EN BANC G.R. No. L-45425             April 29, 1939 JOSE GATCHALIAN, ET AL., plaintiffs-appellants, vs.THE COLLECTOR OF INTERNAL REVENUE, defendant-appellee.

Guillermo B. Reyes for appellants.Office of the Solicitor-General Tuason for appellee.

IMPERIAL, J.:

The plaintiff brought this action to recover from the defendant Collector of Internal Revenue the sum of P1,863.44, with legal interest thereon, which they paid under protest by way of income tax. They appealed from the decision rendered in the case on October 23, 1936 by the Court of First Instance of the City of Manila, which dismissed the action with the costs against them.

The case was submitted for decision upon the following stipulation of facts:

Come now the parties to the above-mentioned case, through their respective undersigned attorneys, and hereby agree to respectfully submit to this Honorable Court the case upon the following statement of facts:

1. That plaintiff are all residents of the municipality of Pulilan, Bulacan, and that defendant is the Collector of Internal Revenue of the Philippines;

2. That prior to December 15, 1934 plaintiffs, in order to enable them to purchase one sweepstakes ticket valued at two pesos (P2), subscribed and paid therefor the amounts as follows:

1. Jose Gatchalian ....................................................................................................2. Gregoria Cristobal ...............................................................................................3. Saturnina Silva ....................................................................................................4. Guillermo Tapia ...................................................................................................5. Jesus Legaspi ......................................................................................................6. Jose Silva .............................................................................................................7. Tomasa Mercado ................................................................................................8. Julio Gatchalian ...................................................................................................9. Emiliana Santiago ................................................................................................10. Maria C. Legaspi ...............................................................................................11. Francisco Cabral ...............................................................................................12. Gonzalo Javier ....................................................................................................13. Maria Santiago ...................................................................................................14. Buenaventura Guzman ......................................................................................15. Mariano Santos .................................................................................................

Total ........................................................................................................3. That immediately thereafter but prior to December 15, 1934, plaintiffs purchased, in the ordinary course of business, from one of the duly authorized agents of the National Charity Sweepstakes Office one ticket bearing No. 178637 for the sum of two pesos (P2) and that the said ticket was registered in the name of Jose Gatchalian and Company;

4. That as a result of the drawing of the sweepstakes on December 15, 1934, the above-mentioned ticket bearing No. 178637 won one of the third prizes in the amount of P50,000 and that the corresponding check covering the above-mentioned prize of P50,000 was drawn by the National Charity Sweepstakes Office in favor of Jose Gatchalian & Company against the Philippine National Bank, which check was cashed during the latter part of December, 1934 by Jose Gatchalian & Company;

5. That on December 29, 1934, Jose Gatchalian was required by income tax examiner Alfredo David to file the corresponding income tax return covering the prize won by Jose Gatchalian & Company and that on December 29, 1934, the said return was signed by Jose Gatchalian, a copy of which return is enclosed as Exhibit A and made a part hereof;

6. That on January 8, 1935, the defendant made an assessment against Jose Gatchalian & Company requesting the payment of the sum of P1,499.94 to the deputy provincial treasurer of Pulilan, Bulacan, giving to said Jose Gatchalian & Company until January 20, 1935 within which to pay the said amount of P1,499.94, a copy of which letter marked Exhibit B is enclosed and made a part hereof;

7. That on January 20, 1935, the plaintiffs, through their attorney, sent to defendant a reply, a copy of which marked Exhibit C is attached and made a part hereof, requesting exemption from payment of the income tax to which reply there were enclosed fifteen (15) separate individual income tax returns filed separately by each one of the plaintiffs, copies of which returns are attached and marked Exhibit D-1 to D-15, respectively, in order of their names listed in the caption of this case and made parts hereof; a statement of sale signed by Jose Gatchalian showing the amount put up by each of the plaintiffs to cover up the attached and marked as Exhibit E and made a part hereof; and a copy of the affidavit signed by Jose Gatchalian dated December 29, 1934 is attached and marked Exhibit F and made part thereof;

8. That the defendant in his letter dated January 28, 1935, a copy of which marked Exhibit G is enclosed, denied plaintiffs' request of January 20, 1935, for exemption from the payment of tax and reiterated his demand for the payment of the sum of P1,499.94 as income tax and gave plaintiffs until February 10, 1935 within which to pay the said tax;

9. That in view of the failure of the plaintiffs to pay the amount of tax demanded by the defendant, notwithstanding subsequent demand made by defendant upon the plaintiffs through their attorney on March 23, 1935, a copy of which marked Exhibit H is enclosed, defendant on May 13, 1935 issued a warrant of distraint and levy against the property of the plaintiffs, a copy of which warrant marked Exhibit I is enclosed and made a part hereof;

10. That to avoid embarrassment arising from the embargo of the property of the plaintiffs, the said plaintiffs on June 15, 1935, through Gregoria Cristobal, Maria C. Legaspi and Jesus Legaspi, paid under protest the sum of P601.51 as part of the tax and penalties to the municipal treasurer of Pulilan, Bulacan, as evidenced by official receipt No. 7454879 which is attached and marked Exhibit J and made a part hereof, and requested defendant that plaintiffs be allowed to pay under protest the balance of the tax and penalties by monthly installments;

11. That plaintiff's request to pay the balance of the tax and penalties was granted by defendant subject to the condition that plaintiffs file the usual bond secured by two solvent persons to guarantee prompt payment of each installments as it becomes due;

12. That on July 16, 1935, plaintiff filed a bond, a copy of which marked Exhibit K is enclosed and made a part hereof, to guarantee the payment of the balance of the alleged tax liability by monthly installments at the rate of P118.70 a month, the first payment under protest to be effected on or before July 31, 1935;

13. That on July 16, 1935 the said plaintiffs formally protested against the payment of the sum of P602.51, a copy of which protest is attached and marked Exhibit L, but that defendant in his letter dated August 1, 1935 overruled the protest and denied the request for refund of the plaintiffs;

14. That, in view of the failure of the plaintiffs to pay the monthly installments in accordance with the terms and conditions of bond filed by them, the defendant in his letter dated July 23, 1935, copy of which is attached and marked Exhibit M, ordered the municipal treasurer of Pulilan, Bulacan to execute within five days the warrant of distraint and levy issued against the plaintiffs on May 13, 1935;

15. That in order to avoid annoyance and embarrassment arising from the levy of their property, the plaintiffs on August 28, 1936, through Jose Gatchalian, Guillermo Tapia, Maria Santiago and Emiliano Santiago, paid under protest to the municipal treasurer of Pulilan, Bulacan the sum of P1,260.93 representing the unpaid balance of the income tax and penalties demanded by defendant as evidenced by income tax receipt No. 35811 which is attached and marked Exhibit N and made a part hereof; and that on September 3, 1936, the plaintiffs formally protested to the defendant against the payment of said amount and requested the refund thereof, copy of which is attached and marked Exhibit O and made part hereof; but that on September 4, 1936, the defendant overruled the protest and denied the refund thereof; copy of which is attached and marked Exhibit P and made a part hereof; and

16. That plaintiffs demanded upon defendant the refund of the total sum of one thousand eight hundred and sixty three pesos and forty-four centavos (P1,863.44) paid under protest by them but that defendant refused and still refuses to refund the said amount notwithstanding the plaintiffs' demands.

17. The parties hereto reserve the right to present other and additional evidence if necessary.

Exhibit E referred to in the stipulation is of the following tenor:

To whom it may concern:

I, Jose Gatchalian, a resident of Pulilan, Bulacan, married, of age, hereby certify, that on the 11th day of August, 1934, I sold parts of my shares on ticket No. 178637 to the persons and for the amount indicated below and the part of may share remaining is also shown to wit:

Purchaser Amount1. Mariano Santos ........................................... P0.142. Buenaventura Guzman ............................... .133. Maria Santiago ............................................ .174. Gonzalo Javier .............................................. .145. Francisco Cabral .......................................... .136. Maria C. Legaspi .......................................... .167. Emiliana Santiago ......................................... .138. Julio Gatchalian ............................................ .139. Jose Silva ...................................................... .0710. Tomasa Mercado ....................................... .0811. Jesus Legaspi ............................................. .1512. Guillermo Tapia ........................................... .1313. Saturnina Silva ............................................ .0814. Gregoria Cristobal ....................................... .1815. Jose Gatchalian ............................................ .18

2.00 Total cost of saidticket; and that, therefore, the persons named above are entitled to the parts of whatever prize that might be won by said ticket.

Pulilan, Bulacan, P.I.

(Sgd.) JOSE GATCHALIAN

And a summary of Exhibits D-1 to D-15 is inserted in the bill of exceptions as follows:

RECAPITULATIONS OF 15 INDIVIDUAL INCOME TAX RETURNS FOR 1934 ALL DATED JANUARY 19, 1935 SUBMITTED TO THE COLLECTOR OF

INTERNAL REVENUE.

NameExhibit

No.Purchase

Price1. Jose Gatchalian .......................................... D-12. Gregoria Cristobal ...................................... D-23. Saturnina Silva ............................................. D-34. Guillermo Tapia .......................................... D-45. Jesus Legaspi by Maria Cristobal ......... D-56. Jose Silva .................................................... D-67. Tomasa Mercado ....................................... D-78. Julio Gatchalian by Beatriz Guzman ....... D-89. Emiliana Santiago ...................................... D-910. Maria C. Legaspi ...................................... D-1011. Francisco Cabral ...................................... D-1112. Gonzalo Javier .......................................... D-1213. Maria Santiago .......................................... D-1314. Buenaventura Guzman ........................... D-1415. Mariano Santos ........................................ D-15

The legal questions raised in plaintiffs-appellants' five assigned errors may properly be reduced to the two following: (1) Whether the plaintiffs formed a partnership, or merely a community of property without a personality of its own; in the first case it is admitted that the partnership thus formed is liable for the payment of income tax, whereas if there was merely a community of property, they are exempt from such payment; and (2) whether they should pay the tax collectively or whether the latter should be prorated among them and paid individually.

The Collector of Internal Revenue collected the tax under section 10 of Act No. 2833, as last amended by section 2 of Act No. 3761, reading as follows:

SEC. 10. (a) There shall be levied, assessed, collected, and paid annually upon the total net income received in the preceding calendar year from all sources by every corporation, joint-stock company, partnership, joint account (cuenta en participacion), association or insurance company, organized in the Philippine Islands, no matter how created or organized, but not including duly registered general copartnership (compañias colectivas), a tax of three per centum upon such income; and a like tax shall be levied, assessed, collected, and paid annually upon the total net income received in the

preceding calendar year from all sources within the Philippine Islands by every corporation, joint-stock company, partnership, joint account (cuenta en participacion), association, or insurance company organized, authorized, or existing under the laws of any foreign country, including interest on bonds, notes, or other interest-bearing obligations of residents, corporate or otherwise: Provided, however, That nothing in this section shall be construed as permitting the taxation of the income derived from dividends or net profits on which the normal tax has been paid.

The gain derived or loss sustained from the sale or other disposition by a corporation, joint-stock company, partnership, joint account (cuenta en participacion), association, or insurance company, or property, real, personal, or mixed, shall be ascertained in accordance with subsections (c) and (d) of section two of Act Numbered Two thousand eight hundred and thirty-three, as amended by Act Numbered Twenty-nine hundred and twenty-six.

The foregoing tax rate shall apply to the net income received by every taxable corporation, joint-stock company, partnership, joint account (cuenta en participacion), association, or insurance company in the calendar year nineteen hundred and twenty and in each year thereafter.

There is no doubt that if the plaintiffs merely formed a community of property the latter is exempt from the payment of income tax under the law. But according to the stipulation facts the plaintiffs organized a partnership of a civil nature because each of them put up money to buy a sweepstakes ticket for the sole purpose of dividing equally the prize which they may win, as they did in fact in the amount of P50,000 (article 1665, Civil Code). The partnership was not only formed, but upon the organization thereof and the winning of the prize, Jose Gatchalian personally appeared in the office of the Philippines Charity Sweepstakes, in his capacity as co-partner, as such collection the prize, the office issued the check for P50,000 in favor of Jose Gatchalian and company, and the said partner, in the same capacity, collected the said check. All these circumstances repel the idea that the plaintiffs organized and formed a community of property only.

Having organized and constituted a partnership of a civil nature, the said entity is the one bound to pay the income tax which the defendant collected under the aforesaid section 10 (a) of Act No. 2833, as amended by section 2 of Act No. 3761. There is no merit in plaintiff's contention that the tax should be prorated among them and paid individually, resulting in their exemption from the tax.

In view of the foregoing, the appealed decision is affirmed, with the costs of this instance to the plaintiffs appellants. So ordered.

EN BANC G.R. No. L-27933      December 24, 1968

DIVERSIFIED CREDIT CORPORATION, plaintiff-appellee, vs.FELIPE ROSADO and LUZ JAYME ROSADO, defendants-appellants.

Montalvo and Bernabe for plaintiff-appellee.Pedro D. Delfin for defendants-appellants.

REYES, J.B.L.:

This appeal from a decision of the Court of First Instance of Bacolod City, Negros Occidental (Civ. Case No. 7516 of that Court) was certified to us by the Court of Appeals (Second Division) because the same involves no questions of fact.

The case had its origin in the Municipal Court of Bacolod City, when the Diversified Credit Corporation filed an action to compel the spouses Felipe Rosado and Luz Jayme Rosado to vacate and restore possession of a parcel of land in the City of Bacolod (Lot 62-B of Subdivision plan LRC-Psd-33823) that forms part of Lot No. 62 of the Bacolod Cadastre, and is covered by Transfer Certificate of Title No. 27083 in the name of plaintiff. After answer, claiming that the lot was defendants' conjugal property, the Municipal Court ordered defendants to surrender and vacate the land in litigation; to pay P100.00 a month from the filing of the complaint up to the actual vacating of the premises; to pay P500.00 attorneys' fees and costs. Upon appeal to the Court of First Instance, the case was submitted on the following stipulation of facts (Rec. on App., pp. 59-60):

1. That Lot No. 62-B of Bacolod Cadastre belong to the thirteen co-owners, including the wife of the defendant herein, who owns 1/13th part pro-indiviso;

2. That on May 11, 1964, Luz Jayme Rosado, wife of the defendant Felipe Rosado, signed a Deed of Sale together with the co-owners of the property to the plaintiff as shown by Exh. "A" for the plaintiff;

3. That on the lot in question the defendant Felipe Rosado had built a house sometime in 1957 without the whole property having been previously partitioned among the thirteen (13) co-owners;

4. That the title of the property has already been transferred to the plaintiff upon registration of the Deed of Sale in June, 1964, with the Office of the Register of Deeds;

5. That demand was made by the plaintiff upon the defendant Felipe Rosado and his wife Luz Jayme Rosado on October 19, 1964, but until now the defendant Felipe Rosado has refused to vacate the premises or to remove his house thereon as shown by Exh. "B" for the plaintiff, on the grounds as he alleged in his answer that he had built on the lot in question a conjugal house worth P8,000.00 which necessarily makes the lot on which it stands subject to Article 158 of the Civil Code and on the point of view of equity that the wife of the defendant Felipe Rosado received an aliquot share of P2,400.00 only from the share and if the house were demolished the defendant would suffer damage in the amount of P8,000.00;

6. That the portion of the lot on which the house stands, would earn a monthly rental of P50.00;

7. That Felipe Rosado, husband of Luz Jayme, did not give his conformity to the Deed of Sale, Exh. "A".

8. That on October 31, 1964, the defendant Felipe Rosado requested the plaintiff in the letter, Exh. "C" for the plaintiff, for a period of six (6) months within which to vacate the premises.

9. That the letter was not answered by the plaintiff and they did not accept the offer, and on November 25, 1964, they filed a complaint before the Municipal Court which proves that plaintiff neglected the offer;

The Court of First Instance in its decision rejected the claim of ownership advanced by Rosado, based upon the construction of a house on the disputed lot by the conjugal partnership of the Rosado spouses, which allegedly converted the land into conjugal property under Article 158, paragraph 2 of the present Civil Code of the Philippines; further held that defendants were in estoppel to claim title in view of the letter Exhibit C requesting for six (6) months within which to vacate the premises, and affirmed the decision of the Inferior Court. Defendant Felipe Rosado resorted to the Court of Appeals, and his appeal (CA-G.R. No. 37398-R) is the one now before us. He assigns four alleged errors:

(a) The lower court erred in not holding that Exhibit "A" is null and void, since upon the construction of the conjugal dwelling thereon, the conjugal partnership of the defendant-appellant Felipe Rosado and Luz Jayme became the owner of the share of Luz Jayme in Lot No. 62-B, Bacolod Cadastre;

(b) The trial court erred in ordering the defendant-appellant to vacate Lot No. 62-B and in not holding that Exhibit "A" is null and void because as the legal usufructuary of the share of Luz Jayme Rosado in Lot 62-B, Bacolod Cadastre, the conjugal partnership, managed and administered by the defendant-appellant Felipe Rosado can not be deprived of its usufructuary rights by any contract between Luz Jayme and the plaintiff-appellee;

(c) The trial court erred in not holding that the defendant-appellant should be reimbursed the value of the conjugal house constructed on Lot 62-B; and

(d) The lower court erred in ordering the defendant-appellant to pay attorneys' fees in the amount of five hundred (P500.00) pesos.

It can be seen that the key question is whether by the construction of a house on the lot owned in common by the Jaymes, and sold by them to the appellant corporation, the land in question or a 1/13th part of it became conjugal property.

Appellant, husband of vendor Luz Jayme, claims the affirmative invoking the second paragraph of Article 158 of the Civil Code of the Philippines, prescribing that:

ART. 158. Improvements, whether for utility or adornment, made on the separate property of the spouses through advancements from the partnership or through the industry of either the husband or the wife, belong to the conjugal partnership.

Buildings constructed, at the expense of the partnership, during the marriage on land belonging to one of the spouses, also pertain to the partnership, but the value of the land shall be reimbursed to the spouse who owns the same.

Rosado further contends that as the building of the house at the expense of the conjugal partnership converted the 1/13 undivided share on his wife in Lot 62-B into property of the community, the deed of sale of May 11, 1964 in favor of the appellee corporation was void in so far as said 1/13 share is concerned, because his wife, Luz Jayme, had ceased to own such share from and after the building of the house; and Rosado, as manager of the conjugal partnership, had not participated in the sale, nor subsequently ratified the same.

We find appellant's thesis legally untenable. For it is a basic principle in the law of co-ownership, both under the present Civil Code as in the Code of 1889, that no individual co-owner can claim title to any

definite portion of the land or thing owned in common until the partition thereof. Prior to that time, all that the co-owner has is an ideal, or abstract, quota or proportionate share in the entire thing owned in common by all the co-owners. The principle is emphasized by the rulings of this Court. In Lopez vs. Ilustre, 5 Phil. 567, it was held that while a co-owner has the right to freely sell and dispose of his undivided interest, he has no right to sell a divided part of the real estate owned in common. "If he is the owner of an undivided half of a tract of land, he has the right to sell and convey an undivided half, but he has no right to divide the lot into two parts, and convey the whole of one part by metes and bounds." The doctrine was reiterated in Mercado vs. Liwanag, L-14429, June 20, 1962, holding that a co-owner may not convey a physical portion of the land owned in common. And in Santos vs. Buenconsejo, L-20136, June 23, 1965, it was ruled that a co-owner may not even adjudicate to himself any determinate portion of land owned in common.

Since the share of the wife, Luz Jayme, was at no time physically determined, it cannot be validly claimed that the house constructed by her husband was built on land belonging to her, and Article 158 of the Civil Code can not apply. Certainly, on her 1/13 ideal or abstract undivided share, no house could be erected. Necessarily, the claim of conversion of the wife's share from paraphernal to conjugal in character as a result of the construction must be rejected for lack of factual or legal basis.

It is the logical consequence of the foregoing ruling that the lower court did not err in holding that the appellant was bound to vacate the land without reimbursement, since he knew that the land occupied by the house did not belong exclusively to his wife, but to the other owners as well, and there is no proof on record that the house occupied only 1/13 of the total area. The construction was not done in good faith.

WHEREFORE, the judgment of the Court of First Instance is affirmed. Costs against appellant Felipe Rosado.

EN BANC

G.R. No. L-4656            November 18, 1912

RICARDO PARDELL Y CRUZ and VICENTA ORTIZ Y FELIN DE PARDELL, plaintiffs-appellees, vs.GASPAR DE BARTOLOME Y ESCRIBANO and MATILDE ORTIZ Y FELIN DE BARTOLOME, defendants-appellants.

Gaspar de Bartolome, in his own behalf.B. Gimenez Zoboli, for appellees.

 

TORRES, J.:

This is an appeal by bill of exceptions, from the judgment of October 5, 1907, whereby the Honorable Dionisio Chanco, judge, absolved the defendants from the complaint, and the plaintiff from a counterclaim, without special finding as to costs.

Counsel for the spouses Ricardo y Cruz and Vicente Ortiz y Felin de Pardell, the first of whom, absent in Spain by reason of his employment, conferred upon the second sufficient and ample powers to appear before the courts of justice, on June 8, 1905, in his written complaint, alleged that the plaintiff, Vicente Ortiz, and the defendant, Matilde Ortiz, are the duly recognized natural daughters of the spouses Miguel Ortiz and Calixta Felin y Paula who died in Vigan, Ilocos Sur, in 1875 and 1882, respectively; that Calixta Felin, prior to her death, executed on August 17, 1876, a nuncupative will in Vigan whereby she made her four children, named Manuel, Francisca, Vicenta, and Matilde, surnamed Ortiz y Felin, her sole and universal heirs of all her property; that, of the persons enumerated, Manuel died before his mother and Francisca a few years after her death, leaving no heirs by force of law, and therefore the only existing heirs of the said testatrix are the plaintiff Vicenta Ortiz and the defendant Matilde Ortiz; that, aside from some personal property and jewelry already divided among the heirs, the testatrix possessed, at the time of the execution of her will, and left at her death the real properties which, with their respective cash values, are as follows:

1. A house of strong material, with the lot on which it is built, situated on Escolta Street, Vigan, and valued at2. A house of mixed material, with the lot on which it stands, at No. 88 Washington Street, Vigan; valued at3. A lot on Magallanes Street, Vigan; valued at4. A parcel of rice land, situated in the barrio of San Julian, Vigan; valued at5. A parcel of rice land in the pueblo of Santa Lucia; valued at6. Three parcels of land in the pueblo of Candon; valued at

That, on or about the first months of the year 1888, the defendants, without judicial authorization, nor friendly or extrajudicial agreement, took upon themselves the administration and enjoyment of the said properties and collected the rents, fruits, and products thereof, to the serious detriment of the plaintiffs' interest; that, notwithstanding the different and repeated demands extrajudicially made upon Matilde Ortiz to divide the aforementioned properties with the plaintiff Vicente and to deliver to the latter the one-half thereof, together with one-half of the fruits and rents collected therefrom, the said defendant and her husband, the self-styled administrator of the properties mentioned, had been delaying the partition and delivery of the said properties by means of unkept promises and other excuses; and that the plaintiffs, on account of the extraordinary delay in the delivery of one-half of said properties, or their value in cash, as the case might be, had suffered losses and damages in the sum of P8,000. Said counsel for the plaintiffs therefore asked that judgment be rendered by sentencing the defendants, Gaspar de Bartolome, and Matilde Ortiz Felin de Bartolome, to restore and deliver to the plaintiffs one-half of the total value in cash, according to appraisal, of the

undivided property specified, which one-half amounted approximately to P3,948, or if deemed proper, to recognize the plaintiff Vicenta Ortiz to be vested with the full and absolute right of ownership to the said undivided one-half of the properties in question, as universal testamentary heir thereof together with the defendant Matilde Ortiz, to indemnify the plaintiffs in the sum of P8,000, for losses and damages, and to pay the costs.

Counsel for the defendants, in his answer denied the facts alleged in paragraphs 1, 4, 6, 7, and 8 thereof, inasmuch as, upon the death of the litigating sister's brother Manuel, their mother, who was still living, was his heir by force of law, and the defendants had never refused to give to the plaintiff Vicente Ortiz her share of the said properties; and stated that he admitted the facts alleged in paragraph 2, provided it be understood, however, that the surname of the defendant's mother was Felin, and not Feliu, and that Miguel Ortiz died in Spain, and not in Vigan; that he also admitted paragraph 3 of the complaint, with the difference that the said surname should be Felin, and likewise paragraph 5, except the part thereof relating to the personal property and the jewelry, since the latter had not yet been divided; that the said jewelry was in the possession of the plaintiffs and consisted of: one Lozada gold chronometer watch with a chain in the form of a bridle curb and a watch charm consisting of the engraving of a postage stamp on a stone mounted in gold and bearing the initials M. O., a pair of cuff buttons made of gold coins, four small gold buttons, two finger rings, another with the initials M. O., and a gold bracelet; and that the defendants were willing to deliver to the plaintiffs, in conformity with their petitions, one-half of the total value in cash, according to appraisement, of the undivided real properties specified in paragraph 5, which half amounted to P3,948.

In a special defense said counsel alleged that the defendants had never refused to divide the said property and had in fact several years before solicited the partition of the same; that, from 1886 to 1901, inclusive, there was collected from the property on Calle Escolta the sum of 288 pesos, besides a few other small amounts derived from other sources, which were delivered to the plaintiffs with other larger amounts, in 1891, and from the property on Calle Washington, called La Quinta, 990.95 pesos, which proceeds, added together, made a total of 1,278.95 pesos, saving error or omission; that, between the years abovementioned, Escolta, and that on Calle Washington, La Quinta, 376.33, which made a total of 1,141.71, saving error or omission; that, in 1897, the work of reconstruction was begun of the house on Calle Escolta, which been destroyed by an earthquake, which work was not finished until 1903 and required an expenditure on the part of the defendant Matilde Ortiz, of 5,091.52 pesos; that all the collections made up to August 1, 1905, including the rent from the stores, amounted to only P3,654.15, and the expenses, to P6,252.32, there being, consequently, a balance of P2,598.17, which divided between the sisters, the plaintiff and the defendant, would make the latter's share P1,299.08; that, as shown by the papers kept by the plaintiffs, in the year 1891 the defendant Bartolome presented to the plaintiffs a statement in settlements of accounts, and delivered to the person duly authorized by the latter for the purpose, the sum of P2,606.29, which the said settlement showed was owing his principals, from various sources; that, the defendant Bartolome having been the administrator of the undivided property claimed by the plaintiffs, the latter were owing the former legal remuneration of the percentage allowed by law for administration; and that the defendants were willing to pay the sum of P3,948, one-half of the total value of the said properties, deducting therefrom the amount found to be owing them by the plaintiffs, and asked that judgment be rendered in their favor to enable them to recover from the latter that amount, together with the costs and expenses of the suit.

The defendants, in their counter claim, repeated each and all of the allegations contained in each of the paragraphs of section 10 of their answer; that the plaintiffs were obliged to pay to the administrator of the said property the remuneration allowed him by law; that, as the revenues collected by the defendants amounted to no more than P3,654.15 and the expenditures incurred by them, to P6,252.32, it followed that the plaintiffs owed the defendants P1,299.08, that is one-half of the difference between the amount collected from and that extended on the properties, and asked that judgment be therefore rendered in their behalf to enable them to collect this sum from the plaintiffs, Ricardo Pardell and Vicenta Ortiz, with legal interest thereon from December 7, 1904, the date when the accounts were rendered, together with the sums to which the defendant Bartolome was entitled for the administration of the undivided properties in question.

By a written motion of August 21, 1905, counsel for the plaintiffs requested permission to amend the complaint by inserting immediately after the words "or respective appraisal," fifth line of paragraph 5, the phrase "in cash in accordance with the assessed value," and likewise further to amend the same, in paragraph 6 thereof, by substituting the following word in lieu of the petition for the remedy sought: "By reason of all the foregoing, I beg the court to be pleased to render the judgment by sentencing the defendants, Gaspar de Bartolome and Matilde Ortiz Felin de Bartolome, to restore and deliver to the plaintiffs an exact one-half of the total vale of the undivided properties described in the complaint, such value to be ascertained by the expert appraisal of two competent persons, one of whom shall be appointed by the plaintiffs and the other by the defendants, and, in case of disagreement between these two appointees such value shall be determined by a third expert appraiser appointed by the court, or, in a proper case, by the price offered at public auction; or, in lieu thereof, it is requested that the court recognize the plaintiff, Vicenta Ortiz, to be vested with a full and absolute right to an undivided one-half of the said properties; furthermore, it is prayed that the plaintiffs be awarded an indemnity of P8,000 for losses and damages, and the costs." Notwithstanding the opposition of the defendants, the said amendment was admitted by the court and counsel for the defendants were allowed to a period of three days within which to present a new answer. An exception was taken to this ruling.

The proper proceedings were had with reference to the valuation of the properties concerned in the division sought and incidental issues were raised relative to the partition of some of them and their award to one or the other of the parties. Due consideration was taken of the averments and statements of both parties who agreed between themselves, before the court, that any of them might at any time acquire, at the valuation fixed by the expert judicial appraiser, any of the properties in question, there being none in existence excluded by the litigants. The court, therefore, by order of December 28, 1905, ruled that the plaintiffs were entitled to acquire, at the valuation determined by the said expert appraiser, the building known as La Quinta, the lot on which it stands and the warehouses and other improvements comprised within the inclosed land, and the seeds lands situated in the pueblos of Vigan and Santa Lucia; and that the defendants were likewise entitled to acquire the house on Calle Escolta, the lot on Calle Magallanes, and the three parcels of land situated in the pueblo of Candon.

After this partition had been made counsel for the defendants, by a writing of March 8, 1906, set forth: That, having petitioned for the appraisement of the properties in question for the purpose of their partition, it was not to be understood that he desired from the exception duly entered to the ruling made in the matter of the amendment to the complaint; that the properties retained by the defendants were valued at P9,310, and those retained by the plaintiffs, at P2,885, one-half of which amounts each party had to deliver to the other, as they were pro indiviso properties; that, therefore, the defendants had to pay the plaintiffs the sum of P3,212.50, after deducting the amount which the plaintiffs were obliged to deliver to the defendants, as one-half of the price of the properties retained by the former; that, notwithstanding that the amount of the counterclaim for the expenses incurred in the reconstruction of the pro indiviso property should be deducted from the sum which the defendants had to pay the plaintiffs, the former, for the purpose of bringing the matter of the partition to a close, would deliver to the latter, immediately upon the signing of the instrument of purchase and sale, the sum of P3,212.50, which was one-half of the value of the properties alloted to the defendants; such delivery, however, was not to be understood as a renouncement of the said counterclaim, but only as a means for the final termination of the pro indiviso status of the property.

The case having been heard, the court on October 5, 1907, rendered judgment holding that the revenues and the expenses were compensated by the residence enjoyed by the defendant party, that no losses or damages were either caused or suffered, nor likewise any other expense besides those aforementioned, and absolved the defendants from the complaint and the plaintiffs from the counterclaim, with no special finding as to costs. An exception was taken to this judgment by counsel for the defendants who moved for a new trial on the grounds that the evidence presented did not warrant the judgment rendered and that the latter was contrary to law. This motion was denied, exception whereto was taken by said counsel, who filed the proper bill of exceptions, and the same was approved and forwarded to the clerk of this court, with a transcript of the evidence.

Both of the litigating sisters assented to a partition by halves of the property left in her will by their mother at her death; in fact, during the course of this suit, proceedings were had, in accordance with the agreement made, for the division between them of the said hereditary property of common ownership, which division was recognized and approved in the findings of the trial court, as shown by the judgment appealed from.

The issues raised by the parties, aside from said division made during the trial, and which have been submitted to this court for decision, concern: (1) The indemnity claimed for losses and damages, which the plaintiffs allege amount to P8,000, in addition to the rents which should have been derived from the house on Calle Escolta, Vigan; (2) the payment by the plaintiffs to the defendants of the sum of P1,299.08, demanded by way of counterclaim, together with legal interest thereon from December 7, 1904; (3) the payment to the husband of the defendant Matilde Ortiz, of a percentage claimed to be due him as the administrator of the property of common ownership; (4) the division of certain jewelry in the possession of the plaintiff Vicenta Ortiz; and (5) the petition that the amendment be held to have been improperly admitted, which was made by the plaintiffs in their written motion of August 21, 1905, against the opposition of the defendants, through which admission the latter were obliged to pay the former P910.50.lawphil.net

Before entering upon an explanation of the propriety or impropriety of the claims made by both parties, it is indispensable to state that the trial judge, in absolving the defendants from the complaint, held that they had not caused losses and damages to the plaintiffs, and that the revenues and the expenses were compensated, in view of the fact that the defendants had been living for several years in the Calle Escolta house, which was pro indiviso property of joint ownership.

By this finding absolving the defendants from the complaint, and which was acquiesced in by the plaintiffs who made no appeal therefrom, the first issue has been decided which was raised by the plaintiffs, concerning the indemnity for losses and damages, wherein are comprised the rents which should have been obtained from the upper story of the said house during the time it was occupied by the defendants, Matilde Ortiz and her husband, Gaspar de Bartolome.

Notwithstanding the acquiescence on the part of the plaintiffs, assenting to the said finding whereby the defendants were absolved from the complaint, yet, as such absolution is based on the compensation established in the judgment of the trial court, between the amounts which each party is entitled to claim from the other, it is imperative to determine whether the defendant Matilde Ortiz, as coowner of the house on Calle Escolta, was entitled, with her husband, to reside therein, without paying to her coowner, Vicenta Ortiz, who, during the greater part of the time, lived with her husband abroad, one-half of the rents which the upper story would have produced, had it been rented to a stranger.

Article 394 of the Civil Code prescribes:

Each coowner may use the things owned in common, provided he uses them in accordance with their object and in such manner as not to injure the interests of the community nor prevent the coowners from utilizing them according to their rights.

Matilde Ortiz and her husband occupied the upper story, designed for use as a dwelling, in the house of joint ownership; but the record shows no proof that, by so doing, the said Matilde occasioned any detriment to the interest of the community property, nor that she prevented her sister Vicenta from utilizing the said upper story according to her rights. It is to be noted that the stores of the lower floor were rented and accounting of the rents was duly made to the plaintiffs.

Each coowner of realty held pro indiviso exercises his rights over the whole property and may use and enjoy the same with no other limitation than that he shall not injure the interests of his

coowners, for the reason that, until a division be made, the respective part of each holder can not be determined and every one of the coowners exercises, together with his other coparticipants, joint ownership over the pro indiviso property, in addition to his use and enjoyment of the same.

As the hereditary properties of the joint ownership of the two sisters, Vicenta Ortiz, plaintiff, and Matilde Ortiz, defendant, were situated in the Province of Ilocos Sur, and were in the care of the last named, assisted by her husband, while the plaintiff Vicenta with her husband was residing outside of the said province the greater part of the time between 1885 and 1905, when she left these Islands for Spain, it is not at all strange that delays and difficulties should have attended the efforts made to collect the rents and proceeds from the property held in common and to obtain a partition of the latter, especially during several years when, owing to the insurrection, the country was in a turmoil; and for this reason, aside from that founded on the right of coownership of the defendants, who took upon themselves the administration and care of the properties of joint tenancy for purposes of their preservation and improvement, these latter are not obliged to pay to the plaintiff Vicenta one-half of the rents which might have been derived from the upper of the story of the said house on Calle Escolta, and, much less, because one of the living rooms and the storeroom thereof were used for the storage of some belongings and effects of common ownership between the litigants. The defendant Matilde, therefore, in occupying with her husband the upper floor of the said house, did not injure the interests of her coowner, her sister Vicenta, nor did she prevent the latter from living therein, but merely exercised a legitimate right pertaining to her as coowner of the property.

Notwithstanding the above statements relative to the joint-ownership rights which entitled the defendants to live in the upper story of the said house, yet in view of the fact that the record shows it to have been proved that the defendant Matilde's husband, Gaspar de Bartolome, occupied for four years a room or a part of the lower floor of the same house on Calle Escolta, using it as an office for the justice of the peace, a position which he held in the capital of that province, strict justice, requires that he pay his sister-in-law, the plaintiff, one half of the monthly rent which the said quarters could have produced, had they been leased to another person. The amount of such monthly rental is fixed at P16 in accordance with the evidence shown in the record. This conclusion as to Bartolome's liability results from the fact that, even as the husband of the defendant coowner of the property, he had no right to occupy and use gratuitously the said part of the lower floor of the house in question, where he lived with his wife, to the detriment of the plaintiff Vicenta who did not receive one-half of the rent which those quarters could and should have produced, had they been occupied by a stranger, in the same manner that rent was obtained from the rooms on the lower floor that were used as stores. Therefore, the defendant Bartolome must pay to the plaintiff Vicenta P384, that is, one-half of P768, the total amount of the rents which should have been obtained during four years from the quarters occupied as an office by the justice of the peace of Vigan.

With respect to the second question submitted for decision to this court, relative to the payment of the sum demanded as a counterclaim, it was admitted and proved in the present case that, as a result of a serious earthquake on August 15, 1897, the said house on Calle Escolta was left in ruins and uninhabitable, and that, for its reconstruction or repair, the defendants had to expend the sum of P6,252.32. This expenditure, notwithstanding that it was impugned, during the trial, by the plaintiffs, was duly proved by the evidence presented by the defendants. Evidence, unsuccessfully rebutted, was also introduced which proved that the rents produced by all the rural and urban properties of common ownership amounted, up to August 1, 1905, to the sum of P3,654.15 which, being applied toward the cost of the repair work on the said house, leaves a balance of P2,598.17, the amount actually advanced by the defendants, for the rents collected by them were not sufficient for the termination of all the work undertaken on the said building, necessary for its complete repair and to replace it in a habitable condition. It is therefore lawful and just that the plaintiff Vicenta Ortiz, who was willing to sell to her sister Matilde for P1,500, her share in the house in question, when it was in a ruinous state, should pay the defendants one-half of the amount expanded in the said repair work, since the building after reconstruction was worth P9,000, according to expert appraisal. Consequently, the counterclaim made by the defendants for the payment to them of the sum of P1,299.08, is a proper demand, though from this sum a reduction must be made of P384, the amount of one-half of the rents which should have been collected for the use of the quarters occupied by the

justice of the peace, the payment of which is incumbent upon the husband of the defendant Matilde, as aforesaid, and the balance remaining, P915.08, is the amount which the plaintiff Vicenta must pay to the defendants.

The defendants claim to be entitled to the collection of legal interest on the amount of the counterclaim, from December 7, 1904. This contention can not be sustained, inasmuch as, until this suit is finally decided, it could not be known whether the plaintiffs would or would not be obliged to pay the sum whatever in reimbursement of expenses incurred by the plaintiffs in the repair work on the said house on Calle Escolta, whether or not the defendants, in turn, were entitled to collect any such amount, and, finally, what the net sum would be which the plaintiff's might have to pay as reimbursement for one-half of the expenditure made by the defendants. Until final disposal of the case, no such net sum can be determined, nor until then can the debtor be deemed to be in arrears. In order that there be an obligation to pay legal interest in connection with a matter at issue between the parties, it must be declared in a judicial decision from what date the interest will be due on the principal concerned in the suit. This rule has been established by the decisions of the supreme court of Spain, in reference to articles 1108, 1109, and 1110 of the Civil Code, reference on April 24, 1867, November 19, 1869, and February 22, 1901.

With regard to the percentage, as remuneration claimed by the husband of the defendant Matilde for his administration of the property of common ownership, inasmuch as no stipulation whatever was made in the matter by and between him and his sister-in-law, the said defendant, the claimant is not entitled to the payment of any remuneration whatsoever. Of his own accord and as an officious manager, he administered the said pro indiviso property, one-half of which belonged to his wife who held it in joint tenancy, with his sister-in-law, and the law does not allow him any compensation as such voluntary administrator. He is merely entitled to a reimbursement for such actual and necessary expenditures as he may have made on the undivided properties and an indemnity for the damages he may have suffered while acting in that capacity, since at all events it was his duty to care for and preserve the said property, half of which belonged to his wife; and in exchange for the trouble occasioned him by the administration of his sister-in-law's half of the said property, he with his wife resided in the upper story of the house aforementioned, without payment of one-half of the rents said quarters might have produced had they been leased to another person.

With respect to the division of certain jewelry, petitioned for by the defendants and appellants only in their brief in this appeal, the record of the proceedings in the lower court does not show that the allegation made by the plaintiff Vicenta is not true, to the effect that the deceased mother of the litigant sisters disposed of this jewelry during her lifetime, because, had she not done so, the will made by the said deceased would have been exhibited in which the said jewelry would have been mentioned, at least it would have been proved that the articles in question came into the possession of the plaintiff Vicenta without the expressed desire and the consent of the deceased mother of the said sisters, for the gift of this jewelry was previously assailed in the courts, without success; therefore, and in view of its inconsiderable value, there is no reason for holding that the said gift was not made.

As regards the collection of the sum of P910.50, which is the difference between the assessed value of the undivided real properties and the price of the same as determined by the judicial expert appraiser, it is shown by the record that the ruling of the trial judge admitting the amendment to the original complaint, is in accord with the law and principles of justice, for the reason that any of the coowners of a pro indiviso property, subject to division or sale, is entitled to petition for its valuation by competent expert appraisers. Such valuation is not prejudicial to any of the joint owners, but is beneficial to their interests, considering that, as a general rule, the assessed value of a building or a parcel of realty is less than the actual real value of the property, and this being appraiser to determine, in conjunction with the one selected by the plaintiffs, the value of the properties of joint ownership. These two experts took part in the latter proceedings of the suit until finally, and during the course of the latter, the litigating parties agreed to an amicable division of the pro indiviso hereditary property, in accordance with the price fixed by the judicial expert appraiser appointed as a

third party, in view of the disagreement between and nonconformity of the appraisers chosen by the litigants. Therefore it is improper now to claim a right to the collection of the said sum, the difference between the assessed value and that fixed by the judicial expert appraiser, for the reason that the increase in price, as determined by this latter appraisal, redounded to the benefit of both parties.

In consideration of the foregoing, whereby the errors assigned to the lower court have been duly refuted, it is our opinion that, with a partial reversal of the judgment appealed from, in so far as it absolves the plaintiffs from the counterclaim presented by the defendants, we should and hereby do sentence the plaintiffs to the payment of the sum of P915.08, the balance of the sum claimed by the defendants as a balance of the one-half of the amount which the defendants advanced for the reconstruction or repair of the Calle Escolta house, after deducting from the total of such sum claimed by the latter the amount of P384 which Gaspar de Bartolome, the husband of the defendant Matilde, should have paid as one-half of the rents due for his occupation of the quarters on the lower floor of the said house as an office for the justice of the peace court of Vigan; and we further find: (1) That the defendants are not obliged to pay one-half of the rents which could have been obtained from the upper story of the said house; (2) that the plaintiffs can not be compelled to pay the legal interest from December 7, 1904, on the sum expanded in the reconstruction of the aforementioned house, but only the interest fixed by law, at the rate of 6 per cent per annum, from the date of the judgment to be rendered in accordance with this decision; (3) that the husband of the defendant Matilde Ortiz is not entitled to any remuneration for the administration of the pro indiviso property belonging to both parties; (4) that, neither is he entitled to collect from the plaintiffs the sum of P910.50, the difference between the assessed valuation and the price set by the expert appraisal solicited by the plaintiffs in their amendment to the complaint; and, (5) that no participation shall be made of jewelry aforementioned now in the possession of the plaintiff Vicenta Ortiz. The said judgment, as relates to the points appealed, is affirmed, in so far as its findings agree with those of this decision, and is reversed, in so far as they do not. No special finding is made regarding the costs of both instances. So ordered.

EN BANC

G.R. No. L-47996             May 9, 1941

ENGRACIA LAVADIA Y OTROS, demandantes y apelados, vs.ROSARIO COSME DE MENDOZA Y OTROS, demandados y apelantes.

Sres. L. Fernandez Lavadia y Aurelio Palileo en representacion de los apelados.Sres. Ortega y Ortega en representacion de los apelantes.

DIAZ, J.:

Objeto de litigo entre los demandantes y los demandados en el Juzgado de Primera Instancia de Laguna, fueron la posesion y custodia de ciertas alhajas que unas seis señoras piadosas del municipio de Pagsanjan, Laguna, llamadas Martina, Matea, Isabel, Paula, Pia y Engracia apellidadas todas Lavadia, habian mandado confeccionaren 1880, con dinero propio, para adornor y engalanar con ellas la Imagende Nuestra Señora de Guadalupe, patrona del mencionado municipio, reteniendo ellas para si, la propiedad de las mismas no cediendo sino solamente su uso a la referida Imagen, para el indicado fin. Los demandantes y los demandados, con excepcion de Engracia Lavadia que era una de las seis, son descendientes de las otras cinco primitivas dueñas de las alhajas de que se trata. Porque la demandada Rosario Cosme de Mendoza que es una de las descendientes de Paula Lavadia, que tuvo ultimamente la custodia de aquellas, quiso entragar la corona que constituia parte de las mismas, al Obispo Catolico de Lipa, para que la tuviese en su poder pero sujeta al uso de la Imagen de Nuestra Señora de Guadalupe, segun la voluntad de sus dueñas, los descendientes de las tres, (Isabel Lavadia, Matea Lavadia y Martina Lavadia), Engracia Lavadia que son los demandantes, promovieron esta causa en el Juzgado de su procedencia, para reclamar la posesion y custodia de todas las referidas alhajas. Estas no son otras que las descritas en el parrafo 3 de la demanda.

El Juzgado decidio la causa en contra de los demandados, declarando que siendo los demandantes dueños de cuatro sextas partes proindiviso de las alhajas objeto de cuestion, y los demandados, de dos sextas partes solamente, aquellos tenian perfecto derecho a determiar quien debia encargarse de su custodia; y que, habiendo ellos decidido encomendar esta esta a Engracia Lavadia, una de las primitiva dueñas, ordeno que la demandada Rosario Cosme de Mendoza haga entrega de todas ellas a dicha demandante. Contra esta decision del Juzgado, interpusieron apelacion los demandados, creyendo que el Juzgado erro (1) al declarar que la apelante Rosario Cosme de Mendoza, y sus anticesores en la posesion de las referidas alhajas, no actuaron sino solamente como depositarios, y no fiduciarios; (2) al declarar que los apelados son dueños de cuatro sextas partes de aquellas, y que les compete por dicha razon ejercer el derecho de designar a la persona a quien encomendar sucustodia; (3) al dejar de declarar que la apelante Rosario Cosme de Mendoza, siendo condueña y fiduciaria de dichas alhajas no puede ser privada de su administracion y custodia, excepto por razones que le incapacitan para ello, cuales son la de ejecutar actos contrarios a la voluntad de sus primitivas dueñas, y la de disponer de las mencionadas alhajas a su antojo; (4) al dejar de declarar que Pia Lavadia y sus descendientes, hasta llegar a Rosario Cosme de Mendoza, que habian tenido la custodia y posesion de las referidas alhajas, han desempeñado con fidelidad su cometido; y finalmente (5) al denegarles su peticion para una nueva vista.

Para tener una idea cabal de los hechos, expongamoslos a continuacion, siguiendo el relato que de los mismos hace el Juzgado a quo en su decision apelada, ya que no los discuten ni los apelantes ni los apelados:

El objeto de las causa son las joyas de la imagen de la Virgen de Ntra. Sra. De Guadalupe, en el municipio de Pagsanjan, Laguna, y consisten en una corona de oro incrustado con diamantes y brillantes, una gargantilla de diamentes y brillantes, un cinturon incrustado tambien con brillantes y

diamantes, un collar de oro tambien completamente incrustado con brillantes, una pulsera de oro incrustado con brillantes y diamentes, una plancha de plata dorada en donde se colocan las joyas arriba mencionadas, y otras vairas piezas de oro o de plata dorada para la decoracion de las indumentarias de dicha imagen de Ntra. Sra. de Guadalupe. Todas estas joyas estan actualmente depositadas bajo llave en el Banco de las Islas Filipinas pues alli las habia depositado la demandada Rosario Cosme de Mendoza.

La corona y las joyas arriba descritas fueron confeccionadas hacia el año 1880 a costa de seis damas residentes del municipio de Pagsanjan, Laguna. Ellas eran las hermanas Paula Lavadia y Pia Lavadia, las hermanas Martina Lavadia y Matea Lavadia, y las hermanas Isabel Lavadia y Engracia Lavadia. Estas señoras contribuyeron alhajas que ellas tenian para la confecion de la corona y con ellasse confeccionaron las joyas arriba descritas, contribuyendo tambien el dinero con que se costeo la confecion de las mismas. Todas estas señoras y han fallecido, con excepcion de la demandante Doña Engracia Lavadia Vda. De Fernandez. Los otros demandantes son los herederos legales de Isabel Lavadia, Matea Lavadia y Martina Lavadia, mientras que la demandada Rosario Cosme de Mendoza y sus codemandados son herederos legitimos y descendientes de Paula Lavadia.

La corona y las joyas se mandaron confeccionar para el uso de la patrona titular del municipio de Pagasanjan, Ntra.Sra. de Guadalupe. Cuando ya se habian terminado de confeccionar, sus duenas convinieron en que dichas joyas se quedarian con la contribuyente Pia Lavadia. Esta tuvo bajo su custodia dichas joyas hasta su muerte en 1882, cuando su hermana Paula Lavadia le sucedio en la custodia de las mismas. A la muerte de paula Lavadia, de sucedio en el cuidado, conservacion y custodia de dichas joyas sumarido Pedro Rosales, y muerto este, su hija Paz Rosales, a su vez le sucedio en dicha custodia, conservacion y cuidado. A la muerte de Paz Rosales, la corona y las joyas pasaron a la custodia de su marido Baldomero Cosme. Despues de Baldomero Cosme, dichas joyas pasaron a Manuel Soriano quien, a su vez, fue sucedido en la custodia, conservacion y administracion por la aqui demandada Rosario Cosme de Mendoza. Todos los años desde 1880 hasta la fecha, las joyas en cuestion se usaban para decorar la imagen de Ntra. Sra. de Guadalupe en Pagsanjan, y ninguno de los que han estado guardando o custodiando dichas joyas habia pretendido poseerlas como dueño exclusivo. La demandada Rosario Cosme de Mendoza y sus codemandados no pretenden ser dueños de las referidas alhajas. En efecto, en el intestado del finado Baldomero Cosme, actuacion especial No. 5494 de este Juzgado de Primera Instancia, dicha demandada y sus codemandados han manifestado al Juzgado de que nunca han tenido pretensiones de reclamar el dominio de dichas joyas ni parte alguna de las mismas. (Veanse Exhibitos B-2 by B-3.)

El 9 de febrero de 1938, la demandada Rosario Cosme de Mendoza, en su capacidad de administradora del intestado del finado Baldomero Cosme, notifico a todas las personas interesadas en dichas joyas que queria hacer entrega formal de dichas joyas al Sr. Obispo de Lina el dia sabado siguiente, o sea, el 12 de febrero de 1938, informandolas que presenciaran el acto de la entrega (Vease Exhibito 4). En efecto, el 12 de febrero de 1938, la demandada y su esposo hicieron entrega formal de las joyas, otorgando el documento correspondiente a dicho efecto, documento quese presento como Exhibit E de los demandantes y 2 de los demandados. No estando los demandantes conformes con dicha entrega, unas seis personas y las demandantes en esta causa otorgaron un documento, designando a la demandante Engracia Lavadia como recamadora, quien tendria a su cuidado la corona y las alhajas en cuestion (Vease Exhibito 3). Habiendo surgido la cuestion de quien debe tener bajo su custodia la corona y las joyas en cuestion, y habiendo llegado este hecho a conocimiento del Obispo de Lipa, este, a su vez, en 21 de junio de 1938, otorgo una escritura renunciandola custodia y administracion de dichas corona y alhajas (Veanse Exhibito D de los demandantes y 1 de los demandados).

Fundandose en los hechos relatados, el Juzgado declaro que el contrato habido entre las primitivas dueñas de las alhajas en litigio y las primeras de ellas que tuvieron la custodia de las mismas, fue el de deposito, segun queda de finido esta contrato en los articulos 1758 y siguientes del Codigo Civil. Pia Lavadia primeramente, y despues Paula Lavadia y los descendientes de esta ultima siendo una de ellos la apelante Rosario Cosme Mendoza, recibieron y poseyeron, unos despues de otros, las

referidas, solamente para fines de custodia; pues, como lo hace resaltar el Juzgado en su decision, ni aquellas ni los ultimos usaron las mismas para su propio beneficio. Si fue en virtud de un contrato de deposito como fueron recibidas las alhajas objeto de cuestion, primeramente por Pia y Paula, y despues por los descendientes de la ultima incluyendo la apelante Rosario Cosme de Mendoza, es claro que hay la obligacion de parte de esta de restituir las mismas a sus dueños en cuanto las reclamen. Lo dispone asi el articulo 1766 del Codigo Civil que dice:

El depositario esta obligado a guardar la cosa y restuirla, cuando le sea pedida, al depositante, o a sus causa habientes, o a la persona que hubiese sido designada en el contrato. Su responsabilidad en cuanto a la guarda y la perdida de la cosa, se regira por lo dispuesto en el tit. I de este libro.

La restitucion debe hacerse con todos los frutos y las accesiones de la cosa depositada, si los tiene, sin que le sea dado al depositario retenerla, como comenta Sanchez Roman, (IV Sanchez Roman, 885), aun bajo el prexto de obtener compensacion de otros creditos o de indemnizarse de gastos hechos para su conservacion.

Las dueñas primitavas de las alhajas de que se trata, convinieron en encomendar la custodia de las mismas a algunasde ellas, reservandose experesamente para si su propiedad. Esto viene a demostrar que la teoria de los apelantes de que el contrato que aquellas tuvieron no es de deposito por que despues de todo, como dicen, no pueden considerarse las alhajas como de pertenencia ajena con respecto a Rosario Cosme de Mendoza, porque ella desciende de una de susprimitivas dueñas, no tiene fuerza, porque aun entre comuneros de una cosa, uno de ellos puede ser depositario, y cuando lo es, esta sujeto a las mismas obligaciones impuestas por la ley a todo depositario, respecto a la conservacion de la cosa con el cuidado, diligencia e interes de un buen padre de familia.

Joint owner. The fact that the depositary is a joint owner of the res does not alter the degree of diligence required of him. (18 C.J., 570).

Los apelados son descendientes y herederos legales de Isabel Lavadia, Matea Lavadia y Martina Lavadia; y Engracia Lavadia, a quien designaron par hacerse cargo de la custodia de las alhajas objeto de cuestion, es una de las primitivas dueñas de las mismas; y los apelantes son a su vez los descendientes y herederos de Pia Lavadia y PaulaLavadia. No constando en ninguna parte due las seis primitivasdueñas no contibuyeron en la confeccion o adquisicion de las alhajas tantas veces mencionadas, en la misma proporcion, la conclusion mas razonable es — y esto sostenido por una presuncion de ley, (Art, 393, Codigo Civil) —, que todas ellas prorratearon el costa de las mismas pagando cada una, una cuota iqual. Si esto es cierto, entonces debemos aceptar la conclusion del Juzgado de que los apelados son dueños de cuatro sextas partes de dicha alhajas, y quelos apelantes no lo son sino solamente de las dos sextas partesrestantes. Por consiquiente, habiendo decidido la mayoria que la constituyen los apelados, encomendar la custodia y administracion de dichas alhajas para poder dar fiel cumplimiento a la voluntad de sus primitivas dueñas, a la apelada Engracia Lavadia, la unica superviviente de las mismas, su decision debe respetarse, porque para la administracion y mejor disfrute de la cosa comun, segun el articulo 398 del Codigo Civil, son obligatorios los acuerdos de la mayoria de los participes.

El argumento de que Rosario Cosme de Mendoza y sus antecesores han estado desempeñando con fidelidad su cometidocomo depositarios, no arguye en favor de la proposicion de que no se le debe retirar el deposito, porque el contrato de deposito es tal que permite al depositante retirar del depositario la cosa depositada, en cualquier momento que quisiese, sobre todo, cuando el ultimo, como en el caso de Rosario Cosme de Mendoza, ha ejecutado un acto contrario al encargo recibido, encomendando o tratando de encomendar a otro, la custodia y administracion de la cosa depositada, por su propia cuenta y sin el consentimiento de los depositantes o sus herederos.

No habiendo hallado error alguno en la decision apelada del Juzgado a quo, por la presente, la confirmamos, condenando a los apelantes a pagar las costas. Asi se ordena.

EN BANC G.R. No. L-32047             November 1, 1930

MANUEL MELENCIO, MARIANO MELENCIO, PURA MELENCIO, and CARIDAD MELENCIO, plaintiffs-appellants, vs.DY TIAO LAY, defendant-appellee.

Jose V. Valladolid, Jose P. Melencio and Camus and Delgado for appellants.Araneta and Zaragoza for appellee.

 

OSTRAND, J.:

          On August 1,1927, the plaintiffs, Manuel, Mariano, Pura and Caridad Melencio, brought the present action against the defendant-appellee, Dy Tiao Lay for the recovery of the possession of a parcel of land situated in the town of Cabanatuan, Nueva Ecija, and containing an area of 4,628.25 square meters. The plaintiffs further demand a monthly rental of P300 for the use and occupation of the parcel from May, 1926, until the date of the surrender to them of the possession thereof; and that if it is found that the said appellee was occupying the said parcel of land by virtue of a contract of lease, such contract should be declared null and void for lack of consent, concurrence, and ratification by the owners thereof.

          In his answer, the defendant pleaded the general issue, and as special defenses, he alleged in substance that he was occupying the said tract of land by virtue of a contract of lease executed on July 24,1905, in favor of his predecessor in interest, by Ruperta Garcia, Pedro Melencio, Juliana Melencio, and Ruperta Melencio under the terms specified therein, and which contract is still in force; that Liberata Macapagal, the mother of the plaintiffs, in her capacity as judicial administratrix of the estate of Ramon Melencio, one of the original coowners of the parcel of land in question, actually recognized and ratified the existence and validity of the contract aforesaid by virtue of the execution of a public document by her on or about November 27,1920, and by collecting from the assignees of the original lessee the monthly rent for the premises until April 30, 1926; and that said defendant deposits with the clerk of court the sum of P20.20 every month as rent thereof and that as a counterclaim, he seeks the recovery of P272 for goods and money delivered by him to the plaintiffs.

          The plaintiffs filed a reply to the answer alleging, among other things, that Ruperta Garcia was not one of the coowners of the land in question; that the person who signed the alleged contract of lease never represented themselves as being the sole and exclusive owners of the land subject to the lease as alleged by the defendant in his answer; that the said contract of lease of July 24,1905, is null and void for being executed without the intervention and consent of two coowners, Ramon Melencio and Jose P. Melencio, and without the marital consent of the husbands of Juliana and Ruperta Melencio; that the lessee has repeatedly violated the terms and conditions of the said contract; and that Liberata Macapagal, in her capacity as administratrix of the property of her deceased husband, could not lawfully and legally execute a contract of lease with the conditions and terms similar to that of the one under consideration, and that from this it follows that she could not ratify the said lease as claimed by the defendant.

          On January 21,1928, Liberata Macapagal Viuda de Melencio, duly appointed and qualified as administratrix of the estate of her deceased husband, Ramon Melencio, filed a petition praying to be allowed to join the plaintiffs as party to the present case, which petition was granted in open court on January 31,1928. Her amended complaint of intervention of February 14,1928, contains allegations similar to those alleged in the complaint of the original plaintiffs, and she further alleges that the defendant-appellee has occupied the land in question ever since November, 1920, under and by

virtue of a verbal contract of lease for a term from month to month. To this complaint of intervention, the defendant-appellee filed an answer reproducing the allegations contained in his answer reproducing the allegations contained in his answer to the complaint of the original plaintiffs and setting up prescription as a further special defense.

          It appears from the evidence that the land in question was originally owned by one Julian Melencio. He died prior to the year 1905 leaving his widow, Ruperta Garcia, and his five children, Juliana, Ramon, Ruperta, Pedro R., and Emilio Melencio. Emilio Melencio also died before 1905, his son Jose P. Melencio, then a minor, succeeding to his interest in the said parcel of land by representation. A question has been raised as to whether the land was community property of the marriage of Julian Melencio and Ruperta Garcia, but the evidence is practically undisputed that Ruperta Garcia in reality held nothing but a widow's usufruct in the land.

          On July 24,1905, Ruperta Garcia, Pedro R. Melencio, Juliana Melencio, and Ruperta Melencio executed a contract of lease of the land in favor of one Yap Kui Chin, but neither Jose P. Melencio nor Ramon Melencio were mentioned in the lease. The term of the lease was for twenty years, extendible for a like period at the option of the lessee. The purpose of the lessee was to establish a rice mill on the land, with the necessary buildings for warehouses and for quarters for the employees, and it was further stipulated that at the termination of the original period of the lease, or the extension therof, the lessors might purchase all the buildings and improvements on the land at a price to be fixed by experts appointed by the parties, but that if the lessors should fail to take advantage of that privilege, the lease would continue for another and further period of twenty years. The document was duly acknowledged but was never recorded with the register of deeds. The original rent agreed upon was P25 per month, but by reason of the construction of a street through the land, the monthly rent was reduced of P20.20.

          Shortly after the execution of the lease, the lessee took possession of the parcel in question and erected the mill as well as the necessary buildings, and it appears that in matters pertaining to the lease, he dealt with Pedro R. Melencio, who from 1905 until his death in 1920, acted as manager of the property held in common by the heirs of Julian Melencio and Ruperta Garcia. The original lessee, Yap Kui Chin, died in 1912, and the lease, as well as the other property, was transferred to Uy Eng Jui who again transferred it to Uy Eng Jui & Co., an unregistered partnership. Finally the lease came into the hands of Dy Tiao Lay, the herein defendant-appellee.

          Ramon Melencio died in 1914, and his widow, Liberata Macapagal, was appointed administratrix of his estate. In 1913 the land which includes the parcel in question was registered under the Torrens system. The lease was not mentioned in the certificate of title, but it was stated that one house and three warehouses on the land were the property of Yap Kui Chin.

          In 1920 the heirs of Julian Melencio made an extrajudicial partition of parts of the inheritance, and among other things, the land here in question fell to the share of the children of Ramon Melencio, who are the original plaintiffs in the present case. Their mother, Liberata Macapagal, as administratrix of the estate of her deceased husband, Ramon, collected the rent for the lease at the rate of P20.20 per month until the month of May,1926, when she demanded of the lessee that the rent should be increased to P300 per month, and she was then informed by the defendant that a written lease existed and that according to the terms thereof, the defendant was entitled to an extension of the lease at the original rental. The plaintiffs insisted that they never had any knowledge of the existence of such a contract of lease and maintained that in such case the lease was executed without their consent and was void. It may be noted that upon careful search, a copy of the contract of lease was found among the papers of the deceased Pedro R, Melencio. Thereafter the present action was brought to set aside the lease and to recover possession of the land. Upon trial, the court below rendered judgment in favor of the defendant declaring the lease valid and ordering the plaintiffs to

pay the P272 demanded by the defendant in his counterclaim. From this judgment the plaintiffs appealed.

          The contention of the appellants is that the aforesaid contract of lease (Exhibit C) is null and void for the following reasons:

1. That Exhibit C calls for an alteration of the property in question and therefore ought to have been signed by all the coowners as by law required in the premises.

2. That the validity and fulfillment of the said agreement of lease were made to depend upon the will of the lessee exclusively.

3. That the said contract of lease being for a term of over six years, the same is null and void pursuant to the provision of article 1548 of the Civil Code.

4. That the duration of the same is unreasonably long, thus being against public policy.

5. That the defendant-appellee and his predecessors in interest repeatedly violated the provisions of the agreement.

          The first proposition is based on article 397 of the Civil Code which provides that "none of the owners shall, without the consent of the others, make any alterations in the common property even though such alterations might be advantageous to all." We do not think that the alterations are of sufficient importance to nullify the lease, especially so since none of the coowners objected to such alterations until over twenty years after the execution of the contract of lease. The decision of this court in the case of Enriquez vs. A. S. Watson and Co. (22 Phil., 623), contains a full discussion of the effect of alterations of leased community property, and no further discussion upon the point need here be considered.

          The second proposition is likewise of little merit. Under the circumstances, the provision in the contract that the lessee, at any time before he erected any building on the land, might rescind the lease, can hardly be regarded as a violation of article 1256 of the Civil Code.

          The third and fourth proposition are, in our opinion, determinative of the controversy. The court below based its decision principally on the case of Enriquez vs. A.S. Watson & Co. (22 Phil., 623), and on the resolution of the Direccion General de los Registros dated April 26,1907. (Jurisprudencia Civil, vol.107, p. 222.) An examination of the Enriquez case will show that it differs materially from the present. In that case all of the coowners of a lot and building executed a contract of lease of the property for the term of eighteen years in favor of A. S. Watson & Co.; one of the owners was minor, but he was represented by his legally appointed guardian, and the action of the latter in signing the lease on behalf of the minor was formally approved by the Court of First Instance. In the present case only a small majority of the coowners executed the lease here in question, and according to the terms of the contract the lease might be given a duration of sixty years; that is widely different from a lease granted by all of the coowners for a term of only eighteen years.

          The resolution of April 26,1907, is more in point. It relates to the inscription or registration of a contract of lease of some pasture grounds. The majority of the coowners of the property executed the lease for the term of twelve years but when the lessees presented the lease for inscription in the

registry of property, the registrar denied the inscription on the ground that the term of the lease exceeded six years and that therefore the majority of the coowners lacked authority to grant the lease. The Direccion General de los Registros held that the contract of lease for a period exceeding six years, constitutes a real right subject to registry and that the lease in question was valid.

          The conclusions reached by the Direccion General led to considerable criticism and have been overruled by a decision of the Supreme Court of Spain dated June 1,1909. In that decision the court made the following statement of the case (translation):

          The joint owners of 511 out of 1,000 parts of the realty denominated El Mortero, leased out the whole property for twelve years to Doña Josefa de la Rosa; whereupon the Count and Countess Trespalacios together with other coowners brought this suit to annul the lease and, in view of the fact that the land was indivisible, prayed for its sale by public auction and the distribution of the price so obtained; they alleged that they neither took part nor consented to the lease; that the decision of the majority of part owners referred to in article 398 of the Code, implies a common deliberation on the step to be taken , for to do without it, would, even more than to do without the minority, be nothing less than plunder; and that, even if this deliberation were not absolutely necessary, the power of the majority would still be confined to decisions touching the management and enjoyment of the common property, and would not include acts of ownership, such as a lease for twelve years, which according to the Mortgage Law gives rise to a real right, which must be recorded, and which can be performed only by the owners of the property leased.

          The part owners who had executed the contract prayed in reconvention that it held valid for all the owners in common, and if this could not be, then for all those who had signed it, and for the rest, for the period of six years; and the Audiencia of Caceres having rendered judgment holding the contract null and void, and ordering the sale of the realty and the distribution of the price, the defendants appealed alleging under the third and fourth assignments of error, that the judgment was a violation of article 398 of the Civil Code, which is absolute and sets no limit of time for the efficacy of the decisions arrived at by the majority of the part owners for the enjoyment of the common property, citing the decisions of June 30th, 1897, of July 8th,1902, and of October 30th, 1907; under the fifth assignments of error the appellants contended that in including joint owners among those referred to in said article, which sets certain limits to the power of leasing, in the course of the management of another's property, the court applied article 1548 unduly; and by the seventh assignments of error, they maintained the judgment appealed from also violated article 1727, providing that the principal is not bound where his agent has acted beyond his authority; whence it may be inferred that if in order to hold the contract null and void, the majority of the part owners are looked upon as managers or agents exercising limited powers, it must at least be conceded that in so far as the act in question lies within the scope of their powers, it is valid; the contract cannot be annulled in toto.

          The Supreme Court held that the appeal from the decision of the Audiencia of Caceres was not well taken and expressed the following consideranda:

          Considering that, although as a rule the contract of lease constitutes an act of management, as this court has several times held, cases may yet arise, either owing to the nature of the subject matter, or to the period of duration, which may render it imperative to record the contract in the registry of property, in pursuance of the Mortgage Law, where the contract of lease may give rise to a real right in favor of the lessee, and it would then constitute such a sundering of the ownership as transcends mere management; in such cases it must of necessity be recognized that the part owners representing the greater portion of the property held in common have no power to lease said property for a longer period than six years without the consent of all the coowners, whose propriety rights, expressly recognized by the law, would by contracts of long duration be restricted or annulled;

and as under article 1548 of the Civil Code such contracts cannot be entered into by the husband with respect to his wife's property, by the parent or guardian with respect to that of the child or ward, and by the manager in default of special power, since the contract of lease only produces personal obligations, and cannot without the consent of all persons interested or express authority from the owner, be extended to include stipulations which may alter its character, changing it into a contract of partial alienation of the property leased;

          Considering that, applying this doctrine to the case before us, one of the grounds upon which the judgment appealed from, denying the validity of the lease made by the majority of the part owners of the pasture land El Mortero is based, must be upheld; to wit, that the period of duration is twelve years and the consent of all the coowners has not been obtained; hence, the third, fourth. and fifth assignments of error are without merit; firstly, because article 398 of the Civil Code, alleged to have been violated, refers to acts decided upon by the majority of the part owners, touching the management and enjoyment of the common property, and does not contradict what we have stated in the foregoing paragraph; secondly because although the cases cited were such as arose upon leases for more than six years, yet this point was not raised on appeal, and could not therefore be passed upon; and thirdly, because it cannot be denied that there is an analogy between a manager without special authority, who is forbidden by article 1548 of the Code to give a lease for a period of over six years, and the joint owners constituting a legal majority, who may decide to lease out the indivisible property, with respect to the shares of the other coowners; and having come to the conclusion that the contract is null and void, there is no need to discuss the first two assignments of error which refer to another of the bases adopted, however erroneously, by the trial court;

          Considering that the sixth assignment of error is without merit, inasmuch as the joint ownership of property is not a sort of agency and cannot be governed by the provisions relating to the latter contract; whence, article 1727 of the Code alleged to have been violated, can no more be applied, than, the question of the validity or nullity of the lease being raise, upon the contract as celebrated, it would be allowable to modify a posteriori some one or other of the main conditions stipulated, like that regarding the duration of the lease, for this would amount to a novation; still less allowable would it be to authorize diverse periods for the different persons unequally interested in the fulfillment.

          Taking into consideration articles 398,1548, and 1713 of the Civil Code and following the aforesaid decision of June 1,1909, we hold that the contract of lease here in question is null and void.

          It has been suggested that by reason of prescription and by acceptance of benefits under the lease, the plaintiffs are estopped to question the authority for making the lease.To this we may answer that the burden of proof of prescription devolved upon the defendant and that as far as we can find, there is no proof that Ramon Melencio and his successors ever had knowledge of the existence of the lease in question prior to 1926. We cannot by mere suspicion conclude that they were informed of the existence of the document and its terms; it must be remembered that under a strict interpretation of the terms of the lease, the lessees could remain indefinitely in their tenancy unless the lessors could purchase the mill and the buildings on the land. In such circumstances, better evidence than that presented by the defendant in regard to the plaintiff's knowledge of the lease must be required.

          The fact that Ramon during his lifetime received his share of the products of land owned in common with his coheirs is not sufficient proof of knowledge of the existence of the contract of lease when it is considered that the land in question was only a small portion of a large tract which Pedro R. Melencio was administering in connection with other community property.

          The appealed judgment as to the validity of the lease is therefore reversed, and it is ordered that the possession of the land in controversy be delivered to the intervenor Liberata Macapagal in her capacity as administratrix of the estate of the deceased Ramon Melencio. It is further ordered that the defendant pay to said administratrix a monthly rent of P50 for the occupation of the land from May 1st, 1926, until the land is delivered to the administratrix. The sum of P272 demanded by the defendant in his counterclaim may be deducted from the total amount of the rent due and unpaid. The building erected on the land by the defendant and his predecessors in interest may be removed by him, or otherwise disposed of, within six months from the promulgation of this decision. Without costs. So ordered.

EN BANC

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

ANGELA I. TUASON, plaintiff-appellant, vs.ANTONIO TUASON, JR., and GREGORIO ARANETA, INC., defendants-appellees.

Alcuaz & Eiguren for appellant.Araneta & Araneta for appellees.

MONTEMAYOR, J.:

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

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

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

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

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

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

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

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

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

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

We have examined Exh. "L" and compared the same with the contract (Exh. 6) and we agree with the trial court that in the main the terms of both contracts are similar and practically the same. Moreover, as correctly found by the trial court, the copies of both contracts were shown to the plaintiff Angela and her husband, a broker, and both had every opportunity to go over and compare them and decide on the advisability of or disadvantage in entering into the contract (Exh. 6); that although Atty. Antonio Araneta was an official of the Araneta Inc.; being a member of the Board of Directors of the Company at the time that Exhibit "6" was executed, he was not the party with which Angela contracted, and that he committed no breach of trust. According to the evidence Araneta, the

pertinent papers, and sent to her checks covering her receive the same; and that as a matter of fact, at the time of the trial, Araneta Inc., had spent about P117,000 in improvement and had received as proceeds on the sale of the lots the respectable sum of P1,265,538.48. We quote with approval that portion of the decision appealed from on these points:

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

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

The Court finds from the evidence that he defendant Gregorio Araneta, Incorporated has substantially complied with obligation imposed by the contract exhibit 6 in its paragraph 1, and that for improvements alone, it has disbursed the amount of P117,167.09. It has likewise paid taxes, commissions and other expenses incidental to its obligations as denied in the agreement.

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

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

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

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

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

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

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

This aspect of the contract is very similar to and was perhaps based on the other agreement or contract (Exh. "L") referred to by appellant where the parties thereto in express terms entered into partnership, although this object is not expressed in so many words in Exh. 6. We repeat that we see no violation of Art. 400 of the Civil Code in the parties entering into the contract (Exh. 6) for the very reason that Art. 400 is not applicable.

Looking at the case from a practical standpoint as did the trial court, we find no valid ground for the partition insisted upon the appellant. We find from the evidence as was done by the trial court that of the 64,928.6 sq. m. which is the total area of the parcel held in common, only 1,600 sq. m. or 2.5 per cent of the entire area remained unsold at the time of the trial in the year 1947, while the great bulk of 97.5 per cent had already been sold. As well observed by the court below, the partnership is in the process of being dissolved and is about to be dissolved, and even assuming that Art. 400 of the Civil Code were applicable, under which the parties by agreement may agree to keep the thing undivided for a period not exceeding 10 years, there should be no fear that the remaining 1,600 sq. m. could not be disposed of within the four years left of the ten-years period fixed by Art. 400.

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

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

So ordered.

SECOND DIVISION

 

G.R. No. 101522 May 28, 1993

LEONARDO MARIANO, AVELINA TIGUE, LAZARO MARIANO, MERCEDES SAN PEDRO, DIONISIA M. AQUINO, and JOSE N.T. AQUINO, petitioners, vs.HON. COURT OF APPEALS, (Sixteenth Division), GRACE GOSIENGFIAO, assisted by her husband GERMAN GALCOS; ESTER GOSIENGFIAO, assisted by her husband AMADOR BITONA; FRANCISCO GOSIENGFIAO, JR., NORMA GOSIENGFIAO, and PINKY ROSE GUENO, respondents.

The Baristers Law Office for petitioners.

Simeon T. Agustin for private respondents.

 

NOCON, J.:

Before Us is a petition foe review of the decision, dated May 13, 1991 of the Court of Appeals in CA-G.R. CV No. 13122, entitled Grace Gosiengfiao, et al. v. Leonardo Mariano v. Amparo Gosiengfiao 1 raising as issue the distinction between Article 1088 2 and Article 1620 3 of the Civil Code.

The Court of Appeals summarized the facts as follows:

It appears on record that the decedent Francisco Gosiengfiao is the registered owner of a residential lot located at Ugac Sur, Tuguegarao, Cagayan, particularly described as follows, to wit:

"The eastern portion of Lot 1351, Tuguegarao Cadastre, and after its segregation now designated as Lot 1351-A, Plan PSD-67391, with an area of 1,1346 square meters."

and covered by Transfer Certificate of Title No. T-2416 recorded in the Register of Deeds of Cagayan.

The lot in question was mortgaged by the decedent to the Rural Bank of Tuguegarao (designated as Mortgagee bank, for brevity) on several occasions before the last, being on March 9, 1956 and 29, 1958.

On August 15, 1958, Francisco Gosiengfiao died intestate survived by his heirs, namely: Third-Party Defendants: wife Antonia and Children Amparo, Carlos, Severino and herein plaintiffs-appellants Grace, Emma, Ester, Francisco, Jr., Norma, Lina (represented by daughter Pinky Rose), and Jacinto.

The loan being unpaid, the lot in dispute was foreclosed by the mortgagee bank and in the foreclosure sale held on December 27, 1963, the same was awarded to the mortgagee bank as the highest bidder.

On February 7, 1964, third-party defendant Amparo Gosiengfiao-Ibarra redeemed the property by paying the amount of P1,347.89 and the balance of P423.35 was paid on December 28, 1964 to the mortgagee bank.

On September 10, 1965, Antonia Gosiengfiao on her behalf and that of her minor children Emma, Lina, Norma together with Carlos and Severino executed a "Deed of Assignment of the Right of Redemption" in favor of Amparo G. Ibarra appearing in the notarial register of Pedro (Laggui) as Doc. No. 257, Page No. 6, Book No. 8, Series of 1965.

On August 15, 1966, Amparo Gosiengfiao sold the entire property to defendant Leonardo Mariano who subsequently established residence on the lot subject of this controversy. It appears in the Deed of Sale dated August 15, 1966 that Amparo, Antonia, Carlos and Severino were signatories thereto.

Sometime in 1982, plaintiff-appellant Grace Gosiengfiao learned of the sale of said property by the third-party defendants. She went to the Barangay Captain and asked for a confrontation with defendants Leonardo and Avelina Mariano to present her claim to said property.

On November 27, 1982, no settlement having been reached by the parties, the Barangay captain issued a certificate to file action.

On December 8, 1982, defendant Leonardo Mariano sold the same property to his children Lazaro F. Mariano and Dionicia M. Aquino as evidenced by a Deed of Sale notarized by Hilarion L. Aquino as Doc. No. 143, Page No. 19, Book No. V, Series of 1982.

On December 21, 1982, plaintiffs Grace Gosiengfiao, et al. filed a complaint for "recovery of possession and legal redemption with damages" against defendants Leonardo and Avelina Mariano. Plaintiffs alleged in their complaint that as co-heirs and co-owners of the lot in question, they have the right to recover their respective shares in the same, and property as they did not sell the same, and the right of redemption with regard to the shares of other co-owners sold to the defendants.

Defendants in their answer alleged that the plaintiffs has (sic) no cause of action against them as the money used to redeem lot in question was solely from the personal funds of third-party defendant Amparo Gosiengfiao-Ibarra, who consequently became the sole owner of the said property and thus validly sold the entire property to the defendants, and the fact that defendants had already sold the said property to the children, Lazaro Mariano and Dionicia M. Aquino. Defendants further contend that even granting that the plaintiffs are co-owners with the third-party defendants, their right of redemption had already been barred by the Statute of Limitations under Article 1144 of the Civil Code, if not by laches. 4

After trial on the merits, the Regional Trial Court of Cagayan, Branch I, rendered a decision dated September 16, 1986, dismissing the complaint and stating that respondents have no right of ownership or possession over the lot in question. The trial court further said that when the subject property foreclosed and sold at public auction, the rights of the heirs were reduced to a mere right of redemption. And when Amparo G. Ibarra redeemed the lot from the Rural Bank on her own behalf and with her own money she became the sole owner of the property. Respondents' having failed to redeem the property from the bank or from Amparo G. Ibarra, lost whatever rights the might have on the property. 5

The Court of Appeals in its questioned decision reversed and set aside the ruling of the trial court and declared herein respondents as co-owners of the property in the question. The Court of Appeals said:

The whole controversy in the case at bar revolves on the question of "whether or not a co-owner who redeems the whole property with her own personal funds becomes the sole owner of said property and terminates the existing state of co-ownership."

Admittedly, as the property in question was mortgaged by the decedent, a co-ownership existed

among the heirs during the period given by law to redeem the foreclosed property. Redemption of the whole property by a co-owner does not vest in him sole ownership over said property but will inure to the benefit of all co-owners. In other words, it will not end to the existing state of co-ownership. Redemption is not a mode of terminating a co-ownership.

xxx xxx xxx

In the case at bar, it is undisputed and supported by records, that third-party defendant Amparo G. Ibarra redeemed the propety in dispute within the one year redemption period. Her redemption of the property, even granting that the money used was from her own personal funds did not make her the exclusive owner of the mortgaged property owned in common but inured to the benefit of all co-owners. It would have been otherwise if third-party defendant Amparo G. Ibarra purchased the said property from the mortgagee bank (highest, bidder in the foreclosure sale) after the redemption period had already expired and after the mortgagee bank had consolidated it title in which case there would no longer be any co-ownership to speak of . 6

The decision of the Court of Appeals is supported by a long line of case law which states that a redemption by a co-owner within the period prescribed by law inures to the benefit of all the other co-owners. 7

The main argument of petitioners in the case at bar is that the Court of Appeals incorrectly applied Article 1620 of the Civil Code, instead of Article 1088 of the same code which governs legal redemption by co-heirs since the lot in question, which forms part of the intestate estate of the late Francisco Gosiengfiao, was never the subject of partition or distribution among the heirs, thus, private respondents and third-party defendants had not ceased to be co-heirs.

On that premise, petitioners further contend that the right of legal redemption was not timely exercised by the private respondents, since Article 1088 prescribes that the same must be done within the period of one month from the time they were notified in writing of the sale by the vendor.

According to Tolentino, the fine distinction between Article 1088 and Article 1620 is that when the sale consists of an interest in some particular property or properties of the inheritance, the right redemption that arises in favor of the other co-heirs is that recognized in Article 1620. On the other hand, if the sale is the hereditary right itself, fully or in part, in the abstract sense, without specifying any particular object, the right recognized in Article 1088 exists. 8

Petitioners allege that upon the facts and circumstances of the present case, respondents failed to exercise their right of legal redemption during the period provided by law, citing as authority the case of Conejero, et al., v. Court of Appeals, et al. 9 wherein the Court adopted the principle that the giving of a copy of a deed is equivalent to the notice as required by law in legal redemption.

We do not dispute the principle laid down in the Conejero case. However, the facts in the said case are not four square with the facts of the present case. In Conejero, redemptioner Enrique Conejero was shown and given a copy of the deed of sale of the subject property. The Court in that case stated that the furnishing of a copy of the deed was equivalent to the giving of a written notice required by law. 11

The records of the present petition, however, show no written notice of the sale being given whatsoever to private respondents. Although, petitioners allege that sometime on October 31, 1982 private respondent, Grace Gosiengfiao was given a copy of the questioned deed of sale and shown a copy of the document at the Office of the Barangay Captain sometime November 18, 1982, this was not supported by the evidence presented. On the contrary, respondent, Grace Gosiengfiao, in her testimony, declared as follows:

Q. When you went back to the residence of Atty. Pedro Laggui were you able to see him?

A. Yes, I did.

Q. When you saw him, what did you tell?

A. I asked him about the Deed of Sale which Mrs. Aquino had told me and he also showed me a Deed of Sale. I went over the Deed of Sale and I asked Atty. Laggui about this and he mentioned here about the names of the legal heirs. I asked why my name is not included and I was never informed in writing because I would like to claim and he told me to better consult my own attorney.

Q. And did you go?

A. Yes, I did.

Q. What kind of copy or document is that?

A. It is a deed of sale signed by my mother, sister Amparo and my brothers.

Q. If shown to you the copy of the Deed of Sale will you be able to identify it?

A. Yes, sir. 11

Thereafter, Grace Gosiengfiao explicitly stated that she was never given a copy of the said Deed of Sale.

Q. Where did Don Mariano, Dr. Mariano and you see each other?

A. In the house of Brgy. Captain Antonio Bassig.

Q. What transpired in the house of the Brgy. Captain when you saw each other there?

A. Brgy. Captain Bassig informed my intention of claiming the lot and I also informed him about the Deed of Sale that was not signed by me since it is mine it is already sold and I was informed in writing about it. I am a legal heir and I have also the right to claim.

Q. And what was the reply of Don Mariano and Dr. Mariano to the information given to them by Brgy. Captain Bassig regarding your claim?

A. He insisted that the lot is already his because of the Deed of Sale. I asked for the exact copy so that I could show to him that I did not sign and he said he does not have a copy. 12

The above testimony was never refuted by Dr. Mariano who was present before Brgy. Captain Bassig.

The requirement of a written notice has long been settled as early as in the case of Castillo v. Samonte, 13 where this Court quoted the ruling in Hernaez v. Hernaez, 32 Phil., 214, thus:

Both the letter and spirit of the New Civil Code argue against any attempt to widen the scope of the

notice specified in Article 1088 by including therein any other kind of notice, such as verbal or by registration. If the intention of the law had been to include verbal notice or any other means of information as sufficient to give the effect of this notice, then there would have been no necessity or reasons to specify in Article 1088 of the New Civil Code that the said notice be made in writing for, under the old law, a verbal notice or information was sufficient. 14

Moreover, petitioners themselves adopted in their argument respondents' allegation In their complaint that sometime on October, 1982 they sought the redemption of the property from spouses Leonardo Mariano and Avelina Tigue, by tendering the repurchase money of P12,000.00, which the spouses rejected. 15 Consequently, private respondents exercised their right of redemption at the first opportunity they have by tendering the repurchase price to petitioners. The complaint they filed, before the Barangay Captain and then to the Regional Trial Court was necessary to assert their rights. As we learned in the case of Castillo, supra:

It would seem clear from the above that the reimbursement to the purchaser within the period of one month from the notice in writing is a requisite or condition precedent to the exercise of the right of legal redemption; the bringing of an action in court is the remedy to enforce that right in case the purchaser refuses the redemption. The first must be done within the month-period; the second within the prescriptive period provided in the Statute of Limitation. 16

The ruling in Castillo v. Samonte; supra, was reiterated in the case of Garcia v. Calaliman, where We also discussed the reason for the requirement of the written notice. We said:

Consistent with aforesaid ruling, in the interpretation of a related provision (Article 1623 of the New Civil Code) this Court had stressed that written notice is indispensable, actual knowledge of the sale acquired in some other manners by the redemptioner, notwithstanding. He or she is still entitled to written notice, as exacted by the code to remove all uncertainty as to the sale, its terms and its validity, and to quiet and doubt that the alienation is not definitive . The law not having provided for any alternative, the method of notifications remains exclusive, though the Code does not prescribe any particular form of written notice nor any distinctive method written notification of redemption (Conejero et al. v. Court of Appeals et al., 16 SCRA 775 [1966]; Etcuban v. Court of Appeals, 148 SCRA 507 [1987]; Cabrera v. Villanueva, G.R. No. 75069, April 15, 1988). 17 (Emphasis ours)

We likewise do not find merit in petitioners' position that private respondents could not have validly effected redemption due to their failure to consign in court the full redemption price after tender thereof was rejected by the petitioners. Consignation is not necessary, because the tender of payment was not made to discharge an obligation, but to enforce or exercise a right. It has been previously held that consignation is not required to preserve the right of repurchase as a mere tender of payment is enough on time as a basis for an action to compel the vendee a retro to resell the property; no subsequent consignation was necessary to entitle private respondents to suchreconveyance. 18

Premises considered, respondents have not lost their right to redeem, for in the absence of a written notification of the sale by the vendors, the 30-day period has not even begun to run.

WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED. Cost against petitioners.

SO ORDERED.

SECOND DIVISION

G.R. No. 75884 September 24, 1987

JULITA GO ONG, FOR HERSELF AND AS JUDICIAL GUARDIAN OF STEVEN GO ONG, petitioners, vs.THE HON. COURT OF APPEALS, ALLIED BANKING CORPORATION and the CITY SHERIFF OF QUEZON CITY, respondents.

 

PARAS, J.:

This is a petition for review on certiorari of the March 21, 1986 Decision * of the Court of Appeals in AC-G.R. CV No. 02635, "Julita Ong etc. vs. Allied Banking Corp. et al." affirming, with modification, the January 5, 1984 Decision of the Regional Trial Court of Quezon City in Civil Case No. Q-35230.

The uncontroverted facts of this case, as found by the Court of Appeals, are as follows:

...: Two (2) parcels of land in Quezon City Identified as Lot No. 12, Block 407, Psd 37326 with an area of 1960.6 sq. m. and Lot No. 1, Psd 15021, with an area of 3,660.8 sq. m. are covered by Transfer Certificate of Title No. 188705 in the name of "Alfredo Ong Bio Hong married to Julita Go Ong "(Exh. D). Alfredo Ong Bio Hong died on January 18, 1975 and Julita Go Ong was appointed administratrix of her husband's estate in Civil Case No. 107089. The letters of administration was registered on TCT No. 188705 on October 23, 1979. Thereafter, Julita Go Ong sold Lot No. 12 to Lim Che Boon, and TCT No. 188705 was partially cancelled and TCT No. 262852 was issued in favor of Lim Che Boon covering Lot No. 12 (Exh. D-4). On June 8, 1981 Julita Go Ong through her attorney-in-fact Jovita K. Yeo (Exh. 1) mortgaged Lot No. 1 to the Allied Banking Corporation to secure a loan of P900,000.00 obtained by JK Exports, Inc. The mortgage was registered on TCT No. 188705 on the same date with the following notation: "... mortgagee's consent necessary in case of subsequent alienation or encumbrance of the property other conditions set forth in Doc. No. 340, Page No. 69, Book No. XIX, of the Not. Public of Felixberto Abad". On the loan there was due the sum of P828,000.00 and Allied Banking Corporation tried to collect it from Julita Go Ong, (Exh. E). Hence, the complaint alleging nullity of the contract for lack of judicial approval which the bank had allegedly promised to secure from the court. In response thereto, the bank averred that it was plaintiff Julita Go Ong who promised to secure the court's approval, adding that Julita Go Ong informed the defendant that she was processed the sum of P300,000.00 by the JK Exports, Inc. which will also take charge of the interest of the loan.

Concluding, the trial court ruled:

Absent (of) any evidence that the property in question is the capital of the deceased husband brought into the marriage, said property should be presumed as acquired during the marriage and, therefore, conjugal property,

After the dissolution of the marriage with the death of plaintiff's husband, the plaintiff acquired, by law, her conjugal share, together with the hereditary rights thereon. (Margate vs. Rabacal, L-14302, April 30, 1963). Consequently, the mortgage constituted on said property, upon express authority of plaintiff, notwithstanding the lack of judicial approval, is valid, with respect to her conjugal share thereon, together with her hereditary rights.

On appeal by petitioner, respondent Court of Appeals affirmed, with modification, the appealed decision (Record, pp. 19-22). The dispositive portion of the appellate court's decision reads:

WHEREFORE, with the modification that the extrajudicial foreclosure proceedings instituted by defendant against plaintiff shall be held in abeyance to await the final result of Civil Case No. 107089 of the Court of First Instance of Manila, 6th Judicial District Branch XXXII, entitled "IN THE MATTER OF THE INTESTATE ESTATE OF THE LATE ALFREDO ONG BIO: JULITA GO ONG, ADMINISTRATRIX". In pursuance with which the restraining order of the lower court in this case restraining the sale of the properties levied upon is hereby ordered to continue in full force and effect coterminous with the final result of Civil Case No. 107089, the decision appealed from is hereby affirmed. Costs against plaintiff-appellant.

SO ORDERED.

On April 8, 1986, petitioner moved for the reconsideration of the said decision (Ibid., pp. 24-29), but in a Resolution dated September 11, 1986, respondent court denied the motion for lack of merit (Ibid., p. 23). Hence, the instant petition (Ibid., pp. 6-17).

The Second Division of this Court, in a Resolution dated November 19, 1986 (Rollo, p. 30), without giving due course to the petition, resolved to require private respondent to comment thereon and it did on February 19, 1987 (Ibid., pp. 37-42). Thereafter, in a Resolution dated April 6, 1987, the petition was given due course and the parties were required to file their respective memoranda (Ibid., p. 43).

Petitioner filed her Memorandum on May 13, 1987 (Ibid., pp. 45-56), while private respondent filed its Memorandum on May 20, 1987 (Ibid., pp. 62-68).

The sole issue in this case is —

WHETHER OR NOT THE MORTGAGE CONSTITUTED OVER THE PARCEL OF LAND UNDER PETITIONER'S ADMINISTRATION IS NULL AND VOID FOR WANT OF JUDICIAL APPROVAL.

The instant petition is devoid of merit.

The well-settled rule that the findings of fact of the trial court are entitled to great respect, carries even more weight when affirmed by the Court of Appeals as in the case at bar.

In brief, the lower court found: (1) that the property under the administration of petitioner — the wife of the deceased, is a community property and not the separate property of the latter; (2) that the mortgage was constituted in the wife's personal capacity and not in her capacity as administratrix; and (3) that the mortgage affects the wife's share in the community property and her inheritance in the estate of her husband.

Petitioner, asserting that the mortgage is void for want of judicial approval, quoted Section 7 of Rule 89 of the Rules of Court and cited several cases wherein this Court ruled that the regulations provided in the said section are mandatory.

While petitioner's assertion may have merit insofar as the rest of the estate of her husband is concerned the same is not true as regards her conjugal share and her hereditary rights in the estate. The records show that petitioner willingly and voluntarily mortgaged the property in question because she was processed by JK Exports, Inc. the sum of P300,000.00 from the proceeds of the loan; and that at the time she executed the real estate mortgage, there was no court order authorizing the mortgage, so she took it upon herself, to secure an order.

Thus, in confirming the findings of the lower court, as supported by law and the evidence, the Court of Appeals aptly ruled that Section 7 of Rule 89 of the Rules of Court is not applicable, since the mortgage was constituted in her personal capacity and not in her capacity as administratrix of the estate of her husband.

Nevertheless, petitioner, citing the cases of Picardal, et al. vs. Lladas (21 SCRA 1483) and Fernandez, et al. vs. Maravilla (10 SCRA 589), further argues that in the settlement proceedings of the estate of the deceased spouse, the entire conjugal partnership property of the marriage is under administration. While such may be in a sense true, that fact alone is not sufficient to invalidate the whole mortgage, willingly and voluntarily entered into by the petitioner. An opposite view would result in an injustice. Under similar circumstances, this Court applied the provisions of Article 493 of the Civil Code, where the heirs as co-owners shall each have the full ownership of his part and the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even 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 (Philippine National Bank vs. Court of Appeals, 98 SCRA 207 [1980]).

Consequently, in the case at bar, the trial court and the Court of Appeals cannot be faulted in ruling that the questioned mortgage constituted on the property under administration, by authority of the petitioner, is valid, notwithstanding the lack of judicial approval, with respect to her conjugal share and to her hereditary rights. The fact that what had been mortgaged was in custodia legis is immaterial, insofar as her conjugal share and hereditary share in the property is concerned for after all, she was the ABSOLUTE OWNER thereof. This ownership by hers is not disputed, nor is there any claim that the rights of the government (with reference to taxes) nor the rights of any heir or anybody else have been prejudiced for impaired. As stated by Associate Justice (later Chief Justice) Manuel Moran in Jakosalem vs. Rafols, et al., 73 Phil. 618 —

The land in question, described in the appealed decision, originally belonged to Juan Melgar. The latter died and the judicial administration of his estate was commenced in 1915 and came to a close on December 2, 1924, only. During the pendency of the said administration, that is, on July 5, 1917, Susana Melgar, daughter of the deceased Juan Melgar, sold the land with the right of repurchase to Pedro Cui, subject to the stipulation that during the period for the repurchase she would continue in possession of the land as lessee of the purchase. On December 12, 1920, the partition of the estate left by the deceased Juan Melgar was made, and the land in question was adjudicated to Susana Melgar. In 1921, she conveyed, in payment of professional fees, one-half of the land in favor of the defendant-appellee Nicolas Rafols, who entered upon the portion thus conveyed and has been in possession thereof up to the present. On July 23, 1921, Pedro Cui brought an action to recover said half of the land from Nicolas Rafols and the other half from the other defendants, and while that case was pending, or about August 4, 1925, Pedro Cui donated the whole land in question to Generosa Teves, the herein plaintiff-appellant, after trial, the lower court rendered a decision absolving Nicolas Rafols as to the one-half of the land conveyed to him by Susana Melgar, and declaring the plaintiff owner of the other half by express acknowledgment of the other defendants. The plaintiff appealed from that part of the judgment which is favorable to Nicolas Rafols.

The lower court absolved Nicolas Rafols upon the theory that Susana Melgar could not have sold anything to Pedro Cui because the land was then in custodia legis, that is, under judicial administration. This is error. That the land could not ordinary be levied upon while in custodia legis, does not mean that one of the heirs may not sell the right, interest or participation which he has or might have in the lands under administration. The ordinary execution of property in custodia legis is prohibited in order to avoid interference with the possession by the court. But the sale made by an heir of his share in an inheritance, subject to the result of the pending administration, in no wise stands in the way of such administration.

The reference to judicial approval in Sec. 7, Rule 89 of the Rules of Court cannot adversely affect the substantive rights of private respondent to dispose of her Ideal [not inchoate, for the conjugal

partnership ended with her husband's death, and her hereditary rights accrued from the moment of the death of the decedent (Art. 777, Civil Code) share in the co-heirship and/or co-ownership formed between her and the other heirs/co-owners (See Art. 493, Civil Code, supra.). Sec. 7, Art. 89 of the Civil Code applies in a case where judicial approval has to be sought in connection with, for instance, the sale or mortgage of property under administration for the payment, say of a conjugal debt, and even here, the conjugal and hereditary shares of the wife are excluded from the requisite judicial approval for the reason already adverted to hereinabove, provided of course no prejudice is caused others, including the government.

Moreover, petitioner is already estopped from questioning the mortgage. An estoppel may arise from the making of a promise even though without consideration, if it was intended that the promise should be relied upon and in fact it was relied upon, and if a refusal to enforce it would be virtually to sanction the perpetration of fraud or would result in other injustice (Gonzalo Sy Trading vs. Central Bank, 70 SCRA 570).

PREMISES CONSIDERED, the instant petition is hereby DENIED and the assailed decision of the Court of Appeals is hereby AFFIRMED.

SO ORDERED.

SECOND DIVISION

 

G.R. No. 102380 January 18, 1993

HERODOTUS P. ACEBEDO and DEMOSTHENES P. ACEBEDO, Petitioners, vs. HON. BERNARDO P. ABESAMIS, MIGUEL ACEBEDO, ALEXANDER ACEBEDO, NAPOLEON ACEBEDO, RIZALINO ACEBEDO, REPUBLICA ACEBEDO, FILIPINAS ACEBEDO and YU HWA PING, Respondents.

CAMPOS, JR., J.:

The lower court's jurisdiction in approving a Deed of Conditional Sale executed by respondents-heirs and ordering herein administrator-petitioner Herodotus Acebedo to sell the remaining portions of said properties, despite the absence of its prior approval as a probate court, is being challenged in the case at bar.chanroblesvirtualawlibrary chanrobles virtual law library

The late Felix Acebedo left an estate consisting of several real estate properties located in Quezon City and Caloocan City, with a conservative estimated value of about P30 million. Said estate allegedly has only the following unsettled claims:

a. P87,937.00 representing unpaid real estate taxes due Quezon City; chanrobles virtual law library

b. P20,244.00 as unpaid real estate taxes due Caloocan City; chanrobles virtual law library

c. The unpaid salaries/allowances of former Administrator Miguel Acebedo, and the incumbent Administrator Herodotus Acebedo; and chanrobles virtual law library

d. Inheritance taxes that may be due on the net estate.

The decedent was succeeded by eight heirs, two of whom are the petitioners herein, and the others are the private respondents.chanroblesvirtualawlibrary chanrobles virtual law library

Due to the prolonged pendency of the case before the respondent Court for sixteen years, respondents-heirs filed a "Motion for Approval of Sale", on October 4, 1989. The said sale involved the properties covered by Transfer Certificate of Title Nos. 155569, 120145, 9145, and 18709, all of which are registered in Quezon City, and form part of the estate. The consideration for said lots was twelve (12) million pesos and by that time, they already had a buyer. It was further stated in said Motion that respondents-heirs have already received their proportionate share of the six (6) million pesos paid by the buyer, Yu Hwa Ping, as earnest money; that the balance of P6,000,000.00 is more than enough to pay the unsettled claims against the estate. Thus, they prayed for the Court to direct the administrator, Herodotus Acebedo (referred to as petitioner-administrator hereafter):

1. to sell the properties mentioned in the motion; chanrobles virtual law library

2. with the balance of P6 million, to pay all the claims against the Estate; and chanrobles virtual law library

3. to distribute the residue among the Heirs in final settlement of the Estate.

To the aforesaid Motion, herein petitioner-administrator interposed an "Opposition to Approval of Sale", to wit:

1. That he has learned that some of the heirs herein have sold some real estate property of the Estate located at Balintawak, Quezon City, without the knowledge of the herein administrator, without the approval of this Honorable Court and of some heirs, and at a shockingly low price; chanrobles virtual law library

2. That he is accordingly hereby registering his vehement objection to the approval of the sale, perpetrated in a manner which can even render the proponents of the sale liable for punishment for contempt of this Honorable Court; chanrobles virtual law library

3. The herein Administrator instead herein prays this Honorable Court to authorize the sale of the above mentioned property of the Estate to generate funds to pay certain liabilities of the Estate and with the approval of this Honorable Court if warranted, to give the heirs some advances chargeable against theirs (sic) respective shares, and, for the purpose to authorize the herein Administrator, and the other heirs to help the Administrator personally or through a broker, to look for a buyer for the highest obtainable price, subject always to the approval of this Honorable Court. 1 chanrobles virtual law library

On October 30, 1989, herein petitioners moved to be given a period of forty-five (45) days within which to look for a buyer who will be willing to buy the properties at a price higher than P12,000,000.00.chanroblesvirtualawlibrary chanrobles virtual law library

The case was set for hearing on December 15, 1989. However, by said date, petitioners have not found any buyer offering better terms. Thus, they asked the Court, on February 8, 1990, for an in extendible period of thirty days to look for a buyer.chanroblesvirtualawlibrary chanrobles virtual law library

Petitioner-administrator then filed a criminal complaint for falsification of a public document against Yu Hwa Ping and notary public Eugenio Obon on February 26, 1990. He initiated this complaint upon learning that it was Yu Hwa Ping who caused the notarization of the Deed of Conditional Sale wherein allegedly petitioner-administrator's signature was made to appear. He also learned that after he confronted the notary public of the questioned document, the latter revoked his notarial act on the same.chanroblesvirtualawlibrary chanrobles virtual law library

On April 2, 1990, petitioner-administrator filed the civil action to secure the declaration by the Court of the nullity of the Deed of Conditional Sale and the Deed of Absolute Sale.chanroblesvirtualawlibrary chanrobles virtual law library

The period granted herein petitioners having lapsed without having found a buyer, petitioner Demosthenes Acebedo sought to nullify the Orders granting them several periods within which to look for a better buyer. Respondents filed a comment thereon.chanroblesvirtualawlibrary chanrobles virtual law library

Having miserably failed to find a better buyer, after seven long months, petitioner-administrator filed another "Opposition to Approval of Sale", dated May 10, 1990, maintaining that the sale should wait for the country to recover from the effects of the coup d'etat attempts, otherwise, the properties should be divided among the heirs.chanroblesvirtualawlibrary chanrobles virtual law library

On June 21, 1990, petitioners filed a "Motion for Leave of Court to Mortgage and Lease some of the Properties of the Estate". To this Motion, respondents filed an Opposition on the following grounds : that the motion is not proper because of the pending motion to approve the sale of the same properties; that said conditional sale was initiated by petitioner-administrator who had earlier signed a receipt for P500,000.00 as earnest money; that the approval of the sale would mean Yu Hwa Ping's assumption of payment of the realty taxes; that the estate has no further debts and thus, the intestate administrator may be terminated.chanroblesvirtualawlibrary chanrobles virtual law library

On August 17, 1990, respondent Court issued an Order, the dispositive portion of which, stated, among others, to wit: 2

b. the motion filed by the heirs-movants, dated October 4, 1989, praying that the new administrator be directed to sell the properties covered by TCT Nos. 155569, 120145, 9145 and 18709, in favor of Yu Hwa Ping is hereby denied; and chanrobles virtual law library

c. the new administrator is hereby granted leave to mortgage some properties of the estate at a just and reasonable amount, subject to the approval of the Court.

On December 4, 1990, the respondent Judge issued an order resolving to call the parties to a conference on December 17, 1990. The conference was held, but still the parties were unable to arrive at an agreement. So, on January 4, 1991, it was continued, wherein the parties actually agreed that the heirs be allowed to sell their shares of the properties to Yu Hwa Ping for the price already agreed upon, while herein petitioners negotiate for a higher price with Yu Hwa Ping.chanroblesvirtualawlibrary chanrobles virtual law library

Petitioners, then, instead filed a "Supplemental Opposition" to the approval of the Deed of Conditional Sale.chanroblesvirtualawlibrary chanrobles virtual law library

On March 29, 1991, the respondent Court issued the challenged Order, the dispositive portion of which states, to wit:

WHEREFORE, the Order dated August 7, 1990, is hereby lifted, reconsidered and set aside, and another one is hereby issued as follows: chanrobles virtual law library

1. Approving the conditional sale, dated September 10, 1989, executed by the heirs-movants, in favor of Yu Hwa Ping, pertaining to their respective shares in the properties covered by TCT Nos. 155569, 120145, 1945 and 18709 of the Register of Deeds of Quezon City; chanrobles virtual law library

2. Ordering the administrator Herodotus Acebedo to sell the remaining portions of the said properties also in favor of Yu Hwa Ping at the same price as the sale executed by the herein heirs-movants; chanrobles virtual law library

3. Ordering Yu Hwa Ping to deposit with the Court the total remaining balance of the purchase price for the said lots within TWENTY (20) DAYS from notice hereof; chanrobles virtual law library

4. The motion to cite former administrator Miguel Acebedo in contempt of court, resulting from his failure to submit the owner's copy of TCT Nos. 155569, and 120145 is hereby denied. 3 chanrobles virtual law library

Yu Hwa Ping, on April 4, 1991, deposited the remaining balance of the purchase price for the properties subject of the Deed of Conditional Sale in the amount of P6,500,000.00.chanroblesvirtualawlibrary chanrobles virtual law library

Petitioners herein received the questioned Order on April 11, 1991. Twenty one (21) days thereafter, they filed a Motion for Reconsideration, praying that the Court reinstate its Order of August 17, 1990. To this, private respondents filed their Opposition. 4 chanrobles virtual law library

Instead of making a reply, petitioners herein filed a Supplemental Motion for Reconsideration. The motions for reconsideration of herein petitioners were denied by the respondent Court on August 23, 1991.chanroblesvirtualawlibrary chanrobles virtual law library

On September 23, 1991, herein petitioners filed a Motion for Partial Reconsideration, hoping for the last time that they would be able to convince the Court that its Order dated March 29, 1991 in effect approving the conditional sale is erroneous and beyond its jurisdiction.chanroblesvirtualawlibrary chanrobles virtual law library

On October 17, 1991, the respondent Court denied the Motion for Partial Reconsideration for "lack of merit".chanroblesvirtualawlibrary chanrobles virtual law library

On November 7, 1991, private respondents filed a Motion for Execution of the Order dated March 29, 1991. This was pending resolution when the petitioners filed this Petition for Certiorari.chanroblesvirtualawlibrary chanrobles virtual law library

The controversy in the case at bar revolves around one question: Is it within the jurisdiction of the lower court, acting as a probate court, to issue an Order approving the Deed of Conditional Sale executed by respondents-heirs without prior court approval and to order herein Administrator to sell the remaining portion of said properties? chanrobles virtual law library

We answer in the positive? chanrobles virtual law library

In the case of Dillena vs. Court of Appeals, 5 this Court made a pronouncement that it is within the jurisdiction of the probate court to approve the sale of properties of a deceased person by his prospective heirs before final adjudication. Hence, it is error to say that this matter should be threshed out in a separate action.chanroblesvirtualawlibrary chanrobles virtual law library

The Court further elaborated that although the Rules of Court do not specifically state that the sale of an immovable property belonging to an estate of a decedent, in a special proceeding, should be made with the approval of the court, this authority is necessarily included in its capacity as a probate court. Therefore, it is clear that the probate court in the case at bar, acted within its jurisdiction in issuing the Order approving the Deed of Conditional Sale.chanroblesvirtualawlibrary chanrobles virtual law library

We cannot countenance the position maintained by herein petitioners that said conditional sale is null and void for lack of prior court approval. The sale precisely was made conditional, the condition being that the same should first be approved by the probate court.chanroblesvirtualawlibrary chanrobles virtual law library

Petitioners herein anchor their claim on Section 7, Rule 89 of the Rules of Court. 6 It is settled that court approval is necessary for the validity of any disposition of the decedent's estate. However, reference to judicial approval cannot adversely affect the substantive rights of the heirs to dispose of their ideal share in the co-heirship and/or co-ownership among the heirs. 7 chanrobles virtual law library

This Court had the occasion to rule that there is no doubt that an heir can sell whatever right, interest, or participation he may have in the property under administration. This is a matter which comes under the jurisdiction of the probate court. 8 chanrobles virtual law library

The right of an heir to dispose of the decedent's property, even if the same is under administration, is based on the Civil Code provision 9 stating that the possession of hereditary property is deemed transmitted to the heir without interruption and from the moment of the death of the decedent, in case the inheritance is accepted. Where there are however, two or more heirs, the whole estate of the decedent is, before its partition, owned in common by such heirs. 10 chanrobles virtual law library

The Civil Code, under the provisions on co-ownership, further qualifies this right. 11 Although it is mandated that each co-owner shall have the full ownership of his part and of the fruits and benefits

pertaining thereto, and thus may alienate, assign or mortgage it, and even substitute another person in its enjoyment, the effect of the alienation or the mortgage, with respect to theco-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. 12 In other words, the law does not prohibit a co-owner from selling, alienating or mortgaging his ideal share in the property held in common. 13 chanrobles virtual law library

As early as 1942, this Court has recognized said right of an heir to dispose of property under administration. In the case of Teves de Jakosalem vs. Rafols, et al., 14 it was said that the sale made by an heir of his share in an inheritance, subject to the result of the pending administration, in no wise, stands in the way of such administration. The Court then relied on the provision of the Old Civil Code, Article 440 and Article 339 which are still in force as Article 533 and Article 493, respectively, in the new Civil Code. The Court also cited the words of a noted civilist, Manresa: "Upon the death of a person, each of his heirs 'becomes the undivided owner of the whole estate left with respect to the part or portion which might be adjudicated to him, a community of ownership being thus formed among the co-owners of the estate which remains undivided'." chanrobles virtual law library

Private respondents having secured the approval of the probate court, a matter which is unquestionably within its jurisdiction, and having established private respondents' right to alienate the decedent's property subject of administration, this Petition should be dismissed for lack of merit.chanroblesvirtualawlibrary chanrobles virtual law library

PREMISES considered, Petition is hereby DISMISSED. With Costs.chanroblesvirtualawlibrary chanrobles virtual law library

SO ORDERED.

THIRD DIVISION

 

G.R. No. 61584 November 25, 1992

DONATO S. PAULMITAN, JULIANA P. FANESA and RODOLFO FANESA, petitioners, vs.COURT OF APPEALS, ALICIO PAULMITAN, ELENA PAULMITAN, ABELINO PAULMITAN, ANITA PAULMITAN, BAKING PAULMITAN, ADELINA PAULMITAN and ANITO PAULMITAN, respondents.

 

ROMERO, J.:

This is a petition for review on certiorari seeking the reversal of the decision 1 of the Court of Appeals, dated July 14, 1982 in CA-G.R. No. 62255-R entitled "Alicio Paulmitan, et al. v. Donato Sagario Paulmitan, et al." which affirmed the decision 2 of the then Court of First Instance (now RTC) of Negros Occidental, 12th Judicial District, Branch IV, Bacolod City, in Civil Case No. 11770.

The antecedent facts are as follows:

Agatona Sagario Paulmitan, who died sometime in 1953, 3 left the two following parcels of land located in the Province of Negros Occidental: (1) Lot No. 757 with an area of 1,946 square meters covered by Original Certificate of Title (OCT) No. RO-8376; and (2) Lot No. 1091 with an area of 69,080 square meters and covered by OCT No. RO-11653. From her marriage with Ciriaco Paulmitan, who is also now deceased, Agatona begot two legitimate children, namely: Pascual Paulmitan, who also died in 1953, 4 apparently shortly after his mother passed away, and Donato Paulmitan, who is one of the petitioners. Petitioner Juliana P. Fanesa is Donato's daughter while the third petitioner, Rodolfo Fanes, is Juliana's husband. Pascual Paulmitan, the other son of Agatona Sagario, is survived by the respondents, who are his children, name: Alicio, Elena, Abelino, Adelina, Anita, Baking and Anito, all surnamed Paulmitan.

Until 1963, the estate of Agatona Sagario Paulmitan remained unsettled and the titles to the two lots mentioned above remained in the name of Agatona. However, on August 11, 1963, petitioner Donato Paulmitan executed an Affidavit of Declaration of Heirship, extrajudicially adjudicating unto himself Lot No. 757 based on the claim that he is the only surviving heir of Agatona Sagario. The affidavit was filed with the Register of Deeds of Negros Occidental on August 20, 1963, cancelled OCT No. RO-8376 in the name of Agatona Sagario and issued Transfer Certificate of Title (TCT) No. 35979 in Donato's name.

As regards Lot No. 1091, Donato executed on May 28, 1974 a Deed of Sale over the same in favor of petitioner Juliana P. Fanesa, his daughter. 5

In the meantime, sometime in 1952, for non-payment of taxes, Lot No. 1091 was forfeited and sold at a public auction, with the Provincial Government of Negros Occidental being the buyer. A Certificate of Sale over the land was executed by the Provincial Treasurer in favor of the Provincial Board of Negros Occidental. 6

On May 29, 1974, Juliana P. Fanesa redeemed the property from the Provincial Government of Negros Occidental for the amount of P2,959.09. 7

On learning of these transactions, respondents children of the late Pascual Paulmitan filed on January 18, 1975 with the Court of First Instance of Negros Occidental a Complaint against petitioners to partition the properties plus damages.

Petitioners set up the defense of prescription with respect to Lot No. 757 as an affirmative defense, contending that the Complaint was filed more than eleven years after the issuance of a transfer certificate of title to Donato Paulmitan over the land as consequence of the registration with the Register of Deeds, of Donato's affidavit extrajudicially adjudicating unto himself Lot No. 757. As regards Lot No. 1091, petitioner Juliana P. Fanesa claimed in her Answer to the Complaint that she acquired exclusive ownership thereof not only by means of a deed of sale executed in her favor by her father, petitioner Donato Paulmitan, but also by way of redemption from the Provincial Government of Negros Occidental.

Acting on the petitioners' affirmative defense of prescription with respect to Lot No. 757, the trial court issued an order dated April 22, 1976 dismissing the complaint as to the said property upon finding merit in petitioners' affirmative defense. This order, which is not the object of the present petition, has become final after respondents' failure to appeal therefrom.

Trial proceeded with respect to Lot No. 1091. In a decision dated May 20, 1977, the trial court decided in favor of respondents as to Lot No. 1091. According to the trial court, the respondents, as descendants of Agatona Sagario Paulmitan were entitled to one-half (1/2) of Lot No. 1091, pro indiviso. The sale by petitioner Donato Paulmitan to his daughter, petitioner Juliana P. Fanesa, did not prejudice their rights. And the repurchase by Juliana P. Fanesa of the land from the Provincial Government of Negros Occidental did not vest in Juliana exclusive ownership over the entire land but only gave her the right to be reimbursed for the amount paid to redeem the property. The trial court ordered the partition of the land and directed petitioners Donato Paulmitan and Juliana P. Fanesa to pay private respondents certain amounts representing the latter's share in the fruits of the land. On the other hand, respondents were directed to pay P1,479.55 to Juliana P. Fanesa as their share in the redemption price paid by Fanesa to the Provincial Government of Negros Occidental. The dispositive portion of the trial court's decision reads:

WHEREFORE, judgment is hereby rendered on the second cause of action pleaded in the complain as follows:

1. The deed of sale (Exh. "F") dated May 28, 1974 is valid insofar as the one-half undivided portion of Lot 1091 is concerned as to vest ownership over said half portion in favor of defendant Juliana Fanesa and her husband Rodolfo Fanesa, while the remaining half shall belong to plaintiffs, pro-indiviso;

2. Lot 1091, Cadastral Survey of Pontevedra, Province of Negros Occidental, now covered by TCT No. RO-11653 (N.A.), is ordered partitioned. The parties must proceed to an actual partition by property instrument of partition, submitting the corresponding subdivision within sixty (60) days from finality of this decision, and should they fail to agree, commissioners of partition may be appointed by the Court;

3. Pending the physical partition, the Register of Deeds of Negros Occidental is ordered to cancel Original Certificate of Title No. RO-11653 (N.A.) covering Lot 1091, Pontevedra Cadastre, and to issue in lieu thereof a new certificate of title in the name of plaintiffs and defendants, one-half portion each, pro-indiviso, as indicated in paragraph 1 above;

4. Plaintiffs are ordered to pay, jointly and severally, defendant Juliana Fanesa the amount of P1,479.55 with interest at the legal rate from May 28, 1974 until paid;

5 Defendants Donato Sagario Paulmitan and Juliana Paulmitan Fanesa are ordered to account to plaintiffs and to pay them, jointly and severally, the value of the produce from Lot 1091 representing plaintiffs' share in the amount of P5,000.00 per year from 1966 up to the time of actual partition of the property, and to pay them the sum of P2,000.00 as attorney's fees as well as the costs of the suit.

xxx xxx xxx

On appeal, the Court of Appeals affirmed the trial court's decision. Hence this petition.

To determine the rights and obligations of the parties to the land in question, it is well to review, initially, the relatives who survived the decedent Agatona Sagario Paulmitan. When Agatona died in 1953, she was survived by two (2) sons, Donato and Pascual. A few months later in the same year, Pascual died, leaving seven children, the private respondents. On the other had, Donato's sole offspring was petitioner Juliana P. Fanesa.

At the time of the relevant transactions over the properties of decedent Agatona Sagario Paulmitan, her son Pascual had died, survived by respondents, his children. It is, thus, tempting to apply the principles pertaining to the right of representation as regards respondents. It must, however, be borne in mind that Pascual did no predecease his mother, 8 thus precluding the operation of the provisions in the Civil Code on the right of representation 9 with respect to his children, the respondents. When Agatona Sagario Paulmitan died intestate in 1952, her two (2) sons Donato and Pascual were still alive. Since it is well-settled by virtue of Article 777 of the Civil Code that "[t]he rights to the succession are transmitted from the moment of the death of the decedent," 10 the right of ownership, not only of Donato but also of Pascual, over their respective shares in the inheritance was automatically and by operation of law vested in them in 1953 when their mother died intestate. At that stage, the children of Donato and Pascual did not yet have any right over the inheritance since "[i]n every inheritance, the relative nearest in degree excludes the more distantones." 11 Donato and Pascual excluded their children as to the right to inherit from Agatona Sagario Paulmitan, their mother.

From the time of the death of Agatona Sagario Paulmitan to the subsequent passing away of her son Pascual in 1953, the estate remained unpartitioned. Article 1078 of the Civil Code provides: "Where there are two or more heirs, the whole estate of the decedent is, before its partition, owned in common by such heirs, subject to the payment of debts of the deceased." 12 Donato and Pascual Paulmitan were, therefore, co-owners of the estate left by their mother as no partition was ever made.

When Pascual Paulmitan died intestate in 1953, his children, the respondents, succeeded him in the co-ownership of the disputed property. Pascual Paulmitan's right of ownership over an undivided portion of the property passed on to his children, who, from the time of Pascual's death, became co-owners with their uncle Donato over the disputed decedent estate.

Petitioner Juliana P. Fanesa claims ownership over Lot No. 1091 by virtue of two transactions, namely: (a) the sale made in her favor by her father Donato Paulmitan; and (b) her redemption of the land from the Provincial of Negros Occidental after it was forfeited for non-payment of taxes.

When Donato Paulmitan sold on May 28, 1974 Lot No. 1091 to his daughter Juliana P. Fanesa, he was only a co-owner with respondents and as such, he could only sell that portion which may be allotted to him upon termination of the co-ownership. 13 The sale did not prejudice the rights of respondents to one half (1/2) undivided share of the land which they inherited from their father. It did not vest ownership in the entire land with the buyer but transferred only the seller's pro-indiviso share in the property 14 and consequently made the buyer a co-owner of the land until it is partitioned. In Bailon-Casilao v. Court of Appeals, 15 the Court, through Justice Irene R. Cortes, outlined the effects of a sale by

one co-owner without the consent of all the co-owners, thus:

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 its enjoyment, except when personal rights are involved. But the effect of the alienation or mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership. [Emphasis supplied.]

As early as 1923, this Court has ruled that even if a co-owner sells the whole property as his, the sale will affect only his own share but not those of the other co-owners who did not consent to the sale [Punsalan v. Boon Liat, 44 Phil. 320 (1923)]. This is because under the aforementioned codal provision, the sale or other disposition affects only his undivided share and the transferee gets only what would correspond to his grantor in the partition of the thing owned in common [Ramirez v. Bautista, 14 Phil. 528 (1909)]. Consequently, by virtue of the sales made by Rosalia and Gaudencio Bailon which are valid with respect to their proportionate shares, and the subsequent transfers which culminated in the sale to private respondent Celestino Afable, the said Afable thereby became a co-owner of the disputed parcel of land as correctly held by the lower court since the sales produced the effect of substituting the buyers in the enjoyment thereof [Mainit v. Bandoy, 14 Phil. 730 (1910)].

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

Applying this principle to the case at bar, the sale by petitioner Donato Paulmitan of the land to his daughter, petitioner Juliana P. Fanesa, did not give to the latter ownership over the entire land but merely transferred to her the one half (1/2) undivided share of her father, thus making her the co-owner of the land in question with the respondents, her first cousins.

Petitioner Juliana P. Fanesa also claims ownership of the entire property by virtue of the fact that when the Provincial Government of Negros Occidental bought the land after it was forfeited for non-payment of taxes, she redeemed it.

The contention is without merit.

The redemption of the land made by Fanesa did not terminate the co-ownership nor give her title to the entire land subject of the co-ownership. Speaking on the same issue raised by petitioners, the Court, in Adille v. Court of Appeals, 16 resolved the same with the following pronouncements:

The petition raises a purely legal issue: May a co-owner acquire exclusive ownership over the property held in common?

Essentially, it is the petitioners' contention that the property subject of dispute devolved upon him upon the failure of his co-heirs to join him in its redemption within the period required by law. He relies on the provisions of Article 1515 of the old Civil Code, Article 1613 of the present Code, giving the vendee a retro the right to demand redemption of the entire property.

There is no merit in this petition.

The right of repurchase may be exercised by co-owner with respect to his share alone (CIVIL CODE, art. 1612, CIVIL CODE (1889), art. (1514.). While the records show that petitioner redeemed the property in its entirety, shouldering the expenses therefor, that did not make him the owner of all of it. In other words, it did not put to end the existing state of co-ownership (Supra, Art. 489). There is no doubt that redemption of property entails a necessary expense. Under the Civil Code:

Art. 488. Each co-owner shall have a right to compel the other co-owners to contribute to the expenses of preservation of the thing or right owned in common and to the taxes. Any one of the latter may exempt himself from this obligation by renouncing so much of his undivided interest as may be equivalent to his share of the expenses and taxes. No such waiver shall be made if it is prejudicial to the co-ownership.

The result is that the property remains to be in a condition of co-ownership. While a vendee a retro, under Article 1613 of the Code, "may not be compelled to consent to a partial redemption," the redemption by one co-heir or co-owner of the property in its totality does not vest in him ownership over it. Failure on the part of all the co-owners to redeem it entitles the vendee a retro to retain the property and consolidate title thereto in his name (Supra, art. 1607). But the provision does not give to the redeeming co-owner the right to the entire property. It does not provide for a mode of terminating a co-ownership.

Although petitioner Fanesa did not acquire ownership over the entire lot by virtue of the redemption she made, nevertheless, she did acquire the right to reimbursed for half of the redemption price she paid to the Provincial Government of Negros Occidental on behalf of her co-owners. Until reimbursed, Fanesa hold a lien upon the subject property for the amount due her. 17

Finally, petitioners dispute the order of the trial court, which the Court of Appeals affirmed, for them to pay private respondents P5,000.00 per year from 1966 until the partition of the estate which represents the share of private respondents in the fruits of the land. According to petitioners, the land is being leased for P2,000.00 per year only. This assigned error, however raises a factual question. The settled rule is that only questions of law may be raised in a petition for review. As a general rule, findings of fact made by the trial court and the Court of Appeals are final and conclusive and cannot be reviewed on appeal. 18

WHEREFORE, the petition is DENIED and the decision of the Court of Appeals AFFIRMED.

SO ORDERED.

T H I R D D I V I S I O N  

SENEN   B.   AGUILAR,                                        Petitioner,   

- versus -   

VIRGILIO B. AGUILAR and ANGEL B. AGUILAR,                                    Respondents, x-----------------------------------------------x ALEJANDRO C. SANGALANG,                   Intervenor-Respondent.

G.R. No. 141613  Present:

  PANGANIBAN,SANDOVAL-GUTIERREZ,CORONA,CARPIO MORALES, andGARCIA, JJ.

   Promulgated: December 16, 2005

 x---------------------------------------------------------------------------------------------x 

D E C I S I O N 

 SANDOVAL-GUTIERREZ, J.:             Assailed in this petition for review on certiorari are the Decision[1] and Resolution[2] of the Court of Appeals, dated June 11, 1999 and January 11, 2000, respectively, in CA-G.R. CV No. 55750.

          The parties in this case are brothers, except Alejandro Sangalang, herein intervenor-respondent.   As will be subsequently discussed, this is the second time that the brothers Aguilar seek the intervention of this Court regarding the same facts and the same subject matter.     The first was in Aguilar v. Court of Appeals, G.R. No. 76351 decided on October 29, 1993 against Senen B. Aguilar.[3]     It is time to writ finis to this family wrangling.

          On October 28, 1993, Senen and Virgilio purchased a house and lot located in Parañaque City, Metro Manila for the benefit of their father, Maximiano Aguilar (now deceased).    The brothers wanted their father to enjoy his retirement in a quiet neighborhood.    On February 23, 1970, they executed a written agreement stipulating that their shares in the house and lot would be equal; and that Senen would live with their father on condition that he would pay the Social Security System (SSS) the remaining loan obligation of the former owners. 

          In 1974, their father died.  Virgilio then demanded that Senen vacate the house and that the property be sold, the proceeds to be divided between them.   Senen refused to comply with Virgilio’s demand.

          On January 12, 1979, Virgilio filed a complaint with the Court of First Instance (now Regional Trial Court) of Rizal at Pasay City for specific performance.   Virgilio prayed that Senen be compelled to sell the property so that the proceeds could be divided between them.  

          However, during the pre-trial, neither Senen nor his counsel appeared.   Thus, Senen was declared as in default by the trial court and Virgilio was allowed to present his evidence ex-parte.

          On July 26, 1979, the trial court rendered its Decision, declaring the brothers co-owners of the house and lot and are entitled to equal shares; and ordering that the property be sold, the proceeds to be divided equally between them.    The trial court also ordered Senen to vacate the property and to pay Virgilio rentals with interests corresponding to the period from January 1975 until he leaves the premises.  

          On appeal, docketed as CA-G.R. CV No. 03933, the Court of Appeals reversed the trial court’s Decision.

          Virgilio then filed with this Court a petition for review on certiorari, docketed as G.R. No. 76351.

          On October 29, 1993, this Court rendered its Decision, the dispositive portion of which reads:

         “WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of Appeals dated 16 October 1986 is REVERSED and SET ASIDE. The decision of the trial court in Civil Case No. 6912-P dated 26 July 1971 is REINSTATED, with the modification that respondent Senen B. Aguilar is ordered to vacate the premises in question within ninety (90) days from receipt of this decision, and to pay petitioner Virgilio B. Aguilar, a monthly rental of P1,200.00 with interest at the legal rate from the time he received the decision of the trial court directing him to vacate until he effectively leaves the premises.            The trial court is further directed to take immediate steps to implement this decision, conformably with Art. 498 of the Civil Code and the Rules of Court. This decision is final and executory.            SO ORDERED.”  

          On March 27, 1995, Senen filed with the Regional Trial Court, Branch 260, Parañaque City, an action for legal redemption against Virgilio and another brother, Angel, docketed as Civil Case No. 95-039.    In his complaint, Senen alleged that while he knows that Virgilio sold his ½ share of the property to Angel in January 1989, however, he (Senen) was not furnished any written notice of the sale.    Consequently, as a co-owner, he has the right to redeem the property.

          Meanwhile, on November 27, 1995, pursuant to this Court’s Decision in G.R. No. 76351, the

property was sold at public auction to Alejandro C. Sangalang, intervenor-respondent herein. Virgilio then received his share of the proceeds as well as the rental payments due from Senen.

          By then, Virgilio had moved to California, USA.   It was only on January 25, 1997 that he was served, through the Philippine Consulate in San Francisco, a copy of Senen’s complaint in Civil Case No. 95-039.

          On February 24, 1997, Virgilio filed a motion to dismiss the complaint for lack of cause of action and forum shopping.

          In an Order dated June 27, 1997, the trial court dismissed Civil Case No. 05-039 on the ground of laches, holding that Senen incurred a delay of seven (7) years before asserting his right to redeem the property in question.

          On appeal, the Court of Appeals affirmed the assailed Order of the trial court.

          Hence, the instant petition for review on certiorari.

          The sole issue for our resolution is whether the Court of Appeals erred in holding that Senen’s complaint for legal redemption in Civil Case No. 05-039 is barred by laches.       

          Legal redemption (retracto legal de comuneros) is a privilege created by law, partly by reason of public policy and partly for the benefit of the redemptioner to afford him a way out of a disagreeable or inconvenient association into which he has been thrust.[4]

With respect to redemption by co-owners, in case the share of a co-owner is sold to a third person, the governing law is Article 1620 of the Civil Code which provides: 

         “ART. 1620. A co-owner of a thing may exercise the right of redemption in case the shares of all the other co-owners or of any of them are sold to a third person. If the price of the alienation is grossly excessive, the redemptioner shall pay only a reasonable rate.            Should two or more co-owners desire to exercise the right of redemption, they may only do so in proportion to the share they may respectively have in the thing owned in common.”

   The purpose behind Article 1620 is to provide a method for terminating the co-

ownership and consolidating the dominion in one sole owner.[5]

Article 1623 of the same Code also provides:

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

          From the above provisions, the following are the requisites for the exercise of legal redemption: (1) There must be a co-ownership; (2) one of the co-owners sold his right to a stranger;  (3) the sale was made before the partition of the co-owned property; (4) the right of redemption must be exercised by one or more co-owners within a period of thirty days to be counted from the time that he or they were notified in writing by the vendee or by the co-owner vendor; and (5) the vendee must be reimbursed for the price of the sale.

          In this case, the sale took place in January 1989.   Petitioner admits that he has actual knowledge of the sale.   However, he only asserted his right to redeem the property in March 1995 by filing the instant complaint.   Both the trial court and the Appellate Court ruled that this was seven (7) years late.

          Petitioner, however, now contends that there being no written notice to him of the sale by the vendee or vendor, the thirty-day redemption period has not prescribed.

          Petitioner’s contention lacks merit.   The old rule is that a written notice of the sale by the vendor to his co-owners is indispensable for the latter to exercise their retracto legal de comuneros.[6]    More recently, however, we have relaxed the written notice requirement.    Thus, in Si v. Court of Appeals,[7] we ruled that a co-owner with actual notice of the sale is not entitled to a written notice for such would be superfluous.    The law does not demand what is unnecessary.

          Laches is the failure or neglect, for an unreasonable and unexplained length of time, to do that which could or should have been done earlier through the exercise of due diligence.[8]   Otherwise stated, laches is the negligence or omission to assert a right within a reasonable time warranting a presumption that the party entitled to assert it has either abandoned or declined to assert it.[9]    Its

elements are: (1) conduct on the part of the defendant, or of one under whom he claims, giving rise to the situation for which the complaint seeks a remedy; (2) delay in asserting the complainant’s rights, the complainant having had knowledge or notice of the defendant’s conduct as having been afforded an opportunity to institute a suit; (3) lack of knowledge or notice on the part of the defendant that the complainant would assert the right in which he bases his suit; and (4) injury or prejudice to the defendant in the event, relief is accorded to the complainant, or the suit is not held barred.[10]

          Petitioner has actual knowledge of the sale of Virgilio’s share to Angel in 1989.    As provided by Article 1623, he has thirty days from such actual knowledge within which to exercise his right to redeem the property.   Inexplicably, petitioner did not take any action.    He waited for seven (7) years before filing his complaint.   Definitely, such an unexplained delay is tantamount to laches.    To be sure, to uphold his right would unduly cause injury to respondent-intervenor, a purchaser in good faith and for value.

          Moreover, by the time Senen filed Civil Case No. 95-039 for legal redemption, his right was no longer available to him.    We have held that after a property has been subdivided and distributed among the co-owners, the community has terminated and there is no reason to sustain any right of pre-emption or redemption.[11]

          WHEREFORE, the petition is DENIED.   The Decision and Resolution of the Court of Appeals in CA-G.R. CV No. 55750 are AFFIRMED.     Costs against petitioner.

          SO ORDERED.

FIRST DIVISION

G.R. No. L-44426 February 25, 1982

SULPICIO CARVAJAL, petitioner, vs.THE HONORABLE COURT OF APPEALS ** and EUTIQUIANO CAMARILLO and LIBERATA CACABELOS, respondents.

 

TEEHANKEE, J.:

The Court reverses the appellate court's decision affirming in toto the judgment of the Court of First Instance of Pangasinan, declaring plaintiffs-respondents the lawful owners of the land in question and ordering defendant (herein petitioner) to pay P30.00 monthly rentals until possession of the property is surrendered to respondents, for unless there is partition of the estate of the deceased, either extra judicially or by court order, a co-heir cannot validly claim title to a specific portion of the estate and send the same. Title to any specific part of the estate does not automatically pass to the heirs by the mere death of the decedent and the effect of any disposition by a co-heir before partition shall be limited to the portion which may be allotted to him upon the dissolution of the communal estate. What a co-heir can validly dispose of is only his hereditary rights.

Private respondents, who are husband and wife, had instituted a complaint before the Court of First Instance for ejectment and recovery of possession against herein petitioner, docketed as Civil Case No. T-1163, alleging that they are the owners in fee simple of a parcel of commercial land, pro-indiviso, consisting of 150.8 sq. meters, more or less, situated in Poblacion, Tayug, Pangasinan, having bought the same from Evaristo G. Espique by virtue of a Deed of Absolute Sale executed on April 15, 1964. They also demand that petitioner pay a monthly rental for the use of the property all P40.00 until the property is surrendered to them.

The property in question is a 1/5 portion of a 754 sq. qmeter land originally owned by Hermogenes Espique and his wife, both dead. After their death their five children, namely: Maria, Evaristo, Faustina, Estefanio and Tropinia succeeded them in the ownership of the whole lot.

Petitioner presently occupies two-fifths of the whole lot inherited pro-indiviso by the Espique children. Petitioner alleges that he purchased the northern one-half portion of the lot he is occupying (which is also claimed by respondents) from Estefanio Espique and that the southern one-half portion of the lot he is occupying (which is also claimed by respondents) from Estefanio Espique and that the southern one-half portion is leased to him by Tropinia Espique. The land subject of the controversy is the most southern portion of the whole lot inherited by the Espique children which petitioner claims he had bought from Estefanio on April 26, 1967 and which respondents claim they had bough from Evaristo on April 15, 1964.

Both sales were made while the petition for partition filed by Evaristo Espique was still pending before the Court of First Instance of Pangasinan, docketed therein as Civil Case No. T-966.

The Court finds merit in the petition for setting aside respondent appellate court's decision finding for respondents-plaintiffs, for the following considerations:

The action for ejectment and recovery of possession instituted by herein respondents in the lower court is premature, for what must be settled frist is the action for partition. Unless a project of partition is effected, each heir cannot claim ownership over a definite portion of the inheritance. Without partition, either by agreement between the parties of by judicial proceeding, a co-heir cannot

dispose of a specific portion of the estate. For where there are two or more heirs, the whole estate such heirs. 1 Upon the death of a person, each of his heirs becomes the undivided owner of the whole estate left wtih respect to the part of portion which might be adjudicated to him, a community of ownership being thus formed among the co-owners of the estate or co-heirs while it remains undivided. 2

While under Article 493 of the New Civil Code, each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto and he may alienate, assign or mortgage it, and even substitute another person in its enjoyment, the effect of the alienation or the mortgage with respect to the co-owners, shall be limited, by mandate of the same article, to the portion which may be allotted to him in the division upon the termination of the co-ownership. He has no right to sell or alienate a concrete, specific, or determinate part of the thing in common to the exclusion of the other co-owners because his right over the thing is represented by an abstract or Ideal portion without any physical adjudication. 3 An individual co- owner cannot adjudicate to himself or claim title to any definite portion of the land or thing owned in common until its actual partition by agreement or judicial decree. Prior to that time all that the co-owner has is an Ideal or abstract quota or proportionate share in the entire thing owned in common by all the co-owners. 4 What a co owner may dispose of is only his undivided aliquot share, which shall be limited to the portion that may be allotted to him upon partition. 5 Before partition, a co-heir can only sell his successional rights. 6

In the case at bar, the fact that the sale executed by Evaristo G. qqqEspique in favor of respondents and the sale executed by Estefanio Espique in favor of petitioner were made before the partition of the property among the co-heirs does not annul or invalidate the deeds of sale and both sales are valid. However, the interests thereby acquired by petitioner and respondents are limited only to the parts that may be ultimately assigned to Estefanio and Evaristo, respectively, upon the partition of the estate 7 subject to provisions on subrogation of the other co-heirs to the rights of the stranger-purchaser provided in Article 1088 of the Civil Code. 8 Respondent court's ruling that the sale by Estefanio in favor of petitioner is not valid because of lack of notice to his co-heirs is erroneous. Such notice in writing is not a requisite for the validity of the sale. Its purpose is merely to apprise the co-heirs of the sale of a portion of the estate, for them to exercise their preferential right of subrogation under Article 1088 of the New Civil Code, that is, the right to redeem the property sold within one month from the time they were notified in writing of the sale by a co-heir. (There is nothing in the record to indicate that such right of subrogation was in effect sought to be exercised upon the co-heirs' having learned of the sale, which is not in issue here.)

Thus, respondents have no right to eject petitioners nor demand payment of rentals for the use of the property in dispute. Until the partition of the estate is ordered by the Court of First Instance of Pangasinan in the pending partition proceedings and the share of each co-heir is determined by metes and bounds, neither petitioner nor respondents can rightfully claim that what they bought is the part in dispute.

Accordingly, respondent court's judgment is set aside and judgment is hereby rendered dismissing the complaint of respondents-plaintiffs in the court below. No pronouncement as to costs.

FIRST DIVISION

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.

EN BANC

 

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

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

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

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

 

TEEHANKEE, J.:

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

The Court of Appeals, in its decision affirming in toto the judgment of the Manila court of first instance ordering therein defendant-appellant Arsenio de Castro, Sr. (now deceased and substituted by above-named petitioners as his heirs) "to return to the plaintiff (respondent) Gregorio Atienza the sum P2,500.00 with legal interest from the date of the filing of complaint until fully paid plus the sum of P250.00 as attorney's fees and the costs of the suit", found the following facts to undisputed:

On January 24, 1956 the brothers Tomas de Castro and Arsenio de Castro, Sr. leased to plaintiff a fishpond containing an area of 26 hectares situated in Polo, Bulacan and forming part of a bigger parcel of land covered by Transfer Certificate of Title No. 196450 of the registry of the property of Bulacan. The lessors are co-owners in equal shares of the leased property.

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

In the meantime, Tomas de Castro died.

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

Condition No. 2 of Exhibit A reads as follows:

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

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

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

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

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

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

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

The appellate court's judgment is fully supported by the Civil Code provisions on the rights and

prerogatives of co-owners, and specifically by Article 493 which expressly provides that

Art. 493. Each co-owner shall have the full ownership of his part and of the fruits and 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 alloted to him in the division upon the termination of the co-ownership. *

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

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

EN BANC

G.R. No. L-24419           July 15, 1968

LEONORA ESTOQUE, plaintiff-appellant, vs.ELENA M. PAJIMULA, assisted by her husband CIRIACO PAJIMULA, defendants-appellees.

Jesus P. Mapanao for plaintiff-appellant. Vergara and Dayot for defendants-appellees.

REYES, J.B.L., J.:

Direct appeal from an order of the Court of First Instance of La Union, in its Civil Case No. 1990, granting a motion to dismiss the complaint for legal redemption by a co-owner (retracto legal de comuneros) on account of failure to state a cause of action.

The basic facts and issues are stated in the decision appealed from, as follows:

Plaintiff based her complaint for legal redemption on a claim that she is a co-owner of Lot No. 802, for having purchased 1/3 portion thereof, containing an area of 640 square meters as evidenced by a deed of sale, Annex "A", which was executed on October 28, 1951 by Crispina Perez de Aquitania, one of the co-owners, in her favor.

On the other hand, the defendant, who on December 30, 1959 acquired the other 2/3 portion of Lot No. 802 from Crispina Aquitania and her children, claimed that the plaintiff bought the 1/3 southeastern portion, which is definitely identified and segregated, hence there existed no co-ownership at the time and after said plaintiff bought the aforesaid portion, upon which right of legal redemption can be exercised or taken advantage of.

From the complaint, it would appear that Lot No. 802 of the Cadastral survey of Rosario, covered by original certificate of title No. RO-2720 (N.A.) was originally owned by the late spouses, Rosendo Perez and Fortunata Bernal, who were survived by her children, namely, Crispina Perez, Lorenzo Perez and Ricardo Perez. Ricardo Perez is also now dead. On October 28, 1951, Crispina P. Vda. de Aquitania sold her right and participation in Lot No. 802 consisting of 1/3 portion with an area of 640 square meters to Leonora Estoque (Annex A of the complaint). On October 29, 1951, Lorenzo Perez, Crispina Perez and Emilia P. Posadas, widow of her deceased husband, Ricardo Perez for herself and in behalf of her minor children, Gumersindo, Raquel, Emilio and Ricardo, Jr., executed a deed of extrajudicial settlement wherein Lorenzo Perez, Emilia P. Posadas and her minor children assigned all their right, interest and participation in Lot No. 802 to Crispina Perez (Annex B of the complaint). On December 30, 1959, Crispina Perez and her children Rosita Aquitania Belmonte, Remedios Aquitania Misa, Manuel Aquitania, Sergio Aquitania and Aurora Aquitania sold to Elena Pajimula, the remaining 2/3 western portion of Lot No. 802 with an area of 958 square meters (Annex C of the complaint).

The action of the plaintiff is premised on the claim of co-ownership. From the deed of sale executed in favor of the plaintiff, it can be seen that the 1/3 portion sold to plaintiff is definitely identified as the 1/3 portion located on the southeastern part of Lot No. 802 and specifically bounded on the north by De Guzman Street, on the east by Posadas Street, on the south by Perez Street, and on the west by remaining portion of the same lot, which contained an area of 640 square meters. And in the deed of sale executed by Crispina Perez and her children in favor of defendant Elena Pajimula over the remaining 2/3 portion of Lot No. 802, said portion is identified as the western portion of Lot No. 802 which is bounded on the north by De Guzman Street, on the east by properties of Leonarda Estoque, on the south by the national road and on the west by Lots Nos. 799 and 801, containing an area of

598 square meters.

The appellant's stand is that the deed in her favor was inoperative to convey the southeastern third of Lot 802 of the Rosario Cadastre notwithstanding the description in the deed itself, for the reason that the vendor, being a mere co-owner, had no right to sell any definite portion of the land held in common but could only transmit her undivided share, since the specific portion corresponding to the selling co-owner is not known until partition takes place (Lopez vs. Ilustre, 5 Phil. 567; Ramirez vs. Bautista, 14 Phil. 528). From this premise, the appellant argues that the sale in her favor, although describing a definite area, should be construed as having conveyed only the undivided 1/3 interest in Lot 802 owned at the time by the vendor, Crispina Perez Vda. de Aquitania. Wherefore, when the next day said vendor acquired the 2/3 interest of her two other co-owners, Lot 802 became the common property of appellant and Crispina Perez. Therefore, appellant argues, when Crispina sold the rest of the property to appellee Pajimula spouses, the former was selling an undivided 2/3 that appellant, as co-owner, was entitled to redeem, pursuant to Article 1620 of the New Civil Code.

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

Should two or more co-owners desire to exercise the right of redemption, they may only do so in proportion to the share they may respectively have in the thing owned in common.

The lower court, upon motion of defendant, dismissed the complaint, holding that the deeds of sale show that the lot acquired by plaintiff Estoque was different from that of the defendants Pajimula; hence they never became co-owners, and the alleged right of legal redemption was not proper. Estoque appealed.

We find no error in the order of dismissal, for the facts pleaded negate the claim that appellant Estoque ever became a co-owner of appellees Pajimula.

(1) The deed of sale to Estoque (Annex A of the complaint) clearly specifies the object sold as the southeastern third portion of Lot 802 of the Rosario Cadastre, with an area of 840 square meters, more or less. Granting that the seller, Crispina Perez Vda. de Aquitania could not have sold this particular portion of the lot owned in common by her and her two brothers, Lorenzo and Ricardo Perez, by no means does it follow that she intended to sell to appellant Estoque her 1/3 undivided interest in the lot forementioned. There is nothing in the deed of sale to justify such inference. That the seller could have validly sold her one-third undivided interest to appellant is no proof that she did choose to sell the same. Ab posse ad actu non valet illatio.

(2) While on the date of the sale to Estoque (Annex A) said contract may have been ineffective, for lack of power in the vendor to sell the specific portion described in the deed, the transaction was validated and became fully effective when the next day (October 29, 1951) the vendor, Crispina Perez, acquired the entire interest of her remaining co-owners (Annex B) and thereby became the sole owner of Lot No. 802 of the Rosario Cadastral survey (Llacer vs. Muñoz, 12 Phil. 328). Article 1434 of the Civil Code of the Philippines clearly prescribes that — .

When a person who is not the owner of a thing sells or alienates and delivers it, and later the seller or grantor acquires title thereto, such title passes by operation of law to the buyer or grantee."

Pursuant to this rule, appellant Estoque became the actual owner of the southeastern third of lot 802 on October 29, 1951. Wherefore, she never acquired an undivided interest in lot 802. And when eight years later Crispina Perez sold to the appellees Pajimula the western two-thirds of the same lot, appellant did not acquire a right to redeem the property thus sold, since their respective portions

were distinct and separate.

IN VIEW OF THE FOREGOING, the appealed order of dismissal is affirmed. Costs against appellant Estoque.1äwphï1.ñët

FIRST DIVISION

G.R. No. L-46296 September 24, 1991

EPITACIO DELIMA, PACLANO DELIMA, FIDEL DELIMA, VIRGILIO DELIMA, GALILEO DELIMA, JR., BIBIANO BACUS, OLIMPIO BACUS and PURIFICACION BACUS, petitioners, vs.HON. COURT OF APPEALS, GALILEO DELIMA (deceased), substituted by his legal heirs, namely: FLAVIANA VDA. DE DELIMA, LILY D. ARIAS, HELEN NIADAS, ANTONIO DELIMA, DIONISIO DELIMA, IRENEA DELIMA, ESTER DELIMA AND FELY DELIMA, respondents.

Gabriel J. Canete for petitioners.

Emilio Lumontad, Jr. for private respondents.

 

MEDIALDEA, J.:p

This is a petition for review on certiorari of the decision of the Court of Appeals reversing the trial court's judgment which declared as null and void the certificate of title in the name of respondents' predecessor and which ordered the partition of the disputed lot among the parties as co-owners.

The antecedent facts of the case as found both by the respondent appellate court and by the trial court are as follows:

During his lifetime, Lino Delima acquired Lot No. 7758 of the Talisay-Minglanilla Friar Lands Estate in Cebu by sale on installments from the government. Lino Delima later died in 1921 leaving as his only heirs three brothers and a sister namely: Eulalio Delima, Juanita Delima, Galileo Delima and Vicente Delima. After his death, TCT No. 2744 of the property in question was issued on August 3, 1953 in the name of the Legal Heirs of Lino Delima, deceased, represented by Galileo Delima.

On September 22, 1953, Galileo Delima, now substituted by respondents, executed an affidavit of "Extra-judicial Declaration of Heirs." Based on this affidavit, TCT No. 2744 was cancelled and TCT No. 3009 was issued on February 4,1954 in the name of Galileo Delima alone to the exclusion of the other heirs.

Galileo Delima declared the lot in his name for taxation purposes and paid the taxes thereon from 1954 to 1965.

On February 29, 1968, petitioners, who are the surviving heirs of Eulalio and Juanita Delima, filed with the Court of First Instance of Cebu (now Regional Trial Court) an action for reconveyance and/or partition of property and for the annulment of TCT No. 3009 with damages against their uncles Galileo Delima and Vicente Delima,. Vicente Delima was joined as party defendant by the petitioners for his refusal to join the latter in their action.

On January 16, 1970, the trial court rendered a decision in favor of petitioners, the dispositive portion of which states:

IN VIEW OF THE FOREGOING CONSIDERATIONS, the following are the declared owners of Lot No. 7758 of the Talisay-Minglanilla Friar Lands Estate presently covered by transfer Certificate of Title

No. 3009, each sharing a pro-indiviso share of one-fourth;

1) Vicente Delima (one-fourth)

2) Heirs of Juanita Delima, namely: Bibiano Bacus, Olimpio Bacus and Purificacion Bacus (on-fourth);

3) Heirs of Eulalio Delima, namely Epitacio, Pagano, Fidel, Virgilio and Galileo Jr., all surnamed Delima (one-fourth); and

4) The Heirs of Galileo Delima, namely Flaviana Vda. de Delima, Lily D. Arias, Helen Niadas and Dionisio, Antonio, Eotu Irenea, and Fely, all surnamed Delima (one-fourth).

Transfer Certificate of Title No. 3009 is declared null and void and the Register of Deeds of Cebu is ordered to cancel the same and issue in lieu thereof another title with the above heirs as pro-indiviso owners.

After the payment of taxes paid by Galileo Delima since 1958, the heirs of Galileo Delima are ordered to turn a over to the other heirs their respective shares of the fruits of the lot in question computed at P170.00 per year up to the present time with legal (interest).

Within sixty (60) days from receipt of this decision the parties are ordered to petition the lot in question and the defendants are directed to immediately turn over possession of the shares here awarded to the respective heirs.

Defendants are condemned to pay the costs of the suit.

The counterclaim is dismissed.

SO ORDERED. (pp. 54-55, Rollo)

Not satisfied with the decision, respondents appealed to the Court of Appeals. On May 19, 1977, respondent appellate court reversed the trial court's decision and upheld the claim of Galileo Delima that all the other brothers and sister of Lino Delima, namely Eulalio, Juanita and Vicente, had already relinquished and waived their rights to the property in his favor, considering that he (Galileo Delima) alone paid the remaining balance of the purchase price of the lot and the realty taxes thereon (p. 26, Rollo).

Hence, this petition was filed with the petitioners alleging that the Court of Appeals erred:

1) In not holding that the right of a co-heir to demand partition of inheritance is imprescriptible. If it does, the defenses of prescription and laches have already been waived.

2) In disregarding the evidence of the petitioners.(p.13, Rollo)

The issue to be resolved in the instant case is whether or not petitioners' action for partition is already barred by the statutory period provided by law which shall enable Galileo Delima to perfect his claim of ownership by acquisitive prescription to the exclusion of petitioners from their shares in the disputed property. Article 494 of the Civil Code expressly provides:

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

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

A donor or testator may prohibit partition for a period which shall not exceed twenty years.

Neither shall there be any partition when it is prohibited by law.

No prescription shall run in favor of a co-owner or co-heir against his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership.

As a rule, possession by a co-owner will not be presumed to be adverse to the others, but will be held to benefit all. It is understood that the co-owner or co-heir who is in possession of an inheritance pro-indiviso for himself and in representation of his co-owners or co-heirs, if, as such owner, he administers or takes care of the rest thereof with the obligation of delivering it to his co-owners or co-heirs, is under the same situation as a depository, a lessee or a trustee (Bargayo v. Camumot, 40 Phil, 857; Segura v. Segura, No. L-29320, September 19, 1988, 165 SCRA 368). Thus, an action to compel partition may be filed at any time by any of the co-owners against the actual possessor. In other words, no prescription shall run in favor of a co-owner against his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership (Del Blanco v. Intermediate Appellate Court, No. 72694, December 1, 1987, 156 SCRA 55).

However, from the moment one of the co-owners claims that he is the absolute and exclusive owner of the properties and denies the others any share therein, the question involved is no longer one of partition but of ownership (De Castro v. Echarri, 20 Phil. 23; Bargayo v. Camumot, supra; De los Santos v. Santa Teresa, 44 Phil. 811). In such case, the imprescriptibility of the action for partition can no longer be invoked or applied when one of the co-owners has adversely possessed the property as exclusive owner for a period sufficient to vest ownership by prescription.

It is settled that possession by a co-owner or co-heir is that of a trustee. In order that such possession is considered adverse to the cestui que trust amounting to a repudiation of the co-ownership, the following elements must concur: 1) that the trustee has performed unequivocal acts amounting to an ouster of the cestui que trust; 2) that such positive acts of repudiation had been made known to the cestui que trust; and 3) that the evidence thereon should be clear and conclusive (Valdez v. Olorga, No. L-22571, May 25, 1973, 51 SCRA 71; Pangan v. Court of Appeals, No. L-39299, October 18, 1988, 166 SCRA 375).

We have held that when a co-owner of the property in question executed a deed of partition and on the strength thereof obtained the cancellation of the title in the name of their predecessor and the issuance of a new one wherein he appears as the new owner of the property, thereby in effect denying or repudiating the ownership of the other co-owners over their shares, the statute of limitations started to run for the purposes of the action instituted by the latter seeking a declaration of the existence of the co-ownership and of their rights thereunder (Castillo v. Court of Appeals, No. L-18046, March 31, 1964, 10 SCRA 549). Since an action for reconveyance of land based on implied or constructive trust prescribes after ten (10) years, it is from the date of the issuance of such title that the effective assertion of adverse title for purposes of the statute of limitations is counted (Jaramil v. Court of Appeals, No. L-31858, August 31, 1977, 78 SCRA 420).

Evidence shows that TCT No. 2744 in the name of the legal heirs of Lino Delima, represented by Galileo Delima, was cancelled by virtue of an affidavit executed by Galileo Delima and that on February 4, 1954, Galileo Delima obtained the issuance of a new title in Ms name numbered TCT No.

3009 to the exclusion of his co-heirs. The issuance of this new title constituted an open and clear repudiation of the trust or co-ownership, and the lapse of ten (10) years of adverse possession by Galileo Delima from February 4, 1954 was sufficient to vest title in him by prescription. As the certificate of title was notice to the whole world of his exclusive title to the land, such rejection was binding on the other heirs and started as against them the period of prescription. Hence, when petitioners filed their action for reconveyance and/or to compel partition on February 29, 1968, such action was already barred by prescription. Whatever claims the other co-heirs could have validly asserted before can no longer be invoked by them at this time.

ACCORDINGLY, the petition is hereby DENIED and the assailed decision of the Court of Appeals dated May 19, 1977 is AFFIRMED.

SO ORDERED.

THIRD DIVISION

 

G.R. No. L-57062 January 24, 1992

MARIA DEL ROSARIO MARIATEGUI, ET AL., petitioners, vs.HON. COURT OF APPEALS, JACINTO MARIATEGUI, JULIAN MARIATEGUI and PAULINA MARIATEGUI, respondents.

Montesa, Albon & Associates for petitioners.

Parmenio B. Patacsil, Patacsil Twins Law Office for the heirs of the late Maria del Rosario Mariategui.

Tinga, Fuentes & Tagle Firm for private respondents.

 

BIDIN, J.:

This is a petition for review on certiorari of the decision * of the Court of Appeals dated December 24, 1980 in CA-G.R. No. 61841, entitled "Jacinto Mariategui, et al. v. Maria del Rosario Mariategui, et al.," reversing the judgment of the then Court of First Instance of Rizal, Branch VIII ** at Pasig, Metro Manila.

The undisputed facts are as follows:

Lupo Mariategui died without a will on June 26, 1953 (Brief for respondents, Rollo, pp. 116; 8). During his lifetime, Lupo Mariategui contracted three (3) marriages. With his first wife, Eusebia Montellano, who died on November 8, 1904, he begot four (4) children, namely: Baldomera, Maria del Rosario, Urbana and Ireneo. Baldomera died and was survived by her children named Antero, Rufina, Catalino, Maria, Gerardo, Virginia and Federico, all surnamed Espina. Ireneo also died and left a son named Ruperto. With his second wife, Flaviana Montellano, he begot a daughter named Cresenciana who was born on May 8, 1910 (Rollo, Annex "A", p. 36).

Lupo Mariategui and Felipa Velasco (Lupo's third wife) got married sometime in 1930. They had three children, namely: Jacinto, born on July 3, 1929, Julian, born on February 16, 1931 and Paulina, born on April 19, 1938. Felipa Velasco Mariategui died in 1941 (Rollo, Ibid).

At the time of his death, Lupo Mariategui left certain properties which he acquired when he was still unmarried (Brief for respondents, Rollo, pp. 116; 4). These properties are described in the complaint as Lots Nos. 163, 66, 1346 and 156 of the Muntinglupa Estate (Rollo, Annex "A", p. 39).

On December 2, 1967, Lupo's descendants by his first and second marriages, namely, Maria del Rosario, Urbana, Ruperto, Cresencia, all surnamed Mariategui and Antero, Rufina, Catalino, Maria, Gerardo, Virginia and Federico, all surnamed Espina, executed a deed of extrajudicial partition whereby they adjudicated unto themselves Lot No. 163 of the Muntinglupa Estate. Thereafter, Lot No. 163 was the subject of a voluntary registration proceedings filed by the adjudicatees under Act No. 496, and the land registration court issued a decree ordering the registration of the lot. Thus, on April 1, 1971, OCT No. 8828 was issued in the name of the above-mentioned heirs. Subsequently, the registered owners caused the subdivision of the said lot into Lots Nos. 163-A to 163-H, for which

separate transfer certificates of title were issued to the respective parties (Rollo, ibid).

On April 23, 1973, Lupo's children by his third marriage with Felipa Velasco (Jacinto, Julian and Paulina) filed with the lower court an amended complaint claiming that Lot No. 163 together with Lots Nos. 669, 1346 and 154 were owned by their common father, Lupo Mariategui, and that, with the adjudication of Lot No. 163 to their co-heirs, they (children of the third marriage) were deprived of their respective shares in the lots. Plaintiffs pray for partition of the estate of their deceased father and annulment of the deed of extrajudicial partition dated December 2, 1967 (Petition, Rollo, p. 10). Cresencia Mariategui Abas, Flaviana Mariategui Cabrera and Isabel Santos were impleaded in the complaint as unwilling defendants as they would not like to join the suit as plaintiffs although they acknowledged the status and rights of the plaintiffs and agreed to the partition of the parcels of land as well as the accounting of their fruits (Ibid., Rollo, p. 8; Record on Appeal, p. 4).

The defendants (now petitioners) filed an answer with counterclaim (Amended Record on Appeal, p. 13). Thereafter, they filed a motion to dismiss on the grounds of lack of cause of action and prescription. They specifically contended that the complaint was one for recognition of natural children. On August 14, 1974, the motion to dismiss was denied by the trial court, in an order the dispositive portion of which reads:

It is therefore the opinion of the Court that Articles 278 and 285 of the Civil Code cited by counsel for the defendants are of erroneous application to this case. The motion to dismiss is therefore denied for lack of merit.

SO ORDERED. (Ibid, p. 37).

However, on February 16, 1977, the complaint as well as petitioners' counterclaim were dismissed by the trial court, in its decision stating thus:

The plaintiffs' right to inherit depends upon the acknowledgment or recognition of their continuous enjoyment and possession of status of children of their supposed father. The evidence fails to sustain either premise, and it is clear that this action cannot be sustained. (Ibid, Rollo, pp. 67-68)

The plaintiffs elevated the case to the Court of Appeals on the ground that the trial court committed an error ". . . in not finding that the parents of the appellants, Lupo Mariategui and Felipa Velasco (were) lawfully married, and in holding (that) they (appellants) are not legitimate children of their said parents, thereby divesting them of their inheritance . . . " (Rollo, pp. 14-15).

On December 24, 1980, the Court of Appeals rendered a decision declaring all the children and descendants of Lupo Mariategui, including appellants Jacinto, Julian and Paulina (children of the third marriage) as entitled to equal shares in the estate of Lupo Mariategui; directing the adjudicatees in the extrajudicial partition of real properties who eventually acquired transfer certificates of title thereto, to execute deeds of reconveyance in favor, and for the shares, of Jacinto, Julian and Paulina provided rights of innocent third persons are not prejudiced otherwise the said adjudicatees shall reimburse the said heirs the fair market value of their shares; and directing all the parties to submit to the lower court a project of partition in the net estate of Lupo Mariategui after payment of taxes, other government charges and outstanding legal obligations.

The defendants-appellees filed a motion for reconsideration of said decision but it was denied for lack of merit. Hence, this petition which was given due course by the court on December 7, 1981.

The petitioners submit to the Court the following issues: (a) whether or not prescription barred private respondents' right to demand the partition of the estate of Lupo Mariategui, and (b) whether

or not the private respondents, who belatedly filed the action for recognition, were able to prove their successional rights over said estate. The resolution of these issues hinges, however, on the resolution of the preliminary matter, i.e., the nature of the complaint filed by the private respondents.

The complaint alleged, among other things, that "plaintiffs are the children of the deceased spouses Lupo Mariategui . . . and Felipa Velasco"; that "during his lifetime, Lupo Mariategui had repeatedly acknowledged and confirmed plaintiffs as his children and the latter, in turn, have continuously enjoyed such status since their birth"; and "on the basis of their relationship to the deceased Lupo Mariategui and in accordance with the law on intestate succession, plaintiffs are entitled to inherit shares in the foregoing estate (Record on Appeal, pp. 5 & 6). It prayed, among others, that plaintiffs be declared as children and heirs of Lupo Mariategui and adjudication in favor of plaintiffs their lawful shares in the estate of the decedent (Ibid, p. 10).

A perusal of the entire allegations of the complaint, however, shows that the action is principally one of partition. The allegation with respect to the status of the private respondents was raised only collaterally to assert their rights in the estate of the deceased. Hence, the Court of Appeals correctly adopted the settled rule that the nature of an action filed in court is determined by the facts alleged in the complaint constituting the cause of action (Republic vs. Estenzo, 158 SCRA 282 [1988]).

It has been held that, if the relief demanded is not the proper one which may be granted under the law, it does not characterize or determine the nature of plaintiffs' action, and the relief to which plaintiff is entitled based on the facts alleged by him in his complaint, although it is not the relief demanded, is what determines the nature of the action (1 Moran, p. 127, 1979 ed., citing Baguioro vs. Barrios, et al., 77 Phil. 120).

With respect to the legal basis of private respondents' demand for partition of the estate of Lupo Mariategui, the Court of Appeals aptly held that the private respondents are legitimate children of the deceased.

Lupo Mariategui and Felipa Velasco were alleged to have been lawfully married in or about 1930. This fact is based on the declaration communicated by Lupo Mariategui to Jacinto who testified that "when (his) father was still living, he was able to mention to (him) that he and (his) mother were able to get married before a Justice of the Peace of Taguig, Rizal." The spouses deported themselves as husband and wife, and were known in the community to be such. Although no marriage certificate was introduced to this effect, no evidence was likewise offered to controvert these facts. Moreover, the mere fact that no record of the marriage exists does not invalidate the marriage, provided all requisites for its validity are present (People vs. Borromeo, 133 SCRA 106 [1984]).

Under these circumstances, a marriage may be presumed to have taken place between Lupo and Felipa. The laws presume that a man and a woman, deporting themselves as husband and wife, have entered into a lawful contract of marriage; that a child born in lawful wedlock, there being no divorce, absolute or from bed and board is legitimate; and that things have happened according to the ordinary course of nature and the ordinary habits of life (Section 5 (z), (bb), (cc), Rule 131, Rules of Court; Corpus v. Corpus, 85 SCRA 567 [1978]; Saurnaba v. Workmen's Compensation, 85 SCRA 502 [1978]; Alavado v. City Gov't. of Tacloban, 139 SCRA 230 [1985]; Reyes v. Court of Appeals, 135 SCRA 439 [1985]).

Courts look upon the presumption of marriage with great favor as it is founded on the following rationale:

The basis of human society throughout the civilized world is that of marriage. Marriage in this jurisdiction is not only a civil contract, but it is a new relation, an institution in the maintenance of which the public is deeply interested. Consequently, every intendment of the law leans toward

legalizing matrimony. Persons dwelling together in apparent matrimony are presumed, in the absence of any counterpresumption or evidence special to that case, to be in fact married. The reason is that such is the common order of society and if the parties were not what they thus hold themselves out as being, they would be living in the constant violation of decency and of law . . . (Adong vs. Cheong Seng Gee, 43 Phil. 43, 56 [1922] quoted in Alavado vs. City Government of Tacloban, 139 SCRA 230 [1985]).

So much so that once a man and a woman have lived as husband and wife and such relationship is not denied nor contradicted, the presumption of their being married must be admitted as a fact (Alavado v. City Gov't. of Tacloban, supra).

The Civil Code provides for the manner under which legitimate filiation may be proven. However, considering the effectivity of the Family Code of the Philippines, the case at bar must be decided under a new if not entirely dissimilar set of rules because the parties have been overtaken by events, to use the popular phrase (Uyguangco vs. Court of Appeals, G.R. No. 76873, October 26, 1989). Thus, under Title VI of the Family Code, there are only two classes of children — legitimate and illegitimate. The fine distinctions among various types of illegitimate children have been eliminated (Castro vs. Court of Appeals, 173 SCRA 656 [1989]).

Article 172 of the said Code provides that the filiation of legitimate children may be established by the record of birth appearing in the civil register or a final judgment or by the open and continuous possession of the status of a legitimate child.

Evidence on record proves the legitimate filiation of the private respondents. Jacinto's birth certificate is a record of birth referred to in the said article. Again, no evidence which tends to disprove facts contained therein was adduced before the lower court. In the case of the two other private respondents, Julian and Paulina, they may not have presented in evidence any of the documents required by Article 172 but they continuously enjoyed the status of children of Lupo Mariategui in the same manner as their brother Jacinto.

While the trial court found Jacinto's testimonies to be inconsequential and lacking in substance as to certain dates and names of relatives with whom their family resided, these are but minor details. The nagging fact is that for a considerable length of time and despite the death of Felipa in 1941, the private respondents and Lupo lived together until Lupo's death in 1953. It should be noted that even the trial court mentioned in its decision the admission made in the affidavit of Cresenciana Mariategui Abas, one of the petitioners herein, that " . . . Jacinto, Julian and Paulina Mariategui ay pawang mga kapatid ko sa ama . . ." (Exh. M, Record on Appeal, pp. 65-66).

In view of the foregoing, there can be no other conclusion than that private respondents are legitimate children and heirs of Lupo Mariategui and therefore, the time limitation prescribed in Article 285 for filing an action for recognition is inapplicable to this case. Corollarily, prescription does not run against private respondents with respect to the filing of the action for partition so long as the heirs for whose benefit prescription is invoked, have not expressly or impliedly repudiated the co-ownership. In other words, prescription of an action for partition does not lie except when the co-ownership is properly repudiated by the co-owner (Del Banco vs. Intermediate Appellate Court, 156 SCRA 55 [1987] citing Jardin vs. Hollasco, 117 SCRA 532 [1982]).

Otherwise stated, a co-owner cannot acquire by prescription the share of the other co-owners absent a clear repudiation of co-ownership duly communicated to the other co-owners (Mariano vs. De Vega, 148 SCRA 342 [1987]). Furthermore, an action to demand partition is imprescriptible and cannot be barred by laches (Del Banco vs. IAC, 156 SCRA 55 [1987]). On the other hand, an action for partition may be seen to be at once an action for declaration of co-ownership and for segregation and conveyance of a determinate portion of the property involved (Roque vs. IAC, 165 SCRA 118 [1988]).

Petitioners contend that they have repudiated the co-ownership when they executed the extrajudicial partition excluding the private respondents and registered the properties in their own names (Petition, p. 16; Rollo, p. 20). However, no valid repudiation was made by petitioners to the prejudice of private respondents. Assuming petitioners' registration of the subject lot in 1971 was an act of repudiation of the co-ownership, prescription had not yet set in when private respondents filed in 1973 the present action for partition (Ceniza vs. C.A., 181 SCRA 552 [1990]).

In their complaint, private respondents averred that in spite of their demands, petitioners, except the unwilling defendants in the lower court, failed and refused to acknowledge and convey their lawful shares in the estate of their father (Record on Appeal, p. 6). This allegation, though denied by the petitioners in their answer (Ibid, p. 14), was never successfully refuted by them. Put differently, in spite of petitioners' undisputed knowledge of their relationship to private respondents who are therefore their co-heirs, petitioners fraudulently withheld private respondent's share in the estate of Lupo Mariategui. According to respondent Jacinto, since 1962, he had been inquiring from petitioner Maria del Rosario about their (respondents) share in the property left by their deceased father and had been assured by the latter (Maria del Rosario) not to worry because they will get some shares. As a matter of fact, sometime in 1969, Jacinto constructed a house where he now resides on Lot No. 163 without any complaint from petitioners.

Petitioners' registration of the properties in their names in 1971 did not operate as a valid repudiation of the co-ownership. In Adille vs. Court of Appeals (157 SCRA 455, 461-462 [1988]), the Court held:

Prescription, as a mode of terminating a relation of co-ownership, must have been preceded by repudiation (of the co-ownership). The act of repudiation, in turn, is subject to certain conditions: (1) a co-owner repudiates the co-ownership; (2) such an act of repudiation is clearly made known to the other co-owners; (3) the evidence thereon is clear and conclusive; and (4) he has been in possession through open, continuous, exclusive, and notorious possession of the property for the period required by law.

xxx xxx xxx

It is true that registration under the Torrens system is constructive notice of title, but it has likewise been our holding that the Torrens title does not furnish shield for fraud. It is therefore no argument to say that the act of registration is equivalent to notice of repudiation, assuming there was one, notwithstanding the long-standing rule that registration operates as a universal notice of title.

Inasmuch as petitioners registered the properties in their names in fraud of their co-heirs prescription can only be deemed to have commenced from the time private respondents discovered the petitioners' act of defraudation (Adille vs. Court of Appeals, supra). Hence, prescription definitely may not be invoked by petitioners because private respondents commenced the instant action barely two months after learning that petitioners had registered in their names the lots involved.

WHEREFORE, the petition is DENIED and the assailed decision of the Court of Appeals dated December 24, 1980 is Affirmed.

SO ORDERED.

FIRST DIVISION

 

G.R. No. 109910 April 5, 1995

REMEDIOS G. SALVADOR and GRACIA G. SALVADOR, petitioners, vs.COURT OF APPEALS, ALBERTO and ELPIA YABO, FRANCISCA YABO, et al., respondents.

 

DAVIDE, JR., J.:

Assailed in this petition is the legal determination made by the Court of Appeals on the issues of which portion of Lot No. 6080 and Lot No. 6180 formed part of the conjugal assets of the spouses Pastor Makibalo and Maria Yabo, and of whether or not the rights of Pastor's co-heirs in the estate of Maria Yabo were extinguished through prescription or laches.

Alipio Yabo was the owner of Lot No. 6080 and Lot No. 6180 situated in Barrio Bulua, Cagayan de Oro City, containing an area of 1,267 and 3,816 square meters, respectively. Title thereto devolved upon his nine children, namely, Victoriano, Procopio, Lope, Jose, Pelagia, Baseliza, Francisca, Maria, and Gaudencia, upon his death sometime before or during the second world war.

On 28 April 1976, Pastor Makibalo, who is the husband of Maria Yabo, one of Alipio's children, filed with the then Court of First Instance of Misamis Oriental a complaint, docketed as Civil Case No. 5000, against the spouses Alberto and Elpia Yabo for "Quieting of Title, Annulment of Documents, and Damages." In the complaint, he alleged that he owned a total of eight shares of the subject lots, having purchased the shares of seven of Alipio's children and inherited the share of his wife, Maria, and that except for the portion corresponding to Gaudencia's share which he did not buy, he occupied, cultivated, and possessed continuously, openly, peacefully, and exclusively the two parcels of land. He then prayed that he be declared the absolute owner of 8/9 of the lots in question. 1

On 8 October 1976, the grandchildren and great-grandchildren of the late Alipio Yabo 2 lodged with the same court a complaint for partition and quieting of title with damages, 3 docketed as Civil Case No. 5174, against Pastor Makibalo, Enecia Cristal, and the spouses Eulogio and Remedies Salvador. They alleged that Lot No. 6080 and Lot No. 6180 are the common property of the heirs of Alipio Yabo, namely, the plaintiffs, defendant Enecia Cristal, Maria Yabo and Jose Yabo, whose share had been sold to Alberto Yabo; that after Alipio's death, the spouses Pastor and Maria Makibalo, Enecia Cristal and Jose Yabo became the de facto administrators of the said properties; and that much to their surprise, they discovered that the Salvador spouses, who were strangers to the family, have been harvesting coconuts from the lots, which act as a cloud on the plaintiffs' title over the lots.

The plaintiffs then prayed that (a) they, as well as defendant Pastor Makibalo, in representation of his wife, and Enecia Cristal, in representation of Gaudencia, be declared as the owners of the lots; (b) the Salvador spouses be declared as having no rights thereto except as possible assignees of their co-defendants, Pastor Makibalo and Enecia Cristal; (c) the lots be partitioned according to law among the aforementioned co-owners; and (d) the defendants be made to pay for the value of the fruits they harvested from the lots and for moral and exemplary damages, attorney's fees, expenses of the litigation, and costs of the suit.

The two cases were consolidated and jointly heard by Branch 5 of the Court of First Instance of Cagayan de Oro City.

By evidence, Pastor, Makibalo sought to prove the following allegations:

He was married to Maria Yabo who died on 17 March 1962. 4 In August 1949, Jose and Victoriano, both surnamed Yabo, sold their respective shares in the disputed lots to one Pedro Ebarat, and in 1952 the latter sold both shares to Pastor Makibalo. 5 Ebarat formalized this conveyance by executing an Affidavit of Waiver and Quitclaim dated 30 May 1969 in favor of Pastor. 6

On 16 January 1951, the heirs of the late Lope Yabo sold Lope's shares in the litigated properties to one Dominador Canomon, 7 who, in turn, sold the same to Pastor. 8 Canomon afterwards executed an Affidavit of Waiver and Quitclaim in favor of the latter. 9

Pastor Makibalo likewise purchased the shares of Baseliza in the two lots in 1942, of Procopio in 1957, of Francisca in 1958, and of Pelagia in 1967. The only share he did not buy was that of Gaudencia. After every purchase, he took possession of the portions bought and harvested the products thereof. 10

In 1966, Pastor sold back to Alberto a portion of Lot No. 6180 which was formerly the share of Alberto's father, Procopio. 11

In December 1968, Pastor mortgaged the two lots to the spouses Eulogio and Remedios Salvador. 12

On 26 September 1978, he executed a document denominated as a "Confirmation and Quitclaim" whereby he waived all his rights, interests, and participation in the lots in favor of the Salvador spouses. 13

On the other hand, by their evidence, l4 the spouses Alberto and Elpia Yabo tried to prove that they had repurchased from Pastor Makibalo the share of Procopio, which was previously sold to Pastor, and had bought the shares of Jose and Maria. 15

Filoteo Yabo denied having sold the share of his father, Lope Yabo, in the contested lots and disowned his signature and those of his mother, brothers, and sisters appearing at the back of Exhibit "C". 16

Ignacio Yabo testified that his father, Victoriano Yabo, did not know how to write and sign his name. He further declared that he had no knowledge that his father affixed his thumbmark in the document marked as Exhibit "A" purporting to alienate his father's share in the disputed lots. l7

On 15 January 1983, the trial court rendered its decision 18 holding as follows:

Assuming that the thumbmark on the typewritten name "Jose Yabo" in Exh. 3 was that of Jose Yabo, Alberto Yabo and Elpia R. Yabo purchased the share of Jose Yabo in bad faith because they knew before and up to the execution of Exh. 3 on October 24, 1972 that Jose Yabo was no longer the owner of that area because from the documents she borrowed from Mrs. Salvador they came to know that Jose Yabo had sold his shares to Pedro Ebarat, and they have seen that Pastor Makibalo has been in possession of those shares together with the seven others exclusively as owner, he having mortgaged them to Mrs. Salvador.

As Jose Yabo was no longer the owner of the one-ninth (1/9) shares which he sold to Alberto Yabo and Elpia Yabo under Exh. 3, the sale is null and void, and Alberto and Elpia acquired nothing because Jose Yabo had no more title, right or interest to dispose of.

. . .

Pastor Makibalo had been in possession of Jose Yabo's share since 1949 after purchasing it from Ebarat, and has been in possession thereof up to September 26, 1978 when he sold it to the spouses Eulogio Salvador and Remedios Salvador, who are now in possession of the same.

Exh. A, evidencing the sale of Victoriano Yabo's share to Pedro Ebarat was identified by the latter who testified that he sold it to Pastor Makibalo in 1951. Exh. A is an ancient document — 1949 when the document came to existence up to now is more than 30 years, and the document had been in the possession of Pastor Makibalo, then Remedios Salvador who had interest in its preservation.

As regards the shares of Lope Yabo, the same had been sold by his surviving spouse Juana Legaspi, and his children Filoteo, Andresa, Jovita, Bonifacio, and Rundino for P105.00 on January 16, 1951 to Dominador Conomon (Exh. C and C-1), who in turn sold it to Pastor Makibalo in 1952, executing a formal Deed of Waiver and Quitclaim on May 30, 1969 (Exh. D).

Exh. C is an ancient document, being more than 30 years old and has been in the possession of Pastor Makibalo and then the spouses Eulogio and Remedios Salvador — who had an interest in its preservation. The claim of Filoteo Yabo that the signatures appearing in Exh. C are not his and those of his brothers and sisters are of no avail, for if they were not the ones who affixed those signatures and so they did not sell the shares of their father Lope Yabo, why did they not then take possession of said shares — they remained silent from 1951 to September 16, 1976 a period of 25 years. They are now [e]stopped by laches.

And as regards the shares of Baseliza, Francisca and Pelagia, there is no evidence presented to effectively rebut the testimony of Pastor Makibalo that he acquired the shares of Baseliza Yabo in 1942 by changing it with a buffalo; that he bought the shares of Francisca Yabo in 1958 and that he bought the shares of Pelagia Yabo in 1967; Pastor Makibalo had been in possession of these shares from the time he acquired them, continuously, adversely, openly, and peacefully, as owner up to the time he sold his rights and interest therein to the spouses Eulogio and Remedies Salvador. The heirs of Baseliza, Francisca and Pelagia have not taken any step to protect their rights over those shares for over 40 years in the case of Baseliza's share, for about 20 years in the case of Francisca's share, and for more than 10 years in the case of Pelagia's share. Laches, likewise has rendered their rights stale.

On March 10, 1966 Pastor Makibalo sold back to Alberto Yabo the share of Procopio Yabo in Lot 6180 (Exh. 1 and 2), but there is nothing to show that. Pastor Makibalo also sold back Procopio's share in Lot 6080.

So then, by purchase, Pastor Makibalo and Maria Yabo acquired the shares of Baseliza, Victoriano, Jose, Lope, Procopio and Francisca, or six (6) shares from Lots 6080 and 6180. These belonged to the conjugal partnership of Pastor Makibalo and Maria Yabo. Maria Yabo had also a share from Lots 6080 and 6180, and Pastor Makibalo acquired the shares of Pelagia Yabo in both Lots 6080 and 6180. All in all; Pastor Makibalo acquired eight shares in both Lot 6080 and 6180.

While Maria Yabo died on March 17, 1962, and so one-fourth (1/4) of the shares of Baseliza, Victoriano, Jose, Lope, and Francisca, or one-fourth of five-ninth (5/9) of both lots and one-fourth (1/4) of Lot 6080 should go to the children of the brothers and sisters of Maria Yabo by virtue of the provisions of Article 1001 of the New Civil Code, the latter have lost their rights thereto by laches for their inaction for a very long period and their rights have become stale. On the other hand, Pastor Makibalo who had been in possession of the whole of the eight shares in both Lots 6080 and 6180, enjoying the fruits thereof exclusively, uninterruptedly, publicly, peacefully, and continuously from the death of Maria Yabo up to the filing of the complaint in Civil Case No. 5174 on October 8, 1976, or a period of 14 years, had acquired title to the whole of the eight shares in Lot 6080 and seven shares in Lot 6180 (the share of Procopio in Lot 6180 had been sold back to Alberto Yabo).

IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered finding Pastor Makibalo, now Eulogio Salvador and Remedios Salvador the owner of eight (8) shares, equivalent to eight-ninth (8/9) of Lot No. 6080, and of seven (7) shares, equivalent to seven-ninth (7/9) of Lot No. 6180, and therefore, ordering the partition of Lot 6080 so that the one-ninth (1/9) alloted to Gaudencia Yabo will go to her heirs or their assigns, and the remaining eight-ninth (8/9) will go to the spouses Eulogio Salvador and Remedios Salvador, as successor of Pastor Makibalo, and the partition of Lot 6180 so that the seven-ninth (7/9) portion which formerly belonged to Baseliza, Victoriano, Jose, Lope, Maria, Francisca, and Pelagia will go to the spouses Eulogio and Remedios Salvador, the one-ninth (1/9) which formerly belonged to Procopio, will go to Alberto Yabo, and the remaining one-ninth (1/9) which formerly belonged to Gaudencia, will go to Gaudencia's heirs or their assigns.

Doc. No. 720, recorded on page 28 of Notarial Register No. VII, and acknowledged before Notary Public Isidro S. Baculio (Exh. E) [purportedly executed by Maria Yabo and Pastor Makibalo] is hereby declared null and void, and so the Office of the City Fiscal is directed to cause an investigation of this matter to find out the person or persons responsible for the falsification of the said document, and if the evidence warrants, to file the corresponding criminal action in court. The Office of the City Assessor of Cagayan de Oro City is, likewise, directed to cause the cancellation of Tax Declarations Nos. 33553, marked as Exh. H-3, 33557, marked as Exh. H-2, both in the name of Alberto Yabo, for having been issued on the basis of a falsified document. Let copies of this decision be furnished the Offices of the City Fiscal and City Assessor, both of Cagayan de Oro City.

No pronouncement as to damages, attorney's fees and costs.

SO ORDERED. 19

The defendants in Civil Case No. 5000 and the plaintiffs in Civil Case No. 5174 appealed from the decision to the Court of Appeals on 19 August 1983. 20

In its decision of 3 February 1993, 21 the Court of Appeals held that (a) Maria Yabo did not sell her share to Alberto and Elpia Yabo; (b) prescription and laches have not run against the private respondents with respect to the 1/9 share of Maria Yabo in the estate of her father and to her conjugal share in the portions acquired from her brothers and sisters; and (c) Procopio never sold his share in Lot No. 6080 to Pastor Makibalo. More specifically it stated:

Exh. E is the document found by the lower court to be a falsification. This finding appellants do not dispute and have not raised an error.

. . .

While acknowledging. that upon the death of Maria Yabo on March 17, 1962, one-half (1/2) of the share of Maria Yabo in Lots 6080 and 6180 and one-half (1/2) of Maria Yabo's conjugal share in the portions bought from Basiliza, Victoriano, Jose, Lope, Pelagia and Francisca should go to the children of the brothers and sisters of Maria in accordance with Article 1001 of the Civil Code, the lower court rule that said children have lost their rights by laches "for their inaction for a very long period and their rights have become stale" (Decision, p. 16; Record, Vol. 2, p. 158).

Appellants in their second assignment of error aver that this is an error.

We agree that the lower court erred.

While between March 17, 1962 when Maria Yabo died and October 8, 1976, when Civil Case No. 5174 for partition was filed, was a period of more than fourteen (14) years, that alone to our mind would

not suffice to establish laches or prescription. Upon the death of Maria Yabo, appellee Pastor Makibalo and appellants and the other children of the brothers and sisters of Maria, by operation of law become co-owners of the one-ninth (1/9) share of Maria as heir of her father Alipio and the conjugal share of Maria in the portions acquired from Basiliza, Victoriano, Jose, Lope, Pelagia and Francisca. Time alone is not a decisive factor. Appellee Pastor Makibalo, it must be remembered, is the husband of Maria and, therefore, an uncle in-law of appellants. In our culture, a demand by an heir or heirs for partition immediately upon the death of a relative is more often taken not as a legitimate assertion of a right but of something else, like greed. It must also be noted that the spouses, the appellee Pastor Makibalo and his deceased wife Maria, were childless and, therefore, appellants and the other children of the brothers and sisters of Maria must have felt that at any rate the property would go to them in the course of time. This probably explains why appellants started asserting their right over the property only after appellee Pastor Makibalo sold the same to the spouses Eulogio and Remedios Salvador. Besides, Lots 6080 and 6180 have a combined area only of 5,083 square meters and before the development of Northern Mindanao, and even in 1962 when Maria Yabo died, were not that valuable. This is shown by the fact that each heir sold his other share only for P110.00.

As we have said not time alone. In the early case of Cortes v. Oliva, 33 Phil. 480, it was held that"(o)rdinarily, possession by one joint owner will not be presumed to be adverse to the others, but will, as a rule, be held to be for the benefit of all. Much stronger evidence is required to show an adverse holding by one of several joint owners than by a stranger; and in such cases, to sustain a plea of prescription, it must always clearly appear that one who was originally a joint owner has repudiated the claims of his co-owners, and that his co-owners were apprised or should have been apprised of his claim of adverse and exclusive ownership before the alleged prescription began to run (at page 484). This ruling on prescription should apply with equal force to laches.

The third assignment of error challenges the finding of the lower court that "there is nothing to show that Pastor Makibalo also sold back Procopio's share in Lot 6080" (Decision, p. 16; Records, Vol. 2,p. 158).

Exhibits 1 and 2 cover only Procopio's share in Lot 6180. In other words, Exhibits 1 and. 2 conveyed back to Alberto Yabo only his father, Procopio's share in Lot 6180.

There is indeed no evidence that Pastor Makibalo also sold back to Alberto, his father Procopio's share in Lot 6080.

But from the evidence it appears that Procopio Yabo never sold his share in Lot 6080 to Pastor Makibalo. So there was no need to convey back Procopio's share in Lot 6080.

This fact is evident from the Affidavit of Confirmation of Sale (Exh. M) dated April 22, 1970, executed by Alberto Yabo, which is the very document relied upon by the lower court (Decision, p. 11; Record, Vol. 2, p. 153) in finding that "Alberto Yabo admitted that the share of his father Procopio Yabo was previously bought by Pastor Makibalo." A look at Exh. M, particularly par. 3 thereof, reveals that AlbertoYabo merely acknowledged or confirmed the sale of his father's share to Pastor Makibalo in Lot 6180. In effect, it at the same time proves that Lot 6080 was never sold by Procopio to appellee Pastor Makibalo; otherwise, it would have been included in the said Affidavit of Confirmation of Sale. The Deed of Absolute Sale (Exh. 2) subsequently executed by Pastor Makibalo in favor of Alberto Yabo on April 23, 1970, further proves this point, since the latter merely bought back what was previously sold, his father's share in Lot 6180. 22

The respondent court then concluded and held as follows:

In summary, appellee Pastor Makibalo and his assigns, the spouses Eulogio and Remedios Salvador, are entitled only to one-half (½) of the one-ninth (1/9) share of Maria and three-fourths (3/4) of the

six-ninth (6/9) shares acquired from Basiliza, Victoriano, Jose, Lope, Pelagia and Francisca. Accordingly, the partition should be done as follows:

(1) 1/9 of Lots 6080 end 6180 should be given to the heirs of Gaudencia Yabo or their successors and assigns;

(2) 1/9 of Lot 6180 should go to Alberto Yabo and his wife Elpia Yabo;

(3) 1/9 of Lot 6080 should be given to the heirs of Procopio Yabo and their successors end assigns, including Alberto Yabo;

(4) The 1/9 share of Maria Yabo in Lots 6080 and 6180 should be partitioned: One-half (1/2) for the surviving spouse Pastor Makibalo (now the spouses Eulogio Salvador and Remedios Salvador) and the other half for the children of the brothers and sisters of Maria Yabo in equal shares.

(5) The remaining 6/9, one-half (1/2) of which is conjugal between Maria Yabo and appellee Pastor Makibalo should be partitioned three-fourths (3/4) for Pastor Makibalo (now the spouses Eulogio Salvador and Remedios Salvador) and one-fourth (1/4) for the children of the brothers and sisters of Maria Yabo in equal shares.

(6) Jose Yabo if he is still alive should participate in the partition as heir of Maria otherwise he shall be represented by his children.

WHEREFORE, premises considered, subject to the modification in the partition, as indicated above, the decision appealed from is AFFIRMED, without pronouncement as to costs. The lower court is directed if necessary to fully effect the partition, to conduct further hearings and determine whether Jose Yabo is still alive and who are the children of the brothers and sisters of Maria Yabo. 23

Unable to obtain a reconsideration of the said-decision, Remedios Salvador, together with her daughter, Ma. Gracia Salvador, as one of the successors-in-interest of Eulogio M. Salvador who died during the pendency of the appeal, 24 elevated the case to this Court contending that the respondent court erred in ruling that: (1) the shares of Pelagia Yabo should be included in the partition; (2) prescription and laches have not run against the private respondents in relation to the 1/9 share of Maria Yabo in the estate of her father and to her ½ conjugal share in those acquired by purchase; (3) Procopio Yabo never sold to Pastor Makibalo his share in Lot No. 6080; and(4) Jose Yabo should be allowed to participate as heir of Maria even as he had openly rejected this option by refusing to participate in both civil cases. 25

Article 160 of the Civil Code provides that all property of the marriage is presumed to belong to the conjugal partnership, unless it be proved that it pertains .exclusively to the husband or to the wife. Since the shares of Jose, Victoriano, Lope, Baseliza, Procopio, and Francisca in Lot No. 6180 and Lot No. 6080 had been purchased by Pastor during his marriage with Maria, and there is no proof that these were acquired with his exclusive money, the same are deemed conjugal properties. Not forming part of the conjugal partnership are: (1) the 1/9 share inherited by Maria which remained as her exclusive property pursuant to Article 146 (2) of the Civil Code; (2) the 1/9 share of Gaudencia which was not sold to Pastor; and (3) the 1/9 share of Pelagia which was acquired by Pastor in 1967 or five years after the death of his wife and which was therefore his exclusive property.

There is, thus; merit in the petitioners' first assigned error. The Court of .Appeals should have excluded from the conjugal partnership the share of Pelagia which Pastor had acquired after his wife's death.

Upon Maria's death in 1962, the conjugal partnership of gains was dissolved. 26 Half of the conjugal properties, together with Maria's l/9 hereditary share in the disputed lots, constituted Maria's estate and should thus go to her surviving heirs. 27 Under Article 1001 of the Civil Code, her heirs are her spouse, Pastor Makibalo, who shall be entitled to-one-half (1/2) of her estate, her brother, Jose, and the children of her other brothers and sisters, who shall inherit the other half. There having been no actual partition of the estate yet, the said heirs became co-owners thereof by operation of law. 28

We now determine whether prescription and laches can be applied against the co-heirs of Pastor Makibalo.

It has been said that Article 494 of the Civil Code which provides that each co-owner may demand at any time the partition of the common property implies that an action to demand partition is imprescriptible or cannot be barred by laches. 29 The imprescriptibility of the action cannot, however, be invoked when one of the co-owners has possessed the property as exclusive owner and for a period sufficient to acquire it by prescription. 30

What needs to be addressed first is whether or not Pastor Makibalo has acquired by prescription the shares of his other co-heirs or co-owners. Prescription as a mode of acquiring ownership requires a continuous, open, peaceful, public, and adverse possession for a period of time fixed by law.

This Court has held that the possession of a co-owner is like that of a trustee and shall not be regarded as adverse to the other co-owners but in fact as beneficial to all of them. 31 Acts which may be considered adverse to strangers may not be considered adverse insofar as co-owners are concerned. A mere silent possession by a co-owner, his receipt of rents, fruits or profits from the property, the erection of buildings and fences and the planting of trees thereon, and the payment of land taxes, cannot serve as proof of exclusive ownership, if it is not borne out by clear and convincing evidence that he exercised acts of possession which unequivocably constituted an ouster or deprivation of the rights of the other co-owners. 32

Thus, in order that a co-owner's possession may be deemed adverse to the cestui que trust or the other co-owners, the following elements must concur: (1) that he has performed unequivocal acts of repudiation amounting to an ouster of the cestui que trust or the other co-owners; (2) that such positive acts of repudiation have been made known to the cestui que trust or the other co-owners; and (3) that the evidence thereon must be clear and convincing. 33

In Pangan vs. Court of Appeals, 34 this Court had occasion to lay down specific acts which are considered as acts of repudiation:

Filing by a trustee of an action in court against the trustor to quiet title to property, or for recovery of ownership thereof, held in possession by the former, may constitute an act of repudiation of the trust reposed on him by the latter.

The issuance of the certificate of title would constitute an open and clear repudiation of any trust, and the lapse of more than 20 years, open and adverse possession as owner would certainly suffice to vest title by prescription.

An action for the reconveyance of land based on implied or constructive trust prescribes within 10 years. And it is from the date of the issuance of such title that the effective assertion of adverse title for purposes of the statute of limitation is counted.

The prescriptive period may only be counted from the time petitioners repudiated the trust relation in 1955 upon the filing of the complaint for recovery of possession against private respondents so that

the counterclaim of the private respondents contained in their amended answer wherein they asserted absolute ownership of the disputed realty by reason of the continuous and adverse possession of the same is well within the l0-year prescriptive period.

There is clear repudiation of a trust when one who is an apparent administrator of property causes the cancellation of the title thereto in the name of the apparent beneficiaries and gets a new certificate of title in his own name.

It is only when the defendants, alleged co-owners of the property in question, executed a deed of partition and on the strength thereof obtained the cancellation of the title in the name of their predecessor and the issuance of a new one wherein they appear as the new owners of a definite area each, thereby in effect denying or repudiating the ownership of one of the plaintiffs over his alleged share in the entire lot, that the statute of limitations started to run for the purposes of the action instituted by the latter seeking a declaration of the existence of the co-ownership and of their rights thereunder.

The records do not show that Pastor Makibalo adjudicated to himself the whole estate of his wife by means of an affidavit filed with the Office of the Register of Deeds as allowed under Section 1 Rule 74 of the Rules of Court, or that he caused the issuance of a certificate of title in his name or the cancellation of the tax declaration in Alipio's name and the issuance of a new one in his own name. The only act which may be deemed as a repudiation by Pastor of the co-ownership over the lots is his filing on 28 April 1976 of an action to quiet title (Civil Case No. 5000). The period of prescription started to run only from this repudiation. However, this was tolled when his co-heirs, the private respondents herein, instituted on 8 October 1976 an action for partition (Civil Case No. 5174) of the lots. Hence, the adverse possession by Pastor being for only about six months would not vest in him exclusive ownership of his wife's estate, and absent acquisitive prescription of ownership, laches and prescription of the action for partition will not lie in favor of Pastor. 35

The issue presented by the petitioners in their third assigned error involves a question of fact. This Court is not ordinarily a trier of facts, its jurisdiction being limited to errors of law. Thus; the findings of facts of the Court of Appeals are as a rule deemed conclusive. However, when the findings of facts of the appellate court vary with those of the trial court, this Court has to review the evidence in order to arrive at the correct findings. 36

In the instant case, a conflict in the findings of facts of the lower courts exists. The trial court found that Pastor was the owner of Procopio's share in Lot No. 6080, as there was nothing to show that he sold it back to Alberto Yabo. The respondent court on the other hand, held that Procopio Yabo never sold his share in Lot No. 6080 to pastor, thus, there was no need to convey it back to Procopio's son, Alberto.

At this juncture, it is worthy to quote pertinent portions of the testimony of Pastor Makibalo:

COURT: (To the witness.)

Q Where is AlbertoYabo living?

A It is there in their house at Bulua.

ATTY. JARAULA: (Continuing.)

Q In whose land?

A Alipio Yabo's land.

Q What relation has that land to the two (2) parcels of land under litigation?

A I bought already.

Q So, will you please tell the Honorable Court, why Alberto Yabo is staying on that land when you said you have bought that land already.

A So, I sold back a portion to them because they requested me.

COURT: (To the witness.)

Q When was that when you said that Alberto Yabo requested a portion?

A In 1967.

COURT:

Q Did you give that portion which they requested?

A Their share being inherited from their father Procopio was the portion they requested.

COURT

Q Yes. Did you grant that?

A Yes.

Q That is the area you sold to Alberto Yabo, pursuant to his request?

A Because that was the land they inherited from their father that was what they requested.

Q All right. So that, the area now being occupied by Alberto Yabo?

A Yes. That land in the Centro.

Q This is now identified as Lot No. 6180?

A Yes, Your Honor.

ATTY. JARAULA: (Continuing.)

Q Where did you sign a document ceding that portion requested by Alberto Yabo?

A We did not make any receipt in favor of AlbertoYabo because they got only the receipt of that of his

father.

COURT: (To the witness.)

Q You mean to say, that the receipt which Procopio signed when he sold his share for [sic] the document which Alberto got?

A Yes.

COURT:

All right.

ATTY. JARAULA (Continuing.)

Q Now, for how much did you buy. the shares of each of the brothers and sisters of your wife?

A One Hundred Ten (P110.00) Pesos.

Q When you sold back to Alberto Yabo, the portion corresponding to the share of his father Procopio in the Poblacion, how much did he pay you?

A The same.

Q By the same, you are referring by the same amount of One Hundred Ten (P110.00) Pesos?

A Yes, Sir. The same amount. 37

The petitioners contend that the sales or conveyances made by Alipio's heirs were for their consolidated shares in the two lots. If this was so, and the receipt which Procopio signed when he sold his consolidated share to Pastor was turned over to Alberto, the inevitable conclusion is that Alberto redeemed his father's share in both lots, not only in Lot: No. 6180. This conclusion is further buttressed by the above-quoted testimony of Pastor that he bought the shares (consolidated) of each of Alipio's heirs for P110.00 and that when he sold back to Alberto the former share of Procopio, Alberto paid him the same amount of P110.00.

However, since the share of Procopio in the two litigated parcels of land was purchased by Pastor during his marriage with Maria, the same became conjugal property, and half of it formed part of Maria's estate upon her death in 1962. Accordingly, Pastor's resale in favor of Alberto could only be valid with respect to Pastor's one-half (1/2) conjugal share and one-fourth (1/4) hereditary share as heir of Maria. 38 The remaining one-fourth (1/4) should go to Pastor's co-heirs, the private respondents herein.

Now on the fourth assigned error.

Section 1, Rule 69 of the Rules of Court requires that all persons interested in the land sought to be partitioned must be joined as defendants in the complaints. All co-owners and persons having an interest in the property are considered indispensable parties and an action for partition will not lie without the joinder of said persons. 39 It has been held that the absence of an indispensable party in a

case renders ineffective all the proceedings subsequent to the filing of the complaint including the judgment. 40

It must be recalled that in Civil Case No. 5174 the private respondents sought the partition of the two lots based on the co-ownership which arose from the right of succession to Alipio's estate. Since Jose Yabo confirmed, through his thumbmark in the verification of the complaint, that he had already parted with his share in Alipio's estate, he in effect admitted that he had ceased to be a co-owner of the two lots which comprised his father's estate. Thus, his non-joinder as a party-plaintiff in the complaint would appear to be proper. He does not, as well, appear to be an indispensable party in Civil Case No. 5000.

As it turned out, however, the evidence and the issues which cropped up rendered imperative the determination of the conjugal assets of Pastor Makibalo and Maria Yabo and the partition of the latter's estate among her heirs. Her estate consists of one-half(½) of the conjugal properties, which should then be divided pursuant to Article 1001 of the Civil Code since the marriage produced no child; thus: one-half (½) to Pastor, and the other half to her brother Jose, and to her nephews and nieces.

Insofar as the partition of Maria Yabo's estate is concerned, Jose is an indispensable party. Strictly, the rule on indispensable parties may bar a partition of Maria's estate. Considering, however, that such estate or its partition are but incidents in Civil Case No. 5000 and Civil Case No. 5174, and the parties have not offered any objection to the propriety of the determination and partition of her estate, then in the light of Section 11 of Rule 3 41 and Sections 1 and 5, Rule 10 42 of the Rules of Court, and following the rulings of this Court in the 1910 case of Alonso vs. Villamor 43 and the 1947 case of Cuyugan vs. Dizon, 44 an amendment of the complaint in Civil Case No. 5174 to implead Jose Yabo as party plaintiff would be in order.

In Alonso, it was held that under Section 110 of the Code of Civil Procedure — whose first paragraph is substantially the same as the aforesaid Section 1 of Rule 10 — and Section 503 thereof, this Court "has full power, apart from that power and authority which is inherent, to amend the process, pleadings, proceedings, and decision in this case by substituting, as party plaintiff, the real party in interest." Our ruling in Cuyugan states:

We, however, do not believe that the case should be dismissed for plaintiff's failure to join her husband. (Sec. 11, Rule 2, Rules of Court). Nor should the case be remanded to the court below and a new trial ordered on this account. The complaint may and should be amended here, to cure the defect of party plaintiffs, after final decision is rendered. Section 11, Rule 2, and Section 2, Rule 17, explicitly authorize such procedure. As this Court had occasion to say in Quison vs. Salud, (12 Phil., 109, 116), "a second action would be but a repetition of the first and would involve both parties, plaintiffs and defendant, in much additional expense and would cause much delay, in that way defeating the purpose of the section, which is expressly stated to be "that the actual merits of the controversy may speedily be determined without regard to technicalities and in the most expeditious and inexpensive manner." (See also Diaz vs. De la Rama, 73 Phil., 104)

To avoid further delay in the disposition of this case, we declare Civil Case No. 5174 as thus duly amended. Consequently, Jose Yabo may participate in the partition of the estate of Maria Yabo. The fourth assigned error must then be rejected.

In view of the foregoing disquisitions, the appealed judgment should be modified as follows: (a) the former 1/9 share of Pelagia Yabo in Lots No. 6180 and 6080 which she sold to Pastor should be treated as the latter's exclusive property which should now pertain to the petitioners, his successors-in-interest; and (b) the former 1/9 share of Procopio Yabo in both lots should be divided as follows: 3/4 (respondent Pastor's 1/2 conjugal share and 1/4 representing his share therein as Maria's heir) for the spouses Alberto and Elpia Yabo, and 1/4 (representing the share therein of Maria's collateral

relatives as Maria's heirs) for the private respondents, including Alberto and Jose Yabo. The partition of the two lots in controversy should therefore be made in this wise:

(1) 1/9 share of Gaudencia Yabo should be allotted to her heirs or successors-in-interest;

(2) 1/9 share formerly belonging to Pelagia Yabo — to the petitioners as successors-in-interest of Pastor Makibalo;

(3) 1/9 hereditary share of Maria Yabo to be divided as follows:

(a) 1/2 for the petitioners (as successors-in-interest of Pastor Makibalo), and

(b) 1/2 for the private respondents, including Jose Yabo or his heirs;

(4) 1/9 share formerly belonging to Procopio Yabo to be divided thus:

(a) 3/4 for Spouses Alberto and Elpia Yabo, and

(b) 1/4 for the other private respondents, including Jose Yabo or his heirs;

(5) 5/9 shares which became the conjugal properties of Pastor Makibalo and Maria Yabo to be divided thus:

(a) 3/4 for the petitioners (as successors-in-interest of Pastor Makibalo), and

(b) ¼ for the private respondents, including Jose Yabo or his heirs.

In sum, Lots Nos. 6180 anid 6080 should be partitioned as follows:

1/9 or 4/36 — to Guadencia Yabo's heirs or successors-in-interest;

3/4 of 1/9 or 3/36 — to the spouses Alberto and Elpina Yabo;

8/36 — to the private respondents, including Jose Yabu or his heirs;

21/36 — to the petitioners as successors-in-interest of Pastor Makibalo.

WHEREFORE, the challenged decision of the Court of Appeals of 8 February 1993 in CA-G.R. CV No. 12839 is AFFIRMED, subject to the modifications indicated above. Upon the finality of this decision, let this case be forthwith remanded to the court a quo for further proceedings on the partition of Lots Nos. 6180 and 6080 in conformity with this decision.

No pronouncement as to costs.

SO ORDERED.

EN BANC

DECISION

September 29, 1967

G.R. No. L-22621JOSE MARIA RAMIREZ, plaintiff-appellee,vs.JOSE EUGENIO RAMIREZ, RITA D. RAMIREZ, BELEN T. RAMIREZ, DAVID MARGOLIES, MANUEL UY and SONS, INC., BANK OF THE PHILIPPINE ISLANDS, in its capacity as judicial administrator of the Testate Estate of the late Jose Vivencio Ramirez, defendants-appellants, ANGELA M. BUTTE, defendant-appellee.

Sycip, Salazar, Luna and Associates for plaintiff-appellee.Ramirez and Ortigas for defendants-appellants.

, J.:

Appeal by the defendants from a decision of the Court of First Instance of Manila.

Plaintiff, Jose Maria Ramirez, brought this action1 against defendants Jose Eugenio Ramirez, Rita D. Ramirez, Belen T. Ramirez, David Margolies, Manuel Uy & Sons, Inc., the Estate of the late Jose Vivencio Ramirez represented by its judicial administrator, the Bank of the Philippine Islands, and Angela M. Butte — hereinafter referred to collectively as defendants — for the partition of a parcel of land situated at the Northwestern corner of Escolta street and Plaza Sta. Cruz, Manila — otherwise known as Lot 1 of Block 2120 of the Cadastral Survey of Manila and more particularly described in Transfer Certificate of Title No. 53946 of the Register of Deeds for said City — and belonging pro indiviso to both parties, one-sixth (1/6) to the plaintiff and five-sixths (5/6) to the defendants.

Manuel Uy & Sons expressed its conformity to the partition, "if the same can be done without great prejudice to the interests of the parties." Defendant Butte agreed to the partition prayed for. The other defendants objected to the physical partition of the property in question, upon the theory that said partition is "materially and legally" impossible and "would work great harm and prejudice to the co-owners." By agreement of the parties the lower Court referred the matter to a Commission composed of:

(1) Delfin Gawaran, Deputy Clerk of said court, as Chairman,

(2) Artemio U. Valencia, President of the Manila Board of Realtors, as commissioner for plaintiff, and

(3) Ramon F. Cuervo, President of the Perpetual Investment Corporation, Inc., as commissioner for defendants,

to determine whether the property is susceptible of partition, and submit a plan therefor, if feasible, as well as to report thereon. Subsequently, the commissioners submitted their individual reports with their respective plans for the segregation of plaintiff's share.

After due hearing, the Court rendered a decision declaring that plaintiff is entitled to the segregation of his share, and directing that the property be partitioned in accordance with the plan submitted by commissioner Valencia, and that the expenses incident thereto be paid by both parties proportionately. Hence, this appeal by, the defendants, except Mrs. Butte. Appellants maintain that the lower court has erred: 1) in holding that said property is legally susceptible of physical division; 2) in accepting the recommendation of commissioner Valencia, instead of that of commissioner Cuervo, or a proposal made by the very plaintiff; and 3) in not ordering that the incidental expenses

be borne exclusively by him.

We find no merit in the appeal.

With respect to the first alleged error, it is urged that a physical division of the property will cause "inestimable damage" to the interest of the co-owners. No evidence, however, has been introduced, or sought to be introduced, in support of this allegation. Moreover, the same is predicated upon the assumption that a real estate suitable for commercial purposes — such as the one herein sought to be partitioned — is likely to suffer a proportionately great diminution in value when its area becomes too small. But, then, if plaintiff's share of 260.26 square meters were segregated from the property in question, there would still remain a lot of 1,301.34 square meters for appellants herein and Mrs. Butte. A real estate of this size, in the very heart of Manila, is not, however, inconsequential, in comparison to that of the present property of the community. In other words, we do not believe that its value would be impaired, on account of the segregation of plaintiff's share, to such an extent as to warrant the conclusion that the property is indivisible.

Appellants argue that, instead of making the aforementioned segregation, plaintiff's share should be sold to them. In support of this pretense, they cite the provision of Article 495 of our Civil Code, to the effect that:

. . . Notwithstanding the provisions of the preceding article, the co-owners cannot demand a physical division of the thing owned in common, when to do so would render it unserviceable for the use for which it is intended. But the co-ownership may be terminated in accordance with article 498.

They apparently assume, once again, that the alleged "inestimable damage" to be suffered by the property, if plaintiff's share were segregated, is equivalent to rendering it "unserviceable for the use for which it is intended." Independently of the fact that the minor premise of this syllogism — the alleged "inestimable damage" — has not been established, the conclusion drawn by appellants does not follow necessarily. Indeed, the record shows that there are two (2) buildings on the land in question, namely: 1) a two-storey commercial building — known as "Sta. Cruz Building" — abutting on the one (1) side, 2 on the Escolta, and, on the other 3 on Plaza Santa Cruz; and 2) a small two-storey residential building, on the Northwestern end of the lot, and behind the first building, adjoining the Estero de la Reina, which constitutes the Southwestern boundary of the property. There is nothing to show that, after segregating plaintiff's share, the buildings left on the remaining 1,301.34 square meters, representing defendants' share, would be unserviceable, either for commercial or for residential purposes. On the contrary, it seems obvious that plaintiff would not insist upon the partition prayed for, if his share 4 were unserviceable for either — particularly the commercial — purpose. In fact, every one of the aforementioned commissioners, including the one representing defendants herein, recommended the segregation of plaintiff's share. The commissioners merely failed to agree on the precise configuration thereof.

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

The record does not show that this offer of the plaintiff had not been "taken into consideration" by the lower court. Moreover, defendants had not accepted it. And neither do they accept it now, for they would want the plaintiff to pay a price higher than that offered by him. Upon the other hand, the

disadvantage resulting to the defendants from the existence of said lot of 169 square meters, behind that awarded to the plaintiff, is offset by the fact that the remaining portion of the land in question — representing defendants' collective share — has, in addition to a frontage of around 40 meters on Plaza Santa Cruz, a frontage of 24.13 meters on Escolta Street, which apart from being, admittedly, the most valuable one, is totally denied to the plaintiff. Then, again the Cuervo plan giving plaintiff a 6.14 meters frontage of Plaza Sta. Cruz, goes all the way down to the Western end of the property, the Estero de la Reina, and would require a partition of the residential building, on that part of the property in question, which the very plaintiff says is indivisible, because it would render said building "unserviceable for the purpose for which it is intended." 8

As regards the last alleged error, it is obvious that the segregation of plaintiff's share inures to the benefit not only of the plaintiff, but, also, of the defendants, and that both should, consequently, defray the incidental expenses.

WHEREFORE, the decision appealed from is hereby the costs of this instance against herein defendants-appellants. It is so ordered.

FIRST DIVISION

 

G.R. No. L-45142 April 26, 1991

SIMPROSA VDA. DE ESPINA, RECAREDO ESPINA, TIMOTEO ESPINA, CELIA ESPINA, GAUDIOSA ESPINA and NECIFORA ESPINA, petitioners, vs.THE HON. OTILIO ABAYA and SOFIA ESPINA and JOSE ESPINA, respondents.

Cipriano C. Alvizo, Sr. for private respondents.

 

MEDIALDEA, J.:p

This is a petition for certiorari with prayer for the issuance of a writ of preliminary injunction seeking the nullification of the orders issued by the respondent Judge Otilio Abaya, in his capacity as the presiding judge of the Court of First Instance of Surigao del Sur, Branch II, Lianga, Surigao del Sur in Civil Case No. L-108, entitled "Simprosa Vda. de Espina, et. al. v. Sofia Espina, et. al." dated May 9, 1975 dismissing the complaint for partition; July 25, 1975 denying the motion for reconsideration; August 13, 1975 denying the second motion for reconsideration and March 15, 1976 denying plaintiffs' notice of appeal.

The antecedent facts are as follows:

Marcos Espina died on February 14, 1953 and was survived by his spouses, Simprosa Vda. de Espina and their children namely, Recaredo, Timoteo, Celia, Gaudiosa, Necifora, Sora and Jose, all surnamed Espina. Decedent's estate comprises of four (4) parcels of land located at the Municipality of Barobo Province of Surigao del Sur.

On August 23, 1973 an action for partition of the aforementioned parcels of land was filed by petitioners Simprosa and her children Recaredo, Timoteo, Celia, Gaudencia and Necifora.

The complaint alleges that parcel No. 1 is the exclusive property of the deceased, hence the same is owned in common by petitioners and private respondents in eight (8) equal parts, while the other three (3) parcels of land being conjugal properties, are also owned in common, one-half (1/2) belongs to the widow Simprosa and the other half is owned by her and her children in eight (8) equal parts.

It also alleges that parcel No. 1 has been subdivided into two lots. Lot No. 994 PL8-44 is covered by Original Certificate of Title No. 5570 in the name of one of the heirs, Sofia Espina, who acquired the title as a trustee for the beneficiaries or heirs of Marcos Espina, while lot No. 1329 PCS-44 is covered by Original Certificate of Title No. 3732 issued in the name of one of the heirs, Jose Espina as trustee for the heirs of Marcos Espina. Said parcel of land is in the possession of petitioners and private respondents who have their respective houses thereon.

Simprosa presently occupies parcel No. 2 while parcel No. 3 is occupied by Timoteo, although the same is actually titled in the name of Sofia. Parcel No. 4 is occupied by Recaredo.

Petitioners have several times demanded the partition of the aforementioned properties, but notwithstanding such demands private respondents refused to accede.

Private respondents alleged in their answer that in or about April, 1951, the late Marcos Espina and his widow, Simprosa, together with their children made a temporary verbal division and assignment of shares among their children. After the death of Marcos, the temporary division was finalized by the heirs. Thereafter the heirs took immediate possession of their respective shares on April 20, 1952. Private respondents took actual physical possession of their respective shares including the portions ceded to them by Simprosa upon their payment of P50.00 each per quarter starting April, 1952 until the latter's death pursuant to their contract of procession The assignment of shares was as follows:

(a) To the surviving spouses, (sic) Simprosa Vda. de Espina, herein plaintiffs, one-half (1/2) of the parcel of land adjudicated to each of said plaintiffs-heirs and defendants;

(b) To each of the following compulsory heirs, to wit:

1. To Recaredo (sic) Espina, one-half (1/2) portion which contains an area of one and three-fourths (1 3/4) hectares and which forms part of Parcel 4 whose description is given in paragraph III of the complaint, the said Parcel IV has been in the possession of both Recaredo Espina and plaintiff Simprosa Vda. de Espina from April 20, 1952 until the present time;

2. To Timoteo Espina, one half (1/2) portion which contains an area of not less than one-half (1/2) hectare and which forms part of Parcel 3 whose description is given in paragraph III of the complaint, the said Parcel III was originally assigned by Marcos Espina who thereupon obtained an Original Certificate of Title in her (sic) name but was finally adjudicated to said Timoteo Espina in April, 1952, the other half (1/2) portion of which parcel III was the share of the surviving spouses (sic), Simprosa Vda. de Espina, and said Parcel III has been in the possession of said Timoteo Espina and Simprosa Vda. de Espina from April, 1952 until the present time as their share;

3. To Cecilia (sic) Espina, Gaudiosa Espina and Necifora Espina, one-half (1/2) portion, share and share alike which contains two (2) hectares and which forms part of Parcel II whose description is given in paragraph III of the complaint, the other half (1/2) of said Parcel III (sic) is the share of the surviving spouses (sic) Simprosa Vda. de Espina, and said Parcel III (sic) has been in the possession of said Cecilia. (sic) Espina, Gaudiosa Espina and Necifora Espina and Simprosa Vda. de Espina from April, 1952 until the present time;

4. To Sofia Espina, one-half (1/2) portion of the parcel of land included in the deception of Parcel 1 in paragraph III of the complaint, the other half (1/2) of said parcel being the share of the surviving spouses (sic) Simprosa Vda. de Espina and having been ceded by said Simprosa Vda. de Espina to said Sofia Espina for a valuable consideration payable quarterly at the rate of P50.00 beginning April, 1952 until her death, and said Sofia Espina has been regularly paying to said Simprosa Vda. de Espina quarterly from April, 1952 the said amount of P50.00 until the present time, and by virtue of said agreement, Sofia Espina obtained Original Certificate of Title in her name of said parcel of land which is included in the description of said parcel 1, as her exclusive property;

5. To Jose Espina, one-half (1/2) portion of the other parcel of land included in the description of Parcel 1 in paragraph 1 of the complaint, the other half (1/2) of said parcel being the share of the surviving spouses (sic) Simprosa Vda. de Espina and having been coded (sic) by said Simprosa Vda. de Espina to said Jose Espina for a valuable consideration payable quarterly at the rate of P50.00 beginning April, 1952 until her death, and said Jose Espina has been regularly quarterly paying to said Simprosa Vda. de Espina from April, 1952 until the present time, the said amount of P50.00, and by virtue of said agreement, Jose Espina obtained Original Certificate of Title in his name of said parcel of land which is included in the description of said Parcel 1 as his exclusive property. ( Rollo,

pp. 27-28)

On February 13, 1974 private respondents filed a motion to dismiss the complaint alleging the following grounds, to wit:

I

THAT THE FACTS ALLEGED IN THE COMPLAINT FAIL TO CONFER UPON THE COURT COMPLETE AND LAWFUL JURISDICTION OVER THE CASE FOR NON-COMPLIANCE WITH THE CONDITION SINE QUA NON CONCERNING SUIT BETWEEN MEMBERS OF THE SAME FAMILY.

xxx xxx xxx

II

THAT THE CAUSE OF ACTION IS BARRED BY . . . . STATUTE OF LIMITATIONS.

xxx xxx xxx

III

THAT THE PLAINTIFFS HAS NO LEGAL CAPACITY TO SUE, (Motion to Dismiss Complaint, pp. 1-5; Rollo, pp. 34-38)

xxx xxx xxx

On May 9, 1975 the trial court granted the motion and thereafter dismissed the complaint. On May 23, 1975 petitioners filed a motion for reconsideration on the following grounds, to wit:

1. THAT THE ORDER OF DISMISSAL HAS NO LEGAL BASIS IN FACT AND IN LAW.

2. THAT THE STATUTE OF LIMITATIONS IS NOT APPLICABLE IN THE CASE AT BAR. (Rollo, p. 50)

However, petitioners' motion was denied in an order dated July 23, 1975. On August 11, 1975 petitioners filed another motion for reconsideration stressing that they were denied due process when their motion was not heard. Again said motion was denied on August 13, 1975.

Thereafter, petitioners filed their notice of appeal on September 11, 1975 and a motion for extension of time to file their Record on Appeal on September 18, 1975.

On March 15, 1976, the respondent judge disapproved petitioners' Record on Appeal and appeal bond on the ground that the notice of appeal was filed out of time. Hence, this petition. The petitioners raised four (,41) assignment of errors:

1. Whether or not an action for partition among co-heirs prescribes.

2. Whether or not an oral partition among co-heirs is valid.

3. Whether or not a hearing on a motion for reconsideration is indispensable the lack of which is a deal of due process.

4. Whether or not the second motion for reconsideration is pro forma Rollo, p. 10)

Petitioners maintain that the present action is not for reconveyance but one for partition. Hence, the rule insisted by the private respondents on prescriptibility of an action for reconcile conveyance of real property based on an implied trust is not applicable in the case at bar. In addition, petitioners, argue that private respondents cannot set up the defense of prescription or laches because their possession of the property no matter how long cannot ripen into ownership. (Memorandum for Petitioners, p. 7)

However, the private respondents stress that 'any supposed right of the petitioners to demand a new division or partition of said estate of Marcos Espina has long been barred by the Statute of Limitations and has long prescribed." (Memorandum for Private Respondents, p. 5)

The petitioners claim that the alleged oral partition is invalid and strictly under the coverage of the statute of Frauds on two grounds, to wit:

Firstly, parcel No. 1 being an exclusive property of the deceased should have been divided into eight (8) equal parts. Therefore, Simprosa . could only cede her share of the land which is 1/8 portion thereof and cannot validly cede the shares of her then minor children without being duly appointed as guardian.

Secondly, under Article 1358 of the New Civil Code, Simprosa could not have ceded her right and that of her other children except by a public document. (Memorandum of Petitioners, pp. 8-9)

On the other hand, private respondents insist that the oral partition is valid and binding and does not fall under the coverage of the Statute of Frauds.

Petitioners claim that they were denied due process when the motion for reconsideration was denied without any hearing.

However, private respondents maintain that the hearing of a motion for reconsideration in oral argument is a matter which rest upon the sound discretion of the Court.

Finally, petitioners stress that the second motion for reconsideration is not pro forma, thus, it suspends the running of the period of appeal. Hence, the notice of appeal was timely filed.

On this point, private respondent maintain that the order of respondent judge dated March 1 5, 1976 disapproving petitioners' Record on Appeal and appeal bond may not properly be a subject of a petition for certiorari. (Memorandum of Private Respondents, p. 13)

We find the petition devoid of merit.

We already ruled in Lebrilla, et al. v. Intermediate Appellate Court (G.R. No. 72623, December 18, 1989, 180 SCRA 188; 192) that an action for partition is imprescriptible. However, an action for partition among co-heirs ceases to be such, and becomes one for title where the defendants allege exclusive ownership.

In the case at bar, the imprescriptibility of the action for partition cannot be invoked because two of the co-heirs, namely private respondents Sora and Jose Espina possessed the property as exclusive owners and their possession for a period of twenty one (21) years is sufficient to acquire it by prescription. Hence, from the moment these co-heirs claim that they are the absolute and exclusive owners of the properties and deny the others any share therein, the question involved is no longer one of partition but of ownership.

Anent the issue of oral partition, We sustain the validity of said partition. "An agreement of partition may be made orally or in writing. An oral agreement for the partition of the property owned in common is valid and enforceable upon the parties. The Statute of Frauds has no operation in this kind of agreements, for partition is not a conveyance of property but simply a segregation and designation of the part of the property which belong to the co-owners." (Tolentino, Commentaries and Jurisprudence on the Civil Code of the Philippines, Vol. II, 1983 Edition, 182-183 citing Hernandez v. Andal, et. al., G.R. No. L275, March 29, 1957)

Time and again, the Court stresses that the hearing of a motion for reconsideration in oral argument is a matter which rests upon the sound discretion of the Court. Its refusal does not constitute a denial of due process in the absence of a showing of abuse of discretion. (see Philippine Manufacturing Co. v. Ang Bisig ng PMC et. al., 118 Phil. 431, 434)

The absence of a formal hearing on the petitioners' motion for reconsideration is thoroughly explained in the order of the respondent judge dated August 13, 1975, which is hereunder quoted as follows:

When the court issued its order of June 5, 1975 requiring counsel for defendants to answer plaintiffs' motion for reconsideration, the court opted to resolve plaintiffs' motion based on the pleadings of the parties, without further oral arguments. The court considered the arguments of the parties stated in their pleadings as already sufficient to apprise the court of the issues involved in said motion.

Plaintiffs' allegation that the Clerk of Court failed to calendar their motion for reconsideration for oral argument has not deprived the plaintiffs of any substantial right or his right to due process.

SO ORDERED. (Memorandum of Private Respondents, pp. 1213)

A cursory reading of the aforequoted order will show that there was indeed no formal hearing on the motion for reconsideration. There is no question however, that the motion is grounded on the lack of basis in fact and in law of the order of dismissal and the existence or lack of it is determined by a reference to the facts alleged in the challenged pleading. The issue raised in the motion was fully discussed therein and in the opposition thereto. Under such circumstances, oral argument on the motion is reduced to an unnecessary ceremony and should be overlooked (see Ethel Case, et al. v. Jugo, 77 Phil. 517, 522).

We adhere to the findings of the trial court that the second motion for reconsideration dated August 11, 1975 is pro forma, to it

The grounds stated in said motion being in reiteration of the same grounds alleged in his first motion, the same is pro-forma. (Order dated March 15, 1976, p. 2, Rollo, p. 74)

xxx xxx xxx

Furthermore, the second motion for reconsideration has not stated new grounds considering that the alleged failure of the Clerk of Court to set plaintiffs' motion for reconsideration, although seemingly a

different ground than those alleged in their first motion for reconsideration, is only incidental to the issues raised in their first motion for reconsideration, as it only refers to the right of plaintiffs' counsel to argue his motion in court just to amplify the same grounds already deed by the court. (Ibid, p. 3, Rollo, p. 75)

Therefore, it is very evident that the second motion for reconsideration being pro-forma did not suspend the running of the period of appeal. Thus, the lower court committed no error when it held that the notice of appeal was filed after the lapse of thirty five (35) days, which is clearly beyond the period of thirty (30) days allowed by the rules.

Finally, it has been a basic rule that certiorari is not a substitute for appeal which had been lost. (see Edra v. Intermediate Appellate Court, G.R. No. 75041, November 13, 1989, 179 SCRA 344) A special civil action under Rule 65 of the Rules of Court will not be a substitute or cure for failure to file a timely petition for review on certiorari (appeal) under Rule 45 of the Rules of Court. (Escudero v. Dulay, G.R. No. 60578, February 23, 1988, 158 SCRA 69, 77)

The application of the abovecited rule should be relaxed where it is shown that it will result in a manifest failure or miscarriage of justice. (Ibid, p. 77) However, as emphasized earlier, the case at bar is totally devoid of merit, thus, the strict application of the said file will not in any way override sub-substantial justice.

Therefore, the delay of five (5) days in filing a notice of appeal and a motion for extension to file a record on appeal cannot be excused on the basis of equity.

All premises considered, the Court is convinced that the acts of respondent judge, in dismissing the action for partition and in subsequently denying the motions for reconsideration of the petitioners, does not amount to grave abuse of discretion.

ACCORDINGLY, the petition is DISMISSED.

SO ORDERED.

THIRD DIVISION

G.R. No. L-29727 December 14, 1988

PEDRO OLIVERAS, TEODORA GASPAR, MELECIO OLIVERAS and ANICETA MINOR, plaintiffs-appellees, vs.CANDIDO LOPEZ, SEVERO LOPEZ, HIPOLITO LOPEZ, EUGENIA LOPEZ, PRIMITIVO GASPAR, CORAZON LOPEZ, ALEJANDRO CACAYURIN, FAUSTINA BOTUYAN, MODESTO SALAZAR, ADORACION BOTUYAN, CLAUDIO GANOTICE and ENONG BOTUYAN, defendants-appellants.

Venancio B. Fernando for defendants-appellants.

 

FERNAN, C.J.:

This case exemplifies the Filipino custom of keeping inherited property in a prolonged juridical condition of co-owner ship.

Lorenzo Lopez owned Lot 4685 of the Cadastral survey of Villasis, Pangasinan with an area of 69,687 square meters as evidenced by Original Certificate of Title No. 15262. 1 In December, 1931, Lorenzo Lopez died, 2 leaving said property to his wife, Tomasa Ramos and six (6) children. From that time on, the heirs of Lorenzo Lopez did not initiate any moves to legally partition the property.

More than twenty-one years later, or on February 11, 1953, Tomasa Ramos and her eldest son, Candido Lopez, executed a deed of absolute sale of the "eastern undivided four thousand two hundred and fifty seven-square meters (4,257) more or less, of the undivided portion of (their) interests, rights and participation" over Lot 4685, in favor of the spouses Melecio Oliveras and Aniceta Minor, in consideration of the amount of one thousand pesos (P1,000). 3

On the same day, Tomasa and Candido executed another deed of absolute sale of the "undivided" four thousand two hundred and fifty-seven (4,257) square meters of the "eastern part" of Lot 4685 in favor of the spouses Pedro Oliveras and Teodora Gaspar, also in consideration of P1,000. 4 Each of the said documents bear the thumbmark of Tomasa and the signature of Candido.

In his affidavit also executed on February 11, 1953, Candido stated that a month prior to the execution of the deed of sale in favor of Melecio Oliveras, he offered his: "undivided portion" of Lot 4685 to his "adjacent owners" but none of them was "in a position to purchase" said property. 5

Since the execution of the two deeds of absolute sale, the vendees, brothers Melecio and Pedro, had been paying the real property taxes for their respectively purchased properties. 6 They also had been in possession of their purchased properties which, being planted to palay and peanuts, were segregated from the rest of Lot 4685 by dikes. 7

More than thirteen years later or on November 21, 1966, the counsel of the Oliveras brothers wrote the heirs of Lorenzo Lopez reminding them of the Oliverases' demands to partition the property so that they could acquire their respective titles thereto without resorting to court action, and that, should they fail to respond, he would be forced to file a case in court. 8 Apparently, the Lopezes did not answer said letter since on December 15, 1966, the Oliveras brothers and their wives filed a complaint for partition and damages 9 in the Court of First Instance of Pangasinan. 10

The Oliverases stated in their complaint that possession of the disputed properties was delivered to them with the knowledge and consent of the defendants; that they had been paying the real estate taxes thereon; that prior to the sale, said properties were offered to the other co-owners for sale but they refused to buy them; that on February 18, 1953, the transactions were duly annotated and entered in the Memorandum of encumbrances of OCT No. 15262 as adverse claims; and that their desire to segregate the portions of Lot 4685 sold to them was frustrated by defendants' adamant refusal to lend them the owner's duplicate of OCT No. 15262 and to execute a deed of partition of the whole lot.

In claiming moral damages in the amount of P2,000.00 plaintiffs alleged that defendants also refused to allow them to survey and segregate the portions bought by them. Plaintiffs prayed that the court order the defendants to partition Lot 4685 and to allow them to survey and segregate the portions they had purchased. They also demanded payment of P800.00 as attorney's fees and cost of the suit.

In their answer, the defendants alleged that no sale ever transpired as the alleged vendors could not have sold specific portions of the property; that plaintiffs' possession and occupation of specific portions of the properties being illegal, they could not ripen into ownership; and that they were not under any obligation to lend their copy of the certificate of title or to accede to plaintiffs' request for the partition or settlement of the property. As special and affirmative defenses, the defendants contended that the deeds of sale were null and void and hence, unenforceable against them; that the complaint did not state a cause of action and that the cause or causes of action if any, had prescribed.

Defendants averred in their counterclaim that despite repeated demands, plaintiffs refused and failed to vacate the premises; that the properties occupied by the plaintiffs yielded an average net produce in palay and peanuts in the amount of P1,600.00 annually, and that the complaint was filed to harass them. They prayed for the dismissal of the complaint and the payment of P1,600.00 per year from 1953 until plaintiffs shall have vacated the premises and P1,000.00 for attorney's fees.

Plaintiffs filed an answer to defendants' counterclaim, denying all the allegations therein and stating that defendants never demanded that plaintiffs vacate the portions of Lot 4685 they had bought.

The lower court explored the possibility of an amicable settlement between the parties without success. Hence, it set the case for trial and thereafter, it rendered adecision 11 declaring valid the deeds of absolute sale 12 and ordering the defendants to allow the segregation of the sold portions of Lot 4685 by a licensed surveyor in order that the plaintiffs could obtain their respective certificates of title over their portions of said lot.

In resolving the case, the lower court passed upon the issue of whether the two deeds of absolute sale were what they purported to be or merely mortgage documents. It considered as indicia of plaintiffs' absolute dominion over the portions sold to them their actual possession thereof without any opposition from the defendants until the filing of the complaint, their payment of taxes thereon and their having benefited from the produce of the land. The court ruled that the defendants' testimonial evidence that the deeds in question were merely mortgage documents cannot overcome the evidentiary value of the public instruments presented by the plaintiffs.

On the issue of whether the two deeds of absolute sale were null and void considering that the land subject thereof had not yet been partitioned, the court observed that the total area of 8,514 square meters sold to plaintiffs by Candido was less than his share should Lot 4685 with an area of 69,687 square meters be divided among the six children of Lorenzo Lopez and their mother. In this connection, the lower court also found that during his lifetime, and before Candido got married, Lorenzo Lopez had divided Lot 4685 among his children who then took possession of their respective shares. *

The defendants appealed said decision to this Court contending that the lower court erred in declaring the two deeds of absolute sale as valid, in ordering the segregation of the sold portions of Lot 4685 to enable the plaintiffs to obtain their respective certificates of title, and in not considering their defense of prescription.

The extrinsic validity of the two deeds of absolute sale is not in issue in this case in view of the finding of the trial court that the defendants admittedly do not question their due execution. 13 What should pre-occupy the Court is the intrinsic validity of said deeds insofar as they pertain to sales of designated portions of an undivided, co-owned property.

In a long line of decisions, this Court has held that before the partition of a land or thing held in common, no individual co-owner can claim title to any definite portion thereof. All that the co-owner has is an Ideal or abstract quota or proportionate share in the entire land or thing. 14

However, the duration of the juridical condition of co-ownership is not limitless. Under Article 494 and 1083 of the Civil Code, co-ownership of an estate should not exceed the period of twenty (20) years. And, under the former article, any agreement to keep a thing or property undivided should be for a ten-year period only. Where the parties stipulate a definite period of in division which exceeds the maximum allowed by law, said stipulation shall be void only as to the period beyond such maximum. 15

Although the Civil Code is silent as to the effect of the in division of a property for more than twenty years, it would be contrary to public policy to sanction co-ownership beyond the period set by the law. Otherwise, the 20-year limitation expressly mandated by the Civil Code would be rendered meaningless.

In the instant case, the heirs of Lorenzo Lopez maintained the co-ownership for more than twenty years. We hold that when Candido and his mother (who died before the filing of the complaint for partition) sold definite portions of Lot 4685, they validly exercised dominion over them because, by operation of law, the co-ownership had ceased. The filing of the complaint for partition by the Oliverases who, as vendees, are legally considered as subrogated to the rights of Candido over portions of Lot 4685 in their possession, 16 merely served to put a stamp of formality on Candido's otherwise accomplished act of terminating the co-ownership.

The action for partition has not prescribed. Although the complaint was filed thirteen years from the execution of the deeds of sale and hence, as contended by the defendants-appellants, prescription might have barred its filing under the general provision of Article 1144 (a) of the Civil Code, Article 494 specifically mandates that eachco-owner may demand at any time the partition of the thing owned in common insofar as his share is concerned. Hence, considering the validity of the conveyances of portions of Lot 4685 in their favor and as subrogees of Candido Lopez, the Oliverases' action for partition was timely and properly filed. 17

We cannot write finis to this decision without commenting on the compliance with the resolution of September 1, 1986 of counsel for defendants-appellants. In said resolution, the court required the parties to move in the premises "considering the length of time that this case has remained pending in this Court and to determine whether or not there might be supervening events which may render the case moot and academic. 18 In his manifestation and motion dated August 12, 1987, said counsel informed the Court that he had contacted the defendants-appellants whom he advised "to move in the premises which is the land in question and to maintain the status quo with respect to their actual possession thereon" and that he had left a copy of said resolution with the defendants-appellants" for their guidance in the compliance of their obligations (sic) as specified in saidresolution." 19

Obviously, said counsel interpreted literally the Court's directive "to move in the premises." For the

enlightenment of said counsel and all others of similar perception, a "move in the premises" resolution is not a license to occupy or enter the premises subject of litigation especially in cases involving real property. A "move in the premises" resolution simply means what is stated therein: the parties are obliged to inform the Court of developments pertinent to the case which may be of help to the Court in its immediate disposition.

WHEREFORE, the decision of the lower court insofar as it declares the validity of the two deeds of sale and directs the partition of Lot 4685, is AFFIRMED. The lower court is hereby ordered to facilitate with dispatch the preparation of a project of partition which it should thereafter approve. This decision is immediately executory. No costs.

SO ORDERED.

[G.R. No. 137152.  January 29, 2001]

CITY OF MANDALUYONG, petitioner, vs. ANTONIO N., FRANCISCO N., THELMA N., EUSEBIO N., RODOLFO N., all surnamed AGUILAR, respondents.

D E C I S I O N

PUNO, J.:

This is a petition for review under Rule 45 of the Rules of Court of the Orders dated September 17, 1998 and December 29, 1998 of the Regional Trial Court, Branch 168, Pasig City[1] dismissing the petitioner’s Amended Complaint in SCA No. 1427 for expropriation of two (2) parcels of land in Mandaluyong City.

The antecedent facts are as follows:

On August 4, 1997, petitioner filed with the Regional Trial Court, Branch 168, Pasig City a complaint for expropriation entitled “City of Mandaluyong, plaintiff v. Antonio N., Francisco N., Thelma N., Eusebio N., Rodolfo N., all surnamed Aguilar, defendants.” Petitioner sought to expropriate three (3) adjoining parcels of land with an aggregate area of 1,847 square meters registered under Transfer Certificates of Title Nos. 59780, 63766 and 63767 in the names of the defendants, herein respondents, located at 9 de Febrero Street, Barangay Mauwag, City of Mandaluyong; on a portion of the 3 lots, respondents constructed residential houses several decades ago which they had since leased out to tenants until the present; on the vacant portion of the lots, other families constructed residential structures which they likewise occupied; in 1983, the lots were classified by Resolution No. 125 of the Board of the Housing and Urban Development Coordinating Council as an Area for Priority Development for urban land reform under Proclamation Nos. 1967 and 2284 of then President Marcos; as a result of this classification, the tenants and occupants of the lots offered to purchase the land from respondents, but the latter refused to sell; on November 7, 1996, the Sangguniang Panlungsod of petitioner, upon petition of the Kapitbisig, an association of tenants and occupants of the subject land, adopted Resolution No. 516, Series of 1996 authorizing Mayor Benjamin Abalos of the City of Mandaluyong to initiate action for the expropriation of the subject lots and construction of a medium-rise condominium for qualified occupants of the land; on January 10, 1996, Mayor Abalos sent a letter to respondents offering to purchase the said property at P3,000.00 per square meter; respondents did not answer the letter.  Petitioner thus prayed for the expropriation of the said lots and the fixing of just compensation at the fair market value of P3,000.00 per square meter.[2]

In their answer, respondents, except Eusebio N. Aguilar who died in 1995, denied having received a copy of  Mayor Abalos’ offer to purchase their lots.  They alleged that the expropriation of their land is arbitrary and capricious, and is not for a public purpose; the subject lots are their only real property and are too small for expropriation, while petitioner has several properties inventoried for socialized housing; the fair market value of P3,000.00 per square meter is arbitrary because the zonal valuation set by the Bureau of Internal Revenue is P7,000.00 per square meter.  As counterclaim, respondents prayed for damages of P21 million.[3]

Respondents filed a “Motion for Preliminary Hearing” claiming that the defenses alleged in their Answer are valid grounds for dismissal of the complaint for lack of jurisdiction over the person of the defendants and lack of cause of action.  Respondents prayed that the affirmative defenses be set for preliminary hearing and that the complaint be dismissed.[4] Petitioner replied.

On November 5, 1997, petitioner filed an Amended Complaint and named as an additional

defendant Virginia N. Aguilar and, at the same time, substituted Eusebio Aguilar with his heirs.   Petitioner also excluded from expropriation TCT No. 59870 and thereby reduced the area sought to be expropriated from three (3) parcels of land to two (2) parcels totalling 1,636 square meters under TCT Nos. 63766 and 63767.[5]

The Amended Complaint was admitted by the trial court on December 18, 1997.  Respondents, who, with the exception of Virginia Aguilar and the Heirs of Eusebio Aguilar had yet to be served with summons and copies of the Amended Complaint, filed a “Manifestation and Motion” adopting their “Answer with Counterclaim” and “Motion for Preliminary Hearing” as their answer to the Amended Complaint.[6]

The motion was granted.  At the hearing of February 25, 1998, respondents presented Antonio Aguilar who testified and identified several documentary evidence.  Petitioner did not present any evidence.  Thereafter, both parties filed their respective memoranda.[7]

On September 17, 1998, the trial court issued an order dismissing the Amended Complaint after declaring respondents as “small property owners” whose land is exempt from expropriation under Republic Act No. 7279.  The court also found that the expropriation was not for a public purpose for petitioner’s failure to present any evidence that the intended beneficiaries of the expropriation are landless and homeless residents of Mandaluyong.  The court thus disposed of as follows:

“WHEREFORE, the Amended Complaint is hereby ordered dismissed without pronouncement as to cost.

SO ORDERED.”[8]

Petitioner moved for reconsideration.  On December 29, 1998, the court denied the motion.  Hence this petition.

Petitioner claims that the trial court erred

“IN UPHOLDING RESPONDENT’S CONTENTION THAT THEY QUALIFY AS SMALL PROPERTY OWNERS AND ARE THUS EXEMPT FROM EXPROPRIATION.”[9]

Petitioner mainly claims that the size of the lots in litigation does not exempt the same from expropriation in view of the fact that the said lots have been declared to be within the Area for Priority Development (APD) No. 5 of Mandaluyong by virtue of Proclamation No. 1967, as amended by Proclamation No. 2284 in relation to Presidential Decree No. 1517.[10] This declaration allegedly authorizes petitioner to expropriate the property, ipso facto, regardless of the area of the land.

Presidential Decree (P.D.) No. 1517, the Urban Land Reform Act, was issued by then President Marcos in 1978.  The decree adopted as a State policy the liberation of human communities from blight, congestion and hazard, and promotion of their development and modernization, the optimum use of land as a national resource for public welfare.[11] Pursuant to this law, Proclamation No. 1893 was issued in 1979 declaring the entire Metro Manila as Urban Land Reform Zone for purposes of urban land reform.  This was amended in 1980 by Proclamation No. 1967 and in 1983 by Proclamation No. 2284 which identified and specified 245 sites in Metro Manila as Areas for Priority Development and Urban Land Reform Zones.

In 1992, the Congress of the Philippines passed Republic Act No. 7279, the “Urban Development and Housing Act of 1992.” The law lays down as a policy that the state,   in cooperation with the private sector, undertake a comprehensive and continuing Urban Development and Housing Program; uplift the conditions of the underprivileged and homeless citizens in urban areas and resettlement areas by making available to them decent housing at affordable cost, basic services and

employment opportunities and provide for the rational use and development of urban land to bring about, among others, equitable utilization of residential lands; encourage more effective people's participation in the urban development process and improve the capability of local government units in undertaking urban development and housing programs and projects.[12] Towards this end, all city and municipal governments are mandated to conduct an inventory of all lands and improvements within their respective localities, and in coordination with the National Housing Authority, the Housing and Land Use Regulatory Board, the National Mapping Resource Information Authority, and the Land Management Bureau, identify lands for socialized housing and resettlement areas for the immediate and future needs of the underprivileged and homeless in the urban areas, acquire the lands, and dispose of said lands to the beneficiaries of the program.[13]

The acquisition of lands for socialized housing is governed by several provisions in the law.  Section 9 of R.A. 7279 provides:

“Sec. 9.  Priorities in the Acquisition of Land.—Lands for socialized housing shall be acquired in the following order:

(a) Those owned by the Government or any of its subdivisions, instrumentalities, or agencies, including government-owned or controlled corporations and their subsidiaries;

(b) Alienable lands of the public domain;

(c) Unregistered or abandoned and idle lands;

(d) Those within the declared Areas for Priority Development, Zonal Improvement Program sites, and Slum Improvement and Resettlement Program sites which have not yet been acquired;

(e) Bagong Lipunan Improvement of Sites and Services or BLISS Sites which have not yet been acquired;

(f)  Privately-owned lands.

Where on-site development is found more practicable and advantageous to the beneficiaries, the priorities mentioned in this section shall not apply.  The local government units shall give budgetary priority to on-site development of government lands.”

Lands for socialized housing are to be acquired in the following order:  (1) government lands; (2) alienable lands of the public domain; (3) unregistered or abandoned or idle lands; (4) lands within the declared Areas for Priority Development (APD), Zonal Improvement Program (ZIP) sites, Slum Improvement and Resettlement (SIR) sites which have not yet been acquired; (5) BLISS sites which have not yet been acquired; and (6) privately-owned lands.

There is no dispute that the two lots in litigation are privately-owned and therefore last in the order of priority acquisition.  However, the law also provides that lands within the declared APD’s which have not yet been acquired by the government are fourth in the order of priority.  According to petitioner, since the subject lots lie within the declared APD, this fact mandates that the lots be given priority in acquisition.[14]

Section 9, however, is not a single provision that can be read separate from the other provisions of the law.  It must be read together with Section 10 of R.A. 7279 which also provides:

“Section 10. Modes of Land Acquisition.—The modes of acquiring lands for purposes of this Act shall include, among others, community mortgage, land swapping, land assembly or consolidation, land banking, donation to the Government, joint-venture agreement, negotiated purchase, and

expropriation:  Provided, however, That expropriation shall be resorted to only when other modes of acquisition have been exhausted:  Provided, further, That where expropriation is resorted to, parcels of land owned by small property owners shall be exempted for purposes of this Act:  Provided, finally, That abandoned property, as herein defined, shall be reverted and escheated to the State in a proceeding analogous to the procedure laid down in Rule 91 of the Rules of Court.[15]

For the purposes of socialized housing, government-owned and foreclosed properties shall be acquired by the local government units, or by the National Housing Authority primarily through negotiated purchase:  Provided, That qualified beneficiaries who are actual occupants of the land shall be given the right of first refusal.”

Lands for socialized housing under R.A. 7279 are to be acquired in several modes.  Among these modes are the following: (1) community mortgage; (2) land swapping, (3) land assembly or consolidation; (4) land banking; (5) donation to the government; (6) joint venture agreement; (7) negotiated purchase; and (8) expropriation.  The mode of expropriation is subject to two conditions: (a) it shall be resorted to only when the other modes of acquisition have been exhausted; and (b) parcels of land owned by small property owners are exempt from such acquisition.

Section 9 of R.A. 7279 speaks of priorities in the acquisition of lands.  It enumerates the type of lands to be acquired and the heirarchy in their acquisition.  Section 10 deals with the modes of land acquisition or the process of acquiring lands for socialized housing.  These are two different things.  They mean that the type of lands that may be acquired in the order of priority in Section 9 are to be acquired only in the modes authorized under Section 10.  The acquisition of the lands in the priority list must be made subject to the modes and conditions set forth in the next provision.  In other words, land that lies within the APD, such as in the instant case, may be acquired only in the modes under, and subject to the conditions of, Section 10.

Petitioner claims that it had faithfully observed the different modes of land acquisition for socialized housing under R.A. 7279 and adhered to the priorities in the acquisition for socialized housing under said law.[16] It, however, did not state with particularity whether it exhausted the other modes of acquisition in Section 9 of the law before it decided to expropriate the subject lots.  The law states “expropriation shall be resorted to when other modes of acquisition have been exhausted.” Petitioner alleged only one mode of acquisition, i.e., by negotiated purchase.  Petitioner, through the City Mayor, tried to purchase the lots from respondents but the latter refused to sell. [17] As to the other modes of acquisition, no mention has been made.  Not even Resolution No. 516, Series of 1996 of the Sangguniang Panlungsod authorizing the Mayor of Mandaluyong to effect the expropriation of the subject property states whether the city government tried to acquire the same by community mortgage, land swapping, land assembly or consolidation, land banking, donation to the government, or  joint venture agreement under Section 9 of the law.

Section 9 also exempts from expropriation parcels of land owned by small property owners.[18] Petitioner argues that the exercise of the power of eminent domain is not anymore conditioned on the size of the land sought to be expropriated.[19] By the expanded notion of  public use, present jurisprudence has established the concept that expropriation is not anymore  confined to the vast tracts of land and landed estates, but also covers small parcels of  land.[20] That only a few could actually benefit from the expropriation of the property does not diminish its public use character.[21] It simply is not possible to provide, in one instance, land and shelter for all who need them.[22]

While we adhere to the expanded notion of public use, the passage of R.A. No. 7279, the “Urban Development and Housing Act of 1992” introduced a limitation on the size of the land sought to be expropriated for socialized housing.  The law expressly exempted “small property owners” from expropriation of their land for urban land reform.  R.A. No. 7279 originated as Senate Bill No. 234 authored by Senator Joey Lina[23] and House Bill No. 34310.  Senate Bill No. 234 then provided that one of those lands not covered by the urban land reform and housing program was “land actually used by small property owners within the just and equitable retention limit as provided under this

Act.”[24] “Small property owners” were defined in Senate Bill No. 234 as:

“4. Small Property Owners—are those whose rights are protected under Section 9, Article XIII of the Constitution of the Philippines, who own small parcels of land within the fair and just retention limit provided under this Act and which are adequate to meet the reasonable needs of the small property owner’s family and their means of livelihood.”[25]

The exemption from expropriation of lands of small-property owners was never questioned on the Senate floor.[26] This exemption, although with a modified definition, was actually retained in the consolidation of Senate Bill No. 234 and House Bill No. 34310 which became R.A. No. 7279.[27]

The question now is whether respondents qualify as “small property owners” as defined in Section 3 (q) of R.A. 7279.  Section 3 (q) provides:

“Section 3 x x x (q). “Small property owners” refers to those whose only real property consists of residential lands not exceeding three hundred square meters (300 sq.m.) in highly urbanized cities and eight hundred square meters (800 sq.m.) in other urban areas.”

“Small-property owners” are defined by two elements: (1) those owners of real property whose property consists of residential lands with an area of not more than 300 square meters in highly urbanized cities and 800 square meters in other urban areas; and (2) that they do not own real property other than the same.

The case at bar involves two (2) residential lots in Mandaluyong City, a highly urbanized city.  The lot under TCT No. 63766 is 687 square meters in area and the second under TCT No. 63767 is 949 square meters, both totalling 1,636 square meters in area.  TCT No. 63766 was issued in the names of herein five (5) respondents, viz:

“FRANCISCO N. AGUILAR, widower; THELMA N. AGUILAR, single; EUSEBIO N. AGUILAR, JR., widower; RODOLFO N. AGUILAR, single and ANTONIO N. AGUILAR, married to Teresita Puig; all of legal age, Filipinos.”[28]

TCT No. 63767 was issued in the names of the five (5) respondents plus Virginia Aguilar, thus:

“FRANCISCO N. AGUILAR, widower; THELMA N. AGUILAR, single; EUSEBIO N. AGUILAR, JR., widower; RODOLFO N. AGUILAR, single and ANTONIO N. AGUILAR, married to Teresita Puig; and VIRGINIA N. AGUILAR, single, all of legal age, Filipinos.”[29]

Respondent Antonio Aguilar testified that he and the other registered owners are all siblings who inherited the subject property by intestate succession from their parents.[30] Their father died in 1945 and their mother in 1976.[31] Both TCT’s were issued in the siblings’ names on September 2, 1987.[32] In 1986, however, the siblings agreed to extrajudicially partition the lots among themselves, but no action was taken by them to this end.  It was only eleven (11) years later, on November 28, 1997 that a survey of the two lots was made[33] and on February 10, 1998, a consolidation subdivision plan was approved by the Lands Management Service of the Department of Environment and Natural Resources.[34] The co-owners signed a Partition Agreement on February 24, 1998[35] and on May 21, 1998, TCT Nos. 63766 and 63767 were cancelled and new titles issued in the names of the individual owners pursuant to the Partition Agreement.

Petitioner argues that the consolidation of the subject lots and their partition was made more than six (6) months after the complaint for expropriation was filed on August 4, 1997, hence, the partition was made in bad faith, for the purpose of circumventing the provisions of R.A. 7279.[36]

At the time of filing of the complaint for expropriation, the lots subject of this case were

owned in common by respondents.  Under a co-ownership, the ownership of an undivided thing or right belongs to different persons.[37] During the existence of the co-ownership, no individual can claim title to any definite portion of the community property until the partition thereof; and prior to the partition, all that the co-owner has is an ideal or abstract quota or proportionate share in the entire land or thing.[38] Article 493 of the Civil Code however provides that:

“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 termination of the co-ownership.”[39]

Before partition in a co-ownership, every co-owner has the absolute ownership of his undivided interest in the common property.  The co-owner is free to alienate, assign or mortgage his interest, except as to purely personal rights.[40] He may also validly lease his undivided interest to a third party independently of the other co-owners.[41] The effect of any such transfer is limited to the portion which may be awarded to him upon the partition of the property.[42]

Article 493 therefore gives the owner of an undivided interest in the property the right to freely sell and dispose of his undivided interest.[43] The co-owner, however, has no right to sell or alienate a concrete specific or determinate part of the thing owned in common, because his right over the thing is represented by a quota or ideal portion without any physical adjudication.[44] If the co-owner sells a concrete portion, this, nonetheless, does not render the sale void.  Such a sale affects only his own share, subject to the results of the partition but not those of the other co-owners who did not consent to the sale.[45]

In the instant case, the titles to the subject lots were issued in respondents’ names as co-owners in 1987—ten (10) years before the expropriation case was filed in 1997.  As co-owners, all that the respondents had was an ideal or abstract quota or proportionate share in the lots.   This, however, did not mean that they could not separately exercise any rights over the lots.   Each respondent had the full ownership of his undivided interest in the property.  He could freely sell or dispose of his interest independently of the other co-owners.  And this interest could have even been attached by his creditors.[46] The partition in 1998, six (6) months after the filing of the expropriation case, terminated the co-ownership by converting into certain and definite parts the respective undivided shares of the co-owners.[47] The subject property is not a thing essentially indivisible.  The rights of the co-owners to have the property partitioned and their share in the same delivered to them cannot be questioned for "[n]o co-owner shall be obliged to remain in the co-ownership."[48] The partition was merely a necessary incident of the co-ownership;[49] and absent any evidence to the contrary, this partition is presumed to have been done in good faith.

Upon partition, four (4) co-owners, namely, Francisco, Thelma, Rodolfo and Antonio Aguilar each had a share of 300 square meters under TCT Nos. 13849, 13852, 13850, 13851.[50] Eusebio Aguilar’s share was 347 square meters under TCT No. 13853[51] while Virginia Aguilar’s was 89 square meters under TCT No. 13854.[52]

It is noted that Virginia Aguilar, although granted 89 square meters only of the subject lots, is, at the same time, the sole registered owner of TCT No. 59780, one of the three (3) titles initially sought to be expropriated in the original complaint.  TCT No. 59780, with a land area of 211 square meters, was dropped in the amended complaint.  Eusebio Aguilar was granted 347 square meters, which is 47 square meters more than the maximum of 300 square meters set by R.A. 7279 for small property owners.  In TCT No. 13853, Eusebio’s title, however, appears the following annotation:

“… subject to x x x, and to the prov. of Sec. 4 Rule 74 of the Rules of Court with respect to the inheritance left by the deceased Eusebio N. Aguilar.”[53]

Eusebio died on March 23, 1995,[54] and, according to Antonio’s testimony, the former was survived by five (5) children.[55] Where there are several co-owners, and some of them die, the heirs of those who die, with respect to that part belonging to the deceased, become also co-owners of the property together with those who survive.[56] After Eusebio died, his five heirs became co-owners of his 347 square-meter portion.  Dividing the 347 square meters among the five entitled each heir to 69.4 square meters of the land subject of litigation.

Consequently, the share of each co-owner did not exceed the 300 square meter limit set in R.A. 7279.  The second question, however, is whether the subject property is the only real property of respondents for them to comply with the second requisite for small property owners.

Antonio Aguilar testified that he and most of the original co-owners do not reside on the subject property but in their ancestral home in Paco, Manila.[57] Respondents therefore appear to own real property other than the lots in litigation.  Nonetheless, the records do not show that the ancestral home in Paco, Manila and the land on which it stands are owned by respondents or any one of them.  Petitioner did not present any title or proof of this fact despite Antonio Aguilar’s testimony.

On the other hand, respondents claim that the subject lots are their only real  property[58] and  that  they, particularly two of the five heirs of Eusebio Aguilar, are merely  renting their houses and therefore do not own any other real property in Metro Manila.[59] To prove this, they submitted certifications from the offices of the City and Municipal Assessors in Metro Manila attesting to the fact that they have no registered real property declared for taxation purposes in the respective cities.  Respondents were certified by the City Assessor of Manila;[60] Quezon City;[61] Makati City;[62] Pasay City;[63] Paranaque;[64] Caloocan City;[65] Pasig City;[66] Muntinlupa;[67] Marikina;[68] and the then municipality of Las Piñas[69] and the municipality of San Juan del Monte[70] as having no real property registered for taxation in their individual names.

Finally, this court notes that the subject lots are now in the possession of respondents.   Antonio Aguilar testified that he and the other co-owners filed ejectment cases against the occupants of the land before the Metropolitan Trial Court, Mandaluyong, Branches 59 and 60.  Orders of eviction were issued and executed on September 17, 1997 which resulted in the eviction of the tenants and other occupants from the land in question.[71]

IN VIEW WHEREOF, the petition is DENIED and the orders dated September 17, 1998 and December 29, 1998 of the Regional Trial Court, Branch 168, Pasig City in SCA No. 1427 are AFFIRMED.

SO ORDERED.