G.R. No.

196470, April 20, 2016

ROSARIO VICTORIA AND ELMA PIDLAOAN, Petitioners, v. NORMITA JACOB

PIDLAOAN, HERMINIGILDA PIDLAOAN AND EUFEMIA PIDLAOAN, Respondents.

DECISION

BRION, J.:

We resolve the petition for review on certiorari filed by petitioners to challenge

the March 26, 2010decision1 and March 15, 2011 resolution of the Court of Appeals
(CA) in CA-G.R. CV No. 89235. The Regional Trial Court's (RTC) ruled that Elma
Pidlaoan (Elma) donated only half of the property to Normita Jacob Pidlaoan (Normita).
The CA reversed the RTC's decision and ruled that Elma donated her entire property to
Normita. The Court is called upon to ascertain the true nature of the agreement
between Elma and Normita.

THE ANTECEDENTS

The petitioners Rosario Victoria (Rosario) and Elma lived together since 1978 until
Rosario left for Saudi Arabia.

In 1984, Elma bought a parcel of land with an area of 201 square meters in Lucena City
and was issued Transfer Certificate of Title (TCT) No. T-50282.2 When Rosario came
home, she caused the construction of a house on the lot but she left again after the
house was built.3

Elma allegedly mortgaged the house and lot to a certain Thi Hong Villanueva in
1989.4 When the properties were about to be foreclosed, Elma allegedly asked for help
from her sister-in-law, Eufemia Pidlaoan (Eufemia), to redeem the property.5 On her
part, Eufemia called her daughter abroad, Normita, to lend money to Elma. Normita
agreed to provide the funds.6

Elma allegedly sought to sell the land.7 When she failed to find a buyer, she offered to
sell it to Eufemia or her daughter.8

On March 21, 1993, Elma executed a deed of sale entitled "Panananto ng

Pagkatanggap ng Kahustuhang Bayad" transferring the ownership of the lot to
Normita.9 The last provision in the deed of sale provides that Elma shall eject the
person who erected the house and deliver the lot to Normita.10The document was
signed by Elma, Normita, and two witnesses but it was not notarized.

When Elma and Normita were about to have the document notarized, the notary public
advised them to donate the lot instead to avoid capital gains tax.11 On the next day,
Elma executed a deed of donationin Normita's favor and had it notarized. TCT No. T-
50282 was cancelled and TCT No. T-70990 was issued in Normita's name.12 Since
then, Normita had been paying the real property taxes over the lot but Elma continued
to occupy the house.

Rosario found out about the donation when she returned to the country a year or two
after the transaction.13

In 1997, the petitioners filed a complaint for reformation of contract, cancellation of

TCT No. T-70990, and damages with prayer for preliminary injunction against Eufemia,
Normita, and Herminigilda Pidlaoan (respondents).

The petitioners argued that: first, they co-owned the lot because both of them
contributed the money used to purchase it; second, Elma and Normita entered into an
equitable mortgage because they intended to constitute a mortgage over the lot to
secure Elma's loan but they executed a deed of sale instead; and third, the deed of
donation was simulated because Elma executed it upon the notary public's advice to
avoid capital gains tax.14

In their answer, the respondents admitted that the deed of donation was simulated and
that the original transaction was a sale.15 They argued, however, that there was no
agreement to constitute a real estate mortgage on the lot.16

The RTC ruled that Rosario and Elma co-owned the lot and the house.17 Thus, Elma
could only donate her one-half share in the lot.18

Hence, the respondents appealed to the CA.

THE CA RULING

The CA reversed the RTC's decision and dismissed the petitioners' complaint.

The CA held that Elma and Normita initially entered into two agreements: a loan and a
sale. They entered into a loan agreement when Elma had to pay Thi Hong Villanueva to
redeem the property. Thereafter, Elma sold the property to Normita. They subsequently
superseded the contract of sale with the assailed deed of donation.

The CA also held that the deed of donation was not simulated. It was voluntarily
executed by Elma out of gratitude to Normita who rescued her by preventing the
foreclosure of the lot. Moreover, the deed of donation, being a public document, enjoys
the presumption of regularity. Considering that no conclusive proof was presented to
rebut this presumption, the deed of donation is presumed valid.

The CA denied the petitioners' motion for reconsideration; hence, this petition.

THE PETITIONERS' ARGUMENTS

In their petition, the petitioners argue that: (1) Rosario is a co-owner because she
caused the construction of the house, which has a higher market value than the lot; (2)
the deed of donation is simulated; (3) the transaction was a mere equitable mortgage;
and (4) the CA unduly disturbed the RTC's factual findings. The petitioners emphasize
that the respondents have consistently admitted in their answer that the deed of
donation was simulated; therefore, the CA should not have reversed the RTC's decision
on that point.

In their three-page comment, the respondents insist that the CA correctly dismissed the
complaint. They stressed that the petitioners were the ones who argued that the deed of
donation was simulated but the CA ruled otherwise. Furthermore, the petition involves
questions of facts and law outside the province of the Supreme Court. Hence, the
petition must be dismissed.

THE COURT'S RULING

We PARTIALLY GRANT the petition.

The issues before the Court are: (1) whether Rosario is a co-owner; (2) whether the
deed of donation was simulated; and (3) whether the transaction between Elma and
Normita was a sale, a donation, or an equitable mortgage. Considering that these
issues are inter-related, we shall jointly discuss and resolve them.

At the outset, we note that the issues raised by the petitioners in the present case
require a review of the factual circumstances. As a rule, only questions of law may be
raised in a petition for review on certiorariunder Rule 45 of the Rules of Court.

The Court distinguished between a question of law and a question of fact in a number of
cases. A question of law arises when there is doubt on what the law is on a certain set
of fact, while a question of fact exists when there is doubt as to the truth or falsity of the
alleged facts.19 For a question to be one of law, it must not involve an examination of
the probative value of the evidence presented by the litigants.20 If the issue invites a
review of the evidence on record, the question posed is one of fact.21

The factual findings of the CA are conclusive and binding and are not reviewable by the
Court, unless the case falls under any of the recognized exceptions.22 One of these
exceptions is when the findings of the RTC and the CA are contradictory, as in the
present case.

By granting the appeal and dismissing the petitioners' complaint, the CA effectively
ruled that the transfer of ownership involved the entire lot rather than only half of it as
the RTC held. The lower courts' differing findings provide us sufficient reason to
proceed with the review of the evidence on record.23

First, we rule that Elma transferred ownership of the entire lot to Normita.

One who deals with property registered under the Torrens system has a right to rely on
what appears on the face of the certificate of title and need not inquire further as to the
property's ownership.24 A buyer is charged with notice only of the claims annotated on
the title.25 The Torrens system was adopted to best guarantee the integrity of land titles
and to protect their indefeasibility once the claim of ownership is established and
recognized.26

In the present case, the records of the case show that Elma alone purchased the lot in
1984 from its previous owners.27 Accordingly, TCT No. T-50282 was issued solely in her
name. Thus, Normita bought the lot relying on the face of the TCT that Elma and no
other person owned it.

We acknowledge that registration under the Torrens system does not create or vest
title. A certificate of title merely serves as an evidence of ownership in the property.
Therefore, the issuance of a certificate of title does not preclude the possibility that
persons not named in the certificate may be co-owners of the real property, or that the
registered owner is only holding the property in trust for another person.28

In the present case, however, the petitioners failed to present proof of Rosario's
contributions in purchasing the lot from its previous owners. The execution of the
transfer documents solely in Elma's name alone militate against their claim of co-
ownership. Thus, we find no merit in the petitioners' claim of co-ownership over the lot.

At this point, we address the petitioners' claim that Rosario co-owned the lot with Elma
because the value of the house constructed by Rosario on it is higher than the lot's
value. We find this argument to be erroneous.

We hold that mere construction of a house on another's land does not create a co-
ownership. Article 484 of the Civil Code provides that co-ownership exists when the
ownership of an undivided thing or right belongs to different persons. Verily, a house
and a lot are separately identifiable properties and can pertain to different owners, as in
this case: the house belongs to Rosario and the lot to Elma.

Article 448 of the Civil Code provides that if a person builds on another's land in good
faith, the land owner may either: (a) appropriate the works as his own after paying
indemnity; or (b) oblige the builder to pay the price of the land. The law does not force
the parties into a co-ownership.29 A builder is in good faith if he builds on a land
believing himself to be its owner and is unaware of the defect in his title or mode of
acquisition.30

As applied in the present case, Rosario's construction of a house on the lot did not
create a co-ownership, regardless of the value of the house. Rosario, however, is not
without recourse in retrieving the house or its value. The remedies available to her are
set forth in Article 448 of the Civil Code.

Second, on the nature of the transaction between Elma and Normita, we find that
the deed of donation was simulated and the parties' real intent was to enter into a sale.

The petitioners argue that the deed of donation was simulated and that the parties
entered into an equitable mortgage.31 On the other hand, the respondents deny the
claim of equitable mortgage32 and argue that they validly acquired the
property via sale.33 The RTC ruled that there was donation but only as to half of the
property. The CA agreed with the respondents that the deed of donation was not
simulated, relying on the presumption of regularity of public documents.

We first dwell on the genuineness of the deed of donation. There are two types of
simulated documents - absolute and relative. A document is absolutely simulated when
the parties have no intent to bind themselves at all, while it is relatively simulated when
the parties concealed their true agreement.34 The true nature of a contract is determined
by the parties' intention, which can be ascertained from their contemporaneous and
subsequent acts.35

In the present case, Elma and Normita's contemporaneous and subsequent acts show
that they were about to have the contract of sale notarized but the notary public ill-
advised them to execute a deed of donation instead. Following this advice, they
returned the next day to have a deed of donation notarized. Clearly, Elma and Normita
intended to enter into a sale that would transfer the ownership of the subject matter of
their contract but disguised it as a donation. Thus, the deed of donation subsequently
executed by them was only relatively simulated.

The CA upheld the deed of donation's validity based on the principle that a notarized
document enjoys the presumption of regularity. This presumption, however, is
overthrown in this case by the respondents' own admission in their answer that the deed
of donation was simulated.

Judicial admissions made by a party in the course of the proceedings are conclusive
and do not require proof.36 Notably, the respondents explicitly recognized in their
answer that the deed of donation was simulated upon the notary public's advice and
that both parties intended a sale.37

In paragraphs 5 and 6 of the answer,38 the respondents stated thus:

chanRoblesvirtualLawlibrary
5. That defendants admit the allegations in paragraph 9 which readily acknowledges
that there was indeed an agreement to sell the property of plaintiff, Elma Pidlaoan to
defendant, Normita Pidlaoan (Normita, for brevity) for which a Deed of Absolute Sale
was drafted and executed;

6. That defendants admit the simulation of the Deed of Donation in paragraph 10 of

the Complaint, but deny the remainder, the truth being that Elma Pidlaoan herself
offered her property for sale in payment of her loans from Normita. (Emphasis supplied)
Having admitted the simulation, the respondents can no longer deny it at this stage. The
CA erred in disregarding this admission and upholding the validity of the deed of
donation.

Considering that the deed of donation was relatively simulated, the parties are bound to
their real agreement.39 The records show that the parties intended to transfer the
ownership of the property to Normita by absolute sale. This intention is reflected in the
unnotarized document entitled "Panananto ng Pagkatanggap ng Kahustuhang
Bayad."40cralawred

We have discussed that the transaction was definitely not one of donation. Next, we
determine whether the parties' real transaction was a sale or an equitable mortgage.

The petitioners insist that the deed of sale is an equitable mortgage because: (i) the
consideration for the sale was grossly inadequate; (ii) they remained in possession of
the property; (iii) they continuously paid the water and electric bills; (iv) the respondents
allowed Victoria to repay the "loan" within three months;41 (v) the respondents admitted
that the deed of donation was simulated; and (vi) the petitioners paid the taxes even
after the sale.

Notably, neither the CA nor the RTC found merit in the petitioners' claim of equitable
mortgage. We find no reason to disagree with these conclusions.

An equitable mortgage is one which, although lacking in some formality or other

requisites demanded by statute, nevertheless reveals the intention of the parties to
charge real property as security for a debt, and contains nothing impossible or contrary
to law.42 Articles 1602 and 1604 of the Civil Code provide that a contract of absolute
sale shall be presumed an equitable mortgage if any of the circumstances listed in
Article 1602 is attendant.

Two requisites must concur for Articles 1602 and 1604 of the Civil Code to apply: one,
the parties entered into a contract denominated as a contract of sale; and two, their
intention was to secure an existing debt by way of mortgage.43

In the present case, the unnotarized contract of sale between Elma and Normita is
denominated as "Panananto ng Pagkatanggap ng Kahustuhang Bayad."44 Its contents
show an unconditional sale of property between Elma and Normita. The document
shows no intention to secure a debt or to grant a right to repurchase. Thus, there is no
evidence that the parties agreed to mortgage the property as contemplated in Article
1602 of the Civil Code. Clearly, the contract is not one of equitable mortgage.

Even assuming that Article 1602 of the Civil Code applies in this case, none of the
circumstances are present to give rise to the presumption of equitable mortgage. One,
the petitioners failed to substantiate their claim that the sale price was unusually
inadequate.45 In fact, the sale price of P30,000.00 is not unusually inadequate
compared with the lot's market value of P32,160 as stated in the 1994 tax
declaration. Two, the petitioners continued occupation on the property was coupled with
the respondents' continuous demand for them to vacate it. Third, no other document
was executed for the petitioners to repurchase the lot after the sale contract was
executed. Finally, the respondents paid the real property taxes on the lot.46 These
circumstances contradict the petitioners' claim of equitable mortgage.
A review of the sale contract or the "Panananto ng Pagkatanggap ng Kahustuhang
Bayad" shows that the parties intended no equitable mortgage. The contract even
contains Elma's undertaking to remove Rosario's house on the property.47 This
undertaking supports the conclusion that the parties executed the contract with the end
view of transferring full ownership over the lot to Normita.

In sum, we rule that based on the records of the case, Elma and Normita entered in a
sale contract, not a donation. Elma sold the entire property to Normita. Accordingly,
TCT No. T-70990 was validly issued in Normita's [Link]

WHEREFORE, we hereby PARTIALLY GRANT the petition. The March 26, 2010
decision and March 15, 2011 resolution of the Court of Appeals in CA-G.R. CV No.
89235 are hereby AFFIRMED with the MODIFICATION that the parties entered into a
contract of sale, not a donation, and that petitioner Elma Pidlaoan sold the whole
disputed property to respondent Normita Jacob Pidlaoan. Costs against the petitioners.

SO [Link]
 G.R. No. 196403, December 07, 2016

ARSENIO TABASONDRA, FERNANDO TABASONDRA, CORNELIO

TABASONDRA, JR., MIRASOL TABASONDRA-MARIANO, FAUSTA
TABASONDRA-TAPACIO, GUILLERMO TABASONDRA, MYRASOL
TABASONDRA-ROMERO, AND MARLENE TABASONDRA-
MANIQUIL, Petitioners, [Link] CONRADO CONSTANTINO AND TARCILA
TABASONDRA-CONSTANTINO,* PACITA ARELLANO-TABASONDRA AND HEIRS
OF SEBASTIAN TABASONDRA, Respondents.

DECISION

BERSAMIN, J.:

This case for partition and accounting concerns a property owned in common, and
focuses on the right of two of the co-owners to alienate their shares before the actual
division of the [Link]

The Case

Under appeal is the adverse decision promulgated on November 30, 20101 whereby
the Court of Appeals (CA) modified the judgment rendered on September 22, 2008 by
the Regional Trial Court (RTC), Branch 64, in Tarlac City ordering the partition of all the
three parcels of land owned in common among the parties.2 The modification by the CA,
which expressly recognized the alienation by the two co-owners of their shares,
consisted in limiting the partition of the property owned in common to only the unsold
portion with an area of 33,450.66 square [Link]

Antecedents

The parties herein were the children of the late Cornelio Tabasondra from two
marriages. The respondents Tarcila Tabasondra-Constantino and the late Sebastian
Tabasondra were the children of Cornelio by his first wife, Severina; the petitioners,
namely: Arsenio Tabasondra, Fernando Tabasondra, Cornelio Tabasondra, Jr., Mirasol
Tabasondra-Mariano, Fausta Tabasondra-Tapacio, Myrasol Tabasondra-Romero,
Marlene Tabasondra-Maniquil, and Guillermo Tabasondra, were children of Cornelio by
his second wife, Sotera.

The CA summarized the undisputed factual findings and procedural antecedents as

follows:chanRoblesvirtualLawlibrary
Cornelio, Valentina, and Valeriana, all surnamed Tabasondra. were siblings. They were
also the registered owners of the three (3) parcels of land located at Dalayap, Tarlac
City, identified as Lot No. 2536, containing an area of seventy-seven thousand one
hundred and forty-seven (77,147) sq. m.; Lot No. 3155, with an area of thirteen
thousand six hundred fifty-nine (13,659) sq. m.; and, Lot No. 3159, with an area of nine
thousand five hundred forty-six (9,546) sq. m., covered by Transfer Certificate of Title
(TCT) No. 106012.

xxxx

Cornelio died on March 15, 1991, while Valentina and Valeriana both died single on
August 19, 1990 and August 4, 1998, respectively. They all died intestate and without
partitioning the property covered by TCT No. 106012. Thus, the Plaintiffs-Appellees and
the Defendants-Appellants, as descendants of Cornelio, possessed and occupied the
property.

The Controversy:

On August 22, 2002, the Plaintiffs-Appellees filed the complaint below against the
Defendants-Appellants. In essence, they claimed that the parcels of land are owned in
common by them and the Defendants-Appellants but the latter does not give them any
share in the fruits thereof. Hence, they asked for partition but the Defendants-Appellants
refused without valid reasons. They maintained that they tried to amicably settle the
dispute before the Lupon, but to no avail. Thus, their filing of the suit praying that the
subject land be partitioned, that new titles be issued in their respective names, that the
Defendants-Appellants be ordered to render an accounting on the fruits thereon, and
that such fruits also be partitioned.

In their Answer, the Defendants-Appellants averred that they do not object to a partition
provided that the same should be made only with respect to Cornelio's share. They
contended that they already own the shares of Valentina and Valeriana in the subject
land by virtue of the Deed of Absolute Sale that the said sisters executed in their favor
on August 18, 1982. Moreover, they alleged that the Plaintiffs-Appellees are the ones
who should account for the profits of the property because it is the latter who enjoy the
fruits thereof. By way of counterclaim, they, thus, prayed that the Plaintiffs-Appellees be
ordered to render an accounting and to pay for damages.

After the issues were joined and the pre-trial conference was conducted, a full blown
trial followed in view of the parties' failure to settle amicably.

On September 22, 2008, the RTC rendered the assailed disposition, the fallo of which
reads:chanRoblesvirtualLawlibrary
WHEREFORE, on the basis of the foregoing considerations, judgment is hereby
rendered in favor of the plaintiffs, ordering [the] partition of the three (3) parcels of land
covered by TCT No. 16012 among the compulsory and legal heirs of Cornelio,
Valentina[,] and Valeriana, all surnamed Tabasondra. Sotero Duenas Tabasondra shall
be entitled to 3,040 square meters while plaintiffs and defendants shall be entitled to
6,690 square meters each.

SO ORDERED.3
chanrobleslaw
Dissatisfied, the respondents appealed the judgment of the RTC to the CA, assigning
the following as the reversible errors, to wit:chanRoblesvirtualLawlibrary
I.

THE HONORABLE COURT A- [sic] QUO GRAVELY ERRED AND COMMITTED A

REVERSIBLE ERROR IN NOT CONSIDERING AND APPRECIATING THE FACT
THAT THE DEED OF ABSOLUTE SALE EXECUTED BY THE DECEASED
VALENTINA TABASONDRA AND VALERIANA TABASONDRA, IN FAVOR OF
DEFENDANTS TARCILA TABASONDRA AND SEBASTIAN TABASONDRA, WAS
VALID AND SUBSISTING AT THE TIME THE COURT CONSIDERED IT TO HAVE NO
VALID LEGAL FORCE AND EFFECT[.]

II.

THE HONORABLE COURT A-[sic] QUO GRAVELY ERRED AND COMMITTED A

REVERSIBLE ERROR IN ORDERING FOR THE PARTITION OF THE PROPERTY IN
QUESTION WITHOUT ANY LEGAL AND VALID GROUNDS[.]4
chanrobleslaw
On November 30, 2010, the CA promulgated the decision under
review,5 disposing:chanRoblesvirtualLawlibrary
WHEREFORE, the appeal is GRANTED. The assailed disposition
is AFFIRMED with MODIFICATION in that the partition and the accounting is ordered to
be made only with respect to a thirty-three thousand four hundred fifty point sixty-six
(33,450.66) sq.m. portion of the property. With costs.

SO ORDERED.6
chanrobleslaw
The petitioners moved for reconsideration,7 but the CA denied their motion on April 4,
2011.8

Hence, this [Link]

Issues

The petitioners submit in support of their appeal:chanRoblesvirtualLawlibrary

1. THAT THE COURT OF APPEALS ACTED WITH GRAVE ABUSE OF

DISCRETION AMOUNTING TO EXCESS OR LACK OF JURISDICTION
IN SUMMARILY DISMISSING THE NEW MATTERS OF SUBSTANCE
RAISED IN MOTION FOR RECONSIDERATION

2. THAT THE COURT OF APPEALS IN SUMMARILY DISMISSING

MOTION FOR RECONSIDERATION OF PLAINTIFFS-PETITIONERS
RENEGED IN ITS DUTY TO RESOLVE LEGAL AND FACTUAL ISSUES
OF SUBSTANCE IN A WAY NOT PROBABLY IN ACCORD WITH LAW
 OR APPLICABLE DECISIONS OF THE SUPREME
COURT;ChanRoblesVirtualawlibrary

3. THAT THE COURT OF APPEALS DECISION IN DECLARING THE

QUESTIONED DEED OF SALE VALID AND IN SUMMARILY
DISMISSING PLAINTIFFS-PETITIONERS['] MOTION FOR
RECONSIDERATION RAISING NEW ARGUMENTS AND MATTERS OF
SUBSTANCE NOT RAISED IN THE APPEAL BY DEFENDANTS-
RESPONDENTS, ARE CONTRARY TO LAW, JURISPRUDENCE,
ADMISSIONS OF FACTS/TESTIMONY OF TARCILA TABASONDRA,
ONLY WITNESS FOR DEFENDANTS-RESPONDENTS AND EVIDENCE
PRESENTED BY PLAINTIFFS-PETITIONERS AT THE
TRIAL;ChanRoblesVirtualawlibrary

4. THAT SUCH COURSE OF ACTION TAKEN BY THE COURT OF

APPEALS OR DEPARTURE THEREFROM IN EXERCISING OR
FAILING TO EXERCISE ITS POWER OF JUDICIAL REVIEW
CERTAINLY CALLS FOR THE EXERCISE BY THE SUPREME COURT
OF ITS POWER OF JUDICIAL REVIEW TO AFFORD COMPLETE
RELIEF TO PARTIES IN THIS CASE AND TO AVOID MULTIPLICITY OF
SUITS.9

In other words, did the CA correctly order the partition and accounting with respect to
only 33,450.66 square meters of the property registered under TCT No. 10612?

Ruling of the Court

The appeal lacks merit.

There is no question that the total area of the three lots owned in common by Cornelio,
Valentina and Valeriana was 100,352 square meters; and that each of the co-owners
had the right to one-third of such total area.

It was established that Valentina and Valeriana executed the Deed of Absolute
Sale,10 whereby they specifically disposed of their shares in the property registered
under TCT No. 10612 in favor of Sebastian Tabasondra and Tarcila Tabasondra as
follows:chanRoblesvirtualLawlibrary
NOW, THEREFORE, for and in consideration of the sum of TEN THOUSAND PESOS
(10,000.00), Philippine Currency, to us in hand paid, receipt whereof is hereby
acknowledged in full to our entire satisfaction, by SEBASTIAN TABASONDRA and
TARCILA TABASONDRA, married to Pacita Arellano and Conrado Constantino,
respectively, both of legal ages, Filipinos, and residents of Dalayap, Tarlac, Tarlac, we
do hereby SELL, CEDE, TRANSFER and CONVEY, by way of ABSOLUTE SALE, unto
the said Sebastian Tabasondra and Tarcila Tabasondra, their heirs and assigns, all our
shares, rights, interests and participations in the above-described parcel of
land free from liens and incumbrances. That we hereby certify that the herein
VENDEES are the actual tillers or tenants of the above-described parcel of land subject
matter of this deed of absolute sale and, as such, have the prior right of pre-emption
and redemption, under the Land Reform Code. (Bold underscoring supplied for
emphasis)
chanrobleslaw
We uphold the right of Valentina and Valeriana to thereby alienate their pro
indiviso shares to Sebastian and Tarcila even without the knowledge or consent of their
co-owner Cornelio because the alienation covered the disposition of only their
respective interests in the common property. According to Article 493 of the 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." Hence, the petitioners as the successors-in-
interest of Cornelio could not validly assail the alienation by Valentina and Valeriana of
their shares in favor of the respondents.11

Accordingly, the Court declares the following disposition by the CA to be correct and in
full accord with law, to wit:chanRoblesvirtualLawlibrary
x x x [T]here is no dispute that the subject property was owned in common by the
siblings Cornelio, Valentina, and Valeria. Corollarily, the records at bench glaringly show
that the genuineness and due execution of the Deed of Absolute Sale executed by
Valeriana and Valentina in favor of the Defendants-Appellants was not rebutted by the
Plaintiffs-Appellees. A fortiori, such deed is prima facie evidence that a contract of sale
was, indeed, entered into and consummated between Valeriana and Valentina as
sellers and the Defendants-Appellants as vendors.

The foregoing facts, juxtaposed with the laws and the jurisprudential precepts
mentioned elsewhere herein, lead to no other conclusion but that the sale by Valeriana
and Valentina of their pro indiviso shares in favor of the Defendants-Appellants is valid.
As enunciated by the Supreme Court in Alejandrino v. CA, et al.:
x x x Under a co-owners/tip, the ownership of an undivided thing or right belongs
to different persons. Each co-owner of property which is held pro indiviso
exercises his rights over the whole property and may use and enjoy the same
with no other limitation than that he shall not injure the interests of his co-
owners. The underlying rationale is that until a division is made, the respective share of
each cannot be determined and every co-owner exercises, together with his co-
participants, joint ownership over the pro indiviso property, in addition to his use and
enjoyment of the same.

Although the right of a heir over the property of the decedent is inchoate as long
as the estate has not been fully settled and partitioned, the law allows a co-owner
to exercise rights of ownership over such inchoate right. Thus, the Civil Code
provides:
Art. 493. Each co-owner shall have the full ownership of his part and of the fruits
and benefits pertaining thereto, and he may therefore alienate, assign or mortgage
it, and even substitute another person in its enjoyment, except when personal rights are
involved But the effect of the alienation or the mortgage, with respect to the co-
owners, shall be limited to the portion which may be allotted to him in the division
upon the termination of the co-ownership.
chanrobleslaw
With respect to properties shared in common by virtue of inheritance, alienation of a pro
indiviso portion thereof is specifically governed by Article 1088 that provides:
Art. 1088. 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.
chanrobleslaw
In the instant case, Laurencia was within her hereditary rights in selling her pro indiviso
share in Lot No. 2798. However, because the property had not yet been partitioned in
accordance with the Rules of Court, no particular portion of the property could be
identified as yet and delineated as the object of the sale. Thus, interpreting Article 493
of the Civil Code providing that an alienation of a co-owned property "shall be limited to
the portion which may be allotted to (the seller) in the division upon the termination of
the co-ownership, the Court said:
... (p)ursuant to this law, a co-owner has the right to alienate his pro-indiviso share
in the co-owned property even witlwut the consent of the other co-owners. x x x
chanrobleslaw
Using the foregoing disquisitions as guidelines, there is no denying that the RTC erred
in granting the complaint and ordering a partition without qualifying that such should not
include the shares previously pertaining to Valeria and Valentina. Simply put, since the
aggregate area of the subject property is one hundred thousand three hundred fifty-two
(100,352) sq.m., it follows that Cornelio, Valentina, and Valeriana each has a share
equivalent to thirty-three thousand four hundred fifty point sixty-six (33,450.66) sq. m.
portion thereof. Accordingly, when Valentina and Valeriana sold their shares, the
Defendants-Appellants became co-owners with Cornelio. Perforce, upon Cornelio's
death, the only area that his heirs, that is, the Plaintiffs-Appellees and the Defendants-
Appellants, are entitled to and which may be made subject of partition is only a thirty-
three thousand four hundred fifty point sixty-six (33,450.66) sq.m. portion of the
property.

All told, finding the RTC's conclusions to be not in accord with the law and
jurisprudence, necessarily, the same cannot be sustained.12
chanrobleslaw
As a result of Valentina and Valeriana's alienation in favor of Sebastian and Tarcila of
their pro indiviso shares in the three lots, Sebastian and Tarcila became co-owners of
the 100,352-square meter property with Cornelio (later on, with the petitioners who were
the successors-in-interest of Cornelio). In effect, Sebastian and Tarcila were co-owners
of two-thirds of the property, with each of them having one-third pro indiviso share in the
three lots, while the remaining one-third was co-owned by the heirs of Cornelio, namely,
Sebastian, Tarcila and the petitioners.

Nonetheless, we underscore that this was a case for partition and accounting.
According to Vda. de Daffon v. Court of Appeals,13 an action for partition is at once an
action for declaration of co-ownership and for segregation and conveyance of
a determinate portion of the properties involved. If the trial court should find after trial
the existence of co-ownership among the parties, it may and should order the partition
of the properties in the same action.14

Although the CA correctly identified the co-owners of the three lots, it did not segregate
the 100,352-square meter property into determinate portions among the several co-
owners. To do so, the CA should have followed the manner set in Section 11, Rule 69
of the Rules of Court, to wit:chanRoblesvirtualLawlibrary
Section 11. The judgment and its effect; copy to be recorded in registry of deeds. If
actual partition of property is made, the judgment shall state definitely, by metes and
bounds and adequate description, the particular portion of the real estate assigned to
each party, and the effect of the judgment shall be to vest in each party to the action in
severalty the portion of the real estate assigned to him. xxxs (Bold emphasis supplied.)
chanrobleslaw
Accordingly, there is a need to remand the case to the court of origin for the purpose of
identifying and segregating, by metes and bounds, the specific portions of the three lots
assigned to the co-owners, and to effect the physical partition of the property in the
following proportions: Tarcila, one-third; the heirs of Sebastian, one-third; and the
petitioners (individually), along with Tarcila and the heirs of Sebastian (collectively),
one-third. That physical partition was required, but the RTC and the CA
uncharacteristically did not require it. Upon remand, therefore, the RTC should comply
with the express terms of Section 2, Rule 69 of the Rules of Court, which
provides:chanRoblesvirtualLawlibrary
Section 2. Order for partition, and partition by agreement thereunder. - If after the trial
the court finds that the plaintiff has the right thereto, it shall order the partition of the real
estate among all the parties in interest. Thereupon the parties may, if they are able
to agree, make the partition among themselves by proper instruments of
conveyance, and the court shall confirm the partition so agreed upon by all the
parties, and such partition, together with the order of the court confirming the
same, shall be recorded in the registry of deeds of the place in which the property
is situated.(2a)

A final order decreeing partition and accounting may be appealed by any party
aggrieved thereby. (n)
chanrobleslaw
Should the parties be unable to agree on the partition, the next step for the RTC will be
to appoint not more than three competent and disinterested persons as commissioners
to make the partition, and to command such commissioners to set off to each party in
interest the part and proportion of the property as directed in this decision.15
Moreover, with the Court having determined that the petitioners had no right in the two-
thirds portion that had been validly alienated to Sebastian and Tarcila, the accounting of
the fruits shall only involve the one-third portion of the property inherited from Cornelio.
For this purpose, the RTC shall apply the pertinent provisions of the Civil
Code, particularly Article 500 and Article 1087 of the Civil Code, viz.:
Article 500. Upon partition, there shall be a mutual accounting for benefits received and
reimbursements for expenses made. Likewise, each co-owner shall pay for damages
caused by reason of his negligence or fraud. (n)

Article 1087. In the partition the co-heirs shall reimburse one another for the income and
fruits which each one of them may have received from any property of the estate, for
any useful and necessary expenses made upon such property, and for any damage
thereto through malice or neglect. (1063)
chanrobleslaw
WHEREFORE, the Court AFFIRMS WITH MODIFICATION the decision of the Court of
Appeals promulgated on November 30, 2010 in CA-G.R. CV No. 92920 in that the
accounting is to be made only with respect to the fruits of the one-third portion of the
property still under the co-ownership of all the parties; REMANDS the case to the
Regional Trial Court, Branch 64, in Tarlac City for further proceedings in accordance
with this decision, and to determine the technical metes and bounds and description of
the proper share of each co-owner of the property covered by Transfer Certificate of
Title No. 10612, including the improvements thereon, in accordance with the Civil
Code and Rule 69 of the Rules of Court; and ORDERS the petitioners to pay the costs
of suit.

SO ORDERED.
G.R. No. 189420 March 26, 2014

RAUL V. ARAMBULO AND TERESITA A. DELA CRUZ, Petitioners,

vs.
GENARO NOLASCO AND JEREMY SPENCER NOLASCO, Respondents.

DECISION

PEREZ, J.:

This is a Petition for Review of the 7 October 2008 Decision1 and 30 July 2009
Resolution2 of the Court of Appeals in CA-G.R. CV No. 76449, which reversed and set
aside the Decision3 of the Regional Trial Court (RTC) of Manila, Branch 51, dated 19
September 2002.

Petitioners Raul V. Arambulo and Teresita A. Dela Cruz, along with their mother Rosita
Vda. De Arambulo, and siblings Primo V. Arambulo, Ma. Lorenza A. Lopez, Ana Maria
V. Arambulo, Maximiano V. Arambulo, Julio V. Arambulo and Iraida Arambulo Nolasco
(Iraida) are co-owners of two (2) parcels of land located in Tondo, Manila, with an
aggregate size of 233 square meters. When Iraida passed away, she was succeeded
by her husband, respondent Genaro Nolasco and their children, Iris Abegail Nolasco,
Ingrid Aileen Arambulo and respondent Jeremy Spencer Nolasco.

On 8 January 1999, petitioners filed a petition for relief under Article 491 of the Civil
Code with the RTC of Manila, alleging that all of the co- owners, except for respondents,
have authorized petitioners to sell their respective shares to the subject properties; that
only respondents are withholding their consent to the sale of their shares; that in case
the sale pushes through, their mother and siblings will get their respective 1/9 share of
the proceeds of the sale, while respondents will get 1/4 share each of the 1/9 share of
Iraida; that the sale of subject properties constitutes alteration; and that under Article
491 of the Civil Code, if one or more co-owners shall withhold their consent to the
alterations in the thing owned in common, the courts may afford adequate relief.4

In their Answer, respondents sought the dismissal of the petition for being premature.
Respondents averred that they were not aware of the intention of petitioners to sell the
properties they co-owned because they were not called to participate in any
negotiations regarding the disposition of the property.5

After the pre-trial, two (2) issues were submitted for consideration:

[Link] or not respondents are withholding their consent in the sale of the
subject properties; and

[Link] the affirmative, whether or not withholding of consent of sale by the

respondents is prejudicial to the petitioners.6
On 19 September 2002, the trial court ruled in favor of petitioners and ordered
respondents to give their consent to the sale. The dispositive portion of the decision
reads:

WHEREFORE, in view of the foregoing, judgment is hereby rendered in favor of the

petitioners and against the respondents:

[Link] respondents Genaro Nolasco and Jeremy Spencer A. Nolasco to give

their consent to the sale of their shares on the subject properties;

[Link] the sale of the aforementioned properties;

[Link] the petitioners and the co-owners, including the respondents herein to
agree with the price in which the subject properties are to be sold and to whom to
be sold; and

[Link] the distribution of the proceeds of the sale of the aforementioned

properties in the following proportion:

a.) Rosita V. Vda. De Arambulo -1/9

b.) Primo V. Arambulo -1/9

c.) Maximiano V. Arambulo -1/9

d.) Ana Maria V. Arambulo -1/9

e.) Ma. Lorenza A. Lopez -1/9

f.) Julio V. Arambulo -1/9

g.) Raul V. Arambulo -1/9

h.) Teresita A. dela Cruz -1/9

i.) Genaro Nolasco, Jr. -1/4 of 1/9

j.) Jeremy Spencer A. Nolasco -1/4 of 1/9

k.) Iris Abegail A. Nolasco -1/4 of 1/9

l.) Ingrid Aileen Arambulo -1/4 of 1/97

Going along with petitioners’ reliance on Article 491 of the Civil Code, the trial court
found that respondents’ withholding of their consent to the sale of their shares is
prejudicial to the common interest of the co-owners.
Respondents filed a Notice of Appeal and the trial court gave due course to the appeal
and the entire records of the case were elevated to the Court of Appeals.

In a Decision dated 7 October 2008, the Court of Appeals granted the appeal and
reversed the trial court’s decision. The Court of Appeals held that the respondents had
the full ownership of their undivided interest in the subject properties, thus, they cannot
be compelled to sell their undivided shares in the properties. It referred to the provisions
of Article 493 of the Civil Code. However, the Court of Appeals, implying applicability of
Article 491 also observed that petitioners failed to show how respondents’ withholding of
their consent would prejudice the common interest over the subject properties.

Hence, the instant petition seeking the reversal of the appellate court’s decision and
praying for the affirmance of the trial court’s decision that ordered respondents to give
their consent to the sale of the subject properties. Petitioners emphasize that under
Article 491 of the Civil Code, they may ask the court to afford them adequate relief
should respondents refuse to sell their respective shares to the co-owned properties.
They refute the appellate court’s finding that they failed to show how the withholding of
consent by respondents becomes prejudicial to their common interest. Citing the
testimony of petitioner Teresita A. Dela Cruz, they assert that one of the two subject
properties has an area of 122 square meters and if they decide to partition, instead of
selling the same, their share would be reduced to a measly 30-square meter lot each.
The other property was testified to as measuring only 111 square meters. Petitioners
reiterate that all the other co- owners are willing to sell the property and give
respondents their share of the proceeds of the sale.

At the core of this petition is whether respondents, as co-owners, can be compelled by

the court to give their consent to the sale of their shares in the co-owned properties.
Until it reached this Court, the discussion of the issue moved around Article 491 of the
Civil Code. We have to remove the issue out of the coverage of Article 491. It does not
apply to the problem arising out of the proposed sale of the property co-owned by the
parties in this case.

The Court of Appeals correctly applied the provision of Article 493 of the Civil Code,
which states:

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

Upon the other hand, Article 491 states:

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

As intimated above, the erroneous application of Article 491 is, in this case, an innate
infirmity. The very initiatory pleading below was captioned Petition For Relief Under
Article 491 of the New Civil Code. Petitioners, likewise petitioners before the RTC, filed
the case on the submission that Article 491 covers the petition and grants the relief
prayed for, which is to compel the respondent co-owners to agree to the sale of the co-
owned property. The trial court took up all that petitioners tendered, and it favored the
pleading with the finding that:

x x x To this court, the act of respondents of withholding consent to the sale of the
properties is not only prejudicial to the common interest of the co-owners but is also
considered as an alteration within the purview of Article 491 of the New Civil Code. x x
x. Hence, it is deemed just and proper to afford adequate relief to herein petitioners
under Article 491 of the New Civil Code.8

That a sale constitutes an alteration as mentioned in Article 491 is an established

jurisprudence.1âwphi1 It is settled that alterations include any act of strict dominion or
ownership and any encumbrance or disposition has been held implicitly to be an act of
alteration.9 Alienation of the thing by sale of the property is an act of strict
dominion.10However, the ruling that alienation is alteration does not mean that a sale of
commonly owned real property is covered by the second paragraph of Article 491, such
that if a co- owner withholds consent to the sale, the courts, upon a showing of a clear
prejudice to the common interest, may, as adequate relief, order the grant of the
withheld consent. Such is the conclusion drawn by the trial court, and hinted at, if not
relied upon, by the appellate court.

Ruling that the trial court erred in its conclusion, the Court of Appeals correctly relied on
Article 493 in support of the finding that respondents cannot be compelled to agree with
the sale. We affirm the reversal by the Court of Appeals of the judgment of the trial
court.

1. There is co-ownership whenever, as in this case, the ownership of an undivided

thing, belongs to different persons.11 Article 493 of the Code defines the ownership of
the co-owner, clearly establishing that each co-owner shall have full ownership of his
part and of its fruits and benefits.

Pertinent to this case, Article 493 dictates that each one of the parties herein as co-
owners with full ownership of their parts can sell their fully owned part. The sale by the
petitioners of their parts shall not affect the full ownership by the respondents of the part
that belongs to them. Their part which petitioners will sell shall be that which may be
apportioned to them in the division upon the termination of the co-ownership. With the
full ownership of the respondents remaining unaffected by petitioners’ sale of their parts,
the nature of the property, as co-owned, likewise stays. In lieu of the petitioners, their
vendees shall be co-owners with the respondents. The text of Article 493 says so.
2. Our reading of Article 493 as applied to the facts of this case is a reiteration of what
was pronounced in Bailon-Casilao v. Court of Appeals.12 The rights of a co-owner of a
certain property are clearly specified in Article 493 of the Civil Code. Thus:

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

As early as 1923, this Court has ruled that even if a co-owner sells the whole property
as his, the sale will affect only his own share but not those of the other co-owners who
did not consent to the sale.13 This is because under the aforementioned codal provision,
the sale or other disposition affects only his undivided share and the transferee gets
only what would correspond to his grantor in the partition of the thing owned in
common.14 Consequently, by virtue of the sales made by Rosalia and Gaudencio Bailon
which are valid with respect to their proportionate shares, and the subsequent transfers
which culminated in the sale to private respondent Celestino Afable, the said Afable
thereby became a co- owner of the disputed parcel of land as correctly held by the
lower court since the sales produced the effect of substituting the buyers in the
enjoyment thereof.15

From the foregoing, it may be deduced that since a co-owner is entitled to sell his
undivided share, a sale of the entire property by one co- owner without the consent of
the other co-owners is not null and void. However, only the rights of the co-owner-seller
are transferred, thereby making the buyer a co-owner of the property.16 (Italics theirs).

Nearer to the dispute at hand are the pronouncements in the 1944 case of Lopez v.
Vda. De Cuaycong.17 Citing Manresa on Article 399 which is the present Article 493 of
the Civil Code, the Court said:

x x x Article 399 shows the essential integrity of the right of each co-owner in the mental
portion which belongs to him in the ownership or community.

xxxx

To be a co-owner of a property does not mean that one is deprived of every recognition
of the disposal of the thing, of the free use of his right within the circumstantial
conditions of such judicial status, nor is it necessary, for the use and enjoyment, or the
right of free disposal, that the previous consent of all the interested parties be
obtained.18(Underscoring supplied).

The Court in Lopez further cited Scaevola:

2nd. Absolute right of each co-owner with respect to his part or share. – With respect to
the latter, each co-owner is the same as an individual owner. He is a singular owner,
with all the rights inherent in such condition. The share of the co-owner, that is, the part
which ideally belongs to him in the common thing or right and is represented by a
certain quantity, is his and he may dispose of the same as he pleases, because it does
not affect the right of the others. Such quantity is equivalent to a credit against the
common thing or right and is the private property of each creditor (co-owner). The
various shares ideally signify as many units of thing or right, pertaining individually to
the different owners; in other words, a unit for each owner.19 (Underscoring supplied).

The ultimate authorities in civil law, recognized as such by the Court, agree that co-
owners such as respondents have over their part, the right of full and absolute
ownership. Such right is the same as that of individual owners which is not diminished
by the fact that the entire property is co- owned with others. That part which ideally
belongs to them, or their mental portion, may be disposed of as they please,
independent of the decision of their co-owners. So we rule in this case. The
respondents cannot be ordered to sell their portion of the co-owned properties. In the
language of Rodriguez v. Court of First Instance of Rizal,20 "each party is the sole judge
of what is good for him."21

3. Indeed, the respected commentaries suggest the conclusion that, insofar as the sale
of co-owned properties is concerned, there is no common interest that may be
prejudiced should one or more of the co-owners refuse to sell the co-owned property,
which is exactly the factual situation in this case. When respondents disagreed to the
sale, they merely asserted their individual ownership rights. Without unanimity, there is
no common interest.

Petitioners who project themselves as prejudiced co-owners may bring a suit for
partition, which is one of the modes of extinguishing co- ownership. Article 494 of the
Civil Code provides that no co-owner shall be obliged to remain in the co-ownership,
and that each co-owner may demand at any time partition of the thing owned in
common insofar as his share is concerned. Corollary to this rule, Article 498 of the Civil
Code states that whenever the thing is essentially indivisible and the co-owners cannot
agree that it be allotted to one of them who shall indemnify the others, it shall be sold
and its proceeds accordingly distributed. This is resorted to (a) when the right to
partition the property is invoked by any of the co-owners but because of the nature of
the property, it cannot be subdivided or its subdivision would prejudice the interests of
the co-owners, and (b) the co- owners are not in agreement as to who among them
shall be allotted or assigned the entire property upon proper reimbursement of the co-
owners.22 This is the result obviously aimed at by petitioners at the outset. As already
shown, this cannot be done while the co-ownership exists.

Essentially, a partition proceeding accords all parties the opportunity to be heard, the
denial of which was raised as a defense by respondents for opposing the sale of the
subject properties.
The necessity of partition could not be more emphasized than in

Rodriguez v. Court of First Instance of Rizal,23 to wit:

x x x That this recourse would entail considerable time, trouble and expense,
unwarranted by the value of the property from the standpoint of the [respondents], is no
legal justification for the apportionment of the property not agreeable to any of the co-
owners. Disagreements and differences impossible of adjustment by the parties
themselves are bound to arise, and it is precisely with such contingency in view that the
law on partition was evolved.24

WHEREFORE, based on the foregoing, the petition is DENIED without prejudice to the
filing of an action for partition. The Decision of the Court of Appeals in CA-G.R. CV No.
76449 is AFFIRMED.

SO ORDERED.
G.R. No. 210252 June 16, 2014

VILMA QUINTOS, represented by her Attorney-in-Fact FIDEL I. QUINTOS, JR.;

FLORENCIA I. DANCEL, represented by her Attorney-in-Fact FLOVY I. DANCEL;
and CATALINO L. IBARRA, Petitioners,
vs.
PELAGIA I. NICOLAS, NOLI L. IBARRA, SANTIAGO L. IBARRA, PEDRO L.
IBARRA, DAVID L. IBARRA, GILBERTO L. IBARRA, HEIRS OF AUGUSTO L.
IBARRA, namely CONCHITA R., IBARRA, APOLONIO IBARRA, and NARCISO
IBARRA, and the spouses RECTO CANDELARIO and ROSEMARIE
CANDELARIO,Respondents.

DECISION

VELASCO, JR., J.:

The Case

Before the Court is a Petition for Review on Certiorari filed under Rule 45 challenging
the Decision1 and Resolution2of the Court of Appeals (CA) in CA-G.R. CV No. 98919
dated July 8, 2013 and November 22, 2013, respectively. The challenged rulings
affirmed the May 7, 2012 Decision3 of the Regional Trial Court (RTC), Branch 68 in
Camiling, Tarlac that petitioners and respondents are co-owners of the subject property,
which should be partitioned as per the subdivision plan submitted by respondent
spouses Recto and Rosemarie Candelario.

The Facts

As culled from the records, the facts of the case are as follows:

Petitioners Vilma Quintos, Florencia Dancel, and Catalino Ibarra, and respondents
Pelagia Nicolas, Noli Ibarra, Santiago Ibarra, Pedro Ibarra, David Ibarra, Gilberto Ibarra,
and the late Augusto Ibarra are siblings. Their parents, Bienvenido and Escolastica
Ibarra, were the owners of the subject property, a 281 sqm. parcel of land situated along
Quezon Ave., Poblacion C, Camiling, Tarlac, covered by Transfer Certificate Title (TCT)
No. 318717.

By 1999, both Bienvenido and Escolastica had already passed away, leaving to their
ten (10) children ownership over the subject property. Subsequently, sometime in 2002,
respondent siblings brought an action for partition against petitioners. The case was
docketed as Civil Case No. 02-52 and was raffled to the RTC, Branch 68, Camiling,
Tarlac. However, in an Order4 dated March 22, 2004, the trial court dismissed the case
disposing as follows:

For failure of the parties, as well as their counsels, to appear despite due notice, this
case is hereby DISMISSED.
SO ORDERED.

As neither set of parties appealed, the ruling of the trial court became final, as
evidenced by a Certificate of Finality5it eventually issued on August 22, 2008.

Having failed to secure a favorable decision for partition, respondent siblings instead
resorted to executing a Deed of Adjudication6 on September 21, 2004 to transfer the
property in favor of the ten (10) siblings. As a result, TCT No. 318717 was canceled and
in lieu thereof, TCT No. 390484 was issued in its place by the Registry of Deeds of
Tarlac in the names of the ten (10) heirs of the Ibarra spouses.

Subsequently, respondent siblings sold their 7/10 undivided share over the property in
favor of their co-respondents, the spouses Recto and Rosemarie Candelario. By virtue
of a Deed of Absolute Sale7 dated April 17, 2007 executed in favor of the spouses
Candelario and an Agreement of Subdivision8 purportedly executed by them and
petitioners, TCT No. 390484 was partially canceled and TCT No. 434304 was issued in
the name of the Candelarios, covering the 7/10portion.

On June 1, 2009, petitioners filed a complaint for Quieting of Title and Damages against
respondents wherein they alleged that during their parents’ lifetime, the couple
distributed their real and personal properties in favor of their ten (10) children. Upon
distribution, petitioners alleged that they received the subject property and the house
constructed thereon as their share. They likewise averred that they have been in
adverse, open, continuous, and uninterrupted possession of the property for over four
(4) decades and are, thus, entitled to equitable title thereto. They also deny any
participation in the execution of the aforementioned Deed of Adjudication dated
September 21, 2004 and the Agreement of Subdivision. Respondents countered that
petitioners’ cause of action was already barred by estoppel when sometime in 2006,
one of petitioners offered to buy the 7/10 undivided share of the respondent siblings.
They point out that this is an admission on the part of petitioners that the property is not
entirely theirs. In addition, they claimed that Bienvenido and Escolastica Ibarra
mortgaged the property but because of financial constraints, respondent spouses
Candelario had to redeem the property in their behalf. Not having been repaid by
Bienvenido and Escolastica, the Candelarios accepted from their co-respondents their
share in the subject property as payment. Lastly, respondents sought, by way of
counterclaim, the partition of the property.

Docketed as Civil Case No. 09-15 of the RTC of Camiling, Tarlac, the quieting of title
case was eventually raffled to Branch 68 of the court, the same trial court that dismissed
Civil Case No. 02-52. During pre-trial, respondents, or defendants a quo, admitted
having filed an action for partition, that petitioners did not participate in the Deed of
Adjudication that served as the basis for the issuance of TCT No. 390484, and that the
Agreement of Subdivision that led to the issuance of TCT No. 434304 in favor of
respondent spouses Candelario was falsified.9 Despite the admissions of respondents,
however, the RTC, through its May 27, 2012 Decision, dismissed petitioners’ complaint.
The court did not find merit in petitioners’ asseverations that they have acquired title
over the property through acquisitive prescription and noted that there was no document
evidencing that their parents bequeathed to them the subject property. Finding that
respondent siblings were entitled to their respective shares in the property as
descendants of Bienvenido and Escolastica Ibarra and as co-heirs of petitioners, the
subsequent transfer of their interest in favor of respondent spouses Candelario was
then upheld by the trial court. The dispositive portion of the Decision reads:

WHEREFORE, premises considered, the above-entitled case is hereby Dismissed.

Also, defendants-spouses Rosemarie Candelario and Recto Candelario are hereby

declared as the absolute owners of the 7/10 portion of the subject lot.

Likewise, the court hereby orders the partition of the subject lots between the herein
plaintiffs and the defendants-spouses Candelarios.

SO ORDERED.

Aggrieved, petitioners appealed the trial court’s Decision to the CA, pleading the same
allegations they averred in their underlying complaint for quieting of title. However, they
added that the partition should no longer be allowed since it is already barred by res
judicata, respondent siblings having already filed a case for partition that was dismissed
with finality, as admitted by respondents themselves during pre-trial.

On July 8, 2013, the CA issued the assailed Decision denying the appeal. The fallo
reads: WHEREFORE, premises considered, the Decision dated May 7, 2012 of the
Regional Trial Court of Camiling, Tarlac, Branch 68, in Civil Case No. 09-15, is hereby
AFFIRMED.

SO ORDERED.

Similar to the trial court, the court a quo found no evidence on record to support
petitioners’ claim that the subject property was specifically bequeathed by Bienvenido
and Escolastica Ibarra in their favor as their share in their parents’ estate. It also did not
consider petitioners’ possession of the property as one that is in the concept of an
owner. Ultimately, the appellate court upheld the finding that petitioners and respondent
spouses Candelario co-own the property, 30-70 in favor of the respondent spouses.

As regards the issue of partition, the CA added:

x x x Since it was conceded that the subject lot is now co-owned by the plaintiffs-
appellants, (with 3/10 undivided interest) and defendants-appellees Spouses
Candelarios (with 7/10 undivided interest) and considering that plaintiffs-appellants had
already constructed a 3-storey building at the back portion of the property, then
partition, in accordance with the subdivision plan (records, p. 378) undertaken by
defendants-appellants [sic] spouses, is in order.10
On November 22, 2013, petitioners’ Motion for Reconsideration was denied. Hence, the
instant petition.

Issues

In the present petition, the following errors were raised:

I. THE COURT OF APPEALS MANIFESTLY OVERLOOKED RELEVANT AND

UNDISPUTED FACTS WHICH, IF PROPERLY CONSIDERED, WOULD
JUSTIFY PETITIONERS’ CLAIM OF EQUITABLE TITLE.

II. THE COURT OF APPEALS ERRED WHEN IT AFFIRMED THE ORDER OF

PARTITION DESPITE THE FACT THAT THE COUNTERCLAIM FOR
PARTITION, BASED ON THE DEED OF ABSOLUTE SALE EXECUTED IN
2007, IS BARRED BY LACHES.

III. THE COURT OF APPEALS RENDERED A SUBSTANTIALLY FLAWED

JUDGMENT WHEN IT NEGLECTED TO RULE ON PETITIONERS’
CONTENTION THAT THE COUNTERCLAIM FOR PARTITION IS ALSO
BARRED BY PRIOR JUDGMENT, DESPITE ITS HAVING BEEN
SPECIFICALLY ASSIGNED AS ERROR AND PROPERLY ARGUED IN THEIR
BRIEF, AND WHICH, IF PROPERLY CONSIDERED, WOULD JUSTIFY THE
DISMISSAL OF THE COUNTERCLAIM.

IV. THE COURT OF APPEALS ERRED WHEN IT ORDERED PARTITION IN

ACCORDANCE WITH THE SUBDIVISION PLAN MENTIONED IN ITS
DECISION, IN CONTRAVENTION OF THE PROCEDURE ESTABLISHED IN
RULE 69 OF THE RULES OF CIVIL PROCEDURE.11

To simplify, the pertinent issues in this case are as follows:

1. Whether or not the petitioners were able to prove ownership over the property;

2. Whether or not the respondents’ counterclaim for partition is already barred by

laches or res judicata; and

3. Whether or not the CA was correct in approving the subdivision agreement as

basis for the partition of the property.

The Court’s Ruling

The petition is meritorious in part.

Petitioners were not able to prove equitable title or ownership over the property
Quieting of title is a common law remedy for the removal of any cloud, doubt, or
uncertainty affecting title to real property.12 For an action to quiet title to prosper, two
indispensable requisites must concur, namely: (1) the plaintiff or complainant has a
legal or equitable title to or interest in the real property subject of the action; and (2) the
deed, claim, encumbrance, or proceeding claimed to be casting cloud on the title must
be shown to be in fact invalid or inoperative despite its prima facie appearance of
validity or efficacy.13 In the case at bar, the CA correctly observed that petitioners’ cause
of action must necessarily fail mainly in view of the absence of the first requisite.

At the outset, it must be emphasized that the determination of whether or not petitioners
sufficiently proved their claim of ownership or equitable title is substantially a factual
issue that is generally improper for Us to delve into. Section 1, Rule 45 of the Rules of
Court explicitly states that the petition for review on certiorari "shall raise only questions
of law, which must be distinctly set forth." In appeals by certiorari, therefore, only
questions of law may be raised, because this Court is not a trier of facts and does not
normally undertake the re-examination of the evidence presented by the contending
parties during the trial.14 Although there are exceptions15 to this general rule as
eloquently enunciated in jurisprudence, none of the circumstances calling for their
application obtains in the case at bar. Thus, We are constrained to respect and uphold
the findings of fact arrived at by both the RTC and the CA.

In any event, a perusal of the records would readily show that petitioners, as aptly
observed by the courts below, indeed, failed to substantiate their claim. Their alleged
open, continuous, exclusive, and uninterrupted possession of the subject property is
belied by the fact that respondent siblings, in 2005, entered into a Contract of Lease
with the Avico Lending Investor Co. over the subject lot without any objection from the
petitioners.16 Petitioners’ inability to offer evidence tending to prove that Bienvenido and
Escolastica Ibarra transferred the ownership over the property in favor of petitioners is
likewise fatal to the latter’s claim. On the contrary, on May 28, 1998, Escolastica Ibarra
executed a Deed of Sale covering half of the subject property in favor of all her 10
children, not in favor of petitioners alone.17

The cardinal rule is that bare allegation of title does not suffice. The burden of proof is
on the plaintiff to establish his or her case by preponderance of evidence.18 Regrettably,
petitioners, as such plaintiff, in this case failed to discharge the said burden imposed
upon them in proving legal or equitable title over the parcel of land in issue. As such,
there is no reason to disturb the finding of the RTC that all 10 siblings inherited the
subject property from Bienvenido and Escolastica Ibarra, and after the respondent
siblings sold their aliquot share to the spouses Candelario, petitioners and respondent
spouses became co-owners of the same.

The counterclaim for partition is not barred by prior judgment

This brings us to the issue of partition as raised by respondents in their counterclaim. In

their answer to the counterclaim, petitioners countered that the action for partition has
already been barred by res judicata.
The doctrine of res judicata provides that the judgment in a first case is final as to the
claim or demand in controversy, between the parties and those privy with them, not only
as to every matter which was offered and received to sustain or defeat the claim or
demand, but as to any other admissible matter which must have been offered for that
purpose and all matters that could have been adjudged in that case.19 It precludes
parties from relitigating issues actually litigated and determined by a prior and final
judgment.20 As held in Yusingco v. Ong Hing Lian:21

It is a rule pervading every well-regulated system of jurisprudence, and is put upon two
grounds embodied in various maxims of the common law; the one, public policy and
necessity, which makes it to the interest of the state that there should be an end to
litigation — republicae ut sit finis litium; the other, the hardship on the individual that he
should be vexed twice for the same cause — nemo debet bis vexari et eadem causa. A
contrary doctrine would subject the public peace and quiet to the will and neglect of
individuals and prefer the gratitude identification of a litigious disposition on the part of
suitors to the preservation of the public tranquility and happiness.22

The rationale for this principle is that a party should not be vexed twice concerning the
same cause. Indeed, res judicata is a fundamental concept in the organization of every
jural society, for not only does it ward off endless litigation, it ensures the stability of
judgment and guards against inconsistent decisions on the same set of facts.23

There is res judicata when the following requisites are present: (1) the formal judgment
or order must be final; (2) it must be a judgment or order on the merits, that is, it was
rendered after a consideration of the evidence or stipulations submitted by the parties at
the trial of the case; (3) it must have been rendered by a court having jurisdiction over
the subject matter and the parties; and (4) there must be, between the first and second
actions, identity of parties, of subject matter and of cause of action.24

In the case at bar, respondent siblings admit that they filed an action for partition
docketed as Civil Case No. 02-52, which the RTC dismissed through an Order dated
March 22, 2004 for the failure of the parties to attend the scheduled hearings.
Respondents likewise admitted that since they no longer appealed the dismissal, the
ruling attained finality. Moreover, it cannot be disputed that the subject property in Civil
Case No. 02-52 and in the present controversy are one and the same, and that in both
cases, respondents raise the same action for partition. And lastly, although respondent
spouses Candelario were not party-litigants in the earlier case for partition, there is
identity of parties not only when the parties in the case are the same, but also between
those in privity with them, such as between their successors-in-interest.25

With all the other elements present, what is left to be determined now is whether or not
the dismissal of Civil case No. 02-52 operated as a dismissal on the merits that would
complete the requirements of res judicata.

In advancing their claim, petitioners cite Rule 17, Sec. 3 of the Rules of Court, to wit:
Section 3. Dismissal due to fault of plaintiff. — If, for no justifiable cause, the plaintiff
fails to appear on the date of the presentation of his evidence in chief on the complaint,
or to prosecute his action for an unreasonable length of time, or to comply with these
Rules or any order of the court, the complaint may be dismissed upon motion of the
defendant or upon the court’s own motion, without prejudice to the right of the defendant
to prosecute his counterclaim in the same or in a separate action. This dismissal shall
have the effect of an adjudication upon the merits, unless otherwise declared by the
court.

The afore-quoted provision enumerates the instances when a complaint may be

dismissed due to the plaintiff's fault: (1) if he fails to appear on the date for the
presentation of his evidence in chief on the complaint; (2) if he fails to prosecute his
action for an unreasonable length of time; or (3) if he fails to comply with the Rules or
any order of the court. The dismissal of a case for failure to prosecute has the effect of
adjudication on the merits, and is necessarily understood to be with prejudice to the
filing of another action, unless otherwise provided in the order of dismissal. Stated
differently, the general rule is that dismissal of a case for failure to prosecute is to be
regarded as an adjudication on the merits and with prejudice to the filing of another
action, and the only exception is when the order of dismissal expressly contains a
qualification that the dismissal is without prejudice.26 In the case at bar, petitioners claim
that the Order does not in any language say that the dismissal is without prejudice and,
thus, the requirement that the dismissal be on the merits is present.

Truly, We have had the occasion to rule that dismissal with prejudice under the above-
cited rule amply satisfies one of the elements of res judicata.27 It is, thus,
understandable why petitioners would allege res judicata to bolster their claim.
However, dismissal with prejudice under Rule 17, Sec. 3 of the Rules of Court cannot
defeat the right of a co-owner to ask for partition at any time, provided that there is no
actual adjudication of ownership of shares yet. Pertinent hereto is Article 494 of the Civil
Code, which reads:

Article 494. No co-owner shall be obliged to remain in the co-ownership. Each co-owner
may demand at any time the partition of the thing owned in common, insofar as his
share is concerned.

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

A donor or testator may prohibit partition for a period which shall not exceed twenty
years. Neither shall there be any partition when it is prohibited by law. No prescription
shall run in favor of a co-owner or co-heir against his co-owners or co-heirs so long as
he expressly or impliedly recognizes the co-ownership. (emphasis supplied)

From the above-quoted provision, it can be gleaned that the law generally does not
favor the retention of co-ownership as a property relation, and is interested instead in
ascertaining the co-owners’ specific shares so as to prevent the allocation of portions to
remain perpetually in limbo. Thus, the law provides that each co-owner may demand at
any time the partition of the thing owned in common.

Between dismissal with prejudice under Rule 17, Sec. 3 and the right granted to co-
owners under Art. 494 of the Civil Code, the latter must prevail. To construe otherwise
would diminish the substantive right of a co-owner through the promulgation of
procedural rules. Such a construction is not sanctioned by the principle, which is too
well settled to require citation, that a substantive law cannot be amended by a
procedural rule.28 This further finds support in Art. 496 of the New Civil Code, viz:

Article [Link] may be made by agreement between the parties or by judicial

proceedings.1âwphi1 Partition shall be governed by the Rules of Court insofar as they
are consistent with this Code.

Thus, for the Rules to be consistent with statutory provisions, We hold that Art. 494, as
cited, is an exception to Rule 17, Sec. 3 of the Rules of Court to the effect that even if
the order of dismissal for failure to prosecute is silent on whether or not it is with
prejudice, it shall be deemed to be without prejudice.

This is not to say, however, that the action for partition will never be barred by res
judicata. There can still be res judicata in partition cases concerning the same parties
and the same subject matter once the respective shares of the co-owners have been
determined with finality by a competent court with jurisdiction or if the court determines
that partition is improper for co-ownership does not or no longer exists.

So it was that in Rizal v. Naredo,29 We ruled in the following wise:

Article 484 of the New Civil Code provides that there is co-ownership whenever the
ownership of an undivided thing or right belongs to different persons. Thus, on the one
hand, a co-owner of an undivided parcel of land is an owner of the whole, and over the
whole he exercises the right of dominion, but he is at the same time the owner of a
portion which is truly abstract. On the other hand, there is no co-ownership when the
different portions owned by different people are already concretely determined and
separately identifiable, even if not yet technically described.

Pursuant to Article 494 of the Civil Code, no co-owner is obliged to remain in the co-
ownership, and his proper remedy is an action for partition under Rule 69 of the Rules
of Court, which he may bring at anytime in so far as his share is concerned. Article 1079
of the Civil Code defines partition as the separation, division and assignment of a thing
held in common among those to whom it may belong. It has been held that the fact that
the agreement of partition lacks the technical description of the parties’ respective
portions or that the subject property was then still embraced by the same certificate of
title could not legally prevent a partition, where the different portions allotted to each
were determined and became separately identifiable.
The partition of Lot No. 252 was the result of the approved Compromise Agreement in
Civil Case No. 36-C, which was immediately final and executory. Absent any showing
that said Compromise Agreement was vitiated by fraud, mistake or duress, the court
cannot set aside a judgment based on compromise. It is axiomatic that a compromise
agreement once approved by the court settles the rights of the parties and has the force
of res judicata. It cannot be disturbed except on the ground of vice of consent or forgery.

Of equal significance is the fact that the compromise judgment in Civil Case No. 36-C
settled as well the question of which specific portions of Lot No. 252 accrued to the
parties separately as their proportionate shares therein. Through their subdivision
survey plan, marked as Annex "A" of the Compromise Agreement and made an integral
part thereof, the parties segregated and separately assigned to themselves distinct
portions of Lot No. 252. The partition was immediately executory, having been
accomplished and completed on December 1, 1971 when judgment was rendered
approving the same. The CA was correct when it stated that no co-ownership exist
when the different portions owned by different people are already concretely determined
and separately identifiable, even if not yet technically described. (emphasis supplied)

In the quoted case, We have held that res judicata applied because after the parties
executed a compromise agreement that was duly approved by the court, the different
portions of the owners have already been ascertained. Thus, there was no longer a co-
ownership and there was nothing left to partition. This is in contrast with the case at bar
wherein the co-ownership, as determined by the trial court, is still subsisting 30-70 in
favor of respondent spouses Candelario. Consequently, there is no legal bar preventing
herein respondents from praying for the partition of the property through counterclaim.

The counterclaim for partition is not barred by laches

We now proceed to petitioners’ second line of attack. According to petitioners, the claim
for partition is already barred by laches since by 1999, both Bienvenido and Escolastica
Ibarra had already died and yet the respondent siblings only belatedly filed the action for
partition, Civil Case No. 02-52, in 2002. And since laches has allegedly already set in
against respondent siblings, so too should respondent spouses Candelario be barred
from claiming the same for they could not have acquired a better right than their
predecessors-in-interest.

The argument fails to persuade.

Laches is the failure or neglect, for an unreasonable and unexplained length of time, to
do that which––by the exercise of due diligence––could or should have been done
earlier. It is the negligence or omission to assert a right within a reasonable period,
warranting the presumption that the party entitled to assert it has either abandoned or
declined to assert it.30 The principle is a creation of equity which, as such, is applied not
really to penalize neglect or sleeping upon one’s right, but rather to avoid recognizing a
right when to do so would result in a clearly inequitable situation. As an equitable
defense, laches does not concern itself with the character of the petitioners’ title, but
only with whether or not by reason of the respondents’ long inaction or inexcusable
neglect, they should be barred from asserting this claim at all, because to allow them to
do so would be inequitable and unjust to petitioners.31

As correctly appreciated by the lower courts, respondents cannot be said to have

neglected to assert their right over the subject property. They cannot be considered to
have abandoned their right given that they filed an action for partition sometime in 2002,
even though it was later dismissed. Furthermore, the fact that respondent siblings
entered into a Contract of Lease with Avico Lending Investor Co. over the subject
property is evidence that they are exercising rights of ownership over the same.

The CA erred in approving the Agreement for Subdivision

There is merit, however, in petitioners’ contention that the CA erred in approving the
proposal for partition submitted by respondent spouses. Art. 496, as earlier cited,
provides that partition shall either be by agreement of the parties or in accordance with
the Rules of Court. In this case, the Agreement of Subdivision allegedly executed by
respondent spouses Candelario and petitioners cannot serve as basis for partition, for,
as stated in the pre-trial order, herein respondents admitted that the agreement was a
falsity and that petitioners never took part in preparing the same. The "agreement" was
crafted without any consultation whatsoever or any attempt to arrive at mutually
acceptable terms with petitioners. It, therefore, lacked the essential requisite of consent.
Thus, to approve the agreement in spite of this fact would be tantamount to allowing
respondent spouses to divide unilaterally the property among the co-owners based on
their own whims and caprices. Such a result could not be countenanced.

To rectify this with dispatch, the case must be remanded to the court of origin, which
shall proceed to partition the property in accordance with the procedure outlined in Rule
69 of the Rules of Court.

WHEREFORE, premises considered, the petition is hereby PARTLY GRANTED. The

assailed Decision and Resolution of the Court of Appeals in CA-G.R. CV No. 98919
dated July 8, 2013 and November 22, 2013, respectively, are hereby AFFIRMED with
MODIFICATION. The case is hereby REMANDED to the RTC, Branch 68 in Camiling,
Tarlac for purposes of partitioning the subject property in accordance with Rule 69 of
the Rules of Court.

SO ORDERED.
G.R. No. 192383 December 4, 2013

ISABELO C. DELA CRUZ, Petitioner,

vs.
LUCILA C. DELA CRUZ, Respondent.

DECISION

ABAD, J.:

This case deals with the right of a person to whom an immovable property has been
unconditionally given to demand its participation.

The Facts and the Case

Petitioner Isabelo C. Dela Cruz (Isabelo) claimed that in 1975 he and his sister,
respondent Lucila C. Dela Cruz and (Lucila) and Cornelia C. Dela Cruz (Cornelia),
bought on installment a 240-square meter land in Las Piñas from Gatchalian Realty,
Inc. Isabelo and Cornelia paid the down payment and religiously paid the monthly
amortizations.1On the following year, Isabelo constructed a residential house on the
subject lot.2

Because of Lucia’s plea for the siblings to help their cousin, Corazon L. Victoriano
(Corazon), who was in financial distress, Isabelo agreed to have the lot they bought
used as collateral for the loan that Corazon planned to secure from the Philippine
Veterans Bank. To make this posible, Lucila paid the ₱8,000.00 that they still owed
Gatchalian Realty, Inc. On January 18, 1979 the Register of Deeds issued Transfer
Certificate of Title (TCT) S-80735 in Lucila’s name3 and this was mortgaged for
Corazon’s benefit. But, since Corazon failed to pay her loan, the bank foreclosed on the
property on March 1, 1989 for ₱286,000.00. Lucila redeemed it on March 27, 1992.4

On October 7, 2002 Lucila executed an affidavit of waiver5 relinquishing all her share,
interest, and participation to half of the lot to Isabelo and the other half to her niece,
Emelinda C. Dela Cruz (Emelinda). On even date, Isabelo and Emelinda executed a
Kasunduan6 acknowledging their respective rights in the property. Claiming ownership
of half of the subject property by virtue of Lucila’s affidavit of waiver, on August 22, 2005
Isabelo filed an action for partition before the Regional Trial Court (RTC) of Las Piñas
City in SCA 05-0008, seeking the segregation of his portion of the land and the
issuance of the corresponding title in his name. But Lucila countered that the property,
including the house built on it, belonged to her since she paid for the same out of her
income as pawnshop general manager and from selling jewelry.7

She claimed that her affidavit of waiver did not cede ownership of half of the property to
Isabelo since the affidavit made clear that her waiver would take effect only if the
problems that beset their family were resolved. Since this condition had not been met,
she had every right to revoke that waiver as in fact she did so on September 24, 2004 in
the Kasulatan ng Pagpawalang Bisa ng "Affidavit Waiver."8

On February 7, 2008 the RTC rendered a Decision9 denying Isabelo’s complaint for lack
of merit. It also ordered him to pay Lucila ₱50,000.00 as attorney’s fees and to bear the
costs of suit.10

The RTC ruled that Lucila’s ownership was evidenced by the tax declaration, the real
property tax payment order, and the title to the land in her name. Isabelo’s testimony on
cross-examination conclusively also showed that Lucila owned the property.11

Isabelo’s contention that it was he and Cornelia who paid for the monthly amortization of
the property cannot be believed since Cornelia herself testified that Lucila paid for all
the amortizations on the land.12

Further, the RTC held that Lucila’s affidavit of waiver did not confer title over the
property on Isabelo considering that, absent an annotation on TCT S-80735, the waiver
cannot ripen into an adverse claim. More importantly, Lucila already cancelled the
waiver through the Kasulatan that she subsequently executed.13

The RTC was also unconvinced that the house belonged to Isabelo. It noted that the
receipts for the construction materials and survey plan that he presented did not prove
ownership. Recovery of property, not partition was the proper remedy. Isabelo appealed
to the Court of Appeals (CA) in CA-G.R. CV 90797. On December 18, 2009 the latter
court rendered a Decision14 affirming the RTC ruling that Isabelo failed to established
his right to half of the subject property as would entitle him to have the same partitioned.
But the CA deleted the award of attorney’s fees and costs for failure of Lucila to justify
her claims and for the RTC’s failure to state in its decision the rationale for the awards.
Isabelo moved for reconsideration but the CA denied it.15

Issue Presented

The sole issue presented in this case is whether or not the CA erred in failing to rule
that Lucila’s cession of half of the property to Isabelo through waiver did not have the
effect of making him part owner of the property with a right to demand partition.

Ruling of the Court

In partition, the court must first determine the existence of co-ownership. The action will
not lie if the plaintiff has no proprietary interest in the subject property. Indeed, the
rules16 require him to set forth in his complaint the nature and extent of his title to the
property. It would be premature to order partition until the question of ownership is first
definitely resolved.17

At bottom, the question is: did Lucila’s affidavit of waiver ceding to Isabelo half of the
subject property conveys to him a right of ownership over that half? The CA agreed with
the RTC that Lucila’s affidavit of waiver did not vest any property right to Isabelo since
the condition she set in that affidavit had not been fulfilled. This then gave Lucila the
right in the meantime to rescind the waiver, something that she eventually did. But,
contrary to the position that the CA and the RTC had taken, Lucila’s waiver was
absolute and contained no precondition. The pertinent portion of the affidavit of waiver
reads:

That to put everything in proper order, I hereby waive all my share, interest and
participation in so far as it refer to the one half portion (120 SQ. M.) of the above-parcel
of land, with and in favor of my brother ISABELO C. DELA CRUZ, of legal age, married,
Filipino and residing at Las Pinas City, and the other half portion (120 SQ. M.) in favor
of my niece, EMELINDA C. DELA CRUZ, also of legal age, single, Filipino and residing
at Sto. Rosario Hagonoy, Bulacan; x x x x18

Evidently, Lucila would not have used the terms "to put everything in proper order, I
hereby waive…" if her intent was to set a precondition to her waiver covering the
property, half to Isabelo and half to Emelinda. If that were her intention, she could have
stated, "subject to the condition that everything is put in proper order, I hereby waive..."
or something to that effect. When she instead said, "That to put everything in proper
order, I hereby waive my share, interest and participation" in the two halves of the
subject property in favor of Isabelo and Emelinda, Lucila merely disclosed what
motivated her in ceding the property to them. She wanted to put everything in proper
order, thus she was driven to make the waiver in their favor. Lucila did not say, "to put
everything in proper order, I promise to waive my right" to the property, which is a future
undertaking, one that is demandable only when everything is put in proper order. But
she instead said, "to put everything in proper order, I hereby waive" etc. The phrase
"hereby waive" means that Lucila was, by executing the affidavit, already waiving her
right to the property, irreversibly divesting herself of her existing right to the same. After
he and his co-owner Emelinda accepted the donation, Isabelo became the owner of half
of the subject property having the right to demand its partition.

WHEREFORE, THE Court:

1. GRANTS the petition;

2. SETS ASIDE the Decision dated December 18, 2009 and resolution dates
May 25, 2010 of the Court of Appeals in CA-G.R. CV 90797 as well as the
Decision dated February 7, 2008 of the Regional Trial Court of Las Piñas in SCA
05-0008;

3. ORDERS the partition of the subject property between petitioner Isabelo C.

Dela Cruz and Emelinda C. Dela Cruz;

4. ORDERS the remand of the records of SCA 05-0008 to the Regional Trial
Court of Las Piñas; and
 5. DIRECTS the latter court to proceed with the partition proceedings in the case
in accordance with Section 2, Rule 69 of the Rules of Civil Procedure.

SO ORDERED.
G.R. No. 178451 July 30, 2014

RURAL BANK OF CABADBARAN, INC., Petitioner,

vs.
JORGITA A. MELECIO-YAP, LILIA MELECIO PACIFICO (deceased, substituted by
her only child ERILL*ISAAC M. PACIFICO, JR.), REYNALDO A. MELECIO
DELOSO, and SARAH MELECIO PALMA-GIL,Respondents.

DECISION

PERLAS-BERNABE, J.:

Assailed in this petition for review on certiorari' are the Decision2 dated February 28,
2006 and the Resolution3 dated June 12, 2007 rendered by the Court of Appeals (CA)
in CA-G.R. CV No. 70933 which (a) set aside the Decision4dated November 27, 2000 of
the Regional Trial Court (RTC) of Butuan City, Branch 33, in Civil Case No. 4406; (b)
declared the Special Power of Attorney, the Extra-Judicial Adjudication of a Parcel of
Land and the Addendum to th~ Extra-Judicial Adjudication of the Estate of Isaac
Melecio and Trinidad Melecio Both Deceased as forgeries, and the extrajudicial
foreclosure .sale, writ of possession,· and all proceedings· relative thereto null and void
as against respondents; and (c) ordered the remand of the case to the court a quofor
further proceedings.

The Facts

Erna Melecio-Mantala (Erna) and respondents Jorgita A. Melecio-Yap (Jorgita), Lilia

Melecio Pacifico (Lilia), Reynaldo A. Melecio, Rosie Melecio-Deloso (Rosie), and Sarah
Melecio Palma-Gil (Sarah) are the children of the late spouses Isaac and Trinidad
Melecio (Melecio Heirs). They inherited a 3,044 square meter-residential lot located in
Tolosa, Cabadbaran, Agusan del Norte, togetherwith the ancestral house and two (2)
other structures erected thereon (subject properties). The administration and
management of the said properties were left to the care of Erna5 who was then residing
in their ancestral home.6

On August 24, 1990, the Melecio Heirs purportedly executed a notarized Special Power
of Attorney (SPA)7authorizing Erna to apply for a loan with petitioner Rural Bank of
Cabadbaran, Inc. (RBCI) and mortgage the subject properties. Armed with the said
SPA, Erna applied for and was granted a commercial loan by RBCI inthe amount of
200,000.00 with 27% interest rate per annum, payable within a period of 180 days.8 The
loan was secured by a Real Estate Mortgage9 over the subject properties which was
registered with the Registry of Deeds of Agusan del Norte10and annotated on Tax
Declaration (TD) No. 425-R11 covering the mortgaged lot.

Erna, however, defaulted in the payment of her loan obligation when it fell due, causing
RBCI to extra-judicially foreclose the mortgaged properties 12in accordance with Act
No. 3135,13 as amended. In the process, RBCI emerged as the highest bidder in the
public auction sale held on August 26, 1992 for a total bid price of 405,045.65.14 Since
Erna failed to redeem the subject properties withinthe redemption period despite
notice,15 the latest tax declarations16 in the names of the Melecio Heirs covering the
subject properties were cancelled and new tax declarations in the name of RBCI were
issued.17 Thereafter, RBCI informed Erna of its intent to take physical possession of the
subject properties,18 while the actual occupant thereof, a certain Jimmyrando C.
Morales, was directed to pay rentals to RBCI beginning September 1995.19

In a letter20 dated October 11, 1995, respondents, through counsel, informed RBCI that
they were unaware of the loan obtained by Erna and did not authorize the mortgage
transaction over the subject properties which they co-owned. They claimed that the SPA
submitted by Erna in support of her loan application was spurious, and that their
signatures appearing thereon were falsified. As such, theydemanded RBCI to release
the subject properties from the coverage of Erna's loan obligation to the extent of their
shares.

In reply, RBCI maintained the validityof the SPA and its right to rely on it being a
notarized document. It likewise claimed that it was impossible for respondents not to
have known about the mortgage transaction considering that the publication and notice
requirements in foreclosure proceedings were followed and that constant reminders
were sent to redeem the subject properties which they failed to heed.21

In view of respondents’ refusal tovacate the premises, RBCI applied for and was issued
a writ ofpossession dated March 22, 1996 by the RTC of Butuan City, Branch 1 in
Special Proceeding No. 899.22 The writ of Possession23 was, thereafter, served and
returned duly satisfied and complied with by the Sheriff who turned over the subject
properties to RBCI on April 11, 1996.24

Consequently, or on April 17, 1996, respondents filed a complaint25 for declaration of

nullity of documents, recovery of possession and ownership, and damages with prayer
for the issuance of a writ of preliminary injunction against Spouses Erna and Bonifacio
Mantala (Sps. Mantala), RBCI, the Office of the Provincial Sheriff, and Spouses
Jimmyrando and Teresita Morales (Sps. Morales) before the RTC of Butuan City,
Branch 2, docketed as Civil Case No. 4406. In the said complaint, respondents averred
that they learned of the foreclosure of the subject properties only sometime in October
199526 and, upon investigation, discovered that the said properties were mortgaged by
their sister, Erna, bearing ostensible authority under the subject SPA.27 They alleged
that they did not participate in the execution of the said SPA and prayed that the same,
as well as the mortgage contract, the writ of possession, the sheriff’s turn-over receipt,
and all derivative titles, documents, issuances, and registrations arising therefrom be
declared null and void and that the subject properties be reconveyed back to them.

Extraterritorial service of summons was effected upon Sps. Mantala28 who, at the time
of the filing of the aforementioned complaint, were found to be already living in Dubai,
United Arab Emirates.29 Despite receipt of the summons and a copy of the complaint,
however, they did not file an answer and, thus, were declared in default.30
For their part, the other defendants, i.e., RBCI, Sps. Morales, and the Office of the
Provincial Sheriff, maintained the validity of the notarized SPA and the foreclosure
proceedings which carry the presumption of regularity that respondents failed to
overcome.31 Having relied on the SPA, RBCI invoked the defense of a mortgagee in
good faith whose subsequent ownership and possession of the subject properties must
be respected. Said defendants thereby prayed for the dismissal of the complaint and the
payment of damages, attorney’s fees, and litigation expenses for having been
compelled to litigate against the baseless suit.32 RBCI likewise filed a crossclaim against
Sps. Mantala, praying for reimbursement of the expenses incurred in relation to the
foreclosure proceedings and the present litigation in the event of a favorable
judgment.33

During the trial, RBCI presented the notarized Extra-Judicial Adjudication of a Parcel of
Land and the Addendum to the Extra-Judicial Adjudication of the Estate of Isaac
Melecio and Trinidad Melecio Both Deceased (Extra-Judicial Adjudication Documents)
allegedly executed by respondents as further documentary bases for its grant of Erna’s
loan application.34

On rebuttal, respondents denied having executed the Extra-Judicial Adjudication

Documents, contending that their signatures therein were likewise falsified, and that
they never met in Cabadbaran to execute the same before a notary public.
Nonetheless,they admitted to have discovered that the ownership of the subject
properties had already been transferred to RBCI in 1993, contrary to their earlier claim
that they learned about it only in 1995.35

Before the RTC’s resolution of the case, respondent Lilia died36 and was substituted by
her only child, Erll Isaac M. Pacifico.37

The RTC Ruling

On November 27, 2000, the RTC ofButuan City, Branch 33 rendered a Decision38 in
favor of RBCI, declaring the real estate mortgage and the consequential foreclosure
proceedingsto be valid and binding against respondents, notwithstanding the allegation
of forgery in the questioned documents. It noted that despite constructive knowledge of
the falsification as early as 1993, respondents questioned the foreclosure proceedings
only in 1996. It, thus, concluded that they would not have raised the issue on forgeries
or falsification had Sps. Mantala paid the loan obligation or redeemed the properties
and, consequently, held them guilty of acquiescence and estoppel.39Accordingly, the
RTC declared Sps. Mantala liable to both respondents and RBCI, and adjudged them
jointly and solidarily liable to pay: (a) respondents compensatory damages in the
amount of ₱1,000,000.00 with 12% interest rate for the loss of the family ancestral
house and lot foreclosed by RBCI, as well as moral and exemplary damages in the
amounts of ₱250,000.00 and ₱100,000.00, respectively, and attorney's fees and
litigation expenses in the sum of ₱70,000.00; (b) RBCI attorney's fees and litigation
expensesin the total amount of ₱70,000.00; and (c) the costs of suit.40
Dissatisfied, respondents appealed to the CA.

The CA Ruling

In a Decision41 dated February 28, 2006, the CA reversed the RTC Decision, finding
that Erna had no authority to mortgage the subject properties to RBCI since the SPA
was actually a forgery, and, hence, null and void.42 It held that while a notarized
document generally carries the evidentiary weight conferred upon it with respect to its
due execution, respondents, nonetheless, were ableto rebut by clear, positive and
convincing evidence that their signatures on the contested SPA were forged.43 The CA
reached the same conclusion with respect to the ExtraJudicial Adjudication Documents,
and likewise declared the same invalid.44 Moreover, contrary to the findings of the RTC,
the CA held that there was no constructive knowledge of the falsification, noting that the
respondents were not furnished by RBCI with any notice relative to the loan obligation
nor impleaded in the foreclosure proceedings and the ex-partepetition for writ of
possession.45 In this relation, the CA pointed out that acquiescence cannot validate or
ratify an inexistent or void document nor can estoppel lie against respondents who had
no deliberate intent to mislead.46

In view of the foregoing, the CA declared the real estate mortgage executed on the
strength of the falsified SPA as an invalid encumbrance of respondents’ individual
shares over the subject properties which cannot be bound by the subsequent
foreclosure proceedings conducted. Nevertheless, it held that a valid transaction was
executed between RBCI and Erna to the extent of the latter’s 1/6 share in the subject
properties which portion respondents, as co-owners, may redeem.47

Further, the CA ordered a remand of the case (a) to determine the exact extent of the
respective rights, interests, shares, and participation of respondents and RBCI over the
subject properties, (b) thereafter, to effect a final division, adjudication, and partition in
accordance with law, and (c) to re-compute the loan obligation, inclusive of interests,
penalties, and other charges due against Sps. Mantala.48

Finally, the CA deleted the awards of moral and exemplary damages, attorney's fees,
and litigation expenses for lack of factual and legal bases49 and ordered Sps. Mantala to
pay the costs.50

RBCI’s motion for reconsideration was denied by the CA in a Resolution51 dated June
12, 2007, hence, this petition.

The Issues Before the Court

The essential issues for the Court’s resolution are whether or not (a) the presumption of
regularity accorded to the notarized SPA and ExtraJudicial Adjudication Documents was
rebutted by clear and convincing evidence; (b) respondents are guilty of lachesand,
thus, estopped from questioning the validity of the realestate mortgageand subsequent
foreclosure proceedings; and (c) RBCI can be considered as a mortgagee in good faith.
 The Court’s Ruling

The petition is partly granted.

Preliminarily, the rule is settled that the remedy of appeal by certiorari under Rule 45 of
the Rules of Court contemplates only questions of law, not of fact. The theory of forgery
advanced by respondents involves a question of fact. While it is not the function of the
Court to undertake a reexamination of the evidence presented by the contending parties
during the trial of the case, there are, however, recognized exceptions, among which is
when the findings of the trial court and the appellate court are conflicting, as in this
case.52

The settled rule is that persons constituting a mortgage must be legally authorized for
the purpose.53 In the present case, while Erna appears to be a co-owner of the
mortgaged properties, she made it appearthat she was duly authorized to sell the entire
properties by virtue of the notarized SPA dated August 24, 1990.

Generally, a notarized document carries the evidentiary weight conferred upon it with
respect to its due execution, and documents acknowledged before a notary public have
in their favor the presumption of regularity which may only be rebutted by clear and
convincing evidence.54 However, the presumptions that attach to notarized documents
can be affirmed only so long as it is beyond dispute that the notarization was
regular.55 A defective notarization will strip the document of its public character and
reduce it to a private document.56 Hence, when there is a defect in the notarization of a
document, the clear and convincing evidentiary standard normally attached to a duly-
notarized document is dispensed with, and the measure to test the validity of such
document is preponderance of evidence.57

In the present case, RBCI failed toshow that the subject SPA which it relied upon as
proof of Erna’s ostensibleauthority to mortgage the entirety of the subject properties was
regularlynotarized. Aside from the respondents who denied having participated in the
execution and notarization of the subject SPA, the witnesses to the instrument, i.e.,
Guendelyn Lopez Salas- Montaus and Carmelita Cayeta Bunga, categorically denied
having appeared before Notary Public Alan M. Famador (Atty. Famador) on August 24,
1990 to witness the respondents sign the SPA in the notary public’s presence.58 Despite
this irregularity, RBCI did not present Atty. Famador to refute the same and establish
the authenticity of the contested SPA. It may not be amiss to point out that the principal
function of a notary public is to authenticate documents. When a notary public certifies
to the due execution and delivery of a document under his hand and seal, he gives the
document the force of evidence.59

Thus, having failed to sufficientlyestablish the regularity in the execution of the SPA, the
presumption of regularity accorded by law to notarized documents can no longer apply
and the questioned SPA is to be examined under the parameters of Section 20, Rule
132 of the Rules of Court which provides that "[b]efore any private document offered as
authentic is received in evidence, itsdue execution and authenticity must be proved
either (a) [b]y anyone who saw the document executed or written, or (b) [b]y evidence of
the genuineness of the signature or handwriting of the maker."

Correspondingly, the burden falls upon RBCI to prove the authenticity and due
execution of the subject SPA.60 In the case at bar, RBCI merely relied on the
presumption of authenticity and due execution accorded to a notarized document,
without presenting any other evidence to bolster their case.61 However, these
presumptions had been overcome and effectively negated by respondents’ claims of
forgery which had been duly substantiated by them through their testimonial and
documentary evidence.62 Hence, absent any cogent reason to the contrary, the Court
hereby sustains the CA’s conclusion that respondents were able to prove, by
preponderance of evidence, that the subject SPA was a forgery.

To be clear, the above-stated conclusion is only made with respect to the subject SPA
and not the Extra-Judicial Adjudication Documents as the latter should be excluded
from any forgery analysis since they were not among those documents sought to
benullified by respondents in its complaint. Nevertheless, this observation bears little
significance to the resolution of the ultimate issue at hand. This is because the forged
status of the subject SPA alone is already enough for the Court to declare the real
estate mortgage contract null and void but only with respect to the shares of the other
co-owners (i.e., respondents)whose consent thereto was not actually procured by Erna.
While Erna, as herself a co-owner, by virtue of Article 493 of the Civil Code,63 had the
right to mortgage or even sell her undivided interest in the said properties, she, could
not, however, dispose of or mortgage the subject properties in their entirety without the
consent of the other co-owners.64 Accordingly, the validity ofthe subject real estate
mortgage and the subsequent foreclosure proceedings therefor conducted in favor of
RBCI should be limited only to the portion which may be allotted to it (as the successor-
in-interest of Erna) in the event of partition. In this relation, the CA’s directive to remand
the case to the RTC in order to determine the exact extentof the respective rights,
interests, shares and participation of respondents and RBCI over the subject properties,
and thereafter, effect a final division, adjudication and partition in accordance with law
remains in [Link], the writ of possession issued in favor of RBCI, and all
proceedings relative thereto should be set aside considering that the latter’s specific
possessory rights to the said properties remain undetermined.

The Court, however, finds no need to conduct a remand of the case for the purpose of
re-computing the loan obligation inclusive of interests, penalties and other charges due
against Sps. Mantala65 for the reason that the said loan is the principal obligation to
which the subject realestate mortgage is merely an accessory to. In Philippine National
Bank v. Banatao,66 it was enunciated that:

[A] mortgage is merely an accessory agreement and does not affect the principal
contract of loan. The mortgages, while void, [however,] can still be considered as
instruments evidencing the indebtedness x x x.67

Similarly, in Flores v. Lindo, Jr.,68 the Court pronounced that:

The liability of x x x on the principal contract of the loan however subsists
notwithstanding the illegality of the mortgage. Indeed, where a mortgage is not valid, the
principal obligation which it guarantees is not thereby rendered null and void.
Thatobligation matures and becomes demandable in accordance with the stipulation
pertaining to it. Under the foregoing circumstances, what is lost is merely the right to
foreclose the mortgage as a special remedy for satisfying or settling the indebtedness
which is the principal obligation. In case of nullity, the mortgage deed remains as
evidence or proof of a personal obligation of the debtor and the amount due to the
creditor may be enforced in an ordinary action.69

Based on the foregoing, the partial invalidity of the subject real estate mortgage brought
about by the forged status of the subject SPA would not, therefore, result into the partial
invalidation of the loan obligation principally entered into by RBCI and Sps.
Mantala;thus, absent any cogent reason to hold otherwise, the need for the
recomputation of said loan obligation should be dispensed with.

As for RBCI’s claim that it should be deemed a mortgagee in good faith for having
conducted exhaustive investigations on the history of the mortgagor’s title,70 the Court
finds the same untenable. Two reasons impel this conclusion: first, the doctrine of
mortgagee in good faith applies only to lands registered under the Torrens system and
not to unregistered lands, as the properties in suit;71 and second, the principle is
inapplicable to banking institutions which are behooved to exercise greater care and
prudence before entering into a mortgage contract. Hence,the ascertainment of the
status or condition of properties offered as security for loans must be a standard and an
indispensable part of its operations.72

In this case, RBCI failed to observethe required level of caution in ascertaining the
genuineness of the SPA considering that Erna owns only an aliquot part of the
properties offered assecurity for the loan. It should not have simply relied on the face of
the documents submitted since its undertaking to lend a considerable amountof money
as a banking institution requires a greater degree of diligence. Hence, its rights as
mortgagee and, now, as co-owner, should only be limited to Erna’s share to the subject
properties and not, absent the other co-owners’ consent, to its entirety.

Finally, the Court cannot subscribe to RBCI's contention that respondents are barred by
lachesfrom laying claim over the subject properties in view of their inexplicable inaction
from the time they learned of the falsification. Lachesis principally a doctrine of equity. It
is negligence or omission to assert a right within a reasonable time, warranting a
presumption that the party entitled toassert it eitherhas abandoned or declined to assert
it.73 In this case, the complaint for nullification of the SPA was filed before the RTC on
April 17,1996, or barely three years from respondents' discovery of the averred forgery
in 1993, which is within the four-year prescriptive period provided under Article 114674 of
the Civil Code to institute an action upon the injury to their rights over the subject
properties. A delay within the prescriptive period is sanctioned by law and is not
considered to be a delay that would bar relief. Laches applies only in the absence of a
statutory prescriptive period.75 Furthermore, the doctrine of !aches cannot be used to
defeat justice or perpetrate fraud and injustice. It is the more prudent rule that courts,
under the principle of equity, will not be guided or bound strictly by the statute of
limitations or the doctrine of !aches when by doing so, manifest wrong or injustice would
result,76 as in this case.

Neither is there estoppel. Under Article 1431 of the Civil Code, an essential element of
estoppel is that the person invoking it has been influenced and has relied on the
representations or conduct of the person sought to be estopped. Said element is,
however, wanting in this case.1âwphi1

WHEREFORE, the petition is PARTLY GRANTED. The Decision dated February 28,
2006 and the [Link] June 12, 2007 of the Court of Appeals in CA-G.R. CV
No. 70933 are hereby AFFIRMED with MODIFICATIONS deleting (a) the declaration of
nullity of the ExtraJudicial Adjudication of a Parcel of Land and-the Addendum to the
ExtraJudicial Adjudication of the Estate of Isaac Melecio and Trinidad Melecio Both
Deceased, as well as ( b) the order to remand the case for the purpose of re-computing
the loan obligation of Spouses Erna Melecio-Mantala and Bonifacio Mantala to Rural
Bank of Cabadbaran, Inc. (RBCI).

The Writ of Possession issued in favor of RBCI, and all proceedings relative thereto, are
fui;-ther SET ASIDE considering that the latter's specific possessory rights to the said
properties remain undetermined.

SO ORDERED.
G.R. No. 185745 October 15, 2014

SPOUSES DOMINADOR MARCOS and GLORIA MARCOS, Petitioners,

vs.
HEIRS OF ISIDRO BANGI and GENOVEVA DICCION, represented by NOLITO
SABIANO, Respondents.

DECISION

REYES, J.:

Before this Court is a Petition for Review on Certiorari1 under Rule 45 of the Rules of
Court seeking to annul and set aside the Decision2 dated September 30, 2008 and
Resolution3 dated :Oecember 4, 2008 issued by the Court of Appeals (CA) in CA-G.R.
CV Nb. 89508, which affirmed the Decision4 dated March 26, 2007 of the Regidnal Trial
Court (RTC) of Urdaneta City, Pangasinan, Branch 47, in Civil Case No. U-6603.

On June 26, 1998, the heirs of Isidro Bangi (Isidro) and Genoveva Diccion (Genoveva)
(respondents), filed with the RTC a complaint,5 docketed as Civil Case No. U-6603, for
annulment of documents, cancellation of transfer certificates of titles, restoration of
original certificate of title and recovery of ownership plus damages against spouses
Dominador Marcos (Dominador) and Gloria Marcos (Gloria) (petitioners). Likewise
impleaded in the said complaint are spouses Jose Dilla (Jose) and Pacita Dilla (Pacita),
Ceasaria Alap (Ceasaria), and spouses Emilio Sumajit (Emilio) and Zenaida Sumajit
(Zenaida).

In their complaint, the respondents averred that on November 5, 1943, their parents,
Isidro and Genoveva, bought the one-third portion of a 2,138-square meter parcel of
land situated in San Manuel, Pangasinan and covered by Original Certificate of Title
(OCT) No. 22361 (subject property) from Eusebio Bangi (Eusebio), as evidenced by a
Deed of Absolute Sale executed by the latter. OCT No. 22361 was registered in the
name of Alipio Bangi (Alipio), Eusebio’s father. After the sale, the respondents claimed
that Isidro and Genoveva took possession of the subject property until they passed
away. The respondents then took possession of the same.

Further, the respondents alleged that sometime in 1998, they learned that the title to the
subject property, including the portion sold to Isidro and Genoveva, was transferred to
herein petitioner Dominador, Primo Alap (Primo), Ceasaria’s husband, Jose, and Emilio
through a Deed of Absolute Sale dated August 10, 1995, supposedly executed by Alipio
with the consent of his wife Ramona Diccion (Ramona). The respondents claimed that
the said deed of absolute sale is a forgery since Alipio died in 1918 while Ramona
passed away on June 13, 1957.

Consequently, by virtue of the alleged Deed of Absolute Sale dated August 10, 1995,
OCT No. 22361 was cancelled and Transfer Certificate of Title (TCT) No. 47829 was
issued to Dominador, Primo, Jose and Emilio. On November 21, 1995, Primo, Jose and
Emilio executed another deed of absolute sale over the same property in favor of herein
petitioners. TCT No. T-47829 was then cancelled and TCT No. T-48446 was issued in
the names of herein petitioners. The respondents claimed that the Deed of Absolute
Sale dated November 21, 1995 was likewise a forgery since Primo could not have
signed the same on the said date since he died on January 29, 1972.

Thus, the respondents sought the nullification of the Deeds of Absolute Sale dated
August 10, 1995 and November 21, 1995 and, accordingly, the cancellation of TCT
Nos. T-47829 and T-48446. The respondents likewise sought the restoration of OCT
No. 22361.

In their answer, herein petitioners, together with the spouses Jose and Pacita, Ceasaria
and the spouses Emilio and Zenaida, denied the allegations of the respondents,
claiming that they are the owners of the subject property, including the one-third portion
thereof allegedly sold by Eusebio to the respondents’ parents Isidro and Genoveva.
They averred that the subject property was originally owned by Alipio; that after his
death, his children – Eusebio, Espedita and Jose Bangi – inherited the same. That on
May 8, 1995, Espedita and Jose Bangi executed a deed of extrajudicial partition with
quitclaim wherein they waived their rights over the subject property in favor of Eusebio’s
children – Ceasaria, Zenaida, Pacita and herein petitioner Gloria.

They further claimed that their father Eusebio could not have validly sold the one-third
portion of the subject property to Isidro and Genoveva. They explained that Eusebio
supposedly acquired the parcel of land covered by OCT No. 22361 by virtue of a
donation propter nuptias from his father Alipio when he married Ildefonsa Compay
(Ildefonsa) in 1928. They claimed that the donation propter nuptias in favor of Eusebio
was fictitious since Alipio died in 1918 and that, in any case, the said donation, even if
not fictitious, is void since the same was not registered.

They also averred that they had no participation in the execution of the Deed of
Absolute Sale dated August 10, 1995, claiming that it was a certain Dominador Quero,
the one hired by herein petitioner Gloria to facilitate the transfer of OCT No. 22361 in
their names, who caused the execution of the same.

Subsequently, the respondents and Ceasaria and the spouses Emilio and Zenaida
entered into a compromise agreement wherein Ceasaria and spouses Emilio and
Zenaida acknowledged the right of the respondents over the subject property and
admitted the existence of the sale of the one-third portion thereof by Eusebio in favor of
the spouses Isidro and Genoveva. Thus, the case as to Ceasaria and the spouses
Emilio and Zenaida was dismissed.

On March 26, 2007, the RTC rendered a Decision6 the decretal portion of which reads:

WHEREFORE, premises considered, judgment is hereby rendered:

1) Declaring the Deed of Absolute Sale dated August 10, 1995 x x x and Deed of
Absolute Sale dated November 21, 1995 x x x as null and void;

2) Declaring Transfer Certificate of Title No. T-47829 issued in the names of PRIMO
ALAP married to [Ceasaria] Alap, JOSE DILLA married to Pacita Dilla, DOMINADOR
MARCOS married to Gloria Marcos, and EMILIO SUMAJIT married to Zenaida Sumajit
x x x and Transfer Certificate of Title No. T-48446 in the name of Spouses
DOMINADOR MARCOS and GLORIA BANGI x x x as null and void.

Consequently, the Registrar of Deeds of Tayug, Pangasinan is hereby directed to

cancel the same and all the other copies thereof and that Original Certificate of Title No.
22361 in the name of Alipio Bangi married to Romana Diccion be revived and/or
reinstated in the registration book.

3) Declaring the sale by Eusebio Bangi of his share to the land in question in favor of x x
x Isidro Bangi and Genoveva Diccion as valid and effective.

4) For the defendant to pay the costs.

SO ORDERED.7

The RTC opined that the Deed of Absolute Sale dated August 10, 1995 is a nullity; that
the same was falsified considering that Alipio could not have executed the same in the
said date since he died in 1918. Consequently, all the documents and certificates of title
issued as a consequence of the Deed of Absolute Sale dated August 10, 1995 are void.
Thus:

In fact, defendant Gloria Marcos admitted in Court that the Deed of Absolute Sale was
falsified, only it was allegedly falsified by a certain Dominador Quero. This
notwithstanding, the fact still remains, that the Deed of Absolute Sale, which was the
basis for the cancellation of the Original Certificate of Title No. 22361, was falsified.

xxxx

The Deed of Absolute Sale dated August 10, 1995, being a forged document, is without
question, null and void. This being the case, the land titles issued by reason thereof are
also void because a forged deed conveys no right.8

The RTC upheld the Deed of Absolute Sale dated November 5, 1943 over the one-third
portion of the subject property executed by Eusebio in favor of the spouses Isidro and
Genoveva. The RTC pointed out that the petitioners merely claimed that the signature
of Eusebio appearing on the Deed of Absolute Sale dated November 5, 1943 was
falsified without presenting any other evidence to prove such claim.

As regards the claim that Eusebio could not have validly sold the one-third portion of the
subject property since his acquisition of the same in 1928 through a donation propter
nuptias by Alipio was fictitious since the latter died in 1918, the RTC found that the
petitioners likewise failed to present any evidence to prove such allegation. Considering
that the Deed of Absolute Sale dated November 5, 1943 is a notarized document, the
RTC ruled that the same must be sustained in full force and effect since the petitioners
failed to present strong, complete and conclusive proof of its falsity or nullity.

Unperturbed, the petitioners appealed from the RTC Decision dated March 26, 2007 to
the CA, maintaining that the sale between Eusebio and the spouses Isidro and
Genoveva was invalid.9 They explained that the Deed of Absolute Sale dated November
5, 1943 stated that Eusebio acquired the subject property from his parents Alipio and
Ramona through a donation propter nuptias; that Eusebio got married to Ildefonsa in
1928 and Alipio Bangi could not have executed a donation then because he died in
1918.

Ruling of the CA

On September 30, 2008, the CA rendered the herein assailed Decision,10 which
affirmed the Decision dated March 26, 2007 of the RTC. The CA upheld the petitioners’
claim that the supposed donation propter nuptias of the subject property in favor of
Eusebio from his parents was not sufficiently established. The CA pointed out that the
purported Deed of Donation was not recorded in the Register of Deeds; that there is no
showing that the said donation was made in a public instrument as required by the
Spanish Civil Code, the law in effect at the time of the supposed donation in favor of
Eusebio.

Nevertheless, the CA found that Eusebio, at the time he executed the Deed of Absolute
Sale in favor of the spouses Isidro and Genoveva, already owned the subject property,
having inherited the same from his father Alipio who died in 1918. Further, the CA did
not give credence to the Deed of Extrajudicial Partition with Quitclaim purportedly
executed by Espedita and Jose Bangi since it appears to have been caused to be
executed by the petitioners as a mere afterthought and only for the purpose of thwarting
the respondents’ valid claim.11

The petitioners sought a reconsideration12 of the Decision dated September 30, 2008,
but it was denied by the CA in its Resolution13 dated December 4, 2008.

Hence, the instant petition.

Issue

The issue set forth by the petitioners for this Court’s resolution is whether the CA
committed reversible error in affirming the RTC Decision dated March 26, 2007, which
upheld the Deed of Absolute Sale dated November 5, 1943 over the one-third portion of
the subject property executed by Eusebio in favor of the spouses Isidro and Genoveva.

Ruling of the Court

The petition is denied.

The appellate court upheld the validity of the sale of the one-third portion of the subject
property to the spouses Isidro and Genoveva mainly on the finding that, after the death
of Alipio in 1918, an oral partition was had between Eusebio and his siblings Espedita
and Jose Bangi; that at the time of the said sale on November 5, 1943 to the spouses
Isidro and Genoveva, Eusebio was already the owner of the subject property.

On the other hand, the petitioners maintain that the said sale of the one-third portion of
the subject property was not valid. They insinuate that the subject property, at the time
of the sale, was still owned in common by the heirs of Alipio; that Eusebio could not
validly sell the one-third portion of the subject property as there was no partition yet
among the heirs of Alipio.

Ultimately, the resolution of the instant controversy is hinged upon the question of
whether the heirs of Alipio had already effected a partition of his estate prior to the sale
of the one-third portion of the subject property to the spouses Isidro and Genoveva on
November 5, 1943. However, the foregoing question is a factual question, which this
Court may not pass upon in a petition for review under Rule 45 of the Rules of Court.

Section 1, Rule 45 of the Rules of Court categorically states that the petition filed shall
raise only questions of law, which must be distinctly set forth. A question of law arises
when there is doubt as to what the law is on a certain state of facts, while there is a
question of fact when the doubt arises as to the truth or falsity of the alleged facts. For a
question to be one of law, the same must not involve an examination of the probative
value of the evidence presented by the litigants or any of them. The resolution of the
issue must rest solely on what the law provides on the given set of circumstances. Once
it is clear that the issue invites a review of the evidence presented, the question posed
is one of fact.14

The determination of whether the heirs of Alipio had already partitioned his estate prior
to the sale of the one-third portion of the subject property on November 5, 1943
necessarily requires an examination of the probative value of the evidence presented by
the parties; the doubt arises on the truth or falsity of the allegations of the parties.

Even granting arguendo that the petition falls under any of the exceptions justifying a
factual review of the findings of the appellate court, the petition cannot prosper. The
Court is of the opinion, and so holds, that the CA did not commit any reversible error in
ruling that an oral partition of the estate of Alipio had already been effected by his heirs
prior to the sale by Eusebio of the one-third portion of the subject property to the
spouses Isidro and Genoveva on November 5, 1943.

The petitioners claim that the CA erred in ruling that there was already a partition of the
estate of Alipio prior to the sale of the one-third portion of the subject property by
Eusebio to the spouses Isidro and Genoveva. They insist that "there was no deed of
extrajudicial partition by and among Eusebio, Jose and Espedita [Bangi], wherein
Eusebio [was assigned the subject property]."15 Accordingly, the petitioners aver, the
sale in favor of the spouses Isidro and Genoveva on November 5, 1943 is a nullity and,
consequently, the respondents do not have any right over the subject property.

The Court does not agree.

Partition is the separation, division and assignment of a thing held in common among
those to whom it may belong.16 Every act which is intended to put an end to indivision
among co-heirs and legatees or devisees is deemed to be a partition.17 Partition may be
inferred from circumstances sufficiently strong to support the presumption. Thus, after a
long possession in severalty, a deed of partition may be presumed.18 Thus, in
Hernandez v. Andal,19 the Court emphasized 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.

xxxx

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.20

The evidence presented by the parties indubitably show that, after the death of Alipio,
his heirs – Eusebio, Espedita and Jose Bangi – had orally partitioned his estate,
including the subject property, which was assigned to Eusebio. On this score, the CA’s
disquisition is instructive, viz:

Even so, We are of the considered view that in 1943, when Eusebio Bangi executed the
deed of sale in favor of Isidro Bangi, Eusebio already had acquired interest in the
property covered by OCT No. 22361 through succession from his father, Alipio Bangi,
who died in 1918.

Further, it appears that such interest extends to the entire property embraced by OCT
No. 22361. This much can be gleaned from the testimony of appellant Gloria Marcos
herself, who said that her father Eusebio owned the entire lot because his siblings
Espedita and Jose already had their share from other properties.

That there was no written memorandum of the partition among Alipio Bangi’s heirs
cannot detract from appellee’s cause.1âwphi1 It has been ruled that oral partition is
effective when the parties have consummated it by the taking of possession in severalty
and the exercise of ownership of the respective portions set off to each. Here, it is
obvious that Eusebio took possession of his share and exercised ownership over it.
Thus, the preponderant evidence points to the validity of the sale executed between
Eusebio Bangi and Isidro Bangi on November 5, 1943 over the one-third portion of the
property covered by OCT No. 22361. x x x.21 (Emphasis ours)

Further, the CA did not err in not giving credence to the Deed of Extrajudicial Partition
with Quitclaim supposedly executed by Espedita and Jose Bangi on May 8, 1995. The
Court notes that Alipio died in 1918 while his wife Ramona died on June 13, 1957. It is
quite suspect that Espedita and Jose Bangi executed the said Deed of Extrajudicial
Partition, wherein they waived their rights over the subject property in favor of Eusebio’s
children, only on May 8, 1995. That only several months thereafter, the subject property
was supposedly sold to the spouses of Eusebio’s children and, later, to herein
petitioners spouses Dominador and Gloria.

The foregoing circumstances cast doubt as to the petitioners’ insinuation that the estate
of Alipio had only been partitioned in 1995, when Espedita and Jose Bangi executed the
said Deed of Extrajudicial Partition with Quitclaim. As pointed out by the CA, the
execution of the Deed of Extrajudicial Partition with Quitclaim is but a ruse to defeat the
rights of the respondents over the one-third portion of the subject property. If at all, the
Deed of Extrajudicial Partition with Quitclaim executed by Espedita and Jose Bangi
merely confirms the partition of Alipio’s estate that was earlier had, albeit orally, in which
the subject property was assigned to Eusebio.

Accordingly, considering that Eusebio already owned the subject property at the time he
sold the one-third portion thereof to the spouses Isidro and Genoveva on November 5,
1943, having been assigned the same pursuant to the oral partition of the estate of
Alipio effected by his heirs, the lower courts correctly nullified the Deeds of Absolute
Sale dated August 10, 1995 and November 21, 1995, as well as TCT No. T-47829 and
T-48446.

WHEREFORE, in consideration of the foregoing disquisitions, the petition is DENIED.

The Decision dated September 30, 2008 and Resolution dated December 4, 2008 of the
Court of Appeals in CA-G.R. CV No. 89508 are hereby AFFIRMED.

SO ORDERED.
 [G.R. No. 166790. March 13, 2006]

JUAN P. CABRERA versus HENRY ISAAC

Special Third Division

Sirs/Mesdames:

Quoted hereunder, for your information is a resolution of the Third Division of this Court
dated MAR. 13, 2006

G.R. No. 166790 (Juan P. Cabrera versus Henry Isaac)

On December 22, 2005, petitioner Juan P. Cabrera wrote a letter to the Court questioning
the Court's action on his petition. In particular, petitioner emphatically raised the following
query:

IS NOT THE THIRD DIVISION'S PATENTLY ERRONEOUS FINDING THAT [HIS]

PETITION WAS ALLEGEDLY FILED BY MAIL ON 24 MARCH 2005 (MAUNDY
THURSDAY, POST OFFICE CLOSED) WHEN IN FACT IT WAS SO POSTED ON 24
FEBRUARY 2005 (FOUR DAYS BEFORE THE DEADLINE) NOT COMPELLING
ENOUGH A REASON TO RECONSIDER AND SET ASIDE THE RESOLUTION OF 27
APRIL 2005?

The petition was calendared in the Third Division's agenda for April 27, 2005 where the
Division Clerk of Court made the following notation:

Petition posted out of time.

Date posted: March 24, 2005

x x xx x xx x x

Due Date of Filing: February 28, 2005 (emphasis supplied)

The report prepared by a processor of the Receiving Unit of the Judicial Records Office
(JRO) also stated that the petition was posted on March 24, 2005. Based on the Division
Clerk of Court's note in the agenda and the JRO's report, the petition was denied for
having been filed late.

Petitioner moved for reconsideration but it was denied with finality.

In his letter, petitioner claimed that the petition was actually posted on February 24,
2005 which was within the period for its filing. Verification showed that his claim is
true. In this connection, the Division Clerk of Court's notation in today's agenda is
noteworthy:
The resolution dated 27 April 2005 denied the petition for late filing. In the resolution
of August 17, 2005, petitioner's motion for reconsideration was denied with finality.

It appears that the petition was indeed seasonably filed as claimed by petitioner. There
was an inadvertent error on the part of the Receiving Unit of the Judicial Records Office
in writing the date of posting as "3/24/05." (p. 10, rollo) The postal date mark appearing
on the envelope that contained the petition shows that it was posted on February 24,
2005. (p. 83, rollo) The affidavit of service, as well as the registry receipts (p. 82, rollo),
supports the claim of petitioner.

To avoid inflicting an injustice on petitioner and to rectify the undue denial of his petition
resulting from the wrong notation of the Division Clerk of Court and the erroneous report
of the JRO, petitioner's letter is pro hac vice treated as a second motion for
reconsideration. In view of these circumstances, we find that reinstatement of his petition
is proper.

WHEREFORE, the December 22, 2005 letter of petitioner Juan P. Cabrera, hereby
treated as a motion for reconsideration, is GRANTED. The April 27, 2005 resolution is
hereby SET ASIDE and the petition is REINSTATED. Respondent is ordered to file
his COMMENT within 10 days from notice hereof.

SO ORDERED.
G.R. No. 187987 November 26, 2014

VICENTE TORRES, JR., CARLOS VELEZ, AND THE HEIRS OF MARIANO VELEZ,
NAMELY: ANITA CHIONG VELEZ, ROBERT OSCAR CHIONG VELEZ, SARAH
JEAN CHIONG VELEZ AND TED CHIONG VELEZ,Petitioners,
vs.
LORENZO LAPINID AND JESUS VELEZ, Respondents.

DECISION

PEREZ, J.:

This is a Petition for Review on Certiorari1 under Rule 45 of the Rules of Court filed by
the petitioners assailing the 30 January 2009 Decision2 and 14 May 2009 Resolution3 of
the Twentieth Division of the Corni of Appeals in CA-G.R. CV No. 02390, affirming the
15 October 2007 Decision4 of the Regional Trial Court of Cebu City (RTC Cebu City)
which dismissed the complaint for the declaration of nullity of deed of sale against
respondent Lorenzo Lapinid (Lapinid).

The facts as reviewed are the following:

On 4 February 2006, Vicente V. Torres, Jr. (Vicente), Mariano Velez (Mariano)5 and
Carlos Velez (petitioners) filed a Complaint6 before RTC Cebu City praying for the
nullification of the sale of real property by respondent Jesus Velez (Jesus) in favor of
Lapinid; the recovery of possession and ownership of the property; and the payment of
damages.

Petitioners alleged in their complaint that they, including Jesus, are co-owners of
several parcels of land including the disputed Lot. No. 43897 located at Cogon, Carcar,
Cebu. Sometime in 1993, Jesus filed an action for partition of the parcels of land against
the petitioners and other co-owners before Branch 21 of RTC Cebu City. On 13 August
2001, a judgment was rendered based on a compromise agreement signed by the
parties wherein they agreed that Jesus, Mariano and Vicente were jointly authorized to
sell the said properties and receive the proceeds thereof and distribute them to all the
co-owners. However, the agreement was later amended to exclude Jesus as an
authorized seller. Pursuant totheir mandate, the petitioners inspected the property and
discovered that Lapinid was occupying a specific portion of the 3000 square meters of
Lot No. 4389 by virtue of a deed of sale executed by Jesus in favor of Lapinid. It was
pointed out by petitioner that as a consequence of what they discovered, a forcible entry
case was filed against Lapinid.

The petitioners prayed that the deed of sale be declared null and void arguing that the
sale of a definite portion of a co-owned property without notice to the other co-owners is
without force and effect. Further, the complainants prayed for payment of rental fees
amounting to ₱1,000.00 per month from January 2004 or from the time of deprivation of
property in addition to attorney’s fees and litigation expenses.
Answering the allegations, Jesus admitted that there was a partition case between him
and the petitioners filed in 1993 involvingseveral parcels of land including the contested
Lot No. 4389. However, he insisted that as early as 6 November 1997, a motion 8 was
signed by the co-owners (including the petitioners) wherein Lot No. 4389 was agreed to
be adjudicated to the co-owners belonging to the group of Jesus and the other lots be
divided to the other co-owners belonging to the group of Torres. Jesus further alleged
that even prior to the partition and motion, several coowners in his group had already
sold their shares to him in various dates of 1985, 1990 and 2004.9 Thus, when the
motion was filed and signed by the parties on 6 November 1997, his rights asa majority
co-owner (73%) of Lot No. 4389 became consolidated. Jesus averred that it was
unnecessary to give notice of the sale as the lot was already adjudicated in his favor.
He clarified that he only agreed with the 2001 Compromise Agreement believing that it
only pertained to the remaining parcels of land excluding Lot No. 4389.10

On his part, Lapinid admitted that a deed of sale was entered into between him and
Jesus pertaining to a parcel of land with an area of 3000 square meters. However, he
insistedon the validity of sale since Jesus showed him several deeds of sale making him
a majority owner of Lot No. 4389. He further denied that he acquired a specific and
definite portion of the questioned property, citing as evidence the deed of sale which
does not mention any boundaries or specific portion. He explained that Jesus permitted
him to occupy a portion notexceeding 3000 square meters conditioned on the result of
the partition of the co-owners.11

Regarding the forcible entry case, Jesus and Lapinid admitted that such case was filed
but the same was already dismissed by the Municipal Trial Court of Carcar, Cebu. In
that decision, it was ruled that the buyers, including Lapinid, were buyers in good faith
since a proof of ownership was shown to them by Jesus before buying the property.12

On 15 October 2007, the trial court dismissed the complaint of petitioners in this wise:
Therefore, the Court DISMISSES the Complaint. At the same time, the Court
NULLIFIES the site assignment made by Jesus Velez in the Deed of Sale, dated
November 9, 1997, of Lorenzo Lapinid’s portion, the exact location of which still has to
be determined either by agreement of the co-owners or by the Court in proper
proceedings.13

Aggrieved, petitioners filed their partial motion for reconsideration which was denied
through a 26 November 2007 Order of the court.14 Thereafter, they filed a notice of
appeal on 10 December 2007.15

On 30 January 2009, the Court of Appeals affirmed16 the decision of the trial court. It
validated the sale and ruled that the compromise agreement did not affect the validity of
the sale previously executed by Jesus and Lapinid. It likewise dismissed the claim for
rental payments, attorney’s fees and litigation expenses of the petitioners.

Upon appeal before this Court, the petitioners echo the same arguments posited before
the lower courts. They argue that Lapinid, as the successor-in-interest of Jesus, is also
bound by the 2001 judgment based on compromise stating that the parcels of land must
be sold jointly by Jesus, Mariano and Vicente and the proceeds of the sale be divided
among the coowners. To further strengthen their contention, they advance the argument
that since the portion sold was a definite and specific portion of a co-owned property,
the entire deed of sale must be declared null and void.

We deny the petition.

Admittedly, Jesus sold an area ofland to Lapinid on 9 November 1997. To simplify, the
question now iswhether Jesus, as a co-owner, can validly sell a portion of the property
heco-owns in favor of another person. We answer in the affirmative.

A co-owner has an absolute ownership of his undivided and proindiviso share in the co-
owned property.17 He has the right to alienate, assign and mortgage it, even to the
extent of substituting a third person in its enjoyment provided that no personal rightswill
be affected. This is evident from the provision of the Civil Code:

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

A co-owner is an owner of the whole and over the whole he exercises the right of
dominion, but he is at the same time the owner of a portion which is truly
abstract.18 Hence, his co-owners have no right to enjoin a coowner who intends to
alienate or substitute his abstract portion or substitute a third person in its enjoyment.19

In this case, Jesus can validly alienate his co-owned property in favor of Lapinid, free
from any opposition from the co-owners. Lapinid, as a transferee, validly obtained the
same rights of Jesus from the date of the execution of a valid sale. Absent any proof
that the sale was not perfected, the validity of sale subsists. In essence, Lapinid steps
into the shoes of Jesus as co-owner of an ideal and proportionate share in the property
held in common.20 Thus, from the perfection of contract on 9 November 1997, Lapinid
eventually became a co-owner of the property.

Even assuming that the petitioners are correct in their allegation that the disposition in
favor of Lapinid before partition was a concrete or definite portion, the validity of sale
still prevails.

In a catena of decisions,21 the Supreme Court had repeatedly held that no individual can
claim title to a definite or concrete portion before partition of co-owned property. Each
co-owner only possesses a right to sell or alienate his ideal share after partition.
However, in case he disposes his share before partition, such disposition does not
make the sale or alienation null and void. What will be affected on the sale is only his
proportionate share, subject to the results of the partition. The co-owners who did not
give their consent to the sale stand to be unaffected by the alienation.22

As explained in Spouses Del Campo v. Court of Appeals:23

We are not unaware of the principle that a co-owner cannot rightfully dispose of a
particular portion of a co-owned property prior to partition among all the co-owners.
However, this should not signify that the vendee does not acquire anything atall in case
a physically segregated area of the co-owned lot is in fact sold to him. Since the
coowner/vendor’s undivided interest could properly be the object of the contract of sale
between the parties, what the vendee obtains by virtue of such a sale are the same
rights as the vendor had asco-owner, in an ideal share equivalent to the consideration
given under their transaction. In other words, the vendee steps into the shoes of the
vendor as co-owner and acquires a proportionate abstract share in the property held in
common.24

Also worth noting is the pronouncement in Lopez v. Vda. De Cuaycong:25

x x x The fact that the agreement in question purported to sell a concrete portionof the
hacienda does not render the sale void, for it is a wellestablished 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 quantumvalere potest." (When a thing is of no
force as I do it, it shall have as much force as it can have).26 (Italics theirs).

Consequently, whether the disposition involves an abstract or concrete portion of the

co-owned property, the sale remains validly executed.

The validity of sale being settled,it follows that the subsequent compromise agreement
between the other co-owners did not affect the rights of Lapinid as a co-owner.

Records show that on 13 August 2001, a judgment based on compromise agreement

was rendered with regard to the previous partition case involving the same parties
pertaining to several parcels of land, including the disputed lot. The words of the
compromise state that: COME NOW[,] the parties and to this Honorable Court, most
respectfully state that instead of partitioning the properties, subject matter of litigation,
that they will just sell the properties covered by TCT Nos. 25796, 25797 and 25798 of
the Register of Deeds of the Province of Cebu and divide the proceeds among
themselves.

That Jesus Velez, Mariano Velez and Vicente Torres, Jr. are currently authorized to sell
said properties, receive the proceeds thereof and distribute them to the parties.27

Be that as it may, the compromise agreement failed to defeat the already accrued right
of ownership of Lapinid over the share sold by Jesus. As early as 9 November 1997,
Lapinid already became a co-owner of the property and thus, vested with all the rights
enjoyed by the other co-owners. The judgment based on the compromise agreement,
which is to have the covered properties sold, is valid and effectual provided as it does
not affect the proportionate share of the non-consenting party. Accordingly, when the
compromise agreement was executed without Lapinid’s consent, said agreement could
not have affected his ideal and undivided share. Petitioners cannot sell Lapinid’s share
absent his consent. Nemo dat quod non habet – "no one can give what he does not
have."28

This Court has ruled in many cases 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 tothe sale. This is because the sale or other disposition of a co-owner
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.29

We find unacceptable the argument that Lapinid must pay rental payments to the other
co-owners.1âwphi1

As previously discussed, Lapinid,from the execution of sale, became a co-owner vested

with rights to enjoy the property held in common.

Clearly specified in the Civil Code are the following rights:

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

Art. 493. Each co-owner shall havethe 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 rightsare
involved. But the effect of the alienation or mortgage, with respect to the co-owners,
shall be limited to the portion which may be allotted to him in the division upon the
termination of the co-ownership.

Affirming these rights, the Court held in Aguilar v. Court of Appeals that:30

x x x Each co-owner of property heldpro indivisoexercises his rights over the whole
property and may use and enjoy the same with no other limitation than that he shall not
injure the interests of his co-owners, the reason being that until a division is made, the
respective share of each cannot be determined and every co-ownerexercises, together
with his coparticipants joint ownership over the pro indiviso property, in addition to his
use and enjoyment of the same.31 From the foregoing, it is absurd to rule that Lapinid,
who is already a co-owner, be ordered to pay rental payments to his other co-owners.
Lapinid’s right of enjoyment over the property owned in common must be respected
despite opposition and may notbe limited as long he uses the property to the purpose
for which it isintended and he does not injure the interest of the co-ownership.
Finally, we find no error on denial of attorney’s fees and litigation expenses.

Pursuant to Article 2208 of the New Civil Code, attorney’s fees and expenses of
litigation, in the absence of stipulation, are awarded only in the following instances:

xxxx

1. When exemplary damages are awarded;

2. When the defendant’s act or omission has compelled the plaintiff to litigate
with third persons or to incur expenses to protect his interests;

3. In criminal cases of malicious prosecution against the plaintiff;

4. In case of a clearly unfounded civil action or proceeding against the plaintiff;

5. Where the defendant acted in gross and evident bad faith in refusing to satisfy
the plaintiff’s plainly valid and demandable claim;

6. In actions for legal support;

7. In actions for the recovery of wages of household helpers, laborers and skilled
workers;

8. In actions for indemnity under workmen's compensation and employer's

liability laws;

9. In a separate civil action to recover civil liability arising from a cnme;

10. When at least double judicial costs arc awarded;

11. In any other case where the court deems it just and equitable that attorney's
fees and expenses oflitigation should be recovered.

In all cases, the attorney's fees and expenses of litigation must be reasonable.

Petitioners cite Jesus' act of selling a definite portion to Lapinid as the reason which
forced them to litigate and file their complaint. However, though the Court may not fault
the complainants when they filed a complaint based on their perceived cause of action,
they should have also considered thoroughly that it is well within the rights of a co-
owner to validly sell his ideal share pursuant to law and jurisprudence.

WHEREFORE, the petition is DENIED. Accordingly, the Decision and Resolution of the
Court of Appeals dated 30 January 2009 and 14 May 2009 are hereby AFFIRMED.

SO ORDERED.
G.R. No. L-33187 March 31, 1980

CORNELIO PAMPLONA alias GEMINIANO PAMPLONA and APOLONIA

ONTE, petitioners,
vs.
VIVENCIO MORETO, VICTOR MORETO, ELIGIO MORETO, MARCELO MORETO,
PAULINA MORETO, ROSARIO MORETO, MARTA MORETO, SEVERINA
MENDOZA, PABLO MENDOZA, LAZARO MENDOZA, VICTORIA TUIZA, JOSEFINA
MORETO, LEANDRO MORETO and LORENZO MENDOZA, respondents.

E.P. Caguioa for petitioners.

Benjamin C. Yatco for respondents.

GUERRERO, J.:

This is a petition for certiorari by way of appeal from the decision of the Court of
Appeals 1 in CA-G.R. No. 35962-R, entitled "Vivencio Moreto, et al., Plaintiff-
Appellees vs. Cornelio Pamplona, et al., Defendants-Appellants," affirming the decision
of the Court of First Instance of Laguna, Branch I at Biñan.

The facts, as stated in the decision appealed from, show that:

Flaviano Moreto and Monica Maniega were husband and wife. During their marriage,
they acquired adjacent lots Nos. 1495, 4545, and 1496 of the Calamba Friar Land
Estate, situated in Calamba, Laguna, containing 781-544 and 1,021 square meters
respectively and covered by certificates of title issued in the name of "Flaviano Moreto,
married to Monica Maniega."

The spouses Flaviano Moreto and Monica Maniega begot during their marriage six (6)
children, namely, Ursulo, Marta, La Paz, Alipio, Pablo, and Leandro, all surnamed
Moreto.

Ursulo Moreto died intestate on May 24, 1959 leaving as his heirs herein plaintiffs
Vivencio, Marcelo, Rosario, Victor, Paulina, Marta and Eligio, all surnamed Moreto.

Marta Moreto died also intestate on April 30, 1938 leaving as her heir plaintiff Victoria
Tuiza.

La Paz Moreto died intestate on July 17, 1954 leaving the following heirs, namely,
herein plaintiffs Pablo, Severina, Lazaro, and Lorenzo, all surnamed Mendoza.

Alipio Moreto died intestate on June 30, 1943 leaving as his heir herein plaintiff Josefina
Moreto.
Pablo Moreto died intestate on April 25, 1942 leaving no issue and as his heirs his
brother plaintiff Leandro Moreto and the other plaintiffs herein.

On May 6, 1946, Monica Maniega died intestate in Calamba, Laguna.

On July 30, 1952, or more than six (6) years after the death of his wife Monica Maniega,
Flaviano Moreto, without the consent of the heirs of his said deceased wife Monica, and
before any liquidation of the conjugal partnership of Monica and Flaviano could be
effected, executed in favor of Geminiano Pamplona, married to defendant Apolonia
Onte, the deed of absolute sale (Exh. "1") covering lot No. 1495 for P900.00. The deed
of sale (Exh. "1") contained a description of lot No. 1495 as having an area of 781
square meters and covered by transfer certificate of title No. 14570 issued in the name
of Flaviano Moreto, married to Monica Maniega, although the lot was acquired during
their marriage. As a result of the sale, the said certificate of title was cancelled and a
new transfer certificate of title No. T-5671 was issued in the name of Geminiano
Pamplona married to Apolonia Onte (Exh. "A").

After the execution of the above-mentioned deed of sale (Exh. "1"), the spouses
Geminiano Pamplona and Apolonia Onte constructed their house on the eastern part of
lot 1496 as Flaviano Moreto, at the time of the sale, pointed to it as the land which he
sold to Geminiano Pamplona. Shortly thereafter, Rafael Pamplona, son of the spouses
Geminiano Pamplona and Apolonia Onte, also built his house within lot 1496 about one
meter from its boundary with the adjoining lot. The vendor Flaviano Moreto and the
vendee Geminiano Pamplona thought all the time that the portion of 781 square meters
which was the subject matter of their sale transaction was No. 1495 and so lot No. 1495
appears to be the subject matter in the deed of sale (Exh. "1") although the fact is that
the said portion sold thought of by the parties to be lot No. 1495 is a part of lot No.
1496.

From 1956 to 1960, the spouses Geminiano Pamplona and Apolonio Onte enlarged
their house and they even constructed a piggery corral at the back of their said house
about one and one-half meters from the eastern boundary of lot 1496.

On August 12, 1956, Flaviano Moreto died intestate. In 1961, the plaintiffs demanded
on the defendants to vacate the premises where they had their house and piggery on
the ground that Flaviano Moreto had no right to sell the lot which he sold to Geminiano
Pamplona as the same belongs to the conjugal partnership of Flaviano and his
deceased wife and the latter was already dead when the sale was executed without the
consent of the plaintiffs who are the heirs of Monica. The spouses Geminiano Pamplona
and Apolonia Onte refused to vacate the premises occupied by them and hence, this
suit was instituted by the heirs of Monica Maniega seeking for the declaration of the
nullity of the deed of sale of July 30, 1952 above-mentioned as regards one-half of the
property subject matter of said deed; to declare the plaintiffs as the rightful owners of
the other half of said lot; to allow the plaintiffs to redeem the one-half portion thereof
sold to the defendants. "After payment of the other half of the purchase price"; to order
the defendants to vacate the portions occupied by them; to order the defendants to pay
actual and moral damages and attorney's fees to the plaintiffs; to order the defendants
to pay plaintiffs P120.00 a year from August 1958 until they have vacated the premises
occupied by them for the use and occupancy of the same.

The defendants claim that the sale made by Flaviano Moreto in their favor is valid as the
lot sold is registered in the name of Flaviano Moreto and they are purchasers believing
in good faith that the vendor was the sole owner of the lot sold.

After a relocation of lots 1495, 1496 and 4545 made by agreement of the parties, it was
found out that there was mutual error between Flaviano Moreto and the defendants in
the execution of the deed of sale because while the said deed recited that the lot sold is
lot No. 1495, the real intention of the parties is that it was a portion consisting of 781
square meters of lot No. 1496 which was the subject matter of their sale transaction.

After trial, the lower court rendered judgment, the dispositive part thereof being as
follows:

WHEREFORE, judgment is hereby rendered for the plaintiffs declaring the

deed of absolute sale dated July 30, 1952 pertaining to the eastern portion
of Lot 1496 covering an area of 781 square meters null and void as
regards the 390.5 square meters of which plaintiffs are hereby declared
the rightful owners and entitled to its possession.

The sale is ordered valid with respect to the eastern one-half (1/2) of 1781
square meters of Lot 1496 measuring 390.5 square meters of which
defendants are declared lawful owners and entitled to its possession.

After proper survey segregating the eastern one-half portion with an area
of 390.5 square meters of Lot 1496, the defendants shall be entitled to a
certificate of title covering said portion and Transfer Certificate of Title No.
9843 of the office of the Register of Deeds of Laguna shall be cancelled
accordingly and new titles issued to the plaintiffs and to the defendants
covering their respective portions.

Transfer Certificate of Title No. 5671 of the office of the Register of Deeds
of Laguna covering Lot No. 1495 and registered in the name of Cornelio
Pamplona, married to Apolonia Onte, is by virtue of this decision ordered
cancelled. The defendants are ordered to surrender to the office of the
Register of Deeds of Laguna the owner's duplicate of Transfer Certificate
of Title No. 5671 within thirty (30) days after this decision shall have
become final for cancellation in accordance with this decision.

Let copy of this decision be furnished the Register of Deeds for the
province of Laguna for his information and guidance.

With costs against the defendants. 2

The defendants-appellants, not being satisfied with said judgment, appealed to the
Court of Appeals, which affirmed the judgment, hence they now come to this Court.

The fundamental and crucial issue in the case at bar is whether under the facts and
circumstances duly established by the evidence, petitioners are entitled to the full
ownership of the property in litigation, or only one-half of the same.

There is no question that when the petitioners purchased the property on July 30, 1952
from Flaviano Moreto for the price of P900.00, his wife Monica Maniega had already
been dead six years before, Monica having died on May 6, 1946. Hence, the conjugal
partnership of the spouses Flaviano Moreto and Monica Maniega had already been
dissolved. (Article 175, (1) New Civil Code; Article 1417, Old Civil Code). The records
show that the conjugal estate had not been inventoried, liquidated, settled and divided
by the heirs thereto in accordance with law. The necessary proceedings for the
liquidation of the conjugal partnership were not instituted by the heirs either in the
testate or intestate proceedings of the deceased spouse pursuant to Act 3176
amending Section 685 of Act 190. Neither was there an extra-judicial partition between
the surviving spouse and the heirs of the deceased spouse nor was an ordinary action
for partition brought for the purpose. Accordingly, the estate became the property of a
community between the surviving husband, Flaviano Moreto, and his children with the
deceased Monica Maniega in the concept of a co-ownership.

The community property of the marriage, at the dissolution of this bond by

the death of one of the spouses, ceases to belong to the legal partnership
and becomes the property of a community, by operation of law, between
the surviving spouse and the heirs of the deceased spouse, or the
exclusive property of the widower or the widow, it he or she be the heir of
the deceased spouse. Every co-owner shall have full ownership of his part
and in the fruits and benefits derived therefrom, and he therefore may
alienate, assign or mortgage it, and even substitute another person in its
enjoyment, unless personal rights are in question. (Marigsa vs.
Macabuntoc, 17 Phil. 107)

In Borja vs. Addision, 44 Phil. 895, 906, the Supreme Court said that "(t)here is no
reason in law why the heirs of the deceased wife may not form a partnership with the
surviving husband for the management and control of the community property of the
marriage and conceivably such a partnership, or rather community of property, between
the heirs and the surviving husband might be formed without a written agreement."
In Prades vs. Tecson, 49 Phil. 230, the Supreme Court held that "(a)lthough, when the
wife dies, the surviving husband, as administrator of the community property, has
authority to sell the property with ut the concurrence of the children of the marriage,
nevertheless this power can be waived in favor of the children, with the result of bringing
about a conventional ownership in common between the father and children as to such
property; and any one purchasing with knowledge of the changed status of the property
will acquire only the undivided interest of those members of the family who join in the
act of conveyance.
It is also not disputed that immediately after the execution of the sale in 1952, the
vendees constructed their house on the eastern part of Lot 1496 which the vendor
pointed out to them as the area sold, and two weeks thereafter, Rafael who is a son of
the vendees, also built his house within Lot 1496. Subsequently, a cemented piggery
coral was constructed by the vendees at the back of their house about one and one-half
meters from the eastern boundary of Lot 1496. Both vendor and vendees believed all
the time that the area of 781 sq. meters subject of the sale was Lot No. 1495 which
according to its title (T.C.T. No. 14570) contains an area of 781 sq. meters so that the
deed of sale between the parties Identified and described the land sold as Lot 1495. But
actually, as verified later by a surveyor upon agreement of the parties during the
proceedings of the case below, the area sold was within Lot 1496.

Again, there is no dispute that the houses of the spouses Cornelio Pamplona and
Apolonia Onte as well as that of their son Rafael Pamplona, including the concrete
piggery coral adjacent thereto, stood on the land from 1952 up to the filing of the
complaint by the private respondents on July 25, 1961, or a period of over nine (9)
years. And during said period, the private respondents who are the heirs of Monica
Maniega as well as of Flaviano Moreto who also died intestate on August 12, 1956,
lived as neighbors to the petitioner-vendees, yet lifted no finger to question the
occupation, possession and ownership of the land purchased by the Pamplonas, so that
We are persuaded and convinced to rule that private respondents are in estoppel by
laches to claim half of the property, in dispute as null and void. Estoppel by laches is a
rule of equity which bars a claimant from presenting his claim when, by reason of
abandonment and negligence, he allowed a long time to elapse without presenting the
same. (International Banking Corporation vs. Yared, 59 Phil. 92)

We have ruled that at the time of the sale in 1952, the conjugal partnership was already
dissolved six years before and therefore, the estate became a co-ownership between
Flaviano Moreto, the surviving husband, and the heirs of his deceased wife, Monica
Maniega. Article 493 of the New Civil Code is applicable and it provides a follows:

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 involve. 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.

We agree with the petitioner that there was a partial partition of the co-ownership when
at the time of the sale Flaviano Moreto pointed out the area and location of the 781 sq.
meters sold by him to the petitioners-vendees on which the latter built their house and
also that whereon Rafael, the son of petitioners likewise erected his house and an
adjacent coral for piggery.
Petitioners point to the fact that spouses Flaviano Moreto and Monica Maniega owned
three parcels of land denominated as Lot 1495 having an area of 781 sq. meters, Lot
1496 with an area of 1,021 sq. meters, and Lot 4545 with an area of 544 sq. meters.
The three lots have a total area of 2,346 sq. meters. These three parcels of lots are
contiguous with one another as each is bounded on one side by the other, thus: Lot
4545 is bounded on the northeast by Lot 1495 and on the southeast by Lot 1496. Lot
1495 is bounded on the west by Lot 4545. Lot 1496 is bounded on the west by Lot
4545. It is therefore, clear that the three lots constitute one big land. They are not
separate properties located in different places but they abut each other. This is not
disputed by private respondents. Hence, at the time of the sale, the co-ownership
constituted or covered these three lots adjacent to each other. And since Flaviano
Moreto was entitled to one-half pro-indiviso of the entire land area or 1,173 sq. meters
as his share, he had a perfect legal and lawful right to dispose of 781 sq. meters of his
share to the Pamplona spouses. Indeed, there was still a remainder of some 392 sq.
meters belonging to him at the time of the sale.

We reject respondent Court's ruling that the sale was valid as to one-half and invalid as
to the other half for the very simple reason that Flaviano Moreto, the vendor, had the
legal right to more than 781 sq. meters of the communal estate, a title which he could
dispose, alienate in favor of the vendees-petitioners. The title may be pro-indiviso or
inchoate but the moment the co-owner as vendor pointed out its location and even
indicated the boundaries over which the fences were to be erectd without objection,
protest or complaint by the 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 co-ownership, although partial, was created, and barred not only the
vendor, Flaviano Moreto, but also 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 Flaiano Moreto.

Equity commands that the private respondents, the successors of both the deceased
spouses, Flaviano Moreto and Monica Maniega be not allowed to impugn the sale
executed by Flaviano Moreto who indisputably received the consideration of P900.00
and which he, including his children, benefitted from the same. Moreover, as the heirs of
both Monica Maniega and Flaviano Moreto, private respondents are duty-bound to
comply with the provisions of Articles 1458 and 1495, Civil Code, which is the obligation
of the vendor of the property of delivering and transfering the ownership of the whole
property sold, which is transmitted on his death to his heirs, the herein private
respondents. The articles cited provide, thus:

Art. 1458. By the contract of sale one of the contracting parties obligates
himself to transfer the ownership of and to deliver a determinate thing, and
the other part to pay therefore a price certain in money or its equivalent.

A contract of sale may be absolute or conditionial.

 Art. 1495. The vendor is bound to transfer the ownership of and deliver, as
well as warrant the thing which is the object of the sale.

Under Article 776, New Civil Code, the inheritance which private respondents received
from their deceased parents and/or predecessors-in-interest included all the property
rights and obligations which were not extinguished by their parents' death. And under
Art. 1311, paragraph 1, New Civil Code, the contract of sale executed by the deceased
Flaviano Moreto took effect between the parties, their assigns and heirs, who are the
private respondents herein. Accordingly, to the private respondents is transmitted the
obligation to deliver in full ownership the whole area of 781 sq. meters to the petitioners
(which was the original obligation of their predecessor Flaviano Moreto) and not only
one-half thereof. Private respondents must comply with said obligation.

The records reveal that the area of 781 sq. meters sold to and occupied by petitioners
for more than 9 years already as of the filing of the complaint in 1961 had been re-
surveyed by private land surveyor Daniel Aranas. Petitioners are entitled to a
segregation of the area from Transfer Certificate of Title No. T-9843 covering Lot 1496
and they are also entitled to the issuance of a new Transfer Certificate of Title in their
name based on the relocation survey.

WHEREFORE, IN VIEW OF THE FOREGOING, the judgment appealed from is hereby

AFFIRMED with modification in the sense that the sale made and executed by Flaviano
Moreto in favor of the petitioners-vendees is hereby declared legal and valid in its
entirely.

Petitioners are hereby declared owners in full ownership of the 781 sq. meters at the
eastern portion of Lot 1496 now occupied by said petitioners and whereon their houses
and piggery coral stand.

The Register of Deeds of Laguna is hereby ordered to segregate the area of 781 sq.
meters from Certificate of Title No. 9843 and to issue a new Transfer Certificate of Title
to the petitioners covering the segregated area of 781 sq. meters.

No costs.

SO ORDERED.