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G.R. No. 72694 December 1, 1987 AURORA DEL BANCO, EVELYN DEL BANCO, FEDERICO TAINO, SOLEDAD TAINO, JOVENCIO TAINO, SAMSON TAINO, NOE TAINO,SOCORRO TAINO and CLEOFAS TAINO, petitioners,vs.INTERMEDIATE APPELLATE COURT (Second Civil Cases Division), ALEJANDRA PANSACOLA, LEONILA ENCALLADO, VEDASTOENCALLADO, JOSE YEPES, et al., respondents.

PARAS, J.: This is a petition for review on certiorari by way of appeal from: (a) the decision of respondent Court of Appeals (Intermediate AppellateCourt) * promulgated on May 17, 1985 in AC-G.R. CV No. 70460, entitled " Alejandra Pansacola, et al. vs. Domen Villabona del Banco, et al ." whichreversed and set aside the judgment ** of the trial court; and (b) its resolution ** of October 15, 1985 in the same case, denying petitioners' motionfor reconsideration of the aforementioned decision and their supplement to motion for reconsideration.The dispositive portion of the questioned decision (Rollo, p. 97) reads, as follows:

ACCORDINGLY, the decision appealed from is hereby SET ASIDE insofar as it dismisses the complaint, and another one entered — (1) Declaring plaintiffs-appellants and defendants-appellees, in their respective capacities as described in par. V of the complaint, asco-owners of the property in dispute, but subject to the four-part pro-indiviso division already made by said property;(2) Ordering the cancellation of all certificates of title that may have been issued to any of the parties hereto; and(3) Ordering the complete and final partition of the subject property in conformity with law.For this purpose, this case is hereby remanded to the Court of origin so that a final partition shall be made in accordance withSections 2, 3, et. seq ., Rule 69 of the Rules of Court.Let a copy of this decision be furnished to the Register of Deeds for the Province of Quezon.The facts of the case are taken from the decision of the Appellate Court (Rollo, p. 39) as follows:In a document executed in the Municipality of San Rafael, Bulacan, on February 11, 1859, three brothers, Benedicto Pansacola, Jose Pansacola andManuel Pansacola (known as Fr. Manuel Pena) entered into an agreement which provided, among others:(1) That they will purchase from the Spanish Government the lands comprising the Island of Cagbalite which is located within the boundaries of theMunicipality of Mauban, Province of Tayabas (now Quezon) and has an approximate area of 1,600 hectares;(2) That the lands shall be considered after the purchase as their common property;

(3) That the co-ownership includes Domingo Arce and Baldomera Angulo, minors at that time represented by their father, Manuel Pansacola (Fr. ManuePena) who will contribute for them in the proposed purchase of the Cagbalite Island;(4) That whatever benefits may be derived from the Island shall be shared equally by the co-owners in the following proportion: Benedicto Pansacola-1/4 share; Jose Pansacola-1/4 share; and, Domingo Arce and Baldomera Angulo-2/4 shares which shall be placed under the care of their father, ManuelPansacola (Fr. Manuel Pena).On August 14, 1866, co-owners entered into the actual possession and enjoyment of the Island purchased by them from the Spanish Government. On

April 11, 1868 they agreed to modify the terms and conditions of the agreement entered into by them on February 11, 1859. The new agreementprovided for a new sharing and distribution of the lands, comprising the Island of Cagbalite and whatever benefits may be derived therefrom, as follows(a) The first one-fourth (1/4) portion shall belong to Don Benedicto Pansacola; (b) The second one-fourth (1/4) portion shall belong to Don Jose Pansacola; (c) The third one-fourth(1/4) portion shall henceforth belong to the children of their deceased brother, Don Eustaquio Pansacola,namely: Don Mariano Pansacola,- Maria Pansacola and Don Hipolito Pansacola; (d) The fourth and last one-fourth (1/4) portion shall belong to their nephews and nieces (1) Domingo Arce , (2) Baldomera Angulo ,(3) Marcelina Flores, (4) Francisca Flores , (5) Candelaria dela Cruz , and (6) Gervasio Pansacola who, being all minors, are still underthe care of their brother, Manuel Pansacola (Fr. Manuel Pena). The latter is the real father of said minors.

About one hundred years later, on November 18, 1968, private respondents brought a special action for partition in the Court of First Instance of

Quezon, under the provisions of Rule 69 of the Rules of Court, including as parties the heirs and successors-in-interest of the co-owners of the CagbaliteIsland in the second contract of co-ownership dated April 11, 1968. In their answer some of the defendants, petitioners herein, interposed suchdefenses as prescription, res judicata, exclusive ownership, estoppel and laches.

After trial on the merits, the trial court rendered a decision *** dated November 6, 1981 dismissing the complaint, the dispositive portion of whichreads as follows:WHEREFORE, and in the fight of all the foregoing this Court finds and so holds that the Cagbalite Island has already beenpartitioned into four (4) parts among the original co-owners or their successors-in-interest.Judgment is therefore rendered for the defendants against the plaintiffs dismissing the complaint in the above entitled case.Considering that the cross claims filed in the above entitled civil case are not compulsory cross claims and in order that they may belitigated individually the same are hereby dismissed without prejudice.IT IS SO ORDERED.The motion for reconsideration filed by the plaintiffs, private respondents herein, was denied by the trial court in an order dated February 25, 1982(Record on Appeal, p. 241).On appeal, respondent Court reversed and set aside the decision of the lower court (Rollo, p. 117). It also denied the motion for reconsideration and thesupplement to motion for reconsideration filed by private respondents, in its resolution dated October 15, 1983 (Rollo, p. 86).Instant petition was filed with the Court on December 5, 1985 (Rollo, p. 12). Petitioners Josefina Pansacola, et al. having filed a separate petition (G.R.

No. 72620) on the same subject matter and issues raised in the instant 'petition, the counsel for private respondents filed a consolidated comment onthe separate petitions for review on February 24, 1986 with the First Division of the Court (Rollo, p. 119). It appears that counsel for petitioners alsofiled a consolidated reply to the consolidated comment of private respondents as required by the Second Division of the Court (Rollo, p. 151). However,petitioners filed a separate reply in the instant case on February 18,1987 (Rollo, p. 168)as required by the Court in a Resolution of the Second Divisiondated November 24, 1986 (Rollo, p. 160).On May 19, 1987, private respondents in the instant petition filed a manifestation praying for the denial of the instant petition in the same manner thatG.R. No. 72620 was denied by the Court in its Resolution dated July 23, 1986 (Rollo, p. 151). Their rejoinder to the reply of petitioners was filed on May25,1987 (Rollo, p. 179).On June 8, 1987, the Court resolved to give due course to the petition (Rollo, p. 192). The memorandum of private respondents was mailed on July 18,1987 and received in the Court on July 29, 1987 (Rollo, p. 112); the memorandum for petitioners was mailed on August 18, 1987 and received in theCourt on September 7, 1987 (Rollo, p. 177).The sole issue to be resolved by the Court is the question of whether or not Cagbalite Island is still undivided property owned in common by the heirsand successors-in-interest of the brothers, Benedicto, Jose and Manuel Pansacola.The Pansacola brothers purchased the Island in 1859 as common property and agreed on how they would share in the benefits to be derived from theIsland. On April 11, 1868, they modified the terms and conditions of the agreement so as to include in the co-ownership of the island the children of



their deceased brothers Eustaquio and the other children of Manuel Pansacola (Fr. Manuel Pena) who were committed in the agreement of February 11,1859. The new agreement provided for a new sharing proportion and distribution of the Island among the co-owners.On January 20, 1907, the representative of the heirs of all the original owners of Cagbalite Island entered into an agreement to partition the Island,supplemented by another agreement dated April 18, 1908. The contract dated January 20, 1907 provides as follows:

Sa Mauban, Tayabas, ika 20 ng Enero ng 1907 caming mga quinatawan ng mga ibang co-herederos na hindi caharap, sa pulong naito, sa nasa naming lahat na magcaroon na ng catahimikan ang aming-aming cabahagui sa Pulong Kagbalete sumacatuid upangmapagtoos ang hangahan ng apat na sapul na pagcacabahagui nitong manang ito, pagcacausap na naming lahat at maihanay atmapagtalonan ang saysay ng isa't isa, ay cusa naming pinagcasunduan at pinasiya ang nangasosonod: — Una: Ang malaquing calupaan, alis ang lahat na pacatan ay babahaguin alinsunod sa pagcabaki na guinawa sa croquis na niyari ngpractico agrimensor Don Jose Garcia.Icalawa: Ang Lomingoy, doon ang tuid na guhit sa ilong ng Pait ay pagaapatin ding sinlaqui ayon sa dating pagkakabaki.Icatlo: Cung magawa na ang tunay na piano at icapit na sa lupa, paglalagay ng nadarapat na mojon, ang masacupan ng guhit,sumacatuid ang caingin at pananim ng isa na nasacupan ng pucto na noocol sa iba, ay mapapasulit sa dapat mag-ari, napagbabayaran nito ang nagtanim sa halagang:- bawat caponong niog na nabunga, P 1.00 'un peso); cung ang bias ay abot sa isangvara, P 0.50; cung bagong tanim o locloc P 0. 50 ang capono.Icapat: Ang lahat na pacatan ay bacod na pagaapatin at bawat bahagui ay noocol sa isat-isa sa apat na sanga ng paganacangnagmana.Icalima: Upang ang naipatanim ng bawat isa ay matama sa canya ng mailagan ang hirap ng loob ng nagatikha; ay pagtotolong-tolongan ng lahat naiba na mahusay ang dalawang partes na magcalapit na mapa ayong tumama, hangang may pagluluaran, sanagsikap at maoyanam, maidaco sa lugar na walang cailangang pagusapan.Icanim: Ang casulatang ito, cung mapermahan na na magcacaharap sampong ng mga ibang co-herederos na notipicahan nitonglahat na pinagcasundoan ay mahahabilin sa camay ng agrimensor, Amadeo Pansacola, upang canyang mapanusugan angmaipaganap ang dito'y naootos.Na sa catunayan at catibayan ng lahat na nalalagda dito, sa pag galang at pag ganap dito sa paingacaisahan ay pumirma sampo ngmga sacsing caharap at catanto ngayong fecha ayon sa itaas.

The contract dated April 18, 1908 provides as follows:Sa Mauban, ika 18 ng Abril ng 1908, sa pagcacatipon ng lahat na firmantes nito ay pinagcaisahan itong nangasosonod: —

Una — Pinagtitibay ang mga pinagcasundoan sa itaas noong 20 ng Enero ng 1907, liban na lamang sa mga pangcat na una aticapat at tongcol doon pinasiya naming bahaguinin ng halohalo at paparejo ang calupaan at pacatan. Ycalawa — Sa pagsucat ng agrimensor na si Amadeo at paggawa ng piano at descripcion ay pagbabayaran siya ng sa bawat isanaoocol sa halagang isang piso sa bawat hectares.Icatlo — Ang counting pucto sa 'Mayanibulong' na may caingin ni G. Isidro Altamarino, asawa ni Restitute ay tutumbasan namancay G. Norberto Pansacola sa lugar ng Dapo calapit ng Pinangalo ng gasing sucat.Icapat — Sa inilahad na piano ay pinasiya nang itoloy at upang maca pagparehistro ang isa't isa ay pinagcaisahang magcacagastosna parepareho para sa tablang pangmohon at ibat iba pang cagastusan.Sa catunayan at catibayan ay cami, pumirma. (Record on Appeal, p. 224)

There is nothing in all four agreements that suggests that actual or physical partition of the Island had really been made by either the original owners ortheir heirs or successors-in-interest. The agreement entered into in 1859 simply provides for the sharing of whatever benefits can be derived from theisland. The agreement, in fact, states that the Island to be purchased shall be considered as their common property. In the second agreement enteredin 1868 the co-owners agreed not only on the sharing proportion of the benefits derived from the Island but also on the distribution of the Island eachof the brothers was allocated a 1/4 portion of the Island with the children of the deceased brother, Eustaquio Pansacola allocated a 1/4 portion and thechildren of Manuel Pansacola (Fr. Manuel Pena) also allocated a 1/4 portion of the Island. With the distribution agreed upon each of the co-owner is aco-owner of the whole, and in this sense, over the whole he exercises the right of dominion, but he is at the same time the sole owner of a portion, in

the instant case, a 1/4 portion (for each group of co-owners) of the Island which is truly abstract, because until physical division is effected such portionis merely an Ideal share, not concretely determined (3 Manresa, Codigo Civil, 3rd Ed., page 486, cited in Lopez vs. Cuaycong, 74 Phil. 601; De la Cruzvs. Cruz, 32 SCRA 307 [1970]; Felices vs. Colegado, 35 SCRA 173 [1970],; Dultra vs. CFl 70 SCRA 465 [1976]; Gatchalian vs. Arlegui, 75 SCRA 234[1977].)In the agreement of January 20, 1907, the heirs that were represented agreed on how the Island was to be partitioned. The agreement of April 18,1908 which supplements that of January 20, 1907 reveals that as of the signing of the 1908 agreement no actual partition of the Island had as yet beendone. The second and fourth paragraphs of the agreement speaks of a survey yet to be conducted by a certain Amadeo and a plan and description yetto be made. Virgilio Pansacola, a son of the surveyor named Amadeo who is referred to in the contract dated April 18, 1908 as the surveyor to whomthe task of surveying Cagbalite Island pursuant to said agreement was entrusted, however, testified that said contracts were never implementedbecause nobody defrayed the expenses for surveying the same (Record on Appeal, p. 225).Petitioners invoke res judicata to bar this action for partition in view of the decision of the Court in G.R. No. 21033,"Domingo Arce vs. Maria Villabona, eal.," 21034, "Domingo Arce vs. Francisco Pansacola, et al.," and 21035,"Domingo Arce vs. Emiliano Pansacola, et al." promulgated on February 20, 1958(Rollo, p. 141) and Brief for Defendants-Appellees, p. 87 Appendix 1), wherein the Court said:

Considering the facts that he waited for a period of nearly 23 years after the return from his deportation before taking any positiveaction to recover his pretended right in the property in question, gives great credit, in our opinion, to the declaration of thewitnesses for the defense (a) that the original parcel of land was partitioned as they claim, and (b) that the plaintiff had disposed of

all the right and interest which he had in the portion which had been given to him.The issue in the aforementioned case which were tried together is not whether there has already been a partition of the Cagbalite Island. The actionswere brought by the plaintiff to recover possession of three distinct parcels of land, together with damages. In fact the word partition was used in themetaphysical or Ideal sense (not in its physical sense).Commenting on the above ruling of the Court in connection with the instant case, the respondent Court said:

Concededly, the Supreme Court decision in G.R. Nos. 21033-35 (Exh. X) did use or employ the word "partition." A careful reading ofthe said decision will, however, reveal, and we so hold, that the employment or use of the word "partition" therein was made not inits technical and legal meaning or sense adverted to above, but, rather in its Ideal, abstract and spiritual sense, this is (at) onceevident from the bare statement in said decision to the effect that the property was divided into four parts, without any reference tothe specific parts of the property that may have been adjudicated to each owner. There being no such reference in the decision andin the judgment affirmed therein to the adjudication of specific and definite portions of the property to each co-owner, there is aclear and logical inference that there was indeed no adjudication of specific and definite portions of the property made to each co-owner.

It must be admitted that the word "partition" is not infrequently used both in popular and technical parlance (Fule vs. Fule, 52 Phil. 750 [1929]). Forpurposes of the aforementioned case, evidently the Court used the word "partition" to refer to the distribution of the Cagbalite Island agreed upon by



the original owners and in the later agreements, by the heirs and their subsequent successors-in-interest. There need not be a physical partition; adistribution of the Island even in a state of indiviso or was sufficient in order that a co-owner may validly sell his portion of the co-owned property. Thesale of part of a particular lot thus co-owned by one co-owner was within his right pro-indiviso is valid in its entirety (Pamplona vs. Moreto, 96 SCRA 775[1980]) but he may not convey a physical portion with boundaries of the land owned in common (Mercado vs. Liwanag, 5 SCRA 472 [1962]). Definitely,there was no physical partition of the Island in 1859. Neither could there have been one in 1894 because the manner of subdividing the Island was onlyprovided for in the later agreements entered into by the heirs in 1907 and 1908. There was a distribution of the Island in 1868 as agreed upon by theoriginal co-owners in their agreement of April 11, 1868. Any agreement entered into by the parties in 1894 could be no more than another agreementas to the distribution of the Island among the heirs of the original co-owners and the preparation of a tentative plan by a practical surveyor, a Mr. JoseGarcia, mentioned in the first paragraph of the 1907 agreement, preparatory to the preparation of the real plan to be prepared by the surveyor

Amadeo, mentioned in the agreement of April 18, 1908.What is important in the Court's ruling in the three aforementioned cases is that, the fact that there was a distribution of the Island among the co-owners made the sale of Domingo Arce of the portion allocated to him though pro-indiviso, valid. He thus disposed of all his rights and interests in theportion given to him.It is not disputed that some of the private respondents and some of the petitioners at the time the action for partition was filed in the trial court havebeen in actual possession and enjoyment of several portions of the property in question (Rollo, p. 148). This does not provide any proof that the Islandin question has already been actually partitioned and co-ownership terminated. A co-owner cannot, without the conformity of the other co-owners or a

judicial decree of partition issued pursuant to the provision of Rule 69 of the Rules of Court (Rule 71 of the Old Rules), adjudicate to himself in feesimple a determinate portion of the lot owned in common, as his share therein, to the exclusion of other co-owners (Santos, Jr. vs. Buenconsejo, 14SCRA 407 [1965]; Carvajal vs. Court of Appeals, 112 SCRA 237 [1982]). It is a basic principle in the law of co-ownership both under the present CivilCode as in the Code of 1889 that no individual co- owner can claim any definite portion thereof (Diversified Credit Corporation vs. Rosada 26 SCRA 470[1968]). lt is therefore of no moment that some of the co-owners have succeeded in securing cadastral titles in their names to some portions of theIsland occupied by them (Rollo, p. 10).It is not enough that the co-owners agree to subdivide the property. They must have a subdivision plan drawn in accordance with which they takeactual and exclusive possession of their respective portions in the plan and titles issued to each of them accordingly (Caro vs. Court of Appeals, 113SCRA 10 [1982]). The mechanics of actual partition should follow the procedure laid down in Rule 69 of the Rules of Court. Maganon vs. Montejo, 146SCRA 282 [1986]).Neither can such actual possession and enjoyment of some portions of the Island by some of the petitioners herein be considered a repudiation of the

co-ownership. It is undisputed that the Cagbalite Island was purchased by the original co-owners as a common property and it has not been proven thathe Island had been partitioned among them or among their heirs. While there is co-ownership, a co-owner's possession of his share is co-possessionwhich is linked to the possession of the other co-owners (Gatchalian vs. Arlegui, 75 SCRA 234 [1977]).Furthermore, no prescription shall run in favor of a co-owner against his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership (Valdez vs. Olonga, 51 SCRA 71 [1973], Tero vs. Tero, 131 SCRA 100 [1984]). Co-owners cannot acquire by prescription the share of theother co-owners, absent a clear repudiation of the co-ownership clearly communicated to the other co-owners (Mariano vs. De Vega, 148 SCRA 342[1987]).

An action for partition does not prescribe. Article 403 of the Old Civil Code, now Article 497, provides that the assignees of the co-owners may take partin the partition of the common property, and Article 400 of the Old Code, now Article 494 provides that each co-owner may demand at any time thepartition of the common property, a provision which implies that the action to demand partition is imprescriptible or cannot be barred by laches(Budlong vs. Pondoc, 79 SCRA 24 [1977]). An action for partition does not lie except when the co-ownership is properly repudiated by the co- owner(Jardin vs. Hollasco, 117 SCRA 532 [1982]).On July 23, 1986, the Court through its Second Division denied the petition for the review of G.R. No. 72620, the petition for review on certiorariseparately filed by Josefina Pansacola (Rollo, p. 151).PREMISES CONSIDERED, the instant petition is likewise DENIED for lack of merit.SO ORDERED.

G.R. No. L-4656 November 18, 1912 RICARDO PARDELL Y CRUZ and VICENTA ORTIZ Y FELIN DE PARDELL, plaintiffs-appellees,vs.GASPAR DE BARTOLOME Y ESCRIBANO andMATILDE ORTIZ Y FELIN DE BARTOLOME, defendants-appellants.Gaspar de Bartolome, in his own behalf.B. Gimenez Zoboli, for appellees.

TORRES, J.: This is an appeal by bill of exceptions, from the judgment of October 5, 1907, whereby the Honorable Dionisio Chanco, judge, absolved the defendantsfrom the complaint, and the plaintiff from a counterclaim, without special finding as to costs.Counsel for the spouses Ricardo y Cruz and Vicente Ortiz y Felin de Pardell, the first of whom, absent in Spain by reason of his employment, conferredupon the second sufficient and ample powers to appear before the courts of justice, on June 8, 1905, in his written complaint, alleged that the plaintiff,

Vicente Ortiz, and the defendant, Matilde Ortiz, are the duly recognized natural daughters of the spouses Miguel Ortiz and Calixta Felin y Paula who diedin Vigan, Ilocos Sur, in 1875 and 1882, respectively; that Calixta Felin, prior to her death, executed on August 17, 1876, a nuncupative will in Vigan

whereby she made her four children, named Manuel, Francisca, Vicenta, and Matilde, surnamed Ortiz y Felin, her sole and universal heirs of all herproperty; that, of the persons enumerated, Manuel died before his mother and Francisca a few years after her death, leaving no heirs by force of law,and therefore the only existing heirs of the said testatrix are the plaintiff Vicenta Ortiz and the defendant Matilde Ortiz; that, aside from some personalproperty and jewelry already divided among the heirs, the testatrix possessed, at the time of the execution of her will, and left at her death the realproperties which, with their respective cash values, are as follows:

1. A house of strong material, with the lot on which it is built, situated on Escolta Street, Vigan, and valued at P6,000.00

2. A house of mixed material, with the lot on which it stands, at No. 88 Washington Street, Vigan; valued at 1,500.00

3. A lot on Magallanes Street, Vigan; valued at 100.00

4. A parcel of rice land, situated in the barrio of San Julian, Vigan; valued at 60.00

5. A parcel of rice land in the pueblo of Santa Lucia; valued at 86.00



6. Three parcels of land in the pueblo of Candon; valued at 150.00

Total 7,896.00

That, on or about the first months of the year 1888, the defendants, without judicial authorization, nor friendly or extrajudicial agreement, took uponthemselves the administration and enjoyment of the said properties and collected the rents, fruits, and products thereof, to the serious detriment of theplaintiffs' interest; that, notwithstanding the different and repeated demands extrajudicially made upon Matilde Ortiz to divide the aforementionedproperties with the plaintiff Vicente and to deliver to the latter the one-half thereof, together with one-half of the fruits and rents collected therefrom,the said defendant and her husband, the self-styled administrator of the properties mentioned, had been delaying the partition and delivery of the saidproperties by means of unkept promises and other excuses; and that the plaintiffs, on account of the extraordinary delay in the delivery of one-half of said properties, or their value in cash, as the case might be, had suffered losses and damages in the sum of P8,000. Said counsel for the plaintiffstherefore asked that judgment be rendered by sentencing the defendants, Gaspar de Bartolome, and Matilde Ortiz Felin de Bartolome, to restore anddeliver to the plaintiffs one-half of the total value in cash, according to appraisal, of the undivided property specified, which one-half amountedapproximately to P3,948, or if deemed proper, to recognize the plaintiff Vicenta Ortiz to be vested with the full and absolute right of ownership to thesaid undivided one-half of the properties in question, as universal testamentary heir thereof together with the defendant Matilde Ortiz, to indemnify theplaintiffs in the sum of P8,000, for losses and damages, and to pay the costs.Counsel for the defendants, in his answer denied the facts alleged in paragraphs 1, 4, 6, 7, and 8 thereof, inasmuch as, upon the death of the litigatingsister's brother Manuel, their mother, who was still living, was his heir by force of law, and the defendants had never refused to give to the plaintiff

Vicente Ortiz her share of the said properties; and stated that he admitted the facts alleged in paragraph 2, provided it be understood, however, thatthe surname of the defendant's mother was Felin, and not Feliu, and that Miguel Ortiz died in Spain, and not in Vigan; that he also admitted paragraph3 of the complaint, with the difference that the said surname should be Felin, and likewise paragraph 5, except the part thereof relating to the personalproperty and the jewelry, since the latter had not yet been divided; that the said jewelry was in the possession of the plaintiffs and consisted of: oneLozada gold chronometer watch with a chain in the form of a bridle curb and a watch charm consisting of the engraving of a postage stamp on a stonemounted in gold and bearing the initials M. O., a pair of cuff buttons made of gold coins, four small gold buttons, two finger rings, another with theinitials M. O., and a gold bracelet; and that the defendants were willing to deliver to the plaintiffs, in conformity with their petitions, one-half of the totalvalue in cash, according to appraisement, of the undivided real properties specified in paragraph 5, which half amounted to P3,948.In a special defense said counsel alleged that the defendants had never refused to divide the said property and had in fact several years before solicited

the partition of the same; that, from 1886 to 1901, inclusive, there was collected from the property on Calle Escolta the sum of 288 pesos, besides afew other small amounts derived from other sources, which were delivered to the plaintiffs with other larger amounts, in 1891, and from the propertyon Calle Washington, called La Quinta , 990.95 pesos, which proceeds, added together, made a total of 1,278.95 pesos, saving error or omission; that,between the years abovementioned, Escolta, and that on Calle Washington,La Quinta , 376.33, which made a total of 1,141.71, saving error or omissionthat, in 1897, the work of reconstruction was begun of the house on Calle Escolta, which been destroyed by an earthquake, which work was notfinished until 1903 and required an expenditure on the part of the defendant Matilde Ortiz, of 5,091.52 pesos; that all the collections made up to August1, 1905, including the rent from the stores, amounted to only P3,654.15, and the expenses, to P6,252.32, there being, consequently, a balance of P2,598.17, which divided between the sisters, the plaintiff and the defendant, would make the latter's share P1,299.08; that, as shown by the paperskept by the plaintiffs, in the year 1891 the defendant Bartolome presented to the plaintiffs a statement in settlements of accounts, and delivered to theperson duly authorized by the latter for the purpose, the sum of P2,606.29, which the said settlement showed was owing his principals, from varioussources; that, the defendant Bartolome having been the administrator of the undivided property claimed by the plaintiffs, the latter were owing theformer legal remuneration of the percentage allowed by law for administration; and that the defendants were willing to pay the sum of P3,948, one-halfof the total value of the said properties, deducting therefrom the amount found to be owing them by the plaintiffs, and asked that judgment berendered in their favor to enable them to recover from the latter that amount, together with the costs and expenses of the suit.The defendants, in their counter claim, repeated each and all of the allegations contained in each of the paragraphs of section 10 of their answer; thatthe plaintiffs were obliged to pay to the administrator of the said property the remuneration allowed him by law; that, as the revenues collected by the

defendants amounted to no more than P3,654.15 and the expenditures incurred by them, to P6,252.32, it followed that the plaintiffs owed thedefendants P1,299.08, that is one-half of the difference between the amount collected from and that extended on the properties, and asked that judgment be therefore rendered in their behalf to enable them to collect this sum from the plaintiffs, Ricardo Pardell and Vicenta Ortiz, with legalinterest thereon from December 7, 1904, the date when the accounts were rendered, together with the sums to which the defendant Bartolome wasentitled for the administration of the undivided properties in question.By a written motion of August 21, 1905, counsel for the plaintiffs requested permission to amend the complaint by inserting immediately after the words"or respective appraisal," fifth line of paragraph 5, the phrase "in cash in accordance with the assessed value," and likewise further to amend the same,in paragraph 6 thereof, by substituting the following word in lieu of the petition for the remedy sought: "By reason of all the foregoing, I beg the courtto be pleased to render the judgment by sentencing the defendants, Gaspar de Bartolome and Matilde Ortiz Felin de Bartolome, to restore and deliver tothe plaintiffs an exact one-half of the total vale of the undivided properties described in the complaint, such value to be ascertained by the expertappraisal of two competent persons, one of whom shall be appointed by the plaintiffs and the other by the defendants, and, in case of disagreementbetween these two appointees such value shall be determined by a third expert appraiser appointed by the court, or, in a proper case, by the priceoffered at public auction; or, in lieu thereof, it is requested that the court recognize the plaintiff, Vicenta Ortiz, to be vested with a full and absolute righto an undivided one-half of the said properties; furthermore, it is prayed that the plaintiffs be awarded an indemnity of P8,000 for losses and damages,and the costs." Notwithstanding the opposition of the defendants, the said amendment was admitted by the court and counsel for the defendants wereallowed to a period of three days within which to present a new answer. An exception was taken to this ruling.

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

After this partition had been made counsel for the defendants, by a writing of March 8, 1906, set forth: That, having petitioned for the appraisement of the properties in question for the purpose of their partition, it was not to be understood that he desired from the exception duly entered to the rulingmade in the matter of the amendment to the complaint; that the properties retained by the defendants were valued at P9,310, and those retained bythe plaintiffs, at P2,885, one-half of which amounts each party had to deliver to the other, as they were pro indiviso properties; that, therefore, thedefendants had to pay the plaintiffs the sum of P3,212.50, after deducting the amount which the plaintiffs were obliged to deliver to the defendants, asone-half of the price of the properties retained by the former; that, notwithstanding that the amount of the counterclaim for the expenses incurred inthe reconstruction of the pro indiviso property should be deducted from the sum which the defendants had to pay the plaintiffs, the former, for the



purpose of bringing the matter of the partition to a close, would deliver to the latter, immediately upon the signing of the instrument of purchase andsale, the sum of P3,212.50, which was one-half of the value of the properties alloted to the defendants; such delivery, however, was not to beunderstood as a renouncement of the said counterclaim, but only as a means for the final termination of the pro indiviso status of the property.The case having been heard, the court on October 5, 1907, rendered judgment holding that the revenues and the expenses were compensated by theresidence enjoyed by the defendant party, that no losses or damages were either caused or suffered, nor likewise any other expense besides thoseaforementioned, and absolved the defendants from the complaint and the plaintiffs from the counterclaim, with no special finding as to costs. Anexception was taken to this judgment by counsel for the defendants who moved for a new trial on the grounds that the evidence presented did notwarrant the judgment rendered and that the latter was contrary to law. This motion was denied, exception whereto was taken by said counsel, whofiled the proper bill of exceptions, and the same was approved and forwarded to the clerk of this court, with a transcript of the evidence.Both of the litigating sisters assented to a partition by halves of the property left in her will by their mother at her death; in fact, during the course of this suit, proceedings were had, in accordance with the agreement made, for the division between them of the said hereditary property of commonownership, which division was recognized and approved in the findings of the trial court, as shown by the judgment appealed from.The issues raised by the parties, aside from said division made during the trial, and which have been submitted to this court for decision, concern: (1)The indemnity claimed for losses and damages, which the plaintiffs allege amount to P8,000, in addition to the rents which should have been derivedfrom the house on Calle Escolta, Vigan; (2) the payment by the plaintiffs to the defendants of the sum of P1,299.08, demanded by way of counterclaim,together with legal interest thereon from December 7, 1904; (3) the payment to the husband of the defendant Matilde Ortiz, of a percentage claimed tobe due him as the administrator of the property of common ownership; (4) the division of certain jewelry in the possession of the plaintiff Vicenta Ortiz;and (5) the petition that the amendment be held to have been improperly admitted, which was made by the plaintiffs in their written motion of August21, 1905, against the opposition of the defendants, through which admission the latter were obliged to pay the former P910.50.lawphil.net Before entering upon an explanation of the propriety or impropriety of the claims made by both parties, it is indispensable to state that the trial judge,in absolving the defendants from the complaint, held that they had not caused losses and damages to the plaintiffs, and that the revenues and theexpenses were compensated, in view of the fact that the defendants had been living for several years in the Calle Escolta house, which was pro indiviso property of joint ownership.By this finding absolving the defendants from the complaint, and which was acquiesced in by the plaintiffs who made no appeal therefrom, the first issue has been decided which was raised by the plaintiffs, concerning the indemnity for losses and damages, wherein are comprised the rents whichshould have been obtained from the upper story of the said house during the time it was occupied by the defendants, Matilde Ortiz and her husband,Gaspar de Bartolome.

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

Article 394 of the Civil Code prescribes:Each coowner may use the things owned in common, provided he uses them in accordance with their object and in such manner as not toinjure the interests of the community nor prevent the coowners from utilizing them according to their rights.Matilde Ortiz and her husband occupied the upper story, designed for use as a dwelling, in the house of joint ownership; but the record shows no proof that, by so doing, the said Matilde occasioned any detriment to the interest of the community property, nor that she prevented her sister Vicenta fromutilizing the said upper story according to her rights. It is to be noted that the stores of the lower floor were rented and accounting of the rents wasduly made to the plaintiffs.Each coowner of realty held pro indiviso exercises his rights over the whole property and may use and enjoy the same with no other limitation than thathe shall not injure the interests of his coowners, for the reason that, until a division be made, the respective part of each holder can not be determinedand every one of the coowners exercises, together with his other coparticipants, joint ownership over the pro indiviso property, in addition to his useand enjoyment of the same.

As the hereditary properties of the joint ownership of the two sisters, Vicenta Ortiz, plaintiff, and Matilde Ortiz, defendant, were situated in the Provinceof Ilocos Sur, and were in the care of the last named, assisted by her husband, while the plaintiff Vicenta with her husband was residing outside of thesaid province the greater part of the time between 1885 and 1905, when she left these Islands for Spain, it is not at all strange that delays anddifficulties should have attended the efforts made to collect the rents and proceeds from the property held in common and to obtain a partition of thelatter, especially during several years when, owing to the insurrection, the country was in a turmoil; and for this reason, aside from that founded on theright of coownership of the defendants, who took upon themselves the administration and care of the properties of joint tenancy for purposes of theirpreservation and improvement, these latter are not obliged to pay to the plaintiff Vicenta one-half of the rents which might have been derived from theupper of the story of the said house on Calle Escolta, and, much less, because one of the living rooms and the storeroom thereof were used for thestorage of some belongings and effects of common ownership between the litigants. The defendant Matilde, therefore, in occupying with her husbandthe upper floor of the said house, did not injure the interests of her coowner, her sister Vicenta, nor did she prevent the latter from living therein, butmerely exercised a legitimate right pertaining to her as coowner of the property.Notwithstanding the above statements relative to the joint-ownership rights which entitled the defendants to live in the upper story of the said house,yet in view of the fact that the record shows it to have been proved that the defendant Matilde's husband, Gaspar de Bartolome, occupied for four yearsa room or a part of the lower floor of the same house on Calle Escolta, using it as an office for the justice of the peace, a position which he held in thecapital of that province, strict justice, requires that he pay his sister-in-law, the plaintiff, one half of the monthly rent which the said quarters could haveproduced, had they been leased to another person. The amount of such monthly rental is fixed at P16 in accordance with the evidence shown in the

record. This conclusion as to Bartolome's liability results from the fact that, even as the husband of the defendant coowner of the property, he had noright to occupy and use gratuitously the said part of the lower floor of the house in question, where he lived with his wife, to the detriment of theplaintiff Vicenta who did not receive one-half of the rent which those quarters could and should have produced, had they been occupied by a stranger,in the same manner that rent was obtained from the rooms on the lower floor that were used as stores. Therefore, the defendant Bartolome must payto the plaintiff Vicenta P384, that is, one-half of P768, the total amount of the rents which should have been obtained during four years from thequarters occupied as an office by the justice of the peace of Vigan.With respect to the second question submitted for decision to this court, relative to the payment of the sum demanded as a counterclaim, it wasadmitted and proved in the present case that, as a result of a serious earthquake on August 15, 1897, the said house on Calle Escolta was left in ruinsand uninhabitable, and that, for its reconstruction or repair, the defendants had to expend the sum of P6,252.32. This expenditure, notwithstanding thait was impugned, during the trial, by the plaintiffs, was duly proved by the evidence presented by the defendants. Evidence, unsuccessfully rebutted,was also introduced which proved that the rents produced by all the rural and urban properties of common ownership amounted, up to August 1, 1905,to the sum of P3,654.15 which, being applied toward the cost of the repair work on the said house, leaves a balance of P2,598.17, the amount actuallyadvanced by the defendants, for the rents collected by them were not sufficient for the termination of all the work undertaken on the said building,necessary for its complete repair and to replace it in a habitable condition. It is therefore lawful and just that the plaintiff Vicenta Ortiz, who was willingto sell to her sister Matilde for P1,500, her share in the house in question, when it was in a ruinous state, should pay the defendants one-half of the



amount expanded in the said repair work, since the building after reconstruction was worth P9,000, according to expert appraisal. Consequently, thecounterclaim made by the defendants for the payment to them of the sum of P1,299.08, is a proper demand, though from this sum a reduction must bemade of P384, the amount of one-half of the rents which should have been collected for the use of the quarters occupied by the justice of the peace,the payment of which is incumbent upon the husband of the defendant Matilde, as aforesaid, and the balance remaining, P915.08, is the amount whichthe plaintiff Vicenta must pay to the defendants.The defendants claim to be entitled to the collection of legal interest on the amount of the counterclaim, from December 7, 1904. This contention cannot be sustained, inasmuch as, until this suit is finally decided, it could not be known whether the plaintiffs would or would not be obliged to pay thesum whatever in reimbursement of expenses incurred by the plaintiffs in the repair work on the said house on Calle Escolta, whether or not thedefendants, in turn, were entitled to collect any such amount, and, finally, what the net sum would be which the plaintiff's might have to pay asreimbursement for one-half of the expenditure made by the defendants. Until final disposal of the case, no such net sum can be determined, nor untilthen can the debtor be deemed to be in arrears. In order that there be an obligation to pay legal interest in connection with a matter at issue betweenthe parties, it must be declared in a judicial decision from what date the interest will be due on the principal concerned in the suit. This rule has beenestablished by the decisions of the supreme court of Spain, in reference to articles 1108, 1109, and 1110 of the Civil Code, reference on April 24, 1867,November 19, 1869, and February 22, 1901.With regard to the percentage, as remuneration claimed by the husband of the defendant Matilde for his administration of the property of commonownership, inasmuch as no stipulation whatever was made in the matter by and between him and his sister-in-law, the said defendant, the claimant isnot entitled to the payment of any remuneration whatsoever. Of his own accord and as an officious manager, he administered the said pro indiviso property, one-half of which belonged to his wife who held it in joint tenancy, with his sister-in-law, and the law does not allow him anycompensation as such voluntary administrator. He is merely entitled to a reimbursement for such actual and necessary expenditures as he may havemade on the undivided properties and an indemnity for the damages he may have suffered while acting in that capacity, since at all events it was hisduty to care for and preserve the said property, half of which belonged to his wife; and in exchange for the trouble occasioned him by theadministration of his sister-in-law's half of the said property, he with his wife resided in the upper story of the house aforementioned, without paymentof one-half of the rents said quarters might have produced had they been leased to another person.With respect to the division of certain jewelry, petitioned for by the defendants and appellants only in their brief in this appeal, the record of theproceedings in the lower court does not show that the allegation made by the plaintiff Vicenta is not true, to the effect that the deceased mother of thelitigant sisters disposed of this jewelry during her lifetime, because, had she not done so, the will made by the said deceased would have been exhibitedin which the said jewelry would have been mentioned, at least it would have been proved that the articles in question came into the possession of the

plaintiff Vicenta without the expressed desire and the consent of the deceased mother of the said sisters, for the gift of this jewelry was previouslyassailed in the courts, without success; therefore, and in view of its inconsiderable value, there is no reason for holding that the said gift was not made. As regards the collection of the sum of P910.50, which is the difference between the assessed value of the undivided real properties and the price of thesame as determined by the judicial expert appraiser, it is shown by the record that the ruling of the trial judge admitting the amendment to the originalcomplaint, is in accord with the law and principles of justice, for the reason that any of the coowners of a pro indiviso property, subject to division orsale, is entitled to petition for its valuation by competent expert appraisers. Such valuation is not prejudicial to any of the joint owners, but is beneficialto their interests, considering that, as a general rule, the assessed value of a building or a parcel of realty is less than the actual real value of theproperty, and this being appraiser to determine, in conjunction with the one selected by the plaintiffs, the value of the properties of joint ownership.These two experts took part in the latter proceedings of the suit until finally, and during the course of the latter, the litigating parties agreed to anamicable division of the pro indiviso hereditary property, in accordance with the price fixed by the judicial expert appraiser appointed as a third party, inview of the disagreement between and nonconformity of the appraisers chosen by the litigants. Therefore it is improper now to claim a right to thecollection of the said sum, the difference between the assessed value and that fixed by the judicial expert appraiser, for the reason that the increase inprice, as determined by this latter appraisal, redounded to the benefit of both parties.In consideration of the foregoing, whereby the errors assigned to the lower court have been duly refuted, it is our opinion that, with a partial reversal ofthe judgment appealed from, in so far as it absolves the plaintiffs from the counterclaim presented by the defendants, we should and hereby dosentence the plaintiffs to the payment of the sum of P915.08, the balance of the sum claimed by the defendants as a balance of the one-half of the

amount which the defendants advanced for the reconstruction or repair of the Calle Escolta house, after deducting from the total of such sum claimedby the latter the amount of P384 which Gaspar de Bartolome, the husband of the defendant Matilde, should have paid as one-half of the rents due forhis occupation of the quarters on the lower floor of the said house as an office for the justice of the peace court of Vigan; and we further find: (1) Thatthe defendants are not obliged to pay one-half of the rents which could have been obtained from the upper story of the said house; (2) that theplaintiffs can not be compelled to pay the legal interest from December 7, 1904, on the sum expanded in the reconstruction of the aforementionedhouse, but only the interest fixed by law, at the rate of 6 per cent per annum, from the date of the judgment to be rendered in accordance with thisdecision; (3) that the husband of the defendant Matilde Ortiz is not entitled to any remuneration for the administration of the pro indiviso propertybelonging to both parties; (4) that, neither is he entitled to collect from the plaintiffs the sum of P910.50, the difference between the assessed valuationand the price set by the expert appraisal solicited by the plaintiffs in their amendment to the complaint; and, (5) that no participation shall be made of

jewelry aforementioned now in the possession of the plaintiff Vicenta Ortiz. The said judgment, as relates to the points appealed, is affirmed, in so faras its findings agree with those of this decision, and is reversed, in so far as they do not. No special finding is made regarding the costs of bothinstances. So ordered.

Arellano, C.J., Mapa, Johnson, Carson and Trent, JJ., concur. G.R. No. L-46001 March 25, 1982LUZ CARO, petitioner,vs.

HONORABLE COURT OF APPEALS and BASILIA LAHORRA VDA. DE BENITO, AS ADMINISTRATRIX OF THE INTESTATE ESTATE OFMARIO BENITO, respondents.

GUERRERO, J.: This is a petition for certiorari under Rule 45 of the Revised Rules of Court seeking a review of the decision of the Court of Appeals, 1 promulgated onFebruary 11, 1977, in CA-G.R. No. 52570-R entitled "Basilia Lahorra Vda. de Benito, as Administratrix of the Intestate Estate of Mario Benito vs. LuzCaro", as well as the resolution of the respondent Court, dated May 13, 1977, denying petitioner's Motion for Reconsideration.The facts of the case are as follows:

Alfredo Benito, Mario Benito and Benjamin Benito were the original co-owners of two parcels of land covered by Transfer Certificates of Title Nos. T-609and T-610 of the Registry of Deeds of Sorsogon. Mario died sometime in January, 1957. His surviving wife, Basilia Lahorra and his father, SaturninoBenito, were subsequently appointed in Special Proceeding No. 508 of the Court of First Instance of Sorsogon as joint administrators of Mario's estate.On August 26, 1959, one of the co-owners, Benjamin Benito, executed a deed of absolute sale of his one-third undivided portion over said parcels of land in favor of herein petitioner, Luz Caro, for the sum of P10,000.00. This was registered on September 29, 1959. Subsequently, with the consent of Saturnino Benito and Alfredo Benito as shown in their affidavits both dated September 15, 1960, Exhibits G and F respectively, a subdivision title wasissued to petitioner Luz Caro over Lot I-C, under T.C.T. No. T-4978.



Sometime in the month of May, 1966, private respondent Basilia Lahorra Vda. de Benito learned from an allegation in a pleading presented by petitionerin Special Proceeding No. 508 that the latter acquired by purchase from Benjamin Benito the aforesaid one-third undivided share in each of the twoparcels of land. After further verification, she sent to petitioner thru her counsel, a written offer to redeem the said one-third undivided share dated

August 25, 1966. Inasmuch as petitioner ignored said offer, private respondent sought to intervene in Civil Case No. 2105 entitled "Rosa Amador Vda.de Benito vs. Luz Caro" for annulment of sale and mortgage and cancellation of the annotation of the sale and mortgage involving the same parcels of land, but did not succeed as the principal case was dismissed on a technicality, that is, for failure to prosecute and the proposed intervenor failed to paythe docketing fees. Private respondent, thus, filed the present case as an independent one and in the trial sought to prove that as a joint administratorof the estate of Mario Benito, she had not been notified of the sale as required by Article 1620 in connection with Article 1623 of the New Civil Code.On the other hand, petitioner presented during the hearing of the case secondary evidence of the service of written notice of the intended sale topossible redemptioners in as much as the best thereof, the written notices itself sent to and Saturnino Benito, could not be presented for the reasonthat said notices were sent to persons who were already dead when the complaint for legal redemption was brought. Instead, the affidavit of BenjaminBenito, executed ante litem motam, attesting to the fact that the possible redemptioners were formally notified in writing of his intention to sell hisundivided share, was presented in evidence. The deposition of Saturnino's widow was likewise taken and introduced in evidence, wherein she testifiedthat she received and gave to her husband the written notice of the intended sale but that the latter expressed disinterest in buying the property.

After hearing the evidence, the trial judge dismissed the complaint on the grounds that: (a) private respondent, as administratrix of the intestate estateof Mario Benito, does not have the power to exercise the right of legal redemption, and (b) Benjamin Benito substantially complied with his obligation offurnishing written notice of the sale of his one-third undivided portion to possible redemptioners.Private respondent's Motion for Reconsideration of the trial court's decision having been denied, she appealed to the respondent Court of Appealscontending that the trial Judge erred inI. . . not inhibiting himself from trying and deciding the case because his son is an associate or member of the law office of Atty.Rodolfo A. Madrid, the attorney of record of defendant-appellee in the instant case;II. . contending that Benjamin Benito complied with the provisions of Article 1623 of the Revised Civil Code that before a co-ownercould sell his share of the property owned in common with the other co-heirs, he must first give written notice of his desire to hisco-heirs; (p. 49, R.A.)III. concluding that the fact that one of the administrators who was actively managing the estate was furnished a written notice bythe co-owner of his desire to sell his share was enough compliance of the provisions of Article 1623 of the Civil Code for the reasonthat the intention of the law is only to give a chance to the new co-owner to buy the share intended to be sold if he desires to buy

the same; (p. 50, R.A.)IV. . refusing to allow plaintiff to redeem the subject property upon authority of Butte vs. Manuel Uy & Sons, L-15499, Feb. 28,1962 (p. 51, R.A.) and in consequently dismissing the complaint (p. 52, R.A.).In disposing of the aforesaid errors, the Court of Appeals finding for plaintiff (herein private respondent) held:1. That it is not clear that Atty. Arcangel, son of the trial Judge, was legally associated as practitioner with counsel for Luz Caro; that it i s not shown atany rate that plaintiff had asked for Judge Arcangel's disqualification and that at any rate also, in such factual situation, an optional ground fordisqualification is addressed to his sound discretion with which it would not be correct for appellate court to interfere or overrule.2. That since the right of the co-owner to redeem in case his share be sold to a stranger arose after the death of Mario Benito, such right did not formpart of the hereditary estate of Mario but instead was the personal right of the heirs, one of whom is Mario's widow. Thus, it behooved either thevendor, Benjamin, or his vendee, Luz Caro, to have made a written notice of the intended or consummated sale under Article 1620 of the Civil Code.3. That the recital in the deed of sale that the vendor notified his co-owners of his desire to dispose of his share, who all declined to buy, was but aunilateral statement and could not be proof of the notice required by the law.4. That the registration of the deed of sale did not erase that right.5. That the affidavit of notice executed on January 20, 1960 of Benjamin Benito declaring that written notices of the sale as required by law were dulysent to Alfredo Benito and Saturnino Benito, the latter in his capacity as administrator of the estate of Mario Benito, as well as the sworn statement of Saturnino Benito's widow dated November 18, 1968 confirming that her husband received the written notice of the sale referred to in Benjamin Benito's

affidavit of notice would not satisfy that there was clear notice in writing of the specific term of the intended sale. Worse, Saturnino was only a co-administrator and hence, his unilateral act could not bind the principal because there was no less than a renunciation of a right pertaining to the heirs,under Article 1818, NCC, apart from the fact that the right of redemption is not within their administration.6. That the further claim of defendant that offer to redeem was filed out of time and that there was no actual tender loses all importance, there beingno date from which to count the 30-day period to redeem because there was no notice given.The dispositive part of the decision of the Court of Appeals reads as follows:IN VIEW THEREOF, this Court is constrained to reverse, as it now reverses, judgment appealed from, upon payment by plaintiff ordeposit in Court, within 30 days after this judgment should have become final, of the sum of P10,000.00, defendant is ordered toexecute a deed of redemption over the one-third share of BENJAMIN BENITO in favor of plaintiff for herself and as representative of the children of Mario Benito and therefrom, to deliver said one-third share of BENJAMIN BENITO, costs against defendant-appellee.SO ORDERED.Upon denial of the motion for reconsideration, petitioner brought this petition for review raising the following errors:1. Respondent Court erred in allowing the exercise of the right of legal redemption with respect to the lots in question.2. Respondent Court erred when it made the finding that there was no notice in law from which to count the tolling of the period of redemption and thathe sale was not made known at all to private respondent.The alleged first error of respondent Court is premised on the fact that the lot in question sought to be redeemed is no longer owned in common.

Petitioner contends that the right sought to be exercised by private respondent in the case assumes that the land in question is under co-ownership, theaction being based on Article 1620 of the New Civil Code which provides: A co-owner of a thing may exercise the right of redemption in case the shares of all the other co-owners or any of them, are sold toa third person. If the price of alienation is grossly excessive, the petitioner shall pay only a reasonable price.Should two or more co-owners desire to exerc ise the right of redemption, they may only do so in proportion to the share they mayrespectively have in the thing owned in common.However, the fact is that as early as 1960, co-ownership of the parcels of land covered by Transfer Certificates of Title Nos. T-609 and T-610 wasterminated when Alfredo Benito, Luz Caro and the Intestate Estate of Mario Benito, represented by administrators Saturnino Benito, as trustee andrepresentative of the heirs of Mario Benito, agreed to subdivide the property.

An agreement of partition, though oral, is valid and consequently binding upon the parties. (Hernandez vs. Andal, et al., 78 Phil.196)

A petition for subdivision was then filed for the purpose. This was accompanied by the affidavits of Alfredo Benito and Saturnino Benito, both datedSeptember 15, 1960 to the effect that they agree to the segregation of the land formerly owned in common by Mario Benito, Alfredo Benito andBenjamin Benito. A subdivision plan was made and by common agreement Lot I-C thereof, with an area of 163 hectares, more or less, was ceded to



petitioner. Thereafter, the co-owners took actual and exclusive possession of the specific portions respectively assigned to them. A subdivision title wassubsequently issued on the lot assigned to petitioner, to wit, Transfer Certificate of Title No. T-4978.In Caram, et al. vs. Court of Appeals, et al., 101 Phil. 315, a case squarely in point, this Court held:

Inasmuch as the purpose of the law in establishing the right of legal redemption between co-owners is to reduce the number of participants until the community is done away with (Viola vs. Tecson, 49 Phil. 808), once the property is subdivided and distributedamong the co-owners, the community has terminated and there is no reason to sustain any right of legal redemption.

Although the foregoing pronouncement has reference to the sale made after partition , this Court therein saw no difference with respect to a conveyancewhich took place before the partition agreement and approval by the court. Thus, it held:

Nevertheless, the result is the same, because We held in Saturnino vs. Paulino, 97 Phil. 50, that the right of redemption under Article 1067 may be exercised only before partition . In this case the r ight was asserted not only after partition but after the propertyinherited had actually been subdivided into several parcels which were assigned by lot to the several heirs.

In refutation, private respondent argues that petitioner Luz Caro acted in bad faith and in fraud of the rights of the heirs of a deceased Mario Benito inobtaining a subdivision title over a one-third portion of the land in question which she brought from Benjamin Benito, and for this reason, she is deemedto hold said property in trust for said heirs. The rule, however, is it fraud in securing the registration of titles to the land should be supported by clearand convincing evidence. (Jaramil vs. Court of Appeals, 78 SCRA 420). As private respondent has not shown and proved the circumstances constitutingfraud, it cannot be held to exist in this case.

As aforesaid, a subdivision title has been issued in the name petitioner on the lot ceded to her. Upon the expiration of the term of one year from thedate of the entry of the subdivision title, the Certificate of Title shall be incontrovertible (Section 38, Act 496). Since the title of petitioner is nowindefeasible, private respondent cannot, by means of the present action, directly attack the validity thereof.Even on the assumption that there still is co-ownership here and that therefore, the right of legal redemption exists, private respondent asadministratrix, has no personality to exercise said right for and in behalf of the intestate estate of Mario Benito. She is on the same footing as co-administrator Saturnino Benito. Hence, if Saturnino's consent to the sale of the one-third portion to peti tioner cannot bind the intestate estate of MarioBenito on the ground that the right of redemption was not within the powers of administration, in the same manner, private respondent as co-administrator has no power exercise the right of redemption — the very power which the Court of Appeals ruled to be not within the powers of administration.

While under Sec. 3, Rule 85, Rules of Court, the administrator has the right to the possession of the real and personal estate of thedeceased, so far as needed for the payment of the expenses of administration, and the administrator may bring and defend action

for the recovery or protection of the property or right of the deceased (Sec. 2, Rule 88), such right of possession and administrationdo not include the right of legal redemption of the undivided share sold to a stranger by one of the co-owners after the death of another, because in such case, the right of legal redemption only came into existence when the sale to the stranger was perfectedand formed no part of the estate of the deceased co-owner; hence, that right cannot be transmitted to the heir of the deceased co-owner. (Butte vs. Manuel Uy and Sons, Inc., 4 SCRA 526).

Private respondent cannot be considered to have brought this action in her behalf and in behalf of the heirs of Mario Benito because the jurisdictionalallegations of the complaint specifically stated that she brought the action in her capacity as administratrix of the intestate estate of Mario Benito.It is petitioner's contention that, assuming that private respondent may exercise the right of redemption, there was no compliance with the conditionsprecedent for the valid exercise thereof.In Conejero et al. vs. Court of Appeals, et al., 16 SCRA 775, this Court explained the nature of the right of redemption in this wise:

While the co-owner's right of legal redemption is a substantive right, it is exceptional in nature, limited in its duration and subject tostrict compliance with the legal requirements. One of these is that the redemptioner should tender payment of the redemptionmoney within thirty (30) days from written notice of the sale by the co-owner.

It has been held that this thirty-day period is peremptory because the policy of the law is not to leave the purchaser's title in uncertainty beyond theestablished 30-day period. (Butte vs. Manuel Uy and Sons, Inc., 4 SCRA 526). It is not a prescriptive period but is more a requisite or conditionprecedent to the exercise of the r ight of legal redemption.

In the case at bar, private respondent alleged in her complaint that she learned of the sale sometime in May, 1966 upon receipt of a pleading in SpecialProceeding No. 508 of the Court of First Instance of Sorsogon. She likewise alleged that she gave a letter informing petitioner of her desire to redeemthe land on August 25, 1966. Clearly, three months have elapsed since the notice of the sale. Hence, petitioner claims that the thirty-day period of redemption has already expired. In addition, petitioner makes capital of the admission of private respondent that she already knew of the saidtransaction even before receipt of the said pleading (t.s.n., p. 16) as well as of the evidence presented that Saturnino Benito, the admittedly activeadministrator until 1966, duly received a written notice of the intended sale of Benjamin Benito's share. Said evidence consists of the affidavit of thevendor stating that the required notice had been duly given to possible redemptioners, the statement in the deed of sale itself and the deposition of Saturnino Benito's widow with respect to her receipt of the written notice. Finally, petitioner points to the records which disclose that private respondentknew of the subdivision (t.s.n., p. 25) and hence, rationalized that private respondent should have known also of the previous sale.Since We have ruled that the right of legal redemption does not exist nor apply in this case because admittedly a subdivision title (T.C.T. No. T-4978)has already been issued in the name of the petitioner on Lot I-C sold to her, it becomes moot and academic, if not unnecessary to decide whetherprivate respondent complied with the notice requirements for the exercise of the right of legal redemption under Article 1623 of the New Civil Code.WHEREFORE, IN VIEW OF THE FOREGOING, the decision of the Court of Appeals is hereby REVERSED and SET ASIDE, and judgment is herebyrendered DISMISSING the complaint.SO ORDERED.G.R. No. 78178 April 15, 1988

DELIA BAILON-CASILAO, LUZ PAULINO-ANG, EMMA PAULINO-YBANEZ, NILDA PAULINO-TOLENTINO, and SABINABAILON, petitioners,vs.THE HONORABLE COURT OF APPEALS and CELESTINO AFABLE, respondents.Veronico E. Rubio for petitioners.Mario G. Fortes for private-respondent.

CORTES, J.: The fate of petitioners' claim over a parcel of land rests ultimately on a determination of whether or not said petitioners are chargeable with such lachesas may effectively bar their present action.The petitioners herein filed a case for recovery of property and damages with notice of lis pendens on March 13, 1981 against the defendant and hereinprivate respondent, Celestino Afable. The parcel of land involved in this case, with an area of 48,849 square meters, is covered by Original Certificate ofTitle No. 1771 issued on June 12, 1931, in the names of Rosalia, Gaudencio, Sabina Bernabe, Nenita and Delia, all surnamed Bailon, as co-owners, eachwith a 1/6 share. Gaudencio and Nenita are now dead, the latter being represented in this case by her children. Luz, Emma and Nilda. Bernabe went toChina in 1931 and had not been heard from since then [Decision of the Court of Appeals, Rollo, p. 39].



It appears that on August 23, 1948, Rosalia Bailon and Gaudencio Bailon sold a portion of the said land consisting of 16,283 square meters to DonatoDelgado. On May 13, 1949, Rosalia Bailon alone sold the remainder of the land consisting of 32,566 square meters to Ponciana V. Aresgado de Lanuza.On the same date, Lanuza acquired from Delgado the 16,283 square meters of land which the latter had earlier acquired from Rosalia and Gaudencio.On December 3, 1975, John Lanuza, acting under a special power of attorney given by his wife, Ponciana V. Aresgado de Lanuza, sold the two parcelsof land to Celestino Afable, Sr.In all these transfers, it was stated in the deeds of sale that the land was not registered under the provisions of Act No. 496 when the fact is that it is. Itappears that said land had been successively declared for taxation first, in the name of Ciriaca Dellamas, mother of the registered co-owners, then inthe name of Rosalia Bailon in 1924, then in that of Donato Delgado in 1936, then in Ponciana de Lanuza's name in 1962 and finally in the name of Celestino Afable, Sr. in 1983.In his answer to the complaint filed by the herein petitioners, Afable claimed that he had acquired the land in question through prescription andcontended that the petitioners were guilty of laches.He later filed a third-party complaint against Rosalia Bailon for damages allegedly suffered as aresult of the sale to him of the land.

After trial, the lower court rendered a decision:1. Finding and declaring Celestino Afable, a co-owner of the land described in paragraph III of the complaint having validly boughtthe two-sixth (2/6) respective undivided shares of Rosalia Bailon and Gaudencio Bailon;2. Finding and declaring the following as pro-indiviso co-owners, having 1/6 share each, of the property described in paragraph IIIof the complaint, to wit:a. Sabina Bailonb. Bernabe Bailonc. Heirs of Nenita Bailon-Paulinod. Delia Bailon-Casilao;3. Ordering the segregation of the undivided interests in the property in order to terminate co-ownership to be conducted by anyGeodetic Engineer selected by the parties to delineate the specific part of each of the co-owners.4. Ordering the defendant to restore the possession of the plaintiffs respective shares as well as all attributes of absolute dominion;5. Ordering the defendant to pay the following:a. P5,000.00 as damages;b. P2,000.00 as attorney's fees and;

c. to pay the costs.[Decision of the Trial Court, Rollo, p. 37-38].On appeal, the respondent Court of Appeals affirmed the decision of the lower court insofar as it held that prescription does not he against plaintiffs-appellees because they are co-owners of the original vendors. However, the appellate court declared that, although registered property cannot be lostby prescription, nevertheless, an action to recover it may be barred by laches, c iting the ruling in Mejia de Lucaz v. Gamponia [100 Phil. 277 (1956)].

Accordingly, it held the petitioners guilty of laches and dismissed their complaint. Hence, this petition for review on certiorari of the decision of the Courof Appeals.The principal issue to be resolved in this case concerns the applicability of the equitable doctrine of laches. Initially though, a determination of the effecof a sale by one or more co-owners of the entire property held in common without the consent of all the co-owners and of the appropriate remedy of the aggrieved co-owners is required.The rights of a co-owner of a certain property are clearly specified in Article 493 of the Civil Code.Thus:

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

As early as 1923, this Court has ruled that even if a co-owner sells the whole property as his, the sale will affect only his own share but not those of the

other co-owners who did not consent to the sale [Punsalan v. Boon Liat 44 Phil. 320 (1923)]. This is because under the aforementioned codal provision,the sale or other disposition affects only his undivided share and the transferee gets only what would correspond to his grantor in the partition of thething owned in common.[Ramirez v. Bautista, 14 Phil. 528 (1909)]. Consequently, by virtue of the sales made by Rosalia and Gaudencio Bailon whichare valid with respect to their proportionate shares, and the subsequent transfers which culminated in the sale to private respondent Celestino Afable,the said Afable thereby became a co-owner of the disputed parcel of land as correctly held by the lower court since the sales produced the effect of substituting the buyers in the enjoyment thereof [Mainit v. Bandoy, 14 Phil. 730 (1910)].From the foregoing, it may be deduced that since a co-owner is entitled to sell his undivided share, a sale of the entire property by one co-ownerwithout 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 thebuyer a co-owner of the property.The proper action in cases like this is not for the nullification of the sale or for the recovery of possession of the thing owned in common from the third person who substituted the co-owner or co-owners who alienated their shares, but the DIVISION of the common property as if it continued to remain inthe possession of the co-owners who possessed and administered it [Mainit v. Bandoy, supra .]Thus, it is now settled that the appropriate recourse of co-owners in cases where their consent were not secured in a sale of the entire property as wellas in a sale merely of the undivided shares of some of the co-owners is an action. for PARTITION under Rule 69 of the Revised Rules of Court. Neitherrecovery of possession nor restitution can be granted since the defendant buyers are legitimate proprietors and possessors in joint ownership of thecommon property claimed [Ramirez v. Bautista, supra ].

As to the action for petition, neither prescription nor laches can be invoked.In the light of the attendant circumstances, defendant-appellee's defense of prescription is a vain proposition. Pursuant to Article 494 of the Civil Code,'(n)o co-owner shall be obliged to remain in the co-ownership. Such co-owner may demand at anytime the partition of the thing owned in common ,insofar as his share is concerned.' [Emphasis supplied.] In Budiong v. Bondoc [G.R. No. L-27702, September 9, 1977, 79 SCRA 241, this Court hasinterpreted said provision of law to mean that the action for partition is imprescriptible or cannot be barred by prescription. For Article 494 of the CivilCode explicitly declares: "No prescription shall lie in favor of a co-owner or co- heir so long as he expressly or impliedly recognizes the co-ownership."Furthermore, the disputed parcel of land being registered under the Torrens System, the express provision of Act No. 496 that '(n)o title to registeredland in derogation to that of the registered owner shall be acquired by prescription or adverse possession' is squarely applicable. Consequently,prescription will not lie in favor of Afable as against the petitioners who remain the registered owners of the disputed parcel of land.It is argued however, that as to the petitioners Emma, Luz and Nelda who are not the registered co-owners but merely represented their deceasedmother, the late Nenita Bailon, prescription lies.Respondents bolster their argument by citing a decision of this Court in Pasion v. Pasion [G.R.No. L-15757, May 31, 1961, 2 SCRA 486, 489] holding that "the imprescriptibility of a Torrens title can only be invoked by the person in whose name the title is registered" and that 'one who is not the registered owner of a parcel of land cannot invoke imprescriptibility of action to claim the same.' Reliance on the aforesaid Pasion case is futile. The ruling therein applies only against transferees other than direct issues or heirs or to completestrangers. The rational is clear:



If prescription is unavailing against the registered owner, it must be equally unavailing against the latter's hereditary successors,because they merely step into the shoes of the decedent by operation of law (New Civil Code, Article 777; Old Civil Code, Article657), the title or right undergoing no change by its transmission mortis causa [Atus, et al., v. Nunez, et al., 97 Phil. 762, 764].

The latest pronouncement of this Court in Umbay v. Alecha [G. R. No. 67284, March 18, 1985, 135 SCRA 427, 429], which was promulgated subsequento the Pasion case reiterated the Atus doctrine. Thus:

Prescription is unavailing not only against the registered owner but also against his hereditary successors, because they merely stepinto the shoes of the decedent by operation of law and are merely the continuation of the personality of their predecessor-in-interest. [Barcelona v. Barcelona, 100 Phil. 251, 257].

Laches is likewise unavailing as a shield against the action of herein petitioners.Well-stated in this jurisdiction are the four basic elements of laches, namely: (1) conduct on the part of the defendant or of one under whom he claims,giving rise to the situation of which complaint is made and for which the complainant seeks a remedy; (2) delay in asserting the corporationscomplainant's rights, the complainant having had knowledge or notice of the defendant's conduct and having been afforded an opportunity to institutesuit; (3) lack of knowledge or notice on the part of the defendant that the complainant would assert the right on which he bases his suit; and, (4) injuryor prejudice to the defendant in the event relief is accorded to the complainant, or the suit is not held to be barred [Go China Gun, et al. v. Co Cho etal., 96 Phil. 622 (1955)].While the first and last elements are present in this case, the second and third elements are missing.The second element speaks of delay in asserting the complainant's rights. However, the mere fact of delay is insufficient to constitute, laches. It isrequired that (1) complainant must have had knowledge of the conduct of defendant or of one under whom he claims and (2) he must have beenafforded an opportunity to institute suit . This court has pointed out that laches is not concerned with the mere lapse of time. Thus:

Laches has been defined as the failure or neglect, for an unreasonable length of time to do that which by exercising due diligencecould or should have been done earlier; it is negligence or omission to assert a right within a reasonable time warranting apresumption that the party entitled to assert it either has abandoned it or declined to assert it. Tijam, et al., v. Sibonghanoy , G.R.No. L-21450, April 25, 1968, 23 SCRA 29,35; Tendo v. Zamacoma, G.R. No. L-63048, August 7, 1985, 138 SCRA 78, 90].The doctrine of "laches" or of "stale demands" is based upon grounds of public policy which requires for the peace of society, thediscouragement of stale claims and unlike the statute of limitations, is not a mere question of time but is principally a question of inequity or unfairness of permitting a right or claim to be enforced or asserted," [Tijam v. Sibonghanoy, supra , p. 35]. [Emphasissupplied.]

It must be noted that while there was delay in asserting petitioners' rights, such delay was not attended with any knowledge of the sale nor with anyopportunity to bring suit. In the first place, petitioners had no notice of the sale made by their eldest sister. It is undisputed that the petitioner co-owners had entrusted the care and management of the parcel of land to Rosalia Bailon who was the oldest among them [TSN, July 27, 1983, p. 14]. Infact, Nicanor Lee, a son of Rosalia, who was presented as a witness by the plaintiffs-petitioners, testified on cross-examination that his mother was onlythe administrator of the land as she is the eldest and her brothers and sisters were away [TSN, October 5, 1983, p. 15]. Indeed, when Delia Bailon-Casilao left Sorsogon in 1942 after she got married, it was only in 1983 that she returned. Sabina on the other hand, is said to be living in Zamboangawhile Bernabe who left for China in 1931 has not been heard from since then. Consequently, when Rosalia, from whom the private respondent derivedhis title, made the disputed sales covering the entire property, the herein petitioners were unaware thereof.In the second place, they were not afforded an opportunity to bring suit inasmuch as until 1981, they were kept in the dark about the transactionsentered into by their sister. It was only when Delia Bailon-Casilao returned to Sorsogon in 1981 that she found out about the sales and immediately, sheand her co-petitioners filed the present action for recovery of property. The appellate court thus erred in holding that 'the petitioners did nothing toshow interest in the land." For the administration of the parcel of land was entrusted to the oldest co-owner who was then in possession thereof precisely because the other co-owners cannot attend to such a task as they reside outside of Sorsogon where the land is situated. Her co-owners alsoallowed her to appropriate the entire produce for herself because it was not even enough for her daily consumption [TSN, October 5, 1983, pp. 17-18].

And since petitioner was the one receiving the produce, it is but natural that she was the one to take charge of paying the real estate taxes. Now, if knowledge of the sale by Rosalia was conveyed to the petitioners only later, they cannot be faulted for the acts of their co-owner who failed to live up

to the trust and confidence expected of her. In view of the lack of knowledge by the petitioners of the conduct of Rosalia in selling the land withouttheir consent in 1975 and the absence of any opportunity to institute the proper action until 1981, laches may not be asserted against the petitioners.The third element of laches is likewise absent. There was no lack of knowledge or notice on the part of the defendant that the complainants wouldassert the right on which they base the suit. On the contrary, private respondent is guilty of bad faith in purchasing the property as he knew that theproperty was co-owned by six persons and yet, there were only two signatories to the deeds of sale and no special authorization to self was granted tothe two sellers by the other co-owners.Even as the land here was misrepresented in the deeds of sale as "unregistered," the truth was that Afable already had notice that the land was titled inthe name of six persons by virtue of the Certificate of Title which was already in his possession even before the sale. Such fact is apparent from histestimony before the court a quo :

COURT:Q: From whom did you get the certificate of Title?

A: When it was mortgaged by Ponciana Aresgado.Q: It was mortgaged to you before you bought it?

A: Yes, Your Honor. (TSN, March 5, 1984, p. 12) When cross-examined, he stated:Q: Mr. Witness, the original Certificate of Title was given to you in the year 1974, was it not?

A: 1975.

Q: In 1975, you already discovered that the title was in the name of several persons, is it not? A: Yes, sir.Q: When you discovered that it is in the name of several persons, you filed a case in court for authority tocancel the title to be transferred in your name, is it not?

A: Yes, sir.Q: And that was denied by the Court of First Instance of Sorsogon because there was ordinary one signatory tothe deed of sale instead of six, was it not?

A: Not one but two signatories.[Decision of the Regional Trial Court of Sorsogon, Rollo, p. 35]

Such actual knowledge of the existence of other co-owners in whose names the lot subject of the sale was registered should have prompted a searchinginquiry by Afable considering the well- known rule in this jurisdiction that:

... a person dealing with a registered land has a right to rely upon the face of the Torrens certificate of title and to dispense withthe need of inquiring further, except when the party concerned has actual knowledge of facts and circumstances that would impel areasonably cautions man to make such inquiry. [Gonzales v. IAC and Rural Bank of Pavia, Inc., G.R. No. 69622, January 29, 1988).



Moreover, the undisputed fact is that petitioners are relatives of his wife. As a genuine gesture of good faith, he should have contacted the petitionerswho were still listed as co-owners in the certificate of title which was already in his possession even before the sale. In failing to exercise even aminimum degree of ordinary prudence required by the situation, he is deemed to have bought the lot at his own risk. Hence any prejudice or injury thatmay be occasioned to him by such sale must be borne by him.Indeed, aware of the flaws impairing his title, Afable went to the herein petitioner Delia Bailon-Casilao, asking the latter to sign a document obviously tocure the flaw [TSN, July 27, 1983, p.6]. Later, he even filed a petition in the Court of First Instance to register the title in his name which was denied asaforesaid.It may be gleaned from the foregoing examination of the facts that Celestino Afable is not a buyer in good faith. Laches being an equitable defense, hewho invokes it must come to the court with clean hands.WHEREFORE, the petition for certiorari is hereby GRANTED, the challenged decision of the Court of Appeals is SET ASIDE, and the decision of the trialcourt is REINSTATED.SO ORDERED.G.R. No. L-66935 November 11, 1985ISABELA ROQUE, doing busines under the name and style of Isabela Roque Timber Enterprises and ONG CHIONG, petitioners,vs.HON. INTERMEDIATE APPELATE COURT and PIONEER INSURANCE AND SURETY CORPORATION,respondent.

GUTIERREZ, JR., J.: This petition for certiorari asks for the review of the decision of the Intermediate Appellate Court which absolved the respondent insurance companyfrom liability on the grounds that the vessel carrying the insured cargo was unseaworthy and the loss of said cargo was caused not by the perils of thesea but by the perils of the ship.On February 19, 1972, the Manila Bay Lighterage Corporation (Manila Bay), a common carrier, entered into a contract with the petitioners whereby theformer would load and carry on board its barge Mable 10 about 422.18 cubic meters of logs from Malampaya Sound, Palawan to North Harbor, Manila.The petitioners insured the logs against loss for P100,000.00 with respondent Pioneer Insurance and Surety Corporation (Pioneer).On February 29, 1972, the petitioners loaded on the barge, 811 pieces of logs at Malampaya Sound, Palawan for carriage and delivery to North Harbor,Port of Manila, but the shipment never reached its destination because Mable 10 sank with the 811 pieces of logs somewhere off Cabuli Point inPalawan on its way to Manila. As alleged by the petitioners in their complaint and as found by both the trial and appellate courts, the barge where the

logs were loaded was not seaworthy such that it developed a leak. The appellate court further found that one of the hatches was left open causingwater to enter the barge and because the barge was not provided with the necessary cover or tarpaulin, the ordinary splash of sea waves brought morewater inside the barge.On March 8, 1972, the petitioners wrote a letter to Manila Bay demanding payment of P150,000.00 for the loss of the shipment plus P100,000.00 asunrealized profits but the latter ignored the demand. Another letter was sent to respondent Pioneer claiming the full amount of P100,000.00 under theinsurance policy but respondent refused to pay on the ground that its hability depended upon the "Total loss by Total Loss of Vessel only". Hence,petitioners commenced Civil Case No. 86599 against Manila Bay and respondent Pioneer.

After hearing, the trial court found in favor of the petitioners. The dispositive portion of the decision reads:FOR ALL THE FOREGOING, the Court hereby rendered judgment as follows:(a) Condemning defendants Manila Bay Lighterage Corporation and Pioneer Insurance and Surety Corporation to pay plaintiffs,

jointly and severally, the sum of P100,000.00;(b) Sentencing defendant Manila Bay Lighterage Corporation to pay plaintiff, in addition, the sum of P50,000.00, plus P12,500.00,that the latter advanced to the former as down payment for transporting the logs in question;(c) Ordering the counterclaim of defendant Insurance against plaintiffs, dismissed, for lack of merit, but as to its cross-claim againstits co-defendant Manila Bay Lighterage Corporation, the latter is ordered to reimburse the former for whatever amount it may paythe plaintiffs as such surety;

(d) Ordering the counterclaim of defendant Lighterage against plaintiffs, dismissed for lack of merit;(e) Plaintiffs' claim of not less than P100,000.00 and P75,000.00 as exemplary damages are ordered dismissed, for lack of merits;plaintiffs' claim for attorney's fees in the sum of P10,000.00 is hereby granted, against both defendants, who are, moreover orderedto pay the costs; and(f) The sum of P150,000.00 award to plaintiffs, shall bear interest of six per cent (6%) from March 25, 1975, until amount is fullypaid.Respondent Pioneer appealed to the Intermediate Appellate Court. Manila Bay did not appeal. According to the petitioners, the transportation companyis no longer doing business and is without funds.During the initial stages of the hearing, Manila Bay informed the trial court that it had salvaged part of the logs. The court ordered them to be sold tothe highest bidder with the funds to be deposited in a bank in the name of Civil Case No. 86599.On January 30, 1984, the appellate court modified the trial court's decision and absolved Pioneer from liability after finding that there was a breach of implied warranty of seaworthiness on the part of the petitioners and that the loss of the insured cargo was caused by the "perils of the ship" and not bythe "perils of the sea". It ruled that the loss is not covered by the marine insurance policy.

After the appellate court denied their motion for reconsideration, the petitioners filed this petition with the following assignments of errors:I

THE INTERMEDIATE APPELLATE COURT ERRED IN HOLDING THAT IN CASES OF MARINE CARGO INSURANCE, THERE IS A

WARRANTY OF SEAWORTHINESS BY THE CARGO OWNER. IITHE INTERMEDIATE APPELLATE COURT ERRED IN HOLDING THAT THE LOSS OF THE CARGO IN THIS CASE WAS CAUSED BY "PERILS OF THE SHIP" AND NOT BY "PERILS OF THE SEA."

IIITHE INTERMEDIATE APPELLATE COURT ERRED IN NOT ORDERING THE RETURN TO PETITIONER OF THE AMOUNT OF P8,000.00WHICH WAS DEPOSITED IN THE TRIAL COURT AS SALVAGE VALUE OF THE LOGS THAT WERE RECOVERED.In their first assignment of error, the petitioners contend that the implied warranty of seaworthiness provided for in the Insurance Code refers only tothe responsibility of the shipowner who must see to it that his ship is reasonably fit to make in safety the contemplated voyage.The petitioners state that a mere shipper of cargo, having no control over the ship, has nothing to do with its seaworthiness. They argue that a cargoowner has no control over the structure of the ship, its cables, anchors, fuel and provisions, the manner of loading his cargo and the cargo of othershippers, and the hiring of a sufficient number of competent officers and seamen. The petitioners' arguments have no merit.There is no dispute over the liability of the common carrier Manila Bay. In fact, it did not bother to appeal the questioned decision. However, thepetitioners state that Manila Bay has ceased operating as a firm and nothing may be recovered from it. They are, therefore, trying to recover theirlosses from the insurer.



The liability of the insurance company is governed by law. Section 113 of the Insurance Code provides:In every marine insurance upon a ship or freight, or freightage, or upon any thing which is the subject of marine insurance, awarranty is implied that the ship is seaworthy.

Section 99 of the same Code also provides in part.Marine insurance includes:

(1) Insurance against loss of or damage to:(a) Vessels, craft, aircraft, vehicles, goods, freights, cargoes, merchandise, ...

From the above-quoted provisions, there can be no mistaking the fact that the term "cargo" can be the subject of marine insurance and that once it isso made, the implied warranty of seaworthiness immediately attaches to whoever is insuring the cargo whether he be the shipowner or not.

As we have ruled in the case of Go Tiaoco y Hermanos v. Union Insurance Society of Canton (40 Phil. 40):The same conclusion must be reached if the question be discussed with reference to the seaworthiness of the ship. It is universallyaccepted that in every contract of insurance upon anything which is the subject of marine insurance, a warranty is implied that theship shall be seaworthy at the time of the inception of the voyage. This rule is accepted in our own Insurance Law (Act No. 2427,sec. 106). ...

Moreover, the fact that the unseaworthiness of the ship was unknown to the insured is immaterial in ordinary marine insurance and may not be used byhim as a defense in order to recover on the marine insurance policy.

As was held in Richelieu and Ontario Nav. Co. v. Boston Marine, Inc., Co. (136 U.S. 406):There was no look-out, and both that and the rate of speed were contrary to the Canadian Statute. The exception of lossesoccasioned by unseaworthiness was in effect a warranty that a loss should not be so occasioned, and whether the fact of unseaworthiness were known or unknown would be immaterial.

Since the law provides for an implied warranty of seaworthiness in every contract of ordinary marine insurance, it becomes the obligation of a cargoowner to look for a reliable common carrier which keeps its vessels in seaworthy condition. The shipper of cargo may have no control over the vesselbut he has full control in the choice of the common carrier that will transport his goods. Or the cargo owner may enter into a contract of insurancewhich specifically provides that the insurer answers not only for the perils of the sea but also provides for coverage of perils of the ship.We are constrained to apply Section 113 of the Insurance Code to the facts of this case. As stated by the private respondents:

In marine cases, the risks insured against are "perils of the sea" (Chute v. North River Ins. Co., Minn —214 NW 472, 55 ALR 933).The purpose of such insurance is protection against contingencies and against possible damages and such a policy does not cover a

loss or injury which must inevitably take place in the ordinary course of things. There is no doubt that the term 'perils of the sea'extends only to losses caused by sea damage, or by the violence of the elements, and does not embrace all losses happening atsea. They insure against losses from extraordinary occurrences only, such as stress of weather, winds and waves, lightning,tempests, rocks and the like. These are understood to be the "perils of the sea" referred in the policy, and not those ordinary perilswhich every vessel must encounter. "Perils of the sea" has been said to include only such losses as are of extraordinary nature,or arise from some overwhelming power , which cannot be guarded against by the ordinary exertion of human skill and prudence.Damage done to a vessel by perils of the sea includes every species of damages done to a vessel at sea, as distinguished from theordinary wear and tear of the voyage, and distinct from injuries suffered by the vessel in consequence of her not being seaworthyat the outset of her voyage (as in this case). It is also the general rule that everything which happens thru the inherent vice of thething, or by the act of the owners, master or shipper, shall not be reputed a peril, if not otherwise borne in the policy. (14 RCL onInsurance, Sec. 384, pp. 1203- 1204; Cia. de Navegacion v. Firemen's Fund Ins. Co., 277 US 66, 72 L. ed. 787, 48 S. Ct. 459).

With regard to the second assignment of error, petitioners maintain, that the loss of the cargo was caused by the perils of the sea, not by the perils of the ship because as found by the trial court, the barge was turned loose from the tugboat east of Cabuli Point "where it was buffeted by storm andwaves." Moreover, petitioners also maintain that barratry, against which the cargo was also insured, existed when the personnel of the tugboat and thebarge committed a mistake by turning loose the barge from the tugboat east of Cabuli Point. The trial court also found that the stranding andfoundering of Mable 10 was due to improper loading of the logs as well as to a leak in the barge which constituted negligence.

On the contention of the petitioners that the trial court found that the loss was occasioned by the perils of the sea characterized by the "storm andwaves" which buffeted the vessel, the records show that the court ruled otherwise. It stated:xxx xxx xxx... The other affirmative defense of defendant Lighterage, 'That the supposed loss of the logs was occasioned by force majeure..."was not supported by the evidence. At the time Mable 10 sank, there was no typhoon but ordinary strong wind and waves, acondition which is natural and normal in the open sea. The evidence shows that the sinking of Mable 10 was due to improperloading of the logs on one side so that the barge was tilting on one side and for that it did not navigate on even keel; that it was nolonger seaworthy that was why it developed leak; that the personnel of the tugboat and the barge committed a mistake when itturned loose the barge from the tugboat east of Cabuli point where it was buffeted by storm and waves, while the tugboatproceeded to west of Cabuli point where it was protected by the mountain side from the storm and waves coming from the eastdirection. ..."

In fact, in the petitioners' complaint, it is alleged that "the barge Mable 10 of defendant carrier developed a leak which allowed water to come in andthat one of the hatches of said barge was negligently left open by the person in charge thereof causing more water to come in and that "the loss of saidplaintiffs' cargo was due to the fault, negligence, and/or lack of skill of defendant carrier and/or defendant carrier's representatives on barge Mable 10."It is quite unmistakable that the loss of the cargo was due to the perils of the ship rather than the perils of the sea. The facts clearly negate thepetitioners' claim under the insurance policy. In the case of Go Tiaoco y Hermanos v. Union Ins. Society of Canton, supra , we had occasion to elaborate

on the term "perils of the ship." We ruled:It must be considered to be settled, furthermore, that a loss which, in the ordinary course of events, results from the natural andinevitable action of the sea, from the ordinary wear and tear of the ship, or from the negligent failure of the ship's owner to providethe vessel with proper equipment to convey the cargo under ordinary conditions, is not a peril of the sea. Such a loss is rather dueto what has been aptly called the "peril of the ship." The insurer undertakes to insure against perils of the sea and similar perils, notagainst perils of the ship. As was well said by Lord Herschell in Wilson, Sons & Co. v. Owners of Cargo per the Xantho ([1887], 12

A. C., 503, 509), there must, in order to make the insurer liable, be some casualty, something which could not be foreseen as oneof the necessary incidents of the adventure. The purpose of the policy is to secure an indemnity against accidents which mayhappen, not against events which must happen.In the present case the entrance of the sea water into the ship's hold through the defective pipe already described was not due toany accident which happened during the voyage, but to the failure of the ship's owner properly to repair a defect of the existence owhich he was apprised. The loss was therefore more analogous to that which directly results from simple unseaworthiness than tothat which result from the perils of the sea.xxx xxx xxx



Suffice it to say that upon the authority of those cases there is no room to doubt the liability of the shipowner for such a loss asoccurred in this case. By parity of reasoning the insurer is not liable; for generally speaking, the shipowner excepts the perils of thesea from his engagement under the bill of lading, while this is the very perils against which the insurer intends to give protection.

As applied to the present case it results that the owners of the damaged rice must look to the shipowner for redress and not to theinsurer.Neither can petitioners allege barratry on the basis of the findings showing negligence on the part of the vessel's crew.Barratry as defined in American Insurance Law is "any willful misconduct on the part of master or crew in pursuance of some unlawful or fraudulentpurpose without the consent of the owners, and to the prejudice of the owner's interest." (Sec. 171, U.S. Insurance Law, quoted in Vance, Handbook onLaw of Insurance, 1951, p. 929.)Barratry necessarily requires a willful and intentional act in its commission. No honest error of judgment or mere negligence, unless criminally gross, canbe barratry. (See Vance on Law of Insurance, p. 929 and cases cited therein.)In the case at bar, there is no finding that the loss was occasioned by the willful or fraudulent acts of the vessel's crew. There was only simplenegligence or lack of skill. Hence, the second assignment of error must likewise be dismissed.

Anent the third assignment of error, we agree with the petitioners that the amount of P8,000.00 representing the amount of the salvaged logs shouldhave been awarded to them. However, this should be deducted from the amounts which have been adjudicated against Manila Bay LighterageCorporation by the trial court.WHEREFORE, the decision appealed from is AFFIRMED with the modification that the amount of P8,000.00 representing the value of the salvaged logswhich was ordered to be deposited in the Manila Banking Corporation in the name of Civil Case No. 86599 is hereby awarded and ordered paid to thepetitioners. The liability adjudged against Manila Bay Lighterage Corporation in the decision of the trial court is accordingly reduced by the sameamount.SO ORDERED.G.R. No. L-46296 September 24, 1991EPITACIO DELIMA, PACLANO DELIMA, FIDEL DELIMA, VIRGILIO DELIMA, GALILEO DELIMA, JR., BIBIANO BACUS, OLIMPIO BACUSand PURIFICACION BACUS, petitioners,vs.HON. COURT OF APPEALS, GALILEO DELIMA (deceased), substituted by his legal heirs, namely: FLAVIANA VDA. DE DELIMA, LILY D. ARIAS, HELEN NIADAS, ANTONIO DELIMA, DIONISIO DELIMA, IRENEA DELIMA, ESTER DELIMA AND FELY DELIMA, respondents.

Gabriel J. Canete for petitioners.Emilio Lumontad, Jr. for private respondents.

MEDIALDEA, J.:p This is a petition for review on certiorari of the decision of the Court of Appeals reversing the trial court's judgment which declared as null and void thecertificate of title in the name of respondents' predecessor and which ordered the partition of the disputed lot among the parties as co-owners.The antecedent facts of the case as found both by the respondent appellate court and by the trial court are as follows:During his lifetime, Lino Delima acquired Lot No. 7758 of the Talisay-Minglanilla Friar Lands Estate in Cebu by sale on installments from the governmentLino Delima later died in 1921 leaving as his only heirs three brothers and a sister namely: Eulalio Delima, Juanita Delima, Galileo Delima and VicenteDelima. After his death, TCT No. 2744 of the property in question was issued on August 3, 1953 in the name of the Legal Heirs of Lino Delima,deceased, represented by Galileo Delima.On September 22, 1953, Galileo Delima, now substituted by respondents, executed an affidavit of "Extra-judicial Declaration of Heirs." Based on thisaffidavit, TCT No. 2744 was cancelled and TCT No. 3009 was issued on February 4,1954 in the name of Galileo Delima alone to the exclusion of theother heirs.Galileo Delima declared the lot in his name for taxation purposes and paid the taxes thereon from 1954 to 1965.On February 29, 1968, petitioners, who are the surviving heirs of Eulalio and Juanita Delima, filed with the Court of First Instance of Cebu (now

Regional Trial Court) an action for reconveyance and/or partition of property and for the annulment of TCT No. 3009 with damages against their unclesGalileo Delima and Vicente Delima,. Vicente Delima was joined as party defendant by the petitioners for his refusal to join the latter in their action.On January 16, 1970, the trial court rendered a decision in favor of petitioners, the dispositive portion of which states:IN VIEW OF THE FOREGOING CONSIDERATIONS, the following are the declared owners of Lot No. 7758 of the Talisay-MinglanillaFriar Lands Estate presently covered by transfer Certificate of Title No. 3009, each sharing a pro-indiviso share of one-fourth;1) Vicente Delima (one-fourth)2) Heirs of Juanita Delima, namely: Bibiano Bacus, Olimpio Bacus and Purificacion Bacus (on-fourth);3) Heirs of Eulalio Delima, namely Epitacio, Pagano, Fidel, Virgilio and Galileo Jr., all surnamed Delima (one-fourth); and4) The Heirs of Galileo Delima, namely Flaviana Vda. de Delima, Lily D. Arias, Helen Niadas and Dionisio, Antonio, Eotu Irenea, andFely, all surnamed Delima (one-fourth).Transfer Certificate of Title No. 3009 is declared null and void and the Register of Deeds of Cebu is ordered to cancel the same andissue in lieu thereof another title with the above heirs as pro-indiviso owners.

After the payment of taxes paid by Galileo Delima since 1958, the heirs of Galileo Delima are ordered to turn a over to the otherheirs their respective shares of the fruits of the lot in question computed at P170.00 per year up to the present time with legal(interest).Within sixty (60) days from receipt of this decision the parties are ordered to petition the lot in question and the defendants are

directed to immediately turn over possession of the shares here awarded to the respective heirs.Defendants are condemned to pay the costs of the suit.The counterclaim is dismissed.SO ORDERED. (pp. 54-55, Rollo )Not satisfied with the decision, respondents appealed to the Court of Appeals. On May 19, 1977, respondent appellate court reversed the trial court'sdecision and upheld the claim of Galileo Delima that all the other brothers and sister of Lino Delima, namely Eulalio, Juanita and Vicente, had alreadyrelinquished and waived their rights to the property in his favor, considering that he (Galileo Delima) alone paid the remaining balance of the purchaseprice of the lot and the realty taxes thereon (p. 26, Rollo ).Hence, this petition was filed with the petitioners alleging that the Court of Appeals erred:1) In not holding that the right of a co-heir to demand partition of inheritance is imprescriptible. If it does, the defenses of prescription and laches have already been waived.2) In disregarding the evidence of the petitioners.(p.13, Rollo )The issue to be resolved in the instant case is whether or not petitioners' action for partition is already barred by the statutory period provided by lawwhich shall enable Galileo Delima to perfect his claim of ownership by acquisitive prescription to the exclusion of petitioners from their shares in thedisputed property. Article 494 of the Civil Code expressly provides:



Art. 494. No co-owner shall be obliged to remain in the co-ownership. Each co-owner may demand at any time the partition of thething owned in common, insofar as his share is concerned.Nevertheless, an agreement to keep the thing undivided for a certain period of time, not exceeding ten years, shall be valid. Thisterm may be extended by a new agreement.

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

As a rule, possession by a co-owner will not be presumed to be adverse to the others, but will be held to benefit all. It is understood that the co-owneror co-heir who is in possession of an inheritance pro-indiviso for himself and in representation of his co-owners or co-heirs, if, as such owner, headministers or takes care of the rest thereof with the obligation of delivering it to his co-owners or co-heirs, is under the same situation as a depository,a lessee or a trustee (Bargayo v. Camumot, 40 Phil, 857; Segura v. Segura, No. L-29320, September 19, 1988, 165 SCRA 368). Thus, an action tocompel partition may be filed at any time by any of the co-owners against the actual possessor. In other words, no prescription shall run in favor of aco-owner against his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership (Del Blanco v. Intermediate AppellateCourt, No. 72694, December 1, 1987, 156 SCRA 55).However, from the moment one of the co-owners claims that he is the absolute and exclusive owner of the properties and denies the others any sharetherein, the question involved is no longer one of partition but of ownership (De Castro v. Echarri, 20 Phil. 23; Bargayo v. Camumot, supra ; De losSantos v. Santa Teresa, 44 Phil. 811). In such case, the imprescriptibility of the action for partition can no longer be invoked or applied when one of theco-owners has adversely possessed the property as exclusive owner for a period sufficient to vest ownership by prescription.It is settled that possession by a co-owner or co-heir is that of a trustee. In order that such possession is considered adverse to the cestui que trust amounting to a repudiation of the co-ownership, the following elements must concur: 1) that the trustee has performed unequivocal actsamounting to an ouster of the cestui que trust ; 2) that such positive acts of repudiation had been made known to the cestui que trust; and 3) that theevidence thereon should be clear and conclusive (Valdez v. Olorga, No. L-22571, May 25, 1973, 51 SCRA 71; Pangan v. Court of Appeals, No. L-39299,October 18, 1988, 166 SCRA 375).We have held that when a co-owner of the property in question executed a deed of partition and on the strength thereof obtained the cancellation of the title in the name of their predecessor and the issuance of a new one wherein he appears as the new owner of the property, thereby in effectdenying or repudiating the ownership of the other co-owners over their shares, the statute of limitations started to run for the purposes of the action

instituted by the latter seeking a declaration of the existence of the co-ownership and of their rights thereunder (Castillo v. Court of Appeals, No. L-18046, March 31, 1964, 10 SCRA 549). Since an action for reconveyance of land based on implied or constructive trust prescribes after ten (10) years, iis from the date of the issuance of such title that the effective assertion of adverse title for purposes of the statute of limitations is counted (Jaramil v.Court of Appeals, No. L-31858, August 31, 1977, 78 SCRA 420).Evidence shows that TCT No. 2744 in the name of the legal heirs of Lino Delima, represented by Galileo Delima, was cancelled by virtue of an affidavitexecuted by Galileo Delima and that on February 4, 1954, Galileo Delima obtained the issuance of a new title in Ms name numbered TCT No. 3009 tothe exclusion of his co-heirs. The issuance of this new title constituted an open and clear repudiation of the trust or co-ownership, and the lapse of ten(10) years of adverse possession by Galileo Delima from February 4, 1954 was sufficient to vest title in him by prescription. As the certificate of title wasnotice to the whole world of his exclusive title to the land, such rejection was binding on the other heirs and started as against them the period of prescription. Hence, when petitioners filed their action for reconveyance and/or to compel partition on February 29, 1968, such action was alreadybarred by prescription. Whatever claims the other co-heirs could have validly asserted before can no longer be invoked by them at this time.

ACCORDINGLY, the petition is hereby DENIED and the assailed decision of the Court of Appeals dated May 19, 1977 is AFFIRMED.SO ORDERED.G.R. No. 76351 October 29, 1993 VIRGILIO B. AGUILAR, petitioner,vs.

COURT OF APPEALS and SENEN B. AGUILAR, respondents.Jose F. Manacop for petitioner.Siruello, Muyco & Associates Law Office for private respondent.

BELLOSILLO, J.: This is a petition for review on certiorari seeking to reverse and set aside the Decision of the Court of Appeals in CA-GR CV No. 03933 declaring null andvoid the orders of 23 and 26 April, 1979, the judgment by default of 26 July 1979, and the order of 22 October 1979 of the then Court of First Instanceof Rizal, Pasay City, Branch 30, and directing the trial court to set the case for pre-trial conference.Petitioner Virgilio and respondent Senen are brothers; Virgilio is the youngest of seven (7) children of the late Maximiano Aguilar, while Senen is thefifth. On 28 October 1969, the two brothers purchased a house and lot in Parañaque where their father could spend and enjoy his remaining years in apeaceful neighborhood. Initially, the brothers agreed that Virgilio's share in the co-ownership was two-thirds while that of Senen was one-third. Byvirtue of a written memorandum dated 23 February 1970, Virgilio and Senen agreed that henceforth their interests in the house and lot should be equalwith Senen assuming the remaining mortgage obligation of the original owners with the Social Security System (SSS) in exchange for his possession andenjoyment of the house together with their father.Since Virgilio was then disqualified from obtaining a loan from SSS, the brothers agreed that the deed of sale would be executed and the title registeredin the meantime in the name of Senen. It was further agreed that Senen would take care of their father and his needs since Virgilio and his family were

staying in Cebu. After Maximiano Aguilar died in 1974, petitioner demanded from private respondent that the latter vacate the house and that the property be sold andproceeds thereof divided among them.Because of the refusal of respondent to give in to petitioner's demands, the latter filed on 12 January 1979 an action to compel the sale of the houseand lot so that the they could divide the proceeds between them.In his complaint, petitioner prayed that the proceeds of the sale, be divided on the basis of two-thirds (2/3) in his favor and one-third (1/3) torespondent. Petitioner also prayed for monthly rentals for the use of the house by respondent after their father died.In his answer with counterclaim, respondent alleged that he had no objection to the sale as long as the best selling price could be obtained; that if thesale would be effected, the proceeds thereof should be divided equally; and, that being a co-owner, he was entitled to the use and enjoyment of theproperty.Upon issues being joined, the case was set for pre-trial on 26 April 1979 with the lawyers of both parties notified of the pre-trial, and served with thepre-trial order, with private respondent executing a special power of attorney to his lawyer to appear at the pre-trial and enter into any amicablesettlement in his behalf. 1 On 20 April 1979, Atty. Manuel S. Tonogbanua, counsel for respondent, filed a motion to cancel pre-trial on the ground that he would be accompanyinghis wife to Dumaguete City where she would be a principal sponsor in a wedding.



On 23 April 1979, finding the reasons of counsel to be without merit, the trial court denied the motion and directed that the pre-trial should continue asscheduled.When the case was called for pre-trial as scheduled on 26 April 1979, plaintiff and his counsel appeared. Defendant did not appear; neither his counselin whose favor he executed a special power of attorney to represent him at the pre-trial. Consequently, the trial court, on motion of plaintiff, declareddefendant as in default and ordered reception of plaintiff's evidence ex parte .On 7 May 1979, defendant through counsel filed an omnibus motion to reconsider the order of default and to defer reception of evidence. The trial courdenied the motion and plaintiff presented his evidence.On 26 July 1979, rendering judgment by default against defendant, the trial court found him and plaintiff to be co-owners of the house and lot, in equalshares on the basis of their written agreement. However, it ruled that plaintiff has been deprived of his participation in the property by defendant'scontinued enjoyment of the house and lot, free of rent, despite demands for rentals and continued maneuvers of defendants, to delay partition. Thetrial court also upheld the right of plaintiff as co-owner to demand partition. Since plaintiff could not agree to the amount offered by defendant for theformer's share, the trial court held that this property should be sold to a third person and the proceeds divided equally between the parties.The trial court likewise ordered defendant to vacate the property and pay plaintiff P1,200.00 as rentals 2 from January 1975 up to the date of decisionplus interest from the time the action was filed.On 17 September 1979, defendant filed an omnibus motion for new trial but on 22 October 1979 the trial court denied the motion.Defendant sought relief from the Court of Appeals praying that the following orders and decision of the trial court be set aside: (a) the order of 23 April1970 denying defendants motion for postponement of the pre-trial set on 26 April 1979; (b) the order of 26 April 1979 declaring him in default andauthorizing plaintiff to present his evidenceex-parte ; (e) the default judgment of 26 July 1979; and, (d) the order dated 22 October 1979 denying hisomnibus motion for new trial.On 16 October 1986, the Court of Appeals set aside the order of the trial court of 26 April 1979 as well as the assailed judgment rendered by default.,The appellate court found the explanation of counsel for defendant in his motion to cancel pre-trial as satisfactory and devoid of a manifest intention todelay the disposition of the case. It also ruled that the trial court should have granted the motion for postponement filed by counsel for defendant whoshould not have been declared as in default for the absence of his counsel.Petitioner now comes to us alleging that the Court of Appeals erred (1) in not holding that the motion of defendant through counsel to cancel the pre-trial was dilatory in character and (2) in remanding the case to the trial court for pre-trial and trial.The issues to be resolved are whether the trial court correctly declared respondent as in default for his failure to appear at the pre-trial and in allowingpetitioner to present his evidence ex-parte , and whether the trial court correctly rendered the default judgment against respondent.

We find merit in the petition. As regards the first issue, the law is clear that the appearance of parties at the pre-trial is mandatory.3 A party who fails to appear at a pre-trialconference may be non-suited or considered as in default. 4 In the case at bar, where private respondent and counsel failed to appear at the scheduledpre-trial, the trial, court has authority to declare respondent in default. 5

Although respondent's counsel filed a motion to postpone pre-trial hearing, the grant or denial thereof is within the sound discretion of the trial court,which should take into account two factors in the grant or denial of motions for postponement, namely: (a) the reason for the postponement and (b)the merits of the case of movant. 6 In the instant case, the trial court found the reason stated in the motion of counsel for respondent to cancel the pre-trial to be without merit. Counsel'sexplanation that he had to go to by boat as early as 25 March 1979 to fetch his wife and accompany her to a wedding in Dumaguete City on 27 April1979 where she was one of the principal sponsors, cannot be accepted. We find it insufficient to justify postponement of the pre-trial, and the Court of

Appeals did not act wisely in overruling the denial. We sustain the trial court and rule that it did not abuse its discretion in denying the postponementfor lack of merit. Certainly, to warrant a postponement of a mandatory process as pre-trial would require much more than mere attendance in a socialfunction. It is time indeed we emphasize that there should be much more than mere perfunctory treatment of the pre-trial procedure. Its observancemust be taken seriously if it is to attain its objective, i.e., the speedy and inexpensive disposition of cases.Moreover, the trial court denied the motion for postponement three (3) days before the scheduled pre-trial. If indeed, counsel for respondent could notattend the pre-trial on the scheduled date, respondent at least should have personally appeared in order not to be declared as in default. But, since

nobody appeared for him, the order of the trial court declaring him as in default and directing the presentation of petitioner's evidence ex parte wasproper. 7 With regard to the merits of the judgment of the trial court by default, which respondent appellate court did not touch upon in resolving the appeal, theCourt holds that on the basis of the pleadings of the parties and the evidence presented ex parte , petitioner and respondents are co-owners of subjecthouse and lot in equal shares; either one of them may demand the sale of the house and lot at any time and the other cannot object to such demand;thereafter the proceeds of the sale shall be divided equally according to their respective interests.Private respondent and his family refuse to pay monthly rentals to petitioner from the time their father died in 1975 and to vacate the house so that itcan be sold to third persons. Petitioner alleges that respondent's continued stay in the property hinders its disposal to the prejudice of petitioner. On thepart of petitioner, he claims that he should be paid two-thirds (2/3) of a monthly rental of P2,400.00 or the sum of P1,600.00.In resolving the dispute, the trial court ordered respondent to vacate the property so that it could be sold to third persons and the proceeds dividedbetween them equally, and for respondent to pay petitioner one-half (1/2) of P2,400.00 or the sum of P1,200.00 as monthly rental, conformably withtheir stipulated sharing reflected in their written agreement.We uphold the trial court in ruling in favor of petitioner, except as to the effectivity of the payment of monthly rentals by respondent as co-owner whichwe here declare to commence only after the trial court ordered respondent to vacate in accordance with its order of 26 July 1979.

Article 494 of the Civil Code provides that no co-owner shall be obliged to remain in the co-ownership, and that each co-owner may demand at any timepartition 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 itsproceeds accordingly distributed. This is resorted to (1) when the right to partition the property is invoked by any of the co-owners but because of thenature of the property it cannot be subdivided or its subdivision would prejudice the interests of the co-owners, and (b) the co-owners are not inagreement as to who among them shall be allotted or assigned the entire property upon proper reimbursement of the co-owners. In one case, 8 thisCourt upheld the order of the trial court directing the holding of a public sale of the properties owned in common pursuant to Art. 498 of the Civil Code.However, being a co-owner respondent has the right to use the house and lot without paying any compensation to petitioner, as he may use theproperty owned in common long as it is in accordance with the purpose for which it is intended and in a manner not injurious to the interest of theother co-owners. 9 Each co-owner of property heldpro indiviso exercises his rights over the whole property and may use and enjoy the same with noother limitation than that he shall not injure the interests of his co-owners, the reason being that until a division is made, the respective share of eachcannot be determined and every co-owner exercises, together with his co-participants joint ownership over the pro indiviso property, in addition to hisuse and enjoyment of thesame. 10 Since petitioner has decided to enforce his right in court to end the co-ownership of the house and lot and respondent has not refuted the allegationthat he has been preventing the sale of the property by his continued occupancy of the premises, justice and equity demand that respondent and hisfamily vacate the property so that the sale can be effected immediately. In fairness to petitioner, respondent should pay a rental of P1,200.00 per



month, with legal interest; from the time the trial court ordered him to vacate, for the use and enjoyment of the other half of the property appertainingto petitioner.When petitioner filed an action to compel the sale of the property and the trial court granted the petition and ordered the ejectment of respondent, theco-ownership was deemed terminated and the right to enjoy the possession jointly also ceased. Thereafter, the continued stay of respondent and hisfamily in the house prejudiced the interest of petitioner as the property should have been sold and the proceeds divided equally between them. To thisextent and from then on, respondent should be held liable for monthly rentals until he and his family vacate.WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of Appeals dated 16 October 1986 is REVERSED and SET ASIDE. The decisionof the trial court in Civil Case No. 69.12-P dated 16 July 1979 is REINSTATED, with the modification that respondent Senen B. Aguilar is ordered tovacate the premises in question within ninety (90) days from receipt of this and to pay petitioner Virgilio B. Aguilar a monthly rental of P1,200.00 withinterest at the legal rate from the time he received the decision of the trial court directing him to vacate until he effectively leaves the premises.The trial court is further directed to take immediate steps to implement this decision conformably with Art. 498 of the Civil Code and the Rules of Court.This decision is final and executory.SO ORDERED.G.R. No. 124262 October 12, 1999TOMAS CLAUDIO MEMORIAL COLLEGE, INC., petitioner,vs.COURT OF APPEALS, HON. ALEJANDRO S. MARQUEZ, CRISANTA DE CASTRO, ELPIDIA DE CASTRO, EFRINA DE CASTRO, IRENEO DECASTRO and ARTEMIO DE CASTRO ADRIANO, respondents.QUISUMBING, J.: This special civil action for certiorari seeks to set aside the Decision of the Court Appeals dated August 14, 1995, in CA-G.R. SP No. 36349, and itsResolution dated March 15, 1996, which denied petitioner's motion for reconsideration.1âwphi1.nêt On December 13, 1993, private respondents filed an action for Partition before the Regional Trial Court of Morong, Rizal. They alleged that theirpredecessor-in-interest, Juan De Castro, died intestate in 1993 and they are his only surviving and legitimate heirs. They also alleged that their fatherowned a parcel of land designated as Lot No. 3010 located at Barrio San Juan, Morong, Rizal, with an area of two thousand two hundred sixty nine(2,269) square meters more or less. They further claim that in 1979, without their knowledge and consent, said lot was sold by their brother Mariano topetitioner. The sale was made possible when Mariano represented himself as the sole heir to the property. It is the contention of private respondentsthat the sale made by Mariano affected only his undivided share to the lot in question but not the shares of the other co-owners equivalent to four fifths

(4/5) of the property.Petitioner filed a motion to dismiss contending, as its special defense, lack of jurisdiction and prescription and/or laches. The trial court, after hearingthe motion, dismissed the complaint in an Order dated August 18, 1984. On motion for reconsideration, the trial court, in an Order dated October 4,1994, reconsidered the dismissal of the complaint and set aside its previous order. Petitioner filed its own motion for reconsideration but it was denied inan Order dated January 5, 1995.

Aggrieved, petitioner filed with the Court of Appeals a special civil action for certiorari anchored on the following grounds: a) the RTC has no jurisdictionto try and take cognizance of the case as the causes of actions have been decided with finality by the Supreme Court, and b) the RTC acted with graveabuse of discretion and authority in taking cognizance of the case.

After the parties filed their respective pleadings, the Court of Appeals, finding no grave abuse of discretion committed by the lower court, dismissed thepetition in a Decision dated August 14, 1995. Petitioner filed a timely motion for reconsideration but it was denied in a Resolution dated March 15, 1996Hence this petition.Petitioner submits the following grounds to support the granting of the writ of certiorari in the present case:

FIRST GROUND THE HON. COURT OF APPEALS AND THE REGIONAL TRIAL COURT (BR. 79) HAD NO JURISDICTION TO TRY SUBJECT CASE (SP.PROC. NO. 118-M). THE "CAUSES OF ACTION" HEREIN HAVE BEEN FINALLY DECIDED BY THE HON. COURT OF FIRST INSTANCEOF RIZAL (BR. 31) MAKATI, METRO MANILA, AND SUSTAINED IN A FINAL DECISION BY THE HON. SUPREME COURT.

SECOND GROUND THE HON. COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION AND AUTHORITY WHEN IT SUSTAINED THE ORDERS OF THEHON. REGIONAL TRIAL COURT (BR. 79) DATED OCTOBER 4, 1994, AND THE ORDER DATED JANUARY 5, 1995, WHEN SAID RTC(BR. 79) INSISTED IN TRYING THIS CASE AGAINST TCMC WHEN IT HAS RULED ALREADY IN A FINAL ORDER THAT PETITIONER IS NOT A "REAL PARTY" IN INTEREST BY THE HON. REGIONAL TRIAL COURT (BR. 79) IN CIVIL CASE NO. 170, ENTITLED ELPIDIA

A. DE CASTRO , ET . AL . vs . TOMAS CLAUDIO MEMORIAL COLLEGE , ET . AL ., WHICH CASE INVOLVED THE SAME RELIEF, SAMESUBJECT MATTER AND THE SAME PARTIES.

THIRD GROUND THE HON. COURT OF APPEALS GRAVELY ABUSED ITS DISCRETION AND AUTHORITY WHEN IT CAPRICIOUSLY AND WHIMSICALLYDISREGARDED THE EXISTENCE OF RES JUDICATA IN THIS CASE.

The pivotal issues to be resolved in this case are: whether or not the Regional Trial Court and/or the Court of Appeals had jurisdiction over the case,and if so, whether or not the Court of Appeals committed grave abuse of discretion in affirming the decision of the Regional Trial Court.In assailing the Orders of the appellate court, petitioner invokes Rule 65 of the Rules of Court as its mode in obtaining a reversal of the assailed Decisionand Resolution. Before we dwell on the merits of this petition, it is worth noting, that for a petition for certiorari to be granted, it must be shown thatthe respondent court committed grave abuse of discretion equivalent to lack or excess of jurisdiction and not mere errors of judgment, for certiorari isnot a remedy for errors of judgment, which are correctible by appeal. 1 By grave abuse of discretion is meant such capricious and whimsical exercise of

judgment as is equivalent to lack of jurisdiction, and mere abuse of discretion is not enough — it must be grave. 2 In the case at hand, there is no showing of grave abuse of discretion committed by the public respondent. As correctly pointed out by the trial court,when it took cognizance of the action for partition filed by the private respondents, it acquired jurisdiction over the subject matter of thecase. 3 Jurisdiction over the subject matter of a case is conferred by law and is determined by the allegations of the complaint irrespective of whetherthe plaintiff is entitled to all or some of the claims asserted therein. 4 Acquiring jurisdiction over the subject matter of a case does not necessarily meanthat the lower court meant to reverse the decision of the Supreme Court in the land registration case mentioned by the petitioner.Moreover, settled is the rule that the jurisdiction of the court over the subject matter is determined by the allegations of the complaint, hence thecourt's jurisdiction cannot be made to depend upon defenses set up in the answer or in a motion to dismiss. 5 This has to be so, for were the principleotherwise, the ends of justice would be frustrated by making the sufficiency of this kind of action dependent upon the defendant in all cases.Worth stressing, as long as a court acts within its jurisdiction any alleged errors committed in the exerc ise thereof will amount to nothing more thanerrors of judgment which are revisable by timely appeal and not by a special civil action of certiorari . 6 Based on the foregoing, even assuming for thesake of argument that the appellate court erred in affirming the decision of the trial court, which earlier denied petitioner's motion to dismiss, suchactuation on the part of the appellate court cannot be considered as grave abuse of discretion, hence not correctible bycertiorari , because certiorari isnot available to correct errors of procedure or mistakes in the judge's findings and conclusions.



In addition, it is now too late for petitioner to question the jurisdiction of the Court of Appeals. It was petitioner who elevated the instant controversy tothe Court of Appeals via a petition for certiorari . In effect, petitioner submitted itself to the jurisdiction of the Court of Appeals by seeking affirmativerelief therefrom. If a party invokes the jurisdiction of a court, he cannot thereafter challenge that court's jurisdiction in the same case. 7 To do otherwisewould amount to speculating on the fortune of litigation, which is against the policy of the Court.On the issue of prescription, we have ruled that even if a co-owner sells the whole property as his, the sale will affect only his own share but not thoseof the other co-owners who did not consent to the sale. 8 Under Article 493 of the Civil Code, the sale or other disposition affects only the seller'sshare pro indiviso , and the transferee gets only what corresponds to his grantor's share in the partition of the property owned in common. 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 andvoid. However, only the rights of the co-owner/seller are transferred, thereby making the buyer a co-owner of the property. The proper action in a caselike this, is not for the nullification of the sale, or for the recovery of possession of the property owned in common from the third person, but for divisionor partition of the entire property if it continued to remain in the possession of the co-owners who possessed and administered it.9 Such partition shouldresult in segregating the portion belonging to the seller and its delivery to the buyer.1âwphi1.nêt In the light of the foregoing, petitioner's defense of prescription against an action for partition is a vain proposition. Pursuant to Article 494 of the CivilCode, "no co-owner shall be obliged to remain in the co-ownership. Such co-owner may demand at anytime the partition of the thing owned incommon, insofar as his share is concerned." InBudlong vs . Bondoc , 10 this Court has interpreted said provision of law to mean that the action forpartition is imprescriptible. It cannot be barred by prescription. For Article 494 of the Civil Code explicitly declares: "No prescription shall lie in favor of aco-owner or co-heirs as long as he expressly or impliedly recognizes the co-ownership."WHEREFORE, the instant petition is DENIED. The assailed decision of the Court of Appeals is hereby AFFIRMED. Costs against petitioners.SO ORDERED.LUCIO ROBLES, EMETERIA ROBLES, ALUDIA ROBLES and EMILIO ROBLES, petitioners , vs . COURT OF APPEALS, Spouses VIRGILIOSANTOS and BABY RUTH CRUZ, RURAL BANK OF CARDONA, Inc., HILARIO ROBLES, ALBERTO PALAD JR. in his capacity as Director of Lands, and JOSE MAULEON in his capacity as District Land Officer of the Bureau Of Lands, respondents .

D E C I S I O N PANGANIBAN, J .: To be entitled to the remedy of quieting of title, petitioners must show that they have title to the real property at issue, and that some deed orproceeding beclouds its validity or efficacy. Buyers of unregistered real property, especially banks, must exert due diligence in ascertaining the titles of mortgagors and sellers, lest some innocent parties be prejudiced. Failure to observe such diligence may amount to bad faith and may result in the

nullity of the mortgage, as well as of the subsequent foreclosure and/or auction sale. Unless the co-ownership is clearly repudiated, a co-owner cannot,by prescription, acquire title to the shares of the other co-owners. MesmThe Case

Before us is a Petition for Review under Rule 45, assailing the June 15, 1995 Decision and the January 15, 1996 Resolution of the Court of Appeals[1] (CA) in CA-GR CV No. 34213.[2] In its Decision, the CA ruled:[3] "WHEREFORE, the trial court’s June 17, 1991 decision is REVERSED and SET ASIDE, and in lieu thereof a new one is herebyentered ordering the dismissal of the plaintiffs-appellees['] second amended complaint."Earlier, the trial court had disposed as follows: Sppedä jo"WHEREFORE, premises considered, judgment is hereby rendered as follows:1. Declaring free patent Title No. IV-1-010021 issued by the Bureau of Lands as null and void;2. Ordering the defendant spouses Vergel Santos and Ruth Santos to deliver the property subject of this case to theplaintiff; and3. Declaring the heirs of Silvino Robles as the absolute owner of the land in controversy."The January 15, 1996 CA Resolution denied petitioners' Motion for Reconsideration.

The Facts The present Petition is rooted in a case for quieting of title before the Regional Trial Court of Morong, Rizal, filed on March 14, 1988,[4] by Petitioners

Lucio Robles, Emeteria Robles, Aludia Robles and Emilio Robles. The facts were narrated by the trial court in this wise:"There seems to be no dispute that Leon Robles primitively owned the land situated in Kay Taga, Lagundi, Morong, Rizal with anarea of 9,985 square meters. He occupied the same openly and adversely. He also declared the same in his name for taxationpurposes as early as 1916 covered by Tax Declaration No. 17865 (Exh. "I") and paid the corresponding taxes thereon (Exh. "B").When Leon Robles died, his son Silvino Robles inherited the land, who took possession of the land, declared it in his name fortaxation purposes and paid the taxes thereon. Rtc-spped"Upon the death of Silvino Robles in 1942, his widow Maria de la Cruz and his children inherited the property. They took adversepossession of said property and paid taxes thereon. The task of cultivat[ing] the land was assigned to plaintiff Lucio Robles whoplanted trees and other crops. He also built a nipa hut on the land. The plaintiffs entrusted the payment of the land taxes to theirco-heir and half-brother, Hilario Robles."In 1962, for unknown reasons, the tax declaration of the parcel of land in the name of Silvino Robles was canceled and transferredto one Exequiel Ballena (Exh. "19"), father of Andrea Robles who is the wife of defendant Hilario Robles. Thereafter, ExequielBallena secured a loan from the Antipolo Rural Bank, using the tax dec laration as security. Somehow, the tax declaration wastransferred [to] the name of Antipolo Rural Bank (Exh. "17") and later on, was transferred [to] the name of defendant HilarioRobles and his wife (Exh. "16"). Calrky"In 1996, Andrea Robles secured a loan from the Cardona Rural Bank, Inc., using the tax declaration as security. Andrea Robles

testified without contradiction that somebody else, not her husband Hilario Robles, signed the loan papers because Hilario Robleswas working in Marinduque at that time as a carpenter."For failure to pay the mortgage debt, foreclosure proceedings were had and defendant Rural Bank emerged as the highest bidderduring the auction sale in October 1968."The spouses Hilario Robles failed to redeem the property and so the tax declaration was transferred in the name of defendantRural Bank. On September 25, 1987, defendant Rural Bank sold the same to the Spouses Vergel Santos and Ruth Santos. Joä spped"In September 1987, plaintiff discovered the mortgage and attempted to redeem the property, but was unsuccessful. On May10,1988, defendant spouses Santos took possession of the property in question and was able to secure Free Patent No. IV-1-010021 in their names."[5] On the other hand, the Court of Appeals summarized the facts of the case as follows:"The instant action for quieting of title concerns the parcel of land bounded and more particularly described as follows: Sd-aad-sc"A parcel of land located at Kay Taga, Lagundi, Morong, Rizal. Bounded [i]n the north by the property of Venancio Ablay ySimeon Ablay; [i]n the east by the property of Veronica Tulak y Dionisio Ablay; [i]n the south by the property of Simeon

Ablay y Dionisio Ablay; and [i]n the west by the property of Dionisio Ablay y Simeon Ablay, with an area of 9,985 squaremeters, more or less, assessed in the year 1935 at P60.00 under Tax Declaration No. 23219.

http://sc.judiciary.gov.ph/jurisprudence/2000/mar2000/123509.html#_ftn1






















"As the heirs of Silvino Robles who, likewise inherited the above-described parcel from Leon Robles, the siblings Lucio, Emeteria, Aludia and Emilio, all surnamed Robles, commenced the instant suit with the filing of their March 14, 1988 complaint againstSpouses Virgilio and Ruth Santos, as well as the Rural Bank of Cardona, Inc. Contending that they had been in possession of theland since 1942, the plaintiff alleged, among other matters, that it was only in September of 1987 that they came to know of theforeclosure of the real estate mortgage constituted thereon by the half-brother, Hilario Robles, in favor of defendant Rural Bank;and that they likewise learned upon further inquiry, that the latter had already sold the self-same parcel in favor of the Santosspouses (pp. 1-3, orig. rec.). Twice amended to implead Hilario Robles (pp. 76-80, orig. rec) and, upon subsequent discovery of theissuance of Free Patent No. IV-I-010021 in favor of the defendant spouses, the Director of Lands and the District Land Officer of the Bureau of Lands as parties-defendants (pp. 117-121, orig. rec). The plaintiffs’ complaint sought the following reliefs on thetheory that the encumbrance of their half-brother, constituted on the land, as well as all proceedings taken subsequent thereto,were null and void, to wit:

"Wherefore, it is respectfully prayed that (a) a preliminary mandatory injunction be issued forthwith restoring plaintiffs totheir possession of said parcel of land; (b) an order be issued annulling said Free Patent No. IV-I-010021 in the name of defendants spouses Vergel Santos and Ruth C. Santos, the deed of sale aforementioned and any tax declaration whichhave been issued in the name of defendants; and (c) ordering defendants jointly and severally, to pay plaintiffs the sumof P10,000.00 as attorney’s fees. "Plaintiffs pray for other relief as [may be] just and equitable under the premises." (pp. 120-121, orig. rec.)

x x x x x x x x x"With the termination of the pre-trial stage upon the parties-litigants’ agreement (p. 203, orig. rec.) the trial court proceeded to trythe case on the merits. It thereafter rendered the challenged June 17, 1991 decision upon the following findings and conclusions:

"The real estate mortgage allegedly executed by Hilario Robles is not valid because his signature in the mortgage deedwas forged. This fact, which remains unrebutted, was admitted by Andrea Robles."Inasmuch as the real estate mortgage executed allegedly by Hilario Robles in favor of the defendant Cardona RuralBank, Inc. was not valid, it stands to reason that the foreclosure proceedings therein were likewise not valid. Therefore,the defendant bank did not acquire any right arising out of the forec losure proceedings. Consequently, defendant bank could not have transferred any right to the spouses Santos."The fact that the land was covered by a free patent will not help the defendant Santos any.

"There can be no question that the subject [property was held] in the concept of owner by Leon Robles since 1916.Likewise, his successor-in-interest, Silvino Robles, his wife Maria de la Cruz and the plaintiffs occupied the propertyopenly, continuously and exclusively until they were ousted from their possession in 1988 by the spouses Vergel and RuthSantos."Under the circumstances, therefore, and considering that "open, exc lusive and undisputed possession of alienable publiclands for the period prescribed by law (30 years), creates the legal fiction whereby the land, upon completion of therequisite period, ipso jure and without the need of judicial or other action, ceases to be public land and becomes privateproperty. Possession of public land x x x which is [of] the character and duration prescribed by the statute is theequivalent of an express grant from the State, considering the dictum of the statute itself[:]; "The possessor x x x shallbe conclusively presumed to have performed all the conditions essential to a government grant and shall be entitled to acertificate of title x x x." No proof is admissible to overcome a conclusive presumption[,] and confirmation proceedingswould be a little more than a formality, at the most limited to ascertaining whether the possession claimed is of therequired character and length of time. Registration thereunder would not confer title, but simply recognize a title alreadyvested. (Cruz v. IAC, G.R. No. 75042, November 29, 1988) The land in question has become private land."Consequently, the issuance of [a] free patent title to the Spouses Vergel Santos and Ruth C. Santos is not valid becauseat the time the property subject of this case was already private land, the Bureau of Lands having no jurisdiction to

dispose of the same." (pp. 257-259, orig. rec.)""Dissatisfied with the foregoing decision, the Santos spouses and the defendant Rural Bank jointly filed their July 6, 1991 Notice of Appeal (p.260, orig. rec.) x x x."[6]

Ruling of the Court of Appeals In reversing the trial court, the Court of Appeals held that petitioners no longer had any title to the subject property at the time they instituted theComplaint for quieting of title. The CA ratiocinated as follows: MisÓ spped

"As correctly urged by the appellants, the plaintiff-appellees no longer had any title to the property at the time of the institution of the instant complaint. (pp. 25-27, rec.) The latter’s claim of continuous possession notwithstanding (pp. 3-5, TSN, July 5, 1990; p.12, TSN, July 12, 1990), the aforesaid loss of title is amply evidenced by the subsequent declaration of the subject realty fortaxation purposes not only in the name of Exequiel Ballena (Exhibits "1" and "2", pp. 23-24, orig. rec.) but also in the name of theRural Bank of Antipolo (Exhibit 17, vol. II, orig. rec.). On the theory that tax declarations can be evincive of the transfer of a parcelof land or a portion thereof (Gacos v. Court of Appeals, 212 SCRA 214), the court a quo clearly erred in simply brushing aside theapparent transfers [which] the land in litigation had undergone. Whether legal or equitable, it cannot, under the circumstances, begainsaid that the plaintiff-appellees no longer had any title to speak of when Exequiel Ballena executed the November 7, 1966 Deedof Absolute Sale transferring the land in favor of the spouses Hilario and Andrea Robles (Exhibit "3", p. 25, orig. rec.)"Even on the theory that the plaintiffs-appellees and their half-brother, Hilario Robles, are co-owners of the land left behind by their

common father, Silvino Robles, such title would still be effectively discounted by what could well serve as the latter’s acts of repudiation of the co-ownership, i.e ., his possession (p. 22, TSN, November 15, 1990) and declaration thereof for taxation purposesin his own name (Exhibit "4", p. 26, orig. rec.). In view of the plaintiffs-appellees’ inaction for more than twenty (20) years from thetime the subject realty was transferred in favor of Hilario Robles, the appellants correctly maintain that prescription had already setin. While it may be readily conceded that an action to quiet title to property in the possession of the plaintiff is imprescriptible(Almanza vs. Arguelles, 156 SCRA 718; Coronel vs. Intermediate Appellate Court, 155 SCRA 270; Caragay-Layno vs. Court of

Appeals, 133 SCRA 718; Charon Enterprises vs. Court of Appeals, 124 SCRA 784; Faja vs. Court of Appeals, 75 SCRA 441; Burtonvs. Gabar, 55 SCRA 4999), it equally bears emphasis that a co-owner or, for that matter, the said co-owner[']s successors-in-interest who occupy the community property other than as co-owner[s] can claim prescription as against the other co-owners (DeGuzman vs. Austria, 148 SCRA 75; Ramos vs. Ramos, 45 Phil. 362; Africa vs. Africa, 42 Phil. 902; Bargayo vs. Camumot, 40 Phil.857; De Castro vs. Echarri, 20 Phil. 23). If only in this latter sense, the appellants correctly argue that the plaintiffs-appellees havelost their cause of action by prescription."Over and above the foregoing considerations, the court a quo gravely erred in invalidating the real estate mortgage constituted onthe land solely on the basis of Andrea Robles’ testimony that her husband’s signature thereon was forged (p. 257, orig. rec.),

xxx xxx xxx







"In according to the foregoing testimony x x x credibility which, while admittedly unrebutted, was altogether uncorroborated, thetrial court lost sight of the fact that the assailed deed of real estate mortgage (Exhibit "5", Vol. II, orig. rec.) is a public document,the acknowledgment of which is a prima facie evidence of its due execution (Chua vs. Court of Appeals, 206 SCRA 339). As such, itretains the presumption of validity in the absence of a full, clear and convincing evidence to overcome such presumption (Agdeppavs. Ibe, 220 SCRA 584). Maniks"The foregoing principles take even more greater [sic] when it is, moreover, borne in mind that Hilario Robles made the followingadmissions in his March 8, 1989 answer, viz:"3. The complaint filed against herein answering defendant has no legal basis considering that as the lawful owner of thesubject real property, defendant Hilario Robles has the right to mortgage the said real property and could dispose thesame in whatever manner he wishe[s] to do." (p. 96, orig. rec.)"Appropriately underscored by the appellants, the foregoing admission is binding against Hilario [Robles]. Judicial admissions, verbalor written, made by the parties in the pleadings or in the course of the trial or other proceedings in the same case are conclusive,no evidence being required to prove the same. They cannot be contradicted unless shown to have been made through [a] palpablemistake or [unless] no such admission was actually made (Philippine American General Insurance, Inc. vs. Sweet Lines, Inc., 212SCRA 194)."It does not help the plaintiffs-appellees’ cause any that, aside from complying with the requirements for the foreclosure of thesubject real estate mortgage (Exhibits "6", "7", "8" and "10", Volume II[)], the appellant Rural Bank had not only relented to themortgagor’s request to postpone the (Exhibit "g", Vol. II, orig. rec.) but had likewise granted the latter’s request for an extension of the redemption period therefor (Exhibits "11" and "12", pp. 35-36, orig. rec.). Without going into minute detail in discussing theSantos spouses’ rights as purchasers for value and in good faith (Exhibit "21", Vol. II, orig. rec.), the mortgagor and the plaintiffs’ -appellees cannot now be heard to challenge the validity of the sale of the land after admittedly failing to redeem the same withinthe extension the appellant Rural Bank granted (pp. 10-11, TSN, November 15, 1990)."Being dependent on the supposed invalidity of the constitution and foreclosure of the subject real estate mortgage, the plaintiffs-appellees’ attack upon x x x Free Patent No. IV-I must necessarily fail. The trial court, therefore, misread, and ignored the evidenceo[n] record, to come up with erroneous conclusion." ManikxContending that such ruling was contrary to law and jurisprudence, Petitioners Lucio, Emeteria, Aludia and Emilio -- all surnamed Robles -- filed thisPetition for Review.[7]

The Assigned Error Petitioners ascribe the following error to the respondent court:"Respondent Court of Appeals grievously erred in ruling that with the transfers of the tax declaration over the parcel of land inquestion from Silvino Robles to Exequiel Ballena, then to the Rural Bank of Antipolo, then to Respondent Hilario Robles, then toRespondent Rural Bank of Cardona Inc., and then finally to Respondent Spouses Santos, petitioners, who by themselves and theirpredecessors in interest have been in open, actual and adverse possession of said parcel of land since 1916 up to their forcedremoval therefrom in 1988, have lost their title to said property by prescription to their half-brother, Respondent Hilario Robles, andthen finally, to Respondent Spouses Santos."[8] For a better understanding of the case, the above issue will be broken down into three points: first , the nature of the remedy of quieting of title; second , the validity of the real estate mortgage; and third, the efficacy of the free patent granted to the Santos spouses. Sppedâ

First Issue: Quieting of Title Article 476 of the Civil Code provides:"Whenever there is cloud on title to real property or any interest therein, by reason of any instrument, record, claim, encumbranceor proceeding which is apparently valid or effective but is in truth and in fact invalid, ineffective, voidable or unenforceable, andmay be prejudicial to said title, an action may be brought to remove such cloud or to quiet title."An action may also be brought to prevent a cloud from being cast upon title to real property or any interest therein."

Based on the above definition, an action to quiet title is a common-law remedy for the removal of any cloud or doubt or uncertainty on the title to realproperty.[9] It is essential for the plaintiff or complainant to have a legal or an equitable title to or interest in the real property which is the subjectmatter of the action.[10] Also, the deed, claim, encumbrance or proceeding that is being alleged as a cloud on plaintiff’s title must be shown to be in factinvalid or inoperative despite its prima facie appearance of validity or legal efficacy.[11] That there is an instrument or a document which, on its face, is valid and efficacious is clear in the present case. Petitioners allege that their title asowners and possessors of the disputed property is clouded by the tax declaration and, subsequently, the free patent thereto granted to Spouses Vergeland Ruth Santos. The more important question to be resolved, however, is whether the petitioners have the appropriate title that will entitle them toavail themselves of the remedy of quieting of title. NexoldPetitioners anchor their claim to the disputed property on their continued and open occupation and possession as owners thereof. They allege that theyinherited it from their father, Silvino, who in turn had inherited it from his father, Leon. They maintain that after their f ather’s death, they agreed amongthemselves that Petitioner Lucio Robles would be tending and cultivating it for everyone, and that their half-brother Hilario would be paying the landtaxes.Petitioners insist that they were not aware that from 1962 until 1987, the subject property had been declared in the names of Exequiel Ballena, theRural Bank of Antipolo, Hilario Robles, the Rural Bank of Cardona, Inc., and finally, Spouses Vergel and Ruth Santos. Maintaining that as co-owners of the subject property, they did not agree to the real estate mortgage constituted on it, petitioners insist that their shares therein should not have beenprejudiced by Hilario’s actions. Miso

On the other hand, Private Respondents Vergel and Ruth Santos trace their claim to the subject property to Exequiel Ballena, who had purportedly soldit to Hilario and Andrea Robles. According to private respondents, the Robles spouses then mortgaged it to the Rural Bank of Cardona, Inc. -- not as co-owners but as absolute owners -- in order to secure an agricultural loan worth P2,000. Upon their failure to pay their indebtedness, the mortgage wasforeclosed and the property sold to the bank as the highest bidder. Thereafter, private respondents purchased the property from the bank. SppedjoUndisputed is the fact that the land had previously been occupied by Leon and later by Silvino Robles, petitioners’ predecessors-in-interest, as evidencedby the different tax declarations issued in their names. Also undisputed is the fact that the petitioners continued occupying and possessing the land fromthe death of Silvino in 1942 until they were allegedly ousted therefrom in 1988. In 1962, the subject property was declared in the name of Exequiel fortaxation purposes. On September 30, 1965, it was again declared in the same name; on October 28, 1965, in the name of the Rural Bank of Antipolo;on November 7, 1966, in the name of Hilario and Andrea; and thereafter, in the name of the Rural Bank of Cardona and, finally, in the name of theSantos spouses.Ostensibly, the Court of Appeals failed to consider irregularities in the transactions involving the disputed property. First , while it was declared in thename of Exequiel in 1962, there was no instrument or deed of conveyance evidencing its transfer from the heirs of Silvino to him. This fact is important,considering that the petitioners are alleging continued possession of the property. Second , Exequiel was the father-in-law of Hilario, to whom petitionershad entrusted the payment of the land taxes. Third, considering that the subject property had been mortgaged by Exequiel to the Rural Bank of

Antipolo, and that it was foreclosed and in fact declared in the bank’s name in 1965, why was he able to sell it to Spouses Hilario and Andrea in























1966? Lastly , inasmuch as it was an unregistered parcel of land, the Rural Bank of Cardona, Inc., did not observe due diligence in determining Hilario’stitle thereto. JosppedThe failure to show the indubitable title of Exequiel to the property in question is vital to the resolution of the present Petition. It was from him thatHilario had allegedly derived his title thereto as owner, an allegation which thereby enabled him to mortgage it to the Rural Bank of Cardona. Theoccupation and the possession thereof by the petitioners and their predecessors-in-interest until 1962 was not disputed, and Exequiel’s acquisition of the said property by prescription was not alleged. Thus, the deed of conveyance purportedly evidencing the transfer of ownership and possession fromthe heirs of Silvino to Exequiel should have been presented as the best proof of that transfer. No such document was presented, however. ScmisTherefore, there is merit to the contention of the petitioners that Hilario mortgaged the disputed property to the Rural Bank of Cardona in his capacityas a mere co-owner thereof. Clearly, the said transaction did not divest them of title to the property at the time of the institution of the Complaint forquieting of title.Contrary to the disquisition of the Court of Appeals, Hilario effected no clear and evident repudiation of the co-ownership. It is a fundamental principlethat a co-owner cannot acquire by prescription the share of the other co-owners, absent any clear repudiation of the co-ownership. In order that thetitle may prescribe in favor of a co-owner, the following requisites must concur: (1) the co-owner has performed unequivocal acts of repudiationamounting to an ouster of the other co-owners; (2) such positive acts of repudiation have been made known to the other co-owners; and (3) theevidence thereof is clear and convincing.[12] In the present case, Hilario did not have possession of the subject property; neither did he exclude the petitioners from the use and the enjoymentthereof, as they had indisputably shared in its fruits.[13] Likewise, his act of entering into a mortgage contract with the bank cannot be construed to be arepudiation of the co-ownership. As absolute owner of his undivided interest in the land, he had the right to alienate his share, as he in factdid.[14] Neither should his payment of land taxes in his name, as agreed upon by the co-owners, be construed as a repudiation of the co-ownership. Theassertion that the declaration of ownership was tantamount to repudiation was belied by the continued occupation and possession of the disputedproperty by the petitioners as owners . MisÓ sc

Second Issue: Validity of the Real Estate Mortgage In a real estate mortgage contract, it is essential that the mortgagor be the absolute owner of the property to be mortgaged; otherwise, the mortgage isvoid.[15] In the present case, it is apparent that Hilario Robles was not the absolute owner of the entire subject property; and that the Rural Bank of Cardona, Inc., in not fully ascertaining his title thereto, failed to observe due diligence and, as such, was a mortgagee in bad faith.First , the bank was utterly remiss in its duty to establish who the true owners and possessors of the subject property were. It acted with precipitatehaste in approving the Robles spouses’ loan application, as well as the real estate mortgage covering the disputed parcel of land.[16] Had it been more

circumspect and assiduous, it would have discovered that the said property was in fact being occupied by the petitioners, who were tending andcultivating it.Second , the bank should not have relied solely on the Deed of Sale purportedly showing that the ownership of the disputed property had beentransferred from Exequiel Ballena to the Robles spouses, or that it had subsequently been declared in the name of Hilario. Because it was dealingwith unregistered land, and the circumstances surrounding the transaction between Hilario and his father-in-law Exequiel were suspicious, the bank should have exerted more effort to fully determine the title of the Robleses. Rural Bank of Compostela v. Court of Appeals[17] invalidated a real estatemortgage after a finding that the bank had not been in good faith. The Court explained: "The rule that persons dealing with registered lands can relysolely on the certificate of title does not apply to banks." In Tomas v. Tomas , the Court held: Sc-slx

"x x x. Banks, indeed, should exercise more care and prudence in dealing even with registered lands, than private individuals, fortheir business is one affected with public interest, keeping in trust money belonging to their depositors, which they should guardagainst loss by not committing any act of negligence which amounts to lack of good faith by which they would be denied theprotective mantle of land registration statute, Act 496, extended only to purchasers for value and in good faith, as well as tomortgagees of the same character and description. x x x."[18]

Lastly , the Court likewise finds it unusual that, notwithstanding the bank’s insistence that it had become the owner of the subject property and had paidthe land taxes thereon, the petitioners continued occupying it and harvesting the fruits therefrom.[19] Considering that Hilario can be deemed to have mortgaged the disputed property not as absolute owner but only as a co-owner, he can be adjudged to

have disposed to the Rural Bank of Cardona, Inc., only his undivided share therein. The said bank, being the immediate predecessor of the Santosspouses, was a mortgagee in bad faith. Thus, justice and equity mandate the entitlement of the Santos spouses, who merely stepped into the shoes of the bank, only to what legally pertains to the latter -- Hilario’s share in the disputed property. Missc

Third Issue: Efficacy of Free Patent Grant Petitioners repeatedly insist that the disputed property belongs to them by private ownership and, as such, it could not have been awarded to theSantos spouses by free patent. They allege that they possessed it in the concept of owners -- openly, peacefully, publicly and continuously as early as1916 until they were forcibly ousted therefrom in 1988. They likewise contend that they cultivated it and harvested its fruits. Lucio Robles testified:

"xxx xxx xxxQ By the way, why do you know this parcel of land?

A Because before my father died, he showed me all the documents.Q Before the death of your father, who was the owner of this parcel of land?

A My father, sir. SppedQ How did your father acquire this parcel of land?

A My father knew that it [was] by inheritance, sir.Q From whom?

A From his father, Leon Robles, sir.

Q And do you know also [from] whom Leon Robles acquired this land? A It was inherited from his father, sir.Q What is the nature of this parcel of land?

A It’s an agricultural land, sir, Q Now, at the time of the death of your father, this land was planted with what crops?

A Mango trees, santol trees, and I was the one who planted those trees, sir.Q When did you plant those trees?

A Before the death of my father, sir. M-issdaaQ Now, after the death of your father, who cultivated this parcel of land?

A I took charge of the land after the death of my father, sir.Q Up to when?

A Up to the present, sir, after this case was already filed."[20] The preceding claim is an assertion that the subject property is private land. The petitioners do not concede, and the records do not show, that it wasever an alienable land of the public domain. They allege private ownership thereof, as evidenced by their testimonies and the tax declarations issued in







































the names of their predecessors-in-interest. It must be noted that while their claim was not corroborated by other witnesses, it was not controverted bythe other parties, either. KycalrCarlos Dolores insisted that the Rural Bank of Cardona, Inc., of which he was the manager, had acquired and possessed the subject property. He didnot, however, give any reason why the petitioners had continued occupying it, even as he admitted on the stand that he had visited it twice .[21] In the light of their open, continuous, exclusive and notorious possession and occupation of the land, petitioners are "deemed to have acquired, byoperation of law, a right to a grant, a government grant, without the necessity of a certificate of title being issued."[22] The land was "segregated fromthe public domain." Accordingly, the director of lands had no authority to issue a free patent thereto in favor of another person. Verily, jurisprudenceholds that a free patent covering private land is null and void.[23] Worth quoting is the disquisition of the Court in Agne v. Director of Lands,[24] in which it held that a riparian owner presently in possession had a betterright over an abandoned river bed than had a registered owner by virtue of a free patent."Under the provisions of Act 2874 pursuant to which the title of private respondents’ predecessor-in-interest was issued, the President of the Philippines, or his alter ego, the Director of Lands, has no authority to grant a free patent for land that has ceased to be a public land and has passed to private ownership and a title so issued is null and void. The nullity arises, not from fraud ordeceit, but from the fact that the land is not under the jurisdiction of the Bureau of Lands. The jurisdiction of the Director of Landsis limited only to public lands and does not cover lands publicly owned. The purpose of the Legislature in adopting the former PublicLand Act, Act No. 2874, was and is to limit its application to lands of the public domain, and lands held in private ownership are notincluded therein and are not affected in any manner whatsoever thereby. Land held in freehold or fee title, or of private ownership,constitutes no part of the public domain, and cannot possibly come within the purview of said act 2874, inasmuch as the ‘subject’ of such freehold or private land is not embraced in any manner in the title of the Act and the same is excluded from the provisions of the text thereof. Kyle"We reiterate that private ownership of land is not affected by the issuance of the free patent over the same land because thePublic Land Act applies only to lands of the public domain. Only public land may be disposed of by the Director of Lands . Since asearly as 1920, the land in dispute was already under the private ownership of herein petitioners and no longer a part of the lands of the public domain, the same could not have been the subject matter of a free patent. The patentee and his successors-in-interestacquired no right or title to said land. Necessarily, Free Patent No. 23263 issued to Herminigildo Agpoon is null and void and thesubsequent titles issued pursuant thereto cannot become final and indefeasible. Hence we ruled in Director of Lands v. Sicsican, et al. that if at the time the free patents were issued in 1953 the land covered therein were already private property of another and,

therefore, not part of the disposable land of the public domain, then applicants patentees acquired no right or title to the land."Now, a certificate of title fraudulently secured is null and void ab initio if the fraud consisted in misrepresenting that the land is partof the public domain, although it is not. As earlier stated, the nullity arises, not from the fraud or deceit, but from the fact that theland is not under the jurisdiction of the Bureau of Lands. Being null and void, the free patent granted and the subsequent titlesproduce no legal effect whatsoever. Quod nullum est, nullum producit effectum. "A free patent which purports to convey land to which the government did not have any title at the time of its issuance does notvest any title in the patentee as against the true owner. The Court has previously held that the Land Registration Act and theCadastral Act do not give anybody who resorts to the provisions thereof a better title than what he really and lawfully has. Exsm

xxx xxx xxx"We have, therefore, to arrive at the unavoidable conclusion that the title of herein petitioners over the land in dispute is superior to the title of the registered owner which is a total nullity. The long and continued possession of petitioners under a valid claim of title cannot be defeated by the claim of a registered owner whose title is defective from the beginning."The Santos spouses argue that petitioners do not have the requisite personality to question the free patent granted them, inasmuch as "it is a well-settled rule that actions to nullify free patents should be filed by the Office of the Solicitor General at the behest of the Director of Lands."[25] Private respondents’ reliance on this doctrine is misplaced. Indeed, the Court held in Peltan Development, Inc. v. Court of A ppeals[26] that only thesolicitor general could file an action for the cancellation of a free patent. Ruling that the private respondents, who were applicants for a free patent,

were not the proper parties in an action to cancel the transfer certificates covering the parcel of land that was the subject of their application, the Courtratiocinated thus: Sl-xm-is"The Court also holds that private respondents are not the proper parties to initiate the present suit. The complaint, praying as itdid for the cancellation of the transfer certificates of title of petitioners on the ground that they were derived from a "spurious" OCTNo. 4216, assailed in effect the validity of said title. While private respondents did not pray for the reversion of the land to thegovernment, we agree with the petitioners that the prayer in the complaint will have the same result of reverting the land to thegovernment under the Regalian Doctrine. Gabila v. Barinag a [27] ruled that only the government is entitled to this relief. x x x."Because the cancellation of the free patent as prayed for by the private respondents in Peltan would revert the property in question to the publicdomain, the ultimate beneficiary would be the government, which can be represented by the solicitor general only. Therefore, the real party-in-interestis the government, not the private respondents.This ruling does not, however, apply to the present case. While the private respondents in Peltan recognized that the disputed property was part of thepublic domain when they applied for free patent,[28] herein petitioners asserted and proved private ownership over the disputed parcel of land by virtueof their open, continued and exclusive possession thereof since 1916. MsesmNeither does the present case call for the reversion of the disputed property to the State. By asking for the nullification of the free patent granted to theSantos spouses, the petitioners are claiming the property which, they contend, rightfully belongs to them.Indeed, the same issue was resolved by this Court in Heirs of Marciano Nagano v. Court of Appeals.[29] In that case, the trial court dismissed a

Complaint seeking the declaration of nullity of an Original Certificate of Title issued pursuant to a free patent, reasoning that the action should havebeen instituted by the solicitor general. In reversing the trial court, the Supreme Court held: Sl-xsc"It is settled that a Free Patent issued over private land is null and void, and produces no legal effect whatsoever. Quod nullum est,nullum producit effectum . Moreover, private respondents’ claim of open, peaceful, continuous and adverse possession of the 2,250square meter portion since 1920, and its illegal inclusion in the Free Patent of petitioners and in their original certificate of title,gave private respondents a cause of action for quieting of title which is imprescriptible." ScmisÓIn any event, the Office of the Solicitor General was afforded an opportunity to express its position in these proceedings. But it manifested that it wouldnot file a memorandum, because "this case involves purely private interests."[30] The foregoing considered, we sustain the contention of petitioners that the free patent granted to the Santos spouses is void. It is apparent that theyare claiming ownership of the disputed property on the basis of their possession thereof in the concept of owners -- openly, peacefully, publicly,continuously and adversely since 1916. Because they and their predecessors-in-interest have occupied, possessed and cultivated it as owners for morethan thirty years,[31] only one conclusion can be drawn -- it has become private land and is therefore beyond the authority of the director of lands. Misspped

Epilogue















































We recognize that both the petitioners and the Santos spouses fell victim to the dubious transaction between Spouses Hilario and Andrea Robles andthe Rural Bank of Cardona, Inc. However, justice and equity mandate that we declare Petitioners Lucio, Emerita, Aludia and Emilio Robles to have therequisite title essential to their suit for quieting of title. Considering the circumstances peculiar to this complicated problem, the Court finds thisconclusion the logical and just solution. ScäThe claim that petitioners were guilty of laches in not asserting their rights as owners of the property should be viewed in the light of the fact that theythought their brother was paying the requisite taxes for them, and more important, the fact that they continued cultivating it and harvesting and gainingfrom its fruits.From another viewpoint, it can even be said that it was the Rural Bank of Cardona, Inc., which was guilty of laches because, granting that it hadacquired the subject property legally, it failed to enforce its rights as owner. It was oblivious to the petitioners’ continued occupation, cultivation andpossession thereof. Considering that they had possessed the property ingood faith for more than ten years, it can even be argued that they thusregained it by acquisitive prescription. In any case, laches is a remedy in equity, and considering the circumstances in this case, the petitioners cannotbe held guilty of it. JurismisIn sum, the real estate mortgage contract covering the disputed property – a contract executed between Spouses Hilario and Andrea on the one handand the Rural Bank of Cardona, Inc., on the other -- is hereby declared null and void insofar as it prejudiced the shares of Petitioners Lucio, Emerita,

Aludia and Emilio Robles; it is valid as to Hilario Robles’ share therein. Consequently, the sale of the subject property to the Santos spouses is validinsofar as it pertained to his share only. Likewise declared null and void is Free Patent No. IV-1-010021 issued by the Bureau of Lands covering thesubject property. JjjurisWHEREFORE, the Petition is hereby GRANTED . The assailed Decision is REVERSED and SET ASIDE. Except as modified by the last paragraph of thisDecision, the trial court’s Decision is REINSTATED. No costs.SO ORDERED. G.R. No. 157954 March 24, 2006 PAZ GALVEZ, CARLOS TAM, and TYCOON PROPERTIES, INC., Petitioners,vs.HON. COURT OF APPEALS and PORFIRIO GALVEZ, Respondents.

D E C I S I O NCHICO-NAZARIO, J.: The factual antecedents of this case reveal that Timotea F. Galvez died intestate on 28 April 1965.1 She left behind her children Ulpiano and Paz Galvez.

Ulpiano, who died on 24 July 1959,

2

predeceased Timotea and was survived by his son, Porfirio Galvez. Timotea left a parcel of land situated atPagdaraoan, San Fernando, La Union, covered by Tax Declaration No. 396453 and more particularly described as follows: A parcel of unirrigated riceland situated at Brgy. Pagdaraoan, San Fernando, La Union under Tax Declaration No. 39645, series of 1957, with an area of 4,304.5 square meters, more or less bounded on the North by Valentin and Isidoro Sobrepeña; on the East by Nicolas Ducusin; on the South by VictorDucusin; and on the West by the National Highway.4 Considering that all the other compulsory heirs of Timotea already received their respective shares,5 the property passed by succession, both toTimotea’s daughter, Paz Galvez, and to the former’s grandson, Porfirio, the latter succeeding by right of representation as the son of Ulpiano.Porfirio Galvez was surprised to discover that on 4 May 1970,6 Paz Galvez executed an affidavit of adjudication stating that she is the true and lawfulowner of the said property. Tax Declarations No. 157497 and No. 123428were then issued in the name of Paz Galvez. On 22 June 1992, without theknowledge and consent of Porfirio Galvez, Paz Galvez sold the property to Carlos Tam for a consideration of Ten Thousand Pesos (P10,000.00) by wayof a Deed of Absolute Sale.9 Carlos Tam thereafter filed an application for registration of said parcel of land under Land Registration Case No. 2278before the Regional Trial Court (RTC) of San Fernando, La Union. On 21 January 1994, Original Certificate of Title No. 0-2602 of the Registry of Deedsof San Fernando, La Union, was issued in the name of Carlos Tam.10 Subsequently, on 27 September 1994, Carlos Tam sold the property to TycoonProperties, Inc. through a Deed of Absolute Sale executed by the former in favor of the latter.11 As a result, the title of Carlos Tam over the propertywas cancelled and a new one, Transfer Certificate of Title (TCT) No. T-4039012 was issued in favor of Tycoon Properties, Inc.On 12 May 1994, Porfirio Galvez filed Civil Case No. 4895 before the RTC, Branch 26, of San Fernando, La Union, for Legal Redemption with Damages

and Cancellation of Documents13

against Paz Galvez and Carlos Tam. The Complaint was later amended to implead as additional defendant, TycoonProperties, Inc.14 When Tycoon Properties, Inc. filed its Answer, it also filed a cross-claim against Carlos Tam. In a decision15 dated 15 December 1999,the trial court held:WHEREFORE, in view of the foregoing, judgment is hereby rendered as follows:

1. declaring null and void the Affidavit of Adjudication executed by defendant PAZ GALVEZ dated May 4, 1970;2. declaring null and void the Deed of Absolute Sale over the property originally covered by Tax Declaration No. 39645 executed by PAZGALVEZ in favor of CARLOS TAM;3. the Original Certificate of Title No. 0-2602, in the name of CARLOS TAM be considered cancelled;4. The Deed of Sale between CARLOS TAM and TYCOON PROPERTIES, Inc. is hereby ordered cancelled with Transfer Certificate of Title No.T-40390, being null and void;5. That CARLOS TAM shall receive from the Clerk of Court, San Fernando City, La Union the amount of Ten Thousand (P10,000.00) pesos, asredemption of the property pursuant to law;6. That the property covered by Transfer Certificate of Title No. T-40390, be reconveyed (whole property) to PORFIRIO GALVEZ, he havingredeemed one-half (½) of the property from CARLOS TAM and other half of the property belongs to him as co-heir of TIMOTEA FLORESGALVEZ.7. Defendant PAZ GALVEZ and CARLOS TAM shall be liable solidarily for the actual damages of the plaintiff in the amount of Ten Thousand

(P10,000.00) pesos as well as moral damages in the amount of Fifty Thousand (P50,000.00) Pesos, together with attorney's fees in theamount of Ten Thousand (P10,000.00) Pesos acceptance fee and Five Hundred (P500.00) per appearance fee.16 Petitioners Paz Galvez, Carlos Tam and Tycoon Properties, Inc. appealed the decision to the Court of Appeals.17In a decision of the Court of Appealsdated 28 August 2002,18 the appellate court resolved to affirm the decision of the trial court. Petitioners filed a Motion for Reconsideration which wasdenied in a resolution dated 14 April 2003.19 Not contented with the decision of the Court of Appeals, petitioners are now before this Court via Petition for Review on Certiorari under Rule 45 of theRules of Court.Petitioners Carlos Tam and Tycoon Properties, Inc. separately filed their Memorandum20 but raised the same issues to wit:

ITHE HONORABLE COURT OF APPEALS ERRED WHEN IT REFUSED TO HOLD THAT RESPONDENT'S CLAIM OVER THE SUBJECT PROPERTY, WHICH ISBASED ON AN IMPLIED TRUST, HAS ALREADY PRESCRIBED BECAUSE THE ACTION WAS FILED 24 YEARS AFER PETITIONER REPUDIATED THE SAIDTRUST.

IITHE HONORABLE COURT OF APPEALS ERRED WHEN IT FAILED TO RECOGNIZE THAT RESPONDENT'S CLAIM IS ALREADY BARRED BY LACHESBECAUSE HE FAILED TO ASSERT HIS ALLEGED RIGHT FOR ALMOST TWENTY FOUR (24) YEARS.

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IIITHE HONORABLE COURT ERRED IN FAILING TO RECOGNIZE THAT PETITIONERS [CARLOS TAM AND] TYCOON PROPERTIES ARE BUYERS IN GOODFAITH AND FOR VALUE AND HAS THE RIGHT TO RELY ON THE FACE OF THE TITLE.21 In assailing the decisions of the trial and appellate courts, petitioners cite Article 145122 of the Civil Code and claim that an implied or constructive trustwhich prescribes in ten years, was established between Paz Galvez and Porfirio Galvez. It is petitioners’ unflinching stand that the implied trust wasrepudiated when Paz Galvez executed an Affidavit of Self-Adjudication on 4 May 1970, registered the same before the Register of Deeds of La Union on4 June 1970 and secured a new tax declaration in her name. From 4 May 1970 to the time the complaint was filed on 12 May 1994, 24 years havepassed, hence, the action is clearly barred both by prescription and laches.We find the petition bereft of merit.Ostensibly, this case is governed by the rules on co-ownership23 since both Paz Galvez and Porfirio Galvez are obviously co-owners of the disputedproperty having inherited the same from a common ancestor. Article 494 of the Civil Code provides that "[a] prescription shall not run in favor of a co-owner or co-heir against his co-owners or co-heirs as long as he expressly or impliedly recognizes the co-ownership."It is a fundamental principle that a co-owner cannot acquire by prescription the share of the other co-owners, absent any clear repudiation of the co-ownership.24 In Santos v. Santos,25 citing the earlier case of Adille v. Court of Appeals,26 this Court found occasion to rule that:Prescription, as a mode of terminating a relation of co-ownership, must have been preceded by repudiation (of the co-ownership). The act of repudiation, in turn, is subject to certain conditions: (1) a co-owner repudiates the co-ownership; (2) such an act of repudiation is clearly made knownto the other co-owners; (3) the evidence thereon is clear and conclusive; and (4) he has been in possession through open, continuous, exclusive, andnotorious possession of the property for the period required by law.For title to prescribe in favor of a co-owner there must be a clear showing that he has repudiated the claims of the other co-owners and the latter hasbeen categorically advised of the exclusive claim he is making to the property in question. The rule requires a clear repudiation of the co-ownership dulycommunicated to the other co-owners.27 It is only when such unequivocal notice has been given that the period of prescription will begin to run againstthe other co-owners and ultimately divest them of their own title if they do not seasonably defend it.28 To sustain a plea of prescription, it must always clearly appear that one who was originally a joint owner has repudiated the claims of his co-owners,and that his co-owners were apprised or should have been apprised of his claim of adverse and exclusive ownership before the alleged prescriptiveperiod began to run.29 In Salvador v. Court of Appeals,30 it was held that the possession of a co-owner is like that of a trustee and shall not be regarded as adverse to theother co-owner but in fact beneficial to all of them.

The case of Huang v. Court of Appeals

31

is instructive on the creation of trust relationships.Trust is a fiduciary relationship with respect to property which involves the existence of equitable duties imposed upon the holder of the title to theproperty to deal with it for the benefit of another. A person who establishes a trust is called the trustor; one in whom confidence is reposed as regardsproperty for the benefit of another person is known as the trustee; and the person for whose benefit the trust has been created is referred to as thebeneficiary or cestui que trust. Trust is either express or implied. Express trust is created by the intention of the trustor or of the part ies. Implied trustcomes into being by operation of law. The latter kind is either constructive or resulting trust. A constructive trust is imposed where a person holding titleto property is subject to an equitable duty to convey it to another on the ground that he would be unjustly enriched if he were permitted to retain it.The duty to convey the property arises because it was acquired through fraud, duress, undue influence or mistake, or through breach of a fiduciaryduty, or through the wrongful disposition of another’s property. On the other hand, a resulting trust arises where a person makes or causes to be madea disposition of property under circumstances which raise an inference that he does not intend that the person taking or holding the property shouldhave the beneficial interest in the property. It is founded on the presumed intention of the parties, and as a general rule, it arises where, and onlywhere such may be reasonably presumed to be the intention of the parties, as determined from the facts and circumstances existing at the time of thetransaction out of which it is sought to be established.

Acts which may be considered adverse to strangers may not be considered adverse insofar as co-owners are concerned. Thus, Salvador v. Court of Appeals reiterated what acts constitute proof of exclusive ownership amounting to repudiation, emphasizing that the act must be borne out of clear andconvincing evidence of acts of possession which unequivocably amounts to an ouster or deprivation of the right of the other co-owner. The case of

Pangan v. Court of Appeals32

enumerated the following as constituting acts of repudiation:Filing by a trustee of an action in court against the trustor to quiet title to property, or for recovery of ownership thereof, held in possession by theformer, may constitute an act of repudiation of the trust reposed on him by the latter.The issuance of the certificate of title would constitute an open and clear repudiation of any trust, and the lapse of more than 20 years, open andadverse possession as owner would certainly suffice to vest title by prescription.

An action for the reconveyance of land based on implied or constructive trust prescribes within 10 years. And it is from the date of the issuance of suchtitle that the effective assertion of adverse title for purposes of the statute of limitation is counted.The prescriptive period may only be counted from the time petitioners repudiated the trust relation in 1955 upon the filing of the complaint for recoveryof possession against private respondents so that the counterclaim of the private respondents contained in their amended answer wherein they assertedabsolute ownership of the disputed realty by reason of the continuous and adverse possession of the same is well within the 10-year prescriptive periodThere is clear repudiation of a trust when one who is an apparent administrator of property causes the cancellation of the title thereto in the name of the apparent beneficiaries and gets a new certificate of title in his own name.It is only when the defendants, alleged co-owners of the property in question, executed a deed of partition and on the strength thereof obtained thecancellation of the title in the name of their predecessor and the issuance of a new one wherein they appear as the new owners of a definite area each,thereby in effect denying or repudiating the ownership of one of the plaintiffs over his alleged share in the entire lot, that the statute of limitationsstarted to run for the purposes of the action instituted by the latter seeking a declaration of the existence of the co-ownership and of their rights

thereunder.In this case, we find that Paz Galvez effected no clear and evident repudiation of the co-ownership. The execution of the affidavit of self-adjudicationdoes not constitute such sufficient act of repudiation as contemplated under the law as to effectively exclude Porfirio Galvez from the property. ThisCourt has repeatedly expressed its disapproval over the obvious bad faith of a co-heir feigning sole ownership of the property to the exclusion of theother heirs essentially stating that one who acts in bad faith should not be permitted to profit from i t to the detriment of others. In the cases of

Adille33 and Pangan34 where, as in this case, a co-heir was excluded from his legal share by the other co-heir who represented himself as the only heir,this Court held that the act of exclusion does not constitute repudiation.On the issue of prescription, while admittedly prescription operates as a bar to recovery of property, the ten-year period commenced to run from date oregistration. In this case, Carlos Tam obtained his title to the property on 21 January 1994. Since the complaint of Porfirio Galvez was filed on 12 May1994, the same was well within the ten-year period to file the action.On the matter of laches, it is hornbook doctrine that laches is a creation of equity and its application is controlled by equitable considerations. Lachescannot be used to defeat justice or perpetrate fraud and injustice.35 Neither should its application be used to prevent the rightful owners of a propertyfrom recovering what has been fraudulently registered in the name of another.36 The equitable remedy of laches is, therefore, unavailing in this case.Finally, petitioners claim that if the sale would be nullified, the nullification should extend only to the one-half share of Porfirio Galvez37 but not to theshare of Paz Galvez, who, by her overt act of selling the property, manifested her intention to dispose of her part.







































































Notably, Porfirio Galvez’s complaint was captioned "legal redemption with damages, cancellation of documents and reconveyance of share."38 In hisprayer, he sought for the reconveyance of his one-half share in the property and at the same time be subrogated to the other half pertaining to PazGalvez and sold to Carlos Tam after reimbursement of the amount which the latter paid for the property.The pertinent provisions of the Civil Code on legal redemption are as follows:

ART. 1619. Legal redemption is the right to be subrogated, upon the same terms and conditions stipulated in the contract, in the place of one whoacquires a thing by purchase or dation in payment, or by any other transaction whereby ownership is transmitted by onerous title.

ART. 1620. A co-owner of a thing may exercise the right of redemption in case the shares of all the other co-owners or of any of them, are sold to athird person. If the price of the alienation is grossly excessive, the redemptioner shall pay only a reasonable one.Should two or more co-owners desire to exerc ise the right of redemption, they may only do so in proportion to the share they may respectively have inthe thing owned in common.In the case of Hermoso v. Court of Appeals,39 this Court, in interpreting the provision of the law on legal redemption, held:The purpose of Article 1067 (of the old Civil Code, now Article 1088 of the present Civil Code) is to keep strangers to the family out of a joint ownershipif, as is often the case, the presence of outsiders be undesirable and the other heir or heirs be willing and in a position to repurchase the share sold (DeJesus vs. Manlapus, 81 Phil. 144). While there should be no question that an heir may dispose his right before partition (Rivero vs. Serrano [CA] 46 O.G642; Wenceslao vs. Calimon, 46 Phil. 906; Hernaez vs. Hernaez, 32 Phil. 214), a co-heir would have had to pay only the price for which the vendeeacquired it (Hernaez vs. Hernaez, Ibid.).It is a one-way street. It is always in favor of the redemptioner since he can compel the vendee to sell to him but he cannot be compelled by thevendee to buy the alienated property.In another case, 40 this Court reiterated that:Legal redemption is in the nature of a privilege created by law partly for reasons of public policy and partly for the benefit and convenience of theredemptioner, to afford him a way out of what might be a disagreeable or [an] inconvenient association into which he has been thrust. (10 Manresa,4th Ed., 317.) It is intended to minimize co-ownership. The law grants a co-owner the exercise of the said right of redemption when the shares of theother owners are sold to a "third person."The rule on redemption is liberally construed in favor of the original owner of the property and the policy of the law is to aid rather than defeat him inthe exercise of his right of redemption.41 Thus, petitioners cannot be accommodated in this respect and we agree with the trial court when it held:The provision of Art. 1088 of the Civil Code of the Philippines is very clear on the matter.

Art. 1088, provides: "Should any of the heirs sell his hereditary rights to a stranger before the partition, any or all the co-heirs may be subrogated to therights of the purchaser by reimbursing him for the price of the sale, provided they do so within the period of one (1) month from the time they werenotified in writing of the sale by the vendor."There was no written notice sent to Porfirio Galvez by Paz Galvez when she sold her share over the land to Carlos Tam. Porfirio Galvez only discoveredon May 12, 1994 that the land was sold to Carlos Tam. Art. 1620, Civil Code of the Philippines, provides:

Art. 1620. "A co-owner of a thing may exercise the right of redemption in case the share of all the other co-owners or any of them are sold to a thirdperson. If the price of the alienation is grossly excessive, the redemptioner shall pay only a reasonable one."No written notice of the sale was given by Paz Galvez (vendor) to Porfirio Galvez, the co-owner as required under Art. 1623 of the Civil Code. Thewritten notice is mandatory. Hence, the right to redeem commenced when plaintiff sought to exercise it by instituting the complaint in the instant caseon June 12, 1994. The complaint of legal redemption may be filed even several years after the consummation of sale (Zosima Verdad vs. Court of

Appeals, et al.; G.R. No. 10972, April 29, 1996).42 As to petitioners Carlos Tam and Tycoon Properties, Inc.’s claim that they are buyers in good faith, same fails to persuade. A purchaser in good faith and for value is one who buys the property without notice that some other person has a right to or interest in such propertyand pays its fair price before he has notice of the adverse claims and interest of another person in the same property. So it is that the "honesty of intention" which constitutes good faith implies a freedom from knowledge of circumstances which ought to put a person on inquiry.43 Suffice it to state that both the trial and appellate courts found otherwise as "Tam did not exert efforts to determine the previous ownership of the

property in question"44

and relied only on the tax declarations in the name of Paz Galvez.45

It must be noted that Carlos Tam received a copy of thesummons and the complaint on 22 September 1994. This notwithstanding, he sold the property to Tycoon Properties, Inc. on 27 September 1994.Significantly, Carlos Tam is also an owner of Tycoon Properties, Inc. to the extent of 45%.46 A notice of lis pendens dated 8 July 1997 filed with theRegistry of Deeds of the Province of La Union was inscribed on TCT No. T- 40390.47 Despite the inscription, Tycoon Properties, Inc. mortgaged the landto Far East Bank and Trust Company for the sum ofP11,172,600.48 All these attendant circumstances negate petitioners’ claim of good faith. Wherefore, premises considered, the decision of the Court of Appeals dated 28 August 2002 and its Resolution dated 14 April 2003 are Affirmed. Costsagainst petitioners.SO ORDERED.G.R. No. L-44546 January 29, 1988RUSTICO ADILLE, petitioner,vs.THE HONORABLE COURT OF APPEALS, EMETERIA ASEJO, TEODORICA ASEJO, DOMINGO ASEJO, JOSEFA ASEJO and SANTIAGO ASEJO, respondents.

SARMIENTO, J.: In issue herein are property and property rights, a familiar subject of controversy and a wellspring of enormous conflict that has led not only to

protracted legal entanglements but to even more bitter consequences, like strained relationships and even the forfeiture of lives. It is a question thatlikewise reflects a tragic commentary on prevailing social and cultural values and institutions, where, as one observer notes, wealth and its accumulationare the basis of self-fulfillment and where property is held as sacred as life itself. "It is in the defense of his property," says this modern thinker, thatone "will mobilize his deepest protective devices, and anybody that threatens his possessions will arouse his most passionate enmity." 1 The task of this Court, however, is not to judge the wisdom of values; the burden of reconstructing the social order is shouldered by the politicalleadership-and the people themselves.The parties have come to this Court for relief and accordingly, our responsibility is to give them that relief pursuant to the decree of law.The antecedent facts are quoted from the decision 2 appealed from:

xxx xxx xxx... [T]he land in question Lot 14694 of Cadastral Survey of Albay located in Legaspi City with an area of some 11,325 sq. m.originally belonged to one Felisa Alzul as her own private property; she married twice in her lifetime; the first, with one Bernabe

Adille, with whom she had as an only child, herein defendant Rustico Adille; in her second marriage with one Procopio Asejo, herchildren were herein plaintiffs, — now, sometime in 1939, said Felisa sold the property in pacto de retro to certain 3rd persons,period of repurchase being 3 years, but she died in 1942 without being able to redeem and after her death, but during the period ofredemption, herein defendant repurchased, by himself alone, and after that, he executed a deed of extra-judicial partition















































representing himself to be the only heir and child of his mother Felisa with the consequence that he was able to secure title in hisname alone also, so that OCT. No. 21137 in the name of his mother was transferred to his name, that was in 1955; that was whyafter some efforts of compromise had failed, his half-brothers and sisters, herein plaintiffs, filed present case for partition withaccounting on the position that he was only a trustee on an implied trust when he redeemed,-and this is the evidence, but as it alsoturned out that one of plaintiffs, Emeteria Asejo was occupying a portion, defendant counterclaimed for her to vacate that, — Well then, after hearing the evidence, trial Judge sustained defendant in his position that he was and became absolute owner, hewas not a trustee, and therefore, dismissed case and also condemned plaintiff occupant, Emeteria to vacate; it is because of thisthat plaintiffs have come here and contend that trial court erred in:I. ... declaring the defendant absolute owner of the property;II. ... not ordering the partition of the property; andIII. ... ordering one of the plaintiffs who is in possession of the portion of the property to vacate the land, p. 1 Appellant's brief.which can be reduced to simple question of whether or not on the basis of evidence and law, judgment appealed from should be maintained. 3 xxx xxx xxxThe respondent Court of appeals reversed the trial Court, 4 and ruled for the plaintiffs-appellants, the private respondents herein. The petitioner nowappeals, by way of certiorari, from the Court's decision.We required the private respondents to file a comment and thereafter, having given due course to the petition, directed the parties to file their briefs.Only the petitioner, however, filed a brief, and the private respondents having failed to file one, we declared the case submitted for decision.The petition raises a purely legal issue: May a co-owner acquire exclusive ownership over the property held in common?Essentially, it is the petitioner's contention that the property subject of dispute devolved upon him upon the failure of his co-heirs to join him in itsredemption within the period required by law. He relies on the provisions of Article 1515 of the old Civil Article 1613 of the present Code, giving thevendee a retro the right to demand redemption of the entire property.There is no merit in this petition.The right of repurchase may be exercised by a co-owner with aspect to his share alone. 5 While the records show that the petitioner redeemed theproperty in its entirety, shouldering the expenses therefor, that did not make him the owner of all of it. In other words, it did not put to end the existingstate of co-ownership.Necessary expenses may be incurred by one co-owner, subject to his right to collect reimbursement from the remaining co-owners. 6 There is no doubtthat redemption of property entails a necessary expense. Under the Civil Code:

ART. 488. Each co-owner shall have a right to compel the other co-owners to contribute to the expenses of preservation of thething or right owned in common and to the taxes. Any one of the latter may exempt himself from this obligation by renouncing somuch of his undivided interest as may be equivalent to his share of the expenses and taxes. No such waiver shall be made if it isprejudicial to the co-ownership.The result is that the property remains to be in a condition of co-ownership. While a vendee a retro , under Article 1613 of the Code, "may not becompelled to consent to a partial redemption," the redemption by one co-heir or co-owner of the property in its totality does not vest in him ownershipover it. Failure on the part of all the co-owners to redeem it entitles the vendee a retro to retain the property and consolidate title thereto in hisname. 7But the provision does not give to the redeeming co-owner the right to the entire property. It does not provide for a mode of terminating a co-ownership.Neither does the fact that the petitioner had succeeded in securing title over the parcel in his name terminate the existing co-ownership. While his half-brothers and sisters are, as we said, liable to him for reimbursement as and for their shares in redemption expenses, he cannot claim exclusive right tothe property owned in common. Registration of property is not a means of acquiring ownership. It operates as a mere notice of existing title, that is, if there is one.The petitioner must then be said to be a trustee of the property on behalf of the private respondents. The Civil Code states:

ART. 1456. If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of animplied trust for the benefit of the person from whom the property comes.

We agree with the respondent Court of Appeals that fraud attended the registration of the property. The petitioner's pretension that he was the soleheir to the land in the affidavit of extrajudicial settlement he executed preliminary to the registration thereof betrays a clear effort on his part to defraudhis brothers and sisters and to exercise sole dominion over the property. The aforequoted provision therefore applies.It is the view of the respondent Court that the petitioner, in taking over the property, did so either on behalf of his co-heirs, in which event, he hadconstituted himself a negotiorum gestor under Article 2144 of the Civil Code, or for his exclusive benefit, in which case, he is guilty of fraud, and mustact as trustee, the private respondents being the beneficiaries, under the Article 1456. The evidence, of course, points to the second alternative thepetitioner having asserted claims of exclusive ownership over the property and having acted in fraud of his co-heirs. He cannot therefore be said to haveassume the mere management of the property abandoned by his co-heirs, the situation Article 2144 of the Code contemplates. In any case, as therespondent Court itself affirms, the result would be the same whether it is one or the other. The petitioner would remain liable to the Privaterespondents, his co-heirs.This Court is not unaware of the well-established principle that prescription bars any demand on property (owned in common) held by another (co-owner) following the required number of years. In that event, the party in possession acquires title to the property and the state of co-ownership isended . 8 In the case at bar, the property was registered in 1955 by the petitioner, solely in his name, while the claim of the private respondents waspresented in 1974. Has prescription then, set in?We hold in the negative. Prescription, as a mode of terminating a relation of co-ownership, must have been preceded by repudiation (of the co-ownership). The act of repudiation, in turn is subject to certain conditions: (1) a co-owner repudiates the co-ownership; (2) such an act of repudiation is

clearly made known to the other co-owners; (3) the evidence thereon is clear and conclusive, and (4) he has been in possession through open,continuous, exclusive, and notorious possession of the property for the period required by law. 9 The instant case shows that the petitioner had not complied with these requisites. We are not convinced that he had repudiated the co-ownership; onthe contrary, he had deliberately kept the private respondents in the dark by feigning sole heirship over the estate under dispute. He cannot thereforebe said to have "made known" his efforts to deny the co-ownership. Moreover, one of the private respondents, Emeteria Asejo, is occupying a portion othe land up to the present, yet, the petitioner has not taken pains to eject her therefrom. As a matter of fact, he sought to recover possession of thatportion Emeteria is occupying only as a counterclaim, and only after the private respondents had first sought judicial relief.It is true that registration under the Torrens system is constructive notice of title, 10 but it has likewise been our holding that the Torrens title does notfurnish a shield for fraud. 11 It is therefore no argument to say that the act of registration is equivalent to notice of repudiation, assuming there wasone, notwithstanding the long-standing rule that registration operates as a universal notice of title.For the same reason, we cannot dismiss the private respondents' claims commenced in 1974 over the estate registered in 1955. While actions toenforce a constructive trust prescribes in ten years, 12 reckoned from the date of the registration of the property, 13 we, as we said, are not prepared tocount the period from such a date in this case. We note the petitioner's sub rosa efforts to get hold of the property exclusively for himself beginningwith his fraudulent misrepresentation in his unilateral affidavit of extrajudicial settlement that he is "the only heir and child of his mother Feliza with theconsequence that he was able to secure title in his name also." 14 Accordingly, we hold that the right of the private respondents commenced from the



time they actually discovered the petitioner's act of defraudation. 15 According to the respondent Court of Appeals, they "came to know [of it]apparently only during the progress of the litigation." 16 Hence, prescription is not a bar.Moreover, and as a rule, prescription is an affirmative defense that must be pleaded either in a motion to dismiss or in the answer otherwise it isdeemed waived, 17 and here, the petitioner never raised that defense. 18 There are recognized exceptions to this rule, but the petitioner has not shownwhy they apply.WHEREFORE, there being no reversible error committed by the respondent Court of Appeals, the petition is DENIED. The Decision sought to bereviewed is hereby AFFIRMED in toto. No pronouncement as to costs.SO ORDERED,G.R. No. 161916 January 20, 2006 ARNELITO ADLAWAN, Petitioner,vs.EMETERIO M. ADLAWAN and NARCISA M. ADLAWAN, Respondents.

D E C I S I O N YNARES-SANTIAGO, J.: Assailed in this petition for review is the September 23, 2003 Decision1 of the Court of Appeals in CA-G.R. SP No. 74921 which set aside the September13, 2002 Decision2 of the Regional Trial Court (RTC) of Cebu City, Branch 7, in Civil Case No. CEB-27806, and reinstated the February 12, 2002Judgment3 of the Municipal Trial Court (MTC) of Minglanilla, Metro Cebu, in Civil Case No. 392, dismissing petitioner Arnelito Adlawan’ s unlawful detainesuit against respondents Emeterio and Narcisa Adlawan. Likewise questioned is the January 8, 2004 Resolution4of the Court of Appeals which deniedpetitioner’s motion for reconsideration. The instant ejectment suit stemmed from the parties’ dispute over Lot 7226 and the house built thereon, covered by Transfer Certificate of Title No.8842,5 registered in the name of the late Dominador Adlawan and located at Barrio Lipata, Municipality of Minglanilla, Cebu. In his complaint, petitionerclaimed that he is an acknowledged illegitimate child6 of Dominador who died on May 28, 1987 without any other issue. Claiming to be the sole heir of Dominador, he executed an affidavit adjudicating to himself Lot 7226 and the house built thereon.7 Out of respect and generosity to respondents whoare the siblings of his father, he granted their plea to occupy the subject property provided they would vacate the same should his need for the propertyarise. Sometime in January 1999, he verbally requested respondents to vacate the house and lot, but they refused and filed instead an action forquieting of title8 with the RTC. Finally, upon respondents’ refusal to heed the last demand letter to vacate dated August 2, 2000, petitioner filed the

instant case on August 9, 2000.

9

On the other hand, respondents Narcisa and Emeterio, 70 and 59 years of age, respectively,10 denied that they begged petitioner to allow them to stayon the questioned property and stressed that they have been occupying Lot 7226 and the house standing thereon since birth. They alleged that Lot7226 was originally registered in the name of their deceased father, Ramon Adlawan11 and the ancestral house standing thereon was owned by Ramonand their mother, Oligia Mañacap Adlawan. The spouses had nine12 children including the late Dominador and herein surviving respondents Emeterioand Narcisa. During the lifetime of their parents and deceased siblings, all of them lived on the said property. Dominador and his wife, Graciana Ramas

Adlawan, who died without issue, also occupied the same.13 Petitioner, on the other hand, is a stranger who never had possession of Lot 7226.Sometime in 1961, spouses Ramon and Oligia needed money to finance the renovation of their house. Since they were not qualified to obtain a loan,they transferred ownership of Lot 7226 in the name of their son Dominador who was the only one in the family who had a college education. By virtueof a January 31, 1962 simulated deed of sale,14 a title was issued to Dominador which enabled him to secure a loan with Lot 7226 as collateral.Notwithstanding the execution of the simulated deed, Dominador, then single, never disputed his parents’ ownership of the lot. He and his wife,Graciana, did not disturb respondents’ possession of the property until they died on May 28, 1987 and May 6, 1997, respectively.Respondents also contended that Dominador’s signature at the back of petitioner’s birth certificate was forged, hence, the latter is not an heir of Dominador and has no right to claim ownership of Lot 7226.15 They argued that even if petitioner is indeed Dominador’s acknowledged illegitimate son,his right to succeed is doubtful because Dominador was survived by his wife, Graciana.16 On February 12, 2002, the MTC dismissed the complaint holding that the establishment of petitioner’s filiation and the settlement of the estate of

Dominador are conditions precedent to the accrual of petitioner’s action for ejectment. It added that since Dominador was survived by his wife,Graciana, who died 10 years thereafter, her legal heirs are also entitled to their share in Lot 7226. The dispositive portion thereof, reads:In View of the foregoing, for failure to prove by preponderance of evidence, the plaintiff’s cause of action, the above-entitled case is hereby OrderedDISMISSED.SO ORDERED.17 On appeal by petitioner, the RTC reversed the decision of the MTC holding that the title of Dominador over Lot 7226 cannot be collaterally attacked. Itthus ordered respondents to turn over possession of the controverted lot to petitioner and to pay compensation for the use and occupation of thepremises. The decretal portion thereof, provides:Wherefore, the Judgment, dated February 12, 2002, of the Municipal Trial Court of Minglanilla, Cebu, in Civil Case No. 392, is reversed. Defendants-appellees are directed to restore to plaintiff-appellant possession of Lot 7226 and the house thereon, and to pay plaintiff-appellant, beginning in August2000, compensation for their use and occupation of the property in the amount of P500.00 a month.So ordered.18 Meanwhile, the RTC granted petitioner’s motion for execution pending appeal19 which was opposed by the alleged nephew and nieces of Graciana intheir motion for leave to intervene and to file an answer in intervention.20 They contended that as heirs of Graciana, they have a share in Lot 7226 andthat intervention is necessary to protect their right over the property. In addition, they declared that as co-owners of the property, they are allowingrespondents to stay in Lot 7226 until a formal partition of the property is made.

The RTC denied the motion for leave to intervene.21 It, however, recalled the order granting the execution pending appeal having lost jurisdiction overthe case in view of the petition filed by respondents with the Court of Appeals.22 On September 23, 2003, the Court of Appeals set aside the decision of the RTC and reinstated the judgment of the MTC. It ratiocinated that petitionerand the heirs of Graciana are co-owners of Lot 7226. As such, petitioner cannot eject respondents from the property via an unlawful detainer suit filedin his own name and as the sole owner of the property. Thus – WHEEFORE, premises considered, the appealed Decision dated September 13, 2002 of the Regional Trial Court of Cebu City, Branch 7, in Civil Case No.CEB-27806 is REVERSED and SET ASIDE, and the Judgment dated February 12, 2002 of the Municipal Trial Court of Minglanilla, Metro Cebu, in CivilCase No. 392 is REINSTATED. Costs against the respondent.SO ORDERED.23 Petitioner’s motion for reconsideration was denied. Hence, the instant petition.The decisive issue to be resolved is whether or not petitioner can validly maintain the instant case for ejectment.Petitioner averred that he is an acknowledged illegitimate son and the sole heir of Dominador. He in fact executed an affidavit adjudicating to himself the controverted property. In ruling for the petitioner, the RTC held that the questioned January 31, 1962 deed of sale validly transferred title toDominador and that petitioner is his acknowledged illegitimate son who inherited ownership of the questioned lot. The Court notes, however, that theRTC lost sight of the fact that the theory of succession invoked by petitioner would end up proving that he is not the sole owner of Lot 7226. This is so

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because Dominador was survived not only by petitioner but also by his legal wife, Graciana, who died 10 years after the demise of Dominador on May28, 1987.24 By intestate succession, Graciana and petitioner became co-owners of Lot 7226.25 The death of Graciana on May 6, 1997, did not makepetitioner the absolute owner of Lot 7226 because the share of Graciana passed to her relatives by consanguinity and not to petitioner with whom shehad no blood relations. The Court of Appeals thus correctly held that petitioner has no authority to institute the instant action as the sole owner of Lot7226.Petitioner contends that even granting that he has co-owners over Lot 7226, he can on his own file the instant case pursuant to Article 487 of the CivilCode which provides:

ART. 487. Any one of the co-owners may bring an action in ejectment.This article covers all kinds of actions for the recovery of possession. Article 487 includes forcible entry and unlawful detainer (accion interdictal ),recovery of possession (accion publiciana) , and recovery of ownership (accion de reivindicacion ).26 A co-owner may bring such an action without thenecessity of joining all the other co-owners as co-plaintiffs because the suit is presumed to have been filed to benefit his co-owners. It should bestressed, however, that where the suit is for the benefit of the plaintiff alone who claims to be the sole owner and entitled to the possession of thelitigated property, the action should be dismissed.27 The renowned civilist, Professor Arturo M. Tolentino, explained –

A co-owner may bring such an action, without the necessity of joining all the other co-owners as co-plaintiffs, because the suit is deemed to beinstituted for the benefit of all. If the action is for the benefit of the plaintiff alone, such that he claims possession for himself and not forthe co-ownership, the action will not prosper. (Emphasis added)28 In Baloloy v. Hular ,29 respondent filed a complaint for quieting of title claiming exclusive ownership of the property, but the evidence showed thatrespondent has co-owners over the property. In dismissing the complaint for want of respondent’s authority to file the case, the Court held that – Under Article 487 of the New Civil Code, any of the co-owners may bring an action in ejectment. This article covers all kinds of actions for the recoveryof possession, including an accion publiciana and a reinvidicatory action. A co-owner may bring such an action without the necessity of joining all theother 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 co-owner wilbenefit the others but if such judgment is adverse, the same cannot prejudice the rights of the unimpleaded co-owners. If the action is for the benefit othe plaintiff alone who claims to be the sole owner and entitled to the possession thereof, the action will not prosper unless he impleads the other co-owners who are indispensable parties.In this case, the respondent alone filed the complaint, claiming sole ownership over the subject property and praying that he be declared the sole ownethereof. There is no proof that the other co-owners had waived their rights over the subject property or conveyed the same to the respondent or such

co-owners were aware of the case in the trial court. The trial court rendered judgment declaring the respondent as the sole owner of the property andentitled to its possession, to the prejudice of the latter’s siblings. Patently then, the decision of the trial court is erroneous. Under Section 7, Rule 3 of the Rules of Court, the respondent was mandated to implead his siblings, being co-owners of the property, as parties. Therespondent failed to comply with the rule. It must, likewise, be stressed that the Republic of the Philippines is also an indispensable party as defendantbecause the respondent sought the nullification of OCT No. P-16540 which was issued based on Free Patent No. 384019. Unless the State is impleadedas party-defendant, any decision of the Court would not be binding on it. It has been held that the absence of an indispensable party in a case rendersineffective all the proceedings subsequent to the filing of the complaint including the judgment. The absence of the respondent’s siblings, as parties,rendered all proceedings subsequent to the filing thereof, including the judgment of the court, ineffective for want of authority to act, not only as to theabsent parties but even as to those present.30 In the instant case, it is not disputed that petitioner brought the suit for unlawful detainer in his name alone and for his own benefit to the exclusion of the heirs of Graciana as he even executed an affidavit of self- adjudication over the disputed property. It is clear therefore that petitioner cannot validlymaintain the instant action considering that he does not recognize the co-ownership that necessarily flows from his theory of succession to the propertyof his father, Dominador.In the same vein, there is no merit in petitioner’s claim that he has the legal personality to file the present unlawful detainer suit because the ejectmentof respondents would benefit not only him but also his alleged co-owners. However, petitioner forgets that he filed the instant case to acquirepossession of the property and to recover damages. If granted, he alone will gain possession of the lot and benefit from the proceeds of the award of

damages to the exclusion of the heirs of Graciana. Hence, petitioner cannot successfully capitalize on the alleged benefit to his co-owners. Incidentally,it should be pointed out that in default of the said heirs of Graciana, whom petitioner labeled as "fictitious heirs," the State will inherit her share31 andwill thus be petitioner’s co-owner entitled to possession and enjoyment of the property.The present controversy should be differentiated from the cases where the Court upheld the right of a co-owner to file a suit pursuant to Article 487 of the Civil Code. In Resuena v. Court of Appeals ,32 and Sering v. Plazo ,33 the co-owners who filed the ejectment case did not represent themselves as theexclusive owner of the property. InCelino v. Heirs of Alejo and Teresa Santiago ,34 the complaint for quieting of title was brought in behalf of the co-owners precisely to recover lots owned in common.35 Similarly in Vencilao v. Camarenta ,36 the amended complaint specified that the plaintiff is one of the heirs who co-owns the controverted properties.In the foregoing cases, the plaintiff never disputed the existence of a co-ownership nor claimed to be the sole or exc lusive owner of the litigated lot. Afavorable decision therein would of course inure to the benefit not only of the plaintiff but to his co-owners as well. The instant case, however, presentsan entirely different backdrop as petitioner vigorously asserted absolute and sole ownership of the questioned lot. In his complaint, petitioner made thefollowing allegations, to wit:3. The plaintiff was the only son (illegitimate) and sole heir of the late DOMINADOR ADLAWAN who died intestate on 28 May 1987 without any otherdescendant nor ascendant x x x.

x x x x5. Being the only child/descendant and, therefore, sole heir of the deceased Dominador Adlawan, the plaintiff became the absolute owner, and

automatically took POSSESSION, of the aforementioned house and lot x x x. (Emphasis added)37 Clearly, the said cases find no application here because petitioner’s action operates as a complete repudiation of the existence of co-ownership and notin representation or recognition thereof. Dismissal of the complaint is therefore proper. As noted by Former Supreme Court Associate Justice Edgrado L.Paras "[i]t is understood, of course, that the action [under Article 487 of the Civil Code] is being instituted for all. Hence, if the co-owner expresslystates that he is bringing the case only for himself, the action should not be allowed to prosper."38 Indeed, respondents’ not less than four decade actual physical possession of the questioned ancestral house and lot deserves to be respected especiallyso that petitioner failed to show that he has the requisite personality and authority as co-owner to file the instant case. Justice dictates that respondentswho are now in the twilight years of their life be granted possession of their ancestral property where their parents and siblings lived during theirlifetime, and where they, will probably spend the remaining days of their life.WHEREFORE, the petition is DENIED. The September 23, 2003 Decision of the Court of Appeals in CA-G.R. SP No. 74921 which reinstated theFebruary 12, 2002 Judgment of the Municipal Trial Court of Minglanilla, Metro Cebu, dismissing petitioner’s complaint in Civil Case No. 392, and itsJanuary 8, 2004 Resolution, are AFFIRMED.SO ORDERED.G.R. No. 155810 August 13, 2004































































LYDIA SUMIPAT, LAURITO SUMIPAT, ALEJANDRO SUMIPAT, ALICIA SUMIPAT, and LIRAFE SUMIPAT,petitioners,vs.BRIGIDO BANGA, HERMINIGILDO TABOTABO, VIVIANO TABOTABO, BERNARDITA ANIÑON, and LEONIDA TABOTABO, respondents.

D E C I S I O N

TINGA, J.: This is a Petition for Review on Certiorar i 1 of the Decisio n 2 of the Court of Appeals which reversed and set aside the decision3 of the Regional Trial Court(RTC) and partially annulled the Deed of Absolute Transfer and/or Quitclaim (the deed) subject of this case.We quote the appellate court’s findings of fact:

The spouses Placida Tabo-tabo and Lauro Sumipat, who contracted marriage on July 20, 1939, acquired three parcels of land two of whichwere covered by Original Certificate of Title No. P-17842 and Transfer Certificate of Title No. T-15826.The couple was childless.Lauro Sumipat, however, sired five illegitimate children out of an extra-marital affair with Pedra Dacola, namely: herein defendants-appelleesLydia, Laurito, Alicia, Alejandro and Lirafe, all surnamed Sumipat.On January 5, 1983, Lauro Sumipat executed a document denominated "DEED OF ABSOLUTE TRANSFER AND/OR QUIT-CLAIM OVER REALPROPERTIES" (the assailed document) in favor of defendants-appellees covering the three parcels of land (the properties). On the documentappears the signature of his wife Placida which indicates that she gave her marital consent thereto.It appears that on January 5, 1983 when the assailed document was executed, Lauro Sumipat was already very sick and bedridden; that upondefendant-appellee Lydia’s request, their neighbor Benjamin Rivera lifted the body of Lauro Sumipat whereupon Lydia guided his (LauroSumipat’s) hand in affixing his signature on the assailed document which she had brought; that Lydia thereafter left but later returned on thesame day and requested Lauro’s unlettered wife Placida to sign on the assailed document, as she did in haste, even without the latter gettinga responsive answer to her query on what it was all about.

After Lauro Sumipat’s death on January 30, 1984, his wife Placida, hereinafter referred to as plaintiff-appellant, and defendants-appellees jointly administered the properties 50% of the produce of which went to plaintiff-appellant.

As plaintiff-appellant’s share in the produce of the properties dwindled until she no longer received any and learning that the titles to theproperties in question were already transferred/made in favor of the defendants-appellees, she filed a complaint for declaration of nullity of titles, contracts, partition, recovery of ownership now the subject of the present appeal.Defendant-appellee Lydia disclaims participation in the execution of the assailed document, she claiming to have acquired knowledge of itsexistence only on January 10, 1983 or five days after its execution when Lauro Sumipat gave the same to her.Branch 6 of the Regional Trial Court of Dipolog City decided the case in favor of defendants-appellees, it holding that by virtue of the assaileddocument the due execution of which was not contested by plaintiff-appellant, the properties were absolutely transferred to defendants-appellees.4

The trial court found that the subject properties are conjugal having been acquired during the marriage of Lauro Sumipat and Placida Tabotabo(Placida). However, because Placida failed to question the genuineness and due execution of the deed and even admitted having affixed her signaturethereon, the trial court declared that the entirety of the subject properties, and not just Lauro Sumipat’s conjugal share, were validly transferred to thedefendants, the petitioners herein.5 On appeal,6 the appellate court held that since Placida was unlettered,7 the appellees, the petitioners herein, as the parties interested in enforcing thedeed, have the burden of proving that the terms thereof were fully explained to her.8 This they failed to do.Under the Civil Code, a contract where consent is given through mistake, violence, intimidation, undue influence or fraud is voidable.9 In order thatmistake may invalidate consent, it should refer to the substance of the thing which is the object of the contract, or to those conditions which have

principally moved one or both parties to enter into the contract.10

The appellate court found that Placida did not understand the full import of the deed because the terms thereof were not explained to her either by thepetitioners or by the notary public before whom the deed was acknowledged. According to the appellate court, Judge Pacifico Garcia (Judge Garcia),before whom the deed was acknowledged, did not identify Placida as having appeared before him on January 5, 1983 to acknowledge the deed.The jurat indicates that it was only Lauro Sumipat who appeared before Judge Garcia and to whom he explained the contents of the deed. Further, theappellate court noted that Judge Garcia himself was under the impression that the deed conveyed the exclusive properties of Lauro Sumipat. Hence, hecould not have explained to Placida that the deed actually transferred the conjugal properties of Lauro Sumipat and Placida.11 The Court of Appeals, therefore, annulled the deed insofar as it covers Placida’s conjugal share in the subject properties because the latter’s consentthereto was vitiated by mistake when she affixed her signature on the document.The petitioners filed a Motion for Reconsideration on the grounds of estoppel, absence of fraud and prescription. The appellate court denied the Motion for Reconsideration in its Resolutio n 12 dated October 16, 2002 ruling that the grounds relied upon have been addressed in its Decision dated April 11,2002. Anent the ground of prescription, the appellate court held that since the properties were acquired through fraud or mistake, the petitioners areconsidered trustees of an implied trust for the benefit of Placida. Citing jurisprudence,13 the Court of Appeals ruled that actions based on implied orconstructive trust prescribe 10 years from the issuance of a Torrens Title over the property. Since two (2) of the subject properties were issued TransfeCertificates of Title (TCT) Numbered T-4003714 and T-4003815 under the petitioners’ names on August 18, 1987, the Complaint for declaration of nullityof titles, partition, recovery of ownership and possession, reconveyance, accounting and damages, which was filed on March 3, 1993, was filed well

within the prescriptive period.The petitioners are now before this Court principally claiming that Placida freely consented to the execution of the deed and that they did not commitfraudulent acts in connection with its execution. They also reiterate their argument that the Court of Appeals should have dismissed the case on theground of prescription. It is their contention that the present action being one to annul a contract on the ground of fraud, it should have been filedwithin four (4) years from the discovery of fraud or registration of the instrument with the Registry of Deeds.The respondents filed their Commen t 16 dated February 7, 2003, essentially echoing the findings of the Court of Appeals on the matter of Placida’sconsent. According to them, Placida was deceived and misled into affixing her signature on the deed. They further claim that Placida did not actuallyappear before the notary public to acknowledge the instrument.In their Repl y 17 dated April 29, 2003, the petitioners insist that Placida was not illiterate and that Lauro Sumipat validly transferred the titles over theproperties in question to them. They also argue that if Placida did not understand the import of the deed, she could have questioned Lauro Sumipatabout it since the deed was executed a year before the latter died.The trial court and the Court of Appeals are in agreement that the subject properties are conjugal, having been acquired during the marriage of LauroSumipat and Placida. They came out, however, with disparate denouements. While the trial court upheld the validity of the deed as an instrument of transfer of all the litigated parcels of land in their entirety on the ground that Placida failed to question its authenticity and due execution, the appellatecourt struck the deed down insofar as the conjugal share of Placida is concerned based on its finding that her consent was vitiated by mistake.

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At bottom, the crux of the controversy is whether the questioned deed by its terms or under the surrounding circumstances has validly transferred titleto the disputed properties to the petitioners.

A perusal of the deed reveals that it is actually a gratuitous disposition of property — a donation — although Lauro Sumipat imposed upon thepetitioners the condition that he and his wife, Placida, shall be entitled to one-half (1/2) of all the fruits or produce of the parcels of land for theirsubsistence and support. The preliminary clauses of the deed read:That conscious of my advanced age and failing health, I feel that I am not capable anymore of attending to and maintaining and keeping incontinuous cultivation my above described properties;That my children are all desirous of taking over the task of maintaining my properties and have demonstrated since childhood the neededindustry and hard work as they have in fact established possession over my real properties and introduced more improvements over mylands, the fruit of which through their concerted efforts and labors, I myself and my family have enjoyed;That it would be to the best interest of my above mentioned children that the ownership over my above described properties be transferred intheir names, thereby encouraging them more in developing the lands to its fullest productivity.18 The deed covers three (3) parcels of land.19 Being a donation of immovable property, the requirements for validity set forth in Article 749 of the CivilCode should have been followed, viz:

Art. 749. In order that the donation of the immovable may be valid, it must be made in a public document, specifying therein the propertydonated and the value of the charges which the donee must satisfy.The acceptance may be made in the same deed of donation or in a separate public document, but it shall not take effect unless it is doneduring the lifetime of the donor.If the acceptance is made in a separate instrument, the donor shall be notified thereof in an authentic form, and this step shall be noted inboth instruments.Title to immovable property does not pass from the donor to the donee by virtue of a deed of donation until and unless it has been accepted in a publicinstrument and the donor duly notified thereof. The acceptance may be made in the very same instrument of donation. If the acceptance does notappear in the same document, it must be made in another. Where the deed of donation fails to show the acceptance, or where the formal notice of theacceptance, made in a separate instrument, is either not given to the donor or else not noted in the deed of donation and in the separate acceptance,the donation is null and void.20 In this case, the donees’ acceptance of the donation is not manifested either in the deed itself or in a separate document. Hence, the deed as aninstrument of donation is patently void.

We also note the absence of any proof of filing of the necessary return, payment of donor’s taxes on the transfer, or exemption from payment thereof.Under the National Internal Revenue Code of 1977, the tax code in force at the time of the execution of the deed, an individual who makes any transferby gift shall make a return and file the same within 30 days after the date the gift is made with the Revenue District Officer, Collection Agent or dulyauthorized Treasurer of the municipality in which the donor was domiciled at the time of the transfer.21 The filing of the return and payment of donor’staxes are mandatory. In fact, the registrar of deeds is mandated not to register in the registry of property any document transferring real property byway of gifts inter vivos unless a certification that the taxes fixed and actually due on the transfer had been paid or that the transaction is tax exemptfrom the Commissioner of Internal Revenue, in either case, is presented.22 Neither can we give effect to the deed as a sale, barter or any other onerous conveyance, in the absence of valid cause or consideration and consentcompetently and validly given.23 While it is true that the appellate court found Placida’s consent to have been vitiated by mistake, her testimony on thematter actually makes out a case of total absence of consent, not merely vitiation thereof. She testified in this regard, thus:Q- What have you been doing on that day on January 5, 1983?

A- I was at home boiling water.Q- While you were boiling water in the house, at that time who arrived, if there was any?

A- Lydia Sumipat arrived.Court:-(To the witness)Q- Who is this Lydia Sumipat?

A- The daughter of my husband with his paramour.Q- How old was she? A- I did not know if she was already 30 years old at that time because he was born in 1950. Atty. Legorio:-(To the witness)Q- When you said Lydia Sumipat, you are referring to one of the defendants in this case?

A- Yes, sir. She is the one.Q- This Lydia Sumipat you are referring to as one of the principal defendant and daughter of your husband with his paramour, in January,1983 what was her educational attainment, if you know?

A- She has already finished schooling.Q- Do you know what she obtained?

A- Teacher.Q- You said she arrived in the afternoon of January 5, 1983 in your house while you were boiling water. What did she do when she arrivedthere?

A- She brought with her a paper.Q- What did she say to you?

A- She told me to sign that paper immediately because there is the witness waiting and so I asked from her what was that paper I am going

to sign. I asked her because I am unlettered but she said never mind just sign this immediately.Q- By the way, what is your highest educational attainment? A- I have never gone to school.Q- Do you know how to read or to write?

A- I know how to write only my name.Q- You know how to write your name only?

A- Yes, sir.Q- You said she told you to sign that piece of paper and you asked her what was that and she told you "you just sign that", what did you dothen?

A- She was in a hurry to let me sign that document so I signed it without knowing what was that.Q- Did she tell you that piece of paper was a document wherein the land including your land in Siayan were to be given to them?

A- I did not give my land.24 During cross-examination, Placida again denied any knowledge of the nature of the deed:q You are aware that the titles over these lots had already been transferred in the name of the defendants?a They surreptitiously transferred the title in their names, I do not know about it.































q You mean to say you signed a document transferring them in their names?a There was a piece of paper brought to me to be signed by Lydia; I asked what’s all about but she did not tell me; I was forced to signconsidering that according to her somebody was waiting for it.q What do you mean that you are force to sign?a She told me to sign that paper immediately because there is a witness waiting that paper but she was alone when she came to me.q So you signed that paper?a I signed it because she was in a hurry.q That was done during the lifetime of your husband?a Yes, sir.q And your husband also signed that paper?a I do not know because I have not seen my husband signed, Lydia only came to me to let me sign that paper.q Is it not a fact that you and your husband were brought before the office of Judge Pacifico Garcia of Manukan, and in the office you signedthat document?a I have not gone to the Municipal building of Manukan and I do not know Judge Garcia.q But what you know now that the titles are transferred in the name of the defendants?a It was Lydia who caused the transfer of the titles in their names.q And you know that fact when you signed that paper?a At the time I signed the paper, I do not know yet that the title would be transferred, it was only at the time when I requested my niece tofollow it up because according to them I am no longer entitled to the land.25

In Baranda v. Baranda ,26 this Court declared that the deeds of sale questioned therein are not merely voidable (as intimated by the plaintiffs themselvesin their complaint for annulment of the deeds and reconveyance of the lots) but null and void ab initio as the supposed seller declared under oath thatshe signed the deeds without knowing what they were. The significant circumstance meant, the Court added, that her consent was not merely marredby vices of consent so as to make the contracts voidable, but that she had not given her consent at all.Parenthetically, as Placida’s Complaint is entitled Declaration of Nullity of Titles; Contracts; Partition, Recovery of Ownership and Possession; Reconveyance; Accounting and Damages with Prayer for Preliminary Injunction and Receivership, the validity of the deed was directly assailed, but itsabsolute nullity was not specifically raised as an issue. Nevertheless, both the RTC and the appellate court took the cue from Placida’s theory that thedeed is merely voidable as regards her conjugal share of the properties. However, since the real issue is whether the questioned deed has validly

transferred ownership of the litigated properties, it is appropriate for the Court to inquire into the form of the deed and the existence of valid consentthereto to ascertain the validity or nullity of the deed.From the substantive and procedural standpoints, the objectives to write finis to a protracted litigation and avoid multiplicity of suits are worth pursuingat all times. Conformably, we have ruled in a number of cases that an appellate court is accorded broad discretionary power to consider even errors notassigned. We have applied this tenet, albeit as a matter of exception, in the following instances: (1) grounds not assigned as errors but affecting

jurisdiction over the subject matter; (2) matters not assigned as errors on appeal but are evidently plain or clerical errors within contemplation of law;(3) matters not assigned as errors on appeal but consideration of which is necessary in arriving at a just decision and complete resolution of the case orto serve the interests of justice or to avoid dispensing piecemeal justice; (4) matters not specifically assigned as errors on appeal but raised in the trialcourt and are matters of record having some bearing on the issue submitted which the parties failed to raise or which the lower court ignored; (5)matters not assigned as errors on appeal but closely related to an error assigned; and (6) matters not assigned as errors on appeal but upon which thedetermination of a question properly assigned is dependent.27 In the instant case, the validity of the deed was directly assailed although both parties are of the view that it is not an absolute nullity. The correctcharacterization of the deed is, therefore, determinative of the present controversy. Elsewise framed, the issue of validity or nullity is interwoven withthe positions adopted by the parties and the rulings made by the courts below. Hence, we shall be resolute in striking down the deed especially as itappears on its face to be a patent nullity.Having said this, we shall now proceed to the issue of prescription. Being an absolute nullity, both as a donation and as a sale, the deed is subject to

attack at any time, in accordance with the rule in Article 1410 of the Civil Code that an action to declare the inexistence of a void contract does notprescribe.We are thus unimpressed by the petitioners’ contention that the appellate court should have dismissed Placida’s appeal on the ground of prescription.Passage of time cannot cure the fatal flaw in an inexistent and void contract.28 The defect of inexistence of a contract is permanent and incurable;hence, it cannot be cured either by ratification or by prescription. 29 Turning now to the effects of the absolute nullity of the deed, it is well-settled that when there is a showing of illegality, the property registered isdeemed to be simply held in trust for the real owner by the person in whose name it is registered, and the former then has the right to sue for thereconveyance of the property. The action for the purpose is also imprescriptible. As long as the land wrongfully registered under the Torrens system isstill in the name of the person who caused such registration, an action in personam will lie to compel him to reconvey the property to the real owner.30 One final note. After this Decision shall have become final and executory, the parties may either extrajudicially divide the estates of Lauro Sumipat andPlacida Tabotabo pursuant to Rule 74 of the Rules of Court or judicially settle the estates pursuant to Rules 78, et seq., in accordance withthis Decision and the law.WHEREFORE, the instant Petition for Review on Certiorari is DENIED. The Decision of the Regional Trial Court dated September 29, 1997 andthe Decision of the Court of Appeals dated April 11, 2002, as well as its Resolution dated October 16, 2002, are VACATED. In lieu thereof, judgment ishereby rendered in favor of the respondents, to wit: (i) DECLARING the Deed of Absolute Transfer and/or Quitclaim dated January 5, 1983 NULL AND

VOID; and (ii) ORDERING the CANCELLATION of Transfer Certificates of Title Numbered T-40037 and T-40038 (Zamboanga del Norte) and the tax

declaration covering the unregistered parcel of land, all issued in the names of the petitioners Lydia, Laurito, Alicia, Alejandro and Lirafe, all surnamedSumipat, and the REINSTATEMENT of Original Certificate of Title No. P-17842 (Zamboanga del Norte) Transfer Certificate Title No. T-15826(Zamboanga del Norte) and the tax declaration covering the unregistered parcel of land, all in the name of "Lauro Sumipat . . . married to PlacidaTabotabo."Costs against the petitioners.SO ORDERED.























