Article 1592 because there was no contract to begin with. The contract between respondent and petitioner was terminated by virtue of the letter dated September 21, 1994. 92

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We rule in favor of respondent. The absence of a contract of sale means that there is no source of obligations for respondent, as seller, orpetitioner, as buyer. Rescission is impossible because there is no contract to rescind. The rule in Article 1592 that requires a judicial or notarial act to formalize rescission of a contract of sale of an immovable property does not apply. This court does not need to rule whether a letter is a valid method of rescinding a sales contract over an immovable property because the question is moot and academic. Even if we assume that respondent had full ownership of the property and that he agreed to sell a portion of the property to petitioner, the letter was enough to cancel the contract to sell. Generally, "[t]he power to rescind obligations is implied in reciprocal ones, in case one of the obligors should not comply with what is incumbent on him." 95

For the sale of immovable property, the following provision governs its rescission: Article 1592. In the sale of immovable property, even though it may have been stipulated that upon failure to pay the price at the time agreed upon the rescission of the contract shall of right take place, the vendee may pay, even after the expiration of the period, as long as no demand for rescissionof the contract has been made upon him either judicially or by notarial act. After the demand, the court may not grant him a new term. This provision contemplates (1) a contract of sale of an immovable property and (2) a stipulation in the contract that failure to pay the price at the time agreed upon will cause the rescission of the contract. The vendee or the buyer can still pay even after the time agreed upon, if the agreement between the parties has these requisites. This right of the vendee to pay ceases when the vendor or the seller demands the rescission of the contract judicially or extra judicially. In case of an extra judicial demand to rescind the contract, it should be notarized. Hence, this provision does not apply if it is not a contract of sale of an immovable property and merely a contract to sellan immovable property. A contract to sell is "where the ownership or title is retained by the seller and is not to until the full payment of the price, such payment being a positive suspensive condition and failure of which is not a breach, casual or serious, but simply an event that prevented the obligation of the vendor to convey title from acquiring binding force." 96

In a similar case entitled Manuel v. Rodriguez, Eusebio Manuel offered to buy the land owned by Payatas Subdivision, Inc. The Secretary Treasurer of Payatas Subdivision, Eulogio Rodriguez, Sr., agreed to sell the land to Eusebio Manuel after negotiations. Similar to this case, the agreement was only made orally and not in writing. An initial payment was made, and a final payment was to be 97

madenine (9) to ten (10) months later. Manuel never paid for the latter installment; hence, Eulogio Rodriguez cancelled their agreement and sold the land to someone else. In Manuel, this court categorically stated that Article 1592 "does not apply to a contract to sell or promise to sell, where title remains with the vendor until fulfillment to a positive suspensive condition, such as full payment of the price." This court upheld that the contract to sell was validly cancelled through the non-payment of Eusebio Manuel. The same conclusion applies in this case. 98

The law does not prescribe a form to rescind a contract to sell immovable property. In Manuel, the non-payment operated to cancel the contract. If mere non-payment is enough to cancel a contract to sell, the letter given to petitioner’s lawyer is also an acceptable form of rescinding the contract. The law does not require notarization for a letter to rescind a contract to sell immovable property. Notarization is only required if a contract of sale is being rescinded. Petitioner argued that he was willing to comply with the suspensive condition on the contract to sell because he was ready to pay the balance of the purchase price on June 15, 1992. However, his argument is unmeritorious. As ruled by the Regional Trial Court, petitioner should have resorted to the various modes of consignment when respondent’s wife refused to accept the payment on respondent’s behalf. 99

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Therefore, even if we assumed that the contract between petitioner and respondents were perfected, the strict requisites in Article 1592 did not apply because the only perfected contract was a contract to sell, not a contract of sale. The courts cannot enforce the right of petitioner to buy respondent’s property. We cannot order the execution of a deed of sale between petitioner and respondent. The question of double sale also becomes moot and academic. There was no valid sale between petitioner and respondent, while there was a valid sale between the local government of Naga City and respondent and his coowners. Since there is only one valid sale, the ruleon double sales under Article 1544 of the Civil Code does not apply. 101

Compensatory damages, attorney’s fees, and costs of litigation Respondent argued that petitioner is not entitled to the compensatory damages that the Court of Appeals awarded. According to respondent, petitioner continues to occupy the 95-square-meter property that he has been leasing since 1986 because the parcel was not included in the sale to the local government of Naga City. Since April 30, 1990, petitioner has not been paying rent to respondent despite his continued occupation of the property. Therefore, there was no unjust enrichment on the part of respondent when he applied petitioner’s initial payment over the sale of the property as payment for rent. 102

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Respondent argued further that the award of attorney’s fees and litigation expenses in favor of petitioner was also erroneous because prior to this litigation, respondent already informed petitioner that his claim has no basis in law and fact. Yet, petitioner persisted on filing this case. 104

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We rule that petitioner is entitled to the return of the amount of money because he paid it as consideration for ownership of the land. Since the ownership of the land could not be transferred to him, the money he paid for that purpose must be returned to him. Otherwise, respondent will be unjustly enriched.

Respondent’s claim for rent in arrears is a separate cause of action from this case. For petitioner’s earnestmoney payment to be considered payment for his rent liabilities, the rules of compensation under Article 1279 of the Civil Code must be followed. 1âwphi1

106

It was not proven during trial if petitioner's rental liability to respondent is due, or if it is already liquidated and demandable. Hence, this court is limited to uphold the ruling of the Court of Appeals, but such payment could be subject to the rule on compensation. However, petitioner is not entitled to attorney's fees and the costs of litigation. The Court of Appeals awarded attorney's fees to petitioner "just to protect his right [because petitioner] reached this court to seek justice for himself." 107

Contrary to the Court of Appeals' ruling, we find that petitioner did not have a clear right over the property in question. The Court of Appeals awarded attorney's fees and litigation costs on the premise that the contract between petitioner and respondent was perfected. Without a valid contract that stipulates his rights, petitioner risked litigation in order to determine if he has rights, and not to protect rights that he currently has. Hence, the award of attorney's fees and litigation costs was not properly justified. WHEREFORE, the petition is DENIED. The Court of Appeals' decision dated June 19, 2003 in CAG.R. CV No. 65869 is SET ASIDE. The contract between petitioner and respondent is DECLARED invalid and, therefore, cannot be subject to specific performance. Respondent is ORDERED to return P10,600.00 to petitioner, with legal interest of 12% per annum from September 20, 1995 until June 30, 2013 and 6% per annum from July 1, 2013 ·until fully paid. The award of attorney's fees and litigation expenses is DELETED. SO ORDERED. MARVIC M.V.F. LEONEN Associate Justice WE CONCUR:

5.

Quimpo vs Abad de Beltran

Republic of the Philippines SUPREME COURT Manila THIRD DIVISION G.R. No. 160956

February 13, 2008

JOAQUIN QUIMPO, SR., substituted by Heirs of Joaquin Quimpo, Sr., petitioners, vs. CONSUELO ABAD VDA. DE BELTRAN, IRENEO ABAD, DANILO ABAD, MARITES ABAD, ANITA AND HELEN ABAD, respondents. RESOLUTION NACHURA, J.: This Petition for Review on Certiorari assails the July 22, 2003 Decision1 of the Court of Appeals in CA-G.R. CV No. 56187, and the October 16, 2003 Resolution denying the motion for its reconsideration. Eustaquia Perfecto-Abad (Eustaquia) was the owner of several parcels of land in Goa, Camarines Sur, described as follows: Parcel I - Residential land situated at Abucayan, Goa, Camarines Sur covering an area of 684 square-meters; Parcel II – Coconut land situated at Abucayan, Goa, Camarines Sur covering an area of 4.3731 hectares; Parcel III – Residential land situated at San Jose Street, Goa, Camarines Sur covering an area of 1,395 square meters; and Parcel IV – Abaca and coconut land situated at Abucayan, Goa, Camarines Sur covering an area 42.6127 hectares.2 Eustaquia died intestate in 1948 leaving these parcels of land to her grandchild and great grandchildren, namely, Joaquin Quimpo and respondents Consuelo, Ireneo, Danilo, Marites, Anita and Helen, all surnamed Abad. In 1966, Joaquin and respondents undertook an oral partition of parcel III (San Jose property) and parcel IV. Half of the properties was given to Joaquin and the other half to the respondents.

However, no document of partition was executed, because Joaquin refused to execute a deed. Consuelo and Ireneo occupied their respective shares in the San Jose property, and installed several tenants over their share in parcel IV. Joaquin, on the other hand, became the of the remaining undivided properties and of the shares of respondents Danilo, Marites, Anita and Helen, who were still minors at that time. In 1989, Danilo, Marites, Anita and Helen wanted to take possession of the portions allotted to them, but Joaquin prevented them from occupying the same. Joaquin also refused to heed respondents’ demand for partition of parcels I and II, prompting respondents to file a complaint for judicial partition and/or recovery of possession with ing and damages with the Regional Trial Court (RTC) of Camarines Sur.3 Joaquin denied the material allegations in the complaint, and averred, as his special and affirmative defenses, lack of cause of action and prescription. He asserted absolute ownership over parcels III and IV, claiming that he purchased these lands from Eustaquia in 1946, evidenced by deeds of sale executed on August 23, 1946 and December 2, 1946. He, likewise, claimed continuous, peaceful and adverse possession of these lots since 1946, and alleged that Consuelo’s occupation of the portion of the San Jose property was by mere tolerance.4 During the pendency of the case, Joaquin died. Accordingly, he was substituted by his wife, Estela Tena-Quimpo and his children, namely, Jose, Adelia, Joaquin, Anita, Angelita, Amelia, Arlene, Joy and Aleli, all surnamed Quimpo (the Quimpos). On December 12, 1996, the RTC rendered a Decision5 in favor of respondents, declaring them as co-owners of all the properties left by Eustaquia. It rejected Joaquin’s claim of absolute ownership over parcels III and IV, and declared void the purported deeds of sale executed by Eustaquia for lack of consideration and consent. The court found that at the time of the execution of these deeds, Joaquin was not gainfully employed and had no known source of income, which shows that the deeds of sale state a false and fictitious consideration. Likewise, Eustaquia could not have possibly given her consent to the sale because she was already 91 years old at that time. The RTC also sustained the oral partition among the heirs in 1966. According to the trial court, the possession and occupation of land by respondents Consuelo and Ireneo, and Joaquin’s acquiescence for 23 years, furnish sufficient evidence that there was actual partition of the properties. It held that Joaquin and his heirs are now estopped from claiming ownership over the entire San Jose property as well as over parcel IV. The RTC disposed, thus: WHEREFORE, decision is hereby rendered in favor of the plaintiffs Consuelo Vda. de Beltran, Ireneo Abad, Marites Abad, Danilo Abad, Anita Abad and Helen Abad and against defendant Joaquin Quimpo, substituted by the latter’s wife Estela Tena and their children, Amparo, Jose, Amelia, Joaquin Jr., Adelia, Arlene, Anita, Joy, Angelita and Aleli, all surnamed Quimpo, as follows: 1. Ordering the above-named substituted defendants, and the plaintiffs to execute their written agreement of partition with respect to parcel Nos. III and IV more particularly described in paragraph 7 of the complaint, and for them to execute an agreement of partition with respect to parcel Nos. I and II, both parcels are more particularly described in paragraph 7 of the complaint; 2. Declaring the plaintiffs Danilo Abad, Marites Abad, Anita Abad and Helen Abad the owner of six (6) hectares a portion included in parcel No. IV also described in

paragraph 7 of the complaint, and therefore, entitled to its possession and ordering the said substituted defendants to deliver that portion to them as their share thereto; 3. Ordering the above-named substituted defendants to pay plaintiffs the sum of Six Thousand Pesos (P6,000.00), Philippine Currency, as reasonable attorney’s fees and the sum of One Thousand Pesos (P1,000.00) also of Philippine Currency, as litigation expenses and for the said defendants to pay the costs. The counterclaim, not being proved, the same is hereby ordered dismissed. SO ORDERED.6 On appeal, the CA affirmed the RTC ruling. Sustaining the RTC, the CA declared that it was plausible that Eustaquia’s consent was vitiated because she was then 91 years old and sickly. It was bolstered by the fact that the deeds of sale only surfaced 43 years after its alleged execution and 23 years from the time of the oral partition. The CA also rejected petitioners’ argument that the action was barred by prescription and laches, explaining that prescription does not run against the heirs so long as the heirs, for whose benefit prescription is invoked, have not expressly or impliedly repudiated the co-ownership. The CA found no repudiation on Joaquin’s part. It, therefore, concluded that respondents’ action could not be barred by prescription or laches. The Quimpos, thus, filed the instant petition for review on certiorari imputing the following errors to the CA: 1) THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT PETITIONERS DID NOT ACQUIRE OWNERSHIP OVER [THE] SUBJECT PARCELS OF LAND BY WAY OF DEEDS OF ABSOLUTE SALE EXECUTED IN THEIR FAVOR; 2) THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT CO-OWNERSHIP EXISTS AMONG PETITIONERS AND RESPONDENTS OVER THE SUBJECT PARCELS OF LAND; 3) THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT RESPONDENTS HAVE PROVEN THEIR FILIATION TO THE ORIGINAL OWNER OF THE SUBJECT PARCELS OF LAND BY MERE SCANT EVIDENCE; 4) THE HONORABLE COURT OF APPEALS ERRED IN NOT RULING THAT LACHES HAS TIME–BARRED THE RESPONDENTS FROM ASSAILING THE ABSOLUTE OWNERSHIP OF PETITIONERS OVER THE SUBJECT PARCELS OF LAND; AND 5) THE HONORABLE COURT OF APPEALS ERRED IN RULING THAT RESPONDENTS ARE ENTITLED TO ATTORNEY’S FEES.7 The Quimpos insist on the validity of the deeds of sale between Joaquin and Eustaquia. They assail the probative value and weight given by the RTC and the CA in favor of the respondents’ pieces of evidence while refusing to give credence or value to the documents they presented. Specifically, they contend that the notarized deeds of sale and the tax declarations should have adequately established Joaquin’s ownership of parcels III and IV. The contention has no merit. Well-entrenched is the rule that the Supreme Court’s role in a petition under Rule 45 is limited to reviewing or reversing errors of law allegedly committed by the appellate

court. Factual findings of the trial court, especially when affirmed by the Court of Appeals, are conclusive on the parties. Since such findings are generally not reviewable, this Court is not dutybound to analyze and weigh all over again the evidence already considered in the proceedings below, unless the factual findings complained of are devoid of from the evidence on record or the assailed judgment is based on a misapprehension of facts. 8 Petitioners fail to convince us that the CA committed reversible error in affirming the trial court and in giving no weight to the pieces of evidence they presented. The stated consideration for the sale are P5,000.00 and P6,000.00, respectively, an amount which was so difficult to raise in the year 1946. Respondents established that at the time of the purported sale Joaquin Quimpo was not gainfully employed. He was studying in Manila and Eustaquia was the one ing him; that when Eustaquia died two (2) years later, Joaquin was not able to continue his studies. The Quimpos failed to override this. Except for the incredible and unpersuasive testimony of Joaquin’s daughter, Adelia Magsino, no other testimonial or documentary evidence was offered to prove that Joaquin was duly employed and had the financial capacity to buy the subject properties in 1946. In Rongavilla v. Court of Appeals,9 reiterated in Cruz v. Bancom Finance Corp,10 we held that a deed of sale, in which the stated consideration has not been, in fact, paid is a false contract; that it is void ab initio. Furthermore,Ocejo v. Flores,11 ruled that a contract of purchase and sale is null and void and produces no effect whatsoever where it appears that the same is without cause or consideration which should have been the motive thereof, or the purchase price which appears thereon as paid but which in fact has never been paid by the purchaser to the vendor. Likewise, both the trial court and the CA found that Eustaquia was 91 years old, weak and senile, at the time the deeds of sale were executed. In other words, she was already mentally incapacitated by then, and could no longer be expected to give her consent to the sale. The RTC and CA cannot, therefore, be faulted for not giving credence to the deeds of sale in favor of Joaquin. Petitioners also presented Tax Declaration Nos. 3650, 12 3708,13 and 365914 to substantiate Joaquin’s claim of absolute dominion over parcels III and IV. But we note that these tax declarations are all in the name of Eustaquia Perfecto-Abad. These documents, therefore, do not their claim of absolute dominion since 1946, but enervate it instead. Besides, the fact that the disputed property may have been declared for taxation purposes in the name of Joaquin Quimpo does not necessarily prove ownership for it is well settled that a tax declaration or tax receipts are not conclusive evidence of ownership.15 The CA, therefore, correctly found this proof inadequate to establish Joaquin’s claim of absolute dominion. For forty-three (43) years, Consuelo and Ireneo occupied their portions of the San Jose property and significantly, Joaquin never disturbed their possession. They also installed tenants in parcel IV, and Joaquin did not prevent them from doing so, nor did he assert his ownership over the same. These unerringly point to the fact that there was indeed an oral partition of parcels III and IV. In Maglucot-aw v. Maglucot,16 we held, viz.: [P]artition may be inferred from circumstances sufficiently strong to the presumption. Thus, after a long possession in severalty, a deed of partition may be presumed. It has been held that recitals in deeds, possession and occupation of land, improvements made thereon for a long series of years, and acquiescence for 60 years, furnish sufficient evidence that there was an actual partition of land either by deed or by proceedings in the probate court, which had been lost and were not recorded.

Furthermore, in Hernandez v. Andal,17 we explained that: On general principle, independent and in spite of the statute of frauds, courts of equity have enforced oral partition when it has been completely or partly performed. Regardless of whether a parol partition or agreement to partition is valid and enforceable at law, equity will in proper cases, where the parol partition has actually been consummated by the taking of possession in severalty and the exercise of ownership by the parties of the respective portions set off to each, recognize and enforce such parol partition and the rights of the parties thereunder. Thus, it has been held or stated in a number of cases involving an oral partition under which the parties went into possession, exercised acts of ownership, or otherwise partly performed the partition agreement, that equity will confirm such partition and in a proper case decree title in accordance with the possession in severalty. In numerous cases it has been held or stated that parol partitions may be sustained on the ground ofestoppel of the parties to assert the rights of a tenant in common as to parts of land divided by parol partition as to which possession in severalty was taken and acts of individual ownership were exercised. And a court of equity will recognize the agreement and decree it to be valid and effectual for the purpose of concluding the right of the parties as between each other to hold their respective parts in severalty. A parol partition may also be sustained on the ground that the parties thereto have acquiesced in and ratified the partition by taking possession in severalty, exercising acts of ownership with respect thereto, or otherwise recognizing the existence of the partition. A number of cases have specifically applied the doctrine of part performance, or have stated that a part performance is necessary, to take a parol partition out of the operation of the statute of frauds. It has been held that where there was a partition in fact between tenants in common, and a part performance, a court of equity would have regard to and enforce such partition agreed to by the parties. The CA, therefore, committed no reversible error in sustaining the oral partition over parcels III and IV and in invalidating the deeds of sale between Eustaquia and Joaquin. Similarly, we affirm the CA ruling that respondents are co-owners of the subject four (4) parcels of land, having inherited the same from a common ancestor – Eustaquia Perfecto-Abad. Petitioners’ assertion that respondents failed to prove their relationship to the late Eustaquia deserves scant consideration. During the pre-trial, Joaquin Quimpo itted that: Eustaquia Perfecto Abad and Diego Abad had two (2) children by the names of Leon Abad and Joaquin Abad; that Leon Abad has three (3) children namely: Anastacia, Wilfredo and Consuelo, all surnamed Abad; that Joaquin Abad has only one (1) child, a daughter by the name of Amparo; that Wilfredo has four (4) children, namely, Danilo, Helen, Marites and Anita; Amparo has one child, son Joaquin Quimpo, x x x 18

Consuelo was the grandchild of Eustaquia, while respondents Danilo, Helen, Marites, Anita and also Joaquin Quimpo were Eustaquia’s great grandchildren. As such, respondents can rightfully ask for the confirmation of the oral partition over parcels III and IV, and the partition of parcels I and II. Jurisprudence is replete with rulings that any co-owner may demand at any time the partition of the common property unless a co-owner has repudiated the co-ownership. This action for partition does not prescribe and is not subject to laches.19 Finally, petitioners challenge the attorney’s fees in favor of respondents. The grant of attorney’s fees depends on the circumstances of each case and lies within the discretion of the court. It may be awarded when a party is compelled to litigate or to incur expenses to protect its interest by reason of an unjustified act by the other,20 as in this case. In fine, we find no reversible error in the assailed rulings of the Court of Appeals. WHEREFORE, the petition is DENIED. The Decision and Resolution of the Court of Appeals in CAG.R. CV No. 56187, are AFFIRMED. SO ORDERED.

6.

AUSTRIA VS LICHAUCO

Republic of the Philippines SUPREME COURT Manila SECOND DIVISION G.R. No. 170080

April 4, 2007

CONSOLACION Q. AUSTRIA, Petitioner, vs. CONSTANCIA Q. LICHAUCO, CONSUELO Q. JALANDONI, JOSE ALBERTO L. QUINTOS, RICARDO M. QUINTOS, JR., AILEEN M. QUINTOS and TYRONE M. QUINTOS, Respondents. DECISION TINGA, J.: Petitioner Consolacion Q. Austria assails the Decision1 of the Court of Appeals in C.A. G.R. CV No. 68591 dated June 21, 2005 and its Resolution2 dated October 7, 2005, which respectively affirmed the decision3 of the Regional Trial Court of Makati City, Branch 142, dated February 14, 2000 and its order4 dated August 7, 2000, and denied petitioner’s motion for reconsideration. The facts as narrated by the Court of Appeals are as follows: Plaintiffs-appellees Constancia Lichauco, Consuelo Jalandoni, defendants Benedicto Quintos and Antonio Quintos, and defendant-appellant Consolacion Austria are siblings of full blood. Jose Alberto, Ricardo, Jr., Aileen and Tyrone, all surnamed Quintos, are the nephews and niece of the defendant-appellant. The above-named persons are co-owners of two (2) parcels of land with an aggregate area of six hundred sixty one (661) square meters located in Palanan, Makati City. The aforesaid parcels of land have permanent improvements thereon which straddle both lots, namely, a residential bungalow and two (2) units, two-storey apartments, the titles of which are ed tly in the names of the parties as co-owners thereof. The plaintiffs-appellees allege that sometime in the early part of 1996, they informed defendantappellant of their desire to have the subject properties partitioned based on the percentage of each co-owner’s respective share. A realtor was even engaged to prepare the schemes by which the subject properties could be physically partitioned among the co-owners. However, the defendant-appellant Austria refused to accede to any of the schemes presented by the realtor for the physical apportionment of the subject properties between the co-owners thereof. Because of the refusal of the defendant-appellant Austria to partition the property, and the inability of the co-owners to mutually agree on an arrangement acceptable to all of them, on July 1, 1997, the

plaintiffs-appellees filed a complaint with the Regional Trial Court of Makati City, Branch 142, which was docketed as Civil Case No. 97-1485, against the defendant-appellant Austria and two other defendants namely Benedicto Quintos and Antonio Quintos (as unwilling co-plaintiffs) for partition of the subject property. Within the period for filing an answer, the defendant-appellant Austria filed an Omnibus Motion to Dismiss. In its order dated November 10, 1997, the lower court denied the omnibus motion to dismiss of the defendant-appellant Austria, and directed the defendants to file their answer within the remaining period provided by the Rules. Within the prescriptive period, the defendant-appellant Austria filed a Motion for Reconsideration of the November 10, 1997 order, which the lower court denied in an order dated February 2, 1998. Not satisfied, the defendant-appellant Austria filed before the Court of Appeals a Petition for certiorari and prohibition under Rule 65 of the Revised Rules of Court which was docketed as CA-GR SP No. 46907, seeking to annul the orders of November 10, 1997 and February 2, 1998. In a Resolution dated July 9, 1998, the Court of Appeals required the plaintiffs-appellees to comment, and temporarily restrained the respondent judge, his agents, representatives, and other persons acting in his behalf from proceeding with Civil Case No. 97-1485 in order that the petition may not become moot and academic. On November 9, 1998, the defendant-appellant Austria received a copy of the Decision dated October 30, 1998 dismissing her petition for certiorari and prohibition. The defendant-appellant Austria moved for the reconsideration thereof. Subsequently, on July 19, 2001, defendant-appellant Austria received a copy of the Resolution of the Court of Appeals dated July 9, 2001, denying her motion for reconsideration of the decision denying her petition for certiorari and prohibition. Undaunted, the defendant-appellant Austria then filed a petition for review under Rule 45 of the Revised Rules of Court with the Supreme Court. In a resolution dated October 15, 2001, the Supreme Court denied the said petition for review for non-compliance with the 1997 Rules of Civil Procedure for failure to pay on time docket and other fees and deposit costs in violation of Sec. 3, Rule 45 in relation to Sec. 5(c), Rule 56. Still not satisfied, on November 9, 2001, the defendant-appellant Austria filed a motion for reconsideration of the resolution dated October 15, 2001 denying her petition for review. In its resolution dated January 24, 2002, the Supreme Court denied with finality the petitioner’s motion for reconsideration. During the pendency of the defendant-appellant’s petition for certiorari and prohibition before the Court, the plaintiffs-appellees filed with the Regional Trial Court of Makati City, Branch 142 where the

main case is pending, a motion dated April 6, 1998 praying that a declaration of default be issued against all defendants and for plaintiffs to be allowed to present evidence ex-parte. In an order dated July 13, 1998, the Presiding Judge of the Regional Trial Court of Makati City held in abeyance the proceedings before it while awaiting the resolution of the motion for reconsideration pending before the Court of Appeals. Notwithstanding the order holding in abeyance the proceedings in the lower court, plaintiffsappellees filed a Manifestation and Motion dated September 14, 1998 praying for the resolution of their Motion dated April 6, 1998. In its order dated September 25, 1998, the lower court deemed the incident submitted for resolution. While the motion for reconsideration filed by the appellant is still pending before the Court of Appeals, the lower court in its order dated July 6, 1999 declared the defendants in default, set the reception of ex-parte evidence, and commissioned the Branch Clerk of Court to receive the exparte evidence and to submit her corresponding report thereon as soon as the same is concluded. On On August 4, 1999, the defendant-appellant Austria filed a Motion for Reconsideration of the Order dated July 6, 1999 with an urgent prayer to cancel plaintiff’s ex parte presentation of evidence on August 9, 1999, which was however denied by the lower court, for lack of merit, in an order dated January 14, 2000. The plaintiffs-appellees then presented their evidence ex-parte on January 28, 2000. The assailed decision was subsequently rendered by the lower court on February 14, 2000, finding in favor of the plaintiffs-appellees. A motion for new trial was thereafter filed by the defendant-appellant Austria, which was, in an order dated August 7, 2000, denied for lack of merit.5 Petitioner elevated the case to the Court of Appeals which dismissed her petition and affirmed the trial court’s decision but deleted the order that petitioner pay reasonable rental for her use of a portion of the disputed properties. The appellate court denied reconsideration. In assailing the Decision of the Court of Appeals, petitioner avers that her motion for new trial and appeal of the judgment by default are valid remedies under the Rules of Court. She insists that the appellate court erred in not reversing the declaration of default despite the fact that she questioned the default order in the petition for review which she seasonably filed with the Court of Appeals. Petitioner also contends that it was error for the trial court to allow the sale of the entire property in dispute. Respondents filed a Comment6 dated March 30, 2006, arguing that petitioner was correctly declared in default because of her obstinate refusal to file an answer to the complaint despite being ordered to do so by the trial court. They also allege that they cannot be compelled to remain in co-ownership only because of petitioner’s unjustified refusal to consent to a partition. A Reply to Comment7 dated July 25, 2006 was filed by petitioner who insisted that she was denied the right to fully ventilate her case.

Only two issues are raised in this petition. The first issue pertains to petitioner’s insistence that the judgment by default rendered by the trial court, which was subsequently affirmed by the Court of Appeals, is a denial of her day in court. The second issue concerns the validity of the trial court’s decision alternatively ordering the partition of the subject property or authorizing its sale. A defendant declared in default has the following remedies: (a) a motion to set aside the order of default under Sec. 3(b), Rule 9 of the Rules of Court; (b) a motion for new trial under Sec. 1(a), Rule 37 if the default was discovered after judgment but while appeal is still available; (c) a petition for relief under Rule 38 if judgment has become final and executory; and (d) an appeal from the judgment under Sec. 1, Rule 41 even if no petition to set aside the order of default has been resorted to.8 In this case, petitioner did not move to set aside the order of default rendered by the trial court but filed a motion for new trial after a decision had already been rendered in the case. The motion for new trial, however, was denied by the trial court for lack of merit. She then appealed to the Court of Appeals, assailing both the denial of her motion for new trial and the adverse decision of the trial court. Evidently, petitioner utilized the appropriate remedies available to her. The fact, however, that she availed of the proper remedies does not by itself result in a judgment in her favor or the reversal of the assailed order and decision of the trial court. As correctly ruled by the Court of Appeals, petitioner was declared in default because of her adamant refusal to file an answer despite being required to do so. The factual circumstances in the cases of Heirs of Akut v. Court of Appeals9 and Ampeloquio v. Court of Appeals,10 cited by petitioner in pleading liberality, are markedly different from this case. In Heirs of Akut,petitioners were not able to file an answer within the reglementary period because they failed to obtain the services of counsel on time and two of the petitioners were then sick. In Ampeloquio, the trial court’s order denying defendant’s motion to dismiss was mistakenly served upon one of its counsels on record and not upon the lawyer in charge of the case. Consequently, the answer was not filed on time. In both cases, there was no indication that the failure to answer was intended to delay the case. In contrast, the facts of this case suggest an intention on the part of petitioner to delay the proceedings. The complaint was first filed in 1997 but is only now being finally laid to rest because of several procedural stumbling blocks, including the elevation of the case to this Court on the issue of the propriety of the trial court’s denial of petitioner’s motion to dismiss, hurled by petitioner one after the other. Parenthetically, the appellate court initially issued a temporary restraining order as an incident to the petition for certiorari filed by petitioner questioning the trial court’s order denying her motion to dismiss but the restraining order was lifted after its 60-day validity.11 The expiration of the temporary restraining order resulted in the running of the prescribed period to file an answer and the continuation of the proceedings before the trial court. Petitioner’s obstinate refusal to file an answer to the complaint despite these circumstances clearly justifies the declaration of default by the trial court and its affirmation by the Court of Appeals. This case has crept, ever so slowly, up the ladder of judicial process. While we are not dissuading parties from availing of the judicial remedies outlined in the Rules of Court, they should be cautioned

to be judicious in availing of these remedies. After all, rules of procedure are intended to be, not tools of delay, but of prompt and just disposition of every party’s cause. Having fully availed of, even exploited, these remedies, petitioner cannot feign denial of her day in court. She has been given every opportunity to fully ventilate her side. Now, we turn to the second issue raised by petitioner, i.e., the validity of the trial court’s decision alternatively directing the partition of the subject properties or authorizing their sale to a third party. There are two stages in every action for partition. The first phase is the determination of whether a co-ownership in fact exists and a partition is proper, i.e., not otherwise legally proscribed, and may be made by voluntary agreement of all the parties interested in the property. This phase may end either: (a) with a declaration that plaintiff is not entitled to have a partition either because a coownership does not exist, or partition is legally prohibited; or (b) with a determination that a coownership does in truth exist, partition is proper in the premises, and an ing of rents and profits received by the defendant from the real estate in question is in order. In the latter case, the parties may, if they are able to agree, make partition among themselves by proper instruments of conveyance, and the court shall confirm the partition so agreed upon. 12 The second phase commences when it appears that the parties are unable to agree upon the partition directed by the court. In that event, partition shall be done for the parties by the court with the assistance of not more than three (3) commissioners. This second stage may well also deal with the rendition of the ing itself and its approval by the court after the parties have been accorded opportunity to be heard thereon, and an award for the recovery by the party or parties thereto entitled of their just share in the rents and profits of the real estate in question. 13 The proceedings in this case have only reached the first phase. It must be mentioned as an aside that even if the order decreeing partition leaves something more to be done by the trial court for the complete disposition of the case, i.e., the appointment of commissioners, the proceedings for the determination of just compensation by the appointed commissioners, the submission of their reports and hearing thereon, and the approval of the partition, it is considered a final order and may be appealed by the party aggrieved thereby.14 There is no question that a co-ownership exists between petitioner and respondents. To this extent, the trial court was correct in decreeing partition in line with the Civil Code provision that no co-owner shall be obliged to remain in the co-ownership.15 However, the trial court went astray when it also authorized the sale of the subject properties to a third party and the division of the proceeds thereof. What makes this portion of the decision all the more objectionable is the fact that the trial court conditioned the sale upon the price and acceptable to plaintiffs (respondents herein) only, and adjudicated the proceeds of the sale again only to plaintiffs. The pertinent portion of the trial court’s disposition states: WHEREFORE, on the basis of the foregoing considerations, judgment is hereby rendered in favor of plaintiff: 1) Directing the partition (physical division) of the subject properties and all improvements thereon among the co-owners in accordance with their respective shares; or

2) Authorizing the sale, conveyance or transfer of the above-described properties to a thirdparty at such price and under such acceptable to plaintiffs and thereafter, dividing the proceeds of said sale among them in accordance with their proportionate interests.16 [Emphasis supplied.] It is true that petitioner did not assign this error on appeal resulting in the appellate court’s failure to rule on the matter. Nonetheless, we cannot simply brush this issue aside considering that its resolution is necessary in arriving at a just disposition of the case. 17 The rectification of the trial court’s decision is accordingly in order. WHEREFORE, the petition is GRANTED IN PART. The Decision of the Court of Appeals dated June 21, 2005 is REVERSED in so far as it affirms the portion of the decision dated February 14, 2000 of the Regional Trial Court of Makati City, Branch 142, which authorizes the sale, conveyance or transfer of the properties subject of this case and the division of the proceeds of said sale to respondents herein. The Decision dated June 21, 2005 and Resolution dated October 7, 2005 are AFFIRMED in all other respects. No pronouncement as to costs.

7. VALEROSO VS VALEROSO G.R. No. 163081

June 15, 2007

ANITA UNGAB-VALEROSO, ed in by her husband, RUSELO VALEROSO, Petitioners, vs. AMANCIA UNGAB-GRADO, FELIX UNGAB, represented by his son ROSENDO UNGAB, ESPENILA UNGAB-JAICTIN and RUSTICINA UNGAB-TAMALA, Respondents. DECISION QUISUMBING, J.: This petition for review assails both the Decision1 dated September 19, 2003 of the Court of Appeals in CA-G.R. CV No. 68895 and its Resolution2 dated March 2, 2004, which denied petitioners’ motion for reconsideration. The Court of Appeals had affirmed with modification the Decision 3 dated December 20, 1999 of the Regional Trial Court (RTC) of Iligan City, Branch 3, in Civil Case No. 4048. The antecedent facts, borne by the records, are as follows: Subject of this case is a 14.3375-hectare land in Binuni, Kolambugan, Lanao (now Binuni, Bacolod, Lanao del Norte) ed in the name of Timoteo Ungab under Original Certificate of Title (OCT) No. (P-41)-1,550.4Petitioner Anita Ungab is the only child of Timoteo, now deceased. Respondent Felix Ungab is the brother of Timoteo while the other respondents are the heirs of Timoteo’s other brothers and sisters, namely Simeona, Eugenia, Lorenzo, Lazaro, and Margarito. In 1972, the heirs of Ciriaco Ungab filed a complaint docketed as Civil Case No. II-74 in the Court of First Instance (CFI) of Iligan City, Lanao del Norte against the brothers, sisters and heirs of Timoteo for the partition, ing and reconveyance of the subject land. When the case was called for trial, the parties submitted a written compromise agreement. On February 15, 1973, the CFI rendered judgment adopting in toto the compromise agreement. The decretal portion reads: WHEREFORE, judgment is hereby rendered as follows: (1) that the plaintiffs will be given an area of 4,779 square meters of the coconut land which is a portion of the titled land in the name of Heirs of Timoteo Ungab, under Original Certificate of Title No. T-41 (should be P-41), Homestead Patent No. V-4777, located at Binoni, Bacolod, Lanao del Norte (formerly Kolambugan, Lanao); (2) that defendants are entitled to an area of 138,596 square meters (13.8596 Has.) from said titled land abovementioned; (3) that the expenses for segregation survey of the 4,779 square meters will be shouldered equally among the nine (9) heirs – 3 heirs representing the plaintiffs and the 6 heirs representing the defendants; (4) that the squatters of the above-described titled parcels of land to wit: (a) Dioscoro Buco, (b) Porferio Sugabo, (c) heirs of Severo Buco, (d) Jesus Buco, (e) and others inside the said titled land will be ejected with damages thru Court action, all expenses will be borne equally among the heirs aforementioned, for each recovery; and whatever damages that will be awarded by the court in said ejectment action will be equally divided among the nine sets of heirs, as well as the produce of the income of the squatted area; (5) that meantime that the squatters on the land will not be as yet finally ejected, the 4,779 square meters of the plaintiffs’ will not as yet be

segregated and plaintiffs cannot as yet enjoy the produce, and income thereof, until the squatters will be ejected; and all expenses of the ejectment suits against the squatters will be borne by Margarito Ungab and his wife, subject to the reimbursement with receipts upon the final ejectment of the squatters by all nine sets of heirs aforementioned; (6) the portion pertaining to Simona Ungab is acknowledged to have been sold under Pacto de Retro for the sum of P3,000.00 more or less (the Pacto de Retro Sale consideration controls) unto Margarito Ungab and wife which should be paid likewise by the nine sets of heirs both plaintiffs and defendants; (8) all other prayers and remedies invoked in the complaint and counter-complaint are hereby denied, and (9) no costs is adjudged in this proceeding. SO ORDERED.5 The parties did not have the land partitioned but divided the proceeds of the land in accordance with the decision. However, in December 1996, Anita refused to give respondents their respective shares. Respondents then filed against petitioners Anita and her husband Ruselo Valeroso, a complaint for recovery of possession, partition, enforcement of compromise agreement and damages docketed as Civil Case No. 4048 with the RTC of Iligan City. During the pre-trial, respondents presented in court the affidavit dated March 13, 1939 of Timoteo acknowledging that he co-owned with his brothers and sisters, Simeona, Eugenia, Lorenzo, Lazaro, Felix and Margarito, a parcel of land with an area of 18.8993 hectares in Binuni, Kolambugan, Lanao under Homestead Application No. 218565.6 Respondents also presented the Affidavit of Acknowledgment dated August 4, 1960 of Anita Ungab and her mother Aurelia Ungab acknowledging the rights of Simeona, Eugenia, Lorenzo, Lazaro, Felix and Margarito as co-owners of the land.7 In their defense, the Spouses Anita and Ruselo claimed that Anita exclusively owns the land as sole heir of Timoteo. They maintained that the decision in Civil Case No. II-74 had become dormant and could no longer be executed. Besides, they aver, Anita was not privy to the compromise agreement, which led to the decision in Civil Case No. II-74. On December 1999, the RTC held that the compromise agreement bound all the parties thereto including their heirs and assigns, and Timoteo’s affidavit whose presumption of regularity petitioners failed to overcome, and the compromise agreement created an express trust which has not yet prescribed. The RTC ruled as follows: WHEREFORE, premises considered, judgment is hereby rendered in favor of the plaintiffs (herein respondents) and against the defendant, Anita Ungab-Valeroso ordering the latter: 1) To have the property, OCT No. (P-41)-1,550, partitioned for her to retain only one-seventh (1/7) share; another one-seventh (1/7) to Felix Ungab and the remaining 5/7 to the heirs of Simeona, Eugenia, Lorenzo, Lazaro, and Margarito, all surnamed Ungab; 2) To reimburse Amancia Ungab-Grado and Espenila Ungab Jaictin the sum of P24,000.00 for their shares for three (3) years at a rate of P2,000.00 per harvest in every three (3) months; the sum of P24,000.00 for plaintiff Felix Ungab and another P24,000.00 for Rusticina Ungab-Tamala; 3) To pay plaintiffs attorney’s fees and appearance fees of P30,000.00.

SO ORDERED.8 Petitioners elevated the case to the Court of Appeals, which affirmed the trial court’s decision but deleted the award of attorney’s fees. It held there is evidence showing that the land under OCT No. (P-41)-1,550 was owned in common by the parties, and that Anita is estopped by her own act of g the Affidavit of Acknowledgment dated August 4, 1960 from denying the co-ownership. The dispositive portion of the decision dated September 19, 2003 of the Court of Appeals states: WHEREFORE, premises considered, the decision dated December 20, 1999, of the Regional Trial Court of Iligan City, Twelfth Judicial Region, Branch 3, in Civil Case No. 4048 is hereby AFFIRMED with MODIFICATION as to attorney’s fees, the award thereof is deleted. Costs against the appellants. SO ORDERED.9 Petitioners moved for reconsideration but it was denied in the Resolution dated March 2, 2004. Petitioners now come before us raising the following issues: I. WHETHER OR NOT RESPONDENTS ARE CO-OWNERS OF THE PARCEL OF LAND COVERED BY OCT No. (P-41)-1,550; II. WHETHER OR NOT RESPONDENTS’ SUIT FOR PARTITION IN THE COURT BELOW IS LEGALLY PROPER.10 The main issue before us is: Did the Court of Appeals commit a reversible error of law which merits review by this Court under Rule 45 of the Rules of Court? We rule in the negative. Petitioners point that the property was ed in the name of Timoteo. They assert that by the law of intestate succession, Anita, being the sole heir of Timoteo, is the sole owner of the land. Petitioners maintain that respondents could not base their claim on Timoteo’s affidavit dated March 13, 1939 because this referred to a different parcel of land. Considering that the description of the property in the OCT and in Timoteo’s affidavit differed, petitioners maintain that respondents bear the burden of proving that these lots in the affidavit are the same as those under OCT No. (P-41)-1,550. However, according to petitioners, respondents failed to discharge this burden. Respondents counter that the case is not about succession. They are not claiming as heirs of Timoteo, but as his co-owners. They assert that where one does not have any rightful claim over real property, the Torrens system of registration can confirm or record nothing. They claim that the land was already governed by a state of co-ownership even before the title was issued. According to respondents, this fact is shown by the Affidavit of Acknowledgment signed by Anita herself.

At the outset, we agree that the instant case does not involve successional rights as correctly pointed out by respondents, who are claiming an alleged right of co-ownership existing prior to the issuance of the land title in the name of Timoteo. The threshold issue is whether respondents are truly co-owners of the land. The records lack evidence sufficiently showing that the land covered by Homestead Application No. 218565 referred to in the Affidavit of Timoteo is the same land covered by OCT No. (P-41)-1,550 which originated from Homestead Patent No. V-4777. The records do not show whether Homestead Application No. 218565 was the one granted in Homestead Patent No. V-4777. The court cannot just fill in the deficiency in the evidence submitted by the concerned parties. We note, however, that even without the Affidavit of Timoteo, there is still evidence on record proving that the respondents and Timoteo indeed own the land in common. For one, there is the Affidavit of Acknowledgment dated August 4, 1960. Petitioners contend that respondents cannot use the Affidavit of Acknowledgment signed by Anita and her mother as Anita was misled in g it. A question involving the due execution of the Affidavit of Acknowledgment would require an inquiry into the appreciation of evidence by the trial court, a matter which this Court cannot do in a petition for review on certiorari under Rule 45. 11 The truth or falsehood of the Affidavit of Acknowledgment is a question of fact, of which this Court cannot take cognizance.12 Moreover, the Affidavit of Acknowledgment, being a notarized document, enjoys the presumption of regularity.13 Petitioners’ mere allegation that Anita was misled by her mother into g the affidavit could not overcome this presumption. Petitioners claim that by respondents’ failure to execute the judgment within the ten-year prescription period, the judgment had prescribed. It could not be used to convey any right. This claim, in our view, is unmeritorious. When the parties started sharing the proceeds of the land, they had in effect partially executed the compromise agreement and the judgment in Civil Case No. II-74. Such partial execution weighs heavily as evidence that they agreed on the co-ownership arrangement. Note also that the judgment did not explicitly order the partition of the land itself, but merely identified the rights to and respective shares of the parties in said land. Petitioners argue that the co-ownership was already extinguished because the Civil Code provides that an agreement to keep a thing undivided shall not exceed ten years. Indeed, the law limits the term of a co-ownership to ten years, but this term limit may nevertheless be extended. 14 The action to reconvey does not prescribe so long as the property stands in the name of the trustee. To allow prescription would be tantamount to allowing a trustee to acquire title against his principal and true owner.15 Moreover, as properly held by the trial and appellate courts, the execution of the Affidavit of Acknowledgment and the compromise agreement established an express trust wherein the respondents, as trustors, reposed their confidence on petitioner Anita and her mother, as trustees, that they will hold the land subject of the co-ownership. There are no particular words required in the creation of an express trust, it being sufficient that a trust is clearly intended. 16 This express trust is shown in the two documents. Express trusts do not prescribe except when the trustee repudiates the trust.17 Petitioners contend that an affidavit of acknowledgment is not one of the modes of acquiring ownership recognized under the Civil Code. They cite Acap v. Court of Appeals,18 where we held that

a stranger to succession cannot conclusively claim ownership over a lot on the sole basis of a waiver document which does not cite the elements of any of the derivative modes of acquiring ownership. But we find that the ruling in Acap is not applicable to this case. In Acap, the claim of a right over the property was based on a "declaration of heirship and waiver of rights," and a notice of adverse claim. Therein we held that the "declaration of heirship and waiver of rights" relates to an abdication of a right in favor of other persons who are co-heirs in the succession. A stranger to a succession cannot conclusively claim ownership over the property on the sole basis thereof. We also held that a notice of adverse claim is nothing but a notice of claim adverse to the ed owner, the validity of which is yet to be established in court. Hence, the "declaration of heirship and waiver of rights" and a notice of adverse claim did not sufficiently show how a stranger to the succession acquired ownership of the property. In the present case, the Affidavit of Acknowledgment and the compromise agreement were presented not to show how respondents acquired their rights over the property but as proof that their rights therein exist. WHEREFORE, the petition is DENIED for lack of merit. The Decision dated September 19, 2003 and the Resolution dated March 2, 2004 of the Court of Appeals in CA-G.R. CV No. 68895 are AFFIRMED. Costs against petitioners. SO ORDERED.

8. RAMIREZ VS RAMIREZ G.R. No. L-22621

September 29, 1967

JOSE MARIA RAMIREZ, plaintiff-appellee, vs. JOSE EUGENIO RAMIREZ, RITA D. RAMIREZ, BELEN T. RAMIREZ, DAVID MARGOLIES, MANUEL UY and SONS, INC., BANK OF THE PHILIPPINE ISLANDS, in its capacity as judicial of the Testate Estate of the late Jose Vivencio Ramirez, defendants-appellants, ANGELA M. BUTTE, defendant-appellee. Sycip, Salazar, Luna and Associates for plaintiff-appellee. Ramirez and Ortigas for defendants-appellants.

CONCEPCION, C.J.: Appeal by the defendants from a decision of the Court of First Instance of Manila. Plaintiff, Jose Maria Ramirez, brought this action1 against defendants Jose Eugenio Ramirez, Rita D. Ramirez, Belen T. Ramirez, David Margolies, Manuel Uy & Sons, Inc., the Estate of the late Jose Vivencio Ramirez represented by its judicial , the Bank of the Philippine Islands, and Angela M. Butte — hereinafter referred to collectively as defendants — for the partition of a parcel of land situated at the Northwestern corner of Escolta street and Plaza Sta. Cruz, Manila — otherwise known as Lot 1 of Block 2120 of the Cadastral Survey of Manila and more particularly described in Transfer Certificate of Title No. 53946 of the of Deeds for said City — and belonging pro indiviso to both parties, one-sixth (1/6) to the plaintiff and five-sixths (5/6) to the defendants. Manuel Uy & Sons expressed its conformity to the partition, "if the same can be done without great prejudice to the interests of the parties." Defendant Butte agreed to the partition prayed for. The other defendants objected to the physical partition of the property in question, upon the theory that said partition is "materially and legally" impossible and "would work great harm and prejudice to the co-owners." By agreement of the parties the lower Court referred the matter to a Commission composed of: (1) Delfin Gawaran, Deputy Clerk of said court, as Chairman, (2) Artemio U. Valencia, President of the Manila Board of Realtors, as commissioner for plaintiff, and (3) Ramon F. Cuervo, President of the Perpetual Investment Corporation, Inc., as commissioner for defendants, to determine whether the property is susceptible of partition, and submit a plan therefor, if feasible, as well as to report thereon. Subsequently, the commissioners submitted their individual reports with their respective plans for the segregation of plaintiff's share.

After due hearing, the Court rendered a decision declaring that plaintiff is entitled to the segregation of his share, and directing that the property be partitioned in accordance with the plan submitted by commissioner Valencia, and that the expenses incident thereto be paid by both parties proportionately. Hence, this appeal by, the defendants, except Mrs. Butte. Appellants maintain that the lower court has erred: 1) in holding that said property is legally susceptible of physical division; 2) in accepting the recommendation of commissioner Valencia, instead of that of commissioner Cuervo, or a proposal made by the very plaintiff; and 3) in not ordering that the incidental expenses be borne exclusively by him. We find no merit in the appeal. With respect to the first alleged error, it is urged that a physical division of the property will cause "inestimable damage" to the interest of the co-owners. No evidence, however, has been introduced, or sought to be introduced, in of this allegation. Moreover, the same is predicated upon the assumption that a real estate suitable for commercial purposes — such as the one herein sought to be partitioned — is likely to suffer a proportionately great diminution in value when its area becomes too small. But, then, if plaintiff's share of 260.26 square meters were segregated from the property in question, there would still remain a lot of 1,301.34 square meters for appellants herein and Mrs. Butte. A real estate of this size, in the very heart of Manila, is not, however, inconsequential, in comparison to that of the present property of the community. In other words, we do not believe that its value would be impaired, on of the segregation of plaintiff's share, to such an extent as to warrant the conclusion that the property is indivisible. Appellants argue that, instead of making the aforementioned segregation, plaintiff's share should be sold to them. In of this pretense, they cite the provision of Article 495 of our Civil Code, to the effect that: . . . Notwithstanding the provisions of the preceding article, the co-owners cannot demand a physical division of the thing owned in common, when to do so would render it unserviceable for the use for which it is intended. But the co-ownership may be terminated in accordance with article 498. They apparently assume, once again, that the alleged "inestimable damage" to be suffered by the property, if plaintiff's share were segregated, is equivalent to rendering it "unserviceable for the use for which it is intended." Independently of the fact that the minor premise of this syllogism — the alleged "inestimable damage" — has not been established, the conclusion drawn by appellants does not follow necessarily. Indeed, the record shows that there are two (2) buildings on the land in question, namely: 1) a two-storey commercial building — known as "Sta. Cruz Building" — abutting on the one (1) side, 2 on the Escolta, and, on the other 3 on Plaza Santa Cruz; and 2) a small twostorey residential building, on the Northwestern end of the lot, and behind the first building, ading the Estero de la Reina, which constitutes the Southwestern boundary of the property. There is nothing to show that, after segregating plaintiff's share, the buildings left on the remaining 1,301.34 square meters, representing defendants' share, would be unserviceable, either for commercial or for residential purposes. On the contrary, it seems obvious that plaintiff would not insist upon the partition prayed for, if his share 4 were unserviceable for either — particularly the commercial — purpose. In fact, every one of the aforementioned commissioners,including the one representing defendants herein, recommended the segregation of plaintiff's share. The commissioners merely failed to agree on the precise configuration thereof.

This brings us to the second issue raised by appellants: whether the lower court should have adopted the plan submitted by their own commissioner, or "in not taking into consideration," at least, a proposal made by plaintiff herein. In this connection, it appears that said commissioner 5 recommended that plaintiff's share be given a frontage of 6.14 lineal meters at Plaza Sta. Cruz, whereas the commissioner for the Court 6 favored a frontage of 12.66 square meters at said Plaza; that defendants' main objection to the plan recommended by commissioner Valencia 7 and adopted by the lower court, is that it left behind the portion awarded to plaintiff, a lot of 169 square meters, which would have to be divided among the defendants, should they later wish to have their individual shares segregated; and that, in order to offset this objection, plaintiff expressed — in one of the pre-trials held in the lower court and in order to "facilitate early termination" of the case — the willingness "to buy from the other co-owners the remaining portion of the land behind his lot at P1,000 per square meter." 1awphîl.nèt

The record does not show that this offer of the plaintiff had not been "taken into consideration" by the lower court. Moreover, defendants had not accepted it. And neither do they accept it now, for they would want the plaintiff to pay a price higher than that offered by him. Upon the other hand, the disadvantage resulting to the defendants from the existence of said lot of 169 square meters, behind that awarded to the plaintiff, is offset by the fact that the remaining portion of the land in question — representing defendants' collective share — has, in addition to a frontage of around 40 meters on Plaza Santa Cruz, a frontage of 24.13 meters on Escolta Street, which apart from being, ittedly, the most valuable one, is totally denied to the plaintiff. Then, again the Cuervo plan giving plaintiff a 6.14 meters frontage of Plaza Sta. Cruz, goes all the way down to the Western end of the property, the Estero de la Reina, and would require a partition of the residential building, on that part of the property in question, which the very plaintiff says is indivisible, because it would render said building "unserviceable for the purpose for which it is intended." 8 As regards the last alleged error, it is obvious that the segregation of plaintiff's share inures to the benefit not only of the plaintiff, but, also, of the defendants, and that both should, consequently, defray the incidental expenses. WHEREFORE, the decision appealed from is hereby the costs of this instance against herein defendants-appellants. It is so ordered.

9. AGUILAR VS CA (DIGEST)

AGUILAR v. CA- Co-ownership Any of the Co-owners may demand the sale of the house and lot at any time and the other cannot object to such demand; thereafter the proceeds of the sale shall be divided equally according to their respective interests.

FACTS: Petitioner Vergilio and respondent Senen bought a house and lot in Paraňaque where their father could spend and enjoy his remaining years in a peaceful neighborhood. They initially agreed that Vergilio will get 2/3 and Senen will get 1/3; but later they agreed on equal shares. Senen was left in the said lot to take care of their father since Vergilio’s family was in Cebu. After their father’s death petitioner demanded from private respondent that the latter vacate the house and that the property be sold and proceeds thereof divided among them but the latter refused. Petitioner then filed to compel the sale of the property. The chunk of the issue tackled by the courts was regarding the pretrial. Respondent filed a motion to cancel Pre-trial since the counsel had to accompany his wife in Dumaguete City where she would be a principal sponsor in a wedding. CFI denied the motion; and the pre-trial proceeded on the scheduled date. The respondents did not appear thus they were declared in default. The trial went on ex parte without the respondent and held that the property should be sold to a third party and that the proceeds be distributed to the parties; in addition respondent was made to pay rent from the time the action was filed. Respondents appealed this and the decision was reversed by the CA saying that the TC erred in declaring respondents in default; the case was then remanded to the trial court. Hence this appeal.

ISSUE: A) W/N CA erred (1) in holding that the motion of respondent through counsel to cancel the pre-trial was dilatory in character and (2) in remanding the case to the trial court for pre-trial and trial? ISSUE RELEVANT TO PROPERTY:

B) W/N trial court was correct with regards to the sale and rent?

RULING: A) YES, CA erred in granting the respondents motion and remanding the case. The law is clear that the appearance of parties at the pretrial is mandatory. A party who fails to appear at a pre-trial conference may be non-suited or considered as in default. It is the discretion of the court to grant the motion if it sees that the reason for the cancelation of the same would be reasonable. SC found that the reason for the cancelation of the pre-trial was insufficient and that the trial court was not in grave abuse of discretion when they denied it. B) YES, with a few modification. Petitioner and respondents are co-owners of subject house and lot in equal shares; either one of them may demand the sale of the house and lot at any time and the other cannot object to such demand; thereafter the proceeds of the sale shall be divided equally according to their respective interests. BASIS: Article 494 of the Civil Code provides that no co-owner shall be obliged to remain in the coownership, and that each co-owner may demand at any time partition of the thing owned in common insofar as his share is concerned. Corollary to this rule, Art. 498 of the Code states that whenever the thing is essentially indivisible and the co-owners cannot agree that it be allotted to one of them who shall indemnify the others, it shall be sold and its proceeds accordingly distributed.

SC held that ½ of the proceeds should go to the petitioner and the remainder to the respondent (1,200 each.) Also rent was awarded 1,200 pesos per month with legal interest from the time the trial court ordered the respondent to vacate, for the use and enjoyment of the other half of the property. BASIS: When petitioner filed an action to compel the sale of the property and the trial court granted the petition and ordered the ejectment of respondent, the co-ownership was deemed terminated and the right to enjoy the possession tly also ceased.

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

BELLOSILLO, J.: This is a petition for review on certiorari seeking to reverse and set aside the Decision of the Court of Appeals in CA-GR CV No. 03933 declaring null and void the orders of 23 and 26 April, 1979, the judgment by default of 26 July 1979, and the order of 22 October 1979 of the then Court of First Instance of Rizal, Pasay City, Branch 30, and directing the trial court to set the case for pre-trial conference. Petitioner Virgilio and respondent Senen are brothers; Virgilio is the youngest of seven (7) children of the late Maximiano Aguilar, while Senen is the fifth. On 28 October 1969, the two brothers purchased a house and lot in Parañaque where their father could spend and enjoy his remaining years in a peaceful neighborhood. Initially, the brothers agreed that Virgilio's share in the co-ownership was two-thirds while that of Senen was one-third. By virtue of a written memorandum dated 23 February 1970, Virgilio and Senen agreed that henceforth their interests in the house and lot should be equal, with Senen assuming the remaining mortgage obligation of the original owners with the Social Security System (SSS) in exchange for his possession and enjoyment of the house together with their father. Since Virgilio was then disqualified from obtaining a loan from SSS, the brothers agreed that the deed of sale would be executed and the title ed in the meantime in the name of Senen. It was further agreed that Senen would take care of their father and his needs since Virgilio and his family were staying in Cebu. After Maximiano Aguilar died in 1974, petitioner demanded from private respondent that the latter vacate the house and that the property be sold and proceeds thereof divided among them. Because of the refusal of respondent to give in to petitioner's demands, the latter filed on 12 January 1979 an action to compel the sale of the house and lot so that the they could divide the proceeds between them. In his complaint, petitioner prayed that the proceeds of the sale, be divided on the basis of two-thirds (2/3) in his favor and one-third (1/3) to respondent. Petitioner also prayed for monthly rentals for the use of the house by respondent after their father died.

In his answer with counterclaim, respondent alleged that he had no objection to the sale as long as the best selling price could be obtained; that if the sale would be effected, the proceeds thereof should be divided equally; and, that being a co-owner, he was entitled to the use and enjoyment of the property. Upon issues being ed, the case was set for pre-trial on 26 April 1979 with the lawyers of both parties notified of the pre-trial, and served with the pre-trial order, with private respondent executing a special power of attorney to his lawyer to appear at the pre-trial and enter into any amicable settlement in his behalf. 1 On 20 April 1979, Atty. Manuel S. Tonogbanua, counsel for respondent, filed a motion to cancel pretrial on the ground that he would be accompanying his wife to Dumaguete City where she would be a principal sponsor in a wedding. On 23 April 1979, finding the reasons of counsel to be without merit, the trial court denied the motion and directed that the pre-trial should continue as scheduled. When the case was called for pre-trial as scheduled on 26 April 1979, plaintiff and his counsel appeared. Defendant did not appear; neither his counsel in whose favor he executed a special power of attorney to represent him at the pre-trial. Consequently, the trial court, on motion of plaintiff, declared defendant as in default and ordered reception of plaintiff's evidence ex parte. On 7 May 1979, defendant through counsel filed an omnibus motion to reconsider the order of default and to defer reception of evidence. The trial court denied the motion and plaintiff presented his evidence. On 26 July 1979, rendering judgment by default against defendant, the trial court found him and plaintiff to be co-owners of the house and lot, in equal shares on the basis of their written agreement. However, it ruled that plaintiff has been deprived of his participation in the property by defendant's continued enjoyment of the house and lot, free of rent, despite demands for rentals and continued maneuvers of defendants, to delay partition. The trial court also upheld the right of plaintiff as coowner to demand partition. Since plaintiff could not agree to the amount offered by defendant for the former's share, the trial court held that this property should be sold to a third person and the proceeds divided equally between the parties. The trial court likewise ordered defendant to vacate the property and pay plaintiff P1,200.00 as rentals 2 from January 1975 up to the date of decision plus interest from the time the action was filed. On 17 September 1979, defendant filed an omnibus motion for new trial but on 22 October 1979 the trial court denied the motion. Defendant sought relief from the Court of Appeals praying that the following orders and decision of the trial court be set aside: (a) the order of 23 April 1970 denying defendants motion for postponement of the pre-trial set on 26 April 1979; (b) the order of 26 April 1979 declaring him in default and authorizing plaintiff to present his evidenceex-parte; (e) the default judgment of 26 July 1979; and, (d) the order dated 22 October 1979 denying his omnibus motion for new trial. On 16 October 1986, the Court of Appeals set aside the order of the trial court of 26 April 1979 as well as the assailed judgment rendered by default., The appellate court found the explanation of

counsel for defendant in his motion to cancel pre-trial as satisfactory and devoid of a manifest intention to delay the disposition of the case. It also ruled that the trial court should have granted the motion for postponement filed by counsel for defendant who should not have been declared as in default for the absence of his counsel. Petitioner now comes to us alleging that the Court of Appeals erred (1) in not holding that the motion of defendant through counsel to cancel the pre-trial was dilatory in character and (2) in remanding the case to the trial court for pre-trial and trial. The issues to be resolved are whether the trial court correctly declared respondent as in default for his failure to appear at the pre-trial and in allowing petitioner to present his evidence ex-parte, and whether the trial court correctly rendered the default judgment against respondent. We find merit in the petition. As regards the first issue, the law is clear that the appearance of parties at the pre-trial is mandatory. 3 A party who fails to appear at a pre-trial conference may be non-suited or considered as in default. 4 In the case at bar, where private respondent and counsel failed to appear at the scheduled pretrial, the trial, court has authority to declare respondent in default. 5 Although respondent's counsel filed a motion to postpone pre-trial hearing, the grant or denial thereof is within the sound discretion of the trial court, which should take into two factors in the grant or denial of motions for postponement, namely: (a) the reason for the postponement and (b) the merits of the case of movant. 6 In the instant case, the trial court found the reason stated in the motion of counsel for respondent to cancel the pre-trial to be without merit. Counsel's explanation that he had to go to by boat as early as 25 March 1979 to fetch his wife and accompany her to a wedding in Dumaguete City on 27 April 1979 where she was one of the principal sponsors, cannot be accepted. We find it insufficient to justify postponement of the pre-trial, and the Court of Appeals did not act wisely in overruling the denial. We sustain the trial court and rule that it did not abuse its discretion in denying the postponement for lack of merit. Certainly, to warrant a postponement of a mandatory process as pretrial would require much more than mere attendance in a social function. It is time indeed we emphasize that there should be much more than mere perfunctory treatment of the pre-trial procedure. Its observance must be taken seriously if it is to attain its objective, i.e., the speedy and inexpensive disposition of cases. Moreover, the trial court denied the motion for postponement three (3) days before the scheduled pre-trial. If indeed, counsel for respondent could not attend the pre-trial on the scheduled date, respondent at least should have personally appeared in order not to be declared as in default. But, since nobody appeared for him, the order of the trial court declaring him as in default and directing the presentation of petitioner's evidence ex parte was proper. 7 With regard to the merits of the judgment of the trial court by default, which respondent appellate court did not touch upon in resolving the appeal, the Court holds that on the basis of the pleadings of the parties and the evidence presented ex parte, petitioner and respondents are co-owners of subject house and lot in equal shares; either one of them may demand the sale of the house and lot at any time and the other cannot object to such demand; thereafter the proceeds of the sale shall be divided equally according to their respective interests.

Private respondent and his family refuse to pay monthly rentals to petitioner from the time their father died in 1975 and to vacate the house so that it can be sold to third persons. Petitioner alleges that respondent's continued stay in the property hinders its disposal to the prejudice of petitioner. On the part of petitioner, he claims that he should be paid two-thirds (2/3) of a monthly rental of P2,400.00 or the sum of P1,600.00. In resolving the dispute, the trial court ordered respondent to vacate the property so that it could be sold to third persons and the proceeds divided between them equally, and for respondent to pay petitioner one-half (1/2) of P2,400.00 or the sum of P1,200.00 as monthly rental, conformably with their stipulated sharing reflected in their written agreement. We uphold the trial court in ruling in favor of petitioner, except as to the effectivity of the payment of monthly rentals by respondent as co-owner which we here declare to commence only after the trial court ordered respondent to vacate in accordance with its order of 26 July 1979. Article 494 of the Civil Code provides that no co-owner shall be obliged to remain in the coownership, and that each co-owner may demand at any time partition of the thing owned in common insofar as his share is concerned. Corollary to this rule, Art. 498 of the Code states that whenever the thing is essentially, indivisible and the co-owners cannot agree that it be, allotted to one of them who shall indemnify the others, it shall be sold and its proceeds accordingly distributed. This is resorted to (1) when the right to partition the property is invoked by any of the co-owners but because of the nature of the property it cannot be subdivided or its subdivision would prejudice the interests of the co-owners, and (b) the co-owners are not in agreement as to who among them shall be allotted or assigned the entire property upon proper reimbursement of the co-owners. In one case, 8 this Court upheld the order of the trial court directing the holding of a public sale of the properties owned in common pursuant to Art. 498 of the Civil Code. However, being a co-owner respondent has the right to use the house and lot without paying any compensation to petitioner, as he may use the property owned in common long as it is in accordance with the purpose for which it is intended and in a manner not injurious to the interest of the other coowners. 9 Each co-owner of property heldpro indiviso exercises his rights over the whole property and may use and enjoy the same with no other limitation than that he shall not injure the interests of his coowners, the reason being that until a division is made, the respective share of each cannot be determined and every co-owner exercises, together with his co-participants t ownership over the pro indivisoproperty, in addition to his use and enjoyment of the same. 10 Since petitioner has decided to enforce his right in court to end the co-ownership of the house and lot and respondent has not refuted the allegation that he has been preventing the sale of the property by his continued occupancy of the premises, justice and equity demand that respondent and his family vacate the property so that the sale can be effected immediately. In fairness to petitioner, respondent should pay a rental of P1,200.00 per month, with legal interest; from the time the trial court ordered him to vacate, for the use and enjoyment of the other half of the property appertaining to petitioner. When petitioner filed an action to compel the sale of the property and the trial court granted the petition and ordered the ejectment of respondent, the co-ownership was deemed terminated and the right to enjoy the possession tly also ceased. Thereafter, the continued stay of respondent and his family in the house prejudiced the interest of petitioner as the property should have been sold

and the proceeds divided equally between them. To this extent and from then on, respondent should be held liable for monthly rentals until he and his family vacate. WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of Appeals dated 16 October 1986 is REVERSED and SET ASIDE. The decision of the trial court in Civil Case No. 69.12P dated 16 July 1979 is REINSTATED, with the modification that respondent Senen B. Aguilar is ordered to vacate the premises in question within ninety (90) days from receipt of this and to pay petitioner Virgilio B. Aguilar a monthly rental of P1,200.00 with interest at the legal rate from the time he received the decision of the trial court directing him to vacate until he effectively leaves the premises. The trial court is further directed to take immediate steps to implement this decision conformably with Art. 498 of the Civil Code and the Rules of Court. This decision is final and executory. SO ORDERED.

10. Quintos Vs. NICOLAS (DIGEST) Civil Law: Property G.R. No. 210252 June 16, 2014 Partition; Quieting; Res Judicata; Art. 494 (NCC) as an exception to Rule 17, Sec. 3 of the Rules of Court VILMA QUINTOS vs. PELAGIA I. NICOLAS Petitioners and respondents are siblings. In 1999, both their parents ed away, leaving to their 10 children ownership over the subject property. An action for partition was subsequently brought before the RTC. However, for failure of the parties and their counsels to appear despite due notice, the case was dismissed. Thereafter, the respondent siblings executed a Deed of Adjudication to transfer the property in favor of the 10 siblings. As a result, the old TCT was cancelled and the Registry of Deeds issued a new one. The respondents subsequently sold their 7/10 undivided share in favor of the spouses Candelario. The petitioners filed a complaint for Quieting of Title and Damages against the respondents. Respondents countered that petitioners’ cause of action was already barred by estoppel when sometime in 2006, one of petitioners offered to buy the 7/10 undivided share of the respondent siblings. They point out that this is an ission on the part of petitioners that the property is not entirely theirs. In addition, they claimed that Bienvenido and Escolastica Ibarra mortgaged the property but because of financial constraints, respondent spouses Candelario had to redeem the property in their behalf. Not having been repaid by Bienvenido and Escolastica, the Candelarios accepted from their co-respondents their share in the subject property as payment. Lastly, respondents sought, by way of counterclaim, the partition of the property. The RTC dismissed the petitioner’s complaint, ruling that the respondent siblings were entitled to their respective shares and that the subsequent transfer of interest in favor of the respondent spouses Candelario was upheld. Likewise, the court ordered the partition of the subject lots between the herein plaintiffs and the defendants-spouses Candelarios. CA affirmed the decision of the RTC. ISSUES: 1. Whether or not the petitioners were able to prove ownership over the property; 2. Whether or not the respondents’ counterclaim for partition is already barred by laches or res judicata; and

3. Whether or not the CA was correct in approving the subdivision agreement as basis for the partition of the property. RULING: The petition is meritorious in part. 1. Petitioners were not able to prove equitable title or ownership over the property For an action to quiet title to prosper, two indispensable requisites must concur, namely: (1) the plaintiff or complainant has a legal or equitable title to or interest in the real property subject of the action; and (2) the deed, claim, encumbrance, or proceeding claimed to be casting cloud on the title must be shown to be in fact invalid or inoperative despite its prima facie appearance of validity or efficacy. In the case at bar, the CA correctly observed that petitioners’ cause of action must necessarily fail mainly in view of the absence of the first requisite. Their alleged open, continuous, exclusive, and uninterrupted possession of the subject property is belied by the fact that respondent siblings, in 2005, entered into a Contract of Lease with the Avico Lending Investor Co. over the subject lot without any objection from the petitioners. The cardinal rule is that bare allegation of title does not suffice. The burden of proof is on the plaintiff to establish his or her case by preponderance of evidence 2. The counterclaim for partition is not barred by prior judgment Dismissal with prejudice under Rule 17, Sec. 3 of the Rules of Court cannot defeat the right of a co-owner to ask for partition at any time, provided that there is no actual adjudication of ownership of shares yet. Pertinent hereto is Article 494 of the Civil Code. Between dismissal with prejudice under Rule 17, Sec. 3 and the right granted to coowners under Art. 494 of the Civil Code, the latter must prevail. To construe otherwise would diminish the substantive right of a co-owner through the promulgation of procedural rules. Substantive law cannot be amended by a procedural rule. This further finds in Art. 496 of the New Civil Code. Thus, for the Rules to be consistent with statutory provisions, We hold that Art. 494, as cited, is an exception to Rule 17, Sec. 3 of the Rules of Court to the effect that even if the order of dismissal for failure to prosecute is silent on whether or not it is with prejudice, it shall be deemed to be without prejudice. In the case at bar, the co-ownership, as determined by the trial court, is still subsisting 30-70 in favor of respondent spouses Candelario. Consequently, there is no legal bar preventing herein respondents from praying for the partition of the property through counterclaim.

3. The CA erred in approving the Agreement for Subdivision Agreement of Subdivision allegedly executed by respondent spouses Candelario and petitioners cannot serve as basis for partition, for, as stated in the pre-trial order, herein respondents itted that the agreement was a falsity and that petitioners never took part in preparing the same. It, therefore, lacked the essential requisite of consent. WHEREFORE, premises considered, the petition is hereby PARTLY GRANTED. The assailed Decision and Resolution of the Court of Appeals in CA-G.R. CV No. 98919 dated July 8, 2013 and November 22, 2013, respectively, are hereby AFFIRMED with MODIFICATION. The case is hereby REMANDED to the RTC, Branch 68 in Camiling, Tarlac for purposes of partitioning the subject property in accordance with Rule 69 of the Rules of Court.

11. Padilla vs Magdua (FULL TEXT) (iba iba yung topics ng digests regarding this case, may oblicon and civil procedure, so I guess read full text nalang para makuha mo yung topic regarding property) G.R. No. 176858

September 15, 2010

HEIRS OF JUANITA PADILLA, represented by CLAUDIO PADILLA, Petitioners, vs. DOMINADOR MAGDUA, Respondent. DECISION CARPIO, J.: The Case Before the Court is a petition for review on certiorari 1 assailing the Orders dated 8 September 20062 and 13 February 20073 of the Regional Trial Court (RTC) of Tacloban City, Branch 34, in Civil Case No. 2001-10-161. The Facts Juanita Padilla (Juanita), the mother of petitioners, owned a piece of land located in San Roque, Tanauan, Leyte. After Juanita’s death on 23 March 1989, petitioners, as legal heirs of Juanita, sought to have the land partitioned. Petitioners sent word to their eldest brother Ricardo Bahia (Ricardo) regarding their plans for the partition of the land. In a letter dated 5 June 1998 written by Ricardo addressed to them, petitioners were surprised to find out that Ricardo had declared the land for himself, prejudicing their rights as co-heirs. It was then discovered that Juanita had allegedly executed a notarized Affidavit of Transfer of Real Property4 (Affidavit) in favor of Ricardo on 4 June 1966 making him the sole owner of the land. The records do not show that the land was ed under the Torrens system. On 26 October 2001, petitioners filed an action with the RTC of Tacloban City, Branch 34, for recovery of ownership, possession, partition and damages. Petitioners sought to declare void the sale of the land by Ricardo’s daughters, Josephine Bahia and Virginia Bahia-Abas, to respondent Dominador Magdua (Dominador). The sale was made during the lifetime of Ricardo. Petitioners alleged that Ricardo, through misrepresentation, had the land transferred in his name without the consent and knowledge of his co-heirs. Petitioners also stated that prior to 1966, Ricardo had a house constructed on the land. However, when Ricardo and his wife Zosima separated, Ricardo left for Inasuyan, Kawayan, Biliran and the house was leased to third parties. Petitioners further alleged that the signature of Juanita in the Affidavit is highly questionable because on 15 May 1978 Juanita executed a written instrument stating that she would be leaving behind to her children the land which she had inherited from her parents.

Dominador filed a motion to dismiss on the ground of lack of jurisdiction since the assessed value of the land was within the jurisdiction of the Municipal Trial Court of Tanauan, Leyte. In an Order dated 20 February 2006,5 the RTC dismissed the case for lack of jurisdiction. The RTC explained that the assessed value of the land in the amount of P590.00 was less than the amount cognizable by the RTC to acquire jurisdiction over the case.6 Petitioners filed a motion for reconsideration. Petitioners argued that the action was not merely for recovery of ownership and possession, partition and damages but also for annulment of deed of sale. Since actions to annul contracts are actions beyond pecuniary estimation, the case was well within the jurisdiction of the RTC. Dominador filed another motion to dismiss on the ground of prescription. In an Order dated 8 September 2006, the RTC reconsidered its previous stand and took cognizance of the case. Nonetheless, the RTC denied the motion for reconsideration and dismissed the case on the ground of prescription pursuant to Section 1, Rule 9 of the Rules of Court. The RTC ruled that the case was filed only in 2001 or more than 30 years since the Affidavit was executed in 1966. The RTC explained that while the right of an heir to his inheritance is imprescriptible, yet when one of the co-heirs appropriates the property as his own to the exclusion of all other heirs, then prescription can set in. The RTC added that since prescription had set in to question the transfer of the land under the Affidavit, it would seem logical that no action could also be taken against the deed of sale executed by Ricardo’s daughters in favor of Dominador. The dispositive portion of the order states: WHEREFORE, premises considered, the order of the Court is reconsidered in so far as the pronouncement of the Court that it has no jurisdiction over the nature of the action. The dismissal of the action, however, is maintained not by reason of lack of jurisdiction but by reason of prescription. SO ORDERED.7 Petitioners filed another motion for reconsideration which the RTC denied in an Order dated 13 February 2007 since petitioners raised no new issue. Hence, this petition. The Issue The main issue is whether the present action is already barred by prescription. The Court’s Ruling Petitioners submit that the RTC erred in dismissing the complaint on the ground of prescription. Petitioners insist that the Affidavit executed in 1966 does not conform with the requirement of sufficient repudiation of co-ownership by Ricardo against his co-heirs in accordance with Article 494 of the Civil Code. Petitioners assert that the Affidavit became part of public records only because it was kept by the Provincial Assessor’s office for real property tax declaration purposes. However, such cannot be contemplated by law as a record or registration affecting real properties. Petitioners insist that the Affidavit is not an act of appropriation sufficient to be deemed as constructive notice to

an adverse claim of ownership absent a clear showing that petitioners, as co-heirs, were notified or had knowledge of the Affidavit issued by their mother in Ricardo’s favor. Respondent Dominador, on the other hand, maintains that Juanita, during her lifetime, never renounced her signature on the Affidavit or interposed objections to Ricardo’s possession of the land, which was open, absolute and in the concept of an owner. Dominador contends that the alleged written instrument dated 15 May 1978 executed by Juanita years before she died was only made known lately and conveys the possibility of being fabricated. Dominador adds that the alleged ‘highly questionable signature’ of Juanita on the Affidavit was only made an issue after 35 years from the date of the transfer in 1966 until the filing of the case in 2001. As a buyer in good faith, Dominador invokes the defense of acquisitive prescription against petitioners. At the outset, only questions of law may be raised in a petition for review on certiorari under Rule 45 of the Rules of Court. The factual findings of the lower courts are final and conclusive and may not be reviewed on appeal except under any of the following circumstances: (1) the conclusion is grounded on speculations, surmises or conjectures; (2) the inference is manifestly mistaken, absurd or impossible; (3) there is grave abuse of discretion; (4) the judgment is based on a misapprehension of facts; (5) the findings of fact are conflicting; (6) there is no citation of specific evidence on which the factual findings are based; (7) the finding of absence of facts is contradicted by the presence of evidence on record; (8) the findings of the Court of Appeals are contrary to those of the trial court; (9) the Court of Appeals manifestly overlooked certain relevant and undisputed facts that, if properly considered, would justify a different conclusion; (10) the findings of the Court of Appeals are beyond the issues of the case; and (11) such findings are contrary to the issions of both parties.8 We find that the conclusion of the RTC in dismissing the case on the ground of prescription based solely on the Affidavit executed by Juanita in favor of Ricardo, the alleged seller of the property from whom Dominador asserts his ownership, is speculative. Thus, a review of the case is necessary. Here, the RTC granted the motion to dismiss filed by Dominador based on Section 1, Rule 9 of the Rules of Court which states: Section 1. Defenses and objections not pleaded. – Defenses and objections not pleaded either in a motion to dismiss or in the answer are deemed waived. However, when it appears from the pleadings or the evidence on record that the court has no jurisdiction over the subject matter, that there is another action pending between the same parties for the same cause, or that the action is barred by a prior judgment or by statute of limitations, the court shall dismiss the case. (Emphasis supplied) The RTC explained that prescription had already set in since the Affidavit was executed on 31 May 1966 and petitioners filed the present case only on 26 October 2001, a lapse of more than 30 years. No action could be taken against the deed of sale made in favor of Dominador without assailing the Affidavit, and the action to question the Affidavit had already prescribed. After a perusal of the records, we find that the RTC incorrectly relied on the Affidavit alone in order to dismiss the case without considering petitioners’ evidence. The facts show that the land was sold to Dominador by Ricardo’s daughters, namely Josephine Bahia and Virginia Bahia-Abas, during the lifetime of Ricardo. However, the alleged deed of sale was not presented as evidence and neither was it shown that Ricardo’s daughters had any authority from Ricardo to dispose of the land. No

cogent evidence was ever presented that Ricardo gave his consent to, acquiesced in, or ratified the sale made by his daughters to Dominador. In its 8 September 2006 Order, the RTC hastily concluded that Ricardo’s daughters had legal personality to sell the property: On the allegation of the plaintiffs (petitioners) that Josephine Bahia and Virginia Bahia-Abas had no legal personality or right to [sell] the subject property is of no moment in this case. It should be Ricardo Bahia who has a cause of action against [his] daughters and not the herein plaintiffs. After all, Ricardo Bahia might have already consented to or ratified the alleged deed of sale. 9 Also, aside from the Affidavit, Dominador did not present any proof to show that Ricardo’s possession of the land had been open, continuous and exclusive for more than 30 years in order to establish extraordinary acquisitive prescription.10 Dominador merely assumed that Ricardo had been in possession of the land for 30 years based on the Affidavit submitted to the RTC. The petitioners, on the other hand, in their pleading filed with the RTC for recovery of ownership, possession, partition and damages, alleged that Ricardo left the land after he separated from his wife sometime after 1966 and moved to another place. The records do not mention, however, whether Ricardo had any intention to go back to the land or whether Ricardo’s family ever lived there. Further, Dominador failed to show that Ricardo had the land declared in his name for taxation purposes from 1966 after the Affidavit was executed until 2001 when the case was filed. Although a tax declaration does not prove ownership, it is evidence of claim to possession of the land. Moreover, Ricardo and petitioners are co-heirs or co-owners of the land. Co-heirs or co-owners cannot acquire by acquisitive prescription the share of the other co-heirs or co-owners absent a clear repudiation of the co-ownership, as expressed in Article 494 of the Civil Code which states: Art. 494. x x x No prescription shall run in favor of a co-owner or co-heir against his co-owners or coheirs as long as he expressly or impliedly recognizes the co-ownership. Since possession of co-owners is like that of a trustee, in order that a co-owner’s possession may be deemed adverse to the cestui que trust or other co-owners, the following requisites must concur: (1) that he has performed unequivocal acts of repudiation amounting to an ouster of the cestui que trust or other co-owners, (2) that such positive acts of repudiation have been made known to the cestui que trust or other co-owners, and (3) that the evidence thereon must be clear and convincing.11 In the present case, all three requisites have been met. After Juanita’s death in 1989, petitioners sought for the partition of their mother’s land. The heirs, including Ricardo, were notified about the plan. Ricardo, through a letter dated 5 June 1998, notified petitioners, as his co-heirs, that he adjudicated the land solely for himself. Accordingly, Ricardo’s interest in the land had now become adverse to the claim of his co-heirs after repudiating their claim of entitlement to the land. In Generosa v. Prangan-Valera,12 we held that in order that title may prescribe in favor of one of the co-owners, it must be clearly shown that he had repudiated the claims of the others, and that they were apprised of his claim of adverse and exclusive ownership, before the prescriptive period begins to run. However, in the present case, the prescriptive period began to run only from 5 June 1998, the date petitioners received notice of Ricardo’s repudiation of their claims to the land. Since petitioners filed an action for recovery of ownership and possession, partition and damages with the RTC on 26

October 2001, only a mere three years had lapsed. This three-year period falls short of the 10-year or 30-year acquisitive prescription period required by law in order to be entitled to claim legal ownership over the land. Thus, Dominador cannot invoke acquisitive prescription. Further, Dominador’s argument that prescription began to commence in 1966, after the Affidavit was executed, is erroneous. Dominador merely relied on the Affidavit submitted to the RTC that Ricardo had been in possession of the land for more than 30 years. Dominador did not submit any other corroborative evidence to establish Ricardo’s alleged possession since 1966. In Heirs of Maningding v. Court of Appeals,13 we held that the evidence relative to the possession, as a fact, upon which the alleged prescription is based, must be clear, complete and conclusive in order to establish the prescription. Here, Dominador failed to present any other competent evidence to prove the alleged extraordinary acquisitive prescription of Ricardo over the land. Since the property is an uned land, Dominador bought the land at his own risk, being aware as buyer that no title had been issued over the land. As a consequence, Dominador is not afforded protection unless he can manifestly prove his legal entitlement to his claim. With regard to the issue of the jurisdiction of the RTC, we hold that the RTC did not err in taking cognizance of the case. Under Section 1 of Republic Act No. 7691 (RA 7691), 14 amending Batas Pambansa Blg. 129, the RTC shall exercise exclusive jurisdiction on the following actions: Section 1. Section 19 of Batas Pambansa Blg. 129, otherwise known as the "Judiciary Reorganization Act of 1980", is hereby amended to read as follows: "Sec. 19. Jurisdiction in civil cases. – Regional Trial Courts shall exercise exclusive original jurisdiction. "(1) In all civil actions in which the subject of the litigation is incapable of pecuniary estimation; "(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, where the assessed value of the property involved exceeds Twenty Thousand Pesos (P20,000.00) or, for civil actions in Metro Manila, where such value exceeds Fifty Thousand Pesos (P50,000.00) except actions for forcible entry into and unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon the Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts; x x x On the other hand, Section 3 of RA 7691 expanded the jurisdiction of the Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts over all civil actions which involve title to or possession of real property, or any interest, outside Metro Manila where the assessed value does not exceed Twenty thousand pesos (P20,000.00). The provision states: Section 3. Section 33 of the same law is hereby amended to read as follows: "Sec. 33. Jurisdiction of Metropolitan Trial Courts, Municipal Trial Courts and Municipal Circuit Trial Courts in Civil Cases. - Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Trial Circuit Trial Courts shall exercise:

xxx "(3) Exclusive original jurisdiction in all civil actions which involve title to, or possession of, real property, or any interest therein where the assessed value of the property or interest therein does not exceed Twenty thousand pesos (P20,000.00) or, in civil actions in Metro Manila, where such assessed value does not exceed Fifty thousand pesos (P50,000.00) exclusive of interest, damages of whatever kind, attorney’s fees, litigation expenses and costs: Provided, That in cases of land not declared for taxation purposes, the value of such property shall be determined by the assessed value of the adjacent lots." In the present case, the records show that the assessed value of the land was P590.00 according to the Declaration of Property as of 23 March 2000 filed with the RTC. Based on the value alone, being way belowP20,000.00, the MTC has jurisdiction over the case. However, petitioners argued that the action was not merely for recovery of ownership and possession, partition and damages but also for annulment of deed of sale. Since annulment of contracts are actions incapable of pecuniary estimation, the RTC has jurisdiction over the case.15 1avvphi1

Petitioners are correct. In Singson v. Isabela Sawmill,16 we held that: In determining whether an action is one the subject matter of which is not capable of pecuniary estimation this Court has adopted the criterion of first ascertaining the nature of the principal action or remedy sought. If it is primarily for the recovery of a sum of money, the claim is considered capable of pecuniary estimation, and whether jurisdiction is in the municipal courts or in the courts of first instance would depend on the amount of the claim. However, where the basic issue is something other than the right to recover a sum of money, where the money claim is purely incidental to, or a consequence of, the principal relief sought, this Court has considered such actions as cases where the subject of the litigation may not be estimated in of money, and are cognizable by courts of first instance (now Regional Trial Courts). When petitioners filed the action with the RTC they sought to recover ownership and possession of the land by questioning (1) the due execution and authenticity of the Affidavit executed by Juanita in favor of Ricardo which caused Ricardo to be the sole owner of the land to the exclusion of petitioners who also claim to be legal heirs and entitled to the land, and (2) the validity of the deed of sale executed between Ricardo’s daughters and Dominador. Since the principal action sought here is something other than the recovery of a sum of money, the action is incapable of pecuniary estimation and thus cognizable by the RTC. Well-entrenched is the rule that jurisdiction over the subject matter of a case is conferred by law and is determined by the allegations in the complaint and the character of the relief sought, irrespective of whether the party is entitled to all or some of the claims asserted.17 In sum, we find that the Affidavit, as the principal evidence relied upon by the RTC to dismiss the case on the ground of prescription, insufficiently established Dominador’s rightful claim of ownership to the land. Thus, we direct the RTC to try the case on the merits to determine who among the parties are legally entitled to the land. WHEREFORE, we GRANT the petition. We REVERSE AND SET ASIDE the Orders dated 8 September 2006 and 13 February 2007 of the Regional Trial Court of Tacloban City, Branch 34 in Civil Case No. 2001-10-161.

SO ORDERED.

12. Quijano Vs. Amante (maikli ang full text at parang digested narin dahil may facts issue at ruling. Ganito yung trend sa mga newer jurisprudence eh kaya natutuwa ako mag basa ngayon ng mga new cases, yung mga 2010+ pataas madadali na intindihin at parang case digest lang din. Wag ka na mag digest dito.

G.R. No. 164277

October 8, 2014

FE U. QUIJANO, Petitioner, vs. ATTY. DARYLL A. AMANTE, Respondent. DECISION BERSAMIN, J.: Where the plaintiff does not prove her alleged tolerance of the defendant's occupation, the possession is deemed illegal from the beginning. Hence, the action for unlawful detainer is an improper remedy. But the action cannot be considered as one for forcible entry without any allegation in the complaint that the entry of the defendant was by means of force, intimidation, threats, strategy or stealth. Antecedents The petitioner and her siblings, namely: Eliseo, Jose and Gloria, inherited from their father, the late Bibiano Quijano, the parcel of land ed in the latter's name under Original Certificate of Title (OCT) No. 0-188 of the Registry of Deeds in Cebu City with an area of 15,790 square meters, more or less. On April 23, 1990, prior to any partition among the heirs, Eliseo sold a portion of his share, measuring 600 square meters, to respondent Atty. Daryll A. Amante (respondent), with the affected portion being described in the deed of absolute sale Eliseo executed in the following manner: 1

A portion of a parcel of land located at the back of the Pleasant Homes Subdivision and also at the back of Don Bosco Seminary, Punta Princesa, Cebu City, to be taken from my share of the whole lot; the portion sold to Atty. Amante is only 600 square meters which is the area near the boundary facing the Pleasant Homes Subdivision, Cebu City. 2

On July 25, 1991, Eliseo, sickly and in need of money, sold an additional 1/3 portion of his share inthe property to the respondent, with their deed of absolute sale stating that the sale was with the approval of Eliseo’s siblings, and describing the portion subject of the sale as: That the portion covered under this transaction is Specifically located right at the back of the seminary facing Japer Memorial School and where the fence and house of Atty. Amante is located.

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On September 30, 1992, Fe, Eliseo, Jose and Gloria executed a deed of extrajudicial partition to divide their father’s estate (consisting of the aforementioned parcel of land) among themselves. Pursuant to the deed extrajudicial partition, OCT No. O-188 was cancelled, and on July 4

12, 1994 the of Deeds issued TransferCertificate of Title (TCT) No. 6555, TCT No. 6556, TCT No. 6557 and TCT No. 6558 to the petitioner, Gloria, Jose, and Eliseo, respectively. The partition resulted in the portions earlier sold by Eliseo to the respondent being adjudicated to the petitioner instead of to Eliseo. 5

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Due to the petitioner’s needing her portion that was then occupied by the respondent, she demanded that the latter vacate it. Despite several demands, the last of which was by the letter dated November 4, 1994, the respondent refused to vacate, prompting her to file against him on February 14, 1995 a complaint for ejectment and damages in the Municipal Trial Court in Cities of Cebu City (MTCC), docketed as Civil Case No. R-34426. She alleged therein that she was the ed owner of the parcel of land covered by TCT No. 6555, a portion of which was being occupied by the respondent, who had constructed a residential building thereon by the mere tolerance of Eliseo when the property she and her siblings had inherited from their father had not yet been subdivided, and was thus still co-owned by them; and that the respondent’s occupation had become illegal following his refusal to vacate despite repeated demands. 7

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

Judgment of the MTCC On February 5, 1996, the MTCC rendered its decision in favor of the petitioner, ruling that the deeds of sale executed by Eliseo in favor of the respondent did not have the effect of conveying the disputed property to him inasmuch as at the time of the sale, the parcel of land left by their father, which included the disputed property, had not yet been partitioned, rendering Eliseo a mere coowner of the undivided estate who had no right to dispose of a definite portion thereof; that as a coowner, Eliseo effectively conveyed to the respondent only the portion that would ultimately be allotted to him once the property would be subdivided; that because the disputed property was adjudicated to the petitioner under the deed of extrajudicial settlement and partition, she was its owner with the consequent right of possession; and that, as such, she had the right to demand that the respondent vacate the land. 10

The MTCC disposed as follows: WHEREFORE, in view of all the foregoing premises, and on the basis thereof, judgment is hereby rendered in favor of the plaintiff and against the defendant, ordering the defendant; to: 1) vacate from the portion, presently occupied by him and whereon his building stands, of that parcel of land locatedin Cebu City covered by TCT No. 6555 and ed in the nameof the plaintiff; and to remove and/or demolish the building and all the structures that may have been built on said portion;

2) pay the plaintiff the rentalof P1,000.00 a month for the portion in litigation from November 21, 1994 until such time that the defendant shall have vacated, and have removed all structures from said portion, and have completely restored possession thereof to the plaintiff; and 3) pay unto the plaintiff the sum of P10,000.00 as attorney’s fees; and the sum of P5,000.00 for litigation expenses; and 4) to pay the costs of suit. SO ORDERED.

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Decision of the RTC On appeal, the Regional Trial Court (RTC) reversed the judgment of the MTCC, and dismissed the complaint, holding that the summary proceeding for ejectment was not proper because the serious question of ownership of the disputed property was involved, viz: 12

In the case at bar, by virtue of the deed of absolute sale executed by Eliseo Quijano, one of the coheirs of Fe Quijano, in 1990 and 1991, the defendant Atty. Amante took possession of the portion in question and built his residential house thereat. Itwas only in 1992 that the heirs of Bibiano Quijano executed the deed of extrajudicial partition, and instead of giving to Eliseo Quijano the portion that he already sold to the defendant, the same was adjudicated toplaintiff, Fe Quijano to the great prejudice of the defendant herein who had been in possession of the portion in question since 1990 and which possession is notpossession de facto but possession de jure because it is based on 2 deeds of conveyances executed by Eliseo Quijano. There is, therefore, a serious question of ownership involved which cannot be determined in a summary proceeding for ejectment. Since the defendantis in possession of the portion in question where his residential house is built for several years, and before the extrajudicial partition, the possession of the defendant, to repeat, is one of possession de jure and the plaintiff cannot eject the defendant in a summary proceeding for ejectment involving only possession de facto. What the plaintiff should have done was to file an action publiciana or action reinvindicatoria before the appropriate court for recovery of possession and ownership. However, since there is a pending complaint for quieting of title filed by the defendant against the plaintiff herein before the Regional Trial Court, the matter of ownership should be finally resolved in said proceedings. Undaunted, the petitioner moved for reconsideration, but the RTC denied her motion on November 13, 1996. 13

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Decision of the CA The petitioner appealed to the CA by petition for review. On May 26, 2004, the CA promulgated its decision, affirming the decision of the RTC, and dismissing the case for ejectment, but on the ground that the respondent was either a co-owner or an assignee holding the right of possession over the disputed property. 15

The CA observed that the RTC correctly dismissed the ejectment case because a question of ownership over the disputed property was raised; that the rule that inferior courts could upon the issue of ownership to determine the question of possession was well settled; that the institution of a separate action for quieting of title by the respondent did not divest the MTCC of its authority to

decide the ejectment case; that Eliseo, as a coowner, had no right to sell a definite portion of the undivided estate; that the deeds of sale Eliseo executed in favor of the respondent were valid only with respect to the alienation of Eliseo’s undivided share; that after the execution of the deeds of sale, the respondent became a co-owner along with Eliseo and his co-heirs, giving him the right toparticipate in the partition of the estate owned in common by them; that because the respondent was not given any notice of the project of partition or of the intention to effect the partition, the partition made by the petitioner and her co-heirs did not bind him; and that, as to him, the entire estate was still co-owned by the heirs, giving him the right to the co-possession of the estate, including the disputed portion. Issues The petitioner has come to the Court on appeal by certiorari, contending that the CA grossly erred in holding that the respondent was either a co-owner or an assignee with the right of possession over the disputed property. 16

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

To be resolved is the issue ofwho between the petitioner and the respondent had the better right to the possession of the disputed property. Ruling The petition for review on certiorarilacks merit. An ejectment case can be eitherfor forcible entry or unlawful detainer. It is a summary proceeding designed to provide expeditious means to protect the actual possession or the right to possession of the property involved. The sole question for resolution in the case is the physical or material possession (possession de facto)of the property in question, and neither a claim of juridical possession (possession de jure)nor an averment of ownership by the defendant can outrightly deprive the trial court from taking due cognizance of the case. Hence,even if the question of ownership is raised in the pleadings, like here, the court may upon the issue but only to determine the question of possession especially if the question of ownership is inseparably linked with the question of possession. The adjudication of ownership in that instance is merely provisional, and will not bar or prejudice an action between the same parties involving the title to the property. 19

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

The disputed property originally formed part of the estate of the late Bibiano Quijano, and ed on to his heirs by operation of law upon his death. Prior to the partition, the estate was owned in common by the heirs, subject to the payment of the debts of the deceased. In a co-ownership, the undivided thing or right belong to different persons, with each of them holding the property pro indivisoand exercising her rights over the whole property. Each co-owner may use and enjoy the property with no other limitation than that he shall not injure the interests of his co-owners. The underlying rationale is that until a division is actually made, the respective share of each cannot be determined, and every co-owner exercises, together with his co-participants, t ownership of the pro indiviso property, in addition to his use and enjoyment of it. 22

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Even if an heir’s right in the estate of the decedent has not yet been fully settled and partitioned and is thus merely inchoate, Article 493 of the Civil Codegives the heir the right to exercise acts of ownership. Accordingly, when Eliseo sold the disputed property to the respondent in 1990 and 1991, he was only a co-owner along with his siblings, and could sell only that portion that would beallotted to him upon the termination of the co-ownership. The sale did not vest ownership of the disputed property in the respondent but transferred only the seller’s pro indiviso share to him, consequently making him, as the buyer, a co-owner of the disputed property until it is partitioned. 25

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

Article 497. The creditors or assignees of the co-owners may take part in the division of the thing owned in common and object to its being effected without their concurrence. But they cannot impugn any partition already executed, unless there has been fraud, or in case it was made notwithstanding a formal opposition presented to prevent it, without prejudice to the right of the debtor or assignor to maintain its validity. The respondent could not deny that at the time of the sale he knew that the property he was buying was notexclusively owned by Eliseo. He knew, too, that the co-heirs had entered into an oral agreement of partition vis-à-vis the estate, such knowledge being explicitly stated in his answer to the complaint, to wit: 1âwphi1

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

His knowledge of Eliseo’s co-ownership with his co-heirs, and of their oral agreement of partition notwithstanding, the respondent still did not exercise his right under Article 497. Although Eliseo made it appear to the respondent that the partition had already been completed and finalized, the co-heirs had not taken possession yet oftheir respective shares to signify that they had ratified their agreement, if any. For sure, the respondent was no stranger to the Quijanos, because he himself had served as the lawyer of Eliseo and the petitioner herself. In that sense, it would have been easy for him to ascertain whether the representation of Eliseo to him was true. As it turned out, there had been no prior oral agreement among the heirs to partition the estate; otherwise, Eliseo would have questioned the deed of extrajudicial partition because it did not conform to what they had supposedly agreed upon. Had the respondent been vigilant in protecting his interest, he could have availed himself of the rights reserved to him by law, particularly the right to take an active part in the partition and to object to the partition if he wanted to. It was only on September 30, 1992, or two years and 29

five months from the time of the first sale transaction, and a year and two months from the time of the second sale transaction, that the co-heirs executed the deed of extrajudicial partition. Having been silent despite his ample opportunity to participate in or toobject to the partition of the estate, the respondent was bound by whatever was ultimately agreed upon by the Quijanos. There is no question that the holder of a Torrens title is the rightful owner of the property thereby covered and is entitled to its possession. However, the Court cannot ignore thatthe statements in the petitioner’s complaint about the respondent’s possession of the disputed property being by the mere tolerance of Eliseo could be the basis for unlawful detainer. Unlawful detainer involves the defendant’s withholding of the possession of the property to which the plaintiff is entitled, after the expiration or termination of the former’s right tohold possession under the contract, whether express or implied. A requisite for a valid cause of action of unlawful detainer is that the possession was originally lawful, but turned unlawful only upon the expiration of the right to possess. 30

To show that the possession was initially lawful, the basis of such lawful possession must then be established. With the averment here that the respondent’s possession was by mere tolerance of the petitioner, the acts of tolerance must be proved, for bare allegation of tolerance did not suffice. At least, the petitioner should show the overt acts indicative of her or her predecessor’s tolerance, or her co-heirs’ permission for him to occupy the disputed property. But she did not adduce such evidence. Instead, she appeared to be herself not clear and definite as to his possession of the disputed property being merely tolerated by Eliseo, as the following averment of her petition for review indicates: 31

6.9. Their ignorance of the said transaction of sale, particularly the petitioner, as they were not duly informed by the vendor-co[-]owner Eliseo Quijano, [led] them to believe that the respondent’s occupancy of the subject premises was by mere tolerance of Eliseo, so that upon partition of the whole property,said occupancy continued to be under tolerance of the petitioner when the subject premises became a part of the land adjudicated to the latter; (emphasis supplied) In contrast, the respondent consistently stood firm on his assertion that his possession of the disputed property was in the concept of an owner, not by the mere tolerance of Eliseo, and actually presented the deeds of sale transferring ownership of the property to him. 32

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Considering that the allegation ofthe petitioner’s tolerance of the respondent’s possession of the disputed property was not established, the possession could very well be deemed illegal from the beginning. In that case, her action for unlawful detainer has to fail. Even so, the Court would not be justified to treat this ejectment suit as one for forcible entry because the complaint contained no allegation thathis entry in the property had been by force, intimidation, threats, strategy or stealth. 34

Regardless, the issue of possession between the parties will still remain. To finally resolve such issue,they should review their options and decide on their proper recourses. In the meantime, it is wise for the Court to leave the door open to them in that respect. For now, therefore, this recourse of the petitioner has to be dismissed. WHEREFORE, the Court AFFIRMS the decision promulgated on May 26, 2004 subject to the MODIFICATION that the unlawful detainer action is dismissed for being an improper remedy; and ORDERS the petitioner to pay the costs of suit. SO ORDERED.

13. Carvajal Vs. Ca (maikli lang din to..)

G.R. No. L-44426 February 25, 1982 SULPICIO CARVAJAL, petitioner, vs. THE HONORABLE COURT OF APPEALS ** and EUTIQUIANO CAMARILLO and LIBERATA CACABELOS, respondents.

TEEHANKEE, J.: The Court reverses the appellate court's decision affirming in toto the judgment of the Court of First Instance of Pangasinan, declaring plaintiffs-respondents the lawful owners of the land in question and ordering defendant (herein petitioner) to pay P30.00 monthly rentals until possession of the property is surrendered to respondents, for unless there is partition of the estate of the deceased, either extra judicially or by court order, a co-heir cannot validly claim title to a specific portion of the estate and send the same. Title to any specific part of the estate does not automatically to the heirs by the mere death of the decedent and the effect of any disposition by a co-heir before partition shall be limited to the portion which may be allotted to him upon the dissolution of the communal estate. What a co-heir can validly dispose of is only his hereditary rights. Private respondents, who are husband and wife, had instituted a complaint before the Court of First Instance for ejectment and recovery of possession against herein petitioner, docketed as Civil Case No. T-1163, alleging that they are the owners in fee simple of a parcel of commercial land, proindiviso, consisting of 150.8 sq. meters, more or less, situated in Poblacion, Tayug, Pangasinan, having bought the same from Evaristo G. Espique by virtue of a Deed of Absolute Sale executed on April 15, 1964. They also demand that petitioner pay a monthly rental for the use of the property all P40.00 until the property is surrendered to them. The property in question is a 1/5 portion of a 754 sq. qmeter land originally owned by Hermogenes Espique and his wife, both dead. After their death their five children, namely: Maria, Evaristo, Faustina, Estefanio and Tropinia succeeded them in the ownership of the whole lot. Petitioner presently occupies two-fifths of the whole lot inherited pro-indiviso by the Espique children. Petitioner alleges that he purchased the northern one-half portion of the lot he is occupying (which is also claimed by respondents) from Estefanio Espique and that the southern one-half portion of the lot he is occupying (which is also claimed by respondents) from Estefanio Espique and that the southern one-half portion is leased to him by Tropinia Espique. The land subject of the controversy is the most southern portion of the whole lot inherited by the Espique children which petitioner claims he had bought from Estefanio on April 26, 1967 and which respondents claim they had bough from Evaristo on April 15, 1964. Both sales were made while the petition for partition filed by Evaristo Espique was still pending before the Court of First Instance of Pangasinan, docketed therein as Civil Case No. T-966. The Court finds merit in the petition for setting aside respondent appellate court's decision finding for respondents-plaintiffs, for the following considerations:

The action for ejectment and recovery of possession instituted by herein respondents in the lower court is premature, for what must be settled frist is the action for partition. Unless a project of partition is effected, each heir cannot claim ownership over a definite portion of the inheritance. Without partition, either by agreement between the parties of by judicial proceeding, a co-heir cannot dispose of a specific portion of the estate. For where there are two or more heirs, the whole estate such heirs. 1 Upon the death of a person, each of his heirs becomes the undivided owner of the whole estate left wtih respect to the part of portion which might be adjudicated to him, a community of ownership being thus formed among the co-owners of the estate or co-heirs while it remains undivided. 2 While under Article 493 of the New Civil Code, each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto and he may alienate, assign or mortgage it, and even substitute another person in its enjoyment, the effect of the alienation or the mortgage with respect to the co-owners, shall be limited, by mandate of the same article, to the portion which may be allotted to him in the division upon the termination of the co-ownership. He has no right to sell or alienate a concrete, specific, or determinate part of the thing in common to the exclusion of the other co-owners because his right over the thing is represented by an abstract or Ideal portion without any physical adjudication. 3 An individual co- owner cannot adjudicate to himself or claim title to any definite portion of the land or thing owned in common until its actual partition by agreement or judicial decree. Prior to that time all that the co-owner has is an Ideal or abstract quota or proportionate share in the entire thing owned in common by all the co-owners. 4 What a co owner may dispose of is only his undivided aliquot share, which shall be limited to the portion that may be allotted to him upon partition. 5 Before partition, a co-heir can only sell his successional rights. 6 In the case at bar, the fact that the sale executed by Evaristo G. qqqEspique in favor of respondents and the sale executed by Estefanio Espique in favor of petitioner were made before the partition of the property among the co-heirs does not annul or invalidate the deeds of sale and both sales are valid. However, the interests thereby acquired by petitioner and respondents are limited only to the parts that may be ultimately assigned to Estefanio and Evaristo, respectively, upon the partition of the estate 7 subject to provisions on subrogation of the other co-heirs to the rights of the strangerpurchaser provided in Article 1088 of the Civil Code. 8 Respondent court's ruling that the sale by Estefanio in favor of petitioner is not valid because of lack of notice to his co-heirs is erroneous. Such notice in writing is not a requisite for the validity of the sale. Its purpose is merely to apprise the co-heirs of the sale of a portion of the estate, for them to exercise their preferential right of subrogation under Article 1088 of the New Civil Code, that is, the right to redeem the property sold within one month from the time they were notified in writing of the sale by a co-heir. (There is nothing in the record to indicate that such right of subrogation was in effect sought to be exercised upon the co-heirs' having learned of the sale, which is not in issue here.) Thus, respondents have no right to eject petitioners nor demand payment of rentals for the use of the property in dispute. Until the partition of the estate is ordered by the Court of First Instance of Pangasinan in the pending partition proceedings and the share of each co-heir is determined by metes and bounds, neither petitioner nor respondents can rightfully claim that what they bought is the part in dispute. Accordingly, respondent court's judgment is set aside and judgment is hereby rendered dismissing the complaint of respondents-plaintiffs in the court below. No pronouncement as to costs.

14. PNB vs CA Facts: Petition for review of the decision of the Court of Appeals on “Pedro Bitanga, et al., Plaintiffs-Appellees, versus Philippine National Bank, et al., Defendants-Appellants, Melitona Lagpacan, assisted by her husband, Jorge Malacas, Intervenors Appellees. The respondents Pedro, Fernando, Gregorio, Guillermo and Clarita, all surnamed Bitanga, filed a complaint before the Court of First Instance of Ilocos Norte against the Philippine National Bank, the of Deeds of Ilocos Norte and Felizardo Reyes, for reconveyance of real property and damages, with a prayer for the issuance of an ex-parte writ of pre injunction restraining and ening the PNB and Felizardo Reyes from consummating the sale of the property in question and prohibiting the of Deeds from ing the sale in favor of Felizardo Reyes. On November 16, 1960, the trial court rendered a decision in favor of the plaintiffs and intervenors, the Court finding and holding that: (a) The lot in question is a conjugal partnership property, one-half of which must go to the heirs of the late Iñigo Bitanga, the plaintiffs; (b) The other half goes to Rosa Ver as her share. The mortgage executed by her of her one-half portion in favor of the Philippine National Bank is not an existing then on the said portion because it did not have a “special mention in the decree of registration.” It follows, therefore, that the acquisition of the said portion by the Manila Trading Company in the manner abovedescribed was valid and legal. Consequently, the sale made by the said Company to Santiago Sambrano over the one-half portion must also be valid and legal. In connection with Civil Case No. 1846 in which the intervenors were the plaintiffs and Santiago Sambrano was the defendant, what the intervenors had attached and sold in a public auction in which they (intervenors) were the highest bidders was the very said portion sold by the Manila Trading Company to Santiago Sambrano; (c) That Felizardo Reyes is not a purchaser of a ed land for value and in good faith, and (d) Since the issuance of Transfer Certificate of Title No. 3944 in favor of the Philippine National Bank, exhibit “B”, and Owner’s Duplicate Certificate of Title No. 3944, Exhibit “16”, in favor of Felizardo Reyes were without legal basis, they are, therefore, declared null and void and cancelled. With costs against the defendants. 3

And to cap his argument, petitioner contends that mortgagor Rosa Ver and her heirs had already benefitted from the loan and the mortgage transaction and that they should not be allowed to enrich themselves at the expense of the petitioner. Issue: Whether or not Rosa Ver could mortgage the entire Lot 9068 to petitioner PNB. Held: The court ruled that the mortgage deed was valid and existing only with respect to the one-half portion of the lot in question belonging to the mortgagor Rosa Ver as her share in the conjugal partnership with her husband Iñigo Bitanga. Hence, petitioner’s assumption that the mortgage of the whole lot was valid, is erroneous. The Court held that the mortgagor, Rosa Ver, as surviving spouse, could convey in mortgage to the petitioner bank one-half (½) of the entire property being her share in the conjugal partnership with her deceased husband, the other half

being the lawful share of the respondent heirs as inheritance from their deceased father, Iñigo Bitanga. Ratio:Under Article 2085, New Civil Code (Art. 1857, Old Civil Code), one of the essential requisites to the contract of pledge and mortgage is that the pledgor or mortgagor be the absolute owner of the thing pledged or mortgaged. And under Article 493, New Civil Code (Art. 399, Old Civil Code), each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. CA decision affirmed with revision to (d) which states that: “(d) Since the issuance of Transfer Certificate of Title No. T2701, Exhibit “D” in favor of the Philippine National Bank, and Transfer Certificate of Title No. T-3944, Exhibit “16”, in favor of Felizardo Reyes, was without legal basis, they are, therefore, declared null and void and cancelled. The of Deeds is hereby ordered to issue the foregoing transfer certificates of title another certificate of title in the names of the private respondents as follows: Undivided two-fifths (2/5) share to Pedro Bitanga, married to Agripina, Purisima Fernando Bitanga, single, Gregorio Bitanga, single, and Clarita Bitanga, married to Agripino L. Rabago, all of legal age, Filipino citizens, and residents of Laoag, Ilocos Norte, and the remaining undivided three-fifths (3/5) share to the spouses Jorge Maracas and Melitona Lagpacan, both of legal age, Filipino citizens, and residents of Burgos, Ilocos Norte, free from incumbrance regarding the claims of the Philippine National Bank and Felizardo Reyes, after payment of lawful fees. “

15. Feliciano vs Canoza (correlate mo nalang with full text luvie kung same lang sila ng hinahanap na issues. Pero I think pasok naman ito..)

Remedial Law – Special Proceedings – Prescriptive Period – Fraud in Extrajudicial Settlement Facts: In May 1930, Antonio Feliciano died leaving behind a parcel of land. In 1972, an extrajudicial settlement was executed by Leona Feliciano, Maria Feliciano, Pedro Feliciano, and Salina Feliciano. The four declared that they are the only heirs of Antonio; they did not include the heirs of their dead siblings Esteban and Doroteo Feliciano. Thereafter, Pedro sold his share to Jacinto Feliciano; Salina sold her share to Felisa Feliciano; and Leona and Maria sold their share to Pedro Canoza. Subsequently, Jacinto and Canoza applied for their respective titles covering the lands they purchased. In November 1977, a free patent was issued to Jacinto. In February 1979, a free patent was likewise issued to Pedro Canoza. In October 1993, Eugenio Feliciano and Angelina De Leon (surviving heirs of Esteban) as well as Trinidad Valiente and Basilia Trinidad (Surviving heirs of Doroteo) filed a complaint for the declaration of nullity of the deed of extrajudicial settlement on the ground of fraud by reason of the exclusion of the other compulsory heirs (Esteban and Doroteo). The trial court ruled in favor of Eugenio et al but on appeal, the Court of Appeals reversed the trial court on the ground that Eugenio et al’s action has prescribed. ISSUE: Whether or not the action filed by Eugenio et al is barred by prescription. HELD: Yes. It is undeniable that the extrajudicial settlement executed by Leona Feliciano, Maria Feliciano, Pedro Feliciano, and Salina Feliciano in 1972 to the exclusion of Esteban and Doroteo’s heirs is attended by fraud. As such, the deed of extrajudicial settlement can be attacked in action for annulment in court. However, such action should be filed within 4 years from the discovery of the fraud. In this case, the fraud was actually committed in 1972 but it was only deemed discovered in 1977 and 1979. In 1977, because this was the time when a free patent was issued to Jacinto and in 1979, when a free patent was issued to Canoza. These years are the reckoning point because the free patents released to Jacinto and Canoza served as constructive notices to Eugenio et al and to the whole world. And so, when Eugenio et al filed their complaint in 1993, the complaint was already filed out of time (16 years late in case of Jacinto; and 14 years in case of Canoza).

16. Parel Vs. Prudencio (digest) (apparently, binibigay din tong case na to sa remedial law.. So check mo nalang din..

OFFER OF EVIDENCE PAREL v. PRUDENCIO Petition for review on certiorari FACTS:  On Feb. 27, 1992, Simeon Prudencio filed a complaint for recovery of possession and damages against Danilo Parel with the RTC Baguio.  Prudencio is claiming that he is the owner of a two-storey residential house located at No. 61 Forbes Park National Reservation near Department of Public Service (DPS) compound, Baguio City  He also claims that the house was constructed in 1972-1975 from his own funds and declared in his name in a tax declaration and that he has been paying the taxes on it ever since  In 1973, when the 2nd floor of the house was already habitable, he allowed Parel’s parents to live there and supervise the construction below. When the house was finished, the Parel family was allowed to live there since they have no house of their own.  Parel’s dad, Florentino, now deceased, was Prudencio’s wife’s younger brother.  In November 1985, Prudencio wrote Florentino a notice for them to vacate the said house as the former was due for retirement and he needed the place.  Danilo’s parents heeded this when they migrated to US in 1986, however, Danilo and his family unlawfully entered and took possession of the ground floor of the house; and refused to leave despite many demands  So Prudencio filed an action for recovery of possession, and also asked from Parel for a monthly rental (3k) from April 1988 until he leaves the premises, plus moral and exemplary damages and costs.  Parel filed his Answer with Counterclaim alleging that his parents are co-owners of the house (ground floor to Parel, 2nd floor to Prudencio), and that his parents spent their own resources in improving the house and that the construction workers were hired by Florentino, and that Florentino was an awardee of the land on which the house stands.  He also claims that Prudencio had filed ejectment case as well as criminal cases against them involving the subject house, which were all dismissed.  Parel asked for the dismissal of the complaint and prayed for damages and attorney’s fees.  RTC declared that the house is co-owned by Parel and Prudencio, so Prudencio cannot evict Parel. Parel was also ordered to pay moral and actual damages, atty.’s fees, and costs.  RTC concluded that the land was allocated to Florentino as part of a program of the former mayor of Baguio (Lardizabal) to allow lowly-paid gov’t workers to construct their own houses on the reservation; that Prudencio failed to show proof of any contract, written or oral, express or implied, that the late Florentino and his family stayed on the house not as co-owners but as mere lessees, nor any other proof that would clearly establish his sole ownership of the house; and, that the late Florentino was the one who gathered the laborers for the construction of the house and paid their salaries. Thus, the RTC ruled that co-ownership existed between respondent and petitioner’s father, Florentino.  From this, RTC concluded that Florentino and Prudencio had an agreement that Florentino would contribute money for the construction and once the house is completed, hati sila.  RTC also questioned that Prudencio only claimed sole-ownership after 15 years.  RTC did not give credence to the tax declaration as well as the several documents showing the City Assessor’s assessment of the property all in respondent’s name since tax declarations are not conclusive proof of ownership.  It rejected the affidavit executed by Florentino declaring the house as owned by respondent saying that the affidavit should be read in its entirety to determine the purpose of its execution; that it was executed because of an advisement addressed to the late Florentino by the City Treasurer concerning the property’s tax assessment and Florentino, thought then that it should be the respondent who should pay the taxes; and that the affidavit cannot be accepted for being hearsay.  From this decision, Prudencio appealed, decision reversed by CA, declaring him the sole owner.  The CA found as meritorious respondent’s contention that since petitioner failed to formally offer in evidence any documentary evidence, there is nothing to refute the evidence offered by respondent.  It ruled that the TC’s statement that defendants’ occupancy of the house is due to a SPA executed by his parents is wanting of any concrete evidence on record; that said power of attorney was never offered, hence, could not be referred to as petitioner’s evidence to his claim; that except for the bare testimonies of Candelario Regua, the carpenter-foreman, that it was Florentino who constructed the house and Corazon Garcia, the former barangay captain, who testified that the lot was allocated to petitioner’s father, there was

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no ing document which would sufficiently establish factual bases for the trial court’s conclusion; and that the rule on offer of evidence is mandatory. The CA found the affidavit dated Sep. 24, 1973 of Florentino, petitioner’s father, stating that he is not the owner of the subject house but respondent, as conclusive proof of respondent’s sole ownership of the subject house as it is a declaration made by Florentino against his interest. It also gave weight to Prudencio’s tax declarations as sufficient to establish his case which constitute at least proof that the holder has a claim of title over the property. Parel filed an MFR, denied.

ISSUES: 1. WON Parel was able to prove by preponderance of evidence that his father was a co-owner of the house. NO. 2. WON it was necessary to formally offer Parel’s documentary evidence. YES. 3. WON Florentino’s affidavit should be given weight as conclusive proof of Prudencio’s sole ownership. YES. ISSUE 3 muna:  Petitioner argues that the CA erred in finding the affidavit of petitioner’s father declaring respondent as owner of the subject house as conclusive proof that respondent is the true and only owner of the house since the affidavit should be read in its entirety to determine the purpose for which it was executed.  Prudencio had shown sufficient evidence to his complaint for recovery of possession of the ground floor of the subject house as the exclusive owner thereof. He presented the affidavit dated September 24, 1973 executed by Florentino and sworn to before the Assistant City Assessor of Baguio City, G.F. Lagasca, which reads: I, FLORENTINO PAREL, 42 years of age, employee, and residing at Forbes Park, Reservation No. 1, after having been sworn to according to law depose and say: That he is the occupant of a residential building located at Forbes Park, Reservation No. 1, Baguio City which is the subject of an advicement addressed to him emanating from the Office of the City Assessor, Baguio City, for assessment and declaration for taxation purposes; That I am not the owner of the building in question; That the building in question is owned by Mr. Simeon B. Prudencio who is presently residing at 55 Hyacinth, Roxas District, Quezon City. Further, affiant say not. Section 38 of Rule 130 of the Rules of Court provides: SEC. 38. Declaration against interest. – The declaration made by a person deceased, or unable to testify, against the interest of the declarant, if the fact asserted in the declaration was at the time it was made so far contrary to the declarant's own interest, that a reasonable man in his position would not have made the declaration unless he believed it to be true, may be received in evidence against himself or his successors-in-interest and against third persons. 

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The theory under which declarations against interest are received in evidence notwithstanding they are hearsay is that the necessity of the occasion renders the reception of such evidence advisable and, further that the reliability of such declaration asserts facts which are against his own pecuniary or moral interest. Based on the affidavit, it is safe to presume that he would not have made such declaration unless he believed it to be true, as it is prejudicial to himself as well as to his children’s interests as his heirs. A declaration against interest is the best evidence which affords the greatest certainty of the facts in dispute. There is also no evidence that Florentino revoked such affidavit, even when the criminal complaint for tres to dwelling was filed by Prudencio, although this was dismissed because of absence of evidence that Florentino entered the house against Prudencio’s will and that and action for ejectment should be his remedy; and even when a complaint for unlawful detainer was filed against petitioner and his wife also in 1988 which was subsequently dismissed on the ground that respondent’s action should be an accion publiciana which is beyond the jurisdiction of the MTC. The building plan of the house was in the name of Prudencio and his wife and the house was built in accordance to said plan. Prudencio was the one paying the real estate property taxes on the house under his name since 1974, and the Parels did not pay this any time in their name. While tax receipts and declarations are not incontrovertible evidence of ownership, they constitute at least proof that the holder has a claim of title over the property. But in this case, the taxes, taken with the other circumstances, SC concludes that Prudencio is the sole owner of

the house. ISSUE 1:  Since Prudencio has established his claim of sole ownership, the burden of disproving so was shifted to Parel. So he has to prove that Florentio was a co-owner of the housel.  In Jison v. Court of Appeals, the SC said that: “he who alleges the affirmative of the issue has the burden of proof, and upon the plaintiff in a civil case, the burden of proof never parts. However, in the course of trial in a civil case, once plaintiff makes out a prima facie case in his favor, the duty or the burden of evidence shifts to defendant to controvert plaintiff's prima facie case, otherwise, a verdict must be returned in favor of plaintiff. Moreover, in civil cases, the party having the burden of proof must produce a preponderance of evidence thereon, with plaintiff having to rely on the strength of his own evidence and not upon the weakness of the defendant’s. The concept of “preponderance of evidence” refers to evidence which is of greater weight, or more convincing, that which is offered in opposition to it; at bottom, it means probability of truth. ISSUE 2:  Parel cited Bravo vs. Borja to his claim that the rule that the court shall consider no evidence which has not been formally offered is not absolute, and that his evidence, though not formally offered were marked as exhibits in the presentation of testimonies of petitioner’s witnesses, and were part of the testimonies, and also that the evidence were part of a memorandum filed before the court.  Parel also insists that even without the documentary evidence, his testimony as well as that of his witnesses substantiated his claim.  Parel’s counsel asked that he be allowed to offer his documentary evidence in writing, he, however, did not file the same. Thus, the CA did not consider the documentary evidence presented by petitioner.  Section 34 of Rule 132 of the Rules of Court provides: Section 34. Offer of evidence. – The court shall consider no evidence which has not been formally offered. The purpose for which the evidence is offered must be specified.  A formal offer is necessary because it is the duty of a judge to rest his findings of facts and his judgment only and strictly upon the evidence offered by the parties to the suit. It is a settled rule that the mere fact that a particular document is identified and marked as an exhibit does not mean that it has thereby already been offered as part of the evidence of a party  Parel cannot rely on the Bravo case because there, the court allowed evidence on minority by itting the certified true copy of the birth certificate attached to a motion for bail even if it was not formally offered in evidence, because it was properly filed in of a motion for bail to prove petitioner’s minority which was never challenged by the prosecution and it already formed part of the records of the case.  The rule referred to in the Bravo case was Section 7 of Rule 133 of the Rules of Court which provides: “Section 7. Evidence on motion.- When a motion is based on facts not appearing of record, the court may hear the matter on affidavits or depositions presented by the respective parties, but the court may direct that the matter be heard wholly or partly on oral testimony or depositions.” Not Section 34 of Rule 132 of the Rules of Court which is the one applicable to the present case.  Even if the documentary evidence would be considered, the evidence showing that the cases filed by Prudencio were dismissed, and the SPA of Parel’s parents did not establish co-ownership.  The construction worker’s testimony that Florentino was the one who hired him, and the barangay captain’s allegation that he was allocated a lot does not overcome Florentino’s own affidavit naming Prudencio as owner of the house.  The fact that not one of the witnesses saw respondent during the construction of the said house does not establish that petitioner’s father and respondent co-owned the house. DISPOSITIVE PORTION: WHEREFORE, the decision of the Court of Appeals dated March 31, 2000 and its Resolution dated November 28, 2000 are AFFIRMED.

(FULL TEXT) G.R. NO. 146556

April 19, 2006

DANILO L. PAREL, Petitioner, vs. SIMEON B. PRUDENCIO, Respondent. DECISION AUSTRIA-MARTINEZ, J.: Before us is a petition for review on certiorari filed by Danilo Parel (petitioner) which seeks to set aside the Decision1 dated March 31, 2000 of the Court of Appeals (CA) which reversed the Decision of the Regional Trial Court (RTC), Branch 60, Baguio, in Civil Case No. 2493-R, a case for recovery of possession and damages. Also assailed is CA Resolution2 dated November 28, 2000. On February 27, 1992, Simeon Prudencio (respondent) filed a complaint for recovery of possession and damages against petitioner with the RTC Baguio alleging that: he is the owner of a two-storey residential house located at No. 61 Forbes Park National Reservation near Department of Public Service (DPS) compound, Baguio City; such property was constructed solely from his own funds and declared in his name under Tax Declaration No. 47048; he commenced the construction of said house in 1972 until its completion three years later; when the second floor of said house became habitable in 1973, he allowed petitioner’s parents, Florentino (now deceased) and Susan Parel, to move therein and occupy the second floor while the construction of the ground floor was on-going to supervise the construction and to safeguard the materials; when the construction of the second floor was finished in 1975, respondent allowed petitioner’s parents and children to transfer and temporarily reside thereat; it was done out of sheer magnanimity as petitioner’s parents have no house of their own and since respondent’s wife is the older sister of Florentino, petitioner’s father; in November 1985, respondent wrote Florentino a notice for them to vacate the said house as the former was due for retirement and he needed the place to which petitioner’s parents heeded when they migrated to U.S. in 1986; however, without respondent’s knowledge, petitioner and his family unlawfully entered and took possession of the ground floor of respondent’s house; petitioner’s refusal to vacate the house despite repeated demands prompted respondent to file the instant action for recovery of possession. Respondent also asked petitioner for a monthly rental of P3,000.00 from April 1988 and every month thereafter until the latter vacates the said premises and surrender possession thereof; and for moral and exemplary damages, attorney’s fees and cost of suit. Petitioner filed his Answer with Counterclaim alleging that: his parents are the co-owners of the said residential house, i.e., the upper story belongs to respondent while the ground floor pertains to petitioner’s parents; he is occupying the ground floor upon the instruction of his father, Florentino, with respondent’s full knowledge; his parents spent their own resources in improving and constructing the said two-storey house as co-owners thereof; the late Florentino was an awardee of the land on which the house stands and as a co-owner of the house, he occupied the ground floor thereof; the demand to vacate was respondent’s attempt to deprive petitioner’s parents of their rights as co-owner of the said house; that respondent had filed ejectment case as well as criminal cases against them involving the subject house which were all dismissed. Petitioner asked for the dismissal of the complaint and prayed for damages and attorney’s fees.

After trial on the merits, the RTC rendered a Decision3 dated December 15, 1993, the dispositive portion of which reads: WHEREFORE, premises considered, the Court hereby declares that the house erected at No. 61 DPS Compound, Baguio City is owned in common by the late Florentino Parel and herein plaintiff Simeon Prudencio and as such the plaintiff cannot evict the defendant as heirs of the deceased Florentino Parel from said property, nor to recover said premises from herein defendant. Likewise, the plaintiff is ordered to: (a) pay the defendant in the total sum of P20,000.00 for moral and actual damages; (b) pay the defendant P20,000.00 in Attorney’s fees and P3,300.00 in appearance fees; (c) pay the costs of this suit.4 The RTC found the following matters as conclusive: that petitioner’s father was an allocatee of the land on which the subject house was erected, as one of the lowly-paid government employees at that time when then Mayor Luis Lardizabal gave them the chance to construct their own house on said reservation; that respondent failed to show proof of any contract, written or oral, express or implied, that the late Florentino and his family stayed on the house not as co-owners but as mere lessees, nor any other proof that would clearly establish his sole ownership of the house; and, that the late Florentino was the one who gathered the laborers for the construction of the house and paid their salaries. Thus, the RTC ruled that co-ownership existed between respondent and petitioner’s father, Florentino. The RTC concluded that respondent and petitioner’s father agreed to contribute their money to complete the house; that since the land on which said house was erected has been allocated to petitioner’s father, the parties had the understanding that once the house is completed, petitioner’s father could keep the ground floor while respondent the second floor; the trial court questioned the fact that it was only after 15 years that respondent asserted his claim of sole ownership of the subject house; respondent failed to disprove that petitioner’s father contributed his own funds to finance the construction of the house; that respondent did not question (1) the fact that it was the deceased Florentino who istered the construction of the house as well as the one who supplied the materials; and (2) the fact that the land was in Florentino’s possession created the impression that the house indeed is tly owned by respondent and Florentino. The RTC did not give credence to the tax declaration as well as the several documents showing the City Assessor’s assessment of the property all in respondent’s name since tax declarations are not conclusive proof of ownership. It rejected the affidavit executed by Florentino declaring the house as owned by respondent saying that the affidavit should be read in its entirety to determine the purpose of its execution; that it was executed because of an advisement addressed to the late Florentino by the City Treasurer concerning the property’s tax assessment and Florentino, thought then that it should be the respondent who should pay the taxes; and that the affidavit cannot be accepted for being hearsay. Aggrieved by such decision, respondent appealed to the CA. In a Decision dated March 31, 2000, the CA reversed the trial court and declared respondent as the sole owner of the subject house and ordered petitioner to surrender possession of the ground floor thereof to respondent immediately. It

also ordered petitioner to pay respondent a monthly rental of P2,000.00 for use or occupancy thereof from April 1988 until the former actually vacates the same and the sum of P50,000.00 as attorney’s fees and cost of suit. The CA found as meritorious respondent’s contention that since petitioner failed to formally offer in evidence any documentary evidence, there is nothing to refute the evidence offered by respondent. It ruled that the trial court’s statement that "defendants’ occupancy of the house is due to a special power of attorney executed by his parents most specially the deceased Florentino Parel who is in fact a co-owner of said building" is wanting of any concrete evidence on record; that said power of attorney was never offered, hence, could not be referred to as petitioner’s evidence to his claim; that except for the bare testimonies of Candelario Regua, the carpenter-foreman, that it was Florentino who constructed the house and Corazon Garcia, the former barangay captain, who testified that the lot was allocated to petitioner’s father, there was no ing document which would sufficiently establish factual bases for the trial court’s conclusion; and that the rule on offer of evidence is mandatory. The CA found the affidavit dated September 24, 1973 of Florentino, petitioner’s father, stating that he is not the owner of the subject house but respondent, as conclusive proof of respondent’s sole ownership of the subject house as it is a declaration made by Florentino against his interest. It also found the tax declarations and official receipts representing payments of real estate taxes of the questioned property covering the period 1974 to 1992 sufficient to establish respondent’s case which constitute at least proof that the holder has a claim of title over the property. Petitioner’s motion for reconsideration was denied in a Resolution dated November 28, 2000.

1avvphil.net

Hence, the instant petition for review on certiorari with the following Assignment of Errors: 1. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN FINDING RESPONDENT AS THE OWNER OF THE BUILDING AT 61 FORBES PARK NATIONAL RESERVATION, NEAR DPS COMPOUND, BAGUIO CITY, NOTWITHSTANDING THE FINDING OF THE REGIONAL TRIAL COURT OF CO-OWNERSHIP BETWEEN THE LATE FLORENTINO PAREL AND RESPONDENT; 2. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN ORDERING PETITIONER TO SURRENDER POSSESSION OF THE GROUND FLOOR OF THE SUBJECT BUILDING TO RESPONDENT; 3. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN ORDERING PETITIONER TO PAY RESPONDENT P2,000.00/MONTH FOR USE OR OCCUPANCY OF THE SUBJECT PREMISES FROM APRIL 1988 UNTIL PETITIONER ACTUALLY VACATES THE SAME; 4. THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN ORDERING PETITIONER TO PAY TO RESPONDENT P50,000.00 ATTORNEY’S FEES AND COSTS OF SUIT; 5. THE HONORABLE COURT OF APPEALS ERRED IN DENYING PETITIONER’S MOTION FOR RECONSIDERATION. 5 Petitioner concedes that while his former counsel failed to make a formal offer of his documentary evidence before the trial court and that the court shall consider no evidence which has not been formally offered, he maintains that the said rule is not absolute, citing the case of Bravo, Jr. v.

Borja; 6 that his documentary evidence which were not formally offered in evidence were marked during the presentation of the testimony of petitioner’s witnesses and were part of their testimonies; that these evidence were part of the memorandum filed by him before the trial court on July 12, 1993. Petitioner insists that even in the absence of the documentary evidence, his testimony as well as that of his witnesses substantiated his claim of co-ownership of the subject house between his late father and respondent as found by the trial court. Petitioner argues that the CA erred in finding the affidavit of petitioner’s father declaring respondent as owner of the subject house as conclusive proof that respondent is the true and only owner of the house since the affidavit should be read in its entirety to determine the purpose for which it was executed. Petitioner further contends that since he had established his father’s co-ownership of the subject house, respondent has no legal right to eject him from the property; that he could not be compelled to pay rentals for residing in the ground floor of the subject house; that respondent should bear his own expenses and be adjudged liable for damages which petitioner sustained for being constrained to litigate. The principal issue for resolution is whether petitioner was able to prove by preponderance of evidence that his father was a co-owner of the subject two-storey residential house. The issue raised by petitioner is mainly factual in nature. In general, only questions of law are appealable to this Court under Rule 45. However, considering that the findings of the RTC and CA are contradictory, the review of the case is in order.7 We agree with the CA that respondent had shown sufficient evidence to his complaint for recovery of possession of the ground floor of the subject house as the exclusive owner thereof. Respondent presented the affidavit dated September 24, 1973 executed by Florentino and sworn to before the Assistant City Assessor of Baguio City, G.F. Lagasca, which reads: I, FLORENTINO PAREL, 42 years of age, employee, and residing at Forbes Park, Reservation No. 1, after having been sworn to according to law depose and say: That he is the occupant of a residential building located at Forbes Park, Reservation No. 1, Baguio City which is the subject of an advicement addressed to him emanating from the Office of the City Assessor, Baguio City, for assessment and declaration for taxation purposes; That I am not the owner of the building in question; That the building in question is owned by Mr. Simeon B. Prudencio who is presently residing at 55 Hyacinth, Roxas District, Quezon City. Further, affiant say not.8 (Underscoring supplied) Section 38 of Rule 130 of the Rules of Court provides:

SEC. 38. Declaration against interest. – The declaration made by a person deceased, or unable to testify, against the interest of the declarant, if the fact asserted in the declaration was at the time it was made so far contrary to the declarant's own interest, that a reasonable man in his position would not have made the declaration unless he believed it to be true, may be received in evidence against himself or his successors-in-interest and against third persons. The theory under which declarations against interest are received in evidence notwithstanding they are hearsay is that the necessity of the occasion renders the reception of such evidence advisable and, further that the reliability of such declaration asserts facts which are against his own pecuniary or moral interest.9 The affiant, Florentino, who died in 1989 was petitioner’s father and had adequate knowledge with respect to the subject covered by his statement. In said affidavit, Florentino categorically declared that while he is the occupant of the residential building, he is not the owner of the same as it is owned by respondent who is residing in Quezon City. It is safe to presume that he would not have made such declaration unless he believed it to be true, as it is prejudicial to himself as well as to his children’s interests as his heirs.10 A declaration against interest is the best evidence which affords the greatest certainty of the facts in dispute.11 Notably, during Florentino’s lifetime, from 1973, the year he executed said affidavit until 1989, the year of his death, there is no showing that he had revoked such affidavit even when a criminal complaint for tres to dwelling had been filed by respondent against him (Florentino) and petitioner in 1988 regarding the subject house which the trial court dismissed due to the absence of evidence showing that petitioner entered the house against the latter’s will and held that the remedy of respondent was to file an action for ejectment; 12 and even when a complaint for unlawful detainer was filed against petitioner and his wife also in 1988 which was subsequently dismissed on the ground that respondent’s action should be an accion publiciana which is beyond the jurisdiction of the Municipal Trial Court.13 Moreover, the building plan of the residential house dated January 16, 1973 was in the name of respondent and his wife. It was established during petitioner’s cross-examination that the existing structure of the two-storey house was in accordance with said building plan. 14 Notably, respondent has been religiously paying the real estate property taxes on the house declared under his name since 1974.15 In fact, petitioner during his cross-examination itted that there was no occasion that they paid the real estate taxes nor declared any portion of the house in their name.16 We agree with the CA that while tax receipts and declarations are not incontrovertible evidence of ownership, they constitute at least proof that the holder has a claim of title over the property.17 The house which petitioner claims to be co-owned by his late father had been consistently declared for taxation purposes in the name of respondent, and this fact, taken with the other circumstances above-mentioned, inexorably lead to the conclusion that respondent is the sole owner of the house subject matter of the litigation. Respondent having established his claim of exclusive ownership of the subject property, it was incumbent upon petitioner to contravene respondent’s claim. The burden of evidence shifted to petitioner to prove that his father was a co-owner of the subject house. We held in Jison v. Court of Appeals, to wit:18

xxx Simply put, he who alleges the affirmative of the issue has the burden of proof, and upon the plaintiff in a civil case, the burden of proof never parts. However, in the course of trial in a civil case, once plaintiff makes out a prima facie case in his favor, the duty or the burden of evidence shifts to defendant to controvert plaintiff's prima facie case, otherwise, a verdict must be returned in favor of plaintiff. Moreover, in civil cases, the party having the burden of proof must produce a preponderance of evidence thereon, with plaintiff having to rely on the strength of his own evidence and not upon the weakness of the defendant’s. The concept of "preponderance of evidence" refers to evidence which is of greater weight, or more convincing, that which is offered in opposition to it; at bottom, it means probability of truth.19 In this case, the records show that although petitioner’s counsel asked that he be allowed to offer his documentary evidence in writing, he, however, did not file the same.20 Thus, the CA did not consider the documentary evidence presented by petitioner. Section 34 of Rule 132 of the Rules of Court provides: Section 34. Offer of evidence. – The court shall consider no evidence which has not been formally offered. The purpose for which the evidence is offered must be specified. A formal offer is necessary because it is the duty of a judge to rest his findings of facts and his judgment only and strictly upon the evidence offered by the parties to the suit. 21 It is a settled rule that the mere fact that a particular document is identified and marked as an exhibit does not mean that it has thereby already been offered as part of the evidence of a party.22 Petitioner insists that although his documentary evidence were not formally offered, the same were marked during the presentation of the testimonial evidence, thus it can properly be taken cognizance of relying in Bravo, Jr. v. Borja.23 Such reliance is misplaced. In Bravo Jr., we allowed evidence on minority by itting the certified true copy of the birth certificate attached to a motion for bail even if it was not formally offered in evidence. This was due to the fact that the birth certificate was properly filed in of a motion for bail to prove petitioner’s minority which was never challenged by the prosecution and it already formed part of the records of the case. The rule referred to in the Bravo case was Section 7 of Rule 133 of the Rules of Court which provides: Section 7. Evidence on motion.- When a motion is based on facts not appearing of record, the court may hear the matter on affidavits or depositions presented by the respective parties, but the court may direct that the matter be heard wholly or partly on oral testimony or depositions. and not Section 34 of Rule 132 of the Rules of Court which is the one applicable to the present case. Even assuming arguendo that the documentary evidence of petitioner should be considered in his favor, the evidence showing that respondent had filed civil and criminal cases against petitioner which were dismissed as well as the alleged Special Power of Attorney of petitioner’s parents whereby they authorized petitioner to stay in the ground floor of the house, did not establish coownership of Florentino and respondent of the subject house. The testimonies of petitioner and his witnesses failed to show that the subject house is co-owned by petitioner’s father and respondent.

Candelario Regua merely testified that he was hired by petitioner’s father, Florentino, to construct the residential building in 1972;24 that he listed the materials to be used for the construction which was purchased by Florentino;25 that he and his men received their salaries every Saturday and Wednesday from Florentino or his wife, respectively; 26 that he had not met nor seen respondent during the whole time the construction was on-going.27 On cross-examination, however, he itted that he cannot tell where the money to buy the materials used in the construction came from. 28 Corazon Garcia merely testified that Florentino started building the house when he was allocated a lot at DPS compound, that she knew Florentino constructed the subject house 29 and never knew respondent. 30 The bare allegation that Florentino was allocated a lot is not sufficient to overcome Florentino’s own affidavit naming respondent as the owner of the subject house. Petitioner himself testified that it was his father who saw the progress of the construction and purchased the materials to be used; 31 and as a young boy he would follow-up some deliveries upon order of his father 32 and never saw respondent in the construction site. The fact that not one of the witnesses saw respondent during the construction of the said house does not establish that petitioner’s father and respondent co-owned the house. We also find that the CA did not err in ordering petitioner to pay respondent being the sole owner of the subject house a monthly rental of P2,000.00 from April 1988, the date of the extra-judicial demand, until petitioner actually vacates the subject house. Although the CA made no ratiocination as to how it arrived at the amount of P2,000.00 for the monthly rental, we find the same to be a reasonable compensation for the use of the ground floor of the subject house which consists of a living room, a dining room, a kitchen and three bedrooms. The rental value refers to the value as ascertained by proof of what the property would rent or by evidence of other facts from which the fair rental value may be determined. 33 We likewise affirm the CA’s award of attorney’s fees in favor of respondent. Article 2208 of the Civil Code allows the recovery of attorney’s fees in cases when the defendant’s act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest 34 and in any other case where the court deems it just and equitable that attorney’s fees and expenses of litigation should be recovered 35 which are both shown in the instant case. WHEREFORE, the decision of the Court of Appeals dated March 31, 2000 and its Resolution dated November 28, 2000 are AFFIRMED. Costs against petitioner. SO ORDERED.

17. Reyes vs. Judge Concepcion (walang digest pero mukha naming interesting tong case na to.. happy reading nalang lol)

G.R. No. 56550 October 1, 1990 MARINA Z. REYES, AUGUSTO M. ZABALLERO and SOCORRO Z. FRANCISCO, petitioners, vs. THE HONORABLE ALFREDO B. CONCEPCION, Presiding Judge, CFI of Cavite, Tagaytay, Br. IV, SOCORRO MARQUEZ VDA. DE ZABALLERO, EUGENIA Z. LUNA, LEONARDO M. ZABALLERO, and ELENA FRONDA ZABALLERO, respondents. Law Firm of Raymundo A. Armovit for petitioners. Leonardo M. Zaballero for private respondents.

CORTÉS, J.: On March 13, 1980, petitioners filed with the CFI a complaint for injunction and damages, docketed as Civil Case No. TG-572, seeking to en private respondents Socorro Marquez Vda. De Zaballero, Eugenia Z. Luna and Leonardo M. Zaballero from selling to a third party their proindiviso shares as co-owners in eight parcels of ed land (covered by TCT Nos. A-1316 to A1322) located in the province of Cavite, with an aggregate area of about 96 hectares. Petitioner claimed that under Article 1620 of the new Civil Code, they, as co-owners, had a preferential right to purchase these shares from private respondents for a reasonable price. On March 17, 1980, respondent trial judge denied the ex parte application for a writ of preliminary injunction, on the ground that petitioners' ed notice of lis pendens was ample protection of their rights. On April 24, 1980, private respondents received the summons and copies of the complaint. Private respondents then filed their answer with counterclaim, praying for the partition of the subject properties. Private respondent Elena Fronda Zaballero filed a motion for intervention dated April 29, 1980, adopting therein her co-respondents answer with counterclaim. At the pre-trial hearing, the parties agreed on the following stipulation of facts: xxx xxx xxx 1. That the plaintiffs, the defendants and the intervenor are the pro-indiviso coowners of the properties cited and described in the complaint; 2. That six and nine tenth (6-9/10) hectares of the land covered by TCT No. T-1319; approximately twelve (12) hectares of that covered by TCT No. T-1320; and the entire parcel of covered by TCT No. T-1321, are subject of expropriation proceedings

instituted by the National Housing Authority (NHA) now pending before this Court in Civil Case Nos. TG-392, TG-396 and TG-417; 3. That based on the evidence presented by the herein parties in the aforecited expropriation cases, the current valuation of the land and the improvements thereon is at P95,132.00 per hectare; 4. That on 16 April 1980, the plaintiffs received a written notice from the defendants and the intervenor that the VOLCANO SECURITIES TRADERS AND AGRIBUSINESS CORPORATION had offered to buy the latter's share in the properties listed in the complaint subject to the following : 1. The selling price shall be net at TWELVE & 50/100 (P12.50) PESOS per square meter, or a total price of NINE MILLION (P9,000,000.00) PESOS for a total area of SEVENTY TWO (72) HECTARES ONLY; 2. A downpayment equivalent to THIRTY (30%) PERCENT of the selling price, or a minimum downpayment of TWO MILLION SEVEN HUNDRED THOUSAND (P2,700,000.00) PESOS; 3. The balance of the purchase price to be payable within THREE (3) YEARS from the date of downpayment in THREE (3) EQUAL, ANNUAL PAYMENTS with interest at the legal rate prevailing at the time of payment; 4. The balance shall be covered by a BANK GUARANTEE of payments and shall not be governed by Art. 1250 of the Civil Code. (Cf. Annexes 1, 2 and 3, Answer) 5. That in said letters (Annexes 1, 2 and 3, Answer), the plaintiffs were requested: a) To exercise their pre-emptive right to purchase defendants' and intervenor's shares under the above-quoted ; or b) To agree to a physical partition of the properties; or c) To sell their shares, tly with the defendants and the intervenor, to the VOLCANO SECURITIES TRADERS AND AGRI-BUSINESS CORPORATION at the price and under the aforequoted. 6. That the VOLCANO SECURITIES TRADERS AND AGRI-BUSINESS CORPORATION is ready, willing and able to purchase not only the aliquot shares of the defendants and the intervenor, but also that of the plaintiffs, in and to all the properties subject of this case, for and in consideration of the net amount of TWELVE and 50/100 (P12.50) PESOS per square meter and under the afore-quoted ; xxx xxx xxx [Annex "C" of the Petition, pp. 1-2, Rollo, pp. 43-44.]

The parties laid down their respective positions, as follows: PLAINTIFFS 1. That the subject properties are incapable of physical partition; 2. That the price of P12.50 per square meter is grossly excessive; 3. That they are willing to exercise their pre-emptive right for an amount of not more that P95,132.00 per hectare, which is the fair and reasonable value of said properties; 4. That the statutory period for exercising their pre-emptive right was suspended upon the filing of the complaint; DEFENDANTS AND INTERVENOR 1. That the reasonable price of the subject properties is P12.50 per square meter; 2. That plaintiffs' right of legal pre-emption had lapsed upon their failure to exercise the same within the period prescribed in Art. 1623 of the Civil Code of the Philippines; 3. That, assuming the soundness of plaintiffs' claim that the price of P12.50 per square meter is grossly excessive, it would be to the best interest of the plaintiffs to sell their shares to the VOLCANO SECURITIES TRADERS AND AGRI-BUSINESS CORPORATION, whose sincerity, capacity and good faith is beyond question, as the same was itted by the parties herein; 4. That the subject properties consisting approximately 95 hectares may be physically partitioned without difficulty in the manner suggested by them to plaintiffs, and as graphically represented in the subdivision plan, which will be furnished in due course to plaintiffs' counsel. [Annex "C" of the Petition, pp. 2-3; Rollo, pp. 44-45.] Based on the foregoing, respondent trial judge rendered a pre-trial order dated July 9, 1980 granting petitioners a period of ten days from receipt of the subdivision plan to be prepared by a competent geodetic engineer within which to express their approval or disapproval of the said plan, or to submit within the same period, if they so desire, an alternative subdivision plan. On July 16, 1980, counsel for private respondents sent to the counsel for petitioners a letter enclosed with a subdivision plan. On August 4, 1980, petitioners filed their comment to the pre-trial order, contending that the question of reasonable value of the subject properties remains a contentious issue of fact ascertainable only after a full trial. Petitioners likewise insisted on their pre- emptive right to purchase private respondents' shares in the co-ownership after due determination of the reasonable price thereof.

Thereafter, counsel for private respondents sent the counsel for petitioners another subdivision plan prepared by a geodetic engineer. Still, no definite communication was sent by petitioners signifying their approval or disapproval to the subdivision plans. In order to settle once and for all the controversy between the parties, private respondents filed a motion dated December 16, 1980 requesting that petitioners be required to formally specify which of the two options under Article 498 of the New Civil Code they wished to avail of: that petitioners' shares in the subject properties be sold to private respondents, at the rate of P12.50 per square meter; or that the subject properties be sold to a third party, VOLCANO LAKEVIEW RESORTS, INC. (claimed to have been erroneously referred to in the pre-trial as VOLCANO SECURITIES TRADERS AND AGRI-BUSINESS CORPORATION) and its proceeds thereof distributed among the parties. Finding merit in the private respondents' request, and for the purpose of determining the applicability of Article 498 of the New Civil Code, respondent trial judge issued an order dated February 4, 1981 which directed the parties to signify whether or not they agree to the scheme of allotting the subject properties to one of the co-owners, at the rate of P12.50 per square meter, or whether or not they know of a third party who is able and willing to buy the subject properties at and conditions more favorable than that offered by VOLCANO LAKEVIEW RESORTS, INC. The order contained a series of questions addressed to all the parties, who were thereupon required to submit their answers thereto. Private respondents filed a "Constancia" expressing that they were willing to allot their shares in the subject properties to Socorro Marquez Vda. de Zaballero, at the rate of P12.50 per square meter, and that they did not know of any other party who was willing and able to purchase the subject properties under more favorable conditions than that offered by VOLCANO LAKEVIEW RESORTS, INC. However, instead of submitting their answers to the queries posed by respondent trial judge, petitioners filed a motion for clarification as to the true identity of the third party allegedly willing to purchase the subject properties. On February 26, 1981, respondent trial judge rejected petitioners' motion on the ground that it was irrelevant. Thereupon, on February 27, 1981, petitioners filed a pleading captioned "Compliance and Motion", (1) reiterating the relevance of ascertaining the true identity of the third party buyer, VOLCANO SECURITIES TRADERS AND AGRI-BUSINESS CORPORATION or VOLCANO LAKEVIEW RESORTS, INC., (2) expressing their view that there is actually no bona fide and financially able third party willing to purchase the subject properties at the rate of P12.50 per square meter, and, (3) once again insisting on their pre-emptive right to purchase the shares of private respondents in the co-ownership at a "reasonable price", which is less than that computed excessively by the latter at the rate of P12.50 per square meter. Petitioners therein prayed that further proceedings be conducted in order to settle the factual issue regarding the reasonable value of the subject properties. On March 16, 1981, respondent trial judge issued an order denying petitioners' motion. The judge ruled that petitioners did not possess a pre-emptive right to purchase private respondents' shares in the co-ownership. Thus, finding that the subject properties were essentially indivisible, respondent trial judge ordered the holding of a public sale of the subject properties pursuant to Article 498 of the New Civil Code. A notice of sale was issued setting the date of public bidding for the subject properties on April 13, 1981.

Petitioners then filed a motion for reconsideration from the above order. Respondent trial judge reset the hearing on petitioners' motion for reconsideration to April 6, 1981, and moved the scheduled public sale to April 14, 1981. Without awaiting resolution of their motion for reconsideration, petitioners filed the present petition for certiorari, alleging that the respondent trial judge acted without jurisdiction, or in grave abuse of its discretion amounting to lack of jurisdiction, in issuing his order dated March 16, 1981 which denied petitioners' claim of a pre-emptive right to purchase private respondents' pro-indiviso shares and which, peremptorily ordered the public sale of the subject properties. On April 8, 1981, this Court issued a temporary restraining order ening the sale of the subject properties at public auction. With the comment and reply, the Court considered the issues ed and the case submitted for decision. The Court finds no merit in the present petition. The attack on the validity of respondent trial judge's order dated March 16, 1981 is ultimately premised on petitioners' claim that they had a pre-emptive right to purchase the pro-indiviso shares of their co-owners, private respondents herein, at a "reasonable price". It is this same claim which forms the basis of their complaint for injunction and damages filed against private respondents in the court a quo. This claim is patently without basis. In this jurisdiction, the legal provisions on co-ownership do not grant to any of the owners of a property held in common a pre-emptive right to purchase the proindiviso shares of his co-owners. Petitioners' reliance on Article 1620 of the New Civil Code is misplaced. Article 1620 provides: A co-owner of a thing may exercise the right of redemption in case the shares of all the co-owners or of any of them, are sold to a third person. If the price of the alienation is grossly excessive, the redemptioner shall pay only a reasonable one. Should two or more co-owners desire to exercise the right of redemption, they may only do so in proportion to the share they may respectively have in the thing owned in common [Emphasis supplied]. Article 1620 contemplates of a situation where a co-owner has alienated his pro-indiviso shares to a stranger. By the very nature of the right of "legal redemption", a co-owner's light to redeem is invoked only after the shares of the other co-owners are sold to a third party or stranger to the coownership [See Estrada v. Reyes, 33 Phil. 31 (1915)]. But in the case at bar, at the time petitioners filed their complaint for injunction and damages against private respondents, no sale of the latter's pro-indiviso shares to a third party had yet been made. Thus, Article 1620 of the New Civil Code finds no application to the case at bar. There is likewise no merit to petitioners' contention that private respondents had acknowledged the pre-emptive right of petitioners to purchase their shares at a "reasonable price". Although it appears that private respondents had agreed to sell their pro-indiviso shares to petitioners, the offer was made at a fixed rate of P12.50 per square meter [See Pre-trial Order dated July 9, 1980, Annex "C" of the Petition; Rollo, pp. 43-45]. It cannot be said that private respondents had agreed, without qualification, to sell their shares to petitioners. Hence, petitioners cannot insist on a right to purchase the shares at a price lower than the selling price of private respondents.

Neither do petitioners have the legal right to en private respondents from alienating their proindiviso shares to a third party. The rights of a co-owner of a property are clearly specified in Article 493 of the New Civil Code, thus: Art. 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation of the mortgage, with respect to the coowners shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. The law does not prohibit a co-owner from selling, alienating or mortgaging his ideal share in the property held in common. The law merely provides that the alienation or mortgage shall be limited only to the portion of the property which may be allotted to him upon termination of the co-ownership [See Mercado v. Liwanag, G.R. No. L-14429, June 30, 1962, 5 SCRA 472; PNB v. The Honorable Court of Appeals, G.R. No. L-34404, June 25, 1980, 98 SCRA 207; Go Ong v. The Honorable Court of Appeals, G.R. No. 75884, September 24, 1987, 154 SCRA 270,] and, as earlier discussed, that the remaining co-owners have the right to redeem, within a specified period, the shares which may have been sold to the third party. [Articles 1620 and 1623 of the New Civil Code.] Considering the foregoing, the Court holds that respondent trial judge committed no grave abuse of discretion when he denied petitioners' claim of a pre-emptive right to purchase private respondents' pro-indiviso shares. Moreover, there is no legal infirmity tainting respondent trial judge's order for the holding of a public sale of the subject properties pursuant to the provisions of Article 498 of the New Civil Code. After a careful examination of the proceedings before respondent trial judge, the Court finds that respondent trial judge's order was issued in accordance with the laws pertaining to the legal or juridical dissolution of co-ownerships. It must be noted that private respondents, in their answer with counterclaim prayed for, inter alia, the partition of the subject properties in the event that the petitioners refused to purchase their proindiviso shares at the rate of P12.50 per square meter. Unlike petitioners' claim of a pre-emptive right to purchase the other co-owners' pro-indiviso shares, private respondents' counterclaim for the partition of the subject properties is recognized by law, specifically Article 494 of the New Civil Code which lays down the general rule that no co-owner is obliged to remain in the co-ownership. Article 494 reads as follows: No co-owner shall be obliged to remain in the co-ownership. Each co-owner may demand at any time 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 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. None of the legal exceptions under Article 494 applies to the case at bar. Private respondents' counterclaim for the partition of the subject properties was therefore entirely proper. However, during the pre-trial proceedings, petitioners adopted the position that the subject properties were incapable of physical partition. Initially, private respondents disputed this position. But after petitioners inexplicably refused to abide by the pretrial order issued by respondent trial judge, and stubbornly insisted on exercising an alleged pre-emptive right to purchase private respondents' shares at a "reasonable price", private respondents relented and adopted petitioner's position that the partition of the subject properties was not economically feasible, and, consequently, invoked the provisions of Article 498 of the New Civil Code [Private respondents' "Motion To Allot Properties To Defendants Or To Sell the Same Pursuant To Article 498 Of The Civil Code", Annex "D" of the Petition; Rollo, pp. 4649]. Inasmuch as the parties were in agreement as regards the fact that the subject properties should not be partitioned, and private respondents continued to manifest their desire to terminate the coownership arrangement between petitioners and themselves, respondent trial judge acted within his jurisdiction when he issued his order dated February 4, 1981 requiring the parties to answer certain questions for the purpose of determining whether or not the legal conditions for the applicability of Article 498 of the New Civil Code were present in the case. Art. 498 provides that: Whenever the thing is essentially indivisible and the co-owners cannot agree that it be alloted to one of them who shall indemnify the others, it shall be sold and its proceeds distributed. The sale of the property held in common referred to in the above article is resorted to when (1) the right to partition the property among the co-owners is invoked by any of them but because of the nature of the property, it cannot be subdivided or its subdivision [See Article 495 of the New Civil Code] would prejudice the interests of the co-owners (See Section 5 of Rule 69 of the Revised Rules of Court) and (2) the co-owners are not in agreement as to who among them shall be allotted or assigned the entire property upon reimbursement of the shares of the other co-owners. Petitioners herein did not have justifiable grounds to ignore the queries posed by respondent trial judge and to insist that hearings be conducted in order to ascertain the reasonable price at which they could purchase private respondents' pro-indiviso shares [Petitioners' "Compliance and Motion" dated February 27, 1981, Annex "H" of the Petition; Rollo, pp. 57-60]. Since at this point in the case it became reasonably evident to respondent trial judge that the parties could not agree on who among them would be allotted the subject properties, the Court finds that respondent trial judge committed no grave abuse of discretion in ordering the holding of a public sale for the subject properties (with the opening bid pegged at P12.50 per square meter), and the distribution of the proceeds thereof amongst the co-owners, as provided under Article 498 of the New Civil Code. Contrary to petitioners' contention, there was no need for further hearings in the case because it is apparent from the various allegations and issions of the parties made during the pre-trial proceedings, and in their respective pleadings, that the legal requisites for the application of Article 498 of the New Civil Code were present in the case. No factual issues remained to be litigated upon.

WHEREFORE, the present petition is DISMISSED for lack of merit. The temporary restraining order issued by the Court is hereby LIFTED. SO ORDERED.

18. PAMPLONA VS MORETO (DIGEST) Pamplona vs moreto siya and not MORATO..

Pamplona v. Moreto No. L-33187

March 31, 1980

Facts: Flaviano Moreto and Monica Maniega, a husband and wife, who acquired adjacent lots nos. 1495, 4545, and 1496 of the Calamba Friar Land Estate covered by certificates of title issued in the name of Flaviano Moreto married to Monica Maniega. They had 6 children who left heirs after their death as well as became co-heirs with respect to the property owned by Flaviano and Monica. More than 6 yrs after Monica Maniega’s death, Flaviano sold lot 1495 for P900 to spouses Pamplona without the consent of his heirs and without any liquidation of the conjugal partnership. The spouses Pamplona constructed their house on the eastern part of lot 1496 as it was pointed out by Flaviano which was a mistake on the part of both seller and buyer. Flaviano died intestate on August 12, 1956 and in 1961, the plaintiffs demanded on the defendants to vacate the premises where they had their house and piggery on the ground that Flaviano had no right to sell the lot which he sold to Pamplona as the same belongs to the conjugal partnership. The spouses Pamplona refused to vacate the premises and this suit was instituted by the heirs of Monica Maniega seeking for the declaration of nullity of the deed of sale executed in the former’s favor. The RTC ruled in favor of the plaintiff declaring null and void the sale with respect to 390.5 sq.m. of the total 781 sq.m. of which is rightfully owned by the plaintiffs. The RTC decision was affirmed by the CA; hence, this petition was instituted appealing the decision of the CA. Issue: Whether or not the petitioners are entitled to the full ownership of the property in litigation, or only ½ of the same? Held: Yes, they are entitled to the full ownership of the property in litigation because at the time of the sale, the co-owner (Flaviano) as vendor pointed out its location and even indicated the boundaries over which the fences were to be erected without objection. Despite the fact that at the time of sale, there was no partition of the subject property between the co-owners and Flaviano, as vendor, had ownership of an undetermined portion of the hereditary estate which he had a perfect and legal right to dispose of to the Spouse Pamplona. According to Art. 776, the inheritance which private respondents may receive from their deceased parents includes all the property, rights and obligations of a person which are not extinguished by their parent’s

death. In addition, under Art. 1311 of the NCC, the contract of sale executed by Flaviano took effect between the parties, their assigns and heirs which includes the private respondents; therefore, they must comply with said obligation. The petition is affirmed with modification with respect to the fact that the sale executed in favor of Spouses Pamplona is legal and valid in its entirety.

19. DE CASTRO VS ATIENZA (walang digest at maraming ibang same case name na lumalabas pero different ang gr number, pero maikli lang to super. Full text na.)

G.R. No. L-25014 October 17, 1973 DOLORES LAHORA VDA. DE CASTRO, ARSENIO DE CASTRO, JR., WILFREDO DE CASTRO, IRINEO DE CASTRO and VIRGINIA DE CASTRO ALEJANDRO, (in substitution for the deceased defendant-appellant ARSENIO DE CASTRO, SR.)., petitioners, vs. GREGORIO ATIENZA, respondent. Arsenio de Castro, Jr. and F.T. Papa for petitioners. Dakila Castro and Z.D. de Mesa for respondent.

TEEHANKEE, J.: The Court rejects petitioners' appeal as without merit and affirms the judgment of the appellate court. Petitioners' predecessor-in-interest as co-owner of an undivided one-half interest in the fishpond could validly lease his interest to a third party, respondent Atienza, independently of his co-owner (although said co-owner had also leased his other undivided one-half interest to the same third party) and could likewise by mutual agreement independently cancel his lease agreement with said third party. Said predecessor-in-interest (and petitioners who have substituted him as his heirs) therefore stands liable on his express undertaking to refund the advance rental paid to him by the lessee on the cancelled lease and cannot invoke the non-cancellation of the co-owner's lease to elude such liability. The Court of Appeals, in its decision affirming in toto the judgment of the Manila court of first instance ordering therein defendant-appellant Arsenio de Castro, Sr. (now deceased and substituted by above-named petitioners as his heirs) "to return to the plaintiff (respondent) Gregorio Atienza the sum P2,500.00 with legal interest from the date of the filing of complaint until fully paid plus the sum of P250.00 as attorney's fees and the costs of the suit", found the following facts to undisputed: On January 24, 1956 the brothers Tomas de Castro and Arsenio de Castro, Sr. leased to plaintiff a fishpond containing an area of 26 hectares situated in Polo, Bulacan and forming part of a bigger parcel of land covered by Transfer Certificate of Title No. 196450 of the registry of the property of Bulacan. The lessors are co-owners in equal shares of the leased property.

According to the contract of lease (Exh. 1) the term of the lease was for five years from January 24, 1956 at a rental of P5,000 a year, the first year's rental to be paid on February 1, 1956, the second on February 1, 1957 and the rental for the last three years on February 1, 1958. The first year's rental was paid on time. In the meantime, Tomas de Castro died. In the month of November, 1956, plaintiff as lessee and defendant Arsenio de Castro, Sr. as one of the lessors, agreed to set aside and annul the contract of lease and for this purpose an agreement (Exh. A) was signed by them, Exhibit A as signed by plaintiff and defendant shows that Felisa Cruz Vda. de Castro, widow of Tomas de Castro, was intended to be made a party thereof in her capacity as representative of the heirs of Tomas Castro. Condition No. 2 of Exhibit A reads as follows: "2. Na sa pamamagitan nito ay pinawawalang kabuluhan namin ang nasabing kasulatan at nagkasundo kami na ang bawat isa sa amin ni Arsenio de Castro at Felisa Cruz Vda. de Castro ay isauli kay GREGORIO ATIENZA ang tig P2,500.00 o kabuuang halagang P5,000.00 na paunang naibigay nito alinsunod sa nasabing kasulatan; na ang nasabing tig P2,500.00 ay isasauli ng bawat isa sa amin sa o bago dumating ang Dec. 30, 1956." Felisa Cruz Vda. de Castro refused to sign Exhibit A. Defendant did not pay the P2,500.00 which under the above-quoted paragraph of Exhibit A, he should have paid on December 30, 1956. Demand for payment was made by plaintiff's counsel on January 7, 1957 but to no avail, hence the present action. On the conflicting contentions between the parties as to who between them would attend to securing the signature of Mrs. Felisa Cruz Vda. de Castro (widow of Tomas de Castro) to the agreement of cancellation of the lease with respondent Atienza, the appellate court found that "the testimony of the defendant (Arsenio de Castro, Sr.) ... s the contention of the plaintiff (Atienza) "that it was the defendant Arsenio who was interested and undertook to do so, citing Arsenio's own declaration that "I agreed to sign this document (referring to the cancellation) because of my desire to cancel our original agreement" and that his purpose in obtaining the cancellation of said lease agreement with plaintiff Atienza was "(B)ecause I had the intention of having said fishpond leased to other persons and I cannot lease it to third parties unless I can secure the signature of Felisa Vda. de Castro." The appellate court thus held in effect that as Arsenio "was the one interested in cancelling the lease (Exh. 1), it stands to reason that he most probably undertook to obtain the signature of Mrs. Castro [widow and successor-in-interest of his brother Tomas]" and that he could not invoke his own failure to obtain such signature to elude his own undertaking and liability to refund respondent (plaintiff) his share of the rental paid in advance by respondent on the cancelled lease in the sum of P2,500.00. The appellate court furthermore correctly held that the consent or concurrence of Felisa Vda. de Castro (as co-owner in succession of Tomas) was not an essential condition to the validity and effectivity of the agreement of cancellation of the lease (Exhibit A) as between Arsenio and respondent-lessee, contrary to petitioners' claim, holding that "(S)ince there is no specific provision in Exhibit A ing defendant's claim, we are not prepared to supply such condition unless the same can be deduced from other evidence or unless the of Exhibit A cannot be performed by plaintiff and defendant without Mrs. Castro being bound as a party thereto."

The issue is simply reduced to whether Arsenio as co-owner of the fishpond owned pro-indiviso by him with his brother Tomas (succeeded by Felisa Vda. de Castro) could validly lease his half-interest to a third party (respondent Atienza) independently of his co-owner, and in case his co-owner also leased his other half interest to the same third party, whether Arsenio could cancel his own lease agreement with said third party? The appellate court correctly resolved the issue thus: "Our view of the contract of lease Exhibit 1 is that each of the Castro brothers, leased his undivided one-half interest in the fishpond they owned in common to the plaintiff. Could one of them have validly leased his interest without the other coowner leasing his own? The answer to this is given by appellant in his own brief (p. 14) when he said that it would result in a partnership between the lessee and the owner of the other undivided half. If the lease could be entered into partially by one of the co-owners, insofar as his interest is concerned, then the lease, Exhibit 1, can also be cancelled partially as between plaintiff and defendant. Therefore, we conclude that the consent of Mrs. Felisa Cruz Vda. de Castro is not essential for the cancellation of the lease of defendant's one-half undivided share in the fishpond to plaintiff." The appellate court's judgment is fully ed by the Civil Code provisions on the rights and prerogatives of co-owners, and specifically by Article 493 which expressly provides that Art. 493. Each co-owner shall have the full ownership of his part and of the fruits and benefitspertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the coowners, shall be limited to the portion which may be alloted to him in the division upon the termination of the co-ownership. * ACCORDINGLY, the appealed judgment is hereby affirmed with costs against petitioners. Makalintal, Actg. C.J., Zaldivar, Castro, Fernando, Barredo, Makasiar, Antonio and Esguerra, JJ., concur.

20. Estoque vs pajimula. (wala din digest pero short lang din to. Love you babe!) ikaw nalang mag edit ha hehe para umikli ung buong document.

G.R. No. L-24419

July 15, 1968

LEONORA ESTOQUE, plaintiff-appellant, vs. ELENA M. PAJIMULA, assisted by her husband CIRIACO PAJIMULA, defendants-appellees. Jesus P. Mapanao for plaintiff-appellant. Vergara and Dayot for defendants-appellees. REYES, J.B.L., J.: Direct appeal from an order of the Court of First Instance of La Union, in its Civil Case No. 1990, granting a motion to dismiss the complaint for legal redemption by a co-owner (retracto legal de comuneros) on of failure to state a cause of action. The basic facts and issues are stated in the decision appealed from, as follows: Plaintiff based her complaint for legal redemption on a claim that she is a co-owner of Lot No. 802, for having purchased 1/3 portion thereof, containing an area of 640 square meters as evidenced by a deed of sale, Annex "A", which was executed on October 28, 1951 by Crispina Perez de Aquitania, one of the co-owners, in her favor. On the other hand, the defendant, who on December 30, 1959 acquired the other 2/3 portion of Lot No. 802 from Crispina Aquitania and her children, claimed that the plaintiff bought the 1/3 southeastern portion, which is definitely identified and segregated, hence there existed no co-ownership at the time and after said plaintiff bought the aforesaid portion, upon which right of legal redemption can be exercised or taken advantage of. From the complaint, it would appear that Lot No. 802 of the Cadastral survey of Rosario, covered by original certificate of title No. RO-2720 (N.A.) was originally owned by the late spouses, Rosendo Perez and Fortunata Bernal, who were survived by her children, namely, Crispina Perez, Lorenzo Perez and Ricardo Perez. Ricardo Perez is also now dead. On October 28, 1951, Crispina P. Vda. de Aquitania sold her right and participation in Lot No. 802 consisting of 1/3 portion with an area of 640 square meters to Leonora Estoque (Annex A of the complaint). On October 29, 1951, Lorenzo Perez, Crispina Perez and Emilia P. Posadas, widow of her deceased husband, Ricardo Perez for herself and in behalf of her minor children, Gumersindo, Raquel, Emilio and Ricardo, Jr., executed a deed of extrajudicial settlement wherein Lorenzo Perez, Emilia P. Posadas and her minor children assigned all their right, interest and participation in Lot No. 802 to Crispina Perez (Annex B of the complaint). On December 30, 1959, Crispina Perez and her children Rosita Aquitania Belmonte, Remedios Aquitania Misa, Manuel Aquitania, Sergio Aquitania and Aurora Aquitania sold to Elena Pajimula, the remaining 2/3 western portion of Lot No. 802 with an area of 958 square meters (Annex C of the complaint).

The action of the plaintiff is premised on the claim of co-ownership. From the deed of sale executed in favor of the plaintiff, it can be seen that the 1/3 portion sold to plaintiff is definitely identified as the 1/3 portion located on the southeastern part of Lot No. 802 and specifically bounded on the north by De Guzman Street, on the east by Posadas Street, on the south by Perez Street, and on the west by remaining portion of the same lot, which contained an area of 640 square meters. And in the deed of sale executed by Crispina Perez and her children in favor of defendant Elena Pajimula over the remaining 2/3 portion of Lot No. 802, said portion is identified as the western portion of Lot No. 802 which is bounded on the north by De Guzman Street, on the east by properties of Leonarda Estoque, on the south by the national road and on the west by Lots Nos. 799 and 801, containing an area of 598 square meters. The appellant's stand is that the deed in her favor was inoperative to convey the southeastern third of Lot 802 of the Rosario Cadastre notwithstanding the description in the deed itself, for the reason that the vendor, being a mere co-owner, had no right to sell any definite portion of the land held in common but could only transmit her undivided share, since the specific portion corresponding to the selling co-owner is not known until partition takes place (Lopez vs. Ilustre, 5 Phil. 567; Ramirez vs. Bautista, 14 Phil. 528). From this premise, the appellant argues that the sale in her favor, although describing a definite area, should be construed as having conveyed only the undivided 1/3 interest in Lot 802 owned at the time by the vendor, Crispina Perez Vda. de Aquitania. Wherefore, when the next day said vendor acquired the 2/3 interest of her two other co-owners, Lot 802 became the common property of appellant and Crispina Perez. Therefore, appellant argues, when Crispina sold the rest of the property to appellee Pajimula spouses, the former was selling an undivided 2/3 that appellant, as co-owner, was entitled to redeem, pursuant to Article 1620 of the New Civil Code. ART. 1620. A co-owner of a thing may exercise the right of redemption in case the shares of all the other co-owners or of any of them, are sold to a third person. If the price of the alienation is grossly excessive the redemptioner shall pay only a reasonable one. Should two or more co-owners desire to exercise the right of redemption, they may only do so in proportion to the share they may respectively have in the thing owned in common. The lower court, upon motion of defendant, dismissed the complaint, holding that the deeds of sale show that the lot acquired by plaintiff Estoque was different from that of the defendants Pajimula; hence they never became co-owners, and the alleged right of legal redemption was not proper. Estoque appealed. We find no error in the order of dismissal, for the facts pleaded negate the claim that appellant Estoque ever became a co-owner of appellees Pajimula. (1) The deed of sale to Estoque (Annex A of the complaint) clearly specifies the object sold as the southeastern third portion of Lot 802 of the Rosario Cadastre, with an area of 840 square meters, more or less. Granting that the seller, Crispina Perez Vda. de Aquitania could not have sold this particular portion of the lot owned in common by her and her two brothers, Lorenzo and Ricardo Perez, by no means does it follow that she intended to sell to appellant Estoque her 1/3 undivided interest in the lot forementioned. There is nothing in the deed of sale to justify such inference. That the seller could have validly sold her one-third undivided interest to appellant is no proof that she did choose to sell the same. Ab posse ad actu non valet illatio. (2) While on the date of the sale to Estoque (Annex A) said contract may have been ineffective, for lack of power in the vendor to sell the specific portion described in the deed, the transaction was validated and became fully effective when the next day (October 29, 1951) the vendor, Crispina

Perez, acquired the entire interest of her remaining co-owners (Annex B) and thereby became the sole owner of Lot No. 802 of the Rosario Cadastral survey (Llacer vs. Muñoz, 12 Phil. 328). Article 1434 of the Civil Code of the Philippines clearly prescribes that — . When a person who is not the owner of a thing sells or alienates and delivers it, and later the seller or grantor acquires title thereto, such title es by operation of law to the buyer or grantee." Pursuant to this rule, appellant Estoque became the actual owner of the southeastern third of lot 802 on October 29, 1951. Wherefore, she never acquired an undivided interest in lot 802. And when eight years later Crispina Perez sold to the appellees Pajimula the western two-thirds of the same lot, appellant did not acquire a right to redeem the property thus sold, since their respective portions were distinct and separate. IN VIEW OF THE FOREGOING, the appealed order of dismissal is affirmed. Costs against appellant Estoque. 1äwphï1