Gacos v.

Court of Appeals
August 3, 1992
Medialdea, J.

Facts:

= lease
= sold

Petrona Gacos Marcial Olaybal Rosario Gacos Arnulfo Prieto

Vivencia Prieto

Lucia Gacos (on behalf of Petrona) Teodolfo Mendones Gabitos spouses

Eladio Gacos owned unregistered land measuring 6,548 m2. When he

was ill during 1935 or 1936, he verbally adjudicated to his three daughters
(Petrona, Fortunata, Lucia) their respective inheritance shares by dividing the
property lines from east to west and assigned the northernmost to Fortunata,
the middle to Lucia, and the southernmost to Petrona. Petrona immediately
took possession and occupied her share while her sisters only did so after
their father died in 1937.

In 1948, Petrona Gacos offered to sell to Marcial Olaybal (her nephew-

in-law, Fortunatas son-in-law) part of her share. The transaction was
consummated in a document Escritura Venta Absoluta describing therein the
land inherited by Petrona Gacos as containing an area of 2,720 m2. Marcial
Olaybal immediately took possession of the land and declared it in his name
under Tax Declaration No. 5487, indicating therein an area of 866 m2.

In 1949, Petrona Gacos died and was survived by her minor children
Leonora, Solomon, Constantino, and Benjamin, all surnamed Briones. Before
her death, Petrona Gacos instructed her sister Lucia, who administered her
remaining property, to sell the small area on the east for funeral expenses
and novena. Lucia sold aforementioned area (84 m2) to Teodolfo Mendones,
who took possession of the land and declared the same in his name.

In May 1950, Lucia Gacos on her own behalf and in representation of

Petrona Gacos, and Jose Cambal, in behalf of his dead mother, Fortunata
Gacos, executed an Agreement of Partition of Real Property, formally
confirming what was apportioned to them by their father as their respective
shares in the 6,854 m2 land.
 On or about December 1950, Marcial Olaybal offered to sell to
Encarnacion Gacos the parcel of land he bought from Petrona Gacos. When
the sale was consummated, the name Rosario Gacos (Encarnacions sister)
appeared as the vendee. The property sold was described as containing an
area of 2,025 m2. Rosario Gacos took possession of the land and registered
the deed of absolute sale and declared the same in her name.

In 1967, Rosario Gacos executed a document captioned Ratification of

Ownership of Realty consolidating into one parcel of land for taxation
purposes the four small adjoining parcels of land. In 1973, Rosario Gacos sold
the contiguous land to her nephew, Arnulfo Prieto (son of Encarnacion).
Arnulfo Prieto took possession of the land and declared the same in his
name. In March 1975, Arnulfo Prieto entered into a lease contract with his
sister Vivencia Prieto, allowing her to use the land for her own purposes.
Vivencia Prieto then constructed a rice mill.

In August 1975, the children of Petrona Gacos (Leonora, Solomon,

Constantino, Benjamin) executed a Deed of Extra-Judicial Settlement
adjudicating onto themselves the 1/3 undivided portion of the 2,242 m2 of
their mothers share of inheritance after Leonora was informed in 1972 by
Lucia Gacos that a portion of the land had been sold to Encarnacion Gacos
even though Rosario Gacos appeared in the deed of sale as the vendee, and
that a rice mill had been constructed.

Civil Case No. 1008

The children of Petrona Gacos (all surnamed Briones) filed a complaint

in the CFI of Sorsogon seeking to recover the 1,352 m2 land from defendants
Rosario Gacos and Arnulfo Prieto, alleged to be the remnant of the 2,242 m2
land Petrona Gacos inherited from her father after she sold a portion to
Marcial Olaybal. They allege that Rosario Gacos had no lawful authority to
sell the land to Arnulfo Prieto, who despite demands made, refused to return
the same to the Brioneses.

Defendants allege that what Petrona sold to Marcial Olaybal wasnt a

portion of her land, but the entire thing. Thus, there is no remnant. They also
contend that since plaintiffs are no longer owners of the land in dispute since
1948, they have no legal right to intervene in the execution of the said
Ratification of Ownership by Rosario Gacos; that because of the continued
possession for 27 years of the land by Arnulfo Prieto and that of his
predecessor-in-interest Rosario Gacos, whatever rights plaintiffs had have
already been barred by acquisitive prescription.
Civil Case No. 1049

Spouses Arnulfo Prieto and Renita Chua Prieto filed a complaint with
the CFI of Sorsogon seeking to recover from Teodolfo Mendones and
Visitaction Borrega and spouses Jesus and Merced Gabitos the 84 m2 portion
of the hereditary share of Petrona Gacos which, according to plaintiffs, such
hereditary portion was entirely sold to Marcial Olaybal. They claimed that the
eastern portion was fraudulently and without authority sold by Lucia Gacos
to Teodolfo Mendones who sold it to spouses Gabitos who then constructed a
residential house that blocked from public view the Prieto Rice Mill and
damaged their business.

Defendants counter that Marcial Olaybal couldnt have sold the entirety
of the hereditary estate because what was sold was 866 m2 of the total area
of 2,242 m2; that the Mendoneses acquired that 84 m2 portion in good faith
and for value; that the Mendoneses have the right to legally sell the same to
the Gabitos; that the Gabitos have the right to the exercise of their right of
dominion over the lot by building a house thereon.

CFI of Sorsogon rendered the decision in Civil Case No. 1008 that the
Brioneses were the owners of the 1,292 m2 portion of the land in dispute, and
in Civil Case No. 1049 that the Gabitos were the owners and entitled to the
possession of the land in question. The Prietos appealed to the Court of
Appeals, which affirmed the CFIs decision. The motion for reconsideration
was denied, hence the instant petition.

Issue/s:

- Whether or not Petrona Gacos sold her entire property to Marcial

Olaybal. (No)

Ruling/Ratio:

In disputing the findings of the Court of Appeals, petitioners argued

that the Escritura Venta Absoluta between Petrona Gacos and Marcial Olaybal
clearly indicate that the property conveyed is the entire lot. They contend
that in delineating the boundaries of the property sold, the
boundaries indicated in the deed of sale as enclosing the land and
indicating its limits put its identification beyond doubt and not the
area mentioned in its description.

The argument would have merit if the boundaries of the land

claimed by petitioners to have been sold to them in its entirety were
certain and definite. This is not true in the instant casethe
boundaries given dont coincide with the boundaries described in the Deed of
Absolute Sale between Marcial Olaybal and Rosario Gacos. They dont even
coincide with the boundaries of Petrona Gacos hereditary share.

The boundaries described in the Escritura Venta Absoluta are vague.

The variance in the boundaries and the statement of the area (a difference of
1,159 m2) put to doubt the identity of the land sold by Petrona Gacos to
Marcial Olaybal. The rule thus enunciated in the cases cited by petitioners
doesnt apply. Neither does the exception to the rule that area prevails when
the boundaries relied upon dont identify the land beyond doubt apply in the
instant case.

Recourse by the trial court therefore to other proofs was

warranted under the rules on interpretation of written agreements
under Rule 130, Section 7, paragraph (a) in relation to Article 137 of
the Civil Code.

The Court of Appeals correctly relied on Tax Declaration No.

5487 which Marcial Olaybal himself executed where he declared that the
land in dispute had an area of 866 m2 as well as the sketch plan and
the field sheet specifying the area of 866 m2 in both documents,
submitted by Marcial Olaybal. The Court of Appeals also relied on Marcial
Olaybals testimony during the trial that he bought only 866 m2 from
Petrona Gacos (admission of a party to a relevant fact under Rule 130,
Section 22 of the Rules of Court).

The boundaries stated in the Deed of Absolute Sale between

Marcial Olaybal and Rosario Gacos indicates that to the west of the area
were the heirs of Petrona Gacos, which clearly indicates that Petrona Gacos
didnt sell her entire share to Marcial Olaybal, neither did he sell the entire
property to Rosario Gacos for he cant sell what he doesnt own.

Petitioners also claimed that the sale of the disputed land is a

sale for lump sum, not at the rate per unit under Article 1542 of the Civil
Code where the vendor shall be bound to deliver all that is included
within said boundaries, even when it exceeds the area or number
specified in the contract.

The Supreme Court finds Articles 1372 and 1378 of the New
Civil Code more applicable.
 Art. 1372. However general the terms of a contract may
be, they shall not be understood to comprehend things that
are distinct and cases that are different from those upon
which the parties intended to agree. (1283)

Art. 1378. When it is absolutely impossible to settle doubts

by the rules established in the preceding articles, and the
doubts refer to incidental circumstances of a gratuitous
contract, the least transmission of rights and interests shall
prevail. If the contract is onerous, the doubt shall be
settled in favor of the greatest reciprocity of interests.

If the doubts are cast upon the principal object of the

contract in such a way that it cannot be known what may
have been the intention or will of the parties, the contract
shall be null and void. (1289)

The Escritura Venta Absoluta was consummated in favor of a

close relative. Thus, in accordance with Article 1378, said contract
should be interpreted as to effect the least possible transmission
of rights or interests. Petrona couldnt have sold her entire property
since she and her children were staying on it with her sister Lucia.

Petitioners argue that their continual possession in good faith and in

the concept of an owner with a just title for 27 years ripened into ownership
by acquisitive prescription. Possession to constitute the foundation of a
prescriptive right must be possession under claim of title or it must
be adverse. Acts of possessory character performed by one who holds by
mere tolerance of the owner are clearly not possession under claim of title
and dont start the running of the period of prescription.

Possession of petitioners predecessors-in-interest of the unsold portion

cant be characterized as adverse possession in good faith. Rosario Gacos
knew and recognized the sale by Lucia Gacos to Teodolfo Mendones of the
eastern portion. Petitioners never raised any objection on the exercise of
Teodolfo of his dominical rights over the said eastern portion.