7/24/2019 OBLI Cases 1 - 20

1/78

G.R. No. L-23072 November 29, 1968

SIMEON B. MIGUEL, ET AL.,plaintifs-appellants,vs.LOREN!O "ATALINO,deendant-appellee.

Bienvenido L. Garcia for plaintis-appellants.Moises P. Cating for defendant-appellee.

RE#ES, $.B.L.,J.:

Direct appeal rom the judgment in Civil Case No. 1090 o the Court o First nstance o !aguio, dismissing theplaintifs" complaint or recover# o possession o a parcel o land, registered under $ct %9&, in the name o one!aca'uio,1a long-deceased illiterate non-Christian resident o (ountain )rovince, and declaring the deendant to *ethe true o+ner thereo.

n anuar# , 19&, appellants /imeon, milia and (arcelina (iguel, and appellant race 2entura *rought suit in theCourt *elo+ against Florendo Catalino or the recover# o the land a*ove-descri*ed, plaintifs claiming to *e thechildren and heirs o the original registered o+ner, and averred that deendant, +ithout their 3no+ledge or consent,had unla+ull# ta3en possession o the land, gathered its produce and unla+ull# e4cluded plaintifs thereromDeendant ans+ered pleading o+nership and adverse possession or 50 #ears, and counterclaimed or attorne#"s ees.$ter trial the Court dismissed the complaint, declared deendant to *e the rightul o+ner, and ordered the 6egister oDeeds to issue a transer certi7cate in lieu o the original. )laintifs appealed directl# to this Court, assailing the triaCourt"s 7ndings o act and la+.

$s ound *# the trial Court, the land in dispute is situated in the !arrio o /an )ascual, (unicipalit# o 8u*a, !enguet,(ountain )rovince and contains an area o 59,%%& s'uare meters, more or less. t is covered *# riginal Certi7cate o8itle No. 51, +hich +as issued on Decem*er 19: in the name o !aca'uio ;or !a3a3e+

7/24/2019 OBLI Cases 1 - 20

2/78

/ince the 19 sale is technicall# invalid, !aca'uio remained, in la+, the o+ner o the land until his death in 19%5+hen his title passed on, *# the la+ on succession, to his heirs, the plaintifs-appellants.

Not+ithstanding the errors aorementioned in the appealed decision, +e are o the opinion that the judgment in avoro deendant-appellee Florendo Catalino must *e sustained. For despite the invalidit# o his sale to Catalino $g#apao,ather o deendant-appellee, the vendor !aca'uio sufered the latter to enter, possess and enjo# the land in 'uestion+ithout protest, rom 19 to 19%5, +hen the seller died? and the appellants, in turn, +hile succeeding the deceased,also remained inactive, +ithout ta3ing an# step to reivindicate the lot rom 19%% to 19&, +hen the present suit +ascommenced in court. ven granting appellants" proposition that no prescription lies against their ather"s recordedtitle, their passivit# and inaction or more than 5% #ears ;19-19&< justi7es the deendant-appellee in setting up the

e'uita*le deense o laches in his o+n *ehal. $s a result, the action o plaintifs-appellants must *e considered *arredand the Court *elo+ correctl# so held. Courts can not loo3 +ith avor at parties +ho, *# their silence, dela# andinaction, 3no+ingl# induce another to spend time, efort and e4pense in cultivating the land, pa#ing ta4es and ma3ingimprovements thereon or 50 long #ears, onl# to spring rom am*ush and claim title +hen the possessor"s eforts andthe rise o land values ofer an opportunit# to ma3e eas# pro7t at his e4pense. n (ejia de Bucas vs. amponia, 100)hil. ::, 1, this Court laid do+n a rule that is here s'uarel# applica*leE

pon a careul consideration o the acts and circumstances, +e are constrained to 7nd, ho+ever, that +hile nolegal deense to the action lies, an e'uita*le one lies in avor o the deendant and that is, the e'uita*ledeense o laches. e hold that the deense o prescription or adverse possession in derogation o the title othe registered o+ner Domingo (ejia does not lie, *ut that o the e'uita*le deense o laches. ther+ise stated+e hold that +hile deendant ma# not *e considered as having ac'uired title *# virtue o his and hispredecessors" long continued possession or 5: #ears, the original o+ner"s right to recover *ac3 the possessiono the propert# and title thereto rom the deendant has, *# the long period o 5: #ears and *# patentee"sinaction and neglect, *een converted into a stale demand.

$s in the Gamponiacase, the our elements o laches are present in the case at *ar, namel#E ;a< conduct on the part othe deendant, or o one under +hom he claims, giving rise to the situation o +hich complaint is made and or +hichthe complaint see3s a remed#? ;*< dela# in asserting the complainant"s rights, the complainant having had 3no+ledgeor notice, o the deendant"s conduct and having *een aforded an opportunit# to institute a suit? ;c< lac3 o 3no+ledgeor notice on the part o the deendant that the complainant +ould assert the right on +hich he *ases his suit? and ;d8>6 6 N8 8> 8$!B DFN/ F B$C>/ $))B/ ND)NDN8BH F)6/C6)8NO

1-* >8>6 6 N8 8> C$/ F $C8N F 8> )N! $$N/8 8> )88N6/ $CC6D NBHF6( 8> 8( F 8> DC$B D($ND N $/8 50, 19:&O

1-c >8>6 6 N8 8> F6 ;%< BB-/88BD B(N8/ F B$C>/ $6 )6/N8 N 8>/C$/O

1-d >8>6 6 N8 8> 6BN N 8> C$/ F )>B))N N$8N$B !$NP 2/. C68 F$))$B/, 1: /C6$ 5%:, / $))BC$!B N 8>/ N/8$N8 C$/O

n the main, the issue is +hether petitioners ma# raise the deense o laches in order to avoid their lia*ilit# under thesuret# agreement. )reliminaril#, +e shall also ta3e up the 'uestion o petitioners" lia*ilit# as sureties.

The Court's Ruling

8he appeal is not meritorious.

Preliminar MatterE

Liabilit of Petitioners as Sureties

8he present controvers# *egan +hen the )hilippine National !an3 ;)N!< sought to enorce the /uret# $greement. 8hepertinent provisions o said $greement are as ollo+sE

>6$/, FB-$/86N D ND/86/, NC. herein reerred to as the )rincipal, has o*tainedandLor desires to o*tain certain credits, loans, overdrats, discounts, etc., rom the Creditor, or all o

+hich the Creditor re'uires securit#? and the /uret#, on account o valua*le consideration receivedrom the )rincipal, has agreed and underta3e to assist the principal *# *ecoming such /uret#.

N 8>6F6, or the purpose a*ove mentioned, the /uret#, jointl# and severall# +ith the)rincipal, here*# guarantees and +arrants to the Creditor, its successors or assigns, the promptpa#ment at maturit# o all the notes, drats, *ills o e4change, overdrats and other o*ligations o ever#3ind, on +hich the )rincipal ma# no+ *e inde*ted or ma# hereater *ecome inde*ted to the Creditor,*ut the lia*ilit# o the /uret# shall not at an# time e4ceed the sum o 8 (BBN F2 >ND6D8>/$ND NBH ;),A00.00.00

7/24/2019 OBLI Cases 1 - 20

6/78

action *ased on vitiated consent had precri*ed. 8here +as no 'uestion that petitioners, in their capacit# as sureties+ere ans+era*le or the o*ligations o Fil-astern to )N!.

e shall no+ go to the main issue o this caseE hether petitioners ma# invo3e the deense o laches, considering that)N!"s claim had not #et prescri*ed.

Main Issue/Lac#es

)etitioners admit that )N!"s claim, though 7led more than seven #ears rom the maturit# o the o*ligation, ell +ithinthe ten-#ear prescriptive period. 8he# argue, ho+ever, that the cause +as alread# *arred *# laches, +hich is de7nedas =the ailure or neglect or an unreasona*le or une4plained length o time to do that +hich *# e4ercising due

diligence, could or should have *een done earlier +arranting a presumption that he has a*andoned his right ordeclined to assert it.=7n arguing that the appellate court erred in rejecting the deense o laches, petitioners cite ourreasonsE ;1< the deense o laches applies independentl# o prescription? ;< the cause o action against petitionersaccrued rom the maturit# o the o*ligation, not rom the time o judicial demand? ;5< the our +ell-settled elements olaches +ere dul# proven? and ;%< P$B v. C%applies in the instant case. $s +ill *e sho+n *elo+, all these arguments aredevoid o merit.

%pplication of Lac#es

$ssailing the C$ ruling that laches +as inapplica*le *ecause the claim +as *rought +ithin the ten-#ear prescriptiveperiod, petitioners stress that the deense o laches difers rom and is applied independentl# o prescription. nsupport, the# cite, among others,$ielson & Co.' (nc. v. Lepanto Consolidated Mining Co.,8in +hich the /upreme CourtruledE

J8Khe deense o laches applies independentl# o prescription. Baches is diferent rom the statute olimitations. )rescription is concerned +ith the act o dela#, +hereas laches is concerned +ith the

efect o dela#. )rescription is a matter o time? laches is principall# a 'uestion o ine'uit# o permittinga claim to *e enorced, this ine'uit# *eing ounded on some change in the condition o the propert# orthe relation o the parties. )rescription is statutor#? laches is not. Baches applies in e'uit#? +hereasprescription applies at la+. )rescription is *ased on 74ed time, laches is not.

8rue, prescription is diferent rom laches, *ut petitioners" reliance on $ielsonis misplaced. $s held in the aorecitedcase, laches is principall# a 'uestion o e'uit#. Necessaril#, =there is no a*solute rule as to +hat constitutes laches orstaleness o demand? each case is to *e determined according to its particular circumstances. 8he 'uestion o laches isaddressed to the sound discretion o the court and since laches is an e'uita*le doctrine, its application is controlled *#e'uita*le considerations.=9)etitioners, ho+ever, ailed to sho+ that the collection suit against herein sureties +asine'uita*le. 6emedies in e'uit# address onl# situations tainted +ith ine'uit#, not those e4pressl# governed *#statutes. ndeed, the petitioners ailed to prove the presence o all the our esta*lished re'uisites o laches, vi)E

;1< conduct on the part o the deendant or one under +hom he claims, giving rise to the situation o+hich complaint is made and or +hich the complainant see3s a remed#?

;< dela# in asserting the complainant"s right, the complainant having had 3no+ledge or notice odeendant"s conduct and having *een aforded an opportunit# to institute a suit?

;5< lac3 o 3no+ledge or notice on the part o the deendant that the complainant +ould assert theright on +hich he *ases his claim? and

;%< injur# or prejudice to the deendant in the event relie accorded to the complainant, or the suit isnot held *arred.10

8hat the 7rst element e4ists is undisputed. Neither Fil-astern nor the sureties, herein petitioners, paid the o*ligationunder the /uret# $greement.

8he second element cannot *e deemed to e4ist. $lthough the collection suit +as 7led more than seven #ears ater theo*ligation o the sureties *ecame due, the lapse +as +ithin the prescriptive period or 7ling an action. n this light, +e7nd immaterial petitioners" insistence that the cause o action accrued on Decem*er 51, 19&, +hen the o*ligation*ecame due, and not on $ugust 50, 19:&, +hen the judicial demand +as made. n either case, *oth su*missions ell+ithin the ten-#ear prescriptive period. n an# event, =the act o dela#, standing alone, is insu@cient to constitute

laches.=11

)etitioners insist that the dela# o seven #ears +as unreasona*le and une4plained, *ecause demand +as notnecessar#. $gain +e point that, unless reasons o ine'uita*le proportions are adduced, a dela# +ithin the prescriptiveperiod is sanctioned *# la+ and is not considered to *e a dela# that +ould *ar relie. n C#ave) v. Bonto-Pere),12theCourt reiterated an earlier holding, vi)E

Baches is a doctrine in e'uit# +hile prescription is *ased on la+. ur courts are *asicall# courts o la+and not courts o e'uit#. 8hus, laches cannot *e invo3ed to resist the enorcement o an e4isting legalright. e have ruled in%rsenal v. (ntermediate %ppellate Court. . . that it is a long standing principlethat e'uit# ollo+s the la+. Courts e4ercising e'uit# jurisdiction are *ound *# rules o la+ and have noar*itrar# discretion to disregard them. n*abat,!r. v. Court of %ppeals . . ., this Court +as moreemphatic in upholding the rules o procedure. e said thereinE

7/24/2019 OBLI Cases 1 - 20

7/78

$s or e'uit#, +hich has *een aptl# descri*ed as =justice outside legalit#,= this isapplied onl# in the a*sence o, and never against, statutor# la+ or, as in this case,judicial rules o procedure.%equetas nunquam contravenit legis. 8his pertinent positiverules *eing present here, the# should preempt and prevail over all a*stract arguments*ased onl# on e'uit#.

8hus, +here the claim +as 7led +ithin the three-#ear statutor# period, recover# thereore cannot *e*arred *# laches.

)etitioners also ailed to prove the third element o laches. t is a*surd to maintain that petitioners did not 3no+ that

)N! +ould assert its right under the /uret# $greement. t is unnatural, i not unheard o, or *an3s to condone de*ts+ithout ade'uate recompense in some other orm. )etitioners have not given us reason +h# the# assumed that )N!+ould not enorce the $greement against them.

Finall#, petitioners maintain that the ourth element is present *ecause the# +ould sufer damage or injur# as a resulto )N!"s claim. 8his is the cru4 o the controvers#. n addition to the pa#ment o the amount stipulated in the$greement, other e'uita*le grounds +ere enumerated *# petitioners, vi)E

1. )etitioners acted as sureties under pressure rom Felipe =!a*#= Hsmael, r., the headman o theHsmael roup o Companies +here the petitioners +ere all emplo#ed in various e4ecutive positions.

. )etitioners did not receive a single centavo in consideration o their acting as sureties.

5. 8he suret# agreement +as not reall# a re'uisite or the grant o the loan to FB-$/86N *ecausethe 7rst release on the loan +as made on ul# 1:, 19&:, or even *eore the /uret# $greement +ase4ecuted *# petitioners on ul# 1, 19&:.

%. )etitioners +ere assured that the /uret# $greement +as merel# a ormalit#, and the# had reason to*elieve that assurance *ecause the loan +as principall# secured *# an assignment o 1AI o theproceeds o the sale o logs o FB-$/86N to +ai G Co., Btd., and such assignment +as clearl# statedin )N! !oard 6esolution No. %0:. n act, +hile it +as e4pressl# stated in all o the eight ;< promissor#notes covering the releases o the loan that the said loan +as secured *# 1AI o the contract o sale+ith +ai G Co., Btd., onl# three ;5< promissor# notes stated that the loan +as also secured *# the=joint and several signatures o the o@cers o the corporation=. t is to *e noted that no mention +aseven made of t#e ,oint and several signatures of petitioners as sureties. n other +ords, the principasecurit# +as the assignment o 1AI o the contract or the sale o logs to +ai G Co., Btd.

A. For reasons not e4plained *# )N!, )N! did not collect the 1AI o the proceeds o the sale o thelogs to +ai G Co., Btd., and such ailure resulted in the non-collection o the ),A00,000.00 demandloan, or at least a portion o it.

&. For reasons li3e+ise une4plained *# )N!, )N! did not ma3e an# demand upon petitioners to pa# theunpaid loan o FB-$/86N until ater FB-$/86N had *ecome *an3rupt, and )N! +as a+are o this

act *ecause it oreclosed the chattel mortgages on the other loans o FB-$/86N +hich +eresecured *# said chattel mortgages. 13;mphasis ound in the original.6F6, premises considered, +e here*# 6$N8 the appeal. 8he assailed decision dated Novem*er 10, 000, othe 6egional 8rial Court ;68C

7/24/2019 OBLI Cases 1 - 20

12/78

>8>6 8> C68 F $))$B/ 66D N D/6$6DN 8> N$86 F 8> )6)68H N // >N 86ND6D 8/ DC/N.

>8>6 B$C>/L)6/C6)8N !$66D >6N )88N6/ F6( CB$(N 8>6 6>8FB />$6 N 8>)6)68H N //.1

)etitioners contend that since the C$ and the 68C ound that there +as no partition o the propert# and no validdonationpropter nuptias +as made *# )a*lo to uana, the rule on co-o+nership among )a*loSs heirs should govern thepropert#? that +hen uana sold the propert# to respondents Cerenos, the rights o petitioners as co-o+ners should nothave *een afected? that the C$Ss 7nding that the joint a@davit attesting to the donationpropter nuptias can *e the

*asis o a *elie in good aith that uana +as the o+ner o the disputed propert# is erroneous, since uana had3no+ledge rom the time she got married to )a*lo that the propert# +as ac'uired during the latter"s 7rst marriagethat respondents /pouses Cereno could not *e considered in good aith since /oledad is the daughter o uana +ith hermarriage to )a*lo and could not *e considered a third part# to the dispute +ithout 3no+ledge o the nature o thepropert#? that *eing co-o+ners, neither prescription nor laches can *e used against them to divest them o theirpropert# rights.

n their Comment, respondents argue that uana in her o+n right had ac'uired the propert# *# prescription? that theC$ correctl# considered respondentsS 9 #ears o actual and peaceul possession o the propert# aside rom theirpurchase o the propert# rom uana in 7nding them as the true o+ners.

)etitioners and respondents su*mitted their respective memoranda.

8he petition has no merit.

e agree +ith the C$ that respondents have ac'uired the disputed propert# *# ac'uisitive prescription.

)rescription is another mode o ac'uiring o+nership and other real rights over immova*le propert#. 15t is concerned+ith lapse o time in the manner and under conditions laid do+n *# la+, namel#, that the possession should *e in theconcept o an o+ner, pu*lic, peaceul, uninterrupted and adverse. 1%)ossession is open +hen it is patent, visi*leapparent, notorious and not clandestine.1At is continuous +hen uninterrupted, un*ro3en and not intermittent ooccasional?1&e4clusive +hen the adverse possessor can sho+ e4clusive dominion over the land and an appropriation oit to his o+n use and *ene7t? and notorious +hen it is so conspicuous that it is generall# 3no+n and tal3ed o *# thepu*lic or the people in the neigh*orhood.1:8he part# +ho asserts o+nership *# adverse possession must prove thepresence o the essential elements o ac'uisitive prescription.1

$c'uisitive prescription o real rights ma# *e ordinar# or e4traordinar#. 19rdinar# ac'uisitive prescription re'uirespossession in good aith and +ith just title or ten #ears.0n e4traordinar# prescription, o+nership and other real rightsover immova*le propert# are ac'uired through uninterrupted adverse possession or thirt# #ears +ithout need o titleor o good aith.1

8he good aith o the possessor consists in the reasona*le *elie that the person rom +hom he received the thing +asthe o+ner thereo, and could transmit his o+nership.For purposes o prescription, there is just title +hen the adverse

claimant came into possession o the propert# through one o the modes recognied *# la+ or the ac'uisition oo+nership or other real rights, *ut the grantor +as not the o+ner or could not transmit an# right.5

6ecords sho+ that as earl# as 19:0, +hen the propert# +as sold *# uana to respondents /pouses Cereno, the latterimmediatel# too3 possession o the propert#. /ince then, respondents possessed the propert# continuousl#, openl#,peaceull#, in the concept o an o+ner, e4clusivel# and in good aith +ith just title, to the e4clusion o the petitionersand their predecessors-in-interest until the 7ling o the complaint in 1999 +hich is the su*ject o this present petition.

Nota*l#, the propert# +as traversed *# a baranga road, thus, it +as divided into t+o lots. 8he house o respondents islocated on the eastern part o the road, +hile the lot on the +estern part o the road +as planted to ruit- *earing trees*# respondents.%t +as admitted *# petitioners that the# sa+ the house o respondents constructed on the lot and #etnever 'uestioned the same.At +as also esta*lished that respondents are the ones gathering the ruits o the land andenjo#ing the same&to the e4clusion o petitioners and #et the latter never prevented them rom doing so. n act,+hile petitioners learned o the sale o the propert# *# uana to the /pouses Cereno in 190, the# never too3 an#action to protect +hatever rights the# have over the propert# nor raised an# o*jection on respondents" possession othe propert#. )etitioners" inaction is aggravated *# the act that petitioners just live a mere 100 meters a+a# rom the

propert#.:

(oreover, immediatel# ater the sale o the propert# to the /pouses Cereno, the# declared the propert# in their namesor ta4ation purposesand since then religiousl# paid the ta4es9due on the propert#. )etitioners admitted that the#3ne+ that the /pouses Cerenos are the ones pa#ing the ta4es?50#et, the# never challenged the same or a long periodo time +hich clearl# esta*lishes respondents" claim as o+ners o the propert#. urisprudence is clear that although ta4declarations or realt# ta4 pa#ments o propert# are not conclusive evidence o o+nership, nevertheless, the# are goodindicia o possession in the concept o o+ner, or no one in his right mind +ould *e pa#ing ta4es or a propert# that isnot in his actual or at least constructive possession. 518he# constitute at least proo that the holder has a claim o titleover the propert#.5$s is +ell 3no+n, the pa#ment o ta4es, coupled +ith actual possession o the land covered *# theta4 declaration, strongl# supports a claim o o+nership.55

6espondent uanito also e4ercised dominion over the propert# *# mortgaging the same to (anaoag 6ural !an3 in199%5%and the mortgage +as cancelled onl# in anuar# 1999.5Aavvp#i

7/24/2019 OBLI Cases 1 - 20

13/78

hile there is a 'uestion regarding the alleged donationpropter nuptiasat the time uana e4ecuted the deed o sale inavor o the /pouses Cereno in 19:0, ho+ever, the re'uirement o just title and good aith are still satis7ed in thiscase. $s the C$ saidE

4 4 4 J8Khe joint a@davit that the deendants-appellants presented, attesting to the donation propter nuptias o thedisputed propert# *# )a*lo to uana, can *e the *asis o the *elie in good aith that uana +as the o+ner o thedisputed propert#. 6elated to this, it is undisputed that )a*lo and uana had lived in the disputed propert# rom thetime o their marriage in 1919, and uana continued to live and to possess this propert# in the concept o an o+nerrom the time o )a*lo"s death in 195& up to the time she sold it to spouses Cereno in 19:0. 8hese circumstances, inour vie+, are su@cient *ases or the *elie that uana +as the o+ner o the propert# she conve#ed *# sale, and leave

us convinced that the spouses Cereno had the =good aith= that ac'uisition *# prescription re'uires +hen the# *ecamethe purchasers in the contract o sale +ith uana.5&

Nota*l#, one o the a@ants in the joint a@davit +hich +as e4ecuted in 19:0 +as $lredo, )a*lo"s son *# his 7rstmarriage, +here he attested that the propert# +as given *# his ather )a*lo to uana *# donation propter nuptias. Notone among $lredo"s children had ever come out to assail the validit# o the a@davit e4ecuted *# their ather. n act,not one o $lredo"s heirs joined petitioners in this case. 5:(oreover, not one among the children o the 7rst marriage+hen the# +ere still alive ever made a claim on their successional rights over the propert# *# as3ing or its partition./uch joint a@davit could constitute a legal *asis or uana"s adverse and e4clusive character o the possession o thepropert#5and +ould sho+ the /pouses Cereno"s good aith *elie that uana +as the o+ner o the propert#. 8hus+hen petitioners 7led the instant case, more than 9 #ears had alread# elapsed, thus, the ten-#ear period orac'uisitive prescription has alread# *een satis7ed.

e li3e+ise agree +ith the C$ +hen it ound that petitioners are guilt# o laches that +ould *ar them rom *elatedl#asserting their claim.

Baches is de7ned as the ailure to assert a right or an unreasona*le and une4plained length o time, +arranting apresumption that the part# entitled to assert it has either a*andoned or declined to assert it. 8his e'uita*le deense is*ased upon grounds o pu*lic polic#, +hich re'uires the discouragement o stale claims or the peace o societ#.59

uana sold the propert# to the /pouses Cereno in 19:0 and since then have possessed the propert# peaceull# andpu*licl# +ithout an# opposition rom petitioners. hile petitioners claim that the# 3ne+ a*out the sale onl# in 190 #etthe# did not ta3e an# action to recover the same and +aited until 1999 to 7le a suit +ithout ofering an# e4cuse orsuch dela#. 6ecords do not sho+ an# justi7a*le reason or petitioners" inaction or a long time in asserting +hateverrights the# have over the propert# given the pu*licit# o respondents" conduct as o+ners o the propert#.

>6F6, the petition is !ENIE!. 8he Decision dated $ugust %, 00% and the 6esolution dated $pril 9, 00A othe Court o $ppeals in C$-.6. C2 No. &9%%& are AIRME!.

/ 6D6D.

7/24/2019 OBLI Cases 1 - 20

14/78

G.R. No. 17 !e4ember 1, 2011

$AIME ABALOS (&) S'OUSES ELI5 SALAAR (&) "ONSUELO SALAAR, GLI"ERIO ABALOS, +EIRS OAUILINO ABALOS, &(me/ SEGUN!A BAUTISTA, ROGELIO ABALOS, !OLORES A. ROSARIO, ELI"I!A!ABALOS, ROBERTO ABALOS, $UANITO ABALOS, TITA ABALOS, LITA A. !ELA "RU AN! +EIRS O AUILINAABALOS, &(me/ ARTURO BRA*O, 'URITA B. MEN!OA, LOUR!ES B. AGANON, "ONSUELO B. SALAAR,'RIMA B. !ELOS SANTOS, T+ELMA A'OSTOL (&) GLE"ERIO ABALOS,)etitioners,vs.+EIRS O *I"ENTE TORIO, &(me/ 'UBLIO TORIO, LIBORIO TORIO, *I"TORINA TORIO, ANGEL TORIO,

LA!ISLAO TORIO, 'RIMO TORIO (&) NORBERTO TORIO,6espondents.D C / N

'ERALTA,J.:

!eore the Court is a petition or revie+ on certiorarisee3ing to set aside the Decision1dated une 50, 00& and6esolutiondated Novem*er 15, 00& *# the Court o $ppeals ;C$< in C$-.6. /) No. 91:. 8he assailed Decisionreversed and set aside the Decision5dated une 1%, 00A o the 6egional 8rial Court ;68C< o Binga#en, )angasinan,!ranch &9, +hile the 'uestioned 6esolution denied petitioners" (otion or 6econsideration.

8he actual and procedural antecedents o the case are as ollo+sE

n ul# %, 199&, herein respondents 7led a Complaint or 6ecover# o )ossession and Damages +ith the (unicipa8rial Court ;(8C< o !inmale#, )angasinan against aime $*alos ;aime< and the spouses Feli4 and Consuelo /alaar6espondents contended thatE the# are the children and heirs o one 2icente 8orio ;2icente< +ho died intestate on/eptem*er 11, 19:5? at the time o the death o 2icente, he let *ehind a parcel o land measuring ,9A0 s'uaremeters, more or less, +hich is located at /an sidro Norte, !inmale#, )angasinan? during the lietime o 2icente andthrough his tolerance, aime and the /pouses /alaar +ere allo+ed to sta# and *uild their respective houses on thesu*ject parcel o land? even ater the death o 2icente, herein respondents allo+ed aime and the /pouses /alaar toremain on the disputed lot? ho+ever, in 19A, respondents as3ed aime and the /pouses /alaar to vacate the su*jectlot, *ut the# reused to heed the demand o respondents orcing respondents to 7le the complaint.%

aime and the /pouses /alaar 7led their $ns+er +ith Counterclaim, den#ing the material allegations in the Complaintand asserting in their /pecial and $@rmative Deenses thatE respondents" cause o action is *arred *# ac'uisitiveprescription? the court a quohas no jurisdiction over the nature o the action and the persons o the deendants? thea*solute and e4clusive o+ners and possessors o the disputed lot are the deceased predecessors o deendants?deendants and their predecessors-in-interest had *een in actual, continuous and peaceul possession o the su*jectlot as o+ners since time immemorial? deendants are aithull# and religiousl# pa#ing real propert# ta4es on thedisputed lot as evidenced *# 6eal )ropert# 8a4 6eceipts? the# have continuousl# introduced improvements on the saidland, such as houses, trees and other 3inds o ornamental plants +hich are in e4istence up to the time o the 7ling otheir $ns+er.A

n the same date as the 7ling o deendants" $ns+er +ith Counterclaim, herein petitioners 7led their $ns+er inntervention +ith Counterclaim. Bi3e the deendants, herein petitioners claimed that their predecessors-in-interest+ere the a*solute and e4clusive o+ners o the land in 'uestion? that petitioners and their predecessors had *een inpossession o the su*ject lot since time immemorial up to the present? the# have paid real propert# ta4es andintroduced improvements thereon.&

$ter the issues +ere joined, trial ensued.

n Decem*er 10, 005, the (8C issued a Decision, the dispositive portion o +hich reads as ollo+sE

>6F6, in vie+ o the oregoing considerationJsK, the Court adjudged the case in avor o the plaintifs andagainst the deendants and deendants-intervenors are ordered to turn over the land in 'uestion to the plaintifs ;BotNos. &9 and :0, Cad. %&:-D. !inmale# Cadastre located in !rg#. /an sidro Norte, !inmale#, )angasinan +ith an areao ,9A0 s'. m., more or less, *ounded and descri*ed in paragraph 5 o the ComplaintJ

7/24/2019 OBLI Cases 1 - 20

15/78

>6F6, the petition is 6$N8D. 8he Decision dated une 1%, 00A o the 6egional 8rial Court, !ranch &9,Binga#en, )angasinan is here*# 626/D and /8 $/D. n its stead, a ne+ one is entered reinstating the Decisiondated Decem*er 10, 005 o the (unicipal 8rial Court o !inmale#, )angasinan.

/ 6D6D.9

aime and the /pouses /alaar 7led a (otion or 6econsideration, *ut the same +as denied *# the C$ in its 6esolutiondated Novem*er 15, 00&.

>ence, the instant petition *ased on a sole assignment o error, to +itE

8> C68 F $))$B/ 66D N N8 $))6C$8N 8>$8 8> )88N6/ >6N $6 N 8> $!/B8 $NDTCB/2 N6/ F 8> B$ND N /8N !H 268 F $C/82 )6/C6)8N.10

8he main issue raised *# petitioners is +hether the# and their predecessors-in-interest possessed the disputed lot inthe concept o an o+ner, or +hether their possession is *# mere tolerance o respondents and their predecessors-in-interest. Corollaril#, petitioners claim that the due e4ecution and authenticit# o the deed o sale upon +hichrespondents" predecessors-in-interest derived their o+nership +ere not proven during trial.

8he petition lac3s merit.

)reliminaril#, the Court agrees +ith the o*servation o respondents that some o the petitioners in the instant petition+ere the intervenors11+hen the case +as 7led +ith the (8C. 6ecords +ould sho+ that the# did not appeal theDecision o the (8C.18he settled rule is that ailure to perect an appeal renders the judgment 7nal ande4ecutor#.15>ence, insoar as the intervenors in the (8C are concerned, the judgment o the (8C had alread# *ecome7nal and e4ecutor#.

t also *ears to point out that the main issue raised in the instant petition, +hich is the character or nature o

petitioners" possession o the su*ject parcel o land, is actual in nature./ettled is the rule that 'uestions o act are not revie+a*le in petitions or revie+ on certiorariunder 6ule %A o the6ules o Court.1%/ection 1 o 6ule %A states that petitions or revie+ on certiorari =shall raise onl# 'uestions o la++hich must *e distinctl# set orth.=

Dou*tless, the issue o +hether petitioners possess the su*ject propert# as o+ners, or +hether the# occup# the same*# mere tolerance o respondents, is a 'uestion o act. 8hus, it is not revie+a*le.

Nonetheless, the Court has, at times, allo+ed e4ceptions rom the a*ovementioned restriction. $mong the recogniede4ceptions are the ollo+ingE

a. hen the 7ndings are grounded entirel# on speculation, surmises, or conjectures?

*. hen the inerence made is maniestl# mista3en, a*surd, or impossi*le?

c. hen there is grave a*use o discretion?

d. hen the judgment is *ased on a misapprehension o acts?e. hen the 7ndings o acts are conMicting?

. hen in ma3ing its 7ndings the C$ +ent *e#ond the issues o the case, or its 7ndings are contrar# tothe admissions o *oth the appellant and the appellee?

g. hen the C$Ss 7ndings are contrar# to those *# the trial court?

h. hen the 7ndings are conclusions +ithout citation o speci7c evidence on +hich the# are *ased?

i. hen the acts set orth in the petition as +ell as in the petitionerSs main and repl# *ries are notdisputed *# the respondent?

j. hen the 7ndings o act are premised on the supposed a*sence o evidence and contradicted *# theevidence on record? or

k. hen the C$ maniestl# overloo3ed certain relevant acts not disputed *# the parties, +hich, i

properl# considered, +ould justi# a diferent conclusion.1A

n the present case, the 7ndings o act o the (8C and the C$ are in conMict +ith those o the 68C.

$ter a revie+ o the records, ho+ever, the Court 7nds that the petition must ail as it 7nds no error in the 7ndings oact and conclusions o la+ o the C$ and the (8C.

)etitioners claim that the# have ac'uired o+nership over the disputed lot through ordinar# ac'uisitive prescription.

$c'uisitive prescription o dominion and other real rights ma# *e ordinar# or e4traordinar#.1&rdinar# ac'uisitiveprescription re'uires possession in good aith and +ith just title or ten ;10< #ears. 1:ithout good aith and just titleac'uisitive prescription can onl# *e e4traordinar# in character +hich re'uires uninterrupted adverse possession orthirt# ;50< #ears.1

)ossession =in good aith= consists in the reasona*le *elie that the person rom +hom the thing is received has *eenthe o+ner thereo, and could transmit his o+nership. 198here is =just title= +hen the adverse claimant came into

7/24/2019 OBLI Cases 1 - 20

16/78

possession o the propert# through one o the modes recognied *# la+ or the ac'uisition o o+nership or other realrights, *ut the grantor +as not the o+ner or could not transmit an# right.0

n the instant case, it is clear that during their possession o the propert# in 'uestion, petitioners ac3no+ledgedo+nership thereo *# the immediate predecessor-in-interest o respondents. 8his is clearl# sho+n *# the 8a4Declaration in the name o aime or the #ear 19% +herein it contains a statement admitting that aime"s house +as*uilt on the land o 2icente, respondents" immediate predecessor-in-interest.1)etitioners never disputed such anac3no+ledgment. 8hus, having 3no+ledge that the# nor their predecessors-in-interest are not the o+ners o thedisputed lot, petitioners" possession could not *e deemed as possession in good aith as to ena*le them to ac'uire thesu*ject land *# ordinar# prescription. n this respect, the Court agrees +ith the C$ that petitioners" possession o the

lot in 'uestion +as *# mere tolerance o respondents and their predecessors-in-interest. $cts o possessor# charactere4ecuted due to license or *# mere tolerance o the o+ner are inade'uate or purposes o ac'uisitiveprescription.)ossession, to constitute the oundation o a prescriptive right, must *e en concepto de dueo, or, touse the common la+ e'uivalent o the term, that possession should *e adverse, i not, such possessor# acts, nomatter ho+ long, do not start the running o the period o prescription.5

(oreover, the C$ correctl# held that even i the character o petitioners" possession o the su*ject propert# had*ecome adverse, as evidenced *# their declaration o the same or ta4 purposes under the names o theirpredecessors-in-interest, their possession still alls short o the re'uired period o thirt# ;50< #ears in cases oe4traordinar# ac'uisitive prescription. 6ecords sho+ that the earliest 8a4 Declaration in the name o petitioners +as in19:%. 6ec3oned rom such date, the thirt#-#ear period +as completed in 00%. >o+ever, herein respondentscomplaint +as 7led in 199&, efectivel# interrupting petitioners" possession upon service o summons on them. %8huspetitionersS possession also did not ripen into o+nership, *ecause the# ailed to meet the re'uired statutor# period oe4traordinar# prescription.

8his Court has held that the evidence relative to the possession upon +hich the alleged prescription is *ased, must *eclear, complete and conclusive in order to esta*lish the prescription. An the present case, the Court 7nds no error onthe part o the C$ in holding that petitioners ailed to present competent evidence to prove their alleged good aith inneither possessing the su*ject lot nor their adverse claim thereon. nstead, the records +ould sho+ that petitioners"possession +as *# mere tolerance o respondents and their predecessors-in-interest.avvp#i

Finall#, as to the issue o +hether the due e4ecution and authenticit# o the deed o sale upon +hich respondentsanchor their o+nership +ere not proven, the Court notes that petitioners did not raise this matter in their $ns+er as+ell as in their )re-8rial !rie. t +as onl# in their Comment to respondents" )etition or 6evie+ 7led +ith the C$ thatthe# raised this issue. /ettled is the rule that points o la+, theories, issues, and arguments not ade'uatel# *rought tothe attention o the trial court need not *e, and ordinaril# +ill not *e, considered *# a revie+ing court.&8he# cannot *eraised or the 7rst time on appeal. 8o allo+ this +ould *e ofensive to the *asic rules o air pla#, justice and dueprocess.:

ven granting that the issue o due e4ecution and authenticit# +as properl# raised, the Court 7nds no cogent reason todepart rom the 7ndings o the C$, to +itE

4 4 4 4

!ased on the oregoing, respondents Jaime $*alos and the /pouses Feli4 and Consuelo /alaarK have not inherited thedisputed land *ecause the same +as sho+n to have alread# *een validl# sold to (arcos 8orio, +ho, thereupon,assigned the same to his son 2icente, the ather o petitioners Jherein respondentsK. $ valid sale +as ampl#esta*lished and the said validit# su*sists *ecause the deed evidencing the same +as dul# notaried.

8here is no dou*t that the deed o sale +as dul# ac3no+ledged *eore a notar# pu*lic. $s a notaried document, it hasin its avor the presumption o regularit# and it carries the evidentiar# +eight conerred upon it +ith respect to its duee4ecution. t is admissi*le in evidence +ithout urther proo o its authenticit# and is entitled to ull aith and creditupon its ace.

ndeed, settled is the rule in our jurisdiction that a notaried document has in its avor the presumption o regularit#,and to overcome the same, there must *e evidence that is clear, convincing and more than merel# preponderant?other+ise, the document should *e upheld.9n the instant case, petitioners" *are denials +ill not su@ce to overcomethe presumption o regularit# o the assailed deed o sale.

>6F6, the petition is !ENIE!. 8he assailed Decision and 6esolution o the Court o $ppeals in C$-.6. /) No91: are AIRME!.

/ 6D6D.

7/24/2019 OBLI Cases 1 - 20

17/78

G.R. No. 18109 ebr%(r 1, 2012

"ELERINO E. MER"A!O,)etitioner,vs.BELENUES'INO"ILLAUUAN! ER!INAN! ES'INO"ILLA,6espondents.

D C / N *ILLARAMA, $R.,J.:

Te "(e

)etitioner Celerino . (ercado appeals the Decision 1dated $pril , 00 and 6esolutiondated ul# , 00 o the

Court o $ppeals ;C$< in C$-.6. C2 No. :%0. 8he C$ dismissed petitionerSs complaint5or recover# o possession'uieting o title, partial declaration o nullit# o deeds and documents, and damages, on the ground o prescription.

Te A&e4e)e& (4

Doroteo spinocilla o+ned a parcel o land, Bot No. AA, +ith an area o A:0 s'. m., located at (agsa#sa# $venue,Vone A, !ulan, /orsogon. $ter he died, his 7ve children, /alvacion, $spren, sa*el, (acario, and Dionisia divided BotNo. AA e'uall# among themselves. Bater, Dionisia died +ithout issue ahead o her our si*lings, and (acario too3possession o DionisiaSs share. n an a@davit o transer o real propert# %dated Novem*er 1, 19%, (acario claimedthat Dionisia had donated her share to him in (a# 19%A.

8hereater, on $ugust 9, 19::, (acario and his daughters !ett# ulla*a and /aida a*elo soldAA s'. m. to his son6oger spinocilla, hus*and o respondent !elen spinocilla and ather o respondent Ferdinand spinocilla. n (arch 19A, 6oger spinocilla sold&11% s'. m. to Caridad $tiena. )er actual surve# o Bot No. AA, respondent !elenspinocilla occupies 109 s'. m., Caridad $tiena occupies 10 s'. m., Caroline Hu occupies 09 s'. m., and petitioner,/alvacion"s son, occupies 15 s'. m.:

Te "(e or 'e::o&er

)etitioner sued the respondents to recover t+o portionsE an area o .As'. m. +hich he *ought rom $spren andanother .A s'. m. +hich allegedl# *elonged to him *ut +as occupied *# (acarioSs house. 9>is claim has since *eenmodi7ed to an alleged encroachment o onl# 59 s'. m. that he claims must *e returned to him. >e avers that he isentitled to o+n and possess 1:1 s'. m. o Bot No. AA, having inherited 1%.A s'. m. rom his mother /alvacion and*ought .A s'. m. rom his aunt $spren. $ccording to him, his motherSs inheritance is 1%.A s'. m., that is, 11% s'. m.rom Doroteo plus .A s'. m. rom Dionisia. /ince the area he occupies is onl# 15 s'. m.,10he claims thatrespondents encroach on his share *# 59 s'. m.11

Te "(e or Reo&)e&

6espondents agree that DoroteoSs 7ve children each inherited 11% s'. m. o Bot No. AA. >o+ever, (acarioSs shareincreased +hen he received DionisiaSs share. (acarioSs increased share +as then sold to his son 6oger, respondentsShus*and and ather. 6espondents claim that the# rightull# possess the land the# occup# *# virtue o ac'uisitiveprescription and that there is no *asis or petitionerSs claim o encroachment.1

Te Tr:( "o%r; !e4::o&

n (a# 1A, 00&, the 6egional 8rial Court ;68C< ruled in avor o petitioner and held that he is entitled to 1:1 s'. m.8he 68C ound that petitioner inherited 1%.A s'. m. rom his mother /alvacion and *ought .A s'. m. rom his aunt$spren. 8he 68C computed that /alvacion, $spren, sa*el and (acario each inherited 1%.A s'. m. o Bot No. AA. achinherited 11% s'. m. rom Doroteo and .A s'. m. rom Dionisia. 8he 68C urther ruled that (acario +as not entitled to s'. m. 8hus, respondents must return 59 s'. m. to petitioner +ho occupies onl# 15 s'. m.15

8here *eing no pu*lic document to prove DionisiaSs donation, the 68C also held that (acarioSs 19% a@davit is voidand is an invalid repudiation o the shares o his sisters /alvacion, $spren, and sa*el in DionisiaSs share. $ccordingl#,(acario cannot ac'uire said shares *# prescription. 8he 68C urther held that the oral partition o Bot No. AA *#DoroteoSs heirs did not include DionisiaSs share and that partition should have *een the main action. 8hus, the 68Cordered partition and deerred the transer o possession o the 59 s'. m. pending partition.1%8he dispositive portion othe 68C decision readsE

>6F6, in vie+ o the oregoing premises, the court issues the ollo+ing 6D6, thus -a< )artiall# declaring the nullit# o the Deed o $*solute /ale o )ropert# dated $ugust 9, 19:: 4 4 4 e4ecuted*# (acario spinocilla, !ett# . ulla*a and /aida . a*elo in avor o 6oger spinocilla, insoar as it afectsthe portion or the share *elonging to /alvacion spinocilla, mother o Jpetitioner,K relative to the propert# let*# Dionisia spinocilla, including J8a4 DeclarationK No. 15&&: and other documents o the same nature andcharacter +hich emanated rom the said sale?

*< 8o leave as is the Deeds o $*solute /ale o (a# 11, 195 and (arch , 19A, it having *een determinedthat the# did not involve the portion *elonging to JpetitionerK 4 4 4.

c< 8o efect an efective and real partition among the heirs or purposes o determining the e4act location othe share ;11% s'. m.< o the late Dionisia spinocilla together +ith the .A s'. m. *elonging to JpetitionerSsKmother /alvacion, as +ell as, the e4act location o the 59 s'. m. portion *elonging to the JpetitionerK *eingencroached *# the JrespondentsK, +ith the assistance o the Commissioner ;ngr. Fundano< appointed *# thiscourt.

7/24/2019 OBLI Cases 1 - 20

18/78

d< 8o hold in a*e#ance the transer o possession o the 59 s'. m. portion to the JpetitionerK pending thecompletion o the real partition a*ove-mentioned.1A

Te "A !e4::o&

n appeal, the C$ reversed the 68C decision and dismissed petitionerSs complaint on the ground that e4traordinar#ac'uisitive prescription has alread# set in in avor o respondents. 8he C$ ound that DoroteoSs our remaining childrenmade an oral partition o Bot No. AA ater DionisiaSs death in 19%A and occupied speci7c portions. 8he oral partitionterminated the co-o+nership o Bot No. AA in 19%A. /aid partition also included DionisiaSs share *ecause the lot +asdivided into our parts onl#. $nd since petitionerSs complaint +as 7led onl# on ul# 15, 000, the C$ concluded that

prescription has set in.

1&

8he C$ disposed the appeal as ollo+sE>6F6, the appeal is 6$N8D. 8he assailed (a# 1A, 00& Decision o the 6egional 8rial Court ;68C< o !ulan,/orsogon is here*# 626/D and /8 $/D. 8he Complaint o the JpetitionerK is here*# D/(//D. No costs. 1:

Te I&(& 'e::o&

8he core issue to *e resolved is +hether petitionerSs action to recover the su*ject portion is *arred *# prescription.

)etitioner con7rms oral partition o Bot No. AA *# Doroteo"s heirs, *ut claims that his share increased rom 11% s'. m.to 1:1 s'. m. and that respondents encroached on his share *# 59 s'. m. /ince an oral partition is valid, thecorresponding surve# ordered *# the 68C to identi# the 59 s'. m. that must *e returned to him could *emade.1)etitioner also alleges that (acario committed raud in ac'uiring his share? hence, an# evidence adduced *#him to justi# such ac'uisition is inadmissi*le. )etitioner concludes that i a person o*tains legal title to propert# *#raud or concealment, courts o e'uit# +ill impress upon the title a so-called constructive trust in avor o thederauded part#.19

Te "o%r; R%:& 'o:4ro&:o M. Ure(, Sr.vs.+e:r o> L:ber(o M. Ure(

D C / N

MEN!OA,J.:

8hese consolidated petitions or revie+ on certiorari under 6ule %A o the 199: 6evised 6ules o Civil )rocedure assai

the $pril 0, 00% Decision1o the Court o $ppeals /C%0, and its cto*er 1%, 00% 6esolutionin C.$.-.6. C2 No:1599, +hich a@rmed +ith modi7cation the $pril &, 001 Decision 5o the 6egional 8rial Court, !ranch 9, Pali*o$3lan /1"C0in Civil Case No. A0&.

8he Facts

n his lietime, $lonso reta /%lfonso0*egot 1% children, namel#, )olicronio, Bi*erato, Narciso, )rudencia, 2icenteFrancisco, nocensio, 6o'ue, $dela, enereda, (erlinda, !enedicto, orge, and $ndres. 8he children o)olicronio /2eirs of Policronio0, are opposed to the rest o $lonsoSs children and their descendants /2eirs of %lfonso0.

$lonso +as 7nanciall# +ell-of during his lietime. >e o+ned several 7shpens, a 7shpond, a sari-sari store, a passengerjeep, and +as engaged in the *u#ing and selling o copra. )olicronio, the eldest, +as the onl# child o $lonso +hoailed to 7nish schooling and instead +or3ed on his atherSs lands.

/ometime in cto*er 19&9, $lonso and our o his children, namel#, )olicronio, Bi*erato, )rudencia, and Francisco, metat the house o Bi*erato. Francisco, +ho +as then a municipal judge, suggested that in order to reduce the inheritanceta4es, their ather should ma3e it appear that he had sold some o his lands to his children. $ccordingl#, $lonsoe4ecuted our ;%< Deeds o /ale covering several parcels o land in avor o )olicronio, %Bi*erato,A)rudencia,&and hiscommon-la+ +ie, 2aleriana Dela Cru.:8he Deed o /ale e4ecuted on cto*er A, 19&9, in avor o )olicronio, coveredsi4 parcels o land, +hich are the properties in dispute in this case.

/ince the sales +ere onl# made or ta4ation purposes and no monetar# consideration +as given, $lonso continued too+n, possess and enjo# the lands and their produce.

hen $lonso died on cto*er 11, 19:, Bi*erato acted as the administrator o his atherSs estate. >e +as latersucceeded *# his sister )rudencia, and then *# her daughter, Carmencita )erlas. 4cept or a portion o parcel A, therest o the parcels transerred to )olicronio +ere tenanted *# the Fernande Famil#. 8hese tenants never turned overthe produce o the lands to )olicronio or an# o his heirs, *ut to $lonso and, later, to the administrators o his estate.

)olicronio died on Novem*er , 19:%. 4cept or the said portion o parcel A, neither )olicronio nor his heirs ever too3possession o the su*ject lands.

n $pril 19, 199, $lonsoSs heirs e4ecuted a Deed o 4tra-udicial )artition, +hich included all the lands that +ere

covered *# the our ;%< deeds o sale that +ere previousl# e4ecuted *# $lonso or ta4ation purposes. Conrado)olicronioSs eldest son, representing the >eirs o )olicronio, signed the Deed o 4tra-udicial )artition in *ehal o hisco-heirs.

$ter their atherSs death, the >eirs o )olicronio ound ta4 declarations in his name covering the si4 parcels o land. nune 1A, 199A, the# o*tained a cop# o the Deed o /ale e4ecuted on cto*er A, 19&9 *# $lonso in avor o)olicronio.

Not long ater, on ul# 50, 199A, the >eirs o )olicronio allegedl# learned a*out the Deed o 4tra-udicial )artitioninvolving $lonsoSs estate +hen it +as pu*lished in the ul# 19, 199A issue o the $3lan 6eporter.

!elieving that the si4 parcels o land *elonged to their late ather, and as such, e4cluded rom the Deed o 4tra-udicial )artition, the >eirs o )olicronio sought to amica*l# settle the matter +ith the >eirs o $lonso. arnest efortsproving utile, the >eirs o )olicronio 7led a Complaint or Declaration o +nership, 6ecover# o )ossession$nnulment o Documents, )artition, and Damages9against the >eirs o $lonso *eore the 68C on Novem*er 1:, 199A+here the ollo+ing issues +ere su*mittedE ;1< +hether or not the Deed o /ale +as valid? ;< +hether or not the Deed

o 4tra-udicial )artition +as valid? and ;5< +ho *et+een the parties +as entitled to damages.8he 6uling o the 68C

n $pril &, 001, the 68C dismissed the Complaint o the >eirs o )olicronio and ruled in avor o the >eirs o $lonsoin a decision, the dispositive portion o +hich readsE

>6F6, the Court 7nds that the preponderance o evidence tilts in avor o the deendants, hence the instantcase is here*# D/(//D.

8he counterclaims are li3e+ise D/(//D.

ith costs against plaintifs.

/ 6D6D.

8he 68C ound that the >eirs o $lonso clearl# esta*lished that the Deed o /ale +as null and void. t held that the>eirs o )olicronio ailed to re*ut the evidence o the >eirs o $lonso, +hich proved that the Deed o /ale in the

7/24/2019 OBLI Cases 1 - 20

20/78

possession o the ormer +as one o the our ;%< Deeds o /ale e4ecuted *# $lonso in avor o his 5 children andsecond +ie or ta4ation purposes? that although ta4 declarations +ere issued in the name o )olicronio, he or his heirsnever too3 possession o the su*ject lands e4cept a portion o parcel A? and that all the produce +ere turned over *#the tenants to $lonso and the administrators o his estate and never to )olicronio or his heirs.

8he 68C urther ound that there +as no mone# involved in the sale. ven granting that there +as, as claimed *# the>eirs o )olicronio, W,000.00 or si4 parcels o land, the amount +as grossl# inade'uate. t +as also noted that theaggregate area o the su*ject lands +as more than dou*le the average share adjudicated to each o the other childrenin the Deed o 4tra-udicial )artition? that the si*lings o )olicronio +ere the ones +ho shared in the produce o theland? and that the >eirs o )olicronio onl# paid real estate ta4es in 199& and 199:. 8he 68C opined that )olicronio must

have *een a+are that the transer +as merel# or ta4ation purposes *ecause he did not su*se'uentl# ta3e possessiono the properties even ater the death o his ather.

8he Deed o 4tra-udicial )artition, on the other hand, +as declared valid *# the 68C as all the heirs o $lonso +ererepresented and received e'ual shares and all the re'uirements o a valid e4tra-judicial partition +ere met. 8he 68Cconsidered ConradoSs claim that he did not understand the ull signi7cance o his signature +hen he signed in *ehal ohis co-heirs, as a gratutitous assertion. 8he 68C +as o the vie+ that +hen he admitted to have signed all the pagesand personall# appeared *eore the notar# pu*lic, he +as presumed to have understood their contents.

Bastl#, neither part# +as entitled to damages. 8he >eirs o $lonso ailed to present testimon# to serve as actual *asisor moral damages, no document +as presented to prove actual damages, and the >eirs o )olicronio +ere ound tohave 7led the case in good aith.

8he 6uling o the C$

$ggrieved, the >eirs o )olicronio appealed *eore the C$, +hich rendered a decision on $pril 0, 00%, the dispositiveportion o +hich reads as ollo+sE

>6F6, the appeal is )$68$BBH 6$N8D. 8he appealed Decision, dated & $pril 001, rendered *# >on. udgeDean 6. 8elan o the 6egional 8rial Court o Pali*o, $3lan, !ranch 9, is here*# $FF6(D +ith (DFC$8NE

1.< 8he Deed o /ale in avor o )olicronio reta, /r., dated A cto*er 19&9, covering si4 ;&< parcels o land ishere*# declared 2D or *eing $!/B8BH /(B$8D?

.< 8he Deed o 4tra-udicial )artition, dated 19 $pril 199, is $NNBBD?

5.< 8he claim or actual and e4emplar# damages are D/(//D or lac3 o actual and legal *asis.

8he case is here*# 6($NDD to the court o origin or the proper partition o $BFN/ 68$S/ state in accordance+ith 6ule &9 o the 199: 6ules o Civil )rocedure. No costs at this instance.

/ 6D6D.

8he C$ a@rmed the 7nding o the 68C that the Deed o /ale +as void. t ound the Deed o /ale to *e a*solutel#simulated as the parties did not intend to *e legall# *ound *# it. $s such, it produced no legal efects and did not alter

the juridical situation o the parties. 8he C$ also noted that $lonso continued to e4ercise all the rights o an o+nereven ater the e4ecution o the Deed o /ale, as it +as undisputed that he remained in possession o the su*jectparcels o land and enjo#ed their produce until his death.

)olicronio, on the other hand, never e4ercised an# rights pertaining to an o+ner over the su*ject lands rom the timethe# +ere sold to him up until his death. >e never too3 or attempted to ta3e possession o the land even ater hisatherSs death, never demanded deliver# o the produce rom the tenants, and never paid realt# ta4es on theproperties. t +as also noted that )olicronio never disclosed the e4istence o the Deed o /ale to his children, as the#+ere, in act, surprised to discover its e4istence. 8he C$, thus, concluded that )olicronio must have *een a+are thatthe transer +as onl# made or ta4ation purposes.

8he testimon# o $mparo Castillo, as to the circumstances surrounding the actual arrangement and agreement*et+een the parties prior to the e4ecution o the our ;%< Deeds o /ale, +as ound *# the C$ to *e unre*utted. 8he68CSs assessment o the credi*ilit# o her testimon# +as accorded respect, and the intention o the parties +as giventhe primar# consideration in determining the true nature o the contract.

Contrar# to the 7nding o the 68C though, the C$ annulled the Deed o 4tra-udicial )artition due to the incapacit# oone o the parties to give his consent to the contract. t held that *eore Conrado could validl# *ind his co-heirs to theDeed o 4tra-udicial )artition, it +as necessar# that he *e clothed +ith the proper authorit#. 8he C$ ruled that aspecial po+er o attorne# +as re'uired under $rticle 1: ;A< and ;1A< o the Civil Code. ithout a special po+er oattorne#, it +as held that Conrado lac3ed the legal capacti# to give the consent o his co-heirs, thus, rendering theDeed o 4tra-udicial )artition voida*le under $rticle 1590 ;1< o the Civil Code.

$s a conse'uence, the C$ ordered the remand o the case to the 68C or the proper partition o the estate, +ith theoption that the parties ma# still voluntaril# efect the partition *# e4ecuting another agreement or *# adopting theassailed Deed o )artition +ith the 68CSs approval in either case. ther+ise, the 68C ma# proceed +ith the compulsor#partition o the estate in accordance +ith the 6ules.

ith regard to the claim or damages, the C$ agreed +ith the 68C and dismissed the claim or actual andcompensator# damages or lac3 o actual and legal *asis.

7/24/2019 OBLI Cases 1 - 20

21/78

!oth parties 7led their respective (otions or 6econsideration, +hich +ere denied *# the C$ or lac3 o merit in a6esolution dated cto*er 1%, 00%.

n their (otion or 6econsideration, the >eirs o )olicronio argued that the 68C violated the *est evidence rule in givingcredence to the testimon# o $mparo Castillo +ith regard to the simulation o the Deed o /ale, and that prescriptionhad set in precluding an# 'uestion on the validit# o the contract.

8he C$ held that the oral testimon# +as admissi*le under 6ule 150, /ection 9 ;*< and ;ceirs o )olicronio +aived their right to o*ject to evidence aliundehaving ailed todo so during trial and or raising such onl# or the 7rst time on appeal. ith regard to prescription, the C$ ruled thatthe action or deense or the declaration o the ine4istence o a contract did not prescri*e under $rticle 1%10 o theCivil Code.

n the other hand, the >eirs o $lonso argued that the Deed o 4tra-udicial )artition should not have *een annulled,and instead the preterited heirs should *e given their share. 8he C$ reiterated that ConradoSs lac3 o capacit# to givehis co-heirsS consent to the e4tra-judicial settlement rendered the same voida*le.

>ence, the present )etitions or 6evie+ on Certiorari.

8he ssues

8he issues presented or resolution *# the >eirs o )olicronio in .6. No. 1&A:% are as ollo+sE

I.

=eer e "o%r o> Ae( : 4orre4 :& r%:&< ( e !ee) o> Abo%e S(e o> 2 O4ober

1969 : vo:) >or be:&< (bo%e ?4::o% (&) :& re(:o& ere@:, m( (ro ev:)e&4e bee&er(:&e) o @(r : b:&):&< ee4 (>er e (r:e (ve bo ):e)

A%m:&< ( :&)ee) e (:) )o4%me& : :m%(e), @eer or &o e (r:e ereo:&4%):&< e:r %44eor :& :&ere (re eoe) o C%e:o& : v(:):, e be:&< bo%&) bAr:4e 112 (&) 121 o> e ":v: "o)e

II.

=eer re4r::o& (:e o b(r (& C%e:o& ree4:&< e v(:): o> e !ee) o> Abo%eS(e )(e) 2 O4ober 1969 =eer re4r::o& (:e o b(r (& 4o(er( ((4D o& ev(:): o> e )ee) o> (bo%e (e ee4%e) 21 e(r e(r:er

III.

=eer e "o%r o> Ae( 4orre4 r%e) :& &%:>:&< e !ee) o> Er(F%):4:( '(r::o&be4(%e "o&r()o Ure( :rom : :b:& Ar:4e 1878 :& re(:o& o Ar:4e 1390 o> e ":v: "o)e (&) :& re(:o& ere@:,@eer e )e>e&e o> r(:?4(:o& (&)or reer::o& r(:e) >or e ?r :me o& (e( m( bee&er(:&e)

8he issues presented or resolution *# the >eirs o $lonso in .6. No. 1&A950 are as ollo+sE

I.

=eer or &o Ae( :& )e4(r:&< e!ee) o> S(e o> %bFe4 roer:e ( (bo%e :m%(e) (&) &% (&) vo:) r% (ro ev:)e&4eb(e) o& e:r >(4%( ?&):& (& obFe4:o&b(e) o& v:o(:o& o> e (ro ev:)e&4e r%e.

II.

=eer or &o e "o%r o> Ae( @( 4orre4 :& o):&< ( "o&r()o Ure(; (4D o> 4((4:o orme) (r o> e e(e o> e (e A>o&o Ure( (&) @( 4orre4 :&4%)e) :& e !ee)o> Er(F%):4:( '(r::o& eve& :> &o r:or (4:o& >or &%:?4(:o& o> e (e @( ?e) b e e:r o>L:ber(o Ure(.

*.

7/24/2019 OBLI Cases 1 - 20

22/78

=eer or &o e e:r o> 'o:4ro&:o Ure( Sr. 4(& 4(:m ( eoe b(e) o& Ar:4e 112 o>e ":v: "o)e ( @e ( e :%e o> re4r::o& 4(& : be r(:e) o& (e(.

8hese various contentions revolve around t+o major issues, to +itE ;1< +hether the Deed o /ale is valid, and ;eirs o )olicronio argued that the land had *een validl# sold to )olicronio as the Deed o /ale contained all theessential elements o a valid contract o sale, *# virtue o +hich, the su*ject properties +ere transerred in his name asevidenced *# the ta4 declaration. 8here *eing no invalidation prior to the e4ecution o the Deed o 4tra-udicia)artition, the pro*it# and integrit# o the Deed o /ale should remain undiminished and accorded respect as it +as adul# notaried pu*lic instrument.

8he >eirs o )olicronio posited that his lo#al services to his ather and his *eing the eldest among $lonsoSs children,might have prompted the old man to sell the su*ject lands to him at a ver# lo+ price as an advance inheritance. 8he#e4plained that )olicronioSs ailure to ta3e possession o the su*ject lands and to claim their produce maniests a Filipinoamil# practice +herein a child +ould ta3e possession and enjo# the ruits o the land sold *# a parent onl# ater thelatterSs death. )olicronio simpl# treated the lands the same +a# his ather $lonso treated them - +here his childrenenjo#ed usuructuar# rights over the properties, as opposed to appropriating them e4clusivel# to himsel. 8he#contended that )olicronioSs ailure to ta3e actual possession o the lands did not prove that he +as not the o+ner as he+as merel# e4ercising his right to dispose o them. 8he# argue that it +as an error on the part o the C$ to concludethat o+nership *# )olicronio +as not esta*lished *# his ailure to possess the properties sold. nstead, emphasis should*e made on the act that the ta4 declarations, *eing indicia o possession, +ere in )olicronioSs name.

8he# urther argued that the >eirs o $lonso ailed to appreciate that the Deed o /ale +as clear enough to conve# thesu*ject parcels o land. Citing jurisprudence, the# contend that there is a presumption that an instrument sets out thetrue agreement o the parties thereto and that it +as e4ecuted or valua*le consideration, 11and +here there is nodou*t as to the intention o the parties to a contract, the literal meaning o the stipulation shall control. 1No+here inthe Deed o /ale is it indicated that the transer +as onl# or ta4ation purposes. n the contrar#, the document clearl#indicates that the lands +ere sold. 8hereore, the# averred that the literal meaning o the stipulation should control.

8he Court disagrees.8he Court 7nds no cogent reason to deviate rom the 7nding o the C$ that the Deed o /ale is null and void or *einga*solutel# simulated. 8he Civil Code providesE

$rt. 15%A. /imulation o a contract ma# *e a*solute or relative. 8he ormer ta3es place +hen the parties do not intendto *e *ound at all? the latter, +hen the parties conceal their true agreement.

$rt. 15%&. $n a*solutel# simulated or 7ctitious contract is void. $ relative simulation, +hen it does not prejudice a thirdperson and is not intended or an# purpose contrar# to la+, morals, good customs, pu*lic order or pu*lic polic# *indsthe parties to their real agreement.

2alerio v. 6eresca15is instructive on the matter o simulation o contractsE

n a*solute simulation, there is a colora*le contract *ut it has no su*stance as the parties have no intention to *e*ound *# it. 8he main characteristic o an a*solute simulation is that the apparent contract is not reall# desired orintended to produce legal efect or in an# +a# alter the juridical situation o the parties. $s a result, an a*solutel#

simulated or 7ctitious contract is void, and the parties ma# recover rom each other +hat the# ma# have given underthe contract. >o+ever, i the parties state a alse cause in the contract to conceal their real agreement, the contract isrelativel# simulated and the parties are still *ound *# their real agreement. >ence, +here the essential re'uisites o acontract are present and the simulation reers onl# to the content or terms o the contract, the agreement is a*solutel#*inding and enorcea*le *et+een the parties and their successors in interest.

Bac3ing, thereore, in an a*solutel# simulated contract is consent +hich is essential to a valid and enorcea*lecontract.1%8hus, +here a person, in order to place his propert# *e#ond the reach o his creditors, simulates a transero it to another, he does not reall# intend to divest himsel o his title and control o the propert#? hence, the deed otranser is *ut a sham.1A/imilarl#, in this case, $lonso simulated a transer to )olicronio purel# or ta4ation purposes,+ithout intending to transer o+nership over the su*ject lands.

8he primar# consideration in determining the true nature o a contract is the intention o the parties. the +ords o acontract appear to contravene the evident intention o the parties, the latter shall prevail. /uch intention is determined

7/24/2019 OBLI Cases 1 - 20

23/78

not onl# rom the e4press terms o their agreement, *ut also rom the contemporaneous and su*se'uent acts o theparties.1&8he true intention o the parties in this case +as su@cientl# proven *# the >eirs o $lonso.

8he >eirs o $lonso esta*lished *# a preponderance o evidence1:that the Deed o /ale +as one o the our ;%o+ a*out #our atherO

$E >e has.1

8he other Deeds o /ale e4ecuted *# $lonso in avor o his children )rudencia and Bi*erato, and second +ie2aleriana, all *earing the same date o e4ecution, +ere dul# presented in evidence *# the >eirs o $lonso, and +ereuncontested *# the >eirs o )olicronio. 8he lands +hich +ere the su*ject o these Deeds o /ale +ere in act includedin the Deed o 4tra-udicial )artition e4ecuted *# all the heirs o $lonso, +here it +as e4pressl# stipulatedE

8hat the a*ove-named $mparo . Castillo, )rudencia . )aradero, Conrado !. reta and (erlinda . 6ivera do here*#recognie and ac3no+ledge as a act that the properties presentl# declared in their respective names or in the names

o their respective parents and are included in the oregoing instrument are actuall# the properties o the deceased$lonso reta and +ere transerred onl# or the purpose o efective administration and development and conveniencein the pa#ment o ta4es and, thereore, all instruments conve#ing or afecting the transer o said properties are nulland void rom the *eginning.19

$s ound *# the C$, $lonso continued to e4ercise all the rights o an o+ner even ater the e4ecution o the Deeds o/ale. t +as undisputed that $lonso remained in possession o the su*ject lands and enjo#ed their produce until hisdeath. No credence can *e given to the contention o the >eirs o )olicrionio that their ather did not ta3e possessiono the su*ject lands or enjo#ed the ruits thereo in deerence to a Filipino amil# practice. >ad this *een true,)olicronio should have ta3en possession o the su*ject lands ater his ather died. n the contrar#, it +as admitted thatneither )olicronio nor his heirs ever too3 possession o the su*ject lands rom the time the# +ere sold to him, and evenater the death o *oth $lonso and )olicronio.

t +as also admitted *# the >eirs o )olicronio that the tenants o the su*ject lands never turned over the produce othe properties to )olicronio or his heirs *ut onl# to $lonso and the administrators o his estate. Neither +as there ademand or their deliver# to )olicronio or his heirs. Neither did )olicronio ever pa# real estate ta4es on the properties,

the onl# pa#ment on record *eing those made *# his heirs in 199& and 199: ten #ears ater his death. n sum,)olicronio never e4ercised an# rights pertaining to an o+ner over the su*ject lands.

8he most protu*erant inde4 o simulation o contract is the complete a*sence o an attempt in an# manner on the parto the ostensi*le *u#er to assert rights o o+nership over the su*ject properties. )olicronioSs ailure to ta3e e4clusivepossession o the su*ject properties or, in the alternative, to collect rentals, is contrar# to the principle o o+nership./uch ailure is a clear *adge o simulation that renders the +hole transaction void. 0

t is urther telling that )olicronio never disclosed the e4istence o the Deed o /ale to his children. 8his, coupled +ith)olicronioSs ailure to e4ercise an# rights pertaining to an o+ner o the su*ject lands, leads to the conclusion that he+as a+are that the transer +as onl# made or ta4ation purposes and never intended to *ind the parties thereto.

$s the a*ove actual circumstances remain unre*utted *# the >eirs o )olicronio, the actual 7ndings o the 68C, +hich+ere a@rmed *# the C$, remain *inding and conclusive upon this Court. 1

7/24/2019 OBLI Cases 1 - 20

24/78

t is clear that the parties did not intend to *e *ound at all, and as such, the Deed o /ale produced no legal efects anddid not alter the juridical situation o the parties. 8he Deed o /ale is, thereore, void or *eing a*solutel# simulatedpursuant to $rticle 1%09 ;< o the Civil Code +hich providesE

$rt. 1%09. 8he ollo+ing contracts are ine4istent and void rom the *eginningE

4 4 4

;< 8hose +hich are a*solutel# simulated or 7ctitious?

4 4 4

For guidance, the ollo+ing are the most undamental characteristics o void or ine4istent contractsE1< $s a general rule, the# produce no legal efects +hatsoever in accordance +ith the principle ='uod nullumest nullum producit efectum.=

< 8he# are not suscepti*le o rati7cation.

5< 8he right to set up the deense o ine4istence or a*solute nullit# cannot *e +aived or renounced.

%< 8he action or deense or the declaration o their ine4istence or a*solute nullit# is imprescripti*le.

A< 8he ine4istence or a*solute nullit# o a contract cannot *e invo3ed *# a person +hose interests are notdirectl# afected.

/ince the Deed o /ale is void, the su*ject properties +ere properl# included in the Deed o 4tra-udicial )artition othe estate o $lonso.

$*sence and nade'uac# o Consideration

8he second presumption is re*utted *# the lac3 o consideration or the Deed o /ale.

n their $ns+er,5the >eirs o $lonso initiall# argued that the Deed o /ale +as void or lac3 o consideration, and evengranting that there +as consideration, such +as inade'uate. 8he >eirs o )olicronio counter that the deenses oa*sence or inade'uac# o consideration are not grounds to render a contract void.

8he >eirs o )olicronio contended that under $rticle 1%:0 o the Civil Code, gross inade'uac# o the price does notafect a contract o sale, e4cept as it ma# indicate a deect in the consent, or that the parties reall# intended adonation or some other act or contract. Citing jurisprudence, the# argued that inade'uac# o monetar# considerationdoes not render a conve#ance ine4istent as li*eralit# ma# *e su@cient cause or a valid contract, +hereas raud or *adaith ma# render it either rescissi*le or voida*le, although valid until annulled. %8hus, the# argued that i the contractsufers rom inade'uate consideration, it remains valid until annulled, and the remed# o rescission calls or judiciaintervention, +hich remed# the >eirs o $lonso ailed to ta3e.

t is urther argued that even granting that the sale o the su*ject lands or a consideration o W,000.00 +asinade'uate, a*sent an# evidence o the air mar3et value o the land at the time o its sale, it cannot *e concluded that

the price at +hich it +as sold +as inade'uate.A$s there is nothing in the records to sho+ that the >eirs o $lonsosupplied the true value o the land in 19&9, the amount o W,000.00 must thus stand as its salea*le value.

n this issue, the Court 7nds or the >eirs o $lonso.

For lac3 o consideration, the Deed o /ale is once again ound to *e void. t states that )olicronio paid, and $lonsoreceived, the W,000.00 purchase price on the date o the signing o the contractE

8hat , $BFN/ F. 68$, 4 4 4 or and in consideration o the sum o 8 8>/$ND ;W,000.00< )//, )hilippineCurrenc#, to me in hand paid *# )BC6N (. 68$, 4 4 4, do here*# CD, 86$N/F6, and CN2H, *# +a# oa*solute sale, 4 4 4 si4 ;&< parcels o land 4 4 4.&Jmphasis oursK

$lthough, on its ace, the Deed o /ale appears to *e supported *# valua*le consideration, the 68C ound that there+as no mone# involved in the sale.:8his 7nding +as a@rmed *# the C$ in ruling that the sale is void or *einga*solutel# simulated. Considering that there is no cogent reason to deviate rom such actual 7ndings, the# are*inding on this Court.

t is +ell-settled in a long line o cases that +here a deed o sale states that the purchase price has *een paid *ut inact has never *een paid, the deed o sale is null and void or lac3 o consideration. 8hus, although the contracstates that the purchase price o W,000.00 +as paid *# )olicronio to $lonso or the su*ject properties, it has *eenproven that such +as never in act paid as there +as no mone# involved. t must, thereore, ollo+ that the Deed o/ale is void or lac3 o consideration.

iven that the Deed o /ale is void, it is unnecessar# to discuss the issue on the inade'uac# o consideration.

)arol vidence and >earsa#

8he >eirs o )olicronio aver that the rules on parol evidence and hearsa# +ere violated *# the C$ in ruling that theDeed o /ale +as void.

8he# argued that *ased on the parol evidence rule, the >eirs o $lonso and, speci7call#, $mparo Castillo, +ere not ina position to prove the terms outside o the contract *ecause the# +ere not parties nor successors-in-interest in theDeed o /ale in 'uestion. 8hus, it is argued that the testimon# o $mparo Castillo violates the parol evidence rule.

7/24/2019 OBLI Cases 1 - 20

25/78

/temming rom the presumption that the >eirs o $lonso +ere not parties to the contract, it is also argued that theparol evidence rule ma# not *e properl# invo3ed *# either part# in the litigation against the other, +here at least oneo the parties to the suit is not a part# or a priv# o a part# to the +ritten instrument in 'uestion and does not *ase aclaim on the instrument or assert a right originating in the instrument or the relation esta*lished there*#.9

8heir arguments are untena*le.

8he o*jection against the admission o an# evidence must *e made at the proper time, as soon as the groundsthereor *ecome reasona*l# apparent, and i not so made, it +ill *e understood to have *een +aived. n the case otestimonial evidence, the o*jection must *e made +hen the o*jectiona*le 'uestion is as3ed or ater the ans+er is

given i the o*jectiona*le eatures *ecome apparent onl# *# reason o such ans+er.

50

n this case, the >eirs o)olicronio ailed to timel# o*ject to the testimon# o $mparo Castillo and the# are, thus, deemed to have +aived the*ene7t o the parol evidence rule.

ranting that the >eirs o )olicronio timel# o*jected to the testimon# o $mparo Castillo, their argument +ould still ail.

/ection 9 o 6ule 150 o the 6ules o Court providesE

/ection 9. vidence o +ritten agreements. Q hen the terms o an agreement have *een reduced to +riting, it isconsidered as containing all the terms agreed upon and there can *e, *et+een the parties and their successors ininterest, no evidence o such terms other than the contents o the +ritten agreement.

>o+ever, a part# ma# present evidence to modi#, e4plain or add to the terms o +ritten agreement i he puts in issuein his pleadingE

;a< $n intrinsic am*iguit#, mista3e or imperection in the +ritten agreement?

;*< 8he ailure o the +ritten agreement to e4press the true intent and agreement o the parties thereto?

;c< 8he validit# o the +ritten agreement? or

;d< 8he e4istence o other terms agreed to *# the parties or their successors in interest ater the e4ecution othe +ritten agreement.

8he term =agreement= includes +ills.

Jmphasis oursK

)aragraphs ;*< and ;c< are applica*le in the case at *ench.

8he ailure o the Deed o /ale to e4press the true intent and agreement o the parties +as clearl# put in issue in the$ns+er51o the >eirs o $lonso to the Complaint. t +as alleged that the Deed o /ale +as onl# made to lessen thepa#ment o estate and inheritance ta4es and not meant to transer o+nership. 8he e4ception in paragraph ;*< isallo+ed to ena*le the court to ascertain the true intent o the parties, and once the intent is clear, it shall prevail over+hat the document appears to *e on its ace. 5$s the true intent o the parties +as dul# proven in the present case, itno+ prevails over +hat appears on the Deed o /ale.

8he validit# o the Deed o /ale +as also put in issue in the $ns+er, and +as precisel# one o the issues su*mitted tothe 68C or resolution.558he operation o the parol evidence rule re'uires the e4istence o a valid +ritten agreement. tis, thus, not applica*le in a proceeding +here the validit# o such agreement is the act in dispute, such as +hen acontract ma# *e void or lac3 o consideration.5%Considering that the Deed o /ale has *een sho+n to *e void or *einga*solutel# simulated and or lac3 o consideration, the >eirs o $lonso are not precluded rom presenting evidence tomodi#, e4plain or add to the terms o the +ritten agreement.

8he >eirs o )olicronio must *e in a state o conusion in arguing that the >eirs o $lonso ma# not 'uestion the Deedo /ale or not *eing parties or successors-in-interest therein on the *asis that the parol evidence rule ma# not *eproperl# invo3ed in a proceeding or litigation +here at least one o the parties to the suit is not a part# or a priv# o apart# to the +ritten instrument in 'uestion and does not *ase a claim on the instrument or assert a right originating inthe instrument or the relation esta*lished there*#. their argument +as to *e accepted, then the >eirs o )olicronio+ould themselves *e precluded rom invo3ing the parol evidence rule to e4clude the evidence o the >eirs o $lonso.

ndeed, the applica*ilit# o the parol evidence rule re'uires that the case *e *et+een parties and their successors-in-

interest.5An this case, *oth the >eirs o $lonso and the >eirs o )olicronio are successors-in-interest o the parties tothe Deed o /ale as the# claim rights under $lonso and )olicronio, respectivel#. 8he parol evidence rule e4cludingevidence aliunde, ho+ever, still cannot appl# *ecause the present case alls under t+o e4ceptions to the rule, asdiscussed a*ove.

ith respect to hearsa#, the >eirs o )olicronio contended that the rule on hearsa# +as violated +hen the testimon# o$mparo Castillo +as given +eight in proving that the su*ject lands +ere onl# sold or ta4ation purposes as she +as aperson alien to the contract. ven granting that the# did not o*ject to her testimon# during trial, the# argued that itshould not have *een appreciated *# the C$ *ecause it had no pro*ative value +hatsoever.5&

8he Court disagrees.

t has indeed *een held that hearsa# evidence +hether o*jected to or not cannot *e given credence or having nopro*ative value.5:8his principle, ho+ever, has *een rela4ed in cases +here, in addition to the ailure to o*ject to the

7/24/2019 OBLI Cases 1 - 20

26/78

admissi*ilit# o the su*ject evidence, there +ere other pieces o evidence presented or there +ere other circumstancesprevailing to support the act in issue. n 8op-eld (anuacturing, nc. v. CD /.$.,5this Court heldE

>earsa# evidence alone ma# *e insu@cient to esta*lish a act in an injunction suit ;)ar3er v. Furlong, & ). %90< *ut+hen no o*jection is made thereto, it is, li3e an# other evidence, to *e considered and given the importance itdeserves. ;/mith v. Dela+are G $tlantic 8elegraph G 8elephone Co., A1 $ %&%

7/24/2019 OBLI Cases 1 - 20

27/78

that the sale o $lonsoSs properties to )olicronio su*stantiall# diminished their successional rights or that theirlegitimes +ould *e undul# prejudiced, considering that under $rticle % o the Civil Code, one +ho has compulsor#heirs ma# dispose o his estate provided that he does not contravene the provisions o the Civil Code +ith regard tothe legitime o said heirs. >aving ailed to do so, the# argued that the >eirs o $lonso should *e precluded rom'uestioning the validit# o the Deed o /ale.

/till, the Court disagrees.

$rticle % o the Civil Code providesE

$rt. %. ne +ho has no compulsor# heirs ma# dispose *# +ill o all his estate or an# part o it in avor o an# person

having capacit# to succeed.

ne +ho has compulsor# heirs ma# dispose o his estate provided he does not contravene the provisions o this Code+ith regard to the legitime o said heirs.

8his article reers to the principle o reedom o disposition *# +ill. hat is involved in the case at *ench is not adisposition *# +ill *ut *# Deed o /ale. >ence, the >eirs o $lonso need not 7rst prove that the dispositionsu*stantiall# diminished their successional rights or undul# prejudiced their legitimes.

napplica*ilit# o $rticle 1%1

8he >eirs o )olicronio contended that even assuming that the contract +as simulated, the >eirs o $lonso +ould stil*e *arred rom recovering the properties *# reason o $rticle 1%1 o the Civil Code, +hich provides that i the act in+hich the unla+ul or or*idden cause does not constitute a criminal ofense, and the ault is *oth on the contractingparties, neither ma# recover +hat he has given *# virtue o the contract or demand the perormance o the otherSsunderta3ing. $s the >eirs o $lonso alleged that the purpose o the sale +as to avoid the pa#ment o inheritanceta4es, the# cannot ta3e rom the >eirs o )olicronio +hat had *een given to their ather.

n this point, the Court again disagrees.

$rticle 1%1 o the Civil Code is as ollo+sE

$rt. 1%1. the act in +hich the unla+ul or or*idden cause consists does not constitute a criminal ofense, theollo+ing rules shall *e o*servedE

;1< hen the ault is on the part o *oth contracting parties, neither ma# recover +hat he has given *# virtue o thecontract, or demand the perormance o the otherSs underta3ing?

;< hen onl# one o the contracting parties is at ault, he cannot recover +hat he has given *# reason o the contract,or as3 or the ul7llment o +hat has *een promised him. 8he other, +ho is not at ault, ma# demand the return o+hat he has given +ithout an# o*ligation to compl# +ith his promise.

$rticle 1%1 is not applica*le to 7ctitious or simulated contracts, *ecause the# reer to contracts +ith an illegal causeor su*ject-matter.%8his article presupposes the e4istence o a cause, it cannot reer to 7ctitious or simulated contracts

+hich are in realit# non-e4istent.%5

$s it has *een determined that the Deed o /ale is a simulated contract, theprovision cannot appl# to it.

ranting that the Deed o /ale +as not simulated, the provision +ould still not appl#. /ince the su*ject properties +ereincluded as properties o $lonso in the Deed o 4tra-udicial )artition, the# are covered *# corresponding inheritanceand estate ta4es. 8hereore, ta4 evasion, i at all present, +ould not arise, and $rticle 1%1 +ould again *einapplica*le.

)rescription

From the position that the Deed o /ale is valid and not void, the >eirs o )olicronio argued that an# 'uestion regardingits validit# should have *een initiated through judicial process +ithin 10 #ears rom its notariation in accordance +ith$rticle 11%% o the Civil Code. /ince 1 #ears had alread# elapsed +hen the >eirs o $lonso assailed the validit# o theDeed o /ale in 199&, prescription had set in. Furthermore, since the >eirs o $lonso did not see3 to nulli# the ta4declarations o )olicronio, the# had impliedl# ac'uiesced and given due recognition to the >eirs o )olicronio as therightul inheritors and should, thus, *e *arred rom la#ing claim on the land.

8he >eirs o )olicronio are mista3en.

$rticle 1%10 o the Civil Code providesE

$rt. 1%10. 8he action or the declaration o the ine4istence o a contract does not prescri*e.

8his is one o the most undamental characteristics o void or ine4istent contracts.%%

$s the Deed o /ale is a void contract, the action or the declaration o its nullit#, even i 7led 1 #ears ater itse4ecution, cannot *e *arred *# prescription or it is imprescripti*le. Furthermore, the right to set up the deense oine4istence or a*solute nullit# cannot *e +aived or renounced. %A8hereore, the >eirs o $lonso cannot *e precludedrom setting up the deense o its ine4istence.

2alidit# o the Deed o 4tra-udicial )artition

8he Court no+ resolves the issue o the validit# o the Deed o 4tra-udicial )artition.

7/24/2019 OBLI Cases 1 - 20

28/78

nenorcea*ilit#

8he >eirs o $lonso argued that the C$ +as mista3en in annulling the Deed o 4tra-udicial )artition due to theincapacit# o Conrado to give the consent o his co-heirs or lac3 o a special po+er o attorne#. 8he# contended that+hat +as involved +as not the capacit# to give consent in *ehal o the co-heirs *ut the authorit# to represent them.8he# argue that the Deed o 4tra-udicial )artition is not a voida*le or an annulla*le contract under $rticle 1590 o theCivil Code, *ut rather, it is an unenorcea*le or, more speci7call#, an unauthoried contract under $rticles 1%05 ;1< and151: o the Civil Code. $s such, the Deed o 4tra-udicial )artition should not *e annulled *ut onl# *e renderedunenorcea*le against the si*lings o Conrado.

8he# urther argued that under $rticle 151: o the Civil Code, +hen the persons represented +ithout authorit# haverati7ed the unauthoried acts, the contract *ecomes enorcea*le and *inding. 8he# contended that the >eirs o)olicronio rati7ed the Deed o 4tra-udicial )artition +hen Conrado too3 possession o one o the parcels o landadjudicated to him and his si*lings, and +hen another parcel +as used as collateral or a loan entered into *# some othe >eirs o )olicronio. 8he Deed o 4tra-udicial )artition having *een rati7ed and its *ene7ts accepted, the samethus *ecame enorcea*le and *inding upon them.

8he >eirs o $lonso averred that granting arguendo that Conrado +as not authoried to represent his co-heirs andthere +as no rati7cation, the C$ should not have remanded the case to the 68C or partition o $lonsoSs estate. 8he#argued that the C$ should not have applied the Civil Code general provision on contracts, *ut the special provisionsdealing +ith succession and partition. 8he# contended that contrar# to the ruling o the C$, the e4tra-judicial parition+as not an act o strict dominion, as it has *een ruled that partition o inherited land is not a conve#ance *ut acon7rmation or rati7cation o title or right to the land. %&8hereore, the la+ re'uiring a special po+er o attorne# shouldnot *e applied to partitions.

n the other hand, the >eirs o )olicronio insisted that the C$ pronouncement on the invalidit# o the Deed o 4tra-

udicial )artition should not *e distur*ed *ecause the su*ject properties should not have *een included in the estate o$lonso, and *ecause Conrado lac3ed the +ritten authorit# to represent his si*lings. 8he# argued +ith the C$ in rulingthat a special po+er o attorne# +as re'uired *eore Conrado could sign in *ehal o his co-heirs.

8he >eirs o )olicronio denied that the# rati7ed the Deed o 4tra-udicial )artition. 8he# claimed that there is nothingon record that esta*lishes that the# rati7ed the partition. Far rom doing so, the# precisel# 'uestioned its e4ecution *#7ling a complaint. 8he# urther argued that under $rticle 1%09 ;5< o the Civil Code, rati7cation cannot *e invo3ed tovalidate the illegal act o including in the partition those properties +hich do not *elong to the estate as it providesanother mode o ac'uiring o+nership not sanctioned *# la+.

Furthermore, the >eirs o )olicronio contended that the deenses o unenorcea*ilit#, rati7cation, and preterition are*eing raised or the 7rst time on appeal *# the >eirs o $lonso. For having ailed to raise them during the trial, the>eirs o $lonso should *e deemed to have +aived their right to do so.

8he Court agrees in part +ith the >eirs o $lonso.

8o *egin, although the deenses o unenorcea*ilit#, rati7cation and preterition +ere raised *# the >eirs o $lonso or

the 7rst time on appeal, the# are concomitant matters +hich ma# *e ta3en up. $s long as the 'uestioned items *earrelevance and close relation to those speci7call# raised, the interest o justice +ould dictate that the#, too, must *econsidered and resolved. 8he rule that onl# theories raised in the initial proceedings ma# *e ta3en up *# a part#thereto on appeal should reer to independent, not concomitant matters, to support or oppose the cause o action.%:

n the 68C, the >eirs o )olicronio alleged that ConradoSs consent +as vitiated *# mista3e and undue inMuence, andthat he signed the Deed o 4tra- udicial )artition +ithout the authorit# or consent o his co-heirs.

8he 68C ound that ConradoSs credi*ilit# had altered, and his claims +ere rejected *# the 68C as gratuitous assertionsn the *asis o such, the 68C ruled that Conrado dul# represented his si*lings in the Deed o 4tra-udicial )artition.

n the other hand, the C$ annulled the Deed o 4tra-udicial )artition under $rticle 1590 ;1< o the Civil Code, holdingthat a special po+er o attorne# +as lac3ing as re'uired under $rticle 1: ;A< and ;1A< o the Civil Code. 8hesearticles are as ollo+sE

$rt. 1: