1 |C o - O w n e r s h i p : A r t 4 8 4 - 4 9 3

[G.R. No. 176448. July 28, 2008.]

Jose S. Dailisan, petitioner, vs. CA and the hrs. of the

Federico Pugao,et al, respondents.

FACTS: TINGA, J: This is a Petition for Review of the

Decision and Resolution of the CA which reversed and set

aside the Decision of the RTC-QC.

Petitioner filed a Complaint for partition before the RTC-

QC, alleging that he purchased 1/4 of the land of

Federico Pugao identified as Lot 16 in Bago Bantay, QC

covered by a TCT.

According to petitioner, he had paid Federico several

installments which totaled to P6K. When the mortgage

was released, petitioner demanded the execution of a

deed of absolute sale. Instead, Federico proposed to

mortgage the property to petitioner as security for a P10K

loan, payable in 3 months, and upon payment of the loan

the deed of absolute sale would be executed.

When Petitioner asked for the partition of the lot

Federico refused and even sent a notice of eviction

against petitioner.

According to Federico, he allowed petitioner and his

niece to occupy one 1/4 of his lot, and admitted that he

executed in favor of petitioner a deed of real estate

mortgage. The loan was paid, mortgage cancelled.

Federico alleged that petitioner made him sign pages of

what the former told him to be parts of the real estate

mortgage. He filed a complaint for falsification and

ejectment against petitioner. He passed away while this

case was pending before the trial court.

RTC found that respondents failed to disprove the

validity of the deed of absolute sale, ruled in favor of

petitioner and ordered the partition of the subject

property. MR was denied.

On appeal, CA granted and noted that petitioner should

have filed an action for specific performance to compel

Federico to honor the deed of absolute sale; but had

already expired. CA noted that petitioner "filed the instant

action for partition simply because it is not barred by

prescription." It ruled that the sale was void because

there’s no consent and that there was no proof of payment

of the price or consideration. MR was denied.

ISSUES: Was deed of absolute sale valid?

HELD:The notarized deed of absolute sale as a public

document has in its favor the presumption of regularity which

may only be rebutted by evidence so clear, strong and

convincing as to exclude all controversy as to the falsity of the

certificate. The burden of proof to overcome the presumption

lies on the party contesting such execution.

The action or defense for the declaration of the inexistence of

a contract does not prescribe.

Respondents' claim is that the deed of sale is a voidable, and

not void, contract because of mistake and/or fraud.

Respondents stress Federico's low educational attainment and

inability to understand the English language.

Nevertheless, one of the respondents testified that she was

aware of the existence of the deed of sale way back in 1984.

Yet, none of them took any action to annul the deed within the

prescribed 4-year period which expired in 1988.

According to Art. 1332, it would have been incumbent upon

petitioner to show that he fully explained the terms of the

contract to Federico if not for a crucial point. Respondents

have lost both their right to file an action for annulment or to

set up such nullity of the deed of sale as a defense in an action

to enforce the same.

Respondents were unable to overcome the presumption of

validity of the deed of absolute sale as well as the regularity in

its execution.

CA ruled that petitioner's cause of action has prescribed

following its conclusion that petitioner's action is actually one

for specific performance, not partition. Interestingly,

petitioner suddenly changed tack and declared that his original

action was indeed an action for specific performance. He

should not have gone that far. His objective is to make

Federico honor their contract and perform his obligation to

deliver a separate title covering the lot he sold to him but

which can be done only after the portion is segregated from

the rest of Federico's property.

Petitioner's action before the RTC was properly captioned as

one for partition because there are sufficient allegations in the

complaint that he is a co-owner of the property. The regime of

CO-OWNERSHIP exists when ownership of an undivided

thing or right belongs to different persons. By the nature of a

co-ownership, a co-owner cannot point to a specific portion of

the property owned in common as his own because his share

therein remains intangible.

The description "undivided 1/4 portion" shows that the portion

sold is still undivided and not sufficiently identified. While the

description provides a guide for identifying the location of the

lot sold, there was no indication of its exact metes and bounds.

This is the reason why petitioner was constrained to cause the

survey of the property. As a co-owner of the property,

therefore, petitioner has the right to demand partition, a

right which does not prescribe.

Ownership of the thing sold is acquired only from the time of

delivery, either actual or constructive. Article 1498 provides

that when the sale is made through a public instrument, the

execution shall be equivalent to the delivery of the thing

which is the object of the contract, if from the deed the

contrary does not appear or cannot be inferred. The Court

notes that Federico had already delivered the portion he sold

to petitioner, subject to the execution of a technical survey,

when he executed the deed of absolute sale, which is a public

instrument.

In view of the delivery in law, coupled with petitioner's actual

occupation of the portion where his house stands, all that is

needed is its segregation from the rest of the property.

WHEREFORE, the petition is GRANTED. The challenged

Decision and Resolution are SET ASIDE, and the Decision of

the RTC-QC is REINSTATED.

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[G.R. No. 72188. September 15,

1986.] Rodolfo Eusebio, petitioner, vs. IAC and Rohimust Santos,

respondents.

SYLLABUS

1. CIVIL LAW; PROPERTY; CO-OWNERSHIP; DEFINED.

2. ART. 543, NEW CIVIL CODE APPLIES.

FACTS: MELENCIO-HERRERA, J:

The controversy in this case is between 2 co-owners of a parcel of land

in La Loma, QC. Petitioner filed a suit in 1981 against Private

Respondent before the CFI-QC for determination of their

participations in the co-ownership, and for actual partition of the LOT.

The court gave 611sqm to petitioner while 200 sqm was given to

defendant.

As the manner of dividing the LOT has yet to be determined, and it

could not then be known which buildings have to be cut by a dividing

line, the Trial Court simply provided for the demolition of any building

or part claimed by either party, which would be within the area

assigned to the other party.

Respondent appealed to IAC which initially affirmed the judgment of

the Trial Court in toto. However, on MR, it rendered a Resolution

amending its previous affirmance, holding that Respondent "has the

legal right to retain the house together with its improvements and the

possession thereof until full payment of the value thereof." It is that

modification which petitioner has alleged to be erroneous and which

should be set aside.

The LOT was part of a subdivision owned by J.M.

Tuazon & Co., It was occupied by Philip Zinsineth as a

lessee since 1924, where he had constructed a house and

garage. After his death, his "leasehold rights" were

inherited by his two daughters, the mother of the

contending parties.

The parties concerned agreed that the leasehold rights will

be placed in the name of petitioner to the extent of 383

sqm., and in the name of Fernando J. Santos, Jr., a son of

to the extent of 428 sqm. On that same date, a contract to

sell the LOT on installment was executed by GA, Inc. in

favor of petitioner because GA, Inc. wanted to deal only

with one person. However, Rodolfo and Fernando signed

an affidavit reading, "That actually the property was

bought by us jointly and the monthly installments shall be

paid by us pro-rata to the area which we are presently

occupying.

"That it is our understanding that as soon as the property is fully paid

for by us, the same shall be subdivided so as to have two transfer

certificates of title issued to us for our corresponding portions.”

Installment payments under the Contract to Sell had not

been kept up to date. Thus a new agreement followed that

all overdue monthly installment will be advanced by

petitioner.

Full payment was made to GA, Inc., and TCT was issued

solely in the name of petitioner. FERNANDO was not

able to contribute his full share. FERNANDO

subsequently transferred his rights to respondent who is

his brother.

In the case instituted by petitioner against respondent, the

RTC found that as a result of RODOLFO's payments

made on behalf of FERNANDO, his share in the LOT had

to be increased from 383 to 611, the participation of

ROHIMUST was decreased to 200 sqm. That

adjudication is now final.

ISSUE: Was the CA correct?

HELD: The Appellate Tribunal erred in invoking Article 546

which prescribes the rights of the possessor in good faith as

regards useful expenses. Article 546 presupposes, but does

not establish, possession in good faith.

The possession of the parties was in the concept of lessees of

the LOT, which was not possession in good faith for

purposes of Article 546. Conceding that the parties became co-

owners after the contract to sell was executed, neither co-

owner can claim possession in himself of any particular

identified part of the LOT. The possession held by a co-heir of

the undivided estate is understood to be enjoyed in the name

of the rest of the heirs. An undivided estate is co-ownership

by the heirs. The ownership of the physically undivided thing

pertains to more than one person, thus defined as "the right of

common dominion which two or more persons have in a

spiritual part of a thing which is not physically divided"

(Sanchez Roman).

The provision of Article 543 is applicable. Under this

provision, after the LOT is actually partitioned, respondent

would be "deemed to have exclusively possessed the part

which may be allotted to him upon the its division " consisting

of the definite 200 sqm area assigned to him, together with all

buildings and parts of buildings erected therein

Petitioner can have no claim over such buildings or parts of a

building, which improvements respondent can keep or

demolish without paying any compensation. For the same

reason, if there were buildings or parts of a building, found in

the definite area assigned to petitioner, he will be deemed to

have been in exclusive possession since the contract of the

deed of sale was executed, and he can keep or demolish these

improvements without paying any compensation

WHEREFORE, the Resolution of respondent Court is hereby

set aside, and its Decision in the same case, affirming the

judgment of the Trial Court in toto, shall stand without

modification. Let this case be remanded to the Trial Court for

actual partition of the LOT between its co-owners under the

provisions of Rule 69 of the Rules of Court.

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[G.R. No. L-38018. October 31, 1978.]

Marcelo Sotto, petitioner, vs. Pilar Teves, et al. and CA,

respondents.

SYNOPSIS

In 1913, the wife and two daughters of deceased Florentino Rallos,

through counsel Filemon Sotto, manifested before the probate court

their desire to preserve the co-ownership over the inherited properties,

which included the five lots in question. Shortly thereafter Sotto

married one of the daughters, Carmen. In 1925, the heirs reaffirmed by

an oral agreement their 1913 written agreement, under which Carmen

shall administer and receive in usufruct the fruits of the five lots, which

however would devolve upon her death to her sister. Prior to this

agreement, Sotto who had been acting as a pater familias to the Rallos

family, caused the five lots in dispute to be registered either in the

name of Carmen, or jointly in the names of Carmen and her mother,

and later through fictitious sales and transfers, in the name of Carmen

alone, and one lot in his name. Carmen bequeathed all her properties to

Sotto. When the latter died the five lots were all titled in his name,

which lots are now claimed by Florentino Rallos' direct descendants on

the one hand, and by his (Sotto's) children out of wedlocked, on the

other.

They decided to remain co-owners pro-indiviso of his properties, and

that Atty. Sotto's fiduciary relations with the Rallos family afforded a

basis for imposing a constructive trust. Neither Carmen nor Atty. Sotto

could, therefore, put his/her interest above, or in direct collision with,

the interests of those who had reposed their trust and confidence in

him/her.

SYLLABUS

1. EXPRESS TRUST; CREATION; ARTICLE 1444, NEW CIVIL

CODE.

2. CO-OWNERSHIP IS A FORM OF TRUST; OBLIGATION OF CO-

OWNERS.

3. CONSTRUCTIVE TRUST; BASED ON FIDUCIARY RELATION;

WHAT CONSTITUTES FIDUCIARY RELATION.

6. EXPRESS TRUST; PROOF THEREOF.

7. EFFECTS OF ACTS OF OWNERSHIP EXERCISED BY TRUSTEE

OVER TRUST PROPERTY.

8. TRUSTEE'S POSSESSION CANNOT RIPEN INTO OWNERSHIP;

EXCEPTION.

FATS: GUERRERO, J: This is a petition for review on

certiorari of the Resolution of the CA which reconsidered the

decision of the same Court and from the Resolution denying

the motion for reconsideration of the previous Resolution.

The Subject of the plaintiffs' action for declaration of

ownership and/or reconveyance, and for the recovery of

possession, rentals, damages and attorney's fees, are 5

parcels of land, all located in Cebu City. The aforesaid

properties originally belonged to the conjugal partnership

of the spouses Florentino Rallos and Maria Fadullon.

When Florentino Rallos died, the parcels of land in

question, and other properties of his estate, descended in

testate succession to his sole heirs, his widow, et al. The

Rallos heirs entrusted the settlement of the estate to Atty.

Filemon Sotto.

Cesar Sotto, nephew and one of the guardians judicially

appointed to take care of Atty Sotto’s estate, delivered to

one of the plaintiffs certain documents regarding the

ownership of the subject parcels of land. The properties

were to fall into the hands of his children out of wedlock,

who are total strangers to the spouses Rallos and

Fadullon.

Private respondents filed suit in the CFI-Cebu against

petitioner for the recovery of possession and ownership of

the 5 parcels of land described in the complaint, with

damages.

o The complaint was based upon the theory that a trust relation

was established and created with respect to the said

properties, with Atty. Filemon Sotto as TRUSTEE and as

cestuis que TRUST, his mother-in-law, Maria Fadullon

Vda. de Rallos; his wife, Carmen Rallos et al. Through sheer

manipulation, fraudulent acts and means, non-existent and

void decrees, fictitious sales and transfers, succeeded in

causing the transfer of the ownership of the properties to the

name of his wife Carmen Rallos, and finally to his name

alone.

Petitioner denied that there was any trust relation between

Don Filemon Sotto and Maria Fadullon Vda. de Rallos,

et al. That even if such relationship existed, such a

relationship could not have endured until the death of Don

Filemon Sotto; that more than 1 year have already

elapsed, the decrees had become indefeasible; that the

parcels of land, having been transferred to the purchasers

for value and in good faith, the present action for

reconveyance will not prosper; and assuming that there

was any trust relation.

CFI dismissed the complaint, holding that neither was

there an express nor an implied trust relation and that

there was actual partition between them.

The heirs appealed to the CA, and affirmed the judgment

of the lower court. No express trust was created by the

mere signing of the Mocion in behalf of the heirs of

Florentino Rallos;

On MR, CA reversed their earlier decision. However,

agreed that the heirs had "by manifesting to the probate

court that it was their desire to preserve and maintain the

ownership of the inherited properties thereby intended

and created by direct and positive acts an express trust

among themselves" as it was in conformity with the

evidence and the law. Atty. Sotto can be regarded as the

constructive trustee of his wife and of the widow and

descendants of Florentino Rallos.

ISSUE: Has express trust subsisted or was it repudiated?

Should Atty. Sotto be considered a party in the express trust or

merely a constructive trustee?

HELD: It may be true that the heirs of Florentino Rallos

intended and desired to keep the properties in co-ownership

pro-indiviso when they signed the Mocion (motion on the

disposition of assets) filed in their behalf to terminate the

probate proceedings. The legal effect of said agreement to

preserve the properties in co-ownership as expressed in

writing and embodied in the Mocion was to create a form of

an express trust among themselves as co owners of the

properties.

CO-OWNERSHIP is a form of trust and every co-owner is a

trustee for the other. The relationship of each co-owner to the

other co-owners is fiduciary in character and attribute. The

property or thing held pro-indiviso is impressed with a fiducial

nature that each co-owner becomes a trustee for the benefit of

his co-owners and he may not do any act prejudicial to the

interest of his co-owners.

4 |C o - O w n e r s h i p : A r t 4 8 4 - 4 9 3

Under the law on Trusts, it is not necessary that the

document expressly state and provide for the express trust,

for no particular words are required for the creation of an

express trust, it being sufficient that a trust is clearly

intended. (Art. 1444).

An EXPRESS TRUST is created by the direct and positive

acts of the parties, by some writing or deed or will or by words

evidencing an intention to create a trust.

In the case at bar, An express trust was created by the heirs in

respect to the properties in litigation when they agreed to

preserve said properties in co-ownership among themselves as

manifested and expressed into writing and filed as a pleading

captioned in Mocion.

RE SOTTO AS A CO-TRUSTEE:

Petitioner's argument is based on an incorrect assumption.

What the appellate court held was that Atty. Sotto can be

regarded as the constructive trustee of his wife and of the

widow and descendants of Florentino Rallos.

Shortly after the closure of the testate proceeding, Atty. Sotto

contracted marriage with one of the daughters of Florentino Rallos. The

attorney thereby became not only a family lawyer but also an actual

member on the Rallos family by affinity. By reason of his marriage to

Carmen Rallos, and on account of his prestige and tremendous social

and political influence, Atty. Sotto enjoyed and exercised a personal,

domestic, social, political and moral ascendancy and superiority not

only over his wife but also over Maria Fadullon, Concepcion Rallos,

and the latter's children. Upon the facts and under the law, Atty. Sotto

can be regarded as the constructive trustee of his wife and of the widow

and descendants of Florentino Rallos.

Atty. Sotto's special relationship with the Rallos heirs

inhibited him from any act or conduct that would put his

interests above, or in direct collision with, the interests of

those who had reposed their trust and confidence in him.

Filemon Sotto did not become a co-trustee by virtue of his

subsequent marriage to Carmen Rallos. The truth is he became

a constructive trustee not only by reason of his marriage to

Carmen Rallos but also on account of his prestige and

tremendous social and political influence.

RE PARTITION OF THE 5 LOTS:

Respondents' claim of partition as testified to by Pilar Teves,

was correct. Its ruling is based on the grounds of human

experience, that it is our culture and tradition to revere the

memory of our ancestor by keeping intact the estate in

inheritance as long as possible, and to help one's brothers and

sisters to benefit from the sweat and toil of our parents.

The facts show that all the lots were registered originally

before the alleged partition and adjudication. The acts of

registration preceded the supposed partition and adjudication

which inexplicably reversed the usual order of occurrence

which is, that partition and adjudication normally precede

registration. The conclusion is inescapable that petitioner's

version did not take place and that the registration of the lots

could not have resulted from the supposed partition and

adjudication.

RE PAROL EVIDENCE USED TO PROVED TRUST

There is no violation of Art. 1443 which provides that "no

express trust concerning an immovable or any interest therein

may be proved by parol evidence," is not applicable.

RE DISREGARD OF TORRENS TITLE

Petitioner's reasoning holds no water because from the very

nature of a trust relation which existed between Carmen

Rallos and her co-owners, she cannot obtain and secure a

torrens title to the properties in her name much less dispose of

them by testament to her husband, a constructive trustee, to

the prejudice and deprivation of the rights and interests of said

co-heirs.

A fiduciary relationship may exist even if the title to the

property subject to the trust appears in the name of the trustee

alone, because in cases of trusteeship, the legal title usually

appears in the name of the trustee, while the equitable title

remains with the cestui que trust. The principle holds that a

trustee who takes a Torrens title in his name cannot repudiate

the trust by relying on the registration, which is one of the

well-known limitations upon the finality of a decree of title.

Neither can the will executed by Carmen Rallos deprive the

private respondents of their ownership over the five parcels of

land. These lots were trust properties; Carmen Rallos was

holding them in trust for her sister and the latter's children.

Not being the absolute owner, Carmen Rallos could not

legally convey their ownership by including them in their will.

The last will and testament of Carmen Rallos was merely a

vehicle of an existing trust and therefore, Atty. Filemon Sotto

must be deemed to have received the properties not for himself

but for the benefit of the cestui que trust. And as a trustee Atty.

Sotto never alienated or disposed any of these properties

during his lifetime recognizing his position as trustee and

that he held them for the benefit and interest of the cestuis que

trust.

RE LACHES AND PRESCRIPTION

The fictitious transfer of the subject lot proved by the

testimony of the Private Secretary of Atty. Filemon Sotto does

not indicate a clear repudiation of the trust or of the co-

ownership; the alleged repudiation was not open, public

and deliberate. The acts, on the contrary, were secretive and

fraudulent assertions of exclusive ownership.

As a GENERAL RULE the former's possession is not adverse

and therefore cannot ripen into a title by prescription. Adverse

possession in such a case requires the concurrence of the

following circumstances: (a) that the trustee has performed

unequivocal acts of repudiation amounting to an ouster of the

cestui que trust; (b) that such positive acts of repudiation have

been made known to the cestui que trust; and (c) that the

evidence thereon should be clear and conclusive.

Such registrations were ineffective and not binding upon the

cestui que trust. SC is persuaded and convinced that the

circumstances required by said decisions are not present in the

case at bar.

5 |C o - O w n e r s h i p : A r t 4 8 4 - 4 9 3

LACHES v PRESCIPTION

Laches has been defined as the failure or neglect, for an

unreasonable and unexplained length of time, to do that which

by exercising due diligence, could or should have been done

earlier; it is negligence or omission to assert a right within a

reasonable time, warranting a presumption that the party

entitled to assert it either has abandoned it or declined to assert

it.

Estoppel rests on this rule: whenever a party has, by his

declaration, act or omission, intentionally and deliberately led

the other to believe a particular thing true, and to act, upon

such belief, he cannot, in any litigation arising out of such

declaration, act, or omission, be permitted to falsify it.

The doctrine of laches is not strictly applied between near

relatives, and the fact that the parties are connected by ties of

blood or marriage tends to excuse an otherwise unreasonable

delay.

In fiduciary relationship, the beneficiaries have the right to

rely on the trust and confidence reposed in the trustee. In the

case at bar, there being no effective repudiation of the express

trust created by and among the Rallos heirs, the defense of

laches invoked by petitioner is unvailing.

Atty. Sotto received from his wife, Carmen Rallos, the

properties under her will fully impressed with their fiduciary

character and in the full knowledge that said properties were

trust properties as far back in 1913 when he drafted and

prepared the Mocion Sobre la Disposicion de los Bienes and

filed the same in the probate proceedings. He became a trustee

of the trust properties, not as an innocent third party and

neither for a valuable consideration.

Notwithstanding the fact that the titles to the properties were

ultimately transferred to the name of Atty. Filemon Sotto,

widower, through administrative proceedings, the titling

thereof must be regarded as for the benefit and interest of the

cestui que trust, the private respondents herein.

There is no absolute rule as to what constitutes laches or

staleness of demand; each case is to be determined according

to its particular circumstances.

Private respondents are entitled to the relief prayed for, which

is for the reconveyance of the properties to them.

WHEREFORE, IN VIEW OF THE FOREGOING, the

judgment appealed from is hereby affirmed, with costs against

the petitioner.

**

TRUSTEE'S POSSESSION CANNOT RIPEN INTO

OWNERSHIP; EXCEPTION. — From the standpoint of

acquisitive prescription, or prescription of ownership, a

trustee's possession of a trust property as a general rule is not

adverse and therefore cannot ripen into a title by prescription.

Adverse possession in such a case requires the concurrence of

the following circumstances: (a) that the trustee has performed

unequivocal acts of repudiation amounting to an ouster of the

cestui que trust; (b) that such positive acts of repudiation have

been made known to the cestui que trust; and (c) that the

evidence thereon should be clear and conclusive.

6 |C o - O w n e r s h i p : A r t 4 8 4 - 4 9 3

[G.R. No. L-13281. August 31, 1960.]

Siari Valley Estates, Inc., petitioner, vs. Filemon Lucasan,

et al., respondents.

SYLLABUS

1. LEVY AND EXECUTION; NOTICES; REQUIREMENT IF

LAND IS REGISTERED; PURPOSE.

2. WHEN NOTICE IS LEGALLY INEFFECTIVE.

3. WHEN FAMILY HOME NOT EXEMPT FROM EXECUTION

FACTS: BAUTISTA ANGELO, J:

The CFI-Zamboanga del Norte rendered decision ordering

Filemon Lucasan to deliver to the Siari Valley Estates,

Inc. the cattle in his pasture or pay its value amounting to

P40K and damages in another sum of P40K. This was

affirmed in toto by the SC, which became final and

executory, a writ of execution was issued. The sheriff

proceeded to levy on certain parcels of lands belonging to

defendant, and were sold by the sheriff at public auction.

The judgment debtor failed to redeem the land within the

1-year period, thus, the sheriff issued in favor of the

purchaser the final certificate of sale, a copy was

registered. Upon petition of the corporation, a writ of

possession was issued directing the sheriff to place said

corporation in its possession. Despite the writ, the

corporation failed to take possession, hence it filed a

motion reiterating its petition that it be placed in their

possession.

Judgment debtor filed an opposition alleging that he has

erected a house and which he has extrajudicially

constituted as a family home, the rest being in possession

of third parties.

The court denied the opposition, and issued an order

directing the sheriff to place the corporation in possession

of the lands sold to it. Debtor filed an MR which was also

denied. But on a second MR, the court issued another

order allowing the corporation to take possession of all

the lands sold, with the exception of the parcel on which

the family home was constituted, holding that the levy

and sale were null and void. Hence this petition.

Parcel 1 is a registered land covered by OCT, and Patent

No, duly registered in the name of Filemon Lucasan. On

this land stands a big house in the amount of P23K. It was

constituted into a family home on June 21, 1955. Debtor

contended that said lot and house being a family home are

beyond the reach of judicial execution.

ISSUE: May the parcel of land be levied when the house on it

is constituted as family home?

HELD: The notice of levy described the property as

unregistered land and the same was registered under Act 3344.

In the notice of sale the property was described according to

what is in the tax declaration and not according to what

appears in the certificate of title. The rule provides that real

property shall "be levied on in like manner and with like

effect as under an order of attachment" (Rule 39). The

attachment shall be made "by filing with the register of deeds

a copy of the order, together with the description of the

property attached, and a notice that it is attached. The notice

shall contain a reference to the number of the certificate of

title and the volume and page in the registration book where

the certificate is registered.

The requirement that the notice of levy should contain a

reference to the number of the certificate of title and the

volume and page in the registration book where the certificate

is registered is made in order that the debtor as well as a third

person may be properly informed of the particular land or

property that is under the custody of the court. The situation

differs if the land is unregistered in which case it is enough

that the notice be registered under Act 3344.

"An attachment levied on real estate not duly recorded in the registry

of property is not an incumbrance on the attached property, nor can

such attachment, unrecorded in the registry, serve as a ground for

decreeing the annulment of the sale of the property, at the request of

another creditor." (Gonzales Diez vs. Delgado and Imperial).

Since the notice of levy made by the sheriff contains no such

reference, it follows that said notice is legally ineffective

and as such did not have the effect of binding the property

for purposes of execution. Consequently, the sale carried out

by virtue of said levy is also invalid and of no legal effect.

RE FAMILY HOME:

Article 243 (2) NCC provides that "The family home

extrajudicially formed shall be exempt from execution"

EXCEPT "for debts incurred before the declaration was

recorded in the Registry of Property."

Can a judgment for a sum of money be considered a debt

within the meaning of this provision even if said judgment is

still pending appeal?

The reason why a family home constituted after a debt had

been incurred is not exempt from execution is to protect the

creditor against a debtor who may act in bad faith by

resorting to such declaration just to defeat the claim

against him.

If the purpose is to protect the creditor from fraud it would be

immaterial if the debt incurred be undisputed or inchoate,

for a debtor acting in good faith would prefer to wait until his

case is definitely decided before constituting the family home.

Hence the money judgment in question comes within the

purview of the word debt used in Article 243 (2) of the new

Civil Code.

Wherefore, the order appealed from is hereby affirmed,

without prejudice on the part of petitioner to file a new

petition for execution following strictly the requirements of

the rule on the matter.

7 |C o - O w n e r s h i p : A r t 4 8 4 - 4 9 3

[G.R. No. 164110. February 12, 2008.]

Leonor B. Cruz, petitioner, vs. Teofila M. Catapang,

respondent.

FACTS: QUISUMBING, J : This petition for review seeks the

reversal of the Decision and the Resolution of the CA which

reversed the Decision of the RTC-Taal which had earlier

affirmed the Decision of the MCTC-Taal ordering respondent

to vacate and deliver possession of a portion of the lot co-

owned by petitioner, Luz Cruz and Norma Maligaya.

MCTC(for petitioner)RTC (affirmed)CA(reversed)

Petitioner and Norma Maligaya are the co-owners of a

parcel of land in Taal, Batangas. With the consent of

Norma, respondent built a house on a lot adjacent to the

parcel of land. The house intruded on a portion of the co-

owned property.

Petitioner was surprised to see a part of respondent's

house intruding unto a portion of the co-owned property.

She made several demands upon respondent to demolish

the intruding structure and to vacate the portion

encroaching on their property. Respondent refused and

disregarded her demands.

Petitioner filed a complaint for forcible entry against

respondent before MCTC which decided in favor of

petitioner, ruling that consent of only one of the co-

owners is not sufficient to justify defendant's construction

of the house and possession of the portion of the lot in

question

RTC affirmed the MCTC's ruling. MR was denied.

Respondent appealed to CA, which reversed the RTC's

decision. The CA found no cause of action for forcible

entry because respondent's entry into the property,

considering the consent given by co-owner Norma

Maligaya, cannot be characterized as one made through

strategy or stealth which gives rise to a cause of action for

forcible entry. MR was denied.

Respondent argues that since Norma Maligaya is residing

in the house she built, the issue is not just possession de

facto but also one of possession de jure since it involves

rights of co-owners to enjoy the property.

ISSUES: Were the knowledge and consent of a co-owner a

valid license to erect the bungalow on the premises owned

pro-indiviso sans consent from the other co-owner?

HELD: A co-owner cannot devote common property to his or

her exclusive use to the prejudice of the co-ownership. A co-

owner cannot give valid consent to another to build a house on

the co-owned property, which is an act tantamount to

devoting the property to his or her exclusive use.

Article 486 states each co-owner may use the thing owned in

common provided he does so in accordance with the purpose

for which it is intended and in such a way as not to injure the

interest of the co-ownership or prevent the other co-owners

from using it according to their rights.

Giving consent to a third person to construct a house on the

co-owned property will injure the interest of the co-ownership

and prevent other co-owners from using the property in

accordance with their rights.

Under Article 491, none of the co-owners shall, without the

consent of the others, make alterations in the thing owned in

common. It necessarily follows that none of the co-owners

can, without the consent of the other co-owners, validly

consent to the making of an alteration by another person, such

as respondent, in the thing owned in common. Alterations

include any act of strict dominion or ownership and any

encumbrance or disposition has been held implicitly to be an

act of alteration.

The construction of a house on the co-owned property is an act

of dominion. Therefore, it is an alteration falling under Article

491. There being no consent from all co-owners, respondent

had no right to construct her house on the co-owned property.

Consent of only one co-owner will not warrant the dismissal

of the complaint for forcible entry filed against the builder.

The consent given by Norma in the absence of the consent of

petitioner DID NOT VEST upon respondent any right to enter

into the co-owned property. Her entry into the property still

falls under the classification "through strategy or stealth".

Entry into the land effected clandestinely without the

knowledge of the other co-owners could be categorized as

possession by stealth. As such, respondent's acts constitute

forcible entry.

WHEREFORE, the petition is GRANTED. The Decision

dated and the Resolution of the CA are REVERSED and SET

ASIDE. The Decision of the Regional Trial Court, Branch 86,

Taal, Batangas is REINSTATED.

8 |C o - O w n e r s h i p : A r t 4 8 4 - 4 9 3

[G.R. No. 166519. March 31, 2009.]

Nieves Plasabas and Marcos Malazarte, petitioners, vs. CA,

Dominador Lumen, and Aurora Aunzo, respondents.

FACTS: NACHURA, J: Assailed in this petition for review on

certiorari (Rule 45) are the Decision of the CA and the

Resolution denying reconsideration of the challenged decision.

Petitioners filed a complaint for recovery of title to

property with damages before the CFI-Maasin against

respondents. The property subject of the case was a parcel

of coconut land in the name of petitioner Nieves.

Petitioners prayed that judgment be rendered confirming

their rights and legal title to the subject property and

ordering the defendants to vacate the occupied portion

and to pay damages.

Respondents denied petitioners' allegation of ownership

and possession of the premises, their main defense, that

the subject land was inherited by all the parties from their

common ancestor, Francisco Plasabas.

That petitioner Nieves, contrary to her allegations in the

complaint, was not the sole and absolute owner of the

land.

Respondents raised in their memorandum that the case

should have been terminated at inception for petitioners'

failure to implead indispensable parties, the other co-

owners — Jose, Victor and Victoria.

RTC dismissed the case without prejudice for failure to

implead the co-owners because final decree would

necessarily affect their rights

Petitioners elevated the case to the CA which affirmed the

ruling of the trial court. The CA, further, declared that the

non-joinder of the indispensable parties would violate the

principle of due process, and that Article 487 of the Civil

Code could not be applied considering that the complaint

was not for ejectment, but for recovery of title or a

reivindicatory action. MR was also denied.

ISSUE: Did CA err in affirming the dismissal of the case

without deciding on its merits?

HELD: The Court grants the petition and remands the case to

the trial court for disposition on the merits.

Article 487 provides that any one of the co-owners may bring

an action for ejectment. The article covers all kinds of actions

for the recovery of possession, including an accion publiciana

and a reivindicatory action.

A co-owner may file suit without necessarily joining all the

other co-owners as co-plaintiffs because the suit is deemed to

be instituted for the benefit of all. Any judgment of the court in

favor of the plaintiff will benefit the other co-owners, BUT if

the judgment is adverse, the same cannot prejudice the rights

of the unimpleaded co-owners.

With this disquisition, there is no need to determine whether

petitioners' complaint is one for ejectment or for recovery of

title. To repeat, Article 487 of the Civil Code applies to both

actions.

Thus, petitioners do not have to implead their co-owners as

parties. The ONLY EXCEPTION to this rule is when the

action is for the benefit of the plaintiff alone who claims to be

the sole owner and is, thus, entitled to the possession thereof.

In such a case, the action will not prosper unless the plaintiff

impleads the other co-owners who are indispensable parties.

Here, the allegation of petitioners that they are the sole owners

of the property in litigation is immaterial, considering that

they acknowledged during the trial that the property is co-

owned by Nieves and her siblings, and that petitioners have

been authorized by the co-owners to pursue the case on the

latter's behalf. IMPLEADING THE OTHER CO-OWNERS

IS NOT MANDATORY because the suit is deemed to be

instituted for the benefit of all.

RE DISMISSAL:

The trial and appellate courts committed reversible error

when they summarily dismissed the case. The rule is

settled that the non-joinder of indispensable parties is

not a ground for the dismissal of an action. The remedy

is to implead the non-party claimed to be indispensable.

Parties may be added by order of the court on motion of

the party or on its own initiative at any stage of the

action and/or at such times as are just.

If petitioner refuses to implead an indispensable party

despite the order of the court, the latter may dismiss the

complaint/petition for the plaintiff's/petitioner's failure to

comply therewith.

WHEREFORE, premises considered, the instant petition is

GRANTED, and the case is REMANDED to the trial court for

appropriate proceedings. The trial court is further DIRECTED

to decide on the merits of the civil case WITH DISPATCH.

9 |C o - O w n e r s h i p : A r t 4 8 4 - 4 9 3

[G.R. No. 146294. July 31, 2006.]

John Abing, petitioner, vs. Juliet Waeyan, respondent.

FACTS: GARCIA, J: In this appeal by way of a petition for

review (Rule 45), petitioner seeks to set aside the Decision of

the CA, reversing that of the RTC-Benguet which affirmed an

earlier decision of the MTC-Mankayan in an ejectment suit

commenced by the petitioner against the respondent.

MTC(for petitioner) RTC(affirmed) CA(reversed)

Parties met in 1986 and fell in love. They had a common-

law relations. They bought a 2-storey residential house in

Mankayan, Benguet. Consequent to the purchase, the tax

declaration was transferred in the name of respondent.

Respondent left for overseas employment in Korea, and

would send money to John who deposited the same in

their joint bank account.

They renovated the house, and annexed a new structure

which housed a sari-sari store. This new structure and

the sari-sari store thereat are the properties involved

in this case.

In 1995, they parted ways, and decided to partition their

properties. They executed a MOA which was left

unsigned by the parties although signed by the witnesses.

In this agreement, John shall leave the couples' dwelling

with Juliet paying him the amount of P428,870

representing his share in all their properties. On the same

date Juliet paid John P232,397 as partial payment. The

balance will be paid by Juliet in twelve monthly

installment beginning November 1995.

Respondent failed to make good the balance. Thus,

Petitioner demanded her to vacate the annex structure.

Respondent refused, prompting John to file an ejectment

suit against her before the MTC.

John alleged that he alone spent for the construction of

the annex structure with his own funds and thru money

he borrowed from his relatives. The tax declaration for

the structure was under his name. John claimed exclusive

ownership of the subject structure, which gave him the

right to eject Juliet therefrom upon the latter's failure to

pay the agreed balance. In her answer, Respondent

countered that their original house was renovated thru

their common funds and that the subject structure annexed

thereto was merely an attachment or an extension of their

original residential house, hence the same pertained to

the two of them in common.

MTC ruled that the same exclusively pertained to the

petitioner.

On respondent's appeal to the RTC, the latter affirmed

that of the MTC.

CA reversed that of the RTC, ruling that Juliet Waeyan is

entitled to possess the property and maintain her business.

John's cause of action should have been for a sum of

money "because he claims that Juliet still owes him the

payment for the extension."

ISSUE: Did CA err in holding that the subject premises is

owned by the two of them in common?

HELD: Evidence is wanting to support petitioner’s naked

claim. He even failed to reveal how much he spent. All that

petitioner could offer by way of reinforcing his claim of

spending his own funds and borrowed money in putting up the

subject structure was the affidavit executed by a certain

Manuel Macaraeg to the effect that petitioner borrowed P30K

from him. But Macaraeg stated in his affidavit that it was

sometime in 1990 when John borrowed said amount from him.

The subject structure was constructed two years after he

borrowed P30K, it is even doubtful whether the amount he

allegedly borrowed from the latter went into the

construction of the structure in dispute.

There is a paucity of evidence, testimonial or documentary, to

support petitioner's self-serving allegation that the annex

structure which housed the sari-sari store was put up thru his

own funds and/or money borrowed by him.

In this connection, Article 147 of the FC is instructive. That in

In the absence of proofs to the contrary, any property

acquired by common-law spouses during their period of

cohabitation is presumed to have been obtained thru their

joint efforts and is owned by them in equal shares. Their

property relationship is governed by the rules on co-

ownership. And under this regime, they owned their

properties in common "in equal shares." Being herself a

co-owner of the structure in question, respondent as ruled by

the CA, may not be ejected.

True, under Article 487, a co-owner may bring an action for

ejectment against a co-owner who takes exclusive possession

and asserts exclusive ownership of a common property. In this

case, evidence is totally wanting to establish John's or

Juliet's exclusive ownership of the property in question.

Neither did Juliet obtain possession by virtue of a contract,

express or implied, or thru intimidation, threat, strategy or

stealth. Respondent was in possession of the subject structure

and the sari-sari store by virtue of her being a co-owner

thereof. As such, she is as much entitled to enjoy its

possession and ownership as John.

The ruling of the CA that the subject MOA, being unsigned

parties, has no binding effect between them. However, As

correctly held by the CA, Juliet's failure to pay John the

balance of the latter's share in their common properties could

at best give rise to an action for a sum of money against Juliet,

or for rescission of the said agreement and not for ejectment.

WHEREFORE, the petition is DENIED and the assailed CA

Decision is AFFIRMED, except that portion thereof denying

effect to the parties' Memorandum of Agreement for being

unsigned by both.

10 |C o - O w n e r s h i p : A r t 4 8 4 - 4 9 3

[G.R. No. 32047. November 1, 1930.]

Manuel Melencio, et al., plaintiffs-appellants, vs. Dy Tiao

Lay, defendant-appellee.

SYLLABUS

1. COMMUNITY OF PROPERTY; ALTERNATIONS.

FACTS: OSTRAND, J: The plaintiffs brought the present

action against the defendant-appellee for the recovery of the

possession of a parcel of land in Cabanatuan. The plaintiffs

also demand an increased monthly rental for the use and

occupation of the parcel; and if it is found that the said

appellee was occupying the 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.

The defendant alleged that he was occupying the said

parcel land by virtue of a contract of lease executed in

favor of his predecessor-in-interest, and which contract is

still in force;

That the mother of the plaintiffs, as administratrix of the

estate of one of the original co-owners of the parcel of

land, recognized and ratified the existence and validity of

the contract because of the execution of a public

document, and by collecting from the assignees of the

original lessee the monthly rent.

It appears from the evidence that the land in question was

originally owned by Julian Melencio. He died leaving

his widow, Ruperta Garcia, and his 5 children (Juliana,

Ramon, Ruperta, Pedro, and Emilio). Emilio also died,

his minor son Jose P. Melencio succeeded to his interest

in the said parcel of land by representation.

A question has been raised if the land was community

property, but the evidence is undisputed that Ruperta

Garcia in reality held nothing but a widow's usufruct in

the land.

Ruperta Garcia, and children executed a contract of

lease of the land in favor of Yap Kui Chin, but neither

Jose nor Ramon were mentioned in the lease. The term of

the lease was for 20 years, extendible for a like period at

the option of the lessee.

The lessee took possession of the parcel in question and

erected the mill as well as the necessary buildings, and in

matters pertaining to the lease, he dealt with Pedro

Melencio who acted as manager of the property held in

common by the heirs of Julian Melencio. The original

lessee died and the lease was transferred twice more

before it came into the hands of Dy Tiao Lay.

Ramon (one of Julian’s children) died, his widow

Liberata, was appointed administratrix of his estate.

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.

The heirs of Julian made an extrajudicial partition of parts

of the inheritance. The land in question fell to the share of

the children of Ramon, who are the original plaintiffs in

the present case. Their mother, Liberta, as administratrix,

collected the rent for the lease at P20.20 per month until

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, the defendant was entitled

to an extension of the lease at the original rental. The

plaintiffs denied any knowledge of the existence of such a

contract of lease which was executed without their

consent and was void.

A copy of the contract of lease was found among the

papers of the deceased Pedro.

This 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.

ISSUE: Was the lease valid?

HELD: The contention of the appellants is that the contract of

lease (Exhibit C) is null and void, among the reason is that

calls for an alteration of the property in question, therefore

ought to have been signed by all the co-owners as by law

required in the premises.

The first proposition is based on article 397 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."

SC does not think that the alterations are of sufficient

importance to nullify the lease, especially so since none of the

co-owners objected to such alterations until over twenty years

after the execution of the contract of lease.

The court below based its decision on the case of Enriquez vs.

A. S. Watson & Co but an examination of the Enriquez case

will show that it differs materially from the present.

In that case all of the co-owners 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 co-owners

was a 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 CFI. In the

present case only a small majority of the co-owners

executed the lease in question.

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. There

is no proof that Ramon Melencio and his successor over 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

plaintiffs' knowledge of the lease must be required.

11 |C o - O w n e r s h i p : A r t 4 8 4 - 4 9 3

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 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

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 buildings 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.

Separate Opinions

JOHNSON, J.: I reserve my vote.

STREET and VILLAMOR, JJ., dissenting:

Although the name of Ramon Melencio, father of the plaintiffs

in this action, was not in fact signed to the lease in question,

and the lease did not even so much as mention him as one of

the co-owners, the undersigned are nevertheless of the opinion

that Ramon Melencio, and his children after him, are estopped

from questioning said lease, for the reason that, from 1905 to

the time of his death in 1914, Ramon Melencio enjoyed the

benefits of the lease, as did his widow and children after him,

until May, 1926, when the widow repudiated the lease, as a

preliminary to the bringing of this action by the plaintiffs. By

their acceptance of the benefits of the lease over so long a

period, the persons now questioning the lease and their father,

their predecessor in interest, are estopped to question the

authority for making the lease. This estoppel cures the want of

the special power contemplated in article 1548 of the Civil

Code.

In addition to the estoppel arising from the acceptance of

benefits under the lease, an estoppel further arises from the

fact that Ramon Melencio, during the years following the

execution of the lease, stood and saw the lessees place upon

the property improvements of a value of more than P100K for

which reason, also equity will not permit the lease to be

disturbed to the prejustice of the lessee.

12 |C o - O w n e r s h i p : A r t 4 8 4 - 4 9 3

[G.R. No. 171571. March 24, 2008.]

Republic of the Philippines, (MCIAA), petitioner, vs. Heirs of

Francisca Dignos-Sorono, et al., respondents.

FACTS: CARPIO-MORALES, J: Assailed via petition for

review on certiorari is the decision of the CA affirming that of

the RTC of Lapu-lapu City

Lot Nos. 2296 (A) and 2316 (B) were adjudicated on

(1929) by the CFI-Cebu in four equal shares.

The two lots were not partitioned by the adjudicatees.

The heirs of Tito Dignos, sold (1957) for P2,565.59 the

entire two lots to the then Civil Aeronautics

Administration (CAA) via a public instrument entitled

"Extrajudicial Settlement and Sale" without the

knowledge of respondents whose predecessors-in-interest

were the adjudicatees of the rest of the 3/4 portion of the

two lots.

Mactan Cebu International Airport Authority (MCIAA),

erected (1996) a security fence traversing Lot B and

relocated a number of families who had built their

dwellings within the airport perimeter, to a portion of said

lot.

Respondents soon asked the agents of MCIAA to cease

giving third persons permission to occupy the lots but the

same was ignored.

Respondents filed a Complaint for Quieting of Title,

Legal Redemption with Prayer for a Writ of Preliminary

Injunction against MCIAA before the RTC alleging that

the existence of the tax declarations "would cast a cloud

on their valid and existing titles" to the lots. They

alleged that "corresponding OCT in favor of the decreed

owners were issued, and in all probability, were lost

during the WWII." (This claim was not specifically

denied by petitioner).

Respondents further alleged that neither they nor their

predecessors-in-interests sold, alienated or disposed of

their shares in the lots of which they have been in

continuous peaceful possession.

Respondents furthermore alleged that neither petitioner

nor its predecessor-in-interest had given them any written

notice of its acquisition of the 1/4 share of Tito Dignos.

Petitioner maintained that from the time the lots were

sold to CAA, it has been in open, continuous, exclusive,

and notorious possession; through acquisitive

prescription (extra ordinary), it had acquired valid title

to the lots since it was a purchaser in good faith and for

value; At all events, petitioner contended that respondents'

action was barred by estoppel and laches.

The trial court found for respondents. That respondents

and their predecessors-in-interest were in peaceful and

continuous possession of their shares in the lots, and were

disturbed only in 1996. The trial court brushed aside

petitioner’s contention on the ground that registered lands

cannot be the subject of acquisitive prescription.

Neither had respondents' action prescribed, as actions for

quieting of title cannot prescribe if the plaintiffs are in

possession of the property in question.

The trial court held that the questioned sale was valid

only with respect to Tito Dignos' 1/4 share of the lots,

and that the sale was subject to the right of legal

redemption by respondents following Article 1088 of the

Civil Code.

Should any of the heirs sell his hereditary rights to a stranger before

partition, any or all of the co-heirs may be subrogated to the rights of

the purchaser by reimbursing him for the price of the sale, provided they

do so within the period of one month from the time they were notified

in writing of the sale by the vendor.

RTC held that the period for legal redemption had not yet

lapsed; and the redemption price should be 1/4 of the

purchase price paid by the CAA for the two lots.

CA affirmed the trial court's decision.

ISSUE: Did CA err in affirming the trial court's decision?

NO.

HELD: Article 493 provides:

Each co-owner shall have the full ownership of his part and of the

fruits and benefits pertaining thereto, and he may therefore alienate,

assign or mortgage it, and even substitute another person in its

enjoyment, except when personal rights are involved. But the effect of

the alienation of the mortgage, with respect to the co-owners, shall be

limited to the portion which may be allotted to him in the division upon

the termination of the co-ownership.

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.

CAA thus acquired only the rights pertaining to the sellers-

heirs of Tito Dignos, which is only 1/4 undivided share of the

two lots.

RE redemption price Article 1088 applies. The Court may

take judicial notice of the increase in value of the lots. And as

mentioned, the heirs of Tito Dignos did not notify respondents

about the sale. At any rate, since the Extrajudicial Settlement

and Sale stipulates, thus:

That the HEIRS-VENDORS, their heirs, assigns and successors,

undertake and agree to warrant and defend the possession and

ownership of the property/ies herein sold against any and all just claims

of all persons whomsoever and should the VENDEE be disturbed in its

possession, to prosecute and defend the same in the Courts of Justice

petitioner is not without any remedy. This decision is,

therefore, without prejudice to petitioner's right to seek redress

against the vendors-heirs of Tito Dignos and their successors-

in-interest.

WHEREFORE, the petition is, in light of the foregoing

disquisition, DENIED.

13 |C o - O w n e r s h i p : A r t 4 8 4 - 4 9 3

[G.R. No. 163744. February 29, 2008.]

Metropolitan Bank And Trust Co., petitioner, vs. Nicholson

Pascual a.k.a. Nelson Pascual, respondent.

FACTS: VELASCO, JR., J:

Respondent and Florencia Nevalga got married (1985).

Florencia bought from spouses Sering a 250-sqm lot with

a three-door apartment in Makati City. TCT was issued in

the name of Florencia, "married to Nelson Pascual."

Florencia filed a suit for the declaration of nullity of

marriage (1994). After trial, the RTC-QC declared the

marriage null and void. The dissolution and liquidation of

the ex-spouses' conjugal partnership of gains followed.

The couple did not liquidating their conjugal partnership.

Florencia together with spouses Oliveros, obtained

(1997) a PhP58M loan from petitioner secured by several

real estate mortgages (REMs) on their properties,

including the subject conjugal property. Among the

documents Florencia submitted was a document

denominated as "Waiver" that respondent purportedly

executed (1995), which did not incidentally include the

lot in question.

Due to the failure to pay their loan obligation when it fell

due, Metrobank initiated foreclosure proceedings. At the

auction sale, Metrobank emerged as the highest bidder.

Respondent got wind of the foreclosure proceedings.

Thus, he filed before the RTC a Complaint to declare the

nullity of the mortgage of the disputed property. He

alleged that the property is still conjugal property and was

mortgaged without his consent.

Metrobank alleged that the disputed lot was paraphernal,

and asserted having approved the mortgage in good faith.

The RTC Declared the REM Invalid. RTC invoked Art.

116 FC, providing that "all property acquired during the

marriage, whether the acquisition appears to have been

made, contracted or registered in the name of one or both

spouses, is presumed to be conjugal unless the contrary is

proved." That the disputed property may not be validly

encumbered by Florencia without Nicholson's consent.

The trial court also declared Metrobank as a mortgagee in

bad faith.

Metrobank's MR was denied.

The CA Affirmed with Modification the RTC's Decision.

Moral damages and attorney's fees were ordered deleted.

Metrobank moved but was denied reconsideration by the

CA.

ISSUE:

a. Did CA err in declaring subject property as conjugal by

applying Article 116 FC? NO.

b. Did CA err in not holding that the declaration of nullity

of marriage ipso facto dissolved the regime of community of

property of the spouses? NO. Art 493 governs.

HELD:

The Disputed Property is Conjugal

First, while Metrobank is correct in saying that Art. 160 of the

Civil Code, the Family Code, is the applicable legal provision

since the property was acquired prior to the enactment of the

Family Code, IT ERRS in its theory that there must be a

showing that the property was acquired during marriage using

conjugal funds.

Second, if proof obtains on the acquisition of the property

during the existence of the marriage, then the presumption of

conjugal ownership applies. The correct lesson of Francisco

and Jocson is that proof of acquisition during the marital

coverture is a condition sine qua non for the operation of

the presumption in favor of conjugal ownership.

Termination of Conjugal Property Regime does not ipso facto

End the Nature of Conjugal Ownership

While the declared nullity of marriage severed the marital

bond and dissolved the conjugal partnership, the character of

the properties acquired before such declaration continues to

subsist as conjugal properties until and after the liquidation

and partition of the partnership.

In Dael v. Intermediate Appellate Court, SC ruled that

pending its liquidation following its dissolution, the conjugal

partnership of gains is converted into an implied ordinary

co-ownership among the surviving spouse and the other

heirs of the deceased.

In this pre-liquidation scenario, Art. 493 NCC shall govern

the property relationship between the former spouses, where:

Each co-owner shall have the full ownership of his part and of the

fruits and benefits pertaining thereto, and he may therefore alienate,

assign or mortgage it, and even substitute another person in its

enjoyment, except when personal rights are involved. But the effect of

the alienation or the mortgage, with respect to the co-owners, shall be

limited to the portion which may be allotted to him in the division upon

the termination of the co-ownership.

In the case at bar, Florencia constituted the mortgage on the

disputed lot (1997), or a little less than two years after the

dissolution of the conjugal partnership, but before the

liquidation of the partnership. What governed the property

relations of the former spouses when the mortgage was given

is Art. 493. Under it, Florencia has the right to mortgage or

even sell her one-half (1/2) undivided interest in the disputed

property even without the consent of Nicholson.

Therefore, the rights of Metrobank, as mortgagee, are limited

only to the 1/2 undivided portion that Florencia owned. The

remaining 1/2 is null and void, Nicholson not having

consented to the mortgage of his undivided half.

WHEREFORE, the petition is PARTLY GRANTED. The

appealed Decision of the CA upholding with modification the

Decision of the RTC-Makati City is AFFIRMED with the

MODIFICATION that the REM over the lot covered by TCT

No. 156283 of the Registry of Deeds of Makati City is hereby

declared valid only insofar as the pro indiviso share of

Florencia thereon is concerned.

14 |C o - O w n e r s h i p : A r t 4 8 4 - 4 9 3

[G.R. No. 160956. February 13, 2008.]

Joaquin Quimpo, Sr., petitioners, vs. Consuelo Abad vda.

De Beltran, et al, respondents.

FACTS: NACHURA, J: This Petition for Review on Certiorari

assails the Decision of the CA, and the Resolution denying the

motion for its reconsideration.

Eustaquia Perfecto-Abad was the owner of several

parcels of land in Camarines Sur. She died intestate

(1948) leaving these parcels of land to her grandchild and

great grandchildren, namely, Joaquin Quimpo and

respondents.

Joaquin and respondents undertook an oral partition of

parcel III and parcel IV. Half of the properties was given

to Joaquin and the other half to the respondents. No

document of partition was executed because Joaquin

refused to execute a deed. Consuelo and Ireneo occupied

their respective shares in parcel III, and installed several

tenants over their share in parcel IV. Joaquin became the

administrator of the remaining undivided properties and

of the shares of respondents Danilo, Marites, Anita and

Helen, who were still minors at that time.

When respondents Danilo, Marites, Anita and Helen

wanted to take possession of the portions allotted to them,

but Joaquin prevented them from occupying the same.

Joaquin also refused to heed respondents' demand for

partition of parcels I and II, prompting respondents to file

a complaint for judicial partition and/or recovery of

possession with the RTC-Camarines Sur.

Joaquin denied the material allegations and asserted

absolute ownership over parcels III and IV, claiming that

he purchased these lands from Eustaquia evidenced by

deeds of sale (1946). He, likewise, claimed continuous,

peaceful and adverse possession. That Consuelo's

occupation of the portion of the San Jose property was by

mere tolerance. He died during the pendency of the case

and was substituted by his wife and his children.

RTC rendered a Decision in favor of respondents,

declaring them as co-owners of all the properties left by

Eustaquia, and declared void the purported deeds of sale

executed by Eustaquia for lack of consideration and

consent. The RTC also sustained the oral partition among

the heirs in 1966.

On appeal, the CA affirmed the RTC ruling. The CA also

rejected petitioners' argument that the action was barred

by prescription and laches, explaining that prescription

does not run against the heirs so long as the heirs, for

whose benefit prescription is invoked, have not

expressly or impliedly repudiated the co-ownership.

The CA found no repudiation on Joaquin's part. It,

therefore, concluded that respondents' action could not be

barred by prescription or laches.

ISSUE:Did CA err in ruling that co-ownership exists among

petitioners and respondents over the subject parcels of land?

NO.

HELD: The contention has no merit.

RE LACK OF CONSIDERATION: Respondents established

that at the time of the purported sale Joaquin Quimpo was not

gainfully employed. No other testimonial or documentary

evidence was offered to prove that Joaquin was duly employed

and had the financial capacity to buy the subject properties in

1946.

RE LACK OF CONSENT: Both the trial court and the CA

found that Eustaquia was already mentally incapacitated by

then, and could no longer be expected to give her consent to

the sale.

RE ABSOLUTE DOMINION: Petitioners presented Tax

Declarations all in the name of Eustaquia. Therefore, enervate

their claim instead.

RE ORAL PARTITION: For 43 years, Consuelo and Ireneo

occupied their portions of the San Jose property and

significantly, Joaquin never disturbed their possession. They

also installed tenants in parcel IV, and Joaquin did not

prevent them from doing so, nor did he assert his ownership

over the same. These point to the fact that there was indeed an

oral partition of parcels III and IV.

From Maglucot-Aw v. Maglucot and Hernandez v. Andal, it

has been held that parol partitions may be sustained on the

ground of estoppel of the parties to assert the rights of a

tenant in common as to parts of land divided by parol

partition as to which possession in severalty was taken and

acts of individual ownership were exercised. And a court of

equity will recognize the agreement and decree it to be valid

and effectual for the purpose of concluding the right of the

parties as between each other to hold their respective parts in

severalty.

A parol partition may also be sustained on the ground that

the parties thereto have acquiesced in and ratified the partition

by taking possession in severalty, exercising acts of

ownership with respect thereto, or otherwise recognizing the

existence of the partition.

Similarly, SC affirms the CA ruling that respondents are co-

owners of the subject 4 parcels of land, having inherited the

same from a common ancestor.

Jurisprudence is replete with rulings that any CO-OWNER

may demand at any time the partition of the common property

unless a co-owner has repudiated the co-ownership. This

action for partition does not prescribe and is not subject to

laches.

WHEREFORE, the petition is DENIED. The Decision and

Resolution of the CA are AFFIRMED.

15 |C o - O w n e r s h i p : A r t 4 8 4 - 4 9 3

[G.R. No. 170080. April 3, 2007.]

Consolacion Q. Austria, petitioner, vs. Constancia Q.

Lichauco, et al, respondents.

FACTS: TINGA, J: Petitioner assails the Decision of the CA

and its Resolution, which respectively affirmed the decision of

the RTC-Makati and denied petitioner's MR.

Parties are siblings nephews and niece. They are co-

owners of 2 parcels of land with an aggregate area of 661

sqm located in Palanan. The parcels of land have

permanent improvements which straddle both lots,

namely, a residential bungalow and 2 units, two-storey

apartments, the titles are registered jointly in the names of

the parties as CO-OWNERS.

The plaintiffs-appellees allege that they informed (1996)

defendant-appellant of their desire to have the subject

properties partitioned based on the percentage of each co-

owner's respective share.

Defendant-appellant Austria refused to accede to any of

the schemes presented by the realtor for the physical

apportionment of the subject properties between the co-

owners thereof.

Plaintiffs-appellees filed a complaint with the RTC

against the defendant-appellant Austria and two other

defendants as unwilling co-plaintiffs for partition of the

subject property.

<procedural maneuverings>

The assailed lower lower court ruled in favor of the

plaintiffs-appellees.(respondents).

<more procedural maneuverings from Austria>

Petitioner elevated the case to the CA which dismissed

her petition and affirmed the trial court's decision but

deleted the order that petitioner pay reasonable rental for

her use of a portion of the disputed properties. The

appellate court denied reconsideration.

Respondents allege that they cannot be compelled to

remain in co-ownership only because of petitioner's

unjustified refusal to consent to a partition.

ISSUE: Did the lower court err in allowing the sale of the

entire property in dispute? YES.

HELD: There are TWO STAGES in every action for partition.

FIRST PHASE is the determination of whether a co-

ownership in fact exists and a partition is proper, i.e., not

otherwise legally proscribed, and may be made by voluntary

agreement of all the parties interested in the property. This

phase may end either:

(a) with a declaration that plaintiff is not entitled to have

a partition either because a co-ownership does not exist,

or partition is legally prohibited; or

(b) with a determination that a co-ownership does in

truth exist, partition is proper in the premises, and an

accounting of rents and profits received by the defendant

from the real estate in question is in order.

In the latter case (B), the parties may, if they are able to agree,

make partition among themselves by proper instruments of

conveyance, and the court shall confirm the partition so agreed

upon.

The SECOND PHASE commences when it appears that the

parties are unable to agree upon the partition directed by the

court. In that event, partition shall be done for the parties

by the court with the assistance of not more than 3

commissioners. This second stage may well also deal with the

rendition of the accounting itself and its approval by the court

after the parties have been accorded opportunity to be heard

thereon, and an award for the recovery by the party or parties

thereto entitled of their just share in the rents and profits of

the real estate in question.

In the case at bar, the proceedings have only reached the first

phase.

There is no question that a co-ownership exists between

petitioner and respondents. To this extent, the trial court was

correct in decreeing partition in line with the Civil Code

provision that no co-owner shall be obliged to remain in the

co-ownership.

The trial court went astray when it also authorized the sale of

the subject properties to a third party and the division of the

proceeds thereof.

The trial court conditioned the sale upon the price and terms

acceptable to respondents only, and adjudicated the proceeds

of the sale again only to respondents- this is objectionable.

WHEREFORE, the petition is GRANTED IN PART. The

Decision of the CA is REVERSED in so far as it affirms the

portion of the decision of the RTC-Makati City which

authorizes the sale, conveyance or transfer of the properties

subject of this case and the division of the proceeds of said

sale to respondents herein.

The Decision and Resolution are AFFIRMED in all other

respects.

16 |C o - O w n e r s h i p : A r t 4 8 4 - 4 9 3

[G.R. No. 163081. June 15, 2007.]

Anita Ungab-Valeroso, petitioners, vs. Amancia Ungab-

Grado, et al, respondents.

FACTS: QUISUMBING, J: This petition for review assails

both the Decision of the CA and its Resolution which denied

petitioners' MR. The CA had affirmed with modification the

Decision of the RTC-Iligan City.

Subject of this case is a 14 hectare land in Binuni, Lanao

registered in the name of Timoteo Ungab under an OCT.

Petitioner is the only child of Timoteo, now deceased.

Respondent Felix Ungab is the brother of Timoteo while

the other respondents are the heirs of Timoteo's other

brothers and sisters.

The heirs of Ciriaco Ungab filed a complaint in the CFI

against the brothers, sisters and heirs of Timoteo for the

partition, accounting and reconveyance of the subject

land. The parties submitted a written compromise

agreement.

The CFI rendered judgment adopting in toto the

compromise agreement.

The parties did not have the land partitioned but divided

the proceeds of the land in accordance with the decision.

However, Anita refused to give respondents their

respective shares. Thus, Respondents filed against

petitioners Anita and her husband a complaint for

recovery of possession, partition, enforcement of

compromise agreement and damages.

During the pre-trial, respondents presented in court the

affidavit of Timoteo acknowledging that he co-owned

with his brothers and sisters, Simeona, Eugenia,

Lorenzo, Lazaro, Felix and Margarito, a parcel of land

with an area of 19 hectares in Binuni. Respondents also

presented the Affidavit of Acknowledgment of Anita

Ungab and her mother acknowledging the rights of

Simeona, Eugenia, Lorenzo, Lazaro, Felix and

Margarito as co-owners of the land.

In their defense, the Spouses Anita and Ruselo claimed

that Anita exclusively owns the land as sole heir of

Timoteo. Anita was not privy to the compromise

agreement.

RTC held that the compromise agreement bound all the

parties including their heirs and assigns, and Timoteo's

affidavit whose presumption of regularity petitioners

failed to overcome, and the compromise agreement

created an express trust which has not yet prescribed.

Petitioners elevated the case to the Court of Appeals,

which affirmed the trial court's decision.

ISSUE:

Were respondents co-owners of the subject parcel of land?

YES.

Was the respondents' suit for partition in the court below

legal? YES.

HELD: SC agrees that the instant case does not involve

successional rights as correctly pointed out by respondents,

who are claiming an alleged right of co-ownership existing

prior to the issuance of the land title in the name of Timoteo.

The records lack evidence sufficiently showing that the land

covered by Homestead Application referred to in the Affidavit

of Timoteo is the same land covered by the OCT which

originated from a Homestead Patent No. The records do not

show whether Homestead Application was the one granted in

Homestead Patent. The court cannot just fill in the deficiency

in the evidence submitted by the concerned parties.

However, that even there is still evidence on record proving

that the respondents and Timoteo indeed own the land in

common. For one, there is the Affidavit of Acknowledgment.

The truth or falsehood of the Affidavit of Acknowledgment is

a question of fact, of which this Court cannot take cognizance.

But since it is a notarized document, it enjoys the presumption

of regularity. Petitioners' allegation that she was misled by her

mother into signing the affidavit could not overcome this

presumption.

RE PRESCRIPTION: This claim is unmeritorious. When the

parties started sharing the proceeds of the land, they had in

effect partially executed the compromise agreement and the

judgment. Such partial execution weighs heavily as evidence

that they agreed on the co-ownership arrangement. Note also

that the judgment did not explicitly order the partition of the

land itself, but merely identified the rights to and respective

shares of the parties in said land.

Petitioners argue that the co-ownership was already

extinguished because the Civil Code provides that an

agreement to keep a thing undivided shall not exceed ten

years. But this term limit may be extended. The action to

reconvey does not prescribe so long as the property stands

in the name of the trustee. To allow prescription would be

tantamount to allowing a trustee to acquire title against his

principal and true owner.

The Affidavit of Acknowledgment AND the compromise

agreement established an express trust wherein the

respondents, as trustors, reposed their confidence on

petitioner as trustees, that they will hold the land subject of

the co-ownership. There are no particular words required in

the creation of an express trust, it being sufficient that a trust is

clearly intended This express trust is shown in the two

documents. Express trusts do not prescribe except when the

trustee repudiates the trust.

In the present case, the Affidavit of Acknowledgment AND the

compromise agreement were presented not to show how

respondents acquired their rights over the property but as

proof that their rights therein exist.

WHEREFORE, the petition is DENIED for lack of merit. The

Decision and the Resolution of the CA are AFFIRMED.

17 |C o - O w n e r s h i p : A r t 4 8 4 - 4 9 3

[G.R. No. L-22621. September 29, 1967.]

Jose Maria Ramirez, plaintiff-appellee, vs. Jose Eugenio

Ramirez, et al, defendants-appellants, Angela M. Butte,

defendant-appellee.

SYLLABUS

1. CO-OWNERSHIP PROPERTY; WHERE DIVISION

THEREOF IS PROPER.

2. EXPENSES OF DIVISION TO BE DEFRAYED BY PARTIES

BENEFITED.

FACTS: CONCEPCION, C.J: Appeal by the defendants from

a decision of the CFI-Manila.

Plaintiff brought this action against defendants for the

partition of a parcel of land situated at the Northwestern

corner of Escolta particularly described in a TCT and

belonging pro indiviso to both parties, one sixth (1/6) to

the plaintiff and five-sixths (5/6) to the defendants.

2 of the defendants expressed its conformity to the

partition, the other defendants objected to the physical

partition 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 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.

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 be paid by both parties proportionately.

ISSUE:

1) Did CFI err in holding that said property is legally

susceptible of physical division? NO.

2) Did CFI err in accepting the recommendation of

commissioner Valencia? NO.

3) Did CFI err in not ordering that the incidental expenses be

borne exclusively by petitioner? NO.

HELD: first alleged error: No evidence has been introduced in

support of this allegation. The same is predicated upon the

assumption that a real estate suitable for commercial purposes

is likely to suffer a proportionately great diminution in value

when its area becomes too small. If plaintiff's share were

segregated from the property in question, there would still

remain a lot of 1,300 sqm for appellants. This size is not

inconsequential. In other words, its value would be not be

impaired on account of the segregation of plaintiff's share.

Appellants argue that plaintiffs share should be sold to them.

Citing the provision of Article 495 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 assume that the alleged "inestimable damage" is

equivalent to rendering it "unserviceable for the use for

which it is intended." The alleged "inestimable damage" has

not been established, the conclusion drawn by appellants does

not follow necessarily.

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. In fact, every one of the aforementioned

commissioners, including the one representing defendants

recommended the segregation of plaintiff's share. The

commissioners merely failed to agree on the precise

configuration.

second issue: The record does not show that this offer of the

plaintiff had not been "taken into consideration" by the lower

court. 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.

As regards the last alleged error, it is obvious that the

segregation of plaintiff's share inures to the benefit not only to

the plaintiff, but, also, of the defendants, and that both should,

consequently, defray the incidental expenses.

WHEREFORE, the decision appealed from is hereby

affirmed, with the costs of this instance against herein

defendants-appellants.

18 |C o - O w n e r s h i p : A r t 4 8 4 - 4 9 3

[G.R. No. 76351. October 29, 1993.]

Virgilio B. Aguilar, petitioner, vs. CA and Senen B. Aguilar,

respondents.

SYLLABUS

3. CO-OWNERSHIP; RIGHT OF CO-OWNER OVER AN

INDIVISIBLE PROPERTY

4. TERMINATION THEREOF; EFFECT; CASE AT BAR.

FACTS: BELLOSILLO, J: This is a petition for review on

certiorari seeking to reverse and set aside the Decision of the

CA declaring null and void the orders and the judgment by

default and the order of then CFI-Rizal and directing the trial

court to set the case for pre-trial conference.

Petitioner Virgilio and respondent Senen are brothers;

Virgilio is the youngest and 7th children of the late

Maximiano Aguilar, while Senen is the fifth. The brothers

purchased a house and lot in Parañaque where their

father could spend and enjoy his remaining years in a

peaceful neighborhood. Initially, they agreed that

Virgilio's share in the co-ownership was 2/3 while that of

Senen was 1/3. By virtue of a written memorandum they

agreed that their interests in the house and lot should be

equal, with Senen assuming the remaining mortgage

obligation of the original owners with the SSS in

exchange for his possession and enjoyment of the house

together with their father.

Virgilio was then disqualified from obtaining a loan from

SSS, they agreed that the deed of sale would be executed

and the title registered in the meantime in the name of

Senen.

The father died, petitioner demanded from private

respondent that the latter vacate the house and that the

property be sold and proceeds thereof divided among

them.

Respondent refused; Thus petitioner filed an action to

compel the sale of the house and lot so that the they could

divide the proceeds between them. Petitioner prayed that

the proceeds be divided on the basis of two-thirds (2/3) in

his favor and one-third (1/3) to respondent. Petitioner

also prayed for monthly rentals for the use of the house by

respondent after their father died.

Respondent had no objection to the sale as long as the

best selling price could be obtained; but the proceeds

should be divided equally; and, that being a co-owner, he

was entitled to the use and enjoyment of the property.

<procedural issues re pre trial.>

CFI rendering judgment found the brothers to be co-

owners of the house and lot in equal shares on the basis

of their written agreement. But it ruled that plaintiff has

been deprived of his participation in the property by

defendant's continued enjoyment of the house and lot, free

of rent, despite demands for rentals and continued

maneuvers of defendant to delay partition. The trial court

also upheld the right of plaintiff as co-owner to demand

partition. That the property should be sold to a third

person and the proceeds divided equally between the

parties. The trial court likewise ordered defendant to

vacate the property and pay plaintiff rentals.

Defendant sought relief from the CA, which set aside the

order of the trial court as well as the assailed judgment

rendered by default. Hence this petition.

ISSUES: Did the trial court correctly declared respondent in

default for his failure to appear at the pre-trial and in allowing

petitioner to present his evidence ex-parte? YES.

HELD: The law is clear that the appearance of parties at the

pre-trial is mandatory. A party who fails to appear at a pre-

trial conference may be non-suited or considered as in default.

CA did not act wisely in overruling the denial. SC sustains the

trial court and rule that it did not abuse its discretion in

denying the postponement for lack of merit. Respondent at

least should have personally appeared in order not to be

declared as in default.

RE MERITS OF THE CASE:

On the basis of the pleadings of the parties and the evidence

presented ex parte, petitioner and respondents are co-owners

of subject house and lot in equal shares; either one of them

may demand the same of the house and lot at any time and the

other cannot object to such demand; thereafter the proceeds of

the sale shall be divided equally according to their respective

interests.

SC upholds the trial court in ruling in favor of petitioner,

except as to the effectivity of the payment of monthly rentals

by respondent as co-owner which SC here declare to

commence only after the trial court ordered respondent to

vacate.

Article 494 of the Civil Code provides that no co-owner shall

be obliged to remain in the co-ownership, and that each co-

owner may demand at any time partition of the thing owned in

common insofar as his share is concerned. Corollary to this

rule, Art. 498 of the Code states that whenever the thing is

essentially indivisible and the co-owners cannot agree that it

be allotted to one of them who shall indemnify the others, it

shall be sold and its proceeds accordingly distributed.

However, being a co-owner respondent has the right to use the

house and lot without paying any compensation to petitioner,

as he may use the property owned in common so long as it is

in accordance with the purpose for which it is intended and in

a manner not injurious to the interest of the other co-owners.

Until a division is made, the respective share of each cannot

be determined and every co-owner exercises, together with

his co-participants joint ownership over the pro indiviso

property, in addition to his use and enjoyment of the same.

justice and equity demand that respondent and his family

vacate the property so that the sale can be effected

immediately. Respondent should pay a rental from the time

the trial court ordered him to vacate.

When petitioner filed an action to compel the sale of the

property and the trial court granted the petition and ordered

the ejectment of respondent, the co-ownership was deemed

terminated and the right to enjoy the possession jointly also

ceased.

19 |C o - O w n e r s h i p : A r t 4 8 4 - 4 9 3

[G.R. No. 176858. September 15, 2010.]

Heirs of Juanita Padilla, petitioners, vs. Dominador

Magdua, respondent.

FACTS: CARPIO, J: Before the Court is a petition for review

on certiorari assailing the Orders of the RTC-Tacloban City.

Juanita Padilla, the mother of petitioners, owned a piece

of land in Tanauan, Leyte. After Her death , petitioners as

legal heirs of Juanita, sought to have the land partitioned.

Petitioners informed their eldest regarding their plans.

Petitioners were surprised that Ricardo had declared the

land for himself, prejudicing their rights as co-heirs. It

was then discovered that Juanita had allegedly executed a

notarized Affidavit of Transfer of Real Property making

him the sole owner of the land. The records do not show

that the land was registered under the Torrens system.

Petitioners filed an action with the RTC for recovery of

ownership, possession, partition and damages. Petitioners

sought to declare void the sale of the land by Ricardo's

daughters to respondent. They alleged that Ricardo,

through misrepresentation, had the land transferred in his

name without the consent and knowledge of his co-heirs.

Petitioners further alleged that Juanita executed a written

instrument stating that she would be leaving behind to her

children the land which she had inherited from her

parents.

Dominador filed a motion to dismiss on the ground of

lack of jurisdiction; should be in MTC.

RTC dismissed the case for lack of jurisdiction. The

assessed value was P590.00. Petitioners filed an MR

arguing that the action was not merely for recovery of

ownership and possession, partition and damages but also

for annulment of deed of sale- action beyond pecuniary

estimation. Dominador filed another MD on the ground of

prescription.

RTC reconsidered its previous stand and took cognizance

of the case. Nonetheless, the RTC denied the motion for

reconsideration and dismissed the case on the ground of

prescription. The case was filed only in 2001 or more

than 30 years since the Affidavit was executed in 1966.

The RTC explained that while the right of an heir to his

inheritance is imprescriptible, yet when one of the co-

heirs appropriates the property as his own to the

exclusion of all other heirs, then prescription can set in.

ISSUE: Is whether the present action already barred by

prescription?

HELD: SC finds that the conclusion of the RTC in dismissing

the case on the ground of prescription is speculative.

The RTC incorrectly relied on the Affidavit alone in order to

dismiss the case without considering petitioners' evidence. The

facts show that the land was sold to Dominador by Ricardo's

daughters during the lifetime of Ricardo. However, the

alleged deed of sale was not presented as evidence and

neither was it shown that Ricardo's daughters had any

authority from Ricardo to dispose of the land.

Aside from the Affidavit, Dominador did not present any

proof to show that Ricardo's possession of the land had been

open, continuous and exclusive for more than 30 years in

order to establish extraordinary acquisitive prescription.

He merely assumed that Ricardo had been in possession of the

land for 30 years based on the Affidavit submitted to the RTC.

The petitioners alleged that Ricardo left the land after he

separated from his wife sometime after 1966 and moved to

another place. The records do not mention, however, whether

Ricardo had any intention to go back to the land or whether

Ricardo's family ever lived there.

Moreover, Ricardo and petitioners are co-heirs or co-

owners of the land. Co-heirs or co-owners cannot acquire by

acquisitive prescription the share of the other co-heirs or co-

owners ABSENT a clear repudiation of the co-ownership, as

expressed in Article 494.

Since possession of co-owners is like that of a trustee, in

order that a co-owner's possession may be deemed adverse to

the cestui que trust or other co-owners, the following

requisites must concur: (1) that he has performed unequivocal

acts of repudiation amounting to an ouster of the cestui que

trust or other co-owners, (2) that such positive acts of

repudiation have been made known to the cestui que trust or

other co-owners, and (3) that the evidence thereon must be

clear and convincing.

In the present case, all three requisites have been met. After

Juanita's death, petitioners sought for the partition of their

mother's land. The heirs, including Ricardo, were notified

about the plan. Ricardo, through a letter notified petitioners, as

his co-heirs, that he adjudicated the land solely for himself.

Accordingly, Ricardo's interest in the land had now become

adverse to the claim of his co-heirs after repudiating their

claim of entitlement to the land.

In the present case, the prescriptive period began to run

only from 5 June 1998, the date petitioners received notice of

Ricardo's repudiation of their claims to the land. Only a mere

three years had lapsed. This three-year period falls short of the

10-year or 30-year acquisitive prescription period required by

law in order to be entitled to claim legal ownership over the

land. Thus, Dominador cannot invoke acquisitive

prescription.

Thus, SC directs the RTC to try the case on the merits to

determine who among the parties are legally entitled to the

land.

WHEREFORE, we GRANT the petition. We REVERSE

AND SET ASIDE the Orders of the RTC.

20 |C o - O w n e r s h i p : A r t 4 8 4 - 4 9 3

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

Sulpicio Carvajal, petitioner, vs. CA and Eutiquiano

Camarillo and Liberata Cacabelos, respondents.

SYLLABUS

1. CIVIL PROCEDURE; ACTION FOR EJECTMENT AND

RECOVERY OF POSSESSION OF PORTION OF A PARCEL OF

LAND OWNED IN COMMON FILED BEFORE PARTITION IS

PREMATURE; REASON.

2. CIVIL LAW; CO-OWNERSHIP; CO-HEIR IS NOT OWNER

OF A DEFINITE PORTION OF LAND OWNED IN COMMON

BEFORE PARTITION.

3. SALES MADE BY HEIRS PRIOR TO PARTITION OF

PROPERTY OWNED IN COMMON IS VALID; LIMITATION.

4. NOTICE IN WRITING TO CO-HEIRS NOT REQUIRED FOR

VALIDITY OF THE SALE.

FACTS: TEEHANKEE, J: The Court reverses the appellate

court's decision affirming in toto the judgment of the CFI-

Pangasinan, declaring plaintiffs-respondents the lawful owners

of the land in question and ordering defendant (herein

petitioner) to pay monthly rentals until possession of the

property is surrendered to respondents, for unless there is

partition of the estate of the deceased, either

extrajudicially or by court order, a co-heir cannot validly

claim title to a specific portion of the estate and sell 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 are husband and wife and had

instituted a complaint before the CFI for ejectment and

recovery of possession against petitioner, alleging that

they are the owners in fee simple of a parcel of

commercial land, pro-indiviso situated in Tayug,

Pangasinan, having bought the same from Evaristo G.

Espique by virtue of a Deed of Absolute Sale.

The property in question is a 1/5 portion of land

originally owned by Hermogenes Espique and his wife.

After their death, their five children succeeded them in the

ownership of the whole lot.

Petitioner presently occupies 2/5 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 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 lot he

had bought from Estefanio which respondents claim

they had bought from Evaristo.

Both sales were made while the petition for partition filed

by Evaristo Espique was still pending.

ISSUE: May the respondents eject the petitioners?

HELD: The action for ejectment and recovery of possession

instituted by respondents in the lower court is premature. For

what must be settled first 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 or

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 of the decedent is owned in common by such

heirs. 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 or co-heirs while it remains undivided.

Under Article 493 NCC, 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.

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. 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. BEFORE PARTITION, a co-heir can only sell his

successional rights.

In the case at bar, the fact that the sale executed 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 SUBJECT to provisions on

subrogation of the other co-heirs to the rights of the stranger-

purchaser provided in Article 1088.

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. 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.

Thus, respondents have no right to eject petitioners nor

demand payment of rentals for the use of the property in

dispute. 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.

21 |C o - O w n e r s h i p : A r t 4 8 4 - 4 9 3

[G.R. No. 56550. October 1, 1990.]

Marina Z. Reyes, et al, petitioners, vs. Alfredo B.

Concepcion, et al, respondents.

FACTS: CORTES, J:

Petitioners filed with the CFI a complaint for injunction

and damages seeking to enjoin private respondents

Socorro Marquez Vda. De Zaballero, et al., from selling

to a 3rd party their pro-indiviso shares as co-owners in 8

parcels of registered land in Cavite (96 hectares).

Petitioner claimed that under Article 1620 of the NCC,

they, as co-owners, had a preferential right to purchase

these shares from private respondents for a reasonable

price.

Respondent trial judge denied the ex parte application for

a writ of preliminary injunction, on the ground that

petitioners' registered notice of lis pendens was ample

protection of their rights.

Private respondents received the summons and copies of

the complaint, then filed their answer with counterclaim,

praying for the partition of the subject properties.

That six and nine tenth (6-9/10) hectares of the land

covered by Parcel A; approximately twelve (12) hectares

of that covered by parcel B; and the entire parcel C are

subject of expropriation proceedings instituted by the

NHA

Based on the evidence the current valuation of the land

and the improvements is at P95,132.00 per hectare;

Plaintiffs received a written notice from the defendants

and the intervenor offered to buy the latter's share in the

properties listed in the complaint

PLAINTIFFS

1. That the subject properties are incapable of physical partition;

2. That the price of P12.50 per square meter is grossly excessive;

3. That they are willing to exercise their pre-emptive right for an

amount of not more than P95,132.00 per hectare, which is the

fair and reasonable value of said properties;

4. That the statutory period for exercising their pre-emptive right

was suspended upon the filing of the complaint;.

DEFENDANTS AND INTERVENOR

1. That the reasonable price of the subject properties is P12.50 per

square meter;

2. That plaintiffs' right of legal pre-emption had lapsed upon their

failure to exercise the same within the period prescribed in Art.

1623 of the Civil Code of the Philippines;

3. That, assuming the soundness of plaintiffs' claim that the price of

P12.50 per square meter is grossly excessive, it would be to the

best interest of the plaintiffs to sell their shares to the

VOLCANO SECURITIES TRADERS AND AGRI-BUSINESS

CORPORATION, whose sincerity, capacity and good faith is

beyond question, as the same was admitted by the parties herein;

4. That the subject properties consisting approximately 95 hectares

may be physically partitioned without difficulty in the manner

suggested by them to plaintiffs, and as graphically represented in

the subdivision plan, which will be furnished in due course to

plaintiffs' counsel.

Respondent trial judge rendered a pre-trial order granting

petitioners a period of 10 days from receipt of the

subdivision plan to be prepared by a competent geodetic

engineer within which to express their approval or

disapproval of the said plan, or to submit within the same

period, if they so desire, an alternative subdivision plan.

Petitioners contend that the question of reasonable value

of the subject properties remains a contentious issue of

fact ascertainable only after a full trial.

To settle once and for all the controversy between the

parties, private respondents filed a motion requesting that

petitioners be required to formally specify which of the

two options under ARTICLE 498 they wished to avail

of:

o that petitioners' shares in the subject properties be sold to private

respondents, at the rate of P12.50 per square meter; or

o that the subject properties be sold to a third party, itervenor

and its proceeds thereof distributed among the parties.

Respondent trial judge issued an order which directed the

parties to signify whether or not they agree to the scheme

of allotting the subject properties to one of the co-owners,

at the rate of P12.50 per square meter, or whether or not

they know of a third party who is able and willing to buy

the subject properties at terms and conditions more

favorable than that offered by intervenor..

Petitioners filed a motion for clarification as to the true

identity of the third party allegedly willing to purchase the

subject properties. Respondent trial judge rejected the

motion on the ground that it was irrelevant.

The judge ruled that petitioners did not possess a pre-

emptive right to purchase private respondents' shares in

the co-ownership. Thus, finding that the subject

properties were essentially indivisible, respondent trial

judge ordered the holding of a public sale of the subject

properties pursuant to Article 498 NCC.

Without awaiting resolution of their MR, petitioners filed

the present petition for certiorari, alleging that the

respondent trial judge acted without jurisdiction, or in

grave abuse of its discretion amounting to lack of

jurisdiction, in issuing his order that denied petitioners'

claim of a pre-emptive right to purchase private

respondents' pro-indiviso shares and which, peremptorily,

ordered the public sale of the subject properties.

SC issued a TRO enjoining the sale of the subject

properties at public auction.

ISSUE: Did RTC commit grave abuse of discretion in

denying the claim of petitioner of its preemptive right to

purchase the property? And in ordering the sale of subject

parcels of land? NO.

HELD: This claim is patently without basis. The legal

provisions on co-ownership do not grant to any of the

owners of a property held in common a pre-emptive right

to purchase the pro-indiviso shares of his co-owners.

Petitioners' reliance on Article 1620 is misplaced.

22 |C o - O w n e r s h i p : A r t 4 8 4 - 4 9 3

Article 1620 contemplates of a situation where a co-owner

has alienated his pro-indiviso shares to a stranger. By the

very nature of the right of "LEGAL REDEMPTION", a co-

owner's right to redeem is invoked only after the shares of the

other co-owners are sold to a third party or stranger to the co-

ownership. But in the case at bar, at the time petitioners filed

their complaint for injunction and damages against private

respondents, no sale of the latter's pro-indiviso shares to a

third party had yet been made. Thus, Article 1620 finds no

application to the case at bar.

Also, No merit to petitioners' contention that private

respondents had acknowledged the pre-emptive right of

petitioners to purchase their shares at a "reasonable price".

Although it appears that private respondents had agreed to

sell their pro-indiviso shares to petitioners, the offer was

made at a fixed rate of P12.50 per square meter. It cannot

be said that private respondents had agreed, without

qualification, to sell their shares to petitioners. Hence,

petitioners cannot insist on a right to purchase the shares at

a price lower than the selling price of private respondents.

Petitioners have no legal right to enjoin private respondents

from alienating their pro-indiviso shares to a third party. The

rights of a co-owner of a property are clearly specified in

Article 493.

The law does not prohibit a co-owner from selling, alienating

or mortgaging his ideal share in the property held in common.

The law merely provides that the alienation or mortgage

shall be limited only to the portion of the property which

may be allotted to him upon termination of the co-

ownership and, as earlier discussed, that the remaining co-

owners have the right to redeem, within a specified period, the

shares which may have been sold to the third party.

Therefore, respondent trial judge committed no grave abuse of

discretion when he denied petitioners' claim of a pre-emptive

right to purchase private respondents' pro-indiviso shares.

RE ORDER OF SALE: Respondent trial judge's order was

issued in accordance with the laws pertaining to the legal or

juridical dissolution of co-ownerships.

Private respondents' counterclaim for the partition of the

subject properties is recognized by Article 494 which lays

down the GENERAL RULE that no co-owner is obliged to

remain in the co-ownership.

NONE of the legal exceptions under Article 494 applies to the

case at bar. Private respondents' counterclaim for the partition

of the subject properties was therefore entirely proper.

However, petitioners adopted the adamant position that the

subject properties were incapable of physical partition.

Initially, private respondents disputed this position. Thus,

private respondents relented and adopted petitioner's position

that the partition of the subject properties was not

economically feasible, and, consequently, invoked the

provisions of Article 498.

Inasmuch as the parties were in agreement as regards the fact

that the subject properties should not be partitioned, and

private respondents continued to manifest their desire to

terminate the co-ownership arrangement between petitioners

and themselves, respondent trial judge acted within his

jurisdiction when he issued his order requiring the parties to

answer certain questions for the purpose of determining

whether or not the legal conditions for the applicability of

Article 498 of the New Civil Code were present in the case.

The sale of the property held in common referred to in the

above article is resorted to when

(1) the right to partition the property among the co-

owners is invoked by any of them but because of the

nature of the property, it cannot be subdivided or its

subdivision [See Article 495] would prejudice the

interests of the co-owners [See Section 5 of Rule 69],

and

(2) the co-owners are not in agreement as to who among

them shall be allotted or assigned the entire property

upon reimbursement of the shares of the other co-

owners.

Petitioners have NO JUSTIFIABLE GROUNDS to ignore the

queries posed by respondent trial judge and to insist that

hearings be conducted in order to ascertain the reasonable

price at which they could purchase private respondents' pro-

indiviso shares.

Since it became evident that the parties could not agree on

who among them would be allotted the subject properties, the

Court finds that respondent trial judge committed no grave

abuse of discretion in ordering the holding of a public sale for

the subject properties, and the distribution of the proceeds

thereof amongst the co-owners, as provided under Article 498.

Contrary to petitioners' contention, there was no need for

further hearings in the case because it is apparent from the

various allegations and admissions of the parties made during

the pre-trial proceedings, and in their respective pleadings,

that the legal requisites for the application of Article 498 of

the New Civil Code were present in the case. No factual issues

remained to be litigated upon.

WHEREFORE, the present petition is DISMISSED for lack of

merit. The temporary restraining order issued by the Court is

hereby LIFTED.